[Company Overview and Business Highlights](index=1&type=section&id=Company%20Overview%20and%20Business%20Highlights) The company capitalized on the Hong Kong capital market recovery in H1 2025, particularly in biotechnology, achieving breakthroughs in R&D, early-stage research, Envafolimab® indications, and nuclear medicine and mRNA platforms, entering a new phase of "dual-driven growth and global innovation breakthroughs" [Business Summary](index=1&type=section&id=Business%20Summary) The company achieved significant breakthroughs in R&D, early-stage research, Envafolimab® indications, and nuclear medicine and mRNA platforms, entering a new phase of dual-driven growth and global innovation - The Hong Kong capital market recovered in H1 2025, with biotechnology ETFs performing strongly, presenting opportunities for the company[4](index=4&type=chunk) - The company prudently increased early-stage research, guided by forward-looking clinical needs, and successfully expanded Envafolimab® indications[4](index=4&type=chunk) - Multiple proprietary nuclear medicine and mRNA platform products with global intellectual property rights are advancing clinical research[4](index=4&type=chunk) - The company entered a new era of "dual-driven growth and global innovation breakthroughs," deepening global strategic collaborations[4](index=4&type=chunk) [Strategic Transformation and Core Platforms](index=7&type=section&id=Strategic%20Transformation%20and%20Core%20Platforms) The company is strategically shifting from chronic tumor management to prevention of metastasis and recurrence, leveraging RDC and LNP-mRNA platforms to establish a tumor prevention system driven by unmet medical needs and technological advancements - The company's strategy expanded from chronic tumor management and precision therapy to preventing tumor metastasis and recurrence, aiming to establish a tumor prevention system via RDC and LNP-mRNA platforms[18](index=18&type=chunk) - This strategic evolution is driven by unmet medical needs, technological advancements, and the company's positioning, adapting to the trend of tumor chronicity[18](index=18&type=chunk)[19](index=19&type=chunk) - The RDC platform has established a full closed-loop R&D system covering molecular design, screening, and preclinical evaluation, focusing on PSMA and FAP targets[19](index=19&type=chunk) - The AI-driven LNP-mRNA platform shows promising prospects in tumor vaccines, offering high specificity, good safety, strong efficacy, and durable immunity[19](index=19&type=chunk) [Financial Performance](index=4&type=section&id=Financial%20Performance) The company's financial performance for the period shows a narrowed comprehensive loss, driven by stable revenue and effective cost control [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=4&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For the six months ended June 30, 2025, the company reported revenue of **RMB 209,167 thousand**, gross profit of **RMB 192,907 thousand**, and a total comprehensive loss of **RMB 92,634 thousand**, which narrowed compared to the prior year period Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Revenue | 209,167 | 206,422 | 2,745 | 1.3% | | Cost of sales | (16,260) | (17,473) | 1,213 | -6.9% | | Gross profit | 192,907 | 188,949 | 3,958 | 2.1% | | Other income and net gains | 17,700 | 22,437 | (4,737) | -21.1% | | Research and development expenses | (83,121) | (85,291) | 2,170 | -2.5% | | Administrative expenses | (29,735) | (43,504) | 13,769 | -31.6% | | Selling and marketing expenses | (111,547) | (110,078) | (1,469) | 1.3% | | Royalty fees | (17,637) | (15,619) | (2,018) | 12.9% | | Other expenses | (55,050) | (61,134) | 6,084 | -9.9% | | Finance costs | (3,303) | (5,063) | 1,760 | -34.8% | | Impairment losses on financial assets | (2,903) | (4,771) | 1,868 | -39.2% | | Loss before tax | (92,689) | (114,074) | 21,385 | -18.7% | | Income tax expense | 55 | – | 55 | N/A | | Total comprehensive loss for the period | (92,634) | (114,074) | 21,440 | -18.8% | [Revenue and Gross Profit Analysis](index=5&type=section&id=Revenue%20and%20Gross%20Profit%20Analysis) During the reporting period, the company's revenue primarily stemmed from Envafolimab® sales, increasing **1.3%** to **RMB 209.2 million**, with gross profit rising **2.1%** to **RMB 192.9 million** and gross margin slightly increasing to **92.2%**, driven by higher sales volume and reduced surcharges - Revenue primarily from Envafolimab® sales, increasing **1.3%** year-on-year to **RMB 209.2 million**[10](index=10&type=chunk)[49](index=49&type=chunk) - Gross profit increased **2.1%** year-on-year to **RMB 192.9 million**, with gross margin slightly rising from **91.5%** to **92.2%**[12](index=12&type=chunk)[51](index=51&type=chunk) - Cost of sales decreased **6.9%** to **RMB 16.3 million**, primarily due to reduced related surcharges and taxes[11](index=11&type=chunk)[50](index=50&type=chunk) [Expense Analysis](index=5&type=section&id=Expense%20Analysis) The company effectively controlled various expenses during the reporting period, with R&D and administrative expenses decreasing, selling and marketing expenses remaining stable, and royalty fees increasing due to higher sales volume [Research and Development Expenses](index=5&type=section&id=Research%20and%20Development%20Expenses) R&D expenses decreased **2.5%** year-on-year to **RMB 83.1 million**, primarily due to reduced employee welfare expenses related to R&D personnel - R&D expenses decreased **2.5%** year-on-year to **RMB 83.1 million**[13](index=13&type=chunk)[53](index=53&type=chunk) - The decrease was primarily attributable to a **RMB 2.6 million** reduction in employee welfare expenses related to R&D personnel[13](index=13&type=chunk)[53](index=53&type=chunk) [Selling and Marketing Expenses](index=6&type=section&id=Selling%20and%20Marketing%20Expenses) Selling and marketing expenses increased **1.3%** year-on-year to **RMB 111.5 million**, primarily due to increased Envafolimab® sales, with the expense ratio remaining stable at **53.3%**, reflecting a mature business model - Selling and marketing expenses increased **1.3%** year-on-year to **RMB 111.5 million**[14](index=14&type=chunk)[55](index=55&type=chunk) - The expense ratio remained stable at **53.3%** in both H1 2024 and H1 2025, indicating a mature business model[14](index=14&type=chunk)[55](index=55&type=chunk) [Administrative Expenses](index=22&type=section&id=Administrative%20Expenses) Administrative expenses significantly decreased **31.6%** year-on-year to **RMB 29.7 million**, primarily due to reductions in share-based payment expenses, legal and professional fees, and depreciation and amortization expenses - Administrative expenses decreased by **RMB 13.8 million** year-on-year to **RMB 29.7 million**[54](index=54&type=chunk) - The decrease was primarily due to a **RMB 1.8 million** reduction in share-based payment expenses, a **RMB 6.8 million** reduction in legal and professional fees, and a **RMB 5.5 million** reduction in depreciation and amortization expenses[54](index=54&type=chunk) [Royalty Fees and Other Expenses](index=23&type=section&id=Royalty%20Fees%20and%20Other%20Expenses) Royalty fees increased **12.9%** year-on-year to **RMB 17.6 million** due to higher Envafolimab® sales, while other expenses primarily included donations and net exchange losses - Royalty fees increased by **RMB 2.0 million** year-on-year to **RMB 17.6 million**, primarily due to increased Envafolimab® sales volume[56](index=56&type=chunk) - Other expenses primarily included donations of **RMB 51.192 million** and net exchange losses of **RMB 3.612 million**[98](index=98&type=chunk) [Loss Performance](index=6&type=section&id=Loss%20Performance) Total comprehensive loss for the period decreased **18.8%** year-on-year to **RMB 92.6 million**, primarily benefiting from increased gross profit due to sales growth and excellent administrative expense control - Total comprehensive loss for the period decreased by **RMB 21.5 million** year-on-year to **RMB 92.6 million**[15](index=15&type=chunk)[57](index=57&type=chunk) - The reduction in loss was primarily attributable to a **RMB 4.0 million** increase in gross profit and **RMB 13.8 million** in administrative expense savings[15](index=15&type=chunk) [Non-IFRS Measures](index=6&type=section&id=Non-IFRS%20Measures) Adjusted total comprehensive loss for the period narrowed to **RMB 72.151 million** from **RMB 97.659 million** in the prior year, supplementing IFRS loss measures by adding back share-based payment expenses Non-IFRS Measures | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Total comprehensive loss for the period | (92,634) | (114,074) | 21,440 | -18.8% | | Add: Share-based payment expenses | 20,483 | 16,415 | 4,068 | 24.8% | | Adjusted total comprehensive loss for the period | (72,151) | (97,659) | 25,508 | -26.1% | - Adjusted loss and total comprehensive loss for the period are calculated by adding back share-based payment expenses, aiming to provide a more comprehensive assessment of operating performance[16](index=16&type=chunk)[58](index=58&type=chunk) [Condensed Consolidated Statement of Financial Position](index=24&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, total assets were **RMB 1,141,975 thousand**, a decrease from **RMB 1,216,256 thousand** at year-end 2024, with net current assets declining from **RMB 499,963 thousand** to **RMB 297,712 thousand** Condensed Consolidated Statement of Financial Position | Metric | 2025 June 30 (RMB thousands) | 2024 Dec 31 (RMB thousands) | Change (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Total non-current assets | 339,376 | 228,505 | 110,871 | 48.5% | | Total current assets | 802,599 | 987,751 | (185,152) | -18.7% | | Total assets | 1,141,975 | 1,216,256 | (74,281) | -6.1% | | Total non-current liabilities | 5,021 | 24,754 | (19,733) | -79.7% | | Total current liabilities | 504,887 | 487,788 | 17,099 | 3.5% | | Total liabilities | 509,908 | 512,542 | (2,634) | -0.5% | | Net assets | 632,067 | 703,714 | (71,647) | -10.2% | [Liquidity and Cash Flows](index=25&type=section&id=Liquidity%20and%20Cash%20Flows) As of June 30, 2025, total current assets were **RMB 802.6 million**, with cash and bank balances totaling **RMB 615.3 million**, a **RMB 225.7 million** decrease from year-end 2024, primarily due to reduced bank loans and payment for strategic cooperation consideration, resulting in a net cash outflow of **RMB 205.8 million** from operating activities - Total current assets were **RMB 802.6 million**, and cash and bank balances totaled **RMB 615.3 million**, a **RMB 225.7 million** decrease from year-end 2024[61](index=61&type=chunk) - The decrease in cash was primarily due to reduced bank loans resulting from timing differences in loan renewals and payment of strategic cooperation consideration to Qingdao Hainuo[61](index=61&type=chunk) - Net cash used in operating activities was **RMB 205.8 million**, net cash used in investing activities was **RMB 94.3 million**, and net cash used in financing activities was **RMB 75.6 million**[62](index=62&type=chunk) [Product Pipeline and R&D Progress](index=2&type=section&id=Product%20Pipeline%20and%20R%26D%20Progress) The company's product pipeline demonstrates significant progress in commercialization and clinical development, particularly for Envafolimab®, RDC, and AI LNP-mRNA platforms, alongside other promising investigational drugs [Envafolimab®](index=2&type=section&id=Envafolimab%C2%AE) Envafolimab®, China's sole commercialized subcutaneous PD-L1 inhibitor, achieved **RMB 209.2 million** in sales revenue in H1 2025, a **1.3%** year-on-year increase, with clinical research results presented at ASCO and inclusion in 19 authoritative clinical guidelines, marking the full launch of its global commercialization [Commercialization Progress](index=2&type=section&id=Commercialization%20Progress) Envafolimab® achieved **RMB 209.2 million** in sales revenue in H1 2025, a **1.3%** year-on-year increase, with total sales reaching approximately **RMB 1.9 billion**, now sold in over **3,000 hospitals** and **760+ pharmacies** across **30 provinces** and **305 cities** in China, included in **36 city-level "Huiminbao" schemes**, and with a global commercialization strategy initiated through an overseas licensing agreement with Glenmark - Envafolimab® H1 sales revenue reached **RMB 209.2 million**, a **1.3%** year-on-year increase[5](index=5&type=chunk)[20](index=20&type=chunk) - It has been included in **19** latest authoritative Chinese and international clinical guidelines and consensuses[5](index=5&type=chunk)[21](index=21&type=chunk)[29](index=29&type=chunk) - It is sold in over **3,000 hospitals** and **760+ pharmacies** across **30 provinces** and **305 cities** in China, and included in **36 city-level "Huiminbao" schemes**[43](index=43&type=chunk) - An overseas licensing agreement has been reached with Glenmark, fully initiating its global commercialization strategy[21](index=21&type=chunk) [Clinical Research Results](index=2&type=section&id=Clinical%20Research%20Results) Envafolimab® presented **11** research findings at the 2025 ASCO Annual Meeting, covering various tumor types including high tumor mutational burden advanced solid tumors, extensive-stage small cell lung cancer, resectable non-small cell lung cancer, biliary tract cancer, pancreatic cancer, esophageal squamous cell carcinoma, and sarcoma, with both monotherapy and combination regimens demonstrating significant efficacy and good safety - **11** research findings were presented at the ASCO Annual Meeting, covering **7+** tumor types, including high tumor mutational burden advanced solid tumors, small cell lung cancer, and non-small cell lung cancer[5](index=5&type=chunk)[26](index=26&type=chunk) - Monotherapy for advanced solid tumor patients with tTMB≥13 mut/Mb achieved an ORR of **33.3%** and a mDOR of up to **20.2 months**[5](index=5&type=chunk)[26](index=26&type=chunk) - First-line combination with chemotherapy for extensive-stage small cell lung cancer achieved an ORR of **87.1%** and a median OS of **20 months**[5](index=5&type=chunk)[27](index=27&type=chunk) - Neoadjuvant therapy for resectable non-small cell lung cancer achieved an MPR of **40%** and a pCR of **20%**, with the added convenience of subcutaneous administration[7](index=7&type=chunk)[27](index=27&type=chunk) - Combination with recombinant human endostatin and chemotherapy for advanced squamous non-small cell lung cancer achieved an ORR of **65.4%** and a median OS of **24.6 months**[7](index=7&type=chunk)[28](index=28&type=chunk) [Guideline Recommendations](index=13&type=section&id=Guideline%20Recommendations) As of June 2025, Envafolimab® has received recommendations in **19** latest authoritative domestic and international clinical guidelines and expert consensuses, covering various cancer types including cervical, uterine, ovarian, gastric, colorectal, lung, and esophageal cancers, further solidifying its clinical position - Envafolimab® has been recommended in **19** latest authoritative domestic and international clinical guidelines and expert consensuses[29](index=29&type=chunk) - Recommendations include NCCN guidelines (cervical cancer, uterine tumors, ovarian cancer) and CSCO guidelines (endometrial cancer, cervical cancer, ovarian cancer, immune checkpoint inhibitors, gastric cancer, colorectal cancer, lung cancer, esophageal cancer, etc)[29](index=29&type=chunk) [Radioligand Drug Conjugate (RDC) Platform](index=3&type=section&id=Radioligand%20Drug%20Conjugate%20(RDC)%20Platform) The company has established a comprehensive RDC platform covering molecular design, screening, and preclinical evaluation, focusing on PSMA and FAP targets, with its first self-developed **177Lu-labeled PSMA-targeted RDC drug 3D1015** entering investigator-initiated trial (IIT) phase, demonstrating significant differentiated advantages and excellent safety in preclinical studies - A complete platform covering RDC molecular design, screening, and preclinical evaluation has been established, forming a full closed-loop R&D system[6](index=6&type=chunk)[19](index=19&type=chunk) - Radionuclide selection covers **⁶⁸Ga**, **¹⁷⁷Lu**, and **²²⁵Ac**, with a focus on developing PSMA and FAP targets[6](index=6&type=chunk)[19](index=19&type=chunk) - The first self-developed **¹⁷⁷Lu-labeled PSMA-targeted RDC drug 3D1015** has entered the IIT phase, with preclinical studies showing significant tumor inhibition even at one-tenth the dose of Pluvicto[6](index=6&type=chunk)[32](index=32&type=chunk)[33](index=33&type=chunk) - A FAP-targeted ligand demonstrated excellent binding affinity in in vitro experiments and is currently undergoing preclinical evaluation[6](index=6&type=chunk) [AI LNP-mRNA Platform](index=4&type=section&id=AI%20LNP-mRNA%20Platform) The company has successfully localized its AI-mRNA technology platform, possessing full intellectual property rights and global commercialization rights, with its first off-the-shelf tumor vaccine **3D124** (based on the self-developed "3D-PreciseAg" platform and 3D-B051-LNP delivery system) planned for IND submission in Q1 2026, and multiple innovative therapies for hematological and solid tumors under development - Successfully localized the AI-mRNA technology platform, possessing full intellectual property rights and global commercialization rights[8](index=8&type=chunk) - The first off-the-shelf tumor vaccine **3D124** (targeting multiple tumor antigens such as KRAS, NRAS, EGFR) is planned for IND submission in Q1 2026[8](index=8&type=chunk)[33](index=33&type=chunk)[34](index=34&type=chunk) - The self-developed LNP delivery system (**3D-B051-LNP**) has filed a PCT international patent application and is highly effective in inducing cellular and humoral immune responses[23](index=23&type=chunk)[34](index=34&type=chunk) - The pipeline also includes the **3D125** tumor vaccine for small cell lung cancer and in vivo CAR-T projects based on mRNA technology[8](index=8&type=chunk) [Other Pipeline Products](index=14&type=section&id=Other%20Pipeline%20Products) Other pipeline products include **3D185** (FGFR1/2/3 inhibitor) with smooth Phase I trial progress, **3D189** (WT1 peptide vaccine) with Phase I recruitment completed and positive IDMC evaluation for its global Phase III multicenter clinical study, as well as **3D057** (PD-L1 and CD3 bispecific antibody) and **3D062** (KRAS mutation inhibitor) - **3D185** (FGFR1/2/3 inhibitor) Phase I clinical trial is progressing smoothly, aiming to evaluate safety, tolerability, pharmacokinetics, and preliminary efficacy[30](index=30&type=chunk) - **3D189** (WT1 peptide vaccine) Phase I clinical study completed patient enrollment in China, with no new safety signals observed and WT1-specific immune responses noted[31](index=31&type=chunk) - The global Phase III REGAL trial of **3D189** (in collaboration with SELLAS) has received four positive evaluations from the Independent Data Monitoring Committee (IDMC), supporting its continued advancement[31](index=31&type=chunk) - **3D057**, a PD-L1 and CD3 bispecific antibody developed based on the ALiCE platform, is steadily advancing in non-clinical studies[35](index=35&type=chunk) - **3D062**, an internally developed KRAS mutation inhibitor, has filed a new Chinese patent application[35](index=35&type=chunk) [Operations and Management](index=16&type=section&id=Operations%20and%20Management) The company demonstrates robust operational and management capabilities, supported by strong R&D platforms, global GMP-compliant production, patient-centric commercialization strategies, extensive intellectual property, and a dedicated workforce [R&D Capabilities and Platforms](index=17&type=section&id=R%26D%20Capabilities%20and%20Platforms) The company possesses an experienced management team and robust R&D platforms, encompassing large and small molecule drug development, cell line screening, compound screening, and newly established LNP key component synthesis and screening platforms, supporting tumor neoantigen vaccine development with its proprietary 3D-PreciseAg antigen prediction system and nucleic acid drug R&D system, while actively exploring new combinations of TCE bispecific antibodies/bispecific antibody-ADCs - Possesses an experienced management team and strong molecular design and screening capabilities, enhancing drug development success rates[37](index=37&type=chunk) - The R&D center covers large molecule, small molecule drug R&D platforms, cell line screening platforms, and compound screening platforms[37](index=37&type=chunk) - A new LNP key component ionizable cationic lipid synthesis and screening platform has been established to support nucleic acid drug pipeline development[37](index=37&type=chunk) - Independently developed the 3D-PreciseAg antigen prediction system, combined with the LNP delivery system, laying the foundation for tumor vaccine development[37](index=37&type=chunk) - Actively exploring new combinations of TCE bispecific antibodies/bispecific antibody-ADCs and novel administration routes such as high-concentration formulation robotic capsule oral delivery[38](index=38&type=chunk) [Production and Quality Management](index=18&type=section&id=Production%20and%20Quality%20Management) The company is constructing internal production facilities in Xuzhou, Jiangsu, compliant with global GMP standards, and collaborates with CMOs for manufacturing, having established a full-process quality management system covering non-clinical development, clinical research, and commercial production, and obtained NMPA approval to expand Envafolimab® injection capacity - Constructing internal production facilities in Xuzhou, Jiangsu, compliant with FDA, EMA, and China NMPA GMP standards[40](index=40&type=chunk) - Collaborating with qualified CMOs for preclinical and clinical supply manufacturing, and plans to continue outsourcing commercial-scale production[40](index=40&type=chunk) - A full-process quality management system centered on GLP, GCP, and GMP has been established to ensure compliance with international and domestic regulatory standards[41](index=41&type=chunk) - The production capacity for Envafolimab® injection received formal approval for expansion from the NMPA in H1 2025[42](index=42&type=chunk) [Commercialization Strategy](index=19&type=section&id=Commercialization%20Strategy) The company is committed to accelerating Envafolimab®'s commercialization through patient-centric marketing strategies and academic promotion activities, having established a professional sales and marketing department and actively conducting pre-launch preparations for upcoming commercial products - Committed to accelerating Envafolimab® commercialization through patient-centric marketing strategies and academic promotion activities[43](index=43&type=chunk) - A professional sales and marketing department has been established, responsible for product positioning, market strategy, promotional activity planning, and patient assistance[43](index=43&type=chunk) - Actively conducting pre-launch preparations for upcoming commercial products[44](index=44&type=chunk) [Intellectual Property](index=19&type=section&id=Intellectual%20Property) The company holds an extensive patent portfolio, including **13** granted patents in China, **24** granted patents in other jurisdictions, and **19** pending patent applications, protecting its products, drug candidates, and technologies - Possesses an extensive patent portfolio, including **13** granted patents in China and **24** granted patents overseas[45](index=45&type=chunk) - Holds **19** pending patent applications, including **12** in China and **7** in other jurisdictions[45](index=45&type=chunk) [Employees and Remuneration](index=26&type=section&id=Employees%20and%20Remuneration) As of June 30, 2025, the company had **183** full-time employees, with total employee welfare expenses of approximately **RMB 63.4 million**, emphasizing recruitment, continuous training, and performance evaluation in compliance with Chinese labor laws - As of June 30, 2025, the Group had **183** full-time employees[66](index=66&type=chunk) - Total employee welfare expenses were approximately **RMB 63.4 million**, including salaries, social insurance, benefits, and share-based awards[66](index=66&type=chunk) - The company recruits employees based on work experience, educational background, etc., and provides continuous education and training programs[66](index=66&type=chunk) [Future Outlook and Strategy](index=26&type=section&id=Future%20Outlook%20and%20Strategy) The company is committed to sustainable growth and global innovation, accelerating product development and commercialization, enhancing operational efficiency, and expanding Envafolimab®'s global value through strategic partnerships [Future Plans](index=26&type=section&id=Future%20Plans) The company will continue to pursue sustainable growth and global innovation strategic goals, accelerating product development and commercialization, enhancing operational efficiency, continuously producing diversified innovative drugs through AI+mRNA and nuclear medicine technology platforms, and expanding Envafolimab®'s global commercial value with partners - Committed to achieving sustainable growth and global innovation strategic goals, accelerating product development and commercialization, and enhancing operational efficiency[67](index=67&type=chunk) - The AI+mRNA platform will continue to generate diversified mRNA drugs and proprietary LNP libraries[69](index=69&type=chunk) - The nuclear medicine technology platform will meticulously develop first-generation beta-radionuclide nuclear medicine products and explore effective products with different radionuclides[69](index=69&type=chunk) - Will expand Envafolimab®'s development and commercialization into new markets with partners, maximizing product commercial value through further clinical studies[68](index=68&type=chunk)[69](index=69&type=chunk) [Post-Reporting Period Events](index=27&type=section&id=Post-Reporting%20Period%20Events) Post-reporting period, the company signed a strategic cooperation agreement with Qingdao Hainuo, paying **RMB 98.0 million** to unfreeze bank accounts and withdraw lawsuits, and plans to acquire Qingdao Hainuo's equity in 3D Medicines Shanghai Co., Ltd. within **5 years**, additionally entering a strategic cooperation framework agreement with Kaituo Bio to deepen mRNA collaboration - Signed a strategic cooperation agreement with Qingdao Hainuo, paying **RMB 98.0 million** consideration to lift preservation orders and withdraw lawsuits[69](index=69&type=chunk) - Plans to acquire Qingdao Hainuo's equity in 3D Medicines Shanghai Co., Ltd. within **5 years**, with the paid consideration to be offset against the equity acquisition price[70](index=70&type=chunk) - Entered into a strategic cooperation framework agreement with Kaituo Bio, deepening collaboration in targeted LNP delivery, tumor vaccines, and in vivo CAR-T/NK based on the AI+mRNA R&D platform and LNP delivery system[71](index=71&type=chunk) [Capital Utilization and Corporate Governance](index=28&type=section&id=Capital%20Utilization%20and%20Corporate%20Governance) This section details the company's capital allocation from its listing and 2023 placing, its dividend policy, and adherence to high corporate governance standards, including board structure and securities trading codes [Use of Net Proceeds from Listing](index=28&type=section&id=Use%20of%20Net%20Proceeds%20from%20Listing) As of June 30, 2025, total net proceeds from the global offering amounted to **RMB 232,927.9 thousand**, with the majority allocated to R&D, regulatory filings, and commercialization of products and drug candidates, as well as general corporate and working capital purposes Use of Net Proceeds from Listing | Intended Use | Percentage of Total Proceeds (%) | Total Net Proceeds (RMB thousands) | Amount Utilized (RMB thousands) | Unutilized Amount (RMB thousands) | Expected Timeline | | :--- | :--- | :--- | :--- | :--- | :--- | | R&D, regulatory filings, and commercialization of products and drug candidates | 90 | 209,635.1 | 179,991.0 | 29,644.1 | December 2025 | | (i) Envafolimab® | 55 | 128,110.3 | 128,110.3 | – | N/A | | (ii) Other drug candidates | 25 | 58,232.0 | 47,440.9 | 10,791.1 | December 2025 | | (iii) Construction of Xuzhou production facility and procurement of new equipment | 10 | 23,292.8 | 4,439.8 | 18,853.0 | December 2025 | | General corporate and working capital purposes | 10 | 23,292.8 | 23,292.8 | – | N/A | | **Total** | **100** | **232,927.9** | **203,283.8** | **29,644.1** | | [Use of Net Proceeds from 2023 Placing](index=29&type=section&id=Use%20of%20Net%20Proceeds%20from%202023%20Placing) Net proceeds of approximately **RMB 207,372.9 thousand** from the 2023 placing were primarily used for clinical trials evaluating Envafolimab® monotherapy, perioperative treatment for non-small cell lung cancer, construction of the Xuzhou production facility, and general corporate working capital Use of Net Proceeds from 2023 Placing | Intended Use | Percentage of Proceeds (%) | Total Net Proceeds (RMB thousands) | Amount Utilized (RMB thousands) | Unutilized Amount (RMB thousands) | Expected Timeline | | :--- | :--- | :--- | :--- | :--- | :--- | | Planned clinical trials evaluating Envafolimab® monotherapy | 50 | 103,686.4 | 3,721.7 | 3,964.8 | December 2025 | | Planned clinical trials for perioperative treatment of non-small cell lung cancer | – | – | 4,804.7 | 91,195.3 | December 2026 | | Construction of Xuzhou production facility buildings and equipment procurement | 40 | 82,949.2 | – | 82,949.2 | December 2025 | | General corporate working capital purposes | 10 | 20,737.3 | 20,737.3 | – | N/A | | **Total** | **100** | **207,372.9** | **29,263.6** | **178,109.2** | | [Dividend Policy](index=30&type=section&id=Dividend%20Policy) The Board does not recommend an interim dividend for the six months ended June 30, 2025, as the company expects to retain all future earnings for business operations and expansion, currently having no dividend policy - The Board does not recommend an interim dividend for the six months ended June 30, 2025[75](index=75&type=chunk) - The company expects to retain all future earnings for business operations and expansion, currently having no dividend policy[78](index=78&type=chunk) [Corporate Governance](index=30&type=section&id=Corporate%20Governance) The company is committed to maintaining high corporate governance standards, having adopted the Corporate Governance Code in Appendix C1 of the Listing Rules, with Dr. Gong Zhaolong serving as both Chairman and CEO, a structure the Board believes ensures consistent leadership with sufficient checks and balances - The company has adopted the Corporate Governance Code as set out in Appendix C1 of the Listing Rules[76](index=76&type=chunk) - Dr. Gong Zhaolong serves as both the Chairman of the Board and Chief Executive Officer, a structure the Board believes ensures consistent leadership with sufficient checks and balances[76](index=76&type=chunk)[77](index=77&type=chunk) [Standard Securities Trading Code](index=31&type=section&id=Standard%20Securities%20Trading%20Code) The company has adopted the Standard Code as set out in Appendix C3 of the Listing Rules as the code of conduct for directors' securities transactions, requiring compliance from employees who may possess inside information, with all directors confirming adherence during the reporting period - The company has adopted the Standard Code as set out in Appendix C3 of the Listing Rules as the code of conduct for directors' securities transactions[79](index=79&type=chunk) - All directors confirmed compliance with the Standard Code during the reporting period[79](index=79&type=chunk) - Employees who may possess unpublished inside information are also required to comply with the Standard Code[80](index=80&type=chunk) [Interim Results Review](index=31&type=section&id=Interim%20Results%20Review) The Review Committee has reviewed the Group's unaudited condensed consolidated interim financial information for the six months ended June 30, 2025, confirming its compliance with applicable accounting principles and disclosure requirements, with external auditor Modern Assurance CPA Limited also conducting an independent review and confirming compliance with IAS 34 - The Review Committee has reviewed the interim financial information, confirming compliance with applicable accounting principles, standards, and disclosure requirements[82](index=82&type=chunk) - External auditor Modern Assurance CPA Limited has conducted an independent review, confirming that the financial information complies with IAS 34[82](index=82&type=chunk) [Notes to the Financial Statements](index=35&type=section&id=Notes%20to%20the%20Financial%20Statements) This section provides detailed notes to the financial statements, covering company information, accounting policy changes, operating segment data, revenue breakdown, expense details, loss before tax, income tax, dividends, loss per share, and trade receivables/payables [Company Information and Basis of Preparation](index=35&type=section&id=Company%20Information%20and%20Basis%20of%20Preparation) 3D Medicines Inc. was incorporated in the Cayman Islands on January 30, 2018, primarily engaged in pharmaceutical R&D and commercialization, with interim condensed financial information prepared in accordance with IAS 34 and to be read in conjunction with the 2024 annual consolidated financial statements - The company was incorporated in the Cayman Islands on January 30, 2018, primarily engaged in pharmaceutical R&D and commercialization[87](index=87&type=chunk) - The interim condensed financial information has been prepared in accordance with IAS 34 "Interim Financial Reporting"[88](index=88&type=chunk) [Changes in Accounting Policies and Disclosures](index=35&type=section&id=Changes%20in%20Accounting%20Policies%20and%20Disclosures) The accounting policies adopted for the preparation of the interim condensed consolidated financial statements are consistent with those in the 2024 annual consolidated financial statements, with only the initial adoption of new and amended IFRS standards, which had no significant impact on the current period's financial position and performance - Accounting policies are consistent with the 2024 annual consolidated financial statements, with only the initial adoption of new and amended IFRS standards[89](index=89&type=chunk) - The new and amended IFRS standards had no significant impact on the Group's financial position and performance for the current and prior years[90](index=90&type=chunk) [Operating Segment Information](index=35&type=section&id=Operating%20Segment%20Information) The Group is engaged in biopharmaceutical R&D and commercialization, considered a single reportable segment, with all revenue derived from customers in mainland China and almost all non-current assets located in mainland China, thus no geographical information is presented - The Group is engaged in biopharmaceutical R&D and commercialization, considered a single reportable segment[91](index=91&type=chunk) - All revenue is derived from customers in mainland China, and almost all non-current assets are located in mainland China[92](index=92&type=chunk) Major Customers | Major Customers | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Customer A | 83,622 | 86,014 | | Customer B | 27,450 | 28,748 | | Customer C | N/A* | 24,968 | *For the six months ended June 30, 2025, the amount was less than 10% of the Group's revenue [Revenue, Other Income and Net Gains](index=36&type=section&id=Revenue%2C%20Other%20Income%20and%20Net%20Gains) Revenue primarily from product sales totaled **RMB 209,167 thousand** in H1 2025, while other income and net gains amounted to **RMB 17,700 thousand**, a year-on-year decrease mainly due to reduced interest income and fair value gains on financial assets at fair value through profit or loss Revenue Source | Revenue Source | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Sales of products | 209,167 | 206,422 | Other Income and Net Gains | Other Income and Net Gains | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Government grants | 4,458 | 1,136 | | Interest income | 3,757 | 6,145 | | Investment income from other investments classified as financial assets at amortized cost | 7,083 | 7,052 | | Subtotal of other income | 15,531 | 14,333 | | Fair value gains on other investments classified as financial assets at fair value through profit or loss | 2,169 | 3,520 | | Subtotal of net gains | 2,169 | 8,104 | | **Total** | **17,700** | **22,437** | - The decrease in other income and net gains was primarily due to a **RMB 2.4 million** reduction in interest income and a **RMB 1.4 million** reduction in fair value gains on other investments classified as financial assets at FVTPL[52](index=52&type=chunk) [Other Expenses](index=38&type=section&id=Other%20Expenses) Other expenses primarily comprised donations of **RMB 51,192 thousand** and net exchange losses of **RMB 3,612 thousand**, totaling **RMB 55,050 thousand** Other Expense Items | Other Expense Items | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Donations | 51,192 | 61,134 | | Net exchange losses | 3,612 | – | | Others | 246 | – | | **Total** | **55,050** | **61,134** | [Loss Before Tax](index=38&type=section&id=Loss%20Before%20Tax) The Group's loss before tax was calculated after deducting marketing service fees, royalty fees, cost of sales of inventories, and impairment losses on financial assets, and including fair value gains on other investments classified as financial assets at fair value through profit or loss Loss Before Tax Items | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Marketing service fees | 99,190 | 89,528 | | Royalty fees | 17,637 | 15,619 | | Cost of sales of inventories | 16,260 | 17,473 | | Impairment losses on financial assets | 2,903 | 4,771 | | Fair value gains on other investments classified as financial assets at fair value through profit or loss | (2,169) | (3,520) | [Income Tax](index=38&type=section&id=Income%20Tax) Income tax expense amounted to **RMB 55 thousand**, representing over-provision of income tax expense in prior years - Income tax expense was **RMB 55 thousand**, representing over-provision of income tax expense in prior years[100](index=100&type=chunk) [Dividends](index=38&type=section&id=Dividends) The company neither declared nor paid any dividends for the six months ended June 30, 2025 - The company neither declared nor paid any dividends for the six months ended June 30, 2025[101](index=101&type=chunk) [Loss Per Share Attributable to Owners of the Parent](index=38&type=section&id=Loss%20Per%20Share%20Attributable%20to%20Owners%20of%20the%20Parent) For the six months ended June 30, 2025, basic and diluted loss per share attributable to owners of the parent was **RMB 0.36**, an improvement from **RMB 0.42** in the prior year period Loss Per Share Attributable to Owners of the Parent | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Loss attributable to owners of the parent used in calculating basic loss per share | (89,350) | (103,509) | | Weighted average number of ordinary shares in issue (thousands) used in calculating basic loss per share | 245,087 | 245,049 | | Loss per share (basic and diluted) (RMB) | (0.36) | (0.42) | - No diluted adjustment was made to the basic loss per share amount due to the anti-dilutive effect of preference shares and restricted share units[102](index=102&type=chunk) [Trade Receivables](index=39&type=section&id=Trade%20Receivables) As of June 30, 2025, total trade receivables amounted to **RMB 95,624 thousand**, all within **3 months** aging Trade Receivables Aging | Aging | 2025 June 30 (RMB thousands) | 2024 Dec 31 (RMB thousands) | | :--- | :--- | :--- | | Within 3 months | 95,624 | 47,862 | [Restricted Bank Balances](index=40&type=section&id=Restricted%20Bank%20Balances) As of June 30, 2025, restricted bank balances were **RMB 168,216 thousand**, with all bank account preservation orders lifted post-reporting period following the resolution of the dispute with Qingdao Hainuo - As of June 30, 2025, restricted bank balances amounted to **RMB 168,216 thousand**[85](index=85&type=chunk) - Post-reporting period, the civil lawsuit between the company and Qingdao Hainuo was withdrawn, and all bank account preservation orders were lifted[106](index=106&type=chunk)[108](index=108&type=chunk) [Trade Payables](index=40&type=section&id=Trade%20Payables) As of June 30, 2025, total trade payables amounted to **RMB 52,558 thousand**, with a significant portion of balances aged over **1 year** Trade Payables Aging | Aging | 2025 June 30 (RMB thousands) | 2024 Dec 31 (RMB thousands) | | :--- | :--- | :--- | | Within 3 months | 2,673 | 1,217 | | 3 to 6 months | 706 | 840 | | 6 months to 1 year | 1,341 | 25,891 | | Over 1 year | 47,838 | 23,183 | | **Total** | **52,558** | **51,131** | [Definitions and Glossary](index=41&type=section&id=Definitions%20and%20Glossary) This section defines key terms and abbreviations used throughout the interim results announcement, encompassing company products, regulatory bodies, financial metrics, and clinical trial types for enhanced reader understanding [Definitions and Glossary](index=41&type=section&id=Definitions%20and%20Glossary) This section defines key terms and abbreviations used throughout the interim results announcement, encompassing company products, regulatory bodies, financial metrics, and clinical trial types for enhanced reader understanding - Provides definitions for key terms such as "Envafolimab®," "AML," "FDA," "GMP," "IND," "PD-L1," and "R&D"[110](index=110&type=chunk)[111](index=111&type=chunk)[112](index=112&type=chunk)[113](index=113&type=chunk)[115](index=115&type=chunk)[116](index=116&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。 截 至 二 零 二 五 年 六 月 三 十 日 止 六 個 月 的 中 期 業 績 公 告 財 務 摘 要 截 至 二 零 二 五 年 六 月 三 十 日 止 六 個 月，本 集 團 錄 得： 中 期 股 息 • 董 事 會 議 決 不 派 付 截 至 二 零 二 五 年 六 月 三 十 日 止 六 個 月 的 中 期 股 息（截 至 二 零 二 四 年 六 月 三 十 日 止 六 個 月：無）。 – 1 – • 營 業 額 為 人 民 幣1,937.67百 萬 元，較 截 至 二 零 二 四 年 六 月 三 十 日 止 六 個 月 減 少24.95%。 • 毛 利 為 人 民 幣1,467.61百 萬 元，較 截 至 二 ...

