[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]

[Executive Summary](index=2&type=section&id=Executive%20Summary) This report period saw significant progress in clinical trial projects and pipeline development, with flagship product Suciraslimab (SM03) showing breakthrough preclinical results in Systemic Lupus Erythematosus (SLE) treatment, and key product SM17 achieving positive Phase 1b results for Atopic Dermatitis (AD) [Business Summary](index=2&type=section&id=Business%20Summary) The company made significant progress in clinical trials and pipeline development, with SM03 showing breakthrough preclinical results in SLE and SM17 achieving positive Phase 1b results for AD - Suciraslimab (SM03) achieved breakthrough preclinical results in in vitro studies for SLE treatment, showing potential to reduce proteinuria and alleviate Lupus Nephritis (LN), with three competitive advantages: "non-depleting B-cell modulation," "dual mechanism and bidirectional regulation," and "organ protection"[4](index=4&type=chunk) - The company strategically withdrew the Biologics License Application (BLA) for Suciraslimab in Rheumatoid Arthritis (RA) and decided to fully accelerate its clinical development for SLE treatment[4](index=4&type=chunk) - SM17 achieved positive topline results in a Phase 1b study for moderate-to-severe Atopic Dermatitis (AD), with clinical data showing faster and more significant itch relief, superior lesion recovery, and better safety than JAK inhibitors, positioning it as a potential first-in-class and best-in-class therapy for AD[4](index=4&type=chunk) - The Investigational New Drug (IND) application for anti-CGC antibody (the world's first humanized anti-γc antibody) for Alopecia Areata treatment has been initiated, with submission expected as early as 2026[4](index=4&type=chunk) - During the reporting period, the company published two academic papers in *The Journal of Immunology* and *Journal of Neuroinflammation*, revealing the role of anti-γc antibody hC2 in autoimmune diseases and the dual mechanism of Suciraslimab in Alzheimer's disease, respectively[5](index=5&type=chunk)[6](index=6&type=chunk) [Financial Summary](index=3&type=section&id=Financial%20Summary) For the six months ended June 30, 2025, the company significantly reduced losses, primarily due to lower R&D and employment costs, while successfully raising substantial funds through new share subscriptions Key Financial Indicators Comparison (For the six months ended June 30) | Indicator | 2025 (RMB million) | 2024 (RMB million) | Change (RMB million) | Change Rate | Primary Reason | | :--- | :--- | :--- | :--- | :--- | :--- | | Loss for the Period | 49.8 | 90.6 | (40.8) | -44.9% | R&D laboratory consumables and trial costs decreased; R&D and administrative employee employment costs decreased | | Total Available Funds (Period End) | 125.7 | 141.4 (Dec 31, 2024) | (15.7) | -11.1% | Repayment of bank borrowings, capital expenditure, and net cash outflow from operating activities offset by proceeds from share issuance | Share Subscription Financing Details | Subscription Event | Net Proceeds Raised (HKD million) | Completion Date | | :--- | :--- | :--- | | May 2025 | 124.0 | May 2025 | | August 2025 | 369.5 | August 2025 | - The Board has resolved not to declare an interim dividend for the reporting period[7](index=7&type=chunk) [Business Operations and R&D Progress](index=4&type=section&id=Business%20Operations%20and%20R%26D%20Progress) The company operates in the "Biotech 3.0 Era," focusing on differentiated innovation and achieving breakthrough progress in two core drug pipelines for immune-related diseases [Industry Background and Company Strategy](index=4&type=section&id=Industry%20Background%20and%20Company%20Strategy) The biopharmaceutical industry is in the "Biotech 3.0 Era," characterized by innovation, multidisciplinary integration, and precision, aligning with the company's differentiated innovation strategy - The biopharmaceutical industry is entering the "Biotech 3.0 Era," characterized by innovation-driven development, multidisciplinary integration, intelligence, and precision[8](index=8&type=chunk) - The company's strategy focuses on differentiated innovation, aiming for "first-in-class" and "best-in-class" as core R&D goals, specializing in innovative therapies for immune-related diseases[8](index=8&type=chunk) [Flagship Product: Suciraslimab (SM03)](index=4&type=section&id=Flagship%20Product%3A%20Suciraslimab%20(SM03)) SM03, a first-in-class anti-CD22 monoclonal antibody, showed breakthrough preclinical results in SLE, leading to the strategic withdrawal of its RA BLA to accelerate SLE clinical development and explore Alzheimer's disease potential - SM03 achieved breakthrough results in SLE preclinical studies, significantly reducing anti-dsDNA antibody levels and showing superior kidney protection in improving Lupus Nephritis (LN) proteinuria and renal pathological damage compared to existing drugs, by modulating B-cell interactions and organ damage protection[9](index=9&type=chunk) - Over **5 million** global SLE patients, with over **1 million** in China, approximately **50%** progressing to LN; SM03 is expected to address unmet needs regarding "long-term medication safety risks" and "lack of actual organ damage protective benefits"[10](index=10&type=chunk) - SM03 for RA showed good efficacy and safety in Phase 3 clinical data, with ACR20 response rates of approximately **50%** at 24 weeks and over **70%** at 104 weeks, with no new safety risks identified[11](index=11&type=chunk) - The company strategically withdrew the BLA for SM03 in RA and is fully accelerating its clinical development for SLE treatment, while also initiating Phase 2 clinical project planning for SLE[12](index=12&type=chunk)[13](index=13&type=chunk) - SM03 also shows potential in Alzheimer's disease, by modulating microglial cell function, it is expected to become the world's first Alzheimer's immunotherapy with both efficacy and safety, with IND application preparations underway[13](index=13&type=chunk) [Key Product: SM17](index=5&type=section&id=Key%20Product%3A%20SM17) SM17, a first-in-class anti-IL-25 receptor antibody, achieved breakthrough Phase 1b topline results for moderate-to-severe AD, demonstrating rapid itch relief, superior lesion recovery, and favorable safety, with formulation bridging studies underway - SM17 is the world's first humanized monoclonal antibody targeting the IL-25 receptor, achieving rapid itch relief and lesion recovery by inhibiting downstream factors of the Type II inflammatory pathway and blocking the IL-25 receptor[14](index=14&type=chunk) SM17 Phase 1b Clinical Results for Moderate-to-Severe AD (High-Dose Group) | Indicator | Result | | :--- | :--- | | Itch Relief (NRS–4) | 91.7% of patients achieved | | Lesion Recovery (EASI 75) | 75% of patients achieved | | Complete/Near-Complete AD Symptom Clearance (IGA0/1) | 41.7% of patients achieved | - SM17 data significantly outperforms IL4/IL-13 class monoclonal antibodies, and its safety and tolerability are notably superior to JAK inhibitors, positioning it as potentially the first AD treatment to simultaneously offer rapid itch relief, lesion recovery, and safety[14](index=14&type=chunk) - Over **230 million** global AD patients, with over **70 million** in China; SM17's triple advantages (rapid itch relief, potent lesion recovery, high safety) are expected to address unmet needs of existing treatment options[15](index=15&type=chunk) - The company is advancing SM17's formulation bridging clinical study, expected to be completed by Q1 2026[15](index=15&type=chunk) [Other Pipeline Drugs and Expansion](index=6&type=section&id=Other%20Pipeline%20Drugs%20and%20Expansion) The company is expanding its R&D pipeline with anti-CGC antibody and bispecific antibodies targeting IND submission by 2026, while SM06 is in IND research and SN1011 shows positive clinical results for pMN through collaboration - Anti-CGC antibody, a proprietary humanized anti-γc antibody, is a potential drug for Alopecia Areata, Vitiligo, and other autoimmune diseases, with IND submission expected in 2026[16](index=16&type=chunk) - Bispecific antibody product targeting RANKL and Sclerostin for osteoporosis treatment, with IND submission expected in 2026[16](index=16&type=chunk) - SM06, a second-generation anti-CD22 antibody and a humanized variant of Suciraslimab, is in IND research, with internal studies suggesting potentially stronger efficacy and longer half-life[27](index=27&type=chunk) - SN1011, a third-generation reversible covalent BTK inhibitor, has received **4** NMPA IND approvals, including for SLE, Pemphigus, MS, and NMOSD[28](index=28&type=chunk) - The company collaborates with Everest Medicines on SN1011 for kidney diseases; Everest Medicines announced positive latest results from its Phase 1b/2a clinical trial for primary Membranous Nephropathy (pMN) in July 2025[28](index=28&type=chunk) Company Product Pipeline Overview | Product Line | Indication | Region | IND Stage | Phase 1 | Phase 2 | Phase 3 | BLA | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | SM03 (Suciraslimab) | SLE | China | | | Planning | | | | (Anti-CD22 Monoclonal Antibody) | RA | China | | | | Completed | Withdrawn | | | MCI, Alzheimer's Disease | China | IND Application Preparation | | | | | | SM17 (Humanized Anti-IL-25 Receptor Monoclonal Antibody) | AD | China/US | | Completed | Proof of Concept Completed | | | | | Asthma, IPF | China/US | IND Approved | | | | | | SN1011 (BTK Inhibitor) | SLE, Pemphigus, MS, NMOSD | China/Global | IND Approved | Completed | Positive Results | | | | SM06 (Humanized Anti-CD22 Monoclonal Antibody) | Autoimmune Diseases | China | CMC Optimization | | | | | | Anti-CGC Antibody | Alopecia Areata, Vitiligo | China | CMC Optimization | | | | | | Bispecific Antibody Candidate (bsAb) | Osteoporosis | Global | CMC Optimization | | | | | | SM09 (Humanized Anti-CD20 Monoclonal Antibody) | NHL, Autoimmune Diseases | China | R&D | | | | | [Strategic Partnerships and R&D Platforms](index=6&type=section&id=Strategic%20Partnerships%20and%20R%26D%20Platforms) The company signed a strategic cooperation agreement with SYSU-IAS, leveraging its facilities and Oxford University's expertise, while exploring AI for drug target identification to enhance R&D efficiency - The company signed a comprehensive strategic cooperation agreement with Sun Yat-sen University Hong Kong Advanced Institute (SYSU-IAS) to accelerate innovative drug development and global scientific research translation into clinical applications[18](index=18&type=chunk)[60](index=60&type=chunk) - The cooperation agreement allows the company to use SYSU-IAS's laboratory facilities and scientific research resources (including primate and non-primate experimental animals) and gain access to expertise provided by Oxford University[18](index=18&type=chunk)[55](index=55&type=chunk)[56](index=56&type=chunk) - The company is actively exploring the feasibility of using Artificial Intelligence (AI) technology for drug target identification to enhance new drug R&D efficiency and shorten development cycles[18](index=18&type=chunk) - The company will provide SYSU-IAS with **HKD 1,000,000** quarterly, of which SYSU-IAS will pay **HKD 1,000,000** annually to Oxford University, to support joint laboratory research activities and talent exchange[57](index=57&type=chunk) [Manufacturing and Intellectual Property](index=19&type=section&id=Manufacturing%20and%20Intellectual%20Property) The company operates a manufacturing base in Haikou and is building a second commercial-scale base in Suzhou, while evaluating a shift to an asset-light model and continuously expanding its intellectual property portfolio for core drugs - The company has a manufacturing base in Haikou with a capacity of **1,200 liters**, which completed GMP inspection in January 2024[64](index=64&type=chunk) - Construction of the second manufacturing base in Suzhou was completed by the end of 2024 and is expected to pass completion acceptance by the end of 2025, serving as a commercial-scale manufacturing base[65](index=65&type=chunk)[79](index=79&type=chunk) - The company is evaluating the feasibility of transitioning to an asset-light model, considering outsourcing manufacturing to CDMOs for cost advantages and operational flexibility[63](index=63&type=chunk) - The company holds invention patents for several core drugs including Suciraslimab (SM03), SN1011, and SM09, and continuously submits new PCT applications and pending patent applications[66](index=66&type=chunk)[67](index=67&type=chunk) Intellectual Property and R&D Personnel Overview | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Number of Invention Patents Owned by the Group* | 92 | 91 | | Total R&D Personnel | 33 | 40 | | - PhD Degree | 5 | 6 | | - Master's Degree | 21 | 24 | | - University Degree or Below | 7 | 10 | *Includes pending and granted patents [Internal Strategic R&D Platforms](index=27&type=section&id=Internal%20Strategic%20R%26D%20Platforms) The company has established five internal strategic R&D platforms, including B-cell, Alarmins Pathway, Selective T-cell, Neurological Disease, and Antibody Framework Reshaping Humanization platforms, to identify drug targets and expand its autoimmune disease pipeline - The company has established five internal strategic platforms: B-cell Therapy Platform, Alarmins Pathway Therapy Platform, Selective T-cell Therapy Platform, Neurological Disease Platform, and Antibody Framework Reshaping Humanization Platform[78](index=78&type=chunk) - The B-cell Therapy Platform developed anti-CD22 antibodies (SM03, SM06), anti-CD20 antibody (SM09), and BTK inhibitor (SN1011)[88](index=88&type=chunk) - The Alarmins Pathway Therapy Platform developed SM17, a humanized IgG4-κ monoclonal antibody targeting the IL-25 receptor (IL-17RB), for treating diseases such as asthma, AD, and IPF[87](index=87&type=chunk) - The Selective T-cell Therapy Platform developed humanized anti-γc antibodies for treating autoimmune diseases such as Alopecia Areata and Vitiligo[89](index=89&type=chunk)[90](index=90&type=chunk) - The Neurological Disease Platform utilizes anti-CD22 antibodies (SM03/SM06) to treat Alzheimer's disease by promoting Aβ protein internalization and anti-inflammatory effects[91](index=91&type=chunk)[92](index=92&type=chunk)[93](index=93&type=chunk) - The Antibody Framework Reshaping Humanization Platform employs a new "framework reshaping" method to achieve functional humanization, with SM06 and SM09 antibodies utilizing this proprietary technology[94](index=94&type=chunk) [Future Outlook and Strategy](index=6&type=section&id=Future%20Outlook%20and%20Strategy) The company benefits from a rapidly growing Chinese innovative drug market and supportive policies, aiming to be a global leader in immune disease therapies by advancing its pipeline and commercialization efforts [Industry Opportunities and Policy Support](index=6&type=section&id=Industry%20Opportunities%20and%20Policy%20Support) China's innovative drug market is rapidly growing with increased outbound licensing, supported by accelerated NMPA approvals, expanded medical insurance coverage, and the "new quality productive forces" strategy - In H1 2025, China's innovative drug outbound licensing (License-out) transactions totaled **USD 66 billion**, a **36%** year-on-year increase, exceeding the total for full-year 2024[19](index=19&type=chunk) - The National Medical Products Administration (NMPA) reduced innovative drug clinical trial approval time from 14 months to **30 days**, and the National Healthcare Security Administration's "16 Measures for Innovative Drugs" supports payment expansion, promoting the recovery of China's innovative drug market[20](index=20&type=chunk) - The central government's "new quality productive forces" strategy provides a favorable environment for the company's innovative R&D[20](index=20&type=chunk) [Company Vision and Core Competitiveness](index=7&type=section&id=Company%20Vision%20and%20Core%20Competitiveness) As Hong Kong's first biopharmaceutical IPO, the company aims to be a global leader in innovative immune disease therapies, leveraging innovation to commercialize existing pipelines and develop new ones, with SM03 and SM17 expected to validate their best-in-class potential - The company's vision is to become a global leader in innovative therapies for immune and other debilitating diseases[70](index=70&type=chunk) - The company will continue to leverage innovation as its core competitiveness, driving the commercialization of existing drug pipelines and the R&D of new ones[20](index=20&type=chunk) - The company believes Suciraslimab and SM17 will further validate their best-in-class characteristics in subsequent clinical trials, addressing unmet medical needs for SLE and AD patients[20](index=20&type=chunk) [Clinical Development and Commercialization Plans](index=22&type=section&id=Clinical%20Development%20and%20Commercialization%20Plans) The company plans to advance SM03 clinical trials for SLE and neuroimmune diseases, and SM17's formulation bridging study and IPF IND, while expanding its marketing team and seeking strategic partnerships for commercialization - The company will advance Suciraslimab (SM03) clinical trials for SLE and other autoimmune diseases, and plans to initiate IND applications for Alzheimer's disease and Phase 2 proof-of-concept clinical studies for SLE in China[74](index=74&type=chunk) - SM17's Phase 1b clinical trial achieved positive topline results; the company is advancing its formulation bridging clinical study, expected to be completed by Q1 2026, and plans to submit IND applications for SM17 in IPF in the US and China[75](index=75&type=chunk) - The company will continue to expand its marketing team and actively seek cooperation and/or partnership opportunities, including in-licensing and out-licensing, to maximize the commercial value of its assets[80](index=80&type=chunk) [Market Overview](index=25&type=section&id=Market%20Overview) Global and Chinese markets for SLE, AD, asthma, and RA are large and growing, with significant unmet medical needs, providing vast market potential for the company's innovative therapies Key Disease Market Size Forecast | Disease | Market Size (2024) | Forecast Market Size (2030/2037) | CAGR | | :--- | :--- | :--- | :--- | | SLE (Global) | >USD 2.4 billion | >USD 6.37 billion (2037) | >7.8% | | AD (Global) | - | USD 27.7 billion (2030) | - | | AD (China) | USD 1.5 billion | USD 4.3 billion (2030) | - | | RA (China) | - | RMB 83.3 billion (2030) | 16.8% | - China has approximately **1.0349 million** SLE patients, projected to increase to **1.0947 million** by 2030[81](index=81&type=chunk) - China had approximately **65.7 million** AD patients in 2019, projected to increase to **81.7 million** by 2030, with **30%** being moderate-to-severe patients[82](index=82&type=chunk) - The number of global asthma patients is increasing annually, projected to reach approximately **860 million** by 2030, with China's patient count reaching **78.1 million**[83](index=83&type=chunk) - China has approximately **5 million** Rheumatoid Arthritis patients; the market share of biologics is expected to increase from **43.4%** in 2024 to **59.8%** by 2030[84](index=84&type=chunk) [Financial Review](index=29&type=section&id=Financial%20Review) The company's net loss significantly decreased for the six months ended June 30, 2025, driven by optimized R&D and administrative expenses, with stable financial costs and no income tax expense [Income Statement Analysis](index=29&type=section&id=Income%20Statement%20Analysis) For the six months ended June 30, 2025, the company's net loss decreased by 44.9% to RMB 49.8 million, due to reduced R&D and administrative expenses, increased other income, and no income tax Condensed Interim Consolidated Income Statement Summary (For the six months ended June 30) | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | Change (RMB thousand) | Change Rate | | :--- | :--- | :--- | :--- | :--- | | Revenue | 2,026 | - | 2,026 | N/A | | Cost of Sales | - | (1,483) | 1,483 | N/A | | Gross Profit | 2,026 | 543 | 1,483 | 273.1% | | Other Income and Gains | 9,802 | 4,319 | 5,483 | 127.0% | | R&D Costs | (32,740) | (55,035) | 22,295 | -40.5% | | Administrative Expenses | (23,734) | (34,205) | 10,471 | -30.6% | | Finance Costs | (2,990) | (3,287) | 297 | -9.0% | | Other Expenses | (159) | (2,957) | 2,798 | -94.6% | | Loss Before Tax | (49,821) | (90,622) | 40,801 | -44.9% | | Loss for the Period | (49,821) | (90,622) | 40,801 | -44.9% | - Other income and gains increased by approximately **RMB 5.5 million**, primarily due to an increase of approximately **RMB 7.4 million** in foreign exchange gains and approximately **RMB 1.0 million** in government grants, offset by a decrease of approximately **RMB 2.9 million** in bank interest income[95](index=95&type=chunk) - R&D costs decreased by approximately **RMB 22.3 million**, mainly due to reduced expenditure on laboratory consumables and trial costs in preparation for SM03 BLA and commercialization, and lower R&D employee employment costs[97](index=97&type=chunk) - Administrative expenses decreased by approximately **RMB 10.5 million**, mainly due to optimized administrative personnel costs and the reversal of share-based non-cash payment expenses[98](index=98&type=chunk) - No income tax expense for the period, as neither the company nor its mainland China subsidiaries generated assessable profits[139](index=139&type=chunk) [Cash Flow and Liquidity](index=30&type=section&id=Cash%20Flow%20and%20Liquidity) For the six months ended June 30, 2025, the company saw reduced net cash outflow from operating activities, net cash inflow from investing and financing activities, and improved financial health with a significantly lower debt-to-asset ratio Condensed Interim Consolidated Cash Flow Statement Summary (For the six months ended June 30) | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Net Cash Flows Used in Operating Activities | (26,906) | (70,587) | | Net Cash Flows From/(Used in) Investing Activities | 35,230 | (76,390) | | Net Cash Flows From Financing Activities | 38,263 | 93,446 | | Net Increase/(Decrease) in Cash and Cash Equivalents | 46,587 | (53,531) | | Cash and Cash Equivalents at Period End | 101,034 | 153,617 | Total Available Funds (Period End) | Indicator | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Cash and Cash Equivalents | 101,034 | 61,900 | | Pledged and Restricted Deposits | 13,879 | 66,002 | | Wealth Management Products | 10,738 | 13,523 | | **Total Available Funds** | **125,651** | **141,425** | Bank Borrowings and Debt-to-Asset Ratio | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Outstanding Borrowings (RMB million) | 354.4 | 419.3 | | Effective Annual Interest Rate | 3.00% to 3.90% | 3.15% to 3.90% | | Unutilized Bank Facilities (RMB million) | 321.7 | - | | Debt-to-Asset Ratio | 104.1% | 185.3% | - The company pledged land use rights and construction in progress with a carrying value of approximately **RMB 338.2 million** to secure bank loans[104](index=104&type=chunk) [Significant Events: Share Subscriptions and Fund Utilization](index=32&type=section&id=Significant%20Events%3A%20Share%20Subscriptions%20and%20Fund%20Utilization) The company successfully raised substantial funds through multiple share subscriptions in and after the reporting period, primarily for SM17 R&D, new drug preclinical studies, IND preparation, and general working capital, with prior subscriptions fully utilized Utilization of Net Proceeds from May 2025 Share Subscription (As of June 30, 2025) | Purpose | Intended Use (HKD million) | Actual Use (HKD million) | Unutilized (HKD million) | Expected Timeline | | :--- | :--- | :--- | :--- | :--- | | SM17 R&D and Clinical Projects | 55.781 | 8.375 | 47.406 | Before end of 2026 | | Preclinical Research and IND Application Preparation for New Drug Candidates | 24.791 | - | 24.791 | Before end of 2026 | | Group Working Capital and General Corporate Purposes | 43.385 | 10.726 | 32.659 | Before end of 2025 | | **Total** | **123.957** | **19.101** | **104.856** | | - Proceeds from the 2023 share subscription (net approximately **HKD 73.18 million**) and the 2022 share subscription (net approximately **HKD 50.89 million**) have been fully utilized as intended[109](index=109&type=chunk)[113](index=113&type=chunk) - The company or any of its subsidiaries did not purchase, sell, or redeem any of the company's listed securities during the reporting period[117](index=117&type=chunk) [Events After Reporting Period](index=40&type=section&id=Events%20After%20Reporting%20Period) After the reporting period, the company completed a significant share subscription in July 2025, raising approximately HKD 369.5 million, and granted share options to employees and service providers [July 2025 Share Subscription](index=40&type=section&id=July%202025%20Share%20Subscription) On July 22, 2025, the company entered into subscription agreements with 23 subscribers to issue 182,072,400 new ordinary shares at HKD 2.03 per share, raising approximately HKD 369.5 million net proceeds - On July 22, 2025, the company entered into subscription agreements with **23** subscribers to issue a total of **182,072,400** new ordinary shares at a subscription price of **HKD 2.03** per share[120](index=120&type=chunk) - The net proceeds from the July 2025 share subscription amounted to approximately **HKD 369,461,972**[120](index=120&type=chunk) - These subscribed shares represent approximately **15.12%** of the issued shares immediately prior to the subscription and approximately **13.13%** of the enlarged issued shares after the allotment and issuance of the subscription shares[120](index=120&type=chunk) [Grant of Share Options](index=40&type=section&id=Grant%20of%20Share%20Options) On July 24, 2025, the company granted a total of 46,585,862 share options to 20 employees and 2 service providers under its share option scheme - On July 24, 2025, the company granted a total of **46,585,862** share options to **20** employees and **2** service providers to subscribe for a total of **46,585,862** new shares of the company[122](index=122&type=chunk) [Corporate Governance](index=40&type=section&id=Corporate%20Governance) The company adheres to high corporate governance standards, applying principles of the Listing Rules, with the Board deeming the combined Chairman and CEO role appropriate due to the individual's extensive business knowledge and the Board's independent composition - The company has applied the principles and code provisions of the Corporate Governance Code set out in Appendix C1 to the Listing Rules[124](index=124&type=chunk) - The roles of Chairman and Chief Executive Officer are held by Dr. Liang Rui'an, deviating from Code Provision C.2.1 of the Corporate Governance Code[125](index=125&type=chunk) - The Board considers this deviation appropriate, as Dr. Liang has extensive business knowledge, and the Board comprises one executive director, four non-executive directors, and five independent non-executive directors, ensuring a high degree of independence and balance of power[125](index=125&type=chunk) [Interim Dividend](index=42&type=section&id=Interim%20Dividend) The Board resolved not to declare an interim dividend for the six months ended June 30, 2025, consistent with the prior year - The Board has resolved not to declare an interim dividend for the six months ended June 30, 2025 (2024: nil)[127](index=127&type=chunk) [Notes to Financial Statements](index=42&type=section&id=Notes%20to%20Financial%20Statements) The financial statements, prepared under HKAS 34, show a reduced net loss and improved net assets, with detailed notes on income, cash flow, and balance sheet items, reflecting the company's financial position and recent capital activities [Condensed Interim Consolidated Income Statement](index=42&type=section&id=Condensed%20Interim%20Consolidated%20Income%20Statement) For the six months ended June 30, 2025, the company reported a net loss of RMB 49,821 thousand, significantly narrowed from the prior year, with revenue from