[Financial Highlights](index=1&type=section&id=%E8%B2%A1%E5%8B%99%E6%91%98%E8%A6%81) For the six months ended June 30, 2025, revenue grew **16.92%** to **RMB 951.38 million**, while profit for the period and attributable profit decreased, and gross floor area under management expanded **12.81%** Financial Highlights for H1 2025 | Metric | June 30, 2025 (RMB million) | June 30, 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 951.38 | 813.69 | +16.92% | | Profit for the period | 70.13 | 71.35 | -1.70% | | Profit attributable to owners of the Company | 57.61 | 63.47 | -9.23% | | Gross Floor Area Under Management (million sq.m.) | 49.59 | 43.96 | +12.81% | [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=2&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E6%90%8D%E7%9B%8A%E5%8F%8A%E5%85%B6%E4%BB%96%E5%85%A8%E9%9D%A2%E6%94%B6%E7%9B%8A%E8%A1%A8) For the six months ended June 30, 2025, revenue increased by **16.92%**, but a higher growth in cost of sales and services led to a marginal **0.52%** gross profit increase and a decline in period and attributable profits Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (For the six months ended June 30) | Metric | 2025 (RMB thousand) | 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 951,377 | 813,694 | +16.92% | | Cost of sales and services | (822,842) | (685,829) | +19.98% | | Gross profit | 128,535 | 127,865 | +0.52% | | Operating profit | 86,689 | 86,969 | -0.32% | | Profit for the period | 70,134 | 71,345 | -1.70% | | Profit attributable to owners of the Company for the period | 57,607 | 63,467 | -9.23% | | Earnings per share, basic and diluted (RMB) | 0.154 | 0.170 | -9.41% | [Condensed Consolidated Statement of Financial Position](index=4&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81%E8%A1%A8) As of June 30, 2025, total assets increased to **RMB 2,484.79 million**, with growth in both non-current and current assets, while total equity slightly increased and total liabilities rose significantly Condensed Consolidated Statement of Financial Position (As of June 30, 2025) | Metric | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | **ASSETS** | | | | | Total non-current assets | 315,962 | 267,829 | +18.00% | | Total current assets | 2,168,829 | 2,061,672 | +5.20% | | Total assets | 2,484,791 | 2,329,501 | +6.67% | | **EQUITY AND LIABILITIES** | | | | | Total equity | 1,375,912 | 1,369,073 | +0.50% | | Total non-current liabilities | 91,311 | 68,213 | +33.86% | | Total current liabilities | 1,017,568 | 892,215 | +14.05% | | Total liabilities | 1,108,879 | 960,428 | +15.46% | | Total equity and liabilities | 2,484,791 | 2,329,501 | +6.67% | [Notes to the Condensed Consolidated Financial Statements](index=6&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8%E9%99%84%E8%A8%BB) This section provides detailed information on the basis of preparation, key accounting estimates, financial risk management, segment information, and the composition and changes of various financial items [1. General Information](index=6&type=section&id=1.%20%E4%B8%80%E8%88%AC%E8%B3%87%E6%96%99) Financial Street Property Co., Ltd., established in China in 1994 and listed on the HKEX in 2020, primarily provides property management services in China and Hong Kong, with its ultimate controlling entity being Beijing Financial Street Investment (Group) Co., Ltd - The Company was established in China in 1994, restructured into a joint stock company in 2019, and listed on the Main Board of the Hong Kong Stock Exchange on July 6, 2020[9](index=9&type=chunk)[10](index=10&type=chunk) - The Group is principally engaged in the provision of property management and related services in China and Hong Kong[11](index=11&type=chunk) - The ultimate controlling company is Beijing Financial Street Investment (Group) Co., Ltd., controlled by the State-owned Assets Supervision and Administration Commission of Xicheng District, Beijing[10](index=10&type=chunk) [2. Basis of Preparation of the Interim Financial Statements](index=6&type=section&id=2.%20%E4%B8%AD%E6%9C%9F%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8%E4%B9%8B%E7%B7%A8%E8%A3%BD%E5%9F%BA%E6%BA%96) The condensed consolidated interim financial statements are prepared in accordance with HKEX Listing Rules and HKAS 34, adopting revised HKFRS accounting standards effective January 1, 2025, with no significant impact on results or financial position expected - The condensed consolidated interim financial statements are prepared in accordance with the applicable disclosure requirements of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited and Hong Kong Accounting Standard 34 "Interim Financial Reporting" issued by the Hong Kong Institute of Certified Public Accountants[12](index=12&type=chunk) - Revised HKFRS accounting standards effective January 1, 2025, have been adopted, and the Directors do not expect any significant impact on the preparation and presentation of the Group's results and financial position for the current and prior periods[13](index=13&type=chunk)[15](index=15&type=chunk) [3. Critical Accounting Estimates and Judgements](index=7&type=section&id=3.%20%E9%97%9C%E9%8D%B5%E6%9C%83%E8%A8%88%E4%BC%B0%E8%A8%88%E5%8F%8A%E5%88%A4%E6%96%B7) The significant judgements and key sources of estimation uncertainty applied by management in preparing the interim financial statements are consistent with those used in the consolidated financial statements for the year ended December 31, 2024 - The significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty in preparing these condensed consolidated interim financial statements were the same as those applied to the consolidated financial statements for the year ended December 31, 2024[16](index=16&type=chunk) [4. Financial Risk Management](index=7&type=section&id=4.%20%E8%B2%A1%E5%8B%99%E9%A2%A8%E9%9A%AA%E8%A8%88%E9%87%8F) The Group is exposed to market risks (foreign exchange and interest rate), credit risk, and liquidity risk, with no significant changes in risk management policies since December 31, 2024, and the interim report does not include all annual financial statement risk disclosures - The Group's activities expose it to a variety of financial risks: market risk (including foreign exchange risk and interest rate risk), credit risk, and liquidity risk[17](index=17&type=chunk) - There have been no significant changes in the Group's risk management policies since the year ended December 31, 2024[18](index=18&type=chunk) [5. Segments](index=7&type=section&id=5.%20%E5%88%86%E9%83%A8) The Board considers the Group to operate as a single operating segment, primarily providing property management and related services in China and Hong Kong, with resource allocation focused on enhancing overall Group value - The Group is principally engaged in the provision of property management and related services in China and Hong Kong, and the Board considers there to be only one operating segment[19](index=19&type=chunk) [6. Revenue](index=8&type=section&id=6.%20%E6%94%B6%E5%85%A5) For the six months ended June 30, 2025, the Group's revenue increased by **16.92%** to **RMB 951.38 million**, primarily from property management and related services, with transactions from Financial Street associates accounting for **6%** of total revenue, a decrease from the prior period Revenue Breakdown (For the six months ended June 30) | Revenue Source | 2025 (RMB thousand) | 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Property management and related services (lump sum basis) | 754,157 | 623,463 | +20.97% | | Property management and related services (remuneration basis) | 11,184 | 8,505 | +31.50% | | Community value-added services | 153,653 | 147,446 | +4.21% | | Catering services | 28,295 | 29,642 | -4.54% | | Rental income | 4,088 | 4,638 | -11.86% | | **Total Revenue** | **951,377** | **813,694** | **+16.92%** | - For the six months ended June 30, 2025, transactions with Financial Street associates accounted for **6%** of the Group's revenue (2024: 9%)[20](index=20&type=chunk) External Revenue by Geographical Region (For the six months ended June 30) | Region | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Mainland China | 869,352 | 755,186 | | Hong Kong | 82,025 | 58,508 | | **Total** | **951,377** | **813,694** | [7. Other Income](index=10&type=section&id=7.%20%E5%85%B6%E4%BB%96%E6%94%B6%E5%85%A5) Other income for the period was **RMB 251 thousand**, primarily from government grants, a decrease from **RMB 928 thousand** in the prior period, with no recognized VAT input deduction for the current period Other Income Breakdown (For the six months ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Government grants | 251 | 867 | | Recognized VAT input deduction | — | 61 | | **Total** | **251** | **928** | - Government grants are discretionary receipts from local Chinese government authorities for local business development and employment, with no unfulfilled conditions or contingencies attached to their receipt[23](index=23&type=chunk)[24](index=24&type=chunk) [8. Other Gains/(Losses), Net](index=10&type=section&id=8.%20%E5%85%B6%E4%BB%96%E6%94%B6%E7%9B%8A%EF%BC%8F%EF%BC%88%E虧%E6%90%8D%EF%BC%89%EF%BC%8C%E6%B7%A8%E9%A1%8D) Net other gains for the period amounted to **RMB 6,397 thousand**, primarily due to gains from the disposal of right-of-use assets, compared to a net loss of **RMB 36 thousand** in the prior period Other Gains/(Losses), Net (For the six months ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Gain on disposal of right-of-use assets | 6,413 | — | | Net loss on derecognition upon early termination of leases | — | (29) | | Net loss on disposal of property, plant and equipment | (57) | (82) | | Others | 41 | 75 | | **Total** | **6,397** | **(36)** | [9. Finance Income, Net](index=11&type=section&id=9.%20%E8%9E%8D%E8%B3%87%E6%94%B6%E5%85%A5%EF%BC%8C%E6%B7%A8%E9%A1%8D) Net finance income for the period was **RMB 5,564 thousand**, a decrease from **RMB 5,794 thousand** in the prior period, mainly due to lower bank deposit interest income despite an increase in finance lease interest income Finance Income, Net (For the six months ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | **Finance income** | | | | Interest income from bank deposits | 4,302 | 5,251 | | Interest income from a fellow subsidiary | 2,706 | 1,997 | | Interest income from finance leases | 1,208 | 538 | | **Total finance income** | **8,216** | **7,786** | | **Finance costs** | | | | Interest expense on lease liabilities | (1,960) | (1,378) | | Imputed interest expense on consideration payable for acquisition of a subsidiary | (644) | (614) | | Net interest expense on retirement benefit obligations | (48) | — | | **Total finance costs** | **(2,652)** | **(1,992)** | | **Net finance income** | **5,564** | **5,794** | [10. Profit Before Income Tax](index=12&type=section&id=10.%20%E9%99%A4%E6%89%80%E5%BE%97%E7%A8%85%E5%89%8D%E5%88%A9%E6%BD%A4) Profit before income tax for the period was **RMB 92,305 thousand**, largely consistent with the prior period, with significant increases in staff costs and cleaning, security, and maintenance service costs, offset by a decrease in catering service raw material costs Profit Before Income Tax Components (For the six months ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Staff costs (included in cost of sales and services) | 308,676 | 275,387 | +12.09% | | Staff costs (included in administrative expenses) | 25,608 | 22,228 | +15.21% | | Cleaning, security and maintenance service costs | 407,861 | 306,413 | +33.10% | | Depreciation (property, plant and equipment) | 12,474 | 12,571 | -0.77% | | Depreciation (investment properties) | 4,359 | 2,752 | +58.40% | | Amortisation of intangible assets | 1,944 | 1,722 | +12.89% | | Expected credit loss allowance (trade receivables) | 4,095 | 4,001 | +2.35% | | Expected credit loss allowance (other financial assets) | 1,742 | (196) | N/A | | Cost of raw materials and consumables used in catering services | 14,509 | 16,736 | -13.29% | [11. Income Tax Expense](index=13&type=section&id=11.%20%E6%89%80%E5%BE%97%E7%A8%85%E9%96%8B%E6%94%AF) Income tax expense for the period increased to **RMB 22,171 thousand**, primarily due to higher PRC corporate income tax and Hong Kong profits tax, despite a decrease in deferred tax, with some subsidiaries benefiting from preferential tax rates Total Income Tax Expense (For the six months ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Current income tax (PRC corporate income tax) | 25,360 | 31,494 | -19.48% | | Current income tax (Hong Kong profits tax) | 1,804 | 805 | +124.10% | | Deferred tax | (4,993) | (11,451) | -56.40% | | **Total income tax expense** | **22,171** | **20,848** | **+6.35%** | - The general PRC corporate income tax rate is **25%**, with some small-profit enterprises enjoying a **5%** preferential tax rate, and Chongqing Jiangbeizui Property Services Co., Ltd. benefiting from a **15%** preferential tax rate under the Western Development Policy[29](index=29&type=chunk) - Hong Kong profits tax is calculated at **16.5%**, with eligible entities taxed at **8.25%** on the first **HKD 2,000,000** of assessable profits[30](index=30&type=chunk) [12. Dividends](index=14&type=section&id=12.%20%E8%82%A1%E6%81%AF) The Company declared a final dividend of **RMB 58,640 thousand** for 2024, approved by shareholders on June 5, 2025, and the Board resolved not to declare an interim dividend for the six months ended June 30, 2025 - The Company declared a final dividend of **RMB 58,640 thousand** (2024: RMB 64,616 thousand), which was approved at the annual general meeting on June 5, 2025[32](index=32&type=chunk) - The Board resolved not to declare an interim dividend for the six months ended June 30, 2025 (2024: nil)[32](index=32&type=chunk)[95](index=95&type=chunk) [13. Earnings Per Share](index=14&type=section&id=13.%20%E6%AF%8F%E8%82%A1%E7%9B%88%E5%88%A9) For the six months ended June 30, 2025, basic earnings per share decreased to **RMB 0.154** from **RMB 0.170** in the prior period, with diluted earnings per share being the same as basic earnings per share due to the absence of potential dilutive ordinary shares Basic Earnings Per Share (For the six months ended June 30) | Metric | 2025 | 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Profit attributable to owners of the Company (RMB thousand) | 57,607 | 63,467 | -9.23% | | Weighted average number of ordinary shares in issue (thousand shares) | 373,500 | 373,500 | 0% | | **Basic earnings per share (RMB)** | **0.154** | **0.170** | **-9.41%** | - As the Group had no potential dilutive ordinary shares for the six months ended June 30, 2025 and 2024, the diluted earnings per share were the same as the basic earnings per share[35](index=35&type=chunk) [14. Bills Receivable and Trade Receivables](index=14&type=section&id=14.%20%E6%87%89%E6%94%B6%E7%A5%A8%E6%93%9A%E5%8F%8A%E8%B2%BF%E6%98%93%E6%87%89%E6%94%B6%E6%AC%BE%E9%A0%85) As of June 30, 2025, net bills receivable and trade receivables increased by **32.52%** to **RMB 458.03 million**, primarily due to increased trade receivables from property management services driven by expanded gross floor area under management, with an increase in expected credit loss allowance for trade receivables to **RMB 37,350 thousand** Bills Receivable and Trade Receivables (As of June 30, 2025) | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Trade receivables (related parties) | 112,848 | 110,745 | +1.90% | | Trade receivables (third parties) | 380,002 | 268,406 | +41.95% | | Less: Expected credit loss allowance | (37,350) | (33,511) | +11.45% | | Trade receivables, net | 455,500 | 345,640 | +31.78% | | Bills receivable | 2,532 | — | N/A | | **Total** | **458,032** | **345,640** | **+32.52%** | - The increase in trade receivables was mainly due to the increase in trade receivables from property management services resulting from the increase in total gross floor area under management; and trade receivables not yet due for collection[71](index=71&type=chunk) Changes in Expected Credit Loss Allowance for Trade Receivables (For the six months ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | At January 1 | 33,511 | 21,126 | | Expected credit loss allowance recognized during the period | 4,095 | 4,001 | | Amounts written off during the period | (256) | — | | **Balance at June 30** | **37,350** | **25,127** | [15. Other Financial Assets Measured at Amortised Cost](index=15&type=section&id=15.%20%E6%8C%89%E6%攤%E9%8A%B7%E6%88%90%E6%9C%AC%E8%A8%88%E9%87%8F%E4%B9%8B%E5%85%B6%E4%BB%96%E9%87%91%E8%9E%8D%E8%B3%87%E7%94%A2) As of June 30, 2025, total other financial assets measured at amortised cost increased by approximately **RMB 75.07 million** to **RMB 155.78 million**, primarily due to an increase in finance lease receivables from asset operation businesses Other Financial Assets Measured at Amortised Cost (As of June 30, 2025) | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Finance lease receivables | 77,098 | 16,971 | +354.20% | | Payments on behalf of property owners, tenants and property developers | 26,390 | 19,883 | +32.72% | | Deposits (related parties) | 4,767 | 4,475 | +6.52% | | Deposits (third parties) | 37,277 | 27,986 | +33.19% | | Amounts due from a non-controlling interest | 10,487 | 10,649 | -1.49% | | Others | 3,074 | 2,314 | +32.84% | | Less: Expected credit loss allowance | (3,314) | (1,572) | +110.81% | | **Total** | **155,779** | **80,706** | **+93.02%** | - The increase in other financial assets was mainly due to finance lease receivables arising from undertaking asset operation businesses[72](index=72&type=chunk) Maturity Analysis of Finance Lease Receivables (As of June 30, 2025) | Maturity Period | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Within one year | 9,878 | 8,339 | | One to two years | 14,333 | 5,887 | | Two to three years | 9,043 | 3,434 | | Over three years | 57,043 | — | | **Total undiscounted lease payments receivable** | **90,297** | **17,660** | [16. Share Capital](index=18&type=section&id=16.%20%E8%82%A1%E6%9C%AC) As of June 30, 2025, the Company's issued and fully paid share capital remained at **RMB 373,500 thousand**, with **373,500 thousand** shares, consistent with the prior period and year-end Share Capital (As of June 30, 2025) | Item | June 30, 2025 (thousand shares) | June 30, 2025 (RMB thousand) | June 30, 2024 (thousand shares) | June 30, 2024 (RMB thousand) | | :--- | :--- | :--- | :--- | :--- | | Issued and fully paid share capital | 373,500 | 373,500 | 373,500 | 373,500 | [17. Trade and Other Payables](index=18&type=section&id=17.%20%E8%B2%BF%E6%98%93%E5%8F%8A%E5%85%B6%E4%BB%96%E6%87%89%E4%BB%98%E6%AC%BE%E9%A0%85) As of June 30, 2025, total trade and other payables increased to **RMB 844.90 million**, an increase of approximately **15.46%** from December 31, 2024, primarily due to increased trade payables and salaries and welfare payables driven by business expansion and bonus accruals Trade and Other Payables (As of June 30, 2025) | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Trade payables | 289,140 | 245,065 | +17.98% | | Collections on behalf of property owners, tenants and property developers | 205,571 | 216,446 | -5.03% | | Deposits | 108,927 | 98,764 | +10.29% | | Salaries and welfare payables | 111,993 | 102,240 | +9.54% | | Consideration payable for acquisition of a subsidiary | 27,492 | 26,848 | +2.40% | | Dividends payable | 80,477 | 21,837 | +268.54% | | **Total current portion** | **844,895** | **702,675** | **+20.24%** | - The increase in trade payables was mainly due to the expansion of business operations[73](index=73&type=chunk) - The increase in salaries and welfare payables was mainly due to the accrual of bonuses during the reporting period[73](index=73&type=chunk) - Consideration payable refers to the fair value of contingent consideration payable to existing shareholders of an acquired subsidiary for the year ended December 31, 2024, to be paid in 2025[44](index=44&type=chunk) [Management Discussion and Analysis](index=20&type=section&id=%E7%AE%A1%E7%90%86%E5%B1%A4%E8%A8%8E%E8%AB%96%E5%8F%8A%E5%88%86%E6%9E%90) This section reviews the company's H1 2025 business performance and financial position, highlighting continued growth in gross floor area under management and projects, particularly in non-residential and independent third-party segments, alongside revenue growth, declining gross margins, and stable liquidity [Business Review](index=20&type=section&id=%E6%A5%AD%E5%8B%99%E5%9B%9E%E9%A1%A7) The company adhered to its "Quality First, Focus on Core Business, Deep Cultivation of Strengths" strategy in H1, achieving a **12.8%** year-on-year increase in gross floor area under management to **49.59 million sq.m.** and expanding to **391** projects, with non-residential properties accounting for **57.4%** and independent third-party projects contributing **90.7%** of new gross floor area [Overview](index=20&type=section&id=%E6%A6%82%E8%BF%B0) Financial Street Property, a leading integrated property management service provider for business properties nationwide, maintained its "Quality First, Focus on Core Business, Deep Cultivation of Strengths" strategy in H1, achieving significant growth in gross floor area under management and projects, with a high proportion of non-residential and independent third-party projects - The Group is one of the leading integrated property management service providers for business properties nationwide, focusing on mid-to-high-end property management services[46](index=46&type=chunk) - In H1 2025, the Group adhered to its business development strategy of "Quality First, Focus on Core Business, Deep Cultivation of Strengths," continuously expanding and consolidating its market presence in first- and second-tier cities and key regions[46](index=46&type=chunk) Gross Floor Area Under Management and Number of Projects (As of June 30, 2025) | Metric | June 30, 2025 | June 30, 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Gross Floor Area Under Management (million sq.m.) | 49.59 | 43.96 | +12.8% | | Number of projects under management | 391 | 326 | +19.94% | | Proportion of non-residential gross floor area under management | 57.4% | N/A | N/A | | Proportion of new gross floor area under management from independent third-party projects in H1 | 90.7% | N/A | N/A | [Property Management and Related Services](index=21&type=section&id=%E7%89%A9%E6%A5%AD%E7%AE%A1%E7%90%86%E5%8F%8A%E7%9B%B8%E9%97%9C%E6%9C%8D%E5%8B%99) As of June 30, 2025, property management and related services covered 26 provinces and cities across seven regions in China, with a total gross floor area under management of **49.59 million sq.m.** across **391** properties, showing growth in both contracted and managed areas, with the North China region having the largest managed area, residential properties accounting for **42.6%**, and lump-sum basis remaining the primary revenue model - The Group's property management and related services cover 26 provinces, municipalities, autonomous regions, and special administrative regions across seven regions in China[48](index=48&type=chunk) Contracted and Gross Floor Area Under Management and Number of Properties (As of June 30, 2025) | Metric | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Contracted gross floor area (thousand sq.m.) | 50,892 | 45,912 | | Gross floor area under management (thousand sq.m.) | 49,586 | 43,956 | | Number of properties under management | 391 | 326 | Gross Floor Area Under Management by Property Type (As of June 30, 2025) | Property Type | June 30, 2025 (thousand sq.m.) | Proportion (%) | June 30, 2024 (thousand sq.m.) | Proportion (%) | | :--- | :--- | :--- | :--- | :--- | | Residential properties | 21,100 | 42.6 | 18,582 | 42.3 | | Public properties, hospitals, educational properties and others | 18,506 | 37.3 | 15,379 | 35.0 | | Office buildings | 8,319 | 16.8 | 8,419 | 19.2 | | Retail commercial buildings and hotels | 461 | 0.9 | 376 | 0.9 | | Integrated complexes | 1,200 | 2.4 | 1,200 | 2.7 | | **Total** | **49,586** | **100** | **43,956** | **100** | Gross Floor Area Under Management by Revenue Model (As of June 30, 2025) | Revenue Model | June 30, 2025 (thousand sq.m.) | Proportion (%) | June 30, 2024 (thousand sq.m.) | Proportion (%) | | :--- | :--- | :--- | :--- | :--- | | Lump sum basis | 45,143 | 91.0 | 39,875 | 90.7 | | Remuneration basis | 4,443 | 9.0 | 4,081 | 9.3 | | **Total** | **49,586** | **100** | **43,956** | **100** | Gross Floor Area Under Management by Property Developer (As of June 30, 2025) | Property Developer | June 30, 2025 (thousand sq.m.) | Proportion (%) | June 30, 2024 (thousand sq.m.) | Proportion (%) | | :--- | :--- | :--- | :--- | :--- | | Developed by Financial Street associates | 20,976 | 42.3 | 20,066 | 45.7 | | Developed by independent third parties | 28,610 | 57.7 | 23,890 | 54.3 | | **Total** | **49,586** | **100** | **43,956** | **100** | [Value-Added Services](index=26&type=section&id=%E5%A2%9E%E5%80%BC%E6%9C%8D%E5%8B%99) The Group's value-added services comprise six segments: operational services, consulting services, asset operation, resource management, customized services, and other income, with its proprietary brand "IZEE" and the "Financial Street Property Life Online" platform enhancing smart operations and customer engagement - The Group's value-added services primarily consist of six segments: operational services, consulting services, asset operation, resource management, customized services, and other income[59](index=59&type=chunk) - The Group has created its own value-added service brand "IZEE," covering real estate brokerage, lifestyle services, business support, and other series of services[59](index=59&type=chunk) - The "Financial Street Property Life Online" platform has been established and continuously improved to enable smart operations and value-added service functions, strengthen value-added service touchpoints, enhance the connection between property services and value-added services, and continuously innovate service content around diverse customer needs to increase customer stickiness[59](index=59&type=chunk) [Future Outlook](index=26&type=section&id=%E6%9C%AA%E4%BE%86%E9%A1%98%E6%99%AF) The Group will continue to prioritize service, consolidate its core strengths in business office and public construction sectors, focus on core first- and second-tier city clusters, and strengthen market expansion, while enhancing service quality through refined operations and exploring unique value-added service systems for business formats to promote long-term stable development - The Group will always adhere to service as its foundation, continuously consolidate and deepen its core strengths in the business office and public construction sectors, further focus on core first- and second-tier city clusters, and strengthen market expansion efforts[60](index=60&type=chunk) - The Group will further solidify service quality through refined operations, standard enhancement, and process optimization, effectively improving customer satisfaction and recognition, thereby building a solid foundation for development[60](index=60&type=chunk) - The Group will explore and build a unique and competitive value-added service system for business formats, comprehensively enhancing its overall competitiveness and promoting the long-term healthy and stable development of the enterprise[60](index=60&type=chunk) [Financial Review](index=26&type=section&id=%E8%B2%A1%E5%8B%99%E5%9B%9E%E9%A1%A7) This section analyzes the company's H1 2025 financial performance, noting a **16.92%** revenue increase driven by property management services, but a decline in catering revenue, increased cost of sales and services leading to lower gross margins, higher administrative and income tax expenses, and a slight decrease in profit and total comprehensive income, while maintaining a stable liquidity position [Revenue](index=26&type=section&id=%E6%94%B6%E5%85%A5) The Group's revenue increased by approximately **16.92%** from **RMB 813.69 million** in H1 2024 to **RMB 951.38 million** in H1 2025, with property management service revenue growing **21.10%** and value-added service revenue growing **4.21%**, but catering service revenue decreased **4.54%** and leasing service revenue decreased **11.86%** - The Group's revenue increased by approximately **16.92%** from approximately **RMB 813.69 million** for the six months ended June 30, 2024, to approximately **RMB 951.38 million** for the six months ended June 30, 2025[61](index=61&type=chunk) Revenue by Service Type (For the six months ended June 30) | Service Type | 2025 (RMB thousand) | Proportion (%) | 2024 (RMB thousand) | Proportion (%) | Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Property management services | 765,341 | 80.45% | 631,968 | 77.67% | +21.10% | | Value-added services | 153,653 | 16.15% | 147,446 | 18.12% | +4.21% | | Leasing services | 4,088 | 0.43% | 4,638 | 0.57% | -11.86% | | Catering services | 28,295 | 2.97% | 29,642 | 3.64% | -4.54% | | **Total** | **951,377** | **100%** | **813,694** | **100%** | **+16.92%** | - Revenue from property management and related services maintained growth, benefiting from an increase in managed projects[62](index=62&type=chunk) - The decrease in catering service revenue resulted from optimizing the catering business model[62](index=62&type=chunk) [Cost of Sales and Services](index=27&type=section&id=%E9%8A%B7%E5%94%AE%E5%8F%8A%E6%9C%8D%E5%8B%99%E6%88%90%E6%9C%AC) The Group's cost of sales and services increased by approximately **19.98%** from **RMB 685.83 million** in H1 2024 to **RMB 822.84 million** in H1 2025, primarily due to business expansion - The Group's cost of sales and services increased by approximately **19.98%** from approximately **RMB 685.83 million** for the six months ended June 30, 2024, to approximately **RMB 822.84 million** for the six months ended June 30, 2025[63](index=63&type=chunk) - Costs increased with business expansion[63](index=63&type=chunk) [Gross Profit](index=28&type=section&id=%E6%AF%9B%E5%88%A9) The Group's overall gross profit slightly increased by **0.52%** to **RMB 128.54 million**, but the overall gross profit margin decreased from **15.71%** to **13.51%**, primarily due to market conditions and increased competitive pressure, with declines in both commercial and non-commercial property gross margins - The Group's overall gross profit increased by approximately **0.52%** from approximately **RMB 127.87 million** for the six months ended June 30, 2024, to approximately **RMB 128.54 million** for the six months ended June 30, 2025[64](index=64&type=chunk) - The overall gross profit margin was approximately **13.51%**, a decrease compared to the overall gross profit margin of **15.71%** for the six months ended June 30, 2024, as gross profit margins continued to be under pressure due to market conditions and increased competitive pressure[64](index=64&type=chunk) Gross Profit and Gross Profit Margin by Service Type (For the six months ended June 30) | Service Type | 2025 Gross Profit (RMB thousand) | 2025 Gross Profit Margin (%) | 2024 Gross Profit (RMB thousand) | 2024 Gross Profit Margin (%) | Gross Profit Margin Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Commercial properties | 94,127 | 21.00 | 96,162 | 22.57 | (1.57) | | Non-commercial properties | 34,731 | 7.31 | 34,065 | 9.52 | (2.21) | | Catering services | (323) | (1.14) | (2,362) | (7.97) | 6.83 | | **Total** | **128,535** | **13.51** | **127,865** | **15.71** | (2.20) | [Administrative Expenses](index=28&type=section&id=%E8%A1%8C%E6%94%BF%E9%96%8B%E6%94%AF) The Group's administrative expenses increased by approximately **12.32%** from **RMB 37.98 million** in H1 2024 to **RMB 42.66 million** in H1 2025, primarily due to the expansion of business scale - The Group's administrative expenses increased by approximately **12.32%** from approximately **RMB 37.98 million** for the six months ended June 30, 2024, to approximately **RMB 42.66 million** for the six months ended June 30, 2025[65](index=65&type=chunk) - Administrative expenses increased with the expansion of business scale[65](index=65&type=chunk) [Income Tax Expense](index=28&type=section&id=%E6%89%80%E5%BE%97%E7%A8%85%E9%96%8B%E6%94%AF) The Group's income tax expense increased from approximately **RMB 20.85 million** in H1 2024 to **RMB 22.17 million** in H1 2025, primarily due to the combined effect of varying applicable tax rates for different companies and tax adjustments - The Group's income tax expense increased from approximately **RMB 20.85 million** for the six months ended June 30, 2024, to approximately **RMB 22.17 million** for the six months ended June 30, 2025[66](index=66&type=chunk) - Despite largely stable total profit, income tax expense slightly increased due to the combined effect of varying applicable tax rates for different companies and tax adjustments[66](index=66&type=chunk) [Profit for the Period](index=29&type=section&id=%E5%A0%B1%E5%91%8A%E6%9C%9F%E5%85%A7%E5%88%A9%E6%BD%A4) The Group's profit for the period decreased by approximately **1.71%** from **RMB 71.35 million** in H1 2024 to **RMB 70.13 million** in H1 2025, primarily due to market conditions, rigid cost increases, and declining gross margins leading to reduced profitability - The Group's profit decreased by approximately **1.71%** from approximately **RMB 71.35 million** for the six months ended June 30, 2024, to approximately **RMB 70.13 million** for the six months ended June 30, 2025[67](index=67&type=chunk) - Profitability decreased due to market conditions, rigid cost increases, and declining gross margins[67](index=67&type=chunk) [Total Comprehensive Income for the Period](index=29&type=section&id=%E5%A0%B1%E5%91%8A%E6%9C%9F%E5%85%A7%E5%85%A8%E9%9D%A2%E6%94%B6%E5%85%A5%E7%B8%BD%E9%A1%8D) The Group's total comprehensive income for the period decreased by approximately **4.40%** from **RMB 71.57 million** in H1 2024 to **RMB 68.42 million** in H1 2025, primarily due to exchange losses on the translation of foreign currency financial statements - The Group's total comprehensive income decreased by approximately **4.40%** from approximately **RMB 71.57 million** for the six months ended June 30, 2024, to approximately **RMB 68.42 million** for the six months ended June 30, 2025[68](index=68&type=chunk) - This change was due to exchange losses on the translation of foreign currency financial statements[68](index=68&type=chunk) [Liquidity, Capital Structure and Financial Resources](index=29&type=section&id=%E6%B5%81%E5%8B%95%E8%B3%87%E9%87%91%E3%80%81%E8%B3%87%E6%9C%AC%E7%B5%90%E6%A7%8B%E5%8F%8A%E8%B2%A1%E5%8B%99%E8%B3%87%E6%BA%90) As of June 30, 2025, the Group's cash and bank balances were approximately **RMB 1,603.17 million**, a slight decrease, while net current assets remained stable, with a current ratio of approximately **2.13 times**, indicating a sound financial position and no borrowings - As of June 30, 2025, the Group's cash and bank balances were approximately **RMB 1,603.17 million**, a decrease of approximately **RMB 36.04 million** compared to approximately **RMB 1,639.21 million** as of December 31, 2024[69](index=69&type=chunk) - The Group's financial position remained sound, with net current assets of approximately **RMB 1,151.26 million** and a current ratio of approximately **2.13 times** (December 31, 2024: approximately 2.31 times)[69](index=69&type=chunk) - As of June 30, 2025, the Group had no borrowings (December 31, 2024: nil)[70](index=70&type=chunk) [Bills Receivable and Trade Receivables and Other Financial Assets Measured at Amortised Cost](index=29&type=section&id=%E6%87%89%E6%94%B6%E7%A5%A8%E6%93%9A%E5%8F%8A%E8%B2%BF%E6%98%93%E6%87%89%E6%94%B6%E6%AC%BE%E9%A0%85%E5%8F%8A%E6%8C%89%E6%攤%E9%8A%B7%E6%88%90%E6%9C%AC%E8%A8%88%E9%87%8F%E4%B9%8B%E5%85%B6%E4%BB%96%E9%87%91%E8%9E%8D%E8%B3%87%E7%94%A2) As of June 30, 2025, bills receivable and trade receivables increased by **32.52%** to **RMB 458.03 million**, primarily due to expanded gross floor area under management, while other financial assets measured at amortised cost increased by approximately **RMB 75.07 million** to **RMB 155.78 million**, mainly due to finance lease receivables from asset operation businesses - As of June 30, 2025, the Group's bills receivable and trade receivables were approximately **RMB 458.03 million**, an increase of **32.52%** compared to approximately **RMB 345.64 million** as of December 31, 2024, mainly due to the increase in trade receivables from property management services resulting from the increase in total gross floor area under management; and trade receivables not yet due for collection[71](index=71&type=chunk) - As of June 30, 2025, the Group's total other financial assets measured at amortised cost were approximately **RMB 155.78 million**, an increase of approximately **RMB 75.07 million** compared to approximately **RMB 80.71 million** as of December 31, 2024, mainly due to finance lease receivables arising from undertaking asset operation businesses[72](index=72&type=chunk) [Trade and Other Payables](index=30&type=section&id=%E8%B2%BF%E6%98%93%E5%8F%8A%E5%85%B6%E4%BB%96%E6%87%89%E4%BB%98%E6%AC%BE%E9%A0%85) As of June 30, 2025, trade payables increased by **17.98%** to **RMB 289.14 million** due to business expansion, salaries and welfare payables increased by **9.54%** to **RMB 111.99 million** due to bonus accruals, and other payables slightly increased by **0.81%** to **RMB 326.35 million** - As of June 30, 2025, the Group's trade payables balance was approximately **RMB 289.14 million**, an increase of approximately **17.98%** compared to approximately **RMB 245.07 million** as of December 31, 2024, mainly due to the expansion of business operations[73](index=73&type=chunk) - As of June 30, 2025, the Group's salaries and welfare payables were approximately **RMB 111.99 million**, an increase of **9.54%** compared to approximately **RMB 102.24 million** as of December 31, 2024, mainly due to the accrual of bonuses during the reporting period[73](index=73&type=chunk) - Other payables increased by approximately **0.81%** from approximately **RMB 323.72 million** as of December 31, 2024, to approximately **RMB 326.35 million** as of June 30, 2025, mainly due to normal business fluctuations[73](index=73&type=chunk) [Use of Proceeds from Listing](index=30&type=section&id=%E4%B8%8A%E5%B8%82%E6%89%80%E5%BE%97%E6%AC%BE%E9%A0%85%E7%94%A8%E9%80%94) The Company's net proceeds from listing were approximately **RMB 648.36 million**, with the Board resolving to reallocate the unused portion to support market expansion, joint ventures, and mergers and acquisitions; as of June 30, 2025, **RMB 191.49 million** had been utilized, with the remaining **RMB 456.87 million** expected to be fully utilized by December 31, 2026 - The net proceeds from the listing were approximately **HKD 710.48 million** (equivalent to approximately **RMB 648.36 million**)[74](index=74&type=chunk) - The Board resolved to change the use of the unutilized portion of the net proceeds to provide sufficient financial support for continuous market expansion, joint ventures, and investment in mergers and acquisitions[74](index=74&type=chunk) Analysis of Use of Net Proceeds from Listing (As of June 30, 2025) | Use | Net Proceeds after Reallocation (RMB million) | Actual Utilized as of June 30, 2025 (RMB million) | Utilized during Reporting Period (RMB million) | Unutilized as of June 30, 2025 (RMB million) | Expected Timeline for Full Utilization of Remaining Balance | | :--- | :--- | :--- | :--- | :--- | :--- | | Seeking strategic acquisition and investment opportunities and establishing new branches and subsidiaries to expand the Group's business scale | 517.87 | 142.89 | 0.16 | 374.98 | On or before December 31, 2026 | | Developing the Group's value-added service business | 49.12 | 40.63 | — | 8.49 | On or before December 31, 2026 | | Construction and upgrade of information technology and smart facility systems | 16.53 | 7.97 | 0.33 | 8.56 | On or before December 31, 2026 | | The Group's working capital and general corporate purposes | 64.84 | — | — | 64.84 | On or before December 31, 2026 | | **Total** | **648.36** | **191.49** | **0.49** | **456.87** | | [Pledge of Assets](index=31&type=section&id=%E8%B3%87%E7%94%A2%E6%8A%B5%E6%8A%BC) As of June 30, 2025, the Group had no assets pledged - As of June 30, 2025, the Group had no assets pledged (December 31, 2024: nil)[77](index=77&type=chunk) [Material Acquisitions and Disposals of Assets](index=31&type=section&id=%E9%87%8D%E5%A4%A7%E6%94%B6%E8%B3%BC%E5%8F%8A%E8%B3%87%E7%94%A2%E5%87%BA%E5%94%AE) For the six months ended June 30, 2025, the Group had no material acquisitions or disposals of assets - For the six months ended June 30, 2025, the Group had no material acquisitions or disposals of assets[78](index=78&type=chunk) [Material Investments Held, Disposals and Future Plans for Material Investments in Capital Assets](index=32&type=section&id=%E6%8C%81%E6%9C%89%E9%87%8D%E5%A4%A7%E6%8A%95%E8%B3%87%E3%80%81%E5%87%BA%E5%94%AE%E5%8F%8A%E6%9C%89%E9%97%9C%E8%B3%87%E6%9C%AC%E8%B3%87%E7%94%A2%E4%B9%8B%E9%87%8D%E5%A4%A7%E6%8A%95%E8%B3%87%E7%9A%84%E6%9C%AA%E4%BE%86%E8%A8%88%E5%8A%83) For the six months ended June 30, 2025, the Group had no material investments, disposals, or additions to capital assets, nor any related plans - For the six months ended June 30, 2025, the Group had no material investments, disposals, or additions to capital assets, nor any related plans[79](index=79&type=chunk) [Gearing Ratio](index=32&type=section&id=%E8%B3%87%E7%94%A2%E8%B2%A0%E5%82%B5%E6%AF%94%E7%8E%87) As of June 30, 2025, the Group's gearing ratio was **0.45**, an increase from **0.41** as of December 31, 2024, with the capital gearing ratio not applicable due to the absence of interest-bearing borrowings - As of June 30, 2025, our gearing ratio was **0.45**, compared to **0.41** as of December 31, 2024[80](index=80&type=chunk) - As of June 30, 2025, and December 31, 2024, the Group had no interest-bearing borrowings, thus the capital gearing ratio is not applicable[80](index=80&type=chunk) [Contingent Liabilities](index=32&type=section&id=%E6%88%96%E7%84%B6%E8%B2%A0%E5%82%B5) As of June 30, 2025, the Group had no contingent liabilities - As of June 30, 2025, the Group had no contingent liabilities (December 31, 2024: nil)[81](index=81&type=chunk) [Financial Policy](index=32&type=section&id=%E8%B2%A1%E5%8B%99%E6%94%BF%E7%AD%96) The Group adopts a prudent financial management approach, closely monitoring its liquidity position to ensure that the liquidity structure of its assets, liabilities, and commitments meets funding requirements - The Group adopts a prudent financial management approach and has maintained a sound liquidity position throughout the year[82](index=82&type=chunk) - The Board closely monitors the Group's liquidity position to ensure that the liquidity structure of the Group's assets, liabilities, and commitments can meet its funding requirements at all times[82](index=82&type=chunk) [Foreign Exchange Risk and Other Risks](index=32&type=section&id=%E5%A4%96%E5%8C%AF%E9%A2%A8%E9%9A%AA%E5%8F%8A%E5%85%B6%E4%BB%96%E9%A2%A8%E9%9A%AA) Operating primarily in China and Hong Kong with transactions in RMB and HKD, the Group faces foreign exchange risk and currently has no hedging policy but monitors and considers hedging; the property management industry is also exposed to macroeconomic and real estate market uncertainties and intense competition, which the Group mitigates by enhancing service quality - The Group's business is primarily conducted in RMB and HKD, with foreign exchange risk arising from foreign currency deposit accounts and commercial transactions, recognized assets, and liabilities denominated in HKD[83](index=83&type=chunk) - The Group currently has no foreign currency hedging policy, but management closely monitors these risks and considers hedging significant foreign currency exposures when necessary[83](index=83&type=chunk) - The property management industry is closely related to China's macroeconomic development and the real estate industry, and the Group may be affected by uncertainties in the aforementioned external environment; facing intense market competition, the Group continuously strengthens service quality and enhances its competitiveness to minimize the impact of such external risks on its business[84](index=84&type=chunk) [Employees and Welfare Policy](index=33&type=section&id=%E5%93%A1%E5%B7%A5%E5%8F%8A%E7%A6%8F%E5%88%A9%E6%94%BF%E7%AD%96) As of June 30, 2025, the Group employed **5,283** staff, with remuneration based on performance, skills, knowledge, experience, and market trends, supplemented by discretionary bonuses and training programs to enhance skills and productivity - As of June 30, 2025, the Group employed **5,283** staff[85](index=85&type=chunk) - Employee remuneration is determined based on employee performance, skills, knowledge, experience, and market trends; the Group regularly reviews its remuneration policies and schemes and makes necessary adjustments to align them with industry remuneration levels[85](index=85&type=chunk) - The Group provides training to its employees to equip new staff with basic skills to perform their duties and to enhance or improve their production techniques[85](index=85&type=chunk) [Other Information](index=33&type=section&id=%E5%85%B6%E4%BB%96%E8%B3%87%E6%96%99) This section covers significant corporate governance and compliance information for the reporting period and post-reporting period, including changes in the Board composition, amendments to the Articles of Association, changes in joint company secretaries, trading of listed securities, compliance with corporate governance and securities dealing codes, and the work of the audit committee [Significant Matters](index=33&type=section&id=%E9%87%8D%E8%A6%81%E4%BA%8B%E9%A0%85) During the reporting period, the Board composition changed with Ms. Lv Min elected as an employee representative Director, several Directors retired or were re-elected/appointed, the Articles of Association were amended and approved by shareholders, and Mr. Chen Xi resigned as joint company secretary, with Ms. Zhang Jing appointed - Ms. Lv Min was elected as an employee representative Director of the Company, effective from the date of the annual general meeting on June 5, 2025; Ms. Xue Rui, Ms. Hu Yuxia, and Mr. Li Liang retired as Directors[86](index=86&type=chunk) - Mr. Sun Jie and Mr. Song Ronghua were re-elected as executive Directors, Mr. Guo Mingming was re-elected as a non-executive Director, Mr. Song Baocheng, Ms. Tong Yan, and Ms. Lu Qing were re-elected as independent non-executive Directors, and Mr. Meng Chunying and Mr. Han Fengxiang were appointed as non-executive Directors[86](index=86&type=chunk) - Certain provisions of the Articles of Association were amended and approved by shareholders at the annual general meeting held on June 5, 2025[87](index=87&type=chunk) - Mr. Chen Xi resigned as joint company secretary of the Company, effective June 5, 2025, and Ms. Zhang Jing was appointed as joint company secretary on the same day[88](index=88&type=chunk) [Events After the Reporting Period](index=34&type=section&id=%E5%A0%B1%E5%91%8A%E6%9C%9F%E5%BE%8C%E4%BA%8B%E9%A0%85) The Group had no other significant events after the reporting period - The Group had no other significant events after the reporting period[89](index=89&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities or Redeemable Securities](index=34&type=section&id=%E8%B3%BC%E8%B2%B7%E3%80%81%E5%87%BA%E5%94%AE%E6%88%96%E8%B4%96%E5%9B%9E%E6%9C%AC%E5%85%AC%E5%8F%B8%E4%B9%8B%E4%B8%8A%E5%B8%82%E8%AD%89%E5%88%B8%E6%88%96%E5%8F%AF%E8%B4%96%E5%9B%9E%E8%AD%89%E5%88%B8) For the six months ended June 30, 2025, neither the Company nor its subsidiaries purchased, sold, or redeemed any of the Company's listed securities, and no treasury shares were held as of that date - For the six months ended June 30, 2025, neither the Company nor its subsidiaries purchased, sold, or redeemed any of the Company's listed securities at any time[90](index=90&type=chunk) - As of June 30, 2025, the Company held no treasury shares[90](index=90&type=chunk) [Compliance with Corporate Governance Code](index=34&type=section&id=%E9%81%B5%E5%AE%88%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB%E5%AE%88%E5%88%99) The Company is committed to high standards of corporate governance to address stakeholder needs and promote sustainable development, having complied with the Code Provisions of Appendix C1 "Corporate Governance Code" of the Listing Rules throughout the reporting period - The Board is committed to achieving high standards of corporate governance to address the needs of the Group's stakeholders, build their confidence in the Group, and enable the Group's sustainable development[91](index=91&type=chunk) - During the reporting period, the Company has complied with the Code Provisions set out in Appendix C1 "Corporate Governance Code" of the Listing Rules[92](index=92&type=chunk) [Compliance with Securities Dealing Code](index=35&type=section&id=%E9%81%B5%E5%AE%88%E8%AD%89%E5%88%B8%E4%BA%A4%E6%98%93%E5%AE%88%E5%88%99) The Company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers in Appendix C3 of the Listing Rules, and all Directors and Supervisors have confirmed compliance with the Model Code during the reporting period - The Company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers in Appendix C3 of the Listing Rules as the code of conduct and rules governing securities transactions by all Directors and Supervisors of the Company[93](index=93&type=chunk) - Following specific enquiries made to all Directors and Supervisors, they have confirmed that they have complied with the required standards set out in the Model Code during the period from January 1, 2025, and up to the date of their retirement as Supervisors (as the case may be) or June 30, 2025 (as the case may be)[93](index=93&type=chunk) [Audit Committee](index=35&type=section&id=%E5%AF%A9%E6%A0%B8%E5%A7%94%E5%93%A1%E6%9C%83) The Audit Committee, comprising three members with Ms. Tong Yan as Chair, has reviewed the unaudited interim results and interim report for the six months ended June 30, 2025, which were also reviewed by the independent auditor, Grant Thornton Hong Kong Limited - The Audit Committee comprises three members, namely Ms. Tong Yan (Independent Non-executive Director), Mr. Guo Mingming (Non-executive Director), and Mr. Song Baocheng (Independent Non-executive Director); Ms. Tong Yan is the Chair of the Audit Committee[94](index=94&type=chunk) - The Audit Committee has reviewed the unaudited interim results and interim report for the six months ended June 30, 2025[94](index=94&type=chunk) - The Company's independent auditor, Grant Thornton Hong Kong Limited, has reviewed the unaudited condensed consolidated interim financial statements for the six months ended June 30, 2025, in accordance with Hong Kong Standard on Review Engagements 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Hong Kong Institute of Certified Public Accountants[94](index=94&type=chunk) [Interim Dividend](index=35&type=section&id=%E4%B8%AD%E6%9C%9F%E8%82%A1%E6%81%AF) The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025 - The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025 (for the six months ended June 30, 2024: nil)[95](index=95&type=chunk) [Publication of Interim Results and Interim Report](index=35&type=section&id=%E5%88%8A%E7%99%BB%E4%B8%AD%E6%9C%9F%E6%A5%AD%E7%B8%BE%E5%8F%8A%E4%B8%AD%E6%9C%9F%E5%A0%B1%E5%91%8A) This announcement has been published on the HKEX website and the Company's website; the interim report containing all applicable Listing Rules requirements will be dispatched to shareholders and published on the aforementioned websites in due course - This announcement is available on the HKEX website (http://www.hkexnews.hk) and the Company's website (http://www.jrjlife.com)[96](index=96&type=chunk) - The Company's interim report for the six months ended June 30, 2025, containing all information required by the applicable Listing Rules, will be dispatched to shareholders who have indicated their wish to receive printed versions of company communications and published on the aforementioned websites in due course[96](index=96&type=chunk) [Acknowledgements](index=36&type=section&id=%E8%87%B4%E8%AC%9D) Chairman Sun Jie, on behalf of the Board, expresses gratitude to all colleagues for their diligent work, dedication, and integrity, and thanks shareholders, customers, banks, and other parties for their trust and support - Chairman Sun Jie, on behalf of the Board, expresses gratitude to all colleagues for their diligent work, dedication, and integrity[97](index=97&type=chunk) - Appreciation is extended to all shareholders, customers, banks, and other parties for their friendly trust and support[97](index=97&type=chunk) [Board Members](index=36&type=section&id=%E8%91%A3%E4%BA%8B%E6%9C%83%E6%88%90%E5%93%A1) As of the date of this announcement, the Board of Directors includes Executive Directors Mr. Sun Jie and Mr. Song Ronghua; Non-executive Directors Mr. Meng Chunying, Mr. Han Fengxiang, and Mr. Guo Mingming; Independent Non-executive Directors Mr. Song Baocheng, Ms. Tong Yan, and Ms. Lu Qing; and Employee Representative Director Ms. Lv Min - As of the date of this announcement, the Board of Directors comprises Executive Directors Mr. Sun Jie and Mr. Song Ronghua; Non-executive Directors Mr. Meng Chunying, Mr. Han Fengxiang, and Mr. Guo Mingming; Independent Non-executive Directors Mr. Song Baocheng, Ms. Tong Yan, and Ms. Lu Qing; and Employee Representative Director Ms. Lv Min[98](index=98&type=chunk)

[Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=2&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) The statement details the company's financial performance, showing a significant decline in revenue and profit for the period, alongside increased finance costs [Profit or Loss Overview](index=2&type=section&id=Profit%20or%20Loss%20Summary) Revenue decreased by 22.2% to HKD 256,127 thousand, with profit for the period down 62.1% to HKD 3,569 thousand, primarily due to lower revenue and gross profit, alongside increased finance costs Profit or Loss Summary (HKD thousands) | Indicator | June 30, 2025 (HKD thousands) | June 30, 2024 (HKD thousands) | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 256,127 | 329,077 | -22.2% | | Cost of sales | (242,661) | (307,814) | -21.2% | | Gross profit | 13,466 | 21,263 | -36.7% | | Profit from operations | 9,648 | 17,119 | -43.7% | | Finance costs | (5,964) | (4,221) | +41.3% | | Profit before tax | 3,684 | 12,898 | -71.4% | | Income tax expense | (115) | (3,388) | -96.6% | | Profit for the period | 3,569 | 9,510 | -62.5% | | Profit for the period attributable to owners of the company | 3,590 | 9,488 | -62.2% | | Basic and diluted earnings per share (HK cents) | 0.37 | 0.97 | -61.9% | - Total comprehensive income for the period was **HKD 5,838 thousand**, a **26.6% decrease** from HKD 7,957 thousand in the prior year period[5](index=5&type=chunk) [Condensed Consolidated Statement of Financial Position](index=3&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) This statement presents the company's assets, liabilities, and equity, indicating slight growth in total assets and equity, but also an increase in liabilities [Financial Position Overview](index=3&type=section&id=Financial%20Position%20Summary) As of June 30, 2025, total assets, net current assets, and total equity increased, while current and total liabilities also saw a rise Financial Position Summary (HKD thousands) | Indicator | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Non-current assets | 6,385 | 6,746 | -5.3% | | Current assets | 407,849 | 378,680 | +7.7% | | Current liabilities | 326,209 | 302,983 | +7.7% | | Net current assets | 81,640 | 75,697 | +7.9% | | Total assets less current liabilities | 88,025 | 82,443 | +6.8% | | Non-current liabilities | 210 | 466 | -54.9% | | Net assets | 87,815 | 81,977 | +7.1% | | Total equity | 87,815 | 81,977 | +7.1% | - Bank balances and cash significantly increased by **167%** from **HKD 3,572 thousand** on December 31, 2024, to **HKD 9,537 thousand** on June 30, 2025[6](index=6&type=chunk) - Trade and other receivables increased by **4.1%** to **HKD 322,538 thousand**, while trade and other payables decreased by **7.8%** to **HKD 87,889 thousand**[6](index=6&type=chunk) [Condensed Consolidated Statement of Changes in Equity](index=4&type=section&id=Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) This statement outlines the changes in the company's total equity, primarily driven by profit and total comprehensive income for the period [Equity Changes Overview](index=4&type=section&id=Equity%20Changes%20Summary) Total equity increased from HKD 81,977 thousand on January 1, 2025, to HKD 87,815 thousand by June 30, 2025, driven by profit and total comprehensive income for the period Equity Changes Summary (HKD thousands) | Indicator | June 30, 2025 (HKD thousands) | January 1, 2025 (HKD thousands) | Change (HKD thousands) | | :--- | :--- | :--- | :--- | | Share capital | 4,910 | 4,910 | 0 | | Share premium | 190,049 | 190,049 | 0 | | Exchange fluctuation reserve | (14,042) | (16,256) | +2,214 | | Accumulated losses | (95,032) | (98,622) | +3,590 | | Total reserves | 80,975 | 75,171 | +5,804 | | Non-controlling interests | 1,930 | 1,896 | +34 | | Total equity | 87,815 | 81,977 | +5,838 | - Profit and total comprehensive income for the period amounted to **HKD 5,838 thousand**, with **HKD 5,804 thousand** attributable to owners of the company[7](index=7&type=chunk) [Condensed Consolidated Statement of Cash Flows](index=5&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) This statement summarizes cash inflows and outflows from operating, investing, and financing activities, highlighting a net increase in cash and cash equivalents [Cash Flow Overview](index=5&type=section&id=Cash%20Flow%20Summary) Net cash used in operating activities significantly increased, but a substantial improvement in net cash from financing activities led to a net increase in cash and cash equivalents for the six months ended June 30, 2025 Cash Flow Summary (HKD thousands) | Indicator | June 30, 2025 (HKD thousands) | June 30, 2024 (HKD thousands) | Change (HKD thousands) | | :--- | :--- | :--- | :--- | | Net cash used in operating activities | (21,473) | (9,943) | -11,530 | | Net cash from investing activities | 1 | 5 | -4 | | Net cash from/(used in) financing activities | 25,230 | (2,238) | +27,468 | | Net increase/(decrease) in cash and cash equivalents | 3,758 | (12,176) | +15,934 | | Effect of exchange rate changes | 2,207 | 65 | +2,142 | | Bank balances and cash at June 30 | 9,537 | 12,224 | -2,687 | - Cash flow from financing activities shifted from a net outflow in the prior year to a net inflow in the current period, primarily driving the increase in cash and cash equivalents[9](index=9&type=chunk) [Notes to the Condensed Consolidated Interim Financial Statements](index=6&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Interim%20Financial%20Statements) These notes provide detailed explanations of the accounting policies, financial instrument fair values, segment information, and other significant financial disclosures [1. General Information and Basis of Preparation](index=6&type=section&id=1.%20General%20Information%20and%20Basis%20of%20Preparation) The company, registered in Bermuda and listed in Hong Kong, focuses on cross-border business and finance lease services, with the latter now only managing existing matters; financial statements are presented in HKD under HKAS 34 - The company's principal businesses are cross-border trade and the provision of finance lease and consulting services, with new finance lease business discontinued, only involving the winding up and compliance handling of existing matters[11](index=11&type=chunk) - The company's functional currency is RMB, but the consolidated financial statements are presented in HKD[11](index=11&type=chunk) - The financial statements are prepared in accordance with Appendix 16 of the Listing Rules of the Stock Exchange and HKAS 34[11](index=11&type=chunk) [2. Significant Accounting Policies](index=7&type=section&id=2.%20Significant%20Accounting%20Policies) The condensed consolidated interim financial statements are prepared on a historical cost basis, with no significant impact from new or revised HKFRSs adopted this period - The financial statements are prepared on a historical cost basis, except for certain financial instruments[13](index=13&type=chunk) - New and revised HKFRSs adopted in the current period have no significant impact on the Group's financial statements[13](index=13&type=chunk) [3. Fair Value Measurement](index=7&type=section&id=3.%20Fair%20Value%20Measurement) Fair value measurement employs a three-level hierarchy, with all the Group's financial assets (listed equity securities) categorized as Level 1, based on unadjusted quoted prices in active markets Financial Instruments Fair Value (HKD thousands) | Financial Instrument | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | Fair Value Hierarchy | | :--- | :--- | :--- | :--- | | Financial assets at fair value through profit or loss — Listed equity securities | 56 | 66 | Level 1 | - Level 1 inputs refer to unadjusted quoted prices in active markets for identical assets or liabilities[17](index=17&type=chunk) [4. Revenue](index=8&type=section&id=4.%20Revenue) Revenue for the period primarily stemmed from cross-border business, with a significant reduction in finance lease and consulting service revenue, indicating business restructuring Revenue Sources (HKD thousands) | Revenue Source | June 30, 2025 (HKD thousands) | June 30, 2024 (HKD thousands) | Change (HKD thousands) | | :--- | :--- | :--- | :--- | | Cross-border business | 256,127 | 328,950 | -72,823 | | Interest income from finance lease and consulting services | – | 15 | -15 | | Other consulting service income | – | 112 | -112 | | **Total Revenue** | **256,127** | **329,077** | **-72,950** | - In the first half of 2025, finance lease and consulting services generated no operating income, indicating that new business in this segment has largely ceased[18](index=18&type=chunk) [5. Segment Information](index=8&type=section&id=5.%20Segment%20Information) The Group's two reportable segments are cross-border business and finance lease/consulting services; cross-border business is the main revenue and profit driver, with finance lease contributions significantly reduced - The Group's reportable and operating segments include: (i) cross-border business; and (ii) provision of finance lease and consulting services[21](index=21&type=chunk) [Segment Revenue and Results](index=9&type=section&id=Segment%20Revenue%20and%20Results) Cross-border business was the sole revenue source, with segment profit down 36% year-on-year, while the finance lease and consulting services segment continued to incur losses Segment Revenue and Results (HKD thousands) | Segment | June 30, 2025 (HKD thousands) | June 30, 2024 (HKD thousands) | Change (HKD thousands) | | :--- | :--- | :--- | :--- | | **Revenue** | | | | | Cross-border business | 256,127 | 328,950 | -72,823 | | Finance lease and consulting services | – | 15 | -15 | | Other | – | 112 | -112 | | **Total Revenue** | **256,127** | **329,077** | **-72,950** | | **Segment Profit/(Loss)** | | | | | Cross-border business | 12,987 | 20,308 | -7,321 | | Finance lease and consulting services | (262) | (261) | -1 | | Other | (91) | (112) | +21 | | **Total Segment Profit** | **12,634** | **19,935** | **-7,301** | - Segment profit is not allocated for fair value changes of financial assets at fair value through profit or loss, certain selling and distribution expenses, central administrative costs, directors' remuneration, certain other expenses, and finance costs[25](index=25&type=chunk) [Segment Assets and Liabilities](index=10&type=section&id=Segment%20Assets%20and%20Liabilities) Cross-border business segment assets and liabilities both increased, whereas the finance lease business segment maintained a smaller scale of assets and liabilities Segment Assets and Liabilities (HKD thousands) | Segment | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | Change (HKD thousands) | | :--- | :--- | :--- | :--- | | **Segment Assets** | | | | | Cross-border trade of nutritional food and health products | 382,312 | 366,390 | +15,922 | | Finance lease business | 10,909 | 3,764 | +7,145 | | Other | 4,638 | 5,653 | -1,015 | | **Total Segment Assets** | **397,859** | **375,807** | **+22,052** | | **Segment Liabilities** | | | | | Cross-border trade of nutritional food and health products | 89,225 | 89,302 | -77 | | Finance lease business | 181 | 139 | +42 | | Other | 4,388 | 10,151 | -5,763 | | **Total Segment Liabilities** | **93,794** | **99,592** | **-5,798** | - Unallocated corporate assets and liabilities significantly increased, reflecting centralized management of company-level assets and liabilities[26](index=26&type=chunk) [Geographical Information](index=11&type=section&id=Geographical%20Information) The Group operates in Hong Kong and China, with Hong Kong as the main revenue source and non-current assets primarily located in China Geographical Information (HKD thousands) | Region | External Customer Revenue June 30, 2025 (HKD thousands) | External Customer Revenue June 30, 2024 (HKD thousands) | Non-current Assets June 30, 2025 (HKD thousands) | Non-current Assets December 31, 2024 (HKD thousands) | | :--- | :--- | :--- | :--- | :--- | | China | – | 127 | 5,634 | 5,694 | | Hong Kong | 256,127 | 328,950 | 751 | 1,052 | | **Total** | **256,127** | **329,077** | **6,385** | **6,746** | - Revenue from external customers in China was zero for the period, with Hong Kong contributing all external customer revenue[27](index=27&type=chunk) [6. Finance Costs](index=11&type=section&id=6.%20Finance%20Costs) Finance costs surged by 41.3%, mainly driven by increased interest on bank and other borrowings, corporate bonds, and acceptance bills Finance Costs Sources (HKD thousands) | Finance Cost Source | June 30, 2025 (HKD thousands) | June 30, 2024 (HKD thousands) | Change (HKD thousands) | | :--- | :--- | :--- | :--- | | Interest on bank and other borrowings | 1,942 | 11 | +1,931 | | Interest on shareholder loans | 2,375 | 2,375 | 0 | | Interest on lease liabilities | 26 | 10 | +16 | | Interest on corporate bonds | 316 | 1,262 | -946 | | Interest on acceptance bills | 1,305 | 563 | +742 | | **Total Finance Costs** | **5,964** | **4,221** | **+1,743** | - Interest on bank and other borrowings surged from **HKD 11 thousand** last year to **HKD 1,942 thousand** this period, a primary driver of increased finance costs[28](index=28&type=chunk) [7. Income Tax Expense](index=12&type=section&id=7.%20Income%20Tax%20Expense) Income tax expense significantly decreased by 96.6% to HKD 115 thousand, primarily due to a reduction in Hong Kong profits tax Income Tax Expense (HKD thousands) | Tax Type | June 30, 2025 (HKD thousands) | June 30, 2024 (HKD thousands) | Change (HKD thousands) | | :--- | :--- | :--- | :--- | | Hong Kong profits tax | 115 | 3,388 | -3,273 | | **Total Income Tax Expense** | **115** | **3,388** | **-3,273** | - Hong Kong subsidiaries are subject to a tax rate of **16.5%**, with the first **HKD 2 million** of assessable profits taxed at **8.25%** for some companies; Chinese subsidiaries are taxed at **25%**[29](index=29&type=chunk) [8. Profit for the Period](index=12&type=section&id=8.%20Profit%20for%20the%20Period) Profit for the period is reported after deducting depreciation of property, plant and equipment, right-of-use assets, and unrealized losses on financial assets at fair value through profit or loss Deductions from Profit for the Period (HKD thousands) | Deduction Item | June 30, 2025 (HKD thousands) | June 30, 2024 (HKD thousands) | | :--- | :--- | :--- | | Depreciation of property, plant and equipment | 196 | 202 | | Depreciation of right-of-use assets | 301 | 332 | | Unrealized losses on financial assets at fair value through profit or loss | 10 | 11 | [9. Dividends](index=12&type=section&id=9.%20Dividends) For the reporting period ended June 30, 2025, no dividends were paid, declared, or proposed by the company - No dividends were paid, declared, or proposed during or since the end of the reporting period[32](index=32&type=chunk) [10. Earnings Per Share](index=13&type=section&id=10.%20Earnings%20Per%20Share) Basic and diluted earnings per share were **HKD 0.37 cents**, a **61.9% decrease** from the prior year, with no diluted adjustment due to the anti-dilutive effect of outstanding convertible bonds[34](index=34&type=chunk)[35](index=35&type=chunk) Earnings Per Share (HKD thousands, except per share data) | Indicator | June 30, 2025 (HKD thousands) | June 30, 2024 (HKD thousands) | | :--- | :--- | :--- | | Profit attributable to owners of the company | 3,590 | 9,488 | | Weighted average number of ordinary shares (thousands) | 982,000 | 982,000 | | Basic and diluted earnings per share (HK cents) | 0.37 | 0.97 | - Outstanding convertible bonds had an anti-dilutive effect, thus no diluted adjustment was made to the basic earnings per share amount[35](index=35&type=chunk) [11. Property, Plant and Equipment](index=13&type=section&id=11.%20Property%2C%20Plant%20and%20Equipment) The Group incurred no acquisition costs for property, plant and equipment and made no disposals of related assets during the period - For the six months ended June 30, 2025, the Group incurred approximately **zero HKD** in costs for the acquisition of property, plant and equipment[36](index=36&type=chunk) - The net book value of property, plant and equipment disposed of during the period was approximately **zero HKD**[36](index=36&type=chunk) [12. Interests in a Joint Venture](index=13&type=section&id=12.%20Interests%20in%20a%20Joint%20Venture) The Group holds a **49% interest** in Hebao (Shenzhen) Information Technology Co., Ltd., which has suspended operations, with no capital injected during the period Joint Venture Interests | Entity Name | Entity Form | Place of Incorporation | Registered Capital | Group's Interest (June 30, 2025) | Principal Business | | :--- | :--- | :--- | :--- | :--- | :--- | | Hebao (Shenzhen) Information Technology Co., Ltd. | Incorporated | China | RMB 20,000,000 | 49% | Suspended operations | - As of June 30, 2025, and up to the date of this announcement, the Group has not injected any capital into the joint venture[37](index=37&type=chunk) [13. Trade and Other Receivables](index=14&type=section&id=13.%20Trade%20and%20Other%20Receivables) Total trade and other receivables increased, with a slight rise in impairment provisions, and trade receivables over 60 days constituting the largest portion Trade and Other Receivables (HKD thousands) | Receivable Type | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | Change (HKD thousands) | | :--- | :--- | :--- | :--- | | Trade receivables | 339,971 | 334,723 | +5,248 | | Less: Provision for impairment losses | (35,293) | (34,860) | -433 | | **Net Trade Receivables** | **304,678** | **299,863** | **+4,815** | | Other receivables | 28,519 | 20,576 | +7,943 | | Less: Provision for impairment losses | (12,020) | (12,020) | 0 | | **Net Other Receivables** | **16,499** | **8,556** | **+7,943** | | Deposits and prepayments | 1,361 | 1,361 | 0 | | **Total** | **322,538** | **309,780** | **+12,758** | Ageing Analysis of Trade Receivables (HKD thousands) | Trade Receivables Ageing | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | | :--- | :--- | :--- | | 0 to 30 days | 28,621 | 28,337 | | 31 to 60 days | 38,853 | 57,755 | | Over 60 days | 237,204 | 213,771 | | **Total** | **304,678** | **299,863** | - The Group does not charge interest or hold any collateral for these balances[38](index=38&type=chunk) [14. Financial Assets at Fair Value Through Profit or Loss](index=15&type=section&id=14.%20Financial%20Assets%20at%20Fair%20Value%20Through%20Profit%20or%20Loss) The Group's financial assets at fair value through profit or loss are mainly Hong Kong listed equity securities, which experienced a slight value decrease Financial Assets at Fair Value Through Profit or Loss (HKD thousands) | Financial Asset Type | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | | :--- | :--- | :--- | | Hong Kong listed equity securities | 56 | 66 | [15. Trade and Other Payables](index=15&type=section&id=15.%20Trade%20and%20Other%20Payables) Total trade and other payables decreased, primarily driven by reductions in trade payables and accrued interest Trade and Other Payables (HKD thousands) | Payable Type | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | Change (HKD thousands) | | :--- | :--- | :--- | :--- | | Trade payables | 57,768 | 61,963 | -4,195 | | Other payables | 18,078 | 22,488 | -4,410 | | Accrued interest | 11,875 | 10,733 | +1,142 | | VAT payable | 168 | 171 | -3 | | **Total** | **87,889** | **95,355** | **-7,466** | Ageing Analysis of Trade Payables (HKD thousands) | Trade Payables Ageing | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | | :--- | :--- | :--- | | 0 to 30 days | 33,609 | 32,346 | | 31 to 60 days | 24,159 | 564 | | Over 60 days | – | 29,053 | | **Total** | **57,768** | **61,963** | [16. Loan from Ultimate Holding Company](index=16&type=section&id=16.%20Loan%20from%20Ultimate%20Holding%20Company) The loan from the ultimate holding company remained at **HKD 50,000 thousand**, bearing a fixed annual interest rate of **9.5%**, and is exposed to foreign currency risk Loan from Ultimate Holding Company (HKD thousands) | Loan Type | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | | :--- | :--- | :--- | | Other borrowings repayable on demand | 50,000 | 50,000 | - The loan from the ultimate holding company bears a fixed annual interest rate of **9.5%**[42](index=42&type=chunk) - The loan is denominated in HKD, which is not the functional currency of the relevant Group entities, thus exposing it to foreign currency risk[42](index=42&type=chunk) [17. Lease Liabilities](index=17&type=section&id=17.%20Lease%20Liabilities) Total lease liabilities decreased, reflecting reductions in both current and non-current lease obligations Lease Liabilities (HKD thousands) | Lease Liability Type | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | | :--- | :--- | :--- | | Current liabilities | 557 | 593 | | Non-current liabilities | 210 | 466 | | **Total** | **767** | **1,059** | [18. Bank and Other Borrowings](index=17&type=section&id=18.%20Bank%20and%20Other%20Borrowings) Total bank and other borrowings significantly decreased due to the full repayment of other loans; remaining bank borrowings are RMB-denominated with a fixed **9%** annual interest rate Bank and Other Borrowings (HKD thousands) | Borrowing Type | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | Change (HKD thousands) | | :--- | :--- | :--- | :--- | | Bank loans | 1,576 | 1,597 | -21 | | Other loans | – | 4,992 | -4,992 | | **Total** | **1,576** | **6,589** | **-5,013** | - As of June 30, 2025, bank borrowings are denominated in RMB, repayable within one year, and bear a fixed annual interest rate of **9%**[43](index=43&type=chunk) - As of June 30, 2025, other loans have been fully repaid[44](index=44&type=chunk) [19. Acceptance Bills](index=18&type=section&id=19.%20Acceptance%20Bills) Total acceptance bills significantly increased, bearing annual interest rates from **3% to 7%**; post-period, some matured with preliminary settlement agreements reached Acceptance Bills Movement (HKD thousands) | Acceptance Bills Movement | Amount (HKD thousands) | | :--- | :--- | | As at January 1, 2024 | 33,755 | | New acceptance bills issued | 56,250 | | Estimated interest deducted | 1,551 | | As at December 31, 2024 and January 1, 2025 | 91,556 | | New acceptance bills issued | 34,000 | | Estimated interest deducted | 1,305 | | As at June 30, 2025 | 126,861 | - Acceptance bills bear annual interest rates ranging from **3% to 7%** and mature 12 to 24 months after their issue dates[45](index=45&type=chunk) - Subsequent to June 30, 2025, approximately **HKD 39,968 thousand** of acceptance bills matured, and preliminary settlement agreements were reached with holders on July 5, 2025[46](index=46&type=chunk) - Acceptance bills are unsecured, denominated in HKD, and exposed to foreign currency risk[47](index=47&type=chunk) [20. Corporate Bonds](index=18&type=section&id=20.%20Corporate%20Bonds) Issued unlisted corporate bonds totaled **HKD 45,000 thousand** at **5% to 7%** annual interest; most defaulted by period-end, with preliminary settlement agreements reached post-period - As of June 30, 2025, the total principal amount of issued unlisted corporate bonds was approximately **HKD 45,000 thousand**, bearing annual interest rates ranging from **5% to 7%**[48](index=48&type=chunk) - As of June 30, 2025, approximately **HKD 51,831 thousand** of corporate bonds were in default, leading to demands for immediate repayment[48](index=48&type=chunk) - On July 5, 2025, the Group reached preliminary settlement agreements with corporate bondholders to repay the defaulted corporate bonds[48](index=48&type=chunk) - Corporate bonds are unsecured, denominated in HKD, and exposed to foreign currency risk[48](index=48&type=chunk) [21. Share Capital](index=19&type=section&id=21.%20Share%20Capital) The company's issued share capital remained unchanged as of June 30, 2025 Share Capital (HKD thousands, except share numbers) | Share Capital Type | Number of Shares (thousands) | Share Capital (HKD thousands) | | :--- | :--- | :--- | | Authorised share capital (ordinary shares of HKD 0.005 each) | 20,000,000 | 100,000 | | Issued and fully paid share capital (ordinary shares of HKD 0.005 each) | 982,000 | 4,910 | - There was no change in the company's issued share capital from December 31, 2024, to June 30, 2025[49](index=49&type=chunk) [22. Capital Commitments](index=19&type=section&id=22.%20Capital%20Commitments) Capital expenditure commitments for contributions to a joint venture slightly increased Capital Commitments (HKD thousands) | Capital Commitment Type | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | | :--- | :--- | :--- | | Contracted capital expenditure commitments for capital contributions to a joint venture | 10,738 | 10,431 | [23. Related Party Transactions](index=19&type=section&id=23.%20Related%20Party%20Transactions) Key management personnel remuneration decreased during the period, with no other significant related party transactions requiring disclosure Key Management Personnel Remuneration (HKD thousands) | Remuneration Type | June 30, 2025 (HKD thousands) | June 30, 2024 (HKD thousands) | | :--- | :--- | :--- | | Short-term employee benefits | 237 | 409 | - For the six months ended June 30, 2025, no other related party transactions required disclosure as defined under Chapter 14A of the Listing Rules[52](index=52&type=chunk) [24. Events After the Reporting Period](index=19&type=section&id=24.%20Events%20After%20the%20Reporting%20Period) Post-period, the company entered settlement agreements with creditors for debt restructuring via convertible bonds, pending regulatory and shareholder approval - On July 5, 2025, the company entered into settlement agreements with certain creditors involving the issuance of convertible bonds to creditors for debt restructuring[53](index=53&type=chunk) - The debt restructuring requires regulatory and shareholder approval, which has not been obtained as of the date of this announcement[53](index=53&type=chunk) [Management Discussion and Analysis](index=20&type=section&id=Management%20Discussion%20and%20Analysis) This section reviews the Group's business operations, financial performance, future prospects, liquidity, and capital structure, including ongoing debt restructuring efforts [Business Review](index=20&type=section&id=Business%20Review) The Group focuses on cross-border business via S2B2C and B2C models, while its finance lease and consulting services have contracted and ceased new operations due to market and regulatory pressures - The Group primarily engages in cross-border business and the provision of finance lease and consulting services[55](index=55&type=chunk) [Cross-border Business](index=20&type=section&id=Cross-border%20Business) Initiated in 2017, cross-border business utilizes S2B2C for supply chain services and B2C for direct consumer sales, diversifying revenue streams - The Group has been engaged in cross-border business since **2017**, expanding through S2B2C and B2C models[56](index=56&type=chunk) - The S2B2C model provides services such as overseas direct procurement, import and export supply chain management, bonded warehousing, customs declaration, storage, and logistics assistance[56](index=56&type=chunk) - The B2C model enables the Group to directly promote and sell products to end consumers, diversifying revenue sources[56](index=56&type=chunk) [Provision of Finance Lease and Consulting Services](index=20&type=section&id=Provision%20of%20Finance%20Lease%20and%20Consulting%20Services) Once a core business, finance lease operations have declined due to market and regulatory pressures; new business has ceased, with focus now on existing matters' compliance and accounting - Finance lease business, once a core operation of the Group, has faced operational pressure in recent years, with its scale and profitability gradually declining[57](index=57&type=chunk) - The Group has gradually scaled back and streamlined its finance lease business, ceasing new related operations, and this business segment generated no operating income during the period[58](index=58&type=chunk) - Subsequent work only involves performance oversight of existing matters and compliant accounting treatment of historical financial data[58](index=58&type=chunk) [Financial Performance](index=21&type=section&id=Financial%20Performance) For the six months ended June 30, 2025, revenue decreased by **22.2%** to **HKD 256.1 million**, and profit for the period fell by **62.1%** to **HKD 3.6 million**, mainly due to reduced cross-border sales and lower gross profit - For the six months ended June 30, 2025, the Group recorded revenue of approximately **HKD 256.1 million**, a decrease of approximately **HKD 73.0 million** or **22.2%** from the prior year period, primarily due to reduced sales in cross-border business[59](index=59&type=chunk) - Profit for the period was approximately **HKD 3.6 million**, a decrease of approximately **HKD 5.9 million** or **62.1%** from the prior year period, primarily due to reduced revenue and gross profit[59](index=59&type=chunk) [Prospects](index=21&type=section&id=Prospects) The global cross-border e-commerce market, particularly for nutrition and health products, is expected to grow, with Hong Kong leveraging digital strategies and smart port systems to become a global health product service platform, creating opportunities for omnichannel businesses - The global cross-border e-commerce market is projected to exceed **HKD 18 trillion** by **2025**, with China's market share continuously expanding to approximately **62%**[60](index=60&type=chunk) - Cross-border transaction volume for nutrition and health products maintains a high compound annual growth rate of **28%**, with explosive growth in demand for mid-to-high-end functional nutritional supplements[60](index=60&type=chunk) - Driven by the "Digital Silk Road" strategy and "Smart Port 3.0" system, Hong Kong has enhanced customs clearance efficiency and cold chain logistics capabilities, solidifying its position as an Asia-Pacific health product trade hub[61](index=61&type=chunk) - The deep integration of social e-commerce and content marketing, mature blockchain traceability and AI personalized recommendation technologies, and tariff benefits from the RCEP agreement provide strategic value for Hong Kong enterprises to integrate global health resources[62](index=62&type=chunk) [Liquidity, Financial Resources and Capital Structure](index=22&type=section&id=Liquidity%2C%20Financial%20Resources%20and%20Capital%20Structure) The Group has **HKD 414.2 million** in total assets and a **1.25x** current ratio, with working capital from operations and borrowings; it faces debt defaults and statutory demands, actively pursuing debt restructuring via convertible bonds, pending approvals - As of June 30, 2025, the Group's total assets were approximately **HKD 414.2 million**, with a current ratio of **1.25 times**[63](index=63&type=chunk) - Working capital primarily originates from funds generated by operating activities and borrowings, with borrowings mainly denominated in HKD and RMB, and cash and cash equivalents in HKD, RMB, and USD[63](index=63&type=chunk) [Convertible Bonds](index=23&type=section&id=Convertible%20Bonds) The company issued **HKD 39 million** convertible bonds in **2019** at **5%** annual interest, extended to June 24, 2025; a post-period statutory demand was received and later withdrawn - The company issued convertible bonds with a total principal amount of **HKD 39,000,000** in **2019**, bearing an annual interest rate of **5%**, extended to June 24, 2025[64](index=64&type=chunk) - A statutory demand was received on March 3, 2025, requesting payment of **HKD 50,881,644**, but was subsequently withdrawn[65](index=65&type=chunk) [Statutory Demands and Debt Restructuring Efforts](index=24&type=section&id=Statutory%20Demands%20and%20Debt%20Restructuring%20Efforts) The company faced multiple demand letters and statutory demands for acceptance bills and corporate bonds, resulting in defaults; preliminary settlement agreements were reached on July 5, 2025, to issue **HKD 178,615,220** convertible bonds for debt restructuring, pending regulatory and shareholder approval - On September 16, 2024, the company received a demand letter from an acceptance bill holder concerning **HKD 20 million** in acceptance bills[68](index=68&type=chunk) - On October 10, 2024, a statutory demand was received, requesting payment of **HKD 20,316,438**, failing which a winding-up petition might be presented[70](index=70&type=chunk) - The company previously entered into a settlement agreement with creditors to capitalize **HKD 91,534,164** in debt, but it was terminated due to inability to meet Listing Rules conditions[74](index=74&type=chunk)[75](index=75&type=chunk) - On July 5, 2025, the company entered into settlement agreements with certain creditors, proposing to issue convertible bonds with a total principal amount of **HKD 178,615,220** for debt restructuring[78](index=78&type=chunk) - The debt restructuring requires a whitewash waiver and consent from the Securities and Futures Commission, as well as approval from independent shareholders[78](index=78&type=chunk) [Contingent Liabilities](index=27&type=section&id=Contingent%20Liabilities) The Group had no other significant contingent liabilities at the end of the reporting period, apart from those already disclosed - Except as disclosed in this announcement, the Group had no other significant contingent liabilities as of June 30, 2025, and December 31, 2024[81](index=81&type=chunk) [Gearing Ratio](index=27&type=section&id=Gearing%20Ratio) As of June 30, 2025, the Group's gearing ratio increased to **55.7%** from **52.1%** at the end of 2024 - The gearing ratio as of June 30, 2025, was **55.7%** (December 31, 2024: **52.1%**)[82](index=82&type=chunk) - The gearing ratio is calculated as total external financing debt divided by total assets at the end of the respective period[82](index=82&type=chunk) [Foreign Exchange Risk and Interest Rate Risk](index=28&type=section&id=Foreign%20Exchange%20Risk%20and%20Interest%20Rate%20Risk) The Group faces HKD/USD/RMB currency risk, particularly in cross-border business, with negligible risk in finance lease operations; no hedging policy exists, but significant risks are monitored for potential hedging - Cross-border business primarily faces currency risk related to HKD/USD/RMB, especially the volatility risk of RMB against HKD/USD and HKD against RMB[83](index=83&type=chunk) - Revenue, expenditures, and operating expenses for finance lease business are all transacted in RMB, resulting in negligible currency risk[83](index=83&type=chunk) - The Group currently has no foreign currency hedging policy but will closely monitor foreign exchange risk conditions[83](index=83&type=chunk) [Credit Policy](index=28&type=section&id=Credit%20Policy) The Group manages finance lease receivables credit risk by assessing lessee credit quality, setting limits, requiring collateral, and monitoring repayment records - The Group assesses the credit quality of potential lessees and defines limits for each lessee before accepting new finance leases[84](index=84&type=chunk) - Finance lease borrowers are required to pledge other collateral when necessary, and repayment records are monitored to determine recoverability[84](index=84&type=chunk) - The fair value of pledged assets is continuously assessed and reviewed to ensure collateral value is sufficient to cover finance lease amounts[84](index=84&type=chunk) [Capital Expenditure & Commitments](index=28&type=section&id=Capital%20Expenditure%20%26%20Commitments) The Group made no additions to property, plant and equipment during the period, but capital commitments for joint venture contributions increased - For the six months ended June 30, 2025, the Group incurred no additions to property, plant and equipment[85](index=85&type=chunk) - As of June 30, 2025, the Group had contractual capital contribution commitments to an investee of approximately **HKD 10.7 million**[86](index=86&type=chunk) [Pledge of Assets](index=28&type=section&id=Pledge%20of%20Assets) As of June 30, 2025, assets with a net book value of **HKD 138 thousand**, held under finance lease arrangements, were pledged by the Group - As of June 30, 2025, assets with a net book value of approximately **HKD 138,000** (held under finance lease arrangements) were pledged by the Group[87](index=87&type=chunk) [Employees and Remuneration Policy](index=29&type=section&id=Employees%20and%20Remuneration%20Policy) As of June 30, 2025, the Group had **13 employees**, a decrease from 2024-end; remuneration policy is annually reviewed, offering discretionary bonuses, medical insurance, and training programs - As of June 30, 2025, the Group employed a total of **13 staff** in Hong Kong and China (December 31, 2024: **16 staff**)[88](index=88&type=chunk) - Salaries and wages are reviewed annually with reference to remuneration policy and market conditions, offering discretionary bonuses, medical insurance, training programs, social insurance, and provident funds[88](index=88&type=chunk) - The company has adopted a share option scheme, but no share options have been granted since its adoption[88](index=88&type=chunk) [Significant Investments & Acquisitions/Disposals](index=29&type=section&id=Significant%20Investments%20%26%20Acquisitions%2FDisposals) Aside from the joint venture investment, the Group held no other significant equity investments, nor did it undertake any major acquisitions or disposals of subsidiaries or associates during the period - Except as disclosed in the business review and investments in subsidiaries, the Group held no other significant equity investments in any company[89](index=89&type=chunk) - The Group undertook no significant acquisitions or disposals of subsidiaries and associates[90](index=90&type=chunk) [Future Plans for Material Investments and Capital Assets](index=29&type=section&id=Future%20Plans%20for%20Material%20Investments%20and%20Capital%20Assets) The Group will explore improving financial performance and diversifying revenue, potentially investing in capital assets or other businesses, and may execute debt/equity restructuring to meet financing needs - The Group will continue to explore ways to improve financial performance and diversify revenue streams[91](index=91&type=chunk) - The possibility of investing in capital assets or expanding into other businesses is not ruled out[91](index=91&type=chunk) - The possibility of executing debt and/or equity fundraising plans to meet financing needs and improve financial position is not ruled out[91](index=91&type=chunk) [Interim Dividend](index=29&type=section&id=Interim%20Dividend) The Board has resolved not to declare any interim dividend for the six months ended June 30, 2025 - The Board has resolved not to declare any interim dividend for the six months ended June 30, 2025[92](index=92&type=chunk) [Suspension and Resumption of Trading](index=30&type=section&id=Suspension%20and%20Resumption%20of%20Trading) The company's shares experienced multiple suspensions and resumptions of trading due to debt restructuring, statutory demands, and delayed annual results publication - Trading in shares was suspended from October 21, 2024, pending the release of inside information such as debt restructuring, and resumed on January 9, 2025[93](index=93&type=chunk) - Trading in shares was suspended from March 10, 2025, pending the release of inside information regarding a statutory demand, and resumed on March 11, 2025[93](index=93&type=chunk) - Trading in shares was suspended from April 1, 2025, due to the delayed publication of the 2024 annual results announcement, and resumed on August 5, 2025[94](index=94&type=chunk) [Events After 30 June 2025](index=30&type=section&id=Events%20After%2030%20June%202025) Post-reporting period events, including debt restructuring progress and share trading suspensions/resumptions, are detailed in the "Liquidity, Financial Resources and Capital Structure" and "Suspension and Resumption of Trading" sections - Details of the proposed debt restructuring, whitewash waiver, and special transactions are provided in the "Liquidity, Financial Resources and Capital Structure" section on page 22 of this announcement[95](index=95&type=chunk) - Details of the suspension and resumption of trading in shares are provided in the "Suspension and Resumption of Trading" section on page 30 of this announcement[95](index=95&type=chunk) [Purchase, Sale or Redemption of the Company’s Listed Securities](index=31&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company%E2%80%99s%20Listed%20Securities) Neither the company nor its subsidiaries purchased, sold, or redeemed any of the company's listed securities during the review period - During the review period, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities[96](index=96&type=chunk) [Corporate Governance and Compliance](index=31&type=section&id=Corporate%20Governance%20and%20Compliance) The company complied with corporate governance codes and director securities transaction standards; the Audit Committee reviewed interim financial statements, internal controls, risk management, and financial reporting - The company has complied with the applicable code provisions of the Corporate Governance Code as set out in Appendix C1 to the Listing Rules[97](index=97&type=chunk) - All Directors have confirmed their compliance with the required standards set out in the Model Code and the Code of Conduct for the six months ended June 30, 2025[98](index=98&type=chunk) - The Audit Committee has reviewed the Group's unaudited condensed consolidated interim financial statements for the six months ended June 30, 2025, and discussed internal control, risk management, and financial reporting matters[99](index=99&type=chunk) [Appointment of Authorised Representative](index=32&type=section&id=Appointment%20of%20Authorised%20Representative) Executive Director Mr. Zhu Jianhong was appointed as the company's authorized representative under Listing Rule 3.05, effective February 7, 2025 - Mr. Zhu Jianhong, an executive director, was appointed as the company's authorized representative under Listing Rule 3.05, effective February 7, 2025[100](index=100&type=chunk) [By Order of the Board](index=32&type=section&id=By%20Order%20of%20the%20Board) This announcement is issued by Executive Director Mr. Zhu Jianhong on behalf of the Board, which comprises one executive director and three independent non-executive directors as of the announcement date - This announcement is issued by Mr. Zhu Jianhong, an executive director, on behalf of the Board[101](index=101&type=chunk) - As of the date of this announcement, the Board comprises Mr. Zhu Jianhong, an executive director, and three independent non-executive directors, Mr. Xian Jiamin, Ms. Liang Lina, and Mr. Chen Yifan[102](index=102&type=chunk)