[Interim Results Summary](index=2&type=section&id=Interim%20Results%20Summary) [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 Group's revenue decreased by **14.2%** to **RMB 686.3 million** year-on-year, with gross profit significantly down **63.2%** to **RMB 71.7 million**. Loss for the period expanded significantly to **RMB 295.6 million**, and loss per share attributable to owners of the parent was **RMB 3.64 cents** Key Data from Interim Condensed Consolidated Statement of Profit or Loss | Metric | June 30, 2025 (RMB in thousands) | June 30, 2024 (RMB in thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 686,303 | 799,801 | -14.2% | | Cost of Sales | (614,601) | (604,929) | +1.6% | | Gross Profit | 71,702 | 194,872 | -63.2% | | Other Income and Gains | 27,434 | 96,297 | -71.5% | | Selling and Marketing Expenses | (51,252) | (26,744) | +92.1% | | Administrative Expenses | (172,528) | (166,944) | +3.36% | | Finance Costs | (156,965) | (168,518) | -6.8% | | Loss Before Tax | (295,610) | (83,408) | +254.4% | | Loss for the Period | (295,626) | (87,193) | +239.1% | | Loss Attributable to Owners of the Parent | (295,139) | (84,226) | +250.4% | | Basic and Diluted Loss Per Share (RMB cents) | (3.64) | (1.04) | +250.0% | [Interim Condensed Consolidated Statement of Comprehensive Income](index=3&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) The Group's total comprehensive loss for the six months ended June 30, 2025, significantly expanded to **RMB 290.9 million** from **RMB 84.9 million** in the prior period, primarily due to increased loss for the period and exchange differences Key Data from Interim Condensed Consolidated Statement of Comprehensive Income | Metric | June 30, 2025 (RMB in thousands) | June 30, 2024 (RMB in thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Loss for the Period | (295,626) | (87,193) | +239.1% | | Exchange Differences on Translation of Foreign Operations (reclassifiable) | (52,774) | (17,922) | +194.5% | | Exchange Differences on Translation of Foreign Operations (non-reclassifiable) | 57,495 | 20,252 | +184.0% | | Other Comprehensive Income for the Period (net of tax) | 4,721 | 2,330 | +102.6% | | Total Comprehensive Loss for the Period | (290,905) | (84,863) | +242.8% | | Total Comprehensive Loss Attributable to Owners of the Parent | (290,418) | (81,896) | +254.6% | [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 Group's total assets slightly decreased, net current liabilities further expanded, and net assets decreased by **16.0%**, indicating financial pressure Key Data from Interim Condensed Consolidated Statement of Financial Position | Metric | June 30, 2025 (RMB in thousands) | December 31, 2024 (RMB in thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Total Non-current Assets | 9,588,005 | 9,851,854 | -2.7% | | Total Current Assets | 529,074 | 487,699 | +8.5% | | Total Current Liabilities | 3,721,685 | 3,440,618 | +8.2% | | Net Current Liabilities | (3,192,611) | (2,952,919) | +8.1% | | Total Assets Less Current Liabilities | 6,395,394 | 6,898,935 | -7.3% | | Total Non-current Liabilities | 4,870,999 | 5,083,635 | -4.1% | | Net Assets | 1,524,395 | 1,815,300 | -16.0% | | Total Equity | 1,524,395 | 1,815,300 | -16.0% | [Notes to the Interim Condensed Consolidated Financial Information](index=6&type=section&id=Notes%20to%20the%20Interim%20Condensed%20Consolidated%20Financial%20Information) [Basis of Preparation](index=6&type=section&id=Basis%20of%20Preparation) The interim condensed consolidated financial information is prepared in accordance with International Accounting Standard 34 'Interim Financial Reporting' and should be read in conjunction with the annual consolidated financial statements for the year ended December 31, 2024 - Financial information is prepared in accordance with **IAS 34** and should be read in conjunction with annual reports[8](index=8&type=chunk) [Basis of Presentation (Going Concern)](index=6&type=section&id=Basis%20of%20Presentation%20-%20Going%20Concern) Despite net current liabilities of **RMB 3.19 billion** and a loss for the period of **RMB 296 million**, the Board believes the Group can continue as a going concern, supported by bank and credit facilities, capital expenditure monitoring, new investment opportunities, and **HKD 2.295 billion** new equity financing approved by shareholders through a subscription - The Group's net current liabilities amounted to **RMB 3,192,611,000** and net loss for the period was **RMB 295,626,000**[9](index=9&type=chunk) - The Group has secured unutilized bank and credit facilities totaling **RMB 4,500,000,000** valid beyond December 31, 2025[10](index=10&type=chunk) - The Company entered into a subscription agreement with Sunriver Starrysea Tourism (Cayman) Co., Ltd. to allot and issue **5,100,000,000** new shares at **HKD 0.45** per share, for a total consideration of **HKD 2,295,000,000**, which has been approved by shareholders[10](index=10&type=chunk) [Changes in Accounting Policies and Disclosures](index=7&type=section&id=Changes%20in%20Accounting%20Policies%20and%20Disclosures) This period saw the first application of revised IFRS accounting standards, including amendments to IAS 21 'Lack of Exchangeability', but these changes had no significant impact on the Group's financial position or performance - New and revised IFRS accounting standards, including amendments to **IAS 21** 'Lack of Exchangeability', were first applied in this period[12](index=12&type=chunk) - The application of new accounting standards had no significant impact on the Group's financial position and performance[12](index=12&type=chunk) [Operating Segment Information](index=8&type=section&id=Operating%20Segment%20Information) The Group's main operating segments include park operations, operations-as-a-service, and property development, with park operations being the primary revenue source. For the six months ended June 30, 2025, both park operations and operations-as-a-service segments saw decreased revenue and performance, while the property development segment generated no revenue Operating Segment Revenue and Results (for the six months ended June 30, 2025) | Segment | Revenue (RMB in thousands) | Segment Results (RMB in thousands) | | :--- | :--- | :--- | | Park Operations | 646,200 | 65,654 | | Operations-as-a-Service | 40,103 | 6,048 | | Property Development | – | – | | **Total** | **686,303** | **71,702** | Operating Segment Revenue and Results (for the six months ended June 30, 2024) | Segment | Revenue (RMB in thousands) | Segment Results (RMB in thousands) | | :--- | :--- | :--- | | Park Operations | 735,866 | 185,223 | | Operations-as-a-Service | 63,935 | 9,649 | | Property Development | – | – | | **Total** | **799,801** | **194,872** | - Over **99%** of the Group's revenue and non-current assets are derived from Mainland China operations, thus no geographical information is presented[13](index=13&type=chunk) [Revenue](index=11&type=section&id=Revenue) For the six months ended June 30, 2025, the Group's total revenue was **RMB 686.3 million**, a **14

[Company Information](index=1&type=section&id=Company%20Information) [Company Overview](index=1&type=section&id=Company%20Overview) Plus Group Holdings Inc. (Stock Code: 2486) released its unaudited interim results for the six months ended June 30, 2025, on August 29, 2025 - Company Name: **Plus Group Holdings Inc.**[2](index=2&type=chunk) - Stock Code: **2486**[2](index=2&type=chunk) - Reporting Period: Six months ended **June 30, 2025**[3](index=3&type=chunk) [Financial Highlights](index=1&type=section&id=Financial%20Highlights) [Key Financial Performance](index=1&type=section&id=Key%20Financial%20Performance) During the reporting period, the company's revenue significantly increased by 376.1% to RMB 1.631 billion, gross profit grew by 68.0% to RMB 82.085 million, achieving a turnaround with a profit of RMB 7.984 million for the period | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | Period-over-Period Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 1,631,270 | 342,597 | 376.1% | | Gross Profit | 82,085 | 48,856 | 68.0% | | Profit (Loss) for the Period | 7,984 | (3,767) | 311.9% | | Profit (Loss) and Total Comprehensive Income (Expense) Attributable to Owners of the Company | 6,317 | (3,493) | 280.8% | [Selected Financial Ratios](index=2&type=section&id=Selected%20Financial%20Ratios) As of June 30, 2025, the company's revenue growth rate reached 376.1%, with a current ratio maintained at 2.5 times, indicating strong growth momentum and stable short-term solvency | Indicator | As of June 30, 2025 | As of December 31, 2024 | | :--- | :--- | :--- | | Revenue Growth | 376.1% | 44.1% | | Current Ratio (times) | 2.5 | 2.5 | | Total Equity (RMB thousands) | 490,716 | 479,665 | | Cash and Cash Equivalents (RMB thousands) | 149,180 | 159,647 | | Bank Borrowings (RMB thousands) | 77,948 | 64,148 | [Operating Metrics](index=3&type=section&id=Operating%20Metrics) During the reporting period, the number of paying customers significantly increased by 358.6% to 1,064, and average monthly active touchpoints doubled by 106.5% to 64,000, reflecting rapid business expansion and improved market penetration | Operating Metric | Six months ended June 30, 2025 | Six months ended June 30, 2024 | Period-over-Period Change (%) | | :--- | :--- | :--- | :--- | | Number of Paying Customers | 1,064 | 232 | 358.6% | | Total Cumulative Points of Sale | 4,452,000 | 4,430,000 | 0.5% | | Total Cumulative Touchpoints | 734,000 | 553,000 | 32.7% | | Average Monthly Active Touchpoints | 64,000 | 31,000 | 106.5% | [Management Discussion and Analysis](index=4&type=section&id=Management%20Discussion%20and%20Analysis) [Business Review](index=4&type=section&id=Business%20Review) Amid global economic downturn and high inflation, the Group achieved counter-cyclical growth, with total revenue increasing by 376.1% to RMB 1.631 billion, driven by AI technology R&D and market share expansion strategies, with significant growth across all core business segments, particularly a more than 20-fold increase in task and marketer matching services - Global economic recovery slowed, and the consumer market continued to downgrade, but AI technology and new energy industries injected new growth momentum[7](index=7&type=chunk) - The Group strengthened its core competitiveness through continuous R&D and deep application in AI, and firmly executed its strategy to capture market share[7](index=7&type=chunk) - Total revenue for the reporting period was approximately **RMB 1.631 billion**, representing a year-on-year increase of approximately **376.1%**[7](index=7&type=chunk) [Customized Marketing Solutions](index=4&type=section&id=Customized%20Marketing%20Solutions) By closely collaborating with retail channel partners and deepening O2O instant retail, combined with AI empowerment, the company consolidated market share and opened new channels - Consolidated market share and opened new channels through close cooperation with retail channel partners, deep cultivation in O2O instant retail, and AI intelligent empowerment[8](index=8&type=chunk) Customized Marketing Solutions Revenue | Business Segment | 2025 Revenue (RMB thousands) | Year-on-Year Growth (%) | | :--- | :--- | :--- | | Customized Marketing Solutions | 371,700 | 40.4% | [Task and Marketer Matching Services](index=5&type=section&id=Task%20and%20Marketer%20Matching%20Services) Leveraging AI R&D and application penetration, the company built business barriers, with rapid expansion of application businesses based on AI intelligent matching mechanisms - Rapid expansion of application businesses based on AI intelligent matching mechanisms, building business barriers through AI R&D and application penetration[9](index=9&type=chunk) Task and Marketer Matching Services Revenue | Business Segment | 2025 Revenue (RMB thousands) | Year-on-Year Growth (%) | | :--- | :--- | :--- | | Task and Marketer Matching Services | 1,220,400 | 2,067.7% | [SaaS+ Subscription and Other Services](index=5&type=section&id=SaaS%2B%E8%A8%82%E9%96%B1%E5%8F%8A%E5%85%B6%E4%BB%96%E6%9C%8D%E5%8B%99) With increasingly sophisticated digital, systematic, and intelligent platforms and services, the company provides more flexible and diversified comprehensive services, injecting new growth momentum - Provided more flexible and diversified comprehensive services, injecting new growth momentum as digital, systematic, and intelligent platforms and services matured[10](index=10&type=chunk) SaaS+ Subscription and Other Services Revenue | Business Segment | 2025 Revenue (RMB thousands) | Year-on-Year Growth (%) | | :--- | :--- | :--- | | SaaS+ Subscription and Other Services | 27,600 | 187.5% | [Marketer Secondment Services](index=5&type=section&id=Marketer%20Secondment%20Services) Affected by the overall offline retail market environment, brand client investment decreased, leading to a continuous decline in revenue for this business segment - Revenue for this business segment continuously declined due to reduced brand client investment, influenced by the overall offline retail market environment[11](index=11&type=chunk) Marketer Secondment Services Revenue | Business Segment | 2025 Revenue (RMB thousands) | Year-on-Year Decrease (%) | | :--- | :--- | :--- | | Marketer Secondment Services | 11,500 | 4.2% | [Business Outlook](index=6&type=section&id=Business%20Outlook) The company will continue to focus on its core AI intelligent matching advantages, expand into new channels and markets, deepen cooperation with channel partners, leverage capital advantages to explore overseas markets, enhance O2O instant retail development, and continuously increase investment in AI technology R&D to achieve long-term sustainable growth - Fully maintained the core advantage of **AI intelligent matching**, expanding into new channels, areas, and markets to capture more market share in matching services[12](index=12&type=chunk) - Maintained close cooperation with major channel partners, improved digital joint operation mechanisms, achieved data sharing and collaborative growth, and understood market dynamics through intelligent data models and AI analysis[12](index=12&type=chunk) - Leveraged capital advantages to focus on overseas market expansion, laid out cross-border trade, and built an integrated service system encompassing import/export, supply chain, marketing promotion, channel distribution, and omni-channel retail[12](index=12&type=chunk) - Deepened O2O instant retail development, explored innovative integration with terminal retail scenarios, and realized data asset monetization through precise marketing and intelligent distribution[12](index=12&type=chunk) - Continuously increased investment in **AI technology R&D**, deepened intelligent innovation and application iteration, and empowered full-chain business upgrades through AI-driven data insights[12](index=12&type=chunk) [Revenue Analysis](index=7&type=section&id=Revenue%20Analysis) The Group's total revenue achieved strong growth during the reporting period, reaching RMB 1.631 billion, a year-on-year increase of 376.1%, with task and marketer matching services contributing the most with over 20-fold growth, and SaaS+ subscription and other services also seeing nearly double growth - The Group's total revenue for the six months ended June 30, 2025, reached approximately **RMB 1.631 billion**, an increase of approximately **376.1%** compared to the same period in 2024[13](index=13&type=chunk) Revenue by Business Segment | Business Segment | 2025 Revenue (RMB thousands) | 2024 Revenue (RMB thousands) | Year-on-Year Growth (%) | | :--- | :--- | :--- | :--- | | Customized Marketing Solutions | 371,744 | 264,776 | 40.4% | | Task and Marketer Matching Services | 1,220,423 | 56,296 | 2,067.7% | | Marketer Secondment Services | 11,492 | 11,960 | -4.2% | | SaaS+ Subscription and Other Services | 27,611 | 9,565 | 187.5% | | **Total** | **1,631,270** | **342,597** | **376.1%** | [Customized Marketing Solutions Revenue](index=7&type=section&id=Customized%20Marketing%20Solutions%20Revenue) - Revenue was approximately **RMB 371.7 million**, a year-on-year increase of **40.4%**, primarily due to cultivation in O2O instant retail and deep cooperation with retail channel partners[14](index=14&type=chunk) [Task and Marketer Matching Services Revenue](index=8&type=section&id=Task%20and%20Marketer%20Matching%20Services%20Revenue) - Revenue was approximately **RMB 1.220 billion**, a year-on-year increase of **2,067.7%**, primarily due to the launch of a new matching business platform, with approximately **940** contracted service customers and an average customer transaction value of approximately **RMB 1.3 million**[15](index=15&type=chunk) [Marketer Secondment Services Revenue](index=8&type=section&id=Marketer%20Secondment%20Services%20Revenue) - Revenue was approximately **RMB 11.5 million**, a year-on-year decrease of **4.2%**, primarily due to the Group continuously reducing the number of seconded personnel, affected by market conditions[15](index=15&type=chunk) [SaaS+ Subscription and Other Services Revenue](index=8&type=section&id=SaaS%2B%E8%A8%82%E9%96%B1%E5%8F%8A%E5%85%B6%E4%BB%96%E6%9C%8D%E5%8B%99%E6%94%B6%E5%85%A5) - Revenue was approximately **RMB 27.6 million**, a year-on-year increase of **187.5%**, primarily due to the increasing maturity of systematic and intelligent platforms, enhanced application service capabilities, and expanded service flexibility and applicability[16](index=16&type=chunk) [Cost, Gross Profit and Gross Margin Analysis](index=8&type=section&id=Cost,%20Gross%20Profit%20and%20Gross%20Margin%20Analysis) During the reporting period, total costs significantly increased by 427.5% to RMB 1.549 billion, and gross profit grew by 67.9% to RMB 82.1 million; however, the gross margin decreased from 14.3% to 5.0% due to the company's strategy of capturing market share through low pricing - Total costs were approximately **RMB 1.549 billion**, an increase of approximately **RMB 1.255 billion** or **427.5%** compared to the same period in 2024[17](index=17&type=chunk) - The increase in costs outpaced revenue growth, primarily due to prioritizing market share capture and ensuring service quality during rapid expansion, with a corresponding reduction in profit expectations[18](index=18&type=chunk) Gross Profit and Gross Margin | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | Gross Profit | 82,100 | 48,900 | 67.9% | | Gross Margin | 5.0% | 14.3% | -9.3% | - The decline in gross margin was primarily due to the task and marketer matching services business rapidly capturing market share through a low-price model, leading to a significant decrease in gross profit levels[19](index=19&type=chunk) [Expense Analysis](index=9&type=section&id=Expense%20Analysis) Administrative expenses remained largely flat, while sales and marketing expenses significantly increased by 160.0% due to the growth in task and marketer matching services; R&D expenses decreased by 58.0% as AI applications enhanced in-house operational capabilities Expense Breakdown | Expense Type | 2025 (RMB thousands) | 2024 (RMB thousands) | Year-on-Year Change (%) | Primary Reason | | :--- | :--- | :--- | :--- | :--- | | Administrative Expenses | 44,800 | 43,200 | 3.7% | Growth in task and marketer matching services, overall change not significant | | Sales and Marketing Expenses | 27,300 | 10,500 | 160.0% | Growth in task and marketer matching services | | Research and Development Expenses | 5,500 | 13,100 | -58.0% | Enhanced in-house operational capabilities by integrating AI applications | [Other Income and Expense Items](index=10&type=section&id=Other%20Income%20and%20Expense%20Items) Other income doubled due to increased government subsidies, while other (losses) net income turned from profit to loss, primarily affected by reduced social security refunds and decreased exchange gains; impairment losses on financial assets decreased, net finance income turned into cost, and income tax expense significantly rose due to increased core business profits Other Income and Other (Losses) Net Income | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | Year-on-Year Change (%) | Primary Reason | | :--- | :--- | :--- | :--- | :--- | | Other Income | 11,000 | 5,500 | 100.0% | Increased government policy subsidies received | | Other (Losses) Net Income | (500) | 10,300 | -104.9% | Significant reduction in government social security payments to alleviate COVID-19 impact, and decrease in HKD exchange gains | | Net Impairment Losses on Trade Receivables, Contract Assets and Other Receivables | (2,400) | (2,900) | -17.2% | Strengthened credit management, improved quality of trade receivables and contract assets | | Net Finance (Costs) Income | (900) | 500 | -280.0% | Central bank interest rate cuts led to lower asset yields | | Income Tax (Expense) Credit | (3,700) | 900 | 311.1% | Increased profits in core business segments, leading to higher taxable income | - Profit attributable to equity holders of the Company turned from a loss of approximately **RMB 3.5 million** in the same period of 2024 to a profit of approximately **RMB 6.3 million**, an increase of **280.0%**[28](index=28&type=chunk) [Financial Position and Liquidity](index=11&type=section&id=Financial%20Position%20and%20Liquidity) Cash and cash equivalents slightly decreased, primarily due to increased sales revenue not yet collected; the company has no significant asset pledges or contingent liabilities, possesses ample liquidity, and primarily meets funding needs through operating cash flow, bank borrowings, and IPO proceeds - Cash and cash equivalents decreased by **6.5%** from approximately **RMB 159.6 million** as of December 31, 2024, to approximately **RMB 149.2 million** as of June 30, 2025, primarily due to increased sales revenue not yet collected in a timely manner[29](index=29&type=chunk) - Capital expenditure remained largely flat at approximately **RMB 0.1 million** in both reporting periods[30](index=30&type=chunk) - As of June 30, 2025, the Company had no significant acquisitions or disposals of subsidiaries, associates, and joint ventures, nor any significant asset pledges or material contingent liabilities[31](index=31&type=chunk)[33](index=33&type=chunk)[36](index=36&type=chunk) - The Group primarily funds its operations with cash generated from operations, borrowings, and net proceeds from its listing, possessing ample liquidity to meet daily management and capital expenditure requirements[34](index=34&type=chunk) - As of June 30, 2025, outstanding borrowings were approximately **RMB 77.9 million**, all due within one year, with unutilized bank credit totaling **RMB 37.0 million**[34](index=34&type=chunk) - The Group's principal operations are in mainland China, with major revenues and costs settled in RMB; some monetary assets are denominated in HKD, exposing the Group to exchange rate fluctuation risks, but currently there are no foreign exchange hedging plans[35](index=35&type=chunk) [Employees and Remuneration Policy](index=12&type=section&id=Employees%20and%20Remuneration%20Policy) As of June 30, 2025, the Group employed 6,801 staff, a decrease from the end of 2024; the company's remuneration policy references market levels and employee performance, and includes restricted share unit and share award schemes to attract and incentivize talent, while also adopting an employee diversity policy - As of June 30, 2025, the Group employed **6,801 staff** (December 31, 2024: 7,342 staff)[37](index=37&type=chunk) - Remuneration policy references market compensation, employee performance, qualifications, and experience, and provides discretionary year-end bonuses[37](index=37&type=chunk) - Restricted Share Unit Scheme (January 13, 2022) and Share Award Scheme (June 26, 2023) have been adopted to improve incentive mechanisms, attract, and retain talent[37](index=37&type=chunk) - An employee diversity policy was adopted in July 2025, aiming to fulfill social responsibility and promote equality and inclusion[37](index=37&type=chunk) [Interim Condensed Consolidated Financial Statements](index=13&type=section&id=Interim%20Condensed%20Consolidated%20Financial%20Statements) [Interim Condensed Consolidated Statement of Comprehensive Income](index=13&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) For the six months ended June 30, 2025, the Group achieved revenue of RMB 1.631 billion, gross profit of RMB 82.085 million, and a profit for the period of RMB 7.984 million, successfully turning losses into profit, with basic earnings per share of RMB 0.06 Interim Condensed Consolidated Statement of Comprehensive Income | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Revenue | 1,631,270 | 342,597 | | Cost of Services | (1,549,185) | (293,741) | | Gross Profit | 82,085 | 48,856 | | Operating Profit (Loss) | 12,649 | (5,043) | | Profit (Loss) for the Period | 7,984 | (3,767) | | Profit (Loss) and Total Comprehensive Income (Expense) Attributable to Owners of the Company | 6,317 | (3,493) | | Basic Earnings (Loss) Per Share (RMB) | 0.06 | (0.03) | [Interim Condensed Consolidated Statement of Financial Position](index=14&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the Group's total assets were RMB 810.9 million, and total equity was RMB 490.7 million; trade receivables and contract assets accounted for a larger proportion of current assets, while current liabilities primarily included trade and other payables and borrowings Interim Condensed Consolidated Statement of Financial Position | Item | As of June 30, 2025 (RMB thousands) | As of December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | **Assets** | | | | Total Non-current Assets | 14,125 | 10,523 | | Total Current Assets | 796,784 | 790,185 | | **Total Assets** | **810,909** | **800,708** | | **Equity** | | | | Equity Attributable to Owners of the Company | 483,872 | 477,555 | | Non-controlling Interests | 6,844 | 2,110 | | **Total Equity** | **490,716** | **479,665** | | **Liabilities** | | | | Total Non-current Liabilities | 2,476 | 1,224 | | Total Current Liabilities | 317,717 | 319,819 | | **Total Liabilities** | **320,193** | **321,043** | | **Total Equity and Liabilities** | **810,909** | **800,708** | [Notes to the Interim Financial Information](index=16&type=section&id=Notes%20to%20the%20Interim%20Financial%20Information) [General Information](index=16&type=section&id=General%20Information) Plus Group Holdings Inc. was incorporated in the Cayman Islands on September 30, 2021, and listed on the Main Board of the Hong Kong Stock Exchange in May 2023; the company primarily engages in customized marketing solutions, task and marketer matching services, and other businesses in China, with Mr. Sun Guangjun as the ultimate controlling party - The Company was incorporated in the Cayman Islands on **September 30, 2021**, and listed on the Main Board of the Hong Kong Stock Exchange in **May 2023**[42](index=42&type=chunk) - Principal businesses include customized marketing solutions, task and marketer matching services, marketer secondment services, and SaaS+ subscription and other services[42](index=42&type=chunk) - The ultimate controlling party is **Mr. Sun Guangjun**[42](index=42&type=chunk) [Basis of Preparation and Accounting Policies](index=16&type=section&id=Basis%20of%20Preparation%20and%20Accounting%20Policies) The condensed consolidated financial statements are prepared in accordance with HKAS 34 and the Listing Rules, with accounting policies consistent with the 2024 annual consolidated financial statements, and new amendments applied had no significant impact on the financial position - The condensed consolidated financial statements are prepared in accordance with Hong Kong Accounting Standard 34 issued by the Hong Kong Institute of Certified Public Accountants and the applicable disclosure requirements of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited[44](index=44&type=chunk) - The accounting policies adopted are consistent with those applied in the preparation of the annual consolidated financial statements for the year ended December 31, 2024[45](index=45&type=chunk) - The application of amendments to Hong Kong Financial Reporting Standards during this interim period had no significant impact on the Group's financial position and performance[46](index=46&type=chunk) [Revenue and Segment Information](index=17&type=section&id=Revenue%20and%20Segment%20Information) The Group's Chairman is identified as the chief operating decision maker, viewing the Group's business as a single operating segment; all revenue is recognized over time during the period, and all revenue and non-current assets are located in China - The Chairman of the Company views the Group's business as a **single operating segment**[47](index=47&type=chunk) Revenue by Business Segment | Business Segment | 2025 Revenue (RMB thousands) | 2024 Revenue (RMB thousands) | | :--- | :--- | :--- | | Customized Marketing Solutions | 371,744 | 264,776 | | Task and Marketer Matching Services | 1,220,423 | 56,296 | | Marketer Secondment Services | 11,492 | 11,960 | | SaaS+ Subscription and Other Services | 27,611 | 9,565 | | **Total** | **1,631,270** | **342,597** | - All of the Group's revenue was recognized over time during the period, and all revenue and non-current assets are located in China[48](index=48&type=chunk)[49](index=49&type=chunk) [Other Income and Other (Losses) Net Income](index=17&type=section&id=Other%20Income%20and%20Other%20(Losses)%20Net%20Income) Other income, primarily from government grants, increased by 100% year-on-year; other (losses) net income turned from profit to loss, mainly due to a significant reduction in government social security payment refunds to alleviate COVID-19 impacts and a decrease in exchange gains from HKD Other Income and Other (Losses) Net Income Details | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | **Other Income** | | | | Government Grants | 10,686 | 5,355 | | Others | 352 | 100 | | **Total** | **11,038** | **5,455** | | **Other (Losses) Net Income** | | | | Net Foreign Exchange (Losses) Gains | (459) | 562 | | Refund of social insurance contributions to customers | — | 9,466 | | Gains on redemption of other financial assets measured at amortized cost | — | 302 | | Others | (15) | (29) | | **Total** | **(474)** | **10,301** | - Government grants primarily included employment subsidy programs and company registration subsidies, with no unfulfilled conditions or other contingencies attached[52](index=52&type=chunk) - The social security refund in 2024 was **RMB 48,015,000**, as management believed the statute of limitations and legal liability for refund had expired[52](index=52&type=chunk) [Expenses by Nature](index=18&type=section&id=Expenses%20by%20Nature) The Group's total expenses significantly increased, primarily driven by substantial growth in labor costs and online platform promotion expenses; employee benefit expenses decreased, while travel and transportation expenses, other taxes, and levies all increased Expenses by Nature | Expense Type | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Employee Benefit Expenses (including directors' emoluments) | 124,670 | 197,795 | | Labor Costs | 1,309,147 | 120,312 | | Research and Development and Technical Service Expenses | 5,542 | 9,753 | | Office Expenses | 8,519 | 8,099 | | Activity Consumables | 3,197 | 5,091 | | Online Platform Promotion Expenses | 137,879 | — | | Travel and Transportation Expenses | 27,464 | 14,091 | | Other Taxes and Levies | 7,224 | 2,332 | | Amortization and Depreciation | 1,729 | 1,026 | | Auditor's Remuneration | 525 | 525 | | Other Expenses | 906 | 1,466 | | **Total** | **1,626,802** | **360,490** | [Net Finance Income (Costs)](index=19&type=section&id=Net%20Finance%20Income%20(Costs)) Net finance income turned from income in the same period of 2024 to costs in 2025, primarily due to decreased bank interest income and increased interest expenses on bank borrowings, trade receivables factoring, lease liabilities, and interest payable to a non-controlling shareholder Net Finance Income (Costs) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | **Finance Income** | | | | Bank interest income | 1,351 | 1,799 | | **Finance Costs** | | | | Interest expense on bank borrowings | (1,131) | (1,024) | | Interest on factoring of trade receivables | (306) | (209) | | Interest expense on lease liabilities | (270) | (42) | | Interest expense on amount due to a non-controlling shareholder | (534) | (73) | | **Net Finance (Costs) Income** | **(890)** | **451** | [Income Tax (Expense) Credit](index=19&type=section&id=Income%20Tax%20(Expense)%20Credit) The Group's income tax turned from a credit in the same period of 2024 to an expense in 2025, primarily due to increased profits in core business segments in China; some Chinese subsidiaries enjoy preferential tax rates as high-tech enterprises or small-profit enterprises - Companies registered in the Cayman Islands and British Virgin Islands are exempt from income tax, and no Hong Kong profits tax provision was made due to no assessable profits in Hong Kong[54](index=54&type=chunk)[55](index=55&type=chunk) - China corporate income tax is provided at a rate of **25%**, but Shanghai Ruosheng Mika Information Technology Co., Ltd. enjoys a preferential tax rate of **15%** as a high-tech enterprise[57](index=57&type=chunk) - Some Chinese subsidiaries qualify as 'small-profit enterprises' and enjoy preferential income tax rates[57](index=57&type=chunk) Income Tax (Expense) Credit | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Current income tax — China current tax | 6,643 | 1,898 | | Deferred tax | (2,965) | (2,753) | | **Total** | **3,678** | **(855)** | [Earnings (Loss) Per Share](index=21&type=section&id=Earnings%20(Loss)%20Per%20Share) Profit attributable to owners of the Company turned from a loss of RMB 3.493 million in the same period of 2024 to a profit of RMB 6.317 million in 2025, with basic earnings per share of RMB 0.06; diluted earnings per share were the same as basic earnings per share due to no outstanding potential ordinary shares Earnings (Loss) Per Share | Item | 2025 | 2024 | | :--- | :--- | :--- | | Profit (Loss) attributable to owners of the Company (RMB thousands) | 6,317 | (3,493) | | Weighted average number of ordinary shares in issue | 109,602,200 | 123,421,612 | | Basic earnings (loss) per share (RMB) | 0.06 | (0.03) | - Diluted earnings (loss) per share were the same as basic earnings per share for both periods, as there were no outstanding potential ordinary shares[62](index=62&type=chunk) [Dividends](index=21&type=section&id=Dividends) For the six months ended June 30, 2025, the Company neither paid nor declared any dividends - No dividends were paid or declared for the six months ended June 30, 2025[63](index=63&type=chunk) [Trade Receivables, Deposits, Other Receivables and Prepayments](index=21&type=section&id=Trade%20Receivables,%20Deposits,%20Other%20Receivables%20and%20Prepayments) Net trade receivables increased to RMB 369.2 million, with most aged within 180 days; total deposits, other receivables, and prepayments increased to RMB 113.5 million, primarily comprising deposits paid to external labor service providers and prepayments for online platform O2O instant retail marketing services Trade Receivables, Deposits, Other Receivables and Prepayments | Item | As of June 30, 2025 (RMB thousands) | As of December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Net trade receivables | 369,208 | 329,443 | | Impairment allowance for trade receivables | (4,333) | (1,786) | | **Aging analysis of gross trade receivables** | | | | 1 to 60 days | 238,015 | 218,551 | | 61 to 120 days | 120,862 | 100,222 | | 121 to 180 days | 14,381 | 11,955 | | Over 180 days | 283 | 501 | | **Deposits, other receivables and