capsule sales and reduced R&D and administrative expenses Condensed Interim Consolidated Income Statement (For the six months ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Revenue | 2,026 | - | | Cost of Sales | - | (1,483) | | Gross Profit | 2,026 | 543 | | Other Income and Gains | 9,802 | 4,319 | | R&D Costs | (32,740) | (55,035) | | Administrative Expenses | (23,734) | (34,205) | | Finance Costs | (2,990) | (3,287) | | Other Expenses | (159) | (2,957) | | Loss Before Tax | (49,821) | (90,622) | | Income Tax Expense | - | - | | **Loss for the Period** | **(49,821)** | **(90,622)** | | Loss per Share Attributable to Ordinary Equity Holders of the Parent (RMB) | (0.05) | (0.08) | [Condensed Interim Consolidated Statement of Comprehensive Income](index=43&type=section&id=Condensed%20Interim%20Consolidated%20Statement%20of%20Comprehensive%20Income) For the six months ended June 30, 2025, the company's total comprehensive loss for the period narrowed to RMB 57,398 thousand, primarily comprising the net loss and exchange differences from currency translation Condensed Interim Consolidated Statement of Comprehensive Income (For the six months ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Loss for the Period | (49,821) | (90,622) | | Exchange differences arising from translation of presentation currency | (7,577) | 3,664 | | **Total Comprehensive Loss for the Period** | **(57,398)** | **(86,958)** | [Condensed Interim Consolidated Statement of Financial Position](index=44&type=section&id=Condensed%20Interim%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the company's total assets less current liabilities were RMB 533,605 thousand, with net assets of RMB 243,289 thousand, showing growth from the prior period, despite a net current liability position Condensed Interim Consolidated Statement of Financial Position (As of June 30) | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | **Total Non-Current Assets** | **558,810** | **567,763** | | Property, Plant and Equipment | 482,506 | 484,108 | | Right-of-Use Assets | 59,099 | 66,614 | | **Total Current Assets** | **163,283** | **185,337** | | Cash and Cash Equivalents | 101,034 | 61,900 | | Pledged and Restricted Deposits | 13,879 | 66,002 | | Financial Assets at Fair Value Through Profit or Loss | 42,063 | 44,978 | | **Total Current Liabilities** | **188,488** | **203,498** | | Interest-bearing Bank Borrowings (Current) | 105,156 | 112,639 | | **Net Current Liabilities** | **(25,205)** | **(18,161)** | | **Total Assets Less Current Liabilities** | **533,605** | **549,602** | | **Total Non-Current Liabilities** | **290,316** | **356,691** | | Interest-bearing Bank Borrowings (Non-Current) | 249,209 | 306,647 | | **Net Assets** | **243,289** | **192,911** | | **Total Equity** | **243,289** | **192,911** | [Explanatory Notes](index=45&type=section&id=Explanatory%20Notes) The financial statements, prepared under HKAS 34 on a going concern basis, show current liabilities exceeding current assets, but with sufficient working capital from unutilized facilities and post-period share subscriptions, with revenue from BTK inhibitor capsule sales and an improved debt-to-asset ratio - The condensed interim consolidated financial information is prepared in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting" and on a going concern basis[133](index=133&type=chunk)[134](index=134&type=chunk) - As of June 30, 2025, the Group's current assets were **RMB 163,283 thousand**, current liabilities were **RMB 188,488 thousand**, and a net loss of **RMB 49,821 thousand** was incurred for the period[134](index=134&type=chunk) - Revenue primarily derived from BTK inhibitor capsule sales, supplied and recognized in April 2024[137](index=137&type=chunk) - Basic loss per share attributable to ordinary equity holders of the parent was **RMB 0.05** (2024: **RMB 0.08**), with no diluted adjustment due to the anti-dilutive effect of share options[143](index=143&type=chunk) - Total interest-bearing bank borrowings were **RMB 354,365 thousand** (December 31, 2024: **RMB 419,286 thousand**), with effective annual interest rates ranging from **3.00%** to **3.90%**[145](index=145&type=chunk) - Share capital increased due to the issuance of **112,810,817** new ordinary shares in May 2025, with net settlement proceeds of approximately **RMB 108,238 thousand**[147](index=147&type=chunk) [Review of Interim Results](index=51&type=section&id=Review%20of%20Interim%20Results) Ernst & Young, the independent auditor, reviewed the interim condensed consolidated financial information, and the Audit Committee confirmed compliance with accounting standards, laws, and regulations, with appropriate disclosures - Independent auditor Ernst & Young reviewed the condensed interim consolidated financial information in accordance with Hong Kong Standard on Review Engagements 2410[148](index=148&type=chunk) - The Audit Committee, together with management and the independent auditor, reviewed accounting principles and policies, confirming that the interim results comply with applicable accounting standards, laws, and regulations, and that appropriate disclosures have been made[149](index=149&type=chunk) [Publication of Interim Results and Report](index=51&type=section&id=Publication%20of%20Interim%20Results%20and%20Report) This interim results announcement is published on the HKEX and company websites, with the full 2025 interim report to be dispatched to shareholders and/or published online as required by Listing Rules - This interim results announcement is published on the HKEX website (www.hkexnews.hk) and the company's website (www.sinomab.com)[150](index=150&type=chunk) - The 2025 interim report, containing all information required by the Listing Rules, will be dispatched to shareholders and/or published on the HKEX and company websites in due course[150](index=150&type=chunk)

[Company Information](index=4&type=section&id=%E5%85%AC%E5%8F%B8%E8%B3%87%E6%96%99) This section provides key corporate details including the Board of Directors, committees, statutory officers, registered offices, and financial service providers [Board of Directors](index=4&type=section&id=%E8%91%A3%E4%BA%8B%E6%9C%83) This section lists the executive and independent non-executive directors, noting the removal of Ms. Shen Jindan and the appointment of Mr. Geng Chuanlong - Ms. Yan Ping serves as Chairperson, and Mr. Liu Yaoguang serves as Chief Executive Officer[5](index=5&type=chunk) - Independent Non-executive Director Ms. Shen Jindan was removed on June 6, 2025, and Mr. Geng Chuanlong was appointed on August 29, 2025[5](index=5&type=chunk) [Board Committees](index=4&type=section&id=%E8%91%A3%E4%BA%8B%E5%A7%94%E5%93%A1%E6%9C%83) This section details the composition of the Audit, Remuneration, and Nomination Committees, including adjustments due to director changes - The Audit Committee is chaired by Ms. Lian Jingyu, with members including Ms. Deng Xin, Ms. Jiang Caiying, and the newly appointed Mr. Geng Chuanlong[5](index=5&type=chunk) - The Remuneration Committee is chaired by Ms. Deng Xin, with members including Ms. Lian Jingyu, Mr. Liu Yaoguang, Ms. Jiang Caiying, and the newly appointed Mr. Geng Chuanlong[5](index=5&type=chunk) - The Nomination Committee is chaired by Ms. Yan Ping, with members including Ms. Lian Jingyu, Ms. Jiang Caiying, and the newly appointed Mr. Geng Chuanlong[5](index=5&type=chunk) [Compliance Officer](index=4&type=section&id=%E5%90%88%E8%A6%8F%E4%B8%BB%E4%BB%BB) This section identifies Mr. Xiao Jiansheng as the Company's Compliance Officer - Mr. Xiao Jiansheng serves as the Compliance Officer[5](index=5&type=chunk) [Legal Representatives](index=4&type=section&id=%E6%B3%95%E5%AE%9A%E4%BB%A3%E8%A1%A8) This section lists Ms. Yan Ping and Ms. Zhan Lijuan as the Company's Legal Representatives - Ms. Yan Ping and Ms. Zhan Lijuan are the Company's Legal Representatives[5](index=5&type=chunk) [Company Secretaries](index=4&type=section&id=%E5%85%AC%E5%8F%B8%E7%A7%98%E6%9B%B8) This section identifies Ms. Zhan Lijuan and Ms. Chen Leyan as the Company Secretaries - Ms. Zhan Lijuan and Ms. Chen Leyan serve as Company Secretaries[5](index=5&type=chunk) [Cayman Islands Registered Office](index=4&type=section&id=%E9%96%8B%E6%9B%BC%E7%BE%A4%E5%B3%B6%E8%A8%BB%E5%86%8A%E8%BE%A6%E4%BA%8B%E8%99%95) This section provides the Company's registered office address in the Cayman Islands - The Company's registered office is located at Windward 3, Regatta Office Park, P.O. Box 1350, Grand Cayman, KY1-1108, Cayman Islands[5](index=5&type=chunk) [Head Office](index=4&type=section&id=%E7%B8%BD%E8%BE%A6%E4%BA%8B%E8%99%95) This section provides the Company's head office address in China - The Company's head office is located at Dongcheng Industrial Park, Xinping Road, Minzhong Town, Zhongshan City, Guangdong Province, China[6](index=6&type=chunk) [Principal Place of Business in Hong Kong](index=4&type=section&id=%E9%A6%99%E6%B8%AF%E4%B8%BB%E8%A6%81%E7%87%9F%E6%A5%AD%E5%9C%B0%E9%BB%9E) This section provides the Company's principal place of business address in Hong Kong - The Company's principal place of business in Hong Kong is located at Room 304, 3/F, Tung Kin Building, 43 Queen's Road East, Hong Kong[6](index=6&type=chunk) [Auditor](index=4&type=section&id=%E6%A0%B8%E6%95%B8%E5%B8%AB) This section identifies BDO Limited as the Company's Auditor - BDO Limited is the Company's Auditor[6](index=6&type=chunk) [Cayman Islands Principal Share Registrar](index=5&type=section&id=%E9%96%8B%E6%9B%BC%E7%BE%A4%E5%B3%B6%E4%B8%BB%E8%A6%81%E8%82%A1%E4%BB%BD%E9%81%8E%E6%88%B6%E7%99%BB%E8%A8%98%E8%99%95) This section provides information on the Company's principal share registrar in the Cayman Islands - Ocorian Trust (Cayman) Limited is the principal share registrar in the Cayman Islands[7](index=7&type=chunk) [Hong Kong Share Registrar Branch](index=5&type=section&id=%E9%A6%99%E6%B8%AF%E8%82%A1%E4%BB%BD%E9%81%8E%E6%88%B6%E7%99%BB%E8%A8%98%E5%88%86%E8%99%95) This section provides information on the Company's share registrar branch in Hong Kong - Tricor Investor Services Limited is the Hong Kong share registrar branch[7](index=7&type=chunk) [Principal Bankers](index=5&type=section&id=%E4%B8%BB%E8%A6%81%E5%BE%80%E4%BE%86%E9%8A%80%E8%A1%8C) This section lists the Company's principal bankers - Principal bankers include Bank of China, Industrial and Commercial Bank of China (Asia) Limited, and Dongguan Bank Hong Kong Branch[7](index=7&type=chunk) [GEM Stock Code](index=5&type=section&id=GEM%E8%82%A1%E4%BB%BD%E4%BB%A3%E8%99%9F) This section provides the Company's GEM stock code - The Company's GEM stock code is **8406**[7](index=7&type=chunk) [Company Website](index=5&type=section&id=%E5%85%AC%E5%8F%B8%E7%B6%B2%E7%AB%99) This section provides the Company's official website address - The Company's website is www.chinaoral.co[7](index=7&type=chunk) [Unaudited Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=6&type=section&id=%E6%9C%AA%E7%B6%93%E5%AF%A9%E6%A0%B8%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E6%90%8D%E7%9B%8A%E5%8F%8A%E5%85%B6%E4%BB%96%E5%85%A8%E9%9D%A2%E6%94%B6%E7%9B%8A%E8%A1%A8) This statement presents the Group's financial performance for the six months ended June 30, 2025, showing a decrease in revenue but significant profit growth due to increased other income and reduced finance costs - This unaudited condensed consolidated statement of profit or loss and other comprehensive income presents the Group's financial performance for the six months ended June 30, 2025, showing a decrease in revenue compared to the same period in 2024, but a significant increase in profit for the period due to a substantial increase in other income and gains and a significant reduction in finance costs[8](index=8&type=chunk) Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income Key Data | Indicator | Six Months Ended June 30, 2025 (RMB thousands) | Six Months Ended June 30, 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 109,263 | 124,660 | -12.4% | | Cost of Sales | (90,141) | (101,256) | -11.0% | | Gross Profit | 19,122 | 23,404 | -18.3% | | Other Income and Gains | 6,895 | 1,254 | +449.8% | | Distribution and Selling Expenses | (7,516) | (12,483) | -39.8% | | Administrative Expenses | (12,079) | (10,466) | +15.4% | | Finance Costs | (72) | (558) | -87.1% | | Profit Before Tax | 6,350 | 1,151 | +451.7% | | Income Tax Expense | (2,281) | (271) | +741.7% | | Profit for the Period | 4,069 | 880 | +362.4% | | Basic Earnings Per Share (RMB cents) | 0.30 | 0.08 | +275.0% | [Unaudited Condensed Consolidated Statement of Financial Position](index=7&type=section&id=%E6%9C%AA%E7%B6%93%E5%AF%A9%E6%A0%B8%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81%E8%A1%A8) This statement presents the Group's assets, liabilities, and equity as of June 30, 2025, showing a slight decrease in total assets but an increase in net current assets and net assets, reflecting an improved financial structure - This unaudited condensed consolidated statement of financial position presents the Group's assets, liabilities, and equity as of June 30, 2025, showing a slight decrease in total assets compared to December 31, 2024, but an increase in both net current assets and net assets, reflecting an improved financial structure[9](index=9&type=chunk)[10](index=10&type=chunk) Condensed Consolidated Statement of Financial Position Key Data | Indicator | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Non-current Assets | 11,710 | 11,934 | -1.9% | | Current Assets | 182,404 | 190,525 | -4.2% | | Total Assets | 194,114 | 202,459 | -4.1% | | Current Liabilities | 51,155 | 91,763 | -44.3% | | Non-current Liabilities | 3,358 | 3,558 | -5.7% | | Net Assets | 139,601 | 107,138 | +30.3% | | Total Equity | 139,601 | 107,138 | +30.3% | [Unaudited Condensed Consolidated Statement of Changes in Equity](index=9&type=section&id=%E6%9C%AA%E7%B6%93%E5%AF%A9%E6%A0%B8%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E6%AC%8A%E7%9B%8A%E8%AE%8A%E5%8B%95%E8%A1%A8) This statement details the Group's equity changes for the six months ended June 30, 2025, with total equity significantly increasing primarily due to share issuance and profit for the period - This unaudited condensed consolidated statement of changes in equity details the Group's equity changes for the six months ended June 30, 2025, with total equity significantly increasing primarily due to share issuance and profit for the period[12](index=12&type=chunk) Condensed Consolidated Statement of Changes in Equity Key Data | Indicator | Balance at January 1, 2025 (RMB thousands) | Balance at June 30, 2025 (RMB thousands) | Change (RMB thousands) | | :--- | :--- | :--- | :--- | | Share Capital | 10,059 | 12,180 | +2,121 | | Share Premium | 79,109 | 106,681 | +27,572 | | Retained Profits | (11,525) | (7,456) | +4,069 | | Total Equity | 107,138 | 139,601 | +32,463 | - In the first half of 2025, the Company raised **RMB 29,693 thousand** through share issuance[12](index=12&type=chunk) [Unaudited Condensed Consolidated Statement of Cash Flows](index=10&type=section&id=%E6%9C%AA%E7%B6%93%E5%AF%A9%E6%A0%B8%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E7%8F%BE%E9%87%91%E6%B5%81%E9%87%8F%E8%A1%A8) This statement reflects the Group's cash flows for the six months ended June 30, 2025, showing a net cash outflow from operating activities but significant inflows from investing and financing activities, leading to a substantial increase in cash and cash equivalents at period-end - This unaudited condensed consolidated statement of cash flows reflects the Group's cash flows for the six months ended June 30, 2025, showing a net cash outflow from operating activities but significant cash inflows from investing and financing activities, leading to a substantial increase in cash and cash equivalents at period-end[13](index=13&type=chunk) Condensed Consolidated Statement of Cash Flows Key Data | Indicator | Six Months Ended June 30, 2025 (RMB thousands) | Six Months Ended June 30, 2024 (RMB thousands) | | :--- | :--- | :--- | | Net Cash (Used in)/Generated from Operating Activities | (21,430) | 2,291 | | Net Cash Generated from Investing Activities | 12,623 | 16,850 | | Net Cash Generated from/(Used in) Financing Activities | 27,304 | (4,387) | | Net Increase in Cash and Cash Equivalents | 18,497 | 14,754 | | Cash and Cash Equivalents at End of Period | 74,766 | 72,039 | - Net cash flow from operating activities changed from a net inflow of **RMB 2,291 thousand** in the same period of 2024 to a net outflow of **RMB 21,430 thousand** in the first half of 2025[13](index=13&type=chunk) - Net cash flow from financing activities changed from a net outflow of **RMB 4,387 thousand** in the same period of 2024 to a net inflow of **RMB 27,304 thousand** in the first half of 2025, primarily due to share issuance[13](index=13&type=chunk) [Notes to the Unaudited Condensed Consolidated Financial Statements](index=11&type=section&id=%E6%9C%AA%E7%B6%93%E5%AF%A9%E6%A0%B8%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8%E9%99%84%E8%A8%BB) This section provides detailed explanatory notes to the unaudited condensed consolidated financial statements, covering general information, accounting policies, risk management, segment information, and other financial disclosures [1. General Information](index=11&type=section&id=1.%20%E4%B8%80%E8%88%AC%E8%B3%87%E6%96%99) This note introduces China Oral Industry Group Holdings Limited's registration, listing status, ultimate controlling party, registered office, principal place of business, main business scope, and functional and presentation currencies - The Company was incorporated in the Cayman Islands on November 3, 2015, and listed on GEM of the Hong Kong Stock Exchange on December 7, 2017[14](index=14&type=chunk)[15](index=15&type=chunk) - The ultimate controlling party is Ms. Yan Ping, and the Group's principal businesses include manufacturing and sales of inflatable products, dental clinic services and sales of dental products, and sales of yarn and polyester fiber[16](index=16&type=chunk) - The Company's functional currency is HKD, but the condensed consolidated financial statements are presented in RMB due to its primary operations in China[16](index=16&type=chunk) [2. Basis of Presentation](index=12&type=section&id=2.%20%E5%91%88%E5%88%97%E5%9F%BA%E6%BA%96) This note explains the basis of preparation for the unaudited condensed consolidated financial statements, adhering to HKFRS, Hong Kong Companies Ordinance, and GEM Listing Rules, with consistent accounting policies from the prior year, except for new standard amendments - The financial statements are prepared in accordance with Hong Kong Financial Reporting Standards issued by the Hong Kong Institute of Certified Public Accountants, the Hong Kong Companies Ordinance, and the GEM Listing Rules[17](index=17&type=chunk) - The amendment to Hong Kong Accounting Standard 21, "Lack of Exchangeability," was first applied in this period but had no significant impact on results or financial position[18](index=18&type=chunk) [3. Estimates](index=12&type=section&id=3.%20%E4%BC%B0%E8%A8%88) This note clarifies that management makes estimates and assumptions in preparing financial statements, based on past experience and future expectations, which are continuously reviewed, and that significant judgments and estimation uncertainties remain consistent with the prior year - Management is required to make estimates and assumptions regarding the carrying amounts of assets and liabilities when preparing financial statements, and actual results may differ from these estimates[19](index=19&type=chunk) - The primary sources of significant judgments and estimation uncertainties are the same as those for the consolidated financial statements for the year ended December 31, 2024[19](index=19&type=chunk) [4. Financial Risk Management and Financial Instruments](index=13&type=section&id=4.%20%E8%B2%A1%E5%8B%99%E9%A2%A8%E9%9A%AA%E7%AE%A1%E7%90%86%E5%8F%8A%E9%87%91%E8%9E%8D%E5%B7%A5%E5%85%B7) This note outlines the Group's financial risks, including interest rate, credit, and liquidity risks, noting no significant changes in risk management policies since the last year-end, and that the carrying amounts of receivables and payables approximate their fair values - The Group faces interest rate risk, credit risk, and liquidity risk[20](index=20&type=chunk) - There have been no significant changes in risk management policies and liquidity management policies since the end of 2024[21](index=21&type=chunk)[22](index=22&type=chunk) - The carrying amounts of receivables and payables approximate their fair values[23](index=23&type=chunk) [4.1 Financial Risk Factors](index=13&type=section&id=4.1%20%E8%B2%A1%E5%8B%99%E9%A2%A8%E9%9A%AA%E5%9B%A0%E7%B4%A0) This sub-section identifies the Group's exposure to interest rate, credit, and liquidity risks, emphasizing no changes in risk management policies since the last year-end - The Group faces interest rate risk, credit risk, and liquidity risk[20](index=20&type=chunk) - There have been no changes in risk management policies since the year-end[21](index=21&type=chunk) [4.2 Liquidity Risk](index=13&type=section&id=4.2%20%E6%B5%81%E5%8B%95%E8%B3%87%E9%87%91%E9%A2%A8%E9%9A%AA) This sub-section describes the Group's liquidity and capital risk management policies and practices, which remain unchanged from the year ended December 31, 2024 - There have been no significant changes in the Group's liquidity and capital risk management policies and practices[22](index=22&type=chunk) [4.3 Fair Value Estimation](index=13&type=section&id=4.3%20%E5%85%AC%E5%B9%B3%E5%80%BC%E4%BC%B0%E8%A8%88) This sub-section states that the carrying amounts of receivables and payables approximate their fair values and explains the fair value estimation methods for financial liabilities - The carrying amounts of receivables and payables approximate their fair values[23](index=23&type=chunk) [5. Segment Information](index=13&type=section&id=5.%20%E5%88%86%E9%83%A8%E8%B3%87%E6%96%99) This note segments the Group's business into inflatable products, dental clinics, and yarn and polyester based on internal reporting, providing analysis of revenue, results, assets, and liabilities for each segment, as well as geographical revenue data - The Group's businesses are divided into three segments: inflatable products business, dental clinic business, and yarn and polyester business[25](index=25&type=chunk) - All businesses are located in China and Hong Kong, and all non-current assets (excluding goodwill) are located in China[30](index=30&type=chunk) [Segment Revenue and Results](index=14&type=section&id=%E5%88%86%E9%83%A8%E6%94%B6%E5%85%A5%E5%8F%8A%E6%A5%AD%E7%B8%BE) This sub-section details the revenue and results contributions of each operating segment (inflatable products, dental clinics, yarn and polyester) for the first half of 2025 and 2024, showing decreased inflatable product revenue but improved results, and significant growth in yarn and polyester revenue and results Segment Revenue and Results (RMB thousands) | Segment | H1 2025 Revenue | H1 2024 Revenue | Revenue Change (%) | H1 2025 Results | H1 2024 Results | Results Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Inflatable Products Business | 80,872 | 103,565 | -21.9% | 7,048 | (240) | N/A | | Dental Clinic Business | 7,202 | 7,092 | +1.55% | 1,499 | 1,602 | -6.5% | | Yarn and Polyester Business | 21,189 | 14,003 | +51.3% | 1,615 | 355 | +354.9% | | Total | 109,263 | 124,660 | -12.4% | 10,162 | 1,717 | +491.8% | [Segment Assets and Liabilities](index=15&type=section&id=%E5%88%86%E9%83%A8%E8%B3%87%E7%94%A2%E5%8F%8A%E8%B2%A0%E5%82%B5) This sub-section provides an analysis of the Group's segment assets and liabilities as of June 30, 2025, and December 31, 2024, indicating a reduction in both assets and liabilities for the inflatable products business, while dental clinic and yarn and polyester businesses remained relatively stable or saw slight changes Segment Assets and Liabilities (RMB thousands) | Segment | June 30, 2025 Assets | December 31, 2024 Assets | Asset Change (%) | June 30, 2025 Liabilities | December 31, 2024 Liabilities | Liability Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Inflatable Products Business | 50,281 | 69,701 | -27.9% | 21,164 | 53,222 | -60.2% | | Dental Clinic Business | 33,103 | 33,640 | -1.6% | 6,250 | 8,467 | -26.2% | | Yarn and Polyester Business | 28,008 | 31,578 | -11.3% | 6,505 | 10,203 | -36.2% | | Consolidated Assets | 194,114 | 202,459 | -4.1% | N/A | N/A | N/A | | Consolidated Liabilities | 54,513 | 95,321 | -42.8% | N/A | N/A | N/A | [Geographical Information](index=17&type=section&id=%E5%9C%B0%E5%8D%80%E8%B3%87%E6%96%99) This sub-section states that all of the Group's operations are located in China and Hong Kong, and all non-current assets (excluding goodwill) are located in China, thus no geographical analysis is presented, but provides revenue data by geographical segment - All of the Group's businesses are located in China and Hong Kong, and all non-current assets (excluding goodwill) are located in China[30](index=30&type=chunk) Revenue by Geographical Segment (RMB thousands) | Region | H1 2025 Revenue | H1 2024 Revenue | Change (%) | | :--- | :--- | :--- | :--- | | China | 31,462 | 30,651 | +2.6% | | Europe | 5,688 | 5,637 | +0.9% | | North America | 45,837 | 78,594 | -41.7% | | Asia | 24,679 | 7,600 | +224.7% | | Total | 109,263 | 124,660 | -12.4% | [6. Revenue](index=17&type=section&id=6.%20%E6%94%B6%E5%85%A5) This note details the Group's revenue composition for the six months ended June 30, 2025, primarily from sales of inflatable products, dental clinic services, and sales of yarn and polyester, with total revenue decreasing by 12.4% year-on-year Revenue Composition (RMB thousands) | Revenue Source | H1 2025 | H1 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Sales of inflatable products and related accessories | 79,698 | 103,126 | -22.7% | | Subcontracting income | 1,174 | 439 | +167.4% | | Provision of dental clinic services | 7,202 | 7,092 | +1.55% | | Sales of yarn and polyester | 21,189 | 14,003 | +51.3% | | Total | 109,263 | 124,660 | -12.4% | [7. Other Income and Gains](index=18&type=section&id=7.%20%E5%85%B6%E4%BB%96%E6%94%B6%E5%85%A5%E6%88%96%E6%94%B6%E7%9B%8A) This note presents the Group's other income and gains for the six months ended June 30, 2025, with the total significantly increasing by 449.8%, primarily due to a net gain on disposal of assets and liabilities classified as held for sale Other Income and Gains (RMB thousands) | Item | H1 2025 | H1 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Interest income from bank deposits | 272 | 263 | +3.4% | | Net exchange gain | – | 901 | -100% | | Grants and subsidies | 72 | 81 | -11.1% | | Net gain on disposal of assets and liabilities classified as held for sale | 6,551 | – | N/A | | Total | 6,895 | 1,254 | +449.8% | [8. Finance Costs](index=18&type=section&id=8.%20%E8%9E%8D%E8%B3%87%E6%88%90%E6%9C%AC) This note explains the Group's finance costs for the six months ended June 30, 2025, with the total decreasing significantly by 87.1% year-on-year, mainly due to reduced interest on lease liabilities and bank borrowings Finance Costs (RMB thousands) | Item | H1 2025 | H1 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Interest on lease liabilities | 72 | 417 | -82.7% | | Interest on bank borrowings | – | 141 | -100% | | Total | 72 | 558 | -87.1% | [9. Income Tax Expense](index=19&type=section&id=9.%20%E6%89%80%E5%BE%97%E7%A8%85%E9%96%8B%E6%94%AF) This note presents the Group's income tax expense for the six months ended June 30, 2025, with the total significantly increasing by 741.7% year-on-year, primarily due to higher Hong Kong profits tax and PRC enterprise income tax Income Tax Expense (RMB thousands) | Item | H1 2025 | H1 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Hong Kong profits tax | 600 | 211 | +184.4% | | PRC enterprise income tax | 1,681 | 60 | +2701.7% | | Total | 2,281 | 271 | +741.7% | - Hong Kong profits tax operates under a two-tiered system, with the first **HKD 2 million** of assessable profits taxed at **8.25%** and the remainder at **16.5%**[36](index=36&type=chunk) - PRC subsidiaries are subject to enterprise income tax at a rate of **25%**, unless preferential tax rates apply[37](index=37&type=chunk) [10. Profit for the Period](index=20&type=section&id=10.