[Financial Summary](index=1&type=section&id=Financial%20Summary) During the reporting period, the company's revenue and gross profit both significantly decreased by over 44%, while loss for the period narrowed by 37.9% year-on-year, though net loss margin slightly expanded, and the number of restaurants decreased from 21 to 16 Key Financial Data (For the six months ended June 30) | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | Change % | | :--- | :--- | :--- | :--- | | Revenue | 101,801 | 182,379 | (44.2%) | | Gross Profit | 65,741 | 118,969 | (44.7%) | | Gross Profit Margin | 64.6% | 65.2% | (0.6%) | | Loss for the Period | (18,253) | (29,403) | (37.9%) | | Net Loss Margin | (17.9%) | (16.1%) | (1.8%) | | Number of Restaurants | 16 | 21 | - | - During the reporting period, the company's revenue and gross profit both significantly decreased by **over 44%**, while loss for the period narrowed by **37.9%** year-on-year, though net loss margin slightly expanded, and the number of restaurants decreased from **21 to 16**[3](index=3&type=chunk) [Condensed Consolidated Financial Statements](index=2&type=section&id=Interim%C3%AF%C2%BF%C2%BD%C3%AF%C2%BF%C2%BD%C3%AF%C2%BF%C2%BD%C3%AF%C2%BF%C2%BD) This section presents the unaudited condensed consolidated statement of profit or loss and other comprehensive income and condensed consolidated statement of financial position for the six months ended June 30, 2025, along with related notes detailing the basis of preparation, accounting policies, and specific financial items [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=2&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) During the reporting period, the company's revenue significantly decreased by 44.2%, leading to a 44.7% year-on-year reduction in gross profit; despite decreases in selling and distribution expenses and administrative expenses, loss for the period was RMB18,253 thousand, a narrowing from the prior year Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (For the six months ended June 30) | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Revenue | 101,801 | 182,379 | | Cost of Sales | (36,060) | (63,410) | | Gross Profit | 65,741 | 118,969 | | Other Income | 471 | 1,737 | | Other Gains and Losses | 2,300 | (2,139) | | Selling and Distribution Expenses | (74,877) | (125,812) | | Administrative Expenses | (9,370) | (17,016) | | Finance Costs | (2,474) | (4,127) | | Loss Before Tax | (18,209) | (28,388) | | Income Tax Expense | (44) | (1,015) | | Loss for the Period | (18,253) | (29,403) | | Loss for the Period Attributable to Owners of the Company | (18,248) | (29,438) | | Basic and Diluted Loss Per Share | RMB(0.80) cents | RMB(1.35) cents | [Condensed Consolidated Statement of Financial Position](index=3&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, both non-current and current assets of the Group decreased, leading to a reduction in total assets; while current liabilities slightly decreased, net current liabilities and net total liabilities remained negative, indicating liquidity pressure for the Group Condensed Consolidated Statement of Financial Position (As of June 30, 2025) | Metric | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | **Non-current Assets** | | | | Property and Equipment | 14,125 | 17,215 | | Right-of-use Assets | 40,679 | 50,871 | | Intangible Assets | 860 | 965 | | Long-term Lease Deposits | 17,284 | 18,586 | | Deferred Tax Assets | 11,009 | 11,009 | | **Total Non-current Assets** | **83,957** | **98,646** | | **Current Assets** | | | | Inventories | 2,382 | 5,478 | | Trade Receivables | 2,329 | 3,453 | | Prepayments, Deposits and Other Receivables | 18,565 | 16,448 | | Amounts Due from Related Parties | 157 | 3,809 | | Restricted Bank Deposits | 3,638 | 6,224 | | Cash and Cash Equivalents | 1,061 | 3,689 | | **Total Current Assets** | **28,132** | **39,101** | | **Current Liabilities** | | | | Trade Payables | 76,333 | 65,100 | | Other Payables and Accruals | 92,775 | 88,832 | | Borrowings | 10,000 | 21,400 | | Financial Liabilities Measured at Fair Value | 9,453 | 11,898 | | Amounts Due to Related Parties | 23,258 | 23,696 | | Contract Liabilities | 8,320 | 8,952 | | Lease Liabilities | 26,636 | 28,479 | | **Total Current Liabilities** | **246,775** | **248,357** | | **Net Current Liabilities** | **(218,643)** | **(209,256)** | | **Total Assets Less Current Liabilities** | **(134,686)** | **(110,610)** | | **Non-current Liabilities** | | | | Lease Liabilities | 31,225 | 45,324 | | Provision for Restoration | 3,693 | 3,693 | | **Total Non-current Liabilities** | **34,918** | **49,017** | | **Net Liabilities** | **(169,604)** | **(159,627)** | | **Share Capital and Deficit** | | | | Share Capital | 22,511 | 18,393 | | Other Deficits | (193,716) | (179,624) | | Deficit Attributable to Owners of the Company | (171,205) | (161,231) | | Non-controlling Interests | 1,601 | 1,604 | | **Total Deficit** | **(169,604)** | **(159,627)** | [Notes to the Condensed Consolidated Financial Statements](index=5&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) This section elaborates on the basis of preparation and accounting policies for the condensed consolidated financial statements, providing specific explanations and analyses for key financial items including revenue, operating segments, other income, other gains and losses, finance costs, income tax expense, loss for the period, dividends, loss per share, trade receivables, trade payables, borrowings, share capital, and commitments [Basis of Preparation](index=5&type=section&id=1.%20Basis%20of%20Preparation) The condensed consolidated financial statements are prepared in accordance with IAS 34 and the HKEX Listing Rules, based on a going concern assumption; despite significant uncertainties including current liabilities exceeding current assets, total liabilities exceeding total assets, and insufficient cash and cash equivalents, the Board believes the Group will have sufficient liquidity to continue operations through new borrowings, refinancing, new capital, deferred lease payments, and cost controls - The Group faces significant going concern uncertainties, including current liabilities exceeding current assets by approximately **RMB218,643 thousand**, total liabilities exceeding total assets by approximately **RMB169,604 thousand**, and cash and cash equivalents of approximately **RMB1,061 thousand**[8](index=8&type=chunk) - The Board, based on cash flow forecasts and assuming successful negotiation of new borrowings, refinancing, introduction of new capital, deferral of lease payments, and implementation of cost controls, believes the Group can maintain its going concern[8](index=8&type=chunk)[9](index=9&type=chunk)[10](index=10&type=chunk) [Accounting Policies](index=6&type=section&id=2.%20Accounting%20Policies) The condensed consolidated financial statements are prepared on a historical cost basis, except for certain financial instruments measured at fair value; the amendments to IAS 21 'Lack of Exchangeability' were first applied this period, with no significant impact on financial position or performance - The condensed consolidated financial statements are prepared on a historical cost basis, except for certain financial instruments measured at fair value[12](index=12&type=chunk) - The application of the revised IFRS accounting standards during this interim period had no significant impact on the Group's financial position and performance for the current and prior periods, and/or the disclosures in these condensed consolidated financial statements[13](index=13&type=chunk) [Revenue](index=7&type=section&id=3.%20Revenue) The Group's revenue primarily derives from restaurant operations, with restaurant operating revenue of RMB101,784 thousand and packaged food sales revenue of only RMB17 thousand during the reporting period, resulting in a significant year-on-year decrease in total revenue Revenue Breakdown (For the six months ended June 30) | Type of Goods or Services | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Restaurant Operations | 101,784 | 179,637 | | Packaged Food Sales | 17 | 2,742 | | **Total** | **101,801** | **182,379** | [Operating Segments](index=7&type=section&id=4.%20Operating%20Segments) The Group operates as a single reportable segment, 'Shanghai Xiao Nan Guo Holdings Business,' encompassing brands such as Shanghai Xiao Nan Guo, Nan Xiao Guan, and Wolfgang Puck; operations are primarily concentrated in Mainland China and Hong Kong, with Mainland China contributing the vast majority of revenue and non-current assets - The Group operates as a single business unit based on brands and services, with only one reportable segment, the Shanghai Xiao Nan Guo Holdings Business, which includes Shanghai Xiao Nan Guo, Nan Xiao Guan, and Wolfgang Puck[16](index=16&type=chunk)[17](index=17&type=chunk) Geographical Revenue and Non-current Assets (For the six months ended June 30) | Region | 2025 Revenue (RMB thousands) | 2024 Revenue (RMB thousands) | Non-current Assets as of June 30, 2025 (RMB thousands) | Non-current Assets as of December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | :--- | :--- | | People's Republic of China | 98,628 | 157,094 | 55,311 | 66,939 | | Hong Kong | 3,173 | 25,285 | 353 | 2,112 | | **Total** | **101,801** | **182,379** | **55,664** | **69,051** | [Other Income](index=8&type=section&id=5.%20Other%20Income) During the reporting period, the Group's other income significantly decreased from RMB1,737 thousand in the prior year to RMB471 thousand in 2025, primarily due to the absence of management fee income and a reduction in other income Other Income (For the six months ended June 30) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Management Fee Income | – | 683 | | Interest Income | 25 | 53 | | Other | 446 | 1,001 | | **Total** | **471** | **1,737** | [Other Gains and Losses](index=8&type=section&id=6.%20Other%20Gains%20and%20Losses) During the reporting period, the Group's other gains and losses shifted from a loss to a gain, primarily driven by gains from early lease termination and disposal of property and equipment, alongside a reduction in fair value losses on financial liabilities Other Gains and Losses (For the six months ended June 30) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Net Exchange Differences | (58) | (3) | | Fair Value Loss on Financial Liabilities Measured at Fair Value | (915) | (5,165) | | Gain on Early Lease Termination | 2,821 | 4,780 | | Gain (Loss) on Disposal of Property and Equipment | 452 | (127) | | Impairment Loss Recognized for Property and Equipment | – | (2,271) | | Gain on Deregistration of Subsidiaries and Branches | – | 189 | | Gain on Disposal of Subsidiaries | – | 458 | | **Total** | **2,300** | **(2,139)** | [Finance Costs](index=8&type=section&id=7.%20Finance%20Costs) During the reporting period, the Group's finance costs significantly decreased year-on-year, primarily due to a reduction in interest on lease liabilities Finance Costs (For the six months ended June 30) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Interest on Bank Loans | 412 | 412 | | Interest on Lease Liabilities | 2,062 | 3,715 | | **Total** | **2,474** | **4,127** | [Income Tax Expense](index=9&type=section&id=8.%20Income%20Tax%20Expense) During the reporting period, the Group's income tax expense significantly decreased, primarily due to a reduction in China corporate income tax; subsidiaries in Hong Kong, the Cayman Islands, and the British Virgin Islands are exempt from income tax Income Tax Expense (For the six months ended June 30) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | China Corporate Income Tax | 44 | 933 | | Deferred Tax | – | 82 | | **Total** | **44** | **1,015** | - Subsidiaries in Hong Kong, the Cayman Islands, and the British Virgin Islands are not subject to taxation[25](index=25&type=chunk)[26](index=26&type=chunk) [Loss for the Period](index=9&type=section&id=9.%20Loss%20for%20the%20Period) During the reporting period, the Group's loss for the period was primarily impacted by inventory costs, depreciation and amortization, and employee benefit expenses Items Deducted in Loss for the Period (For the six months ended June 30) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Cost of Inventories Recognized as Expense | 36,060 | 63,410 | | Depreciation of Property and Equipment | 2,934 | 7,032 | | Depreciation of Right-of-use Assets | 14,620 | 25,775 | | Amortization of Intangible Assets | 105 | 413 | | Employee Benefit Expenses | 44,835 | 72,057 | [Dividends](index=9&type=section&id=10.%20Dividends) During the reporting period, the company neither paid, declared, nor proposed any dividends - The Company neither paid, declared, nor proposed any dividends during the interim period, and the Company's directors have decided not to pay dividends for the interim period[28](index=28&type=chunk) [Loss Per Share](index=10&type=section&id=11.%20Loss%20Per%20Share) During the reporting period, basic and diluted loss per share attributable to owners of the company was RMB(0.80) cents, a narrowing from RMB(1.35) cents in the prior year Loss Per Share Calculation Data (For the six months ended June 30) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Loss for the Period Attributable to Owners of the Company (RMB thousands) | (18,248) | (29,438) | | Weighted Average Number of Ordinary Shares (thousands of shares) | 2,271,719 | 2,183,355 | | **Basic and Diluted Loss Per Share** | **RMB(0.80) cents** | **RMB(1.35) cents** | [Trade Receivables](index=10&type=section&id=12.%20Trade%20Receivables) As of June 30, 2025, net trade receivables amounted to RMB2,329 thousand, a decrease from the end of 2024; the Group primarily settles through cash, credit cards, Alipay, and WeChat, while strictly controlling credit risk Trade Receivables (RMB thousands) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Trade Receivables | 3,309 | 4,434 | | Less: Provision for Credit Losses | (980) | (981) | | **Net Amount** | **2,329** | **3,453** | Ageing Analysis of Trade Receivables (RMB thousands) | Ageing | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | 0 to 30 days | 608 | 921 | | 31 to 60 days | 584 | 52 | | 61 to 90 days | 50 | 12 | | Over 90 days | 1,087 | 2,468 | | **Total** | **2,329** | **3,453** | [Trade Payables](index=11&type=section&id=13.%20Trade%20Payables) As of June 30, 2025, trade payables amounted to RMB76,333 thousand, an increase from the end of 2024, with an average credit period of 90 days Trade Payables (RMB thousands) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Trade Payables | 76,333 | 65,100 | Ageing Analysis of Trade Payables (RMB thousands) | Ageing | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | 0 to 90 days | 30,300 | 34,254 | | 91 to 365 days | 35,970 | 24,111 | | Over one year | 10,063 | 6,735 | | **Total** | **76,333** | **65,100** | [Borrowings](index=11&type=section&id=14.%20Borrowings) During the reporting period, the Group repaid bank loans of RMB11,400 thousand, drew no new loans, and renewed existing bank facilities of RMB5,000 thousand - During this interim period, the Group repaid bank loans of **RMB11,400 thousand**, drew no new loans, and renewed existing bank facilities with a principal amount of **RMB5,000 thousand**[36](index=36&type=chunk) [Share Capital](index=12&type=section&id=15.%20Share%20Capital) As of June 30, 2025, the company's issued and fully paid share capital increased to RMB22,511 thousand, primarily due to the issuance of 442,606 thousand ordinary shares through a placing Changes in Share Capital (RMB thousands) | Item | June 30, 2025 (thousands of shares) | December 31, 2024 (thousands of shares) | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | :--- | :--- | | Issued and Fully Paid at Beginning/End of Period | 2,213,031 | 2,213,031 | 18,393 | 18,393 | | Shares Issued under Placing | 442,606 | – | 4,118 | – | | **Issued and Fully Paid at End/Beginning of Period** | **2,655,637** | **2,213,031** | **22,511** | **18,393** | - On June 6, 2025, the company allotted and issued **442,606,000** ordinary shares through a placing, with gross proceeds of **RMB8,248 thousand**, of which **RMB4,118 thousand** was credited to the company's share capital[37](index=37&type=chunk) [Commitments](index=12&type=section&id=16.%20Commitments) As of June 30, 2025, the Group's contracted but unprovided capital commitments primarily relate to capital expenditure for leasehold improvements, amounting to RMB2,978 thousand, a decrease from the end of 2024 Capital Commitments (RMB thousands) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Capital Expenditure for Leasehold Improvements | 2,978 | 4,169 | [Management Discussion and Analysis](index=13&type=section&id=Management%20Discussion%20and%20Analysis) This section reviews the Group's business performance and financial position for the reporting period, detailing changes in revenue, costs, expenses, and cash flows, and discusses new share placement, foreign currency risk, capital commitments, human resources, and future development strategies [Business Review](index=13&type=section&id=Business%20Review) During the reporting period, the Group's revenue significantly decreased by 44.2% to RMB101.8 million, primarily due to reduced restaurant business revenue and fewer outlets; as of June 30, 2025, the Group operated 16 restaurants, a decrease of 5 from the prior year - The Group's revenue reached **RMB101.8 million**, a decrease of **RMB80.6 million** or **44.2%** from **RMB182.4 million** in the prior year; gross profit reached **RMB65.7 million**, a decrease of approximately **RMB53.3 million** or **44.7%** from **RMB119.0 million** in the prior year[39](index=39&type=chunk) - As of June 30, 2025, the Group operated **16 restaurants** (15 'Shanghai Xiao Nan Guo', 1 'Nan Xiao Guan'), a reduction from **21** in the prior year; all Hong Kong and other Mainland China brand (Wolfgang Puck) outlets have been closed[39](index=39&type=chunk)[41](index=41&type=chunk)[45](index=45&type=chunk) Revenue and Number of Restaurants by Region and Brand (For the six months ended June 30) | Region/Brand | 2025 Revenue (RMB thousands) | 2025 Number of Restaurants | 2024 Revenue (RMB thousands) | 2024 Number of Restaurants | | :--- | :--- | :--- | :--- | :--- | | Mainland China - Shanghai Xiao Nan Guo | 87,114 | 15 | 135,789 | 16 | | Mainland China - Nan Xiao Guan | 8,322 | 1 | 9,534 | 1 | | Mainland China - Other Brands | 3,175 | 0 | 9,029 | 1 | | Hong Kong - Shanghai Xiao Nan Guo | 3,173 | 0 | 13,671 | 1 | | Hong Kong - Nan Xiao Guan | 0 | 0 | 11,614 | 2 | | **Total Restaurant Business Revenue** | **101,784** | **16** | **179,637** | **21** | | Other Revenue | 17 | - | 2,742 | - | | **Total Revenue** | **101,801** | - | **182,379** | - | [Financial Review](index=14&type=section&id=Financial%20Review) This section provides a detailed analysis of changes in the Group's financial metrics during the reporting period, including revenue, cost of sales, other income, selling and distribution expenses, administrative expenses, other gains and losses, finance costs, income tax expense, and loss for the period, revealing trends of declining revenue, cost control, and narrowing losses [Revenue](index=14&type=section&id=Revenue%20(Financial%20Review)) The Group's total revenue decreased by 44.2% year-on-year to RMB101.8 million, with restaurant business revenue decreasing by 43.3%, primarily due to lower comparable restaurant sales and fewer outlets - The Group's revenue decreased by **RMB80.6 million** from **RMB182.4 million** for the six months ended June 30, 2024, to **RMB101.8 million** for the six months ended June 30, 2025, a decrease of **44.2%**[42](index=42&type=chunk) - Total restaurant business revenue decreased by **RMB77.8 million** from **RMB179.6 million** for the six months ended June 30, 2024, to **RMB101.8 million** for the six months ended June 30, 2025, a decrease of **43.3%**[43](index=43&type=chunk) - The primary reasons for the revenue decrease include a **RMB23.8 million** reduction in comparable restaurant sales, and a **RMB54.0 million** reduction in revenue due to fewer outlets and temporary closures for renovation[46](index=46&type=chunk) [Cost of Sales](index=14&type=section&id=Cost%20of%20Sales) Cost of sales decreased by 43.1% year-on-year to RMB36.1 million, but the percentage of cost of sales to revenue slightly increased to 35.4% - Cost of sales decreased by **RMB27.3 million** from **RMB63.4 million** for the six months ended June 30, 2024, to **RMB36.1 million** for the six months ended June 30, 2025, a decrease of **43.1%**[44](index=44&type=chunk) - The percentage of cost of sales to revenue slightly increased from **34.8%** for the six months ended June 30, 2024, to **35.4%** for the six months ended June 30, 2025[44](index=44&type=chunk) [Other Income](index=15&type=section&id=Other%20Income%20(Financial%20Review)) Other income decreased by RMB1.2 million year-on-year to RMB0.5 million - Other income decreased by **RMB1.2 million** from **RMB1.7 million** for the six months ended June 30, 2024, to **RMB0.5 million** for the six months ended June 30, 2025[47](index=47&type=chunk) [Selling and Distribution Expenses](index=15&type=section&id=Selling%20and%20Distribution%20Expenses) Selling and distribution expenses decreased by 40.5% year-on-year to RMB74.9 million, with both labor expenses and rental and property expenses declining, though their percentage of revenue increased; depreciation expense decreased by 46.0% year-on-year, with its percentage of revenue slightly decreasing - Selling and distribution expenses decreased by **RMB50.9 million** from **RMB125.8 million** for the six months ended June 30, 2024, to **RMB74.9 million** for the six months ended June 30, 2025, a decrease of **40.5%**[48](index=48&type=chunk) - Labor expenses decreased by **RMB25.6 million** from **RMB65.1 million** for the six months ended June 30, 2024, to **RMB39.5 million**; labor costs as a percentage of revenue increased from **35.7%** to **38.8%**[48](index=48&type=chunk) - Depreciation expense decreased by **RMB14.8 million** from **RMB32.2 million** for the six months ended June 30, 2024, to **RMB17.4 million**, a decrease of **46.0%**; depreciation expense as a percentage of revenue decreased from **17.7%** to **17.1%**[49](index=49&type=chunk) [Administrative Expenses](index=15&type=section&id=Administrative%20Expenses) Administrative expenses decreased by 44.7% year-on-year to RMB9.4 million - Administrative expenses decreased by **RMB7.6 million** from **RMB17.0 million** for the six months ended June 30, 2024, to **RMB9.4 million** for the six months ended June 30, 2025, a decrease of **44.7%**[50](index=50&type=chunk) [Other Gains and Losses](index=15&type=section&id=Other%20Gains%20and%20Losses%20(Financial%20Review)) Other gains and losses shifted from a loss to a gain of RMB2.3 million, primarily comprising gains from disposal of property and equipment, early lease termination, and fair value losses on financial liabilities - For the six months ended June 30, 2025, other gains and losses amounted to a gain of **RMB2.3 million**, primarily including a gain of **RMB0.5 million** from disposal of property and equipment, a gain of **RMB2.8 million** from early lease termination, and a fair value loss of **RMB0.9 million** on financial liabilities measured at fair value[51](index=51&type=chunk) [Finance Costs](index=15&type=section&id=Finance%20Costs%20(Financial%20Review)) Finance costs decreased by RMB1.7 million year-on-year to RMB2.5 million - For the six months ended June 30, 2025, finance costs were **RMB2.5 million**, a decrease of **RMB1.7 million** from the prior year[52](index=52&type=chunk) [Income Tax Expense](index=16&type=section&id=Income%20Tax%20Expense%20(Financial%20Review)) Income tax expense significantly decreased by RMB0.96 million year-on-year to RMB0.04 million - Income tax expense decreased by **RMB0.96 million** from **RMB1.0 million** for the six months ended June 30, 2024, to **RMB0.04 million** for the six months ended June 30, 2025[53](index=53&type=chunk) [Loss for the Period](index=16&type=section&id=Loss%20for%20the%20Period%20(Financial%20Review)) Loss for the period decreased by RMB11.1 million year-on-year to RMB18.3 million, but the net loss margin increased from 16.1% to 17.9% - The Group's loss for the reporting period decreased by **RMB11.1 million** from **RMB29.4 million** for the six months ended June 30, 2024, to **RMB18.3 million** for the six months ended June 30, 2025[54](index=54&type=chunk) - The net loss margin increased from **16.1%** for the six months ended June 30, 2024, to **17.9%** for the six months ended June 30, 2025[54](index=54&type=chunk) [Dividends Payable](index=16&type=section&id=Dividends%20Payable) As of June 30, 2025, the company had no outstanding dividends payable - As of June 30, 2025, there were no outstanding dividends payable[55](index=55&type=chunk) [Liquidity, Capital Resources and Cash Flows](index=16&type=section&id=Liquidity%2C%20Capital%20Resources%20and%20Cash%20Flows) The Group primarily meets its funding needs through bank borrowings and operating cash inflows; as of June 30, 2025, borrowings were RMB10.0 million, with a gearing ratio of 449.9%; net cash inflow from operating activities decreased year-on-year, and cash and cash equivalents significantly declined at period-end - As of June 30, 2025, the Group's borrowings amounted to **RMB10.0 million**, with a gearing ratio of **449.9%**[56](index=56&type=chunk) Condensed Consolidated Cash Flows (For the six months ended June 30) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Net Cash from Operating Activities | 17,341 | 22,637 | | Net Cash from (Used in) Investing Activities | 7,262 | (7,877) | | Net Cash Used in Financing Activities | (27,355) | (26,137) | | Net Decrease in Cash and Cash Equivalents | (2,752) | (11,377) | | Cash and Cash Equivalents at Beginning of Period | 3,689 | 20,658 | | Effect of Foreign Exchange Rate Changes | 124 | (839) | | Cash and Cash Equivalents at End of Period | 1,061 | 8,442 | [Operating Activities](index=17&type=section&id=Operating%20Activities) Net cash inflow from operating activities decreased by RMB5.3 million year-on-year to RMB17.3 million - Net cash inflow from operating activities decreased by **RMB5.3 million** from **RMB22.6 million** for the six months ended June 30, 2024, to **RMB17.3 million** for the six months ended June 30, 2025[58](index=58&type=chunk) [Investing Activities](index=17&type=section&id=Investing%20Activities) Investing activities shifted from a net cash outflow in the prior year to a net cash inflow of RMB7.3 million - For the six months ended June 30, 2025, net cash from investing activities was **RMB7.3 million**, compared to a net cash used in investing activities of **RMB7.9 million** in the prior year[59](index=59&type=chunk) [Financing Activities](index=17&type=section&id=Financing%20Activities) Net cash used in financing activities increased year-on-year to RMB27.4 million, primarily for repayment of bank loans, lease liabilities, and financial liabilities, while also receiving some funds from new share issuance - Net cash used in financing activities increased from **RMB26.1 million** for the six months ended June 30, 2024, to **RMB27.4 million** for the six months ended June 30, 2025[60](index=60&type=chunk) - During the reporting period, the Group received **RMB8.1 million** from the issuance of new shares, repaid bank loans of **RMB11.4 million**, lease liabilities of **RMB17.8 million**, and financial liabilities measured at fair value of **RMB4.5 million**[60](index=60&type=chunk) [Placing of New Shares Under General Mandate](index=17&type=section&id=Placing%20of%20New%20Shares%20Under%20General%20Mandate) On June 6, 2025, the company completed the placing of 442,606,000 ordinary shares at a placing price of HK$0.02 per share, with net proceeds of approximately HK$8.7 million fully utilized for the Group's general working capital - The placing was completed on June 6, 2025, with a total of **442,606,000** placing shares at a placing price of **HK$0.02** per ordinary share[61](index=61&type=chunk) - After deducting placing commissions and other related expenses, the net proceeds from the placing were approximately **HK$8.7 million**, which have been fully utilized for the Group's general working capital[61](index=61&type=chunk) [Foreign Currency Risk](index=17&type=section&id=Foreign%20Currency%20Risk) The Group faces minimal foreign exchange risk as its operating activities, including revenue and expenses, are not denominated in currencies different from the functional currency of its subsidiaries - The Group undertakes minimal foreign exchange risk as its operating activities (where revenue or expenses are denominated in a currency different from the functional currency of the Group's relevant subsidiaries) do not involve purchases denominated in currencies other than the functional currency of the relevant subsidiaries[62](index=62&type=chunk) [Capital Commitments](index=18&type=section&id=Capital%20Commitments) As of June 30, 2025, capital commitments were approximately RMB3.0 million, a decrease from RMB4.2 million at the end of 2024 - As of June 30, 2025, capital commitments were approximately **RMB3.0 million**, a decrease from **RMB4.2 million** as of December 31, 2024[63](index=63&type=chunk) [Pledge of Group Assets](index=18&type=section&id=Pledge%20of%20Group%20Assets) As of June 30, 2025, the Group had no pledged assets - As of June 30, 2025, the Group had no pledged assets[64](index=64&type=chunk) [Material Investment Matters](index=18&type=section&id=Material%20Investment%20Matters) During the reporting period, the Group did not undertake any material investment matters - For the six months ended June 30, 2025, the Group did not undertake any material investment matters[65](index=65&type=chunk) [Material Acquisitions and Disposals](index=18&type=section&id=Material%20Acquisitions%20and%20Disposals) During the reporting period, there were no material acquisitions or disposals by the Group, its subsidiaries, or associated companies - For the six months ended June 30, 2025, there were no material acquisitions or disposals by the Group, its subsidiaries, or associated companies[66](index=66&type=chunk) [Human Resources](index=18&type=section&id=Human%20Resources) As of June 30, 2025, the Group had approximately 181 employees, continuing its employment structure combining full-time staff, hourly workers, and trainees, while implementing incentive and assessment policies; total employee costs decreased year-on-year, but their proportion to revenue increased - As of June 30, 2025, the Group had approximately **181 employees** in Mainland China and Hong Kong[67](index=67&type=chunk) - In 2025, the Group continued to utilize a multi-dimensional employment structure of full-time employees, hourly workers, and trainees, established long-term cooperation plans with several domestic institutions, and continued to implement various established incentive and assessment policies[67](index=67&type=chunk) - For the six months ended June 30, 2025, total employee costs were **RMB44.8 million**, representing **44.0%** of revenue, a decrease from **RMB72.1 million** for the six months ended June 30, 2024[67](index=67&type=chunk) [Future Outlook](index=18&type=section&id=Future%20Outlook) Facing intense competition and evolving consumer demands in the catering industry, the Group plans to transform 'Shanghai Xiao Nan Guo' into a 'lifestyle brand centered on classic Benbang cuisine' by renovating existing stores, incorporating Haipai culture, refining signature dishes, developing new menu items, and designing set menus and service processes for various occasions - The catering industry faces fierce market competition, with consumers not only seeking delicious food but also emphasizing dining environment, social attributes, cultural identity, 'check-in' sharing experiences, and increasingly, price[68](index=68&type=chunk) - The Group plans to renovate existing stores in the future, designing them to be more modern and brighter, incorporating Haipai cultural elements, and enhancing social and 'check-in' attributes to attract a broader customer base[68](index=68&type=chunk) - The Group will retain and refine signature dishes while developing new menu items that align with modern health concepts and tastes, and design set menus and service processes for various occasions such as family gatherings, business banquets, and casual friend meetups[68](index=68&type=chunk) - The future of 'Shanghai Xiao Nan Guo' should be transformed into a 'lifestyle brand centered on classic Benbang cuisine'[69](index=69&type=chunk) [Other Information](index=19&type=section&id=Other%20Information) This section covers post-reporting period material events, interim dividend decisions, compliance with corporate governance code, standard code for directors' securities transactions, trading of the company's listed securities, interim results review, and publication of interim report, among other corporate governance and disclosure-related matters [Events After the Reporting Period](index=19&type=section&id=Events%20After%20the%20Reporting%20Period) From June 30, 2025, up to the date of this announcement, the Group had no material events - From June 30, 2025, up to the date of this announcement, the Group had no material events[70](index=70&type=chunk) [Interim Dividend](index=19&type=section&id=Interim%20Dividend) The Board resolved not to recommend the payment of an interim dividend for the six months ended June 30, 2025 - The Board resolved not to recommend the payment of an interim dividend for the six months ended June 30, 2025[71](index=71&type=chunk) [Compliance with Corporate Governance Code](index=19&type=section&id=Compliance%20with%20Corporate%20Governance%20Code) The company is committed to maintaining high standards of corporate governance, has adopted the Corporate Governance Code set out in Appendix C1 Part 2 of the HKEX Listing Rules, and has complied with it throughout the reporting period - The Company is committed to maintaining high standards of corporate governance to safeguard shareholders' interests and enhance corporate value and accountability[72](index=72&type=chunk) - The Company has adopted the Corporate Governance Code set out in Appendix C1 Part 2 of the HKEX Listing Rules as its own corporate governance code, and for the six months ended June 30, 2025, the Company has complied with the applicable code provisions within the Corporate Governance Code[74](index=74&type=chunk) - The Group is committed to becoming a leader in the catering chain industry in Mainland China and Hong Kong, and strives to contribute to its employees, customers, shareholders, society, and the environment in a lawful, ethical, and responsible manner[73](index=73&type=chunk) [Standard Code for Securities Transactions by Directors](index=19&type=section&id=Standard%20Code%20for%20Securities%20Transactions%20by%20Directors) The company has adopted the Standard Code set out in Appendix C3 of the Listing Rules, and all directors confirmed their compliance with the code throughout the reporting period - The Company has adopted the Standard Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix C3 of the Listing Rules, and all directors have confirmed their compliance with the required standards for dealing throughout the reporting period[75](index=75&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=20&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company%27s%20Listed%20Securities) During the reporting period, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities - 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[76](index=76&type=chunk) [Review of Interim Results](index=20&type=section&id=Review%20of%20Interim%20Results) The Audit Committee has reviewed the Group's unaudited condensed consolidated interim financial statements and this announcement for the six months ended June 30, 2025, and is of the opinion that applicable accounting policies have been adopted, relevant Listing Rules complied with, and adequate disclosures made - The Audit Committee has reviewed the Group's unaudited condensed consolidated interim financial statements and this announcement for the six months ended June 30, 2025; the Audit Committee is of the opinion that in preparing the relevant financial results, applicable accounting policies have been adopted, relevant Listing Rules complied with, and adequate disclosures made[77](index=77&type=chunk) [Publication of Interim Report](index=20&type=section&id=Publication%20of%20Interim%20Report) This interim results announcement has been published on the HKEX website and the company's website; the interim report will be dispatched to shareholders and posted on the aforementioned websites in due course - This interim results announcement has been published on the HKEX website and the company's website; the company's interim report for the reporting period, containing all information required by the Listing Rules, will be dispatched to relevant shareholders and posted on the aforementioned websites in due course[78](index=78&type=chunk) [Acknowledgements](index=20&type=section&id=Acknowledgements) The Board extends its sincere gratitude to shareholders, management team, employees, and business partners for their support and contributions to the Group - The Board hereby expresses its sincere gratitude to the shareholders, management team, employees, and business partners for their support and contributions to the Group[79](index=79&type=chunk)

