2025 Interim Report 中期報告 Contents 目錄 Non-executive Directors: WENG Weijian (Resigned on 23 July 2025) HUANG Songqing WU Jingchao YU Xing (Appointed on 23 July 2025) Independent Non-executive Directors: LAM Kwong Siu NG Man Kung LIU Mei Ling Rhoda COMPANY SECRETARY CHAN Tao Ming AUDIT COMMITTEE | Corporate Information | 公司資料 | 2 | | --- | --- | --- | | Financial Summary | 財務摘要 | 4 | | Chairman's Statement | 主席報告 | 5 | | Management Discussion and Analysis | 管理層討論與分析 | 8 | | Biographies of Directors and | 董事及高 ...

[Definitions](index=4&type=section&id=Definitions) This chapter provides key term definitions used in the interim report to ensure clarity and consistency, covering core financial, legal, regulatory, and operational vocabulary - "Reporting Period" refers to the six months ended June 30, 2025[6](index=6&type=chunk) - "The Bank" or "We" refers to Bank of Tianjin Co., Ltd., a joint-stock company incorporated in Tianjin, China on November 6, 1996, including its predecessors, subsidiaries, branches, and sub-branches[5](index=5&type=chunk) [Company Profile and Overview](index=6&type=section&id=Company%20Profile%20and%20Overview) Bank of Tianjin Co., Ltd. (Stock Code 1578) is a Hong Kong-listed bank headquartered in Tianjin, with a registered capital of **RMB 6.071 billion** and a broad network of 223 operating institutions and financial subsidiaries - As of the end of June 2025, the company's registered capital was **RMB 6.071 billion**[7](index=7&type=chunk) - The equity structure shows domestic corporate shares at **65.41%**, domestic natural person shares at **5.52%**, and H-shares at **29.07%**[7](index=7&type=chunk) - The Bank operates **223 business institutions** nationwide, including 1 business department, 7 first-tier branches, 6 second-tier branches, and 6 central sub-branches[7](index=7&type=chunk) - The Bank established Tianyin Financial Leasing Co., Ltd., invested in Tianjin Jingdong Consumer Finance Co., Ltd., and initiated **7 JinHui Village Banks** in Ningxia and Xinjiang autonomous regions[7](index=7&type=chunk) Key Financial Data for H1 2025 (Consolidated) | Indicator | H1 2025 (RMB) | Change from Year-End (%) | | :--- | :------------------- | :--------------- | | Total Assets | 965.67 billion | 4.3 | | Total Liabilities | 895.76 billion | 4.6 | | Operating Revenue | 8.83 billion | 0.8 | | Total Profit | 2.14 billion | 4.9 | | Net Profit | 2.01 billion | 1.6 | [Strategic Positioning and Corporate Culture](index=9&type=section&id=Strategic%20Positioning%20and%20Corporate%20Culture) Guided by national and local strategies, the Bank aims to become a modern, first-class regional bank, focusing on research and technology to enhance core competitiveness, ecosystem services, and capital returns, while upholding integrity and prudent risk management - Vision: To build a modern, first-class regional bank that satisfies the Municipal Party Committee, reassures regulators, earns social praise, delights shareholders, and makes employees proud[14](index=14&type=chunk)[18](index=18&type=chunk) - Development Path: Internally build development capabilities (enhance core competitiveness, strengthen endogenous capacity to serve the economy); externally build development resources (improve ecosystem services, expand external space to serve society); reconstruct development mechanisms (enhance value innovation efficiency, strengthen comprehensive capital returns)[15](index=15&type=chunk)[18](index=18&type=chunk) - Risk Philosophy: Adhere to "honesty and trustworthiness, not crossing the bottom line; seeking profit with integrity, not solely for gain; prudence and caution, not seeking quick success; upholding integrity and innovation, not deviating from reality; legal compliance, not acting recklessly"[18](index=18&type=chunk) - Risk Prevention: Uphold the "five boundaries" (political, regulatory, operational, legal, capability) to prevent the "five major risks" (political, strategic, ecological, capability, operational)[18](index=18&type=chunk) [Honors, Awards, and Major Media Coverage](index=11&type=section&id=Honors%2C%20Awards%2C%20and%20Major%20Media%20Coverage) The Bank's market recognition significantly improved during the reporting period, earning multiple industry awards and extensive coverage in authoritative media, highlighting its excellence in business development, risk management, and social responsibility [Honors and Awards](index=11&type=section&id=I.%20Honors%20and%20Awards) The Bank received numerous honors and awards during the reporting period, including ranking 185th in The Banker's Top 1000 World Banks and excelling in financial technology innovation, wealth management, and green finance - Ranked **185th** in The Banker's Top 1000 World Banks 2025[21](index=21&type=chunk) - Awarded the "High-Quality Belt and Road Co-construction Award" by the Export-Import Bank of China for the 2024 Financial Bond Underwriting Market-Making Group[21](index=21&type=chunk) - Recognized as a "Rural Revitalization Pioneer" by the Agricultural Development Bank of China for the 2024 Financial Bond Underwriting Market-Making Institutions[21](index=21&type=chunk) - Received the "Jian An Qun Xing Hui Comprehensive Five-Star Award" for Bank Wealth Management Managers in 2024[21](index=21&type=chunk) - Won the Sina Finance 2025 Golden Stone Award for "Excellent Case in FinTech Innovation Services"[22](index=22&type=chunk) - The "AI Compliance Officer" Digitalization Project was selected as a Digital Inclusive Finance Technology Innovation Achievement[22](index=22&type=chunk) [Major Media Coverage](index=13&type=section&id=II.%20Major%20Media%20Coverage) During the reporting period, the Bank's business development and operations received extensive attention from authoritative media, covering its active practices and significant achievements in inclusive finance, strategic transformation, and digital finance - CNR reported Bank of Tianjin's "Smart Inclusive Finance" exceeded **RMB 20 billion** in 2024, achieving remarkable results (January 15, 2025)[25](index=25&type=chunk) - Xinhua Net reported Bank of Tianjin's deployment of development "transition" (January 20, 2025)[25](index=25&type=chunk) - Xinhua Net reported Bank of Tianjin's focus on fostering new quality productive forces, launching a "27 measures + **RMB 200 billion** financing" package to empower high-quality development in Binhai New Area (February 13, 2025)[26](index=26&type=chunk) - Xinhua Finance reported Bank of Tianjin's 2024 annual results: total profit exceeded **RMB 4 billion**, with a proposed cash dividend of **RMB 1.368** per 10 shares (March 20, 2025)[26](index=26&type=chunk) - Shanghai Securities News and China Securities Net reported Bank of Tianjin's 2024 annual dividend yield reached **8.1%**, ranking 2nd among H-share listed banks (April 6, 2025)[28](index=28&type=chunk) - CNR reported the official launch of Bank of Tianjin's multi-language mobile banking "Smart Connect in China," empowering international event services with smart finance (May 2, 2025)[29](index=29&type=chunk) [Summary of Accounting Data and Financial Indicators](index=19&type=section&id=Summary%20of%20Accounting%20Data%20and%20Financial%20Indicators) This chapter outlines the Bank's accounting data and financial indicators for the six months ended June 30, 2025, showing stable asset quality, increased provisions, but a slight decrease in capital adequacy ratios Operating Performance Summary (Six Months Ended June 30) | Indicator | 2025 (RMB Thousand) | 2024 (RMB Thousand) | Change (%) | | :--- | :------------------ | :------------------ | :--------- | | Interest Income | 15,142,643 | 15,953,844 | (5.1) | | Interest Expense | (9,219,329) | (9,922,051) | (7.1) | | Net Interest Income | 5,923,314 | 6,031,793 | (1.8) | | Investment Income | 1,266,927 | 1,498,719 | (15.5) | | Net Fee and Commission Income | 788,838 | 1,079,397 | (26.9) | | Net Trading Gains/(Losses) | 710,664 | 212,680 | 234.1 | | Operating Revenue | 8,828,439 | 8,756,662 | 0.8 | | Operating Expenses | (2,070,128) | (2,024,516) | 2.3 | | Impairment Losses | (4,629,974) | (4,702,872) | (1.6) | | Profit Before Tax | 2,138,770 | 2,038,561 | 4.9 | | Profit for the Period | 2,008,360 | 1,975,791 | 1.6 | | Earnings Per Share (RMB) | 0.33 | 0.32 | 3.1 | Key Asset/Liability Indicators (As of Period End) | Indicator | June 30, 2025 (RMB Thousand) | December 31, 2024 (RMB Thousand) | Change (%) | | :--- | :-------------------------- | :-------------------------- | :--------- | | Total Assets | 965,674,631 | 925,993,655 | 4.3 | | Loans and Advances to Customers | 471,033,192 | 440,779,383 | 6.9 | | Total Liabilities | 895,758,652 | 856,583,512 | 4.6 | | Customer Deposits | 533,951,884 | 500,957,014 | 6.6 | | Equity Attributable to Equity Holders of the Bank | 69,043,443 | 68,547,411 | 0.7 | | Net Assets Per Share Attributable to Equity Holders of the Bank (RMB) | 11.37 | 11.29 | 0.7 | Profitability Indicators (Six Months Ended June 30) | Indicator | 2025 (%) | 2024 (%) | Change (Percentage Points) | | :--- | :--------- | :--------- | :------------ | | Return on Average Total Assets | 0.42 | 0.45 | (0.03) | | Return on Average Equity | 5.77 | 5.99 | (0.22) | | Net Interest Margin | 1.56 | 1.68 | (0.12) | | Net Interest Spread | 1.47 | 1.60 | (0.13) | | Net Fee and Commission Income as % of Operating Income | 8.94 | 12.33 | (3.39) | | Cost-to-Income Ratio | 22.10 | 21.79 | 0.31 | Asset Quality and Capital Adequacy Ratio Indicators (As of Period End) | Indicator | June 30, 2025 (%) | December 31, 2024 (%) | Change (Percentage Points) | | :--- | :---------------- | :---------------- | :------------ | | Non-Performing Loan Ratio | 1.70 | 1.70 | – | | Provision Coverage Ratio | 171.29 | 169.21 | 2.08 | | Loan Loss Provision Ratio | 2.91 | 2.87 | 0.04 | | Common Equity Tier 1 Capital Adequacy Ratio | 9.26 | 9.53 | (0.27) | | Tier 1 Capital Adequacy Ratio | 10.17 | 10.47 | (0.30) | | Capital Adequacy Ratio | 13.45 | 13.59 | (0.14) | [Management Discussion and Analysis](index=24&type=section&id=Management%20Discussion%20and%20Analysis) This chapter discusses the Bank's operating environment, financial performance, business development, capital adequacy, and risk management strategies for H1 2025, highlighting steady growth amidst complex economic conditions and strategic advancements [Financial Review](index=24&type=section&id=I.%20Financial%20Review) This section reviews the Bank's H1 2025 financial performance, including macroeconomic conditions, overall operations, income statement, and balance sheet analysis, noting stable growth, increased risk resilience, but declining net interest margins [Environment and Outlook](index=24&type=section&id=1.%20Environment%20and%20Outlook) In H1 2025, China's economy showed steady progress with new achievements in high-quality development, while the Bank plans to maintain stability and pursue new development concepts in the second half of the year - China's economy maintained steady progress, achieving new results in high-quality development, with active development of new quality productive forces and deepening reform and opening-up[41](index=41&type=chunk) - H2 work priorities: Adhere to seeking progress while maintaining stability, implement new development concepts, stabilize employment, enterprises, markets, and expectations, and achieve municipal government and board objectives[41](index=41&type=chunk) [Overall Operating Performance](index=24&type=section&id=2.%20Overall%20Operating%20Performance) In H1 2025, the Bank achieved steady overall operating performance, robust profitability, and reasonable asset-liability growth through its 'Dual Five Campaigns 2.0' and 'Five Major Articles' strategies, enhancing risk resilience and investment returns - Implemented "Dual Five Campaigns 2.0," comprising five major offensives ("risk resolution, revenue, cost, deposits, litigation") and five acceleration battles ("capability and quality, structural transformation, business reshaping, digital banking, supervisory coordination")[42](index=42&type=chunk) H1 2025 Operating Results | Indicator | Amount (RMB) | YoY Growth (%) | | :--- | :------------ | :----------- | | Operating Revenue | 8.83 billion | 0.8 | | Total Profit | 2.14 billion | 4.9 | | Net Profit | 2.01 billion | 1.6 | | Net Interest Margin | 1.47% | Flat | | Net Interest Spread | 1.56% | Up 0.01 percentage points | - Total assets **RMB 965.675 billion**, up **4.3%** from year-end; loan balance up **6.9%** from year-end[43](index=43&type=chunk) - Total liabilities **RMB 895.76 billion**, up **4.6%** from year-end; deposit balance up **6.6%** from year-end[43](index=43&type=chunk) - Non-performing loan ratio **1.70%** (flat), provision coverage ratio **171.29%** (up **2.08 percentage points**)[44](index=44&type=chunk) - Earnings per share **RMB 0.33** (up **3.1%** YoY), 2024 annual dividend **RMB 1.368** per 10 shares (up **14.0%** YoY)[44](index=44&type=chunk) - Technology Finance: Loan balance to technology innovation enterprises increased by **22.58%** from year-end; lead-underwrote technology innovation bonds totaling **RMB 3.635 billion**[45](index=45&type=chunk) - Green Finance: Green loan balance **RMB 39.214 billion**, up **13.98%** from year-end; green bond underwriting and investment scale increased by **533.7%** and **45.5%** YoY, respectively[46](index=46&type=chunk) - Inclusive Finance: Provided new credit to **1,464** "recommended list" enterprises in Tianjin, totaling **RMB 5.778 billion**; corporate inclusive loan disbursement increased by **43.20%** YoY[46](index=46&type=chunk) - Pension Finance: Public welfare pension loan balance increased by **315%** from year-end; invested **RMB 1.56 billion** in pension industry-related bonds[47](index=47&type=chunk) - Digital Finance: Upgraded Mobile Banking 8.0, launched multi-language "Smart Connect in China"; personal mobile banking users increased by **19.1%** from the beginning of the year[47](index=47&type=chunk) - Deepened the two era genes of research and technology, with AI empowering **8 major smart application projects** and **43 smart application scenarios** already implemented[51](index=51&type=chunk) [Income Statement Analysis](index=29&type=section&id=3.%20Income%20Statement%20Analysis) The Bank's H1 2025 profit before tax increased by **4.9%** to **RMB 2.14 billion**, and net profit rose by **1.6%** to **RMB 2.01 billion**, despite declining net interest margins due to market rate changes and fee reduction policies H1 2025 Income Statement Key Data | Indicator | 2025 (RMB Thousand) | 2024 (RMB Thousand) | Change (%) | | :--- | :------------------ | :------------------ | :--------- | | Profit Before Tax | 2,138,770 | 2,038,561 | 4.9 | | Net Profit | 2,008,360 | 1,975,791 | 1.6 | | Net Interest Margin | 1.56% | 1.68% | (0.12) | | Net Interest Spread | 1.47% | 1.60% | (0.13) | | Interest Income | 15,142,643 | 15,953,844 | (5.1) | | Interest Expense | (9,219,329) | (9,922,051) | (7.1) | | Investment Income | 1,266,927 | 1,498,719 | (15.5) | | Net Fee and Commission Income | 788,838 | 1,079,397 | (26.9) | | Net Trading Gains/(Losses) | 710,664 | 212,680 | 234.1 | | Operating Expenses | (2,070,128) | (2,024,516) | 2.3 | | Impairment Losses | (4,629,974) | (4,702,872) | (1.6) | | Income Tax Expense | (130,410) | (62,770) | 107.8 | - The decrease in interest income was primarily due to the national policy of reducing financing costs for the real economy and declining market interest rates[63](index=63&type=chunk)[64](index=64&type=chunk)[67](index=67&type=chunk)[68](index=68&type=chunk) - The decrease in interest expense was mainly attributed to optimized liability structure and diversified funding sources, with the interest rate on interest-bearing liabilities decreasing by **35 basis points** year-on-year[71](index=71&type=chunk)[72](index=72&type=chunk) - Net trading gains/(losses) significantly increased by **234.1%**, primarily due to the Bank effectively seizing market opportunities[81](index=81&type=chunk) - Impairment losses decreased by **1.6%** year-on-year, mainly due to the Bank accelerating the collection and disposal of non-performing assets[94](index=94&type=chunk) [Balance Sheet Analysis](index=42&type=section&id=4.%20Balance%20Sheet%20Analysis) As of June 30, 2025, the Bank's total assets reached **RMB 965.67 billion**, up **4.3%** from year-end, driven by increased support for the real economy and growth in customer loans and deposits, while shareholder equity also saw a modest increase Asset Composition as of June 30, 2025 | Indicator | June 30, 2025 (RMB Million) | % of Total | December 31, 2024 (RMB Million) | % of Total | Change (%) | | :--- | :-------------------------- | :--------------- | :-------------------------- | :--------------- | :--------------- | | Net Loans and Advances to Customers | 471,033.2 | 48.8 | 440,779.4 | 47.6 | 6.9 | | Net Investment Securities and Other Financial Assets | 362,279.2 | 37.5 | 363,396.7 | 39.2 | (0.3) | | Cash and Balances with Central Bank | 38,562.1 | 4.0 | 57,383.7 | 6.2 | (32.8) | | Balances with Banks and Other Financial Institutions | 14,120.6 | 1.5 | 2,960.1 | 0.3 | 377.0 | | Placements with Banks and Other Financial Institutions | 38,812.2 | 4.0 | 45,391.5 | 4.9 | (14.5) | | Financial Assets Held Under Resale Agreements | 26,406.6 | 2.7 | 40.0 | 0.0 | 65,916.5 | | Total Assets | 965,674.6 | 100.0 | 925,993.7 | 100.0 | 4.3 | - Total assets increased by **4.3%**, primarily due to increased support for the real economy and effective growth in loans and advances to customers[100](index=100&type=chunk) Loans and Advances to Customers by Business Segment | Loan Type | June 30, 2025 (RMB Million) | % of Total | December 31, 2024 (RMB Million) | % of Total | Change (%) | | :--- | :-------------------------- | :--------------- | :-------------------------- | :--------------- | :--------------- | | Corporate Loans | 364,672.2 | 75.3 | 333,991.4 | 73.6 | 9.2 | | Personal Loans | 89,413.6 | 18.4 | 97,311.5 | 21.5 | (8.1) | | Bill Discounting | 29,700.6 | 6.1 | 21,449.8 | 4.7 | 38.5 | | Total | 484,969.0 | 100.0 | 453,655.5 | 100.0 | 6.9 | - Personal loans decreased by **8.1%**, mainly due to continuous adjustment of internet loan asset structure and moderate reduction in internet cooperation loan scale[109](index=109&type=chunk) Liability Composition as of June 30, 2025 | Indicator | June 30, 2025 (RMB Million) | % of Total | December 31, 2024 (RMB Million) | % of Total | Change (%) | | :--- | :-------------------------- | :--------------- | :-------------------------- | :--------------- | :--------------- | | Customer Deposits | 533,951.9 | 59.6 | 500,957.0 | 58.5 | 6.6 | | Debt Securities Issued | 147,761.4 | 16.5 | 109,964.3 | 12.9 | 34.4 | | Deposits from Banks and Other Financial Institutions | 36,879.5 | 4.1 | 64,344.6 | 7.5 | (42.7) | | Total Liabilities | 895,758.7 | 100.0 | 856,583.5 | 100.0 | 4.6 | - Customer deposits increased by **6.6%**, with personal deposits up **8.3%** and corporate deposits up **5.6%**[128](index=128&type=chunk)[131](index=131&type=chunk) - Debt securities issued increased by **34.4%**, primarily due to proactive adjustment of liability structure and increased bond issuance[132](index=132&type=chunk) - Deposits from banks and other financial institutions decreased by **42.7%**, mainly due to moderate adjustment of liability business structure[133](index=133&type=chunk) - Total shareholders' equity **RMB 69.92 billion**, an increase of **0.7%** from year-end[141](index=141&type=chunk) [Off-Balance Sheet Items Analysis](index=57&type=section&id=5.%20Off-Balance%20Sheet%20Items%20Analysis) As of June 30, 2025, the Bank's total credit commitments increased by **15.6%** to **RMB 159.56 billion**, driven by a significant rise in unused corporate loan facilities, while unused credit card limits slightly decreased Contractual Amounts of Credit Commitments | Indicator | June 30, 2025 (RMB Million) | December 31, 2024 (RMB Million) | Change (%) | | :--- | :-------------------------- | :-------------------------- | :--------- | | Bank Acceptance Bills | 70,725.0 | 66,867.1 | 5.8 | | Unused Corporate Loan Facilities | 43,661.6 | 25,872.5 | 68.8 | | Unused Credit Card Limits | 6,386.7 | 7,395.3 | (13.6) | | Letters of Credit | 29,332.0 | 28,466.3 | 3.0 | | Guarantees | 9,453.3 | 9,480.7 | (0.3) | | Total | 159,558.6 | 138,081.9 | 15.6 | [Credit Quality Analysis](index=58&type=section&id=6.%20Credit%20Quality%20Analysis) As of June 30, 2025, the Bank's asset quality remained stable with a non-performing loan ratio of **1.68%**, while corporate NPLs decreased due to disposals, personal NPLs increased, and loan loss provisions rose to enhance risk coverage Five-Category Loan Classification Distribution | Classification | June 30, 2025 (RMB Million) | % of Total | December 31, 2024 (RMB Million) | % of Total | Change (%) | | :--- | :-------------------------- | :--------------- | :-------------------------- | :--------------- | :--------------- | | Normal | 460,612.9 | 94.98 | 430,880.8 | 94.98 | 6.90 | | Special Mention | 16,220.3 | 3.34 | 15,165.2 | 3.34 | 6.96 | | Non-Performing Loans | 8,135.8 | 1.68 | 7,609.5 | 1.68 | 6.92 | | Total Loans and Advances to Customers | 484,969.0 | 100.00 | 453,655.5 | 100.00 | 6.90 | - Non-performing loan ratio was **1.68%**, flat compared to year-end[146](index=146&type=chunk) - Corporate customer non-performing loan ratio was **1.35%**, down **0.1 percentage points** from year-end, mainly due to strengthened non-performing loan disposal[154](index=154&type=chunk)[161](index=161&type=chunk) - Personal customer non-performing loan ratio was **3.57%**, up **0.73 percentage points** from year-end, mainly affected by internet loan structure adjustments and the macroeconomic environment[161](index=161&type=chunk) - Loan impairment loss provisions were **RMB 13.94 billion**, an increase of **8.2%** from year-end, primarily due to increased provision accruals[172](index=172&type=chunk) Loans to Top Ten Single Borrowers (As of June 30, 2025) | Borrower | Industry | Amount (RMB Million) | % of Total Loans | % of Regulatory Capital | | :--- | :--- | :------------------ | :------------------- | :------------------- | | Borrower A | Leasing and Business Services | 5,075.5 | 1.05 | 5.08 | | Borrower B | Leasing and Business Services | 4,895.0 | 1.01 | 4.90 | | Borrower C | Financial Industry | 4,507.0 | 0.93 | 4.51 | | Borrower D | Leasing and Business Services | 4,052.5 | 0.84 | 4.05 | | Borrower E | Financial Industry | 3,712.5 | 0.77 | 3.71 | | Borrower F | Leasing and Business Services | 3,687.0 | 0.76 | 3.69 | | Borrower G | Leasing and Business Services | 3,676.0 | 0.76 | 3.68 | | Borrower H | Real Estate Industry | 3,669.3 | 0.76 | 3.67 | | Borrower I | Leasing and Business Services | 3,410.0 | 0.69 | 3.41 | | Borrower J | Leasing and Business Services | 3,190.0 | 0.65 | 3.19 | | Total | | 39,874.8 | 8.22 | 39.89 | [Business Review](index=68&type=section&id=II.%20Business%20Review) This section reviews the Bank's business segments, showing **13.0%** growth in corporate banking revenue, **2.1%** in personal banking, and a **20.6%** decline in treasury operations, while comprehensive operations through subsidiaries also contributed [Business Segment Report](index=68&type=section&id=1.%20Business%20Segment%20Report) The Bank's business segments include corporate banking, personal banking, treasury operations, and others, with corporate banking revenue up **13.0%**, personal banking up **2.1%**, and treasury operations down **20.6%**, while subsidiaries also contributed to comprehensive operations Operating Revenue by Major Segment (Six Months Ended June 30) | Business Segment | 2025 (RMB Million) | % of Total | 2024 (RMB Million) | % of Total | Change (%) | | :--- | :------------------- | :--------------- | :------------------- | :--------------- | :--------------- | | Corporate Banking Business | 4,720.8 | 53.5 | 4,178.1 | 47.7 | 13.0 | | Personal Banking Business | 2,227.1 | 25.2 | 2,181.2 | 25.0 | 2.1 | | Treasury Operations Business | 1,907.2 | 21.6 | 2,402.3 | 27.4 | (20.6) | | Others | (26.7) | (0.3) | (4.9) | (0.1) | (444.9) | | Total | 8,828.4 | 100.0 | 8,756.7 | 100.0 | 0.8 | - Corporate Banking Business: Operating revenue **RMB 4.72 billion** (up **13.0%** YoY); corporate loan balance **RMB 364.67 billion** (up **9.2%** from year-end); corporate deposit total **RMB 297.09 billion** (up **5.6%** from year-end)[177](index=177&type=chunk) - Corporate Banking Business: During the reporting period, new loans of **RMB 8.538 billion** were provided for Tianjin's "Ten Actions" fixed asset construction projects; green loan balance **RMB 39.214 billion** (up **13.98%** from year-end); lead-underwrote technology innovation bonds totaling **RMB 3.635 billion**[178](index=178&type=chunk)[179](index=179&type=chunk)[180](index=180&type=chunk) - Personal Banking Business: Operating revenue **RMB 2.23 billion** (up **2.1%** YoY); personal loan balance **RMB 89.41 billion** (down **8.1%**); personal deposit total **RMB 213.90 billion** (up **8.3%** from year-end)[185](index=185&type=chunk) - Personal Banking Business: Multi-language mobile banking "Smart Connect in China" launched; total retail APP signed customers **5.0101 million** (up **19.12%** from year-end)[188](index=188&type=chunk) - Small and Micro Inclusive Finance Business: Provided credit to **1,464** "recommended list" enterprises in Tianjin, totaling **RMB 5.778 billion**; cumulatively provided credit support of **RMB 4.736 billion** to customers in agriculture-related areas[189](index=189&type=chunk)[190](index=190&type=chunk) - Treasury Operations Business: Operating revenue **RMB 1.91 billion** (down **20.6%** YoY), primarily due to declining market yields and reduced interest income[191](index=191&type=chunk) - Treasury Operations Business: Cumulatively underwrote national bonds, local government bonds, and policy bank financial bonds totaling **RMB 85.402 billion** (up **22%** YoY)[196](index=196&type=chunk) - Diversified Operations: Tianyin Financial Leasing Co., Ltd. achieved operating revenue of **RMB 269 million**; successfully launched its first satellite equipment direct leasing project[200](index=200&type=chunk) [Capital Adequacy Ratio Analysis](index=80&type=section&id=III.%20Capital%20Adequacy%20Ratio%20Analysis) As of June 30, 2025, the Bank's capital adequacy, Tier 1, and Common Equity Tier 1 ratios met regulatory requirements at **13.45%**, **10.17%**, and **9.26%** respectively, though all decreased slightly due to increased credit support for the real economy Capital Adequacy Ratio Indicators (As of Period End) | Indicator | June 30, 2025 (%) | December 31, 2024 (%) | Change (Percentage Points) | | :--- | :---------------- | :---------------- | :------------ | | Common Equity Tier 1 Capital Adequacy Ratio | 9.26 | 9.53 | (0.27) | | Tier 1 Capital Adequacy Ratio | 10.17 | 10.47 | (0.30) | | Capital Adequacy Ratio | 13.45 | 13.59 | (0.14) | - The decrease in capital adequacy ratios across all tiers from the beginning of the year was mainly due to the Bank's increased support for the real economy and higher credit disbursement[202](index=202&type=chunk) - As of the end of the reporting period, the Bank's leverage ratio was **7.05%**, a decrease of **0.28 percentage points** from year-end[205](index=205&type=chunk)[206](index=206&type=chunk) [Risk Management](index=82&type=section&id=IV.%20Risk%20Management) The Bank continuously strengthens comprehensive risk management, covering credit, operational, market, liquidity, and information technology risks, by enhancing governance, implementing smart compliance systems, and optimizing monitoring and control strategies - Continuously strengthened comprehensive risk management, formulating and improving systems for risk identification, measurement, monitoring, control, mitigation, and reporting[207](index=207&type=chunk) - Credit Risk: Established credit risk management mechanisms, systems, and processes commensurate with business nature, scale, and complexity, implementing a unified credit granting system and utilizing tools like credit ratings and limit management[208](index=208&type=chunk)[210](index=210&type=chunk) - Operational Risk: Improved the operational risk management system, implementing three key tools: operational risk and control self-assessment, key risk indicators, and operational risk event collection[211](index=211&type=chunk) - Operational Risk: Launched the "AI Compliance Officer" system, utilizing machine learning and deep learning algorithms to analyze, interpret, and provide intelligent Q&A for regulatory policies and compliance requirements[212](index=212&type=chunk) - Market Risk: Closely monitored macroeconomic and financial conditions, strengthening market risk monitoring and management, primarily covering interest rate risk and exchange rate risk[214](index=214&type=chunk)[215](index=215&type=chunk) - Liquidity Risk: Adopted a centralized management model, monitoring multiple key liquidity indicators, conducting liquidity risk stress tests, and formulating and implementing management strategies to optimize the asset-liability structure[219](index=219&type=chunk) - Information Technology Risk: Continuously strengthened IT risk management, optimized threshold settings for key IT risk monitoring indicators, and organized various emergency scenario drills for IT outsourcing continuity assurance[220](index=220&type=chunk) [Changes in Share Capital and Shareholder Information](index=87&type=section&id=Changes%20in%20Share%20Capital%20and%20Shareholder%20Information) As of June 30, 2025, the Bank's total share capital remained unchanged at **6.071 billion shares**, with minor adjustments in domestic corporate and natural person share proportions, and no actual controller [Changes in the Bank's Shares](index=87&type=section&id=I.%20Changes%20in%20the%20Bank%27s%20Shares) As of June 30, 2025, the Bank's total share capital and registered capital remained unchanged at **6.071 billion shares** and **RMB 6.071 billion** respectively, with slight shifts in domestic shareholding percentages - As of the end of the reporting period, the Bank's total share capital was **6,070,551,822 shares**, and its registered capital was **RMB 6,070,551,822**, with no changes during the reporting period[222](index=222&type=chunk) Changes in Share Capital (As of June 30, 2025) | Share Type | Number of Shares as of Jan 1, 2025 | % of Total Share Capital | Change in Shares During Reporting Period | Number of Shares as of June 30, 2025 | % of Total Share Capital | | :--- | :--------------- | :----------- | :--------------- | :--------------- | :----------- | | Domestic Corporate Shares | 3,974,164,747 | 65.47% | (3,320,032) | 3,970,844,715 | 65.41% | | Domestic Natural Person Shares | 331,788,012 | 5.46% | 3,320,032 | 335,108,044 | 5.52% | | H-Shares | 1,764,599,063 | 29.07% | – | 1,764,599,063 | 29.07% | | Total Shares | 6,070,551,822 | 100% | – | 6,070,551,822 | 100% | [Shareholding of Top Ten Shareholders](index=88&type=section&id=II.%20Shareholding%20of%20Top%20Ten%20Shareholders) As of the end of the reporting period, the Bank's top ten shareholders collectively held **59.72%** of the shares, with Tianjin Binhai New Area Investment Co., Ltd. being the largest single shareholder at **15.94%** Shareholding of Top Ten Shareholders (As of June 30, 2025) | No. | Shareholder Name | Share Type | Total Shares Held at Period End (shares) | % of Total Share Capital at Period End | | :--- | :--- | :--- | :------------------- | :--------------- | | 1 | Tianjin Free Trade Zone Investment Co., Ltd. | Domestic Corporate Shares | 967,462,369 | 15.94 | | 2 | Australia and New Zealand Banking Group Limited | H-Shares | 725,644,563 | 11.95 | | 3 | Tianjin Pharmaceutical Group Co., Ltd. | Domestic Corporate Shares | 487,713,488 | 8.03 | | 4 | Tianjin Bohai Chemical Industry Group Co., Ltd. | Domestic Corporate Shares | 487,078,366 | 8.02 | | 5 | CSSC International Holdings Limited | H-Shares | 303,193,000 | 4.99 | | 6 | Harbin Economic Development Investment Co., Ltd. | Domestic Corporate Shares | 166,657,161 | 2.75 | | 7 | Tianjin Hi-Tech Holding Group Co., Ltd. | Domestic Corporate Shares | 149,056,239 | 2.46 | | 8 | Tianjin Jinrong Investment Service Group Co., Ltd. | Domestic Corporate Shares | 117,378,125 | 1.93 | | 9 | Tianjin Ningfu Investment Co., Ltd. | Domestic Corporate Shares | 114,278,299 | 1.88 | | 10 | Hong Kong Bohai Leasing Asset Management Co., Ltd. | H-Shares | 106,993,500 | 1.76 | | Total | | | 3,625,455,110 | 59.72 | [Shareholder Information](index=89&type=section&id=III.