香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不負責，對其準確性 或完整性亦不發表任何意見，並明確表示概不就因本公告全部或任何部分內容而產生或因倚賴 該等內容而引致的任何損失承擔任何責任。 TYK Medicines, Inc 浙江同源康醫藥股份有限公司 （於中華人民共和國註冊成立的股份有限公司） （股份代號：2410） 截至2025年6月30日止六個月中期業績公告； 非執行董事辭任；及 建議修訂組織章程細則 | 財務摘要 | | | | | | --- | --- | --- | --- | --- | | | 截至6月30日止六個月 | | | | | | 2025年 | 2024年 | 變動 | | | 人民幣千元 | | 人民幣千元 | 人民幣千元 | % | | （未經審計） | | （未經審計） | | | | 研發成本 | (88,758) | (137,758) | 49,000 | -35.6 | | 行政開支 | (38,775) | (40,100) | 1,325 | -3.3 | | 期內總全面虧損 | (114,065) | (219,533) | 105,468 ...

Unaudited Interim Results Announcement [Financial Highlights](index=1&type=section&id=Financial%20Highlights) The company reported unaudited interim results for H1 2025, with revenue down 16.2% to MYR 725.0 million and profit attributable to owners down 26.0% to MYR 8.5 million | Metric | H1 2025 (MYR million) | H1 2024 (MYR million) | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 725.0 | 865.2 | -16.2% | | Gross Profit | 61.7 | 61.8 | -0.2% | | Profit Attributable to Owners of the Company | 8.5 | 11.5 | -26.0% | | Equity Attributable to Owners of the Company (Period End) | 246.9 | 238.4 (Dec 31, 2024) | -3.6% | - The Board did not declare any dividend for the six months ended June 30, 2025 (2024 corresponding period: nil)[4](index=4&type=chunk) Condensed Consolidated Financial Statements [Condensed Consolidated Statement of Comprehensive Income](index=2&type=section&id=Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) For H1 2025, revenue was MYR 724,957 thousand, a 16.2% decrease, with profit attributable to owners at MYR 8,471 thousand and basic EPS at 0.85 sen | Metric | H1 2025 (MYR thousand) | H1 2024 (MYR thousand) | | :--- | :--- | :--- | | Revenue | 724,957 | 865,207 | | Cost of Sales | (663,224) | (803,407) | | Gross Profit | 61,733 | 61,800 | | Operating Profit | 14,536 | 18,897 | | Profit for the Period | 7,167 | 10,114 | | Profit for the Period Attributable to Owners of the Company | 8,471 | 11,456 | | Basic Earnings Per Share (Sen) | 0.85 | 1.15 | [Condensed Consolidated Statement of Financial Position](index=3&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, total assets were MYR 379,997 thousand, total equity MYR 241,820 thousand, and total liabilities MYR 138,177 thousand | Metric | June 30, 2025 (MYR thousand) | Dec 31, 2024 (MYR thousand) | | :--- | :--- | :--- | | Total Assets | 379,997 | 380,346 | | Non-current Assets | 90,849 | 90,302 | | Current Assets | 289,148 | 290,044 | | Total Equity | 241,820 | 234,653 | | Equity Attributable to Owners of the Company | 246,908 | 238,437 | | Total Liabilities | 138,177 | 145,693 | | Non-current Liabilities | 21,111 | 20,393 | | Current Liabilities | 117,066 | 125,300 | Notes to the Condensed Consolidated Financial Statements [General Information](index=5&type=section&id=General%20Information) The company, incorporated in the Cayman Islands, primarily trades ferrous scrap metal and other waste products in Malaysia, controlled by the Sia Brothers - The Company is an investment holding company primarily engaged in the trading of ferrous scrap metal, used batteries, waste paper, iron ore, and other waste products in Malaysia[8](index=8&type=chunk) - The ultimate controlling parties of the Group are Dato' Sia Kok Chin, Dato' Sia Keng Leong, Mr. Sia Kok Chong, Mr. Sia Kok Seng and Mr. Sia Kok Heong (collectively, the "Sia Brothers")[8](index=8&type=chunk) [Basis of Preparation](index=5&type=section&id=Basis%20of%20Preparation) These interim financial statements are prepared in accordance with IAS 34, HKEX Listing Rules, and Hong Kong Companies Ordinance disclosure requirements - These condensed consolidated financial statements are prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting", the disclosure requirements of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited, and the disclosure requirements of the Hong Kong Companies Ordinance (Chapter 622)[10](index=10&type=chunk) [Significant Accounting Policies and Disclosures](index=5&type=section&id=Significant%20Accounting%20Policies%20and%20Disclosures) The Group adopted IAS 21 (Amendment) "Lack of Exchangeability" with no significant impact, and future new standards are not expected to have a material effect - IAS 21 (Amendment) "Lack of Exchangeability" has been adopted and has no significant impact on the Group's financial position and performance and/or disclosures for the current and prior periods[11](index=11&type=chunk) New and Amended Standards Not Yet Adopted | Standard | Title | Effective Date | | :--- | :--- | :--- | | IFRS 9 and 7 (Amendments) | Classification and Measurement of Financial Instruments | Jan 1, 2026 | | IFRS 9 and 7 (Amendments) | Contracts that Rely on Natural Energy Production | Jan 1, 2026 | | IFRS 18 | Presentation and Disclosure in Financial Statements | Jan 1, 2027 | | IFRS 10 and IAS 28 (Amendments) | Sale or Contribution of Assets between an Investor and its Associate or Joint Venture | To be determined | [Revenue and Segment Information](index=6&type=section&id=Revenue%20and%20Segment%20Information) The Group operates a single segment, trading recycled materials, with most revenue and all non-current assets located in Malaysia - The Group is principally engaged in the trading of ferrous scrap metal, used batteries, waste paper, iron ore, other waste products and provision of logistics services, and has been operating a single operating segment, namely, trading of recycled materials[14](index=14&type=chunk)[15](index=15&type=chunk) - For the six months ended June 30, 2025 and 2024, the Group primarily conducted transactions in Malaysia and most of its revenue was generated from Malaysia[17](index=17&type=chunk) - As at June 30, 2025, all non-current assets were located in Malaysia[19](index=19&type=chunk) [Other Income and Net Losses](index=7&type=section&id=Other%20Income%20and%20Net%20Losses) In H1 2025, other income increased to MYR 1,064 thousand, while net other losses were MYR 942 thousand, mainly due to impairment provisions for trade receivables | Metric | H1 2025 (MYR thousand) | H1 2024 (MYR thousand) | | :--- | :--- | :--- | | Other Income | 1,064 | 577 | | Net Other Losses | (942) | (696) | - In the first half of 2025, net other losses mainly arose from a provision for impairment losses on trade receivables of MYR 942 thousand, while in the first half of 2024, it was mainly due to the write-off of advances to suppliers[20](index=20&type=chunk) [Expenses by Nature](index=7&type=section&id=Expenses%20by%20Nature) In H1 2025, cost of trading goods sold was MYR 650,596 thousand, employee benefits expense rose to MYR 17,583 thousand, and transportation costs increased to MYR 23,711 thousand | Expense Category | H1 2025 (MYR thousand) | H1 2024 (MYR thousand) | | :--- | :--- | :--- | | Cost of trading goods sold | 650,596 | 790,684 | | Employee benefits expense | 17,583 | 16,684 | | Depreciation expense | 5,342 | 4,788 | | Amortisation expense | 26 | 15 | | Transportation costs | 23,711 | 20,253 | | Total cost of sales, distribution and selling expenses and administrative expenses | 710,543 | 864,191 | [Net Finance Costs](index=8&type=section&id=Net%20Finance%20Costs) Net finance costs decreased to MYR 1,924 thousand in H1 2025 from MYR 2,830 thousand in H1 2024, primarily due to lower interest expense on loans | Item | H1 2025 (MYR thousand) | H1 2024 (MYR thousand) | | :--- | :--- | :--- | | Interest income from bank deposits | 345 | 217 | | Interest expense on loans | (1,744) | (2,784) | | Interest expense on loans from non-controlling shareholders | (214) | – | | Net finance costs | (1,924) | (2,830) | [Income Tax Expense](index=8&type=section&id=Income%20Tax%20Expense) Income tax expense decreased to MYR 5,445 thousand in H1 2025 from MYR 5,953 thousand in H1 2024, with the Malaysian corporate tax rate remaining at 24% | Item | H1 2025 (MYR thousand) | H1 2024 (MYR thousand) | | :--- | :--- | :--- | | Malaysian corporate income tax | 5,556 | 5,781 | | Deferred income tax | (111) | 202 | | Income tax expense | 5,445 | 5,953 | - Malaysian corporate income tax is provided at a rate of **24%** on the estimated assessable profit[22](index=22&type=chunk) [Interim Dividend](index=8&type=section&id=Interim%20Dividend) The Board decided not to declare any dividend for the six months ended June 30, 2025, consistent with the prior year period - The Board did not declare any dividend for the six months ended June 30, 2025 (for the six months ended June 30, 2024: nil)[24](index=24&type=chunk) [Earnings Per Share](index=9&type=section&id=Earnings%20Per%20Share) In H1 2025, profit attributable to owners was MYR 8,471 thousand, with basic and diluted EPS at 0.85 sen, down from 1.15 sen in H1 2024 | Metric | H1 2025 (MYR thousand) | H1 2024 (MYR thousand) | | :--- | :--- | :--- | | Profit for the period attributable to owners of the Company | 8,471 | 11,456 | | Weighted average number of ordinary shares in issue | 1,000,000,000 | 1,000,000,000 | | Basic earnings per share (expressed in sen per share) | 0.85 | 1.15 | - As at June 30, 2025 and 2024, there were no potential dilutive ordinary shares in issue, thus basic and diluted earnings per share were the same[26](index=26&type=chunk) [Trade and Other Receivables](index=9&type=section&id=Trade%20and%20Other%20Receivables) As of June 30, 2025, net trade receivables were MYR 155,194 thousand, with increased provisions for impairment losses and a rise in receivables aged over 120 days | Item | June 30, 2025 (MYR thousand) | Dec 31, 2024 (MYR thousand) | | :--- | :--- | :--- | | Trade receivables | 159,058 | 167,883 | | Less: Provision for impairment losses | (3,864) | (2,922) | | Net trade receivables | 155,194 | 164,961 | | Advances to suppliers | 20,570 | 9,679 | | Total trade and other receivables | 202,562 | 201,456 | Aging Analysis of Trade Receivables | Aging | June 30, 2025 (MYR thousand) | Dec 31, 2024 (MYR thousand) | | :--- | :--- | :--- | | 0 to 30 days | 88,755 | 107,435 | | 31 to 60 days | 14,121 | 22,089 | | 61 to 120 days | 43,023 | 31,975 | | Over 120 days | 13,159 | 6,384 | - The Group has paid deposits for several land acquisitions in Malaysia, which are pending completion as of the date of this announcement[30](index=30&type=chunk) [Trade and Other Payables](index=11&type=section&id=Trade%20and%20Other%20Payables) As of June 30, 2025, total trade and other payables decreased to MYR 50,301 thousand, mainly due to reductions in trade payables and accrued payroll liabilities | Item | June 30, 2025 (MYR thousand) | Dec 31, 2024 (MYR thousand) | | :--- | :--- | :--- | | Trade payables | 24,351 | 31,375 | | Accrued payroll liabilities | 6,932 | 8,132 | | Directors' loans | 8,124 | 8,037 | | Other payables and accrued expenses | 10,894 | 12,847 | | Total | 50,301 | 60,391 | Aging Analysis of Trade Payables | Aging | June 30, 2025 (MYR thousand) | Dec 31, 2024 (MYR thousand) | | :--- | :--- | :--- | | 0 to 30 days | 19,155 | 26,231 | | 31 to 60 days | 873 | 451 | | 61 to 120 days | 411 | 687 | | Over 120 days | 3,912 | 4,006 | Management Discussion and Analysis [Performance Overview and Outlook](index=12&type=section&id=Performance%20Overview%20and%20Outlook) H1 2025 revenue declined 16.2% to MYR 725.0 million, with net profit down 29.1% to MYR 7.2 million, driven by lower sales volume and prices of ferrous scrap metal - Revenue for the first half of 2025 was MYR **725.0 million**, a **16.2% decrease** from the same period in 2024, primarily due to a **7.9% decrease** in ferrous scrap metal sales volume and a **13.4% decline** in average selling price[34](index=34&type=chunk) - Net profit after tax for the period was MYR **7.2 million**, a **29.1% decrease** from the same period in 2024, mainly attributable to reduced revenue and squeezed gross profit margins[35](index=35&type=chunk) - Looking ahead, the market environment remains challenging, but the National Energy Transition Roadmap (NETR) and New Industrial Master Plan (NIMP 2030) are expected to provide moderate recovery support for scrap metal consumption[35](index=35&type=chunk) - The Group will continue to focus on improving operational efficiency, optimizing cost structure, strengthening procurement and trading strategies, and seeking opportunities for diversified product portfolios and geographical market expansion[36](index=36&type=chunk) [Financial Review](index=13&type=section&id=Financial%20Review) This section reviews H1 2025 financial performance, covering revenue, gross profit, expenses, taxation, profit attributable to owners, key ratios, working capital, and liquidity [Revenue](index=13&type=section&id=Revenue) H1 2025 revenue decreased 16.2% to MYR 725.0 million, mainly due to a 7.9% drop in ferrous scrap metal sales volume and a 13.4% fall in average selling price Ferrous Scrap Metal Sales Revenue and Volume | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Sales Volume (Metric Tons) | 434,385 | 471,580 | | Revenue (MYR thousand) | 628,143 | 787,399 | - The average selling price of ferrous scrap metal decreased by approximately **13.4%** from MYR **1,670.00 per metric ton** in H1 2024 to MYR **1,446.00 per metric ton** in H1 2025[39](index=39&type=chunk) [Gross Profit](index=13&type=section&id=Gross%20Profit) H1 2025 gross profit slightly decreased by MYR 0.1 million to MYR 61.7 million, but the gross profit margin improved from 7.1% to 8.5% - Gross profit slightly decreased by MYR **0.1 million** from MYR **61.8 million** in H1 2024 to MYR **61.7 million** in H1 2025, a reduction of approximately **0.1%**[41](index=41&type=chunk) - Gross profit margin improved from **7.1%** in H1 2024 to **8.5%** in H1 2025, primarily due to enhanced operational efficiency and improved cost management[41](index=41&type=chunk) [Distribution and Selling Expenses](index=14&type=section&id=Distribution%20and%20Selling%20Expenses) H1 2025 distribution and selling expenses increased 20.9% to MYR 31.5 million, driven by higher fuel prices and increased reliance on third-party freight services - Distribution and selling expenses increased to MYR **31.5 million** (H1 2024: MYR 26.0 million), an increase of approximately **20.9%**[42](index=42&type=chunk) - The increase was primarily attributable to rising fuel prices and fluctuations in the regional logistics market, driving up logistics and transportation costs[42](index=42&type=chunk) [Administrative Expenses](index=14&type=section&id=Administrative%20Expenses) H1 2025 administrative expenses decreased 5.6% to MYR 15.8 million, reflecting the Group's ongoing cost optimization measures and strict control over overheads - Administrative expenses were MYR **15.8 million** (H1 2024: MYR 16.7 million), a decrease of approximately **5.6%**[43](index=43&type=chunk) - The decrease was primarily due to the Group's continuous implementation of cost optimization measures, including stricter control over general overheads[43](index=43&type=chunk) [Taxation](index=14&type=section&id=Taxation) The effective tax rate for H1 2025 was 43.2%, higher than H1 2024's 37.1%, mainly due to non-recognition of deferred tax assets for unutilized tax losses - The effective tax rate for H1 2025 was **43.2%** (H1 2024: **37.1%**)[44](index=44&type=chunk) - The higher effective tax rate was primarily due to not recognizing deferred tax assets for unutilized tax losses, as it is currently considered improbable that these losses will be recovered[44](index=44&type=chunk) [Profit Attributable to Owners of the Company](index=14&type=section&id=Profit%20Attributable%20to%20Owners%20of%20the%20Company) H1 2025 profit attributable to owners was MYR 8.5 million, a decrease from MYR 11.5 million in H1 2024, consistent with the decline in profit before tax - Profit attributable to owners of the company for H1 2025 was MYR **8.5 million** (H1 2024: MYR 11.5 million), in line with the decrease in profit before tax[45](index=45&type=chunk) [Key Financial Ratios](index=14&type=section&id=Key%20Financial%20Ratios) As of June 30, 2025, the current ratio was 2.5x, debt-to-asset ratio 0.35x, inventory turnover 16 days, trade receivables turnover 41 days, and trade payables turnover 8 days | Metric | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Current Ratio | 2.5 times | 2.3 times | | Debt-to-Asset Ratio | 0.35 | 0.35 | Turnover Periods | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Inventory Turnover Period | 16 days | 16 days | | Trade Receivables Turnover Period | 41 days | 38 days | | Trade Payables Turnover Period | 8 days | 10 days | [Working Capital](index=15&type=section&id=Working%20Capital) H1 2025 working capital improved to MYR 172.1 million, with trade receivables turnover slightly up to 41 days and trade payables turnover down to 8 days - Working capital was MYR **172.1 million** (December 31, 2024: MYR 164.7 million)[49](index=49&type=chunk) - The trade receivables turnover period slightly increased to **41 days** in H1 2025, while the trade payables turnover period decreased to **8 days**, due to improved payment terms negotiated with suppliers[48](index=48&type=chunk) [Liquidity and Financial Resources](index=15&type=section&id=Liquidity%20and%20Financial%20Resources) As of June 30, 2025, total equity attributable to owners was MYR 246.9 million, with total borrowings of MYR 80.4 million, indicating sufficient liquidity for operations and expansion - As at June 30, 2025, the total equity attributable to owners of the Company was MYR **246.9 million**[49](index=49&type=chunk) - The Group's total borrowings as at June 30, 2025, amounted to MYR **80.4 million**, primarily utilized for the procurement of ferrous scrap metal and capital expenditures[50](index=50&type=chunk) - The Group has sufficient liquidity and financial resources to meet working capital requirements and fund budgeted expansion plans for the next twelve months[49](index=49&type=chunk) [Material Acquisitions and Disposals](index=15&type=section&id=Material%20Acquisitions%20and%20Disposals) For the six months ended June 30, 2025, the Group had no material acquisitions or disposals of subsidiaries, associates, or joint ventures - For the first six months ended June 30, 2025, the Group had no material acquisitions or disposals of subsidiaries, associates, or joint ventures[51](index=51&type=chunk) [Pledged Assets](index=15&type=section&id=Pledged%20Assets) As of June 30, 2025, the Group pledged assets totaling MYR 59,537 thousand, including property, plant and equipment, and bank deposits, to secure bank borrowings | Category of Pledged Assets | June 30, 2025 (MYR thousand) | Dec 31, 2024 (MYR thousand) | | :--- | :--- | :--- | | Property, plant and equipment | 10,671 | 5,183 | | Right-of-use assets | 18,576 | 18,723 | | Investment properties | 5,233 | 5,262 | | Deposits for land acquisition | 17,636 | 17,636 | | Pledged bank deposits | 7,421 | 7,331 | | Total | 59,537 | 54,135 | [Contingent Liabilities](index=16&type=section&id=Contingent%20Liabilities) As of June 30, 2025, the Group had no material contingent liabilities - The Group had no material contingent liabilities as at June 30, 2025 (as at December 31, 2024: nil)[54](index=54&type=chunk) [Capital Commitments](index=16&type=section&id=Capital%20Commitments) As of June 30, 2025, the Group's capital commitments for property, plant and equipment acquisitions were MYR 26.5 million, a decrease from MYR 28.6 million at year-end 2024 - As at June 30, 2025, the Group's capital commitments to banks for the acquisition of property, plant and equipment amounted to MYR **26.5 million** (as at December 31, 2024: MYR 28.6 million)[55](index=55&type=chunk) [Risk Management](index=16&type=section&id=Risk%20Management) The Group manages market, credit, and liquidity risks, with a 2.4% expected loss rate for trade receivables in H1 2025, despite concentration of credit risk from ferrous scrap metal customers - The Group faces market risks (foreign exchange risk and interest rate risk), credit risk, and liquidity risk in the ordinary course of its business[56](index=56&type=chunk) - The Group manages credit risk related to cash and bank balances and pledged bank deposits by transacting only with reputable commercial banks[57](index=57&type=chunk) - For the six months ended June 30, 2025, the expected loss rate for trade receivables was **2.4%** (December 31, 2024: 1.7%)[57](index=57&type=chunk) - The Group has significant concentration of credit risk from customers of ferrous scrap metal, such as steel mills and ferrous metal trading companies, but the Directors consider the inherent credit risk to be low[58](index=58&type=chunk) [Events After Reporting Period](index=17&type=section&id=Events%20After%20Reporting%20Period) The Board is unaware of any significant events affecting the Group after June 30, 2025, up to the announcement date, requiring disclosure - Other than as disclosed in this announcement, the Board is not aware of any significant events affecting the Group that occurred after June 30, 2025, and up to the date of this announcement, which require disclosure[59](index=59&type=chunk) Other Information [Employees and Remuneration](index=18&type=section&id=Employees%20and%20Remuneration) As of June 30, 2025, the Group had 354 employees in Malaysia, with total staff costs increasing 5.4% to MYR 17.6 million due to salary adjustments - The Group had **354 employees** in Malaysia as at June 30, 2025 (June 30, 2024: 374 employees)[61](index=61&type=chunk) - For the six months ended June 30, 2025, total staff costs and related expenses amounted to MYR **17.6 million**, a **5.4% increase** from the same period in 2024, primarily due to salary adjustments[61](index=61&type=chunk) - The Group provides regular training to its employees to enhance their skills and knowledge[61](index=61&type=chunk) [Pre-emptive Rights](index=18&type=section&id=Pre-emptive%20Rights) Neither the Company's articles of association nor Cayman Islands law provides for pre-emptive rights, not requiring new share offers to existing shareholders proportionally - Neither the Company's articles of association nor Cayman Islands law provides for pre-emptive rights, not requiring the Company to offer new shares to existing shareholders in proportion to their shareholdings[62](index=62&type=chunk) [Purchase, Redemption or Sale of the Company's Listed Securities](index=18&type=section&id=Purchase%2C%20Redemption%20or%20Sale%20of%20the%20Company%27s%20Listed%20Securities) For the six months ended June 30, 2025, neither the Company nor its subsidiaries purchased, sold, or redeemed any listed securities, nor held any treasury shares - For the six months ended June 30, 2025, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[63](index=63&type=chunk) - In the first half of 2025, neither the Company nor any of its subsidiaries held any treasury shares[63](index=63&type=chunk) [Interim Dividend](index=18&type=section&id=Interim%20Dividend) The Board did not declare any dividend for the first half of 2025, consistent with the prior year period - The Board did not declare any dividend for the first half of 2025 (H1 2024: nil)[64](index=64&type=chunk) [Sufficiency of Public Float](index=18&type=section&id=Sufficiency%20of%20Public%20Float) As of H1 2025 and the announcement date, the public continuously held at least 25% of the Company's issued share capital, meeting Listing Rules requirements - As of H1 2025 and the date of this announcement, the public has continuously held at least **25%** of the Company's total issued share capital, complying with the minimum public float percentage required by the Listing Rules[65](index=65&type=chunk) [Corporate Governance](index=19&type=section&id=Corporate%20Governance) The Company adopted the Corporate Governance Code, with a deviation from C.2.1 (separation of Chairman and CEO roles), believing the combined role benefits management and business development - The Company has adopted the principles and code provisions of the Corporate Governance Code set out in Appendix C1 of the Listing Rules, with a deviation from code provision C.2.1 (separation of roles of chairman and chief executive)[66](index=66&type=chunk) - The Board believes that combining the roles of Chairman and Chief Executive Officer under Dato' Sia Kok Chin is beneficial for the Group's management and business development, providing strong and consistent leadership[66](index=66&type=chunk) [Standard Code for Securities Transactions](index=19&type=section&id=Standard%20Code%20for%20Securities%20Transactions) The Company adopted the Standard Code for Securities Transactions, with all Directors confirming compliance and no non-compliance by senior management during the review 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 as the code of conduct for securities transactions by Directors and senior management of the Company[67](index=67&type=chunk) - All Directors confirmed their compliance with the Standard Code throughout the review period, and the Company was not aware of any non-compliance by the Group's senior management during the review period[67](index=67&type=chunk) [Audit and Risk Management Committee and Review of Financial Statements](index=19&type=section&id=Audit%20and%20Risk%20Management%20Committee%20and%20Review%20of%20Financial%20Statements) The Audit and Risk Management Committee reviewed H1 2025 condensed consolidated financial information with management, including accounting principles, internal controls, and financial reporting - The Company's Audit and Risk Management Committee has reviewed the condensed consolidated financial information for H1 2025 with management, including the accounting principles and practices adopted by the Group, and discussed internal controls and financial reporting matters[68](index=68&type=chunk) [Publication of Announcement and Board Members](index=20&type=section&id=Publication%20of%20Announcement%20and%20Board%20Members) This announcement is published on the HKEX and Company websites, with the Board comprising five executive directors (including Chairman/CEO) and three independent non-executive directors - This announcement is published on the HKEX website (www.hkexnews.hk) and the Company's website (www.henghup.com)[69](index=69&type=chunk) - The Board of Directors comprises five executive directors (Dato' Sia Kok Chin as Chairman and Chief Executive Officer) and three independent non-executive directors[69](index=69&type=chunk)