[Financial Summary](index=2&type=section&id=%E8%B2%A1%E5%8B%99%E6%91%98%E8%A6%81) [Condensed Consolidated Income Statement Summary](index=2&type=section&id=1%20Condensed%20Consolidated%20Income%20Statement%20Summary) In H1 2025, total revenue decreased by 3.5% to **RMB 12.045 billion**, but net profit rose 27.6% to **RMB 2.401 billion**, driven by lower interest expenses and increased other income Condensed Consolidated Income Statement Summary | Indicator (RMB thousands) | H1 2025 | H1 2024 | YoY Change | | :------------------------ | :----------- | :----------- | :------- | | Finance Lease Income | 5,041,156 | 5,373,097 | -6.2% | | Operating Lease Income | 7,003,992 | 7,113,496 | -1.5% | | **Total Revenue** | **12,045,148** | **12,486,593** | **-3.5%** | | Net Investment Income | 34,201 | 84,619 | -59.6% | | Other Income, Gains or Losses | 2,585,045 | 1,045,821 | +147.2% | | **Total Income and Other Gains** | **14,664,394** | **13,617,033** | **+7.7%** | | Total Expenses | (11,627,511) | (11,055,965) | +5.2% | | Profit Before Income Tax | 3,036,883 | 2,561,068 | +18.6% | | **Profit for the Period** | **2,401,029** | **1,881,265** | **+27.6%** | | Basic and Diluted Earnings Per Share (RMB) | 0.19 | 0.15 | +26.7% | - In H1 2025, the operating revenue structure significantly changed: finance lease income accounted for **34.4%** (down 5.0 percentage points YoY), operating lease income **47.8%** (down 4.5 percentage points YoY), and other income, gains or losses **17.6%** (up 9.9 percentage points YoY)[6](index=6&type=chunk) - Within the operating expense structure, interest expenses accounted for **39.7%** (down 21.1 percentage points YoY), depreciation and amortization **33.1%** (up 2.2 percentage points YoY), and impairment losses **15.6%** (up 18.0 percentage points YoY)[8](index=8&type=chunk) [Condensed Consolidated Statement of Financial Position Summary](index=4&type=section&id=2%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position%20Summary) As of June 30, 2025, total assets increased by 2.9% to **RMB 417.727 billion**, with total equity growing 3.4% to **RMB 41.621 billion**, reflecting changes in asset and liability composition Condensed Consolidated Statement of Financial Position Summary | Indicator (RMB thousands) | June 30, 2025 | Dec 31, 2024 | Change Rate | | :------------------------ | :------------ | :------------- | :----- | | **Total Assets** | **417,727,294** | **405,850,330** | **+2.9%** | | Of which: Cash and Bank Balances | 55,861,526 | 43,670,649 | +27.9% | | Finance Lease Receivables | 199,983,886 | 202,099,637 | -1.0% | | Property and Equipment | 131,599,143 | 133,593,877 | -1.5% | | **Total Liabilities** | **376,106,272** | **365,586,571** | **+2.9%** | | Of which: Borrowings | 313,383,794 | 309,814,063 | +1.2% | | Bonds Payable | 31,964,802 | 27,072,912 | +18.1% | | **Total Equity** | **41,621,022** | **40,263,759** | **+3.4%** | | Net Assets Per Share (RMB) | 3.29 | 3.18 | +3.5% | - As of June 30, 2025, total assets comprised **47.9%** finance lease receivables, **31.5%** property and equipment, and **20.6%** other assets[12](index=12&type=chunk)[13](index=13&type=chunk) - As of June 30, 2025, total liabilities consisted of **83.3%** borrowings, **8.5%** bonds payable, and **8.2%** other liabilities[14](index=14&type=chunk)[15](index=15&type=chunk) [Key Financial and Regulatory Indicators](index=6&type=section&id=Key%20Financial%20and%20Regulatory%20Indicators) In H1 2025, the Group's profitability and asset quality improved, capital adequacy met requirements, despite a Fitch rating downgrade Key Financial and Regulatory Indicators | Indicator | H1 2025 | H1 2024 | FY 2024 | | :--------------------------------- | :----------- | :----------- | :--------- | | Return on Average Total Assets | 1.17% | 0.84% | 1.10% | | Return on Average Equity | 11.73% | 10.04% | 11.61% | | Cost-to-Income Ratio | 9.49% | 8.77% | 9.35% | | Non-Performing Asset Ratio | 0.63% | 0.48% | 0.56% | | Non-Performing Finance Lease Asset Ratio | 0.97% | 0.72% | 0.80% | | Financial Leverage Ratio | 7.80 times | 9.06 times | 8.25 times | - In H1 2025, the annualized **Return on Average Total Assets (ROA)** was **1.17%** (up 0.33 percentage points YoY), and **Return on Average Equity (ROE)** was **11.73%** (up 1.69 percentage points YoY), primarily due to stable net profit growth[18](index=18&type=chunk) Regulatory Indicators | Regulatory Indicator | Regulatory Requirement | June 30, 2025 | Dec 31, 2024 | Dec 31, 2023 | | :--------------------------------------- | :------- | :------------ | :------------- | :------------- | | Core Tier 1 Capital Adequacy Ratio | ≥7.5% | 10.66% | 10.49% | 9.96% | | Tier 1 Capital Adequacy Ratio | ≥8.5% | 10.66% | 10.49% | 9.96% | | Capital Adequacy Ratio | ≥10.5% | 13.10% | 12.95% | 12.47% | | Provision Coverage Ratio for Non-Performing Finance Lease Assets | ≥100% | 540.05% | 551.24% | 547.72% | - In April 2025, Fitch downgraded China's sovereign credit rating from A+ to A, leading to a corresponding downgrade of CDB Leasing's rating from A+ to A, with a stable outlook[17](index=17&type=chunk) [Management Discussion and Analysis](index=8&type=section&id=%E7%AE%A1%E7%90%86%E5%B1%A4%E8%A8%8E%E8%AB%96%E8%88%87%E5%88%86%E6%9E%90) [Operating Environment](index=8&type=section&id=1%20Operating%20Environment) In H1 2025, global economic growth faced uncertainties, with IMF forecasting 3.0% growth, while China's GDP grew 5.3%, demonstrating resilience and strengthening the financial leasing sector's service to the real economy - In July 2025, the International Monetary Fund (IMF) raised its 2025 global economic growth forecast to **3.0%**, yet the global economy still faces risks such as trade tensions, spillover effects from slowing growth, and extreme weather[23](index=23&type=chunk) - In H1 2025, China's GDP grew by **5.3%** year-on-year, with the economy operating steadily and improving, supported by strengths in technological innovation and advanced manufacturing to achieve full-year growth targets[23](index=23&type=chunk) - As of the end of 2024, the total asset scale of China's financial leasing companies continued to grow, with the industry focusing on green finance, technology finance, and new infrastructure, enhancing its ability to serve the real economy[24](index=24&type=chunk) [H1 2025 Operating Review](index=9&type=section&id=2025%E5%B9%B4%E4%B8%8A%E5%8D%8A%E5%B9%B4%E7%B6%93%E7%87%9F%E5%9B%9E%E9%A1%A7) In H1 2025, the Group adhered to a 'seeking progress while maintaining stability' approach, achieving new milestones in operations, with improving key indicators, optimized business structure, enhanced internal management, and an upgraded regulatory rating from 3A to 2B - The Group adhered to the general principle of 'seeking progress while maintaining stability', strengthening its foundation in 'risk prevention and compliance', focusing on 'structural adjustment, enhanced management, and promoting development', and empowering through 'digital intelligence'[25](index=25&type=chunk) H1 2025 Operating Review | Indicator | H1 2025 | YoY Change | | :--------------------------------------- | :----------------- | :-------------- | | Total Assets | RMB 417.727 billion | +2.9% | | Operating Revenue | RMB 14.664 billion | +7.7% | | Net Profit | RMB 2.401 billion | +27.6% | | Annualized Return on Average Total Assets (ROA) | 1.17% | +0.33 percentage points | | Annualized Return on Average Equity (ROE) | 11.73% | +1.69 percentage points | | Non-Performing Asset Ratio | 0.63% | Stable | | Provision Coverage Ratio for Non-Performing Finance Lease Assets | 540.05% | Maintained high | | Capital Adequacy Ratio | 13.10% | +0.15 percentage points | - Business structure continued to optimize, including deepening domestic and international aviation leasing markets, supporting domestic large aircraft industry development, accelerating non-core fleet disposal, integrating into national regional strategies, leading the world's first offshore FPSO joint finance lease, expanding inclusive finance products, and increasing green energy and high-end equipment leasing placements[27](index=27&type=chunk)[28](index=28&type=chunk) - Internal management efficiency improved, including optimizing capital allocation, multi-pronged efforts to reduce debt costs, strengthening risk assessment in key areas, enhancing internal control, and upgrading the regulatory rating from 3A to 2B from the previous year[29](index=29&type=chunk) [Condensed Consolidated Income Statement Analysis](index=11&type=section&id=3%20Condensed%20Consolidated%20Income%20Statement%20Analysis) In H1 2025, total income and other gains increased by 7.7%, and net profit grew by 27.6%, primarily due to reduced interest expenses and increased other income, despite a 3.5% decline in total revenue - In H1 2025, the Group's total income and other gains amounted to **RMB 14.664 billion**, a 7.7% year-on-year increase, with net profit reaching **RMB 2.401 billion**, up 27.6% year-on-year[30](index=30&type=chunk) - Net profit growth was primarily driven by proactive reduction of liquidity reserves, strengthened capital cost control, and decreased interest expenses due to lower borrowing scale and rates, alongside increased other income from aircraft insurance compensation, enhanced asset disposal, and higher exchange gains[30](index=30&type=chunk) - Total revenue decreased by **3.5%**, mainly due to a decline in finance lease yields and a lower BDI index compared to the same period last year, resulting in reduced finance lease and operating lease income[32](index=32&type=chunk) [Finance Lease Income](index=12&type=section&id=3.2.1%20Finance%20Lease%20Income) In H1 2025, finance lease income decreased by 6.2% to **RMB 5.041 billion**, mainly due to lower yields, though aircraft, inclusive finance, and green energy leasing saw growth Finance Lease Income by Business Segment | Business Segment (RMB millions) | H1 2025 | H1 2024 | Change Rate | | :------------------------------ | :----------- | :----------- | :----- | | Aircraft Leasing | 13.6 | 2.8 | +385.7% | | Regional Development Leasing | 1,492.5 | 2,356.5 | -36.7% | | Shipping Leasing | 624.5 | 590.9 | +5.7% | | Inclusive Finance | 1,052.3 | 922.5 | +14.1% | | Green Energy and High-End Equipment Leasing | 1,858.3 | 1,500.4 | +23.9% | | **Total** | **5,041.2** | **5,373.1** | **-6.2%** | - Aircraft leasing income increased by **385.7%**, primarily due to growth in the asset scale and yield of aircraft finance lease business[34](index=34&type=chunk) - Regional development leasing income decreased by **36.7%**, primarily due to business transformation leading to a reduction in asset scale and yield[34](index=34&type=chunk) - Inclusive finance income increased by **14.1%**, primarily due to increased vehicle leasing placements and an overall rise in yield[35](index=35&type=chunk) - Green energy and high-end equipment leasing income increased by **23.9%**, primarily due to increased placements in new energy and emerging industries, leading to a larger asset scale[35](index=35&type=chunk) [Operating Lease Income](index=13&type=section&id=3.2.2%20Operating%20Lease%20Income) In H1 2025, operating lease income decreased by 1.5% to **RMB 7.004 billion**, mainly due to a lower BDI index, despite growth in aircraft, regional development, inclusive finance, and green energy leasing Operating Lease Income by Business Segment | Business Segment (RMB millions) | H1 2025 | H1 2024 | Change Rate | | :------------------------------ | :----------- | :----------- | :----- | | Aircraft Leasing | 4,313.8 | 4,179.8 | +3.2% | | Regional Development Leasing | 63.3 | 53.6 | +18.1% | | Shipping Leasing | 2,011.7 | 2,469.0 | -18.5% | | Inclusive Finance | 573.5 | 386.0 | +48.6% | | Green Energy and High-End Equipment Leasing | 41.7 | 25.1 | +66.1% | | **Total** | **7,004.0** | **7,113.5** | **-1.5%** | - Shipping leasing income decreased by **18.5%**, primarily because operating lease income for vessels is linked to the BDI index, which was lower than the same period last year[38](index=38&type=chunk) - Inclusive finance operating lease income increased by **48.6%**, primarily due to an increase in the asset scale of vehicle operating leases[39](index=39&type=chunk) - Green energy and high-end equipment operating lease income increased by **66.1%**, primarily due to an increase in asset scale[39](index=39&type=chunk) [Net Investment Income](index=14&type=section&id=3.2.3%20Net%20Investment%20Income) In H1 2025, net investment income significantly decreased by 59.6% to **RMB 34.2 million**, primarily because the Group no longer held government bonds Net Investment Income | Indicator (RMB millions) | H1 2025 | H1 2024 | Change Rate | | :----------------------- | :----------- | :----------- | :----- | | Net Investment Income | 34.2 | 84.6 | -59.6% | - The decrease in net investment income was primarily due to the Group no longer holding government bonds in H1 2025[40](index=40&type=chunk) [Other Income, Gains or Losses](index=15&type=section&id=3.2.4%20Other%20Income%2C%20Gains%20or%20Losses) In H1 2025, other income, gains or losses significantly increased by 147.2% to **RMB 2.585 billion**, primarily due to higher exchange gains, aircraft insurance compensation, and asset disposal income Other Income, Gains or Losses | Indicator (RMB millions) | H1 2025 | H1 2024 | Change Rate | | :----------------------- | :----------- | :----------- | :------- | | Other Income, Gains or Losses | 2,585.0 | 1,045.8 | +147.2% | - The increase in other income, gains or losses was primarily due to higher exchange gains, aircraft insurance compensation income, and asset disposal income[41](index=41&type=chunk) [Cost and Expenses](index=15&type=section&id=3.3%20Cost%20and%20Expenses) In H1 2025, total expenses increased by 5.2% to **RMB 11.628 billion**, mainly due to significant increases in impairment losses and depreciation and amortization, despite reduced interest and staff costs Cost and Expenses | Indicator (RMB millions) | H1 2025 | H1 2024 | Change Rate | | :----------------------- | :----------- | :----------- | :------- | | Depreciation and Amortization | (3,850.3) | (3,417.0) | +12.7% | | Staff Costs | (239.3) | (263.5) | -9.2% | | Interest Expenses | (4,617.1) | (6,727.7) | -31.4% | | Other Operating Expenses | (1,096.6) | (882.4) | +24.3% | | Impairment Losses | (1,811.1) | 261.0 | -793.9% | | **Total Expenses** | **(11,627.5)** | **(11,055.9)** | **+5.2%** | - Depreciation and amortization increased by **12.7%**, primarily due to the growth in operating lease asset scale[43](index=43&type=chunk) - Staff costs decreased by **9.2%**, primarily due to adjustments in personnel structure[44](index=44&type=chunk) - Interest expenses decreased by **31.4%**, primarily due to a reduction in both average borrowing scale and financing cost rates[45](index=45&type=chunk) - Impairment losses shifted from a reversal in the prior year to a loss, primarily due to increased credit risk in certain existing projects and updates to macroeconomic parameters in the impairment model[47](index=47&type=chunk) [Profit Before Income Tax](index=16&type=section&id=3.4%20Profit%20Before%20Income%20Tax) In H1 2025, profit before income tax increased by 18.6% to **RMB 3.037 billion** Profit Before Income Tax | Indicator (RMB millions) | H1 2025 | H1 2024 | Change Rate | | :----------------------- | :----------- | :----------- | :------- | | Profit Before Income Tax | 3,036.9 | 2,561.1 | +18.6% | [Income Tax Expenses](index=16&type=section&id=3.5%20Income%20Tax%20Expenses) In H1 2025, income tax expenses decreased by 6.5% to **RMB 636 million**, primarily due to an increased proportion of profit from lower-taxed subsidiaries Income Tax Expenses | Indicator (RMB millions) | H1 2025 | H1 2024 | Change Rate | | :----------------------- | :----------- | :----------- | :------- | | Income Tax Expenses | (635.9) | (679.8) | -6.5% | - The decrease in income tax expenses was primarily due to an increased proportion of profit from lower-taxed subsidiaries[49](index=49&type=chunk) [Condensed Consolidated Statement of Financial Position Analysis](index=17&type=section&id=4%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position%20Analysis) As of June 30, 2025, total assets increased by 2.9% to **RMB 417.727 billion**, primarily driven by cash and bank balances, with total liabilities also growing 2.9% to support asset expansion Condensed Consolidated Statement of Financial Position Analysis | Indicator (RMB millions) | June 30, 2025 | Dec 31, 2024 | Change Rate | | :----------------------- | :------------ | :------------- | :-------- | | **Total Assets** | **417,727.3** | **405,850.3** | **+2.9%** | | Cash and Bank Balances | 55,861.5 | 43,670.6 | +27.9% | | Finance Lease Receivables | 199,983.9 | 202,099.6 | -1.0% | | Prepayments | 15,070.4 | 13,535.4 | +11.3% | | Property and Equipment | 131,599.1 | 133,593.9 | -1.5% | | **Total Liabilities** | **376,106.3** | **365,586.5** | **+2.9%** | | Borrowings | 313,383.8 | 309,814.1 | +1.2% | | Bonds Payable | 31,964.8 | 27,072.9 | +18.1% | | Total Equity | 41,621.0 | 40,263.8 | +3.4% | - Total assets increased by **2.9%**, primarily driven by growth in cash and bank balances[51](index=51&type=chunk) - Total liabilities increased by **2.9%**, primarily to support the growth in asset scale[59](index=59&type=chunk) [Cash and Bank Balances](index=18&type=section&id=4.1.1%20Cash%20and%20Bank%20Balances) As of June 30, 2025, cash and bank balances increased by 27.9% to **RMB 55.862 billion**, primarily due to increased liquidity preparedness for business development Cash and Bank Balances | Indicator (RMB millions) | June 30, 2025 | Dec 31, 2024 | Change Rate | | :----------------------- | :------------ | :------------- | :----- | | Cash and Bank Balances | 55,861.5 | 43,670.6 | +27.9% | - The increase in cash and bank balances was primarily due to the Group's business development needs and increased liquidity preparedness[52](index=52&type=chunk) [Finance Lease Receivables](index=18&type=section&id=4.1.2%20Finance%20Lease%20Receivables) As of June 30, 2025, finance lease receivables decreased by 1.0% to **RMB 199.984 billion**, primarily due to intense market competition, declining project yields, and a slowdown in placement progress Finance Lease Receivables | Indicator (RMB millions) | June 30, 2025 | Dec 31, 2024 | Change Rate | | :----------------------- | :------------ | :------------- | :----- | | Finance Lease Receivables | 199,983.9 | 202,099.6 | -1.0% | - The decrease in finance lease receivables was primarily due to intense market competition, declining project yields, and a slowdown in the Group's finance lease placement progress[53](index=53&type=chunk) [Prepayments](index=19&type=section&id=4.1.3%20Prepayments) As of June 30, 2025, prepayments increased by 11.3% to **RMB 15.070 billion**, primarily due to payments for new aircraft, vessel, and vehicle purchase orders Prepayments | Indicator (RMB millions) | June 30, 2025 | Dec 31, 2024 | Change Rate | | :----------------------- | :------------ | :------------- | :----- | | Prepayments | 15,070.4 | 13,535.4 | +11.3% | - The increase in prepayments was primarily due to payments for new aircraft, vessel, and vehicle purchase orders[54](index=54&type=chunk) [Property and Equipment](index=19&type=section&id=4.1.4%20Property%20and%20Equipment) As of June 30, 2025, property and equipment decreased by 1.5% to **RMB 131.600 billion**, primarily due to reduced net values of operating lease equipment and self-use property from depreciation charges Property and Equipment | Indicator (RMB millions) | June 30, 2025 | Dec 31, 2024 | Change Rate | | :----------------------- | :------------ | :------------- | :----- | | Equipment for Operating Leases | 131,043.7 | 133,022.7 | -1.5% | | Property and Equipment for Own Use | 555.4 | 571.2 | -2.8% | | **Property and Equipment – Carrying Value** | **131,599.1** | **133,593.9** | **-1.5%** | - The decrease in the net carrying value of equipment for operating leases was primarily due to depreciation charges, despite stable growth in original asset value[55](index=55&type=chunk) [Other Assets](index=19&type=section&id=4.1.5%20Other%20Assets) As of June 30, 2025, other assets increased by 16.3% to **RMB 9.273 billion**, primarily due to an expanded scale of leasing asset placements, leading to higher deductible value-added tax Other Assets | Indicator (RMB millions) | June 30, 2025 | Dec 31, 2024 | Change Rate | | :----------------------- | :------------ | :------------- | :------- | | Other Assets | 9,272.5 | 7,969.5 | +16.3% | - The increase in other assets was primarily due to an expanded scale of leasing asset placements, leading to higher deductible value-added tax[57](index=57&type=chunk) [Lease Assets](index=20&type=section&id=4.2%20Lease%20Assets) As of June 30, 2025, the Group's finance lease related assets and operating lease assets both decreased by 1.0% and 1.5% respectively, compared to the end of the previous year Lease Assets | Lease Assets (RMB millions) | June 30, 2025 | Dec 31, 2024 | Change Rate | | :-------------------------- | :------------ | :------------- | :----- | | Finance Lease Related Assets | 199,983.9 | 202,099.6 | -1.0% | | Operating Lease Assets | 132,081.6 | 134,081.1 | -1.5% | [Borrowings](index=20&type=section&id=4.3.1%20Borrowings) As of June 30, 2025, borrowings increased by 1.2% to **RMB 313.384 billion**, primarily due to increased financing to support business scale development Borrowings | Indicator (RMB millions) | June 30, 2025 | Dec 31, 2024 | Change Rate | | :----------------------- | :------------ | :------------- | :----- | | Borrowings | 313,383.8 | 309,814.1 | +1.2% | - The increase in borrowings was primarily due to increased financing to support business scale development[60](index=60&type=chunk) [Bonds Payable](index=21&type=section&id=4.3.2%20Bonds%20Payable) As of June 30, 2025, bonds payable increased by 18.1% to **RMB 31.965 billion**, primarily because new bond issuances in H1 2025 exceeded maturing repayments Bonds Payable | Indicator (RMB millions) | June 30, 2025 | Dec 31, 2024 | Change Rate | | :----------------------- | :------------ | :------------- | :------- | | Bonds Payable | 31,964.8 | 27,072.9 | +18.1% | - The increase in bonds payable was primarily due to new bond issuances in H1 2025 exceeding the volume of maturing repayments[61](index=61&type=chunk) [Other Liabilities](index=21&type=section&id=4.3.3%20Other%20Liabilities) As of June 30, 2025, other liabilities decreased by 0.7% to **RMB 20.558 billion**, primarily due to a reduction in interest payable Other Liabilities | Indicator (RMB millions) | June 30, 2025 | Dec 31, 2024 | Change Rate | | :----------------------- | :------------ | :------------- | :----- | | Other Liabilities | 20,558.5 | 20,710.4 | -0.7% | - The decrease in other liabilities was primarily due to a reduction in interest payable[62](index=62&type=chunk) [Cash Flow Statement Analysis](index=21&type=section&id=5%20Cash%20Flow%20Statement%20Analysis) In H1 2025, net cash flow from operating activities significantly decreased by 81.1% due to reduced net increase in borrowings, while net cash outflow from investing activities decreased by 86.6%, and net cash inflow from financing activities increased due to bond issuances Cash Flow Statement Analysis | Indicator (RMB millions) | H1 2025 | H1 2024 | Change Rate | | :--------------------------------------- | :----------- | :----------- | :------- | | Net Cash Flow from Operating Activities | 12,153.1 | 64,403.0 | -81.1% | | Net Cash Flow Used in Investing Activities | (4,229.4) | (31,583.9) | -86.6% | | Net Cash Flow from (Used in) Financing Activities | 4,554.2 | (4,540.9) | +200.3% | | Net Increase in Cash and Cash Equivalents | 12,477.9 | 28,278.2 | -55.9% | - Net cash inflow from operating activities decreased by **81.1%**, primarily due to a reduction in the Group's net increase in borrowings[63](index=63&type=chunk) - Net cash outflow from investing activities decreased by **86.6%**, primarily due to a reduction in the Group's investment payments[63](index=63&type=chunk) - Net cash inflow from financing activities increased, primarily due to the Group's bond issuances leading to higher net cash inflows[63](index=63&type=chunk) [Business Segments](index=22&type=section&id=6%20Business%20Segments) In H1 2025, the Group's business transformation yielded significant results, with optimized segment structure, total leasing placements of **RMB 41.361 billion**, and notable growth in income and profit contributions from aircraft and green energy leasing - In H1 2025, the Group achieved total leasing business placements of **RMB 41.361 billion**, with **RMB 23.461 billion** in green energy and high-end equipment leasing, and **RMB 10.552 billion** in inclusive finance[64](index=64&type=chunk) Segment Assets | Segment Assets (RMB millions) | June 30, 2025 Amount | June 30, 2025 Share | Dec 31, 2024 Amount | Dec 31, 2024 Share | | :---------------------------- | :----------------- | :----------------- | :----------------- | :----------------- | | Aircraft Leasing | 121,346.8 | 29.3% | 120,078.4 | 29.8% | | Regional Development Leasing | 76,363.7 | 18.4% | 87,567.7 | 21.7% | | Shipping Leasing | 67,435.9 | 16.3% | 64,739.8 | 16.0% | | Inclusive Finance | 36,388.2 | 8.8% | 33,959.9 | 8.4% | | Green Energy and High-End Equipment Leasing | 113,307.9 | 27.2% | 97,177.1 | 24.1% | | **Total** | **414,842.5** | **100.0%** | **403,522.9** | **100.0%** | Segment Income and Other Gains | Segment Income and Other Gains (RMB millions) | H1 2025 Amount | H1 2025 Share | H1 2024 Amount | H1 2024 Share | | :------------------------------------------ | :--------------- | :--------------- | :--------------- | :--------------- | | Aircraft Leasing | 5,886.7 | 40.1% | 4,555.0 | 33.5% | | Regional Development Leasing | 1,620.6 | 11.1% | 2,664.1 | 19.6% | | Shipping Leasing | 3,485.7 | 23.8% | 3,327.7 | 24.4% | | Inclusive Finance | 1,658.8 | 11.3% | 1,390.3 | 10.2% | | Green Energy and High-End Equipment Leasing | 2,012.6 | 13.7% | 1,679.9 | 12.3% | | **Total** | **14,664.4** | **100.0%** | **13,617.0** | **100.0%** | Segment Profit (Loss) Before Income Tax | Segment Profit (Loss) Before Income Tax (RMB millions) | H1 2025 Amount | H1 2024 Amount | | :--------------------------------------------------- | :--------------- | :--------------- | | Aircraft Leasing | 1,114.5 | (62.0) | | Regional Development Leasing | 481.4 | 1,206.0 | | Shipping Leasing | 326.4 | 437.9 | | Inclusive Finance | 486.8 | 443.9 | | Green Energy and High-End Equipment Leasing | 627.8 | 535.3 | | **Total** | **3,036.9** | **2,561.1** | [Aircraft Leasing](index=24&type=section&id=6.1%20Aircraft%20Leasing) In H1 2025, the Aircraft Leasing segment's total assets grew 1.1%, total income and other gains increased 29.2%, and profit before income tax rose significantly, driven by higher leasing income and aircraft insurance compensation - In H1 2025, global air travel demand was strong, with IATA forecasting global airline net profits to reach **USD 36 billion**[72](index=72&type=chunk) - The Group executed **12 transactions** involving **31 new and old aircraft and engines**, signed **USD 2.6 billion** in financing contracts, and expanded its customer network across **42 countries and regions**[73](index=73&type=chunk) - The Aircraft Leasing segment's total assets were **RMB 121.347 billion** (up 1.1% YoY), total income and other gains **RMB 5.887 billion** (up 29.2% YoY), and profit before income tax **RMB 1.115 billion** (an increase of **RMB 1.177 billion** from the prior year)[74](index=74&type=chunk) - As of June 30, 2025, the Group owned **517 aircraft** (**312 owned**, **205 on order**), with narrow-body aircraft accounting for **79%** and wide-body aircraft **18%** of the owned fleet[74](index=74&type=chunk)[75](index=75&type=chunk) - In H1 2025, the Group received approximately **USD 134 million** in insurance compensation for aircraft stranded in Russia[83](index=83&type=chunk) [Regional Development Leasing](index=29&type=section&id=6.2%20Regional%20Development%20Leasing) In H1 2025, the Regional Development Leasing segment saw new business placements of **RMB 1.760 billion**, but total assets, income, and profit before tax significantly declined, reflecting the Group's ongoing business transformation to reduce this segment's asset scale - In H1 2025, the Group's Regional Development Leasing segment achieved new business placements of **RMB 1.760 billion**[84](index=84&type=chunk) - This segment's total assets were **RMB 76.364 billion** (down 12.8% YoY), income and other gains **RMB 1.621 billion** (down 39.2% YoY), and profit before income tax **RMB 481 million** (down 60.1% YoY)[85](index=85&type=chunk) - The Group focused on key regions such as Beijing-Tianjin-Hebei, Yangtze River Delta, Greater Bay Area, Yangtze River Economic Belt, and Yellow River Basin, providing services to **26 provinces, autonomous regions, and municipalities** nationwide[84](index=84&type=chunk) [Shipping Leasing](index=29&type=section&id=6.3%20Shipping%20Leasing) In H1 2025, the shipping market was fragmented due to geopolitical factors, with the Shipping Leasing segment's total assets growing 4.2% and income 4.7%, but profit before tax decreased 25.5% due to increased impairment losses from rising credit risk and lower BDI index affecting operating lease income - In H1 2025, the shipping market faced increased uncertainty due to US tariff policies and geopolitical factors, with market charter rates for bulk carriers, product tankers, and LNG carriers under pressure[86](index=86&type=chunk) - The Group led the world's first offshore FPSO joint finance lease, developed FLNG joint leasing business, and completed the delivery and commencement of leasing for **4 newbuild vessels**[87](index=87&type=chunk) - The Shipping Leasing segment's total assets were **RMB 67.436 billion** (up 4.2% YoY), income and other gains **RMB 3.486 billion** (up 4.7% YoY), and profit before income tax **RMB 326 million** (down 25.5% YoY)[89](index=89&type=chunk) - The decrease in profit before income tax was mainly due to increased impairment losses from rising credit risk in leasing assets, coupled with a year-on-year decline in the BDI index affecting operating lease income[89](index=89&type=chunk) - As of June 30, 2025, the Group owned **252 operating vessels** (**37 finance lease**, **215 operating lease**), with an average age of **7.3 years**, and **12 vessels under construction**[87](index=87&type=chunk)[88](index=88&type=chunk) [Inclusive Finance](index=31&type=section&id=6.4%20Inclusive%20Finance) In H1 2025, the Inclusive Finance segment's total assets grew 7.2%, income and other gains increased 19.3%, and profit before tax rose 9.7%, primarily due to steady growth in passenger vehicle leasing placements and optimized segment revenue structure - In H1 2025, the Group's Inclusive Finance segment achieved new business placements of **RMB 10.552 billion**[90](index=90&type=chunk) - The Inclusive Finance segment's total assets were **RMB 36.388 billion** (up 7.2% YoY), income and other gains **RMB 1.659 billion** (up 19.3% YoY), and profit before income tax **RMB 487 million** (up 9.7% YoY)[91](index=91&type=chunk) - The increase in profit before income tax was primarily due to the Group's steady increase in passenger vehicle leasing placements, optimizing the segment's revenue structure[91](index=91&type=chunk) [Vehicle Leasing](index=32&type=section&id=6.4.1%20Vehicle%20Leasing) In H1 2025, China's auto production and sales grew, with new energy vehicle sales significantly increasing, while the Group's vehicle leasing placements steadily rose to over **70,000 units**, serving over **40,000 SME clients**, and related assets grew 15.7% - In H1 2025, national automobile production and sales reached **15.621 million** and **15.653 million units** respectively (up 12.5% and 11.4% YoY), with new energy vehicle sales reaching **6.937 million units** (up 40.3% YoY)[92](index=92&type=chunk) - The Group placed over **70,000 vehicles**, providing financing support to over **40,000 end customers**[92](index=92&type=chunk) - Assets related to vehicle leasing business amounted to **RMB 27.495 billion** (up 15.7% YoY), accounting for **75.6%** of the Inclusive Finance segment's assets[92](index=92&type=chunk)[94](index=94&type=chunk) [Construction and Agricultural Machinery Leasing](index=32&type=section&id=6.4.2%20Construction%20and%20Agricultural%20Machinery%20Leasing) In H1 2025, China's construction machinery domestic demand strengthened, and agricultural machinery was affected by production cycles, while the Group continued to consolidate cooperation with industry leaders, placing over **14,500 units** of equipment, benefiting over **2,500 end customers**, but related assets decreased by 12.7% - In H1 2025, domestic demand resilience in China's construction machinery industry strengthened, with significant year-on-year growth in domestic sales of excavators and loaders[93](index=93&type=chunk) - The Group's construction and agricultural machinery businesses placed over **14,500 units** of equipment, directly or indirectly benefiting over **2,500 end customers**[93](index=93&type=chunk) - Assets related to construction and agricultural machinery leasing amounted to **RMB 8.893 billion** (down 12.7% YoY), accounting for **24.4%** of the Inclusive Finance segment's assets[94](index=94&type=chunk) [Green Energy and High-End Equipment Leasing](index=33&type=section&id=6.5%20Green%20Energy%20and%20High-End%20Equipment%20Leasing) In H1 2025, the Green Energy and High-End Equipment Leasing segment's total assets grew 16.6%, income and other gains increased 19.8%, and profit before tax rose 17.3%, primarily due to the expanded scale of leasing assets in new energy power stations and emerging industries - As of end-June 2025, national cumulative power generation capacity reached **3.65 billion kilowatts** (up 18.7% YoY), with significant growth in solar and wind power installed capacity[95](index=95&type=chunk) - The Group's total installed capacity for new energy power stations reached **13.82 gigawatts**, and new energy storage power stations **3,895 megawatt-hours**[96](index=96&type=chunk) - The Green Energy and High-End Equipment Leasing segment achieved new business placements of **RMB 23.461 billion**[96](index=96&type=chunk) - This segment's total assets were **RMB 113.308 billion** (up 16.6% YoY), income and other gains **RMB 2.013 billion** (up 19.8% YoY), and profit before income tax **RMB 628 million** (up 17.3% YoY)[97](index=97&type=chunk) - The increase in profit before income tax was primarily due to the Group's continuous transformation and innovation, expanding the scale of leasing assets in new energy power stations and emerging industries[97](index=97&type=chunk) Sub-segment Assets | Sub-segment Assets (RMB millions) | June 30, 2025 Net Value | June 30, 2025 Share | Dec 31, 2024 Net Value | Dec 31, 2024 Share | | :-------------------------------- | :---------------------- | :------------------ | :------------------- | :----------------- | | Green Energy Leasing | 74,334.9 | 65.6% | 57,665.2 | 59.3% | | High-End Equipment Leasing | 38,973.0 | 34.4% | 39,511.9 | 40.7% | | **Total** | **113,307.9** | **100.0%** | **97,177.1** | **100.0%** | [Funding Management](index=35&type=section&id=7%20Funding%20Management) The Group, leveraging high credit ratings, continuously strengthened its funding capabilities and diversified channels, securing approximately **RMB 774.92 billion** in bank credit lines as of June 30, 2025, and successfully issuing **RMB 5 billion** in financial bonds and **USD 700 million** in senior bonds, while effectively managing interest rate and exchange rate risks - The Group holds high credit ratings of Moody's A1, S&P A, and Fitch A, with total bank credit lines of approximately **RMB 774.92 billion** as of June 30, 2025, of which approximately **RMB 452.66 billion** remained unused[98](index=98&type=chunk) - In H1 2025, the Group successfully issued **RMB 5 billion** in 3-year financial bonds (including green financial bonds) and publicly issued **USD 400 million** in 5-year fixed-rate and **USD 300 million** in 5-year floating-rate senior bonds in the global market[99](index=99&type=chunk) - The Group effectively mitigated the impact of interest rate and exchange rate fluctuations by actively managing the matching of assets and liabilities in terms of interest rate structure and currency[99](index=99&type=chunk) - As of June 30, 2025, the Group's bank borrowings and bonds payable were **RMB 313.384 billion** and **RMB 31.965 billion**, respectively[99](index=99&type=chunk) [Risk Management](index=36&type=section&id=8%20%E9%A2%A8%E9%99%A9%E7%AE%A1%E7%90%86) The Group established a comprehensive risk management system covering all personnel, processes, businesses, institutions, products, and risk types, employing a "three lines of defense" layered management approach with a "prudent" risk appetite, and continuously improved risk management systems in H1 2025, with no significant risk events occurring - The Group aims to build an independent, comprehensive, and professional risk management system, establishing and continuously improving a holistic risk management framework covering 'all personnel, processes, businesses, institutions, products, and risk types'[100](index=100&type=chunk) - The Group adopts a layered management approach based on 'three lines of defense': business lines (first), risk management lines (second), and internal audit department (third)[100](index=100&type=chunk) - The Group adopts a 'prudent' risk appetite strategy, favoring industries and areas with mature business models, economies of scale, and excellent asset quality, as well as large enterprises, industry leaders, or high-quality listed company clients[101](index=101&type=chunk) - In H1 2025, the Group continued to improve its comprehensive risk management system, actively benchmarking against new regulatory requirements, revising policy documents for market risk and country risk, refining risk management requirements, and implementing risk management responsibilities[102](index=102&type=chunk) - The Group experienced no significant environmental, social, and governance (ESG) risk events[103](index=103&type=chunk) [Credit Risk](index=38&type=section&id=7.1%20Credit%20Risk) Credit risk is the Group's primary risk, for which it maintains a "prudent" appetite, managed through enhanced risk analysis, control, and early warning mechanisms; non-performing asset ratios and finance lease non-performing asset ratios increased but remained low, with a diversified industry distribution - Credit risk is the Group's primary risk, mainly stemming from finance lease business, and the Group generally maintains a 'prudent' risk appetite towards it[104](index=104&type=chunk) Credit Risk Indicators | Indicator (RMB millions) | June 30, 2025 | Dec 31, 2024 | | :----------------------------------- | :------------ | :------------- | | Non-Performing Assets | 2,744.8 | 2,354.0 | | Non-Performing Asset Ratio | 0.63% | 0.56% | | Non-Performing Finance Lease Related Assets | 2,037.2 | 1,683.2 | | Non-Performing Finance Lease Business Ratio | 0.97% | 0.80% | - As of June 30, 2025, the Group's largest single client's finance lease business balance accounted for **9.91%** of net capital, and the largest single group client's balance accounted for **15.85%** of net capital[111](index=111&type=chunk)[112](index=112&type=chunk) - As of June 30, 2025, the total balance of finance lease related assets for the top ten clients was **RMB 25.410 billion**, representing **12.04%** of total finance lease related assets[113](index=113&type=chunk)[114](index=114&type=chunk) Finance Lease Related Assets by Industry Segment | Industry Segment (RMB millions) | June 30, 2025 Amount | June 30, 2025 Share | Dec 31, 2024 Amount | Dec 31, 2024 Share | | :------------------------------ | :----------------- | :----------------- | :----------------- | :----------------- | | Aircraft Leasing | 638.0 | 0.3% | 635.3 | 0.3% | | Regional Development Leasing | 70,720.9 | 33.5% | 81,601.0 | 38.6% | | Shipping Leasing | 18,886.6 | 9.0% | 18,311.9 | 8.7% | | Inclusive Finance | 25,266.5 | 12.0% | 24,243.3 | 11.5% | | Green Energy and High-End Equipment Leasing | 95,473.9 | 45.2% | 86,586.0 | 40.9% | | **Total** | **210,985.9** | **100.0%** | **211,377.5** | **100.0%** | [Market Risk](index=44&type=section&id=7.2%20Market%20Risk) The Group's primary market risks include interest rate and exchange rate risks, for which it maintains a "prudent" appetite, controlled through asset-liability repricing period management and derivative financial instruments to ensure stable interest margins and mitigate market volatility - The Group's primary market risks include interest rate risk and exchange rate risk, for which it generally maintains a 'prudent' risk appetite[116](index=116&type=chunk) - Interest rate risk is managed through exposure analysis, sensitivity analysis, active management of asset-liability repricing periods, and derivative financial instruments hedging[117](index=117&type=chunk)[118](index=118&type=chunk) - Exchange rate risk is managed by actively matching asset and liability currencies in daily operations and using financial derivatives to hedge, thereby controlling the impact of exchange rate fluctuations on the Group's profit within a certain range[119](index=119&type=chunk) [Liquidity Risk](index=46&type=section&id=7.3%20Liquidity%20Risk) The Group maintains a "prudent" risk appetite for liquidity risk, managing it through reasonable liquidity reserves and diversified funding sources; as of June 30, 2025, it had an interbank borrowing limit of **RMB 12.642 billion**, indicating a sound liquidity position - The Group generally maintains a 'prudent' risk appetite for liquidity risk, aiming to cover maturing liabilities and business development funding needs through adequate liquidity reserves and diversified funding sources[120](index=120&type=chunk) - As of June 30, 2025, the Group had an interbank borrowing limit of **RMB 12.642 billion**, with cumulative interbank borrowings of **RMB 32.266 billion** in H1 2025[121](index=121&type=chunk) [Operational Risk](index=47&type=section&id=7.4.1%20Operational%20Risk) The Group maintains a "prudent" risk appetite for operational risk, and in H1 2025, it prioritized operational risk management, improving its system, optimizing tools, establishing a loss database, and strengthening joint prevention and control, with no significant operational risk events occurring - The Group generally maintains a 'prudent' risk appetite for operational risk[122](index=122&type=chunk) - In H1 2025, the Group continued to improve its operational risk management system, optimizing management methods and tools, establishing an operational risk loss database, and strengthening joint prevention and control[122](index=122&type=chunk) - In H1 2025, the Group's operational risk loss rate was zero, with no significant operational risk events occurring[122](index=122&type=chunk) [Information Technology Risk](index=47&type=section&id=7.4.2%20Information%20Technology%20Risk) The Group maintains a "prudent" risk appetite for information technology risk, and in H1 2025, its systems operated stably with normal monitoring indicators; the Group strengthened application security, advanced infrastructure reconstruction, explored data development, and optimized its security management system, with no significant IT risk events occurring - The Group generally maintains a 'prudent' risk appetite for information technology risk[123](index=123&type=chunk) - In H1 2025, the Group's systems operated stably overall, with all information technology risk monitoring indicators remaining normal[123](index=123&type=chunk) - The Group strengthened application system operational security, advanced the implementation of infrastructure reconstruction plans, explored deeper data development management, and optimized its security management system[123](index=123&type=chunk)[124](index=124&type=chunk) - In H1 2025, the Group experienced no significant information technology risk events[124](index=124&type=chunk) [Reputation Risk](index=48&type=section&id=7.4.3%20Reputation%20Risk) The Group maintains a "prudent" risk appetite for reputation risk, and in H1 2025, it continuously strengthened reputation risk management through public opinion monitoring, pre-emptive response plans, consumer rights protection, and market communication, with no significant reputation risk events occurring - The Group generally maintains a 'prudent' risk appetite for reputation risk[125](index=125&type=chunk) - In H1 2025, the Group continuously strengthened reputation risk management, actively conducting prevention and brand image building through 24/7 public opinion monitoring, pre-emptive response plans, enhanced consumer rights protection, and market communication[126](index=126&type=chunk) - In H1 2025, the Group experienced no significant reputation risk events[126](index=126&type=chunk) [Country Risk](index=49&type=section&id=7.4.4%20Country%20Risk) The Group maintains a "prudent" risk appetite for country risk, and in H1 2025, it continuously strengthened country risk management by monitoring overseas situations, improving frameworks and measurement methods, enhancing limit management, and regularly conducting risk assessments, with no significant country risk events occurring - The Group generally maintains a 'prudent' risk appetite for country risk[127](index=127&type=chunk) - In H1 2025, the Group continuously strengthened country risk management, including monitoring overseas situations, improving management frameworks and measurement methods, enhancing limit management, and regularly conducting country risk assessments[127](index=127&type=chunk) - In H1 2025, the Group experienced no significant country risk events[127](index=127&type=chunk) [Capital Management](index=49&type=section&id=8%20%E8%B3%87%E6%9C%AC%E7%AE%A1%E7%90%86) The Group aims to maintain reasonable capital adequacy ratios to meet regulatory requirements and support business development, and in H1 2025, it strengthened its capital management foundation, improved mechanisms, accelerated risk-weighted asset measurement system development, and deepened forward-looking and refined capital management, with all capital indicators meeting regulatory requirements - The Group's capital management objective is to maintain reasonable capital adequacy ratios to meet

Company Information and Financial Summary [Company Overview](index=1&type=section&id=1.1%20%E5%85%AC%E5%8F%B8%E6%A6%82%E5%86%B5) Dowway Holdings Limited announced its unaudited interim results for H1 2025, revealing a significant financial performance decline - Company Name: Dowway Holdings Limited, Stock Code: **8403**[2](index=2&type=chunk) - Reporting Period: For the six months ended June 30, 2025[2](index=2&type=chunk) - Announcement Type: Interim results announcement, including unaudited condensed consolidated financial statements and comparative figures[2](index=2&type=chunk) [Financial Summary](index=1&type=section&id=1.2%20%E8%B4%A2%E5%8A%A1%E6%91%98%E8%A6%81) Revenue decreased by **23.20%** and gross profit by **29.10%**, resulting in a **RMB 12.79 million** loss attributable to equity holders H1 2025 Key Financial Indicators Comparison | Indicator | H1 2025 (RMB million) | H1 2024 (RMB million) | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | Revenue | **44.87** | 58.42 | **-23.20%** | | Gross Profit | **4.85** | 6.84 | **-29.10%** | | Loss/(Profit) attributable to owners of the Company | **(12.79)** | 4.54 | Shifted from profit to loss | | Basic Loss Per Share (RMB cents) | **(8.64)** | 3.67 | Shifted from profit to loss | Financial Statements [Condensed Consolidated Statement of Comprehensive Income](index=2&type=section&id=2.1%20%E7%AE%80%E6%98%8E%E7%BB%BC%E5%90%88%E5%85%A8%E9%9D%A2%E6%94%B6%E7%9B%8A%E8%A1%A8) For H1 2025, the Group saw revenue decline, operating results shift from profit to loss, and a total comprehensive loss of **RMB 12.79 million** Condensed Consolidated Statement of Comprehensive Income (Summary) | Indicator | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Revenue | **44,866** | 58,416 | | Gross Profit | **4,850** | 6,839 | | Operating (Loss)/Profit | **(12,361)** | 6,402 | | (Loss)/Profit Before Income Tax | **(12,639)** | 6,064 | | (Loss)/Profit for the Period | **(12,785)** | 4,548 | | Basic (Loss)/Earnings Per Share attributable to owners of the Company (RMB cents) | **(8.64)** | 3.67 | [Condensed Consolidated Balance Sheet](index=3&type=section&id=2.2%20%E7%AE%80%E6%98%8E%E7%BB%BC%E5%90%88%E8%B5%84%E4%BA%A7%E8%B4%9F%E5%80%BA%E8%A1%A8) As of June 30, 2025, total assets slightly decreased, non-current assets significantly rose, and equity attributable to owners substantially increased Condensed Consolidated Balance Sheet (Summary) | Indicator | As of June 30, 2025 (RMB thousand) | As of Dec 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Total Non-current Assets | **9,032** | 1,606 | | Total Current Assets | **116,751** | 129,510 | | Total Assets | **125,783** | 131,116 | | Equity attributable to owners of the Company | **13,271** | 4,266 | | Total Current Liabilities | **113,508** | 125,091 | | Total Liabilities | **113,844** | 127,427 | - Total non-current assets increased from **RMB 1,606 thousand** as of December 31, 2024, to **RMB 9,032 thousand** as of June 30, 2025, primarily due to new intangible assets of **RMB 750 thousand** and goodwill of **RMB 7,243 thousand**[5](index=5&type=chunk) - Equity attributable to owners of the Company increased from **RMB 4,266 thousand** as of December 31, 2024, to **RMB 13,271 thousand** as of June 30, 2025[5](index=5&type=chunk) [Condensed Consolidated Statement of Changes in Equity](index=4&type=section&id=2.3%20%E7%AE%80%E6%98%8E%E7%BB%BC%E5%90%88%E6%9D%83%E7%9B%8A%E5%8F%98%E5%8A%A8%E8%A1%A8) Despite a comprehensive loss, equity attributable to owners increased due to significant rises in share capital and share premium from share placement activities Condensed Consolidated Statement of Changes in Equity (Summary) | Indicator | As of June 30, 2025 (RMB thousand) | As of Dec 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Share Capital | **1,937** | 1,632 | | Share Premium | **111,874** | 91,149 | | Accumulated Losses | **(94,405)** | (82,380) | | Equity attributable to owners of the Company | **13,271** | 4,266 | | Total Equity | **11,939** | 3,689 | - Total comprehensive loss for the period was **RMB 12,025 thousand**[6](index=6&type=chunk) - Share capital increased by **RMB 305 thousand** and share premium by **RMB 20,725 thousand** through share placement, contributing a total equity increase of **RMB 21,030 thousand**[6](index=6&type=chunk) [Condensed Consolidated Cash Flow Statement](index=5&type=section&id=2.4%20%E7%AE%80%E6%98%8E%E7%BB%BC%E5%90%88%E7%8E%B0%E9%87%91%E6%B5%81%E9%87%8F%E8%A1%A8) Operating cash outflow decreased, investing cash outflow significantly increased, but strong financing cash inflow resulted in a net increase in cash and cash equivalents Condensed Consolidated Cash Flow Statement (Summary) | Indicator | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | **(8,153)** | (9,187) | | Net Cash (Used in)/Generated from Investing Activities | **(1,786)** | 15 | | Net Cash Generated from Financing Activities | **19,110** | 7,867 | | Net Increase/(Decrease) in Cash and Cash Equivalents | **9,171** | (1,305) | | Cash and Cash Equivalents at End of Period | **15,382** | 11,177 | - Net cash from investing activities shifted from a net inflow of **RMB 15 thousand** in H1 2024 to a net outflow of **RMB 1,786 thousand** in H1 2025, primarily due to the purchase of intangible assets and acquisition of investments[7](index=7&type=chunk) - Net cash generated from financing activities significantly increased from **RMB 7,867 thousand** in H1 2024 to **RMB 19,110 thousand** in H1 2025, mainly driven by proceeds from placing ordinary shares and bank borrowings[7](index=7&type=chunk) Notes to the Financial Statements [Basis of Preparation and Accounting Policies](index=6&type=section&id=3.1%20%E7%BC%96%E5%88%B6%E5%9F%BA%E7%A1%80%E4%B8%8E%E4%BC%9A%E8%AE%A1%E6%94%BF%E7%AD%96) The interim financial information is prepared under HKAS 34 and GEM Listing Rules, consistent with the 2024 annual report's accounting policies - Financial information is prepared in accordance with Hong Kong Accounting Standard **34** and Chapter **18** of the GEM Listing Rules[12](index=12&type=chunk) - The accounting policies adopted are consistent with those applied in the financial statements for the year ended December 31, 2024[13](index=13&type=chunk) [Application of Amendments to Hong Kong Financial Reporting Standards](index=7&type=section&id=3.2%20%E9%A6%99%E6%B8%AF%E8%B4%A2%E5%8A%A1%E6%8A%A5%E5%91%8A%E5%87%86%E5%88%99%E4%BF%AE%E8%AE%A2%E7%9A%84%E5%BA%94%E7%94%A8) The Group adopted new and amended HKFRS, leading to new policies and disclosures but no significant financial impact, with un-effective standards under evaluation - The newly adopted and amended standards had no significant impact on the financial statements, but led to new accounting policies and additional disclosures[14](index=14&type=chunk) - The Group is currently assessing the impact of new and amended Hong Kong Financial Reporting Standards that are not yet effective[14](index=14&type=chunk) [Estimates](index=7&type=section&id=3.3%20%E4%BC%B0%E7%AE%97) Interim financial statements involve management's judgments and estimates on accounting policies and financial amounts, where actual results may differ - Significant judgments and estimates made by management in preparing the interim financial information are consistent with those made in preparing the 2024 annual report[15](index=15&type=chunk) [Financial Risk Management](index=7&type=section&id=3.4%20%E8%B4%A2%E5%8A%A1%E9%A3%8E%E9%99%A9%E7%AE%A1%E7%90%86) The Group manages market, credit, and liquidity risks, with no significant changes to its risk management policies since the reporting period end - The Group's business is exposed to market risk (including foreign exchange risk), credit risk, and liquidity risk[16](index=16&type=chunk) - There have been no changes to risk management policies since the end of the reporting period[17](index=17&type=chunk) [Financial Risk Factors](index=7&type=section&id=3.4.1%20%E8%B4%A2%E5%8A%A1%E9%A3%8E%E9%99%A9%E5%9B%A0%E7%B4%A0) The Group's business primarily faces market, credit, and liquidity risks, with detailed management information available in the annual financial report - Financial risk factors include market risk (foreign exchange risk), credit risk, and liquidity risk[16](index=16&type=chunk) [Liquidity Risk](index=7&type=section&id=3.4.2%20%E6%B5%81%E5%8A%A8%E8%B5%84%E9%87%91%E9%A3%8E%E9%99%A9) The Group's finance department continuously forecasts and monitors cash flows to ensure adequate liquidity for operational needs - The Group's finance department monitors liquidity requirements through rolling forecasts to ensure sufficient cash on hand for operations[18](index=18&type=chunk) [Revenue Information](index=8&type=section&id=3.5%20%E6%94%B6%E5%85%A5%E4%BF%A1%E6%81%AF) Total revenue decreased year-on-year, with declines in most segments, but significant digital platform service revenue growth partially offset the reduction Revenue Details (by Service Type) | Revenue Source | H1 2025 (RMB thousand) | % of Total | H1 2024 (RMB thousand) | % of Total | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Automotive-related Exhibition and Event Services | **12,553** | **27.98%** | 24,837 | 42.52% | **-49.46%** | | Non-automotive-related Exhibition and Event Services | **22,131** | **49.33%** | 23,864 | 40.85% | **-7.26%** | | Showroom-related Services | **114** | **0.25%** | 1,544 | 2.64% | **-92.62%** | | Sales of Consumer Products | **4,898** | **10.92%** | 8,143 | 13.94% | **-39.97%** | | Rental Income | **81** | **0.18%** | – | 0% | New | | Provision of Digital Platform Services | **5,089** | **11.34%** | 28 | 0.05% | **+18075%** | | **Total Revenue** | **44,866** | **100%** | **58,416** | **100%** | **-23.20%** | [Other Income](index=8&type=section&id=3.6%20%E5%85%B6%E4%BB%96%E6%94%B6%E7%9B%8A) Other income significantly decreased, primarily due to a substantial reduction in the reversal of expected credit losses on trade receivables Other Income Details | Item | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Exchange Gain/(Loss) | **2** | (43) | | Government Grants | **30** | 16 | | Others | **5** | 294 | | Reversal of Expected Credit Losses on Trade Receivables | **513** | 8,745 | | Reversal of Expected Credit Losses on Contract Assets | – | 566 | | **Total** | **550** | **9,578** | [Income Tax Expense](index=9&type=section&id=3.7%20%E6%89%80%E5%BE%97%E7%A8%8E%E5%BC%80%E6%94%AF) Income tax expense significantly decreased, aligning with the Group's loss position for the reporting period Income Tax Expense | Item | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Current Tax on Profit for the Period | **146** | 1,516 | | **Income Tax Expense** | **146** | **1,516** | [Loss/Earnings Per Share](index=9&type=section&id=3.8%20%E6%AF%8F%E8%82%A1%EF%BC%88%E4%BA%8F%E6%8D%9F%EF%BC%89%E2%95%95%E7%9B%88%E5%88%A9) The company shifted from earnings to a basic loss per share of **RMB 8.64 cents**, primarily driven by the period's overall loss Loss/Earnings Per Share | Indicator | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Total (Loss)/Profit attributable to shareholders (RMB) | **(12,785,000)** | 4,548,000 | | Weighted Average Number of Ordinary Shares in Issue (thousand shares) | **148,000** | 124,000 | | Basic (Loss)/Earnings Per Share (RMB cents) | **(8.64)** | 3.67 | - No diluted loss/earnings per share is presented as there were no potentially dilutive ordinary shares during the reporting period[24](index=24&type=chunk) - China Enterprise Income Tax is calculated at a statutory rate of **25%**, while Hong Kong-registered entities have a profits tax rate of **8.25%**, with no Hong Kong profits tax provision for the period[25](index=25&type=chunk) [Trade Receivables](index=10&type=section&id=3.9%20%E8%B4%B8%E6%98%93%E5%BA%94%E6%94%B6%E6%AC%BE%E9%A1%B9) Net trade receivables decreased year-on-year as