[Financial Summary](index=1&type=section&id=Financial%20Summary) Presents key financial data for H1 2025 compared to H1 2024, highlighting revenue and gross profit growth Key Financial Data Comparison H1 2025 vs H1 2024 | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | YoY Growth (%) | | :--- | :--- | :--- | :--- | | Revenue | 354.5 | 266.5 | 33.0% | | New Consumer Business Revenue | 210.7 | 110.0 | 91.5% | | Gross Profit | 155.8 | 134.0 | 16.3% | [Condensed Consolidated Statement of Comprehensive Income](index=2&type=section&id=Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) Provides a detailed breakdown of the company's income and expenses for the six months ended June 30, 2025 and 2024 Condensed Consolidated Statement of Comprehensive Income (For the six months ended June 30) | Metric | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Revenue | 354,476 | 266,546 | | Cost of sales | (198,641) | (132,594) | | Gross profit | 155,835 | 133,952 | | Selling and marketing expenses | (69,816) | (47,287) | | General and administrative expenses | (46,948) | (53,639) | | Provision for impairment loss on financial assets | (6,382) | (1,848) | | Other income | 1,427 | 2,406 | | Other (losses) / gains, net | (18,754) | 485 | | Operating profit | 15,362 | 34,069 | | Finance income, net | 365 | 2,728 | | Profit before income tax | 15,727 | 36,797 | | Income tax expense | (7,656) | (11,347) | | Profit for the period | 8,071 | 25,450 | | Profit attributable to owners of the Company | 10,266 | 24,963 | | Non-controlling interests | (2,195) | 487 | | Total comprehensive income for the period | 4,400 | 29,985 | | Total comprehensive income attributable to owners of the Company | 5,976 | 29,616 | | Non-controlling interests | (1,576) | 369 | | Basic and diluted earnings per share (RMB/share) | 0.01 | 0.03 | [Condensed Consolidated Statement of Financial Position](index=4&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) Presents the company's financial position, including assets, liabilities, and equity, as of June 30, 2025, and December 31, 2024 Condensed Consolidated Statement of Financial Position (As of June 30) | Metric | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | **ASSETS** | | | | Total non-current assets | 216,321 | 216,882 | | Total current assets | 1,085,625 | 1,029,633 | | Total assets | 1,301,946 | 1,246,515 | | **EQUITY AND LIABILITIES** | | | | Equity attributable to owners of the Company | 993,951 | 953,700 | | Non-controlling interests | 4,389 | 5,965 | | Total equity | 998,340 | 959,665 | | Total non-current liabilities | 10,509 | 7,254 | | Total current liabilities | 293,097 | 279,596 | | Total liabilities | 303,606 | 286,850 | | Total equity and liabilities | 1,301,946 | 1,246,515 | | Net current assets | 792,528 | 750,037 | | Total assets less current liabilities | 1,008,849 | 966,919 | [Notes to the Condensed Consolidated Interim Financial Information](index=6&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Interim%20Financial%20Information) Provides detailed explanations and disclosures supporting the condensed consolidated interim financial statements [General Information](index=6&type=section&id=General%20Information) Details the company's incorporation, listing, and primary business activities in China - The Company was incorporated as an exempted company under Cayman Islands law on January 3, 2020, with shares listed on the Hong Kong Stock Exchange (Stock Code: 6683)[9](index=9&type=chunk) - The Group primarily engages in new consumer business and IP creation and operation business in China[9](index=9&type=chunk) [Basis of Preparation](index=6&type=section&id=Basis%20of%20Preparation) Outlines the accounting standards and presentation currency used for preparing the condensed consolidated interim financial information - The condensed consolidated interim financial information is prepared in accordance with Hong Kong Accounting Standard 34 'Interim Financial Reporting' and the applicable disclosure requirements of Appendix D2 to the Listing Rules of the Stock Exchange[11](index=11&type=chunk) - This condensed consolidated interim financial information is presented in **RMB thousand** and was approved for issue by the Board of Directors on August 29, 2025, but is unaudited[10](index=10&type=chunk)[11](index=11&type=chunk) [Accounting Policies](index=7&type=section&id=Accounting%20Policies) Describes the accounting policies adopted, including new amendments and interpretations applied and those not yet effective [New Amendments and Interpretations Adopted by the Group](index=7&type=section&id=New%20Amendments%20and%20Interpretations%20Adopted%20by%20the%20Group) Details the new accounting standards and interpretations that the Group has adopted for the current reporting period - The Group first applied Hong Kong Accounting Standard 21 (Revised) 'Lack of Exchangeability of a Currency' for the annual reporting period beginning January 1, 2025[14](index=14&type=chunk) [New Amendments and Interpretations Not Yet Adopted](index=7&type=section&id=New%20Amendments%20and%20Interpretations%20Not%20Yet%20Adopted) Lists new accounting standards and interpretations that have been issued but are not yet effective for the current reporting period New Amendments and Interpretations Not Yet Adopted | Standard Name | Effective Date | | :--- | :--- | | HKFRS 19 (Subsidiaries without Public Accountability: Disclosures) | January 1, 2027 | | HKFRS 9 and HKFRS 7 (Amendments) (Classification and Measurement of Financial Instruments) | January 1, 2026 | | Annual Improvements to HKFRS Standards – Volume 11 | January 1, 2026 | | HKFRS 18 and HK(IFRIC) 5 (Presentation and Disclosure in Financial Statements) | January 1, 2027 | [Critical Accounting Estimates and Judgments](index=8&type=section&id=Critical%20Accounting%20Estimates%20and%20Judgments) Explains the significant accounting estimates and judgments made by management, noting the impact of HKFRS 18 on presentation rather than net profit - The critical accounting estimates and judgments applied are consistent with those described in the annual consolidated financial statements for the year ended December 31, 2024[16](index=16&type=chunk) - The adoption of HKFRS 18 will not impact the Group's net profit but is expected to affect the grouping and presentation of income and expense items in the statement of profit or loss, particularly the calculation of operating profit[17](index=17&type=chunk) - New disclosure requirements will include management-defined performance measures, disaggregation of expenses by nature for items presented by function within operating categories in the statement of profit or loss, and reconciliation of restated amounts upon application of the new standard[17](index=17&type=chunk) [Revenue and Segment Information](index=9&type=section&id=Revenue%20and%20Segment%20Information) Details the Group's revenue by operating segment and geographical location, with total revenue of **RMB 354.5 million** for H1 2025 [Segment Revenue and Results](index=9&type=section&id=Segment%20Revenue%20and%20Results) Provides a breakdown of revenue and results for the new consumer and IP creation and operation segments Segment Revenue and Results (For the six months ended June 30) | Segment | 2025 Revenue (RMB thousand) | 2025 Results (RMB thousand) | 2024 Revenue (RMB thousand) | 2024 Results (RMB thousand) | | :--- | :--- | :--- | :--- | :--- | | New Consumer | 210,732 | 100,465 | 109,986 | 60,584 | | IP Creation and Operation | 143,744 | 55,370 | 156,560 | 73,368 | | **Total** | **354,476** | **155,835** | **266,546** | **133,952** | [Geographical Information](index=10&type=section&id=Geographical%20Information) Presents revenue from external customers categorized by geographical location Revenue from External Customers by Geographical Location (For the six months ended June 30) | Region | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Mainland China | 353,609 | 263,952 | | Others | 867 | 2,594 | | **Total** | **354,476** | **266,546** | [Disaggregation of Revenue](index=11&type=section&id=Disaggregation%20of%20Revenue) Categorizes revenue from customer contracts by major product or service type Revenue from Contracts with Customers by Major Product or Service (For the six months ended June 30) | Product/Service | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Sales of health management products and skincare products | 206,866 | 108,615 | | TV program production income | 70,391 | 87,184 | | Entertainment video production and licensing income | 18,727 | 2,218 | | IP projects and event planning and management income | 27,441 | 18,035 | | Celebrity IP management income | 18,795 | 39,117 | | Licensing and royalty income | 5,424 | 8,644 | | Rental income | 381 | – | | Sales of other products | 6,451 | 2,733 | | **Total** | **354,476** | **266,546** | [Income Tax Expense](index=11&type=section&id=Income%20Tax%20Expense) Details the income tax expense for H1 2025, including applicable tax rates for different jurisdictions [Cayman Islands](index=11&type=section&id=Cayman%20Islands) Explains the tax treatment for the Company in the Cayman Islands - Under current Cayman Islands law, the Company is not subject to tax on income or capital gains, and no withholding tax is imposed on dividend payments[23](index=23&type=chunk) [Hong Kong](index=12&type=section&id=Hong%20Kong) Describes the Hong Kong profits tax rates applicable to the Group's entities - Hong Kong entities are subject to Hong Kong Profits Tax at a rate of **8.25%** on the first **HKD 2 million** of assessable profits and **16.5%** on the remaining profits[24](index=24&type=chunk) [PRC Enterprise Income Tax](index=12&type=section&id=PRC%20Enterprise%20Income%20Tax) Outlines the general PRC Enterprise Income Tax rate and considerations for tax benefits - The general PRC Enterprise Income Tax rate is **25%**, and provisions have accounted for available tax refunds and exemptions[25](index=25&type=chunk) [PRC Withholding Tax](index=12&type=section&id=PRC%20Withholding%20Tax) Explains the withholding tax on dividends distributed by PRC companies to foreign investors - Dividends distributed by PRC companies to their foreign investors are subject to withholding income tax at a rate of **5%** or **10%**, with the Group's applicable rate being **10%**[26](index=26&type=chunk) [Earnings Per Share](index=12&type=section&id=Earnings%20Per%20Share) Reports the basic and diluted earnings per share for H1 2025, which decreased to **RMB 0.01** per share [Basic Earnings Per Share](index=12&type=section&id=Basic%20Earnings%20Per%20Share) Details the calculation of basic earnings per share based on profit attributable to owners and weighted average shares outstanding Basic Earnings Per Share (For the six months ended June 30) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Profit attributable to owners of the Company (RMB thousand) | 10,266 | 24,963 | | Weighted average number of ordinary shares in issue | 845,763,453 | 812,083,154 | | Basic earnings per share (RMB/share) | 0.01 | 0.03 | [Diluted Earnings Per Share](index=13&type=section&id=Diluted%20Earnings%20Per%20Share) Explains that diluted EPS is the same as basic EPS due to the absence of dilutive potential ordinary shares - As there were no potential dilutive ordinary shares outstanding during the period, diluted earnings per share for the six months ended June 30, 2025 and 2024 were the same as basic earnings per share[29](index=29&type=chunk) Diluted Earnings Per Share (For the six months ended June 30) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Profit used to determine diluted earnings per share (RMB thousand) | 10,266 | 24,963 | | Weighted average number of ordinary shares in issue | 845,763,453 | 812,083,154 | | Adjustment for share options under 2020 Share Incentive Scheme | 4,530,739 | 28,428,773 | | Diluted earnings per share (RMB/share) | 0.01 | 0.03 | [Film and Television Program Copyrights](index=13&type=section&id=Film%20and%20Television%20Program%20Copyrights) Discusses the valuation of film and television program copyrights, primarily for "J-Style Trip" Season 4 and "JVerse Concert" - As of June 30, 2025, film and television program copyrights primarily represent production costs for "J-Style Trip" Season 4 and "JVerse Concert"[31](index=31&type=chunk) - Film and television program copyrights are stated at the lower of cost and net realizable value, and the directors assessed that the net realizable value exceeded the carrying amount, thus no impairment provision was made[31](index=31&type=chunk)[32](index=32&type=chunk) [Trade and Other Receivables](index=14&type=section&id=Trade%20and%20Other%20Receivables) Reports a significant increase in trade and other receivables to **RMB 571.190 million** as of June 30, 2025 Trade and Other Receivables (As of June 30) | Metric | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Trade receivables – net | 352,796 | 303,375 | | Other receivables – net | 218,394 | 95,546 | | **Total trade and other receivables** | **571,190** | **398,921** | Ageing Analysis of Trade Receivables (As of June 30) | Ageing | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Within 30 days | 171,800 | 243,585 | | 31 to 90 days | 4,386 | 15,812 | | 91 to 120 days | 1,181 | 2,416 | | 121 to 365 days | 157,379 | 23,028 | | Over 365 days | 31,752 | 27,184 | | **Total** | **366,498** | **312,025** | - The Group acquired a **40%** equity interest in Zhejiang Ruxing on June 25, 2025, making it an associate, and provided a loan of **RMB 36,000,000** to it[35](index=35&type=chunk) [Share Capital](index=16&type=section&id=Share%20Capital) Details the increase in issued ordinary shares to **859,716,005** as of June 30, 2025, due to option exercises Changes in Share Capital (As of June 30) | Metric | June 30, 2025 (Number of ordinary shares) | December 31, 2024 (Number of ordinary shares) | | :--- | :--- | :--- | | Total number of ordinary shares in issue | 859,716,005 | 833,338,500 | | Shares issued upon exercise of share options | 26,377,505 | - | | Proceeds (RMB thousand) | 34,725 | - | - In accordance with the Cayman Companies Act and the Company's articles of association, the Company may make distributions to shareholders from share premium, provided it is solvent and the articles permit[36](index=36&type=chunk) [Dividends](index=17&type=section&id=Dividends) States the Board's decision not to declare an interim dividend for the six months ended June 30, 2025 - The Board of Directors resolved not to declare an interim dividend for the six months ended June 30, 2025 (H1 2024: nil)[37](index=37&type=chunk) [Trade and Other Payables](index=17&type=section&id=Trade%20and%20Other%20Payables) Reports a slight increase in trade and other payables to **RMB 135.874 million** as of June 30, 2025 Trade and Other Payables (As of June 30) | Metric | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Trade payables | 58,144 | 23,177 | | Bills payable | 5,385 | 3,841 | | Other payables | 72,345 | 103,729 | | **Total** | **135,874** | **130,747** | Ageing Analysis of Trade Payables (As of June 30) | Ageing | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Within 60 days | 52,704 | 19,844 | | 61 to 120 days | 405 | 1,307 | | 121 to 365 days | 3,043 | 789 | | Over 365 days | 1,992 | 1,237 | | **Total** | **58,144** | **23,177** | [Borrowings](index=18&type=section&id=Borrowings) Indicates a significant increase in outstanding bank borrowings to **RMB 25.7 million** as of June 30, 2025 Total Borrowings (As of June 30) | Metric | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Current portion of bank borrowings, secured | 25,650 | 5,000 | | **Total borrowings** | **25,650** | **5,000** | - Borrowings include a five-year mortgage loan entered into in 2021 (annual interest rate of **5.70%**) and a one-year secured loan entered into in March 2025 (annual interest rate of **3.1%**)[39](index=39&type=chunk) [Management Discussion and Analysis](index=19&type=section&id=Management%20Discussion%20and%20Analysis) Provides management's perspective on the Group's operational and financial performance during the reporting period [Business Review](index=19&type=section&id=Business%20Review) Reviews the Group's business performance in H1 2025, highlighting revenue growth and segment contributions - The Group recorded revenue of **RMB 354.5 million** during the reporting period, an increase of approximately **33.0%** compared to the same period in 2024[42](index=42&type=chunk) - Revenue from the IP creation and operation segment was **RMB 143.7 million**, primarily attributable to the broadcast of "J-Style Trip" Season 3, which achieved top viewership ratings and over **4.1 billion** topic exposures[43](index=43&type=chunk) - Revenue from the new consumer segment significantly increased from **RMB 110.0 million** in H1 2024 to **RMB 210.7 million** in H1 2025, an increase of approximately **91.5%**[45](index=45&type=chunk) - New products "Modong Sicilian Coffee" and "Juneng Polyphenol Drink" achieved sales of approximately **RMB 28.6 million** and **RMB 13.1 million**, respectively[45](index=45&type=chunk) - The Group continues to promote products through an IP-empowered model, launching "AI主播" (AI anchor) and "AI分销商" (AI distributor) functions to leverage AI technology for enhancing C-end customer experience and assisting distributor marketing[46](index=46&type=chunk) [Business Outlook](index=21&type=section&id=Business%20Outlook) Outlines the Group's future strategies, focusing on IP development, new consumer products, and market expansion - The Group plans to focus on the independent research and development of IP-related products themed around "Chou Tong Hsueh" and his family, as well as other celebrity IPs, in H2 2025[49](index=49&type=chunk) - The Group will accelerate the establishment of robot stores (vending machines) and plans to collaborate with leading industry companies to expand coverage to high-traffic locations such as subway stations, high-speed rail stations, and airports[49](index=49&type=chunk) - Plans to collaborate with Hangzhou Unitree Robotics Co., Ltd. to develop and commercialize quadruped robot dogs/robots with companionship and social attributes, creating new forms of IP products for the AI and robotics era[50](index=50&type=chunk) - Given the success of "J-Style Trip" Season 3, the Group is considering commencing preparations for a new season, "J-Style Trip" Season 4, in H2 2025[51](index=51&type=chunk) - The Group will continue to upgrade or launch more new products focusing on public health needs and strive to expand products into overseas markets, strengthening supply and distribution channels in Taiwan and other international markets[52](index=52&type=chunk) [Financial Review](index=22&type=section&id=Financial%20Review) Provides a detailed review of the Group's financial performance, including revenue, gross profit, and net profit [Revenue](index=22&type=section&id=Revenue) Discusses the **33.0%** increase in total revenue, primarily driven by the new consumer business - The Group recorded revenue of **RMB 354.5 million** during the reporting period, an increase of approximately **33.0%** compared to the same period in 2024[53](index=53&type=chunk) - The increase in revenue was primarily due to a **91.5%** rise in new consumer business revenue, from **RMB 110.0 million** in H1 2024 to **RMB 210.7 million** in H1 2025[53](index=53&type=chunk) [IP Creation and Operation Business](index=22&type=section&id=IP%20Creation%20and%20Operation%20Business) Reviews the **8.2%** decrease in IP creation and operation segment revenue, mainly due to reduced celebrity IP management services - In H1 2025, revenue from the IP creation and operation segment was **RMB 143.7 million**, a decrease of approximately **8.2%** from **RMB 156.6 million** in H1 2024[54](index=54&type=chunk) - The decrease in revenue was primarily due to a reduction in celebrity IP management business revenue, from **RMB 39.1 million** to **RMB 18.8 million**, mainly resulting from the Group's restructuring of cooperation with multi-channel network companies[54](index=54&type=chunk) [New Consumer Business](index=23&type=section&id=New%20Consumer%20Business) Highlights the **91.5%** growth in new consumer business revenue, driven by product diversification - New consumer business revenue was **RMB 210.7 million**, an increase of approximately **91.5%** compared to the same period in 2024, primarily benefiting from product diversification and distribution channels[55](index=55&type=chunk) - Newly launched Modong Sicilian Coffee and Juneng Polyphenol Drink achieved sales of approximately **RMB 28.6 million** and **RMB 13.1 million**, respectively[55](index=55&type=chunk) [Cost of Sales](index=23&type=section&id=Cost%20of%20Sales) Explains the **49.8%** increase in cost of sales, mainly due to higher cost of goods sold and event planning services - Cost of sales for H1 2025 was **RMB 198.6 million**, an increase of approximately **49.8%** compared to H1 2024[57](index=57&type=chunk) - The increase in cost of sales was primarily due to higher cost of goods sold (from **RMB 45.4 million** to **RMB 105.3 million**) and increased costs for event planning and management services[57](index=57&type=chunk) [Gross Profit and Gross Profit Margin](index=24&type=section&id=Gross%20Profit%20and%20Gross%20Profit%20Margin) Reports a **16.3%** increase in gross profit but a decrease in gross profit margin to **44.0%** due to product mix changes - Gross profit for H1 2025 was **RMB 155.8 million**, an increase of approximately **16.3%** compared to the same period in 2024[58](index=58&type=chunk) - Gross profit margin decreased from **50.3%** in H1 2024 to **44.0%** in H1 2025, primarily due to a reduction in new consumer business gross profit margin from changes in product mix and decreased celebrity IP management service revenue[58](index=58&type=chunk) [Selling and Marketing Expenses](index=24&type=section&id=Selling%20and%20Marketing%20Expenses) Notes a **47.6%** increase in selling and marketing expenses, driven by higher commissions and employee benefits - Selling and marketing expenses for H1 2025 were **RMB 69.8 million**, an increase of approximately **47.6%** compared to H1 2024[59](index=59&type=chunk) - The increase was primarily due to commissions rising from **RMB 11.3 million** to **RMB 30.8 million**, and increased employee benefit expenses[59](index=59&type=chunk) [General and Administrative Expenses](index=24&type=section&id=General%20and%20Administrative%20Expenses) Reports a **12.5%** decrease in general and administrative expenses, mainly due to reduced employee benefits and legal fees - General and administrative expenses for H1 2025 were **RMB 46.9 million**, a decrease of approximately **12.5%** compared to the same period in 2024[60](index=60&type=chunk) - The decrease was primarily due to a **RMB 4.9 million** reduction in employee benefit expenses and a **RMB 4.8 million** reduction in legal and professional fees[60](index=60&type=chunk) [Other Gains and Losses](index=24&type=section&id=Other%20Gains%20and%20Losses) Explains the **RMB 18.8 million** other loss, primarily due to fair value losses on Hong Kong-listed equity securities - Other losses of **RMB 18.8 million** were recorded in H1 2025 (H1 2024: other gains of **RMB 0.5 million**), primarily due to fair value losses of approximately **RMB 19.5 million** on investments in Hong Kong-listed equity securities[61](index=61&type=chunk) [Profit for the Period](index=24&type=section&id=Profit%20for%20the%20Period) Reports a profit for the period of **RMB 8.1 million**, with a net profit margin of **2.3%** - Profit for the period in H1 2025 was **RMB 8.1 million** (H1 2024: **RMB 25.5 million**), with a net profit margin of approximately **2.3%** (H1 2024: **9.6%**)[62](index=62&type=chunk) [Adjusted Net Profit (Non-HKFRS Financial Measure)](index=25&type=section&id=Adjusted%20Net%20Profit%20(Non-HKFRS%20Financial%20Measure)) Presents the adjusted net profit, a non-HKFRS measure, which increased by **7.0%** to **RMB 27.6 million** Adjusted Net Profit (For the six months ended June 30) | Metric | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Profit for the period | 8,071 | 25,450 | | Add: Share-based payment expenses | – | 312 | | Add: Fair value loss on investments in Hong Kong-listed equity securities | 19,548 | – | | **Adjusted net profit for the period** | **27,619** | **25,762** | | Adjusted net profit margin | 7.8% | 9.7% | - Adjusted net profit for H1 2025 was **RMB 27.6 million**, an increase of **7.0%** compared to H1 2024[63](index=63&type=chunk) [Capital Structure, Liquidity and Financial Resources](index=26&type=section&id=Capital%20Structure,%20Liquidity%20and%20Financial%20Resources) Discusses the Group's capital structure, liquidity position, and financial resources, including cash and cash equivalents - As of June 30, 2025, the total number of ordinary shares issued by the Company was **859,716,005**[65](index=65&type=chunk) - Cash and cash equivalents were **RMB 68.0 million**, a decrease from **RMB 296.5 million** as of December 31, 2024, primarily due to increased cash used in operations, investments in concerts, and subscription to an industrial fund[65](index=65&type=chunk) Liquidity and Gearing Ratios (As of June 30) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Current ratio | 3.7 times | 3.7 times | | Gearing ratio | 0.05 times | 0.01 times | [Contingent Liabilities](index=26&type=section&id=Contingent%20Liabilities) States that the Group had no significant contingent liabilities as of June 30, 2025 - As of June 30, 2025, the Group had no significant contingent liabilities[67](index=67&type=chunk) [Material Investments Held](index=26&type=section&id=Material%20Investments%20Held) Details the Group's **USD 8 million** investment in Starlight New Economy Industry Fund II L.P - The Group agreed to subscribe for an interest in Starlight New Economy Industry Fund II L.P. with a capital commitment of **USD 8 million**[68](index=68&type=chunk) - As of June 30, 2025, the Group's interest in the industrial fund was accounted for as a financial asset at fair value through profit or loss of **RMB 57.2 million**[68](index=68&type=chunk) - As of June 30, 2025, the Group held no other material investments representing **5%** or more of its total assets[68](index=68&type=chunk) [Material Acquisitions and Disposals of Assets, Subsidiaries, Associates and Joint Ventures](index=27&type=section&id=Material%20Acquisitions%20and%20Disposals%20of%20Assets,%20Subsidiaries,%20Associates%20and%20Joint%20Ventures) Confirms no material acquisitions or disposals during the reporting period, other than those disclosed - During the reporting period, the Group had no material acquisitions or disposals of assets, subsidiaries, associates, or joint ventures[69](index=69&type=chunk) [Charges on the Group's Assets](index=27&type=section&id=Charges%20on%20the%20Group's%20Assets) States that the Group's interest-bearing bank borrowings are secured by certain properties and restricted bank deposits - As of June 30, 2025, the Group's interest-bearing bank borrowings of **RMB 25.7 million** were secured by certain properties and restricted bank deposits of the Group[70](index=70&type=chunk) [Foreign Exchange Risk](index=27&type=section&id=Foreign%20Exchange%20Risk) Assesses the Group's foreign exchange risk, noting minimal exposure due to RMB-denominated transactions - The Group primarily operates in China, with most transactions settled in **RMB**, and management believes the business does not face any significant foreign exchange risk[71](index=71&type=chunk) - A foreign exchange loss of **RMB 2.1 million** was recorded during the reporting period, primarily due to the depreciation of the **RMB** against the **HKD** on bank balances held by overseas subsidiaries (denominated in **RMB**)[71](index=71&type=chunk) [Events After the Reporting Period](index=27&type=section&id=Events%20After%20the%20Reporting%20Period) Discloses a post-reporting period share placement and subscription that raised approximately **HKD 324.1 million** - On July 25, 2025, the Company entered into a placing and subscription agreement with the placing agent, completing the placing and subscription of **37,524,500** shares[72](index=72&type=chunk) - The net proceeds raised from the placing and subscription amounted to approximately **HKD 324.1 million**[72](index=72&type=chunk) [Employees and Remuneration Policy](index=28&type=section&id=Employees%20and%20Remuneration%20Policy) Details the Group's employee count, welfare expenses, and remuneration policy - As of June 30, 2025, the Group had **402** employees, most of whom are based in China[74](index=74&type=chunk) - The Group's employee benefit expenses for H1 2025 were **RMB 48.7 million** (H1 2024: **RMB 50.2 million**)[75](index=75&type=chunk) - The remuneration policy rewards employees and directors based on individual performance, capabilities, involvement, market comparable data, and Group performance, adopting share option schemes and providing internal training courses[75](index=75&type=chunk) [Use of Proceeds](index=28&type=section&id=Use%20of%20Proceeds) Explains how the proceeds from global offerings and placements are allocated and utilized for various business initiatives [Use of Net Proceeds from Global Offering](index=28&type=section&id=Use%20of%20Net%20Proceeds%20from%20Global%20Offering) Details the allocation and utilization of approximately **HKD 252.8 million** net proceeds from the global offering - The net proceeds from the global offering, approximately **HKD 252.8 million**, are intended for diversifying product portfolios, increasing brand exposure and product sales, creating unique celebrity IPs and related IP content, upgrading IT infrastructure, and working capital[76](index=76&type=chunk)[77](index=77&type=chunk) Use of Net Proceeds from Global Offering (As of June 30, 2025) | Purpose | Net Proceeds (HKD million) | Unutilized as of January 1, 2025 (HKD million) | Utilized in H1 2025 (HKD million) | Unutilized as of June 30, 2025 (HKD million) | | :--- | :--- | :--- | :--- | :--- | | Diversifying product portfolio | 60.2 | 22.4 | 5.3 | 17.1 | | Increasing brand exposure and product sales on multi-channel networks | 77.4 | 44.3 | 44.3 | – | | Creating unique celebrity IPs and related IP content | 70.2 | – | – | – | | Upgrading IT infrastructure and increasing investment in IT development | 31.1 | 5.7 | 3.3 | 2.4 | | Working capital | 13.9 | – | – | – | | **Total** | **252.8** | **72.4** | **52.9** | **19.5** | - As of June 30, 2025, the remaining unutilized net proceeds are expected to be fully utilized on or before December 31, 2025[78](index=78&type=chunk) [Use of Net Proceeds from 2024 Placing](index=30&type=section&id=Use%20of%20Net%20Proceeds%20from%202024%20Placing) Details the allocation and utilization of approximately **HKD 222.1 million** net proceeds from the 2024 placing - The 2024 placing raised net proceeds of approximately **HKD 222.1 million**[79](index=79&type=chunk) Use of Net Proceeds from 2024 Placing (As of June 30, 2025) | Purpose | Net Proceeds (HKD million) | Unutilized as of January 1, 2025 (HKD million) | Utilized in H1 2025 (HKD million) | Unutilized as of June 30, 2025 (HKD million) | | :--- | :--- | :--- | :--- | :--- | | Investing in and/or organizing physical concerts for artists collaborating with the Group | 79.8 | 50.3 | 50.3 | – | | Increasing the Company's efforts to enter the "metaverse" ecosystem | 60.5 | – | – | – | | Potential investments related to the Company's principal business activities | 60.0 | 60.0 | – | 60.0 | | General working capital and general corporate purposes | 21.8 | 19.3 | 19.3 | – | | **Total** | **222.1** | **129.6** | **69.6** | **60.0** | - The net proceeds from the 2024 placing are expected to be fully utilized by December 31, 2026[80](index=80&type=chunk) [Dividends](index=31&type=section&id=Dividends) Reaffirms the Board's decision not to declare an interim dividend for H1 2025 - The Board has resolved not to declare an interim dividend for H1 2025 (H1 2024: nil)[81](index=81&type=chunk) [Corporate Governance](index=31&type=section&id=Corporate%20Governance) Outlines the company's adherence to corporate governance principles and practices [Standard Code for Securities Transactions](index=31&type=section&id=Standard%20Code%20for%20Securities%20Transactions) Confirms the Company's adoption and directors' compliance with the Standard Code for Securities Transactions - The Company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix C3 to the Listing Rules[83](index=83&type=chunk) - All Directors have confirmed full compliance with the Model Code during the reporting period[83](index=83&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=31&type=section&id=Purchase,%20Sale%20or%20Redemption%20of%20the%20Company's%20Listed%20Securities) States that no listed securities of the Company were purchased, sold, or redeemed during the reporting period - During the reporting period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[84](index=84&type=chunk) [Audit Committee](index=31&type=section&id=Audit%20Committee) Describes the Audit Committee's composition and its review of the Group's unaudited consolidated results - The Audit Committee comprises three independent non-executive Directors: Dr. Xue Jun, Mr. Yang, Dave De, and Ms. Zhong Jingyi[85](index=85&type=chunk) - The Audit Committee has reviewed the Group's unaudited consolidated results for the reporting period and discussed accounting principles, financial reporting procedures, and internal controls with management, raising no objections[85](index=85&type=chunk) [Publication of Results Announcement and Interim Report](index=32&type=section&id=Publication%20of%20Results%20Announcement%20and%20Interim%20Report) Provides information on where the results announcement and interim report will be published - This results announcement will be published on the Stock Exchange's website www.hkexnews.hk and the Company's website http://www.splegend.com[86](index=86&type=chunk) - The Company's interim report for the six months ended June 30, 2025, will be dispatched to shareholders in due course and published on the Stock Exchange's and the Company's websites[86](index=86&type=chunk) [By Order of the Board](index=32&type=section&id=By%20Order%20of%20the%20Board) Lists the composition of the Board of Directors - The Board of Directors comprises three executive Directors (Ms. Ma Xinting, Dr. Qian Zhongshan, and Mr. Lai Guohui), two non-executive Directors (Mr. Yang Junrong and Mr. Chen Zhong), and three independent non-executive Directors (Dr. Xue Jun, Mr. Yang, Dave De, and Ms. Zhong Jingyi)[87](index=87&type=chunk)

[Announcement Information and Disclaimer](index=1&type=section&id=0.0%20Announcement%20Information%20and%20Disclaimer) [Announcement Summary](index=1&type=section&id=0.1%20Announcement%20Summary) This announcement by M&L Holdings Group Limited (Stock Code: 8152) presents the unaudited consolidated results for the six months ended June 30, 2025, in compliance with GEM Listing Rules - Company Name: **M&L HOLDINGS GROUP LIMITED**, Stock Code: **8152**[2](index=2&type=chunk) - Reporting Period: Six months ended **June 30, 2025**[2](index=2&type=chunk) - Announcement Date: **August 29, 2025**[3](index=3&type=chunk) [Board of Directors](index=1&type=section&id=0.2%20Board%20of%20Directors) The company's Board of Directors comprises executive and independent non-executive directors, with Mr. Ng Lai Ming serving as Executive Director, Chairman, and Chief Executive Officer - Executive Directors: Mr. Ng Lai Ming (Chairman and Chief Executive Officer), Mr. Ng Lai Tong, Mr. Ng Lai Po, and Mr. Ng Yung Wong[3](index=3&type=chunk) - Independent Non-Executive Directors: Mr. Tai Wai Kwok, Ir. Lo Kok Keung, Mr. Lau Chi Leung, and Ms. Luk Pui Yin[3](index=3&type=chunk) [GEM Market Features and Disclaimer](index=2&type=section&id=0.3%20GEM%20Market%20Features%20and%20Disclaimer) The GEM market provides a listing platform for small and medium-sized companies with higher investment risks, requiring investors to understand potential risks; HKEX and the Stock Exchange disclaim responsibility for this report's content - The GEM market provides a listing platform for small and medium-sized companies with **higher investment risks** compared to other companies listed on the Stock Exchange[4](index=4&type=chunk) - Investors should understand the **potential risks** of investing in such companies and make investment decisions only after careful consideration[4](index=4&type=chunk) - Hong Kong Exchanges and Clearing Limited and the Stock Exchange take **no responsibility** for the contents of this report, nor do they make any representation as to its accuracy or completeness[4](index=4&type=chunk) [Condensed Consolidated Interim Financial Statements](index=3&type=section&id=1.0%20Condensed%20Consolidated%20Interim%20Financial%20Statements) [Condensed Consolidated Statement of Comprehensive Income](index=3&type=section&id=1.1%20Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) For the six months ended June 30, 2025, the Group's revenue decreased by 35.0% year-on-year, but a larger reduction in cost of sales and foreign exchange gains significantly narrowed the loss for the period by 60.0%, improving the gross profit margin Condensed Consolidated Statement of Comprehensive Income (HKD thousands) | Metric | 2025 (HKD thousands) | 2024 (HKD thousands) | Change (HKD thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Revenue | 19,457 | 29,950 | (10,493) | -35.0% | | Cost of sales | (11,203) | (19,163) | 7,960 | -41.5% | | Gross profit | 8,254 | 10,787 | (2,533) | -23.5% | | Operating loss | (2,594) | (7,492) | 4,898 | -65.4% | | Loss for the period | (3,168) | (7,914) | 4,746 | -60.0% | | Basic and diluted loss per share (HK cents) | (0.51) | (1.27) | 0.76 | -59.8% | | Exchange gain/(loss) | 3,408 | (1,905) | 5,313 | N/A | - Total comprehensive income for the period improved from **(HKD 8,042 thousand)** in 2024 to **(HKD 2,725 thousand)** in 2025[6](index=6&type=chunk) [Condensed Consolidated Statement of Financial Position](index=5&type=section&id=1.2%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the Group's non-current assets significantly increased by 95.9% due to additions to property, plant, and equipment, while current assets decreased from the disposal of assets held for sale, leading to a slight decline in net current assets and total equity Condensed Consolidated Statement of Financial Position (HKD thousands) | Metric | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | Change (HKD thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Non-current assets | 40,102 | 20,471 | 19,631 | 95.9% | | Current assets | 121,379 | 147,947 | (26,568) | -17.9% | | Current liabilities | 61,560 | 60,222 | 1,338 | 2.2% | | Net assets | 97,420 | 100,145 | (2,725) | -2.7% | | Property, plant and equipment | 20,265 | 5,509 | 14,756 | 267.8% | | Assets classified as held for sale | — | 27,546 | (27,546) | -100.0% | - Non-current assets significantly increased, primarily due to additions to property, plant and equipment, including land and buildings in Australia for an operational workshop[9](index=9&type=chunk)[29](index=29&type=chunk) - Net current assets decreased from **HKD 87,725 thousand** as of December 31, 2024, to **HKD 59,819 thousand** as of June 30, 2025[9](index=9&type=chunk) [Condensed Consolidated Statement of Changes in Equity](index=7&type=section&id=1.3%20Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) As of June 30, 2025, equity attributable to owners of the company slightly decreased, primarily due to the loss for the period, partially offset by the transfer of revaluation reserve to retained earnings from a disposal transaction - Equity attributable to owners of the company decreased from **HKD 98,961 thousand** as of January 1, 2025, to **HKD 96,328 thousand** as of June 30, 2025[11](index=11&type=chunk) - Loss for the period was **(HKD 3,079 thousand)**[11](index=11&type=chunk) - Due to a disposal transaction, **HKD 14,806 thousand** from the revaluation reserve was transferred to retained earnings, with no impact on profit or loss for the period[11](index=11&type=chunk)[34](index=34&type=chunk) [Condensed Consolidated Statement of Cash Flows](index=8&type=section&id=1.4%20Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) For the six months ended June 30, 2025, the Group's net increase in cash and cash equivalents was primarily driven by significant cash inflows from investing activities (from disposal of property, plant, and equipment), despite a substantial decrease in net cash from operating activities Condensed Consolidated Statement of Cash Flows (HKD thousands) | Metric | 2025 (HKD thousands) | 2024 (HKD thousands) | Change (HKD thousands) | | :--- | :--- | :--- | :--- | | Net cash from operating activities | 293 | 10,515 | (10,222) | | Net cash from/(used in) investing activities | 15,050 | (529) | 15,579 | | Net cash used in financing activities | (8,226) | (9,144) | 918 | | Net increase in cash and cash equivalents | 7,117 | 842 | 6,275 | | Cash and cash equivalents at end of period | 31,104 | 28,993 | 2,111 | - Net cash inflow from investing activities primarily resulted from proceeds of **HKD 29,742 thousand** from the disposal of property, plant and equipment[12](index=12&type=chunk) - Net cash from operating activities significantly decreased from **HKD 10,515 thousand** in 2024 to **HKD 293 thousand** in 2025[12](index=12&type=chunk) [Notes to the Condensed Consolidated Interim Financial Statements](index=9&type=section&id=2.0%20Notes%20to%20the%20Condensed%20Consolidated%20Interim%20Financial%20Statements) [General Information and Basis of Presentation](index=9&type=section&id=2.1%20General%20Information%20and%20Basis%20of%20Presentation) The company, incorporated in the Cayman Islands and listed on GEM, primarily trades and leases construction machinery and spare parts; these unaudited condensed consolidated interim financial statements have been reviewed by the audit committee - The Group is principally engaged in the **trading and leasing of construction machinery and spare parts**[13](index=13&type=chunk) - The Group's ultimate holding company is **JAT United Company Limited**, wholly owned by Executive Director Mr. Ng Lai Ming[13](index=13&type=chunk) - These condensed consolidated interim financial information are **unaudited** but have been reviewed by the Company's Audit