[Financial Summary](index=1&type=section&id=%E8%B2%A1%E5%8B%99%E6%91%98%E8%A6%81) [Key Financial Indicators](index=1&type=section&id=1.1%20%E9%97%9C%E9%8D%B5%E8%B2%A1%E5%8B%99%E6%8C%87%E6%A8%99) Jiasili Group's H1 2025 consolidated revenue decreased 8.2% to RMB 750.1 million, with profit for the period down 42.0% and owners' profit down 45.2% | Indicator | H1 2025 (RMB million) | H1 2024 (RMB million) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Consolidated Revenue | 750.1 | 817.0 | -8.2% | | Profit for the Period | 9.2 | 15.9 | -42.0% | | Profit Attributable to Owners of the Company | 11.8 | 21.6 | -45.2% | | EBITDA | 79.2 | 97.4 | -18.7% | | Interim Dividend (HK cents per share) | 5.00 | N/A | N/A | [Condensed Consolidated Financial Statements](index=2&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8) [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=2&type=section&id=2.1%20%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E6%90%8D%E7%9B%8A%E5%8F%8A%E5%85%B6%E4%BB%96%E5%85%A8%E9%9D%A2%E6%94%B6%E7%9B%8A%E8%A1%A8) In H1 2025, Group revenue was RMB 750,100 thousand, with gross profit RMB 205,642 thousand and profit for the period RMB 9,218 thousand | Indicator | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Revenue | 750,100 | 817,001 | | Cost of Sales | (544,458) | (602,188) | | Gross Profit | 205,642 | 214,813 | | Other Income | 24,808 | 26,526 | | Selling and Distribution Expenses | (111,065) | (99,234) | | Administrative Expenses | (53,276) | (53,980) | | Other Expenses | (39,134) | (39,107) | | Profit Before Tax | 16,666 | 26,140 | | Income Tax Expense | (7,448) | (10,260) | | Profit for the Period | 9,218 | 15,880 | | Profit Attributable to Owners of the Company | 11,816 | 21,564 | | Profit Attributable to Non-controlling Interests | (2,598) | (5,684) | | Basic Earnings Per Share (RMB cents) | 2.85 | 5.20 | [Condensed Consolidated Statement of Financial Position](index=3&type=section&id=2.2%20%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81%E8%A1%A8) As of June 30, 2025, Group non-current assets were RMB 1,365,813 thousand, current assets RMB 745,035 thousand, and net current liabilities RMB (121,156) thousand | Indicator | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | **ASSETS** | | | | Total Non-current Assets | 1,365,813 | 1,389,956 | | Total Current Assets | 745,035 | 856,298 | | Assets Classified as Held for Sale | 25,803 | 21,750 | | **LIABILITIES** | | | | Total Current Liabilities | 877,063 | 1,053,094 | | Liabilities Directly Associated with Assets Classified as Held for Sale | 14,931 | 463 | | Total Non-current Liabilities | 261,288 | 200,525 | | **EQUITY** | | | | Equity Attributable to Owners of the Company | 957,132 | 983,617 | | Non-controlling Interests | 26,237 | 30,305 | | Total Equity | 983,369 | 1,013,922 | | **KEY RATIOS** | | | | Net Current Liabilities | (121,156) | (175,509) | | Net Assets | 983,369 | 1,013,922 | [Notes to the Condensed Consolidated Financial Statements](index=5&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8%E9%99%84%E8%A8%BB) [Basis of Preparation](index=5&type=section&id=3.1%20%E7%B7%A8%E8%A3%BD%E5%9F%BA%E6%BA%96) The condensed consolidated financial statements are prepared under IAS 34 and Listing Rules; the Board expects sufficient resources for continued operation despite net current liabilities - As of June 30, 2025, the Group's current liabilities exceeded current assets by approximately **RMB 121,156,000**, but the Board expects the Group to have sufficient resources for continued operation[9](index=9&type=chunk) - Measures to mitigate liquidity include: available unutilized bank facilities of approximately **RMB 98,000,000**; expected sufficient cash inflows from operating activities; and anticipated refinancing of short-term revolving bank borrowings of **RMB 392,536,000** upon maturity[10](index=10&type=chunk) [Accounting Policies](index=6&type=section&id=3.2%20%E6%9C%83%E8%A8%88%E6%94%BF%E7%AD%96) The condensed consolidated financial statements are prepared on a historical cost basis, with accounting policies consistent with 2024 annual statements, and new IFRS standards had no significant impact - The condensed consolidated financial statements are prepared on a historical cost basis, with accounting policies consistent with the 2024 annual financial statements, except for the application of amended IFRS standards[11](index=11&type=chunk) - The first-time application of IAS 21 (Amendment) "Lack of Exchangeability" during this interim period had no significant impact on the Group's financial position and performance[12](index=12&type=chunk) [Revenue from Contracts with Customers](index=6&type=section&id=3.3%20%E5%AE%A2%E6%88%B6%E5%90%88%E7%B4%84%E6%94%B6%E7%9B%8A) The Group's H1 2025 revenue totaled RMB 750,100 thousand, primarily from food sales and hotel services, with distributors and mainland China as main contributors | Sales Channels | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Distributors | 687,611 | 771,139 | | Supermarkets | 1,298 | 1,475 | | Retail customers | 61,191 | 44,387 | | **Total** | **750,100** | **817,001** | | **Timing of Revenue Recognition** | | | | At a point in time | 739,924 | 807,942 | | Over time | 10,176 | 9,059 | | **Geographical Markets** | | | | China | 749,090 | 815,840 | | Others | 1,010 | 1,161 | [Operating Segments](index=7&type=section&id=3.4%20%E7%B6%93%E7%87%9F%E5%88%86%E9%83%A8) The Group's main operating segments include biscuit, noodle, and flour products; H1 2025 external sales revenue for biscuit products was RMB 553,052 thousand, noodle products RMB 86,985 thousand, and flour products RMB 77,629 thousand - Key operating decision-makers review operating results and financial information by product or service category and assess operating segment performance based on segment profit or loss (gross profit)[15](index=15&type=chunk) | Segment Revenue (External Sales) | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Biscuit products | 553,052 | 621,581 | | Noodle products | 86,985 | 68,089 | | Flour products | 77,629 | 92,178 | | Others | 32,434 | 35,153 | | **Total** | **750,100** | **817,001** | | Segment Results (Gross Profit) | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Biscuit products | 174,619 | 188,872 | | Noodle products | 18,783 | 14,858 | | Flour products | 11,946 | 8,079 | | Others | 294 | 3,004 | | **Total** | **205,642** | **214,813** | [Other Income](index=11&type=section&id=3.5%20%E5%85%B6%E4%BB%96%E6%94%B6%E5%85%A5) Other income for H1 2025 totaled RMB 24,808 thousand, primarily from government grants, interest income, and sales of scrap and packaging materials | Income Source | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Government grants | 4,411 | 6,528 | | Interest income (bank deposits) | 870 | 1,621 | | Interest income (loans receivable) | 3,930 | 4,890 | | Sales of scrap and packaging materials | 11,040 | 10,581 | | Rental income | 3,280 | 2,294 | | Other non-operating income | 1,160 | 176 | | **Total** | **24,808** | **26,526** | [Other Expenses](index=11&type=section&id=3.6%20%E5%85%B6%E4%BB%96%E9%96%8B%E6%94%AF) Total other expenses for H1 2025 amounted to RMB 39,134 thousand, mainly including R&D, donation, and cost of scrap materials sold | Expense Item | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Research and development expenses | 23,860 | 25,939 | | Donation expenses | 4,460 | 4,578 | | Cost of scrap and packaging materials sold | 8,118 | 5,953 | | Building lease expenses | 1,497 | 1,472 | | Other non-operating expenses | 1,199 | 1,165 | | **Total** | **39,134** | **39,107** | [Other Gains and Losses](index=12&type=section&id=3.7%20%E5%85%B6%E4%BB%96%E6%94%B6%E7%9B%8A%E5%8F%8A%E8%99%8B%E6%90%8D) Net other gains and losses for H1 2025 were RMB 699 thousand, primarily from property disposal loss and fair value gain on financial assets | Item | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Net exchange loss | (3) | (16) | | Loss on disposal of property, plant and equipment | (624) | (1,542) | | Fair value gain on financial assets at fair value through profit or loss | 1,326 | 3,843 | | **Total** | **699** | **2,285** | [Income Tax Expense](index=12&type=section&id=3.8%20%E6%89%80%E5%BE%97%E7%A8%85%E9%96%8B%E6%94%AF) Income tax expense for H1 2025 was RMB 7,448 thousand, mainly composed of current tax and deferred tax | Item | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | PRC enterprise income tax (current tax) | 10,604 | 14,159 | | Deferred tax | (3,156) | (3,899) | | **Total** | **7,448** | **10,260** | [Components of Profit for the Period](index=13&type=section&id=3.9%20%E6%9C%9F%E5%85%A7%E6%BA%A2%E5%88%A9%E6%A7%8B%E6%88%90) Profit for the period is derived after deducting directors' emoluments, employee benefits, depreciation, short-term lease expenses, and inventory costs | Item | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Directors' and chief executive's emoluments | 2,062 | 2,706 | | Total employee benefits expense | 123,180 | 132,512 | | Total depreciation and amortization | 51,179 | 52,977 | | Cost of inventories recognized as expense | 539,208 | 596,785 | [Reclassification of Discontinued Operations Held for Sale](index=13&type=section&id=3.10%20%E6%8C%81%E4%BD%9C%E5%87%BA%E5%94%AE%E7%9A%84%E5%B7%B2%E7%B5%82%E6%AD%A2%E7%B6%93%E7%87%9F%E6%A5%AD%E5%8B%99%E4%B9%8B%E9%87%8D%E5%88%97) Guangdong Quancheng Great Health Beverage Co., Ltd. (soy milk business) was reclassified as a continuing operation in H1 2025 due to its sale not being completed as scheduled - The sale of Guangdong Quancheng Great Health Beverage Co., Ltd. (soy milk business) was not completed as scheduled, thus its comparative figures in the condensed consolidated statement of profit or loss and other comprehensive income for H1 2025 have been reclassified as continuing operations[30](index=30&type=chunk)[31](index=31&type=chunk) [Assets and Liabilities Held for Sale](index=14&type=section&id=3.11%20%E6%8C%81%E4%BD%9C%E5%87%BA%E5%94%AE%E7%9A%84%E8%B3%87%E7%94%A2%E5%8F%8A%E8%B2%A0%E5%82%B5) The Group classified 100% equity of Jiangsu Jiasili Food Co., Ltd. (plant leasing) and a Huaibei land plot as assets and liabilities held for sale, expecting net proceeds to exceed net book value - The Group agreed to dispose of 100% equity interest in Jiangsu Jiasili Food Co., Ltd. (plant leasing business) for a total cash consideration of **RMB 48,300,000**[32](index=32&type=chunk) - The Group decided to transfer a land plot in Huaibei, Anhui Province, and return previously received government grants[32](index=32&type=chunk) | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Total Assets Classified as Held for Sale | 25,803 | 21,750 | | Total Liabilities Directly Associated with Assets Classified as Held for Sale | (14,931) | (463) | [Dividends](index=15&type=section&id=3.12%20%E8%82%A1%E6%81%AF) The Board declared an interim dividend of HK 5 cents per ordinary share for H1 2025, with no interim dividend for the corresponding period in 2024 - The Board has resolved to declare an interim dividend of **HK 5 cents** per ordinary share for the six months ended June 30, 2025 (H1 2024: nil)[34](index=34&type=chunk) [Earnings Per Share](index=15&type=section&id=3.13%20%E6%AF%8F%E8%82%A1%E7%9B%88%E5%88%A9) Basic earnings per share for H1 2025 was RMB 2.85 cents, lower than RMB 5.20 cents in H1 2024; diluted EPS is not presented due to no potential ordinary shares | Indicator | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Profit for the period attributable to owners of the Company for basic EPS calculation (RMB thousand) | 11,816 | 21,564 | | Weighted average number of ordinary shares (thousand shares) | 415,000 | 415,000 | | **Basic Earnings Per Share (RMB cents)** | **2.85** | **5.20** | [Property, Plant and Equipment, Right-of-Use Assets, Investment Properties and Intangible Assets](index=15&type=section&id=3.14%20%E7%89%A9%E6%A5%AD%E3%80%81%E5%BB%A0%E6%88%BF%E5%8F%8A%E8%A8%AD%E5%82%99%E3%80%81%E4%BD%BF%E7%94%A8%E6%AC%8A%E8%B3%87%E7%94%A2%E3%80%81%E6%8A%95%E8%B3%87%E7%89%A9%E6%A5%AD%E5%8F%8A%E7%84%A1%E5%BD%A2%E8%B3%87%E7%94%A2) In H1 2025, the Group acquired RMB 22,089 thousand in property, plant and equipment, generated gains from disposals, and had no additions to investment properties, right-of-use assets, or intangible assets - In H1 2025, the Group acquired property, plant and equipment of approximately **RMB 22,089 thousand** (H1 2024: RMB 45,090 thousand)[37](index=37&type=chunk) - Gains of **RMB 624 thousand** were generated from the disposal of certain plant and equipment (H1 2024: loss on disposal of RMB 1,542 thousand)[39](index=39&type=chunk) - There were no additions to investment properties, right-of-use assets, and intangible assets in H1 2025[39](index=39&type=chunk) [Financial Assets at Fair Value Through Profit or Loss](index=16&type=section&id=3.15%20%E9%80%8F%E9%81%8E%E6%90%8D%E7%9B%8A%E6%8C%89%E5%85%AC%E5%B9%B3%E5%80%BC%E5%88%97%E8%B3%BCC%E7%9A%84%E9%87%91%E8%9E%8D%E8%B3%87%E7%94%A2) As of June 30, 2025, total financial assets at fair value through profit or loss amounted to RMB 156,132 thousand, primarily from unlisted equity investments and funds in China | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Unlisted equity investments in China | 27,024 | 26,000 | | Unlisted equity investment funds in China | 129,108 | 128,806 | | **Total** | **156,132** | **154,806** | [Trade and Bills Receivables, Other Receivables and Deposits](index=17&type=section&id=3.16%20%E8%B2%BF%E6%98%93%E6%87%89%E6%94%B6%E6%AC%BE%E9%A0%85%E3%80%81%E6%87%89%E6%94%B6%E7%A5%A8%E6%93%9A%E5%8F%8A%E5%85%B6%E4%BB%96%E6%87%89%E6%94%B6%E6%AC%BE%E9%A0%85%E5%8F%8A%E6%8C%89%E9%87%91) As of June 30, 2025, net total trade and bills receivables were RMB 30,970 thousand, with total trade and bills receivables, other receivables, and deposits at RMB 194,868 thousand | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Net total trade and bills receivables | 30,970 | 45,641 | | Prepayments for raw materials | 60,712 | 17,643 | | Other recoverable taxes | 36,526 | 35,368 | | Other receivables (net of allowance) | 47,286 | 32,120 | | Other prepayments | 13,745 | 30,687 | | **Total** | **194,868** | **171,175** | | Ageing of Trade and Bills Receivables | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Within 2 months | 23,509 | 29,020 | | Over 6 months but within 1 year | 1,277 | 1,276 | | Over 1 year | 29 | 217 | [Impairment Assessment of Financial Assets](index=18&type=section&id=3.17%20%E9%87%91%E8%9E%8D%E8%B3%87%E7%94%A2%E6%B8%9B%E5%80%BC%E8%A9%95%E4%BC%B0) In H1 2025, the Group recognized a net impairment loss reversal of RMB (854) thousand on financial assets, mainly due to reversal on other receivables | Item | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Loans to non-controlling shareholders of subsidiaries | — | 1,579 | | Loans to an associate | 98 | — | | Trade receivables | 2,443 | 3,785 | | Other receivables (reversal) | (4,000) | (394) | | **Total (reversal) / impairment loss recognized** | **(854)** | **6,351** | [Trade and Bills Payables and Other Payables](index=19&type=section&id=3.18%20%E8%B2%BF%E6%98%93%E6%87%89%E4%BB%98%E6%AC%BE%E9%A0%85%E3%80%81%E6%87%89%E4%BB%98%E7%A5%A8%E6%93%9A%E5%8F%8A%E5%85%B6%E4%BB%96%E6%87%89%E4%BB%98%E6%AC%BE%E9%A0%85) As of June 30, 2025, total trade and bills payables were RMB 75,845 thousand, with total trade and bills payables and other payables at RMB 199,617 thousand | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Trade and bills payables | 75,845 | 191,020 | | Accrued expenses | 41,976 | 49,497 | | Wages and welfare payables | 27,554 | 39,354 | | Other payables | 32,190 | 31,707 | | **Total** | **199,617** | **343,839** | | Ageing of Trade and Bills Payables | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Within 3 months | 72,745 | 182,381 | | Over 1 year | 1,059 | 1,474 | [Bank Borrowings](index=19&type=section&id=3.19%20%E9%8A%80%E8%A1%8C%E5%80%9F%E6%AC%BE) In H1 2025, the Group incurred RMB 503,020 thousand in new bank borrowings and repaid RMB 390,889 thousand, with interest rates from 1.50% to 4.20% - In H1 2025, the Group incurred new bank borrowings of **RMB 503,020 thousand** and repaid bank borrowings of **RMB 390,889 thousand**[48](index=48&type=chunk) - As of June 30, 2025, bank borrowings bore interest at fixed annual rates ranging from **1.50% to 3.25%** or floating annual rates ranging from **2.37% to 4.20%**[48](index=48&type=chunk) [Review of Company Performance for the First Half of 2025](index=20&type=section&id=%E4%BA%8C%E9%9B%B6%E4%BA%8C%E4%BA%94%E5%B9%B4%E4%B8%8A%E5%8D%8A%E5%B9%B4%E5%85%AC%E5%8F%B8%E6%A5%AD%E7%B8%BE%E5%9B%9E%E9%A1%A7) [Industry Overview](index=20&type=section&id=4.1%20%E8%A1%8C%E6%A5%AD%E6%A6%82%E8%A7%80) In H1 2025, China's biscuit and snack industry showed resilient growth amid fierce competition, with consumers shifting to healthier, value-for-money products and channel changes dominated by bulk snack stores and short-video e-commerce - China's mainland biscuit and snack industry demonstrated resilient growth in H1 2025, facing intense competition and rapidly evolving channels[49](index=49&type=chunk) - Consumer demand is shifting towards healthy, value-for-money products, seeking functional benefits and clean labels[49](index=49&type=chunk) - Channel transformation is significant, with Douyin solidifying its position as a leading online sales channel for snacks, and bulk snack stores emerging and expanding market share[49](index=49&type=chunk) [Business Review and Strategy](index=20&type=section&id=4.2%20%E6%A5%AD%E5%8B%99%E5%9B%9E%E9%A1%A7%E8%88%87%E6%88%B0%E7%95%A5) Jiasili, with over 69 years of history, saw H1 2025 revenue decline 8.2%, gross profit 4.3%, and owners' profit 45.2%, responding with accelerated R&D, product upgrades, digital marketing, and channel optimization - The Jiasili brand has over **69 years** of history, with products sold in **31 provinces and cities** and **310 prefecture-level cities**, and exported to other countries[50](index=50&type=chunk) - In H1 2025, revenue was approximately **RMB 750.1 million**, a YoY decrease of **8.2%**; gross profit was approximately **RMB 205.6 million**, a YoY decrease of **4.3%**; and profit attributable to owners of the Company was approximately **RMB 11.8 million**, a YoY decrease of **45.2%**[52](index=52&type=chunk) - The Group prioritizes innovation, accelerating new product R&D, product upgrades, and digital marketing, engaging consumers through social media platforms like Douyin and Xiaohongshu, and strategically expanding into the mass e-commerce sector[53](index=53&type=chunk) [Revenue Variation Analysis](index=22&type=section&id=4.3%20%E6%94%B6%E7%9B%8A%E8%AE%8A%E5%8B%95%E5%88%86%E6%9E%90) In H1 2025, Group total revenue decreased 8.2% YoY, with biscuit series revenue down 11.0%, noodle business revenue up 27.8%, and flour business revenue down 15.8% | Product Category | H1 2025 (RMB million) | H1 2024 (RMB million) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Sweet single-slice biscuits | 211.6 | 245.8 | –13.9% | | Savory single-slice biscuits | 15.3 | 22.7 | –32.6% | | Sandwich biscuits | 197.9 | 191.8 | 3.2% | | Wafer biscuits | 54.9 | 69.5 | –21.0% | | Whole grain biscuits | 16.0 | 26.2 | –38.9% | | Other biscuits | 57.4 | 65.6 | –12.5% | | **Total Biscuit Series** | **553.1** | **621.6** | **–11.0%** | | Noodles | 87.0 | 68.1 | 27.8% | | Flour | 77.6 | 92.2 | –15.8% | | Others | 22.3 | 26.1 | –14.6% | | **Total** | **740.0** | **808.0** | **–8.4%** | - The overall decline in the biscuit segment resulted from a combination of macroeconomic pressures, changing consumer behavior, intense competition, inflation, and the popularity of alternative snacks[55](index=55&type=chunk) [Gross Profit Analysis](index=23&type=section&id=4.4%20%E6%AF%9B%E5%88%A9%E5%88%86%E6%9E%90) In H1 2025, Group gross profit decreased 4.3% to RMB 205.6 million, but gross margin increased 1.1 percentage points to 27.4% due to lower raw material costs; biscuit segment gross profit declined 7.5% - Group gross profit decreased by **4.3%** YoY to **RMB 205.6 million**, but gross margin slightly increased by **1.1 percentage points** to **27.4%**[56](index=56&type=chunk) - Gross margin growth was primarily due to lower input costs for certain raw materials such as sugar and flour[56](index=56&type=chunk) | Segment | H1 2025 Gross Profit (RMB million) | H1 2024 Gross Profit (RMB million) | YoY Change (%) | H1 2025 Gross Margin (%) | H1 2024 Gross Margin (%) | Gross Margin Change (percentage points) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Group Total | 205.6 | 214.8 | -4.3% | 27.4% | 26.3% | +1.1 | | Biscuit Segment | 174.6 | 188.8 | -7.5% | 31.6% | 30.4% | +1.2 | | Noodle Business | 18.8 | 14.8 | +26.4% | 21.6% | 21.8% | -0.2 | [Expense Analysis](index=23&type=section&id=4.5%20%E8%B2%BB%E7%94%A8%E5%88%86%E6%9E%90) In H1 2025, Group other income decreased 6.5% YoY, selling and distribution expenses increased 11.9% YoY, and administrative expenses slightly decreased 1.3% YoY [Other Income](index=23&type=section&id=4.5.1%20%E5%85%B6%E4%BB%96%E6%94%B6%E5%85%A5) - Other income was approximately **RMB 24.8 million**, a YoY decrease of **6.5%**, mainly due to reduced interest received on loans receivable and lower government grant income[57](index=57&type=chunk) [Selling and Distribution Expenses](index=23&type=section&id=4.5.2%20%E9%8A%B7%E5%94%AE%E5%8F%8A%E5%88%86%E9%8A%B7%E9%96%8B%E6%94%AF) - Selling and distribution expenses were approximately **RMB 111.1 million**, a YoY increase of **11.9%**[58](index=58&type=chunk) [Administrative Expenses](index=23&type=section&id=4.5.3%20%E8%A1%8C%E6%94%BF%E9%96%8B%E6%94%AF) - Administrative expenses were approximately **RMB 53.3 million**, a slight YoY decrease of **1.3%**[59](index=59&type=chunk) [Working Capital Management](index=23&type=section&id=4.6%20%E7%87%9F%E9%81%8B%E8%B3%87%E6%9C%AC%E7%AE%A1%E7%90%86) As of June 30, 2025, Group inventory balance decreased, inventory turnover days increased, and trade and bills receivables and other receivables increased with stable turnover days [Inventories](index=23&type=section&id=4.6.1%20%E5%AD%98%E8%B2%A8) - Inventory balance decreased by approximately **RMB 38.8 million** to **RMB 181.7 million** (December 31, 2024: RMB 220.5 million)[60](index=60&type=chunk) - Inventory turnover days increased by **8 days** to **67 days**, primarily attributed to early product preparation for Chinese New Year sales[60](index=60&type=chunk) [Trade and Bills Receivables, Other Receivables](index=24&type=section&id=4.6.2%20%E8%B2%BF%E6%98%93%E6%87%89%E6%94%B6%E6%AC%BE%E9%A0%85%E3%80%81%E6%87%89%E6%94%B6%E7%A5%A8%E6%93%9A%E5%8F%8A%E5%85%B6%E4%BB%96%E6%87%89%E6%94%B6%E6%AC%BE%E9%A0%85) - Trade and bills receivables and other receivables were approximately **RMB 193.5 million**, an increase of **13.7%** compared to December 31, 2024[61](index=61&type=chunk) - Trade and bills receivables and other receivables turnover days remained at **44 days** (December 31, 2024: 44 days)[61](index=61&type=chunk) [Financial and Liquidity Position](index=24&type=section&id=4.7%20%E8%B2%A1%E5%8B%99%E5%8F%8A%E6%B5%81%E5%8B%95%E8%B3%87%E9%87%91%E7%8B%80%E6%B3%81) As of June 30, 2025, bank balances and cash decreased to RMB 279.4 million, total bank borrowings increased 16.4% to RMB 797.2 million, total debt-to-equity ratio rose to 81.1%, and current ratio was 0.86 | Indicator | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Bank balances and cash | 279.4 | 379.1 | -26.3% | | Total bank borrowings | 797.2 | 685.1 | +16.4% | | Total debt-to-equity ratio | 81.1% | 67.6% | +13.5pp | | Net debt-to-equity ratio | 52.7% | 30.2% | +22.5pp | | Net current liabilities | 121.2 | 175.5 | -31.0% | | Current ratio | 0.86 | 0.83 | +0.03 | - The Board believes the Group's financial position is healthy and robust, with sufficient resources to support working capital needs and meet foreseeable capital expenditures[63](index=63&type=chunk) [Outlook](index=25&type=section&id=4.8%20%E5%89%8D%E6%99%AF%E5%B1%95%E6%9C%9B) The Group anticipates product upgrades as a key biscuit market driver, focusing on streamlining operations, enhancing brand awareness and product quality, and leveraging efficiencies, maintaining cautious optimism for H2 - Product upgrades in the biscuit market will be a significant driver, with companies possessing premium advantages capturing more market share[65](index=65&type=chunk) - The Group will focus on streamlining operations, enhancing brand awareness, maintaining and improving product quality, and leveraging operational efficiencies and cost-saving measures[65](index=65&type=chunk) - The Group maintains cautious optimism for satisfactory results in the second half of the current year's business operations[65](index=65&type=chunk) [Other Information](index=25&type=section&id=%E5%85%B6%E4%BB%96%E8%B3%87%E6%96%99) [Human Resources and Employee Remuneration](index=25&type=section&id=5.1%20%E4%BA%BA%E5%8A%9B%E8%B3%87%E6%BA%90%E5%8F%8A%E5%83%B1%E5%93%A1%E8%96%AA%E9%85%AC) As of June 30, 2025, the Group had 2,220 full-time employees, a YoY decrease, with total employee benefits expense amounting to RMB 123.2 million - As of June 30, 2025, the Group had **2,220 full-time employees** (June 30, 2024: 2,582 employees)[66](index=66&type=chunk) - Total employee benefits expense (including directors' and chief executive's emoluments) was approximately **RMB 123.2 million** (H1 2024: approximately RMB 132.5 million)[66](index=66&type=chunk) [Corporate Governance Practices](index=25&type=section&id=5.2%20%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB%E5%B8%B8%E8%A6%8F) The Board is committed to high corporate governance standards, adopting the Listing Rules' Corporate Governance Code; the combined Chairman and CEO role deviates but is deemed beneficial with adequate checks and balances - The Board has adopted the Corporate Governance Code set out in Appendix 14 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited[67](index=67&type=chunk) - The roles of Chairman and Chief Executive Officer are performed by Mr. Huang Xianming, deviating from Code Provision C.2.1[68](index=68&type=chunk) - The Board believes this combined role is beneficial for maintaining policy continuity and operational stability, with adequate checks and balances in place[68](index=68&type=chunk) [Standard Code for Securities Transactions by Directors](index=26&type=section&id=5.3%20%E8%91%A3%E4%BA%8B%E8%AD%89%E5%88%B8%E4%BA%A4%E6%98%93%E6%A8%99%E6%BA%96%E5%AE%88%E5%89%87) The company adopted the Standard Code for Securities Transactions by Directors per Listing Rules Appendix 10, and all directors confirmed compliance during the reporting period - The Company has adopted the Standard Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix 10 to the Listing Rules[69](index=69&type=chunk) - All Directors confirmed compliance with the required standards of dealing throughout the reporting period[69](index=69&type=chunk) [Audit Committee](index=26&type=section&id=5.4%20%E5%AF%A9%E6%A0%B8%E5%A7%94%E5%93%A1%E6%9C%83) The Audit Committee, comprising three independent non-executive directors, reviewed H1 2025 interim results, finding no disagreements on accounting treatments - The Audit Committee, comprising three independent non-executive directors, reviewed and discussed the Group's interim results for the six months ended June 30, 2025[70](index=70&type=chunk) - The Audit Committee had no disagreements regarding the accounting treatments adopted by the Company[70](index=70&type=chunk) [Listing of Securities Transactions](index=26&type=section&id=5.5%20%E4%B8%8A%E5%B8%82%E8%AD%89%E5%88%B8%E4%BA%A4%E6%98%93) In H1 2025, neither the company nor any of its subsidiaries purchased, sold, or redeemed any listed securities - In H1 2025, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[71](index=71&type=chunk) [Interim Dividend](index=26&type=section&id=5.6%20%E4%B8%AD%E6%9C%9F%E8%82%A1%E6%81%AF) The Board declared an interim dividend of HK 5.00 cents per ordinary share for H1 2025, payable to shareholders on record as of September 16, 2025 - The Board has resolved to declare an interim dividend of **HK 5.00 cents** per ordinary share for the reporting period[72](index=72&type=chunk) - The interim dividend will be paid to shareholders of the Company whose names appear on the register of members on September 16, 2025[72](index=72&type=chunk) [Share Registrar](index=27&type=section&id=5.7%20%E8%82%A1%E4%BB%BD%E9%81%8E%E6%88%B6%E7%99%BB%E8%A8%98) To determine eligibility for the 2025 interim dividend, the company will suspend share transfer registration from September 15 to September 16, 2025 - To determine eligibility for the 2025 interim dividend, the Company will suspend share transfer registration from **September 15 to September 16, 2025**[73](index=73&type=chunk) - The record date for determining eligibility for the 2025 interim dividend is **September 16, 2025**[73](index=73&type=chunk) [Publication of Results](index=27&type=section&id=5.8%20%E6%A5%AD%E7%B8%BE%E5%88%8A%E7%99%BC) This interim results announcement has been published on the websites of The Stock Exchange of Hong Kong Limited and the company - This interim results announcement has been published on the website of The Stock Exchange of Hong Kong Limited (www.hkex.com.hk) and the Company's website (http://www.gdjsl.com)[74](index=74&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告之內容概不負責，對其 準確性或完整性亦不發表任何聲明，並明確表示概不就因本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之任何損失承擔任何責任。 KAISUN HOLDINGS LIMITED 凱順控股有限公司 * （於開曼群島註冊成立之有限公司） （股份代號：8203） 一帶一路參與者 截至二零二五年六月三十日止六個月 中期業績公告 凱順控股有限公司（「本公司」）董事（「董事」）會（「董事會」）欣然宣佈本公司及其附屬公司 （「本集團」）截至二零二五年六月三十日止六個月之未經審核簡明綜合財務業績。本公告 列載本公司二零二五年中期業績報告全文，乃符合香港聯合交易所有限公司GEM （「GEM」）證券上市規則（「GEM上市規則」）中有關中期業績初步公告附載的資料之相關 要求。 承董事會命 凱順控股有限公司 執行董事 程可彤 香港，二零二五年八月二十九日 * 僅供識別 – 1 – 本公告之中英版本如有任何歧義，概以英文本為準。 於本公告日期，董事會包括三名本公司執行董事楊永成先生、陳振郎先生及程可彤先生。 本公告的資料乃遵照《聯交所的GEM證券上市規則》（ ...

