[Financial Highlights](index=1&type=section&id=Financial%20Highlights) The company reported a 30.4% revenue decrease and expanded loss for the period, with a slight gross margin improvement, and no interim dividend recommendation Summary of Key Financial Data for the Six Months Ended June 30, 2025 | Metric | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 61,635 | 88,602 | -30.4% | | Gross Profit | 27,193 | 38,107 | -28.6% | | Overall Gross Profit Margin | 44.1% | 43.0% | +1.1 pp | | Loss for the Period | (8,115) | (7,188) | +12.9% | | Loss Attributable to Owners of the Company | (9,703) | (9,273) | +4.6% | - The Board does not recommend the payment of an **interim dividend** for the six months ended June 30, 2025[3](index=3&type=chunk) [Condensed Consolidated Financial Statements](index=2&type=section&id=Condensed%20Consolidated%20Financial%20Statements) [Condensed Consolidated Statement of Profit or Loss](index=2&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss) Revenue declined by 30.4%, while increased administrative expenses and associate losses contributed to expanded operating and period losses Key Data from Condensed Consolidated Statement of Profit or Loss | Metric | For the six months ended June 30, 2025 (HK$ thousand) | For the six months ended June 30, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Revenue | 61,635 | 88,602 | | Cost of sales | (34,442) | (50,495) | | Gross profit | 27,193 | 38,107 | | Other income and gains | 1,913 | 2,117 | | Selling and distribution expenses | (1,503) | (1,881) | | Administrative expenses | (33,744) | (44,678) | | Share of results of an associate | (1,857) | – | | Operating loss | (7,998) | (6,335) | | Finance costs | (37) | – | | Loss before tax | (8,035) | (6,335) | | Income tax expense | (80) | (853) | | Loss for the period | (8,115) | (7,188) | | Loss attributable to owners of the Company | (9,703) | (9,273) | | Non-controlling interests | 1,588 | 2,085 | | Basic loss per share (HK cents) | (4.74) | (4.79) | [Condensed Consolidated Statement of Comprehensive Income](index=3&type=section&id=Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) Despite a period loss of HK$8.115 million, foreign exchange gains led to a total comprehensive loss of HK$4.370 million, an improvement from the prior year Key Data from Condensed Consolidated Statement of Comprehensive Income | Metric | For the six months ended June 30, 2025 (HK$ thousand) | For the six months ended June 30, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Loss for the period | (8,115) | (7,188) | | Exchange differences on translating foreign operations | 3,745 | (3,426) | | Other comprehensive income for the period, net of tax | 3,745 | (3,426) | | Total comprehensive income for the period | (4,370) | (10,614) | | Attributable to owners of the Company | (7,260) | (11,233) | | Non-controlling interests | 2,890 | 619 | [Condensed Consolidated Statement of Financial Position](index=4&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) Total non-current assets slightly decreased, while total current assets increased due to higher receivables and cash, leading to a slight decline in net current assets and total equity Key Data from Condensed Consolidated Statement of Financial Position | Metric | As of June 30, 2025 (HK$ thousand) | As of December 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | **Non-current assets** | | | | Property, plant and equipment | 92,556 | 97,906 | | Intangible assets | 19,718 | 19,747 | | Investment properties | 1,858 | 1,863 | | Right-of-use assets | 11,550 | 11,751 | | Interest in an associate | 23,561 | 24,735 | | Deferred tax assets | 14,430 | 14,103 | | **Total non-current assets** | **163,673** | **170,105** | | **Current assets** | | | | Inventories | 4,201 | 3,736 | | Deposits, prepayments and other receivables | 4,700 | 1,284 | | Loan to an associate | 37,099 | 35,983 | | Restricted bank deposits | 3,826 | 153 | | Bank and cash balances | 78,204 | 73,412 | | **Total current assets** | **128,030** | **114,568** | | **Current liabilities** | | | | Accruals and other payables | 79,341 | 71,919 | | Contract liabilities | 6,736 | 2,952 | | Lease liabilities | 707 | 690 | | **Total current liabilities** | **86,784** | **75,561** | | **Net current assets** | **41,246** | **39,007** | | **Total assets less current liabilities** | **204,919** | **209,112** | | **Non-current liabilities** | | | | Provision for environmental restoration and rehabilitation | 4,780 | 4,645 | | Deferred tax liabilities | 15,519 | 15,119 | | Lease liabilities | 740 | 1,098 | | **Total non-current liabilities** | **21,039** | **20,862** | | **Net assets** | **183,880** | **188,250** | | **Total equity** | **183,880** | **188,250** | [Notes](index=6&type=section&id=Notes) [General Information](index=6&type=section&id=General%20Information) The company, incorporated in the Cayman Islands and listed in Hong Kong, primarily operates in coal mining - The Company is an investment holding company, with its subsidiaries primarily engaged in the production and sale of coal (the “**Coal Mining Business**”)[9](index=9&type=chunk) [Basis of Preparation and Accounting Policies](index=6&type=section&id=Basis%20of%20Preparation%20and%20Accounting%20Policies) These condensed consolidated financial statements adhere to HKEX Listing Rules and HKAS 34, maintaining consistency with prior year accounting policies - The condensed consolidated financial statements are prepared in accordance with the applicable disclosure requirements of Appendix D2 to the Rules Governing the Listing of Securities on the Stock Exchange and Hong Kong Accounting Standard 34 'Interim Financial Reporting' issued by the Hong Kong Institute of Certified Public Accountants[10](index=10&type=chunk) [Adoption of New and Revised Hong Kong Financial Reporting Standards](index=7&type=section&id=Adoption%20of%20New%20and%20Revised%20Hong%20Kong%20Financial%20Reporting%20Standards) The Group adopted HKAS 21 (Amendment) with no material impact, and future new standards are also not expected to significantly affect financial performance - During the interim period, the Group has initially adopted HKAS 21 (Amendment) 'Lack of Exchangeability', which has no significant impact on the Group's condensed consolidated financial position and performance and/or disclosures in these condensed consolidated financial statements for the current and prior periods[11](index=11&type=chunk) - The directors anticipate that the adoption of new and revised HKFRSs (including HKFRS 18 'Presentation and Disclosure in Financial Statements', etc.) that have been issued but are not yet effective will not have a significant impact on the Group's consolidated financial performance and position[12](index=12&type=chunk)[13](index=13&type=chunk) [Revenue](index=8&type=section&id=Revenue) The Group's revenue, solely from coal mining, decreased by 30.4% to HK$61.635 million, with all external customers based in China Revenue from Coal Mining Business | Business Segment | For the six months ended June 30, 2025 (HK$ thousand) | For the six months ended June 30, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Coal Mining Business | 61,635 | 88,602 | - Revenue decreased by approximately **30.4%** compared to the prior period, with all external customers located in the People's Republic of China[14](index=14&type=chunk) [Segment Information](index=8&type=section&id=Segment%20Information) The Group operates solely in coal mining, with all revenue and most non-current assets located in mainland China - The Group has only one reportable operating segment, the **Coal Mining Business**[15](index=15&type=chunk) Revenue and Non-current Assets by Geographical Location | Region | Revenue for the six months ended June 30, 2025 (HK$ thousand) | Revenue for the six months ended June 30, 2024 (HK$ thousand) | Non-current assets as of June 30, 2025 (HK$ thousand) | Non-current assets as of December 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | :--- | :--- | | Hong Kong | – | – | 13,890 | 14,719 | | China (excluding Hong Kong) | 61,635 | 88,602 | 111,792 | 116,548 | | **Consolidated Total** | **61,635** | **88,602** | **125,682** | **131,267** | Revenue Contribution from Major Customers | Customer | For the six months ended June 30, 2025 (HK$ thousand) | For the six months ended June 30, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Customer A | 40,297 | 16,797 | | Customer B | N/A | 22,231 | | Customer C | – | 11,609 | | Customer D | – | 9,170 | | Customer E | – | 9,089 | [Finance Costs](index=9&type=section&id=Finance%20Costs) Finance costs for the period totaled HK$37 thousand, solely from interest expenses on lease liabilities Composition of Finance Costs | Item | For the six months ended June 30, 2025 (HK$ thousand) | For the six months ended June 30, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Interest on lease liabilities | 37 | – | [Loss Before Tax](index=9&type=section&id=Loss%20Before%20Tax) Loss before tax was primarily impacted by reduced interest income, amortization, cost of sales, depreciation, directors' emoluments, and net exchange and asset disposal losses Key Items Affecting Loss Before Tax | Item | For the six months ended June 30, 2025 (HK$ thousand) | For the six months ended June 30, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Interest income | (184) | (713) | | Amortisation of intangible assets | 596 | 973 | | Cost of inventories sold | 34,442 | 50,495 | | Depreciation of property, plant and equipment | 7,318 | 7,886 | | Depreciation of investment properties | 58 | 59 | | Depreciation of right-of-use assets | 488 | 202 | | Directors' emoluments | 1,509 | 1,663 | | Net exchange (gain)/loss | (1,116) | 786 | | Net loss on disposal/write-off of property, plant and equipment | 393 | 31 | | Short-term lease expenses | 92 | 77 | [Income Tax Expense](index=9&type=section&id=Income%20Tax%20Expense) Income tax expense was HK$80 thousand, mainly deferred tax, with no provision for Hong Kong or PRC taxes due to a lack of assessable profits Income Tax Expense | Item | For the six months ended June 30, 2025 (HK$ thousand) | For the six months ended June 30, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Deferred tax | 80 | 853 | - No provision for Hong Kong profits tax and PRC enterprise income tax was made for the period as the Group's Hong Kong and PRC subsidiaries did not generate any assessable profits[22](index=22&type=chunk) [Dividends](index=10&type=section&id=Dividends) The Board does not recommend an interim dividend for the six months ended June 30, 2025 - The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025[23](index=23&type=chunk) [Loss Per Share](index=10&type=section&id=Loss%20Per%20Share) Basic loss per share was HK4.74 cents, slightly lower than the prior period, with diluted loss per share being identical due to no dilutive shares Loss Per Share | Metric | For the six months ended June 30, 2025 (HK cents) | For the six months ended June 30, 2024 (HK cents) | | :--- | :--- | :--- | | Basic loss per share | (4.74) | (4.79) | | Diluted loss per share | (4.74) | (4.79) | - Basic loss per share is calculated based on the loss attributable to owners of the Company of approximately **HK$9,703,000** and the weighted average number of ordinary shares in issue of approximately **204,616,916** shares for the period[24](index=24&type=chunk) - Diluted loss per share is equal to basic loss per share as there were no potential dilutive ordinary shares in issue during the period[25](index=25&type=chunk) [Property, Plant and Equipment, Intangible Assets and Right-of-Use Assets](index=10&type=section&id=Property,%20Plant%20and%20Equipment,%20Intangible%20Assets%20and%20Right-of-Use%20Assets) No property, plant, and equipment additions were made, and impairment assessments on coal mining non-financial assets resulted in no recognized losses - During the six months ended June 30, 2025, the Group made no additions to property, plant and equipment (six months ended June 30, 2024: approximately **HK$1,745,000**)[26](index=26&type=chunk) - Based on the impairment assessment review for the six months ended June 30, 2025, no impairment loss was recognized on the carrying amounts of non-financial assets of the Group's coal mining business segment[27](index=27&type=chunk) - The recoverable amount of the coal mining cash-generating unit was determined by reference to a valuation prepared by an independent valuation company[28](index=28&type=chunk) [Interest in an Associate and Loan to an Associate](index=11&type=section&id=Interest%20in%20an%20Associate%20and%20Loan%20to%20an%20Associate) The Group holds a 52% interest in a copper mining associate, retaining significant influence despite control issues, and has provided an unsecured, interest-free loan of HK$39.397 million Interest in an Associate and Loan | Item | As of June 30, 2025 (HK$ thousand) | As of December 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Cost of investment in an associate | 26,764 | 26,764 | | Share of post-acquisition loss and other comprehensive income | (3,203) | (2,029) | | **Interest in an associate** | **23,561** | **24,735** | | Loan to an associate | 37,099 | 35,983 | - The Group completed the acquisition of a **52%** equity interest in Laos Taishan Jiujiu Investment and Trade Co., Ltd. on August 26, 2024, which is primarily engaged in copper mining in Laos[30](index=30&type=chunk) - Despite the non-cooperation from the associate's business partners, the Company's directors believe the Group retains significant influence over Taishan Jiujiu and accounts for it using the equity method in accordance with HKAS 28[31](index=31&type=chunk) - The principal amount of the loan to the associate is **RMB36,000,000** (approximately **HK$39,397,000**), which is unsecured, interest-free, and repayable on demand[32](index=32&type=chunk) [Trade Receivables](index=12&type=section&id=Trade%20Receivables) Net trade receivables were zero due to full provision for expected credit losses, with the company requiring upfront payments or offering 90-day credit to major clients Trade Receivables | Item | As of June 30, 2025 (HK$ thousand) | As of December 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Trade receivables | 1,208 | 1,174 | | Expected credit losses on trade receivables | (1,208) | (1,174) | | **Net amount** | **–** | **–** | - The Group requires customers to make upfront payments, but grants **90-day** credit terms to certain major customers[32](index=32&type=chunk) [Share Capital](index=13&type=section&id=Share%20Capital) The company's authorized share capital is 10 billion shares (HK$0.1 par), with 204,616,916 shares issued, reflecting a 2024 share placement and consolidation Movements in Share Capital | Item | Number of Ordinary Shares | HK$ thousand | | :--- | :--- | :--- | | **Authorised Share Capital** | | | | January 1, 2024 (par value HK$0.01 per share) | 100,000,000,000 | 1,000,000 | | Share consolidation | (90,000,000,000) | – | | December 31, 2024 and June 30, 2025 (par value HK$0.1 per share) | 10,000,000,000 | 1,000,000 | | **Issued and Fully Paid Share Capital** | | | | January 1, 2024 (par value HK$0.01 per share) | 1,723,477,166 | 17,235 | | Placement of new shares | 322,692,000 | 3,227 | | Share consolidation | (1,841,552,250) | – | | December 31, 2024 and June 30, 2025 (par value HK$0.1 per share) | 204,616,916 | 20,462 | - On March 4, 2024, the Company completed the placement of **322,692,000** new shares at a placing price of **HK$0.185** per placing share to not less than six placees, raising net proceeds of approximately **HK$59,101,000**[33](index=33&type=chunk) - Pursuant to an ordinary resolution passed by the Company's shareholders on October 23, 2024, every ten issued and unissued ordinary shares of HK$0.01 each were consolidated into one consolidated share of HK$0.1 each, effective from October 25, 2024[33](index=33&type=chunk) [Business and Financial Review](index=14&type=section&id=Business%20and%20Financial%20Review) [Business Overview](index=14&type=section&id=Business%20Overview) Total revenue decreased by 30.4% to HK$61.635 million, and loss for the period expanded to HK$8.115 million, with coal mining as the sole business segment Financial Data from Business Overview | Metric | For the six months ended June 30, 2025 (HK$ thousand) | For the six months ended June 30, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Total revenue | 61,635 | 88,602 | | Loss for the period | (8,115) | (7,188) | | Loss attributable to owners of the Company | (9,703) | (9,273) | - For the six months ended June 30, 2025 and 2024, the **Coal Mining Business** was the Group's sole business segment[34](index=34&type=chunk) [Coal Mining Business](index=14&type=section&id=Coal%20Mining%20Business) Coal mining output and revenue declined due to cautious sales, stricter regulations, and lower prices, while the company updated licenses and continues resource assessment Coal Mining Business Production and Sales | Metric | For the six months ended June 30, 2025 | For the six months ended June 30, 2024 | | :--- | :--- | :--- | | Coal production volume (tonnes) | 332,000 | 447,000 | | Coal sales volume (tonnes) | 327,000 | 434,000 | - Inner Mongolia Jinyuanli has successfully renewed its safety production license (valid until September 24, 2026) and mining license (valid until October 26, 2034)[35](index=35&type=chunk) - Both production and sales volumes and revenue of the coal mining business decreased compared to the prior period, primarily due to preliminary assessment of remaining coal resources, increasingly stringent coal industry regulations leading to cautious sales order approaches, and a slight decrease in coal sales prices[36](index=36&type=chunk) - Compliance with evolving PRC government policies for the coal mining industry (e.g., smart production and environmental policies) and the continuous decline in recoverable coal resources pose operational challenges for the coal mining business, with ongoing capital expenditure and operating costs expected to continue rising[37](index=37&type=chunk) [Impairment Assessment Review](index=15&type=section&id=Impairment%20Assessment%20Review) Impairment assessment on coal mining non-financial assets resulted in no recognized losses, with cash flow forecasts based on 900,000 tonnes annual output and average unit selling price - The Company's management has conducted impairment assessment reviews on the carrying amounts of property, plant and equipment, intangible assets, and right-of-use assets under non-financial assets of the coal mining business cash-generating unit for each reporting period[38](index=38&type=chunk) Key Assumptions for Cash Flow Forecast of Coal Mining Cash-Generating Unit | Key Assumption | June 30, 2024 | December 31, 2024 | June 30, 2025 | | :--- | :--- | :--- | :--- | | Forecast annual coal output (until expiry of commercial license) | 900,000 tonnes | 900,000 tonnes | 900,000 tonnes | | Average unit selling price per tonne of coal (including VAT) | 2024: RMB188 | 2025: RMB191 | 2025: RMB191 | | | 2025: RMB193 | 2026: RMB196 | 2026: RMB196 | | | After 2026: Growth with inflation rate | After 2027: Growth with inflation rate | After 2027: Growth with inflation rate | | Inflation rate | 2.5% | 2.5% | 2.5% | - Based on the impairment assessment review for the six months ended June 30, 2025, no impairment loss was recognized on the carrying amounts of non-financial assets of the Group's coal mining business segment[40](index=40&type=chunk) [Selling and Distribution Expenses](index=16&type=section&id=Selling%20and%20Distribution%20Expenses) Selling and distribution expenses decreased by HK$0.378 million to HK$1.503 million, mainly due to lower coal sales volume Selling and Distribution Expenses | Metric | For the six months ended June 30, 2025 (HK$ thousand) | For the six months ended June 30, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Selling and distribution expenses | 1,503 | 1,881 | - The decrease in selling and distribution expenses was primarily due to the reduced coal sales volume during the period[41](index=41&type=chunk) [Administrative Expenses](index=17&type=section&id=Administrative%20Expenses) Administrative expenses decreased by HK$10.934 million to HK$33.744 million, driven by lower staff and professional fees, with ongoing cost-saving initiatives Administrative Expenses | Metric | For the six months ended June 30, 2025 (HK$ thousand) | For the six months ended June 30, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Administrative expenses | 33,744 | 44,678 | - The decrease in administrative expenses was mainly due to reduced staff costs and professional fees; the Company's management will continue to implement cost-saving measures[43](index=43&type=chunk) [Finance Costs](index=17&type=section&id=Finance%20Costs) Finance costs for the period totaled HK$37 thousand, exclusively from interest expenses on lease agreements - For the six months ended June 30, 2025, approximately **HK$37,000** represented interest expenses arising from lease agreements[44](index=44&type=chunk) [Loss for the Period](index=17&type=section&id=Loss%20for%20the%20Period) The Group's loss for the period expanded to HK$8.115 million, with loss attributable to owners reaching HK$9.703 million Loss for the Period | Metric | For the six months ended June 30, 2025 (HK$ thousand) | For the six months ended June 30, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Loss for the period | (8,115) | (7,188) | | Loss attributable to owners of the Company | (9,703) | (9,273) | [Investment in Copper Mine in the Lao People's Democratic Republic ('Laos')](index=17&type=section&id=Investment%20in%20Copper%20Mine%20in%20the%20Lao%20People's%20Democratic%20Republic%20('Laos')) The Group acquired a 52% stake in a Laos copper mine, retaining significant influence despite control issues, and has initiated legal action to secure financial data and management changes - The Group completed the acquisition of a **52%** equity interest in Laos Taishan Jiujiu Investment and Trade Co., Ltd. on August 26, 2024, which is primarily engaged in copper mining in Laos[46](index=46&type=chunk) - The Group provided a shareholder loan to Taishan Jiujiu with a principal amount of **RMB36,000,000** (approximately **HK$39,397,000**)[46](index=46&type=chunk) - Due to non-cooperation from Taishan Jiujiu's legal representative and business partners, the Group is unable to exercise control but retains significant influence, and has engaged Laotian legal counsel to initiate legal proceedings to obtain financial information and replace management[47](index=47&type=chunk)[48](index=48&type=chunk)[49](index=49&type=chunk) [Liquidity and Financial Resources](index=18&type=section&id=Liquidity%20and%20Financial%20Resources) The Group holds HK$82.030 million in cash and restricted deposits, with no borrowings, a zero gearing ratio, and a current ratio of 1.48 Key Indicators of Liquidity and Financial Resources | Metric | As of June 30, 2025 (HK$ thousand) | As of December 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Total restricted bank deposits and bank and cash balances | 82,030 | 73,565 | | Borrowings | Nil | Nil | | Gearing ratio | Zero | Zero | | Current ratio | 1.48 | 1.52 | [Foreign Exchange Risk](index=19&type=section&id=Foreign%20Exchange%20Risk) Sales and purchases are mainly in RMB, and despite recent exchange rate fluctuations, management sees no significant adverse impact, with hedging to be considered if needed - The Group's sales and purchases are primarily transacted in RMB, while its books are recorded in HKD; recent fluctuations in the RMB to HKD exchange rate are not considered by management to have a significant adverse impact on the Group's consolidated financial position at present[53](index=53&type=chunk) - The Group currently has no foreign exchange hedging policy; the Company's management will continue to monitor foreign exchange risk and consider hedging significant foreign exchange exposures when necessary[53](index=53&type=chunk) [Acquisition and Disposal of Significant Subsidiaries, Associates and Joint Ventures](index=19&type=section&id=Acquisition%20and%20Disposal%20of%20Significant%20Subsidiaries,%20Associates%20and%20Joint%20Ventures) The Group did not acquire or dispose of any significant subsidiaries, associates, or joint ventures during the period - For the six months ended June 30, 2025, the Group did not acquire or dispose of any significant subsidiaries, associates, or joint ventures[54](index=54&type=chunk) [Material Investments](index=19&type=section&id=Material%20Investments) The Group did not purchase, sell, or hold any material investments during the period - For the six months ended June 30, 2025, the Group did not purchase, sell, or hold any material investments[55](index=55&type=chunk) [Contingent Liabilities](index=19&type=section&id=Contingent%20Liabilities) The Group had no material contingent liabilities as of June 30, 2025 - As of June 30, 2025, the Group had no material contingent liabilities[56](index=56&type=chunk) [Capital Commitments](index=19&type=section&id=Capital%20Commitments) Contracted but unprovided capital expenditure for property, plant and equipment significantly increased to HK$7.558 million Capital Commitments | Item | As of June 30, 2025 (HK$ thousand) | As of December 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Capital expenditure contracted but not provided for property, plant and equipment | 7,558 | 1,213 | [Employees](index=19&type=section&id=Employees) The Group had 426 full-time employees, with staff costs (including directors' emoluments) decreasing to HK$29.662 million Employees and Staff Costs | Metric | As of June 30, 2025 | As of December 31, 2024 | | :--- | :--- | :--- | | Number of full-time employees | 426 | 425 | | Staff costs (including directors' emoluments) | HK$29,662 thousand | HK$39,240 thousand | - Staff remuneration is determined based on qualifications, job nature, performance, work experience, current market levels, and contributions to the Group[58](index=58&type=chunk) [Outlook and Strategies](index=20&type=section&id=Outlook%20and%20Strategies) The Group is diversifying and seeking new mining investments to counter industry challenges, while addressing Laos copper mine issues and enhancing shareholder value through cost and capital management - The PRC government's increasingly stringent regulations and policies for the coal mining industry restrict the Group's working capital and reduce the profitability of its coal mining business, while the Inner Mongolia coal mining area 958, having operated for over ten years, faces challenges of aging machinery and diminishing coal resources[59](index=59&type=chunk) - To diversify and build a more robust business portfolio, the Group is actively seeking suitable investment opportunities in the local and international mining and mineral industries[59](index=59&type=chunk) - The Group will take all necessary actions to effectively address unforeseen challenges encountered in its Laos mining investment, protect its interests, and closely monitor progress[59](index=59&type=chunk) - Looking ahead, the Group will continue to implement further cost control measures and improve capital management to strengthen its financial position, embrace future business opportunities, with the aim of expanding its business scope and enhancing overall development, ultimately increasing shareholder value[59](index=59&type=chunk) [Other Information](index=20&type=section&id=Other%20Information) [Audit Committee](index=20&type=section&id=Audit%20Committee) The Audit Committee, composed of three independent non-executive directors, reviews financial information, oversees risk management, and has reviewed these interim financial statements - The Company's Audit Committee comprises three independent non-executive directors, whose primary duties include reviewing the Group's financial information and overseeing the financial reporting system, risk management, and internal control systems[60](index=60&type=chunk) - The Company's unaudited interim financial statements and interim report for the six months ended June 30, 2025, have been reviewed by the Audit Committee[60](index=60&type=chunk) [Corporate Governance](index=20&type=section&id=Corporate%20Governance) Corporate governance practices comply with HKEX Listing Rules, except for the combined Chairman and CEO roles, with suitable candidates being sought to fill vacancies - The Company has complied with the applicable code provisions of the Corporate Governance Code for the six months ended June 30, 2025, except for code provision C.2.1, which stipulates that the roles of chairman and chief executive officer should be separate and not performed by the same individual[61](index=61&type=chunk) - The Company is currently identifying suitable candidates to fill the vacancies for Chairman and Chief Executive Officer[61](index=61&type=chunk) [Standard Code for Securities Transactions by Directors](index=21&type=section&id=Standard%20Code%20for%20Securities%20Transactions%20by%20Directors) The Company adopted the Standard Code for Securities Transactions by Directors, with all directors confirming compliance during the reporting period - The Company has adopted the Standard Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix C3 of the Listing Rules, and all directors have confirmed their compliance with the required standards throughout the six months ended June 30, 2025[62](index=62&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=21&type=section&id=Purchase,%20Sale%20or%20Redemption%20of%20the%20Company's%20Listed%20Securities) Neither the Company nor its subsidiaries purchased, sold, or redeemed any listed securities during the six months ended June 30, 2025 - For the six months ended June 30, 2025, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[63](index=63&type=chunk) [Dividends](index=21&type=section&id=Dividends) The Board does not recommend an interim dividend for the six months ended June 30, 2025 - The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025[64](index=64&type=chunk) [Publication of Interim Results Announcement and Interim Report](index=21&type=section&id=Publication%20of%20Interim%20Results%20Announcement%20and%20Interim%20Report) The interim results announcement is available on HKEX and company websites, with the interim report to be dispatched to shareholders and published online soon - This interim results announcement is published on the HKEX website (www.hkexnews.hk) and the Company's website (www.grandocean65.com) respectively[65](index=65&type=chunk) - The Company's interim report for the six months ended June 30, 2025, containing all information required by the Listing Rules, will be dispatched to the Company's shareholders and published on the aforementioned websites in due course[65](index=65&type=chunk)

Financial Performance - Revenue for the six months ended June 30, 2025, was HKD 9,516,000, representing a 17.4% increase from HKD 8,105,000 in the same period of 2024[15]. - Gross profit for the period was HKD 9,516,000, compared to HKD 3,650,000 in 2024, indicating a significant improvement in profitability[15]. - The company reported a profit before tax of HKD 2,154,000, a turnaround from a loss of HKD 15,547,000 in the previous year[15]. - Basic earnings per share for the period was HKD 0.35, compared to a loss per share of HKD 2.54 in the same period last year[15]. - The total comprehensive income for the period was HKD 2,154,000, a substantial recovery from a loss of HKD 15,324,000 in the previous year[15]. - The company reported a net profit of HKD 2,154,000 for the six months ended June 30, 2025, compared to a loss of HKD 15,324,000 in the same period last year[18]. - The profit attributable to equity holders for the same period was approximately HKD 2,200,000, a turnaround from a loss of HKD 15,300,000 in the prior year[68]. Revenue Streams - Other income and gains increased significantly to HKD 2,875,000 from HKD 86,000, showcasing enhanced revenue streams[15]. - Revenue from financial services increased to HKD 6,629,000, a 88.5% increase compared to HKD 3,528,000 in the same period last year[23]. - The financial services segment generated revenue of HKD 6,806,000, up from HKD 3,787,000 in the previous year, marking an increase of 79.5%[25]. - The corporate consulting business generated revenue of approximately HKD 2,700,000, down from HKD 3,400,000 in the previous year, with segment profit of approximately HKD 2,200,000 compared to HKD 2,900,000[74]. - The group’s digital business recorded zero revenue for the six months ended June 30, 2025, a decrease from HKD 900,000 in the same period of 2024, with a segment loss of approximately HKD 200,000[75]. Expenses and Costs - Operating and administrative expenses decreased to HKD 9,733,000 from HKD 12,531,000, reflecting a reduction of approximately 22.6%[15]. - The overall operating costs decreased by approximately HKD 7,000,000, reflecting the group's commitment to improving operational efficiency and competitiveness[68]. - The company incurred financing costs of HKD 494,000 for the six months ended June 30, 2025, a decrease from HKD 6,833,000 in the previous year[25][34]. - The company reported an interest expense of HKD 11,829,000 related to convertible bonds for the year ended December 31, 2024[18]. Assets and Liabilities - Non-current assets increased to HKD 26,957,000 (approximately 49.9% growth) from HKD 17,974,000 year-over-year[16]. - Current assets rose to HKD 22,936,000, up 24.5% from HKD 18,427,000 in the previous year[16]. - Total liabilities decreased significantly, with current liabilities dropping to HKD 8,948,000 from HKD 13,241,000, a reduction of 32.3%[16]. - The company's net assets increased to HKD 39,653,000, representing an 89.1% increase from HKD 20,963,000 in the previous year[17]. - The company's total liabilities decreased to HKD 10,240,000 as of June 30, 2025, down from HKD 15,438,000 as of December 31, 2024, representing a reduction of 33.0%[27]. Cash Flow - Cash and cash equivalents at the end of the period increased to HKD 8,977,000 from HKD 6,375,000, a rise of 40.5%[19]. - Operating cash flow showed improvement, with a net cash outflow of HKD 1,443,000 compared to HKD 16,747,000 in the previous year, indicating a reduction in cash burn[19]. - As of June 30, 2025, the company recorded cash and bank balances of approximately HKD 9,000,000, an increase from HKD 6,400,000 as of December 31, 2024[93]. Strategic Focus and Future Outlook - The company is focused on improving operational efficiency and reducing costs to enhance profitability moving forward[15]. - Future outlook includes potential market expansion and the introduction of new products to drive revenue growth[15]. - The company plans to continue expanding its digital business and financial services, focusing on enhancing customer contracts and service offerings[22]. - The company is strategically expanding into the U.S. market to broaden its client base and enhance potential revenue growth in its financial services division[84]. - The company aims to enhance its digital business by leveraging AI-driven technologies and is cautiously exploring opportunities related to Web 3.0[82]. Shareholder Information - The company reported a total of 604,396,000 shares issued and fully paid as of June 30, 2025, with a par value of HKD 60,440,000[60]. - The company completed the issuance of 30,860,000 shares at HKD 0.10 per share to Ocean Evergreen Limited on June 25, 2025[60]. - As of June 30, 2025, the company had a total of 825,256,000 shares outstanding, with a total par value of HKD 82,526,000[60]. - The company’s major shareholder, 汇朗, holds 174,421,666 shares and 910,000,000 related shares, totaling 1,084,421,666 shares, which represents 131.40% of the issued share capital[111]. - Ocean Evergreen Limited holds 120,860,000 shares, representing 14.65% of the issued share capital as of June 30, 2025[111]. Corporate Governance - The company has established an audit committee responsible for reviewing interim and annual performance, risk management, and internal control systems[121]. - The chairman and CEO positions are held by the same individual, which deviates from the corporate governance code, but the board believes there is sufficient power balance due to independent directors[120]. - The company has applied the principles of the GEM listing rules corporate governance code and has complied with all applicable code provisions, with noted deviations[119].

