[Interim Results Announcement](index=1&type=section&id=Interim%20Results%20Announcement) [Company Information](index=1&type=section&id=Company%20Information) New Silkroad Culturaltainment Limited (Stock Code: 472) is a Bermuda-incorporated company listed on The Stock Exchange of Hong Kong Limited - Company Name: **New Silkroad Culturaltainment Limited**[2](index=2&type=chunk) - Stock Code: **472**[2](index=2&type=chunk) - Place of Incorporation: **Bermuda**, with shares listed on The Stock Exchange of Hong Kong Limited[2](index=2&type=chunk) [Announcement Overview](index=1&type=section&id=Announcement%20Overview) This announcement presents the unaudited condensed consolidated interim results for the six months ended June 30, 2025, with prior period comparative data - This announcement details the unaudited condensed consolidated interim results for the six months ended June 30, 2025[2](index=2&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 and gross profit from continuing operations declined, while a significant goodwill impairment loss drove a substantial increase in operating and pre-tax losses Key Financial Data from the Condensed Consolidated Statement of Profit or Loss | Metric | For the six months ended June 30, 2025 (HKD in thousands) | For the six months ended June 30, 2024 (HKD in thousands, restated) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 213,440 | 232,089 | -8.0% | | Gross Profit | 48,095 | 57,420 | -16.2% | | Other income, gains and losses, net | 11,780 | (5,250) | N/A | | Impairment loss of goodwill | (48,456) | – | N/A | | Loss from operating activities | (42,042) | (3,722) | >1000% | | Loss before tax | (42,102) | (4,124) | >1000% | | Loss for the period from continuing operations | (42,647) | (7,277) | >1000% | | Loss for the period from discontinued operations | – | (54,951) | N/A | | Loss for the period | (42,647) | (62,228) | -31.4% | | Loss for the period from continuing operations attributable to owners of the Company | (41,727) | (33,191) | +25.7% | | Basic and diluted loss per share (HK cents) | (1.30) | (1.62) | -19.8% | [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=4&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) Total comprehensive loss for the period narrowed significantly, primarily due to foreign exchange gains from the translation of overseas operations Key Data from the Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income | Metric | For the six months ended June 30, 2025 (HKD in thousands) | For the six months ended June 30, 2024 (HKD in thousands, restated) | Change (%) | | :--- | :--- | :--- | :--- | | Loss for the period | (42,647) | (62,228) | -31.4% | | Exchange differences on translation of foreign operations | 13,565 | (3,264) | N/A | | Total comprehensive loss for the period | (29,082) | (65,233) | -55.4% | | Total comprehensive loss attributable to owners of the Company | (28,124) | (55,510) | -49.4% | [Condensed Consolidated Statement of Financial Position](index=5&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, both total assets and liabilities decreased, with a notable reduction in goodwill due to impairment Key Data from the Condensed Consolidated Statement of Financial Position | Metric | As at June 30, 2025 (HKD in thousands) | As at December 31, 2024 (HKD in thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Non-current assets | 988,678 | 1,030,384 | -4.0% | | Goodwill | 263,127 | 308,346 | -14.7% | | Current assets | 636,752 | 642,803 | -0.9% | | Trade receivables | 176,301 | 136,563 | +29.1% | | Prepayments, deposits and other receivables | 54,785 | 120,676 | -54.6% | | Cash and cash equivalents | 378,059 | 357,768 | +5.7% | | Current liabilities | 201,940 | 219,319 | -7.9% | | Trade payables | 82,025 | 87,942 | -6.8% | | Non-current liabilities | 33,666 | 34,963 | -3.7% | | Total equity | 1,389,824 | 1,418,905 | -2.0% | [Notes to Condensed Interim Financial Statements](index=7&type=section&id=Notes%20to%20Condensed%20Interim%20Financial%20Statements) [General Information](index=7&type=section&id=General%20Information) The company is an investment holding company with principal businesses in integrated resorts, wine distribution, and property management services - The company is an investment holding company[11](index=11&type=chunk)[14](index=14&type=chunk) - Principal subsidiaries are engaged in: (i) development and operation of integrated resorts and cultural tourism in South Korea; (ii) distribution of wine in Hong Kong; and (iii) property management services in China[11](index=11&type=chunk)[14](index=14&type=chunk) [Basis of Preparation and Principal Accounting Policies](index=7&type=section&id=Basis%20of%20Preparation%20and%20Principal%20Accounting%20Policies) The interim financial statements are prepared in accordance with HKAS 34 and Appendix 16 of the Listing Rules, with no material impact from newly adopted HKFRSs - The financial statements are prepared in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting" and the disclosure requirements of Appendix 16 to the Listing Rules[12](index=12&type=chunk)[15](index=15&type=chunk) - All new and revised HKFRSs effective from January 1, 2025, have been adopted without a significant impact on the condensed consolidated financial statements[16](index=16&type=chunk)[19](index=19&type=chunk) [Revenue Breakdown](index=8&type=section&id=Revenue%20Breakdown) Total revenue for the period was primarily generated from property management services, while wine distribution revenue was minimal and declined sharply Revenue Breakdown from Continuing Operations | Business Type | For the six months ended June 30, 2025 (HKD in thousands) | For the six months ended June 30, 2024 (HKD in thousands, restated) | Change (%) | | :--- | :--- | :--- | :--- | | Distribution of wine | 23 | 44 | -47.7% | | Property management services | 213,417 | 232,045 | -8.0% | | **Total Revenue** | **213,440** | **232,089** | **-8.0%** | - Revenue from wine distribution is recognized at a point in time, while property management services revenue is recognized over time[21](index=21&type=chunk) [Segment Information](index=9&type=section&id=Segment%20Information) The Group's continuing operations are organized into three reportable segments: real estate, wine distribution, and property management - The Group has three reportable segments from continuing operations: (i) Real estate, integrated resort and cultural tourism; (ii) Distribution of wine; and (iii) Property management services[23](index=23&type=chunk)[25](index=25&type=chunk) - Megaluck (entertainment), Huaxia Winery (wine), and Macrolink (real estate) have been presented as discontinued operations[24](index=24&type=chunk)[25](index=25&type=chunk) [Segment Revenue and Results](index=9&type=section&id=Segment%20Revenue%20and%20Results) Property management was the only profitable segment among continuing operations, with other segments reporting losses and a significant goodwill impairment impacting the total loss Segment Revenue and (Loss)/Profit | Segment | Revenue for the six months ended June 30, 2025 (HKD in thousands) | Revenue for the six months ended June 30, 2024 (HKD in thousands, restated) | Change (%) | Segment (Loss)/Profit for the six months ended June 30, 2025 (HKD in thousands) | Segment (Loss)/Profit for the six months ended June 30, 2024 (HKD in thousands, restated) | | :--- | :--- | :--- | :--- | :--- | :--- | | Real estate, integrated resort and cultural tourism | – | – | N/A | (2,407) | (13,341) | | Wine | 23 | 44 | -47.7% | (91) | (11) | | Property management | 213,417 | 232,045 | -8.0% | 8,409 | 16,012 | | Entertainment (Discontinued) | – | 804 | N/A | – | (42,586) | | Real estate, integrated resort and cultural tourism (Discontinued) | – | 15,174 | N/A | – | (8,584) | | Wine (Discontinued) | – | 35,408 | N/A | – | (3,781) | | **Total** | **213,440** | **283,475** | **-24.8%** | **5,911** | **(52,291)** | | Unallocated corporate expenses | | | | (9,810) | (6,383) | | Impairment loss of goodwill | | | | (48,456) | – | | Loss before tax | | | | (42,102) | (59,075) | [Segment Assets and Liabilities](index=10&type=section&id=Segment%20Assets%20and%20Liabilities) The property management segment holds the majority of the Group's assets and liabilities, with total segment assets and liabilities remaining relatively stable Segment Assets and