Committee[13](index=13&type=chunk) [Basis of Preparation and Significant Accounting Policy Changes](index=9&type=section&id=2.2%20Basis%20of%20Preparation%20and%20Significant%20Accounting%20Policy%20Changes) These interim financial statements are prepared in accordance with HKAS 34 and GEM Listing Rules, with consistent accounting policies; newly adopted standards, such as HKAS 21 amendment 'Lack of Exchangeability,' have no significant impact on the Group - These condensed consolidated interim financial information are prepared in accordance with **Hong Kong Accounting Standard 34 'Interim Financial Reporting'** issued by the HKICPA and the applicable disclosure requirements of the GEM Listing Rules[14](index=14&type=chunk) - New standards, interpretations, and amendments adopted by the Group (including **HKAS 21 (Revised) 'Lack of Exchangeability'**) have no significant impact on the Group's condensed consolidated interim financial statements[15](index=15&type=chunk)[17](index=17&type=chunk) [Revenue and Segment Information](index=10&type=section&id=2.3%20Revenue%20and%20Segment%20Information) Total revenue for the period decreased by 35.0% year-on-year, primarily due to reduced goods sales, though repair and maintenance services and machinery rental income grew significantly; the Tunneling segment remains the main revenue source despite a decline, while Foundation segment revenue increased; geographically, Hong Kong and Australia saw increased revenue, but the US, Vietnam, and other APAC regions experienced substantial decreases Revenue by Source (HKD thousands) | Revenue Source | 2025 (HKD thousands) | 2024 (HKD thousands) | Change (HKD thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Sales of goods | 16,033 | 29,305 | (13,272) | -45.3% | | Repair and maintenance service income | 2,469 | 401 | 2,068 | 515.7% | | Machinery rental income | 955 | 244 | 711 | 291.4% | | **Total revenue** | **19,457** | **29,950** | **(10,493)** | **-35.0%** | Revenue and Gross Profit by Segment (HKD thousands) | Segment | 2025 Revenue (HKD thousands) | 2024 Revenue (HKD thousands) | 2025 Gross Profit Percentage | 2024 Gross Profit Percentage | | :--- | :--- | :--- | :--- | :--- | | Tunneling | 18,557 | 29,556 | 41.38% | 35.89% | | Foundation | 900 | 394 | 63.89% | 45.43% | | **Total** | **19,457** | **29,950** | **42.42%** | **36.02%** | Revenue by Geographical Location (HKD thousands) | Location | 2025 (HKD thousands) | 2024 (HKD thousands) | Change (HKD thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | China | 2,294 | 2,656 | (362) | -13.6% | | Hong Kong | 4,766 | 2,691 | 2,075 | 77.1% | | United States | — | 7,743 | (7,743) | -100.0% | | Vietnam | 767 | 7,849 | (7,082) | -90.2% | | Australia | 4,967 | 3,029 | 1,938 | 64.0% | | Other Asia Pacific countries | — | 428 | (428) | -100.0% | | Others | 6,663 | 5,554 | 1,109 | 20.0% | | **Total** | **19,457** | **29,950** | **(10,493)** | **-35.0%** | [Other Income and Gains — Others](index=14&type=section&id=2.4%20Other%20Income%20and%20Gains%20%E2%80%94%20Others) Other income and gains for the period primarily comprised fair value changes of other investments and net gains from disposal transactions, resulting in a significant overall increase Other Income and Gains (HKD thousands) | Item | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | Fair value of other investments | 72 | 69 | | Net gain on disposal transaction | 495 | — | | **Total** | **567** | **69** | - The net gain on disposal transaction of **HKD 495 thousand** was a major component of other income for the period[22](index=22&type=chunk) [Expenses by Nature](index=14&type=section&id=2.5%20Expenses%20by%20Nature) Total expenses by nature decreased this period, primarily due to significant reductions in cost of inventories sold and employee benefit expenses, alongside lower depreciation charges Expenses by Nature (HKD thousands) | Item | 2025 (HKD thousands) | 2024 (HKD thousands) | Change (HKD thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Cost of inventories sold | 10,597 | 18,756 | (8,159) | -43.5% | | Employee benefit expenses | 7,379 | 8,240 | (861) | -10.4% | | Depreciation (owned property and right-of-use assets) | 1,469 | 2,278 | (809) | -35.5% | [Income Tax Credit](index=15&type=section&id=2.6%20Income%20Tax%20Credit) Income tax credit significantly decreased this period, primarily due to a reduction in deferred tax, with the Group subject to varying profit tax rates across different jurisdictions Income Tax Credit (HKD thousands) | Item | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | Current tax for the period | (42) | (109) | | Deferred tax | 120 | 742 | | **Income tax credit** | **78** | **633** | - Hong Kong profits tax rate is **16.5%**, with qualifying entities taxed at **8.25%** on the first **HKD 2,000,000** of assessable profits[24](index=24&type=chunk) - Corporate income tax rates are **25%** in China, **17%** in Singapore, and **25% to 30%** in Australia[25](index=25&type=chunk) [Loss Per Share](index=16&type=section&id=2.7%20Loss%20Per%20Share) Basic and diluted loss per share significantly narrowed this period, reflecting a reduction in the company's loss; diluted loss per share is identical to basic loss per share due to the absence of potential dilutive ordinary shares Loss Per Share | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Loss attributable to owners of the Company (HKD thousands) | (3,079) | (7,638) | | Weighted average number of ordinary shares in issue (thousands of shares) | 600,000 | 600,000 | | **Basic loss per share (HK cents)** | **(0.51)** | **(1.27)** | - As there were no potential dilutive ordinary shares in issue during the period, the diluted loss per share presented is the same as the basic loss per share[28](index=28&type=chunk) [Property, Plant and Equipment and Right-of-Use Assets](index=16&type=section&id=2.8%20Property%2C%20Plant%20and%20Equipment%20and%20Right-of-Use%20Assets) The net book value of property, plant, and equipment significantly increased this period, primarily due to land and building additions in Australia; right-of-use assets slightly decreased, with all depreciation expenses recognized as administrative expenses Property, Plant and Equipment and Right-of-Use Assets (HKD thousands) | Metric | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | Change (HKD thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Net book value of property, plant and equipment at end of period | 20,265 | 5,509 | 14,756 | 267.8% | | Net book value of right-of-use assets at end of period | 7,366 | 7,644 | (278) | -3.6% | - Additions during the period primarily included land and buildings in Australia for an operational workshop, amounting to **HKD 14,692 thousand**[29](index=29&type=chunk) - All depreciation expenses have been charged to administrative expenses[30](index=30&type=chunk)[31](index=31&type=chunk) [Trade and Other Receivables](index=17&type=section&id=2.9%20Trade%20and%20Other%20Receivables) Total trade and other receivables decreased this period, mainly due to a reduction in net trade receivables; aging analysis indicates a high proportion of trade receivables outstanding for over three years Trade and Other Receivables (HKD thousands) | Item | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | Change (HKD thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Trade receivables, net | 46,373 | 60,743 | (14,370) | -23.7% | | **Total** | **59,250** | **65,558** | **(6,308)** | **-9.6%** | - The credit period granted by the Group is normally up to **270 days**[33](index=33&type=chunk) - As of June 30, 2025, trade receivables over **3 years** amounted to **HKD 25,948 thousand**, representing **48.8%** of total trade receivables[33](index=33&type=chunk) [Assets Classified as Held for Sale](index=18&type=section&id=2.10%20Assets%20Classified%20as%20Held%20for%20Sale) All assets classified as held for sale were disposed of this period, involving the sale of an industrial property in Australia, generating a net gain and transferring revaluation surplus to retained earnings - Assets classified as held for sale amounted to **HKD 27,546 thousand** as of December 31, 2024, and were fully disposed of as of June 30, 2025[9](index=9&type=chunk)[34](index=34&type=chunk) - The disposal transaction was completed on **January 30, 2025**, for a cash consideration of **AUD 6 million** (equivalent to approximately **HKD 29.7 million**)[34](index=34&type=chunk) - The Group recognized a net gain on disposal transaction of approximately **HKD 495 thousand**[34](index=34&type=chunk) [Trade and Other Payables](index=19&type=section&id=2.11%20Trade%20and%20Other%20Payables) Total trade and other payables decreased this period, primarily due to a reduction in trade payables; aging analysis indicates that most trade payables are overdue by more than 120 days Trade and Other Payables (HKD thousands) | Item | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | Change (HKD thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Trade payables | 22,750 | 28,507 | (5,757) | -20.2% | | **Total** | **26,154** | **31,688** | **(5,534)** | **-17.5%** | - Approximately **HKD 9,273 thousand** of trade payables as of June 30, 2025, bore interest at an annual rate of **4%**[35](index=35&type=chunk) - As of June 30, 2025, trade payables over **120 days** amounted to **HKD 17,298 thousand**, representing **76.0%** of total trade payables[37](index=37&type=chunk) [Dividends Payable](index=19&type=section&id=2.12%20Dividends%20Payable) Dividends payable remained unchanged, representing amounts due to non-controlling shareholders of the dissolved subsidiary Genghiskhan Land Holdings Limited, unsecured, interest-free, and repayable on demand - Dividends payable amounted to **HKD 5,530 thousand**, consistent with December 31, 2024[9](index=9&type=chunk) - This amount is payable to the non-controlling shareholders of **Genghiskhan Land Holdings Limited**, a dissolved subsidiary[38](index=38&type=chunk) - The amount is **unsecured, interest-free, repayable on demand**, and denominated in HKD[39](index=39&type=chunk) [Amount Due to a Director](index=20&type=section&id=2.13%20Amount%20Due%20to%20a%20Director) Advances due to Mr. Ng Lai Ming, a director, increased; these advances are unsecured, bear interest at 2.5% per annum, are repayable semi-annually, and require three months' notice for repayment Amount Due to a Director (HKD thousands) | Item | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | | :--- | :--- | :--- | | Advances due to Mr. Ng Lai Ming | 3,400 | 2,000 | - Advances from Mr. Ng Lai Ming are **unsecured**, bear interest at **2.5% per annum** on a simple basis, are repayable semi-annually, and require **3 months' notice** for repayment[40](index=40&type=chunk) [Bank Borrowings](index=20&type=section&id=2.14%20Bank%20Borrowings) Total bank borrowings significantly decreased this period, but the weighted average effective interest rate increased; bank facilities are secured by Mr. Ng Lai Ming's life insurance policy, corporate guarantees from the company and its subsidiaries, and personal guarantees from executive directors Bank Borrowings (HKD thousands) | Item | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | Change (HKD thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Current bank borrowings | 11,739 | 19,692 | (7,953) | -40.4% | | Non-current bank borrowings | 906 | 1,788 | (882) | -49.3% | | **Total bank borrowings** | **12,645** | **21,480** | **(8,835)** | **-41.1%** | Weighted Average Effective Interest Rate | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Weighted average effective interest rate on bank borrowings | 6.8% | 4.4% | - Bank facilities are secured by Mr. Ng Lai Ming's life insurance policy with a sum assured of **USD 1,582,862**, corporate guarantees provided by the Company and its subsidiaries, and personal guarantees provided by executive directors[43](index=43&type=chunk) [Share Capital](index=21&type=section&id=2.15%20Share%20Capital) The company's share capital structure remained unchanged, with 600,000,000 issued and fully paid ordinary shares, totaling HKD 6,000 thousand in share capital Share Capital (HKD thousands) | Number of ordinary shares | Share Capital (HKD thousands) | | :--- | :--- | | Authorised share capital (HKD 0.1 par value per share) | 1,000,000,000 | 10,000 | | Issued and fully paid share capital (HKD 0.1 par value per share) | 600,000,000 | 6,000 | - The Company's share capital remained unchanged as of **June 30, 2025**, and **December 31, 2024**[44](index=44&type=chunk) [Share Premium and Other Reserves](index=21&type=section&id=2.16%20Share%20Premium%20and%20Other%20Reserves) Total reserves slightly decreased this period, primarily due to the loss for the period, partially offset by the transfer of revaluation reserve to retained earnings from a disposal transaction and positive exchange differences; Chinese law mandates companies to appropriate statutory reserves Share Premium and Other Reserves (HKD thousands) | Item | June 30, 2025 (HKD thousands) | January 1, 2024 (HKD thousands) | | :--- | :--- | :--- | | Share premium | 63,332 | 63,332 | | Capital reserve | 15,642 | 15,642 | | Revaluation reserve | 1,737 | 7,685 | | Exchange reserve | (132) | (131) | | Statutory reserve | 1,522 | 1,522 | | Retained earnings | 8,227 | 9,271 | | **Total** | **90,328** | **97,321** | - Due to a disposal transaction, **HKD 14,806 thousand** from the revaluation reserve was transferred to retained earnings[45](index=45&type=chunk) - Chinese laws and regulations require companies registered in China to appropriate certain statutory reserves, which are transferred from their respective statutory financial statements' reported net profit before profit distribution to equity holders[46](index=46&type=chunk) [Dividends](index=22&type=section&id=2.17%20Dividends) The Board did not declare any interim dividend for the six months ended June 30, 2025, consistent with the prior corresponding period - The Board did not declare any interim dividend for the six months ended **June 30, 2025** (2024: nil)[47](index=47&type=chunk) [Related Party Transactions](index=22&type=section&id=2.18%20Related%20Party%20Transactions) Related party transactions this period primarily included interest expenses paid to a director and key management personnel compensation, both increasing compared to the prior corresponding period Interest Expense (HKD thousands) | Item | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | Interest expense paid to a director | 46 | 31 | Key Management Personnel Compensation (HKD thousands) | Item | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | Salaries, wages and other benefits | 1,592 | 1,518 | | Defined contribution retirement plan contributions | 63 | 58 | | **Total key management personnel compensation** | **1,655** | **1,576** | [Management Discussion and Analysis](index=23&type=section&id=3.0%20Management%20Discussion%20and%20Analysis) [Business Review](index=23&type=section&id=3.1%20Business%20Review) As an integrated engineering solutions provider, the Group's business performance was impacted by Hong Kong tunneling project delays, product specification shifts in China, and the completion of major overseas projects, leading to a revenue decline this period; management anticipates improved sales in the second half - The Group is an integrated engineering solutions provider supplying **specialized cutting tools and components for construction equipment, prefabricated steel components and equipment, specialized construction equipment, and repair and maintenance services**[50](index=50&type=chunk) - Hong Kong market: Major tunneling project extensions led to **delays in cutting tool and component orders and production**, while the foundation business was **weak due to an uncertain property market**[51](index=51&type=chunk) - China market: The tunneling market is gradually recovering, but a **shift in product specification requirements** led to a decline in performance; the company is expanding its product offerings to enhance competitiveness[52](index=52&type=chunk) - Overseas markets: Performance significantly declined, mainly because **major projects in North America and Asia Pacific were largely completed last year**, with new projects still in early stages[53](index=53&type=chunk) [Financial Review](index=24&type=section&id=3.2%20Financial%20Review) Revenue decreased by 35.0% this period, but a larger reduction in cost of sales boosted the gross profit margin to 42.4%; selling expenses declined due to reduced overseas sales, and significant exchange gains were recorded; administrative expenses remained stable, net finance costs decreased, ultimately narrowing the loss attributable to owners of the company - The Group's revenue decreased by approximately **35.0%** to **HKD 19.5 million**, primarily due to a decline in overseas market revenue, while Hong Kong market revenue increased due to higher sales of steel component products[54](index=54&type=chunk) - Gross profit margin increased from **36.0%** to **42.4%**, mainly due to a different sales mix and increased revenue from higher-margin repair and maintenance services and machinery rentals[55](index=55&type=chunk) - The Group recorded a foreign exchange gain of approximately **HKD 3.4 million** during the period, compared to an exchange loss of approximately **HKD 1.9 million** in the prior corresponding period, primarily due to the appreciation of RMB and AUD[57](index=57&type=chunk) - Loss attributable to owners of the Company was approximately **HKD 3.1 million**, compared to a loss of approximately **HKD 7.6 million** in the prior corresponding period, representing a significant narrowing of the loss[61](index=61&type=chunk) [Liquidity, Financial Resources and Capital Structure](index=25&type=section&id=3.3%20Liquidity%2C%20Financial%20Resources%20and%20Capital%20Structure) The Group's liquidity and cash reserves improved due to net proceeds from the Australian disposal transaction, increasing cash and cash equivalents; despite a decrease in the current ratio, the company maintained a net cash position and a stable capital structure Liquidity, Financial Resources and Capital Structure (HKD thousands) | Metric | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | Change (HKD thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Current assets | 121,379 | 147,947 | (26,568) | -17.9% | | Current liabilities | 61,560 | 60,222 | 1,338 | 2.2% | | Current ratio | 1.97 | 2.46 | (0.49) | -19.9% | | Cash and cash equivalents | 31,104 | 23,390 | 7,714 | 33.0% | - The Group's liquidity and cash reserves improved during the period due to **net proceeds from the disposal transaction in Australia**[62](index=62&type=chunk) - As of June 30, 2025, the Group maintained a **net cash position of approximately HKD 14.2 million** and did not record a gearing ratio[64](index=64&type=chunk) [Foreign Currency Risk and Treasury Policy](index=26&type=section&id=3.4%20Foreign%20Currency%20Risk%20and%20Treasury%20Policy) The Group primarily faces foreign currency risks from EUR, RMB, USD, and AUD; while currently lacking a hedging policy, the company manages risk by using major foreign currencies for contract settlements and converting some foreign currencies to HKD periodically, continuously assessing and monitoring foreign exchange risk - The principal currencies in which the Group transacts include **Euro, Renminbi, US Dollar, and Australian Dollar**[65](index=65&type=chunk) - Although the Group did not adopt any hedging policy during the period, the Directors believe that foreign exchange risk can be managed by using major foreign currencies as contract settlement currencies and for settling supplier payments[65](index=65&type=chunk) - The Group will continue to assess and monitor the foreign exchange risk it faces from time to time and may consider adopting hedging policies when necessary[65](index=65&type=chunk) [Capital Commitments](index=26&type=section&id=3.5%20Capital%20Commitments) As of June 30, 2025, the Group had no capital commitments - As of **June 30, 2025**, the Group had no capital commitments[66](index=66&type=chunk) [Significant Acquisitions and Disposals of Subsidiaries, Associates and Joint Ventures](index=26&type=section&id=3.6%20Significant%20Acquisitions%20and%20Disposals%20of%20Subsidiaries%2C%20Associates%20and%20Joint%20Ventures) For the six months ended June 30, 2025, the Group did not undertake any significant acquisitions or disposals of subsidiaries, associates, or joint ventures - For the six months ended **June 30, 2025**, the Group did not undertake any significant acquisitions or disposals of subsidiaries, associates, or joint ventures[67](index=67&type=chunk) [Material Investments Held](index=26&type=section&id=3.7%20Material%20Investments%20Held) For the six months ended June 30, 2025, the Group held no material investments - For the six months ended **June 30, 2025**, the Group held no material investments[68](index=68&type=chunk) [Pledge of Assets](index=27&type=section&id=3.8%20Pledge%20of%20Assets) As of June 30, 2025, Executive Director Mr. Ng Lai Ming's life insurance policy was pledged as collateral for certain bank facilities - As of **June 30, 2025**, Mr. Ng Lai Ming's life insurance policy, with a sum assured of **USD 1,582,862**, was pledged as collateral for certain bank facilities[69](index=69&type=chunk) [Contingent Liabilities](index=27&type=section&id=3.9%20Contingent%20Liabilities) As of June 30, 2025, the Group had no material contingent liabilities - As of **June 30, 2025**, the Group had no material contingent liabilities[70](index=70&type=chunk) [Interim Dividend](index=27&type=section&id=3.10%20Interim%20Dividend) The Board did not declare any interim dividend for the six months ended June 30, 2025, consistent with the prior corresponding period - The Board did not declare an interim dividend for the six months ended **June 30, 2025**[71](index=71&type=chunk) [Employees and Remuneration Policy](index=27&type=section&id=3.11%20Employees%20and%20Remuneration%20Policy) The Group's total headcount remained stable, while total staff costs decreased; remuneration policy is based on qualifications, experience, position, and tenure, rewarding outstanding performers with salary adjustments, bonuses, and promotions, fostering good employee relations - As of **June 30, 2025**, the Group had **41 employees**, consistent with December 31, 2024[72](index=72&type=chunk) - For the six months ended **June 30, 2025**, the Group's total staff costs were approximately **HKD 7.4 million**, a decrease from **HKD 8.2 million** in the prior corresponding period[72](index=72&type=chunk) - The Group primarily determines employee salaries based on each employee's qualifications, relevant experience, position, and tenure, and appropriately rewards outstanding performers through salary adjustments, bonuses, and promotions[72](index=72&type=chunk) [Corporate Governance and Other Information](index=28&type=section&id=4.0%20Corporate%20Governance%20and%20Other%20Information) [Directors and Changes in Directors' Information](index=28&type=section&id=4.1%20Directors%20and%20Changes%20in%20Directors'%20Information) The company's Board of Directors includes executive and independent non-executive directors; Mr. Ng Yung Wong was appointed Executive Director this period, and Independent Non-Executive Director Ms. Luk Pui Yin's professional roles changed - Executive Directors: Mr. Ng Lai Ming (Chairman of the Board and Chief Executive Officer), Mr. Ng Lai Tong, Mr. Ng Lai Po, and Mr. Ng Yung Wong[74](index=74&type=chunk) - Mr. Ng Yung Wong was appointed as an Executive Director on **June 27, 2025**[74](index=74&type=chunk)[75](index=75&type=chunk) - Independent Non-Executive Director Ms. Luk Pui Yin ceased to be a licensed representative and fund management director of Bay Area Capital Limited effective **May 8, 2025**[74](index=74&type=chunk) [Directors' and Chief Executive's Interests and/or Short Positions in Shares, Underlying Shares and Debentures of the Company or any Associated Corporation](index=29&type=section&id=4.2%20Directors'%20and%20Chief%20Executive's%20Interests%20and%2For%20Short%20Positions%20in%20Shares%2C%20Underlying%20Shares%20and%20Debentures%20of%20the%20Company%20or%20any%20Associated%20Corporation) As of June 30, 2025, several directors held long positions in the company's shares, with Mr. Ng Lai Ming, through his wholly-owned JAT United Company Limited, holding a 60.68% interest as the largest shareholder Directors' Interests in Shares | Director | Nature of Interest | Number of Shares | Percentage of the Company's Issued Share Capital | | :--- | :--- | :--- | :--- | | Mr. Ng Lai Ming | Interest in controlled corporation (JAT United) | 364,095,000 | 60.68% | | Mr. Ng Lai Tong | Beneficial owner | 29,025,000 | 4.84% | | Mr. Ng Lai Po | Beneficial owner | 4,500,000 | 0.75% | - Mr. Ng Lai Ming wholly owns **JAT United Company Limited** and is therefore deemed to be interested in all shares held by JAT United[77](index=77&type=chunk) - Mr. Ng Lai Ming is the elder brother of Mr. Ng Lai Tong and Mr. Ng Lai Po[77](index=77&type=chunk) [Substantial Shareholders' Interests and/or Short Positions in Shares and Underlying Shares of the Company](index=30&type=section&id=4.3%20Substantial%20Shareholders'%20Interests%20and%2For%20Short%20Positions%20in%20Shares%20and%20Underlying%20Shares%20of%20the%20Company) As of June 30, 2025, JAT United Company Limited and the spousal interest held by Ms. Law So Lin, Mr. Ng Lai Ming's spouse, were both substantial shareholders of the company, holding 60.68% of the shares Substantial Shareholders' Interests in Shares | Shareholder | Capacity/Nature of Interest | Number of Shares | Percentage of the Company's Issued Share Capital | | :--- | :--- | :--- | :--- | | JAT United | Beneficial owner | 364,095,000 | 60.68% | | Ms. Law So Lin | Interest of spouse (spouse of Mr. Ng Lai Ming) | 364,095,000 | 60.68% | - **JAT United** is wholly owned by Mr. Ng Lai Ming[79](index=79&type=chunk) - Ms. Law So Lin is the spouse of Mr. Ng Lai Ming, and is therefore deemed to be interested in all the shares in which Mr. Ng Lai Ming is interested[80](index=80&type=chunk) [Share Option Scheme](index=31&type=section&id=4.4%20Share%20Option%20Scheme) The company adopted a share option scheme in 2017, valid for ten years; no share options have been granted, exercised, or cancelled since its adoption - The Company adopted a Share Option Scheme on **June 19, 2017**[82](index=82&type=chunk) - The scheme is valid and effective for **ten years** from the date of adoption, after which no further share options may be granted[83](index=83&type=chunk) - As of the date of this report, **no share options have been granted, exercised, or cancelled**[82](index=82&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=31&type=section&id=4.5%20Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company's%20Listed%20Securities) 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 - 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) [Standard of Dealings in Securities by Directors](index=31&type=section&id=4.6%20Standard%20of%20Dealings%20in%20Securities%20by%20Directors) The company adopted a code for directors' securities dealings no less exacting than the GEM Listing Rules, and all directors confirmed compliance throughout the reporting period - The Company has adopted a code of conduct regarding directors' dealings in securities, the terms of which are **no less exacting than the required standard of dealings** set out in Rules 5.48 to 5.67 of the GEM Listing Rules[85](index=85&type=chunk) - Following specific enquiry of all Directors, all Directors have confirmed that they have **complied with the required standard** set out in the Standard Code for the six months ended **June 30, 2025**, and up to the date of this report[85](index=85&type=chunk) [Corporate Governance and Compliance with the Corporate Governance Code](index=31&type=section&id=4.7%20Corporate%20Governance%20and%20Compliance%20with%20the%20Corporate%20Governance%20Code) The company is committed to high corporate governance, adopting the Corporate Governance Code in Appendix C1 of the GEM Listing Rules; despite the Chairman and CEO roles being combined, the Board believes this arrangement ensures unified leadership and efficient decision-making - The Company has adopted the **Corporate Governance Code** as set out in Appendix C1 to the GEM Listing Rules and has complied with it for the six months ended **June 30, 2025**, and up to the date of this report, save for the deviation mentioned below[86](index=86&type=chunk) - Code Provision C.2.1 of the Corporate Governance Code stipulates that the roles of chairman and chief executive officer should be separate and not performed by the same individual; however, Mr. Ng Lai Ming currently holds both positions in the Company[87](index=87&type=chunk)[88](index=88&type=chunk) - The Board believes that combining the roles of Chairman and Chief Executive Officer ensures **unified leadership** within the Group, leading to more effective and efficient overall strategic planning[88](index=88&type=chunk) [Competing Interests](index=32&type=section&id=4.8%20Competing%20Interests) For the six months ended June 30, 2025, and up to the report date, no directors, substantial shareholders, or their respective associates held any interests in businesses competing with the Group's operations - For the six months ended **June 30, 2025**, and up to the date of this report, none of the Company's Directors, substantial shareholders, or their respective associates had any interests in businesses that compete with the Group's business[89](index=89&type=chunk) [Audit Committee](index=32&type=section&id=4.9%20Audit%20Committee) The Audit Committee comprises four independent non-executive directors, with Mr. Tai Wai Kwok as Chairman; the committee reviewed this report and provided recommendations and comments - The Audit Committee members are **Mr. Tai Wai Kwok (Chairman), Ir. Lo Kok Keung, Mr. Lau Chi Leung, and Ms. Luk Pui Yin**, all of whom are independent non-executive directors[90](index=90&type=chunk) - The Audit Committee has reviewed this report and provided its recommendations and comments thereon[90](index=90&type=chunk)

Company Information [Board of Directors and Committees](index=5&type=section&id=Board%20of%20Directors%20and%20Committees) The company's Board of Directors and various committee members underwent several changes during the period, including appointments and cessations of executive and non-executive directors, and a change in the Nomination Committee chairman - Mr. Tang Hung Kong, Ms. Leung Lai, and Mr. Wong Oi Chun's executive directorships were revoked effective March 14, 2025, due to continuous absence from board meetings for six months[101](index=101&type=chunk) - Mr. Chan Yuen Lung was appointed Executive Director and Chairman of the Board on May 20, 2025[103](index=103&type=chunk) - Ms. Shen Tai Ju resigned as Non-executive Director on June 12, 2025, due to other business commitments[103](index=103&type=chunk) - Mr. Li Tao was appointed Authorized Representative from March 14, 2025, to May 20, 2025, and was later succeeded by Mr. Chan Yuen Lung[102](index=102&type=chunk)[8](index=8&type=chunk) [Company Basic Information](index=5&type=section&id=Company%20Basic%20Information) The company updated its basic information, including company secretary, auditor, registered office, and principal place of business in Hong Kong, along with share registrar and principal bankers - Mr. Ni Zi Xuan was appointed Company Secretary on July 15, 2025, replacing Mr. Kwan Ka Man who resigned[9](index=9&type=chunk) - The company's auditor is BDO Limited, registered office is in the Cayman Islands, and principal place of business in Hong Kong is at Central Plaza, Wan Chai[10](index=10&type=chunk) - The company's stock code is 8493, and principal bankers include DBS Bank (Hong Kong) Limited and Hang Seng Bank Limited[10](index=10&type=chunk) Unaudited Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income [Profit or Loss Overview](index=7&type=section&id=Profit%20or%20Loss%20Overview) For the six months ended June 30, 2025, the Group's revenue significantly decreased by 78.2% to HK$9.4 million, leading to a substantial expansion of loss for the period to HK$11.4 million and an increase in basic and diluted loss per share to HK4.65 cents Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (For the six months ended June 30) | Indicator | 2025 (HK$'000) | 2024 (HK$'000) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 9,428 | 43,161 | -78.2% | | Cost of inventories consumed | (2,500) | (12,086) | -79.3% | | Gross profit | 6,928 | 31,075 | -77.7% | | Other income and gains, net | 3 | 26 | -88.5% | | Staff costs | (6,278) | (18,521) | -66.1% | | Depreciation of property, plant and equipment | (414) | (399) | 3.8% | | Rental and related expenses | (3,466) | (4,541) | -23.7% | | Other operating expenses | (7,550) | (8,027) | -6.0% | | Finance costs | (608) | (1,046) | -41.9% | | Loss before tax | (11,385) | (1,433) | 694.5% | | Income tax expense | – | – | 0.0% | | Loss and total comprehensive expense attributable to owners of the Company for the period | (11,385) | (1,433) | 694.5% | | Loss per share – basic and diluted (HK cents) | (4.65) | (0.62) | 650.0% | - The significant decrease in revenue was primarily due to the closure of two restaurants in the previous period[45](index=45&type=chunk) - The increase in loss for the period was mainly due to reduced revenue[55](index=55&type=chunk) Unaudited Condensed Consolidated Statement of Financial Position [Assets Overview](index=8&type=section&id=Assets%20Overview) As of June 30, 2025, the Group's total non-current assets slightly decreased, while total current assets significantly declined due to a substantial reduction in cash and cash equivalents Assets Overview (As of June 30) | Indicator | 2025 (HK$'000) | 2024 (HK$'000) | Change (%) | | :--- | :--- | :--- | :--- | | **Non-current assets** | | | | | Property, plant and equipment | 25,084 | 25,501 | -1.6% | | Deferred tax assets | 121 | 121 | 0.0% | | Total non-current assets | 25,255 | 25,672 | -1.6% | | **Current assets** | | | | | Inventories | 2,117 | 2,221 | -4.7% | | Trade receivables | 180 | 220 | -18.2% | | Prepayments, deposits and other receivables | 18,749 | 15,836 | 18.4% | | Cash and cash equivalents | 688 | 6,891 | -90.0% | | Total current assets | 22,010 | 25,444 | -13.5% | - Cash and cash equivalents significantly decreased by **90.0%** from approximately **HK$6.9 million** as of December 31, 2024, to approximately **HK$0.7 million** as of June 30, 2025[12](index=12&type=chunk) [Liabilities and Equity Overview](index=8&type=section&id=Liabilities%20and%20Equity%20Overview) The Group's total current liabilities slightly increased, leading to an expanded net current liabilities and a further increase in total equity deficiency to HK$127.4 million, indicating continued financial pressure Liabilities and Equity Overview (As of June 30) | Indicator | 2025 (HK$'000) | 2024 (HK$'000) | Change (%) | | :--- | :--- | :--- | :--- | | **Current liabilities** | | | | | Trade payables | 36,048 | 36,113 | -0.2% | | Other payables and accrued charges | 41,895 | 37,770 | 10.9% | | Bank and other borrowings | 93,275 | 93,470 | -0.2% | | Amount due to a director | 2,767 | 3,814 | -27.4% | | Total current liabilities | 174,710 | 172,014 | 1.6% | | Net current liabilities | (152,700) | (146,570) | 4.2% | | Total assets less current liabilities | (127,445) | (120,898) | 5.4% | | Net liabilities | (127,445) | (120,898) | 5.4% | | **Capital and reserves** | | | | | Share capital | 29,030 | 24,192 | 20.0% | | Reserves | (156,475) | (145,090) | 7.9% | | Total equity deficiency | (127,445) | (120,898) | 5.4% | - The Group's current liabilities exceeded current assets by approximately **HK$152.7 million**, with net liabilities of approximately **HK$127.4 million**, indicating uncertainty about going concern[20](index=20&type=chunk) - Total bank and other borrowings were approximately **HK$93.3 million**, of which approximately **HK$79.96 million** is repayable within one year, while cash and cash equivalents were only approximately **HK$0.7 million**[20](index=20&type=chunk) Unaudited Condensed Consolidated Statement of Changes in Equity [Equity Movement Analysis](index=10&type=section&id=Equity%20Movement%20Analysis) The Group's total equity deficiency expanded from HK$102.4 million as of January 1, 2024, to HK$127.4 million as of June 30, 2025, primarily impacted by loss for the period and new share placements Condensed Consolidated Statement of Changes in Equity (For the six months ended June 30) | Indicator | 2025 (HK$'000) | 2024 (HK$'000) | | :--- | :--- | :--- | | Share capital | 29,030 | 24,192 | | Share premium | 95,976 | 95,976 | | Other reserves | (43,224) | (43,224) | | Capital reserve | 42,703 | 42,703 | | Exchange fluctuation reserve | (143) | (143) | | Accumulated losses | (251,787) | (214,796) | | Total equity deficiency | (127,445) | (95,292) | - In the first half of 2025, the company increased its share capital by **HK$4,838 thousand** through a new share placement, but a loss for the period of **HK$11,385 thousand** led to a further expansion of accumulated losses[14](index=14&type=chunk) - In the first half of 2024, new share placement brought in **HK$8,520 thousand**, but a loss for the period was **HK$1,433 thousand**[14](index=14&type=chunk) Unaudited Condensed Consolidated Statement of Cash Flows [Cash Flow Overview](index=11&type=section&id=Cash%20Flow%20Overview) For the six months ended June 30, 2025, the Group recorded a net cash outflow from operating activities of HK$9.7 million and a net cash inflow from financing activities of HK$3.5 million, resulting in a net decrease in cash and cash equivalents of HK$6.2 million Condensed Consolidated Statement of Cash Flows (For the six months ended June 30) | Indicator | 2025 (HK$'000) | 2024 (HK$'000) | | :--- | :--- | :--- | | Net cash (used in) / generated from operating activities | (9,679) | 1,105 | | Net cash generated from investing activities | 2 | 1 | | Net cash generated from financing activities | 3,474 | 5,974 | | Net (decrease) / increase in cash and cash equivalents | (6,203) | 7,080 | | Cash and cash equivalents at beginning of period | 6,891 | 1,014 | | Cash and cash equivalents at end of period | 688 | 8,094 | - Cash flow from operating activities turned from a net inflow of **HK$1.1 million** in the same period of 2024 to a net outflow of **HK$9.7 million** in the same period of 2025, reflecting a deterioration in operating conditions[15](index=15&type=chunk) - Net cash inflow from financing activities primarily came from new share placement of **HK$4.8 million**, but was partially offset by repayment of bank borrowings and payment of lease liabilities[15](index=15&type=chunk) Notes to the Unaudited Condensed Consolidated Financial Statements [General Information](index=12&type=section&id=General%20Information) The company is an investment holding company primarily engaged in operating and managing restaurants, registered in the Cayman Islands with its principal place of business in Hong Kong - The company was incorporated in the Cayman Islands on August 8, 2016, with its principal place of business at Unit 3902, 39/F, Central Plaza, 18 Harbour Road, Wan Chai, Hong Kong[16](index=16&type=chunk) - The Group is principally engaged in the operation and management of Chinese restaurants[17](index=17&type=chunk) [Basis of Presentation and Principal Accounting Policies](index=12&type=section&id=Basis%20of%20Presentation%20and%20Principal%20Accounting%20Policies) These financial statements are prepared on a going concern basis, despite the Group facing challenges with current liabilities exceeding current assets. Management has proposed several measures to address liquidity pressure, including active negotiation for bank loan renewals, considering equity fundraising, and implementing cost-saving initiatives - As of June 30, 2025, the Group's current liabilities exceeded current assets by approximately **HK$152.7 million**, with net liabilities of approximately **HK$127.4 million**, and interest-bearing bank and other borrowings totaling approximately **HK$93.3 million**, while cash and cash equivalents were only approximately **HK$0.7 million**[20](index=20&type=chunk) - Management plans to actively negotiate with banks for loan renewals, consider issuing new shares/convertible bonds or other equity fundraising activities, and implement cost-saving measures to improve liquidity and financial position[21](index=21&type=chunk) - The Group will focus on its restaurant operations, accelerate the opening of smaller restaurants offering diverse cuisines, and explore different catering services and peripheral business opportunities to expand revenue streams[21](index=21&type=chunk) [Estimates](index=14&type=section&id=Estimates) The significant management judgments and sources of estimation uncertainty used in preparing the interim financial statements are consistent with those in the previous year's consolidated financial statements, with no material changes - The significant management judgments and key sources of estimation uncertainty in applying the Group's accounting policies for the preparation of the interim condensed consolidated financial statements are the same as those applied in the consolidated financial statements for the year ended December 31, 2024[24](index=24&type=chunk) [Financial Risk Management and Financial Instruments](index=14&type=section&id=Financial%20Risk%20Management%20and%20Financial%20Instruments) The Group is exposed to interest rate risk, credit risk, and liquidity risk, but there have been no significant changes in risk management policies and liquidity management practices since the year-end - The Group's activities expose it to interest rate risk, credit risk, and liquidity risk[25](index=25&type=chunk) - There have been no significant changes in the risk management policies and practices for liquidity and funding risk since the year-end[26](index=26&type=chunk)[27](index=27&type=chunk) [Revenue](index=15&type=section&id=Revenue) The Group's revenue is entirely derived from the operation of Chinese restaurants in Hong Kong and is recognized when catering services are provided Revenue Breakdown (For the six months ended June 30) | Category | 2025 (HK$'000) | 2024 (HK$'000) | | :--- | :--- | :--- | | Revenue from operation of