[Financial Summary](index=1&type=section&id=Financial%20Summary) This section summarizes key financial performance indicators for the six months ended June 30, 2025, showing revenue and profit declines but a narrowed loss As of June 30, 2025, for the Six Months Ended Financial Summary | Metric | June 30, 2025 (CNY) | June 30, 2024 (CNY) | Change | | :--- | :--- | :--- | :--- | | Revenue | CNY 6.575 billion | CNY 7.243 billion | Decreased 9.2% | | Gross Profit | CNY 542 million | CNY 684 million | Decreased 20.8% | | Gross Profit Margin | 8.2% | 9.4% | Decreased 1.2 percentage points | | Loss attributable to owners of the Company | CNY 1.277 billion | CNY 2.609 billion | Loss narrowed | | Loss for the Period | CNY 1.318 billion | CNY 2.826 billion | Loss narrowed | | Basic Loss Per Share | CNY 43.29 cents | CNY 88.45 cents | Loss narrowed | [Interim Results](index=2&type=section&id=Interim%20Results) This section presents the condensed consolidated income statement and statement of financial position, highlighting key financial performance and position [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=2&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For the six months ended June 30, 2025, the Group's revenue decreased by 9.2% to CNY 6.575 billion, gross profit decreased by 20.8% to CNY 542 million, and loss for the period significantly narrowed by 53.3% to CNY 1.318 billion, driven by substantial reductions in net other losses, inventory write-downs, selling and marketing expenses, general and administrative expenses, impairment losses, finance costs, and income tax Key Data from Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income | Metric | June 30, 2025 (CNY thousand) | June 30, 2024 (CNY thousand) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 6,574,793 | 7,243,098 | -9.2% | | Cost of Sales | (6,032,984) | (6,558,788) | -8.0% | | Gross Profit | 541,809 | 684,310 | -20.8% | | Net Other Losses | (168,358) | (773,927) | -78.2% | | Inventory Write-downs | (362,559) | (898,094) | -59.6% | | Selling and Marketing Expenses | (193,514) | (208,381) | -7.1% | | General and Administrative Expenses | (275,496) | (334,123) | -17.6% | | Impairment Losses on Trade and Other Receivables and Contract Assets | (213,269) | (310,479) | -31.3% | | Finance Costs | (398,608) | (515,381) | -22.7% | | Loss Before Tax | (1,097,171) | (2,503,727) | -56.2% | | Income Tax | (220,395) | (322,588) | -31.7% | | Loss for the Period | (1,317,566) | (2,826,315) | -53.3% | | Loss Attributable to Owners of the Company | (1,277,203) | (2,609,388) | -51.1% | | Basic Loss Per Share (CNY cents) | (43.29) | (88.45) | -51.0% | [Condensed Consolidated Statement of Financial Position](index=5&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the Group's total non-current assets were CNY 16.937 billion, total current assets were CNY 83.343 billion, net current liabilities were CNY 20.000 billion, and net liabilities were CNY 6.707 billion, indicating persistent liquidity pressure Key Data from Condensed Consolidated Statement of Financial Position | Metric | June 30, 2025 (CNY thousand) | December 31, 2024 (CNY thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Total Non-current Assets | 16,936,776 | 17,566,884 | -3.6% | | Total Current Assets | 83,342,799 | 87,330,239 | -4.6% | | Total Current Liabilities | (103,343,086) | (106,316,667) | -2.8% | | Net Current Liabilities | (20,000,287) | (18,986,428) | +5.3% | | Total Assets Less Current Liabilities | (3,063,511) | (1,419,544) | +115.8% | | Total Non-current Liabilities | (3,643,836) | (3,967,057) | -8.2% | | Net Liabilities | (6,707,347) | (5,386,601) | +24.5% | | Total Deficit Attributable to Owners of the Company | (7,439,536) | (6,151,221) | +20.9% | [Notes to the Condensed Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed notes on the financial statements, covering preparation basis, accounting policies, revenue, expenses, and financial position items [1 Basis of Preparation](index=7&type=section&id=1%20Basis%20of%20Preparation) The Group's financial statements for the six months ended June 30, 2025, are prepared in accordance with HKAS 34 and the Listing Rules, facing significant going concern uncertainties including net loss, substantial net current liabilities, maturing debt, a depressed property market, and offshore debt defaults, with the Board actively pursuing debt restructuring and liquidity improvement measures whose success remains uncertain - The Group incurred a **net loss of CNY 1.318 billion** for the six months ended June 30, 2025[12](index=12&type=chunk) - As of June 30, 2025, the Group had **net current liabilities of CNY 20.000 billion** and **net liabilities of CNY 6.707 billion**[12](index=12&type=chunk) - Bank and other loans of **CNY 7.110 billion** and offshore senior notes of **CNY 14.146 billion** are due within the next twelve months, while cash and cash equivalents amounted to only **CNY 288 million**[12](index=12&type=chunk) - The property market remains depressed, with a significant decline in pre-sales, and the Henan market's recovery will take time, leading to short-term business pressure[12](index=12&type=chunk) - The Company announced a **suspension of payments to all offshore creditors** on June 23, 2023, and is currently undergoing an offshore debt restructuring plan[13](index=13&type=chunk) - The debt restructuring plan includes seeking a comprehensive solution, negotiating loan renewals with lenders, accelerating property sales and collections, strictly controlling costs, limiting capital expenditures, and resolving outstanding litigations[13](index=13&type=chunk)[14](index=14&type=chunk) - The Board believes that, assuming successful implementation of all plans, the Group will have sufficient working capital for continued operation, but multiple significant uncertainties remain regarding their achievement[14](index=14&type=chunk)[15](index=15&type=chunk) [2 Principal Accounting Policies](index=10&type=section&id=2%20Principal%20Accounting%20Policies) The condensed consolidated financial statements are prepared on a historical cost basis, with certain assets and liabilities measured at fair value, and the first-time application of HKAS 21 (Amendment) "Lack of Exchangeability" did not result in significant accounting policy changes - The condensed consolidated financial statements are prepared on a historical cost basis, except for investment properties, debt and equity securities investments, derivative financial instruments, and biological assets, which are measured at fair value[16](index=16&type=chunk)[18](index=18&type=chunk) - HKAS 21 (Amendment) "Lack of Exchangeability" was first applied in this interim period but did not result in significant changes to accounting policies or financial position[17](index=17&type=chunk) [3 Revenue and Segment Reporting](index=11&type=section&id=3%20Revenue%20and%20Segment%20Reporting) The Group's principal businesses are property development, property leasing, and hotel operations; for the six months ended June 30, 2025, total revenue decreased by 9.2% year-over-year to CNY 6.575 billion, with property sales revenue down 12.2% and hotel operations revenue down 4.0%, and the Group operates in a single segment with revenue and operating profit primarily derived from China Revenue from Contracts with Customers by Major Product or Service Line | Revenue Source | June 30, 2025 (CNY thousand) | June 30, 2024 (CNY thousand) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Property Sales | 5,941,183 | 6,769,445 | -12.2% | | Revenue from Hotel Operations | 162,014 | 168,750 | -4.0% | | Others | 445,505 | 275,323 | +61.8% | | **Total Revenue from Contracts with Customers** | **6,548,702** | **7,213,518** | **-9.2%** | | Rental Income from Investment Properties | 20,566 | 26,056 | -21.1% | | Rental Income from Properties Held for Sale | 5,525 | 3,524 | +56.8% | | **Total Revenue from Other Sources** | **26,091** | **29,580** | **-11.8%** | | **Total Revenue** | **6,574,793** | **7,243,098** | **-9.2%** | - The Group operates in a **single operating segment**, primarily relying on property development performance, with revenue and operating profit mainly derived from China[23](index=23&type=chunk)[24](index=24&type=chunk) [4 Other Income and Net Other Losses](index=13&type=section&id=4%20Other%20Income%20and%20Net%20Other%20Losses) For the six months ended June 30, 2025, the Group's other income increased by 79.6% year-over-year to CNY 9.663 million, primarily driven by increased government grants, while net other losses significantly decreased by 78.2% to CNY 168 million, mainly due to the absence of a substantial goodwill impairment loss present in the prior period Other Income and Net Other Losses | Item | June 30, 2025 (CNY thousand) | June 30, 2024 (CNY thousand) | YoY Change (%) | | :--- | :--- | :--- | :--- | | **Other Income** | | | | | Government Grants | 7,917 | 3,046 | +159.9% | | Interest Income | 704 | 2,237 | -68.5% | | Others | 1,042 | 97 | +974.2% | | **Total Other Income** | **9,663** | **5,380** | **+79.6%** | | **Net Other Losses** | | | | | Goodwill Impairment Loss | – | (610,244) | -100.0% | | Accrued Penalties | (136,128) | (149,726) | -9.1% | | Net Gain/(Loss) on Disposal of Subsidiaries | 7,190 | (3,857) | N/A | | Fair Value Change of Biological Assets Less Costs to Sell | (11,125) | 3,603 | N/A | | Others | (28,291) | (11,721) | +141.4% | | **Total Net Other Losses** | **(168,358)** | **(773,927)** | **-78.2%** | [5 Loss Before Tax](index=14&type=section&id=5%20Loss%20Before%20Tax) For the six months ended June 30, 2025, the Group's finance costs decreased by 22.7% year-over-year to CNY 399 million, primarily due to reduced interest on bank and other borrowings, partially offset by increased interest accrued on customer prepayments, while cost of properties sold decreased by 10.8% to CNY 5.558 billion Finance Costs and Other Items | Item | June 30, 2025 (CNY thousand) | June 30, 2024 (CNY thousand) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Interest on Bank and Other Borrowings | 936,345 | 1,076,735 | -13.0% | | Interest on Lease Liabilities | 4,198 | 6,518 | -35.6% | | Interest Accrued on Customer Prepayments | 320,172 | 255,267 | +25.4% | | Less: Interest Expenses Capitalized in Properties Under Development | (862,107) | (823,139) | +4.7% | | **Finance Costs** | **398,608** | **515,381** | **-22.7%** | | Amortization | 4,717 | 4,717 | 0.0% | | Depreciation Expense – Owned Property, Plant and Equipment | 187,101 | 196,384 | -4.7% | | Depreciation Expense – Right-of-use Assets | 3,070 | 3,194 | -3.8% | | Cost of Properties Sold | 5,557,994 | 6,230,593 | -10.8% | [6 Income Tax](index=15&type=section&id=6%20Income%20Tax) For the six months ended June 30, 2025, the Group's total income tax decreased by 31.7% year-over-year to CNY 220 million, primarily due to reductions in PRC corporate income tax and deferred tax, with PRC corporate income tax at 25%, land appreciation tax at progressive rates of 30% to 60%, and withholding tax at 5% to 10% Income Tax Components | Tax Category | June 30, 2025 (CNY thousand) | June 30, 2024 (CNY thousand) | YoY Change (%) | | :--- | :--- | :--- | :--- | | **Current Tax** | | | | | PRC Corporate Income Tax | 103,658 | 184,095 | -43.7% | | PRC Land Appreciation Tax | 170,935 | 161,581 | +5.8% | | **Total Current Tax** | **274,593** | **345,676** | **-20.6%** | | **Deferred Tax** | | | | | PRC Corporate Income Tax | (71,103) | (31,760) | +123.9% | | PRC Land Appreciation Tax | 16,905 | 8,672 | +94.9% | | **Total Deferred Tax** | **(54,198)** | **(23,088)** | **+134.7%** | | **Total Income Tax** | **220,395** | **322,588** | **-31.7%** | - PRC subsidiaries are subject to Corporate Income Tax at a rate of **25%**[30](index=30&type=chunk) - PRC Land Appreciation Tax is levied at progressive rates from **30% to 60%**, with exemptions for sales of ordinary standard residential properties[31](index=31&type=chunk) - Hong Kong subsidiaries are subject to **5% to 10% withholding tax** on dividends distributed by PRC subsidiaries and interest on intercompany balances[32](index=32&type=chunk) [7 Loss Per Share](index=16&type=section&id=7%20Loss%20Per%20Share) For the six months ended June 30, 2025, the Group's basic loss per share was CNY 43.29 cents, a significant narrowing from CNY 88.45 cents in the prior period, and diluted loss per share was the same as basic loss per share due to the anti-dilutive nature of deemed ordinary shares resulting from the loss for the period Loss Per Share | Metric | June 30, 2025 (CNY) | June 30, 2024 (CNY) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Loss Attributable to Ordinary Equity Holders of the Company | (1,277,203,000) | (2,609,388,000) | -51.1% | | Weighted Average Number of Ordinary Shares | 2,950,066,090 | 2,950,066,090 | 0.0% | | Basic Loss Per Share (CNY cents) | (43.29) | (88.45) | -51.0% | | Diluted Loss Per Share (CNY cents) | (43.29) | (88.45) | -51.0% | [8 Trade and Other Receivables](index=17&type=section&id=8%20Trade%20and%20Other%20Receivables) As of June 30, 2025, the Group's total trade and other receivables amounted to CNY 6.546 billion, an 11.8% increase from December 31, 2024, with increases observed in other receivables, amounts due from joint ventures, associates, and non-controlling interests Trade and Other Receivables | Item | June 30, 2025 (CNY thousand) | December 31, 2024 (CNY thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Trade and Bills Receivables, Net of Loss Allowance | 165,516 | 169,590 | -2.4% | | Other Receivables | 3,017,735 | 2,406,206 | +25.4% | | Amounts Due from Joint Ventures | 548,809 | 521,334 | +5.3% | | Amounts Due from Associates | 625,510 | 600,838 | +4.1% | | Amounts Due from Entities Controlled by the Ultimate Controlling Shareholder | 264,586 | 261,943 | +1.0% | | Amounts Due from Non-controlling Interests | 1,923,692 | 1,894,525 | +1.5% | | **Total** | **6,545,848** | **5,854,436** | **+11.8%** | Ageing Analysis of Trade and Bills Receivables | Ageing | June 30, 2025 (CNY thousand) | December 31, 2024 (CNY thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Within 3 months | 38,162 | 61,291 | -37.7% | | 3 to 6 months | 16,349 | 10,193 | +60.4% | | 6 to 12 months | 25,345 | 27,229 | -6.9% | | Over 1 year | 85,660 | 70,877 | +20.9% | | **Total** | **165,516** | **169,590** | **-2.4%** | [9 Trade and Other Payables](index=19&type=section&id=9%20Trade%20and%20Other%20Payables) As of June 30, 2025, the Group's total trade and other payables amounted to CNY 54.362 billion, a 1.4% increase from December 31, 2024, with interest payable significantly increasing by 24.9%, while amounts due to entities controlled by the ultimate controlling shareholder and non-controlling interests decreased Trade and Other Payables | Item | June 30, 2025 (CNY thousand) | December 31, 2024 (CNY thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Trade and Bills Payables | 28,867,546 | 28,908,254 | -0.1% | | Other Payables and Accrued Expenses | 12,391,376 | 11,824,370 | +4.8% | | Interest Payable | 3,939,178 | 3,151,193 | +24.9% | | Amounts Due to Joint Ventures | 754,174 | 776,695 | -2.9% | | Amounts Due to Associates | 61,276 | 59,826 | +2.4% | | Amounts Due to Entities Controlled by the Ultimate Controlling Shareholder | 2,619,320 | 2,913,878 | -10.2% | | Amounts Due to Non-controlling Interests | 3,315,832 | 3,412,199 | -2.7% | | Amounts Due to Shareholders with Significant Influence over the Group | 780,309 | 759,863 | +2.7% | | Other Tax Payables | 1,633,258 | 1,793,457 | -8.8% | | **Total** | **54,362,269** | **53,599,735** | **+1.4%** | Ageing Analysis of Trade and Bills Payables | Ageing | June 30, 2025 (CNY thousand) | December 31, 2024 (CNY thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Within 3 months | 7,139,609 | 7,462,231 | -4.3% | | 3 to 6 months | 1,001,812 | 1,479,354 | -32.3% | | 6 to 12 months | 2,646,676 | 1,787,499 | +48.0% | | Over 12 months | 18,079,449 | 18,179,170 | -0.5% | | **Total** | **28,867,546** | **28,908,254** | **-0.1%** | [10 Dividends](index=20&type=section&id=10%20Dividends) No dividends were payable to equity holders for either of the interim periods - No dividends were declared by the Company for the six months ended June 30, 2025, or the corresponding period in 2024[43](index=43&type=chunk) [Management Discussion and Analysis](index=21&type=section&id=Management%20Discussion%20and%20Analysis) This section provides an overview of the Group's financial performance, operational review, and market outlook [Financial Review](index=21&type=section&id=Financial%20Review) For the six months ended June 30, 2025, the Group's contracted sales decreased by 1.2% year-over-year to CNY 4.44 billion, while contracted sales area increased by 5.0%; loss attributable to owners of the Company was CNY 1.277 billion, significantly narrowed from the prior period, mainly due to reduced impairment provisions and a smaller decline in gross profit margin relative to cost expenses, with the Group's liquidity remaining under pressure, net borrowings of approximately CNY 22.702 billion, and a net gearing ratio of (338.5)% [Overall Performance](index=21&type=section&id=Overall%20Performance) This section provides an overview of the Group's contracted sales, cash position, net borrowings, project deliveries, and unrecognised property sales Contracted Sales Data for the Six Months Ended June 30, 2025 | Metric | June 30, 2025 | June 30, 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Total Property Contracted Sales | CNY 4.44 billion | CNY 4.494 billion | -1.2% | | Total Contracted Sales Area | 707,896 sq.m. | 674,187 sq.m. | +5.0% | | Average Selling Price Per Square Meter | CNY 6,278 | CNY 6,679 | -6.0% | - As of June 30, 2025, total cash, cash equivalents, and restricted bank deposits were approximately **CNY 1.068 billion**, a decrease from **CNY 1.488 billion** as of December 31, 2024[44](index=44&type=chunk) - As of June 30, 2025, total net borrowings were approximately **CNY 22.702 billion**, a slight increase from **CNY 22.550 billion** as of December 31, 2024[44](index=44&type=chunk) - For the six months ended June 30, 2025, **26 property projects were delivered** (2024: 54 projects), and **95 projects were under construction** (2024: 143 projects)[44](index=44&type=chunk) - Loss attributable to owners of the Company was approximately **CNY 1.277 billion**, a significant narrowing from approximately **CNY 2.609 billion** in the prior period, mainly due to reduced impairment provisions for inventories and receivables, and the decline in recognised property revenue and gross profit margin not fully offsetting costs and expenses[45](index=45&type=chunk) - As of June 30, 2025, unrecognised property sales amounted to approximately **CNY 24.427 billion** (2024: CNY 34.464 billion), with a corresponding gross profit of approximately **CNY 1.726 billion** (2024: CNY 3.096 billion), expected to be recognised over the next two to three years[46](index=46&type=chunk) - Unrecognised property sales from joint ventures and associates amounted to approximately **CNY 1.760 billion** (2024: CNY 3.363 billion), with a corresponding gross profit of approximately **CNY 172 million** (2024: negative CNY 74 million)[46](index=46&type=chunk) [Revenue](index=22&type=section&id=Revenue) This section details the Group's revenue performance and its drivers - The Group's revenue decreased by **9.2%** from approximately **CNY 7.243 billion** in the prior period to approximately **CNY 6.575 billion** in the current period, primarily impacted by the macroeconomic downturn and a subdued property market[46](index=46&type=chunk) [Cost of Sales](index=22&type=section&id=Cost%20of%20Sales) This section describes the changes in the Group's cost of sales - Cost of sales decreased by **8.0%** from approximately **CNY 6.559 billion** in the prior period to approximately **CNY 6.033 billion** in the current period, mainly due to a reduction in recognised area[47](index=47&type=chunk) [Revenue from Property Sales](index=22&type=section&id=Revenue%20from%20Property%20Sales) This section focuses on the revenue generated from property sales and its contributing factors - Revenue from property sales decreased by **12.2%** from approximately **CNY 6.769 billion** in the prior period to approximately **CNY 5.941 billion** in the current period[48](index=48&type=chunk) - Recognised area decreased by **7.3%** from **1,066,183 square meters** in the prior period to **988,251 square meters** in the current period[48](index=48&type=chunk) [Revenue from Hotel Operations](index=22&type=section&id=Revenue%20from%20Hotel%20Operations) This section details the revenue from hotel operations - Revenue from hotel operations decreased by **4.0%** from approximately **CNY 169 million** in the prior period to approximately **CNY 162 million** in the current period, primarily impacted by the sluggish macroeconomic environment[48](index=48&type=chunk) [Gross Profit](index=23&type=section&id=Gross%20Profit) This section analyzes the Group's gross profit and gross profit margin - Gross profit decreased by **20.8%** from approximately **CNY 684 million** in the prior period to approximately **CNY 542 million** in the current period[49](index=49&type=chunk) - Gross profit margin decreased by **1.2 percentage points** from **9.4%** in the prior period to **8.2%** in the current period[49](index=49&type=chunk) - Gross profit margin for property sales decreased by **1.6 percentage points** from **8.0%** in the prior period to **6.4%** in the current period, impacted by the macroeconomic downturn and a persistently subdued property market[49](index=49&type=chunk) [Selling and Marketing Expenses](index=23&type=section&id=Selling%20and%20Marketing%20Expenses) This section discusses the Group's selling and marketing expenses - Selling and marketing expenses decreased by **7.1%** from approximately **CNY 208 million** in the prior period to approximately **CNY 194 million** in the current period, mainly due to a reduction of approximately **CNY 12 million** in advertising and promotional expenses[49](index=49&type=chunk) - The ratio of selling and marketing expenses to revenue was approximately **2.9%** in the current period, consistent with the prior period[49](index=49&type=chunk) [General and Administrative Expenses](index=23&type=section&id=General%20and%20Administrative%20Expenses) This section analyzes the Group's general and administrative expenses - General and administrative expenses decreased by **17.5%** from approximately **CNY 334 million** in the prior period to approximately **CNY 275 million** in the current period, mainly due to reductions in depreciation and amortization, entertainment, travel and office expenses, and other miscellaneous expenses[50](index=50&type=chunk) - The ratio of general and administrative expenses to revenue was approximately **4.2%** in the current period, a decrease from approximately **4.6%** in the prior period[50](index=50&type=chunk) [Impairment Losses on Trade and Other Receivables and Contract Assets](index=23&type=section&id=Impairment%20Losses%20on%20Trade%20and%20Other%20Receivables%20and%20Contract%20Assets) This section details the impairment losses on receivables and contract assets - Impairment losses on trade and other receivables and contract assets for the six months ended June 30, 2025, were approximately **CNY 213 million**, a decrease of approximately **CNY 97 million** from approximately **CNY 310 million** in the prior period[50](index=50&type=chunk) [Finance Costs](index=24&type=section&id=Finance%20Costs) This section analyzes the Group's finance costs - Finance costs decreased by **22.7%** from approximately **CNY 515 million** in the prior period to approximately **CNY 399 million** in the current period, mainly due to a reduction of approximately **CNY 117 million** in interest expenses on borrowings[52](index=52&type=chunk) [Income Tax](index=24&type=section&id=Income%20Tax) This section discusses the Group's income tax expenses - Income tax decreased by **31.7%** from approximately **CNY 323 million** in the prior period to approximately **CNY 220 million** in the current period, mainly due to reduced income tax corresponding to lower recognised property sales revenue[52](index=52&type=chunk) [Loss for the Period](index=24&type=section&id=Loss%20for%20the%20Period) This section summarizes the Group's loss for the period - Loss for the six months ended June 30, 2025, was approximately **CNY 1.318 billion**, a decrease of approximately **CNY 1.509 billion** from approximately **CNY 2.826 billion** in the prior period[52](index=52&type=chunk) [Financial Resources and Utilisation](index=24&type=section&id=Financial%20Resources%20and%20Utilisation) This section provides an overview of the Group's cash position and dividend policy - As of June 30, 2025, cash and cash equivalents and restricted bank deposits amounted to approximately **CNY 1.068 billion**, a decrease from **CNY 1.488 billion** as of December 31, 2024[52](index=52&type=chunk) - The Company decided **not to declare an interim dividend** for the six months ended June 30, 2025[52](index=52&type=chunk) [Borrowings and Deposit Structure](index=25&type=section&id=Borrowings%20and%20Deposit%20Structure) This section details the Group's borrowing repayment profile and net gearing ratio Borrowing Repayment Period | Borrowing Type | Repayment Period | June 30, 2025 (CNY thousand) | December 31, 2024 (CNY thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Bank Borrowings | Within one year or repayable on demand | 5,746,171 | 5,654,871 | +1.6% | | | Over one year but not exceeding two years | 1,584,349 | 1,822,483 | -13.1% | | | Over two years but not exceeding five years | 714,810 | 796,698 | -10.3% | | | Over five years | 45,900 | 45,900 | 0.0% | | **Total Bank Borrowings** | | **8,091,230** | **8,319,952** | **-2.8%** | | Other Borrowings | Within one year | 1,364,170 | 1,364,170 | 0.0% | | | Over one year but not exceeding two years | 168,390 | 168,390 | 0.0% | | **Total Other Borrowings** | | **1,532,560** | **1,532,560** | **0.0%** | | Senior Notes | Within one year | 14,146,444 | 14,186,010 | -0.3% | | **Total Senior Notes** | | **14,146,444** | **14,186,010** | **-0.3%** | | **Total Borrowings** | | **23,770,234** | **24,038,522** | **-1.1%** | Net Borrowings and Net Gearing Ratio | Metric | June 30, 2025 (CNY thousand) | December 31, 2024 (CNY thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Total Borrowings | 23,770,234 | 24,038,522 | -1.1% | | Less: Cash and Cash Equivalents | (287,652) | (365,387) | -21.3% | | Less: Restricted Bank Deposits | (780,086) | (1,122,692) | -30.5% | | **Net Borrowings** | **22,702,496** | **22,550,443** | **+0.7%** | | Total Deficit | (6,707,347) | (5,386,601) | +24.5% | | **Net Gearing Ratio (%)** | **(338.5)%** | **(418.6)%** | **-80.1 percentage points** | [Pledge of Assets](index=26&type=section&id=Pledge%20of%20Assets) This section outlines the assets pledged as collateral for borrowings - As of June 30, 2025, properties, plant and equipment, etc., with a total carrying value of approximately **CNY 16.065 billion**, were pledged as collateral for bank credit facilities and other loans, a decrease from **CNY 17.521 billion** as of December 31, 2024[54](index=54&type=chunk) - Properties held for sale with a total carrying value of approximately **CNY 598 million** were pledged as collateral for joint venture loans, an increase from **CNY 424 million** as of December 31, 2024[54](index=54&type=chunk) - Pledged properties, plant and equipment of approximately **CNY 211 million** served as guarantees for associate loans[54](index=54&type=chunk) [Capital Commitments](index=26&type=section&id=Capital%20Commitments) This section details the Group's capital commitments - As of June 30, 2025, contracted commitments for property development amounted to approximately **CNY 4.723 billion**, a decrease from **CNY 5.775 billion** as of December 31, 2024[55](index=55&type=chunk) - Other expenditures and capital investments authorized but not yet contracted amounted to approximately **CNY 31.982 billion**, a decrease from **CNY 41.334 billion** as of December 31, 2024[55](index=55&type=chunk) [Contingent Liabilities](index=27&type=section&id=Contingent%20Liabilities) This section outlines the Group's contingent liabilities - As of June 30, 2025, guarantees for mortgage loans provided by banks to customers amounted to approximately **CNY 21.057 billion**, a decrease from **CNY 22.904 billion** as of December 31, 2024[56](index=56&type=chunk) - Guarantees for bank and other loans to joint ventures and associates amounted to approximately **CNY 1.509 billion**, a slight decrease from **CNY 1.536 billion** as of December 31, 2024[56](index=56&type=chunk) - For the six months ended June 30, 2025, the Company made **no significant investments, acquisitions, or disposals** of subsidiaries, associates, and joint ventures[56](index=56&type=chunk) - As of the date of the interim results announcement, the Company had **not received any acceleration notices** for outstanding senior notes under cross-default clauses[56](index=56&type=chunk) [Exchange Rate Risk](index=27&type=section&id=Exchange%20Rate%20Risk) This section describes the Group's exposure to exchange rate fluctuations - The Group's operations are primarily conducted in CNY, but it faces foreign exchange risk from **HKD-denominated bank deposits** and **USD-denominated senior notes**[56](index=56&type=chunk) [Interest Rate Risk](index=27&type=section&id=Interest%20Rate%20Risk) This section discusses the Group's exposure to interest rate changes - Some borrowings are at floating rates, and rising interest rates would increase interest costs; currently, **no derivative instruments are used to hedge interest rate risk**[57](index=57&type=chunk) [Operational Review](index=28&type=section&id=Operational%20Review) In the first half of 2025, China's economy showed stable improvement with GDP growing by 5.3% year-over-year and consumption contributing over 65%; Henan Province outperformed the national average with 5.7% GDP growth and strong industrial, consumption, and foreign trade performance; the national property market was characterized by "bottoming sales, investment pressure, and increasing differentiation," with declines in both sales area and value; Henan's property market showed a weak recovery, outperforming the national average with smaller sales declines, but still faced high inventory pressure and strained developer cash flows [Macroeconomic Landscape – Economic Aspects](index=28&type=section&id=Macroeconomic%20Landscape%20%E2%80%93%20Economic%20Aspects) This section provides an overview of the national and Henan provincial economic performance - In the first half of 2025, national GDP reached **CNY 66.0536 trillion**, growing by **5.3% year-over-year**, with consumption contributing over **65%** to economic growth[58](index=58&type=chunk) - Henan Province's GDP for the first half of the year was **CNY 3.16838 trillion**, growing by **5.7% year-over-year**, **0.4 percentage points higher** than the national growth rate[59](index=59&type=chunk) - Henan's economy is driven by "strengthening industrial chains, upgrading consumption, and breakthroughs in new quality productive forces," with **industry leading the nation**, a surge in consumption upgrades, and **strong counter-trend growth in foreign trade**[59](index=59&type=chunk) [Property Market](index=30&type=section&id=Property%20Market) This section analyzes the national and Henan provincial property market trends and policies - In the first half of 2025, national new commercial residential sales area decreased by **3.5% year-over-year**, sales value decreased by **5.5%**, and real estate development investment decreased by **11.2% year-over-year**[60](index=60&type=chunk) - Central and regulatory authorities continued to implement "stabilize the property market" policies, including **de-stocking, expanding demand, new models, and risk mitigation**, but market differentiation persisted[61](index=61&type=chunk)[62](index=62&type=chunk) - Henan Province's real estate development investment decreased by **8.5% year-over-year**, new commercial residential sales area decreased by **1.9% year-over-year**, and sales value decreased by **1.3%**, with its recovery strength leading the nation[63](index=63&type=chunk)[64](index=64&type=chunk) - Under supply-demand coordinated policies, Henan's property market expanded "trade-in" programs, optimized provident fund policies, utilized special bonds to support existing land revitalisation and commercial housing acquisition, advanced financing coordination mechanisms, and saw a **6.9% year-over-year increase in funds available to property developers**[64](index=64&type=chunk) - The Henan market still faces challenges and risks including **unresolved high inventory pressure**, strained property developer cash flows, and significant drag from the completion side[64](index=64&type=chunk) [Market Outlook](index=34&type=section&id=Market%20Outlook) In the second half of the year, national economic growth is expected to slow but remain resilient, with policy focus shifting to implementation and new quality productive forces becoming a new growth engine; the property market will continue to stabilize, with policies fully driving effective implementation, and high-quality projects in core cities presenting structural opportunities; Henan Province is expected to maintain its "growth higher than national average" trend, with property sales decline narrowing, but inventory pressure in third and fourth-tier cities and property developer cash flow recovery still require time [Macroeconomic Aspects](index=34&type=section&id=Macroeconomic%20Aspects) This section provides the outlook for the national and Henan provincial economies - National economic growth is expected to slow but remain resilient in the second half, with policy focus shifting from "strong stimulus" to "implementation," and existing fiscal tools and "anti-involution" reforms