Liabilities | Segment | Segment Assets as at June 30, 2025 (HKD in thousands) | Segment Assets as at December 31, 2024 (HKD in thousands) | Change (%) | Segment Liabilities as at June 30, 2025 (HKD in thousands) | Segment Liabilities as at December 31, 2024 (HKD in thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Real estate, integrated resort and cultural tourism | 567,607 | 564,360 | +0.6% | 619 | 1,249 | -50.4% | | Wine | 167 | 257 | -35.0% | 256 | – | N/A | | Property management | 797,628 | 795,668 | +0.2% | 234,077 | 251,138 | -6.8% | | **Total** | **1,365,402** | **1,360,285** | **+0.4%** | **234,952** | **252,387** | **-6.9%** | [Geographical Information](index=11&type=section&id=Geographical%20Information) All revenue from continuing operations originated from China (including Hong Kong), while non-current assets are primarily located in China and South Korea Revenue and Non-current Assets by Geographical Location | Geographical Location | Revenue from external customers for the six months ended June 30, 2025 (HKD in thousands) | Revenue from external customers for the six months ended June 30, 2024 (HKD in thousands, restated) | Change (%) | Non-current assets as at June 30, 2025 (HKD in thousands) | Non-current assets as at December 31, 2024 (HKD in thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | China (including Hong Kong) | 213,440 | 232,089 | -8.0% | 516,050 | 547,167 | -5.7% | | South Korea | – | – | N/A | 472,628 | 483,217 | -2.2% | | Australia | – | – | N/A | – | – | N/A | | **Total** | **213,440** | **232,089** | **-8.0%** | **988,678** | **1,030,384** | **-4.0%** | [Other Revenue, Gains and Losses](index=11&type=section&id=Other%20Revenue%2C%20Gains%20and%20Losses) Other income shifted from a net loss to a net gain, driven by net foreign exchange gains and increased bank interest income Breakdown of Other Revenue, Gains and Losses | Metric | For the six months ended June 30, 2025 (HKD in thousands) | For the six months ended June 30, 2024 (HKD in thousands, restated) | Change (%) | | :--- | :--- | :--- | :--- | | Bank interest income | 4,801 | 3,222 | +49.0% | | Gain/(loss) on disposal of property, plant and equipment | 217 | (6,564) | N/A | | Net foreign exchange gain/(loss) | 6,500 | (2,080) | N/A | | **Total** | **11,780** | **(5,250)** | N/A | [Loss from Operating Activities Details](index=12&type=section&id=Loss%20from%20Operating%20Activities%20Details) Amortization of intangible assets and depreciation of right-of-use assets decreased significantly, while staff costs remained relatively stable Components of Loss from Operating Activities | Metric | For the six months ended June 30, 2025 (HKD in thousands) | For the six months ended June 30, 2024 (HKD in thousands, restated) | Change (%) | | :--- | :--- | :--- | :--- | | Salaries and allowances | 15,239 | 15,629 | -2.6% | | Retirement benefit scheme contributions | 4,235 | 4,056 | +4.4% | | **Total staff costs** | **19,474** | **19,685** | **-1.1%** | | Amortisation of intangible assets | 165 | 5,343 | -96.9% | | Depreciation of right-of-use assets | 20 | 1,101 | -98.2% | | (Gain)/loss on disposal of property, plant and equipment | (217) | 6,564 | N/A | | Depreciation of property, plant and equipment | 1,397 | 1,767 | -21.0% | [Income Tax Expense](index=13&type=section&id=Income%20Tax%20Expense) Income tax expense for the period decreased substantially, mainly due to a larger deferred tax credit offsetting current tax expenses Breakdown of Income Tax Expense | Metric | For the six months ended June 30, 2025 (HKD in thousands) | For the six months ended June 30, 2024 (HKD in thousands, restated) | Change (%) | | :--- | :--- | :--- | :--- | | PRC Enterprise Income Tax | (5,091) | (6,839) | -25.5% | | Deferred tax credit | 4,546 | 3,686 | +23.3% | | **Total income tax expense** | **(545)** | **(3,153)** | **-82.7%** | - The tax rate for subsidiaries in China is **25%**[41](index=41&type=chunk) [Discontinued Operations](index=13&type=section&id=Discontinued%20Operations) The Group completed the disposal of its entertainment, wine (Mainland China), and real estate (Australia) businesses in 2024 to generate cash flow - In 2024, the Group disposed of Megaluck (entertainment), Huaxia Winery (wine), and Macrolink (real estate, integrated resort and cultural tourism)[43](index=43&type=chunk)[45](index=45&type=chunk) - The disposals were intended to generate cash flow for the expansion of the Group's other existing businesses[43](index=43&type=chunk)[45](index=45&type=chunk) - There was no loss from discontinued operations in the first half of 2025, compared to a loss of **HKD 54.951 million** in the same period of 2024[3](index=3&type=chunk)[48](index=48&type=chunk) [Disposal of Megaluck](index=17&type=section&id=Disposal%20of%20Megaluck) The disposal of the Megaluck (entertainment) business was completed on June 24, 2024, resulting in a loss of HKD 32.647 million - The disposal of Megaluck (entertainment business) was completed on **June 24, 2024**[54](index=54&type=chunk) - The disposal of Megaluck resulted in a loss of **HKD 32.647 million**[57](index=57&type=chunk) - The net cash inflow from the disposal of Megaluck was **HKD 3.987 million**[57](index=57&type=chunk) [Loss Per Share](index=19&type=section&id=Loss%20Per%20Share) Loss per share from continuing and discontinued operations improved, though loss per share from continuing operations worsened, with no potential dilutive shares outstanding Loss Per Share Data | Metric | For the six months ended June 30, 2025 (HK cents) | For the six months ended June 30, 2024 (HK cents, restated) | Change (%) | | :--- | :--- | :--- | :--- | | Loss per share from continuing and discontinued operations | (1.30) | (1.62) | -19.8% | | Loss per share from continuing operations | (1.30) | (1.03) | +26.2% | | Loss per share from discontinued operations | – | (0.59) | N/A | - Diluted loss per share was the same as basic loss per share as there were no potential dilutive ordinary shares for the six months ended June 30, 2025 and 2024[63](index=63&type=chunk) [Property, Plant and Equipment](index=21&type=section&id=Property%2C%20Plant%20and%20Equipment) Additions to property, plant, and equipment increased during the period, and the disposal of assets resulted in a gain, reversing the prior year's loss Changes in Property, Plant and Equipment | Metric | For the six months ended June 30, 2025 (HKD in thousands) | For the six months ended June 30, 2024 (HKD in thousands, restated) | Change (%) | | :--- | :--- | :--- | :--- | | Total cost of PPE additions | 642 | 373 | +72.1% | | Gain/(loss) on disposal of PPE | 217 | (6,564) | N/A | - No impairment loss on property, plant and equipment was recognized during the period[64](index=64&type=chunk)[65](index=65&type=chunk) [Trade Receivables](index=22&type=section&id=Trade%20Receivables) Both gross trade receivables and the provision for expected credit losses increased significantly, with a notable rise in receivables aged over 180 days Trade Receivables and Ageing Analysis | Metric | As at June 30, 2025 (HKD in thousands) | As at December 31, 2024 (HKD in thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Gross trade receivables | 230,219 | 175,617 | +31.1% | | Less: Provision for expected credit losses | (53,918) | (39,054) | +38.0% | | **Net trade receivables** | **176,301** | **136,563** | **+29.1%** | | **Ageing analysis (Net):** | | | | | Over 30 days up to 60 days | 19,900 | 6,374 | +212.2% | | Over 180 days up to 360 days | 62,506 | 33,784 | +84.9% | | Over 360 days | 54,991 | 42,625 | +29.0% | - The Group generally grants an average credit period of **30 to 180 days** to its trade customers[67](index=67&type=chunk) - All trade receivables are denominated in **Renminbi**[70](index=70&type=chunk) [Trade Payables](index=23&type=section&id=Trade%20Payables) Total trade payables decreased, particularly those aged over 180 days, with an average credit period of 90 days Trade Payables and Ageing Analysis | Metric | As at June 30, 2025 (HKD in thousands) | As at December 31, 2024 (HKD in thousands) | Change (%) | | :--- | :--- | :--- | :--- | | **Trade payables** | **82,025** | **87,942** | **-6.8%** | | **Ageing analysis:** | | | | | Within 90 days | 40,484 | 24,053 | +68.3% | | Over 180 days up to 360 days | 9,452 | 20,186 | -53.2% | | Over 360 days | 21,399 | 