Executive Summary and Financial Highlights [Summary for the Six Months Ended June 30, 2025](index=1&type=section&id=Summary%20for%20the%20Six%20Months%20Ended%20June%2030%2C%202025) The Group faced global economic challenges in H1 2025, with revenue decreasing by 9.6% year-on-year to US$107,162 thousand, yet gross profit increased by 9.3% to US$40,576 thousand through cost control, leading to significant growth in profit before tax and profit attributable to owners, with basic earnings per share doubling Key Financial Highlights | Metric | Six Months Ended June 30, 2025 (US$ Thousand) | Six Months Ended June 30, 2024 (US$ Thousand) | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 107,162 | 118,510 | -9.6% | | Gross Profit | 40,576 | 37,107 | +9.3% | | Profit Before Income Tax | 16,742 | 10,329 | +62.1% | | Profit for the Period Attributable to Owners of the Company | 15,218 | 7,660 | +98.7% | | Basic Earnings Per Share (US Cents) | 3.00 | 1.51 | +98.7% | | Interim Dividend | Not Declared | Not Declared | - | Condensed Consolidated Financial Statements [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 US$107,162 thousand, a 9.6% year-on-year decrease, while significantly reduced cost of sales led to a 9.3% increase in gross profit to US$40,576 thousand, with other gains and losses turning profitable and profit attributable to owners of the company surging by 98.7% to US$15,218 thousand Condensed Consolidated Statement of Profit or Loss | Metric | 2025 (US$ Thousand) | 2024 (US$ Thousand) | | :--- | :--- | :--- | | Revenue | 107,162 | 118,510 | | Cost of Sales | (66,586) | (81,403) | | Gross Profit | 40,576 | 37,107 | | Other Income | 3,187 | 3,536 | | Other Gains and Losses | 8,357 | (624) | | Selling and Distribution Expenses | (15,180) | (15,717) | | Administrative Expenses | (15,980) | (14,872) | | Impairment Losses under Expected Credit Loss Model | (268) | (812) | | Other Expenses | (3,123) | (2,254) | | Finance Costs | (259) | (385) | | Share of Results of Associates | (568) | 4,350 | | Profit Before Income Tax | 16,742 | 10,329 | | Income Tax Expense | (1,478) | (1,475) | | Profit for the Period | 15,264 | 8,854 | | Profit for the Period Attributable to Owners of the Company | 15,218 | 7,660 | | Non-controlling Interests | 46 | 1,194 | | Basic Earnings Per Share (US Cents) | 3.00 | 1.51 | [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=3&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) Total comprehensive income for the period increased to US$13,220 thousand from US$8,651 thousand in the prior year, driven by higher profit for the period, partially offset by fair value losses on equity investments at fair value through other comprehensive income and exchange differences from translating overseas operations Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income | Metric | 2025 (US$ Thousand) | 2024 (US$ Thousand) | | :--- | :--- | :--- | | Profit for the Period | 15,264 | 8,854 | | **Other Comprehensive (Expense) Income** | | | | Fair value (loss) gain on equity instruments at fair value through other comprehensive income, net of tax | (702) | 98 | | Exchange differences arising from translating overseas operations | (1,954) | 327 | | Share of other comprehensive income (expense) of associates, net of related income tax | 612 | (628) | | **Total Comprehensive Income for the Period** | 13,220 | 8,651 | | Total Comprehensive Income for the Period Attributable to Owners of the Company | 13,121 | 7,869 | | Non-controlling Interests | 99 | 782 | [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 slightly increased, with stable non-current assets and a significant rise in cash and cash equivalents within current assets, while current liabilities saw a substantial increase in borrowings, reflecting overall financial stability and growth in net assets and total equity Condensed Consolidated Statement of Financial Position | Metric | June 30, 2025 (US$ Thousand) | December 31, 2024 (US$ Thousand) | | :--- | :--- | :--- | | **Non-current Assets** | | | | Property, Plant and Equipment | 62,873 | 62,678 | | Investment Properties | 1,444 | 1,438 | | Goodwill | 29,529 | 29,406 | | Interests in Associates | 115,050 | 114,523 | | Total Non-current Assets | 313,316 | 312,182 | | **Current Assets** | | | | Inventories | 42,717 | 40,361 | | Trade and Bills Receivables | 45,427 | 49,535 | | Financial Assets at Fair Value Through Profit or Loss | 58,364 | 54,731 | | Cash and Cash Equivalents | 104,613 | 93,928 | | Total Current Assets | 262,121 | 249,238 | | **Current Liabilities** | | | | Trade and Bills Payables | 28,787 | 40,854 | | Borrowings | 13,722 | 2,603 | | Total Current Liabilities | 82,136 | 82,541 | | Net Current Assets | 179,985 | 166,697 | | **Total Equity** | | | | Equity Attributable to Owners of the Company | 469,619 | 456,498 | | Non-controlling Interests | 11,531 | 11,432 | | Total Equity | 481,150 | 467,930 | Notes to the Condensed Consolidated Financial Statements [Basis of Preparation and Principal Accounting Policies](index=6&type=section&id=Basis%20of%20Preparation%20and%20Principal%20Accounting%20Policies) The Group's condensed consolidated financial statements are prepared in accordance with IAS 34 "Interim Financial Reporting" and the HKEX Listing Rules, based on historical cost except for certain financial instruments measured at fair value, and consistent with 2024 annual financial statements, with no significant impact from IFRS amendments - The condensed consolidated financial statements are prepared in accordance with IAS 34 "Interim Financial Reporting" and the HKEX Listing Rules[11](index=11&type=chunk) - Except for certain financial instruments, the statements are prepared on a historical cost basis, with accounting policies consistent with the 2024 annual financial statements[12](index=12&type=chunk) - The application of amendments to IFRS accounting standards during this interim period did not have a significant impact on the financial position and performance[13](index=13&type=chunk) [Revenue](index=7&type=section&id=Revenue) The Group's revenue primarily stems from sales to external customers, with all revenue recognized at a point in time, totaling US$107,162 thousand in H1 2025, a decrease from US$118,510 thousand in H1 2024, mainly due to a decline in sales in the US market, despite international non-NVC brand sales remaining the primary revenue source Revenue by Source | Revenue Source | 2025 (US$ Thousand) | 2024 (US$ Thousand) | | :--- | :--- | :--- | | International NVC Brand | 15,859 | 16,812 | | Domestic Non-NVC Brand | 4,348 | 5,063 | | International Non-NVC Brand | 86,955 | 96,635 | | **Total** | 107,162 | 118,510 | Revenue by Geographical Market | Geographical Market | 2025 (US$ Thousand) | 2024 (US$ Thousand) | | :--- | :--- | :--- | | United States | 63,005 | 77,532 | | Japan | 19,831 | 15,561 | | China | 4,348 | 5,063 | | United Kingdom | 10,080 | 10,218 | - All revenue is recognized at a "point in time," indicating primarily goods sales[14](index=14&type=chunk)[15](index=15&type=chunk) [Operating Segments](index=9&type=section&id=Operating%20Segments) The Group is structured into three reporting segments: International NVC Brand, Domestic Non-NVC Brand, and International Non-NVC Brand, with the International Non-NVC Brand segment being the primary contributor to revenue and segment results, showing significant growth in H1 2025, while the other two segments experienced declines - The Group's reporting segments include: International NVC Brand (sales of NVC brand lighting products outside China), Domestic Non-NVC Brand (sales of non-NVC brand lighting products within China), and International Non-NVC Brand (sales of non-NVC brand lighting products outside China)[18](index=18&type=chunk) Segment Revenue and Results | Segment | 2025 Segment Revenue (US$ Thousand) | 2025 Segment Results (US$ Thousand) | 2024 Segment Revenue (US$ Thousand) | 2024 Segment Results (US$ Thousand) | | :--- | :--- | :--- | :--- | :--- | | International NVC Brand | 15,859 | 6,089 | 16,812 | 7,093 | | Domestic Non-NVC Brand | 4,348 | 759 | 5,063 | 948 | | International Non-NVC Brand | 86,955 | 33,728 | 96,635 | 29,066 | | **Consolidated** | 107,162 | 40,576 | 118,510 | 37,107 | - Key operating decision-makers allocate resources and assess performance based on each segment's operating results, but segment assets and liabilities analysis is not presented[20](index=20&type=chunk) [Other Income](index=11&type=section&id=Other%20Income) The Group's other income totaled US$3,187 thousand in H1 2025, a decrease from US$3,536 thousand in H1 2024, primarily due to a significant increase in government grants and other subsidies, offset by a reduction in bank interest income and trademark licensing fees Other Income Sources | Income Source | 2025 (US$ Thousand) | 2024 (US$ Thousand) | | :--- | :--- | :--- | | Government Grants and Other Subsidies | 279 | 36 | | Bank Interest Income | 990 | 1,247 | | Consulting Service Income | 572 | 534 | | Trademark Licensing Fees | 508 | 787 | | Rental Income - Fixed Lease Payments | 243 | 194 | | Surcharge from Vendors | 129 | 275 | | Others | 466 | 463 | | **Total** | 3,187 | 3,536 | - Government grants and other subsidies significantly increased from **US$36 thousand in 2024** to **US$279 thousand in 2025**[21](index=21&type=chunk) - Bank interest income decreased from **US$1,247 thousand in 2024** to **US$990 thousand in 2025**[21](index=21&type=chunk) [Income Tax Expense](index=11&type=section&id=Income%20Tax%20Expense) The Group's income tax expense for H1 2025 was US$1,478 thousand, largely consistent with the prior year, with fluctuations in Hong Kong profits tax and PRC corporate income tax, a decrease in taxes from other countries, and certain PRC subsidiaries benefiting from a 15% preferential tax rate as high-tech enterprises Income Tax Expense by Type | Tax Type | 2025 (US$ Thousand) | 2024 (US$ Thousand) | | :--- | :--- | :--- | | Hong Kong Profits Tax | 807 | 273 | | PRC Corporate Income Tax | 88 | 276 | | Other Countries | 732 | 1,116 | | Total Current Tax | 1,627 | 1,665 | | Deferred Tax | (149) | (190) | | **Total** | 1,478 | 1,475 | - Hong Kong profits tax operates under a two-tiered tax rate system, with eligible entities taxed at **8.25% on the first HKD2,000 thousand of profits** and **16.5% thereafter**[22](index=22&type=chunk) - PRC subsidiaries are generally subject to a 25% tax rate, but Yixun (Zhuhai) Optoelectronics Technology Co., Ltd. and Zhejiang Jiangshan Sanyou Electronics Co., Ltd. enjoy a **15% preferential tax rate** as high-tech enterprises[22](index=22&type=chunk)[23](index=23&type=chunk) [Components of Profit for the Period](index=12&type=section&id=Components%20of%20Profit%20for%20the%20Period) The composition of profit for the period shows a slight decrease in total amortization and depreciation, a significant increase in employee benefit expenses (including wages and salaries), and reductions in recognized inventory costs, research and development expenses, and impairment losses under the expected credit loss model Components of Profit for the Period | Item | 2025 (US$ Thousand) | 2024 (US$ Thousand) | | :--- | :--- | :--- | | Amortization of Other Intangible Assets | 1,348 | 2,546 | | Depreciation (Property, Plant and Equipment, Investment Properties, Right-of-use Assets) | 4,769 | 3,817 | | **Total Amortization and Depreciation** | 6,117 | 6,363 | | Wages and Salaries | 21,117 | 16,761 | | Retirement Benefit Scheme Contributions | 2,070 | 1,700 | | Other Benefit Expenses | 564 | 566 | | **Total Staff Costs** | 23,751 | 19,027 | | Recognized Cost of Inventories | 66,728 | 81,984 | | Research and Development Expenses | 3,123 | 2,254 | | Write-down of Inventories | (142) | (581) | | Impairment Losses under Expected Credit Loss Model | 268 | 812 | - Total staff costs increased from **US$19,027 thousand in 2024** to **US$23,751 thousand in 2025**, primarily driven by an increase in wages and salaries[25](index=25&type=chunk) - Impairment losses under the expected credit loss model significantly decreased from **US$812 thousand in 2024** to **US$268 thousand in 2025**[25](index=25&type=chunk) [Earnings Per Share](index=13&type=section&id=Earnings%20Per%20Share) Basic earnings per share attributable to owners of the company significantly increased to 3.00 US Cents, up from 1.51 US Cents in the prior year, reflecting a substantial rise in profit attributable to owners while the weighted average number of ordinary shares remained constant Basic Earnings Per Share | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Profit for the Period Attributable to Owners of the Company for Basic EPS Calculation (US$ Thousand) | 15,218 | 7,660 | | Weighted Average Number of Ordinary Shares for Basic EPS Calculation (Thousand Shares) | 507,274 | 507,274 | | **Basic Earnings Per Share (US Cents)** | 3.00 | 1.51 | - Diluted earnings per share are not presented for either period as there are no outstanding potential ordinary shares[26](index=26&type=chunk) [Dividends](index=13&type=section&id=Dividends) The Company has not declared or proposed any dividends to ordinary shareholders during the current or prior interim periods, nor has it proposed any dividends since the end of the reporting period - The Company has not declared or proposed any dividends during the current or prior interim periods[27](index=27&type=chunk) [Trade and Bills Receivables](index=14&type=section&id=Trade%20and%20Bills%20Receivables) As of June 30, 2025, total trade and bills receivables decreased to US$45,427 thousand from US$49,535 thousand on December 31, 2024, with an increase in credit loss allowance but a significant reduction in impairment losses under the expected credit loss model, and most trade receivables are aged within 3 months Trade and Bills Receivables | Metric | June 30, 2025 (US$ Thousand) | December 31, 2024 (US$ Thousand) | | :--- | :--- | :--- | | Trade Receivables | 46,180 | 49,913 | | Less: Allowance for Credit Losses | (798) | (530) | | Net Trade Receivables | 45,382 | 49,383 | | Bills Receivables | 45 | 152 | | **Total** | 45,427 | 49,535 | Ageing Analysis of Trade Receivables | Ageing | June 30, 2025 (US$ Thousand) | December 31, 2024 (US$ Thousand) | | :--- | :--- | :--- | | Within 3 Months | 41,109 | 46,252 | | 4 to 6 Months | 2,927 | 1,285 | | 7 to 12 Months | 199 | 587 | | 1 to 2 Years | 426 | 293 | | Over 2 Years | 721 | 966 | - The Group grants an average credit period of **30 to 90 days** to its trade customers[29](index=29&type=chunk) - Trade receivables with a carrying amount of **US$5,863 thousand** have been pledged as collateral for borrowings[30](index=30&type=chunk) - Impairment losses of **US$268 thousand** were recognized under the expected credit loss model during this interim period, a significant reduction from **US$812 thousand** in the corresponding period[30](index=30&type=chunk) [Trade and Bills Payables](index=15&type=section&id=Trade%20and%20Bills%20Payables) As of June 30, 2025, total trade and bills payables significantly decreased to US$28,787 thousand from US$40,854 thousand on December 31, 2024, with the majority of payables aged within 3 months Ageing Analysis of Trade and Bills Payables | Ageing | June 30, 2025 (US$ Thousand) | December 31, 2024 (US$ Thousand) | | :--- | :--- | :--- | | Within 3 Months | 22,716 | 36,660 | | 4 to 6 Months | 839 | 401 | | 7 to 12 Months | 108 | 270 | | 1 to 2 Years | 506 | 170 | | Over 2 Years | 867 | 752 | | **Total** | 28,787 | 40,854 | [Borrowings](index=16&type=section&id=Borrowings) As of June 30, 2025, the Group's total borrowings significantly increased to US$13,722 thousand from US$2,603 thousand on December 31, 2024, driven by new unsecured bank loans of US$9,080 thousand for property, plant, and equipment purchases (largely repaid post-period) and an increase in secured bank loans for daily operations Borrowings by Type | Borrowing Type | June 30, 2025 (US$ Thousand) | December 31, 2024 (US$ Thousand) | | :--- | :--- | :--- | | Unsecured Bank Loans | 9,080 | – | | Secured Bank Loans | 4,642 | 2,603 | | **Total** | 13,722 | 2,603 | - New unsecured bank loans of **US$9,080 thousand**, bearing interest at a floating rate of LPR minus 20 basis points, were obtained for purchasing property, plant, and equipment, and have been largely repaid after the reporting period[33](index=33&type=chunk) - New secured bank loans of **US$4,642 thousand**, bearing interest at a floating rate of prime rate plus 1.9%, were obtained for daily operations[33](index=33&type=chunk) [Share Capital and Capital Commitments](index=17&type=section&id=Share%20Capital%20and%20Capital%20Commitments) The Company's authorized and issued share capital remained stable at 507,274 thousand shares, with a share capital of US$1,268 thousand, and capital commitments for property, plant, and equipment decreased to US$387 thousand as of June 30, 2025, compared to December 31, 2024 Share Capital | Metric | Number of Shares (Thousand Shares) | Share Capital (US$ Thousand) | | :--- | :--- | :--- | | Authorized Share Capital (Ordinary shares of US$0.000001 each) | 50,000,000 | 46,977 | | Issued and Fully Paid Share Capital (Ordinary shares of US$0.000001 each) | 507,274 | 1,268 | Capital Commitments | Capital Commitment Item | June 30, 2025 (US$ Thousand) | December 31, 2024 (US$ Thousand) | | :--- | :--- | :--- | | Purchase of Property, Plant and Equipment | 387 | 484 | Management Discussion and Analysis [Market and Performance Review](index=18&type=section&id=Market%20and%20Performance%20Review) In H1 2025, the global economy faced recession concerns due to tariffs, the Russia-Ukraine war, and high interest rates, leading to downward revisions in GDP growth forecasts, which the Group addressed by optimizing procurement strategies, advancing Vietnam localization, and enhancing in-house production to reduce costs and maintain competitiveness in the international lighting business - The global economy is affected by Trump's tariffs, the Russia-Ukraine war, and high interest rates, with market concerns about economic recession and the IMF forecasting **3.0% global economic growth in 2025**[35](index=35&type=chunk) - The Group achieved comprehensive cost reduction by adjusting procurement strategies (supplier layout, bidding, large order negotiation, price linkage) and advancing Vietnam localization and in-house production capabilities[35](index=35&type=chunk) - The international lighting business remains core, enhancing product price and functional competitiveness through new product design, new product launches, and procurement strategy evaluation[36](index=36&type=chunk) [Sales and Distribution](index=19&type=section&id=Sales%20and%20Distribution) The Group has established sales networks across major global markets, with North America exceeding retail expectations due to strong customer partnerships and new product listings, while Japan saw overall sales growth from new client introductions, but the UK market faced confidence issues and low wholesale investment, and other overseas markets showed mixed results with successes in Uruguay and Papua New Guinea, but delays and cost increases in Vietnam - The Group has established sales networks and channels in major countries and regions including North America, Europe, Australia, East Asia, the Middle East, Southeast Asia, and China[37](index=37&type=chunk) [North America and Japan Markets](index=19&type=section&id=North%20America%20and%20Japan%20Markets) The North American market benefited from strong collaboration with its largest customer and new product listings, exceeding retail sales expectations, but domestic sales and commercial channels underperformed, while the Japanese market, despite a weak domestic recovery, saw overall sales rise due to new customer introductions and a short-term increase in LED prices - The North American market benefited from good business cooperation with its largest customer, exceeding sales expectations due to normalized retail prices and new product listings[38](index=38&type=chunk) - North American commercial channel sales performed poorly, with slow progress on engineering projects[38](index=38&type=chunk) - The Japanese economy in H1 2025 showed "weak domestic recovery + increased external risks," but overall sales increased year-on-year, mainly due to the introduction of new customers[38](index=38&type=chunk)[39](index=39&type=chunk) [UK and Nordic Markets](index=20&type=section&id=UK%20and%20Nordic%20Markets) The UK market is challenged by low confidence and wholesale channels' reluctance to invest in inventory due to credit risk concerns, while Dernier and Hamlyn (D&H) is experiencing strong order growth in the ultra-high-end market, and the Nordic market, despite sluggish growth, maintains a high market share due to the company's robust demand strategy, with NVC UK improving its market position through cost reduction and sales team restructuring - The UK market is plagued by a lack of confidence, with wholesale channels unwilling to invest in inventory due to credit risk concerns[40](index=40&type=chunk) - D&H focuses on the ultra-high-end market, with strong order growth and projected significant sales increase in 2025[40](index=40&type=chunk)[42](index=42&type=chunk) - The Nordic market faces sluggish growth, but the company's demand strategy is well-developed, leading to a higher market share[40](index=40&type=chunk) - NVC UK has improved its market position by reducing structural operating costs, rebuilding its external sales team, and adjusting sales leadership[41](index=41&type=chunk) [Other Overseas Markets](index=21&type=section&id=Other%20Overseas%20Markets) The Group's dual-channel business strategy, focusing on distribution and project channels, has shown good results in other overseas markets, with Uruguay and Papua New Guinea exceeding targets through supermarket partnerships, while Vietnam underperformed due to project delays and increased costs from small-batch customization, and Singapore and surrounding markets met expectations - The implementation of a dual-channel business strategy focusing on distribution and project channels has shown good results in H1 2025[43](index=43&type=chunk) - Uruguay and Papua New Guinea exceeded targets through partnerships with local large supermarkets[43](index=43&type=chunk) - The Vietnam market underperformed due to project delays and increased costs from small-batch customized orders[43](index=43&type=chunk) [Brand Building and New Product Development](index=22&type=section&id=Brand%20Building%20and%20New%20Product%20Development) The Group is advancing its lighting sub-brand upgrades, with a planned relaunch in H2, and has updated its parent brand and North American lighting brand "ETI," while "NVC Lighting" is undergoing significant adjustments for a new image launch in H2 2025, and a new brand "AURA" is focusing on trendy linear lighting systems with a promotional video, as the R&D department has developed over a hundred new lighting products in H1, adhering to "innovation, speed, quality, cost" principles and continuously improving its "four-ization" initiatives - The Group focuses on "light," "air," and "water" as three key elements for business development, continuously advancing lighting sub-brand upgrades, with a formal relaunch planned for H2[44](index=44&type=chunk) - The "NVC Lighting" brand is undergoing significant adjustments and updates, including brand identity, application scenarios, and marketing material design style, with the new image expected to be launched in H2 2025[44](index=44&type=chunk) - The new brand "AURA" focuses on trendy linear lighting systems, with an official promotional video produced in H1 and a planned launch concurrently with exhibitions in H2[45](index=45&type=chunk) - The R&D department, adhering to "innovation, speed, quality, cost" principles, has developed or completed over a hundred new lighting products in H1 and continues to build and improve its "platformization, serialization, modularization, and standardization" initiatives[46](index=46&type=chunk) [Future Outlook](index=23&type=section&id=Future%20Outlook) The Group anticipates international lighting business to remain core in H2 2025, with enhanced sales performance driven by R&D innovation, strong sales channels, and new product promotion, alongside optimized management structure, integrated overseas operations, strengthened Middle East and Southeast Asian markets, and the promotion of cost-effective and smart products - In H2 2025, the international lighting business remains core, with sales performance to be enhanced through R&D innovation, strong sales channels, and new product promotion[47](index=47&type=chunk) - The Group will optimize its management structure, integrate overseas operations, strengthen the Middle East and Southeast Asian markets, and promote cost-effective and smart products[47](index=47&type=chunk) [North America and Japan Market Outlook](index=24&type=section&id=North%20America%20and%20Japan%20Market%20Outlook) In H2, the US market will focus on production in tariff-friendly regions, actively competing for existing shelf products in offline retail stores, and plans to launch innovative downlight combinations and rectangular ceiling lights, while re-evaluating its commercial product line, as the Japanese economy is expected to continue a weak recovery with higher-than-expected inflation, leading to a "strong commercial, stable residential" lighting market, with new products and expanded e-commerce channels planned for H2 - The US market will focus on production in tariff-friendly safe regions, actively competing for existing shelf products in offline retail stores, and plans to launch innovative downlight combinations and rectangular ceiling lights[48](index=48&type=chunk) - The Japanese economy is likely to continue a weak recovery in H2 2025, with higher-than-expected inflation, and the lighting market will show a differentiated pattern of "strong commercial, stable residential"[48](index=48&type=chunk)[49](index=49&type=chunk) - In H2, the Japanese market will gradually launch new products in retail channels, simultaneously expand sales through e-commerce channels like Amazon and Rakuten, and focus on developing new customers[49](index=49&type=chunk) [UK and Nordic Market Outlook](index=25&type=section&id=UK%20and%20Nordic%20Market%20Outlook) UK management anticipates improved sales performance in the UK and Nordic markets in H2, attributed to changes in the NVC UK sales team, strong orders for D&H, and upcoming new product launches in the Nordic region - UK and Nordic market sales performance is expected to improve in H2, thanks to changes in the NVC UK sales team, strong D&H orders, and new product launches in the Nordic region[50](index=50&type=chunk) [Other Overseas Market Outlook](index=25&type=section&id=Other%20Overseas%20Market%20Outlook) The Vietnam market will transition from low-volume customized projects to standardized solutions via distribution channels, while Singapore and surrounding markets anticipate increased distribution channel activities and planned expansion into southern Malaysia, though challenges including over-customization in Vietnam, slow progress on government projects in Pakistan, and lingering economic crisis effects in Sri Lanka are expected to persist until the end of 2025 - The Vietnam market will shift from low-volume customized projects to standardized solutions, promoted through distribution channels[51](index=51&type=chunk) - Singapore and surrounding markets expect increased distribution channel activities in H2 and plan to expand operations into southern Malaysia[51](index=51&type=chunk) - Market challenges include over-customization in Vietnam, slow progress on government projects in Pakistan, and lingering effects of the Sri Lankan economic crisis, expected to continue until the end of 2025[51](index=51&type=chunk) [Brand Building, Product Development, and Internal Management Outlook](index=26&type=section&id=Brand%20Building%2C%20Product%20Development%2C%20and%20Internal%20Management%20Outlook) The Group's H2 brand strategy will emphasize steady investment, building long-term brand assets, nurturing its sub-brand portfolio, and strategically upgrading key brand assets, while product R&D will focus on improving human-centric lighting technology, expanding core patent applications, and continuing "platformization, serialization, modularization, and standardization" initiatives, with supply chain cost control through annual bidding, cost reduction plans, in-house production, technical transformation, and Vietnam localization, alongside driving group-wide digitalization and informatization, including ERP system migration and functional enhancements, to boost overall operational efficiency and governance effectiveness - The H2 brand strategy will continue to emphasize steady investment, building