being key to breaking low inflation[65](index=65&type=chunk) - **New quality productive forces** (high-tech manufacturing + digital economy) and opening up of the service sector will form new growth engines[65](index=65&type=chunk) - Henan Province will focus on "stabilizing employment, enterprises, markets, and expectations," promoting "four stabilities" with 36 measures including dual-wheel drive of consumption and investment, traditional industry upgrading, and cultivation of new quality productive forces[66](index=66&type=chunk) - With the implementation of ultra-long-term special national bonds, urban village renovation, and other projects, Henan is expected to continue its trend of "**growth higher than the national average**"[66](index=66&type=chunk) [Property Market](index=36&type=section&id=Property%20Market) This section provides the outlook for the national and Henan provincial property markets - In the second half, governments at all levels will fully promote the effective implementation of existing policies, such as improving special bond acquisition of existing idle land and commercial housing, and increasing the use of housing coupons for urban village renovation[67](index=67&type=chunk) - The launch of high-quality projects is expected to drive stability in core city new home markets, but a comprehensive market stabilization still requires further policy efforts[67](index=67&type=chunk) - In the second half, Henan Province will thoroughly implement policies, coordinate supply and demand efforts, increase financial support, deepen "trade-in" programs, accelerate special bond acquisition, and achieve inventory revitalization and quality upgrades[68](index=68&type=chunk) - Henan's property market is expected to follow a "policy support → core stabilization → full-area recovery" path in the second half of 2025, with the **full-year sales decline expected to narrow to within 1%**[68](index=68&type=chunk) - The strength of investment recovery depends on the speed of existing policy effectiveness, with Zhengzhou and Luoyang leading the recovery, but **inventory pressure in third and fourth-tier cities remains unresolved**, and property developer cash flow recovery still requires time[68](index=68&type=chunk) [Corporate Governance Practices](index=38&type=section&id=Corporate%20Governance%20Practices) This section confirms the Company's compliance with corporate governance codes and related practices - For the six months ended June 30, 2025, the Company has **complied with all code provisions** of Appendix C1 "Corporate Governance Code" of the HKEX Listing Rules[69](index=69&type=chunk) - The Company has adopted the "Model Code for Securities Transactions by Directors of Listed Issuers" in Appendix C3 of the Listing Rules and confirms that **all Directors complied with the code** during the period[70](index=70&type=chunk) - Ms. Yang Feifei and Dr. Sun Yuyang were appointed as members of the Company's Nomination Committee effective **July 1, 2025**[71](index=71&type=chunk) - For the six months ended June 30, 2025, **neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities**[72](index=72&type=chunk) [Share Option Scheme](index=39&type=section&id=Share%20Option%20Scheme) This section provides information on the Company's share option scheme - For the six months ended June 30, 2025, the Company **did not grant any share options** under the Share Option Scheme, nor did it grant any options to service providers or consultants[73](index=73&type=chunk) - As of June 30, 2025, **112,926,256 share options** were available for grant under the scheme, representing approximately **3.72% of the Company's issued share capital**[73](index=73&type=chunk) [Events After Reporting Period](index=39&type=section&id=Events%20After%20Reporting%20Period) This section confirms the absence of significant events after the reporting period - **No significant events** that would materially affect the Group's operations and financial performance occurred after June 30, 2025[74](index=74&type=chunk) [Review of Interim Results by Audit Committee](index=40&type=section&id=Review%20of%20Interim%20Results%20by%20Audit%20Committee) This section states that the audit committee reviewed the interim results, which are unaudited - The Company's Audit Committee has discussed and reviewed the **unaudited interim condensed consolidated financial statements** for the six months ended June 30, 2025, with management[75](index=75&type=chunk) - The condensed consolidated interim results presented here have **not been reviewed or audited by the Company's auditor**[75](index=75&type=chunk) [Interim Dividend](index=40&type=section&id=Interim%20Dividend) This section states the decision regarding interim dividends - The Board decided **not to declare an interim dividend** for the six months ended June 30, 2025 (2024: nil)[76](index=76&type=chunk) [Publication of Interim Results on HKEX and Company Websites](index=40&type=section&id=Publication%20of%20Interim%20Results%20on%20HKEX%20and%20Company%20Websites) This section informs about the publication of interim results and report - This interim results announcement has been published on the Company's website (http://www.jianye.com.cn) and the HKEX website (http://www.hkexnews.hk)[77](index=77&type=chunk) - The Company's interim report for the six months ended June 30, 2025, will be dispatched to shareholders and published on the aforementioned websites in due course[77](index=77&type=chunk)

Company Information The company's profile includes its board composition, contact details, and listing information on the HKEX GEM [Board of Directors and Committee Composition](index=6&type=section&id=Board%20of%20Directors%20and%20Committee%20Composition) The board comprises three executive and four independent non-executive directors, and committee memberships have changed - The board includes three executive directors (Ms. Yan Ping, Mr. Liu Yaoguang, Mr. Xiao Jiansheng) and four independent non-executive directors (Ms. Deng Xin, Ms. Lian Jingyu, Ms. Jiang Caiying, Mr. Geng Chuanlong)[12](index=12&type=chunk) - Ms. Shen Jindan was removed as an independent non-executive director and a member of the audit and nomination committees on **June 6, 2025**[12](index=12&type=chunk) - Mr. Geng Chuanlong was appointed as an independent non-executive director and a member of the audit, remuneration, and nomination committees on **August 29, 2025**[12](index=12&type=chunk) [Company Contact and Listing Information](index=6&type=section&id=Company%20Contact%20and%20Listing%20Information) The company is registered in the Cayman Islands, with main operations in China and Hong Kong, audited by Union Power CPA Limited, and listed on HKEX GEM with stock code 8406 - The company is registered in the Cayman Islands, with its principal place of business in Hong Kong at Unit 304, 3/F, Tung Wai Commercial Building, 43 Queen's Road East, Hong Kong[13](index=13&type=chunk) - The auditor is Union Power CPA Limited[13](index=13&type=chunk) - The company is listed on the GEM of The Stock Exchange of Hong Kong Limited, stock code **8406**[14](index=14&type=chunk) Unaudited Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income This section presents the unaudited condensed consolidated statement of profit or loss and other comprehensive income for the period [Profit or Loss and Comprehensive Income Overview](index=8&type=section&id=Profit%20or%20Loss%20and%20Comprehensive%20Income%20Overview) For the six months ended June 30, 2025, revenue decreased by 12.4% to RMB 109,263 thousand, but profit for the period significantly increased by 362.4% to RMB 4,069 thousand, driven by higher other income and lower finance costs Key Profit or Loss Data (Six Months Ended June 30) | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | YoY 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% | | Total comprehensive income for the period | 3,293 | 1,842 | +78.8% | | Basic earnings per share (RMB cents) | 0.30 | 0.08 | +275.0% | - Profit for the period significantly increased by **362.4%**, primarily driven by a substantial increase in other income and gains (**+449.8%**) and a significant reduction in finance costs (**-87.1%**)[15](index=15&type=chunk) Unaudited Condensed Consolidated Statement of Financial Position This section presents the unaudited condensed consolidated statement of financial position, detailing assets, liabilities, and equity [Balance Sheet Overview](index=9&type=section&id=Balance%20Sheet%20Overview) As of June 30, 2025, total assets slightly decreased, but net current assets and net assets significantly increased, reflecting improved liquidity and growth in shareholders' equity Key Financial Position Data (As of June 30) | Indicator | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | Change (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Non-current assets | 11,710 | 11,934 | -224 | -1.9% | | Current assets | 182,404 | 190,525 | -8,121 | -4.3% | | Total assets | 194,114 | 202,459 | -8,345 | -4.1% | | Current liabilities | 51,155 | 91,763 | -40,608 | -44.2% | | Non-current liabilities | 3,358 | 3,558 | -200 | -5.6% | | Net assets | 139,601 | 107,138 | +32,463 | +30.3% | | Share capital | 12,180 | 10,059 | +2,121 | +21.1% | | Reserves | 127,421 | 97,079 | +30,342 | +31.2% | | Total equity | 139,601 | 107,138 | +32,463 | +30.3% | - Current liabilities significantly decreased by **44.2%**, leading to a substantial improvement in liquidity, with net current assets increasing from RMB 98,762 thousand to **RMB 131,249 thousand**[17](index=17&type=chunk) - Net assets and total equity both increased by over **30%**, primarily due to increases in share capital and reserves[17](index=17&type=chunk) Unaudited Condensed Consolidated Statement of Changes in Equity This section presents the unaudited condensed consolidated statement of changes in equity, outlining movements in share capital and reserves [Analysis of Changes in Equity](index=11&type=section&id=Analysis%20of%20Changes%20in%20Equity) For the six months ended June 30, 2025, total equity increased to RMB 139,601 thousand, mainly due to increased share capital and share premium from share issuance, and profit for the period, despite a decrease in foreign currency translation reserve Key Equity Movement Data (Six Months Ended June 30) | Indicator | January 1, 2025 (RMB thousands) | Share Issue (RMB thousands) | Profit for the Period (RMB thousands) | Other Comprehensive Expense (RMB thousands) | June 30, 2025 (RMB thousands) | | :--- | :--- | :--- | :--- | :--- | :--- | | Share capital | 10,059 | 2,121 | – | – | 12,180 | | Share premium | 79,109 | 27,572 | – | – | 106,681 | | Statutory reserve | 9,567 | (523) | – | – | 9,044 | | Foreign currency translation reserve | 2,499 | – | – | (776) | 1,723 | | Retained profits | (11,525) | – | 4,069 | – | (7,456) | | Total equity | 107,138 | 29,693 | 4,069 | (776) | 139,601 | - Share issuance contributed **RMB 29,693 thousand** to the increase in equity, serving as the primary driver for this period's equity growth[19](index=19&type=chunk) - Profit for the period contributed **RMB 4,069 thousand**, but foreign currency translation reserve decreased by **RMB 776 thousand** due to exchange differences[19](index=19&type=chunk) Unaudited Condensed Consolidated Statement of Cash Flows This section presents the unaudited condensed consolidated statement of cash flows, summarizing cash movements from operating, investing, and financing activities [Cash Flow Overview](index=12&type=section&id=Cash%20Flow%20Overview) For the six months ended June 30, 2025, the company experienced a net cash outflow from operating activities of RMB 21,430 thousand, but positive cash flows from investing and financing activities resulted in a net increase in cash and cash equivalents of RMB 18,497 thousand, with a period-end cash balance of RMB 74,766 thousand Key Cash Flow Data (Six Months Ended June 30) | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (RMB thousands) | | :--- | :--- | :--- | :--- | | Net cash (used in) / generated from operating activities | (21,430) | 2,291 | -23,721 | | Net cash generated from investing activities | 12,623 | 16,850 | -4,227 | | Net cash generated from / (used in) financing activities | 27,304 | (4,387) | +31,691 | | Net increase in cash and cash equivalents | 18,497 | 14,754 | +3,743 | | Cash and cash equivalents at end of period | 74,766 | 72,039 | +2,727 | - Net cash flow from operating activities shifted from a net inflow in the prior period to a net outflow of **RMB 21,430 thousand**, primarily due to changes in working capital[20](index=20&type=chunk) - Net cash inflow from financing activities amounted to **RMB 27,304 thousand**, mainly from proceeds of share issuance, significantly improving the overall cash position[20](index=20&type=chunk) Notes to the Unaudited Condensed Consolidated Financial Statements This section provides detailed notes to the unaudited condensed consolidated financial statements, covering various accounting policies and disclosures [1. General Information](index=13&type=section&id=1.%20General%20Information) China Oral Industry Group Holdings Limited was incorporated in the Cayman Islands in 2015, listed on HKEX GEM in 2017, and primarily engages in inflatable product manufacturing and sales, dental clinic services, dental product sales, and yarn and polyester fiber sales in China - The company was incorporated in the Cayman Islands on **November 3, 2015**, and listed on the GEM of The Stock Exchange of Hong Kong Limited on **December 7, 2017**[21](index=21&type=chunk)[22](index=22&type=chunk) - The Group's principal activities include the manufacture and sale of inflatable products, provision of dental clinic services and sale of dental-related products, and sale of yarn and polyester fiber[23](index=23&type=chunk) - The company's functional currency is HKD, but the condensed consolidated financial statements are presented in RMB due to its principal operations being in China[23](index=23&type=chunk) [2. Basis of Presentation](index=14&type=section&id=2.%20Basis%20of%20Presentation) These interim financial statements are prepared in accordance with Hong Kong Financial Reporting Standards, using the historical cost convention, and the HKAS 21 amendment "Lack of Exchangeability" was first applied this period with no material impact - The unaudited condensed consolidated financial statements are prepared in accordance with Hong Kong Financial Reporting Standards and the historical cost convention[24](index=24&type=chunk)[25](index=25&type=chunk) - The amendment to HKAS 21 "Lack of Exchangeability" was first applied in the current period but had no material impact on the Group's results and financial position for the current and prior periods[25](index=25&type=chunk) [3. Estimates](index=14&type=section&id=3.%20Estimates) Management is required to make estimates and assumptions regarding the carrying amounts of assets and liabilities when preparing financial statements, which are continuously reviewed, and significant judgments and uncertainties made this period are consistent with the prior year - Management is required to make estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources, and these are continuously reviewed[26](index=26&type=chunk) - The key sources of significant judgment and estimation uncertainty made in the current period are the same as those applied to the consolidated financial statements for the year ended **December 31, 2024**[26](index=26&type=chunk) [4. Financial Risk Management and Financial Instruments](index=15&type=section&id=4.%20Financial%20Risk%20Management%20and%20Financial%20Instruments) The Group faces interest rate, credit, and liquidity risks, but there have been no significant changes in risk management policies or liquidity management practices since the last year-end, and the carrying amounts of receivables and payables approximate their fair values - The Group is exposed to interest rate risk, credit risk, and liquidity risk[27](index=27&type=chunk) - There have been no significant changes in risk management policies or liquidity management policies since the year-end[28](index=28&type=chunk)[29](index=29&type=chunk) - The carrying amounts of trade and other receivables and payables approximate their fair values[30](index=30&type=chunk) [5. Segment Information](index=15&type=section&id=5.%20Segment%20Information) The Group's business is divided into three segments: inflatable products, dental clinics, and yarn and polyester. As of June 30, 2025, inflatable products remain the primary revenue source, but dental clinic and yarn and polyester businesses have shown increased revenue and performance contributions, with a significant improvement in the gross margin of the yarn and polyester business - The Group's business is divided into three segments: inflatable products business, dental clinic business, and yarn and polyester business[32](index=32&type=chunk) Segment Revenue and Results (Six Months Ended June 30) | Segment | 2025 Revenue (RMB thousands) | 2024 Revenue (RMB thousands) | Revenue Change (%) | 2025 Results (RMB thousands) | 2024 Results (RMB thousands) | 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 (As of June 30) | Segment | 2025 Assets (RMB thousands) | 2024 Assets (RMB thousands) | Assets Change (%) | 2025 Liabilities (RMB thousands) | 2024 Liabilities (RMB thousands) | Liabilities 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% | 54,513 | 95,321 | -42.8% | [Geographical Information](index=19&type=section&id=Geographical%20Information) All of the Group's operations and non-current assets (excluding goodwill) are located in China and Hong Kong, with revenue widely distributed across China, North America, Asia, Europe, Australia and Oceania, the Middle East, and Central and South America, with North America and Asia being significant markets - All of the Group's operations and non-current assets (excluding goodwill) are located in China and Hong Kong, thus no geographical analysis is presented[37](index=37&type=chunk) Revenue by Geographical Segment (Six Months Ended June 30) | Region | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | China | 31,462 | 30,651 | +811 | +2.6% | | Europe | 5,688 | 5,637 | +51 | +0.9% | | Australia and Oceania | 702 | 817 | -115 | -14.1% | | North America | 45,837 | 78,594 | -32,757 | -41.7% | | Asia | 24,679 | 7,600 | +17,079 | +224.7% | | Middle East | 600 | 248 | +352 | +141.9% | | Central and South America | 295 | 1,113 | -818 | -73.5% | | Total | 109,263 | 124,660 | -15,397 | -12.4% | [6. Revenue](index=19&type=section&id=6.%20Revenue) For the six months ended June 30, 2025, total revenue decreased by 12.4% year-on-year, with inflatable product sales revenue down 21.9%, but yarn and polyester sales revenue significantly increased by 51.3%, and dental clinic service revenue slightly rose by 1.55% Revenue from External Customers (Six Months Ended June 30) | Revenue Source | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Sale of inflatable products and related accessories | 79,698 | 103,126 | -23,428 | -22.7% | | Subcontracting income | 1,174 | 439 | +735 | +167.4% | | Provision of dental clinic services | 7,202 | 7,092 | +110 | +1.55% | | Sale of yarn and polyester | 21,189 | 14,003 | +7,186 | +51.3% | | Total | 109,263 | 124,660 | -15,397 | -12.4% | - The decrease in inflatable product sales revenue was the primary reason for the reduction in total revenue, partially offset by strong growth in yarn and polyester sales revenue[39](index=39&type=chunk) [7. Other Income or Gains](index=20&type=section&id=7.%20Other%20Income%20or%20Gains) Total other income and gains for the period significantly increased by 449.8% to RMB 6,895 thousand, primarily due to a net gain of RMB 6,551 thousand from the disposal of assets and liabilities classified as held for sale Other Income or Gains (Six Months Ended June 30) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Interest income from bank deposits | 272 | 263 | +9 | +3.4% | | Net exchange gain | – | 901 | -901 | -100.0% | | Grants and subsidies | 72 | 81 | -9 | -11.1% | | Net gain on disposal of assets and liabilities classified as held for sale | 6,551 | – | +6,551 | N/A | | Others | – | 9 | -9 | -100.0% | | Total | 6,895 | 1,254 | +5,641 | +449.8% | - A net gain of **RMB 6,551 thousand** from the disposal of assets and liabilities classified as held for sale was the main reason for the substantial increase in other income and gains this period[41](index=41&type=chunk) [8. Finance Costs](index=20&type=section&id=8.%20Finance%20Costs) Finance costs for the period significantly decreased by 87.1% to RMB 72 thousand, primarily due to reductions in interest on lease liabilities and bank borrowings Finance Costs (Six Months Ended June 30) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Interest on lease liabilities | 72 | 417 | -345 | -82.7% | | Interest on bank borrowings | – | 141 | -141 | -100.0% | | Total | 72 | 558 | -486 | -87.1% | - A reduction of **RMB 345 thousand** in interest on lease liabilities and **RMB 141 thousand** in interest on bank borrowings collectively led to a significant decrease in finance costs[42](index=42&type=chunk) [9. Income Tax Expense](index=21&type=section&id=9.%20Income%20Tax%20Expense) Income tax expense for the period significantly increased by 741.7% to RMB 2,281 thousand, primarily due to higher PRC enterprise income tax and Hong Kong profits tax, reflecting improved profitability Income Tax Expense (Six Months Ended June 30) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Hong Kong profits tax | 600 | 211 | +389 | +184.4% | | PRC enterprise income tax | 1,681 | 60 | +1,621 | +2701.7% | | Deferred tax | – | – | – | N/A | | Total | 2,281 | 271 | +2,010 | +741.7% | - PRC subsidiaries are subject to enterprise income tax at a rate of **25%**, while Hong Kong profits tax applies a two-tiered tax rate (**8.25%** and **16.5%**)[43](index=43&type=chunk)[44](index=44&type=chunk) [10. Profit for the Period](index=22&type=section&id=10.%20Profit%20for%20the%20Period) Profit for the period was RMB 4,069 thousand, a substantial increase of 362.4% from RMB 880 thousand in the prior period, mainly due to the combined effect of increased other income and reduced finance costs Profit for the Period and Key Deductions (Six Months Ended June 30) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Profit for the period | 4,069 | 880 | +3,189 | +362.4% | | Cost of inventories recognized as expense | 88,231 | 101,256 | -13,025 | -12.9% | | Depreciation of property, plant and equipment | 218 | 344 | -126 | -36.6% | | Depreciation of right-of-use assets | 621 | 541 | +80 | +14.8% | | Amortization of intangible assets | 1 | – | +1 | N/A | | Net exchange loss | 1,075 | – | +1,075 | N/A | | Total employee benefit expenses | 24,194 | 26,096 | -1,902 | -7.3% | - Total employee benefit expenses (including directors' emoluments) decreased by **7.3%** to **RMB 24,194 thousand**[46](index=46&type=chunk) [11. Earnings Per Share](index=22&type=section&id=11.%20Earnings%20Per%20Share) For the six months ended June 30, 2025, both basic and diluted earnings per share were RMB 0.30 cents, a significant increase of 275% from RMB 0.08 cents in the prior period, reflecting a substantial improvement in the company's profitability Earnings Per Share (Six Months Ended June 30) | Indicator | 2025 (RMB cents) | 2024 (RMB cents) | Change (RMB cents) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Basic earnings per share | 0.30 | 0.08 | +0.22 | +275.0% | | Diluted earnings per share | 0.30 | 0.08 | +0.22 | +275.0% | - The weighted average number of ordinary shares used to calculate basic earnings per share was **1,339,028 thousand shares**, an increase from the prior period[47](index=47&type=chunk) [12. Dividends](index=23&type=section&id=12.%20Dividends) The Board does not recommend the payment of any interim dividend for the six months ended June 30, 2025, consistent with the prior period - The Board does not recommend the payment of any interim dividend for the six months ended **June 30, 2025** (2024: nil)[48](index=48&type=chunk) [13. Property, Plant and Equipment](index=23&type=section&id=13.%20Property%2C%20Plant%20and%20Equipment) As of June 30, 2025, the carrying amount of property, plant and equipment was RMB 1,583 thousand, a decrease from RMB 1,787 thousand as of December 31, 2024, primarily due to depreciation expense Carrying Amount of Property, Plant and Equipment (As of June 30) | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | Change (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Total carrying amount | 1,583 | 1,787 | -204 | -11.4% | - Total depreciation expense for the period amounted to **RMB 218 thousand**[49](index=49&type=chunk) [14. Intangible Assets](index=23&type=section&id=14.%20Intangible%20Assets) During the period, the Group paid approximately RMB 35 thousand for the acquisition of intangible assets, with no such expenditure in the prior period - During the period, the Group paid approximately **RMB 35 thousand** for the acquisition of intangible assets (2024: nil)[50](index=50&type=chunk) [15. Trade Receivables](index=24&type=section&id=15.%20Trade%20Receivables) As of June 30, 2025, total trade receivables amounted to RMB 48,096 thousand, an increase of 42.4% from December 31, 2024, mainly due to increased receivables from the inflatable products and yarn and polyester businesses Trade Receivables (Net of Loss Allowance) (As of June 30) | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | Change (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Inflatable products business | 27,850 | 15,235 | +12,615 | +82.8% | | Dental clinic business | 10,436 | 13,937 | -3,501 | -25.1% | | Yarn and polyester business | 11,844 | 6,641 | +5,203 | +78.3% | | Loss allowance | (2,034) | (2,038) | +4 | -0.2% | | Total | 48,096 | 33,775 | +14,321 | +42.4% | Ageing Analysis of Trade Receivables (As of June 30) | Ageing | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | 0–30 days | 8,217 | 20,537 | | 31–60 days | 15,497 | 3,932 | | 61–90 days | 11,366 | 1,821 | | 91–120 days | 5,808 | 4,080 | | 121–365 days | 7,208 | 3,405 | | Total | 48,096 | 33,775 | - Credit terms generally range from **0 to 270 days**, and no interest is charged on overdue receivables[51](index=51&type=chunk) [16. Trade and Other Payables](index=25&type=section&id=16.%20Trade%20and%20Other%20Payables) As of June 30, 2025, total trade and other payables amounted to RMB 32,258 thousand, a significant decrease of 33.4% from December 31, 2024, primarily due to reductions in trade payables, accrued salaries and other benefits, refund liabilities, and other payables Trade and Other Payables (As of June 30) | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | Change (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Trade payables | 10,232 | 16,090 | -5,858 | -36.4% | | Accrued salaries and other benefits | 9,600 | 10,890 | -1,290 | -11.8% | | Deposits received for assets and liabilities classified as held for sale | – | 1,000 | -1,000 | -100.0% | | Refund liabilities | – | 3,363 | -3,363 | -100.0% | | Other payables and accrued expenses | 12,426 | 17,072 | -4,646 | -27.2% | | Total | 32,258 | 48,415 | -16,157 | -33.4% | Ageing Analysis of Trade Payables (As of June 30) | Ageing | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | 0–30 days | 4,365 | 9,145 | | 31–60 days | 1,696 | 3,682 | | 61–90 days | 1,366 | 1,693 | | 91–120 days | 2,104 | 881 | | 121–365 days | 655 | 454 | | Over 365 days | 46 | 235 | | Total | 10,232 | 16,090 | [17. Share Capital](index=26&type=section&id=17.%20Share%20Capital) As of June 30, 2025, the company's issued share capital increased to 1,368,000 thousand shares, with a share capital amount of RMB 12,180 thousand, primarily due to the issuance of 228,000,000 ordinary shares on January 24, 2025 Share Capital Details (As of June 30) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Number of authorized ordinary shares (thousands) | 2,000,000 | 2,000,000 | | Number of issued and fully paid ordinary shares (thousands) | 1,368,000 | 1,140,000 | | Share capital (RMB thousands) | 12,180 | 10,059 | - 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**[54](index=54&type=chunk) Management Discussion and Analysis This section provides management's review and analysis of the company's business operations and financial performance for the period [Business Review and Outlook](index=27&type=section&id=Business%20Review%20and%20Outlook) Established in 2003, the Group has 20 years of experience in inflatable product design, manufacturing, and sales, and since 2023, it has diversified into dental clinic services and yarn and polyester sales through acquisitions - The Group was established in **2003** and has **20 years** of experience in the design, manufacture, and sale of inflatable products[56](index=56&type=chunk) - In **January 2023**, the Group expanded into dental clinic services and dental-related product sales through the acquisition of Hong Kong Shengke Holdings Limited[57](index=57&type=chunk) - In **January 2024**, the Group expanded into yarn and polyester sales through the acquisition of Hong Kong Taixing Holdings Limited[57](index=57&type=chunk) [Financial Review](index=27&type=section&id=Financial%20Review) Total revenue for the period decreased by 12.4% year-on-year, but profit for the period significantly increased by 362.4%, primarily due to a substantial increase in other income and a reduction in finance costs, despite a slight decrease in gross margin - The Group's revenue for the period was approximately **RMB 109,263 thousand**, a **12.4%** decrease compared to the corresponding period in 2024[58](index=58&type=chunk) - Profit for the period was approximately **RMB 4,069 thousand**, representing a **362.4%** increase compared to the corresponding period in 2024[65](index=65&type=chunk) [Revenue](index=27&type=section&id=Revenue) Total revenue for the period decreased by 12.4%, with inflatable product sales revenue down 21.9%, but yarn and polyester sales revenue significantly increased by 51.3%, and dental clinic service revenue slightly rose by 1.55% Revenue Changes by Business Segment (Six Months Ended June 30) | Business | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Inflatable products and related accessories | 80,872 | 103,565 | -22,693 | -21.9% | | Dental clinic services | 7,202 | 7,092 | +110 | +1.55% | | Yarn and polyester fiber | 21,189 | 14,003 | +7,186 | +51.3% | | Total revenue | 109,263 | 124,660 | -15,397 | -12.4% | [Cost of Sales](index=27&type=section&id=Cost%20of%20Sales) Cost of sales for the period was approximately RMB 90,141 thousand, a decrease of 11.0% from the prior period, consistent with the downward trend in revenue Cost of Sales Changes (Six Months Ended June 30) | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Cost of sales | 90,141 | 101,256 | -11,115 | -11.0% | [Gross Profit and Gross Margin](index=28&type=section&id=Gross%20Profit%20and%20Gross%20Margin) Gross profit for the period decreased by 18.3% to RMB 19,122 thousand, with an overall gross margin of 17.5%, down 1.3 percentage points from the prior period, mainly due to slight decreases in gross margins for inflatable products and dental clinic businesses, but a significant improvement in the yarn and polyester business Gross Profit and Gross Margin Changes (Six Months Ended June 30) | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Gross profit | 19,122 | 23,404 | -4,282 | -18.3% | | Overall gross margin | 17.5% | 18.8% | -1.3% | N/A | Gross Margin by Business Segment (Six Months Ended June 30) | Business | 2025 Gross Margin | 2024 Gross Margin | Change (percentage points) | | :--- | :--- | :--- | :--- | | Inflatable products business | 17.1% | 18.9% | -1.8% | | Dental clinic business | 42.0% | 43.1% | -1.1% | | Yarn and polyester sales business | 10.8% | 5.83% | +4.97% | [Other Income and Gains](index=28&type=section&id=Other%20Income%20and%20Gains) Total other income and gains for the period significantly increased by 449.8% to RMB 6,895 thousand, primarily due to a net gain of RMB 6,551 thousand from the disposal of assets and liabilities classified as held for sale Other Income and Gains Changes (Six Months Ended June 30) | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Total other income and gains | 6,895 | 1,254 | +5,641 | +449.8% | - The increase was mainly due to a net gain of approximately **RMB 6,551 thousand** from the disposal of assets and liabilities classified as held for sale, partially offset by the absence of a net foreign exchange gain of approximately **RMB 901 thousand**[61](index=61&type=chunk) [Distribution and Selling Expenses](index=28&type=section&id=Distribution%20and%20Selling%20Expenses) Total distribution and selling expenses for the period decreased by 39.8% to RMB 7,516 thousand Distribution and Selling Expenses Changes (Six Months Ended June 30) | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Distribution and selling expenses | 7,516 | 12,483 | -4,967 | -39.8% | [Administrative Expenses](index=28&type=section&id=Administrative%20Expenses) Administrative expenses for the period increased by 15.4% to RMB 12,079 thousand Administrative Expenses Changes (Six Months Ended June 30) | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Administrative expenses | 12,079 | 10,466 | +1,613 | +15.4% | [Finance Costs](index=28&type=section&id=Finance%20Costs) Finance costs for the period significantly decreased by 87.1% to RMB 72 thousand, primarily due to reductions in interest on lease liabilities and bank borrowings Finance Costs Changes (Six Months Ended June 30) | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Finance costs | 72 | 558 | -486 | -87.1% | - The decrease was mainly due to a reduction of approximately **RMB 345 thousand** in interest on lease liabilities and approximately **RMB 141 thousand** in interest on bank borrowings[64](index=64&type=chunk) [Profit for the Period](index=28&type=section&id=Profit%20for%20the%20Period) Profit for the period