%20Shareholder%20Information) As of the end of the reporting period, the Bank had **7,226 shareholders** and no actual controller, with disclosures made for shareholders holding **5%** or more equity as per SFO regulations - As of the end of the reporting period, the Bank had a total of **7,226 shareholders**[226](index=226&type=chunk) - During the reporting period, the Bank had no actual controller[226](index=226&type=chunk) Interests and Short Positions in Hong Kong under SFO (Shareholders Holding 5% or More Shares) | Shareholder Name | Nature of Interest | Class of Shares | Number of Shares Held (Long Position) | Approximate % of the Bank's Equity | | :--- | :--- | :--- | :------------------- | :------------------- | | Tianjin Free Trade Zone Investment Co., Ltd. | Beneficial Interest | Domestic Shares | 967,462,369 | 15.94 | | Australia and New Zealand Banking Group Limited | Beneficial Interest | H-Shares | 725,644,563 | 11.95 | | Tianjin Bohai Chemical Industry Group Co., Ltd. | Beneficial Interest | Domestic Shares | 489,857,052 | 8.07 | | Tianjin Pharmaceutical Group Co., Ltd. | Beneficial Interest | Domestic Shares | 489,107,183 | 8.06 | [Shareholders Holding 5% or More of the Bank's Share Capital](index=91&type=section&id=IV.%20Shareholders%20Holding%205%25%20or%20More%20of%20the%20Bank%27s%20Share%20Capital) This section reiterates detailed information on shareholders holding **5%** or more of the Bank's share capital, as already presented in 'III. Shareholder Information' [Purchase, Sale, and Redemption of the Bank's Listed Securities](index=91&type=section&id=V.%20Purchase%2C%20Sale%2C%20and%20Redemption%20of%20the%20Bank%27s%20Listed%20Securities) During the reporting period, neither the Bank nor its subsidiaries purchased, sold, or redeemed any of its listed securities, nor did they hold any treasury shares as of the period end - During the reporting period, neither the Bank nor any of its subsidiaries purchased, sold, or redeemed any of the Bank's listed securities (including the sale of treasury shares)[231](index=231&type=chunk) - As of the end of the reporting period, neither the Bank nor any of its subsidiaries held any treasury shares[231](index=231&type=chunk) [Directors, Supervisors, Senior Management, and Employees](index=92&type=section&id=Directors%2C%20Supervisors%2C%20Senior%20Management%2C%20and%20Employees) This chapter lists the Bank's current directors, supervisors, and senior management, details personnel changes, and outlines employee demographics, compensation policies, and training programs aimed at enhancing professional capabilities and party spirit [Current Directors, Supervisors, and Senior Management](index=92&type=section&id=I.%20Current%20Directors%2C%20Supervisors%2C%20and%20Senior%20Management) The Bank's current board comprises 4 executive, 6 non-executive, and 5 independent non-executive directors, with Mr. Yu Jianzhong as Chairman, and a supervisory board led by Mr. Huang Yongxin, alongside other senior management List of Current Directors | Name | Position | Appointment Date for 8th Board of Directors | | :--- | :--- | :--------------- | | Mr. Yu Jianzhong | Executive Director, Chairman | April 17, 2025 | | Mr. Wu Hongtao | Executive Director, President | April 17, 2025 | | Mr. Zheng Ke | Executive Director, Vice President | April 17, 2025 | | Ms. Dong Xiaodong | Executive Director, Board Secretary | April 17, 2025 | | Ms. Dong Guangpei | Non-Executive Director | April 17, 2025 | | Mr. Peng Chong | Non-Executive Director | April 17, 2025 | | Mr. Brett H. H. Budge | Non-Executive Director | April 17, 2025 | | Mr. Xing Jianhua | Non-Executive Director | June 10, 2025 | | Mr. Wang Shunlong | Non-Executive Director | April 17, 2025 | | Mr. Wang Shanjun | Non-Executive Director | June 10, 2025 | | Mr. Zeng Jianhua | Independent Non-Executive Director | April 17, 2025 | | Mr. Lu Jianzhong | Independent Non-Executive Director | April 17, 2025 | | Mr. Gu Chaoyang | Independent Non-Executive Director | April 17, 2025 | | Mr. Feng Jinghua | Independent Non-Executive Director | April 17, 2025 | | Mr. Peng Bing | Independent Non-Executive Director | April 17, 2025 | List of Current Supervisors | Name | Position | Appointment Date | | :--- | :--- | :--- | | Mr. Huang Yongxin | Employee Supervisor, Chairman of the Supervisory Board | May 28, 2024 | | Ms. Peng Junying | Employee Supervisor | December 22, 2023 | | Mr. Wu Chong | Shareholder Representative Supervisor | May 18, 2023 | | Mr. Liu Baorui | External Supervisor | February 28, 2022 | | Mr. Luo Yikun | External Supervisor | August 18, 2022 | List of Other Senior Management | Name | Position | | :--- | :--- | | Mr. Liu Gangling | Vice President | | Mr. Chen Peng | Vice President, Chief Information Officer | | Mr. Xia Zhenwu | Assistant President | [Changes in Directors, Supervisors, and Senior Management During the Reporting Period](index=94&type=section&id=II.%20Changes%20in%20Directors%2C%20Supervisors%2C%20and%20Senior%20Management%20During%20the%20Reporting%20Period) During the reporting period, several independent non-executive and non-executive directors resigned due to term expiration or work transfers, while new directors were appointed and senior management positions were re-elected - Mr. He Jia and Mr. Jin Qingjun resigned as independent non-executive directors and from relevant special committee positions on January 24, 2025, due to completing their six-year terms[239](index=239&type=chunk) - The qualifications of Mr. Feng Jinghua and Mr. Peng Bing as independent non-executive directors were approved by regulatory authorities on January 24, 2025[239](index=239&type=chunk) - Mr. Zhao Wei and Ms. Li Jun resigned as non-executive directors and from relevant board special committee responsibilities on March 20, 2025, due to work transfers[241](index=241&type=chunk) - On April 17, 2025, the annual general meeting approved the re-election and appointment of directors for the Eighth Board of Directors[242](index=242&type=chunk) - The qualifications of Mr. Xing Jianhua and Mr. Wang Shanjun as directors were approved by regulatory authorities on June 10, 2025[242](index=242&type=chunk) - On April 17, 2025, the Board re-elected Mr. Yu Jianzhong as Chairman, Mr. Wu Hongtao as President, Mr. Liu Gangling and Mr. Zheng Ke as Vice Presidents, Mr. Chen Peng as Vice President and Chief Information Officer, Mr. Xia Zhenwu as Assistant President, and Ms. Dong Xiaodong as Board Secretary and Joint Company Secretary[243](index=243&type=chunk) [Company Secretary](index=96&type=section&id=III.%20Company%20Secretary) Ms. Dong Xiaodong and Dr. Ng Wai Fung have served as Joint Company Secretaries since January 2021 and September 2015, respectively, with Ms. Dong being the primary contact person for Dr. Ng - Ms. Dong Xiaodong and Dr. Ng Wai Fung have served as Joint Company Secretaries of the Bank since January 2021 and September 2015, respectively[244](index=244&type=chunk) [Securities Transactions by Directors, Supervisors, and Relevant Employees](index=96&type=section&id=IV.%20Securities%20Transactions%20by%20Directors%2C%20Supervisors%2C%20and%20Relevant%20Employees) The Bank has adopted the Model Code for Securities Transactions by Directors of Listed Issuers, and all directors and supervisors confirmed compliance with this code during the reporting period - The Bank has adopted the Model Code for Securities Transactions by Directors of Listed Issuers as set out in the Hong Kong Listing Rules as its code governing securities transactions by directors and supervisors[245](index=245&type=chunk) - All directors and supervisors of the Bank confirmed their continuous compliance with the Model Code during the reporting period[246](index=246&type=chunk) [Interests of Directors, Chief Executive, and Supervisors in the Bank's Shares](index=96&type=section&id=V.%20Interests%20of%20Directors%2C%20Chief%20Executive%2C%20and%20Supervisors%20in%20the%20Bank%27s%20Shares) As of the reporting period end, only Ms. Dong Xiaodong, Ms. Peng Junying, and Mr. Liu Baorui held minor interests in the Bank's domestic shares, all below **0.001%**, with no other directors, chief executives, or supervisors holding any interests Interests of Directors and Supervisors in the Bank's Shares (As of June 30, 2025) | Name | Capacity | Class of Shares | Number of Shares Held (Long Position) | Approximate % of the Bank's Equity | | :--- | :--- | :--- | :------------------- | :------------------- | | Dong Xiaodong | Beneficial Interest | Domestic Shares | 58,564 | 0.00096 | | Peng Junying | Beneficial Interest | Domestic Shares | 58,564 | 0.00096 | | Liu Baorui | Beneficial Interest | Domestic Shares | 15,959 | 0.00026 | - Save as disclosed above, as of the end of the reporting period, none of the Bank's directors, chief executive, or supervisors or their associates had any interests or short positions in the shares, underlying shares, or debentures of the Bank or its associated corporations[247](index=247&type=chunk) [Employee Compensation Policy and Training Program](index=97&type=section&id=VI.%20Employee%20Compensation%20Policy%20and%20Training%20Program) The Bank employs **6,534 staff**, with **92.70%** holding bachelor's degrees or higher, and implements a diversified recruitment strategy, performance-linked compensation with risk adjustments, and continuous training to enhance professional capabilities [(I) Employee Demographics](index=97&type=section&id=(I)%20Employee%20Demographics) As of the reporting period end, the Bank had **6,534 permanent employees**, with **92.70%** holding bachelor's degrees or above, an average age of **39.5**, and **58.95%** female employees, reflecting a diversified recruitment approach - As of the end of the reporting period, the Bank had a total of **6,534 permanent employees**[249](index=249&type=chunk) - **6,057** employees held bachelor's degrees or above, accounting for **92.70%**, an increase of **0.9%** from the end of June 2024[249](index=249&type=chunk) - Average age was **39.5** years; **2,682** male employees (**41.05%**) and **3,852** female employees (**58.95%**)[249](index=249&type=chunk) [(II) Employee Compensation](index=97&type=section&id=(II)%20Employee%20Compensation) The Bank is establishing a scientific incentive and restraint mechanism, aligning compensation with overall bank performance and individual contributions through categorized assessments, while providing social insurance and other benefits in accordance with Chinese laws - Gradually established a scientific incentive and restraint mechanism, ensuring compensation resources are more fully aligned with the Bank's overall benefits and individual performance through categorized assessments[250](index=250&type=chunk) - Provides social insurance and other employee benefits in accordance with applicable Chinese laws, regulations, and regulatory rules[250](index=250&type=chunk) - Formulated "Bank of Tianjin Co., Ltd. Compensation Management Policy" and "Bank of Tianjin Compensation Management Measures," implementing a market-oriented and regionally differentiated compensation management model[250](index=250&type=chunk) [(III) Employee Compensation, Performance Measurement, and Risk Adjustment Standards](index=97&type=section&id=(III)%20Employee%20Compensation%2C%20Performance%20Measurement%2C%20and%20Risk%20Adjustment%20Standards) The Bank's employee compensation policy aligns with its risk management framework, linking remuneration to risk-adjusted performance and implementing deferred payment and clawback mechanisms for key risk-influencing positions to prevent aggressive operations - Employee compensation policy is consistent with the risk management system, aligning compensation levels with the Bank's profitability and risk-adjusted performance[251](index=251&type=chunk) - For personnel in positions with significant risk influence, a deferred performance-based compensation and clawback system is implemented[251](index=251&type=chunk) - Deferred payment is no less than **40%** of the total annual performance-based compensation, with a deferral period of three years[251](index=251&type=chunk) [(IV) Employee Education and Training](index=98&type=section&id=(IV)%20Employee%20Education%20and%20Training) The Bank annually develops employee training plans, cultivates key talent, deepens its 'research, teaching, training, practice, combat, efficiency' system, promotes case-based learning, and encourages certification, with over **15,665** professional qualifications obtained - Annually formulates key points and plans for employee education and training, and implements talent pipeline development programs for key personnel (including new employees, young backbones, business experts, and management)[252](index=252&type=chunk) - Deepened the "research, teaching, training, practice, combat, efficiency" training system, built a standardized professional capability development system, and promoted case-based teaching models[252](index=252&type=chunk) - Promoted employee certification across the Bank, regularly organized various internal professional qualification and competitive selection exams, and encouraged employees to participate in external professional qualification learning courses[252](index=252&type=chunk) - As of the date of this interim report, over **15,665** individuals have obtained various professional qualification certificates through examinations[252](index=252&type=chunk) [Significant Matters](index=99&type=section&id=Significant%20Matters) This chapter covers the Bank's corporate governance, use of H-share proceeds, dividend distribution, related party transactions, major litigation, regulatory penalties, significant investments, and auditor appointments, noting compliance and a post-period issuance of technology innovation bonds [Corporate Governance Code](index=99&type=section&id=I.%20Corporate%20Governance%20Code) The Bank is committed to enhancing corporate governance transparency and shareholder interests, having established a comprehensive governance structure compliant with HKEX Listing Rules, with clear responsibilities for the Board, Supervisory Board, and senior management - The Bank has established a relatively comprehensive corporate governance structure in accordance with the Hong Kong Listing Rules, clearly defining the responsibilities of the general meeting, the Board of Directors, the Supervisory Board, and senior management[253](index=253&type=chunk) - The Bank has consistently complied with the code provisions set out in the Hong Kong Listing Rules during the reporting period[253](index=253&type=chunk) - During the reporting period, the Bank held **1** general meeting (April 17, 2025), which approved resolutions including the 2024 annual financial settlement report, profit distribution plan, and work reports of the Board and Supervisory Board[254](index=254&type=chunk) - During the reporting period, the Board of Directors held **4** meetings, reviewing and passing **46** resolutions; its special committees held **12** meetings, reviewing and passing **54** resolutions[256](index=256&type=chunk) - During the reporting period, the Supervisory Board held **5** meetings, reviewing and passing **49** resolutions; its special committees held **6** meetings, reviewing and passing **66** resolutions[257](index=257&type=chunk) [Use of Proceeds](index=100&type=section&id=II.%20Use%20of%20Proceeds) The net proceeds from the Bank's H-share global offering were fully used to expand capital, and during the reporting period, it also issued **RMB 5 billion** in green financial bonds and **RMB 7 billion** in ordinary financial bonds - The net proceeds from the Bank's global offering were fully used to expand its capital to meet the needs of continuous business growth[258](index=258&type=chunk) - On March 20, 2025, **RMB 5 billion** in green financial bonds were issued at a coupon rate of **1.98%**, with proceeds used for green projects as specified in the "Green Bond Endorsed Project Catalogue (2021 Edition)"[258](index=258&type=chunk) - On June 25, 2025, **RMB 7 billion** in ordinary financial bonds were issued at a coupon rate of **1.78%**, with proceeds used to optimize liability structure, replenish working capital, and promote steady business development[258](index=258&type=chunk) [Profit and Dividends](index=101&type=section&id=III.%20Profit%20and%20Dividends) The Bank's 2024 profit distribution plan, approved on April 17, 2025, involved a dividend of **RMB 1.368** per 10 shares, totaling approximately **RMB 830.45 million**, distributed on June 12, 2025, with no interim dividend for H1 2025 - 2024 profit distribution plan: a dividend of **RMB 1.368** per 10 shares (tax inclusive), totaling approximately **RMB 830.45 million** (tax inclusive), distributed on June 12, 2025[259](index=259&type=chunk) - The Bank will not distribute any interim dividends for the first six months of 2025[260](index=260&type=chunk) [Connected Transactions](index=101&type=section&id=IV.%20Connected%20Transactions) During the reporting period, the Bank provided commercial banking services to major shareholders, directors, supervisors, the president, and/or their associates under ordinary commercial terms, which were exempt from HKEX Listing Rules reporting and disclosure requirements - The Bank provided commercial banking services and products to the Chinese public in its ordinary course of business, including major shareholders, certain directors and supervisors, the president, and/or their respective associates[261](index=261&type=chunk) - These transactions were entered into in the ordinary course of business on normal commercial terms and are therefore exempt from the reporting, annual review, disclosure, and independent shareholders' approval requirements under Chapter 14A of the Hong Kong Listing Rules[261](index=261&type=chunk) [Related Party Transactions](index=101&type=section&id=V.%20Related%20Party%20Transactions) Details of the Bank's related party transactions during the reporting period are in Note 40 to the financial statements; while some also constitute connected transactions under HKEX Listing Rules, none were disclosable connected transactions - Details of the Bank's related party transactions conducted in the ordinary course of business during the reporting period are set out in Note 40 to the financial statements[262](index=262&type=chunk) - Certain related party transactions set out in the notes to the financial statements also constitute connected transactions as defined in the Hong Kong Listing Rules, but none constituted disclosable connected transactions as required by the Hong Kong Listing Rules[262](index=262&type=chunk) [Overall Situation of Related Party Transactions under Regulatory Scope](index=102&type=section&id=VI.%20Overall%20Situation%20of%20Related%20Party%20Transactions%20under%20Regulatory%20Scope) As of the reporting period end, the Bank's related party list included **2,337 natural persons** and **1,033 legal entities**, with **88** related party transactions totaling **RMB 34.442 billion** approved or filed, all compliant with regulatory requirements - As of the end of the reporting period, the Bank's related party list included related natural persons **2,337**, related legal entities or other organizations **1,033**[263](index=263&type=chunk) - During the reporting period, the Bank processed **88** related party transaction approvals and filings, with a total filed amount of **RMB 34.442 billion**, including **2** significant credit-related related party transactions approved, totaling **RMB 18 billion**[264](index=264&type=chunk) - As of the end of the reporting period, the Bank's credit-related related party transaction balance was **RMB 17.085 billion**, including **RMB 17.048 billion** for related legal entities and **RMB 0.37 billion** for related natural persons[265](index=265&type=chunk) - As of the end of the reporting period, the Bank's deposit and other types of related party transaction balance was **RMB 7.013 billion**[266](index=266&type=chunk) - As of the end of the reporting period, the largest single borrower's credit balance accounted for **3.90%** of the Bank's net capital (not exceeding **10%**); the largest related legal entity or other organization's group customer credit balance accounted for **8.85%** of the Bank's net capital (not exceeding **15%**); and the total related party credit balance accounted for **17.58%** of the Bank's net capital (not exceeding **50%**)[267](index=267&type=chunk) - During the reporting period, the Bank's related party credit business complied with all regulatory indicators, with no violations such as unsecured loans to related parties, credit provision with the Bank's equity as collateral, or guarantees for related party financing[267](index=267&type=chunk) [Major Litigation and Arbitration Matters](index=103&type=section&id=VII.%20Major%20Litigation%20and%20Arbitration%20Matters) As of the reporting period end, the Bank anticipates no material adverse impact on its business, financial position, or operating results from any ongoing legal or arbitration proceedings, despite two notable cases involving customer deposit disputes and bill acceptance disputes - As of the date of this interim report, the Bank does not expect any current and pending legal or arbitration proceedings to have a material adverse effect on its business, financial position, and operating results[268](index=268&type=chunk) - Tianbao Sub-branch customer deposit dispute litigation: Tianjin Second Intermediate People's Court dismissed the plaintiffs' claims, with some plaintiffs appealing, and the case is currently under review by the court[269](index=269&type=chunk) - Shanghai Branch vs. Zhejiang Chouzhou Commercial Bank acceptance bill repurchase business dispute litigation: The court ruled that Zhejiang Chouzhou Commercial Bank should bear supplementary compensation liability up to **RMB 40 million** for losses that Shanghai Branch could not recover through criminal asset recovery procedures; the Bank's Shanghai Branch has initiated supervisory proceedings[270](index=270&type=chunk)[271](index=271&type=chunk) [Penalties Against the Bank, its Directors, Supervisors, and Senior Management](index=104&type=section&id=VIII.%20Penalties%20Against%20the%20Bank%2C%20its%20Directors%2C%20Supervisors%2C%20and%20Senior%20Management) During the reporting period, neither the Bank nor its directors, supervisors, or senior management received any investigations, administrative penalties, public criticisms, or sanctions from regulatory bodies that would severely impact operations - During the reporting period, neither the Bank nor its directors, supervisors, or senior management were subject to investigations, administrative penalties, or public criticisms by the China Securities Regulatory Commission, nor were they publicly censured by any stock exchange or sanctioned by any other regulatory body that would severely impact the Bank's operations[272](index=272&type=chunk) [Fulfillment of Commitments by the Bank and Shareholders Holding 5% or More Shares](index=104&type=section&id=IX.%20Fulfillment%20of%20Commitments%20by%20the%20Bank%20and%20Shareholders%20Holding%205%25%20or%20More%20Shares) During the reporting period, neither the Bank nor any shareholders holding **5%** or more of its total issued shares made any commitments - During the reporting period, neither the Bank nor any shareholders holding **5%** or more of the Bank's total issued shares made any commitments[273](index=273&type=chunk) [Significant Investments, Acquisitions and Disposals of Assets, and Corporate Mergers](index=104&type=section&id=X.%20Significant%20Investments%2C%20Acquisitions%20and%20Disposals%20of%20Assets%2C%20and%20Corporate%20Mergers) During the reporting period, the Bank did not undertake any significant investments, major asset acquisitions, disposals, or corporate mergers - The Bank had no significant investments during the reporting period[274](index=274&type=chunk) - During the reporting period, the Bank did not engage in any major asset acquisitions, disposals, or corporate mergers[274](index=274&type=chunk) [Implementation of Share Incentive Schemes During the Reporting Period](index=104&type=section&id=XI.%20Implementation%20of%20Share%20Incentive%20Schemes%20During%20the%20Reporting%20Period) During the reporting period, the Bank did not implement any share incentive schemes - During the reporting period, the Bank did not implement any share incentive schemes[275](index=275&type=chunk) [Appointment and Removal of Auditors](index=104&type=section&id=XII.%20Appointment%20and%20Removal%20of%20Auditors) At the 2024 annual general meeting on April 17, 2025, shareholders approved the re-appointment of KPMG Huazhen LLP as domestic auditor and KPMG as international auditor for the 2025 financial statements - At the 2024 annual general meeting held on April 17, 2025, shareholders approved the re-appointment of KPMG Huazhen LLP as domestic auditor and KPMG as international auditor for the audit and review of the 2025 financial statements[276](index=276&type=chunk) [Events After the Reporting Period](index=105&type=section&id=XIII.%20Events%20After%20the%20Reporting%20Period) Except for the issuance of **RMB 3 billion** in technology innovation bonds on July 28, 2025, no other significant events occurred for the Bank or its subsidiaries after the reporting period - On July 28, 2025, the Bank issued **RMB 3 billion** in 5-year technology innovation bonds with a fixed annual coupon rate of **1.80%**[409](index=409&type=chunk) - The Bank and its subsidiaries had no other significant events after the reporting period[277](index=277&type=chunk) [Review of Interim Report](index=105&type=section&id=XIV.%20Review%20of%20Interim%20Report) The interim financial statements in this report are unaudited but have been reviewed by KPMG in accordance with International Standard on Review Engagements, and the Board and Audit Committee have reviewed and approved the interim report - The interim financial statements disclosed in this interim report are unaudited[278](index=278&type=chunk) - KPMG has reviewed the Bank's interim financial statements for the six months ended June 30, 2025, prepared in accordance with International Accounting Standard 34 and the Hong Kong Listing Rules, in accordance with International Standard on Review Engagements[278](index=278&type=chunk) - The Board of Directors and its Audit Committee have reviewed and approved the Bank's interim report[279](index=279&type=chunk) [Publication of Interim Report](index=105&type=section&id=XV.%20Publication%20of%20Interim%20Report) This interim report is available in both Chinese and English versions, with the Chinese version prevailing in case of any discrepancies - The interim report is available in both Chinese and English versions; in case of any discrepancy between the Chinese and English versions, the Chinese version shall prevail[280](index=280&type=chunk) [Independent Auditor's Review Report](index=106&type=section&id=Independent%20Auditor%27s%20Review%20Report) KPMG reviewed the Bank's interim financial information in accordance with ISRE 2410, concluding that no matters indicated non-compliance with IAS 34 in all material respects, providing a review opinion, not an audit opinion - KPMG reviewed the interim financial information of Bank of Tianjin and its subsidiaries[281](index=281&type=chunk) - The review was conducted in accordance with International Standard on Review Engagements 2410[282](index=282&type=chunk) - Review conclusion: Nothing came to the auditor's attention that caused them to believe the interim financial information is not prepared, in all material respects, in accordance with International Accounting Standard 34 – Interim Financial Reporting[283](index=283&type=chunk) - This report provides a review opinion, not an audit opinion[282](index=282&type=chunk) [Interim Financial Statements](index=107&type=section&id=Interim%20Financial%20Statements) This chapter presents the Bank's unaudited condensed consolidated interim financial statements for the six months ended June 30, 2025, including the income statement, balance sheet, statement of changes in equity, cash flow statement, and detailed notes, offering comprehensive financial insights [Condensed Consolidated Statement of Comprehensive Income](index=107&type=section&id=Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) For the six months ended June 30, 2025, the Bank's net profit increased by **1.6%** to **RMB 2.008 billion**, with a slight decrease in net interest income offset by a significant rise in net trading gains, though total comprehensive income declined due to other comprehensive losses Condensed Consolidated Statement of Comprehensive Income Summary (Six Months Ended June 30) | Indicator | 2025 (RMB Thousand) | 2024 (RMB Thousand) | | :--- | :------------------ | :------------------ | | Net Interest Income | 5,923,314 | 6,031,793 | | Investment Income | 1,266,927 | 1,498,719 | | Net Fee and Commission Income | 788,838 | 1,079,397 | | Net Trading Gains/(Losses) | 710,664 | 212,680 | | Operating Revenue | 8,828,439 | 8,756,662 | | Operating Expenses | (2,070,128) | (2,024,516) | | Impairment Losses | (4,629,974) | (4,702,872) | | Profit for the Period | 2,008,360 | 1,975,791 | | Profit for the Period Attributable to Equity Holders of the Bank | 1,987,826 | 1,966,044 | | Other Comprehensive Income (Net of Tax) | (661,343) | 640,667 | | Total Comprehensive Income for the Period | 1,347,017 | 2,616,458 | | Earnings Per Share (RMB) | 0.33 | 0.32 | [Condensed Consolidated Statement of Financial Position](index=109&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the Bank's total assets reached **RMB 965.675 billion**, a **4.3%** increase from year-end, driven by growth in customer loans and deposits, while total liabilities rose by **4.6%** and equity attributable to equity holders increased by **0.7%** Condensed Consolidated Statement of Financial Position Summary (As of Period End) | Indicator | June 30, 2025 (RMB Thousand) | December 31, 2024 (RMB Thousand) | | :--- | :-------------------------- | :-------------------------- | | Total Assets | 965,674,631 | 925,993,655 | | Loans and Advances to Customers | 471,033,192 | 440,779,383 | | Financial Assets at Fair Value Through Profit or Loss | 112,842,083 | 107,089,724 | | Financial Assets at Amortized Cost | 145,037,393 | 152,331,765 | | Total Liabilities | 895,758,652 | 856,583,512 | | Customer Deposits | 533,951,884 | 500,957,014 | | Debt Securities Issued | 147,761,391 | 109,964,281 | | Equity Attributable to Equity Holders of the Bank | 69,043,443 | 68,547,411 | | Total Equity | 69,915,979 | 69,410,143 | [Condensed Consolidated Statement of Changes in Equity](index=111&type=section&id=Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) As of June 30, 2025, equity attributable to equity holders increased to **RMB 69.043 billion**, with profit contributing **RMB 1.988 billion**, offset by net losses in other comprehensive income and distributed dividends, while general reserves increased Condensed Consolidated Statement of Changes in Equity Summary (Six Months Ended June 30) | Indicator | June 30, 2025 (RMB Thousand) | December 31, 2024 (RMB Thousand) | | :--- | :-------------------------- | :-------------------------- | | Share Capital | 6,070,552 | 6,070,552 | | Capital Reserve | 10,732,161 | 10,732,161 | | Investment Revaluation Reserve | 769,883 | 1,431,226 | | Surplus Reserve | 3,352,480 | 3,352,480 | | General Reserve | 11,090,037 | 9,255,979 | | Retained Earnings | 37,028,330 | 37,705,013 | | Equity Attributable to Equity Holders of the Bank | 69,043,443 | 68,547,411 | | Non-Controlling Interests | 872,536 | 862,732 | | Total Equity | 69,915,979 | 69,410,143 | - Profit for the period of **RMB 1,987,826 thousand** was attributable to equity holders of the Bank[292](index=292&type=chunk) - Other comprehensive income for the period was a net loss of **RMB 661,343 thousand**[292](index=292&type=chunk) - Dividends distributed to ordinary shareholders of the Bank amounted to **RMB 830,451 thousand**[292](index=292&type=chunk) - General reserve appropriation amounted to **RMB 1,834,058 thousand**[292](index=292&type=chunk) [Condensed Consolidated Cash Flow Statement](index=112&type=section&id=Condensed%20Consolidated%20Cash%20Flow%20Statement) For the six months ended June 30, 2025, Tianj

2025INTERIM REPORT 中期報告 Interim Results 中期業績 The board (the "Board") of directors (the "Directors") of China Financial Leasing Group Limited (the "Company") announces the unaudited condensed results of the Company and its subsidiary (collectively the "Group") for the six months ended 30 June 2025. The unaudited condensed interim financial statements have not been audited by the Company's auditor but have been reviewed by the Company's audit committee. 中國金融租賃集團有限公司（「本公司」） 董事（「董事」）會（「董事會」）宣佈本公 司及其附屬公司（統稱「本集團」 ...