prepayments** | | | | Deposits paid to external labor service providers | 46,085 | 42,457 | | Prepayments for online platform O2O instant retail marketing services | 19,756 | 16,221 | | Other prepayments to suppliers | 37,241 | 32,133 | | **Total current portion** | **113,472** | **103,920** | - Standard payment terms generally range from **30 to 180 days**, with trade receivables primarily aged within **180 days** after invoice issuance[65](index=65&type=chunk) - The maximum exposure to credit risk is the carrying amount of each class of receivables mentioned above[67](index=67&type=chunk) [Contract Assets](index=23&type=section&id=Contract%20Assets) Net contract assets decreased to RMB 163.0 million, with contract assets for customized marketing solutions and marketer secondment services declining, and contract assets for task and marketer matching services also slightly decreasing Contract Assets by Business Segment | Business Segment | As of June 30, 2025 (RMB thousands) | As of December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Customized Marketing Solutions | 107,700 | 125,762 | | Task and Marketer Matching Services | 3,578 | 6,235 | | Marketer Secondment Services | 52,463 | 63,147 | | SaaS+ Subscription and Other Services | 1,404 | 4,346 | | **Contract Assets — Net** | **163,036** | **197,153** | | Impairment allowance for contract assets | (2,109) | (2,337) | - The Group's contract assets are denominated in RMB and initially recognized at the total transaction price[68](index=68&type=chunk) [Trade and Other Payables](index=23&type=section&id=Trade%20and%20Other%20Payables) Total trade and other payables increased to RMB 180.4 million; trade payables increased, while other payables (including accrued staff costs, accrued expenses, etc.) slightly decreased Trade and Other Payables | Item | As of June 30, 2025 (RMB thousands) | As of December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Trade payables | 70,778 | 51,513 | | Other payables: | | | | — Accrued staff costs | 72,931 | 84,223 | | — Accrued expenses | 13,432 | 9,278 | | — Reimbursements and refunds payable | 267 | 3,335 | | — Other taxes payable | 22,964 | 27,780 | | **Total** | **180,372** | **176,129** | | **Aging analysis of trade payables** | | | | Up to 90 days | 70,778 | 51,513 | - Trade and other payables are denominated in RMB, and their carrying amounts approximate their fair values[70](index=70&type=chunk) [Borrowings](index=24&type=section&id=Borrowings) The Group's bank borrowings increased to RMB 77.948 million, all due within one year; the weighted average annual interest rate was 2.96%, a decrease from the end of 2024; all borrowings are corporate guaranteed by a subsidiary of the Company, with some also government guaranteed Borrowings | Item | As of June 30, 2025 (RMB thousands) | As of December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Bank borrowings | 77,948 | 64,148 | | Weighted average annual interest rate | 2.96% | 3.37% | - All bank borrowings are due within one year and are corporate guaranteed by a subsidiary of the Company[71](index=71&type=chunk) - Part of the borrowings (**RMB 10,000,000**) are guaranteed by a government guarantor[71](index=71&type=chunk) - The Group has complied with the financial covenants of its borrowings[71](index=71&type=chunk) [Other Information](index=25&type=section&id=Other%20Information) [Purchase, Sale or Redemption of the Company's Securities](index=25&type=section&id=Purchase,%20Sale%20or%20Redemption%20of%20the%20Company's%20Securities) During the reporting period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any listed securities; the company holds 4,891,600 treasury shares and has shareholder authorization to repurchase up to 10% of the total issued shares - Directors have been granted a general mandate by shareholders to repurchase up to **10%** of the total issued shares as of the date of the relevant resolution, amounting to **11,581,020 shares**[72](index=72&type=chunk) - During the reporting period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[72](index=72&type=chunk) - As of the date of this announcement, the Company holds **4,891,600 treasury shares**[72](index=72&type=chunk) [Dividend Policy](index=25&type=section&id=Dividend%20Policy) The Board does not recommend the payment of any dividends for the six months ended June 30, 2025 - The Board does not recommend the payment of any dividends for the six months ended June 30, 2025[73](index=73&type=chunk) [Corporate Governance Code](index=25&type=section&id=Corporate%20Governance%20Code) The Company complies with all code provisions of Appendix C1 of the Listing Rules' Corporate Governance Code, except for Mr. Sun Guangjun serving as both Chairman and Chief Executive Officer, deviating from code provision C.2.1; the Board believes this arrangement ensures consistent leadership and timely decision-making, with the Board structure balancing power and authority - The Company complies with all code provisions of Appendix C1 of the Listing Rules' Corporate Governance Code, except for Mr. Sun Guangjun serving as both Chairman and Chief Executive Officer, deviating from code provision **C.2.1**[74](index=74&type=chunk) - The Board believes that Mr. Sun Guangjun's dual role as Chairman and Chief Executive Officer ensures consistent leadership and timely, effective decision-making for the Group[75](index=75&type=chunk) - The Board comprises two executive directors and three independent non-executive directors, possessing strong independent elements to ensure a balance of power and authority[75](index=75&type=chunk) [Standard Code for Securities Transactions](index=26&type=section&id=Standard%20Code%20for%20Securities%20Transactions) The Company has adopted the Standard Code for Securities Transactions by Directors of Listed Issuers in Appendix C3 of the Listing Rules, and all Directors confirmed compliance with the code during the reporting period - The Company has adopted the Standard Code for Securities Transactions by Directors of Listed Issuers in Appendix C3 of the Listing Rules[76](index=76&type=chunk) - All Directors confirmed their compliance with the requirements regarding Directors' securities transactions as set out in the Standard Code during the reporting period[76](index=76&type=chunk) [Audit Committee](index=26&type=section&id=Audit%20Committee) The Audit Committee, composed of three independent non-executive directors, has reviewed the interim results; auditors issued qualified opinions on transactions related to two private offshore fund investments in the 2023 and 2024 consolidated financial statements due to scope limitations; the Group has taken steps to improve investment policies and communication mechanisms and initiated legal action against the fund - The Audit Committee comprises three independent non-executive directors, with Mr. Liu Wende serving as Chairman[77](index=77&type=chunk) - The interim results for the six months ended June 30, 2025, are unaudited but have been reviewed by the Audit Committee and by Rongcheng (Hong Kong) CPA Limited, the independent auditor[78](index=78&type=chunk) - The auditors issued qualified opinions on transactions related to two private offshore fund investments in the 2023 and 2024 consolidated financial statements due to insufficient appropriate audit evidence[79](index=79&type=chunk)[80](index=80&type=chunk) - The Group has revised its investment policy, established an investment committee, and initiated legal action to demand the return of outstanding guaranteed amounts from these funds[81](index=81&type=chunk) [Use of Proceeds from Listing](index=29&type=section&id=Use%20of%20Proceeds%20from%20Listing) The Company listed in May 2023, with net proceeds of approximately HKD 206.7 million; as of June 30, 2025, HKD 148.2 million has been utilized, primarily for enhancing sales and marketing capabilities, repaying bank borrowings, and working capital; funds for strengthening core technological capabilities and basic R&D will be gradually used until December 31, 2027 - Total net proceeds from the listing were approximately **HKD 206.7 million**[82](index=82&type=chunk) Use of Proceeds from Listing | Use of Proceeds | Revised Net Proceeds (HKD millions) | Actual Net Amount Used as of June 30, 2025 (HKD millions) | Unused Net Amount as of June 30, 2025 (HKD millions) | Expected Timeline | | :--- | :--- | :--- | :--- | :--- | | Strengthening the Company's core technological capabilities and basic R&D | 66.1 | 13.5 | 52.6 | Gradually utilized until December 31, 2027 | | Enhancing the Company's sales and marketing capabilities | 66.1 | 60.2 | 5.9 | Gradually utilized until December 31, 2027 | | Repaying the Company's bank borrowings | 15.5 | 15.5 | — | Fully utilized as of June 30, 2023 | | Working capital | 59.0 | 59.0 | — | Fully utilized as of June 30, 2025 | | **Total** | **206.7** | **148.2** | **58.5** | | [Significant Events After Reporting Period](index=30&type=section&id=Significant%20Events%20After%20Reporting%20Period) The Group had no significant subsequent events after June 30, 2025, and up to the date of this announcement - The Group had no significant subsequent events after June 30, 2025, and up to the date of this announcement[83](index=83&type=chunk) [Publication of Interim Results and 2025 Interim Report](index=30&type=section&id=Publication%20of%20Interim%20Results%20and%202025%20Interim%20Report) The interim results announcement has been published on the HKEX website and the Company's website, and the 2025 interim report containing all information required by the Listing Rules will be dispatched to shareholders and published on the websites in due course - The interim results announcement has been published on the HKEX website (www.hkexnews.hk) and the Company's website (www.plscn.com)[84](index=84&type=chunk) - The Company's interim report for the six months ended June 30, 2025, containing all information required by the Listing Rules, will be dispatched to shareholders and published on the aforementioned websites in due course[84](index=84&type=chunk) [Definitions](index=30&type=section&id=Definitions) [Definition of Terms](index=30&type=section&id=Definition%20of%20Terms) This section provides definitions for key terms and abbreviations used in the report, including company names, regulatory bodies, financial reporting standards, business models, and geographical areas, to ensure clear understanding of the report content - “The Company” refers to **Plus Group Holdings Inc.**, an exempted company incorporated in the Cayman Islands on **September 30, 2021**, whose shares are listed on the Main Board of the Stock Exchange (Stock Code: **2486**)[85](index=85&type=chunk) - “The Group” refers to the Company and its subsidiaries[85](index=85&type=chunk) - “Reporting Period” refers to the six months ended **June 30, 2025**[86](index=86&type=chunk) - “SaaS” refers to **Software as a Service**, a cloud-based software licensing and delivery model[86](index=86&type=chunk)

[Financial Highlights](index=1&type=section&id=Financial%20Highlights) [Financial Summary](index=1&type=section&id=Financial%20Summary) During the reporting period, the company's performance significantly declined, with revenue decreasing by **14.9%** year-on-year, gross profit sharply falling by **35.6%**, a shift from profit to loss, and basic earnings per share also turning into a loss Financial Summary | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 381,313 | 448,013 | -14.9% | | Gross Profit | 80,653 | 125,239 | -35.6% | | Loss / Profit Before Tax | (135,912) | 74,435 | -282.6% | | Loss / Profit for the Period | (123,497) | 63,473 | -294.6% | | Total Comprehensive Expense / Income for the Period | (130,192) | 45,054 | -389.0% | | Basic Loss / Earnings Per Share (RMB cents) | (6.53) | 3.51 | -285.9% | [Management Discussion and Analysis](index=2&type=section&id=Management%20Discussion%20and%20Analysis) [Business Review](index=2&type=section&id=Business%20Review) As a leading provider of AR and VR content and services in China, the company continued to deepen its expertise in metaverse, AR/VR, AI, and big data technologies, promoting the integration of digital technology with the real economy, achieving progress in technological innovation, market expansion, and brand influence, with AR/VR marketing services revenue decreasing while AR/VR content revenue increased, actively expanding diversified application scenarios [Technology-Driven Innovation, Strengthening the Digital Foundation](index=2&type=section&id=Technology-Driven%20Innovation%2C%20Strengthening%20the%20Digital%20Foundation) As a high-tech enterprise, the company continuously increased R&D investment, optimized AR/VR engines and AI algorithm models, and successfully launched the mobile virtual human live streaming software 'FT live', promoting the popularization and intelligence of virtual content creation - The company continuously increased R&D investment, further optimizing its self-developed AR and VR engines and AI algorithm models, promoting deep integration of AR, VR, and AI technologies[6](index=6&type=chunk) - Successfully launched the mobile virtual human live streaming software 'FT live', featuring self-developed mobile motion capture technology, integrating full-function modules such as scenes, lighting, camera movements, actions, and bullet screen interaction, introducing concepts of 'strong interaction and strong special effects'[7](index=7&type=chunk) [Active Participation in Industry Events, Leading Industrial Development](index=3&type=section&id=Active%20Participation%20in%20Industry%20Events%2C%20Leading%20Industrial%20Development) During the reporting period, the company actively participated in major domestic and international technology and industry exhibitions, showcasing its XR innovation capabilities, sharing insights on technology integration and industry applications, and promoting its virtual live streaming system and AI digital human products - Company management attended the 2025 China Shanghai VR/AR Industry Expo, delivering a keynote speech 'Digital Intelligence Empowerment: Progress and Changes in XR and AI-Driven Industrial Transformation'[8](index=8&type=chunk) - Showcased at the 2025 Zhejiang Service Trade (Shanghai) Digital Cultural Tourism Exhibition, presenting cultural heritage and famous scenic spot metaverse projects, promoting cross-regional cooperation in digital cultural tourism solutions[8](index=8&type=chunk) - Participated in the 2025 'Zhongguancun Hardcore Technology Carnival', showcasing the FT Live virtual live streaming system and Feitian AI Digital Human, receiving widespread industry attention[8](index=8&type=chunk) [Accolades Received, Demonstrating User Recognition and Industry Standing](index=3&type=section&id=Accolades%20Received%2C%20Demonstrating%20User%20Recognition%20and%20Industry%20Standing) The company received honors such as 'STIF 2024 Annual Digital Influence Enterprise' and 'Beijing User Satisfaction Enterprise' for its excellent technical strength and service system, also gaining high recognition from local governments - Awarded 'STIF 2024 Annual Digital Influence Enterprise', recognizing the company's outstanding contributions to promoting industrial digital transformation[9](index=9&type=chunk) - Included in the 'Beijing User Satisfaction Enterprise' list, signifying the company's industry-leading level in service quality, customer experience, and user satisfaction[9](index=9&type=chunk) - Received Huzhou Municipal Government's 2024 'Contributor' award for practical efforts and Anji County's 'High-Growth Demonstration Enterprise' honor, reflecting high recognition from local governments for the company's development potential and regional economic driving role[10](index=10&type=chunk) [AR and VR Marketing Services](index=4&type=section&id=AR%20and%20VR%20Marketing%20Services) AR and VR marketing services revenue decreased by **33.5%** year-on-year to **RMB 214.7 million**, primarily due to a **24.0%** decline in average spending per advertising client, despite stable client numbers and a **93%** renewal rate, with overseas business growing by **2.0%** - AR and VR marketing services generated revenue of **RMB 214.7 million**, a year-on-year decrease of **33.5%**[12](index=12&type=chunk) - The revenue decline was mainly due to a **24.0%** year-on-year decrease in the average spending per advertising client, from **RMB 20,178.1 thousand** to **RMB 15,332.2 thousand**[12](index=12&type=chunk) - Client renewal rate increased to **93%** (compared to 75% in the same period of 2024), reflecting enhanced client stickiness[12](index=12&type=chunk)[13](index=13&type=chunk) - Overseas AR and VR marketing business achieved revenue of **RMB 70.4 million**, a year-on-year increase of **2.0%**[12](index=12&type=chunk) Key Operating Data for AR and VR Marketing Services | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Number of Advertising Clients | 14 | 16 | | Average Monthly Promotion Quantity of Advertising Products | 144 | 143 | | Average Spending Per Advertising Client (RMB thousands) | 15,332.2 | 20,178.1 | | Renewal Rate | 93% | 75% | [AR and VR Content](index=5&type=section&id=AR%20and%20VR%20Content) AR and VR content revenue increased by **12.6%** year-on-year to **RMB 119.9 million**, primarily due to a significant improvement in project quality and unit price, with average project price rising from **RMB 1,238.8 thousand** to **RMB 1,998.7 thousand**, as the company deepened cultural tourism integration and created multiple benchmark cases - AR and VR content generated revenue of **RMB 119.9 million**, a year-on-year increase of **12.6%**[14](index=14&type=chunk) - The average project price increased from **RMB 1,238.8 thousand** to **RMB 1,998.7 thousand**, indicating the company's greater focus on quality and efficiency in project selection and execution[14](index=14&type=chunk)[15](index=15&type=chunk) - Deepened cultural tourism integration, creating the IP short drama "Fantasy Manor", showcasing the "Guilin Elephant Trunk Hill Metaverse Scenic Area" project, and presenting the "Sanxingdui VR Archaeology" project[15](index=15&type=chunk)[16](index=16&type=chunk) Key Operating Data for AR and VR Content Business | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Number of Clients | 17 | 28 | | Number of Projects | 60 | 86 | | Average Project Price (RMB thousands) | 1,998.7 | 1,238.8 | [Application Scenario Expansion and Digital Human Empowerment](index=6&type=section&id=Application%20Scenario%20Expansion%20and%20Digital%20Human%20Empowerment) The company actively expanded AR/VR/MR technology application scenarios in popular science education, cultural tourism, urban services, and enterprise marketing, launched 'Feitian AI Digital Human' for multi-scenario deployment, and leveraged digital twin technology to support smart airport construction - MR mixed reality technology was implemented in popular science education, launching the "Lunar Exploration" MR experience project at the Xuzhou Drone Popular Science Education Base[18](index=18&type=chunk) - The launched "Feitian AI Digital Human" has been deployed in various scenarios such as cultural tourism guidance, enterprise customer service, and municipal government affairs, providing 7x24-hour intelligent voice services[18](index=18&type=chunk) - Partnered with an airport group media company and an airport to create the "Tiangong" digital twin airport marketing platform, pioneering a new model for smart marketing in civil aviation[19](index=19&type=chunk) [Outlook](index=7&type=section&id=Outlook) The company anticipates deepening AI and AR/VR/MR technology integration in the second half of the year, expanding industry application scenarios, enhancing digital content production efficiency and service quality, and strengthening deep cooperation with government, scenic spots, educational institutions, and enterprise clients to build an open and win-win digital ecosystem - In the second half of 2025, the company will continue to deepen the integration of AI with AR and VR/MR technologies, expand into more industry application scenarios, and drive continuous improvement in digital content production efficiency and service quality[21](index=21&type=chunk) - The company will further strengthen deep cooperation with government, scenic spots, educational institutions, and enterprise clients to build an open and win-win digital ecosystem, providing more valuable metaverse products and services to global users[21](index=21&type=chunk) [Financial Review](index=8&type=section&id=Financial%20Review) [Revenue](index=8&type=section&id=Revenue) Total group revenue decreased by **14.9%** year-on-year to **RMB 381.3 million**, primarily due to reduced AR/VR marketing services revenue, while AR/VR content revenue grew, integrated marketing emerged as a new business, AR/VR SaaS revenue significantly contracted, and other business revenue substantially increased - For the six months ended June 30, 2025, the group recognized total revenue of approximately **RMB 381.3 million**, a decrease of approximately **14.9%** compared to the same period in 2024, mainly due to reduced revenue from AR and VR marketing services[22](index=22&type=chunk) Revenue Breakdown (by Service or Product Category) | Service/Product Category | 2025 (RMB thousands) | 2025 (%) | 2024 (RMB thousands) | 2024 (%) | | :--- | :--- | :--- | :--- | :--- | | AR and VR Marketing Services | 214,652 | 56.3 | 322,850 | 72.0 | | AR and VR Content | 119,922 | 31.5 | 106,539 | 23.8 | | Integrated Marketing | 16,827 | 4.4 | — | — | | AR and VR SaaS | 6,221 | 1.6 | 14,295 | 3.2 | | Others | 23,691 | 6.2 | 4,329 | 1.0 | | **Total** | **381,313** | **100.0** | **448,013** | **100.0** | [AR and VR Marketing Services](index=8&type=section&id=AR%20and%20VR%20Marketing%20Services_Revenue) AR and VR marketing services revenue was approximately **RMB 214.7 million**, a year-on-year decrease of **33.5%**, primarily impacted by reduced advertising spending from domestic clients, with revenue growth in the entertainment and e-commerce sectors, but declines in gaming, cultural tourism, and other industries - AR and VR marketing services revenue was approximately **RMB 214.7 million**, a decrease of approximately **33.5%** compared to the same period in 2024, mainly due to domestic clients reducing advertising spending in response to continued weak economic growth[23](index=23&type=chunk) - Revenue from the entertainment and e-commerce sectors increased, while revenue from the internet, cultural tourism, gaming, and automotive industries decreased compared to the same period in 2024[24](index=24&type=chunk) AR and VR Marketing Services Revenue Breakdown (by Client Industry) | Client Industry | 2025 (RMB thousands) | 2025 (%) | 2024 (RMB thousands) | 2024 (%) | | :--- | :--- | :--- | :--- | :--- | | Entertainment | 72,654 | 33.8 | 28,906 | 9.0 | | Internet | 26,312 | 12.3 | 52,194 | 16.2 | | E-commerce | 22,659 | 10.6 | 13,351 | 4.1 | | Cultural Tourism | 22,412 | 10.4 | 42,143 | 13.1 | | Gaming | 28,736 | 13.4 | 119,779 | 37.0 | | Automotive | 0 | 0 | 11,669 | 3.6 | | Others | 41,879 | 19.5 | 54,808 | 17.0 | | **Total** | **214,652** | **100.0** | **322,850** | **100.0** | [AR and VR Content](index=9&type=section&id=AR%20and%20VR%20Content_Revenue) AR and VR content revenue was approximately **RMB 119.9 million**, a year-on-year increase of **12.6%**, primarily driven by a significant increase in spending from major clients in the entertainment industry, with the gaming industry remaining the largest revenue source and the education sector showing significant growth - AR and VR content business revenue was approximately **RMB 119.9 million**, an increase of approximately **12.6%** compared to the same period in 2024, mainly due to a significant increase in spending from major clients in the entertainment industry[26](index=26&type=chunk) - The gaming industry remains the largest revenue source for AR and VR content business (**62.3%**), and revenue from the education industry increased from **7.8%** to **17.7%**[27](index=27&type=chunk) AR and VR Content Business Revenue Breakdown (by Client Industry) | Client Industry | 2025 (RMB thousands) | 2025 (%) | 2024 (RMB thousands) | 2024 (%) | | :--- | :--- | :--- | :--- | :--- | | Entertainment | 18,846 | 15.7 | 9,434 | 8.9 | | Gaming | 74,745 | 62.3 | 78,522 | 73.7 | | Education | 21,183 | 17.7 | 8,355 | 7.8 | | Others | 5,148 | 4.3 | 10,228 | 9.6 | | **Total** | **119,922** | **100.0** | **106,539** | **100.0** | [Integrated Marketing](index=10&type=section&id=Integrated%20Marketing) The integrated marketing business, launched in the second half of 2024, generated approximately **RMB 16.8 million** in revenue during the reporting period, providing comprehensive marketing services to clients to enhance exposure, follower count, and traffic - The integrated marketing business was newly launched in the second half of 2024, generating revenue of approximately **RMB 16.8 million** for the six months ended June 30, 2025[28](index=28&type=chunk) [AR and VR SaaS](index=10&type=section&id=AR%20and%20VR%20SaaS) AR and VR SaaS business revenue significantly decreased by approximately **56.5%** to **RMB 6.2 million**, primarily due to the group's strategic reduction in the operational scale of this business segment - AR and VR SaaS business revenue significantly decreased by approximately **56.5%**, from approximately **RMB 14.3 million** in the same period of 2024 to approximately **RMB 6.2 million** in the same period of 2025, mainly due to the group's strategic reduction in the operational scale of this business segment[29](index=29&type=chunk) [Other Revenue](index=11&type=section&id=Other_Revenue) Other business revenue significantly increased by **5.5 times** to **RMB 23.7 million**, primarily driven by new business opportunities such as platform services, digital human development and operation services, and short drama production and operation - Other business revenue was approximately **RMB 23.7 million**, a significant increase of **5.5 times** compared to **RMB 4.3 million** in the same period of 2024[30](index=30&type=chunk) - The increase was due to the group's proactive strategy in seeking new business opportunities, including diversifying revenue through digital human development, operation services, and short drama production and management[30](index=30&type=chunk) [Cost of Revenue](index=11&type=section&id=Cost%20of%20Revenue) The group's cost of revenue decreased by **6.9%** year-on-year to **RMB 300.7 million**, primarily due to a reduction in total revenue, with traffic acquisition costs decreasing as a percentage of total costs, while subcontracting and development costs increased - For the six months ended June 30, 2025, the group's cost of revenue was approximately **RMB 300.7 million**, a decrease of approximately **6.9%** compared to the same period in 2024, mainly due to the decrease in the group's revenue during the reporting period[31](index=31&type=chunk) - Traffic acquisition costs decreased from **80.2%** in 2024 to **67.1%** in 2025, while subcontracting and development costs increased from **16.4%** to **24.9%**[31](index=31&type=chunk) Cost of Revenue Breakdown (by Nature) | Cost Nature | 2025 (RMB thousands) | 2025 (%) | 2024 (RMB thousands) | 2024 (%) | | :--- | :--- | :--- | :--- | :--- | | Traffic Acquisition Costs | 201,770 | 67.1 | 258,716 | 80.2 | | Subcontracting and Development Costs | 74,715 | 24.9 | 53,013 | 16.4 | | Others | 24,175 | 8.0 | 11,045 | 3.4 | | **Total** | **300,660** | **100.0** | **322,774** | **100.0** | [Cost of Revenue for AR and VR Marketing Services](index=12&type=section&id=Cost%20of%20Revenue%20for%20AR%20and%20VR%20Marketing%20Services) Cost of revenue for AR and VR marketing services decreased by **22.0%** year-on-year to **RMB 201.8 million**, primarily due to reduced revenue from this business, with cost fluctuations across industries aligning with revenue changes - The cost of revenue generated from AR and VR marketing services was approximately **RMB 201.8 million**, a decrease of approximately **22.0%** compared to the same period in 2024, mainly due to the decrease in AR and VR marketing services revenue during the reporting period[34](index=34&type=chunk) Cost of Revenue for AR and VR Marketing Services Breakdown (by Client Industry) | Client Industry | 2025 (RMB thousands) | 2025 (%) | 2024 (RMB thousands) | 2024 (%) | | :--- | :--- | :--- | :--- | :--- | | Entertainment | 62,912 | 31.2 | 22,831 | 8.8 | | Internet | 22,794 | 11.3 | 40,782 | 15.8 | | E-commerce | 35,956 | 17.8 | 10,397 | 4.0 | | Cultural Tourism | 19,403 | 9.6 | 32,943 | 12.7 | | Gaming | 24,497 | 12.1 | 98,633 | 38.1 | | Automotive | 0 | 0 | 9,288 | 3.6 | | Others | 36,208 | 18.0 | 43,842 | 17.0 | | **Total** | **201,770** | **100.0** | **258,716** | **100.0** | [Cost of Revenue for AR and VR Content](index=12&type=section&id=Cost%20of%20Revenue%20for%20AR%20and%20VR%20Content) Cost of revenue for AR and VR content services increased by **35.7%** year-on-year to **RMB 74.7 million**, primarily due to increased revenue from this business, with the gaming industry remaining the main cost source and the education sector's cost share significantly rising - The cost of revenue generated from AR and VR content services was approximately **RMB 74.7 million**, an increase of approximately **35.7%** compared to the same period in 2024, mainly due to the increase in AR and VR content services revenue during the reporting period[36](index=36&type=chunk) Cost of Revenue for AR and VR Content Business Breakdown (by Client Industry) | Client Industry | 2025 (RMB thousands) | 2025 (%) | 2024 (RMB thousands) | 2024 (%) | | :--- | :--- | :--- | :--- | :--- | | Entertainment | 15,641 | 20.9 | 8,170 | 14.8 | | Gaming | 42,199 | 56.5 | 33,140 | 60.2 | | Education | 12,340 | 16.5 | 4,623 | 8.4 | | Others | 4,535 | 6.1 | 9,110 | 16.6 | | **Total** | **74,715** | **100.0** | **55,043** | **100.0** | [Gross Profit and Gross Profit Margin](index=13&type=section&id=Gross%20Profit%20and%20Gross%20Profit%20Margin) The group's gross profit decreased by **35.6%** year-on-year to **RMB 80.7 million**, with the gross profit margin falling from **28.0%** to **21.2%**, as both AR/VR marketing services and content businesses experienced declining margins, primarily due to reduced advertising client budgets, increased traffic acquisition costs, and rising production costs - The group reported a gross profit of approximately **RMB 80.7 million**, a decrease of approximately **35.6%** compared to the same period in 2024, mainly due to a significant decrease in AR and VR marketing services revenue[37](index=37&type=chunk) - The group's gross profit margin decreased from approximately **28.0%** in the first half of 2024 to approximately **21.2%** in the first half of 2025[38](index=38&type=chunk) - The gross profit margin for AR and VR marketing services decreased from approximately **19.9%** in the first half of 2024 to approximately **13.5%** in the first half of 2025, mainly due to reduced advertising client budgets and increased traffic acquisition costs[37](index=37&type=chunk) - The gross profit margin for AR and VR content business also decreased from approximately **48.3%** in the first half of 2024 to approximately **37.7%** in the same period of 2025, primarily attributable to continuously rising production costs[37](index=37&type=chunk) Gross Profit and Gross Profit Margin Breakdown (by Service and Product Type) | Service/Product Type | 2025 (RMB thousands) | 2025 Gross Profit Margin (%) | 2024 (RMB thousands) | 2024 Gross Profit Margin (%) | | :--- | :--- | :--- | :--- | :--- | | AR and VR Marketing Services | 29,032 | 13.5 | 64,134 | 19.9 | | AR and VR Content | 45,207 | 37.7 | 51,496 | 48.3 | | Integrated Marketing | 676 | 4.0 | — | — | | AR and VR SaaS | 2,367 | 38.0 | 9,249 | 64.7 | | Others | 3,371 | 14.2 | 360 | 8.3 | | **Total** | **80,653** | **21.2** | **125,239** | **28.0** | [Other Income](index=14&type=section&id=Other%20Income_Financial) Other income decreased by **58.2%** year-on-year to **RMB 46 thousand**, primarily because government grants received in the prior year were not obtained in 2025 - Other income was approximately **RMB 46 thousand**, a decrease of approximately **58.2%** compared to the same period in 2024, mainly due to not receiving government grants in 2025 that were obtained in the prior year[39](index=39&type=chunk) [Impairment Loss on Trade Receivables](index=14&type=section&id=Impairment%20Loss%20on%20Trade%20Receivables) Impairment loss on trade receivables significantly increased by approximately **RMB 85.1 million**, primarily due to a rise in long-overdue receivables from major clients, reflecting the impact of current economic challenges on client liquidity - Credit loss provisions for trade receivables amounted to **RMB 143.7 million**, an increase of approximately **RMB 85.1 million** compared to December 31, 2024[41](index=41&type=chunk) - The significant increase in expected credit loss provisions was mainly due to an increase in long-overdue receivables from major clients[41](index=41&type=chunk) - The company has established collection policies, including negotiating repayment plans with clients, and may pursue legal action if satisfactory agreements are not reached[41](index=41&type=chunk) [Distribution and Selling Expenses](index=15&type=section&id=Distribution%20and%20Selling%20Expenses) Distribution and selling expenses significantly increased by approximately **7.8 times** to **RMB 67.9 million**, primarily due to higher costs associated with engaging subcontractors for brand promotion and product launches - Total distribution and selling expenses were approximately **RMB 67.9 million**, a significant increase of approximately **7.8 times** compared to the same period in 2024[43](index=43&type=chunk) - The increase in expenses was mainly due to higher promotion costs related to engaging subcontractors[43](index=43&type=chunk) [Administrative Expenses](index=15&type=section&id=Administrative%20Expenses) Administrative expenses decreased by **46.0%** year-on-year to **RMB 15.0 million**, primarily due to reduced equity-settled share-based payment expenses from employee departures, and lower office expenses, meeting fees, and intermediary service fees resulting from strategic business downsizing - Administrative expenses decreased by approximately **46.0%** from approximately **RMB 27.7 million** in the same period of 2024 to approximately **RMB 15.0 million**[45](index=45&type=chunk) - The decrease was due to reduced equity-settled share-based payment expenses from employee departures, and lower office expenses, meeting fees, and intermediary service fees resulting from strategic business downsizing[45](index=45&type=chunk) [Research and Development Expenses](index=16&type=section&id=Research%20and%20Development%20Expenses) Research and development expenses significantly increased by approximately **3.2 times** to **RMB 46.1 million**, primarily due to the company's increased R&D investment in areas such as motion capture technology and VR large-space, as well as outsourced R&D technology reserve projects - Research and development expenses were approximately **RMB 46.1 million**, a significant increase of approximately **3.2 times** compared to the same period in 2024[46](index=46&type=chunk) - The increase was mainly due to the group's increased R&D investment in areas such as motion capture technology and VR large-space, as well as a substantial increase in outsourced R&D technology reserve projects[46](index=46&type=chunk) [Finance Costs](index=16&type=section&id=Finance%20Costs) Finance costs decreased by **19.2%** year-on-year to **RMB 2.1 million**, primarily due to lower interest rates associated