significantly increased by 362.4% to RMB 4,069 thousand Profit for the Period Changes (Six Months Ended June 30) | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Profit for the period | 4,069 | 880 | +3,189 | +362.4% | [Dividends](index=28&type=section&id=Dividends) The Board does not recommend the payment of any interim dividend for this period, consistent with the prior period - The Board does not recommend the payment of any interim dividend for this period (2024: nil)[66](index=66&type=chunk) [Liquidity, Financial Resources, Capital Structure and Gearing Ratio](index=29&type=section&id=Liquidity%2C%20Financial%20Resources%2C%20Capital%20Structure%20and%20Gearing%20Ratio) As of June 30, 2025, the Group's current ratio and quick ratio both significantly improved, and the gearing ratio remained low, indicating a sound financial position Liquidity and Capital Structure Indicators (As of June 30) | Indicator | June 30, 2025 | December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Total equity attributable to owners of the Company (RMB thousands) | 139,259 | 107,138 | +32,121 | | Current ratio | 3.57 | 2.08 | +1.49 | | Quick ratio | 2.08 | 1.43 | +0.65 | | Bank borrowings (RMB thousands) | 676 | 676 | 0 | | Gearing ratio | 0.5% | 0.6% | -0.1% | - The Directors believe that the Group's financial position is sound, enabling it to expand its core businesses and achieve its business objectives[67](index=67&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=29&type=section&id=Material%20Investments%20Held%2C%20Material%20Acquisitions%20and%20Disposals%20of%20Subsidiaries%2C%20Associates%20and%20Joint%20Ventures%2C%20and%20Future%20Plans%20for%20Material%20Investments%20or%20Capital%20Assets) During the period, the Group had no other material investments, material acquisitions, or disposals of subsidiaries or associates - During the period, the Group had no other material investments, material acquisitions, or disposals of subsidiaries or associates[68](index=68&type=chunk) [Contingent Liabilities](index=29&type=section&id=Contingent%20Liabilities) As of June 30, 2025, the Group had no material contingent liabilities - As of **June 30, 2025**, the Group had no material contingent liabilities (December 31, 2024: nil)[69](index=69&type=chunk) [Pledge of Assets](index=29&type=section&id=Pledge%20of%20Assets) As of June 30, 2025, the Group had not pledged any assets for bank borrowings or other purposes - As of **June 30, 2025**, the Group had not pledged any assets for bank borrowings or other purposes (December 31, 2024: nil)[70](index=70&type=chunk) [Commitments](index=29&type=section&id=Commitments) As of June 30, 2025, the company had no contractual commitments for the acquisition of property, plant and equipment - As of **June 30, 2025**, the company had no contractual commitments for the acquisition of property, plant and equipment (December 31, 2024: nil)[71](index=71&type=chunk) [Events After the Reporting Period](index=29&type=section&id=Events%20After%20the%20Reporting%20Period) On August 8, 2025, the company proposed to create 3,000,000,000 new shares, increasing the authorized share capital to HKD 50,000,000, and to terminate the old share option scheme and adopt a new one, with related matters to be considered at an EGM - On **August 8, 2025**, the company proposed to create an additional **3,000,000,000** new shares, increasing the authorized share capital from **HKD 20,000,000** to **HKD 50,000,000**[72](index=72&type=chunk) - The company also proposed to terminate the **2017** Share Option Scheme and adopt a new share option scheme[72](index=72&type=chunk) - Related matters are scheduled for consideration at an Extraordinary General Meeting to be held on **August 29, 2025**[72](index=72&type=chunk) [Foreign Exchange Risk](index=30&type=section&id=Foreign%20Exchange%20Risk) The Group faces exchange rate fluctuation risk between RMB and USD, as most revenue is USD-denominated while costs are RMB-denominated. Currently, there is no formal foreign exchange hedging policy, and RMB non-convertibility limits hedging capabilities - Most of the Group's revenue is denominated in USD, while product costs are denominated in RMB, so fluctuations in the RMB to USD exchange rate could significantly impact results[73](index=73&type=chunk) - The Group currently has no formal foreign exchange hedging policy, and the non-convertibility of RMB limits its ability to mitigate foreign exchange risk[73](index=73&type=chunk) [Treasury Policy](index=30&type=section&id=Treasury%20Policy) The Group's credit risk primarily arises from trade receivables and bank deposits, which is mitigated by transacting with customers and banks with good credit records, and no bad debt provisions were recognized this period - Credit risk primarily arises from trade receivables and bank deposits, and the Group adopts a policy of transacting with customers with good payment track records and reputable banks[74](index=74&type=chunk) - No bad debt provisions were recognized for the six months ended **June 30, 2025**, and **2024**[74](index=74&type=chunk) [Employees and Remuneration Policy](index=30&type=section&id=Employees%20and%20Remuneration%20Policy) As of June 30, 2025, the Group had 551 full-time employees, with total employee remuneration of RMB 24,194 thousand, providing various benefits and potentially granting share options - As of **June 30, 2025**, the Group had **551** full-time employees (December 31, 2024: 544), with most located in China[75](index=75&type=chunk) Employee Remuneration (Six Months Ended June 30) | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Total employee remuneration | 24,194 | 26,096 | -1,902 | -7.3% | - The Group provides employees with discretionary bonuses, social insurance, housing provident fund, and MPF contributions, and may grant share options[75](index=75&type=chunk) [Use of Proceeds from Share Subscription](index=31&type=section&id=Use%20of%20Proceeds%20from%20Share%20Subscription) On January 24, 2025, the company completed a share subscription, raising net proceeds of approximately HKD 31,720,000, of which HKD 11,720,000 has been used for general working capital, and the remaining HKD 20,000,000 is planned for identifying potential acquisition or investment opportunities - On **January 24, 2025**, the company issued **228,000,000** ordinary shares, raising net proceeds of approximately **HKD 31,720,000**[76](index=76&type=chunk) Use of Proceeds (As of June 30, 2025) | Planned Use | Net Proceeds (HKD millions) | Utilized (HKD millions) | Unutilized (HKD millions) | | :--- | :--- | :--- | :--- | | 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 This section details the company's corporate governance practices, directors' interests, and other relevant information [Directors' and Chief Executive's Interests and Short Positions in Shares, Underlying Shares and Debentures of the Company and its Associated Corporations](index=31&type=section&id=Directors%27%20and%20Chief%20Executive%27s%20Interests%20and%20Short%20Positions%20in%20Shares%2C%20Underlying%20Shares%20and%20Debentures%20of%20the%20Company%20and%20its%20Associated%20Corporations) As of June 30, 2025, Ms. Yan Ping, Chairperson and Executive Director, held 31.04% of the company's shares through a controlled corporation, with no other directors or chief executives disclosing significant interests Directors' and Chief Executive's Long Positions in Ordinary Shares of the Company (As of June 30, 2025) | Name of Director / Chief Executive | Capacity / Nature of Interest | Number of Shares | Percentage of Shareholding | | :--- | :--- | :--- | :--- | | Ms. Yan Ping | Interest in controlled corporation | 424,560,000 | 31.04% | - Ms. Yan Ping beneficially owns the entire issued share capital of RISEN THRIVE LIMITED and is deemed to be interested in all shares held by it[83](index=83&type=chunk) - 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[79](index=79&type=chunk) [Substantial Shareholders' and Other Shareholders' Interests and Short Positions in Shares and Underlying Shares of the Company](index=32&type=section&id=Substantial%20Shareholders%27%20and%20Other%20Shareholders%27%20Interests%20and%20Short%20Positions%20in%20Shares%20and%20Underlying%20Shares%20of%20the%20Company) As of June 30, 2025, to the best knowledge of the directors, no other persons or corporations, apart from the directors and chief executives, held disclosable interests or short positions of 5% or more in the company's issued share capital - As of **June 30, 2025**, save for the directors or chief executives of the company, no other persons or corporations had any interests or short positions in the shares and underlying shares of the company which would fall to be disclosed to the company under the provisions of Divisions 2 and 3 of Part XV of the Securities and Futures Ordinance or were directly or indirectly beneficially interested in **5%** or more of the issued share capital of the company[80](index=80&type=chunk) [Share Option Scheme](index=32&type=section&id=Share%20Option%20Scheme) The company adopted a share option scheme in 2017 to reward and retain talent. On June 6, 2025, a total of 80,000,000 share options were granted to eleven grantees at an exercise price of HKD 0.095 per share, with executive directors Ms. Yan Ping and Mr. Liu Yaoguang receiving 1,300,000 and 7,200,000 options, respectively - The company conditionally adopted a share option scheme on **November 15, 2017**, aiming to provide additional incentives and attract and retain talent[81](index=81&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[81](index=81&type=chunk) - Executive Directors Ms. Yan Ping and Mr. Liu Yaoguang were granted **1,300,000** and **7,200,000** share options respectively, with an exercise period from **June 6, 2026**, to **June 5, 2035**[81](index=81&type=chunk) [Competition and Conflicts of Interest](index=32&type=section&id=Competition%20and%20Conflicts%20of%20Interest) During the period, no directors, controlling shareholders, or substantial shareholders and their close associates engaged in any business that competed or might 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, and their respective close associates, engaged in any business that directly or indirectly competed or might compete with the Group's business, or had any other conflicts of interest with the Group[82](index=82&type=chunk) [Directors' Securities Transactions](index=33&type=section&id=Directors%27%20Securities%20Transactions) The company has adopted a code of conduct for directors' dealings in company securities, and all directors confirmed compliance with the relevant standards during the period - The company has adopted a code of conduct for directors' dealings in the company's securities in accordance with Rules **5.46 to 5.67** of the GEM Listing Rules[84](index=84&type=chunk) - During the period, all directors confirmed their compliance with the required standards of dealing and the code of conduct adopted by the company regarding directors' securities transactions[84](index=84&type=chunk) [Purchase, Sale or Redemption of the Company's Securities](index=33&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company%27s%20Securities) During the period, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's securities - During the period, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's securities[85](index=85&type=chunk) [Corporate Governance Code](index=33&type=section&id=Corporate%20Governance%20Code) The company has applied the principles and code provisions of the Corporate Governance Code set out in Appendix 15 to the GEM Listing Rules and has complied with the applicable code provisions during the period - The company has applied the principles and code provisions of the Corporate Governance Code ("CG Code") set out in Appendix 15 to the GEM Listing Rules[86](index=86&type=chunk) - To the best knowledge of the Board, the company has complied with the applicable code provisions of the CG Code during the period[86](index=86&type=chunk) [Changes in Directors' Information](index=33&type=section&id=Changes%20in%20Directors%27%20Information) Ms. Shen Jindan was removed 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**[87](index=87&type=chunk) [Audit Committee](index=33&type=section&id=Audit%20Committee) The Audit Committee, comprising three independent non-executive directors with Ms. Lian Jingyu as Chairperson, is responsible for reviewing and overseeing financial reporting and internal control procedures. The unaudited condensed financial results for this period have been reviewed by the Audit Committee and confirmed to comply with applicable accounting standards and disclosure requirements - The Audit Committee was established on **June 20, 2017**, and comprises three independent non-executive directors, with Ms. Lian Jingyu as Chairperson[88](index=88&type=chunk) - The primary duties of the Audit Committee are to review and oversee the Group's financial reporting process and internal control procedures[88](index=88&type=chunk) - The unaudited condensed financial results for this period have been reviewed by the Audit Committee, which considers them to be in compliance with applicable accounting standards, the GEM Listing Rules, and to have made adequate disclosures[88](index=88&type=chunk)

[Interim Results Announcement](index=1&type=section&id=Interim%20Results%20Announcement) This report presents the Group's unaudited condensed consolidated financial performance and position for the six months ended June 30, 2025, along with management's discussion and other relevant information [Unaudited Condensed Consolidated Income Statement](index=2&type=section&id=Unaudited%20Condensed%20Consolidated%20Income%20Statement) For the six months ended June 30, 2025, the company's revenue increased by 8.0% to RMB 1,585.4 million year-on-year, achieving a net profit of RMB 3.4 million, reversing a loss of RMB 36.1 million in the prior period Condensed Consolidated Income Statement Key Data | Indicator | Six Months Ended June 30, 2025 (RMB thousands) | Six Months Ended June 30, 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 1,585,416 | 1,467,599 | +8.0% | | Cost of sales | (1,467,772) | (1,328,548) | +10.5% | | Gross profit | 117,644 | 139,051 | -15.4% | | Operating profit | 33,423 | 13,216 | +152.9% | | Profit/(Loss) for the period | 3,396 | (36,099) | Turnaround to profit | | Profit/(Loss) attributable to owners of the Company | 8,937 | (50,718) | Turnaround to profit | | Basic and diluted earnings/(loss) per share (RMB cents) | 0.74 | (4.23) | Turnaround to profit | [Unaudited Condensed Consolidated Statement of Comprehensive Income](index=3&type=section&id=Unaudited%20Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) For the six months ended June 30, 2025, the Group recorded a total comprehensive income of RMB 3.4 million, a significant improvement from a total comprehensive expense of RMB 36.1 million in the prior period Condensed Consolidated Statement of Comprehensive Income Key Data | Indicator | Six Months Ended June 30, 2025 (RMB thousands) | Six Months Ended June 30, 2024 (RMB thousands) | | :--- | :--- | :--- | | Profit/(Loss) and total comprehensive income/(expense) for the period | 3,396 | (36,099) | | Total comprehensive income/(expense) for the period attributable to owners of the Company | 8,937 | (50,718) | | Total comprehensive income/(expense) for the period attributable to non-controlling interests | (5,541) | 14,619 | [Unaudited Condensed Consolidated Statement of Financial Position](index=4&type=section&id=Unaudited%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the Group's total assets were RMB 6,973.7 million, a decrease of 11.7% from the end of 2024, with a slight increase in net current assets and a small decrease in total equity Condensed Consolidated Statement of Financial Position Key Data | Indicator | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Total assets | 6,973,711 | 7,896,525 | -11.7% | | Total non-current assets | 341,313 | 362,344 | -5.8% | | Total current assets | 6,632,398 | 7,534,181 | -11.9% | | Total equity | 1,584,647 | 1,594,070 | -0.6% | | Total liabilities | 5,389,064 | 6,302,455 | -14.5% | | Total current liabilities | 4,950,881 | 5,860,145 | -15.5% | | Net current assets | 1,681,517 | 1,674,036 | +0.4% | [Notes to the Unaudited Condensed Consolidated Interim Financial Information](index=6&type=section&id=Notes%20to%20the%20Unaudited%20Condensed%20Consolidated%20Interim%20Financial%20Information) This section provides detailed notes and explanations for the unaudited condensed consolidated interim financial information, covering general information, basis of preparation, accounting policy changes, and specific financial items [General Information](index=6&type=section&id=General%20Information) The Company is incorporated in the Cayman Islands, listed on the Hong Kong Stock Exchange, primarily engaged in property development in China, with financial information presented in RMB thousands and unaudited - The Company is an investment holding company primarily engaged in property development in China[9](index=9&type=chunk) - The Group's unaudited condensed consolidated interim financial information is presented in **RMB thousands** and has not been audited or reviewed by the auditor[10](index=10&type=chunk)[11](index=11&type=chunk) [Basis of Preparation](index=6&type=section&id=Basis%20of%20Preparation) This interim financial information is prepared in accordance with HKAS 34 and consistent with 2024 annual financial statements, with the directors deeming the going concern basis appropriate despite significant uncertainties - The Group's unaudited condensed consolidated interim financial information for the six months ended June 30, 2025, is prepared in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting" issued by the HKICPA and the applicable disclosure requirements of the Listing Rules of the Stock Exchange[12](index=12&type=chunk) - The Group faces significant going concern uncertainties, including **low cash balances**, **large short-term liabilities**, and potential cash outflows from financial guarantees[14](index=14&type=chunk) - The Board has reviewed cash flow forecasts and adopted several measures to ensure going concern, including adjusting sales activities, negotiating with contractors, seeking bank financing, and obtaining related party financial support[14](index=14&type=chunk)[15](index=15&type=chunk) [Adoption of Amendments to HKFRSs](index=8&type=section&id=Adoption%20of%20Amendments%20to%20HKFRSs) Amendments to HKFRSs effective January 1, 2025, were first applied in this interim period, with no significant impact on the Group's consolidated financial position or performance - The amendments to HKAS 21 and HKFRS 1 "Lack of Exchangeability" were first applied in this interim period[16](index=16&type=chunk) - These amendments had **no significant impact** on the Group's consolidated financial position and financial performance and/or disclosures in the unaudited condensed consolidated interim financial information[16](index=16&type=chunk) [Revenue](index=8&type=section&id=Revenue) The Group's revenue primarily derives from property sales, service income, and rental income, with total revenue increasing by 8.0% year-on-year for the six months ended June 30, 2025, and property sales accounting for 99.4% Revenue Source Analysis | Revenue Category | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Sales of properties | 1,576,457 | 1,457,879 | +8.1% | | Service income | 2,789 | 4,951 | -43.7% | | Rental income | 6,170 | 4,769 | +29.4% | | **Total Revenue** | **1,585,416** | **1,467,599** | **+8.0%** | - All revenue is generated from China and primarily recognized at a point in time (property sales)[19](index=19&type=chunk) [Segment Information](index=9&type=section&id=Segment%20Information) The Group primarily engages in property development in China, and management assesses business operating results as a single segment, thus no segment information is presented - The Group is primarily engaged in property development in China, and the chief operating decision-maker views the operating results of the business as a single segment[20](index=20&type=chunk) - All of the Group's revenue and non-current assets are located in China, and no single external customer accounts for more than **10% of revenue**[20](index=20&type=chunk) [Other Gains/(Losses), Net](index=9&type=section&id=Other%20Gains%2F(Losses)%2C%20Net) For the six months ended June 30, 2025, the Group recorded net other gains of RMB 0.3 million, an improvement from a net loss of RMB 0.5 million in the prior period, mainly due to gains from interest not payable on overdue borrowings Other Gains/(Losses), Net | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Gains from interest not payable on overdue borrowings | 1,004 | — | | Fines, penalties and compensation | (807) | (537) | | Donations | (123) | (186) | | Loss on disposal of property, plant and equipment | (2) | (3) | | Others | 253 | 187 | | **Total** | **325** | **(539)** | [Finance Income and Costs](index=10&type=section&id=Finance%20Income%20and%20Costs) For the six months ended June 30, 2025, the Group's net finance costs increased to RMB 0.138 million from RMB 0.043 million in the prior period, primarily due to decreased interest income from bank deposits Net Finance Income and Costs | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Finance income — Interest income from bank deposits | 166 | 427 | | Finance costs — Interest on bank and other long-term borrowings | (23,736) | (27,911) | | Finance costs — Interest on lease liabilities | (304) | (470) | | Less: Amount capitalized | 23,736 | 27,911 | | **Net finance costs** | **(138)** | **(43)** | [Profit Before Income Tax](index=11&type=section&id=Profit%20Before%20Income%20Tax) For the six months ended June 30, 2025, profit before income tax was RMB 33.2 million, mainly influenced by lower staff costs and a significant reduction in provisions for properties held for sale or under development for sale Profit Before Income Tax Components | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Staff costs (including directors' emoluments) | 28,568 | 36,037 | -20.7% | | Depreciation expense for property, plant and equipment | 2,710 | 3,692 | -26.6% | | Cost of properties recognized as expense | 1,462,119 | 1,265,154 | +15.6% | | Provision for properties held for sale or under development for sale | — | 57,671 | -100% | [Income Tax Expense](index=11&type=section&id=Income%20Tax%20Expense) For the six months ended June 30, 2025, income tax expense decreased by 39.4% year-on-year to RMB 29.8 million, primarily due to a significant reduction in China corporate income tax despite a notable increase in land appreciation tax Income Tax Expense Analysis | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | China Land Appreciation Tax | 7,266 | 915 | +694.1% | | China Corporate Income Tax | 6,389 | 31,460 | -79.7% | | Deferred income tax | 16,175 | 16,843 | -4.0% | | **Total Income Tax Expense** | **29,830** | **49,218** | **-39.4%** | [Earnings/(Loss) Per Share](index=12&type=section&id=Earnings%2F(Loss)%20Per%20Share) For the six months ended June 30, 2025, basic and diluted earnings per share were RMB 0.74 cents, a turnaround from a loss of RMB 4.23 cents per share in the prior period Earnings/(Loss) Per Share | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Profit/(Loss) attributable to owners of the Company | 8,937 | (50,718) | | Weighted average number of ordinary shares in issue (thousands) | 1,200,000 | 1,200,000 | | Basic and diluted earnings/(loss) per share (RMB cents) | 0.74 | (4.23) | - Diluted earnings/(loss) per share is the same as basic earnings/(loss) per share as there are no dilutive potential ordinary shares in issue[26](index=26&type=chunk) [Dividends](index=12&type=section&id=Dividends) No dividends were paid or proposed by the Company for the six months ended June 30, 2025 - No dividends were paid or proposed for the six months ended June 30, 2025, and no dividends have been proposed since the end of the reporting period[27](index=27&type=chunk) [Properties Held for Sale or Under Development for Sale](index=12&type=section&id=Properties%20Held%20for%20Sale%20or%20Under%20Development%20for%20Sale) As of June 30, 2025, net properties held for sale or under development for sale amounted to RMB 5,773.6 million, a 12.5% decrease from the end of 2024, mainly due to a reduction in properties held for sale Properties Held for Sale or Under Development for Sale Balance | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Properties under development for sale | 3,820,881 | 3,960,468 | -3.5% | | Properties held for sale | 2,324,335 | 3,008,812 | -22.7% | | Less: Provision | (371,581) | (371,581) | 0% | | **Total** | **5,773,635** | **6,597,699** | **-12.5%** | [Other Receivables and Prepayments](index=13&type=section&id=Other%20Receivables%20and%20Prepayments) As of June 30, 2025, net other receivables and prepayments were RMB 419.6 million, a slight increase of 4.8% from the end of 2024, with an increase in amounts due from third parties for temporary funding Other Receivables and Prepayments Balance | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Prepayments for construction costs | 21,215 | 12,683 | +67.3% | | Amounts due from third parties for temporary funding | 123,600 | 109,050 | +13.3% | | Amounts due from a related party | 41,506 | 41,506 | 0% | | Less: Impairment provision | (60,507) | (58,768) | +3.0% | | **Total** | **419,575** | **400,500** | **+4.8%** | [Trade and Other Payables](index=14&type=section&id=Trade%20and%20Other%20Payables) As of June 30, 2025, total trade and other payables were RMB 1,667.4 million, a 4.4% decrease from the end of 2024, with a slight reduction in trade payables Trade and Other Payables Balance | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Trade payables | 1,309,106 | 1,330,603 | -1.6% | | VAT and other taxes payable | 103,614 | 145,692 | -28.9% | | Amounts due to non-controlling shareholders | 25,735 | 25,735 | 0% | | Amounts due to related parties | 25,357 | 21,385 | +18.6% | | **Total** | **1,667,383** | **1,741,056** | **-4.4%** | [Contract Liabilities](index=15&type=section&id=Contract%20Liabilities) As of June 30, 2025, contract liabilities were RMB 2,344.6 million, a significant decrease of 25.2% from the end of 2024, primarily representing prepayments for property sales Contract Liabilities Balance | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Contract liabilities | 2,344,623 | 3,136,395 | -25.2% | - Contract liabilities primarily represent amounts received in advance from customers for property sales, which will be recognized as revenue when control of the property is transferred to the customer[33](index=33&type=chunk) [Commitments](index=15&type=section&id=Commitments) As of June 30, 2025, capital expenditure commitments for properties under development for sale were RMB 712.5 million, a 15.4% decrease from the end of 2024 Capital Expenditure Commitments | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Properties under development for sale | 712,523 | 841,904 | -15.4% | [Management Discussion and Analysis](index=16&type=section&id=Management%20Discussion%20and%20Analysis) This section provides an overview of the Group's performance, financial position, and future outlook, including industry review, business operations, and financial analysis [Industry Review](index=16&type=section&id=Industry%20Review) In the first half of 2025, China's real estate market saw a narrowing decline, with investment, completion, and sales data all decreasing but at a slower pace, as policy adjustments began to show effects, though structural challenges remain H1 2025 National Real Estate Market Key Data | Indicator | Year-on-Year Change (%) | | :--- | :--- | | Real estate development investment | -11.2% | | Residential investment | -10.4% | | Completed housing area | -14.8% | | Completed residential area | -15.5% | | Sales area of new commercial housing | -3.5% | | Sales area of residential housing | -3.7% | | Sales value of new commercial housing | -5.5% | | Sales value of residential housing | -5.2% | H1 2025 Henan Province Real Estate Market Key Data | Indicator | Year-on-Year Change (%) | | :--- | :--- | | Real estate development investment | -8.5% | | Residential investment | -10.2% | | Completed housing area | -37.3% | | Completed residential area | -36.7% | | Sales area of new commercial housing | -1.9% | | Sales area of residential housing | -2.2% | | Sales value of new commercial housing | -1.3% | | Sales value of residential housing | -1.8% | - Since the second half of 2024, the state has continuously promoted "stabilize the market" and "reduce inventory" policies, including optimizing purchase restrictions and lowering mortgage interest rates, with further measures to stimulate demand for improved housing in early 2025[38](index=38&type=chunk) [Business Overview](index=18&type=section&id=Business%20Overview) In the first half of 2025, the Group focused on "ensuring project delivery" and "inventory reduction," achieving significant progress in a challenging market through optimized construction, increased promotions, and innovative sales models, while leveraging Henan Province's policy benefits - The Group prioritized "ensuring project delivery" and "inventory reduction" as core tasks, striving to ensure timely project delivery and adopting diversified strategies to address inventory pressure[40](index=40&type=chunk)[41](index=41&type=chunk) H1 2025 Contract Sales Value | Property Type | Contract Sales Value (RMB millions) | | :--- | :--- | | Residential properties | 574.2 | | Commercial properties | 144.4 | | **Total** | **755.8** | - The Group completed deliveries of approximately **62.2 thousand square meters** in Xuchang urban area, **106.7 thousand square meters** in Changge area, and **78.3 thousand square meters** in Yuzhou area[40](index=40&type=chunk) [Land Bank](index=19&type=section&id=Land%20Bank) This section details the Group's land reserve as of the reporting period - As of June 30, 2025, the Group's land bank had a gross floor area of approximately **2.8 million square meters**[43](index=43&type=chunk) [Contract Sales](index=19&type=section&id=Contract%20Sales) This section provides a breakdown of the Group's contract sales and average selling prices for different property types Contract Sales and Average Selling Price Details | Indicator | 2025 (RMB millions/sqm/units) | 2024 (RMB millions/sqm/units) | Change (%) | | :--- | :--- | :--- | :--- | | **Contract Sales Value** | | | | | Residential units | 574.2 | 673.4 | -14.7% | | Commercial units | 144.4 | 138.4 | +4.3% | | Parking spaces | 29.8 | 21.1 | +41.2% | | Others | 7.4 | 6.5 | +13.8% | | **Total** | **755.8** | **839.4** | **-10.0%** | | **Contracted Saleable GFA/Number of Units** | | | | | Saleable GFA (square meters) | 134,111 | 144,293 | -7.1% | | Parking spaces (units) | 835 | 553 | +51.0% | | **Contract Average Selling Price** | | | | | Saleable GFA (RMB per square meter) | 5,414 | 5,671 | -4.5% | | Parking spaces (RMB per unit) | 35,709 | 38,114 | -6.3% | - The contract average selling price per square meter for saleable GFA decreased by **4.5% to RMB 5,414**, primarily due to the decline in property prices in Henan Province[45](index=45&type=chunk) [Financial Review](index=20&type=section&id=Financial%20Review) The Group's revenue increased by 8.0% year-on-year in H1 2025, but gross profit decreased by 15.4%, with gross margin falling to 7.4%, achieving a net profit of RMB 3.4 million, mainly due to effective control over selling and marketing and administrative expenses Financial Performance Overview | Indicator | Six Months Ended June 30, 2025 (RMB millions) | Six Months Ended June 30, 2024 (RMB millions) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 1,585.4 | 1,467.6 | +8.0% | | Gross profit | 117.6 | 139.1 | -15.4% | | Gross profit margin | 7.4% | 9.5% | -2.1 percentage points | | Net result for the period | 3.4 (Profit) | (36.1) (Loss) | Turnaround to profit (+39.5 million) | [Revenue Analysis](index=20&type=section&id=Revenue%20Analysis) This section analyzes the Group's revenue by property type, including recognized area and average selling price Property Sales Revenue and Average Selling Price by Property Type | Property Type | 2025 Revenue (RMB thousands) | 2025 Recognized GFA (square meters) | 2025 Average Selling Price per sqm (RMB) | 2024 Revenue (RMB thousands) | 2024 Recognized GFA (square meters) | 2024 Average Selling Price per sqm (RMB) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Residential | 1,382,088 | 268,537 | 5,147 | 1,269,581 | 244,648 | 5,189 | | Commercial | 174,661 | 37,263 | 4,687 | 144,798 | 18,749 | 7,723 | | Storerooms | 2,397 | 1,654 | 1,449 | 5,521 | 2,972 | 1,858 | | **Subtotal** | **1,559,146** | **307,454** | **5,071** | **1,419,900** | **266,369** | **5,331** | | Parking spaces | 17,311 | 545 (units) | 31,763 (per unit) | 37,979 | 592 (units) | 64,154 (per unit) | - Property sales accounted for approximately **99.4% of total revenue**, primarily from residential and commercial property sales[48](index=48&type=chunk) [Gross Profit and Margin](index=22&type=section&id=Gross%20Profit%20and%20Margin) This section details the Group's gross profit and gross profit margin by category Gross Profit and Margin by Category | Category | 2025 Gross Profit (RMB thousands) | 2025 Gross Profit Margin (%) | 2024 Gross Profit (RMB thousands) | 2024 Gross Profit Margin (%) | | :--- | :--- | :--- | :--- | :--- | | Residential property sales | 90,729 | 6.6 | 107,520 | 8.5 | | Commercial property sales | 19,621 | 11.2 | 10,845 | 7.5 | | Parking spaces and storerooms sales | 4,005 | 20.3 | 14,699 | 33.8 | | Rental income | 2,789 | 100.0 | 4,735 | 99.3 | | Service income | 500 | 8.1 | 1,252 | 25.3 | | **Total** | **117,644** | **7.4** | **139,051** | **9.5** | - The gross profit margin for commercial property sales increased from **7.5% to 11.2%**, mainly