long-term brand assets, nurturing the sub-brand portfolio, and strategically upgrading key brand assets[52](index=52&type=chunk) - Product R&D will focus on improving human-centric lighting technology, expanding core patent applications, and continuing "platformization, serialization, modularization, and standardization" initiatives[52](index=52&type=chunk) - Supply chain cost control will be achieved through annual bidding, cost reduction plans, in-house production projects, technical transformation projects, and Vietnam localization procurement[53](index=53&type=chunk) - The Group will promote group-wide digitalization and informatization, including ERP system migration, to enhance overall operational efficiency and governance effectiveness[53](index=53&type=chunk) [Financial Review](index=27&type=section&id=Financial%20Review) This financial review details the Group's H1 2025 financial performance, showing a 9.6% year-on-year decrease in sales revenue due to declines in both Chinese and international markets, but a lower cost of sales as a percentage of revenue led to a significant improvement in gross margin, while other income slightly decreased, other gains and losses turned profitable, selling and distribution expenses and administrative expenses both increased, and finance costs and share of results of associates decreased, ultimately resulting in substantial growth in both profit for the period and profit attributable to owners of the company [Sales Revenue](index=27&type=section&id=Sales%20Revenue) The Group's sales revenue for H1 2025 was US$107,162 thousand, a 9.6% decrease from the prior period, primarily due to a 14.1% decline in the Chinese market and a 9.4% decrease in international market sales, with non-NVC brand ODM products remaining the main component Sales Revenue by Source | Sales Source | 2025 (US$ Thousand) | 2024 (US$ Thousand) | Growth Rate (%) | | :--- | :--- | :--- | :--- | | China Non-NVC Brand | 4,348 | 5,063 | (14.1%) | | International NVC Brand | 15,859 | 16,812 | (5.7%) | | International Non-NVC Brand | 86,955 | 96,635 | (10.0%) | | **Total** | 107,162 | 118,510 | (9.6%) | - China sales revenue decreased by **14.1%**, primarily due to increasing competition[55](index=55&type=chunk) - International sales revenue decreased by **9.4%**, leading to an overall sales revenue decrease of **9.6%**[55](index=55&type=chunk) [Cost of Sales](index=28&type=section&id=Cost%20of%20Sales) Cost of sales for H1 2025 significantly decreased to US$66,586 thousand from the prior period, with the cost of sales as a percentage of revenue falling from 68.7% to 62.1%, primarily due to reduced raw material costs and the Group's shift to in-house production of blow-molded, extruded, and roll-formed parts, replacing third-party procurement Cost of Sales Components | Cost of Sales Component | 2025 (US$ Thousand) | % of Revenue | 2024 (US$ Thousand) | % of Revenue | | :--- | :--- | :--- | :--- | :--- | | Raw Materials (including outsourced production costs) | 53,934 | 50.3% | 66,197 | 55.9% | | Labor Costs | 7,906 | 7.4% | 8,323 | 7.0% | | Overhead | 4,746 | 4.4% | 6,883 | 5.8% | | **Total Cost of Sales** | 66,586 | 62.1% | 81,403 | 68.7% | - Cost of sales as a percentage of revenue decreased from **68.7% to 62.1%**, with gross margin increasing from **31.3% to 37.9%**[56](index=56&type=chunk) - The main reasons are reduced raw materials and the Group's shift to in-house production of blow-molded, extruded, and roll-formed parts, replacing procurement from third-party suppliers[56](index=56&type=chunk) [Gross Profit and Gross Margin](index=28&type=section&id=Gross%20Profit%20and%20Gross%20Margin) The Group's gross profit for H1 2025 was US$40,576 thousand, a 9.3% year-on-year increase, with the gross margin rising from 31.3% to 37.9%, primarily due to falling commodity prices and freight costs, which reduced production costs, and a significant improvement in the gross margin of international non-NVC brands Gross Profit and Gross Margin by Segment | Segment | 2025 Gross Profit (US$ Thousand) | 2025 Gross Margin (%) | 2024 Gross Profit (US$ Thousand) | 2024 Gross Margin (%) | | :--- | :--- | :--- | :--- | :--- | | China Non-NVC Brand | 759 | 17.5% | 948 | 18.7% | | International NVC Brand | 6,089 | 38.4% | 7,093 | 42.2% | | International Non-NVC Brand | 33,728 | 38.8% | 29,066 | 30.1% | | **Total** | 40,576 | 37.9% | 37,107 | 31.3% | - The overall gross margin increased from **31.3% to 37.9%**, primarily due to continuous declines in commodity prices and freight costs, leading to lower production costs[58](index=58&type=chunk) [Other Income](index=30&type=section&id=Other%20Income) The Group's other income for H1 2025 was US$3,187 thousand, a 9.9% decrease from the prior period, primarily due to the combined effect of increased government grants and other subsidies and decreased bank interest income - Other income decreased by **9.9%** compared to the prior period, mainly due to the combined effect of increased government grants and other subsidies and decreased bank interest income[59](index=59&type=chunk) [Other Gains and Losses](index=30&type=section&id=Other%20Gains%20and%20Losses) The Group's other gains and losses recorded a net gain of US$8,400 thousand in H1 2025, a significant turnaround from a net loss of approximately US$600 thousand in the prior period, primarily driven by a substantial increase in net exchange gains (from US$100 thousand to US$4,700 thousand) and a shift from loss to net gain in fair value changes of financial assets (approximately US$3,600 thousand) - Other gains and losses turned from a net loss of approximately **US$600 thousand** in the prior period to a net gain of **US$8,400 thousand** in the review period[60](index=60&type=chunk) - This was primarily due to net exchange gains increasing from approximately **US$100 thousand** to approximately **US$4,700 thousand**[60](index=60&type=chunk) - Fair value changes of financial assets turned from a net loss of approximately **US$900 thousand** in the prior period to a net gain of approximately **US$3,600 thousand** in the review period[60](index=60&type=chunk) [Selling and Distribution Expenses](index=30&type=section&id=Selling%20and%20Distribution%20Expenses) The Group's selling and distribution expenses for H1 2025 were US$15,180 thousand, a 3.4% decrease from the prior period, however, as a percentage of revenue, these expenses increased from 13.3% to 14.2% - Selling and distribution expenses amounted to **US$15,180 thousand**, a **3.4% decrease** compared to the prior period[61](index=61&type=chunk) - Selling and distribution expenses as a percentage of revenue increased from **13.3% to 14.2%**[61](index=61&type=chunk) [Administrative Expenses](index=31&type=section&id=Administrative%20Expenses) The Group's administrative expenses for H1 2025 were US$15,980 thousand, a 7.5% increase from the prior period, primarily due to higher staff costs, and as a percentage of revenue, these expenses rose from 12.5% to 14.9% - Administrative expenses amounted to **US$15,980 thousand**, a **7.5% increase** compared to the prior period, mainly due to increased staff costs[62](index=62&type=chunk) - Administrative expenses as a percentage of revenue increased from **12.5% to 14.9%**[62](index=62&type=chunk) [Finance Costs](index=31&type=section&id=Finance%20Costs) The Group's finance costs for H1 2025 were US$259 thousand, a decrease from the prior period, primarily comprising interest expenses on bank loans and lease liabilities - Finance costs were **US$259 thousand**, a decrease from **US$385 thousand** in the prior period[6](index=6&type=chunk)[63](index=63&type=chunk) - Finance costs primarily consist of interest on bank loans and lease liabilities[63](index=63&type=chunk) [Share of Results of Associates](index=31&type=section&id=Share%20of%20Results%20of%20Associates) The Group's share of results of associates for H1 2025 was a loss of US$568 thousand, a reversal from a profit of US$4,350 thousand in the prior period, reflecting a shift from profit to loss in the performance of associates - Share of results of associates turned from a profit of **US$4,350 thousand** in the prior period to a loss of **US$568 thousand**[6](index=6&type=chunk)[64](index=64&type=chunk) - This item reflects the Group's share of net profit or loss from its associates[64](index=64&type=chunk) [Income Tax](index=31&type=section&id=Income%20Tax) The Group's income tax expense for H1 2025 increased slightly to US$1,478 thousand compared to the prior period - Income tax expense increased to **US$1,478 thousand** compared to the prior period[6](index=6&type=chunk)[65](index=65&type=chunk) [Profit for the Period](index=31&type=section&id=Profit%20for%20the%20Period) The Group's net profit for the period (including profit attributable to non-controlling interests) for H1 2025 was US$15,264 thousand, a significant increase from US$8,854 thousand in the prior period - Net profit for the period (including profit attributable to non-controlling interests) was **US$15,264 thousand**[6](index=6&type=chunk)[66](index=66&type=chunk) [Profit Attributable to Owners of the Company](index=31&type=section&id=Profit%20Attributable%20to%20Owners%20of%20the%20Company) Profit attributable to owners of the company for H1 2025 was US$15,218 thousand, a substantial increase from US$7,660 thousand in the prior period - Profit attributable to owners of the company was **US$15,218 thousand**[6](index=6&type=chunk)[67](index=67&type=chunk) [Profit Attributable to Non-controlling Interests](index=32&type=section&id=Profit%20Attributable%20to%20Non-controlling%20Interests) The Group's profit attributable to non-controlling interests for H1 2025 was US$46 thousand, a significant decrease from US$1,194 thousand in the prior period - Profit attributable to non-controlling interests was **US$46 thousand**[6](index=6&type=chunk)[68](index=68&type=chunk) [Cash Flow and Liquidity](index=32&type=section&id=Cash%20Flow%20and%20Liquidity) In H1 2025, the Group's net cash flow from operating activities turned positive, net cash flow from investing activities shifted from inflow to outflow, and net cash flow from financing activities changed from outflow to inflow, resulting in a net increase in cash and cash equivalents, while net current assets and the current ratio both improved, with directors deeming working capital sufficient [Cash Flow](index=32&type=section&id=Cash%20Flow) The Group's net cash flow from operating activities for H1 2025 was a positive US$4,541 thousand, a turnaround from a negative balance in the prior period, while net cash flow from investing activities shifted from an inflow of US$20,425 thousand to an outflow of US$2,488 thousand, and net cash flow from financing activities changed from an outflow of US$8,968 thousand to an inflow of US$9,505 thousand, leading to a net increase in cash and cash equivalents of US$11,558 thousand Cash Flow Summary | Cash Flow Type | 2025 (US$ Thousand) | 2024 (US$ Thousand) | | :--- | :--- | :--- | | Net Cash Flow from (Used in) Operating Activities | 4,541 | (267) | | Net Cash Flow from (Used in) Investing Activities | (2,488) | 20,425 | | Net Cash Flow from (Used in) Financing Activities | 9,505 | (8,968) | | Net Increase in Cash and Cash Equivalents | 11,558 | 11,190 | | Cash and Cash Equivalents at End of Period | 104,613 | 118,817 | - Net cash flow from operating activities turned positive, indicating improved operating conditions[70](index=70&type=chunk) - Net cash flow from financing activities shifted from outflow to inflow, possibly related to new borrowings[70](index=70&type=chunk) [Liquidity](index=33&type=section&id=Liquidity) As of June 30, 2025, the Group's total net current assets increased to US$179,985 thousand from US$166,697 thousand on December 31, 2024, and the current ratio improved from 3.02 to 3.19, with directors confident in sufficient working capital for current and future 12-month needs Liquidity Metrics | Metric | June 30, 2025 (US$ Thousand) | December 31, 2024 (US$ Thousand) | | :--- | :--- | :--- | | Total Current Assets | 262,121 | 249,238 | | Total Current Liabilities | 82,136 | 82,541 | | Net Current Assets | 179,985 | 166,697 | | Current Ratio | 3.19 | 3.02 | - Directors believe the Group has sufficient working capital to meet its current and next 12-month funding requirements[73](index=73&type=chunk) [Capital Management](index=34&type=section&id=Capital%20Management) The Group's primary capital management objective is to maintain financial stability and growth, managed by monitoring the capital gearing ratio (net debt divided by total equity attributable to owners of the company), which is not applicable as cash and cash equivalents exceed borrowings, resulting in negative net debt Capital Management Metrics | Metric | June 30, 2025 (US$ Thousand) | December 31, 2024 (US$ Thousand) | | :--- | :--- | :--- | | Borrowings | 13,722 | 2,603 | | Less: Cash and Cash Equivalents | (104,613) | (93,928) | | Net Debt | Not Applicable | Not Applicable | | Total Equity Attributable to Owners of the Company | 469,619 | 456,498 | | Capital Gearing Ratio | Not Applicable | Not Applicable | - The capital management objective is to maintain the company's financial stability and growth, managed by monitoring the capital gearing ratio[75](index=75&type=chunk) - As cash and cash equivalents exceed borrowings, net debt is negative, rendering the capital gearing ratio not applicable[75](index=75&type=chunk) [Capital Expenditure](index=35&type=section&id=Capital%20Expenditure) The Group's capital expenditure for H1 2025 was US$3,682 thousand, primarily for property, plant, and equipment, funded by cash generated from operations and bank loans - During the review period, the Group's capital expenditure was **US$3,682 thousand**, mainly due to increased costs for property, plant, and equipment[76](index=76&type=chunk) - Capital expenditure was funded by cash generated from operations and bank loans[76](index=76&type=chunk) [Off-Balance Sheet Arrangements](index=35&type=section&id=Off-Balance%20Sheet%20Arrangements) The Group had no outstanding derivative financial instruments or off-balance sheet guarantees for outstanding loans during the review period, nor did it engage in transactions involving non-exchange traded contracts - The Group had no outstanding derivative financial instruments or off-balance sheet guarantees for outstanding loans during the review period[77](index=77&type=chunk) - The Group did not engage in transactions involving non-exchange traded contracts[77](index=77&type=chunk) [Capital Commitments](index=35&type=section&id=Capital%20Commitments) As of June 30, 2025, the Group's capital commitments for the acquisition of property, plant, and equipment amounted to US$387 thousand, a decrease from US$484 thousand on December 31, 2024 - As of June 30, 2025, capital commitments for the acquisition of property, plant, and equipment amounted to **US$387 thousand**[78](index=78&type=chunk) [Contingent Liabilities](index=35&type=section&id=Contingent%20Liabilities) A subsidiary of the Group is involved in a patent infringement legal dispute, and the directors believe the expected outcome is uncertain, making it impossible to reliably estimate the potential liability amount, timing, and impact - A subsidiary of the Group is involved in a patent infringement legal dispute[79](index=79&type=chunk) - The directors believe the expected outcome of this legal dispute is uncertain, making it impossible to reliably estimate the potential liability amount, timing, and impact[79](index=79&type=chunk) [Mergers, Acquisitions, Investments, Disposals, and Significant Investments Held](index=35&type=section&id=Mergers%2C%20Acquisitions%2C%20Investments%2C%20Disposals%2C%20and%20Significant%20Investments%20Held) The Group did not undertake any significant acquisitions, mergers, investments, or disposals of subsidiaries, associates, or joint ventures during the review period, nor did it hold any significant investments - The Group did not undertake any significant acquisitions, mergers, investments, or disposals of subsidiaries, associates, or joint ventures during the review period[80](index=80&type=chunk) - The Group held no significant investments[80](index=80&type=chunk) [Future Plans for Material Investments or Capital Assets](index=36&type=section&id=Future%20Plans%20for%20Material%20Investments%20or%20Capital%20Assets) As of June 30, 2025, and the date of this announcement, the Group has not authorized any other plans for material investments or additions to capital assets - As of June 30, 2025, and the date of this announcement, the Group has not authorized any other plans for material investments or additions to capital assets[81](index=81&type=chunk) [Pledged Assets](index=36&type=section&id=Pledged%20Assets) The Group's borrowings are secured by certain property, plant, and equipment, as well as trade receivables, with changes in the carrying value of pledged assets as of June 30, 2025 Pledged Assets | Type of Pledged Asset | June 30, 2025 (US$ Thousand) | December 31, 2024 (US$ Thousand) | | :--- | :--- | :--- | | Property, Plant and Equipment | 6,057 | 5,618 | | Trade Receivables | 5,863 | 7,777 | [Market Risks](index=36&type=section&id=Market%20Risks) The Group faces foreign currency risk, commodity price risk, liquidity risk, and credit risk in its daily operations, mitigating foreign currency risk through forward exchange contracts but not commodity price risk with derivatives, while directors consider liquidity risk not significant, and credit risk from receivables is managed through credit limits and export credit insurance - The Group faces foreign currency transaction risk, which is hedged through forward exchange contracts[84](index=84&type=chunk) - The Group is exposed to raw material price fluctuation risk but has not entered into commodity derivative instruments for hedging[85](index=85&type=chunk) - The directors have reviewed working capital and capital expenditure requirements and determined there is no significant liquidity risk[86](index=86&type=chunk) - The primary credit risk arises from trade and bills receivables, mitigated through credit limit controls and the purchase of export credit insurance (covering **90% of international sales receivables**, with a maximum compensation of **US$20,000 thousand**)[87](index=87&type=chunk) Other Information [Events After the Reporting Period](index=38&type=section&id=Events%20After%20the%20Reporting%20Period) No significant events affecting the Company have occurred from June 30, 2025, up to the date of this announcement - No significant events affecting the Company have occurred from **June 30, 2025**, up to the date of this announcement[88](index=88&type=chunk) [Interim Dividend](index=38&type=section&id=Interim%20Dividend) The Board of Directors resolved not to declare an interim dividend for the six months ended June 30, 2025, consistent with the prior corresponding period - The Board of Directors resolved not to declare an interim dividend for the six months ended **June 30, 2025** (2024 corresponding period: nil)[89](index=89&type=chunk) [Employees](index=38&type=section&id=Employees) As of June 30, 2025, the Group had approximately 1,901 employees, a decrease from 2,163 on December 31, 2024, with the company regularly reviewing employee remuneration and benefits, providing social insurance, provident funds, and discretionary bonuses, and emphasizing employee training through scientific and reasonable programs to enhance professional skills - As of **June 30, 2025**, the Group had approximately **1,901 employees** (December 31, 2024: **2,163 employees**)[90](index=90&type=chunk) - The company regularly reviews employee remuneration and benefits, providing social insurance, employee provident fund schemes, and discretionary bonus schemes[90](index=90&type=chunk) - The Group continuously improves its internal employee training system, develops scientific and reasonable training and development plans, and conducts effectiveness evaluations[90](index=90&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=38&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company%27s%20Listed%20Securities) During the review period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities, and as of June 30, 2025, the Company held no treasury shares - During the review period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[91](index=91&type=chunk) - As of **June 30, 2025**, the Company held no treasury shares[91](index=91&type=chunk) [Corporate Governance](index=38&type=section&id=Corporate%20Governance) The Company has adopted the Corporate Governance Code, but during the review period, there were two deviations: the roles of Chairman and Chief Executive Officer were not separated, with Mr. Wang Donglei serving both functions, and Mr. Wang Donglei was unable to attend the Annual General Meeting, though the Board believes these deviations are appropriate under current circumstances and has taken steps to ensure effective communication and decision-making - The Company has adopted the Corporate Governance Code, but during the review period, there were two deviations: the roles of Chairman and Chief Executive Officer were not separated, with Mr. Wang Donglei serving as both Chairman and Chief Executive Officer[92](index=92&type=chunk)[93](index=93&type=chunk) - Mr. Wang Donglei, the Chairman, was unable to attend the Annual General Meeting held on **June 13, 2025**, due to other work arrangements[93](index=93&type=chunk) - The Board believes that the deviation from Code Provision C.2.1 is appropriate, contributing to more effective planning and execution of long-term business strategies and enhancing decision-making efficiency during the transition period[93](index=93&type=chunk) [Audit Committee](index=40&type=section&id=Audit%20Committee) The Audit Committee, comprising three independent non-executive directors with Mr. Li Gangwei as Chairman, is responsible for maintaining auditor relations, reviewing financial information, and overseeing financial reporting, risk management, and internal control systems, and has reviewed and discussed the interim results for the reporting period - The Audit Committee comprises three independent non-executive directors: Mr. Li Gangwei (Chairman), Mr. Wang Xuexian, and Mr. Chen Hong[95](index=95&type=chunk) - Its primary responsibilities include maintaining relations with auditors, reviewing financial information, and overseeing the financial reporting system, risk management, and internal control systems[95](index=95&type=chunk) - The Committee has reviewed and discussed the interim results for the reporting period[95](index=95&type=chunk) [Remuneration Committee](index=40&type=section&id=Remuneration%20Committee) The Remuneration Committee, consisting of one executive director and two independent non-executive directors with Mr. Li Gangwei as Chairman, is primarily responsible for reviewing the remuneration packages, policies, and structure for directors and senior management, ensuring transparency in the remuneration determination process - The Remuneration Committee comprises Ms. Chen Jianrong (Executive Director), Mr. Li Gangwei (Chairman, Independent Non-executive Director), and Mr. Wang Xuexian (Independent Non-executive Director)[96](index=96&type=chunk) - Its primary responsibilities include reviewing the remuneration packages, policies, and structure for directors and senior management, and ensuring transparency in the remuneration determination process[96](index=96&type=chunk) [Nomination Committee](index=40&type=section&id=Nomination%20Committee) The Nomination Committee, composed of two executive directors and three independent non-executive directors with Mr. Wang Donglei as Chairman, is primarily responsible for reviewing the Board structure, developing director nomination and appointment procedures, advising on director appointments and succession planning, and assessing the independence of independent non-executive directors - The Nomination Committee comprises Mr. Wang Donglei (Chairman, Executive Director), Ms. Chen Jianrong (Executive Director), Mr. Li Gangwei, Mr. Wang Xuexian, and Mr. Chen Hong (Independent Non-executive Directors)[97](index=97&type=chunk) - Its primary responsibilities include reviewing the Board structure, developing director nomination and appointment procedures, advising on director appointments and succession planning, and assessing the independence of independent non-executive directors[97](index=97&type=chunk) [Strategy and Planning Committee](index=41&type=section&id=Strategy%20and%20Planning%20Committee) The Strategy and Planning Committee, consisting of four executive directors and one independent non-executive director with Mr. Wang Donglei as Chairman, is primarily responsible for recommending and formulating the Company's strategic development plans for Board consideration - The Strategy and Planning Committee comprises Mr. Wang Donglei (Chairman, Executive Director), Ms. Chen Jianrong, Mr. Xiao Yu, Mr. Wang Dun (Executive Directors), and Mr. Wang Xuexian (Independent Non-executive Director)[98](index=98&type=chunk) - Its primary responsibility is to recommend and formulate the Company's strategic development plans for Board consideration[98](index=98&type=chunk) [Changes in Directors' Information](index=41&type=section&id=Changes%20in%20Directors%27%20Information) Effective January 1, 2025, Ms. Chen Jianrong resigned as Chief Executive Officer and was appointed as a member of the Nomination Committee, and Mr. Wang Xuexian was also appointed as a member of the Nomination Committee, with no other discloseable changes to the Board or directors' information since then - Ms. Chen Jianrong resigned as the Company's Chief Executive Officer, effective **April 1, 2025**[99](index=99&type=chunk) - Ms. Chen Jianrong was appointed as a member of the Nomination Committee, effective **June 27, 2025**[99](index=99&type=chunk) - Mr. Wang Xuexian was appointed as a member of the Nomination Committee, effective **June 27, 2025**[100](index=100&type=chunk) Report Publication and Acknowledgements [Publication of Interim Results Announcement and Interim Report](index=42&type=section&id=Publication%20of%20Interim%20Results%20Announcement%20and%20Interim%20Report) This interim results announcement has been published on the HKEX website and the Company's website, and the Group's interim report, containing all information required by the Listing Rules, will be released on these websites in due course - This interim results announcement has been published on the HKEX website (www.hkexnews.hk) and the Company's website (www.nvc-international.com)[101](index=101&type=chunk) - The Group's interim report will be published on the aforementioned websites in due course[101](index=101&type=chunk) [Review of Interim Results](index=42&type=section&id=Review%20of%20Interim%20Results) The Group's interim results have been reviewed by the Audit Committee and approved by the Board of Directors, and external auditor Deloitte Touche Tohmatsu has conducted a review of the interim results in accordance with Hong Kong Standard on Review Engagements 2410 - The Group's interim results have been reviewed by the Audit Committee and approved by the Board of Directors[102](index=102&type=chunk) - External auditor Deloitte Touche Tohmatsu has reviewed the interim results in accordance with Hong Kong Standard on Review Engagements 2410[102](index=102&type=chunk) [Acknowledgements](index=42&type=section&id=Acknowledgements) The Board of Directors extends its sincere gratitude to the Group's management and employees for their contributions during the review period, and to all shareholders for their strong support - The Board of Directors extends its sincere gratitude to the Group's management and employees for their contributions during the review period[103](index=103&type=chunk) - The Board of Directors sincerely thanks all shareholders for their strong support[103](index=103&type=chunk) Definitions [Definitions](index=43&type=section&id=Definitions) This section provides definitions for key terms and terminology used in the announcement, ensuring consistent understanding of the report's content - This section provides definitions for key terms and terminology used in the announcement, including "Audit Committee," "Board," "China," "Corporate Governance Code," "Company," "Corresponding Period," "Directors," "Group," "Hong Kong," "LED," "Listing Rules," "Model Code," "ODM," "Review Period," "RMB," "SEK," "Shares," "Shareholders," "Stock Exchange," "Subsidiary," "Treasury Shares," "UK," "US," "US$," and "We"[104](index=104&type=chunk)[105](index=105&type=chunk)[106](index=106&type=chunk)[107](index=107&type=chunk)[108](index=108&type=chunk)[109](index=109&type=chunk)[110](index=110&type=chunk)[111](index=111&type=chunk)[112](index=112&type=chunk)[113](index=113&type=chunk)[114](index=114&type=chunk)