with bank borrowings - Finance costs were approximately **RMB 2.1 million**, a decrease of approximately **19.2%** compared to the same period in 2024, mainly due to lower interest rates associated with the group's bank borrowings during this period[47](index=47&type=chunk) [Income Tax Credit / (Expense)](index=16&type=section&id=Income%20Tax%20Credit%20%2F%20%28Expense%29) Income tax status shifted from an expense in 2024 to a credit of approximately **RMB 12.4 million** in 2025, primarily due to the group incurring a loss during the reporting period - Income tax status shifted from an expense of approximately **RMB 11.0 million** in the same period of 2024 to a credit of approximately **RMB 12.4 million** in the same period of 2025, mainly due to the group reporting a loss for the six months ended June 30, 2025[48](index=48&type=chunk) [Loss / Profit for the Period and Net Profit Margin](index=16&type=section&id=Loss%20%2F%20Profit%20for%20the%20Period%20and%20Net%20Profit%20Margin) The group shifted from a profit to a loss of approximately **RMB 123.5 million** for the period, with the net profit margin decreasing from **14.2%** to **-32.4%**, primarily due to declining revenue, reduced gross profit margin, a significant increase in impairment loss on trade receivables, and substantially higher selling expenses - The group incurred a loss of approximately **RMB 123.5 million** for the six months ended June 30, 2025, a decrease of approximately **RMB 187.0 million** compared to a profit of approximately **RMB 63.5 million** in the same period of 2024[49](index=49&type=chunk) - The group's net profit margin decreased from approximately **14.2%** in the first half of 2024 to **-32.4%** in the first half of 2025[49](index=49&type=chunk) - The loss was mainly due to declining revenue and reduced gross profit margin in the first half of 2025, as well as a significant increase in impairment loss on trade receivables and substantially higher selling expenses[49](index=49&type=chunk) [Financial Position and Resources](index=17&type=section&id=Financial%20Position%20and%20Resources) [Trade Receivables](index=17&type=section&id=Trade%20Receivables_Financial%20Position) Trade receivables increased from **RMB 641.9 million** to **RMB 781.1 million**, primarily due to an increase in days outstanding, reflecting the broader economic challenges impacting client liquidity - The group's trade receivables increased from approximately **RMB 641.9 million** to approximately **RMB 781.1 million** as of June 30, 2025[50](index=50&type=chunk) - The increase was mainly due to an increase in the days outstanding for trade receivables, reflecting broader economic challenges currently affecting client liquidity[50](index=50&type=chunk) - As of the date of this announcement, approximately **RMB 142 million** (**22%**) of the group's trade receivables as of December 31, 2024, have been settled[50](index=50&type=chunk) [Prepayments](index=17&type=section&id=Prepayments_Financial%20Position) Prepayments decreased from **RMB 755.4 million** to **RMB 721.0 million**, primarily due to the utilization of a portion of prepayments for acquiring advertising traffic to support AR/VR marketing services - The group's prepayments decreased from approximately **RMB 755.4 million** as of December 31, 2024, to approximately **RMB 721.0 million** as of June 30, 2025[51](index=51&type=chunk) - The decrease was mainly due to the utilization of a portion of prepayments for acquiring advertising traffic to support the group's AR and VR marketing services[51](index=51&type=chunk) - As of the date of this announcement, approximately **RMB 217.2 million** (approximately **29%**) of the group's prepayments as of December 31, 2024, have been utilized[51](index=51&type=chunk) [Trade Payables](index=18&type=section&id=Trade%20Payables) Trade payables increased from **RMB 170.8 million** to **RMB 235.1 million**, primarily due to suppliers adopting more flexible credit policies, leading to extended payment cycles - Trade payables increased from approximately **RMB 170.8 million** as of December 31, 2024, to approximately **RMB 235.1 million** as of June 30, 2025[52](index=52&type=chunk) - The increase was mainly due to the group's suppliers adopting more flexible credit policies in response to current economic conditions, leading to extended payment cycles[52](index=52&type=chunk) [Borrowings](index=18&type=section&id=Borrowings) Borrowings increased from **RMB 88.0 million** to **RMB 95.5 million**, consistent with business development - Borrowings increased from **RMB 88.0 million** as of December 31, 2024, to **RMB 95.5 million** as of June 30, 2025, consistent with business development[53](index=53&type=chunk) [Contingent Liabilities](index=18&type=section&id=Contingent%20Liabilities) As of June 30, 2025, the group had no significant contingent liabilities - As of June 30, 2025, the group had no significant contingent liabilities[54](index=54&type=chunk) [Liquidity and Capital Resources](index=18&type=section&id=Liquidity%20and%20Capital%20Resources) The group funds its cash requirements through cash generated from operations, bank borrowings, and net proceeds from the global offering, with cash and bank balances totaling **RMB 21.0 million** as of June 30, 2025 - The group funds its cash requirements through cash generated from its operations and bank borrowings, together with net proceeds from the global offering[55](index=55&type=chunk) - As of June 30, 2025, the group's cash and bank balances amounted to **RMB 21.0 million**[55](index=55&type=chunk) [Capital Expenditure](index=19&type=section&id=Capital%20Expenditure) Capital expenditure for the reporting period was **RMB 45.2 million**, primarily for intangible assets and equipment, funded by cash generated from operations and bank borrowings - During the reporting period, the group's capital expenditure was **RMB 45.2 million**, mainly comprising expenditure on intangible assets and equipment[56](index=56&type=chunk) [Pledge of Assets](index=19&type=section&id=Pledge%20of%20Assets) As of June 30, 2025, the group had no pledged assets - As of June 30, 2025, the group had no pledged assets[58](index=58&type=chunk) [Gearing Ratio](index=19&type=section&id=Gearing%20Ratio) The gearing ratio is not applicable as the group is in a net cash position - The gearing ratio is not applicable because the group is in a net cash position[59](index=59&type=chunk) [Foreign Exchange Risk Management](index=19&type=section&id=Foreign%20Exchange%20Risk%20Management) The group primarily operates in China, with most transactions settled in RMB, facing foreign exchange risks related to USD and HKD, but currently has no significant foreign currency risk and has not entered into any foreign currency hedging transactions - The group primarily conducts its business in China, with most transactions settled in RMB, and is exposed to foreign exchange risks arising from different currencies, mainly related to USD and HKD[60](index=60&type=chunk) - As of June 30, 2025, apart from certain bank balances denominated in foreign currencies, the group did not face significant foreign currency risk from its operations and currently has no foreign currency hedging transactions[60](index=60&type=chunk) [Financial Instruments](index=19&type=section&id=Financial%20Instruments) As of June 30, 2025, the group had no financial instruments for hedging purposes - As of June 30, 2025, the group had no financial instruments for hedging purposes[61](index=61&type=chunk) [Treasury Policy](index=19&type=section&id=Treasury%20Policy) The Board will continue to adhere to a prudent treasury policy to maintain high liquidity, ensuring the ability to seize future growth opportunities - The directors will continue to adhere to the group's prudent treasury policy to manage its financial resources, aiming to maintain high liquidity to ensure that future growth opportunities can be seized when they arise[62](index=62&type=chunk) [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=20&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (Key Items)](index=20&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income_Key%20Items) During the reporting period, the group shifted from profit to a loss of **RMB 123.5 million**, with total comprehensive expense of **RMB 130.2 million**, and basic loss per share of **RMB 6.53 cents** Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (Key Items) | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Revenue | 381,313 | 448,013 | | Cost of Revenue | (300,660) | (322,774) | | Gross Profit | 80,653 | 125,239 | | Other Income | 46 | 110 | | Trade Receivables (Impairment Loss) / Reversal of Impairment Loss | (85,064) | 620 | | Distribution and Selling Expenses | (67,862) | (8,701) | | Administrative Expenses | (14,960) | (27,725) | | Research and Development Expenses | (46,116) | (14,350) | | Finance Costs | (2,061) | (2,567) | | Loss / Profit Before Tax | (135,912) | 74,435 | | Income Tax Credit / (Expense) | 12,415 | (10,962) | | Loss / Profit for the Period | (123,497) | 63,473 | | Total Comprehensive Expense / Income for the Period | (130,192) | 45,054 | | Basic and Diluted Loss / Earnings Per Share (RMB cents) | (6.53) | 3.51 | [Condensed Consolidated Statement of Financial Position](index=22&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) [Condensed Consolidated Statement of Financial Position (Key Items)](index=22&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position_Key%20Items) As of June 30, 2025, the group's total assets slightly decreased, with non-current assets increasing and current assets decreasing, while current liabilities rose, leading to a reduction in net current assets and a decline in total equity Condensed Consolidated Statement of Financial Position (Key Items) | Metric | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | **Non-current Assets** | | | | Equipment | 3,283 | 5,222 | | Right-of-use Assets | 2,211 | 1,963 | | Intangible Assets | 122,723 | 99,676 | | Equity Investments at Fair Value Through Other Comprehensive Income | 68,637 | 74,882 | | Investments at Fair Value Through Profit or Loss | 10,000 | 10,000 | | Deferred Tax Assets | 24,072 | 10,512 | | **Total Non-current Assets** | **230,926** | **202,255** | | **Current Assets** | | | | Trade Receivables | 781,056 | 641,885 | | Prepayments | 721,032 | 755,418 | | Bank and Cash Balances | 20,995 | 162,422 | | **Total Current Assets** | **1,530,281** | **1,568,254** | | **Current Liabilities** | | | | Trade and Bills Payables | 255,072 | 190,821 | | Borrowings | 95,500 | 88,000 | | **Total Current Liabilities** | **416,915** | **373,507** | | **Net Current Assets** | **1,113,366** | **1,194,747** | | **Net Assets** | **1,322,592** | **1,383,002** | | **Total Equity** | **1,322,592** | **1,383,002** | [Notes to the Condensed Consolidated Financial Statements](index=24&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) [General Information](index=24&type=section&id=General%20Information) Feitian Yundong Technology Co Ltd was incorporated in the Cayman Islands, with its shares listed on the Main Board of the Stock Exchange, primarily engaged in providing AR and VR marketing services, AR and VR content, and related services - The company was incorporated in the Cayman Islands, and its shares were listed on the Main Board of The Stock Exchange of Hong Kong Limited on October 18, 2022[68](index=68&type=chunk) - The group is principally engaged in providing augmented reality and virtual reality (AR and VR) marketing services, AR and VR content, and related services[68](index=68&type=chunk) [Basis of Preparation](index=24&type=section&id=Basis%20of%20Preparation) The condensed consolidated financial statements are prepared in accordance with International Accounting Standard 34 'Interim Financial Reporting' and the applicable disclosure requirements of the Listing Rules of the Stock Exchange, using consistent accounting policies and methods of computation as the annual financial statements for the year ended December 31, 2024 - These condensed consolidated financial statements have been prepared in accordance with International Accounting Standard 34 'Interim Financial Reporting' issued by the International Accounting Standards Board and the applicable disclosure requirements of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited[69](index=69&type=chunk) - The accounting policies and methods of computation adopted in preparing these condensed consolidated financial statements are consistent with those adopted in the annual financial statements for the year ended December 31, 2024[69](index=69&type=chunk) [Adoption of New and Revised International Financial Reporting Standards](index=24&type=section&id=Adoption%20of%20New%20and%20Revised%20International%20Financial%20Reporting%20Standards) The group has adopted all new and revised International Financial Reporting Standards effective from January 1, 2025, which did not result in significant changes to accounting policies or the presentation of financial statements - During the current period, the group has adopted all new and revised International Financial Reporting Standards that are relevant to its operations and effective for accounting periods beginning on January 1, 2025[70](index=70&type=chunk) - The adoption of these new and revised International Financial Reporting Standards has not resulted in significant changes to the group's accounting policies, the presentation of the group's consolidated financial statements, or the amounts reported for the current and prior years[70](index=70&type=chunk) [Revenue and Segment Information](index=25&type=section&id=Revenue%20and%20Segment%20Information) Revenue details are presented by customer contract pricing, revenue recognition timing, and geographical market, with the group having only one reportable operating segment, thus no segment information is presented Revenue Breakdown by Customer Contract Pricing, Revenue Recognition Timing, and Geographical Market | Category | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | **Customer Contract Pricing** | | | | AR and VR Marketing Services | 214,652 | 322,850 | | AR and VR Content | 119,922 | 106,539 | | Integrated Marketing Services | 16,827 | — | | AR and VR Software as a Service ('SaaS') Services | 6,221 | 14,295 | | Platform Services | 14,174 | 156 | | Digital Human Development and Operation Services | 3,856 | — | | Others | 5,661 | 4,173 | | **Total** | **381,313** | **448,013** | | **Timing of Revenue Recognition** | | | | At a point in time | 375,092 | 438,463 | | Over time | 6,221 | 9,550 | | **Total** | **381,313** | **448,013** | | **Geographical Market** | | | | Mainland China | 310,918 | 378,064 | | Hong Kong | 70,395 | 69,949 | | **Total** | **381,313** | **448,013** | Geographical Breakdown of Non-current Assets | Geographical Location | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Mainland China | 117,479 | 93,922 | | Hong Kong | 10,738 | 12,939 | | **Total** | **128,217** | **106,861** | - For management purposes, the group does not organize its business units by service, and the group has only one reportable operating segment[72](index=72&type=chunk) [Income Tax (Credit) / Expense](index=26&type=section&id=Income%20Tax%20%28Credit%29%20%2F%20Expense) Income tax shifted from an expense in 2024 to a credit in 2025, primarily comprising current income tax and deferred tax Income Tax (Credit) / Expense Breakdown | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Current Income Tax | 1,145 | 11,399 | | Deferred Tax | (13,560) | (437) | | **Total** | **(12,415)** | **10,962** | [Loss / Profit for the Period](index=26&type=section&id=Loss%20%2F%20Profit%20for%20the%20Period) The calculation of loss/profit for the period has accounted for items such as depreciation of equipment, depreciation of right-of-use assets, and amortization of intangible assets Loss / Profit for the Period Deductions | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Depreciation of Equipment | 2,039 | 2,010 | | Depreciation of Right-of-use Assets | 2,371 | 2,569 | | Amortization of Intangible Assets (included in cost of revenue and R&D expenses) | 23,603 | 15,784 | [Dividends](index=26&type=section&id=Dividends) No dividends were paid or proposed for the six months ended June 30, 2025 - No dividends were paid or proposed for the six months ended June 30, 2025 (six months ended June 30, 2024: nil)[75](index=75&type=chunk) [Loss / Earnings Per Share](index=27&type=section&id=Loss%20%2F%20Earnings%20Per%20Share) Basic and diluted loss per share was **RMB 6.53 cents**, calculated based on a loss for the period of **RMB 123.508 million** and a weighted average of **1,891,908 thousand** ordinary shares - Basic and diluted loss / earnings per share was **RMB (6.53) cents**[77](index=77&type=chunk) Basic and Diluted Loss / Earnings Per Share Calculation Data | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Loss / Profit used in calculating basic and diluted loss / earnings per share | (123,508) | 63,473 | | Weighted average number of ordinary shares (thousands) used in calculating basic and diluted loss / earnings per share | 1,891,908 | 1,807,224 | [Intangible Assets](index=27&type=section&id=Intangible%20Assets) During the reporting period, the group acquired software for **RMB 46,566 thousand** and intellectual property for **RMB 130 thousand** - For the six months ended June 30, 2025, the group acquired software for **RMB 46,566 thousand** and intellectual property for **RMB 130 thousand**[78](index=78&type=chunk) [Trade Receivables (Aging Analysis)](index=27&type=section&id=Trade%20Receivables_Notes) Total trade receivables amounted to **RMB 781.1 million**, with over **RMB 226.9 million** being overdue for more than one year, representing a significant proportion Aging Analysis of Trade Receivables | Aging | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Within 6 months | 302,369 | 282,108 | | Over 6 months but within 1 year | 251,814 | 220,084 | | Over 1 year | 226,873 | 139,693 | | **Total** | **781,056** | **641,885** | [Prepayments (Details)](index=28&type=section&id=Prepayments_Notes) Total prepayments amounted to **RMB 721.0 million**, primarily used for purchasing advertising traffic and outsourcing services Prepayments Details | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Prepayments for traffic acquisition | 710,198 | 742,383 | | Prepayments for outsourcing services | 9,617 | 9,007 | | Prepayments for intangible assets | 102 | 1,689 | | Others | 1,115 | 2,339 | | **Total** | **721,032** | **755,418** | [Trade and Bills Payables](index=28&type=section&id=Trade%20and%20Bills%20Payables) Total trade and bills payables amounted to **RMB 255.1 million**, with trade payables at **RMB 235.1 million**, and an increased proportion of payables overdue for more than 6 months Trade and Bills Payables Details | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Trade Payables | 235,072 | 170,821 | | Bills Payables | 20,000 | 20,000 | | **Total** | **255,072** | **190,821** | Aging Analysis of Trade Payables | Aging | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Within 6 months | 145,617 | 100,448 | | Over 6 months but within 1 year | 56,675 | 28,834 | | Over 1 year but within 2 years | 4,991 | 22,887 | | Over 2 years | 27,789 | 18,652 | | **Total** | **235,072** | **170,821** | [Share Capital](index=29&type=section&id=Share%20Capital) As of June 30, 2025, the number of issued and fully paid ordinary shares was **2,168,328 thousand**, with a par value of **RMB 154 thousand**, and **361,000 thousand** new ordinary shares were issued during the reporting period - As of June 30, 2025, the number of issued and fully paid ordinary shares was **2,168,328 thousand** shares, equivalent to a par value of **RMB 154 thousand**[81](index=81&type=chunk) - On May 19, 2025, the company issued **361,000,000** new ordinary shares at a subscription price of **HKD 0.201** per share, for a total cash consideration of **RMB 66,862,000**[81](index=81&type=chunk) Details of Share Capital Movement | Item | Number of Ordinary Shares (thousands) | Par Value of Ordinary Shares (USD thousands) | Par Value of Ordinary Shares (RMB thousands) | | :--- | :--- | :--- | :--- | | Authorized: As at January 1, 2024, December 31, 2024, January 1, 2025 and June 30, 2025 | 5,000,000 | 50 | 319 | | Issued and fully paid: As at January 1, 2024, December 31, 2024 and January 1, 2025 | 1,810,000 | 18 | 128 | | Shares issued | 361,000 | 4 | 26 | | Shares cancelled | (2,672) | — | — | | **As at June 30, 2025** | **2,168,328** | **22** | **154** | [Comparative Figures](index=29&type=section&id=Comparative%20Figures) Comparative figures have been reclassified to conform with the current period's presentation, including the reclassification of private equity fund investments previously designated as equity investments at fair value through other comprehensive income to investments at fair value through profit or loss - Comparative figures have been reclassified to conform with the current period's presentation, including the reclassification of private equity fund investments previously designated as equity investments at fair value through other comprehensive income to investments at fair value through profit or loss[81](index=81&type=chunk) [Other Information](index=30&type=section&id=Other%20Information) [Material Investments Held, Material Acquisitions and Disposals of Subsidiaries, Associates and Joint Ventures](index=30&type=section&id=Material%20Investments%20Held%2C%20Material%20Acquisitions%20and%20Disposals%20of%20Subsidiaries%2C%20Associates%20and%20Joint%20Ventures) As of June 30, 2025, the group held **31,101,000** shares of Hebei Yichen Industrial Group Co Ltd, with a fair value of approximately **RMB 68.6 million**, and recorded a fair value loss of **RMB 6.3 million** during the reporting period - As of June 30, 2025, the group held **31,101,000** shares of Hebei Yichen Industrial Group Co Ltd, representing approximately **3.5%** of Yichen's total issued share capital[82](index=82&type=chunk) - The fair value of the equity investment was approximately **RMB 68.6 million**, and a fair value loss of **RMB 6.3 million** was recorded during the reporting period[82](index=82&type=chunk) - During the reporting period, the company did not receive any dividend income from Yichen[83](index=83&type=chunk) [Future Plans for Material Investments or Capital Assets](index=30&type=section&id=Future%20Plans%20for%20Material%20Investments%20or%20Capital%20Assets) The group intends to utilize the net proceeds from the global offering according to the plans outlined in the 'Use of Proceeds from Listing' section, with no other material investment or capital asset plans - The group intends to utilize the net proceeds from the global offering according to the plans outlined in the 'Use of Proceeds from Listing' section of this announcement[85](index=85&type=chunk) [Employees and Remuneration Policy](index=31&type=section&id=Employees%20and%20Remuneration%20Policy) As of June 30, 2025, the group had **103** full-time employees, all located in China, attracting, motivating, and retaining qualified personnel through competitive remuneration, performance-based incentive schemes, and diverse training programs - As of June 30, 2025, the group had **103** full-time employees, all located in China[86](index=86&type=chunk) - The group offers competitive remuneration packages and working environments, and has established a performance-based incentive scheme to motivate employees[86](index=86&type=chunk) - The group places high importance on providing training to its employees, including induction training, product training, business training, financial training, and management training[87](index=87&type=chunk) [Use of Proceeds from Listing](index=31&type=section&id=Use%20of%20Proceeds%20from%20Listing) Net proceeds from the global offering were approximately **HKD 531.9 million**; as of June 30, 2025, **HKD 79.8 million** was allocated for selected mergers, acquisitions, and strategic investments, with **HKD 69.8 million** utilized and the remaining **HKD 69.8 million** expected to be used by the end of 2025, while other proposed uses remained unutilized - The company received net proceeds of approximately **HKD 531.9 million** from the global offering[88](index=88&type=chunk) - As of June 30, 2025, the intended use for selected mergers, acquisitions, and strategic investments was **HKD 79.8 million**, with **HKD 69.8 million** utilized and **HKD 69.8 million** unutilized, expected to be used by the end of 2025[89](index=89&type=chunk) - Other intended uses, including enhancing R&D capabilities, improving sales and marketing functions, developing the Feitian Metaverse platform, and working capital, remained unutilized as of June 30, 2025[89](index=89&type=chunk) Intended and Actual Use of Net Proceeds from Listing | Intended Use | Net Proceeds (HKD millions) | Percentage of Total Net Proceeds (%) | Net Proceeds Utilized as at June 30, 2025 (HKD millions) | Net Proceeds Unutilized as at June 30, 2025 (HKD millions) | Expected Timeline for Unutilized Net Proceeds | | :--- | :--- | :--- | :--- | :--- | :--- | | Enhancing our R&D capabilities and improving our services and products | 175.6 | 33.0% | 0.0 | 0.0 | — | | Enhancing sales and marketing functions | 133.0 | 25.0% | 0.0 | 0.0 | — | | Selected mergers, acquisitions and strategic investments | 79.8 | 15.0% | 69.8 | 69.8 | By end of 2025 | | Developing our Feitian Metaverse platform | 53.1 | 10.0% | 0.0 | 0.0 | — | | Working capital and general corporate purposes | 53.2 | 10.0% | 0.0 | 0.0 | — | | **Total** | **531.9** | **100.0** | **69.8** | **69.8** | | [Use of Proceeds from Placing](index=33&type=section&id=Use%20of%20Proceeds%20from%20Placing) Net proceeds from the placing amounted to approximately **HKD 71.62 million**; as of June 30, 2025, **HKD 33.29 million** was utilized, including **HKD 19.29 million** for enhancing R&D capabilities and improving services/products, **HKD 10.5 million** for sales and marketing functions, and **HKD 3.5 million** for general working capital, with the remaining funds expected to be used by the end of 2025 - The net proceeds from the placing (after deducting placing commissions payable to the placing agent and other expenses incurred from the placing) amounted to approximately **HKD 71.62 million**[93](index=93&type=chunk) - As of June 30, 2025, **HKD 33.29 million** of the net proceeds had been utilized, including **HKD 19.29 million** for enhancing R&D capabilities and improving services and products, **HKD 10.5 million** for enhancing sales and marketing functions, and **HKD 3.5 million** for general working capital purposes[93](index=93&type=chunk) - The remaining net proceeds of **HKD 38.33 million** are expected to be utilized by the end of 2025[93](index=93&type=chunk) Intended and Actual Use of Net Proceeds from Placing | Intended Use | Net Proceeds (HKD millions) | Percentage of Total Net Proceeds (%) | Net Proceeds Utilized as at June 30, 2025 (HKD millions) | Net Proceeds Unutilized as at June 30, 2025 (HKD millions) | Expected Timeline for Unutilized Net Proceeds | | :--- | :--- | :--- | :--- | :--- | :--- | | Enhancing R&D capabilities and improving services and products | 42.97 | 60.0% | 19.29 | 23.68 | By end of 2025 | | Enhancing sales and marketing functions | 21.49 | 30.0% | 10.5 | 10.99 | By end of 2025 | | General working capital purposes | 7.16 | 10.0% | 3.5 | 3.66 | By end of 2025 | | **Total** | **71.62** | **100.0** | **33.29** | **38.33** | | [Interim Dividend](index=34&type=section&id=Interim%20Dividend) The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025 - The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025[94](index=94&type=chunk) [Compliance with Corporate Governance Practices](index=34&type=section&id=Compliance%20with%20Corporate%20Governance%20Practices) The company complied with all applicable principles and code provisions of the Corporate Governance Code during the reporting period, except for Mr. Wang Lei holding both Chairman and Chief Executive Officer roles, an arrangement the Board believes benefits management and whose effectiveness will be continuously reviewed - The company has complied with all applicable principles and code provisions of the Corporate Governance Code during the reporting period and up to the date of this announcement[96](index=96&type=chunk) - There was a deviation from Code Provision C.2.1 of the Corporate Governance Code, where the roles of Chairman and Chief Executive Officer of the company were not segregated and were both held by Mr. Wang Lei[96](index=96&type=chunk) - The Board believes that the combined roles of Chairman and Chief Executive Officer facilitate efficient management of the group and will continue to review the effectiveness of the company's corporate governance structure[96](index=96&type=chunk) [Compliance with the Standard Code for Securities Transactions](index=35&type=section&id=Compliance%20with%20the%20Standard%20Code%20for%20Securities%20Transactions) The company has adopted the Standard Code, and all directors confirmed compliance with it during the reporting period - The company has adopted the Standard Code as its code of conduct for securities transactions by directors and relevant employees[97](index=97&type=chunk) - Following specific inquiries with all directors, they have all confirmed compliance with the Standard Code during the reporting period[98](index=98&type=chunk) [Audit Committee](index=35&type=section&id=Audit%20Committee) The Audit Committee, comprising three independent non-executive directors, reviewed the group's interim results and deemed them compliant with applicable accounting standards, Listing Rules, and legal requirements - The Audit Committee comprises three independent non-executive directors, namely Ms. Chen Yuelin, Mr. Jiang Yi, and Mr. Li Shaojie, with Ms. Chen Yuelin serving as the chairperson[99](index=99&type=chunk) - The Audit Committee has reviewed the group's unaudited condensed consolidated interim results for the reporting period with the company's management and external auditors, and is of the opinion that the interim results comply with applicable accounting standards, the Listing Rules, and all other applicable legal requirements[100](index=100&type=chunk) [Purchase, Sale or Redemption of the Company's Securities](index=36&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company%27s%20Securities) During the reporting period, neither the company nor its subsidiaries purchased, sold, or redeemed any listed securities; **2,672,000** shares repurchased in 2023 were cancelled in May 2025, while **1,182,000** shares repurchased in 2024 are held as treasury shares - For the six months ended June 30, 2025, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities[101](index=101&type=chunk) - A total of **2,672,000** shares repurchased in 2023 were cancelled in May 2025[101](index=101&type=chunk) - A total of **1,182,000** shares repurchased in 2024 are held as treasury shares, and the company intends to use these treasury shares in accordance with applicable rules and regulations[101](index=101&type=chunk) [Events After the Reporting Period](index=36&type=section&id=Events%20After%20the%20Reporting%20Period) No significant events affecting the group occurred after the reporting period - No significant events affecting the group occurred after the reporting period[102](index=102&type=chunk) [Publication of Interim Results Announcement and Interim Report](index=36&type=section&id=Publication%20of%20Interim%20Results%20Announcement%20and%20Interim%20Report) The interim results announcement has been published on the Stock Exchange and the company's website, with the interim report to be dispatched and published in due course - This interim results announcement has been published on the website of the Stock Exchange and the company's website[103](index=103&type=chunk) [Definitions](index=36&type=section&id=Definitions) This section provides definitions for key terms used in the report, covering financial, technical, and corporate governance-related vocabulary - This section provides definitions for key terms used in the report, covering financial, technical, and corporate governance-related vocabulary, such as AR, VR, AI, SaaS, XR, IFRS, and Listing Rules[104](index=104&type=chunk)[105](index=105&type=chunk)[106](index=106&type=chunk)[107](index=107&type=chunk)[110](index=110&type=chunk) [Board of Directors](index=39&type=section&id=Board%20of%20Directors) As of the announcement date, the Board of Directors comprises three executive directors (Mr. Wang Lei, Ms. Xu Bing, and Mr. Li Yao) and three independent non-executive directors (Mr. Jiang Yi, Ms. Chen Yuelin, and Mr. Li Shaojie) - As of the date of this announcement, the Board of Directors comprises executive directors Mr. Wang Lei, Ms. Xu Bing, and Mr. Li Yao, and independent non-executive directors Mr. Jiang Yi, Ms. Chen Yuelin, and Mr. Li Shaojie[109](index=109&type=chunk)