[Company Overview](index=1&type=section&id=Company%20Overview) This section provides a financial overview and management's discussion of the company's performance, highlighting revenue growth, AIDC data center energy storage as a key driver, and increased R&D investment [Financial Highlights](index=1&type=section&id=Financial%20Highlights) For the six months ended June 30, 2025, the company's revenue increased by 26.2% year-on-year to RMB 2,246.3 million, gross profit slightly increased by 0.4%, but profit for the period and profit attributable to owners of the parent both decreased by 2.7%, with basic earnings per share at RMB 0.45 截至2025年6月30日止六個月财务摘要 | Metric | 2025 (RMB million) | 2024 (RMB million) | Change | | :--- | :--- | :--- | :--- | | Revenue | 2,246.3 | 1,779.8 | +26.2% | | Gross Profit | 335.7 | 334.3 | +0.4% | | Profit for the Period | 160.6 | 165.0 | –2.7% | | Profit Attributable to Owners of the Parent | 160.6 | 165.0 | –2.7% | | Basic Earnings Per Share (RMB) | 0.45 | 0.46 | - | [Management Discussion and Analysis](index=2&type=section&id=Management%20Discussion%20and%20Analysis) As an AIDC data center and communication energy storage new energy technology enterprise, the company achieved good revenue growth and improving profitability during the reporting period, with AIDC data center energy storage becoming the core growth engine and increased R&D investment - The company is committed to providing 'connectivity + computing power' underlying energy solutions for the AI computing era, demonstrating good revenue growth and gradually improving profitability during the reporting period[4](index=4&type=chunk) [Overall Revenue Scale and Growth Performance](index=2&type=section&id=Overall%20Revenue%20Scale%20and%20Growth%20Performance) During the reporting period, the company achieved operating revenue of RMB 2,246.3 million, a 26.2% increase year-on-year, demonstrating robust business development resilience - During the reporting period, the company's operating revenue reached **RMB 2,246.3 million**, a year-on-year increase of **26.2%**[4](index=4&type=chunk) [AIDC Data Center Energy Storage Business: Core Growth Engine, Reshaping Revenue Structure](index=2&type=section&id=AIDC%20Data%20Center%20Energy%20Storage%20Business%3A%20Core%20Growth%20Engine%2C%20Reshaping%20Revenue%20Structure) AIDC data center energy storage business revenue reached RMB 1,028 million, accounting for 47.2% of total revenue, becoming the company's largest revenue source for the first time, marking a successful business transformation towards new AIDC energy storage and expected to boost overall gross margin - AIDC data center business revenue reached **RMB 1,028 million**, accounting for **47.2%** of the company's total revenue, surpassing traditional communication energy storage business for the first time to become the largest revenue source[5](index=5&type=chunk) - The high value-added nature of AIDC data center energy storage products is expected to drive an increase in the company's overall gross margin[5](index=5&type=chunk) [Continued Increase in R&D Investment](index=2&type=section&id=Continued%20Increase%20in%20R%26D%20Investment) During the reporting period, the company's R&D expenses increased by 28.7% year-on-year, focusing on AIDC data center energy storage, new battery technologies, and smart energy management to achieve multi-dimensional value breakthroughs - R&D expenses increased by **28.7%** year-on-year during the reporting period, focusing on core areas such as AIDC data center energy storage, new battery technologies, and smart energy management[5](index=5&type=chunk) [Industry and Technology Trends](index=3&type=section&id=Industry%20and%20Technology%20Trends) This section analyzes the explosive growth in global AIDC computing demand, supportive national policies, advancements in 5G and AI integration in communication, and the rapid expansion of the new energy storage market, alongside key battery and intelligent management technology innovations [Industry Overview](index=3&type=section&id=Industry%20Overview) Global and domestic AIDC computing demand is surging, driving massive data center construction, with major cloud vendors significantly increasing capital expenditures, while national policies support energy storage development, making it a 'rigid demand' for data centers [Global AIDC Computing Demand Growth](index=3&type=section&id=Global%20AIDC%20Computing%20Demand%20Growth) Global AIDC computing demand is set to explode in 2025, driving large-scale data center construction, with four major overseas cloud vendors increasing Q2 capital expenditures by 64% to $95.8 billion, primarily for AIDC data centers - Global AIDC computing demand is experiencing explosive growth in 2025, driving large-scale data center construction[6](index=6&type=chunk) - The four major overseas cloud vendors' Q2 2025 capital expenditures totaled **$95.8 billion**, a year-on-year increase of **64%**, primarily directed towards AIDC data center construction[6](index=6&type=chunk) [Accelerated Development of Domestic AIDC Market](index=3&type=section&id=Accelerated%20Development%20of%20Domestic%20AIDC%20Market) Domestic market is accelerating, with Alibaba and Tencent focusing over RMB 100 billion in capital expenditure on AIDC data centers, ByteDance projecting over RMB 150 billion in AIDC capital expenditure for 2025, and major telecom operators significantly increasing computing power investments - Leading domestic cloud vendors Alibaba and Tencent have explicitly committed over **RMB 100 billion** in 2025 capital expenditure to AIDC data centers[7](index=7&type=chunk) - ByteDance's 2025 AIDC data center capital expenditure is projected to exceed **RMB 150 billion**, a year-on-year increase of **60%**[7](index=7&type=chunk) - The three major telecom operators have significantly increased their computing power investment proportion, with China Mobile reaching **25%**, and China Unicom and China Telecom growing by **28%** and **22%** year-on-year, respectively[7](index=7&type=chunk) [National Policy Support](index=4&type=section&id=National%20Policy%20Support) Driven by AI computing demand and 'dual carbon' goals, national policies are promoting energy storage systems as a 'rigid demand' for data centers, with specific incentives for configuring new energy storage technologies - The national level has established a multi-tiered policy support system for data center energy storage, elevating energy storage systems from 'optional configuration' to 'rigid demand'[8](index=8&type=chunk) - The 'Action Plan for High-Quality Development of New Energy Storage Manufacturing' explicitly proposes for the first time to 'promote the configuration of new energy storage in key areas such as data centers and intelligent computing centers'[8](index=8&type=chunk) - Data centers configuring new energy storage technologies with a proportion of **10%** or more will receive bonus points in green data center evaluations[8](index=8&type=chunk) [Telecommunications Industry Development](index=4&type=section&id=Telecommunications%20Industry%20Development) In H1 2025, 5G technology deepened its integration with IoT and AI, becoming a core digital economy infrastructure, with the Asia-Pacific region leading 5G deployment and China maintaining its global lead in 5G base station scale - 5G technology's integration with IoT and AI is deepening, becoming a core infrastructure driving the digital economy[9](index=9&type=chunk) - As of June 2025, **39** commercial 5G mobile networks have been deployed in **9** countries across the Asia-Pacific region[10](index=10&type=chunk) - As of the end of H1 2025, China's total 5G base stations reached **4.549 million**, a net increase of **298,000** from the end of 2024[10](index=10&type=chunk) [New Energy Storage Market Scale](index=5&type=section&id=New%20Energy%20Storage%20Market%20Scale) From January to June 2025, China's new energy storage capacity increased by 42.6 GWh, a 27.5% year-on-year growth, while global battery energy storage system installations reached 86.7 GWh, with AIDC data centers becoming a core scenario for user-side energy storage - From January to June 2025, China's new energy storage added **42.6 GWh** of installed capacity, a year-on-year increase of **27.5%**[10](index=10&type=chunk) - From January to June 2025, global battery energy storage system installations totaled **86.7 GWh**, a year-on-year increase of **54%**[10](index=10&type=chunk) - AIDC data centers have become a core scenario for user-side energy storage due to their massive electricity demand[10](index=10&type=chunk) [Technology Development Trends](index=5&type=section&id=Technology%20Development%20Trends) Battery technology is diversifying with the emergence of new sodium-ion batteries, exemplified by the company's mass-produced communication low-temperature smart sodium-ion battery system, while intelligent management technologies like AI-powered energy storage systems enhance performance and reliability [Diversified Innovation in Battery Technology](index=5&type=section&id=Diversified%20Innovation%20in%20Battery%20Technology) Beyond lead-acid and lithium-ion battery upgrades, new technologies like sodium-ion batteries are emerging, with the company's jointly developed communication low-temperature smart sodium-ion battery system achieving mass production, capable of -30℃ operation and over 4,000 cycles - New battery technologies such as sodium-ion batteries are gradually emerging[11](index=11&type=chunk) - The company, in collaboration with Tsinghua University, has achieved mass production of China's first communication low-temperature smart sodium-ion battery system, capable of normal charging and discharging at **-30℃** with a cycle life exceeding **4,000** times[11](index=11&type=chunk) [Enhancement of Intelligent Management Technology](index=6&type=section&id=Enhancement%20of%20Intelligent%20Management%20Technology) As energy storage systems grow in scale and complexity, intelligent management technologies like the AI Smart Eye system are crucial for comprehensive smart protection and real-time monitoring of battery cells, modules, and systems, enhancing operational efficiency and safety - Intelligent management technology is crucial for enhancing the performance and reliability of energy storage systems[12](index=12&type=chunk) - Platforms like the Energy Storage AI Smart Eye system provide comprehensive intelligent protection and real-time monitoring for energy storage systems across 'cell-module-system' dimensions[12](index=12&type=chunk) [Performance Review](index=6&type=section&id=Performance%20Review) This section reviews the company's performance across AIDC data center energy storage, communication energy storage, and power energy storage businesses, highlighting significant revenue growth, market expansion, and production capacity enhancements [AIDC Data Center Energy Storage Business](index=6&type=section&id=AIDC%20Data%20Center%20Energy%20Storage%20Business) AIDC data center energy storage is a core strategic focus, achieving RMB 1.028 billion in sales revenue, a 113.1% year-on-year increase, with successful expansion into European and Southeast Asian markets, securing overseas operator orders, and providing exclusive solutions for a leading domestic internet company [Performance Growth and Market Expansion](index=6&type=section&id=Performance%20Growth%20and%20Market%20Expansion) During the reporting period, the company's AIDC data center battery and system business achieved sales revenue of RMB 1.028 billion, a substantial 113.1% year-on-year increase, successfully penetrating overseas markets in Europe and Southeast Asia - AIDC data center battery and system business sales revenue reached **RMB 1.028 billion**, a substantial year-on-year increase of **113.1%**[13](index=13&type=chunk) - Products successfully broke through overseas market barriers, achieving market coverage in Europe and Southeast Asia[13](index=13&type=chunk) [Milestone Progress in High-Rate Lithium Battery Products](index=7&type=section&id=Milestone%20Progress%20in%20High-Rate%20Lithium%20Battery%20Products) The company's high-rate lithium battery products achieved four major breakthroughs in AIDC data centers: securing first overseas operator high-voltage lithium battery orders, entering key overseas colocation service providers, completing new product testing with overseas equipment manufacturers, and exclusively providing large-scale lithium battery solutions for a leading domestic internet company - Successfully secured the first overseas operator data center high-voltage lithium battery order, breaking down entry barriers in high-end overseas markets[14](index=14&type=chunk) - Achieved entry into key overseas AIDC data center colocation service providers, penetrating the core overseas hosting scenario supply chain[14](index=14&type=chunk) - Exclusively provided large-scale lithium battery solutions for a leading domestic internet company's AIDC data center, establishing a benchmark case in high-end domestic scenarios[15](index=15&type=chunk) [Capacity Building to Match Market Demand](index=7&type=section&id=Capacity%20Building%20to%20Match%20Market%20Demand) To meet AIDC data center energy storage demand, the company is advancing a 1 GWh high-rate lead-acid battery technical upgrade and expansion project and has completed technical upgrades for high-rate lithium battery cell production lines to enhance mass production efficiency and ensure sustained business growth - Implemented a **1 GWh** AIDC data center high-rate lead-acid battery technical upgrade and expansion project, strengthening the supply capacity of traditional advantageous products[16](index=16&type=chunk) - Completed technical upgrades for high-rate lithium battery cell production lines, improving mass production efficiency for new lithium battery products[16](index=16&type=chunk) [Communication Energy Storage Business](index=7&type=section&id=Communication%20Energy%20Storage%20Business) During the reporting period, the company's communication energy storage business revenue remained stable, with communication lithium battery product shipments increasing by 53.38% year-on-year, and significant overseas market expansion into major operator and tower company supply chains in the Middle East, Africa, and Central America - Communication energy storage business revenue remained stable overall, with communication lithium battery product shipments increasing significantly by **53.38%** year-on-year[17](index=17&type=chunk) - Significant breakthroughs in overseas markets, successfully entering the supply chains of major operators and tower companies in the Middle East, Africa, and Central America[17](index=17&type=chunk) [Power Energy Storage Business](index=8&type=section&id=Power%20Energy%20Storage%20Business) The company maintained its BNEF Tier 1 global energy storage vendor status, achieving multiple breakthroughs in power energy storage, including a GWh-level container energy storage strategic cooperation agreement with a large overseas new energy power station investor, and the successful commissioning of its self-built 2.5 GWh 314Ah lithium battery cell factory - The company continues to be listed as a **BNEF Tier 1** global energy storage vendor[18](index=18&type=chunk) - Signed a **GWh-level** container energy storage strategic cooperation agreement with a large overseas new energy power station investor, directly driving a significant year-on-year increase in power energy storage business orders[18](index=18&type=chunk) - The self-built **2.5 GWh** 314Ah lithium battery cell factory successfully commenced operations, strengthening product quality stability and cost control capabilities[18](index=18&type=chunk) - Revenue from new orders is expected to be gradually released in the second half of the reporting period, providing significant support for the company's full-year performance growth[18](index=18&type=chunk) [Technology Research and Development](index=9&type=section&id=Technology%20Research%20and%20Development) This section details the company's increased R&D investment, leading to innovative product launches in AIDC data center and power energy storage, and significant achievements in patent applications and product certifications [Continued Increase in R&D Investment](index=9&type=section&id=Continued%20Increase%20in%20R%26D%20Investment) During the reporting period, the company's R&D expenses increased by 28.7% year-on-year, providing solid support for technological innovation and product iteration, reinforcing its commitment to core technology autonomy and strengthening its competitive barriers - During the reporting period, the company's R&D expenses increased by **28.7%** year-on-year[19](index=19&type=chunk) [Core Technology and Product Innovation Achievements](index=9&type=section&id=Core%20Technology%20and%20Product%20Innovation%20Achievements) The company launched several innovative products in core areas like AIDC data center energy storage and power energy storage, including the PBSRD Digit 2.0 intelligent AI battery management system, the AIDC 'Jingwei' high-voltage lithium battery system, and a 5 MWh standardized energy storage system with semi-solid-state cell technology - Released the latest generation intelligent AI battery management system – Battery Digital Brain **PBSRD Digit 2.0**[20](index=20&type=chunk) - Innovatively launched the AIDC 'Jingwei' high-voltage lithium battery system and customized diversified solutions for AIDC data center 'source-grid-load-storage integration' scenarios[20](index=20&type=chunk) - Launched a new generation **5 MWh** standardized energy storage system adopting semi-solid-state cell technology and a **1P104S** structure[20](index=20&type=chunk) [Patent and Certification Breakthroughs](index=10&type=section&id=Patent%20and%20Certification%20Breakthroughs) During the reporting period, the company filed 65 new patent applications and received 10 patent grants, while multiple core products obtained authoritative domestic and international certifications, including UN38.3, EMC, IEC62619, UL9540A, GB36276–2023, and GB44240–2024 - During the reporting period, **65** new patent applications were filed, and **10** patents were granted (**3** of which were invention patents)[21](index=21&type=chunk) - AIDC intelligent computing center immersion high-rate lithium battery modules passed **UN38.3** certification, and immersion high-rate lithium battery systems passed **EMC** and **IEC62619** certifications[21](index=21&type=chunk) - AIDC data center high-rate lithium battery modules passed **UL9540A** certification; data center high-rate lithium battery system cabinets passed **8-intensity seismic testing**[21](index=21&type=chunk) - **314Ah** lithium iron phosphate cells and systems passed the latest national standards **GB36276–2023** and safety standard **GB44240–2024** certifications[21](index=21&type=chunk) [Future Outlook and Strategy](index=11&type=section&id=Future%20Outlook%20and%20Strategy) This section outlines the vast market potential of AIDC data center energy storage, the company's strategic advantages to capitalize on this growth, its commitment to new technology commercialization, cost control initiatives, and a core operating strategy centered on AIDC with multi-dimensional synergy [Broad Prospects for AIDC Data Center Energy Storage Market](index=11&type=section&id=Broad%20Prospects%20for%20AIDC%20Data%20Center%20Energy%20Storage%20Market) Frost & Sullivan predicts global AIDC data center energy storage new installed capacity will surge from 16.5 GWh in 2024 to 209.4 GWh in 2030, representing a compound annual growth rate of 52.7%, indicating immense market potential - Global AIDC data center energy storage new installed capacity is projected to increase from **16.5 GWh** in 2024 to **209.4 GWh** in 2030, with a compound annual growth rate of **52.7%**[22](index=22&type=chunk) [Company Leveraging Advantages to Benefit from Market Growth](index=11&type=section&id=Company%20Leveraging%20Advantages%20to%20Benefit%20from%20Market%20Growth) The company possesses technological, customer, and market share advantages in AIDC data center energy storage, positioning it to continuously benefit from rapid industry growth and solidify its market position - The company possesses significant advantages in technology, customer base, and market share within the AIDC data center energy storage sector[23](index=23&type=chunk) - The company's AIDC data center business revenue is expected to maintain high growth in the future, solidifying its market position[23](index=23&type=chunk) [New Technology Conversion and New Product Launches Enhance Competitiveness](index=11&type=section&id=New%20Technology%20Conversion%20and%20New%20Product%20Launches%20Enhance%20Competitiveness) The company's R&D achievements in lithium and sodium battery technologies will gradually translate into productivity, with continuous new product launches enriching the product line, meeting customer needs, enhancing market competitiveness and product added value, thereby driving overall gross margin improvement - The company's R&D achievements in new technologies such as lithium and sodium batteries will gradually translate into actual productivity and economic benefits[24](index=24&type=chunk) - The continuous launch of new products will enrich the product line, enhance market competitiveness and product added value, driving an increase in overall gross margin[24](index=24&type=chunk) [Multiple Measures to Advance Cost Control](index=12&type=section&id=Multiple%20Measures%20to%20Advance%20Cost%20Control) The company is implementing various measures, including optimizing supply chain management, deepening supplier collaborations, and continuous internal efficiency improvements, to enhance operational efficiency, reduce production and operating costs, and boost profitability and market competitive advantage - The company is enhancing operational efficiency and reducing production and operating costs through measures such as optimizing supply chain management, deepening cooperation with suppliers, and continuous internal potential tapping[25](index=25&type=chunk) [Core Operating Philosophy](index=12&type=section&id=Core%20Operating%20Philosophy) The company has formulated a core operating philosophy centered on 'AIDC with multi-dimensional synergy' to seize the explosive opportunities in AIDC data center energy storage in the AI era and consolidate its industry-leading position - The company has formulated a core operating philosophy centered on 'AIDC as the core, with multi-dimensional synergy' to seize the explosive opportunities in AIDC data center energy storage in the AI era[25](index=25&type=chunk) [Strengthening AIDC Core Strategic Position, Expanding Global Regional Market Coverage](index=12&type=section&id=Strengthening%20AIDC%20Core%20Strategic%20Position%2C%20Expanding%20Global%20Regional%20Market%20Coverage) The company will drive AIDC market expansion through a 'flagship products + regional deep cultivation' strategy, focusing on high-rate lithium batteries and immersion lithium iron phosphate battery modules, and leveraging its Malaysia factory and Singapore subsidiary to enhance delivery capabilities and penetration in Southeast Asian and European AIDC markets - Focus on promoting core AIDC products such as high-rate lithium batteries and immersion lithium iron phosphate battery modules, leveraging the demonstration effect of the first large-scale AIDC lithium battery project in China[25](index=25&type=chunk) - Utilize the Malaysia factory as a supply hub to accelerate the improvement of AIDC product delivery capabilities in Southeast Asia; leverage the Singapore subsidiary as a strategic fulcrum to deepen the penetration of AIDC energy storage products in the European market[25](index=25&type=chunk) [Accelerating Capacity and Technology Conversion, Advancing Overseas Localized Capacity Building](index=13&type=section&id=Accelerating%20Capacity%20and%20Technology%20Conversion%2C%20Advancing%20Overseas%20Localized%20Capacity%20Building) The company will ensure business growth through 'capacity efficiency + technology implementation + localized layout,' including full operation of the 1 GWh AIDC high-rate lead-acid battery technical upgrade project, enhancing large-scale production of high-rate lithium battery cells, standardizing diversified solutions, and accelerating the planning and implementation of new production facilities in Southeast Asia - Promote the **1 GWh** AIDC high-rate lead-acid battery technical upgrade and expansion project to achieve full capacity operation, enhancing the large-scale production capability of high-rate lithium battery cells[26](index=26&type=chunk) - Transform diversified solutions such as 'source-grid-load-storage integration' and 'new energy + storage' direct green power supply into standardized product modules[26](index=26&type=chunk) - Accelerate the planning and implementation of new production facilities in Southeast Asia, leveraging localized production to be closer to local supply chains and customer resources[26](index=26&type=chunk) [Deepening Technology Innovation Moat, Consolidating Product Leadership](index=13&type=section&id=Deepening%20Technology%20Innovation%20Moat%2C%20Consolidating%20Product%20Leadership) The company will continuously increase R&D investment to develop safer next-generation aqueous batteries, intrinsically safe solid-state batteries, and new energy storage thermal management systems for AIDC data centers, thereby strengthening its 'product leadership' advantage and ensuring differentiated competitiveness in the smart computing and green technology market - Increase R&D resource investment to develop safer next-generation aqueous batteries, intrinsically safe solid-state batteries, and new energy storage thermal management systems for AIDC data centers[27](index=27&type=chunk) [Synergistic Growth Across Multiple Business Lines, Building a 'One Core, Two Wings' Structure](index=14&type=section&id=Synergistic%20Growth%20Across%20Multiple%20Business%20Lines%2C%20Building%20a%20%27One%20Core%2C%20Two%20Wings%27%20Structure) The company will leverage AIDC data center energy storage as its core, synergistically developing communication and power energy storage businesses, upgrading communication lithium battery products, expanding into overseas telecom operator AIDC markets, and accelerating GWh-level container energy storage agreements and new AIDC 'backup power + energy storage' and 'direct green power' projects - With AIDC data center energy storage business as the core, synergistically develop communication and power energy storage businesses[28](index=28&type=chunk) - Promote the upgrade of communication lithium battery products towards high capacity and long lifespan, opening up overseas telecom operator AIDC data center markets[28](index=28&type=chunk) - Accelerate the implementation of **GWh-level** container energy storage agreements with large overseas new energy power station investors, and promote the implementation of new AIDC 'backup power + energy storage' and 'direct green power connection' projects[28](index=28&type=chunk) [Building a Global Service System, Upgrading Brand Value Output](index=14&type=section&id=Building%20a%20Global%20Service%20System%2C%20Upgrading%20Brand%20Value%20Output) The company will transition from 'product export' to 'integrated services,' establishing a Hong Kong platform to leverage its global capital hub and Belt and Road gateway advantages, while enhancing overseas customer service and delivery teams to provide customized technical support and O&M services, achieving integrated 'technology + product + service' output - The company will transition from 'product export' to 'integrated services,' establishing a Hong Kong platform to leverage its advantages as a 'global capital hub + Belt and Road gateway'[29](index=29&type=chunk) - Improve overseas customer service and delivery teams, providing customized technical support and O&M services, achieving integrated 'technology + product + service' output[29](index=29&type=chunk) [Operating Results and Financial Analysis](index=15&type=section&id=Operating%20Results%20and%20Financial%20Analysis) This section provides a detailed analysis of the company's financial performance, covering revenue breakdown by product and application, cost of sales, gross profit, operating expenses, finance costs, and overall profitability for the period [Revenue](index=15&type=section&id=Revenue) For the six months ended June 30, 2025, the company's revenue increased by 26.2% year-on-year to RMB 2,246.3 million, with lead-acid battery product sales growing by 40.0% and AIDC data center energy storage revenue significantly increasing by 113.1% - Revenue for the six months ended June 30, 2025, increased by **26.2%** year-on-year to **RMB 2,246.3 million**[30](index=30&type=chunk) [Revenue by Product and Application Scenario](index=15&type=section&id=Revenue%20by%20Product%20and%20Application%20Scenario) In H1 2025, lead-acid battery product sales reached RMB 1,612,845 thousand, up 40.0% year-on-year, while lithium-ion battery product sales decreased by 3.6%; AIDC data center energy storage revenue surged by 113.1% to RMB 1,028,000 thousand 按产品与应用场景划分的收入 (RMB thousand) | Metric | 2025 | 2024 | Y-o-Y Change | | :--- | :--- | :--- | :--- | | **By Product** | | | | | Lithium-ion Battery Product Sales | 566,883 | 588,007 | –3.6% | | Lead-acid Battery Product Sales | 1,612,845 | 1,152,430 | 40.0% | | Others | 66,525 | 39,402 | 68.8% | | **Total** | **2,246,253** | **1,779,839** | **26.2%** | | **By Application Scenario** | | | | | AIDC Data Center Energy Storage | 1,028,000 | 482,404 | 113.1% | | Communication Energy Storage | 968,304 | 973,016 | –0.5% | | Power Energy Storage (incl. Residential) | 87,492 | 176,983 | –50.6% | | Other Application Scenarios | 95,932 | 108,034 | –11.2% | | Others | 66,525 | 39,402 | 68.8% | | **Total** | **2,246,253** | **1,779,839** | **26.2%** | [Analysis of Lithium-ion and Lead-acid Battery Business Revenue](index=16&type=section&id=Analysis%20of%20Lithium-ion%20and%20Lead-acid%20Battery%20Business%20Revenue) Lithium-ion battery business revenue decreased by 3.6% year-on-year due to falling material prices despite a 27.6% increase in sales volume, while lead-acid battery business revenue grew by 40% driven by the booming AIDC data center market where lead-acid batteries are a primary backup power product - Lithium-ion battery business revenue decreased by **3.6%** year-on-year, primarily due to the continuous decline in lithium battery material prices, with the average price of domestic battery-grade lithium carbonate falling by **32.2%** year-on-year[33](index=33&type=chunk) - Lead-acid battery business revenue increased by **40%** year-on-year, mainly due to the rapid growth of the AIDC data center market, where lead-acid batteries are a primary backup power product due to their high safety[33](index=33&type=chunk) [Cost of Sales](index=16&type=section&id=Cost%20of%20Sales) The Group's cost of sales increased by 32.2% from RMB 1,445.5 million in H1 2024 to RMB 1,910.5 million in H1 2025, primarily due to increased sales volume of battery products - Cost of sales increased by **32.2%** from **RMB 1,445.5 million** in H1 2024 to **RMB 1,910.5 million** in H1 2025, primarily due to increased sales volume of battery products[34](index=34&type=chunk) [Gross Profit and Gross Margin](index=16&type=section&id=Gross%20Profit%20and%20Gross%20Margin) Gross profit slightly increased from RMB 334.3 million in H1 2024 to RMB 335.7 million in H1 2025, but gross margin decreased from 18.8% to 14.9%, mainly due to reduced contribution from higher-margin lithium-ion batteries and strategic price reductions, though June saw a sequential improvement 按产品用途划分的毛利及毛利率明细 (RMB thousand) | Product Category | 2025 Gross Profit | 2025 Gross Margin (%) | 2024 Gross Profit | 2024 Gross Margin (%) | | :--- | :--- | :--- | :--- | :--- | | Lithium-ion Battery Products | 108,173 | 19.1 | 152,991 | 26.0 | | Lead-acid Battery Products | 225,598 | 14.0 | 178,153 | 15.5 | | Others | 1,966 | 3.0 | 3,152 | 8.0 | | **Total** | **335,737** | **14.9** | **334,296** | **18.8** | - Gross margin decreased from **18.8%** in H1 2024 to **14.9%** in H1 2025, primarily due to reduced revenue contribution from higher-margin lithium-ion batteries and strategic price reductions[37](index=37&type=chunk) - Gross margin saw a sequential improvement in June, benefiting from stabilizing raw material prices, enhanced production scheduling efficiency, and an increased proportion of higher-margin product shipments[37](index=37&type=chunk) [Selling and Marketing Expenses](index=17&type=section&id=Selling%20and%20Marketing%20Expenses) Selling and marketing expenses increased from RMB 58.3 million in H1 2024 to RMB 65.9 million in H1 2025, but decreased as a percentage of sales revenue from 3.3% to 2.9%, driven by increased overseas market research, channel cooperation pilots, and localized service system establishment - Selling and marketing expenses increased from **RMB 58.3 million** in H1 2024 to **RMB 65.9 million** in H1 2025[38](index=38&type=chunk) - Selling and marketing expenses as a percentage of sales revenue decreased from **3.3%** in the prior period to **2.9%**[38](index=38&type=chunk) [Administrative Expenses](index=17&type=section&id=Administrative%20Expenses) Administrative expenses decreased from RMB 76.8 million in H1 2024 to RMB 51.9 million in H1 2025, primarily due to reduced employee remuneration resulting from optimized human resource allocation and improved operational efficiency of administrative departments - Administrative expenses decreased from **RMB 76.8 million** in H1 2024 to **RMB 51.9 million** in H1 2025[39](index=39&type=chunk) - The reduction in employee remuneration was primarily due to optimized human resource allocation