[Company Information and Performance Announcement](index=1&type=section&id=I.%20Company%20Information%20and%20Performance%20Announcement) This section provides an overview of the company's profile and presents the unaudited interim results for the six months ended June 30, 2025 [Company Overview](index=1&type=section&id=1.1%20Company%20Overview) Shanghai International Shanghai Growth Investment Limited (stock code: 770) is an investment company incorporated in the Cayman Islands, primarily investing in listed and unlisted equity and debt securities and other financial instruments in Greater China - The company is an exempted limited liability company incorporated in the Cayman Islands, with shares listed on The Stock Exchange of Hong Kong Limited[7](index=7&type=chunk) - Its principal business involves investing in listed and unlisted equity and debt securities and other financial instruments primarily established or with significant operations in Greater China[7](index=7&type=chunk) [Interim Results Announcement](index=1&type=section&id=1.2%20Interim%20Results%20Announcement) The Board of Directors is pleased to present the unaudited interim results for the six months ended June 30, 2025, which have been reviewed by the Audit Committee - The Board has presented the unaudited interim results for the six months ended June 30, 2025, compared with the same period in 2024[2](index=2&type=chunk) - The unaudited interim results have been reviewed by the company's Audit Committee[2](index=2&type=chunk) [Interim Condensed Financial Statements](index=1&type=section&id=II.%20Interim%20Condensed%20Financial%20Statements) This section presents the company's condensed financial statements, including the statement of profit or loss, financial position, and changes in equity for the interim period [Condensed Statement of Profit or Loss and Other Comprehensive Income](index=1&type=section&id=2.1%20Condensed%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For the six months ended June 30, 2025, the company reported a net loss of $154,054, an increase from the prior year, mainly due to reduced investment income and higher exchange losses Interim Condensed Statement of Profit or Loss and Other Comprehensive Income Key Data | Indicator | 2025 H1 (USD) | 2024 H1 (USD) | | :--- | :--- | :--- | | Interest Income | 217 | 3,409 | | Dividend Income | 2,441 | 13,444 | | Net Change in Unrealized Fair Value Gains on Financial Assets at FVTPL | 11,565 | 71,841 | | Net (Loss)/Gain on Disposal of Financial Assets at FVTPL | (8,759) | 16 | | Exchange Loss | (6,270) | (1,355) | | Total Income and Investment Losses | (806) | 87,355 | | Fund Management Company Fees | (7,820) | (15,127) | | Administrative Expenses | (145,428) | (191,668) | | Total Expenses | (153,248) | (206,795) | | Loss Before Tax | (154,054) | (119,440) | | Loss for the Period | (154,054) | (119,440) | | Loss Per Share - Basic and Diluted | 1.44 US cents | 1.12 US cents | - Loss for the period increased from **$119,440** in the same period of 2024 to **$154,054** in 2025[3](index=3&type=chunk) - Exchange loss significantly increased from **$1,355** in the same period of 2024 to **$6,270** in 2025[3](index=3&type=chunk) [Condensed Statement of Financial Position](index=2&type=section&id=2.2%20Condensed%20Statement%20of%20Financial%20Position) As of June 30, 2025, the company's total assets and net assets decreased, primarily due to lower cash and bank balances and a decline in financial assets at fair value through profit or loss Interim Condensed Statement of Financial Position Key Data | Indicator | June 30, 2025 (USD) | December 31, 2024 (USD) | | :--- | :--- | :--- | | Prepayments | 300,548 | 45,975 | | Financial Assets at Fair Value Through Profit or Loss | 94,316 | 137,489 | | Cash and Bank Balances | 666,325 | 1,064,658 | | Total Current Assets | 1,061,189 | 1,248,122 | | Total Current Liabilities | 17,509 | 50,388 | | Net Assets | 1,043,680 | 1,197,734 | | Total Equity | 1,043,680 | 1,197,734 | | Net Asset Value Per Share | 0.10 | 0.11 | - As of June 30, 2025, cash and bank balances decreased to **$666,325** from **$1,064,658** as of December 31, 2024[4](index=4&type=chunk) - Financial assets at fair value through profit or loss decreased from **$137,489** as of December 31, 2024, to **$94,316** as of June 30, 2025[4](index=4&type=chunk) [Condensed Statement of Changes in Equity](index=3&type=section&id=2.3%20Condensed%20Statement%20of%20Changes%20in%20Equity) For the six months ended June 30, 2025, total equity decreased due to the comprehensive loss for the period, with net changes in unrealized fair value gains on financial assets at fair value through profit or loss reclassified to capital reserve Interim Condensed Statement of Changes in Equity Key Data | Indicator | June 30, 2025 (USD) | June 30, 2024 (USD) | | :--- | :--- | :--- | | Share Capital | 1,068,600 | 1,068,600 | | Share Premium | 12,921,815 | 12,921,815 | | Capital Reserve | 15,806 | (5,761,119) | | Accumulated Losses | (12,962,541) | (6,793,504) | | Total | 1,043,680 | 1,435,792 | - As of June 30, 2025, total equity was **$1,043,680**, a decrease from **$1,197,734** as of December 31, 2024[5](index=5&type=chunk) - The total comprehensive loss for the period was **$154,054**, leading to an increase in accumulated losses[5](index=5&type=chunk) - Net change in unrealized fair value gains on financial assets at fair value through profit or loss of **$11,565** has been reclassified from accumulated losses to capital reserve[5](index=5&type=chunk)[6](index=6&type=chunk) [Notes to the Condensed Financial Statements](index=4&type=section&id=III.%20Notes%20to%20the%20Condensed%20Financial%20Statements) This section provides detailed notes on the company's financial statements, covering accounting policies, segment information, investment performance, and other financial disclosures [Company Information and Basis of Preparation](index=4&type=section&id=3.1%20Company%20Information%20and%20Basis%20of%20Preparation) This interim condensed financial information is prepared in accordance with HKAS 34 and Appendix D2 of the Listing Rules, presented in US dollars, and uses the historical cost convention, except for financial assets at fair value through profit or loss - The company is an investment company incorporated in the Cayman Islands, primarily investing in listed and unlisted securities in Greater China[7](index=7&type=chunk) - The interim condensed financial information is prepared in accordance with Hong Kong Accounting Standard 34 and the applicable disclosure requirements of Appendix D2 to the Listing Rules[8](index=8&type=chunk) - The financial information is presented in US dollars and prepared under the historical cost convention, except for financial assets at fair value through profit or loss, which are measured at fair value[8](index=8&type=chunk) [Accounting Judgements, Estimates, and Policies](index=5&type=section&id=3.2%20Accounting%20Judgements,%20Estimates,%20and%20Policies) The preparation of interim condensed financial information involves management's judgments, estimates, and assumptions affecting the application of accounting policies and reported amounts, with consistent policies applied as in the annual financial statements - Management is required to make judgments, estimates, and assumptions in the preparation of financial information, and actual results may differ from these estimates[9](index=9&type=chunk) - The accounting policies adopted in preparing the interim condensed financial information are consistent with those applied in the preparation of the annual financial statements for the year ended December 31, 2024[10](index=10&type=chunk) [Operating Segment Information](index=6&type=section&id=3.3%20Operating%20Segment%20Information) The company is segmented into listed and unlisted securities. For the six months ended June 30, 2025, the listed securities segment generated $5,247 in revenue, while the unlisted securities segment had no revenue - The company is divided into two reportable operating segments: listed securities and unlisted securities[11](index=11&type=chunk) Operating Segment Results | Segment | 2025 H1 (USD) | 2024 H1 (USD) | | :--- | :--- | :--- | | Listed Securities | 5,247 | 76,878 | | Unlisted Securities | – | 8,423 | | Total Segment Results | 5,247 | 85,301 | Operating Segment Assets | Segment | June 30, 2025 (USD) | December 31, 2024 (USD) | | :--- | :--- | :--- | | Listed Securities | 94,316 | 137,489 | | Unlisted Securities | – | – | | Total Segment Assets | 94,316 | 137,489 | - As of June 30, 2025, unlisted securities segment assets were **zero**, while listed securities segment assets were **$94,316**[15](index=15&type=chunk) [Investment Income and Losses](index=8&type=section&id=3.4%20Investment%20Income%20and%20Losses) For the six months ended June 30, 2025, the company recorded realized losses of $8,759, compared to realized gains of $16 in the prior year, with a significant decrease in net unrealized gains Investment Income/(Loss) Overview | Indicator | 2025 H1 (USD) | 2024 H1 (USD) | | :--- | :--- | :--- | | Realized Loss/(Gain) | (8,759) | 16 | | Unrealized Gains | 11,565 | 71,841 | | Total Realized and Unrealized Gains | 2,806 | 71,857 | - For the six months ended June 30, 2025, realized losses were **$8,759**, compared to realized gains of **$16** in the prior year[18](index=18&type=chunk)[19](index=19&type=chunk) - Unrealized gains significantly decreased from **$71,841** in the same period of 2024 to **$11,565** in 2025[18](index=18&type=chunk)[19](index=19&type=chunk) [Loss Before Tax and Taxation](index=9&type=section&id=3.5%20Loss%20Before%20Tax%20and%20Taxation) For the six months ended June 30, 2025, the company's loss before tax was $154,054, with no provision for Hong Kong profits tax due to the absence of assessable profits Components of Loss Before Tax | Expense Item | 2025 H1 (USD) | 2024 H1 (USD) | | :--- | :--- | :--- | | Auditors' Remuneration | – | 12,551 | | Custodian Fees | 520 | 4,178 | | Salaries and Other Benefits | 31,378 | 48,459 | | Retirement Benefit Costs | – | 1,151 | - For the six months ended June 30, 2025, the company's loss before tax was **$154,054**[3](index=3&type=chunk) - No provision for Hong Kong profits tax was made as the company did not generate assessable profits in Hong Kong[21](index=21&type=chunk) [Dividends and Loss Per Share](index=10&type=section&id=3.6%20Dividends%20and%20Loss%20Per%20Share) The Board does not recommend an interim dividend for the six months ended June 30, 2025. Basic loss per share increased to 1.44 US cents from 1.12 US cents in the prior year - The Board does not recommend the declaration of an interim dividend for the six months ended June 30, 2025[22](index=22&type=chunk) - Basic loss per share was **1.44 US cents**, higher than **1.12 US cents** in the same period of 2024[23](index=23&type=chunk) - The basic loss per share amount was not adjusted for dilution as the company had no potentially dilutive ordinary shares outstanding[23](index=23&type=chunk) [Financial Assets at Fair Value Through Profit or Loss](index=10&type=section&id=3.7%20Financial%20Assets%20at%20Fair%20Value%20Through%20Profit%20or%20Loss) As of June 30, 2025, the company's unlisted equity investment (Global Market Group Limited) was valued at zero, while listed equity investments were valued at $94,316 at fair value, a decrease from the end of last year Financial Assets at Fair Value Through Profit or Loss | Asset Class | June 30, 2025 (USD) | December 31, 2024 (USD) | | :--- | :--- | :--- | | Unlisted Equity Investments | – | – | | Listed Equity Investments | 94,316 | 137,489 | | Total | 94,316 | 137,489 | - The company's unlisted equity investment in Global Market Group Limited was valued at **zero** as of June 30, 2025, due to its ongoing operating losses, potential contingent liabilities, and lack of a clear fundraising plan[25](index=25&type=chunk) - Net fair value gains on listed equity investments amounted to **$2,806**, which included a net loss of **$8,759** recognized on the disposal of listed equity investments[26](index=26&type=chunk) [Cash and Bank Balances](index=11&type=section&id=3.8%20Cash%20and%20Bank%20Balances) The company's bank cash earns interest at floating rates and is held with reputable banks. As of June 30, 2025, cash and bank balances totaled $666,325 - Bank cash earns interest at floating rates based on daily bank deposit rates[27](index=27&type=chunk) - Bank balances are deposited with reputable banks that have no recent history of default[27](index=27&type=chunk) - As of June 30, 2025, cash and bank balances amounted to **$666,325**[4](index=4&type=chunk) [Share Capital and Net Asset Value Per Share](index=11&type=section&id=3.9%20Share%20Capital%20and%20Net%20Asset%20Value%20Per%20Share) The company's authorized and issued share capital remained unchanged. As of June 30, 2025, net asset value per share decreased to $0.10 from $0.11 as of December 31, 2024 Share Capital Structure | Share Capital Type | June 30, 2025 (USD) | December 31, 2024 (USD) | | :--- | :--- | :--- | | Authorized Share Capital (18,000,000 shares of $0.10 each) | 1,800,000 | 1,800,000 | | Issued and Fully Paid Share Capital (10,686,000 shares of $0.10 each) | 1,068,600 | 1,068,600 | - Net asset value per share decreased from **$0.11** as of December 31, 2024, to **$0.10** as of June 30, 2025[29](index=29&type=chunk) [Related Party Transactions](index=12&type=section&id=3.10%20Related%20Party%20Transactions) For the six months ended June 30, 2025, investment management and administrative fees paid to the fund management company decreased to $7,820, and the investment management agreement was terminated on May 7, 2025 Related Party Transaction Fees | Fee Type | 2025 H1 (USD) | 2024 H1 (USD) | | :--- | :--- | :--- | | Investment Management and Administrative Fees Charged by Fund Management Company | 7,820 | 15,127 | | Directors' Emoluments | 11,534 | 24,934 | - The investment management agreement was terminated and ceased to be effective after May 7, 2025[31](index=31&type=chunk) - As of June 30, 2025, the outstanding balance payable to the fund management company was **zero**[32](index=32&type=chunk) - The fund management company was not entitled to any performance fee during the period[31](index=31&type=chunk) [Management Discussion and Analysis](index=14&type=section&id=IV.%20Management%20Discussion%20and%20Analysis) This section provides management's perspective on the company's financial performance, investment activities, outlook, and key financial metrics for the reporting period [Financial Review](index=14&type=section&id=4.1%20Financial%20Review) For the six months ended June 30, 2025, the company's net loss increased to $154,054, primarily due to reduced unrealized gains from listed securities. Despite a strong Hong Kong market, positive returns from listed securities were insufficient to offset operating costs, leading to a decrease in net asset value per share - The company recorded an unaudited net loss of **$154,054** for the six months ended June 30, 2025, an increase from the net loss of **$119,440** in the same period last year[34](index=34&type=chunk) - The increase in net loss was primarily due to a decrease in unrealized gains from listed securities[34](index=34&type=chunk) - The company's listed securities investment portfolio recorded a **5.56%** positive return[36](index=36&type=chunk) - Net asset value per share decreased from **$0.11** at the end of 2024 to **$0.10** as of June 30, 2025, a **9.09%** decline, mainly because positive returns from securities investments could not offset operating costs[36](index=36&type=chunk) [Investment Review](index=15&type=section&id=4.2%20Investment%20Review) As of June 30, 2025, the investment portfolio comprised 88% cash and cash equivalents and 12% listed investments, with no unlisted investments. Listed investments yielded a 5.56% positive return amid a strong Hong Kong market, while unlisted investments were fully impaired, and no new investments were made in the first half [Investment Portfolio Allocation](index=15&type=section&id=4.2.1%20Investment%20Portfolio%20Allocation) As of June 30, 2025, the company's investment portfolio primarily consisted of cash and other cash equivalents (88%) and listed investments (12%), with unlisted investments at zero Investment Portfolio Allocation | Category | June 30, 2025 (%) | December 31, 2024 (%) | | :--- | :--- | :--- | | Listed Investments | 12% | 11% | | Cash and Other Cash Equivalents | 88% | 89% | | Unlisted Investments | 0% | 0% | | Total | 100% | 100% | [Listed Investments Review](index=16&type=section&id=4.2.2%20Listed%20Investments%20Review) The Hong Kong stock market performed strongly in the first half of 2025, with the Hang Seng Index rising by 20%. The company's listed investment portfolio recorded a positive return of 5.56% during this period - The Hong Kong stock market performed strongly in the first half of 2025, with the Hang Seng Index rising by **20%**[38](index=38&type=chunk) - The company's listed investment portfolio recorded a positive return of **5.56%** in the first half of 2025[39](index=39&type=chunk) - The best-performing sectors were oil, coal, banking, and telecommunications, while retail, healthcare, and solar were among the worst-performing sectors[38](index=38&type=chunk) [Unlisted Investments Review](index=16&type=section&id=4.2.3%20Unlisted%20Investments%20Review) The company's unlisted equity securities investment has been fully impaired, and no new unlisted investments were made in the first half of 2025 - The company holds an unlisted equity securities investment that has been fully impaired[40](index=40&type=chunk) - Due to limited funds, the company did not make any new investments in the first half of 2025[40](index=40&type=chunk) [Outlook](index=17&type=section&id=4.3%20Outlook) The Board is cautiously optimistic about the market outlook for the second half, anticipating potential US interest rate cuts and continued stimulus measures in China. The Board will focus on profit-taking and remain vigilant regarding future global stock market volatility - The market outlook for the second half is cautiously optimistic, primarily based on potential US interest rate cuts and anticipated continued stimulus measures in China[41](index=41&type=chunk) - The Hong Kong market's valuation remains attractive compared to global markets[41](index=41&type=chunk) - In the second half, the Board will primarily focus on profit-taking and remain vigilant regarding future global stock market volatility[42](index=42&type=chunk) [Key Performance Indicators](index=17&type=section&id=4.4%20Key%20Performance%20Indicators) The Board considers the company's regular net asset value as the primary financial indicator for assessing business development and performance - The Board considers the company's regular net asset value to be a key financial indicator for effectively assessing the company's business development and performance[43](index=43&type=chunk) [Liquidity, Financial Resources, and Liabilities](index=17&type=section&id=4.5%20Liquidity,%20Financial%20Resources,%20and%20Liabilities) As of June 30, 2025, cash and bank balances were $666,325, primarily used for operational administrative expenses. The company had no bank loans, capital commitments, or significant contingent liabilities, and both liquidity and total debt-to-asset ratios improved - The company's cash and bank balances as of June 30, 2025, were **$666,325**, a decrease from **$1,064,658** as of December 31, 2024[44](index=44&type=chunk) - As of June 30, 2025, the company had no bank loans or capital commitments in unlisted investments[44](index=44&type=chunk) - The company has no pledged assets, significant capital commitments for equity investments, or any material contingent liabilities[45](index=45&type=chunk) Liquidity and Gearing Ratios | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Current Ratio | 60.61 | 24.77 | | Total Liabilities to Total Assets Ratio | 1.65% | 4.04% | [Exchange Rate Fluctuation Risk](index=18&type=section&id=4.6%20Exchange%20Rate%20Fluctuation%20Risk) As most of the company's assets, liabilities, and transactions are settled in HKD or USD, and HKD is pegged to USD, the company faces no significant exchange rate risk and thus requires no hedging arrangements - Most of the company's assets, liabilities, and transactions are denominated in Hong Kong Dollars or US Dollars[47](index=47&type=chunk) - As the Hong Kong Dollar remains pegged to the US Dollar, the company has no significant exchange rate risk and does not require hedging arrangements[47](index=47&type=chunk) [Significant Acquisitions and Disposals](index=18&type=section&id=4.7%20Significant%20Acquisitions%20and%20Disposals) For the six months ended June 30, 2025, the company did not undertake any significant acquisitions or disposals of subsidiaries, associates, or joint ventures - For the six months ended June 30, 2025, the company did not undertake any significant acquisitions or disposals of subsidiaries, associates, or joint ventures[48](index=48&type=chunk) [Employees and Securities Transactions](index=18&type=section&id=4.8%20Employees%20and%20Securities%20Transactions) The company employs one staff member. During the reporting period, the company engaged SS Capital (Hong Kong) Investment Management Limited for daily administrative and portfolio management, but this investment management agreement was terminated on May 7, 2025. No listed securities were purchased, sold, or redeemed during the period - The company employs one staff member[49](index=49&type=chunk) - The investment management agreement was terminated after May 7, 2025, and all investment decisions and daily operations are now managed by the Board[49](index=49&type=chunk)[53](index=53&type=chunk) - For the six months ended June 30, 2025, the company did not purchase, sell, or redeem any listed securities[50](index=50&type=chunk) [Interim Dividend](index=18&type=section&id=4.9%20Interim%20Dividend) The Board resolved not to declare an interim dividend for the six months ended June 30, 2025 - The Board resolved not to declare an interim dividend for the six months ended June 30, 2025[51](index=51&type=chunk) [Corporate Governance](index=19&type=section&id=V.%20Corporate%20Governance) This section details the company's commitment to maintaining sound corporate governance, compliance with relevant codes, and the composition and review activities of its Audit Committee [Compliance with Corporate Governance Code](index=19&type=section&id=5.1%20Compliance%20with%20Corporate%20Governance%20Code) The company is committed to maintaining sound corporate governance and has established procedures to comply with the Corporate Governance Code in Appendix C1 of the Listing Rules. However, there are deviations regarding the division of responsibilities between Chairman and Chief Executive and the Chairman's attendance at the AGM - The company has established corporate governance procedures to comply with the Corporate Governance Code set out in Appendix C1 of the Listing Rules[52](index=52&type=chunk) - The company has not appointed a Chairman or Chief Executive, as the Board believes all directors collectively share leadership and management responsibilities[53](index=53&type=chunk) - The Board elects one of its directors to chair the Annual General Meeting, in lieu of the Chairman's attendance requirement[53](index=53&type=chunk) [Standard Code for Securities Transactions](index=20&type=section&id=5.2%20Standard%20Code%20for%20Securities%20Transactions) The company has adopted the Standard Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix C3 of the Listing Rules and confirms that all directors complied with the code during the reporting period - The company has adopted the Standard Code for Securities Transactions by Directors of Listed Issuers as its code of conduct for directors' securities transactions[54](index=54&type=chunk) - All directors confirmed their compliance with the required standards set out in the Standard Code for the six months ended June 30, 2025[54](index=54&type=chunk) [Audit Committee Review](index=20&type=section&id=5.3%20Audit%20Committee%20Review) The company's Audit Committee and management have reviewed the accounting principles and practices adopted by the company, discussing risk management, internal controls, and financial reporting matters, including the interim accounts - The company's Audit Committee and management have reviewed the accounting principles and practices adopted by the company, discussing risk management, internal controls, and financial reporting matters[55](index=55&type=chunk) - As of the announcement date, the Audit Committee comprises Ms. Liu Meixue (Chairperson) and Mr. Cai Dehui, both independent non-executive directors[55](index=55&type=chunk) [Non-Compliance with Listing Rules](index=20&type=section&id=5.4%20Non-Compliance%20with%20Listing%20Rules) Due to the retirement of an independent non-executive director, the company failed to comply with Listing Rules 3.10(1) (at least three INEDs) and 3.21 (at least three Audit Committee members). The company is actively seeking suitable candidates to fill the vacancies as soon as possible - Following the retirement of Dr. Hua Min as an independent non-executive director on June 27, 2025, the Board failed to comply with Listing Rules 3.10(1) (requiring at least three independent non-executive directors) and 3.21 (requiring at least three members on the Audit Committee)[56](index=56&type=chunk) - The company is actively seeking suitable candidates to fill the vacancies for independent non-executive director and Audit Committee member to comply with the Listing Rules as soon as practicable[56](index=56&type=chunk) [Post-Reporting Period Events and Others](index=21&type=section&id=VI.%20Post-Reporting%20Period%20Events%20and%20Others) This section covers significant events occurring after the reporting period, details on report publication, and acknowledgements to stakeholders, along with the current composition of the Board of Directors [Events After Reporting Period](index=21&type=section&id=6.1%20Events%20After%20Reporting%20Period) On July 4, 2025, the company successfully completed a placing of 2,137,200 shares to two placees, raising net proceeds of approximately $404,000 - On July 4, 2025, the company successfully placed a total of **2,137,200** placing shares to two placees at a placing price of **$0.195** per placing share[57](index=57&type=chunk) - The gross proceeds from the placing amounted to approximately **$417,000**, with net proceeds of approximately **$404,000**[57](index=57&type=chunk) [Publication of Report and Acknowledgements](index=21&type=section&id=6.2%20Publication%20of%20Report%20and%20Acknowledgements) This interim results announcement has been published on the company's and HKEX websites, and the interim report will be dispatched to shareholders in due course. The Board thanks the management team, staff, and shareholders for their support - This announcement is published on the company's website (http://shanghaigrowth.etnet.com.hk) and the HKEX website (www.hkexnews.hk)[58](index=58&type=chunk) - The company's 2025 interim report will be published on the company's and HKEX websites and dispatched to shareholders in due course[58](index=58&type=chunk) - The Board extends its gratitude to the management team, staff, and shareholders for their contributions and support during the reporting period[59](index=59&type=chunk) [Board of Directors](index=22&type=section&id=6.3%20Board%20of%20Directors) As of the announcement date, the Board of Directors includes Executive Director Mr. Zhao Tian, Non-executive Directors Mr. Cheng Juesheng and Mr. Lin Weichen, and Independent Non-executive Directors Mr. Cai Dehui and Ms. Liu Meixue Board of Directors Members | Category | Name | | :--- | :--- | | Executive Director | Mr. Zhao Tian | | Non-executive Directors | Mr. Cheng Juesheng, Mr. Lin Weichen | | Independent Non-executive Directors | Mr. Cai Dehui, Ms. Liu Meixue |

[Executive Summary](index=1&type=section&id=%E6%91%98%E8%A6%81) The Group's revenue grew significantly, but the loss attributable to equity holders widened due to valuation losses on investment properties and other factors Key Financial and Operating Data Overview for H1 2025 | Indicator | H1 2025 (HK$) | H1 2024 (HK$) | YoY Change | Remarks | | :--- | :--- | :--- | :--- | :--- | | Property and car park pre-sales value | 451,100,000 | 416,100,000 | +8.4% | Property pre-sales value HK$450,100,000 | | Pre-sold saleable GFA | 9,162 sq.m. | 3,800 sq.m. | +141.1% | | | Average selling price of pre-sold properties | 49,126.8 HK$/sq.m. | 108,763.2 HK$/sq.m. | -54.8% | | | Revenue | 737,300,000 | 453,500,000 | +62.6% | | | Recurring rental income from investment properties | 105,400,000 | 114,400,000 | -7.9% | | | Gross loss ratio | 2.6% | 22.5% | Improvement | | | Loss attributable to equity holders and holders of perpetual convertible securities | 746,500,000 | 539,200,000 | +38.4% | Loss widened | | Basic and diluted loss per share | 48.8 HK cents | 35.3 HK cents | +38.2% | Loss widened | | Net gearing ratio (as of June 30) | 84.7% | 80.0% (Dec 31, 2024) | Increased | | | Fair value of investment properties (as of June 30) | 5,926,400,000 | - | - | Approx. 39.3% of total assets | | Number of projects held (as of June 30) | 16 | - | - | Est. net saleable/leasable GFA approx. 397,015 sq.m. | - The Group faces **material uncertainties regarding its ability to continue as a going concern**, primarily due to the deteriorating property market, tightening financing environment, and foreign exchange restrictions on remitting funds from Mainland China[12](index=12&type=chunk) - **No interim dividend was declared** for the period, consistent with the prior year[3](index=3&type=chunk) [Interim Results](index=3&type=section&id=%E4%B8%AD%E6%9C%9F%E6%A5%AD%E7%B8%BE) [Consolidated Statement of Profit or Loss](index=3&type=section&id=%E7%B6%9C%E5%90%88%E6%90%8D%E7%9B%8A%E8%A1%A8) For the six months ended June 30, 2025, the Group's revenue grew significantly by 62.6% to HK$737.3 million, while the gross loss ratio improved to 2.6%; however, a substantial increase in valuation losses on investment properties led to wider pre-tax and period losses, with the loss attributable to equity holders increasing to HK$746.5 million Key Data from Consolidated Statement of Profit or Loss | Indicator | H1 2025 (HK$ thousands) | H1 2024 (HK$ thousands) | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | 737,293 | 453,529 | +62.6% | | Direct costs | (756,784) | (555,752) | +36.2% | | Gross loss | (19,491) | (102,223) | -80.9% | | Valuation loss on investment properties | (635,122) | (79,796) | +695.9% | | Other income | 58,236 | 56,437 | +3.2% | | Other net losses | (3,070) | (108,878) | -97.2% | | Selling and marketing expenses | (105,088) | (64,332) | +63.4% | | Administrative expenses | (102,410) | (95,118) | +7.7% | | Loss from operating activities | (806,945) | (396,973) | +103.3% | | Finance costs | (83,826) | (151,842) | -44.8% | | Loss before tax | (891,040) | (552,864) | +61.2% | | Income tax credit/(expense) | 140,730 | (7,716) | Turnaround to credit | | Loss for the period | (750,310) | (560,580) | +33.8% | | Loss attributable to equity holders and holders of perpetual convertible securities | (746,462) | (539,187) | +38.4% | | Basic loss per share (HK cents) | (48.8) | (35.3) | +38.2% | | Diluted loss per share (HK cents) | (48.8) | (35.3) | +38.2% | [Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=4&type=section&id=%E7%B6%9C%E5%90%88%E6%90%8D%E7%9B%8A%E5%8F%8A%E5%85%B6%E4%BB%96%E5%85%A8%E9%9D%A2%E6%94%B6%E7%9B%8A%E8%A1%A8) For the six months ended June 30, 2025, the Group's total comprehensive loss narrowed to HK$586.6 million from HK$716.6 million in the prior year period, mainly due to a turnaround from loss to gain on exchange differences arising from the translation of foreign subsidiaries' financial statements Key Data from Consolidated Statement of Profit or Loss and Other Comprehensive Income | Indicator | H1 2025 (HK$ thousands) | H1 2024 (HK$ thousands) | YoY Change | | :--- | :--- | :--- | :--- | | Loss for the period | (750,310) | (560,580) | +33.8% | | Exchange differences on translation of financial statements of foreign subsidiaries | 163,738 | (171,179) | Turnaround to gain | | Total comprehensive loss for the period | (586,572) | (716,626) | -18.1% | | Comprehensive loss attributable to equity holders and holders of perpetual convertible securities | (587,134) | (689,299) | -14.8% | [Consolidated Statement of Financial Position](index=5&type=section&id=%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81%E8%A1%A8) As of June 30, 2025, both the Group's total assets and total liabilities decreased, with notable reductions in the fair value of investment properties, inventories, and restricted deposits, while bank loans and other borrowings also declined significantly, though the net gearing ratio still rose Key Data from Consolidated Statement of Financial Position (as of period end) | Indicator | June 30, 2025 (HK$ thousands) | Dec 31, 2024 (HK$ thousands) | Change | | :--- | :--- | :--- | :--- | | **Non-current Assets** | | | | | Investment properties | 5,926,376 | 6,378,394 | -7.1% | | Financial assets at fair value through profit or loss | 1,190,504 | 1,155,250 | +3.0% | | **Current Assets** | | | | | Inventories and other contract costs | 4,714,934 | 5,077,341 | -7.1% | | Trade and other receivables | 1,876,729 | 1,723,556 | +8.9% | | Restricted and pledged deposits | 722,295 | 1,379,837 | -47.7% | | Cash and cash equivalents | 386,047 | 376,867 | +2.4% | | Investment properties classified as held for sale | – | 250,000 | -100% | | **Current Liabilities** | | | | | Trade and other payables | 2,669,962 | 2,694,931 | -0.9% | | Bank loans and other borrowings | 1,796,198 | 2,659,573 | -32.5% | | **Non-current Liabilities** | | | | | Bank loans and other borrowings | 3,881,362 | 3,820,770 | +1.6% | | Deferred tax liabilities | 910,553 | 1,030,268 | -11.7% | | **Net Assets** | 5,438,272 | 6,024,844 | -9.7% | | Total equity attributable to equity holders and holders of perpetual convertible securities | 5,481,602 | 6,068,736 | -9.6% | [Notes to the Financial Statements](index=7&type=section&id=%E9%99%84%20%E8%A8%BB) [Basis of Preparation and Going Concern](index=7&type=section&id=1%20%E7%B7%A8%E8%A3%BD%E5%9F%BA%E6%BA%96) This interim financial report is prepared in accordance with HKAS 34, but the Group faces material uncertainties regarding its going concern status due to net losses and current bank loans significantly exceeding cash reserves, prompting management to implement several mitigating measures [Material Uncertainty Related to Going Concern](index=7&type=section&id=%E8%88%87%E6%8C%81%E7%BA%8C%E7%B6%93%E7%87%9F%E6%9C%89%E9%97%9C%E7%9A%84%E9%87%8D%E5%A4%A7%E4%B8%8D%E7%A2%BA%E5%AE%9A%E6%80%A7) For the six months ended June 30, 2025, the Group's net loss of HK$750.3 million and current bank loans of HK$1,796.2 million far exceeding cash and cash equivalents of HK$386.0 million indicate the existence of a material uncertainty related to going concern - The Group's **net loss was HK$750,300,000**, while current bank loans and other borrowings stood at **HK$1,796,200,000**, against cash and cash equivalents of only **HK$386,000,000**, indicating significant liquidity pressure[12](index=12&type=chunk) - The deteriorating property market, tightening financing environment, and foreign exchange restrictions on remitting funds from Mainland China have exacerbated challenges in timely property realization, obtaining additional financing, renewing existing bank facilities, and meeting loan repayment obligations[12](index=12&type=chunk) [Management's Mitigating Measures and Uncertainties](index=8&type=section&id=%E7%AE%A1%E7%90%86%E5%B1%A4%E7%B7%A9%E8%A7%A3%E6%8E%AA%E6%96%BD%E5%8F%8A%E4%B8%8D%E7%A2%BA%E5%AE%9A%E6%80%A7) Management has implemented measures to alleviate liquidity pressure, including negotiating loan renewals, seeking buyers for assets, accelerating sales and collections, and controlling costs, though the success of these actions remains inherently uncertain - Successfully **extended the maturity date of a US$84,000,000 (approx. HK$658,000,000) shareholder loan** to November 26, 2025, and is actively negotiating the renewal of remaining borrowings[15](index=15&type=chunk) - The Group is identifying potential buyers for its properties and investments outside Mainland China and plans to accelerate pre-sales and sales of properties under development and completed properties to improve cash flow[15](index=15&type=chunk) - The adoption of the going concern basis is dependent on the successful implementation of the aforementioned plans and measures, the future outcomes of which are inherently uncertain[16](index=16&type=chunk) [Changes in Accounting Policies, Estimates and Judgements](index=9&type=section&id=2%20%E6%9C%83%E8%A8%88%E6%94%BF%E7%AD%96%E3%80%81%E4%BC%B0%E8%A8%88%E5%8F%8A%E5%88%A4%E6%96%B7%E8%AE%8A%E5%8B%95) The Group applied amendments to Hong Kong Financial Reporting Standards issued by the HKICPA during the period, which had no material impact on its financial performance or position, with management's key judgement being the assessment of the going concern assumption - The application of amendments to HKAS 21, *Lack of Exchangeability*, during the period did not have a material impact on the Group's performance and financial position[18](index=18&type=chunk) - In preparing the condensed consolidated interim financial statements, the directors have made judgements in their assessment of the going concern assumption[20](index=20&type=chunk)[21](index=21&type=chunk) [Revenue and Segment Reporting](index=10&type=section&id=3%20%E6%94%B6%E5%85%A5%E5%8F%8A%E5%88%86%E9%83%A8%E5%A0%B1%E5%91%8A) The Group's business is divided into four reportable segments: property development, property investment, property management and related services, and education-related services, with revenue primarily driven by property sales from Mainland China and Hong Kong [Disaggregation of Revenue](index=10&type=section&id=%E5%88%86%E9%A1%9E%E6%94%B6%E5%85%A5) For the six months ended June 30, 2025, total revenue was HK$737.3 million, dominated by property sales of HK$493.5 million, which grew 160.6% year-on-year, while rental, property management, and education services income saw minor declines Revenue by Major Product or Service Line and Customer's Geographical Location | Revenue Source | H1 2025 (HK$ thousands) | H1 2024 (HK$ thousands) | YoY Change | | :--- | :--- | :--- | :--- | | Sale of properties | 493,484 | 189,386 | +160.6% | | Property management and related services income | 120,156 | 130,802 | -8.2% | | Education-related services income | 18,272 | 18,940 | -3.5% | | **Total revenue from contracts with customers** | **631,912** | **339,128** | **+86.3%** | | Rental income | 105,381 | 114,401 | -7.9% | | **Total Revenue** | **737,293** | **453,529** | **+62.6%** | | **Customers by Geographical Location** | | | | | Mainland China | 492,456 | 302,923 | +62.6% | | Hong Kong | 244,837 | 150,606 | +62.6% | - Revenue from property sales is recognized when the customer can direct the use of and obtain substantially all the benefits from the property, while service income is recognized over time and rental income is recognized over the lease term[24](index=24&type=chunk) [Segment Profit or Loss, Assets and Liabilities](index=11&type=section&id=%E6%90%8D%E7%9B%8A%E3%80%81%E8%B3%87%E7%94%A2%E5%8F%8A%E8%B2%A0%E5%82%B5%E8%B3%87%E6%96%99) The property development segment's revenue grew substantially but still recorded a loss, while the property investment segment saw declines in both revenue and profit Revenue and (Loss)/Profit by Segment (Adjusted EBITDA) | Segment | H1 2025 Revenue (HK$ thousands) | H1 2024 Revenue (HK$ thousands) | H1 2025 (Loss)/Profit (HK$ thousands) | H1 2024 (Loss)/Profit (HK$ thousands) | | :--- | :--- | :--- | :--- | :--- | | Property development | 493,484 | 189,386 | (232,637) | (312,423) | | Property investment | 105,381 | 114,401 | 27,094 | 77,787 | | Property management and related services | 120,156 | 130,802 | (6,747) | (5,374) | | Education-related services | 18,272 | 18,940 | 6,687 | 5,045 | | **Total** | **737,293** | **453,529** | **(205,603)** | **(234,965)** | **Assets and Liabilities by Segment (as of period end)** | Segment | Assets as of June 30, 2025 (HK$ thousands) | Assets as of Dec 31, 2024 (HK$ thousands) | Liabilities as of June 30, 2025 (HK$ thousands) | Liabilities as of Dec 31, 2024 (HK$ thousands) | | :--- | :--- | :--- | :--- | :--- | | Property development | 6,502,870 | 7,527,234 | 5,669,747 | 8,334,989 | | Property investment | 7,457,291 | 8,187,899 | 2,072,794 | 254,694 | | Property management and related services | 357,431 | 411,700 | 393,546 | 353,930 | | Education-related services | 157,840 | 179,751 | 22,592 | 61,839 | | **Total** | **14,475,432** | **16,306,584** | **8,158,679** | **9,005,452** | - Reportable segment profit is measured by "Adjusted EBITDA" and adjusted