Chinese restaurants | 9,428 | 43,161 | | Revenue from Hong Kong market | 9,428 | 43,161 | | Revenue recognition timing (at a point in time) | 9,428 | 43,161 | - Performance obligations are satisfied when catering services are provided to customers, with trade terms primarily involving cash and credit card payments, and credit periods typically ranging from a few days to 60 days[30](index=30&type=chunk) [Other Income and Gains, Net](index=15&type=section&id=Other%20Income%20and%20Gains,%20Net) Other income and gains, net, significantly decreased by 88.5% to HK$3 thousand during the period, primarily due to a reduction in miscellaneous income Other Income and Gains, Net (For the six months ended June 30) | Category | 2025 (HK$'000) | 2024 (HK$'000) | | :--- | :--- | :--- | | Bank interest income | 2 | 1 | | Exchange gain | – | 1 | | Others | 1 | 24 | | **Total** | **3** | **26** | - Other income and gains, net, decreased by approximately **HK$23 thousand** or approximately **88.5%**, mainly due to a decrease in miscellaneous income during the period[50](index=50&type=chunk) [Loss for the Period](index=16&type=section&id=Loss%20for%20the%20Period) Loss for the period is stated after deducting auditor's remuneration and employee benefit expenses, with employee benefit expenses significantly reduced due to restaurant closures Loss for the Period Deductions (For the six months ended June 30) | Item | 2025 (HK$'000) | 2024 (HK$'000) | | :--- | :--- | :--- | | Auditor's remuneration | 440 | 440 | | Employee benefit expenses (excluding directors' and chief executive's emoluments) | | | | Wages and salaries | 5,515 | 17,157 | | Retirement benefit scheme contributions | 212 | 764 | | **Total** | **5,727** | **17,921** | - Staff costs decreased by approximately **65.9%** from approximately **HK$18.5 million** in the previous period to approximately **HK$6.3 million** in the current period, mainly due to the closure of certain restaurants in April and June 2024[51](index=51&type=chunk) [Income Tax Expense](index=16&type=section&id=Income%20Tax%20Expense) The Group incurred no income tax expense in the current and prior periods, primarily because estimated assessable profits were fully offset by unutilized tax losses carried forward from previous years - No provision for Hong Kong Profits Tax was made as the Group's estimated assessable profits for the relevant periods were fully offset by unutilized tax losses brought forward from prior years[35](index=35&type=chunk) - Hong Kong Profits Tax is calculated under a two-tiered profits tax rate regime, with the first **HK$2,000,000** of profits taxed at **8.25%** and the remainder at **16.5%**[35](index=35&type=chunk) [Dividends](index=17&type=section&id=Dividends) The Board does not recommend the payment of any interim dividend for the six months ended June 30, 2025 - The Board does not recommend the payment of any interim dividend for the six months ended June 30, 2025 (2024: nil)[37](index=37&type=chunk) [Loss Per Share](index=17&type=section&id=Loss%20Per%20Share) For the six months ended June 30, 2025, basic and diluted loss per share attributable to owners of the company was HK4.65 cents, a significant increase from the same period last year Loss Per Share Calculation (For the six months ended June 30) | Indicator | 2025 (HK$'000/thousand shares) | 2024 (HK$'000/thousand shares) | | :--- | :--- | :--- | | Loss attributable to owners of the Company | (11,385) | (1,433) | | Weighted average number of ordinary shares | 244,860 | 232,046 | | Basic and diluted loss per share (HK cents) | (4.65) | (0.62) | - Diluted (loss) earnings per share were not presented for the six months ended June 30, 2025 and 2024, as there were no potential ordinary shares in issue[38](index=38&type=chunk) [Property, Plant and Equipment](index=17&type=section&id=Property,%20Plant%20and%20Equipment) For the six months ended June 30, 2025, the Group made no purchases of property, plant and equipment - For the six months ended June 30, 2025, the Group made no purchases of property, plant and equipment (2024: nil)[39](index=39&type=chunk) [Trade Receivables](index=18&type=section&id=Trade%20Receivables) As of June 30, 2025, total trade receivables amounted to HK$180 thousand, with the majority aged over 180 days Trade Receivables Ageing Analysis (As of June 30) | Ageing | 2025 (HK$'000) | 2024 (HK$'000) | | :--- | :--- | :--- | | 0 to 30 days | 10 | 50 | | Over 180 days | 170 | 170 | | **Total** | **180** | **220** | - Certain customers are granted credit periods ranging from a few days to 60 days[40](index=40&type=chunk) [Trade Payables](index=18&type=section&id=Trade%20Payables) As of June 30, 2025, total trade payables amounted to HK$36,048 thousand, with the vast majority aged over 90 days Trade Payables Ageing Analysis (As of June 30) | Ageing | 2025 (HK$'000) | 2024 (HK$'000) | | :--- | :--- | :--- | | 0 to 30 days | 72 | 171 | | 31 to 60 days | 73 | 20 | | 61 to 90 days | 69 | 64 | | Over 90 days | 35,834 | 35,858 | | **Total** | **36,048** | **36,113** | [Share Capital](index=19&type=section&id=Share%20Capital) The company's share capital increased due to a new share placement in June 2025, issuing 48,384,000 placing shares with net proceeds of approximately HK$4.55 million Share Capital Movement (As of June 30) | Share Capital Movement | Number of Shares (shares) | Amount (HK$'000) | | :--- | :--- | :--- | | January 1, 2024 | 207,360,000 | 20,736 | | Placing of new shares on February 22, 2024 | 34,560,000 | 3,456 | | December 31, 2024 and January 1, 2025 | 241,920,000 | 24,192 | | Placing of new shares on June 20, 2025 | 48,384,000 | 4,838 | | June 30, 2025 | 290,304,000 | 29,030 | - On June 2, 2025, the company entered into a placing agreement with a placing agent to place up to **48,384,000** placing shares at **HK$0.10** per share to independent investors, with net proceeds of approximately **HK$4.55 million**[42](index=42&type=chunk) Management Discussion and Analysis [Business and Operations Review](index=20&type=section&id=Business%20and%20Operations%20Review) The Group is a Cantonese restaurant group, operating one "Lung Po" brand restaurant in Hong Kong for the six months ended June 30, 2025, and having closed two "Lung King" brand restaurants in the prior period - The Group is a full-service Cantonese restaurant group operating under its own brands[43](index=43&type=chunk) - During the period, the Group operated one "Lung Po" brand restaurant in Hong Kong[44](index=44&type=chunk) - Due to lease expiry, the Group closed two other "Lung King" brand restaurants in April and June 2024, respectively[44](index=44&type=chunk) [Financial Review](index=20&type=section&id=Financial%20Review) The Group's financial performance significantly deteriorated, with revenue sharply declining by 78.2%, gross profit decreasing by 77.5%, and loss for the period expanding by nearly 7 times, primarily due to restaurant closures and a weak market [Revenue](index=20&type=section&id=Revenue) Total revenue for the period was approximately HK$9.4 million, a 78.2% decrease from HK$43.2 million in the prior period, mainly due to the closure of two restaurants in the prior period Revenue Details (For the six months ended June 30) | Brand | 2025 (HK$'000) | % of Total Revenue | 2024 (HK$'000) | % of Total Revenue | | :--- | :--- | :--- | :--- | :--- | | Lung King* | – | – | 27,930 | 64.7 | | Lung Po | 9,428 | 100.0 | 15,231 | 35.3 | | **Total Revenue** | **9,428** | **100.0** | **43,161** | **100.0** | - Revenue from the "Lung Po" brand decreased by approximately **38.1%** to **HK$9.4 million**, mainly due to a challenging business environment and weak market sentiment[47](index=47&type=chunk) [Gross Profit and Gross Margin](index=21&type=section&id=Gross%20Profit%20and%20Gross%20Margin) Gross profit for the period was HK$7.0 million, a 77.5% decrease from the prior period, but the overall gross margin slightly increased by 1.5%, mainly due to reduced customer spending - Gross profit decreased by approximately **HK$24.1 million** or approximately **77.5%**[48](index=48&type=chunk) - The overall gross margin slightly increased by **1.5%** compared to the prior period, mainly due to less customer spending during the period[48](index=48&type=chunk) [Other Income and Gains, Net](index=22&type=section&id=Other%20Income%20and%20Gains,%20Net) Other income and gains, net, significantly decreased by 88.5% to HK$3 thousand during the period, primarily due to a reduction in miscellaneous income - Other income and gains, net, decreased by approximately **HK$23 thousand** or approximately **88.5%** from approximately **HK$26 thousand** in the prior period to approximately **HK$3 thousand** in the current period[50](index=50&type=chunk) [Staff Costs](index=22&type=section&id=Staff%20Costs) Staff costs amounted to HK$6.3 million, a 65.9% decrease from the prior period, primarily due to the closure of certain restaurants in April and June 2024 - Staff costs decreased by approximately **HK$12.2 million** or approximately **65.9%**[51](index=51&type=chunk) [Rental and Related Expenses](index=22&type=section&id=Rental%20and%20Related%20Expenses) Rental and related expenses decreased by 22.2% to HK$3.5 million, mainly due to a reduction in the number of restaurants operated by the Group - Rental and related expenses decreased by approximately **HK$1.0 million** or approximately **22.2%**[53](index=53&type=chunk) [Other Operating Expenses](index=22&type=section&id=Other%20Operating%20Expenses) Other operating expenses decreased by 5.0% to HK$7.6 million, primarily due to the closure of certain restaurants - Other operating expenses decreased by approximately **HK$0.4 million** or approximately **5.0%**[54](index=54&type=chunk) [Loss Attributable to Owners of the Company](index=23&type=section&id=Loss%20Attributable%20to%20Owners%20of%20the%20Company) Loss attributable to owners of the company was HK$11.4 million, a significant increase from HK$1.4 million in the prior period, mainly due to reduced revenue - Loss attributable to owners of the company increased by approximately **HK$10.0 million**, mainly due to reduced revenue resulting from the closure of two restaurants[55](index=55&type=chunk) [Prospects](index=23&type=section&id=Prospects) The Hong Kong catering industry faces multiple challenges, including changing consumption patterns, rising costs, and weak market sentiment. The Group will comprehensively review operations, diversify its restaurant portfolio, maintain cost control, and enhance operational efficiency to address challenges and promote sustainable development - The Hong Kong catering industry faces multiple challenges, including changing customer consumption patterns, rising food and labor costs, weak consumer sentiment, and the rise of takeaway and delivery services[56](index=56&type=chunk) - The Group will conduct a comprehensive review and integration of its operations, seize opportunities to diversify its existing restaurant portfolio, and expand its presence in the catering market[56](index=56&type=chunk) - The Group will continue to implement cost control and enhance operational efficiency, closely monitor market dynamics, adopt flexible operating strategies, and focus on its core business to strengthen its competitive advantages[56](index=56&type=chunk) [Capital Structure](index=23&type=section&id=Capital%20Structure) The company completed a placing of 48,384,000 new shares in June 2025, with net proceeds of approximately HK$4.55 million, primarily used for general working capital, business development, and repayment of outstanding liabilities - On June 20, 2025, the company successfully placed **48,384,000** placing shares to Mr. Lee Cheong Sun at a placing price of **HK$0.10** per share[58](index=58&type=chunk) - The net proceeds from the placing were approximately **HK$4.55 million**, of which approximately **37.4%** was used for general working capital, approximately **44.0%** for business development, and approximately **18.6%** for repayment of outstanding liabilities[58](index=58&type=chunk) - As of June 30, 2025, the company's issued share capital was **HK$29,030,400** (i.e., **290,304,000** shares)[59](index=59&type=chunk) [Liquidity and Financial Resources](index=24&type=section&id=Liquidity%20and%20Financial%20Resources) The Group is primarily funded by cash generated from operations and bank borrowings, but as of June 30, 2025, cash and cash equivalents significantly decreased to HK$0.7 million, while bank and other borrowings remained at approximately HK$93.3 million - As of June 30, 2025, the Group's bank and other borrowings were approximately **HK$93.3 million** (December 31, 2024: approximately **HK$93.5 million**)[60](index=60&type=chunk) - As of June 30, 2025, the Group's cash and cash equivalents were approximately **HK$0.7 million** (December 31, 2024: approximately **HK$6.9 million**), a significant decrease[60](index=60&type=chunk) [Gearing Ratio](index=25&type=section&id=Gearing%20Ratio) As of June 30, 2025, the Group's gearing ratio was approximately 376.0%, largely consistent with December 31, 2024, indicating a high leverage level - As of June 30, 2025, the Group's gearing ratio was approximately **376.0%** (December 31, 2024: approximately **375.9%**)[61](index=61&type=chunk) - The gearing ratio is calculated as net debt divided by capital and net debt, where net debt is total liabilities (excluding tax payables) less cash and cash equivalents[61](index=61&type=chunk) [Pledge of the Group's Assets](index=25&type=section&id=Pledge%20of%20the%20Group's%20Assets) As of June 30, 2025, the Group pledged buildings valued at approximately HK$25.1 million to secure certain bank facilities - As of June 30, 2025, the Group pledged buildings with a value of approximately **HK$25.1 million** (December 31, 2024: approximately **HK$25.5 million**) to secure certain bank facilities granted to it[62](index=62&type=chunk) [Discloseable Transaction](index=26&type=section&id=Discloseable%20Transaction) The company entered into a business introduction agreement with Garville Consultants Limited, paying a refundable amount of HK$3 million to identify potential restaurant business sellers, and will pay a 5% success fee upon successful acquisition, aiming to expand its business footprint - The company entered into a business introduction agreement with Garville Consultants Limited to identify and introduce potential sellers of restaurant businesses[65](index=65&type=chunk) - The Group has paid a refundable amount of **HK$3 million** to obtain due diligence information and will pay a success fee of **5%** of the total transaction amount upon successful acquisition[65](index=65&type=chunk)[66](index=66&type=chunk) - The Group is actively seeking to acquire quality restaurant businesses offering Asian Pacific cuisines to expand its business footprint and increase overall revenue[67](index=67&type=chunk) [Foreign Exchange Risk](index=27&type=section&id=Foreign%20Exchange%20Risk) The Group's majority of income and expenses are denominated in HKD and RMB, with no significant foreign exchange risk expected from RMB transactions and balances, and no hedging activities undertaken - The majority of the Group's income and expenses are denominated in Hong Kong Dollars and Renminbi, with no significant risk expected from Renminbi transactions and balances[69](index=69&type=chunk) - The Group does not have any significant foreign exchange risk and did not use any financial instruments for hedging purposes during the period[70](index=70&type=chunk) [Treasury Policy](index=27&type=section&id=Treasury%20Policy) The Board will continue to adopt a prudent policy in managing cash balances to maintain a strong and sound liquidity position, seizing future growth opportunities - The Directors will continue to adopt a prudent policy in managing the Group's cash balances and maintaining a strong and sound liquidity position to ensure the Group is ready to seize future growth opportunities[71](index=71&type=chunk) [Contingent Liabilities and Commitments](index=27&type=section&id=Contingent%20Liabilities%20and%20Commitments) As of June 30, 2025, the Group had no significant contingent liabilities or commitments - As of June 30, 2025, the Group had no significant contingent liabilities (December 31, 2024: nil)[72](index=72&type=chunk) - As of June 30, 2025, the Group had no commitments (December 31, 2024: nil)[73](index=73&type=chunk) [Employees and Remuneration Policy](index=28&type=section&id=Employees%20and%20Remuneration%20Policy) As of June 30, 2025, the Group had 38 employees, with total staff costs of approximately HK$6.3 million. The remuneration policy combines fixed and variable components, offering training and a share option scheme to incentivize staff - As of June 30, 2025, the Group had approximately **38** employees (June 30, 2024: **48** employees) based in Hong Kong[75](index=75&type=chunk) - Total staff costs (including directors' emoluments and mandatory provident fund contributions) for the period were approximately **HK$6.3 million** (prior period: approximately **HK$18.5 million**)[75](index=75&type=chunk) - The remuneration policy primarily comprises a fixed component (basic salary) and a variable component (discretionary bonus and other performance-based remuneration), and a share option scheme has been adopted to acknowledge and reward contributions[75](index=75&type=chunk) [Share Option Scheme](index=29&type=section&id=Share%20Option%20Scheme) The company has a share option scheme, valid for ten years, aimed at incentivizing and retaining talent. As of the period, the total number of share options available for grant under the scheme was 14,400,000, but no options were granted, exercised, cancelled, or lapsed during the period - The share option scheme was adopted on December 15, 2017, with a ten-year validity, aiming to grant share options to directors, employees, and other stakeholders as incentives or rewards[77](index=77&type=chunk)[80](index=80&type=chunk) - The subscription price for share options is the highest of the closing price on the grant date, the average closing price for the preceding five business days, or the nominal value of the shares[77](index=77&type=chunk) - As of January 1, 2025, and June 30, 2025, the total number of share options available for grant under the scheme was **14,400,000**, but no share options were granted, exercised, cancelled, or lapsed during the period[80](index=80&type=chunk)[82](index=82&type=chunk) [Events After the Reporting Period](index=31&type=section&id=Events%20After%20the%20Reporting%20Period) On August 28, 2025, Dragon International Group Limited, a direct wholly-owned subsidiary of the company, entered into a non-legally binding memorandum of understanding with 1957 & Co. (Hospitality) Limited regarding the possible disposal of 70% of the issued share capital of MANGO TREE (KOWLOON) LIMITED - On August 28, 2025, Dragon International Group Limited, a direct wholly-owned subsidiary of the company, entered into a non-legally binding memorandum of understanding with 1957 & Co. (Hospitality) Limited regarding the possible disposal of **70%** of the issued share capital of MANGO TREE (KOWLOON) LIMITED[83](index=83&type=chunk) [Material Litigation](index=31&type=section&id=Material%20Litigation) The Group faces several material litigations, including a judgment to pay HK$2 million for dishonored checks, a winding-up order for a subsidiary due to unpaid debts, and a settlement reached in a dispute over renovation project contract payments - Oriental E-Commerce Limited, a wholly-owned subsidiary, was ordered to pay **HK$2 million** plus interest and legal costs to Chan Chun Kau & Co. for dishonored checks[84](index=84&type=chunk) - Fu Ju Limited, a wholly-owned subsidiary, was ordered to be wound up on February 12, 2025, for refusing to settle a debt of approximately **HK$17 thousand**[85](index=85&type=chunk) - Yun Li Limited, a wholly-owned subsidiary, reached a settlement with Well-Built Engineering Limited regarding a dispute over renovation project contract payments by the end of April 2023[86](index=86&type=chunk)[87](index=87&type=chunk) Other Information [Directors' and Chief Executive's Interests](index=33&type=section&id=Directors'%20and%20Chief%20Executive's%20Interests) As of June 30, 2025, no directors or chief executive of the company held any disclosable interests or short positions in the shares, underlying shares, or debentures of the company or its associated corporations - As of June 30, 2025, no directors or chief executive of the company had any interests or short positions in the shares, underlying shares, and debentures of the company or any of its associated corporations that were required to be notified to the company and the Stock Exchange under Part XV of the Securities and Futures Ordinance[89](index=89&type=chunk) [Substantial Shareholders' and Other Persons' Interests](index=33&type=section&id=Substantial%20Shareholders'%20and%20Other%20Persons'%20Interests) As of June 30, 2025, Mr. Lee Cheong Sun was a substantial shareholder of the company, holding 48,384,000 shares, representing approximately 16.67% of the equity Substantial Shareholders' Shareholding (As of June 30) | Name of Substantial Shareholder | Capacity/Nature of Interest | Number of Shares Held/Interested | Approximate Percentage of Shareholding | | :--- | :--- | :--- | :--- | | Lee Cheong Sun | Beneficial owner | 48,384,000 | 16.67% | - The approximate percentage of shareholding in this table is calculated based on the company's issued share capital of **290,304,000** shares as of June 30, 2025[91](index=91&type=chunk) [Purchase, Sale or Redemption of Listed Securities](index=34&type=section&id=Purchase,%20Sale%20or%20Redemption%20of%20Listed%20Securities) During the period, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities, nor did it hold any treasury shares - During the period, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities[92](index=92&type=chunk) - As of June 30, 2025, the company did not hold any treasury shares[93](index=93&type=chunk) [Directors' Securities Transactions](index=34&type=section&id=Directors'%20Securities%20Transactions) All directors confirmed full compliance with the required standards of dealing as set out in the GEM Listing Rules during the period, with no instances of non-compliance - All Directors confirmed that they had fully complied with the required standards of dealing and that there were no instances of non-compliance during the period[94](index=94&type=chunk) [Corporate Governance Practices](index=35&type=section&id=Corporate%20Governance%20Practices) The company complied with the Corporate Governance Code during the period, but there were several deviations, including insufficient gender diversity on the Board, no director's legal liability insurance, no established internal audit function, and the Audit Committee chairman's absence from the AGM - The company's Board of Directors consists of directors of a single gender, deviating from the Corporate Governance Code's requirement for the Nomination Committee to appoint at least one director of a different gender[95](index=95&type=chunk) - The company did not arrange for directors' legal liability insurance during the period, as the Board believed the risk of significant legal claims was minimal[95](index=95&type=chunk) - The Group has not yet established its internal audit function, and the Audit Committee and the Board will continue to review the need for an internal audit function annually[96](index=96&type=chunk) - Mr. Tsang Ching Fung, the chairman of the Audit Committee, was unable to attend the company's Annual General Meeting due to other work commitments[96](index=96&type=chunk) [Use of Proceeds from Placing of New Shares](index=36&type=section&id=Use%20of%20Proceeds%20from%20Placing%20of%20New%20Shares) The company completed a placing of 48,384,000 shares in June 2025, and the net proceeds of approximately HK$4.55 million have been fully utilized as planned for general working capital, business development, and repayment of outstanding liabilities Use of Net Proceeds from Placing of New Shares (As of June 30) | Use of Net Proceeds | Net Proceeds (HK$'000) | Net Proceeds Utilized (HK$'000) | Net Proceeds Unutilized (HK$'000) | | :--- | :--- | :--- | :--- | | General working capital | 1,700 | 1,700 | – | | Business development | 2,000 | 2,000 | – | | Repayment of outstanding liabilities | 850 | 850 | – | | **Total** | **4,550** | **4,550** | **–** | - All shares issued under the placing were allotted to Mr. Lee Cheong Sun, an independent third party of the company[99](index=99&type=chunk) [Changes in Directors](index=37&type=section&id=Changes%20in%20Directors) Several changes occurred in the Board of Directors during the period, including the revocation of three executive directors' positions due to absence from meetings, Ms. Shen's resignation as a non-executive director, and Mr. Chan Yuen Lung's appointment as executive director and chairman of the Board - Mr. Tang Hung Kong, Ms. Leung Lai, and Mr. Wong Oi Chun's executive directorships were revoked effective March 14, 2025, due to continuous absence from board meetings for six months[101](index=101&type=chunk) - Ms. Shen Tai Ju resigned as Non-executive Director on June 12, 2025, due to other business commitments[103](index=103&type=chunk) - Mr. Chan Yuen Lung was appointed Executive Director and Chairman of the Board on May 20, 2025, and was re-elected at the Annual General Meeting[103](index=103&type=chunk) - Mr. Lo Shing Shan was appointed Chairman of the Nomination Committee, and Mr. Li Tao and Mr. Chan Yuen Lung were successively appointed Authorized Representatives[102](index=102&type=chunk)[103](index=103&type=chunk) [Audit Committee](index=38&type=section&id=Audit%20Committee) The Audit Committee, composed of three independent non-executive directors, is responsible for reviewing financial information, internal control, and risk management systems. The committee has reviewed the unaudited condensed consolidated financial statements for the period and found them to comply with applicable accounting standards and disclosure requirements - The Audit Committee comprises three independent non-executive directors: Mr. Tsang Ching Fung (Chairman), Mr. Lo Shing Shan, and Mr. Chow Yick[106](index=106&type=chunk) - The Audit Committee reviews financial information and reporting processes, internal control procedures and risk management systems, audit plans, and relationships with external auditors[106](index=106&type=chunk) - The Audit Committee has reviewed the Group's unaudited condensed consolidated financial statements for the period and is of the opinion that they comply with applicable accounting standards, the GEM Listing Rules, and that adequate disclosures have been made[106](index=106&type=chunk)

香 港 交 易 及 結 算 所 有 限 公 司 及 香 港 聯 合 交 易 所 有 限 公 司 對 本 公 佈 的 內 容 概 不 負 責，對 其 準 確 性 或 完 整 性 亦 不 發 表 任 何 聲 明，並 明 確 表 示 概 不 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 的 任 何 損 失 承 擔 任 何 責 任。 Anchorstone Holdings Limited 基石控股有限公司 （於開曼群島註冊成立的有限公司） （股份代號：1592） 截 至2025年6月30日 止 六 個 月 的 中 期 業 績 公 佈 中 期 業 績（未 經 審 核） 基 石 控 股 有 限 公 司（「本 公 司」）董 事（「董 事」）會（「董 事 會」）欣 然 宣 佈 本 公 司 及 其 附 屬 公 司（統 稱「本 集 團」）截 至2025年6月30日 止 六 個 月 的 未 經 審 核 簡 明 綜 合 中 期 業 績 連 同2024年 同 期 未 經 審 核 比 較 數 字 如 下： 簡 明 綜 合 中 期 損 益 及 其 他 全 面 收 益 表 ...

Company Information [Board of Directors and Committees](index=3&type=section&id=Board%20of%20Directors%20and%20Committees) The company's board, comprising executive and independent non-executive directors, ensures robust governance via audit, remuneration, and nomination committees - The Board of Directors includes executive directors Mr. Ng Khing Yeu (Chairman), Ms. Li Xiaolan, Mr. Wang Er, and independent non-executive directors Mr. Dong Jie, Dr. Wang Ling, and Mr. Liang Yaozu[5](index=5&type=chunk) - The company has an Audit Committee (Chairman: Mr. Liang Yaozu), a Remuneration Committee (Chairman: Dr. Wang Ling), and a Nomination Committee (Chairman: Ms. Li Xiaolan), with independent non-executive directors participating in each[5](index=5&type=chunk) [Registration and Business Locations](index=3&type=section&id=Registration%20and%20Business%20Locations) The company is registered in the Cayman Islands with primary business operations in Malaysia and Hong Kong, trading under stock code 02112 - The company's registered office is in the Cayman Islands, with its headquarters and principal place of business in Kuantan, Pahang, Malaysia, and its principal place of business in Hong Kong located in Lai Chi Kok, Kowloon[5](index=5&type=chunk) - The company's stock code is **02112**, and its corporate website is https://www.gracelife.hk[6](index=6&type=chunk) Summary [Summary](index=4&type=section&id=Summary) For H1 2025, the Group saw significant revenue growth, turned profitable, but the Board did not recommend an interim dividend 2025 H1 Key Financial Summary (Million USD) | Metric | 2025 H1 | 2024 H1 | | :--- | :--- | :--- | | Revenue | 8.42 | 5.97 | | Gross Profit | 1.13 | 0.98 | | Profit/(Loss) | 0.2 (Profit) | (9.0) (Loss) | | Interim Dividend | None | None | Management Discussion and Analysis [Business Development Overview](index=5&type=section&id=Business%20Development%20Overview) As an investment holding company, the Group's core businesses include R&D and application of plant stem cell technology, iron ore exploration, mining, and sales, with mining assets concentrated in Malaysia's Ibam mine - The company's main businesses include R&D and application of plant stem cell technology, iron ore exploration, mining and sales, and investment holding[10](index=10&type=chunk) - For the six months ended June 30, 2025, the Group's primary mining assets were concentrated in the iron ore reserves of the Ibam mine in Pahang, Malaysia[10](index=10&type=chunk) [Continued Rapid Growth and Strategic Upgrades in Plant Stem Cell Business](index=5&type=section&id=Continued%20Rapid%20Growth%20and%20Strategic%20Upgrades%20in%20Plant%20Stem%20Cell%20Business) The plant stem cell business achieved strong growth in H1 2025, becoming a core performance driver through expanded sales channels and market penetration, further solidified by strategic cooperation with a Chinese medical group and future global R&D center plans - In H1 2025, the plant stem cell business maintained **strong growth**, with a significant increase in revenue, becoming the core engine of the company's performance growth[11](index=11&type=chunk) - The company established a strategic partnership with a leading Chinese medical group, leveraging its national healthcare service network to comprehensively promote the sales and marketing of plant stem cell products in the Chinese market[11](index=11&type=chunk) - Future plans include establishing a global R&D center, collaborating with renowned scientific research institutions, deploying **10,000 vending machines** in China, setting up high-end shopping mall counters, and opening **over 50 health management chain centers**[12](index=12&type=chunk) - In May 2025, a non-legally binding Memorandum of Understanding was signed with a Korean plant stem cell essence production facility to explore potential strategic investment[12](index=12&type=chunk) [Adjustments in Mining Business and Exploration of New Ventures](index=6&type=section&id=Adjustments%20in%20Mining%20Business%20and%20Exploration%20of%20New%20Ventures) Due to low international iron ore prices, the company suspended iron ore production and sales in H1 2025, while actively exploring the feasibility of tin concentrate mining to diversify its mining segment - Due to persistently low international iron ore prices, far below mining and processing costs, the company maintained its decision to **suspend iron ore production and sales** in H1 2025[14](index=14&type=chunk) - In February 2025, the company began exploring the feasibility of tin concentrate mining, has contacted potential partners, and is preparing a tin concentrate production line, which is expected to bring new revenue streams[14](index=14&type=chunk) [Continued Advancement of Diversification Strategy](index=6&type=section&id=Continued%20Advancement%20of%20Diversification%20Strategy) The company will continue its diversification strategy, consolidating the plant stem cell business as a core growth engine and prudently advancing the tin concentrate business to navigate market volatility and create long-term sustainable value - The company will fully leverage its plant stem cell advantages, accelerate business expansion in traditional Chinese medicine and the broader health industry chain, and consolidate its core growth engine[15](index=15&type=chunk) - The company will prudently advance the tin concentrate business, flexibly responding to global economic and commodity market fluctuations, ensuring overall business resilience and growth potential[15](index=15&type=chunk) [Market Review and Outlook](index=6&type=section&id=Market%20Review%20and%20Outlook) This report analyzes the current status and trends of the big health industry, health supplement market, iron ore market, and tin concentrate market, highlighting significant growth potential in health and supplements, low iron ore prices, and rising tin concentrate prices due to supply tightening [Big Health Industry](index=6&type=section&id=Big%20Health%20Industry) The "Big Health" industry maintains strong growth driven by policy support and consumption upgrades, with China's output value projected to reach **RMB 16 trillion by 2030** and significant increases in resident healthcare expenditure - The "Healthy China 2030" planning outline prioritizes health as a strategic development, with China's health industry output value expected to reach **RMB 16 trillion by 2030**[18](index=18&type=chunk) - In 2024, national per capita expenditure on medical care and health reached **RMB 2,547**, a **16.0% year-on-year increase**, reflecting stronger public health demand[18](index=18&type=chunk) [Health Supplement Market](index=7&type=section&id=Health%20Supplement%20Market) The global health supplement market continues to expand, with China as a key growth engine, projected to reach **RMB 320.71 billion by 2029**, still showing immense potential for per capita consumption growth Global and China Health Supplement Market Size (Billion CNY) | Market | 2024 Size | 2029 Projected Size | | :--- | :--- | :--- | | Global | 1,376.58 | 1,821.34 | | China | 260.22 | 320.71 | - China's health supplement market compound annual growth rate (2018-2023) was **6.9%**, higher than developed countries, but per capita consumption in 2023 was only **USD 405**, indicating huge future growth potential[19](index=19&type=chunk) [Iron Ore Market](index=8&type=section&id=Iron%20Ore%20Market) In H1 2025, the iron ore market saw an initial rise followed by a decline, influenced by supply tightness, concerns over China's production cuts, and US tariff policies, with average prices falling by approximately **USD 18/ton** compared to the same period last year - In H1 2025, the iron ore market showed an initial rise followed by a decline, with prices high at the beginning of the year due to supply tightness, then falling from March due to concerns over China's production cuts and high port inventories[20](index=20&type=chunk) - The average iron ore price in the first five months of this year was approximately **USD 18/ton lower** than the same period last year, leading some small and medium-sized mines with higher costs to reduce shipments[20](index=20&type=chunk) [Tin Concentrate Market](index=8&type=section&id=Tin%20Concentrate%20Market) China, the world's largest tin ore importer, has increased its reliance on imports due to tightening domestic supply, with significant import declines in 2024 and early 2025 driving up tin concentrate prices - China's reliance on tin ore imports continues to increase; imports fell sharply by **36.2% in 2024** due to a mining ban in Myanmar's Wa State, and further decreased by **over 50% year-on-year in the first two months of 2025**[21](index=21&type=chunk) - Driven by tightening supply, tin concentrate prices rose from **RMB 240,000/ton to a high of RMB 299,000/ton in March**[21](index=21&type=chunk) [Business and Operations Review](index=8&type=section&id=Business%20and%20Operations%20Review) In H1 2025, the Group suspended Ibam mine production due to low iron ore prices, but achieved significant revenue growth in its health supplement business, resulting in a profit for the period, while facing liquidity pressure and multiple legal disputes [Ibam Project Operations Update](index=8&type=section&id=Ibam%20Project%20Operations%20Update) The Ibam mine possesses abundant iron ore resources, but due to international iron ore prices falling significantly below mining costs in H1 2025, the company suspended all iron ore-related production and sales activities - The Ibam mine has mineral resources of approximately **151 million tons**, with an average total iron grade of **46.5%**, and an estimated mining period of **over 26 years**[22](index=22&type=chunk) - In H1 2025, due to international iron ore prices falling to approximately **USD 100 per dry ton**, far below mining and beneficiation costs, the company suspended all iron ore-related production and sales activities, with **zero thousand tons** produced[22](index=22&type=chunk) [Operating Results](index=8&type=section&id=Operating%20Results) The Group's revenue increased to **USD 8.42 million** in H1 2025, primarily due to expanded sales channels and increased customer numbers for health supplements and other products, successfully achieving a profit for the period Operating Results Overview (Thousand USD) | Metric | 2025 H1 | 2024 H1 | | :--- | :--- | :--- | | Revenue | 8,417 | 5,969 | | Cost of Sales | (7,285) | (4,986) | | Gross Profit | 1,132 | 983 | | Administrative and Other Expenses | (1,080) | (1,239) | | Finance Costs | (9,496) | (8,393) | | Profit (Loss) for the Period | 151 | (8,996) | - Sales revenue from health supplements and other products increased, mainly due to the expansion of plant stem cell sales channels and an increase in customer numbers[24](index=24&type=chunk) - A profit of approximately **USD 0.2 million** was recorded for the period, compared to a loss of approximately **USD 9.0 million** in the previous period, primarily due to the recognition of an interest waiver of approximately **USD 9.9 million** following an interest waiver agreement in April 2025[31](index=31&type=chunk) [Liquidity, Financial Resources, and Capital Structure](index=9&type=section&id=Liquidity%2C%20Financial%20Resources%2C%20and%20Capital%20Structure) As of June 30, 2025, the Group faced a capital deficit of approximately **USD 166.7 million**, a current ratio of **0.3**, and significant overdue borrowings, indicating substantial liquidity pressure Liquidity Position (Thousand USD) | Metric | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Capital Deficit | (166,662) | (167,490) | | Current Assets | 61,686 | 61,339 | | Current Liabilities | 244,234 | 243,874 | | Current Ratio | 0.3 | 0.3 | | Cash and Cash Equivalents | 91 | 248 | - As of June 30, 2025, approximately **USD 54.869 million** in principal borrowings and approximately **USD 21.022 million** in interest payable were overdue, and the company was in breach of borrowing terms and conditions[83](index=83&type=chunk) [Legal Proceedings](index=10&type=section&id=Legal%20Proceedings) The company and its controlling shareholder face multiple legal actions, including a **USD 60 million** claim from Industrial Bank against the company for the controlling shareholder's outstanding debt, and a statutory demand for **RMB 250.97 million** - Industrial Bank is claiming **USD 60,000,000** in principal and other incidental damages from the company due to the controlling shareholder Yutian's outstanding loans, as Yutian had assigned its shareholder loan rights to Industrial Bank[36](index=36&type=chunk)[85](index=85&type=chunk) - The company received a statutory demand for payment of an alleged debt of **RMB 250,974,633.21**, which the company denies and is seeking legal advice on[86](index=86&type=chunk)[87](index=87&type=chunk) [Employees and Remuneration Policy](index=10&type=section&id=Employees%20and%20Remuneration%20Policy) As of June 30, 2025, the Group employed **50 staff**, with slightly reduced staff costs, and remuneration policies aligned with market practices and individual performance - As of June 30, 2025, the Group employed **50 staff**, an increase from **47 staff** as of December 31, 2024[38](index=38&type=chunk) - Total staff costs (including directors' emoluments) for the period were approximately **USD 0.6 million**, a slight decrease, with remuneration policies aligned with market practices and determined based on individual performance and experience[38](index=38&type=chunk) Other Information [Ibam Mine Resources and Reserves Information under JORC Code as of June 30, 2025](index=11&type=section&id=Ibam%20Mine%20Resources%20and%20Reserves%20Information%20under%20JORC%20Code%20as%20of%20June%2030%2C%202025) As of June 30, 2025, the Ibam mine, under JORC Code, holds a total mineral resource of **144 million tons** (average iron grade **46.6%**) and a probable ore reserve of **102 million tons** (average iron grade **44.6%**) Ibam Mine Mineral Resources (Iron Grade >= 35%) | Category | Reserves (Million Tons) | Iron Grade (%) | | :--- | :--- | :--- | | Measured | 102 | 46.7 | | Inferred | 42 | 46.6 | | Total | 144 | 46.6 | Ibam Mine Ore Reserves (Iron Grade >= 35%) | Category | Reserves (Million Tons) | Iron Grade (%) | | :--- | :--- | :--- | | Probable | 102 | 44.6 | [Mining Production Activities and Capital Expenditures](index=11&type=section&id=Mining%20Production%20Activities%20and%20Capital%20Expenditures) Mining production activities were zero during the period, with no significant capital expenditures for the purchase or upgrade of property, plant, and equipment - Mining volume and production volume were both **zero tons** for the period, consistent with the previous period[43](index=43&type=chunk) - The company made no significant capital expenditures for the purchase or upgrade of property, plant, and equipment or prepayments during the period[44](index=44&type=chunk) [Corporate Governance and Board Committees](index=12&type=section&id=Corporate%20Governance%20and%20Board%20Committees) The company is committed to good corporate governance, complying with listing rules, and has established audit, remuneration, and