[Interim Results Summary](index=1&type=section&id=Interim%20Results%20Summary) The group reported a **45% decrease in revenue** to RMB 33.19 million, a **101% increase in gross profit** to RMB 0.87 million, and a **96% reduction in loss for the period** to RMB 13.43 million | Indicator | 2025 (RMB million) | 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 33.19 | 60.71 | (45%) | | Gross Profit / (Loss) | 0.87 | (63.78) | 101% | | Loss Before Tax | (13.40) | (332.42) | (96%) | | Loss for the Period | (13.43) | (312.01) | (96%) | | Basic Loss Per Share (RMB cents) | (0.90) | (21.29) | (96%) | [Condensed Consolidated Financial Statements](index=2&type=section&id=Condensed%20Consolidated%20Financial%20Statements) The condensed consolidated financial statements present the group's financial performance and position, highlighting a significant reduction in loss for the period and persistent net current liabilities [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=2&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For the six months ended June 30, 2025, the group's revenue decreased by 45% to RMB 33.19 million, gross profit turned positive, and loss for the period significantly narrowed by 96% due to reduced finance costs and impairment losses | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Total Revenue | 33,193 | 60,712 | | Cost of Sales | (32,325) | (124,493) | | Gross Profit / (Loss) | 868 | (63,781) | | Other Income | 33 | 274 | | Net Other Gains and Losses | 3,220 | (6,279) | | Selling and Distribution Expenses | (652) | (2,760) | | Administrative Expenses | (7,180) | (18,271) | | Impairment Losses | – | (51,889) | | Finance Costs | (9,384) | (185,365) | | Loss Before Tax | (13,397) | (332,421) | | Loss for the Period | (13,432) | (312,012) | | Total Comprehensive Expense for the Period | (6,746) | (317,200) | | Basic Loss Per Share (RMB cents) | (0.90) | (21.29) | [Condensed Consolidated Statement of Financial Position](index=4&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the group reported total non-current assets of RMB 18.05 million, total current assets of RMB 3,514.48 million, net current liabilities of RMB 1,824.20 million, and a total deficit of RMB 1,813.48 million, indicating ongoing financial pressure | Indicator | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | **Assets** | | | | Non-current Assets | 18,051 | 18,356 | | Current Assets | 3,514,484 | 3,494,570 | | **Liabilities** | | | | Current Liabilities | 5,338,679 | 5,312,324 | | Non-current Liabilities | 7,336 | 7,336 | | **Equity** | | | | Net Current Liabilities | (1,824,195) | (1,817,754) | | Total Assets Less Current Liabilities | (1,806,144) | (1,799,398) | | Deficit Attributable to Owners of the Company | (1,879,337) | (1,873,297) | | Total Deficit | (1,813,480) | (1,806,734) | [Notes to the Condensed Consolidated Financial Information](index=6&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Information) These notes provide detailed explanations of the group's accounting policies, financial performance, and position, including segment information, impairment losses, and ongoing litigation [1. Basis of Preparation](index=6&type=section&id=1.%20Basis%20of%20Preparation) The condensed consolidated interim financial information is prepared in accordance with HKAS 34, with management addressing ongoing concern issues such as losses, net current liabilities, and loan defaults - The condensed consolidated interim financial information is prepared in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting"[10](index=10&type=chunk) - The group recorded a net loss of approximately **RMB 13.4 million** for the period, a total deficit attributable to owners of the Company of approximately **RMB 1.8793 billion**, and net current liabilities exceeding current assets by approximately **RMB 1.8242 billion**[11](index=11&type=chunk) - The group was unable to repay borrowings totaling approximately **RMB 151.5 million** and related accrued interest of approximately **RMB 37.1 million** by their scheduled repayment dates, resulting in approximately **RMB 188.6 million** of defaulted borrowings becoming immediately repayable[11](index=11&type=chunk) - Management has formulated plans and measures to improve liquidity and financial position, including generating operating cash flows from new business opportunities, negotiating new or renewed loans with lenders, and controlling administrative costs[12](index=12&type=chunk) [2. Significant Accounting Policies](index=7&type=section&id=2.%20Significant%20Accounting%20Policies) The condensed consolidated financial information is prepared on a historical cost basis, with investment properties and certain financial assets measured at fair value, and recent HKFRS amendments having no material impact - The condensed consolidated financial information is prepared on a historical cost basis, except for investment properties and certain financial assets measured at fair value through other comprehensive income[13](index=13&type=chunk) - The application of amendments to Hong Kong Financial Reporting Standards, including HKAS 21 (Amendment) The Effects of Changes in Foreign Exchange Rates – Lack of Exchangeability, had no material impact on the group's financial position and performance during the interim period[14](index=14&type=chunk) [3. Revenue](index=7&type=section&id=3.%20Revenue) Total revenue for the period decreased by 45% to RMB 33.19 million, primarily due to a significant reduction in property sales, partially offset by new supply chain business revenue of RMB 30 million | Revenue Source | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Sales of Completed Properties | 3,024 | 60,295 | | Sales of Goods | 30,000 | – | | Rental Income | 169 | 417 | | **Total Revenue** | **33,193** | **60,712** | - The new supply chain business contributed **RMB 30,000 thousand** in revenue during the period[17](index=17&type=chunk) - All revenue from customer contracts is recognized at a point in time and entirely derived from the China market[16](index=16&type=chunk) [4. Segment Information](index=9&type=section&id=4.%20Segment%20Information) The group operates in property development, property investment, and supply chain segments, with property development revenue significantly declining while the new supply chain business contributes to revenue | Segment | 2025 Revenue (RMB thousand) | 2024 Revenue (RMB thousand) | | :--- | :--- | :--- | | Property Development | 3,024 | 60,295 | | Property Investment | 169 | 417 | | Supply Chain Business | 30,000 | – | | **Total Segments** | **33,193** | **60,712** | | Segment | 2025 Profit / (Loss) (RMB thousand) | 2024 Loss (RMB thousand) | | :--- | :--- | :--- | | Property Development | (2,277) | (76,100) | | Property Investment | 129 | (5,035) | | Supply Chain Business | 141 | – | | **Total Segments** | **(2,007)** | **(81,135)** | | Segment Assets | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Property Development | 1,008,939 | 1,011,323 | | Property Investment | 7,119 | 7,113 | | Supply Chain Business | 30,000 | – | | **Total Segments** | **1,046,058** | **1,018,436** | | Unallocated | 2,486,477 | 2,494,490 | | **Total Consolidated Assets** | **3,532,535** | **3,512,926** | | Segment Liabilities | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Property Development | 1,229,251 | 1,231,563 | | Property Investment | 167 | 167 | | Supply Chain Business | 29,894 | – | | **Total Segments** | **1,259,312** | **1,231,730** | | Unallocated | 4,086,703 | 4,087,930 | | **Total Consolidated Liabilities** | **5,346,015** | **5,319,660** | [5. Impairment Losses](index=11&type=section&id=5.%20Impairment%20Losses) No impairment losses were recognized in the current period, a significant improvement compared to the RMB 51.89 million impairment losses recorded in the prior period related to former subsidiaries and non-controlling interests | Source of Impairment Losses | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Amounts Due from a Former Subsidiary | – | 31,489 | | Amounts Due from Non-controlling Interests | – | 20,400 | | **Total** | **–** | **51,889** | [6. Other Income, Gains and Losses](index=12&type=section&id=6.%20Other%20Income%2C%20Gains%20and%20Losses) Other income for the period was RMB 33 thousand, and net other gains and losses were RMB 3,220 thousand, primarily driven by net exchange gains, contrasting with prior period exchange losses | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | **Other Income** | | | | Rental Income from Short-term Leases of Completed Properties Held for Sale | – | 116 | | Bank Interest Income | 7 | 108 | | Others | 26 | 50 | | **Subtotal** | **33** | **274** | | **Net Other Gains and Losses** | | | | Gain on Disposal of Property, Plant and Equipment | – | 14 | | Net Exchange Gains / (Losses) | 3,220 | (6,293) | | **Subtotal** | **3,220** | **(6,279)** | [7. Finance Costs](index=12&type=section&id=7.%20Finance%20Costs) Finance costs significantly decreased by approximately 95% to RMB 9,384 thousand, primarily due to a substantial reduction in interest on bank and other borrowings | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Interest on Bank and Other Borrowings | 9,384 | 180,798 | | Interest on Contract Liabilities | – | 4,567 | | **Total** | **9,384** | **185,365** | [8. Income Tax (Expense) / Credit](index=13&type=section&id=8.%20Income%20Tax%20%28Expense%29%20%2F%20Credit) The group recorded an income tax expense of RMB 35 thousand for the period, compared to an income tax credit of RMB 20,409 thousand in the prior period, mainly due to the reversal of an over-provision for land appreciation tax | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Current Tax Expense / (Credit) | | | | China Corporate Income Tax | 35 | 2,497 | | Land Appreciation Tax | – | (22,821) | | **Subtotal** | **35** | **(20,324)** | | Deferred Tax Credit | – | (85) | | **Total** | **35** | **(20,409)** | - The prior year's income tax credit was primarily due to the recognition of an over-provision for land appreciation tax from the previous year[24](index=24&type=chunk) [9. Loss for the Period](index=14&type=section&id=9.%20Loss%20for%20the%20Period) The loss for the period is calculated after deducting costs of properties sold, cost of goods sold, and staff costs, with no impairment losses on properties under development or held for sale in the current period | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Cost of Properties Held for Sale Included in Cost of Sales | 2,605 | 124,471 | | Cost of Goods Sold Included in Cost of Sales | 29,700 | – | | Impairment Losses on Properties Under Development / Held for Sale Included in Cost of Sales | – | 58,425 | | Depreciation of Property, Plant and Equipment | 4 | 997 | | Total Staff Costs | 3,080 | 7,981 | [10. Dividends](index=14&type=section&id=10.%20Dividends) No dividends were paid or proposed to the company's shareholders for the six months ended June 30, 2025, or 2024 - No dividends were paid or proposed to the Company's shareholders for the six months ended June 30, 2025 and 2024[26](index=26&type=chunk) [11. Loss Per Share](index=15&type=section&id=11.%20Loss%20Per%20Share) Basic and diluted loss per share attributable to owners of the company significantly narrowed to RMB 0.90 cents for the six months ended June 30, 2025, from RMB 21.29 cents in the prior period | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Loss for the Period Attributable to Owners of the Company | (12,726) | (302,399) | | Basic Loss Per Share (RMB cents) | (0.90) | (21.29) | | Diluted Loss Per Share (RMB cents) | (0.90) | (21.29) | - Diluted loss per share is equal to basic loss per share as there were no dilutive potential ordinary shares outstanding during the period[30](index=30&type=chunk) [12. Investment Properties](index=15&type=section&id=12.%20Investment%20Properties) The group's investment properties, located in China, are measured using the fair value model and maintained an unchanged fair value at the end of the period - All of the group's interests in properties held under operating leases to earn rentals or for capital appreciation, or both, are measured using the fair value model and classified and accounted for as investment properties[31](index=31&type=chunk) - Investment properties are located in China[32](index=32&type=chunk) [13. Properties Under Development / Properties Held for Sale](index=16&type=section&id=13.%20Properties%20Under%20Development%20%2F%20Properties%20Held%20for%20Sale) As of June 30, 2025, properties under development remained at RMB 122.66 million, while properties held for sale slightly decreased to RMB 259.75 million | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Properties Under Development | 122,660 | 122,660 | | Properties Held for Sale | 259,745 | 262,002 | | **Total** | **382,405** | **384,662** | [14. Receivables and Prepayments](index=16&type=section&id=14.%20Receivables%20and%20Prepayments) Total receivables and prepayments amounted to RMB 3,094.06 million as of June 30, 2025, with a substantial portion comprising unsecured, interest-free, and on-demand amounts due from former subsidiaries | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Trade and Other Receivables and Prepayments | 3,086,957 | 3,064,427 | | Prepayments to Suppliers | 5,889 | 5,990 | | Prepaid Other Taxes | 1,209 | 1,203 | | **Total** | **3,094,055** | **3,071,647** | - Other receivables and prepayments include amounts due from former subsidiaries of approximately **RMB 3,040,547,000** (2024: approximately **RMB 3,047,745,000**), which are unsecured, interest-free, and repayable on demand[35](index=35&type=chunk) | Trade Receivables Ageing | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | 0 to 90 Days | 30,000 | – | | **Total** | **30,000** | **–** | [15. Disposal of a Subsidiary](index=17&type=section&id=15.%20Disposal%20of%20a%20Subsidiary) The group disposed of its equity interest in Hunan Asia-Pacific Meilifang Investment Property Co., Ltd. on May 21, 2024, resulting in a disposal loss of approximately RMB 4.315 million and a net cash inflow of RMB 459 thousand - The group disposed of its equity interest in Hunan Asia-Pacific Meilifang Investment Property Co., Ltd. on May 21, 2024, resulting in a disposal loss of approximately **RMB 4,315,000**[37](index=37&type=chunk)[38](index=38&type=chunk) - The net cash inflow from the disposal of Hunan Asia-Pacific was **RMB 459,000**[38](index=38&type=chunk) [16. Payables and Accrued Expenses](index=18&type=section&id=16.%20Payables%20and%20Accrued%20Expenses) Total payables and accrued expenses were RMB 4,921.50 million as of June 30, 2025, primarily consisting of amounts due to former subsidiaries and including a financial guarantee provision of RMB 599.78 million | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Trade and Other Payables and Accrued Expenses | 3,679,990 | 3,661,098 | | Interest Payable | 50,662 | 41,285 | | Other Taxes Payable | 189,755 | 178,552 | | Financial Guarantee Provision | 599,775 | 599,775 | | **Total** | **4,921,496** | **4,898,797** | - Other payables and accrued expenses include amounts due to former subsidiaries of **RMB 3,123,068,000** (2024: **RMB 3,140,253,000**), which are unsecured, interest-free, and repayable on demand[39](index=39&type=chunk) | Trade Payables Ageing | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | 0 to 60 Days | 29,700 | – | | Over One Year | 43 | 43 | | **Total** | **29,743** | **43** | [17. Borrowings](index=19&type=section&id=17.%20Borrowings) The group's total borrowings amounted to RMB 194.69 million, including those subject to repayment on demand, with new borrowings of RMB 889 thousand raised and no repayments made during the period | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Other Loans | 194,691 | 193,860 | | Borrowings Not Subject to Repayment on Demand Clause | 153,823 | 152,992 | | Borrowings Subject to Repayment on Demand Clause | 40,868 | 40,868 | | **Total** | **194,691** | **193,860** | - For the six months ended June 30, 2025, the group raised new borrowings of approximately **RMB 889,000** and made no repayments of borrowings[41](index=41&type=chunk) [18. Share Capital](index=19&type=section&id=18.%20Share%20Capital) As of June 30, 2025, the company's authorized share capital was 50 billion shares, with 1,420,673,262 issued and fully paid shares, each with a par value of HKD 0.01 | Item | Number of Shares | Amount (HKD thousand) | Equivalent Amount (RMB thousand) | | :--- | :--- | :--- | :--- | | Authorized Share Capital (Par Value HKD 0.01 per share) | 50,000,000,000 | 500,000 | 423,381 | | Issued and Fully Paid Share Capital (Par Value HKD 0.01 per share) | 1,420,673,262 | 14,207 | 12,924 | [19. Pledge of Assets](index=20&type=section&id=19.%20Pledge%20of%20Assets) The group's properties under development and properties held for sale, totaling RMB 295.44 million, are pledged as security for bank and other financing, as well as customer mortgage loans | Pledged Assets | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Properties Under Development | 122,660 | 122,660 | | Properties Held for Sale | 172,781 | 172,781 | | **Total** | **295,441** | **295,441** | - Certain shares of the group's subsidiaries are pledged as security for certain borrowings granted to the group[45](index=45&type=chunk) [20. Other Commitments](index=20&type=section&id=20.%20Other%20Commitments) As of the reporting period end, the group had contracted but unprovided property development commitments totaling RMB 1,373 thousand | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Commitments for Property Development Contracted but Not Provided for in the Condensed Consolidated Financial Information | 1,373 | 1,373 | [21. Litigation](index=20&type=section&id=21.%20Litigation) The group is involved in various legal proceedings arising in the ordinary course of business, with provisions made when outcomes can be reliably estimated and are probable - Provisions are made for potential losses from claims when management, based on judgment and legal advice, can reliably estimate the outcome of the litigation[47](index=47&type=chunk) - No provisions are made for outstanding litigation when the outcome cannot be reliably estimated or when management believes that an outflow of resources is not probable[47](index=47&type=chunk) [22. Events After the Reporting Period](index=20&type=section&id=22.%20Events%20After%20the%20Reporting%20Period) No significant events occurred after the reporting date and up to the date of the condensed consolidated financial statements - No significant events occurred after the reporting date and up to the date of these condensed consolidated financial statements[48](index=48&type=chunk) [Management Discussion and Analysis](index=21&type=section&id=Management%20Discussion%20and%20Analysis) This section provides an overview of the group's operational performance, financial position, and future strategies, including business segment reviews, operating expenses, and outlook [Overall Review](index=21&type=section&id=Overall%20Review) The group's core business remains focused on property development and investment, with a new expansion into the supply chain sector, which has contributed new revenue despite a significant decline in property sales - The group's principal business remains concentrated in the property sector, encompassing property development and property investment, and has further expanded into the supply chain sector[49](index=49&type=chunk) [Property Development](index=21&type=section&id=Property%20Development) Property sales revenue significantly decreased by 95.0% to RMB 3.024 million, primarily due to the continued contraction of the real estate market in lower-tier cities | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Property Sales Revenue | 3,024 | 60,295 | (95.0%) | - Property sales revenue during the period was solely from Hunan Province, whereas in prior periods it was from Zhejiang, Hunan, Fujian, and Guangdong Provinces in mainland China[49](index=49&type=chunk) - The significant decline in sales was due to the continued contraction of the real estate market in second-tier, third-tier, and lower-tier cities, which experienced insufficient recovery[49](index=49&type=chunk) [Property Investment](index=21&type=section&id=Property%20Investment) Rental income from property investment was RMB 169 thousand, primarily from commercial investment properties in Changsha, with the fair value of the investment property portfolio remaining unchanged | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Rental Income | 169 | 417 | - Rental income primarily derived from commercial investment properties in Changsha[50](index=50&type=chunk) - The fair value of the group's investment property portfolio remained unchanged as of June 30, 2025[51](index=51&type=chunk) [Supply Chain Business](index=21&type=section&id=Supply%20Chain%20Business) The group successfully expanded into the supply chain sector within China, contributing approximately RMB 30 million in revenue, leveraging its control over properties and logistics facilities - The group has successfully expanded its business into the supply chain sector within China, contributing revenue of approximately **RMB 30,000,000** during the period[52](index=52&type=chunk) - This diversification leverages the group's direct control over properties, warehousing facilities, and logistics centers, creating synergistic revenue streams[52](index=52&type=chunk) [Operating Expenses](index=22&type=section&id=Operating%20Expenses) Both selling and distribution expenses and administrative expenses significantly decreased, leading to an improved expense-to-revenue ratio for the period | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | Expense-to-Revenue Ratio (2025) | Expense-to-Revenue Ratio (2024) | | :--- | :--- | :--- | :--- | :--- | | Selling and Distribution Expenses | 652 | 2,760 | 1.96% | 4.55% | | Administrative Expenses | 7,180 | 18,271 | 21.63% | 30.09% | [Finance Costs](index=22&type=section&id=Finance%20Costs) Finance costs for the period substantially decreased to RMB 9,384 thousand, a significant reduction from RMB 185,365 thousand in the prior period | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Finance Costs | 9,384 | 185,365 | [Income Tax Expense](index=22&type=section&id=Income%20Tax%20Expense) The group recorded an income tax expense of RMB 35 thousand, contrasting with an income tax credit of RMB 20,409 thousand in the prior period, mainly due to the reversal of an over-provision for land appreciation tax | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Income Tax Expense / (Credit) | 35 | (20,409) | - The prior year's income tax credit was primarily due to the recognition of an over-provision for land appreciation tax from the previous year[55](index=55&type=chunk) [Outlook](index=22&type=section&id=Outlook) Facing a challenging property market, the group plans strategic growth initiatives, including geographical expansion into high-potential markets like Guangzhou, Shenzhen, Japan, and Australia, and diversifying its business into modern logistics and data centers - The China property market continues to face uncertainties, and the operating environment remains highly volatile, making 2025 an extremely challenging year for the group[56](index=56&type=chunk) - The group will expand its geographical footprint, actively seizing quality development opportunities in major cities like Guangzhou and Shenzhen, while also exploring high-potential Asian markets, including Japan and Australia[56](index=56&type=chunk) - The group will strategically enrich its business portfolio by accelerating investments in modern logistics warehousing, distribution centers, and data centers to respond to growing demand driven by e-commerce, cloud computing, and economic digitalization[57](index=57&type=chunk) [Events After Review Period](index=23&type=section&id=Events%20After%20Review%20Period) No significant events occurred after the reporting date - No significant events occurred after the reporting date[58](index=58&type=chunk) [Interim Dividend](index=23&type=section&id=Interim%20Dividend) The Board of Directors resolved not to declare an interim dividend for the period - The Board of Directors resolved not to declare an interim dividend for the period (prior period: nil)[59](index=59&type=chunk) [Corporate Governance and Other Information](index=23&type=section&id=Corporate%20Governance%20and%20Other%20Information) This section details the company's adherence to corporate governance standards, including compliance with the Listing Rules, securities trading codes, and the audit committee's review of interim results [Corporate Governance](index=23&type=section&id=Corporate%20Governance) The group complied with the Corporate Governance Code provisions, except for the combined roles of Chairman and Chief Executive Officer, which the Board believes has sufficient safeguards for power balance - The group has complied with the code provisions set out in Appendix C1 to the Listing Rules throughout the period, except that the roles of chairman and chief executive officer should be separate and not performed by the same individual[60](index=60&type=chunk) - The functions of the Company's Chairman and Chief Executive Officer are currently performed by Dr. Jin Zibo, an executive director and Chief Executive Officer, and the Board believes there are sufficient safeguards to ensure an appropriate balance of power within the Board[60](index=60&type=chunk) [Standard Code for Securities Transactions](index=24&type=section&id=Standard%20Code%20for%20Securities%20Transactions) The company adopted the Standard Code for Securities Transactions by Directors of Listed Issuers, and all directors confirmed compliance during the period - The Company has adopted the Standard Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix C3 to the Listing Rules, and each Director has confirmed compliance with the required standards set out in the Standard Code throughout the period[61](index=61&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=24&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 for the six months ended June 30, 2025 - For the six months ended June 30, 2025, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[62](index=62&type=chunk) [Interim Results Reviewed by the Audit Committee](index=24&type=section&id=Interim%20Results%20Reviewed%20by%20the%20Audit%20Committee) The company's Audit Committee, comprising three independent non-executive directors, reviewed the group's unaudited interim results for the period - The Company's Audit Committee, currently comprising three independent non-executive directors, is primarily responsible for reviewing, examining, and overseeing the Company's financial reporting process, financial reporting, risk management, and internal control systems[63](index=63&type=chunk) - The Audit Committee has reviewed the group's unaudited interim results for the period[63](index=63&type=chunk) [Publication of Interim Results and 2025 Interim Report on HKEX and Company Website](index=24&type=section&id=Publication%20of%20Interim%20Results%20and%202025%20Interim%20Report%20on%20HKEX%20and%20Company%20Website) This interim results announcement is published on the HKEX and company websites, with the full 2025 interim report to be dispatched to shareholders and published in due course - This interim results announcement is published on the website of The Stock Exchange of Hong Kong Limited (www.hkexnews.hk) and the Company's website (www.jkgc.com.hk)[64](index=64&type=chunk) - The 2025 Interim Report, containing all information required by the Listing Rules, will be dispatched to the Company's shareholders and published on the HKEX website and the Company's website in due course[64](index=64&type=chunk)

Company Information [SEEC Media Group Limited Unaudited Condensed Consolidated Interim Results](index=1&type=section&id=SEEC%20Media%20Group%20Limited%20Unaudited%20Condensed%20Consolidated%20Interim%20Results) This report presents the unaudited condensed consolidated interim results of SEEC Media Group Limited (Stock Code: 205) for the six months ended June 30, 2025 - The report covers the unaudited condensed consolidated interim results of SEEC Media Group Limited for the six months ended June 30, 2025[2](index=2&type=chunk)[3](index=3&type=chunk) Financial Statements [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=1&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) The Group's revenue slightly increased, but gross profit declined, while a significant gain from fair value changes of investments held for trading, compared to a loss last year, substantially narrowed the loss for the period Key Data from Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income | Metric | Six Months Ended June 30, 2025 (HK$'000) | Six Months Ended June 30, 2024 (HK$'000) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 15,744 | 15,331 | +2.7% | | Cost of Sales | (8,100) | (4,897) | +65.4% | | Gross Profit | 7,644 | 10,434 | -26.8% | | Fair Value Changes of Investments Held for Trading | 8,861 | (34,962) | From Loss to Gain | | Loss Before Tax | (376) | (25,701) | -98.5% | | Loss for the Period | (376) | (25,701) | -98.5% | | Loss for the Period Attributable to Owners of the Company | (829) | (25,167) | -96.7% | | Basic Loss Per Share (HKD) | (0.001) | (0.031) | -96.8% | [Condensed Consolidated Statement of Financial Position](index=2&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the Group's total assets slightly increased, net current assets marginally decreased, and expanded non-controlling interests led to a slight reduction in total equity Key Data from Condensed Consolidated Statement of Financial Position | Metric | June 30, 2025 (HK$'000) | December 31, 2024 (HK$'000) | Change (%) | | :--- | :--- | :--- | :--- | | Non-current Assets | 11,354 | 12,080 | -6.0% | | Current Assets | 319,967 | 311,048 | +2.9% | | Current Liabilities | 152,548 | 142,071 | +7.4% | | Net Current Assets | 167,419 | 168,977 | -0.9% | | Net Assets | 153,976 | 155,421 | -0.9% | | Equity Attributable to Owners of the Company | 173,657 | 175,194 | -0.9% | | Non-controlling Interests | (19,681) | (19,773) | -0.5% | Notes to the Financial Statements [Basis of Preparation and Principal Accounting Policies](index=4&type=section&id=Basis%20of%20Preparation%20and%20Principal%20Accounting%20Policies) The condensed consolidated financial statements are prepared in accordance with HKAS 34 and Appendix D2 of the Listing Rules, using the historical cost convention, with financial instruments measured at revalued amounts or fair value, and the first-time application of HKFRS amendments had no material impact on financial position or performance - The financial statements adhere to **HKAS 34** and Appendix D2 of the Listing Rules, applying the historical cost convention, with financial instruments measured at revalued amounts or fair value[6](index=6&type=chunk)[7](index=7&type=chunk) - The first-time application of **HKAS 21 (Amendments) 'Lack of Exchangeability'** in the current period had no material impact on the Group's financial position or performance[7](index=7&type=chunk) [Revenue and Segment Information](index=4&type=section&id=Revenue%20and%20Segment%20Information) The Group operates three reportable segments: advertising services, securities brokerage services, and money lending, with advertising services revenue significantly increasing, money lending revenue decreasing, and securities brokerage services revenue being zero - The Group operates three business segments: providing advertising services, providing securities brokerage services, and money lending[9](index=9&type=chunk) Revenue by Reportable Segment | Segment | Revenue for Six Months Ended June 30, 2025 (HK$'000) | Revenue for Six Months Ended June 30, 2024 (HK$'000) | Change (%) | | :--- | :--- | :--- | :--- | | Advertising Services | 10,357 | 8,259 | +25.4% | | Securities Brokerage Services | – | 156 | -100% | | Money Lending | 5,387 | 6,916 | -22.1% | | **Total Revenue** | **15,744** | **15,331** | **+2.7%** | Segment Results by Reportable Segment | Segment | Segment (Loss)/Profit for Six Months Ended June 30, 2025 (HK$'000) | Segment (Loss)/Profit for Six Months Ended June 30, 2024 (HK$'000) | | :--- | :--- | :--- | | Advertising Services | (3,910) | (2,088) | | Securities Brokerage Services | (75) | 86 | | Money Lending | 307 | (1,950) | | **Consolidated** | **(3,678)** | **(3,952)** | [Other Gains and Losses, Net](index=6&type=section&id=Other%20Gains%20and%20Losses%2C%20Net) During the reporting period, the Group recorded a net exchange loss, contrasting with a significant gain from the deregistration of a subsidiary in the prior year Other Gains and Losses, Net | Item | Six Months Ended June 30, 2025 (HK$'000) | Six Months Ended June 30, 2024 (HK$'000) | | :--- | :--- | :--- | | Net Exchange (Loss)/Gain | (1,355) | 2,121 | | Gain on Deregistration of a Subsidiary | – | 19,985 | | **Total** | **(1,355)** | **22,097** | [Loss Before Tax](index=6&type=section&id=Loss%20Before%20Tax) The Group's loss before tax is calculated considering factors such as depreciation, bank interest income, and finance costs Components of Loss Before Tax | Item | Six Months Ended June 30, 2025 (HK$'000) | Six Months Ended June 30, 2024 (HK$'000) | | :--- | :--- | :--- | | Depreciation of Property, Plant and Equipment | 1 | 1 | | Bank Interest Income | (8) | (27) | | Finance Costs | 436 | 1,264 | [Income Tax](index=6&type=section&id=Income%20Tax) Hong Kong profits tax uses a two-tiered tax rate, while Chinese subsidiaries are taxed at 25%, with no income tax expense incurred by the Group during the reporting period - Hong Kong profits tax applies a two-tiered tax rate of **8.25% and 16.5%**, while Chinese subsidiaries are subject to a **25%** tax rate[14](index=14&type=chunk) - No income tax expense was incurred for the six months ended June 30, 2025, and 2024[15](index=15&type=chunk) [Dividends](index=6&type=section&id=Dividends) The Board does not recommend the payment of any interim dividend for the six months ended June 30, 2025, consistent with the prior year - The Board does not recommend the payment of any interim dividend for the six months ended June 30, 2025[15](index=15&type=chunk) [Loss Per Share](index=7&type=section&id=Loss%20Per%20Share) Basic and diluted loss per share significantly narrowed, primarily due to a substantial reduction in the loss for the period Loss Per Share Calculation Data | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Loss for the Period Attributable to Owners of the Company (HK$'000) | (829) | (25,167) | | Weighted Average Number of Ordinary Shares ('000 shares) | 821,082 | 821,082 | | Basic and Diluted Loss Per Share (HKD) | (0.001) | (0.031) | - Share options only have a dilutive effect when the average market price during the period exceeds the adjusted exercise price[17](index=17&type=chunk) [Receivables](index=8&type=section&id=Receivables) The Group's receivables primarily stem from advertising and securities trading businesses, with advertising receivables decreasing and securities trading receivables remaining stable, as the Group maintains strict credit risk monitoring Receivables Details | Item | June 30, 2025 (HK$'000) | December 31, 2024 (HK$'000) | Change (%) | | :--- | :--- | :--- | :--- | | Receivables from Advertising Services (Net of Allowance) | 3,592 | 8,868 | -59.5% | | Receivables from Securities Trading Business (Net of Allowance) | 35,433 | 35,433 | 0% | | **Total Receivables** | **39,025** | **44,301** | **-11.9%** | - The Group maintains strict monitoring over outstanding receivables from securities brokerage to minimize credit risk and ensure clients' listed equity securities are sufficient to offset outstanding debts[19](index=19&type=chunk) - Receivables from cash clients are repayable on demand and bear interest at the Hong Kong prime rate plus **3%** per annum[20](index=20&type=chunk) [Investments Held for