[GEM Listing Characteristics](index=2&type=section&id=GEM%20Listing%20Characteristics) The GEM market provides a listing platform for small and medium-sized companies, characterized by higher investment risks and market volatility, with the Stock Exchange disclaiming responsibility for report content - The GEM market is positioned as a listing platform for high-investment-risk small and medium-sized companies[2](index=2&type=chunk) - GEM securities may be subject to higher market volatility risks, and high liquidity is not guaranteed[2](index=2&type=chunk) - Hong Kong Exchanges and Clearing Limited and the Stock Exchange are not responsible for the content of this report[2](index=2&type=chunk) [Condensed Consolidated Financial Statements](index=3&type=section&id=Condensed%20Consolidated%20Financial%20Statements) This section presents the condensed consolidated financial statements, including statements of profit or loss, financial position, changes in equity, and cash flows, for the reporting period [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=3&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For the six months ended June 30, 2025, the company turned from profit to loss, with a significant decrease in revenue, gross profit, and profit before tax, mainly due to reduced business scale and disposal of a subsidiary Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (HK$ '000) | Item | 2025 (Unaudited) | 2024 (Unaudited) | | :--- | :--- | :--- | | Revenue | 140,628 | 461,249 | | Cost of services | (136,111) | (437,847) | | Gross profit | 4,517 | 23,402 | | Other income | 8,755 | 1,819 | | Net other gains | 1,671 | 8,243 | | Net impairment loss on financial assets | (744) | – | | Loss on disposal of a subsidiary | – | (2,431) | | Administrative expenses | (16,117) | (19,517) | | Finance costs | (913) | (3,563) | | (Loss)/Profit before tax | (2,831) | 7,953 | | Income tax expense | – | (1,101) | | (Loss)/Profit and total comprehensive income attributable to owners of the Company for the period | (2,831) | 6,852 | | Basic and diluted (HK$) per share | (0.03) | 0.08 | [Condensed Consolidated Statement of Financial Position](index=4&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the company's non-current assets decreased, while trade receivables within current assets significantly increased. Overall current liabilities decreased, leading to growth in net current assets and net assets Condensed Consolidated Statement of Financial Position (HK$ '000) | Item | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :--- | :--- | :--- | | **Non-current assets** | | | | Property, plant and equipment | 17,089 | 22,707 | | Right-of-use assets | 16,909 | 20,515 | | Intangible assets | 144 | 160 | | Deposits and prepayments | 3,561 | 2,175 | | Deferred tax assets | 763 | 763 | | **Total non-current assets** | **38,466** | **46,320** | | **Current assets** | | | | Trade receivables | 73,411 | 46,330 | | Other receivables, deposits and prepayments | 25,673 | 37,837 | | Pledged bank balances | 17,700 | 17,700 | | Cash and cash equivalents | 44,725 | 58,994 | | **Total current assets** | **161,509** | **160,861** | | **Current liabilities** | | | | Trade payables | 5,424 | 4,249 | | Other payables and accrued expenses | 17,046 | 17,625 | | Provisions | 4,317 | 3,321 | | Bank borrowings | 23 | 8,701 | | Lease liabilities | 7,209 | 7,041 | | Loan from a director of the Company | – | 540 | | Tax payable | 1,851 | 2,152 | | **Total current liabilities** | **35,870** | **43,629** | | **Net current assets** | **125,639** | **117,232** | | **Total assets less current liabilities** | **164,105** | **163,552** | | **Non-current liabilities** | | | | Provisions | 4,761 | 2,809 | | Deferred tax liabilities | 2,721 | 2,721 | | Lease liabilities | 7,999 | 11,646 | | **Total non-current liabilities** | **15,481** | **17,176** | | **Net assets** | **148,624** | **146,376** | | **Capital and reserves** | | | | Issued share capital | 23,040 | 19,200 | | Reserves | 125,584 | 127,176 | | **Equity attributable to owners of the Company** | **148,624** | **146,376** | [Condensed Consolidated Statement of Changes in Equity](index=5&type=section&id=Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) For the six months ended June 30, 2025, the company's total equity slightly increased, mainly due to growth in share capital and share premium from share placement, partially offset by the loss for the period Condensed Consolidated Statement of Changes in Equity (HK$ '000) | Item | Issued share capital | Share premium | Other reserves | Accumulated profits | Total | | :--- | :--- | :--- | :--- | :--- | :--- | | January 1, 2024 (Audited) | 4,800 | 38,472 | 11,051 | 46,956 | 101,279 | | Issue of ordinary shares under rights issue | 14,400 | 27,312 | – | – | 41,712 | | Profit and total comprehensive income for the period | – | – | – | 6,852 | 6,852 | | June 30, 2024 (Unaudited) | 19,200 | 65,784 | 11,051 | 53,808 | 149,843 | | January 1, 2025 (Audited) | 19,200 | 65,784 | 11,051 | 50,341 | 146,376 | | Issue of placing shares | 3,840 | 1,239 | – | – | 5,079 | | Loss and total comprehensive income for the period | – | – | – | (2,831) | (2,831) | | June 30, 2025 (Unaudited) | 23,040 | 67,023 | 11,051 | 47,510 | 148,624 | - The rights issue was completed on March 1, 2024, with 72,000,000 shares issued, generating net proceeds of approximately **HK$41.7 million**[5](index=5&type=chunk) - The placement of 19,200,000 new shares was completed on May 19, 2025, generating net proceeds of approximately **HK$5.1 million**[5](index=5&type=chunk) [Condensed Consolidated Statement of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) For the six months ended June 30, 2025, the company's operating activities shifted from net cash inflow to outflow, investment activities saw a significant reduction in cash outflow, and financing activities increased cash outflow, resulting in a net decrease in cash and cash equivalents Condensed Consolidated Statement of Cash Flows (HK$ '000) | Item | 2025 (Unaudited) | 2024 (Unaudited) | | :--- | :--- | :--- | | Net cash (used in)/generated from operating activities | (8,354) | 9,496 | | Net cash generated from/(used in) investing activities | 2,076 | (20,664) | | Net cash (used in)/generated from financing activities | (7,991) | 23,109 | | Net (decrease)/increase in cash and cash equivalents | (14,269) | 11,941 | | Cash and cash equivalents at beginning of period | 58,994 | 72,277 | | Cash and cash equivalents at end of period | 44,725 | 84,218 | - The decrease in cash outflow from investing activities is primarily due to the absence of the significant cash outflow from the disposal of a subsidiary in 2024[6](index=6&type=chunk) - The increase in cash outflow from financing activities is mainly due to the absence of net proceeds from the 2024 rights issue and increased repayment of bank and other borrowings[6](index=6&type=chunk) [Notes to the Unaudited Condensed Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20the%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed notes to the unaudited condensed consolidated financial statements, covering general information, accounting policies, segment reporting, and other financial disclosures [1. General Information](index=7&type=section&id=1.%20General%20Information) The company, incorporated in the Cayman Islands and listed on GEM in 2017, primarily operates in environmental hygiene services and online game integrated services, and has established a sponsored Level I American Depositary Receipt program - The company's principal activities include cleaning, pest management, waste management and recycling, horticultural services, and have expanded to online game integrated services[7](index=7&type=chunk) - The company's shares commenced trading on the OTCQB® Venture Market under the stock symbol “LACHF” from June 30, 2025[7](index=7&type=chunk) [2. Basis of Preparation and Presentation](index=7&type=section&id=2.%20Basis%20of%20Preparation%20and%20Presentation) The unaudited condensed consolidated financial statements are prepared in accordance with HKAS 34 and GEM Listing Rules Chapter 18, and presented in Hong Kong dollars - The financial statements are prepared in accordance with Hong Kong Accounting Standard 34 and Chapter 18 of the GEM Listing Rules[9](index=9&type=chunk) - The financial statements are presented in Hong Kong dollars, which is also the Group's functional currency[8](index=8&type=chunk) [3. Significant Accounting Policies](index=7&type=section&id=3.%20Significant%20Accounting%20Policies) The financial statements are prepared under the historical cost convention, with accounting policies consistent with the prior year's consolidated financial statements, and new HKFRS are not expected to have a material impact - The financial statements are prepared under the historical cost convention[10](index=10&type=chunk) - New and revised standards are not expected to have a significant impact on the Group's results and financial position[10](index=10&type=chunk) [4. Revenue and Segment Information](index=8&type=section&id=4.%20Revenue%20and%20Segment%20Information) The Group's revenue primarily originates from Hong Kong (approx. 97%) and China (approx. 3%), with business segments including cleaning, pest management, waste management, horticultural, and online game integrated services; total revenue significantly decreased in H1 2025, but online game services contributed substantial revenue and profit - In H1 2025, approximately **97%** of revenue was derived from Hong Kong and **3%** from China, compared to **100%** from Hong Kong in H1 2024[12](index=12&type=chunk) - The Group's operating segments include cleaning services, pest management services, waste management and recycling services, horticultural services, and online game integrated services[13](index=13&type=chunk) [Segment Revenue and Results](index=9&type=section&id=Segment%20Revenue%20and%20Results) In H1 2025, revenue from cleaning and pest management services significantly decreased, while online game integrated services contributed substantial revenue and results for the first time Segment Revenue and Results (HK$ '000) | Segment | Revenue H1 2025 | Results H1 2025 | Revenue H1 2024 | Results H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Cleaning services | 45,242 | 342 | 399,232 | 22,935 | | Pest management services | 312 | 2 | 12,794 | 43 | | Waste management and recycling services | 48,700 | 525 | 49,074 | 414 | | Horticultural services | 2,535 | 231 | 149 | 10 | | Online game integrated services | 43,839 | 3,417 | – | – | | **Total** | **140,628** | **4,517** | **461,249** | **23,402** | [Segment Assets and Liabilities](index=10&type=section&id=Segment%20Assets%20and%20Liabilities) As of June 30, 2025, assets in the online game integrated services segment significantly increased, while cleaning services assets decreased; for liabilities, cleaning services decreased, and waste management and recycling services increased Segment Assets (HK$ '000) | Segment | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cleaning services | 16,547 | 18,482 | | Pest management services | 3,505 | 312 | | Waste management and recycling services | 38,448 | 53,274 | | Horticultural services | 1,070 | – | | Online game integrated services | 51,466 | 36,643 | | **Total segment assets** | **111,036** | **108,711** | Segment Liabilities (HK$ '000) | Segment | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cleaning services | 13,031 | 20,226 | | Pest management services | 99 | 606 | | Waste management and recycling services | 15,121 | 4,492 | | Horticultural services | 803 | 7 | | Online game integrated services | 660 | 36 | | **Total segment liabilities** | **29,714** | **25,367** | - All assets are allocated to operating and reportable segments, except for certain property, plant and equipment, right-of-use assets, other receivables, deposits and prepayments, pledged bank balances, bank and cash balances, and deferred tax assets[20](index=20&type=chunk) - All liabilities are allocated to operating and reportable segments, except for certain other payables and accrued expenses, tax payable, loan from a director of a subsidiary of the Company, bank borrowings, lease liabilities, and deferred tax liabilities[20](index=20&type=chunk) [5. Net Other Gains](index=11&type=section&id=5.%20Net%20Other%20Gains) For the six months ended June 30, 2025, net other gains significantly decreased, primarily due to reduced net gains from disposal of property, plant and equipment Net Other Gains (HK$ '000) | Item | 2025 (Unaudited) | 2024 (Unaudited) | | :--- | :--- | :--- | | Net gain on disposal of property, plant and equipment | 1,325 | 8,166 | | Net exchange gain | 346 | 77 | | **Total** | **1,671** | **8,243** | - Net other gains decreased by **79.7%** year-on-year, mainly due to a reduction of approximately **HK$6.8 million** in net gains from disposal of property, plant and equipment[19](index=19&type=chunk)[46](index=46&type=chunk) [6. (Loss)/Profit Before Tax](index=12&type=section&id=6.%20(Loss)%2FProfit%20Before%20Tax) For the six months ended June 30, 2025, the company shifted from profit to loss before tax, primarily impacted by expenses such as staff costs, depreciation, and amortization (Loss)/Profit Before Tax Components (HK$ '000) | Item | 2025 (Unaudited) | 2024 (Unaudited) | | :--- | :--- | :--- | | Auditor's remuneration | 400 | 600 | | Directors' remuneration | 1,053 | 1,340 | | Other staff costs - salaries, bonuses and other benefits | 65,652 | 348,468 | | Other staff costs - retirement benefit scheme contributions | 2,108 | 10,019 | | **Total staff costs** | **68,813** | **359,827** | | Depreciation of right-of-use assets, property, plant and equipment | 8,994 | 12,370 | | Amortisation of an intangible asset | 16 | – | - Total staff costs significantly decreased, primarily due to a reduction in business scale[21](index=21&type=chunk)[47](index=47&type=chunk) [7. Income Tax Expense](index=12&type=section&id=7.%20Income%20Tax%20Expense) For the six months ended June 30, 2025, the company incurred no current Hong Kong profits tax expense, compared to HK$1.101 million in the prior period Income Tax Expense (HK$ '000) | Item | 2025 (Unaudited) | 2024 (Unaudited) | | :--- | :--- | :--- | | Hong Kong profits tax - current tax | – | 1,101 | - Hong Kong profits tax is calculated at **8.25%** on the first **HK$2 million** of assessable profits, and **16.5%** on the remainder[23](index=23&type=chunk) [8. Dividends](index=12&type=section&id=8.%20Dividends) The company has not paid, declared, or proposed any dividends during the current or prior interim periods, and the directors do not recommend an interim dividend for the current period - The company has not paid, declared, or proposed any dividends during the current or prior interim periods[24](index=24&type=chunk) [9. (Loss)/Earnings Per Share](index=13&type=section&id=9.%20(Loss)%2FEarnings%20Per%20Share) For the six months ended June 30, 2025, the company's basic earnings per share shifted from HK$0.08 to a loss of HK$0.03 per share, primarily due to the loss for the period and an increase in the weighted average number of ordinary shares from rights issue and share placement (Loss)/Earnings Per Share (HK$) | Item | 2025 (Unaudited) | 2024 (Unaudited) | | :--- | :--- | :--- | | Basic (loss)/earnings per share | (0.03) | 0.08 | | Weighted average number of ordinary shares for basic (loss)/earnings per share calculation | 100,561,326 | 89,261,964 | - The weighted average number of ordinary shares has been adjusted to reflect the impact of the 2024 rights issue and 2025 share placement[26](index=26&type=chunk) - There were no potential dilutive ordinary shares for either period, thus no diluted earnings per share is presented[27](index=27&type=chunk) [10. Property, Plant and Equipment](index=13&type=section&id=10.%20Property%2C%20Plant%20and%20Equipment) During the current interim period, the Group made no acquisitions of property, plant and equipment, compared to approximately HK$3.592 million in the prior period - In H1 2025, the Group made no acquisitions of property, plant and equipment[28](index=28&type=chunk) - In H1 2024, the Group acquired property, plant and equipment of approximately **HK$3.592 million**[28](index=28&type=chunk) [11. Trade Receivables](index=14&type=section&id=11.%20Trade%20Receivables) As of June 30, 2025, total trade receivables significantly increased, primarily concentrated in the 0 to 30-day aging category, with credit terms extended to 90 to 150 days Aging Analysis of Trade Receivables (HK$ '000) | Aging | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :--- | :--- | :--- | | 0 to 30 days | 60,416 | 18,909 | | 31 to 60 days | 8,334 | 16,889 | | 61 to 90 days | 2,145 | 5,956 | | 91 to 180 days | 2,194 | 4,477 | | Over 180 days | 322 | 99 | | **Total** | **73,411** | **46,330** | - The credit period granted to customers by the Group has been extended from **90 days** to **90 to 150 days**[31](index=31&type=chunk) [12. Other Receivables, Deposits and Prepayments](index=14&type=section&id=12.%20Other%20Receivables%2C%20Deposits%20and%20Prepayments) As of June 30, 2024, other receivables from the disposal of vehicles amounted to HK$15.534 million, which were settled on August 9, 2024 - As of June 30, 2024, other receivables from the disposal of vehicles amounted to **HK$15.534 million**, which were settled on August 9, 2024[32](index=32&type=chunk) [13. Trade Payables](index=14&type=section&id=13.%20Trade%20Payables) As of June 30, 2025, total trade payables increased, primarily concentrated in the 0 to 30-day aging category, with credit terms of 30 to 60 days Aging Analysis of Trade Payables (HK$ '000) | Aging | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :--- | :--- | :--- | | 0 to 30 days | 4,491 | 2,279 | | 31 to 60 days | 41 | 1,402 | | 61 to 90 days | 892 | 523 | | Over 90 days | – | 45 | | **Total** | **5,424** | **4,249** | - Credit terms are **30 to 60 days**[33](index=33&type=chunk) [14. Other Payables and Accrued Expenses](index=15&type=section&id=14.%20Other%20Payables%20and%20Accrued%20Expenses) As of June 30, 2025, total other payables and accrued expenses slightly decreased, with a reduction in salaries payable Other Payables and Accrued Expenses (HK$ '000) | Item | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :--- | :--- | :--- | | Salaries payable | 13,018 | 14,093 | | Other payables | 4,028 | 3,532 | | **Total** | **17,046** | **17,625** | [15. Bank Borrowings](index=15&type=section&id=15.%20Bank%20Borrowings) As of June 30, 2025, total bank borrowings significantly decreased, primarily consisting of secured and guaranteed bank borrowings with an effective annual interest rate of 3.75% Bank Borrowings (HK$ '000) | Item | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :--- | :--- | :--- | | Secured and guaranteed bank borrowings: Loans from factored trade receivables with full recourse | 23 | 8,701 | | **Total** | **23** | **8,701** | - Bank borrowings bear interest at a floating rate based on the Hong Kong Prime Rate plus a margin, with an effective annual interest rate of **3.75%** (2024: **3.75% to 4.38%**)[35](index=35&type=chunk)[36](index=36&type=chunk) [16. Disposal of a Subsidiary](index=16&type=section&id=16.%20Disposal%20of%20a%20Subsidiary) On June 25, 2024, Success Beauty Services Limited ceased to be a subsidiary due to the exercise of exchangeable bonds by bondholders, resulting in a disposal loss of HK$2.431 million and a net cash outflow from investing activities of HK$23.510 million - Success Beauty Services Limited ceased to be a subsidiary of the Company on June 25, 2024, due to the exercise of exchangeable bonds[38](index=38&type=chunk) - The disposal resulted in a loss of **HK$2.431 million**[39](index=39&type=chunk) - The total net cash outflow from investing activities was **HK$23.510 million**[39](index=39&type=chunk) [17. Share Capital](index=17&type=section&id=17.%20Share%20Capital) As of June 30, 2025, the company's issued share capital increased due to share placement, while authorized share capital remained unchanged Share Capital Details (HK$ '000) | Item | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :--- | :--- | :--- | | Ordinary shares of HK$0.2 each - Authorised | 100,000 | 100,000 | | Ordinary shares of HK$0.2 each - Issued and fully paid | 23,040 | 19,200 | | Number of ordinary shares issued (shares) | 115,200,000 | 96,000,000 | - In 2025, 19,200,000 shares were placed, with gross proceeds of approximately **HK$5.18 million** and net proceeds of approximately **HK$5.08 million**[42](index=42&type=chunk)[64](index=64&type=chunk) - In 2024, 72,000,000 shares were issued under a rights issue, with gross proceeds of approximately **HK$43.2 million** and net proceeds of approximately **HK$41.7 million**[41](index=41&type=chunk)[42](index=42&type=chunk) [18. Related Party Transactions](index=18&type=section&id=18.%20Related%20Party%20Transactions) As of June 30, 2025, a HK$540,000 loan from former director Mr. Wang Rong was included in other payables and accrued expenses, and directors' and key management personnel's remuneration decreased year-on-year Related Party Transactions (HK$ '000) | Item | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :--- | :--- | :--- | | Loan from a director of the Company | – | 540 | - A loan of **HK$540,000** from former director Mr. Wang Rong was included in "Other payables and accrued expenses" as of June 30, 2025[43](index=43&type=chunk) Directors' and Key Management Personnel's Remuneration (HK$ '000) | Item | 2025 (Unaudited) | 2024 (Unaudited) | | :--- | :--- | :--- | | Short-term benefits | 1,975 | 2,932 | | Post-employment benefits | 30 | 36 | | **Total** | **2,005** | **2,968** | [Management Discussion and Analysis](index=19&type=section&id=Management%20Discussion%20and%20Analysis) This section provides an overview of the company's financial performance and business operations, including a detailed financial review and future outlook [Financial Review](index=19&type=section&id=Financial%20Review) During the reporting period, the company's revenue and gross profit significantly decreased due to the disposal of a subsidiary and expiration of cleaning service contracts; despite a substantial increase in other income from former subsidiary support management fees, reduced gains from equipment disposal and overall business contraction led to a shift from profit to loss - Revenue decreased by **69.5%** year-on-year to **HK$140.6 million**, primarily due to the disposal of a subsidiary and expiration of cleaning service contracts[46](index=46&type=chunk) - Gross profit decreased by **80.7%** year-on-year to **HK$4.5 million**, with gross margin falling from **5.1%** to **3.2%**[46](index=46&type=chunk) - Other income increased by **381.3%** year-on-year to **HK$8.8 million**, mainly from support management fees from a former subsidiary[46](index=46&type=chunk) - Administrative expenses decreased by **17.4%** year-on-year to **HK$16.1 million**, primarily due to reduced salaries[47](index=47&type=chunk) - Finance costs decreased by **74.4%** year-on-year to **HK$0.9 million**, mainly due to reduced borrowings[47](index=47&type=chunk) - The company shifted from a net profit of **HK$6.9 million** in the prior period to a loss of **HK$2.8 million** during the reporting period[47](index=47&type=chunk) [Business Review and Outlook](index=20&type=section&id=Business%20Review%20and%20Outlook) As a one-stop environmental services provider in Hong Kong, the company faces intense competition and high operating costs, and plans to enhance value through quality management, competitive pricing, and customer service, while actively exploring new opportunities in the online game industry, which has already contributed significant revenue and profit - The company primarily provides four types of environmental hygiene services: cleaning, pest management, waste management and recycling, and horticultural services[48](index=48&type=chunk) - The environmental hygiene services industry faces challenges such as intense competition, labor shortages, and high operating costs (insurance, labor, vehicles, legal fees)[48](index=48&type=chunk) - The Group has expanded its business into the online game industry for the first time, entering into multiple licensing agreements, which contributed revenue of **HK$43.8 million** and profit of **HK$3.4 million** during the reporting period[49](index=49&type=chunk) - Future strategic focus is to create value through quality management, competitive pricing, and customer service, while prudently exploring new business opportunities to broaden the business scope[48](index=48&type=chunk) [Other Information](index=21&type=section&id=Other%20Information) This section provides additional information on the company's liquidity, capital structure, asset pledges, exchange rate risk, contingent liabilities, significant transactions, capital commitments, employee and remuneration policies, and corporate governance [Liquidity, Financial and Capital Resources](index=21&type=section&id=Liquidity%2C%20Financial%20and%20Capital%20Resources) As of June 30, 2025, the Group's cash and cash equivalents decreased, bank borrowings significantly declined, the current ratio increased to 4.5 times, and it is in a net cash position, with working capital primarily sourced from operating cash flow, existing cash, and equity fundraising Liquidity Position (HK$ '000) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | 44,725 | 58,994 | | Total bank borrowings | 23 | 8,701 | | Bank and cash balances and pledged bank balances | 62,425 | 76,694 | | Net current assets | 125,639 | 117,232 | | Current ratio | 4.5 times | 3.7 times | - The Group is in a **net cash position**[50](index=50&type=chunk) - Working capital is primarily provided by operating cash flows from business operations, existing cash and bank balances, bank and other borrowings, lease liabilities, and proceeds from equity fundraising activities[51](index=51&type=chunk) [Capital Structure](index=22&type=section&id=Capital%20Structure) As of June 30, 2025, both the company's issued share capital and equity attributable to owners increased Capital Structure (HK$ '000) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Share capital attributable to owners of the Company | 23,040 | 19,200 | | Equity attributable to owners of the Company | 148,624 | 146,376 | [Pledge of Assets](index=22&type=section&id=Pledge%20of%20Assets) As of June 30, 2025, the Group has pledged trade receivables, bank deposits, and motor vehicles as collateral for borrowings - The Group has pledged trade receivables, bank deposits, and motor vehicles as collateral for borrowings[53](index=53&type=chunk) [Exchange Rate Risk](index=22&type=section&id=Exchange%20Rate%20Risk) The Group's transactions are primarily denominated in Hong Kong Dollars, Renminbi, and US Dollars, thus it does not face significant foreign exchange risk - The Group's transactions are mostly denominated in Hong Kong Dollars, Renminbi, and US Dollars, and thus it does not face significant foreign exchange risk[54](index=54&type=chunk) [Contingent Liabilities](index=22&type=section&id=Contingent%20Liabilities) As of June 30, 2025, banks and insurance companies issued performance bonds for the Group's customers totaling approximately HK$40.578 million and HK$8.471 million respectively, which the directors believe will not result in any material claims Performance Bonds (HK$ '000) | Source | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Banks | 40,578.5 | 39,412 | | Insurance companies | 8,471 | 7,922 | - The directors believe that no material claims will be made against the Group[55](index=55&type=chunk) [Significant Investments Held, Material Acquisitions or Disposals of Subsidiaries and Affiliated Companies](index=23&type=section&id=Significant%20Investments%20Held%2C%20Material%20Acquisitions%20or%20Disposals%20of%20Subsidiaries%20and%20Affiliated%20Companies) During the reporting period, there were no other significant investments, acquisitions, or disposals, except for Success Beauty Services Limited ceasing to be a subsidiary due to the exercise of exchangeable bonds - On June 25, 2024, Success Beauty Services Limited ceased to be a subsidiary of the Company due to the exercise of exchangeable bonds by bondholders[57](index=57&type=chunk) [Disclosable Transactions](index=24&type=section&id=Disclosable%20Transactions) During the reporting period, the company engaged in two disclosable transactions: the disposal of 163 specialized cleaning vehicles and multiple online game licensing agreements, with the latter marking the company's expansion into the online game industry [Disposal of Vehicles](index=24&type=section&id=Disposal%20of%20Vehicles) The company disposed of 163 specialized cleaning vehicles for a consideration of HK$19 million, constituting a disclosable transaction under the GEM Listing Rules - Disposal of **163** specialized cleaning vehicles for a consideration of **HK$19 million**[58](index=58&type=chunk) - This transaction constitutes a disclosable transaction under the GEM Listing Rules[58](index=58&type=chunk) [Exclusive Online Game Licensing Agreements](index=24&type=section&id=Exclusive%20Online%20Game%20Licensing%20Agreements) The company expanded its business into the online game industry through multiple exclusive online game licensing agreements, which, when aggregated, constitute a disclosable transaction under the GEM Listing Rules - The company entered into multiple exclusive online game licensing agreements with licensors for a term of **five years**[59](index=59&type=chunk) - The licensing agreements, when aggregated, constitute a disclosable transaction under the GEM Listing Rules, but are exempt from circular and shareholders' approval requirements[59](index=59&type=chunk)[60](index=60&type=chunk) [Capital Commitments](index=25&type=section&id=Capital%20Commitments) As of June 30, 2025, the Group had no significant capital commitments for the acquisition of property, plant and equipment - As of June 30, 2025, the Group had no significant capital commitments[61](index=61&type=chunk) [Employees and Remuneration Policy](index=25&type=section&id=Employees%20and%20Remuneration%20Policy) As of June 30, 2025, the Group had approximately 657 employees, with remuneration policies referencing market terms and determined based on performance, qualifications, and experience, offering discretionary bonuses and other benefits Number of Employees | Date | Number of Employees | | :--- | :--- | | June 30, 2025 | Approx. 657 | | December 31, 2024 | Approx. 645 | - Remuneration policy references market terms, determined based on performance, qualifications, and experience, offering discretionary bonuses, medical insurance, retirement benefits, and other allowances[62](index=62&type=chunk) [Use of Proceeds from Rights Issue](index=26&type=section&id=Use%20of%20Proceeds%20from%20Rights%20Issue) The 2024 rights issue generated net proceeds of approximately HK$41.7 million, primarily used for performance bonds, vehicle purchases, and bank loan repayment; as of June 30, 2025, most funds were utilized as planned, with the remainder expected to be used by December 31, 2025 - The 2024 rights issue generated net proceeds of approximately **HK$41.7 million**[63](index=63&type=chunk) Use of Proceeds from Rights Issue (HK$ million) | Purpose | Original Net Proceeds | Unutilized as of December 31, 2024 | Utilized during the period ended June 30, 2025 | Unutilized as of June 30, 2025 | Expected Utilisation Time | | :--- | :--- | :--- | :--- | :--- | :--- | | Funds reserved for providing performance bonds | 26.0 | 11.6 | 0.7 | 10.9 | December 31, 2025 | | Purchase of additional vehicles | 6.6 | 7.0 | – | 6.6 | December 31, 2025 | | Repayment of the Group's bank loans and payables | 4.8 | – | – | – | – | | General working capital for business operations and general administrative and operating expenses | 3.9 | – | – | – | – | | **Total** | **41.7** | **18.2** | **0.7** | **17.5** | | [Issue of Shares Under General Mandate](index=27&type=section&id=Issue%20of%20Shares%20Under%20General%20Mandate) The company completed the placement of 19,200,000 shares on May 19, 2025, generating net proceeds of approximately HK$5.08 million, which have been fully utilized for business operations and general working capital - The placement of **19,200,000** shares was completed on May 19, 2025, at a placing price of **HK$0.27** per share[64](index=64&type=chunk) - Net proceeds of approximately **HK$5.08 million** have been fully utilized for business operations and general working capital[64](index=64&type=chunk)[65](index=65&type=chunk) [Competing Business](index=27&type=section&id=Competing%20Business) During the reporting period, no directors, controlling shareholders, or substantial shareholders and their close associates engaged in any business competing with the Group's operations - During the reporting period, no directors, controlling shareholders, or substantial shareholders and their close associates engaged in any business that directly or indirectly competes with the Group's business[66](index=66&type=chunk) [Purchase, Sale or Redemption of the Company’s Listed Securities](index=27&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company%E2%80%99s%20Listed%20Securities) During the reporting period, neither the company nor any of its subsidiaries purchased, redeemed, or sold any of the company's listed securities - During the reporting period, neither the company nor any of its subsidiaries purchased, redeemed, or sold any of the company's listed securities[67](index=67&type=chunk) [Directors’ and Chief Executive’s Interests in Shares](index=28&type=section&id=Directors%E2%80%99%20and%20Chief%20Executive%E2%80%99s%20Interests%20in%20Shares) As of June 30, 2025, no directors or chief executive had any disclosable interests or short positions in the shares, underlying shares, or debentures of the company or its associated corporations - As of June 30, 2025, no directors or chief executive had any disclosable interests or short positions in the shares, underlying shares, or debentures of the company or its associated corporations[68](index=68&type=chunk) [Substantial Shareholders’ Interests in Shares](index=28&type=section&id=Substantial%20Shareholders%E2%80%99%20Interests%20in%20Shares) As of June 30, 2025, Mr. Tam Wai Tong was the largest substantial shareholder with 20.76% stake, with other key shareholders including Yongxin Global Investment Limited, He Hangyu, and Ye Yongchun Substantial Shareholders' Shareholdings | Name of Shareholder | Nature of Interest | Approximate Shareholding | Number of Ordinary Shares (shares) | | :--- | :--- | :--- | :--- | | Mr. Tam Wai Tong | Beneficial interest | 20.76% | 23,920,000 | | Yongxin Global Investment Limited | Beneficial interest | 11.03% | 12,702,000 | | He Hangyu | Beneficial interest | 10.79% | 12,434,000 | | Ye Yongchun | Beneficial interest | 9.78% | 11,262,500 | - All disclosed interests are long positions in the company's shares and underlying shares[69](index=69&type=chunk) [Code of Conduct for Securities Transactions by Directors](index=29&type=section&id=Code%20of%20Conduct%20for%20Securities%20Transactions%20by%20Directors) The company has adopted a strict code of conduct for directors' securities transactions and confirmed no breaches from the listing date to the report date - The company has adopted a code of conduct for directors' securities transactions, with terms no less exacting than those in the GEM Listing Rules[70](index=70&type=chunk) - The company confirmed no breaches of the required standards of dealing and code of conduct for directors' securities transactions from the listing date up to the date of this report[70](index=70&type=chunk) [Corporate Governance Practices](index=29&type=section&id=Corporate%20Governance%20Practices) The Group's corporate governance practices are based on the Corporate Governance Code in Appendix C1 of the GEM Listing Rules, and the company has complied with all applicable code provisions during the reporting period - The Group's corporate governance practices are based on the principles and code provisions of the Corporate Governance Code set out in Appendix C1 to the GEM Listing Rules[71](index=71&type=chunk) - During the reporting period and up to the date of this report, the company has complied with all applicable code provisions of the Code, save as disclosed otherwise in this report[71](index=71&type=chunk) [Changes in Information of Directors and Supervisors](index=29&type=section&id=Changes%20in%20Information%20of%20Directors%20and%20Supervisors) During the reporting period, the company's board of directors underwent several changes, including Mr. Wang Rong's resignation as executive director and Mr. Chow Yun Cheung's re-designation from independent non-executive director to executive director, leading to a shortfall in the number of independent non-executive directors and non-compliance with GEM Listing Rules - Mr. Wang Rong resigned as an executive director on June 9, 2025, and was appointed as Vice President of Cai Bai Limited, a subsidiary of the Company[72](index=72&type=chunk) - Mr. Chow Yun Cheung was re-designated from an independent non-executive director to an executive director on June 9, 2025, and resigned as chairman of the Audit Committee, Remuneration Committee, and member of the Nomination Committee[72](index=72&type=chunk) - Mr. Leung Ka Wai, an independent non-executive director, was appointed as chairman of the Company's Remuneration Committee and Nomination Committee[73](index=73&type=chunk) - Mr. Pang Wai Ho resigned as company secretary, and Mr. Chow Yun Cheung was appointed as company secretary[73](index=73&type=chunk) - The company failed to comply with GEM Listing Rule 5.05 regarding the number of independent non-executive directors (at least three) and their composition (at least one with appropriate professional qualifications)[73](index=73&type=chunk) - The company also failed to comply with GEM Listing Rule 5.28 regarding the minimum number and composition of members of the Company's Audit Committee[73](index=73&type=chunk) [Audit Committee](index=31&type=section&id=Audit%20Committee) The Audit Committee, comprising two independent non-executive directors, is responsible for reviewing financial reports and internal controls, and has reviewed the draft interim report and unaudited condensed consolidated financial statements - The Audit Committee comprises two independent non-executive directors, namely Mr. Mak Kwok Kei and Mr. Leung Ka Wai[74](index=74&type=chunk) - The Audit Committee's responsibilities include reviewing annual reports and accounts, draft interim reports, and providing advice and recommendations to the Board[74](index=74&type=chunk) - The Audit Committee has reviewed the draft interim report and the unaudited condensed consolidated financial statements for the reporting period before recommending them to the Board for approval[74](index=74&type=chunk) [Remuneration Committee](index=31&type=section&id=Remuneration%20Committee) The Remuneration Committee, composed of one executive director and two independent non-executive directors with Mr. Leung Ka Wai as chairman, primarily advises the Board on remuneration policies and structures for directors and senior management - The Remuneration Committee comprises one executive director and two independent non-executive directors, namely Mr. Tam Yiu Shing, Mr. Mak Kwok Kei, and Mr. Leung Ka Wai[75](index=75&type=chunk) - Mr. Leung Ka Wai currently serves as the chairman of the Remuneration Committee[75](index=75&type=chunk) - The Remuneration Committee is primarily responsible for making recommendations to the Board on the company's remuneration policies and structures for all directors and senior management, and for establishing formal and transparent procedures for developing remuneration policies[75](index=75&type=chunk) [Nomination Committee](index=32&type=section&id=Nomination%20Committee) The Nomination Committee, consisting of one executive director and two independent non-executive directors with Ms. Liu Jingjing as chairman, primarily advises the Board on director appointments and succession planning - The Nomination Committee comprises one executive director and two independent non-executive directors, namely Ms. Liu Jingjing, Mr. Mak Kwok Kei, and Mr. Leung Ka Wai[76](index=76&type=chunk) - Mr. Leung Ka Wai currently serves as the chairman of the Nomination Committee[76](index=76&type=chunk) - The Nomination Committee is primarily responsible for making recommendations to the Board on the appointment of directors and succession planning for directors[76](index=76&type=chunk) [Events After the Reporting Period](index=32&type=section&id=Events%20After%20the%20Reporting%20Period) No other significant events occurred after the reporting period and up to the date of this report, except as already disclosed herein - Save as disclosed otherwise in this report, no other significant events occurred after the reporting period and up to the date of this report[77](index=77&type=chunk) [Board of Directors / Disclaimer](index=32&type=section&id=Board%20of%20Directors%20%2F%20Disclaimer) This report, authorized by the Board, includes a list of Board members and publication channels, and states that the English version shall prevail in case of any discrepancy between the English and Chinese texts - The Board comprises three executive directors (Mr. Tam Yiu Shing, Mr. Chow Yun Cheung, and Ms. Liu Jingjing) and two independent non-executive directors (Mr. Mak Kwok Kei and Mr. Leung Ka Wai)[78](index=78&type=chunk) - This report will be published on the website of The Stock Exchange of Hong Kong Limited and the company's website for at least seven consecutive days from the date of publication[78](index=78&type=chunk) - In case of any discrepancy between the English and Chinese versions of this report, the English version shall prevail[79](index=79&type=chunk)