and improved operational efficiency of administrative functional departments[39](index=39&type=chunk) [Research and Development Costs](index=18&type=section&id=Research%20and%20Development%20Costs) R&D expenses increased from RMB 49.2 million in H1 2024 to RMB 63.3 million in H1 2025, mainly due to increased investment in new product development for AIDC data center high-rate lithium-ion cells, immersion lithium iron phosphate batteries, and systems - R&D expenses increased from **RMB 49.2 million** in H1 2024 to **RMB 63.3 million** in H1 2025[40](index=40&type=chunk) - Primarily due to increased investment in new product development for AIDC data center high-rate lithium-ion cells, immersion lithium iron phosphate lithium-ion batteries, and systems[40](index=40&type=chunk) [Other Expenses](index=18&type=section&id=Other%20Expenses) Other expenses increased from RMB 9.7 million in H1 2024 to RMB 12.3 million in H1 2025, primarily due to higher property tax and land use tax expenses - Other expenses increased from **RMB 9.7 million** in H1 2024 to **RMB 12.3 million** in H1 2025, primarily due to increased property tax and land use tax expenses[41](index=41&type=chunk) [Finance Costs](index=18&type=section&id=Finance%20Costs) Finance costs increased from RMB 6.7 million in H1 2024 to RMB 14.4 million in H1 2025, mainly due to increased interest expenses from higher borrowings and lease liabilities related to Malaysian production facilities - Finance costs increased from **RMB 6.7 million** in H1 2024 to **RMB 14.4 million** in H1 2025[42](index=42&type=chunk) - The main reasons include increased interest expenses due to higher borrowings and increased interest on lease liabilities related to Malaysian production facilities[42](index=42&type=chunk) [Profit Before Tax](index=18&type=section&id=Profit%20Before%20Tax) The Group recorded a profit before tax of RMB 179.2 million in H1 2025, a decrease from RMB 188.2 million in H1 2024 - The Group recorded a profit before tax of **RMB 179.2 million** in H1 2025 (H1 2024: **RMB 188.2 million**)[43](index=43&type=chunk) [Income Tax Expense](index=18&type=section&id=Income%20Tax%20Expense) Income tax expense decreased from RMB 23.2 million in H1 2024 to RMB 18.6 million in H1 2025, primarily due to a reduction in the Group's taxable profit for the period - Income tax expense decreased from **RMB 23.2 million** in H1 2024 to **RMB 18.6 million** in H1 2025, primarily due to a reduction in the Group's taxable profit for the period[44](index=44&type=chunk) [Profit for the Period](index=18&type=section&id=Profit%20for%20the%20Period) The Group recorded a profit for the period of RMB 160.6 million in H1 2025, a decrease from RMB 165.0 million in H1 2024, with profit attributable to owners of the parent also at RMB 160.6 million - The Group recorded a profit for the period of **RMB 160.6 million** (H1 2024: **RMB 165.0 million**)[45](index=45&type=chunk) - Profit attributable to owners of the parent was **RMB 160.6 million** (H1 2024: **RMB 165.0 million**)[45](index=45&type=chunk) [Liquidity and Financial Resources](index=19&type=section&id=Liquidity%20and%20Financial%20Resources) This section details the Group's net current assets, cash position, bank borrowings, gearing ratio, foreign exchange fluctuation risks, and contingent liabilities, providing an overview of its financial health and risk exposure [Net Current Assets and Cash](index=19&type=section&id=Net%20Current%20Assets%20and%20Cash) As of June 30, 2025, the Group's net current assets were RMB 1,446.2 million (December 31, 2024: RMB 1,324.3 million), with cash and bank balances at RMB 605.7 million (December 31, 2024: RMB 395.2 million) - As of June 30, 2025, the Group's net current assets were **RMB 1,446.2 million** (December 31, 2024: **RMB 1,324.3 million**)[46](index=46&type=chunk) - Cash and bank balances amounted to **RMB 605.7 million** (December 31, 2024: **RMB 395.2 million**)[46](index=46&type=chunk) [Bank Borrowings](index=19&type=section&id=Bank%20Borrowings) As of June 30, 2025, the Group's bank borrowings totaled RMB 1,145.2 million (December 31, 2024: RMB 928.7 million), with RMB 246.3 million due after one year and the remainder repayable within one year, at effective interest rates ranging from 2.15% to 4.80% - As of June 30, 2025, the Group's bank borrowings amounted to **RMB 1,145.2 million** (December 31, 2024: **RMB 928.7 million**)[46](index=46&type=chunk) - Except for **RMB 246.3 million** of borrowings due after one year, all bank borrowings are repayable within one year[46](index=46&type=chunk) - The effective interest rate as of June 30, 2025, ranged from **2.15% to 4.80%**[46](index=46&type=chunk) [Gearing Ratio](index=19&type=section&id=Gearing%20Ratio) As of June 30, 2025, the Group's gearing ratio was 56.2% (December 31, 2024: 53.7%) - As of June 30, 2025, the Group's gearing ratio was **56.2%** (December 31, 2024: **53.7%**)[46](index=46&type=chunk) [Exchange Rate Fluctuation Risk](index=19&type=section&id=Exchange%20Rate%20Fluctuation%20Risk) The Group primarily transacts in RMB and USD, with RMB fluctuations influenced by China's political and economic conditions; while product sales use a price linkage mechanism to transfer currency risk to customers, foreign currency-denominated trade receivables still pose a risk during the credit period - The Group's principal businesses use RMB and USD for transactions, and the value of RMB against USD and other currencies may fluctuate[47](index=47&type=chunk) - The Group's product sales adopt a price linkage mechanism, largely transferring currency fluctuation risk to customers, but trade receivables denominated in foreign currencies may still carry this risk during the credit period[47](index=47&type=chunk) [Contingent Liabilities](index=19&type=section&id=Contingent%20Liabilities) As of June 30, 2025, the Group had no significant contingent liabilities (December 31, 2024: nil) - As of June 30, 2025, the Group had no significant contingent liabilities[48](index=48&type=chunk) [Other Financial Information](index=20&type=section&id=Other%20Financial%20Information) This section provides supplementary financial details, including information on pledged assets, capital commitments, material investments, acquisitions and disposals, the use of listing proceeds, and the interim dividend policy [Pledge of Assets](index=20&type=section&id=Pledge%20of%20Assets) Details regarding the pledge of assets are provided in Note 9 to the financial statements contained in this announcement - Details of the pledge of assets are set out in Note 9 to the financial statements contained in this announcement[49](index=49&type=chunk) [Capital Commitments](index=20&type=section&id=Capital%20Commitments) Details regarding capital commitments are provided in Note 12 to the financial statements contained in this announcement - Details of capital commitments are set out in Note 12 to the financial statements contained in this announcement[50](index=50&type=chunk) [Material Investments](index=20&type=section&id=Material%20Investments) As of June 30, 2025, the Group had no material investments valued at 5% or more of its total assets - As of June 30, 2025, the Group had no material investments valued at **5%** or more of its total assets[51](index=51&type=chunk) [Material Acquisitions and Disposals](index=20&type=section&id=Material%20Acquisitions%20and%20Disposals) The Group did not undertake any material acquisitions or disposals of subsidiaries, associates, or joint ventures during the period - The Group did not undertake any material acquisitions or disposals of subsidiaries, associates, or joint ventures during the period[52](index=52&type=chunk) [Use of Proceeds from Listing](index=20&type=section&id=Use%20of%20Proceeds%20from%20Listing) The company's shares were listed on the Stock Exchange on August 26, 2025, raising net proceeds of approximately HKD 756.3 million, which remain unused as of this announcement date and will be allocated as per the prospectus - The company's shares were listed on the Stock Exchange on August 26, 2025, with net proceeds of approximately **HKD 756.3 million**[53](index=53&type=chunk) - As of the date of this announcement, the proceeds have not been used and will be allocated according to the purposes set out in the company's prospectus dated August 18, 2025[53](index=53&type=chunk) [Interim Dividend](index=20&type=section&id=Interim%20Dividend) The Board of Directors does not recommend the payment of an interim dividend for the six months ended June 30, 2025 - The Board of Directors does not recommend the payment of an interim dividend for the six months ended June 30, 2025[54](index=54&type=chunk) [Interim Condensed Consolidated Financial Statements](index=21&type=section&id=Interim%20Condensed%20Consolidated%20Financial%20Statements) This section presents the interim condensed consolidated financial statements, including the statement of profit or loss, comprehensive income, financial position, changes in equity, and cash flows, providing a summary of the Group's financial performance and position [Interim Condensed Consolidated Statement of Profit or Loss](index=21&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss) For the six months ended June 30, 2025, the company reported revenue of RMB 2,246,253 thousand, gross profit of RMB 335,737 thousand, profit for the period of RMB 160,633 thousand, and basic earnings per share of RMB 0.45 中期簡明綜合損益表摘要 (RMB thousand) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Revenue | 2,246,253 | 1,779,839 | | Cost of Sales | (1,910,516) | (1,445,543) | | Gross Profit | 335,737 | 334,296 | | Other Income and Gains | 54,045 | 55,271 | | Selling and Marketing Expenses | (65,872) | (58,276) | | Administrative Expenses | (51,921) | (76,807) | | Research and Development Costs | (63,299) | (49,191) | | Net Impairment Losses on Financial and Contract Assets | (2,440) | (1,283) | | Other Expenses | (12,272) | (9,651) | | Finance Costs | (14,448) | (6,722) | | Share of Profit and Loss of an Associate | (316) | 596 | | Profit Before Tax | 179,214 | 188,233 | | Income Tax Expense | (18,581) | (23,245) | | Profit for the Period | 160,633 | 164,988 | | Basic Earnings Per Share Attributable to Owners of the Parent (RMB) | 0.45 | 0.46 | [Interim Condensed Consolidated Statement of Comprehensive Income](index=22&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) For the six months ended June 30, 2025, profit for the period was RMB 160,633 thousand, with other comprehensive income primarily from exchange differences on overseas operations of RMB 547 thousand, resulting in total comprehensive income for the period of RMB 161,180 thousand 中期簡明綜合全面收益表摘要 (RMB thousand) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Profit for the Period | 160,633 | 164,988 | | Other Comprehensive Income: Exchange Differences on Overseas Operations | 547 | (84) | | Total Comprehensive Income for the Period | 161,180 | 164,904 | | Attributable to Owners of the Parent | 161,180 | 164,904 | [Interim Condensed Consolidated Statement of Financial Position](index=23&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, total non-current assets were RMB 1,490,388 thousand, total current assets were RMB 4,210,056 thousand, total current liabilities were RMB 2,763,876 thousand, resulting in net current assets of RMB 1,446,180 thousand, and total equity of RMB 2,496,687 thousand 中期簡明綜合財務狀況表摘要 (RMB thousand) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Non-current Assets** | | | | Property, Plant and Equipment | 1,185,184 | 1,217,124 | | Total Non-current Assets | 1,490,388 | 1,520,511 | | **Current Assets** | | | | Inventories | 881,316 | 513,506 | | Trade and Bills Receivables | 2,371,477 | 2,318,281 | | Cash and Cash Equivalents | 605,734 | 395,234 | | Total Current Assets | 4,210,056 | 3,640,419 | | **Current Liabilities** | | | | Trade and Bills Payables | 1,314,797 | 973,979 | | Interest-bearing Bank and Other Borrowings | 898,938 | 673,333 | | Total Current Liabilities | 2,763,876 | 2,316,153 | | Net Current Assets | 1,446,180 | 1,324,266 | | **Non-current Liabilities** | | | | Interest-bearing Bank and Other Borrowings | 246,298 | 255,404 | | Total Non-current Liabilities | 439,881 | 457,316 | | **Total Equity** | **2,496,687** | **2,387,461** | [Interim Condensed Consolidated Statement of Changes in Equity](index=25&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) As of June 30, 2025, total equity attributable to owners of the parent was RMB 2,496,687 thousand, an increase from RMB 2,387,461 thousand as of December 31, 2024, primarily influenced by profit for the period and an increase in share-based compensation reserve 中期簡明綜合權益變動表摘要 (RMB thousand) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Share Capital | 358,269 | 358,269 | | Reserves | 2,138,418 | 2,029,192 | | **Total Equity** | **2,496,687** | **2,387,461** | | Profit for the Period | 160,633 | - | | Share-based Compensation Reserve | 8,952 | - | | Dividends | (60,906) | - | [Interim Condensed Consolidated Statement of Cash Flows](index=26&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) For the six months ended June 30, 2025, net cash flow from operating activities was RMB 506,804 thousand, net cash flow used in investing activities was RMB (51,274) thousand, and net cash flow used in financing activities was RMB (246,769) thousand, with cash and cash equivalents at period-end totaling RMB 605,734 thousand 中期簡明綜合現金流量表摘要 (RMB thousand) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Net Cash Flows from Operating Activities | 506,804 | 86,521 | | Net Cash Flows Used in Investing Activities | (51,274) | (67,652) | | Net Cash Flows Used in Financing Activities | (246,769) | (210,764) | | Increase/(Decrease) in Cash and Cash Equivalents | 208,761 | (191,895) | | Cash and Cash Equivalents at End of Period | 605,734 | 293,709 | [Notes to the Interim Condensed Consolidated Financial Statements](index=28&type=section&id=Notes%20to%20the%20Interim%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed notes to the interim condensed consolidated financial statements, covering company information, basis of preparation, operating segment data, revenue breakdown, profit before tax adjustments, income tax, dividends, earnings per share, property, plant and equipment, trade receivables and payables, commitments, contingent liabilities, fair value of financial instruments, and events after the reporting period [Company Information](index=28&type=section&id=Company%20Information) Shuangdeng Group Co., Ltd. was established in China on December 28, 2011, primarily engaged in R&D, manufacturing, and sales of energy storage batteries and systems, and was listed on the Main Board of The Stock Exchange of Hong Kong Limited on August 26, 2025 - Shuangdeng Group Co., Ltd. was established in China on December 28, 2011, primarily engaged in the research and development, manufacturing, and sales of energy storage battery and system products[62](index=62&type=chunk) - The company was listed on the Main Board of The Stock Exchange of Hong Kong Limited on August 26, 2025[63](index=63&type=chunk) [Basis of Preparation and Changes in Accounting Policies](index=28&type=section&id=Basis%20of%20Preparation%20and%20Changes%20in%20Accounting%20Policies) The interim condensed consolidated financial information is prepared in accordance with HKAS 34 Interim Financial Reporting and should be read in conjunction with the 2024 annual consolidated financial statements, with the amendment to HKAS 21 (Lack of Exchangeability) having no impact on the Group - The interim condensed consolidated financial information has been prepared in accordance with Hong Kong Accounting Standard 34 Interim Financial Reporting[64](index=64&type=chunk) - The amendment to HKAS 21 (Lack of Exchangeability) had no impact on the interim condensed consolidated financial information[66](index=66&type=chunk) [Operating Segment Information](index=29&type=section&id=Operating%20Segment%20Information) In H1 2025, revenue from Mainland China was RMB 1,845,680 thousand and overseas revenue was RMB 400,573 thousand, with non-current assets primarily in Mainland China, and revenue from a single customer A exceeding 10% of total revenue 来自外部客户的收入 (RMB thousand) | Region | 2025 | 2024 | | :--- | :--- | :--- | | Mainland China | 1,845,680 | 1,263,330 | | Overseas | 400,573 | 516,509 | | **Total Revenue** | **2,246,253** | **1,779,839** | 非流动资产 (RMB thousand) | Region | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Mainland China | 1,352,914 | 1,388,481 | | Overseas | 18,474 | 18,838 | | **Total Non-current Assets** | **1,371,388** | **1,407,319** | - For the six months ended June 30, 2025, revenue from a single customer A amounted to **RMB 231,434 thousand**, accounting for over **10%** of the Group's total revenue[69](index=69&type=chunk) [Notes to Revenue](index=30&type=section&id=Notes%20to%20Revenue) The Group's revenue primarily derives from sales of lithium-ion battery products, lead-acid battery products, and other items, all recognized at a point in time when goods are transferred, with contract liabilities expected to be recognized within one year totaling RMB 86,861 thousand as of June 30, 2025 收入分析 (RMB thousand) | Type of Goods or Services | 2025 | 2024 | | :--- | :--- | :--- | | Lithium-ion Battery Product Sales | 566,883 | 588,007 | | Lead-acid Battery Product Sales | 1,612,845 | 1,152,430 | | Others | 66,525 | 39,402 | | **Total** | **2,246,253** | **1,779,839** | - All revenue is recognized at a point in time when goods are transferred[69](index=69&type=chunk) - As of June 30, 2025, contract liabilities expected to be recognized within one year amounted to **RMB 86,861 thousand**[73](index=73&type=chunk) [Notes to Profit Before Tax](index=32&type=section&id=Notes%20to%20Profit%20Before%20Tax) The Group's profit before tax is derived after deducting various expenses, including cost of inventories sold of RMB 1,910,516 thousand, depreciation of property, plant and equipment of RMB 76,623 thousand, and R&D costs of RMB 26,653 thousand for H1 2025 税前溢利调整项目摘要 (RMB thousand) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Cost of Inventories Sold | 1,910,516 | 1,438,543 | | Depreciation of Property, Plant and Equipment | 76,623 | 53,969 | | Research and Development Costs | 26,653 | 16,604 | | Wages and Salaries | 146,447 | 148,271 | | Share-based Incentive Scheme Expenses | 4,634 | 9,106 | [Notes to Income Tax](index=33&type=section&id=Notes%20to%20Income%20Tax) Group members are subject to income tax in their respective jurisdictions, with Chinese subsidiaries generally at 25% but some, including the company, Shuangdeng Front, Shuangdeng Runyang, and Huifeng Juneng, enjoying a preferential 15% rate due to high-tech enterprise status, resulting in an income tax expense of RMB 18,581 thousand for H1 2025 - Chinese subsidiaries are subject to a corporate income tax rate of **25%**, but the company and certain subsidiaries enjoy a preferential tax rate of **15%** due to their high-tech enterprise qualifications[75](index=75&type=chunk) 所得税费用 (RMB thousand) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Current Income Tax – Mainland China | 19,494 | 23,457 | | Current Income Tax – Overseas | 258 | 7 | | Deferred Income Tax | (1,171) | (219) | | **Income Tax Expense for the Period** | **18,581** | **23,245** | [Notes to Dividends](index=34&type=section&id=Notes%20to%20Dividends) The Board of Directors declared a final dividend of RMB 0.170 per ordinary share for the six months ended June 30, 2025, totaling RMB 60,906 thousand - The Board of Directors declared a final dividend of **RMB 0.170** per ordinary share for the six months ended June 30, 2025[79](index=79&type=chunk) 股息 (RMB thousand) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Dividends | 60,906 | 73,803 | [Earnings Per Share Attributable to Owners of the Parent](index=34&type=section&id=Earnings%20Per%20Share%20Attributable%20to%20Owners%20of%20the%20Parent) Basic earnings per share is calculated as RMB 0.45 based on profit attributable to owners of the parent of RMB 160,633 thousand and a weighted average of 358,269,000 ordinary shares outstanding during the year, with no potentially dilutive ordinary shares outstanding during the reporting period 每股基本及摊薄盈利计算 (RMB thousand) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Profit Attributable to Ordinary Shareholders of the Parent | 160,633 | 164,988 | | Weighted Average Number of Ordinary Shares Outstanding During the Year | 358,269,000 | 358,269,000 | | Basic Earnings Per Share (RMB) | 0.45 | 0.46 | | Diluted Earnings Per Share (RMB) | 0.45 | 0.46 | - For the six months ended June 30, 2025, the Group had no potentially dilutive ordinary shares outstanding[80](index=80&type=chunk) [Notes to Property, Plant and Equipment](index=35&type=section&id=Notes%20to%20Property%2C%20Plant%20and%20Equipment) As of June 30, 2025, approximately RMB 423,596 thousand of the Group's property, plant and equipment were pledged as collateral for borrowings; in H1 2025, assets were purchased at a cost of RMB 45,432 thousand and assets with a net book value of RMB 1,374 thousand were disposed of, resulting in a net loss on disposal of RMB 309 thousand - As of June 30, 2025, property, plant and equipment with a net book value of approximately **RMB 423,596 thousand** were pledged as collateral for the Group's borrowings[83](index=83&type=chunk) - In H1 2025, the Group purchased assets at a cost of **RMB 45,432 thousand**[83](index=83&type=chunk) - Assets with a net book value of **RMB 1,374 thousand** were disposed of, resulting in a net loss on disposal of **RMB 309 thousand**[83](index=83&type=chunk) [Notes to Trade and Bills Receivables](index=35&type=section&id=Notes%20to%20Trade%20and%20Bills%20Receivables) As of June 30, 2025, the Group's total trade and bills receivables amounted to RMB 2,371,477 thousand, with RMB 1,961,565 thousand due within six months 贸易应收款项及应收票据账龄分析 (RMB thousand) | Aging | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Within 6 months | 1,961,565 | 2,002,842 | | 7 to 12 months | 302,321 | 207,905 | | 1 to 2 years | 101,124 | 100,448 | | 2 to 3 years | 5,439 | 6,132 | | 3 to 4 years | 1,028 | 954 | | **Total** | **2,371,477** | **2,318,281** | [Notes to Trade and Bills Payables](index=35&type=section&id=Notes%20to%20Trade%20and%20Bills%20Payables) As of June 30, 2025, the Group's total trade and bills payables amounted to RMB 1,314,797 thousand, all due within one year 贸易应付款项及应付票据账龄分析 (RMB thousand) | Aging | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Within 1 year | 1,314,797 | 973,979 | [Notes to Commitments](index=36&type=section&id=Notes%20to%20Commitments) As of June 30, 2025, the Group had contracted but unprovided commitments for the purchase of property, plant and equipment amounting to RMB 36 thousand 合約承擔 (RMB thousand) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Purchase of Property, Plant and Equipment | 36 | 160,414 | [Notes to Contingent Liabilities](index=36&type=section&id=Notes%20to%20Contingent%20Liabilities) As of June 30, 2025, the Group had no contingent liabilities - As of June 30, 2025, the Group had no contingent liabilities[87](index=87&type=chunk) [Fair Value and Fair Value Hierarchy of Financial Instruments](index=36&type=section&id=Fair%20Value%20and%20Fair%20Value%20Hierarchy%20of%20Financial%20Instruments) The Group's management estimates that the fair values of most financial instruments approximate their carrying amounts, with fair values of unlisted investments estimated using discounted cash flow models, and as of June 30, 2025, debt investments at fair value through other comprehensive income and derivative financial instruments totaled RMB 15,560 thousand, all classified as Level 2 - The Group's management estimates that the fair values of financial instruments such as cash and cash equivalents, trade and bills receivables approximate their carrying amounts[88](index=88&type=chunk) - The fair values of unlisted investments are estimated using a discounted cash flow valuation model based on market interest rates for instruments with similar terms and risks[89](index=89&type=chunk) 按公平值计量的资产 (RMB thousand) | Item | Level 1 | Level 2 | Level 3 | Total | | :--- | :--- | :--- | :--- | :--- | | Debt Investments at Fair Value Through Other Comprehensive Income | – | 14,860 | – | 14,860 | | Derivative Financial Instruments | – | 700 | – | 700 | | **Total** | **–** | **15,560** | **–** | **15,560** | [Events After the Reporting Period](index=38&type=section&id=Events%20After%20the%20Reporting%20Period) On August 26, 2025, the company successfully listed on the Stock Exchange after issuing 58,557,000 H shares at HKD 14.51 per share, with no other significant events known since the end of the reporting period - On August 26, 2025, the company successfully listed on the Stock Exchange after issuing **58,557,000 H shares** at a price of **HKD 14.51** per share[95](index=95&type=chunk) - There were no other significant events after the reporting period from the end of the reporting period up to the date of this announcement[95](index=95&type=chunk) [Other Data and Corporate Governance](index=39&type=section&id=Other%20Data%20and%20Corporate%20Governance) This section covers the Group's employee information, compliance with corporate governance codes, the combined roles of Chairman and CEO, standard code for securities transactions, absence of listed securities transactions, the Audit Committee's role, publication of interim results, and the composition of the Board of Directors [Employees](index=39&type=section&id=Employees) As of June 30, 2025, the Group had 2,292 employees, with total employee benefit expenses of RMB 151.5 million for the period, and the company has established a share option scheme and provides training and incentives to enhance staff skills and team spirit - As of June 30, 2025, the Group had **2,292** employees[96](index=96&type=chunk) - Employee benefit expenses (including directors' emoluments) for the period totaled **RMB 151.5 million** (H1 2024: **RMB 159.3 million**)[96](index=96&type=chunk) - The Group has established a share option scheme for selected participants and encourages employees to undergo training to enhance occupational safety knowledge and team spirit[96](index=96&type=chunk) [Compliance with Corporate Governance Code](index=39&type=section&id=Compliance%20with%20Corporate%20Governance%20Code) The Group is committed to high corporate governance standards; the Corporate Governance Code was not applicable during the reporting period as the company was not yet listed, but it has complied with all code provisions and adopted most recommended best practices since its listing date - The Group is committed to maintaining high standards of corporate governance to safeguard shareholders' interests and enhance corporate value and accountability[97](index=97&type=chunk) - As the company's shares were not listed on the Stock Exchange as of June 30, 2025, the Corporate Governance Code was not applicable during the reporting period[97](index=97&type=chunk) - From the listing date up to the date of this announcement, the company has complied with all code provisions of the Corporate Governance Code and adopted most of the recommended best practices contained therein[97](index=97&type=chunk) [Chairman and Chief Executive Officer](index=40&type=section&id=Chairman%20and%20Chief%20Executive%20Officer) Dr. Yang Rui serves as both Chairman and CEO, responsible for overall strategic planning, execution, operation, and management, an arrangement the Board believes ensures consistent leadership and efficient strategic planning, balanced by a strong independent board composition - Dr. Yang Rui serves concurrently as the Chairman of the Board and the Group's Chief Executive Officer, responsible for the company's overall strategic planning, decision-making, execution, operations, and management[98](index=98&type=chunk) - The Board believes this arrangement facilitates consistent leadership and more effective and efficient overall strategic planning for the Group[98](index=98&type=chunk) - The Board comprises three executive directors, one non-executive director, and three independent non-executive directors, demonstrating strong independence[98](index=98&type=chunk) [Standard Code for Securities Transactions](index=40&type=section&id=Standard%20Code%20for%20Securities%20Transactions) The Listing Rules' standard code for directors' securities transactions was not applicable during the reporting period as the company was not yet listed; however, since listing, the company has adopted and all directors have confirmed compliance with the Standard Code set out in Appendix 10 of the Listing Rules - As the company was not listed on the Stock Exchange during the reporting period, the provisions under the Listing Rules concerning directors' compliance with the Standard Code were not applicable[99](index=99&type=chunk) - Following its listing, the company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix 10 of the Listing Rules[99](index=99&type=chunk) - All directors have confirmed compliance with the standards set out in the Model Code from the listing date up to the date of this announcement[99](index=99&type=chunk) [Purchase, Sale or Redemption of Listed Securities](index=41&type=section&id=Purchase%20Sale%20or%20Redemption%20of%20Listed%20Securities) As of June 30, 2025, neither the company nor any of its subsidiaries had purchased, sold, or redeemed any of the company's listed securities, as the company's shares were not yet li

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不負責，對其準確性 或完整性亦不發表任何聲明，並明確表示概不會就本公告全部或任何部分內容而產生或因倚賴 該等內容而引致的任何損失承擔任何責任。 Jiaxin International Resources Investment Limited 佳鑫國際資源投資有限公司 （於香港註冊成立的有限公司） （股份代號： 3858） 截至2025年6月30日止六個月中期業績 董事會欣然宣佈本集團於期間內的未經審核簡明綜合中期業績，過往期間的比較 數字如下： 簡明綜合全面虧損表 | | | 截至6月30日止六個月 | | | --- | --- | --- | --- | | | 附註 | 2025年 | 2024年 | | | | 千港元 | 千港元 | | | | （未經審核） | （未經審核） | | 收入 | 3 | 126,313 | – | | 銷售成本 | 4 | (108,332) | – | | 毛利 | | 17,981 | – | | 行政開支 | 4 | (60,499) | (33,241) | | 其他虧損淨額 | 5 | (27 ...