Trading](index=9&type=section&id=Investments%20Held%20for%20Trading) The Group's investments held for trading primarily consist of Hong Kong-listed equity securities, which saw an increase in fair value and are classified as Level 1 fair value hierarchy Total Investments Held for Trading | Metric | June 30, 2025 (HK$'000) | December 31, 2024 (HK$'000) | Change (%) | | :--- | :--- | :--- | :--- | | Investments Held for Trading | 83,918 | 74,049 | +13.3% | - Investments held for trading are listed equity securities in Hong Kong, with fair value determined by market bid prices and classified as Level 1 fair value hierarchy[23](index=23&type=chunk) [Payables](index=9&type=section&id=Payables) The Group's payables primarily arise from advertising and securities trading, with advertising payables increasing, and the Group maintains an average credit period of 90 days with financial risk management policies to ensure timely settlement Payables Details | Item | June 30, 2025 (HK$'000) | December 31, 2024 (HK$'000) | Change (%) | | :--- | :--- | :--- | :--- | | Payables from Advertising Services | 10,609 | 8,809 | +20.4% | | Payables from Securities Trading Business (Cash Clients) | 9,828 | 9,828 | 0% | | **Total Payables** | **20,437** | **18,637** | **+9.7%** | - The average credit period for payables is **90 days**, and the Group has established financial risk management policies to ensure all payables are settled within credit terms[25](index=25&type=chunk) Business Review [Advertising and Sale of Books and Magazines](index=11&type=section&id=Advertising%20and%20Sale%20of%20Books%20and%20Magazines) Advertising business, a key revenue source, improved as COVID-19 impacts in China subsided despite challenges from the US-China trade war and internet economy, with the Group actively expanding digital media marketing and MCN businesses - Advertising business performance improved, generating approximately **HK$10.4 million** in revenue, accounting for about **65.8%** of total revenue[27](index=27&type=chunk) - The Group actively expands digital media marketing services and Multi-Channel Network (MCN) businesses to diversify revenue[27](index=27&type=chunk) [Securities Brokerage](index=11&type=section&id=Securities%20Brokerage) Due to continuous losses, the Board decided to cease securities brokerage operations and is surrendering its license to the SFC; the business, suspended since September 19, 2023, has no material impact on the Company's financials or operations - The Board has decided to cease operating the continuously loss-making securities brokerage business and is in the process of surrendering its license to the SFC[28](index=28&type=chunk) - The securities brokerage business has been suspended since **September 19, 2023**, with no material impact on the Company's financial position or operations[28](index=28&type=chunk)[29](index=29&type=chunk) - For the six months ended June 30, 2025, the securities brokerage business generated no commission, brokerage, or interest income[28](index=28&type=chunk) [Money Lending](index=12&type=section&id=Money%20Lending) Money lending, part of the Group's diversified financial services to expand revenue, generated approximately HK$5.4 million in interest income, accounting for 34.2% of total revenue, with credit risk managed through independent credit assessments, collateral checks, and monthly loan portfolio reviews - The money lending business generated approximately **HK$5.4 million** in interest income, representing about **34.2%** of the Group's total revenue[30](index=30&type=chunk) - The Group manages credit risk in its money lending business through independent credit assessments, collateral value checks, and regular credit reviews[31](index=31&type=chunk)[32](index=32&type=chunk) - As of June 30, 2025, the loan portfolio included approximately **HK$94.1 million** in secured loans and **HK$61.0 million** in unsecured loans, with annual interest rates ranging from **6.4% to 8.0%**[33](index=33&type=chunk) - The largest borrower and the top five borrowers accounted for approximately **12%** and **49%** of total loans receivable, respectively, with all top five borrowers being individuals whose loans are collateralized[33](index=33&type=chunk) Outlook and Prospects [Outlook and Prospects](index=13&type=section&id=Outlook%20and%20Prospects) Despite global economic challenges, China's economy is expected to rebound, and the Group will continue to strengthen its financial businesses, actively develop digital media marketing and MCN advertising, and explore other investment opportunities to maximize shareholder value - The global economy faces challenges, but China's economy is expected to rebound, supported by government stimulus measures and domestic consumption growth[35](index=35&type=chunk) - The Group will continue to strengthen its financial businesses and actively develop digital media marketing and MCN advertising businesses[35](index=35&type=chunk) - The Group will maintain a cautiously optimistic outlook, exploring investment opportunities that yield good sustainable returns and maximize shareholder value[37](index=37&type=chunk) Management Discussion and Analysis [Financial Review](index=14&type=section&id=Financial%20Review) Advertising services revenue grew by 25.4%, securities brokerage revenue was zero, and money lending revenue decreased, leading to an overall gross profit margin decline to 48.6%; the shift from a loss to a gain in investments held for trading was the primary reason for the 96.7% reduction in loss for the period Revenue Changes by Business Segment | Business Segment | Revenue for Six Months Ended June 30, 2025 (HK$'000) | Revenue for Six Months Ended June 30, 2024 (HK$'000) | Change (%) | | :--- | :--- | :--- | :--- | | Advertising Services | 10,400 | 8,300 | +25.4% | | Securities Brokerage Business | 0 | 200 | -100% | | Money Lending Business | 5,400 | 6,900 | -21.7% | - The Group's overall gross profit margin decreased from **68.1% to 48.6%**, primarily due to a reduced revenue contribution from high-margin business segments[38](index=38&type=chunk) - A fair value gain of approximately **HK$8.9 million** from investments held for trading, compared to a loss of approximately **HK$35.0 million** in the prior year, was the primary reason for the **96.7%** reduction in loss for the period[38](index=38&type=chunk)[40](index=40&type=chunk) [Use of Proceeds](index=15&type=section&id=Use%20of%20Proceeds) The Group disclosed the use of proceeds from its 2015 public offering and 2022 subscription, with most funds utilized as planned, and remaining unutilized funds allocated for developing Type 4, 6, 9 regulated activities companies and expanding advertising business - Net proceeds of approximately **HK$518.27 million** from the 2015 public offering were primarily used for establishing and operating Type 1 companies, acquiring e-commerce platform companies, and developing money lending businesses, with most funds utilized[41](index=41&type=chunk)[42](index=42&type=chunk) Use of Proceeds from Public Offering | Intended Use | Net Proceeds (HK$'000) | Actual Use for Six Months Ended June 30, 2025 (HK$'000) | Unutilized Balance (HK$'000) | Expected Timeline for Full Utilization | | :--- | :--- | :--- | :--- | :--- | | Establishment and Operation of Type 1 Companies | 275,000 | 275,000 | – | – | | Establishment and Operation of Type 4, 6, 9 Regulated Activities Companies | 10,000 | – | 10,000 | December 31, 2025 | | Acquisition of E-commerce Platform Development and Operation Companies | 124,000 | 124,000 | – | – | | Operation and Development of Money Lending Business | 110,000 | 110,000 | – | – | - Net proceeds of approximately **HK$47.8 million** from the 2022 subscription were intended for expanding advertising business, particularly digital media marketing and MCN services, with **HK$46.6 million** utilized as of the reporting date, and the remaining **HK$1.2 million** expected to be fully utilized by **December 31, 2025**[43](index=43&type=chunk)[44](index=44&type=chunk) [Material Acquisitions and Disposals of Subsidiaries](index=16&type=section&id=Material%20Acquisitions%20and%20Disposals%20of%20Subsidiaries) For the six months ended June 30, 2025, the Group had no material acquisitions or disposals of subsidiaries - During the reporting period, the Group had no material acquisitions or disposals of subsidiaries[45](index=45&type=chunk) [Material Investments](index=16&type=section&id=Material%20Investments) The Group's total investments held for trading amounted to approximately HK$83.9 million, primarily Hong Kong-listed equity securities, with an investment in China Investment and Finance Group Limited accounting for 5.9% of total assets and recording an unrealized gain; the Group will maintain a diversified investment portfolio to balance risk Total Investments Held for Trading | Metric | June 30, 2025 (HK$'000) | December 31, 2024 (HK$'000) | Change (%) | | :--- | :--- | :--- | :--- | | Total Investments Held for Trading | 83,900 | 74,000 | +13.4% | Details of Material Investments | Company Name | Number of Shares Held | Percentage of Total Issued Share Capital | Market Value (HK$'000) | Percentage of Total Group Assets | Fair Value Gain on Investment (HK$'000) | | :--- | :--- | :--- | :--- | :--- | :--- | | China Investment and Finance Group Limited | 13,000,000 | 3.2% | 19,500 | 5.9% | 2,210 | | Other Securities | N/A | N/A | 64,418 | 19.4% | 6,651 | | **Total** | | | **83,918** | **25.3%** | **8,861** | - The Group will continue to maintain a diversified investment portfolio across various business segments, closely monitoring portfolio performance to adjust investment strategies for balancing and mitigating investment risks[49](index=49&type=chunk) [Liquidity and Financial Resources](index=18&type=section&id=Liquidity%20and%20Financial%20Resources) The Group's daily operations are primarily funded by internal resources, with a slight decrease in total equity and a capital gearing ratio increase to 53.5%; the Group holds approximately HK$25.9 million in bank and cash balances with no assets pledged Liquidity and Financial Resources Overview | Metric | June 30, 2025 (HK$'000) | December 31, 2024 (HK$'000) | Change (%) | | :--- | :--- | :--- | :--- | | Total Equity | 154,000 | 155,400 | -0.9% | | Non-current Liabilities | 24,800 | 25,600 | -3.1% | | Capital Gearing Ratio | 53.5% | 51.9% | +1.6% | | Bank and Cash Balances (Excluding Trust and Segregated Accounts) | 25,900 | 29,400 | -11.9% | - The Group's daily operations are primarily funded by internal resources, with no assets or bank deposits pledged to banks[50](index=50&type=chunk)[52](index=52&type=chunk) [Events After Reporting Period](index=18&type=section&id=Events%20After%20Reporting%20Period) Subsequent to the reporting period, the Group completed a rights issue, raising net proceeds of approximately HK$39.5 million, and its wholly-owned subsidiary, Honor Fame Group Limited, agreed to acquire sale shares of BFB Development Inc. for HK$38.22 million - Subsequent to the reporting period, the Group completed a rights issue in **July 2025**, raising net proceeds of approximately **HK$39.5 million**[53](index=53&type=chunk) - The Group's wholly-owned subsidiary, Honor Fame Group Limited, agreed on **August 22, 2025**, to acquire sale shares of BFB Development Inc. for **HK$38.22 million**[54](index=54&type=chunk)[55](index=55&type=chunk) [Foreign Currency and Treasury Policy](index=19&type=section&id=Foreign%20Currency%20and%20Treasury%20Policy) Most of the Group's business transactions, assets, and liabilities are denominated in HKD, USD, or RMB; the treasury policy is to manage foreign exchange risk when financially significant, with no hedging or speculative activities during the period - Most of the Group's business transactions, assets, and liabilities are denominated in **HKD, USD, or RMB**[56](index=56&type=chunk) - The Group's treasury policy is to manage foreign exchange risk when it significantly impacts financials, with no hedging or speculative activities undertaken during the period[56](index=56&type=chunk) [Employees](index=19&type=section&id=Employees) As of June 30, 2025, the Group had 48 employees, with remuneration and benefits determined based on market conditions and individual performance Number of Employees | Metric | June 30, 2025 | December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Number of Employees | 48 | 55 | -7 | - Salaries, bonuses, and benefits are determined based on market conditions and individual employee performance[57](index=57&type=chunk) Corporate Governance and Other Information [Directors' Interests in Shares](index=19&type=section&id=Directors%27%20Interests%20in%20Shares) As of June 30, 2025, certain directors held long positions in the Company's shares and share options, with Mr. Li Wei holding 5.17% of shares and related share options Directors' Interests in Shares | Director's Name | Nature of Interest | Number of Shares Held | Number of Underlying Shares Held via Share Options | Percentage of Total Issued Shares | | :--- | :--- | :--- | :--- | :--- | | Li Wei | Beneficial Owner | 30,778,750 | 7,300,000 | 5.17% | | Luo Zhihong | Beneficial Owner | – | 3,180,000 | 0.43% | - As of June 30, 2025, no director held any long or short positions in the Company's shares, underlying shares, or debentures, other than those disclosed[60](index=60&type=chunk) [Interests and Short Positions of Substantial Shareholders and Other Persons in Shares and Underlying Shares of the Company](index=20&type=section&id=Interests%20and%20Short%20Positions%20of%20Substantial%20Shareholders%20and%20Other%20Persons%20in%20Shares%20and%20Underlying%20Shares%20of%20the%20Company) As of June 30, 2025, the register of substantial shareholders indicated Yongrong (Hong Kong) Asset Management held a long position in the Company's shares - **Yongrong (Hong Kong) Asset Management** is a substantial shareholder, holding a long position in the Company's shares[63](index=63&type=chunk) [Purchase, Redemption or Sale of the Company's Listed Securities](index=20&type=section&id=Purchase%2C%20Redemption%20or%20Sale%20of%20the%20Company%27s%20Listed%20Securities) During the reporting period, neither the Company nor any of its subsidiaries purchased, redeemed, or sold any of the Company's listed securities - During the reporting period, neither the Company nor any of its subsidiaries purchased, redeemed, or sold any of the Company's listed securities[64](index=64&type=chunk) [Corporate Governance](index=20&type=section&id=Corporate%20Governance) The Company complied with the Corporate Governance Code in Appendix C1 of the Listing Rules during the reporting period, adopting a more flexible approach to Board meeting notice periods for more efficient decision-making - The Company complied with the Corporate Governance Code in Appendix C1 of the Listing Rules, but adopted a more flexible approach regarding Board meeting notice periods (Code Provisions C.5.3 and C.5.8) to ensure more efficient and prompt management decisions[65](index=65&type=chunk) [Remuneration Committee](index=21&type=section&id=Remuneration%20Committee) The Remuneration Committee comprises three independent non-executive directors, with Mr. Luo Zhihong serving as Chairman - The Remuneration Committee consists of **three independent non-executive directors**, with **Mr. Luo Zhihong** as Chairman[67](index=67&type=chunk) [Nomination Committee](index=21&type=section&id=Nomination%20Committee) The Nomination Committee comprises three independent non-executive directors, with Ms. Fang Ying serving as Chairperson - The Nomination Committee consists of **three independent non-executive directors**, with **Ms. Fang Ying** as Chairperson[68](index=68&type=chunk) [Audit Committee](index=21&type=section&id=Audit%20Committee) The Audit Committee, comprising three independent non-executive directors with Mr. Luo Zhihong as Chairman, has reviewed the Group's accounting principles, practices, and financial reporting matters - The Audit Committee consists of **three independent non-executive directors**, with **Mr. Luo Zhihong** as Chairman, and has reviewed the Group's accounting principles, practices, and financial reporting matters[69](index=69&type=chunk) [Standard Code for Securities Transactions by Directors](index=21&type=section&id=Standard%20Code%20for%20Securities%20Transactions%20by%20Directors) The Company has adopted a code for directors' securities transactions no less exacting than the Model Code in Appendix C3 of the Listing Rules, and all directors confirmed compliance - The Company has adopted a code for directors' securities transactions no less exacting than the Model Code in Appendix C3 of the Listing Rules, and all directors confirmed compliance[70](index=70&type=chunk) [Board of Directors](index=21&type=section&id=Board%20of%20Directors) As of the announcement date, the Board comprises four executive directors and three independent non-executive directors, with Mr. Li Liang serving as Chairman - The Board of Directors consists of **four executive directors** (Zhou Hongtao, Li Liang, Li Wei, Li Zhen) and **three independent non-executive directors** (Luo Zhihong, Fang Ying, Guo Hui), with **Mr. Li Liang** serving as Chairman[71](index=71&type=chunk)

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不負責，對其準確 性或完整性亦不發表任何聲明，並明確表示，概不對因本公告全部或任何部份內容而產生或 因倚賴該等內容而引致的任何損失承擔任何責任。 CATHAY GROUP HOLDINGS INC. 華夏集團控股有限公司 （於開曼群島註冊成立的有限公司） （股份代號：1981） 截至2025年6月30日止六個月 中期業績公告 華夏集團控股有限公司（「本公司」，連同其附屬公司及綜合聯屬實體統稱「本集 團」）董事會欣然公佈本集團截至2025年6月30日止六個月（「報告期」）的未經審核 中期業績。該中期業績已經由本公司審核委員會及本公司核數師德勤 • 關黃陳方 會計師行審閱。 財務摘要 截至6月30日止六個月 1 下表載列我們的經調整淨利潤與期内利潤（按照香港財務報告準則會計準則計算 及呈列的最直接可比較財務計量）的調節。 截至6月30日止六個月 | | 2025年 | 2024年 | | --- | --- | --- | | | （未經審核）（未經審核） | | | | （人民幣 | （人民幣 | | | 千元） | 千元） | | 期內利潤 | ...

[Company Information and Report Overview](index=1&type=section&id=I.%20Company%20Information%20and%20Report%20Overview) This section provides an overview of Yestar Healthcare Holdings Company Limited's basic information and the basis for preparing its financial report [Company Basic Information](index=1&type=section&id=1.1%20Company%20Basic%20Information) Yestar Healthcare Holdings Company Limited, incorporated in the Cayman Islands and listed on the HKEX, operates as an investment holding company with subsidiaries engaged in imaging printing products and medical products and equipment manufacturing, sales, and distribution - Company Name: **Yestar Healthcare Holdings Company Limited**[2](index=2&type=chunk) - Registered in the Cayman Islands, with shares listed on the Main Board of The Stock Exchange of Hong Kong Limited[2](index=2&type=chunk)[9](index=9&type=chunk)[10](index=10&type=chunk) - Principal Business: Investment holding, with subsidiaries engaged in the manufacturing, sales, and distribution of imaging printing products and medical products and equipment[10](index=10&type=chunk)[13](index=13&type=chunk)[18](index=18&type=chunk) [Basis of Report Preparation](index=7&type=section&id=1.2%20Basis%20of%20Report%20Preparation) This condensed consolidated interim financial information is prepared in accordance with IAS 34 and reviewed in conjunction with the annual financial statements, with no significant impact from newly adopted IFRS amendments - Prepared in accordance with **International Accounting Standard 34 “Interim Financial Reporting”**[2](index=2&type=chunk)[10](index=10&type=chunk) - Accounting policies are consistent with the 2024 annual consolidated financial statements, except for the first-time adoption of the amendment to IAS 21 “Lack of Exchangeability”[11](index=11&type=chunk) - The adoption of the amendment has no material impact on the amounts reported or disclosures in the condensed consolidated interim financial statements[12](index=12&type=chunk) [Financial Performance Overview](index=2&type=section&id=II.%20Financial%20Performance%20Overview) The company experienced a significant decline in revenue and profit for the six months ended June 30, 2025, primarily due to a large gain from the derecognition of preference shares in the prior period and the impact of centralized procurement policies on the medical segment [Condensed Consolidated Statement of Profit or Loss](index=2&type=section&id=2.1%20Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss) For the six months ended June 30, 2025, revenue from continuing operations decreased by 37.0% to RMB 802.6 million, gross profit fell by 38.6% to RMB 133.7 million, and profit before tax sharply declined from RMB 1,112.3 million to RMB 21.2 million For the six months ended June 30, 2025, Condensed Consolidated Statement of Profit or Loss Key Data | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 802,634 | 1,273,785 | -37.0% | | Cost of sales | (668,897) | (1,056,145) | -36.7% | | Gross profit | 133,737 | 217,640 | -38.6% | | Other income and gains | 8,880 | 1,094,425 | -99.2% | | Selling and distribution expenses | (38,802) | (76,459) | -49.3% | | Administrative expenses | (77,683) | (101,844) | -23.7% | | Finance costs | (6,515) | (21,240) | -69.3% | | Profit before income tax | 21,152 | 1,112,323 | -98.1% | | Profit for the period | 11,148 | 1,092,525 | -99.0% | [Condensed Consolidated Statement of Comprehensive Income](index=4&type=section&id=2.2%20Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) For the six months ended June 30, 2025, total comprehensive income for the period was RMB 15.3 million, a significant decrease from RMB 1,080.0 million in the prior year, primarily due to the sharp decline in profit for the period For the six months ended June 30, 2025, Condensed Consolidated Statement of Comprehensive Income Key Data | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Profit for the period | 11,148 | 1,093,061 | | Exchange differences on translation of foreign operations | 20,121 | (9,172) | | Exchange differences on translation of the Company | (16,018) | (3,840) | | Other comprehensive income for the period, net of tax | 4,103 | (13,012) | | Total comprehensive income for the period | 15,251 | 1,080,049 | [Condensed Consolidated Statement of Financial Position](index=5&type=section&id=2.3%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, total assets decreased to RMB 1,361.8 million from RMB 1,430.1 million, while net current assets increased to RMB 319.8 million, driven by higher cash and cash equivalents and reduced inventories and trade receivables, leading to a significant improvement in the gearing ratio As of June 30, 2025, Condensed Consolidated Statement of Financial Position Key Data | Indicator | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Total non-current assets | 317,036 | 343,983 | -7.8% | | Total current assets | 1,044,807 | 1,086,099 | -3.8% | | Total current liabilities | 724,995 | 805,270 | -10.0% | | Net current assets | 319,812 | 280,829 | +13.9% | | Total non-current liabilities | 114,917 | 116,571 | -1.4% | | Net assets | 521,931 | 508,241 | +2.7% | | Total equity | 521,931 | 508,241 | +2.7% | - Cash and cash equivalents increased from approximately **RMB 93.8 million** as of December 31, 2024, to approximately **RMB 249.4 million** as of June 30, 2025, primarily due to optimized cost management, recovery of trade receivables, and reduced inventory levels[7](index=7&type=chunk)[58](index=58&type=chunk) - The current ratio increased from approximately **1.35** as of December 31, 2024, to approximately **1.44** as of June 30, 2025[59](index=59&type=chunk) - The gearing ratio significantly decreased from approximately **29%** as of December 31, 2024, to approximately **2%** as of June 30, 2025[60](index=60&type=chunk) [Operating Segment Information](index=8&type=section&id=III.%20Operating%20Segment%20Information) The Group is managed through two reportable operating segments: imaging printing products and medical products and equipment, with performance assessed based on adjusted profit or loss before tax [Segment Classification and Management](index=8&type=section&id=3.1%20Segment%20Classification%20and%20Management) The Group's operations are divided into imaging printing products and medical products and equipment segments, with management allocating resources and assessing performance based on adjusted profit or loss before tax for each segment - Operating Segments: Imaging printing products (color photographic paper, industrial non-destructive testing X-ray film, printed circuit board film, trading of imaging equipment) and medical products and equipment (medical dry/wet/dental film manufacturing and sales, and distribution of medical equipment/diagnostic reagents)[14](index=14&type=chunk)[18](index=18&type=chunk) - Segment Reporting Adjustment: Effective this period, the production of certain medical films was transferred from the imaging printing products segment to the medical products and equipment segment, with related expenses, assets, and liabilities reallocated[17](index=17&type=chunk) [Segment Revenue and Performance](index=9&type=section&id=3.2%20Segment%20Revenue%20and%20Performance) For the six months ended June 30, 2025, the medical products and equipment segment remained the primary revenue source at RMB 722.1 million, despite a 37.9% year-on-year decrease, while the imaging printing products segment revenue also declined by 27.7% to RMB 80.6 million, with both segments experiencing a decrease in gross profit margin For the six months ended June 30, 2025, Segment Revenue and Performance | Segment | 2025 Revenue (RMB thousand) | 2024 Revenue (RMB thousand) | Revenue Change (%) | 2025 Segment Performance (RMB thousand) | 2024 Segment Performance (RMB thousand) | | :--- | :--- | :--- | :--- | :--- | :--- | | Imaging printing products | 80,556 | 111,399 | -27.7% | (9,173) | 2,170 | | Medical products and equipment | 722,078 | 1,162,386 | -37.9% | 35,081 | 26,904 | | Total | 802,634 | 1,273,785 | -37.0% | 25,908 | 29,074 | - The gross profit margin for the medical segment decreased by **0.2 percentage points** to approximately **16.9%**, while the imaging printing products segment's gross profit margin decreased by **2.9 percentage points** to **14.2%**[54](index=54&type=chunk)[55](index=55&type=chunk) - The decline in medical segment revenue was primarily impacted by China's centralized procurement policies[51](index=51&type=chunk)[54](index=54&type=chunk) [Segment Assets and Liabilities](index=11&type=section&id=3.3%20Segment%20Assets%20and%20Liabilities) As of June 30, 2025, the Group's total segment assets were RMB 1,358.8 million and total segment liabilities were RMB 817.5 million, with the imaging printing products segment showing significant decreases in both assets and liabilities, while the medical products and equipment segment saw a slight increase in assets and a slight decrease in liabilities compared to December 31, 2024 As of June 30, 2025, Segment Assets and Liabilities | Segment | June 30, 2025 Assets (RMB thousand) | December 31, 2024 Assets (RMB thousand) | June 30, 2025 Liabilities (RMB thousand) | December 31, 2024 Liabilities (RMB thousand) | | :--- | :--- | :--- | :--- | :--- | | Imaging printing products | 60,410 | 139,374 | 94,905 | 170,110 | | Medical products and equipment | 1,298,401 | 1,285,767 | 722,634 | 727,925 | | Total | 1,358,811 | 1,425,141 | 817,539 | 898,035 | [Major Customers and Geographical Information](index=12&type=section&id=3.4%20Major%20Customers%20and%20Geographical%20Information) For the six months ended June 30, 2025, sales to a single major customer accounted for 14.09% of total revenue, a decrease from 21.20% in the prior year, with all operations and non-current assets located in mainland China and unaffected by seasonality - Major Customer: Revenue from sales of medical imaging products and imaging printing products to one customer accounted for **14.09%** of total revenue (2024: **21.20%**)[22](index=22&type=chunk) - Geographical Operations: The Group operates solely in mainland China, where all non-current assets are located[23](index=23&type=chunk) - Seasonality: Operations are not affected by seasonal factors[24](index=24&type=chunk) [Revenue and Profit Analysis](index=12&type=section&id=IV.%20Revenue%20and%20Profit%20Analysis) This section analyzes the composition of revenue, profit before tax, and income tax expense for the period, highlighting key drivers of changes in financial performance [Revenue Composition](index=12&type=section&id=4.1%20Revenue%20Composition) For the six months ended June 30, 2025, revenue from contracts with customers from continuing operations decreased by 37.0% to RMB 802.6 million, with sales of goods accounting for RMB 781.7 million and services for RMB 20.9 million For the six months ended June 30, 2025, Revenue Analysis | Category | 2025 (RMB thousand) | 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Total revenue from contracts with customers | 802,634 | 1,273,785 | -37.0% | | Of which: Sales of goods | 781,693 | 1,253,154 | -37.6% | | Of which: Rendering of services | 20,941 | 20,631 | +1.5% | [Profit Before Tax Composition](index=14&type=section&id=4.2%20Profit%20Before%20Tax%20Composition) For the six months ended June 30, 2025, profit before tax was RMB 21.2 million, a significant decrease from the prior year, primarily due to a substantial gain from the derecognition of preference shares in the comparative period and impairment losses on non-financial assets totaling RMB 9.7 million in the current period For the six months ended June 30, 2025, Major Components of Profit Before Tax | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Cost of inventories sold and services rendered | 668,897 | 1,056,145 | | Gain on derecognition of preference shares | — | (1,083,407) | | Depreciation of property, plant and equipment | 5,448 | 12,313 | | Depreciation of right-of-use assets | 6,458 | 18,480 | | Amortisation of other intangible assets | 7,334 | 11,308 | | Impairment of non-financial assets* | 9,744 | — | | Employee benefit expenses | 73,348 | 81,021 | | Net foreign exchange differences | 4,221 | 6,843 | - Impairment losses on non-financial assets totaled **RMB 9.7 million**, mainly due to the impact of China's national and provincial centralized drug procurement programs and national medical imaging data sharing on revenue, as well as reduced demand for industrial film[28](index=28&type=chunk) [Income Tax Expense](index=15&type=section&id=4.3%20Income%20Tax%20Expense) For the six months ended June 30, 2025, income tax expense decreased to RMB 10.0 million from RMB 19.8 million in the prior year, with mainland China's statutory tax rate at 25% and certain high-tech enterprises enjoying a preferential rate of 15% For the six months ended June 30, 2025, Income Tax Expense | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Current tax — China expense for the period | 10,472 | 23,332 | | Deferred tax | (468) | (3,534) | | Income tax expense | 10,004 | 19,798 | - The statutory income tax rate in mainland China is **25%**[29](index=29&type=chunk) - Yestar Medical and Caixing Chemical, as high-tech enterprises, enjoy a preferential tax rate of **15%**[29](index=29&type=chunk) [Earnings Per Share and Dividends](index=3&type=section&id=V.%20Earnings%20Per%20Share%20and%20Dividends) This section details the basic and diluted earnings per share for the period and the Board's dividend policy [Earnings Per Share](index=3&type=section&id=5.1%20Earnings%20Per%20Share) For the six months ended June 30, 2025, basic earnings per share from continuing operations attributable to owners of the Company significantly decreased to RMB 0.25 cents from RMB 46.69 cents in the prior year, with diluted earnings per share being the same due to the absence of potential dilutive ordinary shares For the six months ended June 30, 2025, Earnings Per Share | Indicator | 2025 (RMB cents) | 2024 (RMB cents) | | :--- | :--- | :--- | | Basic earnings per share from continuing operations attributable to owners of the Company | 0.25 | 46.69 | | Basic earnings per share attributable to owners of the Company | 0.25 | 46.72 | - Diluted earnings per share are the same as basic earnings per share because there are no potential dilutive ordinary shares[35](index=35&type=chunk) [Dividend Policy](index=15&type=section&id=5.2%20Dividend%20Policy) The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025, consistent with the prior year - Dividend: The Board does not recommend the payment of an interim dividend (for the six months ended June 30, 2025: nil; for the six months ended June 30, 2024: nil)[32](index=32&type=chunk)[53](index=53&type=chunk)[86](index=86&type=chunk) - Annual Dividend: No dividend was declared by shareholders at the annual general meeting held on May 30, 2025, for the year ended December 31, 2024[32](index=32&type=chunk) [Assets and Liabilities Analysis](index=16&type=section&id=VI.%20Assets%20and%20Liabilities%20Analysis) This section provides a detailed analysis of the Group's trade receivables, borrowings, trade payables, other payables, and discontinued operations [Trade and Bills Receivables](index=16&type=section&id=6.1%20Trade%20and%20Bills%20Receivables) As of June 30, 2025, net trade and bills receivables decreased to RMB 498.0 million from RMB 582.5 million as of December 31, 2024, with impairment provisions also decreasing, and the majority of trade receivables aged within 90 days As of June 30, 2025, Trade and Bills Receivables | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Trade receivables | 530,661 | 632,758 | -16.1% | | Impairment allowance | (45,711) | (64,084) | -28.7% | | Net trade and bills receivables | 497,981 | 582,513 | -14.5% | As of June 30, 2025, Aging Analysis of Trade Receivables (Net of Allowance) | Aging | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Within 90 days | 192,901 | 239,997 | | 91 to 180 days | 95,843 | 121,821 | | 181 to 365 days | 117,518 | 118,972 | | 1 to 2 years | 41,700 | 49,148 | | Over 2 years | 36,988 | 38,736 | [Bank and Other Borrowings](index=17&type=section&id=6.2%20Bank%20and%20Other%20Borrowings) As of June 30, 2025, total bank and other borrowings decreased to RMB 257.8 million from RMB 279.5 million as of December 31, 2024, with current borrowings at RMB 246.0 million and non-current borrowings at RMB 11.8 million, and most borrowings being secured and/or guaranteed As of June 30, 2025, Bank and Other Borrowings | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Total bank and other loans | 257,833 | 279,519 | -7.7% | | Of which: Secured and/or guaranteed | 228,033 | 236,619 | -3.7% | | Of which: Unsecured | 29,800 | 42,900 | -30.5% | | Of which: Current | 246,033 | 272,519 | -9.7% | | Of which: Non-current | 11,800 | 7,000 | +68.6% | - Bank loans of **RMB 87.0 million** are secured by buildings and guaranteed by subsidiaries, while borrowings of **RMB 86.0 million** are guaranteed by non-controlling shareholders and subsidiaries, and borrowings of **RMB 55.0 million** are guaranteed by independent third parties and directors of subsidiaries[38](index=38&type=chunk)[83](index=83&type=chunk) [Trade Payables](index=18&type=section&id=6.3%20Trade%20Payables) As of June 30, 2025, total trade payables decreased to RMB 193.2 million from RMB 230.6 million as of December 31, 2024, with the majority of payables aged within 90 days As of June 30, 2025, Aging Analysis of Trade Payables | Aging | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Within 90 days | 181,547 | 221,765 | -18.2% | | 91 to 180 days | 1,841 | 2,418 | -23.8% | | 181 to 365 days | 3,948 | 2,526 | +56.3% | | 1 to 2 years | 2,020 | 2,043 | -1.1% | | Over 2 years | 3,861 | 1,818 | +112.4% | | Total | 193,217 | 230,570 | -16.2% | [Other Payables and Accrued Expenses](index=18&type=section&id=6.4%20Other%20Payables%20and%20Accrued%20Expenses) As of June 30, 2025, total other payables and accrued expenses slightly decreased to RMB 224.0 million from RMB 237.9 million as of December 31, 2024, with amounts due to non-controlling interests being a major component, primarily related to the acquisition of remaining equity in Shengshiyuan and Kaihongda As of June 30, 2025, Other Payables and Accrued Expenses | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Total current portion | 176,660 | 191,383 | -7.6% | | Total non-current portion | 47,388 | 46,548 | +1.8% | | Total | 224,048 | 237,931 | -5.9% | - Amounts due to non-controlling interests are primarily related to the acquisition of remaining equity in Guangzhou Shengshiyuan Trading Co., Ltd. (**23.1%**) and Beijing Kaihongda Technology Co., Ltd. (**30%**)[39](index=39&type=chunk) - The acquisition of a **6.9%** equity interest in Shengshiyuan was completed during the period, with a related put option reserve of **RMB 20.4 million** transferred to other reserves[40](index=40&type=chunk) - Amounts due to non-controlling interests for Shengshiyuan, totaling **RMB 60.8 million** plus dividends of **RMB 22.8 million**, are to be settled in three installments by September 30, 2027[41](index=41&type=chunk) - Amounts due to non-controlling interests for Kaihongda, totaling **RMB 65.3 million** plus dividends of **RMB 5.1 million**, are recognized as current liabilities, with a final agreement yet to be reached[41](index=41&type=chunk) [Discontinued Operations](index=20&type=section&id=6.5%20Discontinued%20Operations) The Group completed the disposal of a 94.2% equity interest in Anbaida Group on January 12, 2024, with this business reclassified as discontinued operations, generating a profit for the period of RMB 536 thousand for the six months ended June 30, 2024 - Disposal: The disposal of a **94.2%** equity interest in Anbaida Group was completed on January 12, 2024, for a consideration of **RMB 574.8 million**[42](index=42&type=chunk)[43](index=43&type=chunk) - Business Nature: The disposed group primarily engaged in the sales and distribution of in-vitro diagnostic products, medical equipment, and other related consumables in Shanghai[44](index=44&type=chunk) For the six months ended June 30, 2024, Financial Performance of Discontinued Operations | Item | 2024 (RMB thousand) | | :--- | :--- | | Other income and gains | 536 | | Profit before income tax | 536 | | Income tax expense | — | | Profit for the period | 536 | [Management Discussion and Analysis](index=21&type=section&id=VII.