CONTENTS 目錄 | Corporate Information 公司資料 | 2 | | --- | --- | | Management Discussion and Analysis 管理層討論及分析 | 4 | | Corporate Governance and Other Information | | | 企業管治及其他資料 | 16 | | Consolidated Income Statement 綜合收益表 | 22 | | Consolidated Statement of Comprehensive Income 綜合全面收益表 | 23 | | Consolidated Statement of Financial Position | | | 綜合財務狀況表 | 24 | | Condensed Consolidated Statement of Changes in Equity 簡明綜合權益變動表 | 26 | | Condensed Consolidated Cash Flow Statement | | | 簡明綜合現金流量表 | 27 | | Notes to th ...

Business Segments - The Group operates in three main business segments: financial services, education management and consultation, and automotive parts[11]. - The education management segment primarily provides international high school curriculum and overseas study consultation services[11]. - The automotive parts business focuses on R&D, manufacturing, and sales of automobile absorbers[11]. Financial Services - The financial services segment is licensed for Type 1, Type 4, Type 6, and Type 9 regulated activities under the SFO, allowing it to provide a range of services including underwriting and asset management[13]. - The Group's financial services include investment portfolios management, investment consultation, and advisory services for IPO applicants[13]. - The Group has been admitted by the SFC as a sponsor under the SFO, enhancing its capabilities in the financial services sector[13]. - The Group aims to enhance its financial services business by leveraging diversified financial service licenses and a comprehensive financial service system, focusing on collaboration among investment banking, securities, asset management, and research units[27]. - The Group is committed to innovating business models and exploring new business opportunities to promote robust development in its financial services sector[27]. - The Group's financial services business benefits from Hong Kong's status as an international financial center, enhancing its role as a bridge between China and the global economy[26]. - The financial services business has obtained various licenses, indicating a strong regulatory compliance framework[13]. Automotive Parts Performance - The Group's automotive parts business continues to supply absorbers for major manufacturers such as SAIC Motor, Chery Automobile, Geely Auto, and Changan Automobile, while actively expanding into new markets[24]. - In the first half of 2025, approximately 15,621,000 automobiles were produced and approximately 15,653,000 automobiles were sold in China, representing a period-over-period increase of approximately 12.5% and 11.4% respectively[23]. - For new energy vehicles, approximately 6,968,000 vehicles were produced and approximately 6,937,000 vehicles were sold, accounting for approximately 44.3% of total automobile sales[23]. - Revenue from the automotive parts business rose by approximately 48.6% to approximately RMB1,232.5 million, while revenue from financial services decreased by approximately 46.7% to approximately RMB11.4 million[37]. - The Group's automotive parts business adheres to a principal operational idea focused on market development, quality control, R&D improvement, and management strengthening[24]. Education Management and Consultation - The Group's education management and consultation business operates the PGA international high school curriculum and provides overseas study consultation services across multiple cities in China[19]. - The Group emphasizes the localization of international curriculum and the integration of local curriculum to enhance students' performance and creative thinking[20]. - The Group has upgraded its overseas study consultation services to provide comprehensive support for students, including academic background and interview tutoring[21]. - The Group aims to develop customized overseas study products to meet the individual needs of students at different stages[31]. - The Group plans to leverage the PGA international curriculum brand to establish a new platform for international education services, focusing on international talent cultivation[31]. Financial Performance - The Group's overall revenue increased by approximately 45.1% to approximately RMB1,273.8 million for the six months ended June 30, 2025, compared to RMB877.6 million in the corresponding period of 2024[37]. - The Group's overall gross profit increased by approximately 190.1% to approximately RMB295.3 million, with automotive parts gross profit rising by approximately 223.6% to approximately RMB278.6 million[40]. - The overall gross profit margin increased by approximately 11.6 percentage points to approximately 23.2%[43]. - The Group recorded a loss of approximately RMB41.1 million, a decrease of approximately 83.3% compared to a loss of approximately RMB245.6 million in the same period of 2024[58]. - For the six months ended June 30, 2025, the Group reported a loss attributable to owners of the Company of RMB 74,665,000, compared to a loss of RMB 222,029,000 for the same period in 2024, representing a 66.5% improvement[194]. Costs and Expenses - The Group's overall cost of sales/services increased by approximately 26.1% to approximately RMB978.5 million, driven primarily by the increase in automotive parts sales[39]. - The Group's selling and distribution expenses rose by approximately 48.5% to approximately RMB67.7 million from approximately RMB45.6 million in the same period of 2024[50]. - The Group's administrative expenses increased by approximately 25.9% to approximately RMB92.8 million from approximately RMB73.7 million in the corresponding period of 2024[55]. - The Group's R&D expenditure increased by approximately 31.1% to approximately RMB46.4 million from approximately RMB35.4 million in the corresponding period of 2024[51]. Assets and Liabilities - The Group's total borrowings amounted to approximately RMB2,186.8 million, representing an increase of approximately 6.8% compared to approximately RMB2,047.2 million as of December 31, 2024[70]. - The Group's cash and bank balances amounted to approximately RMB177.2 million, representing an increase of approximately 20.2% compared to approximately RMB147.4 million as of December 31, 2024[65]. - The Group's inventories as of June 30, 2025, were approximately RMB472.2 million, representing an increase of approximately 233.0% compared to RMB141.8 million as of December 31, 2024[75]. - The trade receivables of the Group as of June 30, 2025, amounted to approximately RMB1,150.5 million, an increase of approximately 18.7% from RMB969.1 million as of December 31, 2024[76]. - The trade payables of the Group as of June 30, 2025, were approximately RMB1,401.6 million, reflecting an increase of approximately 46.0% compared to RMB959.7 million as of December 31, 2024[79]. Shareholder Information - The total number of Shares in issue as of June 30, 2025, is 1,848,000,000[10]. - The Directors' interests in shares include 163,765,800 shares held by a controlled corporation, representing approximately 8.86% of the total issued shares as of June 30, 2025[111]. - As of June 30, 2025, Wealth Max holds 163,765,800 shares, representing approximately 8.86% of the total issued shares[118]. - Chuang Yue holds 133,340,000 shares, accounting for approximately 7.215% of the total issued shares[118]. - The interests of Chuang Yue, Shenmane.D Co., Limited, Golden Cloud Co., Limited, and Mr. Liu Kun are related to the same parcel of shares[128]. Corporate Governance - The Company complied with the Corporate Governance Code for the six months ended June 30, 2025, with no material changes in governance practices compared to the 2024 annual report[150]. - The Company has adopted the Model Code for securities transactions by Directors, with all Directors confirming compliance for the six months ended June 30, 2025[152]. - The Company has established an audit committee to review and supervise its financial reporting process and internal control systems[175]. Legal and Restructuring - A winding-up petition was presented against the Company for bonds amounting to HK$10,000,000, with a hearing scheduled for September 22, 2025[171]. - Legal proceedings were initiated against the Company for HK$12,250,000, including interest and costs, as of May 21, 2024[173]. - The company has appointed a restructuring advisor to assist in formulating a debt restructuring plan, which includes cash repayments, refinancing, and debt reduction[180]. - The company is actively negotiating with potential investors to introduce new capital and improve cash flow[180].

[Preliminary Results Announcement](index=2&type=section&id=Preliminary%20Results%20Announcement) This section presents the preliminary financial results and key operational highlights for the reporting period [Consolidated Financial Statements](index=2&type=section&id=Consolidated%20Financial%20Statements) This section presents the consolidated statement of profit or loss and other comprehensive income and consolidated statement of financial position for China Securities International Limited for the year ended June 30, 2025, providing an overview of the Group's financial performance and asset-liability position during the reporting period [Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=2&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For the year ended June 30, 2025, the Group's revenue from continuing operations increased, but gross profit declined, with a significant narrowing of the annual loss primarily due to a substantial reduction in losses from discontinued operations | Metric | 2025 (thousand HKD) | 2024 (thousand HKD) | | :--- | :--- | :--- | | Revenue (Continuing Operations) | 116,785 | 100,578 | | Total Revenue | 117,295 | 101,835 | | Cost of Sales | (90,706) | (69,938) | | Gross Profit | 26,589 | 31,897 | | Operating Loss | (26,451) | (27,472) | | Loss before Tax from Continuing Operations | (94,404) | (90,269) | | Loss for the Year from Continuing Operations | (94,495) | (90,269) | | Loss for the Year from Discontinued Operations | (55,670) | (777,851) | | Loss for the Year | (150,165) | (868,120) | | Loss for the Year Attributable to Owners of the Company | (146,703) | (699,345) | | Total Comprehensive Loss for the Year | (38,531) | (868,515) | | Basic Loss Per Share (Continuing and Discontinued Operations) | (22.88) HK cents | (111.10) HK cents | | Basic Loss Per Share (Continuing Operations) | (14.74) HK cents | (14.34) HK cents | | Basic Loss Per Share (Discontinued Operations) | (8.14) HK cents | (96.76) HK cents | - Revenue from continuing operations increased by **16.1%** from 100,578 thousand HKD in 2024 to 116,785 thousand HKD in 2025[4](index=4&type=chunk) - Gross profit decreased by **16.7%** from 31,897 thousand HKD in 2024 to 26,589 thousand HKD in 2025[4](index=4&type=chunk) - Loss for the year significantly narrowed from 868,120 thousand HKD in 2024 to **150,165 thousand HKD** in 2025, primarily due to a reduction in loss from discontinued operations from 777,851 thousand HKD to 55,670 thousand HKD[4](index=4&type=chunk) [Consolidated Statement of Financial Position](index=5&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the Group's total assets and liabilities significantly decreased, net current liabilities notably improved, and net assets and total equity increased, reflecting the impact of business restructuring and asset disposals | Metric | 2025 (thousand HKD) | 2024 (thousand HKD) | | :--- | :--- | :--- | | Non-current Assets | 656,462 | 628,002 | | Current Assets | 88,506 | 1,665,703 | | Current Liabilities | (188,625) | (2,139,421) | | Net Current Liabilities | (100,119) | (473,718) | | Total Assets Less Current Liabilities | 556,343 | 154,284 | | Non-current Liabilities | (297,249) | (39,235) | | Net Assets | 259,094 | 115,049 | | Equity Attributable to Owners of the Company | 259,094 | 293,066 | | Total Equity | 259,094 | 115,049 | - Current assets significantly decreased from 1,665,703 thousand HKD in 2024 to **88,506 thousand HKD** in 2025, mainly due to the disposal of properties under development for sale and properties held for sale[7](index=7&type=chunk) - Net current liabilities improved from (473,718) thousand HKD in 2024 to **(100,119) thousand HKD** in 2025[7](index=7&type=chunk) - Net assets increased from 115,049 thousand HKD in 2024 to **259,094 thousand HKD** in 2025[8](index=8&type=chunk) [Notes to the Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements) This section provides detailed notes to the consolidated financial statements, covering the company's basic information, accounting policies, specific composition and changes in various financial data, and information on discontinued operations, offering a deeper context for understanding the Group's financial position and operating results [General Information](index=7&type=section&id=General%20Information) China Securities International Limited is a Bermuda-registered listed company, with principal activities including manufacturing and sales of health and household products, coal mining, and has discontinued its property development and primary land development businesses in China - The company's principal place of business changed on August 28, 2025[9](index=9&type=chunk) - The Group discontinued its property development and primary land development businesses in China following the disposal of its wholly-owned subsidiary, Hong Kong China Securities City Investment Limited[9](index=9&type=chunk) [Adoption of Accounting Standards](index=7&type=section&id=Adoption%20of%20Accounting%20Standards) This year, the Group adopted all new and revised Hong Kong Financial Reporting Standards, but these adoptions did not result in significant changes to accounting policies, financial statement presentation, or reported amounts - The adoption of new and revised Hong Kong Financial Reporting Standards did not result in significant changes to the Group's accounting policies, presentation of consolidated financial statements, or reported amounts for the current and prior years[10](index=10&type=chunk) [Revenue Analysis](index=8&type=section&id=Revenue%20Analysis) The Group's total revenue decreased in 2025, primarily due to zero revenue from property development in discontinued operations. In continuing operations, both health and household product sales and coal mining royalty income increased | Revenue Source | 2025 (thousand HKD) | 2024 (thousand HKD) | | :--- | :--- | :--- | | **Continuing Operations** | | | | Manufacturing and Sales of Health and Household Products | 115,183 | 100,278 | | Coal Mining Royalty Income | 1,602 | 300 | | **Discontinued Operations** | | | | Property Development | – | 46,664 | | **Total Revenue** | 117,295 | 148,499 | Revenue from Contracts with Customers by Geographical Market | Geographical Market | 2025 (thousand HKD) | 2024 (thousand HKD) | | :--- | :--- | :--- | | United States of America | 94,164 | 75,620 | | People's Republic of China | 20 | 46,669 | | Germany | 5,926 | 8,826 | | France | 231 | 1 | | United Kingdom | – | 373 | | Indonesia | 1,602 | 300 | | Hong Kong and Others | 14,842 | 15,453 | | **Total** | 116,785 | 147,242 | - Revenue from health and household products business increased by **14.9%** to 115,183 thousand HKD, and coal mining royalty income significantly grew by **434%** to 1,602 thousand HKD[11](index=11&type=chunk) - Property development business revenue was zero in 2025, compared to 46,664 thousand HKD in 2024, reflecting the discontinuation of this business[11](index=11&type=chunk) [Other Income and Gains](index=10&type=section&id=Other%20Income%20and%20Gains) The Group's total other income and gains significantly decreased from 12,837 thousand HKD in 2024 to 2,605 thousand HKD in 2025, mainly due to reduced interest income from associates and other income from discontinued operations | Item | 2025 (thousand HKD) | 2024 (thousand HKD) | | :--- | :--- | :--- | | Scrap Material Sales Income | 412 | 314 | | Interest Income | 16 | 93 | | Net Exchange Gain | 1,082 | 1,260 | | Interest Income from Associates | 874 | 10,403 | | Others | 223 | 770 | | **Total** | 2,605 | 12,837 | | From Continuing Operations | 1,731 | 2,380 | | From Discontinued Operations | 874 | 10,457 | - Interest income from associates significantly decreased from 10,403 thousand HKD in 2024 to **874 thousand HKD** in 2025[17](index=17&type=chunk) [Segment Information](index=10&type=section&id=Segment%20Information) The Group's reporting segments decreased from three to two (health and household products, coal mining), property development business was discontinued, and lending business is no longer presented separately. Health and household products revenue grew but recorded a loss, while coal mining revenue significantly increased but turned into a loss - For the year ended June 30, 2025, the Group had two reportable segments: manufacturing and sales of health and household products and coal mining business, with property development and primary land development businesses discontinued[18](index=18&type=chunk) - The financial performance of the lending business segment is no longer presented separately but is included under 'Corporate and unallocated losses'[18](index=18&type=chunk) Overview of Segment Profit or Loss from Continuing Operations | Segment | 2025 Revenue (thousand HKD) | 2025 Segment Loss (thousand HKD) | 2024 Revenue (thousand HKD) | 2024 Segment (Loss)/Profit (thousand HKD) | | :--- | :--- | :--- | :--- | :--- | | Health and Household Products Business | 115,183 | (14,804) | 100,278 | (6,109) | | Coal Mining Business | 1,602 | (4,982) | 300 | 31,274 | | Lending Business (Interest Income) | 510 | N/A | 1,257 | (5,676) | | **Total** | 117,295 | (19,786) | 101,835 | 19,489 | Revenue by Region | Region | 2025 (thousand HKD) | 2024 (thousand HKD) | | :--- | :--- | :--- | | USA | 94,164 | 75,620 | | China | 20 | 46,669 | | Germany | 5,926 | 8,826 | | France | 231 | 1 | | United Kingdom | – | 373 | | Indonesia | 1,602 | 300 | | Hong Kong and Others | 15,352 | 16,710 | | **Total** | 117,295 | 148,499 | - Health and household products business revenue grew by **14.9%**, but segment loss expanded from 6,109 thousand HKD to **14,804 thousand HKD**[19](index=19&type=chunk) - Coal mining business revenue significantly grew by **434%**, but segment profit turned into a loss of **4,982 thousand HKD**, primarily impacted by impairment losses[19](index=19&type=chunk) - The USA remains the primary revenue source, contributing **94,164 thousand HKD** in 2025, accounting for approximately **80%** of total revenue[21](index=21&type=chunk) [Finance Costs](index=14&type=section&id=Finance%20Costs) The Group's total finance costs significantly decreased from 191,647 thousand HKD in 2024 to 22,111 thousand HKD in 2025, primarily due to a substantial reduction in finance costs from discontinued operations | Item | 2025 (thousand HKD) | 2024 (thousand HKD) | | :--- | :--- | :--- | | Interest on Other Loans | 2,863 | 37,358 | | Interest on Bank Loans | 5,936 | 141,441 | | Interest on Shareholder Loans | 13,243 | 12,689 | | Interest on Leases | 69 | 159 | | **Total** | 22,111 | 191,647 | | From Continuing Operations | 14,951 | 14,143 | | From Discontinued Operations | 7,160 | 177,504 | - Finance costs from discontinued operations significantly decreased from 177,504 thousand HKD in 2024 to **7,160 thousand HKD** in 2025[23](index=23&type=chunk) [Income Tax](index=14&type=section&id=Income%20Tax) The Group's income tax expense shifted from a 24,258 thousand HKD credit in 2024 to a 125 thousand HKD expense in 2025, mainly due to changes in PRC enterprise income tax and land appreciation tax | Item | 2025 (thousand HKD) | 2024 (thousand HKD) | | :--- | :--- | :--- | | Current Tax — PRC Enterprise Income Tax | (60) | (2,769) | | Land Appreciation Tax | – | (3,989) | | Deferred Tax | – | 31,016 | | Hong Kong Profits Tax — Underprovision in Prior Years | (65) | – | | **Total** | (125) | 24,258 | | From Continuing Operations | (91) | – | | From Discontinued Operations | (34) | 24,258 | - Continuing operations generated **91 thousand HKD** in income tax expense in 2025, compared to zero in 2024[23](index=23&type=chunk) [Components of Loss for the Year](index=16&type=section&id=Components%20of%20Loss%20for%20the%20Year) The composition of the annual loss shows that exploration and evaluation assets shifted from impairment reversal to impairment loss, impairment of other receivables significantly decreased, and staff costs increased | Item | 2025 (thousand HKD) | 2024 (thousand HKD) | | :--- | :--- | :--- | | Cost of Inventories Sold | 90,706 | 69,938 | | Impairment Loss on Exploration and Evaluation Assets / (Reversal of Impairment Loss) | 5,752 | (31,761) | | Impairment of Loans Receivable | 3,381 | 5,756 | | Impairment of Other Receivables | 13,696 | 65,934 | | Staff Costs | 61,801 | 55,941 | - Exploration and evaluation assets shifted from a 31,761 thousand HKD impairment reversal in 2024 to a **5,752 thousand HKD** impairment loss in 2025[26](index=26&type=chunk) - Impairment of other receivables significantly decreased from 65,934 thousand HKD in 2024 to **13,696 thousand HKD** in 2025[26](index=26&type=chunk) - Staff costs (including directors' emoluments) increased from 55,941 thousand HKD in 2024 to **61,801 thousand HKD** in 2025[26](index=26&type=chunk) [Dividends](index=16&type=section&id=Dividends) The Board does not recommend the payment of any dividend for the year ended June 30, 2025 - The Directors do not recommend the payment or declaration of any dividend for the year ended June 30, 2025 (2024: nil)[27](index=27&type=chunk) [Loss Per Share](index=16&type=section&id=Loss%20Per%20Share) For the year ended June 30, 2025, the basic loss per share attributable to owners of the Company significantly narrowed, primarily due to a substantial reduction in losses from discontinued operations | Metric | 2025 (HK cents) | 2024 (HK cents) | | :--- | :--- | :--- | | Basic Loss Per Share (Continuing and Discontinued Operations) | (22.88) | (111.10) | | Basic Loss Per Share (Continuing Operations) | (14.74) | (14.34) | | Basic Loss Per Share (Discontinued Operations) | (8.14) | (96.76) | - Loss for the year attributable to owners of the Company decreased from 699,345 thousand HKD in 2024 to **146,703 thousand HKD** in 2025[28](index=28&type=chunk) - Diluted loss per share is not presented as the Company had no unissued ordinary shares with dilutive potential in both years[31](index=31&type=chunk) [Exploration and Evaluation Assets](index=17&type=section&id=Exploration%20and%20Evaluation%20Assets) The carrying amount of exploration and evaluation assets decreased in 2025, mainly due to impairment losses from suspended mining activities, despite a prior reversal of impairment due to the restoration of mining rights | Item | 2025 (thousand HKD) | 2024 (thousand HKD) | | :--- | :--- | :--- | | Exploration and Mining Rights (Carrying Amount) | 25,623 | 31,700 | | Reversal of Impairment Loss (2024) | – | (31,761) | | Impairment Loss (2025) | 5,752 | – | | Amortization | 325 | 61 | - In April 2022, the Indonesian government revoked the coal mining concession, leading to a full impairment of **462,031 thousand HKD**[33](index=33&type=chunk) - In August 2023, mining rights were restored, and actual coal production and sales commenced in the first half of 2024, leading to a reversal of impairment loss of **31,761 thousand HKD** in 2024[33](index=33&type=chunk) - In 2025, mining activities were suspended for several months due to falling global coal prices and adverse weather, resulting in an impairment loss of **5,752 thousand HKD**[33](index=33&type=chunk)[34](index=34&type=chunk) [Interests in Associates](index=19&type=section&id=Interests%20in%20Associates) The Group's interests in associates increased, but Chengde Jinyu is no longer included due to disposal, while Pacific Memory Sdn Bhd recorded an annual loss | Item | 2025 (thousand HKD) | 2024 (thousand HKD) | | :--- | :--- | :--- | | Share of Net Assets | 564,430 | 530,967 | | Goodwill | – | 86,994 | | Impairment | – | (86,994) | - Chengde Jinyu Investment Development Co., Ltd. (Chengde Jinyu) was disposed of on July 22, 2024, with its carrying amount of interest being zero as of June 30, 2024[39](index=39&type=chunk) - Pacific Memory Sdn Bhd (Malaysia property development) net assets increased from 1,517,049 thousand HKD in 2024 to **1,612,656 thousand HKD** in 2025, but annual loss increased from 21,577 thousand HKD to **84,678 thousand HKD**[38](index=38&type=chunk) [Loans and Interest Receivables](index=21&type=section&id=Loans%20and%20Interest%20Receivables) The Group's net loans and interest receivables continued to decrease, mainly due to impairment allowances and write-offs during the year, and the Group no longer grants new loans | Item | 2025 (thousand HKD) | 2024 (thousand HKD) | | :--- | :--- | :--- | | Loans Receivable | 37,953 | 40,739 | | Impairment Allowance (Loans Receivable) | (36,857) | (36,476) | | Interest Receivable | 7,985 | 9,128 | | Impairment Allowance (Interest Receivable) | (7,847) | (8,511) | | **Total Net** | 1,234 | 4,880 | | Impairment Allowance at Beginning of Year | 44,987 | 38,058 | | Impairment During the Year | 3,917 | 6,929 | | Written Off During the Year | (4,200) | – | - Net loans and interest receivables decreased from 4,880 thousand HKD in 2024 to **1,234 thousand HKD** in 2025[40](index=40&type=chunk) - Impairment allowance of **4,200 thousand HKD** was written off during the year[41](index=41&type=chunk) - The Group no longer allows its lending business to grant new loans[40](index=40&type=chunk) [Inventories](index=22&type=section&id=Inventories) The Group's total inventories increased in 2025, primarily due to an increase in raw materials | Item | 2025 (thousand HKD) | 2024 (thousand HKD) | | :--- | :--- | :--- | | Raw Materials | 11,126 | 6,458 | | Work in Progress | 1,779 | 3,065 | | Finished Goods | 7,908 | 8,881 | | **Total** | 20,813 | 18,404 | - Raw materials increased by **72.3%** from 6,458 thousand HKD in 2024 to **11,126 thousand HKD** in 2025[41](index=41&type=chunk) [Properties Under Development for Sale and Properties Held for Sale](index=22&type=section&id=Properties%20Under%20Development%20for%20Sale%20and%20Properties%20Held%20for%20Sale) The Group's properties under development for sale and properties held for sale were both sold in 2025, reflecting the discontinuation of its property development business in China | Item | 2025 (thousand HKD) | 2024 (thousand HKD) | | :--- | :--- | :--- | | Properties Under Development for Sale | – | 1,049,592 | | Properties Held for Sale | – | 154,822 | - Properties under development for sale and properties held for sale were both sold in 2025, with write-downs recognized in 2024 due to the disposal of a subsidiary[42](index=42&type=chunk)[44](index=44&type=chunk) [Trade and Other Receivables](index=23&type=section&id=Trade%20and%20Other%20Receivables) The Group's total trade and other receivables significantly decreased, mainly due to reductions in prepayments and deposits, consideration receivable, and amounts due from related companies, as well as further impairment of consideration receivable | Item | 2025 (thousand HKD) | 2024 (thousand HKD) | | :--- | :--- | :--- | | Trade Receivables | 30,213 | 30,025 | | Prepayments and Deposits | 729 | 43,800 | | Prepaid Tax | 743 | 9,759 | | Consideration Receivable | – | 20,466 | | Amounts Due from Related Companies | – | 32,170 | | Other Receivables | 1,541 | 24,948 | | **Total** | 33,226 | 161,168 | - Consideration receivable decreased from 20,466 thousand HKD in 2024 to zero in 2025, with a further impairment loss of **13,696 thousand HKD** recognized in 2025[47](index=47&type=chunk) - Amounts due from related companies decreased from 32,170 thousand HKD in 2024 to zero in 2025[45](index=45&type=chunk) [Amounts Due from Associates](index=25&type=section&id=Amounts%20Due%20from%20Associates) The Group's amounts due from associates significantly decreased, primarily due to the disposal of amounts due from Chengde Jinyu | Associate | 2025 (thousand HKD) | 2024 (thousand HKD) | | :--- | :--- | :--- | | Pacific Memory SDN BHD | 21,881 | 21,881 | | Chengde Jinyu | – | 235,993 | | **Total** | 21,881 | 257,874 | - Amounts due from Chengde Jinyu were disposed of during the year ended June 30, 2025[48](index=48&type=chunk) [Trade and Other Payables](index=25&type=section&id=Trade%20and%20Other%20Payables) The Group's total trade and other payables significantly decreased, mainly due to reductions in trade payables, accruals and other payables, interest payable on loans, and contract liabilities | Item | 2025 (thousand HKD) | 2024 (thousand HKD) | | :--- | :--- | :--- | | Trade Payables | 27,441 | 59,285 | | Accruals and Other Payables | 62,579 | 125,752 | | Amounts Due to Related Companies | – | 10,748 | | Interest Payable on Loans | 17,457 | 306,485 | | Amounts Due to Directors | 1,848 | 999 | | Contract Liabilities | – | 171,922 | | **Total** | 109,325 | 675,191 | - Interest payable on loans significantly decreased from 306,485 thousand HKD in 2024 to **17,457 thousand HKD** in 2025[49](index=49&type=chunk) - Contract liabilities (property development) decreased from 171,922 thousand HKD in 2024 to zero in 2025, reflecting the discontinuation of the property development business[50](index=50&type=chunk) [Discontinued Operations](index=26&type=section&id=Discontinued%20Operations) The Group completed the disposal of Hong Kong China Securities City Investment Limited on July 22, 2024, discontinuing its property development and primary land development businesses in China, which led to a substantial reduction in the annual loss from discontinued operations - On May 6, 2024, the Group entered into an agreement with its major shareholder, Mr. Lim Kim Chai, to dispose of its entire equity interest in Hong Kong China Securities City Investment Limited for a consideration of **53,700 thousand HKD**, which was completed on July 22, 2024[51](index=51&type=chunk) | Item | 2025 (thousand