%20%E6%9C%9F%E5%85%A7%E5%88%A9%E6%BD%A4) This note lists the expenses deducted in calculating the profit for the period, including cost of inventories, depreciation, amortization, exchange losses, and employee benefit expenses Profit for the Period Deductions (RMB thousands) | Item | H1 2025 | H1 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Cost of inventories recognized as expense | 88,231 | 101,256 | -12.8% | | Depreciation of property, plant and equipment | 218 | 344 | -36.7% | | Depreciation of right-of-use assets | 621 | 541 | +14.8% | | Total employee benefit expenses | 24,194 | 26,096 | -7.3% | [11. Earnings Per Share](index=20&type=section&id=11.%20%E6%AF%8F%E8%82%A1%E7%9B%88%E5%88%A9) This note explains the calculation of basic and diluted earnings per share attributable to owners of the Company, showing basic earnings per share of **RMB 0.30 cents** for the first half of 2025, a significant increase from the same period in 2024 Earnings Per Share Data | Indicator | H1 2025 | H1 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Profit for the period attributable to owners of the Company used in calculating basic earnings per share (RMB thousands) | 4,069 | 880 | +362.4% | | Weighted average number of ordinary shares used in calculating basic earnings per share (thousands) | 1,339,028 | 1,112,308 | +20.4% | | Basic Earnings Per Share (RMB cents) | 0.30 | 0.08 | +275.0% | | Diluted Earnings Per Share (RMB cents) | 0.30 | 0.08 | +275.0% | [12. Dividends](index=21&type=section&id=12.%20%E8%82%A1%E6%81%AF) This note states that the Board of Directors does not recommend the payment of any interim dividend for the six months ended June 30, 2025, consistent with the same period in 2024 - The Board of Directors does not recommend the payment of any interim dividend for the six months ended June 30, 2025 (2024: nil)[41](index=41&type=chunk) [13. Property, Plant and Equipment](index=21&type=section&id=13.%20%E7%89%A9%E6%A5%AD%E3%80%81%E5%BB%A0%E6%88%BF%E5%8F%8A%E8%A8%AD%E5%82%99) This note provides details of the Group's property, plant and equipment cost, accumulated depreciation, and carrying amounts, showing a total carrying amount of **RMB 1,583 thousand** as of June 30, 2025, a slight decrease from the end of 2024 Property, Plant and Equipment Carrying Amounts (RMB thousands) | Item | June 30, 2025 | December 31, 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Leasehold improvements | 140 | 224 | -37.5% | | Plant and machinery | 38 | 40 | -5.0% | | Medical equipment | 1,364 | 1,458 | -6.5% | | Motor vehicles | 12 | 12 | 0.0% | | Furniture and fixtures | 29 | 53 | -45.3% | | Total | 1,583 | 1,787 | -11.4% | [14. Intangible Assets](index=21&type=section&id=14.%20%E7%84%A1%E5%BD%A2%E8%B3%87%E7%94%A2) This note states that the Group paid approximately **RMB 35,000** for the acquisition of intangible assets during the period - The Group paid approximately **RMB 35,000** for the acquisition of intangible assets during the period (2024: nil)[43](index=43&type=chunk) [15. Trade Receivables](index=22&type=section&id=15.%20%E8%B2%BF%E6%98%93%E6%87%89%E6%94%B6%E6%AC%BE%E9%A0%85) This note details the Group's trade receivables and their ageing analysis as of June 30, 2025, with the total significantly increasing year-on-year, primarily from the inflatable products business and yarn and polyester business Trade Receivables Composition (RMB thousands) | Business | June 30, 2025 | December 31, 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Inflatable Products Business | 27,850 | 15,235 | +82.8% | | Dental Clinic Business | 10,436 | 13,937 | -25.2% | | Yarn and Polyester Business | 11,844 | 6,641 | +78.3% | | Provision for credit losses | (2,034) | (2,038) | -0.2% | | Total | 48,096 | 33,775 | +42.4% | - The credit period granted to customers ranges from **0 to 270 days**, and no interest is charged on overdue receivables[44](index=44&type=chunk) Ageing Analysis of Trade Receivables (RMB thousands) | Ageing | June 30, 2025 | December 31, 2024 | Change (%) | | :--- | :--- | :--- | :--- | | 0–30 days | 8,217 | 20,537 | -60.0% | | 31–60 days | 15,497 | 3,932 | +294.1% | | 61–90 days | 11,366 | 1,821 | +524.2% | | 91–120 days | 5,808 | 4,080 | +42.3% | | 121–365 days | 7,208 | 3,405 | +111.7% | | Total | 48,096 | 33,775 | +42.4% | [16. Trade and Other Payables](index=23&type=section&id=16.%20%E8%B2%BF%E6%98%93%E5%8F%8A%E5%85%B6%E4%BB%96%E6%87%89%E4%BB%98%E6%AC%BE%E9%A0%85) This note lists the Group's trade and other payables and their ageing analysis as of June 30, 2025, with the total significantly decreasing year-on-year, primarily due to reductions in trade payables, accrued salaries and other benefits, and other payables Trade and Other Payables Composition (RMB thousands) | Item | June 30, 2025 | December 31, 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Trade payables | 10,232 | 16,090 | -36.4% | | Accrued salaries and other benefits | 9,600 | 10,890 | -11.8% | | Other payables and accrued charges | 12,426 | 17,072 | -27.2% | | Total | 32,258 | 48,415 | -33.4% | Ageing Analysis of Trade Payables (RMB thousands) | Ageing | June 30, 2025 | December 31, 2024 | Change (%) | | :--- | :--- | :--- | :--- | | 0–30 days | 4,365 | 9,145 | -52.3% | | 31–60 days | 1,696 | 3,682 | -53.9% | | 61–90 days | 1,366 | 1,693 | -19.3% | | 91–120 days | 2,104 | 881 | +138.8% | | 121–365 days | 655 | 454 | +44.3% | | Over 365 days | 46 | 235 | -80.5% | | Total | 10,232 | 16,090 | -36.4% | [17. Share Capital](index=24&type=section&id=17.%20%E8%82%A1%E6%9C%AC) This note provides details of the Company's authorized and issued ordinary share capital, showing an increase in issued share capital as of June 30, 2025, due to the issuance of new shares Share Capital Details | Item | June 30, 2025 (thousands of shares) | December 31, 2024 (thousands of shares) | Change (thousands of shares) | | :--- | :--- | :--- | :--- | | Number of authorized ordinary shares | 2,000,000 | 2,000,000 | 0 | | Number of issued and fully paid ordinary shares | 1,368,000 | 1,140,000 | +228,000 | | Equivalent to RMB (thousands) | 12,180 | 10,059 | +2,121 | - On January 24, 2025, the Company issued **228,000,000 ordinary shares** to subscribers at an issue price of **HKD 0.14 per share**, raising net proceeds of approximately **HKD 31,720,000**[47](index=47&type=chunk) [Management Discussion and Analysis](index=25&type=section&id=%E7%AE%A1%E7%90%86%E5%B1%A4%E8%A8%8E%E8%AB%96%E5%8F%8A%E5%88%86%E6%9E%90) This section provides a comprehensive review and analysis of the Group's business operations, financial performance, liquidity, capital structure, and future outlook [Business Review and Outlook](index=25&type=section&id=%E6%A5%AD%E5%8B%99%E5%9B%9E%E9%A1%A7%E5%8F%8A%E5%B1%95%E6%9C%9B) This sub-section reviews the Group's 20-year experience in inflatable products and highlights its diversification strategy since 2023 into dental clinic services and yarn and polyester sales through acquisitions - The Group has **20 years of experience** in designing, manufacturing, and selling inflatable amusement parks and other inflatable products[49](index=49&type=chunk) - In January 2023, the Group acquired Hong Kong Shengke Holdings Limited, expanding into dental clinic services and sales of dental products[50](index=50&type=chunk) - In January 2024, the Group acquired Hong Kong Taixing Holdings Limited, expanding into sales of yarn and polyester[50](index=50&type=chunk) [Financial Review](index=25&type=section&id=%E8%B2%A1%E5%8B%99%E5%9B%9E%E9%A1%A7) This sub-section provides a detailed analysis of the Group's financial performance for the six months ended June 30, 2025, covering changes in revenue, cost of sales, gross profit, other income and gains, various expenses, finance costs, and profit for the period, noting no interim dividend recommendation - Total revenue decreased by **12.4%** to **RMB 109,263 thousand**[51](index=51&type=chunk) - Revenue from sales of yarn and polyester fiber increased by **51.3%**, dental clinic services revenue increased by **1.55%**, while inflatable products sales revenue decreased by **21.9%**[51](index=51&type=chunk) - Profit for the period significantly increased by **362.4%** to **RMB 4,069 thousand**[58](index=58&type=chunk) [Revenue](index=25&type=section&id=%E6%94%B6%E5%85%A5) This sub-section analyzes the Group's revenue performance across its business segments, with total revenue decreasing by 12.4% year-on-year, primarily due to a significant reduction in inflatable products revenue, offset by substantial growth in yarn and polyester business revenue Revenue Composition and Change (RMB thousands) | Business | H1 2025 Revenue | H1 2024 Revenue | Change (%) | | :--- | :--- | :--- | :--- | | Sales of inflatable products and related accessories | 80,872 | 103,565 | -21.9% | | Provision of dental clinic services | 7,202 | 7,092 | +1.55% | | Sales of yarn and polyester fiber | 21,189 | 14,003 | +51.3% | | Total Revenue | 109,263 | 124,660 | -12.4% | [Cost of Sales](index=25&type=section&id=%E9%8A%B7%E5%94%AE%E6%88%90%E6%9C%AC) This sub-section states that the cost of sales for the period was approximately **RMB 90,141 thousand**, a decrease of approximately **11.0%** compared to the same period in 2024 Cost of Sales (RMB thousands) | Indicator | H1 2025 | H1 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Cost of Sales | 90,141 | 101,256 | -11.0% | [Gross Profit and Gross Profit Margin](index=26&type=section&id=%E6%AF%9B%E5%88%A9%E5%8F%8A%E6%AF%9B%E5%88%A9%E7%8E%87) This sub-section analyzes the Group's gross profit and gross profit margin, with total gross profit decreasing by 18.3% year-on-year and the overall gross profit margin declining by 1.3 percentage points to 17.5%, mainly due to slight decreases in inflatable products and dental clinic business gross profit margins, but a significant increase in yarn and polyester business gross profit margin Gross Profit and Gross Profit Margin (RMB thousands) | Indicator | H1 2025 | H1 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Gross Profit | 19,122 | 23,404 | -18.3% | | Overall Gross Profit Margin | 17.5% | 18.8% | -1.3 percentage points | | Inflatable Products Business Gross Profit Margin | 17.1% | 18.9% | -1.8 percentage points | | Dental Clinic Business Gross Profit Margin | 42.0% | 43.1% | -1.1 percentage points | | Yarn and Polyester Sales Business Gross Profit Margin | 10.8% | 5.83% | +4.97 percentage points | [Other Income and Gains](index=26&type=section&id=%E5%85%B6%E4%BB%96%E6%94%B6%E5%85%A5%E5%8F%8A%E6%94%B6%E7%9B%8A) This sub-section states that total other income and gains for the period significantly increased by **449.8%**, primarily due to a net gain on disposal of assets and liabilities classified as held for sale of approximately **RMB 6,551 thousand** Other Income and Gains (RMB thousands) | Indicator | H1 2025 | H1 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Total Other Income and Gains | 6,895 | 1,254 | +449.8% | | Net gain on disposal of assets and liabilities classified as held for sale | 6,551 | – | N/A | [Distribution and Selling Expenses](index=26&type=section&id=%E5%88%86%E9%8A%B7%E5%8F%8A%E9%8A%B7%E5%94%AE%E9%96%8B%E6%94%AF) This sub-section states that total distribution and selling expenses for the period were approximately **RMB 7,516 thousand**, a decrease of approximately **39.8%** compared to the same period in 2024 Distribution and Selling Expenses (RMB thousands) | Indicator | H1 2025 | H1 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Total Distribution and Selling Expenses | 7,516 | 12,483 | -39.8% | [Administrative Expenses](index=26&type=section&id=%E8%A1%8C%E6%94%BF%E9%96%8B%E6%94%AF) This sub-section states that administrative expenses for the period were approximately **RMB 12,079 thousand**, an increase of approximately **15.4%** compared to the same period in 2024 Administrative Expenses (RMB thousands) | Indicator | H1 2025 | H1 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Administrative Expenses | 12,079 | 10,466 | +15.4% | [Finance Costs](index=26&type=section&id=%E8%9E%8D%E8%B3%87%E6%88%90%E6%9C%AC) This sub-section states that finance costs for the period were approximately **RMB 72 thousand**, a significant decrease of **87.1%** compared to the same period in 2024, primarily due to reduced interest on lease liabilities and bank borrowings Finance Costs (RMB thousands) | Indicator | H1 2025 | H1 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Finance Costs | 72 | 558 | -87.1% | | Decrease in interest on lease liabilities | 345 | N/A | N/A | | Decrease in interest on bank borrowings | 141 | N/A | N/A | [Profit for the Period](index=26&type=section&id=%E6%9C%AC%E6%9C%9F%E9%96%93%E5%88%A9%E6%BD%A4) This sub-section states that the profit for the period was approximately **RMB 4,069 thousand**, a significant increase of **362.4%** compared to the same period in 2024 Profit for the Period (RMB thousands) | Indicator | H1 2025 | H1 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Profit for the Period | 4,069 | 880 | +362.4% | [Dividends](index=26&type=section&id=%E8%82%A1%E6%81%AF) This sub-section states that the Board of Directors does not recommend the payment of any interim dividend for the period, consistent with the same period in 2024 - The Board of Directors does not recommend the payment of any interim dividend for the period (2024: nil)[59](index=59&type=chunk) [Liquidity, Financial Resources, Capital Structure and Gearing Ratio](index=27&type=section&id=%E6%B5%81%E5%8B%95%E8%B3%87%E9%87%91%E3%80%81%E8%B2%A1%E5%8B%99%E8%B3%87%E6%BA%90%E3%80%81%E8%B3%87%E6%9C%AC%E6%9E%B6%E6%A7%8B%E5%8F%8A%E8%B3%87%E7%94%A2%E8%B2%A0%E5%82%B5%E6%AF%94%E7%8E%87) This sub-section analyzes the Group's liquidity position, showing an increase in total equity attributable to owners of the Company, improved current and quick ratios, and a low gearing ratio as of June 30, 2025, indicating a sound financial position Liquidity and Capital Structure Indicators | Indicator | June 30, 2025 | December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Total equity attributable to owners of the Company (RMB thousands) | 139,259 | 107,138 | +30.0% | | Current Ratio | 3.57 | 2.08 | +71.6% | | Quick Ratio | 2.08 | 1.43 | +45.5% | | Bank Borrowings (RMB thousands) | 676 | 676 | 0.0% | | Gearing Ratio | 0.5% | 0.6% | -0.1 percentage points | - The Directors believe the Group's financial position is sound, enabling it to expand its core businesses and achieve its business objectives[60](index=60&type=chunk) [Material Investments Held, Material Acquisitions and Disposals of Subsidiaries, Associates and Joint Ventures, and Future Plans for Material Investments or Capital Assets](index=27&type=section&id=%E6%89%80%E6%8C%81%E9%87%8D%E5%A4%A7%E6%8A%95%E8%B3%87%E3%80%81%E9%87%8D%E5%A4%A7%E6%94%B6%E8%B3%BC%E5%8F%8A%E5%87%BA%E5%94%AE%E9%99%84%E5%B1%AC%E5%85%AC%E5%8F%B8%E3%80%81%E8%81%AF%E7%87%9F%E5%85%AC%E5%8F%B8%E5%8F%8A%E5%90%88%E7%87%9F%E4%BC%81%E6%A5%AD%EF%BC%8C%E4%BB%A5%E5%8F%8A%E9%87%8D%E5%A4%A7%E6%8A%95%E8%B3%87%E6%88%96%E8%B3%87%E6%9C%AC%E8%B3%87%E7%94%A2%E4%B9%8B%E6%9C%AA%E4%BE%86%E8%A8%88%E5%8A%83) This sub-section states that the Group had no other material investments, acquisitions, or disposals of subsidiaries or associates during the period - During the period, the Group had no other material investments, material acquisitions, or disposals of subsidiaries or associates[61](index=61&type=chunk) [Contingent Liabilities](index=27&type=section&id=%E6%88%96%E7%84%B6%E8%B2%A0%E5%82%B5) This sub-section states that the Group had no material contingent liabilities as of June 30, 2025 - As of June 30, 2025, the Group had no material contingent liabilities (December 31, 2024: nil)[62](index=62&type=chunk) [Pledge of Assets](index=27&type=section&id=%E8%B3%87%E7%94%A2%E6%8A%B5%E6%8A%BC) This sub-section states that the Group had no assets pledged for bank borrowings or other purposes as of June 30, 2025 - As of June 30, 2025, the Group had no assets pledged for bank borrowings or other purposes (December 31, 2024: nil)[63](index=63&type=chunk) [Commitments](index=27&type=section&id=%E6%89%BF%E6%93%94) This sub-section states that the Company had no contractual commitments for the acquisition of property, plant and equipment as of June 30, 2025 - As of June 30, 2025, the Company had no contractual commitments for the acquisition of property, plant and equipment (December 31, 2024: nil)[64](index=64&type=chunk) [Events After Reporting Period](index=27&type=section&id=%E5%A0%B1%E5%91%8A%E6%9C%9F%E5%BE%8C%E4%BA%8B%E9%A0%85) This sub-section discloses a significant post-reporting period event: the Company's proposal to create additional shares to increase authorized share capital, terminate the old share option scheme, and adopt a new one, with an Extraordinary General Meeting scheduled for August 29, 2025 - On August 8, 2025, the Company proposed to create **3,000,000,000 new shares**, increasing the authorized share capital from **HKD 20 million** to **HKD 50 million**[65](index=65&type=chunk) - The Company plans to terminate the 2017 Share Option Scheme and adopt a new share option scheme[65](index=65&type=chunk) - An Extraordinary General Meeting is scheduled for August 29, 2025, to consider these matters[65](index=65&type=chunk) [Foreign Exchange Risk](index=28&type=section&id=%E5%A4%96%E5%8C%AF%E9%A2%A8%E9%9A%AA) This sub-section discusses the Group's foreign exchange risk, primarily due to most revenue being denominated in USD and costs in RMB, where fluctuations between RMB and USD exchange rates could significantly impact results, with limited hedging capabilities due to RMB's non-convertibility - The Group's majority of revenue is denominated in USD, while product costs are denominated in RMB, and fluctuations in the RMB to USD exchange rate could have a significant impact[66](index=66&type=chunk) - The Group currently has no formal foreign exchange hedging policy, and its ability to mitigate foreign exchange risk is limited due to the non-convertibility of RMB[66](index=66&type=chunk) [Treasury Policy](index=28&type=section&id=%E5%BA%AB%E5%8B%99%E6%94%BF%E7%AD%96) This sub-section outlines the Group's treasury policy, focusing on credit risk management by transacting only with customers with good credit records and reputable banks to mitigate risks associated with trade receivables and bank deposits - The Group's credit risk primarily arises from trade receivables and bank deposits[67](index=67&type=chunk) - A policy of transacting only with customers with good collection track records and banks with good credit ratings has been adopted[67](index=67&type=chunk) - No bad debt provisions were recognized for the six months ended June 30, 2025, and 2024[67](index=67&type=chunk) [Employees and Remuneration Policy](index=28&type=section&id=%E5%83%B1%E5%93%A1%E5%8F%8A%E8%96%AA%E9%85%AC%E6%94%BF%E7%AD%96) This sub-section provides the Group's employee numbers and remuneration policy, with **551 full-time employees** as of June 30, 2025, a year-on-year decrease in total employee remuneration, and details the benefits provided Employees and Remuneration Data | Indicator | June 30, 2025 | December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Number of full-time employees | 551 | 544 | +7 | | Total employee remuneration (RMB thousands) | 24,194 | 26,096 | -7.3% | - The Group provides employees with discretionary bonuses, social insurance, housing provident fund, and MPF contributions, and may grant share options[68](index=68&type=chunk) [Use of Proceeds from Share Subscription](index=29&type=section&id=%E5%8B%9F%E9%9B%86%E8%B3%87%E9%87%91%E8%AA%8D%E8%B3%BC%E8%82%A1%E4%BB%BD%E7%9A%84%E7%94%A8%E9%80%94) This sub-section explains that the Company completed a share subscription on January 24, 2025, raising net proceeds of approximately **HKD 31.72 million**, of which **HKD 11.72 million** has been used for general working capital, and **HKD 20 million** is unutilized and planned for identifying potential acquisition or investment opportunities - On January 24, 2025, the Company completed a share subscription, raising net proceeds of approximately **HKD 31,720,000**[69](index=69&type=chunk) Use of Proceeds (HKD millions) | Planned Use | Planned Amount | Utilized | Unutilized | | :--- | :--- | :--- | :--- | | Identifying potential acquisition or investment opportunities | 20 | – | 20 | | General working capital | 11.72 | 11.72 | – | | Total | 31.72 | 11.72 | 20 | [Corporate Governance and Other Information](index=29&type=section&id=%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB%E5%8F%8A%E5%85%B6%E4%BB%96%E8%B3%87%E6%96%99) This section covers corporate governance practices, directors' and shareholders' interests, share option schemes, potential conflicts of interest, and compliance with listing rules [Directors' and Chief Executive's Interests and Short Positions in Shares, Underlying Shares and Debentures of the Company and its Associated Corporations](index=29&type=section&id=%E8%91%A3%E4%BA%8B%E5%8F%8A%E4%B8%BB%E8%A6%81%E8%A1%8C%E6%94%BF%E4%BA%BA%E5%93%A1%E6%96%BC%E6%9C%AC%E5%85%AC%E5%8F%B8%E5%8F%8A%E5%85%B6%E7%9B%B8%E8%81%AF%E6%B3%95%E5%9C%98%E4%B9%8B%E8%82%A1%E4%BB%BD%E3%80%81%E7%9B%B8%E9%97%9C%E8%82%A1%E4%BB%BD%E5%8F%8A%E5%82%B5%E6%AC%8A%E8%AD%89%E4%B8%AD%E4%B9%8B%E6%AC%8A%E7%9B%8A%E5%8F%8A%E6%B7%A1%E5%80%89) This sub-section discloses the long positions of directors and chief executives in the Company's ordinary shares as of June 30, 2025, with Ms. Yan Ping holding **31.04%** equity through a controlled corporation Directors'/Chief Executive's Long Positions in Ordinary Shares of the Company | Name of Director/Chief Executive | Capacity/Nature of Interest | Number of Shares | Percentage of Shareholding | | :--- | :--- | :--- | :--- | | Ms. Yan Ping | Person with interest in controlled corporation | 424,560,000 | 31.04% | - Save for Ms. Yan Ping, no other directors or chief executives had any disclosable interests or short positions in the shares, underlying shares, or debentures of the Company or any associated corporation[72](index=72&type=chunk) [Substantial and Other Shareholders' Interests and Short Positions in Shares and Underlying Shares of the Company](index=30&type=section&id=%E4%B8%BB%E8%A6%81%E5%8F%8A%E5%85%B6%E4%BB%96%E8%82%A1%E6%9D%B1%E6%96%BC%E6%9C%AC%E5%85%AC%E5%8F%B8%E8%82%A1%E4%BB%BD%E5%8F%8A%E7%9B%B8%E9%97%9C%E8%82%A1%E4%BB%BD%E4%B8%AD%E4%B9%8B%E6%AC%8A%E7%9B%8A%E5%8F%8A%E6%B7%A1%E5%80%89) This sub-section states that as of June 30, 2025, no other persons or corporations, apart from the Company's directors or chief executives, held disclosable interests or short positions of **5% or more** in the Company's shares and underlying shares under the Securities and Futures Ordinance - As of June 30, 2025, save for the directors or chief executives of the Company, no other persons or corporations held disclosable interests or short positions of **5% or more** in the Company's shares and underlying shares under the Securities and Futures Ordinance[73](index=73&type=chunk) [Share Option Scheme](index=30&type=section&id=%E8%B3%BC%E8%82%A1%E6%AC%8A%E8%A8%88%E5%8A%83) This sub-section introduces the Company's 2017 Share Option Scheme, designed to reward and retain talent, and discloses details of **80,000,000 share options** granted on June 6, 2025, including their exercise price and vesting period - The Company adopted a Share Option Scheme on November 15, 2017, to reward and retain eligible participants[74](index=74&type=chunk) - On June 6, 2025, a total of **80,000,000 share options** were granted to eleven grantees, with an exercise price of **HKD 0.095 per share**[74](index=74&type=chunk) - The share options are exercisable from June 6, 2026, to June 5, 2035, and will vest on June 6, 2026[74](index=74&type=chunk) [Competition and Conflicts of Interest](index=30&type=section&id=%E7%AB%B6%E7%88%AD%E5%8F%8A%E5%88%A9%E7%9B%8A%E8%A1%9D%E7%AA%81) This sub-section declares that during the period, no directors, controlling shareholders, or substantial shareholders of the Company, or their respective close associates, engaged in any business that competes or may compete with the Group's business, nor were there any other conflicts of interest - During the period, no directors, controlling shareholders, or substantial shareholders of the Company, or their respective close associates, engaged in any business that competes or may compete with the Group's business[75](index=75&type=chunk) - There were no other conflicts of interest with the Group[75](index=75&type=chunk) [Directors' Securities Transactions](index=31&type=section&id=%E8%91%A3%E4%BA%8B%E7%9A%84%E8%AD%89%E5%88%B8%E4%BA%A4%E6%98%93) This sub-section confirms that the Company has adopted a code of conduct for directors' securities dealings and, upon enquiry, all directors have confirmed compliance with the relevant standards and code during the period - The Company has adopted a code of conduct for directors' securities dealings, and all directors have confirmed compliance with the required standard of dealings during the period[77](index=77&type=chunk) [Purchase, Sale or Redemption of the Company's Securities](index=31&type=section&id=%E8%B3%BC%E8%B2%B7%E3%80%81%E5%87%BA%E5%94%AE%E6%88%96%E8%B4%96%E5%9B%9E%E6%9C%AC%E5%85%AC%E5%8F%B8%E8%AD%89%E5%88%B8) This sub-section states that neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's securities during the period - During the period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's securities[78](index=78&type=chunk) [Corporate Governance Code](index=31&type=section&id=%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB%E5%AE%88%E5%89%87) This sub-section states that the Company has applied the principles and complied with the applicable code provisions of the Corporate Governance Code as set out in Appendix 15 to the GEM Listing Rules during the period - The Company has applied and complied with the applicable code provisions of the Corporate Governance Code as set out in Appendix 15 to the GEM Listing Rules[79](index=79&type=chunk) [Changes in Directors' Information](index=31&type=section&id=%E8%91%A3%E4%BA%8B%E8%B3%87%E6%96%99%E4%B9%8B%E8%AE%8A%E6%9B%B4) This sub-section discloses changes in directors' information, specifically the removal of Ms. Shen Jindan as an independent non-executive director of the Company, effective June 6, 2025 - Ms. Shen Jindan was removed as an independent non-executive director of the Company, effective June 6, 2025[80](index=80&type=chunk) [Audit Committee](index=31&type=section&id=%E5%AF%A9%E6%A0%B8%E5%A7%94%E5%93%A1%E6%9C%83) This sub-section describes the Audit Committee's composition, terms of reference, and primary responsibilities, confirming that the committee has reviewed the unaudited condensed financial results for the period and found them to be in compliance with accounting standards, GEM Listing Rules, and adequately disclosed - The Audit Committee was established on June 20, 2017, comprising all three independent non-executive directors, with Ms. Lian Jingyu as Chairperson[81](index=81&type=chunk) - Its primary responsibilities include reviewing and overseeing the Group's financial reporting process and internal control procedures[81](index=81&type=chunk) - The Audit Committee has reviewed the unaudited condensed financial results for the period and found them to comply with applicable accounting standards, GEM Listing Rules, and to be adequately disclosed[81](index=81&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，並明確表示概不就因本公告全部或任何部份內容所產生或因依賴該等內容 而引致的任何損失承擔任何責任。 SILKWAVE INC 中播數據有限公司 （於開曼群島註冊成立之有限公司） （股份代號：471） 截至二零二五年六月三十日止六個月 中期業績公告 財務概要 – 1 – (a) 收入減少約6.3%至約2.9百萬美元。 (b) 本公司擁有人應佔期內虧損及全面虧損總額分別約為0.5百萬美元及約0.5百 萬美元。 (c) 普通股股東應佔每股基本及攤薄虧損約為0.33美分。 中播數據有限公司（「本公司」）董事（「董事」）會（「董事會」）宣佈本公司及其附屬公司 （合稱「本集團」）截至二零二五年六月三十日止六個月（「本期間」）的未經審核綜合中 期業績連同二零二四年的同期比較數字如下： 簡明綜合損益及其他全面收益表 截至二零二五年六月三十日止六個月 | | | 截至六月三十日止六個月 | | | --- | --- | --- | --- | | | | 二零二五年 | 二零二四年 | | | 附註 | 千美元 | 千 ...