Performance Announcement Overview [Company Information and Announcement Summary](index=1&type=section&id=Company%20Information%20and%20Announcement%20Summary) Guangzhou Innogen Pharmaceutical Group Co., Ltd. released its unaudited interim consolidated results for the six months ended June 30, 2025, with comparative figures for the six months ended June 30, 2024 - Guangzhou Innogen Pharmaceutical Group Co., Ltd. released its unaudited interim consolidated results for the six months ended June 30, 2025[2](index=2&type=chunk) [Condensed Consolidated Financial Performance](index=2&type=section&id=Condensed%20Consolidated%20Financial%20Performance) For the six months ended June 30, 2025, the company recorded revenue of **RMB 56,446 thousand** for the first time, but the loss for the period expanded to **RMB 122,470 thousand**, with net assets decreasing from the end of 2024 Condensed Consolidated Statement of Comprehensive Income Summary for the Six Months Ended June 30, 2025 (RMB thousands) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Revenue | 56,446 | – | | Cost of Sales | (5,956) | – | | Gross Profit | 50,490 | – | | Other Income and Gains | 5,242 | 12,104 | | Research and Development Expenses | (99,082) | (51,905) | | Administrative Expenses | (31,555) | (30,098) | | Selling and Distribution Expenses | (44,038) | – | | Other Expenses | (3,102) | (4,503) | | Finance Costs | (425) | (873) | | Loss Before Tax | (122,470) | (75,275) | | Income Tax Expense | – | – | | Loss for the Period | (122,470) | (75,275) | Condensed Consolidated Statement of Financial Position Summary as of June 30, 2025 (RMB thousands) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Non-current Assets | 81,805 | 95,585 | | Current Assets | 857,088 | 839,215 | | Non-current Liabilities | 14,456 | 72 | | Current Liabilities | 241,718 | 138,257 | | Net Assets | 682,719 | 796,471 | - Loss for the period expanded from **RMB 75,275 thousand** in the same period of 2024 to **RMB 122,470 thousand** in the same period of 2025[3](index=3&type=chunk) Management Discussion and Analysis [Business Review](index=3&type=section&id=Business%20Review) Since its establishment in 2014, the company has built a pipeline of drug candidates for diabetes and other metabolic diseases, with its core product, Isupraglutide α, approved and commercialized in China for type 2 diabetes, while actively advancing its global clinical development for obesity, overweight, and MASH - The company has established a pipeline of drug candidates for diabetes and other metabolic diseases, with all candidates developed in-house[5](index=5&type=chunk) - The core product, Isupraglutide α, received regulatory approval in China for the treatment of Type 2 Diabetes (T2D) in January 2025 and was commercialized in February 2025[5](index=5&type=chunk)[6](index=6&type=chunk)[8](index=8&type=chunk) [Overview of Core Product Pipeline](index=3&type=section&id=Overview%20of%20Core%20Product%20Pipeline) The company's pipeline is centered on the core product Isupraglutide α, covering multiple indications such as Type 2 Diabetes, obesity and overweight, and MASH, along with several early-stage preclinical drug candidates - Isupraglutide α has been approved by NMPA for T2D and commercialized in China, also approved in Macau, with plans to submit BLA applications in other global jurisdictions[6](index=6&type=chunk) - Isupraglutide α for obesity and overweight has completed Phase IIa clinical trials in China and initiated Phase IIb/III clinical trials, while Phase II clinical trials have been initiated in Australia[6](index=6&type=chunk) - Isupraglutide α for MASH has received IND approval from FDA and NMPA, with multi-center Phase IIa clinical trials in China and the US expected to start in 2026[6](index=6&type=chunk) [Development Progress of Isupraglutide α](index=5&type=section&id=Development%20Progress%20of%20Isupraglutide%20%CE%B1) Isupraglutide α has been approved by China's NMPA and Macau BLA for T2D and commercialized, with active global expansion; clinical trials for obesity and overweight are ongoing in China and Australia; MASH indication has received IND approval in China and the US, with multi-center Phase IIa trials planned for 2026 - Isupraglutide α for T2D was approved by NMPA in January 2025 and commercially launched in China in February 2025[8](index=8&type=chunk) - The company obtained BLA approval for Isupraglutide α for T2D in Macau in June 2025, submitted BLA applications in Southeast Asian countries, and plans to submit another BLA application in Latin American countries in the second half of 2025[8](index=8&type=chunk) - Phase IIb/III clinical trials for Isupraglutide α for obesity and overweight were initiated in China in March 2025, expected to be completed in Q4 2026; Phase II clinical trials were initiated in Australia in August 2025[9](index=9&type=chunk) - Isupraglutide α for MASH received IND approval from FDA in March 2023 and from NMPA in March 2025, with multi-center Phase IIa clinical trials planned to start in the US and China in 2026[10](index=10&type=chunk) [Treatment of Type 2 Diabetes (T2D)](index=5&type=section&id=Treatment%20of%20Type%202%20Diabetes%20(T2D)) BLA for Isupraglutide α as monotherapy and in combination with metformin for T2D was approved in January 2025 and commercially launched in China in February 2025; the company is actively pursuing global expansion, with approval in Macau and BLA submissions in Southeast Asia and Latin America - Isupraglutide α was approved by NMPA in January 2025 for the treatment of T2D and commercially launched in China in February 2025[8](index=8&type=chunk) - The company obtained BLA approval for Isupraglutide α for T2D in Macau in June 2025, submitted BLA applications in Southeast Asian countries, and plans to submit another BLA application in Latin American countries in the second half of 2025[8](index=8&type=chunk) [Treatment of Obesity and Overweight](index=5&type=section&id=Treatment%20of%20Obesity%20and%20Overweight) Phase IIb/III clinical trials for Isupraglutide α for obesity and overweight were initiated in China in March 2025, expected to be completed in Q4 2026; Phase II clinical trials were initiated in Australia in August 2025 with the first patient enrolled - Phase IIb/III clinical trials for Isupraglutide α for obesity and overweight were initiated in China in March 2025, expected to be completed in the fourth quarter of 2026[9](index=9&type=chunk) - The company initiated Phase II clinical trials for Isupraglutide α for obesity and weight loss in Australia in August 2025, with the first patient enrolled and approximately 200 subjects expected to be recruited[9](index=9&type=chunk) [Treatment of Metabolic Dysfunction-Associated Steatohepatitis (MASH)](index=5&type=section&id=Treatment%20of%20Metabolic%20Dysfunction-Associated%20Steatohepatitis%20(MASH)) Isupraglutide α for MASH received IND approval from FDA in March 2023 and from NMPA in March 2025; the company plans to initiate a multi-center Phase IIa clinical trial for MASH in the US and China in 2026 - Isupraglutide α for MASH received IND approval from FDA in March 2023 and from NMPA in March 2025[10](index=10&type=chunk) - The company plans to initiate a multi-center Phase IIa clinical trial for MASH in the US and China in 2026[10](index=10&type=chunk) [Early Pipeline Product Development](index=5&type=section&id=Early%20Pipeline%20Product%20Development) Several early-stage pipeline products are in IND-enabling stages, including YN014 for Alzheimer's disease (AD), YN401 for Type 1 Diabetes, YN209 for MASH, YN203 for Type 2 Diabetes, and YN202 for obesity and overweight, with IND applications expected to be submitted sequentially from 2025 to 2026 - YN014 (for AD) has completed preclinical studies, with IND application planned for submission to FDA in the first half of 2026[11](index=11&type=chunk) - YN401 (for T1D) is in IND-enabling stages, with IND application planned for submission in 2025 or 2026[12](index=12&type=chunk) - YN209 (for MASH), YN203 (for T2D), and YN202 (for obesity and overweight) are all in IND-enabling stages, with IND applications planned for submission in 2026[13](index=13&type=chunk)[14](index=14&type=chunk)[15](index=15&type=chunk) [Financial Review](index=6&type=section&id=Financial%20Review) During the reporting period, the company recorded revenue of **RMB 56.4 million** for the first time, primarily from Isupraglutide α sales; R&D expenses and selling and distribution expenses significantly increased, leading to an expanded loss for the period; gross margin remained high due to accounting policies, while other income and gains decreased - For the six months ended June 30, 2025, the company generated revenue of **RMB 56.4 million**, primarily from the sale of Isupraglutide α in China[16](index=16&type=chunk) - R&D expenses increased from **RMB 51.9 million** in the same period of 2024 to **RMB 99.1 million** in the same period of 2025, mainly due to increased raw material costs and clinical trial expenses[23](index=23&type=chunk) - Selling and distribution expenses increased from zero in the same period of 2024 to **RMB 44.0 million** in the same period of 2025, primarily due to increased marketing and promotion expenses after the commercial launch of Isupraglutide α[26](index=26&type=chunk) [Revenue](index=6&type=section&id=Revenue) The company commercially launched Isupraglutide α in China in February 2025, recording revenue of **RMB 56.4 million** for the first time for the six months ended June 30, 2025, entirely from sales of this product in China - For the six months ended June 30, 2025, the company generated revenue of **RMB 56.4 million**, primarily from the sale of Isupraglutide α in China[16](index=16&type=chunk) [Cost of Sales](index=6&type=section&id=Cost%20of%20Sales) For the six months ended June 30, 2025, cost of sales was **RMB 6.0 million**, with the low amount primarily due to the company's accounting policy of recognizing manufacturing costs prior to commercial launch as R&D expenses - For the six months ended June 30, 2025, cost of sales was **RMB 6.0 million**[17](index=17&type=chunk) - The low cost of sales is due to the accounting policy of recognizing manufacturing costs prior to the commercial launch of Isupraglutide α as R&D expenses[17](index=17&type=chunk) [Gross Profit and Gross Margin](index=6&type=section&id=Gross%20Profit%20and%20Gross%20Margin) For the six months ended June 30, 2025, gross profit was **RMB 50.5 million**, with a high gross margin of **89.4%**, primarily reflecting the company's accounting policy of recognizing manufacturing costs prior to commercial launch as R&D expenses Gross Profit and Gross Margin (RMB thousands) | Metric | Six Months Ended June 30, 2025 | | :--- | :--- | | Gross Profit | 50,490 | | Gross Margin | 89.4% | - The high gross margin primarily reflects the company's accounting policy of recognizing manufacturing costs prior to commercial launch as R&D expenses[18](index=18&type=chunk) [Other Income and Gains](index=7&type=section&id=Other%20Income%20and%20Gains) Other income and gains decreased from **RMB 12.1 million** in the same period of 2024 to **RMB 5.2 million** in the same period of 2025, mainly due to reduced gains from termination of lease contracts and lower investment income from decreased structured deposit purchases and interest rates Details of Other Income and Gains (RMB thousands) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Investment income from other investments classified as financial assets at fair value through profit or loss | 3,169 | 5,418 | | Bank interest income | 1,892 | 1,848 | | Foreign exchange gains | – | 264 | | Fair value gains from other investments classified as financial assets at fair value through profit or loss | 40 | 316 | | Gains from termination of lease contracts | – | 4,152 | | Others | 141 | 106 | | **Total** | **5,242** | **12,104** | - The decrease in other income and gains was primarily due to a gain of **RMB 4.2 million** from the termination of the lease for the Shanghai pilot production facility in the same period of 2024, and reduced investment income in the same period of 2025 due to fewer structured deposit purchases and lower interest rates[21](index=21&type=chunk) [Research and Development Expenses](index=8&type=section&id=Research%20and%20Development%20Expenses) R&D expenses significantly increased from **RMB 51.9 million** in the same period of 2024 to **RMB 99.1 million** in the same period of 2025, mainly due to increased raw material procurement expenses for Isupraglutide α production process improvements and higher CRO fees for Phase IIb/III clinical trials for obesity and overweight Details of Research and Development Expenses (RMB thousands) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Preclinical research, clinical trials, and process improvement fees | 62,792 | 33,316 | | Employee benefit expenses | 12,996 | 9,198 | | Depreciation and amortization | 3,145 | 7,176 | | Raw material costs | 18,418 | 291 | | Others | 1,731 | 1,924 | | **Total** | **99,082** | **51,905** | - The increase in R&D expenses was primarily due to an **RMB 18.1 million** increase in raw material costs (for Isupraglutide α production process improvements and injection pen procurement for Phase IIb/III clinical trials for obesity and overweight), and an **RMB 29.5 million** increase in preclinical research, clinical trial, and process improvement fees (for CDMO payments and CRO fees)[23](index=23&type=chunk) [Administrative Expenses](index=9&type=section&id=Administrative%20Expenses) Administrative expenses slightly increased from **RMB 30.1 million** in the same period of 2024 to **RMB 31.6 million** in the same period of 2025, remaining relatively stable, with an increase in professional service fees offset by a decrease in employee benefit expenses Details of Administrative Expenses (RMB thousands) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Employee benefit expenses | 14,256 | 19,736 | | Professional service fees | 12,355 | 5,476 | | Depreciation and amortization | 985 | 2,446 | | Others | 3,959 | 2,440 | | **Total** | **31,555** | **30,098** | - Administrative expenses remained relatively stable, increasing from **RMB 30.1 million** in the same period of 2024 to **RMB 31.6 million** in the same period of 2025[25](index=25&type=chunk) [Selling and Distribution Expenses](index=9&type=section&id=Selling%20and%20Distribution%20Expenses) Selling and distribution expenses significantly increased from zero in the same period of 2024 to **RMB 44.0 million** in the same period of 2025, primarily due to higher marketing and promotion expenses following the commercial launch of Isupraglutide α and the expansion of the commercialization team - Selling and distribution expenses increased from zero in the same period of 2024 to **RMB 44.0 million** in the same period of 2025[26](index=26&type=chunk) - The increase was primarily due to higher marketing and promotion expenses incurred after the commercial launch of Isupraglutide α and the expansion of the commercialization team[26](index=26&type=chunk) [Other Expenses](index=10&type=section&id=Other%20Expenses) Other expenses decreased from **RMB 4.5 million** in the same period of 2024 to **RMB 3.1 million** in the same period of 2025, mainly due to a loss on disposal of property, plant and equipment in the same period of 2024, while the current period primarily involved impairment losses on prepayments and donations - Other expenses decreased from **RMB 4.5 million** in the same period of 2024 to **RMB 3.1 million** in the same period of 2025[27](index=27&type=chunk) - The decrease was primarily due to a loss of **RMB 4.5 million** on the disposal of property, plant and equipment in the same period of 2024[27](index=27&type=chunk) [Finance Costs](index=10&type=section&id=Finance%20Costs) Finance costs decreased from **RMB 0.9 million** in the same period of 2024 to **RMB 0.4 million** in the same period of 2025, primarily due to reduced interest expenses on lease liabilities after the termination of the Shanghai factory lease in June 2024 - Finance costs decreased from **RMB 0.9 million** in the same period of 2024 to **RMB 0.4 million** in the same period of 2025[28](index=28&type=chunk) - The decrease was primarily due to reduced interest expenses on lease liabilities after the termination of the Shanghai factory lease in June 2024[28](index=28&type=chunk) [Liquidity and Capital Resources](index=10&type=section&id=Liquidity%20and%20Capital%20Resources) The company primarily funds its operations through shareholder contributions and private equity financing; net current assets decreased from **RMB 701.0 million** at the end of 2024 to **RMB 615.4 million** as of June 30, 2025, mainly due to increased current liabilities, particularly trade payables from higher CDMO service payments - The company primarily funds its operations through shareholder contributions and private equity financing[29](index=29&type=chunk) - Net current assets decreased from **RMB 701.0 million** as of December 31, 2024, to **RMB 615.4 million** as of June 30, 2025, primarily due to increased current liabilities[29](index=29&type=chunk) - Current liabilities increased from **RMB 138.3 million** as of December 31, 2024, to **RMB 241.7 million** as of June 30, 2025, primarily due to increased trade payables[29](index=29&type=chunk) - Interest-bearing bank borrowings increased from **RMB 9.9 million** at the end of 2024 to **RMB 40.0 million** as of June 30, 2025, due to new borrowings[30](index=30&type=chunk) [Employees](index=12&type=section&id=Employees) As of June 30, 2025, the Group had **105 employees**, with total staff costs of **RMB 45.7 million**, a significant increase from the same period, mainly due to the expansion of the commercialization team; the company emphasizes talent recruitment and training, offering competitive remuneration and equity incentives - As of June 30, 2025, the Group had **105 employees**[38](index=38&type=chunk) - Total staff costs for the reporting period were **RMB 45.7 million**, compared to **RMB 28.6 million** in the same period, primarily due to the expansion of the commercialization team[38](index=38&type=chunk) - The company highly values recruiting and training qualified employees, offering competitive remuneration packages, equity incentives, and promotion opportunities[38](index=38&type=chunk) [Events After Reporting Period](index=12&type=section&id=Events%20After%20Reporting%20Period) On August 15, 2025, the company's H shares were successfully listed on the Main Board of the Stock Exchange, with a global offering of **36,556,400 H shares** at an offer price of **HKD 18.68** per share - On August 15, 2025, the company's H shares were listed on the Main Board of the Stock Exchange, with a global offering of **36,556,400 H shares** at an offer price of **HKD 18.68** per H share[39](index=39&type=chunk) [Future Developments](index=12&type=section&id=Future%20Developments) Looking ahead to the second half of 2025, the company plans to actively advance the global expansion of Isupraglutide α for Type 2 Diabetes, progress its clinical development for obesity and overweight indications, and continue to promote its inclusion in the National Medical Insurance Drug List - The company plans to actively advance the global expansion of Isupraglutide α for the treatment of Type 2 Diabetes (T2D), including submitting BLA applications in Southeast Asia and Latin America[40](index=40&type=chunk) - The company will advance the clinical development of Isupraglutide α for obesity and overweight indications, including ongoing clinical trials in China and Australia[40](index=40&type=chunk) - The company plans to continue national-level negotiation efforts in the second half of 2025 to support the timely and smooth inclusion of Isupraglutide α in the National Medical Insurance Drug List[41](index=41&type=chunk) Corporate Governance and Other Information [Compliance with Corporate Governance Code](index=13&type=section&id=Compliance%20with%20Corporate%20Governance%20Code) Since the listing date, the company has adopted the principles and code provisions of the Corporate Governance Code in Appendix C1 of the Listing Rules; the Board believes that the combined role of Chairman and CEO ensures consistent leadership for the Group and will continue to review this arrangement - Since the listing date, the company has adopted the principles and code provisions contained in the Corporate Governance Code in Appendix C1 of the Listing Rules[42](index=42&type=chunk) - Dr. WANG QINGHUA serves concurrently as Chairman and CEO, an arrangement the Board believes ensures consistent leadership for the Group and will continue to be reviewed[42](index=42&type=chunk) [Compliance with Model Code for Securities Transactions by Directors and Supervisors](index=13&type=section&id=Compliance%20with%20Model%20Code%20for%20Securities%20Transactions%20by%20Directors%20and%20Supervisors) Since the listing date, the company has adopted the Model Code and established a code of conduct to regulate securities transactions by directors, supervisors, and relevant employees; all directors and supervisors have confirmed compliance with the code of conduct - Since the listing date, the company has adopted the Model Code and established a code of conduct for directors and supervisors dealing in the company's securities[44](index=44&type=chunk) - Following inquiry, directors and supervisors have confirmed their compliance with the code of conduct from the listing date up to the date of this announcement[44](index=44&type=chunk) [Changes in Financial Position After Reporting Period](index=13&type=section&id=Changes%20in%20Financial%20Position%20After%20Reporting%20Period) There have been no other significant changes in the Group's financial position since June 30, 2025 - There have been no other significant changes in the Group's financial position since June 30, 2025[45](index=45&type=chunk) [Audit Committee](index=14&type=section&id=Audit%20Committee) Since the listing date, the company has established an Audit Committee responsible for reviewing and overseeing the financial reporting process and internal control system; the Committee has reviewed the unaudited interim financial information for the reporting period and deemed it compliant with relevant accounting standards - Since the listing date, the company has established an Audit Committee, whose primary responsibilities include reviewing and overseeing the financial reporting process and internal control system[46](index=46&type=chunk) - The Audit Committee has reviewed the unaudited interim financial information for the reporting period and deemed it compliant with relevant accounting standards and regulations[46](index=46&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=14&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company%27s%20Listed%20Securities) Neither the company nor any of its subsidiaries has purchased, sold, or redeemed any of the company's listed securities since the listing date up to the date of this announcement, nor does it hold any treasury shares - Neither the company nor any of its subsidiaries has purchased, sold, or redeemed any of the company's listed securities since the listing date up to the date of this announcement[47](index=47&type=chunk) - As of the date of this announcement, the company does not hold any treasury shares[48](index=48&type=chunk) [Use of Proceeds from Global Offering](index=14&type=section&id=Use%20of%20Proceeds%20from%20Global%20Offering) The company's H shares were listed on August 15, 2025, with net proceeds from the global offering of approximately **HKD 634.7 million**, which will be used as stated in the prospectus; as of the date of this announcement, the intended use of net proceeds is consistent with previously disclosed information - The net proceeds received by the company from the global offering are approximately **HKD 634.7 million**, which will be used as stated in the prospectus[49](index=49&type=chunk) - As of the date of this announcement, the intended use of net proceeds is consistent with what was previously disclosed in the prospectus[50](index=50&type=chunk) [Interim Dividend](index=14&type=section&id=Interim%20Dividend) The Board does not recommend the payment of an interim dividend to shareholders for the reporting period - The Board does not recommend the payment of an interim dividend to shareholders for the reporting period[51](index=51&type=chunk) [Publication of Interim Results Announcement and Interim Report](index=14&type=section&id=Publication%20of%20Interim%20Results%20Announcement%20and%20Interim%20Report) This results announcement has been published on the company's website and the Stock Exchange's website; the interim report, containing all required information, is available on the website and will be dispatched to shareholders upon request - This results announcement has been published on the company's website (www.innogenpharm.com) and the Stock Exchange's website (www.hkexnews.hk)[52](index=52&type=chunk) Condensed Consolidated Financial Statements [Interim Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=15&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For the six months ended June 30, 2025, the company recorded revenue of **RMB 56,446 thousand** and gross profit of **RMB 50,490 thousand**; loss for the period expanded to **RMB 122,470 thousand**, with basic and diluted loss per share of **RMB 0.29** Interim Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (RMB thousands) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Revenue | 56,446 | – | | Cost of Sales | (5,956) | – | | Gross Profit | 50,490 | – | | Other Income and Gains | 5,242 | 12,104 | | Research and Development Expenses | (99,082) | (51,905) | | Administrative Expenses | (31,555) | (30,098) | | Selling and Distribution Expenses | (44,038) | – | | Other Expenses | (3,102) | (4,503) | | Finance Costs | (425) | (873) | | Loss Before Tax | (122,470) | (75,275) | | Income Tax Expense | – | – | | Loss for the Period | (122,470) | (75,275) | | Loss Per Share Attributable to Ordinary Equity Holders of the Parent Company (RMB) | (0.29) | (0.18) | [Interim Condensed Consolidated Statement of Financial Position](index=16&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the company's total assets were **RMB 938,893 thousand**, of which current assets accounted for **RMB 857,088 thousand**; net assets were **RMB 682,719 thousand**, a decrease from **RMB 796,471 thousand** as of December 31, 2024 Interim Condensed Consolidated Statement of Financial Position (RMB thousands) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Total Non-current Assets | 81,805 | 95,585 | | Total Current Assets | 857,088 | 839,215 | | **Liabilities** | | | | Total Current Liabilities | 241,718 | 138,257 | | Total Non-current Liabilities | 14,456 | 72 | | **Equity** | | | | Total Equity | 682,719 | 796,471 | - Net assets decreased from **RMB 796,471 thousand** as of December 31, 2024, to **RMB 682,719 thousand** as of June 30, 2025[55](index=55&type=chunk) Notes to the Condensed Consolidated Financial Information [Company Information](index=18&type=section&id=Company%20Information) Guangzhou Innogen Pharmaceutical Group Co., Ltd. was established in China on December 5, 2014, primarily engaged in the R&D and commercialization of pharmaceutical products; its H shares were listed on the Main Board of the Stock Exchange on August 15, 2025 - The company was established in China on December 5, 2014, primarily engaged in the research and development and commercialization of pharmaceutical products[56](index=56&type=chunk)[57](index=57&type=chunk) - The company's H shares were listed on the Main Board of the Stock Exchange on August 15, 2025[58](index=58&type=chunk) [Basis of Preparation and Changes in Accounting Policies](index=18&type=section&id=Basis%20of%20Preparation%20and%20Changes%20in%20Accounting%20Policies) The interim condensed consolidated financial information is prepared in accordance with HKAS 34 and is consistent with the accounting policies adopted for the annual consolidated financial statements for the year ended December 31, 2024, except for the initial adoption of revised HKFRS accounting standards, which had no significant impact on the Group - The interim condensed consolidated financial information is prepared in accordance with Hong Kong Accounting Standard 34 Interim Financial Reporting[59](index=59&type=chunk) - The accounting policies adopted in the preparation of the interim condensed consolidated financial information are consistent with those adopted in the preparation of the Group's annual consolidated financial statements for the year ended December 31, 2024, except for the initial adoption of revised HKFRS accounting standards[60](index=60&type=chunk) - The amendments to Hong Kong Accounting Standard 21 had no impact on the interim condensed consolidated financial information, as all the Group's transaction currencies are convertible[61](index=61&type=chunk) [Operating Segment Information](index=19&type=section&id=Operating%20Segment%20Information) The Group's business is solely the sale of pharmaceutical products, and the chief operating decision-maker reviews the Group's overall performance, thus there is only a single operating segment; all non-current assets and revenue are derived from China, so no geographical information is presented - The Group's business is solely the sale of pharmaceutical products, with only a single operating segment[62](index=62&type=chunk) - Almost all of the Group's non-current assets are located in China, and all revenue is derived from operations in China, thus no geographical information is presented[63](index=63&type=chunk) [Details of Revenue, Other Income and Gains](index=19&type=section&id=Details%20of%20Revenue%2C%20Other%20Income%20and%20Gains) For the six months ended June 30, 2025, revenue from contracts with customers was **RMB 56,446 thousand**, entirely from pharmaceutical sales in mainland China; total other income and gains were **RMB 5,242 thousand**, a decrease from **RMB 12,104 thousand** in the same period of 2024, mainly affected by reduced investment income and gains from termination of lease contracts Revenue Analysis (RMB thousands) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Revenue from contracts with customers | 56,446 | – | | Sale of pharmaceutical products | 56,446 | – | | Geographical market (Mainland China) | 56,446 | – | | Timing of revenue recognition (Goods transferred at a point in time) | 56,446 | – | Total Other Income and Gains (RMB thousands) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Total other income | 5,061 | 7,266 | | Total gains | 181 | 4,838 | | **Total Other Income and Gains** | **5,242** | **12,104** | [Details of Other Expenses](index=20&type=section&id=Details%20of%20Other%20Expenses) For the six months ended June 30, 2025, total other expenses were **RMB 3,102 thousand**, mainly comprising impairment losses on prepayments and other receivables, and donations; the same period in 2024 primarily included a loss on disposal of property, plant and equipment Details of Other Expenses (RMB thousands) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Impairment losses, net of reversals | 1,574 | 45 | | Loss on disposal of property, plant and equipment | – | 4,451 | | Donations | 1,341 | – | | Others | 187 | 7 | | **Total** | **3,102** | **4,503** | [Details of Loss Before Tax](index=21&type=section&id=Details%20of%20Loss%20Before%20Tax) For the six months ended June 30, 2025, loss before tax was **RMB 122,470 thousand**, primarily influenced by R&D expenses, selling and distribution expenses, employee benefit expenses, and listing expenses Components of Loss Before Tax (RMB thousands) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Depreciation of plant and equipment | 1,337 | 1,282 | | Amortization of intangible assets | 2,225 | 6,079 | | Depreciation of right-of-use assets | 560 | 2,248 | | Interest on lease liabilities | 149 | 858 | | Lease payments not included in the measurement of lease liabilities | 1,580 | 1,700 | | Bank interest income | (1,892) | (1,848) | | Listing expenses | 9,794 | – | | Exchange losses/(gains) | 187 | (264) | | Gains from termination of lease contracts | – | (4,152) | | Loss on disposal of property, plant and equipment | – | 4,451 | | Auditor's remuneration | 746 | – | | Total employee benefit expenses | 45,691 | 28,551 | [Details of Finance Costs](index=21&type=section&id=Details%20of%20Finance%20Costs) For the six months ended June 30, 2025, total finance costs were **RMB 425 thousand**, mainly comprising interest on bank loans and other borrowings, and interest on lease liabilities; finance costs decreased from **RMB 873 thousand** in the same period of 2024, primarily due to reduced interest on lease liabilities Details of Finance Costs (RMB thousands) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Interest on bank loans and other borrowings | 276 | 15 | | Interest on lease liabilities | 149 | 858 | | **Total** | **425** | **873** | [Income Tax](index=22&type=section&id=Income%20Tax) The Group is subject to income tax on a legal entity basis on profits arising in or derived from the jurisdictions where its member companies are registered and operate; the corporate income tax rate for Chinese subsidiaries is **25%** - The Group is subject to income tax on a legal entity basis on profits arising in or derived from the jurisdictions where its member companies are registered and operate[67](index=67&type=chunk) - The corporate income tax rate for Chinese subsidiaries is **25%**[68](index=68&type=chunk) [Loss Per Share](index=22&type=section&id=Loss%20Per%20Share) For the six months ended June 30, 2025, basic and diluted loss per share attributable to ordinary equity holders of the parent company was **RMB 0.29**, an increase from **RMB 0.18** in the same period of 2024; the Group had no potentially dilutive ordinary shares outstanding Loss Per Share Calculation (RMB thousands) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Loss attributable to ordinary equity holders of the parent company used in calculating basic loss per share | (122,470) | (75,275) | | Weighted average number of ordinary shares outstanding during the period used in calculating basic loss per share | 420,263 | 419,021 | | **Loss Per Share (Basic and Diluted) (RMB/share)** | **(0.29)** | **(0.18)** | - The Group had no potentially dilutive ordinary shares outstanding, and the basic loss per share presented for the period was not adjusted[70](index=70&type=chunk) [Prepayments and Other Receivables](index=23&type=section&id=Prepayments%20and%20Other%20Receivables) As of June 30, 2025, non-current prepayments and other receivables totaled **RMB 24,608 thousand**, and current portion totaled **RMB 77,463 thousand**; current other receivables significantly increased from **RMB 1,215 thousand** at the end of 2024 to **RMB 53,256 thousand** Prepayments and Other Receivables (RMB thousands) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Non-current:** | | | | Deductible VAT | – | 11,851 | | Prepayments for long-term assets | 23,328 | 46,340 | | Lease deposits | 1,280 | – | | **Total Non-current** | **24,608** | **58,191** | | **Current:** | | | | Deductible VAT | 17,508 | 6,676 | | Deferred listing expenses | 2,730 | 3,591 | | Prepayments to suppliers | 5,213 | 1,854 | | Other receivables | 53,256 | 1,215 | | Others | 482 | 129 | | Impairment provision | (1,726) | (165) | | **Total Current** | **77,463** | **13,300** | - Current other receivables significantly increased from **RMB 1,215 thousand** as of December 31, 2024, to **RMB 53,256 thousand** as of June 30, 2025[73](index=73&type=chunk) [Trade Receivables](index=23&type=section&id=Trade%20Receivables) As of June 30, 2025, trade receivables were **RMB 8,599 thousand**, all due within one year; there were no trade receivables as of December 31, 2024 Aging Analysis of Trade Receivables (RMB thousands) | Aging | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Within one year | 8,599 | – | [Trade Payables](index=24&type=section&id=Trade%20Payables) As of June 30, 2025, trade payables were **RMB 136,312 thousand**, all due within one year, an increase from **RMB 91,045 thousand** as of December 31, 2024 Aging Analysis of Trade Payables (RMB thousands) | Aging | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Within one year | 136,312 | 91,045 | [Dividends](index=24&type=section&id=Dividends) The company neither paid nor declared any dividends for the six months ended June 30, 2025, and 2024 - The company neither paid nor declared any dividends for the six months ended June 30, 2025, and 2024[75](index=75&type=chunk) Definitions and Glossary [Glossary of Terms](index=25&type=section&id=Glossary%20of%20Terms) This section provides definitions for key terms used in the announcement, including Company, Group, H shares, Board, Corporate Governance Code, China, CDMO, CRO, Listing, Listing Date, Listing Rules, Model Code, Prospectus, Reporting Period, RMB, R&D, Shares, Shareholders, Stock Exchange, Supervisors, Treasury Shares, Unlisted Shares, etc - The 'Group' or 'we' refers to the Company and its subsidiaries[78](index=78&type=chunk) - The 'Company' refers to Guangzhou Innogen Pharmaceutical Group Co., Ltd., whose H shares are listed on the Main Board of the Stock Exchange (stock code: 2591)[79](index=79&type=chunk) - The 'Listing Date' refers to August 15, 2025, when the H shares were listed on the Main Board of the Stock Exchange[80](index=80&type=chunk)