due to reduced costs of commercial properties delivered[50](index=50&type=chunk) [Fair Value Loss on Investment Properties](index=23&type=section&id=Fair%20Value%20Loss%20on%20Investment%20Properties) This section discusses the fair value loss on the Group's investment properties - The Group's investment properties were valued by an independent qualified valuer, Brightway Surveyors & Valuers Limited, as of June 30, 2025[52](index=52&type=chunk) [Selling and Marketing Expenses](index=23&type=section&id=Selling%20and%20Marketing%20Expenses) This section provides an overview of the Group's selling and marketing expenses Selling and Marketing Expenses | Indicator | 2025 (RMB millions) | 2024 (RMB millions) | Change (%) | | :--- | :--- | :--- | :--- | | Selling and marketing expenses | 37.8 | 58.1 | -35.0% | - The decrease in selling and marketing expenses was primarily due to reduced advertising and promotion costs and sales agent commissions[53](index=53&type=chunk) [Administrative Expenses](index=23&type=section&id=Administrative%20Expenses) This section provides an overview of the Group's administrative expenses Administrative Expenses | Indicator | 2025 (RMB millions) | 2024 (RMB millions) | Change (%) | | :--- | :--- | :--- | :--- | | Administrative expenses | 42.9 | 56.6 | -24.2% | [Other Gains/(Losses), Net (Financial Review)](index=23&type=section&id=Other%20Gains%2F(Losses)%2C%20Net%20(Financial%20Review)) This section summarizes the Group's other net gains or losses - For the six months ended June 30, 2025, the Group's other net gains were approximately **RMB 0.3 million** (2024: other net losses of RMB 0.5 million)[55](index=55&type=chunk) [Finance Costs — Net (Financial Review)](index=23&type=section&id=Finance%20Costs%20%E2%80%94%20Net%20(Financial%20Review)) This section outlines the components of the Group's net finance costs - Net finance costs primarily include interest expense on bank deposits, interest expense on borrowings, and interest and finance charges payable on lease liabilities, net of capitalized interest expense[56](index=56&type=chunk) [Income Tax Expense (Financial Review)](index=23&type=section&id=Income%20Tax%20Expense%20(Financial%20Review)) This section provides an overview of the Group's income tax expense Income Tax Expense | Indicator | 2025 (RMB millions) | 2024 (RMB millions) | Change (%) | | :--- | :--- | :--- | :--- | | Income tax expense | 29.8 | 49.2 | -39.4% | - The decrease in income tax expense was mainly due to a **reduction in gross profit** during the period[57](index=57&type=chunk) [Liquidity, Financial Resources and Capital Resources](index=24&type=section&id=Liquidity%2C%20Financial%20Resources%20and%20Capital%20Resources) As of June 30, 2025, the Group's cash and cash equivalents decreased by 38.5%, and total borrowings decreased by 6.6%, with a slight increase in net current assets but decreases in total assets and total liabilities, while maintaining a stable current ratio and a declining gearing ratio amidst contingent liabilities Liquidity and Borrowings Overview | Indicator | June 30, 2025 (RMB millions) | December 31, 2024 (RMB millions) | Change (%) | | :--- | :--- | :--- | :--- | | Cash and cash equivalents | 155.7 | 253.3 | -38.5% | | Restricted bank deposits | 132.1 | 156.9 | -15.8% | | Total borrowings | 995.4 | 1,064.5 | -6.6% | | Borrowings in current liabilities | 580.5 | 647.4 | -10.3% | | Proportion of fixed-rate borrowings | 46.1% | 87.7% | -41.6 percentage points | Current Assets, Total Assets and Net Assets | Indicator | June 30, 2025 (RMB millions) | December 31, 2024 (RMB millions) | Change (%) | | :--- | :--- | :--- | :--- | | Current assets | 6,632.4 | 7,534.2 | -11.9% | | Current liabilities | 4,950.9 | 5,860.1 | -15.5% | | Net current assets | 1,681.5 | 1,674.0 | +0.4% | | Total assets | 6,973.7 | 7,896.5 | -11.7% | | Total liabilities | 5,389.1 | 6,302.5 | -14.5% | | Net assets or total equity | 1,584.6 | 1,594.1 | -0.6% | [Pledge of Assets](index=25&type=section&id=Pledge%20of%20Assets) This section describes the assets pledged by the Group for its borrowings - Some of the Group's borrowings are secured by property, plant and equipment, investment properties, shares of subsidiaries, and properties held for sale or under development for sale[62](index=62&type=chunk) [Contingent Liabilities](index=25&type=section&id=Contingent%20Liabilities) This section outlines the Group's contingent liabilities - The Group has arranged bank financing for certain property purchasers and provided guarantees, with directors believing the likelihood of purchasers defaulting on payments is minimal[63](index=63&type=chunk) - A subsidiary of the Group provided a guarantee for a shareholder loan of approximately **RMB 229.5 million** to an associate and may be required to compensate for all losses of the investee under specific circumstances, but the risk is considered low[63](index=63&type=chunk)[64](index=64&type=chunk) - As of June 30, 2025, guarantees and pledges provided for certain third-party borrowings for properties held for sale or under development for sale amounted to **RMB 107.3 million**[64](index=64&type=chunk) [Key Financial Ratios](index=26&type=section&id=Key%20Financial%20Ratios) This section presents the Group's key financial ratios Key Financial Ratios | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Current ratio | 1.3 | 1.3 | | Gearing ratio | 62.8% | 66.8% | | Debt-to-equity ratio | 53.0% | 50.9% | - The gearing ratio decreased by **4.0 percentage points to 62.8%**, primarily due to repayment of borrowings during the period[70](index=70&type=chunk) [Key Risk Factors](index=26&type=section&id=Key%20Risk%20Factors) This section identifies the primary risks affecting the Group's business operations - The Group's business is highly dependent on the performance of the property market in Henan Province, China, influenced by economic conditions, supply and demand, government policies, and interest rates[67](index=67&type=chunk) - The real estate market is highly competitive, with the Group competing with large national and regional property developers in various aspects[68](index=68&type=chunk) - Business operations are affected by force majeure events, natural disasters, or epidemic outbreaks, which may cause damage to the economy and society in the operating regions[68](index=68&type=chunk) - The Group is exposed to interest rate fluctuation risk but does not hedge its cash flow or fair value interest rate risk; foreign currency risk is not significant, and there is no hedging policy[68](index=68&type=chunk)[69](index=69&type=chunk) [Treasury Policy and Capital Structure](index=28&type=section&id=Treasury%20Policy%20and%20Capital%20Structure) The Group's capital management aims to ensure continuous operation, generate shareholder returns, and maintain an optimal capital structure to minimize funding costs, with capital monitored based on the gearing ratio - The Group's capital management objectives are to ensure continuous operation, generate returns for shareholders, and maintain an optimal capital structure to minimize funding costs[72](index=72&type=chunk) - The Group monitors its capital based on the **gearing ratio**[73](index=73&type=chunk) [Human Resources and Employee Remuneration](index=28&type=section&id=Human%20Resources%20and%20Employee%20Remuneration) As of June 30, 2025, the Group's total number of employees was 453, a 17.3% decrease year-on-year, with the company offering diversified compensation, benefits, and training programs, and adopting a share option scheme to attract and retain talent Employee Headcount | Indicator | June 30, 2025 | June 30, 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Total number of employees | 453 | 548 | -17.3% | - The Group provides basic salaries, medical insurance, social insurance contribution schemes, and other in-kind benefits, and promotes employee development and talent retention through training programs and a share option scheme[74](index=74&type=chunk) [Outlook](index=28&type=section&id=Outlook) For the second half of the year, the decline in national new home sales is expected to continue to narrow, but the market remains in a deep adjustment period, requiring time for confidence to recover; the Group will continue to focus on "ensuring project delivery" and "inventory reduction," optimize product portfolios, strengthen cash flow monitoring, and promote product quality upgrades and brand building to address opportunities and challenges - In the second half of the year, the decline in national new home sales is expected to continue to narrow, but the market recovery process still faces many uncertainties, with a differentiated pattern expected: "first-tier cities and some core second-tier cities stabilizing and recovering, while third- and fourth-tier cities continue to adjust"[75](index=75&type=chunk)[76](index=76&type=chunk) - The Group will continue to prioritize "ensuring project delivery" in the second half of the year and deepen diversified "inventory reduction" strategies, including precisely understanding market demand, optimizing product portfolios, and increasing marketing innovation efforts[76](index=76&type=chunk) - The Group will continue its prudent strategy, strengthen cash flow monitoring, and continuously promote product quality upgrades and brand building around the "good housing" strategy[76](index=76&type=chunk)[77](index=77&type=chunk) [Other Information](index=30&type=section&id=Other%20Information) This section covers additional disclosures including post-reporting period events, corporate governance, compliance with securities trading standards, and publication details [Events After Reporting Period](index=30&type=section&id=Events%20After%20Reporting%20Period) No significant events occurred after June 30, 2025, other than those disclosed in this interim results announcement - No significant events occurred after June 30, 2025[78](index=78&type=chunk) [Corporate Governance](index=30&type=section&id=Corporate%20Governance) The Company is committed to high standards of corporate governance and has complied with all applicable code provisions of the Corporate Governance Code in Appendix C1 of the Listing Rules for the six months ended June 30, 2025, except for code provision B.2.2 (rotation of directors) - The Company has complied with all applicable code provisions of the Corporate Governance Code in Appendix C1 of the Listing Rules, except for code provision B.2.2 (all directors should retire by rotation at least once every three years)[79](index=79&type=chunk) [Compliance with Standard Code for Securities Transactions](index=30&type=section&id=Compliance%20with%20Standard%20Code%20for%20Securities%20Transactions) The Company has adopted the Standard Code as set out in Appendix C3 of the Listing Rules as the code of conduct for directors' securities transactions, and all directors have confirmed compliance with it - The Company has adopted the Standard Code as set out in Appendix C3 of the Listing Rules, and all directors confirmed compliance with the Standard Code for the six months ended June 30, 2025[80](index=80&type=chunk) [Purchase, Sale or Redemption of Securities](index=30&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20Securities) 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 for the six months ended June 30, 2025[81](index=81&type=chunk) [Review by Audit Committee](index=31&type=section&id=Review%20by%20Audit%20Committee) The unaudited condensed consolidated interim financial statements for the six months ended June 30, 2025, have been reviewed by the Board's Audit Committee - The unaudited condensed consolidated interim financial statements for the six months ended June 30, 2025, have been reviewed by the Board's Audit Committee, which includes three independent non-executive directors[82](index=82&type=chunk) [Audit or Review of Financial Results](index=31&type=section&id=Audit%20or%20Review%20of%20Financial%20Results) The Company's auditor has not audited or reviewed the Group's unaudited condensed consolidated interim financial statements for the six months ended June 30, 2025 - The Company's auditor has not audited or reviewed the Group's unaudited condensed consolidated interim financial statements for the six months ended June 30, 2025[83](index=83&type=chunk) [Publication of Interim Results and Interim Report](index=31&type=section&id=Publication%20of%20Interim%20Results%20and%20Interim%20Report) This interim results announcement will be published on the Company's and the Stock Exchange's websites, and the interim report will be dispatched to shareholders and posted on relevant websites in due course - This interim results announcement will be published on the Company's website (www.everreachgroup.com) and the Stock Exchange's website (www.hkexnews.hk)[84](index=84&type=chunk) [Forward-Looking Statements](index=31&type=section&id=Forward-Looking%20Statements) This announcement contains forward-looking statements regarding the Group's financial condition, results, and business, which involve known and unknown risks and uncertainties that could cause actual results to differ materially from expectations - This announcement contains certain forward-looking statements regarding the Group's financial condition, results, and business, which involve known and unknown risks and uncertainties that could cause actual results to differ materially from expectations[85](index=85&type=chunk) [Continued Suspension of Trading](index=31&type=section&id=Continued%20Suspension%20of%20Trading) The Company's shares have been suspended from trading on the Stock Exchange since April 2, 2024, and will remain suspended until further notice, advising shareholders and potential investors to exercise caution - The Company's shares have been suspended from trading on the Stock Exchange since 9:00 a.m. on April 2, 2024, and will remain suspended until further notice[86](index=86&type=chunk) - Shareholders and potential investors of the Company are advised to exercise caution when dealing in the Company's securities[87](index=87&type=chunk)

[Company Information](index=3&type=section&id=Company%20Information) This chapter details the company's updated governance structure, including board changes, committee roles, and the abolition of the Supervisory Committee, with its functions transferred to the Audit Committee - Executive Director **Li Jiangping** was appointed on August 29, 2025, Non-Executive Director **Chen Yin** was appointed Chairman on August 2, 2025, and **Qi Xinhui** resigned as Chairman on the same day and as Director on August 29, 2025[6](index=6&type=chunk) - The company **abolished the Supervisory Committee on June 27, 2025**, revised its Articles of Association, and **transferred the Supervisory Committee's functions to the Board's Audit Committee**[7](index=7&type=chunk)[78](index=78&type=chunk) - The Audit Committee comprises **Hu Benyuan (Chairman)**, **Hu Chengye**, and **Li Daowei**, responsible for reviewing the effectiveness of external audits and internal controls[6](index=6&type=chunk)[80](index=80&type=chunk) [Company Performance](index=4&type=section&id=Company%20Performance) This chapter presents the unaudited consolidated operating results for H1 2025, showing increased revenue but a significant decline in net profit due to lower electrolytic nickel prices and higher production costs, with no interim dividend recommended H1 2025 Consolidated Operating Results Overview | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Consolidated Operating Revenue | 1,117.9 | 1,065.4 | +4.9% | | Net Profit Attributable to Company Shareholders | 71.6 | 144.0 | -50.2% | | Basic Earnings Per Share | RMB 0.032 | RMB 0.065 | -50.8% | - The significant decline in net profit was primarily due to a **10.9% decrease** in the average selling price of electrolytic nickel (excluding tax), from **RMB 124,230/ton to RMB 110,688/ton**, and increased production costs (partially due to the use of externally purchased nickel concentrate)[10](index=10&type=chunk) - The Board **does not recommend an interim dividend** for 2025[12](index=12&type=chunk) - The Group **completed the equity acquisition of Huaou Mining in June 2025** and **restated the 2024 consolidated financial statements** in accordance with Chinese accounting standards[12](index=12&type=chunk) [Resources and Reserves](index=6&type=section&id=Resources%20and%20Reserves) This chapter provides detailed resource and reserve estimates as of June 30, 2025, for the company's nickel-copper, vanadium, and fluorite mines, noting the extension of the Mujiahe vanadium mine exploration permit Nickel-Copper Mine Resources and Reserves as of June 30, 2025 | Mining Area | Ore Volume (tons) | Copper Grade (%) | Nickel Grade (%) | Copper Metal (tons) | Nickel Metal (tons) | | :--- | :--- | :--- | :--- | :--- | :--- | | **Total Resources** | 88,712,958 | - | - | 438,544 | 434,465 | | Kalatongke Nickel-Copper Mine | 26,421,659 | 0.98 | 0.56 | 258,023 | 147,046 | | Huangshandong, Huangshan, Xiangshan Nickel-Copper Mines | 62,291,299 | 0.29 | 0.46 | 180,521 | 287,419 | | **Total Reserves** | 41,070,597 | - | - | 246,813 | 226,822 | | Kalatongke Nickel-Copper Mine | 16,404,590 | 1.03 | 0.62 | 169,414 | 102,510 | | Huangshandong, Huangshan, Xiangshan Nickel-Copper Mines | 24,666,007 | 0.31 | 0.50 | 77,399 | 124,312 | Vanadium Mine Resources as of June 30, 2025 | Mining Area | Ore Volume (tons) | V2O5 Grade (%) | V2O5 Metal (tons) | | :--- | :--- | :--- | :--- | | Xianghejie Vanadium Mine | 10,159,400 | 0.95 | 96,300 | | Mujiahe Vanadium Mine | 16,410,100 | 0.89 | 146,015 | | **Total** | 26,569,500 | - | 242,315 | Karqiar Fluorite Mine Resources and Reserves as of June 30, 2025 | Mining Area | Ore Volume (tons) | CaF2 Grade (%) | CaF2 Metal (tons) | | :--- | :--- | :--- | :--- | | **Resources** | 61,936,000 | 32.95 | 20,409,000 | | **Reserves** | 24,787,000 | 28.60 | 7,094,000 | - The exploration permit for the Mujiahe vanadium mine has been approved for extension until **January 14, 2030**; the Xianghejie vanadium mine exploration permit is still under application[15](index=15&type=chunk) [Management Discussion and Analysis](index=7&type=section&id=Management%20Discussion%20and%20Analysis) This chapter analyzes H1 2025 operations, business performance, and financial status, highlighting revenue growth despite declining net profit due to market volatility, alongside details on mining, capital expenditure, and risk management [Market Review](index=8&type=section&id=Market%20Review) H1 2025 saw international and domestic metal prices align, with LME electrolytic nickel futures down **12.3%** and cathode copper futures up **2.6%**, mirrored by domestic markets H1 2025 Key Metal Price Changes | Metric | H1 2025 Average Price | H1 2024 Average Price | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | LME Electrolytic Nickel 3-Month Futures | 15,574 USD/ton | 17,750 USD/ton | -12.3% | | LME Cathode Copper 3-Month Futures | 9,446 USD/ton | 9,207 USD/ton | +2.6% | | Shanghai Futures Exchange Electrolytic Nickel Settlement Price (incl. tax) | 124,596 RMB/ton | 136,296 RMB/ton | -8.6% | | Shanghai Yangtze River Nonferrous Metals Spot Market Electrolytic Nickel Spot Price (incl. tax) | 126,015 RMB/ton | 137,660 RMB/ton | -8.5% | | Shanghai Futures Exchange Cathode Copper Settlement Price (incl. tax) | 77,514 RMB/ton | 74,539 RMB/ton | +4.0% | | Shanghai Yangtze River Nonferrous Metals Spot Market Cathode Copper Spot Price (incl. tax) | 77,718 RMB/ton | 74,569 RMB/ton | +4.2% | - Domestic price trends for electrolytic nickel and cathode copper were largely consistent with international markets[19](index=19&type=chunk) [Business Review](index=8&type=section&id=Business%20Review) The Group's operating revenue grew **4.9%** to **RMB 1,117.9 million**, but net profit attributable to shareholders fell **50.2%** to **RMB 71.6 million**, despite increased sales volumes for electrolytic nickel and cathode copper H1 2025 Key Operating Data | Metric | H1 2025 | H1 2024 | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Operating Revenue | RMB 1,117.9 million | RMB 1,065.4 million | +4.9% | | Net Profit Attributable to Company Shareholders | RMB 71.6 million | RMB 144.0 million | -50.2% | | Electrolytic Nickel Production Volume | 6,030 tons | 4,757 tons | +26.7% | | Cathode Copper Production Volume | 3,815 tons | 4,102 tons | -7.0% | | Electrolytic Nickel Sales Volume | 5,672 tons | 4,378 tons | +29.6% | | Cathode Copper Sales Volume | 4,559 tons | 3,008 tons | +51.6% | | Electrolytic Nickel Average Selling Price (excl. tax) | RMB 110,688/ton | RMB 124,230/ton | -10.9% | | Cathode Copper Average Selling Price (excl. tax) | RMB 69,243/ton | RMB 69,407/ton | -0.2% | [Outlook and Strategies](index=9&type=section&id=Outlook%20and%20Strategies) For H2 2025, the Group plans to boost production, optimize marketing for higher prices, upgrade processes for environmental compliance, and enhance efficiency by controlling non-productive expenses - In H2 2025, the plan is to produce **12,000 tons of electrolytic nickel** and **9,900 tons of cathode copper**, striving to complete the full-year production plan[21](index=21&type=chunk) - The Group will strengthen analysis of international and domestic electrolytic nickel and cathode copper market price trends, implementing more flexible and proactive marketing strategies to achieve higher product selling prices[21](index=21&type=chunk) - The Group is committed to upgrading major production processes to adapt to domestic economic restructuring, development model transformation, and higher national and Xinjiang government requirements for safety production and environmental protection[21](index=21&type=chunk) - The Group will tap internal potential, strive to increase production and revenue, strictly control non-productive expenses, further reduce production costs and expenditures, and enhance economic efficiency, management level, and overall operational efficiency[21](index=21&type=chunk) [Mineral Exploration, Mining Development, and Ore Extraction Activities](index=9&type=section&id=Mineral%20Exploration%2C%20Mining%20Development%2C%20and%20Ore%20Extraction%20Activities) The Group invested significantly in mineral exploration, development, and extraction, with total expenditures of approximately **RMB 4.1 million** for exploration, **RMB 31.1 million** for development, and **RMB 88.3 million** for extraction - Total expenditure on mineral exploration activities was approximately **RMB 4.1 million**, primarily for surface and underground drilling[22](index=22&type=chunk) - Total expenditure on mining development activities was approximately **RMB 31.1 million**, primarily for tunneling construction[23](index=23&type=chunk) - Total expenditure on ore extraction operations was approximately **RMB 88.3 million**, with Kalatongke Mining producing **570,133 tons of ore** and Xinjiang Yakesi and Hami Jubao producing **667,412 tons of ore**[25](index=25&type=chunk) [Financial Review and Analysis](index=10&type=section&id=Financial%20Review%20and%20Analysis) Turnover increased, but gross profit and margin declined due to lower electrolytic nickel prices and higher costs, while sales expenses rose, administrative expenses stabilized, net finance costs increased, and investment income improved H1 2025 Sales Details by Product | Product Name | H1 2025 Sales Volume (tons) | H1 2025 Amount (RMB thousand) | H1 2024 Sales Volume (tons) | H1 2024 Amount (RMB thousand) | | :--- | :--- | :--- | :--- | :--- | | Electrolytic Nickel | 5,672 | 627,861 | 4,378 | 531,526 | | Cathode Copper | 4,559 | 315,691 | 3,008 | 208,801 | | Copper Concentrate | 3,764 | 67,951 | 4,689 | 64,174 | | Other Products | - | 88,955 | - | 249,883 | | Total Main Business Revenue | - | 1,100,458 | - | 1,054,384 | | Gross Profit | - | 230,534 | - | 323,298 | | Gross Profit Margin | - | 21.0% | - | 30.2% | - Gross profit from main operations was **RMB 230.5 million**, a decrease of approximately **RMB 92.8 million** from the same period last year; the gross profit margin for main operations was approximately **21.0%**, a decrease of approximately **9.2 percentage points** from the same period last year[28](index=28&type=chunk) - Sales and marketing expenses increased by **20.9%** year-on-year to **RMB 7.8 million**, primarily due to higher transportation costs resulting from increased production and sales volumes[29](index=29&type=chunk) - Net finance costs increased to **RMB 20.5 million** (H1 2024: **RMB 16.3 million**), mainly due to increased bank borrowings from the acquisition of Huaou Mining's equity[32](index=32&type=chunk) - Investment income was approximately **RMB 14.2 million**, an increase of **RMB 2.8 million** from the same period last year, primarily due to a reduction in nickel concentrate inventory purchased from Hexin Mining and the realization of internal unrealized profits at the consolidated level[33](index=33&type=chunk) [Financial Position](index=12&type=section&id=Financial%20Position) As of June 30, 2025, total assets grew **2.2%**, operating cash inflow increased, but significant investing cash outflow occurred due to fixed asset purchases and the Huaou Mining acquisition, while financing cash inflow rose from increased borrowings H1 2025 Financial Position Overview | Metric | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Shareholders' Equity | 6,197.7 | 7,220.8 | -14.2% | | Total Assets | 9,880.7 | 9,644.2 | +2.2% | | Net Cash Inflow from Operating Activities | 194.2 | 158.4 | +22.6% | | Net Cash Outflow from Investing Activities | 324.1 | 321.7 (Acquisition of fixed assets) | - | | Net Cash Inflow from Financing Activities | 94.4 | - | - | - Net cash outflow from investing activities was approximately **RMB 324.1 million**, primarily due to cash outflow of **RMB 321.7 million** for the acquisition of fixed and long-term assets during the period[34](index=34&type=chunk) - Net cash inflow from financing activities was approximately **RMB 94.4 million**, mainly due to increased cash inflow from bank borrowings, offset by cash outflow for the acquisition of Huaou Mining and repayment of loans and interest[34](index=34&type=chunk) [Liquidity and Financial Resources](index=13&type=section&id=Liquidity%20and%20Financial%20Resources) As of June 30, 2025, cash and cash equivalents decreased, while total borrowings significantly increased, resulting in a substantial rise in net debt and gearing ratio, and a slight decline in the current ratio H1 2025 Liquidity and Financial Resources | Metric | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | Change | | :--- | :--- | :--- | :--- | | Total Cash and Cash Equivalents | 547.0 | 582.4 | -6.1% | | Total Borrowings | 1,966.2 | 764.0 | +157.3% | | Net Debt | 1,419.2 | 181.6 | +681.5% | | Gearing Ratio | 18.6% | 2.5% | +16.1 percentage points | | Current Ratio | 1.4 times | 1.5 times | -0.1 times | - Total borrowings were approximately **RMB 1,966.2 million**, including loans from the Company, Xinjiang Yakesi, Kalatongke Mining, and Huaou Mining[36](index=36&type=chunk) [Risk Management](index=13&type=section&id=Risk%20Management) The Group manages risks from commodity price volatility, exchange rate fluctuations, stricter environmental policies, and interest rate changes through continuous monitoring, process upgrades, and flexible financial strategies - Commodity price risk: Influenced by international and domestic market prices, global supply and demand changes, economic cycles, and currency market fluctuations, which may significantly impact turnover and comprehensive income[37](index=37&type=chunk) - Exchange rate fluctuation risk: Transactions are conducted in RMB, but exchange rate fluctuations may affect international and domestic commodity prices and impact operating performance[38](index=38&type=chunk) - Environmental risk: Chinese government environmental inspections may increase enterprise output volatility, and the Group is committed to upgrading production processes to meet higher standards[39](index=39&type=chunk) - Interest rate risk: Primarily arises from bank borrowings, with floating-rate borrowings exposing the Group to cash flow interest rate risk. As of June 30, 2025, interest-bearing debt mainly consisted of RMB-denominated floating-rate borrowings, totaling **RMB 1,965.3 million**[41](index=41&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=14&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company%27s%20Listed%20Securities) Neither the Company nor its subsidiaries purchased, sold, or redeemed any of the Company's listed securities during the period - Neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[42](index=42&type=chunk) [Pledge of Assets](index=14&type=section&id=Pledge%20of%20Assets) As of June 30, 2025, the Group had no pledged or mortgaged assets - As of June 30, 2025, the Group had no pledged or mortgaged assets[43](index=43&type=chunk) [Contingent Liabilities](index=14&type=section&id=Contingent%20Liabilities) The Group had no other significant contingent liabilities as of June 30, 2025, beyond those disclosed in the financial statement notes - Except for those disclosed in Notes X, 2(4) and XIII to the financial statements, the Group had no other significant contingent liabilities as of June 30, 2025[44](index=44&type=chunk) [Major Acquisitions and Disposals](index=14&type=section&id=Major%20Acquisitions%20and%20Disposals) The Group acquired a **51%** equity interest in Huaou Mining for approximately **RMB 1,098.08 million**, making it a non-wholly-owned subsidiary, with no other major acquisitions or disposals during the period - The acquisition of a **51%** equity interest in Huaou Mining was completed on June 12, 2025, for approximately **RMB 1,098.08 million**, making Huaou Mining a non-wholly-owned subsidiary of the Company[45](index=45&type=chunk) - Apart from the aforementioned acquisition, the Group had no other major acquisitions or disposals[46](index=46&type=chunk) [Events After the Balance Sheet Date](index=14&type=section&id=Events%20After%20the%20Balance%20Sheet%20Date) Post-balance sheet date, the Group acquired a **2.4167%** equity interest in Xinjiang Zhongxin Mining Co., Ltd. for zero consideration, making it a wholly-owned subsidiary - On June 26, 2025, the Group signed an equity transfer agreement with Sichuan Aokai Investment Development Co., Ltd. to acquire a **2.4167%** equity interest in Zhongxin Mining for zero consideration[434](index=434&type=chunk) - The transaction completed industrial and commercial change registration on **August 14, 2025**, making Zhongxin Mining a wholly-owned subsidiary of the Group[434](index=434&type=chunk) [Historical Capital Expenditure](index=15&type=section&id=Historical%20Capital%20Expenditure) H1 2025 total capital expenditure was **RMB 490.623 million**, mainly for Huaou Mining's mining, beneficiation construction, and related operations H1 2025 Capital Expenditure Breakdown | Business | Amount (RMB thousand) | Percentage of Total (%) | | :--- | :--- | :--- | | Kalatongke Mining's Mining, Beneficiation, Smelting, and Related Operations | 31,218 | 6.4% | | Fukang Smelter's Refining and Related Operations | 60,260 | 12.3% | | Xinjiang Yakesi's Mining and Beneficiation Operations | 36,467 | 7.4% | | Huaou Mining's Mining and Beneficiation Construction Projects, Beneficiation, and Related Operations | 362,678 | 73.9% | | **Total** | **490,623** | **100%** | [Group's Plans for Major Investments or Capital Asset Acquisitions in H2 2025](index=15&type=section&id=Group%27s%20Plans%20for%20Major%20Investments%20or%20Capital%20Asset%20Acquisitions%20in%20H2%202025) The Group plans **RMB 547.6 million** in H2 2025 investments for capacity enhancement, automation, and construction at various mines and smelters, funded by internal operating capital H2 2025 Major Investment Plan | Project | Planned Investment (RMB million) | | :--- | :--- | | Kalatongke Mining: Improvement of Mining, Beneficiation, and Smelting Operations | 123.2 | | Fukang Smelter: Improvement of Refining Capacity and Automation Upgrades | 137.9 | | Xinjiang Yakesi: Enhancement of Production Capacity and Automation Level | 48.3 | | Huaou Mining: Mining and Beneficiation Construction Projects, Beneficiation, and Related Projects | 237.3 | | Capital Expenditure for Fixed Asset Acquisition | 38.9 | | **Total** | **547.6** | - The funding for the above plans will be entirely from the Group's **internal operating capital**[54](index=54&type=chunk) [Commitments](index=15&type=section&id=Commitments) The Group's commitments as of June 30, 2025, are detailed in Note XIII of the unaudited consolidated interim financial statements - The Group's commitments as of June 30, 2025, are disclosed in Note XIII to the unaudited consolidated interim financial statements[56](index=56&type=chunk) [Directors' Interests](index=16&type=section&id=Directors%27%20Interests) This chapter details directors' and supervisors' interests in company shares and debentures as of June 30, 2025, including share appreciation rights, noting no significant contractual interests or rights exercised during the period - As of June 30, 2025, no director or supervisor of the Company had any direct or indirect material interest in any contract significant to the Group's business entered into by the Company, its holding company, its subsidiaries, or any of its fellow subsidiaries during the period[58](index=58&type=chunk) Directors'/Supervisors' Long Positions in the Company's Shares or Related Shares as of June 30, 2025 | Director/Supervisor | Personal Interest | Corporate Interest | Total Interest | Share Class | Approximate % of Relevant Share Class | Approximate % of Total Share Capital | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Zhou Chuanyou | - | 480,924,000 | 345,924,000 | Domestic Shares | 27.47% | 15.65% | | | - | - | 135,000,000 | H Shares | 14.20% | 6.11% | - The number of grantees for the share appreciation rights incentive scheme has been adjusted from **150 to 96**, and the number of effective rights from **63,500,000 to 