[Financial Highlights](index=1&type=section&id=Financial%20Highlights) For the six months ended June 30, 2025, operating revenue slightly decreased, but net profit and basic earnings per share increased, with no interim dividend recommended Financial Highlights for H1 2025 | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Operating Revenue | 615.4 | 617.0 | -0.3% | | Net Profit | 72.2 | 68.6 | +5.3% | | Net Profit Attributable to Owners of Parent Company | 70.9 | 63.3 | +12.0% | | Basic Earnings Per Share (RMB) | 0.08 | 0.07 | +14.3% | - The Board does not recommend the distribution of an interim dividend for the six months ended June 30, 2025[3](index=3&type=chunk) [Unaudited Condensed Consolidated Interim Financial Information](index=2&type=section&id=I.%20Unaudited%20Condensed%20Consolidated%20Interim%20Financial%20Information%20of%20the%20Group) This section presents the Group's unaudited condensed consolidated interim financial statements, including the income statement and balance sheet [Consolidated Income Statement](index=2&type=section&id=1.%20Consolidated%20Income%20Statement) For the six months ended June 30, 2025, the Group's total operating revenue slightly decreased, but operating profit and net profit increased due to cost control and reduced credit impairment losses, with net profit attributable to owners of the parent company growing significantly Key Data from Consolidated Income Statement (For the six months ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Total Operating Revenue | 615,359 | 617,041 | -0.27% | | Total Operating Costs | 536,599 | 541,233 | -0.86% | | Operating Profit | 94,473 | 88,699 | +6.51% | | Total Profit | 95,103 | 89,672 | +6.06% | | Income Tax Expense | 22,860 | 21,075 | +8.47% | | Net Profit | 72,244 | 68,597 | +5.32% | | Net Profit Attributable to Owners of Parent Company | 70,856 | 63,289 | +11.96% | | Basic Earnings Per Share (RMB/share) | 0.08 | 0.07 | +14.29% | - Credit impairment losses decreased from **RMB 20,187 thousand** in 2024 to **RMB 13,408 thousand** in 2025, positively impacting profit growth[4](index=4&type=chunk) [Consolidated Balance Sheet](index=4&type=section&id=2.%20Consolidated%20Balance%20Sheet) As of June 30, 2025, the Group's total assets slightly increased from the end of 2024, driven by higher cash and bank balances and accounts receivable, while total current liabilities significantly increased due to higher short-term borrowings and non-current liabilities due within one year Key Data from Consolidated Balance Sheet (As of June 30) | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Total Assets | 7,285,140 | 7,188,076 | +1.35% | | Total Current Assets | 1,651,354 | 1,444,270 | +14.34% | | Total Non-current Assets | 5,633,785 | 5,743,806 | -1.92% | | Total Liabilities | 4,104,551 | 4,039,593 | +1.61% | | Total Current Liabilities | 1,816,882 | 1,521,227 | +19.44% | | Total Non-current Liabilities | 2,287,669 | 2,518,366 | -9.16% | | Total Shareholders' Equity | 3,180,589 | 3,148,483 | +1.02% | - Cash and bank balances increased by **41.78%** from **RMB 447,179 thousand** at the end of 2024 to **RMB 634,029 thousand** as of June 30, 2025[6](index=6&type=chunk) - Short-term borrowings increased by **102.03%** from **RMB 119,374 thousand** at the end of 2024 to **RMB 241,162 thousand** as of June 30, 2025[7](index=7&type=chunk) [Notes to the Condensed Consolidated Interim Financial Statements](index=7&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Interim%20Financial%20Statements) This section provides detailed notes explaining the basis of preparation, accounting policies, and specific financial statement items [Basis of Preparation and Principal Accounting Policies](index=7&type=section&id=1.%20Basis%20of%20Preparation%20and%20Principal%20Accounting%20Policies) The Group's financial statements are prepared in accordance with Chinese Enterprise Accounting Standards, the Hong Kong Companies Ordinance, and Listing Rules, based on a going concern assumption and consistent with the accounting policies used for the 2024 consolidated financial statements - The financial statements are prepared in accordance with the Accounting Standards for Business Enterprises issued by the Ministry of Finance of the PRC, the Hong Kong Companies Ordinance, and relevant provisions of the Hong Kong Stock Exchange Listing Rules[9](index=9&type=chunk) - These financial statements are prepared on a going concern basis, and the accounting policies are consistent with those adopted for the consolidated financial statements for the year ended December 31, 2024[9](index=9&type=chunk)[10](index=10&type=chunk) [Revenue](index=7&type=section&id=2.%20Revenue) The Group's total revenue slightly decreased, with significant growth in wastewater treatment business revenue, a substantial reduction in engineering business revenue, and a decline in other income, all derived from China Breakdown of Revenue from Customer Contracts (For the six months ended June 30) | Service Type | 2025 (RMB thousand) | 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Water Supply Business | 188,648 | 188,391 | +0.14% | | Wastewater Treatment Business | 357,605 | 323,894 | +10.41% | | Engineering Business | 66,908 | 95,447 | -29.91% | | Other | 2,197 | 9,309 | -76.40% | | **Total Revenue** | **615,359** | **617,041** | **-0.27%** | - All of the Group's revenue is derived from China[11](index=11&type=chunk) [Segment Information](index=8&type=section&id=3.%20Segment%20Information) The Group primarily operates in two reportable segments: water supply and wastewater treatment, with the wastewater treatment segment showing growth in both revenue and profit, while the water supply segment's revenue declined and continued to incur losses, albeit at a reduced rate - The Group's primary reportable segments are the "Water Supply Segment" (including water supply and engineering services) and the "Wastewater Treatment Segment"[13](index=13&type=chunk)[14](index=14&type=chunk) Revenue and Profit by Reportable Segment (For the six months ended June 30) | Segment | 2025 Revenue (RMB thousand) | 2024 Revenue (RMB thousand) | Revenue Change (%) | 2025 Profit (RMB thousand) | 2024 Profit (RMB thousand) | Profit Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Water Supply | 255,556 | 283,838 | -10.0% | -30,525 | -30,572 | +0.15% | | Wastewater Treatment | 357,605 | 323,894 | +10.4% | 103,786 | 103,049 | +0.71% | | Other | 2,197 | 9,309 | -76.4% | -1,017 | -3,880 | +73.8% | | **Total** | **615,359** | **617,041** | **-0.3%** | **72,244** | **68,597** | **+5.3%** | Assets and Liabilities by Reportable Segment (As of June 30) | Segment | 2025 Assets (RMB thousand) | 2024 Assets (RMB thousand) | 2025 Liabilities (RMB thousand) | 2024 Liabilities (RMB thousand) | | :--- | :--- | :--- | :--- | :--- | | Water Supply | 4,499,428 | 4,515,975 | 2,352,408 | 2,346,191 | | Wastewater Treatment | 3,511,415 | 3,310,196 | 1,835,919 | 1,687,320 | | Other |

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 就 因 本 公 告 全 部或任何部分內容而產生或因依賴該等內容而引致的任何損失承擔任何責任。 （於 開 曼 群 島 註 冊 成 立 的 有 限 公 司） （股 份 代 號：01345） 截至二零二五年六月三十日止六個月之 中期業績公告 – 1 – • 本集團截至二零二五年六月三十日止六個月的收益為人民幣647.3百 萬 元， 較去年同期人民幣818.0百萬元減少20.9%。 • 本集團截至二零二五年六月三十日止六個月的毛利為人民幣303.0百 萬 元， 較去年同期人民幣350.5百萬元減少13.6%。 • 本集團截至二零二五年六月三十日止六個月的純利為人民幣45.8百 萬 元， 較去年同期人民幣88.3百萬元減少48.1%。 • 本公司截至二零二五年六月三十日止六個月每股基本盈利為人民幣0.04 元，較 去 年 同 期 人 民 幣0.08元減少50.0%。 簡明綜合損益及其他全面收益表 截至二零二五年六月三十日止六個月 截至六月三十日止六個 ...

紫元元控股集團有限公司 Ziyuanyuan Holdings Group Limited （於開曼群島註冊成立的有限公司） （股份代號：8223） 截至二零二五年六月三十日止六個月 中期業績公告 香港聯合交易所有限公司（「聯交所」）GEM的特色 GEM乃為較於聯交所上市的其他公司可能帶有更高投資風險的中小型公司而設的市場。有意 投資者應了解投資於該等公司的潛在風險，並應經過審慎周詳考慮後方作出投資決定。 由於GEM上市公司普遍為中小型公司，於GEM買賣的證券可能會較於聯交所主板買賣的證 券承受較大的市場波動風險，同時無法保證於GEM買賣的證券會有高流通量的市場。 香港交易及結算所有限公司及聯交所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，概不就因本公告全部或任何部份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。 本公告乃遵照聯交所GEM證券上市規則（「GEM上市規則」）的規定而提供有關紫元元控股集 團有限公司（「本公司」）的資料，本公司之董事（「董事」）願就本公告共同及個別地承擔全部責 任。董事在作出一切合理查詢後，確認就彼等所知及所信，本公告所載資料在各重要方面均 ...

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告之內容概不負責，對其準確性 或完整性亦不發表任何聲明，並明確表示，概不對因本公告全部或任何部份內容而產生或因倚 賴該等內容而引致之任何損失承擔任何責任。 JIANGXI BANK CO., LTD.* 江西銀行股份有限公司 * （於中華人民共和國註冊成立的股份有限公司） （股份代號：1916） 截至2025年6月30日止六個月之中期業績公告 江西銀行股份有限公司*（「本行」）董事會（「董事會」）欣然公佈本行及其附屬公司 截至2025年6月30日止六個月之未經審計合併中期業績（「中期業績」）。本業績公 告載有本行2025年中期報告全文，符合《香港聯合交易所有限公司證券上市規則》 有關中期業績初步公告的相關內容規定。董事會及董事會審計委員會已審閱及確 認中期業績。 本業績公告刊載於香港聯合交易所有限公司網站(www.hkexnews.hk)及本行網站 (www.jx-bank.com)。截至2025年6月30日止六個月之中期報告將適時刊載於上述 網站，並按本行H股股東選擇收取公司通訊的方式寄發予本行H股股東。 承董事會命 江西銀行股份有限公司* 董事長 曾暉 ...

[Interim Results Summary](index=1&type=section&id=中期業績概要) [2025 Interim Results Summary](index=1&type=section&id=二零二五年中期業績概要) The Group achieved significant performance growth in the first half of 2025, with substantial increases in new contract value, revenue, gross profit, and profit attributable to owners of the parent, alongside improved gross margin and growing uncompleted contract value 2025 Interim Results Overview (RMB thousands) | Metric | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | Year-on-Year Growth (%) | | :--- | :--- | :--- | :--- | | New Contract Value | 555,500 | 460,600 | 20.6% | | Revenue | 478,700 | 285,100 | 67.9% | | Gross Profit | 246,600 | 118,700 | 107.8% | | Profit Attributable to Owners of the Parent | 361,600 | (38,400) (Loss) | N/A (reversed loss) | | Uncompleted Contract Value (Period-end) | 1,088,100 | 859,700 (End of previous year) | 26.6% | | Gross Margin | 51.5% | 41.6% | 9.9 percentage points | [2](index=2&type=chunk) [Condensed Consolidated Financial Statements](index=2&type=section&id=簡明綜合財務報表) [Condensed Consolidated Statement of Profit or Loss](index=2&type=section&id=簡明綜合損益表) The Group achieved a significant profit turnaround in the first half of 2025, reversing a loss from the same period last year to substantial profit, primarily driven by strong growth in revenue and gross profit, and a significant increase in other income and gains Condensed Consolidated Statement of Profit or Loss (RMB thousands) | Metric | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | Change | | :--- | :--- | :--- | :--- | | Revenue | 478,667 | 285,089 | 67.9% Growth | | Cost of Revenue | (232,108) | (166,401) | 39.5% Growth | | Gross Profit | 246,559 | 118,688 | 107.8% Growth | | Other Income and Gains | 370,240 | 19,393 | 1809.1% Growth | | Selling, Distribution and Administrative Expenses | (87,983) | (55,794) | 57.7% Growth | | Net Impairment Losses on Financial and Contract Assets | (17,675) | (9,119) | 93.8% Growth | | Other Expenses | (142,056) | (91,003) | 56.1% Growth | | Finance Costs | (6,346) | (5,490) | 15.6% Growth | | Share of Profit (Loss) of Associates | 280 | (712) | Reversed Loss | | Profit (Loss) Before Tax | 363,019 | (24,037) | Reversed Loss | | Income Tax Credit (Expense) | 4,001 | (3,879) | Reversed Loss | | Profit (Loss) for the Period | 367,020 | (27,916) | Reversed Loss | | Profit (Loss) Attributable to Owners of the Parent | 361,623 | (38,393) | Reversed Loss | | Basic Earnings (Loss) Per Share (RMB) | 0.21 | (0.02) | Reversed Loss | | Diluted Earnings (Loss) Per Share (RMB) | 0.21 | (0.02) | Reversed Loss | [4](index=4&type=chunk) [Condensed Consolidated Statement of Comprehensive Income](index=3&type=section&id=簡明綜合全面收益表) The Group achieved overall profit improvement in the first half of 2025, with total comprehensive income turning from a loss in the prior period to significant profit, primarily due to substantial growth in profit for the period, despite fluctuations in exchange differences on translation of foreign operations Condensed Consolidated Statement of Comprehensive Income (RMB thousands) | Metric | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | Change | | :--- | :--- | :--- | :--- | | Profit (Loss) for the Period | 367,020 | (27,916) | Reversed Loss | | Exchange Differences on Translation of Foreign Operations | (1,226) | 2,436 | Turned from Gain to Loss | | Other Comprehensive Income (Loss) for the Period | (1,226) | 2,436 | Turned from Gain to Loss | | Total Comprehensive Income (Loss) for the Period | 365,794 | (25,480) | Reversed Loss | | Attributable to Owners of the Company | 363,837 | (33,092) | Reversed Loss | | Attributable to Non-controlling Interests | 1,957 | 7,612 | 74.3% Decrease | [6](index=6&type=chunk) [Condensed Consolidated Statement of Financial Position](index=4&type=section&id=簡明綜合財務狀況表) As of June 30, 2025, the Group's financial position significantly improved, with substantial growth in total assets and net assets, as well as a significant increase in net current assets and total equity, reflecting business expansion and enhanced profitability Condensed Consolidated Statement of Financial Position (RMB thousands) | Metric | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Total Non-current Assets | 1,536,775 | 1,128,363 | 36.2% | | Total Current Assets | 2,212,227 | 1,709,931 | 29.4% | | Total Current Liabilities | 1,006,430 | 836,005 | 20.4% | | Net Current Assets | 1,205,797 | 873,926 | 38.0% | | Total Assets Less Current Liabilities | 2,742,572 | 2,002,289 | 37.0% | | Total Non-current Liabilities | 13,377 | 1,165 | 1048.2% | | Net Assets | 2,729,195 | 2,001,124 | 36.4% | | Total Equity | 2,729,195 | 2,001,124 | 36.4% | | Equity Attributable to Owners of the Company | 2,245,288 | 1,881,224 | 19.4% | | Non-controlling Interests | 483,907 | 119,900 | 303.6% | [7](index=7&type=chunk)[8](index=8&type=chunk) - Goodwill significantly decreased from **RMB 558,200 thousands** at the end of 2024 to **RMB 117,798 thousands** as of June 30, 2025, possibly related to the accounting treatment of business combinations[7](index=7&type=chunk) - Investments in associates increased from **RMB 215,635 thousands** at the end of 2024 to **RMB 284,988 thousands** as of June 30, 2025, reflecting increased investment in associates[7](index=7&type=chunk) [Notes to the Condensed Consolidated Financial Statements](index=6&type=section&id=簡明綜合財務報表附註) [1. Company and Group Information](index=6&type=section&id=1.%20公司及集團資料) The Group primarily provides infrastructure technology-related products, solutions, and services in the railway and power industries, along with energy-related management and services. During the period, the Group expanded into the aviation sector through the acquisition of Hentop Open Source, offering software technology development and consulting services - The Company is incorporated in the Cayman Islands, with its principal executive office located in Beijing, China[9](index=9&type=chunk) - The Group's businesses include railway and energy operations, with the addition of aviation business after the acquisition of Hentop Open Source during the period, providing software technology development and consulting services to large clients in aviation, manufacturing, and government sectors[10](index=10&type=chunk) [2. Basis of Presentation and Changes in Accounting Policies](index=6&type=section&id=2.%20呈列基準及會計政策變動) These interim financial statements are prepared in accordance with International Accounting Standard 34 and the Hong Kong Stock Exchange Listing Rules, presented in RMB. The adoption of new/revised International Financial Reporting Standards during the period did not result in significant changes to accounting policies or reported amounts - The Group's condensed consolidated interim financial statements are prepared in accordance with International Accounting Standard 34 and the Hong Kong Stock Exchange Listing Rules, presented in RMB[11](index=11&type=chunk) - The adoption of new/revised International Financial Reporting Standards (including amendments to IAS 21) did not result in significant changes to the Group's accounting policies or reported amounts[12](index=12&type=chunk)[13](index=13&type=chunk) [3. Operating Segment Information](index=7&type=section&id=3.%20經營分部資料) The Group's operating segments include railway, energy, and aviation businesses, with management allocating resources and assessing performance based on each segment's results. In the first half of 2025, all segments achieved revenue growth, with significant contributions from the energy and aviation businesses - The Group's operating segments include railway business (providing products, solutions, and maintenance services), energy business (providing power equipment, generation, and consulting services), and aviation business (providing software technology development and consulting services)[15](index=15&type=chunk)[16](index=16&type=chunk)[17](index=17&type=chunk) Operating Segment Information (RMB thousands) | Segment | Revenue H1 2025 (RMB thousands) | Revenue H1 2024 (RMB thousands) | Segment Results H1 2025 (RMB thousands) | Segment Results H1 2024 (RMB thousands) | | :--- | :--- | :--- | :--- | :--- | | Railway Business | 164,080 | 143,771 | 22,475 | 10,599 | | Energy Business | 248,689 | 141,318 | 4,094 | 25,433 | | Aviation Business | 65,898 | – | 1,281 | – | | Total | 478,667 | 285,089 | 27,850 | 36,032 | [18](index=18&type=chunk)[19](index=19&type=chunk) - In the first half of 2025, profit before tax was **RMB 363,019 thousands**, compared to a loss of **RMB 24,037 thousands** in the prior period, primarily impacted by a gain from remeasuring the fair value of an associate at the acquisition date (**RMB 350,170 thousands**)[18](index=18&type=chunk)[19](index=19&type=chunk) [4. Revenue](index=9&type=section&id=4.%20收益) The Group's revenue significantly increased by **67.9%** to **RMB 478,667 thousands** in the first half of 2025, primarily driven by power supply and newly added software development and technical services, with revenue recognition mainly occurring over time Revenue by Source (RMB thousands) | Revenue Source | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | Year-on-Year Growth (%) | | :--- | :--- | :--- | :--- | | Sales of Products and Provision of Professional Solutions | 171,258 | 129,239 | 32.5% | | Maintenance Services | 39,145 | 19,181 | 104.1% | | Power Supply | 242,762 | 136,669 | 77.6% | | Software Development and Technical Services | 25,502 | – | N/A (newly added) | | Total | 478,667 | 285,089 | 67.9% | [21](index=21&type=chunk) - Revenue from the Chinese mainland market was **RMB 230,711 thousands**, while revenue from other regions was **RMB 247,956 thousands**, indicating that overseas markets contributed more than the Chinese mainland[21](index=21&type=chunk) - Most revenue (**RMB 422,045 thousands**) was recognized over time, while **RMB 56,622 thousands** of revenue was recognized at a point in time[21](index=21&type=chunk) [5. Other Income and Gains](index=10&type=section&id=5.%20其他收入及收益) The Group's other income and gains significantly increased to **RMB 370,240 thousands** in the first half of 2025, primarily due to a substantial gain from remeasuring the fair value of Hentop Open Source at the acquisition date Other Income and Gains (RMB thousands) | Item | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | Change | | :--- | :--- | :--- | :--- | | Dividend Income from Financial Assets at FVTPL | – | 2,413 | 100% Decrease | | Finance Income | 4,841 | 4,738 | 2.2% Growth | | Gain on Disposal of Financial Assets at FVTPL | 4,219 | 77 | 5379.2% Growth | | Total Rental Income | 10,946 | 7,812 | 40.1% Growth | | Gain from Remeasuring Fair Value of Associate at Acquisition Date | 350,170 | – | N/A (newly added) | | Others | 3,198 | 1,219 | 162.3% Growth | | Total | 370,240 | 19,393 | 1809.1% Growth | [22](index=22&type=chunk) [6. Profit (Loss) Before Tax](index=11&type=section&id=6.%20除稅前溢利（虧損）) The Group's profit before tax significantly improved in the first half of 2025, turning from a loss in the prior period to a profit, primarily influenced by a combination of operating factors including cost of inventories, depreciation, amortization, wages and salaries, impairment losses, and exchange losses Profit (Loss) Before Tax Components (RMB thousands) | Item | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | Change | | :--- | :--- | :--- | :--- | | Cost of Inventories | 154,988 | 112,775 | 37.4% Growth | | Depreciation and Amortization | 34,251 | 30,496 | 12.3% Growth | | Wages and Salaries | 65,515 | 21,831 | 200.1% Growth | | Impairment of Trade Receivables | 16,290 | 9,205 | 77.0% Growth | | Impairment of Contract Assets (Reversal of Impairment) | 320 | (644) | Turned Gain into Loss | | Net Exchange Losses | 139,174 | 38,164 | 264.7% Growth | | Fair Value Changes of Financial Assets at FVTPL | 2,509 | 52,453 | 95.2% Decrease | | Gain on Disposal of Financial Assets at FVTPL | (4,219) | (77) | 5379.2% Growth | [23](index=23&type=chunk) [7. Income Tax](index=12&type=section&id=7.%20所得稅) The Group's income tax policy is determined by tax rates in each operating jurisdiction, with Chinese mainland subsidiaries subject to corporate income tax rates of **9% to 25%**, and high-tech enterprises enjoying a **15%** preferential rate. Myanmar subsidiaries are subject to **25%** corporate income tax, while non-Myanmar registered subsidiaries' service income in Myanmar is subject to **2.5%** withholding tax. Income tax for the period turned from an expense to a credit, primarily due to the origination and reversal of temporary differences for deferred tax assets - Chinese subsidiaries in Tibet are subject to a **9%** corporate income tax rate, other Chinese mainland subsidiaries are subject to a **25%** rate, and high-tech enterprises enjoy a **15%** preferential rate[24](index=24&type=chunk) - Myanmar-registered subsidiaries are subject to a **25%** corporate income tax rate, while non-Myanmar registered subsidiaries earning service income in Myanmar are subject to a **2.5%** withholding tax[26](index=26&type=chunk) Income Tax (RMB thousands) | Item | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | Change | | :--- | :--- | :--- | :--- | | Current Income Tax | 6,830 | 8,442 | 19.1% Decrease | | Deferred Income Tax (Origination and Reversal of Temporary Differences) | (10,831) | (4,563) | 137.4% Growth | | Income Tax (Credit) Expense | (4,001) | 3,879 | Reversed Loss | [28](index=28&type=chunk) [8. Earnings (Loss) Per Share Attributable to Owners of the Company](index=13&type=section&id=8.%20本公司擁有人應佔每股盈利（虧損）) The Group's basic and diluted earnings per share for the first half of 2025 both turned from a loss in the prior period to a profit, reflecting a significant improvement in the company's profitability Earnings (Loss) Per Share (RMB) | Metric | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | | Profit (Loss) for the Period Attributable to Owners of the Company | RMB 361,623,000 | Loss RMB 38,393,000 | Reversed Loss | | Weighted Average Number of Ordinary Shares in Issue | 1,720,185,862 shares | 1,697,814,721 shares | 1.3% Growth | | Basic Earnings (Loss) Per Share | RMB 0.21 | RMB (0.02) | Reversed Loss | | Diluted Earnings (Loss) Per Share | RMB 0.21 | RMB (0.02) | Reversed Loss | [29](index=29&type=chunk)[30](index=30&type=chunk) - Basic earnings per share for the first half of 2025 were not adjusted as there were no outstanding potentially dilutive shares. Basic loss per share for the first half of 2024 was also not adjusted due to the anti-dilutive effect of share options[30](index=30&type=chunk) [9. Dividends](index=13&type=section&id=9.%20股息) The Company did not declare or propose an interim dividend for the first half of 2025, consistent with the prior period - The Company did not declare or propose an interim dividend for the six months ended June 30, 2025 (June 30, 2024: nil)[31](index=31&type=chunk) [10. Trade and Bills Receivables](index=14&type=section&id=10.%20貿易應收款項及應收票據) As of June 30, 2025, the Group's total trade and bills receivables amounted to **RMB 545,909 thousands**, an increase from the end of the previous year, with receivables due within six months accounting for the largest proportion. Impairment provisions increased, but there was no significant concentration of credit risk Trade and Bills Receivables (RMB thousands) | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Trade Receivables | 685,559 | 467,981 | 46.5% | | Impairment | (155,482) | (129,494) | 20.1% | | Net Trade Receivables | 530,077 | 338,487 | 56.6% | | Bills Receivable | 15,832 | 31,367 | -49.5% | | Total | 545,909 | 369,854 | 47.6% | [32](index=32&type=chunk) Aging Analysis of Trade Receivables (Net of Loss Allowance) (RMB thousands) | Aging Analysis (Net of Loss Allowance) | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Within 6 months | 166,737 | 48,984 | | 6 months to 1 year | 193,734 | 162,525 | | 1 to 2 years | 87,851 | 59,109 | | 2 to 3 years | 41,930 | 30,737 | | Over 3 years | 39,825 | 37,132 | | Total | 530,077 | 338,487 | [34](index=34&type=chunk) - Trade receivables generally have credit terms of **30 to 180 days**, and bills receivable generally have maturity dates of **180 to 270 days**. The Group has no significant concentration of credit risk[32](index=32&type=chunk)[33](index=33&type=chunk) [11. Contract Assets](index=15&type=section&id=11.%20合約資產) As of June 30, 2025, the Group's net contract assets amounted to **RMB 194,241 thousands**, a decrease from the end of the previous year, with a slight increase in impairment provisions Contract Assets (RMB thousands) | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Contract Assets | 227,283 | 292,826 | -22.4% | | Impairment | (33,042) | (32,325) | 2.2% | | Net Contract Assets | 194,241 | 260,501 | -25.4% | [35](index=35&type=chunk) [12. Trade and Bills Payables](index=15&type=section&id=12.%20貿易應付款項及應付票據) As of June 30, 2025, the Group's total trade and bills payables amounted to **RMB 240,070 thousands**, a decrease from the end of the previous year, with current or less than one year due accounting for the largest proportion Aging Analysis of Trade and Bills Payables (RMB thousands) | Aging Analysis | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Current or Less Than One Year | 101,994 | 132,952 | -23.3% | | One to Two Years | 31,918 | 39,695 | -19.6% | | Over Two Years | 106,158 | 93,655 | 13.3% | | Total | 240,070 | 266,302 | -9.8% | [36](index=36&type=chunk) - Trade payables are non-interest bearing, with credit terms generally ranging from **1 to 360 days**[36](index=36&type=chunk) [13. Business Combinations](index=16&type=section&id=13.%20業務合併) The Group gained control over Hentop Open Source Information Technology Co., Ltd. on January 1, 2025, through board nomination arrangements, despite holding only a **27.2%** equity interest. This acquisition contributed **RMB 65,898 thousands** in revenue and **RMB 5,068 thousands** in comprehensive profit to the Group - The Group gained control over Hentop Open Source on January 1, 2025, through board nomination arrangements, despite holding only a **27.2%** equity interest[37](index=37&type=chunk)[38](index=38&type=chunk) - Since the acquisition, Hentop Open Source has contributed **RMB 65,898 thousands** in revenue and **RMB 5,068 thousands** in comprehensive profit to the Group[38](index=38&type=chunk) - The Group accounted for the acquisition on a provisional basis, with the initial accounting treatment not yet finalized[39](index=39&type=chunk) [14. Acquisition of an Associate](index=16&type=section&id=14.