nomination committees to ensure transparent board operations and independence - The company has complied with the code provisions set out in Appendix C1 "Corporate Governance Code" and "Corporate Governance Report" of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited[48](index=48&type=chunk) - All directors confirmed compliance with the required standards set out in the "Model Code for Securities Transactions by Directors of Listed Issuers"[49](index=49&type=chunk) [Audit Committee](index=12&type=section&id=Audit%20Committee) The Audit Committee is responsible for reviewing and overseeing the Group's financial reporting process, internal controls, and risk management systems, and has reviewed the unaudited interim results for the period - The primary responsibilities of the Audit Committee are to review and oversee the Group's financial reporting process, internal control and risk management systems, and to provide recommendations to the Board on the appointment of independent auditors[50](index=50&type=chunk) - The Audit Committee has reviewed the accounting principles and practices adopted by the Group and discussed internal controls and financial reporting matters with management, including reviewing the unaudited interim results for the period[50](index=50&type=chunk) [Remuneration Committee](index=13&type=section&id=Remuneration%20Committee) The Remuneration Committee is responsible for recommending remuneration policies and structures, and approving the remuneration packages for all directors and senior management, ensuring transparency and alignment with company and individual performance - The Remuneration Committee comprises two independent non-executive directors and one executive director, with responsibilities including recommending remuneration policies and structures and approving remuneration packages for directors and senior management[52](index=52&type=chunk) - The Remuneration Committee held one meeting during the period to review and discuss the remuneration packages of management and directors to enhance the Group's management quality[53](index=53&type=chunk) [Nomination Committee](index=13&type=section&id=Nomination%20Committee) The Nomination Committee is responsible for identifying and recommending suitable candidates for directorships, evaluating the board structure, and formulating nomination policies to ensure the independence of board members - The Nomination Committee comprises one executive director and two independent non-executive directors, with primary responsibilities including identifying and recommending suitable candidates for directorships to the Board, and evaluating the structure and composition of the Board[54](index=54&type=chunk) - The Nomination Committee held one meeting during the period, and all independent non-executive directors confirmed their independence[54](index=54&type=chunk)[55](index=55&type=chunk) [Directors' and Major Shareholders' Interests](index=14&type=section&id=Directors%27%20and%20Major%20Shareholders%27%20Interests) As of June 30, 2025, Director Mr. Ng Khing Yeu held **7.52%** of the company's shares through a controlled corporation, while major shareholder Yutian and its associates held **50.18%**, involving multiple share pledges Directors' Long Positions in the Company's Shares (June 30, 2025) | Director Name | Nature of Interest | Number of Ordinary Shares | Approximate % of Issued Share Capital | | :--- | :--- | :--- | :--- | | Ng Khing Yeu | Interest in controlled corporation | 112,827,000 (L) | 7.52% | Major Shareholders' Long Positions in the Company's Shares (June 30, 2025) | Major Shareholder | Capacity/Nature of Interest | Number of Shares | Approximate % of Shareholding | | :--- | :--- | :--- | :--- | | Yutian | Beneficial owner | 752,750,000 (L) | 50.18% | | Li Yang | Interest in controlled corporation | 752,750,000 (L) | 50.18% | | Ample Professional Limited | Interest in share charge | 752,000,000 (L) | 50.13% | | Hua Heng | Beneficial owner | 100,575,000 (L) | 6.71% | | Grace Era | Beneficial owner | 112,827,000 (L) | 7.52% | | Sichuan Chuanjiu Group International Trade Co., Ltd. | Beneficial owner | 91,000,000 (L) | 6.07% | - Yutian has pledged **752,000,000 shares** (approximately **50.13%** of the company's issued share capital) to an independent third-party institution[63](index=63&type=chunk) [Interim Dividend and Financial Information Review](index=17&type=section&id=Interim%20Dividend%20and%20Financial%20Information%20Review) The Board resolved not to declare any interim dividend for the period, and the condensed consolidated financial statements in this interim report have not been audited or reviewed by the company's auditors - The Board resolved not to declare any interim dividend for the period (H1 2024: None)[66](index=66&type=chunk) - The financial information in the condensed consolidated financial statements of the interim report has not been audited or reviewed by the company's auditors[67](index=67&type=chunk) Interim Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income [Interim Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=18&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For the six months ended June 30, 2025, the Group's revenue increased to **USD 8.417 million**, gross profit was **USD 1.132 million**, and a profit of **USD 151 thousand** was achieved for the period, a significant improvement from the loss in the prior year Interim Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (Thousand USD) | Metric | 2025 H1 | 2024 H1 | | :--- | :--- | :--- | | Revenue | 8,417 | 5,969 | | Cost of Sales | (7,285) | (4,986) | | Gross Profit | 1,132 | 983 | | Other Income and Gains | 9,882 | 49 | | Administrative and Other Expenses | (1,080) | (1,239) | | Finance Costs | (9,496) | (8,393) | | Profit (Loss) for the Period | 151 | (8,996) | | Basic and Diluted Earnings (Loss) Per Share (US Cents) | 0.01 | (0.60) | - Other income and gains for the period significantly increased to **USD 9,882 thousand**, primarily due to an interest waiver gain of **USD 9,881 thousand**[69](index=69&type=chunk)[104](index=104&type=chunk) Interim Condensed Consolidated Statement of Financial Position [Interim Condensed Consolidated Statement of Financial Position](index=19&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the Group's total assets were **USD 81.134 million**, total liabilities were **USD 247.796 million**, resulting in a capital deficit of **USD 166.662 million** and net current liabilities of **USD 182.548 million** Interim Condensed Consolidated Statement of Financial Position (Thousand USD) | Metric | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Total Non-current Assets | 19,448 | 18,464 | | Total Current Assets | 61,686 | 61,339 | | Total Current Liabilities | 244,234 | 243,874 | | Net Current Liabilities | (182,548) | (182,535) | | Total Non-current Liabilities | 3,562 | 3,419 | | Capital Deficit | (166,662) | (167,490) | - Current assets primarily include **trade receivables of USD 59,260 thousand**, while current liabilities mainly comprise **notes of USD 85,090 thousand**, **bank and other borrowings of USD 55,019 thousand**, and **amounts due to ultimate holding company of USD 60,000 thousand**[71](index=71&type=chunk) Interim Condensed Consolidated Statement of Changes in Equity [Interim Condensed Consolidated Statement of Changes in Equity](index=20&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) For the six months ended June 30, 2025, the Group's capital deficit slightly narrowed, primarily due to the positive impact of profit for the period and exchange fluctuation reserve, despite a decrease in non-controlling interests Interim Condensed Consolidated Statement of Changes in Equity (Thousand USD) | Item | Jan 1, 2025 (Audited) | Profit (Loss) for the Period | Exchange Differences | Transfer to Statutory Reserve | June 30, 2025 (Unaudited) | | :--- | :--- | :--- | :--- | :--- | :--- | | Equity attributable to owners of the Company | (167,396) | 211 | 677 | – | (166,508) | | Non-controlling interests | (94) | (60) | – | – | (154) | | Capital Deficit | (167,490) | 151 | 677 | – | (166,662) | - Total comprehensive income for the period was **USD 828 thousand**, primarily contributed by **USD 888 thousand** attributable to owners of the parent company, which includes exchange differences of **USD 677 thousand** arising from the translation of financial statements from functional currency to presentation currency[72](index=72&type=chunk) Interim Condensed Consolidated Statement of Cash Flows [Interim Condensed Consolidated Statement of Cash Flows](index=22&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) For the six months ended June 30, 2025, the Group's net cash used in operating activities was **USD 76 thousand**, and net cash used in financing activities was **USD 82 thousand**, leading to a decrease in cash and cash equivalents to **USD 91 thousand** at period-end Interim Condensed Consolidated Statement of Cash Flows (Thousand USD) | Activity | 2025 H1 | 2024 H1 | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | (76) | (199) | | Net Cash Used in Investing Activities | – | (2) | | Net Cash (Used in) Generated from Financing Activities | (82) | 313 | | Net (Decrease) / Increase in Cash and Cash Equivalents | (158) | 112 | | Cash and Cash Equivalents at End of Period | 91 | 242 | - Cash and cash equivalents at the end of the period decreased from **USD 248 thousand** at the beginning of the period to **USD 91 thousand**, reflecting pressure from cash outflows during the period[80](index=80&type=chunk) Notes to the Interim Condensed Consolidated Financial Statements [General Information and Basis of Preparation](index=23&type=section&id=General%20Information%20and%20Basis%20of%20Preparation) The Group's financial statements are prepared in accordance with IAS 34, but face significant going concern uncertainties, including substantial overdue borrowings, legal proceedings, and a capital deficit, with management implementing measures to mitigate liquidity pressure - The company is an investment holding company primarily engaged in iron ore product mining, ore beneficiation, sales of iron ore, other commodities, and health products[81](index=81&type=chunk) - As of June 30, 2025, the Group's amounts due to ultimate holding company, bank and other borrowings, and guaranteed notes totaled approximately **USD 200,109,000**, while cash and cash equivalents were only approximately **USD 91,000**[83](index=83&type=chunk) - The Group faces multiple legal proceedings and cross-default risks, including a **USD 60,000,000** claim from Industrial Bank and a statutory demand for **RMB 250,974,633.21**[85](index=85&type=chunk)[86](index=86&type=chunk) - Management has taken measures, including the ultimate holding company agreeing not to demand repayment of **USD 60,000,000**, actively negotiating borrowing renewals and extensions, seeking debt restructuring and strategic investors, and controlling costs while expanding revenue sources[88](index=88&type=chunk) [Revenue and Segment Information](index=26&type=section&id=Revenue%20and%20Segment%20Information) In H1 2025, the Group's revenue primarily derived from health products and other product sales, all recognized at a point in time in the Chinese market. Segment results show health product trading contributed the main revenue and profit, while iron ore mining and commercial trading segments recorded losses Revenue from Contracts with Customers by Category (Thousand USD) | Product Category | 2025 H1 | 2024 H1 | | :--- | :--- | :--- | | Sales of health products | 8,288 | 5,969 | | Sales of other products | 129 | – | | Total | 8,417 | 5,969 | - All revenue is recognized at a point in time and entirely from the People's Republic of China market[93](index=93&type=chunk) Segment Revenue and Results (H1 2025, Thousand USD) | Segment | Segment Revenue | Segment (Loss) Profit | | :--- | :--- | :--- | | Iron ore mining and beneficiation business | – | (9) | | Commercial trading | – | (1,734) | | Health product trading | 8,288 | 235 | | Others | 129 | 11 | | Total | 8,417 | (1,497) | Segment Assets and Liabilities (June 30, 2025, Thousand USD) | Segment | Total Segment Assets | Total Segment Liabilities | | :--- | :--- | :--- | | Iron ore mining and beneficiation business | 12,895 | 739 | | Commercial trading | 51,294 | 186,570 | | Health product trading | 10,260 | 8,482 | | Others | 104 | 11 | | Total | 74,553 | 195,802 | [Finance Costs and Income Tax Expense](index=31&type=section&id=Finance%20Costs%20and%20Income%20Tax%20Expense) In H1 2025, finance costs increased to **USD 9.496 million**, primarily from notes interest, while income tax expense remained stable, mainly comprising China corporate income tax Finance Costs (Thousand USD) | Item | 2025 H1 | 2024 H1 | | :--- | :--- | :--- | | Interest on bank borrowings | 1,733 | 1,743 | | Interest on other borrowings | 259 | 460 | | Interest on notes | 7,504 | 6,190 | | Total | 9,496 | 8,393 | - Income tax expense primarily consists of China corporate income tax, amounting to **USD 17 thousand** in H1 2025, largely consistent with H1 2024[103](index=103&type=chunk) [Profit (Loss) for the Period and Earnings (Loss) Per Share](index=33&type=section&id=Profit%20(Loss)%20for%20the%20Period%20and%20Earnings%20(Loss)%20Per%20Share) The Group achieved a profit of **USD 151 thousand** in H1 2025, mainly due to an interest waiver gain of **USD 9.881 million**, with basic and diluted earnings per share of **0.01 US cents** - Profit (loss) for the period was achieved after deducting (including) an interest waiver gain of **USD 9,881 thousand**[104](index=104&type=chunk) Earnings (Loss) Per Share | Metric | 2025 H1 | 2024 H1 | | :--- | :--- | :--- | | Profit (Loss) for calculating basic and diluted earnings (loss) per share (Thousand USD) | 211 | (8,966) | | Weighted average number of ordinary shares (Thousand Shares) | 1,500,000 | 1,500,000 | | Basic and diluted earnings (loss) per share (US Cents) | 0.01 | (0.60) | [Trade Receivables and Payables](index=34&type=section&id=Trade%20Receivables%20and%20Payables) As of June 30, 2025, total trade receivables were **USD 59.260 million**, with the majority overdue by more than **365 days**; total trade payables were **USD 6.895 million**, with a significant increase in those overdue by more than **365 days** Ageing Analysis of Trade Receivables (Thousand USD) | Ageing | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Within 30 days | 233 | 1,858 | | Over 365 days | 56,946 | 56,514 | | Total | 59,260 | 59,239 | Ageing Analysis of Trade Payables (Thousand USD) | Ageing | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Within 90 days | 468 | 1,685 | | Over 365 days | 4,945 | – | | Total | 6,895 | 6,634 | [Bank and Other Borrowings](index=36&type=section&id=Bank%20and%20Other%20Borrowings) As of June 30, 2025, the Group's total bank and other borrowings amounted to **USD 55.019 million**, with most repayable within one year or on demand, and some overdue. During the period, the company reached an interest waiver agreement with lenders, waiving approximately **USD 9.881 million** in accrued interest Bank and Other Borrowings (Thousand USD) | Item | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Bank borrowings | 36,683 | 36,752 | | Other borrowings | 18,336 | 18,336 | | Total | 55,019 | 55,088 | | Repayable within one year or on demand | 55,019 | 55,031 | - Bank loans carry floating interest rates ranging from **7.31% to 8.66% per annum**, partly secured by trade receivables and guaranteed by the company and directors[113](index=113&type=chunk) - On April 8, 2025, the company entered into an interest waiver agreement with relevant lenders, waiving approximately **USD 9,881,000** in accrued interest, with no further interest accruing from that date[115](index=115&type=chunk) [Notes](index=38&type=section&id=Notes) As of June 30, 2025, the Group's total notes amounted to **USD 85.090 million**, all classified as current liabilities, including Note 1 and Note 2, both involving multiple renegotiations of terms and guarantee arrangements Notes Overview (Thousand USD) | Item | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Note 1 | 67,090 | 60,172 | | Note 2 | 18,000 | 18,000 | | Total | 85,090 | 78,172 | | Current Liabilities | 85,090 | 78,172 | [Note 1](index=38&type=section&id=Note%201) Note 1 has a principal amount of approximately **USD 21.27 million**, originally with an annual interest rate of **12%**, and has undergone multiple redemption date extensions and term renegotiations, including interest accruing at the original annual rate plus **10%**, and a waiver of the debt-to-equity ratio condition - Note 1 has a principal amount of approximately **USD 21,270,000**, with an original annual interest rate of **12%**, payable quarterly[116](index=116&type=chunk) - The final redemption date of Note 1 was extended multiple times, from March 19, 2018, to June 30, 2019, with interest accruing at the original annual rate plus **10%**[119](index=119&type=chunk)[121](index=121&type=chunk) - The holder of Note 1 agreed to waive the condition regarding the company's debt-to-equity ratio exceeding a specified proportion and agreed to the sale of **9.12%** of Pacific Mining's issued shares[122](index=122&type=chunk)[123](index=123&type=chunk) [Note 2](index=41&type=section&id=Note%202) Note 2 has a principal amount of **USD 20.0 million** with a fixed interest rate of **7%**, guaranteed by Yutian and Mr. Li, and secured by **172,352,000** of the company's shares - Note 2 has a principal amount of **USD 20,000,000**, with a fixed interest rate of **7%**, maturing two years from the issue date[123](index=123&type=chunk) - Note 2 is guaranteed by Yutian and Mr. Li and secured by a total of **172,352,000** of the company's shares[125](index=125&type=chunk) - As of June 30, 2025, accrued interest on Note 2, recognized as interest payable, was approximately **USD 7,899,000**[125](index=125&type=chunk) [Share Capital and Related Party Transactions](index=42&type=section&id=Share%20Capital%20and%20Related%20Party%20Transactions) The company's authorized share capital is **3,000,000 thousand shares**, with **1,500,000 thousand shares** issued and fully paid. Several bank financings and notes are guaranteed by Director Mr. Li and the ultimate holding company Yutian, constituting significant related party transactions Share Capital Structure (Thousand Shares/Thousand USD) | Item | Number of Shares (Thousand Shares) | Share Capital (Thousand USD) | | :--- | :--- | :--- | | Authorized share capital | 3,000,000 | 3,867 | | Issued and fully paid share capital | 1,500,000 | 1,934 | - Director Mr. Li provides guarantees for the Group's bank financings and, together with the ultimate holding company Yutian, guarantees the Group's issued **12%** senior secured notes and **7%** fixed-rate coupon secured notes[127](index=127&type=chunk) - Remuneration for key management personnel in H1 2025 was **USD 44 thousand**, a decrease from **USD 120 thousand** in H1 2024[128](index=128&type=chunk)

Wuhan Dazhong Dental Medical Co., Ltd. 武漢大眾口腔醫療股份有限公司 香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不負責，對其準確性 或完整性亦不發表任何聲明，並明確表示概不會就本公告全部或任何部分內容而產生或因倚賴 該等內容而引致的任何損失承擔任何責任。 （於中華人民共和國註冊成立的股份有限公司） （股份代號：2651） 截至2025年6月30日止六個月的中期業績公告 武漢大眾口腔醫療股份有限公司（「本公司」）董事會（「董事會」）欣然宣佈本公司 及其附屬公司（統稱「本集團」）截至2025年6月30日止六個月的未經審核綜合財務 業績。本公告包含本集團截至2025年6月30日止六個月的中期報告全文，其內容 是根據香港聯合交易所有限公司（「聯交所」）證券上市規則的相關披露要求編製。 董事會及本公司審核委員會已審閱本集團的未經審核綜合財務業績。本業績公告 於本公司網站( www.chinadzyl.com )及聯交所網站( www.hkexnews.hk )發佈。本公 司將按本公司H股股東選擇收取公司通訊的方式向其寄發截至2025年6月30日止 六個月的中期 ...

Section I Definitions [Company Entities and Group Definitions](index=4&type=section&id=%E5%85%AC%E5%8F%B8%E5%AF%A6%E9%AB%94%E5%8F%8A%E9%9B%86%E5%9C%98%E5%AE%9A%E7%BE%A9) This section defines the company entities and group relationships, clarifying 'China Shenhua' as China Shenhua Energy Company Limited, 'the Group' as the Company and its subsidiaries, and 'China Energy Group' as China Energy Investment Group Co., Ltd - China Shenhua/the Company refers to China Shenhua Energy Company Limited[9](index=9&type=chunk) - The Group refers to the Company and its subsidiaries[9](index=9&type=chunk) - China Energy Group refers to China Energy Investment Group Co., Ltd[9](index=9&type=chunk) [Financial and Industry Terminology](index=6&type=section&id=%E8%B2%A1%E5%8B%99%E5%8F%8A%E8%A1%8C%E6%A5%AD%E8%A1%93%E8%AA%9E) This section explains key financial indicators and industry terms, including EBITDA, asset-liability ratio, and reporting period definition, to ensure a unified understanding of financial data and industry analysis - Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) is calculated as: **profit for the period + net finance costs + income tax + depreciation and amortization – share of profits and losses of associates**[12](index=12&type=chunk) - The asset-liability ratio is defined as **total liabilities divided by total assets**[12](index=12&type=chunk) - The reporting period refers to **January to June 2025**[12](index=12&type=chunk) Section II Company Profile and Key Financial Indicators [Company Basic Information](index=7&type=section&id=%E5%85%AC%E5%8F%B8%E5%9F%BA%E6%9C%AC%E4%BF%A1%E6%81%AF) This section provides the company's basic registration, contact, and disclosure information, stock overview, and updates on legal representative changes and auditor details - Mr. Lü Zhiren, the company's legal representative, resigned as Chairman and Executive Director on **March 24, 2025**, with the selection of a new chairman underway[14](index=14&type=chunk) - The company's A-shares are listed on the Shanghai Stock Exchange (stock code **601088**), and H-shares on The Stock Exchange of Hong Kong Limited (stock code **01088**)[17](index=17&type=chunk) - The company appointed **KPMG Huazhen LLP (A-shares)** and **KPMG (H-shares)** as its auditors[18](index=18&type=chunk) [Company Key Accounting Data and Financial Indicators](index=9&type=section&id=%E5%85%AC%E5%8F%B8%E4%B8%BB%E8%A6%81%E6%9C%83%E8%A8%88%E6%95%B8%E6%93%9A%E5%92%8C%E8%B2%A1%E5%8B%99%E6%8C%87%E6%A8%99) This section presents the company's key accounting data and financial indicators for H1 2025, showing declining revenue, profit, and EPS, and increasing total liabilities and asset-liability ratio compared to H1 2024 restated data Key Accounting Data and Financial Indicators for H1 2025 (vs. H1 2024 Restated) | Indicator | H1 2025 (million yuan) | H1 2024 (Restated, million yuan) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 138,109 | 169,121 | (18.3) | | Profit for the period | 32,059 | 36,983 | (13.3) | | Profit attributable to owners of the Company for the period | 26,706 | 31,356 | (14.8) | | Basic earnings per share (yuan/share) | 1.344 | 1.578 | (14.8) | | Net cash inflow from operating activities | 45,794 | 51,890 | (11.7) | | Total assets (at period-end) | 686,068 | 671,639 | 2.1 | | Total liabilities (at period-end) | 212,433 | 171,377 | 24.0 | | Total equity (at period-end) | 473,635 | 500,262 | (5.3) | | Asset-liability ratio (%) | 31.0 | 25.5 | Increased by 5.5 percentage points | [Explanation of Differences in Domestic and International Accounting Standards](index=10&type=section&id=%E5%A2%83%E5%85%A7%E5%A4%96%E6%9C%83%E8%A8%88%E6%BA%96%E5%89%87%E5%B7%AE%E7%95%B0%E8%AA%AA%E6%98%8E) This section explains the retrospective adjustment of comparative consolidated financial statements due to the Hangjin Energy acquisition and details key differences between Chinese Enterprise Accounting Standards and IFRS regarding maintenance and safety production expenses - The company completed the acquisition of **100% equity in Hangjin Energy on February 11, 2025**, which is a business combination under common control, leading to retrospective adjustments to comparative consolidated financial statements[21](index=21&type=chunk) - Differences in domestic and international accounting standards primarily concern the recognition and treatment of maintenance, safety production, and similar expenses; Chinese Enterprise Accounting Standards record them as current expenses and special reserves, while IFRS recognizes them as expenses or capital expenditures with depreciation upon occurrence[23](index=23&type=chunk) Section III Chairman's Statement [H1 Operating Overview and Highlights](index=11&type=section&id=%E4%B8%8A%E5%8D%8A%E5%B9%B4%E7%B6%93%E7%87%9F%E6%A6%82%E6%B3%81%E8%88%87%E4%BA%AE%E9%BB%9E) In H1 2025, despite downward pressure on coal and power prices, the company maintained stable operations, achieving a market capitalization of **762.3 billion yuan**, accelerating key project construction, adding **215 MW** of renewable energy, completing the Hangjin Energy acquisition, increasing shareholder dividends, and retaining its top brand value ranking among energy and chemical listed companies - As of end-June 2025, the company's comprehensive market capitalization reached **762.3 billion yuan**, with A-share and H-share prices outperforming major industry indices[24](index=24&type=chunk) - The Xinjie No. 1 and No. 2 Mine projects completed pre-commencement procedures in **6 months**, setting a new record for the shortest time for local coal mine construction projects[26](index=26&type=chunk) - An additional **215 MW** of commercially operational renewable energy power generation projects were added, and the new energy industry investment fund and green low-carbon development investment fund initiated by the company are operating stably[26](index=26&type=chunk) - The acquisition of Hangjin Energy equity was successfully completed, and a new round of capital injection is actively being promoted to further enhance energy supply capacity and synergistic operational efficiency[28](index=28&type=chunk) - A final dividend of **2.26 yuan per share (tax inclusive)** for 2024 was distributed, and the minimum annual dividend payout ratio for 2025-2027 was increased to **65% of net profit attributable to shareholders of the Company**[28](index=28&type=chunk) - The company was again selected for the '2025 China Brand Value Evaluation Information' list, with a brand value of **232.156 billion yuan**, retaining its top position among energy and chemical listed companies[29](index=29&type=chunk) [H2 Outlook and Strategic Priorities](index=12&type=section&id=%E4%B8%8B%E5%8D%8A%E5%B9%B4%E5%B1%95%E6%9C%9B%E8%88%87%E6%88%B0%E7%95%A5%E9%87%8D%E9%BB%9E) For H2, the company will focus on 'stable operations, innovation, optimized investment, strengthened management, and safety assurance' to address external uncertainties, promote high-quality development, and achieve annual targets, emphasizing energy supply, green development, innovation, management improvement, and risk prevention - The H2 work priorities are 'stable operations, innovation, optimized investment, strengthened management, and safety assurance,' with full efforts to achieve all annual targets[31](index=31&type=chunk) - Ensure energy supply and deepen operational efficiency, guaranteeing stable coal production and supply, and reliable electricity and heat supply[31](index=31&type=chunk) - Focus on green development and optimize coal-based industries, strengthening clean and efficient coal utilization, and vigorously developing green mines, low-carbon coal power, high-end chemicals, and green logistics[31](index=31&type=chunk) - Prioritize planning and emphasize innovation leadership, promoting deep integration of technological and industrial innovation to cultivate and develop new quality productive forces in the energy sector[31](index=31&type=chunk) - Strengthen benchmarking analysis and enhance operational capabilities, comprehensively improving value creation and achieving continuous improvement in operational quality and efficiency[32](index=32&type=chunk) - Build a strong safety defense line and prevent and mitigate risks, continuously deepening the three-year action plan for fundamental improvements and strengthening risk compliance and safety awareness[32](index=32&type=chunk) [H1 2025 Operating Data Overview](index=14&type=section&id=2025%E5%B9%B4%E4%B8%8A%E5%8D%8A%E5%B9%B4%E9%81%8B%E7%87%9F%E6%95%B8%E6%93%9A%E6%A6%82%E8%A7%88) This section provides key operating data for H1 2025, including commercial coal production, sales, power generation, transportation turnover, and coal chemical product sales, comparing them to annual targets and prior-year data, showing some declines but growth in coal chemical product sales H1 2025 Operating Targets and Completion Status | Indicator | Unit | 2025 Target | H1 2025 Completion | Completion Ratio (%) | | :--- | :--- | :--- | :--- | :--- | | Commercial coal production | hundred million tons | 3.348 | 1.654 | 49.4 | | Coal sales volume | hundred million tons | 4.659 | 2.049 | 44.0 | | Power generation | billion kWh | 2,271 | 987.8 | 43.5 | | Revenue | billion yuan | 3,200 | 1,381.09 | 43.2 | | Operating costs | billion yuan | 2,300 | 943.74 | 41.0 | | Change in self-produced coal unit production cost | ╱ | Approx. 6% YoY increase | 3.9% YoY decrease | ╱ | H1 2025 Operating Data (vs. H1 2024 Restated) | Indicator | H1 2025 | H1 2024 (Restated) | Change (%) | | :--- | :--- | :--- | :--- | | Commercial coal production (million tons) | 165.4 | 168.2 | (1.7) | | Coal sales volume (million tons) | 204.9 | 230.0 | (10.9) | | Self-owned railway transportation turnover (billion ton-kilometers) | 152.8 | 161.4 | (5.3) | | Huanghua Port loading volume (million tons) | 107.6 | 110.0 | (2.2) | | Total power generation (billion kWh) | 98.78 | 106.65 | (7.4) | | Polyethylene sales volume (thousand tons) | 184.0 | 148.2 | 24.2 | | Polypropylene sales volume (thousand tons) | 170.6 | 139.2 | 22.6 | Section IV Management Discussion and Analysis [Industry and Principal Business Overview During the Reporting Period](index=16&type=section&id=%E5%A0%B1%E5%91%8A%E6%9C%9F%E5%85%A7%E5%85%AC%E5%8F%B8%E6%89%80%E5%B1%AC%E8%A1%8C%E6%A5%AD%E5%8F%8A%E4%B8%BB%E7%87%9F%E6%A5%AD%E5%8B%99%E6%83%85%E6%B3%81%E8%AA%AA%E6%98%8E) This section outlines China's H1 2025 macroeconomic, coal, and power market environments with an H2 outlook, detailing the company's principal businesses in coal, power production and sales, related transportation, and coal chemical operations, leveraging its unique integrated business model, abundant coal resources, and advanced technology - In H1 2025, China's GDP grew by **5.3% year-on-year**, with the economy maintaining overall stable and positive momentum[48](index=48&type=chunk) - In H1, China's thermal coal price center declined, with the average transaction price of **5,500 kcal thermal coal at Qinhuangdao Port decreasing by approximately 22.2% year-on-year**[49](index=49&type=chunk) - In H1, national raw coal output from industrial enterprises above designated size was **2.40 billion tons**, a **5.4% year-on-year increase**; coal imports were **220 million tons**, a **11.1% year-on-year decrease**[50](index=50&type=chunk)[52](index=52&type=chunk) - In H1, total electricity consumption increased by **3.7% year-on-year**, thermal power generation decreased by **2.4%**, while wind, solar, and nuclear power generation increased by **10.6%, 20.0%, and 11.3% year-on-year**, respectively[55](index=55&type=chunk) - As of June 2025, national power generation installed capacity reached **3.65 billion kW**, a **18.7% year-on-year increase**, with wind and solar power accounting for **260 million kW** of new installed capacity, representing **89.9% of the total new capacity**[56](index=56&type=chunk) - The company's principal businesses include coal and power production and sales, railway, port, and shipping transportation, and coal-to-olefin operations, adopting an integrated business model encompassing coal, power generation, railway, port, shipping, and coal chemical industries[61](index=61&type=chunk) [Discussion and Analysis of Operating Performance](index=21&type=section&id=%E7%B6%93%E7%87%9F%E6%83%85%E6%B3%81%E7%9A%84%E8%A8%8E%E8%AB%96%E8%88%87%E5%88%86%E6%9E%90) In H1 2025, despite downward pressure on coal and power prices, the company achieved **138,109 million yuan** in revenue, a **18.3% year-on-year decrease**, and **26,706 million yuan** in profit attributable to owners of the Company, a **14.8% year-on-year decrease**, with overall performance exceeding expectations and improving quality and efficiency H1 2025 Key Financial Performance (vs. H1 2024 Restated) | Indicator | H1 2025 (million yuan) | H1 2024 (Restated, million yuan) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 138,109 | 169,121 | (18.3) | | Profit before tax | 40,013 | 44,971 | (11.0) | | Profit attributable to owners of the Company for the period | 26,706 | 31,356 | (14.8) | | Basic earnings per share (yuan/share) | 1.344 | 1.578 | (14.8) | - The company's commercial coal production, coal sales, power generation, revenue, operating costs, selling, general and administrative expenses, R&D expenses, and net finance costs all achieved **41.0% to 49.4% of their annual targets** in H1 2025[64](index=64&type=chunk) - The unit production cost of self-produced coal decreased by **3.9% year-on-year**, outperforming the target of approximately **6% year-on-year increase**[64](index=64&type=chunk) [Analysis of Core Competencies During the Reporting Period](index=22&type=section&id=%E5%A0%B1%E5%91%8A%E6%9C%9F%E5%85%A7%E6%A0%B8%E5%BF%83%E7%AB%B6%E7%88%AD%E5%8A%9B%E5%88%86%E6%9E%90) During the reporting period, the company's core competencies remained unchanged, primarily in its vertically integrated coal-power-rail-port-shipping-chemical business model, abundant coal resources, professional management team, and leading technological innovation in green coal mining, clean coal-fired power, heavy-haul rail, and smart port operations - The Group's core competitiveness is primarily reflected in its **vertically integrated coal-power-rail-port-shipping-chemical business model**[67](index=67&type=chunk) - The Group possesses **high-quality and abundant coal resources**[67](index=67&type=chunk) - The Group has a **management team focused on its core business and advanced operating philosophies**[67](index=67&type=chunk) - The Group possesses **domestically and internationally leading industrial technology and scientific innovation capabilities** in green coal mining, clean coal-fired power generation, heavy-haul railway transportation, and smart port operations[67](index=67&type=chunk) [Key Operating Performance During the Reporting Period](index=22&type=section&id=%E5%A0%B1%E5%91%8A%E6%9C%9F%E5%85%A7%E4%B8%BB%E8%A6%81%E7%B6%93%E7%87%9F%E6%83%85%E6%B3%81) This section details the reasons for changes in key items of the company's H1 2025 consolidated income statement and cash flow statement, with revenue decline primarily due to falling coal and power sales volume and price, operating costs decreased due to reduced purchased coal, raw material, fuel, and transportation expenses; net cash outflow from investing activities significantly decreased, while net cash outflow from financing activities substantially increased Changes in Key Items of Consolidated Income Statement and Other Comprehensive Income (H1 2025 vs. H1 2024) | Item | H1 2025 (million yuan) | H1 2024 (Restated, million yuan) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 138,109 | 169,121 | (18.3) | | Operating costs | (94,374) | (118,908) | (20.6) | | Research and development expenses | (727) | (981) | (25.9) | | Other gains and losses | 408 | (147) | (377.6) | | Net cash inflow from operating activities | 45,794 | 51,890 | (11.7) | | Net cash outflow from investing activities | (19,557) | (44,051) | (55.6) | | Net cash outflow from financing activities | (12,833) | (2,403) | 434.0 | - Revenue decreased by **18.3% year-on-year**, primarily due to a **10.9% decrease in coal sales volume**, a **12.9% decrease in average coal sales price**, a **7.3% decrease in power sales volume**, and a **4.2% decrease in average power sales price**[70](index=70&type=chunk)[71](index=71&type=chunk) - Operating costs decreased by **20.6% year-on-year**, mainly due to lower sales volume and purchase prices of outsourced coal, decreased power sales volume and lower coal purchase prices, reduced repair and maintenance expenses, decreased transportation costs, lower taxes and surcharges, and other cost reductions[76](index=76&type=chunk) - Net cash outflow from investing activities decreased by **55.6% year-on-year**, primarily due to higher recovery of structured deposit products in the reporting period and a larger increase in term deposits by the Group in the prior year period[79](index=79&type=chunk) - Net cash outflow from financing activities increased by **434.0% year-on-year**, mainly due to a higher volume of debt repayments by the Group during the reporting period[79](index=79&type=chunk) - R&D investment in H1 2025 was **1,213 million yuan**, a **9.3% year-on-year decrease**, primarily allocated to smart mine construction, research on key technologies for efficient low-carbon thermal power and diversified integrated energy supply, and smart power plant construction[80](index=80&type=chunk) [Analysis of Assets and Liabilities](index=29&type=section&id=%E8%B3%87%E7%94%A2%E3%80%81%E8%B2%A0%E5%82%B5%E6%83%85%E6%B3%81%E5%88%86%E6%9E%90) As of June 30, 2025, the company's total assets were **686,068 million yuan**, and total liabilities were **212,433 million yuan**, with increases in construction in progress, inventories, accounts receivable, and cash equivalents, while financial assets at fair value and short-term borrowings significantly decreased; liabilities saw a substantial increase in accrued expenses and other payables, mainly due to dividends payable and employee wages Changes in Key Items of Consolidated Statement of Financial Position (June 30, 2025 vs. December 31, 2024) | Item | June 30, 2025 (million yuan) | December 31, 2024 (Restated, million yuan) | Change (%) | Main Reasons for Change | | :--- | :--- | :--- | :--- | :--- | | Construction in progress | 35,918 | 27,899 | 28.7 | Continuous investment in power generation and coal projects under construction | | Financial assets at fair value through profit or loss | 7,103 | 17,302 | (58.9) | Decrease in structured deposit products held | | Cash and cash equivalents | 79,785 | 66,413 | 20.1 | Net cash inflow from operating activities | | Short-term borrowings | 3,006 | 14,021 | (78.6) | Repayment of some short-term borrowings upon maturity | | Accrued expenses and other payables | 102,550 | 35,177 | 191.5 | Increase in dividends payable and employee wages payable | | Bonds due within one year | 0 | 3,020 | (100.0) | USD bonds payable matured and paid in January 2025 | - As of June 30, 2025, the Group's total overseas assets amounted to **29,707 million yuan**, representing **4.3% of total assets**, primarily consisting of power generation assets in Indonesia[89](index=89&type=chunk) - As of June 30, 2025, the Group's restricted assets amounted to **17,045 million yuan**, mainly comprising bank deposits with restricted uses such as mine geological environment restoration funds and loan guarantees for coal mining enterprises[90](index=90&type=chunk) [Operating Performance by Segment](index=31&type=section&id=%E5%88%86%E8%A1%8C%E6%A5%AD%E7%B6%93%E7%87%9F%E6%83%85%E6%B3%81) This section details the production, sales, and financial performance of the company's business segments (coal, power generation, railway, port, shipping, coal chemical) in H1 2025; despite downward pressure on coal and power prices, all segments improved gross margins through cost control and efficiency, with coal chemical business achieving significant growth due to a low base in the prior year [Coal Segment](index=31&type=section&id=%E7%85%A4%E7%82%AD%E5%88%86%E9%83%A8) The Coal Segment's H1 commercial coal production decreased by **1.7% year-on-year**, but maintained high production and stable safety and environmental performance through safe production, quality and efficiency improvements, and intelligent construction; coal sales volume and average sales price both declined, leading to reduced revenue and pre-tax profit, yet gross margin improved; the company continued to advance coal mine projects and increased coal resource reserves - H1 commercial coal production was **165.4 million tons**, a **1.7% year-on-year decrease**[91](index=91&type=chunk) - **Seven advanced intelligent coal mines**, **21 intelligent coal preparation plants**, **37 intelligent longwall mining faces**, and **65 intelligent tunneling faces** have been built in underground coal mines[94](index=94&type=chunk) - Coal sales volume was **204.9 million tons**, a **10.9% year-on-year decrease**; the average coal sales price was **493 yuan/ton**, a **12.9% year-on-year decrease**[95](index=95&type=chunk)[96](index=96&type=chunk) Coal Segment Operating Results (Before Consolidation Eliminations) | Indicator | H1 2025 (million yuan) | H1 2024 (Restated, million yuan) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 103,903 | 134,556 | (22.8) | | Operating costs | (76,685) | (101,340) | (24.3) | | Gross margin (%) | 26.2 | 24.7 | Increased by 1.5 percentage points | | Profit before tax | 23,655 | 27,835 | (15.0) | - The unit production cost of self-produced coal was **166.3 yuan/ton**, a **3.9% year-on-year decrease**, mainly due to reduced coal mine stripping costs, material consumption, and repair and maintenance expenses[114](index=114&type=chunk) - As of June 30, 2025, under Chinese standards, coal retained resources amounted to **41.58 billion tons**, an increase of **21.0%** from end-2024; coal retained recoverable reserves were **17.45 billion tons**, an increase of **15.6%** from end-2024[38](index=38&type=chunk)[102](index=102&type=chunk) [Power Generation Segment](index=39&type=section&id=%E7%99%BC%E9%9B%BB%E5%88%86%E9%83%A8) The Power Generation Segment's H1 total power generation and sales volume both decreased, along with the average sales price; despite market challenges, the company ensured stable electricity and heat supply through enhanced unit reliability management and optimized marketing strategies, actively promoting low-carbon coal power transformation and renewable energy project development, adding **215 MW** of photovoltaic power generation capacity - H1 total power generation was **98.78 billion kWh**, a **7.4% year-on-year decrease**; total power sales volume was **92.91 billion kWh**, a **7.3% year-on-year decrease**[115](index=115&type=chunk) - The average power sales price was **386 yuan/MWh**, a **4.2% year-on-year decrease**[115](index=115&type=chunk) - An additional **215 MW** of