34,685,000**[62](index=62&type=chunk)[64](index=64&type=chunk) - The exercise price of share appreciation rights has been adjusted from **HKD 1.58/right to HKD 1.31/right**, primarily due to the company's payment of final dividends for 2022, 2023, and 2024[62](index=62&type=chunk)[63](index=63&type=chunk)[64](index=64&type=chunk) - No share appreciation rights were exercised during the period[65](index=65&type=chunk) [Share Capital and Dividends](index=19&type=section&id=Share%20Capital%20and%20Dividends) This chapter outlines the company's share capital structure as of June 30, 2025, including domestic and H shares, and major shareholder interests, noting no share capital changes or interim dividend recommendations for 2025 Share Capital Structure as of June 30, 2025 | Share Class | Number of Issued Shares | Percentage of Share Capital (%) | Par Value (RMB thousand) | | :--- | :--- | :--- | :--- | | Domestic Shares of RMB 0.25 each | 1,259,420,000 | 56.99 | 314,855 | | H Shares of RMB 0.25 each | 950,580,000 | 43.01 | 237,645 | | **Total** | **2,210,000,000** | **100.00** | **552,500** | - As of June 30, 2025, there were **no changes in the Company's share capital**[329](index=329&type=chunk) Major Shareholders' Share Interests as of June 30, 2025 | Name | Number of Shares Held | Share Class | Approximate % of Relevant Share Class Held | Approximate % of Total Share Capital | | :--- | :--- | :--- | :--- | :--- | | Xinjiang Nonferrous Metals Industry (Group) Co., Ltd. | 885,204,000 (L) | Domestic Shares | 70.29 | 40.06 | | Shanghai Yilian | 282,896,000 (L) | Domestic Shares | 22.46 | 12.80 | | CICC Investment | 63,028,000 (L) | Domestic Shares | 5.00 | 2.85 | | | 135,000,000 (L) | H Shares | 14.20 | 6.11 | - The Board **does not recommend any interim dividend** for 2025[72](index=72&type=chunk) [Employees and Benefits](index=21&type=section&id=Employees%20and%20Benefits) As of June 30, 2025, the Group had **1,730 employees**, predominantly production staff, receiving wages, bonuses, and allowances, and participating in comprehensive social insurance schemes Employee Count by Department as of June 30, 2025 | Department | Number of Employees | Percentage of Total (%) | | :--- | :--- | :--- | | Management and Administration | 149 | 8.61% | | Engineering and Technical Personnel | 170 | 9.83% | | Production Personnel | 1,133 | 65.49% | | Maintenance | 209 | 12.08% | | Inspection | 60 | 3.47% | | Sales | 9 | 0.52% | | **Total Employees** | **1,730** | **100%** | - Employee remuneration packages include wages, bonuses, and allowances, and participation in social insurance contribution schemes[73](index=73&type=chunk) - Social insurance contribution percentages: **pension insurance 16%**, **medical insurance 6.5% to 8%**, **unemployment insurance 0.5%**, **housing provident fund 12%**, **enterprise annuity 8%**, and **work injury insurance 1.04% to 2.85%**[73](index=73&type=chunk) [Corporate Governance](index=22&type=section&id=Corporate%20Governance) This chapter affirms the company's commitment to high corporate governance standards, full compliance with Listing Rules, effective Board and Audit Committee operations, and the transfer of Supervisory Committee functions to the Audit Committee - The Company **fully complied with all code provisions** of the Corporate Governance Code set out in Appendix C1 of the Listing Rules during the period[76](index=76&type=chunk) - The Board of Directors comprises **nine directors** and held **3 meetings** during the period, with an attendance rate of **89%**[77](index=77&type=chunk) - The Supervisory Committee was **abolished effective June 27, 2025**, with its **functions now exercised by the Board's Audit Committee**[78](index=78&type=chunk) - All directors, supervisors, and senior management of the Company **consistently complied with the requirements of the Model Code** for Securities Transactions by Directors of Listed Issuers during the period[79](index=79&type=chunk) - The Audit Committee reviewed the Group's unaudited financial results and interim report for the period and **deemed them compliant with relevant accounting standards and adequately disclosed**[80](index=80&type=chunk) [Consolidated and Company Balance Sheets (Unaudited)](index=22&type=section&id=Consolidated%20and%20Company%20Balance%20Sheets%20(Unaudited)) This chapter presents the unaudited balance sheets as of June 30, 2025, showing consolidated total assets of **RMB 9.881 billion** (up **2.2%**), total liabilities of **RMB 3.683 billion** (with increased long-term borrowings), and total shareholders' equity of **RMB 6.198 billion** Key Consolidated Balance Sheet Data | Item | June 30, 2025 (RMB) | December 31, 2024 (Restated) (RMB) | | :--- | :--- | :--- | | Total Assets | 9,880,663,775.81 | 9,644,157,242.55 | | Total Current Assets | 2,181,457,938.81 | 2,296,227,223.67 | | Total Non-current Assets | 7,699,205,837.00 | 7,347,930,018.88 | | Total Liabilities | 3,682,931,609.08 | 2,423,330,479.10 | | Total Current Liabilities | 1,520,328,340.23 | 1,574,509,600.12 | | Total Non-current Liabilities | 2,162,603,268.85 | 848,820,878.98 | | Total Shareholders' Equity | 6,197,732,166.73 | 7,220,826,763.45 | | Total Equity Attributable to Parent Company Shareholders | 5,443,701,386.15 | 6,463,116,439.99 | - Long-term borrowings significantly increased from **RMB 96,000,000.00** on December 31, 2024, to **RMB 1,419,796,776.23** on June 30, 2025[83](index=83&type=chunk) - Construction in progress increased from **RMB 730,737,155.40** on December 31, 2024, to **RMB 1,188,694,727.52** on June 30, 2025[81](index=81&type=chunk) [Consolidated and Company Income Statements (Unaudited)](index=25&type=section&id=Consolidated%20and%20Company%20Income%20Statements%20(Unaudited)) This chapter presents the unaudited income statements for H1 2025, showing consolidated operating revenue up **4.9%**, but net profit down **47.8%**, and net profit attributable to parent company shareholders down **50.2%**, with basic EPS at **RMB 0.032** Key Consolidated Income Statement Data | Item | For the Six Months Ended June 30, 2025 (RMB) | For the Six Months Ended June 30, 2024 (Restated) (RMB) | | :--- | :--- | :--- | | Total Operating Revenue | 1,117,897,502.64 | 1,065,356,736.99 | | Total Operating Costs | 1,052,091,981.21 | 891,959,207.75 | | Operating Profit | 84,012,161.70 | 172,935,606.86 | | Total Profit | 83,787,970.16 | 173,928,612.29 | | Net Profit | 67,966,645.46 | 130,122,812.03 | | Net Profit Attributable to Parent Company Owners | 71,646,188.34 | 143,957,457.02 | | Basic Earnings Per Share (RMB/share) | 0.032 | 0.065 | - A business combination under common control occurred during the period, with the acquiree's net loss before combination being **RMB 2,837,715.47**[87](index=87&type=chunk) [Consolidated and Company Cash Flow Statements (Unaudited)](index=28&type=section&id=Consolidated%20and%20Company%20Cash%20Flow%20Statements%20(Unaudited)) This chapter presents the unaudited cash flow statements for H1 2025, showing increased operating cash flow, significantly higher investing cash outflow (due to fixed assets and Huaou Mining acquisition), and positive financing cash flow from increased borrowings Key Consolidated Cash Flow Statement Data | Item | For the Six Months Ended June 30, 2025 (RMB) | For the Six Months Ended June 30, 2024 (Restated) (RMB) | | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | 194,249,027.21 | 158,390,443.47 | | Net Cash Flow from Investing Activities | (324,067,216.94) | (130,006,212.75) | | Net Cash Flow from Financing Activities | 94,448,895.33 | (13,919,851.11) | | Net Increase in Cash and Cash Equivalents | (35,369,294.40) | 14,464,379.61 | | Cash and Cash Equivalents at End of Period | 547,036,529.43 | 498,167,148.99 | - Net cash outflow from investing activities increased, mainly due to cash payments of **RMB 321,660,201.32** for the acquisition of fixed assets and other long-term assets, and **RMB 1,098,084,000.00** for the acquisition or disposal of subsidiaries and other operating units by the parent company[90](index=90&type=chunk) - Subtotal cash inflow from financing activities was **RMB 1,451,296,776.23**, primarily from borrowings[91](index=91&type=chunk) [Consolidated Statement of Changes in Shareholders' Equity (Unaudited)](index=29&type=section&id=Consolidated%20Statement%20of%20Changes%20in%20Shareholders%27%20Equity%20(Unaudited)) This chapter presents the unaudited consolidated statement of changes in shareholders' equity for H1 2025, showing a period-end total of **RMB 6.198 billion**, a decrease from the restated opening balance, mainly due to a business combination under common control and net profit changes Key Consolidated Statement of Changes in Shareholders' Equity Data | Item | Opening Balance as of January 1, 2025 (Restated) (RMB) | Changes (RMB) | Closing Balance as of June 30, 2025 (RMB) | | :--- | :--- | :--- | :--- | | Share Capital | 552,500,000.00 | - | 552,500,000.00 | | Capital Reserve | 5,144,151,097.76 | (1,097,762,726.99) | 4,046,388,370.77 | | Special Reserve | 1,300,130.31 | 8,222,795.40 | 9,522,925.71 | | Surplus Reserve | 276,250,000.00 | - | 276,250,000.00 | | Retained Earnings | 488,915,211.92 | 70,124,877.75 | 559,040,089.67 | | Total Equity Attributable to Company Shareholders | 6,463,116,439.99 | (1,019,415,053.84) | 5,443,701,386.15 | | Non-controlling Interests | 757,710,323.46 | (3,679,542.88) | 754,030,780.58 | | **Total Shareholders' Equity** | **7,220,826,763.45** | **(1,023,094,596.72)** | **6,197,732,166.73** | - A business combination under common control resulted in a decrease in capital reserve of **RMB 1,098,084,000.00** and a decrease in retained earnings of **RMB 1,521,310.59**[93](index=93&type=chunk) - Total comprehensive profit was **RMB 67,966,645.46**, of which net profit attributable to parent company shareholders was **RMB 71,646,188.34**[93](index=93&type=chunk) [Company Statement of Changes in Shareholders' Equity (Unaudited)](index=30&type=section&id=Company%20Statement%20of%20Changes%20in%20Shareholders%27%20Equity%20(Unaudited)) This chapter presents the unaudited company statement of changes in shareholders' equity for H1 2025, showing a period-end total of **RMB 5.258 billion**, a decrease from the opening balance, mainly due to a capital reserve reduction from a business combination under common control Key Company Statement of Changes in Shareholders' Equity Data | Item | Opening Balance as of January 1, 2025 (RMB) | Changes (RMB) | Closing Balance as of June 30, 2025 (RMB) | | :--- | :--- | :--- | :--- | | Share Capital | 552,500,000.00 | - | 552,500,000.00 | | Capital Reserve | 4,254,754,857.49 | (212,502,900.00) | 4,042,573,230.50 | | Special Reserve | 1,300,130.31 | 1,659,490.79 | 2,959,621.10 | | Surplus Reserve | 276,250,000.00 | - | 276,250,000.00 | | Retained Earnings | 345,807,792.74 | 37,481,383.62 | 383,289,176.36 | | **Total Shareholders' Equity** | **5,430,612,780.54** | **(173,362,052.59)** | **5,257,572,027.96** | - A business combination under common control resulted in a decrease in capital reserve of **RMB 212,502,900.00**[94](index=94&type=chunk) - Net comprehensive profit was **RMB 37,481,383.62**[94](index=94&type=chunk) [Notes to the Financial Statements (Unaudited)](index=31&type=section&id=Notes%20to%20the%20Financial%20Statements%20(Unaudited)) This chapter provides comprehensive notes to the unaudited financial statements, detailing company information, accounting policies, estimates, taxation, major consolidated and company financial items, interests in other entities, financial instruments, fair value, capital management, related party transactions, share-based payments, segment information, commitments, contingencies, and post-balance sheet events [Company Information](index=32&type=section&id=Company%20Information) This section details Xinjiang Xinxin Mining Industry Co., Ltd.'s 2005 establishment, share capital evolution to **RMB 552.5 million**, and primary business in mining, beneficiation, smelting, and sales of copper, nickel, and vanadium - The Company was jointly established on **September 1, 2005**, by Xinjiang Nonferrous Metals Industry (Group) Co., Ltd. and other entities[95](index=95&type=chunk) - Following new share issuance in 2006 and share split and H-share issuance in 2007, the total share capital increased to **RMB 552,500,000.00** after issuance[96](index=96&type=chunk) - The Group's business scope primarily involves the mining, beneficiation, smelting, and processing and sales of copper, nickel, vanadium, and other non-ferrous metals[97](index=97&type=chunk) [Basis of Preparation of Financial Statements](index=33&type=section&id=Basis%20of%20Preparation%20of%20Financial%20Statements) The financial statements are prepared on a going concern basis, adhering to Chinese Enterprise Accounting Standards and relevant regulations, with some compliance to the Hong Kong Companies Ordinance - The Group's financial statements are prepared in accordance with the "Enterprise Accounting Standards" promulgated by the Ministry of Finance, along with their application guidelines, interpretations, and other relevant regulations[99](index=99&type=chunk) - These financial statements are prepared on a **going concern basis**[101](index=101&type=chunk) [Significant Accounting Policies and Accounting Estimates](index=33&type=section&id=Significant%20Accounting%20Policies%20and%20Accounting%20Estimates) This section outlines the Group's significant accounting policies and estimates, covering financial instruments, inventory, asset depreciation/amortization, impairment, revenue recognition, employee compensation, and share-based payments, along with key assumptions and risks - Financial assets are classified into three categories based on the business model for managing them and their contractual cash flow characteristics: measured at amortized cost, measured at fair value through other comprehensive income, and measured at fair value through profit or loss[114](index=114&type=chunk) - Inventories include raw materials, work-in-progress, self-produced semi-finished goods, and finished goods, presented at the lower of cost and net realizable value, with the cost of issued inventory calculated using the weighted average method[129](index=129&type=chunk)[130](index=130&type=chunk) - Depreciation of fixed assets, except for mine shafts and structures, is calculated using the straight-line method; mine shafts and structures are depreciated using the production method[145](index=145&type=chunk)[147](index=147&type=chunk) - Intangible assets include mining rights, exploration rights, and land use rights; mining rights are amortized using the production method, and land use rights are amortized using the straight-line method[153](index=153&type=chunk)[154](index=154&type=chunk)[156](index=156&type=chunk) - Revenue is recognized when performance obligations in the contract are satisfied, i.e., when the customer obtains control of the related goods or services[180](index=180&type=chunk) - The Group's acquisition of Xinjiang Huaou Mining Co., Ltd. constituted a **business combination under common control**, accounted for using the cost method, and resulted in the **restatement of the 2024 consolidated financial statements**[214](index=214&type=chunk) [Taxation](index=71&type=section&id=Taxation) This section details the Group's and its subsidiaries' applicable tax types and rates, including VAT, resource tax, and corporate income tax, with most subsidiaries benefiting from a **15%** preferential corporate income tax rate Major Tax Types and Rates | Tax Type | Tax Base | Tax Rate/Levy Rate/Tax Amount | | :--- | :--- | :--- | | Value-Added Tax (VAT) | Taxable Value Added | 5%、6%、9%、13% | | Resource Tax | Sales Revenue of Taxable Resource Products | 4%、8% | | Urban Maintenance and Construction Tax | Amount of Turnover Tax Payable | 5%、1% | | Education Surcharge | Amount of Turnover Tax Payable | 3% | | Local Education Surcharge | Amount of Turnover Tax Payable | 2% | | Property Tax | Taxable Residual Value, Taxable Rental Income | 1.2%、12% | | Land Use Tax | Actual Land Area Used | 12 RMB/㎡、4.2 RMB/㎡、1.5 RMB/㎡、1.05 RMB/㎡ | | Environmental Protection Tax | Emission Volume of Different Pollutants | 1.2 RMB/unit pollution equivalent | | Corporate Income Tax | Taxable Income | 15%、20%、25% | - The Company, Xinjiang Yakesi, Hami Jubao, Xinjiang Kalatongke Mining Co., Ltd., and Xinjiang Huaou Mining Co., Ltd. are subject to a **15%** corporate income tax rate, as they are high-tech enterprises or comply with the encouraged industry catalog[218](index=218&type=chunk)[219](index=219&type=chunk)[222](index=222&type=chunk) - Xinjiang Mengxi Mining Co., Ltd. is subject to a **20%** corporate income tax rate (small-profit enterprise), while Xinjiang Zhongxin Mining Co., Ltd., Beijing Xinding Shunze High-Tech Co., Ltd., and Shaanxi Xinxin Mining Co., Ltd. are subject to a **25%** corporate income tax rate[218](index=218&type=chunk)[222](index=222&type=chunk) [Notes to Major Items in Consolidated Financial Statements](index=75&type=section&id=Notes%20to%20Major%20Items%20in%20Consolidated%20Financial%20Statements) This section provides detailed notes on major consolidated financial statement items, including cash, receivables, inventories, investments, fixed assets, construction in progress, intangible assets, goodwill, deferred taxes, borrowings, payables, compensation, provisions, revenue, costs, expenses, investment income, income tax, EPS, and cash flow, with significant growth in construction in progress and long-term borrowings indicating investment expansion H1 2025 Overview of Major Items in Consolidated Financial Statements | Item | Amount (RMB) | | :--- | :--- | | Cash and Bank Balances | 629,154,892.84 | | Accounts Receivable | 277,614,607.74 | | Inventories | 1,014,597,880.45 | | Long-term Equity Investments | 205,098,565.14 | | Fixed Assets | 3,400,041,671.26 | | Construction in Progress | 1,188,694,727.52 | | Intangible Assets | 2,458,022,037.62 | | Goodwill | 108,081,096.95 | | Short-term Borrowings | 200,137,777.78 | | Long-term Borrowings | 1,419,796,776.23 | | Operating Revenue | 1,117,897,502.64 | | Operating Costs | 883,484,612.61 | | Net Profit | 67,966,645.46 | | Net Cash Flow from Operating Activities | 194,249,027.21 | | Net Cash Flow from Investing Activities | (324,067,216.94) | | Net Cash Flow from Financing Activities | 94,448,895.33 | - Construction in progress increased by **RMB 429,225,867.62** during the period, primarily for the Karqiar Southwest Fluorite Mine project[284](index=284&type=chunk) - Long-term borrowings significantly increased, mainly due to the acquisition of Huaou Mining's equity[32](index=32&type=chunk) - Investment income increased, primarily due to the realization of internal unrealized profits at the consolidated level during the period[33](index=33&type=chunk) [Interests in Other Entities](index=140&type=section&id=Interests%20in%20Other%20Entities) This section details the Group's subsidiaries and joint ventures, including their capital, business, and shareholdings, noting Xinjiang Mengxi Mining Co., Ltd.'s deregistration and providing key financial data for significant non-wholly-owned entities Overview of Major Subsidiaries | Subsidiary Name | Shareholding Percentage (Direct) (%) | Acquisition Method | | :--- | :--- | :--- | | Xinjiang Yakesi Resources Development Co., Ltd. | 99.51 | Business combination not under common control | | Hami Jubao Resources Development Co., Ltd. | 98.96 | Business combination not under common control | | Xinjiang Zhongxin Mining Co., Ltd. | 97.58 | Business combination not under common control | | Xinjiang Kalatongke Mining Co., Ltd. | 100.00 | Establishment or Investment | | Shaanxi Xinxin Mining Co., Ltd. | 51.00 | Business combination not under common control | | Xinjiang Huaou Mining Co., Ltd. | 51.00 | Business combination under common control | - Xinjiang Mengxi Mining Co., Ltd. was deregistered in **April 2025**[366](index=366&type=chunk)[367](index=367&type=chunk) - Important non-wholly-owned subsidiaries include **Xinjiang Zhongxin Mining Co., Ltd.**, **Shaanxi Xinxin Mining Co., Ltd.**, and **Xinjiang Huaou Mining Co., Ltd.**[368](index=368&type=chunk) - The significant joint venture is Hexin Mining, with a **50.00%** shareholding, accounted for using the equity method[372](index=372&type=chunk) [Financial Instruments and Risks](index=145&type=section&id=Financial%20Instruments%20and%20Risks) This section details the Group's market risks (foreign exchange, interest rate, concentration), credit risk, and liquidity risk, and their management strategies, noting RMB-settled business, floating-rate borrowing interest risk, and credit/liquidity control measures - The Group's main operations are located in China, with primary business settled in RMB, and no forward foreign exchange contracts or currency swap contracts have been signed[376](index=376&type=chunk) - Interest rate risk primarily arises from bank borrowings; as of June 30, 2025, interest-bearing debt consisted of RMB-denominated floating-rate borrowings, totaling **RMB 1,965,296,776.23**[377](index=377&type=chunk) - Concentration risk: For the six months ended June 30, 2025, **71.98%** of sales revenue came from the top three customers[378](index=378&type=chunk) - Credit risk primarily arises from cash and bank balances, notes receivable, accounts receivable, receivables financing, other receivables, and financial guarantee contracts, with the maximum credit risk exposure being a financial guarantee amount of **RMB 25,000,000.00**[379](index=379&type=chunk) Undiscounted Contractual Cash Flows of Financial Liabilities by Maturity as of June 30, 2025 | Item | Within One Year (RMB) | One to Two Years (RMB) | Two to Five Years (RMB) | Over Five Years (RMB) | Total (RMB) | | :--- | :--- | :--- | :--- | :--- | :--- | | Short-term Borrowings | 202,648,922.92 | - | - | - | 202,648,922.92 | | Long-term Borrowings | 355,589,500.00 | 292,349,028.98 | 1,233,402,864.76 | 324,115,488.11 | 2,205,456,881.85 | | Financial Guarantees | 25,000,000.00 | - | - | - | 25,000,000.00 | [Fair Value Disclosures](index=150&type=section&id=Fair%20Value%20Disclosures) This section discloses recurring fair value measurements of assets and liabilities as of June 30, 2025, categorized by input observability, with receivables financing (notes receivable) valued using a discounted cash flow model as Level 3 Assets and Liabilities Measured at Fair Value on a Recurring Basis as of June 30, 2025 | Item | Level 1 Fair Value Measurement (RMB) | Level 2 Fair Value Measurement (RMB) | Level 3 Fair Value Measurement (RMB) | Total (RMB) | | :--- | :--- | :--- | :--- | :--- | | Receivables Financing - Notes Receivable | - | 106,418,104.33 | - | 106,418,104.33 | | Financial Liabilities at Fair Value Through Profit or Loss | 224,737.71 | - | - | 224,737.71 | - Receivables financing (notes receivable) are valued using a discounted cash flow model, with a discount rate of **3.45%**, which moves inversely with fair value and is considered an unobservable input[392](index=392&type=chunk) [Capital Management](index=154&type=section&id=Capital%20Management) This section outlines the Group's capital management goal to ensure continuous operation and shareholder returns, maintaining an optimal capital structure by monitoring the gearing ratio, which was **18.63%** as of June 30, 2025, within the **2% to 30%** target range - The objective of the Group's capital management policy is to ensure its continuous operation, thereby providing returns to shareholders and benefiting other stakeholders, while maintaining an optimal capital structure to reduce the cost of capital[394](index=394&type=chunk) Gearing Ratio | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Borrowings (RMB) | 1,966,187,401.20 | 763,999,147.22 | | Net Debt (RMB) | 1,419,150,871.77 | 181,593,323.39 | | Shareholders' Equity (RMB) | 6,197,732,166.73 | 7,220,826,763.45 | | Total Capital (RMB) | 7,616,883,038.50 | 7,402,420,086.84 | | Gearing Ratio | 18.63% | 2.45% | - The Group's strategy is to maintain the gearing ratio between **2% and 30%**[394](index=394&type=chunk) [Related Parties and Related Party Transactions](index=155&type=section&id=Related%20Parties%20and%20Related%20Party%20Transactions) This section details the Group's related party relationships and transactions, including goods, services, leases, guarantees, and key management compensation, all priced based on mutual agreement - The Company's parent company is Xinjiang Nonferrous Metals Industry (Group) Co., Ltd., with a shareholding of **40.06%**[395](index=395&type=chunk) - Related party transaction pricing policy: Sales prices, purchase prices, services, and leases with related parties are all based on prices agreed upon by both parties[400](index=400&type=chunk) H1 2025 Major Related Party Transaction Amounts | Transaction Type | For the Six Months Ended June 30, 2025 (RMB) | | :--- | :--- | | Purchase of Goods | 57,014,984.14 | | Receipt of Services | 84,648,854.29 | | Sale of Products and Energy | 323,354,367.10 | | Provision of Services | - | | Related Lease Income | - | | Payment for Related Lease Liabilities | 594,489.40 | | Amount of Related Party Guarantees | 25,000,000.00 | - Key management personnel compensation totaled **RMB 1,551,913.41**[408](index=408&type=chunk)[411](index=411&type=chunk) [Share-based Payments](index=173&type=section&id=Share-based%20Payments) This section describes the company's H-share appreciation rights incentive scheme, adjusted due to personnel changes and dividends, affecting grantees, effective rights, and exercise price, with no rights exercised as of June 30, 2025 - The Company implemented a share appreciation rights incentive scheme for middle and senior management and other core personnel, granting a total of **63,500,000 share appreciation rights** to grantees, with an exercise price of **HKD 1.58/right**[425](index=425&type=chunk) - The incentive scheme has been adjusted, with the number of grantees reduced from **150 to 96**, and the number of effective rights from **63,500,000 to 34,685,000**[426](index=426&type=chunk) - The exercise price has been adjusted from **HKD 1.58/right to HKD 1.31/right**, primarily due to the company's payment of annual dividends[426](index=426&type=chunk) - As of June 30, 2025, the exercise price of outstanding share appreciation rights at period-end was **HKD 1.31/right**, with a remaining contractual term until **October 29, 2026**[64](index=64&type=chunk)[427](index=427&type=chunk) [Segment Information](index=174&type=section&id=Segment%20Information) The Group operates as a single segment, primarily in copper and nickel mining, beneficiation, smelting, and refining, with all operations in China, and **71.98%** of sales revenue from its top three customers - The Group operates as a **single operating segment**, primarily engaged in the mining, beneficiation, smelting, and refining of copper and nickel, as well as the processing and sales of copper, nickel, and other non-ferrous metals[429](index=429&type=chunk) - For the six months ended June 30, 2025, **all of the Group's sales operations were conducted within China**, and **all of the Group's assets and liabilities were located in China**[429](index=429&type=chunk) - For the six months ended June 30, 2025, sales revenue from the Group's top three customers accounted for **28%**, **25%**, and **19%** of total sales revenue, respectively, totaling **71.98%**[429](index=429&type=chunk) [Commitments and Contingencies](index=175&type=section&id=Commitments%20and%20Contingencies) This section discloses capital expenditure commitments of **RMB 342.44 million** as of June 30, 2025, and contingent matters including environmental uncertainties, insufficient insurance coverage risks, and financial guarantees for joint ventures Capital Expenditure Commitments as of June 30, 2025 | Item | Amount (RMB) | | :--- | :--- | | Buildings, Structures, Mine Shafts and Structures, Machinery and Equipment, and Engineering Construction | 342,443,036.62 | - Environmental contingent items involve multiple uncertainties that could have a significant adverse impact on the Group's financial position or operating performance[431](index=431&type=chunk) - Insurance coverage may be insufficient to cover future potential losses, which could have a significant adverse impact on operating performance or financial position[432](index=432&type=chunk) - Details of guarantees provided are in Note X, 2.(4), including a financial guarantee of **RMB 25,000,000.00** for Hexin Mining[433](index=433&type=chunk)[407](index=407&type=chunk) [Events After the Balance Sheet Date](index=176&type=section&id=Events%20After%20the%20Balance%20Sheet%20Date) Post-balance sheet date, the Group acquired a **2.4167%** equity interest in Xinjiang Zhongxin Mining Co., Ltd. for zero consideration, making it a wholly-owned subsidiary - On June 26, 2025, the Group signed an equity transfer agreement with Sichuan Aokai Investment Development Co., Ltd. to acquire a **2.4167%** equity interest in Zhongxin Mining for zero consideration[434](index=434&type=chunk) - The transaction completed industrial and commercial change registration on **August 14, 2025**, making Zhongxin Mining a wholly-owned subsidiary of the Group[434](index=434&type=chunk) [Other Significant Matters](index=176&type=section&id=Other%20Significant%20Matters) As of the balance sheet date, the Group had no other significant undisclosed transactions or matters impacting investor decisions - As of the balance sheet date, the Group had no other significant transactions or matters requiring disclosure that would affect investors' decisions or significant commitments[435](index=435&type=chunk) [Notes to Major Items in Company Financial Statements](index=176&type=section&id=Notes%20to%20Major%20Items%20in%20Company%20Financial%20Statements) This section details major parent company financial statement items, including accounts receivable, other receivables, and long-term equity investments, reflecting its asset structure as a holding company Overview of Company Accounts Receivable | Item | June 30, 2025 (RMB) | December 31, 2024 (RMB) | | :--- | :--- | :--- | | Accounts Receivable | 272,879,896.93 | 421,351,353.31 | | Less: Provision for Bad Debts | 2,422,196.27 | 2,488,924.29 | | **Total** | **270,457,700.66** | **418,862,429.02** | Overview of Company Other Receivables | Item | June 30, 2025 (RMB) | December 31, 2024 (RMB) | | :--- | :--- | :--- | | Interest Receivable | 45,459,000.00 | 44,255,750.00 | | Other Receivables | 13,736,795.47 | 13,667,794.72 | | **Total** | **59,195,795.47** | **57,923,544.72** | Overview of Company Long-term Equity Investments | Item | June 30, 2025 (RMB) | December 31, 2024 (RMB) | | :--- | :--- | :--- | | Investments in Subsidiaries | 3,186,853,364.12 | 2,311,472,264.12 | | Investments in Joint Ventures | 205,098,565.14 | 209,788,023.73 | | **Total** | **3,391,951,929.26** | **2,521,260,287.85** | - The parent company's investments in subsidiaries increased by **RMB 885,581,100.00** during the period, primarily due to the acquisition of Xinjiang Huaou Mining Co., Ltd[457](index=457&type=chunk) [Supplementary Information to Financial Statements (Unaudited)](index=188&type=section&id=Supplementary%20Information%20to%20Financial%20Statements%20(Unaudited)) This chapter provides unaudited supplementary financial information, including a detailed statement of non-recurring gains and losses and calculations of return on net assets and earnings per share, both of which decreased despite positive non-recurring impacts [Statement of Non-recurring Gains and Losses for the Period](index=189&type=section&id=Statement%20of%20Non-recurring%20Gains%20and%20Losses%20for%20the%20Period) Total non-recurring gains and losses for the period were **RMB 5,177,950.17**, mainly from government grants and other non-operating items, positively impacting the Group's net profit H1 2025 Non-recurring Gains and Losses Details | Item | For the Six Months Ended June 30, 2025 (RMB) | For the Six Months Ended June 30, 2024 (RMB) | | :--- | :--- | :--- | | Government Grants Recognized in Profit or Loss | 6,462,846.39 | 12,138,433.75 | | Other Non-operating Income and Expenses | (224,191.54) | 993,005.43 | | Subtotal | 6,238,654.85 | 13,410,628.54 | | Less: Income Tax Impact | 935,493.63 | 2,017,490.58 | | Non-controlling Interests Impact (After Tax) | 125,211.05 | 47,707.29 | | **Total** | **5,177,950.17** | **11,345,430.67** | [Return on Net Assets and Earnings Per Share](index=189&type=section&id=Return%20on%20Net%20Assets%20and%20Earnings%20Per%20Share) The Group's weighted average return on net assets and earnings per share both declined year-on-year, indicating weakened profitability, with similar downward trends observed after adjusting for non-recurring items H1 2025 Return on Net Assets and Earnings Per Share | Metric | For the Six Months Ended June 30, 2025 | For the Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Weighted Average Return on Net Assets Attributable to Ordinary Shareholders of the Parent Company | 1.32% | 2.23% | | Weighted Average Return on Net Assets Attributable to Ordinary Shareholders of the Parent Company After Deducting Non-recurring Gains and Losses | 1.22% | 2.05% | | Basic Earnings Per Share Attributable to Ordinary Shareholders of the Parent Company | 0.032 | 0.065 | | Basic Earnings Per Share Attributable to Ordinary Shareholders of the Parent Company After Deducting Non-recurring Gains and Losses | 0.030 | 0.060 |