27,957 | -23.5% | - The average credit period for purchases of goods is **90 days**[73](index=73&type=chunk)[76](index=76&type=chunk) - Trade payables are non-interest-bearing and unsecured[73](index=73&type=chunk)[76](index=76&type=chunk) [Share Capital](index=23&type=section&id=Share%20Capital) The company's authorized and issued and fully paid share capital remained unchanged as of June 30, 2025 Share Capital Structure | Metric | As at June 30, 2025 (in thousands of shares) | As at December 31, 2024 (in thousands of shares) | As at June 30, 2025 (HKD in thousands) | As at December 31, 2024 (HKD in thousands) | | :--- | :--- | :--- | :--- | :--- | | Authorised ordinary shares (HK$0.01 each) | 16,000,000 | 16,000,000 | 160,000 | 160,000 | | Issued and fully paid ordinary shares (HK$0.01 each) | 3,207,592 | 3,207,592 | 32,076 | 32,076 | [Management Discussion and Analysis](index=24&type=section&id=Management%20Discussion%20and%20Analysis) [Financial Performance Overview](index=24&type=section&id=Financial%20Performance%20Overview) The period's financial performance was negatively impacted by declining property management revenue, a goodwill impairment loss, and intense competition in the wine business - Operating results were mainly affected by decreased revenue from property management services, a goodwill impairment loss, and intense competition in the wine business[78](index=78&type=chunk)[84](index=84&type=chunk)[90](index=90&type=chunk)[97](index=97&type=chunk) - Net foreign exchange gains and increased bank interest income partially offset the losses[81](index=81&type=chunk)[86](index=86&type=chunk) [Revenue](index=24&type=section&id=Revenue) Total revenue decreased by 8.1% to HKD 213.4 million, driven by lower property management income and a sharp decline in wine sales - Revenue for the period decreased by **8.1%** to approximately **HKD 213.4 million**[78](index=78&type=chunk)[84](index=84&type=chunk) - Property management services revenue decreased by **8.0%**, reflecting the cooling real estate industry and economic downturn in Mainland China[78](index=78&type=chunk)[84](index=84&type=chunk) - Wine business revenue decreased by **47.7%** to **HKD 23,000**, due to intense market competition and slow sales[79](index=79&type=chunk)[84](index=84&type=chunk) [Gross Profit](index=24&type=section&id=Gross%20Profit) The Group's gross profit fell by 16.2% to HKD 48.1 million, primarily due to reduced revenue from property management services - The Group's gross profit decreased by **16.2%** to approximately **HKD 48.1 million**[80](index=80&type=chunk)[85](index=85&type=chunk) - Gross profit from property management services decreased by **16.2%**, with the gross profit margin declining by **2.2 percentage points** to **22.5%**[80](index=80&type=chunk)[85](index=85&type=chunk) - Gross profit from the wine business decreased by **49.5%** to **HKD 9,200**, with a gross profit margin of **37.8%** (prior period: 41.8%)[80](index=80&type=chunk)[85](index=85&type=chunk) [Other Revenue and Loss](index=24&type=section&id=Other%20Revenue%20and%20Loss) Other income shifted from a loss to a gain, increasing by 324.4% to HKD 11.8 million, mainly due to net foreign exchange gains - Other income increased by **324.4%** to approximately **HKD 11.8 million** (prior period: loss of HKD 5.3 million)[81](index=81&type=chunk)[86](index=86&type=chunk) - The increase was mainly due to a net foreign exchange gain of approximately **HKD 8.6 million** and an increase in bank interest income of approximately **HKD 1.6 million**[81](index=81&type=chunk)[86](index=86&type=chunk) - The prior period included a loss of approximately **HKD 6.0 million** from the disposal of construction in progress by a South Korean subsidiary[81](index=81&type=chunk)[86](index=86&type=chunk) [Selling and Distribution Expenses](index=24&type=section&id=Selling%20and%20Distribution%20Expenses) Selling and distribution expenses were reduced to zero as the Australian real estate sales business is no longer part of continuing operations - Selling and distribution expenses decreased to **zero** (prior period: HKD 0.7 million)[82](index=82&type=chunk)[87](index=87&type=chunk) - The decrease was mainly because the Australian real estate sales business was no longer included in continuing operations, coupled with lower wine sales[82](index=82&type=chunk)[87](index=87&type=chunk) [Administrative and Other Operating Expenses](index=25&type=section&id=Administrative%20and%20Other%20Operating%20Expenses) Administrative and other operating expenses decreased by 7.2% to HKD 36.4 million, primarily due to reduced costs related to property management services - Administrative and other operating expenses decreased by **7.2%** to approximately **HKD 36.4 million**[88](index=88&type=chunk)[95](index=95&type=chunk) - The decrease was mainly attributable to reduced expenses associated with the decline in property management services[88](index=88&type=chunk)[95](index=95&type=chunk) [Impairment Loss under Expected Credit Loss Model](index=25&type=section&id=Impairment%20Loss%20under%20Expected%20Credit%20Loss%20Model) The period saw the recognition of impairment losses on trade receivables of HKD 14.4 million and other receivables of HKD 2.6 million - An impairment loss on trade receivables of approximately **HKD 14.4 million** was recognized (prior period: HKD 15.9 million)[89](index=89&type=chunk)[96](index=96&type=chunk) - An impairment loss on other receivables of approximately **HKD 2.6 million** was recognized (prior period: zero)[89](index=89&type=chunk)[96](index=96&type=chunk) [Impairment Loss of Goodwill](index=25&type=section&id=Impairment%20Loss%20of%20Goodwill) A goodwill impairment loss of HKD 48.5 million was recognized due to the underperformance of the property management business - A goodwill impairment loss of approximately **HKD 48.5 million** was recognized during the period[90](index=90&type=chunk)[97](index=97&type=chunk) - The impairment was due to the unsatisfactory performance of the property management business[90](index=90&type=chunk)[97](index=97&type=chunk) - No goodwill impairment loss was recognized in the prior period[90](index=90&type=chunk)[97](index=97&type=chunk) [Loss Before Tax](index=25&type=section&id=Loss%20Before%20Tax) The Group's loss before tax widened significantly to HKD 42.1 million, primarily due to the HKD 48.5 million goodwill impairment loss - Loss before tax increased to approximately **HKD 42.1 million** (prior period: HKD 4.1 million)[91](index=91&type=chunk)[98](index=98&type=chunk) - The increase was mainly due to the goodwill impairment loss of approximately **HKD 48.5 million** during the period[91](index=91&type=chunk)[98](index=98&type=chunk) [Taxation](index=25&type=section&id=Taxation) The Group's tax expense comprised a current income tax expense of HKD 5.1 million and a deferred tax credit of HKD 4.5 million - Current income tax expense was approximately **HKD 5.1 million** (prior period: HKD 6.8 million)[92](index=92&type=chunk)[99](index=99&type=chunk) - Deferred tax credit was approximately **HKD 4.5 million** (prior period: HKD 3.7 million)[92](index=92&type=chunk)[99](index=99&type=chunk) [Loss from Discontinued Operations](index=25&type=section&id=Loss%20from%20Discontinued%20Operations) No loss from discontinued operations was recorded this period, compared to a restated loss of HKD 55.0 million in the prior period - The Group had no loss from discontinued operations during the period[93](index=93&type=chunk)[100](index=100&type=chunk) - The restated loss from discontinued operations in the prior period was approximately **HKD 55.0 million**[93](index=93&type=chunk)[100](index=100&type=chunk) [Loss Attributable to Owners of the Company](index=25&type=section&id=Loss%20Attributable%20to%20Owners%20of%20the%20Company) Loss after tax for the period increased by 486.1% to HKD 42.6 million, with the loss attributable to company owners reaching HKD 41.7 million - Loss after tax for the period increased by **486.1%** to approximately **HKD 42.6 million**[94](index=94&type=chunk)[101](index=101&type=chunk) - Loss attributable to owners of the Company increased to approximately **HKD 41.7 million**[94](index=94&type=chunk)[101](index=101&type=chunk) [Liquidity and Financial Resources](index=26&type=section&id=Liquidity%20and%20Financial%20Resources) The