[Condensed Consolidated Financial Statements](index=1&type=section&id=Condensed%20Consolidated%20Financial%20Statements) This section presents the group's condensed consolidated financial statements, including the statement of profit or loss and financial position [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=1&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For the six months ended June 30, 2025, the Group's revenue decreased by 41.5% to HK$15,141 thousand, while loss before tax narrowed by 34.2% to HK$8,384 thousand, and loss for the period narrowed by 32.7% to HK$10,399 thousand. Basic and diluted loss per share expanded to 1.56 HK cents from 1.13 HK cents, with exchange gains from foreign operations reversing last year's loss Revenue and Loss Overview (For the six months ended June 30) | Metric | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Year-on-year Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 15,141 | 25,885 | -41.5% | | Loss before tax | (8,384) | (12,739) | -34.2% | | Loss for the period | (10,399) | (15,426) | -32.7% | | Loss attributable to owners of the Company | (10,407) | (7,556) | +37.7% | | Basic and diluted loss per share | (1.56) HK cents | (1.13) HK cents | +38.1% | Other Comprehensive Income (For the six months ended June 30) | Metric | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Exchange differences arising from translation of foreign operations | 10,269 | (8,811) | [Condensed Consolidated Statement of Financial Position](index=3&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the Group's total assets slightly increased to HK$3,681,801 thousand, while net current assets decreased to HK$1,784,748 thousand, and net assets slightly declined to HK$928,091 thousand, driven by a significant increase in current liabilities Assets and Liabilities Overview (As of June 30) | Metric | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Non-current assets | 138,956 | 135,961 | +2.2% | | Current assets | 3,542,845 | 3,376,963 | +4.9% | | Current liabilities | 1,758,097 | 1,220,289 | +44.1% | | Net current assets | 1,784,748 | 2,156,674 | -17.2% | | Net assets | 928,091 | 928,221 | -0.01% | [Notes to the Condensed Interim Financial Information](index=5&type=section&id=Notes%20to%20the%20Condensed%20Interim%20Financial%20Information) This section provides detailed notes to the condensed interim financial information, covering company details, accounting policies, segment data, and specific financial line items [1. Company and Group Information](index=5&type=section&id=1.%20Company%20and%20Group%20Information) Datang West Market Silk Road Investment Holding Company Limited is a Bermuda-incorporated, HKEX-listed company primarily engaged in auction services, wine sales, and property investment - Company registered in Bermuda, listed on the Hong Kong Stock Exchange[6](index=6&type=chunk) - Principal business activities include providing auction and related services, selling wine, and property investment and development[7](index=7&type=chunk)[8](index=8&type=chunk) [2. Basis of Preparation and Accounting Policies](index=5&type=section&id=2.%20Basis%20of%20Preparation%20and%20Accounting%20Policies) Interim financial information is prepared under HKAS 34 and HKEX Listing Rules, with new/revised HKFRSs having no material impact, despite significant uncertainties regarding the Group's going concern ability - Preparation standards: Hong Kong Accounting Standard 34 Interim Financial Reporting issued by the HKICPA and applicable disclosure requirements of Appendix D2 to the Listing Rules of the Stock Exchange of Hong Kong Limited[7](index=7&type=chunk) - New/revised HKFRSs: Adoption of the "Lack of Exchangeability" amendments had no material impact on the Group's unaudited condensed interim financial information[9](index=9&type=chunk) - Significant uncertainties regarding the going concern assumption: - The Group incurred a net loss of approximately **HK$10,399,000** for the six months ended June 30, 2025[10](index=10&type=chunk) - As of June 30, 2025, the Group had total interest-bearing borrowings of approximately **HK$1,434,251,000**, with current interest-bearing borrowings of approximately **HK$438,638,000**[10](index=10&type=chunk) - The current portion of other payables was approximately **HK$678,218,000**, including refund deposits of approximately **HK$454,777,000** and related settlement fees of approximately **HK$26,165,000**, while cash and cash equivalents as of June 30, 2025, were only approximately **HK$8,704,000**[10](index=10&type=chunk) - As of and subsequent to June 30, 2025, the Group faced multiple legal proceedings related to delayed or unsettled trade and other payables[10](index=10&type=chunk) - Measures taken by management to mitigate liquidity pressure: - Completed a new share placement in August 2025 and another new share placement in August 2025[11](index=11&type=chunk) - Actively negotiating with banks to further extend the terms of interest-bearing borrowings and reduce related interest rates[11](index=11&type=chunk) - Actively negotiating with several financial institutions and potential lenders or investors to identify various financing options for the Group's working capital and commitments in the foreseeable future[12](index=12&type=chunk) - Accelerating pre-sales and sales of properties under development and completed properties held for sale[12](index=12&type=chunk) - Actively negotiating with consignors regarding the settlement of advances to consignors and related accrued interest receivable[12](index=12&type=chunk) - Mr. Lui Kin Chung, the ultimate controlling party, has undertaken to provide continuous financial support to the Group to meet its daily operations and financial obligations as they fall due[13](index=13&type=chunk) [3. Segment Information](index=7&type=section&id=3.%20Segment%20Information) The Group operates in three segments: Arts and Culture, Wine Business, and Property Development, with Arts and Culture being the primary revenue and profit contributor, while Hong Kong generates most revenue geographically - Segment breakdown: Arts and Culture segment, Wine Business segment, Property Development segment[14](index=14&type=chunk) Segment Performance Overview (For the six months ended June 30) | Segment | 2025 Revenue (HK$ thousand) | 2024 Revenue (HK$ thousand) | 2025 Result (HK$ thousand) | 2024 Result (HK$ thousand) | | :--- | :--- | :--- | :--- | :--- | | Arts and Culture | 14,741 | 20,422 | 15,021 (Profit) | 14,943 (Profit) | | Wine Business | 400 | 1,930 | (212) (Loss) | 744 (Profit) | | Property Development | – | 3,533 | (18,857) (Loss) | (25,944) (Loss) | | **Consolidated Total** | **15,141** | **25,885** | **(8,384) (Loss before tax)** | **(12,739) (Loss before tax)** | Geographical Information Overview (Revenue for the six months ended June 30) | Region | 2025 Revenue (HK$ thousand) | 2024 Revenue (HK$ thousand) | | :--- | :--- | :--- | | Hong Kong | 12,425 | 13,979 | | Mainland China | 2,716 | 11,896 | | France | – | 10 | | **Total** | **15,141** | **25,885** | Geographical Information Overview (Specific Non-current Assets as of June 30) | Region | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Hong Kong | 1,002 | 415 | | Mainland China | 87,465 | 96,403 | | France | – | – | | **Total** | **88,467** | **96,818** | [4. Revenue](index=10&type=section&id=4.%20Revenue) Total revenue for the period was HK$15,141 thousand, a 41.5% decrease year-on-year, primarily due to a significant drop in revenue from customer contracts Revenue Analysis (For the six months ended June 30) | Revenue Source | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Year-on-year Change (%) | | :--- | :--- | :--- | :--- | | Revenue from contracts with customers | 454 | 5,463 | -91.7% | | Interest income from advances to consignors | 14,687 | 19,200 | -23.5% | | Gross rental income from investment properties | – | 1,222 | -100% | | **Total Revenue** | **15,141** | **25,885** | **-41.5%** | [5. Other Income](index=11&type=section&id=5.%20Other%20Income) Other income for the period increased by 13.4% to HK$6,352 thousand, mainly driven by higher rental income from completed properties held for sale Other Income Analysis (For the six months ended June 30) | Income Source | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Year-on-year Change (%) | | :--- | :--- | :--- | :--- | | Bank interest income | 1 | 10 | -90.0% | | Gross rental income from completed properties held for sale | 6,351 | 5,589 | +13.6% | | **Total** | **6,352** | **5,600** | **+13.4%** | [6. Finance Costs](index=11&type=section&id=6.%20Finance%20Costs) Finance costs for the period decreased by 27.0% to HK$18,923 thousand, primarily due to a significant increase in borrowing costs capitalized for properties under development Finance Costs Analysis (For the six months ended June 30) | Item | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Year-on-year Change (%) | | :--- | :--- | :--- | :--- | | Interest on interest-bearing borrowings | 41,948 | 43,963 | -4.6% | | Interest on lease liabilities | 17 | 29 | -41.4% | | Total borrowing costs | 41,965 | 43,992 | -4.6% | | Less: Borrowing costs capitalized into properties under development | (23,042) | (18,079) | +27.5% | | **Net finance costs** | **18,923** | **25,913** | **-27.0%** | [7. Loss Before Tax](index=12&type=section&id=7.%20Loss%20Before%20Tax) Loss before tax for the period reflects a decrease in staff costs by 11.2% to HK$9,006 thousand, depreciation by 12.8% to HK$2,556 thousand, and legal and professional fees by 45.2% to HK$715 thousand Deductions from Loss Before Tax (For the six months ended June 30) | Item | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Year-on-year Change (%) | | :--- | :--- | :--- | :--- | | Staff costs | 9,006 | 10,144 | -11.2% | | Depreciation expense | 2,556 | 2,930 | -12.8% | | Legal and professional fees | 715 | 1,304 | -45.2% | [8. Income Tax](index=13&type=section&id=8.%20Income%20Tax) Income tax expense for the period decreased by 25.0% to HK$2,015 thousand, primarily due to lower China corporate income tax and no China land appreciation tax Income Tax Expense Analysis (For the six months ended June 30) | Item | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Year-on-year Change (%) | | :--- | :--- | :--- | :--- | | China corporate income tax | 2,011 | 2,271 | -11.5% | | China land appreciation tax | – | 554 | -100% | | Deferred tax | 4 | (138) | -102.9% | | **Income tax expense for the period** | **2,015** | **2,687** | **-25.0%** | - Hong Kong profits tax was not provided as subsidiaries incurred tax losses or were absorbed by prior year tax losses[24](index=24&type=chunk) - PRC entities are subject to China corporate income tax at a statutory rate of **25%**[24](index=24&type=chunk) [9. Dividends](index=13&type=section&id=9.%20Dividends) The Board does not recommend an interim dividend for the six months ended June 30, 2025, consistent with the prior period - No interim dividend recommended[26](index=26&type=chunk) [10. Loss Per Share Attributable to Owners of the Company](index=14&type=section&id=10.%20Loss%20Per%20Share%20Attributable%20to%20Owners%20of%20the%20Company) Basic and diluted loss per share attributable to owners of the Company for the six months ended June 30, 2025, expanded to 1.56 HK cents from 1.13 HK cents, with potential ordinary shares having an anti-dilutive effect Loss Per Share (For the six months ended June 30) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Basic and diluted loss per share | (1.56) HK cents | (1.13) HK cents | - The weighted average number of ordinary shares in issue used for calculating loss per share was **667,525,230** shares[29](index=29&type=chunk) [11. Trade and Other Receivables](index=15&type=section&id=11.%20Trade%20and%20Other%20Receivables) As of June 30, 2025, total trade and other receivables increased by 7.5% to HK$762,242 thousand, driven by higher interest receivables and other receivables, with a notable increase in trade receivables over 360 days old Trade and Other Receivables Overview (As of June 30) | Item | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Amounts due from customers | 6,540 | 10,820 | -39.6% | | Interest receivable | 204,015 | 166,208 | +22.7% | | Loss allowance (Trade receivables) | (14,854) | (14,904) | -0.3% | | Other receivables | 593,845 | 574,252 | +3.4% | | Loss allowance (Other receivables) | (27,304) | (27,304) | 0% | | **Total** | **762,242** | **709,072** | **+7.5%** | Trade Receivables Ageing Analysis (As of June 30) | Ageing | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Unbilled | 20,655 | 7,127 | | 0–30 days | 6,675 | 21,158 | | 31–90 days | 214 | 252 | | 91–180 days | 1,146 | 6,445 | | 181–360 days | 21,560 | 34,634 | | Over 360 days | 145,451 | 92,508 | - Advances to consignors for auction business, net of loss allowance, of approximately **HK$384,501 thousand** are secured by pledged auction items from consignors and bear interest at fixed annual rates ranging from **8% to 15%**[30](index=30&type=chunk) [12. Trade and Other Payables](index=16&type=section&id=12.%20Trade%20and%20Other%20Payables) As of June 30, 2025, total trade and other payables increased by 13.4% to HK$1,005,259 thousand, with the entire amount now classified as current, driven by higher interest payables and other payables Trade and Other Payables Overview (As of June 30) | Item | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Trade payables | 123,826 | 119,650 | +3.5% | | Accrued expenses | 30,277 | 32,200 | -6.0% | | Interest payable | 158,718 | 112,528 | +41.0% | | Other payables | 678,218 | 608,448 | +11.5% | | **Total** | **1,005,259** | **886,687** | **+13.4%** | Trade Payables Analysis (As of June 30) | Item | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Current portion | 1,005,259 | 690,751 | | Non-current portion | – | 195,936 | - Trade payables over 360 days old increased from **HK$114,967 thousand** to **HK$119,496 thousand**[31](index=31&type=chunk) [Financial and Business Review and Outlook](index=17&type=section&id=Financial%20and%20Business%20Review%20and%20Outlook) This section provides a comprehensive review of the Group's financial performance and business operations, along with an outlook on future strategies and market conditions [Overall Review](index=17&type=section&id=Overall%20Review) For the six months ended June 30, 2025, the Group's revenue decreased by 41.7% to HK$15.1 million, while loss for the period narrowed by 32.5% to HK$10.4 million Financial Performance Overview (For the six months ended June 30) | Metric | 2025 (HK$ million) | 2024 (HK$ million) | Year-on-year Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 15.1 | 25.9 | -41.7% | | Loss for the period | (10.4) | (15.4) | -32.5% | [Arts and Culture Segment](index=17&type=section&id=Arts%20and%20Culture%20Segment) The Arts and Culture segment contributed HK$14.7 million in revenue (down 28%) and HK$15.0 million in profit before tax (up 0.7%), with auction business on hold due to market uncertainty and new art CBD center development in Xi'an Segment Financial Performance (For the six months ended June 30) | Metric | 2025 (HK$ million) | 2024 (HK$ million) | Year-on-year Change (%) | | :--- | :--- | :--- | :--- | | Segment revenue | 14.7 | 20.4 | -28.0% | | Segment profit before tax | 15.0 | 14.9 | +0.7% | - Auction business: Given the current uncertain economic situation in China, the Company did not hold any large-scale auctions, and management will continue to monitor market conditions and sentiment, resuming large-scale auctions once signs of recovery emerge[34](index=34&type=chunk) - Art Central Business District business: A center established in Xi'an provides integrated venues for storage, exhibition, auction, promotion, and trading of art and collectibles, aiming to build a vast network with other art and cultural partners and is expected to create synergies with the Silk Road International Cultural Center[35](index=35&type=chunk) [Wine Business Segment](index=17&type=section&id=Wine%20Business%20Segment) The Wine Business segment's revenue significantly decreased by 78.9% to HK$0.4 million, resulting in a loss of HK$0.2 million compared to a profit of HK$0.7 million in the prior period Segment Financial Performance (For the six months ended June 30) | Metric | 2025 (HK$ million) | 2024 (HK$ million) | Year-on-year Change (%) | | :--- | :--- | :--- | :--- | | Segment revenue | 0.4 | 1.9 | -78.9% | | Segment profit/(loss) before tax | (0.2) | 0.7 | -128.6% | [Property Development Segment](index=18&type=section&id=Property%20Development%20Segment) The Property Development segment generated no revenue but narrowed its loss before tax by 27.1% to HK$18.9 million due to cost-saving measures, with the Silk Road International Cultural Center project progressing Segment Financial Performance (For the six months ended June 30) | Metric | 2025 (HK$ million) | 2024 (HK$ million) | Year-on-year Change (%) | | :--- | :--- | :--- | :--- | | Segment revenue | – | 3.5 | -100% | | Segment loss before tax | (18.9) | (25.9) | -27.1% | - The decrease in segment loss before tax was primarily due to the adoption of cost-saving measures[37](index=37&type=chunk) - Silk Road International Cultural Center project: Located in Datang West Market, Lianhu District, Xi'an, China, it is planned to be developed into a comprehensive cultural and art complex covering cultural and art product operations, financing, and international entertainment[37](index=37&type=chunk) - Building A development progress: Pre-sale permit obtained in 2023, structural work completed up to 24th floor (December 31, 2024: 19th floor), with completion expected within 2026[38](index=38&type=chunk) [Outlook](index=19&type=section&id=Outlook) Despite short-term uncertainties in the Chinese economy, management remains confident in its fundamentals and anticipates a rebound in the cultural and art market, focusing on value enhancement through strategic repositioning and partnerships - China economic outlook: Short-term uncertainties persist, especially with significant pressure on China's traditional economy, but the underlying fundamentals are believed to remain strong, with the government making substantial efforts to improve the economic situation[39](index=39&type=chunk) - Cultural and art market expectation: A rebound and recovery of the cultural and art market is believed to be imminent[39](index=39&type=chunk) - Future strategy: Management will strive to enhance the value of properties through resource integration, strategic repositioning and repackaging, and strengthening marketing cooperation with third parties[39](index=39&type=chunk) [Liquidity and Financial Resources](index=19&type=section&id=Liquidity%20and%20Financial%20Resources) As of June 30, 2025, total bank balances and cash decreased by HK$7.5 million to HK$8.7 million due to operational consumption, while outstanding pledged borrowings increased to HK$1,434.3 million Liquidity Overview (As of June 30) | Metric | 2025 (HK$ million) | 2024 (HK$ million) | Change (HK$ million) | | :--- | :--- | :--- | :--- | | Total bank balances and cash | 8.7 | 16.2 | -7.5 | | Outstanding pledged borrowings | 1,434.3 | 1,392.1 | +42.2 | - The decrease in cash was primarily due to the consumption of cash resources in daily operations during the period[40](index=40&type=chunk) [Capital Gearing](index=19&type=section&id=Capital%20Gearing) As of June 30, 2025, the Group's capital gearing ratio increased to 167.5% from 161.2%, indicating a higher leverage level Capital Gearing Ratio (As of June 30) | Date | Capital Gearing Ratio | | :--- | :--- | | June 30, 2025 | 167.5% | | December 31, 2024 | 161.2% | - Capital gearing ratio is calculated by dividing net debt by equity attributable to owners of the Company[41](index=41&type=chunk) [Foreign Exchange Risk](index=19&type=section&id=Foreign%20Exchange%20Risk) The Group's assets and liabilities are primarily denominated in HKD and RMB, with exchange gains from foreign operations reversing last year's losses - The Group's assets and liabilities are primarily denominated in Hong Kong Dollars and Renminbi, which are the functional currencies of the respective group companies[42](index=42&type=chunk) Exchange Differences Arising from Translation of Foreign Operations (For the six months ended June 30) | Metric | 2025 (HK$ million) | 2024 (HK$ million) | | :--- | :--- | :--- | | Exchange gain/(loss) | 10.3 (gain) | (8.8) (loss) | [Human Resources](index=20&type=section&id=Human%20Resources) As of June 30, 2025, the Group maintained approximately 93 employees, with remuneration based on qualifications, experience, market rates, and contributions, including bonuses and share options - Number of employees: As of June 30, 2025, the Group had approximately **93** employees in Hong Kong and China (December 31, 2024: 93 employees)[43](index=43&type=chunk) - Remuneration policy: Employee remuneration is determined based on their qualifications, work experience, prevailing market rates, and contributions to the Group; bonuses and share options may also be offered to eligible employees based on individual performance[43](index=43&type=chunk) [Contingent Liabilities and Financial Guarantees](index=20&type=section&id=Contingent%20Liabilities%20and%20Financial%20Guarantees) As of June 30, 2025, total contingent liabilities increased to HK$353.8 million, primarily related to guarantees for bank loans provided to property development customers and a related party Total Contingent Liabilities (As of June 30) | Date | Amount (HK$ million) | | :--- | :--- | | June 30, 2025 | 353.8 | | December 31, 2024 | 343.2 | - Contingent liabilities involve guarantees provided to banks for loans extended to customers of the property development segment and a related party[44](index=44&type=chunk) [Hedging, Acquisitions and Disposals, and Material Investments](index=20&type=section&id=Hedging%2C%20Acquisitions%20and%20Disposals%2C%20and%20Material%20Investments) During the review period, the Group did not engage in any hedging activities, significant acquisitions or disposals of assets/businesses/subsidiaries, or material investments - The Group did not use any financial instruments for hedging purposes during the review period[45](index=45&type=chunk) - The Group did not undertake any significant acquisitions or disposals of assets, businesses, or subsidiaries during the review period[45](index=45&type=chunk) - The Group did not make any material investments during the review period[45](index=45&type=chunk) [Capital Commitments](index=20&type=section&id=Capital%20Commitments) As of June 30, 2025, the Group's capital commitments decreased to HK$578.5 million from HK$627.6 million Capital Commitments (As of June 30) | Date | Amount (HK$ million) | | :--- | :--- | | June 30, 2025 | 578.5 | | December 31, 2024 | 627.6 | [Interim Dividend](index=20&type=section&id=Interim%20Dividend) The Board does not recommend an interim dividend for the six months ended June 30, 2025, consistent with the prior period - The Board does not recommend an interim dividend for the six months ended June 30, 2025 (June 30, 2024: nil)[47](index=47&type=chunk) [Purchase, Sale or Redemption of Listed Securities](index=20&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20Listed%20Securities) During the six months ended June 30, 2025, neither the Company nor its subsidiaries purchased, sold, or redeemed any of the Company's listed securities - During the six months ended June 30, 2025, neither the Company nor its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[48](index=48&type=chunk) [Other Information](index=20&type=section&id=Other%20Information) This section covers additional information including the review of interim results, post-reporting period events, corporate governance, and board composition [Review of Interim Results](index=20&type=section&id=Review%20of%20Interim%20Results) The Company's unaudited interim results for the six months ended June 30, 2025, were not reviewed by external auditors but were reviewed by the Audit Committee - The Company's 2025 interim report was not reviewed by external auditors[49](index=49&type=chunk) - It has been reviewed by the Company's Audit Committee[49](index=49&type=chunk) [Events After the Reporting Period](index=21&type=section&id=Events%20After%20the%20Reporting%20Period) Subsequent to the reporting period, the Company completed two new share placements in August 2025, raising approximately HK$32 million, with another placement agreement currently in progress - On July 8, 2025, the Company entered into a placing agreement with a placing agent for the placement of **66,752,523** shares at **HK$0.5** per share, raising net proceeds of approximately **HK$32,000,000**[50](index=50&type=chunk) - On August 8, 2025, the Company entered into a placing agreement with a placing agent for the placement of **66,800,000** shares at **HK$0.6** per share, which is still in progress as of the date of this announcement[50](index=50&type=chunk) [Corporate Governance](index=21&type=section&id=Corporate%20Governance) The Company has regained compliance with HKEX Listing Rules regarding board composition, audit, and remuneration committees following the appointment of an independent non-executive director in August 2025, and adheres to the standard code for securities transactions - Previously failed to comply with Listing Rules 3.10(1) (board must include at least three independent non-executive directors), 3.21 (audit committee must comprise at least three members), and 3.25 (remuneration committee chaired by an independent non-executive director with a majority of independent non-executive directors) due to the resignation of an independent non-executive director[51](index=51&type=chunk) - Following the appointment of Mr. Dai Chi Kit as an independent non-executive director effective August 8, 2025, the Company has complied with the aforementioned Listing Rules since August 8, 2025[51](index=51&type=chunk) - The Company has adopted and complied with the Standard Code as its own code of conduct for securities transactions by directors and senior management of the Company[52](index=52&type=chunk) [2025 Interim Report](index=22&type=section&id=2025%20Interim%20Report) The Company's 2025 Interim Report will be published on its website and HKEXnews, and dispatched to shareholders in due course - The Company's 2025 Interim Report will be published on the Company's website (www.dtxs.com) and the website of The Stock Exchange of Hong Kong Limited (www.hkexnews.hk)[53](index=53&type=chunk) - The interim report will be dispatched to the Company's shareholders in due course[53](index=53&type=chunk) [Board Information](index=22&type=section&id=Board%20Information) As of the announcement date (August 31, 2025), the Board comprises five executive directors, including the Chairman and Co-CEO, and three independent non-executive directors - As of the date of this announcement, the Board comprises five executive directors (Mr. Lui Kin Chung (Chairman), Mr. Yeung Hing Man, Mr. Wong Tai Hoi, Mr. Wong Kwok Tun (Co-Chief Executive Officer), and Mr. Lam Hiu Ling) and three independent non-executive directors (Mr. Choi Wang Tung, Ms. Hau Wing Chi, and Mr. Dai Chi Kit)[55](index=55&type=chunk)