commercially operational photovoltaic power generation capacity was added[116](index=116&type=chunk) - The average utilization hours for coal-fired units were **2,143 hours**, **87 hours higher** than the national average for coal-fired power generation equipment of **6,000 kW and above**[123](index=123&type=chunk) Power Generation Segment Operating Results (Before Consolidation Eliminations) | Indicator | H1 2025 (million yuan) | H1 2024 (Restated, million yuan) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 40,539 | 45,169 | (10.3) | | Operating costs | (34,205) | (38,232) | (10.5) | | Gross margin (%) | 15.6 | 15.4 | Increased by 0.2 percentage points | | Profit before tax | 5,351 | 5,561 | (3.8) | - The unit power sales cost was **344.1 yuan/MWh**, a **4.0% year-on-year decrease**, primarily due to lower coal purchase prices[130](index=130&type=chunk) [Railway Segment](index=46&type=section&id=%E9%90%B5%E8%B7%AF%E5%88%86%E9%83%A8) The Railway Segment's H1 self-owned railway transportation turnover decreased by **5.3% year-on-year**, but non-coal cargo volume increased by **7.4% year-on-year**; the company enhanced transportation efficiency by expanding heavy-haul train scale and promoting intelligent construction, actively developing diversified, green, and digitalized transportation - Self-owned railway transportation turnover was **152.8 billion ton-kilometers**, a **5.3% year-on-year decrease**[135](index=135&type=chunk) - Approximately **13.1 million tons** of non-coal cargo, including metal ores and chemical products, were transported, a **7.4% year-on-year increase**[135](index=135&type=chunk) Railway Segment Operating Results (Before Consolidation Eliminations) | Indicator | H1 2025 (million yuan) | H1 2024 (million yuan) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 21,433 | 22,442 | (4.5) | | Operating costs | (12,749) | (14,004) | (9.0) | | Gross margin (%) | 40.5 | 37.6 | Increased by 2.9 percentage points | | Profit before tax | 7,259 | 7,141 | 1.7 | - The unit transportation cost was **0.080 yuan/ton-kilometer**, a **3.6% year-on-year decrease**, mainly due to reduced repair and maintenance expenses[137](index=137&type=chunk) [Port Segment](index=48&type=section&id=%E6%B8%AF%E5%8F%A3%E5%88%86%E9%83%A8) The Port Segment's H1 Huanghua Port coal loading volume continued to rank first nationally, with non-coal cargo volume increasing by **5.9% year-on-year**; the company continuously optimized port functional layout, improved vessel navigation and terminal transshipment efficiency, and orderly advanced projects such as Huanghua Port Phase V and Zhuhai Gaolan Port bulk cargo terminal - Huanghua Port coal loading volume was **107.6 million tons**, maintaining its leading position among national coal ports[139](index=139&type=chunk) - Non-coal cargo volume, including oil products and ores, reached **7.2 million tons**, a **5.9% year-on-year increase**[139](index=139&type=chunk) Port Segment Operating Results (Before Consolidation Eliminations) | Indicator | H1 2025 (million yuan) | H1 2024 (million yuan) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 3,464 | 3,443 | 0.6 | | Operating costs | (1,856) | (1,952) | (4.9) | | Gross margin (%) | 46.4 | 43.3 | Increased by 3.1 percentage points | | Profit before tax | 1,355 | 1,231 | 10.1 | [Shipping Segment](index=49&type=section&id=%E8%88%AA%E9%81%8B%E5%88%86%E9%83%A8) The Shipping Segment's H1 cargo volume decreased by **23.8% year-on-year**, but non-coal cargo volume significantly increased by **516.7% year-on-year**; the company maintained stable and efficient integrated transportation through refined management of its own vessels and market cargo source development - H1 shipping cargo volume was **49.9 million tons**, a **23.8% year-on-year decrease**[142](index=142&type=chunk) - Non-coal cargo volume, including ores, was **3.7 million tons**, a **516.7% year-on-year increase**[142](index=142&type=chunk) Shipping Segment Operating Results (Before Consolidation Eliminations) | Indicator | H1 2025 (million yuan) | H1 2024 (million yuan) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 1,642 | 2,488 | (34.0) | | Operating costs | (1,466) | (2,244) | (34.7) | | Gross margin (%) | 10.7 | 9.8 | Increased by 0.9 percentage points | | Profit before tax | 116 | 224 | (48.2) | - The Shipping Segment's unit transportation cost was **0.028 yuan/ton-nautical mile**, a **6.7% year-on-year decrease**, mainly due to lower vessel chartering fees[143](index=143&type=chunk) [Coal Chemical Segment](index=50&type=section&id=%E7%85%A4%E5%8C%96%E5%B7%A5%E5%88%86%E9%83%A8) The Coal Chemical Segment's H1 polyolefin product sales volume increased by **23.4% year-on-year**, with significant growth in revenue and pre-tax profit, primarily due to a low base in the prior year caused by equipment maintenance; the company strengthened market operations, promoted green development, and orderly advanced the construction of coal-to-olefin upgrade demonstration projects - H1 total polyolefin product sales volume was **354.6 thousand tons**, a **23.4% year-on-year increase**[146](index=146&type=chunk) Coal Chemical Segment Polyolefin Product Sales Volume and Price | Product | H1 2025 Sales Volume (thousand tons) | H1 2024 Sales Volume (thousand tons) | Sales Volume Change (%) | | :--- | :--- | :--- | :--- | | Polyethylene | 184.0 | 148.2 | 24.2 | | Polypropylene | 170.6 | 139.2 | 22.6 | Coal Chemical Segment Operating Results (Before Consolidation Eliminations) | Indicator | H1 2025 (million yuan) | H1 2024 (million yuan) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 2,919 | 2,538 | 15.0 | | Operating costs | (2,773) | (2,442) | 13.6 | | Gross margin (%) | 5.0 | 3.8 | Increased by 1.2 percentage points | | Profit before tax | 79 | 4 | 1,875.0 | - Profit before tax increased by **1,875.0% year-on-year**, primarily due to scheduled maintenance of coal-to-olefin production equipment in the prior year period, resulting in lower polyolefin product output and sales volume[147](index=147&type=chunk) [Operating Performance by Region](index=52&type=section&id=%E5%88%86%E5%9C%B0%E5%8D%80%E7%B6%93%E7%87%9F%E6%83%85%E6%B3%81) In H1 2025, the company's revenue primarily originated from the domestic market, accounting for **97.0%**, while overseas market revenue decreased by **27.4% year-on-year**, mainly due to declining coal prices; overseas projects operated well, with high reliability for Indonesia South Sumatra EMM units, leading market share for Indonesia Java units, and good production and operation for the US Pennsylvania shale gas project - External transaction revenue from the domestic market was **134,009 million yuan**, accounting for **97.0% of the Group's revenue**[150](index=150&type=chunk) - External transaction revenue from overseas markets was **4,100 million yuan**, a **27.4% year-on-year decrease**, primarily due to reduced overseas coal sales revenue impacted by declining coal prices[150](index=150&type=chunk) - Indonesia South Sumatra EMM units achieved **13 consecutive years without forced outages**, with reliability ranking best in the regional grid; Indonesia Java units demonstrated good economic benefits and leading regional market share; the US Pennsylvania shale gas project operated well, producing **53 million cubic meters of gas (equity volume)** in H1[151](index=151&type=chunk) [Analysis of Investment Status](index=53&type=section&id=%E6%8A%95%E8%B3%87%E7%8B%80%E6%B3%81%E5%88%86%E6%9E%90) In H1 2025, the company's new equity investments totaled **15,136 million yuan**, primarily for the acquisition of Hangjin Energy and capital injections into coal, power generation, transportation, and coal chemical subsidiaries; total capital expenditure was **14.746 billion yuan**, mainly directed towards major project construction and technological upgrades in coal, power generation, and transportation businesses - In H1 2025, the company's new equity investment in Hangjin Energy amounted to **11,218 million yuan**[152](index=152&type=chunk) - Other new equity investments totaled **3,918 million yuan**, mainly for capital injections by the Company into relevant coal, power generation, transportation, and coal chemical subsidiaries to advance project construction[152](index=152&type=chunk) H1 2025 Capital Expenditure Plan Completion Status | Business | 2025 Plan (billion yuan) | H1 2025 Completion (billion yuan) | | :--- | :--- | :--- | | Coal business | 96.81 | 41.35 | | Power generation business | 174.11 | 86.96 | | Transportation business | 81.66 | 14.35 | | Coal chemical business | 54.46 | 4.76 | | Other | 10.89 | 0.04 | | Total | 417.93 | 147.46 | - Capital expenditures were primarily for the construction of Xinjie No. 1 and No. 2 Mines in the Xinjie Taigemiao mining area and Hangjin Energy's Tarangaole coalfield project, Phase II of Jiangxi Jiujiang Power Plant and Guangdong Qingyuan Power Plant, Dongyue Railway construction, Huanghua Port (Coal Port Area) Phase V project, Zhuhai Gaolan Port National Energy Bulk Cargo Terminal project, and coal-to-olefin upgrade demonstration projects[159](index=159&type=chunk) [Analysis of Major Controlled and Invested Companies](index=56&type=section&id=%E4%B8%BB%E8%A6%81%E6%8E%A7%E8%82%A1%E5%8F%83%E8%82%A1%E5%85%AC%E5%8F%B8%E5%88%86%E6%9E%90) This section lists the financial performance of the company's major subsidiaries and describes the acquisition and disposal of subsidiaries during the reporting period; the company completed the acquisition of **100% equity in Hangjin Energy** to reduce horizontal competition, increase coal resources, and enhance synergistic operations, while also transferring its equity in Guoneng (Mianzhu) Hydropower Co., Ltd Changes in Net Profit Attributable to Parent Company Shareholders of Major Subsidiaries in H1 2025 | No. | Company | Principal Business | H1 2025 (million yuan) | H1 2024 (million yuan) | Change (%) | Main Reasons for Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | 1 | Shendong Coal | Coal mining, processing, and sales | 4,126 | 5,537 | (25.5) | Decrease in coal sales volume and average sales price | | 2 | Shuohuang Railway | Railway transportation | 3,419 | 3,416 | 0.1 | - | | 4 | Jinjie Energy | Coal mining, processing, and sales, power generation | 1,569 | 2,158 | (27.3) | Decrease in average coal sales price; decrease in power sales volume and average sales price | | 5 | Zhungeer Energy | Coal mining, processing, and sales | 1,479 | 1,367 | 8.2 | - | | 9 | Shendong Power | Power generation | 481 | 426 | 12.9 | Decrease in coal purchase prices | | 12 | Indonesia Java | Power generation | 520 | 456 | 14.0 | Increase in power sales volume | - The company completed the acquisition of **100% equity in Hangjin Energy**, aiming to reduce horizontal competition, increase coal resources, and enhance the Group's energy supply capacity and synergistic operational efficiency in the eastern Inner Mongolia region[167](index=167&type=chunk) - Sichuan Energy, a subsidiary of the company, completed the transfer of its equity in Guoneng (Mianzhu) Hydropower Co., Ltd., recognizing an equity transfer gain of **237 million yuan**, which had no significant impact on the Group's overall production, operations, and performance[167](index=167&type=chunk) [Post-Reporting Period Events](index=58&type=section&id=%E6%9C%9F%E5%BE%8C%E4%BA%8B%E9%A0%85) Subsequent to the reporting period, the company's board approved the 'China Shenhua Issuance of Shares and Cash Payment for Asset Acquisition and Fundraising for Related Transactions Pre-plan,' proposing to acquire equity in coal, pit-mouth coal power, and coal-to-oil/gas/chemical target companies held by China Energy Group through A-share issuance and cash payment, along with raising supporting funds - The company plans to acquire equity in coal, pit-mouth coal power, and coal-to-oil/gas/chemical target companies held by China Energy Group through A-share issuance and cash payment, and to raise supporting funds through A-share issuance[170](index=170&type=chunk) - Related audit and appraisal work for this transaction is not yet complete, and it requires internal decision-making procedures and approval, review, or registration consent from authorized regulatory bodies before formal implementation[170](index=170&type=chunk) [Execution of 2025 'Quality Improvement, Efficiency Enhancement, and High Returns' Action Plan](index=58&type=section&id=2025%E5%B9%B4%E5%BA%A6%E3%80%8C%E6%8F%90%E8%B3%AA%E5%A2%9E%E6%95%88%E9%87%8D%E5%9B%9E%E5%A0%B1%E3%80%8D%E8%A1%8C%E5%8B%95%E6%96%B9%E6%A1%88%E5%9F%B7%E8%A1%8C%E6%83%85%E6%B3%81) The company actively executed its 'Quality Improvement, Efficiency Enhancement, and High Returns' action plan, achieving stable H1 operations with year-on-year gross margin growth across all segments; it maintained a strong shareholder return policy, distributing 2024 final dividends, proposing 2025 interim dividends, and increasing the minimum dividend payout ratio for the next three years; capital operations included completing the Hangjin Energy acquisition and initiating a new round of asset injection, while continuously improving corporate governance, market value management, and investor relations - The Group strengthened its responsibility for energy supply, maintaining stable and orderly production and operations; it actively responded to market changes, deeply explored internal cost reduction potential, and achieved year-on-year gross margin growth across all segments[172](index=172&type=chunk) - The **2024 final cash dividend of 2.26 yuan/share (tax inclusive)** has been fully distributed, representing **76.5% of the net profit attributable to shareholders of the Company**[172](index=172&type=chunk) - The Board recommended an interim dividend of **RMB 0.98 per share (tax inclusive)** for 2025, representing **72.9% of the profit attributable to owners of the Company for H1 2025** under IFRS[172](index=172&type=chunk) - A shareholder return plan for 2025-2027 was formulated, ensuring that the annual cash dividend amount is no less than **65% of the net profit attributable to shareholders of the Company** for that year[172](index=172&type=chunk) - Completed the acquisition of **100% equity in Hangjin Energy** and initiated the acquisition of coal, pit-mouth coal power, and coal-to-oil/gas/chemical related assets held by China Energy Group to further improve company quality and reduce related-party transactions[173](index=173&type=chunk) - The company's Board of Directors approved the 'China Shenhua Energy Company Limited Market Value Management System,' clarifying the basic principles, organizational structure, main methods, monitoring and early warning mechanisms, and emergency measures for market value management[175](index=175&type=chunk) [Potential Risks and Countermeasures](index=60&type=section&id=%E5%8F%AF%E8%83%BD%E9%9D%A2%E5%B0%8D%E7%9A%84%E9%A2%A8%E9%9A%AA%E5%8F%8A%E6%87%89%E5%B0%8D%E6%8E%AA%E6%96%BD) The company faces multi-faceted risks including safety and environmental, compliance, engineering project management, market competition, investment, integrated operations, policy, and international business; it has established a closed-loop risk management system and implemented specific countermeasures for each risk, such as strict safety production responsibility, optimized legal compliance risk prevention, strengthened project management, improved market analysis, refined investment strategies, enhanced integrated operational advantages, and reinforced policy research and international strategic planning - The Company's main risks include **safety and environmental, compliance, engineering project management, market competition, investment, integrated operations, policy, and international business risks**[178](index=178&type=chunk) - The Company has established a **closed-loop risk management system** encompassing annual risk identification, quarterly risk monitoring, dynamic risk assessment, daily inspection and early warning, and year-end supervision and evaluation[178](index=178&type=chunk) - Regarding safety and environmental protection, the company strictly implements safety production responsibilities, deepens the three-year action plan for fundamental improvements in safety production, and enhances ecological environment risk prevention capabilities[179](index=179&type=chunk) - In compliance management, the company continuously optimizes its legal compliance risk prevention system, promotes 'standardization of major business type contracts,' and ensures full-process legal support services for major capital operations and important development projects[180](index=180&type=chunk) - In market and sales, the company strengthens macroeconomic research, improves the accuracy of coal market forecasts, optimizes coal product structure, accelerates the construction of new power systems, and vigorously promotes integrated coal-power and new energy operations[180](index=180&type=chunk) - In integrated operations management, the company continuously strengthens its core advantages in integrated operations, enhances production scheduling, reinforces industrial synergy, optimizes coal-power industrial layout, and accelerates the implementation of new energy projects[183](index=183&type=chunk) Section V Corporate Governance, Environment, and Society [Corporate Governance Overview](index=63&type=section&id=%E5%85%AC%E5%8F%B8%E6%B2%BB%E7%90%86%E6%A6%82%E6%B3%81) The company has established a comprehensive corporate governance structure and operating mechanism, fully complying with the 'Corporate Governance Code'; during the reporting period, Chairman Lü Zhiren resigned, and a new chairman is being selected; the Board implements a diversity policy, the Audit and Risk Committee effectively performs its duties, and the Independent Directors Committee convened meetings to deliberate important proposals - The Company has established a relatively comprehensive corporate governance structure and sound operating mechanisms, fully complying with the 'Corporate Governance Code'[184](index=184&type=chunk)[188](index=188&type=chunk) - Mr. Lü Zhiren resigned as Chairman and Executive Director of the Company on **March 24, 2025**, with the selection of a new chairman currently underway[185](index=185&type=chunk) - The company's Board of Directors has formulated a Board Diversity Policy, using a range of diversity criteria for candidate selection, including but not limited to gender, age, cultural and educational background, race, skills, knowledge, and professional experience[189](index=189&type=chunk) - The Audit and Risk Committee has reviewed the Group's interim financial report for the six months ended June 30, 2025, and the financial information in this report, agreeing to submit them to the Board for consideration[191](index=191&type=chunk) [Changes in Directors, Supervisors, and Senior Management](index=65&type=section&id=%E5%85%AC%E5%8F%B8%E8%91%A3%E4%BA%8B%E3%80%81%E7%9B%A3%E4%BA%8B%E3%80%81%E9%AB%98%E7%B4%9A%E7%AE%A1%E7%90%86%E4%BA%BA%E5%93%A1%E8%AE%8A%E5%8B%95%E6%83%85%E6%B3%81) During the reporting period, changes in the company's directors, supervisors, and senior management primarily involved Mr. Lü Zhiren's resignation as Chairman and Executive Director - Mr. Lü Zhiren resigned as Chairman and Executive Director[193](index=193&type=chunk) [Employee Information](index=66&type=section&id=%E5%93%A1%E5%B7%A5%E6%83%85%E6%B3%81) As of June 30, 2025, the Group had **89,929 employees**, with operations and maintenance personnel forming the largest proportion; most employees held bachelor's degrees; the number of retired employees increased due to the Hangjin Energy acquisition; the company implements competitive compensation policies and provides multi-level training - As of June 30, 2025, the Group had a total of **89,929 employees**[195](index=195&type=chunk) Professional Composition of the Group's Employees | Professional Category | Number of People | | :--- | :--- | | Operations and maintenance personnel | 55,141 | | Management and administrative personnel | 15,523 | | R&D personnel | 4,184 | | Technical support personnel | 8,238 | | Sales and marketing personnel | 638 | | Other personnel | 4,657 | | Total | 89,929 | Educational Background of the Group's Employees | Educational Level | Number of People | | :--- | :--- | | Postgraduate and above | 4,682 | | Bachelor's degree | 40,996 | | College diploma | 20,705 | | Secondary vocational school | 8,322 | | Technical school, high school and below | 15,224 | | Total | 89,929 | - The number of retired employees for whom the Group is responsible for expenses is **33,105**, an increase from end-2024 primarily due to the acquisition of **100% equity in Hangjin Energy**[195](index=195&type=chunk) [Profit Distribution Plan](index=67&type=section&id=%E5%88%A9%E6%BD%A4%E5%88%86%E9%85%8D%E6%96%B9%E6%A1%88) The Board recommended an interim dividend of **RMB 0.98 per share (tax inclusive)** for 2025, totaling **19,471 million yuan**, representing **72.9% of the profit attributable to owners of the Company for H1 2025**, pending shareholder approval; the 2024 final dividend of **RMB 2.26 per share (tax inclusive)** has been distributed - The Board recommended an interim dividend of **RMB 0.98 per share (tax inclusive)** for 2025, totaling **19,471 million yuan**, representing **72.9% of the profit attributable to owners of the Company for H1 2025**[197](index=197&type=chunk) - The **2024 final dividend of RMB 2.26 per share (tax inclusive)**, totaling **RMB 44,903 million (tax inclusive)**, has been fully distributed[202](index=202&type=chunk) - The 2025 interim dividend for H-share shareholders is expected to be distributed on or around **December 24, 2025**[199](index=199&type=chunk) [Environmental Information of Listed Companies and Major Subsidiaries Included in the List of Enterprises Required to Disclose Environmental Information by Law](index=70&type=section&id=%E7%B4%8D%E5%85%A5%E7%92%B0%E5%A2%83%E4%BF%A1%E6%81%AF%E4%BE%9D%E6%B3%95%E6%8A%AB%E9%9C%B2%E4%BC%81%E6%A5%AD%E5%90%8D%E5%96%AE%E7%9A%84%E4%B8%8A%E5%B8%82%E5%85%AC%E5%8F%B8%E5%8F%8A%E5%85%B6%E4%B8%BB%E8%A6%81%E5%AD%90%E5%85%AC%E5%8F%B8%E7%9A%84%E7%92%B0%E5%A2%83%E4%BF%A1%E6%81%AF%E6%83%85%E6%B3%81) As of June 30, 2025, **45 enterprises** within the Group were classified as key environmental supervision units, with **44 included in the list of enterprises required to disclose environmental information by law**; this section lists their names and query indexes for environmental information disclosure reports - As of June 30, 2025, the Group had **45 enterprises** classified as key environmental supervision units by environmental protection authorities, with **44 of them included in the list of enterprises required to disclose environmental information by law**[205](index=205&type=chunk) - The report lists query indexes for environmental information disclosure reports of **44 enterprises**, including Guoneng Baotou Coal Chemical Co., Ltd., Guoneng Shendong Coal Buertai Coal Mine, and Guoneng Guangdong Electric Taishan Power Generation Co., Ltd[206](index=206&type=chunk)[208](index=208&type=chunk) [Specific Progress in Consolidating Poverty Alleviation Achievements and Rural Revitalization](index=72&type=section&id=%E5%B7%A2%E5%9B%BA%E6%8B%93%E5%B1%95%E8%84%AB%E8%B2%BB%E6%94%BB%E5%A0%85%E6%88%90%E6%9E%9C%E3%80%81%E9%84%89%E6%9D%91%E6%8C%AF%E8%88%88%E7%AD%89%E5%B7%A5%E4%BD%9C%E5%85%B7%E9%AB%94%E6%83%85%E6%B3%81) In H1 2025, the Group actively responded to the national rural revitalization strategy, investing **24.85 million yuan** in aid funds for **3 designated counties**, implementing **12 assistance projects** benefiting approximately **100,000 people**, and conducting skills training and agricultural product procurement and sales - In H1 2025, the Group invested **24.85 million yuan** in aid funds for **3 designated counties**, including Mizhi County and Wubu County in Shaanxi Province, and Butuo County in Sichuan Province[212](index=212&type=chunk) - **Twelve assistance projects** were implemented in key areas such as education, healthcare, industry, and infrastructure, benefiting approximately **100,000 people**[212](index=212&type=chunk) - **Sixty person-times** of skilled talents and grassroots cadres were trained, and **8.46 million yuan** worth of agricultural products were purchased and sold[212](index=212&type=chunk) Section VI Significant Matters [Fulfillment of Commitments](index=73&type=section&id=%E6%89%BF%E8%AB%BE%E4%BA%8B%E9%A0%85%E5%B1%A5%E8%A1%8C%E6%83%85%E6%B3%81) The company continues to fulfill its commitment to avoid horizontal competition with China Energy Group, having completed the acquisition of **100% equity in Hangjin Energy** and initiated a new round of asset injection in **August 2025**, aiming to further reduce horizontal competition and enhance the company's energy supply capacity and synergistic operational efficiency - The company signed the 'Agreement on Avoiding Horizontal Competition' and its supplementary agreements with China Energy Group, committing not to compete with the Company's principal businesses and granting the Company priority transaction and selection rights, priority transfer rights, and priority acquisition rights for business opportunities and assets that may constitute potential horizontal competition[214](index=214&type=chunk) - On **January 21, 2025**, the company's Sixth Board of Directors' Sixth Meeting approved the 'Proposal on Acquiring 100% Equity in Hangjin Energy'; this transaction has been completed, aiming to reduce horizontal competition and increase coal resources[219](index=219&type=chunk) - In **August 2025**, the company initiated the acquisition of coal, pit-mouth coal power, and coal-to-oil/gas/chemical related assets held by China Energy Group to further reduce horizontal competition and fulfill the aforementioned agreements[219](index=219&type=chunk) [Half-Year Report Audit Status](index=75&type=section&id=%E5%8D%8A%E5%B9%B4%E5%A0%B1%E5%AF%A9%E8%A8%88%E6%83%85%E6%B3%81) The company's 2025 Annual General Meeting of Shareholders on **June 20, 2025**, approved the appointment of KPMG Huazhen LLP (A-shares) and KPMG (H-shares) as its auditors for 2025; the interim financial statements in this report are unaudited but have been reviewed by KPMG in accordance with Hong Kong Standard on Review Engagements - On **June 20, 2025**, the Company's 2024 Annual General Meeting of Shareholders approved the appointment of **KPMG Huazhen LLP (Special General Partnership)** and **KPMG** as the Company's A-share and H-share auditors for 2025, respectively[220](index=220&type=chunk) - The interim financial statements in this report are unaudited; KPMG issued a review report on the Company's H1 2025 interim financial statements, prepared in accordance with IFRS, based on Hong Kong Standard on Review Engagements[7](index=7&type=chunk) [Major Litigation and Arbitration Matters](index=76&type=section&id=%E9%87%8D%E5%A4%A7%E8%A8%B4%E8%A8%9F%E3%80%81%E4%BB%B2%E8%A3%81%E4%BA%8B%E9%A0%85) During the reporting period, the Group had no major litigation or arbitration matters; management assessed that potential legal liabilities from existing non-major litigation and arbitration cases would not have a material impact on the Group's financial position - During the reporting period, the Group had no major litigation or arbitration matters[222](index=222&type=chunk) - Management believes that the potential legal liabilities arising from these cases will not have a material impact on the Group's financial position[222](index=222&type=chunk) [Major Related Party Transactions](index=77&type=section&id=%E9%87%8D%E5%A4%A7%E9%97%9C%E8%81%AF%E2%88%95%E9%97%9C%E9%80%A3%E4%BA%A4%E6%98%93) This section details the company's daily related party transactions with China Energy Group and its affiliates in coal supply, product and service provision, financial services, and factoring services, as well as ongoing related party transactions with China Railway Group; during the reporting period, the total amount of related party transactions for selling products and providing services to China Energy Group was **45,409 million yuan**, accounting for **32.9% of revenue**; it also discloses the performance commitment fulfillment for the Hangjin Energy acquisition and related party debt and credit with the finance company and Yili Chemical - During the reporting period, the Group's total related party transactions for selling products and providing services to China Energy Group amounted to **45,409 million yuan**, representing **32.9% of the Group's revenue** for the period[231](index=231&type=chunk) H1 2025 Major Ongoing Related Party Transactions Execution Status | Agreement Name | Transaction Item | Currently Effective Transaction Cap (million yuan) | Transaction Amount During Reporting Period (million yuan) | | :--- | :--- | :--- | :--- | | Company and China Energy Group's "Coal Supply Agreement" | Group's sales of goods, provision of services, and other inflows to related parties | 110,000 | 36,966 | | Company and China Energy Group's "Product and Service Supply Agreement" | Group's sales of goods, provision of services, and other inflows (goods category) to related parties | 35,000 | 2,807 | | Company and China Energy Group's "Product and Service Supply Agreement" | Group's sales of goods, provision of services, and other inflows (services category) to related parties | 35,000 | 5,636 | | Company and China Railway Group's "Ongoing Related Party Transaction Framework Agreement" | Group's sales of goods, provision of services, and other inflows to related parties | 15,000 (adjusted) | 1,667 | | Company and Finance Company's "Financial Services Agreement" | Finance Company's maximum daily balance of comprehensive credit lines provided to Group members | 100,000 | 15,432 | | Company and Finance Company's "Financial Services Agreement" | Maximum daily deposit balance of Group members at the Finance Company | 75,000 | 74,885 | | Company and Guoneng Factoring Company's New "Factoring Services Agreement" | Guoneng Factoring Company's maximum daily balance of factoring services provided to Group members | 5,000 | 2,888 | - China Energy Group committed that Hangjin Energy's cumulative net profit attributable to parent company shareholders after deducting non-recurring gains and losses, audited under Chinese Enterprise Accounting Standards, for September-December 2024 and 2025-2029 would be no less than **383.1027 million yuan**; as of H1 2025, Hangjin Energy's cumulative net loss was **260.8727 million yuan**[240](index=240&type=chunk) Related Party Debt and Credit Transactions (June 30, 2025) | Related Party | Related Party Relationship | Ending Balance of Funds Provided to Related Parties (million yuan) | Ending Balance of Funds Provided by Related Parties to Listed Company (million yuan) | | :--- | :--- | :--- | :--- | | China Energy Group Co., Ltd. | Controlling Shareholder | - | 0 | | Finance Company | Subsidiary of Controlling Shareholder | 74,495 | 14,680 | | Other Related Parties | Other | 395 | 2,050 | | Total | | 74,890 | 16,730 | [Major Contracts and Their Fulfillment](index=87&type=section&id=%E9%87%8D%E5%A4%A7%E5%90%88%E5%90%8C%E5%8F%8A%E5%85%B6%E5%B1%A5%E8%A1%8C%E6%83%85%E6%B3%81) This section discloses the company's fulfillment of major contracts during the reporting period, including external guarantees and entrusted cash asset management; as of the end of the reporting period, the total external guarantee balance was **40.32 million yuan**, primarily a joint and several liability guarantee by controlling subsidiary Baorixile Energy for Liangyi Railway Company; the company also engaged in structured deposits and entrusted loans, with the entrusted loan to Yili Chemical being overdue but with collateral measures in place - As of the end of the reporting period, the company's total external guarantee balance was **40.32 million yuan**, representing **0.01% of net assets attributable to owners of the Company**[259](index=259&type=chunk) - The main guarantee is a joint and several liability guarantee by controlling subsidiary Baorixile Energy for Hulunbuir Liangyi Railway Co., Ltd. (asset-liability ratio of **200%**); Baorixile Energy has fully provided for impairment on its equity in Liangyi Railway Co., Ltd. and the amount of repayment on its behalf[261](index=261&type=chunk)[262](index=262&type=chunk) Entrusted Wealth Management (H1 2025) | Product Type | Source of Funds | Amount Incurred During Reporting Period (million yuan) | Unmatured Balance at Period-End (million yuan) | Overdue Unrecovered Amount (million yuan) | | :--- | :--- | :--- | :--- | :--- | | Structured deposits | Own funds | 17,300 | 7,100 | 0 | Entrusted Loans (H1 2025) | Product Type | Source of Funds | Amount Incurred During Reporting Period (million yuan) | Unmatured Balance at Period-End (million yuan) | Overdue Unrecovered Amount (million yuan) | | :--- | :--- | :--- | :--- | :--- | | Entrusted loans | Own funds | 395.37 | 0 | 395.37 | - The **400.0 million yuan** entrusted loan from the company's wholly-owned subsidiary Shendong Power to Inner Mongolia Yili Chemical Industry Co., Ltd. matured on **December 23, 2023**; as of the end of the reporting period, **4.63 million yuan** of principal had been repaid, and the remaining entrusted loan has secured corresponding collateral measures through asset mortgages and other means[275](index=275&type=chunk) Section VII Share Changes and Shareholder Information [Share Capital Changes](index=93&type=section&id=%E8%82%A1%E6%9C%AC%E8%AE%8A%E5%8B%95%E6%83%85%E6%B3%81) During the reporting period, the company's total number of ordinary shares and share capital structure remained unchanged, with **100% of total share capital** consisting of unrestricted tradable shares; the company did not repurchase, sell, or redeem any listed securities and held no treasury shares - During the reporting period, the Company's total number of ordinary shares and share capital structure remained unchanged[276](index=276&type=chunk) - Unrestricted tradable shares totaled **19,868,519,955 shares**, accounting for **100.00% of the total share capital**[278](index=278&type=chunk) - For the six months ended June 30, 2025, the Group did not conduct any repurchases, sales, or redemptions of the Company's listed securities under the Hong Kong Listing Rules[278](index=278&type=chunk) [Shareholder Numbers and Shareholding Status](index=94&type=section&id=%E8%82%A1%E6%9D%B1%E6%95%B8%E9%87%8F%E5%8F%8A%E6%8C%81%E8%82%A1%E6%83%85%E6%B3%81) As of the end of the reporting period, the company had **161,322 ordinary shareholders**; China Energy Investment Group Co., Ltd. is the controlling shareholder, directly and indirectly holding **69.5789% of the company's total issued shares**, with HKSCC NOMINEES LIMITED as the second largest shareholder - As of the end of the reporting period, the total number of ordinary shareholders was **161,322**[281](index=281&type=chunk) Top Ten Shareholders as of June 30, 2025 | Shareholder Name (Full Name) | Shares Held at Period-End | Percentage (%) | Shareholder Nature | | :--- | :--- | :--- | :--- | | China Energy Investment Group Co., Ltd. | 13,812,709,196 | 69.52 | State-owned Legal Person | | HKSCC NOMINEES LIMITED | 3,370,467,428 | 16.96 | Overseas Legal Person | | China Securities Finance Corporation Limited | 594,718,004 | 2.99 | Other | | Hong Kong Securities Clearing Company Limited | 170,982,764 | 0.86 | Overseas Legal Person | | Central Huijin Asset Management Co., Ltd. | 106,077,400 | 0.53 | State-owned Legal Person | - China Energy Investment Group Co., Ltd. directly and indirectly holds **69.5789% of the Company's total issued shares**[291](index=291&type=chunk) - BlackRock, Inc. holds **174,018,151 H-shares (long position)**, representing **5.15% of the Company's issued H-shares**[293](index=293&type=chunk) Section VIII Review Report and Financial Report [Independent Auditor's Review Report](index=100&type=section&id=%E7%8D%A8%E7%AB%8B%E6%A0%B8%E6%95%B8%E5%B8%AB%E5%AF%A9%E9%96%B1%E5%A0%B1%E5%91%8A) KPMG reviewed the company's interim financial report for the six months ended June 30, 2025, in accordance with Hong Kong Standard on Review Engagements, concluding that they found no matters leading them to believe the interim financial report was not prepared in all material respects in accordance with International Accounting Standard 34 - KPMG has reviewed the consolidated financial statements of China Shenhua Energy Company Limited and its subsidiaries for the six months ended **June 30, 2025**[298](index=298&type=chunk) - The review conclusion states: We have not become aware of any matter that makes us believe that the above interim financial report as of June 30, 2025, is not prepared, in all material respects, in accordance with International Accounting Standard 34 'Interim Financial Reporting'[300](index=300&type=chunk) - The interim financial statements in this report are unaudited[7](index=7&type=chunk) [Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=101&type=section&id=%E5%90%88%E4%BD%B5%E6%90%8D%E7%9B%8A%E5%8F%8A%E5%85%B6%E4%BB%96%E7%B6%9C%E5%90%88%E6%94%B6%E7%9B%8A%E8%A1%A8) The company's H1 2025 consolidated statement of profit or loss and other comprehensive income shows revenue of **138,109 million yuan**, profit for the period of **32,059 million yuan**, profit attributable to owners of the Company of **26,706 million yuan**, and basic earnings per share of **1.344 yuan**, with all profitability indicators decreasing compared to restated data from the prior year H1 2025 Consolidated Profit or Loss and Other Comprehensive Income (vs. H1 2024 Restated) | Item | 2025 (RMB million) | 2024 (Restated, RMB million) | | :--- | :--- | :--- | | Revenue | 138,109 | 169,121 | | Operating costs | (94,374) | (118,908) | | Gross profit | 43,735 | 50,213 | | Profit before tax | 40,013 | 44,971 | | Profit for the period | 32,059 | 36,983 | | Profit attributable to owners of the Company for the period | 26,706 | 31,356 | | Basic earnings per share (RMB yuan) | 1.344 | 1.578 | [Consolidated Statement of Financial Position](index=103&type=section&id=%E5%90%88%E4%BD%B5%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81%E8%A1%A8) As of June 30, 2025, the company's consolidated statement of financial position shows total assets of **686,068 million yuan**, total liabilities of **212,433 million yuan**, and net assets of **473,635 million yuan**; compared to restated data from December 31, 2024, total assets slightly increased, but total liabilities significantly rose, leading to a decrease in net assets Consolidated Financial Position as of June 30, 2025 (vs. December 31, 2024 Restated) | Item | June 30, 2025 (RMB million) | December 31, 2024 (Restated, RMB million) | | :--- | :--- | :--- | | Total non-current assets | 471,029 | 464,500 | | Total current assets | 215,039 | 207,139 | | Total current liabilities | 150,497 | 105,116 | | Total non-current liabilities | 61,936 | 66,261 | | Net assets | 473,635 | 500,262 | | Equity attributable to owners of the Company | 404,527 | 422,595 | | Total equity | 473,635 | 500,262 | [Consolidated Statement of Changes in Equity](index=105&type=