[Interim Results](index=1&type=section&id=Interim%20Results) [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=2&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For the six months ended June 30, 2025, the Group's revenue decreased by 27.5% year-on-year, gross profit significantly reduced by 62.5%, and loss for the period narrowed to HK$7.44 million, primarily due to a substantial decrease in selling and administrative expenses Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (For the six months ended June 30) | Metric | 2025 (HK$ '000) | 2024 (HK$ '000) | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 147,725 | 203,926 | -27.5% | | Cost of Revenue | (137,588) | (176,890) | -22.2% | | Gross Profit | 10,137 | 27,036 | -62.5% | | Other Income | 279 | 973 | -71.3% | | Selling and Administrative Expenses | (18,165) | (46,582) | -61.0% | | Operating Loss | (7,749) | (18,573) | -58.2% | | Loss Before Income Tax | (7,873) | (18,741) | -58.0% | | Loss for the Period | (7,444) | (16,090) | -53.7% | | Loss Attributable to Owners of the Company | (7,103) | (11,249) | -36.8% | | Basic and Diluted Loss Per Share (HK cents) | (0.77) | (1.23) | -37.4% | [Condensed Consolidated Statement of Financial Position](index=4&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the Group's total assets increased by 23.5% from the end of 2024, driven by an increase in trade receivables and contract assets within current assets, while total liabilities also grew by 32.7%, leading to a slight decrease in total equity Condensed Consolidated Statement of Financial Position (As of June 30, 2025) | Metric | June 30, 2025 (HK$ '000) | Dec 31, 2024 (HK$ '000) | Change (%) | | :--- | :--- | :--- | :--- | | **ASSETS** | | | | | Non-current Assets | 36,166 | 31,877 | 13.5% | | Current Assets | 472,683 | 380,184 | 24.3% | | **Total Assets** | **508,849** | **412,061** | **23.5%** | | **EQUITY** | | | | | Capital and Reserves Attributable to Owners of the Company | 110,340 | 113,603 | -2.8% | | Non-controlling Interests | (8,891) | (8,451) | 5.2% | | **Total Equity** | **101,449** | **105,152** | **-3.5%** | | **LIABILITIES** | | | | | Non-current Liabilities | 2,838 | 1,471 | 93.0% | | Current Liabilities | 404,562 | 305,438 | 32.5% | | **Total Liabilities** | **407,400** | **306,909** | **32.7%** | | **Total Equity and Liabilities** | **508,849** | **412,061** | **23.5%** | [Notes to the Condensed Consolidated Financial Statements](index=6&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) [Basis of Preparation](index=6&type=section&id=Basis%20of%20Preparation) The condensed consolidated financial statements are prepared in accordance with HKAS 34 "Interim Financial Reporting" and the applicable disclosure requirements of Appendix 16 to the HKEX Listing Rules - Interim financial statements are prepared in accordance with Hong Kong Accounting Standard 34 and the disclosure requirements of Appendix 16 to the HKEX Listing Rules issued by the Hong Kong Institute of Certified Public Accountants[8](index=8&type=chunk) [Significant Accounting Policies](index=6&type=section&id=Significant%20Accounting%20Policies) The Group's accounting policies are consistent with those used in the 2024 annual consolidated financial statements, and newly adopted HKFRSs have no significant impact on the current period's financial statements - The accounting policies and methods of computation used in the preparation of the condensed consolidated interim financial statements are consistent with those used in the annual consolidated financial statements for the year ended December 31, 2024[9](index=9&type=chunk) - The Group has adopted all new and revised Hong Kong Financial Reporting Standards effective from January 1, 2025, but their adoption has not resulted in significant changes to accounting policies, presentation of the consolidated financial statements, or reported amounts[9](index=9&type=chunk) [Revenue and Segment Information](index=7&type=section&id=Revenue%20and%20Segment%20Information) The Group's revenue primarily derives from the renewable energy business, which saw a 16.2% year-on-year decrease, while e-commerce revenue significantly dropped by 94%, and other business revenue grew by 191.6% Revenue Analysis (For the six months ended June 30) | Revenue Source | 2025 (HK$ '000) | 2024 (HK$ '000) | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Revenue from construction contracts – renewable energy power plants | 141,272 | 168,739 | -16.2% | | E-commerce business | 2,018 | 33,551 | -94.0% | | Others | 4,147 | 1,422 | 191.6% | | Total revenue from contracts with customers | 147,437 | 203,712 | -27.6% | | Rental income | 288 | 214 | 34.6% | | **Total Revenue** | **147,725** | **203,926** | **-27.5%** | Segment Revenue and Results (For the six months ended June 30) | Segment | 2025 Revenue (HK$ '000) | 2024 Revenue (HK$ '000) | 2025 (Loss) / Profit (HK$ '000) | 2024 (Loss) / Profit (HK$ '000) | | :--- | :--- | :--- | :--- | :--- | | Renewable energy business | 141,272 | 168,953 | 5,435 | 6,617 | | E-commerce business | 2,018 | 33,551 | 1,080 | (9,214) | | Others | 4,435 | 1,422 | 2,739 | 454 | | Unallocated | – | – | (17,127) | (16,598) | | **Total** | **147,725** | **203,926** | **(7,873)** | **(18,741)** | - The Group's reportable and operating segments include: renewable energy business (construction projects of renewable energy power plants in China and rental income), e-commerce business (online merchant-related services in China) and others (Building Information Modelling services in China)[11](index=11&type=chunk) [Other Income](index=9&type=section&id=Other%20Income) Total other income for the period was HK$279 thousand, a significant decrease from HK$973 thousand in the prior year, primarily due to a reduction in other income items Other Income (For the six months ended June 30) | Item | 2025 (HK$ '000) | 2024 (HK$ '000) | | :--- | :--- | :--- | | Bank interest income | 74 | 109 | | Government grants | 205 | 189 | | Others | – | 675 | | **Total** | **279** | **973** | [Loss Before Income Tax](index=9&type=section&id=Loss%20Before%20Income%20Tax) Loss before income tax for the period was HK$7,873 thousand, a significant narrowing from HK$18,741 thousand in the prior year, mainly due to reduced staff costs, inventory costs, and depreciation, despite a substantial increase in net impairment losses on financial and contract assets Components of Loss Before Income Tax (For the six months ended June 30) | Item | 2025 (HK$ '000) | 2024 (HK$ '000) | | :--- | :--- | :--- | | Total staff costs | 4,603 | 5,730 | | Net impairment losses on financial and contract assets | 6,814 | 1,263 | | Depreciation of right-of-use assets | 1,387 | 1,374 | | Depreciation of property, plant and equipment | 32 | 129 | | Cost of inventories recognised as an expense | 747 | 12,528 | [Income Tax (Credit) / Expense](index=10&type=section&id=Income%20Tax%20(Credit)%20%2F%20Expense) The period recorded an income tax credit of HK$429 thousand, mainly from deferred tax credit, while China corporate income tax shifted from a credit to an expense Income Tax (Credit) / Expense (For the six months ended June 30) | Item | 2025 (HK$ '000) | 2024 (HK$ '000) | | :--- | :--- | :--- | | Hong Kong Profits Tax | – | – | | China Corporate Income Tax | 1,274 | (2,244) | | Deferred tax | (1,703) | (407) | | **Total** | **(429)** | **(2,651)** | - The tax rate for PRC subsidiaries is 25%, and Hong Kong Profits Tax rates are 8.25% (for the first HK$2 million of assessable profits) and 16.5% (for assessable profits exceeding HK$2 million)[17](index=17&type=chunk) [Loss Per Share](index=11&type=section&id=Loss%20Per%20Share) For the six months ended June 30, 2025, basic loss per share attributable to owners of the Company was HK cents 0.77, narrowing from HK cents 1.23 in the prior year Loss Per Share Calculation (For the six months ended June 30) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Weighted average number of ordinary shares ('000) | 928,006 | 911,192 | | Loss attributable to owners of the Company (HK$ '000) | (7,103) | (11,249) | | Basic loss per share (HK cents) | (0.77) | (1.23) | - Diluted loss per share is the same as basic loss per share as there were no potential dilutive ordinary shares outstanding during the period[19](index=19&type=chunk) [Dividends](index=11&type=section&id=Dividends) The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025, consistent with the prior year - The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025 (2024: nil)[19](index=19&type=chunk) [Trade Receivables, Deposits and Other Receivables](index=12&type=section&id=Trade%20Receivables,%20Deposits%20and%20Other%20Receivables) As of June 30, 2025, total trade receivables amounted to HK$201,866 thousand, with a significant increase in the proportion of balances over 6 months old, and an increase in loss allowance Ageing Analysis of Trade Receivables (As of reporting period end) | Ageing | June 30, 2025 (HK$ '000) | Dec 31, 2024 (HK$ '000) | | :--- | :--- | :--- | | Within 1 month | 58 | 4,702 | | 1 to 2 months | – | 30,573 | | 2 to 3 months | 9 | 44,659 | | 3 to 6 months | 3,987 | 30,915 | | Over 6 months | 197,812 | 94,500 | | **Total Trade Receivables** | **201,866** | **205,349** | | Loss allowance | (15,684) | (11,235) | | Trade receivables, net of loss allowance | 186,182 | 194,114 | | Deposits, prepayments and other receivables | 96,973 | 44,341 | | **Total** | **283,155** | **238,455** | [Contract Assets and Contract Liabilities](index=13&type=section&id=Contract%20Assets%20and%20Contract%20Liabilities) As of June 30, 2025, the Group's net contract assets related to the renewable energy business increased to HK$145,775 thousand, and contract liabilities also significantly increased to HK$72,473 thousand Contract Assets and Contract Liabilities (As of June 30, 2025) | Item | June 30, 2025 (HK$ '000) | Dec 31, 2024 (HK$ '000) | | :--- | :--- | :--- | | Contract assets related to renewable energy business | 149,465 | 101,282 | | Loss allowance | (3,690) | (3,104) | | **Net Contract Assets** | **145,775** | **98,178** | | Contract liabilities related to renewable energy business | 72,473 | 32,938 | | **Total Contract Liabilities** | **72,473** | **32,938** | [Share Capital](index=13&type=section&id=Share%20Capital) As of June 30, 2025, the Company's issued and fully paid share capital remained at HK$9,280 thousand, with 928,006 thousand shares, consistent with the end of 2024 Share Capital Movement (As of June 30, 2025) | Item | Number of Shares ('000) | Share Capital (HK$ '000) | | :--- | :--- | :--- | | As at January 1, 2024 | 850,830 | 8,508 | | Issue of new shares (1H 2024) | 77,176 | 772 | | As at June 30, 2024 | 928,006 | 9,280 | | As at January 1, 2025 | 928,006 | 9,280 | | Issue of new shares (1H 2025) | – | – | | As at June 30, 2025 | 928,006 | 9,280 | - On January 8, 2024, a placement of 37,176,000 new ordinary shares was completed, raising net proceeds of approximately HK$14,498,640[22](index=22&type=chunk) - On March 11, 2024, a subscription of 40,000,000 new ordinary shares was completed, raising net proceeds of approximately HK$15,600,000[22](index=22&type=chunk) [Trade and Other Payables](index=14&type=section&id=Trade%20and%20Other%20Payables) As of June 30, 2025, total trade and other payables amounted to HK$358,212 thousand, a significant increase from the end of 2024, with a substantial rise in trade payables aged over 3 months Ageing Analysis of Trade Payables (As of reporting period end) | Ageing | June 30, 2025 (HK$ '000) | Dec 31, 2024 (HK$ '000) | | :--- | :--- | :--- | | Within 1 month | 101,929 | 3,082 | | 1 to 2 months | – | 20,690 | | 2 to 3 months | 481 | 59,742 | | Over 3 months | 195,154 | 56,935 | | **Trade Payables and Retention Money** | **297,564** | **140,449** | | Other payables and accrued expenses | 60,648 | 97,168 | | **Total** | **358,212** | **237,617** | [Management Discussion and Analysis](index=15&type=section&id=Management%20Discussion%20and%20Analysis) [Business Review](index=15&type=section&id=Business%20Review) The Group's main businesses include renewable energy, e-commerce, and Building Information Modelling services; in the first half, renewable energy revenue decreased, e-commerce revenue significantly contracted, and BIM services revenue remained stable [Renewable Energy Business](index=15&type=section&id=Renewable%20Energy%20Business) The renewable energy business contributed approximately HK$141.3 million in revenue in the first half, a 16.4% year-on-year decrease, with unrecognised contract amounts of approximately RMB308.8 million as of the announcement date - In the first half of 2025, the renewable energy business contributed approximately **HK$141.3 million** in revenue (first half of 2024: approximately HK$169.0 million)[25](index=25&type=chunk) - As of the announcement date, the Group has **3 outstanding contracts** with unrecognised contract amounts of approximately **RMB308.8 million** (December 31, 2024: approximately RMB440.8 million)[25](index=25&type=chunk) [E-commerce Business](index=15&type=section&id=E-commerce%20Business) The e-commerce business generated approximately HK$2.0 million in revenue in the first half, a significant 94% decrease from HK$33.6 million in the prior year - In the first half of 2025, the e-commerce business contributed approximately **HK$2.0 million** in revenue (first half of 2024: HK$33.6 million)[26](index=26&type=chunk) [Other (Building Information Modelling Services)](index=16&type=section&id=Other%20(Building%20Information%20Modelling%20Services)) Building Information Modelling services contributed approximately HK$1.4 million in revenue in the first half, consistent with the prior year - In the first half of 2025, the Building Information Modelling business contributed approximately **HK$1.4 million** in revenue (first half of 2024: HK$1.4 million)[27](index=27&type=chunk) [Financial Review](index=16&type=section&id=Financial%20Review) Loss attributable to owners of the Company decreased by 36.6% year-on-year to HK$7.1 million; gross profit and gross margin both significantly declined due to changes in revenue mix from a substantial decrease in e-commerce revenue; selling and administrative expenses reduced by 61% due to business strategy adjustments - For the six months ended June 30, 2025, loss attributable to owners of the Company was approximately **HK$7.1 million**, a decrease of approximately **36.6%** compared to a loss of approximately HK$11.2 million in the prior year[28](index=28&type=chunk) - The Group's gross profit decreased from approximately **HK$27.0 million** in the first half of 2024 to approximately **HK$10.1 million** in the first half of 2025, with gross margin falling from approximately **13.2% to 6.9%**, primarily due to a significant reduction in e-commerce business revenue[28](index=28&type=chunk) - Selling and administrative expenses decreased by approximately **HK$28.4 million** to approximately **HK$18.2 million** from approximately HK$46.6 million in the prior year, mainly due to a reduction of approximately HK$30.6 million in selling expenses resulting from changes in business strategy[28](index=28&type=chunk) [Liquidity, Financial Resources and Capital Structure](index=17&type=section&id=Liquidity,%20Financial%20Resources%20and%20Capital%20Structure) As of June 30, 2025, the Group's current ratio remained stable, while the gearing ratio and net debt-to-equity ratio increased, and interest coverage ratio remained negative Liquidity and Financial Ratios (As of reporting period end) | Metric | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Current Ratio | 1.2 | 1.2 | | Gearing Ratio (%) | 35.9 | 23.8 | | Net Debt-to-Equity Ratio (%) | (3.9) | (16.2) | | Interest Coverage Ratio | (62.6) | (74.1) | - Current ratio is calculated by dividing total current assets by total current liabilities[31](index=31&type=chunk) - Gearing ratio is calculated by dividing total debt (including borrowings, lease liabilities, and amounts due to direct holding company) by total equity[31](index=31&type=chunk) [Prospects](index=17&type=section&id=Prospects) The Chinese government's commitment to establishing a clean, low-carbon energy system and promoting market-oriented reforms for new energy on-grid tariffs presents favorable development opportunities for private new energy enterprises - China aims to establish a clean, low-carbon, safe, and efficient energy system by **2060**, with non-fossil energy consumption accounting for over **80%**[30](index=30&type=chunk) - The "14th Five-Year Plan" is concluding, with new energy project investments holding a key position; the "15th Five-Year Plan" period will deeply implement a new energy security strategy and comprehensively advance the construction of a new energy system[32](index=32&type=chunk) - The National Development and Reform Commission and the National Energy Administration issued the "Notice on Deepening Market-Oriented Reform of New Energy On-Grid Tariffs and Promoting High-Quality Development of New Energy," which promotes market-based pricing for new energy on-grid tariffs, benefiting the development of private new energy enterprises[32](index=32&type=chunk) [Other Information](index=18&type=section&id=Other%20Information) [Dividends](index=18&type=section&id=Dividends) The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025, consistent with the prior year - The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025 (2024: nil)[33](index=33&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=18&type=section&id=Purchase,%20Sale%20or%20Redemption%20of%20the%20Company's%20Listed%20Securities) During the reporting period, neither the Company nor its subsidiaries purchased, sold, or redeemed any of the Company's listed securities - During the period, neither the Company nor its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[34](index=34&type=chunk) [Sufficiency of Public Float](index=18&type=section&id=Sufficiency%20of%20Public%20Float) The Company has maintained the prescribed public float under the Listing Rules from its listing date up to the date of this announcement - The Company has maintained the prescribed public float under the Listing Rules from its listing date up to the date of this announcement[35](index=35&type=chunk) [Corporate Governance](index=19&type=section&id=Corporate%20Governance) The Company currently has vacancies for the Chairman and Chief Executive Officer positions, but the Board believes existing members can collectively fulfill the duties, and the Company has complied with all code provisions of the Corporate Governance Code - Since the demise of the former Chairman and the resignation of the former Chief Executive Officer, the Company has had no Chairman and Chief Executive Officer, and the Board is currently identifying suitable candidates to fill the vacancies[36](index=36&type=chunk) - The Board believes that the existing Board members can collectively share and assume the powers and responsibilities of the Chairman and Chief Executive Officer[36](index=36&type=chunk) - For the six months ended June 30, 2025, the Company has complied with all code provisions set out in the Corporate Governance Code[36](index=36&type=chunk) [Directors' Securities Transactions](index=19&type=section&id=Directors'%20Securities%20Transactions) All Directors confirm compliance with the Model Code set out in Appendix C3 of the Listing Rules during the reporting period and up to the announcement date, and no breaches of internal guidelines by employees were found - All Directors confirm that they have complied with the required standards set out in the Model Code for Securities Transactions by Directors of Listed Issuers during the six months ended June 30, 2025, and up to the date of this announcement[37](index=37&type=chunk) - The Company has adopted written guidelines regarding employees' dealings in the Company's securities, and no instances of non-compliance with such guidelines have been noted[37](index=37&type=chunk) [Events After Reporting Period](index=20&type=section&id=Events%20After%20Reporting%20Period) After the reporting period, on July 8, 2025, the Company entered into two subscription agreements to issue a total of 183.0 million new ordinary shares, raising net proceeds of approximately HK$65.38 million for renewable energy business development and general working capital - On July 8, 2025, the Company entered into the first subscription agreement with Zhongtian Hongxin Investment Co, Ltd for the allotment and issue of **120.0 million** new ordinary shares, with net proceeds of approximately **HK$42.8 million**[38](index=38&type=chunk) - On the same day, the Company entered into the second subscription agreement with Mr Zhu Gang for the allotment and issue of **63.0 million** new ordinary shares, with net proceeds of approximately **HK$22.58 million**[38](index=38&type=chunk) - The estimated aggregate net proceeds from the two subscriptions are approximately **HK$65.38 million**, intended for the development of the renewable energy business (approximately **HK$43.60 million**) and the Group's general working capital (approximately **HK$21.78 million**)[39](index=39&type=chunk) [Proposed Change of Company Name](index=21&type=section&id=Proposed%20Change%20of%20Company%20Name) The Board of Directors proposes to change the Company's English name to "CT Vision (International) Holdings Limited" and its Chinese name to "中天宏信（國際）控股有限公司" - The Company proposes to change its English name from "CT Vision S.L. (International) Holdings Limited" to "**CT Vision (International) Holdings Limited**"[40](index=40&type=chunk) - The Company proposes to change its Chinese secondary name from "中天順聯（國際）控股有限公司" to "**中天宏信（國際）控股有限公司**"[40](index=40&type=chunk) [Audit Committee and Review of Interim Results](index=21&type=section&id=Audit%20Committee%20and%20Review%20of%20Interim%20Results) The Audit Committee, comprising three independent non-executive directors, is responsible for reviewing the Group's accounting principles, audit, internal controls, and financial reporting matters, including the unaudited interim financial report for the current period - The Audit Committee comprises three independent non-executive directors: Dr Lian Dapeng (Chairman), Dr Tang Dajie, and Ms Liu Zhen[41](index=41&type=chunk) - The Audit Committee is primarily responsible for reviewing the accounting principles and practices adopted by the Group and discussing audit, internal control, and financial reporting matters, including the review of the unaudited interim financial report for the six months ended June 30, 2025[41](index=41&type=chunk) [Publication of Interim Results and Interim Report](index=21&type=section&id=Publication%20of%20Interim%20Results%20and%20Interim%20Report) This results announcement has been published on the Company's website and the HKEX website, and the interim report will be dispatched to shareholders and published in due course - This results announcement has been published on the Company's website www.ctvision994.com and the HKEX website www.hkexnews.hk[42](index=42&type=chunk) - The interim report will be dispatched to shareholders and will also be published on the HKEX website and the Company's website in due course[42](index=42&type=chunk) [Acknowledgement](index=22&type=section&id=Acknowledgement) The Board expresses its sincere gratitude to the Group's management, all employees, shareholders, business partners, and other professionals for their support - The Board extends its sincere gratitude to the Group's management and all employees for their dedication and collective efforts, and to all shareholders, business partners, and other professionals for their continuous support during the period[43](index=43&type=chunk) [Board Information](index=22&type=section&id=Board%20Information) As of the announcement date, the Board comprises four executive directors, one non-executive director, and three independent non-executive directors - As of the date of this announcement, the Board comprises four executive directors (Mr Wu Rui, Mr Guo Jianfeng, Mr Ding Ji, and Mr Sun Dexin), one non-executive director (Dr He Junjie), and three independent non-executive directors (Dr Tang Dajie, Dr Lian Dapeng, and Ms Liu Zhen)[45](index=45&type=chunk)

Company Information and Announcement Statement [Announcement Statement](index=1&type=section&id=Announcement%20Statement) C-Link Squared Limited (Stock Code: 1463) announced its unaudited condensed consolidated interim results for the six months ended June 30, 2025, with comparative figures for 2024 - C-Link Squared Limited (Stock Code: 1463) announced its unaudited condensed consolidated interim results for the six months ended June 30, 2025 [2](index=2&type=chunk)[3](index=3&type=chunk) Financial Statements [Unaudited Condensed Consolidated Statement of Comprehensive Income](index=1&type=section&id=Unaudited%20Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) The company reported a net loss of **RM165,332 thousand** for the six months ended June 30, 2025, a reversal from a net profit of **RM1,021 thousand** in 2024, mainly due to a substantial increase in administrative expenses | Indicator | 2025 (RM'000) | 2024 (RM'000) | | :--- | :--- | :--- | | Revenue from contracts with customers | 55,511 | 49,624 | | Cost of services and sales | (45,587) | (38,929) | | Gross profit | 9,924 | 10,695 | | Other income and gains | 1,013 | 414 | | Selling and distribution expenses | (136) | (448) | | Administrative expenses | (174,031) | (8,290) | | Finance costs | (114) | (159) | | (Loss)/Profit before income tax | (163,344) | 2,212 | | Income tax expense | (1,988) | (1,191) | | (Loss)/Profit for the period | (165,332) | 1,021 | | (Loss)/Earnings per share attributable to equity holders of the Company (RM sen) | (5.75) | 0.04 | - Loss for the period: The Group turned from a profit of **RM1,021 thousand** in 2024 to a loss of **RM165,332 thousand** in 2025 [4](index=4&type=chunk)[5](index=5&type=chunk) - Administrative expenses significantly increased from **RM8,290 thousand** in 2024 to **RM174,031 thousand** in 2025 [4](index=4&type=chunk) [Unaudited Condensed Consolidated Statement of Financial Position](index=3&type=section&id=Unaudited%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, total assets decreased significantly to **RM142,846 thousand** from **RM311,662 thousand** on December 31, 2024, primarily due to a substantial reduction in goodwill within non-current assets, leading to a decrease in net assets from **RM295,176 thousand** to **RM128,235 thousand** | Indicator | June 30, 2025 (RM'000) | December 31, 2024 (RM'000) | | :--- | :--- | :--- | | **Assets** | | | | Non-current assets | 59,309 | 224,730 | | Goodwill | 27,818 | 191,911 | | Current assets | 83,537 | 86,932 | | Total assets | 142,846 | 311,662 | | **Equity and Liabilities** | | | | Current liabilities | 13,229 | 14,172 | | Non-current liabilities | 1,382 | 2,314 | | Total liabilities | 14,611 | 16,486 | | Net assets | 128,235 | 295,176 | | Capital and reserves attributable to equity holders of the Company | 123,763 | 290,485 | - Goodwill significantly decreased from **RM191,911 thousand** on December 31, 2024, to **RM27,818 thousand** on June 30, 2025 [6](index=6&type=chunk) - Total assets decreased from **RM311,662 thousand** on December 31, 2024, to **RM142,846 thousand** on June 30, 2025 [6](index=6&type=chunk) Notes to the Condensed Consolidated Interim Financial Information [General Information](index=5&type=section&id=General%20Information) C-Link Squared Limited, an exempted company incorporated in the Cayman Islands, primarily engages in investment holding, with no significant changes in the nature of its principal businesses during the reporting period - The Company is an exempted company incorporated in the Cayman Islands, with its principal activity being investment holding [8](index=8&type=chunk) - Principal subsidiary businesses include outsourced document management services in Malaysia, outsourced insurance risk analysis and marketing services in China, distribution and sales of medical equipment and pharmaceutical products, and internet hospital and physical clinic services [9](index=9&type=chunk) - There were no significant changes in the principal nature of the Group's businesses during the reporting period [10](index=10&type=chunk) [Basis of Preparation and Changes in Accounting Policies](index=5&type=section&id=Basis%20of%20Preparation%20and%20Changes%20in%20Accounting%20Policies) The Group's unaudited condensed consolidated interim financial information is prepared in accordance with IFRS and HKEX Listing Rules, with the first-time adoption of IAS 21 (Amendment) 'Lack of Exchangeability' having no material impact - The financial information is prepared in accordance with IFRS and the HKEX Listing Rules, is unaudited by external auditors, but has been reviewed by the Audit Committee [11](index=11&type=chunk)[12](index=12&type=chunk) - The Group first adopted IAS 21 (Amendment) 'Lack of Exchangeability', which specifies how an entity assesses whether a currency is exchangeable and determines the spot exchange rate, and requires additional disclosures [13](index=13&type=chunk) - These amendments had no significant impact on the Group's results and financial position for the current or prior periods [13](index=13&type=chunk) [Operating Segment Information](index=6&type=section&id=Operating%20Segment%20Information) The Group has only one reportable operating segment, outsourced services, which accounts for over 90% of revenue, with major revenue sources from Malaysia, Singapore, and China, and top five customers contributing 62.1% of total revenue - The Group has only one reportable operating segment: providing outsourced services, which accounts for over **90%** of total revenue [14](index=14&type=chunk) [Geographical Information](index=7&type=section&id=Geographical%20Information) The Group's revenue from external customers primarily originates from Malaysia, China, and Singapore, with Malaysia contributing **RM39,909 thousand** for the six months ended June 30, 2025 | Geographical Market | 2025 (RM'000) | 2024 (RM'000) | | :--- | :--- | :--- | | Malaysia | 39,909 | 34,446 | | Singapore | 1,889 | 1,413 | | China | 13,713 | 13,765 | | Total revenue from contracts with customers | 55,511 | 49,624 | [Non-current Assets](index=7&type=section&id=Non-current%20Assets) As of June 30, 2025, the Group's non-current assets totaled **RM58,637 thousand**, primarily located in Malaysia and China, with China's non-current assets significantly decreasing from December 31, 2024 | Region | June 30, 2025 (RM'000) | December 31, 2024 (RM'000) | | :--- | :--- | :--- | | Malaysia | 30,322 | 31,488 | | China | 28,315 | 192,667 | | Total | 58,637 | 224,155 | - Non-current assets in China significantly decreased from **RM192,667 thousand** on December 31, 2024, to **RM28,315 thousand** on June 30, 2025 [16](index=16&type=chunk) [Information about Major Customers](index=7&type=section&id=Information%20about%20Major%20Customers) For the six months ended June 30, 2025, the Group's top five customer groups, primarily banks and insurance groups, contributed **62.1%** of total revenue, with Bank Group A accounting for **20.9%** | Customer Group | Percentage of Total Revenue (2025) | Sales (2025, RM'000) | | :--- | :--- | :--- | | Bank Group A | 20.9% | 11,583 | | Bank Group B | 14.9% | 8,253 | | Insurance Group C | 10.8% | 5,987 | | Bank Group D | 8.0% | 4,444 | | Bank Group E | 7.5% | 4,174 | | Total | 62.1% | 34,441 | - The percentage of total revenue from the top five customer groups increased from **59.3%** in 2024 to **62.1%** in 2025 [17](index=17&type=chunk)[18](index=18&type=chunk) [Revenue from Contracts with Customers](index=8&type=section&id=Revenue%20from%20Contracts%20with%20Customers) For the six months ended June 30, 2025, total revenue was **RM55,511 thousand**, primarily from outsourced services (document management, insurance marketing, enterprise software solutions), accounting for **98.5%** of total revenue - Total revenue increased from **RM49,624 thousand** in 2024 to **RM55,511 thousand** in 2025 [19](index=19&type=chunk) - Outsourced services (document management, insurance marketing, enterprise software solutions) collectively accounted for approximately **98.5%** of total revenue [19](index=19&type=chunk) [Disaggregation of Revenue](index=8&type=section&id=Disaggregation%20of%20Revenue) Outsourced document management services revenue grew **17.9%** to **RM38,008 thousand**, while medical equipment distribution and sales revenue significantly decreased to **RM358 thousand** | Service Type | 2025 (RM'000) | 2024 (RM'000) | | :--- | :--- | :--- | | Outsourced document management | 38,008 | 32,247 | | Outsourced insurance marketing | 12,850 | 11,412 | | Customised software | 3,168 | 2,659 | | Electronic document storage services | 622 | 953 | | Medical equipment distribution and sales | 358 | – | | Sales of pharmaceutical products | – | 2,240 | | Internet hospital and physical clinic services | 505 | 113 | | Total revenue | 55,511 | 49,624 | - Revenue from medical equipment distribution and sales significantly decreased, primarily due to weaker consumer spending sentiment and stricter contract terms imposed by partner manufacturers [19](index=19&type=chunk) [Performance Obligations](index=9&type=section&id=Performance%20Obligations) The Group's performance obligations vary by service type, with outsourced document management, insurance marketing, and internet hospital services fulfilled at a point in time, while customized software and electronic document storage are fulfilled over time - Performance obligations for outsourced document management, insurance risk analysis, insurance marketing, internet hospital, and physical clinic services are satisfied at a point in time [20](index=20&type=chunk)[21](index=21&type=chunk)[25](index=25&type=chunk) - Performance obligations for customised software and electronic document storage services are satisfied over time [22](index=22&type=chunk)[23](index=23&type=chunk) - Performance obligations for medical equipment and pharmaceutical product distribution and sales are satisfied when customers accept the goods [24](index=24&type=chunk) [Other Income and Gains](index=10&type=section&id=Other%20Income%20and%20Gains) For the six months ended June 30, 2025, other income and gains significantly increased by **144.7%** to **RM1,013 thousand**, primarily due to higher net exchange gains | Indicator | 2025 (RM'000) | 2024 (RM'000) | | :--- | :--- | :--- | | Bank interest income | 404 | 381 | | Net exchange gains | 392 | 31 | | Others | 217 | 2 | | Total | 1,013 | 414 | - Other income and gains increased by **144.7%** from **RM414 thousand** in 2024 to **RM1,013 thousand** in 2025 [27](index=27&type=chunk) - Net exchange gains were the primary driver of this increase, rising from **RM31 thousand** to **RM392 thousand** [27](index=27&type=chunk) [Finance Costs](index=10&type=section&id=Finance%20Costs) For the six months ended June 30, 2025, finance costs decreased by **28.3%** to **RM114 thousand**, mainly due to reduced interest expenses on term loans | Item | 2025 (RM'000) | 2024 (RM'000) | | :--- | :--- | :--- | | Interest expense on term loans | 88 | 145 | | Interest expense on overdrafts | 3 | – | | Interest expense on lease liabilities | 23 | 14 | | Total | 114 | 159 | - Finance costs decreased by **28.3%** from **RM159 thousand** in 2024 to **RM114 thousand** in 2025 [28](index=28&type=chunk) [(Loss)/Profit Before Income Tax](index=11&type=section&id=Loss)%2FProfit%20Before%20Income%20Tax) For the six months ended June 30, 2025, the Group recorded a loss before income tax of **RM163,344 thousand**, a reversal from a profit of **RM2,212 thousand** in the prior period, primarily due to a **RM164,093 thousand** goodwill impairment loss | Item | 2025 (RM'000) | 2024 (RM'000) | | :--- | :--- | :--- | | Staff costs | 6,097 | 5,606 | | Depreciation of property, plant and equipment | 518 | 602 | | Depreciation of