for items that are non-recurring or not specifically attributable to individual segments[27](index=27&type=chunk) [Other Income](index=12&type=section&id=4%20%E5%85%B6%E4%BB%96%E6%94%B6%E5%85%A5) For the six months ended June 30, 2025, other income increased slightly by 3.2% to HK$58.2 million, mainly driven by an increase in other interest income Breakdown of Other Income | Income Source | H1 2025 (HK$ thousands) | H1 2024 (HK$ thousands) | YoY Change | | :--- | :--- | :--- | :--- | | Bank interest income | 12,474 | 15,444 | -19.3% | | Other interest income | 18,316 | 26,227 | -30.2% | | Interest income from financial assets at amortised cost | 30,790 | 41,671 | -26.1% | | Car park and apartment services income | 14,874 | 12,867 | +15.6% | | Others | 12,572 | 1,899 | +562.0% | | **Total** | **58,236** | **56,437** | **+3.2%** | [Other Net Losses](index=13&type=section&id=5%20%E5%85%B6%E4%BB%96%E8%99%A7%E6%90%8D%E6%B7%A8%E9%A1%8D) For the six months ended June 30, 2025, other net losses decreased significantly by 97.2% to HK$3.1 million, primarily due to the disposal of an associate in the prior period Breakdown of Other Net Losses | Item | H1 2025 (HK$ thousands) | H1 2024 (HK$ thousands) | YoY Change | | :--- | :--- | :--- | :--- | | Fair value (loss)/gain on financial assets at FVTPL | (4,191) | 981 | Loss widened | | Net foreign exchange gain/(loss) | 1,927 | (6,065) | Turnaround to gain | | Impairment loss on interest in an associate | – | (109,078) | Impairment disappeared | | Others | (806) | 5,284 | Loss widened | | **Total** | **(3,070)** | **(108,878)** | **-97.2%** | [Components of Loss Before Tax](index=13&type=section&id=6%20%E9%99%A4%E7%A8%85%E5%89%8D%E8%99%A7%E6%90%8D) Loss before tax was mainly affected by finance costs, staff costs, depreciation and amortization, cost of properties sold, write-down of inventories, and rental income from investment properties [Finance Costs](index=13&type=section&id=%E8%9E%8D%E8%B3%87%E6%88%90%E6%9C%AC) For the six months ended June 30, 2025, finance costs decreased significantly by 44.8% to HK$83.8 million, mainly due to the repayment of bank loans and lower interest rates Breakdown of Finance Costs | Item | H1 2025 (HK$ thousands) | H1 2024 (HK$ thousands) | YoY Change | | :--- | :--- | :--- | :--- | | Interest on bank loans and other borrowings | 154,044 | 233,958 | -34.2% | | Interest on lease liabilities | 1,036 | 961 | +7.8% | | Interest on amounts due to non-controlling interests | – | 1,399 | -100% | | Other borrowing costs | 638 | 5,783 | -89.0% | | Accreted interest on significant financing component of contract liabilities | 124 | 2,768 | -95.5% | | Less: Amount capitalised | (72,016) | (93,027) | -22.6% | | **Total** | **83,826** | **151,842** | **-44.8%** | [Staff Costs](index=13&type=section&id=%E5%93%A1%E5%B7%A5%E6%88%90%E6%9C%AC) For the six months ended June 30, 2025, staff costs decreased slightly to HK$89.2 million, primarily comprising salaries, wages, and other benefits, along with contributions to defined contribution retirement schemes Breakdown of Staff Costs | Item | H1 2025 (HK$ thousands) | H1 2024 (HK$ thousands) | YoY Change | | :--- | :--- | :--- | :--- | | Salaries, wages and other benefits | 84,421 | 90,756 | -7.0% | | Contributions to defined contribution retirement schemes | 4,785 | 4,842 | -1.2% | | **Total** | **89,206** | **95,598** | **-6.7%** | [Other Items](index=14&type=section&id=%E5%85%B6%E4%BB%96%E9%A0%85%E7%9B%AE) Other items include depreciation and amortization, cost of properties sold, write-down of inventories, and net rental income from investment properties, with a significant decrease in inventory write-downs and a notable increase in the cost of properties sold during the period Breakdown of Other Items | Item | H1 2025 (HK$ thousands) | H1 2024 (HK$ thousands) | YoY Change | | :--- | :--- | :--- | :--- | | Depreciation and amortisation | 6,374 | 7,883 | -19.2% | | Cost of properties sold | 464,377 | 157,811 | +194.3% | | Write-down of inventories | 83,495 | 259,655 | -67.9% | | Rental income from investment properties (net) | (96,512) | (102,249) | -5.6% | [Income Tax Credit/(Expense)](index=14&type=section&id=7%20%E6%89%80%E5%BE%97%E7%A8%85%E6%8A%B5%E5%85%8D%EF%B9%95%EF%BC%88%E9%96%8B%E6%94%AF%EF%BC%89) For the six months ended June 30, 2025, the Group recorded an income tax credit of HK$140.7 million, compared to an income tax expense of HK$7.7 million in the prior year period, mainly due to deferred tax arising from fair value losses on investment properties Breakdown of Income Tax Credit/(Expense) | Item | H1 2025 (HK$ thousands) | H1 2024 (HK$ thousands) | YoY Change | | :--- | :--- | :--- | :--- | | Current tax | 6,525 | 4,991 | +30.7% | | Deferred tax | (147,255) | 2,725 | Turnaround to credit | | **Total** | **(140,730)** | **7,716** | **Turnaround to credit** | - The income tax credit was primarily derived from deferred tax on fair value losses of investment properties[82](index=82&type=chunk) - The corporate income tax rate in Mainland China is 25%, while the profits tax rate in Hong Kong is 16.5%[32](index=32&type=chunk)[35](index=35&type=chunk) [Loss Per Share](index=15&type=section&id=8%20%E6%AF%8F%E8%82%A1%E8%99%A7%E6%90%8D) For the six months ended June 30, 2025, both basic and diluted loss per share were 48.8 HK cents, an increase from 35.3 HK cents in the prior year period, reflecting the widened loss attributable to equity holders [Basic Loss Per Share](index=15&type=section&id=%E6%AF%8F%E8%82%A1%E5%9F%BA%E6%9C%AC%E8%99%A7%E6%90%8D) Basic loss per share is calculated based on the loss attributable to equity holders and holders of perpetual convertible securities of HK$746.5 million and the weighted average number of 1,529.3 million shares in issue during the period Calculation of Basic Loss Per Share | Item | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Loss attributable to equity holders and holders of perpetual convertible securities (HK$ thousands) | (746,462) | (539,187) | | Weighted average number of shares (thousands) | 1,529,286 | 1,529,286 | | **Basic loss per share (HK cents)** | **(48.8)** | **(35.3)** | [Diluted Loss Per Share](index=15&type=section&id=%E6%AF%8F%E8%82%A1%E6%94%B2%E8%96%84%E8%99%A7%E6%90%8D) Diluted loss per share was the same as basic loss per share for both interim periods as there were no potential ordinary shares in issue - For the six months ended June 30, 2025 and 2024, diluted loss per share was the same as basic loss per share as there were no potential ordinary shares in issue[37](index=37&type=chunk) [Dividend](index=16&type=section&id=9%20%E8%82%A1%E6%81%AF) No interim dividend was declared for the six months ended June 30, 2025 and 2024 - No interim dividend was declared for the six months ended June 30, 2025 and 2024[39](index=39&type=chunk) [Financial Assets at Fair Value Through Profit or Loss](index=16&type=section&id=10%20%E6%8C%89%E5%85%AC%E5%85%81%E5%83%B9%E5%80%BC%E8%A8%88%E5%85%A5%E6%90%8D%E7%9B%8A%E8%A8%88%E9%87%8F%E7%9A%84%E9%87%91%E8%9E%8D%E8%B3%87%E7%94%A2) As of June 30, 2025, the total amount of financial assets at fair value through profit or loss increased slightly, primarily comprising amounts due from third parties classified as Level 3 financial instruments Financial Assets at Fair Value Through Profit or Loss | Item | June 30, 2025 (HK$ thousands) | Dec 31, 2024 (HK$ thousands) | | :--- | :--- | :--- | | **Non-current** | | | | Unlisted equity securities not held for trading | 39,193 | 36,611 | | Trading securities | 24,059 | 24,897 | | Amounts due from third parties | 1,127,252 | 1,093,742 | | **Total non-current** | **1,190,504** | **1,155,250** | | **Current** | | | | Unlisted equity securities not held for trading | 1,896 | 1,875 | | Wealth management products | 830 | 1,018 | | **Total current** | **2,726** | **2,893** | | **Total** | **1,193,230** | **1,158,143** | - Amounts due from third parties are classified as Level 3 financial instruments in the fair value hierarchy, with valuations relying on significant inputs and assumptions not available from market data[38](index=38&type=chunk) [Inventories and Other Contract Costs](index=17&type=section&id=11%20%E5%AD%98%E8%B2%A8%E5%8F%8A%E5%85%B6%E4%BB%96%E5%90%88%E7%B4%84%E6%88%90%E6%9C%AC) As of June 30, 2025, the Group's total inventories and other contract costs amounted to HK$4,714.9 million, a decrease from year-end 2024, with the amount of inventory write-down significantly reduced to HK$83.5 million during the period Breakdown of Inventories and Other Contract Costs | Item | June 30, 2025 (HK$ thousands) | Dec 31, 2024 (HK$ thousands) | | :--- | :--- | :--- | | Leasehold land held for development for sale | 145,636 | 145,636 | | Properties under development for sale | 2,786,430 | 2,707,927 | | Completed properties for sale | 1,775,548 | 2,216,776 | | Other contract costs | 265 | 265 | | Other businesses (low-value consumables and supplies) | 7,055 | 6,737 | | **Total** | **4,714,934** | **5,077,341** | - For the six months ended June 30, 2025, the amount of inventories written down to estimated net realisable value was **HK$83,495,000**, a significant decrease from HK$259,655,000 in the prior year period[41](index=41&type=chunk) - Certain of the Group's properties under development for sale and completed properties for sale have been pledged to secure bank loans and other borrowings[42](index=42&type=chunk) [Trade and Other Receivables](index=18&type=section&id=12%20%E8%B2%BF%E6%98%93%E5%8F%8A%E5%85%B6%E4%BB%96%E6%87%89%E6%94%B6%E6%AC%BE%E9%A0%85) As of June 30, 2025, total trade and other receivables amounted to HK$1,876.7 million, an increase from year-end 2024, primarily composed of other receivables (including loans to third parties and interest receivable) and deposits and prepayments Breakdown of Trade and Other Receivables | Item | June 30, 2025 (HK$ thousands) | Dec 31, 2024 (HK$ thousands) | | :--- | :--- | :--- | | Trade receivables (net of loss allowance) | 59,652 | 51,453 | | Other receivables (net of loss allowance) | 554,375 | 524,898 | | Financial assets at amortised cost | 614,027 | 576,351 | | Deposits and prepayments | 1,262,702 | 1,147,205 | | **Total** | **1,876,729** | **1,723,556** | Breakdown of Other Receivables (net of loss allowance) | Item | June 30, 2025 (HK$ thousands) | Dec 31, 2024 (HK$ thousands) | | :--- | :--- | :--- | | Loans to third parties | 295,383 | 297,395 | | Interest receivable on loans | 210,698 | 184,296 | | Others | 48,294 | 43,207 | | **Total** | **554,375** | **524,898** | - Loans to third parties and interest receivable on loans are secured, bear interest at annual rates of 8% to 15%, and are recoverable within one year[43](index=43&type=chunk) Breakdown of Deposits and Prepayments | Item | June 30, 2025 (HK$ thousands) | Dec 31, 2024 (HK$ thousands) | | :--- | :--- | :--- | | Prepayments for acquisition of land use rights | 748,624 | 726,955 | | Prepayments for acquisition of properties | 30,000 | 30,000 | | Prepayments for VAT and other taxes | 274,230 | 274,230 | | Others | 209,848 | 116,020 | | **Total** | **1,262,702** | **1,147,205** | [Trade and Other Payables](index=19&type=section&id=13%20%E8%B2%BF%E6%98%93%E5%8F%8A%E5%85%B6%E4%BB%96%E6%87%89%E4%BB%98%E6%AC%BE%E9%A0%85) As of June 30, 2025, total trade and other payables amounted to HK$2,669.9 million, a slight decrease from year-end 2024, with other payables and accruals and amounts due to non-controlling interests being the main components Breakdown of Trade and Other Payables | Item | June 30, 2025 (HK$ thousands) | Dec 31, 2024 (HK$ thousands) | | :--- | :--- | :--- | | Trade payables | 202,029 | 217,518 | | Other payables and accruals | 1,264,093 | 1,276,584 | | Amounts due to non-controlling interests | 1,054,247 | 1,054,247 | | Financial liabilities at amortised cost | 2,520,369 | 2,548,349 | | Rental and other deposits | 88,705 | 88,705 | | VAT and other tax payables | 60,888 | 57,877 | | **Total** | **2,669,962** | **2,694,931** | Ageing Analysis of Trade Payables (as of period end) | Ageing | June 30, 2025 (HK$ thousands) | Dec 31, 2024 (HK$ thousands) | | :--- | :--- | :--- | | Within 1 month | 64,200 | 67,965 | | Over 1 month but within 3 months | 43,144 | 45,273 | | Over 3 months but within 6 months | 41,034 | 44,160 | | Over 6 months but within 1 year | 31,561 | 37,595 | | Over 1 year | 22,090 | 22,525 | | **Total** | **202,029** | **217,518** | - Other payables and accruals include the estimated present value of future construction costs of resettlement properties to be compensated to residents, amounting to HK$1,035,121,000[47](index=47&type=chunk) - Of the amounts due to non-controlling interests, HK$60,599,000 is interest-bearing at 4.35% per annum, unsecured, and repayable on demand, while the remainder is unsecured, interest-free, and repayable on demand[47](index=47&type=chunk) [Commitments](index=20&type=section&id=14%20%E6%89%BF%E6%94%94) As of June 30, 2025, the Group had contracted capital commitments of HK$21.84 million, primarily related to development expenses for properties under development and project acquisition costs Capital Commitments | Item | June 30, 2025 (HK$ thousands) | Dec 31, 2024 (HK$ thousands) | | :--- | :--- | :--- | | Contracted for | 21,840 | 44,708 | | **Total** | **21,840** | **44,708** | - Capital commitments are mainly related to development expenses for the Group's properties under development and project acquisition costs[46](index=46&type=chunk) [Business Review](index=22&type=section&id=%E6%A5%AD%E5%8B%99%E5%9B%9E%E9%A1%A7) [Pre-sales Performance](index=22&type=section&id=%281%29%20%E9%A0%90%20%E5%94%AE) For the six months ended June 30, 2025, the Group's pre-sales value of properties and car parks increased by 8.4% year-on-year to HK$451.1 million, with pre-sold GFA growing by 141.1%, although the average selling price of pre-sold properties decreased by 54.8% Pre-sales Value of Properties and Car Parks | Indicator | H1 2025 | H1 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Pre-sales value of properties and car parks | HK$451,100,000 | HK$416,100,000 | +8.4% | | Pre-sales value of properties | HK$450,100,000 | - | - | | Pre-sold GFA | 9,162 sq.m. | 3,800 sq.m. | +141.1% | | Average selling price of pre-sold properties | 49,126.8 HK$/sq.m. | 108,763.2 HK$/sq.m. | -54.8% | | Pre-sales value of car parks | HK$1,000,000 | - | - | | Number of car parks sold | 13 units | - | - | Breakdown of Total Pre-sales (by City and Project) | City | Project and Project Type | Pre-sold GFA (sq.m.) | Pre-sales (HK$ million) | Average Pre-sale Price (HK$/sq.m.) | | :--- | :--- | :--- | :--- | :--- | | Shenzhen | Shenzhen Jianshang Business Building - Commercial | 3,886 | 106.8 | 27,483.3 | | Tianjin | Tianjin Top Spring Town - Residential | 747 | 8.3 | 11,111.1 | | Shenzhen | Shenzhen Water-Show Cloud-Top Garden - Residential | 3,036 | 123.2 | 40,579.7 | | Changzhou | Changzhou Top Spring Metropolis | 973 | 2.6 | 2,672.1 | | Hong Kong | Hong Kong 128 WATERLOO - Residential | 520 | 209.2 | 402,307.7 | | **Total Properties** | | **9,162** | **450.1** | **49,126.8** | | City | Project | Number of Pre-sold Car Parks (units) | Pre-sales (HK$ million) | Average Pre-sale Price (HK$/unit) | | :--- | :--- | :--- | :--- | :--- | | Changzhou | Changzhou Top Spring Metropolis | 1 | 0.2 | 200,000.0 | | Nanjing | Water-Show Sunshine - Nanjing | 12 | 0.8 | 66,666.7 | | **Total Car Parks** | | **13** | **1.0** | **76,923.1** | [Project Delivery and Recognition](index=23&type=section&id=%282%29%20%E6%88%AA%E8%87%B3%E4%BA%8C%E9%9B%B6%E4%BA%8C%E4%BA%94%E5%B9%B4%E5%85%AD%E6%9C%88%E4%B8%89%E5%8D%81%E6%97%A5%E6%AD%A2%E5%85%AD%E5%80%8B%E6%9C%88%E4%BA%A4%E4%BB%98%E5%8F%8A%E5%85%A5%E8%B3%AC%E7%9A%84%E9%A0%85%E7%9B%AE) For the six months ended June 30, 2025, the Group recognized property sales revenue of HK$492.7 million from projects in Shenzhen and Hong Kong, with a recognized saleable GFA of approximately 5,600 sq.m. and an average selling price of HK$87,982.1/sq.m., in addition to recognizing the sale of 7 car parks for HK$0.7 million Details of Recognized Property Sales | City | Project and Project Type | Recognized Saleable GFA (sq.m.) | Recognized Property Sales (HK$ million) | Recognized Average Selling Price (HK$/sq.m.) | | :--- | :--- | :--- | :--- | :--- | | Shenzhen | Shenzhen Water-Show Cloud-Top Garden - Residential | 4,745 | 187.3 | 39,473.1 | | Hong Kong | Hong Kong 128 WATERLOO - Residential | 855 | 305.4 | 357,193.0 | | **Total** | | **5,600** | **492.7** | **87,982.1** | Details of Recognized Car Park Sales | City | Project | Number of Recognized Car Parks (units) | Recognized Car Park Sales (HK$ million) | Recognized Average Selling Price (HK$/unit) | | :--- | :--- | :--- | :--- | :--- | | Nanjing | Water-Show Sunshine - Nanjing | 7 | 0.7 | 100,000.0 | [Investment Property Operations](index=24&type=section&id=%283%29%20%E6%8A%95%E8%B3%87%E7%89%A9%E6%A5%AD) As of June 30, 2025, the total fair value of the Group's investment properties was HK$5,926.4 million, accounting for approximately 39.3% of total assets, with a fair value loss of HK$635.1 million recorded during the period and a 7.9% year-on-year decrease in rental income, though the overall occupancy rate improved to 88.7% - As of June 30, 2025, the total fair value of investment properties was approximately **HK$5,926,400,000**, representing about **39.3% of the Group's total assets**[56](index=56&type=chunk) - For the six months ended June 30, 2025, a **fair value loss on investment properties of approximately HK$635,100,000** was recorded, a significant increase from the prior year period[56](index=56&type=chunk) Rental Income and Occupancy Rate of Investment Properties | Indicator | H1 2025 | H1 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Rental income | HK$105,400,000 | HK$114,400,000 | -7.9% | | Average monthly rental income | 64.8 HK$/sq.m. | 68.8 HK$/sq.m. | -5.8% | | Overall occupancy rate (as of June 30) | 88.7% | 82.5% | +6.2% | | Total leasable GFA (as of June 30) | 301,194 sq.m. | 307,246 sq.m. | -2.0% | - The GFA leased by renowned anchor tenants (occupying over 10.0% of the total leasable GFA of a single investment property) accounted for approximately **37.0% of the total leasable GFA** of the Group's operating investment properties[57](index=57&type=chunk) [Land Bank](index=25&type=section&id=%E5%9C%9F%E5%9C%B0%E5%84%B2%E5%82%99) As of June 30, 2025, the Group held 16 projects at various stages of development with a total estimated net saleable/leasable GFA of approximately 397,015 sq.m., primarily concentrated in the Greater Bay Area and first-tier cities in China such as Shenzhen, Shanghai, and Hong Kong - As of June 30, 2025, the Group had **16 projects** with a total estimated net saleable/leasable GFA of approximately **397,015 sq.m.**[62](index=62&type=chunk)[67](index=67&type=chunk) Composition of Land Bank (as of June 30, 2025) | Project Stage | Estimated Net Saleable/Leasable GFA (sq.m.) | | :--- | :--- | | Completed projects | 332,498 | | Projects under construction | 58,020 | | Projects contracted for purchase or with land use change applications in progress | 6,497 | | **Total** | **397,015** | - The Group's land bank strategy will primarily focus on the Greater Bay Area and first-tier cities in China, such as Shenzhen, Shanghai, and Hong Kong[67](index=67&type=chunk) [Property Management](index=28&type=section&id=%E7%89%A9%E6%A5%AD%E7%AE%A1%E7%90%86) As of June 30, 2025, the total GFA under the Group's management reached approximately 11.41 million sq.m., including about 0.70 million sq.m. of properties not developed by the Group and 0.20 million sq.m. of commercial property management projects - As of June 30, 2025, the total GFA under the Group's management had accumulated to approximately **11.407 million sq.m.**[66](index=66&type=chunk) - Of this, approximately **0.7046 million sq.m.** were properties not developed by the Group, and approximately **0.201 million sq.m.** were commercial property management projects[66](index=66&type=chunk) [Future Outlook](index=29&type=section&id=%E6%9C%AA%E4%BE%86%E5%B1%95%E6%9C%9B) The Group will focus on development opportunities in the Guangdong-Hong Kong-Macao Greater Bay Area and core urban areas, stabilize and moderately expand its rental property portfolio, actively pursue investment opportunities in Hong Kong and overseas, and identify potential investments to foster new business growth [Focus on the Greater Bay Area and Core Cities](index=29&type=section&id=%E5%A0%85%E5%AE%9A%E9%8D%9A%E5%AE%9A%E5%A4%A7%E7%81%A3%E5%8D%80%E5%8F%8A%E6%A0%B8%E5%BF%83%E5%9F%8E%E5%B8%82%E6%A0%B8%E5%BF%83%E5%8D%80%E5%9F%9F%E7%9A%84%E7%99%BC%E5%B1%95%E5%A5%91%E6%A9%9F) The Group will align with the Greater Bay Area's strategic plan, focusing on core cities like Shenzhen and Guangzhou to advance existing projects and explore new opportunities, leveraging the region's integrated industrial chains and infrastructure to drive property market growth - The Group will closely follow the strategic plan for the Greater Bay Area, focusing on core cities such as Shenzhen and Guangzhou to advance the development and delivery of existing projects[68](index=68&type=chunk) - The synergistic effects of the Greater Bay Area are expected to provide long-term growth momentum for the real estate market[68](index=68&type=chunk) [Stabilize the Rental Property Portfolio](index=29&type=section&id=%E7%A9%A9%E5%9B%BA%E4%B8%A6%E9%81%A9%E5%BA%A6%E6%93%B4%E5%A2%9E%E7%A9%A9%E5%AE%9A%E6%94%B6%E7%9B%8A%E4%B9%8B%E7%A7%9F%E8%B3%83%E7%89%A9%E6%A5%AD%E7%B5%84%E5%90%88) The Group is committed to holding and optimizing high-quality commercial and office properties through effective asset management to achieve asset preservation and appreciation, leveraging their counter-cyclical nature to generate stable rental income and cash flow - The counter-cyclical nature of commercial and office properties will continue to provide the Group with stable rental income, forming a crucial component of its robust cash flow[69](index=69&type=chunk) - The Group is dedicated to holding and optimizing high-quality property assets through strong asset management capabilities to achieve asset preservation and appreciation[69](index=69&type=chunk) [Hong Kong and Overseas Investment Opportunities](index=29&type=section&id=%E7%9D%80%20%E7%9C%BC%20%E9%A6%99%20%E6%B8%AF%EF%BC%8C%E7%A9%8D%20%E6%A5%B5%20%E6%8D%95%20%E6%8D%89%20%E6%B5%B7%20%E5%A4%96%20%E6%8A%95%20%E8%B3%87%20%E6%A9%9F%20%E9%81%87) Confident in Hong Kong's role as a core engine in the Greater Bay Area and the potential of the Northern Metropolis, the Group will continue to seek investment opportunities in Hong Kong, leveraging its expertise in developing high-end boutique properties to expand its presence - The Group is confident in Hong Kong's core engine status within the Greater Bay Area and the development potential of the Northern Metropolis[70](index=70&type=chunk) - The Group will continue to focus on investment opportunities in Hong Kong, leveraging its strengths in creating high-end boutique properties to deepen its market presence and expand into quality projects when appropriate[70](index=70&type=chunk) [Cultivate New Business Growth Points](index=29&type=section&id=%E6%B4%9E%20%E5%AF%9F%20%E6%BD%9B%20%E5%9C%A8%20%E6%8A%95%20%E8%B3%87%20%E6%A9%9F%20%E6%9C%83%EF%BC%8C%E5%9F%B9%20%E8%82%B2%20%E6%96%B0%20%E6%A5%AD%20%E5%8B%99%20%E5%A2%9E%20%E9%95%B7%20%E9%BB%9E) The Group will monitor market dynamics and industry trends related to the new economy, integrating resources and making prudent investments to capture business breakthroughs and growth points that create synergy with its real estate operations - The Group will continue to monitor market dynamics and industry trends, focusing on opportunities in the new economy and making prudent investments by integrating resources based on its development needs[71](index=71&type=chunk) - The goal is to capture business breakthroughs and growth points, promoting synergistic development between diversified businesses and real estate to drive the Group's prosperity and growth[71](index=71&type=chunk) [Management Discussion and Analysis](index=30&type=section&id=%E7%AE%A1%E7%90%86%E5%B1%A4%E8%A8%8E%E8%AB%96%E5%8F%8A%E5%88%86%E6%9E%90) [Revenue](index=30&type=section&id=%E6%94%B6%20%E5%85%A5) For the six months ended June 30, 2025, total revenue increased by 62.6% year-on-year to HK$737.3 million, driven by a 160.6% increase in property sales revenue to HK$493.4 million, which accounted for 66.9% of total revenue - **Total revenue increased by 62.6%** from HK$453,500,000 in the same period of 2024 to **HK$737,300,000** in H1 2025[73](index=73&type=chunk) - **Property sales revenue of approximately HK$493,400,000**, accounting for about **66.9% of total revenue**, was the main driver of revenue growth[73](index=73&type=chunk) - Rental income and revenue from property management and related services **decreased by approximately 7.9%** year-on-year, mainly due to a reduction in rental rates[73](index=73&type=chunk) [Direct Costs](index=31&type=section&id=%E7%9B%B4%E6%8E%A5%E6%88%90%E6%9C%AC) For the six months ended June 30, 2025, direct costs increased by 36.2% year-on-year to HK$756.8 million, primarily due to the increase in property sales - Direct costs increased from HK$555,800,000 in the same period of 2024 to **HK$756,800,000** in H1 2025, mainly due to the increase in property sales[74](index=74&type=chunk) - Direct costs primarily include the cost of completed properties sold, land grant premiums, construction and other development costs, capitalized borrowing costs, costs of rental income, and costs of property management and education-related services[74](index=74&type=chunk) [Gross Loss](index=31&type=section&id=%E6%AF%9B%20%E6%90%8D) For the six months ended June 30, 2025, the Group's gross loss narrowed significantly to HK$19.5 million, with the gross loss ratio improving to 2.6%, mainly due to increased property sales - **Gross loss narrowed** from HK$102,200,000 in the same period of 2024 to **HK$19,500,000** in H1 2025[75](index=75&type=chunk) - The **gross loss ratio improved** from 22.5% in the same period of 2024 to **2.6%** in H1 2025, mainly due to the increase in property sales[75](index=75&type=chunk) [Other Income](index=31&type=section&id=%E5%85%B6%E4%BB%96%E6%94%B6%E5%85%A5) For the six months ended June 30, 2025, other income increased slightly by 3.2% to HK$58.2 million, primarily due to an increase in other interest income - Other income increased by 3.2% from HK$56,400,000 in the same period of 2024 to **HK$58,200,000** in H1 2025, mainly due to an increase in other interest income[76](index=76&type=chunk) [Other Net Losses](index=31&type=section&id=%E5%85%B6%E4%BB%96%E8%99%A7%E6%90%8D%E6%B7%A8%E9%A1%8D) For the six months ended June 30, 2025, other net losses decreased significantly by 97.2% to HK$3.1 million, primarily due to the disposal of an associate in the prior period - Other net losses **decreased significantly by 97.2%** from HK$108,900,000 in the same period of 2024 to **HK$3,100,000** in H1 2025, mainly due to the disposal of an associate in the prior period[77](index=77&type=chunk) [Selling and Marketing Expenses](index=32&type=section&id=%E9%8A%B7%E5%94%AE%E5%8F%8A%E7%87%9F%E9%8A%B7%E9%96%8B%E6%94%AF) For the six months ended June 30, 2025, selling and marketing expenses increased by 63.4% year-on-year to HK$105.1 million, primarily due to an increase in commission expenses - Selling and marketing expenses increased by 63.4% from HK$64,300,000 in the same period of 2024 to **HK$105,100,000** in H1 2025, mainly due to an increase in commission expenses[78](index=78&type=chunk) [Administrative Expenses](index=32&type=section&id=%E8%A1%8C%E6%94%BF%E9%96%8B%E6%94%AF) For the six months ended June 30, 2025, administrative expenses increased by 7.7% year-on-year to HK$102.4 million, primarily due to an increase in legal and professional fees - Administrative expenses increased by 7.7% from HK$95,100,000 in the same period of 2024 to **HK$102,400,000** in H1 2025, mainly due to an increase in legal and professional fees[79](index=79&type=chunk) [Valuation Loss on Investment Properties](index=32&type=section&id=%E6%8A%95%E8%B3%87%E7%89%A9%E6%A5%AD%E7%9A%84%E4%BC%B0%E5%80%BC%E8%99%A7%E6%90%8D) For the six months ended June 30, 2025, the valuation loss on investment properties increased significantly to HK$635.1 million, primarily due to the decline in property rental rates in China in 2025 - The **valuation loss on investment properties was approximately HK$635,100,000**, a significant increase from HK$79,800,000 in the same period of 2024, mainly due to the decline in property rental rates in China in 2025[80](index=80&type=chunk) [Finance Costs](index=32&type=section&id=%E8%9E%8D%E8%B3%87%E6%88%90%E6%9C%AC) For the six months ended June 30, 2025, finance costs decreased by 44.8% year-on-year to HK$83.8 million, primarily due to the repayment of bank loans and lower interest rates - Finance costs **decreased by 44.8%** from HK$151,800,000 in the same period of 2024 to **HK$83,800,000** in H1 2025, mainly due to the repayment of bank loans and lower interest rates[81](index=81&type=chunk) [Income Tax Credit/(Expense)](index=32&type=section&id=%E6%89%80%20%E5%BE%97%20%E7%A8%85%20%E6%8A%B5%20%E5%85%8D%EF%B9%95%EF%BC%88%E9%96%8B%20%E6%94%AF%EF%BC%89) For the six months ended June 30, 2025, the Group recorded an income tax credit of HK$140.7 million, compared to an income tax expense of HK$7.7 million in the prior year period, mainly due to deferred tax on fair value losses of investment properties - An **income tax credit of approximately HK$140,700,000** was recorded, compared to an income tax expense of approximately HK$7,700,000 in the same period of 2024, mainly due to deferred tax on fair value losses of investment properties[82](index=82&type=chunk) [Non-controlling Interests](index=32&type=section&id=%E9%9D%9E%E6%8E%A7%E8%82%A1%E6%AC%8A%E7%9B%8A) For the six months ended June 30, 2025, the loss attributable to non-controlling interests was HK$3.8 million, a significant decrease from HK$21.4 million in the prior year period - The loss attributable to non-controlling interests was approximately **HK$3,800,000**, compared to approximately HK$21,400,000 in the same period of 2024[83](index=83&type=chunk) [Liquidity, Financial and Capital Resources](index=33&type=section&id=%E6%B5%81%20%E5%8B%95%20%E8%B3%87%20%E9%87%91%E3%80%81%E8%B2%A1%20%E5%8B%99%20%E5%8F%8A%20%E8%B3%87%20%E9%87%91%20%E8%B3%87%20%E6%BA%90) [Cash Position](index=33&type=section&id=%E7%8F%BE%E9%87%91%E7%8B%80%E6%B3%81) As of June 30, 2025, the carrying amount of the Group's cash and bank deposits was approximately HK$1,108.3 million, a decrease of 36.9% from year-end 2024 - As of June 30, 2025, the carrying amount of cash and bank deposits was approximately **HK$1,108,300,000**, a decrease of **36.9%** from December 31, 2024[84](index=84&type=chunk) [Borrowings and Pledge of Group's Assets](index=33&type=section&id=%E5%80%9F%E8%B2%B8%E5%8F%8A%E6%9C%AC%E9%9B%86%E5%9C%98%E8%B3%87%E7%94%A2%E7%9A%84%E6%8A%B5%E6%8A%BC) As of June 30, 2025, the Group's total borrowings amounted to approximately HK$6,514.9 million, of which about HK$2,633.6 million is repayable within one year, with bank loans of approximately HK$5.0 billion secured by assets with a total carrying value of about HK$9,211.7 million - As of June 30, 2025, the Group's **total borrowings were approximately HK$6,514,900,000**, of which about **HK$2,633,600,000** is repayable within one year[85](index=85&type=chunk) - Bank loans of approximately **HK$5,000,000,000** were secured by certain of the Group's investment properties, property, plant and equipment, leasehold land held for development for sale, properties under development for sale, completed properties for sale, pledged deposits, and rental receivables with a total carrying value of approximately **HK$9,211,700,000**[85](index=85&type=chunk) - The majority of bank loans and other borrowings are denominated in RMB, with some denominated in HKD and USD[86](index=86&type=chunk) [Borrowing Costs](index=33&type=section&id=%E5%80%9F%E8%B2%B8%E6%88%90%E6%9C%AC) For the six months ended June 30, 2025, the Group's annualized average borrowing cost was approximately 6.1%, a decrease from 6.7% in the same period last year - For the six months ended June 30, 2025, the Group's annualized average borrowing cost was approximately **6.1%**, a decrease from **6.7%** in the same period of 2024[87](index=87&type=chunk) [Net Gearing Ratio](index=34&type=section&id=%E6%B7%A8%E8%B2%A0%E5%82%B5%E6%AF%94%E7%8E%87) As of June 30, 2025, the Group's net gearing ratio was approximately 84.7%, an increase from 80.0% at year-end 2024, primarily due to fair value losses on investment properties and impairment losses on certain inventories - As of June 30, 2025, the Group's **net gearing ratio was approximately 84.7%**, an increase from **80.0%** as of December 31, 2024[88](index=88&type=chunk) - The increase in the net gearing ratio was mainly due to fair value losses on investment properties and impairment losses on certain inventories[88](index=88&type=chunk) [Foreign Exchange Risk](index=34&type=section&id=%E5%A4%96%E5%8C%AF%E9%A2%A8%E9%9A%AA) The Group faces foreign exchange risk from RMB against other currencies as most operations are in China and denominated in RMB, while some expenses and borrowings are settled in HKD, USD, or AUD, with no current hedging policy in place - The Group faces foreign exchange risk arising from RMB against HKD, USD, or AUD, as most of its operations are in China with transactions denominated in RMB, while some expenses and borrowings are settled in other currencies[89](index=89&type=chunk) - The Renminbi is not freely convertible into foreign currencies and is subject to foreign exchange control regulations by the PRC government[89](index=89&type=chunk) - The Group currently does not have a foreign currency hedging policy, but the Board closely monitors the situation and may consider adopting one in the future[89](index=89&type=chunk) [Net Asset Value Per Share](index=35&type=section&id=%E6%AF%8F%E8%82%A1%E8%B3%87%E7%94%A2%E6%B7%A8%E5%80%BC) As of June 30, 2025, the net asset value per share attributable to equity holders and holders of perpetual convertible securities was approximately HK$3.6, a decrease from HK$4.0 at year-end 2024 Calculation of Net Asset Value Per Share | Item | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Net assets attributable to equity holders and holders of perpetual convertible securities (HK$ thousands) | 5,481,601 | 6,068,736 | | Number of shares used for NAV per share calculation (thousands) | 1,529,286 | 1,529,286 | | **Net asset value per share (HK$)** | **3.6** | **4.0** | [Contingent Liabilities](index=35&type=section&id=%E6%88%96%E7%84%B6%E8%B2%A0%E5%82%B5) As of June 30, 2025, the Group's main contingent liability was providing guarantees of approximately HK$163.6 million for mortgage loans to property buyers, which may require the Group to repurchase the property or cover any shortfall if a buyer defaults - As of June 30, 2025, the Group provided guarantees of approximately **HK$163,600,000** for mortgage loans to property buyers[91](index=91&type=chunk) - The guarantee liability continues until the completion of the relevant properties and the delivery of the real estate ownership certificates to the buyers[91](index=91&type=chunk) - If a buyer defaults on a mortgage loan, the Group may be required to repurchase the relevant property by settling the mortgage or cover the shortfall after the mortgage bank auctions the property[91](index=91&type=chunk) [Other Important Matters](index=36&type=section&id=%E5%85%B6%E4%BB%96%E9%87%8D%E8%A6%81%E4%BA%8B%E9%A0%85) [Material Acquisitions and Disposals](index=36&type=section&id=%E9%99%84%E5%B1%AC%E5%85%AC%E5%8F%B8%E3%80%81%E8%81%AF%E7%87%9F%E5%85%AC%E5%8F%B8%E5%8F%8A%E5%90%88%E8%B3%87%E4%BC%81%E6%A5%AD%E4%B9%8B%E9%87%8D%E5%A4%A7%E6%94%B6%E8%B3%BC%E5%8F%8A%E5%87%BA%E5%94%AE%E4%BA%8B%E9%A0%85) From January 1, 2025, to the date of this announcement, the Group had no material acquisitions or disposals of subsidiaries, associates, or joint ventures, but completed the sale of an investment property at 6 Rutland Quadrant, Kowloon, Hong Kong for HK$250 million on March 28, 2025 - From January 1, 2025, to the date of this announcement, the Group had no material acquisitions or disposals of subsidiaries, associates, or joint ventures[92](index=92&type=chunk) - The Group completed the disposal of the property at 6 Rutland Quadrant, Kowloon, Hong Kong, for a consideration of **HK$250,000,000** on March 28, 2025[93](index=93&type=chunk) [Employees and Remuneration Policy](index=36&type=section&id=%E5%83%B1%E5%93%A1%E5%8F%8A%E8%96%AA%E9%85%AC%E6%94%BF%E7%AD%96) As of June 30, 2025, the Group employed 718 employees, a decrease from the prior year period, with total staff costs of HK$89.2 million, and remuneration determined based on performance, experience, and market rates - As of June 30, 2025, the Group employed **718 employees**, a decrease from 812 in the same period of 2024[94](index=94&type=chunk) - For the six months ended June 30, 2025, total staff costs were approximately **HK$89,200,000**[94](index=94&type=chunk) - Remuneration is determined based on performance, work experience, skills, knowledge, and prevailing market wage levels, and is paid in the form of basic salary, cash bonuses, and equity-settled shares[94](index=94&type=chunk) - As of June 30, 2025, and the date of this announcement, the Company had not granted any share options under its share option scheme[95](index=95&type=chunk) [Post-Reporting Period Events and Dividend](index=37&type=section&id=%E5%A0%B1%E5%91%8A%E6%9C%9F%E5%BE%8C%E4%BA%8B%E9%A0%85%E5%8F%8A%E8%82%A1%E6%81%AF) No significant events occurred from the end of the reporting period to the date of this announcement, and the Board has resolved not to declare an interim dividend for the six months ended June 30, 2025 - No significant events occurred from the end of the reporting period to the date of this announcement[96](index=96&type=chunk) - The Board has resolved not to declare an interim dividend for the six months ended June 30, 2025[97](index=97&type=chunk) - For the six months ended June 30, 2025, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[98](index=98&type=chunk) [Corporate Governance](index=37&type=section&id=%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB%E5%B8%B8%E8%A6%8F) The Group has applied the principles and code provisions of the Corporate Governance Code during the reporting period, with the roles of Chairman and Chief Executive Officer held by the same individual, a deviation from code provision C.2.1 that the Board believes ensures consistent leadership and efficiency - The Company has applied the principles and code provisions of the Corporate Governance Code as set out in Appendix C1 to the Listing Rules[99](index=99&type=chunk) - The roles of Chairman and Chief Executive Officer are both held by Mr. Wong Chun Hong, a deviation from code provision C.2.1, which the Board believes ensures consistent leadership and improves planning and implementation efficiency[99](index=99&type=chunk) - The Board is composed of experienced and high-caliber individuals, with more than half of its members being non-executive or independent non-executive directors to ensure a balance of power and authority[99](index=99&type=chunk) - All directors have confirmed their compliance with the Model Code for Securities Transactions by Directors as set out in Appendix C3 to the Listing Rules for the six months ended June 30, 2025[101](index=101&type=chunk) [Audit Committee Review](index=38&type=section&id=%E5%AF%A9%E6%A0%B8%E5%A7%94%E5%93%A1%E6%9C%83%E5%AF%A9%E9%96%B1%E4%B8%AD%E6%9C%9F%E6%A5%AD%E7%B8%BE) The Company's Audit Committee has reviewed the Group's interim results for the six months ended June 30, 2025, which are unaudited but have been reviewed by the auditor in accordance with HKSRE 2410, resulting in an unmodified conclusion - The Company's Audit Committee has reviewed the Group's interim results for the six months ended June 30, 2025[102](index=102&type=chunk) - The interim financial report is unaudited but has been reviewed by the auditor, BDO Limited, in accordance with Hong Kong Standard on Review Engagements 2410, and an unmodified conclusion has been issued[103](index=103&type=chunk) - The scope of a review is substantially less than that of an audit, so there is no assurance that all significant matters would be identified; investors are advised to exercise caution when dealing in the Company's securities[103](index=103&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，並明確表示概不對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。 （以存續方式於開曼群島註冊成立的有限公司） （股份代號：2460） 截至2025年6月30日止六個月 中期業績公告 | 財務摘要 | | | | | --- | --- | --- | --- | | | | 截至6月30日止六個月 | | | | | 2025年 | 2024年 | | （人民幣千元） 收入 | | 6,205,594 | 7,616,023 | | 本公司擁有人應佔期內利潤 （人民幣千元） | | 805,098 | 1,128,104 | | 每股基本收益 | （人民幣元） | 0.34 | 0.56 | | 每股中期股息 （人民幣元） | | 0.118 | – | 1 董事會欣然宣佈本集團截至2025年6月30日止六個月之未經審核綜合業績： 合併損益及其他綜合收益表 截至2025年6月30日止六個月－未經審核 截至6月30日止六個月 | | | 2025年 | 2024年 | | ...