%20Management%20Discussion%20and%20Analysis) This section provides an overview of Yestar's market position, a review of its business performance, future outlook, financial review, capital structure, and significant asset and liability-related matters [About Yestar and Market Overview](index=21&type=section&id=7.1%20About%20Yestar%20and%20Market%20Overview) Yestar Medical is a leading distributor and service provider of in-vitro diagnostic products in China, also manufacturing and selling medical and dental films, operating in a rapidly growing market driven by national policies supporting domestic product localization - Company Positioning: One of China's leading distributors and service providers of in-vitro diagnostic products, also manufacturing Fujifilm medical films and its own brand "Yes!Star" dental films and medical dry films[47](index=47&type=chunk) - Market Size: China's in-vitro diagnostic market reached **RMB 137.0 billion** in 2024, projected to exceed **RMB 140.0 billion** in 2025[48](index=48&type=chunk) - Growth Drivers: Domestic economic development, aging population, increased per capita healthcare expenditure, and advancements in medical technology[48](index=48&type=chunk) - Localization Trend: In 2024, the registration volume of domestic Class III diagnostic products approved increased by approximately **40%** year-on-year, accounting for **80.5%** of the total, accelerating the import substitution process[49](index=49&type=chunk) [Business Overview and Performance Review](index=22&type=section&id=7.2%20Business%20Overview%20and%20Performance%20Review) The Group's total revenue decreased by 37.0% year-on-year to RMB 802.6 million, and gross profit declined by 38.6% to RMB 133.7 million, primarily due to the impact of centralized procurement policies on the medical segment, while selling and distribution expenses, administrative expenses, and finance costs all significantly decreased - Own-brand Film Camera: Research and development of the own-brand "Yes!Star" S2 film camera is underway, with an expected launch in the second half of this year[50](index=50&type=chunk) - Total Revenue: Decreased by **37.0%** year-on-year to **RMB 802.6 million**[51](index=51&type=chunk) - Gross Profit: Decreased by **38.6%** year-on-year to **RMB 133.7 million**[51](index=51&type=chunk) - Selling and Distribution Expenses: Decreased by **49.3%** year-on-year to **RMB 38.8 million**, mainly due to enhanced internal controls[51](index=51&type=chunk) - Administrative Expenses: Decreased by **23.7%** year-on-year to **RMB 77.7 million**, primarily due to optimized cost management and reduced headcount[52](index=52&type=chunk)[62](index=62&type=chunk) - Finance Costs: Sharply decreased by **69.3%** year-on-year to **RMB 6.5 million**, mainly because no further interest payments were required after the redemption of preference shares last year[52](index=52&type=chunk)[63](index=63&type=chunk) - Other Expenses: Increased by **39.4%** year-on-year to **RMB 17.6 million**, primarily due to impairment losses on non-financial assets and exchange rate fluctuations[52](index=52&type=chunk) - Other Income: Decreased by **99.2%** year-on-year to **RMB 8.9 million**, mainly due to the profit recognized from the redemption of preference shares last year[52](index=52&type=chunk)[53](index=53&type=chunk) [Medical Business](index=23&type=section&id=7.2.1%20Medical%20Business) The medical business accounted for 90.0% of total revenue, with revenue of RMB 722.1 million for the period, a 37.9% year-on-year decrease, primarily impacted by national healthcare reform and centralized procurement policies, while the gross profit margin remained relatively stable at approximately 16.9% - Revenue Contribution: Accounted for **90.0%** of total revenue[54](index=54&type=chunk) - Revenue: **RMB 722.1 million**, a year-on-year decrease of **37.9%**[54](index=54&type=chunk) - Gross Profit Margin: Decreased by **0.2 percentage points** to approximately **16.9%**[54](index=54&type=chunk) - Impact Factors: National healthcare reform and centralized procurement policies led to a decrease in demand for in-vitro diagnostic consumables[54](index=54&type=chunk) [Non-Medical Business](index=23&type=section&id=7.2.2%20Non-Medical%20Business) The non-medical business accounted for 10.0% of total revenue, with revenue of RMB 80.6 million for the period, a 27.7% year-on-year decrease, and a gross profit margin decline of 2.9 percentage points to 14.2%, mainly due to structural adjustments in the sales product portfolio - Revenue Contribution: Accounted for **10.0%** of total revenue[55](index=55&type=chunk) - Revenue: **RMB 80.6 million**, a year-on-year decrease of **27.7%**[55](index=55&type=chunk) - Gross Profit Margin: Decreased by **2.9 percentage points** to **14.2%**, primarily due to structural adjustments in the sales product portfolio[55](index=55&type=chunk) - Business Content: Manufacturing, marketing, distribution, and sales of Fujifilm professional and minilab color photographic paper, industrial imaging products (non-destructive testing X-ray film and printed circuit board film), and own-brand "Yes!Star" non-destructive testing X-ray film[55](index=55&type=chunk) [Outlook](index=23&type=section&id=7.3%20Outlook) China's in-vitro diagnostic industry is projected to grow at a CAGR of 5-8% over the next five years, reaching nearly RMB 165.0 billion by 2029, driven by an aging population, chronic disease management, early diagnosis awareness, and expanded medical insurance coverage, despite challenges from intensified market competition and product homogenization - Industry Growth: China's in-vitro diagnostic market is expected to grow at a CAGR of **5-8%** from 2024 to 2029, potentially reaching **RMB 165.0 billion** by 2029[56](index=56&type=chunk) - Growth Drivers: Aging population, demand for chronic disease management, increased awareness of early diagnosis and screening, expanded medical insurance coverage, and the promotion of molecular diagnostics and genetic testing in precision medicine and personalized treatment[56](index=56&type=chunk) - Challenges: Intensified market competition, product homogenization, and price competition leading to downward pressure on profit margins[57](index=57&type=chunk) [Financial Review](index=24&type=section&id=7.4%20Financial%20Review) The Group maintains a healthy liquidity position with significantly increased cash and cash equivalents, improved current and gearing ratios, and substantial reductions in selling and distribution expenses, administrative expenses, and finance costs due to cost control and preference share redemption, while foreign exchange risk remains negligible [Liquidity and Financial Resources](index=24&type=section&id=7.4.1%20Liquidity%20and%20Financial%20Resources) During the period, the Group's cash and cash equivalents increased from approximately RMB 93.8 million as of December 31, 2024, to approximately RMB 249.4 million, primarily due to optimized cost management, recovery of trade receivables, and reduced inventory levels, with current bank and other borrowings totaling approximately RMB 246.0 million - Cash and Cash Equivalents: Increased from **RMB 93.8 million** to **RMB 249.4 million**[58](index=58&type=chunk) - Reasons for Increase: Optimized cost management, reduced unnecessary operating expenses, employee and finance costs, as well as recovery of trade receivables and decreased inventory levels[58](index=58&type=chunk) - Current Borrowings: Approximately **RMB 246.0 million**[58](index=58&type=chunk) [Current Ratio and Gearing Ratio](index=24&type=section&id=7.4.2%20Current%20Ratio%20and%20Gearing%20Ratio) As of June 30, 2025, the current ratio was approximately 1.44 (December 31, 2024: 1.35), and the gearing ratio was approximately 2% (December 31, 2024: 29%), indicating a significant improvement in financial position - Current Ratio: **1.44** (December 31, 2024: **1.35**)[59](index=59&type=chunk) - Gearing Ratio: **2%** (December 31, 2024: **29%**)[60](index=60&type=chunk) [Selling and Distribution Expenses](index=25&type=section&id=7.4.3%20Selling%20and%20Distribution%20Expenses) Selling and distribution expenses decreased by 49.3% year-on-year to RMB 38.8 million, representing 4.8% of revenue, primarily due to enhanced internal control measures - Selling and Distribution Expenses: **RMB 38.8 million**, a year-on-year decrease of **49.3%**[61](index=61&type=chunk) - Percentage of Revenue: **4.8%** (2024: **6.0%**)[61](index=61&type=chunk) - Reason for Decrease: Enhanced internal controls to avoid unnecessary expenses[61](index=61&type=chunk) [Administrative Expenses](index=25&type=section&id=7.4.4%20Administrative%20Expenses) Administrative expenses decreased by 23.7% year-on-year to RMB 77.7 million, representing 9.7% of revenue, primarily benefiting from stringent cost management and a reduction in headcount - Administrative Expenses: **RMB 77.7 million**, a year-on-year decrease of **23.7%**[62](index=62&type=chunk) - Percentage of Revenue: **9.7%** (2024: **8.0%**)[62](index=62&type=chunk) - Reason for Decrease: Implementation of stringent measures to optimize cost management and reduce headcount[62](index=62&type=chunk) [Finance Costs](index=25&type=section&id=7.4.5%20Finance%20Costs) Finance costs sharply decreased by 69.3% year-on-year to RMB 6.5 million, primarily because no further interest payments were required after the redemption of preference shares last year, with interest-bearing loan rates ranging from 1.8% to 6.9% during the period - Finance Costs: **RMB 6.5 million**, a sharp year-on-year decrease of **69.3%**[63](index=63&type=chunk) - Reason for Decrease: Redemption of preference shares last year, eliminating the need for further interest payments[63](index=63&type=chunk) - Loan Interest Rates: Ranged from **1.8% to 6.9%** during the period (2024: **1.80% to 9.00%**)[63](index=63&type=chunk) [Foreign Exchange Risk](index=25&type=section&id=7.4.6%20Foreign%20Exchange%20Risk) The Group's foreign exchange risk is negligible as most of its revenue-generating activities are transacted in RMB, and it has not hedged its currency risk - Foreign Exchange Risk: Negligible, as most business is transacted in RMB[64](index=64&type=chunk) - Hedging: No agreements have been entered into to hedge currency risk[64](index=64&type=chunk) [Capital Structure and Employees](index=25&type=section&id=7.5%20Capital%20Structure%20and%20Employees) During the period, there were no changes to the Company's issued share capital and capital structure, while the number of employees decreased, leading to lower total staff costs, with remuneration policies designed to be competitive and provide benefits [Share Capital and Capital Structure](index=25&type=section&id=7.5.1%20Share%20Capital%20and%20Capital%20Structure) During the period, there were no changes to the Company's issued share capital and capital structure, with capital comprising ordinary shares and capital reserves - Share Capital Structure: No changes to issued share capital and capital structure[65](index=65&type=chunk) - Capital Composition: Ordinary shares and capital reserves[65](index=65&type=chunk) [Employees and Remuneration Policy](index=26&type=section&id=7.5.2%20Employees%20and%20Remuneration%20Policy) As of June 30, 2025, the Group had 479 employees (including directors), a decrease from 726 in the prior year, with total staff costs of RMB 73.3 million, and a remuneration policy designed for fair competition and providing benefits such as pension schemes - Number of Employees: **479** (2024: **726**)[67](index=67&type=chunk) - Total Staff Costs: **RMB 73.3 million** (2024: **RMB 81.0 million**)[67](index=67&type=chunk) - Remuneration Policy: Fairly competitive, based on skills, knowledge, performance, contribution, and market conditions, offering benefits such as pension insurance, unemployment insurance, maternity insurance, work injury insurance, medical insurance, and a central provident fund scheme[67](index=67&type=chunk) [Material Investments and Asset-Liability Related Matters](index=26&type=section&id=7.6%20Material%20Investments%20and%20Asset-Liability%20Related%20Matters) The Group's fixed-income investment products have matured and been partially recovered, with an increase in reversal of impairment losses on financial assets, no material securities investments held, and no significant future investment plans, while certain assets are pledged for bank loans and borrowings are guaranteed, with no other material adverse changes or contingent liabilities disclosed [Material Investments Held](index=26&type=section&id=7.6.1%20Material%20Investments%20Held) The Group previously held two one-year fixed-income investment products with principal amounts of US$3.7 million and US$4.4 million, which matured in 2023 and were not renewed, with a total of US$5.0 million recovered as of June 30, 2025 - Fixed-Income Investment Products: Two one-year fixed-income investment products (annual interest rate of **6%**) with principal amounts of **US$3.7 million** and **US$4.4 million**, which matured in 2023 and were not renewed[69](index=69&type=chunk) - Funds Recovered: As of June 30, 2025, a total of **US$5.0 million** has been recovered[70](index=70&type=chunk) [Reversal of Impairment Loss on Financial Assets](index=27&type=section&id=7.6.2%20Reversal%20of%20Impairment%20Loss%20on%20Financial%20Assets) During the period, the reversal of impairment loss on financial assets calculated using the expected credit loss method increased to RMB 19.1 million, primarily due to a reduction in impairment provisions for trade receivables - Reversal of Impairment Loss: **RMB 19.1 million** (2024: **RMB 12.4 million**)[71](index=71&type=chunk) - Primary Reason: Reduction in impairment provisions for trade receivables[71](index=71&type=chunk) [Securities Investments and Future Plans](index=27&type=section&id=7.6.3%20Securities%20Investments%20and%20Future%20Plans) The Group does not hold any material securities investments requiring disclosure and has no significant future plans for investments and capital assets as of June 30, 2025 - Securities Investments: No securities investments held that are valued at **5%** or more of total assets[72](index=72&type=chunk) - Future Plans: No significant future plans for investments and capital assets[73](index=73&type=chunk) [Material Acquisitions and Disposals](index=27&type=section&id=7.6.4%20Material%20Acquisitions%20and%20Disposals) During the period, there were no material acquisitions or disposals of subsidiaries and associated companies, nor any acquisitions involving financial performance commitments or guarantees - Acquisitions and Disposals: No material acquisitions or disposals of subsidiaries and associated companies during the period[74](index=74&type=chunk) - Performance Guarantees: No discloseable acquisitions involving financial performance commitments or guarantees during the period[75](index=75&type=chunk) [Pledge of Assets and Contingent Liabilities](index=27&type=section&id=7.6.5%20Pledge%20of%20Assets%20and%20Contingent%20Liabilities) As of June 30, 2025, the Group had pledged buildings with a net book value of approximately RMB 61.4 million to secure bank loans, and certain borrowings are guaranteed by non-controlling shareholders, independent third parties, and directors of subsidiaries, with no other material contingent liabilities apart from arbitration matters - Pledge of Assets: Buildings with a net book value of approximately **RMB 61.4 million** have been pledged to secure bank loans[76](index=76&type=chunk)[83](index=83&type=chunk) - Borrowing Guarantees: Certain borrowings are guaranteed by non-controlling shareholders, independent third parties, and directors of subsidiaries[83](index=83&type=chunk) - Contingent Liabilities: No other material contingent liabilities apart from arbitration matters[78](index=78&type=chunk) [Material Adverse Changes](index=28&type=section&id=7.6.6%20Material%20Adverse%20Changes) The Directors are not aware of any material adverse changes in the Group's financial or trading position since June 30, 2025, other than those disclosed in this announcement - Material Adverse Changes: The Directors are not aware of any material adverse changes in the Group's financial or trading position since June 30, 2025[79](index=79&type=chunk) [Other Information](index=28&type=section&id=VIII.%20Other%20Information) This section covers changes in the Company's principal place of business, arbitration matters, reaffirmation of dividend policy, competition and conflicts of interest, securities transactions, corporate governance, and report publication details [Change of Principal Place of Business](index=28&type=section&id=8.1%20Change%20of%20Principal%20Place%20of%20Business) The Company's principal place of business in Shanghai has changed its address effective April 15, 2025 - Shanghai Principal Place of Business: The address of the principal place of business in Shanghai has changed effective **April 15, 2025**[80](index=80&type=chunk) [Arbitration Matters](index=28&type=section&id=8.2%20Arbitration%20Matters) The Company has received a judgment from the Shanghai No. 2 Intermediate People's Court dismissing its application to set aside an arbitration award, and has fulfilled all payments to one of Shengshiyuan's vendors, with the Board believing the profit guarantee for the acquisition of a 70% equity interest in Shengshiyuan has been met - Arbitration Outcome: The Shanghai No. 2 Intermediate People's Court dismissed the Company's application to set aside the arbitration award[84](index=84&type=chunk) - Payment Fulfillment: The Company has fulfilled and settled all payments to one of Shengshiyuan's vendors[84](index=84&type=chunk) - Profit Guarantee: The Board believes that the profit guarantee related to the acquisition of a **70%** equity interest in Shengshiyuan has been fulfilled[85](index=85&type=chunk) [Reaffirmation of Dividend Policy](index=29&type=section&id=8.3%20Reaffirmation%20of%20Dividend%20Policy) The Board reaffirms its recommendation not to declare any interim dividend for the current period - Interim Dividend: The Board does not recommend the declaration of any interim dividend for the current period[86](index=86&type=chunk) [Competition and Conflicts of Interest](index=29&type=section&id=8.4%20Competition%20and%20Conflicts%20of%20Interest) During the period, no Directors, controlling shareholders, or substantial shareholders and their associates engaged in any business competing with the Group's business, nor were there any other conflicts of interest, apart from the Group's disclosed interests - Competition and Conflicts of Interest: No Directors, controlling shareholders, or substantial shareholders and their associates engaged in any business competing with the Group's business, nor were there any other conflicts of interest[87](index=87&type=chunk) [Securities Transactions and Corporate Governance](index=29&type=section&id=8.5%20Securities%20Transactions%20and%20Corporate%20Governance) The Company and its subsidiaries did not purchase, sell, or redeem any listed securities during the period, and the Company has adopted and complied with the Model Code for Securities Transactions by Directors, with the Board confirming adherence to all Corporate Governance Code provisions and the Audit Committee's review of the unaudited interim results [Purchase, Sale or Redemption of Listed Securities](index=29&type=section&id=8.5.1%20Purchase%2C%20Sale%20or%20Redemption%20of%20Listed%20Securities) During the period, 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 June 30, 2025 - Securities Transactions: No purchase, sale, or redemption of any of the Company's listed securities during the period[88](index=88&type=chunk) - Treasury Shares: No treasury shares held as of June 30, 2025[88](index=88&type=chunk) [Code of Conduct for Securities Transactions by Directors](index=29&type=section&id=8.5.2%20Code%20of%20Conduct%20for%20Securities%20Transactions%20by%20Directors) The Company has adopted the Model Code for Securities Transactions by Directors as set out in Appendix C3 of the Listing Rules, with all Directors providing written confirmation of compliance - Code of Conduct: The Model Code for Securities Transactions by Directors as set out in Appendix C3 of the Listing Rules has been adopted[89](index=89&type=chunk) - Compliance: All Directors have provided written confirmation of compliance with the Model Code[89](index=89&type=chunk) - Relevant Employees: The Board has adopted the Model Code to regulate securities dealings by relevant employees who may possess inside information, with no non-compliance noted during the period[90](index=90&type=chunk) [Corporate Governance Practices](index=30&type=section&id=8.5.3%20Corporate%20Governance%20Practices) The Board believes that the Company has complied with all the Corporate Governance Code provisions as set out in Appendix C1 of the Listing Rules during the period - Corporate Governance: The Company has complied with all the Corporate Governance Code provisions as set out in Appendix C1 of the Listing Rules during the period[91](index=91&type=chunk) [Audit Committee](index=30&type=section&id=8.5.4%20Audit%20Committee) The Audit Committee, comprising three independent non-executive Directors, is responsible for reviewing and overseeing financial reporting, risk management, and internal control systems, and has reviewed the Group's unaudited interim results for the period, deeming them to be in compliance with applicable accounting principles and standards - Composition: Composed of three independent non-executive Directors (Mr. Zhao Ziwei, Mr. Zeng Jinsong, Mr. Kuang Xiangfan)[92](index=92&type=chunk) - Responsibilities: Reviewing and overseeing the financial reporting system, risk management, and internal control systems[92](index=92&type=chunk) - Interim Results Review: The interim results for the period are unaudited but have been reviewed by the Audit Committee and are considered to be in compliance with applicable accounting principles and standards[92](index=92&type=chunk) [Publication of Report](index=31&type=section&id=8.6%20Publication%20of%20Report) This interim results announcement has been published on the HKEX website and the Company's website, with the interim report containing information required by Appendix D2 of the Listing Rules to be dispatched to shareholders and published on the website in due course - Announcement Publication: The interim results announcement has been published on the HKEX website and the Company's website[93](index=93&type=chunk) - Interim Report: The interim report, containing information required by Appendix D2 of the Listing Rules, will be dispatched to shareholders and published on the website in due course[93](index=93&type=chunk)

[Financial Summary](index=1&type=section&id=Financial%20Summary) The Group's revenue and gross profit significantly increased, but the loss attributable to owners of the Company widened, leading to an expanded basic loss per share | Metric | Six Months Ended June 30, 2025 (HK$ thousand) | Change Rate | | :--- | :--- | :--- | | Revenue | 289,300 | +60.9% | | Gross Profit | 203,200 | +80.5% | | Loss attributable to owners of the Company | (507,100) | Loss widened | | Basic loss per share | (1.59) HK$ | Loss widened | [Interim Condensed Consolidated Financial Statements](index=2&type=section&id=Interim%20Condensed%20Consolidated%20Financial%20Statements) [Interim Condensed Consolidated Statement of Profit or Loss](index=2&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss) For the six months ended June 30, 2025, the Group's revenue grew significantly, but the loss attributable to owners of the Company expanded substantially due to fair value loss on convertible bonds and other factors Interim Condensed Consolidated Statement of Profit or Loss Key Data | Metric | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change | | :--- | :--- | :--- | :--- | | Total Revenue | 289,291 | 179,830 | Increased 60.9% | | Gross Profit | 203,195 | 112,551 | Increased 80.5% | | Other income | 23,986 | 49,175 | Decreased 51.2% | | Fair value change of investment properties | 3,525 | (76,944) | Turned from loss to profit | | Fair value gain/(loss) on other financial assets at fair value through profit or loss | 17,815 | (38,745) | Turned from loss to profit | | Fair value loss on convertible bonds | (497,928) | — | New loss incurred | | Loss for the period | (495,855) | (151,121) | Loss widened | | Loss attributable to owners of the Company | (507,105) | (150,515) | Loss widened | | Basic loss per share | (1.59) HK$ | (0.47) HK$ | Loss widened | [Interim Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=3&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) The total comprehensive loss for the period significantly narrowed, primarily due to a substantial increase in fair value gain on equity instruments at fair value through other comprehensive income Interim Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income Key Data | Metric | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change | | :--- | :--- | :--- | :--- | | Loss for the period | (495,855) | (151,121) | Loss widened | | Fair value gain/(loss) on equity instruments at fair value through other comprehensive income | 371,665 | (264,747) | Turned from loss to profit | | Other comprehensive income/(loss) for the period | 480,618 | (274,733) | Turned from loss to profit | | Total comprehensive loss for the period | (15,237) | (425,854) | Loss significantly narrowed | | Total comprehensive (loss)/income attributable to owners of the Company | (115,200) | (367,049) | Loss narrowed | [Interim Condensed Consolidated Statement of Financial Position](index=4&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the Group's total assets and current liabilities both significantly increased, while net assets slightly decreased, reflecting the impact of business combinations and financing activities Interim Condensed Consolidated Statement of Financial Position Key Data | Metric | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | Change | | :--- | :--- | :--- | :--- | | Total non-current assets | 11,119,604 | 10,659,550 | Increased 4.3% | | Total current assets | 8,591,105 | 5,931,538 | Increased 44.8% | | Total current liabilities | 5,725,186 | 3,027,870 | Increased 89.1% | | Total non-current liabilities | 3,285,315 | 2,787,089 | Increased 17.9% | | Net assets | 10,700,208 | 10,776,129 | Decreased 0.7% | | Total equity | 10,700,208 | 10,776,129 | Decreased 0.7% | [Notes to the Interim Condensed Consolidated Financial Information](index=6&type=section&id=Notes%20to%20the%20Interim%20Condensed%20Consolidated%20Financial%20Information) [1 General Information](index=6&type=section&id=1%20General%20Information) The Company has changed its name to Z Fin Limited, shifting its business focus to FinTech investment and management while retaining property development, property management, property investment, and financing services - Company name changed from "Sinolink Worldwide Holdings Limited" to "Z Fin Limited", with registration completed on August 18 and August 27, 2025[9](index=9&type=chunk) - The Group's principal activities increasingly focus on FinTech investment and management, alongside property development, property management, property investment, and financing services[9](index=9&type=chunk) [2 Basis of Preparation](index=6&type=section&id=2%20Basis%20of%20Preparation) This interim condensed consolidated financial information is prepared in accordance with HKAS 34 "Interim Financial Reporting" issued by the HKICPA and should be read in conjunction with the annual consolidated financial statements - This interim condensed consolidated financial information is prepared in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting" issued by the Hong Kong Institute of Certified Public Accountants[11](index=11&type=chunk) - This interim condensed consolidated financial information does not include all the notes normally included in an annual consolidated financial statement and should be read in conjunction with the annual consolidated financial statements for the year ended December 31, 2024[11](index=11&type=chunk) [3 Accounting Policies](index=7&type=section&id=3%20Accounting%20Policies) The Group's accounting policies are consistent with the previous financial year, with exceptions only for income tax estimates and the adoption of new/revised standards like HKAS 21 (Amendment) Lack of Exchangeability - The accounting policies applied are consistent with those applied in the previous financial year and the corresponding interim reporting period, except for income tax estimates and the adoption of new and revised standards[12](index=12&type=chunk) - The Group has adopted HKAS 21 (Amendment) Lack of Exchangeability, which did not require changes to accounting policies or retrospective adjustments[13](index=13&type=chunk)[14](index=14&type=chunk) [4 Revenue and Segment Information](index=7&type=section&id=4%20Revenue%20and%20Segment%20Information) The Group's revenue primarily derives from property management fees, rental income, interest from financing services, and other services, all originating from China; property investment revenue significantly increased, while financing services revenue decreased - All of the Group's revenue is derived from the People's Republic of China ("PRC")[15](index=15&type=chunk) Revenue Source Analysis | Revenue Source | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change | | :--- | :--- | :--- | :--- | | Property management fee income | 66,537 | 56,829 | Increased 17.1% | | Others (contracts with customers) | 24,907 | 32,821 | Decreased 24.2% | | Rental income | 190,506 | 80,338 | Increased 137.1% | | Interest income from financing services business | 7,341 | 9,842 | Decreased 25.4% | | **Total Revenue** | **289,291** | **179,830** | **Increased 60.9%** | Revenue and Results Analysis by Reportable and Operating Segment (Six Months Ended June 30, 2025) | Segment | Revenue (HK$ thousand) | Segment Results (HK$ thousand) | | :--- | :--- | :--- | | Financing services | 7,341 | 5,543 | | Property investment | 190,506 | 91,491 | | Property management | 66,537 | (3,603) | | Property development | — | (2,994) | | Others | 24,907 | (23,886) | | **Total** | **289,291** | **66,551** | Revenue and Results Analysis by Reportable and Operating Segment (Six Months Ended June 30, 2024) | Segment | Revenue (HK$ thousand) | Segment Results (HK$ thousand) | | :--- | :--- | :--- | | Financing services | 9,842 | 6,831 | | Property investment | 80,338 | (5,870) | | Property management | 56,829 | 4,166 | | Property development | — | (926) | | Others | 32,821 | 2,429 | | **Total** | **179,830** | **6,630** | [5 Other Income and Net Other Losses](index=10&type=section&id=5%20Other%20Income%20and%20Net%20Other%20Losses) Other income significantly decreased this period, mainly due to reduced interest income from bank deposits and pledged deposits; concurrently, net exchange loss narrowed substantially, leading to a reduction in net other losses Other Income and Net Other Losses Analysis | Metric | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change | | :--- | :--- | :--- | :--- | | **Other Income** | | | | | Dividends from financial assets at fair value through profit or loss | 7,913 | 9,481 | Decreased 16.6% | | Interest income from bank deposits | 10,371 | 15,887 | Decreased 34.7% | | Interest income from pledged deposits | 2,924 | 20,386 | Decreased 85.6% | | Others | 2,778 | 3,421 | Decreased 18.7% | | **Total Other Income** | **23,986** | **49,175** | **Decreased 51.2%** | | **Net Other Losses** | | | | | Net exchange loss | (3,850) | (32,006) | Loss narrowed 88.0% | | **Total Net Other Losses** | **(3,850)** | **(31,334)** | **Loss narrowed 87.7%** | [6 Finance Costs](index=10&type=section&id=6%20Finance%20Costs) Finance costs slightly increased this period, primarily due to higher interest on borrowings, while interest on lease liabilities and rental deposits received decreased Finance Costs Analysis | Metric | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change | | :--- | :--- | :--- | :--- | | Interest on borrowings | 52,129 | 48,763 | Increased 6.9% | | Interest on lease liabilities | 129 | 185 | Decreased 30.2% | | Interest on rental deposits received | 602 | 634 | Decreased 5.0% | | **Total Finance Costs** | **52,860** | **49,582** | **Increased 6.6%** | [7 Income Tax Expense](index=11&type=section&id=7%20Income%20Tax%20Expense) Income tax expense significantly increased this period, mainly due to substantial growth in PRC withholding income tax and deferred income tax, while no provision was made for Hong Kong profits tax due to the absence of assessable profits Income Tax Expense Analysis | Metric | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change | | :--- | :--- | :--- | :--- | | PRC Enterprise Income Tax | 30,530 | 33,637 | Decreased 9.2% | | PRC withholding income tax | 15,766 | 7,921 | Increased 99.0% | | Underprovision of PRC Enterprise Income Tax in prior years | 247 | — | New | | Deferred income tax | 6,779 | (32,515) | Turned from gain to expense | | **Total Income Tax Expense** | **53,322** | **9,043** | **Increased 489.6%** | - The PRC Enterprise Income Tax rate is **25%**[24](index=24&type=chunk) - No PRC Land Appreciation Tax was provided as the Group did not dispose of any properties during both periods[25](index=25&type=chunk) - Hong Kong profits tax rate is **16.5%**, but no provision was made as the Group had no assessable profits during both periods[27](index=27&type=chunk) [8 Expenses by Nature](index=12&type=section&id=8%20Expenses%20by%20Nature) This period saw increases in employee benefit expenses, depreciation, legal and professional fees, utilities, and repair and maintenance