[Section I. Definitions](index=3&type=section&id=Section%20I.%20Definitions) This section defines key terms, corporate entities, accounting standards, and financial indicators used in the report to ensure consistent understanding of its content - The report defines key entities such as “China Shenhua/the Company,” “the Group,” and “China Energy Investment Corporation,” along with accounting standards like “China Accounting Standards for Business Enterprises” and “International Financial Reporting Standards”[8](index=8&type=chunk)[11](index=11&type=chunk) - Key financial indicators such as “EBITDA,” “asset-liability ratio,” and “total debt to capital ratio” are provided with clear calculation methods[11](index=11&type=chunk) - The reporting period is defined as January to June 2025[11](index=11&type=chunk) [Section II. Company Profile and Key Financial Indicators](index=6&type=section&id=Section%20II.%20Company%20Profile%20and%20Key%20Financial%20Indicators) This section presents the company's basic information, contact details, stock overview, and detailed key accounting data and financial indicators for the first half of 2025, including year-on-year changes and restatements due to the acquisition of Hangjin Energy - Mr. Lv Zhiren, the company's legal representative, resigned as Chairman and Executive Director on March 24, 2025, with the selection of a new chairman underway[13](index=13&type=chunk) Key Accounting Data and Financial Indicators for H1 2025 (vs. H1 2024) | Indicator | Unit | H1 2025 | H1 2024 (Restated) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Revenue | RMB million | 138,109 | 169,121 | (18.3) | | Profit for the period | RMB million | 32,059 | 36,983 | (13.3) | | Profit attributable to owners of the Company | RMB million | 26,706 | 31,356 | (14.8) | | Basic EPS | yuan/share | 1.344 | 1.578 | (14.8) | | Net cash inflow from operating activities | RMB million | 45,794 | 51,890 | (11.7) | | Return on total assets at period-end | % | 4.7 | 5.4 | decreased by 0.7 percentage points | | Return on net assets at period-end | % | 6.6 | 8.0 | decreased by 1.4 percentage points | | EBITDA | RMB million | 50,629 | 54,764 | (7.6) | Key Balance Sheet Indicators as of June 30, 2025 (vs. December 31, 2024) | Indicator | Unit | June 30, 2025 | December 31, 2024 (Restated) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Total assets | RMB million | 686,068 | 671,639 | 2.1 | | Total liabilities | RMB million | 212,433 | 171,377 | 24.0 | | Total equity | RMB million | 473,635 | 500,262 | (5.3) | | Equity attributable to owners of the Company | RMB million | 404,527 | 422,595 | (4.3) | | Asset-liability ratio | % | 31.0 | 25.5 | increased by 5.5 percentage points | | Total debt to capital ratio | % | 7.1 | 8.9 | decreased by 1.8 percentage points | - The company completed the acquisition of **100% equity in Hangjin Energy** on February 11, 2025, which was a business combination under common control, leading to retrospective adjustments to the comparative consolidated financial statements[20](index=20&type=chunk) Differences in Net Profit and Net Assets Attributable to Owners of the Company under Domestic and International Accounting Standards (RMB million) | Indicator | H1 2025 | H1 2024 (Restated) | June 30, 2025 | December 31, 2024 (Restated) | | :--- | :--- | :--- | :--- | :--- | | Under China Accounting Standards (Net Profit/Net Assets) | 24,641 | 28,012 | 401,523 | 419,559 | | Adjustments: Maintenance, safety production, and other similar expenses | 2,065 | 3,344 | 3,004 | 3,036 | | Under International Financial Reporting Standards (Net Profit/Net Assets) | 26,706 | 31,356 | 404,527 | 422,595 | [Section III. Chairman's Statement](index=10&type=section&id=Section%20III.%20Chairman's%20Statement) The Board reviews the company's stable operations, project construction, technological innovation, capital operations, and corporate governance in H1 2025 amidst declining coal and power prices, and outlines H2 market outlook and strategic priorities including energy supply, green development, innovation, management, and risk prevention - In H1 2025, the company's total market capitalization was **RMB 762.3 billion**, with A-share and H-share prices outperforming major industry indices[23](index=23&type=chunk) - The company maintained high self-produced coal output, ensured smooth and efficient energy transportation channels, achieved higher coal-fired power unit utilization hours than the national average, and successfully met energy supply targets during critical periods and in key regions[24](index=24&type=chunk) - Key projects, including Xinjie No. 1 and No. 2 mines, Jiujiang Phase II, Beihai Phase II coal-fired power projects, and the Indonesia South Sumatra No. 1 project, are progressing rapidly, with an additional **215 MW** of renewable energy generation projects commencing commercial operation[25](index=25&type=chunk) - Technological innovation is empowering industrial upgrading, with Xinjie Energy successfully deploying the first “BIM+Beidou” smart infrastructure management system in China's coal infrastructure sector, and Shuohuang Railway's smart heavy-haul new model recognized as an outstanding case by SASAC[27](index=27&type=chunk) - The company completed the acquisition of Hangjin Energy equity and is actively promoting a new round of capital injection, distributed a **final dividend of RMB 2.26 per share (tax inclusive)** for 2024, increased the minimum annual dividend payout ratio to **65% of net profit attributable to owners of the Company** for 2025-2027, and proposed an interim dividend of **RMB 0.98 per share (tax inclusive)** for 2025[27](index=27&type=chunk) - The focus for the second half of the year is “stable operations, innovation, optimized investment, strengthened management, and ensured safety,” concentrating on energy supply, green development, innovation leadership, management improvement, and risk prevention[30](index=30&type=chunk)[31](index=31&type=chunk) [Section IV. Management Discussion and Analysis](index=15&type=section&id=Section%20IV.%20Management%20Discussion%20and%20Analysis) Management discusses the macroeconomic, coal, and power market environments in H1 2025, outlines the H2 outlook, analyzes consolidated profit and loss, cash flow, and balance sheet, and provides segment-specific operational results and capital expenditure analysis, concluding with major risks and mitigation measures [I. Industry and Principal Business Overview for the Reporting Period](index=15&type=section&id=I.%20Industry%20and%20Principal%20Business%20Overview%20for%20the%20Reporting%20Period) In H1 2025, China's economy grew by 5.3%, the coal market weakened with a 22.2% drop in thermal coal prices, while electricity supply and demand were balanced, with total electricity consumption up 3.7% and non-fossil energy capacity reaching 45.8% - In H1 2025, China's Gross Domestic Product (GDP) increased by **5.3% year-on-year**[45](index=45&type=chunk) - In H1, China's thermal coal market saw a decline in price, with the average transaction price for 5,500 kcal thermal coal at Qinhuangdao Port approximately **RMB 685/tonne**, a **year-on-year decrease of approximately 22.2%**[46](index=46&type=chunk) Key Data for China's Coal Market in H1 2025 | Indicator | Unit | H1 2025 | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | Raw coal output of industrial enterprises above designated size | billion tonnes | 2.40 | 5.4 | | Coal imports | billion tonnes | 0.22 | (11.1) | | National railway coal transportation volume | billion tonnes | 1.34 | (4.8) | - In H1 2025, total electricity consumption was **4,841.8 billion kWh**, a **year-on-year increase of 3.7%**, with thermal power generation decreasing by **2.4% year-on-year**, while wind, solar, and nuclear power generation increased by **10.6%, 20.0%, and 11.3% year-on-year**, respectively[52](index=52&type=chunk) - As of June 2025, national power generation installed capacity reached **3.65 billion kW**, a **year-on-year increase of 18.7%**, with wind and solar power accounting for **45.8%** of total installed capacity[53](index=53&type=chunk) - Electricity consumption growth in H2 is expected to exceed H1, with national total electricity consumption increasing by **5%-6% year-on-year**, and the coal market is anticipated to stabilize with narrower price fluctuations[55](index=55&type=chunk)[57](index=57&type=chunk) - The Group's principal businesses include coal and power production and sales, railway, port, and shipping transportation, and coal chemical products, operating under an integrated model encompassing coal, power generation, railway, port, shipping, and coal chemical industries[58](index=58&type=chunk) - As of June 30, 2025, the company's coal resources in place amounted to **41.58 billion tonnes**, recoverable reserves **17.45 billion tonnes**; it controls and operates power generating units with an installed capacity of **47,632 MW**; railway operating mileage is **2,408 km**; total port loading capacity is approximately **270 million tonnes/year**; its own shipping fleet is approximately **2.24 million DWT**; and coal-to-olefin project production capacity is approximately **600 thousand tonnes/year**[59](index=59&type=chunk) [II. Discussion and Analysis of Operating Performance](index=20&type=section&id=II.%20Discussion%20and%20Analysis%20of%20Operating%20Performance) In H1 2025, the company's revenue decreased by 18.3%, profit before tax by 11.0%, and net profit attributable to owners by 14.8%, with operating performance better than expected and quality improving, despite not meeting half of the annual targets for key operational metrics Key Financial Performance in H1 2025 (vs. H1 2024) | Indicator | H1 2025 (RMB million) | H1 2024 (Restated, RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 138,109 | 169,121 | (18.3) | | Profit before tax | 40,013 | 44,971 | (11.0) | | Profit attributable to owners of the Company | 26,706 | 31,356 | (14.8) | | Basic EPS (yuan/share) | 1.344 | 1.578 | (14.8) | H1 2025 Operating Target Achievement | Item | 2025 Target | H1 Achievement | Achievement Ratio (%) | | :--- | :--- | :--- | :--- | | Commercial Coal Production (billion tonnes) | 3.348 | 1.654 | 49.4 | | Coal Sales Volume (billion tonnes) | 4.659 | 2.049 | 44.0 | | Power Generation (billion kWh) | 2,271 | 987.8 | 43.5 | | Revenue (RMB billion) | 3,200 | 1,381.09 | 43.2 | | Operating Costs (RMB billion) | 2,300 | 943.74 | 41.0 | | Selling, General & Administrative, R&D Expenses, and Net Finance Costs (RMB billion) | 145 | 63.14 | 43.5 | | Change in Unit Production Cost of Self-Produced Coal | approx. 6% year-on-year increase | 3.9% year-on-year decrease | ╱ | [III. Analysis of Core Competitiveness during the Reporting Period](index=21&type=section&id=III.%20Analysis%20of%20Core%20Competitiveness%20during%20the%20Reporting%20Period) The company's core competitiveness remains unchanged, characterized by its integrated coal-rail-port-shipping-power-chemical operations, abundant coal resources, professional management, and leading technological innovation in green mining, clean power generation, heavy-haul rail, and smart port operations - The Group's core competitiveness is primarily reflected in its integrated coal-rail-port-shipping-power-chemical vertical operation model, high-quality and abundant coal resources, dedicated management team and advanced operating philosophy, as well as its domestically and internationally leading industrial technology and scientific innovation capabilities in green coal mining, clean coal-fired power generation, heavy-haul railway transportation, and smart port operations[64](index=64&type=chunk) [IV. Key Operating Performance during the Reporting Period](index=21&type=section&id=IV.%20Key%20Operating%20Performance%20during%20the%20Reporting%20Period) This section analyzes the company's H1 2025 consolidated profit and loss, cash flow, and balance sheet, along with segment-specific operational results, capital expenditures, and resource status for coal, power, railway, port, shipping, and coal chemical businesses [1. Analysis of Major Changes in Consolidated Statement of Profit or Loss and Other Comprehensive Income and Condensed Consolidated Statement of Cash Flows](index=21&type=section&id=1.%20Analysis%20of%20Major%20Changes%20in%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income%20and%20Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) In H1 2025, revenue decreased by 18.3% due to lower coal and power sales, while operating costs fell by 20.6% from reduced external coal and fuel expenses, and cash flows from operating activities decreased by 11.7% Major Changes in Consolidated Statement of Profit or Loss and Cash Flows (H1 2025 vs. H1 2024) | Item | H1 2025 (RMB million) | H1 2024 (Restated, RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 138,109 | 169,121 | (18.3) | | Operating Costs | (94,374) | (118,908) | (20.6) | | R&D Expenses | (727) | (981) | (25.9) | | Other Gains and Losses | 408 | (147) | (377.6) | | Net cash inflow from operating activities | 45,794 | 51,890 | (11.7) | | Net cash outflow from investing activities | (19,557) | (44,051) | (55.6) | | Net cash outflow from financing activities | (12,833) | (2,403) | 434.0 | - The decrease in revenue was primarily due to a **10.9% decrease in coal sales volume** and a **12.9% decrease in average coal sales price**, as well as a **7.3% decrease in electricity sales volume** and a **4.2% decrease in average electricity sales price**[67](index=67&type=chunk)[68](index=68&type=chunk) Changes in Operating Cost Composition (H1 2025 vs. H1 2024) | Cost Item | H1 2025 (RMB million) | % of Total Costs | H1 2024 (Restated, RMB million) | % of Total Costs | Change in Amount (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Purchased Coal Costs | 16,641 | 17.6 | 32,105 | 27.0 | (48.2) | | Raw Materials, Fuel, and Power | 15,695 | 16.6 | 17,679 | 14.9 | (11.2) | | Staff Costs | 16,754 | 17.8 | 17,652 | 14.8 | (5.1) | | Repair and Maintenance | 4,876 | 5.2 | 5,899 | 5.0 | (17.3) | | Depreciation and Amortization | 10,203 | 10.8 | 9,926 | 8.3 | 2.8 | | Transportation Expenses | 7,543 | 8.0 | 9,385 | 7.9 | (19.6) | | Taxes and Surcharges | 7,979 | 8.5 | 9,078 | 7.6 | (12.1) | | Others | 14,683 | 15.5 | 17,184 | 14.5 | (14.6) | | **Total Operating Costs** | **94,374** | **100.0** | **118,908** | **100.0** | **(20.6)** | - Total other gains and losses amounted to a **gain of RMB 408 million** (compared to a loss of RMB 147 million in the same period last year), primarily from gains on disposal of subsidiary equity and structured deposit income[66](index=66&type=chunk)[74](index=74&type=chunk) - Net cash outflow from investing activities decreased by **55.6% year-on-year**, mainly due to a higher recovery of structured deposit products during the reporting period[76](index=76&type=chunk) - Net cash outflow from financing activities significantly increased by **434.0% year-on-year**, primarily due to the Group's higher debt repayments during the reporting period[76](index=76&type=chunk) - R&D investment in H1 2025 was **RMB 1,213 million**, a **year-on-year decrease of 9.3%**, primarily for smart mine construction, research on key technologies for efficient low-carbon thermal power, and diversified integrated energy supply[77](index=77&type=chunk) [2. Explanation of Significant Changes in Company Business Type, Profit Composition, or Profit Sources](index=27&type=section&id=2.%20Explanation%20of%20Significant%20Changes%20in%20Company%20Business%20Type,%20Profit%20Composition,%20or%20Profit%20Sources) During the reporting period, there were no significant changes in the company's business type, profit composition, or sources of profit, with the pre-tax profit contribution from coal, power, transportation, and coal chemical segments remaining stable - The Group's primary operating model is an integrated industrial chain encompassing coal production → coal transportation (railway, port, shipping) → coal conversion (power generation and coal chemicals)[79](index=79&type=chunk) Segment Profit Before Tax Contribution (Before Consolidation Eliminations, H1 2025 vs. H1 2024) | Segment | H1 2025 (%) | H1 2024 (Restated, %) | | :--- | :--- | :--- | | Coal | 63 | 66 | | Power Generation | 14 | 13 | | Transportation | 23 | 21 | | Coal Chemical | 0 | 0 | [3. Coal Segment](index=30&type=section&id=3.%20Coal%20Segment) In H1 2025, the coal segment's commercial coal output decreased by 1.7% to 165.4 million tonnes, sales volume by 10.9% to 204.9 million tonnes, and average sales price by 12.9% to RMB 493/tonne, while gross margin increased by 1.5 percentage points to 26.2% Commercial Coal Production, Sales Volume, and Price (H1 2025 vs. H1 2024) | Indicator | H1 2025 | H1 2024 (Restated) | Change (%) | | :--- | :--- | :--- | :--- | | Commercial Coal Production (million tonnes) | 165.4 | 168.2 | (1.7) | | Coal Sales Volume (million tonnes) | 204.9 | 230.0 | (10.9) | | Of which: Self-produced Coal Sales Volume (million tonnes) | 161.9 | 167.6 | (3.4) | | Purchased Coal Sales Volume (million tonnes) | 43.0 | 62.4 | (31.1) | | Average Sales Price (RMB/tonne, excl. tax) | 493 | 566 | (12.9) | - As of the end of the reporting period, the Group had completed **7 advanced smart coal mines**, **21 smart coal preparation plants**, **37 smart longwall faces** and **65 smart tunneling faces** in underground mines; **404 sets of production equipment** in open-pit mines achieved unmanned operation[91](index=91&type=chunk) Coal Segment Operating Results (Before Consolidation Eliminations, H1 2025 vs. H1 2024) | Indicator | H1 2025 (RMB million) | H1 2024 (Restated, RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 103,903 | 134,556 | (22.8) | | Operating Costs | (76,685) | (101,340) | (24.3) | | Gross Margin (%) | 26.2 | 24.7 | increased by 1.5 percentage points | | Profit before tax | 23,655 | 27,835 | (15.0) | Coal Resources and Reserves (China Standards, June 30, 2025 vs. December 31, 2024) | Indicator | June 30, 2025 (billion tonnes) | December 31, 2024 (billion tonnes) | Change (%) | | :--- | :--- | :--- | :--- | | Resources in Place | 41.58 | 34.36 | 21.0 | | Recoverable Reserves | 17.45 | 15.09 | 15.6 | | Marketable Reserves under JORC Standards | 11.13 | 10.51 | 5.9 | - The increase in coal resources in place was primarily due to the acquisition of Hangjin Energy (an increase of **3.82 billion tonnes**) and the verification of resources in Xinjie Taigemiao South Area (an increase of **3.49 billion tonnes**)[99](index=99&type=chunk) Unit Production Cost of Self-Produced Coal (RMB/tonne, H1 2025 vs. H1 2024) | Cost Item | H1 2025 | H1 2024 (Restated) | Change (%) | | :--- | :--- | :--- | :--- | | Unit Production Cost of Self-Produced Coal | 166.3 | 173.0 | (3.9) | | Raw Materials, Fuel, and Power | 27.7 | 30.6 | (9.5) | | Repair and Maintenance | 9.3 | 10.5 | (11.4) | [4. Power Generation Segment](index=38&type=section&id=4.%20Power%20Generation%20Segment) In H1 2025, total power generation decreased by 7.4% to 98.78 billion kWh, total electricity sales by 7.3% to 92.91 billion kWh, and average sales price by 4.2% to RMB 386/MWh, with market-based transactions accounting for 97.3% Power Generation and Sales Volume (H1 2025 vs. H1 2024) | Indicator | H1 2025 (billion kWh) | H1 2024 (Restated, billion kWh) | Change (%) | | :--- | :--- | :--- | :--- | | Total Power Generation | 98.78 | 106.65 | (7.4) | | Total Electricity Sales Volume | 92.91 | 100.25 | (7.3) | | Average Electricity Sales Price (RMB/MWh) | 386 | 403 | (4.2) | - Market-based electricity transactions amounted to **90.40 billion kWh**, accounting for approximately **97.3%** of total electricity sales volume[112](index=112&type=chunk) - Capacity charges totaling **RMB 2.53 billion (tax inclusive)** were obtained in H1, with an average capacity charge recovery rate of **99.0%**; auxiliary service income totaled **RMB 320 million (tax inclusive)**[113](index=113&type=chunk) - In H1 2025, the Group added **215 MW** of commercially operational photovoltaic power generation capacity[113](index=113&type=chunk) Total Installed Capacity of Generating Units (MW, June 30, 2025 vs. December 31, 2024) | Power Source | December 31, 2024 (Restated) | Added/(Reduced) during Reporting Period | June 30, 2025 | | :--- | :--- | :--- | :--- | | Coal-fired Power | 44,384 | ╱ | 44,384 | | Gas-fired Power | 2,194 | ╱ | 2,194 | | Hydropower | 125 | (47) | 78 | | Photovoltaic Power | 761 | 215 | 976 | | **Total** | **47,464** | **168** | **47,632** | - In H1 2025, the Group's coal-fired units had an average utilization of **2,143 hours**, a decrease of **207 hours** year-on-year, but **87 hours higher** than the national average[120](index=120&type=chunk) Power Generation Segment Operating Results (Before Consolidation Eliminations, H1 2025 vs. H1 2024) | Indicator | H1 2025 (RMB million) | H1 2024 (Restated, RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 40,539 | 45,169 | (10.3) | | Operating Costs | (34,205) | (38,232) | (10.5) | | Gross Margin (%) | 15.6 | 15.4 | increased by 0.2 percentage points | | Profit before tax | 5,351 | 5,561 | (3.8) | - In H1 2025, the Group's unit electricity sales cost was **RMB 344.1/MWh**, a **year-on-year decrease of 4.0%**, primarily due to lower coal procurement prices[127](index=127&type=chunk) [5. Railway Segment](index=45&type=section&id=5.%20Railway%20Segment) In H1 2025, the railway segment's own railway transportation turnover decreased by 5.3% to 152.8 billion tonne-kilometers, while non-coal freight volume increased by 7.4%, and gross margin rose by 2.9 percentage points to 40.5% - In H1 2025, the Group's own railway transportation turnover was **152.8 billion tonne-kilometers**, a **year-on-year decrease of 5.3%**[132](index=132&type=chunk) - Approximately **13.1 million tonnes** of non-coal cargo, including metallic ores and chemical products, were transported, a **year-on-year increase of 7.4%**[132](index=132&type=chunk) Railway Segment Operating Results (Before Consolidation Eliminations, H1 2025 vs. H1 2024) | Indicator | H1 2025 (RMB million) | H1 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 21,433 | 22,442 | (4.5) | | Operating Costs | (12,749) | (14,004) | (9.0) | | Gross Margin (%) | 40.5 | 37.6 | increased by 2.9 percentage points | | Profit before tax | 7,259 | 7,141 | 1.7 | - In H1 2025, the railway segment's unit transportation cost was **RMB 0.080/tonne-kilometer**, a **year-on-year decrease of 3.6%**[134](index=134&type=chunk) [6. Port Segment](index=47&type=section&id=6.%20Port%20Segment) In H1 2025, Huanghua Port's coal loading volume decreased by 2.2% to 107.6 million tonnes, while non-coal freight volume increased by 5.9%, and gross margin rose by 3.1 percentage points to 46.4% - In H1 2025, Huanghua Port's coal loading volume was **107.6 million tonnes**, a **year-on-year decrease of 2.2%**, maintaining its position as the top coal port nationwide[136](index=136&type=chunk) - Tianjin Coal Terminal's coal loading volume was **21.8 million tonnes**, a **year-on-year decrease of 0.5%**[136](index=136&type=chunk) - The port segment handled **7.2 million tonnes** of non-coal cargo, including oil products and ores, a **year-on-year increase of 5.9%**[136](index=136&type=chunk) Port Segment Operating Results (Before Consolidation Eliminations, H1 2025 vs. H1 2024) | Indicator | H1 2025 (RMB million) | H1 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 3,464 | 3,443 | 0.6 | | Operating Costs | (1,856) | (1,952) | (4.9) | | Gross Margin (%) | 46.4 | 43.3 | increased by 3.1 percentage points | | Profit before tax | 1,355 | 1,231 | 10.1 | [7. Shipping Segment](index=48&type=section&id=7.%20Shipping%20Segment) In H1 2025, the shipping segment's freight volume decreased by 23.8% to 49.9 million tonnes, while non-coal freight volume surged by 516.7%, and gross margin increased by 0.9 percentage points to 10.7% - In H1 2025, the Group's shipping freight volume was **49.9 million tonnes**, a **year-on-year decrease of 23.8%**[139](index=139&type=chunk) - Non-coal freight volume, including ores, was **3.7 million tonnes**, a significant **year-on-year increase of 516.7%**[139](index=139&type=chunk) Shipping Segment Operating Results (Before Consolidation Eliminations, H1 2025 vs. H1 2024) | Indicator | H1 2025 (RMB million) | H1 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 1,642 | 2,488 | (34.0) | | Operating Costs | (1,466) | (2,244) | (34.7) | | Gross Margin (%) | 10.7 | 9.8 | increased by 0.9 percentage points | | Profit before tax | 116 | 224 | (48.2) | - In H1 2025, the shipping segment's unit transportation cost was **RMB 0.028/tonne-nautical mile**, a **year-on-year decrease of 6.7%**[140](index=140&type=chunk) [8. Coal Chemical Segment](index=49&type=section&id=8.%20Coal%20Chemical%20Segment) In H1 2025, the coal chemical segment's polyolefin product sales volume increased by 23.4% to 354.6 thousand tonnes, gross margin rose by 1.2 percentage points to 5.0%, and profit before tax surged by 1875.0% Polyolefin Product Sales Volume (H1 2025 vs. H1 2024) | Product | H1 2025 (thousand tonnes) | H1 2024 (thousand tonnes) | Change in Sales Volume (%) | | :--- | :--- | :--- | :--- | | Polyethylene | 184.0 | 148.2 | 24.2 | | Polypropylene | 170.6 | 139.2 | 22.6 | | **Total** | **354.6** | **287.4** | **23.4** | Coal Chemical Segment Operating Results (Before Consolidation Eliminations, H1 2025 vs. H1 2024) | Indicator | H1 2025 (RMB million) | H1 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 2,919 | 2,538 | 15.0 | | Operating Costs | (2,773) | (2,442) | 13.6 | | Gross Margin (%) | 5.0 | 3.8 | increased by 1.2 percentage points | | Profit before tax | 79 | 4 | 1,875.0 | - In H1 2025, the coal chemical segment consumed a total of **2.5 million tonnes of coal**, a **year-on-year increase of 19.0%**[145](index=145&type=chunk) [V. Segmental Operating Performance by Region](index=51&type=section&id=V.%20Segmental%20Operating%20Performance%20by%20Region) In H1 2025, domestic market revenue accounted for 97.0% of total revenue, while overseas market revenue decreased by 27.4% due to lower coal prices, with overseas projects operating well External Transaction Revenue by Region (H1 2025 vs. H1 2024) | Region | H1 2025 (RMB million) | H1 2024 (Restated, RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | External transaction revenue from domestic markets | 134,009 | 163,473 | (18.0) | | External transaction revenue from overseas markets | 4,100 | 5,648 | (27.4) | | **Total** | **138,109** | **169,121** | **(18.3)** | - Overseas projects are operating well, with Indonesia South Sumatra EMM units achieving **13 consecutive years without unplanned outages**, Indonesia Java units demonstrating good economic efficiency, Indonesia South Sumatra No. 1 project progressing normally, and the US Pennsylvania shale gas project producing **53 million cubic meters of gas** in H1[148](index=148&type=chunk) [VI. Analysis of Investment Status](index=52&type=section&id=VI.%20Analysis%20of%20Investment%20Status) In H1 2025, the company invested RMB 11,218 million in Hangjin Energy and RMB 3,918 million in other equity investments, with fair value financial assets totaling RMB 10,379 million, and capital expenditures of RMB 14.746 billion primarily for project construction and technological upgrades - In H1 2025, the company made new equity investments of **RMB 11,218 million** in Hangjin Energy and **RMB 3,918 million** in other equity investments, primarily to increase capital for its coal, power generation, transportation, and coal chemical subsidiaries[149](index=149&type=chunk) Changes in Financial Assets Measured at Fair Value (RMB million) | Asset Category | Opening Balance (RMB million) | Closing Balance (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Financial assets at fair value through profit or loss (current assets) | 17,302 | 7,103 | (58.9) | | Equity investments at fair value through other comprehensive income | 2,787 | 2,813 | 0.9 | | Financial assets at fair value through other comprehensive income | 1,174 | 403 | (65.7) | | Financial assets at fair value through profit or loss (non-current assets) | 60 | 60 | 0.0 | | **Total** | **21,323** | **10,379** | **(51.3)** | H1 2025 Capital Expenditure Completion (RMB billion) | Business | 2025 Plan | H1 Achievement | | :--- | :--- | :--- | | Coal Business | 96.81 | 41.35 | | Power Generation Business | 174.11 | 86.96 | | Transportation Business | 81.66 | 14.35 | | Coal Chemical Business | 54.46 | 4.76 | | Others | 10.89 | 0.04 | | **Total** | **417.93** | **147.46** | - Capital expenditures were primarily for the construction of Xinjie Taigemiao mining area and Hangjin Energy Tarangaole minefield projects, coal mine equipment procurement and technological upgrades; construction of Jiujiang Power Plant Phase II in Jiangxi, Qingyuan Power Plant Phase II in Guangdong, and other thermal power projects; Dongyue Railway construction and railway line expansion and renovation; Huanghua Port Phase V project, Zhuhai Gaolan Port National Energy Bulk Cargo Terminal project construction; and coal-to-olefin upgrade demonstration project construction[156](index=156&type=chunk) [VII. Significant Asset and Equity Disposals](index=54&type=section&id=VII.%20Significant%20Asset%20and%20Equity%20Disposals) During the reporting period, the company had no significant asset or equity disposal matters [VIII. Analysis of Major Controlled and Invested Companies](index=55&type=section&id=VIII.%20Analysis%20of%20Major%20Controlled%20and%20Invested%20Companies) Net profit attributable to owners of major subsidiaries like Shendong Coal and Jinjie Energy decreased due to lower coal sales and transportation, while Zhungeer Energy and Huanghua Port increased due to reduced coal procurement costs and equity transfer gains Changes in Net Profit Attributable to Owners of Major Subsidiaries (H1 2025 vs. H1 2024) | No. | Company | Principal Business | H1 2025 (RMB million) | H1 2024 (RMB million) | Change (%) | Primary Reasons for Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | 1 | Shendong Coal | Coal mining, processing, and sales | 4,126 | 5,537 | (25.5) | Decrease in coal sales volume and average sales price | | 2 | Shuohuang Railway | Railway transportation | 3,419 | 3,416 | 0.1 | - | | 4 | Jinjie Energy | Coal mining, processing, and sales, power generation business | 1,569 | 2,158 | (27.3) | Decrease in average coal sales price; decrease in electricity sales volume and average sales price | | 5 | Zhungeer Energy | Coal mining, processing, and sales | 1,479 | 1,367 | 8.2 | - | | 6 | Huanghua Port | Port operations | 851 | 846 | 0.6 | - | | 9 | Shendong Power | Power generation business | 481 | 426 | 12.9 | Decrease in coal procurement prices | | 10 | Sichuan Energy | Power generation business | 603 | 545 | 10.6 | Affected by the disposal of equity in Guoneng (Mianzhu) Hydropower Co., Ltd. | | 12 | Indonesia Java | Power generation business | 520 | 456 | 14.0 | Increase in electricity sales volume | | 14 | Sales Group | Coal wholesale operations, transportation agency | 401 | 859 | (53.3) | Decrease in coal sales volume and average sales price | | 15 | Xinshuo Railway | Railway transportation | 338 | 576 | (41.3) | Decrease in railway transportation turnover | - The company completed the acquisition of **100% equity in Hangjin Energy**, which was included in the consolidation scope, resulting in a **net loss of RMB 54 million attributable to owners of the parent company** in H1[164](index=164&type=chunk) - Sichuan Energy, a subsidiary of the company, completed the disposal of its equity in Guoneng (Mianzhu) Hydropower Co., Ltd., recognizing a **gain on equity transfer of RMB 237 million**[164](index=164&type=chunk) [IX. Structured Entities Controlled by the Company](index=57&type=section&id=IX.%20Structured%20Entities%20Controlled%20by%20the%20Company) During the reporting period, the company had no structured entities under its control [X. Contingent Liabilities](index=57&type=section&id=X.%20Contingent%20Liabilities) The Group's contingent liabilities are detailed in the notes to the financial statements under "Commitments and Contingent Liabilities" [XI. Events After the Reporting Period](index=57&type=section&id=XI.%20Events%20After%20the%20Reporting%20Period) After the reporting period, the Board proposed an interim dividend and initiated the acquisition of coal, pit-mouth coal-fired power, and coal-to-oil/gas/chemical assets from China Energy Investment Corporation to further reduce competition - The Board proposed a cash dividend of **RMB 19,471 million (tax inclusive)** for the six months ended June 30, 2025, equivalent to **RMB 0.98 per share (tax inclusive)**, subject to shareholder approval[5](index=5&type=chunk) - On August 15, 2025, the company initiated the acquisition of equity assets in coal, pit-mouth coal-fired power, and coal-to-oil/gas/chemical related target companies held by China Energy Investment Corporation, along with raising supporting funds, to further reduce horizontal competition[167](index=167&type=chunk) [V. Implementation of the "Quality Improvement, Efficiency Enhancement, and High Returns" Action Plan for 2025](index=57&type=section&id=V.%20Implementation%20of%20the%20%22Quality%20Improvement,%20Efficiency%20Enhancement,%20and%20High%20Returns%22%20Action%20Plan%20for%202025) The company actively implemented its "Quality Improvement, Efficiency Enhancement, and High Returns" action plan, achieving year-on-year gross margin growth across segments, increasing dividend payout ratios, completing the Hangjin Energy acquisition, and strengthening corporate governance and investor relations - The Group strengthened its responsibility for energy supply, maintaining stable and orderly production and operations; actively responded to market changes, tapped internal cost reduction potential, and achieved **year-on-year growth in gross margin** across all segments[169](index=169&type=chunk) - The **2024 final cash dividend of RMB 2.26 per share (tax inclusive)**, representing **76.5% of net profit attributable to owners of the Company**, has been fully distributed[169](index=169&type=chunk) - A dividend policy for 2025-2027 has been formulated, stipulating that annual cash dividends shall be no less than **65% of the net profit attributable to owners of the Company** for the respective year, with interim dividends considered when appropriate[169](index=169&type=chunk) - The Board proposed an interim dividend of **RMB 0.98 per share (tax inclusive)** for 2025, totaling **RMB 19,471 million**, representing **72.9% of the profit attributable to owners of the Company** under IFRS for H1 2025[169](index=169&type=chunk) - Completed the acquisition of **100% equity in Hangjin Energy** and initiated the acquisition of coal, pit-mouth coal-fired power, and coal-to-oil/gas/chemical related assets held by China Energy Investment Corporation[170](index=170&type=chunk) - Improved the corporate governance system, promoted the reform of the supervisory board, and revised and improved the Articles of Association, Rules of Procedure for Shareholder Meetings, and Rules of Procedure for Board Meetings[171](index=171&type=chunk) - Approved the “China Shenhua Energy Company Limited Market Value Management System,” formulated the “China Shenhua 2025 Annual Market Value Management Work Implementation Plan,” and organized quarterly market value management work meetings[172](index=172&type=chunk) - A total of **126 investor communication meetings** were held in H1, engaging approximately **1,800 investors**[174](index=174&type=chunk) [VI. Potential Risks and Countermeasures](index=59&type=section&id=VI.%20Potential%20Risks%20and%20Countermeasures) The company faces risks in safety, environmental protection, compliance, project management, market competition, investment, integrated operations, policy, and international business, and has established a closed-loop risk management system with specific mitigation measures for each risk - The company faces primary risks in safety and environmental protection, compliance, engineering project management, market competition, investment, integrated operations, policy, and international business, with no new risk factors identified during the reporting period[175](index=175&type=chunk) - The company has established a closed-loop risk management system encompassing annual risk identification, quarterly risk monitoring, dynamic risk assessment, daily inspection warnings, and year-end supervision and evaluation[175](index=175&type=chunk) - To address safety and environmental risks, the company strictly implements safety production responsibilities, deepens the three-year action plan for fundamental safety production improvements, and intensifies efforts in pollution prevention and control[176](index=176&type=chunk) - To address compliance management risks, the company continuously optimizes its legal and compliance risk prevention system, promotes “standardized contracts for major business types,” and dynamically identifies, assesses, and warns of legal and compliance risks[177](index=177&type=chunk) - To address engineering management risks, the company improves its infrastructure management system, strengthens technical and economic feasibility studies, scientifically optimizes investment decisions, and controls project engineering costs at the source[177](index=177&type=chunk) - To address market and sales risks, the company strengthens macroeconomic research, improves its market analysis system, optimizes its coal product structure, actively develops supportive and guaranteed coal-fired power projects, and promotes joint ventures between coal-fired power and new energy[177](index=177&type=chunk) - To address integrated operation management risks, the company strengthens its core advantages in integrated operations, enhances production scheduling, reinforces industrial synergy, and improves integrated operation risk control capabilities[180](index=180&type=chunk) - To address international business risks, the company strengthens international situation analysis, improves international strategic planning, actively responds to the “Belt and Road” initiative, and promotes international energy cooperation[180](index=180&type=chunk) [Section V. Corporate Governance, Environment, and Society](index=62&type=section&id=Section%20V.%20Corporate%20Governance,%20Environment,%20and%20Society) This section details the company's corporate governance structure, Board operations, director diversity, audit and risk committee functions, changes in directors/supervisors/senior management, and securities trading compliance [I. Overview of Corporate Governance](index=62&type=section&id=I.%20Overview%20of%20Corporate%20Governance) The company has established a sound corporate governance framework, complying with the Corporate Governance Code, with a well-functioning Board, separation of Chairman and General Manager roles, diverse board members, and effective audit and risk committees - The company has established a relatively comprehensive corporate governance structure and sound operating mechanisms, fully complying with Appendix C1 “Corporate Governance Code” of the Hong Kong Listing Rules[181](index=181&type=chunk)[185](index=185&type=chunk) - Following Mr. Lv Zhiren's resignation as Chairman and Executive Director, Mr. Zhang Changyan, Executive Director and General Manager, convened the Board until a new Chairman is elected[182](index=182&type=chunk) - The company's Board has formulated a Board Diversity Policy, selecting candidates based on categories such as gender, age, cultural and educational background, race, skills, knowledge, and professional experience[186](index=186&type=chunk) - The Audit and Risk Committee, composed of three independent non-executive directors, is responsible for overseeing external audit, internal audit, reviewing financial information, and supervising internal controls[187](index=187&type=chunk) - The Independent Directors Committee held three meetings, reviewing proposals such as the acquisition of Hangjin Energy, the implementation of continuing connected transaction agreements, and the risk assessment report of the finance company[188](index=188&type=chunk) [II. Changes in Directors, Supervisors, and Senior Management](index=64&type=section&id=II.%20Changes%20in%20Directors,%20Supervisors,%20and%20Senior%20Management) During the reporting period, Mr. Lv Zhiren resigned from his positions as Chairman and Executive Director of the company - Mr. Lv Zhiren resigned from his positions as Chairman and Executive Director of the company[190](index=190&type=chunk) [III. Employee Information](index=65&type=section&id=III.%20Employee%20Information) As of June 30, 2025, the Group had 89,929 employees, primarily in operations and maintenance, with a majority holding bachelor's degrees, and the increase in headcount was mainly due to the acquisition of Hangjin Energy Total Number and Professional Composition of Employees in the Group (June 30, 2025) | Category | Number (persons) | | :--- | :--- | | Employees at Company Headquarters | 180 | | Employees at Company Subsidiaries and Branches | 89,749 | | **Total Employees in the Group** | **89,929** | | **Professional Composition** | | | Operations and Maintenance Personnel | 55,141 | | Management and Administrative Personnel | 15,523 | | Financial Personnel | 1,548 | | R&D Personnel | 4,184 | | Technical Support Personnel | 8,238 | | Sales and Marketing Personnel | 638 | | Other Personnel | 4,657 | | **Total** | **89,929** | Educational Background of Group Employees (June 30, 2025) | Educational Level | Number (persons) | | :--- | :--- | | Postgraduate and above | 4,682 | | Bachelor's Degree | 40,996 | | Associate Degree | 20,705 | | Technical Secondary School | 8,322 | | Technical School, High School, and below | 15,224 | | **Total** | **89,929** | - The total number of employees in the Group increased compared to the end of 2024, primarily due to the completion of the acquisition of **100% equity in Hangjin Energy** in February 2025, which expanded the scope of employee statistics to include Hangjin Energy[192](index=192&type=chunk) [IV. Profit Distribution Plan](index=66&type=section&id=IV.%20Profit%20Distribution%20Plan) The company approved a 2025-2027 dividend policy to distribute at least 65% of annual net profit attributable to owners as cash dividends, and proposed an interim dividend of RMB 0.98 per share for 2025, representing 72.9% of H1 net profit attributable to owners under IFRS - For 2025-2027, the company's annual cash dividends will be no less than **65% of the net profit attributable to owners of the Company** for the respective year[194](index=194&type=chunk) - The Board proposed an interim dividend of **RMB 0.98 per share (tax inclusive)** for 2025, totaling **RMB 19,471 million (tax inclusive)** based on the total share capital as of June 30, 2025[194](index=194&type=chunk) - This interim dividend represents **72.9% of the profit attributable to owners of the Company** under IFRS for H1 2025, and **79.0% of the net profit attributable to owners of the Company** under China Accounting Standards[194](index=194&type=chunk) - The **2024 final dividend of RMB 2.26 per share (tax inclusive)**, totaling **RMB 44,903 million (tax inclusive)**, was fully distributed during the reporting period[199](index=199&type=chunk) [V. Equity Incentive Plans, Employee Stock Ownership Plans, or Other Employee Incentive Measures and Their Impact](index=68&type=section&id=V.%20Equity%20Incentive%20Plans,%20Employee%20Stock%20Ownership%20Plans,%20or%20Other%20Employee%20Incentive%20Measures%20and%20Their%20Impact) During the reporting period, the company had no equity incentive plans, employee stock ownership plans, or other employee incentive measures [VI. Environmental Information of Listed Companies and Their Major Subsidiaries Included in the List of Enterprises Required to Disclose Environmental Information by Law](index=69&type=section&id=VI.%20Environmental%20Information%20of%20Listed%20Companies%20and%20Their%20Major%20Subsidiaries%20Included%20in%20the%20List%20of%20Enterprises%20Required%20to%20Disclose%20Environmental%20Information%20by%20Law) As of June 30, 2025, 44 out of 45 of the Group's key environmental supervision enterprises were included in the list of enterprises required to disclose environmental information by law, with their respective inquiry indexes provided - As of June 30, 2025, there were **45 enterprises** within the Group classified as key environmental supervision units, of which **44 were included** in the list of enterprises required to disclose environmental information by law[202](index=202&type=chunk) - Although Shendong Coal Branch Company Equipment Maintenance Center No. 2 Plant is a key unit, it is not included in the “Ordos City 2025 List of Enterprises Required to Disclose Environmental Information by Law” and therefore is not required to disclose an environmental information disclosure report[202](index=202&type=chunk) [VII. Specific Progress in Consolidating Poverty Alleviation Achievements and Rural Revitalization](index=71&type=section&id=VII.%20Specific%20Progress%20in%20Consolidating%20Poverty%20Alleviation%20Achievements%20and%20Rural%20Revitalization) In H1 2025, the Group invested RMB 24.85 million in poverty alleviation funds across three designated counties, benefiting approximately 100,000 people, training 60 skilled personnel, and purchasing/selling RMB 8.46 million in agricultural products - In H1 2025, the Group invested **RMB 24.85 million** in poverty alleviation funds for three designated counties, including Mizhi County and Wubu County in Shaanxi Province, and Butuo County in Sichuan Province[209](index=209&type=chunk) - Implemented **12 key assistance projects** in education, healthcare, industry, and infrastructure, benefiting approximately **100,000 people**; trained **60 skilled personnel and grassroots cadres**, and purchased/sold **RMB 8.46 million** in agricultural products[209](index=209&type=chunk) - In addition to the designated counties, the Group also carried out **6 other assistance projects**, including local enterprise co-construction, rural revitalization, and local aid, with a total investment of **RMB 5.02 million**[210](index=210&type=chunk) [Section VI. Significant Matters](index=72&type=section&id=Section%20VI.