[Financial Summary](index=1&type=section&id=Financial%20Summary) The company's interim financial performance shows significant growth in revenue, profit attributable to owners, and earnings per share, alongside a substantial dividend declaration [Interim Results Overview](index=1&type=section&id=Interim%20Results%20Overview) During the reporting period, the company demonstrated strong financial performance with significant growth in revenue, profit attributable to owners, and a corresponding increase in basic and diluted earnings per share Interim Financial Performance Summary | Metric | H1 2025 (HKD millions) | H1 2024 (HKD millions) | YoY Growth | | :--- | :--- | :--- | :--- | | Revenue | 731 | 536 | 36% | | Gross Profit | 295 | 233 | 26% | | Profit Attributable to Owners of the Company | 339 | 261 | 30% | | Basic and Diluted EPS (HK cents) | 4.77 | 3.65 | 1.12 HK cents | [Dividend Declaration](index=1&type=section&id=Dividend%20Declaration) The Board declared an interim dividend of HKD 271 million for H1 2025 and a special dividend of HKD 768 million on March 26, 2025, payable in three installments - An interim dividend of **HKD 271 million** was declared for H1 2025 (H1 2024: HKD 208 million)[4](index=4&type=chunk) - A special dividend of **HKD 768 million** was declared, payable in three installments, with the first installment paid on April 14, 2025, and the second and third installments due on September 26, 2025, and December 29, 2025, respectively[4](index=4&type=chunk) [Condensed Consolidated Interim Statement of Comprehensive Income](index=2&type=section&id=Condensed%20Consolidated%20Interim%20Statement%20of%20Comprehensive%20Income) The company's comprehensive income statement for the interim period shows robust growth in revenue and profit, significantly boosted by foreign exchange gains Condensed Consolidated Interim Statement of Comprehensive Income Summary | Metric (HKD thousands) | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | | Revenue | 731,158 | 535,843 | 36.45% | | Gross Profit | 294,639 | 233,456 | 26.21% | | Operating Profit | 454,850 | 352,566 | 29.02% | | Profit Before Income Tax | 390,646 | 293,299 | 33.19% | | Profit for the Period | 341,520 | 243,949 | 40.00% | | Profit Attributable to Owners of the Company | 339,026 | 260,551 | 30.12% | | Total Comprehensive Income for the Period | 608,964 | 318,959 | 90.92% | | Basic EPS (HK cents) | 4.77 | 3.65 | 30.68% | - Exchange differences on translation of overseas operations turned from a loss of **HKD 119,794 thousand** in H1 2024 to a gain of **HKD 137,941 thousand** in H1 2025, significantly contributing to the substantial increase in total comprehensive income[8](index=8&type=chunk) - Fair value changes of financial assets at fair value through other comprehensive income decreased from **HKD 215,217 thousand** in H1 2024 to **HKD 104,811 thousand** in H1 2025[8](index=8&type=chunk) [Condensed Consolidated Interim Statement of Financial Position](index=4&type=section&id=Condensed%20Consolidated%20Interim%20Statement%20of%20Financial%20Position) The company's financial position shows an increase in total assets and liabilities, with a notable rise in current liabilities primarily due to dividend payables Condensed Consolidated Interim Statement of Financial Position Summary | Metric (HKD thousands) | June 30, 2025 | December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | **Assets** | | | | | Total Non-current Assets | 7,801,719 | 7,312,200 | 6.70% | | Total Current Assets | 6,546,065 | 6,516,883 | 0.45% | | Total Assets | 14,347,784 | 13,829,083 | 3.75% | | **Equity** | | | | | Total Equity | 9,263,880 | 9,515,844 | -2.65% | | **Liabilities** | | | | | Total Non-current Liabilities | 3,402,156 | 3,333,305 | 2.06% | | Total Current Liabilities | 1,681,748 | 979,934 | 71.62% | | Total Liabilities | 5,083,904 | 4,313,239 | 17.87% | - Total current liabilities significantly increased by **71.62%**, primarily due to dividends payable rising from zero to **HKD 632,155 thousand** and contract liabilities increasing from **HKD 68,751 thousand** to **HKD 156,228 thousand**[10](index=10&type=chunk) - Time deposits maturing in more than three months increased from **HKD 1,626,752 thousand** to **HKD 3,061,844 thousand**, indicating a shift in the company's cash management strategy[9](index=9&type=chunk) [Notes to the Condensed Consolidated Interim Financial Information](index=6&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Interim%20Financial%20Information) This section provides detailed notes on the preparation basis, accounting policies, segment information, and other key financial items for the interim period [1 Basis of Preparation](index=6&type=section&id=1%20Basis%20of%20Preparation) This condensed consolidated interim financial information is prepared in accordance with HKAS 34 "Interim Financial Reporting" and should be read in conjunction with the 2024 annual financial statements - The financial information is prepared in accordance with **HKAS 34 "Interim Financial Reporting"**[12](index=12&type=chunk) - The auditors issued an unqualified opinion on the **2024 annual financial statements**[13](index=13&type=chunk) [2 Accounting Policies and Accounting Estimates and Judgements](index=7&type=section&id=2%20Accounting%20Policies%20and%20Accounting%20Estimates%20and%20Judgements) The Group's accounting policies are consistent with the 2024 annual financial statements, with income tax accrued using the applicable tax rate on the expected total annual profit; management is assessing the impact of newly issued but not yet effective standards - Accounting policies are consistent with the **2024 annual financial statements**, and income tax is accrued using the applicable tax rate on the expected total annual profit[14](index=14&type=chunk)[15](index=15&type=chunk) - Management is evaluating the potential impact of newly issued but not yet applied standards on the Group's operating results and financial position[15](index=15&type=chunk) [3 Revenue and Segment Information](index=8&type=section&id=3%20Revenue%20and%20Segment%20Information) The Group primarily engages in infrastructure asset management, with total revenue of HKD 731 million in H1 2025, significantly contributed by operating service income and investment gains from financial assets at fair value through profit or loss Revenue by Type | Revenue Type (HKD thousands) | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Operating Service Income | 475,803 | 370,277 | | Construction Income from Service Concession Arrangements | 9,902 | 11,492 | | Fund Management Service Income | 90,854 | 95,206 | | Excess Returns from Investment Funds | – | 97,491 | | Rental Income | 25,424 | 24,003 | | Investment Gains/(Losses) from Financial Assets at Fair Value Through Profit or Loss | 129,175 | (62,626) | | **Total Revenue** | **731,158** | **535,843** | - Investment gains from financial assets at fair value through profit or loss turned from a loss of **HKD 62,626 thousand** in H1 2024 to a gain of **HKD 129,175 thousand** in H1 2025, serving as a significant driver for revenue growth[17](index=17&type=chunk) - Excess returns from investment funds were **zero** in H1 2025, compared to **HKD 97,491 thousand** in H1 2024[17](index=17&type=chunk) [4 Income Tax Expense](index=9&type=section&id=4%20Income%20Tax%20Expense) The Group's income tax expense primarily comprises Hong Kong profits tax (16.5%) and PRC corporate income tax (mainly 25%), with H1 2025 expense remaining stable year-on-year - Hong Kong profits tax rate is **16.5%**[19](index=19&type=chunk) - PRC mainland subsidiaries' corporate income tax rate is mainly **25%**[20](index=20&type=chunk) - H1 2025 income tax expense was **HKD 49,126 thousand**, largely consistent with **HKD 49,350 thousand** in H1 2024[7](index=7&type=chunk) [5 Earnings Per Share](index=9&type=section&id=5%20Earnings%20Per%20Share) In H1 2025, both basic and diluted earnings per share attributable to owners of the company were 4.77 HK cents, an increase from the prior period, calculated based on the weighted average number of ordinary shares outstanding Earnings Per Share | Metric (HK cents) | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Basic EPS | 4.77 | 3.65 | | Diluted EPS | 4.77 | 3.65 | - Profit attributable to owners of the company used for calculating basic and diluted earnings per share was **HKD 339,026 thousand** (H1 2024: **HKD 260,551 thousand**)[25](index=25&type=chunk) - The weighted average number of ordinary shares used for calculating basic and diluted earnings per share was **7,114,104 thousand shares** in H1 2025, slightly lower than **7,132,972 thousand shares** in H1 2024[26](index=26&type=chunk) - Certain unexercised share options were not included in the diluted earnings per share calculation due to their **anti-dilutive effect**[27](index=27&type=chunk) [6 Trade Receivables](index=11&type=section&id=6%20Trade%20Receivables) As of June 30, 2025, net trade receivables increased to HKD 224,372 thousand from year-end 2024, with receivables over 180 days constituting the largest portion Trade Receivables Ageing Analysis | Ageing | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | | :--- | :--- | :--- | | Within 60 days | 37,778 | 50,391 | | 61 to 90 days | 12,106 | 8,073 | | 91 to 180 days | 23,207 | 29,560 | | Over 180 days | 151,281 | 115,068 | | **Total** | **224,372** | **203,092** | - Trade receivables generally have a credit period of **30 to 180 days**[28](index=28&type=chunk) - Trade receivables over 180 days increased from **HKD 115,068 thousand** at year-end 2024 to **HKD 151,281 thousand** as of June 30, 2025[28](index=28&type=chunk) [7 Trade Payables](index=11&type=section&id=7%20Trade%20Payables) As of June 30, 2025, total trade payables increased to HKD 516,671 thousand from year-end 2024, with payables over 365 days representing the largest portion Trade Payables Ageing Analysis | Ageing | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | | :--- | :--- | :--- | | Within 90 days | 80,734 | 112,051 | | 91 to 180 days | 65,656 | 48,009 | | 181 to 365 days | 81,833 | 59,030 | | Over 365 days | 288,448 | 233,660 | | **Total** | **516,671** | **452,750** | - Trade payables over 365 days increased from **HKD 233,660 thousand** at year-end 2024 to **HKD 288,448 thousand** as of June 30, 2025[29](index=29&type=chunk) [8 Share Capital](index=12&type=section&id=8%20Share%20Capital) As of June 30, 2025, the company's issued and fully paid ordinary share capital was HKD 12,994,847 thousand, with the number of shares reduced due to share repurchases - As of June 30, 2025, the number of issued and fully paid ordinary shares was **7,284,455 thousand shares**, with share capital of **HKD 12,994,847 thousand**[30](index=30&type=chunk) - In H1 2025, **400,000 shares** were repurchased and cancelled for a total consideration of approximately **HKD 533 thousand**[30](index=30&type=chunk) - For the full year 2024, **83,960,000 shares** were repurchased and cancelled for a total consideration of approximately **HKD 58,736 thousand**[30](index=30&type=chunk) [9 Dividends](index=13&type=section&id=9%20Dividends) The Group recognized final and special dividends during the half-year and declared an interim dividend for H1 2025 Dividends Recognized | Dividend Type (HKD thousands) | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Final Dividend | 120,068 | 160,539 | | Special Dividend | 761,621 | – | | **Total Dividends Recognized in Half-Year** | **881,689** | **160,539** | - The Board declared a special dividend of **HKD 768 million** on March 26, 2025, payable in three installments, with two installments recognized as liabilities as of June 30, 2025[32](index=32&type=chunk) - The Board declared an interim dividend of **HKD 271 million** for H1 2025, which has not yet been recognized as a liability[33](index=33&type=chunk) [10 Events After the Reporting Period](index=14&type=section&id=10%20Events%20After%20the%20Reporting%20Period) Subsequent to the reporting period, the company completed the issuance and listing of USD 180 million 0.75% convertible bonds in July 2025 - On **July 9, 2025**, the company completed the issuance of **USD 180 million 0.75% convertible bonds**, which were listed on the Stock Exchange on **July 10, 2025**[34](index=34&type=chunk) [Interim Dividend Policy and Arrangements](index=15&type=section&id=Interim%20Dividend%20Policy%20and%20Arrangements) This section outlines the company's interim dividend declaration for H1 2025 and the associated arrangements for share transfer registration [Interim Dividend Declaration](index=15&type=section&id=Interim%20Dividend%20Declaration) The Board declared an interim dividend totaling HKD 271 million for the six months ended June 30, 2025, expected to be paid on November 17, 2025 - An interim dividend of **HKD 271 million** (HKD **3.43 cents** per share) was declared, an increase from **HKD 208 million** in H1 2024[35](index=35&type=chunk) - The interim dividend is expected to be paid on **November 17, 2025**[35](index=35&type=chunk) [Closure of Register of Members](index=15&type=section&id=Closure%20of%20Register%20of%20Members) To determine eligibility for the interim dividend, the company will suspend share transfer registration on September 30, 2025, requiring shareholders to complete transfer procedures before this date - The register of members will be closed on **September 30, 2025**[36](index=36&type=chunk) - To be eligible for the interim dividend, all transfer documents must be lodged with the share registrar by **4:30 p.m. on September 29, 2025**[36](index=36&type=chunk) [Management Discussion and Analysis](index=16&type=section&id=Management%20Discussion%20and%20Analysis) This section provides an in-depth review of the company's business operations, financial performance, risk management strategies, and future outlook [Company Overview](index=16&type=section&id=Company%20Overview) The Group is a leading intelligent infrastructure asset service provider in China, focusing on "asset operation + asset securitization," with businesses spanning parking asset management, industrial space management, REITs, and equity investments, alongside a forward-looking robotics industry layout - The company is positioned as a leading **intelligent infrastructure asset service provider** in China, with a core focus on **"asset operation + asset securitization"**[37](index=37&type=chunk) - Business covers four segments: **parking asset management, industrial space management, REITs investment, and equity investment**[37](index=37&type=chunk) - Adopts an **"asset cycle + digitalization"** operating model to achieve closed-loop management throughout the asset lifecycle[37](index=37&type=chunk) - Proactively lays out the **robotics industry**, investing in several leading enterprises and establishing Beijing Shoucheng Robotics Technology Industrial Co, Ltd[37](index=37&type=chunk) [Overview of Key Financial Indicators](index=17&type=section&id=Overview%20of%20Key%20Financial%20Indicators) In H1 2025, the company achieved growth in revenue, operating profit, and profit attributable to owners, while maintaining healthy asset-liability and debt-to-capital ratios Key Financial Indicators Overview | Metric | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | | Revenue (HKD millions) | 731 | 536 | 36.4% | | Asset Operation Revenue (HKD millions) | 511 | 406 | 25.9% | | Asset Securitization Revenue (HKD millions) | 220 | 130 | 69.2% | | Adjusted EBITDA (HKD millions) | 587 | 482 | 21.8% | | Operating Profit (HKD millions) | 455 | 353 | 28.9% | | Profit Attributable to Owners of the Company (HKD millions) | 339 | 261 | 29.9% | | Basic and Diluted EPS (HK cents) | 4.77 | 3.65 | 30.7% | | **Balance Sheet Metrics** | **June 30, 2025** | **December 31, 2024** | **Change** | | Total Assets (HKD millions) | 14,348 | 13,829 | 3.8% | | Net Assets (HKD millions) | 9,264 | 9,516 | -2.7% | | Asset-Liability Ratio | 35.4% | 31.2% | +4.2% | | Debt-to-Capital Ratio | 12.4% | 15.9% | -3.5% | [Non-HKFRS Measures](index=18&type=section&id=Non-HKFRS%20Measures) The Group utilizes Adjusted EBITDA, asset-liability ratio, and debt-to-capital ratio as non-HKFRS measures to supplement consolidated financial statements, offering a more comprehensive assessment of operating performance and financial position - **Adjusted EBITDA** is used to assess core operating performance, excluding non-cash transactions, income tax, finance costs, and non-controlling interests[40](index=40&type=chunk) - **Asset-liability ratio** (total liabilities/total assets) is used to assess the level of indebtedness[40](index=40&type=chunk) - **Debt-to-capital ratio** (total borrowings and bonds payable/equity and reserves attributable to owners of the company) is used to assess the financing structure[40](index=40&type=chunk) - These non-HKFRS measures aim to provide additional information, enhancing the understanding of the company's performance and prospects[41](index=41&type=chunk) [Financial Review](index=19&type=section&id=Financial%20Review) In H1 2025, the Group's revenue and gross profit grew significantly, driven by strong performance in asset operation and securitization businesses, with finance costs slightly up, income tax stable, and adjusted EBITDA substantially increasing [Revenue and Cost of Sales](index=19&type=section&id=Revenue%20and%20Cost%20of%20Sales) In H1 2025, the Group's total revenue increased by 36% year-on-year, with asset operation revenue up 26% and asset securitization revenue up 69%, leading to a 26% rise in gross profit - Total revenue was approximately **HKD 731 million**, a year-on-year increase of **36%**[42](index=42&type=chunk) - Asset operation revenue was approximately **HKD 511 million**, a year-on-year increase of **26%**, primarily benefiting from new projects like the Xi'an Xianyang International Airport T5 terminal parking project and improved operational efficiency of existing projects[42](index=42&type=chunk) - Asset securitization revenue was approximately **HKD 220 million**, a year-on-year increase of **69%**[42](index=42&type=chunk) - Overall gross profit was approximately **HKD 295 million**, a year-on-year increase of **26%**[42](index=42&type=chunk) [Finance Costs](index=19&type=section&id=Finance%20Costs) In H1 2025, finance costs were approximately HKD 61 million, an increase of about 5% year-on-year, primarily comprising interest on lease liabilities and borrowings and bonds payable - Finance costs were approximately **HKD 61 million**, a year-on-year increase of about **5%**[43](index=43&type=chunk) - The main components are interest on lease liabilities and interest on borrowings and bonds payable[43](index=43&type=chunk) [Taxation](index=19&type=section&id=Taxation) In H1 2025, income tax expense was approximately HKD 49 million, consistent with the prior period, mainly comprising corporate income tax for PRC subsidiaries - Income tax provision was approximately **HKD 49 million**, consistent with H1 2024[44](index=44&type=chunk) - Primarily corporate income tax for PRC mainland subsidiaries calculated at a **25% tax rate**[44](index=44&type=chunk) [Adjusted EBITDA](index=20&type=section&id=Adjusted%20EBITDA) In H1 2025, Adjusted EBITDA was approximately HKD 587 million, a year-on-year increase of about 22%, reflecting strong cash profit growth from core operations Adjusted EBITDA Reconciliation | Metric (HKD millions) | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | | Profit Before Income Tax | 391 | 293 | 33.4% | | Non-controlling Interests | (10) | 9 | -211.1% | | Finance Costs | 61 | 58 | 5.2% | | Depreciation of Property, Plant and Equipment | 14 | 11 | 27.3% | | Depreciation of Right-of-Use Assets | 115 | 97 | 18.6% | | Amortization of Other Non-current Assets | 16 | 14 | 14.3% | | **Adjusted EBITDA** | **587** | **482** | **21.8%** | - Adjusted EBITDA increased by **22%** year-on-year, reaching **HKD 587 million**, reflecting growth in cash profit from core operations[45](index=45&type=chunk) - The calculation of Adjusted EBITDA excludes the impact of depreciation, amortization, income tax expense, finance costs, and non-controlling interests[45](index=45&type=chunk) [Business Review](index=21&type=section&id=Business%20Review) The Group achieved significant progress in both asset operation and securitization, enhancing efficiency through a "asset cycle + digitalization" model, accelerating robotics industry layout, and deepening REITs-based full-lifecycle asset management capabilities [Asset Scale and Operational Efficiency Growth and Digitalization Progress](index=21&type=section&id=Asset%20Scale%20and%20Operational%20Efficiency%20Growth%20and%20Digitalization%20Progress) The Group continued to expand its parking resource layout, adding the Xi'an Xianyang International Airport project, accelerating "parking + charging" business development, and enhancing operational efficiency through digitalized operations like AI smart customer service - The Xi'an Xianyang International Airport T5 terminal parking project commenced operations in **February 2025**, offering over **5,200 parking spaces** and completing the national transportation hub project layout[46](index=46&type=chunk) - Accelerated the layout of **"parking + charging" business**, extending parking asset management to comprehensive services[46](index=46&type=chunk) - Launched **AI smart customer service and Q&A functions** built on DeepSeek V3 and Alibaba Tongyi Qianwen models, reducing manual customer service workload by over **50%**[46](index=46&type=chunk) [Asset Securitization and Operational Synergy and Robotics Industry Layout](index=22&type=section&id=Asset%20Securitization%20and%20Operational%20Synergy%20and%20Robotics%20Industry%20Layout) The Group invests in cutting-edge fields like humanoid and medical robots through industrial funds, leveraging its infrastructure management expertise to provide scenario implementation and data support for robotics companies, building an integrated "investment + operation + ecosystem" development path - Invested in core robotics industry chain companies such as **Unitree Robotics and Galaxy Universal** through multiple industrial funds, covering cutting-edge fields like **humanoid robots, medical robots, industrial robots, and low-altitude economy**[47](index=47&type=chunk) - Utilizes managed parking lots and industrial park physical scenarios to provide **real operational data** for robotics companies, accelerating product iteration and commercialization[48](index=48&type=chunk) - Its subsidiary, Beijing Shoucheng Robotics Technology Industrial Co, Ltd, promotes the application and secondary development of robotics products through sales agency, leasing, and consulting services[49](index=49&type=chunk) - Signed agreements with over **50 robotics companies** at the June 2025 Robotics Industry Ecosystem Summit and launched a robotics technology experience store during the World Humanoid Robot Games, covering a **"technology-product-market" closed loop**[49](index=49&type=chunk) [Deepening REITs-Based Full-Lifecycle Asset Management](index=23&type=section&id=Deepening%20REITs-Based%20Full-Lifecycle%20Asset%20Management) The Group, in partnership with China Life, established the Beijing Pingzhun Infrastructure Real Estate Equity Investment Fund, strategically investing in multiple REITs projects and reserving high-quality infrastructure assets for full-lifecycle management through asset securitization and public REITs - Jointly established the Beijing Pingzhun Infrastructure Real Estate Equity Investment Fund with China Life, with a fund size of **RMB 5.237 billion**[50](index=50&type=chunk) - Strategically invested in REITs projects such as **Southern Vanke Data Center, Southern Runze Technology Data Center, CICC-Shounong Industrial Park, and China Everbright Huadian Clean Energy** through proprietary funds and Beijing Pingzhun Fund strategic placements[50](index=50&type=chunk) - The Urban Development Fund reserves high-quality infrastructure assets in the **Beijing-Tianjin-Hebei, East China, Chengdu-Chongqing, and Greater Bay Area** regions, with future exits planned through asset securitization and public REITs[51](index=51&type=chunk) [Principal Risks and Uncertainties](index=24&type=section&id=Principal%20Risks%20and%20Uncertainties) The Group faces market risks (currency, interest rate, price), credit risk, and liquidity risk, managing them through Board-approved guidelines to mitigate potential adverse impacts [Currency Risk](index=24&type=section&id=Currency%20Risk) The Group's operations are primarily in mainland China and Hong Kong, exposing it to exchange rate fluctuations of HKD, USD, and RMB, which are mitigated by matching foreign currency assets with borrowing bases - Faces **exchange rate fluctuation risks** for HKD, USD, and RMB[53](index=53&type=chunk) - Mitigates exchange rate risk by matching foreign currency assets with foreign currency cash flows as the borrowing base[53](index=53&type=chunk) [Interest Rate Risk](index=24&type=section&id=Interest%20Rate%20Risk) The Group primarily faces cash flow interest rate risk associated with floating-rate bank balances and borrowings - Primarily faces **cash flow interest rate risk** related to floating-rate bank balances and borrowings[54](index=54&type=chunk) [Capital Structure](index=24&type=section&id=Capital%20Structure) The Group's capital structure comprises borrowings, bonds payable, and equity attributable to owners of the company, reviewed semi-annually by the Board to balance it through dividends, new share issues, share repurchases, and debt management - Capital structure includes **borrowings, bonds payable, and equity attributable to owners of the company**[55](index=55&type=chunk) - The Board reviews the capital structure semi-annually, balancing it through dividends, new share issues, share repurchases, and debt management[55](index=55&type=chunk) [Liquidity and Financial Resources](index=25&type=section&id=Liquidity%20and%20Financial%20Resources) The Group is committed to diversifying funding sources, maintaining high-liquidity assets, and preserving healthy asset-liability and debt-to-capital ratios High Liquidity Assets | Metric (HKD millions) | June 30, 2025 | December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Bank Balances and Cash | 2,702 | 2,622 | 3.05% | | Wealth Management Products and Fixed-Income Financial Assets | 3,198 | 1,746 | 83.16% | | **Total High Liquidity Assets** | **5,900** | **4,368** | **35.08%** | Asset-Liability Ratio | Metric (HKD millions) | June 30, 2025 | December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Total Liabilities | 5,084 | 4,313 | 17.87% | | Total Assets | 14,348 | 13,829 | 3.75% | | **Asset-Liability Ratio** | **35.4%** | **31.2%** | **+4.2%** | Debt-to-Capital Ratio | Metric (HKD millions) | June 30, 2025 | December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Total Borrowings and Bonds Payable | 1,137 | 1,496 | -23.99% | | Equity and Reserves Attributable to Owners of the Company | 9,174 | 9,421 | -2.62% | | **Debt-to-Capital Ratio** | **12.4%** | **15.9%** | **-3.5%** | - The asset-liability ratio increased by **4.2%**, primarily due to the provision for two installments of special dividends payable during the period[57](index=57&type=chunk) - The debt-to-capital ratio decreased by **3.5%**, mainly because the Group repaid all bank term loans, reducing total borrowings[58](index=58&type=chunk)[59](index=59&type=chunk) - As of June 30, 2025, all bank term loans were repaid, with a 3-year medium-term note balance of approximately **HKD 548 million** and a REITs-like structured asset-backed product balance of approximately **HKD 589 million**[59](index=59&type=chunk)[60](index=60&type=chunk)[61](index=61&type=chunk) [Significant Investments Held](index=27&type=section&id=Significant%20Investments%20Held) The Group holds significant investments in CICC GLP REIT and Shougang Fushan Resources Group Limited, with CICC GLP REIT realizing fair value change gains in H1 2025 Major Strategic Investments | Strategic Investment Name | Investment Cost (RMB) | Fair Value (RMB) (June 30, 2025) | Fair Value as % of Total Assets | Unrealized Fair Value Change Gain (RMB) (H1 2025) | Dividends Received (RMB) (H1 2025) | | :--- | :--- | :--- | :--- | :--- | :--- | | CICC GLP REIT | 583,500,000 | 571,650,000 | 4.37% | 71,400,000 | 7,425,000 | - CICC GLP REIT primarily invests in warehousing and logistics infrastructure projects, with its fund units listed on the Shanghai Stock Exchange[64](index=64&type=chunk) - The Group completed the disposal of a portion of Shougang Resources shares on **February 3, 2025**[64](index=64&type=chunk) [Significant Acquisitions and Disposals](index=28&type=section&id=Significant%20Acquisitions%20and%20Disposals) During the reporting period, the company's wholly-owned subsidiary, Fine Power Group Limited, completed the disposal of approximately 11.92% of Shougang Resources shares to related party Shougang Holding - On **February 3, 2025**, Fine Power Group Limited completed the disposal of **606,927,640 shares** (approximately **11.92%**) of Shougang Resources to Shougang Holding[65](index=65&type=chunk) [Events After the Reporting Period](index=28&type=section&id=Events%20After%20the%20Reporting%20Period) Subsequent to the reporting period, the company completed the issuance and listing of USD 180 million 0.75% convertible bonds in July 2025 - On **July 9, 2025**, the company completed the issuance of **USD 180 million 0.75% convertible bonds**, which were listed on the Stock Exchange on **July 10, 2025**[66](index=66&type=chunk) [Employee Relations](index=28&type=section&id=Employee%20Relations) The Group is committed to providing an equal, diverse, and non-discriminatory work environment, attracting and retaining talent through a competitive compensation and incentive system and comprehensive employee benefits, including equity incentives, social insurance, annual health checks, and recreational activities - As of June 30, 2025, the Group had a total of **442 employees**[67](index=67&type=chunk) - Implements a compensation and incentive system that is **"competitive externally and fair internally,"** including fixed salaries, performance-based variable pay, discretionary bonuses, project bonuses, and equity incentive plans[67](index=67&type=chunk) - Provides medical allowances, hospitalization plans, and pension schemes for Hong Kong employees; arranges social insurance benefits (five insurances and one housing fund) and annual health checks for mainland China employees[67](index=67&type=chunk)[68](index=68&type=chunk) - Enhances team cohesion and sense of belonging through recreational activities and employee assemblies[68](index=68&type=chunk) [Outlook](index=29&type=section&id=Outlook) Looking ahead, the Group will continue to increase investment in core regions, focused industries, and assets, deepen the robotics industry ecosystem, and create long-term shareholder returns through an integrated "investment, production, and service" model - Future plans include increasing investment in **core regions, focused industries, and focused assets**[69](index=69&type=chunk) - Continues to deeply lay out the **robotics industry**, building a complete robotics industry ecosystem through **"investment, production, and service"**[69](index=69&type=chunk) - The goal is to promote the upgrading of China's intelligent manufacturing industry, enhance the digital and intelligent management level of managed assets, and create sustainable value returns for shareholders[69](index=69&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=29&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company's%20Listed%20Securities) In H1 2025, the company repurchased and cancelled 400,000 shares on the Stock Exchange for a total consideration of HKD 532,949.60 Share Repurchases | Month | Number of Shares Repurchased (shares) | Highest Price Paid (HKD) | Lowest Price Paid (HKD) | Total Consideration (HKD) | | :--- | :--- | :--- | :--- | :--- | | April 2025 | 400,000 | 1.38 | 1.28 | 532,949.60 | | **Total** | **400,000** | | | **532,949.60** | - All repurchased shares have been cancelled[70](index=70&type=chunk) [Compliance with Corporate Governance Code](index=29&type=section&id=Compliance%20with%20Corporate%20Governance%20Code) For the six months ended June 30, 2025, the company complied with the code provisions of the Corporate Governance Code set out in Appendix C1 of the HKEX Listing Rules - The company has complied with the code provisions of the **Corporate Governance Code** set out in Appendix C1 of the HKEX Listing Rules[71](index=71&type=chunk) [Other Information](index=30&type=section&id=Other%20Information) This section details changes to the company's registered office address and expresses gratitude to stakeholders [Change of Registered Office Address](index=30&type=section&id=Change%20of%20Registered%20Office%20Address) The company's registered office address will change to Units 3706-08, 37/F, AIA Tower, 183 Electric Road, North Point, Hong Kong, effective September 1, 2025 - The registered office address will change to Units 3706-08, 37/F, AIA Tower, 183 Electric Road, North Point, Hong Kong, effective **September 1, 2025**[72](index=72&type=chunk) [Acknowledgements](index=30&type=section&id=Acknowledgements) The Board expresses gratitude for the trust and support of shareholders and strategic investors, reaffirming the company's core competitive advantages as an intelligent infrastructure asset service provider and deep participant in the robotics industry, committed to creating sustainable shareholder value - The Board thanks shareholders and strategic shareholders (including **Shougang Group Co, Ltd, ORIX Corporation, Chow Tai Fook Enterprises Limited, Beijing State-owned Capital Operation and Management Co, Ltd, and Sunshine Insurance Group Co, Ltd**) for their support[73](index=73&type=chunk) - The company will continue to leverage its core competitive advantages in **asset operation and management, capital synergy and integration, and scenario empowerment and innovation** to promote the upgrading of the intelligent manufacturing industry and create sustainable value for shareholders[73](index=73&type=chunk)

香 港 交 易 及 結 算 所 有 限 公 司 及 香 港 聯 合 交 易 所 有 限 公 司 對 本 公 佈 的 內 容 概 不 負 責，對 其 準 確 性 或 完 整 性 亦 不 發 表 任 何 聲 明，並 明 確 表 示，概 不 對 因 本 公 佈 全 部 或 任 何 部 分 內 容 而 產 生 或 因 依 賴 該 等 內 容 而 引 致 的 任 何 損 失 承 擔 任 何 責 任。 WS-SK TARGET GROUP LIMITED 萬順瑞強集團有限公司 （於開曼群島註冊成立之有限公司） （股份代號：8427） 截 至2025年5月31日 止 年 度 的 全 年 業 績 公 佈 香 港 聯 合 交 易 所 有 限 公 司（「聯 交 所」）GEM的 特 色 GEM的 定 位 乃 為 相 比 起 其 他 在 聯 交 所 上 市 的 公 司 帶 有 較 高 投 資 風 險 的 中 小 型 公 司 提 供 一 個 上 市 的 市 場。有 意 投 資 的 人 士 應 瞭 解 投 資 該 等 公 司 的 潛 在 風 險，並 應 經 過 審 慎 周 詳 的 考 慮 後 方 作 出 投 資 決 定。 由 於 在GE ...