[Company Overview and Financial Highlights](index=1&type=section&id=%E5%85%AC%E5%8F%B8%E6%A6%82%E8%A7%88%E4%B8%8E%E8%B4%A2%E5%8A%A1%E4%BA%AE%E7%82%B9) [Company Information and Report Scope](index=1&type=section&id=%E5%85%AC%E5%8F%B8%E4%BF%A1%E6%81%AF%E4%B8%8E%E6%8A%A5%E5%91%8A%E8%8C%83%E5%9B%B4) HealthyWay Inc. announced its unaudited interim results for the six months ended June 30, 2025 - Company Name: **HealthyWay Inc.** `[2](index=2&type=chunk)` - Reporting Period: Six months ended **June 30, 2025** `[2](index=2&type=chunk)[3](index=3&type=chunk)` - Report Nature: Unaudited consolidated financial results announcement `[3](index=3&type=chunk)` [Financial Highlights at a Glance](index=1&type=section&id=%E8%B4%A2%E5%8A%A1%E4%BA%AE%E7%82%B9%E9%80%9F%E8%A7%88) The company's revenue decreased year-on-year, but gross profit margin improved, successfully turning losses into profits with significantly improved profit for the period Financial Highlights Comparison (Six Months Ended June 30) | Metric | 2025 (RMB '000) | 2024 (RMB '000) | Change | Change Rate | Remarks | | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | 517,852 | 611,485 | (93,633) | -15.3% | Revenue decreased | | Gross Profit | 161,734 | 183,661 | (21,927) | -11.9% | Gross profit decreased | | Gross Profit Margin | 31.2% | 30.0% | +1.2% | - | Gross profit margin improved | | Profit/(Loss) for the Period | 7,040 | (57,275) | +64,315 | Turned losses into profits | Significant improvement | [Consolidated Financial Statements](index=2&type=section&id=%E7%BB%BC%E5%90%88%E8%B4%A2%E5%8A%A1%E6%8A%A5%E8%A1%A8) [Consolidated Statement of Profit or Loss](index=2&type=section&id=%E7%BB%BC%E5%90%88%E6%8D%9F%E7%9B%8A%E8%A1%A8) For the six months ended June 30, 2025, the company achieved a net profit of RMB 7,040 thousand, a significant turnaround from a net loss of RMB 57,275 thousand in the prior year, driven by increased operating profit and the elimination of changes in the carrying amount of redeemable liabilities Key Data from Consolidated Statement of Profit or Loss (Six Months Ended June 30) | Metric | 2025 (RMB '000) | 2024 (RMB '000) | Change | Change Rate | | :--- | :--- | :--- | :--- | :--- | | Revenue | 517,852 | 611,485 | (93,633) | -15.3% | | Cost of Sales | (356,118) | (427,824) | 71,706 | -16.8% | | Gross Profit | 161,734 | 183,661 | (21,927) | -11.9% | | Operating Profit | 12,004 | 2,475 | 9,529 | +385.8% | | Profit/(Loss) Before Tax | 10,498 | (63,150) | 73,648 | Turned losses into profits | | Profit/(Loss) for the Period | 7,040 | (57,275) | 64,315 | Turned losses into profits | - Change in carrying amount of redeemable liabilities: **RMB 0 thousand in 2025** compared to **RMB (62,989) thousand in 2024**, significantly contributing to the current period's profit improvement `[4](index=4&type=chunk)` [Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=3&type=section&id=%E7%BB%BC%E5%90%88%E6%8D%9F%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) The company's total comprehensive income for the period turned from a loss of RMB 56,805 thousand in the prior year to a profit of RMB 8,378 thousand, mainly due to improved profit for the period and positive exchange differences from translating financial statements of overseas entities Key Data from Consolidated Statement of Profit or Loss and Other Comprehensive Income (Six Months Ended June 30) | Metric | 2025 (RMB '000) | 2024 (RMB '000) | | :--- | :--- | :--- | | Profit/(Loss) for the Period | 7,040 | (57,275) | | Exchange differences on translation of financial statements of overseas entities | 1,338 | 470 | | Total Comprehensive Income for the Period | 8,378 | (56,805) | - Total comprehensive income attributable to equity holders of the Company was **RMB 8,404 thousand**, compared to a loss of **RMB 55,348 thousand** in the prior period `[6](index=6&type=chunk)` [Consolidated Statement of Financial Position](index=4&type=section&id=%E7%BB%BC%E5%90%88%E8%B4%A2%E5%8A%A1%E7%8A%B6%E5%86%B5%E8%A1%A8) As of June 30, 2025, the company's total assets slightly decreased, but net assets increased, primarily due to an increase in intangible assets and a reduction in liabilities Key Data from Consolidated Statement of Financial Position | Metric | 2025年6月30日 (RMB '000) | 2024年12月31日 (RMB '000) | Change | Change Rate | | :--- | :--- | :--- | :--- | :--- | | Non-current Assets | 130,145 | 113,845 | 16,300 | +14.3% | | Current Assets | 414,076 | 454,781 | (40,705) | -9.0% | | Current Liabilities | 310,568 | 340,409 | (29,841) | -8.8% | | Net Current Assets | 103,508 | 114,372 | (10,864) | -9.5% | | Non-current Liabilities | 3,487 | 4,629 | (1,142) | -24.7% | | Net Assets | 240,166 | 231,788 | 8,378 | +3.6% | | Total Equity | 240,166 | 231,788 | 8,378 | +3.6% | - Intangible assets significantly increased from **RMB 81,272 thousand** as of December 31, 2024, to **RMB 99,020 thousand** as of June 30, 2025, mainly due to the recognition of R&D outcomes as intangible assets during the reporting period `[9](index=9&type=chunk)[55](index=55&type=chunk)` [Notes to the Financial Information](index=6&type=section&id=%E8%B4%A2%E5%8A%A1%E8%B5%84%E6%96%99%E9%99%84%E6%B3%A8) [Basis of Preparation](index=6&type=section&id=%E7%BC%96%E8%A3%BD%E5%9F%BA%E7%A4%8E) The interim financial report is prepared in accordance with the HKEX Listing Rules and IAS 34, adopting the same accounting policies as the 2024 annual financial statements, and was authorized for issue on August 29, 2025 - Basis of Preparation: **HKEX Listing Rules** and **International Accounting Standard 34** `[12](index=12&type=chunk)` - Accounting Policies: Same as those adopted in the **2024 annual financial statements**, except for changes expected to be reflected in the 2025 annual financial statements `[12](index=12&type=chunk)` - Authorization Date for Issue: **August 29, 2025** `[12](index=12&type=chunk)` [Changes in Accounting Policies](index=6&type=section&id=%E4%BC%9A%E8%AE%A1%E6%94%BF%E7%AD%96%E7%9A%84%E5%8F%98%E5%8A%A8) The Group has applied the amendments to IAS 21 "The Effects of Changes in Foreign Exchange Rates – Lack of Exchangeability," but these amendments had no significant impact on this interim report as no foreign currency non-exchangeable transactions were involved, and no other new standards not yet effective have been applied - Amendments to **IAS 21 "The Effects of Changes in Foreign Exchange Rates – Lack of Exchangeability"** have been applied `[14](index=14&type=chunk)` - These amendments had **no significant impact** on this interim report as the Group had no foreign currency non-exchangeable transactions `[14](index=14&type=chunk)` - No new standards or interpretations not yet effective have been applied in the current accounting period `[15](index=15&type=chunk)` [Revenue and Segment Reporting](index=6&type=section&id=%E6%94%B6%E5%85%A5%E5%8F%8A%E5%88%86%E9%83%A8%E6%8A%A5%E5%91%8A) The Group primarily generates revenue through enterprise services and digital marketing, healthcare services, and other business lines, managing and assessing performance by these segments, with the vast majority of operations concentrated in mainland China - Main Businesses: Provision of **enterprise services and digital marketing services**, and **healthcare services** `[16](index=16&type=chunk)` - Segment Management: Divided into three independent segments by service line: **enterprise services and digital marketing services**, **healthcare services**, and **other** `[19](index=19&type=chunk)[20](index=20&type=chunk)` - Geographic Concentration: The vast majority of assets, liabilities, revenue, and gross profit are attributable to **mainland China operations** `[19](index=19&type=chunk)[21](index=21&type=chunk)` [Revenue Details](index=7&type=section&id=%E6%94%B6%E5%85%A5%E6%98%8E%E7%BB%86) For the six months ended June 30, 2025, total revenue was RMB 517,852 thousand, with enterprise services and digital marketing contributing the most, but overall revenue decreased year-on-year Revenue from Contracts with Customers by Major Service Line | Service Line | 2025 (RMB '000) | 2024 (RMB '000) | Change | Change Rate | | :--- | :--- | :--- | :--- | :--- | | Enterprise Services and Digital Marketing Services | 413,059 | 488,539 | (75,480) | -15.45% | | Healthcare Services | 104,638 | 122,829 | (18,191) | -14.81% | | Other | 155 | 117 | 38 | +32.48% | | **Total** | **517,852** | **611,485** | **(93,633)** | **-15.31%** | - Revenue Recognition Timing: Most revenue is recognized **at a point in time** (2025: **RMB 462,536 thousand**), with a smaller proportion recognized **over time** (2025: **RMB 55,316 thousand**) `[18](index=18&type=chunk)` [Segment Reporting Analysis](index=7&type=section&id=%E5%88%86%E9%83%A8%E6%8A%A5%E5%91%8A%E5%88%86%E6%9E%90) Enterprise services and digital marketing remain the Group's primary contributors to revenue and gross profit, but both major segments experienced year-on-year declines in revenue and gross profit, consistent with the overall revenue trend Gross Profit by Reportable Segment (Six Months Ended June 30) | Segment | 2025 (RMB '000) | 2024 (RMB '000) | Change | Change Rate | | :--- | :--- | :--- | :--- | :--- | | Enterprise Services and Digital Marketing Services | 133,049 | 148,164 | (15,115) | -10.20% | | Healthcare Services | 28,559 | 35,401 | (6,842) | -19.33% | | Other | 126 | 96 | 30 | +31.25% | | **Total Reportable Segment Gross Profit** | **161,734** | **183,661** | **(21,927)** | **-11.94%** | - The Group's senior management monitors performance based on each segment's revenue and gross profit to assess segment performance and allocate resources `[19](index=19&type=chunk)` [Income Tax](index=9&type=section&id=%E6%89%80%E5%BE%97%E7%A8%8E) During the reporting period, the company's income tax expense was RMB 3,458 thousand, compared to an income tax credit of RMB 5,875 thousand in the prior year, mainly due to the turnaround to pre-tax profit and the reversal of deferred tax assets; some subsidiaries enjoy R&D cost super deduction and small-profit enterprise tax rate benefits Income Tax Components (Six Months Ended June 30) | Metric | 2025 (RMB '000) | 2024 (RMB '000) | | :--- | :--- | :--- | | Current Tax - Provision for the period | 5,955 | 1,243 | | Deferred Tax - Origination and reversal of temporary differences | (2,497) | (7,118) | | **Total Income Tax** | **3,458** | **(5,875)** | - The statutory corporate income tax rate for mainland China subsidiaries is **25%** `[24](index=24&type=chunk)` - Fujian HealthyWay Information Technology Co., Ltd., as a high-tech enterprise, enjoys a lower income tax rate of **15%** (2023-2025) `[24](index=24&type=chunk)` - Eligible R&D costs can enjoy an additional **100% super deduction** `[23](index=23&type=chunk)` - Some subsidiaries, as "small-profit enterprises," enjoy a lower corporate income tax rate of **20%** `[23](index=23&type=chunk)` [Earnings/(Loss) Per Share](index=10&type=section&id=%E6%AF%8F%E8%82%A1%E7%9B%88%E5%88%A9%E2%88%95%EF%BC%88%E4%BA%8F%E6%8D%9F%EF%BC%89) For the six months ended June 30, 2025, the company achieved basic and diluted earnings per share of RMB 0.01, a significant improvement from a loss per share of RMB 0.08 in the prior year Earnings/(Loss) Per Share (Six Months Ended June 30) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Basic Earnings/(Loss) Per Share (RMB) | 0.01 | (0.08) | | Diluted Earnings/(Loss) Per Share (RMB) | 0.01 | (0.08) | - Basic earnings per share is calculated based on profit attributable to ordinary equity holders of the Company of **RMB 7,066 thousand** (2024: loss of **RMB 55,818 thousand**) and weighted average ordinary shares outstanding of **877,705 thousand** (2024: **714,598 thousand**) `[25](index=25&type=chunk)` - There were no potential dilutive ordinary shares in the current period, so diluted earnings per share is the same as basic earnings per share `[26](index=26&type=chunk)` [Trade and Other Receivables](index=10&type=section&id=%E8%B4%B8%E6%98%93%E5%8F%8A%E5%85%B6%E4%BB%96%E5%BA%94%E6%94%B6%E6%AC%BE%E9%A1%B9) As of June 30, 2025, total trade and other receivables increased to RMB 158,102 thousand, primarily due to extended payment terms for some customers Ageing Analysis of Trade and Other Receivables | Ageing | 2025年6月30日 (RMB '000) | 2024年12月31日 (RMB '000) | | :--- | :--- | :--- | | Within 1 month | 85,642 | 105,781 | | More than 1 month but within 1 year | 38,691 | 11,482 | | More than 1 year but within 2 years | 804 | 2,261 | | More than 2 years but within 3 years | 420 | 247 | | **Subtotal Trade Receivables** | **125,557** | **119,771** | | Amounts due from related parties | 1,052 | 1,000 | | Deposits | 3,457 | 3,997 | | Other receivables | 28,036 | 19,440 | | **Total** | **158,102** | **144,208** | - Trade receivables overdue by more than 1 month but within 1 year significantly increased, reflecting extended payment terms `[27](index=27&type=chunk)[49](index=49&type=chunk)` [Trade and Other Payables](index=11&type=section&id=%E8%B4%B8%E6%98%93%E5%8F%8A%E5%85%B6%E4%BB%96%E5%BA%94%E4%BB%98%E6%AC%BE%E9%A1%B9) As of June 30, 2025, total trade and other payables decreased to RMB 177,508 thousand, largely consistent with the downward trend in cost of sales Ageing Analysis of Trade and Other Payables | Ageing | 2025年6月30日 (RMB '000) | 2024年12月31日 (RMB '000) | | :--- | :--- | :--- | | Within 1 year | 112,920 | 121,545 | | More than 1 year but within 2 years | 315 | 109 | | More than 2 years but within 3 years | 64 | 103 | | More than 3 years | 159 | 144 | | **Subtotal Trade Payables** | **113,458** | **121,901** | | Amounts due to shareholders | 4,659 | 4,714 | | Accrued salaries and bonuses | 20,045 | 25,006 | | Advances from customers | 13,424 | 15,751 | | Other payables | 25,922 | 41,190 | | **Total** | **177,508** | **208,562** | - Amounts due to shareholders as of June 30, 2025, have been fully settled as of the announcement date `[51](index=51&type=chunk)` [Capital, Reserves and Dividends](index=11&type=section&id=%E8%B5%84%E6%9C%AC%E3%80%81%E5%82%A8%E5%A4%87%E5%8F%8A%E8%82%A1%E6%81%AF) As of June 30, 2025, the company's share capital remained stable, reserves increased, and the Board of Directors did not recommend an interim dividend Capital and Reserves (As of June 30) | Metric | 2025 (RMB '000) | 2024 (RMB '000) | | :--- | :--- | :--- | | Share Capital | 96 | 96 | | Reserves | 235,073 | 226,669 | | Total equity attributable to equity holders of the Company | 235,169 | 226,765 | | Non-controlling interests | 4,997 | 5,023 | | **Total Equity** | **240,166** | **231,788** | - The Board of Directors does not recommend an interim dividend for the six months ended **June 30, 2025** (2024: nil) `[29](index=29&type=chunk)[67](index=67&type=chunk)` [Management Discussion and Analysis](index=12&type=section&id=%E7%AE%A1%E7%90%86%E5%B1%82%E8%AE%A8%E8%AE%BA%E5%8F%8A%E5%88%86%E6%9E%90) [Business Review](index=12&type=section&id=%E4%B8%9A%E5%8A%A1%E5%9B%9E%E9%A1%B5) The company, as a digital healthcare service platform, maintained market share and expanded its customer base during the reporting period, but some businesses, such as digital marketing and medical support services, faced challenges - The company has been providing **healthcare services to individual users since 2001**, expanding to enterprise and institutional services in 2015 `[30](index=30&type=chunk)` - The number of registered individual users, registered doctors, and connected hospitals on the platform continues to grow `[30](index=30&type=chunk)` [Overview and Platform User Growth](index=12&type=section&id=%E6%A6%82%E8%A7%88%E4%B8%8E%E5%B9%B3%E5%8F%B0%E7%94%A8%E6%88%B7%E5%A2%9E%E9%95%BF) As of June 30, 2025, the company's platform had 211.8 million registered individual users, 905 thousand registered doctors, and 12,161 connected hospitals, all showing steady growth Platform User Growth | Metric | 2025年6月30日 | 2024年12月31日 | Increase | Growth Rate | | :--- | :--- | :--- | :--- | :--- | | Registered Individual Users | 211.8 million | 205.5 million | 6.3 million | +3.07% | | Registered Doctors | 905 thousand | 889 thousand | 16 thousand | +1.80% | | Connected Hospitals | 12,161 | 11,762 | 399 | +3.39% | [Enterprise Services and Digital Marketing Services Performance](index=12&type=section&id=%E4%BC%81%E4%B8%9A%E6%9C%8D%E5%8A%A1%E5%8F%8A%E6%95%B0%E5%AD%97%E8%90%A5%E9%94%80%E6%9C%8D%E5%8A%A1%E8%A1%A8%E7%8E%B0) Page views for popular science content services decreased, but the number of enterprise customers for precise content services and RWS support services increased, while digital marketing services saw a reduction in paying enterprise customers due to economic downturn - Page views for popular science content services decreased from **400 million** in H1 2024 to **250 million** in H1 2025 `[31](index=31&type=chunk)` - Precise content service customers: Increased from **9 pharmaceutical companies** in H1 2024 to **16 pharmaceutical companies and 6 other entities** in H1 2025 `[31](index=31&type=chunk)` - RWS support service customers: Increased from **30 pharmaceutical companies and 9 other entities** in H1 2024 to **48 pharmaceutical companies and 6 other entities** in H1 2025 `[31](index=31&type=chunk)` - Real-world study reports delivered decreased from **312** in H1 2024 to **212** in H1 2025 `[31](index=31&type=chunk)` - Number of paying enterprise and institutional customers decreased from **570** as of December 31, 2024, to **353** as of June 30, 2025, mainly due to the economic downturn `[31](index=31&type=chunk)` [Healthcare Services Performance](index=12&type=section&id=%E5%81%A5%E5%BA%B7%E5%8C%BB%E7%96%97%E6%9C%8D%E5%8A%A1%E8%A1%A8%E7%8E%B0) Both individual and enterprise customers for health membership programs decreased, and online medical consultations also declined, indicating challenges in this business segment - Individual customers for health membership programs decreased from **6.5 million** in H1 2024 to **5.9 million** in H1 2025 `[32](index=32&type=chunk)` - Enterprise customers for health membership programs decreased from **164** in H1 2024 to **133** in H1 2025 `[32](index=32&type=chunk)` - Online medical consultations decreased from **1.8 million** in H1 2024 to **1.4 million** in H1 2025 `[32](index=32&type=chunk)` [Financial Review](index=13&type=section&id=%E8%B4%A2%E5%8A%A1%E5%9B%9E%E9%A1%B5) During the reporting period, the company's total revenue decreased by 15.3% year-on-year, but through cost control and expense optimization, it successfully turned losses into profits, achieving a net profit of RMB 7.0 million - Total revenue decreased by **15.3%** to **RMB 517.9 million** `[35](index=35&type=chunk)` - Net profit turned from a loss of **RMB 57.3 million** in the prior year to a profit of **RMB 7.0 million** in the current period `[46](index=46&type=chunk)` [Revenue Analysis](index=13&type=section&id=%E6%94%B6%E5%85%A5%E5%88%86%E6%9E%90) Total revenue decreased by 15.3% year-on-year to RMB 517.9 million, mainly due to reduced revenue from content services, value-based healthcare services (especially pharmaceutical sales and integrated healthcare service packages), and digital marketing services Revenue Breakdown by Service (Six Months Ended June 30) | Service Category | 2025 (RMB '000) | % Share | 2024 (RMB '000) | % Share | Change Rate | | :--- | :--- | :--- | :--- | :--- | :--- | | **Healthcare Services** | **104,638** | **20.2** | **122,829** | **20.1** | **-14.8%** | | Medical Support Services - Health Membership Programs | 70,236 | 13.6 | 54,256 | 8.9 | +29.5% | | Medical Support Services - Other | 4,845 | 0.9 | 2,949 | 0.5 | +64.3% | | Value-based Healthcare Services - Integrated Healthcare Service Packages | 119 | 0.0 | 12,262 | 2.0 | -99.0% | | Value-based Healthcare Services - Pharmaceutical Sales Business | 29,438 | 5.7 | 53,362 | 8.7 | -44.9% | | **Enterprise Services and Digital Marketing Services** | **413,059** | **79.8** | **488,539** | **79.9** | **-15.5%** | | Enterprise Services - Content Services | 250,665 | 48.4 | 308,600 | 50.5 | -18.7% | | Enterprise Services - Information Technology Services | 122,647 | 23.7 | 129,319 | 21.1 | -5.2% | | Digital Marketing Services | 39,747 | 7.7 | 50,620 | 8.3 | -21.4% | | Other | 155 | 0.0 | 117 | 0.0 | +32.5% | | **Total** | **517,852** | **100.0** | **611,485** | **100.0** | **-15.3%** | - Content service revenue declined primarily due to some customers shifting to direct marketing, reducing reliance on RWS support services, and increased competition in the generic drug industry leading to customer budget cuts for RWS services `[35](index=35&type=chunk)` - Value-based healthcare service revenue decreased mainly due to the expiration of pharmaceutical wholesale business sales agency agreements and the company's proactive adjustment of service structure `[35](index=35&type=chunk)` - Digital marketing service revenue decreased primarily due to the economic downturn, leading customers to reduce advertising and marketing expenditures `[35](index=35&type=chunk)` [Cost of Sales](index=14&type=section&id=%E9%94%80%E5%94%AE%E6%88%90%E6%9C%AC) Total cost of sales decreased by 16.8% year-on-year to RMB 356.1 million, consistent with the revenue decline, mainly reflected in reduced cost of sales for enterprise services and digital marketing, and healthcare services Cost of Sales (Six Months Ended June 30) | Segment | 2025 (RMB '000) | 2024 (RMB '000) | Change Rate | | :--- | :--- | :--- | :--- | | Enterprise Services and Digital Marketing Services | (280,010) | (340,375) | -17.7% | | Healthcare Services | (76,079) | (87,428) | -13.0% | | Other | (29) | (21) | +38.1% | | **Total Cost of Sales** | **(356,118)** | **(427,824)** | **-16.8%** | [Gross Profit and Gross Profit Margin](index=14&type=section&id=%E6%AF%9B%E5%88%A9%E5%8F%8A%E6%AF%9B%E5%88%A9%E7%8E%87) Gross profit decreased year-on-year to RMB 161.7 million, but gross profit margin improved to 31.2%, influenced by business mix, pricing policies, and optimized cost structure Gross Profit and Gross Profit Margin (Six Months Ended June 30) | Metric | 2025 (RMB '000) | 2024 (RMB '000) | Change Rate | | :--- | :--- | :--- | :--- | | Gross Profit | 161,734 | 183,661 | -11.9% | | Gross Profit Margin | 31.2% | 30.0% | +1.2% | | Healthcare Services Gross Profit | 28,559 | 35,401 | -19.3% | | Enterprise and Digital Marketing Services Gross Profit | 133,049 | 148,164 | -10.2% | - The improvement in gross profit margin was mainly influenced by **business mix, pricing policies, and cost structure** `[37](index=37&type=chunk)` [Net Other Income](index=15&type=section&id=%E5%85%B6%E4%BB%96%E6%94%B6%E5%85%A5%E5%87%80%E9%A2%9D) Net other income increased from RMB 0.5 million in the prior year to RMB 1.2 million in the current period, primarily due to increased interest income and government subsidies, partially offset by exchange losses Net Other Income (Six Months Ended June 30) | Metric | 2025 (RMB '000) | 2024 (RMB '000) | Change Rate | | :--- | :--- | :--- | :--- | | Net Other Income | 1,161 | 455 | +155.2% | - The increase was primarily driven by **higher interest income and government subsidies** `[38](index=38&type=chunk)` [Selling Expenses](index=15&type=section&id=%E9%94%80%E5%94%AE%E5%BC%80%E6%94%AF) Selling expenses decreased by 11.6% year-on-year to RMB 87.2 million, mainly due to reduced marketing activities for integrated healthcare service packages and health membership programs Selling Expenses (Six Months Ended June 30) | Metric | 2025 (RMB '000) | 2024 (RMB '000) | Change Rate | | :--- | :--- | :--- | :--- | | Selling Expenses | (87,249) | (98,576) | -11.6% | - The decrease in expenses primarily resulted from **reduced promotional activities** for integrated healthcare service packages and health membership programs `[39](index=39&type=chunk)` [Administrative Expenses](index=15&type=section&id=%E8%A1%8C%E6%94%BF%E5%BC%80%E6%94%AF) Administrative expenses decreased by 9.6% year-on-year to RMB 26.3 million, mainly due to reduced office expenses and third-party service fees, partially offset by increased staff costs Administrative Expenses (Six Months Ended June 30) | Metric | 2025 (RMB '000) | 2024 (RMB '000) | Change Rate | | :--- | :--- | :--- | :--- | | Administrative Expenses | (26,256) | (29,097) | -9.6% | - The decrease in expenses was mainly attributable to **savings in office expenses and third-party service fees** `[40](index=40&type=chunk)` [Research and Development Costs](index=15&type=section&id=%E7%A0%94%E7%99%BC%E6%88%90%E6%9C%AC) R&D costs significantly decreased by 30.7% year-on-year to RMB 37.4 million, primarily due to the completion of several products, such as the AI disease prediction platform, in H2 2024, leading to lower technical service fees Research and Development Costs (Six Months Ended June 30) | Metric | 2025 (RMB '000) | 2024 (RMB '000) | Change Rate | | :--- | :--- | :--- | :--- | | Research and Development Costs | (37,386) | (53,968) | -30.7% | - The main reason was the **completion of products** such as the AI disease prediction platform, resulting in a corresponding decrease in technical service fees `[41](index=41&type=chunk)` [Finance Costs](index=15&type=section&id=%E8%9E%8D%E8%B3%87%E6%88%90%E6%9C%AC) Finance costs decreased by 39.1% year-on-year to RMB 1.4 million, primarily due to the company's repayment of some bank loans and borrowings in H1 2025 Finance Costs (Six Months Ended June 30) | Metric | 2025 (RMB '000) | 2024 (RMB '000) | Change Rate | | :--- | :--- | :--- | :--- | | Finance Costs | (1,358) | (2,321) | -39.1% | - The decrease in finance costs was mainly attributable to the **repayment of some bank loans and borrowings** `[42](index=42&type=chunk)` [Change in Carrying Amount of Redeemable Liabilities](index=16&type=section&id=%E8%B5%8E%E5%9B%9E%E8%B4%9F%E5%80%BA%E7%9A%84%E8%B4%A6%E9%9D%A2%E5%80%BC%E5%8F%98%E5%8A%A8) The company recorded no change in the carrying amount of redeemable liabilities in the current reporting period, compared to a loss of RMB 63.0 million in the prior year, mainly due to the termination of preferential rights upon the company's listing and reclassification to equity Change in Carrying Amount of Redeemable Liabilities (Six Months Ended June 30) | Metric | 2025 (RMB '000) | 2024 (RMB '000) | | :--- | :--- | :--- | | Change in carrying amount of redeemable liabilities | – | (62,989) | - This change terminated upon the company's listing, and the related liabilities were reclassified to equity `[43](index=43&type=chunk)` [Profit Before Tax](index=16&type=section&id=%E9%99%A4%E7%A8%8E%E5%89%8D%E5%88%A9%E6%BD%A4) The company turned from a pre-tax loss of RMB 63.2 million in the prior year to a pre-tax profit of RMB 10.5 million in the current period, achieving significant improvement Profit/(Loss) Before Tax (Six Months Ended June 30) | Metric | 2025 (RMB '000) | 2024 (RMB '000) | | :--- | :--- | :--- | | Profit/(Loss) Before Tax | 10,498 | (63,150) | [Income Tax](index=16&type=section&id=%E6%89%80%E5%BE%97%E7%A8%8E) Current period income tax expense was RMB 3.5 million, compared to an income tax credit of RMB 5.9 million in the prior year, mainly due to the turnaround to pre-tax profit and reversal of deferred income tax assets Income Tax (Six Months Ended June 30) | Metric | 2025 (RMB '000) | 2024 (RMB '000) | | :--- | :--- | :--- | | Income Tax | (3,458) | 5,875 | - The change in income tax was mainly affected by the **turnaround from pre-tax loss to profit** and the **reversal of certain deferred income tax assets** `[45](index=45&type=chunk)` [Net Profit](index=16&type=section&id=%E5%87%80%E5%88%A9%E6%BD%A4) The company turned from a net loss of RMB 57.3 million in the prior year to a net profit of RMB 7.0 million in the current period, achieving a turnaround Net Profit/(Loss) (Six Months Ended June 30) | Metric | 2025 (RMB '000) | 2024 (RMB '000) | | :--- | :--- | :--- | | Net Profit/(Loss) | 7,040 | (57,275) | [Discussion of Selected Items in the Consolidated Statement of Financial Position](index=16&type=section&id=%E7%BB%BC%E5%90%88%E8%B5%84%E7%94%A2%E8%B2%A0%E5%80%BAz%E8%A1%A8%E4%B8%AD%E9%81%B8%E5%AE%9A%E9%A0%85%E7%9B%AE%E7%9A%84%E8%A8%8E%E8%AB%96) As of June 30, 2025, the company's net current assets decreased, but overall net assets increased, primarily due to an increase in intangible assets and effective liability management - Net assets increased from **RMB 231.8 million** as of December 31, 2024, to **RMB 240.2 million** as of June 30, 2025 `[55](index=55&type=chunk)` [Overview of Current Assets and Liabilities](index=16&type=section&id=%E6%B5%81%E5%8B%95%E8%B3%87%E7%94%A2%E5%8F%8A%E8%B2%A0%E5%80%BAz%E6%A6%82%E8%A7%88) Net current assets decreased by 9.5% from RMB 114.4 million as of December 31, 2024, to RMB 103.5 million as of June 30, 2025, mainly due to decreases in cash and cash equivalents, prepayments, and other financial assets Net Current Assets (As of June 30) | Metric | 2025 (RMB '000) | 2024 (RMB '000) | Change Rate | | :--- | :--- | :--- | :--- | | Net Current Assets | 103,508 | 114,372 | -9.5% | - The decrease was mainly due to **decreases in cash and cash equivalents, prepayments, and other financial assets**, partially offset by a decrease in trade and other payables `[47](index=47&type=chunk)` [Inventories](index=17&type=section&id=%E5%AD%98%E8%B2%A8) Inventories increased from RMB 7.1 million as of December 31, 2024, to RMB 9.4 million as of June 30, 2025, primarily because some revenue from content services had not yet been recognized, and related contract fulfillment costs were capitalized as inventories Inventories (As of June 30) | Metric | 2025 (RMB '000) | 2024 (RMB '000) | Change Rate | | :--- | :--- | :--- | :--- | | Inventories | 9,390 | 7,096 | +32.3% | - Inventories primarily include **pharmaceuticals and health products** `[48](index=48&type=chunk)` [Trade and Other Receivables](index=17&type=section&id=%E8%B4%B8%E6%98%93%E5%8F%8A%E5%85%B6%E4%BB%96%E5%BA%94%E6%94%B6%E6%AC%BE%E9%A0%85) Trade and other receivables increased from RMB 144.2 million as of December 31, 2024, to RMB 158.1 million as of June 30, 2025, mainly due to extended payment terms for some customers Trade and Other Receivables (As of June 30) | Metric | 2025 (RMB '000) | 2024 (RMB '000) | Change Rate | | :--- | :--- | :--- | :--- | | Trade and Other Receivables | 158,102 | 144,208 | +9.6% | [Prepayments](index=17&type=section&id=%E9%A0%90%E4%BB%98%E6%AC%BE%E9%A0%85) Prepayments decreased from RMB 27.5 million as of December 31, 2024, to RMB 15.0 million as of June 30, 2025, mainly due to reduced prepayments to suppliers after strategic negotiations on payment terms Prepayments (As of June 30) | Metric | 2025 (RMB '000) | 2024 (RMB '000) | Change Rate | | :--- | :--- | :--- | :--- | | Prepayments | 14,959 | 27,450 | -45.5% | [Trade and Other Payables](index=17&type=section&id=%E8%B4%B8%E6%98%93%E5%8F%8A%E5%85%B6%E4%BB%96%E5%BA%94%E4%BB%98%E6%AC%BE%E9%A0%85) Trade and other payables decreased from RMB 208.6 million as of December 31, 2024, to RMB 177.5 million as of June 30, 2025, broadly consistent with the decline in cost of sales Trade and Other Payables (As of June 30) | Metric | 2025 (RMB '000) | 2024 (RMB '000) | Change Rate | | :--- | :--- | :--- | :--- | | Trade and Other Payables | 177,508 | 208,562 | -15.0% | - Mainly includes **trade payables, accrued salaries and bonuses, advances from customers, amounts due to shareholders, and other payables** `[51](index=51&type=chunk)` [Contract Liabilities](index=17&type=section&id=%E5%90%88%E7%B4%84%E8%B2%A0%E5%80%BAz) Contract liabilities remained relatively stable at RMB 56.0 million as of June 30, 2025 Contract Liabilities (As of June 30) | Metric | 2025 (RMB '000) | 2024 (RMB '000) | Change Rate | | :--- | :--- | :--- | :--- | | Contract Liabilities | 56,002 | 58,015 | -3.5% | [Loans and Borrowings](index=17&type=section&id=%E8%B2%B8%E6%AC%BE%E5%8F%8A%E5%80%9F%E6%AC%BE) Current loans and borrowings decreased from RMB 55.5 million as of December 31, 2024, to RMB 54.4 million as of June 30, 2025, mainly due to the repayment of some outstanding loans and borrowings Loans and Borrowings (As of June 30) | Metric | 2025 (RMB '000) | 2024 (RMB '000) | Change Rate | | :--- | :--- | :--- | :--- | | Current Loans and Borrowings | 54,416 | 55,502 | -2.0% | | Non-current Loans and Borrowings | 301 | 905 | -66.7% | [Contingent Liabilities](index=17&type=section&id=%E6%88%96%E7%84%B6%E8%B2%A0%E5%80%BAz) As of June 30, 2025, and December 31, 2024, the company had no significant