of June 30, 2025, driven by a lower total amount and a slight reduction in impairment provisions Trade Receivables Net and Ageing Analysis | Indicator | As of June 30, 2025 (RMB thousand) | As of Dec 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Trade Receivables | **45,928** | 67,943 | | Less: Impairment Provision for Trade Receivables | **(17,655)** | (18,075) | | **Trade Receivables — Net** | **28,273** | **49,868** | | **Ageing Analysis:** | | | | Up to 90 days | **18,793** | 35,895 | | 91 to 180 days | **535** | 3,498 | | Over 180 days | **8,945** | 10,475 | [Deposits, Prepayments and Other Receivables](index=10&type=section&id=3.10%20%E6%8C%89%E9%87%91%E3%80%81%E9%A2%84%E4%BB%98%E6%AC%BE%E9%A1%B9%E5%8F%8A%E5%85%B6%E4%BB%96%E5%BA%94%E6%94%B6%E6%AC%BE%E9%A1%B9) Net deposits, prepayments, and other receivables slightly increased as of June 30, 2025, mainly due to increased loans to employees Deposits, Prepayments and Other Receivables | Item | As of June 30, 2025 (RMB thousand) | As of Dec 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Deposits | **351** | 336 | | Loans to Employees | **1,452** | 591 | | Prepayments | **18,118** | 18,139 | | **Total** | **19,921** | **19,066** | [Share Capital and Share Premium](index=11&type=section&id=3.11%20%E8%82%A1%E6%9C%AC%E5%8F%8A%E8%82%A1%E4%BB%BD%E6%BA%A2%E4%BB%B7) Share capital and share premium significantly increased through ordinary share placements, leading to substantial growth in total issued and paid capital Share Capital and Share Premium Movement | Item | Number of Shares | Par Value of Ordinary Shares (USD) | Equivalent of Ordinary Shares (RMB thousand) | Share Premium (RMB thousand) | Total (RMB thousand) | | :--- | :--- | :--- | :--- | :--- | :--- | | Balance as of Dec 31, 2024 and Jan 1, 2025 | **127,000,000** | 254,000 | 1,632 | 91,149 | 92,781 | | Placement of Ordinary Shares | **21,000,000** | 42,000 | 305 | 20,725 | 21,030 | | **Balance as of June 30, 2025** | **148,000,000** | **296,000** | **1,937** | **111,874** | **113,811** | - A placement of **9,000,000** ordinary shares was completed on April 9, 2025, raising net proceeds of approximately **HKD 8.95 million**[30](index=30&type=chunk) - A placement of **12,000,000** ordinary shares was completed on June 17, 2025, raising net proceeds of approximately **HKD 12.88 million**[30](index=30&type=chunk) [Trade and Other Payables](index=12&type=section&id=3.12%20%E8%B4%B8%E6%98%93%E5%8F%8A%E5%85%B6%E4%BB%96%E5%BA%94%E4%BB%98%E6%AC%BE%E9%A1%B9) Total trade and other payables decreased year-on-year, with trade payables and taxes payable declining, while amounts due to directors and employee benefits rose Trade and Other Payables Details and Ageing Analysis | Item | As of June 30, 2025 (RMB thousand) | As of Dec 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Trade Payables | **53,693** | 73,689 | | Amounts Due to Directors | **1,576** | 644 | | Employee Benefits Payable | **6,338** | 4,176 | | Other Taxes Payable | **5,310** | 8,246 | | Others | **3,696** | 4,517 | | **Total** | **70,613** | **91,272** | | **Trade Payables Ageing Analysis:** | | | | 0 to 90 days | **33,106** | 40,164 | | 91 to 180 days | **4,872** | 16,566 | | 181 to 365 days | **10,808** | 10,027 | | Over 365 days | **4,907** | 6,932 | [Dividends](index=12&type=section&id=3.13%20%E8%82%A1%E6%81%AF) The Group neither paid nor declared any dividends during the reporting period or the corresponding period last year - The Group neither paid nor declared any dividends for the periods ended June 30, 2024, and 2025[32](index=32&type=chunk) [Related Party Transactions](index=13&type=section&id=3.14%20%E5%85%B3%E8%BF%9E%E6%96%B9%E4%BA%A4%E6%98%93) The Group had balances with related parties, showing an increase in amounts due to directors and a significant rise in key management personnel compensation Balances with Related Parties | Item | As of June 30, 2025 (RMB thousand) | As of Dec 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Amounts Due to Directors of the Company | **1,576** | 644 | Key Management Personnel Compensation | Item | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Salaries and Wages | **3,731** | 1,105 | | Pension Scheme and Other Social Security Contributions | **374** | 152 | | Housing Benefits | – | 28 | | Other Costs and Benefits | – | 6 | | **Total** | **4,105** | **1,291** | [Events After the Reporting Period](index=13&type=section&id=3.15%20%E6%8A%A5%E5%91%8A%E6%9C%9F%E5%90%8E%E4%BA%8B%E9%A1%B9) After the reporting period, the company completed a share subscription agreement for **6,000,000 shares** with Executive Director Mr. Li Huaguo on August 8, 2025 - A subscription agreement with Mr. Li for **6,000,000** shares was entered into on May 27, 2025, and completed on August 8, 2025[35](index=35&type=chunk) Market and Business Review [Market Review](index=14&type=section&id=4.1%20%E5%B8%82%E5%9C%BA%E5%9B%9E%E9%A1%B1) The global exhibition industry fully recovered in 2024, with China's market leading, driven by new energy vehicles, cultural IP commercialization, and government support - In 2024, the global exhibition industry fully recovered, with total exhibition area reaching approximately **138 million square meters**, and the Asia-Pacific region accounting for **25.8%**[37](index=37&type=chunk) - China's indoor net exhibition area reached **12.4 million square meters**, ranking first globally, with the market recovering and surpassing pre-pandemic levels[37](index=37&type=chunk) - The growth of China's exhibition industry is primarily driven by the popularization of new energy vehicle exhibitions, commercialization of intellectual property from cultural events, and government policy support[40](index=40&type=chunk) - The output multiplier for the exhibition industry is estimated at **2.45**, meaning every **RMB 1** of direct exhibition expenditure generates an additional **RMB 1.45** in indirect and induced economic activity[39](index=39&type=chunk) [Business Review](index=15&type=section&id=4.2%20%E4%B8%9A%E5%8A%A1%E5%9B%9E%E9%A1%B1) The Group maintained its leading position in exhibition and event management, completing **38 projects** with revenue of **RMB 44.87 million** (**23.20% decrease**), while SaaS platform services grew significantly - The Group maintains a leading position in the exhibition and event management industry, particularly in automotive display and promotion[42](index=42&type=chunk) - During the reporting period, **38** exhibition and event projects, **2** showroom projects, digital platform systems, and one-stop value chain services were completed[42](index=42&type=chunk) - Total revenue was approximately **RMB 44.87 million**, a year-on-year decrease of approximately **23.20%**, but SaaS platform service output grew significantly[42](index=42&type=chunk) - The Group has invested in new business branches and digital capabilities to adapt to the industry's shift towards a high-tech, comprehensive service model[42](index=42&type=chunk) Financial Review [Revenue](index=16&type=section&id=5.1%20%E6%94%B6%E7%9B%8A) Total revenue decreased by **23.20%** year-on-year due to core business transformation and a drop in showroom revenue, partially offset by strong SaaS platform service growth Revenue Composition and Year-on-Year Change | Revenue Source | H1 2025 (RMB thousand) | % of Total | H1 2024 (RMB thousand) | % of Total | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Automotive-related Exhibitions and Events | **12,553** | **27.98%** | 24,837 | 42.52% | **-49.46%** | | Non-automotive-related Exhibitions and Events | **22,131** | **49.33%** | 23,864 | 40.85% | **-7.26%** | | Showroom-related Services | **114** | **0.25%** | 1,544 | 2.64% | **-92.62%** | | One-stop Value Chain Services | **4,898** | **10.92%** | 8,143 | 13.94% | **-39.97%** | | SaaS Platform Services | **5,089** | **11.34%** | 28 | 0.05% | **+18075%** | | Rental Income | **81** | **0.18%** | – | 0% | New | | **Total** | **44,866** | **100%** | **58,416** | **100%** | **-23.20%** | - The decline in revenue is primarily due to the ongoing transformation and optimization of the core business structure, leading to a significant decrease in showroom-related activity revenue[46](index=46&type=chunk) - SaaS platform service revenue significantly increased from **RMB 28 thousand** to **RMB 5.09 million**, partially offsetting the overall revenue decline[46](index=46&type=chunk)[48](index=48&type=chunk) [Cost of Services/Products](index=17&type=section&id=5.2%20%E6%9C%8D%E5%8A%A1%E2%95%95%E4%BA%A7%E5%93%81%E6%88%90%E6%9C%AC) Service costs decreased by **22.37%** year-on-year, mainly due to lower supplier costs for exhibition services, but rising sales costs emphasize the need for operational efficiency Service Cost Details | Item | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Cost of Services Provided by Suppliers | **27,202** | 38,503 | | Cost of Consumer Products | **5,008** | 8,062 | | Staff Costs | **2,660** | 3,373 | | Operating Lease Rentals and Related Expenses for Buildings | **3,845** | 375 | | **Total** | **40,016** | **51,577** | - Service costs decreased by approximately **22.37%**, or **RMB 11.54 million** year-on-year[51](index=51&type=chunk) - The primary reason for the decrease in service costs was a reduction of approximately **29.35%** in costs for services provided by suppliers for exhibition and event-related services[52](index=52&type=chunk) [Gross Profit and Gross Margin](index=18&type=section&id=5.3%20%E6%AF%9B%E5%88%A9%E5%8F%8A%E6%AF%9B%E5%88%A9%E7%8E%87) Gross profit decreased by **29.10%** year-on-year, with the gross margin declining from **11.71%** to **10.81%** Gross Profit and Gross Margin | Indicator | H1 2025 (RMB million) | H1 2024 (RMB million) | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | Gross Profit | **4.85** | 6.84 | **-29.10%** | | Gross Margin | **10.81%** | 11.71% | **-0.90 percentage points** | [Selling Expenses](index=18&type=section&id=5.4%20%E9%94%80%E5%94%AE%E5%BC%80%E6%94%AF) Selling expenses surged by **110.01%** year-on-year, driven by significant increases in supplier service costs, entertainment expenses, and other expenditures Selling Expenses Details | Item | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Cost of Services Provided by Suppliers | **70** | – | | Entertainment Expenses | **407** | 207 | | Others | **1,946** | 579 | | **Total** | **2,688** | **1,280** | - Selling expenses increased by approximately **110.01%**, or **RMB 1.41 million**, year-on-year[57](index=57&type=chunk) - Key growth factors include an increase of **RMB 70 thousand** in costs for services provided by suppliers, approximately **RMB 0.20 million** in entertainment expenses, and approximately **RMB 1.37 million** in other expenses[57](index=57&type=chunk) [Administrative Expenses](index=19&type=section&id=5.5%20%E8%A1%8C%E6%94%BF%E5%BC%80%E6%94%AF) Administrative expenses significantly increased by **80.86%** year-on-year, primarily driven by a substantial rise in staff costs Administrative Expenses Details | Item | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Staff Costs | **9,654** | 3,328 | | Management Consulting and Other Service Expenses | **2,986** | 3,176 | | Auditor's Remuneration | **548** | 940 | | **Total** | **14,744** | **8,152** | - Administrative expenses increased by approximately **80.86%**, or **RMB 6.59 million**, year-on-year[60](index=60&type=chunk) - The main reason for the increase in administrative expenses was the rise in staff costs from approximately **RMB 3.33 million** to approximately **RMB 9.66 million**[60](index=60&type=chunk) [Other Income — Net](index=20&type=section&id=5.6%20%E5%85%B6%E4%BB%96%E6%94%B6%E7%9B%8A%20%E2%80%94%20%E6%B7%A8%E9%A2%9D) Net other income significantly decreased, primarily due to a substantial reduction in the reversal of expected credit losses on trade receivables Other Income — Net | Item | H1 2025 (RMB million) | H1 2024 (RMB million) | Year-on-Year Change (RMB million) | | :--- | :--- | :--- | :--- | | Net Other Income | **0.55** | 9.58 | **-9.03** | - Primarily due to the reversal of expected credit losses on trade receivables and government grants[61](index=61&type=chunk) [Finance Income](index=20&type=section&id=5.7%20%E8%B4%A2%E5%8A%A1%E6%94%B6%E5%85%A5) Finance income slightly decreased, primarily derived from interest on bank balances and deposits Finance Income | Item | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Finance Income | **8** | 15 | [Finance Expenses](index=20&type=section&id=5.8%20%E8%B4%A2%E5%8A%A1%E5%BC%80%E6%94%AF) Finance expenses decreased, mainly comprising interest expenses on bank borrowings and lease liabilities Finance Expenses | Item | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Finance Expenses | **286** | 353 | [Loss Before Income Tax](index=20&type=section&id=5.9%20%E9%99%A4%E6%89%80%E5%BE%97%E7%A8%8E%E5%89%8D%E4%BA%8F%E6%8D%9F) The Group recorded a loss before income tax of **RMB 12.64 million**, shifting from profit, primarily due to increased selling and administrative expenses (Loss)/Profit Before Income Tax | Indicator | H1 2025 (RMB million) | H1 2024 (RMB million) | | :--- | :--- | :--- | | (Loss)/Profit Before Income Tax | **(12.64)** | 6.06 | - Primarily due to increased selling and administrative expenses during the reporting period[64](index=64&type=chunk) [Income Tax Expense](index=20&type=section&id=5.10%20%E6%89%80%E5%BE%97%E7%A8%8E%E5%BC%80%E6%94%AF) Income tax expense significantly decreased, aligning with the company's shift from a profitable to a loss-making financial position Income Tax Expense | Indicator | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Income Tax Expense | **146** | 1,516 | [Loss for the Period](index=20&type=section&id=5.11%20%E6%8A%A5%E5%91%8A%E6%9C%9F%E9%97%B4%E4%BA%8F%E6%8D%9F) The Group recorded a loss of **RMB 12.79 million** for the period, a significant shift from the **RMB 4.55 million** profit in the prior year (Loss)/Profit for the Period | Indicator | H1 2025 (RMB million) | H1 2024 (RMB million) | | :--- | :--- | :--- | | (Loss)/Profit for the Period | **(12.79)** | 4.55 | Liquidity and Financial Resources [Capital Structure](index=21&type=section&id=6.1%20%E8%B5%84%E6%9C%AC%E6%9E%B6%E6%9E%84) The Group's capital structure remained largely unchanged during the reporting period, except for equity fundraising activities - Apart from equity fundraising activities, there were no significant changes to the Group's capital structure during the reporting period[67](index=67&type=chunk) [Cash Position](index=21&type=section&id=6.2%20%E7%8E%B0%E9%87%91%E7%8A%B6%E5%86%B5) Cash and cash equivalents increased to **RMB 15.38 million** as of June 30, 2025, primarily driven by significant net cash inflow from financing activities Cash Flow Data | Item | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | **(8,153)** | (9,187) | | Net Cash (Used in)/Generated from Investing Activities | **(1,786)** | 15 | | Net Cash Generated from Financing Activities | **19,110** | 7,867 | | Net Increase/(Decrease) in Cash and Cash Equivalents | **9,171** | (1,262) | | **Cash and Cash Equivalents at End of Period** | **15,382** | **11,177** | - Cash and cash equivalents at the end of the period were approximately **RMB 15.38 million**, primarily denominated in RMB[69](index=69&type=chunk) [Borrowings](index=21&type=section&id=6.3%20%E5%80%9F%E6%AC%BE) As of June 30, 2025, bank borrowings increased, with private borrowings and acceptance bills present, but no other outstanding debt instruments - Bank borrowings amounted to **RMB 22 million** (December 31, 2024: **RMB 12.98 million**)[70](index=70&type=chunk) - Private borrowings balance was **RMB 5.58 million**[70](index=70&type=chunk) - Acceptance bills of **RMB 6.58 million** were used to acquire a company[71](index=71&type=chunk) - Directors confirmed no significant adverse changes in debt and contingent liabilities during the reporting period[72](index=72&type=chunk) [Pledge of Assets](index=21&type=section&id=6.4%20%E8%B5%84%E4%BA%A7%E6%8A%B5%E6%8A%BC) The Group had no assets pledged as of June 30, 2025 - The Group had no assets pledged as of June 30, 2025[73](index=73&type=chunk) [Gearing Ratio](index=22&type=section&id=6.5%20%E8%B5%84%E6%9C%AC%E8%B4%9F%E5%80%BA%E6%AF%94%E7%8E%87) The Group's gearing ratio significantly decreased as of June 30, 2025, though it remains at a high level Gearing Ratio | Indicator | As of June 30, 2025 (RMB thousand) | As of Dec 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Total Interest-bearing Borrowings | **34,157** | 28,563 | | Total Equity | **11,939** | 3,689 | | **Gearing Ratio** | **286.10%** | **774.27%** | [Interim Dividend](index=22&type=section&id=6.6%20%E4%B8%AD%E6%9C%9F%E8%82%A1%E6%81%AF) The Board does not recommend the payment of an interim dividend for the reporting period - The Board does not recommend the payment of an interim dividend for the reporting period (June 30, 2024: nil)[75](index=75&type=chunk) [Equity Fundraising Activities and Use of Net Proceeds](index=22&type=section&id=6.7%20%E8%82%A1%E6%9D%83%E7%AD%B9%E8%B5%84%E6%B4%BB%E5%8A%A8%E5%8F%8A%E6%89%80%E5%BE%97%E6%AC%BE%E9%A1%B9%E5%87%80%E9%A2%9D%E7%94%A8%E9%80%94) The Group raised approximately **HKD 28.43 million** in net proceeds from three equity fundraising activities for working capital, debt repayment, and new business R&D Equity Fundraising Activities and Use of Net Proceeds | Fundraising Activity | Use of Proceeds | Planned Use (HKD thousand) | Actual Use (HKD thousand) | Unutilized Net Proceeds (HKD thousand) | | :--- | :--- | :--- | :--- | :--- | | March 2025 Subscription | General Working Capital | **8,950** | **5,500** | **3,450** | | May 2025 Placement | Repayment of Acceptance Bills | **7,000** | – | **7,000** | | | R&D Costs for New Businesses | **4,000** | – | **4,000** | | | General Working Capital | **1,880** | – | **1,880** | | May 2025 Subscription | General Working Capital | **6,600** | – | **6,600** | | **Total** | | **28,430** | **5,500** | **22,930** | - The March 2025 subscription raised net proceeds of approximately **HKD 8.95 million** for general working capital[76](index=76&type=chunk) - The May 2025 placement raised net proceeds of approximately **HKD 12.88 million** for repayment of acceptance bills, R&D for new businesses, and general working capital[77](index=77&type=chunk)[78](index=78&type=chunk) - The May 2025 subscription raised net proceeds of approximately **HKD 6.6 million** for general working capital[79](index=79&type=chunk) [Material Investments Held, Material Acquisitions and Disposals of Subsidiaries, and Future Plans for Material Investments or Capital Assets](index=24&type=section&id=6.8%20%E6%89%80%E6%8C%81%E9%87%8D%E5%A4%A7%E6%8A%95%E8%B5%84%E3%80%81%E9%99%84%E5%B1%AC%E5%85%AC%E5%8F%B8%E7%9A%84%E9%87%8D%E5%A4%A7%E6%94%B6%E8%B3%BC%E5%8F%8A%E5%87%BA%E5%94%AE%EF%BC%8C%E4%BB%A5%E5%8F%8A%E9%87%8D%E5%A4%A7%E6%8A%95%E8%B3%87%E6%88%96%E8%B3%87%E6%9C%AC%E8%B3%87%E7%94%A2%E7%9A%84%E6%9C%AA%E4%BE%86%E8%A8%88%E5%8A%83) The Group established a new subsidiary for consumer product sales and acquired a technology-driven company to enhance digital services and expand e-commerce and supply chain - A new subsidiary was established, with **51%** ownership, for selling consumer products in China[81](index=81&type=chunk) - A technology-driven company, focused on advanced digital solutions including e-commerce and supply chain management systems, was acquired for a cost of **RMB 7,516,504**[81](index=81&type=chunk) - The acquisition was paid with **RMB 939,563** in cash and **RMB 6,576,941** in acceptance bills[81](index=81&type=chunk) [Capital Commitments and Contingent Liabilities](index=24&type=section&id=6.9%20%E8%B5%84%E6%9C%AC%E6%89%BF%E6%8B%85%E5%8F%8A%E6%88%96%E7%84%B6%E8%B4%9F%E5%80%BA) The Group had no significant capital commitments or contingent liabilities as of June 30, 2025 - The Group had no significant capital commitments or contingent liabilities as of June 30, 2025[82](index=82&type=chunk) Other Information [Employees and Remuneration Policy](index=24&type=section&id=7.1%20%E5%83%B1%E5%93%A1%E5%8F%8A%E8%96%AA%E9%85%AC%E6%94%BF%E7%AD%96) As of June 30, 2025, the Group employed **118 staff**, with significantly increased staff costs, and maintains regular performance reviews, training, and social welfare compliance - As of June 30, 2025, the Group employed **118** staff, including **19** management personnel[83](index=83&type=chunk) - Staff costs (including directors' emoluments) for the reporting period were approximately **RMB 12.31 million**, a significant increase from **RMB 6.67 million** in the prior year[83](index=83&type=chunk) - The Group regularly reviews employee performance and determines salaries, benefits, and discretionary bonuses based on qualifications, contributions, seniority, and performance[83](index=83&type=chunk) - The Group makes social insurance and housing provident fund contributions for all eligible employees, totaling approximately **RMB 1.37 million** during the reporting period[83](index=83&type=chunk) [Foreign Exchange Risk](index=25&type=section&id=7.2%20%E5%A4%96%E6%B1%87%E9%A3%8E%E9%99%A9) Operating primarily in China with RMB-settled transactions, the Group does not face significant foreign exchange risk in its ordinary business - The Group primarily operates in China, with transactions settled in RMB, and therefore does not face any significant foreign exchange risk[84](index=84&type=chunk) [Credit Risk](index=25&type=section&id=7.3%20%E4%BF%A1%E8%B4%B7%E9%A3%8E%E9%99%A9) Credit risk from cash, receivables, and contract assets is managed by depositing with reputable institutions and closely monitoring key customer creditworthiness - Credit risk primarily arises from cash and cash equivalents, trade and other receivables, bills receivable, and contract assets[85](index=85&type=chunk) - The Group places domestic deposits with reputable national financial institutions in China with good credit ratings and overseas deposits with reputable international financial institutions[85](index=85&type=chunk) - Over **51%** of trade receivables are from well-known automotive companies, and management mitigates risk through close communication and assessing new customers' financial standing[85](index=85&type=chunk)[86](index=86&type=chunk) - The risk of default for other receivables and bills receivable is low[86](index=86&type=chunk)[87](index=87&type=chunk) [Liquidity Risk](index=25&type=section&id=7.4%20%E6%B5%81%E5%8A%A8%E8%B5%84%E9%87%91%E9%A3%8E%E9%99%A9) The Group regularly monitors liquidity needs through rolling forecasts, ensuring sufficient cash reserves for both short-term and long-term requirements - The Group regularly monitors existing and anticipated liquidity requirements, ensuring sufficient cash on hand through rolling forecasts to meet operational needs[88](index=88&type=chunk) Outlook [Outlook](index=26&type=section&id=%E5%B1%95%E6%9C%9B) Despite China's upgraded growth forecast and persistent domestic challenges, the Group will enhance cost-effectiveness, consolidate core business, integrate with emerging industries, and pursue strategic acquisitions for new revenue and operational flexibility - The International Monetary Fund has revised China's full-year GDP growth forecast for 2025 upwards to **4.8%**, but warns of weak domestic demand and structural challenges in the real estate sector[89](index=89&type=chunk) - The Group will continue to focus on enhancing cost-effectiveness, consolidating its core business model, and accelerating integration with new emerging industries[90](index=90&type=chunk) - The successful acquisition of Yiwang Holdings Limited, a technology-driven enterprise, on April 28, 2025, aims to integrate digital capabilities, enhance operational efficiency and customer experience, and capture new revenue streams in high-growth digital sectors[90](index=90&type=chunk) - The Group will continue to seek strategic partnerships, diversify its customer base, improve service feedback mechanisms, and strive to deliver sustainable returns to shareholders[91](index=91&type=chunk) Corporate Governance and Other Disclosures [Corporate Governance Practices](index=27&type=section&id=9.1%20%E4%BC%81%E4%B8%9A%E7%AE%A1%E6%B2%BB%E5%B8%B8%E8%A6%8F) The Company complies with GEM Listing Rules' Corporate Governance Code, with a deviation where Mr. Wong Hiu Tik holds both Chairman and CEO roles, deemed in the Group's best interest - The Company has complied with all applicable code provisions of the Corporate Governance Code set out in Appendix C1 to the GEM Listing Rules[92](index=92&type=chunk) - A deviation from code provision C.2.1 (separation of Chairman and Chief Executive Officer roles) exists, with Mr. Wong Hiu Tik holding both positions, which the Board believes is in the best interest of the Group[92](index=92&type=chunk) [Competing Interests](index=27&type=section&id=9.2%20%E7%AB%9E%E4%BA%89%E6%9D%83%E7%9B%8A) No directors, controlling shareholders, or their associates engaged in any business directly or indirectly competing with the Group during the reporting period - During the reporting period, no director, controlling shareholder, or substantial shareholder, or any of their respective close associates, engaged in any business that competes or may compete, directly or indirectly, with the Group's business[93](index=93&type=chunk) [Directors' Interests in Transactions, Arrangements and Contracts](index=27&type=section&id=9.3%20%E8%91%A3%E4%BA%8B%E4%BA%8E%E4%BA%A4%E6%98%93%E3%80%81%E5%AE%89%E6%8E%92%E5%8F%8A%E5%90%88%E7%B4%84%E7%9A%84%E6%9D%83%E7%9B%8A) Neither the Company nor its subsidiaries entered into any material transactions, arrangements, or contracts where directors or their connected entities held a material interest - Neither the Company nor its holding company, subsidiaries, or fellow subsidiaries entered into any material transactions, arrangements, or contracts during the reporting period or at any time subsisting in which a director or an entity connected with a director had a material direct or indirect interest[94](index=94&type=chunk) [Connected Transactions and Continuing Connected Transactions](index=27&type=section&id=9.4%20%E5%85%B3%E8%BF%9E%E4%BA%A4%E6%98%93%E5%8F%8A%E6%8C%81%E7%BB%AD%E5%85%B3%E8%BF%9E%E4%BA%A4%E6%98%93) Except for the May 2025 Subscription detailed in the equity fundraising section, the Group had no other disclosable connected or continuing connected transactions - Save for the May 2025 Subscription as detailed in the section "Equity Fundraising Activities and Use of Net Proceeds — May 2025 Subscription", the Group did not enter into any other connected transactions or continuing connected transactions subject to disclosure requirements under the GEM Listing Rules during the reporting period[95](index=95&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=27&type=section&id=9.5%20%E8%B4%AD%E4%B9%B0%E3%80%81%E5%87%BA%E5%94%AE%E6%88%96%E8%B5%8E%E5%9B%9E%E6%9C%AC%E5%85%AC%E5%8F%B8%E4%B8%8A%E5%B8%82%E8%AF%81%E5%88%B8) Neither the Company nor its subsidiaries purchased, sold, or redeemed any of the Company's listed securities during the reporting period - Neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities during the reporting period[96](index=96&type=chunk) [Directors' Rights to Acquire Shares or Debentures](index=27&type=section&id=9.6%20%E8%91%A3%E4%BA%8B%E8%B4%AD%E4%B9%B0%E8%82%A1%E4%BB%BD%E6%88%96%E5%80%BA%E6%9D%83%E8%AF%81%E4%B9%8B%E6%9D%83%E5%88%A9) Except as disclosed, no arrangements existed for directors to acquire benefits through shares or debentures, nor were any subscription rights granted or exercised - Save as disclosed in this announcement, at no time during the reporting period and up to the date of this announcement has the Group or any of its subsidiaries entered into any arrangements to enable the directors to acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate, and no rights to subscribe for equity or debt securities of the Company or any other body corporate have been granted to, or exercised by, any director or their respective spouses or children under **18** years of age[97](index=97&type=chunk) [Share Option Scheme](index=28&type=section&id=9.7%20%E8%B4%AD%E8%82%A1%E6%9D%83%E8%AE%A1%E5%88%92) The Group's ten-year share option scheme, adopted on May 16, 2018, saw no grants, exercises, or cancellations of options during the reporting period, with no outstanding options - The Group adopted a share option scheme on May 16, 2018, with a ten-year validity, expiring on May 15, 2028[98](index=98&type=chunk) - During the reporting period, no share options were granted, exercised, or cancelled, and there were no outstanding share options[99](index=99&type=chunk) [Required Standard of Securities Transactions by Directors](index=28&type=section&id=9.8%20%E8%91%A3%E4%BA%8B%E8%BF%9B%E8%A1%8C%E8%AF%81%E5%88%B8%E4%BA%A4%E6%98%93%E4%B9%8B%E8%A7%84%E5%AE%9A%E6%A0%87%E5%87%86) The Company adopted GEM Listing Rules' required standard for directors' securities transactions, confirming compliance with no known breaches during the reporting period - The Company has adopted the required standard of dealings set out in Rules **5.48** to **5.67** of the GEM Listing Rules as the code of conduct for directors' securities transactions[100](index=100&type=chunk) - Directors have confirmed compliance with the required standard of dealings, and no breaches were known during the reporting period[100](index=100&type=chunk) [Audit Committee](index=28&type=section&id=9.9%20%E5%AE%A1%E6%A0%B8%E5%A7%94%E5%91%98%E4%BC%9A) The Audit Committee, composed of three independent non-executive directors, reviewed the interim financial statements and confirmed their compliance with applicable accounting standards and requirements - The Audit Committee comprises three independent non-executive directors, with Mr. Tam Chak Chi as Chairman[101](index=101&type=chunk) - The Audit Committee reviewed the interim financial statements and confirmed their preparation in compliance with applicable accounting standards and requirements, with adequate disclosures[101](index=101&type=chunk) [Board Order and Others](index=28&type=section&id=9.10%20%E8%91%A3%E4%BA%8B%E4%BC%9A%E5%91%BD%E4%BB%A4%E5%8F%8A%E5%85%B6%E4%BB%96) This announcement, issued by Chairman and CEO Mr. Wong Hiu Tik on August 29, 2025, includes the Board of Directors list and a responsibility statement for the information - The announcement was issued by Mr. Wong Hiu Tik, Chairman, Chief Executive Officer, and Executive Director of the Board, on August 29, 2025[102](index=102&type=chunk) - The information in this announcement is published in accordance with the GEM Listing Rules, and the Directors collectively and individually accept full responsibility for the information[103](index=103&type=chunk)

Announcement and Financial Summary [Financial Summary](index=1&type=section&id=Financial%20Summary) This announcement presents the unaudited interim results of China High Speed Transmission Equipment Group Co., Ltd. for the six months ended June 30, 2025, summarizing key financial indicators that show a slight decrease in revenue but significant improvements in gross profit and net loss Financial Summary for the Six Months Ended June 30, 2025 | Metric | As of June 30, 2025 (RMB thousands) | As of June 30, 2024 (RMB thousands) | Change | | :--- | :--- | :--- | :--- | | Revenue from contracts with customers | 9,978,981 | 10,159,694 | -1.8% | | Gross Profit | 1,852,086 | 1,354,468 | 36.7% | | Loss for the period attributable to owners of the Company | (136,061) | (528,733) | -74.3% | | Basic and diluted loss per share (RMB) | (0.083) | (0.323) | -74.3% | | Total Assets (at period-end) | 38,635,484 | 37,709,287 | 2.5% | | Total Liabilities (at period-end) | 25,793,742 | 25,150,002 | 2.6% | | Net Assets (at period-end) | 12,841,742 | 12,559,285 | 2.2% | | Net assets per share (RMB) | 7.9 | 7.7 | 2.6% | | Gearing ratio (%) | 66.8 | 66.7 | 0.1 percentage points | Interim Condensed Consolidated Financial Statements [Interim Condensed Consolidated Statement of Profit or Loss](index=2&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss) The statement of profit or loss indicates a slight revenue decrease, but a substantial increase in gross profit, a shift from operating loss to profit, and a significant narrowing of loss attributable to owners of the Company Key Data from Interim Condensed Consolidated Statement of Profit or Loss | Metric | As of June 30, 2025 (RMB thousands) | As of June 30, 2024 (RMB thousands) | | :--- | :--- | :--- | | Revenue from contracts with customers | 9,978,981 | 10,159,694 | | Cost of sales | (8,126,895) | (8,805,226) | | Gross Profit | 1,852,086 | 1,354,468 | | Operating profit / (loss) | 469,477 | (192,051) | | Profit / (loss) for the period | 241,619 | (347,131) | | Profit / (loss) for the period attributable to owners of the Company | (136,061) | (528,733) | | Basic and diluted loss per share (RMB) | (0.083) | (0.323) | [Interim Condensed Consolidated Statement of Comprehensive Income](index=3&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) The statement of comprehensive income shows improved profit for the period, but a total comprehensive loss attributable to owners of the Company due to fair value changes of equity instruments at fair value through other comprehensive income Key Data from Interim Condensed Consolidated Statement of Comprehensive Income | Metric | As of June 30, 2025 (RMB thousands) | As of June 30, 2024 (RMB thousands) | | :--- | :--- | :--- | | Profit / (loss) for the period | 241,619 | (347,131) | | Other comprehensive income / (loss), net of tax | 40,838 | (133,202) | | Total comprehensive income / (loss) for the period | 282,457 | (480,333) | | Total comprehensive income / (loss) for the period attributable to owners of the Company | (94,910) | (660,791) | [Interim Condensed Consolidated Statement of Financial Position](index=4&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) The statement of financial position as of June 30, 2025, indicates growth in both total assets and total liabilities, with a significant improvement in net current assets Key Data from Interim Condensed Consolidated Statement of Financial Position | Metric | As of June 30, 2025 (RMB thousands) | As of December 31, 2024 (RMB thousands) | Change | | :--- | :--- | :--- | :--- | | Total Assets | 38,635,484 | 37,709,287 | 2.5% | | Non-current Assets | 13,058,912 | 13,522,531 | -3.4% | | Current Assets | 25,576,572 | 24,186,756 | 5.7% | | Total Liabilities | 25,793,742 | 25,150,002 | 2.6% | | Current Liabilities | 18,239,131 | 18,152,973 | 0.5% | | Non-current Liabilities | 7,554,611 | 6,997,029 | 8.0% | | Net Assets | 12,841,742 | 12,559,285 | 2.2% | | Net Current Assets | 7,337,441 | 6,033,783 | 21.6% | Notes to the Interim Condensed Consolidated Financial Information [Basis of Preparation and Accounting Policies](index=6&type=section&id=1.%20Basis%20of%20Preparation) This interim condensed consolidated financial information is prepared in accordance with IAS 34 and HKEX Listing Rules, adopting amendments to IFRS accounting standards without significant impact on financial position - This interim financial information is unaudited but has been reviewed by the audit committee and independent professional accountants, Grant Thornton Hong Kong Limited[4](index=4&type=chunk)[11](index=11&type=chunk) - The Group has initially applied the amendments to IAS 21 "Lack of Exchangeability," which did not have a significant impact on its financial position and performance[12](index=12&type=chunk) [Revenue and Operating Segment Information](index=7&type=section&id=3.%20Revenue%20and%20Operating%20Segment%20Information) The Group's business is divided into four reportable segments: wind power and industrial gear transmission equipment, rail transit gear transmission equipment, trading business, and others, with wind power and industrial gear transmission equipment being the primary revenue source, and trading business having been suspended - The Group has four reportable operating segments: wind power and industrial gear transmission equipment, rail transit gear transmission equipment, trading business, and others (including lighting engineering, municipal landscape engineering, and design-procurement-construction engineering)[14](index=14&type=chunk)[15](index=15&type=chunk) Revenue by Segment for H1 2025 | Segment | Revenue from external customers (RMB thousands) | | :--- | :--- | | Wind power and industrial gear transmission equipment | 9,802,673 | | Rail transit gear transmission equipment | 175,716 | | Trading business | － | | Others | 592 | | **Total** | **9,978,981** | Revenue by Region for H1 2025 | Region | Revenue from external customers (RMB thousands) | | :--- | :--- | | China | 8,797,341 | | United States | 722,901 | | Europe | 108,380 | | Other countries | 350,359 | | **Total** | **9,978,981** | [Other Income and Net (Losses) / Gains](index=11&type=section&id=4.%20Other%20Income) Other income primarily consists of government subsidies and scrap sales, while net other losses are mainly affected by fair value losses on financial assets at fair value through profit or loss Composition of Other Income for H1 2025 | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Dividend income | 633 | 3,624 | | Government grants | 78,263 | 90,319 | | Sales of scrap and materials | 60,652 | 52,090 | | Others | 18,340 | 18,428 | | **Total** | **157,888** | **164,461** | Net Other (Losses) / Gains for H1 2025 | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Net (loss) / gain on disposal of property, plant and equipment | (2,031) | 8,143 | | Net foreign exchange gains | 41,631 | 1,143 | | Net fair value (loss) / gain on financial assets at fair value through profit or loss | (428,515) | 8,851 | | Impairment loss on property, plant and equipment (recognised) / reversed | (7,284) | 2,670 | | **Total** | **(396,199)** | **20,807** | [Expenses by Nature](index=11&type=section&id=6.%20Expenses%20by%20Nature) Total expenses decreased, primarily due to a significant reduction in cost of inventories sold, although employee benefit expenses, depreciation, and inventory write-downs increased Expenses by Nature for H1 2025 | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Cost of inventories sold | 7,275,677 | 8,006,992 | | Employee benefit expenses | 941,656 | 918,920 | | Depreciation of property, plant and equipment | 390,406 | 351,199 | | Depreciation of right-of-use assets | 9,288 | 8,589 | | Write-down of inventories | 129,060 | 11,731 | | Other expenses | 435,226 | 430,128 | | **Total** | **9,181,313** | **9,727,559** | [Net Finance Costs](index=12&type=section&id=7.%20Finance%20Costs) Net finance costs significantly decreased, mainly due to reduced interest expenses on bank and other borrowings and the absence of interest expenses on put option liabilities Net Finance Costs for H1 2025 | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Finance income (interest income from bank deposits) | 42,545 | 62,895 | | Interest expenses on bank and other borrowings | (187,748) | (273,802) | | Put option liabilities: reversal of discount | – | (129,000) | | **Net finance costs** | **(145,203)** | **(338,240)** | [Income Tax Expense / (Credit)](index=12&type=section&id=8.%20Income%20Tax%20Expense%20%2F%20%28Credit%29) Income tax shifted from a credit to an expense, primarily due to an increase in current income tax and a decrease in deferred tax credit Income Tax Expense / (Credit) for H1 2025 | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Current income tax – expense for the period | 122,932 | 83,158 | | Deferred tax | (49,756) | (266,791) | | **Income tax expense / (credit)** | **73,176** | **(183,633)** | - Corporate income tax for PRC subsidiaries is levied at a rate of **25%**, with some high-tech development enterprises enjoying a preferential rate of **15%**[25](index=25&type=chunk) - Hong Kong profits tax is calculated on a two-tiered basis, with the first **HK$2 million** at **8.25%** and the remainder at **16.5%**[26](index=26&type=chunk) [Loss Per Share and Dividends](index=14&type=section&id=9.%20Loss%20Per%20Share) Basic loss per share significantly narrowed, and the Board of Directors does not recommend declaring an interim dividend Loss Per Share for H1 2025 | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Loss attributable to owners of the Company | (136,061) | (528,733) | | Weighted average number of ordinary shares in issue (thousands) | 1,635,291 | 1,635,291 | | Basic loss per share (RMB) | (0.083) | (0.323) | - The Directors do not recommend the declaration of any interim dividend for the six months ended June 30, 2025[31](index=31&type=chunk) [Trade and Other Receivables](index=14&type=section&id=11.%20Trade%20and%20Other%20Receivables) Total trade receivables increased, but trade receivables from trading business customers were fully provided for impairment loss, and the Group is pursuing legal actions or investigations for insurance redemption and EPC project-related amounts Trade and Other Receivables (net of loss allowance) | Item | As of June 30, 2025 (RMB thousands) | As of December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Trade receivables | 7,607,642 | 6,159,052 | | Other receivables | 1,375,738 | 1,441,015 | | **Total** | **8,983,380** | **7,600,067** | - Trade receivables from trading business customers were fully provided for impairment loss of **RMB 3,188,981,000**[32](index=32&type=chunk) - The Group has initiated legal proceedings for **RMB 612,600,000** receivable from an insurance company, with a favorable outcome expected[35](index=35&type=chunk) Impairment Loss on Financial Assets Recognized for H1 2025 | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Impairment loss on trade receivables recognized | 13,398 | 561,762 | | Impairment loss on other receivables recognized | 76,482 | 247,692 | | **Total** | **89,880** | **809,454** | [Trade and Bills Payables and Other Payables](index=17&type=section&id=12.%20Trade%20and%20Bills%20Payables%20and%20Other%20Payables) Total trade and bills payables increased, while other payables decreased Trade and Bills Payables and Other Payables | Item | As of June 30, 2025 (RMB thousands) | As of December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Trade payables | 4,982,816 | 4,287,778 | | Bills payables | 5,554,190 | 5,084,115 | | Other payables | 1,358,203 | 1,816,485 | | **Total** | **11,895,209** | **11,188,378** | [Borrowings](index=18&type=section&id=13.%20Borrowings) Total borrowings slightly increased, with a higher proportion of non-current borrowings and a lower proportion of current borrowings Composition of Borrowings | Item | As of June 30, 2025 (RMB thousands) | As of December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Current borrowings | 4,163,025 | 4,237,783 | | Non-current borrowings | 5,341,462 | 4,928,562 | | **Total** | **9,504,487** | **9,166,345** | - Secured borrowings are collateralized by assets, including **100%** equity interest in NGC Huai'an[41](index=41&type=chunk) [Contingent Liabilities and Capital Commitments](index=19&type=section&id=14.%20Contingent%20Liabilities) As of June 30, 2025, the Group had no financial guarantee liabilities but still had contracted capital commitments not yet provided for - As of June 30, 2025, bank loans granted to an associate have been fully repaid, and no liabilities for financial guarantees are recognized in the consolidated statement of financial position[42](index=42&type=chunk) Capital Commitments | Item | As of June 30, 2025 (RMB thousands) | | :--- | :--- | | Property, plant and equipment | 494,056 | [Assets Pledged as Security](index=19&type=section&id=16.%20Assets%20Pledged%20as%20Security) The Group pledges bills receivable, property, plant and equipment, right-of-use assets, and pledged bank deposits as security for bank credit Total Pledged Assets | Item | As of June 30, 2025 (RMB thousands) | As of December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Bills receivable | 237,245 | 220,059 | | Property, plant and equipment | 2,622,856 | 3,551,839 | | Right-of-use assets | 491,403 | 497,957 | | Pledged bank deposits | 3,296,512 | 2,810,765 | | **Total** | **6,648,016** | **7,080,620** | Business Review [Overall Business Performance](index=20&type=section&id=Overall%20Business%20Performance) During the review period, the Group's sales revenue slightly decreased by 1.8%, but gross profit margin significantly improved to 18.6%, and loss attributable to owners of the Company narrowed by 74.3% Overall Business Performance for H1 2025 | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | Change | | :--- | :--- | :--- | :--- | | Sales revenue | 9,978,981 | 10,159,694 | -1.8% | | Gross profit margin | 18.6% | 13.3% | +5.3 percentage points | | Loss attributable to owners of the Company | (136,061) | (528,733) | -74.3% | | Basic loss per share (RMB) | (0.083) | (0.323) | -74.3% | - The reduction in loss was primarily due to the suspension of trading business, absence of significant impairment provisions, and increased revenue and profit from the wind power and industrial gear transmission equipment business[46](index=46&type=chunk) [Wind Power Gear Transmission Equipment](index=20&type=section&id=1.%20Wind%20Power%20Gear%20Transmission%20Equipment) Sales revenue for wind power gear transmission equipment business increased by **61.5%** year-on-year to **RMB 8,867,412,000**, with the Group leading in offshore large-megawatt wind power equipment and actively expanding overseas markets and technological innovation Sales Revenue of Wind Power Gear Transmission Equipment Business | Period | Sales revenue (RMB thousands) | Year-on-year growth | | :--- | :--- | :--- | | H1 2025 | 8,867,412 | 61.5% | | H1 2024 | 5,489,427 | - | - The Group is a leader in products and technology for offshore large-megawatt wind power gear transmission equipment, with large-megawatt products such as **13.6MW-20MW** already delivered in batches[47](index=47&type=chunk) - Actively expanding overseas customers, including international wind turbine manufacturers like GE Vernova and Siemens Energy Wind Power, and strengthening cooperation through overseas subsidiaries[48](index=48&type=chunk) [Industrial Gear Transmission Equipment](index=21&type=section&id=2.%20Industrial%20Gear%20Transmission%20Equipment) Sales revenue for industrial gear transmission equipment business decreased by **19.3%** year-on-year to **RMB 935,261,000**, as the Group adheres to a green development strategy, promotes product technology upgrades, and strengthens international expansion Sales Revenue of Industrial Gear Transmission Equipment Business | Period | Sales revenue (RMB thousands) | Year-on-year change | | :--- | :--- | :--- | | H1 2025 | 935,261 | -19.3% | | H1 2024 | 1,158,771 | - | - Adhering to a green development strategy, developing standardized, modular, intelligent products, and high-efficiency, high-reliability, low-energy consumption electromechanical control integrated drive systems[49](index=49&type=chunk) - Showing positive development trends in high-end equipment manufacturing and localization of core equipment, with significant improvement in overseas market applications[49](index=49&type=chunk) [Rail Transit Gear Transmission Equipment](index=22&type=section&id=3.