right-of-use assets | 269 | 209 | | Amortisation of intangible assets | 823 | 823 | | Expected credit loss (reversal)/provision for trade receivables | (224) | 167 | | Goodwill impairment loss | 164,093 | – | | Legal and other professional fees | 885 | 1,093 | | Software license fees | 2,571 | 237 | | Research and development expenses | 166 | 1,203 | - A goodwill impairment loss of **RM164,093 thousand** was the primary reason for the shift from profit to loss before income tax [29](index=29&type=chunk) [Income Tax Expense](index=11&type=section&id=Income%20Tax%20Expense) For the six months ended June 30, 2025, income tax expense increased by **66.9%** to **RM1,988 thousand**, mainly due to higher taxable income from outsourced document management services in Malaysia | Item | 2025 (RM'000) | 2024 (RM'000) | | :--- | :--- | :--- | | Current income tax — Malaysia | 1,517 | 1,087 | | Current income tax — China | 2 | 2 | | Deferred tax expense | 469 | 102 | | Total income tax expense | 1,988 | 1,191 | - Income tax expense increased by **66.9%** from **RM1,191 thousand** in 2024 to **RM1,988 thousand** in 2025 [30](index=30&type=chunk) [Interim Dividend](index=12&type=section&id=Interim%20Dividend) The Board does not recommend an interim dividend for the six months ended June 30, 2025, consistent with the prior period - The Board does not recommend an interim dividend for the six months ended June 30, 2025 (2024: nil) [31](index=31&type=chunk) [(Loss)/Earnings Per Share Attributable to Equity Holders of the Company](index=12&type=section&id=Loss)%2FEarnings%20Per%20Share%20Attributable%20to%20Equity%20Holders%20of%20the%20Company) For the six months ended June 30, 2025, basic loss per share attributable to equity holders was **RM5.75 sen**, a reversal from basic earnings per share of **RM0.04 sen** in the prior period, with basic and diluted figures being identical due to no potential dilutive shares | Indicator | 2025 (RM'000) | 2024 (RM'000) | | :--- | :--- | :--- | | (Loss)/Profit for the period attributable to equity holders of the Company | (165,305) | 1,118 | | Weighted average number of ordinary shares in issue ('000 shares) | 2,874,251 | 2,811,018 | | Basic and diluted (RM sen) | (5.75) | 0.04 | - Basic (loss)/earnings per share shifted from **RM0.04 sen** in 2024 to **(RM5.75) sen** in 2025 [5](index=5&type=chunk) - Basic and diluted (loss)/earnings per share are identical as the Group has no outstanding potential dilutive shares [34](index=34&type=chunk) [Goodwill](index=13&type=section&id=Goodwill) For the six months ended June 30, 2025, the Group recognized a goodwill impairment loss of approximately **RM164,093 thousand**, primarily due to the suspension of certain business items within the internet hospital and physical clinic services cash-generating unit, reducing net book value from **RM191,911 thousand** to **RM27,818 thousand** | Indicator | December 31, 2024 (RM'000) | June 30, 2025 (RM'000) | | :--- | :--- | :--- | | Net book value at beginning of period | 191,911 | 191,911 | | Impairment loss recognised | – | (164,093) | | Net book value at end of period | 191,911 | 27,818 | - A goodwill impairment loss of approximately **RM164,093 thousand** has been recognised in administrative expenses in the unaudited condensed consolidated statement of comprehensive income [35](index=35&type=chunk) - The impairment is primarily due to the suspension of certain business items within the cash-generating unit for internet hospital and physical clinic services [35](index=35&type=chunk) [Trade and Other Receivables](index=14&type=section&id=Trade%20and%20Other%20Receivables) As of June 30, 2025, net trade receivables decreased to **RM17,661 thousand**, while prepayments, deposits, and other receivables increased to **RM8,956 thousand**, with the majority of trade receivables due within one month | Item | June 30, 2025 (RM'000) | December 31, 2024 (RM'000) | | :--- | :--- | :--- | | Net trade receivables | 17,661 | 19,211 | | Prepayments, deposits and other receivables | 8,956 | 5,546 | | Total | 26,617 | 24,757 | | Ageing | June 30, 2025 (RM'000) | December 31, 2024 (RM'000) | | :--- | :--- | :--- | | Within 1 month | 10,953 | 10,521 | | 1 to 2 months | 2,834 | 3,636 | | 2 to 3 months | 2,187 | 2,752 | | Over 3 months | 1,687 | 2,302 | | Total | 17,661 | 19,211 | - Trade receivables are non-interest bearing and typically have a credit period of **30 days** [36](index=36&type=chunk) [Trade Payables](index=15&type=section&id=Trade%20Payables) As of June 30, 2025, total trade payables significantly increased to **RM3,192 thousand**, with a notable rise in payables due within one to three months | Item | June 30, 2025 (RM'000) | December 31, 2024 (RM'000) | | :--- | :--- | :--- | | Amounts due to third parties | 3,167 | 1,340 | | Amounts due to a related party | 25 | 65 | | Total | 3,192 | 1,405 | | Ageing | June 30, 2025 (RM'000) | December 31, 2024 (RM'000) | | :--- | :--- | :--- | | Within 1 month | 514 | 1,151 | | 1 to 2 months | 996 | 254 | | 2 to 3 months | 958 | – | | Over 3 months | 724 | – | | Total | 3,192 | 1,405 | - Total trade payables increased from **RM1,405 thousand** on December 31, 2024, to **RM3,192 thousand** on June 30, 2025 [38](index=38&type=chunk) [Share Capital](index=16&type=section&id=Share%20Capital) As of June 30, 2025, the Company's issued and fully paid share capital was **RM5,189 thousand**, comprising **2,874,251 thousand shares**, unchanged since the acquisition of Shengji Investment Limited in January 2024 | Item | Number of Shares ('000 shares) | HKD'000 | RM'000 | | :--- | :--- | :--- | :--- | | As at January 1, 2024 | 2,400,000 | 8,000 | 4,233 | | Acquisition of subsidiary | 474,251 | 1,581 | 956 | | As at December 31, 2024, January 1, 2025 and June 30, 2025 | 2,874,251 | 9,581 | 5,189 | - On January 26, 2024, the Group issued **474,251,497** shares of the Company to acquire the entire equity interest in Shengji Investment Limited [39](index=39&type=chunk) [Significant Related Party Transactions](index=17&type=section&id=Significant%20Related%20Party%20Transactions) The Group engaged in sales and purchases of goods and services with related parties and paid key management personnel compensation, with a decrease in purchases from Compugraphic Forms Sdn. Bhd. and a slight decrease in key management personnel remuneration [Purchase and Sale of Goods and Services](index=17&type=section&id=Purchase%20and%20Sale%20of%20Goods%20and%20Services) For the six months ended June 30, 2025, the Group's purchases of consumables from related company Compugraphic Forms Sdn. Bhd. decreased to **RM173 thousand** from **RM237 thousand** in the prior period | Item | 2025 (RM'000) | 2024 (RM'000) | | :--- | :--- | :--- | | Purchases of consumables from a related company, Compugraphic Forms Sdn. Bhd. | 173 | 237 | - Mr. Ling Sheng Shyan, a director of the Company, is a shareholder of Compugraphic Forms Sdn. Bhd., making it a related party to the Group [40](index=40&type=chunk) [Key Management Personnel Remuneration](index=17&type=section&id=Key%20Management%20Personnel%20Remuneration) For the six months ended June 30, 2025, total remuneration for the Group's key management personnel slightly decreased to **RM529 thousand** from **RM554 thousand** in the prior period | Item | 2025 (RM'000) | 2024 (RM'000) | | :--- | :--- | :--- | | Directors' fees | 258 | 278 | | Salaries, allowances and benefits in kind | 240 | 242 | | Contributions to retirement benefit schemes | 31 | 34 | | Total | 529 | 554 | Management Discussion and Analysis [Business Review and Outlook](index=18&type=section&id=Business%20Review%20and%20Outlook) The Group's core businesses include outsourced document management in Malaysia and internet hospital services in China, with a strategic shift towards multi-channel digital delivery and plans for data center expansion and market share growth in Southeast Asia and China - The Group's business model has transitioned from costly physical mail delivery to multi-channel digital delivery via IT software solutions [43](index=43&type=chunk) - The acquisition of **100%** equity in Shengji was completed on January 26, 2024, marking the Group's entry into China's internet hospital and physical clinic services business [45](index=45&type=chunk) [Business Overview and Transformation](index=18&type=section&id=Business%20Overview%20and%20Transformation) The Group provides outsourced document management in Malaysia and insurance risk analysis, medical distribution, and internet hospital services in China, actively pursuing digital transformation and expanding its healthcare business through acquisition - Outsourced document management services in Malaysia are the Group's largest revenue source, encompassing electronic document delivery, document printing, and mail delivery [42](index=42&type=chunk) - The Group has successfully developed proprietary IT-focused enterprise software applications, driving digital transformation in Malaysia's banking, insurance, and retail sectors [42](index=42&type=chunk) - Through the acquisition of Shengji, the Group entered China's internet hospital and physical clinic services market, offering virtual and physical healthcare services [45](index=45&type=chunk) [Future Plans and Prospects](index=19&type=section&id=Future%20Plans%20and%20Prospects) The Group plans to expand data processing and technological capabilities by converting an existing building into a new data center, expected to be operational by early 2027, and to increase market share in Malaysia, Singapore, Vietnam, and China, focusing on advanced internet cloud technology and big data analytics in China - Plans are underway to convert an existing building into a new data center to upgrade IT infrastructure and expand outsourced document management services and enterprise software solutions [46](index=46&type=chunk) - The data center is expected to be completed by the end of 2026 and operational by early 2027, enhancing document hosting capabilities [48](index=48&type=chunk) - In China, plans include developing advanced internet cloud technology and big data analytics to create service systems for insurance and insurance-related clients, exploring opportunities in insurance big data, health management, and SME data cloud services [49](index=49&type=chunk) [Financial Review](index=21&type=section&id=Financial%20Review) For the six months ended June 30, 2025, total revenue increased to **RM55.5 million**, but a significant goodwill impairment loss in administrative expenses led to a net loss for the period, with declining gross profit and margin, while other income and gains grew substantially due to net exchange gains - Total revenue was approximately **RM55.5 million**, primarily derived from outsourced services (accounting for **98.5%**) [50](index=50&type=chunk) - Loss for the period was approximately **RM165.3 million**, mainly due to a goodwill impairment loss of approximately **RM164.1 million** [64](index=64&type=chunk) [Revenue from Contracts with Customers](index=21&type=section&id=Revenue%20from%20Contracts%20with%20Customers) Total revenue grew to **RM55.5 million**, driven by increases in outsourced document management and insurance marketing services, while medical equipment and pharmaceutical product distribution sales significantly decreased due to weaker consumer sentiment and stricter contract terms | Service Type | 2025 (RM million) | 2024 (RM million) | Year-on-year Growth/Decrease | | :--- | :--- | :--- | :--- | | Outsourced document management services | 38.0 | 32.2 | +17.9% | | Outsourced insurance risk analysis and marketing services | 12.9 | 11.4 | +12.6% | | Enterprise software solutions | 3.8 | 3.6 | +4.9% | | Medical equipment and pharmaceutical product distribution and sales | 0.4 | 2.2 | -81.8% | | Internet hospital and physical clinic services | 0.5 | 0.1 | +400% | | Total revenue | 55.5 | 49.6 | +11.9% | - The decrease in revenue from medical equipment and pharmaceutical product distribution and sales was mainly due to weaker consumer spending sentiment and stricter contract terms imposed by partner manufacturers in China [54](index=54&type=chunk) [Cost of Services and Sales](index=23&type=section&id=Cost%20of%20Services%20and%20Sales) Cost of services and sales increased by **17.1%** to **RM45.6 million**, primarily due to higher postage costs incurred for mail delivery services in Malaysia | Indicator | 2025 (RM million) | 2024 (RM million) | Year-on-year Growth | | :--- | :--- | :--- | :--- | | Cost of services and sales | 45.6 | 38.9 | +17.1% | - The increase in costs was mainly due to higher postage incurred for mail delivery services in Malaysia [56](index=56&type=chunk) [Gross Profit and Gross Margin](index=23&type=section&id=Gross%20Profit%20and%20Gross%20Margin) Gross profit decreased by **7.2%** to **RM9.9 million**, and gross margin declined by **3.7 percentage points** to **17.9%**, primarily due to an increased proportion of lower-margin mail delivery service revenue | Indicator | 2025 (RM million) | 2024 (RM million) | Year-on-year Change | | :--- | :--- | :--- | :--- | | Gross profit | 9.9 | 10.7 | -7.2% | | Gross margin | 17.9% | 21.6% | -3.7 percentage points | - The decrease in gross margin was mainly due to an increased proportion of revenue from lower-margin mail delivery services, driven by higher unit prices charged for these services [57](index=57&type=chunk) [Other Income and Gains](index=24&type=section&id=Other%20Income%20and%20Gains) Other income and gains significantly increased by **144.7%** to **RM1.0 million**, primarily driven by higher net exchange gains | Indicator | 2025 (RM million) | 2024 (RM million) | Year-on-year Growth | | :--- | :--- | :--- | :--- | | Other income and gains | 1.0 | 0.4 | +144.7% | - The main reason for the increase was net exchange gains [58](index=58&type=chunk) [Selling and Distribution Expenses](index=24&type=section&id=Selling%20and%20Distribution%20Expenses) Selling and distribution expenses decreased to **RM0.1 million**, primarily comprising promotional expenses in China and staff costs for outsourced insurance risk analysis, insurance marketing, and medical equipment distribution and sales | Indicator | 2025 (RM million) | 2024 (RM million) | | :--- | :--- | :--- | | Selling and distribution expenses | 0.1 | 0.4 | [Administrative Expenses](index=24&type=section&id=Administrative%20Expenses) Administrative expenses significantly increased by **1,999.3%** to **RM174.0 million**, primarily due to the recognition of approximately **RM164.1 million** in goodwill impairment loss | Indicator | 2025 (RM million) | 2024 (RM million) | Year-on-year Growth | | :--- | :--- | :--- | :--- | | Administrative expenses | 174.0 | 8.3 | +1,999.3% | - Primarily due to a goodwill impairment loss of approximately **RM164.1 million** related to the cash-generating unit for internet hospital and physical clinic services in China [60](index=60&type=chunk) [Finance Costs](index=24&type=section&id=Finance%20Costs) Finance costs decreased by **28.3%** to **RM114 thousand**, mainly due to a reduction in the outstanding balance of term loans | Indicator | 2025 (RM'000) | 2024 (RM'000) | Year-on-year Decrease | | :--- | :--- | :--- | :--- | | Finance costs | 114 | 159 | -28.3% | - Mainly due to a decrease in the outstanding balance of the Group's term loans [61](index=61&type=chunk) [(Loss)/Profit Before Income Tax](index=24&type=section&id=Loss)%2FProfit%20Before%20Income%20Tax) The Group shifted from a profit before income tax of **RM2.2 million** in 2024 to a loss of **RM163.3 million** in 2025, primarily due to a goodwill impairment loss | Indicator | 2025 (RM million) | 2024 (RM million) | | :--- | :--- | :--- | | (Loss)/Profit before income tax | (163.3) | 2.2 | - The shift from profit to loss was primarily due to a goodwill impairment loss of approximately **RM164.1 million** [62](index=62&type=chunk) [Income Tax Expense](index=25&type=section&id=Income%20Tax%20Expense) Income tax expense increased by **66.9%** to **RM2.0 million**, mainly due to higher taxable income from outsourced document management services in Malaysia | Indicator | 2025 (RM million) | 2024 (RM million) | Year-on-year Growth | | :--- | :--- | :--- | :--- | | Income tax expense | 2.0 | 1.2 | +66.9% | - Mainly due to an increase in taxable income from outsourced document management services in Malaysia [63](index=63&type=chunk) [(Loss)/Profit for the Period](index=25&type=section&id=Loss)%2FProfit%20for%20the%20Period) The Group shifted from a profit for the period of **RM1.0 million** in 2024 to a loss of **RM165.3 million** in 2025, primarily due to a goodwill impairment loss | Indicator | 2025 (RM million) | 2024 (RM million) | | :--- | :--- | :--- | | (Loss)/Profit for the period | (165.3) | 1.0 | - The shift from profit to loss was primarily due to a goodwill impairment loss of approximately **RM164.1 million** [64](index=64&type=chunk) [Goodwill and Impairment Loss of Goodwill](index=25&type=section&id=Goodwill%20and%20Impairment%20Loss%20of%20Goodwill) The Group recognized a goodwill impairment loss of approximately **RM164.1 million** as of June 30, 2025, primarily related to the acquisition of Shengji Group's internet hospital and physical clinic services business, due to its underperformance against expectations amid economic downturns and market challenges - As of June 30, 2025, the goodwill impairment loss for the Shengji Group cash-generating unit was approximately **RM164,093 thousand** [66](index=66&type=chunk) - The impairment loss was primarily due to Shengji Group's financial performance not meeting the cash flow forecasts as of December 31, 2024 [70](index=70&type=chunk) [Background Information](index=25&type=section&id=Background%20Information) The Company completed the acquisition of **100%** equity in Shengji Group on January 26, 2024, for an consideration share fair value of approximately **RM232,349 thousand**, recognizing goodwill of approximately **RM215,234 thousand** related to its internet hospital and physical clinic services in China - The acquisition of **100%** of Shengji Group's issued shares was completed on January 26, 2024; Shengji Group primarily provides internet hospital and physical clinic services in China [65](index=65&type=chunk) - Goodwill of approximately **RM215,234 thousand** was recognized on the completion date [65](index=65&type=chunk) [Goodwill Impairment Loss as at June 30, 2025](index=26&type=section&id=Goodwill%20Impairment%20Loss%20as%20at%20June%2030%2C%202025) As of June 30, 2025, the suspension of certain business items within Shengji Group's cash-generating unit led to a goodwill impairment loss of approximately **RM164,093 thousand**, reducing the net book value to **RM27,818 thousand**, with recoverability assessed using the value-in-use method under IAS 36 | Indicator | Goodwill as at June 30, 2025 (after impairment loss, RM'000) | Goodwill as at December 31, 2024 (net of impairment loss, RM'000) | Goodwill impairment loss for the six months ended June 30, 2025 (RM'000) | | :--- | :--- | :--- | :--- | | Shengji Group cash-generating unit | 27,818 | 191,911 | 164,093 | - A goodwill impairment loss of approximately **RM164,093 thousand** has been recognised and included in administrative expenses in the unaudited condensed consolidated statement of comprehensive income [35](index=35&type=chunk) - The impairment assessment was conducted in accordance with IAS 36 'Impairment of Assets', with the recoverable amount measured by estimating the value in use of the Shengji Group cash-generating unit to which goodwill is allocated [66](index=66&type=chunk)[67](index=67&type=chunk) [Valuation Methodology](index=27&type=section&id=Valuation%20Methodology) The valuer used the income approach (discounted cash flow method) to determine the value in use of the Shengji Group cash-generating unit, based on five-year financial budgets and management's future business outlook, in compliance with IFRS 13 'Fair Value Measurement' - The valuer adopted the income approach to arrive at the value in use of the cash-generating unit, which discounts future cash flows to a single current amount [68](index=68&type=chunk) - The valuation is based on financial budgets covering a five-year period, with key assumptions including growth rates, discount rates, and management's views on future business prospects [68](index=68&type=chunk) [Key Valuation Assumptions](index=27&type=section&id=Key%20Valuation%20Assumptions) Valuation assumptions include formal approvals, reasonable financial forecasts, sufficient technical personnel, stable tax laws, and no significant adverse political, legal, economic, or financial changes; however, Shengji Group's actual financial performance fell short due to economic downturns, reduced consumer spending, stricter cooperation terms, regulatory changes, increased competition, and slower healthcare investment - Key assumptions include: all relevant legal approvals and business certificates will be formally obtained and renewed; forecasts in the financial information are reasonable and will be achieved; there is an adequate supply of technical personnel; and no significant changes will occur in tax laws, tax rates, political, legal, economic, or financial conditions [69](index=69&type=chunk)[71](index=71&type=chunk) - Shengji Group's financial performance fell short of expectations due to: reduced online sales of pharmaceutical and health products from economic downturns and stricter cooperation terms; decreased demand for insurance marketing services due to reduced corporate budgets and increased competition; health consulting services affected by regulatory policy changes and macroeconomic environment; medical equipment sales impacted by supply chain instability, raw material price fluctuations, and slower industry investment; and offline sales of pharmaceutical and health products affected by policy adjustments and reduced consumption [70](index=70&type=chunk)[72](index=72&type=chunk) - Based on cash flow forecasts, the recoverable amount of Shengji Group's cash-generating unit as of June 30, 2025, was approximately **RM28,300 thousand**, resulting in a recognized goodwill impairment loss of approximately **RM164,093 thousand** [73](index=73&type=chunk) [Interim Dividend](index=30&type=section&id=Interim%20Dividend) The Board does not recommend an interim dividend for the six months ended June 30, 2025, consistent with the prior period - The Board does not recommend an interim dividend for the six months ended June 30, 2025 (2024: nil) [74](index=74&type=chunk) [Liquidity and Financial Resources](index=30&type=section&id=Liquidity%20and%20Financial%20Resources) As of June 30, 2025, total loans and borrowings decreased by **31.0%** to approximately **RM3.0 million**, with cash and bank balances at approximately **RM54.6 million**, maintaining a robust financial position with a current ratio of approximately **6.3 times** | Indicator | June 30, 2025 (RM million) | December 31, 2024 (RM million) | Year-on-year Change | | :--- | :--- | :--- | :--- | | Total loans and borrowings | 3.0 | 4.3 | -31.0% | | Cash and bank balances | 54.6 | 59.7 | -8.5% | | Current ratio | 6.3 times | 6.1 times | +0.2 times | - Loans and borrowings bear interest at floating rates ranging from **4.75%** to **6.85%** and are denominated in Ringgit [75](index=75&type=chunk) - The Group maintains a sound financial position, with a net current asset position, capable of meeting its day-to-day operational obligations [76](index=76&type=chunk) [Contingent Liabilities](index=30&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 [77](index=77&type=chunk) [Capital Commitments](index=31&type=section&id=Capital%20Commitments) As of June 30, 2025, the Group's capital commitment for converting an existing building into a data center was approximately **RM0.1 million**, to be funded by proceeds from share offer and internal resources | Item | June 30, 2025 (RM million) | December 31, 2024 (RM million) | | :--- | :--- | :--- | | Capital commitment for data center conversion | 0.1 | Nil | - The capital commitment will be funded by proceeds from the Group's share offer and internal resources [78](index=78&type=chunk) [Funding and Treasury Policy](index=31&type=section&id=Funding%20and%20Treasury%20Policy) The Group adopts a prudent financial management approach, maintaining a healthy liquidity position and closely monitoring liquidity risks, without using any risk hedging instruments for the six months ended June 30, 2025 - The Group adopts a prudent financial management approach, maintaining a healthy liquidity position [79](index=79&type=chunk) - The Board closely monitors the Group's liquidity position to ensure it can meet its funding requirements [79](index=79&type=chunk) - For the six months ended June 30, 2025, the Group did not use any risk hedging instruments [79](index=79&type=chunk) [Foreign Exchange Risk](index=31&type=section&id=Foreign%20Exchange%20Risk) Operating primarily in Malaysia and China, with transactions settled in Ringgit, Singapore Dollars, and Renminbi, the Board believes future foreign exchange fluctuations will not significantly impact operations and has not adopted a formal hedging policy or used derivative contracts for the six months ended June 30, 2025 - The Group primarily operates in Malaysia and China, with most transactions settled in Ringgit, Singapore Dollars, and Renminbi [80](index=80&type=chunk) - The Board believes that future foreign exchange fluctuations will not have any significant impact on the Group's operations [80](index=80&type=chunk) - For the six months ended June 30, 2025, the Group did not use any derivative contracts to hedge foreign exchange risk, nor has it adopted a formal hedging policy [80](index=80&type=chunk) [Gearing Ratio](index=31&type=section&id=Gearing%20Ratio) As of June 30, 2025, the Group's gearing ratio increased to approximately **2.4%** from **1.5%** on December 31, 2024, primarily due to a reduction in total equity attributable to equity holders of the Company caused by a goodwill impairment loss | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Gearing ratio | 2.4% | 1.5% | - The increase in the gearing ratio was primarily attributable to a decrease in total equity attributable to equity holders of the Company, due to a goodwill impairment loss of approximately **RM164.1 million** [81](index=81&type=chunk) [Material Investments, Material Acquisitions and Disposals](index=32&type=section&id=Material%20Investments%2C%20Material%20Acquisitions%20and%20Disposals) For the six months ended June 30, 2025, the Group had no material investments, acquisitions, or disposals of subsidiaries, associates, or joint ventures - The Group's management adopts a prudent investment strategy, utilizing surplus cash to generate stable interest income from low-risk investment products [82](index=82&type=chunk) - For the six months ended June 30, 2025, the Group had no material investments, nor did it undertake any material acquisitions or disposals [82](index=82&type=chunk) [Future Plans for Material Investments and Capital Assets](index=32&type=section&id=Future%20Plans%20for%20Material%20Investments%20and%20Capital%20Assets) Except as disclosed in the 'Share Issue and Use of Proceeds from Share Offer' section of this announcement, the Group has no other future plans for material investments and capital assets as of the date of this announcement - Except for the share issue and use of proceeds from the share offer, the Group has no other future plans for material investments and capital assets as of the date of this announcement [83](index=83&type=chunk) [Purchase, Sale or Redemption of the Company's Shares](index=32&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company%27s%20Shares) 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, and the Company held no 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 [84](index=84&type=chunk) - As of June 30, 2025, and the date of this announcement, the Company held no treasury shares [84](index=84&type=chunk) [Events After the Reporting Period](index=32&type=section&id=Events%20After%20the%20Reporting%20Period) Except as disclosed in this announcement, the Group had no significant events after June 30, 2025, up to the date of this announcement - Except as disclosed in this announcement, the Group had no significant events after June 30, 2025, up to the date of this announcement [85](index=85&type=chunk) [Employees and Remuneration Policy](index=32&type=section&id=Employees%20and%20Remuneration%20Policy) As of June 30, 2025, the Group had approximately **192 employees** with total remuneration costs of approximately **RM6.1 million**, and its remuneration policy is based on qualifications, performance, market trends, and operating results, offering discretionary bonuses, share options, and other benefits | Indicator | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Number of employees | 192 | 173 | | Total staff costs (RM million) | 6.1 | 5.6 | - The remuneration policy is formulated based on employees' qualifications, capabilities, work performance, industry experience, relevant market trends, and the Group's operating results [87](index=87&type=chunk) - Discretionary bonuses and other benefits are provided, including share options, retirement benefits, medical subsidies, pensions, and training programs [87](index=87&type=chunk) [Share Option Scheme](index=33&type=section&id=Share%20Option%20Scheme) The Company adopted a share option scheme on March 11, 2020, but no share options have been granted under the scheme since its adoption - The Company adopted a share option scheme on March 11, 2020 [88](index=88&type=chunk) - Since its adoption, the Company has not granted any share options under the share option scheme [88](index=88&type=chunk) [Share Issue and Use of Proceeds from Share Offer](index=33&type=section&id=Share%20Issue%20and%20Use%20of%20Proceeds%20from%20Share%20Offer) The Company raised net proceeds of approximately **HKD73.7 million** from its 2020 share offer, with funds reallocated for purposes such as acquiring and converting an existing building into a data center, and for software development and marketing, with **HKD36.1 million** utilized and **HKD37.6 million** unutilized as of June 30, 2025 - Net proceeds from the share offer amounted to approximately **HKD73.7 million** [89](index=89&type=chunk) - The use of proceeds has been changed multiple times, including reallocating funds originally for data center construction to acquire an existing building and convert it into a data center [89](index=89&type=chunk)[90](index=90&type=chunk) | Purpose | Approximate Percentage of Total Net Proceeds | Proposed Use (Approx. HKD million) | Actual Amount of Net Proceeds Utilised as at June 30, 2025 (Approx. HKD million) | Actual Amount of Net Proceeds Unutilised as at June 30, 2025 (Approx. HKD million) | Expected Timeline for Utilisation of Unutilised Net Proceeds | | :--- | :--- | :--- | :--- | :--- | :--- | | To enhance technical capabilities and develop other vertical/parallel market capabilities | 89.8% | 66.2 | (30.3) | 35.9 | | | — To acquire an existing building and convert it into a Tier 2 data center and upgrade IT infrastructure | 76.7% | 56.5 | (20.6) | 35.9 | December 31, 2026 | | — To engage external software development vendors and develop new applications under the software development plan | 13.1% | 9.7 | (9.7) | – | | | To expand local market share and explore regional expansion to further capture market share | 10.2% | 7.5 | (5.8) | 1.7 | | | — To increase the Group's marketing and promotion efforts to acquire new customers | 10.2% | 7.5 | (5.8) | 1.7 | December 31, 2025 | | Total | 100.0% | 73.7 | (36.1) | 37.6 | | [Issue of Securities](index=36&type=section&id=Issue%20of%20Securities) During the reporting period, the Company did not issue any securities for cash or sell any treasury shares - During the reporting period, the Company did not issue any of its securities for cash or sell any treasury shares for cash [94](index=94&type=chunk) Corporate Governance [Standard Code for Securities Transactions by Directors](index=36&type=section&id=Standard%20Code%20for%20Securities%20Transactions%20by%20Directors) The Company adopted the Standard Code as its code of conduct for directors' securities transactions, with all directors confirming compliance and no breaches by employees for the six months ended June 30, 2025 - The Company has adopted the Standard Code as set out in Appendix C3 of the Listing Rules as its code of conduct for directors' securities transactions [95](index=95&type=chunk) - All directors confirmed compliance with the Standard Code for the six months ended June 30, 2025 [95](index=95&type=chunk) - The Company found no instances of employees breaching the Standard Code [95](index=95&type=chunk) [Code on Corporate Governance Practices](index=36&type=section&id=Code%20on%20Corporate%20Governance%20Practices) For the six months ended June 30, 2025, the Company complied with all applicable provisions of the Corporate Governance Code, except for the combined roles of Chairman and CEO held by Mr. Ma Shengcong, which the Board deems in the best interest of the Company and its shareholders - The Company complied with all applicable code provisions of the Corporate Governance Code, except for the combined roles of Chairman and Chief Executive Officer held by Mr. Ma Shengcong, which deviates from code provision C.2.1 [96](index=96&type=chunk)[97](index=97&type=chunk) - The Board believes that Mr. Ma Shengcong's dual role is most suitable, and the current arrangement is beneficial and in the overall interest of the Company and its shareholders [97](index=97&type=chunk) - The Board will review the effectiveness of its structure and composition from time to time based on prevailing circumstances and consider separating the roles of Chairman and Chief Executive Officer at an appropriate juncture [98](index=98&type=chunk) [Audit Committee and Review of Interim Results](index=38&type=section&id=Audit%20Committee%20and%20Review%20of%20Interim%20Results) The Audit Committee, comprising three independent non-executive directors chaired by Mr. Yang Junhui, reviewed the Group's accounting principles, policies, and interim financial information, confirming compliance with relevant standards, though the interim financial information was not audited or reviewed by an independent auditor - The Audit Committee comprises three independent non-executive directors, with Mr. Yang Junhui serving as Chairman [99](index=99&type=chunk) - The Audit Committee has reviewed the accounting principles and policies adopted by the Group, as well as the Company's unaudited condensed consolidated interim financial information and interim results announcement for the six months ended June 30, 2025 [99](index=99&type=chunk) - The Company's unaudited condensed consolidated interim financial information for the six months ended June 30, 2025, has not been audited or reviewed by the Company's independent auditor [99](index=99&type=chunk) [Publication of Interim Results Announcement and Interim Report](index=38&type=section&id=Publication%20of%20Interim%20Results%20Announcement%20and%20Interim%20Report) This interim results announcement has been published on the HKEX and Company websites, with the full interim report containing all information required by the Listing Rules to be dispatched to shareholders and published on relevant websites in due course - This interim results announcement is published on the HKEX website (http://www.hkexnews.hk) and the Company's website (http://www.clinksquared.com) [100](index=100&type=chunk) - The Group's interim report for the six months ended June 30, 2025, containing all information required by the Listing Rules, will be dispatched to shareholders in due course in accordance with the Listing Rules and the Company's corporate communication arrangements [100](index=100&type=chunk) [Board Information](index=38&type=section&id=Board%20Information) As of the date of this announcement, the Board comprises executive directors Mr. Ma Shengcong and Ms. Zhang Ying; non-executive directors Mr. Ling Sheng Shyan and Dr. Wu Xianyi; and independent non-executive directors Mr. Yang Junhui, Mr. Qian Jianguang, and Mr. Xie Yaozu - Executive Directors are Mr. Ma Shengcong and Ms. Zhang Ying [102](index=102&type=chunk) - Non-executive Directors are Mr. Ling Sheng Shyan and Dr. Wu Xianyi [102](index=102&type=chunk) - Independent Non-executive Directors are Mr. Yang Junhui, Mr. Qian Jianguang, and Mr. Xie Yaozu [102](index=102&type=chunk)

香港交易及結算所有限公司及香港聯合交易所有限公司對本公佈之內容概不負責， 對其準確性或完整性亦不發表任何聲明，並明確表示，概不就因本公佈全部或任何 部分內容而產生或因倚賴該等內容而引致之任何損失承擔任何責任。 （於百慕達註冊成立之有限公司） （股份代號：7） 截至二零二五年六月三十日止六個月的 未經審核中期業績公佈 智富資源投資控股集團有限公司（「本公司」連同其附屬公司「本集團」）董事（「董 事」）會（「董事會」）公佈本集團截至二零二五年六月三十日止六個月之未經審核綜 合業績。本公佈（載有本公司截至二零二五年六月三十日止六個月的中期報吿（「二 零二五年中期報吿」）全文）符合香港聯合交易所有限公司（「聯交所」）證券上市規則 （「上市規則」）有關隨附全年業績公佈初步資料之相關規定。二零二五年中期報吿 將可於聯交所網站(www.hkexnews.hk)及本公司網站(www.wisdom007.com)查閱。 1 繼續暫停買賣 本公司股份已自二零二四年四月二日（星期二）上午九時正起在聯交所暫停買賣，並 將繼續暫停買賣直至本公司滿足復牌指引中規定的所有要求為止。 承董事會命 智富資源投資控股集團有限公司 主席 許世平 ...