[Company Information](index=3&type=section&id=Company%20Information) Details the company's board of directors, established committees, and registered office location with its stock code - Board members include Executive Directors Lam Sam Ming (Chairman), Yiu Yuen, Chan Sau Po, Hui Yuk Ling, Luk Wai, and Independent Non-executive Directors Cheung Yin, Wong Hei Chiu, Leung Ka Chun[7](index=7&type=chunk) - The company has established Audit, Remuneration, Nomination, and Risk Management Committees, each with a defined chairman and members[7](index=7&type=chunk) - The registered office, Hong Kong head office, and principal place of business are located at 3/F, Yip Cheong Centre, 10 Fung Yip Street, Chai Wan, Hong Kong, with stock code 8385[7](index=7&type=chunk)[8](index=8&type=chunk) [Executive Summary](index=4&type=section&id=Executive%20Summary) Provides a comparative overview of key financial indicators for the current and prior periods, highlighting significant changes Comparison of Key Financial Indicators for Current and Prior Periods | Indicator | Current Period (HK$ Thousand) | Prior Period (HK$ Thousand) | Change (%) | Primary Reason | | :--- | :--- | :--- | :--- | :--- | | Revenue | 1,200 | 43,500 | -97.2% | Shenzhen factory closure and delayed printing license for Huizhou factory | | Gross (Loss)/Profit | (51) | 3,700 | -101.4% | Decrease in sales orders | | Loss for the period | (26,400) | (29,500) | -10.5% | Decrease in administrative expenses | | Interim Dividend | Not recommended | Nil | N/A | N/A | [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=5&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) Presents the group's financial performance, including revenue, expenses, and total comprehensive expense for the six months ended June 30 Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (For the six months ended 30 June) | Indicator | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Revenue | 1,232 | 43,495 | | Cost of sales | (1,283) | (39,753) | | Gross (Loss)/Profit | (51) | 3,742 | | Other income | 127 | 1,354 | | Distribution costs | (304) | (4,414) | | Administrative expenses | (14,537) | (27,031) | | Operating loss | (14,765) | (26,349) | | Finance costs | (11,630) | (3,039) | | Loss before tax | (26,395) | (29,388) | | Income tax | – | (76) | | Loss for the period | (26,395) | (29,464) | | Exchange differences on translation of overseas operations | (26,361) | 4,147 | | Total comprehensive expense for the period | (52,756) | (25,317) | | Basic and diluted loss per share (HK cents) | (28.72) | (35.65) | [Condensed Consolidated Statement of Financial Position](index=6&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) Outlines the group's assets, equity, and liabilities as of June 30, reflecting its financial health at the period end Condensed Consolidated Statement of Financial Position (As at 30 June) | Indicator | 30 June 2025 (HK$ Thousand) | 31 December 2024 (HK$ Thousand) | | :--- | :--- | :--- | | **ASSETS** | | | | Non-current assets | 82,005 | 137,302 | | Current assets | 18,489 | 21,137 | | **TOTAL ASSETS** | **100,494** | **158,439** | | **EQUITY** | | | | Share capital | 108,490 | 108,490 | | Deficit | (170,396) | (117,640) | | **TOTAL EQUITY** | **(61,906)** | **(9,150)** | | **LIABILITIES** | | | | Non-current liabilities | 12,239 | 12,239 | | Current liabilities | 150,161 | 155,350 | | **TOTAL LIABILITIES** | **162,400** | **167,589** | | **TOTAL EQUITY AND LIABILITIES** | **100,494** | **158,439** | [Condensed Consolidated Statement of Changes in Equity](index=8&type=section&id=Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) Details the movements in the group's equity components, including share capital, reserves, and accumulated losses, for the six months ended June 30 Condensed Consolidated Statement of Changes in Equity (For the six months ended 30 June) | Item | Share Capital (HK$ Thousand) | Exchange Reserve (HK$ Thousand) | Statutory Surplus Reserve (HK$ Thousand) | Capital Reserve (HK$ Thousand) | Accumulated Losses (HK$ Thousand) | Total Equity (HK$ Thousand) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Balance at 1 January 2024 | 106,319 | (17,795) | 5,125 | 3,318 | (62,706) | 34,261 | | Changes in equity for the six months ended 30 June 2024: | | | | | | | | Loss for the period | – | – | – | – | (29,464) | (29,464) | | Other comprehensive expense for the period | – | 4,147 | – | – | – | 4,147 | | Balance at 30 June 2024 | 106,319 | (13,648) | 5,125 | 3,318 | (92,170) | 8,944 | | Balance at 1 January 2025 | 108,490 | (17,770) | 5,125 | 3,318 | (108,313) | (9,150) | | Changes in equity for the six months ended 30 June 2025: | | | | | | | | Loss for the period | – | – | – | – | (26,395) | (26,395) | | Other comprehensive expense for the period | – | (26,361) | – | – | – | (26,361) | | Balance at 30 June 2025 | 108,490 | (44,131) | 5,125 | 3,318 | (134,708) | (61,906) | [Condensed Consolidated Cash Flow Statement](index=9&type=section&id=Condensed%20Consolidated%20Cash%20Flow%20Statement) Presents the cash flows from operating, investing, and financing activities, and the net change in cash and cash equivalents for the six months ended June 30 Condensed Consolidated Cash Flow Statement (For the six months ended 30 June) | Item | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Net cash used in operating activities | (3,086) | (1,874) | | Net cash from investing activities | 1,105 | 385 | | Net cash from/(used in) financing activities | 453 | (251) | | Net decrease in cash and cash equivalents | (1,528) | (1,740) | | Cash and cash equivalents at 1 January | (10,669) | (8,909) | | Cash and cash equivalents at 30 June | (12,197) | (10,649) | | Bank balances and cash | 19 | 644 | | Less: Bank overdrafts | (12,216) | (11,293) | | Cash and cash equivalents as shown in the condensed consolidated cash flow statement | (12,197) | (10,649) | [Notes to the Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) Provides detailed explanations and disclosures supporting the condensed consolidated financial statements, covering accounting policies and specific financial items [1. General Information](index=10&type=section&id=1.%20General%20Information) Wan Li Printing Company Limited was incorporated in Hong Kong in 1992, listed on GEM in 2017, and primarily engages in the production and trading of books and paper products - The company was incorporated in Hong Kong on 23 December 1992 and listed on GEM of The Stock Exchange of Hong Kong Limited on 13 December 2017[15](index=15&type=chunk) - The Group is principally engaged in the production and trading of books and paper products[17](index=17&type=chunk) [2. Basis of Preparation](index=10&type=section&id=2.%20Basis%20of%20Preparation) This interim financial report is prepared according to GEM Listing Rules and HKAS 34, unaudited but reviewed by the Audit Committee; the company faces significant going concern uncertainties, but the Board has implemented measures to improve its financial position - This interim financial report is prepared in accordance with the applicable disclosure provisions of the GEM Listing Rules and has been reviewed by the Audit Committee[18](index=18&type=chunk)[19](index=19&type=chunk) - For the six months ended 30 June 2025, the Group recorded a loss of approximately **HK$26,395,000** and had net current liabilities of approximately **HK$131,672,000**, indicating a material uncertainty about its ability to continue as a going concern[20](index=20&type=chunk) - To improve its financial position, the Board has taken several measures, including exploring new revenue streams, implementing cost controls, negotiating renewal of banking facilities, disposing of properties, obtaining financial support from the controlling shareholder, securing new bank loans, and reviewing the capital structure[21](index=21&type=chunk)[23](index=23&type=chunk) [3. Changes in Accounting Policies](index=11&type=section&id=3.%20Changes%20in%20Accounting%20Policies) Revisions to Hong Kong Financial Reporting Standards effective this period have not materially impacted the Group's financial results or position - Revisions to Hong Kong Financial Reporting Standards issued by the Hong Kong Institute of Certified Public Accountants, effective for the current accounting period, have no material impact on the preparation or presentation of the Group's results and financial position for the current or prior periods[22](index=22&type=chunk) [4. Revenue and Segment Reporting](index=12&type=section&id=4.%20Revenue%20and%20Segment%20Reporting) The Group's revenue primarily from books and paper products significantly decreased by 97.2% to HK$1.232 million, recognized at a point in time and mainly from Hong Kong Revenue Classification (For the six months ended 30 June) | Revenue Source | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Sale of books and paper products | 1,232 | 41,013 | | Provision of subcontracting services for books and paper products | – | 2,482 | | **Total Revenue** | **1,232** | **43,495** | | Revenue recognized at a point in time | 1,232 | 43,495 | Revenue from Contracts with Customers by Geographical Location (For the six months ended 30 June) | Region | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Hong Kong | 1,051 | 23,782 | | Mainland China | – | 2,482 | | United States | 181 | 16,920 | | United Kingdom | – | 311 | | **Total** | **1,232** | **43,495** | - The chief operating decision maker has determined that the Group has only one operating segment, which is the production of books and paper products[25](index=25&type=chunk) [5. Other Income](index=14&type=section&id=5.%20Other%20Income) Other income significantly decreased by 90.6% to HK$127,000 this period, mainly due to the absence of one-off income from scrap sales, asset disposals, government grants, and rental income recognized in the prior period Other Income (For the six months ended 30 June) | Item | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Bank interest income | – | 39 | | Profit on disposal of scrap materials | – | 431 | | Government grants - PRC government subsidies | – | 176 | | Gain on disposal of property, plant and machinery and equipment | – | 346 | | Net exchange gain/(loss) | 1 | (32) | | Rental income | – | 274 | | Miscellaneous income | 126 | 120 | | **Total** | **127** | **1,354** | [6. Income Tax](index=14&type=section&id=6.%20Income%20Tax) Income tax for the current period is nil, compared to HK$76,000 in the prior period, with Hong Kong profits tax applying a two-tiered system, Chinese subsidiaries taxed at 25%, and BVI subsidiaries exempt Income Tax (For the six months ended 30 June) | Item | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Current tax - Hong Kong profits tax | – | 76 | | Current tax - PRC enterprise income tax | – | – | | Deferred tax | – | – | | **Total** | **–** | **76** | - Hong Kong profits tax applies a two-tiered tax rate system, with the first **HK$2 million** of assessable profits taxed at **8.25%** and the remainder at **16.5%**[29](index=29&type=chunk) - Chinese subsidiaries are subject to a tax rate of **25%**, while British Virgin Islands subsidiaries are exempt from taxation[29](index=29&type=chunk) [7. Loss Per Share](index=15&type=section&id=7.%20Loss%20Per%20Share) Basic and diluted loss per share for the current period is 28.72 HK cents, an improvement from 35.65 HK cents in the prior period, with diluted loss per share being the same as basic due to no dilutive potential ordinary shares Loss Per Share (For the six months ended 30 June) | Indicator | 2025 (HK cents) | 2024 (HK cents) | | :--- | :--- | :--- | | Basic and diluted loss per share | (28.72) | (35.65) | - Basic loss per share is calculated based on the loss attributable to ordinary equity holders of the Company of approximately **HK$26,395,000** and the weighted average number of ordinary shares in issue of **104,388,000** shares[30](index=30&type=chunk) - As there were no dilutive potential ordinary shares in both the current and prior periods, the diluted loss per share is the same as the basic loss per share[31](index=31&type=chunk) [8. Dividends](index=15&type=section&id=8.%20Dividends) The Board does not recommend the payment of an interim dividend for the current period, consistent with the prior period - The Board does not recommend the payment of an interim dividend for the six months ended 30 June 2025 (six months ended 30 June 2024: nil)[32](index=32&type=chunk) [9. Property, Plant and Equipment](index=15&type=section&id=9.%20Property%2C%20Plant%20and%20Equipment) A loss on disposal of HK$946,000 was incurred from selling machinery with a carrying amount of HK$2,051,000 this period, while a gain of HK$346,000 was generated from selling machinery with a zero carrying amount in the prior period - During the six months ended 30 June 2025, a **loss on disposal of HK$946,000** was incurred from the disposal of machinery with a carrying amount of **HK$2,051,000**[33](index=33&type=chunk) - During the six months ended 30 June 2024, a **gain on disposal of HK$346,000** was generated from the disposal of machinery with a carrying amount of zero[34](index=34&type=chunk) [10. Trade and Other Receivables](index=15&type=section&id=10.%20Trade%20and%20Other%20Receivables) Total trade and other receivables as of 30 June 2025 were HK$18,470,000, a decrease from HK$20,288,000 on 31 December 2024, with trade receivables over one year old constituting the largest portion Trade and Other Receivables (As at 30 June) | Item | 30 June 2025 (HK$ Thousand) | 31 December 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Trade receivables, net of loss allowance | 16,321 | 16,694 | | Other receivables | 2,043 | 3,488 | | Utilities and other deposits | 106 | 106 | | **Total** | **18,470** | **20,288** | Ageing Analysis of Trade Receivables (As at 30 June) | Ageing | 30 June 2025 (HK$ Thousand) | 31 December 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Within 1 month | 156 | 288 | | 1 to 3 months | 684 | 1,934 | | 3 to 6 months | 1,027 | 851 | | 6 to 12 months | 2,222 | 835 | | Over 1 year | 12,232 | 12,786 | | **Total** | **16,321** | **16,694** | - Trade receivables are generally due within 180 days from the invoice date[36](index=36&type=chunk) [11. Trade and Other Payables](index=16&type=section&id=11.%20Trade%20and%20Other%20Payables) Total trade and other payables as of 30 June 2025 significantly decreased to HK$14,532,000 from HK$29,822,000 on 31 December 2024, with a higher proportion of trade payables aged over six months Trade and Other Payables (As at 30 June) | Item | 30 June 2025 (HK$ Thousand) | 31 December 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Trade payables | 6,543 | 19,152 | | Other payables and accrued charges | 7,989 | 10,670 | | **Total** | **14,532** | **29,822** | Ageing Analysis of Trade Payables (As at 30 June) | Ageing | 30 June 2025 (HK$ Thousand) | 31 December 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Within 1 month | – | 1,764 | | 1 to 3 months | – | 63 | | 3 to 6 months | – | 3,585 | | 6 to 12 months | 5,412 | 6,163 | | Over 1 year | 1,131 | 7,577 | | **Total** | **6,543** | **19,152** | [12. Fair Value Measurement of Financial Instruments](index=17&type=section&id=12.%20Fair%20Value%20Measurement%20of%20Financial%20Instruments) The Group's financial instruments are measured at fair value using a three-level hierarchy defined by HKFRS 13, classified based on the observability and significance of valuation inputs - Fair value measurements of financial instruments are classified into a three-level fair value hierarchy, including Level 1 (quoted prices in active markets), Level 2 (observable inputs), and Level 3 (significant unobservable inputs)[39](index=39&type=chunk) [Management Discussion and Analysis](index=18&type=section&id=Management%20Discussion%20and%20Analysis) Provides an in-depth review of the group's operational and financial performance, liquidity, and future outlook [Business Review and Future Prospects](index=18&type=section&id=Business%20Review%20and%20Future%20Prospects) The Group's revenue significantly decreased by 97.2% to HK$1.2 million due to factory closures and license delays; it has transitioned to outsourcing printing services and plans to explore diversified revenue streams - The Group's revenue decreased significantly by approximately **97.2% to HK$1.2 million**, primarily due to the closure of the Shenzhen factory in May 2024 and delays in obtaining a printing license for the Huizhou factory until May 2025, leading to reduced sales orders[40](index=40&type=chunk) - The Group has ceased operations at its Shenzhen and Hong Kong factories, transitioning its business model from in-house production to outsourcing printing and binding services to the Huizhou factory or other subcontractors in mainland China[41](index=41&type=chunk) - Future efforts will focus on maintaining operations by streamlining the business model, leveraging international standards and project management skills to secure overseas orders, and exploring more advanced printing technologies and diversified revenue streams[42](index=42&type=chunk) [Financial Review](index=19&type=section&id=Financial%20Review) Revenue, cost of sales, gross (loss)/profit, other income, and distribution costs all significantly decreased this period, while administrative expenses fell by 46.2%, and finance costs substantially increased, resulting in a narrowed loss for the period of approximately HK$26.4 million Key Financial Indicators Changes (For the six months ended 30 June) | Indicator | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | Change (%) | Primary Reason | | :--- | :--- | :--- | :--- | :--- | | Revenue | 1,200 | 43,500 | -97.2% | Factory closure and license delay | | Cost of sales | 1,300 | 39,800 | -96.8% | Decrease in revenue and orders | | Gross (Loss)/Profit | (51) | 3,700 | -101.4% | Decrease in sales orders | | Other income | 127 | 1,400 | -90.6% | Decrease in one-off income | | Distribution costs | 304 | 4,400 | -93.1% | Decrease in sales orders | | Administrative expenses | 14,500 | 27,000 | -46.2% | Decrease in staff costs and directors' emoluments | | Finance costs | 11,600 | 3,000 | +286.7% | N/A | | Income tax | 0 | 100 | -100% | N/A | | Loss for the period | 26,400 | 29,500 | -10.5% | Decrease in revenue and increase in finance costs | [Liquidity and Financial Resources](index=20&type=section&id=Liquidity%20and%20Financial%20Resources) As of the reporting period end, the Group had net current liabilities of approximately HK$131.67 million, a current ratio of 0.12, and net debt of approximately HK$62.9 million, indicating tight liquidity, with total bank borrowings and overdrafts of approximately HK$118.9 million due within one year Liquidity and Financial Resources Overview | Indicator | 30 June 2025 (HK$ Million) | 31 December 2024 (HK$ Million) | | :--- | :--- | :--- | | Net current liabilities | 131.67 | 134.21 | | Current ratio | 0.12 | 0.14 | | Net debt | 62.9 | 9.2 | | Total bank borrowings, overdrafts, and lease liabilities | 118.9 | 108.2 | - The Group recorded a capital deficit at the end of the current period, thus the gearing ratio cannot be calculated[53](index=53&type=chunk) - The Group adopts a centralized financing and treasury policy, regularly monitoring liquidity needs, compliance with loan covenants, and maintaining relationships with banks to ensure sufficient funding[53](index=53&type=chunk) [Foreign Exchange Management](index=20&type=section&id=Foreign%20Exchange%20Management) The Group faces foreign exchange risk from receivables, payables, and cash balances denominated in USD, RMB, GBP, and JPY, with no hedging activities undertaken this period, and the Board will monitor risks according to its policy - The Group's foreign exchange risk primarily arises from receivables, payables, and cash balances denominated in foreign currencies, mainly US dollars, Renminbi, British Pounds, and Japanese Yen[54](index=54&type=chunk) - During the current period, the Group did not enter into or trade any financial instruments for hedging purposes[54](index=54&type=chunk) [Pledges of the Group's Assets](index=21&type=section&id=Pledges%20of%20the%20Group%27s%20Assets) As of the reporting period end, the Group's total banking facilities were HK$175.9 million, with HK$159.4 million utilized, secured by various assets including bank deposits, financial assets, trade receivables, property, plant and equipment, rental proceeds, insurance policies, and corporate guarantees - As of the reporting period end, total banking facilities amounted to **HK$175.9 million**, with **HK$159.4 million** utilized[55](index=55&type=chunk) - Banking facilities are secured by bank deposits, financial assets at fair value through profit or loss, trade receivables, property, plant and equipment, assignment of rental proceeds from Hong Kong properties, proceeds from key management personnel's insurance policies, and corporate guarantees[55](index=55&type=chunk) - As at 30 June 2025, properties and machinery (included in property, plant and equipment) with a carrying amount of **HK$37.4 million** were pledged as collateral for banking facilities[55](index=55&type=chunk) [Capital Structure](index=21&type=section&id=Capital%20Structure) The Company's shares were listed on GEM on 13 December 2017, and following a placing on 20 September 2024, the total issued shares remained at 104,388,000, with no changes to the capital structure during the current period - The Company's shares were listed on GEM on 13 December 2017[56](index=56&type=chunk) - Following the completion of the placing on 20 September 2024, the total number of issued shares of the Company has been **104,388,000** shares since 20 September 2024, with no changes to the Group's capital structure during the current period[56](index=56&type=chunk) [Capital Expenditure](index=21&type=section&id=Capital%20Expenditure) Capital expenditure for the period primarily involved acquiring property, plant, and equipment, funded by internal resources, finance leases, and bank borrowings; as of 30 June 2025, capital expenditure for property, plant, and equipment was nil, compared to HK$92,166,000 on 31 December 2024 Capital Expenditure (As at 30 June) | Item | 30 June 2025 (HK$ Thousand) | 31 December 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Property, plant and equipment | – | 92,166 | | Intangible assets | – | – | | **Total** | **–** | **92,166** | - Capital expenditure primarily includes the acquisition of property, plant and equipment (such as production machinery), funded through internal resources, finance leases, and bank borrowings[57](index=57&type=chunk) [Contingent Liabilities](index=21&type=section&id=Contingent%20Liabilities) The Group had no significant contingent liabilities during the current period - There were no significant contingent liabilities[59](index=59&type=chunk) [Commitments](index=22&type=section&id=Commitments) As of the reporting period end, the Group had no capital commitments outstanding not provided for in the financial statements - As of the reporting period end, the financial statements showed zero capital commitments outstanding not provided for[60](index=60&type=chunk) [Employees and Remuneration Policy](index=22&type=section&id=Employees%20and%20Remuneration%20Policy) As of the reporting period end, the Group maintained 9 employees, consistent with 31 December 2024, with directors' and senior management's remuneration regularly reviewed based on market levels, responsibilities, and Group performance - As of the reporting period end, the Group had a total of **9 employees**, consistent with 31 December 2024[61](index=61&type=chunk) - Remuneration for directors and senior management is received in the form of directors' fees, salaries, benefits in kind, and/or discretionary bonuses, and is regularly reviewed with reference to market levels, responsibilities, and Group performance[61](index=61&type=chunk) [Material Investments, Material Acquisitions and Disposals, and Future Plans for Material Investments or Capital Assets](index=22&type=section&id=Material%20Investments%2C%20Material%20Acquisitions%20and%20Disposals%2C%20and%20Future%20Plans%20for%20Material%20Investments%20or%20Capital%20Assets) The Group undertook no material investments, acquisitions, or disposals during the current period, and has no future plans for such activities or capital assets - During the current period, the Group did not undertake any material investments, acquisitions, or disposals[62](index=62&type=chunk) - As of the reporting period end, the Group had no future plans regarding any material investments or capital assets[62](index=62&type=chunk) [Material Events After the Reporting Period](index=22&type=section&id=Material%20Events%20After%20the%20Reporting%20Period) To the best of the Board's knowledge, there were no disclosable material events after the current reporting period - To the best of the Board's knowledge, there were no disclosable material events after the current period[63](index=63&type=chunk) [Dividends](index=22&type=section&id=Dividends) The Board does not recommend the payment of an interim dividend for the current period, consistent with the prior period - The Board does not recommend the payment of an interim dividend for the current period (prior period: nil)[64](index=64&type=chunk) [Other Information](index=23&type=section&id=Other%20Information) Presents additional disclosures including details on share option schemes, share transactions, director changes, and corporate governance practices [Share Option Scheme](index=23&type=section&id=Share%20Option%20Scheme) The Company has adopted a share option scheme, but no share options were granted, exercised, cancelled, lapsed, or forfeited during the current period, and none remain outstanding - The Company has adopted a share option scheme, the principal terms of which are summarized in the prospectus[65](index=65&type=chunk) - No share options were granted, exercised, cancelled, lapsed, or forfeited under the scheme during the current period, and there are no outstanding share options[66](index=66&type=chunk) [Purchase, Sale or Redemption of Shares](index=23&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20Shares) Neither the Company nor any of its subsidiaries purchased, sold, or redeemed any shares during the current period - Neither the Company nor any of its subsidiaries purchased, sold, or redeemed any shares during the current period[67](index=67&type=chunk) [Changes in Directors](index=23&type=section&id=Changes%20in%20Directors) Ms Hui Yuk Ling and Mr Luk Wai were appointed as Executive Directors of the Company on 7 April 2025 and 9 April 2025, respectively - Ms Hui Yuk Ling and Mr Luk Wai were appointed as Executive Directors of the Company on 7 April 2025 and 9 April 2025, respectively[68](index=68&type=chunk) [Disclosure of Interests](index=23&type=section&id=Disclosure%20of%20Interests) Director Mr Lam Sam Ming and his spouse Ms Yiu Yuen hold a 45.98% share interest in the Company through controlled corporation First Tech, while major shareholders First Tech Inc. and Yili International Holdings Limited and its associates also hold over 5% interests Directors' Interests in the Company (As at 30 June 2025) | Director Name | Capacity | Number of Shares | Percentage of Interest in the Company | | :--- | :--- | :--- | :--- | | Mr Lam Sam Ming | Interest in controlled corporation | 48,000,000 (L) | 45.98% | | Ms Yiu Yuen | Spouse's interest | 48,000,000 (L) | 45.98% | - Mr Lam Sam Ming holds **48,000,000 shares** through his wholly-owned First Tech, and Ms Yiu Yuen, as his spouse, is deemed to have the same interest[72](index=72&type=chunk) - Major shareholders First Tech Inc. and Yili International Holdings Limited and its associates (Zhao Zhisheng and Zhang Dingjian) each hold a **6.90% interest** in the total issued shares of the Company[73](index=73&type=chunk)[74](index=74&type=chunk) [Corporate Governance Practices](index=26&type=section&id=Corporate%20Governance%20Practices) The Company complied with the Corporate Governance Code during the period, except for Mr Lam Sam Ming holding both Chairman and CEO roles, an arrangement the Board deems in the Group's best interest with sufficient checks and balances - The Company has complied with the principles and applicable code provisions of the Corporate Governance Code during the current period, except for the roles of Chairman and Chief Executive Officer being held by the same individual (Mr Lam Sam Ming)[75](index=75&type=chunk)[76](index=76&type=chunk) - The Board believes that Mr Lam Sam Ming serving concurrently as Chairman and Chief Executive Officer is in the best interests of the Group, and the operation of an experienced Board, including three independent non-executive directors, ensures a balance of power and authority[76](index=76&type=chunk)[77](index=77&type=chunk) [Code of Conduct for Securities Transactions by Directors](index=26&type=section&id=Code%20of%20Conduct%20for%20Securities%20Transactions%20by%20Directors) The Company has adopted the GEM Listing Rules' code of conduct for directors' securities transactions, and all directors confirmed full compliance during the current period - The Company has adopted the code of conduct for securities transactions by directors as set out in Rules 5.48 to 5.67 of the GEM Listing Rules[78](index=78&type=chunk) - All Directors have confirmed their full compliance with the required standards of dealing as set out in the code of conduct during the current period[78](index=78&type=chunk) [Directors' Interests in Competing Businesses](index=27&type=section&id=Directors%27%20Interests%20in%20Competing%20Businesses) No director or their close associates hold interests in any business that directly or indirectly competes with the Group's operations, other than within the Group itself - Save for members of the Group, none of the Directors or their respective close associates have any interests in any business that competes or is likely to compete, either directly or indirectly, with the businesses of the Group[79](index=79&type=chunk) [Audit Committee](index=27&type=section&id=Audit%20Committee) The Audit Committee has reviewed the Group's unaudited consolidated financial results for the current period and found them compliant with applicable accounting standards and GEM Listing Rules, with adequate disclosures - The Audit Committee has reviewed the Group's unaudited consolidated financial results for the current period[80](index=80&type=chunk) - The Audit Committee is of the opinion that the financial results comply with applicable accounting standards and the GEM Listing Rules and that adequate disclosures have been made[80](index=80&type=chunk)

[Interim Results Announcement](index=1&type=section&id=Interim%20Results%20Announcement) This section provides an overview of China Art Financial Holdings Limited's unaudited condensed consolidated interim results for the six months ended June 30, 2025 [Overview of Interim Results of China Art Financial Holdings Limited](index=1&type=section&id=CHINA%20ART%20FINANCIAL%20HOLDINGS%20LIMITED) This announcement presents the unaudited condensed consolidated interim results of China Art Financial Holdings Limited and its subsidiaries for the six months ended June 30, 2025, with comparative figures for the prior period - The Group released its unaudited condensed consolidated interim results for the six months ended June 30, 2025[2](index=2&type=chunk) [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=2&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) This statement details the Group's financial performance, showing revenue growth alongside a significant decline in profit before tax and profit for the period [Profit or Loss Overview](index=2&type=section&id=Profit%20or%20Loss%20Summary) For the six months ended June 30, 2025, the company's revenue increased year-on-year, but profit before tax and profit for the period significantly decreased, primarily due to higher cost of inventories sold, increased finance costs, and reduced income tax expense Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (For the six months ended June 30) | Indicator | 2025 (RMB '000) | 2024 (RMB '000) | | :--- | :--- | :--- | | Revenue | 43,220 | 36,778 | | Other income | 462 | 697 | | Other gains/(losses) net | 58 | (151) | | Cost of inventories sold | (35,600) | (22,950) | | Reversal/(recognition) of impairment losses net | 13 | (99) | | Staff costs | (2,896) | (2,240) | | Depreciation of property, plant and equipment | (98) | (120) | | Depreciation of right-of-use assets | (347) | (320) | | Loss on disposal of property, plant and equipment | (85) | – | | Advertising and promotion expenses | (1,453) | (1,153) | | Other expenses | (1,994) | (2,332) | | Finance costs | (85) | (25) | | **Profit before tax** | **1,195** | **8,085** | | Income tax expense | (940) | (2,669) | | **Profit for the period attributable to owners of the Company** | **255** | **5,416** | | Earnings per share (RMB cents) - Basic and diluted | 0.02 | 0.32 | - Profit for the period attributable to owners of the Company significantly decreased by **95.3%** year-on-year to **RMB 255 thousand**[4](index=4&type=chunk) - Basic and diluted earnings per share decreased from **RMB 0.32 cents** in the same period of 2024 to **RMB 0.02 cents** in 2025[4](index=4&type=chunk) [Condensed Consolidated Statement of Financial Position](index=3&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) This statement presents the Group's financial position, highlighting changes in assets, liabilities, and equity, including a notable increase in inventories [Financial Position Overview](index=3&type=section&id=Financial%20Position%20Summary) As of June 30, 2025, the company's total assets and net equity slightly increased, while net current assets remained stable, with a significant increase in inventories and a slight decrease in loans to customers Condensed Consolidated Statement of Financial Position (As of June 30, 2025) | Indicator | June 30, 2025 (RMB '000) | December 31, 2024 (RMB '000) | | :--- | :--- | :--- | | **Non-current assets** | | | | Property, plant and equipment | 510 | 190 | | Right-of-use assets | 1,098 | 743 | | Deferred tax assets | 1,254 | 1,123 | | **Total non-current assets** | **2,862** | **2,056** | | **Current assets** | | | | Inventories | 101,000 | 32,000 | | Loans to customers | 445,572 | 447,255 | | Other receivables | 17 | 11 | | Tax recoverable | 256 | 287 | | Bank balances and cash | 588,009 | 653,570 | | **Total current assets** | **1,134,854** | **1,133,123** | | **Current liabilities** | | | | Accruals and other payables | 25,040 | 23,423 | | Lease liabilities | 823 | 465 | | Tax payable | 731 | 826 | | **Total current liabilities** | **26,594** | **24,714** | | **Net current assets** | **1,108,260** | **1,108,409** | | **Total assets less current liabilities** | **1,111,122** | **1,110,465** | | **Non-current liabilities** | | | | Lease liabilities | 178 | – | | Deferred tax liabilities | 274 | 186 | | **Total non-current liabilities** | **452** | **186** | | **Net assets** | **1,110,670** | **1,110,279** | | **Total equity** | **1,110,670** | **1,110,279** | - Inventories significantly increased from **RMB 32,000 thousand** as of December 31, 2024, to **RMB 101,000 thousand** as of June 30, 2025[5](index=5&type=chunk) - Bank balances and cash decreased from **RMB 653,570 thousand** as of December 31, 2024, to **RMB 588,009 thousand** as of June 30, 2025[5](index=5&type=chunk) [Notes to the Condensed Consolidated Financial Statements](index=4&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) These notes provide detailed explanations of the Group's accounting policies, revenue segmentation, financial costs, tax expenses, and other key financial statement items [1. General Information and Basis of Preparation](index=4&type=section&id=1.%20General%20Information%20and%20Basis%20of%20Preparation) The Group's condensed consolidated financial statements are prepared in accordance with HKAS 34 and Appendix D2 of the HKEX Listing Rules, presented in RMB, and include variable interest entities controlled through contractual arrangements in China - The financial statements are prepared in accordance with HKAS 34 and Appendix D2 of the Listing Rules, presented in RMB[6](index=6&type=chunk)[7](index=7&type=chunk) - The Group exercises effective financial and operational control over Hexin Pawn and Hexin Auction through contractual arrangements, including comprehensive service agreements, option agreements, entrustment agreements, and equity pledge agreements, to obtain their economic returns[8](index=8&type=chunk)[9](index=9&type=chunk)[10](index=10&type=chunk) [2. Significant Accounting Policies](index=5&type=section&id=2.%20Significant%20Accounting%20Policies) The Group's condensed consolidated financial statements are prepared on a historical cost basis, with the first-time application of revised HKFRSs having no significant impact on financial position or performance - The financial statements are prepared on a historical cost basis, with accounting policies consistent with the 2024 annual financial statements, except for the application of revised HKFRSs[11](index=11&type=chunk) - HKAS 21 (Amendment) 'Lack of Exchangeability' was first applied in this period, but it had no significant impact on the financial position or performance[12](index=12&type=chunk) [3. Revenue and Segment Information](index=5&type=section&id=3.%20Revenue%20and%20Segment%20Information) The Group's revenue is primarily driven by a significant increase in art and asset sales, offsetting a decline in interest income from the pawn business, while the auction business saw substantial revenue growth but remained at a loss, with all operating segments' revenue originating from mainland China Revenue Analysis (For the six months ended June 30) | Revenue Source | 2025 (RMB '000) | 2024 (RMB '000) | | :--- | :--- | :--- | | Interest income from art and asset pawn business | 3,963 | 10,931 | | Art sales from art and asset sales business | 39,159 | 25,841 | | Auction income from art and asset auction business | 98 | 6 | | **Total** | **43,220** | **36,778** | - Interest income from the art and asset pawn business decreased by **63.7%** year-on-year, while revenue from the art and asset sales business increased by **51.5%** year-on-year[13](index=13&type=chunk) Breakdown of Art and Asset Sales Business Revenue (For the six months ended June 30) | Asset Category | 2025 (RMB '000) | 2024 (RMB '000) | | :--- | :--- | :--- | | Zisha artworks | 37,124 | 14,115 | | Paintings and calligraphy | 2,035 | 11,726 | | **Total** | **39,159** | **25,841** | Segment Revenue and Performance Analysis (For the six months ended June 30) | Segment | 2025 Revenue (RMB '000) | 2025 Performance (RMB '000) | 2024 Revenue (RMB '000) | 2024 Performance (RMB '000) | | :--- | :--- | :--- | :--- | :--- | | Art and asset pawn business | 3,963 | 1,985 | 10,931 | 8,870 | | Art and asset auction business | 98 | (278) | 6 | (259) | | Art and asset sales business | 39,159 | 1,513 | 25,841 | 1,281 | | **Total** | **43,220** | **3,220** | **36,778** | **9,892** | - All revenue and designated non-current assets are located in mainland China (excluding Hong Kong)[25](index=25&type=chunk) - In the first half of 2025, customers A and B are no longer major customers (contributing over 10% of total revenue), while customers D and E have become new major customers[26](index=26&type=chunk)[27](index=27&type=chunk)[28](index=28&type=chunk) [4. Financial Costs](index=10&type=section&id=4.