[Company Information and Report Overview](index=1&type=section&id=Company%20Information%20and%20Report%20Overview) This report, issued by China Ruifeng Renewable Energy Holdings Limited (Stock Code: 00527), discloses the unaudited interim results for the six months ended June 30, 2025 [Basic Company Information](index=1&type=section&id=Basic%20Company%20Information) The report provides fundamental details of China Ruifeng Renewable Energy Holdings Limited, including its stock code and the reporting period - Company name: China Ruifeng Renewable Energy Holdings Limited (CHINA RUIFENG RENEWABLE ENERGY HOLDINGS LIMITED)[2](index=2&type=chunk) - Stock Code: **00527**[2](index=2&type=chunk) [Report Statement and Period](index=1&type=section&id=Report%20Statement%20and%20Period) This announcement, not the responsibility of HKEX or HKSE, presents the unaudited interim results for the six months ended June 30, 2025 - This report presents the unaudited interim results for the six months ended June 30, 2025[2](index=2&type=chunk) - Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement[1](index=1&type=chunk) [Condensed Consolidated Financial Statements](index=2&type=section&id=Condensed%20Consolidated%20Financial%20Statements) This section presents the condensed consolidated financial performance, comprehensive income, and financial position of the Group [Condensed Consolidated Statement of Profit or Loss](index=2&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss) For the six months ended June 30, 2025, revenue increased by 6% to RMB 183.44 million, but gross profit decreased by 30% to RMB 45.33 million, with loss for the period expanding to RMB 40.36 million Key Data from Condensed Consolidated Statement of Profit or Loss (For the six months ended June 30) | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | 183,438 | 173,602 | +5.67% | | Cost of sales | (138,110) | (109,022) | +26.68% | | Gross profit | 45,328 | 64,580 | -29.81% | | Operating profit | 41,132 | 56,385 | -27.05% | | Finance costs | (60,079) | (63,765) | -5.89% | | Loss before tax | (18,595) | (7,398) | +151.35% | | Income tax expense | (21,762) | (14,446) | +50.64% | | Loss for the period | (40,357) | (21,844) | +84.75% | | Loss attributable to owners of the Company | (35,526) | (36,818) | -3.51% | | Basic loss per share (RMB) | (0.021) | (0.022) | -4.55% | - The expanded loss for the period is primarily due to electricity costs and depreciation expenses incurred during the operational testing phase of the energy storage power station project[39](index=39&type=chunk) [Condensed Consolidated Statement of Comprehensive Income](index=3&type=section&id=Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) Total comprehensive loss for the period narrowed to RMB 27.08 million for the six months ended June 30, 2025, primarily due to foreign exchange differences from overseas operations Key Data from Condensed Consolidated Statement of Comprehensive Income (For the six months ended June 30) | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | YoY Change | | :--- | :--- | :--- | :--- | | Loss for the period | (40,357) | (21,844) | +84.75% | | Exchange differences on translation of overseas operations | 19,315 | (15,742) | Significant improvement | | Exchange differences on translation of financial statements of the Company | (6,036) | 6,128 | Significant deterioration | | Other comprehensive income/(loss) for the period | 13,279 | (9,614) | Significant improvement | | Total comprehensive loss for the period | (27,078) | (31,458) | -13.93% | | Total comprehensive loss attributable to owners of the Company | (22,247) | (46,432) | -52.10% | [Condensed Consolidated Statement of Financial Position](index=4&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, total assets increased to RMB 2.73 billion, total liabilities to RMB 2.68 billion, with net current liabilities improving to RMB 230.37 million Key Data from Condensed Consolidated Statement of Financial Position (As of June 30) | Indicator | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | Change | | :--- | :--- | :--- | :--- | | Property, plant and equipment | 1,436,001 | 1,092,034 | +31.50% | | Prepayments and other receivables (non-current) | 239,082 | 414,636 | -42.34% | | Trade and other receivables (current) | 689,321 | 601,642 | +14.57% | | Cash and cash equivalents | 243,371 | 244,609 | -0.51% | | Total assets | 2,734,103 | 2,479,411 | +10.27% | | Total equity | 59,591 | 86,669 | -31.25% | | Borrowings (non-current) | 1,507,344 | 1,288,855 | +16.95% | | Borrowings (current) | 807,467 | 787,772 | +2.50% | | Total liabilities | 2,674,512 | 2,392,742 | +11.78% | | Net current liabilities | (230,366) | (252,551) | 8.78% improvement | [Notes to the Financial Statements](index=6&type=section&id=Notes%20to%20the%20Financial%20Statements) This section details the basis of preparation, accounting policies, and specific financial items for the interim period [Basis of Preparation and Accounting Policies](index=6&type=section&id=Basis%20of%20Preparation%20and%20Accounting%20Policies) The condensed consolidated financial statements are prepared in accordance with HKAS 34 and Listing Rules, consistent with 2024 annual policies, with no significant impact from new HKFRS amendments - The financial statements are prepared in accordance with Hong Kong Accounting Standard 34 and the Listing Rules issued by the Hong Kong Institute of Certified Public Accountants[8](index=8&type=chunk) - The principal accounting policies adopted are consistent with those used in the annual consolidated financial statements for the year ended December 31, 2024[8](index=8&type=chunk) - Newly issued but not yet effective Hong Kong Financial Reporting Standards are not expected to have a significant impact on the Group's financial statements[9](index=9&type=chunk) [Going Concern](index=6&type=section&id=Going%20Concern) Despite net current liabilities of RMB 230.37 million and a net loss of RMB 40.36 million as of June 30, 2025, the Group's financial statements are prepared on a going concern basis due to mitigating actions - As of June 30, 2025, the Group's current liabilities exceeded its current assets by approximately **RMB 230,366,000** and it incurred a net loss of approximately **RMB 40,357,000**[10](index=10&type=chunk) - Yinghui Limited has agreed to extend the maturity date of the convertible bonds to June 2026, involving a total amount of approximately **RMB 415,173,000**[10](index=10&type=chunk) - The Group has obtained other loans of approximately **RMB 790,701,000** from a finance lease company and can draw down remaining unutilised loan facilities of approximately **RMB 400,000,000**[11](index=11&type=chunk) [Revenue](index=7&type=section&id=Revenue) Total revenue for the six months ended June 30, 2025, was RMB 183.44 million, primarily from electricity sales and tariff subsidies, with new revenue streams from machinery sales and construction services Revenue Composition (For the six months ended June 30) | Revenue Type | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Sales of electricity | 131,557 | 125,113 | | Tariff subsidies | 49,816 | 46,015 | | Sales of machinery and electronic equipment | 151 | — | | Sales of petroleum coke | — | 2,474 | | Construction services | 1,914 | — | | **Total Revenue** | **183,438** | **173,602** | [Expenses by Nature](index=7&type=section&id=Expenses%20by%20Nature) For the six months ended June 30, 2025, total cost of sales and administrative expenses increased to RMB 166.57 million, driven by higher depreciation and staff welfare costs Major Expense Items (For the six months ended June 30) | Expense Item | 2025 (RMB thousands) | 2024 (RMB thousands) | YoY Change | | :--- | :--- | :--- | :--- | | Depreciation of property, plant and equipment | 90,990 | 65,405 | +39.12% | | Employee benefit costs | 27,527 | 24,686 | +11.51% | | Repair and maintenance expenses | 17,793 | 15,621 | +13.90% | | Consumable expenses | 12,228 | 7,959 | +53.64% | | **Total cost of sales and administrative expenses** | **166,568** | **131,491** | **+26.69%** | [Finance Costs](index=8&type=section&id=Finance%20Costs) Total finance costs for the six months ended June 30, 2025, decreased to RMB 60.08 million, primarily due to reduced interest expenses on bonds and convertible bonds Finance Costs Composition (For the six months ended June 30) | Finance Cost Type | 2025 (RMB thousands) | 2024 (RMB thousands) | YoY Change | | :--- | :--- | :--- | :--- | | Interest on bank and other borrowings | 28,470 | 26,810 | +6.20% | | Interest expense on bonds | 955 | 5,828 | -83.62% | | Interest expense on convertible bonds | 30,565 | 30,971 | -1.31% | | **Total Finance Costs** | **60,079** | **63,765** | **-5.89%** | [Income Tax Expense](index=8&type=section&id=Income%20Tax%20Expense) Income tax expense increased to RMB 21.76 million for the six months ended June 30, 2025, primarily due to increased taxable profit from Hongsong, with Chinese subsidiaries subject to a 25% tax rate Income Tax Expense Analysis (For the six months ended June 30) | Tax Type | 2025 (RMB thousands) | 2024 (RMB thousands) | YoY Change | | :--- | :--- | :--- | :--- | | PRC Enterprise Income Tax | 23,461 | 16,145 | +45.32% | | Deferred income tax | (1,699) | (1,699) | 0% | | **Total Income Tax Expense** | **21,762** | **14,446** | **+50.64%** | - The increase in income tax expense was due to the increase in taxable profit of Hongsong[46](index=46&type=chunk) [Interim Dividend](index=8&type=section&id=Interim%20Dividend) The Board of Directors does not recommend the payment of any 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[17](index=17&type=chunk) [Loss Per Share](index=9&type=section&id=Loss%20Per%20Share) Basic loss per share for the six months ended June 30, 2025, was RMB 0.021, a slight improvement from RMB 0.022, with diluted loss per share equal to basic loss per share due to anti-dilutive convertible bonds Loss Per Share (For the six months ended June 30) | Indicator | 2025 | 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Loss attributable to owners of the Company (RMB thousands) | (35,526) | (36,818) | -3.51% | | Weighted average number of ordinary shares in issue (thousands) | 1,714,719 | 1,662,365 | +3.15% | | Basic loss per share (RMB) | (0.021) | (0.022) | -4.55% | - Diluted loss per share is equal to basic loss per share as the convertible bonds have an anti-dilutive effect on the loss attributable to owners of the Company[21](index=21&type=chunk) [Property, Plant and Equipment](index=9&type=section&id=Property%2C%20Plant%20and%20Equipment) For the six months ended June 30, 2025, the Group's acquisitions of property, plant and equipment, including construction in progress, significantly increased to RMB 439.07 million Changes in Property, Plant and Equipment (For the six months ended June 30) | Type of Change | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Acquisitions | 439,065 | 2,058 | | Disposals | 3,543 | 595 | [Trade and Other Receivables](index=10&type=section&id=Trade%20and%20Other%20Receivables) As of June 30, 2025, trade receivables increased to RMB 273.81 million, with unbilled tariff subsidies accounting for RMB 251.61 million, and total prepayments, deposits, and other receivables at RMB 654.60 million Ageing Analysis of Trade Receivables (By invoice date) | Ageing | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Unbilled | 251,606 | 195,845 | | Within 3 months | 11,865 | 57,495 | | Over 3 months but within 1 year | 9,132 | 2,111 | | Over 1 year | 1,203 | 1,203 | | **Total** | **273,806** | **256,654** | - As of June 30, 2025, the Group pledged certain trade receivables with a carrying amount of approximately **RMB 262,926,000** to secure other loans[24](index=24&type=chunk) Composition of Prepayments, Deposits and Other Receivables | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Other receivables (net of loss allowance) | 250,975 | 194,037 | | Loans receivable (net of loss allowance) | 108,330 | 121,038 | | Prepayments | 267,292 | 416,549 | | **Total** | **654,597** | **759,624** | [Trade and Other Payables](index=13&type=section&id=Trade%20and%20Other%20Payables) As of June 30, 2025, total trade and other payables increased to RMB 345.91 million, with other payables and accrued expenses significantly rising to RMB 148.60 million Composition of Trade and Other Payables | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Trade payables | 12,743 | 25,672 | | Deposits received for investment and construction of renewable energy projects | 130,000 | 130,000 | | Other payables and accrued expenses | 148,603 | 84,741 | | **Total** | **345,906** | **293,662** | [Borrowings](index=14&type=section&id=Borrowings) As of June 30, 2025, total borrowings increased to RMB 2.31 billion, primarily due to increased pledged bank loans and other loans for the energy storage power station project Borrowings Composition | Borrowing Type | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | Change | | :--- | :--- | :--- | :--- | | Bank loans, secured | 974,224 | 673,605 | +44.64% | | Bonds | 95,921 | 105,988 | -9.49% | | Convertible bonds | 415,458 | 397,011 | +4.65% | | Other loans | 820,713 | 891,408 | -7.82% | | **Total** | **2,314,811** | **2,076,627** | **+11.47%** | [Share Capital](index=15&type=section&id=Share%20Capital) As of June 30, 2025, the issued and fully paid share capital remained at 1,714,719,143 shares of HKD 0.05 each, totaling RMB 77.42 million Issued and Fully Paid Share Capital | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Number of shares (thousands) | 1,714,719 | 1,714,719 | | Amount (RMB thousands) | 77,424 | 77,424 | [Commitments](index=15&type=section&id=Commitments) As of June 30, 2025, capital commitments for property, plant and equipment acquisitions, contracted but not provided for, decreased to RMB 397.94 million Capital Commitments | Commitment Type | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Acquisition of property, plant and equipment (contracted) | 397,937 | 613,234 | [Management Discussion and Analysis](index=16&type=section&id=Management%20Discussion%20and%20Analysis) This section provides an overview of the Group's business operations, financial performance, liquidity, and future outlook [Business Review](index=16&type=section&id=Business%20Review) The Group's business focuses on wind farm operations and energy storage power station projects, with wind power revenue growing by 6% and the Chabei energy storage project fully grid-connected in January 2025 [Wind Farm Operations Business](index=16&type=section&id=Wind%20Farm%20Operations%20Business) For the six months ended June 30, 2025, wind farm revenue increased by 6% to RMB 181.37 million, with stable operations at Hongsong Wind Farm and ongoing construction at Baotou Yinfeng Wind Farm - Wind farm business revenue was approximately **RMB 181,373,000**, an increase of approximately **6%** compared to the same period last year[34](index=34&type=chunk) Average Utilisation Hours of Hongsong Wind Farm | Period | Average Utilisation Hours | | :--- | :--- | | Six months ended June 30, 2025 | 1,066 | | Six months ended June 30, 2024 | 969 | - Phase I of Baotou Yinfeng Wind Farm (49.8 MW) is under construction and is expected to contribute to future revenue[36](index=36&type=chunk) [Energy Storage Power Station Project](index=16&type=section&id=Energy%20Storage%20Power%20Station%20Project) The Chabei Management Zone Energy Storage Power Station Project (300 MW/1.2 GWh) achieved full grid connection on January 22, 2025, aiming to enhance renewable energy absorption in the Beijing-Tianjin-Hebei region - The Chabei Management Zone Energy Storage Power Station Project (300 MW/1.2 GWh) successfully achieved full grid connection on January 22, 2025[37](index=37&type=chunk)[38](index=38&type=chunk) - The project's primary revenue model involves electricity market transactions and capacity leasing, aiming to increase the proportion of renewable energy consumption in the Beijing-Tianjin-Hebei region[38](index=38&type=chunk) [Financial Review](index=17&type=section&id=Financial%20Review) During the reporting period, revenue increased by 5.67% to RMB 183.44 million, but gross profit declined by 30% to RMB 45.33 million, leading to an expanded loss for the period of RMB 40.36 million [Revenue Analysis](index=17&type=section&id=Revenue%20Analysis) Total revenue for the reporting period was RMB 183.44 million, primarily from wind power generation, with new revenue from machinery sales and construction services, while petroleum coke sales ceased - During the reporting period, the Group's revenue was approximately **RMB 183,438,000**, an increase of approximately **5.67%** compared to the same period last year[39](index=39&type=chunk) - Revenue from wind farm operations was approximately **RMB 181,373,000**, an increase of approximately **6%** compared to the same period in 2024, mainly due to increased power generation and electricity sales[40](index=40&type=chunk) - New revenue streams included sales of machinery and electronic equipment of **RMB 151,000** and provision of construction services of **RMB 1,914,000**, while sales of petroleum coke ceased[40](index=40&type=chunk) [Costs and Gross Profit](index=18&type=section&id=Costs%20and%20Gross%20Profit) Cost of sales increased to RMB 138.11 million, representing 75% of revenue, and gross profit decreased by 30% to RMB 45.33 million, mainly due to electricity costs and depreciation from the energy storage project - Cost of sales was approximately **RMB 138,110,000**, accounting for approximately **75%** of the Group's revenue, compared to approximately **63%** in the same period of 2024[41](index=41&type=chunk) - Gross profit decreased by approximately **30%** to approximately **RMB 45,328,000**, primarily due to electricity costs and depreciation expenses incurred during the operational testing phase of the energy storage power station project[42](index=42&type=chunk) [Other Income and Net Loss](index=18&type=section&id=Other%20Income%20and%20Net%20Loss) Other income and net other losses primarily comprised VAT refund government subsidies of approximately RMB 14.23 million (a 50% increase) and rental income from operating premises of approximately RMB 2.01 million - Government subsidies from VAT refunds amounted to approximately **RMB 14,225,000**, an increase of approximately **50%** compared to the same period last year[43](index=43&type=chunk) [Administrative Expenses](index=18&type=section&id=Administrative%20Expenses) Administrative expenses increased by approximately 27% to RMB 28.46 million, mainly including staff salaries and benefits, and professional fees - Administrative expenses increased by approximately **27%** to approximately **RMB 28,458,000**[44](index=44&type=chunk) [Finance Costs](index=18&type=section&id=Finance%20Costs) Finance costs decreased by approximately 5.89% to RMB 60.08 million, mainly due to reduced interest expenses from other loans obtained by Hongsong and corporate bonds - Finance costs were approximately **RMB 60,079,000**, a decrease of approximately **5.89%** compared to the same period last year[45](index=45&type=chunk) - The decrease was mainly due to reduced interest expenses from other loans obtained by Hongsong and a decrease in corporate bonds issued by the Company[45](index=45&type=chunk) [Taxation and Loss for the Period](index=19&type=section&id=Taxation%20and%20Loss%20for%20the%20Period) Income tax expense increased to RMB 21.76 million due to higher taxable profit from Hongsong, contributing to an expanded loss for the period of RMB 40.36 million, mainly from energy storage project costs - Taxation increased from approximately **RMB 14,446,000** in the same period last year to approximately **RMB 21,762,000** in the reporting period, due to the increase in taxable profit of Hongsong[46](index=46&type=chunk) - The loss for the reporting period of approximately **RMB 40,357,000** was primarily attributable to electricity costs and depreciation expenses incurred during the operational testing phase of the energy storage power station project[47](index=47&type=chunk) [Liquidity and Financial Resources](index=19&type=section&id=Liquidity%20and%20Financial%20Resources) As of June 30, 2025, cash and bank balances were RMB 243.37 million, total borrowings increased to RMB 2.31 billion for the energy storage project, and the gearing ratio remained around 98% Cash and Borrowings Situation | Indicator | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | Change | | :--- | :--- | :--- | :--- | | Cash and bank balances | 243,371 | 244,609 | -0.51% | | Total borrowings | 2,314,811 | 2,076,627 | +11.47% | - The increase in total borrowings was mainly due to obtaining more bank loans for the construction and development of the energy storage power station project[49](index=49&type=chunk) - The gearing ratio was approximately **98%** as of June 30, 2025, comparable to approximately **97%** as of December 31, 2024[49](index=49&type=chunk) - Approximately **RMB 550,931,000** of interest-bearing borrowings were fixed-rate loans, and approximately **RMB 1,763,880,000** were floating-rate loans[50](index=50&type=chunk) [Share Capital and Financing Activities](index=19&type=section&id=Share%20Capital%20and%20Financing%20Activities) As of June 30, 2025, issued share capital remained unchanged, with some corporate bonds redeemed, notes fully repaid, and convertible bond maturity extended, while the Group seeks new funding for upgrades and expansion [Share Capital](index=19&type=section&id=Share%20Capital) As of June 30, 2025, the Company's total issued share capital comprised 1,714,719,143 ordinary shares of HKD 0.05 each, consistent with December 31, 2024 - As of June 30, 2025, the Company's total issued share capital comprised **1,714,719,143** ordinary shares of **HKD 0.05** each[48](index=48&type=chunk) [Corporate Bonds](index=20&type=section&id=Corporate%20Bonds) During the reporting period, no additional corporate bonds were issued, with HKD 5.23 million principal amount redeemed, leaving approximately HKD 94.77 million and RMB 5 million outstanding as of June 30, 2025 - During the reporting period, corporate bonds with a principal amount of **HKD 5,228,000** matured and were redeemed[52](index=52&type=chunk) - As of June 30, 2025, corporate bonds with principal amounts of approximately **HKD 94,768,000** and **RMB 5,000,000** were issued and outstanding[52](index=52&type=chunk) [Notes](index=20&type=section&id=Notes) The conversion mechanism for the notes (formerly convertible notes) was cancelled in 2020, and all outstanding principal amounts were repaid by June 30, 2025 - The conversion mechanism for the convertible notes was cancelled on February 12, 2020, and reclassified as notes[54](index=54&type=chunk) - As of June 30, 2025, all outstanding principal amounts of the notes have been repaid[55](index=55&type=chunk) [Convertible Bonds](index=21&type=section&id=Convertible%20Bonds) The maturity date of the new convertible bonds held by Yinghui Limited was extended to June 2026, with no rights exercised during the reporting period - Yinghui has agreed to extend the maturity date of the new convertible bonds to June 2026[58](index=58&type=chunk) - During the reporting period, no rights attached to the new convertible bonds were exercised, and no conversion shares were allotted or issued due to the conversion of new convertible bonds[58](index=58&type=chunk) [Fund Raising](index=22&type=section&id=Fund%20Raising) Apart from the subscription matters disclosed in this announcement, the Group had no other fund-raising activities during the reporting period - Except as disclosed in this announcement, the Group had no other fund-raising activities during the reporting period[60](index=60&type=chunk) [Share Option Scheme](index=22&type=section&id=Share%20Option%20Scheme) As of June 30, 2025, all share options expired on January 28, 2025, with no outstanding unexercised share options - As of June 30, 2025, there were no outstanding unexercised share options, as all share options expired on January 28, 2025[61](index=61&type=chunk) [Proposed Subscription of New Shares and Convertible Bonds](index=23&type=section&id=Proposed%20Subscription%20of%20New%20Shares%20and%20Convertible%20Bonds) The Group plans to raise funds through new share and convertible bond subscriptions with various parties for equipment upgrades, debt repayment, and working capital, while also pursuing an acquisition to enter the solar energy market in Hebei Province - The Company entered into agreements with Hebei Expressway Development (Group) Co., Ltd. to subscribe for **590,615,905** new shares and 2024 RMB convertible bonds with a principal amount of **RMB 933,689,137**[63](index=63&type=chunk) - The Board believes that the share subscription and convertible bond subscription will enable the Company to raise additional funds for upgrading generator sets, repaying borrowings, and supplementing working capital[66](index=66&type=chunk) - The proposed acquisition is expected to provide the Group with an opportunity to enter the booming solar energy market in Hebei Province and diversify its energy portfolio[67](index=67&type=chunk) [Significant Acquisitions and Disposals](index=24&type=section&id=Significant%20Acquisitions%20and%20Disposals) Apart from the proposed acquisition disclosed in this announcement, the Group had no significant acquisitions or disposals of subsidiaries and associates during the reporting period - Except as disclosed in this announcement, the Group had no significant acquisitions or disposals of subsidiaries and associates during the reporting period[68](index=68&type=chunk) [Pledge of Assets](index=25&type=section&id=Pledge%20of%20Assets) As of June 30, 2025, the Group pledged approximately RMB 517.49 million of property, plant and equipment, RMB 290.93 million of trade and other receivables, and RMB 54.45 million of financial assets as collateral for borrowings - As of June 30, 2025, the Group pledged certain property, plant and equipment with a carrying amount of approximately **RMB 517,493,000** and certain leasehold land included in right-of-use assets as collateral for borrowings[71](index=71&type=chunk) - Trade and other receivables with a carrying amount of approximately **RMB 290,926,000** and certain investments designated at fair value through other comprehensive income with a carrying amount of approximately **RMB 54,450,000** were also pledged[71](index=71&type=chunk) - The issued share capital of certain subsidiaries of the Company has been pledged to secure borrowings obtained by the Group[71](index=71&type=chunk) [Contingent Liabilities](index=26&type=section&id=Contingent%20Liabilities) As of June 30, 2025, the Group had no significant contingent liabilities - As of June 30, 2025, the Group had no significant contingent liabilities[72](index=72&type=chunk) [Employees and Remuneration Policy](index=26&type=section&id=Employees%20and%20Remuneration%20Policy) As of June 30, 2025, the Group employed 154 