costs, while bank charges significantly decreased Expenses by Nature Analysis | Expense Item | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change | | :--- | :--- | :--- | :--- | | Employee benefit expenses | 96,471 | 64,023 | Increased 50.7% | | Depreciation of right-of-use assets | 2,467 | 1,438 | Increased 71.6% | | Depreciation of property, plant and equipment | 12,944 | 8,376 | Increased 54.5% | | Legal and professional fees | 5,810 | 3,719 | Increased 56.2% | | Utilities | 9,774 | 8,267 | Increased 18.2% | | Repair and maintenance | 14,477 | 7,553 | Increased 91.7% | | Bank charges | 3,875 | 7,945 | Decreased 51.2% | | Auditor's remuneration | 800 | 800 | No change | [9 Dividends](index=12&type=section&id=9%20Dividends) The Company's Board of Directors decided not to pay any interim dividend for the six months ended June 30, 2025, to conserve resources for business development - No dividends were paid, declared, or proposed by the Company during the interim period[29](index=29&type=chunk) - The Directors resolved not to pay any dividend for the interim period[29](index=29&type=chunk) [10 Loss Per Share](index=13&type=section&id=10%20Loss%20Per%20Share) Basic loss per share increased this period due to the widened loss attributable to owners of the Company, and diluted loss per share was equal to basic loss per share as potential dilutive shares had an anti-dilutive effect Loss Per Share Analysis | Metric | 2025 (HK$) | 2024 (HK$) | Change | | :--- | :--- | :--- | :--- | | Loss attributable to owners of the Company for the period (HK$ thousand) | 507,105 | 150,515 | Loss widened | | Weighted average number of ordinary shares in issue | 318,700,154 | 318,700,154 | No change | | Basic loss per share | (1.59) | (0.47) | Loss widened | | Diluted loss per share | (1.59) | (0.47) | Loss widened | - The weighted average number of ordinary shares used in calculating basic and diluted loss per share has been adjusted for the effect of the share consolidation, effective May 27, 2025[31](index=31&type=chunk) - Diluted loss per share is equal to basic loss per share as the dilutive effect of convertible bonds, share options, and investments accounted for using the equity method (ZA International) was anti-dilutive[32](index=32&type=chunk) [11 Changes in Property, Plant and Equipment](index=13&type=section&id=11%20Changes%20in%20Property%2C%20Plant%20and%20Equipment) Acquisitions of property, plant and equipment increased this period, but no new impairment or reversal of impairment was recognized for hotel buildings, with cumulative impairment remaining unchanged Acquisitions of Property, Plant and Equipment | Metric | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change | | :--- | :--- | :--- | :--- | | Acquisitions of property, plant and equipment | 3,812 | 2,114 | Increased 80.3% | - As of June 30, 2025, the Group had recognized cumulative impairment of HK$58,882,000 for hotel buildings and related building improvements, with no impairment or reversal of impairment recognized during the period[33](index=33&type=chunk) [12 Investment Properties](index=14&type=section&id=12%20Investment%20Properties) The carrying amount of investment properties increased this period due to fair value changes and exchange rate adjustments, with fair value measurements assessed by independent professional valuers and classified as Level 3 in the fair value hierarchy Changes in Carrying Amount of Investment Properties | Metric | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change | | :--- | :--- | :--- | :--- | | Carrying amount at beginning of period | 6,290,164 | 2,285,002 | Increased 175.3% | | Fair value change of investment properties | 3,525 | (76,944) | Turned from loss to profit | | Exchange rate adjustments | 49,632 | (17,183) | Turned from loss to profit | | Carrying amount at end of period | 6,343,321 | 2,190,875 | Increased 189.5% | - The fair value of investment properties is assessed by independent qualified professional valuers and classified as Level 3 in the fair value hierarchy[34](index=34&type=chunk)[35](index=35&type=chunk) [13 Investments Accounted for Using the Equity Method](index=14&type=section&id=13%20Investments%20Accounted%20for%20Using%20the%20Equity%20Method) Investments accounted for using the equity method slightly increased this period, primarily from ZA International's loss and other comprehensive income, while the prior period saw a gain from the dilution of ZA International's equity Investments Accounted for Using the Equity Method | Metric | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | Change | | :--- | :--- | :--- | :--- | | Cost of unlisted investments accounted for using the equity method | 3,026,050 | 3,024,367 | Increased 0.1% | | Share of post-acquisition results and dilution gain | (732,489) | (758,849) | Loss narrowed 3.5% | | **Total** | **2,293,561** | **2,265,518** | **Increased 1.2%** | - The Group's share of loss and other comprehensive income from investments accounted for using the equity method primarily came from ZA International, amounting to **HK$11,545,000** and **HK$26,503,000** respectively in the first half of 2025[38](index=38&type=chunk) - In the first half of 2024, a gain of approximately **HK$56,379,000** arose from the dilution of the Group's equity interest in ZA International due to ZA International issuing shares to other shareholders[38](index=38&type=chunk) [14 Loans Receivable](index=15&type=section&id=14%20Loans%20Receivable) Total loans receivable decreased this period, with a slight increase in loss allowance; the Group manages credit risk by individually assessing debtors and adjusting loss rates Loans Receivable Analysis | Metric | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | Change | | :--- | :--- | :--- | :--- | | Loans receivable | 365,508 | 390,022 | Decreased 6.2% | | Less: Loss allowance | (62,342) | (60,259) | Increased 3.5% | | **Total** | **303,166** | **329,763** | **Decreased 8.1%** | | Non-current | 1,246 | 1,079 | Increased 15.5% | | Current | 301,920 | 328,684 | Decreased 8.2% | - Loss rates ranging from **0.16% to 30.53%** (December 31, 2024: 0.11% to 24.72%) are applied to debtors[39](index=39&type=chunk) - Impairment loss allowance of **HK$1,147,000** was recognized this period (first half of 2024: HK$2,180,000), a decrease of approximately **47.4%**[39](index=39&type=chunk) - Subsequent to the reporting period, a entrusted loan of **RMB100 million** had its maturity date extended to August 12, 2026, secured by a share pledge, and another entrusted loan of **RMB50 million** was repaid on August 13, 2025[41](index=41&type=chunk) [15 Properties Held for Sale](index=16&type=section&id=15%20Properties%20Held%20for%20Sale) Completed properties held for sale slightly increased this period, all located in China and expected to be sold within the normal operating cycle Properties Held for Sale | Metric | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | Change | | :--- | :--- | :--- | :--- | | Completed properties held for sale | 3,043,756 | 2,956,253 | Increased 2.9% | - The Group's completed properties held for sale are all located in the PRC and are expected to be completed and available for sale within the normal operating cycle[40](index=40&type=chunk) [16 Trade and Other Receivables, Deposits and Prepayments](index=17&type=section&id=16%20Trade%20and%20Other%20Receivables%2C%20Deposits%20and%20Prepayments) Total trade and other receivables, deposits, and prepayments decreased this period, mainly due to a significant reduction in interest receivable from bank deposits and pledged bank deposits Trade and Other Receivables, Deposits and Prepayments Analysis | Metric | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | Change | | :--- | :--- | :--- | :--- | | Net trade receivables from property management and property investment businesses | 10,166 | 5,771 | Increased 76.1% | | Interest receivable from bank deposits and pledged bank deposits | 24,972 | 79,504 | Decreased 68.6% | | Rental receivables | 91,154 | 79,723 | Increased 14.3% | | Other receivables, deposits and prepayments | 39,140 | 58,324 | Decreased 32.9% | | Tax reserve certificates | 158,399 | 158,399 | No change | | **Total** | **323,831** | **381,721** | **Decreased 15.2%** | Ageing Analysis of Trade Receivables (Net of Credit Loss Allowance) | Ageing | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | Change | | :--- | :--- | :--- | :--- | | 0 to 60 days | 8,289 | 4,930 | Increased 68.1% | | 61 to 180 days | 1,538 | 688 | Increased 123.5% | | 181 days and above | 339 | 153 | Increased 121.6% | | **Total** | **10,166** | **5,771** | **Increased 76.1%** | - The Group has applied the simplified approach for expected credit loss provisions under HKFRS 9 "Financial Instruments" and considers the expected credit losses on trade receivables not significant[43](index=43&type=chunk) [17 Equity Instruments at Fair Value Through Other Comprehensive Income](index=18&type=section&id=17%20Equity%20Instruments%20at%20Fair%20Value%20Through%20Other%20Comprehensive%20Income) Total equity instruments at fair value through other comprehensive income significantly increased this period, primarily due to the rising fair value of ZhongAn Online equity securities, which are designated for long-term strategic purposes Equity Instruments at Fair Value Through Other Comprehensive Income | Metric | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | Change | | :--- | :--- | :--- | :--- | | Equity securities of ZhongAn Online P & C Insurance Co., Ltd. | 1,479,060 | 950,940 | Increased 55.5% | | Unlisted fund investments in PRC and overseas | 58,709 | 67,884 | Decreased 13.5% | | Unlisted equity securities in Hong Kong and PRC | 3,288 | 5,741 | Decreased 42.7% | | **Total** | **1,541,057** | **1,024,565** | **Increased 50.4%** | - The Group has made an irrevocable election to designate these equity instrument investments at fair value through other comprehensive income, as they are not held for trading but for long-term strategic purposes[44](index=44&type=chunk) [18 Other Financial Assets at Fair Value Through Profit or Loss](index=19&type=section&id=18%20Other%20Financial%20Assets%20at%20Fair%20Value%20Through%20Profit%20or%20Loss) Total other financial assets at fair value through profit or loss increased this period, mainly driven by growth in unlisted fund investments in China Other Financial Assets at Fair Value Through Profit or Loss | Metric | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | Change | | :--- | :--- | :--- | :--- | | Listed equity securities in Hong Kong | 5,407 | 2,007 | Increased 169.4% | | Listed equity securities in PRC | 9,172 | 8,823 | Increased 3.9% | | Unlisted fund investments in PRC | 192,524 | 175,765 | Increased 9.5% | | Unlisted fund investments in overseas | 98,332 | 98,989 | Decreased 0.7% | | **Total** | **305,435** | **285,584** | **Increased 7.0%** | [19 Trade and Other Payables, Deposits Received and Accrued Expenses](index=19&type=section&id=19%20Trade%20and%20Other%20Payables%2C%20Deposits%20Received%20and%20Accrued%20Expenses) Total trade and other payables, deposits received, and accrued expenses significantly increased this period, primarily due to new deposits received for assets classified as held for sale and growth in rental deposits received Trade and Other Payables, Deposits Received and Accrued Expenses Analysis | Metric | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | Change | | :--- | :--- | :--- | :--- | | Trade payables | 35,008 | 31,909 | Increased 9.7% | | Accrued expenses for construction works | 383,928 | 430,527 | Decreased 10.9% | | Rental deposits received | 166,143 | 126,890 | Increased 30.9% | | Deposits received for assets classified as held for sale | 915,057 | — | New | | Rental received in advance | 39,362 | 37,525 | Increased 4.9% | | Management fee deposits received | 34,291 | 35,552 | Decreased 3.6% | | Dividends payable | — | 111,231 | Decreased 100% | | Other tax payables | 36,304 | 40,473 | Decreased 10.3% | | Salaries and staff welfare payables | 64,501 | 56,304 | Increased 14.6% | | Other payables and accrued expenses | 88,762 | 82,160 | Increased 8.0% | | **Total** | **1,763,356** | **952,571** | **Increased 85.1%** | Ageing Analysis of Trade Payables | Ageing | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | Change | | :--- | :--- | :--- | :--- | | 0 to 90 days | 4,155 | 7,008 | Decreased 40.7% | | 91 to 180 days | 941 | 966 | Decreased 2.6% | | 181 to 360 days | 2,162 | 383 | Increased 464.5% | | Over 360 days | 27,750 | 23,552 | Increased 17.8% | | **Total** | **35,008** | **31,909** | **Increased 9.7%** | [20 Assets/(Liabilities) Classified as Held for Sale](index=20&type=section&id=20%20Assets%2F(Liabilities)%20Classified%20as%20Held%20for%20Sale) Total assets classified as held for sale slightly increased this period, primarily including an investment property expected to be sold in 2025, as well as assets and liabilities classified due to the transfer of school operating rights Assets/(Liabilities) Classified as Held for Sale | Metric | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | Change | | :--- | :--- | :--- | :--- | | Properties | 914,957 | 911,265 | Increased 0.4% | | Plant and equipment | 3,048 | — | New | | Cash and cash equivalents | 16,699 | — | New | | **Total assets classified as held for sale** | **934,704** | **911,265** | **Increased 2.6%** | | Liabilities classified as held for sale | (24,527) | — | New | - An investment property valued at **HK$914,957,000** is expected to be sold in 2025 and remains classified as an asset held for sale[48](index=48&type=chunk) - The operating rights and assets/liabilities of Shenzhen Luohu Baishida Primary School were previously classified as held for sale, but following the revocation of its operating license, the transfer agreement was rescinded, and it was subsequently agreed to be transferred to the Education Bureau free of charge after the reporting period[49](index=49&type=chunk) [21 Share Capital](index=21&type=section&id=21%20Share%20Capital) The share capital structure underwent significant changes this period due to capital reorganization and share consolidation, with adjustments to both authorized share capital and the number of issued ordinary shares, while the amount of issued and fully paid share capital remained unchanged Share Capital Changes | Metric | June 30, 2025 | December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Number of authorized ordinary shares | 7,500,000,000 | 150,000,000,000 | Decreased 95% | | Amount of authorized share capital (HK$ thousand) | 1,500,000 | 1,500,000 | No change | | Number of issued and fully paid ordinary shares | 318,700,154 | 6,374,003,096 | Decreased 95% | | Amount of issued and fully paid share capital (HK$ thousand) | 63,740 | 63,740 | No change | - The capital reorganization, effective July 5, 2024, involved capital reduction, capital decrease, and capital increase, reducing the par value per share from **HK$0.10 to HK$0.01**[51](index=51&type=chunk)[52](index=52&type=chunk) - The share consolidation, effective May 27, 2025, was based on consolidating every **20 shares** of HK$0.01 par value into **1 share** of HK$0.20 par value[52](index=52&type=chunk) [22 Bank Borrowings and Other Financial Liabilities](index=23&type=section&id=22%20Bank%20Borrowings%20and%20Other%20Financial%20Liabilities) Total bank borrowings and other financial liabilities significantly increased this period, primarily due to the drawdown of new syndicated loans, with a substantial portion of assets pledged as collateral Bank Borrowings and Other Financial Liabilities | Metric | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | Change | | :--- | :--- | :--- | :--- | | Bank borrowings – secured and repayable on demand | 4,528,343 | 2,717,641 | Increased 66.6% | | Other financial liabilities – unsecured | 40,100 | 39,217 | Increased 2.2% | | **Total** | **4,568,443** | **2,756,858** | **Increased 65.7%** | | Amounts classified as current liabilities | (2,475,463) | (1,025,140) | Increased 141.5% | | Amounts due after one year and classified as non-current liabilities | 2,092,980 | 1,731,718 | Increased 20.9% | - New syndicated loans of **RMB1,950,000,000** (approximately **HK$2,138,158,000**) were drawn down this period to repay existing syndicated loans[54](index=54&type=chunk) - The annual interest rate for RMB bank borrowings ranged from **2.34% to 4.05%** (December 31, 2024: 2.70% to 4.63%)[55](index=55&type=chunk) Pledged Assets | Pledged Assets | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | Change | | :--- | :--- | :--- | :--- | | Property, plant and equipment | 175,312 | 178,979 | Decreased 2.0% | | Investment properties | 4,601,958 | 4,574,338 | Increased 0.6% | | Completed properties held for sale | 2,163,810 | 2,102,462 | Increased 2.9% | | Assets classified as held for sale | 914,957 | 911,265 | Increased 0.4% | | Pledged bank deposits | 118,859 | 710,583 | Decreased 83.3% | | Trade receivables | 8,161 | 6,018 | Increased 35.6% | [23 Convertible Bonds](index=24&type=section&id=23%20Convertible%20Bonds) Fair value loss on convertible bonds significantly increased this period, primarily because they are classified as financial liabilities at fair value through profit or loss, and the controlling shareholder exercised conversion rights after the reporting period Fair Value of Convertible Bonds | Metric | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | Change | | :--- | :--- | :--- | :--- | | Financial liabilities at fair value through profit or loss – convertible bonds | 697,647 | 199,719 | Increased 249.3% | - The Company issued **HK$200,000,000** principal amount of three-year zero-coupon convertible bonds to the controlling shareholder on July 12, 2024[57](index=57&type=chunk)[58](index=58&type=chunk) - The conversion price was adjusted from **HK$0.085 to HK$1.70** per share after the share consolidation[58](index=58&type=chunk) - A fair value loss of **HK$497,928,000** on convertible bonds was recognized for the six months ended June 30, 2025[59](index=59&type=chunk) - On July 24, 2025, the controlling shareholder exercised the conversion rights, converting convertible bonds with a principal amount of **HK$200,000,000** into **117,647,058** ordinary shares[60](index=60&type=chunk) [24 Share Options](index=26&type=section&id=24%20Share%20Options) The Group has 2012 and 2022 share option schemes, but no share options were granted this period, and all share options under the 2012 scheme lapsed before the share consolidation - The Company has a 2012 Share Option Scheme and a 2022 Share Option Scheme, both with a term of **10 years**[61](index=61&type=chunk) - No share options were granted during the six months ended June 30, 2025[61](index=61&type=chunk) - All share options granted under the 2012 Share Option Scheme lapsed and expired before the share consolidation during the six months ended June 30, 2025[62](index=62&type=chunk) [Management Discussion and Analysis](index=28&type=section&id=Management%20Discussion%20and%20Analysis) [Macroeconomic and Industry Overview](index=28&type=section&id=Macroeconomic%20and%20Industry%20Overview) In the first half of 2025, the global economy faced geopolitical and economic uncertainties, but China's economy steadily recovered with increased policy support; the FinTech industry shows broad prospects, while the real estate market remains in an adjustment and transformation phase - The international situation is severe and complex, with geopolitical and economic uncertainties pressuring global financial markets, and major economies like the US beginning interest rate cut cycles[64](index=64&type=chunk) - China's domestic economy continued its steady recovery and upward trend, with the government strengthening policy support to stimulate consumption and stabilize the real estate market[64](index=64&type=chunk) - China's FinTech industry transaction value is projected to expand to **US$10.06 trillion** by 2030, with a compound annual growth rate of **15.67%**[64](index=64&type=chunk) - China's real estate market faces challenges, with the government actively optimizing housing policies, and is expected to remain in an adjustment and transformation phase in the second half of 2025[65](index=65&type=chunk) - China's inflation pressure is low, with CPI slightly increasing by **0.1%** year-on-year and PPI falling by **3.6%** year-on-year as of June 2025[65](index=65&type=chunk) [Business Review](index=29&type=section&id=Business%20Review) The Group actively responds to FinTech development, explores new economic models, and while maintaining real estate and financial services, increases investment and cooperation in FinTech; revenue and gross profit significantly grew this period, but loss attributable to owners of the Company expanded [Financial Services Business](index=29&type=section&id=Financial%20Services%20Business) The financial services business primarily provides financing solutions and consulting services; interest income decreased this period, but efforts are made to reduce credit risk through strict credit assessment and risk management - The financial services business primarily provides efficient financing solutions and various consulting services, with funding sourced from the Group's internal resources[67](index=67&type=chunk) Outstanding Loans Receivable Analysis | Category | June 30, 2025 (HK$ million) | % of Total | December 31, 2024 (HK$ million) | % of Total | | :--- | :--- | :--- | :--- | :--- | | Current | 301.9 | 99.6% | 328.7 | 99.7% | | Non-current | 1.3 | 0.4% | 1.1 | 0.3% | | **Total** | **303.2** | **100.0%** | **329.8** | **100.0%** | Interest Income from Financing Services Business | Item | 2025 (HK$ million) | 2024 (HK$ million) | Change | | :--- | :--- | :--- | :--- | | Interest income from entrusted loans | 3.6 | 3.5 | Increased 2.9% | | Interest income from other loans | 3.7 | 6.3 | Decreased 41.3% | | **Total Interest Income** | **7.3** | **9.8** | **Decreased 25.5%** | - Entrusted loans are unsecured, with a fixed annual interest rate of **5%** and a term of **1 to 2 years**[69](index=69&type=chunk) - The Group assesses the credit quality of potential customers through an internal credit rating system and takes effective measures to ensure timely recovery of outstanding balances[71](index=71&type=chunk) - Impairment loss allowance for loans receivable was approximately **HK$1.1 million** (first half of 2024: HK$2.2 million), a decrease of approximately **HK$1.1 million**[72](index=72&type=chunk) - AnAn Investment Management Limited holds SFC Type 1, Type 4, and Type 9 licenses, providing wealth management and asset management services[73](index=73&type=chunk) [Joint Venture - ZA International](index=33&type=section&id=Joint%20Venture%20-%20ZA%20International) ZA International's subsidiary Peak3 expanded its international tech solutions with new AI features and European market entry, while ZA Bank, a Hong Kong digital bank, achieved profitability with a net profit of HK$49 million and actively expanded retail wealth management and Web3 services, becoming Asia's first licensed bank to offer cryptocurrency trading to Hong Kong retail investors - Peak3 (a subsidiary of ZA International) completed significant updates to its Graphene core platform, expanding its business scope to commercial property and casualty insurance and group medical insurance, and launched several new AI features[76](index=76&type=chunk) - Peak3 initiated the construction of a new technology center in Madrid to support its growth plans in Europe and future expansion into Latin America[77](index=77&type=chunk) - ZA Bank (a subsidiary of ZA International) achieved a historic turnaround to profitability in the first half of 2025, with a net profit of **HK$49 million**[79](index=79&type=chunk) ZA Bank Key Financial Indicators for H1 2025 | Metric | Amount (HK$) | Year-on-Year Growth | | :--- | :--- | :--- | | Net income | 457 million | 82.1% | | Net interest income | 297 million | 42.8% | | Non-interest income | 160 million | 272.1% | | Net interest margin | 2.38% | Improved | | Cost-to-income ratio | 67% | Significantly improved | | Customer deposit balance | 21.10 billion | Increased 8.8% | | Total loan balance | 6.08 billion | Increased 2.5% | - ZA Bank became Asia's first licensed bank to offer cryptocurrency trading services to Hong Kong retail investors and actively embraced Web3 opportunities, becoming a banking partner for over **300 Web3 companies** in Hong Kong[80](index=80&type=chunk)[82](index=82&type=chunk) [Property Leasing](index=35&type=section&id=Property%20Leasing) Rental income significantly increased this period, primarily due to the business combination completed in December 2024; key leased properties include "Xi Hui Cheng", "Baishida Garden Phases 1-4", "Baishida Building", and "Rockbund Art Museum" - For the six months ended June 30, 2025, total rental income was **HK$190.5 million**, an increase of **137.1%** from the same period last year, mainly attributable to the consolidation of income from business combinations[83](index=83&type=chunk) - The occupancy rate of "Baishida Building" office space is approximately **32%**, and the occupancy rate of "Le Hotel" remains low; management is implementing cost control and service improvement measures to enhance performance[84](index=84&type=chunk) - Some properties of the "Rockbund Art Museum" project were sold in 2024, with the remaining properties expected to be sold in the second half of 2025 and currently presented as "assets classified as held for sale"[85](index=85&type=chunk)[86](index=86&type=chunk) [Completed Properties Held for Sale](index=36&type=section&id=Completed%20Properties%20Held%20for%20Sale) The Group holds the "Ningguo Mansion" residential project in Shanghai, consisting of 11 Chinese-Western courtyard houses, which is being gradually launched to the market - The "Ningguo Mansion" project is located in Changning District, Shanghai, comprising **11 Chinese-Western courtyard houses**, and is being gradually launched to the market in response to market changes[87](index=87&type=chunk) [Other Businesses](index=37&type=section&id=Other%20Businesses) The Group's other businesses include providing property, facility, and project management services, with a slight increase in turnover this period - For the six months ended June 30, 2025, the turnover of the Group's other businesses was **HK$91.4 million**, an increase of **2.0%** from the same period last year[88](index=88&type=chunk) [Significant Investments](index=37&type=section&id=Significant%20Investments) The Group's significant investments primarily consist of equity securities of ZhongAn Online P & C Insurance Co., Ltd., which saw significant fair value growth, and ZhongAn Online performed well this period Significant Investments - ZhongAn Online | Metric | June 30, 2025 | | :--- | :--- | | Number of shares held | 81,000,000 | | Percentage of shares held | 5.51% | | Unrealized fair value gain recognized in other comprehensive income | HK$508,504 thousand | | Investment cost | HK$92,000 thousand | | Market value | HK$1,479,060 thousand | | Approximate percentage of total assets | 7.50% | - ZhongAn Online's total gross written premiums were approximately **RMB16.661 billion**, an increase of approximately **9.3%** compared to the same period in 2024; net profit attributable to owners of the parent company was approximately **RMB668 million**, compared to **RMB55 million** in the same period in 2024[90](index=90&type=chunk) - The Group believes the FinTech industry has the greatest development potential, with technology applications continuously improving financial service efficiency and product selection[92](index=92&type=chunk) [Convertible Bonds](index=38&type=section&id=Convertible%20Bonds) The net proceeds from the Group's convertible bonds have been partially used to repay bank loans and for general working capital, with the remaining portion to be used for business development Use of Net Proceeds from Convertible Bonds | Intended Use | Net Proceeds (HK$ million) | Amount Used for the Year Ended December 31, 2024 (HK$ million) | Unused Net Proceeds as of June 30, 2025 (HK$ million) | | :--- | :--- | :--- | :--- | | Business development of the Group | 119.00 | — | 119.00 | | Partial repayment of outstanding bank loans | 59.50 | 59.50 | — | | General working capital | 19.84 | 19.84 | — | | **Total** | **198.34** | **79.34** | **119.00** | - The Group is still identifying new investment opportunities for business development and expects to utilize the net proceeds before March 2026[93](index=93&type=chunk) [Outlook](index=39&type=section&id=Outlook) Looking ahead, the Group anticipates continued global economic improvement and strengthened macroeconomic policy support in China; the Group will focus on growth opportunities in FinTech, Web3, and digital asset markets, while prudently managing traditional businesses to build sustainable long-term value - The global economic environment is expected to continue improving, with developed economies likely to extend interest rate cut cycles, and China's macroeconomic policy support will be further strengthened[94](index=94&type=chunk) - FinTech, Web3, and digital asset markets will show distinct development trajectories, with digital RMB integrating deeper into economic activities, and Hong Kong solidifying its position as a leading digital asset hub[94](index=94&type=chunk) - The Group's strategic focus will remain on expanding its FinTech business, investing resources in developing innovative digital financial products, particularly in real-world assets and regulated cross-border payments[95](index=95&type=chunk) - The Group is actively preparing to upgrade the SFC Type 9 license held by its wholly-owned subsidiary, AnAn Investment, to manage investment portfolios focused on virtual assets[95](index=95&type=chunk) - For traditional businesses, the focus will be on enhancing resilience and realizing value, continuing to execute sales strategies for specific residential properties, and selectively exploring new low-risk financing service opportunities[95](index=95&type=chunk) [Financial Review](index=40&type=section&id=Financial%20Review) This period's financial performance was fully impacted by the December 2024 business combination, leading to significant growth in revenue and operating costs; loss attributable to owners of the Company widened, mainly due to fair value loss on convertible bonds and exchange losses, but fair value of investment properties turned from loss to profit - The Group's results for the six months ended June 30, 2025, fully consolidated the performance of the acquired business, leading to a **60.9%** increase in total revenue to **HK$289.3 million**[97](index=97&type=chunk) - Total operating costs increased by approximately **71.1%** to **HK$211.0 million**, primarily due to the consolidation of operating costs from the business combination[97](index=97&type=chunk) - A fair value gain on investment properties of approximately **HK$3.5 million** was recorded (first half of 2024: fair value loss of HK$76.9 million), mainly due to capital appreciation of commercial property portfolios and car parks[98](index=98&type=chunk) - Loss attributable to owners of the Company was **HK$507.1 million**, primarily due to the net effect of a fair value loss on convertible bonds of approximately **HK$497.9 million**, net exchange loss from RMB depreciation, and fair value of other financial assets turning from loss to profit[99](index=99&type=chunk)[100](index=100&type=chunk) Total Borrowings Analysis | Term | June 30, 2025 (HK$ million) | December 31, 2024 (HK$ million) | | :--- | :--- | :--- | | Within one year | 2,210.1 | 485.2 | | Within one year (including on demand clause) | 265.3 | 540.0 | | After one year but within two years | 69.7 | 102.6 | | After two years but within five years | 302.1 | 359.0 | | After five years | 1,721.2 | 1,270.1 | | **Total** | **4,568.4** | **2,756.9** | - As of June 30, 2025, the gearing ratio was **53.9%** (December 31, 2024: 25.6%), adjusted to **31.7%**, mainly affected by the drawdown of new syndicated loans and the timing difference in repaying existing loans[103](index=103&type=chunk) - The Group held cash and bank balances of **HK$4.2344 billion** and undrawn borrowing facilities of **HK$968.7 million**[104](index=104&type=chunk) - The majority of the Group's transactions are denominated and settled in RMB, with no hedging against potential foreign exchange risks[105](index=105&type=chunk) - Capital commitments amounted to **HK$41.9 million**, and contingent liabilities were **HK$1.6 million**[106](index=106&type=chunk)[107](index=107&type=chunk) [Post Balance Sheet Events](index=44&type=section&id=Post%20Balance%20Sheet%20Events) Several significant non-adjusting events occurred after the reporting period, including the company name change, controlling shareholder's conversion of convertible bonds, repayment of substantial bank borrowings, and the liquidation of Shenzhen Luohu Baishida Primary School, which will impact future financial statements - The Company's English name has been changed to "Z Fin Limited" to more accurately reflect the Group's strategic focus on the FinTech sector[108](index=108&type=chunk) - The controlling shareholder converted convertible bonds on July 25, 2025, resulting in the full cancellation of the bonds, reducing total liabilities and expanding the equity base, but a non-cash accounting loss of approximately **HK$476.5 million** will be recognized in the 2025 annual results[109](index=109&type=chunk)[110](index=110&type=chunk) - The Group completed the repayment of existing bank loans of approximately **HK$2.1731 billion** on July 1, 2025; if completed on June 30, 2025, total bank borrowings would have been **HK$2,395,303,000**[111](index=111&type=chunk) - The assets and liabilities of Shenzhen Luohu Baishida Primary School were transferred to the Shenzhen Luohu District Education Bureau free of charge on July 31, 2025, and the related financial impact will be reflected in the 2025 annual consolidated financial statements[112](index=112&type=chunk) [Other Information](index=45&type=section&id=Other%20Information) The Group decided not to declare an interim dividend and maintains stable employee and remuneration policies; the Company generally complies with listing rules on corporate governance, and the audit committee has reviewed the interim financial information - To conserve resources for the Group's business development, the Board of Directors did not declare an interim dividend for the six months ended June 30, 2025[113](index=113&type=chunk) - The Group employs approximately **697 full-time employees**, with remuneration based on market practice and individual performance, and provides benefits such as share options[114](index=114&type=chunk) - Neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed shares during the period[115](index=115&type=chunk) - The Company complies with the Corporate Governance Code set out in Appendix C1 of the Listing Rules, except that the Chairman and Chief Executive Officer are the same person, which the Board believes is in the best interest of the Group[116](index=116&type=chunk) - The Audit Committee has reviewed and discussed the unaudited interim condensed consolidated financial information for the six months ended June 30, 2025, and an independent review was performed by the external auditor, PricewaterhouseCoopers[118](index=118&type=chunk)

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不負責，對其 準確性或完整性亦不發表任何聲明，並明確表示，概不對本公告全部或任何部分內容而 產生或因依賴該等內容而引致的任何損失承擔任何責任。 SANVO Fine Chemicals Group Limited 三和精化集團有限公司 （於開曼群島註冊成立之有限公司） （股份代號：301） 二零二五年中期業績公告 三和精化集團有限公司（「本公司」）董事（「董事」）會（「董事會」）謹此公佈本公司及其附屬 公司（統稱「本集團」）截至二零二五年六月三十日止六個月之未經審計綜合業績。本公告 載有本公司截至二零二五年六月三十日止六個月之中期報告全文，符合香港聯合交易所 有限公司（「聯交所」）證券上市規則關於中期業績初步公告所載資料的相關規定。 中期報告之刊發 本中期業績公告將會刊載於聯交所網站( www.hkexnews.hk ) 及本公司網站 (www.sanvo.com)。本公司截至二零二五年六月三十日止六個月之中期報告將於適當 時候寄派予股東，並於上述網站可供查閱。 承董事會命 三和精化集團有限公司 主席、行政總裁兼執行董事 陳炳强先生 香港，二零二 ...