HKD) | 2024 (thousand HKD) | | :--- | :--- | :--- | | Loss from Discontinued Operations | (7,619) | (777,851) | | Loss on Disposal of Discontinued Operations | (48,051) | – | | **Total** | (55,670) | (777,851) | - Loss for the year from discontinued operations significantly decreased from 777,851 thousand HKD in 2024 to **7,619 thousand HKD** in 2025[52](index=52&type=chunk) - A loss on disposal of discontinued operations of **48,051 thousand HKD** was recognized in 2025[52](index=52&type=chunk) [Related Party Transactions](index=29&type=section&id=Related%20Party%20Transactions) Aside from transactions and balances disclosed elsewhere in the consolidated financial statements, there were no other transactions or balances between the Group and its related parties during the year - Except as disclosed, there were no other transactions or balances between the Group and its related parties during the year[54](index=54&type=chunk) [Summary of Independent Auditor's Report](index=30&type=section&id=Summary%20of%20Independent%20Auditor's%20Report) The independent auditor issued a qualified opinion on the Group's consolidated financial statements, primarily concerning exploration and evaluation assets, interests in associates, amounts due from associates, properties under development for sale, other receivables, borrowings, and loss on disposal of discontinued operations. Management, the Board, and the Audit Committee reviewed the qualifications, deeming most addressed, but the qualification regarding exploration and evaluation assets remains unresolved [Qualified Opinion](index=30&type=section&id=Qualified%20Opinion) The auditor believes that, except for the possible effects of the matters described in the Basis for Qualified Opinion section, the consolidated financial statements present fairly, in all material respects, the financial position and performance of the Group, and have been properly prepared in compliance with disclosure requirements - The auditor believes that, except for the possible effects of the matters described in the Basis for Qualified Opinion section, the consolidated financial statements present fairly, in all material respects, the Group's consolidated financial position as of June 30, 2025, and its consolidated financial performance and cash flows for the year then ended, and have been properly prepared in compliance with the disclosure requirements of the Hong Kong Companies Ordinance[58](index=58&type=chunk) [Basis for Qualified Opinion](index=30&type=section&id=Basis%20for%20Qualified%20Opinion) The auditor's qualified opinion is primarily based on insufficient audit evidence regarding the recoverability of exploration and evaluation assets, accuracy of interests in associates and amounts due from associates, write-down amount of properties under development for sale, impairment of other receivables, and the existence, completeness, and accuracy of bank borrowings - The auditor could not confirm the appropriateness of the 2024 reversal of impairment loss on exploration and evaluation assets, nor the recoverability of the **25,623 thousand HKD** exploration and evaluation assets and the appropriateness of the **5,752 thousand HKD** impairment in 2025, due to suspended mining activities and uncertain negotiation outcomes[59](index=59&type=chunk)[60](index=60&type=chunk) - The auditor was unable to obtain sufficient audit evidence to be satisfied with the accuracy of the 2024 interests in associate Chengde Jinyu, its share of loss, exchange differences, and impairment, as well as the accuracy of amounts due from Chengde Jinyu and the appropriateness of the impairment loss[62](index=62&type=chunk)[63](index=63&type=chunk) - The auditor could not determine the accuracy of the carrying amount and write-down amount of properties under development for sale in 2024, as it relates to the accuracy of interests in Chengde Jinyu, receivables, and bank borrowings[64](index=64&type=chunk) - The auditor could not confirm the appropriateness of impairment losses on receivables in 2024 and 2025 due to insufficient audit evidence regarding the recoverability of 2024 receivables[65](index=65&type=chunk) - The auditor could not determine the existence, completeness, and accuracy of bank borrowings in 2024, nor the completeness and accuracy of related finance costs, due to inability to contact the bank and the buyer of non-performing loans[66](index=66&type=chunk) - The auditor could not determine the accurate recording of the 2025 loss on disposal of discontinued operations, as it relates to the accuracy of carrying amounts of interests in associates, receivables, properties under development for sale, and bank borrowings[67](index=67&type=chunk) [Management's, Board's and Audit Committee's Views on Auditor's Opinion](index=35&type=section&id=Management's%2C%20Board's%20and%20Audit%20Committee's%20Views%20on%20Auditor's%20Opinion) Management and the Audit Committee reviewed the auditor's qualified opinion. They believe five qualifications related to the disposal of Hong Kong China Securities City Investment Limited have been adequately addressed. However, the qualification regarding exploration and evaluation assets remains unresolved, mainly due to production uncertainties caused by external factors like coal prices and weather, with the Group actively negotiating remedies and monitoring market conditions - Qualifications related to the disposal of Hong Kong China Securities City Investment Limited (items 2, 3, 5, 6) have been adequately addressed, as the company and its subsidiaries are no longer Group members, and their financial impact was accounted for on the completion date[70](index=70&type=chunk) - The qualification regarding other receivables (item 4) has been adequately addressed, as the Group entered into a deed of settlement with the counterparty and settled the receivable through share transfer[71](index=71&type=chunk) - The qualification regarding exploration and evaluation assets (item 1) remains unresolved, primarily due to falling global coal prices, adverse weather, and the contractor's failure to meet production levels, preventing the auditor from assessing the reasonableness of cash flow forecasts[72](index=72&type=chunk) - Management and the Audit Committee concur with the auditor's basis for the qualified opinion on exploration and evaluation assets and are negotiating remedies with the contractor, considering engaging subcontractors or taking over mining activities, while closely monitoring market conditions[73](index=73&type=chunk)[74](index=74&type=chunk)[75](index=75&type=chunk) [Subsequent Significant Events](index=29&type=section&id=Subsequent%20Significant%20Events) After the reporting period, the company implemented a series of capital market operations, including debt capitalization, share consolidation, share premium reduction, and rights issue, aimed at debt repayment, business strategy adjustment, and working capital replenishment - The Company entered into debt capitalization agreements with two major shareholders to offset approximately **100,900 thousand HKD** in shareholder loans by issuing shares at **0.20 HKD per share**, completed on July 15, 2025[55](index=55&type=chunk) - The Company proposed a rights issue, issuing **572,899,170** rights shares at **0.20 HKD per share** on the basis of one rights share for every two consolidated shares held, raising a maximum gross proceeds of approximately **114,600 thousand HKD**, completed on August 20, 2025[55](index=55&type=chunk) - Net proceeds from the rights issue of approximately **112,000 thousand HKD** will be used for debt repayment (**48,000 thousand HKD**), strategic adjustments and business transformation for the health and household products business (**40,000 thousand HKD**), and general working capital purposes (**24,000 thousand HKD**)[77](index=77&type=chunk) - Other proposed matters, including share consolidation (1 share for every 20 shares), share premium reduction (approximately **899,100 thousand HKD** transferred to contributed surplus account to offset accumulated losses), and change in board lot size, were all completed between July and August 2025[76](index=76&type=chunk)[78](index=78&type=chunk) [Results for the Year Ended 30 June 2025](index=39&type=section&id=Results%20for%20the%20Year%20Ended%2030%20June%202025) This section provides a detailed review of the Group's overall performance for the 2024/25 financial year, outlining operating performance and future outlook by business segment. Despite increased total revenue, gross profit margin declined, and the annual loss significantly narrowed primarily due to the disposal of discontinued operations. Each business segment faces different challenges, with corresponding strategic adjustments and development plans in place [Overall Performance Overview](index=39&type=section&id=Overall%20Performance%20Overview) The Group's total revenue grew by 15.2% in the 2024/25 financial year, but gross profit margin decreased to 22.7%. The consolidated loss attributable to owners of the Company significantly reduced, mainly due to a substantial narrowing of losses from discontinued operations | Metric | 2025 (thousand HKD) | 2024 (thousand HKD) | | :--- | :--- | :--- | | Total Revenue | 117,295 | 101,835 | | Gross Profit | 26,589 | 31,897 | | Gross Profit Margin | 22.7% | 31.3% | | Consolidated Loss Attributable to Owners of the Company | (146,703) | (699,345) | | Loss from Continuing Operations | (94,495) | (90,269) | | Loss from Discontinued Operations | (52,208) | (609,076) | - Total revenue increased by **15.2%** year-on-year, primarily attributable to a rebound in sales orders for the health and household products business[79](index=79&type=chunk) - Gross profit margin decreased from **31.3%** to **22.7%**, reflecting rising costs and pressure on profit margins[79](index=79&type=chunk) - Loss from continuing operations increased moderately by **4.7%**, mainly impacted by declining gross profit margin, impairment loss on exploration and evaluation assets, and increased associate losses, partially offset by reduced impairment of other receivables and administrative expenses[80](index=80&type=chunk) [Health and Household Products Business](index=40&type=section&id=Health%20and%20Household%20Products%20Business) Health and household products business revenue grew by 14.9%, primarily due to replenishment by key customers. However, gross profit margin decreased to 21.3%, affected by rising material costs, escalating labor costs, and pricing pressure. The Group is actively expanding online business, developing private labels and new products, and seeking geographical market diversification to address challenges | Metric | 2025 (thousand HKD) | 2024 (thousand HKD) | | :--- | :--- | :--- | | Revenue | 115,200 | 100,300 | | Gross Profit Margin | 21.3% | 30.3% | - Revenue grew by **14.9%**, primarily due to key customers accelerating inventory replenishment, reversing the destocking trend of the previous financial year[82](index=82&type=chunk) - The decline in gross profit margin was primarily driven by significantly rising material costs, escalating labor costs, and pricing pressure from key customers negotiating lower unit prices[84](index=84&type=chunk) - The Group is actively expanding into online B2B and B2C e-commerce markets and plans to invest more resources in developing private labels, already owning two electric toothbrush brands and developing new products[85](index=85&type=chunk)[86](index=86&type=chunk) - US-China trade tensions and supply chain restructuring may exert negative pressure on future revenue, and the Group is actively expanding its customer base in other geographical markets[83](index=83&type=chunk) [Coal Mining Business](index=41&type=section&id=Coal%20Mining%20Business) Coal mining royalty income increased, but due to falling coal prices and adverse weather, mining activities were suspended for several months, resulting in a loss and recognition of impairment loss on exploration and evaluation assets | Metric | 2025 (thousand HKD) | 2024 (thousand HKD) | | :--- | :--- | :--- | | Royalty Income | 1,602 | 300 | | Segment Loss | (4,982) | 31,274 (Profit) | | Impairment Loss on Exploration and Evaluation Assets | 5,752 | (31,761) (Reversal) | - Royalty income increased by **434%**, but the segment shifted from profit to loss, primarily due to an impairment loss on exploration and evaluation assets of **5,752 thousand HKD**[88](index=88&type=chunk) - Mining activities were suspended for several months due to falling coal prices and adverse weather, with the contractor failing to meet agreed production levels[88](index=88&type=chunk) Coal Resources Estimate (thousand tonnes) | JORC Category | 2025年6月30日 | 2024年6月30日 | Change Percentage | | :--- | :--- | :--- | :--- | | Proved | 8,575 | 8,675 | -1.15% | | Controlled | 11,537 | 11,537 | 無 | | Inferred | 6,097 | 6,097 | 無 | | **Total** | 26,209 | 26,309 | | [Lending Business](index=42&type=section&id=Lending%20Business) The lending business no longer grants new loans, with the primary focus on recovering outstanding loans receivable, and the net amount continues to decrease | Metric | 2025 (thousand HKD) | 2024 (thousand HKD) | | :--- | :--- | :--- | | Outstanding Loans Receivable | 41,268 | 44,054 | | Total Loans Receivable, Net | 1,096 | 4,263 | - The Group no longer allows its lending business to grant new loans, with the primary focus on recovering outstanding loans receivable[91](index=91&type=chunk) - Total loans receivable, net, decreased from 4,263 thousand HKD in 2024 to **1,096 thousand HKD** in 2025[91](index=91&type=chunk) [Investment in Malaysia Port Dickson Property Development Project](index=43&type=section&id=Investment%20in%20Malaysia%20Port%20Dickson%20Property%20Development%20Project) The Group holds a 35% equity interest in Pacific Memory Sdn Bhd, which is engaged in commercial development in Port Dickson, Malaysia. Due to funding shortages and market challenges, the project has not been developed for years, leading the Group to recognize impairment and an increased share of associate losses - The Group holds a **35%** equity interest in Pacific Memory Sdn Bhd, which is engaged in commercial development in Port Dickson, Malaysia[92](index=92&type=chunk) - Due to funding shortages and market challenges, the Port Dickson project has not been developed for years, leading the Group to recognize an impairment (net of tax) of **82,208 thousand HKD** in 2025[93](index=93&type=chunk) - The Group's share of associate results recorded a loss that increased from 7,552 thousand HKD in 2024 to **29,637 thousand HKD** in 2025[93](index=93&type=chunk) [Discontinued China Property Projects](index=43&type=section&id=Discontinued%20China%20Property%20Projects) The Group completed the disposal of Hong Kong China Securities City Investment Limited on July 22, 2024, discontinuing its property development and primary land development businesses in China - On May 6, 2024, the Group entered into a disposal agreement with its major shareholder, Mr. Lim Kim Chai, to sell Hong Kong China Securities City Investment Limited for **53,700 thousand HKD**, completed on July 22, 2024[94](index=94&type=chunk) - Following the completion of the disposal, the Group discontinued its property development and primary land development businesses in China[94](index=94&type=chunk) [Outlook](index=43&type=section&id=Outlook) The Group maintains a cautious outlook for its health and household products business, planning to expand into the health industry, develop private labels, diversify geographical markets, and adopt a flexible production system. The coal mining business environment remains challenging, requiring prudent management and market monitoring. The lending business continues to focus on recovering existing loans [Health and Household Products Business Outlook](index=43&type=section&id=Health%20and%20Household%20Products%20Business%20Outlook) The health and household products business faces challenges including US-China trade tensions, potential tariff escalations, and supply chain disruptions. The Group plans to strategically expand into higher-margin health industries, develop private labels, focus on mainland China as a primary growth area, and diversify into European, Middle Eastern, and other Asian markets. It will adopt a flexible production system and drive cost efficiency - The market environment is highly challenging, facing US-China trade tensions, potential tariff escalations, and geopolitical uncertainties[95](index=95&type=chunk) - Strategically shifting business focus from traditional oral care and hair grooming products to health industries such as beauty, skincare, and other personal care products, to capture market opportunities with higher profit margins and faster turnover[96](index=96&type=chunk) - Accelerating the development of private labels for personal care and health products, already owning two electric toothbrush private labels, and planning to launch sonic electric toothbrushes and other new products in the China e-commerce market in Q4 2025[96](index=96&type=chunk) - Placing high importance on geographical diversification, planning to focus on mainland China as a primary growth area, and expanding into European, Middle Eastern, and other Asian markets to reduce reliance on the US market[97](index=97&type=chunk) - Achieving a flexible and scalable production system by utilizing suitable subcontractors, reducing capital intensity, and enhancing operational flexibility[97](index=97&type=chunk) - Driving cost efficiency, improving labor productivity and operational efficiency, including moderate workforce streamlining and enhanced monitoring of labor cost structures[98](index=98&type=chunk) [Coal Mining Business Outlook](index=45&type=section&id=Coal%20Mining%20Business%20Outlook) The coal mining business environment remains challenging, affected by weak coal prices and adverse weather. The Group will manage this segment cautiously; the ability to restore production capacity highly depends on coal price recovery, and it will continue negotiating remedies with contractors or consider engaging subcontractors - The business environment remains challenging, affected by both weak coal prices and adverse weather, with mining activities suspended for several months[99](index=99&type=chunk) - The ability to restore production capacity to a certain level highly depends on whether coal prices can recover to a level sufficient to support mining costs[99](index=99&type=chunk) - The Group will continue to negotiate with the contractor regarding the resumption of production levels, while also considering engaging subcontractors to work with the contractor, or taking over mining activities where feasible[99](index=99&type=chunk) [Lending Business Outlook](index=45&type=section&id=Lending%20Business%20Outlook) The primary focus of the lending business remains on recovering existing loans receivable, and the Group will continue these efforts relentlessly - The primary focus of this business is to recover existing loans receivable, and the Group will continue these efforts relentlessly[100](index=100&type=chunk) [Liquidity and Financial Resources](index=46&type=section&id=Liquidity%20and%20Financial%20Resources) The Group's cash position decreased, but net current liabilities significantly improved, and the gearing ratio substantially reduced. The Group's borrowings are primarily at fixed interest rates, resulting in very low interest rate risk, and currently has no foreign exchange hedging policy. Fundraising activities were completed after the reporting period, with no major investments or acquisitions, and some assets are pledged [Cash Position](index=46&type=section&id=Cash%20Position) As of June 30, 2025, the Group's cash and bank balances decreased, primarily denominated in USD | Currency | 2025 (thousand HKD) | 2024 (thousand HKD) | | :--- | :--- | :--- | | RMB | 1,612 | 16,131 | | USD | 7,548 | 2,411 | | Other Currencies | 1,000 | 160 | | **Total** | 11,352 | 20,135 | - Cash and bank balances decreased from 20,135 thousand HKD in 2024 to **11,352 thousand HKD** in 2025[101](index=101&type=chunk) [Current Ratio](index=46&type=section&id=Current%20Ratio) The Group's net current liabilities significantly improved, while the current ratio decreased | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Net Current Liabilities | (100,119) | (473,718) | | Current Ratio | 0.47 | 0.78 | - Net current liabilities improved from (473,718) thousand HKD in 2024 to **(100,119) thousand HKD** in 2025[102](index=102&type=chunk) - Current ratio decreased from **0.78** in 2024 to **0.47** in 2025[102](index=102&type=chunk) [Debts and Borrowings](index=46&type=section&id=Debts%20and%20Borrowings) The Group's total debts and borrowings significantly decreased, primarily comprising shareholder loans, unsecured third-party loans, and pledged bank loans | Metric | 2025 (thousand HKD) | 2024 (thousand HKD) | | :--- | :--- | :--- | | Total Debts and Borrowings | 356,094 | 1,344,401 | - Total debts and borrowings significantly decreased from 1,344,401 thousand HKD in 2024 to **356,094 thousand HKD** in 2025[103](index=103&type=chunk) [Gearing Ratio](index=46&type=section&id=Gearing%20Ratio) The Group's gearing ratio significantly decreased, reflecting an improvement in financial leverage | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Gearing Ratio | 137.4% | 1,168.5% | - Gearing ratio significantly decreased from **1,168.5%** in 2024 to **137.4%** in 2025[104](index=104&type=chunk) [FX and Interest Rate Fluctuation Risks and Hedging Arrangements](index=46&type=section&id=FX%20and%20Interest%20Rate%20Fluctuation%20Risks%20and%20Hedging%20Arrangements) The Group is exposed to a certain degree of foreign exchange risk but currently has no foreign exchange hedging policy. As borrowing interest rates are primarily fixed, interest rate risk is very low, and thus no interest rate risk is hedged - The Group is exposed to a certain degree of foreign exchange risk but currently has no foreign exchange hedging policy[105](index=105&type=chunk) - The Group's borrowings are primarily at fixed interest rates, and operating cash flows are largely unaffected by market interest rate fluctuations, resulting in very low interest rate risk with no hedging of interest rate risk[105](index=105&type=chunk) [Fundraising Activities](index=47&type=section&id=Fundraising%20Activities) The Company did not undertake any fundraising activities for the year ended June 30, 2025, but proposed fundraising activities were completed after the year-end - The Company did not undertake any fundraising activities for the year ended June 30, 2025[106](index=106&type=chunk) - Proposed fundraising activities were completed after the year ended June 30, 2025; details can be found in the 'Subsequent Significant Events' section[106](index=106&type=chunk) [Major Investments Held, Major Acquisitions and Disposals of Subsidiaries](index=47&type=section&id=Major%20Investments%20Held%2C%20Major%20Acquisitions%20and%20Disposals%20of%20Subsidiaries) Aside from the disposal of discontinued operations, the Group held no major investments and undertook no significant acquisitions or disposals during the reporting period - Aside from the disposal, the Group held no major investments and undertook no significant acquisitions or disposals for the year ended June 30, 2025[107](index=107&type=chunk) [Pledge of Assets](index=47&type=section&id=Pledge%20of%20Assets) As of June 30, 2025, certain of the Group's land and buildings were pledged as collateral for bank financing - As of June 30, 2025, certain of the Group's land and buildings, amounting to approximately **55,932 thousand HKD**, were pledged as collateral for bank financing granted to the Group[108](index=108&type=chunk) [Significant Contingent Liabilities](index=47&type=section&id=Significant%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[109](index=109&type=chunk) [Employees and Remuneration Policy](index=47&type=section&id=Employees%20and%20Remuneration%20Policy) As of June 30, 2025, the Group had 582 employees globally, with remuneration determined by market standards, individual performance, and experience | Region | 2025 Number of Employees | 2024 Number of Employees | | :--- | :--- | :--- | | Hong Kong | 18 | 20 | | China | 563 | 567 | | Indonesia | 1 | 1 | | **Total** | 582 | 588 | - Employee remuneration is determined and reviewed based on market standards, individual performance, and experience, with bonuses and incentives contingent on the Group's business results and individual employee performance[110](index=110&type=chunk) [Future Plans for Major Investments or Capital Assets](index=47&type=section&id=Future%20Plans%20for%20Major%20Investments%20or%20Capital%20Assets) As of June 30, 2025, there were no future plans for major investments or capital asset acquisitions - As of June 30, 2025, there were no future plans for major investments or capital asset acquisitions[111](index=111&type=chunk) [Dividends](index=47&type=section&id=Dividends_Liquidity) The Board does not recommend the payment of any dividend for the current year - The Board does not recommend the payment of any dividend for the current year (for the year ended June 30, 2024: nil)[112](index=112&type=chunk) [Purchase, Sale or Redemption of Listed Securities of the Company](index=47&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20Listed%20Securities%20of%20the%20Company) Neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities for the year ended June 30, 2025 - Neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities for the year ended June 30, 2025[113](index=113&type=chunk) [Other Information](index=48&type=section&id=Other%20Information) This section provides other important information regarding the composition of the Audit Committee, auditor's scope of work, compliance with the standard code for directors' securities transactions, corporate governance code, and Board composition [Audit Committee](index=48&type=section&id=Audit%20Committee) The Audit Committee, comprising four independent non-executive directors, has reviewed the financial information contained in this announcement - The Audit Committee comprises Mr. Hou Zhijie, Mr. Liang Zhixiong, Mr. Li Hanquan, and Ms. Yang Rintong (all independent non-executive directors), with Mr. Li Hanquan as Chairman[114](index=114&type=chunk) - The Audit Committee has reviewed the financial information contained in this announcement[114](index=114&type=chunk) [Auditor's Scope of Work](index=48&type=section&id=Auditor's%20Scope%20of%20Work) The auditor has agreed that the consolidated financial statement figures in this preliminary announcement align with the audited consolidated financial statements, but their work does not constitute an assurance engagement, thus no opinion or assurance conclusion is provided for the preliminary announcement - ZHONGHUI ANDA CPA Limited, the auditor, has agreed that the figures in this preliminary announcement relating to the Group's consolidated statement of financial position, consolidated statement of profit or loss and other comprehensive income, and their related notes for the year ended June 30, 2025, are consistent with the amounts in the Group's audited consolidated financial statements for the year ended June 30, 2025[115](index=115&type=chunk) - The work performed by the auditor does not constitute an assurance engagement, and therefore no opinion or assurance conclusion is provided for the preliminary announcement[115](index=115&type=chunk) [Standard Code for Securities Transactions by Directors](index=48&type=section&id=Standard%20Code%20for%20Securities%20Transactions%20by%20Directors) The Company has adopted the Standard Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix C3 of the Listing Rules, and confirms that all directors have complied with the code throughout the reporting period - The Company has adopted the Standard Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix C3 of the Listing Rules[116](index=116&type=chunk) - Following specific inquiries made to all Directors, the Company confirms that all Directors have complied with the required standards set out in the Standard Code for the year ended June 30, 2025[116](index=116&type=chunk) [Corporate Governance Code](index=48&type=section&id=Corporate%20Governance%20Code) For the year ended June 30, 2025, the Company has complied with all requirements of the Corporate Governance Code as set out in Appendix C1 of the Listing Rules - For the year ended June 30, 2025, the Company has complied with all requirements of the Corporate Governance Code as set out in Appendix C1 of the Listing Rules[117](index=117&type=chunk) [Board Composition](index=48&type=section&id=Board%20Composition) As of the announcement date, the Board of Directors comprises two executive directors, one non-executive director, and four independent non-executive directors - As of the date of this announcement, the Board of Directors comprises two executive directors, one non-executive director, and four independent non-executive directors[118](index=118&type=chunk)