Group's cash position improved, total borrowings remained stable, and it expects to have sufficient resources to meet its obligations - As of June 30, 2025, cash and cash equivalents were approximately **HKD 378.1 million** (December 31, 2024: HKD 357.8 million)[102](index=102&type=chunk)[107](index=107&type=chunk) - Total borrowings (excluding lease liabilities) remained stable at approximately **HKD 0.8 million**, bearing interest at a variable rate of **4.60%**[103](index=103&type=chunk)[107](index=107&type=chunk) - The Group is confident it will have sufficient resources to meet its debt obligations and working capital requirements for the foreseeable future[103](index=103&type=chunk)[107](index=107&type=chunk) [Balance Sheet Analysis](index=26&type=section&id=Balance%20Sheet%20Analysis) The Group's total assets and liabilities decreased, while the current ratio and gearing ratio remained healthy - Total assets decreased by **2.9%** to approximately **HKD 1,625.4 million**[104](index=104&type=chunk)[108](index=108&type=chunk) - Total liabilities decreased by **7.3%** to approximately **HKD 235.6 million**[105](index=105&type=chunk)[108](index=108&type=chunk) - The current ratio increased to **3.2** (December 31, 2024: 2.9)[106](index=106&type=chunk)[108](index=108&type=chunk) - The gearing ratio remained unchanged at **0.1%**[106](index=106&type=chunk)[108](index=108&type=chunk) - The trade receivables turnover period increased to **132 days** (December 31, 2024: 115 days), mainly due to longer ageing in the property management segment[106](index=106&type=chunk)[109](index=109&type=chunk) [Inventories](index=27&type=section&id=Inventories) The Group's inventories, primarily finished goods, decreased slightly, with a significant increase in the turnover period for property management services - Inventories decreased by **0.7%** to approximately **HKD 27.6 million**[110](index=110&type=chunk)[117](index=117&type=chunk) - The finished goods turnover period for property management services increased to **60 days** (December 31, 2024: 27 days)[110](index=110&type=chunk)[117](index=117&type=chunk) [Other Information](index=27&type=section&id=Other%20Information) [Interim Dividend](index=27&type=section&id=Interim%20Dividend) The Board of Directors does not recommend the payment of an interim dividend for the period - The Board does not recommend the payment of an interim dividend for the period (six months ended June 30, 2024: Nil)[111](index=111&type=chunk)[118](index=118&type=chunk) [Pledge of Assets](index=27&type=section&id=Pledge%20of%20Assets) As of June 30, 2025, the Group had no pledged assets - As of June 30, 2025, the Group had no pledged assets (December 31, 2024: Nil)[112](index=112&type=chunk)[119](index=119&type=chunk) [Contingent Liabilities](index=27&type=section&id=Contingent%20Liabilities) The Group had no significant contingent liabilities as of June 30, 2025, other than those disclosed in relation to legal proceedings - Apart from legal proceedings, the Group had no significant contingent liabilities as at June 30, 2025[113](index=113&type=chunk)[120](index=120&type=chunk) [Exposure to Fluctuation in Exchange Rates](index=27&type=section&id=Exposure%20to%20Fluctuation%20in%20Exchange%20Rates) The Group's foreign exchange risk is considered minimal due to natural hedging mechanisms, and no financial instruments are currently used for hedging - The Group's revenues, expenses, assets, and liabilities are denominated in HKD, RMB, KRW, CAD, and AUD[114](index=114&type=chunk)[121](index=121&type=chunk) - The impact of foreign exchange risk is considered minimal due to natural hedging from business operations, and thus no financial instruments are used for hedging[114](index=114&type=chunk)[121](index=121&type=chunk) - The Group will continue to review its treasury management function and closely monitor currency and interest rate risks[114](index=114&type=chunk)[121](index=121&type=chunk) [Material Acquisition and Disposal](index=27&type=section&id=Material%20Acquisition%20and%20Disposal) The Group had no material acquisitions or disposals of subsidiaries, associates, or joint ventures during the period - The Group had no material acquisitions or disposals of subsidiaries, associates, or joint ventures during the period[115](index=115&type=chunk)[122](index=122&type=chunk) [Significant Investment](index=27&type=section&id=Significant%20Investment) As of June 30, 2025, the Group held no significant investments valued at 5% or more of its total assets - As of June 30, 2025, the Group had no significant investments with a value of 5% or more of the Group's total assets[116](index=116&type=chunk)[123](index=123&type=chunk) [Employee Information and Emolument Policy](index=28&type=section&id=Employee%20Information%20and%20Emolument%20Policy) The number of full-time employees decreased to 1,340, with remuneration policies based on individual performance and reviewed annually - As of June 30, 2025, the Group employed **1,340** full-time employees (December 31, 2024: 1,567)[124](index=124&type=chunk)[128](index=128&type=chunk) - Remuneration policies are based on individual employee performance and are reviewed annually[124](index=124&type=chunk)[128](index=128&type=chunk) - The Group provides medical insurance and provident fund schemes for its employees[124](index=124&type=chunk)[128](index=128&type=chunk) [Litigation Update](index=28&type=section&id=Litigation%20Update) There were no further updates on the Company's litigation status during the period - During the period, there were no further updates on the Company's litigation status[125](index=125&type=chunk)[129](index=129&type=chunk) [Review of Operations and Prospects](index=28&type=section&id=Review%20of%20Operations%20and%20Prospects) [Economic Outlook](index=28&type=section&id=Economic%20Outlook) Global economic recovery in the first half of 2025 faced uncertainties from trade frictions and geopolitical tensions, impacting the Group's property management business - The global economic recovery faced uncertainties from ongoing trade frictions and geopolitical tensions[126](index=126&type=chunk)[130](index=130&type=chunk) - The cooling real estate industry and increased downward economic pressure in Mainland China negatively impacted the financial performance of the Group's property management business[126](index=126&type=chunk)[130](index=130&type=chunk) - The Group is actively exploring new business opportunities to broaden its revenue sources and diversify its business portfolio[126](index=126&type=chunk)[130](index=130&type=chunk) [Operation Review](index=28&type=section&id=Operation%20Review) The property management business saw a decline in revenue, the wine business remained sluggish, and real estate projects in South Korea and Australia are being sold - Revenue from the property management business declined, reflecting the cooling real estate industry in Mainland China[131](index=131&type=chunk) - The wine business continued to be affected by shrinking demand, with the Company seeking to dispose of the remaining operations[132](index=132&type=chunk)[136](index=136&type=chunk) - The Megaluck project in South Korea has been sold, and the Group is actively seeking a buyer for the Glorious Hill project land[133](index=133&type=chunk)[137](index=137&type=chunk) - The Opera One project in Sydney, Australia, has been completed and classified as a discontinued operation[134](index=134&type=chunk)[138](index=138&type=chunk) [Property Management Operation](index=28&type=section&id=Property%20Management%20Operation) Revenue from the property management business during the period was HKD 213.4 million, a decrease from the prior year - Revenue from the property management business reached approximately **HKD 213.4 million** during the period (prior period: HKD 232.0 million)[127](index=127&type=chunk)[131](index=131&type=chunk) [Wine Operation](index=29&type=section&id=Wine%20Operation) The Mainland China wine business was sold in October 2024, while the Hong Kong distribution business continues to face weak demand - The Mainland China wine business was sold in **October 2024**[132](index=132&type=chunk)[136](index=136&type=chunk) - Revenue from the Hong Kong wine distribution business decreased by **47.7%** year-on-year to approximately **HKD 