contingent liabilities - No significant contingent liabilities at the end of the reporting period `[54](index=54&type=chunk)` [Non-Current Assets/Liabilities](index=18&type=section&id=%E9%9D%9E%E6%B5%81%E5%8B%95%E8%B3%87%E7%94%A2%E2%88%95%E8%B2%A0%E5%80%BAz) The company's total net assets increased to RMB 240.2 million, with intangible assets significantly increasing to RMB 99.0 million, primarily due to the recognition of R&D outcomes as intangible assets during the reporting period Non-Current Assets/Liabilities (As of June 30) | Metric | 2025 (RMB '000) | 2024 (RMB '000) | Change Rate | | :--- | :--- | :--- | :--- | | Property, Plant and Equipment | 6,663 | 8,660 | -23.0% | | Intangible Assets | 99,020 | 81,272 | +21.8% | | Goodwill | 8,605 | 8,605 | 0.0% | | Deferred Tax Assets | 22,797 | 20,300 | +12.3% | | Non-current Liabilities | 3,487 | 4,629 | -24.7% | - The increase in intangible assets was mainly due to the **recognition of R&D outcomes** during the reporting period `[55](index=55&type=chunk)` [Liquidity and Financial Resources](index=18&type=section&id=%E6%B5%81%E5%8B%95%E8%B3%87%E9%87%91%E5%8F%8A%E8%B2%A1%E5%8B%99%E8%B3%87%E6%BA%90) As of June 30, 2025, the company's cash and cash equivalents were RMB 231.4 million; net cash from operating activities significantly increased, net cash outflow from investing activities was mainly for capitalizing R&D outcomes, and net cash outflow from financing activities was primarily for repaying bank loans and paying listing fees Cash Flow Overview (Six Months Ended June 30) | Metric | 2025 (RMB '000) | 2024 (RMB '000) | | :--- | :--- | :--- | | Net cash from operating activities | 34,670 | 13,030 | | Net cash (used in)/from investing activities | (52,344) | (18,578) | | Net cash (used in)/from financing activities | (11,130) | (13,409) | | Net increase/(decrease) in cash and cash equivalents | (28,804) | (18,957) | | Cash and cash equivalents at January 1 | 260,229 | 168,693 | | Cash and cash equivalents at June 30 | 231,425 | 149,736 | - Net cash outflow from investing activities was mainly due to expenses of **RMB 50.7 million** related to capitalizing R&D outcomes as intangible assets `[57](index=57&type=chunk)` - Net cash outflow from financing activities was primarily due to **repayment of bank loans of RMB 24.9 million** and **payment of listing fees of RMB 6.4 million** `[57](index=57&type=chunk)` - Total bank loans and borrowings amounted to **RMB 54.7 million**, with annual interest rates ranging from **3.35% to 14.65%** `[58](index=58&type=chunk)` [Other Information](index=19&type=section&id=%E5%85%B6%E4%BB%96%E4%BF%A1%E6%81%AF) [Outlook](index=19&type=section&id=%E5%B1%95%E6%9C%9B) The company remains cautiously optimistic about its business prospects, planning to improve financial performance and profitability by monetizing pharmaceutical sales, content services, and IT services, and strengthening cooperation with doctors to expand the RWS support services market - Expected to improve financial performance and profitability by **monetizing pharmaceutical sales business, content services, and information technology services** `[59](index=59&type=chunk)` - Plans to deepen connections with more doctors and integrate medical services into the platform to **enhance business segment synergies** and **strengthen the advantages of the pharmaceutical sales business** `[59](index=59&type=chunk)` - Aims to obtain broader real-world clinical data through expanded cooperation with doctors, providing more valuable insights for pharmaceutical companies and assisting drug research `[59](index=59&type=chunk)` - Despite market challenges, the company maintains a **cautiously optimistic attitude** towards its business prospects `[60](index=60&type=chunk)` [Material Post-Reporting Period Events](index=19&type=section&id=%E6%8A%A5%E5%91%8A%E6%9C%9F%E5%90%8E%E9%87%8D%E5%A4%A7%E4%BA%8B%E9%A1%B9) As of the announcement date, the company had no material post-reporting period events - No material post-reporting period events as of the announcement date `[61](index=61&type=chunk)` [Compliance with Corporate Governance Code](index=19&type=section&id=%E9%81%B5%E5%AE%88%E4%BC%81%E4%B8%9A%E7%AE%A1%E6%B2%BB%E5%AE%88%E5%88%99) The company is committed to practicing good corporate governance standards and has complied with all applicable provisions of the Corporate Governance Code during the reporting period, with a deviation where the roles of Chairman and Chief Executive Officer are held by the same person - The company has adopted and applied the **Corporate Governance Code** set out in Appendix C1 of the Listing Rules `[63](index=63&type=chunk)` - During the reporting period, the company complied with all applicable code provisions of the Corporate Governance Code, except for the roles of Chairman and Chief Executive Officer being held by the same person `[63](index=63&type=chunk)` [Corporate Governance Code Compliance](index=19&type=section&id=%E4%BC%81%E4%B8%9A%E7%AE%A1%E6%B2%BB%E5%AE%88%E5%88%99%E5%90%88%E8%A7%84%E6%80%A7) The company has adopted and complied with the Corporate Governance Code, aiming to protect shareholders' interests, enhance corporate value and transparency, but there is a deviation where the roles of Chairman and Chief Executive Officer are held by the same person - The company is committed to ensuring good corporate governance standards are practiced to **protect shareholders' interests, enhance corporate value, formulate business strategies, and improve transparency and accountability** `[62](index=62&type=chunk)` [Roles of Chairman and Chief Executive Officer](index=20&type=section&id=%E4%B8%BB%E5%B8%AD%E5%8F%8A%E8%A1%8C%E6%94%BF%E6%80%BB%E8%A3%81%E8%A7%92%E8%89%B2) Mr. Zhang Wanneng currently serves as both Chairman of the Board and Chief Executive Officer, a deviation from Code Provision C.2.1 of the Corporate Governance Code; the Board believes this arrangement benefits Group management and will continue to review it - Mr. Zhang Wanneng currently holds both the roles of **Chairman of the Board and Chief Executive Officer**, which deviates from Code Provision C.2.1 of the Corporate Governance Code `[64](index=64&type=chunk)` - The Board believes this arrangement is beneficial for Group management, given Mr. Zhang's role as founder and extensive experience, and that senior management and the Board can effectively monitor and balance his powers `[64](index=64&type=chunk)[65](index=65&type=chunk)` - The Board is committed to continuously reviewing and considering the separation of the roles of Chairman and Chief Executive Officer when appropriate and suitable `[65](index=65&type=chunk)` [Interim Results Review](index=21&type=section&id=%E4%B8%AD%E6%9C%9F%E4%B8%9A%E7%BB%A9%E5%9B%9E%E9%A1%B5) The Group's unaudited consolidated financial statements for the six months ended June 30, 2025, have been reviewed by the external auditor and the Board's audit committee - The interim financial statements were not audited by the external auditor but were reviewed by the **external auditor and the Board's audit committee** `[66](index=66&type=chunk)` - The audit committee comprises two independent non-executive directors and one non-executive director, with **Mr. Xu Jing** serving as the Chairman of the audit committee `[66](index=66&type=chunk)` [Interim Dividend](index=21&type=section&id=%E4%B8%AD%E6%9C%9F%E8%82%A1%E6%81%AF) The Board of Directors does not recommend an interim dividend for the six months ended June 30, 2025 - The Board of Directors does not recommend an interim dividend for the six months ended **June 30, 2025** (2024: nil) `[67](index=67&type=chunk)` [Purchase, Sale or Redemption of the Company's Listed Securities](index=21&type=section&id=%E8%B4%AD%E4%B9%B0%E3%80%81%E5%87%BA%E5%94%AE%E6%88%96%E8%B5%8E%E5%9B%9E%E6%9C%AC%E5%85%AC%E5%8F%B8%E7%9A%84%E4%B8%8A%E5%B8%82%E8%AF%81%E5%88%B8) During the reporting period, neither the company nor its subsidiaries purchased, sold, or redeemed any of the company's listed securities - During the reporting period, neither the company nor its subsidiaries purchased, sold, or redeemed any listed securities `[68](index=68&type=chunk)` [Publication of Interim Results Announcement and Interim Report](index=21&type=section&id=%E5%88%8A%E5%8F%91%E4%B8%AD%E6%9C%9F%E4%B8%9A%E7%BB%A9%E5%85%AC%E5%91%8A%E5%8F%8A%E4%B8%AD%E6%9C%9F%E6%8A%A5%E5%91%8A) This interim results announcement has been published on the HKEXnews website and the company's website, and the interim report will be published in due course - The interim results announcement has been published on the **HKEXnews website www.hkexnews.hk** and the **company's website www.jkzlkj.cn** `[69](index=69&type=chunk)` - The interim report for the six months ended **June 30, 2025**, will be published on the aforementioned websites in due course `[69](index=69&type=chunk)`

[Corporate Information](index=4&type=section&id=Corporate%20Information) This section details the company's governance structure, including board composition and committees, alongside essential corporate contact and registration information [Board of Directors and Committees](index=4&type=section&id=Board%20of%20Directors%20and%20Committees) The Board consists of one executive and three independent non-executive directors, with all key committees chaired by independent non-executive directors - Executive Director: **Ms. Liu Li**[10](index=10&type=chunk) - Independent Non-Executive Directors: **Ms. Huang Ziling** (also chairs Audit, Remuneration, Nomination, and Corporate Governance & Risk Management Committees), **Mr. Li Guolin**, **Mr. Lu Dewei**[10](index=10&type=chunk)[11](index=11&type=chunk) [Company Information](index=4&type=section&id=Company%20Information) The company's authorized representatives are Ms. Liu Li and Mr. Yu Yi, with its principal office in Hong Kong and registered office in the Cayman Islands - Authorized Representatives: **Ms. Liu Li**, **Mr. Yu Yi**[10](index=10&type=chunk) - Company Secretary: **Mr. Yu Yi**[10](index=10&type=chunk) - GEM Stock Code: **8238**[14](index=14&type=chunk) [Interim Results](index=7&type=section&id=Interim%20Results) This section presents the Group's unaudited condensed consolidated financial statements, including profit or loss, financial position, equity changes, and cash flows [Unaudited Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=7&type=section&id=Unaudited%20Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) Total revenue grew **54.12%** to **HKD 11,824 thousand**, yet loss attributable to owners expanded to **HKD 316 thousand** due to increased costs and expenses Unaudited Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (HKD thousands) | Metric | June 30, 2025 (HKD thousands) | June 30, 2024 (HKD thousands) | Change (HKD thousands) | Change Rate | | :--- | :--- | :--- | :--- | :--- | | Revenue | 11,824 | 7,672 | 4,152 | 54.12% | | Cost of Sales | (5,252) | (2,148) | (3,104) | 144.51% | | Gross Profit/(Loss) | 6,572 | 5,523 | 1,049 | 19.00% | | Operating Expenses | (6,373) | (5,422) | (951) | 17.54% | | Finance Costs | (638) | (556) | (82) | 14.75% | | Profit/(Loss) Before Taxation | (408) | (406) | (2) | 0.49% | | Total Profit/(Loss) and Comprehensive Income/(Expense) for the Period | (408) | (406) | (2) | 0.49% | | Profit/(Loss) Attributable to Owners of the Company | (316) | (112) | (204) | 182.14% | | Profit/(Loss) Attributable to Non-controlling Interests | (92) | (294) | 202 | -68.71% | | Basic and Diluted Loss Per Share (HK cents) | (0.36) | (0.18) | (0.18) | 100.00% | [Condensed Consolidated Statement of Financial Position](index=9&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) Net liabilities slightly increased to **HKD 39,137 thousand** due to higher net current liabilities, with a significant inventory surge and reduced bank balances and cash Condensed Consolidated Statement of Financial Position (HKD thousands) | Metric | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | Change (HKD thousands) | Change Rate | | :--- | :--- | :--- | :--- | :--- | | Non-current Assets | 968 | 1,109 | (141) | -12.71% | | Current Assets | 27,773 | 27,377 | 396 | 1.45% | | Inventories | 4,544 | 1,004 | 3,540 | 352.59% | | Bank Balances and Cash | 5,027 | 9,590 | (4,563) | -47.58% | | Current Liabilities | 67,878 | 67,215 | 663 | 0.99% | | Net Current (Liabilities) | (40,105) | (39,838) | (267) | 0.67% | | Net (Liabilities) | (39,137) | (38,729) | (408) | 1.05% | | Total Equity | (39,137) | (38,729) | (408) | 1.05% | [Unaudited Condensed Consolidated Statement of Changes in Equity](index=11&type=section&id=Unaudited%20Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) Accumulated losses attributable to owners expanded to **HKD 180,326 thousand**, increasing total capital deficiency to **HKD 36,464 thousand** for the period Unaudited Condensed Consolidated Statement of Changes in Equity (HKD thousands) | Metric | January 1, 2025 (HKD thousands) | June 30, 2025 (HKD thousands) | Change (HKD thousands) | | :--- | :--- | :--- | :--- | | Share Capital | 17,419 | 17,419 | 0 | | Share Premium | 118,803 | 118,803 | 0 | | Accumulated Losses | (180,010) | (180,326) | (316) | | Total Capital Deficiency Attributable to Owners of the Company | (36,148) | (36,464) | (316) | | Non-controlling Interests | (2,581) | (2,673) | (92) | | Total Equity | (38,729) | (39,137) | (408) | [Unaudited Condensed Consolidated Statement of Cash Flows](index=12&type=section&id=Unaudited%20Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) Net cash used in operating activities was **HKD 9,063 thousand**, resulting in a **HKD 4,563 thousand** decrease in cash and cash equivalents despite financing inflows Unaudited Condensed Consolidated Statement of Cash Flows (HKD thousands) | Metric | June 30, 2025 (HKD thousands) | June 30, 2024 (HKD thousands) | Change (HKD thousands) | | :--- | :--- | :--- | :--- | | Net Cash Used in Operating Activities | (9,063) | 3,016 | (12,079) | | Net Cash Used in Investing Activities | – | – | 0 | | Net Cash From Financing Activities | 4,500 | 4,859 | (359) | | Net Increase/(Decrease) in Cash and Cash Equivalents | (4,563) | 7,875 | (12,438) | | Cash and Cash Equivalents at January 1 | 9,590 | 3,552 | 6,038 | | Cash and Cash Equivalents at June 30 | 5,027 | 11,427 | (6,400) | [Notes to the Unaudited Condensed Consolidated Financial Information](index=12&type=section&id=Notes%20to%20the%20Unaudited%20Condensed%20Consolidated%20Financial%20Information) This section provides detailed notes on the Group's unaudited condensed consolidated financial information, including general data, accounting policies, and specific financial items [General Information and Basis of Preparation](index=13&type=section&id=General%20Information%20and%20Basis%20of%20Preparation) Incorporated in the Cayman Islands on **December 7, 2012**, and listed on GEM on **February 16, 2015**, the company presents financial results in **HKD** under **HKFRSs** - Company incorporated in Cayman Islands on **December 7, 2012**, and listed on GEM on **February 16, 2015**[25](index=25&type=chunk) - Financial results presented in **HKD** and prepared in accordance with **HKFRSs** and GEM Listing Rules[26](index=26&type=chunk)[27](index=27&type=chunk) [Significant Accounting Policies](index=13&type=section&id=Significant%20Accounting%20Policies) The Group adopted new and revised HKFRSs, including amendments to HKFRS 16, HKAS 1, HKAS 7, and HKFRS 7, with no significant impact on financial performance - The Group adopted new and revised HKFRSs, including amendments to **HKFRS 16, HKAS 1, HKAS 7, and HKFRS 7**[31](index=31&type=chunk)[32](index=32&type=chunk) - Adoption of new standards had **no significant impact** on current or prior period results and financial position[32](index=32&type=chunk) [Revenue](index=15&type=section&id=Revenue_Note) Total revenue from continuing operations grew **54.12%** to **HKD 11,824 thousand**, primarily driven by significant increases in luxury goods sales and publication and advertising income Revenue by Source (HKD thousands) | Revenue Source | June 30, 2025 (HKD thousands) | June 30, 2024 (HKD thousands) | Change (HKD thousands) | Change Rate | | :--- | :--- | :--- | :--- | :--- | | Sales of Luxury Goods | 3,140 | 420 | 2,720 | 647.62% | | Publication and Advertising Income | 8,218 | 6,112 | 2,106 | 34.46% | | Outdoor Advertising Income | 242 | 738 | (496) | -67.21% | | Sales of Fast-Moving Consumer Goods | 224 | 402 | (178) | -44.28% | | **Total Revenue** | **11,824** | **7,672** | **4,152** | **54.12%** | [Profit/(Loss) Before Taxation](index=16&type=section&id=Profit%2F%28Loss%29%20Before%20Taxation_Note) Loss before taxation from continuing operations slightly increased from **HKD 406 thousand** in 2024 to **HKD 408 thousand** in 2025, mainly due to higher interest on other borrowings Profit/(Loss) Before Taxation Items (HKD thousands) | Item | June 30, 2025 (HKD thousands) | June 30, 2024 (HKD thousands) | Change (HKD thousands) | | :--- | :--- | :--- | :--- | | Depreciation of Plant and Equipment | 141 | 123 | 18 | | Operating Lease Expenses for Office Properties | 522 | 528 | (6) | | Interest on Loans from Major Shareholders | – | 16 | (16) | | Interest on Other Borrowings | 638 | 540 | 98 | [Income Tax Expenses](index=17&type=section&id=Income%20Tax%20Expenses) The Group incurred no income tax expense in Hong Kong or Macau for the period, as it had no assessable profits in either jurisdiction - **Hong Kong profits tax** and **Macau complementary income tax** were zero[42](index=42&type=chunk) - Hong Kong operates a two-tiered profits tax system, but the Group had **no assessable profits** in Hong Kong[42](index=42&type=chunk) - Macau complementary income tax is calculated at **12%** of estimated assessable profits[43](index=43&type=chunk) [Dividend](index=18&type=section&id=Dividend) No dividends were paid or proposed for the six months ended June 30, 2025, consistent with the prior corresponding period - **No dividends** paid or proposed for the six months ended June 30, 2025, and 2024[47](index=47&type=chunk) [Profit/(Loss) Per Share](index=18&type=section&id=Profit%2F%28Loss%29%20Per%20Share) Basic loss per share attributable to owners increased from **0.18 HK cents** to **0.36 HK cents**, with no diluted loss per share presented due to the absence of potential ordinary shares Profit/(Loss) Per Share (HKD thousands, except per share data) | Metric | June 30, 2025 (HKD thousands) | June 30, 2024 (HKD thousands) | Change (HKD thousands) | | :--- | :--- | :--- | :--- | | Profit/(Loss) Attributable to Owners of the Company | (316) | (112) | (204) | | Weighted Average Number of Ordinary Shares | 87,091,200 | 62,413,081 | 24,678,119 | | Basic and Diluted Loss Per Share (HK cents) | (0.36) | (0.18) | (0.18) | - **No diluted profit or loss per share** presented due to the absence of potential ordinary shares outstanding during the period[52](index=52&type=chunk) [Trade and Other Receivables](index=19&type=section&id=Trade%20and%20Other%20Receivables) Total trade receivables increased to **HKD 41,594 thousand**, with overdue amounts exceeding 365 days forming the largest portion at **HKD 37,193 thousand** - Credit terms determined by sales team based on **customer payment history, transaction volume, and length of business relationship**[53](index=53&type=chunk) Trade and Other Receivables by Ageing (HKD thousands) | Ageing | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | Change (HKD thousands) | | :--- | :--- | :--- | :--- | | 1–30 Days | 4,030 | 849 | 3,181 | | 31–90 Days | 273 | 468 | (195) | | 91–365 Days | 98 | 3,455 | (3,357) | | Over 365 Days | 37,193 | 35,403 | 1,790 | | **Total** | **41,594** | **40,175** | **1,419** | [Trade Payables](index=20&type=section&id=Trade%20Payables) Total trade payables amounted to **HKD 9,422 thousand**, a decrease from 2024 year-end, with overdue amounts exceeding 90 days still forming the major portion Trade Payables by Ageing (HKD thousands) | Ageing | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | Change (HKD thousands) | | :--- | :--- | :--- | :--- | | 0–60 Days | 157 | – | 157 | | 61–90 Days | 1,361 | – | 1,361 | | Over 90 Days | 7,904 | 10,957 | (3,053) | | **Total** | **9,422** | **10,957** | **(1,535)** | [Share Capital](index=21&type=section&id=Share%20Capital) The company's authorized and issued share capital remained unchanged at **500,000,000** and **87,091,200** ordinary shares, respectively, as of June 30, 2025 Share Capital | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Number of Authorized Ordinary Shares | 500,000,000 | 500,000,000 | | Authorized Share Capital (HKD thousands) | 100,000 | 100,000 | | Number of Issued and Fully Paid Ordinary Shares | 87,091,200 | 87,091,200 | | Issued and Fully Paid Share Capital (HKD thousands) | 17,418 | 17,418 | [Management Discussion and Analysis](index=22&type=section&id=Management%20Discussion%20and%20Analysis) This section reviews the Group's business operations, financial performance, liquidity, and risk management strategies for the interim period [Business Review and Prospects](index=22&type=section&id=Business%20Review%20and%20Prospects) The Group engaged in exhibition, publications, online beauty sales, and luxury goods, focusing on stable development amidst economic uncertainties and shareholder returns - Principal businesses include **exhibition and trade fairs, publications and advertising, online sales of beauty and cosmetics, and luxury goods sales**[61](index=61&type=chunk) - The Group will closely monitor economic uncertainties, formulate strategies for **stable development**, and aim to deliver returns to shareholders[62](index=62&type=chunk)[65](index=65&type=chunk) [Financial Review](index=22&type=section&id=Financial%20Review) Significant revenue growth was observed, but increased cost of sales and operating expenses led to an expanded loss attributable to owners, with finance costs mainly from other borrowings [Revenue](index=22&type=section&id=Revenue_MD%26A) Total revenue increased by **54.12%** to **HKD 11,824 thousand**, primarily driven by growth in luxury goods sales and publication and advertising income - Total revenue increased from **HKD 7,672 thousand** in 2024 to **HKD 11,824 thousand** in 2025, a growth of approximately **HKD 4,152 thousand (54.12%)**[63](index=63&type=chunk)[66](index=66&type=chunk) - Primarily due to increased **luxury goods sales** and **publication and advertising income**[63](index=63&type=chunk)[66](index=66&type=chunk) [Cost of Sales](index=22&type=section&id=Cost%20of%20Sales) Cost of sales significantly increased by **144.51%** from **HKD 2,148 thousand** to **HKD 5,252 thousand**, consistent with the rise in luxury goods sales revenue - Cost of sales increased from **HKD 2,148 thousand** in 2024 to **HKD 5,252 thousand** in 2025[64](index=64&type=chunk)[67](index=67&type=chunk) - Growth is consistent with the increase in **luxury goods sales revenue**[64](index=64&type=chunk)[67](index=67&type=chunk) [Gross Profit](index=23&type=section&id=Gross%20Profit) Gross profit shifted from a **loss of HKD 2,148 thousand** to a **profit of HKD 5,242 thousand**, mainly due to increased publication and advertising income - Gross profit increased from a **loss of HKD 2,148 thousand** in 2024 to a **profit of HKD 5,242 thousand** in 2025[68](index=68&type=chunk)[72](index=72&type=chunk) - Primarily due to increased **publication revenue and advertising income**[68](index=68&type=chunk)[72](index=72&type=chunk) [Operating Expenses](index=23&type=section&id=Operating%20Expenses) Operating expenses increased by approximately **18%** from **HKD 5,422 thousand** to **HKD 6,373 thousand**, mainly attributable to higher staff costs - Operating expenses increased by approximately **18%** from **HKD 5,422 thousand** in 2024 to **HKD 6,373 thousand** in 2025[69](index=69&type=chunk)[73](index=73&type=chunk) - Mainly due to increased **staff costs**[69](index=69&type=chunk)[73](index=73&type=chunk) [Finance Costs](index=23&type=section&id=Finance%20Costs) Finance costs were approximately **HKD 638 thousand**, primarily comprising interest on other borrowings for the six months ended June 30, 2025 - Finance costs were approximately **HKD 638 thousand**[70](index=70&type=chunk)[74](index=74&type=chunk) - Primarily comprised **interest on other borrowings**[70](index=70&type=chunk)[74](index=74&type=chunk) [Profit/(Loss) Attributable to Owners of the Company](index=23&type=section&id=Profit%2F%28Loss%29%20Attributable%20to%20Owners%20of%20the%20Company) Loss attributable to owners increased from **HKD 112 thousand** in 2024 to **HKD 316 thousand** in 2025 - Loss attributable to owners increased from **HKD 112 thousand** in 2024 to **HKD 316 thousand** in 2025[71](index=71&type=chunk)[75](index=75&type=chunk) [Use of Proceed from Placing](index=24&type=section&id=Use%20of%20Proceed%20from%20Placing) Net proceeds of approximately **HKD 3.94 million** from the second placing were fully utilized for business operations, development, and general working capital, with no change in intended use - Net proceeds from the second placing in 2024 were approximately **HKD 3.94 million**[77](index=77&type=chunk)[79](index=79&type=chunk) - Funds were used for **current business operations, development, and general working capital**[77](index=77&type=chunk)[79](index=79&type=chunk) - As of June 30, 2025, **all net proceeds have been utilized**[81](index=81&type=chunk) - **No significant changes** in the intended use of net proceeds[82](index=82&type=chunk)[87](index=87&type=chunk) [Liquidity, Financial Resources and Capital Structure](index=25&type=section&id=Liquidity%2C%20Financial%20Resources%20and%20Capital%20Structure) The current ratio decreased to approximately **0.4 times**, and bank balances and cash reduced to **HKD 5,027 thousand**, with no change in capital structure or bank loans - Current ratio decreased from approximately **0.6 times** as of December 31, 2024, to approximately **0.4 times** as of June 30, 2025[83](index=83&type=chunk)[88](index=88&type=chunk) - Capital structure remained **unchanged** during the period, with share capital comprising only ordinary shares[83](index=83&type=chunk)[88](index=88&type=chunk) - Bank balances and cash decreased from **HKD 9,590 thousand** as of December 31, 2024, to **HKD 5,027 thousand** as of June 30, 2025[84](index=84&type=chunk)[88](index=88&type=chunk) - The Group had **no bank loans** as of June 30, 2025[84](index=84&type=chunk)[89](index=89&type=chunk) [Gearing Ratio](index=25&type=section&id=Gearing%20Ratio) The gearing ratio improved to approximately **19%** as of June 30, 2025, from approximately **31%** as of December 31, 2024 - Gearing ratio decreased from approximately **31%** as of December 31, 2024, to approximately **19%** as of June 30, 2025[85](index=85&type=chunk)[90](index=90&type=chunk) [Significant Investments Held](index=25&type=section&id=Significant%20Investments%20Held) The Group held no significant investments for the six months ended June 30, 2025 - The Group held **no significant investments** for the six months ended June 30, 2025[91](index=91&type=chunk) [Material Acquisitions and Disposals of Subsidiaries, Associates and Joint Ventures](index=26&type=section&id=Material%20Acquisitions%20and%20Disposals%20of%20Subsidiaries%2C%20Associates%20and%20Joint%20Ventures) The Group had no material acquisitions or disposals of subsidiaries, associates, or joint ventures for the six months ended June 30, 2025 - The Group had **no material acquisitions or disposals** of subsidiaries, associates, or joint ventures for the six months ended June 30, 2025[92](index=92&type=chunk)[97](index=97&type=chunk) [Pledge of Assets](index=26&type=section&id=Pledge%20of%20Assets) The Group had no significant pledge of assets as of June 30, 2025 - The Group had **no significant pledge of assets** as of June 30, 2025[93](index=93&type=chunk)[97](index=97&type=chunk) [Contingent Liabilities](index=26&type=section&id=Contingent%20Liabilities) The Group had no significant contingent liabilities as of June 30, 2025 - The Group had **no significant contingent liabilities** as of June 30, 2025[94](index=94&type=chunk)[97](index=97&type=chunk) [Capital Commitments](index=26&type=section&id=Capital%20Commitments) The Group had no significant capital commitments as of June 30, 2025 - The Group had **no significant capital commitments** as of June 30, 2025[95](index=95&type=chunk)[97](index=97&type=chunk) [Future Plans for Material Investments and Capital Assets](index=26&type=section&id=Future%20Plans%20for%20Material%20Investments%20and%20Capital%20Assets) The Group has no other future plans for material investments and capital assets beyond those disclosed in this interim report - The Group has **no other future plans** for material investments and capital assets beyond those disclosed in this interim report[96](index=96&type=chunk)[98](index=98&type=chunk) [Employees and Remuneration Policies](index=27&type=section&id=Employees%20and%20Remuneration%20Policies) The Group had approximately **11 employees**, with staff costs increasing to **HKD 1,363 thousand**, offering competitive remuneration, performance reviews, bonuses, training, and share option schemes - As of June 30, 2025, the number of employees (excluding directors) was approximately **11** (December 31, 2024: approximately 12)[100](index=100&type=chunk)[102](index=102&type=chunk) - Staff costs (including directors' emoluments, allowances, and bonuses) were approximately **HKD 1,363 thousand** (2024: approximately HKD 1,124 thousand)[100](index=100&type=chunk)[102](index=102&type=chunk) - The Group offers **competitive remuneration**, annual performance reviews, bonuses, training, and share option schemes[101](index=101&type=chunk)[102](index=102&type=chunk) [Interim Dividend](index=28&type=section&id=Interim%20Dividend) The Board recommended no interim dividend to retain cash for working capital and future development, with future distributions subject to the company's dividend policy - The Board recommended **no interim dividend** for the six months ended June 30, 2025 (2024: nil)[103](index=103&type=chunk)[107](index=107&type=chunk) - Aimed at retaining more cash for **working capital needs and future development**[103](index=103&type=chunk)[107](index=107&type=chunk) [Risk Management](index=28&type=section&id=Risk%20Management) The Group manages currency, interest rate, credit, and liquidity risks, anticipating no significant currency or interest rate risks due to functional currency denomination and limited fixed-rate borrowing [Currency Risk](index=28&type=section&id=Currency%20Risk) The Group's monetary assets and liabilities are primarily denominated in HKD and MOP, aligning with functional currencies, thus no significant currency risk is anticipated - The vast majority of monetary assets and liabilities are denominated in **HKD and MOP**[104](index=104&type=chunk)[108](index=108&type=chunk) - The Group **does not anticipate any significant currency risk**[104](index=104&type=chunk)[108](index=108&type=chunk) [Interest Rate Risk](index=28&type=section&id=Interest%20Rate%20Risk) The Group faces fair value interest rate risk related to fixed-rate other borrowings but does not anticipate any significant interest rate risk materially affecting its operating results - The Group faces **fair value interest rate risk** related to fixed-rate other borrowings[105](index=105&type=chunk)[109](index=109&type=chunk) - **No significant interest rate risk** is anticipated[105](index=105&type=chunk)[109](index=109&type=chunk) [Credit Risk](index=28&type=section&id=Credit%20Risk) Credit risk is managed by transacting with reputable counterparties, obtaining collateral, and regularly assessing major clients' creditworthiness, with limited credit risk from bank balances - Policy adopted to transact only with **reputable counterparties** and obtain sufficient collateral when appropriate[106](index=106&type=chunk)[110](index=110&type=chunk) - Regular credit assessments of major customers, focusing on **payment history and current payment ability**[111](index=111&type=chunk)[114](index=114&type=chunk) - Credit risk from bank balances is limited as counterparties are **highly-rated banks**[112](index=112&type=chunk)[115](index=115&type=chunk) [Liquidity Risk](index=29&type=section&id=Liquidity%20Risk) The Group regularly monitors current and anticipated liquidity needs and compliance with loan covenants to ensure sufficient cash and committed credit facilities from major financial institutions - Regularly monitors **current and anticipated liquidity needs** and compliance with loan covenants[113](index=113&type=chunk)[116](index=116&type=chunk) - Ensures **sufficient cash** and adequate committed facilities from major financial institutions[113](index=113&type=chunk)[116](index=116&type=chunk) [Other Information](index=29&type=section&id=Other%20Information) This section covers directors' and substantial shareholders' interests, share option schemes, securities transactions, corporate governance, and post-reporting period events [Directors and Chief Executives' Interests and/or Short Positions in Shares, Underlying Shares and Debentures of the Company or Any Associated Corporations](index=30&type=section&id=Directors%20and%20Chief%20Executives%27%20Interests%20and%2For%20Short%20Positions%20in%20Shares%2C%20Underlying%20Shares%20and%20Debentures%20of%20the%20Company%20or%20Any%20Associated%20Corporations) As of June 30, 2025, Mr. Lu Man Wah held **343,300 shares** (long position) through Creative Source International Limited, representing approximately **0.04%** of the share capital Directors' Interests in Shares | Director Name | Capacity | Interest in Shares | Approximate Percentage of Shareholding | | :--- | :--- | :--- | :--- | | Mr. Lu Man Wah | Controlled Corporation Interest | 343,300 (L) | 0.04% | [Substantial Shareholders' and Other Persons' Interests and/or Short Positions in Shares and Underlying Shares of the Company](index=32&type=section&id=Substantial%20Shareholders%27%20and%20Other%20Persons%27%20Interests%20and%2For%20Short%20Positions%20in%20Shares%20and%20Underlying%20Shares%20of%20the%20Company) As of June 30, 2025, Muhammad Shaifadila Binti, as beneficial owner, held **39,376,000 shares** (long position), representing approximately **4.52%** of the share capital Substantial Shareholders' Interests in Shares | Shareholder Name | Capacity | Number of Shares or Underlying Shares | Approximate Percentage of Shareholding | | :--- | :--- | :--- | :--- | | Muhammad Shaifadila Binti | Beneficial Owner | 39,376,000 (L) | 4.52% | [Share Option Scheme](index=33&type=section&id=Share%20Option%20Scheme) The Group's share option scheme, adopted on **February 16, 2015**, expired on **February 16, 2025** - The share option scheme was adopted on **February 16, 2015**, and expired on **February 16, 2025**[127](index=127&type=chunk)[131](index=131&type=chunk) [Purchase, Sale or Redemption of Listed Securities](index=33&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20Listed%20Securities) Neither the company nor its subsidiaries purchased, sold, or redeemed any of the company's listed securities for the six months ended June 30, 2025 - For the six months ended June 30, 2025, neither the company nor its subsidiaries **purchased, sold, or redeemed any of the company's listed securities**[128](index=128&type=chunk)[132](index=132&type=chunk) [Changes of Directors' Information Under Rule 17.50A(1) of the GEM Listing Rules](index=33&type=section&id=Changes%20of%20Directors%27%20Information%20Under%20Rule%2017.50A%281%29%20of%20the%20GEM%20Listing%20Rules) The company was unaware of any changes in directors' information requiring disclosure under **GEM Listing Rule 17.50A(1)** as of June 30, 2025 - As of June 30, 2025, the company was **unaware of any changes in directors' information** requiring disclosure under GEM Listing Rule 17.50A(1)[129](index=129&type=chunk)[133](index=133&type=chunk) [Code of Conduct for Directors' Securities Transactions](index=34&type=section&id=Code%20of%20Conduct%20for%20Directors%27%20Securities%20Transactions) The company adopted a code of conduct for directors' securities transactions, and all directors confirmed compliance for the period - The company adopted a **code of conduct for directors' securities transactions**, and all directors confirmed compliance[136](index=136&type=chunk)[138](index=138&type=chunk) [Directors and Controlling Shareholders' Interests in Competing Business](index=34&type=section&id=Directors%20and%20Controlling%20Shareholders%27%20Interests%20in%20Competing%20Business) Directors were unaware of any competing businesses or conflicts of interest held by directors, controlling shareholders, or their associates for the period - Directors were **unaware of any competing businesses or conflicts of interest** held by directors, controlling shareholders, or their associates[137](index=137&type=chunk)[139](index=139&type=chunk) [Corporate Governance](index=35&type=section&id=Corporate%20Governance) The company complied with the Corporate Governance Code, except for the separation of Chairman and CEO roles, as it currently has no CEO - The company complied with the Corporate Governance Code, except for **Rule A.2.1** (separation of Chairman and CEO roles)[140](index=140&type=chunk)[143](index=143&type=chunk) - The company currently has **no Chief Executive Officer**, with decisions made by the Executive Director and overseen by the Board[141](index=141&type=chunk)[143](index=143&type=chunk) [Event After the Reporting Period](index=36&type=section&id=Event%20After%20the%20Reporting%20Period) Directors were unaware of any significant events related to the Group's business or financial performance subsequent to the reporting period and up to the report date - Subsequent to the reporting period and up to the report date, directors were **unaware of any significant events** related to the Group's business or financial performance[146](index=146&type=chunk)[149](index=149&type=chunk) [Audit Committee and Review of Financial Statements](index=36&type=section&id=Audit%20Committee%20and%20Review%20of%20Financial%20Statements) The Audit Committee reviewed the unaudited interim report and financial results, which were not audited by the company's auditor, and recommended them for Board approval - The Audit Committee was established in accordance with the **GEM Listing Rules** and comprises independent non-executive directors[147](index=147&type=chunk)[150](index=150&type=chunk) - The Audit Committee reviewed this interim report and the **unaudited condensed consolidated financial results**[148](index=148&type=chunk)[150](index=150&type=chunk) - The Group's condensed consolidated financial results for the six months ended June 30, 2025, were **not audited by the company's auditor**[151](index=151&type=chunk)