[Corporate Information](index=3&type=section&id=CORPORATE%20INFORMATION) This section details the company's board, committees, advisors, bankers, and registration particulars [Board of Directors](index=3&type=section&id=BOARD%20OF%20DIRECTORS) The Board of Directors experienced changes, with Mr. Wang Jian resigning as Chairman, Mr. Zhou Guangyan acting as Chairman, and Mr. Guo Peidong appointed President - Mr. Wang Jian resigned as Chairman on March 21, 2025, with Mr. Zhou Guangyan (Vice Chairman) serving as acting Chairman[6](index=6&type=chunk) - Mr. Guo Peidong was appointed President on March 21, 2025[6](index=6&type=chunk) [Committees](index=3&type=section&id=COMMITTEES) The company maintained an Audit Committee, Remuneration Committee, and Nomination Committee, with their chairmen and members specified - The Audit Committee is chaired by Mr. Yi Yongfa, with members including Mr. Xiao Chuangying and Dr. Tan Hongwei[7](index=7&type=chunk) - The Remuneration Committee is chaired by Dr. Tan Hongwei, with members including Mr. Zhou Guangyan, Mr. Guo Peidong, Mr. Xiao Chuangying, and Mr. Yi Yongfa[7](index=7&type=chunk)[8](index=8&type=chunk) - The Nomination Committee is chaired by Mr. Zhou Guangyan, with members including Mr. Guo Peidong, Mr. Xiao Chuangying, Mr. Yi Yongfa, and Dr. Tan Hongwei[9](index=9&type=chunk)[10](index=10&type=chunk) [Advisors and Bankers](index=4&type=section&id=ADVISORS_AND_BANKERS) The company appointed Messrs. Mak & Co. Solicitors as legal advisors, Rongcheng (Hong Kong) CPA Limited as auditors, and collaborates with major banks - Legal advisor is Messrs. Mak & Co. Solicitors (for Hong Kong law)[9](index=9&type=chunk)[10](index=10&type=chunk) - Auditor is Rongcheng (Hong Kong) CPA Limited[9](index=9&type=chunk)[10](index=10&type=chunk) - Principal bankers include Agricultural Bank of China, HSBC, and Bank of China[9](index=9&type=chunk)[10](index=10&type=chunk) [Company Details](index=5&type=section&id=COMPANY_DETAILS) The company is registered in Bermuda, with its Hong Kong head office in Shun Tak Centre and stock code 750 - Registered office is located at Clarendon House, Bermuda[11](index=11&type=chunk)[12](index=12&type=chunk) - Hong Kong head office and principal place of business are in China Merchants Tower, Shun Tak Centre, Hong Kong[11](index=11&type=chunk)[12](index=12&type=chunk) - The company's stock code is **750**[12](index=12&type=chunk) [Corporate Governance](index=6&type=section&id=CORPORATE%20GOVERNANCE) This section outlines the company's adherence to corporate governance standards, including directors' securities transactions and audit committee responsibilities [Corporate Governance Overview](index=6&type=section&id=OVERVIEW_GOVERNANCE) The company confirmed compliance with all applicable provisions and principles of the Corporate Governance Code in Appendix C1 of the HKEX Listing Rules - The company has adopted and complied with all applicable provisions and principles of the Corporate Governance Code set out in Appendix C1 of the Listing Rules[13](index=13&type=chunk)[15](index=15&type=chunk) [Standard Code for Directors' Securities Transactions](index=6&type=section&id=DIRECTORS_SECURITIES_TRANSACTIONS) The company adopted the Model Code in Appendix C3 of the Listing Rules, with all directors confirming compliance during the reporting period - The company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix C3 of the Listing Rules[14](index=14&type=chunk)[16](index=16&type=chunk) - All directors confirmed compliance with the Model Code and its code of conduct during the reporting period[14](index=14&type=chunk)[16](index=16&type=chunk) [Audit Committee Responsibilities](index=7&type=section&id=AUDIT_COMMITTEE_GOVERNANCE) The Audit Committee reviewed the Group's unaudited condensed interim financial information and results, which external auditors also reviewed - The Audit Committee has reviewed the Group's unaudited condensed interim financial information and interim results for the reporting period[17](index=17&type=chunk)[19](index=19&type=chunk) - Although the interim financial results are unaudited, they have been reviewed by external auditors in accordance with Hong Kong Standard on Review Engagements 2410[17](index=17&type=chunk)[19](index=19&type=chunk) [Listed Securities Transactions](index=7&type=section&id=LISTED_SECURITIES_TRANSACTIONS) Neither the company nor its subsidiaries purchased, sold, or redeemed any of its listed securities during the reporting period - Neither the company nor its subsidiaries purchased, sold, or redeemed any of the company's listed securities during the reporting period[18](index=18&type=chunk)[20](index=20&type=chunk) [Other Information](index=8&type=section&id=OTHER%20INFORMATION) This section covers employee and remuneration policies, share option schemes, share award plans, and interests of directors and substantial shareholders [Employees and Remuneration Policy](index=8&type=section&id=EMPLOYEES_AND_REMUNERATION_POLICY) As of June 30, 2025, the Group's headcount was 1,012, a decrease from 2024, with remuneration policies aligned to market practices and optimized resource allocation Changes in Total Employees | Date | Total Employees | | :--- | :------- | | June 30, 2025 | 1,012 | | December 31, 2024 | 1,072 | - The Group's remuneration policy aligns with local market practices, reviewed annually, covering salaries, provident funds, medical insurance, and performance bonuses[22](index=22&type=chunk)[26](index=26&type=chunk) - In the first half of 2025, the Group optimized human resource allocation through integration, organizational streamlining, and objective employee management[23](index=23&type=chunk)[26](index=26&type=chunk) [Share Option Scheme](index=8&type=section&id=SHARE_OPTION_SCHEME) The 2008 share option scheme terminated in 2018, but granted options remain valid until 2027; some options lapsed during the reporting period - The share option scheme was adopted on December 19, 2008, to incentivize or reward eligible individuals who have contributed to the Group[24](index=24&type=chunk)[25](index=25&type=chunk)[27](index=27&type=chunk)[28](index=28&type=chunk) - The scheme terminated on December 19, 2018, but granted options remain valid until May 21, 2027[41](index=41&type=chunk)[43](index=43&type=chunk) Details of Share Option Movements (Year Ended June 30, 2025) | Participant Name or Category | Balance as at January 1, 2025 | Granted during the period | Exercised during the period | Cancelled during the period | Lapsed during the period | Balance as at June 30, 2025 | Grant Date | Exercise Period | Exercise Price (HKD) | | :----------------- | :------------------- | :--------- | :--------- | :--------- | :--------- | :------------------- | :--------- | :--------- | :------------- | | Employees | 2,008,778 | – | – | – | 2,008,778 | – | 22/5/2015 | 22/5/2016–21/5/2025 | 11.65 | | Employees | 2,008,777 | – | – | – | 2,008,777 | – | 22/5/2015 | 22/5/2017–21/5/2025 | 11.65 | | Employees | 2,008,777 | – | – | – | 2,008,777 | – | 22/5/2015 | 22/5/2018–21/5/2025 | 11.65 | | Employees | 4,000,000 | – | – | – | – | 4,000,000 | 5/4/2017 | 5/4/2018–21/5/2027 | 3.55 | | Employees | 4,000,000 | – | – | – | – | 4,000,000 | 5/4/2017 | 5/4/2019–21/5/2027 | 3.55 | | Employees | 4,000,000 | – | – | – | – | 4,000,000 | 5/4/2017 | 5/4/2020–21/5/2027 | 3.55 | | **Total** | **18,026,332** | **–** | **–** | **–** | **6,026,332** | **12,000,000** | | | | [New Share Option Scheme](index=13&type=section&id=NEW_SHARE_OPTION_SCHEME) A new share option scheme, adopted in 2018 to incentivize employees and consultants, allows for 83,407,319 shares (3.31% of issued capital), with no options granted during the period - The new share option scheme was adopted on June 4, 2018, with a validity period of **10 years**[49](index=49&type=chunk)[53](index=53&type=chunk)[64](index=64&type=chunk)[69](index=69&type=chunk) - The scheme aims to reward directors, employees, consultants, or suppliers who have contributed to the Group[50](index=50&type=chunk)[51](index=51&type=chunk)[54](index=54&type=chunk)[55](index=55&type=chunk) Number of Shares under New Share Option Scheme | Metric | Number of Shares | | :--- | :------- | | Maximum number of shares issuable | **83,407,319 shares** | | Percentage of issued share capital | **3.31%** | - As of June 30, 2025, there were no outstanding, unexercised, vested, cancelled, or lapsed share options under the new share option scheme[65](index=65&type=chunk)[70](index=70&type=chunk) [Share Award Plan](index=15&type=section&id=SHARE_AWARD_PLAN) The 2020 share award plan, adopted to reward contributors, has a limit of 3% of issued shares (75,632,453 shares), with 18,132,453 awards available as of June 30, 2025 - The share award plan was adopted on December 29, 2020, with a validity period of **6 years**[67](index=67&type=chunk)[71](index=71&type=chunk)[87](index=87&type=chunk)[90](index=90&type=chunk) - The plan aims to recognize and reward contributions of eligible individuals to the Group's growth and development through awarded shares[68](index=68&type=chunk)[72](index=72&type=chunk) Share Award Plan Limit | Metric | Number of Shares | | :--- | :------- | | Plan limit (as % of total issued shares) | **3% (75,632,453 shares)** | | Awards available for grant as at June 30, 2025 | **18,132,453 shares** | | Maximum allocation per participant (as % of issued share capital) | **1%** | Details of Share Award Movements (Six Months Ended June 30, 2025) | Participant Name or Category | Balance as at January 1, 2025 (thousands) | Granted during the period (thousands) | Exercised during the period (thousands) | Cancelled during the period (thousands) | Lapsed during the period (thousands) | Balance as at June 30, 2025 (thousands) | Grant Date | Exercise Period | Exercise Price (HKD) | | :----------------- | :--------------------------- | :---------------- | :---------------- | :---------------- | :---------------- | :--------------------------- | :--------- | :------- | :------------- | | Director Mr. Chen Fushan | 1,400 | – | – | – | – | 1,400 | 29/12/2020 | N/A | N/A | | Employees | 54,600 | – | – | – | – | 54,600 | 29/12/2020 | N/A | N/A | [Directors' Rights and Interests](index=18&type=section&id=DIRECTORS_RIGHTS_AND_INTERESTS) No directors or associates were granted rights or options to subscribe for shares or debentures; Mr. Chen Fushan held a beneficial interest in 1,400,000 company shares as of June 30, 2025 - During the reporting period, no directors or their respective associates were granted any rights or options by the company or its subsidiaries to subscribe for shares or debentures[95](index=95&type=chunk)[96](index=96&type=chunk) Directors' Interests in the Company's Shares (As of June 30, 2025) | Name | Name of Company/Associated Corporation | Capacity | Nature of Interest | Number of Shares | Approximate Percentage of Shareholding | | :--------- | :---------------- | :------- | :------- | :--------- | :------------- | | Mr. Chen Fushan | The Company | Beneficial Interest | Long Position | **1,400,000** | **0.05%** | [Substantial Shareholders' Interests](index=20&type=section&id=SUBSTANTIAL_SHAREHOLDERS_INTERESTS) As of June 30, 2025, Water Development (HK) Holding Co., Limited and Water Development Group Co., Ltd. were substantial shareholders (74.09% combined), with Strong Eagle Holdings Ltd. and Mr. Liu Hongwei also holding significant equity Substantial Shareholders' Interests in Shares (As of June 30, 2025) | Shareholder | Long/Short Position | Capacity/Nature of Interest | Number of Shares | Approximate Percentage of Shareholding | | :----------------------- | :------ | :----------------- | :------------ | :------------- | | Water Development (HK) Holding Co., Limited | Long Position | Beneficial Owner | **1,687,008,585** | **66.92%** | | | Long Position | Person with security interest in shares | **180,755,472** | **7.17%** | | Water Development Group Co., Ltd. | Long Position | Interest in controlled corporation | **1,867,764,057** | **74.09%** | | Strong Eagle Holdings Ltd. | Long Position | Beneficial Owner | **203,802,750** | **8.01%** | | Mr. Liu Hongwei | Long Position | Interest in controlled corporation | **202,038,750** | **8.01%** | - Water Development (HK) Holding Co., Limited is **100%** beneficially owned by Water Development Group Co., Ltd[114](index=114&type=chunk) - Strong Eagle Holdings Ltd. is owned by Mr. Liu Hongwei, Mr. Sun Jinli, Mr. Xie Wen, Mr. Xiong Shi, and Mr. Zhuo Jianming, with **53%**, **15%**, **13%**, **10%**, and **9%** respectively[114](index=114&type=chunk) [Public Float and Director Changes](index=21&type=section&id=PUBLIC_FLOAT_AND_DIRECTOR_CHANGES) The company maintained a sufficient public float, with no significant changes in directors' information during the reporting period - As of the reporting date, the company maintained a public float of not less than **25%** as stipulated by the Listing Rules[108](index=108&type=chunk)[112](index=112&type=chunk) - For the six months ended June 30, 2025, and up to the reporting date, there were no changes in directors' information required to be disclosed under Rule 13.51B(1) of the Listing Rules[109](index=109&type=chunk)[113](index=113&type=chunk) [Management Discussion and Analysis](index=22&type=section&id=MANAGEMENT%20DISCUSSION%20AND%20ANALYSIS) This section provides an overview of the Group's financial performance, business operations, and future outlook, including key financial metrics and strategic initiatives [Results Overview](index=22&type=section&id=RESULTS_OVERVIEW) For the six months ended June 30, 2025, revenue grew **22.5%** to **RMB 1.685 billion** due to clean energy EPC, but a lower gross margin resulted in a loss attributable to owners Key Financial Indicators for H1 2025 | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | YoY Change (%) | | :------------- | :--------------------------- | :--------------------------- | :------------ | | Revenue | **1,685** | 1,376 | **22.5** | | Profit for the period | **2.37** | 11.14 | **(78.7)** | | Loss attributable to owners | **(19.18)** | (16.46) | **(16.5)** | | Earnings per share | **(0.008)** | (0.007) | **(14.3)** | | Overall gross profit margin | **21.0%** | 32.3% | **(11.3)pp** | | Net cash from operating activities | **158** | (128) | **223.3** | | Finance costs | - | - | **(14.6)** | - Revenue growth was primarily due to increased clean energy EPC revenue, stable operation of self-owned power stations, and the Group's expansion into solar and wind EPC projects[116](index=116&type=chunk)[117](index=117&type=chunk)[119](index=119&type=chunk) - The decline in gross profit margin was mainly due to intense market competition in new energy EPC and traditional glass curtain wall businesses, though it rebounded from the end of 2024[118](index=118&type=chunk)[120](index=120&type=chunk) - The contract value of newly signed contracts and ongoing uncompleted projects is approximately **RMB 4 billion**[122](index=122&type=chunk)[124](index=124&type=chunk) [Business Review](index=23&type=section&id=BUSINESS_OVERVIEW) The Group focused on core clean energy, achieving significant EPC revenue growth and overseas market expansion, while strategically reducing traditional curtain wall business and maintaining stable power sales - The Group consolidated its development, investment, construction, and operation of photovoltaic and wind power projects, expanding the influence of its Grade-A general contracting qualification in the EPC market[123](index=123&type=chunk)[125](index=125&type=chunk) Revenue by Category (Six Months Ended June 30, 2025) | Revenue Category | 2025 (RMB million) | 2024 (RMB million) | Increase/(Decrease) % | Revenue Share % | | :--------------- | :------------------- | :------------------- | :------------- | :-------- | | Clean Energy EPC | **835.2** | 342.8 | **143.6** | **49.6** | | Curtain Wall and Green Building | **197.2** | 227.4 | **(13.3)** | **11.7** | | Power Sales | **329.1** | 328.7 | **0.1** | **19.5** | | Product Sales | **303.8** | 419.7 | **(27.6)** | **18.0** | | Others | **19.6** | 57.3 | **(65.8)** | **1.2** | | **Total Revenue** | **1,684.9** | **1,375.9** | **22.5** | **100.0** | - Clean energy EPC revenue significantly increased by **143.6%**, primarily due to market development and increased project acquisition with the Grade-A general contracting qualification for power engineering construction[129](index=129&type=chunk)[131](index=131&type=chunk) - Overseas market expansion yielded fruitful results, including projects like Hong Kong Airport Green Building, Outlying Islands Photovoltaic Power Station, Sydney One Circular Quay, Japan Photovoltaic Power Station Cluster, and Angola Government Building Curtain Wall in Africa[130](index=130&type=chunk)[132](index=132&type=chunk) - Total revenue from curtain wall and green building business decreased by **13.3%**, mainly due to the Group's strategic adjustment to reduce the proportion of traditional curtain wall business to mitigate real estate market impact[134](index=134&type=chunk)[137](index=137&type=chunk) - Total power sales revenue slightly increased by **0.1%**, with self-owned power stations exceeding **1.27 GW** in capacity and power generation increasing by **6.8%** year-on-year to **509.3 million kWh**[135](index=135&type=chunk)[137](index=137&type=chunk) - Total product sales revenue decreased by **27.6%**, primarily due to a decline in solar product sales revenue[136](index=136&type=chunk)[137](index=137&type=chunk) [Financial Review](index=27&type=section&id=FINANCIAL_REVIEW) The Group saw revenue growth but lower gross margins, increased other income, slightly higher distribution expenses, and reduced administrative costs, maintaining strong liquidity, increased capital expenditure, optimized debt, and no significant contingent liabilities Revenue Composition (Six Months Ended June 30, 2025) | Revenue Category | Amount (RMB million) | Share % | | :--------------- | :------------------- | :---- | | Clean Energy EPC | **835.20** | **49.6** | | Curtain Wall and Green Building | **197.17** | **11.7** | | Power Sales | **329.09** | **19.5** | | Product Sales | **303.81** | **18.0** | | Other Businesses | **19.58** | **1.2** | | **Total Revenue** | **1,685** | **100** | Gross Profit Margin Changes | Category | Six Months Ended June 30, 2025 (%) | Year Ended December 31, 2024 (%) | Six Months Ended June 30, 2024 (%) | | :--------------- | :------------------------- | :------------------------ | :------------------------- | | Clean Energy EPC | **5.0** | 4.8 | 20.7 | | Curtain Wall and Green Building | **3.4** | 0.6 | 7.7 | | Subtotal for Construction Contracts | **4.7** | 4.1 | 15.5 | | Power Sales | **56.0** | 56.0 | 56.0 | | Product Sales | **37.9** | 28.1 | 34.2 | | Others | **34.0** | 67.0 | 50.4 | | **Overall Gross Profit Margin** | **21.0** | **16.8** | **32.3** | - Other income and gains increased by **RMB 20.41 million** or **66.2%** year-on-year, mainly from design consulting fee compensation, increased rental income, and bond interest rate reduction gains[144](index=144&type=chunk)[145](index=145&type=chunk) - Distribution expenses increased by **4.7%** year-on-year, while administrative expenses decreased by **4.7%** year-on-year, primarily due to human resource and cost control[146](index=146&type=chunk)[147](index=147&type=chunk)[151](index=151&type=chunk)[152](index=152&type=chunk) - As of June 30, 2025, the Group's outstanding bank and other loans were approximately **RMB 6.482 billion**, and outstanding bonds were approximately **RMB 1.518 billion**[148](index=148&type=chunk)[153](index=153&type=chunk) Debt Structure (As of June 30, 2025) | Category | Amount (RMB billion) | Interest Rate Range | | :--------------- | :----------------- | :----------- | | Bonds | **1.518** | **3.45%–3.80%** | | Bank Loans | **2.400** | **2.80%–4.85%** | | Finance Leases | **4.082** | **3.60%–6.37%** | | **Total** | **8.000** | | - Capital expenditure during the reporting period was **RMB 285 million**, primarily for the construction of self-owned power stations[149](index=149&type=chunk)[154](index=154&type=chunk) - During the reporting period, **48%** equity (representing **19.2%** effective interest) in Water Development Clean Energy Co., Ltd. was sold to Xinxing New Energy (Guangdong) Investment Co., Ltd[159](index=159&type=chunk)[163](index=163&type=chunk) - The Group has limited foreign currency risk, with its main operations conducted in RMB[161](index=161&type=chunk)[164](index=164&type=chunk) [Outlook](index=31&type=section&id=PROSPECT) The Group will optimize asset structure, enhance gross margins, reduce financial costs, and expand into overseas markets and new materials to achieve long-term strategic goals - The Group will focus on core businesses, deploying high-return, low-risk energy projects through efficient regional and technological combinations, and optimizing EPC costs through lean operations to improve gross profit margins[166](index=166&type=chunk)[168](index=168&type=chunk) - In H1 2025, new grid-connected installed capacity was **281 MWp**, with **577 MWp** projected for the full year; disposal of inefficient assets saved **RMB 12.7 million** and recovered **RMB 9.56 million** in funds[167](index=167&type=chunk)[169](index=169&type=chunk) - The Group reduced financing costs by covering short-term debt with long-term debt and replacing high-cost funds with low-cost funds; financing costs decreased by **40 basis points** and finance expenses by **RMB 39.76 million** in H1[171](index=171&type=chunk)[173](index=173&type=chunk) - Overseas markets will leverage a "technology customization + local deep cultivation" dual-engine strategy to accelerate expansion into clean energy markets in Japan, Africa (South Africa, Kenya, Tanzania), and Central Asia (Kyrgyzstan)[172](index=172&type=chunk)[174](index=174&type=chunk) - The new materials business will adhere to a "quality first" strategy, fully developing automotive dimming film business, achieving formula upgrades to product iterations, and securing **3 invention patents**[176](index=176&type=chunk)[177](index=177&type=chunk)[179](index=179&type=chunk) [Dividend](index=34&type=section&id=DIVIDEND) The Board does not recommend an interim dividend for the six months ended June 30, 2025 - The Directors do not recommend the payment of any interim dividend for the six months ended June 30, 2025[181](index=181&type=chunk)[183](index=183&type=chunk) [Events After the Reporting Period](index=34&type=section&id=EVENTS_AFTER_THE_REPORTING_PERIOD) There were no significant events after the reporting period for the Group - There were no significant events after the reporting period for the Group[182](index=182&type=chunk)[184](index=184&type=chunk) [Independent Auditor's Review Report](index=35&type=section&id=INDEPENDENT%20AUDITOR'S%20REVIEW%20REPORT) This section presents the independent auditor's review report on the condensed consolidated financial statements, outlining the scope and conclusion of their review [Introduction](index=35&type=section&id=INTRODUCTION_AUDITOR) Rongcheng (Hong Kong) CPA Limited reviewed China Water Affairs Xingye Energy Group Limited's condensed consolidated financial statements for the six months ended June 30, 2025 - Rongcheng (Hong Kong) CPA Limited has reviewed the company's condensed consolidated financial statements for the six months ended June 30, 2025[187](index=187&type=chunk)[188](index=188&type=chunk) - Directors are responsible for the preparation and presentation of the condensed consolidated financial statements in accordance with International Accounting Standard 34[187](index=187&type=chunk)[188](index=188&type=chunk) [Scope of Review](index=36&type=section&id=SCOPE_OF_REVIEW) The review, conducted under Hong Kong Standard on Review Engagements 2410, has a narrower scope than an audit, thus no audit opinion is expressed - The review was conducted in accordance with Hong Kong Standard on Review Engagements 2410 issued by the Hong Kong Institute of Certified Public Accountants[190](index=190&type=chunk)[193](index=193&type=chunk) - The scope of a review is substantially less than an audit, and therefore no audit opinion is expressed[190](index=190&type=chunk)[193](index=193&type=chunk) [Auditor's Conclusion](index=36&type=section&id=AUDITOR_CONCLUSION) The auditor found no matters suggesting the condensed consolidated financial statements were not prepared, in all material respects, according to International Accounting Standard 34 - Based on the review, the auditor found no matters that would lead them to believe the condensed consolidated financial statements were not prepared, in all material respects, in accordance with International Accounting Standard 34[192](index=192&type=chunk)[195](index=195&type=chunk) - The comparative financial statements for the six months ended June 30, 2024, were reviewed by another auditor who expressed an unmodified conclusion[191](index=191&type=chunk)[194](index=194&type=chunk) [Condensed Consolidated Financial Statements](index=37&type=section&id=CONDENSED%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) This section presents the Group's condensed consolidated financial statements, including the statement of comprehensive income, financial position, changes in equity, cash flows, and explanatory notes [Condensed Consolidated Statement of Comprehensive Income](index=37&type=section&id=CONDENSED_CONSOLIDATED_STATEMENT_OF_COMPREHENSIVE_INCOME) For the six months ended June 30, 2025, revenue grew **22.5%**, but declining gross profit led to a significant decrease in profit for the period and a loss attributable to owners Summary of Condensed Consolidated Statement of Comprehensive Income (RMB thousands) | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------- | :------------------- | :------------------- | | Revenue | **1,684,853** | 1,375,933 | | Cost of sales | **(1,330,524)** | (931,075) | | Gross profit | **354,329** | 444,858 | | Operating profit | **228,530** | 293,577 | | Net finance costs | **(220,138)** | (257,688) | | Profit before income tax | **7,935** | 36,037 | | Income tax expense | **(5,562)** | (24,900) | | Profit for the period | **2,373** | 11,137 | | Loss attributable to owners of the company | **(19,184)** | (16,461) | | Basic loss per share | **RMB (0.008)** | RMB (0.007) | [Condensed Consolidated Statement of Financial Position](index=39&type=section&id=CONDENSED_CONSOLIDATED_STATEMENT_OF_FINANCIAL_POSITION) As of June 30, 2025, the Group's total assets and liabilities slightly decreased, while total equity remained relatively stable Summary of Condensed Consolidated Statement of Financial Position (RMB thousands) | Metric | June 30, 2025 | December 31, 2024 | | :------------- | :----------- | :------------- | | Total assets | **22,478,160** | 22,805,882 | | Total non-current assets | **8,956,216** | 8,803,397 | | Total current assets | **13,521,944** | 14,002,485 | | Total equity | **5,261,658** | 5,303,749 | | Total liabilities | **17,216,502** | 17,502,133 | | Total non-current liabilities | **5,491,740** | 5,074,520 | | Total current liabilities | **11,724,762** | 12,427,613 | [Condensed Consolidated Statement of Changes in Equity](index=41&type=section&id=CONDENSED_CONSOLIDATED_STATEMENT_OF_CHANGES_IN_EQUITY) For the six months ended June 30, 2025, equity attributable to owners decreased due to period loss and exchange differences, while non-controlling interests increased Summary of Condensed Consolidated Statement of Changes in Equity (RMB thousands) | Metric | June 30, 2025 | January 1, 2025 | | :------------------- | :----------- | :----------- | | Total equity attributable to owners of the company | **4,167,325** | 4,231,924 | | Non-controlling interests | **1,094,333** | 1,071,825 | | Total equity | **5,261,658** | 5,303,749 | | (Loss)/Profit for the period | **(19,184)** | - | | Exchange differences arising from translation of financial statements | **(45,339)** | - | [Condensed Consolidated Statement of Cash Flows](index=43&type=section&id=CONDENSED_CONSOLIDATED_STATEMENT_OF_CASH_FLOWS) For the six months ended June 30, 2025, operating activities generated net cash, while investing and financing activities resulted in net cash outflows, leading to a net decrease in cash and cash equivalents Summary of Condensed Consolidated Statement of Cash Flows (RMB thousands) | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------- | :------------------- | :------------------- | | Net cash generated from operating activities | **157,744** | (127,953) | | Net cash used in investing activities | **(230,168)** | (380,831) | | Net cash used in financing activities | **(480,130)** | (1,166,013) | | Net decrease in cash and cash equivalents | **(552,554)** | (1,674,797) | | Cash and cash equivalents at end of period | **270,257** | 215,953 | [Notes to the Condensed Consolidated Financial Statements](index=45&type=section&id=NOTES_TO_THE_CONDENSED_CONSOLIDATED_FINANCIAL_STATEMENTS) The notes provide detailed information on the Group's principal activities, accounting policies, estimates, segment information, income, costs, tax, loss per share, balance sheet items, equity, options, payables, borrowings, bonds, deferred income, dividends, liabilities, commitments, related party transactions, and financial instrument fair value - The Group is principally engaged in traditional curtain wall, wind farm construction, and design, manufacture, supply, and installation of building-integrated photovoltaic systems, as well as manufacturing and sales of solar products[206](index=206&type=chunk)[210](index=210&type=chunk) - The condensed consolidated financial statements are prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting" and on a going concern basis[208](index=208&type=chunk)[209](index=209&type=chunk)[211](index=211&type=chunk) Revenue by Segment (RMB thousands) | Segment | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | 2025 Share % | 2024 Share % | | :--------------- | :------------------- | :------------------- | :---------- | :---------- | | Construction services | **1,032,373** | 570,211 | **61.27** | 41.44 | | Product sales | **303,808** | 419,657 | **18.03** | 30.50 | | Power sales | **329,087** | 328,733 | **19.53** | 23.89 | | Others | **19,585** | 57,332 | **1.17** | 4.17 | | **Total Revenue** | **1,684,853** | **1,375,933** | **100.00** | **100.00** | Revenue by Geographical Location (RMB thousands) | Region | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | 2025 Share % | 2024 Share % | | :--------------- | :------------------- | :------------------- | :---------- | :---------- | | Domestic – Mainland China | **1,479,394** | 1,191,517 | **87.81** | 86.60 | | Overseas | **205,459** | 184,416 | **12.19** | 13.40 | | **Total Revenue** | **1,684,853** | **1,375,933** | **100.00** | **100.00** | Net Finance Costs (RMB thousands) | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------- | :------------------- | :------------------- | | Total finance costs | **227,988** | 267,747 | | Total finance income | **(7,850)** | (10,059) | | **Net finance costs** | **220,138** | **257,688** | - As of June 30, 2025, the Group's property, plant, and equipment with a net book value of approximately **RMB 5,690,216 thousand** were pledged as collateral for bank and other loans[266](index=266&type=chunk) - As of June 30, 2025, total trade receivables and electricity tariff subsidies receivable amounted to **RMB 7,931,457 thousand**, with zero expected credit loss for electricity tariff subsidies receivable[285](index=285&type=chunk)[289](index=289&type=chunk) - As of June 30, 2025, the loan balance due to the ultimate holding company, Water Development Group, was **RMB 3,085,724 thousand**, unsecured, bearing interest at an average annual rate of **6%**, and repayable on demand[353](index=353&type=chunk) - As of June 30, 2025, the Group's total borrowings were **RMB 6,482,081 thousand**, and bonds payable were **RMB 1,518,484 thousand**[319](index=319&type=chunk)[328](index=328&type=chunk)