23,000**[132](index=132&type=chunk)[136](index=136&type=chunk) - The Company is not optimistic about the future prospects of this segment and will continue to seek opportunities to dispose of its remaining wine business in Hong Kong[132](index=132&type=chunk)[136](index=136&type=chunk) [Business Operations in South Korea](index=29&type=section&id=Business%20Operations%20in%20South%20Korea) The Group has disposed of the Megaluck project and is actively seeking opportunities to sell the land for the Glorious Hill project - The Group has disposed of the Megaluck project, one of its projects in South Korea[133](index=133&type=chunk)[137](index=137&type=chunk) - The Group is also actively seeking opportunities to sell the land for the Glorious Hill project in South Korea and is awaiting further contact and offers from market buyers, with no agreement signed to date[133](index=133&type=chunk)[137](index=137&type=chunk) [Real Estate Operations (Australia)](index=29&type=section&id=Real%20Estate%20Operations%20(Australia)) The Opera One project in Sydney was completed in late 2024, and this business has been classified as a discontinued operation - The Opera One project in Sydney, Australia, was completed by the end of 2024, with all property inventory delivered to the property owners[134](index=134&type=chunk)[138](index=138&type=chunk) - The Australian project company is no longer a subsidiary of the Company, and the Australian real estate business has been classified as a discontinued operation[134](index=134&type=chunk)[138](index=138&type=chunk) [Result Review](index=29&type=section&id=Result%20Review) The Group recorded a loss of HKD 42.6 million, with a loss attributable to shareholders of HKD 41.7 million and a basic loss per share of 1.30 HK cents - The Group recorded a loss of approximately **HKD 42.6 million** (prior period: loss of HKD 62.2 million)[135](index=135&type=chunk)[139](index=139&type=chunk) - Loss attributable to the Company's shareholders was approximately **HKD 41.7 million** (prior period: loss of HKD 51.9 million)[135](index=135&type=chunk)[139](index=139&type=chunk) - Basic loss per share was **1.30 HK cents** (prior period: loss of 1.62 HK cents)[135](index=135&type=chunk)[139](index=139&type=chunk) - As of June 30, 2025, the Group's total assets and net assets were approximately **HKD 1,625.4 million** and **HKD 1,389.8 million**, respectively[135](index=135&type=chunk)[139](index=139&type=chunk) [Prospects](index=30&type=section&id=Prospects) Looking ahead, the Group will actively explore new business opportunities and consider exiting underperforming projects to enhance profitability and focus on core operations - The Group is actively exploring new business opportunities to expand its revenue sources[140](index=140&type=chunk)[143](index=143&type=chunk) - Consideration will be given to divesting from remaining long-term loss-making or stagnant projects to raise funds for strengthening core businesses and improving profitability[140](index=140&type=chunk)[143](index=143&type=chunk) - The Group will focus on enhancing profitability, concentrating on profitable business segments, and exploring diverse business opportunities to pursue sustainable and stable growth[140](index=140&type=chunk)[143](index=143&type=chunk) [Events After the End of the Period](index=30&type=section&id=Events%20After%20the%20End%20of%20the%20Period) Post-period, the company amended the Megaluck disposal agreement and committed to a HKD 50 million investment in a limited partnership fund - On August 14, 2025, the Company entered into a revised agreement for the Megaluck disposal, amending the payment method from all cash to a combination of cash and property transfer[141](index=141&type=chunk)[144](index=144&type=chunk) - On August 11, 2025, the Company committed to subscribe for a limited partnership interest in a fund with a capital commitment of **HKD 50 million**[142](index=142&type=chunk)[145](index=145&type=chunk) - This subscription is expected to offer better return potential while maintaining flexibility to pursue other investment opportunities[142](index=142&type=chunk)[145](index=145&type=chunk) [Corporate Governance and Other Disclosures](index=31&type=section&id=Corporate%20Governance%20and%20Other%20Disclosures) [Corporate Governance Statement](index=31&type=section&id=Corporate%20Governance%20Statement) The company is committed to high standards of corporate governance and has complied with all applicable code provisions of the Corporate Governance Code - The Company is committed to maintaining high standards of corporate governance and has complied with all applicable code provisions of the Corporate Governance Code as set out in Appendix C1 Part 2 of the Listing Rules[147](index=147&type=chunk)[148](index=148&type=chunk)[153](index=153&type=chunk)[154](index=154&type=chunk) - The roles of the Chairman (Mr. Wang Gengyu) and the General Manager (Mr. Zhang Jian) are separate[148](index=148&type=chunk)[154](index=154&type=chunk) [Model Code for Securities Transactions by Directors](index=31&type=section&id=Model%20Code%20for%20Securities%20Transactions%20by%20Directors) The company has adopted the Model Code as set out in Appendix C3 of the Listing Rules, and all directors have confirmed compliance - The Company has adopted the Model Code as set out in Appendix C3 of the Listing Rules[149](index=149&type=chunk)[155](index=155&type=chunk) - All directors have confirmed their compliance with the required standards set out in the Model Code throughout the period[149](index=149&type=chunk)[155](index=155&type=chunk) [Audit Committee](index=31&type=section&id=Audit%20Committee) The Audit Committee, comprising three independent non-executive directors, has reviewed the Group's unaudited interim financial information - The Audit Committee consists of three independent non-executive directors: Mr. Ting Leung Huel, Stephen (Chairman), Mr. Chow On Kiu, and Ms. Wen Yi[150](index=150&type=chunk)[156](index=156&type=chunk) - The committee has reviewed the Group's unaudited condensed consolidated interim financial information for the period and discussed accounting principles and financial reporting matters with management[150](index=150&type=chunk)[156](index=156&type=chunk) [Board Composition](index=31&type=section&id=Board%20Composition) As of the announcement date, the Board of Directors consists of five executive directors and three independent non-executive directors - As of the date of this announcement, the Board comprises five executive directors and three independent non-executive directors[151](index=151&type=chunk)[156](index=156&type=chunk)

[Company Information and Report Statement](index=1&type=section&id=Company%20Information%20and%20Report%20Statement) This section provides the company's identification details and confirms the report's scope as the unaudited condensed consolidated interim results for the six months ended June 30, 2025 - The company's name is CHINA ELECTRONICS HUADA TECHNOLOGY COMPANY LIMITED, with stock code **00085**[2](index=2&type=chunk) - This report is the unaudited condensed consolidated interim results announcement for the six months ended June 30, 2025[2](index=2&type=chunk)[3](index=3&type=chunk) [Condensed Consolidated Financial Statements](index=1&type=section&id=Condensed%20Consolidated%20Financial%20Statements) This section presents the company's condensed consolidated financial statements, including the statement of profit or loss, comprehensive income, and financial position [Condensed Consolidated Statement of Profit or Loss](index=1&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss) For the six months ended June 30, 2025, the Group's revenue decreased by **18.2%** to **HK$1,112,346 thousand**, with profit for the period falling **54.6%** due to a significant reduction in operating profit Condensed Consolidated Statement of Profit or Loss Key Data (For the six months ended June 30) | Indicator | 2025 (HK$ '000) | 2024 (HK$ '000) | Year-on-year Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 1,112,346 | 1,360,635 | -18.2% | | Cost of sales | (698,249) | (793,267) | -12.0% | | Gross profit | 414,097 | 567,368 | -27.0% | | Operating profit | 151,391 | 354,569 | -57.3% | | Profit before tax | 145,586 | 343,015 | -57.5% | | Profit for the period | 140,108 | 308,772 | -54.6% | | Profit