%20Rail%20Transit%20Gear%20Transmission%20Equipment) Sales revenue for rail transit gear transmission equipment business increased by **29.4%** year-on-year to **RMB 175,716,000**, with products widely used in high-speed rail and subway systems, achieving multiple international certifications and successful international market expansion Sales Revenue of Rail Transit Gear Transmission Equipment Business | Period | Sales revenue (RMB thousands) | Year-on-year growth | | :--- | :--- | :--- | | H1 2025 | 175,716 | 29.4% | | H1 2024 | 135,792 | - | - Products have obtained **ISO/TS 22163**, **CRCC** certification, and **IRIS** system "Silver Label" certification, successfully applied in rail transit transmission equipment in China and multiple countries and regions[51](index=51&type=chunk) [Domestic and Export Sales](index=22&type=section&id=Domestic%20and%20Export%20Sales) Overseas sales increased by **19.8%** year-on-year to **RMB 1,181,640,000**, accounting for **11.8%** of total sales, with major customers located in the United States, Europe, India, and Brazil Overseas Sales and Proportion | Metric | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | Change | | :--- | :--- | :--- | :--- | | Overseas sales | 1,181,640 | 985,961 | 19.8% | | Percentage of total sales | 11.8% | 9.7% | +2.1 percentage points | [Market Outlook and Challenges](index=23&type=section&id=Market%20Outlook%20and%20Challenges) Facing global economic slowdown, severe damage to international trade order, and low-price competition and overcapacity in the wind power industry, the Group will respond through technological innovation, supply chain optimization, and expansion into emerging and overseas markets - The global environment is complex and volatile, while China's economy maintains steady progress, with **GDP growing by 5.3%** year-on-year in the first half[53](index=53&type=chunk) - The wind power industry faces challenges such as low-price competition, overcapacity, increasing share of gearbox self-production by turbine manufacturers, and intensifying international trade barriers[55](index=55&type=chunk) - The industrial gear industry has entered a mature market competition phase, with declining demand due to steel and cement industry capacity reduction, prompting the Group to "maintain existing markets" and "seek new growth" by expanding into emerging sectors and overseas exports[56](index=56&type=chunk) - With slowing growth in domestic subway construction, the Group will actively explore domestic and international markets for subway gear transmission equipment[57](index=57&type=chunk) [Strategic Outlook for H2 2025](index=25&type=section&id=Strategic%20Outlook%20for%20H2%202025) In the second half, the Group will continue to adhere to its strategic focus of "innovative thinking, zero-defect quality, professional service, and customer proximity," enriching its product matrix, enhancing quality and service, and anchoring green development with technological innovation leading transformation - The strategic focus for the second half is "innovative thinking, zero-defect quality, professional service, and customer proximity"[58](index=58&type=chunk) - The Group will continue to grasp market trends, tap market potential, and actively explore new spaces for business growth[58](index=58&type=chunk) - Anchoring green development, with technological innovation as the engine, leading economic green and low-carbon transformation[58](index=58&type=chunk) Financial Performance Analysis [Revenue Analysis](index=25&type=section&id=Revenue%20Analysis) Total sales revenue decreased by 1.8% year-on-year, primarily due to the suspension of trading business, but wind power gear transmission equipment sales significantly increased Revenue Changes by Business Segment | Business Segment | 2025 (RMB thousands) | 2024 (RMB thousands) | Change | | :--- | :--- | :--- | :--- | | Wind power gear transmission equipment | 8,867,412 | 5,489,427 | 61.5% | | Industrial gear transmission equipment | 935,261 | 1,158,771 | -19.3% | | Rail transit gear transmission equipment | 175,716 | 135,792 | 29.4% | | Trading business | – | 3,373,243 | Not applicable | | Other products | 592 | 2,461 | -75.9% | | **Total** | **9,978,981** | **10,159,694** | **-1.8%** | - The trading business has been suspended since November 2024, which is one of the main reasons for the decrease in total revenue[59](index=59&type=chunk) [Gross Profit Margin and Gross Profit Analysis](index=25&type=section&id=Gross%20Profit%20Margin%20and%20Gross%20Profit%20Analysis) Consolidated gross profit margin increased by **5.3 percentage points** to **18.6%**, and consolidated gross profit grew by **36.7%** year-on-year, mainly due to increased gross profit from wind power and industrial gear transmission equipment and the suspension of the lower-margin trading business Changes in Gross Profit Margin and Gross Profit | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | Change | | :--- | :--- | :--- | :--- | | Consolidated gross profit margin | 18.6% | 13.3% | +5.3 percentage points | | Consolidated gross profit | 1,852,086 | 1,354,468 | 36.7% | [Other Income and Net (Losses) / Gains Analysis](index=25&type=section&id=Other%20Income%20and%20Net%20%28Losses%29%20%2F%20Gains%20Analysis) Other income slightly decreased by **4.0%**, while net other losses shifted from a gain to a loss year-on-year, primarily affected by fair value losses on financial assets at fair value through profit or loss Changes in Other Income and Net (Losses) / Gains | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | Change | | :--- | :--- | :--- | :--- | | Other income | 157,888 | 164,461 | -4.0% | | Net other (losses) / gains | (396,199) | 20,807 | From gain to loss | - Net other losses were primarily due to fair value losses on financial assets at fair value through profit or loss[63](index=63&type=chunk) [Selling and Distribution Expenses Analysis](index=26&type=section&id=Selling%20and%20Distribution%20Expenses%20Analysis) Selling and distribution expenses increased by **36.3%** year-on-year, with their percentage of sales revenue rising to **3.1%**, mainly including product packaging, transportation, staff costs, and business expenses Changes in Selling and Distribution Expenses | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | Change | | :--- | :--- | :--- | :--- | | Selling and distribution expenses | 305,682 | 224,312 | 36.3% | | Percentage of sales revenue | 3.1% | 2.2% | +0.9 percentage points | [Administrative Expenses Analysis](index=26&type=section&id=Administrative%20Expenses%20Analysis) Administrative expenses increased by **3.2%** year-on-year, with their percentage of sales revenue rising to **3.0%**, primarily due to increased professional service fees for legal and independent investigations Changes in Administrative Expenses | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | Change | | :--- | :--- | :--- | :--- | | Administrative expenses | 297,208 | 287,906 | 3.2% | | Percentage of sales revenue | 3.0% | 2.8% | +0.2 percentage points | - The increase in administrative expenses was mainly due to increased professional service fees for legal and independent investigations[65](index=65&type=chunk) [Research and Development Costs Analysis](index=26&type=section&id=Research%20and%20Development%20Costs%20Analysis) Research and development costs increased by **10.1%** year-on-year, with their percentage of sales revenue rising to **4.5%**, indicating the Group's continued increase in R&D investment Changes in Research and Development Costs | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | Change | | :--- | :--- | :--- | :--- | | Research and development costs | 451,528 | 410,115 | 10.1% | | Percentage of sales revenue | 4.5% | 4.0% | +0.5 percentage points | [Net Impairment Loss on Financial Assets Recognized Analysis](index=26&type=section&id=Net%20Impairment%20Loss%20on%20Financial%20Assets%20Recognized%20Analysis) Net impairment loss on financial assets recognized significantly decreased by **88.9%**, primarily including impairment losses on trade and other receivables Changes in Net Impairment Loss on Financial Assets Recognized | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | Change | | :--- | :--- | :--- | :--- | | Net impairment loss on financial assets recognized | 89,880 | 809,454 | -88.9% | - Impairment losses primarily included impairment loss on trade receivables of **RMB 13,398,000** and impairment loss on other receivables of **RMB 76,482,000**[67](index=67&type=chunk) [Finance Costs Analysis](index=26&type=section&id=Finance%20Costs%20Analysis) Finance costs decreased by **53.2%** year-on-year, mainly due to the absence of interest expenses on put option liabilities and a reduction in loan interest rates and scale Changes in Finance Costs | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | Change | | :--- | :--- | :--- | :--- | | Finance costs | 187,748 | 401,135 | -53.2% | - The decrease in finance costs was mainly due to the absence of interest expenses on put option liabilities (RMB 129,000,000 in the prior period) and a reduction in loan interest rates and scale[68](index=68&type=chunk) [Assets, Liabilities and Liquidity Analysis](index=27&type=section&id=Assets%2C%20Liabilities%20and%20Liquidity%20Analysis) Both total assets and total liabilities increased, with net current assets significantly rising by **21.6%** and total cash and bank balances increasing by **8.4%**, indicating improved liquidity Key Data on Assets, Liabilities and Liquidity | Metric | As of June 30, 2025 (RMB thousands) | As of December 31, 2024 (RMB thousands) | Change | | :--- | :--- | :--- | :--- | | Total Assets | 38,635,484 | 37,709,287 | 2.5% | | Total Liabilities | 25,793,742 | 25,150,002 | 2.6% | | Net Current Assets | 7,337,441 | 6,033,783 | 21.6% | | Total cash and bank balances | 7,248,677 | 6,684,984 | 8.4% | | Total borrowings | 9,504,487 | 9,166,345 | 3.7% | - The Directors believe the Group has sufficient funds to support working capital and capital expenditures[71](index=71&type=chunk) Risk Management and Capital Structure [Capital Structure and Gearing Ratio](index=27&type=section&id=Capital%20Structure%20and%20Gearing%20Ratio) The Group primarily funds its operations through shareholders' equity, bank credit, and internal resources, with the gearing ratio slightly increasing to **66.8%** - The Group primarily funds its business operations through shareholders' equity, bank and other credit, and internal resources[73](index=73&type=chunk) Gearing Ratio | Metric | As of June 30, 2025 | As of December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Gearing ratio (%) | 66.8 | 66.7 | +0.1 percentage points | - As of June 30, 2025, borrowings at fixed interest rates accounted for approximately **41.6%** of total borrowings[74](index=74&type=chunk) [Exchange Rate Fluctuation Risk](index=28&type=section&id=Exchange%20Rate%20Fluctuation%20Risk) The Group faces exchange rate risk, but actively manages net foreign currency assets and liabilities to mitigate it, recording net exchange gains during the review period - The Group primarily operates in China, with export sales and imported equipment denominated in USD and EUR, exposing it to exchange rate risk[77](index=77&type=chunk) Net Exchange Gains | Period | Net exchange gains (RMB thousands) | | :--- | :--- | | H1 2025 | 41,631 | | H1 2024 | 1,143 | [Interest Rate Risk](index=28&type=section&id=Interest%20Rate%20Risk) Changes in bank loan interest rates will directly impact the Group's debt costs, and the Group will actively monitor credit policies and strengthen cash management to reduce finance costs - Changes in the loan prime rate announced by the People's Bank of China will directly impact the Group's debt costs[78](index=78&type=chunk) - The Group will actively monitor changes in credit policies, strengthen cash management, broaden financing channels, and strive to reduce finance costs[78](index=78&type=chunk) Other Information [Employees and Remuneration](index=29&type=section&id=Employees%20and%20Remuneration) As of June 30, 2025, the Group had approximately **8,107** employees, with staff costs of approximately **RMB 941,656,000** Number of Employees and Staff Costs | Metric | As of June 30, 2025 | As of June 30, 2024 | | :--- | :--- | :--- | | Number of employees | 8,107 | 7,897 | | Staff costs (RMB thousands) | 941,656 | 918,920 | [Material Acquisitions and Disposals](index=29&type=section&id=Material%20Acquisitions%20and%20Disposals) During the review period, the Group did not undertake any material acquisitions or disposals of subsidiaries and associates - During the review period, the Group did not undertake any material acquisitions or disposals of subsidiaries and associates[80](index=80&type=chunk) Excerpt from Independent Practitioner's Review Report [Basis for Qualified Conclusion](index=29&type=section&id=Basis%20for%20Qualified%20Conclusion) The accountants could not obtain sufficient evidence regarding the accuracy of trading business-related amounts, EPC project progress and costs, and the valuation of financial assets at fair value through profit or loss - The total carrying amount of trade receivables and prepayments from trading business, approximately **RMB 3,188,981,000** (June 30, 2025), has been fully impaired, but the accountants could not obtain sufficient evidence regarding their existence, accuracy, valuation, and completeness[82](index=82&type=chunk)[84](index=84&type=chunk) - Trading business-related amounts are subject to criminal and independent investigations, and the accountants could not determine if they constitute related party balances and if disclosures are complete[83](index=83&type=chunk)[84](index=84&type=chunk) - There is uncertainty regarding the total carrying amount of contract liabilities, prepayments, and inventories under EPC projects, and the accountants could not obtain sufficient evidence to confirm project progress and revenue/cost recognition[85](index=85&type=chunk)[86](index=86&type=chunk)[87](index=87&type=chunk) - For equity investments in three limited partnerships (financial assets at fair value through profit or loss), a fair value loss of **RMB 423,300,000** was recognized, but the accountants could not obtain sufficient evidence regarding the accuracy of their carrying amount and valuation[88](index=88&type=chunk) [Qualified Conclusion](index=31&type=section&id=Qualified%20Conclusion) Except for the potential impact of the matters described in the "Basis for Qualified Conclusion" section, the accountants found no other matters suggesting the interim financial statements were not prepared in accordance with IAS 34 - Except for the potential impact of the matters described in the "Basis for Qualified Conclusion" paragraph, the accountants found no other matters suggesting that the interim financial statements were not prepared in all material respects in accordance with IAS 34[89](index=89&type=chunk) Views of the Company and Audit Committee on the Qualified Conclusion [Treatment of Trade Receivables and Prepayments from Trading Business](index=31&type=section&id=Treatment%20of%20Trade%20Receivables%20and%20Prepayments%20from%20Trading%20Business) Management has fully provided for impairment losses on trading business-related amounts and is fully assisting criminal and independent investigations to resolve issues and protect company interests, with all bulk commodity trading operations suspended - Management has fully provided for impairment losses on trade receivables and prepayments arising from the trading business, considering this a prudent measure[90](index=90&type=chunk) - The relevant amounts are suspected of embezzlement and misappropriation, subject to criminal and independent investigations, and management will fully assist and take legal action[90](index=90&type=chunk) - All bulk commodity trading operations have been suspended[90](index=90&type=chunk) [Treatment of Transactions Under EPC Projects](index=32&type=section&id=Treatment%20of%20Transactions%20Under%20EPC%20Projects) Investigation into EPC project costs and progress is difficult due to incomplete handover information from former directors and uncooperative subcontractors; management is taking legal action and believes investigation results will help resolve matters related to the qualified conclusion - EPC projects were managed by former directors, with incomplete handover information making cost and progress investigations difficult[92](index=92&type=chunk) - Management is taking legal action and believes the results of the investigation and reconciliation will help resolve matters related to the qualified conclusion[92](index=92&type=chunk) [Treatment of Financial Assets at Fair Value Through Profit or Loss](index=32&type=section&id=Treatment%20of%20Financial%20Assets%20at%20Fair%20Value%20Through%20Profit%20or%20Loss) Valuation of equity investments in three limited partnerships is challenging due to unavailable documents; management has engaged lawyers for due diligence and recognized a fair value loss of **RMB 423 million** based on prudence - Documents and information required for the valuation of equity investments in three limited partnerships are not yet available, and the valuation work is incomplete[94](index=94&type=chunk) - Management has engaged lawyers for due diligence, concluding that the recoverability of certain receivables is very low, and recognized a fair value loss of **RMB 423 million** based on prudent considerations[94](index=94&type=chunk) Corporate Governance and Other Matters [Compliance with Corporate Governance Code](index=32&type=section&id=Corporate%20Governance%20and%20Other%20Matters) The company complies with the Corporate Governance Code, but the roles of Chairman and CEO are performed by the same person, an arrangement the Board believes benefits business development and will be reviewed periodically - The Company complies with Appendix C1 "Corporate Governance Code" of the Listing Rules, except for deviation from Code Provision C.2.1 (roles of Chairman and Chief Executive should be separate)[96](index=96&type=chunk) - The Board believes that Mr. Hu Jichun serving as both Chairman and Chief Executive Officer is beneficial for business development and management and will periodically review the possibility of separating the roles[97](index=97&type=chunk) [Standard Code for Securities Transactions by Directors](index=33&type=section&id=Standard%20Code%20for%20Securities%20Transactions%20by%20Directors) The company has adopted the Standard Code and confirms that all directors have complied with its provisions during the review period - The Company has adopted Appendix C3 "Model Code for Securities Transactions by Directors of Listed Issuers" of the Listing Rules, and all Directors confirm compliance during the review period[98](index=98&type=chunk) [Dealings in Listed Securities](index=33&type=section&id=Dealings%20in%20Listed%20Securities) During the review period, neither the company nor its subsidiaries purchased, sold, or redeemed any of the company's listed securities - During the review period, neither the Company nor its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[99](index=99&type=chunk) [Events After Reporting Period](index=33&type=section&id=Events%20After%20Reporting%20Period) Except as disclosed in this announcement, no other significant events affecting the company and its subsidiaries occurred after the review period and up to the date of this announcement - Except as disclosed in this announcement, no other significant events affecting the Company and its subsidiaries occurred after the review period and up to the date of this announcement[100](index=100&type=chunk)

[Financial Highlights](index=1&type=section&id=Financial%20Highlights) For the six months ended June 30, 2025, Jiayao Holdings Limited experienced significant declines in revenue and gross profit, shifting from a profit to a loss compared to the same period last year, with no interim dividend recommended by the board [Summary of Key Financial Performance](index=1&type=section&id=Summary%20of%20Key%20Financial%20Performance) For the six months ended June 30, 2025, Jiayao Holdings Limited experienced significant declines in revenue and gross profit, shifting from a profit to a loss compared to the same period last year, with no interim dividend recommended by the board Summary of Key Financial Performance (For the six months ended June 30) | Indicator | 2025 (RMB million) | 2024 (RMB million) | Year-on-year Change (%) | | :--- | :----------------- | :----------------- | :-------------------- | | Revenue | 260.5 | 742.8 | -64.9% | | Gross Profit | 57.8 | 153.6 | -62.3% | | Gross Profit Margin | 22.2% | 20.7% | +1.5% | | (Loss)/Profit Attributable to Owners of the Company | (16.8) | 14.8 | Shift from profit to loss | | Interim Dividend | Not recommended | Nil | Not applicable | [Condensed Consolidated Interim Financial Information](index=2&type=section&id=Condensed%20Consolidated%20Interim%20Financial%20Information) [Condensed Consolidated Statement of Comprehensive Income](index=2&type=section&id=Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) For the six months ended June 30, 2025, the Group recorded a loss of RMB 22.2 million for the period, compared to a profit of RMB 27.2 million in the prior year, primarily due to a significant decrease in revenue and operating loss Condensed Consolidated Statement of Comprehensive Income (For the six months ended June 30) | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :------------------ | :------------------ | | Revenue | 260,459 | 742,765 | | Cost of Sales | (202,617) | (589,157) | | Gross Profit | 57,842 | 153,608 | | Operating (Loss)/Profit | (19,048) | 37,435 | | (Loss)/Profit Before Income Tax | (20,888) | 37,113 | | Income Tax Expense | (1,328) | (9,866) | | (Loss)/Profit for the Period | (22,216) | 27,247 | | (Loss)/Profit Attributable to Owners of the Company | (16,751) | 14,808 | | (Loss)/Profit Attributable to Non-controlling Interests | (5,465) | 12,439 | [Condensed Consolidated Statement of Financial Position](index=4&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the Group's total assets and total equity both decreased compared to December 31, 2024, reflecting business contraction and profitability challenges Condensed Consolidated Statement of Financial Position (As of June 30) | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :------------------ | :------------------ | | **Assets** | | | | Non-current Assets | 135,461 | 134,547 | | Current Assets | 469,996 | 731,890 | | **Total Assets** | **605,457** | **866,437** | | **Equity** | | | | Equity Attributable to Owners of the Company | 266,018 | 450,426 | | Non-controlling Interests | 39,359 | 41,870 | | **Total Equity** | **305,377** | **492,296** | | **Liabilities** | | | | Non-current Liabilities | 53,733 | 49,924 | | Current Liabilities | 246,347 | 324,217 | | **Total Liabilities** | **300,080** | **374,141** | | **Total Equity and Liabilities** | **605,457** | **866,437** | [Notes to the Condensed Consolidated Interim Financial Information](index=6&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Interim%20Financial%20Information) This section provides detailed notes to the condensed consolidated interim financial information, covering general company information, accounting policies, segment results, expenses, income tax, earnings per share, dividends, receivables and payables, and subsequent events, offering context and specific data for understanding the financial statements [1 General Information](index=6&type=section&id=1%20General%20Information) Jiayao Holdings Limited is an exempted company incorporated in the Cayman Islands, primarily engaged in the design, production, and sale of e-cigarettes and related products in China, providing ancillary services, with products mainly for export - The Company was incorporated in the Cayman Islands on August 5, 2013, with its ordinary shares listed on the Main Board of the Hong Kong Stock Exchange on June 27, 2014[11](index=11&type=chunk)[12](index=12&type=chunk) - The Group is primarily engaged in the design, production, and sale of e-cigarettes and related products in China, and provides e-cigarette ancillary services, with products mainly for export sales, subject to China's e-cigarette management measures[11](index=11&type=chunk) [2 Basis of Preparation and Accounting Policies](index=6&type=section&id=2%20Basis%20of%20Preparation%20and%20Accounting%20Policies) These interim financial statements are prepared in accordance with HKAS 34 and are consistent with HKFRS for the year ended December 31, 2024, with no significant impact from new or revised standards adopted in the current or future periods - This condensed consolidated interim financial information is prepared in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting" and should be read in conjunction with the annual financial statements prepared in accordance with Hong Kong Financial Reporting Standards[14](index=14&type=chunk) - New and amended standards mandatorily adopted by the Group for the financial year beginning January 1, 2025 (such as amendments to HKAS 21 and HKFRS 1), had no impact on amounts recognized in prior periods and are not expected to have a significant impact on the current or future periods[15](index=15&type=chunk)[18](index=18&type=chunk) - Certain new standards and amendments to standards that have been published but are not yet mandatorily effective are not expected to have a significant impact on the current or future reporting periods[16](index=16&type=chunk)[17](index=17&type=chunk) [3 Segment Information](index=8&type=section&id=3%20Segment%20Information) The Group manages its business by segments, primarily e-cigarette sales and ancillary services, with the paper cigarette packaging segment discontinued in October 2024, showing a significant decline in e-cigarette sales but substantial growth in ancillary services revenue - The paper cigarette packaging and other paper packaging segment was considered a discontinued operation in October 2024[19](index=19&type=chunk) Segment Revenue (For the six months ended June 30) | Segment | 2025 (RMB thousand) | 2024 (RMB thousand) | Year-on-year Change (%) | | :--- | :------------------ | :------------------ | :-------------------- | | E-cigarette Sales | 221,007 | 393,135 | -43.8% | | E-cigarette Ancillary Services | 39,452 | 19,488 | +102.4% | | Paper Cigarette Packaging and Other Paper Packaging | – | 330,142 | Not applicable | | **Total** | **260,459** | **742,765** | **-64.9%** | Segment Revenue by Location (For the six months ended June 30) | Region | 2025 (RMB thousand) | 2024 (RMB thousand) | Year-on-year Change (%) | | :--- | :------------------ | :------------------ | :-------------------- | | Asia | 205,372 | 565,889 | -63.7% | | Americas | 8,354 | 54,746 | -84.7% | | Europe | 36,476 | 100,853 | -63.8% | | Middle East | 9,213 | 12,704 | -27.5% | | Oceania | 690 | 7,643 | -91.0% | | Africa | 354 | 930 | -61.9% | | **Total** | **260,459** | **742,765** | **-64.9%** | [4 Expenses by Nature](index=11&type=section&id=4%20Expenses%20by%20Nature) The Group's total cost of sales, distribution costs, and administrative expenses significantly decreased, primarily due to the disposal of the paper cigarette packaging business and reduced raw material consumption and employee benefit expenses Major Expense Items (For the six months ended June 30) | Expense Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :------------------ | :------------------ | | Raw Materials and Consumables Used | 173,316 | 517,290 | | Employee Benefit Expenses | 56,358 | 116,560 | | Depreciation | 6,643 | 12,416 | | Amortization | 11,492 | 9,894 | | Total Cost of Sales, Distribution Costs, and Administrative Expenses | 279,446 | 713,502 | [5 Income Tax Expense](index=12&type=section&id=5%20Income%20Tax%20Expense) Income tax expense significantly decreased, mainly due to reduced net profit from Chinese subsidiaries and no withholding income tax incurred in the current period Income Tax Expense (For the six months ended June 30) | Tax Category | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :------------------ | :------------------ | | Current Income Tax — China Corporate Income Tax | (1,720) | (6,717) | | Current Income Tax — Withholding Income Tax | – | (6,629) | | Deferred Income Tax — Deferred Tax Assets | 392 | 3,479 | | **Total Income Tax Expense** | **(1,328)** | **(9,866)** | - Shenzhen Haohanyangtian Technology Co., Ltd., Shenzhen Coconut Biotechnology Co., Ltd., and Shenzhen Southern Smart Control Technology Co., Ltd. qualify as high-tech enterprises and are subject to a preferential corporate income tax rate of **15%**[27](index=27&type=chunk) - No withholding income tax was incurred in the current period (2024: **RMB 6.6 million**), as a lower withholding income tax rate of **5%** may apply when Chinese subsidiaries declare dividends to intermediate holding companies outside China, if tax treaty provisions are met[28](index=28&type=chunk)[60](index=60&type=chunk) [6 Earnings Per Share](index=13&type=section&id=6%20Earnings%20Per%20Share) Basic loss per share attributable to owners of the Company was RMB (0.028), compared to basic earnings per share of RMB 0.025 in the prior year, with diluted loss per share being the same due to no dilutive potential ordinary shares Basic (Loss)/Earnings Per Share (For the six months ended June 30) | Indicator | 2025 | 2024 | | :--- | :----- | :----- | | (Loss)/Profit Attributable to Owners of the Company (RMB thousand) | (16,751) | 14,808 | | Weighted Average Number of Ordinary Shares in Issue (thousand shares) | 600,000 | 600,000 | | **Basic (Loss)/Earnings Per Share (RMB)** | **(0.028)** | **0.025** | - Diluted loss per share is equal to basic loss per share as the Company had no dilutive potential ordinary shares outstanding as of June 30, 2025[30](index=30&type=chunk) [7 Dividends](index=13&type=section&id=7%20Dividends) The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025 - The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025 (2024: nil)[32](index=32&type=chunk)[75](index=75&type=chunk) [8 Trade and Other Receivables and Prepayments](index=14&type=section&id=8%20Trade%20and%20Other%20Receivables%20and%20Prepayments) Total trade and other receivables and prepayments decreased by 21.5% to RMB 284.0 million, primarily due to reductions in trade receivables, deposits, and cash advances Trade and Other Receivables and Prepayments (As of June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :------------------ | :------------------ | | Trade Receivables (net of loss allowance) | 169,985 | 195,862 | | Deposits | 20,529 | 56,421 | | Cash Advances | 22,936 | 69,344 | | Prepayments | 46,619 | 13,642 | | **Total** | **279,790** | **357,707** | - The Group's credit sales to customers are primarily on credit terms not exceeding **90 days**[33](index=33&type=chunk) [9 Trade and Other Payables](index=15&type=section&id=9%20Trade%20and%20Other%20Payables) Total trade and other payables decreased by 42.2% to RMB 122.4 million, primarily due to reductions in trade payables, bills payable, and amounts due to non-controlling interests Trade and Other Payables (As of June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :------------------ | :------------------ | | Trade Payables | 84,064 | 128,786 | | Bills Payable | 5,433 | 14,944 | | Amounts Due to Non-controlling Interests | – | 30,000 | | **Total** | **122,409** | **211,938** | [10 Subsequent Events](index=16&type=section&id=10%20Subsequent%20Events) From June 30, 2025, to the date of this announcement, the Board is not aware of any significant events that have occurred and require disclosure - From June 30, 2025, to the date of this announcement, the Board is not aware of any significant events that have occurred and require disclosure[36](index=36&type=chunk) [Management Discussion and Analysis](index=17&type=section&id=Management%20Discussion%20and%20Analysis) [Market Review](index=17&type=section&id=Market%20Review) In the first half of 2025, global economic growth was weak, exacerbated by geopolitical tensions and restrictive financial conditions, while China's economy showed moderate resilience but faced low consumer confidence and a dragging real estate sector, with the global e-cigarette industry confronting increasing regulatory scrutiny in North America and Europe, and new tax frameworks and comprehensive legislation in Asia-Pacific - The International Monetary Fund projects global GDP growth to slow from **3.3%** in 2024 to approximately **3.0%** in 2025 and **3.1%** in 2026[37](index=37&type=chunk) - China's economy recorded **5.3%** growth in the first half of 2025, but consumer confidence remained low, and the real estate sector continued to drag investment sentiment[38](index=38&type=chunk) - The global e-cigarette industry faces increasing regulatory scrutiny in mature markets like North America and Europe, as well as challenges from new tax frameworks and comprehensive national legislation in Asia-Pacific regions such as Malaysia, the Philippines, and Indonesia[38](index=38&type=chunk)[39](index=39&type=chunk) [Business Review](index=18&type=section&id=Business%20Review) In the first half of 2025, the Group's performance was significantly impacted by global economic slowdown, weak consumer sentiment, and an increasingly stringent regulatory environment, leading to the implementation of a two-pronged strategy to enhance operational resilience and make strategic adjustments for long-term competitive advantage, including efficiency improvements, prudent inventory management, and strategic market diversification - The Group's performance was significantly impacted by the global economic slowdown, weak consumer sentiment in key markets, and an increasingly stringent and unpredictable regulatory environment[40](index=40&type=chunk) - The Group has implemented a two-pronged strategy aimed at strengthening operational resilience to address immediate market volatility and executing landmark strategic adjustments to ensure long-term competitive advantage[41](index=41&type=chunk) - The strategy includes reinforcing a commitment to rigorous operational management, focusing on improving efficiency, maintaining prudent inventory levels, pursuing strategic market diversification, and actively adapting business models to align with evolving international regulatory standards[41](index=41&type=chunk)[42](index=42&type=chunk) [Sales and Distribution](index=19&type=section&id=Sales%20and%20Distribution) During the review period, the Group's revenue contracted due to macroeconomic uncertainties and tightening e-cigarette regulations, managing operational headwinds by optimizing inventory, adjusting production and labor costs, and making strategic, forward-looking investments to enhance product visibility and corporate reputation, maintaining a strong presence in key markets across Europe, America, and Asia - Revenue contraction is a direct result of macroeconomic uncertainties and the implementation of increasingly stringent and diverse regulatory frameworks for e-cigarette products in major international markets[43](index=43&type=chunk) - The Group strategically optimized its inventory portfolio to align with shifting demand patterns and optimize production volumes, while reallocating labor costs to control the growth of operating expenses[43](index=43&type=chunk) - The Group is committed to strategic, forward-looking investments in global market development and brand positioning to enhance product visibility and corporate reputation[44](index=44&type=chunk) - The Group continues to maintain a strong presence in key markets across Europe, the Americas, and Asia by establishing strategic relationships with major local distributors in target markets[44](index=44&type=chunk) [Product Research and Development and Design](index=20&type=section&id=Product%20Research%20and%20Development%20and%20Design) The Group continuously drives innovation, leveraging its technical expertise and advanced production facilities to focus on manufacturing mid-to-high-end products, incorporating automation requirements early in the design phase to enhance product manufacturability and automation feasibility - The Group leverages its technical expertise and development achievements, including advanced production lines and state-of-the-art manufacturing facilities, to fully utilize its capacity for producing mid-to-high-end products[45](index=45&type=chunk) - During the reporting period, the Group reviewed its product development technology, which fully considers product manufacturing and the requirements for introducing automated equipment during the product design phase, resulting in better manufacturability and greater feasibility for automation implementation[45](index=45&type=chunk) [Technology Development and Quality Control](index=20&type=section&id=Technology%20Development%20and%20Quality%20Control) Adhering to the philosophy of 'management innovation, system leadership,' the Group continuously strengthens core technology R&D and improves management, achieving ideal sales growth for its own-brand e-cigarettes due to high safety and enhanced user experience, while actively implementing environmental measures to provide high-quality, safe, and eco-friendly products - The Group advocates the philosophy of "management innovation, system leadership," consistently adhering to principles of perfection, specialization, and standardization to solidify its reputation for high-quality products[46](index=46&type=chunk) - The Group continuously increases investment in core technology research and development and constantly improves its management level, achieving ideal sales growth for its own-brand e-cigarettes[46](index=46&type=chunk) - The Group actively implements environmental protection measures, including strict environmental indicators, control over raw and auxiliary material inputs, and manufacturing processes, to provide customers with high-quality, safe, and environmentally friendly products[46](index=46&type=chunk) [Cost Control](index=20&type=section&id=Cost%20Control) The Group effectively reduced raw material costs through process and material optimization, productivity improvements, new supplier introduction, and competitive negotiations, while enhancing production process control and efficiency by rolling inventory preparation and consolidating production orders for increased batch production - The strategies adopted by the Group include optimizing processes and materials, improving productivity, introducing new suppliers, and conducting competitive negotiations to enhance raw material cost management[47](index=47&type=chunk)[48](index=48&type=chunk) - The Group also implements various measures, such as rolling inventory preparation, consolidating production orders to increase batch production, reducing production costs, and preventing inefficiencies caused by secondary loading due to insufficient delivery quantities, thereby strengthening its control over production processes[48](index=48&type=chunk) [Financial Review](index=21&type=section&id=Financial%20Review) This section provides a detailed review of the Group's financial performance for the six months ended June 30, 2025, including key financial indicators such as turnover, gross profit, expenses, taxes, profitability, receivables and payables, liquidity, borrowings, and capital expenditures, along with an analysis of their changes [Revenue](index=21&type=section&id=Revenue) The Group's revenue decreased by 64.9% year-on-year to RMB 260.5 million, primarily due to the disposal of the paper cigarette packaging business in Q4 2024 and a decline in e-cigarette sales, with growth in e-cigarette ancillary services unable to offset negative impacts from sales strategy adjustments in key markets like Europe and America Sales Details (For the six months ended June 30) | Sales Category | 2025 (RMB thousand) | 2024 (RMB thousand) | Change (%) | | :--- | :------------------ | :------------------ | :----------- | | E-cigarette Sales | 221,007 | 393,135 | -43.8% | | E-cigarette Ancillary Services | 39,452 | 19,488 | +102.4% | | Paper Cigarette Packaging and Other Paper Packaging | – | 330,142 | Not applicable | | **Total** | **260,459** | **742,765** | **-64.9%** | - The decrease in revenue was primarily due to the disposal of the paper cigarette packaging and other paper packaging business in the fourth quarter of 2024, and a decline in e-cigarette sales for the six months ended June 30, 2025[49](index=49&type=chunk) - Sales in the e-cigarette segment decreased by approximately **43.8%**, mainly due to the Group's adjustment of sales strategies in several international markets in response to recent fluctuations in global e-cigarette regulations and international trade instability, which negatively impacted sales orders, particularly in Europe (decreased by approximately **63.8%**) and the Americas (decreased by approximately **84.7%**)[49](index=49&type=chunk) [Gross Profit](index=23&type=section&id=Gross%20Profit) The Group's gross profit decreased by 62.3% year-on-year to RMB 57.8 million, but the gross profit margin increased by 1.5 percentage points to 22.2%, primarily due to the disposal of the less profitable paper cigarette packaging business in Q4 2024 Gross Profit and Gross Profit Margin (For the six months ended June 30) | Indicator | 2025 (RMB million) | 2024 (RMB million) | Change (%) | | :--- | :----------------- | :----------------- | :----------- | | Gross Profit | 57.8 | 153.6 | -62.3% | | Gross Profit Margin | 22.2% | 20.7% | +1.5% | - The increase in the Group's gross profit margin was primarily due to the disposal of the paper cigarette packaging and other paper packaging business, which had relatively lower profitability and growth prospects, in the fourth quarter of 2024[54](index=54&type=chunk) [Distribution Costs](index=23&type=section&id=Distribution%20Costs) Distribution costs decreased by 50.7% year-on-year to RMB 23.6 million, primarily due to the disposal of the paper cigarette packaging business in Q4 2024 Distribution Costs (For the six months ended June 30) | Indicator | 2025 (RMB million) | 2024 (RMB million) | Change (%) | | :--- | :----------------- | :----------------- | :----------- | | Distribution Costs | 23.6 | 48.0 | -50.7% | - The decrease in distribution costs was primarily due to the disposal of the paper cigarette packaging and other paper packaging business in the fourth quarter of 2024[55](index=55&type=chunk) [Administrative Expenses](index=24&type=section&id=Administrative%20Expenses) Administrative expenses decreased by 30.3% year-on-year to RMB 53.2 million, primarily due to the disposal of the paper cigarette packaging business in Q4 2024 Administrative Expenses (For the six months ended June 30) | Indicator | 2025 (RMB million) | 2024 (RMB million) | Change (%) | | :--- | :----------------- | :----------------- | :----------- | | Administrative Expenses | 53.2 | 76.3 | -30.3% | - The decrease in administrative expenses was primarily due to the disposal of the paper cigarette packaging and other paper packaging business in the fourth quarter of 2024[56](index=56&type=chunk) [Other Income](index=24&type=section&id=Other%20Income) Other income decreased by RMB 5.2 million to RMB 1.5 million, primarily due to reduced government grants received by Chinese subsidiaries Other Income (For the six months ended June 30) | Indicator | 2025 (RMB million) | 2024 (RMB million) | Change (RMB million) | | :--- | :----------------- | :----------------- | :------------------- | | Other Income | 1.5 | 6.7 | -5.2 | - The decrease in other income was primarily due to reduced government grants received by Chinese subsidiaries for the six months ended June 30, 2025[57](index=57&type=chunk) [Other Gains, Net](index=24&type=section&id=Other%20Gains%2C%20Net) Net other gains decreased by RMB 2.4 million to RMB 1.0 million, primarily due to reduced gains from the disposal of subsidiaries and raw materials Other Gains, Net (For the six months ended June 30) | Indicator | 2025 (RMB million) | 2024 (RMB million) | Change (RMB million) | | :--- | :----------------- | :----------------- | :------------------- | | Other Gains, Net | 1.0 | 3.3 | -2.3 | - The decrease in net other gains was primarily due to reduced gains from the disposal of subsidiaries and raw materials for the six months ended June 30, 2025[58](index=58&type=chunk) [Finance Costs, Net](index=24&type=section&id=Finance%20Costs%2C%20Net) Net finance costs increased by RMB 1.5 million to RMB 1.8 million, primarily due to a decrease in interest income from bank deposits Finance Costs, Net (For the six months ended June 30) | Indicator | 2025 (RMB million) | 2024 (RMB million) | Change (RMB million) | | :--- | :----------------- | :----------------- | :------------------- | | Finance Costs, Net | 1.8 | 0.3 | +1.5 | - The increase in net finance costs was primarily due to a decrease in interest income from bank deposits for the six months ended June 30, 2025[59](index=59&type=chunk) [Income Tax Expense](index=25&type=section&id=Income%20Tax%20Expense_Financial%20Review) Income tax expense decreased by RMB 8.5 million to RMB 1.3 million, primarily due to reduced net profit from Chinese subsidiaries and no withholding income tax incurred Income Tax Expense (For the six months ended June 30) | Indicator | 2025 (RMB million) | 2024 (RMB million) | Change (RMB million) | | :--- | :----------------- | :----------------- | :------------------- | | Income Tax Expense | 1.3 | 9.8 | -8.5 | - The decrease in income tax expense was primarily due to reduced net profit generated by Chinese subsidiaries for the six months ended June 30, 2025, and no withholding income tax incurred (2024: **RMB 6.6 million**)[60](index=60&type=chunk) [Profit Attributable to Owners of the Company](index=25&type=section&id=Profit%20Attributable%20to%20Owners%20of%20the%20Company) The Group recorded a loss attributable to owners of the Company of approximately RMB 16.8 million for the six months ended June 30, 2025, compared to a profit of approximately RMB 14.8 million in the prior year (Loss)/Profit Attributable to Owners of the Company (For the six months ended June 30) | Indicator | 2025 (RMB million) | 2024 (RMB million) | | :--- | :----------------- | :----------------- | | (Loss)/Profit Attributable to Owners of the Company | (16.8) | 14.8 | [Trade and Other Receivables and Prepayments](index=25&type=section&id=Trade%20and%20Other%20Receivables%20and%20Prepayments_Financial%20Review) Trade and other receivables and prepayments decreased by 21.5% from RMB 361.5 million as of December 31, 2024, to RMB 284.0 million as of June 30, 2025, primarily due to reductions in trade receivables, deposits, and cash advances Trade and Other Receivables and Prepayments (As of June 30) | Item | 2025 (RMB million) | 2024 (RMB million) | Change (%) | | :--- | :----------------- | :----------------- | :----------- | | Total Trade and Other Receivables and Prepayments | 284.0 | 361.5 | -21.5% | - This decrease was primarily due to reductions in trade receivables, deposits, and cash advances[62](index=62&type=chunk) [Trade and Other Payables](index=25&type=section&id=Trade%20and%20Other%20Payables_Financial%20Review) Trade and other payables decreased by 42.2% from RMB 211.9 million as of December 31, 2024, to RMB 122.4 million as of June 30, 2025, primarily due to reductions in trade payables, bills payable, and amounts due to non-controlling interests Trade and Other Payables (As of June 30) | Item | 2025 (RMB million) | 2024 (RMB million) | Change (%) | | :--- | :----------------- | :----------------- | :----------- | | Total Trade and Other Payables | 122.4 | 211.9 | -42.2% | - This decrease was primarily due to reductions in trade payables, bills payable, and no other amounts due to non-controlling interests as of June 30, 2025 (December 31, 2024: **RMB 30.0 million**)[63](index=63&type=chunk) [Liquidity and Financial Resources](index=26&type=section&id=Liquidity%20and%20Financial%20Resources) As of June 30, 2025, the Group recorded net current assets of approximately RMB 223.6 million and cash and cash equivalents of RMB 94.0 million, a decrease from year-end 2024, but maintaining a healthy liquidity position Liquidity (As of June 30) | Indicator | 2025 (RMB million) | 2024 (RMB million) | | :--- | :----------------- | :----------------- | | Net Current Assets | 223.6 | 407.7 | | Cash and Cash Equivalents | 94.0 | 275.1 | - The Group maintained a healthy liquidity position for the six months ended June 30, 2025, with operations primarily financed by internal resources and interest-bearing borrowings[64](index=64&type=chunk) [Borrowings and Gearing Ratio](index=26&type=section&id=Borrowings%20and%20Gearing%20Ratio) As of June 30, 2025, the Group's interest-bearing borrowings were RMB 59.9 million, primarily denominated in RMB and repayable within one year, with the gearing ratio not applicable due to the Group's net cash position Borrowings and Net Cash (As of June 30) | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :------------------ | :------------------ | | Total Borrowings | 59,902 | 62,750 | | Less: Cash and Cash Equivalents | 94,033 | 275,136 | | Net Cash | 34,131 | 212,386 | - The Group's interest-bearing borrowings are repayable within one year and are primarily denominated in RMB[65](index=65&type=chunk) - The Group's policy is to continue maintaining a consistently robust financial management strategy, coupled with moderate borrowings and sufficient liquidity reserves, to meet its investment and working capital needs[66](index=66&type=chunk) [Capital Expenditure](index=27&type=section&id=Capital%20Expenditure) The Group's total capital expenditure for the six months ended June 30, 2025, significantly decreased to RMB 6.5 million, primarily for the purchase of plant and machinery Capital Expenditure (For the six months ended June 30) | Indicator | 2025 (RMB million) | 2024 (RMB million) | | :--- | :----------------- | :----------------- | | Total Capital Expenditure | 6.5 | 50.1 | - Capital expenditure was primarily for the purchase of plant and machinery[67](index=67&type=chunk) [Treasury Policy](index=27&type=section&id=Treasury%20Policy) The Group adopts a prudent treasury and funding policy, emphasizing risk control, with funds primarily denominated in RMB and HKD, generally held as short-term or medium-term bank deposits for working capital - The Group adopts a prudent strategy for its treasury and funding policies, emphasizing risk control and transactions directly related to the Group's principal business[68](index=68&type=chunk) - Funds are primarily denominated in RMB and HKD, generally held as short-term or medium-term bank deposits for the Group's working capital[68](index=68&type=chunk) [Pledged Assets](index=27&type=section&id=Pledged%20Assets) The Group pledged restricted cash with a carrying amount of RMB 3.4 million to secure its general bank facilities Pledged Assets (As of June 30) | Asset | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :------------------ | :------------------ | | Restricted Cash | 3,433 | 13,019 | - The Group pledged restricted cash to secure its general bank facilities (including the Group's bills payable)[69](index=69&type=chunk) [Significant Investments, Acquisitions and Disposals of Subsidiaries and Associates](index=28&type=section&id=Significant%20Investments%2C%20Acquisitions%20and%20Disposals%20of%20Subsidiaries%20and%20Associates) For the six months ended June 30, 2025, the Group had no significant investments, major acquisitions, or disposals involving subsidiaries and associates - For the six months ended June 30, 2025, the Group had no significant investments, major acquisitions, or disposals involving subsidiaries and associates[71](index=71&type=chunk) [Contingent Liabilities](index=28&type=section&id=Contingent%20Liabilities) As of June 30, 2025, the Group had no significant contingent liabilities - As of June 30, 2025, the Group had no significant contingent liabilities (December 31, 2024: nil)[72](index=72&type=chunk) [Foreign Exchange Risk](index=28&type=section&id=Foreign%20Exchange%20Risk) The Group's transactions are primarily in RMB, with foreign currency risk mainly involving HKD and USD-denominated bank balances, receivables, and payables, and no derivative financial instruments were used to hedge foreign currency fluctuations during the period - The Group's transactions are primarily conducted in RMB (the Group's functional currency), with most receivables and payables denominated in RMB[73](index=73&type=chunk) - The foreign currency risk faced by the Group primarily involves certain bank balances and cash, trade receivables, contract liabilities, and other payables denominated in HKD and USD[73](index=73&type=chunk) - For the six months ended June 30, 2025, the Group did not use derivative financial instruments to hedge fluctuations arising from foreign currency transactions and other financial assets and liabilities in the ordinary course of business[73](index=73&type=chunk) [Human Resources and Remuneration](index=28&type=section&id=Human%20Resources%20and%20Remuneration) As of June 30, 2025, the Group employed 862 staff with total employee costs of RMB 56.4 million, with remuneration based on market terms and individual performance, and various training programs provided to enhance employee skills Human Resources Overview (As of June 30) | Indicator | 2025 | 2024 | | :--- | :----- | :----- | | Number of Employees | 862 | 825 | | Total Employee Costs (RMB million) | 56.4 | 116.6 | - The Group's remuneration packages are generally determined with reference to market terms and individual performance[74](index=74&type=chunk) - The Group also provides various training programs to its employees to enhance their skills, develop professional expertise, and demonstrate their potential[74](index=74&type=chunk) [Interim Dividend](index=28&type=section&id=Interim%20Dividend_Financial%20Review) The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025 - The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025 (for the six months ended June 30, 2024: nil)[75](index=75&type=chunk) [Outlook](index=29&type=section&id=Outlook) The global e-cigarette industry is projected for significant expansion but faces uncertainties from technological advancements, shifting consumer behavior, and an unpredictable global regulatory landscape; the Group will continue to execute a rigorous strategic framework, balancing resource allocation with innovation, investing in robust compliance and legal frameworks, optimizing its product portfolio, and expanding its global distribution network through partnerships with overseas distributors to navigate market volatility and improve performance - Grand View Research forecasts the global e-cigarette industry valuation to exceed **USD 60 billion** by 2025 and **USD 120 billion** by 2034, but its trajectory depends on technological developments, evolving consumer behavior, and a fragmented and unpredictable global regulatory environment[76](index=76&type=chunk) - The Chinese e-cigarette industry is transitioning from rapid, unregulated expansion to a more structured and compliance-focused operational model[76](index=76&type=chunk) - The Group will continue to invest in a robust, centralized compliance and legal framework, utilizing regulatory intelligence systems to anticipate changes and ensure its business remains competitive in each market[78](index=78&type=chunk) - Jiayao will continuously evaluate and optimize its product portfolio to ensure compliance with specific regulatory requirements and consumer dynamics in each target region, and expand its global distribution network through strategic partnerships with established overseas distributors[79](index=79&type=chunk) [Corporate Governance and Other Information](index=30&type=section&id=Corporate%20Governance%20and%20Other%20Information) [Competitive Business and Conflicts of Interest](index=30&type=section&id=Competitive%20Business%20and%20Conflicts%20of%20Interest) No director is engaged in any business that competes or may compete with the Group's business, nor are there any other conflicts of interest - No director is engaged in any business that constitutes or may constitute competition with the Group's business, and they have no other conflicts of interest with the Group[80](index=80&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=30&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company%27s%20Listed%20Securities) For the entire six-month period ended June 30, 2025, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities - For the entire six-month period ended June 30, 2025, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[81](index=81&type=chunk) [Corporate Governance](index=30&type=section&id=Corporate%20Governance) The Company has adopted and complied with the Corporate Governance Code set out in Appendix C1 of the Listing Rules - The Company has adopted the Corporate Governance Code set out in Appendix C1 of the Listing Rules as its own corporate governance code and has complied with it[82](index=82&type=chunk) [Standard of Dealings by Directors of Listed Issuers in Securities](index=31&type=section&id=Standard%20of%20Dealings%20by%20Directors%20of%20Listed%20Issuers%20in%20Securities) Following specific inquiries with all Directors, they confirmed compliance with the Standard Code for Securities Transactions by Directors of Listed Issuers for the six months ended June 30, 2025 - Following specific inquiries with all Directors, they confirmed that they have complied with the standards set out in the Code of Conduct and the Standard Code for Securities Transactions by Directors for the six months ended June 30, 2025[83](index=83&type=chunk) [Audit Committee and Review of Interim Results](index=31&type=section&id=Audit%20Committee%20and%20Review%20of%20Interim%20Results) The Company's Audit Committee has reviewed the Group's unaudited condensed consolidated interim financial results for the six months ended June 30, 2025, deeming them prepared in compliance with applicable accounting standards, requirements, and Listing Rules, with adequate disclosures - The Audit Committee, comprising three independent non-executive directors, is primarily responsible for reviewing and monitoring the Company's financial reporting process, internal controls, and risk management systems[84](index=84&type=chunk) - The Group's interim financial results for the six months ended June 30, 2025, have not been reviewed by the Company's auditors but have been reviewed by the Company's Audit Committee, which believes that the results have been prepared in compliance with applicable accounting standards and requirements, as well as the Listing Rules, and that adequate disclosures have been made[84](index=84&type=chunk) [Changes in Directors' Information](index=31&type=section&id=Changes%20in%20Directors%27%20Information) No changes in Directors' information requiring disclosure under Listing Rule 13.51B(1) have occurred since the publication of the Company's annual report for the year ended December 31, 2024, up to the date of this announcement - No changes in Directors' information requiring disclosure under Listing Rule 13.51B(1) have occurred since the publication of the Company's annual report for the year ended December 31, 2024, up to the date of this announcement[85](index=85&type=chunk) [Publication of Interim Results and Interim Report](index=32&type=section&id=Publication%20of%20Interim%20Results%20and%20Interim%20Report) This announcement has been published on the HKEX and Company websites; the Company's interim report for the six months ended June 30, 2025, will be dispatched to shareholders and published on the aforementioned websites in due course - This announcement has been published on the HKEX website (www.hkexnews.hk) and the Company's website (www.jiayaoholdings.com), respectively[86](index=86&type=chunk) - The Company's interim report for the six months ended June 30, 2025, will be dispatched to the Company's shareholders and published on the aforementioned websites in due course[86](index=86&type=chunk)