%20收購一間聯營公司) On June 20, 2025, the Group signed an agreement to acquire a **40%** equity interest in Beijing Zhongzhirunbang Technology Co., Ltd. for **RMB 80,000,000**, a company primarily engaged in intelligent railway operation and maintenance and system integration. The seller committed to performance targets, with the Group entitled to compensation if not met - The Group will acquire a **40%** equity interest in Beijing Zhongzhirunbang Technology Co., Ltd. for **RMB 80,000,000**, whose main business is intelligent railway operation and maintenance and system integration[40](index=40&type=chunk)[41](index=41&type=chunk) - The seller committed to performance targets: net profit for 2025 not less than **RMB 22,000,000**, and cumulative net profit during the guarantee period not less than **RMB 46,200,000**, with the Group entitled to compensation if not met[40](index=40&type=chunk) [Review of the Group's Overall Operating Performance in H1](index=17&type=section&id=上半年本集團整體經營情況回顧) [Overall Operating Overview](index=17&type=section&id=整體經營概覽) The Group's overall operating performance was strong in the first half of 2025, with significant growth in new contracts, revenue, gross profit, and profit attributable to owners of the parent, alongside a notable increase in gross margin and continued growth in uncompleted contract value Overall Operating Overview (RMB thousands) | Metric | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | Year-on-Year Growth (%) | | :--- | :--- | :--- | :--- | | New Contract Value | 555,500 | 460,600 | 20.6% | | Revenue | 478,700 | 285,100 | 67.9% | | Uncompleted Contract Value (Period-end) | 1,088,100 | 859,700 (End of previous year) | 26.6% | | Gross Profit | 246,600 | 118,700 | 107.8% | | Gross Margin | 51.5% | 41.6% | 9.9 percentage points | | Profit Attributable to Owners of the Parent | 361,600 | (38,400) (Loss) | N/A (reversed loss) | [42](index=42&type=chunk) [Business and Financial Review](index=17&type=section&id=業務及財務回顧) [Business Review](index=17&type=section&id=業務回顧) The Group's business spans three major segments: railway, energy, and aviation. The railway business saw a steady recovery in the domestic market and secured large overseas orders; the energy business achieved stable growth with significant progress in new energy; and the aviation business diversified through the acquisition of Hentop Open Source, actively planning for artificial intelligence and low-altitude economy - The Group primarily provides infrastructure technology-related products, professional solutions, and services in the railway, power, and aviation industries, along with contract energy management[43](index=43&type=chunk) [Railway Business](index=18&type=section&id=鐵路業務) The railway business secured new domestic contracts totaling **RMB 210 million**, maintaining a high market share. The overseas market successfully won the Nigeria Kama Railway Project (**RMB 169 million**), further expanding its international business footprint - New contracts signed in the domestic market totaled **RMB 210 million**, maintaining a high market share in railway communication sub-market products and solutions business[45](index=45&type=chunk) - Successfully won the Nigeria Kama Railway Project (contract value **RMB 169 million**), marking another breakthrough in the overseas railway market business[46](index=46&type=chunk) [Energy Business](index=18&type=section&id=能源業務) Energy business power plant project revenue significantly increased, primarily due to an upward adjustment in settlement unit prices by Myanmar clients. The new energy business actively responded to national calls for energy conservation and emission reduction, with 12 pairs of service area distributed photovoltaic power generation projects, including Renqiu East, connected to the grid and operational, and successfully signed the Shunping 11 pairs of service area distributed photovoltaic power generation projects - Revenue from the Myanmar Yangon AHLONE **151 MW** power plant project and Hlawga **123 MW** power plant restoration project significantly increased in the first half of the year due to an upward adjustment in settlement unit prices by Myanmar clients[46](index=46&type=chunk) - The 'Renqiu East and other 12 pairs of service area distributed photovoltaic power generation projects' entered operation after grid connection acceptance, and the 'Shunping 11 pairs of service area distributed photovoltaic power generation projects' were successfully signed, laying the foundation for the continued development of the new energy business[48](index=48&type=chunk) [Aviation Business](index=19&type=section&id=航空業務) The Group gained control over Hentop Open Source on January 1, 2025, a company primarily providing software development and technical services to aviation clients. Hentop Open Source implements a development strategy of 'based on civil aviation business, fully embracing artificial intelligence, and vigorously deploying low-altitude economy,' and has launched products based on large model technology - The Group gained control over Hentop Open Source Information Technology Co., Ltd. on January 1, 2025, a company primarily providing software development and technical services to aviation clients[48](index=48&type=chunk) - Hentop Open Source's development strategy is 'based on civil aviation business, fully embracing artificial intelligence, and vigorously deploying low-altitude economy,' and it has launched products based on large model technology[49](index=49&type=chunk) [Financial Review](index=22&type=section&id=財務回顧) The Group's financial performance was strong in the first half of 2025, with significant growth in both revenue and gross profit, primarily benefiting from upward adjustments in energy business unit prices and the consolidation contribution from aviation business. Other income significantly increased, but selling, administrative expenses, financial asset impairment, and exchange losses also rose. Overall net profit turned from loss to profit [Revenue](index=22&type=section&id=收益) The Group's total revenue reached **RMB 478,667 thousands** in the first half of 2025, a **67.9%** year-on-year increase. Energy business revenue grew **76.0%** to **RMB 248,700 thousands**, railway business grew **14.1%** to **RMB 164,100 thousands**, and aviation business added **RMB 65,900 thousands** in revenue. By business model, value-added operations and services revenue grew **97.2%**, and products and professional solutions revenue grew **32.6%** Revenue by Industry Segment (RMB thousands) | Industry Segment | Revenue H1 2025 (RMB thousands) | Revenue H1 2024 (RMB thousands) | Year-on-Year Growth (%) | | :--- | :--- | :--- | :--- | | Railway | 164,080 | 143,771 | 14.1% | | Energy | 248,689 | 141,318 | 76.0% | | Aviation | 65,898 | – | N/A (newly added) | | Total | 478,667 | 285,089 | 67.9% | [57](index=57&type=chunk) - The increase in energy segment revenue was primarily due to an upward adjustment in settlement unit prices by Myanmar clients[58](index=58&type=chunk) Revenue by Business Model (RMB thousands) | Business Model | Revenue H1 2025 (RMB thousands) | Revenue H1 2024 (RMB thousands) | Year-on-Year Growth (%) | | :--- | :--- | :--- | :--- | | Products and Professional Solutions | 171,258 | 129,239 | 32.6% | | Value-added Operations and Services | 307,409 | 155,850 | 97.2% | | Total | 478,667 | 285,089 | 67.9% | [60](index=60&type=chunk) [Gross Profit and Gross Margin](index=24&type=section&id=毛利及毛利率) The Group's gross profit increased by **107.8%** to **RMB 246,600 thousands** in the first half of 2025, with gross margin improving from **41.6%** to **51.5%**. The energy business had the highest gross margin at **67.0%**, mainly due to upward adjustments in settlement unit prices for Myanmar power plant projects. The aviation business added **RMB 32,200 thousands** in gross profit, with a gross margin of **48.8%** Gross Profit and Gross Margin by Industry Segment (RMB thousands) | Industry Segment | Gross Profit H1 2025 (RMB thousands) | Gross Profit H1 2024 (RMB thousands) | Gross Margin H1 2025 (%) | Gross Margin H1 2024 (%) | | :--- | :--- | :--- | :--- | :--- | | Railway | 47,772 | 35,367 | 29.1% | 24.6% | | Energy | 166,635 | 83,321 | 67.0% | 59.0% | | Aviation | 32,152 | – | 48.8% | – | | Total | 246,559 | 118,688 | 51.5% | 41.6% | [69](index=69&type=chunk) - The significant increase in gross profit and gross margin for the energy segment was primarily due to an upward adjustment in settlement unit prices by Myanmar clients, leading to higher power plant project revenue compared to the prior period[67](index=67&type=chunk) Gross Profit and Gross Margin by Business Model (RMB thousands) | Business Model | Gross Profit H1 2025 (RMB thousands) | Gross Profit H1 2024 (RMB thousands) | Gross Margin H1 2025 (%) | Gross Margin H1 2024 (%) | | :--- | :--- | :--- | :--- | :--- | | Products and Professional Solutions | 55,752 | 31,156 | 32.6% | 24.1% | | Value-added Operations and Services | 190,807 | 87,532 | 62.1% | 56.2% | | Total | 246,559 | 118,688 | 51.5% | 41.6% | [71](index=71&type=chunk) [Other Income and Gains](index=27&type=section&id=其他收入及收益) Other income and gains significantly increased to **RMB 370,200 thousands** in the first half of 2025, primarily attributable to a gain of approximately **RMB 350,200 thousands** from remeasuring the fair value of Hentop Open Source at the acquisition date - Other income and gains for the first half of 2025 amounted to **RMB 370,200 thousands**, an increase of **RMB 350,800 thousands** compared to the prior period[72](index=72&type=chunk) - This primarily includes a gain of approximately **RMB 350,200 thousands** from remeasuring the fair value of Hentop Open Source at the acquisition date[72](index=72&type=chunk) [Selling, Distribution and Administrative Expenses](index=27&type=section&id=銷售、分銷及行政開支) Selling, distribution and administrative expenses for the first half of 2025 were approximately **RMB 88,000 thousands**, a year-on-year increase of **RMB 32,200 thousands**, primarily due to the consolidation contribution of approximately **RMB 30,900 thousands** from Hentop Open Source - Selling, distribution and administrative expenses for the first half of 2025 were approximately **RMB 88,000 thousands**, an increase of **RMB 32,200 thousands** compared to the prior period[73](index=73&type=chunk) - The main reason was the consolidation of Hentop Open Source, whose selling, distribution and administrative expenses for the first half of the year were approximately **RMB 30,900 thousands**[73](index=73&type=chunk) [Net Impairment Losses on Financial and Contract Assets](index=27&type=section&id=金融及合約資產減值虧損淨額) Net impairment losses on financial and contract assets for the first half of 2025 were approximately **RMB 17,700 thousands**, an increase from **RMB 9,100 thousands** in the prior period - Net impairment losses on financial and contract assets for the first half of 2025 were approximately **RMB 17,700 thousands**, compared to approximately **RMB 9,100 thousands** in the prior period[74](index=74&type=chunk) [Other Expenses](index=27&type=section&id=其他開支) Other expenses for the first half of 2025 amounted to **RMB 141,700 thousands**, a year-on-year increase of **RMB 89,500 thousands**, primarily due to significant foreign exchange losses from the Myanmar power business - Other expenses for the first half of 2025 amounted to **RMB 141,700 thousands**, an increase of **RMB 89,500 thousands** compared to the prior period[75](index=75&type=chunk) - This was primarily due to significant foreign exchange losses from the Myanmar power business[75](index=75&type=chunk) [Share of Profit of Joint Ventures/Associates](index=27&type=section&id=應佔合營╱聯營公司之收益) Share of profit of associates for the first half of 2025 was **RMB 300 thousands**, compared to a loss of **RMB 700 thousands** in the prior period, achieving a turnaround from loss to profit - Share of profit of associates for the first half of 2025 was **RMB 300 thousands**, compared to a loss of **RMB 700 thousands** in the prior period[76](index=76&type=chunk) [Fair Value Changes of Equity Investments](index=28&type=section&id=權益性投資的公允價值變動損益) Fair value changes of equity investments resulted in a loss of **RMB 300 thousands** in the first half of 2025, a significant reduction from the **RMB 10,100 thousands** loss in the prior period (excluding Hentop Open Source), primarily because Hentop Open Source is no longer included in this item due to consolidation - Fair value changes of equity investments resulted in a loss of **RMB 300 thousands** in the first half of 2025[78](index=78&type=chunk) - Fair value changes resulted in a loss of **RMB 38,800 thousands** in the prior period, which included a loss of **RMB 28,700 thousands** from Hentop Open Source. Excluding Hentop Open Source, the loss in the prior period was **RMB 10,100 thousands**, and the loss for the current period decreased by **RMB 9,800 thousands**[78](index=78&type=chunk) - The Group holds equity investments in Shenzhen Honglu, Helios Energy Limited, Xinyizu, and Suzhou Huagai, and plans to explore further cooperation opportunities at appropriate times[79](index=79&type=chunk) [Finance Costs](index=28&type=section&id=財務成本) Finance costs for the first half of 2025 were approximately **RMB 6,300 thousands**, a slight increase from **RMB 5,500 thousands** in the prior period, primarily due to interest expenses on interest-bearing bank loans - Finance costs for the first half of 2025 were approximately **RMB 6,300 thousands**, compared to approximately **RMB 5,500 thousands** in the prior period[80](index=80&type=chunk) [Income Tax (Credit) Expense](index=29&type=section&id=所得稅（抵免）開支) Total income tax for the first half of 2025 was a credit of **RMB 4,000 thousands**, compared to an expense of **RMB 3,900 thousands** in the prior period, primarily due to the origination and reversal of temporary differences for deferred tax assets of approximately **RMB 10,900 thousands** - Total income tax credit for the first half of 2025 was **RMB 4,000 thousands**, compared to an income tax expense of **RMB 3,900 thousands** in the prior period[81](index=81&type=chunk) - The significant change in income tax expense was primarily due to the origination and reversal of temporary differences for deferred tax assets of approximately **RMB 10,900 thousands** in the first half of the year[81](index=81&type=chunk) [Profit for the Period](index=29&type=section&id=本期利潤) The Group achieved a net profit of **RMB 367,000 thousands** in the first half of 2025, a significant improvement from a net loss of **RMB 27,900 thousands** in the prior period, primarily benefiting from fair value gains due to Hentop Open Source's consolidation and reduced fair value changes of financial assets - The Group achieved a net profit of **RMB 367,000 thousands** in the first half of 2025, compared to a net loss of **RMB 27,900 thousands** in the prior period, representing an increase in net profit of **RMB 394,900 thousands**[82](index=82&type=chunk) - Key reasons include: a gain of approximately **RMB 350,200 thousands** from remeasuring the fair value of Hentop Open Source at the acquisition date; and a reduction in fair value changes of financial assets by **RMB 52,200 thousands**[82](index=82&type=chunk) - Profit attributable to owners of the parent was **RMB 361,600 thousands**, compared to a loss of **RMB 38,400 thousands** in the prior period[83](index=83&type=chunk) [Inventory Turnover Days](index=29&type=section&id=存貨周轉日數) Inventory turnover days for the first half of 2025 were **220 days**, an improvement from **230 days** in the prior period Inventory Turnover Days | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Inventory Turnover Days | 220 days | 230 days | [84](index=84&type=chunk) [Trade Receivables Turnover Days](index=29&type=section&id=貿易應收款項周轉日數) Trade receivables turnover days for the first half of 2025 were **177 days**, an improvement from **197 days** in the prior period Trade Receivables Turnover Days | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Trade Receivables Turnover Days | 177 days | 197 days | [85](index=85&type=chunk) [Trade Payables Turnover Days](index=29&type=section&id=貿易應付款項周轉日數) Trade payables turnover days for the first half of 2025 were **166 days**, an improvement from **219 days** in the prior period Trade Payables Turnover Days | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Trade Payables Turnover Days | 166 days | 219 days | [86](index=86&type=chunk) [Liquidity, Financial Resources and Capital Structure](index=30&type=section&id=流動資金、財務資源及資本架構) [Liquidity and Financial Resources](index=30&type=section&id=流動資金及財務資源) The Group's liquidity position is robust, with a current ratio of **2.2**, net cash increasing to **RMB 168,300 thousands**, and a gearing ratio of **-7.1%**, indicating financial health. Primary sources of working capital include cash flows from operating activities, bank, and other loans - The Group's current ratio was **2.2** (end of 2024: **2.1**), indicating a robust financial position[88](index=88&type=chunk) - As of June 30, 2025, net cash was **RMB 168,300 thousands** (end of previous year: **RMB 161,400 thousands**), an increase of **RMB 6,900 thousands**[88](index=88&type=chunk) - The gearing ratio was **-7.1%** (end of previous year: **-9.7%**), an increase of **2.6 percentage points**[88](index=88&type=chunk) - Primary sources of working capital include cash flows from operating activities, bank, and other loans[87](index=87&type=chunk) [Financial Policy](index=30&type=section&id=財務政策) The Group implements a prudent financial policy, strictly controlling cash and risk management, and utilizing surplus cash reserves to invest in wealth management products for income generation. No derivative financial instruments were used to hedge risks in the first half of the year - The Group implements a prudent financial policy, strictly controlling cash and risk management, and utilizing surplus cash reserves to invest in wealth management products for income generation[89](index=89&type=chunk) - In the first half of 2025, the Group did not use any derivative financial instruments to hedge its risks[89](index=89&type=chunk) [Exchange Rate Risk and Hedging](index=31&type=section&id=匯率風險及對沖) Operating in Chinese mainland, Hong Kong, and Myanmar, the Group faces exchange rate fluctuation risks among RMB, Myanmar Kyat, HKD, and USD. No exchange rate hedging was conducted in the first half of the year, but the Group will continue to monitor and consider prudent measures - Operating in Chinese mainland, Hong Kong, and Myanmar, the Group's income, expenses, assets, and liabilities are primarily denominated in RMB, Myanmar Kyat, HKD, and USD, exposing it to potential foreign exchange risks[91](index=91&type=chunk) - In the first half of 2025, the Group did not enter into agreements or purchase instruments to hedge exchange rate risks, but will continue to monitor and plan to take prudent measures at appropriate times[91](index=91&type=chunk) [Contingent Liabilities](index=31&type=section&id=或然負債) As of June 30, 2025, the Group had no significant contingent liabilities - As of June 30, 2025, the Group had no significant contingent liabilities[92](index=92&type=chunk) [Pledge of Group's Assets](index=31&type=section&id=集團資產抵押) As of June 30, 2025, the Group had pledged assets including buildings, investment properties, equity interests in subsidiaries, trade receivables, and plant and equipment to secure bank financing, with the total pledged asset value adjusted from the end of the previous year - As of June 30, 2025, the Group had pledged deposits of approximately **RMB 62,200 thousands**, buildings with a net book value of approximately **RMB 185,500 thousands**, properties with an appraised value of approximately **RMB 68,300 thousands**, equity interests in four subsidiaries, trade receivables with a book value of **RMB 8,000 thousands**, rights to receive payments under power purchase agreements, plant and equipment with a book value of **RMB 201,900 thousands**, and receivables from power supply tariff rights as collateral to obtain bank financing[93](index=93&type=chunk) [Business Outlook](index=20&type=section&id=業務展望) [Railway Business Outlook](index=20&type=section&id=鐵路業務展望) The Group will focus on the frontier development of railway communication technology and digital transformation, increase investment in railway digitalization, and continue to cultivate overseas railway markets, leveraging opportunities from the 'Belt and Road' initiative to promote scaled and high-quality development of its overseas business - The Group will strengthen its internal capabilities, gradually increase investment in railway digitalization, actively explore the information sector market while maintaining its leading position in railway communication, and strive to remain an industry leader in intelligent railway construction and 5G-R development[51](index=51&type=chunk) - Based on existing project experience and market foundation, the Group will continue to increase investment in capital, technology, and talent in overseas railway markets, actively explore international cooperation opportunities, and promote scaled and high-quality development of its overseas railway business[52](index=52&type=chunk) - Influenced by the 'Belt and Road' initiative, demand for cross-border and cross-regional railway infrastructure cooperation in overseas railway markets will continue to be released, providing broad policy space for the Group's overseas business[52](index=52&type=chunk) [Energy Business Outlook](index=21&type=section&id=能源業務展望) The Group will maintain stable development of its power business, with Myanmar power plant projects successfully renewed until **2031**, and actively expand overseas power plant projects. Concurrently, it will vigorously develop new energy businesses, covering multiple areas such as photovoltaic power generation, charging piles, energy storage, and contract energy management - The renewal contract for the Myanmar Yangon AHLONE power plant project with the Myanmar Ministry of Electricity has been signed, with the second phase contract expiring in January **2031**. The Hlawga power plant restoration project has a ten-year operating period, and both power plants are in a stable development phase[53](index=53&type=chunk) - Building on the stable development of its power plant projects, the Group is actively expanding its new energy business, covering multiple areas such as photovoltaic power generation, charging piles, energy storage, and contract energy management[54](index=54&type=chunk) - In photovoltaic power generation, the 'Shunping 11 pairs of service area distributed photovoltaic power generation projects' were successfully signed, planned for completion and grid connection in **2025**, and the Group will continue to explore high-quality distributed photovoltaic power generation projects[56](index=56&type=chunk) [Aviation Business Outlook](index=21&type=section&id=航空業務展望) The Group will continue to support Hentop Open Source's business development in the aviation sector, continuously launching large model and artificial intelligence solutions, and positioning the low-altitude economy business as a new growth driver - The Group will continue to support Hentop Open Source in refining its existing aviation businesses and continuously launching large model and artificial intelligence solutions[55](index=55&type=chunk) - The Group will position the low-altitude economy business as a new growth driver for Hentop Open Source[55](index=55&type=chunk) [Other Information](index=32&type=section&id=其他資料) [Events After Reporting Period](index=32&type=section&id=報告期後事項) No significant events affecting the Group have occurred from June 30, 2025, up to the date of this announcement - No significant events affecting the Group have occurred from June 30, 2025, up to the date of this announcement[94](index=94&type=chunk) [Material Investments](index=32&type=section&id=重大投資) The Group previously subscribed to a private equity fund of **RMB 20,000,000** and redeemed all fund shares on April 2, 2025, resulting in an actual loss of approximately **RMB 3,597,807**. There were no other material investments during the period, nor are there specific future plans for material investments - The Company's indirect wholly-owned subsidiary previously subscribed to a private securities investment fund with an investment principal of **RMB 20,000,000**[95](index=95&type=chunk) - All fund shares were redeemed on April 2, 2025, resulting in an actual holding loss of approximately **RMB 3,597,807**[96](index=96&type=chunk) - Except as disclosed above, the Group held no other material investments during the period, nor were there specific future plans for material investments or capital assets as of the date of this announcement[96](index=96&type=chunk) [Material Acquisitions and Disposals of Subsidiaries and Associates](index=32&type=section&id=子公司及聯營公司的重大收購及出售事項) On June 20, 2025, the Company's indirect wholly-owned subsidiary signed an agreement to acquire a **40%** equity interest in Beijing Zhongzhirunbang Technology Co., Ltd. for **RMB 80,000,000**. As of June 30, 2025, the equity transfer registration had not yet been completed - On June 20, 2025, the Company's indirect wholly-owned subsidiary signed an agreement to acquire a **40%** equity interest in Beijing Zhongzhirunbang Technology Co., Ltd. for **RMB 80,000,000**[97](index=97&type=chunk) - As of June 30, 2025, the target company had not yet submitted an application for the registration of the equity transfer[98](index=98&type=chunk) [Employment and Remuneration Policies](index=33&type=section&id=僱傭及薪酬政策) As of June 30, 2025, the Group had **885** full-time employees. Remuneration policies are formulated based on individual position, responsibilities, performance, Group results, and market conditions, with several share award and share option schemes adopted to incentivize directors and eligible employees - As of June 30, 2025, the Group had **885** full-time employees[99](index=99&type=chunk) - Remuneration policies are formulated by the Board based on individual position, responsibilities, performance, Group results, and market conditions[99](index=99&type=chunk) - The Company has adopted a pre-IPO share award scheme, a share option scheme, and the 2021 share award scheme to incentivize directors, senior management, and employees[99](index=99&type=chunk) [Interim Dividend](index=33&type=section&id=中期股息) The Board does not recommend the payment of an interim dividend for the first half of 2025, consistent with the prior period - The Board does not recommend the payment of an interim dividend (prior period: nil)[100](index=100&type=chunk) [Purchase, Sale or Redemption of Listed Securities](index=33&type=section&id=購買、出售或贖回上市證券) During the period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities, and as of June 30, 2025, the number of treasury shares held by the Company was zero - During the period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[101](index=101&type=chunk) - As of June 30, 2025, the number of treasury shares held by the Company was zero[102](index=102&type=chunk) [Corporate Governance](index=33&type=section&id=企業管治) The Company places high importance on corporate governance, has adopted the Corporate Governance Code set out in Appendix C1 of the Hong Kong Stock Exchange Listing Rules, and has complied with all code provisions during the period - The Company has adopted the Corporate Governance Code set out in Appendix C1 of the Hong Kong Stock Exchange Listing Rules and has complied with all code provisions during the period[103](index=103&type=chunk) [Directors' Securities Transactions](index=33&type=section&id=董事進行證券交易) The Company has adopted the Model Code set out in Appendix C3 of the Listing Rules, and the directors confirm compliance with the code throughout the period - The Company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers set out in Appendix C3 of the Listing Rules[104](index=104&type=chunk) - Following specific enquiries, the directors confirm their compliance with the required standards set out in the Model Code throughout the period[104](index=104&type=chunk) [Audit Committee](index=34&type=section&id=審核委員會) The Audit Committee, established on June 18, 2010, comprises three independent non-executive directors, responsible for reviewing and overseeing the Company's financial reporting process and internal control system, and has reviewed the Group's unaudited interim financial information for the period - The Audit Committee was established on June 18, 2010, with primary responsibilities to review and oversee the Company's financial reporting process and internal control system[105](index=105&type=chunk) - The Audit Committee comprises three independent non-executive directors: Mr. Lai Hongyi (Chairman), Mr. Zhou Jianmin, and Ms. Huang Jianling[105](index=105&type=chunk) - The Audit Committee has reviewed the Group's unaudited interim financial information for the period[105](index=105&type=chunk) [Publication of 2025 Interim Report](index=34&type=section&id=刊發二零二五年中期報告) The Company's 2025 Interim Report will be dispatched to shareholders (upon request) in due course and published on the Company's website and the Stock Exchange's website - The Company's 2025 Interim Report will be dispatched to shareholders (upon request) in due course and published on the Company's website www.its.cn and the Stock Exchange's website www.hkexnews.hk[106](index=106&type=chunk) [Acknowledgements](index=34&type=section&id=致謝) Mr. Liao Jie, Chairman of the Company, extends sincere gratitude to the Board, management, all employees, shareholders, and business partners for their support - Mr. Liao Jie, Chairman of the Company, extends sincere gratitude to the Board, management, and all employees of the Company for their dedication and diligence, as well as to the Company's shareholders and business partners for their strong support of the Group[107](index=107&type=chunk)

（股份代號：1376） 截至2025年6月30日止六個月之 中期業績公告 Raffles Interior Limited（「本公司」）董事（「董事」）會（「董事會」）欣然呈列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中期業績連同2024年同期的 比較數字如下： 中期簡明綜合損益及其他全面收益表 截至2025年6月30日止六個月 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，並明確表示概不就因本公告全部或任何部分內容而產生或因依賴該等內容而引致的任何損失 承擔任何責任。 Raffles Interior Limited （ 於開曼群島註冊成立的有限公司） | | | 截至6月30日止六個月 | | | --- | --- | --- | --- | | | | 2025年 | 2024年 | | | | （ | 未經審核及 | | | 附註 | （未經審核） | 經重列） | | | | 千新加坡元 | 千新加坡元 | | 持續經營業務 | | | | | 收益 | 4 | 39,989 | 23, ...