attributable to equity holders of the Company | 138,560 | 309,545 | -55.2% | | Basic earnings per share (HK cents) | 6.83 | 15.25 | -55.2% | [Condensed Consolidated Statement of Comprehensive Income](index=3&type=section&id=Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) For the six months ended June 30, 2025, total comprehensive income decreased by **38.7%** to **HK$179,708 thousand**, primarily due to reduced profit for the period and exchange differences Condensed Consolidated Statement of Comprehensive Income Key Data (For the six months ended June 30) | Indicator | 2025 (HK$ '000) | 2024 (HK$ '000) | Year-on-year Change (%) | | :--- | :--- | :--- | :--- | | Profit for the period | 140,108 | 308,772 | -54.6% | | Exchange differences on translation of financial statements | 31,568 | (12,116) | N/A | | Exchange differences on translation of the Company's financial statements | 8,032 | (3,528) | N/A | | Total comprehensive income for the period | 179,708 | 293,128 | -38.7% | [Condensed Consolidated Statement of Financial Position](index=4&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, total assets were **HK$4,232,865 thousand**, with net current assets of **HK$1,593,900 thousand**, maintaining a net cash position, and total equity of **HK$2,468,046 thousand** Condensed Consolidated Statement of Financial Position Key Data (As of June 30) | Indicator | June 30, 2025 (HK$ '000) | December 31, 2024 (HK$ '000) | Change (%) | | :--- | :--- | :--- | :--- | | Total assets | 4,232,865 | 4,174,001 | +1.4% | | Non-current assets | 944,204 | 1,067,587 | -11.6% | | Current assets | 3,288,661 | 3,106,414 | +5.9% | | Cash and cash equivalents | 1,027,579 | 743,036 | +38.3% | | Trade and other receivables (current) | 695,140 | 525,949 | +32.2% | | Total equity | 2,468,046 | 2,471,026 | -0.1% | | Total liabilities | 1,764,819 | 1,702,975 | +3.6% | | Current liabilities | 1,694,713 | 1,542,805 | +9.8% | | Trade and other payables (current) | 1,195,731 | 979,438 | +22.1% | [Notes to the Financial Statements](index=6&type=section&id=Notes%20to%20the%20Financial%20Statements) This section details the basis of preparation, accounting policies, and specific notes for various financial statement items, including revenue, expenses, and receivables [Basis of Preparation and Principal Accounting Policies](index=6&type=section&id=Basis%20of%20Preparation%20and%20Principal%20Accounting%20Policies) The condensed consolidated interim financial statements comply with HKFRS and Listing Rules, adopting consistent accounting policies with no significant impact from new or revised standards - The condensed consolidated interim financial statements comply with all applicable disclosure requirements of HKFRS and Appendix D2 of the Listing Rules[9](index=9&type=chunk) - The accounting policies adopted are consistent with those used in the preparation of the Group's annual consolidated financial statements for the year ended December 31, 2024[10](index=10&type=chunk) - The adoption of new or revised HKFRS has no significant impact on the Group's results or financial position[10](index=10&type=chunk) [Revenue and Segment Information](index=7&type=section&id=Revenue%20and%20Segment%20Information) The Group's revenue primarily derives from integrated circuit product sales and services, operating as a single segment with nearly **100%** of revenue and over **90%** of non-current assets in Mainland China - The Group's revenue primarily comes from the sale of integrated circuit products and provision of services, totaling **HK$1,112,346 thousand** in the first half of 2025[11](index=11&type=chunk) - The Board considers the Group operates and is managed as a single segment, thus no segment information is disclosed[12](index=12&type=chunk) - Nearly **100%** of the Group's revenue and over **90%** of its non-current assets are located in Mainland China, hence no geographical information is disclosed[12](index=12&type=chunk) [Other Income - Net](index=7&type=section&id=Other%20Income%20-%20Net) Other income, net, for the six months ended June 30, 2025, decreased to **HK$36,496 thousand** from **HK$52,327 thousand** in the prior year, mainly due to reduced government grants and fair value changes of investment properties Other Income - Net (For the six months ended June 30) | Item | 2025 (HK$ '000) | 2024 (HK$ '000) | | :--- | :--- | :--- | | Government grants from ordinary activities | 16,539 | 36,650 | | Fair value changes of investment properties | (121) | (5,352) | | Interest income | 18,617 | 19,652 | | Rental income | 1,223 | – | | Others | 238 | 1,377 | | **Total** | **36,496** | **52,327** | [Finance Costs - Net](index=8&type=section&id=Finance%20Costs%20-%20Net) Net finance costs for the six months ended June 30, 2025, significantly decreased to **HK$5,696 thousand** from **HK$10,928 thousand** in the prior year, primarily due to lower interest expenses on borrowings and deposits received Finance Costs - Net (For the six months ended June 30) | Item | 2025 (HK$ '000) | 2024 (HK$ '000) | | :--- | :--- | :--- | | Interest expense on borrowings | 7,389 | 9,774 | | Interest expense on lease liabilities | 699 | 943 | | Interest expense on deposits received | 3,873 | 8,813 | | **Total finance costs** | **11,961** | **19,530** | | Interest income from cash and cash equivalents | (2,723) | (4,337) | | Interest income from deposits paid | (3,542) | (4,265) | | **Total finance income** | **(6,265)** | **(8,602)** | | **Finance costs - net** | **5,696** | **10,928** | [Profit Before Tax](index=8&type=section&id=Profit%20Before%20Tax) Profit before tax is stated after deducting various expenses, notably a significant increase in research and development costs to **HK$222,909 thousand** and higher employee benefit expenses Profit Before Tax Deductions (For the six months ended June 30) | Item | 2025 (HK$ '000) | 2024 (HK$ '000) | | :--- | :--- | :--- | | Depreciation of property, plant and equipment | 10,962 | 6,525 | | Depreciation of right-of-use assets | 11,475 | 11,515 | | Amortisation of intangible assets | 23,071 | 18,854 | | Inventories (reversal of provision) / provision | (9,132) | 10,288 | | Employee benefit expenses | 187,575 | 162,506 | | Research and development costs | 222,909 | 183,250 | - Research and development costs for the six months ended June 30, 2025, increased to **HK$222,909 thousand** from **HK$183,250 thousand** in the prior year, primarily comprising employee and material costs[15](index=15&type=chunk) [Taxation](index=9&type=section&id=Taxation) Taxation expense for the six months ended June 30, 2025, significantly decreased to **HK$5,478 thousand** from **HK$34,243 thousand** in the prior year, benefiting from preferential corporate income tax rates in China Taxation Components (For the six months ended June 30) | Item | 2025 (HK$ '000) | 2024 (HK$ '000) | | :--- | :--- | :--- | | Current period tax - China corporate income tax | (5,594) | 22,442 | | Deferred tax - origination and reversal of temporary differences | 6,279 | 366 | | Deferred tax - withholding income tax on undistributed profits | 4,793 | 11,435 | | **Total taxation** | **5,478** | **34,243** | - Beijing CE Huada Electronic Design Co, Ltd and Shanghai Huahong Integrated Circuit Co, Ltd enjoy preferential corporate income tax rates of **10%** and **15%** respectively[18](index=18&type=chunk) - The Group's foreign-invested enterprises are subject to a **10%** withholding income tax on dividends distributed to shareholders outside Mainland China[18](index=18&type=chunk) [Dividends](index=9&type=section&id=Dividends) The Board of Directors has resolved not to declare any dividends for the six months ended June 30, 2025 - The Board resolved not to declare any dividends for the six months ended June 30, 2025[17](index=17&type=chunk) [Earnings Per Share](index=10&type=section&id=Earnings%20Per%20Share) Basic earnings per share for the six months ended June 30, 2025, significantly decreased to **6.83 HK cents** from **15.25 HK cents** in the prior year, primarily due to reduced profit attributable to equity holders Earnings Per Share Calculation (For the six months ended June 30) | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | Profit for the period attributable to equity holders of the Company (HK$ '000) | 138,560 | 309,545 | | Weighted average number of ordinary shares