%20Financial%20Costs) For the six months ended June 30, 2025, finance costs significantly increased, primarily due to interest expenses from loans from a former director and other loans Finance Costs (For the six months ended June 30) | Finance Cost Source | 2025 (RMB '000) | 2024 (RMB '000) | | :--- | :--- | :--- | | Interest expense on loan from a former director | 39 | – | | Interest expense on other loans | 32 | – | | Interest expense on lease liabilities | 14 | 25 | | **Total finance costs** | **85** | **25** | - Finance costs increased by **240%** from **RMB 25 thousand** in the same period of 2024 to **RMB 85 thousand** in 2025[30](index=30&type=chunk) [5. Income Tax Expense](index=11&type=section&id=5.%20Income%20Tax%20Expense) For the six months ended June 30, 2025, income tax expense significantly decreased due to lower taxable profit for the period, with Chinese subsidiaries taxed at 25% and no taxable profit in Hong Kong Income Tax Expense (For the six months ended June 30) | Tax Type | 2025 (RMB '000) | 2024 (RMB '000) | | :--- | :--- | :--- | | Current tax - China corporate income tax for the period | 944 | 2,732 | | Current tax - Under-provision in prior years | 39 | – | | Deferred tax | (43) | (63) | | **Total** | **940** | **2,669** | - Income tax expense decreased by **64.8%** year-on-year, from **RMB 2,669 thousand** in 2024 to **RMB 940 thousand** in 2025[31](index=31&type=chunk) - Chinese subsidiaries are subject to a **25%** tax rate, while no provision for profits tax was made for Hong Kong due to the absence of taxable profits[31](index=31&type=chunk)[32](index=32&type=chunk) [6. Dividends](index=11&type=section&id=6.%20Dividends) The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025, consistent with the prior year - The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025 (2024: nil)[33](index=33&type=chunk) [7. Earnings Per Share](index=11&type=section&id=7.%20Earnings%20Per%20Share) For the six months ended June 30, 2025, basic and diluted earnings per share significantly decreased, consistent with the reduction in profit for the period, with diluted EPS being the same as basic EPS due to no potentially dilutive ordinary shares Earnings Per Share Calculation Data (For the six months ended June 30) | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | Profit for the period attributable to owners of the Company (RMB '000) | 255 | 5,416 | | Weighted average number of ordinary shares for basic and diluted EPS (thousand shares) | 1,690,500 | 1,682,533 | | **Basic and diluted earnings per share (RMB cents)** | **0.02** | **0.32** | - Basic and diluted earnings per share decreased by **93.75%** year-on-year[34](index=34&type=chunk)[35](index=35&type=chunk)[36](index=36&type=chunk)[37](index=37&type=chunk) - Diluted earnings per share are the same as basic earnings per share as there were no potentially dilutive ordinary shares outstanding during both periods[37](index=37&type=chunk) [8. Inventories](index=12&type=section&id=8.%20Inventories) As of June 30, 2025, total inventories significantly increased, primarily driven by a substantial rise in paintings and calligraphy inventories, with a corresponding increase in the cost of inventories sold Inventories Composition (As of June 30, 2025) | Inventory Category | June 30, 2025 (RMB '000) | December 31, 2024 (RMB '000) | | :--- | :--- | :--- | | Zisha artworks | 38,500 | 32,000 | | Paintings and calligraphy | 62,500 | – | | **Total** | **101,000** | **32,000** | - Total inventories increased by **215.6%** from **RMB 32,000 thousand** as of December 31, 2024, to **RMB 101,000 thousand** as of June 30, 2025[38](index=38&type=chunk) - Cost of inventories sold increased from **RMB 22,950 thousand** in the same period of 2024 to **RMB 35,600 thousand** in 2025[38](index=38&type=chunk) [9. Loans to Customers](index=13&type=section&id=9.%20Loans%20to%20Customers) As of June 30, 2025, loans to art and asset pawn customers slightly decreased, but impairment provisions remained stable, with loans typically maturing within three to six months at annual interest rates of 6% to 12%, all collateralized and not overdue Loans to Art and Asset Pawn Customers (As of June 30, 2025) | Indicator | June 30, 2025 (RMB '000) | December 31, 2024 (RMB '000) | | :--- | :--- | :--- | | Loans to art and asset pawn customers | 449,587 | 451,283 | | Less: Impairment provision | (4,015) | (4,028) | | **Net amount** | **445,572** | **447,255** | - The annual interest rate for customer loans was approximately **6% to 12%** in the first half of 2025 (2024: 7% to 12%)[39](index=39&type=chunk) - All pawn loans are collateralized by art and other assets, primarily Zisha artworks and paintings and calligraphy, and none were overdue as of the end of the reporting period[40](index=40&type=chunk) [10. Accruals and Other Payables](index=14&type=section&id=10.%20Accruals%20and%20Other%20Payables) As of June 30, 2025, total accruals and other payables slightly increased, notably due to a change in the nature of a loan from a former director and the addition of an unsecured revolving credit facility from an independent third party Accruals and Other Payables (As of June 30, 2025) | Item | June 30, 2025 (RMB '000) | December 31, 2024 (RMB '000) | | :--- | :--- | :--- | | Accrued expenses | 3,125 | 4,482 | | Loan from a former director | 7,316 | 7,243 | | Amount due to a director | – | 5,564 | | Amount due to a director of a subsidiary of the Company | – | 4,897 | | Payables for acquisition of property, plant and equipment | 503 | – | | Other loans | 12,618 | – | | Other payables for art and asset auction business | 614 | – | | Other payables | 830 | 858 | | Other taxes payable | 34 | 379 | | **Total** | **25,040** | **23,423** | - The nature of the loan from former director Ms. Lin Xiaomei changed from unsecured, interest-free, and repayable by April 30, 2025, to unsecured, interest-bearing, and repayable on demand[42](index=42&type=chunk)[43](index=43&type=chunk) - The Company entered into a credit facility agreement with an independent third party for an unsecured revolving credit facility of up to **HKD 30 million** at an annual interest rate of **5%**[43](index=43&type=chunk) [11. Share Capital](index=15&type=section&id=11.%20Share%20Capital) As of June 30, 2025, authorized and issued and fully paid share capital remained stable, following a new share issuance to an independent third party in April 2024, with net proceeds intended for a joint venture Share Capital Structure (As of June 30, 2025) | Item | Number of Shares (thousand shares) | Amount (HKD '000) | Amount (RMB '000) | | :--- | :--- | :--- | :--- | | Authorized share capital (ordinary shares of HKD 0.01 each) | 5,000,000 | 50,000 | 43,420 | | Issued and fully paid share capital (as at January 1, 2024) | 1,678,000 | 16,780 | 14,679 | | Issue of new shares (on April 26, 2024) | 12,500 | 125 | 114 | | **Issued and fully paid share capital (as at June 30, 2025)** | **1,690,500** | **16,905** | **14,793** | - On April 26, 2024, the Company issued **12,500,000** new ordinary shares at **HKD 0.12** per share to an independent third party, raising net proceeds of approximately **RMB 1,319,000**, intended for establishing a joint venture to provide centralized clearing system software services[44](index=44&type=chunk) [Management Discussion and Analysis](index=16&type=section&id=Management%20Discussion%20and%20Analysis) This section offers a comprehensive review of the Group's business and financial performance, liquidity, and future outlook amidst challenging market conditions [Business Review](index=16&type=section&id=Business%20Review) During the review period, the Group faced challenging market conditions and adjusted its marketing strategies, experiencing a significant decline in pawn business revenue and profit, substantial revenue growth but increased losses in the auction business, and growth in both revenue and profit for the art and asset sales business, which became the primary growth driver - International and domestic markets continue to face challenges, and the Group has adjusted its marketing strategies to cope with the unstable environment[45](index=45&type=chunk) [Art and Asset Pawn Business](index=16&type=section&id=Art%20and%20Asset%20Pawn%20Business) Pawn business revenue decreased by approximately 63.3% to RMB 4.0 million, and profit decreased by 77.5% to RMB 2.0 million, primarily due to lower interest rates and a temporary suspension of new business caused by the relocation of a major operating location in China, with no defaults recorded in the first half due to effective risk management - Pawn business revenue was approximately **RMB 4.0 million**, a year-on-year decrease of approximately **63.3%**[46](index=46&type=chunk) - Pawn business profit was approximately **RMB 2.0 million**, a year-on-year decrease of approximately **77.5%**[46](index=46&type=chunk) - The decrease in revenue was primarily due to lower interest rates on art and asset pawn loans and the suspension of new business from March to May 2025 due to the relocation of a major operating location in China[46](index=46&type=chunk) - The Group has established effective risk management systems, including multi-level internal approvals and professional appraisal teams, resulting in no defaults in the pawn business during the first half of 2025[47](index=47&type=chunk) [Art and Asset Auction Business](index=16&type=section&id=Art%20and%20Asset%20Auction%20Business) Auction business revenue surged by approximately 15.3 times to RMB 98 thousand, but losses increased from RMB 259 thousand to RMB 278 thousand, primarily due to higher operating costs - Auction business revenue was approximately **RMB 98 thousand**, an increase of approximately **15.3 times** compared to the same period in 2024[48](index=48&type=chunk) - Auction business loss was approximately **RMB 278 thousand**, an increase from **RMB 259 thousand** in the same period of 2024, primarily due to increased operating costs[48](index=48&type=chunk) [Art and Asset Sales Business](index=17&type=section&id=Art%20and%20Asset%20Sales%20Business) Sales business revenue grew to approximately RMB 39.2 million, with a profit of approximately RMB 1.5 million, driven by leveraging customer networks, employee training, and marketing to focus on cost-effective Zisha and calligraphy/painting artworks and assist clients in sourcing art - Sales business revenue was approximately **RMB 39.2 million**, an increase from **RMB 25.8 million** in the same period of 2024[50](index=50&type=chunk) - Sales business profit was approximately **RMB 1.5 million**, an increase from **RMB 1.3 million** in the same period of 2024, primarily due to increased gains from art trading[50](index=50&type=chunk) - The Group laid the foundation for its art and asset sales business by leveraging its extensive customer network, training employees with external experts, and conducting marketing promotions[49](index=49&type=chunk) [Financial Review](index=17&type=section&id=Financial%20Review) During the review period, the Group's total revenue grew by 17.5%, primarily driven by art sales, yet profit before tax and profit for the period significantly decreased by 85.2% and 94.4% respectively, mainly due to reduced pawn business revenue, increased central administrative expenses, higher cost of inventories sold, and increased finance costs [Revenue](index=17&type=section&id=Revenue) During the review period, total revenue increased by approximately 17.5% year-on-year to RMB 43.2 million, primarily driven by increased art sales revenue from the art and asset sales business - Total revenue increased by approximately **17.5%** year-on-year to approximately **RMB 43.2 million**[51](index=51&type=chunk) - The revenue growth was primarily attributable to increased art sales revenue from the art and asset sales business[51](index=51&type=chunk) [Other Income](index=17&type=section&id=Other%20Income) Other income decreased by approximately 33.7% year-on-year to RMB 0.2 million, primarily due to reduced bank interest income - Other income decreased by approximately **33.7%** year-on-year to approximately **RMB 0.2 million**[52](index=52&type=chunk) - The decrease was primarily due to reduced bank interest income[52](index=52&type=chunk) [Other Gains/(Losses) Net](index=18&type=section&id=Other%20Gains%2F%28Losses%29%20Net) During the review period, net other gains were approximately RMB 0.1 million, compared to net losses of approximately RMB 0.2 million in the prior year, representing a turnaround to profit - Net other gains were approximately **RMB 0.1 million**, compared to net losses of approximately **RMB 0.2 million** in the same period of 2024[53](index=53&type=chunk) [Cost of Inventories Sold](index=18&type=section&id=Cost%20of%20Inventories%20Sold) Cost of inventories sold increased to RMB 35.6 million, primarily reflecting higher purchase costs for artworks sold in the art and asset sales business - Cost of inventories sold was approximately **RMB 35.6 million**, an increase from **RMB 23.0 million** in the same period of 2024[54](index=54&type=chunk) - This cost refers to the purchase cost of artworks sold to customers through the art and asset sales business during the review period[54](index=54&type=chunk) [Reversal/(Recognition) of Impairment Losses Net](index=18&type=section&id=Reversal%2F%28Recognition%29%20of%20Impairment%20Losses%20Net) During the review period, a reversal of impairment losses on pawn loans of approximately RMB 13 thousand was recorded, compared to a net impairment loss recognition of approximately RMB 0.1 million in the prior year, indicating improved asset quality - A reversal of impairment losses on pawn loans of approximately **RMB 13 thousand** was recorded, compared to a net impairment loss recognition of approximately **RMB 0.1 million** in the prior year[55](index=55&type=chunk) [Staff Costs](index=18&type=section&id=Staff%20Costs) Staff costs increased by approximately 31.8% year-on-year to RMB 2.9 million, primarily due to an increase in the average number of employees and senior positions - Staff costs increased by approximately **31.8%** from approximately **RMB 2.2 million** in the same period of 2024 to approximately **RMB 2.9 million**[56](index=56&type=chunk) - The increase was primarily due to an increase in the average number of employees and senior positions during the review period[56](index=56&type=chunk) [Depreciation of Property, Plant and Equipment](index=18&type=section&id=Depreciation%20of%20Property%2C%20Plant%20and%20Equipment) Depreciation of property, plant and equipment remained stable at RMB 0.1 million, with no significant additions or disposals during the period - Depreciation of property, plant and equipment was approximately **RMB 0.1 million**, remaining stable compared to the same period last year[57](index=57&type=chunk) - The stability is due to the Group having no significant additions or disposals of property, plant and equipment in both periods[57](index=57&type=chunk) [Depreciation of Right-of-Use Assets](index=18&type=section&id=Depreciation%20of%20Right-of-Use%20Assets) Depreciation of right-of-use assets remained stable at RMB 0.3 million - Depreciation of right-of-use assets was approximately **RMB 0.3 million**, remaining stable compared to the same period last year[58](index=58&type=chunk) [Advertising and Promotion Expenses](index=18&type=section&id=Advertising%20and%20Promotion%20Expenses) Advertising and promotion expenses increased by approximately RMB 0.3 million, aimed at enhancing brand value and promoting business activities - Advertising and promotion expenses increased by approximately **RMB 0.3 million**, used to enhance brand value and promote business activities[59](index=59&type=chunk) [Other Expenses](index=19&type=section&id=Other%20Expenses) Other expenses decreased by approximately 13.0% year-on-year to RMB 2.0 million, primarily due to reduced legal and professional fees - Other expenses decreased by approximately **13.0%** year-on-year to approximately **RMB 2.0 million**[60](index=60&type=chunk) - The decrease was primarily due to reduced legal and professional fees[60](index=60&type=chunk) [Profit Before Tax](index=19&type=section&id=Profit%20Before%20Tax) Profit before tax significantly decreased by approximately 85.2% year-on-year to RMB 1.2 million, primarily due to reduced revenue from the art and asset pawn business and increased central administrative expenses - Profit before tax decreased by approximately **85.2%** year-on-year to approximately **RMB 1.2 million**[61](index=61&type=chunk) - The decrease was primarily due to reduced revenue from the art and asset pawn business and increased central administrative expenses[61](index=61&type=chunk) [Income Tax Expense](index=19&type=section&id=Income%20Tax%20Expense) Income tax expense decreased by approximately 66.7% year-on-year to RMB 0.9 million, primarily due to lower taxable profit - Income tax expense decreased by approximately **66.7%** year-on-year to approximately **RMB 0.9 million**[62](index=62&type=chunk) - The decrease was primarily due to a reduction in the Group's taxable profit during the review period[62](index=62&type=chunk) [Profit for the Period](index=19&type=section&id=Profit%20for%20the%20Period) Profit for the period significantly decreased by approximately 94.4% year-on-year to RMB 0.3 million, reflecting the combined impact of the aforementioned factors - Profit for the period decreased by approximately **94.4%** year-on-year to approximately **RMB 0.3 million**[63](index=63&type=chunk) [Liquidity, Financial Resources and Capital Structure](index=20&type=section&id=Liquidity%2C%20Financial%20Resources%20and%20Capital%20Structure) The Group maintains a sound financial position, primarily funding operations through internal cash flow, despite a significant increase in net cash used in operating activities and a decrease in bank balances and cash, with no bank borrowings or significant asset pledges, a slight rise in the gearing ratio, and no material contingent liabilities or capital commitments Summary of Condensed Consolidated Cash Flow Statement (For the six months ended June 30) | Cash Flow Type | 2025 (RMB '000) | 2024 (RMB '000) | | :--- | :--- | :--- | | Net cash used in operating activities | (68,273) | (14,927) | | Net cash generated from investing activities | 462 | 695 | | Net cash generated from financing activities | 2,248 | 2,638 | - Net cash used in operating activities significantly increased from **RMB 14,927 thousand** in the same period of 2024 to **RMB 68,273 thousand** in 2025[64](index=64&type=chunk) - Total bank balances and cash decreased by **10.0%** from approximately **RMB 653.6 million** as of December 31, 2024, to approximately **RMB 588.0 million** as of June 30, 2025[64](index=64&type=chunk) - The Group has no bank borrowings and no significant assets pledged[64](index=64&type=chunk) - The gearing ratio increased from **1.6%** as of December 31, 2024, to **1.8%** as of June 30, 2025[66](index=66&type=chunk) - The Group has no material contingent liabilities or capital commitments[67](index=67&type=chunk)[69](index=69&type=chunk) [Post-Reporting Events](index=21&type=section&id=Post-Reporting%20Events) Subsequent to the reporting period, the company received a statutory demand from a former CEO for repayment of approximately HKD 7.89 million in loan principal and interest, with a potential winding-up petition if not paid on time - On August 29, 2025, the Company received a statutory demand from former CEO Ms. Lin Xiaomei for payment of outstanding loan principal and interest totaling approximately **HKD 7,894,890.00**, plus overdue interest[70](index=70&type=chunk) - Failure to pay on time may result in the creditor presenting a winding-up petition against the Company[70](index=70&type=chunk) [Human Resources and Training](index=21&type=section&id=Human%20Resources%20and%20Training) As of June 30, 2025, the Group had 45 employees, with compensation policies based on performance, qualifications, experience, and market practices, including salaries, medical insurance, MPF, and discretionary bonuses - As of June 30, 2025, the Group had **45 employees** (December 31, 2024: 44 employees)[71](index=71&type=chunk) - Employee remuneration policies are determined based on performance, qualifications, experience, and market practices, including salaries, medical insurance, MPF, and discretionary year-end bonuses[71](index=71&type=chunk) [Foreign Exchange Risk](index=21&type=section&id=Foreign%20Exchange%20Risk) The Group's foreign exchange risk is not significant as most monetary assets and liabilities are denominated in RMB, and business transactions are primarily conducted in RMB and HKD, with management continuing to monitor and consider hedging risks - The Group's foreign exchange risk is not significant as most monetary assets and liabilities are denominated in RMB, and business transactions are primarily conducted in RMB and HKD[72](index=72&type=chunk) - As of the six months ended June 30, 2025, the Group had not entered into any foreign exchange hedging arrangements[72](index=72&type=chunk) [Outlook and Prospects](index=22&type=section&id=Outlook%20and%20Prospects) Facing global economic challenges and sluggish domestic consumption, the Group will maintain a cautious approach, balancing risk management with strategic opportunities, adjusting auction strategies, prudently expanding pawn operations, leveraging collector networks for sales, and exploring new ventures in county-level digital economy financial services and AI/EV-related businesses to enhance financial performance - The global economic environment remains challenging, and the Group will maintain a cautious approach, balancing risk management with strategic opportunities[73](index=73&type=chunk) - The auction business will actively adjust its strategy, increase regional and multi-channel market promotion, and explore the use of advanced technologies (such as AI) to enhance the auction experience[74](index=74&type=chunk) - The pawn business will adopt a prudent lending strategy, ensure capital security, and strengthen its risk assessment framework[75](index=75&type=chunk) - The sales business will leverage its collector network to identify and sell in-demand artworks, generating profits through margin gains, agency service income, and auction commissions[76](index=76&type=chunk) - The Group plans to develop county-level digital economy financial services, build a secure digital closed-loop supply chain for fresh agricultural products, and explore new business cooperation opportunities related to AI and electric vehicles to enhance overall financial performance[77](index=77&type=chunk) [Other Information](index=23&type=section&id=Other%20Information) This section covers corporate governance, directors' information, securities transactions, and other statutory disclosures for the reporting period [Purchase, Sale or Redemption of Listed Securities](index=23&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20Listed%20Securities) During the review period, neither the Group nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities - During the review period, neither the Group nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[78](index=78&type=chunk) [Audit Committee](index=23&type=section&id=Audit%20Committee) The Audit Committee, comprising three independent non-executive directors, has reviewed the Group's unaudited condensed consolidated interim financial statements for the six months ended June 30, 2025, and raised no objections to the accounting treatments adopted - The Audit Committee, composed of three independent non-executive directors, has reviewed the Group's interim financial statements[79](index=79&type=chunk) - The Audit Committee had no disagreement with the accounting treatments adopted by the Company[79](index=79&type=chunk) [Rights to Acquire Securities](index=23&type=section&id=Rights%20to%20Acquire%20Securities) For the six months ended June 30, 2025, neither the Company nor its subsidiaries entered into any arrangements enabling directors to acquire rights to subscribe for the Company's securities or benefit from purchasing shares or debentures of the Company or any other corporation - For the six months ended June 30, 2025, neither the Company nor any of its subsidiaries entered into any arrangements that would enable directors to acquire rights to subscribe for securities of the Company or to obtain benefits by purchasing shares or debentures of the Company or any other corporation[80](index=80&type=chunk) [Dividends (reiteration)](index=23&type=section&id=Dividends%20%28reiteration%29) The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025, consistent with the same period in 2024 - The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025 (2024: nil)[81](index=81&type=chunk) [Directors' and Chief Executive's Information Updates](index=23&type=section&id=Directors%27%20and%20Chief%20Executive%27s%20Information%20Updates) Ms. Lin Xiaomei resigned as Chief Executive Officer on May 2, 2025, and Mr. Zou Shengyu was appointed as the new Chief Executive Officer on May 13, 2025 - Ms. Lin Xiaomei resigned as the Chief Executive Officer of the Company on May 2, 2025[82](index=82&type=chunk) - Mr. Zou Shengyu was appointed as the Chief Executive Officer of the Company on May 13, 2025[83](index=83&type=chunk) [Directors' Securities Transactions](index=24&type=section&id=Directors%27%20Securities%20Transactions) Following specific inquiries, all directors confirmed compliance with the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix C3 of the Listing Rules throughout the review period - All directors confirmed compliance with the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix C3 of the Listing Rules throughout the review period[84](index=84&type=chunk) [Compliance with Corporate Governance Code](index=24&type=section&id=Compliance%20with%20Corporate%20Governance%20Code) The Company has complied with all applicable code provisions of the Corporate Governance Code as set out in Appendix C1 of the Listing Rules throughout the review period - The Company has complied with all applicable code provisions of the Corporate Governance Code as set out in Appendix C1 of the Listing Rules throughout the review period[85](index=85&type=chunk) [Acknowledgement](index=24&type=section&id=Acknowledgement) The Board extends its sincere gratitude to the directors, management, and staff for their contributions and good performance during the review period - The Board extends its sincere gratitude to the directors, management, and staff for their contributions and good performance during the review period[86](index=86&type=chunk)

[Report Overview](index=1&type=section&id=I.%20Report%20Overview) [Financial Highlights](index=1&type=section&id=1.1%20Financial%20Highlights) In the first half of 2025, the company's revenue decreased by 21.0% to RMB 3.337 billion, loss for the period expanded to RMB 2.108 billion, loss attributable to owners of the Company was RMB 1.955 billion, and loss per share was RMB 0.45, with core net loss also slightly increasing Key Financial Data for H1 2025 (Consolidated Statement) | Metric | H1 2025 (RMB Thousand) | H1 2024 (RMB Thousand) | Change Rate | | :--- | :--- | :--- | :--- | | Revenue | 3,337,076 | 4,224,862 | -21.0% | | Gross Profit | 2,210,002 | 2,797,379 | -21.0% | | Gross Profit Margin | 66.2% | 66.2% | 0.0% | | Loss for the Period | (2,108,206) | (1,423,256) | +48.1% | | Loss Attributable to Owners of the Company | (1,954,786) | (1,336,774) | +46.2% | | Loss Attributable to Owners of the Company Margin | -58.6% | -31.6% | -27.0pp | | Core Net Loss Attributable to Owners of the Company | (393,939) | (383,784) | +2.6% | | Core Net Loss Attributable to Owners of the Company Margin | -11.8% | -9.1% | -2.7pp | | Loss Per Share (Basic and Diluted) | (0.45) Yuan | (0.31) Yuan | +45.2% | [Operating Highlights](index=2&type=section&id=1.2%20Operating%20Highlights) As of June 30, 2025, the company's total number of shopping malls and operating area both decreased, with the number of cities covered also declining, while the average occupancy rate for self-operated malls slightly increased and for managed malls decreased Operating Data for H1 2025 | Metric | As of June 30, 2025 | As of June 30, 2024 | Change | | :--- | :--- | :--- | :--- | | Number of Shopping Malls | 311 | 352 | -41 | | Shopping Mall Operating Area (sqm) | 19,361,762 | 21,201,448 | -1,839,686 | | Number of Cities Covered | 189 | 210 | -21 | | Number of Self-operated Shopping Malls | 76 | 85 | -9 | | Self-operated Shopping Mall Operating Area (sqm) | 7,490,428 | 7,885,050 | -394,622 | | Average Occupancy Rate of Self-operated Shopping Malls | 84.2% | 81.6% | +2.6pp | | Number of Managed Shopping Malls | 235 | 267 | -32 | | Managed Shopping Mall Operating Area (sqm) | 11,871,334 | 13,316,398 | -1,445,064 | | Average Occupancy Rate of Managed Shopping Malls | 81.3% | 82.8% | -1.5pp | [Condensed Consolidated Financial Statements](index=3&type=section&id=II.%20Condensed%20Consolidated%20Financial%20Statements) [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=3&type=section&id=2.1%20Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) During the reporting period, the Group's revenue and gross profit both decreased by 21.0% year-on-year, with loss for the period expanding from RMB 1.423 billion in H1 2024 to RMB 2.108 billion in H1 2025, primarily due to significant net fair value losses on investment properties and impairment losses under the expected credit loss model - Loss for the period increased from **RMB 1,423,256 thousand** in H1 2024 to **RMB 2,108,206 thousand** in H1 2025[8](index=8&type=chunk) - Net fair value loss on investment properties increased from **RMB 1,177,523 thousand** in H1 2024 to **RMB 2,274,001 thousand** in H1 2025[8](index=8&type=chunk) - Impairment losses under the expected credit loss model decreased from **RMB 474,770 thousand** in H1 2024 to **RMB 116,365 thousand** in H1 2025[8](index=8&type=chunk) [Condensed Consolidated Statement of Financial Position](index=5&type=section&id=2.2%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the Group's total assets slightly decreased, non-current assets totaled RMB 109.626 billion, net current liabilities were RMB 19.253 billion, and both the asset-liability ratio and net gearing ratio increased, indicating higher financial leverage - Total assets decreased from **RMB 118,635,369 thousand** as of December 31, 2024, to **RMB 117,644,278 thousand** as of June 30, 2025[10](index=10&type=chunk) - Net current liabilities were **(RMB 19,252,602 thousand)**, showing an improvement compared to **(RMB 20,596,046 thousand)** as of December 31, 2024, but still negative[11](index=11&type=chunk) - Equity attributable to owners of the Company decreased from **RMB 48,198,250 thousand** as of December 31, 2024, to **RMB 46,057,257 thousand** as of June 30, 2025[11](index=11&type=chunk) [Notes to the Condensed Consolidated Financial Statements](index=7&type=section&id=III.%20Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) [General Information](index=7&type=section&id=3.1%20General%20Information) Red Star Macalline was incorporated in China in 2011, with H-shares and A-shares listed in 2015 and 2018 respectively, Xiamen C&D is the parent company, and Xiamen Municipal People's Government State-owned Assets Supervision and Administration Commission is the ultimate controlling shareholder, with the Group primarily engaged in operating and managing home furnishing shopping malls and involved in the pan-home consumption sector - The Company was incorporated in China as a Sino-foreign joint stock limited company on January 6, 2011[12](index=12&type=chunk) - Xiamen C&D Corporation Limited is the Company's parent company, and Xiamen Municipal People's Government State-owned Assets Supervision and Administration Commission is the ultimate controlling shareholder[12](index=12&type=chunk) - The Group's principal activities are the operation and management of home furnishing shopping malls and participation in pan-home consumption[12](index=12&type=chunk) [Basis of Preparation](index=7&type=section&id=3.2%20Basis%20of%20Preparation) The condensed consolidated financial statements are prepared in accordance with IAS 34 and the Listing Rules; despite continuous losses and significant net current liabilities, management, through assessment and financing negotiations, considers the going concern basis appropriate [Measurement Basis](index=8&type=section&id=3.2.1%20Measurement%20Basis) The condensed consolidated financial statements are primarily prepared on a historical cost basis, with investment properties and certain financial instruments measured at fair value - The condensed consolidated financial statements are primarily prepared on a historical cost basis, with investment properties and certain financial instruments measured at fair value[16](index=16&type=chunk) [Going Concern](index=7&type=section&id=3.2.2%20Going%20Concern) The Group recorded a loss of RMB 2.108 billion and faced net current liabilities of RMB 19.253 billion in H1 2025; management has assessed and implemented measures, including utilizing bank credit lines and negotiating financing, deeming liquidity risk to be under control and the going concern basis appropriate - As of June 30, 2025, the Group recorded a loss of **RMB 2,108,206 thousand** and net current liabilities of **RMB 19,252,602 thousand**[14](index=14&type=chunk) - Management has assessed the going concern ability and believes that liquidity risk is under control through measures such as unused bank loan facilities and expected operating cash flows[14](index=14&type=chunk) [Significant Accounting Policies](index=8&type=section&id=3.3%20Significant%20Accounting%20Policies) The accounting policies adopted during the reporting period are consistent with the 2024 consolidated financial statements, and the first-time application of revised International Financial Reporting Standards had no significant impact on financial position or performance - Accounting policies are the same as those in the 2024 consolidated financial statements, except for additional policies arising from the application of revised IFRS accounting standards[16](index=16&type=chunk) - The amendment to IAS 21 "Lack of Exchangeability" had no significant impact on the financial position and performance for the current period[17](index=17&type=chunk) [Segment Information and Revenue](index=9&type=section&id=3.4%20Segment%20Information%20and%20Revenue) The Group's business is divided into four segments: self-operated/leased shopping malls, managed shopping malls, construction and decoration services, and others; in H1 2025, self-operated/leased shopping malls contributed the highest revenue, but all segments experienced year-on-year revenue decline, with all revenue and operating results derived from mainland China [Business Segments](index=9&type=section&id=3.4.1%20Business%20Segments) The Group's operating segments include self-operated/leased shopping malls, managed shopping malls, construction and decoration services, and others, with each segment's revenue and profit reported independently for resource allocation and performance evaluation - The Group's operating segments include self-operated/leased shopping malls, managed shopping malls, construction and decoration services, and others[18](index=18&type=chunk)[19](index=19&type=chunk) [Revenue Analysis](index=10&type=section&id=3.4.2%20Revenue%20Analysis) Total revenue for H1 2025 was RMB 3.337 billion, a 21.0% year-on-year decrease, with self-operated/leased shopping mall revenue down 15.6%, managed shopping mall revenue down 26.4%, and construction and decoration services and other revenues also declining Segment Revenue (H1 2025 vs H1 2024) | Segment | H1 2025 (RMB Thousand) | H1 2024 (RMB Thousand) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Self-operated/Leased Shopping Malls | 2,450,706 | 2,903,166 | -15.6% | | Managed Shopping Malls | 609,371 | 827,466 | -26.4% | | Construction and Decoration Services | 103,613 | 212,098 | -51.1% | | Others | 173,386 | 282,132 | -38.6% | | **Total** | **3,337,076** | **4,224,862** | **-21.0%** | - Revenue from contracts with customers was **RMB 861,311 thousand**, and rental and related income was **RMB 2,475,765 thousand**[23](index=23&type=chunk) [Geographical Information](index=13&type=section&id=3.4.3%20Geographical%20Information) All of the Group's revenue and operating results are generated from mainland China, with non-current assets primarily located in mainland China and a small portion in the Cayman Islands - All of the Group's revenue and operating results are generated from China[26](index=26&type=chunk) - Non-current assets are primarily located in mainland China (**RMB 103,615,597 thousand**), with a small portion in the Cayman Islands (**RMB 86,091 thousand**)[29](index=29&type=chunk) [Other Income and Gains/Losses](index=14&type=section&id=3.5%20Other%20Income%20and%20Gains/Losses) Other income for H1 2025 was RMB 72.575 million, a 27.38% year-on-year decrease, mainly due to reduced interest income and government grants; net other gains/losses turned from a loss to a profit of RMB 9.011 million, primarily benefiting from increased gains on disposal of property, plant and equipment and reduced fair value losses on financial instruments - Other income decreased from **RMB 99,943 thousand** in H1 2024 to **RMB 72,575 thousand** in H1 2025[30](index=30&type=chunk) - Net other gains/losses turned from **(RMB 273,992 thousand)** in H1 2024 to **RMB 9,011 thousand** in H1 2025[31](index=31&type=chunk) - Fair value losses on financial instruments at fair value through profit or loss decreased from **RMB 85,531 thousand** to **RMB 53,849 thousand**[31](index=31&type=chunk) [Finance Costs](index=15&type=section&id=3.6%20Finance%20Costs) Finance costs for H1 2025 were RMB 1.095 billion, a 15.8% year-on-year decrease, primarily due to reduced interest on bank and other borrowings, lease liabilities, and bonds - Finance costs decreased from **RMB 1,300,450 thousand** in H1 2024 to **RMB 1,095,295 thousand** in H1 2025, a **15.8%** decrease[32](index=32&type=chunk)[53](index=53&type=chunk) - Interest on bank and other borrowings decreased by **RMB 166,174 thousand**[32](index=32&type=chunk) [Income Tax and Loss for the Period](index=16&type=section&id=3.7%20Income%20Tax%20and%20Loss%20for%20the%20Period) Income tax for H1 2025 turned from a credit in the prior year to an expense of RMB 37.55 million, mainly due to increased deferred income tax expense; loss for the period included staff costs, depreciation and amortization, and advertising and promotion expenses - Income tax turned from a credit of **RMB 113,193 thousand** in H1 2024 to an expense of **RMB 37,550 thousand** in H1 2025[33](index=33&type=chunk)[54](index=54&type=chunk) - Total staff costs were **RMB 858,595 thousand**, a **18.8%** year-on-year decrease[33](index=33&type=chunk) - Total rental income from investment properties was **(RMB 2,475,765 thousand)**, a **15.1%** year-on-year decrease[33](index=33&type=chunk) [Dividends](index=17&type=section&id=3.8%20Dividends) The Board of Directors resolved not to declare an interim dividend for H1 2025 - The Board of Directors resolved not to declare an interim dividend for the six months ended June 30, 2025[34](index=34&type=chunk) [Loss Per Share](index=17&type=section&id=3.9%20Loss%20Per%20Share) Basic and diluted loss per share for H1 2025 expanded to RMB 0.45, compared to RMB 0.31 in H1 2024, primarily due to the increased net loss attributable to owners of the Company - Basic and diluted loss per share increased from **(RMB 0.31)** in H1 2024 to **(RMB 0.45)** in H1 2025[36](index=36&type=chunk)[37](index=37&type=chunk)[57](index=57&type=chunk) - Net loss for the period attributable to owners of the Company was **(RMB 1,954,786 thousand)**[37](index=37&type=chunk) [Investment Properties](index=18&type=section&id=3.10%20Investment%20Properties) As of June 30, 2025, the fair value of investment properties was RMB 95.609 billion, a slight increase from the end of 2024, but the reporting period incurred a fair value change loss of RMB 2.274 billion, mainly due to increased concessions to support tenant operations - The fair value of investment properties as of June 30, 2025, was **RMB 95,609,200 thousand**[37](index=37&type=chunk) - Fair value change loss on investment properties for the reporting period was **(RMB 2,274,001 thousand)**[37](index=37&type=chunk)[59](index=59&type=chunk) - New properties added amounted to **RMB 2,454.7 million**, while a fair value change loss of **RMB 2,274.0 million** was incurred, mainly due to increased concessions to support tenant operations[59](index=59&type=chunk) [Trade and Other Receivables/Payables](index=19&type=section&id=3.11%20Trade%20and%20Other%20Receivables/Payables) As of the end of the reporting period, the carrying amount of trade receivables was RMB 556.76 million, a decrease of RMB 28.4 million from the end of 2024, with impairment provisions of RMB 1.588 billion; trade payables were RMB 1.283 billion, a decrease from the end of 2024 - The carrying amount of trade receivables was **RMB 556,764 thousand**, a decrease from **RMB 585,204 thousand** as of the end of 2024[38](index=38&type=chunk)[58](index=58&type=chunk) - Impairment provisions for expected credit losses of **RMB 1,588,447 thousand** were made[38](index=38&type=chunk) - Trade payables were **RMB 1,283,357 thousand**, a decrease from **RMB 1,402,974 thousand** as of the end of 2024[39](index=39&type=chunk) [Bank and Other Borrowings](index=20&type=section&id=3.12%20Bank%20and%20Other%20Borrowings) As of June 30, 2025, total bank and other borrowings amounted to RMB 30.174 billion, with secured borrowings accounting for the vast majority; the borrowing structure was primarily fixed-rate, and floating-rate borrowings were based on the People's Bank of China benchmark interest rate - Total bank and other borrowings amounted to **RMB 30,174,395 thousand**, of which **RMB 24,039,281 thousand** were secured borrowings[39](index=39&type=chunk) - Fixed-rate borrowings accounted for **53.3%** (**RMB 16,095,038 thousand**), and floating-rate borrowings accounted for **46.7%** (**RMB 14,079,357 thousand**)[39](index=39&type=chunk) - Borrowing repayment periods are distributed as follows: **RMB 5.372 billion** within 1 year, **RMB 7.748 billion** in 1-2 years, **RMB 12.214 billion** in 2-5 years, and **RMB 4.841 billion** over 5 years[40](index=40&type=chunk) [Share Capital](index=21&type=section&id=3.13%20Share%20Capital) As of June 30, 2025, the company's total issued share capital was RMB 4.355 billion, comprising H-shares and A-shares, with a par value of RMB 1 per share, and no changes during the reporting period - Total issued share capital was **RMB 4,354,733 thousand**, consisting of **741,286 thousand** H-shares and **3,613,447 thousand** A-shares[42](index=42&type=chunk) [Acquisition of Subsidiaries](index=22&type=section&id=3.14%20Acquisition%20of%20Subsidiaries) During the reporting period, the Group acquired 100% equity of Yantai Red Star for RMB 980 million in cash and obtained 100% equity of Tangshan Fengnan Property Project Company by disposing of receivables - On May 7, 2025, the Group acquired 100% equity of Yantai Red Star for a cash consideration of **RMB 980,000 thousand**[45](index=45&type=chunk) - On April 16, 2025, the Group acquired 100% equity of Tangshan Fengnan Property Project Company for a consideration of disposed receivables with a fair value of **RMB 30,000 thousand**[45](index=45&type=chunk) [Financial Review](index=23&type=section&id=IV.