[Performance Highlights](index=1&type=section&id=Performance%20Highlights) The Group's unaudited interim results for the six months ended June 30, 2025, show increased LPG and LNG sales and revenue, a decrease in CNG sales, a significant rise in total revenue, and a reduction in gross profit and period loss Key Operating and Financial Indicators for H1 2025 | Indicator | Six Months Ended June 30, 2025 (Approx.) | Six Months Ended June 30, 2024 (Approx.) | Change | Original Reference | |---|---|---|---|---| Changes in Key Product Sales Volume | Product | Sales Volume for Six Months Ended June 30, 2025 | Sales Volume for Six Months Ended June 30, 2024 | Change | Original Reference | |---|---|---|---|---| [Financial Statements](index=2&type=section&id=Financial%20Statements) [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=2&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For the six months ended June 30, 2025, Group revenue significantly increased to RMB1,140.3 million, while gross profit slightly decreased; both loss for the period and loss attributable to equity holders narrowed, with basic and diluted loss per share remaining at RMB0.02 Key Data from Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income | Indicator | Six Months Ended June 30, 2025 (RMB '000) | Six Months Ended June 30, 2024 (RMB '000) | Change | |---|---|---|---| - Total loss for the period expanded to **RMB5,069 thousand** from **RMB3,257 thousand** in the prior period, primarily due to exchange differences[8](index=8&type=chunk) [Condensed Consolidated Statement of Financial Position](index=4&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the Group's total assets and current liabilities both increased, leading to a slight decrease in net current assets; property, plant and equipment and right-of-use assets within non-current assets grew, while interest-bearing borrowings significantly increased, impacting the capital structure Key Data from Condensed Consolidated Statement of Financial Position | Indicator | June 30, 2025 (RMB '000) | December 31, 2024 (RMB '000) | Change | |---|---|---|---| - Pledged and restricted deposits increased from **RMB615,000 thousand** as of December 31, 2024, to **RMB815,000 thousand** as of June 30, 2025[10](index=10&type=chunk) - Interest-bearing borrowings increased from **RMB720,000 thousand** as of December 31, 2024, to **RMB960,000 thousand** as of June 30, 2025[10](index=10&type=chunk) [Notes to the Unaudited Interim Financial Report](index=6&type=section&id=Notes%20to%20the%20Unaudited%20Interim%20Financial%20Report) [Principal Accounting Policies](index=6&type=section&id=Principal%20Accounting%20Policies) This condensed interim financial information is prepared in accordance with HKEX Listing Rules and IAS 34, reviewed by the audit committee, with consistent accounting policies and no material impact from new/revised IFRS - The condensed interim financial information is unaudited but has been reviewed by the audit committee[14](index=14&type=chunk) - Current period accounting policies are consistent with those applied in the consolidated financial statements for the year ended December 31, 2024, with no material impact from new/revised IFRS on current period results or financial position[15](index=15&type=chunk) [Segment Information](index=7&type=section&id=Segment%20Information) The Group operates in two main segments, retail and wholesale, with primary revenue from LPG, CNG, and LNG sales in China; as of June 30, 2025, wholesale accounted for 95.3% of total revenue, and retail for 4.7% - The Group has two reportable segments: retail, primarily selling to end-users and industrial customers via gas stations, and wholesale, primarily selling to gas wholesalers[18](index=18&type=chunk) Segment Revenue Comparison | Segment | Revenue for Six Months Ended June 30, 2025 (RMB '000) | Revenue for Six Months Ended June 30, 2024 (RMB '000) | Change | |---|---|---|---| - For the six months ended June 30, 2025, and 2024, no single external customer accounted for **10% or more** of the Group's revenue[22](index=22&type=chunk) [Net Other Income](index=10&type=section&id=Net%20Other%20Income) For the six months ended June 30, 2025, the Group's net other income increased to RMB10.0 million, primarily due to higher interest and investment income, and significant growth in operating lease rental income Net Other Income Details | Item | 2025 (RMB '000) | 2024 (RMB '000) | Change | |---|---|---|---| - Interest income increased from **RMB6,903 thousand** in 2024 to **RMB7,181 thousand** in 2025[26](index=26&type=chunk) - New investment income of **RMB912 thousand** and net income from disposal of a subsidiary of **RMB597 thousand** were recorded[26](index=26&type=chunk) [Loss Before Tax](index=11&type=section&id=Loss%20Before%20Tax) For the six months ended June 30, 2025, the Group's loss before tax slightly narrowed to RMB3.3 million from RMB3.5 million in the prior period, with increased finance costs, staff costs, and other operating expenses, while depreciation and short-term lease expenses decreased Components of Loss Before Tax | Item | 2025 (RMB '000) | 2024 (RMB '000) | Change | |---|---|---|---| - Finance costs increased to **RMB5,410 thousand**, primarily due to higher bank loan interest[27](index=27&type=chunk) - Staff costs increased to **RMB15,118 thousand**, mainly due to higher severance payments[28](index=28&type=chunk) - Depreciation expense decreased to **RMB5,251 thousand**, primarily because some assets were fully depreciated[30](index=30&type=chunk) - Other operating expenses increased to **RMB11,419 thousand**, mainly due to losses from disposal of property, plant and equipment[31](index=31&type=chunk) [Taxation](index=12&type=section&id=Taxation) For the six months ended June 30, 2025, the Group's income tax expense decreased to RMB0.3 million from RMB0.4 million in the prior period, mainly due to the generation of deferred tax and reversal of temporary differences Income Tax Expense Details | Item | 2025 (RMB '000) | 2024 (RMB '000) | Change | |---|---|---|---| - Subsidiaries in China (excluding Hong Kong) are subject to enterprise income tax at a rate of **25%**[37](index=37&type=chunk) [Loss Per Share](index=13&type=section&id=Loss%20Per%20Share) For the six months ended June 30, 2025, basic loss per share remained at RMB0.02, consistent with the prior period, with no potential dilutive shares issued in current or prior periods Loss Per Share Data | Indicator | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change | |---|---|---|---| - The weighted average number of ordinary shares remained unchanged at **216,000,000 shares** for both periods[33](index=33&type=chunk) - No potential dilutive shares were issued for the six months ended June 30, 2025, and 2024[34](index=34&type=chunk) [Property, Plant and Equipment and Right-of-Use Assets](index=13&type=section&id=Property%2C%20Plant%20and%20Equipment%20and%20Right-of-Use%20Assets) For the six months ended June 30, 2025, there were no additions to right-of-use assets, while property, plant and equipment increased by approximately RMB0.01 million, and disposals of property, plant and equipment with a net book value of approximately RMB1.0 million resulted in a disposal loss of approximately RMB1.0 million - There were no additions to right-of-use assets in the first half of 2025[35](index=35&type=chunk) - Additions to property, plant and equipment amounted to approximately **RMB0.01 million** (2024: approximately RMB0.3 million)[36](index=36&type=chunk) - Losses from disposal of property, plant and equipment amounted to approximately **RMB1.0 million** (2024: approximately RMB0.1 million)[36](index=36&type=chunk) [Trade and Other Receivables](index=14&type=section&id=Trade%20and%20Other%20Receivables) As of June 30, 2025, total trade and other receivables increased to RMB195.1 million from RMB158.1 million as of December 31, 2024, with growth in amounts due from third parties and joint ventures, and a significant increase in receivables over 12 months Trade and Other Receivables Details | Item | June 30, 2025 (RMB '000) | December 31, 2024 (RMB '000) | Change | |---|---|---|---| Ageing Analysis of Trade and Other Receivables | Ageing | June 30, 2025 (RMB '000) | December 31, 2024 (RMB '000) | Change | |---|---|---|---| - No trade and other receivables are expected to be recovered after **12 months**[38](index=38&type=chunk) [Trade and Other Payables](index=15&type=section&id=Trade%20and%20Other%20Payables) As of June 30, 2025, total trade and other payables increased to RMB8.6 million from RMB7.3 million as of December 31, 2024, primarily unsecured, interest-free, with credit terms ranging from 30 to 90 days Trade and Other Payables Details | Item | June 30, 2025 (RMB '000) | December 31, 2024 (RMB '000) | Change | |---|---|---|---| Ageing Analysis of Trade and Other Payables | Ageing | June 30, 2025 (RMB '000) | December 31, 2024 (RMB '000) | Change | |---|---|---|---| - Trade and other payables have credit terms ranging from **30 to 90 days**[40](index=40&type=chunk) [Dividends](index=15&type=section&id=Dividends) The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025, consistent with the prior period - The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025 (2024: **RMB nil**)[42](index=42&type=chunk) [Management Discussion and Analysis](index=16&type=section&id=Management%20Discussion%20and%20Analysis) [Industry Review](index=16&type=section&id=Industry%20Review) In H1 2025, China's GDP grew by 5.3% amid a complex global economy, with increasing clean energy share; LPG prices fluctuated, but the Group saw strong LPG sales and revenue growth, while the natural gas market faced oversupply, impacting CNG but boosting LNG - In H1 2025, China's GDP grew by **5.3%** year-on-year, with an increasing share of clean energy in the energy market[43](index=43&type=chunk) - LPG market prices showed a 'rise first, then fall' trend, with loose supply and lower-than-expected demand, yet the Group's LPG sales volume and revenue increased by **81.1%** and **81.5%** year-on-year, respectively[44](index=44&type=chunk) - The natural gas market experienced oversupply due to a warm winter, with consumption slightly down by **0.42%** year-on-year; the Group's CNG sales and revenue decreased, while LNG sales and revenue increased[45](index=45&type=chunk) [Business Review](index=17&type=section&id=Business%20Review) As a comprehensive LPG and natural gas supplier in China, operating in Guangdong, Henan, and Hebei, the Group saw significant LPG revenue growth, a decline in CNG revenue due to policy adjustments, and an increase in LNG revenue, operating 19 gas stations and 3 petrol stations as of June 30, 2025 [LPG Business](index=17&type=section&id=LPG%20Business) The Group's LPG business has a complete industry chain, including self-owned terminals and storage facilities, procurement from domestic petrochemical refineries, and third-party logistics; for the six months ended June 30, 2025, LPG sales revenue was approximately RMB1,056.3 million, an increase of approximately RMB474.1 million year-on-year, driven by higher sales volume - The Group owns **1 LPG terminal** with storage facilities and **3 LPG civil stations** in Jiangmen City, Guangdong Province[48](index=48&type=chunk) - LPG sales revenue was approximately **RMB1,056.3 million**, an increase of approximately **RMB474.1 million** compared to the same period in 2024[50](index=50&type=chunk) [CNG Business](index=18&type=section&id=CNG%20Business) The Group operates 12 CNG vehicle gas stations, 1 LNG-CNG vehicle gas station, and 3 CNG mother stations in Henan Province; for the six months ended June 30, 2025, CNG sales revenue was approximately RMB68.1 million, a decrease of approximately RMB14.4 million year-on-year, primarily due to reduced sales volume from energy policy adjustments - The Group operates **12 CNG vehicle gas stations**, **1 LNG-CNG vehicle gas station**, and **3 CNG mother stations** in Henan Province[51](index=51&type=chunk) - CNG sales revenue was approximately **RMB68.1 million**, a decrease of approximately **RMB14.4 million** compared to the same period in 2024[52](index=52&type=chunk) [LNG Business](index=18&type=section&id=LNG%20Business) The Group operates one LNG-CNG vehicle gas station in Henan Province, benefiting from rapid development in the policy-supported LNG market; for the six months ended June 30, 2025, LNG sales revenue was approximately RMB10.8 million, an increase of approximately RMB5.9 million year-on-year, primarily due to higher sales volume - The Group operates **1 LNG-CNG vehicle gas station** in Henan Province[53](index=53&type=chunk) - LNG sales revenue was approximately **RMB10.8 million**, an increase of approximately **RMB5.9 million** compared to the same period in 2024[54](index=54&type=chunk) [Overall Business](index=19&type=section&id=Overall%20Business) For the six months ended June 30, 2025, the Group's total revenue was approximately RMB1,140.3 million, an increase of approximately RMB462.7 million year-on-year, primarily driven by increased LPG sales; the Group operates a total of 22 stations, including 19 gas stations and 3 petrol stations, mainly in Guangdong and Henan provinces - Total Group revenue was approximately **RMB1,140.3 million**, an increase of approximately **RMB462.7 million** compared to the same period in 2024[55](index=55&type=chunk) Number of Operating Stations | Station Type | June 30, 2025 | December 31, 2024 | |---|---|---| Sales Volume and Revenue by Product Mix | Product | H1 2025 Sales Volume | H1 2025 Revenue (RMB '000) | H1 2024 Sales Volume | H1 2024 Revenue (RMB '000) | |---|---|---|---|---| [Outlook and Prospects](index=22&type=section&id=Outlook%20and%20Prospects) For H2 2025, the domestic LPG market is expected to remain loosely supplied with seasonal demand recovery, but overall oversupply; the natural gas market anticipates steady demand growth, especially in residential, commercial, and transportation sectors, driven by policy support, as the Group focuses on core business, customer service, safety, and innovation for sustainable development - In H2 2025, the LPG market is expected to have loose supply and demand, with seasonal demand recovery, but overall oversupply is anticipated[62](index=62&type=chunk)[63](index=63&type=chunk) - Driven by policy, the natural gas market is projected to maintain steady demand and consumption growth in Q3 and Q4 2025, particularly in residential, commercial, and transportation sectors[64](index=64&type=chunk) - The Group will continue to deepen its core LPG and natural gas businesses, enhance customer service, build a comprehensive risk management system, and drive industrial upgrading through technological innovation[65](index=65&type=chunk) [Financial Review](index=23&type=section&id=Financial%20Review) This section reviews the Group's H1 2025 financial performance, noting significant revenue growth from increased LPG sales, but reduced gross profit due to lower CNG sales, with increases in other income, staff costs, other operating expenses, and finance costs, offset by decreases in depreciation and income tax expense, resulting in a narrowed loss for the period [Revenue](index=23&type=section&id=Revenue) For the six months ended June 30, 2025, Group revenue was approximately RMB1,140.3 million, an increase of approximately RMB462.7 million from RMB677.6 million in the prior period, primarily due to increased LPG sales volume Revenue from Contracts with Customers by Product | Product | June 30, 2025 (RMB '000) | June 30, 2024 (RMB '000) | Change | |---|---|---|---| - LPG revenue increased from **RMB582,195 thousand** in 2024 to **RMB1,056,288 thousand** in 2025, representing a growth of approximately **81.4%**[67](index=67&type=chunk) [Cost of Sales and Gross Profit](index=23&type=section&id=Cost%20of%20Sales%20and%20Gross%20Profit) Group cost of sales increased to RMB1,115.5 million, mainly due to higher LPG procurement, while gross profit decreased by approximately RMB2.9 million to RMB24.8 million, primarily due to lower sales of higher-margin vehicle CNG - Cost of sales increased by approximately **RMB465.6 million** from approximately **RMB649.9 million** in the prior period of 2024 to approximately **RMB1,115.5 million** in the current period[68](index=68&type=chunk) - Gross profit was approximately **RMB24.8 million**, a decrease of approximately **RMB2.9 million** from approximately **RMB27.7 million** in the prior period of 2024[69](index=69&type=chunk) [Other Income](index=24&type=section&id=Other%20Income) Group other income increased to approximately RMB10.0 million, an increase of approximately RMB3.3 million from the prior period, primarily due to higher interest income - Other income was approximately **RMB10.0 million**, an increase of approximately **RMB3.3 million** compared to the same period in 2024[70](index=70&type=chunk) [Staff Costs](index=24&type=section&id=Staff%20Costs) Staff costs increased to approximately RMB15.1 million, an increase of approximately RMB0.4 million from the prior period, mainly due to higher severance payments from staff reductions - Staff costs were approximately **RMB15.1 million**, an increase of approximately **RMB0.4 million** compared to the same period in 2024[71](index=71&type=chunk) [Depreciation](index=24&type=section&id=Depreciation) Depreciation expense decreased by approximately RMB0.4 million to approximately RMB5.3 million, primarily because some assets were fully depreciated - Depreciation was approximately **RMB5.3 million**, a decrease of approximately **RMB0.4 million** compared to the same period in 2024[72](index=72&type=chunk) [Short-Term Lease Expenses](index=24&type=section&id=Short-Term%20Lease%20Expenses) Short-term lease expenses were approximately RMB0.2 million, remaining largely consistent with the prior period - Short-term lease expenses were approximately **RMB0.2 million**, largely consistent with the same period in 2024[73](index=73&type=chunk) [Other Operating Expenses](index=24&type=section&id=Other%20Operating%20Expenses) Other operating expenses increased to approximately RMB11.4 million, an increase of approximately RMB0.6 million from the prior period, primarily due to losses from disposal of property, plant and equipment - Other operating expenses were approximately **RMB11.4 million**, an increase of approximately **RMB0.6 million** compared to the same period in 2024[74](index=74&type=chunk) [Finance Costs](index=25&type=section&id=Finance%20Costs) Finance costs increased to approximately RMB5.4 million, an increase of approximately RMB0.4 million from the prior period, primarily due to higher bank loan interest rates - Finance costs were approximately **RMB5.4 million**, an increase of approximately **RMB0.4 million** compared to the same period in 2024[75](index=75&type=chunk) [Loss Before Tax](index=25&type=section&id=Loss%20Before%20Tax) Loss before tax was approximately RMB3.3 million, a slight narrowing from approximately RMB3.5 million in the prior period - Loss before tax was approximately **RMB3.3 million**, compared to approximately **RMB3.5 million** in the same period of 2024[76](index=76&type=chunk) [Income Tax Expense](index=25&type=section&id=Income%20Tax%20Expense) Income tax expense was approximately RMB0.3 million, a decrease of approximately RMB0.1 million from approximately RMB0.4 million in the prior period - Income tax expense was approximately **RMB0.3 million**, a decrease of approximately **RMB0.1 million** compared to the same period in 2024[77](index=77&type=chunk) [Loss for the Period](index=25&type=section&id=Loss%20for%20the%20Period) Loss for the period was approximately RMB3.6 million, a narrowing from approximately RMB3.8 million in the prior period - Loss for the period was approximately **RMB3.6 million**, compared to approximately **RMB3.8 million** in the same period of 2024[78](index=78&type=chunk) [Financial Position](index=25&type=section&id=Financial%20Position) The Group's financial position remains stable, with significant growth in total assets and ample cash and bank balances; increased interest-bearing borrowings led to a higher gearing ratio, reflecting increased leverage [Liquidity, Financial Resources and Capital Structure](index=25&type=section&id=Liquidity%2C%20Financial%20Resources%20and%20Capital%20Structure) As of June 30, 2025, the Group's total assets were approximately RMB1,378.4 million, an increase of approximately RMB238.8 million from December 31, 2024; the Group held approximately RMB815.0 million in pledged and restricted deposits and approximately RMB136.6 million in cash and bank balances - Total assets were approximately **RMB1,378.4 million**, an increase of approximately **RMB238.8 million** from December 31, 2024[79](index=79&type=chunk) - Pledged and restricted deposits were approximately **RMB815.0 million**, and cash and bank balances were approximately **RMB136.6 million**[79](index=79&type=chunk) [Capital Expenditure](index=26&type=section&id=Capital%20Expenditure) For the six months ended June 30, 2025, the Group's capital expenditure primarily involved payments for the acquisition of property, plant and equipment of approximately RMB nil - Capital expenditure for the period primarily involved payments for the acquisition of property, plant and equipment of approximately **RMB nil**[80](index=80&type=chunk) [Interest-Bearing Borrowings](index=26&type=section&id=Interest-Bearing%20Borrowings) As of June 30, 2025, the Group's interest-bearing borrowings significantly increased to RMB960.0 million from RMB720.0 million as of December 31, 2024 Overview of Interest-Bearing Borrowings | Item | June 30, 2025 (RMB '000) | December 31, 2024 (RMB '000) | Change | |---|---|---|---| [Gearing Ratio](index=26&type=section&id=Gearing%20Ratio) As of June 30, 2025, the gearing ratio increased to approximately 72.2% from approximately 65.9% as of December 31, 2024, primarily due to increased interest-bearing borrowings - The gearing ratio was approximately **72.2%** (December 31, 2024: approximately 65.9%), with the increase primarily due to higher interest-bearing borrowings[83](index=83&type=chunk) [Employees and Remuneration Policy](index=26&type=section&id=Employees%20and%20Remuneration%20Policy) As of June 30, 2025, the Group had 399 employees, a decrease from 420 in the prior period; the remuneration policy aligns with market practices, valuing employee contributions, and includes regular safety and skills training for professional growth - As of June 30, 2025, the Group had a total of **399 employees** (including staff from joint venture Jiangmen Xinjiang Gas), a decrease from **420** as of June 30, 2024[84](index=84&type=chunk) - The remuneration policy aligns with market practices, determined by employee performance, qualifications, and experience, with an emphasis on employee training and development[84](index=84&type=chunk) [Use of Proceeds from Listing](index=27&type=section&id=Use%20of%20Proceeds%20from%20Listing) As of June 30, 2025, the Group utilized approximately HKD70.9 million (approximately 58.9% of net proceeds) for new CNG mother stations, gas stations, and general working capital; the remaining HKD49.4 million is expected to be used by end-2026 for acquiring LPG civil station operating rights, enhancing logistics and storage, and purchasing additional fleet Overview of Use of Proceeds from Listing | Intended Use of Proceeds | Original Allocation (HKD million) | Revised Allocation (HKD million) | Utilized as of June 30, 2025 (HKD million) | Remaining Balance as of June 30, 2025 (HKD million) | Expected Timeline for Full Utilization | |---|---|---|---|---|---| - As of June 30, 2025, approximately **HKD70.9 million** has been utilized, representing approximately **58.9%** of the net proceeds from listing[85](index=85&type=chunk) - The remaining proceeds of approximately **HKD49.4 million** are expected to be utilized by the end of **2026**[85](index=85&type=chunk)[88](index=88&type=chunk) [Other Information](index=29&type=section&id=Other%20Information) [Material Investments and Future Plans for Material Investments and Capital Assets](index=29&type=section&id=Material%20Investments%20and%20Future%20Plans%20for%20Material%20Investments%20and%20Capital%20Assets) As of June 30, 2025, the Group held approximately RMB24.3 million in unlisted equity securities, with no other definite future plans for material investments and capital assets beyond those mentioned in the use of listing proceeds - As of June 30, 2025, the Group held approximately **RMB24.3 million** in unlisted equity securities[89](index=89&type=chunk) - Other than the plans mentioned in the use of proceeds from listing, the Group has no other definite future plans for material investments and capital assets[89](index=89&type=chunk) [Material Acquisitions and Disposals of Subsidiaries, Associates or Joint Ventures](index=29&type=section&id=Material%20Acquisitions%20and%20Disposals%20of%20Subsidiaries%2C%20Associates%20or%20Joint%20Ventures) 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, the Group had no material acquisitions or disposals of subsidiaries, associates, or joint ventures[90](index=90&type=chunk) [Contingent Liabilities](index=29&type=section&id=Contingent%20Liabilities) Two debt dispute claims against the Group (Claim 1: maximum risk RMB69.35 million; Claim 2: maximum risk RMB14.05 million) have been concluded, with courts ruling that the Group's subsidiary is not liable, thus no provision is required as of June 30, 2025 - Claim 1 (maximum risk approximately **RMB69,350,000**) has concluded, with the Higher People's Court rejecting the plaintiff's retrial application, and the subsidiary is not liable[91](index=91&type=chunk) - Claim 2 (maximum risk approximately **RMB14,053,937**) has concluded, with the court ruling the subsidiary not liable, and the plaintiff's appeal period has expired[92](index=92&type=chunk) - As of June 30, 2025, no provision has been made[93](index=93&type=chunk) [Pledge of Assets](index=30&type=section&id=Pledge%20of%20Assets) As of June 30, 2025, pledged and restricted deposits of RMB815.0 million were pledged as security for the Group's bank loans, an increase from RMB615.0 million in 2024 - As of June 30, 2025, **RMB815,000,000** in pledged and restricted deposits were pledged as security for the Group's bank loans (2024: RMB615,000,000)[94](index=94&type=chunk) [Tax Relief and Exemptions](index=30&type=section&id=Tax%20Relief%20and%20Exemptions) The Company is unaware of any tax relief or exemptions available to shareholders by virtue of holding shares in the Company - The Company is unaware of any tax relief or exemptions available to shareholders by virtue of holding shares in the Company[95](index=95&type=chunk) [Compliance with Corporate Governance Code](index=30&type=section&id=Compliance%20with%20Corporate%20Governance%20Code) The Board values corporate governance and has adopted the Corporate Governance Code in Appendix C1 of the Listing Rules, believing the Company complied with its provisions for the six months ended June 30, 2025 - The Company has consistently adopted the Corporate Governance Code set out in Appendix C1 of the Listing Rules[97](index=97&type=chunk) - The Board believes the Company has complied with the code provisions of the Corporate Governance Code for the six months ended June 30, 2025[97](index=97&type=chunk) [Compliance with the Model Code for Securities Transactions by Directors](index=30&type=section&id=Compliance%20with%20the%20Model%20Code%20for%20Securities%20Transactions%20by%20Directors) The Company has established a code of conduct for directors' securities transactions, no less stringent than the Model Code in Appendix C3 of the Listing Rules, and all directors confirmed compliance for the six months ended June 30, 2025 - The Company has adopted a code of conduct for directors' securities transactions, with terms no less stringent than the Model Code set out in Appendix C3 of the Listing Rules[98](index=98&type=chunk) - All directors have confirmed compliance with the code for securities transactions for the six months ended June 30, 2025[98](index=98&type=chunk) [Repurchase, Sale or Redemption of the Company's Listed Securities](index=31&type=section&id=Repurchase%2C%20Sale%20or%20Redemption%20of%20the%20Company%27s%20Listed%20Securities) For the six months ended June 30, 2025, neither the Company nor any of its subsidiaries repurchased, sold, or redeemed any of the Company's listed securities - For the six months ended June 30, 2025, neither the Company nor any of its subsidiaries repurchased, sold, or redeemed any of the Company's listed securities[99](index=99&type=chunk) [Dividends](index=31&type=section&id=Dividends) 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[100](index=100&type=chunk) [Public Float](index=31&type=section&id=Public%20Float) As of the date of this announcement, the Company has maintained the prescribed public float percentage under the Listing Rules - As of the date of this announcement, the Company has maintained the prescribed public float percentage under the Listing Rules[101](index=101&type=chunk) [Publication of Interim Results and Interim Report](index=31&type=section&id=Publication%20of%20Interim%20Results%20and%20Interim%20Report) This announcement is published on the HKEX and Company websites; the interim report for the six months ended June 30, 2025, containing all information required by the Listing Rules, will be dispatched to shareholders and/or published on the aforementioned websites in due course - This announcement has been published on the HKEX website (www.hkexnews.hk) and the Company's website (www.sinogasholdings.com)[102](index=102&type=chunk) - The interim report for the six months ended June 30, 2025, containing all information required by the Listing Rules, will be dispatched to shareholders and/or published on the aforementioned websites in due course[102](index=102&type=chunk)

香 港 交 易 及 結 算 所 有 限 公 司 及 香 港 聯 合 交 易 所 有 限 公 司 對 本 公 佈 之 內 容 概 不 負 責，對 其 準 確 性 或 完 整 性 亦 不 發 表 任 何 聲 明，並 明 確 表 示 概 不 就 因 本 公 佈 全 部 或 任 何 部 分 內 容 而 產 生 或 因 依 賴 該 等 內 容 而 引 致 之 任 何 損 失 承 擔 任 何 責 任。 （於中華人民共和國註冊成立之股份有限公司） （股份代號：8115） 截 至 二 零 二 五 年 六 月 三 十 日 止 六 個 月 中 期 業 績 公 佈 香 港 聯 合 交 易 所 有 限 公 司GEM的 特 色 GEM的 定 位 乃 為 相 比 其 他 在 聯 交 所 上 市 的 公 司 可 能 帶 有 較 高 投 資 風 險 的 中 小 型 公 司 提 供 一 個 上 市 的 市 場。有 意 投 資 者 應 了 解 投 資 於 該 等 公 司 的 潛 在 風 險，並 應 經 過 審 慎 周 詳 的 考 慮 後 方 作 出 投 資 決 定。 由 於GEM上 市 公 司 一 般 為 中 小 型 公 司，在GEM買 賣 的 ...