%20Significant%20Matters) This section covers the company's commitments, particularly regarding avoiding horizontal competition and asset injection, significant related party transactions including daily operations and asset acquisitions, related party balances, and the performance of major contracts [I. Fulfillment of Commitments](index=72&type=section&id=I.%20Fulfillment%20of%20Commitments) The company continues to fulfill its commitment to avoid horizontal competition, extending the asset acquisition deadline to 2028, completing the Hangjin Energy acquisition, and initiating a new round of asset injections from China Energy Investment Corporation - As China Energy Investment Corporation's coal business integration platform, the company's commitment to avoid horizontal competition has been extended to **August 27, 2028**[215](index=215&type=chunk) - In February 2025, the acquisition of **100% equity in Hangjin Energy** from China Energy Investment Corporation was completed[216](index=216&type=chunk) - In August 2025, the company initiated the acquisition of coal, pit-mouth coal-fired power, and coal-to-oil/gas/chemical related assets held by China Energy Investment Corporation to further reduce horizontal competition[216](index=216&type=chunk) [II. Non-Operating Fund Occupation by Controlling Shareholder and Other Related Parties during the Reporting Period](index=74&type=section&id=II.%20Non-Operating%20Fund%20Occupation%20by%20Controlling%20Shareholder%20and%20Other%20Related%20Parties%20during%20the%20Reporting%20Period) During the reporting period, there was no non-operating fund occupation by the controlling shareholder or its related parties [III. Irregular Guarantees](index=74&type=section&id=III.%20Irregular%20Guarantees) During the reporting period, the company did not provide any guarantees in violation of decision-making procedures [IV. Half-Year Report Audit Status](index=74&type=section&id=IV.%20Half-Year%20Report%20Audit%20Status) On June 20, 2025, shareholders approved KPMG Huazhen and KPMG as auditors for the 2025 A-share and H-share reports, respectively, with no change in auditors or non-standard audit reports received during the period - On June 20, 2025, the company's general meeting of shareholders approved the appointment of KPMG Huazhen LLP and KPMG as the auditors for the company's 2025 A-share and H-share reports, respectively[217](index=217&type=chunk) [V. Changes and Handling of Matters Related to Non-Standard Audit Opinions in the Previous Annual Report](index=75&type=section&id=V.%20Changes%20and%20Handling%20of%20Matters%20Related%20to%20Non-Standard%20Audit%20Opinions%20in%20the%20Previous%20Annual%20Report) During the reporting period, there were no changes or handling of matters related to non-standard audit opinions in the previous annual report [VI. Matters Related to Bankruptcy Reorganization](index=75&type=section&id=VI.%20Matters%20Related%20to%20Bankruptcy%20Reorganization) During the reporting period, the company had no matters related to bankruptcy reorganization [VII. Significant Litigation and Arbitration Matters](index=75&type=section&id=VII.%20Significant%20Litigation%20and%20Arbitration%20Matters) During the reporting period, the Group had no significant litigation or arbitration matters, and management believes non-material cases will not significantly impact the Group's financial position - During the reporting period, the Group had no significant litigation or arbitration matters[219](index=219&type=chunk) [VIII. Alleged Violations, Penalties, and Rectification of the Listed Company, Its Directors, Supervisors, Senior Management, Controlling Shareholder, and Actual Controller](index=75&type=section&id=VIII.%20Alleged%20Violations,%20Penalties,%20and%20Rectification%20of%20the%20Listed%20Company,%20Its%20Directors,%20Supervisors,%20Senior%20Management,%20Controlling%20Shareholder,%20and%20Actual%20Controller) During the reporting period, there were no alleged violations, penalties, or rectification situations involving the company, its directors, supervisors, senior management, controlling shareholder, or actual controller [IX. Explanation of the Integrity Status of the Company, Its Controlling Shareholder, and Actual Controller during the Reporting Period](index=75&type=section&id=IX.%20Explanation%20of%20the%20Integrity%20Status%20of%20the%20Company,%20Its%20Controlling%20Shareholder,%20and%20Actual%20Controller%20during%20the%20Reporting%20Period) During the reporting period, neither the company nor its controlling shareholder, China Energy Investment Corporation, was listed as a severely dishonest enterprise or had unfulfilled large outstanding debts - During the reporting period, neither the company nor its controlling shareholder, China Energy Investment Corporation, was listed as a severely illegal and dishonest enterprise[220](index=220&type=chunk) - As of the end of the reporting period, the company had no unfulfilled obligations defined by effective legal documents from courts, nor did it have large outstanding debts that were due and unpaid[220](index=220&type=chunk) [X. Significant Related Party Transactions](index=76&type=section&id=X.%20Significant%20Related%20Party%20Transactions) This section details the company's daily related party transactions with China Energy Investment Corporation and China Railway Group, including product sales, service provision, financial services, and factoring, as well as the acquisition of Hangjin Energy and related party balances [1. Related Party Transactions Related to Daily Operations](index=76&type=section&id=1.%20Related%20Party%20Transactions%20Related%20to%20Daily%20Operations) The company engaged in daily related party transactions with China Energy Investment Corporation and China Railway Group, with total sales to China Energy Investment Corporation amounting to RMB 45,409 million, representing 32.9% of total revenue - The Group's total sales of products and provision of services to China Energy Investment Corporation amounted to **RMB 45,409 million**, accounting for **32.9% of the Group's revenue** during the reporting period[228](index=228&type=chunk) - The annual cap for the Group's provision of transportation services, coal supply, and other products and services to China Railway Group and its subsidiaries under the “Continuing Connected Transaction Framework Agreement” for 2025 was adjusted from **RMB 7,400 million to RMB 15,000 million**[229](index=229&type=chunk) Execution of Major Daily Related Party Transaction Agreements (H1 2025) | Agreement Name | Transaction Cap (RMB million) | Transaction Amount during Reporting Period (RMB million) | | :--- | :--- | :--- | | The Company's "Coal Mutual Supply Agreement" with China Energy Investment Corporation (Sales) | 110,000 | 36,966 | | The Company's "Coal Mutual Supply Agreement" with China Energy Investment Corporation (Purchases) | 27,000 | 3,983 | | The Company's "Product and Service Mutual Supply Agreement" with China Energy Investment Corporation (Sales) | 35,000 | 8,443 | | The Company's "Product and Service Mutual Supply Agreement" with China Energy Investment Corporation (Purchases) | 17,000 | 2,750 | | The Company's "Continuing Connected Transaction Framework Agreement" with China Railway Group (Sales) | 15,000 | 1,667 | | The Company's "Continuing Connected Transaction Framework Agreement" with China Railway Group (Purchases) | 20,000 | 4,710 | | The Company's "Financial Services Agreement" with Finance Company (Maximum Daily Balance of Comprehensive Credit Line) | 100,000 | 15,432 | | The Company's "Financial Services Agreement" with Finance Company (Maximum Daily Deposit Balance) | 75,000 | 74,885 | | The Company's New "Factoring Services Agreement" with Guoneng Factoring Company (Maximum Daily Balance of Factoring Services) | 5,000 | 2,888 | [2. Related Party Transactions Involving Asset or Equity Acquisitions and Disposals](index=80&type=section&id=2.%20Related%20Party%20Transactions%20Involving%20Asset%20or%20Equity%20Acquisitions%20and%20Disposals) In February 2025, the company completed the acquisition of 100% equity in Hangjin Energy, with China Energy Investment Corporation committing to a cumulative net profit attributable to owners of no less than RMB 383.1027 million for Hangjin Energy from September 2024 to 2029 - On January 21, 2025, the company's Board approved the acquisition of **100% equity in Hangjin Energy** held by China Energy Investment Corporation, with the transaction completed in February 2025[234](index=234&type=chunk) - China Energy Investment Corporation committed that Hangjin Energy's cumulative net profit attributable to owners of the parent company, after deducting non-recurring gains and losses and audited under China Accounting Standards, would be no less than **RMB 383.1027 million** for the period from September to December 2024 and the years 2025-2029[237](index=237&type=chunk) - For September-December 2024 and H1 2025, Hangjin Energy's net loss attributable to owners of the parent company, after deducting non-recurring gains and losses under China Accounting Standards, was **RMB 260.8727 million**[237](index=237&type=chunk) [3. Significant Related Party Transactions Involving Joint External Investments](index=81&type=section&id=3.%20Significant%20Related%20Party%20Transactions%20Involving%20Joint%20External%20Investments) During the reporting period, the company had no significant related party transactions involving joint external investments [4. Related Party Receivables and Payables](index=82&type=section&id=4.%20Related%20Party%20Receivables%20and%20Payables) As of the end of the reporting period, the company's outstanding funds provided to related parties totaled RMB 74,890 million, primarily deposits with the finance company, while funds received from related parties totaled RMB 16,730 million, mainly loans from the finance company Related Party Receivables and Payables (RMB million) | Related Party | Relationship | Closing Balance of Funds Provided to Related Parties | Closing Balance of Funds Provided by Related Parties to Listed Company | | :--- | :--- | :--- | :--- | | China Energy Investment Corporation | Controlling Shareholder | - | 0 | | Finance Company | Subsidiary of Controlling Shareholder | 74,495 | 14,680 | | Other Related Parties | Other | 395 | 2,050 | | **Total** | | **74,890** | **16,730** | - Related party receivables and payables primarily arose from the Group's long-term and short-term borrowings from China Energy Investment Corporation, the Group's deposits/loans with the finance company, and entrusted loans provided by the Group through banks to its subsidiaries and associates[240](index=240&type=chunk) [5. Related Party Transactions with the Finance Company](index=83&type=section&id=5.%20Related%20Party%20Transactions%20with%20the%20Finance%20Company) The finance company, a subsidiary of the controlling shareholder, provides financial services to the Group, with H1 2025 revenue of RMB 2,236 million and net profit of RMB 1,799 million, meeting all regulatory risk indicators Key Financial Indicators of Finance Company (H1 2025, Unaudited) | Indicator | Unit | H1 2025 | | :--- | :--- | :--- | | Operating Revenue | RMB million | 2,236 | | Total Profit | RMB million | 2,311 | | Net Profit | RMB million | 1,799 | | Total Assets (June 30, 2025) | RMB million | 307,723 | | Total Liabilities (June 30, 2025) | RMB million | 268,848 | | Owners' Equity (June 30, 2025) | RMB million | 38,875 | Key Risk Indicators of Finance Company (June 30, 2025) | No. | Monitoring Indicator | Indicator Requirement | June 30, 2025 | | :--- | :--- | :--- | :--- | | 1 | Capital adequacy ratio not lower than minimum regulatory requirement | ≥10.5% | 14.18% | | 2 | Liquidity ratio not lower than 25% | ≥25% | 46.08% | | 3 | Loan balance not higher than 80% of the sum of deposit balance and paid-in capital | ≤80% | 71.29% | | 4 | Total external liabilities not exceeding net capital | ≤100% | 0.00% | | 5 | Bill acceptance balance not exceeding 15% of total assets | ≤15% | 1.20% | | 6 | Bill acceptance balance not higher than 3 times interbank deposits | ≤300% | 20.32% | | 7 | Total bill acceptance and rediscounting not higher than net capital | ≤100% | 8.70% | | 8 | Acceptance bill margin balance not exceeding 10% of total deposits | ≤10% | 0.00% | | 9 | Total investment not higher than 70% of net capital | ≤70% | 47.35% | | 10 | Net fixed assets not higher than 20% of net capital | ≤20% | 0.02% | The Group's Deposit Business with Finance Company (H1 2025) | Related Party | Relationship | Maximum Daily Deposit Limit (RMB million) | Closing Balance (RMB million) | | :--- | :--- | :--- | :--- | | Finance Company | Subsidiary of Controlling Shareholder | 75,000 | 74,495 | The Group's Loan Business from Finance Company (H1 2025) | Related Party | Relationship | Loan Limit (RMB million) | Closing Balance (RMB million) | | :--- | :--- | :--- | :--- | | Finance Company | Subsidiary of Controlling Shareholder | 100,000 | 14,680 | [6. Other Significant Related Party Transactions](index=85&type=section&id=6.%20Other%20Significant%20Related%20Party%20Transactions) During the reporting period, the company had no other significant related party transactions [XI. Major Contracts and Their Performance](index=86&type=section&id=XI.%20Major%20Contracts%20and%20Their%20Performance) This section discloses the company's significant guarantees, entrusted wealth management, and entrusted loan situations, including a total guarantee balance of RMB 40.32 million, primarily for Hulunbeier Liangyi Railway, and overdue entrusted loans of RMB 395.37 million to Yili Chemical [1. Custody, Contracting, and Leasing Matters](index=86&type=section&id=1.%20Custody,%20Contracting,%20and%20Leasing%20Matters) During the reporting period, the company had no custody, contracting, or leasing matters [2. Significant Guarantees Performed and Outstanding during the Reporting Period](index=86&type=section&id=2.%20Significant%20Guarantees%20Performed%20and%20Outstanding%20during%20the%20Reporting%20Period) As of the end of the reporting period, the Group's total guarantee balance was RMB 40.32 million, primarily a joint liability guarantee by Baorixile Energy for Hulunbeier Liangyi Railway, which is experiencing deteriorating operations Total Guarantee Amount (June 30, 2025) | Indicator | Amount (RMB million) | | :--- | :--- | | Total guarantee balance at end of reporting period (A) | 40.32 | | Total guarantee balance for subsidiaries at end of reporting period (B) | 0 | | **Total guarantee amount (A+B)** | **40.32** | | Percentage of total guarantee amount to net assets attributable to owners of the Company under China Accounting Standards at end of reporting period (%) | 0.01 | | Debt guarantee amount provided directly or indirectly for guaranteed parties with asset-liability ratio exceeding 70% (D) | 40.32 | | Total of the above three guarantee amounts (C+D+E) | 40.32 | - Baorixile Energy, a 56.61% owned subsidiary of the company, provided a joint and several liability guarantee for the syndicated loan of Hulunbeier Liangyi Railway Co., Ltd. (in which Baorixile Energy holds a 14.22% equity interest), with a maximum guarantee amount of **RMB 67 million**[258](index=258&type=chunk)[381](index=381&type=chunk) - Liangyi Railway Co., Ltd.'s operating performance deteriorated, and Baorixile Energy has cumulatively injected **RMB 11.82 million** in capital and cumulatively repaid **RMB 125.85 million** in loan principal on a pro-rata basis; Baorixile Energy has fully provided for impairment on its equity interest in Liangyi Railway Co., Ltd. and the repaid amount[258](index=258&type=chunk)[259](index=259&type=chunk) [3. Entrusted Cash Asset Management](index=88&type=section&id=3.%20Entrusted%20Cash%20Asset%20Management) In H1 2025, the Group's entrusted wealth management amounted to RMB 17,300 million, with an outstanding balance of RMB 7,100 million in structured deposits, and overdue entrusted loans of RMB 395.37 million to associate Yili Chemical, which is secured Overall Entrusted Wealth Management (RMB million) | Product Type | Source of Funds | Amount Incurred during Reporting Period | Outstanding Balance at End of Reporting Period | Overdue Unrecovered Amount | | :--- | :--- | :--- | :--- | :--- | | Structured Deposits | Own Funds | 17,300 | 7,100 | 0 | - All wealth management products purchased by the company in 2024 and maturing in H1 2025 had their principal fully recovered on maturity, realizing total income of **RMB 59.3 million**; wealth management products purchased in H1 2025 and maturing within the reporting period also had their principal fully recovered on maturity, realizing total income of **RMB 37.78 million**[266](index=266&type=chunk) Overall Entrusted Loans (RMB million) | Product Type | Source of Funds | Amount Incurred during Reporting Period | Outstanding Balance at End of Reporting Period | Overdue Unrecovered Amount | | :--- | :--- | :--- | :--- | :--- | | Entrusted Loans | Own Funds | 395.37 | 0 | 395.37 | - The **RMB 400.0 million** entrusted loan from Shendong Power, a wholly-owned subsidiary of the company, to its associate Inner Mongolia Yili Chemical Industry Co., Ltd. matured on December 23, 2023; as of the end of the reporting period, Yili Chemical had repaid **RMB 4.63 million** of the principal, and the remaining entrusted loan has been secured through asset mortgages and other guarantee measures[272](index=272&type=chunk) [Section VII. Share Changes and Shareholder Information](index=92&type=section&id=Section%20VII.%20Share%20Changes%20and%20Shareholder%20Information) This section details the company's unchanged share capital structure in H1 2025, including total ordinary shares, shareholder count, top ten shareholders, and major shareholders' equity and short positions [I. Changes in Share Capital](index=92&type=section&id=I.%20Changes%20in%20Share%20Capital) During the reporting period

[Interim Results Announcement](index=1&type=section&id=Interim%20Results%20Announcement) [Financial Highlights](index=1&type=section&id=Financial%20Highlights) Guorui Lifestyle Co., Ltd. announced its unaudited interim results for the six months ended June 30, 2025, with revenue of approximately HKD 171 million, profit before tax of HKD 4 million, and profit attributable to company shareholders of HKD 2.1 million, showing significant year-on-year growth in profitability 2025 H1 Financial Highlights | Metric | 2025 H1 (HKD '000) | 2024 H1 (HKD '000) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 170,700 | 178,200 | -4.2% | | Profit before tax | 4,000 | 700 | +471.4% | | Profit attributable to company shareholders | 2,100 | 300 | +600.0% | [Condensed Consolidated Financial Statements](index=2&type=section&id=Condensed%20Consolidated%20Financial%20Statements) [Condensed Consolidated Statement of Profit or Loss](index=2&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss) For the six months ended June 30, 2025, the Group's revenue was HKD 170,723 thousand, with profit for the period at HKD 1,402 thousand, and basic and diluted earnings per share of HK 0.07 cents Condensed Consolidated Statement of Profit or Loss Key Data | Metric | 2025 H1 (HKD '000) | 2024 H1 (HKD '000) | | :--- | :--- | :--- | | Revenue | 170,723 | 178,214 | | Other income and gains, net | 11,581 | 19,384 | | Employee benefit expenses | (40,413) | (49,656) | | Finance costs | (61,146) | (68,132) | | Profit before tax | 4,014 | 700 | | Income tax expense | (2,612) | (418) | | Profit for the period | 1,402 | 282 | | Profit attributable to company shareholders | 2,091 | 282 | | Basic and diluted earnings per share (HK cents) | 0.07 | 0.01 | [Condensed Consolidated Statement of Comprehensive Income](index=3&type=section&id=Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) Total comprehensive income for the period was HKD 57,104 thousand, primarily driven by exchange differences on translation of overseas operations, with HKD 57,793 thousand attributable to company shareholders Condensed Consolidated Statement of Comprehensive Income Key Data | Metric | 2025 H1 (HKD '000) | 2024 H1 (HKD '000) | | :--- | :--- | :--- | | Profit for the period | 1,402 | 282 | | Exchange differences on translation of overseas operations | 55,702 | (62,809) | | Fair value changes of equity investments at fair value through other comprehensive income | – | 628 | | Total comprehensive income for the period | 57,104 | (61,899) | | Attributable to company shareholders | 57,793 | (61,899) | | Attributable to non-controlling interests | (689) | – | [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 to HKD 5,678,773 thousand, with net assets of HKD 2,189,614 thousand and net current liabilities of HKD 288,527 thousand, primarily driven by investment properties and bank borrowings Condensed Consolidated Statement of Financial Position Key Data | Metric | June 30, 2025 (HKD '000) | Dec 31, 2024 (HKD '000) | | :--- | :--- | :--- | | Total non-current assets | 4,676,270 | 4,470,406 | | Total current assets | 1,002,503 | 953,065 | | Total current liabilities | 1,291,030 | 1,252,092 | | Net current liabilities | (288,527) | (299,027) | | Total assets less current liabilities | 4,387,743 | 4,171,379 | | Total non-current liabilities | 2,198,129 | 2,038,869 | | Net assets | 2,189,614 | 2,132,510 | | Total equity | 2,189,614 | 2,132,510 | [Notes to the Condensed Consolidated Interim Financial Information](index=6&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Interim%20Financial%20Information) [Company and Group Information](index=6&type=section&id=Company%20and%20Group%20Information) Guorui Lifestyle Co., Ltd. is a Hong Kong-listed company primarily engaged in property development and investment in the UK, US, and mainland China, alongside property management services in mainland China - The company's principal activities include property development and investment in the UK, US, and mainland China, as well as property management services in mainland China[9](index=9&type=chunk)[12](index=12&type=chunk) - The company's immediate holding company is Wintime Company Limited, and its ultimate holding company is Widewealth Company Limited[9](index=9&type=chunk) [Basis of Preparation and Accounting Policies](index=6&type=section&id=Basis%20of%20Preparation%20and%20Accounting%20Policies) This interim condensed consolidated financial information is prepared in accordance with HKAS 34 and Appendix D2 of the Listing Rules, adopting consistent accounting policies with the annual financial statements, with the exception of newly adopted HKFRS amendments - This unaudited interim condensed consolidated financial information is prepared in accordance with HKAS 34 and the applicable disclosure requirements of Appendix D2 of the Listing Rules[10](index=10&type=chunk)[14](index=14&type=chunk) - Accounting policies are consistent with the prior year, with the initial adoption of revised HKFRS accounting standards, where HKAS 21 (Amendment) has no material impact on financial position[10](index=10&type=chunk)[15](index=15&type=chunk)[16](index=16&type=chunk) - The Group has net current liabilities of **HKD 289 million**, but management believes it can continue as a going concern based on factors including bank loan renewal negotiations, shareholder loan support, and designated remedial account deposits[13](index=13&type=chunk)[17](index=17&type=chunk) [Basis of Preparation](index=6&type=section&id=Basis%20of%20Preparation) This unaudited interim condensed consolidated financial information is prepared in accordance with HKAS 34 and Appendix D2 of the Listing Rules - This unaudited interim condensed consolidated financial information is prepared in accordance with HKAS 34 and the applicable disclosure requirements of Appendix D2 of the Listing Rules[10](index=10&type=chunk) [Basis of Presentation and Going Concern](index=7&type=section&id=Basis%20of%20Presentation%20and%20Going%20Concern) As of June 30, 2025, the Group had net current liabilities of HKD 289 million, but management is actively pursuing refinancing and has secured shareholder loan support to ensure going concern - As of June 30, 2025, the Group's net current liabilities were **HKD 289 million**, including **HKD 784 million** in bank and other borrowings due within one year[13](index=13&type=chunk) - Management is negotiating with lenders for the renewal of bank loans for the Culver City project and UK investment properties, confident that loans will be refinanced before maturity[17](index=17&type=chunk) - The Group has secured **GBP 18 million** in shareholder loans from Mr. Wei Chunxian and **HKD 200 million** from Gangrui International Investment (Hong Kong) Co., Ltd., with **HKD 108 million** unutilized, providing liquidity support[17](index=17&type=chunk) [Changes in Accounting Policies and Disclosures](index=7&type=section&id=Changes%20in%20Accounting%20Policies%20and%20Disclosures) Newly adopted revised HKFRS accounting standards, such as HKAS 21 (Amendment) on lack of exchangeability, have no material impact on the Group's current or prior period results - Newly adopted revised HKFRS accounting standards, such as HKAS 21 (Amendment) "Lack of Exchangeability", have no material impact on the Group's current or prior period results and financial position[15](index=15&type=chunk)[16](index=16&type=chunk) [Operating Segment Information](index=8&type=section&id=Operating%20Segment%20Information) The Group operates two reportable segments: property development and investment (UK, US, mainland China) and property management (mainland China), with performance assessed by segment profit/loss - The Group has two reportable operating segments: property development and investment (in the UK, US, and mainland China) and property management (in mainland China)[18](index=18&type=chunk)[20](index=20&type=chunk) Operating Segment Performance Overview (2025 H1) | Segment | Revenue (HKD '000) | Results (HKD '000) | | :--- | :--- | :--- | | Property Development and Investment | 76,091 | (1,428) | | Property Management | 94,632 | 19,536 | | **Total** | **170,723** | **18,108** | | Profit before tax (after reconciliation) | | 4,014 | Operating Segment Assets and Liabilities Overview (June 30, 2025) | Segment | Assets (HKD '000) | Liabilities (HKD '000) | | :--- | :--- | :--- | | Property Development and Investment | 5,252,291 | 2,837,281 | | Property Management | 350,852 | 259,362 | | **Total** | **5,603,143** | **3,096,643** | | Total assets (after reconciliation) | 5,678,773 | | | Total liabilities (after reconciliation) | | 3,489,159 | [Revenue](index=10&type=section&id=Revenue) Total Group revenue for the period was HKD 170,723 thousand, primarily from property management services (HKD 94,632 thousand) and rental income from investment properties (HKD 76,091 thousand), with all customer contract revenue generated in mainland China Revenue Source Analysis (2025 H1) | Revenue Source | 2025 H1 (HKD '000) | 2024 H1 (HKD '000) | | :--- | :--- | :--- | | Revenue from contracts with customers (Property management and other services) | 94,632 | 94,068 | | Gross rental income from investment properties under operating leases | 76,091 | 84,146 | | **Total** | **170,723** | **178,214** | - All revenue from contracts with customers is generated in mainland China[24](index=24&type=chunk)[26](index=26&type=chunk) [Other Income and Gains, Net](index=12&type=section&id=Other%20Income%20and%20Gains%2C%20Net) Net other income and gains for the period decreased to HKD 11,581 thousand from HKD 19,384 thousand in the prior year, mainly due to reduced bank interest, loan interest, and financial guarantee income Other Income and Gains, Net (2025 H1) | Item | 2025 H1 (HKD '000) | 2024 H1 (HKD '000) | | :--- | :--- | :--- | | Bank interest income | 1,630 | 5,525 | | Interest income from loans receivable | 1,424 | 2,015 | | Financial guarantee income | 2,297 | 5,239 | | Others | 6,153 | 6,516 | | **Total** | **11,581** | **19,384** | [Finance Costs](index=12&type=section&id=Finance%20Costs) Total finance costs for the period were HKD 74,840 thousand, reduced to HKD 61,146 thousand after capitalization, a decrease from HKD 68,132 thousand in the prior year, with bank and financial institution loan interest remaining the largest component Finance Costs Analysis (2025 H1) | Item | 2025 H1 (HKD '000) | 2024 H1 (HKD '000) | | :--- | :--- | :--- | | Interest on bank and financial institution loans | 66,409 | 76,752 | | Interest on company shareholder loans | 5,666 | 809 | | Interest on perpetual convertible bonds | 1,314 | 1,252 | | Total finance costs | 74,840 | 83,462 | | Less: Amount capitalized for investment properties under construction | (13,694) | (15,330) | | **Net finance costs** | **61,146** | **68,132** | [Profit Before Tax](index=13&type=section&id=Profit%20Before%20Tax) Profit before tax for the period significantly increased to HKD 4,014 thousand from HKD 700 thousand in the prior year, with key expenses including depreciation of property, plant, and equipment, right-of-use assets, and amortization of computer software Profit Before Tax Related Expenses (2025 H1) | Item | 2025 H1 (HKD '000) | 2024 H1 (HKD '000) | | :--- | :--- | :--- | | Depreciation of property, plant and equipment | 166 | 383 | | Depreciation of right-of-use assets | 207 | 847 | | Amortisation of computer software | 130 | 84 | | Exchange differences, net | (491) | 501 | [Income Tax Expense](index=13&type=section&id=Income%20Tax%20Expense) Total income tax expense for the period was HKD 2,612 thousand, primarily comprising current tax in mainland China and deferred tax, with no provision for Hong Kong profits tax Income Tax Expense Analysis (2025 H1) | Item | 2025 H1 (HKD '000) | 2024 H1 (HKD '000) | | :--- | :--- | :--- | | Current – Mainland China | 711 | 418 | | Deferred | 1,901 | – | | **Total tax expense for the period** | **2,612** | **418** | - No provision for Hong Kong profits tax was made for the period as the Group did not generate any assessable profits in Hong Kong[30](index=30&type=chunk) [Earnings Per Share Attributable to Company Shareholders](index=14&type=section&id=Earnings%20Per%20Share%20Attributable%20to%20Company%20Shareholders) Basic and diluted earnings per share attributable to company shareholders for the six months ended June 30, 2025, increased to HK 0.07 cents from HK 0.01 cents, with perpetual convertible bonds having an anti-dilutive effect Earnings Per Share Calculation Data (2025 H1) | Metric | 2025 H1 | 2024 H1 | | :--- | :--- | :--- | | Profit for the period attributable to company shareholders (HKD '000) | 2,091 | 282 | | Weighted average number of ordinary shares in issue | 3,213,296,638 | 3,199,373,986 | | **Basic and diluted earnings per share (HK cents)** | **0.07** | **0.01** | - Perpetual convertible bonds have an anti-dilutive effect, and unexercised share options had no dilutive impact on the presented earnings per share, thus no dilution adjustment was made to basic earnings per share[31](index=31&type=chunk) [Investment Properties](index=15&type=section&id=Investment%20Properties) As of June 30, 2025, investment properties increased to HKD 4,671,679 thousand, with additions of HKD 76,815 thousand, a net fair value loss of HKD 11,171 thousand, and all properties pledged as collateral Investment Properties Carrying Amount Movement (2025 H1) | Item | Amount (HKD '000) | | :--- | :--- | | Carrying amount at January 1, 2025 | 4,466,719 | | Additions | 76,815 | | Net loss from fair value adjustments | (11,171) | | Transfer from properties held for sale | 21,509 | | Exchange adjustments | 117,807 | | **Carrying amount at June 30, 2025** | **4,671,679** | - Completed investment properties include commercial buildings in London, UK, a mixed-use commercial and residential property in Santa Monica, Los Angeles, US, and commercial buildings in Beijing, China[35](index=35&type=chunk) - All investment properties are pledged as collateral for financial guarantee contracts, bank financing, and financial institution loans[35](index=35&type=chunk) [Trade and Lease Receivables](index=16&type=section&id=Trade%20and%20Lease%20Receivables) As of June 30, 2025, total trade and lease receivables were HKD 202,791 thousand, with a net amount of HKD 167,806 thousand after impairment, and HKD 110,583 thousand due within one year Trade and Lease Receivables Overview (June 30, 2025) | Item | June 30, 2025 (HKD '000) | Dec 31, 2024 (HKD '000) | | :--- | :--- | :--- | | Trade receivables | 132,848 | 115,846 | | Lease receivables | 69,943 | 64,873 | | Total | 202,791 | 180,719 | | Less: Impairment | (34,985) | (35,078) | | **Net amount** | **167,806** | **145,641** | Trade and Lease Receivables Ageing Analysis (June 30, 2025) | Ageing | June 30, 2025 (HKD '000) | Dec 31, 2024 (HKD '000) | | :--- | :--- | :--- | | Within 1 year | 110,583 | 104,334 | | 1 to 2 years | 23,234 | 15,159 | | 2 to 3 years | 33,989 | 26,148 | | **Total** | **167,806** | **145,641** | [Trade Payables](index=16&type=section&id=Trade%20Payables) As of June 30, 2025, total trade payables decreased to HKD 53,030 thousand from HKD 71,016 thousand, with an average credit period of 60 days and no interest charged Trade Payables Ageing Analysis (June 30, 2025) | Ageing | June 30, 2025 (HKD '000) | Dec 31, 2024 (HKD '000) | | :--- | :--- | :--- | | Within 3 months | 47,238 | 28,655 | | 4 to 6 months | 990 | 12,387 | | 7 to 12 months | 1,441 | 25,010 | | Over 1 year | 3,361 | 4,964 | | **Total** | **53,030** | **71,016** | - Trade payables are non-interest bearing with an average credit period of **60 days**[37](index=37&type=chunk) [Perpetual Convertible Bonds](index=17&type=section&id=Perpetual%20Convertible%20Bonds) As of June 30, 2025, the company had two tranches of outstanding perpetual convertible bonds totaling HKD 1,152,059 thousand, with a conversion price of HKD 0.80 per share, and HKD 16,000 thousand of the first tranche converted into ordinary shares Perpetual Convertible Bonds Overview (June 30, 2025) | Item | First Tranche | Second Tranche | | :--- | :--- | :--- | | Issue Date | August 17, 2018 | December 31, 2021 | | Maturity Date | No maturity date | No maturity date | | Original Principal Amount | HKD 1,102,993,200 | HKD 77,066,000 | | Coupon Rate | 1% per annum (terminates after 5th anniversary of issue) | 1% per annum (terminates after 5th anniversary of issue) | | Conversion Price (per ordinary share) | HKD 0.80 | HKD 0.80 | Perpetual Convertible Bonds Movement (2025 H1) | Item | First Tranche (HKD '000) | Second Tranche (HKD '000) | Total (HKD '000) | | :--- | :--- | :--- | :--- | | Outstanding principal amount at January 1, 2025 | 1,090,993 | 77,066 | 1,168,059 | | Converted into ordinary shares | (16,000) | – | (16,000) | | **Outstanding principal amount at June 30, 2025** | **1,074,993** | **77,066** | **1,152,059** | | Liability component at January 1, 2025 | 45,212 | 2,626 | 47,838 | | Interest expense | 1,242 | 72 | 1,314 | | **Liability component at June 30, 2025** | **46,454** | **2,698** | **49,152** | | Equity component at January 1, 2025 | 1,078,217 | 94,027 | 1,172,244 | | Transferred to share capital upon conversion to ordinary shares | (15,813) | – | (15,813) | | **Equity component at June 30, 2025** | **1,062,404** | **94,027** | **1,156,431** | - Conversion of perpetual convertible bonds is subject to the condition that it does not result in the public float of the company's shares being less than **25%** of the total issued shares[42](index=42&type=chunk) [Share Capital](index=19&type=section&id=Share%20Capital) As of June 30, 2025, the company's issued and fully paid share capital increased to HKD 3,168,384 thousand from HKD 3,152,571 thousand, due to the issuance of 20,000,000 ordinary shares from perpetual convertible bond conversion Share Capital Movement Overview (2025 H1) | Item | Number of Shares | Share Capital (HKD '000) | | :--- | :--- | :--- | | At January 1, 2025 | 3,199,373,986 | 3,152,571 | | Shares issued upon conversion of perpetual convertible bonds | 20,000,000 | 15,813 | | **At June 30, 2025** | **3,219,373,986** | **3,168,384** | [Share Option Scheme](index=19&type=section&id=Share%20Option%20Scheme) As of June 30, 2025, 30,000,000 share options remained unexercised under the company's scheme, representing approximately 0.9% of total issued shares, with no options exercised or cancelled during the period - The share option scheme, adopted on November 7, 2016, has a **ten-year validity** and aims to incentivize and retain talent[44](index=44&type=chunk) - **30,000,000 share options** were granted to an employee on April 28, 2023, with an exercise price of **HKD 0.922 per share**, vested on April 28, 2024, and exercisable until April 27, 2026[45](index=45&type=chunk)[67](index=67&type=chunk) - As of June 30, 2025, the total number of unexercised share options under the scheme was **30,000,000**, representing approximately **0.9%** of the company's total issued shares, with no options exercised or cancelled during the period[68](index=68&type=chunk)[69](index=69&type=chunk) [Comparative Amounts](index=19&type=section&id=Comparative%20Amounts) Certain comparative amounts have been reclassified to align with the presentation and disclosures for the current period - Certain comparative amounts have been reclassified to align with the presentation and disclosures for the current period[46](index=46&type=chunk) [Management Discussion and Analysis](index=20&type=section&id=Management%20Discussion%20and%20Analysis) [Business Review](index=20&type=section&id=Business%20Review) The Group's operations are divided into property management (China) and property development and investment (China, US, UK), encompassing several key projects - The Group has two reportable operating segments: property management (China) and property development and investment (China, US, and UK)[47](index=47&type=chunk) [Property Management Segment](index=20&type=section&id=Property%20Management%20Segment) Beijing Aoxi Property Management Co., Ltd., a wholly-owned subsidiary, manages 20 large residential and commercial properties in China, providing comprehensive services - Wholly-owned subsidiary Beijing Aoxi Property Management Co., Ltd. manages **20 large residential and commercial property projects** in China, offering heating, parking management, and general property management services[48](index=48&type=chunk) - Aoxi adheres to a people-oriented principle, continuously improving its management system and providing professional services[48](index=48&type=chunk) [Property Development and Investment Segment](index=20&type=section&id=Property%20Development%20and%20Investment%20Segment) The property development and investment segment includes key projects such as Santa Monica (US), Culver City (US), Juxon House (UK), and Guorui Plaza Block B (China), with varying occupancy and development statuses - The Santa Monica project (US) has an average occupancy of approximately **91%** for commercial areas and **100%** for residential areas[50](index=50&type=chunk) - The Culver City project (US) is a **36,319 sq ft** redevelopment site planned for **139 residential units** and commercial space, with construction commencing in September 2021, marking a milestone for consolidating US Western region operations[51](index=51&type=chunk) - Juxon House (London, UK) is a Grade A commercial building, leased to two office tenants and three retail tenants, contributing approximately **GBP 2.5 million** in rental income[52](index=52&type=chunk) - Guorui Plaza Block B (Beijing, China), with a total floor area of approximately **68,685 square meters**, plans to sell or lease units, with some currently leased on medium to long-term agreements[53](index=53&type=chunk) [Financial Review](index=22&type=section&id=Financial%20Review) For the period, the Group's revenue was approximately HKD 171 million, with profit for the period at HKD 1.4 million, a significant increase year-on-year, primarily due to reduced operating expenses and finance costs, resulting in a gearing ratio of 120.4% Financial Performance Overview | Metric | 2025 H1 (HKD '000) | 2024 H1 (HKD '000) | | :--- | :--- | :--- | | Revenue | 170,723 | 178,214 | | Profit for the period | 1,402 | 282 | | Total assets (June 30, 2025 vs Dec 31, 2024) | 5,678,773 | 5,423,471 | | Total liabilities (June 30, 2025 vs Dec 31, 2024) | 3,489,159 | 3,290,961 | | Net assets (June 30, 2025 vs Dec 31, 2024) | 2,189,614 | 2,132,510 | | Net debt (June 30, 2025 vs Dec 31, 2024) | 2,695,391 | 2,412,335 | | Capital liquidity ratio (June 30, 2025 vs Dec 31, 2024) | 0.08 | 0.15 | | Gearing ratio (June 30, 2025 vs Dec 31, 2024) | 120.4% | 110.7% | - The increase in profit is primarily attributable to reduced employee benefit expenses, utilities, repairs and maintenance, rental expenses, and finance costs[55](index=55&type=chunk) [Borrowings and Cash](index=23&type=section&id=Borrowings%20and%20Cash) As of June 30, 2025, outstanding bank and other borrowings totaled approximately HKD 2.795 billion, with HKD 783 million due within one year, largely secured by properties, and cash and bank balances decreased to HKD 99.42 million - Outstanding bank and other borrowings totaled approximately **HKD 2,794,813 thousand**, with approximately **HKD 783,476 thousand** due within one year[56](index=56&type=chunk) - Borrowings are primarily secured by Juxon House, certain parts of Guorui Plaza Block B, trade and lease receivables, US mixed-use properties and their receivables, and the right to receive future receivables from the Culver City project[56](index=56&type=chunk) - Approximately **HKD 1,813,237 thousand** of borrowings bear fixed interest rates, while approximately **HKD 980,478 thousand** bear floating interest rates[56](index=56&type=chunk) - Cash and bank balances decreased to approximately **HKD 99,422 thousand** from HKD 193,151 thousand as of December 31, 2024[57](index=57&type=chunk) [Foreign Currency Risk](index=23&type=section&id=Foreign%20Currency%20Risk) The Group's operations are primarily conducted in HKD, RMB, GBP, and USD, with approximately HKD 2.7 billion in non-functional currency borrowings and significant cash holdings in multiple currencies, and currently no hedging policy is in place - The Group's