[Citychamp Watch & Jewellery Group Limited: Clarification Announcement on Interim Results](index=1&type=section&id=clarification_announcement_overview) [Purpose and Background of the Announcement](index=1&type=section&id=purpose_background) This announcement clarifies a clerical error in the unaudited interim results for the six months ended June 30, 2025, published on August 28, 2025 - This clarification announcement corrects a clerical error in the unaudited interim results for the six months ended June 30, 2025, published on August 28, 2025[2](index=2&type=chunk) [Details of Error Correction](index=1&type=section&id=error_correction_details) The interim results are corrected for Ebo Group's watch business, changing a reported net profit after tax of HKD 23.271 million to a net loss of the same amount - The error occurred in the "Management Discussion and Analysis – Operating Results – I. Watch, Clock Products and Watch Accessories Business" section[2](index=2&type=chunk) Correction of Ebo Group's Net Amount After Tax for the Six Months Ended June 30, 2025 | Metric | Originally Disclosed (HKD) | Corrected (HKD) | | :--- | :--- | :--- | | Net Amount After Tax | Profit 23,271,000 | Loss 23,271,000 | - Except for the above correction, all other information contained in the interim results announcement remains unchanged[3](index=3&type=chunk) [Board of Directors Information](index=1&type=section&id=board_members_info) The announcement discloses the composition of the company's board of directors as of August 30, 2025, including five executive directors and three independent non-executive directors - As of August 30, 2025, the company's executive directors include Mr. HONG Kong Lung, Mr. SIU Kam Wah, Mr. SHI Tao, Mr. HON Hau Kwong, and Mr. Teguh Halim[3](index=3&type=chunk) - As of August 30, 2025, the company's independent non-executive directors include Dr. KWONG Chun Wai, Mr. KAM Chak Ming, and Ms. CHAN Lai Wah[3](index=3&type=chunk)

[Condensed Consolidated Statement of Profit or Loss](index=1&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss) This section provides an overview of the Group's financial performance, highlighting revenue, cost of sales, gross profit, and net loss for the period [Overview of Condensed Consolidated Statement of Profit or Loss](index=1&type=section&id=Overview%20of%20Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss) For the six months ended June 30, 2025, the Group's revenue decreased by 2.9% to HK$27,461 thousand, but gross profit significantly increased by 81.6% to HK$12,549 thousand, and loss for the period narrowed by 20.1% to HK$20,314 thousand, primarily due to reduced operating expenses Condensed Consolidated Statement of Profit or Loss Summary | Indicator | June 30, 2025 (HK$ thousand) | June 30, 2024 (HK$ thousand) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 27,461 | 28,283 | -2.9% | | Cost of sales | (14,912) | (21,374) | -30.3% | | Gross profit | 12,549 | 6,909 | +81.6% | | Other income | 2,331 | 6,749 | -65.4% | | Distribution costs | (341) | (1,071) | -68.1% | | Administrative expenses | (26,542) | (29,257) | -9.3% | | Operating loss | (12,003) | (16,670) | -28.0% | | Finance costs | (8,259) | (8,761) | -5.7% | | Loss before tax | (20,262) | (25,431) | -20.3% | | Income tax expense | (52) | — | N/A | | Loss for the period | (20,314) | (25,431) | -20.1% | | Loss for the period attributable to owners of the Company | (20,046) | (26,039) | -23.0% | | Basic loss per share | (0.06) | (0.08) | -25.0% | [Condensed Consolidated Statement of Comprehensive Income](index=3&type=section&id=Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) This section presents the Group's total comprehensive loss for the period, including exchange differences from overseas operations [Overview of Condensed Consolidated Statement of Comprehensive Income](index=3&type=section&id=Overview%20of%20Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) For the six months ended June 30, 2025, the Group's total comprehensive loss narrowed to HK$20,280 thousand from HK$26,540 thousand in the prior year, driven by a reduced loss for the period and a positive shift in exchange differences from overseas operations Condensed Consolidated Statement of Comprehensive Income Summary | Indicator | June 30, 2025 (HK$ thousand) | June 30, 2024 (HK$ thousand) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Loss for the period | (20,314) | (25,431) | -20.1% | | Exchange differences arising from translation of overseas operations | 34 | (1,109) | N/A | | Total comprehensive loss for the period | (20,280) | (26,540) | -23.6% | | Total comprehensive loss for the period attributable to owners of the Company | (20,012) | (27,148) | -26.3% | [Condensed Consolidated Statement of Financial Position](index=4&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) This section details the Group's assets, liabilities, and equity at the end of the reporting period, reflecting its financial health [Overview of Condensed Consolidated Statement of Financial Position](index=4&type=section&id=Overview%20of%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the Group's total assets increased to HK$90,834 thousand, primarily due to a significant rise in cash and bank balances, while net current liabilities and net liabilities decreased, indicating a slight improvement in financial position despite high current liabilities Condensed Consolidated Statement of Financial Position Summary | Indicator | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Non-current assets | 36,990 | 43,418 | -14.8% | | Current assets | 53,844 | 43,741 | +23.1% | | Current liabilities | 260,109 | 260,541 | -0.2% | | Net current liabilities | (206,265) | (216,800) | +4.9% | | Total assets less current liabilities | (169,275) | (173,382) | +2.4% | | Non-current liabilities | 3,647 | 5,868 | -37.8% | | Net liabilities | (172,922) | (179,250) | +3.5% | | Capital deficiency | (172,922) | (179,250) | +3.5% | | Cash and bank balances | 29,719 | 8,491 | +249.9% | | Trade receivables | 10,401 | 19,455 | -46.5% | | Trade payables | 2,066 | 3,786 | -45.4% | | Loans from related parties (current) | 190,683 | 212,721 | -10.4% | - The Group recorded a **net loss of HK$20,314 thousand**, **net current liabilities of HK$206,265 thousand**, and **net liabilities of HK$172,922 thousand** at the period-end, indicating significant uncertainty regarding its ability to continue as a going concern[16](index=16&type=chunk) - The Board considers the preparation of financial statements on a going concern basis appropriate, expecting sufficient financial resources for the next 12 months and planning measures to improve liquidity, including strengthening trade receivables collection, cost control, revenue enhancement, and negotiating deferred repayments with creditors[17](index=17&type=chunk)[19](index=19&type=chunk) [Condensed Consolidated Statement of Changes in Equity](index=6&type=section&id=Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) This section outlines the changes in the Group's total equity deficiency, reflecting the impact of comprehensive loss and capital injections [Overview of Condensed Consolidated Statement of Changes in Equity](index=6&type=section&id=Overview%20of%20Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) For the six months ended June 30, 2025, the Group's total equity deficiency decreased from HK$179,250 thousand at the beginning of the period to HK$172,922 thousand at the end, mainly due to a **HK$26,608 thousand capital injection** offsetting the **HK$20,280 thousand total comprehensive loss** for the period Condensed Consolidated Statement of Changes in Equity Summary | Indicator | June 30, 2025 (HK$ thousand) | June 30, 2024 (HK$ thousand) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Total equity of the Group at 1 January | (179,250) | (252,815) | +29.1% | | Total comprehensive loss for the period | (20,280) | (26,540) | +23.6% | | Capital injection | 26,608 | 148 | +17878.4% | | Total equity of the Group at 30 June | (172,922) | (279,207) | +38.1% | [Condensed Consolidated Statement of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) This section presents the Group's cash inflows and outflows from operating, investing, and financing activities, showing the net change in cash and cash equivalents [Overview of Condensed Consolidated Statement of Cash Flows](index=7&type=section&id=Overview%20of%20Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) For the six months ended June 30, 2025, the Group's net increase in cash and cash equivalents was HK$23,418 thousand, primarily driven by **HK$18,526 thousand net cash from financing activities** and a **HK$455 thousand net cash inflow from operating activities**, significantly improving its cash position Condensed Consolidated Statement of Cash Flows Summary | Indicator | June 30, 2025 (HK$ thousand) | June 30, 2024 (HK$ thousand) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Net cash generated from (used in) operating activities | 455 | (4,113) | N/A | | Net cash generated from investing activities | 4,437 | 498 | +791.0% | | Net cash generated from financing activities | 18,526 | 4,000 | +363.1% | | Net increase in cash and cash equivalents | 23,418 | 385 | +5969.6% | | Cash and cash equivalents at 30 June | 29,719 | 9,488 | +213.2% | [Notes to the Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and disclosures supporting the condensed consolidated financial statements, covering accounting policies, segment information, and other financial details [1. General Information and Basis of Preparation](index=8&type=section&id=1.%20General%20Information%20and%20Basis%20of%20Preparation) The Group is an investment holding company listed on the Hong Kong Stock Exchange, and despite ongoing going concern uncertainties, the board prepares financial statements on a going concern basis, planning measures to improve financial health - The Company is an investment holding company with its shares listed on the Main Board of The Stock Exchange of Hong Kong Limited[15](index=15&type=chunk) - The Group incurred a **net loss of HK$20,314 thousand** and generated **operating cash inflow of HK$455 thousand** for the six months ended June 30, 2025, with **net current liabilities of HK$206,265 thousand** and **net liabilities of HK$172,922 thousand**, indicating significant uncertainty that may cast substantial doubt on its ability to continue as a going concern[16](index=16&type=chunk) - The Board considers the preparation of the condensed consolidated financial statements on a going concern basis appropriate, and will take measures to manage liquidity needs and improve financial position, including monitoring trade receivables, strengthening cost control, enhancing revenue, negotiating deferred debt repayments with creditors, and extending related party loan repayment dates to June 30, 2026, by the ultimate controlling party[17](index=17&type=chunk)[19](index=19&type=chunk) [2. Principal Accounting Policies](index=9&type=section&id=2.%20Principal%20Accounting%20Policies) The condensed consolidated financial statements are prepared primarily under the historical cost convention, adhering to HKAS 34 and Listing Rules, with no significant impact from newly adopted HKFRSs during the period - The condensed consolidated financial statements are prepared on the historical cost basis and in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting" and the applicable disclosure provisions of the Listing Rules[18](index=18&type=chunk) - The application of new and revised Hong Kong Financial Reporting Standards (including HKAS 21 (Amendment) Lack of Exchangeability) during the period had no significant impact on the Group's financial performance and position and/or disclosures in these condensed consolidated financial statements for the current and prior periods[20](index=20&type=chunk)[21](index=21&type=chunk) [3. Segment Information](index=10&type=section&id=3.%20Segment%20Information) The Group operates in six reportable segments: online gaming, cloud computing and data storage, e-sports, property investment, household products, and money lending, with e-sports showing significant revenue growth and a return to profitability - The Group is organised into six reportable segments: online gaming, e-sports, cloud computing and data storage, property investment, and others (referring to household products and money lending)[22](index=22&type=chunk) Segment Performance Summary | Segment | 2025 Revenue (HK$ thousand) | 2024 Revenue (HK$ thousand) | Revenue Change (%) | 2025 Segment (Loss)/Profit (HK$ thousand) | 2024 Segment (Loss)/Profit (HK$ thousand) | | :--- | :--- | :--- | :--- | :--- | :--- | | Online Gaming | 9,584 | 12,404 | -22.7% | (4,540) | (6,446) | | Cloud Computing & Data Storage | 1,473 | 2,152 | -31.6% | (6,178) | (7,649) | | E-sports | 15,511 | 12,002 | +29.2% | 1,048 | (408) | | Property Investment | 693 | 622 | +11.4% | 1,241 | 2,534 | | Other | 200 | 1,103 | -81.9% | 186 | (150) | | **Total** | **27,461** | **28,283** | **-2.9%** | **(8,243)** | **(12,119)** | - Total assets increased from approximately **HK$82,965 thousand** as of December 31, 2024, to approximately **HK$73,075 thousand** (total reportable segment assets) as of June 30, 2025, with total consolidated assets at **HK$90,834 thousand**[24](index=24&type=chunk) [4. Other Income](index=12&type=section&id=4.%20Other%20Income) For the six months ended June 30, 2025, the Group's total other income significantly decreased by 65.4% to HK$2,331 thousand, primarily due to lower gains from disposal of mining equipment and net fair value gains on investment properties Other Income Details | Item | June 30, 2025 (HK$ thousand) | June 30, 2024 (HK$ thousand) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Government grants | 24 | 40 | -40.0% | | Bank interest income | — | 5 | -100.0% | | Net fair value gain on investment properties | 523 | 1,912 | -72.6% | | Gain on disposal of cryptocurrency | — | 121 | -100.0% | | Gain on disposal of property, plant and equipment | 1,702 | 2,866 | -40.7% | | Others | 82 | 1,805 | -95.5% | | **Total** | **2,331** | **6,749** | **-65.4%** | [5. Income Tax Expense](index=12&type=section&id=5.%20Income%20Tax%20Expense) The Group's income tax expense is calculated based on local tax rates, with Hong Kong entities subject to a two-tiered profits tax, Chinese subsidiaries at 25%, and Malaysia at 24%, resulting in an expense of HK$52 thousand for the period - Eligible group entities incorporated in Hong Kong are taxed at **8.25%** on the first **HK$2,000,000** of assessable profits and **16.5%** on profits exceeding this amount[26](index=26&type=chunk) - Corporate income tax for Chinese subsidiaries is provided at a rate of **25%**, and for Malaysian entities at **24%**[26](index=26&type=chunk)[27](index=27&type=chunk) Income Tax Expense Summary | Indicator | June 30, 2025 (HK$ thousand) | June 30, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Income tax expense | (52) | — | [6. Dividends](index=13&type=section&id=6.%20Dividends) The Board decided not to declare any dividends for the interim period ended June 30, 2025, consistent with the prior year - No dividends were paid, declared, or proposed during the period, and the directors decided not to pay a dividend for this interim period (2024: nil)[28](index=28&type=chunk) [7. Loss Per Share](index=13&type=section&id=7.%20Loss%20Per%20Share) For the six months ended June 30, 2025, both basic and diluted loss per share improved to HK$0.06, down from HK$0.08 in the prior year, mainly due to a reduced loss attributable to owners of the Company Loss Per Share Calculation | Indicator | June 30, 2025 (HK$ thousand) | June 30, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Loss attributable to owners of the Company | (20,046) | (26,039) | | Weighted average number of ordinary shares | 353,473,000 | 311,036,000 | | Basic and diluted loss per share | (0.06) | (0.08) | - Diluted loss per share is the same as basic loss per share because the potential ordinary shares from share options have an anti-dilutive effect and are therefore not included in the calculation[31](index=31&type=chunk) [8. Property, Plant and Equipment](index=13&type=section&id=8.%20Property,%20Plant%20and%20Equipment) For the six months ended June 30, 2025, the Group acquired approximately HK$98 thousand in property, plant, and equipment and recognized a gain of approximately HK$1,702 thousand from the disposal of mining equipment Property, Plant and Equipment Movements | Item | June 30, 2025 (HK$ thousand) | June 30, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Additions to property, plant and equipment | 98 | 181 | | Gain on disposal of property, plant and equipment | 1,702 | 2,866 | [9. Trade Receivables](index=14&type=section&id=9.%20Trade%20Receivables) As of June 30, 2025, the Group's total trade receivables significantly decreased by 46.5% to HK$10,401 thousand from December 31, 2024, primarily due to a substantial reduction in receivables over 90 days past due - The Group primarily transacts with customers on credit terms, typically ranging from **30 to 90 days**[34](index=34&type=chunk) Trade Receivables Aging Analysis | Aging | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | 0 to 30 days | 7,393 | 5,888 | | 31 to 60 days | 308 | 827 | | 61 to 90 days | 712 | 2,772 | | Over 90 days | 1,988 | 9,968 | | **Total** | **10,401** | **19,455** | [10. Trade Payables](index=14&type=section&id=10.%20Trade%20Payables) As of June 30, 2025, the Group's total trade payables decreased by 45.4% to HK$2,066 thousand from December 31, 2024, with reductions across all aging categories - The credit period granted to the Group by its suppliers generally ranges from **30 to 90 days**[35](index=35&type=chunk) Trade Payables Aging Analysis | Aging | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | 0 to 30 days | 1,061 | 560 | | 31 to 60 days | 297 | 556 | | 61 to 90 days | 257 | 737 | | Over 90 days | 451 | 1,933 | | **Total** | **2,066** | **3,786** | [11. Loans from Related Parties](index=15&type=section&id=11.%20Loans%20from%20Related%20Parties) As of June 30, 2025, the Group's total principal loans from related parties amounted to HK$212,040 thousand, a decrease from 2024, with all loans due in 2026, unsecured, and bearing interest rates from 0% to 2% - As of June 30, 2025, the Group received loans with a total principal amount of **HK$212,040 thousand** (2024: HK$219,000 thousand) from Mr. Cheng and related companies beneficially owned and controlled by Mr. Cheng[36](index=36&type=chunk) - These loans are unsecured, bear interest at rates ranging from **0% to 2% per annum**, and their fair value is estimated using current market interest rates between **11.41% and 15.28%**[36](index=36&type=chunk) Loans from Related Parties Repayment Schedule | Repayment Time | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Within one year | 190,683 | 212,721 | | After one year but within two years | — | 1,963 | | **Total** | **190,683** | **214,684** | [12. Share Capital](index=15&type=section&id=12.%20Share%20Capital) As of June 30, 2025, the Company's authorized share capital was HK$50,000 thousand, with issued and fully paid share capital of HK$3,732 thousand, comprising 373,243,200 ordinary shares of HK$0.01 each, consistent with December 31, 2024 Share Capital Structure | Item | Number of Shares | Par Value (HK$ thousand) | | :--- | :--- | :--- | | Authorised ordinary shares | 500,000,000 | 50,000 | | Issued and fully paid ordinary shares (as of June 30, 2025) | 373,243,200 | 3,732 | [13. Operating Lease Arrangements](index=16&type=section&id=13.%20Operating%20Lease%20Arrangements) As a lessor, the Group's operating leases primarily involve self-owned investment properties and plant and machinery with lease terms of 1 to 3 years, generating total rental income of HK$1,133 thousand for the period - The Group, as a lessor, has operating leases related to its self-owned investment properties and plant and machinery with lease terms of **1 to 3 years**[39](index=39&type=chunk) Operating Lease Commitments and Income | Item | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Minimum lease payments receivable within one year | 1,277 | 585 | | Minimum lease payments receivable in the second year | 531 | 429 | | **Total minimum lease payments receivable** | **1,808** | **1,014** | | Rental income from investment properties | 693 | 1,257 | | Rental income from plant and machinery | 440 | 965 | | **Total rental income** | **1,133** | **2,222** | [14. Fair Value Measurement](index=17&type=section&id=14.%20Fair%20Value%20Measurement) The Group's investment properties, specifically office units in Malaysia, are measured at fair value using the income approach and classified as Level 3, with a fair value of HK$21,681 thousand and a net fair value gain of HK$523 thousand recognized for the period - The Group's investment properties (office units in Malaysia) are measured at fair value using the income approach and classified as Level 3[42](index=42&type=chunk)[48](index=48&type=chunk) Investment Properties Fair Value Summary | Item | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Fair value of investment properties | 21,681 | 19,699 | | Net fair value gain recognized in profit or loss | 523 | 104 | | Exchange differences | 1,459 | 426 | - The valuation technique uses a **reversionary yield (2025: 6.5%)** and **market rent per square foot per month (2025: RM3.2)** as significant unobservable parameters[48](index=48&type=chunk) [15. Related Party Transactions](index=20&type=section&id=15.%20Related%20Party%20Transactions) The Group engages in various related party transactions, including interest expenses paid to related parties, rental income received, and revenue from game publishing services, with key management personnel remuneration totaling HK$1,623 thousand for the period Related Party Transactions Summary | Item | June 30, 2025 (HK$ thousand) | June 30, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Directors' remuneration | 1,623 | 1,488 | | Interest expenses paid to related parties | (7,805) | (8,939) | | Rental income from Mr. Cheng | 2 | 134 | | Revenue from game publishing services from Empire Entertainment & Gaming Interactive Limited | — | 3,067 | Related Party Balances (Payable) | Related Party Balance (Payable) | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Empire Credit Finance Limited | (5,100) | (5,100) | | Sun International Group Limited | (102,244) | (113,750) | | Empire Group (Holdings) Limited | (45,033) | (53,150) | | Mr. Cheng | (50,904) | (53,634) | | Mr. Yeung Tung Sing | (600) | (600) | | Empire Entertainment & Gaming Interactive Limited (Payable) | (320) | 2,748 | | **Total** | **(204,201)** | **(223,486)** | [Business Review and Outlook](index=22&type=section&id=Business%20Review%20and%20Outlook) This section provides an overview of the Group's business performance across its segments, industry trends, and future strategic directions [Industry Review](index=22&type=section&id=Industry%20Review) Global economic growth is projected at 3.2% in 2024 and 3.5% in 2025, with the global gaming market expected to grow at a 3.1% CAGR from 2022 to 2027, and the digital economy continuing robust growth driven by AI, software, and cybersecurity - Global economic growth is forecast at **3.2% in 2024** and **3.5% in 2025**[55](index=55&type=chunk) - Total revenue in the global gaming market is expected to grow at a **compound annual growth rate of 3.1%** between 2022 and 2027[55](index=55&type=chunk) - The digital economy continues its strong growth, driven by powerful forces such as Artificial Intelligence (AI), software, and cybersecurity developments[55](index=55&type=chunk) [Business Review](index=22&type=section&id=Business%20Review) The Group has transformed into a leader in online game publishing, cloud computing, and e-sports, with total revenue decreasing by 2.9% to HK$27,461 thousand, while loss attributable to shareholders narrowed to HK$20,046 thousand due to reduced R&D costs - The Group has transformed into a leading enterprise in three pillar areas: online game publishing, cloud computing-related services, and e-sports[56](index=56&type=chunk) - Total revenue for the period decreased by approximately **2.9%** year-on-year to approximately **HK$27,461 thousand**, mainly due to reduced sales in the household products segment and the lack of contribution from the Metasens project[56](index=56&type=chunk) - The loss attributable to shareholders of the Company was approximately **HK$20,046 thousand**, with the reduction in loss primarily due to decreased research and development costs for Holosens[56](index=56&type=chunk) [Online Gaming Business](index=22&type=section&id=Online%20Gaming%20Business) Online gaming revenue decreased by 22.7% to HK$9,584 thousand, primarily due to scaling back Holosens development and the cessation of "Myth of Empires" revenue contribution, resulting in a segment loss of HK$4,540 thousand Online Gaming Business Performance | Indicator | June 30, 2025 (HK$ thousand) | June 30, 2024 (HK$ thousand) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 9,584 | 12,404 | -22.7% | | Segment loss | (4,540) | (6,446) | +29.6% | - The Group scaled back the development of Holosens, and "Myth of Empires," which contributed approximately **HK$3,067 thousand** in segment revenue in 2024, no longer contributed during the period[57](index=57&type=chunk)[58](index=58&type=chunk) [Cloud Computing and Data Storage Business](index=23&type=section&id=Cloud%20Computing%20and%20Data%20Storage%20Business) Cloud computing and data storage revenue decreased by 31.6% to HK$1,473 thousand, mainly due to reduced Filecoin unit output, leading to a segment loss of HK$6,178 thousand, with future plans to explore Web3 opportunities and IT consulting Cloud Computing and Data Storage Business Performance | Indicator | June 30, 2025 (HK$ thousand) | June 30, 2024 (HK$ thousand) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 1,473 | 2,152 | -31.6% | | Segment loss | (6,178) | (7,649) | +19.2% | - The decrease in revenue was primarily due to a reduction in Filecoin unit output as the system scaled up[59](index=59&type=chunk) - The segment loss was mainly attributable to the decline in the market price of cryptocurrencies and the termination of the Bitcoin business[59](index=59&type=chunk) - Looking ahead, the Group will explore Web3 development opportunities and the possibility of providing IT consulting services[59](index=59&type=chunk) [E-sports Business](index=23&type=section&id=E-sports%20Business) E-sports revenue grew by 29.2% to HK$15,511 thousand, achieving a segment profit of HK$1,048 thousand, reversing last year's loss, driven by strong performance from its League of Legends mobile and Valorant teams E-sports Business Performance | Indicator | June 30, 2025 (HK$ thousand) | June 30, 2024 (HK$ thousand) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 15,511 | 12,002 | +29.2% | | Segment profit/(loss) | 1,048 | (408) | N/A | - The League of Legends mobile team and Valorant team achieved impressive results during the period and contributed to segment growth[60](index=60&type=chunk) [Other Businesses](index=23&type=section&id=Other%20Businesses) Property investment revenue increased to HK$693 thousand with a segment profit of HK$1,241 thousand, while household products and money lending revenue significantly decreased to HK$200 thousand but turned profitable at HK$186 thousand, with plans to strengthen the customer base Other Businesses Performance | Business | 2025 Revenue (HK$ thousand) | 2024 Revenue (HK$ thousand) | Revenue Change (%) | 2025 Segment Profit/(Loss) (HK$ thousand) | 2024 Segment Profit/(Loss) (HK$ thousand) | | :--- | :--- | :--- | :--- | :--- | :--- | | Property Investment | 693 | 622 | +11.4% | 1,241 | 2,534 | | Household Products & Money Lending | 200 | 1,103 | -81.9% | 186 | (150) | - The property investment segment profit was due to an increase in the fair value of investment properties during the period[61](index=61&type=chunk) - The Group will take measures to increase revenue from the household products and money lending businesses by strengthening its customer base[61](index=61&type=chunk) [Outlook](index=24&type=section&id=Outlook) The Group will continue to invest in exploring business opportunities related to blockchain technology, AI, and Web3, while proceeding cautiously to navigate the rapidly changing market environment - The Group will continue to invest resources to further explore business opportunities related to blockchain technology, AI, and Web3[62](index=62&type=chunk) - The Group will continue to act prudently in developing these projects to respond to the rapid changes in the market environment for these businesses[62](index=62&type=chunk) [Financial Review](index=24&type=section&id=Financial%20Review) For the six months ended June 30, 2025, the Group's revenue decreased by 2.9%, but gross margin significantly improved to 45.7%, leading to a 23.0% reduction in loss attributable to owners of the Company, with total assets increasing due to investment properties and cash Financial Performance Summary | Indicator | June 30, 2025 (HK$ thousand) | June 30, 2024 (HK$ thousand) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 27,500 | 28,300 | -2.9% | | Gross margin | 45.7% | 24.4% | +21.3pp | | Other income | 2,300 | 6,700 | -65.7% | | Distribution costs | 300 | 1,100 | -72.7% | | Administrative expenses | 26,500 | 29,300 | -9.5% | | Loss for the period attributable to owners of the Company | 20,000 | 26,000 | -23.1% | - Total assets increased from approximately **HK$87,200 thousand** as of December 31, 2024, to approximately **HK$90,800 thousand** as of June 30, 2025, primarily due to increases in investment properties and cash and bank balances[64](index=64&type=chunk) [Liquidity, Financial Resources, Funding and Financial Policies](index=25&type=section&id=Liquidity,%20Financial%20Resources,%20Funding%20and%20Financial%20Policies) This section details the Group's liquidity position, financial resources, funding activities, and financial management policies [Overview of Liquidity, Financial Resources, Funding and Financial Policies](index=25&type=section&id=Overview%20of%20Liquidity,%20Financial%20Resources,%20Funding%20and%20Financial%20Policies) As of June 30, 2025, the Group's cash and bank balances significantly increased to HK$29,700 thousand and current assets to HK$53,800 thousand, but it still faces HK$260,100 thousand in current liabilities, with the debt-to-asset ratio decreasing but remaining high Liquidity and Financial Resources Summary | Indicator | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Cash and bank balances | 29,700 | 8,500 | +249.4% | | Current assets | 53,800 | 43,700 | +23.1% | | Current liabilities | 260,100 | 260,500 | -0.2% | | Loans from related parties | 190,700 | 214,700 | -11.2% | - The Group entered into a revolving loan agreement with an independent third party for up to **HK$25,000 thousand** during the period, at an annual interest rate of **12%**, which has been fully drawn down[65](index=65&type=chunk) - The debt-to-asset ratio (calculated as the ratio of loans from related companies and other borrowings to total assets) decreased from **246.3%** as of December 31, 2024, to **237.4%** as of June 30, 2025[68](index=68&type=chunk) [Bank Borrowings](index=25&type=section&id=Bank%20Borrowings) The Group had no bank borrowings as of June 30, 2025, and December 31, 2024 - There were no bank borrowings as of June 30, 2025, and December 31, 2024[67](index=67&type=chunk) [Commitments](index=25&type=section&id=Commitments) The Group had no capital commitments as of June 30, 2025, and December 31, 2024 - The Group had no capital commitments as of June 30, 2025, and December 31, 2024[69](index=69&type=chunk) [Capital Structure](index=25&type=section&id=Capital%20Structure) The Company's share capital consists solely of ordinary shares - The Company's share capital consists solely of ordinary shares[70](index=70&type=chunk) [Material Acquisitions and Disposals](index=25&type=section&id=Material%20Acquisitions%20and%20Disposals) There were no material acquisitions or disposals during the period - There were no material acquisitions or disposals during the period[71](index=71&type=chunk) [Dividends](index=26&type=section&id=Dividends) The Board resolved not to declare an interim dividend for the period, consistent with the prior year - The Board resolved not to declare an interim dividend for the period (2024: nil)[72](index=72&type=chunk) [Foreign Exchange Risk](index=26&type=section&id=Foreign%20Exchange%20Risk) The Group's primary trade transactions, assets, and liabilities are denominated in RMB, USD, HKD, MYR, and THB - The Group's principal trade transactions, assets, and liabilities