[Financial Highlights](index=1&type=section&id=Financial%20Highlights) The Group achieved a net profit of HK$35,593 thousand for the six months ended June 30, 2025, turning around from a net loss in the prior period, with improved net assets and a significantly reduced debt-to-equity ratio Financial Highlights for the Six Months Ended June 30, 2025 | Metric | June 30, 2025 (HK$ thousand) | June 30, 2024 (HK$ thousand) | Change | | :--- | :--- | :--- | :--- | | Revenue | 900,923 | 914,280 | -1.46% | | Net Profit | 35,593 | (28,542) | Swung to profit | | Profit attributable to owners of the Company | 12,727 | (47,676) | Swung to profit | | Metric | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | Change | | :--- | :--- | :--- | :--- | | Net Assets | 3,436,900 | 3,380,347 | +1.67% | | Net Current Assets | 1,306,142 | 1,300,647 | +0.42% | | Metric | June 30, 2025 | December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Current Ratio | 3.19 | 3.19 | 0.00 | | Debt-to-Equity Ratio | 0.38% | 2.71% | -2.33% | - The Board does not recommend an interim dividend for the six months ended June 30, 2025 (2024: nil)[2](index=2&type=chunk) [Results](index=2&type=section&id=Results) This section provides a detailed overview of the Group's financial performance and position for the reporting 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) The Group recorded revenue of HK$900,923 thousand for the six months ended June 30, 2025, with a net profit of HK$35,593 thousand, turning around from a loss in the prior period due to reduced net other losses and a swing to profit from associates Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (For the Six Months Ended June 30) | Metric | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change | | :--- | :--- | :--- | :--- | | Revenue | 900,923 | 914,280 | -1.46% | | Gross Profit | 230,179 | 249,553 | -7.76% | | Other Income | 19,377 | 18,660 | +3.84% | | Administrative Expenses | (192,421) | (194,598) | -1.12% | | Net Other Gains and Losses | (3,326) | (69,572) | -95.22% | | Finance Costs | (7,957) | (11,969) | -33.52% | | Share of Results of Associates | 7,264 | (1,991) | Swung to profit | | Profit (Loss) Before Tax | 53,116 | (9,917) | Swung to profit | | Income Tax Expense | (17,523) | (18,625) | -5.92% | | Profit (Loss) for the Period | 35,593 | (28,542) | Swung to profit | | Profit (Loss) attributable to owners of the Company | 12,727 | (47,676) | Swung to profit | | Basic and Diluted Earnings (Loss) Per Share (HK cents) | 0.19 | (0.70) | Swung to profit | [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 less current liabilities were HK$3,506,855 thousand, with total equity increasing to HK$3,436,900 thousand, reflecting an optimized financial structure with significantly reduced bank borrowings Condensed Consolidated Statement of Financial Position (As at June 30) | Metric | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | Change | | :--- | :--- | :--- | :--- | | **Non-current Assets** | | | | | Investment Properties | 487,594 | 535,621 | -9.06% | | Property, Plant and Equipment | 339,442 | 305,417 | +11.14% | | Goodwill | 600,662 | 593,253 | +1.25% | | Interests in Associates | 174,334 | 168,794 | +3.28% | | **Current Assets** | | | | | Trade and Other Receivables | 488,003 | 462,852 | +5.43% | | Bank Balances and Cash | 1,253,635 | 1,191,397 | +5.22% | | **Current Liabilities** | | | | | Bank Borrowings | 11,436 | 17,594 | -35.00% | | Convertible Bonds | 115,119 | 112,365 | +2.45% | | Net Current Assets | 1,306,142 | 1,300,647 | +0.42% | | Total Assets Less Current Liabilities | 3,506,855 | 3,532,705 | -0.73% | | **Total Equity** | 3,436,900 | 3,380,347 | +1.67% | [Notes to the Condensed Consolidated Financial Statements](index=6&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and disclosures regarding the Group's accounting policies and financial statement items [1. General Information](index=6&type=section&id=1.%20General%20Information) The Company is a limited liability company incorporated in the Cayman Islands and continued in Bermuda, with shares listed on the Hong Kong Stock Exchange, and its functional currency is HKD - The Company is incorporated in Bermuda as an exempted company with its shares listed on the Hong Kong Stock Exchange[10](index=10&type=chunk)[11](index=11&type=chunk) - The condensed consolidated financial statements are presented in HKD, which is also the Company's functional currency[12](index=12&type=chunk) [2. Basis of Preparation](index=6&type=section&id=2.%20Basis%20of%20Preparation) The condensed consolidated financial statements are prepared in accordance with HKAS 34 "Interim Financial Reporting" and applicable disclosure requirements of Appendix 16 to the Listing Rules - The condensed consolidated financial statements are prepared in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting" and the applicable disclosure requirements of Appendix 16 to the Listing Rules[13](index=13&type=chunk) [3. Significant Accounting Policies](index=6&type=section&id=3.%20Significant%20Accounting%20Policies) The condensed consolidated financial statements are prepared on a historical cost basis, with fair value measurement for investment properties and certain financial instruments, and new accounting standards had no material impact - The condensed consolidated financial statements are prepared on a historical cost basis, except for investment properties and certain financial instruments measured at fair value[14](index=14&type=chunk) - The revised Hong Kong Financial Reporting Standards accounting standards were first applied in this interim period but had no material impact on the Group's financial position and performance[15](index=15&type=chunk) - The Group has not early adopted new and revised Hong Kong Financial Reporting Standards accounting standards that have been issued but are not yet effective, and is assessing their full impact[16](index=16&type=chunk)[17](index=17&type=chunk) [4. Revenue](index=8&type=section&id=4.%20Revenue) The Group's total revenue for the six months ended June 30, 2025, was HK$900,923 thousand, primarily from Hong Kong medical services, network management, and Mainland China hospital management, with most revenue recognized at a point in time Revenue Classification (For the Six Months Ended June 30) | Revenue Source | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change | | :--- | :--- | :--- | :--- | | Hong Kong Medical Services | 377,546 | 394,462 | -4.30% | | Hong Kong Medical Network Management Business | 233,162 | 250,043 | -6.75% | | Mainland China Hospital Management and Medical Services | 285,985 | 264,377 | +8.17% | | Others (Rental Income) | 4,230 | 5,398 | -21.64% | | **Total** | **900,923** | **914,280** | **-1.46%** | - Most revenue (HK$859,712 thousand) is recognized at a point in time, while HK$36,981 thousand is recognized over a period of time[19](index=19&type=chunk)[20](index=20&type=chunk) [5. Segment Information](index=9&type=section&id=5.%20Segment%20Information) The Group operates in four segments: Hong Kong medical services, medical network management, Mainland China hospital management, and others, with Mainland China showing significant growth while Hong Kong segments experienced revenue declines - The Group's four operating and reportable segments are: Hong Kong Medical Services, Hong Kong Medical Network Management Business, Mainland China Hospital Management and Medical Services, and Others (property leasing and other healthcare-related services)[21](index=21&type=chunk)[23](index=23&type=chunk) Segment Revenue and Results (For the Six Months Ended June 30) | Segment | 2025 Revenue (HK$ thousand) | 2024 Revenue (HK$ thousand) | Revenue Change | 2025 Segment Results (HK$ thousand) | 2024 Segment Results (HK$ thousand) | Results Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Hong Kong Medical Services | 377,546 | 394,462 | -4.30% | 15,578 | 38,397 | -59.46% | | Hong Kong Medical Network Management Business | 233,162 | 250,043 | -6.75% | 19,733 | 18,851 | +4.68% | | Mainland China Hospital Management and Medical Services | 285,985 | 264,377 | +8.17% | 34,508 | 25,559 | +35.01% | | Others | 4,230 | 5,398 | -21.64% | 14,019 | (54,496) | Swung to profit | | **Total** | **900,923** | **914,280** | **-1.46%** | **83,838** | **28,311** | **+196.13%** | Revenue from External Customers by Geographical Location (For the Six Months Ended June 30) | Geographical Location | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change | | :--- | :--- | :--- | :--- | | Hong Kong | 614,938 | 649,903 | -5.40% | | Other Mainland China | 285,985 | 264,377 | +8.17% | | **Total** | **900,923** | **914,280** | **-1.46%** | [6. Other Income](index=11&type=section&id=6.%20Other%20Income) The Group's total other income for the six months ended June 30, 2025, was HK$19,377 thousand, a slight increase primarily driven by higher interest and dividend income, despite a decrease in miscellaneous income Other Income (For the Six Months Ended June 30) | Item | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change | | :--- | :--- | :--- | :--- | | Dividend Income | 1,135 | 595 | +90.76% | | Interest Income | 14,900 | 13,937 | +6.91% | | Rental Income | 1,505 | 1,416 | +6.29% | | Miscellaneous Income | 1,837 | 2,712 | -32.26% | | **Total** | **19,377** | **18,660** | **+3.84%** | [7. Net Other Gains and Losses](index=12&type=section&id=7.%20Net%20Other%20Gains%20and%20Losses) The Group's net other gains and losses for the six months ended June 30, 2025, was a loss of HK$3,326 thousand, a significant reduction from the prior period's loss, mainly due to decreased fair value losses on investment properties and impairment losses on interests in associates Net Other Gains and Losses (For the Six Months Ended June 30) | Item | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change | | :--- | :--- | :--- | :--- | | Fair Value Change of Investment Properties | (2,546) | (26,870) | -90.53% | | Fair Value Change of Financial Assets at Fair Value Through Profit or Loss | (552) | (4,348) | -87.33% | | Impairment Loss Recognized on Interests in Associates | – | (36,700) | -100.00% | | Impairment Loss Recognized on Right-of-Use Assets | (399) | (1,329) | -70.00% | | Gain (Loss) on Disposal/Write-off of Property, Plant and Equipment | 63 | (23) | Swung to profit | | Other | 108 | (302) | Swung to profit | | **Total** | **(3,326)** | **(69,572)** | **-95.22%** | [8. Finance Costs](index=12&type=section&id=8.%20Finance%20Costs) The Group's finance costs for the six months ended June 30, 2025, decreased significantly by 33.52% to HK$7,957 thousand, primarily due to reduced interest on convertible bonds and bank borrowings Finance Costs (For the Six Months Ended June 30) | Item | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change | | :--- | :--- | :--- | :--- | | Interest on Bank Borrowings | 2,060 | 2,704 | -23.82% | | Interest on Lease Liabilities | 3,143 | 3,388 | -7.23% | | Interest on Convertible Bonds | 2,754 | 5,877 | -53.14% | | **Total** | **7,957** | **11,969** | **-33.52%** | [9. Income Tax Expense](index=13&type=section&id=9.%20Income%20Tax%20Expense) The Group's income tax expense for the six months ended June 30, 2025, was HK$17,523 thousand, a slight decrease, with Hong Kong Profits Tax at 16.5% (or 8.25% for the first HK$2,000,000) and Mainland China Enterprise Income Tax at 25% Income Tax Expense (For the Six Months Ended June 30) | Item | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change | | :--- | :--- | :--- | :--- | | Hong Kong Profits Tax | 8,556 | 11,990 | -28.64% | | Mainland China Enterprise Income Tax | 9,602 | 8,243 | +16.49% | | Deferred Tax | (635) | (1,598) | -60.39% | | **Total** | **17,523** | **18,625** | **-5.92%** | - Hong Kong Profits Tax rate is 16.5%, with the first HK$2,000,000 for qualifying entities taxed at 8.25%; Mainland China Enterprise Income Tax rate is 25%[33](index=33&type=chunk) [10. Profit (Loss) for the Period Deductions](index=14&type=section&id=10.%20Profit%20%28Loss%29%20for%20the%20Period%20Deductions) The Group's total staff costs for the six months ended June 30, 2025, decreased to HK$363,782 thousand, with a significant reduction in intangible asset amortization and a slight increase in property, plant and equipment depreciation Profit (Loss) for the Period Deductions (For the Six Months Ended June 30) | Item | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change | | :--- | :--- | :--- | :--- | | Total Staff Costs | 363,782 | 380,535 | -4.39% | | Amortization of Intangible Assets | 1,966 | 5,601 | -64.90% | | Depreciation of Property, Plant and Equipment | 28,434 | 27,509 | +3.36% | | Depreciation of Right-of-Use Assets | 35,878 | 36,283 | -1.12% | [11. Dividends](index=14&type=section&id=11.%20Dividends) The Company declared a final dividend of HK$0.12 cents per share for the year ended December 31, 2024, totaling approximately HK$8,128 thousand, while no interim dividend is recommended for the current period - The Company declared a final dividend of **HK$0.12 cents per share** for the year ended December 31, 2024, totaling approximately **HK$8,128 thousand**[36](index=36&type=chunk) - The Board does not recommend an interim dividend for the six months ended June 30, 2025[37](index=37&type=chunk) [12. Earnings (Loss) Per Share](index=15&type=section&id=12.%20Earnings%20%28Loss%29%20Per%20Share) Basic and diluted earnings per share attributable to owners of the Company swung from a loss of HK$0.70 cents per share in the prior period to a profit of HK$0.19 cents per share, reflecting significant improvement in profitability Earnings (Loss) Per Share (For the Six Months Ended June 30) | Metric | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change | | :--- | :--- | :--- | :--- | | Profit (Loss) for the Period attributable to owners of the Company | 12,727 | (47,676) | Swung to profit | | Basic and Diluted Earnings (Loss) Per Share (HK cents) | 0.19 | (0.70) | Swung to profit | - The calculation of diluted earnings (loss) per share did not assume the conversion of convertible bonds due to their anti-dilutive effect[38](index=38&type=chunk) [13. Trade and Other Receivables](index=16&type=section&id=13.%20Trade%20and%20Other%20Receivables) As of June 30, 2025, the Group's total trade and other receivables increased to HK$488,003 thousand, with an increase in receivables aged 61-120 days and over 240 days, while credit terms range from 60 to 270 days Trade and Other Receivables (As at June 30) | Item | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | Change | | :--- | :--- | :--- | :--- | | Trade Receivables | 422,773 | 381,461 | +10.83% | | Bills Receivable | 2,164 | 15,770 | -86.26% | | Deposits | 36,839 | 41,929 | -12.14% | | Other Receivables | 13,233 | 14,590 | -9.30% | | Prepayments | 12,994 | 9,102 | +42.76% | | **Total** | **488,003** | **462,852** | **+5.43%** | Aging Analysis of Trade and Bills Receivables (As at June 30) | Aging | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | Change | | :--- | :--- | :--- | :--- | | 0-60 days | 212,379 | 206,289 | +2.95% | | 61-120 days | 138,364 | 90,723 | +52.51% | | 121-180 days | 43,561 | 71,456 | -39.04% | | 181-240 days | 23,115 | 25,249 | -8.45% | | Over 240 days | 7,518 | 3,514 | +114.09% | - The Group provides credit terms ranging from **60 to 270 days** for different customer groups, such as 180-240 days for medical card payments and 60-180 days for corporate clients[39](index=39&type=chunk) [14. Trade and Other Payables](index=17&type=section&id=14.%20Trade%20and%20Other%20Payables) As of June 30, 2025, the Group's total trade and other payables slightly increased to HK$332,077 thousand, with an increase in payables aged 0-120 days and a significant decrease in those over 120 days, while average credit terms for purchases are 60 to 120 days Trade and Other Payables (As at June 30) | Item | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | Change | | :--- | :--- | :--- | :--- | | Trade Payables | 178,132 | 172,409 | +3.32% | | Other Payables | 44,914 | 35,279 | +27.32% | | Deposits Received | 4,785 | 5,183 | -7.68% | | Accruals | 104,246 | 113,535 | -8.18% | | **Total** | **332,077** | **326,406** | **+1.74%** | Aging Analysis of Trade Payables (As at June 30) | Aging | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | Change | | :--- | :--- | :--- | :--- | | 0-60 days | 99,175 | 89,539 | +10.76% | | 61-120 days | 47,644 | 28,608 | +66.54% | | Over 120 days | 31,313 | 54,262 | -42.30% | - The average credit period for purchases of goods is **60 to 120 days**[40](index=40&type=chunk) [15. Bank Borrowings](index=18&type=section&id=15.%20Bank%20Borrowings) As of June 30, 2025, the Group's total bank borrowings significantly decreased by 85.8% to HK$11,436 thousand, consisting entirely of secured mortgage loans collateralized by leasehold land and buildings, with interest at HIBOR plus 2.25% Bank Borrowings (As at June 30) | Item | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | Change | | :--- | :--- | :--- | :--- | | Unsecured Term Loans | – | 3,405 | -100.00% | | Secured Mortgage Loans | 11,436 | 77,278 | -85.24% | | **Total** | **11,436** | **80,683** | **-85.82%** | - Bank borrowings bear interest at a floating annual rate of **HIBOR plus 2.25%**[41](index=41&type=chunk) - Mortgage loans are secured by the Group's leasehold land and buildings with a carrying amount of approximately **HK$28,877 thousand**, and partly by personal guarantees from non-controlling interests of a non-wholly owned subsidiary[42](index=42&type=chunk) [16. Share Capital](index=19&type=section&id=16.%20Share%20Capital) As of June 30, 2025, the Company's authorized and issued share capital remained unchanged at HK$300,000 thousand and HK$67,735 thousand respectively, with a par value of HK$0.01 per share Share Capital (As at June 30) | Item | Number of Shares | Amount (HK$ thousand) | | :--- | :--- | :--- | | Authorized Share Capital | 30,000,000,000 | 300,000 | | Issued and Fully Paid Share Capital | 6,773,522,452 | 67,735 | - The Company's share capital remained unchanged during the review period[43](index=43&type=chunk) [Management Discussion and Analysis](index=20&type=section&id=Management%20Discussion%20and%20Analysis) This section reviews the Group's financial performance and business operations for the six months ended June 30, 2025, highlighting the swing to profit, strategic business developments, and future outlook [Financial Review](index=20&type=section&id=Financial%20Review) The Group recorded an unaudited profit of approximately HK$35,593 thousand, turning around from a loss, primarily due to significantly reduced fair value losses on investment properties, decreased impairment losses on interests in associates, and a swing to profit from associates - The Group recorded an unaudited profit of approximately **HK$35,593 thousand** (2024: loss of approximately HK$28,542 thousand), with profit attributable to owners of the Company of approximately **HK$12,727 thousand** (2024: loss of approximately HK$47,676 thousand)[44](index=44&type=chunk) - The swing to profit was mainly due to: a **90.53% reduction** in fair value loss on investment properties to **HK$2,546 thousand**; a **100% reduction** in impairment loss on interests in associates (2024: HK$36,700 thousand); and a swing from a loss of **HK$1,991 thousand** to a profit of **HK$7,264 thousand** in share of results of associates[44](index=44&type=chunk)[45](index=45&type=chunk)[46](index=46&type=chunk) - Gross profit decreased by **7.76%** to **HK$230,179 thousand**, primarily due to the overall unfavorable economic environment[47](index=47&type=chunk) [Business Review](index=21&type=section&id=Business%20Review) As one of Hong Kong's largest listed medical groups, the Group optimized its service network, implemented cost controls, and expanded smart healthcare and cross-border services in response to macroeconomic challenges across its Hong Kong, Mainland China, and other businesses [Hong Kong Business](index=24&type=section&id=Hong%20Kong%20Business) In Hong Kong, the Group optimized its medical center network, closed underperforming clinics, opened multi-consultation integrated medical centers, and launched teleconsultation services, while Vio enhanced its information systems and expanded its network with ISO dual certification - The Group is committed to optimizing its Hong Kong chain medical center layout, closing underperforming centers, and opening multi-consultation integrated medical centers in densely populated communities to provide cost-effective, one-stop medical services[50](index=50&type=chunk) - "General Practice Teleconsultation Service" was launched to provide convenience for citizens and express drug delivery services[50](index=50&type=chunk)[55](index=55&type=chunk) - Revenue from Hong Kong medical services business was approximately **HK$377,546 thousand** (accounting for **41.91%** of Group revenue), a **4.30% decrease** from the prior period[54](index=54&type=chunk) - Vio, as Hong Kong's first and only medical network simultaneously awarded ISO 9001:2015 Quality Management System and ISO 27001:2022 Information Security Management System dual certifications, continues to invest in upgrading information systems (e.g., web-CMS clinic management system) and optimizing operational processes[59](index=59&type=chunk) - Revenue from Hong Kong medical network management business was approximately **HK$233,162 thousand** (accounting for **25.88%** of Group revenue), a **6.75% decrease** from the prior period[59](index=59&type=chunk) [Mainland China Business](index=28&type=section&id=Mainland%20China%20Business) In Mainland China, Nanyang Xiangrui continued to provide professional management services to Nanshi Hospital, which saw its internet hospital serve over 1.5 million people and piloted an "AI+ pre-assessment system," while health management businesses expanded services and client base in Guangzhou, Shenzhen, and Jinan - Nanshi Hospital's Internet Hospital has served over **1.5 million people** since its launch in March 2022 until June 2025[62](index=62&type=chunk) - Nanshi Hospital's integrated management platform piloted an "AI+ pre-assessment system," forming a new model of "experiential clinical + intelligent analysis"[62](index=62&type=chunk) - Nanshi Hospital's various specialties were selected as provincial and municipal key clinical specialties, and Gamma Knife technology was introduced, filling a gap in high-end radiotherapy in the southwestern Henan region[63](index=63&type=chunk) - Nanshi Hospital established a joint weight management clinic and expanded its day surgery operating rooms to enhance patient experience[64](index=64&type=chunk) - Kangjian International Health Management Center saw growth in medical examination revenue and corporate client numbers, and collaborated with high-quality medical institutions in the province to provide diversified health management services[67](index=67&type=chunk) [Other Businesses](index=31&type=section&id=Other%20Businesses) TBMG, operating medical aesthetics and beauty healthcare, optimized resource allocation, adjusted its store network, and expanded services to reduce costs and improve operational efficiency amidst intensifying market competition, while upgrading its CRM system for personalized services - TBMG effectively reduced costs and improved operational efficiency by optimizing resource allocation, implementing strategic store network adjustments, and integrating overlapping or synergistic stores[68](index=68&type=chunk) - TBMG continuously upgrades its customer relationship management system, leveraging a comprehensive database to understand customer consumption behavior and create personalized service solutions, thereby enhancing customer satisfaction and repurchase rates[69](index=69&type=chunk) [Outlook](index=32&type=section&id=Outlook) The Group will leverage synergistic advantages between Hong Kong and Mainland China businesses, strengthening primary healthcare and public-private collaboration in Hong Kong, while enhancing hospital operational efficiency, refining health management, and exploring M&A opportunities in Mainland China and other businesses [Medical Services](index=33&type=section&id=Medical%20Services) The Group will support Hong Kong's Primary Healthcare Blueprint, participate in public-private collaboration schemes, open more multi-consultation integrated medical centers, strengthen synergy with "CMH," and expand smart healthcare - The Group will continue to support the Hong Kong Government's "Primary Healthcare Blueprint" and participate in more government-subsidized and public-private collaborative primary healthcare programs[71](index=71&type=chunk) - Plans to open more multi-consultation integrated medical centers in densely populated communities to provide cost-effective medical services[71](index=71&type=chunk) - Seeks to strengthen mutually beneficial synergy with its high-end integrated specialist brand "CMH," further improving the two-way referral mechanism between general practice and specialists, and expanding market coverage through the development of smart healthcare[71](index=71&type=chunk) [Medical Network Management](index=34&type=section&id=Medical%20Network%20Management) Vio will leverage its ISO dual certification to deepen long-term partnerships with blue-chip companies, insurers, and government bodies, optimize service processes for new ISO standards, prepare for integrated clinic licensing, and enhance collaboration with the Group's self-operated medical centers - Vio will fully leverage its competitive advantage as Hong Kong's only ISO dual-certified medical network for quality and information security management to further develop long-term partnerships with blue-chip companies, insurance companies, government departments, and public organizations[72](index=72&type=chunk) - Vio will further optimize service processes, enhance environmental performance and customer satisfaction, and actively prepare to comply with the licensing requirements of the integrated clinic licensing system under the "Private Healthcare Facilities Ordinance"[72](index=72&type=chunk) [Mainland China Hospital Management](index=34&type=section&id=Mainland%20China%20Hospital%20Management) Nanyang Xiangrui will implement cost-reduction and efficiency-improvement strategies for Nanshi Hospital, driving development through technological innovation, management optimization, cost control, and service upgrades, with all segments fully supporting Nanshi Hospital's integrated "medical, education, and research" development - Nanyang Xiangrui will propose practical cost-reduction and efficiency-improvement strategies for Nanshi Hospital, driving development from multiple dimensions including technological innovation, management optimization, cost control, and service upgrades[73](index=73&type=chunk) - Its various segments will continue to fully support Nanshi Hospital in promoting integrated "medical, education, and research" collaborative development, steadily advancing the Mainland China hospital management business[73](index=73&type=chunk) [Health Management](index=35&type=section&id=Health%20Management) The Group will continue to enhance its health management service system, creating differentiated medical examination product portfolios and innovative service models to meet diverse market demands, focusing on "insurance + health" ecosystem development and expanding its high-quality customer base - The Group will continue to deepen the construction of its health management service system, precisely meeting diverse market health needs by creating differentiated medical examination product portfolios and innovative service models[74](index=74&type=chunk) - Will focus on promoting the "insurance + health" service ecosystem, continuously improving operational efficiency and market competitiveness[74](index=74&type=chunk) [Other Businesses](index=35&type=section&id=Other%20Businesses) TBMG will implement a multi-dimensional development strategy, strategically reorganizing its store network to enhance single-store efficiency, introduce international leading equipment, upgrade CRM systems, and explore M&A opportunities in Hong Kong and Mainland China - TBMG will enhance single-store efficiency through strategic reorganization of its store network and plans to create a conceptual new store in the New Territories, Hong Kong, introducing internationally leading beauty medical equipment and technology[75](index=75&type=chunk) - Will continue to invest resources in upgrading its customer relationship management system, leveraging big data to enhance customer satisfaction and retention, and promote customer conversion between beauty and medical aesthetics[75](index=75&type=chunk) - TBMG will also evaluate high-quality M&A targets in Hong Kong and Mainland China, expand its ecosystem of strategic partners, and explore cross-border business synergy opportunities[75](index=75&type=chunk) [Liquidity and Financial Resources](index=36&type=section&id=Liquidity%20and%20Financial%20Resources) The Group maintains prudent cash and financial management, with total bank balances and deposits of approximately HK$1,410,255 thousand and significantly reduced bank borrowings of HK$11,436 thousand as of June 30, 2025, demonstrating a robust financial position and good liquidity management Liquidity and Financial Resources (As at June 30) | Metric | 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | Change | | :--- | :--- | :--- | :--- | | Total Bank Balances and Deposits | 1,410,255 | 1,420,245 | -0.70% | | Bank Borrowings | 11,436 | 80,683 | -85.82% | | Net Current Assets | 1,306,142 | 1,300,647 | +0.42% | | Current Ratio | 3.19 | 3.19 | 0.00 | | Debt-to-Equity Ratio | 0.38% | 2.71% | -2.33% | - The Group has unutilized bank facilities of **HK$20,000 thousand**[76](index=76&type=chunk) - The Group regularly reviews foreign exchange risk and closely monitors currency fluctuations, but did not use any financial instruments for hedging activities during the review period[78](index=78&type=chunk)[79](index=79&type=chunk) [Capital Structure](index=37&type=section&id=Capital%20Structure) As of June 30, 2025, equity attributable to owners of the Company increased to approximately HK$3,009,308 thousand compared to December 31, 2024 Equity Attributable to Owners of the Company (As at June 30) | Metric | 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | Change | | :--- | :--- | :--- | :--- | | Equity Attributable to Owners of the Company | 3,009,308 | 2,976,914 | +1.09% | [Share Capital](index=37&type=section&id=Share%20Capital) The Company's share capital remained unchanged during the review period, with details provided in Note 16 to the condensed consolidated financial statements - The Company's share capital remained unchanged during the review period[81](index=81&type=chunk) [Material Investments, Acquisitions and Disposals](index=37&type=section&id=Material%20Investments%2C%20Acquisitions%20and%20Disposals) The Group had no material investments, acquisitions, or disposals during the review period - The Group had no material investments, acquisitions, or disposals during the review period[82](index=82&type=chunk) [Pledge of Assets](index=37&type=section&id=Pledge%20of%20Assets) As of June 30, 2025, the Group's total pledged assets significantly decreased to approximately HK$29,893 thousand, primarily comprising leasehold land and buildings for mortgage loans and bank deposits for general banking facilities Total Pledged Assets (As at June 30) | Item | 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | Change | | :--- | :--- | :--- | :--- | | Leasehold Land and Buildings | 28,877 | 30,438 | -5.13% | | Investment Properties | – | 89,000 | -100.00% | | Bank Deposits | 1,016 | 1,107 | -8.22% | | **Total** | **29,893** | **120,545** | **-75.29%** | [Contingent Liabilities](index=38&type=section&id=Contingent%20Liabilities) As of June 30, 2025, the Group had no material contingent liabilities - As of June 30, 2025, the Group had no material contingent liabilities[84](index=84&type=chunk) [Litigation](index=38&type=section&id=Litigation) The Company faces profit guarantee litigation related to the acquisition of Central Medical, with claims of HK$97,956,690 for FY2023 and intended claims of HK$234,070,695 for FY2024 due to unmet performance targets - For FY2023, the buyer initiated legal proceedings on June 4, 2024, against the vendor parties for a claim amount of **HK$97,956,690** due to Central Medical Group's adjusted net profit falling short of the performance target of HK$30,000,000[85](index=85&type=chunk)[86](index=86&type=chunk) - Central Medical Group's adjusted net profit for FY2024 was **HK$14,395,287** (excluding HK$13,860,000 after transactions), which was below the performance target of HK$30,000,000[88](index=88&type=chunk) - The buyer intends to claim **HK$234,070,695** from the vendor parties for FY2024 and will commence litigation if payment is not made[89](index=89&type=chunk) [Events After Reporting Period](index=39&type=section&id=Events%20After%20Reporting%20Period) No events with significant impact on the Group have occurred since June 30, 2025, other than those disclosed in this announcement - No events with significant impact on the Group have occurred since June 30, 2025[91](index=91&type=chunk) [Employees and Remuneration](index=40&type=section&id=Employees%20and%20Remuneration) As of June 30, 2025, the Group employed 1,388 employees, with total staff costs of approximately HK$363,782 thousand, a decrease from the prior period, offering competitive salaries, benefits, and professional development Employees and Remuneration (For the Six Months Ended June 30) | Metric | 2025 | December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Number of Employees | 1,388 | 1,441 | -3.68% | | Metric | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change | | :--- | :--- | :--- | :--- | | Total Staff Costs | 363,782 | 380,535 | -4.39% | | Directors' Emoluments | 6,834 | 5,484 | +24.62% | - The Group's employees receive competitive salaries and benefits, with individual performance rewarded through salary and bonus schemes, alongside specialized training and manuals[92](index=92&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=40&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company%27s%20Listed%20Securities) Neither the Company nor any of its subsidiaries purchased, sold, or redeemed any listed securities during the review period - Neither the Company nor any of its subsidiaries purchased, sold, or redeemed any listed securities during the review period[93](index=93&type=chunk) [Compliance with Corporate Governance Code](index=40&type=section&id=Compliance%20with%20Corporate%20Governance%20Code) The Company complied with the Corporate Governance Code during the review period, except for the combined roles of Chairman and Chief Executive Officer held by Mr. Choi Ka Tsan, which the Board believes ensures consistent leadership and operational efficiency without compromising power balance - The Company has complied with the Corporate Governance Code, except that Mr. Choi Ka Tsan serves as both Chairman and Chief Executive Officer, deviating from Code Provision C.2.1[94](index=94&type=chunk) - The Board believes this arrangement ensures consistent leadership, facilitates the formulation and advancement of long-term strategies, and optimizes the Group's operational efficiency[94](index=94&type=chunk) - The Board's power balance is not compromised, as four non-executive directors and six independent non-executive directors constitute a majority[94](index=94&type=chunk) [Review of Interim Financial Information](index=41&type=section&id=Review%20of%20Interim%20Financial%20Information) The Group's unaudited condensed consolidated financial information for the six months ended June 30, 2025, has been reviewed by the Board's Audit Committee and the Company's auditor, UHY Certified Public Accountants Limited, in accordance with HKSRS 2410 - The Group's unaudited condensed consolidated financial information for the six months ended June 30, 2025, has been reviewed by the Board's Audit Committee[95](index=95&type=chunk) - The auditor, UHY Certified Public Accountants Limited, has reviewed the interim financial statements in accordance with Hong Kong Standard on Review Engagements 2410[95](index=95&type=chunk) [Board of Directors Information](index=41&type=section&id=Board%20of%20Directors%20Information) As of the announcement date, the Company's Board of Directors comprises executive, non-executive, and independent non-executive directors, including Mr. Choi Ka Tsan as Chairman and Chief Executive Officer - Executive Directors include Mr. Choi Ka Tsan (Chairman and Chief Executive Officer), Dr. Fok Siu Wing, Ms. Zhang Xiaoxue, and Mr. Wong Yu[97](index=97&type=chunk) - Non-executive Directors include Ms. Li Wai Ling, Ms. Lau Suk Ching, Mr. Liu Yang, and Ms. Zhang Leidi[97](index=97&type=chunk) - Independent Non-executive Directors include Mr. Yu Xuezhong, Dr. Xu Weiguo, Mr. Han Wenxin, Mr. Chan Wai Kwan, Mr. Cheung Ka Ming, and Mr. Cui Yongchang[97](index=97&type=chunk) [Glossary](index=42&type=section&id=Glossary) This glossary provides definitions for key terms and entities used throughout the report to ensure clear understanding for readers