principal operating currencies are HKD, RMB, GBP, and USD, with approximately **HKD 2,702,160 thousand** in borrowings denominated in non-functional currencies[58](index=58&type=chunk) - As of June 30, 2025, cash and cash equivalents and restricted cash denominated in currencies other than the functional currency amounted to approximately **HKD 283,067 thousand**, mainly in RMB, GBP, and USD[59](index=59&type=chunk) - The Group currently has no foreign currency hedging policy but will closely monitor exchange rate trends and take appropriate measures[59](index=59&type=chunk) [Treasury Policy](index=24&type=section&id=Treasury%20Policy) The Group adopts prudent financial management practices, maintaining adequate liquidity and mitigating credit risk through continuous credit assessments, with the Board closely monitoring liquidity to meet funding needs - The Group adopts prudent financial management measures, maintaining appropriate liquidity and striving to mitigate credit risk through continuous credit assessments of customers' financial positions[60](index=60&type=chunk) - The Board closely monitors the Group's liquidity position to ensure its liquidity structure for assets, liabilities, and commitments can meet its funding requirements from time to time[60](index=60&type=chunk) [Human Resources and Remuneration Policy](index=24&type=section&id=Human%20Resources%20and%20Remuneration%20Policy) As of June 30, 2025, the Group employed 487 staff, mostly in China, with total employee remuneration of HKD 40.41 million for the period, determined by merit, qualifications, ability, industry experience, Group profitability, and market conditions, including bonus arrangements - As of June 30, 2025, the Group had a total of **487 employees** (June 30, 2024: 468 employees), with the majority working in China[61](index=61&type=chunk) - Total employee remuneration for the period was approximately **HKD 40,413 thousand**, a decrease from HKD 49,656 thousand in the prior year[61](index=61&type=chunk) - Remuneration is determined based on merit, qualifications, ability, industry experience, Group profitability, and market conditions, with bonus arrangements in place[61](index=61&type=chunk) [Interim Dividend](index=24&type=section&id=Interim%20Dividend) The Board of Directors resolved not to declare any interim dividend for the current period - The Board of Directors resolved not to declare any interim dividend for the current period (six months ended June 30, 2024: nil)[62](index=62&type=chunk) [Pledge of Assets](index=24&type=section&id=Pledge%20of%20Assets) As of June 30, 2025, the Group pledged approximately HKD 4.792 billion in investment properties and properties held for sale as collateral for borrowings, with additional pledges on trade and lease receivables and restricted bank deposits - As of June 30, 2025, the Group pledged a total of approximately **HKD 4,791,924 thousand** in investment properties and properties held for sale as collateral for bank and other borrowings[63](index=63&type=chunk) - Approximately **HKD 61,394 thousand** in trade and lease receivables were pledged as collateral for bank and other borrowings[64](index=64&type=chunk) - Approximately **HKD 10,279 thousand** in bank deposits were classified as restricted cash, serving as collateral for bank loans and financial institution loans[64](index=64&type=chunk) [Capital and Other Development Related Commitments and Contingent Liabilities](index=25&type=section&id=Capital%20and%20Other%20Development%20Related%20Commitments%20and%20Contingent%20Liabilities) As of June 30, 2025, the Group had no significant contingent liabilities, but had contracted but unprovided commitments of approximately HKD 61.66 million for an investment property under construction - As of June 30, 2025, the Group had no significant contingent liabilities[65](index=65&type=chunk) - For an investment property under construction, the Group had contracted but unprovided commitments of approximately **HKD 61,656 thousand**[65](index=65&type=chunk) [Significant Investments and Major Acquisitions and Disposals of Subsidiaries, Associates and Joint Ventures](index=25&type=section&id=Significant%20Investments%20and%20Major%20Acquisitions%20and%20Disposals%20of%20Subsidiaries%2C%20Associates%20and%20Joint%20Ventures) The Group had no significant investments or major acquisitions and disposals of subsidiaries, associates, and joint ventures during the period - The Group had no significant investments or major acquisitions or disposals of subsidiaries, associates, and joint ventures during the period[66](index=66&type=chunk) [Share Options](index=25&type=section&id=Share%20Options) As of June 30, 2025, 30,000,000 share options remained unexercised under the scheme, representing approximately 0.9% of total issued shares, with no options exercised or cancelled during the period - As of June 30, 2025, **30,000,000 share options** remained unexercised under the share option scheme, representing approximately **0.9%** of the company's total issued shares[68](index=68&type=chunk) - No share options were exercised or cancelled during the period[69](index=69&type=chunk) [Recent Developments](index=26&type=section&id=Recent%20Developments) Beijing Guorui Real Estate Development Co., Ltd. secured a RMB 700 million ten-year financing facility from Shengjing Bank at 4.0% annual interest, with Beijing Kaipeng Technology Development Co., Ltd. providing a joint liability guarantee and property mortgage - Beijing Guorui Real Estate Development Co., Ltd. entered into a financing agreement with Shengjing Bank for a maximum **RMB 700 million** ten-year facility at an annual interest rate of **4.0%**[70](index=70&type=chunk) - Beijing Kaipeng Technology Development Co., Ltd., a wholly-owned subsidiary, provided a joint liability guarantee and mortgaged properties in Beijing for this financing[70](index=70&type=chunk) - This mortgage and guarantee contract was approved by shareholders on August 15, 2025[71](index=71&type=chunk) [Future Outlook](index=26&type=section&id=Future%20Outlook) The Group will continue to focus on property development and investment, asset management, and value-added services, while actively exploring international investment opportunities and building an integrated "smart property + digital healthcare" ecosystem - The Group will continue to focus on property development and investment, related asset management, and value-added services, while prudently evaluating investment opportunities in international markets such as the US and Europe, actively expanding overseas business[72](index=72&type=chunk) - The Group has successfully entered the Los Angeles and London property markets and is committed to enhancing operational performance and promoting project development[72](index=72&type=chunk) - Future plans include increasing investment in property management and other services in global core cities and building an integrated "smart property + digital healthcare" ecosystem, focusing on family doctor services, home-based elderly care, chronic disease management, and community health services[74](index=74&type=chunk) [Corporate Governance and Other Information](index=27&type=section&id=Corporate%20Governance%20and%20Other%20Information) [Purchase, Sale or Redemption of Listed Securities](index=27&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20Listed%20Securities) Neither the company nor its subsidiaries purchased, sold, or redeemed any of its listed securities during the period, and there were no treasury shares - Neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities during the period[75](index=75&type=chunk) - As of the date of this interim results announcement, the company held no treasury shares during the period[76](index=76&type=chunk) [Corporate Governance Code](index=27&type=section&id=Corporate%20Governance%20Code) The company complied with the Corporate Governance Code during the period, except for the combined roles of Chairman and Chief Executive Officer, which the Board believes maintains sufficient balance of power and authority - The company complied with the Corporate Governance Code during the period, except for the combined roles of Chairman and Chief Executive Officer (Mr. Wei Chunxian)[77](index=77&type=chunk) - The Board believes that the balance of power and authority between the Board and the company's management is sufficient, as all major decisions are made by the Board[77](index=77&type=chunk) [Compliance with the Model Code for Securities Transactions by Directors](index=27&type=section&id=Compliance%20with%20the%20Model%20Code%20for%20Securities%20Transactions%20by%20Directors) The company adopted the Model Code for Securities Transactions by Directors of Listed Issuers, and all directors confirmed compliance with its required standards during the period - The company adopted the Model Code for Securities Transactions by Directors of Listed Issuers as its code of conduct[78](index=78&type=chunk) - All directors confirmed compliance with the required standards set out in the Model Code throughout the period[78](index=78&type=chunk) [Audit Committee](index=28&type=section&id=Audit%20Committee) The Audit Committee, comprising three independent non-executive directors, is responsible for reviewing and overseeing the Group's financial reporting, internal controls, and risk management, and has reviewed the interim results for the period - The Audit Committee is responsible for reviewing and overseeing the Group's financial reporting process, internal controls, and risk management procedures, and has reviewed the interim results for the period[79](index=79&type=chunk) - As of June 30, 2025, the Audit Committee comprised three independent non-executive directors: Mr. Dong Huanzhang (Chairman), Ms. Du Ziyun, and Mr. Liang Haoming[79](index=79&type=chunk) [Sufficient Public Float](index=28&type=section&id=Sufficient%20Public%20Float) As of the date of this interim results announcement, the company maintained a sufficient public float throughout the period in accordance with the Listing Rules - As of the date of this interim results announcement, the company maintained a sufficient public float throughout the period in accordance with the Listing Rules[80](index=80&type=chunk) [Publication of Results on Websites](index=28&type=section&id=Publication%20of%20Results%20on%20Websites) In accordance with the Listing Rules, the company has published its results on the websites of The Stock Exchange of Hong Kong Limited and the company's own website - In accordance with the Listing Rules, the company has published its results on the websites of The Stock Exchange of Hong Kong Limited (www.hkexnews.hk) and the company (www.grlifestyle.com.hk)[81](index=81&type=chunk)

[Corporate Information](index=4&type=section&id=Corporate%20Information) [Corporate Information Overview](index=4&type=section&id=Corporate%20Information%20Overview) The report discloses key corporate information for Zall Smart Commerce Group Ltd, including its board members, committee compositions, company secretary, auditors, and principal bankers - The Board of Directors includes Chairman and CEO Mr Wang Lei, and executive directors Mr Cai Wenhao and Ms Wu Mengmeng[10](index=10&type=chunk) - The Audit, Remuneration, Nomination, and Risk Management Committees are chaired or composed of independent non-executive directors, with Mr Zhao Wei resigning and Mr Wu Guoyong appointed on June 30, 2025[10](index=10&type=chunk) - The company's auditor is Cheng & Cheng (Hong Kong) CPA Limited, and its Hong Kong share registrar is Tricor Investor Services Limited[10](index=10&type=chunk)[11](index=11&type=chunk) [Interim Results](index=6&type=section&id=Interim%20Results) [Unaudited Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=6&type=section&id=Unaudited%20Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For the six months ended June 30, 2025, the Group's revenue decreased by 13.0% year-on-year to S$8,207 thousand, while the loss for the period widened to S$2,300 thousand Key Data from the Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income | Indicator | Six months ended June 30, 2025 (S$'000) | Six months ended June 30, 2024 (S$'000) | | :--- | :--- | :--- | | Revenue | 8,207 | 9,433 | | Other income and gains | 416 | 107 | | Loss before tax | (2,300) | (2,118) | | Loss for the period | (2,300) | (2,122) | | Loss for the period attributable to owners of the Company | (2,157) | (1,754) | | Basic loss per share (Singapore cents per share) | (4.59) | (4.39) | [Unaudited Condensed Consolidated Statement of Financial Position](index=7&type=section&id=Unaudited%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the Group's total net assets increased to S$9,512 thousand, mainly due to an increase in equity attributable to owners of the Company, despite a decrease in total non-current assets Key Data from the Condensed Consolidated Statement of Financial Position | Indicator | As at June 30, 2025 (S$'000) | As at December 31, 2024 (S$'000) | | :--- | :--- | :--- | | Total non-current assets | 4,976 | 5,664 | | Total current assets | 17,693 | 16,299 | | Total current liabilities | 10,842 | 10,396 | | Net current assets | 6,851 | 5,903 | | Net assets | 9,512 | 8,813 | | Equity attributable to owners of the Company | 9,722 | 8,880 | [Unaudited Condensed Consolidated Statement of Changes in Equity](index=8&type=section&id=Unaudited%20Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) For the six months ended June 30, 2025, the Group's total equity increased to S$9,512 thousand, primarily driven by a S$2,783 thousand increase in share capital from the issuance of new shares via placing Key Data from the Condensed Consolidated Statement of Changes in Equity | Indicator | As at June 30, 2025 (S$'000) | As at January 1, 2024 (S$'000) | | :--- | :--- | :--- | | Share capital | 1,074 | 900 | | Share premium account | 11,591 | 8,982 | | Accumulated losses | (7,130) | (6,465) | | Total equity | 9,512 | 6,108 | - In the first half of 2025, the issuance of new shares through placing increased share capital by S$174 thousand and share premium by S$2,609 thousand, totaling S$2,783 thousand[16](index=16&type=chunk) [Unaudited Condensed Consolidated Statement of Cash Flows](index=9&type=section&id=Unaudited%20Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) For the six months ended June 30, 2025, the Group's net decrease in cash and cash equivalents was S$3,586 thousand, mainly due to cash outflows from operating and investing activities Key Data from the Condensed Consolidated Statement of Cash Flows | Indicator | Six months ended June 30, 2025 (S$'000) | Six months ended June 30, 2024 (S$'000) | | :--- | :--- | :--- | | Net cash from operating activities | (3,380) | (550) | | Net cash used in investing activities | (1,553) | (1,508) | | Net cash from financing activities | 1,347 | 1,639 | | Net decrease in cash and cash equivalents | (3,586) | (419) | | Cash and cash equivalents at end of period | 1,765 | 2,511 | [Notes to the Unaudited Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20the%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) This section details the basis of preparation, principal accounting policies, and composition of various financial items, including revenue, losses, share capital, receivables, payables, and borrowings [1. General Information](index=10&type=section&id=1.%20General%20Information) Zall Smart Commerce Group Ltd was incorporated in the Cayman Islands on March 17, 2016, with principal businesses in passenger car services and smart kitchen appliances - The company was incorporated in the Cayman Islands on March 17, 2016[18](index=18&type=chunk) - Principal businesses include passenger car services (maintenance, repair, modification, parts trading, auto financing, sales) and smart kitchen appliance business (development, manufacturing, consulting, sales)[19](index=19&type=chunk)[20](index=20&type=chunk) [2. Basis of Preparation](index=10&type=section&id=2.%20Basis%20of%20Preparation) The financial statements are prepared in accordance with IFRS, presented in Singapore dollars, and based on the historical cost convention, except for life insurance policy investments measured at fair value - The financial statements are prepared in accordance with International Financial Reporting Standards (IFRS) and presented in Singapore dollars[19](index=19&type=chunk) - The adoption of new and revised IFRS did not have a significant impact on the Group's accounting policies or financial performance[19](index=19&type=chunk) [3. Revenue](index=12&type=section&id=3.%20Revenue) For the six months ended June 30, 2025, the Group's total revenue was S$8,207 thousand, a 13.0% decrease from the prior year, mainly due to lower maintenance service income Revenue Composition and Year-on-Year Change | Revenue Source | Six months ended June 30, 2025 (S$'000) | Six months ended June 30, 2024 (S$'000) | | :--- | :--- | :--- | | Maintenance and repair services | 6,563 | 7,665 | | Modification, tuning and grooming services and trading of parts and accessories | 1,439 | 1,409 | | Sale of food and kitchen appliances | 148 | 193 | | Brand management services | – | 66 | | Provision of motor financing services | 57 | 100 | | **Total Revenue** | **8,207** | **9,433** | [4. Loss before tax](index=12&type=section&id=4.%20Loss%20before%20tax) For the six months ended June 30, 2025, the Group's loss before tax was S$2,300 thousand, an increase from S$2,118 thousand in the prior year, with major expenses including staff costs and depreciation Major Components of Loss Before Tax | Expense Item | Six months ended June 30, 2025 (S$'000) | Six months ended June 30, 2024 (S$'000) | | :--- | :--- | :--- | | Depreciation of property, plant and equipment | 189 | 147 | | Depreciation of right-of-use assets | 339 | 341 | | Staff costs (excluding directors' and chief executive's emoluments) | 2,937 | 3,462 | [5. Income Tax Expense](index=12&type=section&id=5.%20Income%20Tax%20Expense) For the six months ended June 30, 2025, the Group's income tax expense was nil, compared to S$4 thousand in the prior year, as no current income tax was payable due to the loss incurred Income Tax Expense | Indicator | Six months ended June 30, 2025 (S$'000) | Six months ended June 30, 2024 (S$'000) | | :--- | :--- | :--- | | Current income tax - for the period | – | 4 | | **Tax expense for the period** | **–** | **4** | - The Singapore subsidiary is subject to a 17% tax rate, the PRC subsidiary is subject to a 25% tax rate, and the Cayman Islands company is tax-exempt[28](index=28&type=chunk)[29](index=29&type=chunk)[30](index=30&type=chunk) [6. Dividend](index=13&type=section&id=6.%20Dividend) The Board does not recommend the payment of any interim dividend for the six months ended June 30, 2025, consistent with the same period last year - The Board does not recommend the payment of any interim dividend for the first half of 2025[32](index=32&type=chunk) [7. Loss per Share Attributable to Owners of the Company](index=13&type=section&id=7.%20Loss%20per%20Share%20Attributable%20to%20Owners%20of%20the%20Company) For the six months ended June 30, 2025, the basic loss per share attributable to owners of the Company was (4.59) Singapore cents, an increase from (4.39) Singapore cents in the prior year Loss Per Share Calculation Data | Indicator | Six months ended June 30, 2025 (S$'000/'000 shares) | Six months ended June 30, 2024 (S$'000/'000 shares) | | :--- | :--- | :--- | | Loss for the period attributable to owners of the Company for basic loss per share calculation | (2,157) | (1,754) | | Weighted average number of ordinary shares ('000 shares) | 47,028 | 40,000 | | **Basic loss per share (Singapore cents per share)** | **(4.59)** | **(4.39)** | - The placing of new shares on January 23, 2025, and the share consolidation on February 20, 2025 (fifty shares into one) have been factored into the weighted average number of shares[35](index=35&type=chunk)[36](index=36&type=chunk) [8. Property, Plant and Equipment](index=14&type=section&id=8.%20Property,%20Plant%20and%20Equipment) During the six months ended June 30, 2025, the Group acquired S$0.29 million of plant and equipment, a decrease from S$0.48 million in the same period last year - In the first half of 2025, the Group acquired **S$0.29 million** of plant and equipment, a year-on-year decrease of S$0.19 million[37](index=37&type=chunk) [9. Trade Receivables](index=14&type=section&id=9.%20Trade%20Receivables) As of June 30, 2025, the Group's net trade receivables were S$1,034 thousand, slightly lower than S$1,064 thousand as of December 31, 2024 Net Trade Receivables and Ageing Analysis | Indicator | As at June 30, 2025 (S$'000) | As at December 31, 2024 (S$'000) | | :--- | :--- | :--- | | Net trade receivables | 1,034 | 1,064 | | Ageing less than 30 days | 966 | 957 | | Ageing over 120 days | 115 | 113 | | Impairment loss recognised | (124) | (124) | Credit Risk Analysis of Trade Receivables (as at June 30, 2025) | Overdue Status | Gross carrying amount (S$'000) | Expected credit loss (S$'000) | Net amount (S$'000) | | :--- | :--- | :--- | :--- | | Current | 1,012 | – | 1,012 | | Less than 1 month | 42 | (20) | 22 | | 1 to 3 months | 14 | (14) | – | | Over 3 months | 90 | (90) | – | | **Total** | **1,158** | **(124)** | **1,034** | [10. Prepayments, Other Receivables and Other Assets](index=16&type=section&id=10.%20Prepayments,%20Other%20Receivables%20and%20Other%20Assets) As of June 30, 2025, total prepayments, other receivables and other assets increased significantly to S$11,311 thousand, mainly due to a rise in deposits and current other receivables Composition of Prepayments, Other Receivables and Other Assets | Indicator | As at June 30, 2025 (S$'000) | As at December 31, 2024 (S$'000) | | :--- | :--- | :--- | | Total non-current | 586 | 1,126 | | Total current | 10,725 | 7,164 | | **Total** | **11,311** | **8,290** | | Of which: Deposits | 5,012 | 2,963 | | Of which: Loans to third parties | 1,284 | 1,809 | - Deposits were mainly for the purchase of electric vehicles for car rental and resale, with a closing balance of **S$4.7 million**[42](index=42&type=chunk) - Loans to third parties are primarily motor financing loans with interest rates between **3% and 7%**, loan tenors of 1 to 7 years, and are secured by the purchased vehicles[42](index=42&type=chunk)[44](index=44&type=chunk) [11. Trade and Other Payables](index=19&type=section&id=11.%20Trade%20and%20Other%20Payables) As of June 30, 2025, the Group's total trade and other payables decreased to S$7,303 thousand, mainly due to a significant reduction in the amount due to a director Composition of Trade and Other Payables | Indicator | As at June 30, 2025 (S$'000) | As at December 31, 2024 (S$'000) | | :--- | :--- | :--- | | Trade payables | 1,410 | 1,772 | | Other payables | 4,745 | 3,911 | | Accrued expenses | 604 | 1,003 | | Amount due to a director | 544 | 2,206 | | **Total** | **7,303** | **8,892** | - The amount due to a director represents non-interest-bearing financial support and is repayable on demand[46](index=46&type=chunk) [12. Bank and Other Borrowings](index=20&type=section&id=12.%20Bank%20and%20Other%20Borrowings) As of June 30, 2025, the Group's total bank and other borrowings increased significantly to S$3,944 thousand, primarily due to new margin financing of S$1,324 thousand Composition and Changes in Bank and Other Borrowings | Indicator | As at June 30, 2025 (S$'000) | As at December 31, 2024 (S$'000) | | :--- | :--- | :--- | | Current borrowings | 2,371 | 580 | | Non-current borrowings | 1,573 | 2,012 | | **Total** | **3,944** | **2,592** | | Of which: Margin financing (4.0% p.a.) | 1,324 | – | | Of which: SGD borrowings (1.8% p.a.) | 1,235 | 1,373 | | Of which: Lease liabilities | 1,385 | 1,219 | - The new margin financing is secured by listed equity securities with a fair value of **S$2.29 million**[49](index=49&type=chunk)[50](index=50&type=chunk) [13. Share Capital](index=21&type=section&id=13.%20Share%20Capital) As of June 30, 2025, the Company's issued share capital was S$1,074 thousand, comprising 48,000,000 shares, following a share placing in January and a share consolidation in February 2025 Share Capital Overview | Indicator | As at June 30, 2025 | As at December 31, 2024 | | :--- | :--- | :--- | | Issued and fully paid shares (shares) | 48,000,000 | 2,000,000,000 | | Share capital (S$'000) | 1,074 | 900 | - On January 23, 2025, the company completed the placing of 400,000,000 new shares, raising net proceeds of approximately **HK$15.3 million**[53](index=53&type=chunk) - On February 20, 2025, the company implemented a share consolidation, where every fifty shares of HK$0.0025 each were consolidated into one share of HK$0.125 each[53](index=53&type=chunk) [Management Discussion and Analysis](index=22&type=section&id=Management%20Discussion%20and%20Analysis) [Business Review](index=22&type=section&id=Business%20Review) For the six months ended June 30, 2025, the Group's revenue decreased by 13.0% to S$8.21 million, and the loss for the period widened to S$2.30 million due to macroeconomic challenges - Revenue for the first half of 2025 was **S$8.21 million**, a year-on-year decrease of **13.0%**[54](index=54&type=chunk) - The Singapore business revenue decreased by **12.1%** to S$8.06 million, mainly due to a decline in spare parts export sales and a slowdown in maintenance service income[54](index=54&type=chunk) - The Mainland China business revenue decreased by **42.9%** to S$0.15 million, primarily affected by macroeconomic challenges and cautious customer spending[54](index=54&type=chunk) - The loss for the period widened to **S$2.30 million**, mainly due to the business slowdown in both markets[54](index=54&type=chunk) - The Group operates a multi-business model, providing comprehensive passenger car services in Singapore and developing the smart kitchen segment in Mainland China[55](index=55&type=chunk) [Prospects](index=22&type=section&id=Prospects) Looking ahead to 2025, the Group anticipates a challenging operating environment and will focus on integrating AI with advanced technology to formulate a sustainable growth strategy - The operating environment in 2025 is expected to be challenging, with a focus on integrating AI with advanced technology and sustainable growth strategies[56](index=56&type=chunk) [Automotive Segment](index=22&type=section&id=Automotive%20Segment) The automotive industry is undergoing a significant transition to electric vehicles, and the Group is actively allocating resources to adapt to this market shift - The automotive industry is shifting towards electric vehicles, with hybrid and electric vehicles accounting for about **84%** of new vehicle registrations in the first half of 2025[57](index=57&type=chunk) - The Group is allocating resources to ensure technicians are proficient in EV repair equipment and skills, and plans to broaden its product range to expand into the EV sector[58](index=58&type=chunk) [Smart Kitchen](index=23&type=section&id=Smart%20Kitchen) Influenced by AI and technological advancements, the Group will continue to focus on the growth of its smart kitchen segment, aiming to become a leading SaaS+ service platform for the global prepared food industry - The smart kitchen segment will continue its multi-business model, including offline retail, food delivery, meal kits, F&B brand incubation, and SaaS+ empowerment[59](index=59&type=chunk) - The goal is to become a leading SaaS+ service platform for the global prepared food industry, focusing on economy, innovation, and seamless integration[59](index=59&type=chunk) [Financial Review](index=23&type=section&id=Financial%20Review) The Group's revenue decreased by 13.0% year-on-year in the first half of 2025, while the loss for the period widened, and other income grew significantly [Revenue](index=23&type=section&id=Revenue) For the six months ended June 30, 2025, the Group's revenue decreased by 13.0% to S$8.21 million, driven by declines in both the Singapore and Mainland China businesses - Revenue for the first half of 2025 was **S$8.21 million**, a year-on-year decrease of **13.0%**[60](index=60&type=chunk) - The Singapore business revenue decreased by **12.1%**, while the Mainland China revenue decreased by **42.9%**[60](index=60&type=chunk) [Other Income](index=23&type=section&id=Other%20Income) For the six months ended June 30, 2025, other income and gains increased substantially by 288.8% year-on-year to S$0.42 million, mainly from investment income - Other income and gains increased by **288.8%** year-on-year to S$0.42 million[61](index=61&type=chunk) - The net increase was primarily attributable to investment income, including dividend income from listed securities investments[61](index=61&type=chunk) [Cost of Materials](index=24&type=section&id=Cost%20of%20Materials) For the six months ended June 30, 2025, the cost of materials decreased by 7.1% year-on-year, resulting in a lower gross profit margin of 43.6% compared to 47.2% - The cost of materials decreased by **7.1%** year-on-year, leading to a gross profit margin decline from **47.2% to 43.6%**[62](index=62&type=chunk) - The decrease in gross profit margin was mainly due to the reduced contribution from higher-margin businesses in Mainland China[62](index=62&type=chunk) [Employee Benefit Expenses](index=24&type=section&id=Employee%20Benefit%20Expenses) For the six months ended June 30, 2025, employee benefit expenses decreased by 15.2% or S$0.53 million year-on-year, in line with the overall revenue decline - Employee benefit expenses decreased by **15.2%** or S$0.53 million year-on-year[63](index=63&type=chunk) - The decrease was consistent with the decline in revenue and the reduced number of operating outlets following the disposal of a PRC subsidiary's business[63](index=63&type=chunk) [Other Expenses](index=24&type=section&id=Other%20Expenses) For the six months ended June 30, 2025, other expenses increased by S$0.11 million year-on-year to S$2.71 million, primarily due to additional legal and professional fees - Other expenses increased by S$0.11 million year-on-year to **S$2.71 million**[64](index=64&type=chunk) - The increase was mainly due to legal and professional fees[64](index=64&type=chunk) [Loss for the Period](index=24&type=section&id=Loss%20for%20the%20Period) For the six months ended June 30, 2025, the Group recorded a loss of approximately S$2.30 million, an increase from S$2.12 million in the prior year, due to a business slowdown - The loss for the period widened to **S$2.30 million**, primarily due to the business slowdown in both markets[65](index=65&type=chunk) [Liquidity, Financial and Capital Resources](index=24&type=section&id=Liquidity,%20Financial%20and%20Capital%20Resources) The Group's main funding sources in the first half of 2025 were operating activities and the placing of new shares, with a net decrease in cash and cash equivalents during the period [Cash Position](index=24&type=section&id=Cash%20Position) In the first half of 2025, the Group experienced net cash outflows from operating and investing activities, resulting in a net decrease in cash and cash equivalents of S$3.59 million Cash Flow Overview | Cash Flow Type | First Half of 2025 (S$'000) | | :--- | :--- | | Net cash from operating activities | (3,380) | | Net cash used in investing activities | (1,553) | | Net cash from financing activities | 1,347 | | **Net decrease in cash and cash equivalents** | **(3,586)** | - In January 2025, the Group raised gross proceeds of **HK$16.0 million** through the placing of new shares[66](index=66&type=chunk) [Gearing Ratio](index=24&type=section&id=Gearing%20Ratio) As of June 30, 2025, the Group's gearing ratio increased to 0.41 times from 0.29 times as of December 31, 2024, reflecting higher borrowings relative to total equity - The gearing ratio increased from **0.29 times** as of December 31, 2024, to **0.41 times** as of June 30, 2025[67](index=67&type=chunk) [Foreign Exchange Fluctuation Risk](index=25&type=section&id=Foreign%20Exchange%20Fluctuation%20Risk) The Group's currency risk arises mainly from sales, purchases, and borrowings denominated in currencies other than the functional currency, with no hedging measures currently in place - Currency risk primarily arises from transactions and borrowings in non-functional currencies, and the Group does not currently engage in foreign currency hedging[68](index=68&type=chunk) [Contingent Liabilities](index=25&type=section&id=Contingent%20Liabilities) As of June 30, 2025, the Group had no significant contingent liabilities, which is consistent with the position as of December 31, 2024 - As of June 30, 2025, the Group had **no significant contingent liabilities**[69](index=69&type=chunk) [Pledge of Assets](index=25&type=section&id=Pledge%20of%20Assets) As of June 30, 2025, the Group had pledged listed securities with a fair value of S$2.29 million as collateral for margin financing, whereas no such pledge existed as of December 31, 2024 - As of June 30, 2025, the Group pledged listed securities worth **S$2.29 million** as collateral for margin financing[70](index=70&type=chunk) [Capital Structure](index=25&type=section&id=Capital%20Structure) The Company's shares were listed on the GEM of the Stock Exchange on November 8, 2016, and it completed a share placing and consolidation in early 2025 - The Company's shares were listed on the GEM of the Stock Exchange on November 8, 2016[71](index=71&type=chunk) - In January 2025, the company completed the placing of 400,000,000 new shares, raising net proceeds of approximately **HK$15.3 million**[71](index=71&type=chunk) - In February 2025, a share consolidation was implemented, consolidating 2,400,000,000 shares into 48,000,000 consolidated shares with a par value of HK$0.125 each[71](index=71&type=chunk) [Use of Proceeds from Placing](index=26&type=section&id=Use%20of%20Proceeds%20from%20Placing) The net proceeds of approximately HK$15.3 million from the January 2025 placing were partially used for business development and working capital, with the remainder expected to be utilized by December 2025 Use of Proceeds from January 2025 Placing (as at June 30, 2025) | Intended Use | Planned Amount (HK$ million) | Utilised (HK$ million) | Unutilised (HK$ million) | Expected Utilisation Timeline | | :--- | :--- | :--- | :--- | :--- | | Support operation and development of fast food and smart kitchen business | 10.00 | 4.99 | 5.01 | December 2025 | | (a) Purchase of inventories and materials | 6.50 | 2.56 | 3.94 | December 2025 | | (b) Recruitment of sales talents and marketing | 2.40 | 1.33 | 1.07 | December 2025 | | (c) Direct and indirect expenses | 1.10 | 1.10 | – | – | | General working capital of the Company | 5.30 | 2.69 | 2.61 | December 2025 | | **Total** | **15.30** | **7.68** | **7.62** | | - Net proceeds from the placing were approximately **HK$15.3 million**, of which **HK$7.68 million** has been utilised, with a remaining balance of HK$7.62 million[75](index=75&type=chunk) [Other Information](index=27&type=section&id=Other%20Information) [Sufficient Public Float](index=27&type=section&id=Sufficient%20Public%20Float) As of the date of this report, the Company has maintained a sufficient public float as required by the GEM Listing Rules since its listing date - The Company has maintained a sufficient public float as required by the GEM Listing Rules since its listing date[76](index=76&type=chunk) [Directors’ and Chief Executive’s Interests and Short Positions in Shares, Underlying Shares and Debentures](index=28&type=section&id=Directors%E2%80%99%20and%20Chief%20Executive%E2%80%99s%20Interests%20and%20Short%20Positions%20in%20Shares,%20Underlying%20Shares%20and%20Debentures) As of June 30, 2025, Executive Director Mr Wang Lei and his spouse held a 24.62% interest in the Company's shares Long Positions of Directors and Chief Executive in Shares (as at June 30, 2025) | Name | Capacity/Nature of interest | Number of shares or underlying shares | Approximate percentage | | :--- | :--- | :--- | :--- | | Mr Wang Lei | Beneficial interest | 11,817,400 | 24.62% | | Ms Li Lidan | Interest of spouse | 11,817,400 | 24.62% | | Mr Chen Huichun | Beneficial interest | 14,000 | 0.03% | | Ms WANG Chongyu | Interest of spouse | 14,000 | 0.03% | [Substantial Shareholders’ and Other Persons’ Interests and Short Positions in Shares and Underlying Shares](index=29&type=section&id=Substantial%20Shareholders%E2%80%99%20and%20Other%20Persons%E2%80%99%20Interests%20and%20Short%20Positions%20in%20Shares%20and%20Underlying%20Shares) As of June 30, 2025, substantial shareholder Mr Li Jie and his spouse held an 11.92% interest in the Company's shares Long Positions of Substantial Shareholders and Other Persons in Shares (as at June 30, 2025) | Name | Nature of interest | Number of shares | Approximate percentage | | :--- | :--- | :--- | :--- | | Mr Li Jie | Beneficial owner | 5,720,400 | 11.92% | | Ms Han Mei | Interest of spouse | 5,720,400 | 11.92% | | Ms Li Lidan | Interest of spouse | 11,817,400 | 24.62% | [Related Party Transactions](index=29&type=section&id=Related%20Party%20Transactions) During the six months ended June 30, 2025, the Group did not enter into any related party transactions - In the first half of 2025, the Group did not enter into any related party transactions[82](index=82&type=chunk) [Directors’ Interests in Competing Business](index=29&type=section&id=Directors%E2%80%99%20Interests%20in%20Competing%20Business) During the six months ended June 30, 2025, the directors were not aware of any business or interest of a director, controlling shareholder, or their close associates that competes with the Group's business - The directors are not aware of any business or interest that competes with the Group's business[83](index=83&type=chunk) [Pledge of Assets](index=30&type=section&id=Pledge%20of%20Assets) As of June 30, 2025, the Group had no pledged assets, consistent with the same period last year - As of June 30, 2025, the Group had **no pledged assets**[85](index=85&type=chunk) [Foreign Exchange Risk](index=30&type=section&id=Foreign%20Exchange%20Risk) The Group's foreign exchange risk arises from transactions denominated in currencies other than the functional currency, and no hedging instruments are currently used to mitigate this risk - Foreign exchange risk primarily arises from sales, purchases, and borrowings in non-functional currencies, and no hedging is currently undertaken[86](index=86&type=chunk) [Purchase, Sale or Redemption of the Company’s Listed Securities](index=30&type=section&id=Purchase,%20Sale%20or%20Redemption%20of%20the%20Company%E2%80%99s%20Listed%20Securities) During 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 - In the first half of 2025, the Company and its subsidiaries did not purchase, sell, or redeem any of its listed securities[87](index=87&type=chunk) [Share Option Scheme](index=30&type=section&id=Share%20Option%20Scheme) The Company adopted a share option scheme on October 21, 2016, to incentivize and retain talent, which is valid until October 20, 2026 - The share option scheme was adopted on October 21, 2016, and is valid until October 20, 2026, to incentivize and retain talent[88](index=88&type=chunk)[89](index=89&type=chunk) - The subscription price for share options shall not be less than the highest of the closing price on the offer date, the average closing price for the five preceding days, and the nominal value of the shares[90](index=90&type=chunk) - As of June 30, 2025, the Group had **no outstanding share options**, warrants, or convertible instruments[92](index=92&type=chunk) [Directors’ Securities Transactions](index=32&type=section&id=Directors%E2%80%99%20Securities%20Transactions) The Company has adopted a code of conduct for directors' securities transactions, and all directors have confirmed compliance for the six months ended June 30, 2025 - All directors have confirmed compliance with the Company's adopted code of conduct for securities transactions during the first half of 2025[93](index=93&type=chunk) [Compliance with the Corporate Governance Code](index=32&type=section&id=Compliance%20with%20the%20Corporate%20Governance%20Code) The Company is committed to high standards of corporate governance, with the roles of Chairman and CEO held by Mr Wang Lei to ensure consistent leadership and efficient strategic planning - The roles of Chairman and CEO are held by the same individual (Mr Wang Lei), which the Board believes contributes to consistent leadership and efficient strategic planning[94](index=94&type=chunk) - Apart from the combined roles of Chairman and CEO, the Company has complied with all applicable provisions of the Corporate Governance Code[94](index=94&type=chunk) [Audit Committee](index=32&type=section&id=Audit%20Committee) The Company's Audit Committee has reviewed the Group's unaudited condensed consolidated financial results for the six months ended June 30, 2025 - The Audit Committee has reviewed the unaudited condensed consolidated financial results for the first half of 2025[95](index=95&type=chunk) [Material Investments, Acquisitions and Disposals](index=32&type=section&id=Material%20Investments,%20Acquisitions%20and%20Disposals) During the six months ended June 30, 2025, the Group did not undertake any material investments, acquisitions, or disposals other than those disclosed in this report - In the first half of 2025, the Group did not undertake any material investments, acquisitions, or disposals[96](index=96&type=chunk) [Events after the Reporting Period](index=33&type=section&id=Events%20after%20the%20Reporting%20Period) Subsequent to the reporting period, the Company successfully placed 9,600,000 shares at a price of HK$0.60 per share, which was completed on July 28, 2025 - In July 2025, the Company successfully placed **9,600,000 shares** at a price of **HK$0.60 per share**[97](index=97&type=chunk) [Dividend](index=33&type=section&id=Dividend) The Board does not recommend the payment of any dividend for the six months ended June 30, 2025, consistent with the same period last year - The Board does not recommend the payment of any dividend for the first half of 2025[99](index=99&type=chunk) [Acknowledgement](index=33&type=section&id=Acknowledgement) The Chairman of the Board extends sincere gratitude to shareholders, business partners, customers, all directors, management, and employees on behalf of the Board - The Chairman of the Board expresses gratitude to all stakeholders on behalf of the Board[100](index=100&type=chunk)