%20Financial%20Review) [Revenue](index=23&type=section&id=4.1%20Revenue) Total revenue for the reporting period was RMB 3.337 billion, a 21.0% year-on-year decrease; self-operated/leased shopping mall revenue decreased by 15.6% (due to increased concessions to support tenants), managed shopping mall revenue decreased by 26.4% (due to fewer shopping malls), and construction and decoration services and other revenues also declined - Total revenue decreased by **21.0%** to **RMB 3,337.1 million** year-on-year[46](index=46&type=chunk) - Rental and related income from self-operated shopping malls decreased by **15.6%**, mainly due to increased concessions to stabilize and retain tenants[46](index=46&type=chunk) - Managed shopping mall revenue decreased by **26.4%**, primarily affected by a reduction in the number of managed shopping malls[46](index=46&type=chunk) [Gross Profit and Gross Profit Margin](index=23&type=section&id=4.2%20Gross%20Profit%20and%20Gross%20Profit%20Margin) Gross profit for the reporting period was RMB 2.210 billion, a 21.0% year-on-year decrease, consistent with the revenue decline, while the overall gross profit margin remained at 66.2%, with fluctuations across business segments and a significant drop in construction and decoration services gross profit margin - Gross profit decreased by **21.0%** to **RMB 2,210.0 million** year-on-year[49](index=49&type=chunk) - The overall gross profit margin was **66.2%**, consistent with the same period last year[49](index=49&type=chunk) - Gross profit margin for construction and decoration services significantly decreased from **20.9%** to **5.4%**[50](index=50&type=chunk) [Selling and Distribution Expenses](index=24&type=section&id=4.3%20Selling%20and%20Distribution%20Expenses) Selling and distribution expenses were RMB 366.3 million, a 20.9% year-on-year decrease, accounting for 11.0% of revenue, mainly due to reduced advertising and promotion, energy and maintenance, and staff costs - Selling and distribution expenses decreased by **20.9%** to **RMB 366.3 million** year-on-year[51](index=51&type=chunk) - This was primarily due to decreases in advertising and promotion expenses, energy and maintenance expenses, and staff costs[51](index=51&type=chunk) [Administrative Expenses](index=24&type=section&id=4.4%20Administrative%20Expenses) Administrative expenses were RMB 596.2 million, a 14.9% year-on-year decrease, accounting for 17.9% of revenue, mainly due to reduced staff costs and office and administrative expenses - Administrative expenses decreased by **14.9%** to **RMB 596.2 million** year-on-year[52](index=52&type=chunk) - This was primarily due to decreases in staff costs and office and administrative expenses[52](index=52&type=chunk) [Finance Costs](index=24&type=section&id=4.5%20Finance%20Costs) Finance costs were RMB 1.095 billion, a 15.8% year-on-year decrease, primarily benefiting from a further reduction in financing costs - Finance costs decreased by **15.8%** to **RMB 1,095.3 million** year-on-year[53](index=53&type=chunk) - This was primarily due to a further reduction in related financing costs[53](index=53&type=chunk) [Income Tax](index=25&type=section&id=4.6%20Income%20Tax) Income tax turned from a credit in the same period of 2024 to an expense of RMB 37.6 million, a 133.2% increase year-on-year, mainly due to increased deferred income tax expense - Income tax expense was **RMB 37.6 million**, an increase of **133.2%** compared to an income tax credit of **RMB 113.2 million** in the same period of 2024[54](index=54&type=chunk) - This was primarily due to an increase in deferred income tax expense during the reporting period[54](index=54&type=chunk) [Total Loss for the Period Attributable to Owners of the Company, Core Net Loss Attributable to Owners of the Company, and Loss Per Share](index=25&type=section&id=4.7%20Total%20Loss%20for%20the%20Period%20Attributable%20to%20Owners%20of%20the%20Company,%20Core%20Net%20Loss%20Attributable%20to%20Owners%20of%20the%20Company,%20and%20Loss%20Per%20Share) Total loss for the period attributable to owners of the Company was RMB 1.955 billion, a 46.2% year-on-year increase; core net loss was RMB 394 million, a 2.6% year-on-year increase; and loss per share expanded to RMB 0.45 Loss Attributable to Owners of the Company (H1 2025 vs H1 2024) | Metric | 2025 (RMB Thousand) | 2024 (RMB Thousand) | Increase/Decrease | | :--- | :--- | :--- | :--- | | Total Loss for the Period Attributable to Owners of the Company | (1,954,786) | (1,336,774) | 46.2% | | Core Net Loss Attributable to Owners of the Company | (393,939) | (383,784) | 2.6% | | Loss Per Share | (0.45) Yuan | (0.31) Yuan | - | [Trade Receivables](index=25&type=section&id=4.8%20Trade%20Receivables) As of the end of the reporting period, the carrying amount of trade receivables was RMB 556.8 million, a decrease of RMB 28.4 million from the end of 2024, with impairment provisions of RMB 1.588 billion - The carrying amount of trade receivables was **RMB 556.8 million**, a decrease of **RMB 28.4 million** compared to the end of 2024[58](index=58&type=chunk) - Impairment provisions for bad debts amounted to **RMB 1,588.4 million**[58](index=58&type=chunk) [Investment Properties and Fair Value Change Loss](index=26&type=section&id=4.9%20Investment%20Properties%20and%20Fair%20Value%20Change%20Loss) As of the end of the reporting period, the carrying amount of investment properties was RMB 95.609 billion, an increase of RMB 505 million from the end of 2024; new properties added during the period amounted to RMB 2.455 billion, but a fair value change loss of RMB 2.274 billion was incurred, mainly due to increased concessions to support tenant operations - The carrying amount of investment properties was **RMB 95,609.2 million**, an increase of **RMB 505.0 million** compared to the end of 2024[59](index=59&type=chunk) - New properties added during the reporting period amounted to **RMB 2,454.7 million**, while a fair value change loss of **RMB 2,274.0 million** was incurred[59](index=59&type=chunk) - The fair value change loss was mainly due to increased concessions to support tenant operations[59](index=59&type=chunk) [Capital Expenditure](index=26&type=section&id=4.10%20Capital%20Expenditure) Capital expenditure for the reporting period was RMB 137.9 million, a 29.2% year-on-year decrease, primarily including acquisition and construction development expenditures for investment properties, reflecting the company's effective control over capital expenditure - Capital expenditure was **RMB 137.9 million**, a **29.2%** year-on-year decrease[60](index=60&type=chunk) - This primarily included expenditures for the acquisition and construction development of investment properties[60](index=60&type=chunk) [Bank Balances and Cash and Cash Flows](index=26&type=section&id=4.11%20Bank%20Balances%20and%20Cash%20and%20Cash%20Flows) As of the end of the reporting period, cash and cash equivalents were RMB 3.222 billion, an increase of RMB 68 million from the end of 2024; operating cash flow turned from a net outflow to a net inflow of RMB 201.9 million, investing cash outflow significantly increased to RMB 946.4 million, and financing cash inflow was RMB 814.6 million - Cash and cash equivalents were **RMB 3,222.0 million**, an increase of **RMB 68.0 million** compared to the end of 2024[61](index=61&type=chunk) - Net cash inflow from operating activities was **RMB 201.9 million**, an increase of **RMB 1,023.2 million** compared to a net outflow in the same period of 2024[63](index=63&type=chunk)[64](index=64&type=chunk) - Net cash outflow from investing activities was **RMB 946.4 million**, an increase of **RMB 833.3 million** compared to a net outflow in the same period of 2024, mainly due to increased cash paid for the acquisition of subsidiaries[63](index=63&type=chunk)[64](index=64&type=chunk) - Net cash inflow from financing activities was **RMB 814.6 million**, an increase of **RMB 33.6 million** compared to the same period of 2024, mainly due to reduced cash paid for interest repayment[63](index=63&type=chunk)[64](index=64&type=chunk) [Key Gearing Ratios](index=27&type=section&id=4.12%20Key%20Gearing%20Ratios) As of the end of the reporting period, the asset-liability ratio was 58.3% and the net gearing ratio was 62.7%, both increasing from the end of 2024, indicating an increased level of financial leverage Key Gearing Ratios (As of June 30, 2025 vs December 31, 2024) | Metric | As of June 30, 2025 | As of December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Asset-Liability Ratio | 58.3% | 56.8% | +1.5pp | | Net Gearing Ratio | 62.7% | 54.8% | +7.9pp | - Investment properties and fixed assets totaling **RMB 82,618.9 million** were mortgaged/pledged to obtain borrowings of **RMB 31,950.9 million**[66](index=66&type=chunk) [Contingent Liabilities](index=28&type=section&id=4.13%20Contingent%20Liabilities) There were no contingent liabilities at the end of the reporting period - There were no contingent liabilities at the end of this reporting period[68](index=68&type=chunk) [Financial Resources](index=28&type=section&id=4.14%20Financial%20Resources) The Group's future funding will primarily come from operating cash flows, bank borrowings, bond issuance, and equity contributions, and it will continue to monitor liquidity needs and comply with loan covenants - Future funding will primarily come from operating cash flows, bank borrowings, bond issuance, and equity contributions[69](index=69&type=chunk) - The Group will continue to regularly monitor liquidity needs, comply with loan covenants, and ensure sufficient cash reserves and credit lines are maintained[69](index=69&type=chunk) [Significant Acquisitions and Disposals of Subsidiaries, Associates, and Joint Ventures](index=28&type=section&id=4.15%20Significant%20Acquisitions%20and%20Disposals%20of%20Subsidiaries,%20Associates,%20and%20Joint%20Ventures) The report claims the company had no significant acquisitions and disposals during the reporting period, which contradicts the acquisitions of Yantai Red Star and Tangshan Fengnan Property Project disclosed in the notes to the financial statements - During the reporting period, the Company claimed no significant acquisitions and disposals of subsidiaries, associates, and joint ventures[70](index=70&type=chunk) - **Note:** This statement contradicts the acquisitions of Yantai Red Star and Tangshan Fengnan Property Project disclosed in Note 18 (Acquisition of Subsidiaries, chunk 45) to the financial statements[45](index=45&type=chunk)[70](index=70&type=chunk) [Capital Commitments](index=28&type=section&id=4.16%20Capital%20Commitments) As of the end of the reporting period, capital expenditure for contracted but unrecognised acquisitions and development of investment properties amounted to RMB 720.5 million, with additional investment commitments of RMB 69.2 million - Capital expenditure for contracted but unrecognised acquisitions and development of investment properties amounted to **RMB 720.5 million**[71](index=71&type=chunk) - Investment commitments for joint development of investment properties with partners amounted to **RMB 69.2 million**[71](index=71&type=chunk) [Foreign Exchange Risk](index=28&type=section&id=4.17%20Foreign%20Exchange%20Risk) The Group faces foreign exchange risk from USD bonds and a small amount of foreign currency deposits; management has implemented risk control measures such as forward contracts and currency swaps, and believes foreign exchange risk will not have a significant impact on operating performance - Foreign exchange risk primarily arises from USD bonds and a small amount of foreign currency deposits[72](index=72&type=chunk) - Management has implemented risk control measures such as forward contracts and currency swaps, and believes foreign exchange risk will not have a significant impact on operating performance[72](index=72&type=chunk) [Significant Investments](index=29&type=section&id=4.18%20Significant%20Investments) There were no significant investments during the reporting period, nor any plans for significant investments as of the announcement date - The Group had no significant investments during the reporting period, nor any plans for significant investments as of the announcement date[73](index=73&type=chunk) [Business Review and Outlook](index=29&type=section&id=V.%20Business%20Review%20and%20Outlook) [Human Resources](index=29&type=section&id=5.1%20Human%20Resources) As of the end of the reporting period, the Group's total number of employees decreased to 10,037, with total remuneration expenses of RMB 859 million, and the company continues to provide training to enhance employee capabilities - As of the end of the reporting period, the Group employed **10,037** employees, a decrease of **3,108** from the same period in 2024[74](index=74&type=chunk) - Total remuneration expenses for the reporting period amounted to **RMB 858.6 million**[74](index=74&type=chunk) [Industry Overview and Business Strategies](index=29&type=section&id=5.2%20Industry%20Overview%20and%20Business%20Strategies) The home furnishing and building materials industry faces challenges from supply fluctuations and demand decline; the company actively responds by offering rent reductions, adjusting strategic layouts, introducing quality brands, advancing the "3+Star Ecosystem" strategy, digital intelligence upgrades, and integrated online-offline marketing, while also responding to national "trade-in" policies [Industry Challenges and Company Response](index=29&type=section&id=5.2.1%20Industry%20Challenges%20and%20Company%20Response) The home furnishing and building materials industry is affected by supply fluctuations and demand decline; the company offers rent reductions to support tenants and actively adjusts its strategy to attract quality brands - The home furnishing and building materials industry faces a dual challenge of supply fluctuations and demand decline due to multiple reasons[74](index=74&type=chunk) - The company provided rent and management fee reductions to some tenants to support the stable development of small and medium-sized enterprises[74](index=74&type=chunk) - The company actively adjusted its strategy and mall category layout to attract quality brands such as designers, home decoration companies, and new energy vehicles[74](index=74&type=chunk) [Operating Data](index=29&type=section&id=5.2.2%20Operating%20Data) As of June 30, 2025, the company operated 76 self-operated shopping malls (average occupancy rate 84.2%) and 235 managed shopping malls (average occupancy rate 81.3%), covering 189 cities with a total operating area of 19.36 million square meters - Operates **76** self-operated shopping malls with an average occupancy rate of **84.2%**[74](index=74&type=chunk) - Operates **235** managed shopping malls with an average occupancy rate of **81.3%**[74](index=74&type=chunk) - Covers **189** cities nationwide, with a total shopping mall operating area of **19,361,762 square meters**[74](index=74&type=chunk) [Strategic Ecosystem and New Business Development](index=30&type=section&id=5.2.3%20Strategic%20Ecosystem%20and%20New%20Business%20Development) The company is steadily advancing its "3+Star Ecosystem" strategy, centered on "home" and integrating home furnishings, home appliances, and home decoration; high-end appliance operating area accounts for 9.4%, with plans to build 40 high-end appliance ecosystem benchmarks; M+ Design Centers have reached 731,000 square meters, collaborating with nearly 5,000 designers; new energy vehicle business has entered 50 malls, with operating area increasing by 97,000 square meters; actively responding to the "trade-in" policy, achieving sales of RMB 7.31 billion in H1 - Steadily advancing the "3+Star Ecosystem" strategy, centered on "home," extending from home furnishings to home appliances and home decoration[75](index=75&type=chunk) - High-end appliance operating area accounts for **9.4%**, with plans to build **40** high-end appliance ecosystem benchmarks in the next three years[75](index=75&type=chunk) - M+ Design Centers have been developed to **731,000 square meters**, introducing over **1,000** design studios and collaborating with nearly **5,000** excellent designers[75](index=75&type=chunk) - New energy vehicle business has entered **50** shopping malls, covering **44** cities, with an operating area of **261,000 square meters**, an increase of **97,000 square meters** from the end of 2024[75](index=75&type=chunk) - Actively responding to the national "trade-in" policy, with **743,000** trade-in orders and sales of **RMB 7.31 billion** across national malls in H1[75](index=75&type=chunk) [Digital Intelligence Upgrade and Marketing Operations](index=30&type=section&id=5.2.4%20Digital%20Intelligence%20Upgrade%20and%20Marketing%20Operations) The company focuses on four areas of digital intelligence upgrade: strategic business support, process efficiency, model-driven, and intelligent applications, to enhance business development and management efficiency; in marketing, it deeply integrates online and offline, building a "online seeding - offline experience" closed loop, and implementing "trade-in," "ten thousand-plate service plan," and "home delivery service system" initiatives - Digital intelligence upgrade focuses on four key areas: "strategic business support," "process efficiency," "model-driven," and "intelligent applications"[76](index=76&type=chunk) - In marketing operations, online and offline are deeply integrated, building a "online seeding - offline experience" closed loop through platforms like Douyin, Xiaohongshu, and Meituan[76](index=76&type=chunk) - Offline, the company is solidifying "trade-in," launching the "ten thousand-plate service plan," and co-building a home delivery service system[76](index=76&type=chunk) [Outlook and Prospects](index=31&type=section&id=5.3%20Outlook%20and%20Prospects) The Group will continue to adhere to the "market-oriented operation, mall-based management" model, consolidate its market leadership and brand image, aiming to become China's leading and most professional "omnichannel platform service provider for the home decoration and furniture industry"; future development plans include light-asset transformation, deep expansion into the home decoration sector, new retail development, strengthened financial management, and improved corporate governance [Corporate Vision and Goals](index=31&type=section&id=5.3.1%20Corporate%20Vision%20and%20Goals) The Group is committed to building warm and harmonious homes, enhancing consumption and home living quality, and aims to become China's leading and most professional "omnichannel platform service provider for the home decoration and furniture industry" - The corporate vision is to "build warm and harmonious homes and enhance consumption and home living quality"[77](index=77&type=chunk) - The development goal is to become China's leading and most professional "omnichannel platform service provider for the home decoration and furniture industry"[77](index=77&type=chunk) [Future Development Plans](index=31&type=section&id=5.3.2%20Future%20Development%20Plans) Future development plans include adhering to a "light-asset, heavy-operation" transformation, deeply expanding into the home decoration sector, promoting new retail, strengthening financial management, and continuously improving corporate governance - Adhere to the "light-asset, heavy-operation" transformation to further solidify market leadership[78](index=78&type=chunk) - Deeply expand into the home decoration sector to establish consumer mindshare[78](index=78&type=chunk) - Promote the development of new retail to empower mall operations[78](index=78&type=chunk) - Strengthen financial management to achieve high-quality development[78](index=78&type=chunk) - Continuously improve corporate governance, standardize operations, and fulfill social responsibilities[78](index=78&type=chunk) [Corporate Governance and Other Information](index=32&type=section&id=VI.%20Corporate%20Governance%20and%20Other%20Information) [Corporate Governance](index=32&type=section&id=6.1%20Corporate%20Governance) The company is committed to maintaining high standards of corporate governance, having adopted and complied with the Hong Kong Stock Exchange's Corporate Governance Code and the Model Code for Securities Transactions by Directors of Listed Issuers [Compliance with the Corporate Governance Code](index=32&type=section&id=6.1.1%20Compliance%20with%20the%20Corporate%20Governance%20Code) The company has adopted and complied with the principles and code provisions of the Hong Kong Stock Exchange's Corporate Governance Code - The Company has adopted and complied with the principles and code provisions of the Hong Kong Stock Exchange's Corporate Governance Code[80](index=80&type=chunk)[81](index=81&type=chunk) [Compliance with the Model Code](index=32&type=section&id=6.1.2%20Compliance%20with%20the%20Model%20Code) The company has adopted and complied with the Model Code for Securities Transactions by Directors of Listed Issuers, with all directors and supervisors confirming compliance during the reporting period - The Company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers, and all directors and supervisors confirmed compliance[82](index=82&type=chunk) [Securities Related Matters](index=33&type=section&id=6.2%20Securities%20Related%20Matters) During the reporting period, the company did not purchase, sell, or redeem listed securities but held A-share treasury stock for employee incentives; no interim dividend was declared; detailed disclosures were made on the use of proceeds from A-share public and non-public offerings, with some projects concluded or terminated; shareholder and senior management share reduction plans were disclosed, as well as the proposed judicial enforcement of shares held by a shareholder holding 5% or more [Purchase, Sale or Redemption of Listed Securities](index=33&type=section&id=6.2.1%20Purchase,%20Sale%20or%20Redemption%20of%20Listed%20Securities) During the six months ended June 30, 2025, the Group did not purchase, sell, or redeem any of the company's listed securities; as of June 30, 2025, the company held 1,044,800 A-share treasury shares, to be used for employee stock ownership or equity incentive plans - The Group did not purchase, sell, or redeem any of the Company's listed securities during the six months ended June 30, 2025[83](index=83&type=chunk) - The Company holds **1,044,800** A-share treasury shares, which will be entirely used for employee stock ownership plans or equity incentive plans[83](index=83&type=chunk) [Interim Dividend](index=33&type=section&id=6.2.2%20Interim%20Dividend) The Board of Directors did not recommend the payment of a dividend for the six months ended June 30, 2025 - The Board of Directors did not recommend the payment of a dividend for the six months ended June 30, 2025[84](index=84&type=chunk) [Use of Proceeds from A-share Public Offering](index=33&type=section&id=6.2.3%20Use%20of%20Proceeds%20from%20A-share%20Public%20Offering) The net proceeds from the 2018 A-share public offering amounted to RMB 3.050 billion and were used as disclosed; several home furnishing mall construction projects have been fully invested, the Changsha Jinxia Mall project has been concluded, the new generation smart home furnishing mall project has been terminated, and the remaining funds have been permanently used to supplement working capital - Net proceeds from the A-share public offering amounted to **RMB 3,050,007,849.63**[85](index=85&type=chunk) - Several home furnishing mall construction projects have been fully invested[88](index=88&type=chunk) - The Changsha Jinxia Mall project has been concluded, the new generation smart home furnishing mall project has been terminated, and the remaining proceeds have been permanently used to supplement working capital[89](index=89&type=chunk) [Use of Proceeds from A-share Non-public Offering](index=36&type=section&id=6.2.4%20Use%20of%20Proceeds%20from%20A-share%20Non-public%20Offering) The net proceeds from the 2021 A-share non-public offering amounted to RMB 3.678 billion and were used as disclosed; projects such as Tmall "Home Decoration City Station" have been terminated, with proceeds fully utilized or permanently used to supplement working capital; the Foshan Lecong Mall project has been suspended, and the Nanning Dingqiu Mall project has been postponed - Net proceeds from the A-share non-public offering amounted to **RMB 3,678,363,799.29**[90](index=90&type=chunk)[92](index=92&type=chunk) - The Tmall "Home Decoration City Station" project, 3D Design Cloud Platform construction project, and New Generation Home Decoration Platform System construction project have been terminated, with remaining proceeds permanently used to supplement working capital[94](index=94&type=chunk) - The Foshan Lecong Mall project has been suspended, and the Nanning Dingqiu Mall project has been postponed until December 2026[93](index=93&type=chunk) [Share Reduction Plan by Shareholders and Senior Management](index=40&type=section&id=6.2.5%20Share%20Reduction%20Plan%20by%20Shareholders%20and%20Senior%20Management) The company disclosed on July 26, 2025, the share reduction plans of shareholder Hangzhou Haoyue Enterprise Management Co., Ltd. and Board Secretary Ms. Qiu Zhe, with the reduction period from September 1, 2025, to November 30, 2025 - Shareholder Hangzhou Haoyue Enterprise Management Co., Ltd. and Board Secretary Ms. Qiu Zhe disclosed their share reduction plans[99](index=99&type=chunk) - The share reduction period is from September 1, 2025, to November 30, 2025[99](index=99&type=chunk) [Proposed Judicial Enforcement of Shares Held by Shareholders Holding 5% or More](index=40&type=section&id=6.2.6%20Proposed%20Judicial%20Enforcement%20of%20Shares%20Held%20by%20Shareholders%20Holding%205%25%20or%20More) The company received a court enforcement ruling stating that 43,023,000 A-shares held by Changzhou Meikai Information Technology Co., Ltd., a shareholder holding 5% or more, will be sold at market price through centralized bidding, with proceeds transferred to the court account - **43,023,000** A-shares held by Changzhou Meikai Information Technology Co., Ltd., a shareholder holding **5%** or more, are subject to proposed judicial enforcement[100](index=100&type=chunk) - The shares will be sold at market price through centralized bidding, and the proceeds will be transferred to the court account[100](index=100&type=chunk) [Changes in Board of Directors and Management](index=39&type=section&id=6.3%20Changes%20in%20Board%20of%20Directors%20and%20Management) Subsequent to the reporting period, the company's Board of Directors underwent several changes, including the appointment of Ms. Ye Yanliu as a non-executive director, Mr. Che Jianxing's resignation as general manager while remaining an executive director, Mr. Shi Yaofeng's appointment as the new general manager, Mr. Li Jianhong's resignation as a non-executive director, the appointment of Mr. Xu Guofeng as a non-executive director, and the election of Mr. Zheng Jianjie as an employee director - Ms. Ye Yanliu was appointed as a non-executive director of the Fifth Board of Directors[95](index=95&type=chunk) - Mr. Che Jianxing resigned as general manager but remains an executive director[95](index=95&type=chunk) - Mr. Shi Yaofeng was appointed as the company's general manager[95](index=95&type=chunk) - Mr. Li Jianhong resigned as a non-executive director, and Mr. Xu Guofeng was appointed as a non-executive director[96](index=96&type=chunk) - Mr. Zheng Jianjie was elected as an employee director of the Fifth Board of Directors[96](index=96&type=chunk) [Abolition of Supervisory Committee and Amendments to Articles of Association](index=40&type=section&id=6.4%20Abolition%20of%20Supervisory%20Committee%20and%20Amendments%20to%20Articles%20of%20Association) The company has approved the abolition of the Supervisory Committee, with its functions to be exercised by the Board's Audit Committee, and has repealed related regulations while amending the Articles of Association and other governance documents - The company plans to abolish the Supervisory Committee, with its functions to be exercised by the Board's Audit Committee[98](index=98&type=chunk) - The "Rules of Procedure for the Supervisory Committee of Red Star Macalline Group Corporation Ltd." and other related Supervisory Committee regulations have been repealed, and the "Articles of Association" and other governance documents have been amended[98](index=98&type=chunk) [Review of Interim Results](index=40&type=section&id=6.5%20Review%20of%20Interim%20Results) The Board's Audit Committee has reviewed the interim results announcement and condensed consolidated financial statements for the six months ended June 30, 2025 - The Board's Audit Committee has reviewed the interim results announcement and condensed consolidated financial statements for the six months ended June 30, 2025[101](index=101&type=chunk) [Publication of Announcement](index=41&type=section&id=6.6%20Publication%20of%20Announcement) This announcement has been published on the Hong Kong Stock Exchange website and the company's website, and the 2025 interim report will be dispatched to shareholders and published on relevant websites in due course - This announcement has been published on the Hong Kong Stock Exchange website and the Company's website[102](index=102&type=chunk) - The 2025 interim report will be dispatched to shareholders and published on relevant websites in due course[102](index=102&type=chunk) [Board Members](index=41&type=section&id=6.7%20Board%20Members) As of the announcement date, the company's Board of Directors includes executive directors, non-executive directors, independent non-executive directors, and employee directors - A list of executive directors, non-executive directors, independent non-executive directors, and employee directors as of the announcement date is provided[103](index=103&type=chunk)