[Financial Highlights](index=1&type=section&id=Financial%20Highlights) For the six months ended June 30, 2025, revenue increased by 7.8% to RMB361,785 thousand, while gross profit and profit for the period declined, with basic EPS at RMB0.06 and a recommended interim dividend of HK2.0 cents Financial Summary for the Six Months Ended June 30 | Indicator | 2025 (RMB '000) | 2024 (RMB '000) | Change (RMB '000) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Revenue | 361,785 | 335,761 | 26,024 | +7.8 | | Cost of Sales | 238,775 | 201,790 | 36,985 | +18.3 | | Gross Profit | 123,010 | 133,971 | –10,961 | –8.2 | | Profit Before Tax | 83,613 | 84,475 | –862 | –1.0 | | Profit for the Period | 83,741 | 87,775 | –4,034 | –4.6 | | Basic & Diluted EPS | RMB0.06 | RMB0.07 | RMB–0.01 | –14.3 | - The Board recommended an interim dividend of **HK2.0 cents per share** for the six months ended June 30, 2025, a decrease from HK2.2 cents in the prior period[3](index=3&type=chunk) [Unaudited Condensed Interim Consolidated Financial Statements](index=2&type=section&id=Unaudited%20Condensed%20Interim%20Consolidated%20Financial%20Statements) This section presents the unaudited condensed interim consolidated statement of profit or loss and other comprehensive income and statement of financial position, detailing the Group's financial performance and position [Unaudited Condensed Interim Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=2&type=section&id=Unaudited%20Condensed%20Interim%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For the six months ended June 30, 2025, revenue grew by 7.8%, but rising cost of sales led to an 8.2% decline in gross profit and a 4.6% decrease in profit for the period Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (For the Six Months Ended June 30) | Indicator | 2025 (RMB '000) | 2024 (RMB '000) | | :--- | :--- | :--- | | Revenue | 361,785 | 335,761 | | Cost of Sales | (238,775) | (201,790) | | Gross Profit | 123,010 | 133,971 | | Other income and gains | 33,852 | 27,832 | | Selling and distribution expenses | (13,936) | (13,438) | | Administrative expenses | (41,825) | (43,895) | | Other expenses | (12,606) | (13,992) | | Finance costs | (4,882) | (6,003) | | Profit Before Tax | 83,613 | 84,475 | | Income tax credit | 128 | 3,300 | | Profit for the Period | 83,741 | 87,775 | | Total comprehensive income for the period | 83,790 | 87,701 | | Profit attributable to owners of the parent | 83,660 | 87,722 | | Total comprehensive income attributable to owners of the parent | 83,709 | 87,648 | | Basic & Diluted EPS | RMB0.06 | RMB0.07 | - Income tax credit significantly decreased from **RMB3,300 thousand** in the prior period of 2024 to **RMB128 thousand** in the current period of 2025[4](index=4&type=chunk) [Unaudited Condensed Interim Consolidated Statement of Financial Position](index=4&type=section&id=Unaudited%20Condensed%20Interim%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, total assets less current liabilities increased to RMB2,102,021 thousand, with net current assets turning positive, indicating improved liquidity and increased net assets Condensed Consolidated Statement of Financial Position (As of June 30) | Indicator | June 30, 2025 (RMB '000) | December 31, 2024 (RMB '000) | | :--- | :--- | :--- | | Total non-current assets | 2,096,833 | 2,109,440 | | Total current assets | 429,210 | 421,209 | | Total current liabilities | 424,022 | 598,531 | | Net current assets / (liabilities) | 5,188 | (177,322) | | Total assets less current liabilities | 2,102,021 | 1,932,118 | | Total non-current liabilities | 376,806 | 274,689 | | Net assets | 1,725,215 | 1,657,429 | | Total equity | 1,725,215 | 1,657,429 | - Net current assets improved significantly from a deficit of **RMB177,322 thousand** as of December 31, 2024, to a surplus of **RMB5,188 thousand** as of June 30, 2025[6](index=6&type=chunk) - Contract liabilities significantly decreased from **RMB293,790 thousand** as of December 31, 2024, to **RMB120,861 thousand** as of June 30, 2025, primarily due to the recognition of tuition and boarding fees as revenue[6](index=6&type=chunk) [Notes to the Unaudited Condensed Interim Consolidated Financial Statements](index=6&type=section&id=Notes%20to%20the%20Unaudited%20Condensed%20Interim%20Consolidated%20Financial%20Statements) This section provides detailed notes to the interim consolidated financial statements, covering company information, accounting policies, operating segments, revenue, profit before tax, income tax, dividends, EPS, and trade receivables [1. Company and Group Information](index=6&type=section&id=1.%20Company%20and%20Group%20Information) China South Vocational Education Group, incorporated in the Cayman Islands, primarily engages in investment holding and providing private higher vocational education in China - The Company was incorporated as an exempted company in the Cayman Islands on **August 15, 2018**[8](index=8&type=chunk) - The Group is principally engaged in providing private higher vocational education in the People's Republic of China[8](index=8&type=chunk) [2. Accounting Policies](index=6&type=section&id=2.%20Accounting%20Policies) Interim financial statements are prepared under HKAS 34, consistent with annual policies, adopting HKFRS amendments effective January 1, 2025, with no significant impact [2.1 Basis of Preparation](index=6&type=section&id=2.1%20Basis%20of%20Preparation) The unaudited condensed interim consolidated financial statements are prepared under HKAS 34 and presented in RMB, with all values rounded to the nearest thousand - The financial statements are prepared in accordance with **HKAS 34 "Interim Financial Reporting"**[9](index=9&type=chunk) - The financial statements are presented in **RMB**, with all values rounded to the nearest thousand[9](index=9&type=chunk) [2.2 Changes in Accounting Policies and Disclosures](index=6&type=section&id=2.2%20Changes%20in%20Accounting%20Policies%20and%20Disclosures) Accounting policies for interim financial statements are consistent with annual reports, adopting HKFRS amendments effective January 1, 2025, with no significant impact, including HKAS 21 revisions - Accounting policies are consistent with those adopted in the annual consolidated financial statements for the year ended **December 31, 2024**[10](index=10&type=chunk) - Amendments to HKFRS accounting standards effective **January 1, 2025**, have been adopted but had no significant impact on the Group's financial statements[10](index=10&type=chunk)[12](index=12&type=chunk) - Amendments to **HKAS 21 "The Effects of Changes in Foreign Exchange Rates"** specify how an entity assesses currency exchangeability and determines the spot exchange rate, requiring related disclosures[11](index=11&type=chunk) [3. Operating Segment Information](index=7&type=section&id=3.%20Operating%20Segment%20Information) The Group operates solely in China, providing higher vocational education services, with all revenue and long-term assets originating domestically, and no single customer accounts for over 10% of total revenue - The Group is principally engaged in providing **higher vocational education services in China**[13](index=13&type=chunk) - The Group operates in a single geographical segment, with all revenue and long-term assets originating from China, thus no other geographical segment information is presented[14](index=14&type=chunk) - During the reporting period, no single customer accounted for **10% or more** of the Group's total revenue from services rendered[15](index=15&type=chunk) [4. Revenue, Other Income and Gains](index=8&type=section&id=4.%20Revenue,%20Other%20Income%20and%20Gains) Revenue primarily from tuition and boarding fees totaled RMB361,785 thousand, with other income and gains at RMB33,852 thousand, and contract liabilities of RMB120,861 thousand expected to be recognized within one year Analysis of Revenue, Other Income and Gains (For the Six Months Ended June 30) | Category | 2025 (RMB '000) | 2024 (RMB '000) | | :--- | :--- | :--- | | **Revenue** | | | | Tuition fees | 328,837 | 302,546 | | Boarding fees | 30,463 | 29,296 | | Other education service fees | 2,485 | 3,919 | | **Total Revenue** | **361,785** | **335,761** | | **Other Income and Gains** | | | | Rental income | 18,267 | 13,567 | | Training income | 7,998 | 6,653 | | Government grants | 4,249 | 3,525 | | Bank interest income | 1,995 | 1,751 | | Brand licensing income | 909 | 863 | | **Total Other Income and Gains** | **33,852** | **27,832** | - Tuition and boarding fees are primarily recognized over time as educational and accommodation services are provided to students (i.e., over the academic year)[16](index=16&type=chunk) Movement in Contract Liabilities Balance (RMB '000) | Item | For the Six Months Ended June 30, 2025 | For the Year Ended December 31, 2024 | | :--- | :--- | :--- | | At beginning of period/year | 293,790 | 234,117 | | Revenue recognized that was included in the contract liabilities balance at the beginning of the period/year | (270,530) | (232,302) | | Increase due to cash received | 205,241 | 760,377 | | Revenue recognized from performance obligations satisfied in prior periods not included in the contract liabilities balance at the beginning of the period/year | (99,252) | (466,471) | | Transferred to refund liabilities | (8,388) | (1,931) | | At end of period/year | 120,861 | 293,790 | - As of June 30, 2025, the amount of transaction price allocated to unsatisfied performance obligations expected to be recognized within one year was **RMB120,861 thousand**[20](index=20&type=chunk) [5. Profit Before Tax](index=11&type=section&id=5.%20Profit%20Before%20Tax) Profit before tax for the six months ended June 30, 2025, was RMB83,613 thousand, slightly lower than the prior period, with increased employee benefits, depreciation, and amortization, but reduced exchange losses and donations Composition of Profit Before Tax (For the Six Months Ended June 30) | Item | 2025 (RMB '000) | 2024 (RMB '000) | | :--- | :--- | :--- | | Total employee benefit expenses | 138,647 | 132,082 | | Depreciation of property, plant and equipment | 40,758 | 33,064 | | Depreciation of right-of-use assets | 16,066 | 15,453 | | Depreciation of investment properties | 965 | 965 | | Amortisation of other intangible assets | 1,554 | 1,286 | | Net exchange loss | 64 | 1,895 | | Donation expenses | 316 | 1,370 | | Bank interest income | (1,995) | (1,751) | | Government grants | (4,249) | (3,525) | - Total employee benefit expenses (excluding directors' and chief executive's emoluments) increased from **RMB132,082 thousand** in 2024 to **RMB138,647 thousand** in 2025[22](index=22&type=chunk) - Net exchange loss significantly decreased from **RMB1,895 thousand** in 2024 to **RMB64 thousand** in 2025[22](index=22&type=chunk) [6. Income Tax](index=12&type=section&id=6.%20Income%20Tax) Income tax is calculated per jurisdiction, with exemptions for Cayman Islands and BVI, no provision for HK subsidiaries, and tax benefits for China's private non-enterprise schools, though a 25% corporate income tax may apply if registered as for-profit - The Company, incorporated in the Cayman Islands, is **exempt from income tax** on its operations[26](index=26&type=chunk) - Chinese schools remain private non-enterprise units, with academic education income treated as **non-taxable income**, enjoying tax preferential treatment[28](index=28&type=chunk) - If Chinese schools opt to register as for-profit private schools, they may be subject to a **25% corporate income tax rate** on academic education services in the future[28](index=28&type=chunk) Income Tax (For the Six Months Ended June 30) | Item | 2025 (RMB '000) | 2024 (RMB '000) | | :--- | :--- | :--- | | Current — Mainland China expense for the period | 58 | 257 | | Deferred | (186) | (3,557) | | **Total** | **(128)** | **(3,300)** | [7. Dividends](index=13&type=section&id=7.%20Dividends) The Board recommended an interim dividend of HK2.0 cents per ordinary share for the six months ended June 30, 2025, totaling RMB24,321 thousand, a decrease from the prior period - The Board recommended an interim dividend of **HK2.0 cents per ordinary share** (2024: HK2.2 cents)[30](index=30&type=chunk) - The total proposed interim dividend is approximately **RMB24,321 thousand** (2024: RMB26,788 thousand)[30](index=30&type=chunk) - Final dividends declared and paid were **HK1.3 cents per ordinary share** (2024: HK4.8 cents), totaling **RMB16,004 thousand** (2024: RMB58,076 thousand)[30](index=30&type=chunk) [8. Earnings Per Share Attributable to Owners of the Parent](index=14&type=section&id=8.%20Earnings%20Per%20Share%20Attributable%20to%20Owners%20of%20the%20Parent) Basic and diluted EPS for the six months ended June 30, 2025, was RMB0.06, calculated from RMB83,660 thousand profit attributable to owners of the parent and 1,334,000,000 weighted average shares, with no dilutive shares - Basic earnings per share is calculated based on the profit attributable to owners of the parent for the period and the weighted average of **1,334,000,000 ordinary shares** outstanding during the period[31](index=31&type=chunk) - For the six months ended June 30, 2025 and 2024, the Group had no potentially dilutive ordinary shares issued, thus basic and diluted earnings per share are the same[32](index=32&type=chunk) Calculation of Basic and Diluted Earnings Per Share (For the Six Months Ended June 30) | Item | 2025 (RMB '000) | 2024 (RMB '000) | | :--- | :--- | :--- | | Profit attributable to owners of the parent | 83,660 | 87,722 | | Weighted average number of ordinary shares outstanding | 1,334,000,000 | 1,334,000,000 | [9. Trade Receivables](index=14&type=section&id=9.%20Trade%20Receivables) Total trade receivables significantly decreased to RMB2,381 thousand as of June 30, 2025, from RMB9,254 thousand, with the majority falling within one year Ageing Analysis of Trade Receivables (RMB '000) | Ageing | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Within 1 year | 2,255 | 8,930 | | 1 to 2 years | 126 | 324 | | **Total** | **2,381** | **9,254** | - Total trade receivables decreased by approximately **74.3%** from **RMB9,254 thousand** as of December 31, 2024, to **RMB2,381 thousand** as of June 30, 2025[37](index=37&type=chunk) [Management Discussion and Analysis](index=15&type=section&id=Management%20Discussion%20and%20Analysis) This section covers the Group's business review, outlook, development strategies, financial performance, liquidity, and IPO proceeds, focusing on high-quality vocational education, M&A, international cooperation, and a "five-in-one" development model [Business Review](index=15&type=section&id=Business%20Review) The Group operates two schools in the Greater Bay Area, offering academic education, vocational training, and auxiliary services, with Lingnan Institute of Technology consolidating colleges and Lingnan Modern Technician College offering over 38 majors, serving 34,748 full-time students in 2024/2025 [Principal Business](index=15&type=section&id=Principal%20Business) The Group primarily offers academic education and vocational training services via Lingnan Institute of Technology and Lingnan Modern Technician College - The Group operates two schools in China's Greater Bay Area: **Guangdong Lingnan Institute of Technology** and **Guangdong Lingnan Modern Technician College**[38](index=38&type=chunk) - Lingnan Institute of Technology, established in **May 2002**, provides academic education and vocational training[39](index=39&type=chunk) - Lingnan Modern Technician College, established in **July 2005**, provides vocational education and training[39](index=39&type=chunk) [Lingnan Institute of Technology](index=15&type=section&id=Lingnan%20Institute%20of%20Technology) Lingnan Institute of Technology, with Guangzhou and Qingyuan campuses, consolidated into 8 secondary colleges, 2 public colleges, and 1 continuing education college as of June 30, 2025, adding two new majors and offering over 40 programs - Lingnan Institute of Technology has campuses in **Guangzhou** and **Qingyuan**[40](index=40&type=chunk) - As of **June 30, 2025**, the Institute consolidated 13 secondary colleges into **8 secondary colleges, 2 public colleges, and 1 continuing education college**[40](index=40&type=chunk) - Two new majors, **Oral Medicine Technology** and **Optometry Technology**, were added, offering over **40 majors** across a wide range of disciplines[40](index=40&type=chunk) [Lingnan Modern Technician College](index=15&type=section&id=Lingnan%20Modern%20Technician%20College) Lingnan Modern Technician College in Guangzhou offers over 38 majors across 8 departments, including mechatronics, drones, automotive, fire engineering, TCM, rehabilitation, nursing, advertising, computer networking, programming, and digital media - Lingnan Modern Technician College, located in Guangzhou, has **8 departments** and offers over **38 majors**[41](index=41&type=chunk) - Majors include mechatronics, drones, automotive inspection and maintenance, fire engineering, traditional Chinese medicine, rehabilitation, nursing, advertising design, computer network applications, computer programming, and digital media applications[41](index=41&type=chunk) [Auxiliary Education Services](index=16&type=section&id=Auxiliary%20Education%20Services) Auxiliary education services encompass continuing education and other educational offerings, including vocational skills assessment and professional qualification preparation and training - Auxiliary education services primarily include **continuing education courses** and other educational services[42](index=42&type=chunk) - Other educational services mainly provide enrolled students with preparation and training services for **vocational skills assessment** and **professional qualifications and certificates**[42](index=42&type=chunk) [Business Operating Data](index=16&type=section&id=Business%20Operating%20Data) For the 2024/2025 academic year, the Group's schools had 34,748 full-time students, with average tuition and boarding fees of RMB18,065/RMB2,586 for Lingnan Institute of Technology and RMB15,023/RMB2,079 for Lingnan Modern Technician College - For the **2024/2025 academic year**, the total number of full-time enrolled students in the Group's schools was **34,748**[43](index=43&type=chunk) Average Tuition and Boarding Fees (As of June 30, 2025) | School | Average Tuition Fee (RMB) | Average Boarding Fee (RMB) | | :--- | :--- | :--- | | Lingnan Institute of Technology | 18,065 | 2,586 | | Lingnan Modern Technician College | 15,023 | 2,079 | [Outlook](index=16&type=section&id=Outlook) Benefiting from national policy support for vocational education, the Group will deepen its presence in the Greater Bay Area, supplying high-skilled talent and solidifying its leading position [Rising Status and Improving System of Vocational Education](index=16&type=section&id=Rising%20Status%20and%20Improving%20System%20of%20Vocational%20Education) National policies bolster vocational education with RMB31.257 billion for quality improvement, fostering industry-education integration, establishing consortia, and optimizing the system for high-quality employment - In 2024, the central government allocated **RMB31.257 billion** for the Modern Vocational Education Quality Improvement Plan, focusing on enhancing teaching facilities, faculty development, and educational quality[44](index=44&type=chunk) - The nation promotes the creation of city-level industry-education consortia and industry communities, with **28 national-level consortia** in the first batch and the launch of the "Thousand Schools, Ten Thousand Enterprises" collaborative innovation partnership program[45](index=45&type=chunk) - Policies mandate accelerating the construction of a modern vocational education system, promoting multi-level coordinated development with a "one body, two wings" layout, and integrating career education into higher education talent cultivation[46](index=46&type=chunk)[47](index=47&type=chunk) [Deep Cultivation in the Guangdong-Hong Kong-Macao Greater Bay Area, Continuously Supplying High-Skilled Talent](index=18&type=section&id=Deep%20Cultivation%20in%20the%20Guangdong-Hong%20Kong-Macao%20Greater%20Bay%20Area,%20Continuously%20Supplying%20High-Skilled%20Talent) Leveraging existing schools, the Group will expand its campus network and vocational education market in the Greater Bay Area, including academic and non-academic training, to solidify its leading position - The Guangdong-Hong Kong-Macao Greater Bay Area's economic output accounts for over **11% of the national total**, with a continuously expanding talent gap in emerging industries[48](index=48&type=chunk) - The Group will leverage its two existing schools to expand its campus network and develop both academic and non-academic vocational education and training markets in the Greater Bay Area[48](index=48&type=chunk) [Business Development Strategies](index=19&type=section&id=Business%20Development%20Strategies) The Group aims for performance growth through five strategies: high-quality academic vocational education, M&A for campus expansion, auxiliary education growth, international cooperation, and a "five-in-one" development model [1) High-Quality Development of Academic Vocational Education](index=19&type=section&id=1)%20High-Quality%20Development%20of%20Academic%20Vocational%20Education) Lingnan Institute of Technology will pursue "Double High" construction and a big health focus, while Lingnan Modern Technician College will deepen industry-education cooperation with JD.com and seek new premises in the Greater Bay Area - Lingnan Institute of Technology aims to become an entrepreneurial vocational technical university with a **big health focus** within the next decade, serving as a benchmark for industry-education integration and scientific innovation in the "Big Health + TMT" sector of the Greater Bay Area[49](index=49&type=chunk) - Lingnan Modern Technician College collaborates with **JD.com Group** to establish an industry college, deepening the "industry-education-evaluation" ecosystem to achieve an "order-based class" model where students are employed upon graduation[49](index=49&type=chunk) - Actively seeking new school premises in the Greater Bay Area to establish branch campuses or new independent schools, expanding the campus network at the secondary vocational level[49](index=49&type=chunk) [2) External Mergers and Acquisitions to Expand Campus Network](index=19&type=section&id=2)%20External%20Mergers%20and%20Acquisitions%20to%20Expand%20Campus%20Network) The Group will rapidly expand its network through external M&A, prioritizing high-quality technical schools and non-academic vocational training institutions in the Greater Bay Area for scale and synergy - The Group is committed to rapidly expanding its network through **external mergers and acquisitions**[50](index=50&type=chunk) - Acquisition targets will prioritize high-quality technical schools and institutions offering non-academic vocational training within the **Greater Bay Area**[50](index=50&type=chunk) [3) Expansion of Auxiliary Education Businesses](index=20&type=section&id=3)%20Expansion%20of%20Auxiliary%20Education%20Businesses) The Group will expand vocational skills certification and adult continuing education, with Lingnan Modern Technician College approved for 25 trades and Lingnan Institute of Technology enhancing social training and technical services through major industry collaborations - China's vocational skills training market is projected to exceed **RMB900 billion** by 2025, with increasing online education penetration[51](index=51&type=chunk) - Lingnan Modern Technician College has been approved for vocational skills level certification in **25 trades** and plans to cover prefecture-level cities in Guangdong Province within the next three years[51](index=51&type=chunk) - Lingnan Institute of Technology will vigorously expand cooperation with major industries, enterprises, and projects to enhance the value, economic benefits, and social recognition of its social training and technical services[51](index=51&type=chunk) [4) Development of International Cooperation](index=20&type=section&id=4)%20Development%20of%20International%20Cooperation) The Group will actively pursue international cooperation, introducing advanced vocational education resources, exploring partnerships with overseas institutions for undergraduate upgrades, and focusing on Hong Kong, Macao, Singapore, and EU regions - The Group actively engages in **international cooperation in running schools**, introducing advanced vocational and basic education resources and projects[52](index=52&type=chunk) - Exploring partnerships with overseas institutions for upgrading to undergraduate programs, with a focus on institutions in **Hong Kong, Macao, Singapore, and EU countries and regions**[52](index=52&type=chunk) [5) "Five-in-One" New Development Pattern](index=20&type=section&id=5)%20%22Five-in-One%22%20New%20Development%20Pattern) The Group will shift to a "five-in-one" development pattern driven by "academic education + vocational training + technical services," actively exploring and expanding five major businesses: large-scale training, dispatch, big health, e-commerce, and public welfare - The Group will transition from an academic education-dominated model to a **"five-in-one" new development pattern** driven by "academic education + vocational training + technical services"[53](index=53&type=chunk) - Actively exploring and expanding five major businesses: **large-scale training, large-scale dispatch, big health, big e-commerce, and big public welfare**[53](index=53&type=chunk) [Financial Review](index=20&type=section&id=Financial%20Review) For the six months ended June 30, 2025, revenue grew by 7.8% due to increased student enrollment, but a 18.3% rise in cost of sales led to decreased gross profit and margin, while profit for the period still fell by 4.6% [Revenue](index=20&type=section&id=Revenue) For the six months ended June 30, 2025, revenue, primarily from tuition and boarding fees, increased by 7.8% to RMB361.8 million, driven by higher full-time student enrollment - Revenue increased by approximately **7.8%** from approximately **RMB335.8 million** for the six months ended June 30, 2024, to approximately **RMB361.8 million** for the six months ended June 30, 2025[55](index=55&type=chunk) - The increase in revenue was primarily due to higher tuition and boarding fees resulting from an increase in the total number of **full-time enrolled students** during the reporting period[55](index=55&type=chunk) [Cost of Sales](index=21&type=section&id=Cost%20of%20Sales) Cost of sales rose by 18.3% to RMB238.8 million, mainly due to increased staff numbers and salaries, higher depreciation, cooperative education costs, and campus property management expenses - Cost of sales increased by approximately **18.3%** from approximately **RMB201.8 million** for the six months ended June 30, 2024, to approximately **RMB238.8 million** for the six months ended June 30, 2025[56](index=56&type=chunk) - The increase was primarily due to an increase in the number of teaching staff and their average salaries, increased depreciation of property, plant and equipment, higher cooperative education costs, and increased campus property management and service expenses[56](index=56&type=chunk) [Gross Profit and Gross Margin](index=21&type=section&id=Gross%20Profit%20and%20Gross%20Margin) Gross profit decreased by 8.2% to RMB123.0 million, with gross margin falling from 39.9% to 34.0%, primarily due to increased cost of sales - Gross profit decreased by approximately **8.2%** from approximately **RMB134.0 million** for the six months ended June 30, 2024, to approximately **RMB123.0 million** for the six months ended June 30, 2025[57](index=57&type=chunk) - Gross margin decreased from approximately **39.9%** to approximately **34.0%**[57](index=57&type=chunk) - The decrease in gross profit and gross margin was primarily due to an increase in the number of teaching staff and their average salaries, increased depreciation of property, plant and equipment, higher cooperative education costs, and increased campus property management and service expenses[57](index=57&type=chunk) [Other Income and Gains](index=21&type=section&id=Other%20Income%20and%20Gains) Other income and gains increased by 21.6% to RMB33.9 million, primarily driven by higher rental income - Other income and gains increased by approximately **21.6%** from approximately **RMB27.8 million** for the six months ended June 30, 2024, to approximately **RMB33.9 million** for the six months ended June 30, 2025[58](index=58&type=chunk) - This increase was primarily attributable to higher **rental income**[58](index=58&type=chunk) [Selling and Distribution Expenses](index=22&type=section&id=Selling%20and%20Distribution%20Expenses) Selling and distribution expenses rose by 3.7% to RMB13.9 million, mainly due to increased promotional costs in anticipation of higher full-time student enrollment for the 2025/2026 academic year - Selling and distribution expenses increased by approximately **3.7%** from approximately **RMB13.4 million** for the six months ended June 30, 2024, to approximately **RMB13.9 million** for the six months ended June 30, 2025[59](index=59&type=chunk) - This increase was primarily due to higher promotional expenses in anticipation of an increase in the total number of **full-time enrolled students** for the **2025/2026 academic year**[59](index=59&type=chunk) [Administrative Expenses](index=22&type=section&id=Administrative%20Expenses) Administrative expenses decreased by 4.7% to RMB41.8 million, primarily due to reduced staff costs and benefits - Administrative expenses decreased by approximately **4.7%** from approximately **RMB43.9 million** for the six months ended June 30, 2024, to approximately **RMB41.8 million** for the six months ended June 30, 2025[60](index=60&type=chunk) - This decrease was primarily attributable to a reduction in **staff costs and benefits**[60](index=60&type=chunk) [Other Expenses](index=22&type=section&id=Other%20Expenses) Other expenses decreased by 9.9% to RMB12.6 million, primarily due to reduced donations and exchange losses - Other expenses decreased by approximately **9.9%** from approximately **RMB14.0 million** for the six months ended June 30, 2024, to approximately **RMB12.6 million** for the six months ended June 30, 2025[61](index=61&type=chunk) - This decrease was primarily attributable to a reduction in **donations and exchange losses**[61](index=61&type=chunk) [Finance Costs](index=22&type=section&id=Finance%20Costs) Finance costs decreased by 18.7% to RMB4.9 million, aligning with a reduction in weighted average interest-bearing bank and other borrowings during the period - Finance costs decreased by approximately **18.7%** from approximately **RMB6.0 million** for the six months ended June 30, 2024, to approximately **RMB4.9 million** for the six months ended June 30, 2025[62](index=62&type=chunk) - This decrease is consistent with a reduction in the weighted average interest-bearing bank and other borrowings during the reporting period[62](index=62&type=chunk) [Profit for the Period](index=23&type=section&id=Profit%20for%20the%20Period) The Group's profit for the period decreased by 4.6% year-on-year to RMB83.7 million, reflecting the combined impact of various financial factors - The Group's profit for the period decreased by approximately **4.6%** from approximately **RMB87.8 million** for the six months ended June 30, 2024, to approximately **RMB83.7 million** for the six months ended June 30, 2025[63](index=63&type=chunk) [Financial and Liquidity Position](index=23&type=section&id=Financial%20and%20Liquidity%20Position) As of June 30, 2025, the Group's liquidity significantly improved with positive net current assets, while total interest-bearing borrowings reached RMB323.4 million, increasing the gearing ratio to 18.7%, with no significant contingent liabilities or pledged assets [Current Assets and Current Liabilities](index=23&type=section&id=Current%20Assets%20and%20Current%20Liabilities) As of June 30, 2025, net current assets improved significantly to RMB5.2 million from a RMB177.3 million deficit, driven by increased cash and reduced contract liabilities - As of June 30, 2025, the Group's net current assets were approximately **RMB5.2 million**, an increase of approximately **102.9%** from net current liabilities of approximately **RMB177.3 million** as of December 31, 2024[64](index=64&type=chunk) - The increase in current assets was primarily due to an increase in cash and cash equivalents resulting from higher long-term borrowings[64](index=64&type=chunk) - The decrease in current liabilities primarily reflected a reduction in contract liabilities of approximately **RMB172.9 million** due to the recognition of tuition and boarding fees as revenue for the **2024/2025 academic year**[64](index=64&type=chunk) [Indebtedness](index=23&type=section&id=Indebtedness) As of June 30, 2025, interest-bearing bank and other borrowings totaled RMB323.4 million, denominated in RMB with annual rates from 2.6% to 6.8%, managed through internal cash flow and bank borrowings for sustainability and flexibility - As of June 30, 2025, the Group's interest-bearing bank and other borrowings were approximately **RMB323.4 million**, denominated in RMB[65](index=65&type=chunk) - Interest-bearing bank and other borrowings bear interest at effective annual rates ranging from **2.6% to 6.8%**[65](index=65&type=chunk) [Financial Assets at Fair Value Through Profit or Loss](index=24&type=section&id=Financial%20Assets%20at%20Fair%20Value%20Through%20Profit%20or%20Loss) As of June 30, 2025, the Group held no financial assets at fair value through profit or loss, primarily due to the recovery of an unlisted investment in February 2025 - As of June 30, 2025, the Group had no financial assets at fair value through profit or loss (December 31, 2024: **RMB0.03 million**)[66](index=66&type=chunk) - The decrease was primarily due to the recovery of an **unlisted investment in February 2025**[66](index=66&type=chunk) [Contingent Liabilities and Guarantees](index=24&type=section&id=Contingent%20Liabilities%20and%20Guarantees) As of June 30, 2025, the Group had no unrecorded material contingent liabilities, guarantees, or significant litigation against any member company - As of June 30, 2025, the Group had **no unrecorded material contingent liabilities, guarantees, or any significant litigation** against any member of the Group[67](index=67&type=chunk) [Pledge of Assets](index=24&type=section&id=Pledge%20of%20Assets) As of June 30, 2025, the Group had no assets pledged as security for bank loans and other borrowings - As of June 30, 2025, the Group had **no assets pledged** as security for bank loans and other borrowings[68](index=68&type=chunk) [Foreign Exchange Risk](index=24&type=section&id=Foreign%20Exchange%20Risk) The Group's revenue, most expenses, and bank balances are primarily in RMB, with no current foreign currency hedging policy, but management continuously assesses foreign exchange risk exposure - All of the Group's revenue and most expenses are denominated in **RMB**, and most bank balances are also in RMB[69](index=69&type=chunk) - The Group currently has **no foreign currency hedging policy**, but management will continuously assess foreign exchange risk exposure[69](index=69&type=chunk) [Gearing Ratio](index=24&type=section&id=Gearing%20Ratio) The gearing ratio increased from 10.9% as of December 31, 2024, to 18.7% as of June 30, 2025, primarily due to increased interest-bearing bank and other borrowings - The gearing ratio increased from approximately **10.9%** as of December 31, 2024, to approximately **18.7%** as of June 30, 2025[70](index=70&type=chunk) - The increase was primarily due to an increase in the Group's **interest-bearing bank and other borrowings**[70](index=70&type=chunk) [Employees, Remuneration Policy and Training](index=24&type=section&id=Employees,%20Remuneration%20Policy%20and%20Training) As of June 30, 2025, the Group had 2,005 employees, with remuneration based on performance, experience, and industry practice, and a strong focus on employee training and career development - As of June 30, 2025, the Group had a total of **2,005 employees**[71](index=71&type=chunk) - Employee remuneration is based on performance, experience, and prevailing industry practice, and is reviewed regularly[71](index=71&type=chunk) - The Group values employee training and career development, investing in education and training programs to enhance staff awareness of the latest industry trends and developments[71](index=71&type=chunk) [Use of Net Proceeds from the Company's Initial Public Offering](index=25&type=section&id=Use%20of%20Net%20Proceeds%20from%20the%20Company%27s%20Initial%20Public%20Offering) Net IPO proceeds were approximately HK$446.0 million, with HK$325.1 million (72.9%) utilized by June 30, 2025, mainly for facilities, equipment, and acquisitions, and the remaining HK$120.9 million to be deployed as planned - The net proceeds from the global offering were approximately **HK$446.0 million**[72](index=72&type=chunk) - As of June 30, 2025, **HK$325.1 million** of the net proceeds had been utilized, representing approximately **72.9%**[72](index=72&type=chunk) Summary of Use of Net Proceeds (HK$ million) | Use | Intended Allocation | Amount Utilized (As of June 30, 2025) | Unutilized Amount (As of June 30, 2025) | | :--- | :--- | :--- | :--- | | Construction of new teaching and administrative facilities and purchase of teaching equipment | 272.6 | 201.8 | 70.8 | | Construction of industry-education integration industrial park | 13.4 | 4.3 | 9.1 | | Acquisition of other schools and education service providers | 115.4 | 74.4 | 41.0 | | Working capital | 44.6 | 44.6 | — | | **Total** | **446.0** | **325.1** | **120.9** | - There has been no change in the intended use and expected timetable for the net proceeds, and the remaining balance will be gradually utilized according to the intended uses[74](index=74&type=chunk) [Other Information](index=26&type=section&id=Other%20Information) This section covers significant post-reporting events, interim dividend arrangements, share register closure, listed securities trading, material investments, future plans, corporate governance compliance, directors' securities trading, audit committee review, and interim report publication [Significant Events After Reporting Period](index=26&type=section&id=Significant%20Events%20After%20Reporting%20Period) There have been no significant events of the Company requiring shareholders' attention from the end of the reporting period up to the date of this announcement - From the end of the reporting period up to the date of this announcement, there have been **no significant events** of the Company requiring shareholders' attention[75](index=75&type=chunk) [Interim Dividend](index=26&type=section&id=Interim%20Dividend) The Board recommended an interim dividend of HK2.0 cents per share for the six months ended June 30, 2025, payable on September 30, 2025, to shareholders on record as of September 16, 2025 - The Board has recommended an interim dividend of **HK2.0 cents per share** for the six months ended June 30, 2025 (June 30, 2024: HK2.2 cents)[76](index=76&type=chunk) - The interim dividend will be paid on **September 30, 2025**, to shareholders whose names appear on the Company's register of members on **September 16, 2025**[76](index=76&type=chunk) [Closure of Register of Members](index=26&type=section&id=Closure%20of%20Register%20of%20Members) The Company will close its register of members from September 15 to September 16, 2025, to determine interim dividend eligibility, requiring all share transfer documents by 4:30 p.m. on September 12, 2025 - The Company's register of members will be closed from **Monday, September 15, 2025, to Tuesday, September 16, 2025**[77](index=77&type=chunk) - To be eligible for the proposed interim dividend, all share transfer documents must be lodged with the Company's Hong Kong share registrar by **4:30 p.m. on Friday, September 12, 2025**[77](index=77&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=26&type=section&id=Purchase,%20Sale%20or%20Redemption%20of%20the%20Company%27s%20Listed%20Securities) For the six months ended June 30, 2025, neither the Company nor its subsidiaries purchased, redeemed, or sold any listed securities, and no treasury shares were held - For the six months ended June 30, 2025, neither the Company nor any of its subsidiaries purchased, redeemed, or sold any of the Company's **listed securities**[78](index=78&type=chunk) - As of June 30, 2025, the Company held **no treasury shares**[78](index=78&type=chunk) [Material Investments Held, Material Acquisitions and Disposals of Subsidiaries and Affiliated Companies](index=26&type=section&id=Material%20Investments%20Held,%20Material%20Acquisitions%20and%20Disposals%20of%20Subsidiaries%20and%20Affiliated%20Companies) Except as disclosed, the Group held no material investments and made no material acquisitions or disposals of subsidiaries, associates, joint ventures, or affiliated companies during the reporting period - During the reporting period, the Group held **no material investments** and made no material acquisitions or disposals of subsidiaries, associates, joint ventures, or affiliated companies[79](index=79&type=chunk) [Future Plans for Material Investments and Investment Capital Assets](index=27&type=section&id=Future%20Plans%20for%20Material%20Investments%20and%20Investment%20Capital%20Assets) Except as disclosed, as of June 30, 2025, the Group had no plans for material investments or investment capital assets - As of June 30, 2025, the Group had **no plans for material investments** or investment capital assets[80](index=80&type=chunk) [Corporate Governance Code](index=27&type=section&id=Corporate%20Governance%20Code) The Company adopted and complied with all code provisions of the Corporate Governance Code in Appendix C1 of the Listing Rules throughout the reporting period - The Company has adopted the principles and code provisions of the **Corporate Governance Code in Appendix C1 of the Listing Rules**[81](index=81&type=chunk) - During the reporting period, the Company has complied with **all code provisions** in Part 2 of the Corporate Governance Code[81](index=81&type=chunk) [Model Code for Securities Transactions by Directors](index=27&type=section&id=Model%20Code%20for%20Securities%20Transactions%20by%20Directors) The Company adopted and confirmed compliance by all directors with the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix C3 of the Listing Rules for the six months ended June 30, 2025 - The Company has adopted the **Model Code for Securities Transactions by Directors of Listed Issuers** as set out in Appendix C3 of the Listing Rules[82](index=82&type=chunk) - For the six months ended June 30, 2025, all directors have complied with the required standards set out in the Model Code[82](index=82&type=chunk) [Audit Committee and Review of Interim Financial Information](index=27&type=section&id=Audit%20Committee%20and%20Review%20of%20Interim%20Financial%20Information) The Audit Committee, with management, reviewed the Group's accounting principles, policies, and financial reporting matters, including the unaudited consolidated results for the six months ended June 30, 2025 - The Board's Audit Committee, together with management, has reviewed the accounting principles and policies adopted by the Group and discussed financial reporting matters[83](index=83&type=chunk) - The Audit Committee has reviewed the Group's **unaudited consolidated results** for the six months ended June 30, 2025[83](index=83&type=chunk) [Publication of Interim Results Announcement and Interim Report](index=27&type=section&id=Publication%20of%20Interim%20Results%20Announcement%20and%20Interim%20Report) This interim results announcement is published on the HKEX and Company websites, and the interim report for the six months ended June 30, 2025, will be made available to shareholders and published on these sites - This interim results announcement has been published on the website of **The Stock Exchange of Hong Kong Limited (www.hkexnews.hk)** and the Company's website **(www.scvedugroup.com)**[84](index=84&type=chunk) - The Company's interim report for the six months ended June 30, 2025, will be made available to shareholders and published on the aforementioned websites in due course[84](index=84&type=chunk) [Acknowledgement](index=28&type=section&id=Acknowledgement) The Board extends sincere gratitude to the Group's management, employees, shareholders, business partners, banks, and auditors for their dedication and support throughout the reporting period - The Board expresses its sincere gratitude for the dedication and efforts of the Group's **management and all employees**[85](index=85&type=chunk) - The Board also extends its sincere gratitude for the support from the Company's **shareholders, business partners, banks, and auditors** throughout the reporting period[85](index=85&type=chunk)