full-time staff in Hong Kong and China, with staff costs increasing by 11.51% to approximately RMB 27.53 million during the reporting period - As of June 30, 2025, the Group had **154** full-time employees in Hong Kong and China[73](index=73&type=chunk) - During the reporting period, the related staff costs (including Directors' emoluments) were approximately **RMB 27,527,000**, an increase of approximately **11.51%** compared to the same period last year[73](index=73&type=chunk) [Events After the Reporting Period](index=26&type=section&id=Events%20After%20the%20Reporting%20Period) Except for matters disclosed in this announcement, no significant events occurred after the end of the reporting period - Except as disclosed in this announcement, no significant events occurred after the end of the reporting period[74](index=74&type=chunk) [Future Outlook](index=26&type=section&id=Future%20Outlook) The Group plans to leverage China's supportive new energy policies to strengthen wind farm operations in North China, explore cross-industry collaborations, and diversify into solar and biomass energy through acquisitions, aiming to become a competitive renewable energy provider - China's intensive new energy policies provide comprehensive support for the industry's development, creating broader opportunities for new energy enterprises, including the Group[75](index=75&type=chunk) - The Group will strengthen its existing wind farm operation and maintenance business in North China, gradually expand to surrounding areas, and actively explore cooperation models with other industries such as electricity, transportation, and construction[76](index=76&type=chunk) - The Group will continue to seek opportunities for cooperative development or acquisitions to actively expand into other new clean energy sectors beyond wind power, such as photovoltaic and biomass energy, to build a diversified and complementary energy structure[77](index=77&type=chunk) [Other Information](index=28&type=section&id=Other%20Information) This section covers corporate governance, directors' securities dealings, interim dividend, share transactions, audit committee review, and board composition [Corporate Governance](index=28&type=section&id=Corporate%20Governance) The Company complied with the applicable code provisions of the Corporate Governance Code set out in Appendix C1 of the Listing Rules during the reporting period - The Company complied with the applicable code provisions of the Corporate Governance Code set out in Appendix C1 of the Listing Rules of the Stock Exchange during the reporting period[78](index=78&type=chunk) [Standard Code for Securities Transactions by Directors](index=28&type=section&id=Standard%20Code%20for%20Securities%20Transactions%20by%20Directors) The Company adopted a code for directors' securities transactions no less stringent than Appendix C3 of the Listing Rules, with all directors confirming strict compliance - The Company adopted a code of conduct regarding directors' securities transactions, the terms of which are no less stringent than the required standards set out in the Model Code for Securities Transactions by Directors of Listed Issuers in Appendix C3 of the Listing Rules[79](index=79&type=chunk) - All Directors confirmed that they strictly complied with the required standards set out in the Model Code and the Company's adopted code of conduct during the reporting period[79](index=79&type=chunk) [Interim Dividend](index=28&type=section&id=Interim%20Dividend) The Directors do not recommend the payment of any interim dividend for the reporting period - The Directors do not recommend the payment of any interim dividend for the reporting period[80](index=80&type=chunk) [Share Purchases, Sales or Redemptions](index=28&type=section&id=Share%20Purchases%2C%20Sales%20or%20Redemptions) Neither the Company nor 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 during the reporting period[81](index=81&type=chunk) [Audit Committee](index=28&type=section&id=Audit%20Committee) The Audit Committee reviewed the Group's unaudited financial results for the reporting period and discussed internal control systems, risk management, and financial reporting matters - The Audit Committee reviewed the Group's unaudited financial results for the reporting period[82](index=82&type=chunk) - The Audit Committee also discussed matters such as the internal control systems and risk management adopted by the Group during the reporting period, as well as the Group's financial reporting matters[82](index=82&type=chunk) [Publication of Information](index=29&type=section&id=Publication%20of%20Information) The Company's 2025 interim report will be dispatched to shareholders and published on the HKEX and Company websites in September 2025 - The Company's 2025 interim report will be dispatched to shareholders and published on the websites of the Stock Exchange and the Company respectively in September 2025[83](index=83&type=chunk) [Board of Directors](index=29&type=section&id=Board%20of%20Directors) As of the announcement date, the Board comprises executive directors Mr. Yuan Wanyong (Chairman), Mr. Zhang Zhixiang (CEO), and Mr. Ning Zhongzhi, along with independent non-executive directors Mr. Jiang Senlin, Mr. Qu Weidong, and Ms. Hu Xiaolin - As of the date of this announcement, the executive Directors are Mr. Yuan Wanyong (Chairman), Mr. Zhang Zhixiang (Chief Executive Officer), and Mr. Ning Zhongzhi[85](index=85&type=chunk) - The independent non-executive Directors are Mr. Jiang Senlin, Mr. Qu Weidong, and Ms. Hu Xiaolin[85](index=85&type=chunk)

[Interim Results Announcement](index=1&type=section&id=Interim%20Results%20Announcement) [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 for the first half of 2025 increased by 3.57% to HK$38,158 thousand, with profit for the period significantly growing to HK$11,117 thousand, primarily influenced by exchange gains and increased income tax expense Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (HK$ Thousand) | Indicator | H1 2025 (HK$ Thousand) | H1 2024 (HK$ Thousand) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 38,158 | 36,841 | 3.57% | | Profit before tax | 12,612 | 1,446 | 772.20% | | Income tax expense | (1,495) | (412) | 262.86% | | Profit for the period | 11,117 | 1,034 | 975.05% | | Other comprehensive income (expense), net of tax | 4,790 | (2,423) | N/A | | Total comprehensive income (expense) for the period attributable to owners of the Company | 15,907 | (1,389) | N/A | | Basic earnings per share | 1.86 HK cents | 0.20 HK cents | 830.00% | [Condensed Consolidated Statement of Financial Position](index=3&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the Group's total assets increased to HK$471,835 thousand, net assets rose to HK$428,507 thousand, and net current assets significantly improved, indicating a robust financial position Condensed Consolidated Statement of Financial Position (HK$ Thousand) | Indicator | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Total non-current assets | 210,137 | 209,602 | 0.25% | | Total current assets | 261,698 | 227,382 | 15.10% | | Total current liabilities | 10,592 | 10,572 | 0.19% | | Net current assets | 251,106 | 216,810 | 15.82% | | Total assets less current liabilities | 461,243 | 426,412 | 8.17% | | Total non-current liabilities | 32,736 | 29,565 | 10.72% | | Net assets | 428,507 | 396,847 | 8.00% | | Share capital | 6,192 | 52,403 | -88.20% | | Reserves | 422,317 | 344,446 | 22.61% | | Total equity | 428,507 | 396,847 | 8.00% | [Notes to the Condensed Consolidated Financial Statements](index=5&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) [Basis of Preparation and Principal Accounting Policies](index=5&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, and the first-time application of HKAS 21 amendments had no significant impact on financial position or performance - The condensed consolidated financial statements are prepared in accordance with Hong Kong Accounting Standard 34 and Appendix D2 of the Listing Rules, presented in Hong Kong dollars, and rounded to the nearest thousand[6](index=6&type=chunk) - The financial statements are primarily prepared on a historical cost basis, except for certain financial instruments measured at fair value[7](index=7&type=chunk) - The first-time application of HKAS 21 amendments "Lack of Exchangeability" had no significant impact on the financial position and performance for the current and prior periods[8](index=8&type=chunk) [Revenue Analysis](index=6&type=section&id=Revenue%20Analysis) The Group's revenue primarily derives from oil exploration and production, solar energy, money lending, and investment securities businesses, with total revenue of HK$38,158 thousand in H1 2025, where oil sales net of royalties contributed the most and solar sales revenue grew significantly - The Group's revenue sources include oil exploration and production, solar energy, money lending, and investment securities businesses[9](index=9&type=chunk) Revenue by Source (HK$ Thousand) | Revenue Source | H1 2025 (HK$ Thousand) | H1 2024 (HK$ Thousand) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Sales of oil, net of royalties | 33,458 | 32,605 | 2.62% | | Sales of electricity | 4,343 | 3,759 | 15.54% | | Interest income from money lending business | 315 | 477 | -33.96% | | Interest income from debt instruments (FVOCI) | 42 | – | N/A | | **Total Revenue** | **38,158** | **36,841** | **3.57%** | - Revenue from oil sales is recognized when control of the crude oil is transferred to the customer, and revenue from electricity sales is recognized when electricity is received and purchased by the power company[10](index=10&type=chunk)[11](index=11&type=chunk) [Segment Information](index=7&type=section&id=Segment%20Information) The Group's operations are categorized into four segments: oil exploration and production, solar energy, money lending, and investment securities, with H1 2025 segment results showing growth in oil and solar businesses, while money lending and investment securities recorded losses - The Group's operating segments include oil exploration and production, solar energy, money lending, and investment securities[13](index=13&type=chunk)[15](index=15&type=chunk) H1 2025 Segment Revenue and Results (HK$ Thousand) | Segment | External Sales/Source | Segment Results before Impairment Allowance | Impairment Allowance | Segment Results | | :--- | :--- | :--- | :--- | :--- | | Oil Exploration and Production | 33,458 | 7,990 | – | 7,990 | | Solar Energy | 4,343 | 1,634 | – | 1,634 | | Money Lending | 315 | 318 | (527) | (209) | | Investment Securities | 42 | 23 | (308) | (285) | | **Total** | **38,158** | **9,965** | **(835)** | **9,130** | H1 2024 Segment Revenue and Results (HK$ Thousand) | Segment | External Sales/Source | Segment Results before Impairment Allowance | Impairment Allowance | Segment Results | | :--- | :--- | :--- | :--- | :--- | | Oil Exploration and Production | 32,605 | 7,182 | – | 7,182 | | Solar Energy | 3,759 | 998 | – | 998 | | Money Lending | 477 | 381 | (395) | (14) | | Investment Securities | – | (182) | (350) | (532) | | **Total** | **36,841** | **8,379** | **(745)** | **7,634** | [Other Income and Losses, Net](index=8&type=section&id=Other%20Income%20and%20Losses%2C%20Net) Other income and losses, net, significantly increased to HK$11,488 thousand in H1 2025, primarily driven by exchange gains of HK$8,136 thousand, contrasting with exchange losses in the prior period Other Income and Losses, Net (HK$ Thousand) | Item | H1 2025 (HK$ Thousand) | H1 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Bank and other interest income | 3,232 | 3,610 | | Exchange gains (losses), net | 8,136 | (3,753) | | Others | 120 | 167 | | **Total** | **11,488** | **24** | [Net Loss on Financial Assets at Fair Value Through Profit or Loss (FVTPL)](index=9&type=section&id=Net%20Loss%20on%20Financial%20Assets%20at%20Fair%20Value%20Through%20Profit%20or%20Loss%20(FVTPL)) Net loss on financial assets at FVTPL for H1 2025 was HK$3 thousand, a significant reduction from HK$181 thousand in the prior period, mainly due to unrealized gains offsetting realized losses Net Loss on Financial Assets at FVTPL (HK$ Thousand) | Item | H1 2025 (HK$ Thousand) | H1 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Realized losses | (25) | – | | Unrealized gains (losses) | 22 | (181) | | **Net Loss** | **(3)** | **(181)** | [Finance Costs](index=9&type=section&id=Finance%20Costs) Finance costs for H1 2025 were HK$853 thousand, a decrease from the prior period, primarily due to reduced expenses from the increase in decommissioning obligations Finance Costs (HK$ Thousand) | Item | H1 2025 (HK$ Thousand) | H1 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Increase in decommissioning obligations expense | 772 | 967 | | Interest on lease liabilities | 81 | 72 | | **Total** | **853** | **1,039** | [Income Tax Expense](index=9&type=section&id=Income%20Tax%20Expense) Income tax expense increased to HK$1,495 thousand in H1 2025, mainly due to a HK$1,101 thousand increase in deferred tax, with the Group applying different tax policies in Hong Kong and Canada Income Tax Expense (HK$ Thousand) | Item | H1 2025 (HK$ Thousand) | H1 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Current tax - Canadian withholding tax | 394 | 412 | | Deferred tax | 1,101 | – | | **Total** | **1,495** | **412** | - Hong Kong profits tax adopts a two-tiered system, with a tax rate of **8.25%** for the first HK$2 million of assessable profits and **16.5%** for the remainder[18](index=18&type=chunk) - Canadian subsidiary corporate tax rate is **23%** (15% federal, 8% provincial), with withholding tax rates of **10%** for interest income and **5%** for distributable profits[19](index=19&type=chunk)[20](index=20&type=chunk) [Profit for the Period](index=10&type=section&id=Profit%20for%20the%20Period) Profit for the period in H1 2025 was HK$11,117 thousand, primarily influenced by factors such as staff costs, depreciation, and professional and consulting fees Profit for the Period (HK$ Thousand) | Item | H1 2025 (HK$ Thousand) | H1 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Total staff costs | 6,661 | 6,393 | | Total depreciation | 13,646 | 13,989 | | Professional and consulting fees | 2,683 | 1,934 | [Dividends](index=10&type=section&id=Dividends) For the six months ended June 30, 2025, the company neither paid, declared, nor proposed any dividends - For the six months ended June 30, 2025, the company neither paid, declared, nor proposed any interim dividends[22](index=22&type=chunk)[33](index=33&type=chunk) [Earnings Per Share](index=11&type=section&id=Earnings%20Per%20Share) Basic earnings per share for H1 2025 were 1.86 HK cents, a significant increase from 0.20 HK cents (restated) in the prior period, mainly due to increased profit and adjustments to weighted average ordinary shares from share consolidation Earnings Per Share | Indicator | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Profit for the period attributable to owners of the Company (HK$ Thousand) | 11,117 | 1,034 | | Weighted average number of ordinary shares (thousand shares) | 597,151 | 524,034 (restated) | | **Basic Earnings Per Share (HK cents)** | **1.86** | **0.20** | - The weighted average number of ordinary shares for earnings per share has been adjusted for the new share placement completed on February 12, 2025, and the share consolidation effective April 1, 2025[26](index=26&type=chunk) [Property, Plant and Equipment and Right-of-use Assets](index=11&type=section&id=Property%2C%20Plant%20and%20Equipment%20and%20Right-of-use%20Assets) In H1 2025, the Group added HK$1,867 thousand in construction in progress related to oil and gas assets and recognized HK$2,214 thousand in right-of-use assets from new lease agreements - In H1 2025, new construction in progress related to oil and gas assets amounted to **HK$1,867 thousand** and other office equipment to **HK$9 thousand**[24](index=24&type=chunk) - A new two-year lease agreement was entered into, recognizing right-of-use assets and lease liabilities of **HK$2,214 thousand** each[24](index=24&type=chunk) [Deposits and Prepayments, Trade and Other Receivables](index=12&type=section&id=Deposits%20and%20Prepayments%2C%20Trade%20and%20Other%20Receivables) As of June 30, 2025, trade and other receivables and prepayments increased to HK$22,429 thousand, primarily due to higher deposits and prepayments, with all trade receivables aged within 60 days and neither overdue nor impaired Deposits and Prepayments, Trade and Other Receivables (HK$ Thousand) | Item | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Deposits paid for decommissioning obligations | 9,253 | 8,540 | | Trade receivables | 7,308 | 8,999 | | Deposits and prepayments | 12,822 | 3,397 | | Others | 2,299 | 1,017 | | **Total** | **22,429** | **13,413** | - Trade receivables of **HK$7,308 thousand** are all aged within 60 days, neither overdue nor impaired[28](index=28&type=chunk) [Debt Instruments at Fair Value Through Other Comprehensive Income (FVOCI)](index=13&type=section&id=Debt%20Instruments%20at%20Fair%20Value%20Through%20Other%20Comprehensive%20Income%20(FVOCI)) As of June 30, 2025, the portfolio value of debt instruments at FVOCI was HK$3,039 thousand, with an expected credit loss provision of HK$308 thousand recognized Debt Instruments at FVOCI (HK$ Thousand) | Item | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Listed debt securities (FVOCI) | 3,039 | 3,347 | - An expected credit loss provision of **HK$308 thousand** was recognized in H1 2025 (H1 2024: HK$350 thousand)[29](index=29&type=chunk) [Loans and Interest Receivables](index=13&type=section&id=Loans%20and%20Interest%20Receivables) As of June 30, 2025, net loans and interest receivables increased to HK$18,528 thousand, with an expected credit loss provision of HK$13,819 thousand recognized Loans and Interest Receivables (HK$ Thousand) | Item | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Fixed-rate loans receivable | 32,323 | 28,500 | | Interest receivable | 24 | 8 | | Less: Impairment allowance | (13,819) | (13,292) | | **Net Amount** | **18,528** | **15,216** | - An expected credit loss provision of **HK$527 thousand** for loans and interest receivables was recognized in profit or loss in H1 2025 (H1 2024: HK$395 thousand)[30](index=30&type=chunk) [Financial Assets at FVTPL (Note 16)](index=14&type=section&id=Financial%20Assets%20at%20FVTPL%20(Note%2016)) As of June 30, 2025, the portfolio value of financial assets at FVTPL was HK$1,518 thousand, primarily consisting of Hong Kong-listed equity securities Financial Assets at FVTPL (HK$ Thousand) | Item | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Hong Kong-listed equity securities | 1,518 | 1,999 | [Other Payables (Note 17)](index=14&type=section&id=Other%20Payables%20(Note%2017)) As of June 30, 2025, total other payables were HK$6,655 thousand, a decrease from year-end 2024, primarily comprising payables for property, plant, and equipment additions and operating expenses Other Payables (HK$ Thousand) | Item | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Accrued professional fees | 293 | 411 | | Payables for additions to property, plant and equipment | 1,813 | – | | Other payables and accrued expenses | 4,549 | 7,781 | | **Total** | **6,655** | **8,192** | - Payables for additions to property, plant and equipment of **HK$1,813 thousand** are related to new oil and gas assets, with a credit period of 60 days[31](index=31&type=chunk) [Share Capital](index=15&type=section&id=Share%20Capital) As of June 30, 2025, the company's share capital was HK$6,192 thousand, with significant changes in issued ordinary shares due to new share placement, share consolidation, and capital reduction Share Capital | Item | Number of Ordinary Shares (thousand shares) | Share Capital (HK$ Thousand) | | :--- | :--- | :--- | | January 1, 2024 | 5,240,344 | 52,403 | | New shares issued under placement | 952,095 | 9,521 | | Share consolidation | (5,573,195) | – | | Capital reduction | – | (55,732) | | **June 30, 2025** | **619,244** | **6,192** | - A new share placement was completed on February 12, 2025, issuing **952,095 thousand shares** with net proceeds of **HK$15,753 thousand**[32](index=32&type=chunk) - A capital reorganization became effective on April 1, 2025, involving a **10-to-1 share consolidation** and a reduction of par value per share from HK$0.10 to HK$0.01, with **HK$55,732 thousand** from share capital transferred to the contributed surplus reserve[32](index=32&type=chunk) [Management Discussion and Analysis](index=16&type=section&id=Management%20Discussion%20and%20Analysis) [Business Review](index=16&type=section&id=Business%20Review) In H1 2025, the Group continued its primary businesses in oil exploration and production, solar energy, money lending, and investment securities, with total revenue growing 4% to HK$38,158 thousand and profit attributable to owners significantly increasing to HK$11,117 thousand, mainly due to exchange gains and higher income tax expense - The Group's main businesses include oil exploration and production, solar energy, money lending, and investment securities[34](index=34&type=chunk) - Total revenue for H1 2025 increased by **4%** to **HK$38,158 thousand**, and profit attributable to owners of the Company significantly increased to **HK$11,117 thousand**[37](index=37&type=chunk) - The increase in profit was mainly due to exchange gains of **HK$8,136 thousand** from the appreciation of Canadian dollars and New Zealand dollars against Hong Kong dollars (compared to a loss of HK$3,753 thousand in the prior period)[37](index=37&type=chunk) - Income tax expense increased to **HK$1,495 thousand**, primarily related to the oil exploration and production business[37](index=37&type=chunk) - Earnings per share significantly improved to **1.86 HK cents** from **0.20 HK cents** (restated) in the prior period[37](index=37&type=chunk) [Oil Exploration and Production](index=16&type=section&id=Oil%20Exploration%20and%20Production) The Group's oil exploration and production business in the Windy Lake area of Alberta, Canada, continues to develop, with H1 2025 revenue growing to HK$33,458 thousand and operating profit increasing to HK$7,990 thousand, alongside plans to expand new wells through participation and operating agreements - The Group continues to develop its oilfield business in the Windy Lake area of Alberta, Canada[35](index=35&type=chunk)[38](index=38&type=chunk) Oil Exploration and Production Performance (HK$ Thousand) | Indicator | H1 2025 (HK$ Thousand) | H1 2024 (HK$ Thousand) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 33,458 | 32,605 | 2.62% | | EBITDA | 19,215 | 18,865 | 1.86% | | Operating Profit | 7,990 | 7,182 | 11.25% | Oil Production and Sales | Indicator | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Crude oil production (barrels) | 84,500 | 76,600 | | Crude oil sales volume (barrels) | 84,500 | 75,800 | | Average selling price (CAD/barrel) | 79.7 | 86.1 | - The Group entered into a participation and operating agreement with BRW Petroleum Corp. to acquire interests in oil wells, with drilling operations commencing in July 2025[39](index=39&type=chunk) [Solar Energy](index=16&type=section&id=Solar%20Energy) The Group's solar energy business continues to grow, with H1 2025 revenue increasing 16% to HK$4,343 thousand, primarily due to increased sunshine hours, and the Group has invested HK$58,265 thousand in 50 operational solar photovoltaic systems - The Group diversifies its energy business by investing in renewable energy assets, including solar projects[36](index=36&type=chunk)[40](index=40&type=chunk) Solar Energy Performance (HK$ Thousand) | Indicator | H1 2025 (HK$ Thousand) | H1 2024 (HK$ Thousand) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 4,343 | 3,759 | 15.54% | | EBITDA | 4,271 | 3,638 | 17.41% | | Operating Profit | 1,634 | 998 | 63.73% | - Revenue growth was primarily due to a **29% increase** in sunshine hours reported by the Hong Kong Observatory, from approximately 700 hours in H1 2024 to approximately 900 hours[41](index=41&type=chunk) - As of June 30, 2025, the Group owned **50 operational solar photovoltaic systems** with a total investment of **HK$58,265 thousand** and a total grid-connected generation capacity of approximately **3,200 kW**[36](index=36&type=chunk)[41](index=41&type=chunk) [Money Lending Business](index=18&type=section&id=Money%20Lending%20Business) The Group's money lending business saw H1 2025 revenue decline 34% to HK$315 thousand and operating profit (before impairment allowance) decrease 17% to HK$318 thousand, mainly due to lower average performing loan amounts, with an expected credit loss provision of HK$527 thousand recognized due to reduced Hong Kong property market values, and the Group expanded its money lending business into New Zealand, increasing its loan portfolio by 22% to HK$18,528 thousand Money Lending Business Performance (HK$ Thousand) | Indicator | H1 2025 (HK$ Thousand) | H1 2024 (HK$ Thousand) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 315 | 477 | -33.96% | | Operating Profit (before impairment allowance) | 318 | 381 | -16.54% | | Expected Credit Loss Provision | 527 | 395 | 33.42% | - The decrease in revenue and operating profit was primarily due to lower average performing loan amounts granted to borrowers in H1 2025[42](index=42&type=chunk) - An expected credit loss provision of **HK$527 thousand** was recognized, mainly due to a decrease in the market value of Hong Kong properties pledged by borrowers to the Group[42](index=42&type=chunk) - The Group commenced its money lending business in New Zealand in June 2025, increasing its loan portfolio size by **22%** to **HK$18,528 thousand** (net of impairment allowance)[42](index=42&type=chunk)[43](index=43&type=chunk) [Investment Securities Business](index=19&type=section&id=Investment%20Securities%20Business) The Group's investment securities business recorded revenue of HK$42 thousand and a loss (after impairment allowance) of HK$285 thousand in H1 2025, with its portfolio comprising Hong Kong-listed equity securities and Singapore-listed debt securities - The Group's securities investments include Hong Kong-listed equity securities and Singapore-listed debt securities[44](index=44&type=chunk)[45](index=45&type=chunk) Investment Securities Business Performance (HK$ Thousand) | Indicator | H1 2025 (HK$ Thousand) | H1 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Revenue | 42 | – | | Loss (after impairment allowance) | (285) | (532) | [Financial Assets at FVTPL (Investment Securities)](index=19&type=section&id=Financial%20Assets%20at%20FVTPL%20(Investment%20Securities)) As of June 30, 2025, the portfolio value was HK$1,518 thousand, with a net loss of HK$3 thousand recorded in H1 2025, a significant reduction from the prior period, mainly due to unrealized gains offsetting realized losses Financial Assets at FVTPL Portfolio Value (HK$ Thousand) | Indicator | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Portfolio Value | 1,518 | 1,999 | Financial Assets at FVTPL Net Loss (HK$ Thousand) | Indicator | H1 2025 (HK$ Thousand) | H1 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Net Loss | (3) | (181) | | Realized losses | (25) | – | | Unrealized gains (losses) | 22 | (181) | - The Group adopted a prudent management approach, making no new investments during the period, and the portfolio includes equity securities of a property company listed on the Hong Kong Stock Exchange[47](index=47&type=chunk) [Debt Instruments at FVOCI (Investment Securities)](index=20&type=section&id=Debt%20Instruments%20at%20FVOCI%20(Investment%20Securities)) As of June 30, 2025, the portfolio value was HK$3,039 thousand, generating HK$42 thousand in interest income in H1 2025, with a fair value loss of HK$308 thousand and an expected credit loss provision of HK$308 thousand recognized, primarily due to market value decline and increased credit risk Debt Instruments at FVOCI Portfolio Value (HK$ Thousand) | Indicator | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Portfolio Value | 3,039 | 3,347 | - Interest income of **HK$42 thousand** was generated in H1 2025[48](index=48&type=chunk) - A fair value loss of **HK$308 thousand** was recognized (H1 2024: HK$350 thousand), mainly due to the decline in market value of debt securities and increased credit risk[48](index=48&type=chunk) - An expected credit loss provision of **HK$308 thousand** was recognized (H1 2024: HK$350 thousand) due to further increased credit risk of the held debt instruments (Mainland property company bonds)[49](index=49&type=chunk) [Overall Results](index=21&type=section&id=Overall%20Results) In H1 2025, oil exploration and production and solar energy businesses contributed profits, while money lending and investment securities recorded losses, with the Group reporting profit attributable to owners of HK$11,117 thousand and total comprehensive income of HK$15,907 thousand, primarily influenced by exchange gains H1 2025 Profit/Loss by Business Segment (HK$ Thousand) | Business Segment | H1 2025 Profit/Loss (HK$ Thousand) | H1 2024 Profit/Loss (HK$ Thousand) | | :--- | :--- | :--- | | Oil Exploration and Production | 7,990 (Profit) | 7,182 (Profit) | | Solar Energy | 1,634 (Profit) | 998 (Profit) | | Money Lending | (209) (Loss) | (14) (Loss) | | Investment Securities | (285) (Loss) | (532) (Loss) | Overall Financial Performance (HK$ Thousand) | Indicator | H1 2025 (HK$ Thousand) | H1 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Profit attributable to owners of the Company | 11,117 | 1,034 | | Total comprehensive income (expense) attributable to owners of the Company | 15,907 | (1,389) | | Exchange gains (losses) | 4,790 | (2,423) | [Financial Review](index=21&type=section&id=Financial%20Review) The Group funds its operations through business activities and shareholder capital, with H1 2025 showing increases in both current and quick assets, a high current ratio of 24.7, and a low gearing ratio of 9%, indicating a very robust financial position - The Group primarily finances its operations through cash generated from business activities and shareholder funds[55](index=55&type=chunk) [Liquidity, Financial Resources and Capital Structure](index=21&type=section&id=Liquidity%2C%20Financial%20Resources%20and%20Capital%20Structure) In H1 2025, the Group raised HK$15,753 thousand net from a new share placement for new well drilling, general working capital, and New Zealand money lending, while a capital reorganization (share consolidation and capital reduction) effective April 2025 reduced share capital from HK$61,924 thousand to HK$6,192 thousand, resulting in strong liquidity with a current ratio of approximately 24.7 and a gearing ratio of approximately 9% - A new share placement completed on February 12, 2025, generated net proceeds of **HK$15,753 thousand**, intended for drilling Canadian oil assets, general working capital, and investment opportunities[52](index=52&type=chunk) - The placement proceeds have been partially utilized for new well drilling, general working capital, and the New Zealand money lending business, with plans for land interest acquisition in the oil exploration and production business[53](index=53&type=chunk) - A capital reorganization became effective on April 1, 2025, involving a **10-to-1 share consolidation** and a reduction of par value per share from HK$0.10 to HK$0.01, with **HK$55,732 thousand** from share capital transferred to the contributed surplus reserve[54](index=54&type=chunk) Liquidity and Capital Structure (HK$ Thousand) | Indicator | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Current assets | 261,698 | 227,382 | | Quick assets | 217,391 | 195,314 | | Current liabilities | 10,592 | 10,572 | | Current ratio | 24.7 | 21.5 | | Total assets | 471,835 | 436,984 | | Total liabilities | 43,328 | 40,137 | | Gearing ratio | 9% | 9% | - Bank and other interest income decreased by **10%** to **HK$3,232 thousand**, mainly due to a general decline in fixed deposit interest rates[56](index=56&type=chunk) - Equity attributable to owners of the Company increased by **HK$31,660 thousand** to **HK$428,509 thousand**, primarily due to the combined effect of profit, exchange gains, and net proceeds from the placement[56](index=56&type=chunk) [Outlook](index=23&type=section&id=Outlook) The Group's business strategy is to continue developing oil exploration and production and diversify into renewable energy projects to create sustainable value, anticipating long-term stable income from Canadian oil operations and Hong Kong's solar 'Feed-in Tariff' scheme, while managing business conservatively and prudently amidst international oil price volatility and other uncertainties - The Group's strategy is to develop its oil exploration and production business and diversify into renewable energy projects to achieve sustainable business development and shareholder value creation[57](index=57&type=chunk)[58](index=58&type=chunk) - The Canadian oil assets are located in a politically stable region with mature oil regulations, offering significant business opportunities[57](index=57&type=chunk) - The solar energy business benefits from the Hong Kong government's "Feed-in Tariff Scheme," which can provide long-term stable income until the end of 2033[57](index=57&type=chunk) - Facing uncertainties such as international oil price fluctuations, the Group will manage its business in a conservative and prudent manner[59](index=59&type=chunk) [Corporate Governance](index=24&type=section&id=Corporate%20Governance) [Compliance with Corporate Governance Code](index=24&type=section&id=Compliance%20with%20Corporate%20Governance%20Code) For the six months ended June 30, 2025, the company complied with all applicable provisions of the Corporate Governance Code in Appendix C1 of the Listing Rules, with deviations noted for the vacant Chairman and Chief Executive Officer positions and the appointment of an executive director as Chairman of the AGM - The company has complied with all applicable provisions of the Corporate Governance Code set out in Appendix C1 of the Listing Rules, with two deviations[60](index=60&type=chunk) [Chairman and Chief Executive Officer](index=24&type=section&id=Chairman%20and%20Chief%20Executive%20Officer) The Group deviates from Corporate Governance Code provision C.2.1 due to vacant Chairman and Chief Executive Officer positions, with daily management responsibilities shared by executive directors, overall direction determined by the Board, and independent non-executive directors providing independent perspectives to ensure power balance - There is a deviation from Code Provision C.2.1 due to the vacant positions of Chairman and Chief Executive Officer[60](index=60&type=chunk)[61](index=61&type=chunk) - Daily management responsibilities are shared by executive directors, overall direction is determined by the Board, and three independent non-executive directors provide independent perspectives to ensure a balance of power[61](index=61&type=chunk) [Shareholders' Meeting](index=24&type=section&id=Shareholders'%20Meeting) The Group deviates from Corporate Governance Code provision F.2.2 due to the vacant Chairman position, with Executive Director Mr. Chan Shui Yuen serving as Chairman of the Annual General Meeting on June 27, 2025 - There is a deviation from Code Provision F.2.2 because the Chairman position is vacant, and Executive Director Mr. Chan Shui Yuen served as the Chairman of the Annual General Meeting on June 27, 2025[62](index=62&type=chunk)[63](index=63&type=chunk) [Audit Committee](index=25&type=section&id=Audit%20Committee) The condensed consolidated financial statements for the six months ended June 30, 2025, were not reviewed but have been reviewed by the Audit Committee and approved by the Board - The condensed consolidated financial statements were not reviewed but have been reviewed by the Audit Committee and approved by the Board[64](index=64&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=25&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company's%20Listed%20Securities) For the six months ended June 30, 2025, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities - For the six months ended June 30, 2025, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities[65](index=65&type=chunk)

[Company Information and Financial Highlights](index=1&type=section&id=%E5%85%AC%E5%8F%B8%E4%BF%A1%E6%81%AF%E4%B8%8E%E8%B4%A2%E5%8A%A1%E6%91%98%E8%A6%81) [Company Overview](index=1&type=section&id=1.1%20%E5%85%AC%E5%8F%B8%E6%A6%82%E5%86%B5) Kafelaku Coffee Holding Limited, an investment holding company incorporated in the Cayman Islands and listed on the Main Board, primarily engages in food and beverage services in Hong Kong and China - The company is incorporated in the Cayman Islands and its shares are listed on the Main Board of the Stock Exchange[2](index=2&type=chunk)[7](index=7&type=chunk) - The Group primarily engages in food and beverage services in Hong Kong and China[7](index=7&type=chunk) [Financial Highlights](index=1&type=section&id=1.2%20%E8%B4%A2%E5%8A%A1%E6%91%98%E8%A6%81) The Group's revenue for the six months ended June 30, 2025, decreased by **13.7%** to **HKD 64.3 million**, with a **HKD 11.6 million** loss and **0.82 HK cents** loss per share Financial Highlights for the Six Months Ended June 30, 2025 | Metric | 2025 (HKD '000) | 2024 (HKD '000) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 64,300 | 74,500 | -13.7% | | Loss Attributable to Owners of the Company | (11,600) | (13,900) | -16.6% | | Loss Per Share (HK cents) | (0.82) | (1.23) | -33.3% | [Condensed Consolidated Financial Statements](index=2&type=section&id=%E7%AE%80%E6%98%8E%E7%BB%BC%E5%90%88%E8%B4%A2%E5%8A%A1%E6%8A%A5%E8%A1%A8) [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=2&type=section&id=2.1%20%E7%AE%80%E6%98%8E%E7%BB%BC%E5%90%88%E6%8D%9F%E7%9B%8A%E5%8F%8A%E5%85%B6%E4%BB%96%E5%85%A8%E9%9D%A2%E6%94%B6%E7%9B%8A%E8%A1%A8) The Group's revenue decreased to **HKD 64,285 thousand**, while the loss for the period narrowed to **HKD 11,624 thousand**, resulting in **0.82 HK cents** basic and diluted loss per share Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (For the Six Months Ended June 30) | Metric | 2025 (HKD '000) | 2024 (HKD '000) | | :--- | :--- | :--- | | Revenue | 64,285 | 74,514 | | Other income | 530 | 279 | | Cost of materials consumed | (25,979) | (31,395) | | Employee benefit expenses | (25,445) | (25,118) | | Depreciation | (9,803) | (10,561) | | Other operating expenses | (12,955) | (18,367) | | Finance costs | (2,024) | (2,924) | | Loss before tax | (11,375) | (13,857) | | Income tax expense | (249) | (40) | | Loss for the period | (11,624) | (13,897) | | Loss Attributable to Owners of the Company | (11,624) | (13,897) | | Basic and Diluted Loss Per Share (HK cents) | (0.82) | (1.23) | [Condensed Consolidated Statement of Financial Position](index=3&type=section&id=2.2%20%E7%AE%80%E6%98%8E%E7%BB%BC%E5%90%88%E8%B4%A2%E5%8A%A1%E7%8A%B6%E5%86%B5%E8%A1%A8) As of June 30, 2025, total assets were **HKD 86,629 thousand**, total liabilities increased to **HKD 158,711 thousand**, and the deficit attributable to owners of the company expanded to **HKD 72,082 thousand** Condensed Consolidated Statement of Financial Position (As at June 30, 2025) | Metric | June 30, 2025 (HKD '000) | December 31, 2024 (HKD '000) | | :--- | :--- | :--- | | **Assets** | | | | Non-current assets | 51,640 | 47,921 | | Current assets | 34,989 | 39,703 | | **Total Assets** | **86,629** | **87,624** | | **Equity** | | | | Equity Attributable to Owners of the Company | (67,166) | (59,636) | | Non-controlling interests | (4,916) | (4,782) | | **Total Deficit** | **(72,082)** | **(64,418)** | | **Liabilities** | | | | Current liabilities | 125,243 | 114,304 | | Non-current liabilities | 33,468 | 37,738 | | **Total Liabilities** | **158,711** | **152,042** | | **Total Deficit and Liabilities** | **86,629** | **87,624** | | Net current liabilities | (90,254) | (74,601) | [Notes to the Condensed Consolidated Financial Statements](index=5&type=section&id=%E7%AE%80%E6%98%8E%E7%BB%BC%E5%90%88%E8%B4%A2%E5%8A%A1%E6%8A%A5%E8%A1%A8%E9%99%84%E6%B3%A8) [General Information](index=5&type=section&id=3.1%20%E4%B8%80%E8%88%AC%E8%B5%84%E6%96%99) The Company, an exempted company incorporated in the Cayman Islands, primarily provides food and beverage services in Hong Kong and China, with financial statements presented in HKD - The Company is incorporated in the Cayman Islands and primarily engages in food and beverage services in Hong Kong and China[7](index=7&type=chunk) - The unaudited condensed consolidated financial statements are presented in Hong Kong Dollars[8](index=8&type=chunk) [Basis of Preparation and Going Concern](index=5&type=section&id=3.2%20%E7%BC%96%E5%88%B6%E5%9F%BA%E5%87%86%E4%B8%8E%E6%8C%81%E7%BB%AD%E7%BB%8F%E8%90%A5) The Group's net loss of **HKD 11.6 million** and net current liabilities of **HKD 90.3 million** indicate significant going concern uncertainties, which management addresses through financial support, loan financing, fundraising, strategic expansion, and cost control - The Group incurred a net loss of **HKD 11,624,000**, net current liabilities of **HKD 90,254,000**, and net liabilities of **HKD 72,082,000** for the period, indicating significant going concern uncertainties[9](index=9&type=chunk)[10](index=10&type=chunk) - Directors have considered plans to address liquidity issues, including ongoing financial support from an executive director, a **RMB 96 million** loan facility with an associated company, seeking external financing, planned fundraising activities, strategic expansion of franchised coffee shops, and cost control measures[11](index=11&type=chunk)[12](index=12&type=chunk)[17](index=17&type=chunk) [Application of Hong Kong Financial Reporting Standards](index=6&type=section&id=3.3%20%E5%BA%94%E7%94%A8%E9%A6%99%E6%B8%AF%E8%B4%A2%E5%8A%A1%E6%8A%A5%E5%91%8A%E5%87%86%E5%88%99) The initial application of revised Hong Kong Financial Reporting Standards during the period had no material impact on the Group's financial position or performance - The application of revised Hong Kong Financial Reporting Standards during the interim period had no material impact on the Group's financial position and performance[14](index=14&type=chunk)[15](index=15&type=chunk) [Segment Information](index=6&type=section&id=3.4%20%E5%88%86%E9%83%A8%E8%B5%84%E6%96%99) The Group reorganized its internal reporting into two segments: catering and beverage, with catering revenue at **HKD 61,890 thousand** and beverage revenue at **HKD 2,395 thousand**, while China contributed **HKD 55,337 thousand** and Hong Kong **HKD 8,948 thousand** in revenue - The Group has reorganized its internal reporting structure, with primary operating segments being catering (restaurant business) and beverage (coffee business)[16](index=16&type=chunk)[20](index=20&type=chunk) Segment Revenue and Results (For the Six Months Ended June 30) | Segment | 2025 Revenue (HKD '000) | 2025 Segment Results (HKD '000) | 2024 Revenue (HKD '000) | 2024 Segment Results (HKD '000) | | :--- | :--- | :--- | :--- | :--- | | Catering | 61,890 | (3,091) | 74,514 | (9,002) | | Beverage | 2,395 | (2,872) | – | – | | **Total** | **64,285** | **(5,963)** | **74,514** | **(9,002)** | | Unallocated expenses | | (5,412) | | (4,855) | | Loss before tax | | (11,375) | | (13,857) | Revenue from External Customers by Geographical Location (For the Six Months Ended June 30) | Region | 2025 (HKD '000) | 2024 (HKD '000) | | :--- | :--- | :--- | | Hong Kong | 8,948 | 10,424 | | China | 55,337 | 64,090 | | **Total** | **64,285** | **74,514** | Revenue Type and Recognition Timing (For the Six Months Ended June 30) | Revenue Type | 2025 (HKD '000) | 2024 (HKD '000) | | :--- | :--- | :--- | | Restaurant business revenue | 61,890 | 74,514 | | Sales of goods and equipment revenue | 2,293 | – | | Royalty and franchise fee revenue | 102 | – | | **Total** | **64,285** | **74,514** | | **Timing of Recognition** | | | | At a point in time | 64,183 | 74,514 | | Over a period of time | 102 | – | | **Total** | **64,285** | **74,514** | [Other Income](index=9&type=section&id=3.5%20%E5%85%B6%E4%BB%96%E6%94%B6%E5%85%A5) Other income increased to **HKD 530 thousand** for the period, primarily due to **HKD 211 thousand** in interest income from an associated company, which was absent in the prior period Other Income (For the Six Months Ended June 30) | Income Source | 2025 (HKD '000) | 2024 (HKD '000) | | :--- | :--- | :--- | | Interest income from short-term bank deposits | 3 | 27 | | Interest income from amounts due from an associated company | 211 | – | | Government grants and subsidies | – | 77 | | Miscellaneous income | 316 | 175 | | **Total** | **530** | **279** | [Depreciation and Other Operating Expenses](index=9&type=section&id=3.6%20%E6%8A%98%E6%97%A7%E5%8F%8A%E5%85%B6%E4%BB%96%E8%90%A5%E8%BF%90%E5%BC%80%E6%94%AF) Total depreciation for the period was **HKD 9,803 thousand**, a decrease from the prior period, while other operating expenses significantly dropped by **29.3%** to **HKD 12,955 thousand** due to cost control and absence of litigation fines Depreciation (For the Six Months Ended June 30) | Depreciation Type | 2025 (HKD '000) | 2024 (HKD '000) | | :--- | :--- | :--- | | Property, plant and equipment | 2,904 | 3,490 | | Right-of-use assets | 6,899 | 7,071 | | **Total** | **9,803** | **10,561** | Other Operating Expenses (For the Six Months Ended June 30) | Expense Item | 2025 (HKD '000) | 2024 (HKD '000) | | :--- | :--- | :--- | | Auditor's remuneration | 500 | 500 | | Operating lease payments for properties | 119 | 203 | | Lease payments not included in the measurement of lease liabilities | – | 441 | | Building management fees and air-conditioning charges | 3,129 | 3,298 | | Advertising and promotion expenses | 574 | 675 | | Laundry and hygiene expenses | 1,176 | 1,418 | | Legal and professional fees | 364 | 931 | | Repair and maintenance expenses | 388 | 547 | | Utilities expenses | 1,724 | 2,053 | | Fines and related interest in connection with litigation | – | 2,446 | | **Total** | **12,955** | **18,367** | - Other operating expenses decreased by **29.3%**, primarily due to cost control, the absence of share-based compensation costs after share award vesting (prior period: **HKD 3.8 million**), no litigation fines and related interest (prior period: **HKD 2.4 million**), and reduced employee benefits linked to lower revenue[46](index=46&type=chunk) [Finance Costs](index=10&type=section&id=3.7%20%E8%B4%A2%E5%8A%A1%E6%88%90%E6%9C%AC) Finance costs for the period decreased to **HKD 2,024 thousand** from **HKD 2,924 thousand** in the prior period, mainly due to reduced interest expenses on lease liabilities Finance Costs (For the Six Months Ended June 30) | Cost Item | 2025 (HKD '000) | 2024 (HKD '000) | | :--- | :--- | :--- | | Interest expense on convertible bonds | 30 | – | | Interest expense on lease liabilities | 1,994 | 2,924 | | **Total** | **2,024** | **2,924** | [Income Tax Expense](index=10&type=section&id=3.8%20%E6%89%80%E5%BE%97%E7%A8%8E%E5%BC%80%E6%94%AF) Income tax expense for the period was **HKD 249 thousand**, primarily corporate income tax for Chinese subsidiaries, as no taxable profits were generated in Hong Kong Income Tax Expense (For the Six Months Ended June 30) | Tax Type | 2025 (HKD '000) | 2024 (HKD '000) | | :--- | :--- | :--- | | Current tax – China | 249 | 40 | | **Total Tax for the Period** | **249** | **40** | - No Hong Kong profits tax provision was made as the Group generated no taxable profits in Hong Kong during both periods[26](index=26&type=chunk) - The tax rate for Chinese subsidiaries was **25%** in both periods[27](index=27&type=chunk) [Dividends](index=10&type=section&id=3.9%20%E8%82%A1%E6%81%AF) The Board of Directors resolved not to declare any dividends for the period - The Board of Directors resolved not to declare any dividends for the period (prior period: nil)[28](index=28&type=chunk) [Loss Per Share](index=11&type=section&id=3.10%20%E6%AF%8F%E8%82%A1%E4%BA%8F%E6%8D%9F) Basic loss per share attributable to owners of the company was **0.82 HK cents**, with diluted loss per share being identical due to the absence of potential dilutive ordinary shares in both periods Loss Per Share Calculation (For the Six Months Ended June 30) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Loss Attributable to Owners of the Company (HKD '000) | (11,624) | (13,897) | | Weighted Average Number of Ordinary Shares for Basic Loss Per Share (thousand shares) | 1,410,250 | 1,129,835 | | **Basic and Diluted Loss Per Share (HK cents)** | **(0.82)** | **(1.23)** | - Diluted loss per share is equal to basic loss per share as there were no potential dilutive ordinary shares outstanding in either period[30](index=30&type=chunk) [Property, Plant and Equipment](index=11&type=section&id=3.11%20%E7%89%A9%E4%B8%9A%E3%80%81%E5%8E%82%E6%88%BF%E5%8F%8A%E8%AE%BE%E5%A4%87) The Group did not acquire any property, plant, and equipment during the period - During the period, the Group did not acquire any property, plant and equipment (prior period: nil)[31](index=31&type=chunk) [Right-of-Use Assets](index=11&type=section&id=3.12%20%E4%BD%BF%E7%94%A8%E6%9D%83%E8%B5%84%E4%BA%A7) As of June 30, 2025, the carrying amount of right-of-use assets decreased to **HKD 17,806 thousand** from **HKD 24,055 thousand** as of December 31, 2024 Movement in Right-of-Use Assets (As at June 30) | Item | HKD '000 | | :--- | :--- | | **Cost** | | | At January 1, 2025 (audited) | 121,980 | | Exchange adjustments | 3,274 | | At June 30, 2025 (unaudited) | 125,254 | | **Accumulated Depreciation and Impairment** | | | At January 1, 2025 (audited) | 97,925 | | Charged for the period | 6,899 | | Exchange adjustments | 2,624 | | At June 30, 2025 (unaudited) | 107,448 | | **Carrying Amount** | | | At June 30, 2025 (unaudited) | 17,806 | | At December 31, 2024 (audited) | 24,055 | [Trade Receivables](index=12&type=section&id=3.13%20%E8%B4%B8%E6%98%93%E5%BA%94%E6%94%B6%E6%AC%BE%E9%A1%B9) Net trade receivables decreased to **HKD 916 thousand** as of June 30, 2025, from **HKD 1,438 thousand** as of December 31, 2024, with most receivables due within 30 days Trade Receivables (As at June 30) | Item | 2025 (HKD '000) | 2024 (HKD '000) | | :--- | :--- | :--- | | Trade receivables | 1,071 | 1,588 | | Less: Provision for expected credit losses | (155) | (150) | | **Net Amount** | **916** | **1,438** | Ageing Analysis of Trade Receivables (As at June 30) | Ageing | 2025 (HKD '000) | 2024 (HKD '000) | | :--- | :--- | :--- | | 1 to 30 days | 552 | 1,246 | | 31 to 60 days | 110 | 51 | | 61 to 90 days | 48 | 20 | | Over 90 days | 206 | 121 | | **Total** | **916** | **1,438** | [Trade Payables](index=12&type=section&id=3.14%20%E8%B4%B8%E6%98%93%E5%BA%94%E4%BB%98%E6%AC%BE%E9%A1%B9) Total trade payables slightly increased to **HKD 9,620 thousand** as of June 30, 2025, from **HKD 9,170 thousand** as of December 31, 2024, with the majority due within 30 days Ageing Analysis of Trade Payables (As at June 30) | Ageing | 2025 (HKD '000) | 2024 (HKD '000) | | :--- | :--- | :--- | | 1 to 30 days | 5,270 | 4,879 | | 31 to 60 days | – | 248 | | 61 to 90 days | 228 | 113 | | Over 90 days | 4,122 | 3,930 | | **Total** | **9,620** | **9,170** | [Business and Operations Review](index=13&type=section&id=%E4%B8%9A%E5%8A%A1%E5%8F%8A%E8%90%A5%E8%BF%90%E5%9B%9E%E9%A1%B5) [Business Overview](index=13&type=section&id=4.1%20%E4%B8%9A%E5%8A%A1%E6%A6%82%E8%A7%88) The Group primarily provides food and beverage services in Hong Kong and China, currently undergoing brand repositioning and developing its Kafelaku Coffee business, operating four Chinese restaurants and two franchised coffee shops - The Group primarily engages in food and beverage services in Hong Kong and China, undergoing brand repositioning and developing its Kafelaku Coffee business[35](index=35&type=chunk) - Operations during the period included one Chinese restaurant in Central, Hong Kong (Lei Bao Club), three Chinese restaurants in Shenzhen (Lei Garden), and two Kafelaku Coffee franchised stores in Zhejiang Province[35](index=35&type=chunk) [Market Environment and Challenges](index=13&type=section&id=4.2%20%E5%B8%82%E5%9C%BA%E7%8E%AF%E5%A2%83%E4%B8%8E%E6%8C%91%E6%88%98) Hong Kong faces economic weakness and cross-border consumption shifts, while mainland China's catering industry is impacted by economic slowdowns and a ban on alcohol for official receptions, contrasting with a rapidly growing Chinese coffee market driven by urbanization and an expanding middle class - The Hong Kong market faces challenges from economic weakness and residents' cross-border consumption, though simplified visitor procedures from the Chinese government show signs of improvement[35](index=35&type=chunk)[36](index=36&type=chunk) - The Chinese mainland's catering industry is impacted by economic slowdowns and a ban on alcohol for official receptions implemented since May 2025[36](index=36&type=chunk) - The Chinese coffee market is experiencing rapid growth, driven by accelerating urbanization and a continuously expanding middle class[37](index=37&type=chunk) [Operational Layout and Strategy](index=13&type=section&id=4.3%20%E8%90%A5%E8%BF%90%E5%B8%83%E5%B1%80%E4%B8%8E%E6%88%98%E7%95%A5) All the Group's restaurants and franchised coffee shops are strategically located in landmark shopping malls or prime areas, with restaurant expansion plans delayed due to a weak operating environment, while opportunities in the coffee business in Hong Kong and China will be explored - All the Group's restaurants and franchised coffee shops are strategically located in landmark shopping malls or prime areas, targeting mid-to-high-end customers[37](index=37&type=chunk) - The weak operating environment for restaurants has led to delayed expansion plans, but the Group will explore opportunities to develop its coffee business in Hong Kong and