[Financial Highlights](index=1&type=section&id=Financial%20Highlights) [Overview](index=1&type=section&id=Overview) For the six months ended June 30, 2025, Puhua Heshun Group's revenue increased by 22.4% to RMB 414.4 million, and gross profit grew by 13.4% to RMB 212.8 million; however, profit for the period and profit attributable to owners of the Company decreased by 7.5% and 6.0% respectively, while adjusted net profit and adjusted net profit attributable to owners of the Company increased by 15.3% and 10.9% respectively, with the Board resolving to declare an interim dividend of 4.4 HK cents per share 2025 First Half Key Financial Data (Unaudited) | Indicator | June 30, 2025 (RMB million) | June 30, 2024 (RMB million) | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | 414.4 | 338.4 | +22.4% | | Gross Profit | 212.8 | 187.6 | +13.4% | | Profit for the Period | 86.6 | 93.6 | -7.5% | | Profit Attributable to Owners of the Company | 66.0 | 70.2 | -6.0% | | Adjusted Net Profit for the Period | 119.1 | 103.3 | +15.3% | | Adjusted Net Profit Attributable to Owners of the Company | 83.4 | 75.2 | +10.9% | | Interim Dividend (HK cents per share) | 4.4 | 4.5 | -2.2% | - Adjusted net profit and adjusted net profit attributable to owners of the Company are non-HKFRS measures, excluding share-based payment expenses, professional service fees for spin-off, amortization of intangible assets, and related income tax effects, to better reflect the Group's business performance[4](index=4&type=chunk) [Condensed Consolidated Financial Statements](index=2&type=section&id=Condensed%20Consolidated%20Financial%20Statements) [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's revenue increased to RMB 414,373 thousand, with gross profit of RMB 212,779 thousand; however, operating profit and profit for the period both decreased, with profit attributable to owners of the Company at RMB 65,999 thousand, and basic and diluted earnings per share at RMB 4.44 cents Condensed Consolidated Statement of Comprehensive Income (Unaudited) | Indicator | June 30, 2025 (RMB thousand) | June 30, 2024 (RMB thousand) | | :--- | :--- | :--- | | Revenue | 414,373 | 338,417 | | Cost of Sales | (201,594) | (150,796) | | Gross Profit | 212,779 | 187,621 | | Operating Profit | 80,198 | 84,511 | | Profit Before Income Tax | 103,121 | 112,301 | | Income Tax Expense | (16,502) | (18,662) | | Profit for the Period | 86,619 | 93,639 | | Profit Attributable to Owners of the Company | 65,999 | 70,219 | | Basic and Diluted Earnings Per Share (RMB cents) | 4.44 | 4.49 | [Condensed Consolidated Statement of Financial Position](index=4&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the Group's total assets increased to RMB 5,294,299 thousand, with non-current assets slightly decreasing and current assets significantly increasing, while total liabilities and total equity both grew, maintaining a robust net current assets position Condensed Consolidated Statement of Financial Position (Unaudited) | Indicator | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | **Assets** | | | | Total Non-current Assets | 2,893,276 | 3,066,690 | | Total Current Assets | 2,401,023 | 2,094,239 | | **Total Assets** | **5,294,299** | **5,160,929** | | **Liabilities** | | | | Total Current Liabilities | 248,957 | 177,440 | | Total Non-current Liabilities | 184,247 | 180,121 | | **Total Liabilities** | **433,204** | **357,561** | | Net Current Assets | 2,152,066 | 1,916,799 | | **Equity** | | | | Equity Attributable to Owners of the Company | 4,000,367 | 3,971,401 | | Non-controlling Interests | 860,728 | 831,967 | | **Total Equity** | **4,861,095** | **4,803,368** | [Notes to the Condensed Consolidated Interim Financial Statements](index=6&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Interim%20Financial%20Statements) [1. General Information](index=6&type=section&id=1.%20General%20Information) Puhua Heshun Group Company, incorporated in the Cayman Islands and listed on the Hong Kong Stock Exchange, primarily engages in the research, development, manufacturing, and sales of high-end infusion sets, blood purification medical devices, and animal-derived regenerative medical biomaterials and human tissue repair and replacement products in China - The Company was incorporated in the Cayman Islands on May 13, 2011, and listed on the Main Board of the Hong Kong Stock Exchange on November 8, 2013[10](index=10&type=chunk) - The Group's core businesses include infusion products, blood purification products, and regenerative medical biomaterials, covering R&D, manufacturing, and sales[10](index=10&type=chunk) [2. Basis of Preparation](index=6&type=section&id=2.%20Basis%20of%20Preparation) The condensed consolidated interim financial statements are prepared in accordance with HKAS 34 and the Listing Rules, adopting the same accounting policies as the 2024 annual financial statements, with no significant impact from new or amended standards, and have been reviewed by independent auditors - The financial statements are prepared in accordance with HKAS 34 and the Listing Rules, and were authorized for issue on August 29, 2025[11](index=11&type=chunk) - These condensed consolidated interim financial statements are unaudited but have been reviewed by BDO Limited, Hong Kong[14](index=14&type=chunk) [3. Changes in Accounting Policies](index=7&type=section&id=3.%20Changes%20in%20Accounting%20Policies) Except for amendments to HKAS 21 and HKFRS 1 (Non-exchangeable Currencies), the Group's accounting policies applied are consistent with the 2024 consolidated financial statements, and new or amended HKFRSs have no significant impact on the current period's financial statements - The accounting policies applied are consistent with the 2024 consolidated financial statements, and new or amended HKFRSs have no significant impact on the Group's accounting policies[15](index=15&type=chunk) [4. Critical Accounting Judgements and Key Sources of Estimation Uncertainty](index=7&type=section&id=4.%20Critical%20Accounting%20Judgements%20and%20Key%20Sources%20of%20Estimation%20Uncertainty) The preparation of condensed consolidated interim financial information involves management's significant judgments, estimates, and assumptions regarding the application of accounting policies, assets, liabilities, income, and expenses, where actual results may differ from estimates, and the key judgments and sources of estimation uncertainty used in the current period are the same as those in the 2024 financial statements - The critical judgments and key sources of estimation uncertainty made by management in preparing the financial statements are the same as those in the 2024 annual financial statements[16](index=16&type=chunk) [5. Revenue and Segment Information](index=8&type=section&id=5.%20Revenue%20and%20Segment%20Information) For the six months ended June 30, 2025, the Group's total revenue was RMB 414,373 thousand, primarily from medical product distributors, with significant growth in blood purification business revenue but a decrease in infusion business revenue, and mainland China remains the main market, while overseas markets such as India, the Americas, and Africa also contributed revenue, with the Group's operations divided into three segments: infusion products, blood purification products, and regenerative medical biomaterials Revenue from Contracts with Customers by Category (Unaudited) | Revenue Source | June 30, 2025 (RMB thousand) | June 30, 2024 (RMB thousand) | | :--- | :--- | :--- | | Revenue from Hospitals | 15,689 | 16,440 | | Revenue from Medical Product Distributors | 398,684 | 321,977 | | **Total** | **414,373** | **338,417** | Revenue by Geographical Market (Unaudited) | Geographical Market | June 30, 2025 (RMB thousand) | June 30, 2024 (RMB thousand) | | :--- | :--- | :--- | | Mainland China | 311,848 | 295,529 | | India | 38,580 | 13,144 | | Americas (excluding USA) | 12,859 | 4,948 | | Africa | 12,060 | 7,264 | | Others | 39,026 | 17,532 | | **Total** | **414,373** | **338,417** | Segment Revenue and Results (Unaudited) | Segment | June 30, 2025 (RMB thousand) | June 30, 2024 (RMB thousand) | | :--- | :--- | :--- | | **Segment Revenue** | | | | Infusion Business | 113,387 | 132,618 | | Blood Purification Business | 297,444 | 205,799 | | Regenerative Medical Biomaterials Business | 3,542 | — | | **Total** | **414,373** | **338,417** | | **Segment Results (Operating Profit/(Loss))** | | | | Infusion Business | 41,614 | 39,313 | | Blood Purification Business | 70,829 | 60,621 | | Regenerative Medical Biomaterials Business | (24,829) | (13,612) | | **Total** | **87,614** | **86,322** | - Blood purification business revenue significantly increased, and regenerative medical biomaterials business recorded revenue for the first time[17](index=17&type=chunk)[19](index=19&type=chunk) [6. Other Income and Gains and Losses—Net](index=11&type=section&id=6.%20Other%20Income%20and%20Gains%20and%20Losses%E2%80%94Net) For the six months ended June 30, 2025, the Group's other income and gains—net decreased to RMB 14,840 thousand from RMB 18,074 thousand in the prior period, primarily due to foreign exchange losses and losses on guarantee liabilities, partially offset by increased government grants and rental income Other Income and Gains and Losses—Net (Unaudited) | Item | June 30, 2025 (RMB thousand) | June 30, 2024 (RMB thousand) | | :--- | :--- | :--- | | Government Grants | 3,370 | 1,814 | | Rental Income | 10,292 | 6,845 | | Rental Management and Utility Income | 2,023 | 3,910 | | Loss on Disposal of Property, Plant and Equipment | (2) | (91) | | Loss on Guarantee Liabilities | (367) | (366) | | Net Foreign Exchange (Loss)/Gain | (1,599) | 3,881 | | Fair Value Change of Financial Assets at FVTPL | 1,054 | — | | Others | 69 | 2,081 | | **Other Gains—Net** | **14,840** | **18,074** | - Net foreign exchange loss of **RMB 1,599 thousand**, compared to a gain of RMB 3,881 thousand in the prior period[23](index=23&type=chunk) - Loss on guarantee liabilities primarily relates to joint and several guarantee liabilities of Xuzhou Yijia Medical Device Co., Ltd., with the recognized loss being accrued interest for the period[23](index=23&type=chunk)[24](index=24&type=chunk) [7. Finance Income—Net](index=12&type=section&id=7.%20Finance%20Income%E2%80%94Net) For the six months ended June 30, 2025, the Group's net finance income decreased to RMB 22,923 thousand from RMB 27,790 thousand in the prior period, mainly due to reduced bank interest income and loan interest income, but significantly increased interest income from wealth management products Finance Income—Net (Unaudited) | Item | June 30, 2025 (RMB thousand) | June 30, 2024 (RMB thousand) | | :--- | :--- | :--- | | **Finance Income** | | | | Bank Interest Income | 14,801 | 19,242 | | Interest Income from Wealth Management Products | 600 | 51 | | Loan Interest Income | 7,850 | 8,615 | | **Subtotal** | **23,251** | **27,908** | | **Finance Costs** | | | | Interest Expense on Lease Liabilities | (133) | (84) | | Interest Expense on Bank Borrowings | (195) | (34) | | **Subtotal** | **(328)** | **(118)** | | **Finance Income—Net** | **22,923** | **27,790** | [8. Profit Before Income Tax](index=12&type=section&id=8.%20Profit%20Before%20Income%20Tax) For the six months ended June 30, 2025, the Group's profit before income tax was RMB 103,121 thousand, with amortization of intangible assets significantly increasing to RMB 32,456 thousand, while depreciation of property, plant and equipment remained stable Components of Profit Before Income Tax (Unaudited) | Item | June 30, 2025 (RMB thousand) | June 30, 2024 (RMB thousand) | | :--- | :--- | :--- | | Amortization of Intangible Assets | 32,456 | 14,656 | | Depreciation of Property, Plant and Equipment | 34,675 | 34,866 | | Depreciation of Right-of-use Assets—Properties | 959 | 641 | | Depreciation of Right-of-use Assets—Leasehold Land and Land Use Rights | 300 | 300 | - Amortization of intangible assets increased by **121.4% year-on-year**, reflecting accelerated consumption of intangible asset value[26](index=26&type=chunk) [9. Taxation](index=13&type=section&id=9.%20Taxation) For the six months ended June 30, 2025, the Group's income tax expense decreased to RMB 16,502 thousand, with varying tax rates applied across different jurisdictions, including Cayman Islands exemption, Hong Kong profits tax (no assessable profits), China corporate income tax (25% statutory rate, with some subsidiaries enjoying 15% preferential rate or small-profit enterprise benefits), and withholding tax (on dividends distributed by China to overseas investors) Income Tax Expense (Unaudited) | Item | June 30, 2025 (RMB thousand) | June 30, 2024 (RMB thousand) | | :--- | :--- | :--- | | China Income Tax for the Period | (20,729) | (20,676) | | Deferred Income Tax | 4,227 | 2,014 | | **Income Tax Expense** | **(16,502)** | **(18,662)** | - Certain subsidiaries located in western China enjoy a **preferential income tax rate of 15%**[30](index=30&type=chunk) - Four subsidiaries qualify as "High and New Technology Enterprises" and enjoy a **preferential income tax rate of 15%**[30](index=30&type=chunk) - Seven PRC subsidiaries qualify as small-profit enterprises and enjoy **preferential tax rates**[30](index=30&type=chunk) - Withholding tax rate on dividends distributed by China to Hong Kong-registered overseas investors can be reduced from 10% to **5%**[31](index=31&type=chunk) [10. Earnings Per Share](index=14&type=section&id=10.%20Earnings%20Per%20Share) For the six months ended June 30, 2025, profit attributable to owners of the Company was RMB 65,999 thousand, with basic and diluted earnings per share both at RMB 4.44 cents, a slight decrease from the prior period, and no dilutive potential ordinary shares existed during the current period Earnings Per Share (Unaudited) | Indicator | June 30, 2025 (RMB thousand) | June 30, 2024 (RMB thousand) | | :--- | :--- | :--- | | Profit Attributable to Owners of the Company | 65,999 | 70,219 | | Weighted Average Number of Ordinary Shares in Issue (thousand shares) | 1,486,735 | 1,565,358 | | Basic Earnings Per Share (RMB cents) | 4.44 | 4.49 | | Diluted Earnings Per Share (RMB cents) | 4.44 | 4.49 | - As of June 30, 2025, the Company had no dilutive potential ordinary shares[34](index=34&type=chunk) [11. Dividends](index=15&type=section&id=11.%20Dividends) The Board has declared an interim dividend of 4.4 HK cents per share for the six months ended June 30, 2025, slightly lower than 4.5 HK cents in the prior period, and the proposed final dividend of 5.3 HK cents per share for 2024 was approved by shareholders and paid in July 2025 - The Board has declared an interim dividend of **4.4 HK cents per share** for the six months ended June 30, 2025 (2024: 4.5 HK cents)[36](index=36&type=chunk) - The proposed final dividend of **5.3 HK cents per share** for 2024 (totaling HKD 78,797,000) was approved by shareholders and paid on July 25, 2025[36](index=36&type=chunk) [12. Property, Plant and Equipment](index=15&type=section&id=12.%20Property,%20Plant%20and%20Equipment) As of June 30, 2025, the Group's property, plant and equipment carrying value increased to RMB 897,077 thousand, primarily due to additions of approximately RMB 40,877 thousand during the period, partially offset by depreciation and disposals Changes in Property, Plant and Equipment (Unaudited) | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | At Beginning of Period/Year | 891,691 | 906,872 | | Additions | 40,877 | 56,499 | | Disposals | (816) | (656) | | Depreciation | (34,675) | (71,024) | | **At End of Period/Year** | **897,077** | **891,691** | - Additions to property, plant and equipment during the period were approximately **RMB 40,877,000**, a significant increase compared to RMB 18,459,000 in the prior period[37](index=37&type=chunk) [13. Right-of-use Assets](index=15&type=section&id=13.%20Right-of-use%20Assets) As of June 30, 2025, the Group's total right-of-use assets amounted to RMB 29,071 thousand, primarily comprising properties and leasehold land and land use rights, with depreciation of RMB 1,259 thousand during the period Components of Right-of-use Assets (Unaudited) | Asset Type | June 30, 2025 (RMB thousand) | | :--- | :--- | | Properties | 4,799 | | Leasehold Land and Land Use Rights | 24,272 | | **Total** | **29,071** | - Depreciation of right-of-use assets for the period was **RMB 1,259 thousand**[38](index=38&type=chunk) [14. Investment Properties](index=16&type=section&id=14.%20Investment%20Properties) As of June 30, 2025, the Group's investment properties fair value slightly decreased to RMB 262,559 thousand, mainly due to fair value losses, with fair value determined using the income approach, and key assumptions including occupancy rate, monthly rent, rental growth rate, and discount rate, where a 1% increase in discount rate or a 0.5% decrease in rental growth rate would significantly negatively impact fair value Changes in Fair Value of Investment Properties (Unaudited) | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | At Beginning of Period/Year | 262,880 | 264,878 | | Fair Value Change | (321) | (1,182) | | **At End of Period/Year** | **262,559** | **262,880** | Key Assumptions for Investment Properties Fair Value Valuation | Assumption | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Occupancy Rate | 50.0% to 83.52% | 50.0% to 83.52% | | Monthly Rent | RMB 40.4 to 78.8/sqm | RMB 40.2 to 78.8/sqm | | Rental Growth Rate | 2.0% | 2.0% | | Discount Rate | 5.0% | 5.0% | - A **1% increase in discount rate** would result in a decrease of approximately **RMB 34,101 thousand** in the fair value of investment properties[42](index=42&type=chunk) - A **0.5% decrease in rental growth rate** would result in a decrease of approximately **RMB 20,976 thousand** in the fair value of investment properties[42](index=42&type=chunk) [15. Intangible Assets](index=17&type=section&id=15.%20Intangible%20Assets) As of June 30, 2025, the Group's intangible assets carrying value decreased to RMB 1,042,686 thousand, primarily due to amortization expenses of RMB 32,456 thousand, partially offset by additions Changes in Intangible Assets (Unaudited) | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | At Beginning of Period/Year | 1,068,300 | 1,096,987 | | Additions | 6,842 | 15,583 | | Amortization Expense | (32,456) | (44,270) | | **At End of Period/Year** | **1,042,686** | **1,068,300** | [16. Goodwill](index=17&type=section&id=16.%20Goodwill) As of June 30, 2025, the Group's goodwill carrying value remained at RMB 564,085 thousand, primarily allocated to the infusion business, blood purification business, and regenerative medical biomaterials business; management determined no impairment for infusion and blood purification businesses, and after an impairment review for the loss-making regenerative medical biomaterials business, concluded that no impairment loss needed to be recognized Allocation of Goodwill Carrying Value (Unaudited) | Cash Generating Unit | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Infusion Business | 160,754 | 160,754 | | Blood Purification Business | 323,540 | 323,540 | | Regenerative Medical Biomaterials Business | 79,791 | 79,791 | | **Total** | **564,085** | **564,085** | - The regenerative medical biomaterials business underwent a goodwill impairment review due to operating losses during the period, but management determined that no impairment loss needed to be recognized[44](index=44&type=chunk)[45](index=45&type=chunk) [17. Loans Receivable](index=18&type=section&id=17.%20Loans%20Receivable) As of June 30, 2025, the Group's total loans receivable amounted to RMB 300,000 thousand, all fixed-rate loans, with RMB 300,000 thousand being current, and the non-current portion reclassified as current; these loans are secured by borrowers' properties, and management assessed the impact of expected credit risk as not significant Analysis of Loans Receivable (Unaudited) | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Fixed-rate Loans Receivable | 300,000 | 300,000 | | **Analyzed as:** | | | | Current | 300,000 | 120,000 | | Non-current | — | 180,000 | | **Total** | **300,000** | **300,000** | - A loan of **RMB 120,000 thousand** was extended to May 31, 2026, and is secured by Suzhou properties[47](index=47&type=chunk) - The borrower repaid **RMB 60 million** of principal in July 2025[48](index=48&type=chunk) [18. Non-current Financial Assets](index=19&type=section&id=18.%20Non-current%20Financial%20Assets) As of June 30, 2025, the Group's non-current financial assets increased to RMB 73,350 thousand, primarily comprising listed equity securities (Lepu Biopharma) designated at fair value through other comprehensive income and unlisted investment funds at fair value through profit or loss, with significant fair value gains on listed equity securities and fair value gains also recorded for unlisted investment funds Components of Non-current Financial Assets (Unaudited) | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Equity Securities Designated at FVTOCI—Listed Equity Securities | 53,510 | 26,363 | | Financial Assets at FVTPL—Unlisted Investment Funds | 19,840 | 20,181 | | **Total** | **73,350** | **46,544** | - Holds **0.65% equity interest** in Lepu Biopharma Co., Ltd., generating a fair value gain of approximately **RMB 27,803 thousand** during the period[49](index=49&type=chunk) - Unlisted investment funds invest in private equity funds in the medical industry, generating a fair value gain of approximately **RMB 972 thousand** during the period[49](index=49&type=chunk) [19. Trade and Other Receivables](index=20&type=section&id=19.%20Trade%20and%20Other%20Receivables) As of June 30, 2025, the Group's trade and other receivables increased to RMB 192,290 thousand, with trade receivables at RMB 82,771 thousand; the Group applies the expected credit loss model for impairment provisions, adjusting rates based on customer segments and past experience, and recognized a reversal of impairment loss of RMB 3,722 thousand during the period Components of Trade and Other Receivables (Unaudited) | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Trade Receivables | 82,771 | 72,988 | | Bills Receivable | 1,815 | 1,338 | | Prepayments and Deposits | 26,509 | 22,403 | | Recoverable VAT | 11,803 | 12,937 | | Other Receivables | 35,923 | 35,817 | | Interest Receivable | 3,803 | 2,771 | | Amounts Due from a Related Party | 29,666 | 18,571 | | **Total** | **192,290** | **166,825** | Aging Analysis of Trade Receivables (Unaudited) | Aging | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Within 3 Months | 59,458 | 46,864 | | 3 to 6 Months | 7,054 | 3,624 | | 6 to 12 Months | 7,236 | 9,301 | | 1 to 2 Years | 2,153 | 1,465 | | 2 to 3 Years | 6,870 | 11,734 | | **Total** | **82,771** | **72,988** | Loss Provision for Trade Receivables (Unaudited) | Customer Group | June 30, 2025 Expected Credit Loss Rate (%) | June 30, 2025 Loss Provision (RMB thousand) | | :--- | :--- | :--- | | Group A | 7.88 | 4,421 | | Group B | 0.89 | 213 | | Group C | 100 | 1,897 | | Group D | 54.47 | 8,804 | | **Total** | | **15,335** | - A reversal of impairment loss on trade receivables of **RMB 3,722 thousand** was recognized during the period[56](index=56&type=chunk) [20. Financial Assets at Fair Value Through Profit or Loss](index=22&type=section&id=20.%20Financial%20Assets%20at%20Fair%20Value%20Through%20Profit%20or%20Loss) As of June 30, 2025, the Group's financial assets at fair value through profit or loss significantly increased to RMB 85,230 thousand, primarily due to an increase in principal-protected wealth management products, with additions of RMB 200,498 thousand, disposals of RMB 120,498 thousand, and a fair value change gain of RMB 82 thousand recorded during the period Components of Financial Assets at Fair Value Through Profit or Loss (Unaudited) | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Wealth Management Products—Non-principal Protected | 5,148 | 5,148 | | Wealth Management Products—Principal Protected | 80,082 | — | | **Total** | **85,230** | **5,148** | Changes in Financial Assets at Fair Value Through Profit or Loss (Unaudited) | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | At Beginning of Period/Year | 5,148 | 4,900 | | Additions | 200,498 | 672,998 | | Disposals | (120,498) | (672,750) | | Fair Value Change | 82 | — | | **At End of Period/Year** | **85,230** | **5,148** | - Principal-protected wealth management products increased from zero to **RMB 80,082 thousand**[57](index=57&type=chunk) [21. Trade and Other Payables](index=23&type=section&id=21.%20Trade%20and%20Other%20Payables) As of June 30, 2025, the Group's trade and other payables increased to RMB 213,515 thousand, primarily due to a significant increase in dividends payable, with most trade payables falling within 6 months Components of Trade and Other Payables (Unaudited) | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Trade Payables | 49,686 | 41,787 | | Accrued Salaries and Employee Benefits | 35,222 | 38,922 | | Dividends Payable | 71,859 | — | | Advances from Customers | 4,151 | 4,792 | | Deposits Received | 3,404 | 3,704 | | VAT and Other Taxes | 7,213 | 10,384 | | Professional Service Fees | 6,629 | 8,163 | | Provision for Loss on Guarantee Liabilities | 23,047 | 22,680 | | Deferred Government Grants—Current Portion | 1,325 | 1,325 | | Amounts Due to Related Parties | 188 | 729 | | Other Payables | 10,791 | 6,458 | | **Total** | **213,515** | **138,944** | - Dividends payable increased from zero to **RMB 71,859 thousand**[60](index=60&type=chunk) Aging Analysis of Trade Payables (Unaudited) | Aging | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Within 6 Months | 39,078 | 26,160 | | 6 to 12 Months | 560 | 1,371 | | Over 1 Year | 963 | 2,954 | | 2 to 3 Years | 817 | 1,354 | | Over 3 Years | 8,268 | 9,948 | | **Total** | **49,686** | **41,787** | [22. Share Capital, Share Premium and Treasury Shares](index=24&type=section&id=22.%20Share%20Capital,%20Share%20Premium%20and%20Treasury%20Shares) As of June 30, 2025, the Group's number of issued and fully paid ordinary shares remained at 1,533,231,098, with stable share capital and share premium; no ordinary shares were repurchased or cancelled during the period, but some shares were repurchased and cancelled in 2024, resulting in a treasury shares balance Changes in Share Capital, Share Premium and Treasury Shares (Unaudited) | Item | Number of Issued and Fully Paid Ordinary Shares | Share Capital (RMB thousand) | Share Premium (RMB thousand) | Number of Treasury Shares | Treasury Shares (RMB thousand) | | :--- | :--- | :--- | :--- | :--- | :--- | | At January 1, 2024 | 1,565,632,098 | 962 | 1,489,876 | — | — | | Shares Repurchased | — | — | — | 78,897,000 | (80,221) | | Shares Cancelled | (32,401,000) | (23) | (33,398) | (32,401,000) | 33,421 | | **At June 30, 2025** | **1,533,231,098** | **939** | **1,456,478** | **46,496,000** | **(46,800)** | - No ordinary shares were repurchased or cancelled during the period ended June 30, 2025[63](index=63&type=chunk) [23. Capital Commitments](index=24&type=section&id=23.%20Capital%20Commitments) As of June 30, 2025, the Group's contracted but not yet incurred capital expenditure amounted to RMB 21,759 thousand, primarily for the acquisition of property, plant and equipment, a decrease from the end of 2024 Capital Commitments (Unaudited) | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Acquisition of Property, Plant and Equipment | 21,759 | 25,633 | [24. Related Party Disclosures](index=24&type=section&id=24.%20Related%20Party%20Disclosures) The Group has multiple transactions with related party Lepu Medical and its subsidiaries, including sales of medical devices, provision of medical product processing services, and purchases of medical device molds and components, all conducted in the ordinary course of business and in accordance with agreement terms, while key management personnel compensation decreased - Lepu Medical Technology (Beijing) Co., Ltd. is considered to be effectively controlled by Dr. Pu Zhongjie, the spouse of an executive director of the Group[66](index=66&type=chunk) Related Party Transactions (Unaudited) | Transaction Type | June 30, 2025 (RMB thousand) | June 30, 2024 (RMB thousand) | | :--- | :--- | :--- | | Sales of Medical Devices | 43,407 | 13,256 | | Income from Medical Product Processing Services | 1,435 | 1,019 | | Purchases of Medical Device Molds and Components | 2,704 | 1,127 | | Key Management Personnel Compensation | 1,889 | 2,662 | - Sales of medical devices to related companies significantly increased to **RMB 43,407 thousand**[67](index=67&type=chunk)[69](index=69&type=chunk) [25. Summary of Financial Assets and Financial Liabilities by Category](index=26&type=section&id=25.%20Summary%20of%20Financial%20Assets%20and%20Financial%20Liabilities%20by%20Category) As of June 30, 2025, the Group's total financial assets amounted to RMB 2,305,823 thousand, with financial assets measured at amortized cost accounting for the majority, and financial assets at fair value through profit or loss and financial assets at fair value through other comprehensive income both increasing, while financial liabilities are measured at amortized cost Classification of Financial Assets and Financial Liabilities (Unaudited) | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | **Financial Assets** | | | | —At Amortized Cost | 2,147,243 | 2,113,469 | | —At Fair Value Through Profit or Loss | 105,070 | 25,329 | | —At Fair Value Through Other Comprehensive Income | 53,510 | 26,363 | | **Total** | **2,305,823** | **2,165,161** | | **Financial Liabilities** | | | | Financial Liabilities at Amortized Cost | 145,653 | 130,813 | Valuation of Financial Assets at Fair Value (Unaudited) | Description | June 30, 2025 (RMB thousand) | Fair Value Hierarchy | Valuation Techniques and Key Inputs | | :--- | :--- | :--- | :--- | | Financial Assets at FVTPL—Wealth Management Products | 85,230 | Level 3 | Market approach/financial institution quotes, expected return rate 1.05% to 2.4% | | Financial Assets at FVTPL—Unlisted Investment Funds | 19,840 | Level 3 | Market approach/latest observable transaction prices, comparable company valuations, marketability discount rate 14% to 18% | | Financial Assets at FVTOCI—Listed Equity Securities | 53,510 | Level 1 | Market approach/quoted market prices | - Fair values of wealth management products and unlisted investment funds are classified as **Level 3** in the fair value hierarchy, while listed equity securities are classified as **Level 1**[72](index=72&type=chunk)[73](index=73&type=chunk)[76](index=76&type=chunk) [26. Events After the Reporting Period](index=28&type=section&id=26.