[Company Information](index=5&type=section&id=Company%20Information) The company's board comprises three executive and four independent non-executive directors, ensuring governance independence, with its registered office in the Cayman Islands and main operations in Hong Kong - The company's board of directors consists of **3 executive directors** (Mr. Wong Tze Chui, Mr. Pong Kin Yee, Mr. Li Kai Leung) and **4 independent non-executive directors** (Dr. Chan Kin Keung, Mr. Ng Chun Fai, Mr. Yu Man Yiu, Ms. Wong Tsui Yu)[9](index=9&type=chunk) - The Audit Committee, Remuneration Committee, and Nomination Committee are all chaired by independent non-executive directors, ensuring the independence of corporate governance[9](index=9&type=chunk) - The company is registered in the Cayman Islands, with its principal place of business, headquarters, and main operating location in Wong Chuk Hang, Hong Kong[10](index=10&type=chunk) - The company's website is www.classifiedgroup.com.hk, and its stock code is **08232**[10](index=10&type=chunk) [Unaudited Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=7&type=section&id=Unaudited%20Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For the six months ended June 30, 2025, revenue was **HK$17,008 thousand**, a **4.3% decrease** year-on-year, with loss and total comprehensive income attributable to owners of the company at **HK$2,983 thousand**, largely consistent with the prior period Key Data from Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income | Indicator | June 30, 2025 (HK$ Thousand) | June 30, 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Revenue | 17,008 | 17,777 | | Other income | 79 | 206 | | Other gains and losses | 767 | (1) | | Loss before tax | (2,983) | (2,996) | | Loss and total comprehensive income attributable to owners of the company for the period | (2,983) | (2,996) | | Basic and diluted loss per share (HK Cents) | (5.35) | (5.37) | - Revenue decreased by **4.3% year-on-year**, reflecting challenging operating conditions[12](index=12&type=chunk) - Despite the decline in revenue, the loss for the period remained largely consistent with the prior period, as other gains and losses shifted from a net loss to a net gain[12](index=12&type=chunk) [Unaudited Condensed Consolidated Statement of Financial Position](index=8&type=section&id=Unaudited%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, total non-current assets were **HK$883 thousand**, total current assets **HK$25,355 thousand**, and total current liabilities **HK$19,712 thousand**, resulting in a net asset value of **HK$6,526 thousand**, a decrease from **HK$9,509 thousand** at December 31, 2024 Key Data from Condensed Consolidated Statement of Financial Position | Indicator | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Non-current assets | 883 | 1,267 | | Current assets | 25,355 | 26,075 | | Current liabilities | 19,712 | 17,797 | | Net current assets | 5,643 | 8,278 | | Net assets | 6,526 | 9,509 | - Net assets decreased from **HK$9,509 thousand** at December 31, 2024, to **HK$6,526 thousand** at June 30, 2025, primarily due to the loss incurred during the period[13](index=13&type=chunk)[14](index=14&type=chunk) - Current liabilities increased by **HK$1,915 thousand**, while current assets decreased by **HK$720 thousand**, leading to a significant decline in net current assets[13](index=13&type=chunk) [Unaudited Condensed Consolidated Statement of Changes in Equity](index=9&type=section&id=Unaudited%20Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) For the six months ended June 30, 2025, total equity attributable to owners of the company decreased from **HK$9,509 thousand** at the beginning of the period to **HK$6,526 thousand** at the end, primarily due to a **HK$2,983 thousand** loss incurred during the period Key Data from Condensed Consolidated Statement of Changes in Equity | Indicator | January 1, 2025 (HK$ Thousand) | June 30, 2025 (HK$ Thousand) | | :--- | :--- | :--- | | Share capital | 11,150 | 11,150 | | Share premium | 133,445 | 133,445 | | Other reserves | 766 | 766 | | Accumulated losses | (135,852) | (138,835) | | Total equity attributable to owners of the company | 9,509 | 6,526 | - Accumulated losses increased by **HK$2,983 thousand**, directly leading to an equivalent reduction in total equity attributable to owners of the company[14](index=14&type=chunk) - Share capital, share premium, and other reserves remained unchanged during the reporting period[14](index=14&type=chunk) [Unaudited Condensed Consolidated Statement of Cash Flows](index=10&type=section&id=Unaudited%20Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) For the six months ended June 30, 2025, net cash used in operating activities was **HK$694 thousand**, net cash from investing activities **HK$879 thousand**, and net cash used in financing activities **HK$751 thousand**, resulting in a significant decrease in period-end bank balances and cash to **HK$249 thousand** from **HK$815 thousand** at the beginning of the period Key Data from Condensed Consolidated Statement of Cash Flows | Indicator | June 30, 2025 (HK$ Thousand) | June 30, 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Net cash used in operating activities | (694) | (684) | | Net cash from investing activities | 879 | 259 | | Net cash used in financing activities | (751) | (5,490) | | Net decrease in cash and cash equivalents | (566) | (5,915) | | Cash and cash equivalents at end of period | 249 | 270 | - Net cash from investing activities significantly increased, primarily due to gains from the disposal of property, plant, and equipment[16](index=16&type=chunk) - Net cash used in financing activities significantly decreased, mainly due to an increase in advances from directors, compared to repayment of directors' advances in the prior period[16](index=16&type=chunk) - Period-end bank balances and cash decreased by **HK$566 thousand** from the beginning of the period, indicating cash flow pressure[16](index=16&type=chunk) [Notes to the Unaudited Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20the%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed notes to the financial statements, covering general company information, accounting policies, revenue and segment information, income and expense breakdowns, balance sheet item changes, share capital, and related party transactions, offering context and detail for understanding the interim results - The company primarily engages in restaurant operations in Hong Kong[18](index=18&type=chunk) - The financial statements are presented in Hong Kong Dollars and comply with HKAS 34 and the GEM Listing Rules[19](index=19&type=chunk)[20](index=20&type=chunk) - The application of new and revised HKFRSs had no significant impact on the financial statements for the current period[22](index=22&type=chunk) [1. General Information](index=11&type=section&id=1.%20General%20Information) This section outlines Classified Group (Holdings) Limited's registration, listing status, principal place of business, and its subsidiaries' restaurant operations in Hong Kong - The company was incorporated in the Cayman Islands on **October 24, 2014**, and listed on GEM of the Hong Kong Stock Exchange on **July 11, 2016**[17](index=17&type=chunk) - The company is an investment holding company, with its subsidiaries primarily engaged in restaurant operations in Hong Kong[18](index=18&type=chunk) [2. Basis of Preparation and Presentation](index=11&type=section&id=2.%20Basis%20of%20Preparation%20and%20Presentation) The interim financial statements are prepared in accordance with HKAS 34 and the Hong Kong Companies Ordinance disclosure requirements, complying with GEM Listing Rules, and have been reviewed by the Audit Committee but not audited by external auditors - The interim financial statements are prepared in accordance with **HKAS 34** and the **GEM Listing Rules**[20](index=20&type=chunk) - The statements are unaudited but have been reviewed by the Audit Committee, which concurred with the accounting principles and practices adopted[20](index=20&type=chunk) [3. Principal Accounting Policies](index=12&type=section&id=3.%20Principal%20Accounting%20Policies) The condensed consolidated financial statements are prepared on a historical cost basis, with accounting policies and methods consistent with the prior year, except for changes resulting from new and revised HKFRSs - The financial statements are prepared on a **historical cost basis**[21](index=21&type=chunk) - Accounting policies are largely consistent with the prior year, with changes only due to new and revised Hong Kong Financial Reporting Standards[21](index=21&type=chunk) [4. Application of Hong Kong Financial Reporting Standards](index=12&type=section&id=4.%20Application%20of%20Hong%20Kong%20Financial%20Reporting%20Standards) The Group adopted all new and revised HKFRSs effective for accounting periods beginning on or after January 1, 2025, with no significant impact on the condensed consolidated financial statements - The Group has adopted all new and revised Hong Kong Financial Reporting Standards effective on or after **January 1, 2025**[22](index=22&type=chunk) - The application of these new standards had no significant impact on the condensed consolidated financial statements[22](index=22&type=chunk) [5. Revenue and Segment Information](index=12&type=section&id=5.%20Revenue%20and%20Segment%20Information) The Group's revenue primarily derives from operating casual restaurants and bakeries, with revenue for the six months ended June 30, 2025, at **HK$17,008 thousand**, a **4.3% decrease** year-on-year, and segment loss expanding - The Group's operating and reportable segment is the operation of casual restaurants and bakeries ("Casual")[23](index=23&type=chunk) - Revenue refers to amounts received and receivable for services rendered and goods sold (net of discounts)[23](index=23&type=chunk) [Segment Revenue and Results](index=13&type=section&id=Segment%20Revenue%20and%20Results) Segment revenue for the casual dining and bakery business decreased, leading to an expanded segment loss for the period | Indicator | June 30, 2025 (HK$ Thousand) | June 30, 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Revenue | 17,008 | 17,777 | | Segment loss | (1,608) | (1,368) | - Casual segment revenue decreased by **HK$769 thousand** year-on-year, and segment loss expanded by **HK$240 thousand**[24](index=24&type=chunk) [Segment Assets and Liabilities](index=14&type=section&id=Segment%20Assets%20and%20Liabilities) Both casual segment assets and liabilities decreased, with a notable reduction in segment liabilities | Indicator | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Segment assets | 4,267 | 5,136 | | Segment liabilities | 7,056 | 10,789 | - Both casual segment assets and liabilities decreased, with segment liabilities significantly reduced by **HK$3,733 thousand**[25](index=25&type=chunk)[26](index=26&type=chunk) [6. Other Income](index=16&type=section&id=6.%20Other%20Income) For the six months ended June 30, 2025, total other income was **HK$79 thousand**, a significant decrease from **HK$206 thousand** in the prior period, primarily due to a reduction in "other" category income Other Income Details | Item | June 30, 2025 (HK$ Thousand) | June 30, 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Interest income | – | 3 | | Others | 19 | 143 | | Management fee income from associated companies | 60 | 60 | | **Total** | **79** | **206** | - Other income decreased by **HK$127 thousand** year-on-year, a **61.6% reduction**[28](index=28&type=chunk) [7. Other Gains and Losses](index=16&type=section&id=7.%20Other%20Gains%20and%20Losses) For the six months ended June 30, 2025, the Group recorded net other gains of **HK$767 thousand**, primarily from the net gain on disposal of property, plant, and equipment, compared to a net loss of **HK$1 thousand** in the prior period Other Gains and Losses Details | Item | June 30, 2025 (HK$ Thousand) | June 30, 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Net gain on disposal of property, plant and equipment | 768 | – | | Net foreign exchange loss | (1) | (1) | | **Total** | **767** | **(1)** | - The disposal of property, plant, and equipment generated a net gain of **HK$768 thousand**, which was the primary source of other gains for the period[29](index=29&type=chunk) [8. Finance Costs](index=16&type=section&id=8.%20Finance%20Costs) For the six months ended June 30, 2025, finance costs were **HK$72 thousand**, a significant decrease from **HK$187 thousand** in the prior period, primarily consisting of interest on lease liabilities Finance Costs Details | Item | June 30, 2025 (HK$ Thousand) | June 30, 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Interest on lease liabilities | (72) | (187) | - Finance costs decreased by **HK$115 thousand** year-on-year, a **61.5% reduction**, primarily due to lower interest on lease liabilities[30](index=30&type=chunk) [9. Loss Before Tax](index=17&type=section&id=9.%20Loss%20Before%20Tax) For the six months ended June 30, 2025, loss before tax was **HK$2,983 thousand**, largely consistent with **HK$2,996 thousand** in the prior period, primarily driven by raw materials, staff costs, depreciation, rent, and other operating expenses Major Components of Loss Before Tax | Item | June 30, 2025 (HK$ Thousand) | June 30, 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Raw materials and consumables used in restaurant operations | (4,455) | (4,335) | | Operating lease payments for leased land and buildings | (520) | (483) | - Despite reduced finance costs, increased operating expenses such as raw materials and consumables, and lease payments, resulted in loss before tax remaining largely consistent with the prior period[12](index=12&type=chunk)[32](index=32&type=chunk) [10. Tax](index=17&type=section&id=10.%20Tax) For the six months ended June 30, 2025, and 2024, the Group had no taxable profits, thus no provision for Hong Kong Profits Tax was made - The Group had no taxable profits during the reporting period[33](index=33&type=chunk) - No provision for Hong Kong Profits Tax was made[33](index=33&type=chunk) [11. Dividends](index=17&type=section&id=11.%20Dividends) During the interim period, the company neither paid, declared, nor proposed any dividends, with the Board deciding against any dividend payment for this period - The company neither paid, declared, nor proposed any dividends during the reporting period[34](index=34&type=chunk) [12. Loss Per Share](index=18&type=section&id=12.%20Loss%20Per%20Share) For the six months ended June 30, 2025, basic and diluted loss per share attributable to owners of the company was **5.35 HK cents**, a slight improvement from **5.37 HK cents** in the prior period, with no dilutive potential ordinary shares issued Loss Per Share Calculation Data | Indicator | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Loss for the period attributable to owners of the company (HK$ Thousand) | (2,983) | (2,996) | | Weighted average number of ordinary shares (Thousand Shares) | 55,750 | 55,750 | | **Basic and diluted loss per share (HK Cents)** | **(5.35)** | **(5.37)** | - Loss per share slightly narrowed, reflecting a marginal reduction in total loss[37](index=37&type=chunk) - The company had no dilutive potential ordinary shares issued during the reporting period[35](index=35&type=chunk) [13. Movements in Property, Plant and Equipment](index=19&type=section&id=13.%20Movements%20in%20Property%2C%20Plant%20and%20Equipment) During the interim period, the Group disposed of approximately **HK$32,000** of property, plant, and equipment, with no such disposals in the prior period - Property, plant, and equipment disposals amounted to approximately **HK$32 thousand** in the current period[38](index=38&type=chunk) - There were no disposals of property, plant, and equipment in the prior period[38](index=38&type=chunk) [14. Trade and Other Receivables, Deposits and Prepayments](index=19&type=section&id=14.%20Trade%20and%20Other%20Receivables%2C%20Deposits%20and%20Prepayments) As of June 30, 2025, total trade and other receivables, deposits, and prepayments were **HK$3,215 thousand**, a slight decrease from **HK$3,292 thousand** at December 31, 2024, with trade receivables primarily related to credit card settlements with typical 7-day credit terms Details of Trade and Other Receivables, Deposits and Prepayments | Item | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Trade receivables from restaurant operations | 192 | 217 | | Rental deposits | 1,793 | 2,027 | | Other deposits | 414 | 476 | | Prepayments and other receivables | 816 | 572 | | **Total** | **3,215** | **3,292** | Ageing Analysis of Trade Receivables from Restaurant Operations | Ageing | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | | :--- | :--- | :--- | | 0 to 30 days | 135 | 180 | | 31 to 60 days | 4 | 7 | | 61 to 90 days | 1 | 4 | | Over 90 days | 52 | 26 | | **Total** | **192** | **217** | - Trade receivables primarily represent amounts settled by customers via credit cards, with settlement periods typically within **7 days** after the transaction date[39](index=39&type=chunk) [15. Trade and Other Payables and Accrued Charges](index=20&type=section&id=15.%20Trade%20and%20Other%20Payables%20and%20Accrued%20Charges) As of June 30, 2025, total trade and other payables and accrued charges increased to **HK$8,582 thousand** from **HK$7,751 thousand** at December 31, 2024, with credit terms for goods purchased ranging from **30 to 90 days** Details of Trade and Other Payables and Accrued Charges | Item | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Trade payables | 1,655 | 1,772 | | Accrued staff-related costs | 1,888 | 1,565 | | Other payables and accrued charges | 5,039 | 4,414 | | **Total** | **8,582** | **7,751** | Ageing Analysis of Trade Payables | Ageing | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | | :--- | :--- | :--- | | 0 to 30 days | 630 | 838 | | 31 to 60 days | 764 | 726 | | 61 to 90 days | 124 | 136 | | Over 90 days | 137 | 72 | | **Total** | **1,655** | **1,772** | - Accrued staff-related costs and other payables and accrued charges increased, leading to a rise in the total amount[43](index=43&type=chunk) [16. Share Capital](index=22&type=section&id=16.%20Share%20Capital) As of June 30, 2025, the company's authorized share capital was **HK$40,000 thousand**, with issued and fully paid share capital of **HK$11,150 thousand**, comprising **55,750,000 shares**, unchanged from the prior period and year-end Share Capital Details | Item | Par value per ordinary share (HK$) | Number of shares | Amount (HK$ Thousand) | | :--- | :--- | :--- | :--- | | Authorized share capital | 0.2 | 200,000,000 | 40,000 | | Issued and fully paid share capital | 0.2 | 55,750,000 | 11,150 | - The share capital structure remained stable during the reporting period, with no new issuances or repurchases[46](index=46&type=chunk) [17. Related Party Transactions](index=22&type=section&id=17.%20Related%20Party%20Transactions) The Group engaged in various related party transactions during the reporting period, including catering income from directors and Ponti Wine Cellars, management fee income from Way Wise Limited, and management fees and goods purchases from Ponti Wine Cellars Related Party Transactions Details | Item | June 30, 2025 (HK$ Thousand) | June 30, 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Catering income from directors of the company | 1 | 3 | | Catering income from Ponti Wine Cellars | 2 | 5 | | Management fee income from Way Wise Limited | 60 | 60 | | Management fees paid to Ponti Wine Cellars | 387 | 462 | | Purchase of goods from Ponti Wine Cellars | 64 | 100 | - Ponti Wine Cellars is controlled by director Mr. Pong Kin Yee and his family, while Way Wise Limited has Mr. Pong as a shareholder and director[50](index=50&type=chunk)[51](index=51&type=chunk) - Remuneration for key management personnel was **HK$210 thousand** in both reporting periods[51](index=51&type=chunk) [Management Discussion and Analysis](index=24&type=section&id=Management%20Discussion%20and%20Analysis) Management discusses challenges in Hong Kong's F&B sector, including rising costs and changing consumer patterns, noting a decline in company revenue, and outlines strategies to enhance profitability through expanding delivery, improving facilities, cost control, and diversifying operational risks - Hong Kong's F&B industry faces a challenging business environment, with rising pressures from food costs, rent, utilities, and labor expenses[52](index=52&type=chunk) - The company has implemented cost-saving measures, including reducing staff costs, negotiating with suppliers, increasing marketing efforts, and expanding its takeaway product lines[52](index=52&type=chunk) - The company will address challenges with flexible marketing strategies and efficient operational responsiveness, continuously adjusting its business model[52](index=52&type=chunk) [Industry Review](index=24&type=section&id=Industry%20Review) Hong Kong's F&B sector continues to face challenges from rising costs and cautious consumer spending, with management anticipating ongoing adverse impacts on industry and Group performance, prompting the implementation of cost-saving and sales-boosting measures - Hong Kong's F&B industry faces continuous pressure from rising food costs, rent, utilities, and labor expenses[52](index=52&type=chunk) - Economic uncertainty leads to cautious customer spending and price sensitivity for dining out, impacting restaurant revenue[52](index=52&type=chunk) - The company has implemented cost-saving measures, such as reducing staff costs, negotiating with suppliers, increasing marketing, and expanding its takeaway product lines[52](index=52&type=chunk) [Business Review](index=24&type=section&id=Business%20Review) The Group primarily operates "Classified" European casual cafes and "Rise by Classified" modern bakeries, reporting net revenue of approximately **HK$17.0 million** for the six months ended June 30, 2025, a **4.3% decrease** year-on-year - "Classified" is a European casual cafe specializing in artisanal bread, cheese, and fine wines[53](index=53&type=chunk) - "Rise by Classified" is a modern bakery brand focusing on pastries, beverages, and locally sourced retail products[53](index=53&type=chunk) - For the six months ended June 30, 2025, net revenue was approximately **HK$17.0 million**, a **4.3% year-on-year decrease**[53](index=53&type=chunk) [Future Prospects](index=25&type=section&id=Future%20Prospects) Hong Kong's F&B sector is expected to remain challenging, facing high operating costs, changing consumer patterns, lease renewal difficulties, food price volatility, and labor shortages; the Group plans to expand takeaway options, upgrade facilities, monitor raw material costs, and diversify restaurant concepts to mitigate risks - Key risks include changing customer consumption patterns (e.g., avoiding dining out, cross-border travel), difficulties in finding commercially attractive locations, and potential challenges in lease renewals[56](index=56&type=chunk) - Operations may be affected by food raw material prices (including imported food impacted by exchange rate fluctuations) and future labor shortages[56](index=56&type=chunk) - Response strategies include expanding takeaway product lines, improving existing restaurant facilities, monitoring raw material quotations, and opening diverse restaurant concepts to diversify risk[56](index=56&type=chunk)[57](index=57&type=chunk) [Financial Review](index=26&type=section&id=Financial%20Review) For the six months ended June 30, 2025, total turnover was approximately **HK$17.0 million**, a **4.3% year-on-year decrease** due to changing consumer spending and a restaurant closure; total loss attributable to owners of the company was approximately **HK$3.0 million**, consistent with the prior period despite net gains from asset disposal and closure of a loss-making restaurant - Total turnover decreased by **4.3% year-on-year** to **HK$17.0 million**, primarily due to changes in consumer spending patterns and the closure of one restaurant[58](index=58&type=chunk) - Total loss attributable to owners of the company was approximately **HK$3.0 million**, consistent with the prior period[58](index=58&type=chunk) - Despite a net gain of **HK$0.77 million** from the disposal of property, plant, and equipment and the closure of a loss-making restaurant, the loss remained consistent with the prior period[58](index=58&type=chunk) [Financial Resources, Liquidity and Capital Structure](index=26&type=section&id=Financial%20Resources%2C%20Liquidity%20and%20Capital%20Structure) As of June 30, 2025, the Group's current assets were **HK$25.4 million** and current liabilities **HK$19.7 million**, with both current and quick ratios declining, a **0% debt-to-equity ratio**, and a capital structure primarily composed of equity attributable to owners, showing no significant changes during the reporting period Liquidity Ratios | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Current assets (HK$ Million) | 25.4 | 26.1 | | Current liabilities (HK$ Million) | 19.7 | 17.8 | | Current ratio | 1.29 | 1.46 | | Quick ratio | 0.18 | 0.23 | | Debt-to-equity ratio | 0% | 0% | - Both the current ratio and quick ratio decreased, indicating a weakening in short-term solvency[60](index=60&type=chunk) - The capital structure consists of equity attributable to owners of the company, with no significant changes during the reporting period[61](index=61&type=chunk) [Foreign Currency Risk](index=27&type=section&id=Foreign%20Currency%20Risk) The Group's transactions are predominantly denominated in Hong Kong Dollars, thus it does not face significant foreign exchange risk - The majority of the Group's transactions are denominated in Hong Kong Dollars[62](index=62&type=chunk) - The Group does not face significant foreign exchange risk[62](index=62&type=chunk) [Capital Commitments](index=27&type=section&id=Capital%20Commitments) As of June 30, 2025, the Group had no significant capital commitments - The Group had no significant capital commitments at the end of the reporting period[63](index=63&type=chunk) [Contingent Liabilities](index=27&type=section&id=Contingent%20Liabilities) As of June 30, 2025, the Group had no contingent liabilities - The Group had no contingent liabilities at the end of the reporting period[64](index=64&type=chunk) [Employees and Remuneration Policy](index=27&type=section&id=Employees%20and%20Remuneration%20Policy) As of June 30, 2025, the Group employed **50 staff** in Hong Kong, a decrease of **2** from the prior period, with remuneration policies based on market terms, individual performance, qualifications, and experience, including discretionary bonuses and other benefits - As of June 30, 2025, the Group had **50 employees**, a decrease from **52** in the prior period[65](index=65&type=chunk) - Remuneration is determined based on market terms, individual performance, qualifications, and experience, including discretionary bonuses, medical insurance, and retirement benefits[65](index=65&type=chunk) [Other Information](index=28&type=section&id=Other%20Information) This section discloses significant events during and after the reporting period, including no listed securities transactions or share option schemes, changes in directors' and major shareholders' interests (notably a post-period change in controlling shareholder and mandatory cash offer), corporate governance, and Audit Committee operations - No purchases, sales, or redemptions of the company's listed securities occurred during the reporting period[69](index=69&type=chunk) - A significant change in shareholding occurred after the reporting period, with an offeror acquiring **65.7%** of the company's shares, triggering a mandatory unconditional cash offer[81](index=81&type=chunk) - The company has entered into a new six-year lease agreement to operate a Chinese restaurant[82](index=82&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=28&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company%27s%20Listed%20Securities) Neither the company nor its subsidiaries purchased, sold, or redeemed any of the company's listed securities during the six months ended June 30, 2025, or up to the date of this report - Neither the company nor its subsidiaries engaged in any purchase, sale, or redemption of listed securities during the reporting period or up to the date of this report[69](index=69&type=chunk) [Share Option Scheme](index=28&type=section&id=Share%20Option%20Scheme) As of the date of this report, the company had not granted any share options under its share option scheme - The company has not granted any share options[70](index=70&type=chunk) [Directors' and Chief Executive's Interests and Short Positions in the Shares, Underlying Shares and Debentures of the Company and its Associated Corporations](index=29&type=section&id=Directors%27%20and%20Chief%20Executive%27s%20Interests%20and%20Short%20Positions%20in%20the%20Shares%2C%20Underlying%20Shares%20and%20Debentures%20of%20the%20Company%20and%20its%20Associated%20Corporations) As of June 30, 2025, executive directors Mr. Wong Tze Chui and Mr. Pong Kin Yee held **24.8%** and **40.9%** of the company's shares, respectively, through controlled corporations; post-period, their controlled entities sold most of their shares, resulting in a change of company control Directors' Long Positions in the Company's Ordinary Shares | Name of Director | Capacity/Nature of interest | Number of shares held | Approximate percentage of shareholding | | :--- | :--- | :--- | :--- | | Mr. Wong Tze Chui | Interest in controlled corporation | 13,843,692 | 24.8% | | Mr. Pong Kin Yee | Interest in controlled corporation | 22,771,433 | 40.9% | - After the reporting period, entities controlled by Mr. Wong Tze Chui and Mr. Pong Kin Yee sold a total of **36,615,125 shares** of the company (representing **65.7%** of the issued share capital) to One Wood Group (BVI) Limited[71](index=71&type=chunk) [Substantial Shareholders' and Other Persons' Interests and Short Positions in the Shares, Underlying Shares and Debentures of the Company](index=30&type=section&id=Substantial%20Shareholders%27%20and%20Other%20Persons%27%20Interests%20and%20Short%20Positions%20in%20the%20Shares%2C%20Underlying%20Shares%20and%20Debentures%20of%20the%20Company) As of June 30, 2025, Wiltshire Global Limited and Peyton Global Limited were substantial shareholders, holding **24.8%** and **40.9%** of shares respectively, with VMS Investment Group Limited holding **6.1%**; post-period, Wiltshire Global Limited and Peyton Global Limited sold most of their shares Substantial Shareholders' Long Positions in the Company's Ordinary Shares | Name | Capacity/Nature of interest | Number of shares held | Approximate percentage of shareholding | | :--- | :--- | :--- | :--- | | Wiltshire Global Limited | Beneficial owner | 13,843,692 | 24.8% | | Ms. Li Yuen Ching | Interest of spouse | 13,843,692 | 24.8% | | Peyton Global Limited | Beneficial owner | 22,771,433 | 40.9% | | Ms. Cheng Chi Man | Interest of spouse | 22,771,433 | 40.9% | | VMS Investment Group Limited | Beneficial owner | 3,400,000 | 6.1% | | Ms. Mak Siu Han | Interest in controlled corporation | 3,400,000 | 6.1% | - After the reporting period, Wiltshire Global Limited and Peyton Global Limited sold their combined **65.7%** stake to One Wood Group (BVI) Limited[74](index=74&type=chunk)[76](index=76&type=chunk) [Directors' Interests in Competing Business](index=32&type=section&id=Directors%27%20Interests%20in%20Competing%20Business) Except as disclosed in the prospectus, directors are unaware of any business or interest that constitutes or may constitute competition to the Group's business during the reporting period, nor any other conflicts of interest - Directors had no known interests or conflicts of interest that constituted competition to the Group's business during the reporting period[77](index=77&type=chunk) [Audit Committee](index=32&type=section&id=Audit%20Committee) Established on June 14, 2016, the Audit Committee comprises four independent non-executive directors, chaired by Mr. Yu Man Yiu, responsible for reviewing financial reports, providing recommendations, and overseeing financial reporting and internal control procedures, and has reviewed these interim results - The Audit Committee comprises four independent non-executive directors, with Mr. Yu Man Yiu serving as Chairman[78](index=78&type=chunk) - Key responsibilities include reviewing financial reports, providing recommendations, and overseeing financial reporting and internal control procedures[78](index=78&type=chunk) - The Audit Committee has reviewed the Group's unaudited condensed consolidated financial statements for the six months ended June 30, 2025[78](index=78&type=chunk) [Directors' Securities Transactions](index=32&type=section&id=Directors%20Securities%20Transactions) The company has adopted a code of conduct for directors' securities transactions, with terms no less stringent than GEM Listing Rules, and all directors have confirmed compliance with the required dealing standards and code of conduct - The company has adopted a stringent code of conduct for directors' securities transactions[79](index=79&type=chunk) - All directors have complied with the relevant dealing standards and code of conduct[79](index=79&type=chunk) [Corporate Governance](index=33&type=section&id=Corporate%20Governance) The company is committed to maintaining high corporate governance standards; despite a deviation from Code Provision C.2.1 where the roles of Chairman and Chief Executive are not separated (Mr. Wong Tze Chui serves as Chairman with no CEO), the Board believes this does not impair Group management and will review the structure periodically - The company is committed to maintaining high standards of corporate governance[80](index=80&type=chunk) - There is a deviation from Code Provision C.2.1 of the Corporate Governance Code, where the roles of Chairman and Chief Executive are not separated[80](index=80&type=chunk) - The Board believes this vacancy does not impair Group management and will review the structure periodically[80](index=80&type=chunk) [Events After Reporting Period](index=33&type=section&id=Events%20After%20Reporting%20Period) Two significant post-reporting period events include the sale of **65.7%** of the company's shares by major shareholders, leading to a change in control and a mandatory unconditional cash offer, and the company entering a new six-year lease agreement for a Chinese restaurant, involving approximately **HK$16.8 million** in right-of-use assets - On **July 21, 2025**, major shareholders sold **65.7%** of the company's shares to One Wood Group (BVI) Limited, resulting in a change of controlling interest[81](index=81&type=chunk) - Pursuant to the Takeovers Code, the offeror is required to make a mandatory unconditional cash offer for the company at **HK$1.318 per share**[81](index=81&type=chunk) - On **August 27, 2025**, the company entered into a six-year lease agreement to operate a Chinese restaurant, recognizing right-of-use assets totaling approximately **HK$16.8 million**[82](index=82&type=chunk)

[Announcement Information and Financial Summary](index=1&type=section&id=I.%20公告信息与财务摘要) [Company Information and Announcement Overview](index=1&type=section&id=1.1%20公司信息与公告概览) Symphony Holdings Limited (Stock Code: 01223) released its unaudited interim results for the six months ended June 30, 2025, which have been reviewed by the company's Audit Committee - Symphony Holdings Limited (Stock Code: 01223) announced its unaudited interim results for the six months ended June 30, 2025[2](index=2&type=chunk)[3](index=3&type=chunk) - The report has been reviewed by the company's Audit Committee[3](index=3&type=chunk) [Financial Summary](index=1&type=section&id=1.2%20财务摘要) During the period, the Group's EBITDA slightly increased, losses narrowed significantly, total comprehensive income attributable to owners turned profitable, and net assets also grew Key Financial Indicators Comparison (For the six months ended June 30) | Metric | 2025 (in thousands HKD) | 2024 (in thousands HKD) | Change | | :--- | :--- | :--- | :--- | | Net Assets | 2,345,200 | 2,319,000 | +1.1% | [Condensed Consolidated Financial Statements](index=2&type=section&id=II.%20简明综合财务报表) [Condensed Consolidated Statement of Profit or Loss](index=2&type=section&id=2.1%20简明综合损益表) For the six months ended June 30, 2025, the Group's revenue slightly decreased, but losses for the period narrowed significantly year-on-year due to controlled cost of sales and finance costs, leading to a reduction in basic and diluted loss per share Key Data from Condensed Consolidated Statement of Profit or Loss (For the six months ended June 30) | Metric | 2025 | 2024 | Change | | :--- | :--- | :--- | :--- | | Basic and Diluted Loss Per Share | (0.45) HK cents | (0.95) HK cents | -52.6% | [Condensed Consolidated Statement of Comprehensive Income](index=3&type=section&id=2.2%20简明综合全面收益表) During the period, the Group's total comprehensive income improved significantly, turning from a negative value in the prior-year period to a positive one, mainly due to the positive impact of exchange differences on translation of foreign operations Key Data from Condensed Consolidated Statement of Comprehensive Income (For the six months ended June 30) | Metric | 2025 (in thousands HKD) | 2024 (in thousands HKD) | Change | | :--- | :--- | :--- | :--- | | Total comprehensive income for the period attributable to owners of the Company | 45,405 | (83,537) | Turnaround | [Condensed Consolidated Statement of Financial Position](index=4&type=section&id=2.3%20简明综合财务状况表) As of June 30, 2025, the Group's net assets and net current assets both increased, and the current ratio improved, indicating enhanced financial stability Key Data from Condensed Consolidated Statement of Financial Position (As of period end) | Metric | June 30, 2025 (in thousands HKD) | Dec 31, 2024 (in thousands HKD) | Change | | :--- | :--- | :--- | :--- | | Total Equity | 2,345,243 | 2,318,961 | +1.1% | [Notes to the Condensed Consolidated Financial Statements](index=6&type=section&id=III.%20简明综合财务报表附注) [General Information](index=6&type=section&id=3.1%20一般资料) Symphony Holdings Limited was incorporated in Bermuda in 1993, listed on the Hong Kong Stock Exchange in 1995, and its principal businesses include brand promotion, retail, and financial services, with the ultimate controlling party being the company's Chairman, Mr Cheng Tun Nei - Symphony Holdings Limited was incorporated in Bermuda on November 24, 1993, and has been listed on the Main Board of The Stock Exchange of Hong Kong Limited since March 1, 1995[9](index=9&type=chunk) - The ultimate controlling party is Mr Cheng Tun Nei, the Chairman and a director of the Company[9](index=9&type=chunk) - The Group's principal businesses include brand promotion (SKINS trademark, healthcare products, Japanese sake distribution), retail (outlet management, property investment), and financial services (securities brokerage, margin financing, money lending, financial advisory)[10](index=10&type=chunk)[12](index=12&type=chunk) [Basis of Preparation and Accounting Policies](index=6&type=section&id=3.2%20编制基础与会计政策) The interim condensed consolidated financial statements are prepared in accordance with HKAS 34 and the Listing Rules, follow the accounting policies of the 2024 annual financial statements, and changes in accounting policies this period had no material impact on the financial position [Basis of Preparation](index=6&type=section&id=3.2.1%20编制基础) The interim condensed consolidated financial statements are prepared in accordance with Hong Kong Accounting Standard 34 issued by the HKICPA and the applicable disclosure requirements of the Hong Kong Stock Exchange Listing Rules, and are presented in Hong Kong dollars - The interim condensed consolidated financial statements have been prepared in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting" issued by the Hong Kong Institute of Certified Public Accountants and the applicable disclosure requirements of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited[10](index=10&type=chunk) - The interim condensed consolidated financial statements are presented in Hong Kong dollars[11](index=11&type=chunk) [Changes in Accounting Policies](index=7&type=section&id=3.2.2%20会计政策变动) The Group has adopted amendments to Hong Kong Financial Reporting Standards effective January 1, 2025, but these amendments did not have any material impact on the financial performance and position for the current and prior periods - The Group has adopted amendments to Hong Kong Financial Reporting Standards which are effective for the financial year beginning on January 1, 2025[13](index=13&type=chunk) - The application of the amendments to HKFRSs in the current period has had **no material impact** on the Group's financial performance and position for the current and prior periods and/or on the disclosures set out in these interim condensed consolidated financial statements[13](index=13&type=chunk) [Segment Information](index=8&type=section&id=3.3%20分部资料) The Group's business is divided into three reportable segments—Brand Promotion, Retail, and Financial Services—in accordance with HKFRS 8, with information on revenue, results, assets, and liabilities regularly provided to the chief operating decision-maker [Segment Revenue and Results](index=8&type=section&id=3.3.1%20分部收入及业绩) The Retail segment is the main contributor to the Group's revenue and profit, while both the Brand Promotion and Financial Services segments recorded losses during the period, with the loss from Financial Services widening Segment Revenue and Results (For the six months ended June 30, 2025) | Segment | Revenue (in thousands HKD) | Results (in thousands HKD) | | :--- | :--- | :--- | | Consolidated Total | 148,229 | 6,951 | Segment Revenue and Results (For the six months ended June 30, 2024) | Segment | Revenue (in thousands HKD) | Results (in thousands HKD) | | :--- | :--- | :--- | | Consolidated Total | 150,324 | 12,173 | - Revenue from the Retail segment was primarily generated from the China market (**HK$94,825 thousand**), with the main product and service being commission income from franchise sales (**HK$94,468 thousand**)[20](index=20&type=chunk) - Revenue from the Financial Services segment was primarily generated from Hong Kong (**HK$5,596 thousand**), with the main product and service being interest income (**HK$5,596 thousand**)[21](index=21&type=chunk) [Segment Assets](index=12&type=section&id=3.3.2%20分部资产) The Retail segment holds the largest asset base in the Group, with total assets approaching HK$3 billion as of June 30, 2025, reflecting its core position in the Group's business Segment Assets (As of period end) | Metric | June 30, 2025 (in thousands HKD) | Dec 31, 2024 (in thousands HKD) | | :--- | :--- | :--- | | Total Consolidated Assets | 4,440,464 | 4,415,961 | [Segment Liabilities](index=13&type=section&id=3.3.3%20分部负债) The Retail segment has the largest liabilities, which decreased during the period, while liabilities for the Financial Services segment increased Segment Liabilities (As of period end) | Metric | June 30, 2025 (in thousands HKD) | Dec 31, 2024 (in thousands HKD) | | :--- | :--- | :--- | | Total Consolidated Liabilities | 2,095,221 | 2,097,000 | [Other Income and Gains](index=13&type=section&id=3.4%20其他收入及收益) Other income and gains for the period increased significantly by 42.8%, mainly driven by the reversal of tax provisions and an increase in reimbursement income from outlet operations, which offset the decrease in government grants and interest income Other Income and Gains (For the six months ended June 30) | Metric | 2025 (in thousands HKD) | 2024 (in thousands HKD) | Change | | :--- | :--- | :--- | :--- | | Total | 35,724 | 25,009 | +42.8% | [Finance Costs](index=13&type=section&id=3.5%20融资成本) Finance costs for the period decreased significantly by 18.9% year-on-year, primarily due to a reduction in interest expenses on bank loans Finance Costs (For the six months ended June 30) | Metric | 2025 (in thousands HKD) | 2024 (in thousands HKD) | Change | | :--- | :--- | :--- | :--- | | Total | 39,687 | 48,945 | -18.9% | [Loss Before Income Tax Expense](index=14&type=section&id=3.6%20除所得税开支前亏损) The loss before income tax expense narrowed substantially during the period, mainly due to improvements in items such as depreciation, amortization, cost of inventories, and interest income, despite an increase in the fair value loss on financial assets Factors Affecting Loss Before Income Tax Expense (For the six months ended June 30) | Metric | 2025 (in thousands HKD) | 2024 (in thousands HKD) | Change | | :--- | :--- | :--- | :--- | | Fair value loss on financial assets at FVTPL | 2,518 | 571 | +341.0% | [Income Tax Expense](index=15&type=section&id=3.7%20所得税开支) Income tax expense for the period increased by 50.8% year-on-year, primarily due to an increase in provisions for China Enterprise Income Tax, with minor changes in Hong Kong Profits Tax and overseas taxes Income Tax Expense (For the six months ended June 30) | Metric | 2025 (in thousands HKD) | 2024 (in thousands HKD) | Change | | :--- | :--- | :--- | :--- | | Total | 5,387 | 3,572 | +50.8% | - Hong Kong Profits Tax is calculated using a two-tiered system, with a rate of 8.25% on the first HK$2 million and 16.5% on the remainder[30](index=30&type=chunk) - The statutory rate for China Enterprise Income Tax is 25%, but rental income from subsidiaries engaged in property investment is subject to a 10% withholding tax rate[31](index=31&type=chunk) [Dividends](index=16&type=section&id=3.8%20股息) The Board does not recommend an interim dividend for the period; the company approved a final dividend of HK$0.005 per share for FY2024 on June 20, 2025, totaling approximately HK$14.871 million - The Board of Directors does not recommend the payment of any interim dividend for the period[34](index=34&type=chunk) - The company approved the payment of a final dividend for the financial year ended December 31, 2024, of **HK$0.005 per ordinary share**, totaling approximately **HK$14,871,000**, on June 20, 2025[34](index=34&type=chunk) [Loss Per Share](index=17&type=section&id=3.9%20每股亏损) The basic and diluted loss per share for the period was 0.45 HK cents, a significant narrowing from 0.95 HK cents in the same period last year, reflecting the Group's improved loss position Loss Per Share (For the six months ended June 30) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Basic and Diluted Loss Per Share (HK cents) | (0.45) | (0.95) | - For the six months ended June 30, 2025 and 2024, the Company had no potential dilutive ordinary shares, therefore, diluted loss per share is the same as basic loss per share[35](index=35&type=chunk) [Trade and Other Receivables](index=18&type=section&id=3.10%20贸易及其他应收账款) As of June 30, 2025, total trade and other receivables increased slightly, but net trade receivables decreased, with a significant portion of trade receivables still aged over 90 days Trade and Other Receivables (As of period end) | Metric | June 30, 2025 (in thousands HKD) | Dec 31, 2024 (in thousands HKD) | | :--- | :--- | :--- | | Total Trade and Other Receivables | 132,343 | 127,231 | Ageing Analysis of Trade Receivables (Net of loss allowance) | Ageing | June 30, 2025 (in thousands HKD) | Dec 31, 2024 (in thousands HKD) | | :--- | :--- | :--- | | Over 90 days | 8,181 | 8,919 | [Advances to Margin Clients](index=19&type=section&id=3.11%20提供予保证金融资客户之垫款) As of June 30, 2025, advances to margin clients decreased slightly, are primarily secured by listed equity securities, and no loss allowance was recognized during the period Advances to Margin Clients (As of period end) | Metric | June 30, 2025 (in thousands HKD) | Dec 31, 2024 (in thousands HKD) | | :--- | :--- | :--- | | Total | 123,657 | 126,610 | - The advances are secured by listed equity securities, bear interest at rates ranging from HKD Prime Rate to Prime Rate plus 3% per annum, and are repayable on demand[38](index=38&type=chunk) - **No loss allowance was recognized** for the current and prior periods as there were no significant default events and the fair value of the collateral was sufficient to cover the loan balance[39](index=39&type=chunk) [Loans Receivable](index=19&type=section&id=3.12%20应收贷款) As of June 30, 2025, total loans receivable increased, primarily secured by mortgages over borrowers' properties and listed equity securities in Hong Kong, with annual interest rates ranging from 5% to 18% Loans Receivable (As of period end) | Metric | June 30, 2025 (in thousands HKD) | Dec 31, 2024 (in thousands HKD) | | :--- | :--- | :--- | | Net Value | 50,360 | 45,734 | - Loans receivable are secured by mortgages over borrowers' properties and listed equity securities in Hong Kong, bear interest at 5% to 18% per annum, and are repayable within one year or on demand[40](index=40&type=chunk) [Trade and Other Payables](index=20&type=section&id=3.13%20贸易及其他应付账款) As of June 30, 2025, total trade and other payables remained stable compared to the end of last year, with a decrease in trade payables from segments other than financial services Trade and Other Payables (As of period end) | Metric | June 30, 2025 (in thousands HKD) | Dec 31, 2024 (in thousands HKD) | | :--- | :--- | :--- | | Total Trade and Other Payables | 349,199 | 349,459 | Ageing Analysis of Trade Payables (Excluding Financial Services Segment) | Ageing | June 30, 2025 (in thousands HKD) | Dec 31, 2024 (in thousands HKD) | | :--- | :--- | :--- | | Over 90 days | 463 | 717 | [Management Discussion and Analysis](index=21&type=section&id=IV.