[Company Information and Financial Summary](index=1&type=section&id=Company%20Information%20and%20Financial%20Summary) This section provides an overview of the company and its key financial performance during the reporting period [Company Overview](index=1&type=section&id=Company%20Overview) China Greenland Broad Greenstate Group Company Limited (Stock Code: 1253) announced its unaudited interim results for the six months ended June 30, 2025 - Company Name: China Greenland Broad Greenstate Group Company Limited[2](index=2&type=chunk) - Stock Code: **1253**[2](index=2&type=chunk) - Reporting Period: Six months ended June 30, 2025[2](index=2&type=chunk)[3](index=3&type=chunk) [Financial Summary](index=1&type=section&id=Financial%20Summary) During the reporting period, the company's revenue increased by 102.0% and gross profit by 62.7%, but net loss attributable to owners of the parent significantly widened to RMB 29,551 thousand, with gross margin decreasing by 9.8 percentage points Financial Summary for the Six Months Ended June 30 | Metric | 2025 (RMB '000) | 2024 (RMB '000) | Change (RMB '000) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Revenue | 7,154 | 3,532 | 3,622 | 102.0% | | Gross Profit | 2,863 | 1,760 | 1,103 | 62.7% | | Net Loss Attributable to Owners of the Parent | (29,551) | (5,058) | (24,493) | 484.2% | | Gross Margin | 40.0% | 49.8% | (9.8)% | - | [Financial Statements](index=2&type=section&id=Financial%20Statements) This section presents the company's interim condensed consolidated financial statements, including income, comprehensive income, and financial position [Interim Condensed Consolidated Statement of Profit or Loss](index=2&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss) For the six months ended June 30, 2025, the company's revenue increased to RMB 7,154 thousand, but loss for the period expanded from RMB 4,066 thousand in 2024 to RMB 29,374 thousand, mainly due to significantly increased finance costs and enlarged share of loss of a joint venture Key Data from Condensed Consolidated Statement of Profit or Loss | Metric | 2025 (RMB '000) | 2024 (RMB '000) | Change (RMB '000) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Revenue | 7,154 | 3,532 | 3,622 | 102.5% | | Cost of Sales | (4,291) | (1,772) | (2,519) | 142.1% | | Gross Profit | 2,863 | 1,760 | 1,103 | 62.7% | | Other Income | 13,816 | 22,461 | (8,645) | (38.5)% | | Administrative Expenses | (11,410) | (12,282) | 872 | (7.1)% | | Finance Costs | (28,897) | (15,187) | (13,710) | 90.3% | | Share of Loss of a Joint Venture | (5,117) | (714) | (4,403) | 616.7% | | Loss Before Tax | (27,899) | (4,016) | (23,883) | 594.7% | | Loss for the Period | (29,374) | (4,066) | (25,308) | 622.4% | | Loss Attributable to Owners of the Parent | (29,551) | (5,058) | (24,493) | 484.2% | [Interim Condensed Consolidated Statement of Comprehensive Income](index=3&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) For the six months ended June 30, 2025, the company's total comprehensive loss for the period expanded to RMB 20,038 thousand from RMB 15,912 thousand in the prior year, primarily due to increased loss for the period and changes in exchange differences Key Data from Condensed Consolidated Statement of Comprehensive Income | Metric | 2025 (RMB '000) | 2024 (RMB '000) | Change (RMB '000) | | :--- | :--- | :--- | | Loss for the Period | (29,374) | (4,066) | (25,308) | | Exchange Differences on Translation of Foreign Operations | 9,336 | (11,846) | 21,182 | | Total Comprehensive Loss for the Period | (20,038) | (15,912) | (4,126) | | Comprehensive Loss Attributable to Owners of the Parent | (20,215) | (16,904) | (3,311) | [Interim Condensed Consolidated Statement of Financial Position](index=4&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the company's total assets slightly increased, but net current liabilities expanded and net assets decreased, indicating persistent liquidity pressure Key Data from Condensed Consolidated Statement of Financial Position | Metric | June 30, 2025 (RMB '000) | December 31, 2024 (RMB '000) | Change (RMB '000) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Total Non-current Assets | 1,373,049 | 1,369,145 | 3,904 | 0.3% | | Total Current Assets | 718,095 | 682,436 | 35,659 | 5.2% | | Total Current Liabilities | 1,508,731 | 1,460,662 | 48,069 | 3.3% | | Net Current Liabilities | (790,636) | (778,226) | (12,410) | 1.6% | | Net Assets | 129,250 | 141,564 | (12,314) | (8.7)% | | Total Equity | 129,250 | 141,564 | (12,314) | (8.7)% | [Notes to the Financial Statements](index=6&type=section&id=Notes%20to%20the%20Financial%20Statements) This section provides detailed notes explaining the accounting policies, financial performance, and financial position of the company [1. Basis of Presentation and Going Concern](index=6&type=section&id=1.%20Basis%20of%20Presentation%20and%20Going%20Concern) The condensed consolidated financial statements are prepared in accordance with HKAS 34. The company faces significant going concern uncertainties, including loss for the period, substantial net current liabilities, and limited cash, but management has formulated measures to address liquidity needs and secured financial support commitments from controlling shareholders - The company prepares its financial statements in accordance with HKAS 34 and the Listing Rules[9](index=9&type=chunk) - The company faces significant going concern uncertainties, with a loss for the period of **RMB 27,988 thousand**, net current liabilities of approximately **RMB 790,636 thousand**, and cash and cash equivalents of only approximately **RMB 2,452 thousand**[10](index=10&type=chunk) - Management has taken measures including accelerating project progress, recovering receivables, reviewing debt structure, seeking external financing, strengthening cost control, negotiating with lenders, and obtaining financial support commitments from Greenland Digital and Greenland Financial[10](index=10&type=chunk)[13](index=13&type=chunk) - The Board believes that, considering the aforementioned plans and measures, the company will have sufficient working capital to continue its operations[11](index=11&type=chunk) [2. Changes in Accounting Policies and Disclosures](index=7&type=section&id=2.%20Changes%20in%20Accounting%20Policies%20and%20Disclosures) Except for the application of amendments to HKFRSs, the accounting policies used in these interim condensed consolidated financial statements are consistent with those of the annual financial statements, and the amendments have no significant impact on financial position and performance - Accounting policies for the current period are substantially the same as those for the previous year, with changes only due to the application of amendments to HKFRSs[12](index=12&type=chunk) - The application of HKAS 21 (Amendment) "Lack of Exchangeability" has no significant impact on the financial position and performance for the current period[14](index=14&type=chunk) [3. Revenue and Other Income](index=8&type=section&id=3.%20Revenue%20and%20Other%20Income) During the reporting period, the company's revenue primarily derived from customer contracts totaled **RMB 7,154 thousand**, with hydropower station operation and maintenance services being the largest contributor. Other income significantly decreased by **38.5%** year-on-year, mainly due to reduced other interest income from contract revenue Revenue Composition | Revenue Category | 2025 (RMB '000) | 2024 (RMB '000) | Change (RMB '000) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Construction Contracts | — | 860 | (860) | (100.0)% | | Design and Maintenance Services | 1,588 | 162 | 1,426 | 879.0% | | Operation and Maintenance Services for Hydropower Stations | 3,433 | — | 3,433 | - | | Rental Income | 2,133 | 2,510 | (377) | (15.0)% | | **Total Revenue** | **7,154** | **3,532** | **3,622** | **102.5%** | Other Income Composition | Other Income Category | 2025 (RMB '000) | 2024 (RMB '000) | Change (RMB '000) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Bank Interest Income | 11 | 18 | (7) | (38.9)% | | Other Interest Income from Contract Revenue | 11,377 | 20,891 | (9,514) | (45.5)% | | Gain on Bargain Purchase | 2,228 | — | 2,228 | - | | Others | 200 | 1,552 | (1,352) | (87.1)% | | **Total Other Income** | **13,816** | **22,461** | **(8,645)** | **(38.5)%** | [4. Finance Costs](index=9&type=section&id=4.%20Finance%20Costs) During the reporting period, the company's finance costs significantly increased by **90.3%** to **RMB 28,897 thousand**, primarily due to a substantial increase in interest on bank loans, overdrafts, and other borrowings Finance Costs Composition | Finance Cost Category | 2025 (RMB '000) | 2024 (RMB '000) | Change (RMB '000) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Interest on Bank Loans, Overdrafts and Other Borrowings | 21,790 | 7,982 | 13,808 | 173.0% | | Interest on Lease Liabilities | 809 | 689 | 120 | 17.4% | | Interest on Corporate Bonds | 6,298 | 6,516 | (218) | (3.3)% | | **Total Finance Costs** | **28,897** | **15,187** | **13,710** | **90.3%** | [5. Loss Before Tax](index=10&type=section&id=5.%20Loss%20Before%20Tax) During the reporting period, the company's loss before tax expanded to **RMB 27,899 thousand**, primarily impacted by increased finance costs, share of loss of a joint venture, and changes in impairment provisions for trade receivables and contract assets - Cost of services provided increased from **RMB 947 thousand** to **RMB 4,291 thousand**[19](index=19&type=chunk) - Employee benefit expenses increased from **RMB 2,915 thousand** to **RMB 4,648 thousand**[19](index=19&type=chunk) - Impairment of trade receivables changed from an impairment of **RMB 3,689 thousand** in 2024 to a reversal of **RMB 7,452 thousand** in 2025[19](index=19&type=chunk) - Impairment of contract assets changed from a reversal of **RMB 4,356 thousand** in 2024 to an impairment of **RMB 5,220 thousand** in 2025[19](index=19&type=chunk) [6. Income Tax](index=10&type=section&id=6.%20Income%20Tax) During the reporting period, the company's income tax expense was **RMB 1,475 thousand**, primarily from current tax in Mainland China, with no Hong Kong profits tax provision due to no assessable profits - No assessable profits in Hong Kong, thus no provision for Hong Kong profits tax[20](index=20&type=chunk) - Current tax expense in Mainland China was **RMB 1,649 thousand**, with a deferred tax reversal of **RMB 171 thousand**[21](index=21&type=chunk) [7. Dividends](index=11&type=section&id=7.%20Dividends) The Board does not recommend the payment of any interim dividend for the reporting period, consistent with the prior year - No interim dividend is recommended for the 2025 reporting period[22](index=22&type=chunk) [8. Loss Per Share Attributable to Owners of the Parent](index=11&type=section&id=8.%20Loss%20Per%20Share%20Attributable%20to%20Owners%20of%20the%20Parent) As of June 30, 2025, basic and diluted loss per share attributable to owners of the parent was **RMB (0.50) cents**, a significant increase from **RMB (0.09) cents** in the prior year, mainly due to increased loss for the period Loss Per Share Details | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Loss Attributable to Owners of the Parent (RMB '000) | (29,551) | (5,058) | | Weighted Average Number of Ordinary Shares in Issue (Shares) | 5,939,364,760 | 5,821,809,957 | | Basic Loss Per Share (RMB cents) | (0.50) | (0.09) | | Diluted Loss Per Share (RMB cents) | (0.50) | (0.09) | [9. Trade Receivables](index=12&type=section&id=9.%20Trade%20Receivables) As of June 30, 2025, total trade receivables increased to **RMB 57,130 thousand**, primarily comprising current and overdue within one year amounts, mainly from government agencies and real estate companies Ageing Analysis of Trade Receivables | Ageing | June 30, 2025 (RMB '000) | December 31, 2024 (RMB '000) | Change (RMB '000) | | :--- | :--- | :--- | :--- | | Current | 21,627 | 14,294 | 7,333 | | Overdue within one year | 23,267 | 23,267 | 0 | | Overdue between one and two years | 3,362 | 3,363 | (1) | | Overdue between two and three years | 5,882 | 5,880 | 2 | | Overdue over three years | 2,992 | 2,993 | (1) | | **Total** | **57,130** | **49,797** | **7,333** | - Trade receivables are mainly from government agencies and real estate companies, with no collateral or credit enhancement[27](index=27&type=chunk) [10. Contract Assets](index=13&type=section&id=10.%20Contract%20Assets) As of June 30, 2025, the closing balance of contract assets remained stable at **RMB 696,865 thousand**, primarily related to construction services and including retention receivables - Contract assets primarily arise from construction services, amounting to **RMB 1,117,036 thousand**, with an impairment provision of **RMB 420,171 thousand**[28](index=28&type=chunk) - The closing balance of contract assets remained stable compared to the end of 2024[28](index=28&type=chunk) - Retention receivables are included in contract assets, with maturity generally between one and three years after completion of construction works[28](index=28&type=chunk) [11. Trade and Bills Payables](index=13&type=section&id=11.%20Trade%20and%20Bills%20Payables) As of June 30, 2025, total trade and bills payables amounted to **RMB 550,793 thousand**, a decrease from the end of 2024, with the majority of amounts overdue by more than two years Ageing Analysis of Trade and Bills Payables | Ageing | June 30, 2025 (RMB '000) | December 31, 2024 (RMB '000) | Change (RMB '000) | | :--- | :--- | :--- | :--- | | Within one year | 2,485 | 3,486 | (1,001) | | Over one year but less than two years | 603 | 3,976 | (3,373) | | Over two years | 547,705 | 566,621 | (18,916) | | **Total** | **550,793** | **574,083** | **(23,290)** | - Trade payables are non-interest bearing, typically settled partially within six months, with a portion retained until the end of the retention period[29](index=29&type=chunk) [12. Acquisition of a Subsidiary](index=14&type=section&id=12.%20Acquisition%20of%20a%20Subsidiary) The company completed the acquisition of a **51%** equity interest in ZDX Energy Development Co., Ltd on March 26, 2025, for new shares. The vendor provided performance and cash flow guarantees for ZDX, and the company holds a right of first refusal for the remaining equity. This acquisition was accounted for as a bargain purchase, resulting in a gain of **RMB 2,228 thousand** [12.1 Acquisition Details](index=14&type=section&id=12.1%20Acquisition%20Details) The company completed the acquisition of a **51%** equity interest in ZDX Energy Development Co., Ltd on March 26, 2025, for the issuance of **219,354,839** new shares with a fair value of approximately **RMB 2,871 thousand** - The acquisition of a **51%** equity interest in ZDX Energy Development Co., Ltd (ZDX) was completed on March 26, 2025[30](index=30&type=chunk) - The consideration for the acquisition was the issuance of **219,354,839** new shares with a fair value of approximately **RMB 2,871 thousand**[30](index=30&type=chunk)[32](index=32&type=chunk) - ZDX primarily engages in providing operation and maintenance services to hydropower stations in China[36](index=36&type=chunk) [12.2 Performance and Cash Flow Guarantees](index=14&type=section&id=12.2%20Performance%20and%20Cash%20Flow%20Guarantees) The vendor guaranteed ZDX's performance, with the target group's total net profit for the three years ending December 31, 2027, not less than **RMB 11.0 million**, and provided a cash flow guarantee to compensate for net cash outflows - The vendor guaranteed that the target group's total net profit for the three years ending December 31, 2027, would not be less than **RMB 11.0 million**[33](index=33&type=chunk) - If the profit guarantee is not met, the vendor will compensate the difference by transferring additional shares or cash[33](index=33&type=chunk) - The vendor committed to compensating the target group for any net cash outflow during any financial year within the performance guarantee period[34](index=34&type=chunk) [12.3 Right of First Refusal](index=15&type=section&id=12.3%20Right%20of%20First%20Refusal) Upon expiration of the performance guarantee period, the company holds a right of first refusal for the remaining **49.0%** equity interest in ZDX held by the vendor - The company holds a right of first refusal for the remaining **49.0%** equity interest in ZDX held by the vendor[35](index=35&type=chunk) [12.4 Impact of Acquisition](index=15&type=section&id=12.4%20Impact%20of%20Acquisition) The acquisition of ZDX was accounted for as a bargain purchase, resulting in a gain of **RMB 2,228 thousand**, and recognized ZDX's net assets and non-controlling interests - The acquisition of ZDX resulted in a gain on bargain purchase of **RMB 2,228 thousand**[40](index=40&type=chunk) - The acquisition of ZDX recognized total identifiable net assets of **RMB 9,905 thousand**[38](index=38&type=chunk) - Non-controlling interests (49%) in ZDX were recognized at **RMB 4,853 thousand**[39](index=39&type=chunk) [13. Comparative Information](index=16&type=section&id=13.%20Comparative%20Information) Certain comparative figures have been reclassified to conform with the current year's presentation - Some comparative figures have been reclassified to conform with the current year's presentation[41](index=41&type=chunk) [Business Review and Outlook](index=17&type=section&id=Business%20Review%20and%20Outlook) This section provides an overview of the industry, the company's business performance, cost control, research and development efforts, and future outlook [Industry Review](index=17&type=section&id=Industry%20Review) China's urban landscape greening is increasingly vital in new urbanization and ecological civilization, accelerating towards digital and refined management. The new energy sector is booming, with diversified energy supply systems like solar, wind, and biomass forming, powering urban green and low-carbon transformation - Urban landscape greening is increasingly important for improving living environments, enhancing ecology, and promoting sustainable development, moving towards digital and refined management[42](index=42&type=chunk) - The new energy sector is booming, with record-high new solar installations and diversified energy systems including wind and biomass, supporting urban green and low-carbon transformation[43](index=43&type=chunk) [Business Review](index=18&type=section&id=Business%20Review) The company actively promotes project development and expands new energy businesses, but several PPP projects are suspended due to land use, compliance approvals, settlement prices, and licensing issues. During the reporting period, total revenue was **RMB 7.1 million**, net loss attributable to owners of the parent was **RMB 29.6 million**, and gross margin was **40.0%** - The company actively expands its new energy business, deploying projects such as solar power[44](index=44&type=chunk) - Several PPP projects (Guang'an Guanshenghu, Mianzhu Municipal Tourism, Kaifeng Huiji River, Quanzhou Botanical Garden) are suspended due to issues such as government approvals, compliance, settlement negotiations, logging permits, and demolition settlements[44](index=44&type=chunk)[45](index=45&type=chunk) - During the reporting period, total revenue was **RMB 7.1 million**, net loss attributable to owners of the parent was **RMB 29.6 million**, and gross margin was **40.0%**, a **9.8 percentage point** decrease from the prior year[46](index=46&type=chunk) - Company management will regularly monitor the progress of suspended projects and seek settlement solutions and debt recovery[46](index=46&type=chunk) [Cost Control](index=20&type=section&id=Cost%20Control) The company adopts a refined project cost control model, establishes a unified supplier database, strictly manages budgets using an OA system, and leverages support from renowned enterprise procurement platforms to achieve cost reduction and efficiency improvement - Adopting a refined project cost control model instead of traditional extensive contracting[47](index=47&type=chunk) - Establishing a group-wide unified supplier database and utilizing a self-developed OA system for budgetary management[47](index=47&type=chunk) - Gaining support from renowned domestic enterprise procurement platforms to fully open supply chain channels, achieving cost reduction and efficiency improvement[47](index=47&type=chunk) [Research and Development](index=20&type=section&id=Research%20and%20Development) The company adheres to applying efficient, energy-saving, and clean green technologies in design, driving ecological and environmental protection project development through technological innovation, investing in establishing technology centers, strengthening industry-academia-research cooperation and intellectual property construction, and actively realizing technological industrialization - Adhering to applying efficient, energy-saving, and clean green technologies in design to promote the development of ecological and environmental protection projects[48](index=48&type=chunk) - Investing in establishing technology centers, prioritizing independent development, supplemented by introduction, digestion, and absorption[48](index=48&type=chunk) - Strengthening industry-academia-research cooperation and intellectual property construction, actively realizing technological industrialization, and collaborating with upstream and downstream enterprises to share technological resources[49](index=49&type=chunk) [Outlook](index=21&type=section&id=Outlook) China's new energy installed capacity continues rapid growth, with non-fossil fuel power generation exceeding **60%** for the first time. Global electricity demand accelerates, with renewable energy becoming the dominant force. The company will actively seize new energy development trends, integrate resources, enhance competitiveness, and promote green and low-carbon transformation - China's new energy installed capacity continues rapid growth, with non-fossil fuel power generation accounting for over **60%** for the first time[50](index=50&type=chunk) - Global electricity demand is accelerating, with renewable energy becoming the primary source for meeting new electricity demand growth[50](index=50&type=chunk) - Integrated solar storage and charging is becoming an important development direction in the renewable energy sector, with broad market prospects[51](index=51&type=chunk) - The company will actively seize new energy development trends, integrate resources, explore cutting-edge technologies and innovative models, enhance competitiveness, and promote green and low-carbon transformation[52](index=52&type=chunk) [Corporate Governance and Other Information](index=22&type=section&id=Corporate%20Governance%20and%20Other%20Information) This section covers the company's corporate governance practices, share transactions, audit committee review, post-reporting period events, and publication details [Bank and Other Borrowings](index=22&type=section&id=Bank%20and%20Other%20Borrowings) As of June 30, 2025, the company's total outstanding bank and other borrowings amounted to **RMB 591,308 thousand**, an increase from the end of 2024 Total Bank and Other Borrowings | Metric | June 30, 2025 (RMB '000) | December 31, 2024 (RMB '000) | Change (RMB '000) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Total Outstanding Bank and Other Borrowings | 591,308 | 576,527 | 14,781 | 2.6% | [Purchase, Sale or Redemption of the Company's Shares](index=22&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company%27s%20Shares) During the reporting period, neither the company nor its subsidiaries purchased, sold, or redeemed any of the company's listed securities, and as of June 30, 2025, the company held no treasury shares - Neither the company nor its subsidiaries conducted any share purchases, sales, or redemptions during the reporting period[55](index=55&type=chunk) - As of June 30, 2025, the company held no treasury shares[55](index=55&type=chunk) [Corporate Governance Summary](index=22&type=section&id=Corporate%20Governance%20Summary) The company is committed to maintaining high standards of corporate governance, complying with the Listing Rules' Corporate Governance Code. Mr. Lin Guangqing was appointed Chairman of the Board and Chief Executive Officer, an arrangement the Board deems appropriate at this stage to ensure operational stability and decision-making efficiency, overseen by independent non-executive directors - The company complies with all applicable code provisions of the Corporate Governance Code set out in Appendix C1 of the Listing Rules[56](index=56&type=chunk) - Mr. Lin Guangqing was appointed Chairman of the Board and Chief Executive Officer on August 5, 2025, deviating from the code's requirement for separation of these roles[57](index=57&type=chunk) - The Board considers this arrangement appropriate at this stage to ensure operational stability, consistent leadership, enhanced decision-making efficiency and flexibility, and is overseen by three independent non-executive directors[57](index=57&type=chunk) - The company has adopted the Model Code set out in Appendix C3 of the Listing Rules as the code of conduct for securities transactions by directors and employees who may possess inside information, and confirmed directors' compliance[58](index=58&type=chunk) [Audit Committee and Review of Interim Financial Statements](index=24&type=section&id=Audit%20Committee%20and%20Review%20of%20Interim%20Financial%20Statements) The Audit Committee, comprising three members, has reviewed the Group's accounting principles, policies, and interim financial report, deeming them compliant with applicable accounting standards and requirements - The Audit Committee comprises Mr. Yang Yuanguang (Chairman), Mr. Dai Guoqiang, and Ms. Zhang Rui[59](index=59&type=chunk) - The Audit Committee has reviewed the interim report and the unaudited condensed consolidated interim results, deeming them compliant with applicable accounting standards and requirements[59](index=59&type=chunk) [Events After the Reporting Period](index=24&type=section&id=Events%20After%20the%20Reporting%20Period) After the reporting period, Hangzhou Beifeng Landscape Design Co., Ltd., an indirect wholly-owned subsidiary, agreed to acquire a **100%** equity interest in Shanghai Greenland Senmao Greening Engineering Co., Ltd. Additionally, the Board proposed a share consolidation, a change of company name to "China Green Broad Ecological Technology Company Limited," and amendments to the Articles of Association, all subject to shareholder approval - On August 15, 2025, the company's indirect wholly-owned subsidiary agreed to acquire a **100%** equity interest in Shanghai Greenland Senmao Greening Engineering Co., Ltd[61](index=61&type=chunk) - On August 29, 2025, the Board proposed a share consolidation (10-for-1) and a change in the board lot size to **12,000** consolidated shares[62](index=62&type=chunk) - The Board proposed changing the company's Chinese name to "中国绿博生态科技集团有限公司" and its English name to "China Green Broad Ecological Technology Company Limited"[62](index=62&type=chunk) - The aforementioned share consolidation and change of company name are subject to shareholder approval[63](index=63&type=chunk) [Publication of Interim Results and 2025 Interim Report](index=25&type=section&id=Publication%20of%20Interim%20Results%20and%202025%20Interim%20Report) This announcement has been published on the company's website and the HKEX website, and the 2025 Interim Report will be published and dispatched to shareholders in due course - This announcement has been published on the company's website and the HKEX website[64](index=64&type=chunk) - The 2025 Interim Report will be published and dispatched to shareholders in due course[64](index=64&type=chunk)

[Financial Statements](index=2&type=section&id=Financial%20Statements) [Unaudited Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=2&type=section&id=Unaudited%20Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For the six months ended June 30, 2025, the Group's consolidated loss significantly widened to **RMB 55,380 thousand**, driven by increased revenue, decreased gross profit margin, a shift from net other gains to losses, and a substantial rise in administrative expenses | Indicator | Six months ended June 30, 2025 (RMB thousand yuan) | Six months ended June 30, 2024 (RMB thousand yuan) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 270,144 | 237,593 | 13.70% | | Cost of sales and services | (228,078) | (194,360) | 17.35% | | Gross profit | 42,066 | 43,233 | -2.70% | | Other income | 1,094 | 2,251 | -51.31% | | Net other gains and losses | (15,823) | 1,291 | Shift from gain to loss | | Net provision for expected credit losses on trade and other receivables | (2,258) | (1,221) | 84.93% | | Distribution costs | (15,931) | (16,537) | -3.66% | | Administrative expenses | (51,051) | (32,563) | 56.78% | | Finance costs | (10,338) | (10,503) | -1.57% | | Loss before tax | (55,027) | (14,050) | 291.65% | | Income tax expense | (353) | (2,074) | -82.98% | | Loss for the period | (55,380) | (16,124) | 243.47% | | Loss for the period attributable to owners of the Company | (54,027) | (15,917) | 239.43% | | Basic and diluted loss per share (RMB cents) | (0.314) | (0.092) | 241.30% | - Total comprehensive loss for the period expanded from **RMB 27,895 thousand** in the same period of 2024 to **RMB 55,003 thousand** in 2025[4](index=4&type=chunk)[6](index=6&type=chunk) [Unaudited Condensed Consolidated Statement of Financial Position](index=4&type=section&id=Unaudited%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the Group's total assets slightly decreased, while net current liabilities significantly increased, leading to a reduction in net assets and total equity | Indicator | June 30, 2025 (RMB thousand yuan) | December 31, 2024 (RMB thousand yuan) | Change (%) | | :--- | :--- | :--- | :--- | | Non-current assets | 867,278 | 855,165 | 1.42% | | Current assets | 607,268 | 659,267 | -7.90% | | Current liabilities | 739,425 | 722,638 | 2.32% | | Net current liabilities | (132,157) | (63,371) | 108.55% | | Non-current liabilities | 134,172 | 135,842 | -1.23% | | Net assets | 600,949 | 655,952 | -8.40% | | Total equity | 600,949 | 655,952 | -8.40% | - Prepayments for property, plant and equipment increased by **11.51%** from **RMB 292,136 thousand** as of December 31, 2024, to **RMB 325,766 thousand** as of June 30, 2025[7](index=7&type=chunk) - Cash and cash equivalents decreased by **53.29%** from **RMB 89,358 thousand** as of December 31, 2024, to **RMB 41,718 thousand** as of June 30, 2025[7](index=7&type=chunk) [Unaudited Condensed Consolidated Statement of Changes in Equity](index=6&type=section&id=Unaudited%20Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) For the six months ended June 30, 2025, total equity attributable to owners of the Company decreased from **RMB 500,103 thousand** to **RMB 446,453 thousand**, primarily due to the loss for the period and a reduction in non-controlling interests | Indicator | January 1, 2025 (RMB thousand yuan) | June 30, 2025 (RMB thousand yuan) | Change (RMB thousand yuan) | | :--- | :--- | :--- | :--- | | Total equity attributable to owners of the Company | 500,103 | 446,453 | -53,650 | | Non-controlling interests | 155,849 | 154,496 | -1,353 | | Total equity | 655,952 | 600,949 | -55,003 | | Equity change item | Six months ended June 30, 2025 (RMB thousand yuan) | Six months ended June 30, 2024 (RMB thousand yuan) | | :--- | :--- | :--- | | Loss for the period (attributable to owners of the Company) | (54,027) | (15,917) | | Other comprehensive income/(loss) for the period | 377 | (11,771) | | Total comprehensive income/(loss) for the period (attributable to owners of the Company) | (53,650) | (27,688) | [Unaudited Condensed Consolidated Statement of Cash Flows](index=7&type=section&id=Unaudited%20Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) For the six months ended June 30, 2025, net cash from operating activities increased, but net cash used in investing activities decreased, and financing activities shifted from net inflow to net outflow, resulting in a net decrease in cash and cash equivalents | Indicator | Six months ended June 30, 2025 (RMB thousand yuan) | Six months ended June 30, 2024 (RMB thousand yuan) | Change (RMB thousand yuan) | | :--- | :--- | :--- | :--- | | Net cash generated from operating activities | 7,496 | 5,918 | 1,578 | | Net cash used in investing activities | (45,182) | (69,573) | 24,391 | | Net cash (used in)/generated from financing activities | (9,954) | 57,629 | -67,583 | | Net decrease in cash and cash equivalents | (47,640) | (6,026) | -41,614 | | Cash and cash equivalents at end of period | 41,718 | 72,593 | -30,875 | - In 2025, purchases of financial assets at fair value through profit or loss were **RMB 0**, compared to **RMB 55,000 thousand** in 2024[10](index=10&type=chunk) - Net decrease in bank and other borrowings was **RMB 3,865 thousand** in 2025, compared to a net increase of **RMB 4,536 thousand** in 2024[10](index=10&type=chunk) [Notes to the Unaudited Condensed Consolidated Interim Financial Statements](index=8&type=section&id=Notes%20to%20the%20Unaudited%20Condensed%20Consolidated%20Interim%20Financial%20Statements) [1. Composition and Principal Activities](index=8&type=section&id=1.%20Composition%20and%20Principal%20Activities) The Company is an investment holding company incorporated in the Cayman Islands and listed on the Main Board of the Hong Kong Stock Exchange, with principal activities including automotive parts manufacturing, 4S dealership operations, and hydrogen fuel cell R&D - The Company is an investment holding company, with its subsidiaries primarily engaged in the production and sale of electronic and power-related automotive parts and accessories, trading of automotive accessories, operating 4S dealerships and related businesses, and hydrogen fuel cell R&D, sales, and provision of integrated solutions[11](index=11&type=chunk) - Hong Kong Daodu Industrial Co., Limited is the direct holding company, and Qingdao Guorui Xinfuokesi Investment Center (Limited Partnership) is the ultimate holding company[12](index=12&type=chunk) [2. Basis of Preparation](index=8&type=section&id=2.%20Basis%20of%20Preparation) The unaudited condensed consolidated interim financial statements are prepared in accordance with the HKEX Listing Rules and IAS 34, authorized for issue on August 29, 2025, involving management judgments, estimates, and assumptions - The financial statements are prepared in accordance with the HKEX Listing Rules and International Accounting Standard 34 'Interim Financial Reporting'[13](index=13&type=chunk) - Authorized for issue on **August 29, 2025**[13](index=13&type=chunk) [3. Changes in Accounting Policies](index=9&type=section&id=3.%20Changes%20in%20Accounting%20Policies) Revisions to IFRS effective this period had no material impact on the Group's financial performance or position, and no new standards or interpretations not yet effective were applied - Several amendments to International Financial Reporting Standards became effective for the Group for the first time during the period, but none had a material impact on the preparation or presentation of the Group's results and financial position[15](index=15&type=chunk) - The Group has not applied any new standards or interpretations that are not yet effective for the period[16](index=16&type=chunk) [4. Revenue and Segment Information](index=9&type=section&id=4.%20Revenue%20and%20Segment%20Information) The Group's revenue primarily derives from goods sales, with minor service income, operating three reportable segments: manufacturing and trading, automotive dealership and services, and hydrogen fuel cell business, with revenue mainly from China and the Americas Revenue Analysis | Revenue type | Six months ended June 30, 2025 (RMB thousand yuan) | Six months ended June 30, 2024 (RMB thousand yuan) | | :--- | :--- | :--- | | Sales of goods | 265,081 | 231,596 | | Service income | 5,063 | 5,997 | | **Total Revenue** | **270,144** | **237,593** | - The Group operates three reportable segments: (i) production and sale of automotive accessories ('Manufacturing and Trading Business'); (ii) operation of 4S dealerships and related businesses ('Automotive Dealership and Services Business'); and (iii) R&D, sales, and provision of integrated solutions for hydrogen fuel cells ('Hydrogen Fuel Cell Business')[18](index=18&type=chunk) Segment Revenue and Results (Six months ended June 30, 2025) | Segment | Revenue (RMB thousand yuan) | Reportable segment results (RMB thousand yuan) | | :--- | :--- | :--- | | Manufacturing and Trading Business | 200,102 | (3,299) | | Automotive Dealership and Services Business | 70,042 | (3,967) | | Hydrogen Fuel Cell Business | – | (5,196) | | **Total** | **270,144** | **(12,462)** | Segment Revenue and Results (Six months ended June 30, 2024) | Segment | Revenue (RMB thousand yuan) | Reportable segment results (RMB thousand yuan) | | :--- | :--- | :--- | | Manufacturing and Trading Business | 187,631 | 7,344 | | Automotive Dealership and Services Business | 49,962 | (2,324) | | Hydrogen Fuel Cell Business | – | (701) | | **Total** | **237,593** | **4,319** | Geographical Revenue and Specific Non-current Assets | Region | Six months ended June 30, 2025 Revenue (RMB thousand yuan) | Six months ended June 30, 2024 Revenue (RMB thousand yuan) | June 30, 2025 Specific Non-current Assets (RMB thousand yuan) | | :--- | :--- | :--- | :--- | | China | 113,113 | 87,904 | 318,634 | | Americas | 109,724 | 127,196 | – | | Europe | 4,738 | 5,026 | – | | Asia Pacific | 42,569 | 17,467 | – | | **Total** | **270,144** | **237,593** | **318,634** | - As of June 30, 2025, the Group's customer base is diversified, with no single customer accounting for more than **10%** of the Group's revenue[24](index=24&type=chunk) [5. Other Income](index=13&type=section&id=5.%20Other%20Income) Other income for the period decreased by **51.31%** to **RMB 1,094 thousand**, primarily due to reduced interest income and sales of scrap and obsolete materials | Other income item | Six months ended June 30, 2025 (RMB thousand yuan) | Six months ended June 30, 2024 (RMB thousand yuan) | | :--- | :--- | :--- | | Sales of molds | 256 | 80 | | Interest income | 26 | 516 | | Rental and other rental income from investment properties | 451 | 387 | | Sales of scrap and obsolete materials | – | 794 | | Others | 361 | 474 | | **Total** | **1,094** | **2,251** | [6. Net Other Gains and Losses](index=13&type=section&id=6.%20Net%20Other%20Gains%20and%20Losses) Net other gains and losses for the period shifted from a gain to a loss of **RMB 15,823 thousand**, mainly due to a significant increase in fair value losses on financial assets at fair value through profit or loss | Net other gains and losses item | Six months ended June 30, 2025 (RMB thousand yuan) | Six months ended June 30, 2024 (RMB thousand yuan) | | :--- | :--- | :--- | | Net exchange gains | 2,116 | 1,745 | | Loss on disposal of property, plant and equipment | (14) | (216) | | Government grants | 1,200 | 1,833 | | Fair value loss on financial assets at fair value through profit or loss | (19,781) | (2,159) | | Others | 656 | 88 | | **Total** | **(15,823)** | **1,291** | [7. Finance Costs](index=14&type=section&id=7.%20Finance%20Costs) Finance costs for the period slightly decreased by **1.57%** to **RMB 10,338 thousand**, primarily consisting of interest on bank and other borrowings | Finance cost item | Six months ended June 30, 2025 (RMB thousand yuan) | Six months ended June 30, 2024 (RMB thousand yuan) | | :--- | :--- | :--- | | Interest on bank and other borrowings | 10,226 | 10,416 | | Interest on lease liabilities | 112 | 87 | | **Total** | **10,338** | **10,503** | [8. Income Tax](index=14&type=section&id=8.%20Income%20Tax) Income tax expense for the period significantly decreased to **RMB 353 thousand**, primarily because the Group generated no taxable profits in Hong Kong | Income tax item | Six months ended June 30, 2025 (RMB thousand yuan) | Six months ended June 30, 2024 (RMB thousand yuan) | | :--- | :--- | :--- | | Current tax | 353 | 2,251 | | Deferred tax | – | (177) | | **Total** | **353** | **2,074** | - No provision for Hong Kong profits tax was made for the six months ended June 30, 2025, as the Group did not generate any taxable profits in Hong Kong[28](index=28&type=chunk) [9. Loss Per Share](index=14&type=section&id=9.%20Loss%20Per%20Share) For the six months ended June 30, 2025, the loss attributable to owners of the Company significantly increased to **RMB 54,027 thousand**, resulting in a basic and diluted loss per share of **RMB 0.314 cents** | Indicator | Six months ended June 30, 2025 (RMB thousand yuan) | Six months ended June 30, 2024 (RMB thousand yuan) | | :--- | :--- | :--- | | Loss for the period attributable to owners of the Company | (54,027) | (15,917) | | Basic and diluted loss per share (RMB cents) | (0.314) | (0.092) | - No adjustment was made for diluted loss per share for the six months ended June 30, 2025, as there were no potential dilutive shares outstanding[31](index=31&type=chunk) [10. Dividends](index=15&type=section&id=10.%20Dividends) 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 (June 30, 2024: nil)[32](index=32&type=chunk) [11. Trade Receivables](index=15&type=section&id=11.%20Trade%20Receivables) As of June 30, 2025, the Group's total trade receivables slightly decreased to **RMB 76,577 thousand**, with the majority falling within the current to 30-day aging category | Aging | June 30, 2025 (RMB thousand yuan) | December 31, 2024 (RMB thousand yuan) | | :--- | :--- | :--- | | Current to 30 days | 56,126 | 60,069 | | 31 to 60 days | 11,160 | 13,518 | | 61 to 90 days | 4,671 | 3,176 | | Over 90 days | 4,620 | 3,154 | | **Total** | **76,577** | **79,917** | [12. Trade Payables](index=15&type=section&id=12.