[General Information and Disclaimers](index=1&type=section&id=General%20Information%20and%20Disclaimers) This section provides company information, report scope, and disclaimers regarding GEM listing risks and director responsibilities [Company Information and Report Scope](index=1&type=section&id=Company%20Information%20and%20Report%20Scope) This announcement from Ligo Holdings Limited presents unaudited condensed consolidated financial statements for the six months ended June 30, 2025, with comparative figures for 2024, complying with HKEX GEM Listing Rules requirements - The report covers Ligo Holdings Limited and its subsidiaries' unaudited condensed consolidated financial statements for the six months ended June 30, 2025, providing comparative figures for the same period in 2024[3](index=3&type=chunk) - This announcement complies with the relevant requirements of the GEM Listing Rules concerning preliminary announcements of interim results[3](index=3&type=chunk) [GEM Listing Features and Disclaimers](index=2&type=section&id=GEM%20Listing%20Features%20and%20Disclaimers) The GEM market offers a listing platform for high-risk small and medium-sized companies, and investors should exercise caution as securities may be subject to higher market volatility - The GEM market is positioned as a listing platform for small and medium-sized companies that may carry **higher investment risks**, and their securities may be subject to **higher market volatility**[6](index=6&type=chunk) - Hong Kong Exchanges and Clearing Limited and the Stock Exchange take no responsibility for the contents of this report and make no statement as to its accuracy or completeness[6](index=6&type=chunk) - The Company's directors collectively and individually accept full responsibility for the information in this report, confirming its accuracy and completeness in all material respects, without misleading or fraudulent components[6](index=6&type=chunk) [Financial Statements](index=3&type=section&id=Financial%20Statements) This section presents the condensed consolidated financial statements, including profit or loss, financial position, changes in equity, and cash flows [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=3&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For the six months ended June 30, 2025, revenue significantly decreased by 69.5% to HK$140,628 thousand, gross profit fell 80.7% to HK$4,517 thousand, and the company reported a loss of HK$2,831 thousand, with basic loss per share of HK$0.03 Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income Key Data | Indicator | June 30, 2025 (HK$'000) | June 30, 2024 (HK$'000) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 140,628 | 461,249 | -69.5% | | Cost of services | (136,111) | (437,847) | -68.9% | | Gross profit | 4,517 | 23,402 | -80.7% | | Other income | 8,755 | 1,819 | +381.3% | | Net other gains | 1,671 | 8,243 | -79.7% | | Administrative expenses | (16,117) | (19,517) | -17.4% | | Finance costs | (913) | (3,563) | -74.4% | | (Loss)/Profit before tax | (2,831) | 7,953 | Shifted from profit to loss | | (Loss)/Profit for the period attributable to owners of the Company | (2,831) | 6,852 | Shifted from profit to loss | | Basic and diluted (loss)/earnings per share (HK$) | (0.03) | 0.08 | Shifted from profit to loss | [Condensed Consolidated Statement of Financial Position](index=4&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, non-current assets decreased, current assets slightly increased, and current liabilities decreased, leading to growth in net current assets and total equity, indicating an improved financial position Condensed Consolidated Statement of Financial Position Key Data | Indicator | June 30, 2025 (HK$'000) | December 31, 2024 (HK$'000) | Change (%) | | :--- | :--- | :--- | :--- | | Non-current assets | 38,466 | 46,320 | -17.0% | | Current assets | 161,509 | 160,861 | +0.4% | | Current liabilities | 35,870 | 43,629 | -17.8% | | Net current assets | 125,639 | 117,232 | +7.2% | | Net assets | 148,624 | 146,376 | +1.5% | | Issued share capital | 23,040 | 19,200 | +20.0% | | Reserves | 125,584 | 127,176 | -1.3% | | Equity attributable to owners of the Company | 148,624 | 146,376 | +1.5% | [Condensed Consolidated Statement of Changes in Equity](index=5&type=section&id=Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) As of June 30, 2025, total equity was HK$148,624 thousand, a slight increase from year-end 2024, with HK$5,079 thousand raised from share placement, offset by a HK$2,831 thousand loss Condensed Consolidated Statement of Changes in Equity Key Data | Indicator | June 30, 2025 (HK$'000) | January 1, 2024 (HK$'000) | | :--- | :--- | :--- | | Issued share capital | 23,040 | 4,800 | | Share premium | 67,023 | 38,472 | | Accumulated profits | 47,510 | 46,956 | | Total attributable to owners of the Company | 148,624 | 101,279 | | (Loss)/Profit and total comprehensive income for the period | (2,831) | 6,852 | | Net proceeds from placement of shares | 5,079 | - | | Net proceeds from rights issue | - | 41,712 | - A placement of **19,200,000 new shares** was completed on May 19, 2025, raising net proceeds of approximately **HK$5.1 million**[9](index=9&type=chunk) - A rights issue was completed on March 1, 2024, issuing **72,000,000 shares** and raising net proceeds of approximately **HK$41.7 million**[9](index=9&type=chunk) [Condensed Consolidated Statement of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) For the six months ended June 30, 2025, net cash outflow from operating activities was HK$8,354 thousand, net cash inflow from investing activities was HK$2,076 thousand, and net cash outflow from financing activities was HK$7,991 thousand, resulting in a net decrease of HK$14,269 thousand in cash and cash equivalents Condensed Consolidated Statement of Cash Flows Key Data | Indicator | June 30, 2025 (HK$'000) | June 30, 2024 (HK$'000) | | :--- | :--- | :--- | | Net cash (used in)/generated from operating activities | (8,354) | 9,496 | | Net cash generated from/(used in) investing activities | 2,076 | (20,664) | | Net cash (used in)/generated from financing activities | (7,991) | 23,109 | | Net (decrease)/increase in cash and cash equivalents | (14,269) | 11,941 | | Cash and cash equivalents at end of period | 44,725 | 84,218 | - In the first half of 2025, operating activities shifted from cash inflow to **cash outflow**, primarily due to a **reduction in business scale**[10](index=10&type=chunk) - In the first half of 2025, financing activities saw cash outflow mainly due to the **repayment of lease liabilities and bank borrowings**, contrasting with a significant cash inflow from a rights issue in the same period of 2024[10](index=10&type=chunk) [Notes to the Unaudited Condensed Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20the%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed notes on the financial statements, covering general information, accounting policies, revenue, expenses, earnings per share, balance sheet items, and significant transactions [General Information and Accounting Policies](index=7&type=section&id=General%20Information%20and%20Accounting%20Policies) The company, incorporated in the Cayman Islands and listed on GEM, primarily operates in environmental hygiene services and online game services, with financial statements presented in HKD under HKAS 34 and GEM Listing Rules using historical cost - The Company was incorporated in the Cayman Islands on **August 12, 2016**, and its shares were listed on GEM on **July 18, 2017**[11](index=11&type=chunk) - Principal businesses include cleaning services, pest management services, waste management and recycling services, horticultural services, and online game integrated services[11](index=11&type=chunk) - The financial statements are presented in **HKD**, prepared in accordance with **HKAS 34** and the **GEM Listing Rules**, and adopt the **historical cost convention**[12](index=12&type=chunk)[13](index=13&type=chunk)[14](index=14&type=chunk) [Revenue and Segment Information](index=8&type=section&id=Revenue%20and%20Segment%20Information) For the six months ended June 30, 2025, group revenue primarily originated from Hong Kong (approx. 97%) and China (approx. 3%), with online game services contributing HK$43,839 thousand in revenue and HK$3,417 thousand in profit - For the six months ended June 30, 2025, approximately **97% of revenue** originated from Hong Kong, and approximately **3% from China**[16](index=16&type=chunk) - The Group's operating and reportable segments include cleaning services, pest management services, waste management and recycling services, horticultural services, and online game integrated services[17](index=17&type=chunk) Segment Revenue and Results (For the six months ended June 30, 2025) | Segment | Revenue (HK$'000) | Results (HK$'000) | | :--- | :--- | :--- | | Cleaning services | 45,242 | 342 | | Pest management services | 312 | 2 | | Waste management and recycling services | 48,700 | 525 | | Horticultural services | 2,535 | 231 | | Online game integrated services | 43,839 | 3,417 | | **Total** | **140,628** | **4,517** | [Other Income and Expenses](index=11&type=section&id=Other%20Income%20and%20Expenses) For the six months ended June 30, 2025, net other gains significantly decreased by 79.7% to HK$1,671 thousand, mainly due to reduced net gain on disposal of machinery and equipment, resulting in a pre-tax loss of HK$2,831 thousand, impacted by staff costs and depreciation Net Other Gains | Item | 2025 (HK$'000) | 2024 (HK$'000) | | :--- | :--- | :--- | | Net gain on disposal of machinery and equipment | 1,325 | 8,166 | | Net exchange gain | 346 | 77 | | **Total** | **1,671** | **8,243** | Key Deductions from (Loss)/Profit Before Tax | Item | 2025 (HK$'000) | 2024 (HK$'000) | | :--- | :--- | :--- | | Total staff costs | 68,813 | 359,827 | | Depreciation of right-of-use assets, machinery and equipment | 8,994 | 12,370 | | Amortisation of an intangible asset | 16 | – | | Auditor's remuneration | 400 | 600 | | Directors' emoluments | 1,053 | 1,340 | - Hong Kong profits tax was **zero** in the first half of 2025, compared to **HK$1,101 thousand** in the same period of 2024[27](index=27&type=chunk) [Earnings Per Share and Dividends](index=12&type=section&id=Earnings%20Per%20Share%20and%20Dividends) For the six months ended June 30, 2025, basic loss per share was HK$0.03, contrasting with basic earnings per share of HK$0.08 in the prior year, with no dividends paid or proposed during the period (Loss)/Earnings Per Share Data | Indicator | 2025 (Unaudited) | 2024 (Unaudited) | | :--- | :--- | :--- | | (Loss)/Profit for the period attributable to owners of the Company (HK$'000) | (2,831) | 6,852 | | Weighted average number of ordinary shares | 100,561,326 | 89,261,964 | | Basic (loss)/earnings per share (HK$) | (0.03) | 0.08 | - The company paid, declared, or proposed **no dividends** during the current or prior interim periods[28](index=28&type=chunk) [Balance Sheet Notes](index=13&type=section&id=Balance%20Sheet%20Notes) As of June 30, 2025, trade receivables increased to HK$73,411 thousand with extended credit terms of 90-150 days, trade payables rose to HK$5,424 thousand, and bank borrowings significantly decreased to HK$23 thousand at an effective annual interest rate of 3.75% Ageing Analysis of Trade Receivables | Ageing | June 30, 2025 (HK$'000) | December 31, 2024 (HK$'000) | | :--- | :--- | :--- | | 0 to 30 days | 60,416 | 18,909 | | 31 to 60 days | 8,334 | 16,889 | | 61 to 90 days | 2,145 | 5,956 | | 91 to 180 days | 2,194 | 4,477 | | Over 180 days | 322 | 99 | | **Total** | **73,411** | **46,330** | - The Group's credit terms granted to customers have been extended from **90 days in 2024 to 90 to 150 days in 2025**[35](index=35&type=chunk) Bank Borrowings | Indicator | June 30, 2025 (HK$'000) | December 31, 2024 (HK$'000) | | :--- | :--- | :--- | | Bank borrowings | 23 | 8,701 | | Effective annual interest rate | 3.75% | 3.75% to 4.38% | [Disposal of a Subsidiary](index=16&type=section&id=Disposal%20of%20a%20Subsidiary) On June 25, 2024, Cheer Beauty Services Limited ceased to be a subsidiary due to bondholders exercising exchangeable bonds, resulting in a loss of HK$2,431 thousand and a net cash outflow from investing activities of HK$23,510 thousand - On **June 25, 2024**, Cheer Beauty Services Limited ceased to be a subsidiary of the Company due to bondholders exercising exchangeable bonds[42](index=42&type=chunk) - The disposal resulted in a **loss of HK$2,431 thousand**[43](index=43&type=chunk) - The disposal of Cheer Beauty Services Limited resulted in a **net cash outflow from investing activities totaling HK$23,510 thousand**[43](index=43&type=chunk) [Share Capital and Related Party Transactions](index=17&type=section&id=Share%20Capital%20and%20Related%20Party%20Transactions) As of June 30, 2025, issued share capital increased to HK$23,040 thousand, primarily due to the placement of 19,200,000 new shares, with a loan from a former director included in other payables Share Capital Details | Item | June 30, 2025 (Number of Shares) | December 31, 2024 (Number of Shares) | | :--- | :--- | :--- | | Issued and fully paid share capital (end of period) | 115,200,000 | 96,000,000 | | Placement of shares | 19,200,000 | – | | Ordinary shares issued under rights issue | – | 72,000,000 | - On **April 28, 2025**, the company placed **19,200,000 ordinary shares** at HK$0.27 per share, raising net proceeds of approximately **HK$5.1 million**[46](index=46&type=chunk) - A loan of **HK$540 thousand** from former director Mr. Wang Rong was reclassified to "other payables and accrued charges" as of June 30, 2025, following his resignation[47](index=47&type=chunk) [Management Discussion and Analysis](index=19&type=section&id=Management%20Discussion%20and%20Analysis) This section provides management's perspective on the company's financial performance, business operations, liquidity, and capital resources for the reporting period [Financial Review](index=19&type=section&id=Financial%20Review) Revenue significantly decreased by 69.5% to HK$140.6 million, and gross profit fell 80.7% to HK$4.5 million, primarily due to subsidiary disposal and expiring cleaning contracts, while other income grew due to management fees, but net other gains declined - Revenue decreased by **69.5%** to approximately **HK$140.6 million** in the reporting period from approximately HK$461.2 million in the same period of 2024[50](index=50&type=chunk) - Gross profit decreased by **80.7%** from approximately HK$23.4 million to approximately **HK$4.5 million**, with gross margin falling from approximately **5.1% to 3.2%**[50](index=50&type=chunk) - Other income increased by **381.3%** to approximately **HK$8.8 million**, mainly from support management fees of approximately **HK$8.25 million** from a former subsidiary[50](index=50&type=chunk) - Net loss after tax was approximately **HK$2.8 million**, compared to a net profit of approximately HK$6.9 million in the prior year, primarily due to reduced business scale and lower net gain on disposal of machinery and equipment[51](index=51&type=chunk) [Business Review and Outlook](index=20&type=section&id=Business%20Review%20and%20Outlook) As a Hong Kong environmental services provider, the company faces intense competition, labor shortages, and high operating costs, but is expanding into the online gaming industry, having signed multiple licensing agreements and recorded substantial revenue - The Group primarily provides four types of environmental hygiene services: cleaning services, pest management services, waste management and recycling services, and horticultural services[52](index=52&type=chunk) - The environmental hygiene services industry faces challenges including **intense competition, labor shortages, and high operating costs** (insurance, labor, vehicle expenses, legal and professional fees)[52](index=52&type=chunk) - The Group expanded its principal business into the online gaming industry for the first time, recording segment revenue of approximately **HK$43.8 million** and segment profit of approximately **HK$3.4 million** during the reporting period[53](index=53&type=chunk) [Liquidity, Financial and Capital Resources](index=21&type=section&id=Liquidity,%20Financial%20and%20Capital%20Resources) As of June 30, 2025, the company held approximately HK$44.7 million in cash and cash equivalents, with bank borrowings significantly reduced to HK$23 thousand, a current ratio of approximately 4.5 times, and maintained a net cash position, funding operations through cash flow, existing cash, borrowings, and equity fundraising Liquidity Key Data | Indicator | June 30, 2025 (HK$'000) | December 31, 2024 (HK$'000) | | :--- | :--- | :--- | | Cash and cash equivalents | 44,725 | 58,994 | | Total bank borrowings | 23 | 8,701 | | Bank balances and cash and pledged bank balances | 62,400 | 76,700 | | Current ratio | 4.5 times | 3.7 times | - The Group was in a **net cash position** as of both June 30, 2025, and December 31, 2024[54](index=54&type=chunk) - The Group's operations are primarily funded by operating cash flows, existing cash and bank balances, bank and other borrowings, lease liabilities, and proceeds from the Company's equity fundraising activities[55](index=55&type=chunk) [Capital Structure and Risk Management](index=22&type=section&id=Capital%20Structure%20and%20Risk%20Management) As of June 30, 2025, share capital attributable to owners was approximately HK$23.0 million, with equity at HK$125.6 million; the Group pledged trade receivables, bank deposits, and vehicles as loan collateral, faces no significant foreign exchange risk, and contingent liabilities primarily consist of performance bonds with no expected material claims Capital Structure Key Data | Indicator | June 30, 2025 (HK$ million) | December 31, 2024 (HK$ million) | | :--- | :--- | :--- | | Share capital attributable to owners of the Company | 23.0 | 19.2 | | Equity attributable to owners of the Company | 125.6 | 127.2 | - The Group has pledged **trade receivables, bank deposits, and vehicles** as collateral for borrowings[57](index=57&type=chunk) - The Group does not face **significant foreign exchange risk**[58](index=58&type=chunk) - Contingent liabilities include approximately **HK$40.6 million** in bank performance bonds and approximately **HK$8.5 million** in insurance company performance bonds[59](index=59&type=chunk) [Corporate Governance and Other Information](index=23&type=section&id=Corporate%20Governance%20and%20Other%20Information) This section details the company's corporate governance practices, significant investments, capital commitments, employee information, use of proceeds, shareholder details, board changes, and post-reporting period events [Significant Investments and Transactions](index=23&type=section&id=Significant%20Investments%20and%20Transactions) During the reporting period, the company disposed of Cheer Beauty Services Limited at a loss, sold vehicles, and entered into multiple online game licensing agreements, which, when aggregated, constituted a discloseable transaction, marking the company's expansion into the online gaming industry - On **June 25, 2024**, bondholders exercised their exchange rights, converting exchangeable bonds into all issued shares of Cheer Beauty Services Limited, which ceased to be a subsidiary of the Company[61](index=61&type=chunk) - On **June 24, 2024**, the company disposed of **163 specialized cleaning vehicles** for a consideration of **HK$19,000,000**, constituting a discloseable transaction[62](index=62&type=chunk) - The company entered into multiple exclusive online game licensing agreements, granting rights to promote, operate, publish, reproduce, and distribute licensed games, which, when aggregated, constituted a discloseable transaction[63](index=63&type=chunk)[64](index=64&type=chunk) [Capital Commitments and Employees](index=25&type=section&id=Capital%20Commitments%20and%20Employees) As of June 30, 2025, the Group had no significant capital commitments and employed approximately 657 staff, with remuneration policies based on market terms, offering discretionary bonuses and other benefits - As of **June 30, 2025**, the Group had **no significant capital commitments**[65](index=65&type=chunk) Number of Employees | Date | Number of Employees | | :--- | :--- | | June 30, 2025 | Approximately 657 | | December 31, 2024 | Approximately 645 | - Remuneration policies are determined by reference to market terms and individual employee performance, qualifications, and experience, offering discretionary bonuses, medical insurance, retirement benefits, and other allowances[66](index=66&type=chunk) [Use of Proceeds and Share Issuances](index=26&type=section&id=Use%20of%20Proceeds%20and%20Share%20Issuances) Net proceeds of approximately HK$41.7 million from the 2024 rights issue were primarily allocated for performance bonds and vehicle purchases, with some funds utilized; net proceeds of approximately HK$5.08 million from the 2025 share placement were fully used for business operations and general working capital Use of Net Proceeds from Rights Issue (As of June 30, 2025) | Purpose | Original Net Proceeds (HK$ million) | Utilized (HK$ million) | Unutilized (HK$ million) | | :--- | :--- | :--- | :--- | | Funds reserved for performance bonds | 26.0 | 15.1 | 10.9 | | Purchase of additional vehicles | 6.6 | 0 | 6.6 | | Repayment of bank loans and payables | 4.8 | 4.8 | 0 | | Business operations and general administrative expenses | 3.9 | 3.9 | 0 | | **Total** | **41.7** | **23.8** | **17.5** | - Net proceeds of approximately **HK$5.08 million** from the 2025 share placement have been **fully utilized** for the Group's business operations and general working capital[69](index=69&type=chunk) [Shareholder Information and Board Interests](index=28&type=section&id=Shareholder%20Information%20and%20Board%20Interests) As of June 30, 2025, no directors or chief executives held discloseable interests in the company's shares, with major shareholders including Mr. Tam Wai Tong (20.76%), Yongxin Global Investment Limited (11.03%), He Hangyu (10.79%), and Ye Yongchun (9.78%) - As of **June 30, 2025**, no directors or chief executives of the company held any interests or short positions in the shares, underlying shares, or debentures of the company or any of its associated corporations that were required to be disclosed to the company and the Stock Exchange[72](index=72&type=chunk) Major Shareholders' Interests in Shares (As of June 30, 2025) | Shareholder Name | Nature of Interest | Approximate Shareholding | Number of Ordinary Shares | | :--- | :--- | :--- | :--- | | Mr. Tam Wai Tong | Beneficial interest | 20.76% | 23,920,000 | | Yongxin Global Investment Limited | Beneficial interest | 11.03% | 12,702,000 | | He Hangyu | Beneficial interest | 10.79% | 12,434,000 | | Ye Yongchun | Beneficial interest | 9.78% | 11,262,500 | [Corporate Governance Practices and Board Changes](index=29&type=section&id=Corporate%20Governance%20Practices%20and%20Board%20Changes) The company adheres to GEM Listing Rules on corporate governance, but board changes, including Mr. Wang Rong's resignation and Mr. Chow Yun Cheung's re-designation, resulted in an insufficient number of independent non-executive directors, non-compliant with GEM Listing Rules 5.05 and 5.28 - The company has adopted a code of conduct for directors' securities transactions and complies with the Corporate Governance Code set out in Appendix C1 of the GEM Listing Rules[74](index=74&type=chunk)[75](index=75&type=chunk) - Mr. Wang Rong resigned as an executive director on **June 9, 2025**[76](index=76&type=chunk) - Mr. Chow Yun Cheung was re-designated from an independent non-executive director to an executive director on **June 9, 2025**, leading to an **insufficient number of independent non-executive directors**, non-compliant with GEM Listing Rules 5.05 and 5.28[76](index=76&type=chunk)[77](index=77&type=chunk) - The composition and chairmanship of the Audit Committee, Remuneration Committee, and Nomination Committee have all changed[78](index=78&type=chunk)[79](index=79&type=chunk)[80](index=80&type=chunk) [Events After the Reporting Period](index=32&type=section&id=Events%20After%20the%20Reporting%20Period) No other significant events occurred after the reporting period up to the date of this report, beyond those already disclosed - Except as otherwise disclosed in this report, no other significant events occurred after the reporting period and up to the date of this report[81](index=81&type=chunk)

Company Information [Board of Directors](index=5&type=section&id=Board%20of%20Directors) This section lists the Board of Directors of Mingfa Group (International) Company Limited, including executive, non-executive (and Chairman), and independent non-executive directors - Executive Directors include Mr. Wu Wen Feng and Ms. Shang Xuan[10](index=10&type=chunk) - Dr. Lam Ka Lai serves as the Non-executive Director and Chairman of the Board[10](index=10&type=chunk) - Independent Non-executive Directors include Mr. Liu Jian Han, Mr. Zhu Jian Hong, and Mr. Chen Cheng Li[10](index=10&type=chunk) [Committees](index=5&type=section&id=Committees) This section details the composition of the company's key committees, including the Audit, Nomination, Remuneration, and Risk Management Committees, along with their members and chairpersons - The Audit Committee is chaired by Mr. Zhu Jian Hong, with members Mr. Liu Jian Han and Mr. Chen Cheng Li[10](index=10&type=chunk) - The Nomination Committee is chaired by Mr. Chen Cheng Li, with Ms. Shang Xuan appointed as a member and Mr. Liu Jian Han resigning, both effective June 24, 2025[10](index=10&type=chunk) - The Remuneration Committee is chaired by Mr. Liu Jian Han, with members Mr. Zhu Jian Hong and Mr. Chen Cheng Li[10](index=10&type=chunk) - The Risk Management Committee is chaired by Mr. Chen Cheng Li, with members Mr. Liu Jian Han and Mr. Zhu Jian Hong[10](index=10&type=chunk) [Contact and Professional Advisors](index=5&type=section&id=Contact%20and%20Professional%20Advisors) This section provides the company's main contact information and professional advisor details, including the company secretary, registered office, principal place of business, stock code, principal bankers, and auditors - The Company Secretary is Mr. Poon Wing Chuen[10](index=10&type=chunk) - The Company's website is http://www.ming-fa.com, and its stock code on The Stock Exchange of Hong Kong Limited (Main Board) is 846[11](index=11&type=chunk) - The auditors are BDO Limited, Hong Kong[12](index=12&type=chunk) Financial Highlights The Group's revenue for the six months ended June 30, 2025, decreased by **28.6%** year-on-year, turning from profit to a loss attributable to owners of the Company of approximately **RMB 273.1 million**, with basic and diluted loss per share of **RMB 4.5 cents** [Financial Highlights for the Six Months Ended June 30, 2025](index=7&type=section&id=Financial%20Highlights%20for%20the%20Six%20Months%20Ended%20June%2030%2C%202025) | Metric | 2025 (RMB million) | 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 2,725.7 | 3,815.4 | (28.6)% | | Loss/Profit attributable to owners of the Company | (273.1) | 6.7 | (4,196.8)% | | Basic and diluted loss/earnings per share (RMB cents) | (4.5) | 0.1 | (4,600.0)% | Management Discussion and Analysis The Group faced severe market challenges in the first half of 2025, experiencing significant declines in revenue and profitability primarily due to reduced property delivery area and lower gross profit margins; while initial signs of recovery emerged in China's residential property market, developer debt and oversupply issues persist, the Group continues to implement prudent financial principles and focus its business on the Yangtze River Delta region [Performance Overview](index=8&type=section&id=Performance%20Overview) The Group's revenue for the first half of 2025 decreased by **28.6%** year-on-year, turning from profit to a loss attributable to owners of the Company of approximately **RMB 273.1 million**, with basic and diluted loss per share of **RMB 4.5 cents**, and the Board does not recommend an interim dividend [Performance Overview for the First Half of 2025](index=8&type=section&id=Performance%20Overview%20for%20the%20First%20Half%20of%202025) | Metric | 2025 (RMB million) | 2024 (RMB million) | Change | | :--- | :--- | :--- | :--- | | Consolidated Revenue | 2,725.7 | 3,815.4 | decreased 28.6% | | Loss/Profit attributable to owners of the Company | (273.1) | 6.7 | decreased by approximately **4.2 times** | | Basic and diluted loss/earnings per share (RMB cents) | (4.5) | 0.1 | decreased by **4.6 times** | - The Board does not recommend the payment of any interim dividend for the six months ended June 30, 2025[16](index=16&type=chunk) [Industry Review](index=8&type=section&id=Industry%20Review) In the first half of 2025, China's residential property market showed initial signs of recovery after a sharp decline in 2024, with a **30% increase** in new home sales volume, but prices fell by approximately **5%** year-on-year, and developer debt and oversupply issues remain - China's residential property market showed initial signs of recovery in the first half of 2025, driven by lower mortgage rates and government incentives, with new home sales volume increasing by **30%**[17](index=17&type=chunk) - Property prices fell by approximately **5%** year-on-year, affecting both luxury and mass-market segments; rental yields increased by **5%**, attracting investors amid ongoing market uncertainty[17](index=17&type=chunk) - Despite persistent developer debt issues and housing oversupply, policy support and stabilizing interest rates are helping to restore some market confidence, laying the groundwork for a gradual recovery in the second half of the year[17](index=17&type=chunk) [Business Review](index=9&type=section&id=Business%20Review) The Group's revenue and gross profit significantly declined in the first half of 2025, primarily due to reduced total gross floor area delivered and a decrease in gross profit margin; fair value losses on investment properties increased, but net other income turned positive due to higher gains from disposal of investment properties, while selling and marketing costs and general and administrative expenses both decreased [Sales and Profitability Overview for the First Half of 2025](index=9&type=section&id=Sales%20and%20Profitability%20Overview%20for%20the%20First%20Half%20of%202025) | Metric | 2025 (RMB million) | 2024 (RMB million) | Change | | :--- | :--- | :--- | :--- | | Consolidated Revenue | 2,725.7 | 3,815.4 | (28.6)% | | Attributable GFA delivered (square meters) | 418,551.9 | 551,939.1 | decreased | | Gross profit margin | 23.6% | 31.9% | decreased | | Consolidated Gross Profit | 642.2 | 1,219.0 | (47.3)% | | Fair value loss on investment properties | 396.6 | 259.1 | increased | | Net other income | 149.2 | (39.3) | turned positive | | Selling and marketing costs | 199.2 | 226.6 | (12.1)% | | General and administrative expenses | 254.0 | 308.5 | (17.7)% | | Interest expense on borrowings (including capitalized interest) | 43.7 | 58.9 | (25.8)% | | Consolidated loss attributable to owners of the Company | 273.1 | 6.7 (profit) | decreased **4.2 times** | | Average selling price per square meter (RMB) | 5,493.6 | 6,146.1 | (10.6)% | [Contracted Sales](index=10&type=section&id=Contracted%20Sales) The Group's contracted sales value for the first half of 2025 decreased by **17.2%** year-on-year, and the average selling price also declined [Contracted Sales Data for the First Half of 2025](index=10&type=section&id=Contracted%20Sales%20Data%20for%20the%20First%20Half%20of%202025) | Metric | 2025 | 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Contracted sales value (RMB million) | 1,423.0 | 1,718.8 | (17.2)% | | Average contracted selling price (RMB/square meter) | 6,223.0 | 6,385.0 | (2.5)% | [Properties Pre-sold](index=11&type=section&id=Properties%20Pre-sold) As at June 30, 2025, the Group's total attributable gross floor area of properties pre-sold but not yet delivered was **652,928 square meters**, a decrease from the end of 2024 - As at June 30, 2025, the total attributable gross floor area of properties pre-sold but not yet delivered to buyers was **652,928 square meters**, a decrease from **823,507 square meters** as at December 31, 2024[24](index=24&type=chunk) - Pre-sold properties are primarily located in Shenyang, Changsha, Jinzhai, Zhangzhou, Wujiang, Quanzhou, Nanjing, Hefei, Nan'an, Xiamen, and other cities[24](index=24&type=chunk) [Land Bank Summary](index=12&type=section&id=Land%20Bank%20Summary) As at June 30, 2025, the Group's total attributable land bank decreased by **7.4%** to approximately