[Announcement](index=1&type=section&id=Announcement) This section contains the formal announcement of the interim results [Condensed Consolidated Financial Statements](index=1&type=section&id=Condensed%20Consolidated%20Financial%20Statements) This section presents the condensed consolidated financial statements, including the income statement and statement of financial position [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 reported total revenue of HK$64.76 million and a narrowed loss of HK$198.27 million for the six months ended June 30, 2025 Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (For the six months ended June 30) | Indicator | 2025 (HK$ '000) | 2024 (HK$ '000) | | :--- | :--- | :--- | | Total Revenue | 64,762 | 65,790 | | Other Income | 493 | 644 | | Other (Losses) / Gains, Net | (6,074) | 1,469 | | Purchases and Changes in Inventories | (22,763) | (24,035) | | Impairment Losses, Net | (48,623) | (75,459) | | Fair Value Changes of Investment Properties | (83,052) | (110,556) | | Employee Benefit Expenses | (13,424) | (17,641) | | Other Operating Expenses | (27,120) | (29,598) | | Finance Costs | (76,768) | (85,361) | | Loss Before Tax | (212,569) | (274,747) | | Income Tax Credit | 14,301 | 23,302 | | Loss for the Period | (198,268) | (251,445) | | Total Comprehensive Expense for the Period | (248,073) | (255,357) | | Loss for the Period Attributable to Owners of the Company | (198,704) | (251,734) | | Basic Loss Per Share (HK cents) | (3.78) | (4.79) | [Condensed Consolidated Statement of Financial Position](index=3&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the Group reported total non-current assets of HK$1.32 billion and net liabilities of HK$1.98 billion, reflecting ongoing liquidity challenges Condensed Consolidated Statement of Financial Position (As of June 30) | Indicator | 2025 (HK$ '000) | 2024 (HK$ '000) | | :--- | :--- | :--- | | **Non-current Assets** | | | | Property, Plant and Equipment | 1,304 | 1,642 | | Investment Properties | 1,285,669 | 1,331,445 | | Intangible Assets | 26,751 | 31,001 | | Right-of-use Assets | 1,564 | 2,547 | | Total Other Non-current Assets | 6,363 | 6,363 | | **Current Assets** | | | | Inventories | 1,271 | 1,751 | | Trade Receivables | 8,745 | 5,525 | | Other Receivables, Deposits and Prepayments | 22,606 | 25,910 | | Restricted Bank Balances | 10,084 | 11,444 | | Bank Balances and Cash | 78,010 | 352,861 | | **Current Liabilities** | | | | Trade Payables | – | 7,719 | | Accruals and Other Payables | 861,682 | 770,647 | | Borrowings | 1,472,160 | 1,435,320 | | Lease Liabilities | 994 | 1,108 | | Tax Payables | 21,491 | 21,491 | | Financial Guarantee Contracts | 1,002,312 | 1,187,380 | | **Net Liabilities** | (1,984,505) | (1,736,432) | | **Capital Deficit** | (1,984,505) | (1,736,432) | [Notes to the Condensed Consolidated Financial Statements](index=5&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed notes and disclosures supporting the condensed consolidated financial statements [General Information](index=5&type=section&id=General%20Information) Tai United Holdings Limited, listed in Hong Kong, operates diverse businesses including property investment, medical equipment, flooring materials, mining, and financial services - The Company's immediate holding company is Songbird SG PTE. Ltd., and its ultimate holding company is **Satinu Resources Group Ltd.**[7](index=7&type=chunk) - The Group's principal activities include **property investment, sales of medical equipment, sales of flooring materials, mining and exploration of natural resources, and financial services and asset management**[8](index=8&type=chunk) [Basis of Preparation and Principal Accounting Policies](index=5&type=section&id=Basis%20of%20Preparation%20and%20Principal%20Accounting%20Policies) The financial statements are prepared under HKAS 34, acknowledging significant going concern uncertainties, yet the Board believes the Group can maintain liquidity through debt restructuring and other financial measures [Going Concern Assessment](index=5&type=section&id=Going%20Concern%20Assessment) This section details the Group's going concern assessment, highlighting significant financial challenges and management's mitigating actions - The Group incurred a **net loss of approximately HK$198.27 million** for the six months ended June 30, 2025[11](index=11&type=chunk) - As of June 30, 2025, the Group had **net current liabilities of approximately HK$3.24 billion** and **net liabilities of approximately HK$1.98 billion**, including **overdue bank borrowings of HK$1.47 billion** and **accrued interest of HK$630.17 million**[11](index=11&type=chunk) - PRC courts ruled the Group liable for **financial guarantee obligations of approximately RMB9.92 billion** for bank borrowings involving non-Group companies[11](index=11&type=chunk) - The Group is actively negotiating debt restructuring with creditors regarding guarantees provided by PRC guarantor subsidiaries and has entered into a settlement agreement with Stone Wealth and Mr. Dai Yongge to **reduce Guangzhou Rongzhi's external debt by at least approximately RMB280.6 million within 12 months**[12](index=12&type=chunk) - The Group is exploring the **possibility of disposing of or liquidating PRC guarantor subsidiaries** and seeking other financial resources to meet maturing liabilities and obligations[15](index=15&type=chunk) [Application of New and Revised Hong Kong Financial Reporting Standards](index=7&type=section&id=Application%20of%20New%20and%20Revised%20Hong%20Kong%20Financial%20Reporting%20Standards) This section outlines the adoption of new and revised HKFRS accounting standards, noting no significant impact on the Group's financial reporting - The Group adopted all new and revised HKFRS accounting standards effective January 1, 2025, with **no significant changes to accounting policies, financial statement presentation, or reported amounts**[17](index=17&type=chunk) [Revenue](index=7&type=section&id=Revenue) The Group's total revenue for the period was HK$64.76 million, slightly down year-on-year, primarily from property management, flooring materials, and medical equipment sales, with China as the main market Segment Revenue (For the six months ended June 30) | Revenue Source | 2025 (HK$ '000) | 2024 (HK$ '000) | | :--- | :--- | :--- | | Sales of Medical Equipment | 12,868 | 14,918 | | Sales of Flooring Materials | 13,299 | 13,821 | | Property Management and Related Services | 22,049 | 22,686 | | Rental Income from Leases | 16,540 | 13,752 | | Interest Income from Loan Financing Services | 6 | 613 | | **Total Revenue** | **64,762** | **65,790** | Revenue by Geographical Market (For the six months ended June 30) | Region | 2025 (HK$ '000) | 2024 (HK$ '000) | | :--- | :--- | :--- | | **Revenue from Sales of Goods and Services** | | | | PRC | 34,917 | 37,604 | | USA | – | 918 | | Australia | 13,299 | 10,460 | | Belgium | – | 2,443 | | **Revenue from Leased Properties** | | | | PRC | 16,540 | 12,899 | | UK | – | 853 | | **Interest Income from Loan Financing** | | | | PRC | 6 | 613 | | **Total Revenue** | **64,762** | **65,790** | [Segment Information](index=8&type=section&id=Segment%20Information) The Group's reportable segments include property investment, medical equipment, flooring materials, mining, and financial services, with property investment incurring the largest loss and medical equipment sales achieving profitability - The Group's reportable segments include: **property investment, sales of medical equipment, sales of flooring materials, mining and exploration of natural resources, and financial services and asset management**[23](index=23&type=chunk)[24](index=24&type=chunk) Segment Revenue and Results (For the six months ended June 30) | Segment | 2025 Revenue (HK$ '000) | 2025 Results (HK$ '000) | 2024 Revenue (HK$ '000) | 2024 Results (HK$ '000) | | :--- | :--- | :--- | :--- | :--- | | Property Investment | 38,589 | (195,994) | 36,438 | (256,614) | | Sales of Medical Equipment | 12,868 | 2,088 | 14,918 | 1,662 | | Sales of Flooring Materials | 13,299 | (393) | 13,821 | (3,891) | | Mining and Exploration of Natural Resources | – | (394) | – | (478) | | Financial Services and Asset Management | 6 | (1,796) | 613 | (1,919) | | **Total** | **64,762** | **(196,489)** | **65,790** | **(261,240)** | | Loss Before Tax | | (212,569) | | (274,747) | [Impairment Losses](index=10&type=section&id=Impairment%20Losses) The Group recognized total impairment losses of HK$48.62 million for the period, mainly from financial guarantee contracts Impairment Losses (For the six months ended June 30) | Category | 2025 (HK$ '000) | 2024 (HK$ '000) | | :--- | :--- | :--- | | Trade Receivables | (979) | (876) | | Other Receivables (including loans receivable) | 2,606 | 1,662 | | Financial Guarantee Contracts | (50,250) | (76,245) | | **Total** | **(48,623)** | **(75,459)** | [Finance Costs](index=10&type=section&id=Finance%20Costs) The Group's total finance costs for the period were HK$76.77 million, primarily from bank borrowing interest, showing a decrease year-on-year Finance Costs (For the six months ended June 30) | Category | 2025 (HK$ '000) | 2024 (HK$ '000) | | :--- | :--- | :--- | | Interest Expense on Bank Borrowings | 76,700 | 84,868 | | Interest Expense on Lease Liabilities | 68 | 493 | | **Total** | **76,768** | **85,361** | [Income Tax Credit](index=10&type=section&id=Income%20Tax%20Credit) The Group recorded an income tax credit of HK$14.30 million for the period, mainly attributable to deferred tax Income Tax Credit (For the six months ended June 30) | Category | 2025 (HK$ '000) | 2024 (HK$ '000) | | :--- | :--- | :--- | | PRC Enterprise Income Tax – Over-provision in prior years | – | 54 | | Deferred Tax | 14,301 | 23,248 | | **Total** | **14,301** | **23,302** | [Loss for the Period](index=11&type=section&id=Loss%20for%20the%20Period) The Group's loss for the period was primarily impacted by inventory purchases, depreciation, amortization, and intangible asset impairment losses Components of Loss for the Period (For the six months ended June 30) | Category | 2025 (HK$ '000) | 2024 (HK$ '000) | | :--- | :--- | :--- | | Purchases and Changes in Inventories | 22,763 | 24,035 | | Depreciation of Property, Plant and Equipment | 240 | 970 | | Depreciation of Right-of-use Assets | 992 | 1,619 | | Amortisation of Intangible Assets | 1,230 | 1,236 | | Impairment Loss on Intangible Assets | 3,758 | – | | Advertising and Marketing Expenses | 759 | 1,137 | | Legal and Professional Fees | 3,471 | 5,834 | | Utilities | 5,186 | 4,136 | | Sales Commissions | 1,499 | 1,195 | [Dividends](index=11&type=section&id=Dividends) The Board decided not to declare any dividends for the six months ended June 30, 2025 - The Board decided **not to declare any dividends** for the six months ended June 30, 2025 (2024: nil)[30](index=30&type=chunk) [Loss Per Share](index=11&type=section&id=Loss%20Per%20Share) For the six months ended June 30, 2025, basic loss per share attributable to owners of the Company was 3.78 HK cents, a narrowing from 4.79 HK cents in the prior year Loss Per Share (For the six months ended June 30) | Indicator | 2025 (HK$ '000) | 2024 (HK$ '000) | | :--- | :--- | :--- | | Loss Attributable to Owners of the Company | (198,704) | (251,734) | | Weighted Average Number of Ordinary Shares for Basic Loss Per Share Calculation ('000 shares) | 5,250,020 | 5,250,020 | | Basic Loss Per Share (HK cents) | (3.78) | (4.79) | - No diluted loss per share is presented as there were **no potential ordinary shares in issue** for both periods[33](index=33&type=chunk) [Investment Properties](index=12&type=section&id=Investment%20Properties) As of June 30, 2025, investment properties were valued at HK$1.29 billion, with a fair value loss of HK$83.05 million recognized, primarily due to a sluggish retail leasing market Fair Value Changes of Investment Properties (As of June 30) | Change Item | Amount (HK$ '000) | | :--- | :--- | | As at January 1, 2024 (Audited) | 2,275,479 | | Fair value changes recognised in profit or loss (2024) | (355,870) | | Disposal of a subsidiary | (524,969) | | Exchange adjustments (2024) | (63,195) | | As at December 31, 2024 and January 1, 2025 (Audited) | 1,331,445 | | Fair value changes recognised in profit or loss (2025) | (83,052) | | Exchange adjustments (2025) | 37,276 | | As at June 30, 2025 (Unaudited) | 1,285,669 | - The fair value of investment properties was determined by independent qualified professional valuers, International Appraisal Limited, on a valuation basis, with **no change in valuation techniques**[34](index=34&type=chunk)[35](index=35&type=chunk) [Trade Receivables](index=13&type=section&id=Trade%20Receivables) As of June 30, 2025, net trade receivables increased to HK$8.75 million, with a significant portion aged over 90 days Aging Analysis of Trade Receivables (As of June 30) | Aging | 2025 (HK$ '000) | 2024 (HK$ '000) | | :--- | :--- | :--- | | 30 to 90 days | 4,259 | 377 | | Over 90 days | 4,486 | 5,148 | | **Total** | **8,745** | **5,525** | - The Group grants credit terms of **0 to 90 days** to its customers[36](index=36&type=chunk) [Trade Payables](index=13&type=section&id=Trade%20Payables) As of June 30, 2025, the Group's trade payables were nil, a significant reduction from HK$7.72 million at December 31, 2024 Aging Analysis of Trade Payables (As of June 30) | Aging | 2025 (HK$ '000) | 2024 (HK$ '000) | | :--- | :--- | :--- | | 0 to 30 days | – | 1,289 | | 31 to 90 days | – | 6,430 | | **Total** | **–** | **7,719** | - Credit terms granted by suppliers are **90 days**[37](index=37&type=chunk) [Borrowings](index=14&type=section&id=Borrowings) As of June 30, 2025, total borrowings were HK$1.47 billion, mainly overdue secured fixed-rate bank borrowings repayable on demand Borrowings Composition (As of June 30) | Category | 2025 (HK$ '000) | 2024 (HK$ '000) | | :--- | :--- | :--- | | Unsecured fixed-rate bank borrowings | 730 | 5,316 | | Secured fixed-rate bank borrowings | 1,471,430 | 1,430,004 | | **Total** | **1,472,160** | **1,435,320** | - The secured fixed-rate bank borrowings are guaranteed by Mr. Dai, bear interest at a **fixed rate of 7%**, and are secured by investment properties and **100% equity interest in a PRC subsidiary**[40](index=40&type=chunk) - These secured fixed-rate bank borrowings **matured in January 2021** and have not been successfully renewed, extended, or repaid as of June 30, 2025, and the date of authorization for issue of these condensed consolidated financial statements, thus are **overdue and classified under current liabilities**[40](index=40&type=chunk) [Share Capital](index=14&type=section&id=Share%20Capital) As of June 30, 2025, the Company had 5,250,019,852 issued and fully paid ordinary shares of HK$0.05 each, totaling HK$262,501 thousand in share capital Share Capital Composition (As of June 30) | Category | Number of Shares ('000 shares) | Share Capital (HK$ '000) | | :--- | :--- | :--- | | Authorised ordinary shares of HK$0.05 each | 34,566,666,668 | 1,728,333 | | Issued and fully paid ordinary shares of HK$0.05 each | 5,250,019,852 | 262,501 | [Management Discussion and Analysis](index=15&type=section&id=Management%20Discussion%20and%20Analysis) This section provides management's review and analysis of the Group's financial performance, business operations, and future outlook [Financial Performance](index=15&type=section&id=Financial%20Performance) The Company reported revenue of HK$64.8 million, a 1.5% decrease, and a narrowed loss before tax of HK$212.6 million, down 22.6%, primarily due to cost savings - The decrease in revenue was primarily due to **reduced income from sales of medical equipment in the PRC**[41](index=41&type=chunk) - Loss before tax decreased by **22.6%**, mainly impacted by **decreased fair value of investment properties, provisions for guarantee contracts, and finance costs**[41](index=41&type=chunk)[42](index=42&type=chunk) - Income tax credit for the reporting period was approximately **HK$14.3 million**[41](index=41&type=chunk) [Business Review](index=16&type=section&id=Business%20Review) The Group's diversified businesses, including property investment, trade, mining, and financial services, show mixed performance, with property investment facing challenges and other segments experiencing revenue declines or cautious operations [Property Investment](index=16&type=section&id=Property%20Investment) This section reviews the property investment segment, detailing performance of PRC shopping malls, fair value changes, and ongoing debt restructuring efforts - The Group wholly owns three shopping malls in the PRC: Anyang, Jinzhou, and Guangzhou, generating revenue primarily through **shop leasing and property management services**[44](index=44&type=chunk)[45](index=45&type=chunk) - Revenue from PRC shopping mall operations was approximately **HK$38.5 million** during the reporting period[48](index=48&type=chunk) - As of June 30, 2025, the fair values of investment properties for Anyang, Jinzhou, and Guangzhou shopping malls were approximately **HK$268 million, HK$498 million, and HK$520 million**, respectively[49](index=49&type=chunk) - The Group has paid **RMB236.2 million** to other claimant banks in response to enforcement notices and/or judgment notices issued by PRC courts regarding Guangzhou Rongzhi's guarantee liabilities[50](index=50&type=chunk) - Jinzhou Bank and Jinzhou Huayin Asset Management Co., Ltd. notified that the subordinated loans and guarantee debts owed by Guangzhou Rongzhi and Jinzhou Jiachi to Jinzhou Bank have been **fully transferred to the assignee**[52](index=52&type=chunk) - The Company entered into a settlement agreement with Stone Wealth and Mr. Dai, committing to **reduce Guangzhou Rongzhi's external debt by at least approximately RMB280.6 million within 12 months**[53](index=53&type=chunk)[54](index=54&type=chunk) - As of the announcement date, domestic deposits totaling approximately **RMB52.5 million** from Jinzhou Jiachi and Guangzhou Rongzhi have been **withdrawn and transferred to accounts held by PRC courts**[55](index=55&type=chunk) - The Group completed the **disposal of its entire interest in the subsidiary holding UK investment properties in December 2024**, with a transaction deposit of approximately **GBP19 million used to repay defaulted loans in the UK**[56](index=56&type=chunk) - The property investment segment recorded an overall **loss of approximately HK$196.0 million**, a year-on-year decrease of approximately **23.6%**, mainly due to **provisions for guarantee contracts, decreased fair value of investment properties, and finance costs**[57](index=57&type=chunk) [Flooring Materials and Medical Equipment Trading](index=20&type=section&id=Flooring%20Materials%20and%20Medical%20Equipment%20Trading) This section reviews the performance of the flooring materials and medical equipment trading businesses, both experiencing revenue declines - Revenue from flooring materials trading business was approximately **HK$13.3 million**, a year-on-year decrease of approximately **3.6%**, primarily exported to the Australian market[58](index=58&type=chunk) - Revenue from medical equipment trading business decreased to approximately **HK$12.9 million**, a year-on-year decrease of approximately **13.4%**, with segment revenue of approximately **HK$2.1 million**[59](index=59&type=chunk) [Mining and Exploration of Natural Resources](index=20&type=section&id=Mining%20and%20Exploration%20of%20Natural%20Resources) This section reviews the mining and exploration segment, which holds tungsten mining rights in Mongolia but generated no revenue during the period - The Group holds **four mining rights licenses for three tungsten mining projects in Mongolia**, but **no revenue was recorded** from this segment during the reporting period[60](index=60&type=chunk) - The **carrying value of mining rights was nil** as of June 30, 2025[61](index=61&type=chunk) [Financial Services and Asset Management](index=21&type=section&id=Financial%20Services%20and%20Asset%20Management) This section reviews the financial services and asset management segment, which recorded a loss and delayed lending operations due to market uncertainties - Due to uncertain prospects and market conditions, this segment **recorded no revenue and incurred a loss of approximately HK$1.8 million**[62](index=62&type=chunk) - Lending business was **postponed due to uncertain market conditions**[63](index=63&type=chunk) - Non-performing debt asset management business incurred a **loss of approximately HK$1.7 million**, and directors will continue to assess whether to proceed with non-performing asset investments[64](index=64&type=chunk) - No securities investment transactions were reported, and **no investment gains/losses were recorded** during the reporting period[65](index=65&type=chunk) [Financial Review](index=21&type=section&id=Financial%20Review) The Group's financial review indicates increasing net liabilities, significant liquidity pressure, a substantial decrease in cash, and a low current ratio [Capital Structure](index=21&type=section&id=Capital%20Structure) This section reviews the Group's capital structure, highlighting increased net liabilities, reduced cash, and a low current ratio - As of June 30, 2025, the Group's consolidated **net liabilities were approximately HK$1,984.5 million**, an increase of approximately **HK$248.1 million** from December 31, 2024[66](index=66&type=chunk) - Bank balances, cash, and restricted bank balances were approximately **HK$88.1 million**, a significant decrease from HK$364.3 million as of December 31, 2024[67](index=67&type=chunk) - The **current ratio decreased from 0.12 times to 0.04 times**, with **net current liabilities of approximately HK$3,237.9 million**[67](index=67&type=chunk) - Total debt financing was approximately **HK$1,472.2 million**, net debt approximately **HK$2,396.5 million**, and total deficit approximately **HK$1,984.5 million**[68](index=68&type=chunk) [Capital Commitments](index=22&type=section&id=Capital%20Commitments) This section confirms that the Group had no significant capital commitments or plans for major investments as of June 30, 2025 - As of June 30, 2025, the Group had **no significant capital commitments** and was not involved in any plans for future major investments or acquisitions of capital assets[69](index=69&type=chunk) [Pledge of Group Assets](index=22&type=section&id=Pledge%20of%20Group%20Assets) This section details that the Group's bank borrowings are secured by certain assets, including investment properties and equity interests in a subsidiary - The Group's bank borrowings of approximately **HK$1,471.4 million are secured by certain assets**, including investment properties and equity interests in a wholly-owned subsidiary[70](index=70&type=chunk) [Contingent Liabilities](index=23&type=section&id=Contingent%20Liabilities) The Group faces substantial contingent liabilities from financial guarantees for related companies, with PRC courts ruling joint and several liability, resulting in RMB46.65 million impairment losses - PRC subsidiaries faced multiple legal claims for pledging investment property operating rights as collateral for bank loans of former shareholder-related companies, with **overdue loan amounts of RMB3.4 billion** due to borrower default[73](index=73&type=chunk) - Guangzhou Rongzhi and Jinzhou Jiachi provided financial guarantees for Mr. Dai Yongge's related companies, with maximum liabilities of **RMB569.9 million and RMB3.3 billion in principal**, respectively, plus outstanding accrued interest and other fees[75](index=75&type=chunk) - PRC courts ruled Guangzhou Rongzhi and Jinzhou Jiachi **jointly and severally liable** for the loans with other guarantors[75](index=75&type=chunk) - During the reporting period, the Group recognized **impairment losses on financial guarantee contracts of approximately RMB916.19 million (approximately HK$1,002.31 million)**[76](index=76&type=chunk) - A loss of approximately **RMB46.65 million (approximately HK$50.25 million)** was recorded in profit or loss due to the remeasurement of expected repayments from guarantee holders unrecoverable from borrowers[77](index=77&type=chunk) Guarantees and Pledges (As of June 30, 2025) | Guarantor | Creditor | Borrower | Principal (RMB) | Form | Maximum Exposure (RMB) | | :--- | :--- | :--- | :--- | :--- | :--- | | Guangzhou Rongzhi | Shengjing Bank | Shenyang Fangcheng Diyi Dadao Public Facilities Management Co., Ltd. | 137,100,000 | Guarantee | 243,761,260 | | Guangzhou Rongzhi | Shengjing Bank | Shenyang Huangcheng Diyi Dadao Public Facilities Management Co., Ltd. | 48,400,000 | Guarantee | 86,054,328 | | Guangzhou Rongzhi | Shengjing Bank | Shenyang Shenghe Public Facilities Management Co., Ltd. | 135,700,000 | Guarantee | 233,515,666 | | Guangzhou Rongzhi | Shengjing Bank | Shenyang Ruifan Public Facilities Management Co., Ltd. | 100,500,000 | Guarantee | 172,942,467 | | Guangzhou Rongzhi | Shengjing Bank | Liaoning Renhe Xintiandi Public Facilities Management Co., Ltd. | 148,200,000 | Guarantee | 263,496,871 | | Jinzhou Jiachi | Jinzhou Huayin Asset Management Co., Ltd. | Chongqing Baoting Public Facilities Management Co., Ltd. | 1,400,000,000 | Guarantee | 2,143,966,257 | | Jinzhou Jiachi | Jinzhou Huayin Asset Management Co., Ltd. | Weifang Yuandu Chuangfu Public Facilities Co., Ltd. | 1,900,000,000 | Guarantee | 2,925,649,149 | | Guangzhou Rongzhi + Jinzhou Jiachi | Jinzhou Huayin Asset Management Co., Ltd. | Harbin Dili Fresh Agricultural Products Enterprise Management Co., Ltd. | 1,400,000,000 | Pledge | Fair value of pledged assets | | Guangzhou Rongzhi | Jinzhou Huayin Asset Management Co., Ltd. | Harbin Dili Fresh Agricultural Products Enterprise Management Co., Ltd. | 600,000,000 | Pledge | Fair value of pledged assets | | Jinzhou Jiachi | Jinzhou Huayin Asset Management Co., Ltd. | Ganzhou Juli Public Facilities Construction Co., Ltd. | 1,400,000,000 | Pledge | Fair value of pledged assets | | Jinling | Jinzhou Huayin Asset Management Co., Ltd. | Guangzhou Rongzhi | 1,400,000,000 | Pledge | Fair value of pledged assets | [Foreign Exchange Risk](index=26&type=section&id=Foreign%20Exchange%20Risk) The Group transacts in HKD, USD, and RMB, with limited USD exchange risk due to the peg, but PRC subsidiaries face RMB exchange risk, which management deems limited - The Group has implemented policies and guidelines to manage exchange rate risk, and PRC subsidiaries can **generate sufficient revenue to cover local currency expenses**[81](index=81&type=chunk) [Qualified Opinion](index=26&type=section&id=Qualified%20Opinion) Zhongrui Hexin issued a qualified opinion for FY2024 regarding financial guarantee completeness, and management is actively working to resolve it for the 2025 audit - The elimination of the qualified opinion depends on the **resolution of all known financial guarantees** and the Group's ability to **recover or be compensated for all losses incurred from financial guarantees**[83](index=83&type=chunk) - Neither the Audit Committee nor the Company's management **disagreed with Zhongrui's qualified opinion**[84](index=84&type=chunk) [Employees and Remuneration Policy](index=27&type=section&id=Employees%20and%20Remuneration%20Policy) As of June 30, 2025, the Group had 171 employees, with remuneration based on performance and regional salaries, supplemented by a share option scheme - The Group's number of employees increased from **163 as of December 31, 2024, to 171**[85](index=85&type=chunk) - Remuneration policy is based on **individual employee performance and regional salary conditions**, reviewed annually, and includes a **share option scheme** in addition to mandatory provident fund and medical insurance[85](index=85&type=chunk) [Dividends](index=27&type=section&id=Dividends) The Board does not recommend the payment of an interim dividend for the reporting period - The Board **does not recommend the payment of an interim dividend** for the reporting period (2024: nil)[86](index=86&type=chunk) [Prospects](index=27&type=section&id=Prospects) The Group anticipates a stable Chinese economy amidst external uncertainties, focusing on prudent operations, debt restructuring for shopping malls, differentiated strategies, and expanding overseas markets for flooring materials - China's economy saw **GDP growth of 5.3%** and **social retail sales growth of 5%** in the first half, but external uncertainties persist[87](index=87&type=chunk) - Guangzhou shopping mall plans to create a **'Central and West Asia Night Market'**, focusing on attracting foreign apparel showrooms and design studios, developing a night entertainment complex, and expanding overseas markets through digital marketing and international exhibitions[88](index=88&type=chunk) - Jinzhou shopping mall will be **transformed into a dining area**, introducing ACG, cultural and creative, and experiential new business formats, focusing on summer parent-child, back-to-school, and national trend holiday themed activities[89](index=89&type=chunk) - Anyang shopping mall will focus on developing a **trendy play district and ACG-themed tenant recruitment**, creating a new social landmark, and planning mixed-use formats combining day-time cafes and night-time bars in line with the night economy trend[90](index=90&type=chunk)[91](index=91&type=chunk) - Flooring materials trading business will continue to actively **explore emerging market opportunities in Australia, the Middle East, and Europe**[91](index=91&type=chunk) - The Group will closely cooperate with banks, creditors, and stakeholders to advance **debt restructuring for Guangzhou and Jinzhou shopping malls**, aiming to reduce debt and guarantee liabilities, maintain healthy operations, and preserve business asset value[92](index=92&type=chunk) [Events After the Reporting Period](index=29&type=section&id=Events%20After%20the%20Reporting%20Period) This section details significant events occurring after the reporting period, including updates on legal claims against a subsidiary [Update on Litigation Claims Against a Subsidiary of the Company](index=29&type=section&id=Update%20on%20Litigation%20Claims%20Against%20a%20Subsidiary%20of%20the%20Company) Jinzhou Jiachi received an enforcement notice from the Jinzhou Intermediate People's Court for approximately RMB1.7 billion, despite its liabilities being transferred, as the court has not yet been notified - Jinzhou Jiachi received an enforcement notice and property reporting order from Chongqing Baoting, requiring payment of approximately **RMB1.7 billion** and enforcement fees to the claimant bank[93](index=93&type=chunk) - All loan and guarantee liabilities owed by Jinzhou Jiachi to the claimant bank have been **transferred to Jinzhou Huayin Asset Management Co., Ltd.**, but the transfer has not yet been notified to the relevant PRC courts[94](index=94&type=chunk) - PRC legal counsel believes there is **no material difference for Jinzhou Jiachi** even if enforcement is applied by the claimant bank, but the Company and Jinzhou Jiachi will endeavor to notify the court to ensure the judgment amount is not erroneously disbursed[94](index=94&type=chunk) [Other Information](index=30&type=section&id=Other%20Information) This section provides other relevant information, including details on securities, corporate governance, interim report publication, and Board members [Purchase, Sale or Redemption of the Company's Listed Securities](index=30&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company%27s%20Listed%20Securities) During the reporting period, neither the Company nor any of its subsidiaries purchased, redeemed, or sold any of the Company's listed securities, and the Group held no treasury shares - During the reporting period, neither the Company nor any of its subsidiaries **purchased, redeemed, or sold any of the Company's listed securities**[96](index=96&type=chunk) - As of June 30, 2025, the Group **did not hold any treasury shares**[96](index=96&type=chunk) [Compliance with Corporate Governance Code and Audit Committee](index=30&type=section&id=Compliance%20with%20Corporate%20Governance%20Code%20and%20Audit%20Committee) The Company complied with all Corporate Governance Code provisions, and the Audit Committee reviewed the unaudited condensed consolidated financial statements, ensuring compliance and adequate disclosure - The Company has **complied with all code provisions** of the Corporate Governance Code as set out in Appendix C1 Part 2 of the Listing Rules during the reporting period[97](index=97&type=chunk) - The Audit Committee, comprising three independent non-executive directors, has **reviewed the Group's unaudited condensed consolidated financial statements**[98](index=98&type=chunk) [Publication of Interim Results and Despatch of Interim Report](index=31&type=section&id=Publication%20of%20Interim%20Results%20and%20Despatch%20of%20Interim%20Report) This results announcement is published on the Stock Exchange and Company websites, and the interim report for the six months ended June 30, 2025, will be despatched to shareholders and published accordingly - This results announcement has been **published on the Stock Exchange website (www.hkexnews.hk) and the Company's website (www.irasia.com/listco/hk/taiunited/index.html)**[99](index=99&type=chunk) - The Company's interim report for the six months ended June 30, 2025, will be **despatched to shareholders and published on the aforementioned websites in due course**[99](index=99&type=chunk) [Board of Directors](index=31&type=section&id=Board%20of%20Directors) As of this announcement, the Board comprises executive directors Mr. Su Shigong (Chairman) and Ms. Yang Yuhua (CEO), non-executive director Mr. Lu Yunsong, and independent non-executive directors Dr. Gao Bin, Mr. Liang Tingyu, and Ms. Song Yanjie - The Board of Directors includes **Executive Directors Mr. Su Shigong (Chairman) and Ms. Yang Yuhua (Chief Executive Officer), Non-executive Director Mr. Lu Yunsong, and Independent Non-executive Directors Dr. Gao Bin, Mr. Liang Tingyu, and Ms. Song Yanjie**[100](index=100&type=chunk)

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不負責，對其 準確性或完整性亦不發表任何聲明，並明確表示，概不對因本公告全部或任何部分內容 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。 HUA LIEN INTERNATIONAL (HOLDING) COMPANY LIMITED 華 聯 國 際（ 控 股 ）有 限 公 司 * （ 於 開 曼 群 島 註 冊 成 立 之 有 限 公 司 ） （股份代號：969） 截至二零二五年六月三十日止六個月之 中期業績公告 華聯國際（控股）有限公司（「本公司」）董事會（「董事會」）欣然公佈本公司及其附屬公司 （「本集團」）截至二零二五年六月三十日止六個月之未經審核綜合中期業績連同比較數字 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 | | | | （未經審核） | （未經審核） | | | 附註 | 千港元 | 千港元 | | 營業額 | (3) | 73,486 | 87,896 | ...