%20管理层讨论与分析) [Business Review](index=21&type=section&id=4.1%20业务回顾) Facing a complex global economic environment, Symphony Holdings achieved strong performance in its retail business through strategic business layout and digital transformation, realized cross-domain synergy in its brand business, and maintained prudent operations with stable returns in its financial business [Retail Business](index=21&type=section&id=4.1.1%20零售业务) The core retail brand "SIMPLY OUTLETS" performed strongly in the Xiamen and Shenyang markets, achieving new sales highs and business format optimization, while driving digital transformation through AI market analysis and WeChat Channel live streaming, earning multiple industry recognitions - Xiamen "SIMPLY OUTLETS" achieved the "over 100 million in the first month" milestone for the fourth consecutive year, with upgraded international sports brand flagships setting new regional performance records[43](index=43&type=chunk) - Shenyang "SIMPLY OUTLETS" optimized its brand mix by introducing top-tier international brands, achieving breakthrough sales performance during holidays[43](index=43&type=chunk) - Digital transformation proved effective, with an AI market analysis system improving operational decision-making precision and WeChat Channel live streaming boosting member interaction and sales conversion rates[43](index=43&type=chunk) [Brand Promotion Business](index=21&type=section&id=4.1.2%20品牌推广业务) The brand business achieved cross-domain synergy, with SKINS optimizing its global strategic layout and deepening partnerships, healthcare business SBT expanding cross-border e-commerce channels, and Japanese sake brand "Hakuryu" strengthening high-end catering channels and overseas market promotion - Sport compression wear brand **SKINS** optimized its global strategy, focusing resources on core markets, restructuring its supply chain, and deepening collaborations with international athletes and top-tier events[44](index=44&type=chunk) - Healthcare business **SBT** successfully expanded its cross-border e-commerce channels, accelerating its penetration into the Southeast Asian market[44](index=44&type=chunk) - Japanese sake brand **"Hakuryu"** focused on strengthening high-end catering channels and exposure at industry exhibitions to enhance brand awareness as production capacity increased[45](index=45&type=chunk) [Financial Services Business](index=22&type=section&id=4.1.3%20金融服务业务) The financial business adhered to prudent operating principles, improved its risk management system, expanded its high-quality client base, and benefited from the capital market recovery, delivering performance in line with expectations and providing stable income support for the Group - The financial business adhered to prudent operating principles, expanding its high-quality client base while improving its risk management system[45](index=45&type=chunk) - Benefiting from the capital market recovery in the first half of the year, business performance was in line with expectations, providing stable income support for the Group[45](index=45&type=chunk) [Financial Review](index=22&type=section&id=4.2%20财务回顾) During the period, the Group's overall revenue slightly decreased, but through cost control and the reversal of tax provisions, both EBITDA and total comprehensive income increased, losses narrowed significantly, and the financial position improved markedly [Interim Results Overview](index=22&type=section&id=4.2.1%20中期业绩概览) During the period, the Group's overall revenue slightly decreased by 1.4%, but EBITDA grew by 2.2%, loss for the period narrowed by 52.2%, total comprehensive income attributable to owners of the Company turned profitable, and net assets increased by 1.1% Interim Results Overview (For the six months ended June 30) | Metric | 2025 (in thousands HKD) | 2024 (in thousands HKD) | Change | | :--- | :--- | :--- | :--- | | Total comprehensive income attributable to owners of the Company | 45,400 | (83,500) | Turnaround | - Net assets increased from approximately HK$2,319.0 million as of December 31, 2024, to approximately **HK$2,345.2 million** as of June 30, 2025[46](index=46&type=chunk) [Segmental Performance Analysis](index=22&type=section&id=4.2.2%20分部业绩分析) The Brand Promotion segment's revenue decreased by 13.2% and its loss widened, the Retail segment's revenue grew by 1.4% but its profit slightly declined, and the Financial Services segment's revenue fell by 7.2% as its loss widened Segment Revenue and Results (For the six months ended June 30) | Segment | Revenue 2025 (in thousands HKD) | Revenue 2024 (in thousands HKD) | Revenue Change | Results 2025 (in thousands HKD) | Results 2024 (in thousands HKD) | Results Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Financial Services | 8,300 | 8,900 | -7.2% | (1,900) | (400) | Loss Widened | - The gross profit margin of the Brand Promotion segment increased from approximately 57.7% in the same period of 2024 to approximately **62.5%** in the current period[47](index=47&type=chunk) [Cost of Sales and Gross Profit](index=23&type=section&id=4.2.3%20销售成本及毛利) Cost of sales for the period decreased by 23.0% year-on-year, leading to a slight increase in gross profit by 0.1% to approximately HK$140.7 million Cost of Sales and Gross Profit (For the six months ended June 30) | Metric | 2025 (in thousands HKD) | 2024 (in thousands HKD) | Change | | :--- | :--- | :--- | :--- | | Gross Profit | 140,700 | 140,500 | +0.1% | [Other Income and Gains](index=23&type=section&id=4.2.4%20其他收入及收益) Other income and gains for the period increased significantly by 42.8%, primarily driven by an increase in reimbursement income from outlets and government grants Other Income and Gains (For the six months ended June 30) | Metric | 2025 (in thousands HKD) | 2024 (in thousands HKD) | Change | | :--- | :--- | :--- | :--- | | Other income and gains | 35,700 | 25,000 | +42.8% | [Distribution and Selling Expenses](index=24&type=section&id=4.2.5%20分销及销售开支) Distribution and selling expenses for the period increased by 11.0% year-on-year, mainly due to higher advertising and promotion expenses and employee costs Distribution and Selling Expenses (For the six months ended June 30) | Metric | 2025 (in thousands HKD) | 2024 (in thousands HKD) | Change | | :--- | :--- | :--- | :--- | | Distribution and selling expenses | 29,700 | 26,800 | +11.0% | [Administrative Expenses](index=24&type=section&id=4.2.6%20行政开支) Administrative expenses for the period increased by 7.2% year-on-year, mainly influenced by factors such as employee costs, PRC tax surcharges, and professional fees Administrative Expenses (For the six months ended June 30) | Metric | 2025 (in thousands HKD) | 2024 (in thousands HKD) | Change | | :--- | :--- | :--- | :--- | | Administrative expenses | 69,400 | 64,800 | +7.2% | [Finance Costs](index=24&type=section&id=4.2.7%20融资成本) Finance costs for the period decreased by 18.9% year-on-year, primarily due to a reduction in interest expenses on bank loans Finance Costs (For the six months ended June 30) | Metric | 2025 (in thousands HKD) | 2024 (in thousands HKD) | Change | | :--- | :--- | :--- | :--- | | Finance costs | 39,700 | 48,900 | -18.9% | [Fair Value Loss on Financial Assets at FVTPL](index=24&type=section&id=4.2.8%20按公平价值列入损益的金融资产公平价值亏损) The fair value loss on financial assets at fair value through profit or loss for the period increased by approximately HK$1.9 million year-on-year to approximately HK$2.5 million Fair Value Loss on Financial Assets (For the six months ended June 30) | Metric | 2025 (in thousands HKD) | 2024 (in thousands HKD) | Change | | :--- | :--- | :--- | :--- | | Fair value loss | 2,500 | 600 | +316.7% | [Income Tax Expense](index=24&type=section&id=4.2.9%20所得税开支) Income tax expense for the period increased by 50.8% year-on-year to approximately HK$5.4 million Income Tax Expense (For the six months ended June 30) | Metric | 2025 (in thousands HKD) | 2024 (in thousands HKD) | Change | | :--- | :--- | :--- | :--- | | Income tax expense | 5,400 | 3,600 | +50.8% | [Loss for the Period Attributable to Owners of the Company](index=24&type=section&id=4.2.10%20本公司拥有人应占期内亏损) The loss for the period attributable to owners of the Company decreased significantly to approximately HK$13.3 million, mainly due to the combined effect of increased other income and gains and reduced finance costs Loss for the Period Attributable to Owners of the Company (For the six months ended June 30) | Metric | 2025 (in thousands HKD) | 2024 (in thousands HKD) | Change | | :--- | :--- | :--- | :--- | | Loss for the period attributable to owners of the Company | (13,300) | (28,400) | -53.2% | - The reduction in loss was mainly due to the combined effect of an increase in other income and gains and a decrease in finance costs resulting from the fall in HIBOR[57](index=57&type=chunk) [Market Information](index=25&type=section&id=4.3%20市场信息) During the period, revenue from China, Hong Kong, and other Asian countries accounted for 95.2% of total revenue, indicating the Group's business is highly concentrated in the Asian market - Revenue from China, Hong Kong, and other Asian countries accounted for approximately **95.2%** of total revenue (prior-year period: approx 94.7%)[58](index=58&type=chunk) - The remaining 4.8% (prior-year period: approx 5.3%) of revenue was derived from the United States and other countries[58](index=58&type=chunk) [Liquidity and Financial Resources](index=25&type=section&id=4.4%20流动资金及财务资源) As of June 30, 2025, the Group's bank balances and cash decreased slightly, but the current ratio improved significantly to 1.26, indicating enhanced liquidity, while the gearing ratio rose modestly Liquidity and Financial Resources (As of period end) | Metric | June 30, 2025 | Dec 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Current Ratio | 1.26 | 1.10 | +14.5% | - The Group's floating-rate bank loans carried annual interest rates ranging from approximately 1.79% to 6.81%, lower than the 1.92% to 7.83% in the same period last year[60](index=60&type=chunk) [Pledge of Assets](index=25&type=section&id=4.5%20资产质押) As of June 30, 2025, the Group had pledged various assets, including land, buildings, investment properties, right-of-use assets, and assets held for sale, as well as shares of certain subsidiaries and corporate/personal guarantees, to secure banking facilities - The Group has pledged leasehold land and buildings, outlet buildings, investment properties, right-of-use assets, and assets classified as held for sale with a total carrying amount of approximately **HK$3,363.8 million**[62](index=62&type=chunk) - In addition, shares of certain subsidiaries, corporate guarantees, and a personal guarantee provided by a director were also pledged to secure banking facilities[62](index=62&type=chunk) [Capital Commitments](index=26&type=section&id=4.6%20资本承担) As of June 30, 2025, the Group's capital commitments related to the construction of the Shenyang outlet building were approximately HK$6.1 million, a decrease from the end of the previous year Capital Commitments (As of period end) | Item | June 30, 2025 (in thousands HKD) | Dec 31, 2024 (in thousands HKD) | | :--- | :--- | :--- | | Construction costs for Shenyang outlet building | 6,100 | 8,100 | [Capital Expenditure](index=26&type=section&id=4.7%20资本开支) Capital expenditure for the period increased significantly to approximately HK$3.1 million, primarily for the purchase of property, plant and equipment, and the construction of the Shenyang outlet building Capital Expenditure (For the six months ended June 30) | Metric | 2025 (in thousands HKD) | 2024 (in thousands HKD) | Change | | :--- | :--- | :--- | :--- | | Capital Expenditure | 3,100 | 600 | +416.7% | [Contingent Liabilities](index=26&type=section&id=4.8%20或然负债) The Group has potential tax penalties arising from the overdue submission of PRC Enterprise Income Tax returns to the PRC tax authorities, but management considers the amount not to be material, and the vendor has undertaken to indemnify the related tax liabilities - The Group has potential tax penalties arising from the overdue submission of PRC Enterprise Income Tax returns to the PRC tax authorities[66](index=66&type=chunk) - Management considers the potential penalty amount not to be material, and the vendor has undertaken to indemnify any tax liabilities arising from the late submission of tax returns prior to the completion date of the acquisition[32](index=32&type=chunk) [Employees and Remuneration Policies](index=26&type=section&id=4.9%20雇员及薪酬政策) As of June 30, 2025, the Group's total number of employees decreased to 249, and employee costs (excluding directors' remuneration) decreased by 7.3% year-on-year; the Group offers competitive salaries, discretionary bonuses, share options, and other benefits Employees and Remuneration (For the six months ended June 30) | Metric | 2025 | 2024 | Change | | :--- | :--- | :--- | :--- | | Employee Costs (excluding directors' remuneration) (in thousands HKD) | 27,100 | 29,300 | -7.3% | - The Group offers competitive remuneration packages, discretionary bonuses, employee share options, insurance, medical schemes, and pension plans to eligible employees[67](index=67&type=chunk) [Treasury Policies](index=26&type=section&id=4.10%20库务政策) The Group is mainly exposed to foreign currency risk arising from monetary assets and liabilities denominated in Renminbi and US dollars; management monitors foreign exchange risk from time to time but did not enter into any financial derivatives for hedging purposes during the period - The Group is primarily exposed to foreign currency risk from monetary assets and liabilities denominated in Renminbi and US dollars arising from its sales and purchase activities[68](index=68&type=chunk) - During the period, the Group did not enter into any financial derivatives for hedging purposes, but management monitors foreign exchange risk from time to time and will take appropriate measures when there are significant exchange rate fluctuations[68](index=68&type=chunk) [Interim Dividend](index=26&type=section&id=4.11%20中期股息) The Board of Directors has resolved not to declare any interim dividend for the period - The Board of Directors has resolved not to declare any interim dividend for the period[69](index=69&type=chunk) [Material Acquisitions, Disposals, Significant Investments, and Future Plans for Significant Investments](index=27&type=section&id=4.12%20重大收购、出售、重大投资以及重大投资之未来计划) During the period, the company acquired a 15% equity interest in Shin Ito Brand Distribution Limited for US$0.6 million, making it a wholly-owned subsidiary, to gain full control and grow the "SKINS" business, thereby enhancing operational efficiency and profitability - On February 25, 2025, the Company acquired 600,000 shares (representing 15% of its entire issued shares) of Shin Ito Brand Distribution Limited for **US$0.6 million** (approximately HK$4.7 million)[70](index=70&type=chunk) - Upon completion of the acquisition, the Company holds 100% of the equity interest in Shin Ito, making it a wholly-owned subsidiary of the Company[70](index=70&type=chunk) - The Board believes the acquisition will enhance flexibility in Shin Ito's strategic direction and daily management, improve the Group's operational efficiency, and plans to grow the "SKINS" business through brand repositioning, product development, and distribution network upgrades[72](index=72&type=chunk) [Future Prospects](index=28&type=section&id=4.13%20未来前景) Looking ahead to the second half of the year, the Group will capitalize on China's economic policy dividends, with the retail segment focusing on consumption upgrades and digital transformation, and the brand business implementing differentiated development paths to address market changes and optimize operational efficiency from a solid foundation - The Group will seize policy dividends from the Chinese government, such as expanding domestic demand and optimizing the consumption environment, to deepen its strategic layout and drive high-quality development[75](index=75&type=chunk) - The retail segment will strengthen its "youthful and diversified" brand layout by introducing international luxury brands and emerging local designer brands, while deepening its omni-channel digital transformation[75](index=75&type=chunk) - The brand business will implement differentiated development paths: **SKINS** will advance the development of mass-market product lines, **SBT** will explore the health management market in the Greater Bay Area and Southeast Asia, and **"Hakuryu"** sake will accelerate promotion in key and North American markets[76](index=76&type=chunk) [Other Information](index=29&type=section&id=V.%20其他信息) [Purchase, Sale or Redemption of the Company's Listed Securities](index=29&type=section&id=5.1%20购买、出售或赎回本公司的已上市证券) During the period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities - During the period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[77](index=77&type=chunk) [Events After the Reporting Period](index=29&type=section&id=5.2%20报告期后事项) As of the date of this announcement, no significant events affecting the Group have occurred after the reporting period - No significant events affecting the Group have occurred after June 30, 2025, and up to the date of this announcement[78](index=78&type=chunk) [Corporate Governance Practices](index=29&type=section&id=5.3%20企业管治常规) The Company has complied with the Corporate Governance Code as set out in Appendix C1, Part 2 of the Listing Rules during the period, with a deviation where the roles of Chairman and Chief Executive Officer are held by the same individual, and a past issue of an independent non-executive director serving for an extended period, which has since been resolved by appointing a new independent non-executive director - The Company has complied with the Corporate Governance Code as set out in Appendix C1, Part 2 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited during the period[79](index=79&type=chunk) - **Deviation**: The roles of Chairman and Chief Executive Officer are both held by Mr Cheng Tun Nei; the Board believes this arrangement provides strong and consistent leadership[80](index=80&type=chunk) - The issue of an independent non-executive director serving for an extended period has been resolved: following the appointment of Ms Ma Yin Fan on June 20, 2025, the Company has re-complied with Code Provision B.2.4(b) of the Corporate Governance Code[80](index=80&type=chunk) [Review of Interim Results](index=30&type=section&id=5.4%20审阅中期业绩) The Company's Audit Committee has reviewed with management the accounting policies and practices adopted by the Group and discussed financial reporting matters, including the interim results announcement and interim report - The Company's Audit Committee, comprising three independent non-executive directors, has reviewed with management the accounting policies and practices adopted by the Group[81](index=81&type=chunk) - The Audit Committee has discussed audit, internal control, and financial reporting matters, including the review of the Group's interim results announcement and interim report for the period[81](index=81&type=chunk) [Publication of Interim Results and Interim Report](index=30&type=section&id=5.5%20刊发中期业绩及中期报告) This announcement is published on the websites of the Stock Exchange and the Company, and the unaudited interim report for the period containing all information required by the Listing Rules will be dispatched to shareholders and made available on or before September 30, 2025 - This announcement is published on the website of the Stock Exchange at www.hkexnews.hk and on the Company's website at www.symphonyholdings.com[82](index=82&type=chunk) - The unaudited interim report for the period containing all information required by the Listing Rules will be dispatched to the Company's shareholders and made available on the above websites on or before September 30, 2025[82](index=82&type=chunk) [Board of Directors](index=30&type=section&id=5.6%20董事会成员) As of the date of this announcement, the Board of Directors consists of four executive directors and three independent non-executive directors, with Mr Cheng Tun Nei serving as Chairman and Chief Executive Officer - The Board of Directors comprises executive directors Mr Cheng Tun Nei (Chairman and Chief Executive Officer), Mr Chan Kar Lee, Mr Li Chang Ming, and Ms Fung Kim Wan[83](index=83&type=chunk) - The independent non-executive directors are Mr Shum Pui Kay, Mr Wah Wang Kei, and Ms Ma Yin Fan[83](index=83&type=chunk)

[Interim Results Announcement](index=1&type=section&id=Interim%20Results%20Announcement) This report presents the unaudited interim financial statements for the six months ended June 30, 2025, including management's discussion and analysis, and other relevant disclosures [GEM Features and Disclaimer](index=1&type=section&id=GEM%20Features%20and%20Disclaimer) This section outlines the GEM market's role as a listing platform for SMEs, noting its higher investment risks, while the Stock Exchange disclaims responsibility for this announcement's content, and directors assume full accountability for its accuracy - The GEM market provides a listing platform for small and medium-sized companies, but it carries higher investment risks[3](index=3&type=chunk) - Hong Kong Exchanges and Clearing Limited and the Stock Exchange are not responsible for the content of this announcement and make no representations regarding it[3](index=3&type=chunk) - The company's directors collectively and individually assume full responsibility for this announcement, confirming the information is accurate, complete, and not misleading[3](index=3&type=chunk) [Interim Results (Unaudited)](index=2&type=section&id=Interim%20Results%20%28Unaudited%29) This section presents the Group's unaudited condensed consolidated financial statements for the six months ended June 30, 2025, including the statement of profit or loss and other comprehensive income, statement of financial position, statement of changes in equity, and statement of cash flows, reflecting operational performance, financial condition, and cash flows during the period [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=2&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For the six months ended June 30, 2025, the Group's revenue significantly increased, but operating loss and loss for the period both substantially widened, primarily due to losses from the disposal of a joint venture and an associate, alongside increased administrative expenses Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income Key Data | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Revenue | 300,562 | 214,841 | | Cost of sales and services | (252,873) | (183,031) | | Gross profit | 47,689 | 31,810 | | Operating loss | (60,089) | (11,923) | | Loss before tax | (50,746) | (12,563) | | Loss for the period | (29,102) | (14,690) | | Loss for the period attributable to owners of the Company | (28,372) | (6,049) | | Basic and diluted loss per share (cents per share) | (1.87) | (0.40) | - Loss on disposal of a joint venture was **RMB 16,142 thousand**, and loss on partial disposal of an associate was **RMB 22,097 thousand**[4](index=4&type=chunk) - Administrative expenses increased from **RMB 37,866 thousand** in 2024 to **RMB 62,567 thousand** in 2025[4](index=4&type=chunk) [Condensed Consolidated Statement of Financial Position](index=4&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the Group's total assets and net assets slightly decreased, but net current assets significantly increased, indicating an improvement in liquidity Condensed Consolidated Statement of Financial Position Key Data | Indicator | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Total assets | 5,330,276 | 5,516,277 | | Current assets | 1,172,380 | 1,101,413 | | Current liabilities | 870,873 | 1,037,109 | | Net current assets | 301,507 | 64,304 | | Net assets | 3,960,620 | 3,964,803 | - Investment in associates decreased from **RMB 2,597,989 thousand** as of December 31, 2024, to **RMB 2,354,557 thousand** as of June 30, 2025[6](index=6&type=chunk) - Cash and cash equivalents increased from **RMB 147,634 thousand** as of December 31, 2024, to **RMB 183,040 thousand** as of June 30, 2025[6](index=6&type=chunk) [Condensed Consolidated Statement of Changes in Equity](index=6&type=section&id=Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) Total equity for the period slightly decreased, primarily due to a negative total comprehensive income for the period, accompanied by a reduction in non-controlling interests Condensed Consolidated Statement of Changes in Equity Key Data | Indicator | June 30, 2025 (RMB thousands) | January 1, 2025 (RMB thousands) | | :--- | :--- | :--- | | Equity attributable to owners of the Company | 3,710,875 | 3,709,800 | | Non-controlling interests | 249,745 | 255,003 | | Total equity | 3,960,620 | 3,964,803 | - Total comprehensive income for the period was **RMB (533) thousand**, compared to **RMB 12,247 thousand** in the same period last year[8](index=8&type=chunk) - Non-controlling interests decreased by **RMB 5,258 thousand** during the period[8](index=8&type=chunk) [Condensed Consolidated Statement of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) For the six months ended June 30, 2025, the Group experienced net cash outflow from operating activities, but a significant increase in net cash inflow from investing activities ultimately led to a net increase in cash and cash equivalents Condensed Consolidated Statement of Cash Flows Key Data | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Net cash (used in)/from operating activities | (100,772) | 155,028 | | Net cash from/(used in) investing activities | 243,380 | (189,609) | | Net cash (used in)/from financing activities | (107,980) | 54,126 | | Net increase in cash and cash equivalents | 34,628 | 19,545 | | Cash and cash equivalents at end of period | 183,040 | 176,155 | - Net cash from investing activities shifted from an outflow in the prior period to an inflow this period, likely related to the disposal of associate shares[9](index=9&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed notes to the condensed consolidated financial statements, covering general information, accounting policies, revenue breakdown, segment information, finance costs, taxation, loss per share, dividends, receivables and payables, share capital, related party transactions, and financial guarantees, offering context and specifics for understanding the financial data [General Information](index=8&type=section&id=General%20Information) The Company is a Sino-foreign joint stock limited liability company incorporated in China, with H shares listed on GEM, primarily engaged in investment holding, while its subsidiaries operate diverse businesses including tourism, wine, metal products, and LED devices - The Company's H shares are listed on GEM, with its principal business being investment holding[10](index=10&type=chunk) - Subsidiary businesses encompass tourism and leisure, wine production and sales, metal product sales and procurement, and LED device sales and production[10](index=10&type=chunk) [Basis of Preparation and Significant Accounting Policies](index=8&type=section&id=Basis%20of%20Preparation%20and%20Significant%20Accounting%20Policies) The condensed consolidated financial statements are prepared in accordance with HKAS 34 and the GEM Listing Rules, reviewed by the audit committee, with no material impact on accounting policies or reported amounts from new and revised HKFRSs adopted this period - The condensed consolidated financial statements are prepared in accordance with HKAS 34 and the GEM Listing Rules[11](index=11&type=chunk) - The adoption of new and revised HKFRSs had no material impact on the Group's accounting policies or reported amounts[11](index=11&type=chunk) - The condensed consolidated financial statements are unaudited but have been reviewed by the Audit Committee[12](index=12&type=chunk) [Revenue](index=9&type=section&id=Revenue) Total revenue for the period increased by 39.9% year-on-year, primarily driven by significant growth in metal product sales and shuttle bus services, with tourism and leisure services also showing substantial improvement Revenue from Contracts with Customers by Major Product or Service Line | Product or Service Line | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Metal products | 190,238 | 128,573 | | Shuttle bus services | 68,680 | 56,187 | | LED devices | 26,539 | 25,646 | | Tourism and leisure services | 11,169 | 182 | | Wine and related products | 3,887 | 4,253 | | Others | 49 | – | | **Total Revenue** | **300,562** | **214,841** | - Revenue from metal products increased by **48.0%** year-on-year, serving as the primary driver of revenue growth this period[14](index=14&type=chunk) - Tourism and leisure services revenue significantly increased from **RMB 182 thousand** to **RMB 11,169 thousand**[14](index=14&type=chunk) [Other Gains, Income and Losses, Net](index=9&type=section&id=Other%20Gains%2C%20Income%20and%20Losses%2C%20Net) Net other gains, income, and losses for the period resulted in a loss of RMB 1,817 thousand, an expansion of the loss compared to the prior period, mainly due to net losses in the "Others" category Other Gains, Income and Losses, Net | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Bank interest income | 456 | 556 | | Government grants | 25 | 247 | | Tax incentives | 199 | 1,788 | | Others | (2,497) | (2,962) | | **Total** | **(1,817)** | **(371)** | - Government grants and tax incentives both significantly decreased compared to the same period last year[15](index=15&type=chunk) [Segment Information](index=10&type=section&id=Segment%20Information) The Group operates four reportable segments: tourism development, investment holding, trading of metal products, and sales and production of LED devices, with metal product trading contributing the most revenue, investment holding showing significant growth in share of profits of associates, and China (excluding Hong Kong) being the primary source of revenue - The Group has four reportable segments: tourism development, investment holding, trading of metal products, and sales and production of LED devices[17](index=17&type=chunk) Segment Revenue and Profit/Loss | Segment | 2025 Revenue (RMB thousands) | 2024 Revenue (RMB thousands) | 2025 Segment (Loss)/Profit (RMB thousands) | 2024 Segment Profit/(Loss) (RMB thousands) | | :--- | :--- | :--- | :--- | :--- | | Tourism Development | 79,849 | 56,369 | (1,652) | 5,821 | | Investment Holding | – | – | (14,042) | 19,727 | | Trading of Metal Products | 190,238 | 128,573 | 3,072 | 1,867 | | Sales and Production of LED Devices | 26,539 | 25,646 | (6,936) | (6,614) | | All Other Segments | 3,936 | 4,253 | (1,169) | (437) | | **Total** | **300,562** | **214,841** | **(20,727)** | **20,364** | - Share of profits of associates increased from **RMB 22,859 thousand** in 2024 to **RMB 30,247 thousand** in 2025[19](index=19&type=chunk) Geographical Revenue and Non-current Assets | Region | 2025 Revenue (RMB thousands) | 2024 Revenue (RMB thousands) | 2025 Non-current Assets (RMB thousands) | 2024 Non-current Assets (RMB thousands) | | :--- | :--- | :--- | :--- | :--- | | China (excluding Hong Kong) | 296,675 | 203,201 | 3,348,586 | 3,596,161 | | United States | 3,887 | 4,253 | 14,612 | 15,072 | | Singapore | – | 7,387 | – | – | | Hong Kong | – | – | – | 1 | | **Total** | **300,562** | **214,841** | **3,363,198** | **3,611,234** | - Revenue from Customer A (Metal Products Trading segment) increased from **RMB 86,959 thousand** in 2024 to **RMB 190,238 thousand** in 2025[24](index=24&type=chunk) [Finance Costs, Net](index=13&type=section&id=Finance%20Costs%2C%20Net) Net finance costs for the period amounted to RMB 19,896 thousand, a decrease from the prior period, primarily comprising interest on bank and other borrowings and foreign exchange losses Finance Costs, Net | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Interest on bank, other borrowings and lease liabilities | 19,181 | 22,855 | | Net foreign exchange losses | 715 | 590 | | **Total** | **19,896** | **23,445** | - Interest expenses on bank, other borrowings, and lease liabilities decreased[26](index=26&type=chunk) [Income Tax Credit/Expense](index=14&type=section&id=Income%20Tax%20Credit%2FExpense) The period recorded an income tax credit of RMB 21,644 thousand, primarily due to adjustments for over-provision in prior years in China, a stark contrast to the income tax expense in the same period last year Income Tax Credit/Expense | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Current tax – China | 1,118 | 2,696 | | Over-provision in prior years – China | (22,217) | – | | Deferred tax | (547) | (571) | | **Total** | **(21,644)** | **2,127** | - Over-provision in prior years in China of **RMB 22,217 thousand** was the main reason for the income tax credit this period[27](index=27&type=chunk) - The Company's subsidiaries established in China are generally subject to income tax at a rate of **25%**[28](index=28&type=chunk) [Loss for the Period](index=14&type=section&id=Loss%20for%20the%20Period) The loss for the period is presented after deducting expenses such as amortization of other intangible assets and depreciation Loss for the Period Deducted Items | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Amortisation of other intangible assets | 6,766 | 6,796 | | Depreciation | 15,068 | 14,645 | [Loss Per Share](index=14&type=section&id=Loss%20Per%20Share) For the six months ended June 30, 2025, basic and diluted loss per share attributable to owners of the Company significantly increased to RMB 1.87 cents, primarily due to the expanded loss for the period Loss Per Share | Indicator | 2025 (RMB) | 2024 (RMB) | | :--- | :--- | :--- | | Basic and diluted loss per share (cents per share) | (1.87) | (0.40) | | Loss for the period attributable to owners of the Company | 28,372,000 | 6,049,000 | | Weighted average number of ordinary shares in issue | 1,514,464,000 | 1,514,464,000 | - Basic and diluted loss per share are identical, with no adjustments made[30](index=30&type=chunk) [Dividends](index=14&type=section&id=Dividends) The Board of Directors does not recommend the payment of an interim dividend for the six months ended June 30, 2025 - The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025 (2024: nil)[30](index=30&type=chunk) [Property, Plant and Equipment](index=15&type=section&id=Property%2C%20Plant%20and%20Equipment) During the period, the Group made additions to property, plant and equipment amounting to approximately RMB 5.90 million - Additions to property, plant and equipment during the period amounted to approximately **RMB 5.90 million**[31](index=31&type=chunk) [Trade and Other Receivables](index=15&type=section&id=Trade%20and%20Other%20Receivables) As of June 30, 2025, total trade and other receivables slightly increased, with the aging analysis of trade receivables showing that most are due within three months, indicating diversified credit risk Trade and Other Receivables | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Trade and bills receivables (net) | 168,278 | 168,602 | | Other receivables (net) | 762,967 | 757,239 | | Prepayments to suppliers | 3,259 | 11,058 | | Prepayments | 38,003 | 2,077 | | **Total** | **972,507** | **938,976** | Aging Analysis of Trade Receivables | Aging | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Less than 3 months | 135,029 | 118,720 | | 3 to 6 months | 32,096 | 49,356 | | 6 to 12 months | 720 | 526 | | Over 1 year | 433 | – | | **Total** | **168,278** | **168,602** | - The credit period granted to customers is generally three months, and there is no excessive concentration of credit risk[32](index=32&type=chunk) [Trade and Other Payables](index=16&type=section&id=Trade%20and%20Other%20Payables) As of June 30, 2025, total trade and other payables decreased, mainly due to a reduction in accrued expenses and other payables, with the aging analysis of trade payables showing a significant portion due over one year Trade and Other Payables | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Trade payables | 104,999 | 107,384 | | Contract liabilities | 2,024 | 1,236 | | Accrued expenses and other payables | 169,134 | 219,538 | | Dividends payable | 21,194 | 21,313 | | Salaries and staff welfare payable | 12,221 | 11,439 | | Amounts due to associates | 74 | 2,794 | | Amounts due to related parties | 6,177 | 6,327 | | **Total** | **315,823** | **370,031** | Aging Analysis of Trade Payables | Aging | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | 0 to 90 days | 22,995 | 38,769 | | 91 to 180 days | 67 | 966 | | 181 to 360 days | 21,379 | 1,918 | | Over 1 year | 60,558 | 65,731 | | **Total** | **104,999** | **107,384** | [Share Capital](index=17&type=section&id=Share%20Capital) The Company's registered, issued, and fully paid share capital remained unchanged during the period, comprising both unlisted shares and H shares Share Capital Composition | Share Class | Number of Shares (thousand shares) | Amount (RMB thousands) | | :--- | :--- | :--- | | Unlisted shares | 700,000 | 70,000 | | H shares | 814,464 | 81,446 | | **Total** | **1,514,464** | **151,446** | - The par value per share is **RMB 0.10**[34](index=34&type=chunk) [Significant Related Party Transactions](index=17&type=section&id=Significant%20Related%20Party%20Transactions) This section discloses balances with related parties and key management personnel remuneration, with the latter showing a decrease compared to the prior period Balances with Related Parties | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Amounts due from associates | 460 | 390 | | Amounts due to associates | 74 | 2,794 | | Amounts due to related companies controlled by Peking University | 5,732 | 5,882 | Key Management Personnel Remuneration | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Short-term employee benefits | 1,729 | 2,121 | | Post-employment benefits | 254 | 257 | | **Total** | **1,983** | **2,378** | [Financial Guarantees](index=18&type=section&id=Financial%20Guarantees) The Group provided financial guarantees of RMB 100 million for bank facilities granted to an associate, which has fully drawn down the facilities - The Group issued two guarantees for bank facilities granted to an associate, with a maximum limit of **RMB 100,000,000**[36](index=36&type=chunk) - The associate has drawn down **RMB 100,000,000** of the facilities[36](index=36&type=chunk) [Capital Commitments](index=18&type=section&id=Capital%20Commitments) As of June 30, 2025, the Group's contracted but unprovided capital commitments for property, plant and equipment significantly increased, alongside committed capital contributions to an associate Capital Commitments | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Contracted but not provided for – property, plant and equipment | 98,192 | 69,270 | | Committed capital contributions to an associate | 3,478 | 3,478 | - Capital commitments for property, plant and equipment increased by approximately **41.7%** year-on-year[37](index=37&type=chunk) [Management Discussion and Analysis](index=19&type=section&id=Management%20Discussion%20and%20Analysis) This section details the Group's performance and strategies across tourism development, investment holding, LED device sales and production, metal product trading, and other businesses, reviewing financial conditions, liquidity, significant investments, and risk management, while also outlining future challenges and opportunities [Business Review](index=19&type=section&id=Business%20Review) The Group's diversified businesses include tourism development, investment holding, LED device sales and production, metal product trading, and other ventures; tourism benefited from favorable weather, investment holding involved arbitration and disposal of shares in Qingniao Fire, LED business attracted new investors, and vocational education expansion is planned [Tourism Development](index=19&type=section&id=Tourism%20Development) The Group's tourism business in Nanyue District, Hunan Province, benefited from favorable weather, with visitor and pilgrim numbers increasing by approximately 19% year-on-year; additionally, the Group plans to establish a joint venture in Gansu Province to invest in sightseeing rail transit and supporting facilities to expand tourism project investments - For the six months ended June 30, 2025, the number of visitors and pilgrims to Hengshan Scenic Area increased by approximately **19%** year-on-year[39](index=39&type=chunk) - The Company's non-wholly owned subsidiary, Chuanqi Tourism (Hunan) Co Ltd, will invest **RMB 49 million** to establish a joint venture for the development and operation of sightseeing rail transit, sightseeing buses, and supporting facilities within the Zha Ga Na Scenic Area in Diebu County, Gansu Province[40](index=40&type=chunk) [Investment Holding](index=19&type=section&id=Investment%20Holding) The Group's investment holding business includes private equity funds, semiconductor materials and display device companies, shares in Qingniao Fire, and other financial assets; regarding the disposal of Qingniao Fire shares, an arbitration award requires the buyer to return 70,044,000 shares, and the Group has sold 20,000,000 Qingniao Fire shares under the disposal authorization, with net proceeds of approximately RMB 232.1 million to be used for debt repayment - Investment holding business primarily includes private equity funds, semiconductor materials and display device companies, and shares in Qingniao Fire Co Ltd[41](index=41&type=chunk) - The Beijing Arbitration Commission ruled that the buyer must return **70,044,000** shares of Qingniao Fire to the Company[44](index=44&type=chunk) - The Company has sold a total of **20,000,000** shares of Qingniao Fire under the disposal authorization, with gross proceeds of approximately **RMB 233.4 million** and net proceeds of approximately **RMB 232.1 million**[49](index=49&type=chunk) - The net proceeds from the disposal will be used to repay the Group's bank and other borrowings to strengthen its liquidity position[48](index=48&type=chunk) - As of the date of this announcement, the Group holds **186,569,363** shares of Qingniao Fire, representing approximately **21.4%** equity interest[50](index=50&type=chunk) [Sales and Production of LED Devices](index=22&type=section&id=Sales%20and%20Production%20of%20LED%20Devices) The Company, through Guangdong Xinrui Liuming Optoelectronics Co Ltd, engages in the R&D, production, and sales of high-end ceramic high-power LED devices and modules; recently, Guangdong Liuming received an investment of RMB 50.63 million, which will support its growth and development - Primarily engaged in the R&D, production, and sales of high-end ceramic high-power LED devices and modules, focusing on special light source applications[51](index=51&type=chunk) - Investors injected **RMB 50.63 million** into Guangdong Liuming, reducing the Group's effective equity interest in Guangdong Liuming from **94%** to approximately **62.98%**[52](index=52&type=chunk) [Metal Products Trading](index=23&type=section&id=Metal%20Products%20Trading) During the period, the Group engaged in the sale and procurement of metal products in China - The Group engaged in the sale and procurement of metal products in China during the period[53](index=53&type=chunk) [Other Businesses](index=23&type=section&id=Other%20Businesses) The Group operates a winery in the United States and has completed the acquisition of a 70% equity interest in Beijing Qingniao Vocational Education Technology Development Co Ltd to expand into vocational education and diversify its business - The Group operates a winery in Virginia, USA, producing and selling wine and related products[54](index=54&type=chunk) - The acquisition of a **70%** equity interest in Beijing Qingniao Vocational Education Technology Development Co Ltd for a consideration of **RMB 13.05 million** has been completed, aiming to diversify business into vocational education[54](index=54&type=chunk) [Prospects](index=24&type=section&id=Prospects) Looking ahead to the second half of 2025, global economic growth is expected to remain sluggish, posing challenges for the Group with weakening local consumption and reduced demand for products and services; in response, the Group will implement cost control, enhance operational efficiency, expand new customer bases and product portfolios, and prudently evaluate potential investment opportunities to maintain profitability and competitive advantages - Global economic growth is expected to remain sluggish in the second half of 2025, and the Group will face weakening local consumer spending and reduced demand for products and services[55](index=55&type=chunk) - The Group will implement measures including closely monitoring and controlling costs, improving operational efficiency, and expanding new customer segments and product portfolios[55](index=55&type=chunk) - The Group will continue to adopt a prudent approach to explore and evaluate potential investment opportunities, aiming to achieve a balanced and diversified investment portfolio[55](index=55&type=chunk) [Financial Review](index=24&type=section&id=Financial%20Review) This section provides a detailed financial review of the Group's business segments, highlighting significant growth in total revenue and gross profit, but also a substantial increase in loss attributable to owners of the Company due to several non-recurring losses, including an alleged misappropriation event, disposal of an associate, and a joint venture loss [Tourism Development (Financial)](index=24&type=section&id=Tourism%20Development%20%28Financial%29) Tourism development business revenue increased by 41.7% year-on-year, primarily due to improved performance after being adversely affected by extreme weather in the prior period; however, the Group recorded a loss of approximately RMB 24 million due to an alleged misappropriation of funds by a cashier - Tourism development business revenue was approximately **RMB 79.8 million**, an increase of **41.7%** compared to the same period in 2024[56](index=56&type=chunk) - The Group recorded a loss of approximately **RMB 24 million** due to an alleged misappropriation event, which is currently under forensic investigation[57](index=57&type=chunk) [Investment Holding (Financial)](index=25&type=section&id=Investment%20Holding%20%28Financial%29) Segment total assets for investment holding business decreased by 5.7%, primarily due to the disposal of 20,000,000 shares in associate Qingniao Fire, resulting in a recorded loss of approximately RMB 22.1 million - Segment total assets for investment holding business decreased by **5.7%** to approximately **RMB 4.0255 billion**[58](index=58&type=chunk) - A loss of approximately **RMB 22.1 million** was recorded due to the partial disposal of an equity interest in an associate[58](index=58&type=chunk) [Sales and Production of LED Devices (Financial)](index=25&type=section&id=Sales%20and%20Production%20of%20LED%20Devices%20%28Financial%29) Revenue from the sales and production of LED devices business was approximately RMB 26.5 million, representing a 3.5% year-on-year increase - Revenue from the sales and production of LED devices business was approximately **RMB 26.5 million**, an increase of **3.5%** year-on-year[59](index=59&type=chunk) [Metal Products Trading (Financial)](index=25&type=section&id=Metal%20Products%20Trading%20%28Financial%29) Revenue from metal products trading business was approximately RMB 190.2 million, a 48.0% year-on-year increase, primarily attributed to higher transaction volumes; however, gross profit margin decreased to 1.5% due to market competition and price fluctuations - Revenue from metal products trading business was approximately **RMB 190.2 million**, an increase of **48.0%** year-on-year[60](index=60&type=chunk) - Gross profit margin decreased from **2.1%** in 2024 to **1.5%** in the current period[60](index=60&type=chunk) [Other Businesses (Financial)](index=25&type=section&id=Other%20Businesses%20%28Financial%29) Winery business revenue remained largely stable year-on-year, amounting to approximately RMB 3.9 million - Winery business revenue was approximately **RMB 3.9 million**, remaining largely stable year-on-year[61](index=61&type=chunk) [Revenue and Gross Profit](index=25&type=section&id=Revenue%20and%20Gross%20Profit) The Group's total revenue increased by 39.9% year-on-year to RMB 300.6 million, and gross profit grew by 49.9% to RMB 47.7 million, mainly driven by improved tourism development business and increased metal product trading volume - Total revenue was approximately **RMB 300.6 million**, an increase of **39.9%** compared to the same period in 2024[62](index=62&type=chunk) - Gross profit increased by **49.9%** to approximately **RMB 47.7 million**[62](index=62&type=chunk) [Loss on Disposal of a Joint Venture](index=25&type=section&id=Loss%20on%20Disposal%20of%20a%20Joint%20Venture) The Group recorded a loss of approximately RMB 16.1 million due to the dissolution of an immaterial joint venture, primarily resulting from the reclassification of