[Maike Tube Industry Holdings Limited 2024 Annual Report Supplemental Announcement](index=1&type=section&id=Maike%20Tube%20Industry%20Holdings%20Limited%202024%20Annual%20Report%20Supplemental%20Announcement) [Background and Purpose of the Announcement](index=1&type=section&id=Background%20and%20Purpose%20of%20the%20Announcement) This announcement supplements the 2024 annual report's share option scheme disclosure, fulfilling Chapter 17 of the HKEX Listing Rules - This announcement supplements the "Share Option Scheme" section within the "Directors' Report" of the company's annual report for the year ended **December 31, 2024**[3](index=3&type=chunk) - The supplementary disclosure provides additional information on the share option scheme, in compliance with **Chapter 17 of the Listing Rules**[3](index=3&type=chunk) [Supplemental Information on Share Option Scheme](index=1&type=section&id=Supplemental%20Information%20on%20Share%20Option%20Scheme) This section details the share option scheme's grantable shares, adoption date, proportion of issued shares, and confirms no share awards or service provider sub-limits Key Data of Share Option Scheme | Indicator | Details | | :--- | :--- | | **Number of Share Options Available for Grant (Beginning/End of 2024)** | 43,380,000 shares | | **Scheme Adoption Date** | November 19, 2019 | | **Sub-limit for Service Providers** | Not applicable | | **Share Awards** | None | | **Total Number of Shares Available for Issue (as % of Issued Shares)** | 43,380,000 shares (10%) | [Board of Directors Information](index=1&type=section&id=Board%20of%20Directors%20Information) This section outlines the composition of Maike Tube Industry Holdings Limited's Board of Directors as of the announcement date - Executive Directors include **Mr. Guo Lei (Chairman)**, **Mr. Wang Ning**, and **Mr. Yang Shufeng**[4](index=4&type=chunk) - Non-Executive Directors include **Ms. Zhao Xuelian** and **Mr. Kong Linglei**[4](index=4&type=chunk) - Independent Non-Executive Directors include **Mr. Liu Fengyuan**, **Mr. Ding Xiaodong**, and **Mr. Sun Yongxi**[4](index=4&type=chunk)

Corporate Information [Board of Directors and Committees](index=3&type=section&id=Board%20of%20Directors%20and%20Committees) The Board comprises executive, non-executive, and independent non-executive directors, with committees ensuring a sound corporate governance structure - The Board of Directors includes executive directors such as Mr Luo Fei (Chairman) and Mr Wang Yidong, along with several non-executive and independent non-executive directors[4](index=4&type=chunk) - The company has an Audit Committee, Nomination Committee, Remuneration Committee, and Environmental, Social and Governance Committee, each with a designated chairman and members[4](index=4&type=chunk) [Corporate Contact Information and Professional Services](index=3&type=section&id=Corporate%20Contact%20Information%20and%20Professional%20Services) The company is registered in the Cayman Islands, with its head office in Hong Kong, and employs Ernst & Young as its auditor - The company's registered office is in the Cayman Islands, with its head office and principal place of business located at One Island East, Taikoo Place, 18 Westlands Road, Quarry Bay, Hong Kong[4](index=4&type=chunk) - **Ernst & Young** serves as the company's auditor, and Computershare Hong Kong Investor Services Limited is the Hong Kong branch share registrar[5](index=5&type=chunk) Financial Highlights [Key Financial Indicators](index=5&type=section&id=Key%20Financial%20Indicators) For the six months ended June 30, 2025, revenue grew by 4.9% to RMB 7,019.2 million, while net profit significantly decreased by 76.8% Key Financial Indicators for the Six Months Ended June 30 | Indicator | 2025 (RMB million) | 2024 (RMB million) | Change | | :--- | :--- | :--- | :--- | | Revenue | 7,019.2 | 6,692.1 | +4.9% | | Gross Profit | 4,389.1 | 4,072.3 | +7.8% | | EBITDA* | 1,033.1 | 1,098.4 | –5.9% | | Adjusted Comparable EBITDA* | 1,100.7 | 1,139.8 | –3.4% | | Adjusted Comparable EBITDA Margin | 15.7% | 17.0% | –1.3 ppts | | Net Profit | 71.0 | 305.8 | –76.8% | | Adjusted Comparable Net Profit** | 363.0 | 347.2 | +4.6% | | Adjusted Comparable Net Profit Margin | 5.2% | 5.2% | – | - EBITDA refers to earnings before interest, income tax expense, depreciation, and amortization, while adjusted comparable figures exclude non-cash and non-recurring items[6](index=6&type=chunk) [Revenue Composition Analysis](index=6&type=section&id=Revenue%20Composition%20Analysis) Nutritional supplements remain the primary revenue source at 65.6%, with Mainland China being the largest market, contributing 70.3% of total revenue Revenue by Product Segment | Product Segment | 2025 Share | 2024 Share | | :--- | :--- | :--- | | Nutritional Supplements | 65.6% | 66.1% | | Infant Formulae | 28.1% | 26.9% | | Others | 6.3% | 7.0% | Revenue by Business Segment | Business Segment | 2025 Share | 2024 Share | | :--- | :--- | :--- | | Adult Nutrition and Care Products (ANC) | 49.0% | 49.0% | | Pet Nutrition and Care Products (PNC) | 15.4% | 14.7% | | Baby Nutrition and Care Products (BNC) | 35.6% | 36.3% | Revenue by Geography | Geography | 2025 Share | 2024 Share | | :--- | :--- | :--- | | Mainland China | 70.3% | 67.9% | | Australia and New Zealand | 11.4% | 14.6% | | North America | 12.3% | 12.2% | | Other regions | 6.0% | 5.3% | Chairman's Statement [Overall Performance and Strategic Highlights](index=7&type=section&id=Overall%20Performance%20and%20Strategic%20Highlights) The Group's total revenue grew 5.2% on a like-for-like basis in the first half, driven by a focus on high-margin growth segments - Total revenue grew **5.2% on a like-for-like basis** in the first half, with all business segments returning to growth[14](index=14&type=chunk) - High-margin nutritional supplements accounted for **65.6% of revenue**, with vitamins, herbs and mineral supplements (VHMS) growing 5.8% and pet nutrition growing 14.3%[16](index=16&type=chunk) - The company achieved an **adjusted comparable EBITDA margin of 15.7%**, improved adjusted comparable net profit, and successfully refinanced its 2026 senior notes[16](index=16&type=chunk) - An interim dividend of **HK$0.19 per ordinary share** was declared, representing approximately 30% of adjusted comparable net profit[18](index=18&type=chunk) [Adult Nutrition and Care Products](index=8&type=section&id=Adult%20Nutrition%20and%20Care%20Products) The Adult Nutrition and Care Products segment achieved mid-single-digit growth, driven by strong performance in Mainland China, particularly in beauty and anti-aging - The Adult Nutrition and Care Products (ANC) segment achieved **mid-single-digit growth** in the first half, with double-digit growth in Mainland China[19](index=19&type=chunk) - **Swisse ranked No. 1** in Mainland China's overall VHMS market, with cross-border e-commerce sales growing by 18.1%[16](index=16&type=chunk)[20](index=20&type=chunk)[22](index=22&type=chunk) - Sales through the **Douyin channel grew by 80.3%**, with market share ranking fourth in the industry[20](index=20&type=chunk) - The ANZ local market saw solid growth, but total revenue declined by 16.2% on a like-for-like basis due to a downturn in the corporate daigou business[22](index=22&type=chunk) [Baby Nutrition and Care Products](index=9&type=section&id=Baby%20Nutrition%20and%20Care%20Products) The Baby Nutrition and Care Products segment resumed growth after the new "GB" standard transition, with Mainland China infant formula sales up 10.0% - The Baby Nutrition and Care Products (BNC) segment resumed growth, with Mainland China infant formulae sales **increasing by 10.0%**[16](index=16&type=chunk)[24](index=24&type=chunk) - **Biostime's market share** in Mainland China's super premium infant formulae segment reached a record high of **15.9%**[16](index=16&type=chunk)[24](index=24&type=chunk) - During the 618 online shopping festival, GMV for Stage 1 and 2 infant formulae **grew by 103%**[24](index=24&type=chunk) [Pet Nutrition and Care Products](index=10&type=section&id=Pet%20Nutrition%20and%20Care%20Products) The Pet Nutrition and Care Products segment achieved high-single-digit growth, with high-margin pet nutrition products growing 14.3% on a like-for-like basis - The Pet Nutrition and Care Products (PNC) segment achieved **high-single-digit growth**, with high-margin pet nutrition products growing 14.3% on a like-for-like basis[16](index=16&type=chunk)[26](index=26&type=chunk) - **Zesty Paws** delivered strong like-for-like growth of **13.4% in North America**, while **Solid Gold** sales in Mainland China grew by **17.5%**[16](index=16&type=chunk)[26](index=26&type=chunk)[27](index=27&type=chunk) - Solid Gold's sales in North America decreased by 23.3%, reflecting a strategic shift towards higher-margin channels and premium products[26](index=26&type=chunk) [Optimising Capital Structure](index=10&type=section&id=Optimising%20Capital%20Structure) The company successfully refinanced its 2026 USD senior notes by issuing new 3.5-year US$300 million senior notes, reducing financing costs - Successfully issued new **3.5-year US$300 million senior notes** to refinance the 2026 USD senior notes, lowering overall financing costs[16](index=16&type=chunk)[28](index=28&type=chunk) - As of June 30, 2025, cash reserves stood at **RMB 1.83 billion**, with RMB-denominated and hedged RMB debt accounting for 75.7% of total borrowings[28](index=28&type=chunk) [Outlook](index=11&type=section&id=Outlook) The company will continue to drive growth in high-margin VHMS and pet nutrition, accelerate business expansion, and maintain a healthy profitability level - The ANC segment is expected to maintain growth momentum in the second half, while infant formulae sales are projected to accelerate[29](index=29&type=chunk) - The PNC business will continue its growth trajectory, with Zesty Paws executing its omni-channel strategy and Solid Gold gaining traction in Mainland China[30](index=30&type=chunk) - The company is committed to maintaining ample liquidity, pursuing deleveraging, and steadily reducing its net gearing ratio to enhance financial resilience[30](index=30&type=chunk) [Appreciation](index=11&type=section&id=Appreciation) The Chairman expresses sincere gratitude to all stakeholders and reaffirms the company's commitment to creating long-term value - Chairman Luo Fei extends sincere thanks to stakeholders, including shareholders, employees, business partners, and creditors[31](index=31&type=chunk) - The company will continue to create long-term value for all it serves and is dedicated to inspiring people globally to live healthier and happier lives[31](index=31&type=chunk) Management Discussion and Analysis [Operating Results](index=12&type=section&id=Operating%20Results) For the six months ended June 30, 2025, Group revenue grew 4.9% on a reported basis and 5.2% on a like-for-like basis to RMB 7,019.2 million - For the six months ended June 30, 2025, Group revenue increased by **4.9% on a reported basis** (5.2% on a like-for-like basis) to **RMB 7,019.2 million**[33](index=33&type=chunk) - Revenue from high-margin nutritional supplements grew by **4.6% year-on-year** on a like-for-like basis, accounting for **65.6% of total Group revenue**[33](index=33&type=chunk) Revenue by Product Segment (RMB million) | Product Segment | 2025 | 2024 | Reported Change | Like-for-like Change | 2025 Share | 2024 Share | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Nutritional Supplements | 4,606.0 | 4,425.2 | 4.1% | 4.6% | 65.6% | 66.1% | | - Vitamins, herbs and mineral supplements | 3,418.3 | 3,258.2 | 4.9% | 5.8% | 48.7% | 48.7% | | - Pet nutrition | 760.5 | 658.4 | 15.5% | 14.3% | 10.8% | 9.8% | | - Infant probiotics and nutritional supplements | 427.2 | 508.6 | -16.0% | -16.0% | 6.1% | 7.6% | | Infant Formulae | 1,970.9 | 1,798.4 | 9.6% | 9.6% | 28.1% | 26.9% | | Others | 442.3 | 468.5 | -5.6% | -5.8% | 6.3% | 7.0% | Revenue by Business Segment (RMB million) | Business Segment | 2025 | 2024 | Reported Change | Like-for-like Change | 2025 Share | 2024 Share | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Adult Nutrition and Care Products (ANC) | 3,438.7 | 3,275.6 | 5.0% | 5.9% | 49.0% | 49.0% | | Baby Nutrition and Care Products (BNC) | 2,501.3 | 2,431.5 | 2.9% | 2.9% | 35.6% | 36.3% | | Pet Nutrition and Care Products (PNC) | 1,079.2 | 985.0 | 9.6% | 8.6% | 15.4% | 14.7% | Revenue by Geography (RMB million) | Geography | 2025 | 2024 | Reported Change | Like-for-like Change | 2025 Share | 2024 Share | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Mainland China | 4,936.0 | 4,541.4 | 8.7% | 8.7% | 70.3% | 67.9% | | ANZ | 800.7 | 975.9 | -18.0% | -15.6% | 11.4% | 14.6% | | North America | 862.2 | 815.8 | 5.7% | 4.6% | 12.3% | 12.2% | | Other regions | 420.3 | 359.0 | 17.1% | 18.8% | 6.0% | 5.3% | | **Total** | **7,019.2** | **6,692.1** | **4.9%** | **5.2%** | **100.0%** | **100.0%** | - Revenue from Mainland China increased by **8.7% year-on-year** to **RMB 4,936.0 million**, accounting for 70.3% of total Group revenue[37](index=37&type=chunk) - Revenue from the ANZ market decreased by **15.6% on a like-for-like basis**, mainly due to the decline in the corporate daigou business[41](index=41&type=chunk) - Revenue from North America grew by **4.6% on a like-for-like basis**, driven by premiumisation and channel expansion in pet nutrition[42](index=42&type=chunk) - Revenue from other regions increased by **18.8% on a like-for-like basis**, with strong performance in Asian expansion markets[43](index=43&type=chunk) [Gross Profit and Gross Profit Margin](index=14&type=section&id=Gross%20Profit%20and%20Gross%20Profit%20Margin) Gross profit increased by 7.8% to RMB 4,389.1 million, with the gross profit margin rising from 60.9% to 62.5% due to favorable product mix - Gross profit for the first half was **RMB 4,389.1 million**, an increase of **7.8%** from the same period last year[44](index=44&type=chunk) - The gross profit margin increased from **60.9%** in 1H 2024 to **62.5%** in 1H 2025[44](index=44&type=chunk) - The gross profit margin for the ANC segment rose to **67.5%**, the PNC segment's margin rose to **58.7%**, while the BNC segment's margin decreased to **57.3%**[45](index=45&type=chunk) [Other Income and Gains](index=15&type=section&id=Other%20Income%20and%20Gains) For the six months ended June 30, 2025, other income and gains amounted to RMB 61.8 million, mainly from foreign exchange gains - Other income and gains were **RMB 61.8 million**, primarily including net foreign exchange gains of **RMB 24.4 million**[46](index=46&type=chunk)[47](index=47&type=chunk) [Selling and Distribution Costs](index=15&type=section&id=Selling%20and%20Distribution%20Costs) Selling and distribution costs rose 12.4% to RMB 2,883.9 million, increasing as a percentage of revenue from 38.3% to 41.1% - Selling and distribution costs increased by **12.4% to RMB 2,883.9 million**, representing **41.1% of revenue** compared to 38.3% previously[48](index=48&type=chunk) - The ANC business's selling and distribution costs rose by **19.2%**, increasing to **41.9%** of its revenue[49](index=49&type=chunk) - The BNC business's selling and distribution costs remained broadly stable, decreasing to **38.1%** of its revenue[51](index=51&type=chunk) - The PNC business's selling and distribution costs increased by **21.6%**, rising to **45.4%** of its revenue[52](index=52&type=chunk) [Administrative Expenses](index=16&type=section&id=Administrative%20Expenses) Administrative expenses slightly decreased by 1.8% to RMB 398.5 million, reflecting efforts in operational efficiency and cost management - Administrative expenses slightly decreased by **1.8% to RMB 398.5 million**[53](index=53&type=chunk) - As a percentage of revenue, administrative expenses decreased from **6.1% to 5.7%**, benefiting from improved operational efficiency and cost management[53](index=53&type=chunk) [Other Expenses](index=16&type=section&id=Other%20Expenses) Other expenses amounted to RMB 181.7 million, primarily comprising R&D expenses of RMB 95.9 million and a net fair value loss on financial instruments - Other expenses were **RMB 181.7 million**, of which R&D expenses were **RMB 95.9 million**, a year-on-year decrease of 7.8%[54](index=54&type=chunk) - A non-cash net fair value loss on derivative financial instruments of **RMB 74.1 million** was recorded, mainly due to losses on cross-currency swaps[54](index=54&type=chunk) [EBITDA and Adjusted Comparable EBITDA](index=17&type=section&id=EBITDA%20and%20Adjusted%20Comparable%20EBITDA) Adjusted comparable EBITDA decreased by 3.4% to RMB 1,100.7 million, with the margin declining by 1.3 percentage points to 15.7% - Adjusted comparable EBITDA was **RMB 1,100.7 million**, a decrease of **3.4%** from the same period last year[55](index=55&type=chunk) - The adjusted comparable EBITDA margin decreased from **17.0% to 15.7%**, mainly due to a higher investment base, unfavorable channel mix, and strategic investments[55](index=55&type=chunk) Reconciliation of EBITDA and Adjusted Comparable EBITDA (RMB million) | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | EBITDA | 1,033.1 | 1,098.4 | | Adjustments for the following items: | | | | Non-cash items: | | | | (1) Net foreign exchange (gains)/losses | (24.4) | 40.9 | | (2) Net fair value losses/(gains) on derivative financial instruments and other non-current financial assets | 68.5 | (59.1) | | (3) Share of losses of an associate | 13.5 | 12.7 | | Non-recurring items: | | | | (4) One-off advisory fees related to Group entity structure optimisation | 10.0 | – | | (5) One-off restructuring costs for Solid Gold business in North America | – | 46.9 | | **Adjusted Comparable EBITDA** | **1,100.7** | **1,139.8** | [Finance Costs](index=17&type=section&id=Finance%20Costs) Finance costs increased by 33.8% to RMB 579.5 million, primarily due to a one-off premium for the refinancing of the 2026 senior notes - Finance costs increased by **33.8% to RMB 579.5 million**[57](index=57&type=chunk) - Costs included **RMB 351.5 million** in interest on loans and notes, and a **RMB 224.4 million** one-off premium and non-cash write-off for the 2026 senior notes refinancing[57](index=57&type=chunk) - The implied annual interest expense rate (including hedging benefits) decreased from **7.07% to 6.63%**[58](index=58&type=chunk) [Income Tax Expense](index=18&type=section&id=Income%20Tax%20Expense) Income tax expense rose by 7.9% to RMB 235.3 million, with the effective tax rate on a reported basis increasing from 41.6% to 76.8% - Income tax expense increased by **7.9% to RMB 235.3 million**[59](index=59&type=chunk) - On a reported basis, the effective tax rate increased from **41.6% to 76.8%**[59](index=59&type=chunk) [Net Profit and Adjusted Comparable Net Profit](index=18&type=section&id=Net%20Profit%20and%20Adjusted%20Comparable%20Net%20Profit) Net profit was RMB 71.0 million, a 76.8% decrease, while adjusted comparable net profit was RMB 363.0 million, a 4.6% increase Reconciliation of Net Profit and Adjusted Comparable Net Profit (RMB million) | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | Net Profit | 71.0 | 305.8 | | Adjustments for the following items: | | | | EBITDA adjusted comparable items listed above | 67.6 | 41.4 | | Non-cash item*: | | | | One-off premium and non-cash write-off of related unamortised transaction costs for tender offer and early redemption of 2026 Senior Notes | 224.4 | – | | **Adjusted Comparable Net Profit** | **363.0** | **347.2** | - Adjusted comparable net profit increased by **4.6% year-on-year** to **RMB 363.0 million**[60](index=60&type=chunk) [Non-IFRS Financial Measures](index=18&type=section&id=Non-IFRS%20Financial%20Measures) The company uses adjusted comparable EBITDA and net profit as non-IFRS measures to eliminate non-cash or non-recurring items for better comparison - The company uses adjusted comparable EBITDA and adjusted comparable net profit as non-IFRS financial measures to eliminate the impact of non-cash or non-recurring items[61](index=61&type=chunk) [Liquidity and Capital Resources](index=19&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintained a solid liquidity position with net cash from operating activities of RMB 998.0 million and a net gearing ratio of 3.89x - Net cash from operating activities was **RMB 998.0 million**, net cash used in investing activities was **RMB 31.4 million**, and net cash used in financing activities was **RMB 706.5 million**[64](index=64&type=chunk)[65](index=65&type=chunk)[66](index=66&type=chunk) - As of June 30, 2025, cash and bank balances amounted to **RMB 1,812.0 million**[67](index=67&type=chunk) Net Gearing Ratio | Indicator | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | | :--- | :--- | :--- | | Total Debt | 9,259.6 | 9,403.3 | | Less: Cash and cash equivalents | 1,812.0 | 1,603.9 | | Net Debt | 7,447.6 | 7,799.4 | | Divided by: Adjusted Comparable EBITDA | 1,913.2 | 1,952.3 | | **Net Gearing Ratio** | **3.89x** | **3.99x** | [Working Capital](index=20&type=section&id=Working%20Capital) The average turnover days for trade and bills receivables slightly decreased to 27 days, while inventory turnover days improved to 131 days - The average turnover days for trade and bills receivables slightly decreased from **28 days to 27 days**[69](index=69&type=chunk) - Inventory turnover days decreased from **146 days to 131 days**, with BNC product inventory turnover days decreasing to 122 days[70](index=70&type=chunk) [Interim Dividend](index=21&type=section&id=Interim%20Dividend) The Board resolved to declare an interim dividend of HK$0.19 per ordinary share, representing approximately 30% of adjusted comparable net profit - The Board declared an interim dividend of **HK$0.19 per ordinary share**, representing approximately 30% of adjusted comparable net profit[72](index=72&type=chunk) [Material Business Development Subsequent to the End of the Reporting Period](index=21&type=section&id=Material%20Business%20Development%20Subsequent%20to%20the%20End%20of%20the%20Reporting%20Period) The company's subsidiary, BHA, has formally objected to an amended assessment from the Australian Taxation Office and paid a cash deposit of A$104 million - BHA has objected to the Australian Taxation Office's demand for **A$234.5 million** in primary tax, **A$55.2 million** in interest, and **A$117.3 million** in penalties[73](index=73&type=chunk) - BHA paid a cash deposit of **A$104 million** on July 15, 2025, which will be recognised as an asset on the balance sheet[74](index=74&type=chunk) - The company believes the probability of a future outflow of funds is low and is prepared to pursue further legal action[74](index=74&type=chunk)[75](index=75&type=chunk) Corporate Governance and Other Information [Corporate Governance Code](index=22&type=section&id=Corporate%20Governance%20Code) The company has complied with all code provisions of the Corporate Governance Code as set out in the Listing Rules of The Stock Exchange of Hong Kong Limited - The company has complied with all code provisions of the Corporate Governance Code that were in effect as of June 30, 2025[76](index=76&type=chunk) [Model Code for Securities Transactions](index=22&type=section&id=Model%20Code%20for%20Securities%20Transactions) The company has adopted its own code of conduct for directors' securities transactions on terms no less exacting than the required standard - The company has adopted its own code of conduct for directors' securities transactions on terms no less exacting than the Model Code[78](index=78&type=chunk) - All directors have confirmed compliance with the company's code and the Model Code, and no violations by employees were found[78](index=78&type=chunk)[80](index=80&type=chunk) [Audit Committee](index=22&type=section&id=Audit%20Committee) The Audit Committee, comprising three non-executive directors, is primarily responsible for overseeing financial reporting and internal controls - The Audit Committee, chaired by Professor Ding Yuan, is primarily responsible for the appointment of external auditors and monitoring financial reporting and internal controls[82](index=82&type=chunk) [Remuneration Committee](index=23&type=section&id=Remuneration%20Committee) The Remuneration Committee's main objective is to make recommendations on the remuneration policy and structure for directors and senior management - The Remuneration Committee, chaired by Mr Chan Wai Cheng, is primarily responsible for making recommendations on the remuneration policy for directors and senior management[83](index=83&type=chunk) [Nomination Committee](index=23&type=section&id=Nomination%20Committee) The Nomination Committee is responsible for reviewing the Board's composition, developing nomination procedures, and assessing the independence of directors - The Nomination Committee, chaired by Mr Luo Fei, is responsible for reviewing Board composition, establishing nomination procedures, and assessing the independence of INEDs[84](index=84&type=chunk) - The committee considers diversity factors such as gender, race, language, cultural background, and industry experience when assessing Board composition[84](index=84&type=chunk) [Environmental, Social and Governance Committee](index=24&type=section&id=Environmental,%20Social%20and%20Governance%20Committee) The ESG Committee aims to effectively manage sustainability matters and enhance the quality of related disclosures - The Environmental, Social and Governance Committee, chaired by Ms Laetitia Albertini, aims to more effectively manage sustainability matters[86](index=86&type=chunk) - The committee's duties include assisting the Board in overseeing the development of sustainability vision, goals, and strategies, and managing related risks[86](index=86&type=chunk) [Shareholder Communication and Investor Relations](index=25&type=section&id=Shareholder%20Communication%20and%20Investor%20Relations) The company maintains effective communication with shareholders through various channels, including general meetings and investment conferences - The company maintains effective communication with shareholders through general meetings, investment conferences, and one-on-one meetings[87](index=87&type=chunk) - In the first half of the year, the company participated in **18 investment conferences** and held approximately **290 meetings** with analysts and institutional investors[87](index=87&type=chunk) - The company's website, www.hh.global, provides the latest business, financial, and corporate governance information[88](index=88&type=chunk) [Review of Interim Financial Statements](index=26&type=section&id=Review%20of%20Interim%20Financial%20Statements) The financial information in this interim report has been reviewed by the independent auditor, Ernst & Young, in accordance with HKSRE 2410 - The interim condensed consolidated financial statements are unaudited but have been reviewed by the independent auditor, Ernst & Young, in accordance with HKSRE 2410[89](index=89&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=26&type=section&id=Purchase,%20Sale%20or%20Redemption%20of%20the%20Company's%20Listed%20Securities) The company repurchased and redeemed a total principal amount of US$297,000,000 of its 13.5% senior notes due 2026 to optimize its capital structure - The company repurchased and redeemed a total principal amount of **US$297,000,000** of its 13.5% senior notes due 2026[90](index=90&type=chunk) - This repurchase was funded by the issuance of 9.125% senior notes due 2028, aiming to reduce financing costs and optimize the capital structure[90](index=90&type=chunk) [Share Schemes](index=26&type=section&id=Share%20Schemes) The company has adopted six share schemes, with the 2022 Share Award Scheme and the 2024 Share Scheme remaining in effect - The company has adopted six share schemes, with the **2022 Share Award Scheme** and the **2024 Share Scheme** remaining in full force and effect[91](index=91&type=chunk) - As of June 30, 2025, the total number of shares available for issue under the 2024 Share Scheme was **64,556,135**, representing approximately 10% of the issued share capital[94](index=94&type=chunk) - As of June 30, 2025, the total number of shares available for issue under the 2022 Share Award Scheme was **57,808,894**, representing approximately 8.95% of the issued share capital[101](index=101&type=chunk) - The 2020 Share Option Scheme and 2010 Share Option Scheme have been terminated for new grants, but outstanding options remain valid[102](index=102&type=chunk)[105](index=105&type=chunk) [Interests and Short Positions of Directors and Chief Executives in Shares, Underlying Shares and Debentures of the Company](index=32&type=section&id=Interests%20and%20Short%20Positions%20of%20Directors%20and%20Chief%20Executives%20in%20Shares,%20Underlying%20Shares%20and%20Debentures%20of%20the%20Company) As of June 30, 2025, Mr Luo Fei held a 66.92% interest in the company's shares and underlying shares through beneficial ownership and as a trust founder Interests and Short Positions of Directors and Chief Executives in Shares, Underlying Shares and Debentures of the Company | Director's Name | Capacity/Nature of interest | Long/Short Position | Shares or Underlying Shares | Approx. % of interest in the Company | | :--- | :--- | :--- | :--- | :--- | | Mr Luo Fei | Beneficial owner | Long | 1,185,196 | 0.18% | | | Beneficial owner | Long | 493,002 | 0.08% | | | Founder of a discretionary trust | Long | 432,000,000 | 66.92% | | Mr Wang Yidong | Beneficial owner | Long | 640,470 | 0.10% | | | Beneficial owner | Long | 594,731 | 0.09% | | Ms Laetitia Albertini | Beneficial owner | Long | 1,305,367 | 0.20% | | | Beneficial owner | Long | 893,027 | 0.14% | | Mr Luo Yun | Beneficiary of a trust | Long | 432,000,000 | 66.92% | | Ms Mingshu Zhao Wiggins | Beneficial owner | Long | 40,000 | 0.006% | | Mr Chan Wai Cheng | Beneficial owner | Long | 180,000 | 0.03% | | | Beneficial owner | Long | 200,000 | 0.03% | | Ms Luo Liu Yanqing | Beneficial owner | Long | 120,000 | 0.02% | | | Beneficial owner | Long | 100,000 | 0.02% | | Professor Ding Yuan | Beneficial owner | Long | 80,000 | 0.01% | - The Luo Fei Family Trust and the Luo Yun Family Trust indirectly hold a **66.92% interest** in the company through UBS Trustees (BVI) Limited[112](index=112&type=chunk) [Interests and Short Positions of Substantial Shareholders](index=34&type=section&id=Interests%20and%20Short%20Positions%20of%20Substantial%20Shareholders) As of June 30, 2025, Coliving Holdings Limited and its controlled corporations were substantial shareholders, each holding a 66.92% interest Interests and Short Positions of Substantial Shareholders | Name | Capacity/Nature of interest | Long/Short Position | Number of Shares | Approx. % of shareholding | | :--- | :--- | :--- | :--- | :--- | | Coliving