Company Information [Company Information](index=3&type=section&id=Company%20Information) The company's board comprises four executive, two non-executive, and three independent non-executive directors, chaired by Li Sze Lim - The company's Board of Directors consists of four executive directors, two non-executive directors, and three independent non-executive directors, with Li Sze Lim serving as Chairman[4](index=4&type=chunk) - The company's registered office and principal place of business are located in R&F Center, Zhujiang New Town, Guangzhou, China, with its principal place of business in Hong Kong at The Center, Central[4](index=4&type=chunk) - The company's auditor is BDO Limited, Hong Kong, and its legal counsel is Sidley Austin[4](index=4&type=chunk) Chairman's Statement [Business Review](index=4&type=section&id=Business%20Review) Global economy faced challenges in H1 2025 with trade contraction and GDP slowdown, while China's economy showed resilience despite real estate downturn, prompting the Group to focus on sales and debt restructuring - The global economic environment was challenging, with new trade tariffs severely impacting global business, leading to a **3.2% contraction in global merchandise trade volume** and an average GDP growth slowdown to **1.1%** for major economies[5](index=5&type=chunk) - China's economy demonstrated resilience, with H1 GDP growing **5.3% to RMB 66.05 trillion**, primarily driven by industrial manufacturing and investment, though the real estate sector continued to drag down economic growth[6](index=6&type=chunk) - The Group is actively communicating with financial advisors and investors to formulate a comprehensive restructuring plan, particularly for offshore corporate actions concerning USD-denominated senior notes, with **over half of noteholders** already participating in the restructuring proposal[8](index=8&type=chunk) [Outlook](index=5&type=section&id=Outlook) The Group will maintain a conservative liquidity management approach and enhance stakeholder communication to navigate future market challenges - The Group will maintain a conservative liquidity management approach to ensure sufficient flexibility in a challenging market environment[9](index=9&type=chunk) - Management will personally lead efforts to address various challenges and strengthen dialogue with shareholders and investors to demonstrate accountability and transparency[9](index=9&type=chunk) [Acknowledgement](index=5&type=section&id=Acknowledgement) The Chairman expresses gratitude to all stakeholders for their continued support, confidence, and patience during challenging times - The Chairman thanks all stakeholders for their continued support, confidence, and patience in a challenging environment[10](index=10&type=chunk) Management Discussion and Analysis [Business Review](index=6&type=section&id=Business%20Review_MD%26A) The Group's H1 2025 contracted sales reached RMB 7.3 billion, with a significant property portfolio including properties under development, investment properties, hotels, and land reserves [Contracted Sales](index=6&type=section&id=Contracted%20Sales) In H1 2025, the Group achieved RMB 7.3 billion in contracted sales from 166 projects across 26 provinces and 3 overseas countries, with 63% from tier-one and tier-two cities 2025 First Half Contracted Sales Overview | Indicator | Value | | :--- | :--- | | Total Contracted Sales | RMB 7.3 billion | | Total Sales Area | 753,500 sq.m. | | Number of Projects | 166 | | Covered Provinces/Regions | 26 (including municipalities, autonomous regions) | | Covered Countries | 3 (overseas) | | Covered Cities | 96 | | Top Ten Provinces/Regions Contribution | RMB 5.64 billion (approx. 77%) | | Tier-one and Tier-two Cities Contribution | 63% | | Tier-three and Below Cities Contribution | 30% | | Overseas Contribution | 7% | | Residential Property Type Share | 57% | | Villa Property Type Share | 5% | | Commercial and Other Property Type Share | 38% | 2025 First Half Total Contracted Sales by Geographical Region | Region | Approximate Total Value (RMB million) | Approximate Total Sales Area (thousand sq.m.) | | :--- | :--- | :--- | | Northwest Region | 1,866.5 | 214.5 | | North China Region | 1,791.4 | 238.3 | | South China Region | 1,583.4 | 63.4 | | East China Region | 779.0 | 121.0 | | Overseas | 542.2 | 27.2 | | Hainan | 296.4 | 27.7 | | Central South Region | 223.2 | 43.2 | | Southwest Region | 219.1 | 18.2 | | **Total** | **7,301.2** | **753.5** | [Properties Under Development](index=7&type=section&id=Properties%20Under%20Development) As of June 30, 2025, the Group had approximately 9.385 million sq.m. of properties under development, with 4.964 million sq.m. available for sale Properties Under Development Overview as of June 30, 2025 | Indicator | Value | | :--- | :--- | | Total Gross Floor Area | 9,385,000 sq.m. | | Total Saleable Area | 4,964,000 sq.m. | | South China Region Total GFA | 3,123,000 sq.m. | | South China Region Total Saleable Area | 1,967,000 sq.m. | [Property Investment](index=7&type=section&id=Property%20Investment) As of June 30, 2025, the Group's investment property portfolio totaled approximately 3.0221 million sq.m., primarily in tier-one and tier-two cities - As of June 30, 2025, the Group's investment property portfolio had a total GFA of approximately **3,022,100 sq.m.**, of which approximately **1,871,100 sq.m.** were operating properties and approximately **1,151,000 sq.m.** were properties under development or planning[15](index=15&type=chunk) [Hotel Operations](index=7&type=section&id=Hotel%20Operations) As of June 30, 2025, the Group owned 22 self-built hotels with a total GFA of approximately 1.1106 million sq.m. and 7,513 rooms - As of June 30, 2025, the Group owned **22 self-built hotels**, with a total GFA of approximately **1,110,560 sq.m.** and **7,513 rooms**, managed by renowned hotel management groups[16](index=16&type=chunk) [Land Bank](index=8&type=section&id=Land%20Bank) As of June 30, 2025, the Group's land bank totaled approximately 48.037 million sq.m. of GFA, with 36.625 million sq.m. available for sale across 86 cities and regions Land Bank Overview as of June 30, 2025 | Indicator | Value | | :--- | :--- | | New Land Saleable Area (period) | 30,000 sq.m. | | Total Gross Floor Area | 48,037,000 sq.m. | | Total Saleable Area | 36,625,000 sq.m. | | Covered Cities and Regions | 86 | | Properties Under Development Total GFA | 46,485,000 sq.m. | | Investment Properties Total GFA | 1,552,000 sq.m. | [Financial Review](index=9&type=section&id=Financial%20Review) In H1 2025, the Group's revenue significantly decreased to RMB 5.765 billion, leading to an expanded net loss of RMB 4.082 billion, primarily due to reduced property development income [Revenue](index=9&type=section&id=Revenue) In H1 2025, the Group's total revenue decreased by 59.4% to RMB 5.765 billion, driven by a 60% decline in property development revenue 2025 First Half Revenue Overview | Indicator | 2025 H1 (RMB billion) | 2024 H1 (RMB billion) | YoY Change | | :--- | :--- | :--- | :--- | | Total Revenue | 5.765 | 14.211 | -59.4% | | Property Development Revenue | 4.165 | 10.484 | -60% | | Investment Property Rental Income | 0.313 | 0.425 | -26% | | Hotel Operations Revenue | 0.827 | 2.762 | -70% | | Delivered Sales Property Area | 460,960 sq.m. | 887,900 sq.m. | -48% | | Average Selling Price | RMB 9,000/sq.m. | RMB 11,800/sq.m. | -23.7% | [Cost of Sales](index=9&type=section&id=Cost%20of%20Sales) In H1 2025, the Group's cost of sales decreased by 65% to RMB 4.506 billion, aligning with the revenue decline, with land and construction costs representing 85% of property development costs 2025 First Half Cost of Sales Overview | Indicator | 2025 H1 (RMB billion) | 2024 H1 (RMB billion) | YoY Change | | :--- | :--- | :--- | :--- | | Cost of Sales | 4.506 | 12.882 | -65% | | Land and Construction Costs Share | 85% | - | - | | Land and Construction Cost per sq.m. | RMB 6,200 | RMB 9,330 | -33.5% | | Capitalized Interest | RMB 0.437 billion | RMB 0.947 billion | -53.9% | | Levies | RMB 0.062 billion | RMB 0.117 billion | -47% | [Gross Profit Margin](index=9&type=section&id=Gross%20Profit%20Margin) In H1 2025, the Group's overall gross profit was RMB 1.259 billion, with property development gross profit margin (excluding impairment) improving to 19.4% 2025 First Half Gross Profit and Gross Profit Margin | Indicator | 2025 H1 (RMB billion) | 2024 H1 (RMB billion) | YoY Change | | :--- | :--- | :--- | :--- | | Overall Gross Profit | 1.259 | 1.329 | -5.2% | | Property Development Gross Profit Margin (excl. impairment) | 19.4% | 10.9% | +8.5 percentage points | [Other Income and Other Gains/Losses – Net](index=9&type=section&id=Other%20Income%20and%20Other%20Gains%2FLosses%20%E2%80%93%20Net) In H1 2025, the Group recorded net other income and gains/losses of RMB 119 million, a significant decrease from the prior year due to lower gains from disposal of subsidiaries 2025 First Half Other Income and Other Gains/Losses – Net | Indicator | 2025 H1 (RMB billion) | 2024 H1 (RMB billion) | YoY Change | | :--- | :--- | :--- | :--- | | Other Income and Other Gains/Losses – Net | 0.119 | 1.715 | -93.1% | | Primary Reason | Higher gains from disposal of subsidiaries, joint ventures, and associates in prior period | - | - | [Selling and Marketing Expenses and Administrative Expenses](index=9&type=section&id=Selling%20and%20Marketing%20Expenses%20and%20Administrative%20Expenses) In H1 2025, the Group's selling and marketing expenses decreased by 25% to RMB 453 million, and administrative expenses decreased by 3.6% to RMB 1.52 billion, reflecting stringent cost control 2025 First Half Selling and Marketing Expenses and Administrative Expenses | Indicator | 2025 H1 (RMB billion) | 2024 H1 (RMB billion) | YoY Change | | :--- | :--- | :--- | :--- | | Selling and Marketing Expenses | 0.453 | 0.606 | -25% | | Administrative Expenses | 1.520 | 1.577 | -3.6% | | Primary Reason | Strict cost control measures | - | - | [Finance Costs – Net](index=10&type=section&id=Finance%20Costs%20%E2%80%93%20Net) In H1 2025, the Group's net finance costs decreased by 13% to RMB 2.394 billion, with total interest expenses amounting to RMB 4.249 billion 2025 First Half Net Finance Costs | Indicator | 2025 H1 (RMB billion) | 2024 H1 (RMB billion) | YoY Change | | :--- | :--- | :--- | :--- | | Net Finance Costs | 2.394 | 2.752 | -13% | | Total Interest Expenses | 4.249 | 4.613 | -7.9% | | Capitalized Interest included in Cost of Sales | 0.437 | 0.947 | -53.9% | | Total Finance Costs Incurred | 2.831 | 3.699 | -23.5% | [Income Tax Expense](index=10&type=section&id=Income%20Tax%20Expense) In H1 2025, the Group's income tax expense significantly increased to RMB 1.216 billion, primarily due to a substantial rise in land appreciation tax 2025 First Half Income Tax Expense | Indicator | 2025 H1 (RMB billion) | 2024 H1 (RMB billion) | YoY Change | | :--- | :--- | :--- | :--- | | Total Income Tax Expense | 1.216 | 0.465 | +161.5% | | Land Appreciation Tax | 1.140 | 0.356 | +220.2% | | Corporate and Deferred Income Tax | 0.076 | 0.109 | -30.3% | [Profitability](index=10&type=section&id=Profitability) For the period ended June 30, 2025, the Group's net loss expanded to RMB 4.082 billion, mainly due to declining property development revenue and the absence of prior year's disposal gains 2025 First Half Profitability | Indicator | 2025 H1 (RMB billion) | 2024 H1 (RMB billion) | YoY Change | | :--- | :--- | :--- | :--- | | Net Loss | 4.082 | 2.331 | Loss expanded by 75.1% | | Primary Reasons | Decline in revenue due to real estate downturn; prior period included gains from disposal of subsidiaries | - | - | [Financial Resources, Liquidity and Indebtedness](index=10&type=section&id=Financial%20Resources%2C%20Liquidity%20and%20Indebtedness) As of June 30, 2025, the Group's total cash and bank balances were RMB 3.51 billion, with total borrowings of RMB 104.52 billion, of which RMB 97.59 billion are due within one year, leading to a debt-to-asset ratio of 408% Financial Resources and Indebtedness Overview as of June 30, 2025 | Indicator | 2025 Jun 30 (RMB billion) | 2024 Dec 31 (RMB billion) | Change | | :--- | :--- | :--- | :--- | | Total Cash and Bank Balances | 3.51 | 3.86 | -9.07% | | Total Borrowings | 104.52 | 103.02 | +1.46% | | Borrowings Due Within One Year | 97.59 | - | - | | Borrowings Due One to Five Years | 4.87 | - | - | | Borrowings Due After Five Years | 2.06 | - | - | | New Bank Borrowings (H1) | 3.73 | - | - | | Repaid Bank Borrowings (H1) | 2.33 | - | - | | Effective Interest Rate of Bank Borrowings | 5.81% | 5.64% | +0.17 percentage points | | Debt-to-Asset Ratio | 408% | 348% | +60 percentage points | - Non-RMB borrowings accounted for approximately **32% of total borrowings**, and the Group will closely monitor RMB exchange rate fluctuations, but no foreign exchange hedging transactions were entered into during the period[27](index=27&type=chunk) [Pledge of Assets](index=11&type=section&id=Pledge%20of%20Assets) As of June 30, 2025, the Group pledged assets with a book value of RMB 63.15 billion and shares in certain subsidiaries to secure RMB 57.92 billion in bank and other borrowings Asset Pledge Situation as of June 30, 2025 | Indicator | 2025 Jun 30 (RMB billion) | 2024 Dec 31 (RMB billion) | Change | | :--- | :--- | :--- | :--- | | Total Book Value of Pledged Assets | 63.15 | 66.32 | -4.78% | | Bank and Other Borrowings Secured | 57.92 | 54.69 | +5.91% | [Contingent Liabilities](index=11&type=section&id=Contingent%20Liabilities) As of June 30, 2025, the Group's total guarantees for property buyers' mortgage loans and joint venture/associate borrowings amounted to RMB 59.82 billion, a 5% decrease from year-end 2024 Contingent Liabilities as of June 30, 2025 | Indicator | 2025 Jun 30 (RMB billion) | 2024 Dec 31 (RMB billion) | Change | | :--- | :--- | :--- | :--- | | Total Guarantees | 59.82 | 62.75 | -5% | | Guarantee Types | Bank mortgage loan guarantees, joint and several guarantees for joint venture and associate borrowings | - | - | [Employees and Remuneration Policy](index=11&type=section&id=Employees%20and%20Remuneration%20Policy) As of June 30, 2025, the Group employed approximately 20,276 staff, with total employee costs of RMB 785 million for the first half, offering competitive remuneration and training Employees and Remuneration Overview as of June 30, 2025 | Indicator | Value | | :--- | :--- | | Total Number of Employees | 20,276 people | | Total Employee Costs (H1) | RMB 0.785 billion | Other Information [Interim Dividend](index=11&type=section&id=Interim%20Dividend) The Board resolved not to declare an interim dividend for the six months ended June 30, 2025, consistent with the prior year - The Board resolved not to declare an interim dividend for the six months ended June 30, 2025 (2024 H1: nil)[31](index=31&type=chunk) [Share Capital](index=12&type=section&id=Share%20Capital) As of June 30, 2025, the company's total issued share capital comprised 3,752,367,344 H shares, representing 100% of the total share capital Share Capital Structure as of June 30, 2025 | Share Class | Number of Shares | Percentage | | :--- | :--- | :--- | | H Shares | 3,752,367,344 | 100.00% | | **Total** | **3,752,367,344** | **100.00%** | [Directors', Chief Executive's and Supervisors' Interests and Short Positions in Shares, Underlying Shares and Debentures](index=12&type=section&id=Directors%27%2C%20Chief%20Executive%27s%20and%20Supervisors%27%20Interests%20and%20Short%20Positions%20in%20Shares%2C%20Underlying%20Shares%20and%20Debentures) As of June 30, 2025, directors and supervisors held long positions in the company's shares, with Chairman Li Sze Lim holding approximately 26.31% of H shares Directors'/Supervisors' Long Positions in Company Shares as of June 30, 2025 | Director/Supervisor | Share Class | Personal Holdings | Spouse or Children Under 18 Holdings | Corporate Interests | Total Shares Held at Period End | Approximate Percentage of Total Share Capital | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Li Sze Lim | H Shares | 966,092,672 | 5,000,000 | 16,000,000 | 987,092,672 | 26.31% | | Zhang Hui | H Shares | 1,894,800 | | | 1,894,800 | 0.05% | | Xiang Lijun | H Shares | 1,800,000 | | | 1,800,000 | 0.05% | | Li Hailun | H Shares | 3,600 | | 1,000,000 | 1,003,600 | 0.03% | | Wu Youhua | H Shares | | 588,000 | | 588,000 | 0.02% | | Chen Liangnuan | H Shares | 20,000,000 | | | 20,000,000 | 0.53% | - Dr. Li Sze Lim holds interests in Guangzhou Tianfu Real Estate Development Co., Ltd., Beijing Fushengli Real Estate Brokerage Co., Ltd., and Easy Tactic Limited, including interests in USD senior notes issued by Easy Tactic[34](index=34&type=chunk)[37](index=37&type=chunk) [Interests of Substantial Shareholders and Other Persons in the Shares and Underlying Shares of the Company](index=14&type=section&id=Interests%20of%20Substantial%20Shareholders%20and%20Other%20Persons%20in%20the%20Shares%20and%20Underlying%20Shares%20of%20the%20Company) As of June 30, 2025, substantial shareholder Mr. Zhang Li held a 22.44% interest in the company's H shares, including beneficial ownership and spouse's interest Substantial Shareholders' Interests in Company Shares as of June 30, 2025 | Shareholder Name | Share Class | Nature of Interest | Number of Shares | Approximate Percentage of H Share Interest | | :--- | :--- | :--- | :--- | :--- | | Zhang Li | H Shares | Beneficial owner/Spouse's interest | 842,146,272 | 22.44% | [Purchase, Redemption or Sale of the Company’s Listed Securities](index=14&type=section&id=Purchase%2C%20Redemption%20or%20Sale%20of%20the%20Company%E2%80%99s%20Listed%20Securities) For the six months ended June 30, 2025, neither the company nor its subsidiaries purchased, redeemed, or sold any of its listed securities - For the six months ended June 30, 2025, neither the company nor any of its subsidiaries purchased, redeemed, or sold any of the company's listed securities[41](index=41&type=chunk) [Board Composition and Code](index=15&type=section&id=Board%20Composition%20and%20Code) The Board comprises nine members, including four executive, two non-executive, and three independent non-executive directors, ensuring diversity and professional oversight, with no CEO position - The Board of Directors consists of **nine members**, including four executive directors, two non-executive directors, and three independent non-executive directors, ensuring diversity and professionalism[42](index=42&type=chunk) - All directors have signed three-year service contracts and are subject to retirement by rotation and re-election every three years; the Board is responsible for formulating business policies, strategies, and risk management[42](index=42&type=chunk) - The company has no Chief Executive Officer position, with responsibilities jointly performed by the executive directors (including the Chairman), an arrangement deemed to be in the company's best interests[43](index=43&type=chunk) [Compliance with the Model Code for Securities Transactions by Directors and Supervisors of Listed Issuers](index=16&type=section&id=Compliance%20with%20the%20Model%20Code%20for%20Securities%20Transactions%20by%20Directors%20and%20Supervisors%20of%20Listed%20Issuers) All directors and supervisors confirmed compliance with the Model Code for Securities Transactions by Directors and Supervisors of Listed Issuers for the six months ended June 30, 2025 - All directors and supervisors have confirmed compliance with the Model Code for Securities Transactions by Directors and Supervisors of Listed Issuers as set out in Appendix C3 of the Listing Rules for the six months ended June 30, 2025[44](index=44&type=chunk) [Compliance with the Corporate Governance Code](index=16&type=section&id=Compliance%20with%20the%20Corporate%20Governance%20Code) The company has complied with the Corporate Governance Code provisions as set out in Appendix C1 of the Listing Rules for the six months ended June 30, 2025 - For the six months ended June 30, 2025, the company has complied with the code provisions set out in the Corporate Governance Code in Appendix C1 of the Listing Rules[45](index=45&type=chunk) [Audit Committee](index=16&type=section&id=Audit%20Committee) The Audit Committee, composed of independent non-executive directors and a non-executive director, reviews accounting policies, internal controls, risk management, and financial reporting, and has reviewed the unaudited interim results - The Audit Committee comprises independent non-executive directors Wang Zhenbang (Chairman), Zheng Er Cheng, and non-executive director Li Hailun[46](index=46&type=chunk) - The committee is responsible for reviewing accounting policies, internal controls, risk management, and financial reporting, and has reviewed the company's unaudited interim results for the six months ended June 30, 2025[46](index=46&type=chunk) [Remuneration Committee](index=17&type=section&id=Remuneration%20Committee) The Remuneration Committee, chaired by Zheng Er Cheng, advises the Board on the company's remuneration policy and specific remuneration packages for directors - The Remuneration Committee comprises Zheng Er Cheng (Chairman), Dr. Li Sze Lim, and Wu Youhua, with its primary responsibility to recommend the company's remuneration policy and specific remuneration packages for directors to the Board[47](index=47&type=chunk) [Nomination Committee](index=17&type=section&id=Nomination%20Committee) The Nomination Committee, comprising five directors including the Chairman, reviews board structure, identifies director candidates, and recommends succession plans - The Nomination Committee consists of **five directors**, including executive director Li Sze Lim (Chairman), non-executive director Li Hailun, and three independent non-executive directors[48](index=48&type=chunk) - The committee is responsible for reviewing the Board's structure, identifying and nominating director candidates, and making recommendations on succession planning[48](index=48&type=chunk) [Shareholder Relations](index=17&type=section&id=Shareholder%20Relations) The company has adopted a shareholder communication policy to ensure timely and comprehensive information dissemination and encourages engagement through various channels - The company has adopted a shareholder communication policy aimed at ensuring shareholders and investors receive timely, comprehensive, and equal access to company information[49](index=49&type=chunk) - The company encourages shareholders to enhance communication through general meetings, annual reports, interim reports, circulars, announcements, and the company website[49](index=49&type=chunk) Interim Condensed Consolidated Financial Information (Unaudited) [Interim Condensed Consolidated Statement of Financial Position](index=17&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the Group's total assets were RMB 289.149 billion, with total equity of RMB 24.771 billion, and total liabilities of RMB 264.379 billion, with current liabilities accounting for 93.8% Key Data from Interim Condensed Consolidated Statement of Financial Position | Indicator | 2025 Jun 30 (RMB thousand) | 2024 Dec 31 (RMB thousand) | Change | | :--- | :--- | :--- | :--- | | **Assets** | | | | | Non-current Assets | 78,275,400 | 78,451,732 | -0.22% | | Current Assets | 210,874,058 | 212,141,101 | -0.60% | | **Total Assets** | **289,149,458** | **290,592,833** | **-0.50%** | | **Equity** | | | | | Equity Attributable to Owners of the Company | 12,279,928 | 15,922,439 | -22.88% | | Non-controlling Interests | 12,491,026 | 12,534,276 | -0.34% | | **Total Equity** | **24,770,954** | **28,456,715** | **-12.95%** | | **Liabilities** | | | | | Non-current Liabilities | 16,280,181 | 18,319,463 | -11.13% | | Current Liabilities | 248,098,323 | 243,816,655 | +1.76% | | **Total Liabilities** | **264,378,504** | **262,136,118** | **+0.86%** | | **Total Equity and Liabilities** | **289,149,458** | **290,592,833** | **-0.50%** | [Interim Condensed Consolidated Statement of Profit or Loss](index=19&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss) In H1 2025, the Group's revenue was RMB 5.765 billion, resulting in a net loss of RMB 4.082 billion, an expansion of 75.1% year-on-year, with basic and diluted loss per share of RMB 1.0783 Key Data from Interim Condensed Consolidated Statement of Profit or Loss | Indicator | 2025 H1 (RMB thousand) | 2024 H1 (RMB thousand) | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | 5,765,053 | 14,210,860 | -59.4% | | Cost of Sales | (4,506,006) | (12,881,959) | -65.0% | | Gross Profit | 1,259,047 | 1,328,901 | -5.2% | | Other Income | 349,474 | 171,360 | +104.0% | | Other (Losses)/Gains – Net | (230,385) | 1,543,197 | Shift from gain to loss | | Selling and Marketing Expenses | (452,890) | (605,533) | -25.2% | | Administrative Expenses | (1,520,020) | (1,576,747) | -3.6% | | Operating (Loss)/Profit | (572,621) | 859,377 | Shift from profit to loss | | Finance Costs – Net | (2,393,758) | (2,751,643) | -13.0% | | Loss Before Income Tax | (2,866,030) | (1,865,557) | Loss expanded by 53.6% | | Income Tax Expense | (1,216,091) | (465,144) | +161.4% | | **Loss for the Period** | **(4,082,121)** | **(2,330,701)** | **Loss expanded by 75.1%** | | Loss Attributable to Owners of the Company | (4,046,337) | (2,330,839) | Loss expanded by 73.6% | | Basic and Diluted Loss Per Share (RMB) | (1.0783) | (0.6212) | Loss expanded by 73.6% | [Interim Condensed Consolidated Statement of Comprehensive Income](index=20&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) In H1 2025, the Group reported a loss for the period of RMB 4.082 billion, with total comprehensive loss for the period of RMB 3.678 billion, primarily due to the loss and partially offset by foreign currency translation differences Key Data from Interim Condensed Consolidated Statement of Comprehensive Income | Indicator | 2025 H1 (RMB thousand) | 2024 H1 (RMB thousand) | Change | | :--- | :--- | :--- | :--- | | Loss for the Period | (4,082,121) | (2,330,701) | Loss expanded by 75.1% | | Other Comprehensive Income | 403,826 | 158,441 | +154.9% | | Of which: Currency Translation Differences | 570,322 | 204,100 | +179.4% | | **Total Comprehensive Income for the Period** | **(3,678,295)** | **(2,172,260)** | **Loss