China[38](index=38&type=chunk) [Financial Review](index=14&type=section&id=%E8%B4%A2%E5%8A%A1%E5%9B%9E%E9%A1%B顾) [Revenue](index=14&type=section&id=5.1%20%E6%94%B6%E7%9B%8A) Total revenue for the period was approximately **HKD 64.3 million**, a **13.7%** year-on-year decrease, primarily due to economic weakness, cross-border consumption, and the alcohol ban, partially offset by **HKD 2.4 million** from the new Kafelaku Coffee business - Total revenue for the period was approximately **HKD 64.3 million**, a decrease of approximately **13.7%** from the prior period[39](index=39&type=chunk) - Revenue from the Hong Kong Central restaurant decreased by approximately **14.4%**, mainly due to residents' cross-border consumption and Group promotions[40](index=40&type=chunk) - Total revenue from the three Shenzhen restaurants in China decreased by approximately **17.5%**, primarily due to weak economic growth in China and the implementation of an alcohol ban[41](index=41&type=chunk) - The new Kafelaku Coffee chain business in China generated approximately **HKD 2.4 million** in revenue[42](index=42&type=chunk) [Gross Profit and Gross Margin](index=15&type=section&id=5.2%20%E6%AF%9B%E5%88%A9%E5%8F%8A%E6%AF%9B%E5%88%A9%E7%8E%87) Gross profit for the period was approximately **HKD 38.3 million**, an **11.1%** decrease consistent with reduced revenue, while the overall gross margin slightly increased to approximately **59.58%** due to the commencement of higher-margin beverage services - Gross profit was approximately **HKD 38.3 million**, a decrease of approximately **11.1%** from the prior period[43](index=43&type=chunk) - The overall gross margin slightly increased to approximately **59.58%** (prior period: approximately **57.9%**), attributed to the commencement of higher-margin beverage services during the period[43](index=43&type=chunk) [Employee Benefit Expenses](index=15&type=section&id=5.3%20%E9%9B%87%E5%91%98%E7%A6%8F%E5%88%A9%E5%BC%80%E6%94%AF) Employee benefit expenses for the period were approximately **HKD 25.4 million**, similar to the prior period's **HKD 25.1 million**, as increased salaries and allowances offset a reduction in staff numbers - Employee benefit expenses were approximately **HKD 25.4 million** (prior period: approximately **HKD 25.1 million**), remaining stable as increased salaries and allowances offset the impact of reduced staff numbers[44](index=44&type=chunk) [Depreciation](index=15&type=section&id=5.4%20%E6%8A%98%E6%97%A7) Depreciation related to right-of-use assets for leased properties was approximately **HKD 9.8 million** for the period, a decrease from **HKD 10.6 million** in the prior period - Depreciation related to right-of-use assets for leased properties was approximately **HKD 9.8 million** (prior period: approximately **HKD 10.6 million**)[45](index=45&type=chunk) [Other Operating Expenses](index=16&type=section&id=5.5%20%E5%85%B6%E4%BB%96%E8%90%A5%E8%BF%90%E5%BC%80%E6%94%AF) Other operating expenses for the period were approximately **HKD 13.0 million**, a **29.3%** year-on-year decrease, primarily due to cost control, the absence of litigation fines, and reduced employee benefits linked to lower revenue - Other operating expenses were approximately **HKD 13.0 million**, a decrease of approximately **29.3%** (**HKD 5.4 million**) from the prior period[46](index=46&type=chunk) - The decrease was mainly due to cost control, the absence of litigation fines and related interest (prior period: approximately **HKD 2.4 million**), and reduced employee benefits related to lower revenue[46](index=46&type=chunk) [Impairment Loss on Right-of-Use Assets](index=16&type=section&id=5.6%20%E4%BD%BF%E7%94%A8%E6%9D%83%E8%B5%84%E4%BA%A7%E5%87%8F%E5%80%BC%E4%BA%8F%E6%8D%9F) No further impairment loss on right-of-use assets was recognized during the period, compared to an impairment loss of approximately **HKD 287,000** in the prior period - No further impairment loss on right-of-use assets was recognized during the period (prior period: impairment loss of approximately **HKD 287,000**)[47](index=47&type=chunk) [Finance Costs](index=16&type=section&id=5.7%20%E8%B4%A2%E5%8A%A1%E6%88%90%E6%9C%AC) Finance costs for the period were approximately **HKD 2.0 million**, a decrease from **HKD 2.9 million** in the prior period, primarily comprising interest expenses on lease liabilities - Finance costs for the period were approximately **HKD 2.0 million** (prior period: approximately **HKD 2.9 million**), mainly consisting of interest expenses on lease liabilities[48](index=48&type=chunk) [Loss Attributable to Owners of the Company](index=16&type=section&id=5.8%20%E6%9C%AC%E5%85%AC%E5%8F%B8%E6%8B%A5%E6%9C%89%E4%BA%BA%E5%BA%94%E5%8D%A0%E4%BA%8F%E6%8D%9F) Loss attributable to owners of the company for the period was approximately **HKD 11.6 million**, a reduction of approximately **HKD 2.3 million** from the prior period, primarily influenced by weak economic conditions in China and Hong Kong, partially offset by the new beverage segment - Loss attributable to owners of the company was approximately **HKD 11.6 million**, a decrease of approximately **HKD 2.3 million** from the prior period[49](index=49&type=chunk) - The reduction in loss was primarily influenced by weak economic conditions in China and Hong Kong, but partially offset by the commencement of the beverage segment during the period[49](index=49&type=chunk) [Liquidity, Financial Resources and Capital Structure](index=16&type=section&id=5.9%20%E6%B5%81%E5%8A%A8%E8%B5%84%E9%87%91%E3%80%81%E8%B4%A2%E5%8A%A1%E8%B5%84%E6%BA%90%E5%8F%8A%E8%B5%84%E6%9C%AC%E6%9E%B6%E6%9E%84) The Group aims to maintain going concern and optimize its capital structure, with cash and bank balances of approximately **HKD 5.7 million** as of June 30, 2025, holding **HKD 2 million** in secured bonds but no bank borrowings, and facing no significant foreign exchange risk [Capital Structure](index=16&type=section&id=5.9.1%20%E8%B5%84%E6%9C%AC%E6%9E%B6%E6%9E%84) The Group's capital management objective is to ensure going concern and generate returns for shareholders, with the debt-to-equity ratio being irrelevant due to a shareholder's equity deficit as of June 30, 2025 - The Group's capital management objective is to ensure going concern, generate returns for shareholders, and maintain an optimal capital structure to reduce funding costs[50](index=50&type=chunk) - The debt-to-equity ratio is not significant as the Company recorded a deficit in shareholder's equity as of June 30, 2025[51](index=51&type=chunk) [Cash and Bank Balances](index=17&type=section&id=5.9.2%20%E7%8E%B0%E9%87%91%E5%8F%8A%E9%93%B6%E8%A1%8C%E7%BB%93%E4%BD%99) As of June 30, 2025, cash and bank balances were approximately **HKD 5.7 million**, a decrease of approximately **HKD 4.9 million** from December 31, 2024, primarily due to increased cash used in China's catering business - As of June 30, 2025, cash and bank balances were approximately **HKD 5.7 million**, a decrease of approximately **HKD 4.9 million** from December 31, 2024[52](index=52&type=chunk) - The decrease was mainly due to increased cash used in the China catering business during the period[52](index=52&type=chunk) [Secured Bonds](index=17&type=section&id=5.9.3%20%E5%80%BA%E6%9D%83%E8%AF%81) The Group holds secured bonds with a principal amount of **HKD 2 million**, bearing an annual interest rate of **3%** and maturing on November 12, 2031 - The Group holds secured bonds with a principal amount of **HKD 2 million**, bearing interest at an annual rate of **3%**, and maturing on November 12, 2031[53](index=53&type=chunk) [Borrowings and Bank Facilities](index=17&type=section&id=5.9.4%20%E5%80%BA%E5%8A%A1%E5%8F%8A%E9%93%B6%E8%A1%8C%E8%9E%8D%E8%B5%84) As of June 30, 2025, the Group had no bank borrowings - As of June 30, 2025, the Group had no bank borrowings[54](index=54&type=chunk) [Foreign Exchange Risk](index=17&type=section&id=5.9.5%20%E5%A4%96%E6%B1%87%E9%A3%8E%E9%99%A9) The Group has no significant foreign exchange risk, as most income and expenses are denominated in HKD and RMB, and no hedging instruments were used during the period - The Group has no significant foreign exchange risk and did not use any financial instruments for hedging purposes during the period[55](index=55&type=chunk) [Issued Securities](index=17&type=section&id=5.9.6%20%E5%B7%B2%E5%8F%91%E8%A1%8C%E8%AF%81%E5%88%B8) As of June 30, 2025, **1,410,250,000** ordinary shares were issued, with no changes in the Company's issued share capital during the period - As of June 30, 2025, **1,410,250,000** ordinary shares were issued, with no changes in the Company's issued share capital during the period[56](index=56&type=chunk) [Other Information](index=18&type=section&id=%E5%85%B6%E4%BB%96%E4%BF%A1%E6%81%AF) [Commitments](index=18&type=section&id=6.1%20%E6%89%BF%E6%8B%85) As of June 30, 2025, the Group had no significant outstanding contracted capital commitments - As of June 30, 2025, the Group had no significant outstanding contracted capital commitments[57](index=57&type=chunk) [Pledged Assets](index=18&type=section&id=6.2%20%E6%8A%B5%E6%8A%BC%E8%B5%84%E4%BA%A7) As of June 30, 2025, none of the Group's assets were pledged - As of June 30, 2025, none of the Group's assets were pledged[58](index=58&type=chunk) [Contingent Liabilities](index=18&type=section&id=6.3%20%E6%88%96%E7%84%B6%E8%B4%9F%E5%80%BA) The Group has made a provision of **HKD 15.8 million** for a court litigation, which is not expected to have a material adverse effect on its daily operations and financial position - A provision of **HKD 15.8 million** has been made for a court litigation, which the Company believes will not have any material adverse effect on the Group's daily operations and financial position[59](index=59&type=chunk) - As of June 30, 2025, the Group had no other significant contingent liabilities[60](index=60&type=chunk) [Major Transaction – Construction Agreement](index=18&type=section&id=6.4%20%E4%B8%BB%E8%A6%81%E4%BA%A4%E6%98%93%EF%BC%8D%E5%BB%BA%E9%80%A0%E5%8D%8F%E8%AE%AE) Jiangsu Maoyou, a wholly-owned subsidiary, entered into a construction contract for **RMB 66,088,580** to build a production base, a major transaction approved by shareholders on April 25, 2025 - Jiangsu Maoyou, a wholly-owned subsidiary of the Company, entered into a construction contract with a contractor for **RMB 66,088,580** to build a production base[61](index=61&type=chunk) - This construction contract constitutes a major transaction and was approved by shareholders at an EGM on April 25, 2025[61](index=61&type=chunk) [Discloseable and Connected Transaction – Loan Agreement](index=19&type=section&id=6.5%20%E9%A1%BB%E4%BA%88%E6%8A%AB%E9%9C%B2%E5%8F%8A%E5%85%B3%E8%BF%9E%E4%BA%A4%E6%98%93%EF%BC%8D%E8%B4%B7%E6%AC%BE%E5%8D%8F%E8%AE%AE) The Company discovered that Jiangsu Maoyou entered into a **RMB 12.85 million** loan agreement on July 5, 2024, with Guangzhou Kafelaku Coffee Food Co, Ltd, and has appointed an internal control consultant due to non-compliance with Listing Rules' notification and announcement requirements - Jiangsu Maoyou entered into a loan agreement for **RMB 12.85 million** with Guangzhou Kafelaku Coffee Food Co, Ltd on July 5, 2024[62](index=62&type=chunk) - This loan constitutes a discloseable transaction, and due to non-compliance with the Listing Rules' notification and announcement requirements, the Company has appointed an internal control consultant for review[62](index=62&type=chunk)[63](index=63&type=chunk)[64](index=64&type=chunk) [Material Investments and Acquisitions/Disposals](index=19&type=section&id=6.6%20%E9%87%8D%E5%A4%A7%E6%8A%95%E8%B5%84%E5%8F%8A%E6%94%B6%E8%B4%AD%2F%E5%87%BA%E5%94%AE) During the reporting period, the Group had no material investments or significant acquisitions/disposals of subsidiaries, associates, and joint ventures - During the reporting period, the Group had no material investments or significant acquisitions or disposals of subsidiaries, associates, and joint ventures[65](index=65&type=chunk) [Future Plans for Material Investments and Capital Assets](index=19&type=section&id=6.7%20%E9%87%8D%E5%A4%A7%E6%8A%95%E8%B5%84%E5%8F%8A%E8%B5%84%E6%9C%AC%E8%B5%84%E4%BA%A7%E7%9A%84%E6%9C%AA%E6%9D%A5%E8%AE%A1%E5%88%92) Except as disclosed in this announcement, the Group has no future plans for material investments and capital assets - Except as disclosed in this announcement, the Group has no plans for material investments and capital assets during the reporting period and up to the date of this announcement[66](index=66&type=chunk) [Employees and Remuneration Policy](index=20&type=section&id=6.8%20%E9%9B%87%E5%91%98%E5%8F%8A%E8%96%AA%E9%85%AC%E6%94%BF%E7%AD%96) As of June 30, 2025, the Group had approximately **334** employees, a **16.3%** decrease year-on-year due to reduced revenue, with employee benefit expenses of approximately **HKD 25.4 million**, and remuneration policies based on merit, performance, and market levels - As of June 30, 2025, the Group had approximately **334** employees, a decrease of approximately **16.3%** from 2024, primarily due to reduced revenue during the period[67](index=67&type=chunk) - Employee benefit expenses (including directors' emoluments) for the period were approximately **HKD 25.4 million**[67](index=67&type=chunk) - Remuneration policy is based on talent, performance, and individual capabilities, with directors' and senior management's remuneration determined by market levels, responsibilities, and Group performance[67](index=67&type=chunk)[68](index=68&type=chunk) [Dividends](index=20&type=section&id=6.9%20%E8%82%A1%E6%81%AF) The Directors resolved not to declare any dividends for the period - The Directors resolved not to declare any dividends for the period (prior period: nil)[69](index=69&type=chunk) [Outlook](index=20&type=section&id=6.10%20%E5%89%8D%E6%99%AF) Directors anticipate medium-to-long-term economic stimulus from the Chinese government to improve catering and coffee industry revenue, despite short-term challenges, while the Group focuses on a multi-brand strategy, China market expansion, enhanced marketing, staff training, and exploring new cuisines and operating models [Key Risks and Uncertainties](index=20&type=section&id=6.10.1%20%E4%B8%BB%E8%A6%81%E9%A3%8E%E9%99%A9%E5%8F%8A%E4%B8%8D%E6%98%8E%E6%9C%97%E5%9B%A0%E7%B4%A0) The Group faces risks from geopolitical uncertainties (US-China trade war, international conflicts), interest rate fluctuations impacting consumer sentiment, the ability to adapt to market trends, volatile food ingredient costs (affected by exchange rates and tariffs), and labor market challenges (shortages, increased competition) - Geopolitical uncertainties: The US-China trade war and international conflicts may suppress economic conditions, affecting consumer confidence and the retail catering industry[70](index=70&type=chunk)[71](index=71&type=chunk) - Interest rate fluctuations: Hong Kong's interest rate trends may affect consumer spending sentiment, adversely impacting restaurant business operations[72](index=72&type=chunk) - Market responsiveness: The Group needs significant investment in market research and product development to adapt to changing market trends, tastes, and customer expectations[73](index=73&type=chunk) - Volatility of food ingredient costs: Operations are affected by fluctuating food prices, especially imported ingredients influenced by exchange rates and tariffs[74](index=74&type=chunk) - Labor market challenges: Potential labor shortages and increased competition for qualified personnel in the catering industry[75](index=75&type=chunk) [Future Strategies](index=21&type=section&id=6.10.2%20%E6%9C%AA%E6%9D%A5%E7%AD%96%E7%95%A5) The Group will implement a multi-brand strategy for steady development and cautious expansion in Hong Kong, gradually expanding into the China market, enhancing brand image through marketing, upgrading existing restaurant facilities, strengthening staff training, and considering expansion into other cuisines and operating models - The Group will utilize available resources to implement business strategies, focusing on steady development and cautious expansion in Hong Kong with a multi-brand strategy[75](index=75&type=chunk) - Strategies include gradually expanding into the China market, promoting and enhancing brand image through marketing activities, upgrading existing restaurant facilities, and strengthening staff training to attract new customers[75](index=75&type=chunk) - In the short term, more effort will be invested in online marketing to promote existing businesses and increase market share, while continuing to diversify business and expand the China coffee business[76](index=76&type=chunk) - The Group will consider expanding into other cuisines and operating models for its food and beverage business if opportunities arise[77](index=77&type=chunk) [Use of Proceeds from Placing](index=22&type=section&id=6.11%20%E9%85%8D%E5%94%AE%E4%BA%8B%E9%A1%B9%E4%B9%8B%E6%89%80%E5%BE%97%E6%AC%BE%E9%A1%B9%E7%94%A8%E9%80%94) As of June 30, 2025, the net proceeds of approximately **HKD 27.1 million** from the 2024 placing have been fully utilized as planned for developing the Kafelaku Coffee business in Hong Kong and China, and supplementing the Group's business operations and general working capital Use of Net Proceeds from Placing (As at June 30, 2025) | Planned Use | Planned Amount (HKD '000) | Actual Use (HKD '000) | Remaining Balance (HKD '000) | | :--- | :--- | :--- | :--- | | Development of Kafelaku Coffee business in Hong Kong and China | 16,260 | 16,260 | – | | Supplementing the Group's business operations and general working capital | 10,840 | 10,840 | – | | **Total** | **27,100** | **27,100** | **–** | - As of June 30, 2025, all net proceeds from the 2024 placing have been utilized as planned[78](index=78&type=chunk) [Events After Reporting Period](index=22&type=section&id=6.12%20%E6%9C%9F%E5%90%8E%E4%BA%8B%E9%A1%B9) The Board is unaware of any other significant events affecting the Group that occurred after the reporting period and up to the date of this announcement - The Board is unaware of any other significant events affecting the Group that occurred after the reporting period and up to the date of this announcement[79](index=79&type=chunk) [Compliance with Corporate Governance Code](index=23&type=section&id=6.13%20%E9%81%B5%E5%AE%88%E4%BC%81%E4%B8%9A%E7%AE%A1%E6%B2%BB%E5%AE%88%E5%88%99) The Company is committed to high corporate governance standards, and while the Chairman and CEO roles were combined from January 1 to June 29, 2025, deviating from the Corporate Governance Code, full compliance was achieved from June 30, 2025, with the appointment of Ms Liang Jiahui as Chairman - From January 1 to June 29, 2025, the roles of Chairman and Chief Executive Officer were combined and held by Mr Liang Naiming, deviating from Rule C.2.1 of the Corporate Governance Code[80](index=80&type=chunk)[81](index=81&type=chunk) - The Board believed that Mr Liang Naiming's dual role as Chairman and CEO was in the best interests of the Group, ensuring leadership consistency and decision-making efficiency[81](index=81&type=chunk)[82](index=82&type=chunk) - From June 30, 2025, Mr Liang Naiming resigned as Chairman, and Ms Liang Jiahui was appointed as Chairman, bringing the Company into full compliance with the Corporate Governance Code[83](index=83&type=chunk) [Model Code for Securities Transactions by Directors](index=24&type=section&id=6.14%20%E8%91%A3%E4%BA%8B%E8%BF%9B%E8%A1%8C%E8%AF%81%E5%88%B8%E4%BA%A4%E6%98%93%E7%9A%84%E6%93%8D%E5%AE%88%E5%AE%88%E5%88%99) The Company has adopted the Model Code for Securities Transactions by Directors as set out in Appendix C3 of the Listing Rules, and all Directors confirmed full compliance during the period - The Company has adopted the Model Code for Securities Transactions by Directors as set out in Appendix C3 of the Listing Rules, and all Directors confirmed full compliance during the period[85](index=85&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=24&type=section&id=6.15%20%E8%B4%AD%E4%B9%B0%E3%80%81%E5%87%BA%E5%94%AE%E6%88%96%E8%B5%8E%E5%9B%9E%E6%9C%AC%E5%85%AC%E5%8F%B8%E4%B8%8A%E5%B8%82%E8%AF%81%E5%88%B8) During the period, neither the Company nor its subsidiaries purchased, sold, or redeemed any of the Company's listed securities, and as of June 30, 2025, the Company held no treasury shares - During the period, neither the Company nor any of its subsidiaries purchased or sold any of the Company's listed securities[86](index=86&type=chunk) - During the period, the Company did not redeem any listed securities[87](index=87&type=chunk) - As of June 30, 2025, the Company held no treasury shares[88](index=88&type=chunk) [Share Scheme](index=24&type=section&id=6.16%20%E8%82%A1%E4%BB%BD%E8%AE%A1%E5%88%92) The Company adopted a share scheme on May 24, 2024, to align shareholder and employee interests, establish long-term incentives, and attract talent, under which **110.5 million** award shares were allocated to **55** employees on August 29, 2024, with **92.67 million** transferred and **17.83 million** held by the trustee - The Company's share scheme was adopted on May 24, 2024, aiming to align shareholder and employee interests, establish sound long-term incentive mechanisms, and attract and retain outstanding talent[89](index=89&type=chunk)[90](index=90&type=chunk) - On August 29, 2024, a total of **110.5 million** award shares (approximately **8.5%** of issued share capital) were allocated to **55** full-time employees of the Group[91](index=91&type=chunk) - During the period, **92.67 million** award shares were transferred to grantees, while **17.83 million** shares remain held by the trustee and are yet to be vested[91](index=91&type=chunk) [Audit Committee and Review of Accounts](index=25&type=section&id=6.17%20%E5%AE%A1%E6%A0%B8%E5%A7%94%E5%91%98%E4%BC%9A%E5%8F%8A%E5%AE%A1%E9%98%85%E8%B4%A6%E7%9B%AE) The Company's Audit Committee, comprising three independent non-executive directors, has reviewed the Group's unaudited interim financial results and confirmed their compliance with relevant accounting standards, rules, and regulations - The Audit Committee, composed of three independent non-executive directors, has reviewed the Group's unaudited interim financial results[92](index=92&type=chunk) - The Audit Committee believes that the Group's unaudited interim financial results for the period comply with relevant accounting standards, rules, and regulations, and appropriate disclosures have been duly made[92](index=92&type=chunk) [Publication of Interim Results Announcement and Interim Report](index=25&type=section&id=6.18%20%E5%88%8A%E5%8F%91%E4%B8%AD%E6%9C%9F%E4%B8%9A%E7%BB%A9%E5%85%AC%E5%91%8A%E5%8F%8A%E4%B8%AD%E6%8A%A5) This announcement is published on the Stock Exchange and the Company's websites, with the interim report for the period to be issued and dispatched to shareholders in due course - This announcement is published on the Stock Exchange website (www.hkexnews.hk) and the Company's website (www.kafelaku.com)[93](index=93&type=chunk) - The interim report for the reporting period will be issued and dispatched to shareholders in due course, and published on the Stock Exchange and the Company's websites[93](index=93&type=chunk) [Acknowledgements](index=26&type=section&id=6.19%20%E8%87%B4%E8%B0%A2) The Board of Directors extends its sincere gratitude to the Company's shareholders, management team, employees, business partners, and customers for their support and contributions to the Group - The Board of Directors extends its sincere gratitude to the Company's shareholders, management team, employees, business partners, and customers for their support and contributions to the Group[94](index=94&type=chunk) [Board Information](index=26&type=section&id=6.20%20%E8%91%A3%E4%BA%8B%E4%BC%9A%E4%BF%A1%E6%81%AF) This announcement is issued by the Board under the direction of Ms Liang Jiahui, the Chairman, and as of the announcement date, the Board comprises four executive directors, two non-executive directors, and three independent non-executive directors - This announcement is issued by the Board under the direction of Ms Liang Jiahui, the Chairman[95](index=95&type=chunk) - As of the date of this announcement, the executive directors are Ms Liang Jiahui, Mr Cui Zhiqiang, Mr Liang Naiming, and Mr Ma Xiaoping; the non-executive directors are Mr Cui Zifeng and Ms Feng Weichan; and the independent non-executive directors are Mr Chan Yan Kin, Ms Zhang Guangfang, and Mr Yang Chao[96](index=96&type=chunk)