%20Trade%20Payables) As of June 30, 2025, the Group's total trade payables increased to **RMB 254,596 thousand**, with the largest portion in the over 90-day aging category | Aging | June 30, 2025 (RMB thousand yuan) | December 31, 2024 (RMB thousand yuan) | | :--- | :--- | :--- | | Current to 30 days | 83,788 | 73,343 | | 31 to 60 days | 24,371 | 17,977 | | 61 to 90 days | 18,981 | 13,052 | | Over 90 days | 127,456 | 126,760 | | **Total** | **254,596** | **231,132** | [Management Discussion and Analysis](index=16&type=section&id=Management%20Discussion%20and%20Analysis) [Overview](index=16&type=section&id=Overview) The Group's business encompasses R&D, production, and sales of automotive electronic products, development of automotive dealership networks, and hydrogen fuel cell R&D and solutions, with the hydrogen business's facilities largely complete but not yet generating revenue - The Group is committed to the R&D, production, and sales of automotive electronic products (inverters, chargers, multi-function power supplies, and car refrigerators), the establishment and development of automotive dealership networks, and the R&D, sales, and provision of integrated solutions for hydrogen fuel cells[35](index=35&type=chunk) - The hydrogen fuel cell business's plant and production lines have largely completed overall construction, but this business has not yet generated revenue[35](index=35&type=chunk) [Business Review](index=16&type=section&id=Business%20Review) The Group's consolidated revenue grew by **13.70%**, driven by new client expansion and policy support, but declining gross profit margins, a shift to net other losses, and significantly increased administrative expenses led to a substantial widening of operating loss [Revenue](index=16&type=section&id=Revenue) The Group's consolidated revenue increased by **13.70%**, with manufacturing and trading revenue up **6.65%** and automotive dealership and services revenue up **40.19%**, primarily driven by new client acquisition, strong passenger car market demand, and government sales promotion policies | Business | Six months ended June 30, 2025 (RMB thousand yuan) | Six months ended June 30, 2024 (RMB thousand yuan) | Year-on-year growth (%) | | :--- | :--- | :--- | :--- | | Consolidated Revenue | 270,144 | 237,593 | 13.70% | | Manufacturing and Trading Business | 200,102 | 187,631 | 6.65% | | Automotive Dealership and Services Business | 70,042 | 49,962 | 40.19% | - The increase in manufacturing and trading business revenue was primarily due to active expansion of new customers and strong performance in the Chinese passenger car market[36](index=36&type=chunk) - The increase in automotive dealership and services business revenue was mainly due to various sales promotion policies and financial subsidies provided by government departments and automobile manufacturers[36](index=36&type=chunk) [Gross Profit and Gross Profit Margin](index=16&type=section&id=Gross%20Profit%20and%20Gross%20Profit%20Margin) The Group's consolidated gross profit decreased by **2.70%**, with the gross profit margin falling from **18.20%** to **15.57%**, primarily due to intense market competition and lower margins on new customer products and high-volume domestic sales | Indicator | Six months ended June 30, 2025 | Six months ended June 30, 2024 | Change | | :--- | :--- | :--- | :--- | | Consolidated Gross Profit (RMB thousand yuan) | 42,066 | 43,233 | -2.70% | | Consolidated Gross Profit Margin | 15.57% | 18.20% | -2.63 percentage points | | Manufacturing and Trading Business Gross Profit (RMB thousand yuan) | 38,895 | 40,247 | -3.36% | | Manufacturing and Trading Business Gross Profit Margin | 19.44% | 21.45% | -2.01 percentage points | | Automotive Dealership and Services Business Gross Profit (RMB thousand yuan) | 3,171 | 2,986 | 6.20% | | Automotive Dealership and Services Business Gross Profit Margin | 4.53% | 5.98% | -1.45 percentage points | - The decrease in gross profit and gross profit margin for the manufacturing and trading business was mainly due to intense domestic market competition leading to lower selling prices for some products, and relatively lower gross profit margins for products sold to new customers[38](index=38&type=chunk) - The decrease in gross profit margin for the automotive dealership and services business was primarily due to intense market competition leading to lower selling prices for goods, and an increased proportion of sales of lower-margin vehicle models[38](index=38&type=chunk) [Other Income and Gains/Losses](index=17&type=section&id=Other%20Income%20and%20Gains%2FLosses) Other income for the period decreased to **RMB 1,094 thousand**, and net other gains and losses shifted from a gain of **RMB 1,291 thousand** to a loss of **RMB 15,823 thousand**, mainly due to a significant increase in fair value losses from the investment in Shihezi Yike | Indicator | Six months ended June 30, 2025 (RMB thousand yuan) | Six months ended June 30, 2024 (RMB thousand yuan) | | :--- | :--- | :--- | | Other income | 1,094 | 2,251 | | Net other gains and losses | (15,823) | 1,291 | - The shift from net other gains to losses was primarily due to a fair value change loss of approximately **RMB 18,146 thousand** recorded on the Company's equity investment in Shihezi Yike, an increase in loss of approximately **RMB 16,150 thousand** compared to the same period last year[39](index=39&type=chunk) [Expenses](index=17&type=section&id=Expenses) Net provision for expected credit losses on trade and other receivables increased, distribution costs decreased by **3.66%** due to team streamlining, while administrative expenses surged by **56.78%** due to manufacturing business transformation, increased R&D personnel, and initial operating costs for the hydrogen business | Indicator | Six months ended June 30, 2025 (RMB thousand yuan) | Six months ended June 30, 2024 (RMB thousand yuan) | | :--- | :--- | :--- | | Net provision for expected credit losses on trade and other receivables | 2,258 | 1,221 | | Distribution costs | 15,931 | 16,537 | | Administrative expenses | 51,051 | 32,563 | - The decrease in distribution costs primarily resulted from the Group streamlining its sales team and optimizing sales channels to control costs[40](index=40&type=chunk) - The increase in administrative expenses was mainly due to the manufacturing business's transformation towards new energy automotive electronic products, increased reserves of professional R&D personnel and high-end talents, and initial operating costs for hydrogen-related companies, including team building and compliance filings[41](index=41&type=chunk) [Operating Loss](index=18&type=section&id=Operating%20Loss) Operating loss for the period expanded significantly to **RMB 44,689 thousand** from **RMB 3,547 thousand** in the prior year, primarily due to increased administrative expenses and the shift from net other gains to losses | Indicator | Six months ended June 30, 2025 (RMB thousand yuan) | Six months ended June 30, 2024 (RMB thousand yuan) | | :--- | :--- | :--- | | Operating loss | 44,689 | 3,547 | - The increase in loss was mainly due to an increase in administrative expenses of approximately **RMB 18,488 thousand** during the period, and a difference of approximately **RMB 17,114 thousand** from the shift of net other gains to losses compared to the same period in 2024[42](index=42&type=chunk) [Finance Costs](index=18&type=section&id=Finance%20Costs) Finance costs for the period were **RMB 10,338 thousand**, a **1.57%** year-on-year decrease, primarily attributable to a lower average balance of bank and other borrowings | Indicator | Six months ended June 30, 2025 (RMB thousand yuan) | Six months ended June 30, 2024 (RMB thousand yuan) | Year-on-year decrease (%) | | :--- | :--- | :--- | :--- | | Finance costs | 10,338 | 10,503 | 1.57% | - The decrease was mainly due to a lower average balance of the Group's bank and other borrowings during the period compared to the same period in 2024[43](index=43&type=chunk) [Taxation](index=18&type=section&id=Taxation) Income tax expense for the period was **RMB 353 thousand**, a significant decrease from **RMB 2,074 thousand** in the prior year | Indicator | Six months ended June 30, 2025 (RMB thousand yuan) | Six months ended June 30, 2024 (RMB thousand yuan) | | :--- | :--- | :--- | | Income tax expense | 353 | 2,074 | [Loss Attributable to Owners of the Company](index=18&type=section&id=Loss%20Attributable%20to%20Owners%20of%20the%20Company) The loss attributable to owners of the Company significantly increased to **RMB 54,027 thousand** for the period, resulting in a loss per share of **RMB 0.314 cents**, primarily due to increased administrative expenses and the shift from net other gains to losses | Indicator | Six months ended June 30, 2025 (RMB thousand yuan) | Six months ended June 30, 2024 (RMB thousand yuan) | | :--- | :--- | :--- | | Loss attributable to owners of the Company | 54,027 | 15,917 | | Loss per share (RMB cents) | 0.314 | 0.092 | - The increase in loss was primarily due to increased administrative expenses and the shift from net other gains to losses during the period[45](index=45&type=chunk) [Financial Position and Liquidity](index=18&type=section&id=Financial%20Position%20and%20Liquidity) The Group experienced increased net cash inflow from operating activities, but a significant expansion of net current liabilities, deteriorating current and gearing ratios, while total borrowings slightly decreased, primarily denominated in RMB with clear repayment terms | Indicator | June 30, 2025 | December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Net cash inflow from operating activities (RMB thousand yuan) | 7,496 | 5,918 | 26.66% increase | | Non-current assets (RMB thousand yuan) | 867,278 | 855,165 | 1.42% increase | | Net current liabilities (RMB thousand yuan) | (132,157) | (63,371) | 108.55% expansion | | Current ratio | 0.82 | 0.91 | Decrease | | Gearing ratio | 59.25% | 56.69% | Increase | | Total bank and other borrowings (RMB thousand yuan) | 300,322 | 305,141 | 1.58% decrease | - Approximately **18.58%** of total borrowings were denominated in HKD, and approximately **81.42%** in RMB. Approximately **RMB 244,516 thousand** is repayable within one year, and approximately **RMB 55,806 thousand** is repayable after one year but not later than five years[47](index=47&type=chunk) [Receivables Recovery](index=19&type=section&id=Receivables%20Recovery) The Group faces two major receivables recovery challenges: **RMB 560.25 million** from Lifeng Dingsheng, with management monitoring repayment and planning to realize pledged equity, and **RMB 15 million** from Beijing Aiyihang, for which an arbitration award has been obtained and enforcement is being sought [Lifeng Dingsheng Receivables Recovery](index=19&type=section&id=Lifeng%20Dingsheng%20Receivables%20Recovery) As of June 30, 2025, Inner Mongolia Lifeng Dingsheng Automobile Co., Ltd. and its associates owe approximately **RMB 560,250,000** to the Company's wholly-owned subsidiary, Inner Mongolia Chuangying Automobile Co., Ltd. and its subsidiaries, with management monitoring repayment and planning to realize pledged equity and creditor rights - Lifeng Dingsheng receivables totaled approximately **RMB 560,250,000**[48](index=48&type=chunk) - The Group's management will continue to monitor Lifeng Dingsheng's repayment status and plans to realize its pledged equity and creditor rights through reasonable means at an appropriate time to recover the Lifeng Dingsheng receivables[48](index=48&type=chunk) [Beijing Aiyihang Receivables Recovery](index=19&type=section&id=Beijing%20Aiyihang%20Receivables%20Recovery) Newfocus Optoelectronics (Shanghai) has obtained an arbitration award for **RMB 15,000,000** owed by Beijing Aiyihang and has applied to the court for enforcement due to non-payment - The arbitration tribunal has ruled that Beijing Aiyihang shall repay Newfocus Optoelectronics (Shanghai) **RMB 15,000,000** plus interest[49](index=49&type=chunk) - Newfocus Optoelectronics (Shanghai) has applied to the court for enforcement of the arbitration tribunal's award[49](index=49&type=chunk) [Land Acquisition](index=20&type=section&id=Land%20Acquisition) Newfocus Optoelectronics (Shanghai)'s property will be acquired by the government, with an estimated compensation of approximately **RMB 368,881,000**, of which **RMB 66,399,000** has been received and recorded as deferred income, while the company actively seeks new premises to mitigate adverse impacts - The land use rights and buildings held by Newfocus Optoelectronics (Shanghai) will be acquired, with an estimated compensation of approximately **RMB 368,881,000**[50](index=50&type=chunk) - As of June 30, 2025, compensation of approximately **RMB 66,399,000** has been received and fully recognized as deferred income[51](index=51&type=chunk) - The Group's management will make every effort to mitigate potential adverse impacts of the property acquisition on the Group's normal operations, including seeking new land and/or properties for relocating production facilities[51](index=51&type=chunk) [Capital Structure](index=20&type=section&id=Capital%20Structure) The Group maintains a prudent financial management approach and sound liquidity, with total assets of **RMB 1,474,546 thousand** and total liabilities of **RMB 873,597 thousand** as of June 30, 2025, with cash and borrowings denominated in RMB, USD, and HKD, and approximately **80%** of manufacturing and trading revenue settled in USD - The Group adopts a prudent financial management approach to its treasury policy, maintaining a sound liquidity position during the period[52](index=52&type=chunk) | Indicator | June 30, 2025 (RMB thousand yuan) | December 31, 2024 (RMB thousand yuan) | | :--- | :--- | :--- | | Total assets | 1,474,546 | 1,514,432 | | Share capital | 1,490,706 | 1,490,706 | | Reserves | (889,757) | (834,754) | | Liabilities | 873,597 | 858,480 | - Approximately **80%** of the Group's manufacturing and trading business revenue comes from product exports settled in USD, while other businesses are located in China and settled in RMB[52](index=52&type=chunk) [Financial Guarantees and Asset Pledges](index=21&type=section&id=Financial%20Guarantees%20and%20Asset%20Pledges) The Group provided an equity pledge guarantee for Wenzhou Ouchu Technology's finance lease agreement, with a total net book value of approximately **RMB 152,892 thousand** in pledged inventories, investment properties, property, plant and equipment, right-of-use assets, and interests in associates as of June 30, 2025, primarily for the Group's bank and other borrowings and associate guarantees - Newfocus (Beijing) pledged its entire equity interest in Wenzhou Ouchu to Qianhai Xingbang as security for Wenzhou Ouchu's obligations under the finance lease agreement[54](index=54&type=chunk) | Pledged asset type | June 30, 2025 Net book value (RMB thousand yuan) | December 31, 2024 Net book value (RMB thousand yuan) | | :--- | :--- | :--- | | Pledged inventories, investment properties, property, plant and equipment, right-of-use assets, and interests in associates | 152,892 | 153,195 | | Guarantee purpose | Amount (RMB thousand yuan) | | :--- | :--- | | The Group's bank and other borrowings | 129,190 | | The Group's associates | 23,702 | [Acquisitions and Disposals of Subsidiaries, Associates, and Joint Ventures](index=21&type=section&id=Acquisitions%20and%20Disposals%20of%20Subsidiaries%2C%20Associates%2C%20and%20Joint%20Ventures) During the period, the Group had no other significant acquisitions or disposals of subsidiaries, associates, or joint ventures - During the period, the Group had no other significant acquisitions or disposals of subsidiaries, associates, or joint ventures[56](index=56&type=chunk) [Significant Investments](index=21&type=section&id=Significant%20Investments) The Group made several significant investments in new energy, including a terminated acquisition of an EV charging service company, an investment in Tianjin Hongzhuo for new energy and materials (project delayed), establishment of a fuel cell system production line (largely complete), construction of Qingdao Laixi Automotive Electronics Industrial Park (one plant topped out), and an investment in Shihezi Yike (indirectly in Shenzhen Yitaiji, assessing repurchase rights due to unmet performance targets) [Proposed Acquisition of Equity in a PRC Company](index=21&type=section&id=Proposed%20Acquisition%20of%20Equity%20in%20a%20PRC%20Company) Newfocus (Beijing) signed an LOI to acquire a **28.4755%** equity stake in an EV charging service company for **RMB 15,000,000** as a refundable deposit, which has since been terminated and the deposit fully refunded - Newfocus (Beijing) signed a letter of intent for the proposed acquisition of a **28.4755%** equity interest in a PRC company (primarily engaged in new energy vehicle charging services) and paid a refundable deposit of **RMB 15,000,000**[57](index=57&type=chunk) - The letter of intent has been terminated, and the transferor has returned the **RMB 15,000,000** deposit[57](index=57&type=chunk) [Investment in Tianjin Hongzhuo Enterprise Management Center (Limited Partnership)](index=22&type=section&id=Investment%20in%20Tianjin%20Hongzhuo%20Enterprise%20Management%20Center%20(Limited%20Partnership)) Newfocus (Beijing) invested **RMB 140,000,000** as a limited partner in Tianjin Hongzhuo Enterprise Management Center (Limited Partnership), which focuses on new energy and new materials, but a carbon fiber project faces construction delays, yielding no investment income or operating performance during the period - Newfocus (Beijing) invested **RMB 140,000,000** in Tianjin Hongzhuo Enterprise Management Center (Limited Partnership), which primarily invests in new energy and new materials sectors[58](index=58&type=chunk) - As of June 30, 2025, the fair value of Newfocus (Beijing)'s investment in Tianjin Hongzhuo was approximately **RMB 111,232,000**[58](index=58&type=chunk) - Tianjin Hongzhuo's carbon fiber new material project experienced delays in pipeline connection due to adjustments in construction design, and thus generated no investment income or operating performance during the period[59](index=59&type=chunk)[60](index=60&type=chunk) [Investment in Establishing a Comprehensive Fuel Cell System Production Line](index=22&type=section&id=Investment%20in%20Establishing%20a%20Comprehensive%20Fuel%20Cell%20System%20Production%20Line) Jinyi (Mianyang) Hydrogen Energy Technology Co., Ltd., an indirect non-wholly-owned subsidiary, acquired a comprehensive fuel cell system production line for **RMB 298,000,000**, with construction and commissioning largely complete, trial products meeting technical standards, and formal production to commence upon order receipt - Jinyi (Mianyang) Hydrogen Energy Technology Co., Ltd. acquired a comprehensive fuel cell system production line and related equipment for a total consideration of **RMB 298,000,000**[61](index=61&type=chunk) - Construction of the production area and overall commissioning of the production line have largely been completed, with trial products passing third-party inspection and meeting predetermined technical standards[62](index=62&type=chunk) - These production lines will commence formal production upon receipt of orders[62](index=62&type=chunk) [Self-built Industrial Park of the Group](index=23&type=section&id=Self-built%20Industrial%20Park%20of%20the%20Group) The Group is constructing the Qingdao Laixi Automotive Electronics Industrial Park at a cost of **RMB 290,212,000** for new energy automotive electronic components, with **RMB 207,000,000** paid, one plant topped out and civil/ME installations complete, and ongoing discussions with local government for completion plans - The Group is constructing the Qingdao Laixi Automotive Electronics Industrial Park, at a cost of **RMB 290,212,000**, planned for the production of new energy automotive electronic components[63](index=63&type=chunk) - Approximately **RMB 207,000,000** has been paid to the contractor, and one plant under construction has been topped out with civil engineering and mechanical and electrical installations completed[63](index=63&type=chunk) - The Group is in communication with the Laixi Municipal Government of Qingdao, Shandong Province, to determine the specific completion plans for this plant and other uncommenced buildings in the industrial park[63](index=63&type=chunk) [Investment in Shihezi Yike](index=23&type=section&id=Investment%20in%20Shihezi%20Yike) Newfocus (Beijing) invested **RMB 55,000,000** in Shihezi Yike, indirectly investing in Shenzhen Yitaiji, and has issued a repurchase notice due to Shenzhen Yitaiji's failure to meet performance targets, currently evaluating whether to continue exercising repurchase rights - Newfocus (Beijing) invested **RMB 55,000,000** in Shihezi Yike, indirectly investing in Shenzhen Yitaiji[65](index=65&type=chunk) - As of June 30, 2025, the fair value of Newfocus (Beijing)'s investment in Shihezi Yike was approximately **RMB 51,778,000**[66](index=66&type=chunk) - Shenzhen Yitaiji failed to meet its performance commitments, and Newfocus (Beijing) has issued a repurchase notice, currently assessing whether to continue exercising its repurchase rights[67](index=67&type=chunk) [Funds Raised](index=24&type=section&id=Funds%20Raised) The Company previously issued unlisted unsecured bonds of up to **HKD 70 million**, with **HKD 13 million** redeemed and the distribution period concluded; it also revised the use of approximately **HKD 224.51 million** from the 2022 subscription for hydrogen business investments, with some funds delayed due to prolonged government communication [Issuance of Bonds](index=24&type=section&id=Issuance%20of%20Bonds) The Company approved the issuance of unlisted unsecured bonds totaling up to **HKD 70,000,000** at an annual interest rate of **12%**, all of which have been redeemed, and the distribution period has concluded - The Board approved the issuance of unlisted unsecured bonds with a principal amount not exceeding **HKD 70,000,000**, maturing on **December 31, 2027**, at an annual interest rate of **12%**[68](index=68&type=chunk) - As of the date of this announcement, all subscribed bonds totaling **HKD 13,000,000** have been redeemed, and the distribution period concluded during the period[68](index=68&type=chunk) [Use of Proceeds from Subscription](index=24&type=section&id=Use%20of%20Proceeds%20from%20Subscription) The Company completed a subscription in 2022, raising approximately **HKD 615 million** net, with the Board resolving to reallocate approximately **HKD 224.51 million** (approximately **RMB 206 million**) for hydrogen business investments, but some funds (HKD 43.69 million) remain unutilized due to extended government communication, with a plan expected by December 31, 2025 - The Company completed a subscription on **December 11, 2022**, raising net proceeds of approximately **HKD 615 million**[69](index=69&type=chunk) - The Board resolved on **September 25, 2023**, to change the use of approximately **HKD 224.51 million** (equivalent to approximately **RMB 206 million**) of the proceeds for investment in the hydrogen business[69](index=69&type=chunk) Use of Proceeds from Subscription (As of June 30, 2025) | Purpose | Net proceeds allocated after revision (HKD million) | Net proceeds utilized as of June 30, 2025 (HKD million) | Net proceeds unutilized as of June 30, 2025 (HKD million) | | :--- | :--- | :--- | :--- | | Enhance the Company's manufacturing capabilities - purchase of land use rights | 43.69 | – | 43.69 | | Enhance the Company's manufacturing capabilities - construction of new production plants and other supporting facilities | 234.4 | 234.4 | – | | Repayment of the Group's remaining bank and other loans | 111 | 111 | – | | General working capital of the Group - employee remuneration | 1.4 | 1.4 | – | | Capital contribution to Jinyi and Mianyang Xinhydrogen | 224.51 | 224.51 | – | | **Total** | **615** | **571.31** | **43.69** | - The Company plans to finalize the utilization plan for the remaining funds by **December 31, 2025**, as discussions with local governments took longer than expected[71](index=71&type=chunk) [Exchange Rate Risk](index=26&type=section&id=Exchange%20Rate%20Risk) The Group's automotive dealership and services business has no exchange rate risk, but its manufacturing and trading business, with **80%** of revenue in USD and raw materials in RMB, is negatively impacted by USD depreciation against RMB, managed by borrowing HKD - The Group's automotive dealership and services business is located in China, with transactions settled in RMB, thus posing no exchange rate risk[72](index=72&type=chunk) - Approximately **80%** of the Group's manufacturing and trading business revenue comes from product exports settled in USD, while raw materials for these products are purchased in RMB, so a depreciation of the USD against the RMB generally has a negative impact on the profitability of the Group's manufacturing and trading business[72](index=72&type=chunk) - The Group manages its USD foreign exchange risk by borrowing USD or HKD to mitigate exchange rate risk. As of June 30, 2025, HKD borrowings amounted to approximately **HKD 61,191,000**[72](index=72&type=chunk) [Contingent Liabilities](index=26&type=section&id=Contingent%20Liabilities) As of June 30, 2025, the Group's contingent liabilities increased to approximately **RMB 20,539 thousand** from **RMB 12,178 thousand** as of December 31, 2024, primarily due to lawsuits filed by two third parties against the Company's subsidiaries | Indicator | June 30, 2025 (RMB thousand yuan) | December 31, 2024 (RMB thousand yuan) | | :--- | :--- | :--- | | Contingent liabilities | 20,539 | 12,178 | - Contingent liabilities arose from several lawsuits filed by two third parties against the Company's subsidiaries[73](index=73&type=chunk) [Litigation](index=27&type=section&id=Litigation) The Group is involved in two main lawsuits: a sales contract dispute with Ningbo Jiche against Inner Mongolia Chuangying for **RMB 8.5068 million** in goods and damages, currently transferred to court with no substantial progress, and a land lease dispute between Newfocus Optoelectronics (Shanghai) and Shanghai Jianjing Industrial Co., Ltd. regarding compensation for contract termination due to property acquisition, with both parties filing lawsuits and counterclaims [Ningbo Jiche v. Inner Mongolia Chuangying](index=27&type=section&id=Ningbo%20Jiche%20v.%20Inner%20Mongolia%20Chuangying) Ningbo Jiche Trading Co., Ltd. sued Inner Mongolia Chuangying Automobile Co., Ltd. for breach of a sales contract, demanding payment of **RMB 8,506,800** in outstanding goods and compensation, with the case transferred to Beijing Dongcheng District People's Court and no substantial progress, potentially incurring a contingent liability of approximately **RMB 12,178,000** - Ningbo Jiche claimed that Inner Mongolia Chuangying breached the 'Sales Contract' by failing to pay outstanding goods amounting to **RMB 8,506,800**[74](index=74&type=chunk) - The case has been transferred by the Huimin District People's Court of Hohhot to the Beijing Dongcheng District People's Court for trial, with no trial date set yet, thus no substantial progress has been made[74](index=74&type=chunk) - The principal amount of contingent liabilities that these lawsuits may cause to the Group is approximately **RMB 12,178,000**[74](index=74&type=chunk) [Newfocus Optoelectronics (Shanghai) Land Lease Dispute](index=28&type=section&id=Newfocus%20Optoelectronics%20(Shanghai)%20Land%20Lease%20Dispute) Newfocus Optoelectronics (Shanghai) terminated its land lease contract with Shanghai Jianjing Industrial Co., Ltd. due to property acquisition, leading to a dispute over compensation, with Jianjing Industrial demanding **RMB 8,361,125** for ancillary facilities and Newfocus Optoelectronics (Shanghai) counter-suing for **RMB 900,000** in overdue rent, potentially resulting in a contingent liability of approximately **RMB 8,361,125** - Newfocus Optoelectronics (Shanghai) issued a written notice to Jianjing Industrial, stating its intention to terminate the 'Land Lease Contract' due to property acquisition[76](index=76&type=chunk) - Jianjing Industrial demanded Newfocus Optoelectronics (Shanghai) pay **RMB 8,361,125** for ancillary facilities compensation[78](index=78&type=chunk) - Newfocus Optoelectronics (Shanghai) has filed a counterclaim, demanding Jianjing Industrial pay **RMB 900,000** in overdue rent[78](index=78&type=chunk) - The principal amount of contingent liabilities that these lawsuits may cause to the Group is approximately **RMB 8,361,125**[77](index=77&type=chunk) [Employees and Remuneration Policy](index=29&type=section&id=Employees%20and%20Remuneration%20Policy) As of June 30, 2025, the Group's total full-time employees increased to **728**, including **199** management personnel, with a remuneration policy designed to attract and retain talent through competitive compensation, social insurance, benefits, and continuous training | Indicator | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Total full-time employees | 728 | 653 | | Management personnel | 199 | 140 | - The Group's remuneration policy aims to attract and retain talent, with a compensation package including salaries, bonuses, and allowances, along with social insurance and benefits[79](index=79&type=chunk) - The Group values employee development and continuously provides relevant training programs based on its strategic objectives and employee performance[79](index=79&type=chunk) [Dividends](index=29&type=section&id=Dividends) The Board of Directors does not recommend the payment of an interim dividend for the current period - The Board does not recommend the payment of an interim dividend for the period (same period in 2024: nil)[80](index=80&type=chunk) [Material Post-Reporting Period Events](index=29&type=section&id=Material%20Post-Reporting%20Period%20Events) No material post-reporting period events affecting the Group have occurred from the end of the period up to the date of this announcement - No material post-reporting period events affecting the Group have occurred from the end of the period up to the date of this announcement[81](index=81&type=chunk) [Industry Development and Business Progress](index=29&type=section&id=Industry%20Development%20and%20Business%20Progress) China's automotive market saw sales growth but faces economic uncertainties and policy changes, while the hydrogen energy industry advances steadily with policy support and technological innovation, despite high operating costs. The Group's automotive dealership business is largely stagnant, manufacturing and trading revenue grew with new market expansion and new energy products, and hydrogen production lines are ready for market expansion [Automotive Industry Overview](index=29&type=section&id=Automotive%20Industry%20Overview) China's automotive sales increased by **11.4%** and passenger car sales by **13%** during the period, supported by macro policies, but the industry faces challenges from economic recovery uncertainty, consumer confidence, global trade, and evolving NEV policies, pressuring overall profitability - During the period, China's automobile sales were approximately **15.653 million** units, a year-on-year increase of approximately **11.4%**; passenger car sales were approximately **13.531 million** units, a year-on-year increase of approximately **13%**[82](index=82&type=chunk) - The industry faces challenges including doubts about the sustainability of economic recovery, insufficient consumer confidence, uncertainties in the global trade environment, the impending withdrawal of new energy vehicle purchase tax exemptions, and the suspension of car replacement subsidies in some regions[82](index=82&type=chunk) [Hydrogen Energy Industry Overview](index=29&type=section&id=Hydrogen%20Energy%20Industry%20Overview) The hydrogen energy industry is steadily advancing with policy guidance and technological innovation in China, supported by national energy policies for pilot projects and financial aid, leading to commercialization progress and cost reduction, yet facing challenges of high operating costs, market acceptance, and increased competition - The hydrogen energy-related industry is steadily advancing under policy guidance and technological innovation, with China's National Energy Administration issuing notices to select pilot projects and regions for hydrogen production, storage, transportation, application, and common support, along with supporting measures such as loans[83](index=83&type=chunk) - China's fuel cell industry is progressing in its commercialization, with continuous technological advancements and gradual reductions in production costs[83](index=83&type=chunk) - Opportunities and challenges coexist in the industry's development, with challenges including high commercial operating costs, the need for improved market acceptance, and increased competition due to rising industry interest attracting new entrants[83](index=83&type=chunk) [Automotive Dealership and Services Business](index=30&type=section&id=Automotive%20Dealership%20and%20Services%20Business) The Group's automotive dealership and services network in Inner Mongolia has largely ceased operations in most areas, with only limited repair services for legacy customer issues, while remaining operations focus on optimizing cost control and strengthening operational resilience - During the period, most related businesses in the region have largely ceased operations, with only some repair services remaining to address legacy customer issues from past operations[84](index=84&type=chunk) - Related businesses in individual regions remain operational, with their current core objective being to optimize cost control systems, reasonably manage various operating expenses, and strengthen operational resilience[84](index=84&type=chunk) [The Group's Manufacturing and Trading Business](index=30&type=section&id=The%20Group's%20Manufacturing%20and%20Trading%20Business) The Group's manufacturing and trading business revenue increased by **6.65%**, driven by new market and customer expansion despite US-China relations, with foreign trade up **4.90%** and domestic trade up **13.52%**, though gross profit margin slightly declined due to lower margins on new customer and high-volume domestic products. Operational improvements include a new EMC lab, expanded R&D into new energy products, and lean manufacturing, with future focus on African and Australian markets, mobile energy storage, RV power products, and commercial vehicle power solutions | Indicator | Six months ended June 30, 2025 | Six months ended June 30, 2024 | Year-on-year growth (%) | | :--- | :--- | :--- | :--- | | Manufacturing and Trading Business Revenue | 200,102 thousand yuan | 187,631 thousand yuan | 6.65% | | Foreign Trade Revenue | - | - | 4.90% | | Domestic Trade Business Revenue | - | - | 13.52% | - The decrease in gross profit and gross profit margin was mainly due to lower gross profit margins for products purchased by new foreign trade energy storage customers, and also lower gross profit margins for high-volume domestic trade products[85](index=85&type=chunk) - The newly built electromagnetic compatibility (EMC) laboratory officially commenced operations in **March 2024**, and the scope of R&D products has gradually expanded from traditional single power supplies and inverters to the new energy product sector[86](index=86&type=chunk) - In the future, the export business segment will focus on developing markets in Africa and Australia, concentrating on mobile energy storage and RV power products; it will also increase its presence in commercial vehicle power products and electric industrial vehicle power products, and launch truck lithium battery products[87](index=87&type=chunk) [Hydrogen Energy Related Industry](index=31&type=section&id=Hydrogen%20Energy%20Related%20Industry) The Group's hydrogen energy-related industry, as a provider of R&D, sales, and integrated solutions for hydrogen fuel cells, has completed production area construction and line commissioning, with trial products passing third-party inspection, and is actively pursuing tenders and engaging clients to develop "fuel cell system + distributed power station" products and collaborate with industry partners to become a comprehensive hydrogen energy solution provider - The Group's hydrogen energy-related company has completed the construction of the production area and the overall commissioning of the production lines for the hydrogen energy project, with trial products passing third-party inspection and meeting predetermined technical standards[88](index=88&type=chunk) - The relevant business team is actively pursuing bidding opportunities and engaging with domestic and international clients[88](index=88&type=chunk) - The Group's hydrogen energy-related company will focus on "fuel cell system + distributed power station" as its main products, creating demonstration scenarios for hydrogen applications in transportation and data centers, and is committed to strengthening cooperation with industry partners in hydrogen production, storage, and refueling to establish the Group as a comprehensive hydrogen energy solution provider[89](index=89&type=chunk) [Outlook](index=31&type=section&id=Outlook) The Group's principal businesses operate in large markets with significant growth potential, and management will continue to strengthen operations to improve performance across all business segments - The Group's principal businesses operate in large markets with significant development potential[90](index=90&type=chunk) - The Group will continuously strengthen management to improve the operating performance of all businesses as soon as possible[90](index=90&type=chunk) [Corporate Governance and Other Information](index=31&type=section&id=Corporate%20Governance%20and%20Other%20Information) [Corporate Governance](index=31&type=section&id=Corporate%20Governance) The Company complied with the HKEX Corporate Governance Code during the period, despite disciplinary actions from the HKEX against the Company, a current director, and six former directors for delayed disclosure, inadequate internal controls, inaccurate information, and failure to seek timely shareholder approval, with the current executive director, Mr. Tong Fei, required to undergo regulatory and legal training - The Directors believe that the Company has complied with the code provisions of the Corporate Governance Code set out in Appendix C1 to the HKEX Listing Rules throughout the period[91](index=91&type=chunk) - The HKEX Listing Committee found the Company in breach of Listing Rules 14.34 (delayed disclosure of unauthorized transactions, loans, and establishment of new companies), 13.15, 14.38A, and 14.40 (delayed disclosure, dispatch of circulars, and failure to seek shareholder approval), 2.13 (inaccurate and incomplete disclosure of loans), and 14A.35 (delayed disclosure of establishment of new companies)[93](index=93&type=chunk) - Executive Director Mr. Tong Fei breached Listing Rules 3.08 and 3.09B(2) for failing to ensure the Company implemented adequate and effective internal controls, failing to report relevant matters to the Board in a timely manner, and failing to use his best endeavors to procure the Company's compliance with the Listing Rules[94](index=94&type=chunk) - Former Directors Mr. Zhang Xiaoya and Ms. Shi Jing breached Listing Rules 3.09C and 3.20 for failing to cooperate with the HKEX Listing Division's investigation[95](index=95&type=chunk) - Executive Director Mr. Tong Fei is undergoing **26 hours** of training on regulatory and legal issues and Listing Rules compliance matters as directed by the HKEX[96](index=96&type=chunk) [Purchase, Sale, or Redemption of the Company's Listed Securities](index=33&type=section&id=Purchase%2C%20Sale%2C%20or%20Redemption%20of%20the%20Company's%20Listed%20Securities) The Group did not purchase, sell, or redeem any of the Company's listed securities during the period - The Group did not purchase, sell, or redeem any of the Company's listed securities during the period[98](index=98&type=chunk) [Directors' Securities Transactions](index=33&type=section&id=Directors'%20Securities%20Transactions) The Company adopted the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix C3 of the Listing Rules, and all Directors confirmed compliance with its provisions during the period after specific inquiries - The Company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix C3 to the Listing Rules[99](index=99&type=chunk) - Following specific inquiries with all Directors, all Directors confirmed their compliance with the provisions of the Model Code throughout the period[99](index=99&type=chunk) [Audit Committee](index=33&type=section&id=Audit%20Committee) The Audit Committee reviewed the Group's accounting policies and practices with management, discussing auditing, risk management, internal controls, and financial reporting matters, including the unaudited condensed consolidated interim financial statements for the period - The Audit Committee has reviewed the accounting policies and practices adopted by the Group with management and discussed auditing, risk management, internal controls, and financial reporting matters, including the Group's unaudited condensed consolidated interim financial statements for the period[100](index=100&type=chunk) [Publication of Interim Results Announcement and Interim Report](index=33&type=section&id=Publication%20of%20Interim%20Results%20Announcement%20and%20Interim%20Report) This interim results announcement is published on the HKEX and Company websites, and the 2025 interim report will be dispatched to shareholders requesting printed communications and published on the HKEX and Company websites in due course - This interim results announcement is published on the HKEX website (www.hkexnews.hk) and the Company's website (www.nfa360.com)[101](index=101&type=chunk) - The 2025 interim report will be dispatched to shareholders of the Company who have requested printed communications and will be published on the HKEX and the Company's websites in due course[101](index=101&type=chunk)