expanded by 69.3%** | | Total Comprehensive Income Attributable to Owners of the Company | (3,642,511) | (2,172,398) | Loss expanded by 67.7% | [Interim Condensed Consolidated Statement of Changes in Equity](index=21&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) As of June 30, 2025, total equity attributable to owners of the company decreased by 22.88% to RMB 12.280 billion, mainly due to the loss for the period, partially offset by other comprehensive income Key Data from Interim Condensed Consolidated Statement of Changes in Equity | Indicator | 2025 Jun 30 (RMB thousand) | 2025 Jan 1 (RMB thousand) | Change | | :--- | :--- | :--- | :--- | | Total Equity Attributable to Owners of the Company | 12,279,928 | 15,922,439 | -22.88% | | Loss for the Period (Attributable to Owners of the Company) | (4,046,337) | - | - | | Total Other Comprehensive Income (Attributable to Owners of the Company) | 403,826 | - | - | | Currency Translation Differences | 570,322 | - | - | [Interim Condensed Consolidated Statement of Cash Flows](index=23&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) In H1 2025, the Group generated net cash from operating activities of RMB 312 million, a positive shift from the prior year, with a net decrease in cash and cash equivalents of RMB 133 million Key Data from Interim Condensed Consolidated Statement of Cash Flows | Indicator | 2025 H1 (RMB thousand) | 2024 H1 (RMB thousand) | Change | | :--- | :--- | :--- | :--- | | Net Cash Generated From/(Used In) Operating Activities | 311,732 | (1,672,967) | Shift from negative to positive | | Net Cash Generated From Investing Activities | 3,486 | 1,446,323 | -99.76% | | Net Cash Used In Financing Activities | (448,035) | (136,917) | Expenditure expanded by 227.2% | | Net Decrease in Cash and Cash Equivalents | (132,817) | (363,561) | Decrease narrowed | | Cash and Cash Equivalents at End of Period | 688,052 | 1,363,069 | -49.52% | [Notes to the Interim Condensed Consolidated Financial Information](index=24&type=section&id=Notes%20to%20the%20Interim%20Condensed%20Consolidated%20Financial%20Information) These notes detail the Group's basis of preparation, accounting policies, financial risk management, segment information, and specific items, highlighting going concern uncertainties and mitigation plans [General Information](index=25&type=section&id=General%20Information) Guangzhou R&F Properties Co., Ltd. and its subsidiaries primarily engage in property development, investment, hotel operations, and related services in China, listed on HKEX since 2005 - Guangzhou R&F Properties Co., Ltd. and its subsidiaries primarily engage in property development and sales, property investment, hotel operations, and other related services in China[61](index=61&type=chunk) - The company's shares have been listed on the Main Board of The Stock Exchange of Hong Kong Limited since July 14, 2005[62](index=62&type=chunk) [Basis of Preparation](index=25&type=section&id=Basis%20of%20Preparation) The interim financial information is prepared under HKAS 34, highlighting significant going concern uncertainties due to losses, maturing debt defaults, and litigation, with management's plans to address these - For the six months ended June 30, 2025, the Group recorded a loss attributable to owners of the company of **RMB 4.046 billion**[64](index=64&type=chunk) - As of June 30, 2025, the Group's total borrowings amounted to **RMB 114.12 billion**, of which **RMB 106.711 billion** are due for repayment within the next twelve months, while total cash was only **RMB 3.508 billion**[64](index=64&type=chunk) - The Group has been unable to repay certain bank and other borrowings totaling **RMB 32.745 billion** on time, leading to **RMB 85.479 billion** in borrowings being in default or cross-default, and is involved in multiple litigation cases[64](index=64&type=chunk)[65](index=65&type=chunk) - The Board has formulated various plans and measures to ensure going concern, including offshore debt restructuring, discussions with lenders for extensions/refinancing, disposal of equity in project companies, accelerating property sales and collections, and strict control over administrative costs and capital expenditures[66](index=66&type=chunk)[69](index=69&type=chunk) [Accounting Policies](index=28&type=section&id=Accounting%20Policies) The accounting policies are consistent with 2024, with the mandatory adoption of HKAS 21 and HKFRS 1 amendments on lack of exchangeability, which had no material impact - The accounting policies applied are consistent with those set out in the 2024 financial statements, with the first-time mandatory adoption of amendments to HKAS 21 and HKFRS 1, "Lack of Exchangeability"[70](index=70&type=chunk)[71](index=71&type=chunk) - None of the new or amended standards had a material impact on the Group's reported results or financial position for the current and prior reporting periods[72](index=72&type=chunk) [Judgements and Estimates](index=28&type=section&id=Judgements%20and%20Estimates) Preparation of interim financial information requires management judgments and estimates, which may differ from actual results, with significant uncertainties consistent with the 2024 annual financial statements - The preparation of interim financial information requires management to make judgments, estimates, and assumptions in applying accounting policies and reporting amounts, and actual results may differ from these estimates[73](index=73&type=chunk) - The significant sources of judgment and estimation uncertainty for the current period are the same as those applied in the 2024 annual financial statements[73](index=73&type=chunk) [Financial Risk Management and Financial Instruments](index=28&type=section&id=Financial%20Risk%20Management%20and%20Financial%20Instruments) The Group faces market, credit, and liquidity risks, managed by maintaining sufficient cash flow, controlling investments, and accelerating sales, with the debt-to-asset ratio increasing to 408% - The Group's activities are exposed to market risk (including foreign exchange risk, interest rate risk, and price risk), credit risk, and liquidity risk[74](index=74&type=chunk) - Management strives to maintain sufficient cash and cash equivalents and has a range of alternative solutions to mitigate adverse changes in the economic environment, including controlling land investments, adjusting project timelines, implementing cost controls, accelerating property sales, and seeking cooperation partners[75](index=75&type=chunk) Debt-to-Asset Ratio | Indicator | 2025 Jun 30 | 2024 Dec 31 | | :--- | :--- | :--- | | Debt-to-Asset Ratio | 408% | 348% | [Segment Information](index=32&type=section&id=Segment%20Information) The Group operates in property development, investment, and hotel operations, with property development recording a loss of RMB 3.875 billion in H1 2025, while other segments were profitable - The Group primarily operates in property development, property investment, and hotel operations, with other services including property management[83](index=83&type=chunk) 2025 First Half Segment Performance Overview | Segment | Revenue (RMB thousand) | (Loss)/Profit for the Period (RMB thousand) | | :--- | :--- | :--- | | Property Development | 4,165,258 | (3,875,417) | | Property Investment | 313,173 | 148,392 | | Hotel Operations | 827,299 | 25,915 | | All Other Segments | 459,323 | (381,011) | | **The Group** | **5,765,053** | **(4,082,121)** | Segment Assets and Liabilities as of June 30, 2025 | Segment | Segment Assets (RMB thousand) | Segment Liabilities (RMB thousand) | | :--- | :--- | :--- | | Property Development | 224,959,037 | 121,547,156 | | Property Investment | 29,665,012 | 669,986 | | Hotel Operations | 14,166,533 | 778,833 | | All Other Segments | 6,807,214 | 3,325,680 | | **The Group** | **275,597,796** | **126,321,655** | [Capital Expenditure](index=34&type=section&id=Capital%20Expenditure) In H1 2025, the Group incurred new capital expenditures on property, plant and equipment, investment properties, intangible assets, and right-of-use assets, with no revaluation of investment properties or hotel buildings - In H1 2025, the Group added **RMB 370 thousand** in intangible assets, **RMB 174 thousand** in investment properties, **RMB 21,457 thousand** in property, plant and equipment, and **RMB 9,201 thousand** in hotel buildings[88](index=88&type=chunk) - As of June 30, 2025, management did not revalue investment properties and hotel buildings, as their carrying amounts did not materially differ from their fair values[90](index=90&type=chunk)[91](index=91&type=chunk) [Interests in Joint Ventures](index=35&type=section&id=Interests%20in%20Joint%20Ventures) As of June 30, 2025, the Group's interests in joint ventures amounted to RMB 7.585 billion, with a share of profit of RMB 75.043 million for the period Changes in Interests in Joint Ventures | Indicator | 2025 Jun 30 (RMB thousand) | 2024 Jan 1 (RMB thousand) | | :--- | :--- | :--- | | Interests at Period End | 7,585,095 | 7,828,582 | | Share of Results (H1) | 75,043 | 22,594 | | Elimination of Unrealized (Profits)/Losses (H1) | (38,955) | 126,835 | [Interests in Associates](index=35&type=section&id=Interests%20in%20Associates) As of June 30, 2025, the Group's interests in associates amounted to RMB 3.542 billion, with a share of profit of RMB 25.306 million for the period Changes in Interests in Associates | Indicator | 2025 Jun 30 (RMB thousand) | 2024 Jan 1 (RMB thousand) | | :--- | :--- | :--- | | Interests at Period End | 3,542,149 | 3,623,859 | | Share of Results (H1) | 25,306 | 4,115 | [Other Financial Assets](index=35&type=section&id=Other%20Financial%20Assets) As of June 30, 2025, other financial assets primarily comprised investments in certain Chinese debt securities measured at fair value, totaling approximately RMB 247 million Other Financial Assets Overview | Indicator | 2025 Jun 30 (RMB thousand) | 2024 Dec 31 (RMB thousand) | | :--- | :--- | :--- | | Balance at Period End | 246,969 | 246,981 | | Fair Value Loss Recognized in Profit or Loss (H1) | (12) | (143,766) | - Other financial assets primarily refer to the Group's investments in certain Chinese debt securities, measured at fair value and denominated in RMB[95](index=95&type=chunk)[96](index=96&type=chunk) [Trade and Other Receivables and Prepayments](index=36&type=section&id=Trade%20and%20Other%20Receivables%20and%20Prepayments) As of June 30, 2025, the Group's total trade and other receivables and prepayments increased to RMB 41.144 billion, including RMB 2.248 billion in net trade receivables Trade and Other Receivables and Prepayments | Indicator | 2025 Jun 30 (RMB thousand) | 2024 Dec 31 (RMB thousand) | | :--- | :--- | :--- | | Trade Receivables – Net | 2,247,995 | 2,581,977 | | Other Receivables – Net | 21,111,174 | 18,353,581 | | Prepayments | 3,628,664 | 3,823,579 | | Capitalized Costs to Obtain Contracts | 718,878 | 941,877 | | Amounts Due from Joint Ventures | 3,783,284 | 3,739,791 | | Amounts Due from Associates | 1,865,296 | 1,865,435 | | Amounts Due from Former Subsidiaries | 7,788,300 | 7,636,232 | | **Total** | **41,143,591** | **38,942,472** | Trade Receivables Ageing Analysis (June 30, 2025) | Ageing | Amount (RMB thousand) | | :--- | :--- | | Within 1 Year | 1,306,748 | | 1 to 2 Years | 211,070 | | 2 to 3 Years | 41,949 | | Over 3 Years | 920,379 | | **Total** | **2,480,146** | | Less: Loss Allowance | (232,151) | | **Net Amount** | **2,247,995** | [Restricted Cash](index=37&type=section&id=Restricted%20Cash) As of June 30, 2025, the Group's restricted cash, primarily denominated in RMB, included deposits for pre-sale property construction, borrowings, and other purposes - As of June 30, 2025, the Group's restricted cash was primarily denominated in RMB, including deposits for pre-sale property construction, borrowing guarantees, and other purposes[102](index=102&type=chunk) [Share Capital](index=37&type=section&id=Share%20Capital_Note) As of June 30, 2025, the company's share capital remained at 3,752,367 thousand shares, with a capital amount of RMB 3.752 billion, unchanged from year-end 2024 Share Capital Situation | Indicator | 2025 Jun 30 (thousand shares/RMB thousand) | 2024 Dec 31 (thousand shares/RMB thousand) | | :--- | :--- | :--- | | Number of Shares | 3,752,367 | 3,752,367 | | Share Capital | 3,752,367 | 3,752,367 | [Borrowings](index=38&type=section&id=Borrowings) As of June 30, 2025, total borrowings were RMB 104.524 billion, with RMB 94.902 billion classified as current portion of long-term borrowings, and varying interest rates for different debt instruments Total Borrowings and Composition | Indicator | 2025 Jun 30 (RMB thousand) | 2024 Dec 31 (RMB thousand) | | :--- | :--- | :--- | | Total Long-term Borrowings | 101,832,212 | 102,563,469 | | Less: Current Portion of Long-term Borrowings | (94,902,261) | (93,687,778) | | Total Short-term Borrowings | 2,692,117 | 454,380 | | **Total Borrowings** | **104,524,329** | **103,017,849** | - The effective interest rate for bank borrowings was **5.81%** (2024 H1: 5.60%)[105](index=105&type=chunk) - Domestic bonds had a total carrying amount of **RMB 12.517 billion**, with annualized coupon rates ranging from **6.3% to 7%**[106](index=106&type=chunk) - Senior notes had a total principal amount of **USD 4,527,157 thousand**, with interest rates of **6.5% cash-paid/7.5% PIK**, and were jointly guaranteed by certain subsidiaries and secured by shares[109](index=109&type=chunk) - Other borrowings had effective interest rates ranging from **4.88% to 14.8%**[113](index=113&type=chunk) - As of June 30, 2025, bank and other borrowings totaling **RMB 57.918 billion** were secured by right-of-use assets, property, plant and equipment, investment properties, properties under development, completed properties held for sale, restricted cash, and interests in certain subsidiaries[114](index=114&type=chunk) [Accruals and Other Payables](index=42&type=section&id=Accruals%20and%20Other%20Payables) As of June 30, 2025, total accruals and other payables amounted to RMB 103.835 billion, with current portion of RMB 103.356 billion, and construction payables being the largest component Accruals and Other Payables | Indicator | 2025 Jun 30 (RMB thousand) | 2024 Dec 31 (RMB thousand) | | :--- | :--- | :--- | | Amounts Payable to Joint Ventures | 8,779,450 | 8,856,003 | | Construction Payables | 38,179,494 | 40,301,870 | | Other Payables and Accruals | 47,506,830 | 43,976,032 | | **Total** | **103,834,816** | **102,148,422** | | Current Portion | 103,355,905 | 101,044,115 | - Certain payables are secured by shares in certain wholly-owned subsidiaries of the Group, the right to receive economic benefits from a property development project, and guarantees provided by the company[115](index=115&type=chunk) [Other Income](index=43&type=section&id=Other%20Income) In H1 2025, the Group's other income significantly increased to RMB 349 million, primarily driven by a rise in other operating income Other Income Composition | Indicator | 2025 H1 (RMB thousand) | 2024 H1 (RMB thousand) | | :--- | :--- | :--- | | Interest Income | 9,793 | 32,317 | | Forfeited Customer Deposits | 5,105 | 5,941 | | Other Operating Income | 333,529 | 131,997 | | Others | 1,047 | 1,105 | | **Total** | **349,474** | **171,360** | [Other (Losses)/Gains – Net](index=43&type=section&id=Other%20%28Losses%29%2FGains%20%E2%80%93%20Net) In H1 2025, the Group recorded net other losses of RMB 230 million, a significant shift from the prior year's net gains, due to the absence of disposal gains Other (Losses)/Gains – Net Composition | Indicator | 2025 H1 (RMB thousand) | 2024 H1 (RMB thousand) | | :--- | :--- | :--- | | Gain on Disposal of Subsidiaries | – | 1,093,387 | | Gain on Disposal of an Associate | – | 56,000 | | Gain on Disposal of a Joint Venture | – | 254,991 | | Gain/(Loss) on Disposal of Property, Plant and Equipment | 4,775 | (2,929) | | Fair Value Loss on Other Financial Assets | (12) | – | | Others | (235,148) | 141,748 | | **Total** | **(230,385)** | **1,543,197** | [Finance Costs – Net](index=43&type=section&id=Finance%20Costs%20%E2%80%93%20Net_Note) In H1 2025, net finance costs decreased by 13% to RMB 2.394 billion, with total interest expenses of RMB 4.249 billion, predominantly from bank borrowings Net Finance Costs Composition | Indicator | 2025 H1 (RMB thousand) | 2024 H1 (RMB thousand) | | :--- | :--- | :--- | | Total Interest Expenses | 4,249,471 | 4,612,651 | | Of which: Bank Borrowings | 1,755,463 | 1,715,220 | | Domestic Bonds | 522,837 | 569,613 | | Senior Notes | 1,126,382 | 1,118,785 | | Other Borrowings | 843,097 | 1,199,885 | | Less: Capitalized Finance Costs | (1,680,966) | (2,198,136) | | **Net Amount** | **2,393,758** | **2,751,643** | [Income Tax Expense](index=44&type=section&id=Income%20Tax%20Expense_Note) In H1 2025, income tax expense surged to RMB 1.216 billion, mainly due to a substantial increase in China's land appreciation tax, with corporate income tax rates varying by region Income Tax Expense Composition | Indicator | 2025 H1 (RMB thousand) | 2024 H1 (RMB thousand) | | :--- | :--- | :--- | | Current Income Tax | | | | – Hong Kong Profits Tax | – | 28 | | – Corporate Income Tax | (367,008) | 249,766 | | – China Land Appreciation Tax | 1,140,287 | 356,063 | | Deferred Income Tax | 442,812 | (140,713) | | **Total** | **1,216,091** | **465,144** | - Corporate income tax rates in China, Cambodia, and Malaysia are **25%, 20%, and 24%**, respectively[122](index=122&type=chunk) - China Land Appreciation Tax is levied on the appreciation of land value (proceeds from property sales less deductible expenses) at progressive rates ranging from **30% to 60%**[123](index=123&type=chunk) [Dividends](index=44&type=section&id=Dividends_Note) The Board resolved not to declare an interim dividend for the six months ended June 30, 2025, consistent with the prior year - The Board resolved not to declare an interim dividend for the six months ended June 30, 2025 (2024 H1: nil)[124](index=124&type=chunk) [Financial Guarantee Contracts](index=45&type=section&id=Financial%20Guarantee%20Contracts) As of June 30, 2025, the Group's total financial guarantees for property buyers' mortgage loans and joint venture borrowings amounted to RMB 59.822 billion, a 4.66% decrease from year-end 2024 Financial Guarantee Contracts | Indicator | 2025 Jun 30 (RMB thousand) | 2024 Dec 31 (RMB thousand) | | :--- | :--- | :--- | | Guarantees for Mortgage Loans Granted to Group's Property Buyers | 49,048,428 | 51,985,832 | | Guarantees for Joint Venture Borrowings | 10,773,561 | 10,743,344 | | Guarantees for an Associate's Borrowings | – | 15,900 | | **Total** | **59,821,989** | **62,745,076** | - Mortgage loan guarantees provided to property buyers terminate upon issuance of property ownership certificates or full repayment of mortgage loans by buyers; directors believe the fair value of such guarantee contracts is minimal, requiring no provision[125](index=125&type=chunk) [Commitments](index=46&type=section&id=Commitments) As of June 30, 2025, the Group's contracted but unprovided commitments for property development activities, including land premiums, decreased to RMB 10.406 billion Capital and Property Development Activity Commitments | Indicator | 2025 Jun 30 (RMB thousand) | 2024 Dec 31 (RMB thousand) | | :--- | :--- | :--- | | Contracted but Unprovided – Property Development Activities (including land premiums) | 10,405,817 | 12,033,074 | [Significant Related Party Transactions](index=46&type=section&id=Significant%20Related%20Party%20Transactions) The Group engaged in various related party transactions, including remuneration for key management, construction services to joint ventures, loan guarantees, and interest expenses to major shareholders - Major shareholders Dr. Li Sze Lim and Mr. Zhang Li held **26.31% and 22.44%** of the company's shares, respectively, as of June 30, 2025[127](index=127&type=chunk) Key Management Personnel Remuneration | Indicator | 2025 H1 (RMB thousand) | 2024 H1 (RMB thousand) | | :--- | :--- | :--- | | Salaries and Benefits | 7,761 | 9,647 | Provision of Construction and Other Services | Object | 2025 H1 (RMB thousand) | 2024 H1 (RMB thousand) | | :--- | :--- | :--- | | Joint Ventures | 133,760 | 349,403 | | Associates | – | 657 | | **Total** | **133,760** | **350,060** | Provision of Loan Guarantees (June 30, 2025) | Object | Bank Borrowings (RMB thousand) | Other Borrowings (RMB thousand) | | :--- | :--- | :--- | | Joint Ventures | 8,846,674 | 1,274,029 | | Associates | – | – | | **Total** | **8,846,674** | **1,274,029** | Interest Expenses on Borrowings from Related Parties | Object | 2025 H1 (RMB thousand) | 2024 H1 (RMB thousand) | | :--- | :--- | :--- | | Major Shareholders | 59,551 | 41,633 | | **Total** | **59,551** | **58,516** | [Litigation](index=48&type=section&id=Litigation) The Group faces multiple significant lawsuits, including three loan contract disputes with Bank of China totaling approximately RMB 5.467 billion, and other disputes, all ongoing - The Group faces multiple significant lawsuits, including three loan contract disputes from Bank of China with claims of approximately **RMB 1.899 billion, RMB 1.816 billion, and RMB 1.752 billion**, respectively[134](index=134&type=chunk) - Other ongoing lawsuits include a land development project contract dispute with Guoxing Global and a loan contract dispute from an asset management company with a claim of approximately **RMB 549 million**[134](index=134&type=chunk) Supplementary Information [Reconciliation of Consolidated Financial Statements](index=49&type=section&id=Reconciliation%20of%20Consolidated%20Financial%20Statements) This reconciliation highlights differences between financial statements prepared under China Accounting Standards and Hong Kong Financial Reporting Standards, primarily due to revaluation gains, deferred taxes, and subsequent measurement of hotel buildings Reconciliation of Consolidated Financial Statements | Indicator | Loss for the Period Ended June 30 (RMB) | Total Equity as of (RMB) | | :--- | :--- | :--- | | | 2025 | 2024 | 2025 Jun 30 | 2024 Dec 31 | | As presented under China Accounting Standards | (4,024,200) | (2,224,832) | 22,527,683 | 26,163,053 | | Impact of adjustments under Hong Kong Financial Reporting Standards: | | | | | | 1. Amortization of revaluation gains on business combinations | (15) | (128) | 34,272 | 34,287 | | 2. Deferred tax | 4 | 32 | (8,569) | (8,573) | | 3. Revaluation gains on investment properties transferred from properties under development | (7,530) | (15,342) | 3,267 | 3,267 | | 4. Subsequent measurement of hotel buildings under revaluation model | (50,380) | (90,431) | 2,214,301 | 2,264,681 | | **As presented under Hong Kong Financial Reporting Standards** | **(4,082,121)** | **(2,330,701)** | **24,770,954** | **28,456,715** | - Differences primarily involve amortization of revaluation gains on business combinations, deferred tax, revaluation gains on investment properties transferred from properties under development, and subsequent measurement of hotel buildings under the revaluation model[135](index=135&type=chunk)