[Important Notices and Company Information](index=1&type=section&id=Important%20Notices%20and%20Company%20Information) [Disclaimer](index=1&type=section&id=Disclaimer) Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited are not responsible for the content of this announcement, make no statement as to its accuracy or completeness, and expressly disclaim liability for any loss arising from its contents - Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited assume no responsibility for the content of this announcement, nor do they guarantee its accuracy or completeness[1](index=1&type=chunk) [Company Overview](index=1&type=section&id=Company%20Overview) Fusen Pharmaceutical Co., Ltd. announces its unaudited interim results for the six months ended June 30, 2025, with comparative data for the same period in 2024 - Fusen Pharmaceutical Co., Ltd. (Stock Code: 1652) announces its unaudited interim results for the six months ended June 30, 2025[2](index=2&type=chunk) [Financial Highlights](index=1&type=section&id=Financial%20Highlights) In the first half of 2025, the company experienced a significant decline in revenue and gross profit, but the loss attributable to equity holders of the Company narrowed 2025 H1 vs 2024 H1 Financial Highlights Comparison | Indicator | 2025 H1 (RMB million) | 2024 H1 (RMB million) | Change Rate | | :--- | :---: | :---: | :---: | | Revenue | 113.3 | 196.3 | -43.3% | | Gross Profit | 43.0 | 105.9 | -59.4% | | Loss attributable to equity holders of the Company | (23.1) | (36.9) | -37.4% (Loss narrowed) | [Financial Statements](index=2&type=section&id=Financial%20Statements) [Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=2&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For the six months ended June 30, 2025, the company's revenue decreased by 43.3% year-on-year to RMB 111.3 million, gross profit decreased by 59.4% to RMB 43.0 million, and loss for the period narrowed to RMB 23.1 million Consolidated Statement of Profit or Loss and Other Comprehensive Income Key Data (RMB thousand) | Indicator | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :--- | :---: | :---: | | Revenue | 111,286 | 196,322 | | Cost of Sales | (68,296) | (90,450) | | Gross Profit | 42,990 | 105,872 | | Operating Loss | (20,194) | (36,539) | | Loss before tax | (22,725) | (45,325) | | Loss for the period | (23,136) | (36,949) | | Loss for the period attributable to equity holders of the Company | (23,136) | (36,941) | | Basic loss per share (RMB cents) | (3) | (5) | [Consolidated Statement of Financial Position](index=3&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the company's total non-current assets slightly increased, total current assets slightly decreased, and net current liabilities expanded, leading to a reduction in net assets and total equity Consolidated Statement of Financial Position Key Data (RMB thousand) | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :---: | :---: | | Non-current assets | 784,226 | 778,549 | | Current assets | 448,451 | 459,612 | | Current liabilities | 789,389 | 772,445 | | Net current liabilities | (340,938) | (312,833) | | Net assets | 345,241 | 368,362 | | Total equity attributable to equity holders of the Company | 346,550 | 369,671 | [Notes to Financial Statements](index=5&type=section&id=Notes%20to%20Financial%20Statements) [1 Organisation and Principal Activities](index=5&type=section&id=1%20Organisation%20and%20Principal%20Activities) The Group is incorporated in the Cayman Islands and primarily engaged in the manufacturing and sale of pharmaceutical products - The Company was incorporated in the Cayman Islands as an exempted company with limited liability on January 18, 2013[7](index=7&type=chunk) - The Group is principally engaged in the manufacturing and sale of pharmaceutical products[8](index=8&type=chunk) [2 Basis of Preparation](index=5&type=section&id=2%20Basis%20of%20Preparation) The interim financial report is prepared in accordance with the HKEX Listing Rules and IAS 34, authorized for issue on August 29, 2025, noting significant going concern uncertainties, but the Board has taken measures to mitigate liquidity pressure and considers the going concern basis appropriate - The interim financial report is prepared in accordance with the Listing Rules of the Stock Exchange and International Accounting Standard 34, and was authorized for issue on August 29, 2025[9](index=9&type=chunk) - Affected by market demand and intense competition, the Group's revenue significantly decreased, resulting in operating losses, and as of June 30, 2025, net current liabilities amounted to **RMB 340,938,000**, indicating significant uncertainty about its ability to continue as a going concern[11](index=11&type=chunk) - The Board has adopted several measures, including negotiating new loans, collecting receivables, disposing of idle assets, restructuring debts, and obtaining financial support from the ultimate controlling party, to alleviate liquidity pressure and considers the preparation of financial statements on a going concern basis to be appropriate[11](index=11&type=chunk)[13](index=13&type=chunk) [3 Changes in Accounting Policies](index=7&type=section&id=3%20Changes%20in%20Accounting%20Policies) The Group has applied the amendments to IAS 21, which have no significant impact on this interim report, and has not applied any new standards or interpretations not yet effective for the current accounting period - The Group has applied the amendments to International Accounting Standard 21 "The Effects of Changes in Foreign Exchange Rates—Lack of Exchangeability", but they have no significant impact on this interim report[14](index=14&type=chunk) - The Group has not applied any new standards or interpretations that are not yet effective for the current accounting period[15](index=15&type=chunk) [4 Revenue and Segment Information](index=7&type=section&id=4%20Revenue%20and%20Segment%20Information) The Group's principal business is the manufacturing and sale of pharmaceutical products, with revenue primarily from Shuanghuanglian Oral Liquid, Shuanghuanglian Injection, and other products, all recognized at a point in time, and operates as a single reportable segment with main business and assets located in China [4(a) Revenue](index=7&type=section&id=4(a)%20Revenue) - The Group's principal business is the manufacturing and sale of pharmaceutical products[16](index=16&type=chunk) Major Revenue Categories for the Period (RMB thousand) | Product Category | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :--- | :---: | :---: | | Shuanghuanglian Oral Liquid | 56,119 | 83,900 | | Shuanghuanglian Injection | 16,159 | 54,836 | | Other Manufactured Products | 39,008 | 53,328 | | Subtotal (Manufactured Products) | 111,286 | 192,064 | | Third-party Products | – | 4,258 | | Total | 111,286 | 196,322 | - For the six months ended June 30, 2025, transactions with one customer exceeded **10% of total revenue**, with sales amounting to **RMB 12,048,000**[19](index=19&type=chunk) [4(b) Segment Information](index=8&type=section&id=4(b)%20Segment%20Information) - The Group has only one reportable segment, with revenue primarily derived from sales of Shuanghuanglian Oral Liquid, Shuanghuanglian Injection, and other pharmaceutical products to customers in China[20](index=20&type=chunk) - The Group's operating assets and non-current assets are primarily located in China, thus no geographical and asset segment analysis is provided[20](index=20&type=chunk) [5 Income Tax Expense](index=8&type=section&id=5%20Income%20Tax%20Expense) Income tax expense for the first half of 2025 was RMB 411 thousand, compared to a tax credit of RMB 8,376 thousand in the same period of 2024, with certain Chinese subsidiaries enjoying a preferential 15% income tax rate as high-tech enterprises Income Tax Expense (RMB thousand) | Indicator | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :--- | :---: | :---: | | Current tax — China corporate income tax | (29) | – | | Deferred tax | 440 | (8,376) | | Total | 411 | (8,376) | - Henan Fusen and Zhuhai Hengqin are certified as high-tech enterprises, enjoying a preferential income tax rate of **15%**[22](index=22&type=chunk) [6 Loss Per Share](index=9&type=section&id=6%20Loss%20Per%20Share) For the six months ended June 30, 2025, basic loss per share was RMB 3 cents, narrowing from RMB 5 cents in the same period of 2024, with basic and diluted loss per share being the same due to the anti-dilutive effect of all potential dilutive ordinary shares [6(a) Basic Loss Per Share](index=9&type=section&id=6(a)%20Basic%20Loss%20Per%20Share) - Basic loss per share was **RMB 3 cents** (2024 H1: **RMB 5 cents**), calculated based on a loss attributable to equity holders of the Company of **RMB 23,136,000** and a weighted average of **739,301,000** ordinary shares outstanding[23](index=23&type=chunk) [6(b) Diluted Loss Per Share](index=9&type=section&id=6(b)%20Diluted%20Loss%20Per%20Share) - Basic and diluted loss per share were the same for the six months ended June 30, 2025 and 2024, as all potential dilutive ordinary shares had an anti-dilutive effect[24](index=24&type=chunk) [7 Trade Receivables](index=9&type=section&id=7%20Trade%20Receivables) As of June 30, 2025, total trade receivables were RMB 104,701 thousand, a decrease from the end of 2024, primarily due to a reduction in accounts receivable, with bills receivable mainly comprising bank acceptance bills due within 6 to 12 months Trade Receivables (RMB thousand) | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :---: | :---: | | Bills receivable | 57,197 | 52,617 | | Accounts receivable (net of allowance for credit losses) | 47,504 | 61,261 | | Total | 104,701 | 113,878 | - Bills receivable are bank acceptance bills received from customers, with maturity dates within **6 to 12 months**[26](index=26&type=chunk) - Accounts receivable are due within **1 to 6 months** from the invoice date and are non-interest bearing[26](index=26&type=chunk) [8 Prepayments and Other Receivables](index=10&type=section&id=8%20Prepayments%20and%20Other%20Receivables) As of June 30, 2025, total prepayments and other receivables amounted to RMB 154,071 thousand, a decrease from RMB 187,596 thousand at the end of 2024, mainly due to a significant decline in other receivables from government-related entities Prepayments and Other Receivables (RMB thousand) | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :---: | :---: | | Receivables related to compensation from local government for relocation of production facilities | 40,607 | 40,607 | | Prepayments for raw materials and services | 13,243 | 16,264 | | Deductible input VAT | 15,385 | 17,388 | | Prepayments to related parties | 24,851 | 8,556 | | Other receivables from government-related entities | 28,500 | 81,223 | | Others | 31,485 | 23,558 | | Total | 154,071 | 187,596 | [9 Trade Payables and Bills Payable](index=11&type=section&id=9%20Trade%20Payables%20and%20Bills%20Payable) As of June 30, 2025, total trade payables and bills payable increased to RMB 136,846 thousand from the end of 2024, with all amounts expected to be settled within one year Ageing Analysis of Trade Payables and Bills Payable (RMB thousand) | Ageing | June 30, 2025 | December 31, 2024 | | :--- | :---: | :---: | | Current to three months | 52,056 | 56,377 | | Four to six months | 14,525 | 8,298 | | Seven to twelve months | 21,294 | 19,198 | | Over twelve months | 48,971 | 39,593 | | Total | 136,846 | 123,466 | - All trade payables are expected to be settled within one year[28](index=28&type=chunk) [10 Share Capital](index=11&type=section&id=10%20Share%20Capital) As of June 30, 2025, the number of authorized and issued and fully paid ordinary shares remained largely consistent with the end of 2024, with a par value of HK$0.01 per share Share Capital Information (RMB thousand) | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :---: | :---: | | Authorized ordinary shares (number) | 2,000,000,000 | 2,000,000,000 | | Authorized ordinary shares (amount) | 16,354 | 16,354 | | Issued and fully paid ordinary shares (number) | 739,301,000 | 749,956,000 | | Issued and fully paid ordinary shares (amount) | 6,179 | 6,310 | - Holders of ordinary shares are entitled to receive dividends and have the right to vote at company meetings on a one-vote-per-share basis, with all ordinary shares ranking pari passu[29](index=29&type=chunk) [11 Dividends](index=11&type=section&id=11%20Dividends) The Board does not recommend the payment of any dividends for the six months ended June 30, 2025, consistent with the same period in 2024 - The Board does not recommend the payment of any dividends for the six months ended June 30, 2025 (2024 H1: nil)[30](index=30&type=chunk) [Management Discussion and Analysis](index=12&type=section&id=Management%20Discussion%20and%20Analysis) [Business Review and Future Outlook](index=12&type=section&id=Business%20Review%20and%20Future%20Outlook) In the first half of 2025, the Group experienced a decline in operating revenue and gross profit, but the net loss attributable to shareholders narrowed, with significant improvement in joint venture profitability, and the company remains cautiously optimistic about the second half due to core product procurement wins, R&D pipeline optimization, cost control, and new product launches - Operating revenue for the first half of 2025 was approximately **RMB 111.3 million**, a year-on-year decrease of **43.3%**; net loss attributable to equity holders of the Company was approximately **RMB 23.1 million**, narrowing by **37.4%** year-on-year[31](index=31&type=chunk) - Gross profit margin was **38.6%**, a decrease of **15.3 percentage points** from **53.9%** in the first half of 2024, mainly due to increased product promotion and sales discounts[31](index=31&type=chunk) - Jiangxi Yongfeng Kangde Pharmaceutical Co., Ltd., a joint venture, recorded a profit of approximately **RMB 26.3 million** in the first half of 2025, with the Company's share of profit being approximately **RMB 9.4 million**, a significant improvement from a loss in the first half of 2024[31](index=31&type=chunk) - The company's core products, Shuanghuanglian Oral Liquid and Shuanghuanglian Injection, have won bids in the third batch of national centralized procurement for traditional Chinese medicines, with positive impacts expected to gradually materialize in the second half of the year[32](index=32&type=chunk) - The Group is improving cash flow by streamlining its R&D pipeline, focusing on core products, reducing non-core R&D expenses, controlling management and promotion costs, and seeking to dispose of idle assets[33](index=33&type=chunk) - Zhuhai Hengqin R&D platform has **44 projects** under development, with **15 currently under review**, expecting at least **20 new products** to be launched in the next three years, covering anti-infective viruses, cardiovascular, and cerebrovascular fields[34](index=34&type=chunk) - The company maintains a cautiously optimistic outlook on its operating performance for the second half of the year, anticipating a gradual recovery in revenue and gross profit margin, with continued improvement in operating results[35](index=35&type=chunk) [Financial Review](index=14&type=section&id=Financial%20Review) This section provides a detailed review of the financial performance for the first half of 2025, including a significant decline in sales, lower gross margin, controlled expenses, and a notable improvement in joint venture profitability, alongside disclosures on capital structure, liquidity, gearing ratio, foreign exchange risk, human resources, commitments, contingent liabilities, and pledged assets [Sales Performance](index=14&type=section&id=Sales%20Performance) Product Sales Revenue Comparison (RMB thousand) | Product Category | 2025 H1 Revenue | 2025 H1 Share | 2024 H1 Revenue | 2024 H1 Share | Growth Rate | | :--- | :---: | :---: | :---: | :---: | :---: | | Shuanghuanglian Oral Liquid | 56,119 | 50.4% | 83,900 | 42.7% | -33.1% | | Shuanghuanglian Injection | 16,159 | 14.5% | 54,836 | 27.9% | -70.5% | | Nicardipine Hydrochloride Injection | 2,603 | 2.4% | 12,877 | 6.6% | -79.8% | | Qingrejiedu Oral Liquid | 5,253 | 4.7% | 8,796 | 4.5% | -40.3% | | Other Products | 31,152 | 28.0% | 31,655 | 16.1% | -1.6% | | **Subtotal (Manufactured Products)** | **111,286** | **100.0%** | **192,064** | **97.8%** | **-42.1%** | | Third-party Products | – | 0.0% | 4,258 | 2.2% | -100.0% | | **Total** | **111,286** | **100.0%** | **196,322** | **100.0%** | **-43.3%** | - Total revenue decreased by **43.3%** year-on-year to **RMB 111.3 million**, primarily due to reduced product sales, a weak market, and insufficient demand[36](index=36&type=chunk) - Sales revenue of Shuanghuanglian Oral Liquid decreased by **33.1%**, and Shuanghuanglian Injection sales revenue decreased by **70.5%**, mainly due to insufficient market demand and customers reducing inventory[37](index=37&type=chunk) [Gross Profit and Gross Margin](index=15&type=section&id=Gross%20Profit%20and%20Gross%20Margin) - Gross profit decreased by **59.4%** from approximately **RMB 105.9 million** in the first half of 2024 to approximately **RMB 43.0 million** in the first half of 2025[38](index=38&type=chunk) - Gross profit margin decreased by **15.3 percentage points** to approximately **38.6%** (2024 H1: approximately **53.9%**), mainly due to increased product promotion and sales discounts[38](index=38&type=chunk) [Other (Losses)/Income, Net](index=15&type=section&id=Other%20(Losses)%2FIncome,%20Net) - The increase in net other losses was primarily due to a decrease in government grants[39](index=39&type=chunk) [Selling and Distribution Expenses](index=15&type=section&id=Selling%20and%20Distribution%20Expenses) - Selling and distribution expenses decreased from approximately **RMB 52.2 million** in the first half of 2024 to approximately **RMB 30.6 million** in the first half of 2025, consistent with the decrease in revenue[40](index=40&type=chunk) - Selling and distribution expenses as a percentage of revenue were **26.6%** (2024) and **27.5%** (2025), respectively[40](index=40&type=chunk) [General and Administrative Expenses](index=15&type=section&id=General%20and%20Administrative%20Expenses) - General and administrative expenses decreased from approximately **RMB 36.2 million** in the first half of 2024 to approximately **RMB 14.7 million** in the first half of 2025, primarily due to a reduction in credit losses on trade and other receivables[41](index=41&type=chunk) [Research and Development Expenses](index=15&type=section&id=Research%20and%20Development%20Expenses) - Research and development expenses decreased from approximately **RMB 57.1 million** in the first half of 2024 to approximately **RMB 14.9 million** in the first half of 2025, mainly due to reduced investment in non-core product projects and the termination of some non-core R&D projects[42](index=42&type=chunk) [Net Finance Costs](index=16&type=section&id=Net%20Finance%20Costs) - Net finance costs increased from approximately **RMB 7.4 million** in the first half of 2024 to approximately **RMB 7.8 million** in the first half of 2025, primarily due to a decrease in net exchange gains[43](index=43&type=chunk) [Share of Profit/(Loss) of a Joint Venture](index=16&type=section&id=Share%20of%20Profit%2F(Loss)%20of%20a%20Joint%20Venture) - The Group's share of profit from a joint venture increased from a loss of approximately **RMB 0.4 million** in the first half of 2024 to a profit of approximately **RMB 9.4 million** in the first half of 2025, mainly due to the significant improvement in Jiangxi Yongfeng Kangde's operating performance through its cooperation with Huakui Pharmaceutical Group[44](index=44&type=chunk) [Income Tax Expense](index=16&type=section&id=Income%20Tax%20Expense) - Income tax expense increased from a tax credit of approximately **RMB 8.4 million** in the first half of 2024 to a tax expense of approximately **RMB 0.4 million** in the first half of 2025, primarily due to a decrease in deferred tax[45](index=45&type=chunk) [Capital Expenditure](index=16&type=section&id=Capital%20Expenditure) - Total capital expenditure for the first half of 2025 was approximately **RMB 7.3 million**, a significant decrease from **RMB 46.0 million** in the first half of 2024[46](index=46&type=chunk) - Capital expenditure was primarily used for lease payments for land use rights, improvements to energy equipment in existing production processes, and obtaining licenses for drugs under development[46](index=46&type=chunk) [Capital Structure](index=16&type=section&id=Capital%20Structure) - As of June 30, 2025, the Group's total equity attributable to shareholders was approximately **RMB 346.6 million** (December 31, 2024: approximately **RMB 369.7 million**), and total liabilities were approximately **RMB 887.4 million** (December 31, 2024: approximately **RMB 869.8 million**)[47](index=47&type=chunk) [Liquidity and Financial Resources](index=17&type=section&id=Liquidity%20and%20Financial%20Resources) - As of June 30, 2025, the Group had net current liabilities of approximately **RMB 340.9 million** (December 31, 2024: approximately **RMB 312.8 million**)[48](index=48&type=chunk) - Cash and cash equivalents were approximately **RMB 76.0 million** (December 31, 2024: approximately **RMB 21.1 million**), and short-term bank and other loans were approximately **RMB 283.4 million** (December 31, 2024: approximately **RMB 303.5 million**)[48](index=48&type=chunk) - The Directors have confirmed that the Group possesses sufficient financial resources to meet its financial obligations as they fall due in the foreseeable future[49](index=49&type=chunk) [Gearing Ratio](index=17&type=section&id=Gearing%20Ratio) - As of June 30, 2025, the Group's gearing ratio (calculated as total bank and other loans divided by total equity) increased to **105.4%** from **103.9%** as of December 31, 2024[50](index=50&type=chunk) [Foreign Exchange Risk](index=17&type=section&id=Foreign%20Exchange%20Risk) - The Group primarily operates in China, with most transactions denominated and settled in RMB, and regularly monitors foreign exchange risk, considering hedging strategies[51](index=51&type=chunk) [Human Resources](index=17&type=section&id=Human%20Resources) - As of June 30, 2025, the Group had **1,045 employees** (December 31, 2024: **1,131 employees**), with total staff costs of approximately **RMB 31.0 million** (2024 H1: **RMB 41.4 million**)[52](index=52&type=chunk) - The Group offers competitive remuneration packages, including mandatory provident funds, insurance, and medical coverage, and grants discretionary bonuses and share options based on performance[52](index=52&type=chunk) [Commitments](index=18&type=section&id=Commitments) Capital Commitments (RMB thousand) | Category | June 30, 2025 | December 31, 2024 | | :--- | :---: | :---: | | Contracted | 275,450 | 352,328 | [Contingent Liabilities](index=18&type=section&id=Contingent%20Liabilities) - As of June 30, 2025, the Group had no significant contingent liabilities[54](index=54&type=chunk) [Pledge of Assets](index=18&type=section&id=Pledge%20of%20Assets) - As of June 30, 2025, certain bank borrowings of the Group were secured by property, plant and equipment, investment properties, land use rights, and inventories with a total carrying amount of approximately **RMB 145.9 million** (December 31, 2024: approximately **RMB 213.6 million**)[55](index=55&type=chunk) [Corporate Governance and Other Information](index=18&type=section&id=Corporate%20Governance%20and%20Other%20Information) [Corporate Governance](index=18&type=section&id=Corporate%20Governance) The Company has adopted the Corporate Governance Code set out in Appendix C1 of the Listing Rules and complied with all applicable code provisions during the reporting period, with the exceptions of the non-segregation of Chairman and CEO roles and the external appointment of the Company Secretary, which the Board believes are in the Company's best interests with sufficient checks and balances [Compliance with Corporate Governance Code](index=18&type=section&id=Compliance%20with%20Corporate%20Governance%20Code) - The Company has adopted the Corporate Governance Code set out in Appendix C1 of the Listing Rules and complied with all applicable code provisions during the period from January 1, 2025, to June 30, 2025, except for code provisions C.2.1 and C.6.1[56](index=56&type=chunk) [Chairman and Chief Executive Officer Roles](index=18&type=section&id=Chairman%20and%20Chief%20Executive%20Officer%20Roles) - Mr. Cao Zhiming holds both the roles of Chairman of the Board and Chief Executive Officer, deviating from code provision C.2.1 (which states that the roles of chairman and chief executive officer should be separate)[57](index=57&type=chunk) - The Board believes this arrangement is in the best interests of the Group, ensuring consistent leadership and efficient strategic planning, and that the composition of the Board provides sufficient independent elements and adequate checks and balances[59](index=59&type=chunk) [Company Secretary](index=19&type=section&id=Company%20Secretary) - Mr. Yeung Yuk Hong is an external service provider and not an employee of the Company, deviating from code provision C.6.1 (which states that the company secretary should be an employee of the company)[60](index=60&type=chunk) - The Company has appointed its Chief Financial Officer as the primary contact person for Mr. Yeung, and the Board believes that Mr. Yeung's professional knowledge and experience are beneficial to the Group's compliance with relevant procedures, laws, and regulations[60](index=60&type=chunk) [Audit Committee](index=19&type=section&id=Audit%20Committee) - The Audit Committee comprises three independent non-executive Directors, with primary responsibilities including providing independent opinions on financial reporting processes, internal control, and risk management systems, and overseeing the audit process[61](index=61&type=chunk) [Review of Interim Results](index=20&type=section&id=Review%20of%20Interim%20Results) The Audit Committee has reviewed the unaudited condensed interim financial report for the six months ended June 30, 2025, and advises investors to exercise caution when trading securities, as the disclosed data is for reference only - The Audit Committee has reviewed the unaudited condensed interim financial report for the six months ended June 30, 2025[62](index=62&type=chunk) - Investors should exercise caution when trading the Company's securities and should not overly rely on the data disclosed in this interim report, professional advice is recommended[62](index=62&type=chunk) [Standard Code for Securities Transactions by Directors](index=20&type=section&id=Standard%20Code%20for%20Securities%20Transactions%20by%20Directors) The Company has adopted the Standard Code set out in Appendix C3 of the Listing Rules, and all Directors confirmed compliance with the code during the reporting period - The Company has adopted the Standard Code set out in Appendix C3 of the Listing Rules, and all Directors confirmed compliance with the code during the reporting period[63](index=63&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=20&type=section&id=Purchase,%20Sale%20or%20Redemption%20of%20the%20Company's%20Listed%20Securities) Neither the Company nor any of its subsidiaries purchased, redeemed, or sold any of the Company's listed securities during the reporting period and up to the date of this announcement - Neither the Company nor any of its subsidiaries purchased, redeemed, or sold any of the Company's listed securities during the six months ended June 30, 2025, and up to the date of this announcement[64](index=64&type=chunk) [Interim Dividends](index=20&type=section&id=Interim%20Dividends) The Board does not recommend the declaration of any dividends for the six months ended June 30, 2025, consistent with the same period in 2024 - The Board does not recommend the declaration of any dividends for the six months ended June 30, 2025 (2024 H1: RMB nil)[65](index=65&type=chunk) [Events After Reporting Period](index=20&type=section&id=Events%20After%20Reporting%20Period) No significant events severely affecting the Group's operations and financial performance occurred after June 30, 2025, and up to the date of this announcement - No significant events severely affecting the Group's operations and financial performance occurred after June 30, 2025, and up to the date of this announcement[66](index=66&type=chunk) [Publication of Interim Report](index=21&type=section&id=Publication%20of%20Interim%20Report) The Company's interim report for the six months ended June 30, 2025, will be dispatched to shareholders before September 2025 and will be available on the HKEX and company websites - The Company's interim report for the six months ended June 30, 2025, will be dispatched to shareholders before September 2025 and will be available on the HKEX website www.hkexnews.hk and the Company's website www.fusenyy.com[67](index=67&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，並明確表示概不就因本公告全部或任何部分內容而產生或因倚賴該等內容 而引致的任何損失承擔任何責任。 TU YI HOLDING COMPANY LIMITED 途屹控股有限公司 （於開曼群島註冊成立之有限公司） （股份代號：1701） 截至二零二五年六月三十日止六個月之中期業績公告 途屹控股有限公司（「本公司」）董事（「董事」）會（「董事會」）謹此宣佈本公司及其附屬公司（統稱為「本集 團」）截至二零二五年六月三十日止六個月（「回顧期間」）之未經審核簡明綜合中期業績。 財務概要 | | | 截至六月三十日止六個月 | | | --- | --- | --- | --- | | | 二零二五年 | 二零二四年 | 同比變動 | | | 人民幣千元 | 人民幣千元 | （%） | | 收益 | 159,797 | 90,585 | 76.4 | | 毛利 | 48,183 | 26,483 | 81.9 | | 本公司權益股東應佔溢利淨額 | 19,934 | 4,596 | 334 | | （人民幣分） 每 ...