are denominated in Renminbi, United States Dollars, Hong Kong Dollars, Malaysian Ringgit, and Thai Baht[73](index=73&type=chunk) [Contingent Liabilities](index=26&type=section&id=Contingent%20Liabilities) The Group had no significant contingent liabilities as of June 30, 2025, and December 31, 2024 - The Group had no significant contingent liabilities as of June 30, 2025, and December 31, 2024[74](index=74&type=chunk) [Employees and Remuneration Policy](index=26&type=section&id=Employees%20and%20Remuneration%20Policy) As of June 30, 2025, the Group employed 131 staff, with total employee remuneration of approximately HK$13,059 thousand for the period, and remuneration policies are reviewed annually based on service and performance Employee Information | Indicator | June 30, 2025 | | :--- | :--- | | Number of employees | 131 | | Total employee remuneration (including directors' emoluments) | HK$13,059 thousand | - The Group reviews employee remuneration and rewards annually based on years of service and performance, and grants share options and bonuses at its discretion based on financial performance[75](index=75&type=chunk) [Use of Proceeds from Share Placement](index=26&type=section&id=Use%20of%20Proceeds%20from%20Share%20Placement) As of June 30, 2025, the net proceeds of HK$109.7 million from the share placement were fully utilized, with HK$99.7 million for loan repayment and HK$10.0 million for general working capital Share Placement Proceeds Utilization | Business Strategy | Net Proceeds (HK$ million) | Amount Utilized (HK$ million) | Unutilized Amount (HK$ million) | | :--- | :--- | :--- | :--- | | Loan repayment | 99.7 | 99.7 | — | | General working capital | 10.0 | 10.0 | — | | **Total** | **109.7** | **109.7** | **—** | [Other Information](index=27&type=section&id=Other%20Information) This section provides additional disclosures, including directors' and substantial shareholders' interests, the share option scheme, and other material contracts [Directors' and Chief Executive's Interests and Short Positions in Shares, Underlying Shares and Debentures of the Company or its Associated Corporations](index=27&type=section&id=Directors'%20and%20Chief%20Executive's%20Interests%20and%20Short%20Positions%20in%20Shares,%20Underlying%20Shares%20and%20Debentures%20of%20the%20Company%20or%20its%20Associated%20Corporations) As of June 30, 2025, Mr. Cheng held a 19.53% share interest through Diamond State Holdings Limited, and Mr. Yeung Tung Sing held 0.51% through Bluemount Investment Fund SPC, with no other directors having disclosable interests Directors' Interests in Shares | Director Name | Company Interests (Shares) | Percentage of Total Issued Shares | | :--- | :--- | :--- | | Mr. Cheng | 72,888,480 (L) | 19.53% | | Mr. Yeung Tung Sing | 1,900,000 (L) | 0.51% | - Mr. Cheng holds **72,888,480 shares** through Diamond State Holdings Limited, and Mr. Yeung Tung Sing holds **1,900,000 shares** through Bluemount Investment Fund SPC[77](index=77&type=chunk) - Mr. Cheng resigned as an executive director and chairman of the Board of the Company, effective July 3, 2025[77](index=77&type=chunk) [Substantial Shareholders](index=28&type=section&id=Substantial%20Shareholders) As of June 30, 2025, Diamond State Holdings Limited was the Company's substantial shareholder, holding 72,888,480 shares, representing 19.53% of the total issued share capital, wholly owned by Mr. Cheng Substantial Shareholders' Interests | Substantial Shareholder Name | Number of Shares Held | Capacity | Approximate Percentage of Total Issued Share Capital of the Company | | :--- | :--- | :--- | :--- | | Diamond State | 72,888,480 | Beneficial owner | 19.53% | | Mr. Cheng | 72,888,480 | Interest of controlled corporation | 19.53% | - **100%** of the issued share capital of Diamond State is owned by Mr. Cheng, who is therefore deemed to be interested in **72,888,480 shares** of the Company[79](index=79&type=chunk) [Share Option Scheme](index=29&type=section&id=Share%20Option%20Scheme) The Company adopted a share option scheme on June 27, 2025, to recognize and incentivize eligible participants, with 4,732,432 options outstanding as of June 30, 2025, and specific terms for exercise price, grant limits, and vesting periods - The Share Option Scheme was adopted on June 27, 2025, to recognise and acknowledge the contributions of eligible participants to the Group and to encourage them to enhance the value of the Company[80](index=80&type=chunk)[82](index=82&type=chunk) - Eligible participants include employee participants and service providers, with the Board determining eligibility based on various factors[83](index=83&type=chunk)[84](index=84&type=chunk) - The exercise price for each share option shall not be less than the higher of the closing price on the date of grant and the average closing price for the five business days immediately preceding the date of grant[85](index=85&type=chunk) Share Option Scheme Key Terms | Item | Value | | :--- | :--- | | Total number of share options available for grant as of June 30, 2025 | 37,324,320 options | | Total number of shares that may be issued and percentage of issued share capital | 42,056,752 shares (approximately 11.27%) | | Maximum number of new shares that may be granted under the Share Option Scheme | 10% of total issued shares on adoption date | | Maximum number of new shares that may be issued to service providers | 2.5% of total issued shares on adoption date | | Maximum entitlement for each participant | 1% of issued shares in any 12-month period | | Minimum vesting period before exercise of share options | Not less than 12 months | | Remaining term of the Share Option Scheme | 10 years from June 27, 2025 | Outstanding Share Options | Name | Number of Outstanding Share Options as of January 1, 2025 | Number of Outstanding Share Options as of June 30, 2025 | | :--- | :--- | :--- | | Lam Chun Wai | 311,036 | 311,036 | | Yeung Tung Sing | 3,110,360 | 3,110,360 | | Li Ting Ting | 1,000,000 | 1,000,000 | | Luk Wai Keung | 311,036 | 311,036 | | **Total** | **4,732,432** | **4,732,432** | - The fair value of share options is calculated using a binomial model, referencing valuations by independent professional valuers, and considering parameters such as share price, exercise price, expected volatility, expected life, expected dividend yield, and risk-free interest rate[95](index=95&type=chunk)[96](index=96&type=chunk) [Directors' Interests in Material Contracts](index=33&type=section&id=Directors'%20Interests%20in%20Material%20Contracts) Except for disclosed connected and/or related party transactions, no directors had a significant direct or indirect interest in any material contract entered into by the Company or its subsidiaries or holding company during the review period - Save for transactions disclosed as connected and/or related party transactions in accordance with the requirements of the Listing Rules and Hong Kong Generally Accepted Accounting Principles, no director had a significant direct or indirect interest in any material contract entered into by the Company or any of its subsidiaries or its holding company that was subsisting at the end of the review period or at any time during the review period[97](index=97&type=chunk) [Purchase, Sale or Redemption of Shares](index=33&type=section&id=Purchase,%20Sale%20or%20Redemption%20of%20Shares) Neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's shares during the period - Neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's shares during the period[98](index=98&type=chunk) [Corporate Governance](index=34&type=section&id=Corporate%20Governance) This section outlines the Group's commitment to maintaining high corporate governance standards and compliance with the Listing Rules' Corporate Governance Code [Overview of Corporate Governance](index=34&type=section&id=Overview%20of%20Corporate%20Governance) The Group is committed to high corporate governance standards, fully complying with the Listing Rules' Corporate Governance Code during the period, with the Audit Committee reviewing interim financial statements and all directors confirming adherence to securities transaction standards - The Company has complied in all material respects with the principles and code provisions of the Corporate Governance Code and Corporate Governance Report as set out in Appendix C1 to the Listing Rules during the period[99](index=99&type=chunk) [Audit Committee](index=34&type=section&id=Audit%20Committee) The Audit Committee, composed of three independent non-executive directors, reviews interim and annual reports, provides recommendations to the Board, and oversees internal control procedures, having reviewed the unaudited condensed consolidated financial statements for the period - The Audit Committee, comprising three independent non-executive directors, is primarily responsible for reviewing the Company's interim and annual reports and accounts, providing advice and recommendations to the Board, and overseeing the Group's internal control procedures[100](index=100&type=chunk) - The Audit Committee has reviewed the unaudited condensed consolidated financial statements for the period[101](index=101&type=chunk) [Model Code for Securities Transactions by Directors](index=34&type=section&id=Model%20Code%20for%20Securities%20Transactions%20by%20Directors) The Company adopted the Model Code for Securities Transactions by Directors as set out in Appendix 10 of the Listing Rules, and all directors confirmed compliance with its required standards during the period - The Company has adopted the Model Code for Securities Transactions by Directors as set out in Appendix 10 to the Listing Rules as its own code of conduct for directors' securities transactions[102](index=102&type=chunk) - Following specific enquiries, all directors confirmed their compliance with the required standards set out in the Model Code during the period[102](index=102&type=chunk)

[Financial Highlights](index=1&type=section&id=Financial%20Highlights) Yuzhou Group's H1 2025 unaudited results show a **14.21% decline in contracted sales** to **RMB 3.72851 billion** and a **62.42% revenue drop** to **RMB 2.39652 billion**, while loss attributable to owners of the parent narrowed by **9.97%** to **RMB 5.63206 billion** 2025 H1 Key Financial Indicators Comparison | Indicator | 2025 H1 (RMB thousand) | 2024 H1 (RMB thousand) | Year-on-year Change (%) | | :--- | :--- | :--- | :--- | | Contracted Sales | 3,728,510 | 4,346,239 | -14.21 | | Revenue | 2,396,521 | 6,377,536 | -62.42 | | Loss attributable to owners of the parent | (5,632,062) | (6,255,983) | 9.97 (loss narrowed) | [Condensed Consolidated Financial Statements](index=2&type=section&id=Condensed%20Consolidated%20Financial%20Statements) This section presents Yuzhou Group's condensed consolidated income statement, statement of comprehensive income, and statement of financial position for the six months ended June 30, 2025, revealing significant revenue decline, continued losses, and increased net current liabilities and net liabilities, reflecting severe operational and financial pressures [Condensed Consolidated Income Statement](index=2&type=section&id=Condensed%20Consolidated%20Income%20Statement) For H1 2025, Yuzhou Group's revenue decreased by **62.42%** to **RMB 2.39652 billion**, gross profit significantly narrowed to **RMB 22.55 million**, and loss for the period was **RMB 7.39153 billion**, impacted by increased fair value losses on investment properties and administrative expenses Condensed Consolidated Income Statement Key Data (Six Months Ended June 30) | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 2,396,521 | 6,377,536 | -62.42 | | Cost of sales | (2,373,971) | (6,269,505) | -62.13 | | Gross profit | 22,550 | 108,031 | -79.13 | | Net fair value loss on investment properties | (727,389) | (346,271) | 110.07 | | Administrative expenses | (684,847) | (201,699) | 239.55 | | Write-down of properties held for sale and properties under development to net realisable value | (2,923,061) | (3,300,538) | -11.44 | | Loss before tax | (7,578,223) | (7,890,109) | 3.95 (loss narrowed) | | Loss for the period | (7,391,533) | (8,012,801) | 7.75 (loss narrowed) | | Loss attributable to owners of the parent | (5,632,062) | (6,255,983) | 9.97 (loss narrowed) | | Basic loss per share (RMB cents) | (88.28) | (97.79) | 9.72 (loss narrowed) | [Condensed Consolidated Statement of Comprehensive Income](index=3&type=section&id=Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) For H1 2025, Yuzhou Group's total comprehensive loss narrowed to **RMB 7.29357 billion** from **RMB 8.31998 billion** in the prior year, primarily due to a positive shift in exchange differences from overseas operations Condensed Consolidated Statement of Comprehensive Income Key Data (Six Months Ended June 30) | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Loss for the period | (7,391,533) | (8,012,801) | 7.75 (loss narrowed) | | Exchange differences on translation of overseas operations | 97,959 | (307,178) | 131.89 (from loss to gain) | | Total comprehensive loss for the period | (7,293,574) | (8,319,979) | 12.34 (loss narrowed) | | Total comprehensive loss attributable to owners of the parent | (5,534,103) | (6,563,161) | 15.68 (loss narrowed) | [Condensed Consolidated Statement of Financial Position](index=4&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, Yuzhou Group's total non-current and current assets declined, with net current liabilities and net liabilities worsening, and capital deficiency expanding to **RMB 19.44661 billion**, indicating severe liquidity and solvency pressures Condensed Consolidated Statement of Financial Position Key Data (As of June 30) | Indicator | 2025 June 30 (RMB thousand) | 2024 Dec 31 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Total non-current assets | 19,592,612 | 20,891,513 | -6.22 | | Total current assets | 54,944,885 | 62,175,342 | -11.63 | | Properties under development | 13,526,029 | 18,112,748 | -25.32 | | Prepayments, other receivables and other assets | 22,452,918 | 24,856,097 | -9.67 | | Total current liabilities | 85,698,233 | 85,976,898 | -0.32 | | Net current liabilities | (30,753,348) | (23,801,556) | 29.21 (deterioration) | | Net liabilities | (19,446,614) | (11,735,686) | 65.71 (deterioration) | | Equity attributable to owners of the parent | (18,214,103) | (12,547,450) | 45.16 (deterioration) | | Capital deficiency | (19,446,614) | (11,735,686) | 65.71 (deterioration) | [Notes](index=6&type=section&id=Notes) This section details Yuzhou Group's financial statement preparation, accounting policies, revenue and expense components, segment information, and key financial liabilities, highlighting ongoing operational challenges, including senior note defaults, increased net current liabilities and net liabilities, and implemented debt restructuring and operational measures - The Group's condensed consolidated financial statements are prepared on a going concern basis, despite having defaulted on senior notes, with all senior notes reclassified as current liabilities[13](index=13&type=chunk) - As of June 30, 2025, the Group's total principal of interest-bearing bank and other borrowings, corporate bonds, and senior notes amounted to **RMB 51.971635 billion**, while cash and cash equivalents were only **RMB 1.29684 billion**[13](index=13&type=chunk) - The Group has formulated and implemented multiple measures to alleviate cash flow pressure, including an offshore debt restructuring plan (effective August 29, 2025), promoting sales to reduce inventory, ensuring project delivery, asset disposal, continuous cash flow monitoring, and implementing cost controls[13](index=13&type=chunk)[17](index=17&type=chunk) [Company and Group Information](index=6&type=section&id=Company%20and%20Group%20Information) Yuzhou Group Holdings Company Limited, a Cayman Islands-incorporated entity listed on the HKEX, primarily engages in property development, investment, management, and hotel operations in mainland China and Hong Kong, with Mr. Lam Lung On and Ms. Kwok Ying Lan as controlling shareholders - Company's main businesses include property development, property investment, property management, and hotel operations, primarily in mainland China and Hong Kong[11](index=11&type=chunk) - Mr. Lam Lung On and Ms. Kwok Ying Lan are the controlling shareholders of the Company[12](index=12&type=chunk) [Basis of Presentation and Preparation](index=6&type=section&id=Basis%20of%20Presentation%20and%20Preparation) The Group's condensed consolidated financial statements are prepared on a going concern basis, despite senior note defaults and severe liquidity challenges, with an offshore debt restructuring plan implemented and measures taken to ensure sufficient working capital for at least the next 12 months [Basis of Presentation](index=6&type=section&id=Basis%20of%20Presentation) The Group's condensed consolidated financial statements are prepared on a going concern basis, despite facing senior note defaults and significant increases in net current liabilities and net liabilities, with an offshore debt restructuring plan implemented and measures taken to ensure sufficient working capital for the next 12 months - The Group failed to pay principal and interest on certain senior notes when due and after the expiry of the relevant grace periods, resulting in default events, with all senior notes reclassified as current liabilities[13](index=13&type=chunk) 2025 June 30 Key Financial Position | Indicator | Amount (RMB thousand) | | :--- | :--- | | Total principal of interest-bearing bank and other borrowings, corporate bonds, and senior notes | 51,971,635 | | Cash and cash equivalents | 1,296,840 | | Loss attributable to owners of the parent | (5,632,062) | | Net current liabilities | (30,753,348) | | Net liabilities | (19,446,614) | - The Group has formulated and implemented multiple measures to alleviate cash flow pressure, including an offshore debt restructuring plan (effective August 29, 2025), which will replace original debts with short-term notes, cash consideration, medium-term notes, new equity, and long-term notes[13](index=13&type=chunk) [Basis of Preparation](index=7&type=section&id=Basis%20of%20Preparation) The condensed consolidated financial statements are prepared in accordance with HKAS 34 "Interim Financial Reporting" and HKEX Listing Rules Appendix D2, using consistent accounting policies and methods as the 2024 annual financial statements, except for changes due to amendments to HKFRS accounting standards - The condensed consolidated financial statements are prepared in accordance with HKAS 34 "Interim Financial Reporting" and the applicable disclosure requirements of Appendix D2 of the HKEX Listing Rules[15](index=15&type=chunk) - Accounting policies remain consistent with the 2024 annual financial statements, except for changes due to amendments to HKFRS accounting standards[15](index=15&type=chunk) [Application of Amendments to HKFRS Accounting Standards](index=7&type=section&id=Application%20of%20Amendments%20to%20HKFRS%20Accounting%20Standards) During this interim period, the Group first applied amendments to HKAS 21 "Lack of Exchangeability," which became effective on January 1, 2025, but these amendments did not significantly alter the Group's accounting policies, financial position, or performance presentation or disclosure - The Group first applied amendments to HKAS 21 "Lack of Exchangeability", effective January 1, 2025[16](index=16&type=chunk) - The amendments did not result in significant changes to the Group's accounting policies, financial position, and performance presentation and/or disclosure[16](index=16&type=chunk) [Revenue, Other Income and Gains](index=8&type=section&id=Revenue%2C%20Other%20Income%20and%20Gains) For H1 2025, Yuzhou Group's total revenue significantly decreased by **62.42%** to **RMB 2.39652 billion**, primarily due to a **64.52% drop** in property sales revenue, while other income and gains also declined by **38.09%** due to reduced bank interest income Revenue, Other Income and Gains Analysis (Six Months Ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | **Revenue** | | | | | Property sales | 2,174,382 | 6,128,391 | -64.52 | | Rental income from investment properties | 116,897 | 122,619 | -4.67 | | Property management fee income | 105,234 | 125,423 | -16.09 | | Hotel operation income | 8 | 1,103 | -99.27 | | **Total Revenue** | **2,396,521** | **6,377,536** | **-62.42** | | **Other income and gains** | | | | | Bank interest income | 13,834 | 27,398 | -49.51 | | Others | 5,797 | 4,310 | 34.50 | | **Total Other Income and Gains** | **19,631** | **31,708** | **-38.09** | [Operating Segment Information](index=8&type=section&id=Operating%20Segment%20Information) Yuzhou Group's operating segments include property development, property investment, property management, hotel operations, and others; in H1 2025, property development and investment incurred significant losses, with only property management achieving profitability, and over **90%** of external customer revenue and segment assets originating from mainland China - The Group is divided into five reportable operating segments: property development, property investment, property management, hotel operations, and others[19](index=19&type=chunk)[20](index=20&type=chunk) Segment Revenue and Results (Six Months Ended June 30) | Segment | 2025 Segment Revenue (RMB thousand) | 2025 Segment Results (RMB thousand) | 2024 Segment Revenue (RMB thousand) | 2024 Segment Results (RMB thousand) | | :--- | :--- | :--- | :--- | :--- | | Property development | 2,179,662 | (5,122,374) | 6,131,727 | (5,849,235) | | Property investment | 117,351 | (619,394) | 123,250 | (291,290) | | Property management | 105,287 | 33,945 | 125,440 | 117,917 | | Hotel operations | 8 | (162) | 1,103 | 954 | | Others | 10 | (9,860) | 326 | 2,331 | | **Total** | **2,402,318** | **(5,717,845)** | **6,381,846** | **(6,019,323)** | - Over **90%** of the Group's external customer revenue and segment assets are from mainland China, thus no geographical information is presented[23](index=23&type=chunk) [Finance Costs](index=10&type=section&id=Finance%20Costs) For H1 2025, Yuzhou Group's finance costs slightly decreased by **1.26%** to **RMB 1.87421 billion**, primarily due to reduced total interest on interest-bearing bank and other borrowings, corporate bonds, and senior notes, alongside a decrease in capitalized interest Finance Costs Analysis (Six Months Ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Interest on interest-bearing bank and other borrowings, corporate bonds and senior notes | 2,062,908 | 2,132,214 | -3.25 | | Less: Capitalized interest | (188,696) | (234,030) | -19.37 | | **Total Finance Costs** | **1,874,212** | **1,898,184** | **-1.26** | [Loss Before Tax](index=11&type=section&id=Loss%20Before%20Tax) For H1 2025, Yuzhou Group's loss before tax narrowed to **RMB 7.57822 billion**, primarily influenced by cost of properties sold, cost of services provided, depreciation, employee benefit expenses, and direct operating expenses from investment properties earning rental income Loss Before Tax Components (Six Months Ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Cost of properties sold | 2,306,839 | 6,185,653 | -62.69 | | Cost of services provided | 67,132 | 79,071 | -15.09 | | Depreciation | 25,342 | 25,945 | -2.32 | | Employee benefit expenses (net) | 64,681 | 63,473 | 1.90 | | Direct operating expenses from investment properties earning rental income | 7,387 | 6,016 | 22.79 | | Fair value loss on financial assets at fair value through profit or loss | – | 55,792 | -100.00 | | Impairment of goodwill | – | 65,963 | -100.00 | [Income Tax](index=12&type=section&id=Income%20Tax) For H1 2025, Yuzhou Group recorded an income tax credit of **RMB 186.69 million**, a shift from an income tax expense of **RMB 122.69 million** in the prior year, primarily due to a decrease in deferred tax liabilities and a reduction from over-provision in prior years Income Tax (Credit)/Expense Analysis (Six Months Ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | Change (RMB thousand) | | :--- | :--- | :--- | :--- | | Current: PRC corporate income tax | 108,375 | 103,346 | 5,029 | | Current: Over-provision in prior years | (80,774) | (78,718) | (2,056) | | Current: PRC land appreciation tax | 18,120 | 11,354 | 6,766 | | Deferred: For the period | (232,411) | 86,710 | (319,121) | | **Total Tax (Credit)/Expense for the period** | **(186,690)** | **122,692** | **(309,382)** | - No provision for Hong Kong profits tax was made due to no assessable profits for the period[29](index=29&type=chunk) [Dividends](index=12&type=section&id=Dividends) The Board of Directors does not recommend the payment of an interim dividend for the six months ended June 30, 2025, and 2024 - The Board does not recommend the payment of an interim dividend for H1 2025 and 2024[31](index=31&type=chunk) [Loss Per Share Attributable to Ordinary Equity Holders of the Parent](index=12&type=section&id=Loss%20Per%20Share%20Attributable%20to%20Ordinary%20Equity%20Holders%20of%20the%20Parent) For H1 2025, Yuzhou Group's basic and diluted loss per share both narrowed to **RMB 0.8828**, from **RMB 0.9779** in the prior year, calculated based on loss attributable to owners of the parent (adjusted for distributions on senior perpetual securities) and the weighted average number of ordinary shares outstanding Loss Per Share Calculation Data (Six Months Ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Loss attributable to owners of the parent for the period | (5,632,062) | (6,255,983) | | Distributions on senior perpetual securities | (135,503) | (133,044) | | Loss used in calculating basic and diluted loss per share | (5,767,565) | (6,389,027) | | Basic and diluted loss per share (RMB cents) | (88.28) | (97.79) | Number of Shares (Six Months Ended June 30) | Item | 2025 (Shares) | 2024 (Shares) | | :--- | :--- | :--- | | Weighted average number used in calculating basic loss per share | 6,533,584,996 | 6,533,584,996 | | Weighted average number used in calculating diluted loss per share | 6,533,584,996 | 6,533,584,996 | [Trade Payables](index=13&type=section&id=Trade%20Payables) As of June 30, 2025, Yuzhou Group's total trade payables decreased to **RMB 7.33214 billion** from **RMB 7.96000 billion** at end-2024, with the largest portion due within 1 year, and all trade payables being non-interest-bearing and unsecured Trade Payables Ageing Analysis (As of June 30) | Ageing | 2025 June 30 (RMB thousand) | 2024 Dec 31 (RMB thousand) | | :--- | :--- | :--- | | Within 1 year | 4,116,582 | 4,784,145 | | 1 to 2 years | 3,215,562 | 3,175,858 | | **Total** | **7,332,144** | **7,960,003** | - Trade payables are non-interest-bearing and unsecured[35](index=35&type=chunk) [Corporate Bonds](index=14&type=section&id=Corporate%20Bonds) As of June 30, 2025, Yuzhou Group's total corporate bonds amounted to **RMB 2.839 billion**, with **RMB 269.75 million** classified as current liabilities; the Group has adjusted coupon rates and extended maturity dates for multiple corporate bonds to alleviate repayment pressure and repaid part of the principal Corporate Bonds Balance and Classification (As of June 30) | Item | 2025 June 30 (RMB thousand) | 2024 Dec 31 (RMB thousand) | | :--- | :--- | :--- | | Corporate bonds due in 2024 | 1,075,000 | 1,075,000 | | Corporate bonds due in 2025 | 1,764,000 | 1,800,000 | | **Total** | **2,839,000** | **2,875,000** | | Portion classified as current liabilities | (269,750) | (900,000) | | Non-current liabilities | 2,569,250 | 1,975,000 | - The **6.5%** corporate bonds issued in 2019 have been approved for maturity extension, with principal to be settled in installments in April 2026, October 2026, and 2027[36](index=36&type=chunk) - The **6.5%** corporate bonds Series Two and Three issued in 2020 have been approved for maturity extension, with principal to be settled in installments from July 2025 to 2028, and coupon rate adjusted to **4%** per annum[36](index=36&type=chunk)[37](index=37&type=chunk) [Senior Notes](index=15&type=section&id=Senior%20Notes) As of June 30, 2025, Yuzhou Group's total senior notes amounted to **RMB 38.61815 billion**, all classified as current liabilities, due to unpaid interest and principal, which constituted an event of default under the senior note agreements Senior Notes Balance (As of June 30) | Item | 2025 June 30 (RMB thousand) | 2024 Dec 31 (RMB thousand) | | :--- | :--- | :--- | | Total senior notes | 38,618,153 | 38,789,815 | | Portion classified as current liabilities | (38,618,153) | (38,789,815) | | Non-current portion | – | – | - As of June 30, 2025, the Group had unpaid senior note interest of **US$227.328 million** (approximately **RMB 1.605742 billion**) and unpaid senior note principal of **US$886 million** (approximately **RMB 6.258315 billion**)[39](index=39&type=chunk) - The related unpaid interest or overdue principal has constituted an event of default under the senior note agreements, with all senior notes classified as current liabilities[39](index=39&type=chunk) [Management Discussion and Analysis](index=17&type=section&id=Management%20Discussion%20and%20Analysis) This section analyzes Yuzhou Group's H1 2025 market environment, operating performance, and financial position, highlighting significant revenue and gross profit declines, continued losses amid a challenging real estate market, and the Group's proactive marketing adjustments, product optimization, debt restructuring, and cost control measures to address liquidity pressures, while emphasizing regional focus and talent development for long-term sustainability [Market and Business Review](index=17&type=section&id=Market%20and%20Business%20Review) In H1 2025, China's real estate market continued its downward trend, with TOP-100 developers' contracted sales declining by double digits despite supportive policies; market differentiation intensified, with first-tier and strong second-tier cities showing stronger recovery, while weaker second-tier and third/fourth-tier cities underperformed, and real estate investment decreased by **11.2%** year-on-year - In H1 2025, the real estate market experienced a downward trend, with TOP-100 developers' cumulative contracted sales declining by **double digits** year-on-year[43](index=43&type=chunk) - Market differentiation intensified, with first-tier and strong second-tier cities showing stronger recovery, while weaker second-tier and third/fourth-tier cities underperformed[43](index=43&type=chunk) H1 2025 Real Estate Investment Amount | Indicator | Amount (RMB) | Year-on-year Change (%) | | :--- | :--- | :--- | | Real estate investment amount | 4.67 trillion | -11.2 | [Overall Performance](index=17&type=section&id=Overall%20Performance) In H1 2025, Yuzhou Group's revenue was **RMB 2.39652 billion**, with a loss for the period of **RMB 7.39153 billion** and a capital deficiency of **RMB 19.44661 billion**, reflecting severe financial challenges, with the Board not recommending an interim dividend 2025 H1 Overall Financial Performance | Indicator | Amount (RMB) | | :--- | :--- | | Revenue | 2.39652 billion | | Loss for the period | 7.39153 billion | | Capital deficiency | 19.44661 billion | - The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025[44](index=44&type=chunk) [Property Sales](index=17&type=section&id=Property%20Sales) In H1 2025, Yuzhou Group's property sales revenue was **RMB 2.17438 billion**, a significant year-on-year decrease of **64.52%**, accounting for **90.73%** of total revenue, with approximately **278,399 square meters** of properties delivered at an average selling price of **RMB 7,810 per square meter**, and the Central China region being the primary revenue contributor, as the Group continues to deepen its presence in key regions Property Sales Revenue and Area (H1 2025) | Indicator | H1 2025 | H1 2024 | Year-on-year Change (%) | | :--- | :--- | :--- | :--- | | Property sales revenue (RMB thousand) | 2,174,382 | 6,128,391 | -64.52 | | Total GFA delivered (sqm) | 278,399 | 442,612 | -37.11 | | Average selling price (RMB/sqm) | 7,810 | 13,846 | -43.60 | - The decrease in property sales revenue was primarily due to a reduction in the area of properties delivered during the period[45](index=45&type=chunk) - The Central China, Bohai Rim, and Yangtze River Delta regions were the main contributors to recognized revenue[45](index=45&type=chunk) [Contracted Sales](index=19&type=section&id=Contracted%20Sales) In H1 2025, Yuzhou Group's cumulative contracted sales amounted to **RMB 3.72851 billion**, with a contracted sales area of **254,589 square meters** and an average selling price of approximately **RMB 14,645 per square meter**; the Yangtze River Delta and Greater Bay Area were the primary contributors to contracted sales, as the Group actively responded to market