[Company Overview and Financial Summary](index=1&type=section&id=公司概覽與財務摘要) [Company Information and GEM Characteristics](index=1&type=section&id=公司信息与GEM特色) Zijing International Financial Holdings Limited (8340) is a Cayman Islands-registered GEM-listed company for SMEs, facing high investment risk - Company Name: Zijing International Financial Holdings Limited[1](index=1&type=chunk) - Stock Code: **8340**[1](index=1&type=chunk) - Place of Incorporation: Cayman Islands[1](index=1&type=chunk) - Listing Venue: GEM of The Stock Exchange of Hong Kong, a market for small and medium-sized companies with higher investment risk, greater market volatility, and no guarantee of high liquidity[2](index=2&type=chunk) [Financial Performance Summary](index=2&type=section&id=财务业绩摘要) For H1 2025, the Group's revenue grew to HK$40.87 million, achieving HK$5.82 million profit, reversing last year's loss Key Financial Summary for the six months ended June 30 | Metric | 2025 H1 (HK$'000) | 2024 H1 (HK$'000) | | :--- | :--- | :--- | | Revenue | 40,870 | 20,791 | | Profit/(Loss) attributable to owners of the Company | 5,815 | (2,749) | | Dividends | Not proposed | Nil | [Condensed Consolidated Financial Statements](index=3&type=section&id=中期業績（未經審核）) [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=3&type=section&id=簡明綜合損益及其他全面收益表) For H1 2025, revenue grew 96.58% to HK$40.87 million, operating profit turned to HK$6.696 million, with basic EPS of 10.5 HK cents Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (For the six months ended June 30) | Metric | 2025 (HK$'000) | 2024 (HK$'000) | | :--- | :--- | :--- | | Revenue | 40,870 | 20,791 | | Cost of revenue | (25,545) | (13,081) | | Operating expenses | (8,629) | (9,472) | | Operating profit/(loss) | 6,696 | (1,762) | | Financial costs | (281) | (987) | | Profit/(loss) before tax | 6,415 | (2,749) | | Income tax expense | (600) | — | | Profit/(loss) for the period and attributable to owners of the Company | 5,815 | (2,749) | | Earnings/(loss) per share (HK cents) | 10.5 | (30.7) | [Condensed Consolidated Statement of Financial Position](index=4&type=section&id=簡明綜合財務狀況表) As at June 30, 2025, net assets increased to HK$83.692 million, net current assets rose to HK$64.568 million, driven by receivables and cash Condensed Consolidated Statement of Financial Position (As at June 30) | Metric | June 30, 2025 (HK$'000) | December 31, 2024 (HK$'000) | | :--- | :--- | :--- | | Non-current assets | 20,016 | 49,234 | | Current assets | 70,581 | 43,467 | | Current liabilities | 6,013 | 16,763 | | Net current assets | 64,568 | 26,704 | | Non-current liabilities | 892 | 1,193 | | Net assets | 83,692 | 74,745 | | Share capital | 666 | 53,760 | | Reserves | 83,026 | 20,985 | | Total equity | 83,692 | 74,745 | [Condensed Consolidated Statement of Changes in Equity](index=5&type=section&id=簡明綜合權益變動表) For H1 2025, total equity attributable to owners increased to HK$83.692 million, due to profit, share issuance, and share capital reorganisation adjustments Condensed Consolidated Statement of Changes in Equity (For the six months ended June 30) | Metric | June 30, 2025 (HK$'000) | January 1, 2024 (HK$'000) | | :--- | :--- | :--- | | Total equity at beginning of period | 74,745 | 24,579 | | Profit/(Loss) for the period | 5,815 | (2,749) | | Exchange differences on translation of foreign operations | 147 | (208) | | Issue of ordinary shares | 3,901 | — | | Share issue expenses | (916) | — | | Impact of share capital reorganisation | — | — | | Total equity at end of period | 83,692 | 21,622 | [Condensed Consolidated Statement of Cash Flows](index=6&type=section&id=簡明綜合現金流量表) For H1 2025, cash and cash equivalents increased by HK$5.861 million to HK$19.103 million, driven by investing activities Condensed Consolidated Statement of Cash Flows (For the six months ended June 30) | Metric | 2025 (HK$'000) | 2024 (HK$'000) | | :--- | :--- | :--- | | Net cash used in operating activities | (10,644) | (14,838) | | Net cash generated from/(used in) investing activities | 25,117 | (9,021) | | Net cash used in/(generated from) financing activities | (8,612) | 23,463 | | Net increase/(decrease) in cash and cash equivalents | 5,861 | (396) | | Cash and cash equivalents at end of period | 19,103 | 11,268 | [Notes to the Financial Statements](index=7&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Interim%20Financial%20Statements) [Basis of Preparation](index=7&type=section&id=1.%20編製基準) The unaudited interim financial statements comply with HKFRS, HK GAAP, and GEM Listing Rules, prepared on a historical cost basis in HKD - Basis of Preparation: Hong Kong Financial Reporting Standards, Hong Kong Generally Accepted Accounting Principles, Hong Kong Companies Ordinance disclosure requirements, GEM Listing Rules[9](index=9&type=chunk) - Presentation Currency: Hong Kong Dollars (rounded to the nearest thousand)[10](index=10&type=chunk) - Measurement Basis: Historical cost[11](index=11&type=chunk) - Unaudited by auditors, but reviewed by the Company's audit committee[12](index=12&type=chunk) [Revenue](index=7&type=section&id=2.%20收入) The Group's revenue primarily derives from Hong Kong financial services (corporate finance advisory, securities advisory, asset management), car rental, and online gaming businesses - Primary Revenue Sources: Financial services, car rental business, online gaming business[13](index=13&type=chunk) - Revenue Composition: Corporate finance advisory services, securities advisory and asset management services, car rental business, online gaming business[13](index=13&type=chunk) [Segment Information](index=8&type=section&id=3.%20分部資料) The Group operates four segments: corporate finance advisory, securities advisory and asset management, car rental, and online gaming. Online gaming and car rental showed significant revenue and profit growth in H1 2025 Segment Revenue and Profit/(Loss) (For the six months ended June 30) | Segment | 2025 Revenue (HK$'000) | 2024 Revenue (HK$'000) | 2025 Profit/(Loss) (HK$'000) | 2024 Profit/(Loss) (HK$'000) | | :--- | :--- | :--- | :--- | :--- | | Corporate Finance Advisory Services | 2,953 | 4,092 | 1,117 | 925 | | Securities Advisory and Asset Management Services | — | 240 | (522) | (77) | | Car Rental Business | 5,357 | 1,917 | 1,894 | (411) | | Online Gaming Business | 32,560 | 14,542 | 7,026 | 560 | | **Total** | **40,870** | **20,791** | **9,515** | **997** | - All segment revenue is derived from external customers[15](index=15&type=chunk) - Segment loss excludes unallocated expenses such as central administrative costs and directors' emoluments[16](index=16&type=chunk) [Income Tax](index=9&type=section&id=4.%20所得稅) Hong Kong profits tax is 16.5% (8.25% for first HK$2 million), Singapore 17%, China 25%. HK profits tax provision was HK$0.6 million, no provision for Singapore/China subsidiaries - Hong Kong Profits Tax Rate: **16.5%** (**8.25%** for the first **HK$2 million** for certain companies)[18](index=18&type=chunk) - Singapore Corporate Income Tax Rate: **17%**[18](index=18&type=chunk) - China Corporate Income Tax Rate: **25%**[18](index=18&type=chunk) - Cayman Islands and British Virgin Islands are exempt from any income tax[19](index=19&type=chunk) Current Tax (For the six months ended June 30) | Tax | 2025 (HK$'000) | 2024 (HK$'000) | | :--- | :--- | :--- | | Hong Kong profits tax |

[Company Information and Performance Highlights](index=1&type=section&id=Company%20Information%20and%20Performance%20Highlights) The company's revenue decreased by **11.0%** to **RMB 7.463 billion**, resulting in a **RMB 142 million loss**, primarily due to centralized procurement price cuts and goodwill impairment Performance Highlights for H1 2025 | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Total Revenue | 7,463,383 | 8,385,473 | (11.0)% | | Gross Profit | 3,634,593 | 4,061,254 | (10.5)% | | (Loss)/Profit for the Period | (141,760) | 214,143 | (166.2)% | | (Loss)/Profit Attributable to Owners of the Company | (107,918) | 210,979 | (151.2)% | | Basic and Diluted (Loss)/Earnings Per Share (RMB cents) | (2.14) | 4.19 | (151.1)% | [Interim Condensed Consolidated Financial Statements](index=2&type=section&id=Interim%20Condensed%20Consolidated%20Financial%20Statements) This section presents the company's interim financial performance and position, detailing the shift from profit to loss and changes in assets and liabilities [Interim Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=2&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) This statement details the six-month profit or loss, indicating a shift from profit to loss, driven by revenue decline, goodwill impairment, and higher credit losses Interim Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (Summary) | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Revenue | 7,463,383 | 8,385,473 | | Gross Profit | 3,634,593 | 4,061,254 | | Operating (Loss)/Profit | (35,689) | 384,582 | | (Loss)/Profit Before Tax | (82,939) | 299,434 | | (Loss)/Profit for the Period | (141,760) | 214,143 | | (Loss)/Profit Attributable to Owners of the Company | (107,918) | 210,979 | [Interim Condensed Consolidated Statement of Financial Position](index=4&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, total assets slightly decreased, with a significant rise in current liabilities, impacting net current assets and the current ratio, while net assets remained stable Interim Condensed Consolidated Statement of Financial Position (Summary) | Indicator | June 30, 2025 (RMB thousands) | Dec 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Total Non-current Assets | 15,556,213 | 16,224,215 | | Total Current Assets | 18,970,577 | 18,839,503 | | Total Current Liabilities | 9,449,353 | 7,800,198 | | Net Current Assets | 9,521,224 | 11,039,305 | | Net Assets | 23,392,280 | 23,933,034 | | Total Equity | 23,392,280 | 23,933,034 | [Notes to the Interim Condensed Consolidated Financial Information](index=6&type=section&id=Notes%20to%20the%20Interim%20Condensed%20Consolidated%20Financial%20Information) This section provides detailed notes on the basis of preparation, accounting policy changes, operating segments, revenue, and other key financial items [Basis of Preparation and Changes in Accounting Policies](index=6&type=section&id=Basis%20of%20Preparation%20and%20Changes%20in%20Accounting%20Policies) Financial information is prepared under HKAS 34 and should be read with annual statements, with no significant impact from new HKFRS amendments - Financial information is prepared in accordance with HKAS 34 Interim Financial Reporting and should be read in conjunction with the Group's annual consolidated financial statements for the year ended December 31, 2024[8](index=8&type=chunk) - The application of amended HKFRS accounting standards during the reporting period had no significant impact on the Group's financial performance and position or the disclosures in these interim condensed consolidated financial statements for the current and prior periods[9](index=9&type=chunk) [Operating Segment Information](index=7&type=section&id=Operating%20Segment%20Information) The company operates four reportable segments, with Tianjiang recognizing goodwill impairment due to underperformance in Chinese herbal formula granules - The Group's operating and reportable segments are identified based on internal management reports and regularly reviewed by the executive directors (who are also the Group's chief operating decision-makers) to allocate resources and assess performance, categorized into four reportable operating segments: Yifang, Tianjiang, Tongjitang, and Global[10](index=10&type=chunk) - The Tianjiang segment recognized an impairment loss on goodwill of approximately **RMB 242.461 million** for the cash-generating unit allocated to Jiangyin Tianjiang for the six months ended June 30, 2025, due to the underperformance of its Chinese herbal formula granule business[12](index=12&type=chunk)[32](index=32&type=chunk) Revenue and Performance by Segment for H1 2025 | Segment | Revenue from External Customers (RMB thousands) | Segment Performance (RMB thousands) | | :--- | :--- | :--- | | Yifang | 2,450,040 | (38,194) | | Tianjiang | 1,598,484 | (325,352) | | Tongjitang | 1,081,458 | 116,043 | | Global | 2,333,401 | 112,128 | | Total | 7,463,383 | (135,375) | [Revenue](index=12&type=section&id=Revenue) Total revenue for the period was **RMB 7.463 billion**, a **11.0%** year-on-year decrease, mainly due to declines in Chinese herbal formula granules and proprietary Chinese medicines, with mainland China contributing most revenue Revenue by Product or Service Category for H1 2025 | Product or Service Category | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Chinese Herbal Formula Granules | 2,990,750 | 3,479,735 | (14.1)% | | Proprietary Chinese Medicines | 2,308,809 | 2,418,349 | (4.5)% | | Chinese Herbal Decoction Pieces | 1,596,128 | 1,576,914 | 1.2% | | Production and Operation of Chinese Herbal Medicines | 445,584 | 754,277 | (40.9)% | | Traditional Chinese Medicine (TCM) Big Health | 122,112 | 156,198 | (21.8)% | | Total | 7,463,383 | 8,385,473 | (11.0)% | - The mainland China market contributed **RMB 7,407,775 thousand** in revenue, accounting for the vast majority of total revenue[18](index=18&type=chunk) [Other Income and Gains/Losses](index=13&type=section&id=Other%20Income%20and%20Gains%2FLosses) Other income increased by **14.4%** mainly from government subsidies, while other losses expanded significantly to **RMB 262.394 million**, primarily due to **RMB 242.461 million** goodwill impairment Other Income | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Government Subsidies | 68,350 | 59,766 | | Bank Deposit Interest Income | 17,900 | 16,320 | | Rental Income | 4,802 | 3,511 | | Total Other Income | 91,052 | 79,597 | Other Gains and Losses | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Impairment Loss Recognized on Goodwill | (242,461) | – | | Late Payment Penalties | (17,523) | (52,708) | | Donations | (1,510) | (13,114) | | Total | (262,394) | (64,768) | [Finance Costs and Profit/Loss Before Tax](index=14&type=section&id=Finance%20Costs%20and%20Profit%2FLoss%20Before%20Tax) Finance costs decreased by **44.0%** to **RMB 47.203 million** due to reduced interest-bearing debt, resulting in a pre-tax loss of **RMB 82.939 million**, impacted by goodwill impairment and increased credit losses Finance Costs | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Interest on Bank Borrowings | 24,153 | 50,843 | | Effective Interest Expense on Unsecured Notes | 18,689 | 24,213 | | Total Borrowing Costs | 47,203 | 84,274 | - The Group's loss before tax was **RMB 82,939 thousand**, compared to a profit of **RMB 299,434 thousand** in the prior period, primarily due to goodwill impairment, inventory write-downs, and increased impairment losses on trade receivables[4](index=4&type=chunk)[23](index=23&type=chunk) [Income Tax Expense](index=15&type=section&id=Income%20Tax%20Expense) Income tax expense decreased by **31.0%** to **RMB 58.821 million**, mainly due to reduced China corporate income tax and deferred tax adjustments, despite significant under-provision from prior periods Income Tax Expense | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | China Corporate Income Tax | 75,776 | 114,262 | | Under-provision in Prior Periods | 37,367 | 78,004 | | Deferred | (54,322) | (106,975) | | Total Tax Expense for the Period | 58,821 | 85,291 | - Certain subsidiaries of the Group are qualified enterprises located in western China or recognized as high-tech enterprises, thus enjoying a preferential corporate income tax rate of **15%**; certain subsidiaries engaged in primary processing of medicinal plants are fully exempt from corporate income tax[24](index=24&type=chunk) [Dividends and Earnings/Loss Per Share](index=15&type=section&id=Dividends%20and%20Earnings%2FLoss%20Per%20Share) The Board did not recommend an interim dividend, and basic earnings per share shifted from a **RMB 4.19 cents** profit to a **RMB 2.14 cents** loss, driven by a significant decline in profit attributable to owners - No dividend was proposed for the six months ended June 30, 2025 (six months ended June 30, 2024: nil)[26](index=26&type=chunk) Basic and Diluted (Loss)/Earnings Per Share | Indicator | 2025 (RMB cents) | 2024 (RMB cents) | | :--- | :--- | :--- | | Basic and Diluted (Loss)/Earnings Per Share | (2.14) | 4.19 | [Goodwill and Other Intangible Assets](index=16&type=section&id=Goodwill%20and%20Other%20Intangible%20Assets) A goodwill impairment loss of **RMB 242.461 million** was recognized due to the underperformance of Jiangyin Tianjiang's Chinese herbal formula granule business, with no additional impairment for other units - For the six months ended June 30, 2025, the Group's management recognized an impairment loss on goodwill of approximately **RMB 242,461,000** (2024: nil) for the cash-generating unit allocated to Jiangyin Tianjiang, primarily due to the underperformance of its Chinese herbal formula granule business[32](index=32&type=chunk) Key Assumptions for Jiangyin Tianjiang Cash-Generating Unit | Indicator | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Average Growth Rate over Five Years | 2.65% | 8.32% | | Growth Rate after Five Years | 2.30% | 2.30% | | Pre-tax Discount Rate | 9.75% | 10.09% | [Inventories](index=18&type=section&id=Inventories) As of June 30, 2025, total inventories were **RMB 4.668 billion**, slightly lower than year-end 2024, with inventory write-downs increasing to **RMB 203.820 million** Inventory Composition | Item | June 30, 2025 (RMB thousands) | Dec 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Raw Materials | 1,141,819 | 1,104,406 | | Work in Progress | 1,326,894 | 1,630,106 | | Finished Goods | 2,198,899 | 2,048,587 | | Total | 4,667,612 | 4,783,099 | - As of June 30, 2025, inventory write-downs amounted to approximately **RMB 203,820,000** (December 31, 2024: **RMB 192,485,000**)[35](index=35&type=chunk) [Trade and Other Receivables](index=18&type=section&id=Trade%20and%20Other%20Receivables) As of June 30, 2025, total trade and other receivables increased to **RMB 9.022 billion**, with a significant rise in credit loss provisions for trade receivables and an increase in receivables over one year old Trade and Other Receivables | Item | June 30, 2025 (RMB thousands) | Dec 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Trade Receivables (net of allowance) | 8,569,620 | 8,168,990 | | Deposits and Prepayments | 96,517 | 68,780 | | Prepaid Tax Payments | 147,380 | 160,681 | | Other Receivables (net of allowance) | 236,280 | 199,164 | | Total | 9,021,812 | 8,566,512 | Ageing Analysis of Trade Receivables (Based on Invoice Date) | Ageing | June 30, 2025 (RMB thousands) | Dec 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | 0 to 90 Days | 3,927,935 | 4,377,309 | | 91 to 180 Days | 2,129,363 | 1,738,053 | | 181 to 365 Days | 2,045,640 | 1,813,051 | | Over 365 Days | 879,529 | 463,793 | | Total | 8,982,467 | 8,392,206 | [Impairment Assessment of Financial Assets](index=19&type=section&id=Impairment%20Assessment%20of%20Financial%20Assets) Credit impairment losses of **RMB 185.875 million** were recognized this period, a **RMB 27.107 million** increase year-on-year, primarily due to a rise in trade receivables over one year old Impairment Losses Recognized/(Reversed) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (RMB thousands) | | :--- | :--- | :--- | :--- | | Trade Receivables | 189,717 | 156,817 | 32,900 | | Other Receivables | (3,118) | 1,934 | (5,052) | | Debt Instruments at Fair Value Through Other Comprehensive Income | (724) | 17 | (741) | | Total | 185,875 | 158,768 | 27,107 | - As of June 30, 2025, the Group's trade receivables over one year old increased by approximately **RMB 176,965,000** year-on-year, leading to an increase in credit impairment losses recognized this period[88](index=88&type=chunk) [Trade and Other Payables](index=20&type=section&id=Trade%20and%20Other%20Payables) As of June 30, 2025, total trade and other payables increased to **RMB 5.961 billion**, with significant increases in trade payables and dividends payable Trade and Other Payables | Item | June 30, 2025 (RMB thousands) | Dec 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Trade Payables | 1,833,522 | 1,432,901 | | Bills Payable | 715,561 | 803,992 | | Deposits | 1,005,012 | 1,015,315 | | Accrued Salaries and Benefits | 283,840 | 528,859 | | Other Taxes Payable | 137,056 | 185,091 | | Accrued Operating Expenses | 909,856 | 908,072 | | Dividends Payable | 405,590 | 29,345 | | Total | 5,960,639 | 5,437,645 | Ageing Analysis of Trade and Bills Payables (Based on Invoice Date) | Ageing | June 30, 2025 (RMB thousands) | Dec 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | 0 to 90 Days | 2,224,591 | 1,479,694 | | 91 to 180 Days | 247,921 | 527,182 | | 181 to 365 Days | 63,451 | 160,895 | | Over 365 Days | 13,120 | 69,122 | | Total | 2,549,083 | 2,236,893 | [Business Overview and Review](index=21&type=section&id=Business%20Overview%20and%20Review) This section provides an overview of the company's overall performance and outlines its five major business development strategies across various TCM segments [Overall Performance Overview](index=21&type=section&id=Overall%20Performance%20Overview) The company's revenue decreased by **11.0%** due to centralized procurement and market competition, while gross profit margin slightly increased by **0.3** percentage points to **48.7%** from sales structure optimization - During the reporting period, the Group's revenue was approximately **RMB 7,463,383,000**, a **11.0%** decrease compared to the prior period, primarily due to a significant increase in the proportion of centralized procurement business for Chinese herbal formula granules and intensified market competition[40](index=40&type=chunk) - Gross profit was approximately **RMB 3,634,593,000**, a **10.5%** decrease from the prior period, with a gross profit margin of **48.7%**, an increase of **0.3** percentage points from **48.4%** in the prior period, mainly due to optimized sales structure and improved gross profit margin in the Chinese herbal decoction pieces segment[41](index=41&type=chunk) [Five Major Business Development Strategies](index=21&type=section&id=Five%20Major%20Business%20Development%20Strategies) The Group pursues high-quality development across five key TCM business segments, leveraging resource integration, reform, efficiency enhancement, and collaborative innovation - The Group is based on five major business segments: production and operation of Chinese herbal medicines, Chinese herbal decoction pieces, Chinese herbal formula granules, proprietary Chinese medicines, and Traditional Chinese Medicine (TCM) big health, with a stable industrial layout as the foundation, resource integration and reform transformation as means, and quality improvement, efficiency enhancement, and collaborative innovation as drivers, continuously optimizing development quality and operational efficiency[42](index=42&type=chunk) [Production and Operation of Chinese Herbal Medicines](index=22&type=section&id=Production%20and%20Operation%20of%20Chinese%20Herbal%20Medicines) Facing volatile prices, the Group strategically exited high-risk, low-margin businesses, initiated an inventory management system, and expanded GAP base construction to strengthen full-chain quality traceability - The Group strategically exited high-risk, low-margin businesses and implemented refined cost control plans to address market challenges and enhance development resilience[43](index=43&type=chunk) - The Group initiated the construction of a Chinese herbal medicine inventory management system at the beginning of 2025, which will gradually achieve visualized presentation and standardized management of inventory data[43](index=43&type=chunk) - As of June 30, 2025, the Group participated in the co-construction of **162** Chinese herbal medicine production bases across **22** provinces (regions, municipalities) nationwide, involving **109** Chinese herbal medicine varieties, with a total base area exceeding **459,000 mu**[44](index=44&type=chunk) [Chinese Herbal Decoction Pieces](index=23&type=section&id=Chinese%20Herbal%20Decoction%20Pieces) The Group expanded into medical terminal markets, increasing medical decoction piece sales by **10.3%**, and successfully participated in national centralized procurement, facing short-term price pressure but enhancing brand recognition - The Group continued to deeply cultivate the medical terminal market, developing over **400** new medical terminal clients, with medical decoction piece sales revenue increasing by **10.3%** year-on-year[45](index=45&type=chunk) - A total of **3.83 million** prescriptions were processed for decoction and dispensing, producing **28.48 million** doses, an increase of approximately **15%** year-on-year[45](index=45&type=chunk) - A total of **13** subsidiaries, **45** varieties, and **84** specifications of the Group successfully won bids in the national centralized procurement of Chinese herbal decoction pieces, which will bring certain downward pressure on the operating performance of the Chinese herbal decoction pieces business in the short term but is conducive to enhancing brand benefits[46](index=46&type=chunk) [Chinese Herbal Formula Granules](index=24&type=section&id=Chinese%20Herbal%20Formula%20Granules) Revenue and profitability for Chinese herbal formula granules declined due to centralized procurement price cuts, rising costs, and market competition, leading the Group to enhance academic research, clinical promotion, and smart manufacturing - During the reporting period, the Group's revenue and profitability for Chinese herbal formula granules experienced a phased decline due to factors such as centralized procurement price reductions, rising costs, and intensified market competition[47](index=47&type=chunk) - In terms of marketing expansion, the Group continued to strengthen academic research and clinical application of Chinese herbal formula granules, building an evidence chain system to enhance physician awareness and acceptance[47](index=47&type=chunk) - In terms of cost control, the Group optimized production processes and extraction procedures, deepened smart manufacturing and digital applications, improved production efficiency, and enhanced responsiveness to centralized procurement orders[48](index=48&type=chunk) [Proprietary Chinese Medicines](index=25&type=section&id=Proprietary%20Chinese%20Medicines) Prescription drug business expanded with over **1,750** new medical institutions and key products exceeding **RMB 100 million** in sales, while OTC business adapted to policy changes by actively developing online channels - In the prescription drug business, over **1,750** new secondary and above medical institutions were developed, with Xianling Gubao and Jingshu Granules continuously enhancing their market position in the orthopedics field[49](index=49&type=chunk) - Key products such as Xianling Gubao and Jinye Baidu Granules achieved sales exceeding **RMB 100 million**, realizing positive year-on-year growth[49](index=49&type=chunk) - In the OTC business, affected by factors such as outpatient统筹, medical insurance policy adjustments, and diversion to online channels, the Group actively developed online business and continuously improved its national chain client network[49](index=49&type=chunk) [Traditional Chinese Medicine (TCM) Big Health](index=26&type=section&id=Traditional%20Chinese%20Medicine%20%28TCM%29%20Big%20Health) The Group re-planned its TCM big health product system, focusing on specialty and medicinal food products, expanded marketing channels, and introduced new rehabilitation projects for its TCM clinics, which served approximately **74,000 patient visits** - In the TCM big health product segment, the existing product system was re-planned, focusing on specialty products, premium decoction pieces, and medicinal food products, while simultaneously promoting the expansion and integration of marketing channel resources[51](index=51&type=chunk) - In the TCM clinic segment, approximately **74,000 patient visits** were received during the reporting period; new rehabilitation projects such as "posture correction" were introduced, continuously promoting the iteration and upgrade of business categories[51](index=51&type=chunk) [Technological Innovation and Research & Development](index=26&type=section&id=Technological%20Innovation%20and%20Research%20%26%20Development) The Group strengthened R&D platforms, added a provincial engineering technology research center, received multiple awards, made significant progress in TCM standards, and had its Class 1.1 innovative TCM, Yushuda Tablets, accepted for market application - During the reporting period, the Group continued to develop high-level scientific research platforms, adding the Guangdong Provincial Engineering Technology Research Center for Chinese Herbal Decoction Pieces (Fengliaoxing), and as of June 30, 2025, the Group possessed **52** provincial-level and above government-recognized laboratories and technology platforms[52](index=52&type=chunk) - The project "Evidence-based Evaluation and Mechanism of Qingda Granules for Prevention and Treatment of Hypertension," in which Jiangyin Tianjiang Pharmaceutical