Holdings Limited | Beneficial owner | Long | 432,000,000 | 66.92% | | Flying Company Limited | Interest of controlled corporation | Long | 432,000,000 | 66.92% | | Coliving Limited | Interest of controlled corporation | Long | 432,000,000 | 66.92% | | UBS Trustees (BVI) Limited | Trustee | Long | 432,000,000 | 66.92% | - Coliving Holdings Limited is owned 57.25% by Coliving Limited, which is 100% owned by Flying Company Limited[114](index=114&type=chunk)[115](index=115&type=chunk) [Changes in Directors' Information](index=35&type=section&id=Changes%20in%20Directors'%20Information) No changes in directors' information were disclosed in this interim report - There were no changes in directors' information required to be disclosed pursuant to Rule 13.51B(1) of the Listing Rules in this interim report[118](index=118&type=chunk) [Change in Composition of Board Committees](index=35&type=section&id=Change%20in%20Composition%20of%20Board%20Committees) Ms Pascale Laborde resigned from the ESG Committee, and Ms Yang Wenyun was appointed as her replacement, effective August 26, 2025 - Ms Pascale Laborde resigned as a member of the Environmental, Social and Governance Committee, and Ms Yang Wenyun was appointed to succeed her, effective August 26, 2025[119](index=119&type=chunk) [Continuing Disclosure Obligations under the Listing Rules](index=35&type=section&id=Continuing%20Disclosure%20Obligations%20under%20the%20Listing%20Rules) The company disclosed refinancing credit agreements containing a clause linked to the shareholding of Mr Luo Fei and his family members - The June and August 2024 refinancing credit agreements stipulate that the facilities will be cancelled if Mr Luo Fei and his family members cease to beneficially own the largest percentage of the company's voting share capital[120](index=120&type=chunk)[122](index=122&type=chunk) - The June 2024 refinancing term loan facility of **US$150,000,000 equivalent** was fully drawn down on July 10, 2024[121](index=121&type=chunk) - The August 2024 refinancing credit facility of **US$540,000,000 equivalent** was drawn down on November 13, 2024[122](index=122&type=chunk) [Interim Dividend](index=36&type=section&id=Interim%20Dividend) The Board declared an interim dividend of HK$0.19 per ordinary share, representing approximately 30% of adjusted comparable net profit - The Board declared an interim dividend of **HK$0.19 per ordinary share** (2024: HK$0.30), representing approximately 30% of adjusted comparable net profit[124](index=124&type=chunk) - The interim dividend will be paid on October 17, 2025, to shareholders on the register of members as of September 15, 2025[124](index=124&type=chunk) [Closure of Register of Members](index=36&type=section&id=Closure%20of%20Register%20of%20Members) The register of members will be closed from September 11 to September 15, 2025, to determine eligibility for the interim dividend - The register of members will be closed from September 11 to September 15, 2025, with the record date being September 15, 2025[125](index=125&type=chunk) Report on Review of Interim Condensed Consolidated Financial Statements [Conclusion](index=37&type=section&id=Conclusion) The independent auditor, Ernst & Young, found no matters suggesting the interim financial information was not prepared in accordance with IAS 34 - Ernst & Young has reviewed the interim financial information and has not become aware of any matter that causes it to believe that the interim financial information is not prepared, in all material respects, in accordance with IAS 34[130](index=130&type=chunk) Interim Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income [Statement of Profit or Loss Overview](index=38&type=section&id=Statement%20of%20Profit%20or%20Loss%20Overview) For the six months ended June 30, 2025, the company's revenue was RMB 7,019,234 thousand, with a profit for the period of RMB 71,017 thousand Interim Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (RMB'000) | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | Revenue | 7,019,234 | 6,692,132 | | Cost of sales | (2,630,154) | (2,619,838) | | Gross profit | 4,389,080 | 4,072,294 | | Other income and gains | 61,751 | 118,231 | | Selling and distribution costs | (2,971,278) | (2,653,763) | | Administrative expenses | (398,526) | (405,868) | | Other expenses | (181,731) | (161,035) | | Finance costs | (579,542) | (433,251) | | Share of losses of an associate | (13,462) | (12,669) | | Profit before tax | 306,292 | 523,939 | | Income tax expense | (235,275) | (218,136) | | **Profit for the period** | **71,017** | **305,803** | | Total comprehensive income for the period | 225,394 | 265,231 | | Basic earnings per share attributable to ordinary equity holders of the parent | 0.11 | 0.48 | | Diluted earnings per share attributable to ordinary equity holders of the parent | 0.11 | 0.48 | Interim Condensed Consolidated Statement of Financial Position [Statement of Financial Position Overview](index=39&type=section&id=Statement%20of%20Financial%20Position%20Overview) As of June 30, 2025, total non-current assets were RMB 14,331,162 thousand, and total current assets were RMB 5,064,338 thousand, with net assets of RMB 6,009,377 thousand Interim Condensed Consolidated Statement of Financial Position (RMB'000) | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Non-current assets** | | | | Property, plant and equipment | 338,327 | 318,506 | | Right-of-use assets | 178,627 | 118,734 | | Goodwill | 7,666,645 | 7,603,641 | | Intangible assets | 5,293,238 | 5,295,021 | | Deferred tax assets | 525,578 | 530,681 | | Other non-current financial assets | 194,298 | 174,164 | | **Total non-current assets** | **14,331,162** | **14,219,781** | | **Current assets** | | | | Inventories | 1,932,804 | 1,906,675 | | Trade and bills receivables | 1,143,936 | 927,179 | | Cash and cash equivalents | 1,812,024 | 1,603,920 | | **Total current assets** | **5,064,338** | **4,622,641** | | **Current liabilities** | | | | Trade and bills payables | 941,105 | 907,383 | | Other payables and accruals | 2,084,435 | 1,937,772 | | Interest-bearing bank and other borrowings | 858,981 | 860,905 | | Senior notes | 84,996 | 2,247 | | **Total current liabilities** | **4,227,508** | **3,872,369** | | **Non-current liabilities** | | | | Senior notes | 2,106,195 | 2,117,248 | | Interest-bearing bank loans and other borrowings | 6,123,880 | 6,304,559 | | Deferred tax liabilities | 724,978 | 684,455 | | **Total non-current liabilities** | **9,158,615** | **9,156,682** | | **Net assets** | **6,009,377** | **5,813,371** | | **Total equity** | **6,009,377** | **5,813,371** | Interim Condensed Consolidated Statement of Changes in Equity [Statement of Changes in Equity Overview](index=41&type=section&id=Statement%20of%20Changes%20in%20Equity%20Overview) As of June 30, 2025, total equity increased to RMB 6,009,377 thousand from RMB 5,813,371 thousand at the end of 2024 Interim Condensed Consolidated Statement of Changes in Equity (RMB'000) | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Issued capital | 5,519 | 5,519 | | Share premium account | 694,991 | 694,991 | | Shares held for share award scheme | (33,229) | (37,680) | | Retained profits | 6,533,049 | 6,460,019 | | Total equity | 6,009,377 | 5,813,371 | | Profit for the period | 71,017 | 305,803 | | Other comprehensive income/(loss) for the period | 154,377 | (40,572) | | Total comprehensive income for the period | 225,394 | 265,231 | Interim Condensed Consolidated Statement of Cash Flows [Statement of Cash Flows Overview](index=43&type=section&id=Statement%20of%20Cash%20Flows%20Overview) For the six months ended June 30, 2025, net cash from operating activities was RMB 998,033 thousand, with cash and cash equivalents at period end of RMB 1,812,024 thousand Interim Condensed Consolidated Statement of Cash Flows (RMB'000) | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | Net cash flows from operating activities | 998,033 | 1,052,540 | | Net cash flows (used in)/from investing activities | (31,385) | 8,389 | | Net cash flows used in financing activities | (706,534) | (86,704) | | Net increase in cash and cash equivalents | 260,114 | 974,225 | | Cash and cash equivalents at beginning of period | 1,603,920 | 1,364,283 | | Net effect of foreign exchange rate changes | (52,010) | 40,586 | | **Cash and cash equivalents at end of period** | **1,812,024** | **2,379,094** | Notes to the Interim Condensed Consolidated Financial Statements [Corporate and Group Information](index=45&type=section&id=Corporate%20and%20Group%20Information) H&H International Holdings Limited is incorporated in the Cayman Islands and primarily engages in the production and sale of nutrition and care products - The Company is incorporated in the Cayman Islands and is principally engaged in the production and sale of premium infant nutrition and care products, adult nutrition and care products, and pet nutrition and care products[140](index=140&type=chunk) - The Company's holding company and ultimate holding company is Coliving Holdings Limited[141](index=141&type=chunk) [Basis of Preparation and Accounting Policies](index=45&type=section&id=Basis%20of%20Preparation%20and%20Accounting%20Policies) The interim financial statements are prepared in accordance with IAS 34 and presented in RMB, using accounting policies consistent with the 2024 annual statements - The interim condensed consolidated financial statements are prepared in accordance with International Accounting Standard 34 and are presented in RMB[142](index=142&type=chunk) - The accounting policies used are the same as those used in the annual consolidated financial statements for the year ended December 31, 2024, except for the adoption of amended IFRSs[142](index=142&type=chunk) [Changes in Accounting Policies and Disclosures](index=46&type=section&id=Changes%20in%20Accounting%20Policies%20and%20Disclosures) The Group adopted the amendment to IAS 21, "Lack of Exchangeability," which had no impact on the interim financial information - The Group adopted the amendment to IAS 21, "Lack of Exchangeability," for the first time during this period[143](index=143&type=chunk) - The amendment had no impact on the interim condensed consolidated financial information as the currencies used by the Group are exchangeable[143](index=143&type=chunk) [Operating Segment Information](index=46&type=section&id=Operating%20Segment%20Information) The Group is managed across five operating segments, with Mainland China being the largest geographical source of revenue - The Group has five reportable operating segments: Adult nutrition and care products, Infant formulae, Probiotics and nutritional supplements, Other infant products, and Pet nutrition and care products[144](index=144&type=chunk) Operating Segment Revenue for the Six Months Ended June 30, 2025 (RMB'000) | Segment | Sales to external customers | | :--- | :--- | | Adult nutrition and care products | 3,438,722 | | Infant formulae | 1,970,973 | | Probiotics and nutritional supplements | 427,224 | | Other infant products | 103,113 | | Pet nutrition and care products | 1,079,202 | | **Total** | **7,019,234** | Revenue from External Customers by Location (RMB'000) | Region | 2025 | 2024 | | :--- | :--- | :--- | | Mainland China | 4,936,033 | 4,541,353 | | Australia and New Zealand | 800,718 | 975,933 | | North America | 862,155 | 815,837 | | Other regions | 420,328 | 359,009 | | **Total revenue** | **7,019,234** | **6,692,132** | [Revenue, Other Income and Gains](index=50&type=section&id=Revenue,%20Other%20Income%20and%20Gains) Revenue from contracts with customers totaled RMB 7,019,234 thousand, while other income and gains amounted to RMB 61,751 thousand Revenue Analysis (RMB'000) | For the six months ended June 30 | 2025 | 2024 | | :--- | :--- | :--- | | Revenue from contracts with customers - Sales of goods | 7,019,234 | 6,692,132 | Other Income and Gains (RMB'000) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Bank interest income | 6,335 | 6,911 | | Foreign exchange gains | 24,361 | – | | Net fair value gains on derivative financial instruments | – | 56,530 | | Fair value gains on other non-current financial assets | 5,524 | 2,566 | | Government grants | 363 | 2,606 | | Gain on sale of raw materials | 13,940 | 37,467 | | Others | 11,228 | 11,753 | | **Total** | **61,751** | **118,231** | [Finance Costs](index=52&type=section&id=Finance%20Costs) Finance costs for the period were RMB 579,542 thousand, a significant increase due to the loss on repurchase and redemption of senior notes Finance Costs (RMB'000) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Interest on interest-bearing bank loans and senior notes | 351,508 | 429,618 | | Interest on lease liabilities | 3,641 | 2,847 | | Loss on repurchase and redemption of senior notes | 224,393 | – | | **Total** | **579,542** | **433,251** | [Profit Before Tax](index=52&type=section&id=Profit%20Before%20Tax) The Group's profit before tax was RMB 306,292 thousand, with major deductions including cost of inventories sold and R&D costs Major Items Charged/(Credited) to Profit Before Tax (RMB'000) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Cost of inventories sold | 2,423,640 | 2,537,072 | | Research and development costs | 95,913 | 104,035 | | Net foreign exchange (gains)/losses | (24,361) | 40,854 | | Net fair value losses/(gains) on derivative financial instruments | 74,053 | (56,530) | | Write-down of inventories to net realisable value | 206,514 | 82,766 | [Income Tax Expense](index=53&type=section&id=Income%20Tax%20Expense) Income tax expense was RMB 235,275 thousand, with certain subsidiaries in Mainland China benefiting from a preferential 15% tax rate Income Tax Expense (RMB'000) | Region | 2025 | 2024 | | :--- | :--- | :--- | | Mainland China | 91,490 | 55,221 | | Hong Kong | 58,873 | 53,904 | | Australia | 51,834 | 61,002 | | Other regions | 382 | 518 | | Deferred | 34,312 | 47,491 | | **Total** | **235,275** | **218,136** | - Biostime (Guangzhou) Health Products Co, Ltd and Guangzhou Heai Information Technology Co, Ltd are entitled to a preferential tax rate of **15%** as High and New Technology Enterprises[157](index=157&type=chunk) - The Group does not expect to face significant Pillar Two income tax risk[165](index=165&type=chunk) [Dividends](index=55&type=section&id=Dividends) The Board declared an interim dividend of HK$0.19 per ordinary share, totaling approximately RMB 108,893 thousand Dividends (RMB'000) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Final dividend declared | 29,732 | 104,949 | | Interim dividend declared | 108,893 | 173,581 | [Earnings Per Share Attributable to Ordinary Equity Holders of the Parent](index=56&type=section&id=Earnings%20Per%20Share%20Attributable%20to%20Ordinary%20Equity%20Holders%20of%20the%20Parent) For the six months ended June 30, 2025, basic and diluted earnings per share were both RMB 0.11, a decrease from the prior year Calculation of Basic and Diluted Earnings Per Share (RMB) | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | Profit attributable to ordinary equity holders of the parent | 71,017 | 305,803 | | Basic earnings per share | 0.11 | 0.48 | | Diluted earnings per share | 0.11 | 0.48 | [Property, Plant and Equipment](index=57&type=section&id=Property,%20Plant%20and%20Equipment) During the period, the Group acquired property, plant and equipment at a cost of RMB 48,925 thousand and charged depreciation of RMB 33,082 thousand - During the period, the Group acquired property, plant and equipment at a cost of **RMB 48,925 thousand** (2024: RMB 22,029 thousand)[169](index=169&type=chunk) - Depreciation of **RMB 33,082 thousand** was charged (2024: RMB 34,117 thousand)[169](index=169&type=chunk) [Leases](index=57&type=section&id=Leases) The Group recognised right-of-use assets totaling RMB 76,593 thousand and new lease liabilities of the same amount during the period - During the period, the Group recognised right-of-use assets with a total cost of **RMB 76,593 thousand** (2024: RMB 12,642 thousand)[170](index=170&type=chunk) - The Group recognised new lease liabilities of **RMB 76,593 thousand** (2024: RMB 12,642 thousand)[171](index=171&type=chunk) [Goodwill](index=58&type=section&id=Goodwill) As of June 30, 2025, the net carrying amount of goodwill was RMB 7,666,645 thousand, a slight increase due to exchange realignment Net Carrying Amount of Goodwill (RMB'000) | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Net carrying amount | 7,666,645 | 7,603,641 | | Exchange realignment | 63,004 | (108,538) | [Intangible Assets](index=59&type=section&id=Intangible%20Assets) During the period, the Group acquired intangible assets at a cost of RMB 16,951 thousand and charged amortisation of RMB 100,517 thousand - During the period, the Group acquired intangible assets at a cost of **RMB 16,951 thousand** (2024: RMB 9,403 thousand)[173](index=173&type=chunk) - Amortisation of **RMB 100,517 thousand** was charged (2024: RMB 94,209 thousand)[173](index=173&type=chunk) [Other Non-current Financial Assets](index=59&type=section&id=Other%20Non-current%20Financial%20Assets) As of June 30, 2025, other non-current financial assets totaled RMB 194,298 thousand, mainly comprising unlisted equity investments Other Non-current Financial Assets (RMB'000) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Financial assets at fair value through profit or loss | 190,127 | 170,774 | | Equity investments designated at fair value through other comprehensive income | 4,171 | 3,390 | | **Total** | **194,298** | **174,164** | [Inventories](index=60&type=section&id=Inventories) As of June 30, 2025, total inventories amounted to RMB 1,932,804 thousand, with finished goods accounting for RMB 1,116,037 thousand Composition of Inventories (RMB'000) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Raw materials | 304,160 | 441,988 | | Goods in transit | 508,722 | 318,500 | | Work in progress | 3,885 | 188 | | Finished goods | 1,116,037 | 1,145,999 | | **Total** | **1,932,804** | **1,906,675** | [Trade and Bills Receivables](index=60&type=section&id=Trade%20and%20Bills%20Receivables) As of June 30, 2025, trade and bills receivables totaled RMB 1,143,936 thousand, with the majority due within one month Ageing Analysis of Trade and Bills Receivables (RMB'000) | Ageing | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Within 1 month | 647,806 | 623,546 | | 1 to 3 months | 437,505 | 245,038 | | Over 3 months | 58,625 | 58,595 | | **Total** | **1,143,936** | **927,179** | [Prepayments, Other Receivables and Other Assets](index=60&type=section&id=Prepayments,%20Other%20Receivables%20and%20Other%20Assets) As of June 30, 2025, prepayments, other receivables and other assets totaled RMB 158,205 thousand, with prepayments being the largest component Composition of Prepayments, Other Receivables and Other Assets (RMB'000) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Prepayments | 113,782 | 59,164 | | Other receivables | 36,814 | 92,899 | | **Total** | **158,205** | **177,215** | [Trade and Bills Payables](index=61&type=section&id=Trade%20and%20Bills%20Payables) As of June 30, 2025, trade and bills payables totaled RMB 941,105 thousand, with the majority due within one month Ageing Analysis of Trade and Bills Payables (RMB'000) | Ageing | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Within 1 month | 737,775 | 775,760 | | 1 to 3 months | 148,803 | 85,340 | | Over 3 months | 54,527 | 46,283 | | **Total** | **941,105** | **907,383** | [Other Payables and Accruals](index=61&type=section&id=Other%20Payables%20and%20Accruals) As of June 30, 2025, other payables and accruals totaled RMB 2,089,255 thousand, primarily consisting of accruals and refund liabilities Composition of Other Payables and Accruals (RMB'000) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Payroll and welfare payables | 167,294 | 175,346 | | Accruals | 1,071,037 | 943,369 | | Other tax payables | 86,814 | 42,105 | | Other payables | 192,841 | 223,360 | | Refund liabilities | 571,269 | 555,395 | | **Total** | **2,089,255** | **1,939,575** | [Derivative Financial Instruments](index=62&type=section&id=Derivative%20Financial%20Instruments) As of June 30, 2025, derivative financial instrument assets were RMB 14,060 thousand and liabilities were RMB 95,092 thousand Derivative Financial Instruments (RMB'000) | Item | June 30, 2025 Assets | June 30, 2025 Liabilities | Dec 31, 2024 Assets | Dec 31, 2024 Liabilities | | :--- | :--- | :--- | :--- | :--- | | Early redemption options embedded in senior notes | 14,060 | – | 5,517 | – | | Cross-currency swaps and cross-currency interest rate swaps (designated as hedges) | – | 13,864 | 11,332 | 266 | | Cross-currency swaps and cross-currency interest rate swaps (not designated as hedges) | – | 81,228 | 3,718 | – | | **Total** | **14,060** | **95,092** | **20,567** | **266** | - During the period, a net loss of **RMB 13,245 thousand** arising from fair value changes was recognised for swaps designated as hedging instruments[182](index=182&type=chunk) [Interest-bearing Bank Loans and Other Borrowings](index=63&type=section&id=Interest-bearing%20Bank%20Loans%20and%20Other%20Borrowings) As of June 30, 2025, total interest-bearing bank loans and other borrowings amounted to RMB 6,982,861 thousand, denominated in USD, HKD, and RMB Interest-bearing Bank Loans and Other Borrowings (RMB'000) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Current** | | | | Current portion of long-term bank loans - unsecured | 483,005 | 532,315 | | Current portion of long-term bank loans - secured | 367,461 | 320,026 | | Current portion of secured bonds | 8,515 | 8,564 | | **Total - Current** | **858,981** | **860,905** | | **Non-current** | | | | Long-term bank loans - unsecured | 1,344,264 | 1,356,821 | | Long-term bank loans - secured | 4,380,173 | 4,550,890 | | Secured bonds | 399,443 | 396,848 | | **Total - Non-current** | **6,123,880** | **6,304,559** | | **Total** | **6,982,861** | **7,165,464** | - Certain interest-bearing bank loans are jointly and severally guaranteed by the Company and certain of its subsidiaries and are secured by assets[185](index=185&type=chunk) - The borrowings are denominated in USD, HKD, and RMB, with total amounts of **RMB 2,518,115 thousand**, **RMB 1,157,712 thousand**, and **RMB 3,307,034 thousand**, respectively[185](index=185&type=chunk) [Senior Notes](index=65&type=section&id=Senior%20Notes) The company issued US$300,000,000 of 9.125% senior notes due 2028 to refinance its 2026 notes, which have now been fully repaid - On January 24, 2025, the company issued **US$300,000,000** of senior notes due July 24, 2028, with a coupon rate of **9.125% per annum**[186](index=186&type=chunk) - The net proceeds from the 2028 notes were used to fund the repayment of the 2026 notes, which were fully repaid as of June 30, 2025[186](index=186&type=chunk) Movement of Senior Notes (RMB'000) | Item | Total | | :--- | :--- | | As at January 1, 2024 | 1,660,600 | | Redemption and repurchase of senior notes | (2,334,058) | | Loss on repurchase and redemption of senior notes | 224,393 | | Proceeds from issuance of senior notes | 2,111,651 | | **As at June 30, 2025** | **2,191,191** | | Less: Current portion | (84,996) | | Non-current portion | 2,106,195 | [Deferred Tax](index=67&type=section&id=Deferred%20Tax) As of June 30, 2025, total deferred tax assets were RMB 816,471 thousand, and total deferred tax liabilities were RMB 1,015,871 thousand Movement of Deferred Tax Assets (RMB'000) | Item | Jan 1, 2025 | Credited/(charged) to profit or loss | Exchange realignment | June 30, 2025 | | :--- | :--- | :--- | :--- | :--- | | Provision for impairment of assets | 40,521 | 1,015 | – | 41,536 | | Accrued liabilities and future deductible expenses | 359,447 | 33,221 | 1,300 | 393,968 | | Recognised tax losses | 270,812 | (5,876) | 51 | 264,987 | | **Total** | **794,043** | **19,948** | **2,480** | **816,471** | Movement of Deferred Tax Liabilities (RMB'000) | Item | Jan 1, 2025 | (Credited)/charged to profit or loss | Exchange realignment | June 30, 2025 | | :--- | :--- | :--- | :--- | :--- | | Fair value adjustments arising from acquisition of subsidiaries | 726,390 | 127,890 | 13,519 | 867,799 | | **Total** | **947,817** | **54,260** | **13,794** | **1,015,871** | [Share Capital](index=69&type=section&id=Share%20Capital) As of June 30, 2025, the company's issued and fully paid-up share capital consisted of 645,561,354 ordinary shares of HK$0.01 each Share Capital Information | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Authorised share capital (shares) | 10,000,000,000 | 10,000,000,000 | | Issued and fully paid-up share capital (shares) | 645,561,354 | 645,561,354 | | Equivalent to (RMB'000) | 5,519 | 5,519 | [Reserves](index=69&type=section&id=Reserves) The Group's contributed surplus arose from the Group reorganisation, while the capital surplus relates to a capital contribution from the ultimate shareholder - The contributed surplus represents the excess of the par value of shares of subsidiaries acquired over the par value of the Company's shares issued in exchange[194](index=194&type=chunk) - The capital surplus represents a 1% equity interest in Biostime Health contributed by the ultimate shareholder, Coliving Holdings Limited[194](index=194&type=chunk) - Subsidiaries registered in China are required to transfer 10% of their annual statutory post-tax profit to a statutory reserve until the balance reaches 50% of the registered capital[194](index=194&type=chunk) [Contingent Liabilities](index=70&type=section&id=Contingent%20Liabilities) The company's subsidiary, BHA, is in a dispute with the Australian Taxation Office and has paid a cash deposit of A$104 million - BHA has objected to the Australian Taxation Office's demand for **A$234.5 million** in primary tax, **A$55.2 million** in interest, and **A$117.3 million** in penalties[195](index=195&type=chunk) - BHA paid a cash deposit of **A$104 million** on July 15, 2025, which will be recognised as an asset on the balance sheet[196](index=196&type=chunk) - The company believes the probability of a future outflow of funds is low and is prepared to pursue further legal action[196](index=196&type=chunk)[197](index=197&type=chunk) [Commitments](index=70&type=section&id=Commitments) As of the reporting date, the Group's total contractual commitments amounted to RMB 10,467 thousand Contractual Commitments (RMB'000) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Intangible assets | 5,437 | 3,415 | | Property, plant and equipment | 5,030 | 5,675 | | **Total** | **10,467** | **9,090** | [Related Party Balances and Transactions](index=71&type=section&id=Related%20Party%20Balances%20and%20Transactions) Total compensation for the Group's key management personnel amounted to RMB 28,478 thousand, a decrease from the prior year period Key Management Personnel Compensation (RMB'000) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Fees | 3,588 | 3,750 | | Short-term employee benefits | 24,138 | 42,127 | | Pension scheme contributions | 409 | 454 | | Equity-settled share award expenses | 343 | 3,904 | | **Total compensation paid to key management personnel** | **28,478** | **50,235** | [Fair Value and Fair Value Hierarchy of Financial Instruments](index=71&type=section&id=Fair%20Value%20and%20Fair%20Value%20Hierarchy%20of%20Financial%20Instruments) As of June 30, 2025, the total fair value of financial assets was RMB 208,358 thousand, and financial liabilities was RMB 2,280,662 thousand Carrying Amounts and Fair Values of Financial Instruments (RMB'000) | Item | June 30, 2025 Carrying amount | Dec 31, 2024 Carrying amount | June 30, 2025 Fair value | Dec 31, 2024 Fair value | | :--- | :--- | :--- | :--- | :--- | | **Financial assets** | | | | | | Derivative financial instruments | 14,060 | 20,567 | 14,060 | 20,567 | | Other non-current financial assets | 194,298 | 174,164 | 194,298 | 174,164 | | **Total** | **208,358** | **194,731** | **208,358** | **194,731** | | **Financial liabilities** | | | | | | Derivative financial instruments | (95,092) | (266) | (95,092) | (266) | | Senior notes | (2,191,191) | (2,119,495) | (2,185,570) | (2,273,947) | | **Total** | **(2,286,283)** | **(2,119,761)** | **(2,280,662)** | **(2,274,213)** | - Fair value is estimated using techniques such as discounted cash flow models, market approach, and recent transaction prices[202](index=202&type=chunk) Hierarchy of Assets Measured at Fair Value (RMB'000) | Item | Level 1 | Level 2 | Level 3 | Total | | :--- | :--- | :--- | :--- | :--- | | **As at June 30, 2025** | | | | | | Derivative financial instruments | – | – | 14,060 | 14,060 | | Other non-current financial assets | 2,774 | – | 191,524 | 194,298 | | **Total** | **2,774** | **–** | **205,584** | **208,358** | Hierarchy of Liabilities Measured at Fair Value (RMB'000) | Item | Level 1 | Level 2 | Level 3 | Total | | :--- | :--- | :--- | :--- | :--- | | **As at June 30, 2025** | | | | | | Derivative financial instruments | – | – | 95,092 | 95,092 | [Approval of these Interim Condensed Consolidated Financial Statements](index=77&type=section&id=Approval%20of%20these%20Interim%20Condensed%20Consolidated%20Financial%20Statements) These interim condensed consolidated financial statements were approved and authorised for issue by the Board of Directors on August 26, 2025 - These interim condensed consolidated financial statements were approved and authorised for issue by the Board of Directors on August 26, 2025[208](index=208&type=chunk)

2025 中期報告 公司資料 | 執行董事 | 費 錚 翔 先 生（ 主 席 ） | | --- | --- | | | 鄭育紅先生 | | | 夏國平先生 | | | 陳俊華先生 | | | 王傳寶先生 | | | 曹雪女士 | | 非執行董事 | 趙曉雲女士 | | | 田克漢先生 | | 獨立非執行董事 | 肖斐博士 | | | 陳一先生 | | | 吳瑩博士 | | | 金益亭先生 | | 監 事 | 徐敬明先生 | | | 李艷女士 | | | 唐寶華先生 | | 聯席公司秘書 | 曹雪女士 | | | 陳沛恒先生 | | 授權代表 | 費錚翔先生 | | | 陳沛恒先生 | | 審計委員會 | 陳 一 先 生（ 主 席 ） | | | 吳瑩博士 | | | 肖斐博士 | | 薪酬委員會 | 吳 瑩 博 士（ 主 席 ） | | | 肖斐博士 | | | 陳俊華先生 | | 提名委員會 | 肖 斐 博 士（ 主 席 ） | | | 陳一先生 | | | 夏國平先生 | 2 2025中期報告 公司資料 | 戰略委員會 | 費 錚 翔 先 生（ 主 席 ） 肖斐博士 | | --- | --- | | ...