downturns by adjusting marketing strategies and expanding customer acquisition channels through digital marketing Contracted Sales Amount and Area (H1 2025) | Indicator | H1 2025 | H1 2024 | Year-on-year Change (%) | | :--- | :--- | :--- | :--- | | Contracted sales amount (RMB thousand) | 3,728,510 | 4,346,239 | -14.21 | | Contracted sales area (sqm) | 254,589 | 279,311 | -8.85 | | Average contracted selling price (RMB/sqm) | 14,645 | 15,561 | -5.90 | - The Yangtze River Delta region contributed the Group's overall contracted sales of **54.16%**, and the Greater Bay Area contributed **25.31%**[47](index=47&type=chunk) - The Group actively adjusted its marketing strategies, strengthened its "Yuzhou Star Power" streamer matrix, and expanded digital marketing customer acquisition channels through platforms such as WeChat, Weibo, Douyin, and Xiaohongshu[48](index=48&type=chunk) [Property Investment](index=20&type=section&id=Property%20Investment) Yuzhou Group's property investment segment includes "Yuyue" shopping centers and "Yuzhou Plaza" office buildings and commercial streets, with **39 projects** across 9 cities, totaling over **1.53 million square meters** of commercial area; in 2025, the Group launched its Minnan culture promotion strategy and provides comprehensive business platform services to tenants through its U-Square service system - The property investment segment has three product lines: "Yuyue" shopping centers and "Yuzhou Plaza" office buildings and commercial streets[51](index=51&type=chunk) - There are **32 operational projects** and **7 projects under preparation**, totaling **39 projects**, creating over **1.53 million square meters** of commercial area[51](index=51&type=chunk) - In 2025, the Minnan culture promotion strategy was launched, with "Super New Highlights" as the quarterly theme, hosting diverse cultural events that attracted nearly **10 million participants**[52](index=52&type=chunk) - Through the U-Square service system, a comprehensive business platform centered on assurance services, warm services, and functional services is built, offering "Yuzhou Professional, Yuzhou Secure, Yuzhou Butler, Yuzhou Colorful, Yuzhou Space, Yuzhou Resources" six major service systems[53](index=53&type=chunk) [Hotel Operations](index=21&type=section&id=Hotel%20Operations) In H1 2025, Yuzhou Group's hotel business revenue was approximately **RMB 8 thousand**, a significant year-on-year decrease; the Group continues to optimize its operational management system, enhance service quality and consumer experience, with several hotels under construction, adhering to the service philosophy of "caring for you like family" Hotel Operations Revenue (H1 2025) | Indicator | H1 2025 (RMB ten thousand) | H1 2024 (RMB ten thousand) | Year-on-year Change (%) | | :--- | :--- | :--- | :--- | | Hotel operations revenue | 0.8 | 110.3 | -99.27 | - The Group's hotels adopt diversified and innovative operational management models, focusing on service quality, consumer experience, and customer reputation enhancement[54](index=54&type=chunk) - Several hotels, including Xiamen Tong'an Jiamelun Hot Spring Hotel and Quanzhou Hui'an Jiamelun Business Hotel, are currently under construction[54](index=54&type=chunk) [Quality and Safety and Product Line Design](index=21&type=section&id=Quality%20and%20Safety%20and%20Product%20Line%20Design) Yuzhou Group adheres to low-carbon and green development principles, with **145 projects** totaling over **21 million square meters** meeting green building standards as of June 30, 2025; the Group has refined its product system based on the "Yong," "Lang," and "Jia" residential product series, innovating and iterating the "Warm Space" series to provide high-quality, refined living experiences - The Group adheres to low-carbon and green development principles, responding to national "dual carbon" goals by creating green premium projects[55](index=55&type=chunk) - As of June 30, 2025, **145 projects** totaling over **21 million square meters** of properties met green building standards, with approximately **5.55 million square meters** achieving Green Building Two-Star rating or above[55](index=55&type=chunk) - Based on the "Yong," "Lang," and "Jia" three major residential product series, the product system has been refined, top-level design clarified, and the "Warm Space" series innovated and iterated, built around "1 core, 3 spaces, 5 product propositions, and 6 product values"[56](index=56&type=chunk) [Land Bank](index=22&type=section&id=Land%20Bank) As of June 30, 2025, Yuzhou Group's total land bank had a saleable GFA of approximately **10.35 million square meters**, distributed across **161 projects** in **38 cities** within six major metropolitan areas, with an average floor area cost of approximately **RMB 5,943 per square meter**, which the Group believes is sufficient for the next two to three years of development needs Land Bank Overview (As of June 30, 2025) | Indicator | Data | | :--- | :--- | | Total saleable GFA | Approximately 10.35 million sqm | | Number of projects | 161 | | Cities covered | 38 | | Average floor area cost | Approximately RMB 5,943/sqm | - The land bank is primarily distributed across six major metropolitan areas: the West Strait Economic Zone, Yangtze River Delta Region, Bohai Rim Region, Central China Region, Greater Bay Area, and Southwest Region[57](index=57&type=chunk)[58](index=58&type=chunk)[59](index=59&type=chunk) - The Group believes its existing land bank is sufficient for the next two to three years of development needs[57](index=57&type=chunk) [Financial Performance Analysis](index=24&type=section&id=Financial%20Performance%20Analysis) This section details the changes in Yuzhou Group's financial indicators for H1 2025, showing significant declines in revenue and gross profit due to reduced property deliveries, a substantial increase in fair value losses on investment properties, and a surge in administrative expenses due to exchange losses, though sales and distribution costs, other expenses, and finance costs decreased, with the Group's loss for the period primarily impacted by impairment provisions, fair value losses, and reduced revenue [Revenue](index=24&type=section&id=Revenue) In H1 2025, Yuzhou Group's total revenue was **RMB 2.39652 billion**, a year-on-year decrease of **62.42%**, primarily due to reduced recognized property sales revenue from fewer delivered properties; property sales revenue accounted for **90.73%** of total revenue, decreasing by **64.52%** year-on-year Revenue Composition and Change (H1 2025) | Revenue Source | 2025 H1 (RMB thousand) | 2024 H1 (RMB thousand) | Year-on-year Change (%) | | :--- | :--- | :--- | :--- | | Property sales | 2,174,382 | 6,128,391 | -64.52 | | Property management fee income | 105,234 | 125,423 | -16.10 | | Rental income from investment properties | 116,900 | 122,619 | -4.67 | | Hotel operation income | 8 | 1,103 | -99.27 | | **Total Revenue** | **2,396,521** | **6,377,536** | **-62.42** | [Cost of Sales](index=24&type=section&id=Cost%20of%20Sales) In H1 2025, Yuzhou Group's cost of sales was **RMB 2.37397 billion**, a year-on-year decrease of **62.13%**, primarily due to a reduction in the gross floor area of properties delivered during the period; cost of sales mainly included land costs, construction costs, capitalized interest, and fair value adjustments of properties Cost of Sales Change (H1 2025) | Indicator | 2025 H1 (RMB thousand) | 2024 H1 (RMB thousand) | Year-on-year Change (%) | | :--- | :--- | :--- | :--- | | Cost of sales | 2,373,971 | 6,269,505 | -62.13 | - The decrease in cost of sales was primarily due to a reduction in the gross floor area of properties delivered during the period[61](index=61&type=chunk) [Gross Profit and Gross Profit Margin](index=24&type=section&id=Gross%20Profit%20and%20Gross%20Profit%20Margin) In H1 2025, Yuzhou Group's gross profit was **RMB 22.55 million**, with a gross profit margin of **0.94%**, both significantly declining primarily due to a reduction in the gross floor area of properties delivered during the period Gross Profit and Gross Profit Margin Change (H1 2025) | Indicator | 2025 H1 (RMB thousand) | 2024 H1 (RMB thousand) | Year-on-year Change (%) | | :--- | :--- | :--- | :--- | | Gross profit | 22,550 | 108,031 | -79.13 | | Gross profit margin | 0.94% | 1.70% | -44.71 (decrease) | - The decrease in gross profit was primarily due to a reduction in the gross floor area of properties delivered during the period[62](index=62&type=chunk) [Fair Value Loss on Investment Properties](index=24&type=section&id=Fair%20Value%20Loss%20on%20Investment%20Properties) In H1 2025, Yuzhou Group recorded a fair value loss on investment properties of **RMB 727.39 million**, a significant increase of **110.07%** from **RMB 346.27 million** in the prior year, primarily from investment properties located in Xiamen, Hefei, and Shenzhen Fair Value Loss on Investment Properties Change (H1 2025) | Indicator | 2025 H1 (RMB thousand) | 2024 H1 (RMB thousand) | Year-on-year Change (%) | | :--- | :--- | :--- | :--- | | Fair value loss on investment properties | (727,389) | (346,271) | 110.07 (loss widened) | - The loss was primarily due to fair value losses on investment properties located in Xiamen, Hefei, and Shenzhen[63](index=63&type=chunk) [Other Income and Gains](index=24&type=section&id=Other%20Income%20and%20Gains) In H1 2025, Yuzhou Group's other income and gains amounted to **RMB 19.63 million**, a year-on-year decrease of **38.09%**, primarily due to reduced bank interest income Other Income and Gains Change (H1 2025) | Indicator | 2025 H1 (RMB thousand) | 2024 H1 (RMB thousand) | Year-on-year Change (%) | | :--- | :--- | :--- | :--- | | Other income and gains | 19,631 | 31,708 | -38.09 | - The decrease was primarily due to reduced bank interest income[64](index=64&type=chunk) [Selling and Distribution Costs](index=24&type=section&id=Selling%20and%20Distribution%20Costs) In H1 2025, Yuzhou Group's selling and distribution costs were **RMB 73.08 million**, a year-on-year decrease of **46.17%**, primarily attributable to effective cost control measures and reduced marketing and promotion expenses Selling and Distribution Costs Change (H1 2025) | Indicator | 2025 H1 (RMB thousand) | 2024 H1 (RMB thousand) | Year-on-year Change (%) | | :--- | :--- | :--- | :--- | | Selling and distribution costs | 73,083 | 135,754 | -46.17 | - The decrease was primarily due to effective cost control measures and marketing and promotion expenses reduction[65](index=65&type=chunk) [Administrative Expenses](index=25&type=section&id=Administrative%20Expenses) In H1 2025, Yuzhou Group's administrative expenses were **RMB 684.85 million**, a significant year-on-year increase of **239.55%**, primarily due to increased exchange losses during the period Administrative Expenses Change (H1 2025) | Indicator | 2025 H1 (RMB thousand) | 2024 H1 (RMB thousand) | Year-on-year Change (%) | | :--- | :--- | :--- | :--- | | Administrative expenses | 684,847 | 201,699 | 239.55 | - The increase was primarily due to increased exchange losses during the period[66](index=66&type=chunk) [Other Expenses](index=25&type=section&id=Other%20Expenses) In H1 2025, Yuzhou Group's other expenses were **RMB 26.64 million**, a significant year-on-year decrease of **85.72%**, primarily due to reduced impairment of goodwill and fair value losses on financial assets at fair value through profit or loss Other Expenses Change (H1 2025) | Indicator | 2025 H1 (RMB thousand) | 2024 H1 (RMB thousand) | Year-on-year Change (%) | | :--- | :--- | :--- | :--- | | Other expenses | 26,643 | 186,430 | -85.72 | - The decrease was primarily due to reduced impairment of goodwill and fair value losses on financial assets at fair value through profit or loss[67](index=67&type=chunk) [Finance Costs](index=25&type=section&id=Finance%20Costs) In H1 2025, Yuzhou Group's finance costs were **RMB 1.87421 billion**, a year-on-year decrease of **1.26%**, primarily due to a reduction in domestic loan amounts Finance Costs Change (H1 2025) | Indicator | 2025 H1 (RMB thousand) | 2024 H1 (RMB thousand) | Year-on-year Change (%) | | :--- | :--- | :--- | :--- | | Finance costs | 1,874,212 | 1,898,184 | -1.26 | - The decrease was primarily due to a reduction in domestic loan amounts[68](index=68&type=chunk) [Share of Profits and Losses of Joint Ventures](index=25&type=section&id=Share%20of%20Profits%20and%20Losses%20of%20Joint%20Ventures) In H1 2025, Yuzhou Group's share of losses of joint ventures was **RMB 285.27 million**, a shift from a share of profits of **RMB 45.07 million** in the prior year; joint ventures' total revenue was **RMB 282.25 million**, with a gross profit margin of **-5.47%** Share of Profits and Losses of Joint Ventures Change (H1 2025) | Indicator | 2025 H1 (RMB thousand) | 2024 H1 (RMB thousand) | Change (RMB thousand) | | :--- | :--- | :--- | :--- | | Share of profits and losses of joint ventures | (285,266) | 45,070 | (330,336) (from profit to loss) | - Joint ventures' total revenue was **RMB 282.25 million**, with a gross profit margin of **-5.47%**[69](index=69&type=chunk) [Share of Profits and Losses of Associates](index=25&type=section&id=Share%20of%20Profits%20and%20Losses%20of%20Associates) In H1 2025, Yuzhou Group's share of losses of associates expanded to **RMB 254.50 million**, from **RMB 155.33 million** in the prior year; associates' total revenue was **RMB 1.34125 billion**, with a gross profit margin of **-12.06%** Share of Profits and Losses of Associates Change (H1 2025) | Indicator | 2025 H1 (RMB thousand) | 2024 H1 (RMB thousand) | Change (RMB thousand) | | :--- | :--- | :--- | :--- | | Share of profits and losses of associates | (254,504) | (155,334) | (99,170) (loss widened) | - Associates' total revenue was **RMB 1.34125 billion**, with a gross profit margin of **-12.06%**[70](index=70&type=chunk) [Income Tax](index=25&type=section&id=Income%20Tax) In H1 2025, Yuzhou Group recorded an income tax credit of **RMB 186.69 million**, a shift from an income tax expense of **RMB 122.69 million** in the prior year, primarily due to a decrease in deferred tax liabilities Income Tax (Credit)/Expense Change (H1 2025) | Indicator | 2025 H1 (RMB thousand) | 2024 H1 (RMB thousand) | Change (RMB thousand) | | :--- | :--- | :--- | :--- | | Income tax (credit)/expense | (186,690) | 122,692 | (309,382) (from expense to credit) | - The decrease in income tax expense was primarily due to a decrease in deferred tax liabilities during the period[71](index=71&type=chunk) [Loss for the Period](index=25&type=section&id=Loss%20for%20the%20Period) In H1 2025, Yuzhou Group's loss for the period was **RMB 7.39153 billion**, narrowing from **RMB 8.01280 billion** in the prior year, primarily due to impairment loss provisions, fair value losses on investment properties, and reduced revenue Loss for the Period Change (H1 2025) | Indicator | 2025 H1 (RMB thousand) | 2024 H1 (RMB thousand) | Year-on-year Change (%) | | :--- | :--- | :--- | :--- | | Loss for the period | (7,391,533) | (8,012,801) | 7.75 (loss narrowed) | - The loss was primarily due to impairment loss provisions, fair value losses on investment properties, and reduced revenue during the period[72](index=72&type=chunk) [Loss Attributable to Non-controlling Interests](index=26&type=section&id=Loss%20Attributable%20to%20Non-controlling%20Interests) In H1 2025, Yuzhou Group's loss attributable to non-controlling interests was **RMB 1.75947 billion**, largely consistent with **RMB 1.75682 billion** in the prior year, primarily due to impairment of properties under development, fair value losses on investment properties, and losses from certain non-wholly owned projects Loss Attributable to Non-controlling Interests Change (H1 2025) | Indicator | 2025 H1 (RMB thousand) | 2024 H1 (RMB thousand) | Year-on-year Change (%) | | :--- | :--- | :--- | :--- | | Loss attributable to non-controlling interests | (1,759,471) | (1,756,818) | 0.15 (loss slightly increased) | - The loss was primarily due to impairment of properties under development, fair value losses on investment properties, and losses from certain non-wholly owned projects[73](index=73&type=chunk) [Basic Loss Per Share](index=26&type=section&id=Basic%20Loss%20Per%20Share) For the period ended June 30, 2025, Yuzhou Group's basic loss per share was **RMB 0.88** Basic Loss Per Share (H1 2025) | Indicator | 2025 H1 (RMB) | | :--- | :--- | | Basic loss per share | 0.88 | [Liquidity and Financial Resources](index=26&type=section&id=Liquidity%20and%20Financial%20Resources) Yuzhou Group actively managed its debt, with cash and cash equivalents and restricted cash totaling approximately **RMB 2.80824 billion** as of June 30, 2025; total borrowings were **RMB 51.97164 billion**, a **1.23%** decrease from end-2024, with a weighted average interest rate of **7.91%**, while the asset-liability ratio excluding pre-receipts rose to **127.83%** and net gearing ratio was **-252.81%**, indicating severe liquidity pressure, with the Group providing various guarantees and most borrowings denominated in HKD and USD, posing currency risk [Cash Position](index=26&type=section&id=Cash%20Position) As of June 30, 2025, Yuzhou Group's cash and cash equivalents and restricted cash totaled approximately **RMB 2.80824 billion** Cash and Cash Equivalents and Restricted Cash (As of June 30, 2025) | Indicator | Amount (RMB thousand) | | :--- | :--- | | Cash and cash equivalents and restricted cash | 2,808,240 | [Borrowings](index=26&type=section&id=Borrowings) As of June 30, 2025, Yuzhou Group's interest-bearing bank and other borrowings, corporate bonds, and senior notes totaled **RMB 51.97164 billion**, a **1.23%** decrease from end-2024; the weighted average interest rate was **7.91%**, a **0.16 percentage point** decrease from end-2024, while the asset-liability ratio excluding pre-receipts was **127.83%**, an increase of **12.73 percentage points** from end-2024 Borrowings Overview (As of June 30, 2025) | Indicator | 2025 June 30 (RMB thousand) | 2024 Dec 31 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Balance of interest-bearing bank and other borrowings, corporate bonds and senior notes | 51,971,640 | 52,620,220 | -1.23 | | Weighted average interest rate | 7.91% | 8.07% | -0.16 percentage points | | Asset-liability ratio excluding pre-receipts | 127.83% | 115.10% | 12.73 percentage points (increase) | - The decrease in borrowings was due to the repayment of bank and other borrowings during the period[77](index=77&type=chunk) [Net Gearing Ratio](index=26&type=section&id=Net%20Gearing%20Ratio) As of June 30, 2025, Yuzhou Group's net gearing ratio was **-252.81%**, reflecting negative equity and extremely high financial leverage Net Gearing Ratio (As of June 30, 2025) | Indicator | Ratio | | :--- | :--- | | Net gearing ratio | -252.81% | [Guarantees](index=27&type=section&id=Guarantees) As of June 30, 2025, Yuzhou Group provided mortgage loan guarantees to banks totaling **RMB 12.81392 billion**, and financing guarantees to joint ventures and associates of **RMB 52.92 million** and **RMB 1.17004 billion** respectively, in addition to financing guarantees for certain contractors and independent third parties Guarantee Amounts (As of June 30, 2025) | Guaranteed Party | 2025 June 30 (RMB thousand) | 2024 Dec 31 (RMB thousand) | | :--- | :--- | :--- | | Mortgage loans for property buyers | 12,813,920 | 11,450,960 | | Financing for joint ventures | 52,920 | 52,920 | | Financing for associates | 1,170,040 | 888,940 | | Financing for contractors | 10,020 | 6,760 | | Financing for independent third parties | 4,774,860 | 4,798,420 | [Currency Risk](index=27&type=section&id=Currency%20Risk) As of June 30, 2025, approximately **83.62%** of Yuzhou Group's total borrowings were denominated in HKD and USD, with RMB accounting for **16.38%**; the Group will regularly monitor exchange rate risk but currently deems no foreign exchange hedging necessary Borrowings and Cash Balance by Currency (As of June 30, 2025) | Currency | Borrowings Balance (RMB thousand) | Cash Balance (RMB thousand) | | :--- | :--- | :--- | | HKD | 608,057 | 36,574 | | RMB | 8,510,643 | 2,653,331 | | USD | 42,852,935 | 118,335 | | **Total** | **51,971,635** | **2,808,240** | - Approximately **83.62%** of borrowings are denominated in HKD and USD, posing exchange rate risk[80](index=80&type=chunk) - The Group will regularly monitor exchange rate risk but currently deems no foreign exchange hedging arrangements necessary[81](index=81&type=chunk) [Employees and Remuneration Policy](index=28&type=section&id=Employees%20and%20Remuneration%20Policy) As of June 30, 2025, Yuzhou Group had **981 employees**; the Group adheres to its core values of "Responsibility, Pragmatism, Synergy, Win-win," focusing on the annual theme "Acting with Integrity" to continuously enhance organizational efficiency, invigorate teams, integrate cultural assessment into talent selection and retention, and prioritize employee well-being and professional development through various care activities [Employee Numbers and Corporate Culture](index=28&type=section&id=Employee%20Numbers%20and%20Corporate%20Culture) As of June 30, 2025, Yuzhou Group had **981 employees**; the Group upholds the spirit of "Yu's Flood Control, Deserts into Oases," with core values of "Responsibility, Pragmatism, Synergy, Win-win," focusing on the annual theme "Acting with Integrity" to select and motivate talent through cultural assessment, and conduct employee care activities Employee Numbers (As of June 30, 2025) | Indicator | Quantity | | :--- | :--- | | Total employees | 981 | - The Group's core values are "Responsibility, Pragmatism, Synergy, Win-win," with the annual theme "Acting with Integrity"[82](index=82&type=chunk) - Cultural assessment is integrated into talent selection and retention to develop responsible and pragmatic talent, and continuously motivate employees[82](index=82&type=chunk) [Employment and Remuneration Policy](index=28&type=section&id=Employment%20and%20Remuneration%20Policy) Yuzhou Group's employee remuneration is primarily determined by market salary levels, individual performance, and work experience, with bonuses distributed based on performance - Employee remuneration is determined by market salary levels, individual performance, and work experience[84](index=84&type=chunk) - The Group distributes bonuses based on employee performance[84](index=84&type=chunk) [Events After Reporting Period](index=16&type=section&id=Events%20After%20Reporting%20Period) After the reporting period, Yuzhou Group completed a rights issue, raising approximately **HKD 92.2 million** net proceeds for restructuring fees and general working capital; the offshore debt restructuring plan became effective on August 29, 2025, resolving approximately **US$6.68 billion** in debt in exchange for cash, new shares, and new notes, significantly improving the Group's capital structure and liquidity, with short-term note terms also revised to match future cash flow projections - The rights issue has been completed, with **2,690,960,456 rights shares** allotted and issued, raising net proceeds of approximately **HKD 92.2 million** for restructuring support agreement fees, creditor fees, and general working capital[42](index=42&type=chunk)[85](index=85&type=chunk) - The offshore debt restructuring plan became effective on August 29, 2025, with approximately **US$6.68 billion** of debt (together with related accrued interest) fully discharged and released in exchange for cash, new shares, and new notes[42](index=42&type=chunk)[87](index=87&type=chunk) - After the restructuring effective date, a total of **5,645,000,000 new shares** (representing approximately **37.9%** of the total issued shares immediately after the allotment of new equity) were issued to scheme creditors[42](index=42&type=chunk) - The terms of the short-term notes have been revised, including capitalization of accrued interest, right to pay interest in kind, removal of mandatory redemption dates, and reduction of minimum principal amount, to enhance the Group's financial stability after the restructuring effective date[86](index=86&type=chunk) [Other Information](index=30&type=section&id=Other%20Information) This section covers other important information for Yuzhou Group, including no interim dividend recommendation, no significant acquisitions or disposals during the reporting period, details of financial assistance to affiliated companies, sufficient public float, no material business changes, no trading in listed securities, directors' compliance with the standard code for securities transactions, corporate governance status, updates on share option and share award schemes, and the review of accounts and publication of results announcements [Interim Dividend](index=30&type=section&id=Interim%20Dividend) The Board of Directors does not recommend the payment of an interim dividend for the six months ended June 30, 2025 - The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025[89](index=89&type=chunk) [Significant Acquisitions and Disposals of Subsidiaries, Joint Ventures and Associates](index=30&type=section&id=Significant%20Acquisitions%20and%20Disposals%20of%20Subsidiaries%2C%20Joint%20Ventures%20and%20Associates) During the reporting period, the Company did not undertake any significant acquisitions or disposals - During the period, the Company did not undertake any significant acquisitions or disposals[90](index=90&type=chunk) [Financial Assistance to Affiliated Companies](index=31&type=section&id=Financial%20Assistance%20to%20Affiliated%20Companies) As of June 30, 2025, Yuzhou Group provided total financial assistance of **RMB 8.18949 billion** to affiliated companies, including advances and financing guarantees; these advances are unsecured, interest-free, and without fixed repayment terms, and the affiliated companies' consolidated net assets were **RMB 25.02238 billion** Total Financial Assistance to Affiliated Companies (As of June 30, 2025) | Item | Amount (RMB thousand) | | :--- | :--- | | Advances to affiliated companies | 6,966,534 | | Financing guarantees to affiliated companies | 1,222,959 | | **Total** | **8,189,493** | - Advances are unsecured, interest-free, and without fixed repayment terms[93](index=93&type=chunk) Consolidated Financial Position of Affiliated Companies and Group's Share of Equity (As of June 30, 2025) | Indicator | Consolidated Financial Position (RMB thousand) | Group's Share of Equity (RMB thousand) | | :--- | :--- | :--- | | Net assets | 25,022,376 | 8,392,503 | [Sufficient Public Float](index=33&type=section&id=Sufficient%20Public%20Float) As of the date of this announcement, the Company has maintained a sufficient public float as required by the Listing Rules - The Company has maintained a sufficient public float as required by the Listing Rules[94](index=94&type=chunk) [No Material Changes](index=33&type=section&id=No%20Material%20Changes) There have been no material changes in the Company's business since the publication of its most recent annual report for the year ended December 31, 2024 - There have been no material changes in the Company's business since the publication of the 2024 annual report[95](index=95&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=33&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company%27s%20Listed%20Securities) During the reporting period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities, and the Company held no treasury shares at the end of the reporting period - During the period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[96](index=96&type=chunk) - At the end of the reporting period, the Company held no treasury shares[96](index=96&type=chunk) [Standard Code for Securities Transactions by Directors](index=33&type=section&id=Standard%20Code%20for%20Securities%20Transactions%20by%20Directors) The Company has adopted a code for securities transactions by directors no less stringent than the standard set out in Appendix C3 of the Listing Rules, and directors have confirmed compliance with its provisions throughout the period - The Company has adopted a stringent code for securities transactions by directors, and directors have confirmed compliance with its provisions throughout the period[97](index=97&type=chunk) [Corporate Governance](index=33&type=section&id=Corporate%20Governance) Yuzhou Group is committed to maintaining good corporate governance practices, complying with Appendix C1 of the Listing Rules' Corporate Governance Code during the reporting period, though the roles of Chairman and CEO are combined in Ms. Kwok Ying Lan, a deviation from code provision C.2.1, which the Board believes has sufficient balance of power and safeguards and will be regularly reviewed - The Group has consistently adopted, applied, and complied with the Corporate Governance Code in Appendix C1 of the Listing Rules[98](index=98&type=chunk) - The roles of Chairman and Chief Executive Officer are combined in Ms. Kwok Ying Lan, deviating from code provision C.2.1[99](index=99&type=chunk) - The Board believes there is sufficient balance of power and safeguards in place and will regularly review and monitor it[99](index=99&type=chunk) [Share Option Scheme](index=34&type=section&id=Share%20Option%20Scheme) No share options were granted by the Company during the six months ended June 30, 2025 - No share options were granted by the Company during the six months ended June 30, 2025[100](index=100&type=chunk) [Share Award Scheme](index=34&type=section&id=Share%20Award%20Scheme) Under the Share Award Scheme, the Board may at its discretion select employees to participate and grant awarded shares; as of June 30, 2025, the total number of shares available for award was **10,324,504**, representing approximately **0.16%** of issued shares, with the maximum number of shares that may be awarded to a selected employee not exceeding **1%** of the Company's issued share capital from time to time - The Board may at its sole discretion select employees to participate in the Share Award Scheme and grant awarded shares[101](index=101&type=chunk) Total Shares in Share Award Scheme (As of June 30, 2025) | Indicator | Quantity | | :--- | :--- | | Total shares available for award | 10,324,504 shares | | Percentage of issued shares | Approximately 0.16% | - The maximum number of shares that may be awarded to a selected employee shall not exceed **1%** of the Company's issued share capital from time to time[103](index=103&type=chunk) [Review of Accounts](index=35&type=section&id=Review%20of%20Accounts) The Company's Audit Committee has reviewed the Group's adopted accounting policies and the unaudited condensed consolidated interim financial statements for the six months ended June 30, 2025, with no disagreements between the Board and the Audit Committee - The Audit Committee has reviewed the Group's accounting policies and interim financial statements[105](index=105&type=chunk) - There were no disagreements between the Board and the Audit Committee[105](index=105&type=chunk) [Publication of Results Announcement and Interim Report](index=35&type=section&id=Publication%20of%20Results%20Announcement%20and%20Interim%20Report) This announcement has been published on the Company's website and the HKEX website; the Company's 2025 interim report will be dispatched to shareholders and published on the aforementioned websites in due course - This announcement has been published on the Company's website (http://yuzhou-group.com/) and the HKEX website (www.hkexnews.hk)[106](index=106&type=chunk) - The 2025 interim report will be dispatched to shareholders and published on the aforementioned websites in due course[106](index=106&type=chunk) [Outlook](index=36&type=section&id=Outlook) Yuzhou Group anticipates a bottoming-out and recovery trend in the real estate market in H2 2025, with continued loose national policies to stimulate demand; facing deep industry adjustments, the Group will adhere to principles of "Strategic Clarity, Innovative Breakthroughs, All-Staff Progress," focusing on sales and capital management, accelerating the revitalization of existing assets, optimizing its talent system, and enhancing service quality to ensure healthy and sustainable corporate development - The real estate market is expected to show a bottoming-out and recovery trend in H2 2025, with national policies remaining loose to stimulate demand[107](index=107&type=chunk) - The Group will address industry challenges with three core principles: "Strategic Clarity, Innovative Breakthroughs, All-Staff Progress"[108](index=108&type=chunk) - The Group will continue to promote sales and capital management, drive marketing innovation, strictly manage capital meticulously, accelerate the revitalization of existing assets, optimize its talent management system, and enhance service quality[108](index=108&type=chunk)