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不負責，對其 準確性或完整性亦不發表任何聲明，並明確表示，概不對因本公告全部或任何部分內容 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。 稀 鎂 科 技 集 團 控 股 有 限 公 司 RARE EARTH MAGNESIUM TECHNOLOGY GROUP HOLDINGS LIMITED （ 於 百 慕 達 註 冊 成 立 之 有 限 公 司 ） （股份代號：601） 2025年中期業績公告 稀鎂科技集團控股有限公司（「本公司」）之董事會（「董事會」）欣然宣佈本公司及其附屬公 司截至2025年6月30日止六個月期間的未經審核業績。本公告列載本公司2025年中期業績 報告全文，並符合香港聯合交易所有限公司證券上市規則內有關中期業績初步公告須附 載資料的要求。本公司2025年中期業績報告的印刷版本將於2025年9月12日寄發予本公司 股東，並可於其時在香港交易及結算所有限公司的網站 www.hkexnews.hk 及本公司的網站 www.remt.com.hk 閱覽。 承董事會命 稀鎂科技集團控股有限公司 執行董事 沈世捷 香港，202 ...

[Interim Results Summary](index=1&type=section&id=Summary) [Financial and Key Performance Indicators Overview](index=1&type=section&id=Financial%20and%20Key%20Performance%20Indicators%20Overview) AustAsia Group's H1 2025 revenue decreased by 7.1% to RMB 1,697.9 million, while gross profit increased 35.1% to RMB 295.9 million, and loss attributable to owners narrowed 40.6% to RMB 377.8 million, with average annual milk yield per mature cow rising 2.9% to 14.1 tonnes | Financial Data (RMB thousand) | H1 2025 | H1 2024 | Change | Change % | | :---------------------------- | :---------- | :---------- | :-------- | :--------- | | Revenue | 1,697,917 | 1,827,965 | (130,048) | -7.1% | | Gross Profit | 295,907 | 219,034 | 76,873 | +35.1% | | Loss from changes in fair value of other biological assets less costs to sell | (462,425) | (605,594) | 143,169 | -23.6% | | Loss attributable to owners of the Company | (377,783) | (636,013) | 258,230 | -40.6% | | Basic Loss Per Share (RMB) | (0.54) | (0.91) | 0.37 | -40.7% | | Cash EBITDA | 343,886 | 231,522 | 112,364 | +48.5% | | Profit/(Loss) for the period (before fair value adjustments of biological assets) | 84,642 | (30,419) | 115,061 | +378.3% | | **Key Performance Indicators**| **2025** | **2024** | **Change**| **Change %** | | Average Annual Milk Yield Per Mature Cow (tonnes) | 14.1 | 13.7 | 0.4 | +2.9% | | Dairy Cattle Inventory (head) | 117,448 | 130,229 | (12,781) | -9.8% | | Beef Cattle Inventory (head) | 25,709 | 39,466 | (13,757) | -34.9% | - Net loss of approximately **RMB 377.8 million** was primarily due to a loss from changes in fair value of other biological assets less costs to sell of **RMB 462.4 million**, mainly resulting from assumed decreases in raw milk and culled cattle prices when calculating fair value[5](index=5&type=chunk) - The average annual milk yield per mature cow increased to **14.1 tonnes**, a **2.9% increase** compared to the same period in 2024[5](index=5&type=chunk) [Interim Condensed Consolidated Financial Statements](index=3&type=section&id=Interim%20Condensed%20Consolidated%20Financial%20Statements) [Interim Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=3&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) The Group recorded a net loss of RMB 377.8 million for H1 2025, a significant narrowing from RMB 636.0 million in the prior year, with revenue decreasing 7.1% but gross profit increasing 35.1%, mainly due to reduced fair value losses on biological assets | Indicator (RMB thousand) | H1 2025 | H1 2024 | | :----------------------- | :---------- | :---------- | | Revenue | 1,697,917 | 1,827,965 | | Gross Profit | 295,907 | 219,034 | | Loss from changes in fair value of other biological assets less costs to sell | (462,425) | (605,594) | | Loss Before Tax | (371,508) | (628,343) | | Loss for the period | (377,783) | (636,013) | | Basic Loss Per Share (RMB) | (0.54) | (0.91) | [Interim Condensed Consolidated Statement of Financial Position](index=5&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the Group's total non-current assets were RMB 7,069.4 million, total current assets were RMB 1,948.6 million, net current liabilities were RMB 1,143.7 million, and net assets were RMB 3,429.7 million, a decrease from year-end 2024 | Indicator (RMB thousand) | June 30, 2025 | December 31, 2024 | | :----------------------- | :------------ | :---------------- | | Total Non-Current Assets | 7,069,430 | 7,482,170 | | Total Current Assets | 1,948,575 | 2,389,905 | | Total Current Liabilities| 3,092,229 | 3,642,059 | | Net Current Liabilities | (1,143,654) | (1,252,154) | | Net Assets | 3,429,729 | 3,807,512 | | Total Equity | 3,429,729 | 3,807,512 | [Notes to the Interim Condensed Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20the%20Interim%20Condensed%20Consolidated%20Financial%20Statements) [Basis of Preparation](index=7&type=section&id=Basis%20of%20Preparation) These interim financial statements are prepared in accordance with IAS 34 and should be read in conjunction with the 2024 annual consolidated financial statements, noting significant uncertainty regarding going concern due to net current liabilities and short-term bank borrowings, despite management's mitigating actions - As of June 30, 2025, the Group had net current liabilities of approximately **RMB 1,144 million**, total bank borrowings of **RMB 3,325 million** (of which **RMB 2,130 million** are repayable within one year), and cash and cash equivalents of **RMB 271 million**, indicating a material uncertainty related to going concern[12](index=12&type=chunk) - The Board has reviewed cash flow forecasts and implemented measures to improve liquidity, including enhancing raw milk production and quality, reducing procurement costs, actively pursuing financing (including a rights issue raising approximately **HKD 308.81 million** net proceeds), and monitoring capital expenditures[12](index=12&type=chunk)[14](index=14&type=chunk)[37](index=37&type=chunk) [Changes in Accounting Policies and Disclosures](index=8&type=section&id=Changes%20in%20Accounting%20Policies%20and%20Disclosures) The Group's accounting policies are consistent with its 2024 annual consolidated financial statements, except for new standards effective January 1, 2025, with IAS 21 (Amendments) on lack of exchangeability having no material impact - New standards effective January 1, 2025, have been adopted but did not impact the Group's interim condensed consolidated financial information[15](index=15&type=chunk)[16](index=16&type=chunk) - Amendments to IAS 21 regarding lack of exchangeability had no material impact on the Group's financial statements[17](index=17&type=chunk) [Operating Segment Information](index=8&type=section&id=Operating%20Segment%20Information) The Group operates in three reportable segments: raw milk, beef cattle, and other businesses, with H1 2025 revenues of RMB 1,309.2 million for raw milk, RMB 234.3 million for beef cattle, and RMB 154.4 million for other businesses, all derived from mainland China - The Group is organized into three reportable operating segments: raw milk business, beef cattle business, and other businesses[18](index=18&type=chunk) | Segment Revenue (RMB thousand) | H1 2025 | H1 2024 | | :----------------------------- | :---------- | :---------- | | Raw Milk | 1,309,177 | 1,424,316 | | Beef Cattle | 234,321 | 219,508 | | Other | 154,419 | 184,141 | | **Total** | **1,697,917** | **1,827,965** | - All revenue is derived from customers in mainland China[21](index=21&type=chunk) [Other Income and Gains and Other Expenses](index=11&type=section&id=Other%20Income%20and%20Gains%20and%20Other%20Expenses) In H1 2025, other income and gains increased to RMB 52.9 million, primarily due to higher government grants and insurance claims, while other expenses significantly decreased by 81.9% to RMB 1.5 million, mainly from reduced foreign exchange losses and losses on disposal of property, plant and equipment | Indicator (RMB thousand) | H1 2025 | H1 2024 | | :----------------------- | :------ | :------ | | Total Other Income and Gains | 52,858 | 25,077 | | Government Grants | 31,352 | 7,399 | | Insurance Claims | 13,061 | 10,068 | | Total Other Expenses | 1,486 | 8,214 | | Net Foreign Exchange Loss| – | 2,350 | | Loss on Disposal of Property, Plant and Equipment | 692 | 5,195 | - The increase in other income and gains was mainly due to an increase in government grants of **RMB 24.0 million** and insurance claims of **RMB 3.0 million**[60](index=60&type=chunk) - The decrease in other expenses was mainly due to a reduction in foreign exchange losses recognized of **RMB 2.4 million** and a decrease in loss on disposal of property, plant and equipment of **RMB 4.5 million**[61](index=61&type=chunk) [Finance Costs](index=11&type=section&id=Finance%20Costs) Finance costs for H1 2025 increased by 2.2% year-on-year to RMB 147.0 million, primarily due to an increase in the average amount of bank borrowings | Finance Costs (RMB thousand) | H1 2025 | H1 2024 | | :--------------------------- | :---------- | :---------- | | Interest on Bank Loans | 107,429 | 102,999 | | Interest on Lease Liabilities| 39,598 | 40,938 | | **Total** | **147,027** | **143,937** | - The overall increase in finance costs was mainly due to an increase in the average amount of bank borrowings during the reporting period, resulting from additional drawdowns of working capital loans[63](index=63&type=chunk) [Loss Before Tax and Income Tax Expense](index=12&type=section&id=Loss%20Before%20Tax%20and%20Income%20Tax%20Expense) In H1 2025, loss before tax significantly narrowed to RMB 371.5 million from RMB 628.3 million in the prior year, with income tax expense recorded at RMB 6.3 million | Indicator (RMB thousand) | H1 2025 | H1 2024 | | :----------------------- | :---------- | :---------- | | Loss Before Tax | (371,508) | (628,343) | | Income Tax Expense | 6,275 | 7,670 | [Dividends](index=13&type=section&id=Dividends) No dividends were paid or declared by the Company for the six months ended June 30, 2025 - No dividends were paid or declared by the Company for the six months ended June 30, 2024 and 2025, respectively[28](index=28&type=chunk) [Loss Per Share Attributable to Ordinary Equity Holders of the Parent](index=13&type=section&id=Loss%20Per%20Share%20Attributable%20to%20Ordinary%20Equity%20Holders%20of%20the%20Parent) Basic and diluted loss per share for H1 2025 improved to RMB 0.54, compared to RMB 0.91 in the same period last year | Indicator | H1 2025 | H1 2024 | | :-------- | :------------ | :------------ | | Loss (RMB thousand) | (377,783) | (636,013) | | Shares (shares) | 700,463,112 | 700,463,112 | | Basic and Diluted Loss Per Share (RMB) | (0.54) | (0.91) | [Trade and Other Receivables](index=14&type=section&id=Trade%20and%20Other%20Receivables) As of June 30, 2025, net trade and other receivables decreased to RMB 269.3 million from RMB 296.7 million at year-end 2024, with RMB 246.2 million pledged to banks as security for borrowings | Trade and Other Receivables (RMB thousand) | June 30, 2025 | December 31, 2024 | | :--------------------------------------- | :------------ | :---------------- | | Trade and Other Receivables | 276,476 | 303,927 | | Impairment | (7,224) | (7,224) | | **Net** | **269,252** | **296,703** | - As of June 30, 2025, trade and other receivables of **RMB 246,163,000** were pledged to banks to secure certain bank borrowings granted to the Group[34](index=34&type=chunk) [Trade and Other Payables](index=15&type=section&id=Trade%20and%20Other%20Payables) As of June 30, 2025, total trade and other payables significantly decreased to RMB 467.6 million from RMB 692.3 million at year-end 2024 | Trade and Other Payables (RMB thousand) | June 30, 2025 | December 31, 2024 | | :------------------------------------ | :------------ | :---------------- | | Trade and Other Payables | 467,597 | 692,302 | [Events After the Reporting Period](index=15&type=section&id=Events%20After%20the%20Reporting%20Period) The Company successfully completed a rights issue on August 5, 2025, issuing 280,185,244 rights shares and raising net proceeds of approximately HKD 308.81 million, aimed at improving its financial position and expanding its capital base - The Company successfully completed a rights issue on August 5, 2025, issuing **280,185,244** rights shares and raising net proceeds of approximately **HKD 308.81 million**[37](index=37&type=chunk) - The rights issue aims to improve the Group's financial position and expand its capital base to support long-term development without incurring additional interest burdens[37](index=37&type=chunk) [Management Discussion and Analysis](index=16&type=section&id=Management%20Discussion%20and%20Analysis) [Industry Overview](index=16&type=section&id=Industry%20Overview) In H1 2025, China's GDP grew 5.3% year-on-year, but consumption and investment remained below expectations; the dairy farming sector faced challenges with declining Holstein cattle inventory and slowing milk production growth, yet de-capacity efforts yielded results and feed costs decreased, while the beef cattle industry gradually recovered with significant price increases, supported by favorable government policies promoting sustainable dairy development - In H1 2025, China's GDP grew by **5.3%** year-on-year, but consumption and investment remained below expectations, with total retail sales of consumer goods declining to **4.8%** year-on-year[38](index=38&type=chunk) - The operating environment for dairy farms in China remained challenging, with Holstein cattle inventory decreasing by **4.2%** year-on-year and milk production increasing by a mere **0.5%** year-on-year, though de-capacity efforts were effective and breeding costs decreased[38](index=38&type=chunk) - The beef cattle industry gradually emerged from difficulties, achieving a recovery in profitability; as of June 12, 2025, the average beef price in major domestic production areas surged to **RMB 63.75/kg**, a cumulative increase of **16.84%** from the beginning of the year and a year-on-year increase of **10.49%**[40](index=40&type=chunk) - The Chinese government actively introduced favorable policies for the dairy industry, including the implementation of the "National Food Safety Standard for Sterilized Milk" (prohibiting reconstituted milk), childcare subsidy systems, and fiscal and financial support, to help dairy farming overcome difficulties[39](index=39&type=chunk) [Business Overview](index=18&type=section&id=Business%20Overview) AustAsia Group primarily engages in dairy farming and raw milk sales, as well as beef cattle farming and fattening, ranking as China's fourth-largest raw milk producer in 2024, and also sells dairy and feed products under its own brands - The Group is primarily engaged in dairy farming, producing and selling high-quality raw milk, as well as beef cattle farming and fattening businesses[42](index=42&type=chunk) - In 2024, according to Holstein magazine, we were the **fourth largest raw milk producer** in China (by output), with an annual production of approximately **916,600 tonnes**[42](index=42&type=chunk) - In addition to raw milk and beef cattle businesses, the Group also sells dairy products and feed products under its own brands "AustAsia Dairy Farm" and "AustAsia Feed"[42](index=42&type=chunk) [Business Review](index=19&type=section&id=Business%20Review) In H1 2025, the Group continued to optimize operations, with the raw milk business significantly reducing feed costs through formula adjustments and centralized procurement, leading to a 2.9% year-on-year increase in annualized milk yield to 14.1 tonnes, while the beef cattle business's gross margin turned positive due to lower feed costs; the Group also employs in-vitro fertilization and embryo transfer technologies for breeding and holds SQF certification for high product quality - Raw Milk Business: As of June 30, 2025, the Group owned and operated **11 large-scale modern dairy farms** in Shandong and Inner Mongolia, China, with a dairy cattle inventory of **117,448 head**[43](index=43&type=chunk) - Raw Milk Business: Feed costs were significantly reduced through adjusting feed formulas, improving cattle absorption levels and feed conversion rates, and centralized procurement activities[44](index=44&type=chunk) - Raw Milk Business: Annualized milk yield increased by **2.9%** year-on-year to **14.1 tonnes**, attributed to improved herd management, upgraded genetic breeding technology, and an increased number of cows in peak lactation[44](index=44&type=chunk) - Beef Cattle Business: During the reporting period, the gross margin of the beef cattle business turned positive from negative, benefiting from a decrease in feed costs[46](index=46&type=chunk) - Breeding: The Group employs in-vitro fertilization and embryo transfer technologies to breed superior dairy cattle, possesses a core herd of over **10,030 dairy cattle**, and plans to commercialize its embryo transfer business for external farms[48](index=48&type=chunk) - Milk Quality: All **11 dairy farms** have obtained Food Safety Quality (SQF) certification and implement stringent internal quality control systems[49](index=49&type=chunk) - Customers: The Group has a diversified customer base and is not reliant on its controlling shareholder, with sales to its top five raw milk customers accounting for **73.1%** of raw milk revenue[50](index=50&type=chunk) [Revenue](index=21&type=section&id=Revenue) In H1 2025, the Group's revenue decreased by 7.1% year-on-year to RMB 1,697.9 million, primarily due to lower selling prices for raw milk and beef cattle | Product Type (RMB thousand) | H1 2025 | H1 2024 | | :-------------------------- | :---------- | :---------- | | Raw Milk | 1,309,177 | 1,424,316 | | Beef Cattle | 234,321 | 219,508 | | Other | 154,419 | 184,141 | | **Total** | **1,697,917** | **1,827,965** | - The decrease in revenue was mainly due to lower selling prices for raw milk and beef cattle[52](index=52&type=chunk) [Cost of Sales](index=21&type=section&id=Cost%20of%20Sales) In H1 2025, cost of sales was RMB 1,691.6 million, a 6.8% year-on-year decrease, with direct material costs for raw milk and beef cattle businesses decreasing by 15.4% and 2.1% respectively, primarily due to lower feed costs | Cost of Sales (RMB thousand) | H1 2025 | H1 2024 | | :--------------------------- | :---------- | :---------- | | Cost of Sales for Raw Milk | 1,309,177 | 1,424,316 | | Cost of Sales for Beef Cattle| 234,321 | 219,508 | | Cost of Sales for Other Businesses | 148,083 | 171,145 | | **Total Cost of Sales** | **1,691,581** | **1,814,969** | - Direct material costs for the raw milk business (mainly silage, forage, corn, and soy products) decreased by **15.4%** year-on-year to **RMB 720.0 million**, primarily due to lower feed costs[55](index=55&type=chunk) - Direct material costs for the beef cattle business decreased by **2.1%** year-on-year to **RMB 195.5 million**, primarily due to lower feed costs[56](index=56&type=chunk) [Gross Profit](index=23&type=section&id=Gross%20Profit) In H1 2025, the Group's gross profit increased by 35.1% year-on-year to RMB 295.9 million, with gross margin improving to 17.4%, driven by a 9.5% increase in raw milk gross profit and a turnaround from loss to profit in the beef cattle business, mainly due to lower feed costs | Business | H1 2025 Gross Profit (RMB thousand) | H1 2025 Gross Margin | H1 2024 Gross Profit (RMB thousand) | H1 2024 Gross Margin | | :------- | :---------------------------------- | :------------------- | :---------------------------------- | :------------------- | | Raw Milk | 283,609 | 21.7% | 258,914 | 18.2% | | Beef Cattle | 5,962 | 2.5% | (52,876) | -24.1% | | Other | 6,336 | 4.1% | 12,996 | 7.1% | | **Total**| **295,907** | **17.4%** | **219,034** | **12.0%** | - Gross profit for the raw milk business increased by **9.5%** year-on-year to **RMB 283.6 million**, mainly due to lower feed costs during the reporting period[57](index=57&type=chunk) - Gross profit for the beef cattle business was **RMB 6.0 million** (H1 2024: gross loss of **RMB 52.9 million**), mainly due to lower feed costs during the reporting period[58](index=58&type=chunk) [Loss from Changes in Fair Value of Other Biological Assets Less Costs to Sell](index=23&type=section&id=Loss%20from%20Changes%20in%20Fair%20Value%20of%20Other%20Biological%20Assets%20Less%20Costs%20to%20Sell) In H1 2025, the loss from changes in fair value of other biological assets less costs to sell decreased to RMB 462.4 million from RMB 605.6 million in the prior year, primarily due to lower raw milk price assumptions used in fair value calculations | Indicator (RMB thousand) | H1 2025 | H1 2024 | | :----------------------- | :---------- | :---------- | | Loss from changes in fair value of other biological assets less costs to sell | (462,425) | (605,594) | - The significant loss was mainly due to lower raw milk prices adopted in the assumptions for calculating the fair value of biological assets[59](index=59&type=chunk) [Administrative Expenses](index=24&type=section&id=Administrative%20Expenses) Administrative expenses for H1 2025 decreased by 8.4% year-on-year to RMB 103.4 million | Indicator (RMB thousand) | H1 2025 | H1 2024 | | :----------------------- | :---------- | :---------- | | Administrative Expenses | (103,381) | (112,895) | - Administrative expenses decreased by **8.4%** year-on-year[62](index=62&type=chunk) [Loss Before Tax and Loss Attributable to Owners of the Company](index=24&type=section&id=Loss%20Before%20Tax%20and%20Loss%20Attributable%20to%20Owners%20of%20the%20Company) In H1 2025, loss before tax was RMB 371.5 million and loss attributable to owners of the Company was RMB 377.8 million, both significantly narrowed from the prior year, primarily due to increased gross profit and reduced fair value losses on biological assets | Indicator (RMB thousand) | H1 2025 | H1 2024 | | :----------------------- | :---------- | :---------- | | Loss Before Tax | (371,508) | (628,343) | | Loss Attributable to Owners of the Company | (377,783) | (636,013) | - The narrowing of loss was mainly due to a **35.1%** increase in the Group's gross profit to **RMB 295.9 million** (primarily from lower feed costs), and a **RMB 143.2 million** reduction in loss from changes in fair value of other biological assets less costs to sell[65](index=65&type=chunk) [Non-IFRS Financial Measures](index=25&type=section&id=Non-IFRS%20Financial%20Measures) The Group uses non-IFRS financial measures such as Cash EBITDA and Profit/Loss before fair value adjustments of biological assets to better reflect normal operating performance, with H1 2025 Cash EBITDA at RMB 343.9 million and Profit before fair value adjustments of biological assets at RMB 84.6 million - Non-IFRS financial measures are used to adjust for the potential impact of certain non-recurring items to reflect the Group's normal operating performance[66](index=66&type=chunk) | Non-IFRS Measures (RMB thousand) | H1 2025 | H1 2024 | | :------------------------------- | :---------- | :---------- | | Cash EBITDA | 343,886 | 231,522 | | Profit/(Loss) for the period (before fair value adjustments of biological assets) | 84,642 | (30,419) | [Liquidity and Capital Resources](index=26&type=section&id=Liquidity%20and%20Capital%20Resources) The Group primarily funds its operations through cash generated from operating activities and bank borrowings, with H1 2025 net cash from operating activities at RMB 500.3 million, net cash used in investing activities at RMB 162.9 million, net cash used in financing activities at RMB 348.4 million, and cash and cash equivalents at period-end of RMB 270.9 million | Cash Flows (RMB thousand) | H1 2025 | H1 2024 | | :------------------------ | :---------- | :---------- | | Net Cash Flows from Operating Activities | 500,263 | 709,860 | | Net Cash Flows Used in Investing Activities | (162,907) | (378,163) | | Net Cash Flows Used in Financing Activities | (348,404) | (500,875) | | Net Decrease in Cash and Cash Equivalents | (11,048) | (169,178) | | Cash and Cash Equivalents at End of Period | 270,863 | 104,864 | - Net cash flows used in investing activities primarily comprised payments for biological assets of **RMB 288.1 million** and purchases of property, plant and equipment of **RMB 65.6 million**, partially offset by proceeds from disposal of biological assets of **RMB 188.0 million**[76](index=76&type=chunk) - Net cash flows used in financing activities were mainly attributable to repayment of interest-bearing bank borrowings of **RMB 2,622.0 million**, principal lease payments of **RMB 65.9 million**, and interest payments of **RMB 99.2 million**, partially offset by new interest-bearing bank borrowings of **RMB 2,439.8 million**[77](index=77&type=chunk) | Interest-Bearing Bank Borrowings (RMB thousand) | June 30, 2025 | December 31, 2024 | | :-------------------------------------------- | :------------ | :---------------- | | Current | 2,129,845 | 2,462,495 | | Non-Current | 1,195,400 | 1,035,897 | | **Total** | **3,325,245** | **3,498,392** | [Contingent Liabilities and Pledged Assets](index=29&type=section&id=Contingent%20Liabilities%20and%20Pledged%20Assets) As of June 30, 2025, the Group's bank borrowings are secured by various assets including trade receivables, inventories, property, plant and equipment, biological assets, right-of-use assets, and subsidiary shares, with certain bank loans also guaranteed by the Company, subsidiaries, and controlling shareholders; the Group is involved in a lawsuit concerning trade receivables but has no other significant litigation - The Group's bank loans are secured by trade and other receivables (**RMB 246.2 million**), inventories (**RMB 655.5 million**), property, plant and equipment (**RMB 283.7 million**), biological assets (**RMB 3,013.6 million**), right-of-use assets (**RMB 12.7 million**), and shares of subsidiaries (**RMB 562.0 million**)[81](index=81&type=chunk) - Bank loans of **RMB 3,187.5 million** are guaranteed by the Company and certain subsidiaries, and bank loans of **RMB 179.0 million** are guaranteed by certain controlling shareholders[81](index=81&type=chunk) - Shanghai AustAsia applied for a property preservation order against Hebei Yuanfuda for failure to pay for dairy products totaling **RMB 7,223,812.5**, with the related lawsuit to be heard after criminal charges are resolved[82](index=82&type=chunk) [Foreign Currency Risk](index=30&type=section&id=Foreign%20Currency%20Risk) The Group is exposed to foreign currency risk primarily from USD and SGD denominated transactions, but management considers the risk not significant and currently has no hedging policy - The Group's foreign currency risk primarily involves USD and SGD denominated transactions, with **USD 43.0 million** in working capital loans and **USD 19.0 million** in term loans outstanding as of June 30, 2025[83](index=83&type=chunk) - Management considers foreign currency risk not significant and currently has no foreign exchange hedging policy, but will monitor it closely and consider hedging if necessary[83](index=83&type=chunk) [Employees](index=30&type=section&id=Employees) Total employee compensation expenses for H1 2025 decreased by 4.0% year-on-year to RMB 188.9 million, as the Company focuses on attracting, retaining, and motivating talent through regular training and guidance | Indicator (RMB thousand) | H1 2025 | H1 2024 | | :----------------------- | :---------- | :---------- | | Total Employee Compensation Expenses | 188,924 | 196,747 | - Total employee compensation expenses decreased by **4.0%** year-on-year[84](index=84&type=chunk) - The Company recruits employees through campus recruitment, recruitment agencies, and online channels, and provides regular training and guidance to enhance skills and performance[84](index=84&type=chunk) [2025 Actions and Strategic Outlook](index=31&type=section&id=2025%20Actions%20and%20Strategic%20Outlook) Despite challenges in China's economy and dairy industry, the Group is confident in market recovery and will focus on enhancing operational efficiency, diversifying customer base and sales channels, upgrading beef cattle business and expanding into mid-to-high-end markets, leveraging genetic breeding technology and feed operations, and integrating sustainable development into its operations to achieve its vision of becoming a top-three global dairy farm operator in operational efficiency and ecological sustainability - The vision is to become a top-three global dairy farm operator in operational efficiency and ecological sustainability[85](index=85&type=chunk) - Strategies include continuously improving operational efficiency and diversifying the customer base (without capital-intensive investments, expanding customers and sales channels)[85](index=85&type=chunk) - Strategies include upgrading the beef cattle business and exploring mid-to-high-end sales channels (expanding Wagyu and Angus breeding, and expanding downstream sales channels for branded beef products)[86](index=86&type=chunk) - Strategies include focusing on genetic breeding technology and feed operations to strengthen internal integration and improve operational efficiency (advancing commercialization of in-vitro fertilization and embryo transfer technologies, optimizing feed quality and cost management)[87](index=87&type=chunk) - Strategies include integrating sustainable development into operational drivers (establishing an effective ESG governance framework, promoting carbon reduction, standard setting, equipment R&D, and model promotion)[88](index=88&type=chunk) - Key actions for 2025 include enhancing operational efficiency; advancing customer and channel diversification; reducing raw milk cost per kilogram; executing beef cattle strategic transformation; expanding feed business sales to third-party customers; and strengthening genetic improvement programs[89](index=89&type=chunk) [Other Information](index=33&type=section&id=Other%20Information) [Purchase, Sale or Redemption of the Company's Listed Securities](index=33&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company%27s%20Listed%20Securities) During the reporting period and up to the announcement date, neither the Company nor its subsidiaries purchased, sold, or redeemed any of the Company's listed securities, and no treasury shares were held as of June 30, 2025 - During the reporting period and up to the date of this announcement, neither the Company nor its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[90](index=90&type=chunk) - As of June 30, 2025, the Company did not hold any treasury shares[90](index=90&type=chunk) [Corporate Governance and Directors' Securities Transactions](index=33&type=section&id=Corporate%20Governance%20and%20Directors%27%20Securities%20Transactions) The Company is committed to maintaining good corporate governance, having adopted the Corporate Governance Code and the Model Code for Securities Transactions by Directors of Listed Issuers, and complied with relevant provisions during the reporting period - The Company has adopted the principles and code provisions of the Corporate Governance Code set out in Appendix C1 to the Listing Rules of the Stock Exchange, and has complied with the applicable provisions during the reporting period[91](index=91&type=chunk) - The Company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers as its code of conduct for directors' securities transactions, and all directors confirmed compliance with the code throughout the reporting period after due enquiry[92](index=92&type=chunk) [Interim Dividend](index=33&type=section&id=Interim%20Dividend) The Board has resolved not to recommend the payment of an interim dividend for the six months ended June 30, 2025 - The Board has resolved not to recommend the payment of an interim dividend for the six months ended June 30, 2025 (H1 2024: nil)[94](index=94&type=chunk) [Audit Committee](index=34&type=section&id=Audit%20Committee) The Audit Committee has reviewed the Group's unaudited consolidated financial statements for the six months ended June 30, 2025, along with the adopted accounting principles and policies - The Audit Committee comprises one non-executive Director and two independent non-executive Directors, with Mr. Xin Dinghua as Chairman[95](index=95&type=chunk) - The Audit Committee has reviewed the Group's unaudited consolidated financial statements for the six months ended June 30, 2025, and the accounting principles and policies adopted by the Group[95](index=95&type=chunk) [Publication of Interim Results Announcement and Interim Report](index=34&type=section&id=Publication%20of%20Interim%20Results%20Announcement%20and%20Interim%20Report) This announcement and the interim report will be published on the HKEX website and the Company's website, and will be dispatched to shareholders in due course - This announcement will be published on the HKEX website www.hkexnews.hk and the Company's website www.austasiadairy.com[96](index=96&type=chunk) - The Company's interim report for the six months ended June 30, 2025, will be published on the aforementioned websites and dispatched to shareholders (upon request) in due course[96](index=96&type=chunk)