[Financial Highlights](index=1&type=section&id=%E8%B2%A1%E5%8B%99%E6%91%98%E8%A6%81) The Group's H1 2025 revenue decreased by 8.3% to RMB 1,022.2 million, with gross profit down 10.9% to RMB 187.3 million and gross margin slightly declining by 0.5 percentage points to 18.3%, resulting in a net loss of RMB 70.4 million attributable to equity holders and a basic loss per share of RMB 0.152, with no interim dividend recommended H1 2025 Financial Highlights | Metric | H1 2025 (million RMB) | H1 2024 (million RMB) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 1,022.2 | 1,115.3 | -8.3% | | Gross Profit | 187.3 | 210.2 | -10.9% | | Gross Profit Margin | 18.3% | 18.8% | -0.5 percentage points | | Net (Loss)/Profit attributable to equity holders of the Company | (70.4) | 26.6 | Switched from profit to loss | | Basic (Loss)/Earnings per share | (0.152) | 0.065 | Switched from profit to loss | | Interim Dividend | Not recommended | Not recommended | - | [Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=2&type=section&id=%E7%B6%9C%E5%90%88%E6%90%8D%E7%9B%8A%E5%8F%8A%E5%85%A8%E9%9D%A2%E6%94%B6%E7%9B%8A%E8%A1%A8) The Group recorded a net loss of RMB 71.091 million in H1 2025, compared to a net profit of RMB 33.372 million in H1 2024, driven by an 8.3% YoY revenue decrease, 10.9% gross profit decline, significant reduction in operating profit, and increased income tax expense Consolidated Statement of Profit or Loss and Other Comprehensive Income Key Data | Metric (thousand RMB) | H1 2025 (Unaudited) | H1 2024 (Unaudited) | | :--- | :--- | :--- | | Revenue | 1,022,209 | 1,115,320 | | Cost of sales | (834,878) | (905,107) | | Gross Profit | 187,331 | 210,213 | | Operating Profit | 31,161 | 67,491 | | Profit before tax | 6 | 43,600 | | Income tax expense | (71,097) | (10,228) | | (Loss)/Profit for the period | (71,091) | 33,372 | | (Loss)/Profit attributable to equity holders of the Company | (70,420) | 26,589 | | Basic and diluted (loss)/earnings per share (RMB) | (0.152) | 0.065 | [Consolidated Statement of Financial Position](index=4&type=section&id=%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81%E8%A1%A8) As of June 30, 2025, the Group's total assets increased to RMB 5,236.4 million, with a significant rise in current assets, while total liabilities also grew due to increases in trade and other payables and bank loans, leading to a slight decrease in total equity attributable to equity holders of the Company Consolidated Statement of Financial Position Key Data | Metric (thousand RMB) | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :--- | :--- | :--- | | Non-current assets | 1,555,506 | 1,737,896 | | Current assets | 3,680,913 | 2,928,291 | | Current liabilities | 1,889,431 | 1,229,692 | | Non-current liabilities | 1,069,196 | 1,089,403 | | Net assets | 2,277,792 | 2,347,092 | | Total equity attributable to equity holders of the Company | 1,493,248 | 1,561,877 | | Total equity | 2,277,792 | 2,347,092 | [Consolidated Statement of Changes in Equity](index=6&type=section&id=%E7%B6%9C%E5%90%88%E6%AC%8A%E7%9B%8A%E8%AE%8A%E5%8B%95%E8%A1%A8) For the six months ended June 30, 2025, total equity attributable to equity holders of the Company decreased from RMB 1,561.877 million at the beginning of the period to RMB 1,493.248 million, primarily due to a loss of RMB 70.420 million for the period Changes in Equity Attributable to Equity Holders of the Company | Metric (thousand RMB) | Balance at January 1, 2025 | Loss for the period | Other comprehensive income for the period | Balance at June 30, 2025 | | :--- | :--- | :--- | :--- | :--- | | Total equity attributable to equity holders of the Company | 1,561,877 | (70,420) | 1,791 | 1,493,248 | [Notes to the Consolidated Financial Statements](index=8&type=section&id=%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8%E9%99%84%E8%A8%BB) This section details the company's corporate information, accounting policies, revenue and segment reporting, income and expense breakdowns, taxation, share capital, earnings per share, asset and liability changes, related party transactions, and capital commitments [1. Corporate Information](index=8&type=section&id=1.%20%E4%BC%81%E6%A5%AD%E8%B3%87%E6%96%99) The Company is incorporated in Singapore, listed on the Hong Kong Stock Exchange, with primary operations in China, focusing on integrated circuits and digital technology, new energy and services, and wireless communication - The Company is incorporated in Singapore, with its shares listed on the Hong Kong Stock Exchange[18](index=18&type=chunk)[29](index=29&type=chunk) - Its principal activities include integrated circuits and digital technology (chip R&D, design, sales, IP licensing, digital security), new energy and services (power supply, solar power production and sales, concentrated solar power technology services), and wireless communication (signal transmission products and solutions)[18](index=18&type=chunk)[25](index=25&type=chunk)[29](index=29&type=chunk) - The Group's operations are primarily conducted in the People's Republic of China[18](index=18&type=chunk)[29](index=29&type=chunk) [2. Summary of Significant Accounting Policies](index=8&type=section&id=2.%20%E4%B8%BB%E8%A6%81%E6%9C%83%E8%A8%88%E6%94%BF%E7%AD%96%E6%A6%82%E8%A6%81) The financial statements are prepared in accordance with International Financial Reporting Standards, with new IFRS standards issued but not yet effective, including IFRS 18 "Presentation and Disclosure in Financial Statements," which is not expected to significantly impact financial position - The financial statements have been prepared in accordance with all applicable International Financial Reporting Standards (IFRS)[19](index=19&type=chunk)[30](index=30&type=chunk) - IFRS 18 "Presentation and Disclosure in Financial Statements" will be effective from January 1, 2027, and is not expected to have a significant impact on the Group's financial position, though its impact on presentation and disclosure is still being assessed[23](index=23&type=chunk)[24](index=24&type=chunk)[27](index=27&type=chunk) [3. Revenue and Segment Reporting](index=8&type=section&id=3.%20%E6%94%B6%E7%9B%8A%E5%8F%8A%E5%88%86%E9%83%A8%E5%91%88%E5%A0%B1) The Group's revenue primarily stems from three business segments: wireless communication, integrated circuits and digital technology, and new energy and services, with H1 2025 total revenue decreasing by 8.3% YoY, mainly due to a significant decline in wireless communication revenue, while China remains the dominant market for revenue and non-current assets Revenue by Major Product or Service Line | Business Segment (thousand RMB) | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Integrated Circuits and Digital Technology | 94,677 | 78,037 | | New Energy and Services | 73,697 | 68,032 | | Wireless Communication | 853,835 | 969,251 | | **Total** | **1,022,209** | **1,115,320** | Revenue from Contracts with Customers by Timing of Revenue Recognition (H1 2025) | Timing of Revenue Recognition (thousand RMB) | Integrated Circuits and Digital Technology | New Energy and Services | Wireless Communication | Total Reportable Segments | | :--- | :--- | :--- | :--- | :--- | | At a point in time | 70,895 | 69,675 | 853,835 | 994,405 | | Over time | 23,782 | 4,022 | - | 27,804 | | **Revenue from external customers** | **94,677** | **73,697** | **853,835** | **1,022,209** | Revenue and Specific Non-current Assets by Geographical Region | Geographical Region (thousand RMB) | H1 2025 Revenue | H1 2024 Revenue | Specific Non-current Assets as of June 30, 2025 | Specific Non-current Assets as of December 31, 2024 | | :--- | :--- | :--- | :--- | :--- | | China | 949,325 | 1,034,005 | 1,491,308 | 1,473,739 | | Other Countries | 72,884 | 81,315 | 121 | 50,533 | | **Total** | **1,022,209** | **1,115,320** | **1,491,429** | **1,524,272** | [4. Other Operating Income](index=14&type=section&id=4.%20%E5%85%B6%E4%BB%96%E7%B6%93%E7%87%9F%E6%94%B6%E5%85%A5) Other operating income for H1 2025 decreased by 47.5% YoY to RMB 15.623 million, primarily due to reduced government grants and net gains from commodity futures contracts Other Operating Income Details | Item (thousand RMB) | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Government grants | 12,585 | 21,641 | | Compensation claims received | 530 | 118 | | Service fee income | 1,500 | 38 | | Net gain from commodity futures contracts | 255 | 7,241 | | Others | 753 | 692 | | **Total** | **15,623** | **29,730** | [5. Interest Expense](index=15&type=section&id=5.%20%E5%88%A9%E6%81%AF%E9%96%8B%E6%94%AF) Interest expense for H1 2025 increased by 30.5% YoY to RMB 31.155 million, mainly driven by higher interest expense on short-term bank loans Interest Expense Details | Item (thousand RMB) | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Interest expense on short-term bank loans | 31,139 | 23,799 | | Interest on lease liabilities | 16 | 92 | | **Total** | **31,155** | **23,891** | [6. Profit Before Tax](index=15&type=section&id=6.%20%E9%99%A4%E7%A8%85%E5%89%8D%E6%BA%A2%E5%88%A9) Profit before tax significantly decreased to RMB 6 thousand in H1 2025 from RMB 43.6 million in the prior year, primarily impacted by reduced revenue, lower gross profit margin, decreased government grants, impairment losses on trade receivables, and increased interest expense Items Affecting Profit Before Tax | Item (thousand RMB) | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Cost of inventories recognized as expense | 698,803 | 795,473 | | Depreciation of property, plant and equipment and amortization expense | 32,491 | 34,589 | | Total staff costs | 102,843 | 105,274 | | Research and development expenses | 72,990 | 72,184 | | Impairment loss on trade and other receivables | 8,383 | - | | Net exchange loss | 1,377 | 394 | | Reversal of obsolete inventories | (162) | (2,603) | [7. Income Tax](index=16&type=section&id=7.%20%E6%89%80%E5%BE%97%E7%A8%85) Income tax expense for H1 2025 surged by 597.1% to RMB 71.097 million, mainly due to increased enterprise income tax paid on inter-company dividend distributions within the China Group, with some Chinese subsidiaries benefiting from a 15% high-tech enterprise preferential tax rate Income Tax Expense Details | Item (thousand RMB) | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Current tax expense - China enterprise income tax | 71,097 | 4,560 | | Deferred tax expense - Origination and reversal of temporary differences | - | 5,668 | | **Total** | **71,097** | **10,228** | - Jiangsu Hengxin Technology Co, Ltd, Jiangsu Hengxin Wireless Technology Co, Ltd, Nanjing Zongyu Information Technology Co, Ltd, Shanghai Zongyu Information Technology Co, Ltd, and Qinghai Zhongkong Solar Power Generation Co, Ltd enjoyed a 15% preferential income tax rate in 2025[56](index=56&type=chunk)[68](index=68&type=chunk) - Qinghai Zhongkong also benefits from a tax holiday of three years exemption followed by three years of 50% tax reduction[57](index=57&type=chunk)[69](index=69&type=chunk) [8. Dividends](index=16&type=section&id=8.%20%E8%82%A1%E6%81%AF) The Company does not recommend the payment of any interim dividend for H1 2025 - The Company has not recommended or declared an interim dividend for H1 2025[58](index=58&type=chunk)[62](index=62&type=chunk) [9. Share Capital](index=16&type=section&id=9.%20%E8%82%A1%E6%9C%AC) As of June 30, 2025, the Company's issued ordinary share capital was 465,600 thousand shares, valued at RMB 362,849 thousand, consistent with June 30, 2024, reflecting a placement completed on May 13, 2024 Share Capital Movement Details | Share Capital – Ordinary Shares | Number of Shares (thousand shares) | thousand RMB | | :--- | :--- | :--- | | Balance at December 31, 2023 | 388,000 | 295,000 | | Placement of ordinary shares completed on May 13, 2024 | 77,600 | 67,849 | | Balance at June 30, 2025 and June 30, 2024 | 465,600 | 362,849 | [10. (Loss)/Earnings Per Share](index=16&type=section&id=10.%20%E6%AF%8F%E8%82%A1%EF%BC%88%E虧%E6%90%8D%EF%BC%89%E2%88%95%E7%9B%88%E5%88%A9) Basic and diluted loss per share for H1 2025 was RMB 0.152, compared to earnings per share of RMB 0.065 in H1 2024, with no potentially dilutive ordinary shares during the period (Loss)/Earnings Per Share | Metric | June 30, 2025 (Unaudited) | June 30, 2024 (Unaudited) | | :--- | :--- | :--- | | (Loss)/Earnings per share (RMB) – Basic | (0.152) | 0.065 | | (Loss)/Earnings per share (RMB) – Diluted | (0.152) | 0.065 | | Weighted average number of ordinary shares for basic earnings per share (thousand shares) | 463,274 | 408,466 | - There were no potentially dilutive ordinary shares for the six months ended June 30, 2025 and 2024, hence basic and diluted (loss)/earnings per share are the same[60](index=60&type=chunk)[65](index=65&type=chunk) [11. Property, Plant and Equipment](index=18&type=section&id=11.%20%E7%89%A9%E6%A5%AD%E3%80%81%E5%BB%A0%E6%88%BF%E5%8F%8A%E8%A8%AD%E5%82%99) The Group's capital expenditure for H1 2025 was approximately RMB 13.7 million, a decrease from RMB 17.0 million in the prior year - Capital expenditure for H1 2025 was approximately **RMB 13.7 million**, a YoY decrease of approximately **RMB 3.3 million** (-19.4%)[72](index=72&type=chunk)[76](index=76&type=chunk) [12. Trade and Other Receivables](index=18&type=section&id=12.%20%E8%B2%BF%E6%98%93%E6%87%89%E6%94%B6%E5%8F%8A%E5%85%B6%E4%BB%96%E6%87%89%E6%94%B6%E6%AC%BE%E9%A0%85) As of June 30, 2025, total trade and other receivables increased to RMB 1,521.502 million, with a slight decrease in net trade receivables and bills receivable, but a significant increase in net other receivables Trade and Other Receivables | Item (thousand RMB) | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :--- | :--- | :--- | | Net trade receivables and bills receivable | 1,257,461 | 1,295,768 | | Net other receivables | 264,041 | 101,818 | | **Total trade and other receivables** | **1,521,502** | **1,397,586** | Ageing of Trade Receivables and Bills Receivable | Ageing (thousand RMB) | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :--- | :--- | :--- | | Within 6 months | 1,016,077 | 958,010 | | 7 to 12 months | 87,433 | 124,060 | | 1 to 2 years | 88,667 | 139,072 | | Over 2 years | 65,284 | 74,626 | | **Total** | **1,257,461** | **1,295,768** | [13. Trade and Other Payables](index=18&type=section&id=13.%20%E8%B2%BF%E6%98%93%E6%87%89%E4%BB%98%E5%8F%8A%E5%85%B6%E4%BB%96%E6%87%89%E4%BB%98%E6%AC%BE%E9%A0%85) As of June 30, 2025, total trade and other payables increased to RMB 1,077.212 million, primarily due to a significant rise in trade payables, while other payables decreased Trade and Other Payables | Item (thousand RMB) | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :--- | :--- | :--- | | Trade payables | 1,036,011 | 633,966 | | Other payables | 41,201 | 106,099 | | **Total** | **1,077,212** | **740,065** | Ageing of Trade Payables | Ageing (thousand RMB) | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :--- | :--- | :--- | | 0 to 90 days | 740,909 | 531,889 | | 91 to 180 days | 196,353 | 63,244 | | 181 to 360 days | 67,362 | 15,675 | | Over 360 days | 31,387 | 23,158 | | **Total** | **1,036,011** | **633,966** | [14. Related Party Transactions](index=20&type=section&id=14.%20%E9%97%9C%E9%80%A3%E4%BA%A4%E6%98%93) The Group engaged in various continuing related party transactions during the reporting period, including product sales and raw material purchases with Hengtong Group and its associates, server leasing with Shanghai Zongyu (no longer a related party transaction post-acquisition), technical service contracts with Zhejiang Kesheng, and loan extensions with Nanjing Zongyu (no longer a related party transaction post-acquisition), alongside a disclosure regarding non-compliance with listing rules for logistics service procurement from Jiangsu Hengtong International Logistics - Continuing related party transactions with Hengtong Group Co, Ltd and Jiangsu Hengtong Optic-Electric Co, Ltd: H1 2025 sales of finished goods were **RMB 56.129 million** (H1 2024: RMB 34.399 million), and purchases of raw materials were **RMB 153.850 million** (H1 2024: RMB 251.665 million)[78](index=78&type=chunk)[86](index=86&type=chunk) - Server leasing transactions with Shanghai Zongyu Information Technology Co, Ltd: No disclosable continuing related party transactions in H1 2025, as the Group completed the acquisition of Shanghai Zongyu on July 17, 2024, making it a wholly-owned subsidiary[82](index=82&type=chunk)[84](index=84&type=chunk)[85](index=85&type=chunk)[88](index=88&type=chunk)[95](index=95&type=chunk) - Operation and maintenance technical service contract with Zhejiang Kesheng Technology Co, Ltd: Approximately **RMB 2.646 million** in O&M service revenue recognized in H1 2025; total contract value is RMB 90.2 million, covering 6 months before and 5 years after the Jinta CSP project's grid connection[92](index=92&type=chunk)[93](index=93&type=chunk)[96](index=96&type=chunk) - Loan extension with Nanjing Zongyu Information Technology Co, Ltd: No disclosable related party transactions in H1 2025, as the Group completed the acquisition of Nanjing Zongyu on July 17, 2024, making it a wholly-owned subsidiary[103](index=103&type=chunk)[104](index=104&type=chunk)[105](index=105&type=chunk)[109](index=109&type=chunk)[110](index=110&type=chunk)[111](index=111&type=chunk)[120](index=120&type=chunk) - Procurement of logistics services from Jiangsu Hengtong International Logistics Co, Ltd: Total transaction amount in H1 2024 was approximately **RMB 14.1 million**, which inadvertently failed to comply with the reporting, announcement, and annual review requirements of the Listing Rules; the Company has ceased procurement and entered into a new framework agreement to regulate future transactions[113](index=113&type=chunk)[114](index=114&type=chunk)[115](index=115&type=chunk)[117](index=117&type=chunk)[121](index=121&type=chunk)[122](index=122&type=chunk)[123](index=123&type=chunk) [15. Donations and Capital Commitments](index=28&type=section&id=15.%20%E6%8D%90%E6%AC%BE%E5%8F%8A%E8%B3%87%E6%9C%AC%E6%89%BF%E6%93%94) As of June 30, 2025, the Group's donation commitments decreased to RMB 500 thousand from RMB 1,000 thousand as of December 31, 2024, while capital commitments for the acquisition of property, plant and equipment were reduced to zero Donations and Capital Commitments | Item (thousand RMB) | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :--- | :--- | :--- | | Acquisition of property, plant and equipment | - | 914 | | Donation commitments | 500 | 1,000 | | **Total** | **500** | **1,914** | - The Group's Chinese subsidiaries have pledged to donate **RMB 500,000** annually to a Chinese charitable organization for 20 years, starting from 2007 in profitable years[126](index=126&type=chunk)[127](index=127&type=chunk) [Management Discussion and Analysis](index=30&type=section&id=%E7%AE%A1%E7%90%86%E5%B1%A4%E8%A8%8E%E8%AB%96%E5%8F%8A%E5%88%86%E6%9E%90) This section provides an in-depth analysis of the Group's H1 2025 financial performance, explaining key changes in revenue, gross profit, various expenses, interest expense, profit before tax, and net loss, along with balance sheet movements in intangible assets, receivables, payables, and bank loans [Consolidated Statement of Profit or Loss](index=30&type=section&id=%E7%B6%9C%E5%90%88%E6%90%8D%E7%9B%8A%E8%A1%A8) In H1 2025, the Group's revenue decreased by 8.3% YoY, primarily due to a decline in wireless communication business, while overall gross profit margin slightly decreased, despite increased gross profit contributions from integrated circuits and digital technology and new energy and services, with reduced other operating income, selling and distribution expenses, and administrative expenses, but increased other operating expenses and interest expenses, leading to a switch from profit to loss for the period [Revenue](index=30&type=section&id=%E6%94%B6%E5%85%A5) Total revenue for H1 2025 decreased by 8.3% YoY to RMB 1,022.2 million, mainly driven by an 11.9% decline in wireless communication business revenue, while integrated circuits and digital technology revenue grew by 21.4% and new energy and services revenue increased by 8.4% - Revenue for H1 2025 decreased by approximately **RMB 93.1 million** or **8.3%** YoY to **RMB 1,022.2 million**[132](index=132&type=chunk)[140](index=140&type=chunk) - Revenue from the wireless communication business segment decreased by approximately **RMB 115.4 million** or **11.9%** to **RMB 853.8 million**[132](index=132&type=chunk)[136](index=136&type=chunk)[139](index=139&type=chunk)[141](index=141&type=chunk) - Revenue from the new energy and services business segment increased by approximately **RMB 5.7 million** or **8.4%** to **RMB 73.7 million**[133](index=133&type=chunk)[135](index=135&type=chunk)[138](index=138&type=chunk)[141](index=141&type=chunk) - Revenue from the integrated circuits and digital technology business segment increased by approximately **RMB 16.7 million** or **21.4%** to **RMB 94.7 million**[133](index=133&type=chunk)[134](index=134&type=chunk)[141](index=141&type=chunk)[142](index=142&type=chunk) [Gross Profit Margin](index=30&type=section&id=%E6%AF%9B%E5%88%A9%E7%8E%87) The Group's overall gross profit margin slightly decreased by 0.5 percentage points to 18.3% YoY, with wireless communication gross margin slightly increasing by 0.2 percentage points, integrated circuits and digital technology gross margin slightly decreasing by 1.3 percentage points, and new energy and services gross margin significantly dropping by 27.0 percentage points, mainly due to weather conditions and O&M business costs - The Group's overall gross profit margin slightly decreased by **0.5 percentage points** from 18.8% in H1 2024 to **18.3%** in H1 2025[137](index=137&type=chunk)[140](index=140&type=chunk) - The gross profit margin for the wireless communication business segment slightly increased by **0.2 percentage points** to **15.4%**[137](index=137&type=chunk)[140](index=140&type=chunk) - The gross profit margin for the integrated circuits and digital technology business segment slightly decreased by **1.3 percentage points** from 35.4% to **34.1%**[137](index=137&type=chunk)[140](index=140&type=chunk) - The gross profit margin for the new energy and services business segment significantly decreased by **27.0 percentage points** from 58.6% to **31.6%**, primarily due to unstable weather conditions and additional costs incurred for the development of O&M business[143](index=143&type=chunk)[155](index=155&type=chunk) - The Group plans to improve gross profit margin by increasing R&D investment in new products, applying new technologies, enhancing intelligence and informatization, implementing lean development, improving output efficiency, reducing costs, shortening receivable cycles, and strengthening inventory management[145](index=145&type=chunk)[157](index=157&type=chunk) [Other Operating Income](index=32&type=section&id=%E5%85%B6%E4%BB%96%E7%B6%93%E7%87%9F%E6%94%B6%E5%85%A5) Other operating income decreased by 47.5% YoY to RMB 15.6 million, primarily due to reduced government grants and net gains from commodity futures contracts - Other operating income decreased by approximately **RMB 14.1 million** or **47.5%** to **RMB 15.6 million**[146](index=146&type=chunk)[151](index=151&type=chunk) - The decrease was mainly due to a reduction of approximately **RMB 9.0 million** in government grants and subsidies, and a decrease of approximately **RMB 7.0 million** in net gains from commodity futures contracts[146](index=146&type=chunk)[151](index=151&type=chunk) [Selling and Distribution Expenses](index=32&type=section&id=%E9%8A%B7%E5%94%AE%E5%8F%8A%E5%88%86%E9%8A%B7%E9%96%8B%E6%94%AF) Selling and distribution expenses decreased by 11.3% YoY to RMB 58.9 million, consistent with the decline in wireless communication business revenue - Selling and distribution expenses decreased by approximately **RMB 7.5 million** or **11.3%** to **RMB 58.9 million**[147](index=147&type=chunk)[152](index=152&type=chunk) - The decrease is consistent with the decline in revenue from the wireless communication business segment, leading to reduced salary expenses, transportation costs, and travel and entertainment expenses[147](index=147&type=chunk)[152](index=152&type=chunk) [Administrative Expenses](index=32&type=section&id=%E8%A1%8C%E6%94%BF%E9%96%8B%E6%94%AF) Administrative expenses decreased by 18.3% YoY to RMB 41.0 million, primarily due to reduced salary-related expenses and consulting and legal professional fees - Administrative expenses decreased by approximately **RMB 9.2 million** or **18.3%** to **RMB 41.0 million**[148](index=148&type=chunk)[153](index=153&type=chunk) - The decrease was mainly due to reduced salary-related expenses and consulting and legal professional fees[148](index=148&type=chunk)[153](index=153&type=chunk) [Other Operating Expenses](index=32&type=section&id=%E5%85%B6%E4%BB%96%E7%B6%93%E7%87%9F%E9%96%8B%E6%94%AF) Other operating expenses increased by 6.4% YoY to RMB 76.8 million, mainly due to higher R&D expenses and increased net exchange losses, partially offset by a decrease in reversal of obsolete inventories - Other operating expenses increased by approximately **RMB 4.6 million** or **6.4%** to **RMB 76.8 million**[149](index=149&type=chunk)[154](index=154&type=chunk) - Research and development expenses increased by approximately **RMB 0.8 million** or **1.1%** to **RMB 73.0 million**, with an **RMB 9.0 million** increase in telecom product R&D[149](index=149&type=chunk)[154](index=154&type=chunk) - Net exchange loss increased from **RMB 0.4 million** to **RMB 1.4 million**[149](index=149&type=chunk)[154](index=154&type=chunk) - Reversal of obsolete inventories decreased by approximately **RMB 2.4 million**[149](index=149&type=chunk)[154](index=154&type=chunk) [Interest Expense](index=34&type=section&id=%E5%88%A9%E6%81%AF%E9%96%8B%E6%94%AF) Interest expense increased by 30.5% YoY to RMB 31.2 million, primarily due to higher