Co., Ltd. participated, won the Second Prize of the China Academy of Chinese Medical Sciences Science and Technology Award[53](index=53&type=chunk) - The National Pharmacopoeia Commission newly released **26** national drug standards for Chinese herbal formula granules, of which the Group completed research on **18**, accounting for approximately **69%**[53](index=53&type=chunk) - During the reporting period, the Group's Class 1.1 innovative Chinese medicine, Yushuda Tablets, was accepted for market application by the National Medical Products Administration[54](index=54&type=chunk) [Modern Governance and Sustainable Development](index=28&type=section&id=Modern%20Governance%20and%20Sustainable%20Development) This section details the company's governance structure, risk management, talent development, and efforts in safety production and environmental protection [Governance Structure and Risk Management](index=28&type=section&id=Governance%20Structure%20and%20Risk%20Management) Board adjustments strengthened governance with experienced directors, ESG principles were integrated achieving an International A-level rating, and internal controls were enhanced through "strategy + operation" and dynamic risk monitoring - The composition of the Company's Board of Directors and specialized committees was adjusted, with newly appointed directors possessing extensive experience in key areas such as corporate governance, organizational human resources, financial auditing, and pharmaceutical investment[55](index=55&type=chunk) - The Group deeply embedded Environmental, Social, and Governance (ESG) principles into its corporate strategy, achieving an International A-level rating from China Chengxin Green Finance in 2025[55](index=55&type=chunk) - The Group strengthened internal control and risk prevention by implementing a "strategy + operation" model and deepening the construction of a "annual major risk assessment + quarterly dynamic monitoring" prevention and control mechanism[55](index=55&type=chunk) [Talent System Development](index=28&type=section&id=Talent%20System%20Development) The Group strengthened its young cadre team, refined its TCM talent development system, increased certified internal trainers, improved high-caliber talent and senior professionals, and received the "2025 Outstanding Employer" award - The Group continuously strengthened the development of its excellent young cadre team, iterated and updated the "General Plan" training program, and continuously improved the "Five Elements Famous Formulas" talent development system[56](index=56&type=chunk) - As of June 30, 2025, the Group had **587** certified internal trainers, an increase of approximately **8.1%** compared to the end of 2024[56](index=56&type=chunk) - The Group currently has **3** individuals enjoying special government allowances from the State Council, **2** Grand Craftsmen, approximately **6%** of its talent graduated from high-level institutions, and the number of individuals with senior professional titles increased by approximately **19.4%** compared to the end of 2024[57](index=57&type=chunk) [Safety Production and Environmental Protection](index=29&type=section&id=Safety%20Production%20and%20Environmental%20Protection) The Group continued safety production and energy-saving initiatives, enhancing hazard identification, professional training, and deploying work around pollution control, risk prevention, and carbon neutrality, deepening technical expertise - In terms of safety production, the Group continued to strengthen hazard identification and rectification, conducted **27** supervisory inspections of its subsidiaries, and organized **784** specialized training sessions, with **30,428** participants[58](index=58&type=chunk) - In terms of energy conservation and environmental protection, work was deployed across **5** major areas, including pollution control in key areas, ecological environment risk prevention and control, and promotion of carbon peaking and carbon neutrality, with **96** internal training sessions conducted[58](index=58&type=chunk) [Policy Updates](index=29&type=section&id=Policy%20Updates) National departments issued multiple TCM development policies covering drug regulation, medical insurance, anti-bribery, anti-monopoly, traceability, quality improvement, and smart manufacturing, aiming to promote high-quality TCM industry development and market order - The General Office of the State Council issued "Opinions on Comprehensively Deepening the Reform of Drug and Medical Device Regulation to Promote High-Quality Development of the Pharmaceutical Industry," clarifying the improvement of the TCM-specific review evidence system, supporting the transformation of new TCM drugs, and granting market exclusivity periods for exclusive TCM varieties[60](index=60&type=chunk) - The National Healthcare Security Administration issued the "Notice on Promoting the Reform of Real-time Settlement of Basic Medical Insurance Funds," explicitly requiring **80%** of national统筹 regions to achieve real-time settlement by 2025 and full coverage by 2026[61](index=61&type=chunk) - The State Administration for Market Regulation issued "Compliance Guidelines for Pharmaceutical Enterprises to Prevent Commercial Bribery Risks," providing a full-process compliance operational framework for pharmaceutical enterprises[61](index=61&type=chunk) - The General Office of the State Council issued "Guidelines on Anti-Monopoly in the Pharmaceutical Sector," focusing on regulating monopolistic behaviors such as joint pricing, channel manipulation, and abuse of intellectual property rights[62](index=62&type=chunk) - The National Healthcare Security Administration and three other departments jointly issued the "Notice on Strengthening the Collection and Application of Drug Traceability Codes in Medical Security and Work Injury Insurance Fields," requiring all medical institutions to fully collect and upload drug traceability codes starting from January 1, 2026[64](index=64&type=chunk) - The General Office of the State Council issued "Opinions on Improving the Quality of Traditional Chinese Medicine and Promoting High-Quality Development of the Traditional Chinese Medicine Industry," proposing **8** aspects and **21** key tasks across the entire TCM industry chain, including strengthening the protection and utilization of TCM resources, improving the development level of the Chinese herbal medicine industry, and accelerating the transformation and upgrading of the TCM industry[65](index=65&type=chunk) [Next Steps and Work Plan](index=36&type=section&id=Next%20Steps%20and%20Work%20Plan) The Group will prioritize "specialized management, intensive operation, and integrated coordination" to build a leading TCM industrial cluster, shifting to value-creation, focusing on optimizing structure, lean management, transformation, and risk prevention - The Group will adhere to the principles of "specialized management, intensive operation, and integrated coordination" to accelerate the construction of a leading TCM industrial cluster, promoting a shift in development model from scale-oriented to value creation[72](index=72&type=chunk) - Optimize layout and structure, systematically build a new collaborative system, including promoting the layout of origin processing clusters, focusing on the supply of authentic medicinal materials, optimizing production structure layout, and establishing a marketing collaborative system[72](index=72&type=chunk) - Enhance efficiency through lean management, by integrating internal extraction and preparation capacities, leveraging centralized procurement for price control, implementing tiered supplier management, and comprehensively reducing selling expenses[73](index=73&type=chunk) - Focus on transformation and addressing shortcomings, continuously optimizing organizational structure and management levels, establishing a "leaderboard" mechanism, and deeply advancing digital transformation and the implementation of artificial intelligence scenarios[73](index=73&type=chunk) - Strengthen foundations and prevent risks, by enhancing policy research, improving the safety of the TCM industry chain, elevating the level of refined contract management, and strengthening service provider access supervision[74](index=74&type=chunk) [Detailed Financial Performance Analysis](index=38&type=section&id=Detailed%20Financial%20Performance%20Analysis) This section offers an in-depth analysis of revenue and cost of sales by business segment, key financial items, liquidity, and employee remuneration [Revenue and Cost of Sales Analysis by Business Segment](index=38&type=section&id=Revenue%20and%20Cost%20of%20Sales%20Analysis%20by%20Business%20Segment) This section details revenue, cost of sales, gross profit, and gross margin changes for each business segment, noting significant revenue declines in Chinese herbal medicines production and formula granules, but improved gross margins in several segments Revenue and Cost of Sales by Business Segment (H1 2025 vs H1 2024) | Segment | 2025 Revenue (RMB thousands) | 2024 Revenue (RMB thousands) | Revenue Change (%) | 2025 Cost of Sales (RMB thousands) | 2024 Cost of Sales (RMB thousands) | Cost of Sales Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Production and Operation of Chinese Herbal Medicines | 445,584 | 754,277 | (40.9)% | 402,050 | 690,575 | (41.8)% | | Chinese Herbal Decoction Pieces | 1,596,128 | 1,576,914 | 1.2% | 1,219,630 | 1,244,087 | (2.0)% | | Chinese Herbal Formula Granules | 2,990,750 | 3,479,735 | (14.1)% | 1,329,265 | 1,421,554 | (6.5)% | | Proprietary Chinese Medicines | 2,308,809 | 2,418,349 | (4.5)% | 793,301 | 853,221 | (7.0)% | | Traditional Chinese Medicine (TCM) Big Health | 122,112 | 156,198 | (21.8)% | 84,544 | 114,782 | (26.3)% | | Total | 7,463,383 | 8,385,473 | (11.0)% | 3,828,790 | 4,324,219 | (11.5)% | [Production and Operation of Chinese Herbal Medicines (Detailed)](index=38&type=section&id=Production%20and%20Operation%20of%20Chinese%20Herbal%20Medicines_Detailed) Revenue decreased by **40.9%** to **RMB 446 million** due to business refocus and market price fluctuations, while gross margin increased by **1.4** percentage points to **9.8%** from sales structure optimization - Revenue from the production and operation of Chinese herbal medicines segment was approximately **RMB 445,584,000**, a **40.9%** decrease compared to the prior period, primarily due to a proactive adjustment of the segment's development focus and the impact of fluctuating downward prices in the Chinese herbal medicine market[77](index=77&type=chunk) - The gross profit margin for the current period was **9.8%**, an increase of **1.4** percentage points from **8.4%** in the prior period, mainly benefiting from optimized sales structure[77](index=77&type=chunk) [Chinese Herbal Decoction Pieces (Detailed)](index=39&type=section&id=Chinese%20Herbal%20Decoction%20Pieces_Detailed) Revenue increased by **1.2%** to **RMB 1.596 billion** due to expanded medical terminal sales, and gross margin rose by **2.5** percentage points to **23.6%** from sales structure optimization and improved internal production management - Revenue from the Chinese herbal decoction pieces segment was approximately **RMB 1,596,128,000**, a **1.2%** increase compared to the prior period, primarily due to continuous deep cultivation in the medical terminal sales sector[79](index=79&type=chunk) - The gross profit margin for the current period was **23.6%**, an increase of **2.5** percentage points from **21.1%** in the prior period, mainly benefiting from optimized sales structure and improved internal production management levels[79](index=79&type=chunk) [Chinese Herbal Formula Granules (Detailed)](index=39&type=section&id=Chinese%20Herbal%20Formula%20Granules_Detailed) Revenue decreased by **14.1%** to **RMB 2.991 billion** due to increased centralized procurement business and market competition, with gross margin declining by **3.5** percentage points to **55.6%** as centralized procurement further reduced margins - Revenue from the Chinese herbal formula granules segment was approximately **RMB 2,990,750,000**, a **14.1%** decrease compared to the prior period, primarily due to a significant increase in the proportion of centralized procurement business and intensified market competition[81](index=81&type=chunk) - The gross profit margin for the current period was **55.6%**, a **3.5** percentage point decrease from **59.1%** in the prior period, mainly because the increased proportion of centralized procurement business further reduced gross profit margins[81](index=81&type=chunk) [Proprietary Chinese Medicines (Detailed)](index=40&type=section&id=Proprietary%20Chinese%20Medicines_Detailed) Revenue decreased by **4.5%** to **RMB 2.309 billion** due to healthcare reform, e-commerce growth, and sales strategy adjustments, while gross margin increased by **0.9** percentage points to **65.6%** from lower raw material procurement costs - Revenue from the proprietary Chinese medicines segment was approximately **RMB 2,308,809,000**, a **4.5%** decrease compared to the prior period, primarily due to the continued deepening of healthcare reform and the development of e-commerce platforms, which put pressure on OTC product sales, coupled with adjustments in sales pace and product strategy, leading to a decline in revenue[83](index=83&type=chunk) - The gross profit margin for the current period was **65.6%**, an increase of **0.9** percentage points from **64.7%** in the prior period, mainly benefiting from a decrease in Chinese herbal medicine procurement costs during the current period[83](index=83&type=chunk) [Traditional Chinese Medicine (TCM) Big Health (Detailed)](index=40&type=section&id=Traditional%20Chinese%20Medicine%20%28TCM%29%20Big%20Health_Detailed) Revenue decreased by **21.8%** to **RMB 122 million** due to strategic business adjustments and the suspension of inefficient product lines, while gross margin increased by **4.3** percentage points to **30.8%** from sales structure optimization - Revenue from the Traditional Chinese Medicine (TCM) big health segment was approximately **RMB 122,112,000**, a **21.8%** decrease compared to the prior period, primarily due to adjustments in business development strategy and the suspension of some inefficient product lines and businesses[85](index=85&type=chunk) - The gross profit margin for the current period was **30.8%**, an increase of **4.3** percentage points from **26.5%** in the prior period, mainly benefiting from optimized sales structure and improved profitability[85](index=85&type=chunk) [Analysis of Key Financial Items](index=41&type=section&id=Analysis%20of%20Key%20Financial%20Items) This section analyzes changes and reasons for other income, gains/losses, impairment, selling, administrative, R&D, finance costs, share of loss of associates, and profit for the period and earnings per share [Other Income (Detailed)](index=41&type=section&id=Other%20Income_Detailed) Other income increased by **14.4%** to **RMB 91.052 million**, primarily driven by a **14.4%** increase in government subsidies to **RMB 68.350 million** - For the six months ended June 30, 2025, the Group's other income was approximately **RMB 91,052,000**, an increase of **14.4%** compared to the prior period, mainly due to government subsidies of approximately **RMB 68,350,000** received during the reporting period, an increase of **14.4%** compared to the prior period[86](index=86&type=chunk) [Other Gains and Losses (Detailed)](index=41&type=section&id=Other%20Gains%20and%20Losses_Detailed) Other losses expanded to **RMB 262 million**, mainly due to **RMB 242 million** goodwill impairment recognized this period, although late payment penalties significantly decreased by **66.8%** - For the six months ended June 30, 2025, the Group's other losses were approximately **RMB 262,394,000**, primarily due to the recognition of goodwill impairment of approximately **RMB 242,461,000** during the current period[87](index=87&type=chunk) - Late payment penalties for the current period were approximately **RMB 17,523,000**, a **66.8%** decrease compared to approximately **RMB 52,708,000** in the prior period[87](index=87&type=chunk) [Impairment Losses under Expected Credit Loss Model](index=41&type=section&id=Impairment%20Losses%20under%20Expected%20Credit%20Loss%20Model) Credit impairment losses of **RMB 185.875 million** were recognized this period, an increase of **RMB 27.107 million** year-on-year, primarily due to a **RMB 176.965 million** increase in trade receivables over one year old - Credit impairment losses of approximately **RMB 185,875,000** were recognized this period, an increase of approximately **RMB 27,107,000** compared to approximately **RMB 158,768,000** in the prior period[88](index=88&type=chunk) - The increase was mainly due to a year-on-year increase of approximately **RMB 176,965,000** in the Group's trade receivables over one year old as of June 30, 2025[88](index=88&type=chunk) [Selling and Distribution Expenses (Detailed)](index=41&type=section&id=Selling%20and%20Distribution%20Expenses_Detailed) Selling and distribution expenses decreased by **7.1%** to **RMB 2.556 billion**, primarily due to a decline in revenue from Chinese herbal formula granules and proprietary Chinese medicines, leading to reduced associated sales expenses - For the six months ended June 30, 2025, the Group's selling and distribution expenses were approximately **RMB 2,556,399,000**, a **7.1%** decrease compared to the prior period[89](index=89&type=chunk) - The decrease was mainly due to a year-on-year decline in revenue from Chinese herbal formula granules and proprietary Chinese medicines, resulting in reduced associated sales expenses[89](index=89&type=chunk) [Administrative Expenses (Detailed)](index=41&type=section&id=Administrative%20Expenses_Detailed) Administrative expenses decreased by **2.3%** to **RMB 501 million**, mainly due to optimized management team structure, reduced personnel, and various cost-saving initiatives - For the six months ended June 30, 2025, the Group's administrative expenses were approximately **RMB 500,543,000**, a decrease of approximately **2.3%** compared to the prior period[90](index=90&type=chunk) - The decrease was mainly due to optimized management team structure and reduced management personnel, leading to a decrease in remuneration expenses; and various measures implemented during the period to reduce various expenses, showing the effectiveness of cost reduction and efficiency improvement[90](index=90&type=chunk) [Research and Development Expenses (Detailed)](index=42&type=section&id=Research%20and%20Development%20Expenses_Detailed) R&D expenses decreased by **4.4%** to **RMB 256 million**, primarily allocated to new drug development, classic formula research, Chinese herbal formula granule standard studies, and production adaptability research - For the six months ended June 30, 2025, the Group's research and development expenses were approximately **RMB 256,123,000**, a **4.4%** decrease compared to the prior period[91](index=91&type=chunk) - During the reporting period, research and development expenses were primarily used for research to enhance future benefits (new drug development and classic formula research), research to improve quality standards (Chinese herbal formula granule standards), and research to enhance future efficiency (adaptability of Chinese medicine product production)[91](index=91&type=chunk) [Finance Costs (Detailed)](index=42&type=section&id=Finance%20Costs_Detailed) Finance costs decreased by **44.0%** to **RMB 47.203 million**, primarily due to a year-on-year reduction in interest-bearing debt, with an actual loan interest rate of **2.7%** - For the six months ended June 30, 2025, the Group's finance costs were approximately **RMB 47,203,000**, a year-on-year decrease, mainly due to a year-on-year reduction in the Group's interest-bearing debt during the current period[92](index=92&type=chunk) - During the reporting period, the Group's actual loan interest rate was **2.7%** (six months ended June 30, 2024: **2.8%**)[92](index=92&type=chunk) [Share of Loss of Associates (Detailed)](index=42&type=section&id=Share%20of%20Loss%20of%20Associates_Detailed) Share of loss of associates significantly decreased to **RMB 47,000**, down from **RMB 874,000** in the prior period, mainly due to investment losses recognized from certain equity-invested associates - For the six months ended June 30, 2025, the Group recorded a share of loss of associates of approximately **RMB 47,000**, compared to a share of loss of associates of approximately **RMB 874,000** in the prior period[93](index=93&type=chunk) - This period's loss was primarily due to investment losses recognized from certain equity-invested associates[93](index=93&type=chunk) [Profit for the Period and Earnings Per Share](index=42&type=section&id=Profit%20for%20the%20Period%20and%20Earnings%20Per%20Share) Profit for the period shifted from a **RMB 214.143 million** profit to a **RMB 141.760 million** loss, a **166.2%** decrease, resulting in a net profit margin of **-1.9%** and basic loss per share of **RMB 2.14 cents** - For the six months ended June 30, 2025, the Group's profit for the period was approximately **RMB -141,760,000**, a decrease of approximately **166.2%** compared to approximately **RMB 214,143,000** in the prior period[94](index=94&type=chunk) - The net profit margin (defined as profit for the period divided by revenue) was **-1.9%**, a decrease of approximately **4.5** percentage points from **2.6%** in the prior period[94](index=94&type=chunk) - Basic earnings per share was **RMB -2.14 cents**, a **151.1%** decrease compared to basic earnings per share of **RMB 4.19 cents** in the prior period[95](index=95&type=chunk) [Liquidity and Financial Resources](index=43&type=section&id=Liquidity%20and%20Financial%20Resources) As of June 30, 2025, net current assets were **RMB 9.521 billion**, with a current ratio of **2.0** times and a debt-to-equity ratio of **17.0%**, supported by ample working capital and **RMB 10.396 billion** in unused bank credit facilities Liquidity and Financial Resources Overview | Indicator | June 30, 2025 (RMB thousands) | Dec 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Current Assets | 18,970,577 | 18,839,503 | | Current Liabilities | 9,449,353 | 7,800,198 | | Net Current Assets | 9,521,224 | 11,039,305 | | Current Ratio | 2.0 times | 2.4 times | | Debt-to-Equity Ratio | 17.0% | 18.5% | | Interest-bearing Bank and Other Borrowings | 2,306,923 | 2,697,314 | - As of June 30, 2025, the Group had approximately **RMB 10,396,072,000** in unused bank credit facilities, indicating ample working capital and a stable financial position[99](index=99&type=chunk) - For the six months ended June 30, 2025, the Group's investment expenditure on property, plant and equipment and intangible assets was approximately **RMB 179,508,000**, primarily for the expansion and renovation of production capacity in the Chinese herbal decoction pieces segment[100](index=100&type=chunk) - As of June 30, 2025, the Group had no significant contingent liabilities, and foreign exchange risk was not material[102](index=102&type=chunk)[103](index=103&type=chunk) [Employees and Remuneration Policy](index=45&type=section&id=Employees%20and%20Remuneration%20Policy) As of June 30, 2025, the Group's total workforce decreased by **12.1%** to **15,583** employees, with total remuneration for the period decreasing by **5.2%** to **RMB 1.113 billion** Employee Count and Total Remuneration | Indicator | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Total Employees | 15,583 people | 17,716 people | | Total Remuneration (RMB thousands) | 1,113,036 | 1,174,466 | [Other Information](index=45&type=section&id=Other%20Information) This section covers interim dividend policy, corporate governance, securities transactions, and the review and publication of interim results [Interim Dividend](index=45&type=section&id=Interim%20Dividend) The Board did not recommend an interim dividend for the six months ended June 30, 2025 - The Board did not recommend an interim dividend for the six months ended June 30, 2025 (six months ended June 30, 2024: nil)[105](index=105&type=chunk) [Corporate Governance and Securities Transactions](index=45&type=section&id=Corporate%20Governance%20and%20Securities%20Transactions) The company complied with the HKEX Corporate Governance Code, directors adhered to the Model Code for securities transactions, and neither the company nor its subsidiaries purchased, sold, or redeemed any listed securities - The Company has complied with the applicable code provisions of the Corporate Governance Code set out in Appendix C1 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited for the six months ended June 30, 2025[106](index=106&type=chunk) - Following specific enquiries made to all Directors, all Directors confirmed that they had complied with the required standards set out in the Model Code during the reporting period[107](index=107&type=chunk) - For the six months ended June 30, 2025, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[108](index=108&type=chunk) [Review and Publication of Interim Results](index=45&type=section&id=Review%20and%20Publication%20of%20Interim%20Results) The Audit Committee reviewed the unaudited consolidated interim financial results without disagreement, and the results announcement and interim report will be published on the company's website and HKEXnews website - The Audit Committee has reviewed the Group's unaudited consolidated financial results for the six months ended June 30, 2025, including the accounting principles, accounting treatments, and practices adopted by the Group, and the Audit Committee had no disagreement with the accounting principles, accounting treatments, and practices adopted by the Group[109](index=109&type=chunk) - This results announcement will be published on the Company's website and the HKEXnews website, and the Company's 2025 interim report, containing information required by the Listing Rules, will be sent to the Company's shareholders and published on the Company's website and the HKEXnews website[110](index=110&type=chunk)