[Summary](index=1&type=section&id=%E6%91%98%E8%A6%81) The company experienced a decline in turnover and gross profit, an increased fair value loss on investment properties, and a higher net loss for the period Key Financial Highlights | Metric | H1 2025 (HK$ thousand) | H1 2024 (HK$ thousand) | Change | | :--- | :--- | :--- | :--- | | Turnover | 25,049 | 25,594 | -2.13% | | Gross Profit | 14,473 | 17,696 | -18.2% | | Gross Profit Margin | 57.8% | 68.2% | -10.4% | | Fair Value Loss on Investment Properties | 35,870 | 24,565 | +46.02% | | Net Loss for the Period | 44,271 | 36,433 | +21.51% | | Total Assets (End of Period) | 1,062,360 | 1,069,099 (Dec 31, 2024) | -0.63% | [Interim Results](index=2&type=section&id=%E4%B8%AD%E6%9C%9F%E6%A5%AD%E7%B8%BE) This section presents the condensed consolidated financial statements, including statements of profit or loss, comprehensive income, and financial position [Condensed Consolidated Statement of Profit or Loss](index=2&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E6%90%8D%E7%9B%8A%E8%A1%A8) For the six months ended June 30, 2025, the company's turnover decreased year-on-year, while cost of sales increased, leading to a reduction in gross profit, and a significant increase in fair value loss on investment properties expanded the loss for the period to HK$44,271 thousand Condensed Consolidated Statement of Profit or Loss | Metric | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Turnover | 25,049 | 25,954 | | Cost of Sales | (10,576) | (8,258) | | Gross Profit | 14,473 | 17,696 | | Fair Value Loss on Investment Properties | (35,870) | (24,565) | | Finance Costs | (19,377) | (20,924) | | Loss Before Tax | (53,238) | (42,574) | | Income Tax Credit | 8,967 | 6,141 | | Loss for the Period | (44,271) | (36,433) | [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=3&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E6%90%8D%E7%9B%8A%E5%8F%8A%E5%85%B6%E4%BB%96%E5%85%A8%E9%9D%A2%E6%94%B6%E7%9B%8A%E8%A1%A8) During the reporting period, the company's loss for the period was HK$44,271 thousand, but positive exchange differences from foreign operations significantly reduced the total comprehensive expense for the period (net of tax) to HK$11,222 thousand, a substantial improvement from the prior year Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income | Metric | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Loss for the Period | (44,271) | (36,433) | | Exchange Differences Arising from Translation of Foreign Operations | 32,865 | (14,636) | | Total Comprehensive Expense for the Period (Net of Tax) | (11,222) | (50,833) | [Condensed Consolidated Statement of Financial Position](index=4&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81%E5%A0%B1%E8%A1%A8) As of June 30, 2025, the company's total assets slightly decreased, with investment properties remaining the primary component of non-current assets, and net current liabilities increased, indicating liquidity pressure Condensed Consolidated Statement of Financial Position | Metric | June 30, 2025 (HK$ thousand) | Dec 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | **Assets** | | | | Investment Properties | 1,034,505 | 1,036,596 | | Bank Balances and Cash | 4,032 | 9,721 | | **Total Assets** | **1,062,360** | **1,069,099** | | **Equity and Liabilities** | | | | Equity Attributable to Owners of the Company | 590,274 | 601,496 | | Borrowings - Due After One Year | 359,997 | 349,576 | | Borrowings - Due Within One Year | 10,989 | 8,510 | | **Total Liabilities** | **472,085** | **467,602** | | Net Current Liabilities | (23,022) | (17,833) | [Notes to the Condensed Consolidated Financial Statements](index=6&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8%E9%99%84%E8%A8%BB) This section provides detailed explanations and disclosures regarding the preparation basis, accounting policies, segment information, and other financial statement items [1. Basis of Preparation](index=6&type=section&id=1.%20%E7%B7%A8%E8%A3%BD%E5%9F%BA%E6%BA%96) The company, incorporated in the Cayman Islands, primarily engages in property investment, development, and management in China, with condensed consolidated interim financial information prepared on a going concern basis despite net current liabilities - The company's principal activities are property investment, development, and management in China[8](index=8&type=chunk) - The condensed consolidated financial statements are prepared on a going concern basis, as the directors expect the company to have sufficient liquidity to meet its financial obligations, despite net current liabilities of approximately **HK$23,022 thousand**[10](index=10&type=chunk) - The company plans to maintain its going concern through mortgage loan financing, accelerated collection of receivables, and cost control measures[12](index=12&type=chunk) [2. Significant Accounting Policies](index=7&type=section&id=2.%20%E4%B8%BB%E8%A6%81%E6%9C%83%E8%A8%88%E6%94%BF%E7%AD%96) The condensed consolidated interim financial information is prepared on a historical cost basis, with certain properties and financial instruments measured at fair value, and new or revised HKFRSs applied in this period had no significant impact on the financial information - Financial information is prepared on a historical cost basis, with certain properties and financial instruments measured at fair value[11](index=11&type=chunk) - New and revised Hong Kong Financial Reporting Standards (such as HKAS 21 Amendment) applied for the first time in this period had no significant impact on the condensed consolidated interim financial information[13](index=13&type=chunk) [3. Segment Information](index=8&type=section&id=3.%20%E5%88%86%E9%83%A8%E8%B3%87%E6%96%99) The Group's operating segments include property development, property investment, and property management businesses, with property investment being the main revenue source, though its turnover and operating results declined, and fair value loss on investment properties significantly increased - The Group's operating segments include property development business, property investment business, and property management business[15](index=15&type=chunk) Segment Turnover and Results (For the six months ended June 30, 2025) | Segment | Turnover (HK$ thousand) | Segment Operating Results (HK$ thousand) | | :--- | :--- | :--- | | Property Development Business | – | (261) | | Property Investment Business | 16,869 | 8,795 | | Property Management Business | 8,180 | 546 | | **Total** | **25,049** | **9,080** | Segment Turnover and Results (For the six months ended June 30, 2024) | Segment | Turnover (HK$ thousand) | Segment Operating Results (HK$ thousand) | | :--- | :--- | :--- | | Property Development Business | – | (401) | | Property Investment Business | 17,867 | 9,188 | | Property Management Business | 8,087 | 2,227 | | **Total** | **25,954** | **11,014** | - Fair value loss on investment properties increased from **HK$24,565 thousand** in the prior year period to **HK$35,870 thousand** in the current period[17](index=17&type=chunk)[18](index=18&type=chunk) [4. Finance Costs](index=11&type=section&id=4.%20%E8%B2%A1%E5%8B%99%E8%B2%BB%E7%94%A8) For the six months ended June 30, 2025, total finance costs decreased to HK$19,377 thousand from HK$20,924 thousand in the prior year, primarily due to reduced interest expenses on bank loans and other borrowings Composition of Finance Costs | Item | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Interest expense on bank loans and other borrowings | 19,256 | 20,909 | | Interest expense on lease liabilities | 121 | 15 | | **Total** | **19,377** | **20,924** | [5. Income Tax Credit](index=11&type=section&id=5.%20%E6%89%80%E5%BE%97%E7%A8%85%E6%8A%B5%E5%85%8D) The income tax credit for the period was HK$8,967 thousand, mainly arising from deferred tax credit on fair value loss on investment properties, with the company not subject to current tax in Hong Kong and China Income Tax Credit | Item | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Current tax expense for the period | – | – | | Deferred tax credit for the period | (8,967) | (6,141) | | **Total** | **(8,967)** | **(6,141)** | - The income tax credit is primarily attributable to deferred tax credit arising from fair value loss on investment properties[41](index=41&type=chunk) [6. Loss for the Period](index=12&type=section&id=6.%20%E6%9C%9F%E9%96%93%E8%99%A7%E6%90%8D) The loss for the period was HK$44,271 thousand, primarily influenced by employee costs, depreciation, net rental income from investment properties, and related operating expenses Components of Loss for the Period | Item | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Total employee costs | 11,045 | 10,062 | | Depreciation of property, plant and equipment | 59 | 82 | | Depreciation of right-of-use assets | 1,220 | 1,486 | | Net rental income from investment properties | (11,397) | (14,032) | [7. Dividends](index=13&type=section&id=7.%20%E8%82%A1%E6%81%AF) The Board of Directors does not recommend the payment of an interim dividend for the six months ended June 30, 2025 - The Board of Directors does not recommend the payment of an interim dividend for the current period[24](index=24&type=chunk)[51](index=51&type=chunk) [8. Loss Per Share](index=13&type=section&id=8.%20%E6%AF%8F%E8%82%A1%E8%99%A7%E6%90%8D) For the six months ended June 30, 2025, basic loss per share expanded to 1.42 HK cents, compared to 1.16 HK cents in the prior year Loss Per Share | Metric | 2025 (HK cents) | 2024 (HK cents) | | :--- | :--- | :--- | | Basic Loss Per Share | (1.42) | (1.16) | - The weighted average number of ordinary shares used for calculating basic and diluted loss per share was **3,128,278,542 shares**[25](index=25&type=chunk) [9. Trade and Other Receivables](index=14&type=section&id=9.%20%E8%B2%BF%E6%98%93%E6%87%89%E6%94%B6%E8%B3%A6%E6%AC%BE%E5%8F%8A%E5%85%B6%E4%BB%96%E6%87%89%E6%94%B6%E6%AC%BE%E9%A0%85) As of June 30, 2025, total trade and other receivables increased to HK$21,120 thousand from December 31, 2024, with trade receivables over 180 days accounting for the largest portion Trade and Other Receivables | Item | June 30, 2025 (HK$ thousand) | Dec 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Trade receivables (net of allowance) | 12,754 | 10,500 | | Prepayments and deposits | 5,705 | 5,246 | | Other receivables (net of allowance) | 8,366 | 8,318 | | **Total** | **21,120** | **18,818** | Ageing Analysis of Trade Receivables (Net of Credit Loss Allowance) | Ageing | June 30, 2025 (HK$ thousand) | Dec 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Within 90 days | 2,838 | 2,536 | | 91 to 180 days | 3,009 | 1,251 | | Over 180 days | 6,907 | 6,713 | | **Total** | **12,754** | **10,500** | [10. Trade and Other Payables](index=15&type=section&id=10.%20%E8%B2%BF%E6%98%93%E6%87%89%E4%BB%98%E8%B3%A6%E6%AC%BE%E5%8F%8A%E5%85%B6%E4%BB%96%E6%87%89%E4%BB%98%E6%AC%BE%E9%A0%85) As of June 30, 2025, total trade and other payables were HK$25,339 thousand, slightly lower than December 31, 2024, with trade payables over 180 days representing a significant portion Trade and Other Payables | Item | June 30, 2025 (HK$ thousand) | Dec 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Trade payables | 6,791 | 6,187 | | Interest payable | 794 | 1,150 | | Accrued expenses and other taxes payable | 6,641 | 6,736 | | Other payables | 11,113 | 11,969 | | **Total** | **25,339** | **26,042** | - Trade payables primarily include demolition costs for the former hotel business, construction materials, property inventories, and unpaid amounts for investment property construction projects[27](index=27&type=chunk) [Management Discussion and Analysis](index=16&type=section&id=%E7%AE%A1%E7%90%86%E5%B1%A4%E8%A8%8E%E8%AB%96%E5%8F%8A%E5%88%86%E6%9E%90) This section provides an overview of the Group's business and financial performance, including segment reviews, financial highlights, liquidity, and future outlook [Business Review](index=16&type=section&id=%E6%A5%AD%E5%8B%99%E5%9B%9E%E9%A1%A7) The Group primarily engages in real estate-related businesses, including property investment and property management, with property investment experiencing a decline in rental income and average occupancy, while property management revenue slightly increased and expanded with a new Henan branch [Property Investment Business](index=16&type=section&id=%E7%89%A9%E6%A5%AD%E6%8A%95%E8%B3%87%E6%A5%AD%E5%8B%99) The Group primarily conducts property investment through Future City Shopping Mall and its car park, both of which experienced a decrease in rental income and average occupancy, leading to a slight reduction in the total fair value of investment properties - Future City Shopping Mall has a total leasable area of approximately **55,029 sqm**, with a fair value of approximately **HK$926,400 thousand** as of June 30, 2025[30](index=30&type=chunk) Future City Rental Income and Occupancy Rate | Metric | For the six months ended June 30, 2025 | For the six months ended June 30, 2024 | | :--- | :--- | :--- | | Rental Income | Approx. HK$14,900 thousand | Approx. HK$17,400 thousand | | Average Occupancy Rate | Approx. 88.2% | Approx. 89.8% | - As of June 30, 2025, the Group held investment properties with a total fair value of approximately **HK$1,034,500 thousand**, slightly lower than **HK$1,036,600 thousand** as of December 31, 2024[33](index=33&type=chunk) [Property Management Business](index=17&type=section&id=%E7%89%A9%E6%A5%AD%E7%AE%A1%E7%90%86%E6%A5%AD%E5%8B%99) Property management business revenue slightly increased, primarily due to the establishment of the Henan branch and contributions from new contracts Property Management Business Revenue | Metric | For the six months ended June 30, 2025 | For the six months ended June 30, 2024 | | :--- | :--- | :--- | | Revenue | Approx. HK$8,200 thousand | Approx. HK$8,100 thousand | - Wuhan Future City Property Management Co., Ltd. Henan Branch generated approximately **HK$1,700 thousand** in property management service income during the period[34](index=34&type=chunk) [Financial Review](index=17&type=section&id=%E8%B2%A1%E5%8B%99%E5%9B%9E%E9%A1%A7) This section provides a detailed analysis of changes in various financial indicators during the reporting period, showing a decline in turnover, an increase in cost of sales, a significant drop in gross profit and gross profit margin, an expanded fair value loss on investment properties, but reduced administrative and finance costs, ultimately leading to an increased loss attributable to owners of the company [Turnover](index=17&type=section&id=%E7%87%9F%E6%A5%AD%E9%A1%8D) Turnover for the period decreased to approximately HK$25,000 thousand, mainly due to reduced rental income from Future City and lower property management income Turnover Comparison | Metric | For the six months ended June 30, 2025 | For the six months ended June 30, 2024 | | :--- | :--- | :--- | | Total Turnover | Approx. HK$25,000 thousand | Approx. HK$26,000 thousand | | Property Investment Business Turnover | Approx. HK$16,900 thousand | Approx. HK$17,900 thousand | | Property Management Business Turnover | Approx. HK$8,200 thousand | Approx. HK$8,100 thousand | [Cost of Sales](index=18&type=section&id=%E9%8A%B7%E5%94%AE%E6%88%90%E6%9C%AC) Cost of sales increased to approximately HK$10,600 thousand, primarily due to increased property management service costs for the Henan branch and higher staff costs for two car parks Cost of Sales Comparison | Metric | For the six months ended June 30, 2025 | For the six months ended June 30, 2024 | | :--- | :--- | :--- | | Total Cost of Sales | Approx. HK$10,600 thousand | Approx. HK$8,200 thousand | | Property Investment Segment Cost of Sales | Approx. HK$5,500 thousand | HK$3,800 thousand | | Property Management Business Cost of Sales | Approx. HK$5,100 thousand | HK$4,400 thousand | [Gross Profit and Gross Profit Margin](index=18&type=section&id=%E6%AF%9B%E5%88%A9%E5%8F%8A%E6%AF%9B%E5%88%A9%E7%8E%87) Gross profit decreased to approximately HK$14,500 thousand, with the overall gross profit margin declining to 57.8%, mainly due to a decrease in the gross profit margin of the property investment business Gross Profit and Gross Profit Margin Comparison | Metric | For the six months ended June 30, 2025 | For the six months ended June 30, 2024 | | :--- | :--- | :--- | | Gross Profit | Approx. HK$14,500 thousand | HK$17,700 thousand | | Overall Gross Profit Margin | 57.8% | 68.2% | [Changes in Fair Value of Investment Properties](index=18&type=section&id=%E6%8A%95%E8%B3%87%E7%89%A9%E6%A5%AD%E7%9A%84%E5%85%AC%E5%B9%B3%E5%80%BC%E8%AE%8A%E5%8B%95) Fair value loss on investment properties expanded to approximately HK$35,900 thousand, an increase from the prior year period Fair Value Loss on Investment Properties | Metric | For the six months ended June 30, 2025 | For the six months ended June 30, 2024 | | :--- | :--- | :--- | | Fair Value Loss | Approx. HK$35,900 thousand | Approx. HK$24,600 thousand | [Administrative Expenses](index=18&type=section&id=%E8%A1%8C%E6%94%BF%E9%96%8B%E6%94%AF) Administrative expenses decreased by approximately 12.9% to approximately HK$12,100 thousand, primarily due to reduced legal and professional fees and staff costs Administrative Expenses Comparison | Metric | For the six months ended June 30, 2025 | For the six months ended June 30, 2024 | | :--- | :--- | :--- | | Administrative Expenses | Approx. HK$12,100 thousand | Approx. HK$13,900 thousand | [Finance Costs](index=19&type=section&id=%E8%B2%A1%E5%8B%99%E8%B2%BB%E7%94%A8) Finance costs decreased to approximately HK$19,400 thousand, mainly due to reduced interest expenses on borrowings Finance Costs Comparison | Metric | For the six months ended June 30, 2025 | For the six months ended June 30, 2024 | | :--- | :--- | :--- | | Finance Costs | Approx. HK$19,400 thousand | Approx. HK$20,900 thousand | [Income Tax Credit](index=19&type=section&id=%E6%89%80%E5%BE%97%E7%A8%85%E6%8A%B5%E5%85%8D) Income tax credit increased to approximately HK$9,000 thousand, primarily attributable to deferred tax credit arising from fair value loss on investment properties Income Tax Credit Comparison | Metric | For the six months ended June 30, 2025 | For the six months ended June 30, 2024 | | :--- | :--- | :--- | | Income Tax Credit | Approx. HK$9,000 thousand | Approx. HK$6,100 thousand | [Loss Attributable to Owners of the Company](index=19&type=section&id=%E6%9C%AC%E5%85%AC%E5%8F%B8%E6%93%81%E6%9C%89%E4%BA%BA%E6%87%89%E4%BD%94%E8%99%A7%E6%90%8D) Loss attributable to owners of the company expanded to approximately HK$44,300 thousand, primarily due to the increased fair value loss on investment properties Loss Attributable to Owners of the Company Comparison | Metric | For the six months ended June 30, 2025 | For the six months ended June 30, 2024 | | :--- | :--- | :--- | | Loss | Approx. HK$44,300 thousand | Approx. HK$36,400 thousand | [Liquidity, Financial and Capital Resources](index=19&type=section&id=%E6%B5%81%E5%8B%95%E8%B3%87%E9%87%91%E3%80%81%E8%B2%A1%E5%8B%99%E5%8F%8A%E8%B3%87%E6%9C%AC%E8%B3%87%E6%BA%90) The Group's cash position declined, total debt increased, and most investment properties are pledged, with both gearing ratio and current ratio indicating increased financial leverage and liquidity pressure [Cash Position](index=19&type=section&id=%E7%8F%BE%E9%87%91%E7%8B%80%E6%B3%81) As of June 30, 2025, total bank balances and cash decreased to approximately HK$4,000 thousand Bank Balances and Cash | Metric | June 30, 2025 (HK$ thousand) | Dec 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Bank Balances and Cash | Approx. HK$4,000 thousand | HK$9,700 thousand | [Borrowings and Pledges of the Group's Assets](index=19&type=section&id=%E5%80%9F%E6%AC%BE%E5%8F%8A%E6%9C%AC%E9%9B%86%E5%9C%98%E8%B3%87%E7%94%A2%E7%9A%84%E6%8A%B5%E6%8A%BC) The Group's total debt increased to approximately HK$371,000 thousand, with most due after one year, and approximately HK$435,600 thousand of investment properties are pledged as collateral for bank financing Total Debt | Metric | June 30, 2025 (HK$ thousand) | Dec 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Total Debt | Approx. HK$371,000 thousand | HK$358,100 thousand | | Due Within One Year | Approx. HK$11,000 thousand | Approx. HK$8,500 thousand | | Due After One Year | Approx. HK$360,000 thousand | Approx. HK$349,600 thousand | - Approximately **HK$435,600 thousand** of investment properties are pledged as collateral for bank financing[45](index=45&type=chunk) [Gearing Ratio and Current Ratio](index=20&type=section&id=%E8%B3%87%E7%94%A2%E8%B2%A0%E5%82%B5%E6%AF%94%E7%8E%87%E5%8F%8A%E6%B5%81%E5%8B%95%E6%AF%94%E7%8E%87) As of June 30, 2025, the gearing ratio increased to 62.2%, and the current ratio decreased to 0.52, indicating increased financial leverage and weakened liquidity Financial Ratios | Metric | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Gearing Ratio | 62.2% | 57.9% | | Current Ratio | 0.52 | 0.62 | [Prospects and Future Plans](index=20&type=section&id=%E5%89%8D%E6%99%AF%E5%8F%8A%E6%9C%AA%E4%BE%86%E8%A8%88%E5%8B%92) Looking ahead to the second half, the global political and economic environment remains complex and challenging, with the Chinese economy facing difficulties, and the Group will closely monitor market changes, respond flexibly, and actively seek potential projects aligned with its core businesses, including infrastructure-related ventures - Global political instability and a complex and challenging operating environment persist, with the Chinese economy facing a difficult recovery[47](index=47&type=chunk) - Management will closely monitor domestic and international political and economic developments and market trends, responding flexibly and making prudent decisions[47](index=47&type=chunk) - Actively seeking potential projects aligned with the Group's principal businesses, including infrastructure-related businesses[47](index=47&type=chunk) [Contingent Liabilities and Commitments](index=20&type=section&id=%E6%88%96%E7%84%B6%E8%B2%A0%E5%82%B5%E5%8F%8A%E6%89%BF%E6%93%94) As of the end of the reporting period, the Group had no significant contingent liabilities and commitments - As of June 30, 2025, and December 31, 2024, the Group had no significant contingent liabilities and commitments[48](index=48&type=chunk) [Events After Reporting Period](index=20&type=section&id=%E5%A0%B1%E5%91%8A%E6%9C%9F%E5%BE%8C%E4%BA%8B%E9%A0%85) As of the date of this announcement, no significant events occurred after the reporting period - As of the date of this announcement, there were no significant events after the reporting period[49](index=49&type=chunk) [Other Information](index=21&type=section&id=%E5%85%B6%E4%BB%96%E8%B3%87%E6%96%99) This section covers details regarding employees, remuneration policy, interim dividends, share transactions, directors' securities dealings, corporate governance, and audit committee activities [Employees and Remuneration Policy](index=21&type=section&id=%E5%83%B1%E5%93%A1%E5%8F%8A%E8%96%AA%E9%85%AC%E6%94%BF%E7%AD%96) As of June 30, 2025, the Group's total number of employees increased to 121, with a corresponding increase in total staff costs Employee Count and Costs | Metric | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Total Employees | 121 employees | 114 employees | | Total Staff Costs | Approx. HK$10,500 thousand | Approx. HK$10,100 thousand | [Interim Dividend](index=21&type=section&id=%E4%B8%AD%E6%9C%9F%E8%82%A1%E6%81%AF) The Board of Directors resolved not to declare an interim dividend for the current period - The Board of Directors resolved not to declare an interim dividend for the current period[51](index=51&type=chunk) [Purchase, Sale or Redemption of the Company's Shares](index=21&type=section&id=%E8%B2%B7%E8%B3%A3%E5%8F%8A%E8%B4%96%E5%9B%9E%E6%9C%AC%E5%85%AC%E5%8F%B8%E8%82%A1%E4%BB%BD) During the period, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's ordinary shares - During the period, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's ordinary shares[52](index=52&type=chunk) [Standard Code for Securities Transactions by Directors](index=21&type=section&id=%E8%91%A3%E4%BA%8B%E9%80%B2%E8%A1%8C%E8%AD%89%E5%88%B8%E4%BA%A4%E6%98%93%E7%9A%84%E6%A8%99%E6%BA%96%E5%AE%88%E5%89%87) All directors confirmed compliance with the Standard Code as set out in Appendix C3 of the Listing Rules of the Stock Exchange throughout the period - All directors confirmed compliance with the Standard Code as set out in Appendix C3 of the Listing Rules of the Stock Exchange throughout the period[53](index=53&type=chunk) [Compliance with Corporate Governance Code](index=22&type=section&id=%E9%81%B5%E5%AE%88%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB%E5%AE%88%E5%89%87) The company has complied with the Corporate Governance Code, with two deviations: the Chairman and Chief Executive Officer roles are combined, and the Chairman is not subject to retirement by rotation, which the Board believes contributes to business strategy execution and strong leadership - There are two deviations from the Corporate Governance Code: the roles of Chairman and Chief Executive Officer are combined (Code Provision A.2.1), and the Chairman is not subject to retirement by rotation (Code Provision A.4.2)[54](index=54&type=chunk)[55](index=55&type=chunk) - The Board believes these deviations contribute to the execution of business strategies, enhanced operational efficiency, and strong, consistent leadership[54](index=54&type=chunk)[55](index=55&type=chunk) [Audit Committee](index=23&type=section&id=%E5%AF%A9%E6%A0%B8%E5%A7%94%E5%93%A1%E6%9C%83) The Audit Committee, comprising three independent non-executive directors, has reviewed the Group's unaudited condensed consolidated financial results for the period - The Audit Committee comprises Mr. Wu Chi Hao (Chairman), Mr. Kwok Kin Wah, and Ms. Kwong Mei Wan, all independent non-executive directors[57](index=57&type=chunk) - The Audit Committee has reviewed the Group's unaudited condensed consolidated financial results for the period[58](index=58&type=chunk) [Publication of Interim Results and Interim Report](index=23&type=section&id=%E5%85%AC%E4%BD%88%E4%B8%AD%E6%9C%9F%E6%A5%AD%E7%B8%BE%E5%8F%8A%E4%B8%AD%E6%9C%9F%E5%A0%B1%E5%91%8A) This results announcement has been published on the Stock Exchange and the company's website, and the interim report will be dispatched to shareholders and published in due course - This results announcement has been published on the Stock Exchange website www.hkexnews.hk and the company's website www.city-infrastructure.com[59](index=59&type=chunk) - The 2025 Interim Report will be dispatched to shareholders in due course and will be published on the Stock Exchange and the company's website[59](index=59&type=chunk) [By Order of the Board](index=23&type=section&id=%E6%89%BF%E8%91%A3%E4%BA%8B%E6%9C%83%E5%91%BD) This section lists the signatories of this announcement and the Board of Directors' members - The Board of Directors includes Executive Directors Mr. Li Chao Bo (Chairman and Chief Executive Officer) and Mr. Ji Jiaming; Non-executive Director Mr. Zhang Guiqing; and Independent Non-executive Directors Mr. Wu Chi Hao, Mr. Kwok Kin Wah, and Ms. Kwong Mei Wan[61](index=61&type=chunk)

[Group Financial Summary](index=1&type=section&id=Group%20Financial%20Summary) The group's financial performance for the six months ended June 30, 2025, shows significant profit growth, while its financial position remains stable with a slight decrease in total assets and liabilities Group Financial Summary for the Six Months Ended June 30, 2025 | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 2,962,658 | 2,583,798 | 14.7% | | Gross Profit | 679,071 | 615,063 | 10.4% | | Profit | 72,257 | 25,889 | 179.1% | | Profit attributable to owners of the Company | 73,903 | 28,290 | 161.2% | | Basic earnings per share (RMB) | 0.03 | 0.01 | 160.0% | Group Financial Position Summary as of June 30, 2025, and December 31, 2024 | Indicator | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Total Assets | 36,351,373 | 37,215,106 | -2.3% | | Current Assets | 25,294,884 | 25,884,057 | -2.3% | | Total Liabilities | 20,268,366 | 21,239,599 | -4.6% | | Current Liabilities | 17,404,656 | 18,925,006 | -8.0% | | Total Equity | 16,083,007 | 15,975,507 | +0.7% | | Equity attributable to owners of the Company | 15,846,134 | 15,736,988 | +0.7% | [Interim Results](index=2&type=section&id=Interim%20Results) This section provides a detailed overview of the company's financial performance and position for the interim period, highlighting key income statement and balance sheet figures [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=2&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For the six months ended June 30, 2025, the company's revenue increased by 14.7% to RMB 2.96 billion, with gross profit rising 10.4% to RMB 679 million, and profit for the period significantly growing 179.1% to RMB 72.26 million due to reduced expenses and improved other income Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (For the six months ended June 30) | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 2,962,658 | 2,583,798 | 14.7% | | Cost of Sales | (2,283,587) | (1,968,735) | 16.0% | | Gross Profit | 679,071 | 615,063 | 10.4% | | Other Income | 238,193 | 297,805 | -20.0% | | Share of (loss) profit of associates | (25,735) | (35,729) | 27.9% (Loss narrowed) | | Selling and Distribution Expenses | (58,540) | (115,900) | -49.5% | | Administrative Expenses | (344,471) | (361,321) | -4.7% | | Finance Costs | (377,785) | (384,361) | -1.7% | | Profit before tax | 90,018 | 30,881 | 191.5% | | Income Tax Expense | (17,761) | (4,992) | 255.8% | | Profit and total comprehensive income for the period | 72,257 | 25,889 | 179.1% | | Profit attributable to owners of the Company | 73,903 | 28,290 | 161.2% | | Basic earnings per share (RMB) | 0.03 | 0.01 | 160.0% | [Condensed Consolidated Statement of Financial Position](index=3&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the company's total assets slightly decreased by 2.3% to RMB 36.35 billion, total liabilities decreased by 4.6% to RMB 20.27 billion, and net current assets increased by 13.4% to RMB 7.89 billion, indicating improved liquidity Condensed Consolidated Statement of Financial Position (As of June 30, 2025, and December 31, 2024) | Indicator | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | **ASSETS** | | | | | Subtotal of Non-current Assets | 11,056,489 | 11,331,049 | -2.4% | | Subtotal of Current Assets | 25,294,884 | 25,884,057 | -2.3% | | **TOTAL ASSETS** | **36,351,373** | **37,215,106** | **-2.3%** | | **LIABILITIES** | | | | | Subtotal of Current Liabilities | 17,404,656 | 18,925,006 | -8.0% | | Subtotal of Non-current Liabilities | 2,863,710 | 2,314,593 | 23.7% | | **TOTAL LIABILITIES** | **20,268,366** | **21,239,599** | **-4.6%** | | **EQUITY** | | | | | Equity attributable to owners of the Company | 15,846,134 | 15,736,988 | +0.7% | | Non-controlling interests | 236,873 | 238,519 | -0.7% | | **TOTAL EQUITY** | **16,083,007** | **15,975,507** | **+0.7%** | | Net Current Assets | 7,890,228 | 6,959,051 | +13.4% | [Notes to the Condensed Consolidated Financial Statements](index=6&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanatory notes to the condensed consolidated financial statements, covering general information, accounting policies, and specific financial line items [General Information](index=6&type=section&id=General%20Information) China Tianrui Group Cement Company Limited, incorporated in the Cayman Islands and listed on the Hong Kong Stock Exchange, primarily manufactures and sells cement, clinker, and limestone aggregates, controlled by Tianrui Group Company Limited - The Company was incorporated in the Cayman Islands on February 7, 2011, and listed on the Hong Kong Stock Exchange on December 23, 2011[8](index=8&type=chunk) - The Group's principal activities are the manufacture and sale of cement, clinker, and limestone aggregates[8](index=8&type=chunk) - The Company is controlled by Tianrui Group Company Limited, with Mr Li Liufa and Ms Li Fengluan as the ultimate controlling parties[8](index=8&type=chunk) [Application of Revised International Financial Reporting Standards](index=6&type=section&id=Application%20of%20Revised%20International%20Financial%20Reporting%20Standards) The condensed consolidated financial statements are prepared on a historical cost basis, applying revised International Financial Reporting Standards issued by the IASB, with no significant impact on the financial statements during the reporting period - The condensed consolidated financial statements are prepared on the historical cost basis, except for certain properties and financial instruments measured at revalued amounts or fair value[10](index=10&type=chunk) - The revised International Financial Reporting Standards issued by the IASB were first applied in this interim period but had no significant impact on the condensed consolidated financial statements[10](index=10&type=chunk) [Revenue](index=7&type=section&id=Revenue) For the six months ended June 30, 2025, the Group's total revenue was RMB 2.96 billion, a 14.7% year-on-year increase, with cement sales being the largest contributor, clinker sales showing significant growth, and limestone aggregate sales decreasing Disaggregation of Revenue from Contracts with Customers (For the six months ended June 30) | Product Category | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Cement Sales | 2,235,558 | 1,870,230 | 19.5% | | Clinker Sales | 219,606 | 104,771 | 109.6% | | Limestone Aggregate Sales | 507,494 | 608,797 | -16.6% | | **Total** | **2,962,658** | **2,583,798** | **14.7%** | - Revenue is recognized when control over the goods is transferred to the customer, which is upon delivery of the goods[11](index=11&type=chunk) [Segment Information](index=7&type=section&id=Segment%20Information) The Group operates in two geographical segments: Central China and Northeast China; in the first half of 2025, Central China contributed the most revenue but saw a decline in segment profit, while Northeast China achieved significant growth in both revenue and segment profit, reversing its prior-year loss Analysis of Revenue and Results by Reportable Segment (For the six months ended June 30) | Segment | 2025 Revenue (RMB thousands) | 2024 Revenue (RMB thousands) | Revenue Change (%) | 2025 Profit (RMB thousands) | 2024 Profit (RMB thousands) | Profit Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Central China | 2,325,756 | 2,131,876 | 9.1% | 27,621 | 92,113 | -70.0% | | Northeast China | 636,902 | 451,922 | 40.9% | 31,903 | (47,710) | 166.9% (Turned loss into profit) | | **Total** | **2,962,658** | **2,583,798** | **14.7%** | **59,524** | **44,403** | **34.1%** | - Segment revenue is generated from sales to external customers, with no inter-segment sales[14](index=14&type=chunk) [Other Income](index=8&type=section&id=Other%20Income) Other income for the first half of 2025 decreased by 20.0% year-on-year to RMB 238 million, primarily due to reduced government grants and other business income, despite an increase in interest income from suppliers Other Income (For the six months ended June 30) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | VAT Refund | 44,558 | 43,077 | 3.4% | | Government Grants and Subsidies | 29,503 | 74,462 | -60.4% | | Bank Deposit Interest | 20,344 | 36,206 | -43.8% | | Interest Income from Suppliers | 23,451 | — | New | | Other Business Income | 93,034 | 118,269 | -21.3% | | **Total** | **238,193** | **297,805** | **-20.0%** | [Other