interest expenses related to bank borrowings for the acquisition of Zhongguang New Energy - Interest expense increased by approximately **RMB 7.3 million** or **30.5%** to **RMB 31.2 million**[158](index=158&type=chunk)[171](index=171&type=chunk) - The increase was mainly due to interest expenses related to bank borrowings for the acquisition of Zhongguang New Energy and Zhongguang New Energy's bank loans[158](index=158&type=chunk)[171](index=171&type=chunk) [Profit Before Tax](index=34&type=section&id=%E9%99%A4%E7%A8%85%E5%89%8D%E6%BA%A2%E5%88%A9) Profit before tax for H1 2025 significantly dropped to RMB 6 thousand, primarily impacted by reduced revenue and gross profit margin, decreased government grants, impairment losses, and increased interest expense - Profit before tax for H1 2025 was **RMB 6 thousand**, compared to **RMB 43.6 million** in H1 2024[159](index=159&type=chunk)[172](index=172&type=chunk) - The decrease was mainly attributable to reduced revenue and gross profit margin, a decrease of approximately **RMB 9.0 million** in government grants, an impairment loss of approximately **RMB 8.4 million** on trade and other receivables, and an increase of approximately **RMB 7.3 million** in interest expense[159](index=159&type=chunk)[172](index=172&type=chunk) [Income Tax](index=34&type=section&id=%E6%89%80%E5%BE%97%E7%A8%85) Income tax expense surged by 597.1% YoY to RMB 71.1 million, primarily due to increased enterprise income tax paid on inter-company dividend distributions within the China Group - Income tax expense increased by approximately **RMB 60.9 million** or **597.1%** to **RMB 71.1 million**[160](index=160&type=chunk)[173](index=173&type=chunk) - The increase was mainly due to higher enterprise income tax paid in China on inter-company dividend distributions within the Group in H1 2025[160](index=160&type=chunk)[173](index=173&type=chunk) [Loss Attributable to Equity Holders of the Company](index=34&type=section&id=%E6%9C%AC%E5%85%AC%E5%8F%B8%E6%AC%8A%E7%9B%8A%E8%82%A1%E6%9D%B1%E6%87%89%E4%BD%B5%E虧%E6%90%8D) The Group recorded a loss attributable to equity holders of the Company of approximately RMB 70.4 million, compared to a profit of RMB 26.6 million in the prior year, reflecting the combined impact of several unfavorable financial factors - The Group recorded a loss attributable to equity holders of the Company of approximately **RMB 70.4 million**, compared to a profit of approximately **RMB 26.6 million** in H1 2024[161](index=161&type=chunk)[174](index=174&type=chunk) [Consolidated Statement of Financial Position](index=34&type=section&id=%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81%E8%A1%A8) This section analyzes changes in key balance sheet items, including a decrease in intangible assets due to amortization, an increase in trade and other receivables driven by higher prepayments, a rise in trade and other payables due to increased raw material purchases, and an increase in bank loans to improve working capital [Intangible Assets](index=34&type=section&id=%E7%84%A1%E5%BD%A2%E8%B3%87%E7%94%A2) Intangible assets decreased by 4.7% to RMB 216.9 million, primarily due to amortization during H1 2025 - Intangible assets decreased by approximately **RMB 10.6 million** or **4.7%** to **RMB 216.9 million**, mainly due to amortization in H1 2025[162](index=162&type=chunk)[175](index=175&type=chunk) [Trade and Other Receivables](index=34&type=section&id=%E8%B2%BF%E6%98%93%E6%87%89%E6%94%B6%E5%8F%8A%E5%85%B6%E4%BB%96%E6%87%89%E6%94%B6%E6%AC%BE%E9%A0%85) Net trade receivables and bills receivable slightly decreased by 3.0%, but net prepayments and non-trade receivables significantly increased by 159.3%, leading to an overall increase in total trade and other receivables - Net trade receivables and bills receivable decreased by approximately **RMB 38.3 million** or **3.0%** to **RMB 1,257.5 million**, primarily due to a decrease in bills receivable[163](index=163&type=chunk)[168](index=168&type=chunk) - Net prepayments and non-trade receivables increased by approximately **RMB 162.2 million** or **159.3%** to **RMB 264.0 million**, mainly due to increased prepayments for raw material purchases in anticipation of future material cost increases[164](index=164&type=chunk)[168](index=168&type=chunk) [Trade and Other Payables](index=34&type=section&id=%E8%B2%BF%E6%98%93%E6%87%89%E4%BB%98%E5%8F%8A%E5%85%B6%E4%BB%96%E6%87%89%E4%BB%98%E6%AC%BE%E9%A0%85) Trade payables significantly increased by 63.4%, mainly due to higher raw material purchases for the wireless communication business in anticipation of rising material costs, while other payables decreased by 61.2% primarily due to reduced salary-related payables - Trade payables increased by approximately **RMB 402.0 million** or **63.4%** to **RMB 1,036.0 million**, primarily due to increased raw material purchases for the wireless communication business segment in anticipation of future material cost increases[165](index=165&type=chunk)[176](index=176&type=chunk) - Other payables decreased by approximately **RMB 64.9 million** or **61.2%** to **RMB 41.2 million**, mainly due to reduced salary-related payables[166](index=166&type=chunk)[176](index=176&type=chunk) [Current and Non-current Bank Loans](index=34&type=section&id=%E6%B5%81%E5%8B%95%E9%8A%80%E8%A1%8C%E8%B2%B8%E6%AC%BE%E5%8F%8A%E9%9D%9E%E6%B5%81%E5%8B%95%E9%8A%80%E8%A1%8C%E8%B2%B8%E6%AC%BE) Total current and non-current bank loans increased to RMB 1,771.4 million, primarily utilized to improve working capital conditions - Total current and non-current bank loans amounted to approximately **RMB 1,771.4 million**, an increase from **RMB 1,498.0 million** as of December 31, 2024[167](index=167&type=chunk)[170](index=170&type=chunk) - These loans were primarily used to improve the Group's working capital position and bear fixed interest rates[167](index=167&type=chunk)[170](index=170&type=chunk) [Liquidity and Financial Resources](index=36&type=section&id=%E6%B5%81%E5%8B%95%E8%B3%87%E9%87%91%E5%8F%8A%E8%B2%A1%E5%8B%99%E8%B3%87%E6%BA%90) As of June 30, 2025, the Group's total assets and liabilities both increased, with a significant rise in total cash, time deposits, and pledged deposits, leading to an increased gearing ratio of 57%, yet the Group complied with all capital requirements for external borrowings and primarily funds its operations through internal cash flows Liquidity and Financial Resources Overview | Metric (thousand RMB) | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :--- | :--- | :--- | | Total assets | 5,236,419 | 4,666,187 | | Total liabilities | 2,958,627 | 2,319,095 | | Equity attributable to equity holders of the Company | 1,493,248 | 1,561,877 | | Total cash, time deposits and pledged deposits | 1,919,442 | 1,455,212 | | Current bank loans | 722,302 | 424,602 | | Non-current bank loans | 1,049,132 | 1,073,417 | Gearing Ratio | Metric | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :--- | :--- | :--- | | Total liabilities (thousand RMB) | 2,958,627 | 2,319,095 | | Total assets (thousand RMB) | 5,236,419 | 4,666,187 | | Gearing ratio (%) | 57% | 50% | - The Group typically funds its operations through internally generated cash flows[179](index=179&type=chunk)[189](index=189&type=chunk) - At the end of the reporting period, the Group complied with all capital requirements for external borrowings[180](index=180&type=chunk)[191](index=191&type=chunk) [Review and Outlook](index=36&type=section&id=%E5%9B%9E%E9%A1%A7%E8%88%87%E5%89%8D%E6%99%AF) This section reviews China's economic environment and the Group's overall performance in H1 2025, and outlines future development for its three business segments: integrated circuits and digital technology, new energy and services, and wireless communication, with a focus on leveraging new energy and AI market opportunities through business diversification and synergistic growth for long-term sustainability [Overall Review](index=36&type=section&id=%E6%95%B4%E9%AB%94%E5%9B%9E%E9%A1%A7) In H1 2025, China's economy maintained steady growth with a 5.3% GDP increase, notable performance in new energy and green infrastructure investments, and continued expansion of 5G base stations, while the Group made significant strides in new energy, with its grid-side independent energy storage project selected for Shandong Province's new energy storage project list, and enhanced gross profit margin through lean operations - China's GDP grew by **5.3%** YoY in H1 2025, with stable economic operations[185](index=185&type=chunk) - The new energy and green infrastructure sectors performed strongly, with China's energy storage investment reaching **RMB 279.9 billion**, a **10.5%** YoY increase[186](index=186&type=chunk) - As of the end of June 2025, the total number of 5G base stations built and opened nationwide reached approximately **4.55 million**, a net increase of approximately **596,000** from the end of 2024[192](index=192&type=chunk)[199](index=199&type=chunk) - The Group's 800MW/1600MWh grid-side independent energy storage project was successfully selected for Shandong Province's 2025 new energy storage project list, becoming the largest single project in that batch[192](index=192&type=chunk)[199](index=199&type=chunk) - The Group focused on lean operations, significantly reducing costs and steadily increasing product gross profit margin through supply chain optimization and technological upgrades[192](index=192&type=chunk)[199](index=199&type=chunk) [Integrated Circuits and Digital Technology](index=38&type=section&id=%E9%9B%86%E6%88%90%E9%9B%BB%E8%B7%AF%E5%8F%8A%E6%95%B8%E5%AD%97%E7%A7%91%E6%8A%80) The global semiconductor market continues to grow, with AI demand driving memory upgrades, while China's integrated circuit exports increased in both volume and value, with a higher proportion to Southeast Asia; the Group aims to capitalize on market recovery by stabilizing existing clients, expanding new ones, and vigorously developing IP licensing and digital security businesses, with current outstanding orders exceeding RMB 178.3 million - Global semiconductor sales reached **US$58.98 billion** in May 2025, a **19.8%** YoY increase and **3.5%** MoM increase[193](index=193&type=chunk)[200](index=200&type=chunk) - Increased AI penetration drives demand for computing power, leading to rapid growth in server, PC, and mobile memory capacity[194](index=194&type=chunk)[197](index=197&type=chunk) - In H1 2025, China's integrated circuit exports increased by **20.6%** to **167.77 billion units**, with export value growing by **20.3%** to **RMB 650.26 billion**[195](index=195&type=chunk)[197](index=197&type=chunk) - The Group's digital technology and digital security business segment recorded revenue of approximately **RMB 93.4 million**, including **RMB 64.1 million** from chip customization services, **RMB 5.5 million** from semiconductor IP licensing, and **RMB 20.9 million** from digital security[195](index=195&type=chunk)[198](index=198&type=chunk) - Current outstanding orders for the integrated circuits and digital technology business segment exceed **RMB 178.3 million**[195](index=195&type=chunk)[198](index=198&type=chunk) [New Energy and Services](index=40&type=section&id=%E6%96%B0%E8%83%BD%E6%BA%90%E5%8F%8A%E6%9C%8D%E5%8B%99) China's new energy installed capacity is rapidly growing, but grid integration issues are becoming prominent; concentrated solar power (CSP) is gaining policy support as a grid-friendly, low-carbon power source with peak-shaving and energy storage capabilities, and Zhongguang New Energy, a pioneer in CSP plant construction and O&M, has secured six external O&M contracts totaling RMB 230 million and was shortlisted for a Qinghai Province CSP demonstration project - As of the end of June 2025, national cumulative power generation installed capacity reached **3.65 billion kilowatts**, a **18.7%** YoY increase, with solar power generation installed capacity at **1.10 billion kilowatts**, a **54.2%** YoY increase[201](index=201&type=chunk)[207](index=207&type=chunk) - Rapid growth in new energy installed capacity has led to grid integration challenges, with declining utilization rates for wind and solar power[201](index=201&type=chunk)[207](index=207&type=chunk) - Concentrated solar power (CSP) combines peak-shaving and energy storage functions, making it a grid-friendly, low-carbon power source supported by policies such as the "Energy Law of the People's Republic of China"[202](index=202&type=chunk)[205](index=205&type=chunk)[207](index=207&type=chunk)[209](index=209&type=chunk) - Zhongguang New Energy wholly owns two tower-type CSP molten salt energy storage power stations in Delingha, Qinghai (10MW and 50MW), with the 50MW plant being the world's first CSP energy storage power station to achieve its design generation capacity[203](index=203&type=chunk)[205](index=205&type=chunk) - As of June 30, 2025, Zhongguang New Energy has signed six external CSP plant O&M contracts, with a cumulative contract value of **RMB 230 million**[204](index=204&type=chunk)[206](index=206&type=chunk) - Zhongguang New Energy was shortlisted for the Qinghai Zhongkong Delingha 350MW CSP demonstration (pilot) project, which is the world's largest CSP plant project by energy storage capacity[204](index=204&type=chunk)[206](index=206&type=chunk) [Wireless Communication](index=42&type=section&id=%E7%84%A1%E7%B7%9A%E9%80%9A%E4%BF%A1) China's domestic 5G network construction is largely complete, leading to a decline in wireless-side investment and reduced sales of RF coaxial cables and antennas, but demand for deep wireless network coverage, particularly for digital indoor distribution products, has significantly increased; overseas markets face uncertainty due to complex policies and geopolitical tensions, while the Group has strengthened its market position through central procurement projects - China's domestic 5G network construction is largely complete, leading to a significant decline in wireless-side investment for mobile communication networks[210](index=210&type=chunk)[219](index=219&type=chunk) - Investment in deep wireless network coverage (especially for indoor and dense urban areas) continues to increase, leading to a significant rise in market demand for the Group's digital indoor distribution products[210](index=210&type=chunk)[219](index=219&type=chunk) - Overseas performance remained largely flat YoY, but the outlook for H2 is uncertain due to complex global policies and geopolitical tensions[210](index=210&type=chunk)[219](index=219&type=chunk) - In H1 2025, the Group secured bids exceeding **RMB 1.19 billion** in central procurement projects from major domestic telecom operators and provincial telecom operators, as well as enterprise clients, further solidifying its market position[211](index=211&type=chunk)[220](index=220&type=chunk) [Outlook](index=42&type=section&id=%E5%B1%95%E6%9C%9B) Looking ahead to H2 2025, China's economy is expected to maintain stable growth, with the integrated circuit industry projected for significant growth driven by inventory recovery, terminal demand resurgence, and booming AI demand, while CSP plant O&M will emerge as a new growth driver for the new energy and services business, and the Group aims to create greater shareholder value through business diversification and synergistic development - China's economic growth for the full year 2025 is projected to be between **5.0% and 5.2%**[212](index=212&type=chunk)[221](index=221&type=chunk) - The integrated circuit industry's growth in H2 will significantly outperform H1, benefiting from inventory returning to healthy levels, recovering terminal demand, and the continuous explosion of AI and data center demand[212](index=212&type=chunk)[221](index=221&type=chunk) - Concentrated solar power (CSP) plant O&M business will become a new growth point for the new energy and services business segment[213](index=213&type=chunk)[216](index=216&type=chunk) - The Group expects to lay a solid foundation for stable and sustainable development and create greater value for its shareholders through diversified business development and synergy among business segments[214](index=214&type=chunk)[216](index=216&type=chunk) [Directors' and Chief Executive's Interests and Short Positions in Shares, Underlying Shares and Debentures](index=42&type=section&id=%E8%91%A3%E4%BA%8B%E5%8F%8A%E4%B8%BB%E8%A6%81%E8%A1%8C%E6%94%BF%E4%BA%BA%E5%93%A1%E6%96%BC%E8%82%A1%E4%BB%BD%E5%8F%8A%E7%9B%B8%E9%97%9C%E8%82%A1%E4%BB%BD%E5%92%8C%E5%82%B5%E6%AC%8A%E8%AD%89%E7%9A%84%E6%AC%8A%E7%9B%8A%E5%92%8C%E6%B7%A1%E5%80%89) As of June 30, 2025, Mr. Cui Wei and Ms. Zhang Zhong held long positions in the Company's shares, representing 23.38% and 3.41% of the issued share capital, respectively, and all directors and chief executives complied with the Model Code for Securities Transactions during the reporting period Directors' Long Positions in the Company | Director's Name | Capacity and Nature of Interest | Number of Ordinary Shares Held | Approximate Percentage of the Company's Issued Share Capital | | :--- | :--- | :--- | :--- | | Mr. Cui Wei | Deemed interest and interest in controlled corporation | 108,868,662 | 23.38% | | Ms. Zhang Zhong | Deemed interest and interest in controlled corporation | 15,894,525 | 3.41% | - Save as disclosed, none of the directors or chief executive or their associates had any interests or short positions in the shares, underlying shares or debentures of the Company or any of its associated corporations that were required to be recorded[222](index=222&type=chunk)[234](index=234&type=chunk) - As at the end of the reporting period and throughout the reporting period, there were no arrangements under which directors might acquire benefits by means of the acquisition of shares or debentures of the Company or any other body corporate, save for the Employee Share Incentive Scheme and Share Award Scheme[226](index=226&type=chunk)[231](index=231&type=chunk) [Substantial Shareholders' and Other Persons' Interests in Shares and Underlying Shares](index=44&type=section&id=%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%E8%82%A1%E4%BB%BD%E5%8F%8A%E7%9B%B8%E9%97%9C%E8%82%A1%E4%BB%BD%E4%B8%AD%E7%9A%84%E6%AC%8A%E7%9B%8A) As of June 30, 2025, Jinyong Industrial Co., Ltd. and Mr. Cui Wei were substantial shareholders of the Company, each holding a 23.38% long position in the Company's issued share capital Substantial Shareholders' Long Positions in the Company | Name of Substantial Shareholder | Capacity and Nature of Interest | Number of Ordinary Shares Held | Approximate Percentage of the Company's Issued Share Capital | | :--- | :--- | :--- | :--- | | Jinyong | Beneficial owner | 108,868,662 | 23.38% | | Mr. Cui Wei | Deemed interest and interest in controlled corporation | 108,868,662 | 23.38% | - The entire issued share capital of Jinyong Industrial Co, Ltd is beneficially owned by Mr. Cui Wei[224](index=224&type=chunk)[235](index=235&type=chunk) [Supplementary Information](index=44&type=section&id=%E8%A3%9C%E5%85%85%E8%B3%87%E6%96%99) This section provides supplementary information including changes in Board composition post-reporting period, Audit Committee review, compliance with Corporate Governance Code and Model Code for Securities Transactions by Directors, dividend policy, review status of financial results, Company's securities transactions, employee and remuneration policies, and post-reporting period events [1. Changes in Board Composition After June 30, 2025](index=44&type=section&id=1.%20%E4%BA%8C%E9%9B%B6%E4%BA%8C%E4%BA%94%E5%B9%B4%E5%85%AD%E6%9C%88%E4%B8%89%E5%8D%81%E6%97%A5%E5%BE%8C%E4%B9%8B%E8%91%A3%E4%BA%8B%E6%9C%83%E7%B5%84%E6%88%90%E8%AE%8A%E5%8B%95) On July 11, 2025, Ms. Zhang Zhong and Mr. Pu Hong resigned as directors, while Mr. Liu Fei and Ms. Lin Ting were appointed as Executive Director and Independent Non-executive Director, respectively; on July 31, 2025, Dr. Li Jun resigned as Independent Non-executive Director, and Mr. Chan Hon Chung was appointed as Independent Non-executive Director - On July 11, 2025, Ms. Zhang Zhong resigned as a Non-executive Director and a member of the Audit Committee, and Mr. Pu Hong resigned as an Independent Non-executive Director and a member of the Audit Committee, Remuneration Committee, and Nomination Committee[227](index=227&type=chunk)[232](index=232&type=chunk) - On the same day, Mr. Liu Fei was appointed as an Executive Director, and Ms. Lin Ting was appointed as an Independent Non-executive Director and a member of the Audit Committee, Remuneration Committee, and Nomination Committee[227](index=227&type=chunk)[232](index=232&type=chunk) - On July 31, 2025, Dr. Li Jun resigned as an Independent Non-executive Director, Chairman of the Remuneration Committee, and a member of the Audit Committee and Nomination Committee[236](index=236&type=chunk)[248](index=248&type=chunk) - On the same day, Mr. Chan Hon Chung was appointed as an Independent Non-executive Director, Chairman of the Remuneration Committee, and a member of the Audit Committee and Nomination Committee[236](index=236&type=chunk)[248](index=248&type=chunk) [2. Audit Committee and Its Terms of Reference](index=46&type=section&id=2.%20%E5%AF%A9%E8%A8%88%E5%A7%94%E5%93%A1%E6%9C%83%E5%8F%8A%E5%85%B6%E8%81%B7%E6%AC%8A%E7%AF%84%E5%9C%8D) The Audit Committee has reviewed the Group's unaudited interim results for the six months ended June 30, 2025 - The Audit Committee has reviewed the Group's unaudited interim results for the six months ended June 30, 2025[237](index=237&type=chunk)[250](index=250&type=chunk) [3. Compliance with Corporate Governance Code](index=46&type=section&id=3.%20%E9%81%B5%E5%AE%88%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB%E5%AE%88%E5%89%87) For the six months ended June 30, 2025, the Company has complied with all code provisions of the Corporate Governance Code - The Company has complied with all code provisions of the Corporate Governance Code[238](index=238&type=chunk)[251](index=251&type=chunk) [4. Compliance with the Model Code for Securities Transactions by Directors of Listed Issuers](index=46&type=section&id=4.%20%E9%81%B5%E5%AE%88%E4%B8%8A%E5%B8%82%E7%99%BC%E8%A1%8C%E4%BA%BA%E8%91%A3%E4%BA%8B%E9%80%B2%E8%A1%8C%E8%AD%89%E5%88%B8%E4%BA%A4%E6%98%93%E7%9A%84%E6%A8%99%E6%BA%96%E5%AE%88%E5%89%87) All Directors confirmed their compliance with the required standards of the Model Code for Securities Transactions by Directors during the reporting period - All Directors confirmed their compliance with the required standards of the Model Code for Securities Transactions by Directors during the reporting period[239](index=239&type=chunk)[252](index=252&type=chunk) [5. Dividends](index=46&type=section&id=5.%20%E8%82%A1%E6%81%AF) The Company recommends no dividend payment for the six months ended June 30, 2025 - The Company recommends no dividend payment for the six months ended June 30, 2025[240](index=240&type=chunk)[253](index=253&type=chunk) [6. Review of Financial Results](index=46&type=section&id=6.%20%E5%AF%A9%E9%96%B1%E8%B2%A1%E5%8B%99%E6%A5%AD%E7%B8%BE) The Group's consolidated interim results for the six months ended June 30, 2025, have not been audited or reviewed by the Company's auditor - The Group's consolidated interim results for the six months ended June 30, 2025, have not been audited or reviewed by the Company's auditor[241](index=241&type=chunk)[254](index=254&type=chunk) [7. Purchase, Sale or Redemption of the Company's Securities](index=46&type=section&id=7.%20%E8%B3%BC%E5%85%A5%E3%80%81%E5%87%BA%E5%94%AE%E6%88%96%E8%B4%96%E5%9B%9E%E6%9C%AC%E5%85%AC%E5%8F%B8%E8%AD%89%E5%88%B8) During the reporting period, neither the Company nor its subsidiaries purchased, sold, or redeemed any of the Company's securities - During the reporting period, neither the Company nor its subsidiaries purchased, sold, or redeemed any of the Company's securities[242](index=242&type=chunk)[245](index=245&type=chunk) [8. Employees and Remuneration Policies](index=46&type=section&id=8.%20%E5%83%B1%E5%93%A1%E5%8F%8A%E8%96%AA%E9%85%AC%E5%B8%B8%E8%A6%8F) As of June 30, 2025, the Group employed 956 staff, with remuneration determined by market conditions and individual performance, offering benefits such as medical and life insurance, discretionary bonuses, and share options, and operating an Employee Share Incentive Scheme and Share Award Scheme - As of June 30, 2025, the Group employed **956** staff (December 31, 2024: 902 staff)[243](index=243&type=chunk)[246](index=246&type=chunk) - Employee remuneration is determined by market conditions and individual performance, with benefits including medical and life insurance, discretionary bonuses, and share options[243](index=243&type=chunk)[246](index=246&type=chunk) - The Company has an Employee Share Incentive Scheme (adopted on April 26, 2019) and a Share Award Scheme (adopted on October 21, 2024) aimed at incentivizing and retaining talent[243](index=243&type=chunk)[246](index=246&type=chunk) [9. Post Balance Sheet Events](index=46&type=section&id=9.%20%E5%A0%B1%E5%91%8A%E6%9C%9F%E5%BE%8C%E4%BA%8B%E4%BB%B6) No significant events affecting the Group have occurred since the end of the six months ended June 30, 2025, up to the date of this report, other than those already disclosed herein - Save as disclosed in this report, no significant events affecting the Group have occurred since the end of the six months ended June 30, 2025, and up to the date of this report[244](index=244&type=chunk)[247](index=247&type=chunk) [10. Disclosure on HKEX and Company Website](index=48&type=section&id=10.%20%E6%96%BC%E9%A6%99%E6%B8%AF%E8%81%AF%E4%BA%A4%E6%89%80%E5%8F%8A%E6%9C%AC%E5%85%AC%E5%8F%B8%E7%B6%B2%E7%AB%99%E4%BD%9C%E6%8A%AB%E9%9C%B2) This report has been published on the websites of the Hong Kong Stock Exchange and the Company - This report has been published on the website of the Hong Kong Stock Exchange (http://www.hkexnews.hk) and the Company's website (http://www.hengxin.com.sg)[255](index=255&type=chunk)