%20Events%20After%20the%20Reporting%20Period) Except for matters already disclosed elsewhere in the condensed consolidated interim financial statements, no other significant events occurred after June 30, 2025 - No significant events occurred after the reporting period, other than those already disclosed[77](index=77&type=chunk) [Management Discussion and Analysis](index=29&type=section&id=Management%20Discussion%20and%20Analysis) [Market and Business Review](index=29&type=section&id=Market%20and%20Business%20Review) In the first half of 2025, despite a global economic slowdown, China's medical device industry demonstrated resilience, maintaining its position as the world's second-largest, driven by national policy support, demographic changes, and increased health awareness; while volume-based procurement compressed profit margins, it also spurred innovation and domestic brand substitution, leading to the Group's revenue increasing by 22.4% to RMB 414.4 million, primarily due to significant growth in the blood purification business, with gross profit up 13.4%, but profit attributable to owners of the Company decreased by 6.0%, yet the Group maintained a stable financial position and healthy cash flow, and declared an interim dividend of 4.4 HK cents per share - China's medical device industry remains the **second largest globally**, driven by national policy support, demographic evolution, and rising public health awareness[78](index=78&type=chunk) - Volume-based procurement policies are becoming normalized, compressing profit margins but accelerating domestic brand substitution and industry consolidation[78](index=78&type=chunk) 2025 First Half Group Financial Performance | Indicator | Amount (RMB million) | YoY Change | | :--- | :--- | :--- | | Revenue | 414.4 | +22.4% | | Gross Profit | 212.8 | +13.4% | | Overall Gross Profit Margin | 51.3% | -4.1% | | Profit Attributable to Owners of the Company | 66.0 | -6.0% | | Cash and Cash Equivalents | 1,693.3 | Stable and healthy | - The Board declared an interim dividend of **4.4 HK cents per share** for the six months ended June 30, 2025[79](index=79&type=chunk) [Business Strategies and Outlook](index=30&type=section&id=Business%20Strategies%20and%20Outlook) Puhua Heshun Group focuses on high-growth, high-margin medical device sub-sectors, building three core business segments: infusion products, blood purification products, and regenerative medical biomaterials; the Group will continue to innovate and develop products, expand capacity and product portfolio, broaden its marketing network, improve operational efficiency, actively respond to volume-based procurement challenges, accelerate product internationalization, increase R&D investment, advance product registration and technological innovation, and implement share repurchase and dividend policies to reward shareholders - The Group will continue to increase R&D investment, promote technological upgrades and market expansion for key products, strictly control product quality, and optimize marketing strategies[86](index=86&type=chunk) - Deepen the competitive advantage of domestic brand substitution in the local market and accelerate the internationalization of blood purification and other products[86](index=86&type=chunk) - Sichuan Ruijian Medical is steadily advancing its listing application on the Beijing Stock Exchange[91](index=91&type=chunk) - The Board has granted a general mandate to repurchase up to **10%** of the issued shares within the next 12 months and has initiated a share repurchase program[92](index=92&type=chunk)[93](index=93&type=chunk) - The Group adopted a revised dividend policy, intending to distribute no less than **70%** of the profit attributable to owners of the Company for the financial year as dividends[94](index=94&type=chunk) [Infusion Business](index=30&type=section&id=Infusion%20Business) The infusion business generated revenue of RMB 113.4 million in the first half of 2025, a year-on-year decrease of 14.5%, accounting for 27.4% of the Group's total revenue, primarily due to volume-based procurement policies and weak market demand; the Group is addressing these challenges through a low-cost, high-quality strategy, improving operational efficiency, adjusting marketing strategies, and R&D innovation Infusion Business Revenue | Indicator | 2025 First Half (RMB million) | YoY Change | | :--- | :--- | :--- | | Revenue | 113.4 | -14.5% | | % of Group's Consolidated Revenue | 27.4% | | - Business decline primarily due to expanded regional coverage of volume-based procurement policies and weak market demand[82](index=82&type=chunk) - The Group continuously improves the functionality and safety of existing products and actively focuses on emerging hot areas in infusion products, expanding new markets through R&D innovation[82](index=82&type=chunk) [Blood Purification Business](index=30&type=section&id=Blood%20Purification%20Business) The blood purification business, operated by Sichuan Ruijian Medical, offers blood dialysis consumables and equipment; this market has a significant demand gap, with domestic brands gradually emerging, and despite volume-based procurement compressing profit margins, the company's blood dialyzers and other products successfully won bids, leading to significant sales growth, with this business generating RMB 297.4 million in revenue in the first half of 2025, a year-on-year increase of 44.5%, accounting for 71.8% of the Group's total revenue - China's blood dialysis medical device market has broad development potential, with domestic brands upgrading from consumables to equipment[83](index=83&type=chunk)[84](index=84&type=chunk) - The company's blood dialyzers, hemodiafiltration filters, bloodlines, and arteriovenous fistula needles all successfully won bids in volume-based procurement[84](index=84&type=chunk) Blood Purification Business Revenue | Indicator | 2025 First Half (RMB million) | YoY Change | | :--- | :--- | :--- | | Revenue | 297.4 | +44.5% | | % of Group's Consolidated Revenue | 71.8% | | [Regenerative Medical Biomaterials Business](index=31&type=section&id=Regenerative%20Medical%20Biomaterials%20Business) The regenerative medical biomaterials business focuses on animal-derived tissue regenerative medical biomaterials and human tissue repair and replacement products, with a comprehensive product pipeline and applications spanning medical and aesthetic fields; in the first half of 2025, this business achieved revenue of RMB 3.5 million for the first time, accounting for 0.9% of the Group's total revenue, and the Group believes this segment has extremely high growth potential - The regenerative medical biomaterials market is vast, driven by national economic development, improved living standards, and rapid advancements in biomedical materials[85](index=85&type=chunk) Regenerative Medical Biomaterials Business Revenue | Indicator | 2025 First Half (RMB million) | % of Group's Consolidated Revenue | | :--- | :--- | :--- | | Revenue | 3.5 | 0.9% | - The Group has obtained **58 product registration certificates**, covering infusion sets, blood dialyzers, biological patches, and other products, with multiple products under development[85](index=85&type=chunk) [Focus on Innovation and Research and Development](index=32&type=section&id=Focus%20on%20Innovation%20and%20Research%20and%20Development) The Group continuously enhances its technological innovation and R&D capabilities with a strong R&D team; as of June 30, 2025, it has obtained 58 product registration certificates, holds 177 product patents and copyrights, and has applied for 58 new patents, with R&D processes progressing smoothly across all business segments, including new products such as aesthetic injection needles, electronic pen-style injectors, continuous blood purification therapy devices, and injectable tissue fillers - As of June 30, 2025, the Group has obtained **58 product registration certificates**, holds **177 product patents and copyrights**, and has applied for **58 new patents**[88](index=88&type=chunk) - Infusion business segment: Aesthetic product injectable blunt-tip injection needle product is expected to obtain registration certificate in the second half of 2025; application for registration of electronic pen-style injector for insulin injection has been submitted[88](index=88&type=chunk) - Blood purification business segment: Applications for registration of hemodiafiltration filters for continuous blood purification therapy and single-use hemoperfusion cartridges have been submitted[88](index=88&type=chunk) - Regenerative medical biomaterials segment: Application for registration of injectable tissue filler for aesthetic use has been submitted; clinical trials for biological sponge products will commence in the second half of 2025; dura mater patch product is in the registration review stage[88](index=88&type=chunk) [Expansion of Distribution Network](index=33&type=section&id=Expansion%20of%20Distribution%20Network) The Group possesses an experienced professional sales and marketing team that supports its domestic and international distribution networks and strengthens product promotion; team members average ten years of experience, with nearly half having medical education backgrounds, and the Group enhances operational efficiency by optimizing sales structure, adjusting bidding strategies, and implementing a "low-cost, high-quality" strategy - The Group's sales backbone averages **ten years of experience**, with nearly half of the members having medical education backgrounds[90](index=90&type=chunk) - The Group enhances operational efficiency by optimizing sales structure, flexibly adjusting bidding strategies, and implementing a "low-cost, high-quality" strategy[90](index=90&type=chunk) [Progress of Sichuan Ruijian Medical Spin-off Listing](index=33&type=section&id=Progress%20of%20Sichuan%20Ruijian%20Medical%20Spin-off%20Listing) Sichuan Ruijian Medical submitted its subsequent listing application to the Beijing Stock Exchange on March 25, 2025, and is steadily advancing its listing process, with the completion date dependent on the exchange's and CSRC's review procedures and market conditions - Sichuan Ruijian Medical submitted its subsequent listing application to the Beijing Stock Exchange on **March 25, 2025**[91](index=91&type=chunk) - The completion date of the listing depends on the review procedures and market conditions[91](index=91&type=chunk) [Strategic Share Repurchase Program](index=33&type=section&id=Strategic%20Share%20Repurchase%20Program) The Board has been authorized to repurchase up to 10% of the issued shares and initiated a share repurchase program on July 4, 2025; the timing, price, and amount of repurchases will be determined based on market conditions, with each repurchase price not exceeding 5% above the average closing price of the preceding five trading days, and funds will come from existing available cash - The Board has been authorized to repurchase up to **10%** (i.e., a maximum of 148,673,509 shares) of the issued shares[92](index=92&type=chunk) - The Company initiated a share repurchase program on **July 4, 2025**, with the timing, price, and amount of repurchases to be determined based on market conditions[92](index=92&type=chunk)[93](index=93&type=chunk) - The actual purchase price for each repurchase shall not exceed **5%** or more above the average closing price for the five trading days immediately preceding each repurchase[93](index=93&type=chunk) [Active Sharing of Operating Results](index=34&type=section&id=Active%20Sharing%20of%20Operating%20Results) The Group adopted a revised dividend policy in August 2023, intending to distribute no less than 70% of the profit attributable to owners of the Company for the financial year as dividends; the Board has declared an interim dividend of 4.4 HK cents per share, demonstrating its commitment to shareholder returns and optimism about business prospects - The Group adopted a revised dividend policy in August 2023, intending to distribute no less than **70%** of the profit attributable to owners of the Company for the financial year as dividends[94](index=94&type=chunk) - The Board has declared an interim dividend of **4.4 HK cents per share** for the six months ended June 30, 2025[94](index=94&type=chunk) [Financial Review](index=35&type=section&id=Financial%20Review) This section provides a detailed review of the Group's financial performance in the first half of 2025, including revenue, gross profit, various expenses, operating profit, finance income, income tax expense, and profit for the period; strong revenue growth in the blood purification business offset a decline in the infusion business, while gross profit margin decreased due to the blood purification business, and expenses increased due to share-based payments and intangible asset amortization; non-HKFRS measures show an increase in adjusted net profit, and the section also analyzes trade and other receivables, inventories, fixed assets, investment properties, intangible assets and goodwill, loans receivable, non-current financial assets, financial resources, capital commitments, gearing ratio, and various risks 2025 First Half Financial Overview (Unaudited) | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | Change | | :--- | :--- | :--- | :--- | | Total Revenue | 414,373 | 338,417 | +22.4% | | Gross Profit | 212,779 | 187,621 | +13.4% | | Gross Profit Margin | 51.3% | 55.4% | -4.1% | | Profit for the Period | 86,619 | 93,639 | -7.5% | | Profit Attributable to Owners of the Company | 65,999 | 70,219 | -6.0% | | Adjusted Profit for the Period | 119,131 | 103,341 | +15.3% | | Adjusted Profit Attributable to Owners of the Company | 83,402 | 75,229 | +10.9% | - Strong sales growth in the blood purification business and first-time revenue from the regenerative medical biomaterials business offset the decrease in infusion business sales[96](index=96&type=chunk) - Gross profit margin decreased primarily due to a decline in the gross profit margin of the blood purification business, affected by volume-based procurement policies and an increased proportion of lower-margin export sales[98](index=98&type=chunk) - General and administrative expenses increased by **33.3%**, mainly due to increased share-based payment expenses and amortization of intangible assets in the blood purification and regenerative medical biomaterials businesses[102](index=102&type=chunk)[103](index=103&type=chunk) - Operating profit decreased by **5.1%**, primarily affected by gross profit increase being offset by share-based payment expenses, decreased operating profit in the infusion business, and increased operating loss in the regenerative medical biomaterials business[108](index=108&type=chunk) - Profit for the period and profit attributable to owners of the Company decreased by **7.5%** and **6.0%** respectively, mainly due to decreased operating profit and finance income[111](index=111&type=chunk) [Revenue](index=35&type=section&id=Revenue) The Group's total revenue increased by 22.4% year-on-year to RMB 414.4 million; blood purification business revenue grew strongly by 44.5% to RMB 297.4 million, primarily driven by domestic and international market expansion and increased demand, while infusion business revenue decreased by 14.5% to RMB 113.4 million due to volume-based procurement and weak market demand, and the regenerative medical biomaterials business recorded revenue of RMB 3.5 million for the first time Revenue by Business Segment (Unaudited) | Business Segment | 2025 (RMB thousand) | 2024 (RMB thousand) | Change | | :--- | :--- | :--- | :--- | | Infusion Business | 113,387 | 132,618 | -14.5% | | Blood Purification Business | 297,444 | 205,799 | +44.5% | | Regenerative Medical Biomaterials Business | 3,542 | — | N/A | | **Total Revenue** | **414,373** | **338,417** | **+22.4%** | - Blood purification business revenue significantly increased, primarily due to efforts to expand domestic and international markets and increased demand leading to higher sales volume, partially offset by a decrease in average selling price[96](index=96&type=chunk) - Infusion business revenue decreased, primarily due to expanded regional coverage of volume-based procurement policies and weak market demand[97](index=97&type=chunk) - Regenerative medical biomaterials business recorded revenue for the first time, primarily due to the successful market launch of breast tissue patches[97](index=97&type=chunk) [Gross Profit](index=36&type=section&id=Gross%20Profit) The Group's gross profit increased by 13.4% year-on-year to RMB 212.8 million, but the gross profit margin decreased from 55.4% to 51.3%; this decline was mainly due to a decrease in the gross profit margin of the blood purification business, affected by lower unit selling prices due to volume-based procurement policies and an increased proportion of lower-margin export sales, while the infusion business gross profit margin also slightly decreased, and the regenerative medical biomaterials business gross profit margin was 58.0% Gross Profit and Gross Profit Margin by Business Segment (Unaudited) | Business Segment | 2025 Gross Profit Margin | 2024 Gross Profit Margin | | :--- | :--- | :--- | | Blood Purification Business | 48.2% | 52.4% | | Infusion Business | 59.4% | 60.2% | | Regenerative Medical Biomaterials Business | 58.0% | N/A | | **Group Overall** | **51.3%** | **55.4%** | - The decrease in blood purification business gross profit margin was mainly due to lower unit selling prices resulting from volume-based procurement policies and an increased proportion of lower-margin export sales[98](index=98&type=chunk) [Selling and Marketing Expenses](index=36&type=section&id=Selling%20and%20Marketing%20Expenses) Selling and marketing expenses increased by 9.6% year-on-year to RMB 43.8 million; expenses for the blood purification business increased by 55.6% to RMB 22.6 million, primarily due to increased share-based payment expenses and staff costs, while the regenerative medical biomaterials business incurred selling and marketing expenses of RMB 2.3 million for the first time, and expenses for the infusion business decreased, benefiting from cost control measures and reduced marketing activities Selling and Marketing Expenses (Unaudited) | Business Segment | 2025 (RMB million) | 2024 (RMB million) | Change | | :--- | :--- | :--- | :--- | | Blood Purification Business | 22.6 | 14.5 | +55.6% | | Regenerative Medical Biomaterials Business | 2.3 | — | N/A | | Infusion Business | 18.9 | 25.4 | -25.6% | | **Group Overall** | **43.8** | **39.9** | **+9.6%** | - Share-based payment expenses for the blood purification business increased from **RMB 1.4 million to RMB 4.3 million**[100](index=100&type=chunk) - Selling and marketing expenses for the infusion business decreased, primarily due to effective cost control measures and reduced marketing activities[101](index=101&type=chunk) [General and Administrative Expenses](index=37&type=section&id=General%20and%20Administrative%20Expenses) General and administrative expenses increased by 33.3% year-on-year to RMB 83.5 million; expenses for the blood purification business increased by 31.5% to RMB 37.6 million, primarily due to increased share-based payment expenses and staff costs, while expenses for the regenerative medical biomaterials business significantly increased by 195.3% to RMB 21.7 million, mainly due to increased amortization of fair value increment of intangible assets, and expenses for Group headquarters and the infusion business decreased, primarily due to lower property maintenance costs General and Administrative Expenses (Unaudited) | Business Segment | 2025 (RMB million) | 2024 (RMB million) | Change | | :--- | :--- | :--- | :--- | | Blood Purification Business | 37.6 | 28.6 | +31.5% | | Regenerative Medical Biomaterials Business | 21.7 | 7.3 | +195.3% | | Group Headquarters and Infusion Business | 24.2 | 26.7 | -9.3% | | **Group Overall** | **83.5** | **62.6** | **+33.3%** | - Share-based payment expenses for the blood purification business increased from **RMB 3.3 million to RMB 9.3 million**[102](index=102&type=chunk) - Amortization of fair value increment of intangible assets for the regenerative medical biomaterials business increased from **RMB 3.7 million to RMB 19.8 million**[103](index=103&type=chunk) - All intangible assets with fair value increment recognized upon acquisition of Beijing Ruijian Bio commenced amortization from August 1, 2024, with monthly fixed amortization increasing to approximately **RMB 3.3 million**[104](index=104&type=chunk) [Research and Development Expenses](index=38&type=section&id=Research%20and%20Development%20Expenses) Research and development expenses increased by 9.2% year-on-year to RMB 22.5 million; R&D expenses for the blood purification business increased to RMB 12.4 million, primarily due to increased investment in R&D projects, while R&D expenses for the regenerative medical biomaterials business decreased to RMB 4.1 million, mainly because some R&D projects were not in a phase requiring substantial R&D investment Research and Development Expenses by Business Segment (Unaudited) | Business Segment | 2025 (RMB million) | 2024 (RMB million) | Change | | :--- | :--- | :--- | :--- | | Blood Purification Business | 12.4 | 7.9 | +57.0% | | Regenerative Medical Biomaterials Business | 4.1 | 6.3 | -35.0% | | **Group Overall** | **22.5** | **20.6** | **+9.2%** | - Blood purification business R&D expenses increased primarily due to increased investment in R&D projects[105](index=105&type=chunk) - Regenerative medical biomaterials business R&D expenses decreased primarily because some R&D projects were not in a phase requiring substantial R&D investment[105](index=105&type=chunk) [Other Income and Gains and Losses—Net](index=38&type=section&id=Other%20Income%20and%20Gains%20and%20Losses%E2%80%94Net) Other net gains decreased by 17.9% year-on-year to RMB 14.8 million, primarily due to a foreign exchange loss of RMB 1.6 million (compared to a gain of RMB 3.9 million in the prior period) resulting from fluctuations in RMB and USD exchange rates, partially offset by increased rental income Other Income and Gains and Losses—Net (Unaudited) | Indicator | 2025 (RMB million) | 2024 (RMB million) | Change | | :--- | :--- | :--- | :--- | | Other Net Gains | 14.8 | 18.1 | -17.9% | | Net Foreign Exchange (Loss)/Gain | (1.6) | 3.9 | From gain to loss | | Rental Income | Increased | Increased | | [Fair Value Loss on Investment Properties](index=39&type=section&id=Fair%20Value%20Loss%20on%20Investment%20Properties) Fair value loss on investment properties decreased from RMB 0.4 million in the prior period to RMB 0.3 million in the current period, primarily due to a downturn in the leasing market Fair Value Loss on Investment Properties (Unaudited) | Indicator | 2025 (RMB million) | 2024 (RMB million) | Change | | :--- | :--- | :--- | :--- | | Fair Value Loss | 0.3 | 0.4 | -25.0% | | **Primary Reason** | Downturn in leasing market | Downturn in leasing market | | [Operating Profit](index=39&type=section&id=Operating%20Profit) Operating profit decreased by 5.1% year-on-year to RMB 80.2 million; operating profit in the blood purification business increased but was offset by share-based payment expenses, while operating profit in Group headquarters and the infusion business decreased, and operating loss in the regenerative medical biomaterials business increased, primarily due to increased amortization of intangible assets expenses without a corresponding increase in sales Operating Profit (Unaudited) | Indicator | 2025 (RMB million) | 2024 (RMB million) | Change | | :--- | :--- | :--- | :--- | | Operating Profit | 80.2 | 84.5 | -5.1% | | Blood Purification Business Operating Profit | 70.9 | 60.6 | +17.0% | | Group Headquarters and Infusion Business Operating Profit | 34.1 | 37.5 | -9.0% | | Regenerative Medical Biomaterials Business Operating Loss | (24.8) | (13.6) | +82.4% | | **Primary Reasons** | Increased share-based payment expenses, increased amortization of intangible assets | | | [Finance Income—Net](index=39&type=section&id=Finance%20Income%E2%80%94Net) Net finance income decreased by 17.5% year-on-year to RMB 22.9 million, primarily due to lower bank deposit interest rates Finance Income—Net (Unaudited) | Indicator | 2025 (RMB million) | 2024 (RMB million) | Change | | :--- | :--- | :--- | :--- | | Net Finance Income | 22.9 | 27.8 | -17.5% | | **Primary Reason** | Lower bank deposit interest rates | | | [Income Tax Expense](index=39&type=section&id=Income%20Tax%20Expense) Income tax expense decreased by 11.6% year-on-year to RMB 16.5 million, primarily due to a decrease in assessable profit Income Tax Expense (Unaudited) | Indicator | 2025 (RMB million) | 2024 (RMB million) | Change | | :--- | :--- | :--- | :--- | | Income Tax Expense | 16.5 | 18.7 | -11.6% | | **Primary Reason** | Decrease in assessable profit | | | [Profit for the Period and Profit Attributable to Owners of the Company](index=39&type=section&id=Profit%20for%20the%20Period%20and%20Profit%20Attributable%20to%20Owners%20of%20the%20Company) Profit for the period and profit attributable to owners of the Company decreased by 7.5% and 6.0% respectively, to RMB 86.6 million and RMB 66.0 million, primarily due to decreased operating profit and finance income Profit for the Period and Profit Attributable to Owners of the Company (Unaudited) | Indicator | 2025 (RMB million) | 2024 (RMB million) | Change | | :--- | :--- | :--- | :--- | | Profit for the Period | 86.6 | 93.6 | -7.5% | | Profit Attributable to Owners of the Company | 66.0 | 70.2 | -6.0% | | **Primary Reasons** | Decreased operating profit and finance income | | | [Non-HKFRS Measures—Adjusted Net Profit and Adjusted Net Profit Attributable to Owners of the Company](index=40&type=section&id=Non-HKFRS%20Measures%E2%80%94Adjusted%20Net%20Profit%20and%20Adjusted%20Net%20Profit%20Attributable%20to%20Owners%20of%20the%20Company) To supplement HKFRS, the Group provides adjusted net profit and adjusted net profit attributable to owners of the Company; these non-HKFRS measures, by adding back share-based payment expenses, professional service fees for spin-off, amortization of intangible assets, and related income tax effects, better reflect the Group's operating performance, with adjusted net profit increasing by 15.3% year-on-year to RMB 119.1 million, and adjusted net profit attributable to owners of the Company increasing by 10.9% year-on-year to RMB 83.4 million - Non-HKFRS measures, by excluding non-cash or non-recurring expenses, facilitate comparison of operating performance across periods and companies[113](index=113&type=chunk) Reconciliation of Non-HKFRS Measures (Unaudited) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | Change | | :--- | :--- | :--- | :--- | | Profit for the Period | 86,619 | 93,639 | -7.5% | | Add: Share-based Payment Expenses for Blood Purification Business | 14,269 | 4,975 | +186.8% | | Add: Professional Service Fees Related to Spin-off | 1,790 | 1,970 | -9.2% | | Add: Amortization of Fair Value Increment of Intangible Assets Recognized upon Acquisition of Beijing Ruijian Bio | 19,841 | 3,704 | +435.7% | | Less: Income Tax Impact of Above Non-HKFRS Adjustments | (3,388) | (947) | +257.8% | | **Adjusted Net Profit for the Period** | **119,131** | **103,341** | **+15.3%** | | Profit Attributable to Owners of the Company | 65,999 | 70,219 | -6.0% | | Add: Share-based Payment Expenses for Blood Purification Business | 6,919 | 2,412 | +187.0% | | Add: Professional Service Fees Related to Spin-off | 868 | 955 | -9.0% | | Add: Amortization of Fair Value Increment of Intangible Assets Recognized upon Acquisition of Beijing Ruijian Bio | 11,548 | 2,156 | +435.6% | | Less: Income Tax Impact of Above Non-HKFRS Adjustments | (1,932) | (513) | +276.6% | | **Adjusted Net Profit Attributable to Owners of the Company** | **83,402** | **75,229** | **+10.9%** | - Share-based payment expenses for the blood purification business significantly increased, primarily due to Sichuan Ruijian Medical's implementation of an equity incentive plan in April 2024[115](index=115&type=chunk)[116](index=116&type=chunk) [Trade and Other Receivables](index=42&type=section&id=Trade%20and%20Other%20Receivables) As of June 30, 2025, the Group's trade and other receivables increased by RMB 25.5 million to RMB 192.3 million, primarily due to extended credit periods from increased overseas sales in the blood purification business; receivables for Group headquarters and the infusion business also slightly increased, mainly due to a reversal of impairment loss on trade receivables, and the Group applies the expected credit loss model, regularly reviewing customer financial performance and credit risk Trade and Other Receivables (Unaudited) | Business Segment | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | Change | | :--- | :--- | :--- | :--- | | Blood Purification Business | 56.1 | 35.4 | +20.7 | | Group Headquarters and Infusion Business | 134.5 | 129.9 | +4.6 | | **Group Total** | **192.3** | **166.8** | **+25.5** | - Increase in blood purification business receivables primarily due to increased overseas sales, which typically offer longer credit periods[117](index=117&type=chunk) - Increase in Group headquarters and infusion business receivables primarily due to a reversal of impairment loss on trade receivables[117](index=117&type=chunk) - As of June 30, 2025, the Group made a loss provision of approximately **RMB 15.3 million** for trade receivables totaling approximately **RMB 98.1 million**[119](index=119&type=chunk) [Inventories](index=43&type=section&id=Inventories) Inventories increased by 8.3% from RMB 120.3 million as of December 31, 2024, to RMB 130.2 million as of June 30, 2025, primarily due to the blood purification and infusion businesses stocking up to meet increased sales orders and anticipated market demand Inventories by Business Segment (Unaudited) | Business Segment | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | Change | | :--- | :--- | :--- | :--- | | Blood Purification Business | 85.6 | 79.4 | +6.2 | | Infusion Business | 35.8 | 32.9 | +2.9 | | **Group Total** | **130.2** | **120.3** | **+9.9** | - Inventory increase primarily due to stocking up to meet increased sales orders and anticipated market demand[120](index=120&type=chunk) [Property, Plant and Equipment](index=43&type=section&id=Property,%20Plant%20and%20Equipment) As of June 30, 2025, the Group's property, plant and equipment increased by RMB 5.4 million to RMB 897.1 million, primarily due to the combined effect of production line construction, new production equipment purchases, and depreciation Property, Plant and Equipment (Unaudited) | Indicator | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | Change | | :--- | :--- | :--- | :--- | | Property, Plant and Equipment | 897.1 | 891.7 | +5.4 | | **Primary Reasons** | Combined effect of production line construction, new production equipment purchases, and depreciation | | | [Investment Properties](index=43&type=section&id=Investment%20Properties) As of June 30, 2025, the Group's investment properties decreased by RMB 0.3 million to RMB 262.6 million, primarily due to fair value losses on properties Investment Properties (Unaudited) | Indicator | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | Change | | :--- | :--- | :--- | :--- | | Investment Properties | 262.6 | 262.9 | -0.3 | | **Primary Reason** | Fair value losses on properties | | | [Intangible Assets and Goodwill](index=43&type=section&id=Intangible%20Assets%20and%20Goodwill) As of June 30, 2025, the Group's net intangible assets and goodwill decreased by RMB 25.6 million to RMB 1,606.8 million, primarily due to amortization of intangible assets of approximately RMB 32.5 million, partially offset by an increase in capitalized development costs of approximately RMB 6.9 million Net Intangible Assets and Goodwill (Unaudited) | Indicator | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | Change | | :--- | :--- | :--- | :--- | | Net Intangible Assets and Goodwill | 1,606.8 | 1,632.4 | -25.6 | | **Primary Reasons** | Combined effect of amortization of intangible assets and increase in capitalized development costs | | | - Amortization of intangible assets was approximately **RMB 32.5 million**, and capitalized development costs increased by approximately **RMB 6.9 million**[124](index=124&type=chunk) [Loans Receivable](index=44&type=section&id=Loans%20Receivable) As of June 30, 2025, the Group's total loans receivable amounted to RMB 300.0 million, including two loans granted to independent third parties; as of the date of this announcement, the bo

Financial Performance - Revenue increased by approximately 17.7% from RMB 75.0 million for the six months ended June 30, 2024, to RMB 88.3 million for the six months ended June 30, 2025[5] - Gross profit for the six months ended June 30, 2025, was approximately RMB 38.0 million, compared to RMB 28.5 million for the same period in 2024[5] - Net profit for the six months ended June 30, 2025, was approximately RMB 31.6 million, up from RMB 14.9 million for the six months ended June 30, 2024[5] - Basic and diluted earnings per share increased to RMB 6.32 for the six months ended June 30, 2025, compared to RMB 3.29 for the same period in 2024[6] - The company reported a total comprehensive income of RMB 31.3 million for the six months ended June 30, 2025, compared to RMB 14.8 million for the same period in 2024[6] - Profit for the period rose from approximately RMB 14.9 million in the first half of 2024 to approximately RMB 31.6 million in the first half of 2025, with a net profit margin increasing from about 19.8% to 35.8%[54] Assets and Liabilities - Total assets less current liabilities increased to RMB 529.3 million as of June 30, 2025, from RMB 489.6 million as of December 31, 2024[7] - Cash and cash equivalents increased to RMB 285.1 million as of June 30, 2025, compared to RMB 226.1 million as of December 31, 2024[7] - Trade receivables rose to RMB 60.3 million as of June 30, 2025, from RMB 49.6 million as of December 31, 2024[7] - Non-current assets increased to RMB 249.8 million as of June 30, 2025, from RMB 232.9 million as of December 31, 2024[7] - Trade payables as of June 30, 2025, amounted to RMB 37,545 thousand, a decrease from RMB 52,856 thousand as of December 31, 2024[31] - Bank loans with collateral increased significantly to RMB 135,000 thousand as of June 30, 2025, compared to RMB 40,000 thousand as of December 31, 2024[30] - The debt-to-equity ratio increased significantly to 29.0% as of June 30, 2025, from 9.2% as of December 31, 2024, primarily due to bank borrowings rising from RMB 40.0 million to RMB 143.9 million[57] Revenue Sources and Sales - Revenue for the six months ended June 30, 2025, was RMB 88,252,000, an increase of 17.3% from RMB 75,011,000 in the same period of 2024[18] - Sales to major customers included Customer A at RMB 13,598,000 (up 8.0% from RMB 12,595,000), Customer B at RMB 10,814,000 (up 7.8% from RMB 10,028,000), and Customer C at RMB 9,747,000 (up 7.5% from RMB 9,065,000) for the six months ended June 30, 2025[18] - The sales volume of potted vegetable products rose from approximately 5.0 million pots in the first half of 2024 to approximately 5.8 million pots in the first half of 2025, an increase of about 16%[44] Costs and Expenses - The cost of sales rose from approximately RMB 46.5 million in the first half of 2024 to approximately RMB 50.2 million in the first half of 2025, an increase of about 8.1%[45] - Administrative and other expenses increased from approximately RMB 6.9 million in the first half of 2024 to approximately RMB 11.4 million in the first half of 2025, primarily due to increased professional fees and R&D expenses[51] - The group’s employee costs, including director remuneration, totaled RMB 20,828,000 for the six months ended June 30, 2025, compared to RMB 19,362,000 in the same period of 2024[23] Dividends and Shareholder Information - The company did not recommend the payment of an interim dividend for the six months ended June 30, 2025[5] - The group did not declare or recommend any dividends for the six months ended June 30, 2025, consistent with the previous year[24] - As of June 30, 2025, Mr. Zhang holds 273,636,275 shares, representing 54.73% of the company's total shares[80] - Mr. Cui holds 9,900,010 shares, representing 1.98% of the company's total shares[80] - The major shareholder, Huide International, holds 273,636,275 shares, representing approximately 54.73% of the total shares[83] Corporate Governance - The company has adopted the corporate governance code and has complied with all applicable provisions during the reporting period[73] - The board of directors has confirmed their responsibility for the preparation of the company's financial statements, which have not been audited[75] - The company has established a balance of power and authority between the board and management, despite the chairman and CEO being the same person[73] - The company plans to continue reviewing and enhancing its corporate governance practices to ensure compliance with the corporate governance code[72] Future Plans and Investments - The group plans to achieve sustainable growth in sales and profits by expanding planting capacity and establishing new planting bases in new regional markets[71] - The planned use of proceeds includes RMB 24.4 million for expanding planting capacity in existing markets and RMB 9.5 million for establishing new planting bases in new geographic markets[76] - The establishment of a dedicated organic substrate production base has been postponed to December 2025 due to delays in obtaining necessary raw materials from overseas[78] - The upgrade of the IT system to improve operational efficiency has also been delayed to December 2025 as the company is still searching for a suitable ERP system provider[78] Related Party Transactions - The company has entered into related party transactions, including a maximum mortgage agreement with a bank for RMB 28 million to secure debts of related parties[86] - The total claims under the related party agreements amount to RMB 28 million, secured by the same asset[87] - The company has entered into related transactions under the Li Tai Asset Mortgage Agreement and the Dongfang Mingzhu Asset Mortgage Agreement, with the highest applicable percentage rates exceeding 5% but below 25%[88] Audit and Compliance - The Audit Committee has reviewed the unaudited consolidated interim financial information for the six months ended June 30, 2025, confirming compliance with applicable accounting standards and regulations[94] - The company failed to comply with notification and announcement requirements under the listing rules regarding the asset mortgage agreements due to unintentional oversight[89] - The company has confirmed that the financial information disclosed is adequate and complies with legal requirements[94]