exchange reserves to profit or loss - A loss of approximately **RMB 16.1 million** was recorded due to the dissolution of an immaterial joint venture[63](index=63&type=chunk) [Loss on Partial Disposal of an Associate](index=26&type=section&id=Loss%20on%20Partial%20Disposal%20of%20an%20Associate) The Group recorded a loss of approximately RMB 22.1 million due to the partial disposal of associate Qingniao Fire under the disposal authorization - A loss of approximately **RMB 22.1 million** was recorded due to the partial disposal of associate Qingniao Fire[64](index=64&type=chunk) [Finance Costs, Net (Financial)](index=26&type=section&id=Finance%20Costs%2C%20Net%20%28Financial%29) Net finance costs amounted to approximately RMB 19.9 million, primarily comprising interest on bank and other borrowings, interest on lease liabilities, and net exchange differences - Finance costs were approximately **RMB 19.9 million**, a decrease from **RMB 23.4 million** in the same period last year[65](index=65&type=chunk) [Share of Profits of Associates](index=26&type=section&id=Share%20of%20Profits%20of%20Associates) The Group's share of profits of associates increased by 32.3% year-on-year to approximately RMB 30.2 million, mainly due to the relatively unsatisfactory financial performance of associates in the prior period - Share of profits of associates was approximately **RMB 30.2 million**, an increase of **32.3%** year-on-year[66](index=66&type=chunk) [Share of Losses of Joint Ventures](index=26&type=section&id=Share%20of%20Losses%20of%20Joint%20Ventures) The Group's share of losses of joint ventures was approximately RMB 1 million, an increase compared to the prior period - Share of losses of joint ventures was approximately **RMB 1 million**, compared to **RMB 54 thousand** in the same period last year[67](index=67&type=chunk) [Income Tax Credit/Expense (Financial)](index=26&type=section&id=Income%20Tax%20Credit%2FExpense%20%28Financial%29) The period recorded an income tax credit of approximately RMB 21.6 million, primarily comprising net China corporate income tax credit and deferred tax credit - Income tax credit for the period was approximately **RMB 21.6 million**, compared to an expense of **RMB 2.2 million** in the same period last year[68](index=68&type=chunk) [Loss Attributable to Owners of the Company](index=26&type=section&id=Loss%20Attributable%20to%20Owners%20of%20the%20Company) Loss attributable to owners of the Company significantly increased by 369.0% year-on-year to approximately RMB 28.4 million, primarily due to several non-recurring losses including an alleged misappropriation event, partial disposal of an associate, and dissolution of a joint venture - Loss attributable to owners of the Company was approximately **RMB 28.4 million**, an increase of **369.0%** year-on-year[69](index=69&type=chunk) - Primarily attributed to: a loss of approximately **RMB 24 million** from an alleged misappropriation event, a loss of approximately **RMB 22.1 million** from the partial disposal of Qingniao Fire, and a loss of approximately **RMB 16.1 million** from the dissolution of an immaterial joint venture[69](index=69&type=chunk) [Financial Position](index=27&type=section&id=Financial%20Position) The Group's current ratio increased to 1.35 and gearing ratio decreased to 22.8%, indicating improved liquidity and reduced financial leverage, mainly due to a decrease in bank and other borrowings Financial Ratios | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Current ratio | 1.35 | 1.06 | | Gearing ratio | 22.8% | 25.0% | - The increase in current ratio and decrease in gearing ratio were primarily due to a reduction in the Group's bank and other borrowings during the period[70](index=70&type=chunk) [Significant Acquisitions and Disposals of Subsidiaries and Affiliated Companies](index=27&type=section&id=Significant%20Acquisitions%20and%20Disposals%20of%20Subsidiaries%20and%20Affiliated%20Companies) Aside from those already disclosed in this report, the Group had no other significant acquisitions or disposals of subsidiaries and affiliated companies requiring disclosure during the period - For the six months ended June 30, 2025, the Group did not undertake any significant acquisitions or disposals requiring disclosure under the GEM Listing Rules[71](index=71&type=chunk) [Liquidity, Financial Resources and Capital Structure](index=27&type=section&id=Liquidity%2C%20Financial%20Resources%20and%20Capital%20Structure) The Group primarily relies on internal financial resources and corporate borrowings for operations, with cash and cash equivalents of approximately RMB 183.0 million at period-end; total outstanding borrowings were approximately RMB 901.4 million, mostly due within one year, bearing fixed and floating interest rates - As of June 30, 2025, the Group had cash and cash equivalents of approximately **RMB 183.0 million**[72](index=72&type=chunk) - The Group's total outstanding borrowings amounted to approximately **RMB 901.4 million**[72](index=72&type=chunk) Outstanding Borrowings Repayment Schedule | Repayment Period | Amount (RMB thousands) | | :--- | :--- | | Within one year | 534,800 | | One to two years | 84,100 | | Two to five years | 178,000 | | More than five years | 104,500 | | **Total** | **901,400** | - Approximately **RMB 556.4 million** bears interest at fixed rates, and approximately **RMB 345.0 million** bears interest at floating rates, with annual interest rates ranging from zero to **5.4%**[72](index=72&type=chunk) [Significant Investments Held](index=27&type=section&id=Significant%20Investments%20Held) The Group holds financial assets totaling approximately RMB 758.7 million, representing 14.2% of total assets, primarily including a 13.7% equity interest in Shanghai Xianyao Display Technology Co Ltd; the Group's investment strategy is to diversify risk, seize market opportunities, and plans to invest in industries such as tourism and leisure, new materials, semiconductors, and high-end equipment manufacturing - The Group holds financial assets at fair value through other comprehensive income and at fair value through profit or loss totaling approximately **RMB 758.7 million**, representing **14.2%** of total assets[74](index=74&type=chunk) - Holds a **13.7%** equity interest in Shanghai Xianyao Display Technology Co Ltd, with a fair value of approximately **RMB 712.8 million**[75](index=75&type=chunk) - The investment strategy is to diversify assets and businesses into promising industries, including tourism and leisure, new materials, semiconductor products and technology, and high-end equipment manufacturing[75](index=75&type=chunk) [Future Plans for Material Investments or Capital Assets](index=28&type=section&id=Future%20Plans%20for%20Material%20Investments%20or%20Capital%20Assets) As of June 30, 2025, the Group had no material investment plans other than those already disclosed - As of June 30, 2025, the Group had no material investment plans[76](index=76&type=chunk) [Contingent Liabilities](index=28&type=section&id=Contingent%20Liabilities) The Group has contingent liabilities of approximately RMB 100 million for guarantees provided for bank facilities granted to an associate - The Group has contingent liabilities of approximately **RMB 100 million** for guarantees provided for bank facilities granted to an associate[77](index=77&type=chunk) [Foreign Currency Risk](index=28&type=section&id=Foreign%20Currency%20Risk) The Group is exposed to foreign currency risks from USD, RMB, and HKD, but due to most business activities being denominated in RMB, there is a natural hedge, thus no foreign currency hedging policy has been formulated - The Group is exposed to foreign currency risks from USD, RMB, and HKD[79](index=79&type=chunk) - The Group has not formulated a foreign currency hedging policy, as turnover and most production costs are denominated in RMB, providing a natural hedge[79](index=79&type=chunk) [Pledge of Assets](index=29&type=section&id=Pledge%20of%20Assets) As of June 30, 2025, the Group has pledged fixed assets of approximately RMB 197.7 million, investment properties of approximately RMB 333.6 million, and equity interests in an associate as collateral for bank and other borrowings - Fixed assets of approximately **RMB 197.7 million** have been pledged as collateral[80](index=80&type=chunk) - Investment properties of approximately **RMB 333.6 million** have been pledged as collateral[80](index=80&type=chunk) - Equity interests in an associate have been pledged as collateral[80](index=80&type=chunk) [Employees and Remuneration Policies](index=29&type=section&id=Employees%20and%20Remuneration%20Policies) As of the end of the reporting period, the Group employed 740 staff, a 23.3% increase from the end of 2024; staff costs, including directors' emoluments, were approximately RMB 38.3 million, consistent with the increase in headcount, and the Group offers competitive remuneration packages and prioritizes workplace safety - The Group employed **740** staff, an increase of **23.3%** from the end of 2024[81](index=81&type=chunk) - Staff costs (including directors' emoluments, employee salaries, and contributions to retirement benefit schemes) were approximately **RMB 38.3 million**, an increase from **RMB 32.9 million** in the same period last year[81](index=81&type=chunk) - The Group provides employees with a competitive remuneration package, including medical and outbound insurance, and makes adequate and timely contributions to pension and MPF schemes[81](index=81&type=chunk) [Other Information](index=29&type=section&id=Other%20Information) This section discloses the interests of directors, supervisors, and chief executives, as well as substantial shareholders, in the company's shares, confirms compliance with corporate governance practices and the code for securities transactions by directors, and states that no listed securities were purchased, redeemed, or sold during the period, also outlining the audit committee's responsibilities [Directors', Supervisors' and Chief Executive's Interests and Short Positions in Shares and Underlying Shares](index=29&type=section&id=Directors%27%2C%20Supervisors%27%20and%20Chief%20Executive%27s%20Interests%20and%20Short%20Positions%20in%20Shares%20and%20Underlying%20Shares) As of June 30, 2025, Supervisor Ms Zhou Min held approximately 13.56% of the Company's issued unlisted shares through a trust, and Executive Director Mr Liu Ziyi beneficially owned approximately 0.37% of the Company's issued H shares Directors', Supervisors' and Chief Executive's Long Positions in Shares | Name | Capacity | Interests in Unlisted Shares (thousand shares) | Interests in H Shares (thousand shares) | Approximate Percentage of Total Issued Shares | | :--- | :--- | :--- | :--- | :--- | | Ms Zhou Min | Beneficiary of a trust | 205,414 | – | 13.56% | | Mr Liu Ziyi | Beneficial owner | – | 3,000 | 0.20% | [Rights of Directors and Supervisors to Acquire Shares](index=30&type=section&id=Rights%20of%20Directors%20and%20Supervisors%20to%20Acquire%20Shares) During the period, no rights to acquire benefits by way of acquisition of shares in the Company were granted to or exercised by the directors and supervisors or their respective spouses or minor children - At no time during the period were any rights to acquire benefits by way of acquisition of shares in the Company granted to or exercised by the directors and supervisors or their respective spouses or minor children[84](index=84&type=chunk) [Substantial Shareholders' and Other Persons' Interests and Short Positions in Shares and Underlying Shares](index=31&type=section&id=Substantial%20Shareholders%27%20and%20Other%20Persons%27%20Interests%20and%20Short%20Positions%20in%20Shares%20and%20Underlying%20Shares) As of June 30, 2025, several substantial shareholders and other persons held significant interests in the Company's issued share capital, including Peking University and its associated entities, Shenzhen Yingtai Industrial Investment Co Ltd and its associated entities, Zhai Yong and his associated entities, Heng Huat Investments Limited and its associated entities, Mongolia Energy Corporation Limited and its associated entities, and Huang Taomei and her associated entities Substantial Shareholders' and Other Persons' Long Positions in Shares | Shareholder Name | Capacity | Interests in Unlisted Shares (thousand shares) | Interests in H Shares (thousand shares) | Approximate Percentage of Total Issued Shares | | :--- | :--- | :--- | :--- | :--- | | Peking University | Interest of controlled corporation | 85,000 | – | 5.61% | | Shenzhen Yingtai Industrial Investment Co Ltd | Beneficial owner | 115,000 | – | 7.59% | | Zhai Yong | Interest of controlled corporation | 130,000 | – | 8.58% | | Heng Huat Investments Limited | Interest of controlled corporation | 205,414 | – | 13.56% | | Mongolia Energy Corporation Limited | Interest of controlled corporation | 84,586 | – | 5.58% | | Asia Development Capital (HK) Limited | Beneficial owner | – | 126,214 | 8.33% | [Competing Interests](index=33&type=section&id=Competing%20Interests) As of June 30, 2025, no directors, supervisors, or their respective associates had any interests in businesses that compete or are likely to compete with the Group's businesses - No directors and supervisors and their respective associates had any interests in businesses that compete or are likely to compete with the Group's businesses[90](index=90&type=chunk) [Corporate Governance Practices](index=34&type=section&id=Corporate%20Governance%20Practices) The Board believes that the Company has complied with all code provisions of the Corporate Governance Code set out in Appendix C1 Part 2 of the GEM Listing Rules for the six months ended June 30, 2025 - The Company has complied with all code provisions of the Corporate Governance Code set out in Appendix C1 Part 2 of the GEM Listing Rules[92](index=92&type=chunk) [Purchase, Redemption or Sale of the Company's Listed Securities](index=34&type=section&id=Purchase%2C%20Redemption%20or%20Sale%20of%20the%20Company%27s%20Listed%20Securities) Neither the Company nor any of its subsidiaries purchased, redeemed, or sold any of the Company's listed securities during 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 during the six months ended June 30, 2025[93](index=93&type=chunk) [Code of Conduct Regarding Securities Transactions by Directors](index=34&type=section&id=Code%20of%20Conduct%20Regarding%20Securities%20Transactions%20by%20Directors) Upon enquiry, all directors have complied with the code of conduct for securities transactions adopted by the Company and the required standards of dealing set out in the GEM Listing Rules for the six months ended June 30, 2025 - All directors have complied with the code of conduct for securities transactions adopted by the Company and the required standards of dealing set out in the GEM Listing Rules[94](index=94&type=chunk) [Audit Committee](index=34&type=section&id=Audit%20Committee) The Audit Committee, comprising three independent non-executive directors with Mr Tang Xuan as chairman, convened a meeting to review and approve the content of the Group's interim results report for the six months ended June 30, 2025 - The Audit Committee comprises three independent non-executive directors, with Mr Tang Xuan as chairman[95](index=95&type=chunk) - The Audit Committee has reviewed the Group's interim results report for the six months ended June 30, 2025[95](index=95&type=chunk) [Chairman of the Board and Date](index=34&type=section&id=Chairman%20of%20the%20Board%20and%20Date) This announcement was issued by Ms Zheng Zhong, Chairman of the Board, on August 29, 2025 - The Chairman of the Board is Zheng Zhong[95](index=95&type=chunk) - The announcement date is August 29, 2025[96](index=96&type=chunk)

[Performance and Operations Summary](index=1&type=section&id=%E6%A5%AD%E7%B8%BE%E5%8F%8A%E7%87%9F%E9%81%8B%E6%91%98%E8%A6%81) The company reported a net loss attributable to owners, primarily due to non-cash items, while enhancing brand exposure and achieving significant e-commerce sales growth H1 2025 Performance Summary ('000 HKD) | Metric | Amount ('000 HKD) | | :--- | :--- | | Revenue | 604,528 | | Gross Profit | 442,309 | | Loss Attributable to Owners | 57,959 | - Loss attributable to owners was primarily impacted by non-recurring, unrealized, and non-cash items, including fair value decreases in investment properties in Mainland China and Hong Kong, impairment of other assets in Shenzhen, and impairment provisions for right-of-use assets, totaling approximately **HKD 22.1 million**[3](index=3&type=chunk) - Increased brand exposure through celebrity endorsement effectively boosted sales of the Embry Form brand[3](index=3&type=chunk) - Enhanced e-commerce platform operations led to a **7.6% year-on-year increase** in overall e-commerce sales to **HKD 236.8 million**[3](index=3&type=chunk) [Condensed Consolidated Financial Statements](index=2&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8) [Condensed Consolidated Statement of Profit or Loss](index=2&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E6%94%B6%E7%9B%8A%E8%A1%A8) For the six months ended June 30, 2025, the company reported revenue of HKD 604,528 thousand and gross profit of HKD 442,309 thousand, with a loss attributable to owners of HKD 57,959 thousand due to fair value changes in investment properties and asset impairments, resulting in a basic loss per share of 13.72 HK cents Condensed Consolidated Statement of Profit or Loss ('000 HKD) | Metric | June 30, 2025 ('000 HKD) | June 30, 2024 ('000 HKD) | Change | | :--- | :--- | :--- | :--- | | Revenue | 604,528 | 631,392 | -4.3% | | Cost of Sales | (162,219) | (153,068) | +6.0% | | Gross Profit | 442,309 | 478,324 | -7.5% | | Other Income and Gains, Net | 16,823 | 9,824 | +71.2% | | Selling and Distribution Expenses | (408,005) | (422,004) | -3.3% | | Administrative Expenses | (75,265) | (80,196) | -6.1% | | Fair Value Changes of Investment Properties | (14,349) | (43,674) | -67.2% | | Impairment of Other Assets | (5,484) | (22,065) | -75.1% | | Impairment of Right-of-Use Assets | (2,162) | (8,737) | -75.2% | | Loss Before Tax | (54,157) | (99,269) | -45.4% | | Income Tax Credit/(Expense) | (3,802) | 17,034 | N/A | | Loss for the Period Attributable to Owners of the Company | (57,959) | (82,235) | -29.5% | | Basic Loss Per Share (HK cents) | (13.72) | (19.47) | -29.5% | [Condensed Consolidated Statement of Comprehensive Income](index=3&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E5%85%A8%E9%9D%A2%E6%94%B6%E7%9B%8A%E8%A1%A8) For the six months ended June 30, 2025, the company's loss for the period was HKD 57,959 thousand, but total comprehensive income attributable to owners turned positive at HKD 4,858 thousand, significantly improving from a total comprehensive expense in the prior year, driven by exchange differences and revaluation surplus Condensed Consolidated Statement of Comprehensive Income ('000 HKD) | Metric | June 30, 2025 ('000 HKD) | June 30, 2024 ('000 HKD) | Change | | :--- | :--- | :--- | :--- | | Loss for the Period | (57,959) | (82,235) | -29.5% | | Exchange Differences Arising from Translation of Foreign Operations | 59,132 | (45,817) | N/A | | Revaluation Surplus | 4,915 | 3,341 | +47.1% | | Deferred Tax Charged to Revaluation Reserve | (1,230) | (835) | +47.3% | | Total Comprehensive Income/(Expense) for the Period Attributable to Owners of the Company | 4,858 | (125,546) | N/A | [Condensed Consolidated Statement of Financial Position](index=4&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81%E8%A1%A8) As of June 30, 2025, the Group's total assets less current liabilities amounted to HKD 2,042,574 thousand, with net assets of HKD 1,727,410 thousand, reflecting an increase in net current assets and a significant rise in cash and cash equivalents Condensed Consolidated Statement of Financial Position ('000 HKD) | Metric | June 30, 2025 ('000 HKD) | December 31, 2024 ('000 HKD) | Change | | :--- | :--- | :--- | :--- | | Total Non-Current Assets | 1,653,224 | 1,634,025 | +1.2% | | Total Current Assets | 803,303 | 731,186 | +9.9% | | Total Current Liabilities | 413,953 | 415,698 | -0.4% | | Net Current Assets | 389,350 | 315,488 | +23.4% | | Total Assets Less Current Liabilities | 2,042,574 | 1,949,513 | +4.8% | | Total Non-Current Liabilities | 315,164 | 226,961 | +38.9% | | Net Assets | 1,727,410 | 1,722,552 | +0.3% | | Cash and Cash Equivalents | 212,742 | 163,434 | +30.2% | | Trade Receivables | 61,725 | 38,015 | +62.4% | | Trade and Bills Payables | 37,025 | 39,020 | -5.1% | [Notes](index=5&type=section&id=%E9%99%84%E8%A8%BB) [Basis of Preparation](index=5&type=section&id=1.1%20%E7%B7%A8%E8%A3%BD%E5%9F%BA%E6%BA%96) The condensed consolidated financial statements are prepared in accordance with the HKEX Listing Rules and HKAS 34 "Interim Financial Reporting" and should be read in conjunction with the 2024 annual consolidated financial statements - The financial statements are prepared in accordance with the Hong Kong Listing Rules and Hong Kong Accounting Standard 34 "Interim Financial Reporting"[8](index=8&type=chunk) - The condensed consolidated financial statements are prepared on a historical cost basis, except for investment properties which are measured at fair value[9](index=9&type=chunk) [Changes in Accounting Policies and Disclosures](index=5&type=section&id=1.2%20%E6%9C%83%E8%A8%88%E6%94%BF%E7%AD%96%E8%AE%8A%E5%8B%95%E5%8F%8A%E6%8A%AB%E9%9C%B2) The revised HKAS 21 "Lack of Exchangeability" was adopted for the first time this period, with no significant impact on the prepared and presented results and financial position - The revised Hong Kong Accounting Standard 21 "Lack of Exchangeability" was adopted for the first time[10](index=10&type=chunk) - The adoption of the new standard had no significant impact on the results and financial position of past or current accounting periods[10](index=10&type=chunk) [Revenue and Segment Information](index=6&type=section&id=2.%20%E6%94%B6%E7%9B%8A%E5%8F%8A%E5%88%86%E9%83%A8%E8%B3%87%E6%96%99) For the six months ended June 30, 2025, total revenue from contracts with customers was HKD 604,528 thousand, primarily from the Mainland China market, accounting for 96.4% Revenue Analysis ('000 HKD) | Item | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Sale of Goods | 604,528 | 631,392 | Revenue by Geographical Market ('000 HKD) | Geographical Market | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Mainland China | 582,494 | 611,286 | | Hong Kong | 14,800 | 17,581 | | Others | 7,234 | 2,525 | | **Total Revenue from Contracts with Customers** | **604,528** | **631,392** | [Other Income and Gains, Net](index=6&type=section&id=3.%20%E5%85%B6%E4%BB%96%E6%94%B6%E5%85%A5%E5%8F%8A%E6%94%B6%E7%9B%8A%EF%BC%8C%E6%B7%A8%E9%A1%8D) For the six months ended June 30, 2025, other income and gains, net, amounted to HKD 16,823 thousand, a significant increase from the prior year, primarily due to a shift from exchange loss to gain Other Income and Gains, Net ('000 HKD) | Item | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Subsidy Income | 2,469 | 207 | | Gross Rental Income from Operating Leases of Investment Properties | 8,276 | 8,276 | | Bank Interest Income | 970 | 1,415 | | Exchange Differences, Net | 2,503 | (4,698) | | **Total** | **16,823** | **9,824** | [Other Expenses](index=7&type=section&id=4.%20%E5%85%B6%E4%BB%96%E9%96%8B%E6%94%AF) For the six months ended June 30, 2025, total other expenses amounted to HKD 486 thousand, primarily severance payments, representing a significant decrease from the prior year Other Expenses ('000 HKD) | Item | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Loss on Disposal/Write-off of Property, Plant and Equipment Items, Net | - | 16 | | Severance Payments | 486 | 1,479 | | **Total** | **486** | **1,495** | [Finance Costs](index=7&type=section&id=5.%20%E8%9E%8D%E8%B3%87%E6%88%90%E6%9C%AC) For the six months ended June 30, 2025, total finance costs were HKD 7,538 thousand, mainly comprising interest on interest-bearing bank borrowings and lease liabilities, showing a decrease from the prior year Finance Costs ('000 HKD) | Item | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Interest on Interest-Bearing Bank Borrowings | 6,547 | 8,028 | | Interest on Lease Liabilities | 991 | 1,218 | | **Total** | **7,538** | **9,246** | [Loss Before Tax](index=7&type=section&id=6.%20%E9%99%A4%E7%A8%85%E5%89%8D%E虧%E6%90%8D) The Group's loss before tax has been reduced by various expenses, including cost of inventories sold, depreciation of fixed assets, depreciation of right-of-use assets, lease payments, advertising and counter decoration expenses, and impairment of right-of-use assets Loss Before Tax Deductions ('000 HKD) | Item | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Cost of Inventories Sold | 162,219 | 153,068 | | Depreciation of Fixed Assets | 18,889 | 26,398 | | Depreciation of Right-of-Use Assets | 14,682 | 18,027 | | Lease Payments Not Included in Lease Liabilities | 103,126 | 112,897 | | Advertising and Counter Decoration Expenses | 81,774 | 68,875 | | Impairment of Right-of-Use Assets | 2,162 | 8,737 | [Income Tax](index=8&type=section&id=7.%20%E6%89%80%E5%BE%97%E7%A8%85) For the six months ended June 30, 2025, the Group recorded an income tax expense of HKD 3,802 thousand, compared to an income tax credit of HKD 17,034 thousand in the prior year, primarily due to changes in deferred tax Income Tax ('000 HKD) | Item | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Current Tax – Mainland China | - | - | | Deferred Tax Expense/(Credit) | 3,802 | (17,034) | | **Total Tax Expense/(Credit) for the Period** | **3,802** | **(17,034)** | [Loss Per Share Attributable to Owners of the Company](index=8&type=section&id=8.%20%E6%9C%AC%E5%85%AC%E5%8F%B8%E6%93%81%E6%9C%89%E4%BA%BA%E6%87%89%E4%BD%B5%E6%AF%8F%E8%82%A1%E虧%E6%90%8D) For the six months ended June 30, 2025, the basic loss per share attributable to owners of the company narrowed to 13.72 HK cents from 19.47 HK cents in the prior year, with share options having an anti-dilutive effect and thus not adjusting the total basic loss per share Loss Per Share Calculation ('000 HKD) | Item | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Loss for the Purpose of Calculating Basic Earnings Per Share | (57,959) | (82,235) | | Number of Ordinary Shares Outstanding During the Year | 422,416,638 | 422,416,638 | | Basic Loss Per Share (HK cents) | (13.72) | (19.47) | - Share options had an anti-dilutive effect, thus not adjusting the total basic loss per share[18](index=18&type=chunk) [Property, Plant and Equipment](index=8&type=section&id=9.%20%E7%89%A9%E6%A5%AD%E3%80%81%E5%BB%A0%E6%88%BF%E5%8F%8A%E8%A8%AD%E5%82%99) As of June 30, 2025, the net book value of property, plant and equipment was HKD 615,902 thousand, with additions of HKD 3,497 thousand and depreciation provision of HKD 18,889 thousand during the period Property, Plant and Equipment Net Book Value Movement ('000 HKD) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Book Value at Beginning of Period/Year | 617,954 | 814,841 | | Additions | 3,497 | 8,325 | | Depreciation Provision for the Period/Year | (18,889) | (51,672) | | Exchange Adjustments | 23,447 | (24,678) | | **Book Value at End of Period/Year** | **615,902** | **617,954** | [Trade Receivables](index=9&type=section&id=10.%20%E6%87%89%E6%94%B6%E8%B2%BF%E6%98%93%E8%B3%AC%E6%AC%BE) As of June 30, 2025, the Group's total trade receivables amounted to HKD 65,651 thousand, with the majority due within 90 days, and an impairment provision of HKD 3,926 thousand Trade Receivables Ageing Analysis ('000 HKD) | Ageing | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Within 90 Days | 59,288 | 35,021 | | 91 to 180 Days | 2,176 | 2,733 | | 181 to 360 Days | 981 | 1,640 | | Over 360 Days | 3,206 | 3,471 | | **Total** | **65,651** | **42,865** | | Less: Impairment Provision | (3,926) | (4,850) | | **Net** | **61,725** | **38,015** | [Trade and Bills Payables](index=9&type=section&id=11.%20%E6%87%89%E4%BB%98%E8%B2%BF%E6%98%93%E8%B3%AC%E6%AC%BE%E5%8F%8A%E6%87%89%E4%BB%98%E7%A5%A8%E6%93%9A) As of June 30, 2025, the Group's total trade and bills payables amounted to HKD 37,025 thousand, with the highest proportion due within 90 days Trade and Bills Payables Ageing Analysis ('000 HKD) | Ageing | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Within 90 Days | 33,545 | 35,218 | | 91 to 180 Days | 1,098 | 1,736 | | 181 to 360 Days | 806 | 814 | | Over 360 Days | 1,576 | 1,252 | | **Total** | **37,025** | **39,020** | [Commitments](index=9&type=section&id=12.%20%E6%89%BF%E6%93%94) As of June 30, 2025, the Group's contracted commitments for the acquisition of property, plant and equipment amounted to HKD 106,450 thousand, an increase from the end of 2024 Commitments ('000 HKD) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Contracted Commitments for Acquisition of Property, Plant and Equipment | 106,450 | 102,346 | [Management Discussion and Analysis](index=10&type=section&id=%E7%AE%A1%E7%90%86%E5%B1%A4%E8%A8%8E%E8%AB%96%E5%8F%8A%E5%88%86%E6%9E%90) [Business and Operations Review](index=10&type=section&id=%E6%A5%AD%E5%8B%99%E5%8F%8A%E7%87%9F%E9%81%8B%E5%9B%9E%E9%A1%A7) In H1 2025, facing a complex international environment and challenges in the Chinese economy, the Group responded to market changes and improved operational efficiency through a multi-brand strategy, strengthened e-commerce operations, optimized sales networks, increased product R&D, and green production [Macroeconomic Environment](index=10&type=section&id=%E5%AE%8F%E8%A7%80%E7%B6%93%E6%BF%9F%E7%92%B0%E5%A2%83) In H1 2025, global economic recovery was weak, and while China's GDP grew by 5.3% year-on-year, domestic demand remained soft, with an uneven recovery in the consumer market, and the intimate apparel retail environment remained challenging - In H1 2025, China's GDP grew by **5.3% year-on-year**, but domestic demand was weak, and consumer market recovery was uneven[22](index=22&type=chunk) - Total retail sales of consumer goods increased by **5.0% year-on-year**, with clothing, footwear, headwear, and knitwear categories growing by only **3.1%**, indicating a challenging retail operating environment for intimate apparel[22](index=22&type=chunk) [Brand Management](index=10&type=section&id=%E5%93%81%E7%89%8C%E7%AE%A1%E7%90%86) Leveraging a multi-brand strategy, the Group adjusted marketing for seven brands, consolidating its flagship brand Embry Form, and effectively enhanced brand exposure and e-commerce sales through celebrity endorsement and optimized social media operations, achieving a 7.6% year-on-year increase in e-commerce channel sales, while actively promoting green development initiatives - Implemented a multi-brand strategy, managing seven brands including Embry Form and Fandecie, to consolidate the flagship brand Embry Form[24](index=24&type=chunk) - Collaborated with celebrity endorser Song Yi, strengthened social media operations, and expanded diverse online content platforms, effectively enhancing brand exposure and traffic[24](index=24&type=chunk) - E-commerce channel sales increased by **7.6% year-on-year**, accounting for **39% of the Group's total revenue**, with content-driven e-commerce models (e.g., Douyin, WeChat Channels live streaming) contributing significantly[25](index=25&type=chunk) - Actively practiced green development concepts, launched environmental protection month activities and "Old Clothes for New" projects, reinforcing the image of "the preferred brand for green, healthy, high-quality intimate apparel"[25](index=25&type=chunk) [Sales Network](index=11&type=section&id=%E9%8A%B7%E5%94%AE%E7%B6%B2%E7%B5%B1) To counter weak physical retail consumption, the Group strategically closed offline stores, reducing net retail points by 50 to 761, while expanding online sales and synchronizing online and offline product information to optimize inventory allocation and management - Strategically closed offline stores, resulting in a net reduction of **50 retail points** to **761** (629 counters, 132 specialty stores)[26](index=26&type=chunk) - Intensified efforts to expand the online shopping market and implemented online mirror stores with synchronized product information with offline stores, optimizing inventory allocation and management[26](index=26&type=chunk) [Product Design and Research & Development](index=11&type=section&id=%E7%94%A2%E5%93%81%E8%A8%AD%E8%A8%88%E5%8F%8A%E7%A0%94%E7%99%BC) The Group continuously upgrades product design, uses green and environmentally friendly materials, and increases online product development to tap into the youth market, launching several new product series and securing 11 new patents in China, including three invention patents, bringing the total to 145 patents - Adhered to excellent product quality and comfortable wearing experience, using green, environmentally friendly, and pollution-free raw materials[27](index=27&type=chunk) - Increased online product development, optimizing product diversity, adaptability, and cost-effectiveness, launching several popular new product series[28](index=28&type=chunk) - During the period, **3 invention patents**, **6 utility model patents**, and **2 design patents** were granted in China, bringing the total to **145 patents** as of June 30, 2025[29](index=29&type=chunk) - Launched a new product series, "Fengchao Cup," using bio-based environmentally friendly materials and 3D large-hole honeycomb structure, embodying green and low-carbon principles[28](index=28&type=chunk) [Production Capacity](index=12&type=section&id=%E7%94%A2%E8%83%BD%E5%8A%9B) The Group operates production bases in Shandong and Jiangsu, equipped with intelligent finished goods and material warehouses, and adjusts supply flexibly through supply chain resources, with the Shandong Industrial Park utilizing geothermal heat pumps and other technologies for eco-friendly, low-carbon production, and independently developing automatic underwear packaging machines using biodegradable plastics - Established production bases in Shandong and Jiangsu, equipped with intelligent finished goods and material warehouses, flexibly adjusting supply[30](index=30&type=chunk) - The Shandong Industrial Park utilizes geothermal heat pumps and other technologies for eco-friendly, low-carbon production, and independently developed automatic underwear packaging machines using biodegradable plastics[30](index=30&type=chunk) [Human Resources](index=13&type=section&id=%E4%BA%BA%E5%8A%9B%E8%B3%87%E6%BA%90) The Group prioritizes employee training and welfare, reviews internal management culture to enhance belonging, and improves production technology with automated logistics systems to boost efficiency, with 3,865 employees and total staff costs of HKD 202,923 thousand as of June 30, 2025 - Prioritized employee training, welfare, and internal management culture to enhance employee belonging[31](index=31&type=chunk) - Improved production technology, coupled with automated logistics systems, to enhance production efficiency and alleviate cost pressures[31](index=31&type=chunk) Human Resources Data | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Number of Employees | 3,865 | 3,949 | | Total Staff Costs ('000 HKD) | 202,923 | 210,021 | [Financial Position Review](index=14&type=section&id=%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81%E5%9B%9E%E9%A1%A7) In H1 2025, the Group's revenue decreased by 4.3%, and gross profit margin fell to 73.2%, yet losses narrowed, driven by significant e-commerce sales growth, reduced operating expenses, and a substantial decrease in investment property impairment, maintaining robust liquidity despite an increased gearing ratio [Revenue](index=14&type=section&id=%E6%94%B6%E7%9B%8A) During the period, turnover was HKD 604,528 thousand, a 4.3% year-on-year decrease, with e-commerce platform sales growing 7.6% to HKD 236,828 thousand, accounting for 39.2% of total revenue, and flagship brand Embry Form contributing 64.7% of total revenue with a 1.5% increase, while women's intimate apparel remained the core product line, representing 83.7% of revenue Revenue Overview ('000 HKD) | Metric | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | | Total Turnover | 604,528 | 631,392 | -4.3% | | E-commerce Platform Sales | 236,828 | N/A | +7.6% | | Retail Turnover | 346,363 | N/A | -11.9% | | Mainland China Market Turnover | 582,494 | N/A | -3.2% (Fixed Exchange Rate) | - E-commerce sales increased from **34.9%** of total revenue in the prior year to **39.2%**[32](index=32&type=chunk) Revenue by Brand ('000 HKD) | Brand | H1 2025 | Proportion | Change | | :--- | :--- | :--- | :--- | | Embry Form | 391,105 | 64.7% | +1.5% | | Other Brands | 206,189 | 34.1% | N/A | Revenue by Product Line ('000 HKD) | Product Line | H1 2025 | Proportion | | :--- | :--- | :--- | | Intimate Apparel | 505,936 | 83.7% | | Sleepwear | 72,568 | 12.0% | | Swimwear | 9,020 | 1.5% | [Gross Profit](index=14&type=section&id=%E6%AF%9B%E5%88%A9) During the period, gross profit was approximately HKD 442,309 thousand, a 7.5% year-on-year decrease, with the overall gross profit margin falling by 2.6 percentage points to 73.2%, primarily due to increased promotional efforts and higher discount rates Gross Profit Overview ('000 HKD) | Metric | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | | Gross Profit | 442,309 | 478,324 | -7.5% | | Gross Profit Margin | 73.2% | 75.8% | -2.6 percentage points | - The decrease in gross profit margin was mainly due to the Group's increased promotional efforts and higher discount rates to drive sales volume and stabilize overall turnover[34](index=34&type=chunk) [Operating Expenses](index=15&type=section&id=%E7%B6%93%E7%87%9F%E9%96%8B%E6%94%AF) Selling and distribution expenses decreased by 3.3% year-on-year to HKD 408,005 thousand, primarily due to reduced rent and staff wages from fewer stores, while administrative expenses decreased by 6.1% year-on-year to HKD 75,265 thousand Operating Expenses ('000 HKD) | Metric | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | | Selling and Distribution Expenses | 408,005 | 422,004 | -3.3% | | As % of Revenue | 67.5% | 66.8% | +0.7 percentage points | | Administrative Expenses | 75,265 | 80,196 | -6.1% | | As % of Revenue | 12.5% | 12.7% | -0.2 percentage points | - The decrease in selling and distribution expenses was mainly due to a reduction in the number of counters and specialty stores, leading to lower related rental expenses and sales staff wages[35](index=35&type=chunk) - The Group continued to invest resources in sales and marketing, including hiring endorsers and coordinating promotional activities, to enhance brand awareness and drive future sales[35](index=35&type=chunk) [Fair Value Changes of Investment Properties and Impairment of Other Assets](index=15&type=section&id=%E6%8A%95%E8%B3%87%E7%89%A9%E6%A5%AD%E5%85%AC%E5%B9%B3%E5%80%BC%E8%AE%8A%E5%8B%95%E5%8F%8A%E5%85%B6%E4%BB%96%E8%B3%87%E7%94%A2%E6%B8%9B%E5%80%BC) During the period, the fair value of investment properties decreased by approximately HKD 14,349 thousand, and other asset impairments amounted to approximately HKD 5,484 thousand, both significantly lower than the prior year, reflecting a subdued property market but alleviated impairment pressure Fair Value Changes of Investment Properties and Impairment of Other Assets ('000 HKD) | Metric | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | | Decrease in Fair Value of Investment Properties | 14,349 | 43,674 | -67.2% | | Impairment of Other Assets | 5,484 | 22,065 | -75.1% | - The reduction in impairment was mainly due to the continued subdued property market in Mainland China and Hong Kong, but the magnitude of impairment narrowed[36](index=36&type=chunk) [Impairment of Right-of-Use Assets and Other Expenses](index=15&type=section&id=%E4%BD%BF%E7%94%A8%E6%AC%8A%E8%B3%87%E7%94%A2%E6%B8%9B%E5%80%BC%E5%8F%8A%E5%85%B6%E4%BB%96%E9%96%8B%E6%94%AF) The Group made an impairment provision of approximately HKD 2,162 thousand for right-of-use assets related to specialty stores and counters, with other expenses totaling HKD 486 thousand, both significantly lower than the prior year Impairment of Right-of-Use Assets and Other Expenses ('000 HKD) | Metric | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | | Impairment Provision for Right-of-Use Assets | 2,162 | 8,737 | -75.2% | | Other Expenses | 486 | 1,495 | -67.5% | [Income Tax](index=15&type=section&id=%E6%89%80%E5%BE%97%E7%A8%85) During the period, income tax expense was approximately HKD 3,802 thousand, compared to an income tax credit of HKD 17,034 thousand in the prior year Income Tax ('000 HKD) | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Income Tax Expense/(Credit) | 3,802 | (17,034) | [Loss](index=15&type=section&id=%E虧%E6%90%8D) The loss attributable to owners of the company was HKD 57,959 thousand, a reduction from HKD 82,235 thousand in the prior year, primarily due to operating losses, fair value changes in investment properties, and impairment of other assets Loss Attributable to Owners of the Company ('000 HKD) | Metric | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | | Loss Attributable to Owners | 57,959 | 82,235 | -29.5% | - The narrowing of loss was mainly attributable to operating losses, fair value changes of investment properties, and impairment of other assets[39](index=39&type=chunk) [Liquidity and Financial Resources](index=15&type=section&id=%E6%B5%81%E5%8B%95%E8%B3%87%E9%87%91%E5%8F%8A%E8%B2%A1%E5%8B%99%E8%B3%87%E6%BA%90) The Group maintained a robust financial position, with cash and cash equivalents increasing to HKD 212,742 thousand, while interest-bearing bank borrowings rose to HKD 402,561 thousand, leading to an increased gearing ratio of 23.3% Liquidity and Financial Resources ('000 HKD) | Metric | June 30, 2025 | December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Cash and Cash Equivalents | 212,742 | 163,434 | +30.2% | | Interest-Bearing Bank Borrowings | 402,561 | 323,253 | +24.5% | | Equity Attributable to Owners of the Company | 1,727,410 | 1,722,552 | +0.3% | | Gearing Ratio | 23.3% | 18.8% | +4.5 percentage points | [Capital Expenditure](index=16&type=section&id=%E8%B3%87%E6%9C%AC%E9%96%8B%E6%94%AF) Capital expenditure for the period amounted to HKD 3,497 thousand, primarily for vehicles and computer software, with capital expenditure commitments totaling HKD 106,450 thousand as of June 30, 2025 Capital Expenditure and Commitments ('000 HKD) | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Capital Expenditure | 3,497 | 5,615 | | Capital Expenditure Commitments (Period-end) | 106,450 | 102,346 (December 31, 2024) | - Capital expenditure was primarily for vehicles and computer software[41](index=41&type=chunk) [Pledges of the Group's Assets](index=16&type=section&id=%E6%9C%AC%E9%9B%86%E5%9C%98%E7%9A%84%E8%B3%87%E7%94%A2%E6%8A%B5%E6%8A%BC) As of June 30, 2025, the Group pledged investment properties, buildings, and right-of-use assets in Hong Kong and Changzhou, as well as buildings in Shenzhen, to banks for financing loans, with a total net book value of approximately HKD 429,975 thousand - Investment properties, buildings, and right-of-use assets in Hong Kong and Changzhou (net book values of **HKD 227,874 thousand**, **HKD 186,546 thousand**, and **HKD 14,325 thousand** respectively) were pledged to banks[42](index=42&type=chunk) - Buildings in Shenzhen (net book value of **HKD 1,234 thousand**) were pledged to banks[42](index=42&type=chunk) [Capital Structure](index=16&type=section&id=%E8%B3%87%E6%9C%AC%E7%B5%90%E6%A7%8B) As of June 30, 2025, the company's total issued share capital was HKD 4,224 thousand, comprising 422,416,638 ordinary shares with a par value of HKD 0.01 each, consistent with the end of 2024 Capital Structure ('000 HKD) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Issued Share Capital | 4,224 | 4,224 | | Number of Ordinary Shares | 422,416,638 | 422,416,638 | [Material Investments, Acquisitions and Disposals of Subsidiaries and Associates](index=16&type=section&id=%E6%89%80%E6%8C%81%E9%87%8D%E5%A4%A7%E6%8A%95%E8%B3%87%E3%80%81%E9%87%8D%E5%A4%A7%E6%94%B6%E8%B3%BC%E5%8F%8A%E5%87%BA%E5%94%AE%E9%99%84%E5%B1%AC%E5%85%AC%E5%8F%B8%E5%8F%8A%E9%97%9C%E8%81%AF%E5%85%AC%E5%8F%B8) During the period, the Group held no material investments and made no material acquisitions or disposals of subsidiaries and associates - No material investments, acquisitions, or disposals of subsidiaries and associates occurred during the period[44](index=44&type=chunk) [Foreign Exchange Risk](index=16&type=section&id=%E5%A4%96%E5%8C%AF%E9%A2%A8%E9%9A%AA) The Group primarily conducts trading transactions in Hong Kong Dollars and Renminbi and does not use derivative financial instruments to hedge against foreign exchange fluctuation risks - Primarily conducts trading transactions in Hong Kong Dollars and Renminbi[45](index=45&type=chunk) - Does not use derivative financial instruments to hedge against foreign exchange fluctuation risks[45](index=45&type=chunk) [Contingent Liabilities](index=16&type=section&id=%E6%88%96%E7%84%B6%E8%B2%A0%E5%82%B5) As of June 30, 2025, the Group provided bank guarantees of HKD 646 thousand for property leases and utility deposits, with no other significant contingent liabilities or litigation Contingent Liabilities ('000 HKD) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Bank Guarantees (Property Leases and Utility Deposits) | 646 | 646 | - Aside from bank guarantees, there are no other significant contingent liabilities or litigation[46](index=46&type=chunk) [Outlook](index=17&type=section&id=%E5%89%8D%E6%99%AF) Looking ahead to the second half, while global economic recovery remains weak and the Chinese economy faces internal and external pressures, it is expected to continue its recovery trajectory, with the intimate apparel industry facing intense competition and consumers seeking quality and value, prompting the Group to deepen online product development, enhance product adaptability, strengthen collaboration with low-carbon suppliers, and fully launch eco-friendly products, while optimizing business strategies to seize e-commerce growth opportunities, reinforce social media and e-commerce platform operations, consolidate online retail advantages, and continue celebrity endorsement strategies, alongside flexible capacity and supply chain resource allocation, utilizing intelligent warehousing and logistics to improve supply efficiency and delivery speed, and promoting energy conservation and emission reduction - Looking ahead to the second half, global economic recovery momentum is weak, and the Chinese economy faces internal and external pressures, but is expected to continue its recovery trend[47](index=47&type=chunk) - The intimate apparel industry faces fierce competition, with expected performance lagging the overall consumer market as consumers become more rational, seeking products that combine quality and value[47](index=47&type=chunk) - The Group will continue to deepen online product development, enhance product adaptability, strengthen cooperation with low-carbon suppliers, and fully launch eco-friendly products[47](index=47&type=chunk) - Future plans include optimizing business strategies, seizing e-commerce growth opportunities, strengthening social media and e-commerce platform operations, consolidating online retail advantages, and continuing celebrity endorsement strategies[48](index=48&type=chunk) - In terms of production, the Group will flexibly allocate production capacity and supply chain resources, utilize intelligent warehousing and logistics to improve supply efficiency and delivery speed, and promote energy conservation and emission reduction[48](index=48&type=chunk) [Other Information](index=18&type=section&id=%E5%85%B6%E4%BB%96%E8%B3%87%E6%96%99) [Review of Interim Financial Information](index=18&type=section&id=%E5%AF%A9%E9%96%B1%E4%B8%AD%E6%9C%9F%E8%B2%A1%E5%8B%99%E8%B3%87%E6%96%99) The Audit Committee has reviewed the Group's adopted accounting principles, interim financial statements, risk management, internal controls, and financial reporting matters, and the external auditor has reviewed the condensed consolidated financial statements in accordance with Hong Kong Standard on Review Engagements 2410 - The Audit Committee has reviewed accounting principles, interim financial statements, risk management, internal controls, and financial reporting matters[49](index=49&type=chunk) - The external auditor has reviewed the condensed consolidated financial statements in accordance with Hong Kong Standard on Review Engagements 2410[49](index=49&type=chunk) [Interim Dividend](index=18&type=section&id=%E4%B8%AD%E6%9C%9F%E8%82%A1%E6%81%AF) The Board of Directors resolved on August 29, 2025, not to declare an interim dividend for the six months ended June 30, 2025, to conserve cash and maintain the Group's long-term financial strength - The Board of Directors resolved not to declare an interim dividend for the six months ended June 30, 2025[50](index=50&type=chunk) - No dividend is declared to conserve cash and maintain the Group's long-term financial strength[23](index=23&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=18&type=section&id=%E8%B3%BC%E8%B2%B7%E3%80%81%E5%87%BA%E5%94%AE%E6%88%96%E8%B4%96%E5%9B%9E%E6%9C%AC%E5%85%AC%E5%8F%B8%E7%9A%84%E4%B8%8A%E5%B8%82%E8%AD%89%E5%88%B8) 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 company held no treasury shares - No purchase, sale, or redemption of any of the company's listed securities occurred during the period[51](index=51&type=chunk) - As of June 30, 2025, the company held no treasury shares[52](index=52&type=chunk) [Compliance with Corporate Governance Code](index=18&type=section&id=%E9%81%B5%E5%AE%88%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB%E5%AE%88%E5%89%87) The Directors believe that the company has complied with all applicable code provisions of the Corporate Governance Code as set out in Appendix C1 of the Listing Rules during the period - The company has complied with all applicable code provisions of the Corporate Governance Code as set out in Appendix C1 of the Listing Rules[53](index=53&type=chunk) [Standard Code for Securities Transactions](index=18&type=section&id=%E9%80%B2%E8%A1%8C%E8%AD%89%E5%88%B8%E4%BA%A4%E6%98%93%E7%9A%84%E6%A8%99%E6%BA%96%E5%AE%88%E5%89%87) The company has adopted a code of conduct for securities transactions by Directors and employees consistent with Appendix C3 of the Listing Rules, and all Directors and senior management have confirmed compliance with this code - The company has adopted a code of conduct for securities transactions by Directors and employees consistent with Appendix C3 of the Listing Rules[54](index=54&type=chunk) - All Directors and senior management have confirmed compliance with the code for securities transactions[54](index=54&type=chunk) [Publication of 2025 Interim Results Announcement and Interim Report](index=18&type=section&id=%E5%88%8A%E7%99%BC%E4%BA%8C%E9%9B%B6%E4%BA%8C%E4%BA%94%E5%B9%B4%E4%B8%AD%E6%9C%9F%E6%A5%AD%E7%B8%BE%E5%85%AC%E5%91%8A%E5%8F%8A%E4%B8%AD%E6%9C%9F%E5%A0%B1%E5%91%8A) This results announcement has been published on the websites of Hong Kong Exchanges and Clearing Limited and the company, and the 2025 interim report containing all information required by the Listing Rules will be published in due course - The results announcement has been published on the websites of Hong Kong Exchanges and the company[54](index=54&type=chunk) - The 2025 interim report will be published on the aforementioned websites in due course[54](index=54&type=chunk)