Gains and Losses](index=9&type=section&id=Other%20Gains%20and%20Losses) In the first half of 2025, the Group recorded net other gains of RMB 199 thousand, a significant improvement from a loss of RMB 3.41 million in the prior year, mainly driven by foreign exchange gains and gains on disposal of financial assets Other Gains and Losses (For the six months ended June 30) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Net foreign exchange gain/(loss) | 4,820 | (3,454) | | Net gain on disposal of property, plant and equipment | 538 | 40 | | Gain on disposal of financial assets at fair value through profit or loss | 2,941 | — | | Other losses | (8,100) | — | | **Total** | **199** | **(3,414)** | [Finance Costs](index=9&type=section&id=Finance%20Costs) Finance costs for the first half of 2025 decreased by 1.7% year-on-year to RMB 378 million, primarily due to a significant reduction in interest on discounted bills with recourse, despite an increase in interest on bank and other borrowings Finance Costs (For the six months ended June 30) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Interest on bank and other borrowings | 353,229 | 294,637 | 19.9% | | Interest on discounted bills with recourse | 24,525 | 89,503 | -72.6% | | Interest on lease liabilities | 31 | 221 | -86.0% | | **Total** | **377,785** | **384,361** | **-1.7%** | [Income Tax Expense](index=9&type=section&id=Income%20Tax%20Expense) Income tax expense for the first half of 2025 significantly increased by 255.8% to RMB 17.76 million, mainly due to higher PRC corporate income tax and withholding tax on subsidiaries, with some subsidiaries enjoying a preferential tax rate of 15% Income Tax Expense (For the six months ended June 30) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | PRC corporate income tax | 20,744 | 9,570 | 116.8% | | Over-provision in prior years | (2,830) | (2,510) | 12.7% | | Deferred tax | (153) | (2,068) | -92.6% | | **Total** | **17,761** | **4,992** | **255.8%** | - Certain subsidiaries operating in the PRC are eligible for a preferential tax rate of **15%** for a period of three years, commencing from the 2022 financial year[18](index=18&type=chunk) [Profit and Total Comprehensive Income for the Period](index=10&type=section&id=Profit%20and%20Total%20Comprehensive%20Income%20for%20the%20Period) The profit and total comprehensive income for the period is calculated after deducting key expenses such as depreciation and amortization, depreciation included in cost of sales, labor and material costs, and staff costs, with total depreciation and amortization amounting to RMB 341 million, a 7.2% year-on-year decrease Profit and Total Comprehensive Income for the Period Deductions (For the six months ended June 30) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Depreciation of property, plant and equipment | 292,646 | 326,856 | -10.5% | | Amortisation of right-of-use assets | 11,089 | 13,554 | -18.1% | | Amortisation of mining rights | 36,898 | 26,731 | 38.1% | | **Total Depreciation and Amortisation** | **340,633** | **367,141** | **-7.2%** | | Depreciation, labour and material costs recognised as cost of sales | 2,211,246 | 1,968,735 | 12.3% | | Staff costs (including retirement benefits) | 208,228 | 231,628 | -10.1% | [Earnings Per Share](index=10&type=section&id=Earnings%20Per%20Share) For the six months ended June 30, 2025, basic earnings per share attributable to owners of the Company increased by 160.0% to RMB 0.03 from RMB 0.01 in the prior year, with no diluted earnings per share presented due to the absence of potential ordinary shares outstanding Earnings Per Share Calculation Data (For the six months ended June 30) | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | Profit for the period attributable to owners of the Company (RMB thousands) | 73,903 | 28,290 | | Weighted average number of ordinary shares for basic EPS (thousands) | 2,952,782 | 2,938,282 | | **Basic earnings per share (RMB)** | **0.03** | **0.01** | - Diluted earnings per share is not presented as there are no potential ordinary shares outstanding for the Company[20](index=20&type=chunk) [Dividends](index=11&type=section&id=Dividends) During the interim period, the company neither paid, declared, nor proposed any dividends, nor recommended any dividends for this interim period - No dividends were paid, declared or proposed during the interim period[21](index=21&type=chunk) [Trade and Other Receivables](index=11&type=section&id=Trade%20and%20Other%20Receivables) As of June 30, 2025, total trade receivables amounted to RMB 63.77 million, a significant 51.5% decrease from RMB 131 million as of December 31, 2024, primarily due to a substantial reduction in receivables aged over one year Ageing Analysis of Trade Receivables (RMB thousands) | Ageing | June 30, 2025 | December 31, 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Within 90 days | 56,046 | 25,118 | 123.1% | | 91 to 180 days | 874 | 1,939 | -54.9% | | 181 to 365 days | 3,925 | 6,897 | -43.1% | | Over 1 year | 2,928 | 97,519 | -97.0% | | **Total** | **63,773** | **131,473** | **-51.5%** | [Trade and Other Payables](index=11&type=section&id=Trade%20and%20Other%20Payables) As of June 30, 2025, total trade payables amounted to RMB 1.25 billion, an 8.4% decrease from RMB 1.37 billion as of December 31, 2024, mainly attributable to a reduction in payables aged over one year Ageing Analysis of Trade Payables (RMB thousands) | Ageing | June 30, 2025 | December 31, 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Within 1 to 90 days | 774,993 | 781,632 | -0.8% | | 91 to 180 days | 114,482 | 99,716 | 14.8% | | 181 to 365 days | 111,913 | 115,238 | -2.9% | | Over 1 year | 252,754 | 372,081 | -32.1% | | **Total** | **1,254,142** | **1,368,667** | **-8.4%** | [Management Discussion and Analysis](index=12&type=section&id=Management%20Discussion%20and%20Analysis) This section provides an in-depth review of the Group's operational performance, financial results, and future outlook, including market conditions, strategic initiatives, and risk management [Business Review](index=12&type=section&id=Business%20Review) In the first half of 2025, despite continued weak cement market demand due to real estate adjustments and infrastructure slowdown, the Group achieved a 14.7% year-on-year revenue increase to RMB 2.96 billion and a significant 161.2% growth in profit attributable to owners of the Company to RMB 73.9 million through active efficiency measures - In the first half of 2025, cement market demand continued its downward trend, though the decline narrowed, primarily impacted by deep adjustments in the real estate sector and a slowdown in infrastructure investment[24](index=24&type=chunk) Key Financial Performance for H1 2025 | Indicator | Amount (RMB millions) | Year-on-year Growth (%) | | :--- | :--- | :--- | | Revenue | 2,962.7 | 14.7% | | Profit attributable to owners of the Company | 73.9 | 161.2% | [Operating Environment](index=13&type=section&id=Operating%20Environment) In the first half of 2025, China's economy maintained stable growth with a 5.3% GDP increase, while fixed asset investment (excluding rural households) grew by 2.8%, driven by infrastructure and manufacturing, but a significant decline in real estate investment and new housing starts pressured cement demand, partially offset by above-average economic growth in Henan and Liaoning provinces - In the first half of 2025, China's GDP grew by **5.3%** year-on-year, with national fixed asset investment (excluding rural households) increasing by **2.8%**, or **6.6%** when excluding real estate development investment[26](index=26&type=chunk) - Real estate development investment decreased by **11.2%**, new housing starts declined by **20.0%**, and housing completions fell by **14.8%**, negatively impacting demand for cement and related building materials[26](index=26&type=chunk)[28](index=28&type=chunk) - Henan Province's GDP grew by **5.7%** year-on-year, with fixed asset investment increasing by **5.1%**; Liaoning Province's GDP grew by **4.7%** year-on-year, both exceeding the national average and providing support for regional cement demand[27](index=27&type=chunk)[28](index=28&type=chunk) [Cement Industry](index=15&type=section&id=Cement%20Industry) In the first half of 2025, the cement industry experienced continued weak demand, with national cement output decreasing by 4.3%, and despite effective supply-demand regulation through staggered production in Q1, relaxed implementation in Q2 led to increased inventory, resulting in a "high-before-low" price trend but an overall industry turnaround to profit, estimated at RMB 15-16 billion, driven by falling coal prices and Q1 cement price recovery - In the first half of 2025, national cement output was **815 million tons**, a year-on-year decrease of **4.3%**, narrowing the decline by **5.7 percentage points** compared to the same period last year[29](index=29&type=chunk) - Staggered production effectively regulated supply and demand in Q1, but relaxed implementation in Q2 led to a gradual increase in inventory to high levels[30](index=30&type=chunk) - The average transaction price in the national cement market increased by **5.4%** year-on-year in the first half, with the Northeast region leading the country, averaging nearly **RMB 100/ton** higher than the national average and a **21%** increase from the prior year[30](index=30&type=chunk) - The cement industry's total profit for the first half is estimated to reach **RMB 15-16 billion**, achieving a turnaround from a loss of **RMB 1.1 billion** in the prior year, primarily due to falling coal prices and a rebound in cement prices in Q1[31](index=31&type=chunk) - Increased exports of cement and clinker have become an effective way to alleviate supply-demand imbalances and counter "over-competition"[31](index=31&type=chunk) [Financial Review](index=17&type=section&id=Financial%20Review) The Group demonstrated strong financial performance in the first half of 2025, with significant growth in both revenue and profit attributable to owners of the Company, driven primarily by cement and clinker sales, particularly in the Northeast region, and enhanced overall profitability through stringent control over selling and distribution, administrative, and finance costs, despite a slight decrease in gross profit margin [Revenue](index=17&type=section&id=Revenue) Total revenue for the first half of 2025 increased by 14.7% year-on-year to RMB 2.96 billion, with cement sales growing by 19.5%, clinker sales significantly increasing by 109.6%, and limestone aggregate sales decreasing by 16.6%, while the Northeast region's sales revenue grew by 40.9%, outperforming Central China Revenue Composition and Growth (For the six months ended June 30) | Product Category | 2025 Revenue (RMB millions) | 2024 Revenue (RMB millions) | Change (%) | Proportion of Total Revenue (2025) | | :--- | :--- | :--- | :--- | :--- | | Cement Sales | 2,235.6 | 1,870.2 | 19.5% | 75.5% | | Clinker Sales | 219.6 | 104.8 | 109.6% | 7.4% | | Limestone Aggregate Sales | 507.5 | 608.8 | -16.6% | 17.1% | | **Total Revenue** | **2,962.7** | **2,583.8** | **14.7%** | **100%** | Sales Revenue by Region (For the six months ended June 30) | Region | 2025 Revenue (RMB millions) | 2024 Revenue (RMB millions) | Change (%) | | :--- | :--- | :--- | :--- | | Central China | 2,325.8 | 2,131.9 | 9.1% | | Northeast China | 636.9 | 451.9 | 40.9% | [Cost of Sales](index=18&type=section&id=Cost%20of%20Sales) In the first half of 2025, the cost of sales increased by 16.0% year-on-year to RMB 2.28 billion, and despite the overall cost increase, per-ton costs for raw materials, coal, and electricity for cement and clinker decreased due to economies of scale and centralized procurement, with coal costs showing the most significant reduction - Cost of sales was approximately **RMB 2.28 billion**, an increase of **16.0%** compared to the same period last year[34](index=34&type=chunk) Key Cost Changes per Ton of Cement and Clinker (RMB) | Cost Item | H1 2025 | H1 2024 | Change (RMB) | | :--- | :--- | :--- | :--- | | Raw Material Costs | 54.5 | 54.7 | -0.2 | | Coal Costs | 59.5 | 76.6 | -17.1 | | Electricity Costs | 25.7 | 27.6 | -1.9 | - Raw material, coal, and electricity costs accounted for **33.7%**, **36.8%**, and **15.9%** of the cost of sales, respectively[34](index=34&type=chunk) [Gross Profit, Gross Margin and Segment Profit](index=18&type=section&id=Gross%20Profit,%20Gross%20Margin%20and%20Segment%20Profit) In the first half of 2025, gross profit increased by 10.4% year-on-year to RMB 679 million, but the gross margin slightly decreased to 22.9%, with Central China's segment profit significantly declining by 70.0% due to reduced unit gross profit for cement, while Northeast China's segment profit turned from loss to profit, driven by increased unit gross profit Gross Profit and Gross Margin (For the six months ended June 30) | Indicator | H1 2025 | H1 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Gross Profit (RMB millions) | 679.1 | 615.1 | 10.4% | | Gross Margin | 22.9% | 23.8% | -0.9 percentage points | Segment Profit Change (For the six months ended June 30) | Region | 2025 Profit (RMB millions) | 2024 Profit (RMB millions) | Change (%) | | :--- | :--- | :--- | :--- | | Central China | 27.6 | 92.1 | -70.0% | | Northeast China | 31.9 | (47.7) | Turned loss into profit | [Other Income](index=18&type=section&id=Other%20Income) Other income for the first half of 2025 decreased by 20.0% year-on-year to RMB 238 million, primarily due to reduced government subsidies and material sales income Other Income (For the six months ended June 30) | Indicator | H1 2025 (RMB millions) | H1 2024 (RMB millions) | Change (%) | | :--- | :--- | :--- | :--- | | Other Income | 238.2 | 297.8 | -20.0% | - The decrease was mainly due to reduced other government subsidies and material sales income[36](index=36&type=chunk) [Selling and Distribution Expenses](index=19&type=section&id=Selling%20and%20Distribution%20Expenses) Selling and distribution expenses for the first half of 2025 significantly decreased by 49.5% to RMB 58.5 million, primarily attributable to reduced transportation costs Selling and Distribution Expenses (For the six months ended June 30) | Indicator | H1 2025 (RMB millions) | H1 2024 (RMB millions) | Change (%) | | :--- | :--- | :--- | :--- | | Selling and Distribution Expenses | 58.5 | 115.9 | -49.5% | - The decrease was mainly due to reduced transportation costs[37](index=37&type=chunk) [Administrative Expenses](index=19&type=section&id=Administrative%20Expenses) Administrative expenses for the first half of 2025 decreased by 4.7% year-on-year to RMB 345 million, primarily due to reduced research and development expenses and cost savings Administrative Expenses (For the six months ended June 30) | Indicator | H1 2025 (RMB millions) | H1 2024 (RMB millions) | Change (%) | | :--- | :--- | :--- | :--- | | Administrative Expenses | 344.5 | 361.3 | -4.7% | - The decrease was mainly due to reduced research and development expenses and cost savings[38](index=38&type=chunk) [Finance Costs](index=19&type=section&id=Finance%20Costs) Finance costs for the first half of 2025 decreased by 1.7% year-on-year to RMB 378 million, primarily due to lower discount rates on discounted bills with recourse and the repayment of some borrowings Finance Costs (For the six months ended June 30) | Indicator | H1 2025 (RMB millions) | H1 2024 (RMB millions) | Change (%) | | :--- | :--- | :--- | :--- | | Finance Costs | 377.8 | 384.4 | -1.7% | - The decrease was mainly due to lower discount rates on discounted bills with recourse and the repayment of some borrowings that had matured[39](index=39&type=chunk) [Profit before tax](index=19&type=section&id=Profit%20before%20tax) Considering all factors, profit before tax for the first half of 2025 significantly increased by 191.5% to RMB 90 million Profit before tax (For the six months ended June 30) | Indicator | H1 2025 (RMB millions) | H1 2024 (RMB millions) | Change (%) | | :--- | :--- | :--- | :--- | | Profit before tax | 90.0 | 30.9 | 191.5% | [Income Tax Expense](index=19&type=section&id=Income%20Tax%20Expense) Income tax expense for the first half of 2025 significantly increased by 255.8% to RMB 17.8 million, primarily due to withholding tax on subsidiaries Income Tax Expense (For the six months ended June 30) | Indicator | H1 2025 (RMB millions) | H1 2024 (RMB millions) | Change (%) | | :--- | :--- | :--- | :--- | | Income Tax Expense | 17.8 | 5.0 | 255.8% | - The increase was mainly due to withholding tax on subsidiaries[41](index=41&type=chunk) [Profit attributable to owners of the Company and Net Profit Margin](index=19&type=section&id=Profit%20attributable%20to%20owners%20of%20the%20Company%20and%20Net%20Profit%20Margin) In the first half of 2025, profit attributable to owners of the Company significantly increased by 161.2% to RMB 73.9 million, with the net profit margin improving by 1.4 percentage points to 2.5% Profit attributable to owners of the Company and Net Profit Margin (For the six months ended June 30) | Indicator | H1 2025 | H1 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Profit attributable to owners of the Company (RMB millions) | 73.9 | 28.3 | 161.2% | | Net Profit Margin | 2.5% | 1.1% | +1.4 percentage points | [Financial and Liquidity Position](index=20&type=section&id=Financial%20and%20Liquidity%20Position) As of June 30, 2025, the Group's financial and liquidity position remained stable, with reduced total borrowings, improved current and quick ratios, and decreased debt-to-asset and net gearing ratios, indicating lower financial leverage, while cash and bank balances decreased due to operating, investing, and financing activities [Trade and Other Receivables](index=20&type=section&id=Trade%20and%20Other%20Receivables) As of June 30, 2025, trade and other receivables amounted to RMB 20.52 billion, remaining largely stable compared to December 31, 2024 Trade and Other Receivables (RMB millions) | Date | Amount | | :--- | :--- | | June 30, 2025 | 20,523.1 | | December 31, 2024 | 20,764.4 | [Inventories](index=20&type=section&id=Inventories) As of June 30, 2025, inventories increased to RMB 1.28 billion, primarily due to an increase in raw materials and finished products in stock Inventories (RMB millions) | Date | Amount | | :--- | :--- | | June 30, 2025 | 1,280.9 | | December 31, 2024 | 675.7 | | **Change** | **+89.6%** | [Amounts Due from Associates](index=20&type=section&id=Amounts%20Due%20from%20Associates) As of June 30, 2025, amounts due from associates totaled RMB 241 million, primarily comprising prepayments for clinker purchases and shareholder loans Amounts Due from Associates (RMB millions) | Date | Amount | | :--- | :--- | | June 30, 2025 | 241.4 | | December 31, 2024 | 217.3 | | **Change** | **+11.1%** | - The amounts represent prepayments for clinker purchased under the clinker supply framework agreement and shareholder loans due from Xin'an Zhonglian Wanji Cement Co, Ltd, an associate[45](index=45&type=chunk) [Cash and Cash Equivalents](index=20&type=section&id=Cash%20and%20Cash%20Equivalents) As of June 30, 2025, cash and bank balances decreased to RMB 468 million, primarily influenced by cash inflows from operating activities offset by cash outflows from investing and financing activities Cash and Bank Balances (RMB millions) | Date | Amount | | :--- | :--- | | June 30, 2025 | 467.7 | | December 31, 2024 | 915.1 | | **Change** | **-48.9%** | [Trade and Other Payables](index=20&type=section&id=Trade%20and%20Other%20Payables) As of June 30, 2025, trade and other payables amounted to RMB 5.50 billion, remaining largely stable compared to December 31, 2024 Trade and Other Payables (RMB millions) | Date | Amount | | :--- | :--- | | June 30, 2025 | 5,502.1 | | December 31, 2024 | 5,570.9 | [Borrowings](index=20&type=section&id=Borrowings) As of June 30, 2025, the Group's total borrowings and bonds decreased by approximately RMB 1.04 billion to RMB 12.76 billion, with a reduction in borrowings due within one year and an increase in borrowings due after one year, indicating an optimized debt structure Borrowings and Bonds (RMB millions) | Date | Amount | | :--- | :--- | | June 30, 2025 | 12,759.0 | | December 31, 2024 | 13,799.0 | | **Change** | **-7.5%** | Borrowing Maturity Structure Change (RMB millions) | Maturity | June 30, 2025 | December 31, 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Borrowings due within one year | 10,584.2 | 12,115.7 | -12.6% | | Borrowings due after one year | 2,174.7 | 1,683.3 | +29.2% | [Principal Sources of Liquidity](index=21&type=section&id=Principal%20Sources%20of%20Liquidity) The Group's primary sources of liquidity are cash generated from operations and bank and other borrowings, which are expected to continue funding working capital, production facility expansion, capital expenditures, and debt repayment, with the company planning to broaden financing channels to improve its capital structure - The principal sources of liquidity are cash generated from operations and bank and other borrowings[49](index=49&type=chunk) - Expected cash flows are sufficient to meet ongoing business needs, and the Group will broaden financing channels to improve its capital structure[49](index=49&type=chunk) [Debt-to-Asset Ratio, Current Ratio, Quick Ratio, Equity Ratio](index=21&type=section&id=Debt-to-Asset%20Ratio,%20Current%20Ratio,%20Quick%20Ratio,%20Equity%20Ratio) As of June 30, 2025, the debt-to-asset ratio decreased by 1.3 percentage points to 55.8%, while the current and quick ratios both improved, increasing by 6.3% and 3.6% respectively, the equity ratio remained largely stable, and the net gearing ratio decreased by 7.2 percentage points to 60.0%, indicating reduced financial leverage Key Financial Ratios Change | Ratio | June 30, 2025 | December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Debt-to-Asset Ratio | 55.8% | 57.1% | -1.3 percentage points | | Current Ratio | 1.5 | 1.4 | +6.3% | | Quick Ratio | 1.4 | 1.3 | +3.6% | | Equity Ratio | 1.3 | 1.3 | Largely stable | | Net Gearing Ratio | 60.0% | 67.2% | -7.2 percentage points | - The change in the debt-to-asset ratio was due to a decrease in borrowings[50](index=50&type=chunk) [Placing of Existing Shares and Subscription of New Shares](index=22&type=section&id=Placing%20of%20Existing%20Shares%20and%20Subscription%20of%20New%20Shares) In January 2025, the company completed a share placing and subscription, with net proceeds of approximately HK$47 million fully utilized to repay debt (HK$42.2 million) and for general working capital (HK$4.8 million) - The total proceeds from the subscription were approximately **HK$47.9 million**, with net proceeds of approximately **HK$47.0 million**[53](index=53&type=chunk) - The net proceeds were fully utilized, with **HK$42.2 million** used for debt repayment and **HK$4.8 million** for general working capital[53](index=53&type=chunk) [Capital Expenditure and Capital Commitments](index=22&type=section&id=Capital%20Expenditure%20and%20Capital%20Commitments) In the first half of 2025, capital expenditure was approximately RMB 109 million, a 31.1% year-on-year decrease, and as of June 30, 2025, capital commitments amounted to approximately RMB 309 million, primarily related to the construction of production facilities and machinery purchases for the cement and aggregate businesses, funded by cash from operations and borrowings Capital Expenditure and Capital Commitments (RMB millions) | Indicator | H1 2025 / June 30 | H1 2024 / Dec 31 | Change (%) | | :--- | :--- | :--- | :--- | | Capital Expenditure | 109.2 | 158.5 | -31.1% | | Capital Commitments | 308.6 | 345.0 | -10.6% | - Capital expenditure and capital commitments are mainly related to the construction of production facilities for cement and aggregate businesses, and the purchase of machinery, office equipment, investments in construction in progress, and mining rights[54](index=54&type=chunk) [Pledged Assets](index=22&type=section&id=Pledged%20Assets) As of June 30, 2025, the carrying value of assets pledged by the Group to secure bank borrowings was approximately RMB 3.69 billion, a decrease from December 31, 2024 Carrying Value of Pledged Assets (RMB millions) | Date | Amount | | :--- | :--- | | June 30, 2025 | 3,692.9 | | December 31, 2024 | 3,993.1 | | **Change** | **-7.5%** | [Financial Guarantees](index=23&type=section&id=Financial%20Guarantees) As of June 30, 2025, the Group's approved financial guarantee limit to related parties was approximately RMB 1.54 billion, with an actual utilized amount of approximately RMB 1.44 billion, an increase from December 31, 2024 Financial Guarantees Provided to Related Parties (RMB millions) | Indicator | June 30, 2025 | December 31, 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Approved Guarantee Limit | 1,540.0 | 1,200.0 | 28.3% | | Actual Utilized Amount | 1,439.5 | 1,099.5 | 30.9% | [Significant Investments, Acquisitions or Disposals](index=23&type=section&id=Significant%20Investments,%20Acquisitions%20or%20Disposals) During the reporting period, the Group was not involved in any significant investment, acquisition, or disposal activities - During the reporting period, the Group was not involved in any significant investments, acquisitions or disposals[57](index=57&type=chunk) [Significant Legal Proceedings](index=23&type=section&id=Significant%20Legal%20Proceedings) During the reporting period, the Group was not involved in any significant legal proceedings or arbitration, nor were there any outstanding or potential significant legal proceedings or claims - During the reporting period, the Group was not involved in any significant legal proceedings or arbitration[58](index=58&type=chunk) [Material Events After the Reporting Period](index=23&type=section&id=Material%20Events%20After%20the%20Reporting%20Period) There have been no material events affecting the Group since the end of the reporting period - There have been no material events affecting the Group since the end of the reporting period[59](index=59&type=chunk) [Market Risks](index=23&type=section&id=Market%20Risks) The Group faces exchange rate, interest rate, and liquidity risks, which management closely monitors and manages through hedging measures or optimization of borrowing portfolios when necessary [Exchange Rate Risk](index=23&type=section&id=Exchange%20Rate%20Risk) The Group's operations are primarily denominated in RMB, but certain bank balances and borrowings are denominated in HKD or USD, creating exchange rate fluctuation risk; the company currently has no foreign currency hedging policy but will closely monitor and take appropriate hedging measures as needed - The Group's operations are primarily denominated in RMB, but certain bank balances and borrowings are denominated in HKD or USD, creating exchange rate fluctuation risk[60](index=60&type=chunk) - There is currently no foreign currency hedging policy, but management will closely monitor exchange rate fluctuation risks in real-time and take appropriate hedging measures when necessary[60](index=60&type=chunk) [Interest Rate Risk](index=24&type=section&id=Interest%20Rate%20Risk) The Group is exposed to interest rate risk arising from long-term and short-term borrowings, which it manages by regularly reviewing its borrowing portfolio, maintaining variable-rate borrowings to mitigate fair value interest rate risk, and utilizing a mix of fixed and floating rate instruments - The Group is exposed to interest rate risk arising from long-term and short-term borrowings[61](index=61&type=chunk) - Interest rate risk is managed by regularly reviewing the borrowing portfolio, maintaining variable-rate borrowings to mitigate fair value interest rate risk, and utilizing a mix of fixed and floating rate instruments[61](index=61&type=chunk) [Liquidity Risk](index=24&type=section&id=Liquidity%20Risk) The Group has established a liquidity risk management system to manage liquidity risk by monitoring cash and cash equivalents levels and ensuring compliance with loan covenants - The Group has established an appropriate liquidity risk management system for short-term, medium-term, and long-term funding and liquidity management needs[62](index=62&type=chunk) - Liquidity risk is managed by monitoring and maintaining appropriate levels of cash and cash equivalents, overseeing the utilization of bank borrowings, and ensuring compliance with loan covenants[62](index=62&type=chunk) [Employees and Remuneration Policy](index=24&type=section&id=Employees%20and%20Remuneration%20Policy) As of June 30, 2025, the Group had 5,346 employees, with staff costs of approximately RMB 208 million, and continues to implement its employee salary policy, bonus, and training programs Employee and Remuneration Information | Indicator | June 30, 2025 / H1 | June 30, 2024 / H1 | | :--- | :--- | :--- | | Number of Employees | 5,346 | 5,469 | | Staff Costs (RMB millions) | 208.2 | 231.6 | - The Group continues to implement its employee salary policy, bonus, and training programs[63](index=63&type=chunk) [Outlook](index=24&type=section&id=Outlook) Looking ahead, the Group benefits from favorable national policies, including promoting a unified national market, addressing low-price disorderly competition, eliminating outdated capacity, and expanding domestic demand and infrastructure investment, while regional economic development and major project investments in Henan and Liaoning provinces also present opportunities; the cement industry is expected to improve profitability through strict implementation of staggered production and industry self-discipline, and the Group will implement national policies, strengthen refined management, promote green energy, and deepen customer service to enhance market competitiveness [Favorable Policies](index=24&type=section&id=Favorable%20Policies) Central policies emphasize advancing the construction of a unified national market, addressing low-price disorderly competition, promoting the orderly exit of outdated capacity, and introducing stable growth plans for ten key industries, while the government work report targets around 5% GDP growth, active macroeconomic policies, expanded domestic demand, and technological innovation, with the Ministry of Transport's new rural road improvement plan projecting 300,000 km of new/reconstructed rural roads, 300,000 km of restorative maintenance, and 9,000 bridge renovations by 2027, all contributing to cement demand - The Central Financial and Economic Affairs Commission emphasized deepening the construction of a unified national market, lawfully regulating low-price disorderly competition among enterprises, guiding enterprises to improve product quality, and promoting the orderly exit of outdated capacity[64](index=64&type=chunk) - The Ministry of Industry and Information Technology will introduce stable growth plans for ten key industries, including steel, non-ferrous metals, petrochemicals, and building materials, to promote structural adjustment, optimize supply, and eliminate outdated capacity[64](index=64&type=chunk) - The Ministry of Transport, Ministry of Finance, and Ministry of Natural Resources jointly issued the "New Round of Rural Road Improvement Action Plan," planning to complete **300,000 kilometers** of new/reconstructed rural roads, implement **300,000 kilometers** of restorative maintenance, and renovate **9,000** old and dangerous bridges by 2027[66](index=66&type=chunk) [Regional Opportunities](index=26&type=section&id=Regional%20Opportunities) Both Henan and Liaoning provinces have introduced policies to promote sustained economic improvement, with Henan strengthening major project-driven growth, targeting over RMB 210 billion in physical investment for "Double Hundred Projects" and over RMB 1 trillion for provincial key projects in 2025, alongside measures to reduce enterprise costs and enhance efficiency, while Liaoning will accelerate construction of 11,500 ongoing projects, expedite preliminary work for 3,100 planned new projects, and reserve a batch of major projects, all providing strong support for regional cement demand - Henan Province issued "Several Policy Measures to Promote Sustained Economic Improvement in the Second Half of 2025," strengthening major project-driven growth, with "Double Hundred Projects" and provincial key projects targeted to complete over **RMB 210 billion** and **RMB 1 trillion** in physical investment, respectively, in 2025[67](index=67&type=chunk) - Henan Province issued "Notice on Issuing Several Policy Measures to Support Enterprises in Reducing Costs and Increasing Efficiency," aiming to reduce enterprise costs in R&D, transformation and upgrading, human resources, capital, energy consumption, logistics, land use, and import/export operations[68](index=68&type=chunk) - Liaoning Province will accelerate the construction of **11,500** ongoing projects, expedite preliminary work for **3,100** planned new projects, and accelerate the construction of major projects such as Dalian New Airport, Taizi River Pumped Storage, and Changhai Bridge[68](index=68&type=chunk) [Industry Prospects](index=27&type=section&id=Industry%20Prospects) The China Cement Association's "Opinions on Further Promoting High-Quality Development of the Cement Industry to Counter 'Involution' and Ensure 'Stable Growth'" calls for member enterprises to unify actual and registered capacities, rigidly implement staggered production, promote cross-regional coordinated staggered production, and strengthen "dual control" of capacity, with expectations that active production according to registered capacity could quickly raise capacity utilization from 53% to around 70%, leading to sustained improvement in industry profitability - The China Cement Association issued "Opinions on Further Promoting High-Quality Development of the Cement Industry to Counter 'Involution' and Ensure 'Stable Growth'," requiring member enterprises to unify actual capacity with registered capacity, promote rigid implementation of staggered production, and cross-regional coordinated staggered production[69](index=69&type=chunk) - If enterprises actively organize production according to registered daily and annual capacities, the supply side is expected to see substantial reductions, capacity utilization is likely to increase from **53%** to around **70%**, and industry profitability is expected to continue to improve rapidly[69](index=69&type=chunk) [Key Initiatives of the Group](index=27&type=section&id=Key%20Initiatives%20of%20the%20Group) The Group will implement national "anti-involution" policies, enforce staggered production controls, promote energy saving, carbon reduction, and cleaner production, while also strengthening refined management across all operational segments, advancing the implementation of wind, solar, and storage projects, promoting green energy, continuously upgrading intelligence, and deepening customer service to build the Tianrui brand image - Implement national "anti-involution" policies, enforce staggered production controls in the cement industry, and promote energy saving, carbon reduction, ultra-low emissions, and cleaner production measures[70](index=70&type=chunk) - Strengthen refined management across all operational segments, advance the implementation of wind, solar, and storage projects, promote green energy and alternative raw material applications, and continuously drive intelligent upgrades[70](index=70&type=chunk) - Adhere to quality as the foundation, customer demand as the orientation, and reputation as the support, deepen customer service, and build the Tianrui brand image[70](index=70&type=chunk) [Corporate Governance and Other Information](index=28&type=section&id=Corporate%20Governance%20and%20Other%20Information) This section details the company's commitment to high standards of corporate governance, compliance with regulatory codes, and other important disclosures regarding its board, securities, and financial review processes [Corporate Governance](index=28&type=section&id=Corporate%20Governance) The Company is committed to maintaining high standards of corporate governance and complies with the HKEX Corporate Governance Code; during the reporting period, the company temporarily failed to fully comply with the code due to insufficient independent non-executive directors and non-compliant audit and remuneration committee compositions, but regained full compliance on August 27, 2025, with the appointment of Mr Jiang Senlin as an independent non-executive director - The Company is committed to maintaining a high level of corporate governance and has adopted the code provisions of the HKEX Corporate Governance Code[71](index=71&type=chunk) - The Company previously failed to comply with Listing Rules 3.10(1), 3.10A, 3.11, 3.21, 3.23, 3.25, and 3.27 due to an insufficient number of independent non-executive directors and non-compliant compositions of the Audit Committee and Remuneration Committee[72](index=72&type=chunk) - On August 27, 2025, Mr Jiang Senlin was appointed as an independent non-executive director and a member of both the Audit Committee and Remuneration Committee, bringing the Company back into full compliance with all relevant Listing Rules[73](index=73&type=chunk) - The Company has not appointed a new Chief Executive Officer since the resignation of the former CEO, but the Board has established an Executive Committee to oversee daily operations, ensuring that power is not concentrated in one individual[71](index=71&type=chunk) [Directors' Compliance with the Model Code](index=29&type=section&id=Directors'%20Compliance%20with%20the%20Model%20Code) The Company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers as its code of conduct for directors' securities dealings, and all directors have confirmed compliance with this code during the reporting period - The Company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers as its code of conduct for directors' dealings in securities[74](index=74&type=chunk) - Following specific enquiries made to the Directors, they have all confirmed compliance with the required standards set out in the Model Code during the reporting period[74](index=74&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=29&type=section&id=Purchase,%20Sale%20or%20Redemption%20of%20the%20Company's%20Listed%20Securities) During the reporting period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities - During the reporting period, neither the Company nor any of its subsidiaries purchased, sold or redeemed any of the Company's listed securities[75](index=75&type=chunk) [Interim Dividends](index=29&type=section&id=Interim%20Dividends) The Company's directors do not recommend the declaration of an interim dividend for the reporting period - The Company's directors do not recommend the declaration of an interim dividend for the reporting period (June 30, 2024: nil)[76](index=76&type=chunk) [Review of Financial Information](index=30&type=section&id=Review%20of%20Financial%20Information) The Company's Board Audit Committee has discussed and reviewed the interim results for the six months ended June 30, 2025, with management, but the condensed consolidated financial statements have not been audited or reviewed by the company's auditors - The Company's Board Audit Committee has discussed and reviewed the Group's interim results for the six months ended June 30, 2025, with the Company's management[77](index=77&type=chunk) - The financial information in the condensed consolidated financial statements for the interim results has not been audited or reviewed by the Company's auditors[77](index=77&type=chunk) [Board of Directors](index=30&type=section&id=Board%20of%20Directors) As of the announcement date, the Board of Directors comprises Executive Directors Ms Li Fengluan, Mr Ding Jifeng, Mr Li Jiangming, and Mr Jin Mingjie; Chairman and Non-executive Director Mr Li Liufa; and Independent Non-executive Directors Mr Kong Xiangzhong, Mr Mak Tin Sang, and Mr Jiang Senlin - The Board of Directors includes Executive Directors Ms Li Fengluan, Mr Ding Jifeng, Mr Li Jiangming, and Mr Jin Mingjie[78](index=78&type=chunk) - The Chairman and Non-executive Director is Mr Li Liufa[78](index=78&type=chunk) - The Independent Non-executive Directors are Mr Kong Xiangzhong, Mr Mak Tin Sang, and Mr Jiang Senlin[78](index=78&type=chunk)