in issue (thousand shares) | 2,029,872 | 2,029,872 | | Basic earnings per share (HK cents) | 6.83 | 15.25 | - Diluted earnings per share is not presented as the Company has no unissued potential dilutive ordinary shares[20](index=20&type=chunk) [Trade and Other Receivables](index=10&type=section&id=Trade%20and%20Other%20Receivables) As of June 30, 2025, total trade receivables significantly increased to **HK$512,836 thousand** from **HK$350,166 thousand** at the end of 2024, with the largest increase in the 61-180 day aging category Trade Receivables Aging Analysis (HK$ '000) | Aging | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Within 30 days | 160,636 | 120,825 | | 31 to 60 days | 44,221 | 117,591 | | 61 to 180 days | 306,032 | 108,846 | | Over 180 days and within 1 year | 831 | 93 | | Over 1 year | 1,116 | 2,811 | | **Total** | **512,836** | **350,166** | - The Group's credit period for most sales ranges from **30 to 180 days**[21](index=21&type=chunk) [Trade and Other Payables](index=10&type=section&id=Trade%20and%20Other%20Payables) As of June 30, 2025, total trade payables increased to **HK$560,599 thousand** from **HK$416,869 thousand** at the end of 2024, with a notable increase in payables aged over 60 days Trade Payables Aging Analysis (HK$ '000) | Aging | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Within 30 days | 138,781 | 182,969 | | 31 to 60 days | 54,102 | 130,117 | | Over 60 days | 367,716 | 103,783 | | **Total** | **560,599** | **416,869** | [Business and Financial Review](index=11&type=section&id=Business%20and%20Financial%20Review) This section provides an overview of the Group's business performance, financial position, operating expenses, and future outlook for the period [Performance Overview](index=11&type=section&id=Performance%20Overview) For the six months ended June 30, 2025, revenue decreased by **18.2%** to **HK$1,112.3 million**, profit attributable to equity holders fell **55.2%** to **HK$138.6 million**, and basic EPS was **6.83 HK cents** 2025 First Half Performance Overview | Indicator | 2025 First Half (HK$ Million) | 2024 First Half (HK$ Million) | Year-on-year Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 1,112.3 | 1,360.6 | -18.2% | | Profit attributable to equity holders of the Company | 138.6 | 309.5 | -55.2% | | Basic earnings per share (HK cents) | 6.83 | 15.25 | -55.2% | [Integrated Circuit Design Business](index=11&type=section&id=Integrated%20Circuit%20Design%20Business) The Group's integrated circuit design business faced a sluggish global market and intense competition, leading to decreased revenue and gross margin, despite stable overall sales volume and new intellectual property registrations - The Group's integrated circuit design business covers smart card and security chip design and application system development, primarily for identity recognition, financial payment, government public services, telecommunications, IoT, and IoV sectors[25](index=25&type=chunk) - In the first half of 2025, global smart card and security chip market demand was sluggish, domestic and international competition remained fierce, and product selling prices significantly declined[25](index=25&type=chunk) - Sales volumes of security SE chips and financial card chips decreased, with a significant drop in third-generation social security card chips; however, sales volumes of security master control chips and identity recognition products substantially increased, resulting in overall sales volume similar to the prior year[25](index=25&type=chunk) - During the period, **8 new patents**, **4 new software copyrights**, and **1 new integrated circuit layout design** were registered[25](index=25&type=chunk) [Operating Expense Analysis](index=11&type=section&id=Operating%20Expense%20Analysis) The Group experienced a decline in revenue and overall gross margin due to weak market demand and heightened industry competition, with administrative expenses rising significantly due to increased R&D investment - The decline in revenue and overall gross margin primarily reflects sluggish smart card and security chip market demand, intense industry competition, and continuous decline in product selling prices[26](index=26&type=chunk) [Selling and Marketing Costs](index=11&type=section&id=Selling%20and%20Marketing%20Costs) Selling and marketing costs for the six months ended June 30, 2025, decreased to **HK$23.1 million**, representing **2.1%** of revenue, indicating stable cost control amidst increased marketing efforts Selling and Marketing Costs (For the six months ended June 30) | Indicator | 2025 (HK$ Million) | 2024 (HK$ Million) | | :--- | :--- | :--- | | Selling and marketing costs | 23.1 | 26.8 | | As a percentage of revenue | 2.1% | 2.0% | [Administrative Expenses and Research and Development Costs](index=12&type=section&id=Administrative%20Expenses%20and%20Research%20and%20Development%20Costs) Administrative expenses rose **14.3%** to **HK$272.2 million** for the six months ended June 30, 2025, driven by increased R&D costs of **HK$222.9 million**, focusing on security chips, smart card performance, and IoT/IoV applications Administrative Expenses and Research and Development Costs (For the six months ended June 30) | Indicator | 2025 (HK$ Million) | 2024 (HK$ Million) | | :--- | :--- | :--- | | Administrative expenses | 272.2 | 238.0 | | As a percentage of revenue | 24.5% | 17.5% | | Research and development costs | 222.9 | 183.3 | | As a percentage of revenue | 20.0% | 13.5% | - R&D primarily focuses on security SE chip products, security master control chip products, enhancing smart card product performance and security certification levels, and developing security chips and application system solutions for IoT and IoV fields[27](index=27&type=chunk) [Outlook](index=12&type=section&id=Outlook) The global smart card and security chip market is expected to continue its downturn with intensified competition and declining prices, but rising demand for intelligent device security and eSIM applications present new opportunities for the Group to strengthen its market leadership - Global smart card and security chip market demand is expected to remain in a downward cycle, with intensifying domestic competition and continued decline in product selling prices[28](index=28&type=chunk) - While security SE chip business growth has slowed, increased demand for intelligent device security and the promotion of eSIM applications will broaden application areas, creating new market opportunities[28](index=28&type=chunk) - The Group will continue to closely monitor domestic market demand, seize market opportunities, and actively expand its customer base to consolidate its leading position in the smart card and security chip sectors[28](index=28&type=chunk) [Dividend Policy](index=12&type=section&id=Dividend%20Policy) The Board of Directors has resolved not to declare any dividends for the six months ended June 30, 2025 - The Board has resolved not to declare any dividends for the six months ended June 30, 2025[29](index=29&type=chunk) [Financial Position Review](index=12&type=section&id=Financial%20Position%20Review) The Group maintains a prudent treasury policy, with **HK$1,027.6 million** in cash and cash equivalents and **HK$383.8 million** in bank borrowings as of June 30, 2025, indicating a net cash position with no significant capital commitments or contingent liabilities - As of June 30, 2025, the Group held cash and cash equivalents of **HK$1,027.6 million** (December 31, 2024: HK$743.0 million), with **94.5%** held in RMB[30](index=30&type=chunk) - Bank and other borrowings amounted to **HK$383.8 million**, all due within one year, unsecured, and at fixed interest rates[31](index=31&type=chunk) - The Group's net current assets were **HK$1,593.9 million**, maintaining a net cash position with no significant outstanding capital commitments or contingent liabilities[32](index=32&type=chunk) [Employees and Remuneration Policy](index=13&type=section&id=Employees%20and%20Remuneration%20Policy) As of June 30, 2025, the Group employed approximately **450** staff with employee benefit expenses of **HK$187.6 million**, implementing stringent recruitment, performance evaluation, and multi-level training programs with market-aligned remuneration - As of June 30, 2025, the Group employed approximately **450** staff, with employee benefit expenses totaling **HK$187.6 million**[33](index=33&type=chunk) - The Group has stringent recruitment policies and performance appraisal plans, with remuneration policies generally aligned with industry practices, determined by performance and experience, and regularly reviewed[33](index=33&type=chunk) - Employee training is structured into company-level, department-level, and individual-level programs, focusing on cross-departmental general training, knowledge and skill enhancement, and individual supplementary development[33](index=33&type=chunk) [Other Information](index=14&type=section&id=Other%20Information) This section covers subsequent events, securities transactions, corporate governance, audit committee review, and the publication details of the interim report [Subsequent Events](index=14&type=section&id=Subsequent%20Events) As of August 29, 2025, the Board is unaware of any significant events affecting the Group since June 30, 2025 - As of August 29, 2025, the Board is unaware of any significant events affecting the Group since June 30, 2025[34](index=34&type=chunk) [Securities Transactions](index=14&type=section&id=Securities%20Transactions) Neither the Company nor its subsidiaries repurchased, sold, or redeemed any of the Company's securities during the six months ended June 30, 2025 - Neither the Company nor any of its subsidiaries repurchased, sold, or redeemed any of the Company's securities during the six months ended June 30, 2025[35](index=35&type=chunk) [Corporate Governance](index=14&type=section&id=Corporate%20Governance) The Company is committed to the highest standards of corporate governance and 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 - The Company complied with all applicable code provisions of the Corporate Governance Code during the six months ended June 30, 2025[36](index=36&type=chunk) [Audit Committee](index=14&type=section&id=Audit%20Committee) The Audit Committee under the Board of Directors has reviewed the Group's unaudited condensed consolidated interim financial statements for the six months ended June 30, 2025 - The Audit Committee under the Board of Directors has reviewed the Group's unaudited condensed consolidated interim financial statements for the six months ended June 30, 2025[37](index=37&type=chunk) [Publication of Interim Report](index=14&type=section&id=Publication%20of%20Interim%20Report) The 2025 Interim Report will be published later on the Company's website (www.cecht.com.cn) and HKEXnews website (www.hkexnews.hk) - The 2025 Interim Report will be published on the Company's website (www.cecht.com.cn) and the HKEXnews website (www.hkexnews.hk)[38](index=38&type=chunk)

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不負責，對其準確 性或完整性亦不發表任何聲明，並明確表示，概不對因本公告全部或任何部份內容而產生或 因倚賴該等內容而引致的任何損失承擔任何責任。 * SHANGHAI ELECTRIC GROUP COMPANY LIMITED 上海電氣集團股份有限公司 （於中華人民共和國註冊成立的股份有限公司） （股份代號：02727） 二零二五年中期業績 業績摘要 上海電氣集團股份有限公司（「本公司」）董事會（「董事會」）謹此宣佈本公司及其附屬 公司（「本集團」或「上海電氣」）截至二零二五年六月三十日止六個月（「報告期」）的 中期業績，該業績未經審核，但已經本公司審核委員會（「審核委員會」）審閱。本公司截 至二零二五年六月三十日止六個月中期業績根據中國企業會計準則編製。 - 1 - ► 二零二五年上半年營業總收入為人民幣543.03億元，較上年同期上升8.9% ► 二零二五年上半年股東應占利潤為人民幣8.21億元，較上年同期上升7.3% ► 二零二五年上半年基本每股收益人民幣0.053元，較上年同期上升8.2% ► 二零二五年上半年新增訂單人民幣1,098. ...

Corporate Information [Board of Directors and Committees](index=5&type=section&id=Board%20of%20Directors%20and%20Committees) The company's board of directors consists of executive directors Ms. Xie Qingmei (Chairperson), Mr. Wu Zheyan (CEO), and three independent non-executive directors, with audit, risk management, remuneration, and nomination committees ensuring robust corporate governance - The Board of Directors comprises **2 executive directors** and **3 independent non-executive directors**[15](index=15&type=chunk)[16](index=16&type=chunk) - The company has an Audit Committee, Risk Management Committee, Remuneration Committee, and Nomination Committee, each chaired by an independent non-executive director[15](index=15&type=chunk)[16](index=16&type=chunk) [Company Information and Contacts](index=6&type=section&id=Company%20Information%20and%20Contacts) This section details key contact and administrative information including authorized representatives, auditors, legal advisors, principal bankers, registered office, Hong Kong principal place of business, China headquarters, share registrar, and official website - Authorized representatives are Mr. Wu Zheyan and Mr. Wong Wai Lun[17](index=17&type=chunk)[18](index=18&type=chunk) - The auditor is Albert International CPA Limited, and legal counsel is Hogan Lovells[17](index=17&type=chunk)[18](index=18&type=chunk) - Principal bankers include Agricultural Bank of China, China Construction Bank, and Bank of China Zhangping Branch[17](index=17&type=chunk)[18](index=18&type=chunk) Management Discussion and Analysis [Results of Operation](index=8&type=section&id=Results%20of%20Operation) For the six months ended June 30, 2025, the Group's revenue increased by 7.0% year-on-year to RMB 199.5 million, with gross profit margin significantly rising to 12.9% and gross profit reaching RMB 15.7 million 2025 H1 Operating Performance Overview | Indicator | 2025 H1 (RMB'000) | 2024 H1 (RMB'000) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 199,500 | 186,500 | 7.0% | | Gross Profit Margin | 12.9% | 7.2% | +5.7pp | | Gross Profit | 15,700 | 13,400 | +17.2% | [Business Review](index=8&type=section&id=Business%20Review) The Group's core business segments include wood product manufacturing and sales, and renewable energy product manufacturing and sales; wood product revenue grew 6.8% with profit, while renewable energy revenue grew 34.1% but incurred a loss, with Australasia being a key growth driver - Core business segments are the production and sale of wood products and the production and sale of renewable energy products[26](index=26&type=chunk) [Segment Review](index=8&type=section&id=Segment%20Review) Wood product business remains the Group's primary revenue source, with revenue growing 6.8% to RMB 198.1 million and turning a profit of RMB 7.6 million from a loss in the prior period; renewable energy revenue grew 34.1% to RMB 1.4 million but recorded a loss of RMB 0.3 million Segment Revenue and Profit/(Loss) (For the six months ended June 30, 2025) | Segment | 2025 Revenue (RMB'000) | 2024 Revenue (RMB'000) | Revenue Change (%) | 2025 Profit/(Loss) (RMB'000) | 2024 Profit/(Loss) (RMB'000) | | :--- | :--- | :--- | :--- | :--- | :--- | | Wood Products | 198,090 | 185,431 | 6.8% | 7,588 | (609) | | Renewable Energy Products | 1,421 | 1,060 | 34.1% | (298) | 262 | | **Total** | **199,511** | **186,491** | **7.0%** | **7,290** | **(347)** | - The wood product business accounts for **99.3% of total revenue**, while the renewable energy business accounts for **0.7%**[26](index=26&type=chunk) - Global economic instability led to conservative customer purchasing, yet wood product revenue still saw slight growth[27](index=27&type=chunk) [Geographical Revenue Distribution](index=9&type=section&id=Geographical%20Revenue%20Distribution) During the period, the Australasian market was the Group's largest revenue source and achieved growth, while China market revenue significantly increased, and North America, Europe, and Asia Pacific (excluding China) saw decreased revenue Geographical Revenue Distribution (For the six months ended June 30, 2025) | Market | 2025 Revenue (RMB'000) | 2024 Revenue (RMB'000) | Change (%) | | :--- | :--- | :--- | :--- | | China | 41,300 | 15,125 | +172.0% | | North America | 8,749 | 20,357 | -57.0% | | Europe | 6,832 | 11,277 | -39.4% | | Asia Pacific (excluding China) | 2,175 | 3,928 | -44.6% | | Australasia | 140,455 | 135,804 | +3.4% | | **Total** | **199,511** | **186,491** | **7.0%** | - The Australasian market is the Group's largest revenue source, accounting for **70.4% of total revenue**[30](index=30&type=chunk) [Financial Review](index=10&type=section&id=Financial%20Review) The Group's financial performance significantly improved during the period, turning a loss into profit, primarily due to increased wood product sales, net foreign exchange gains, and reduced selling and distribution expenses and finance costs, despite lower other income and slightly increased administrative expenses; liquidity remains robust with increased cash and cash equivalents [Revenue](index=10&type=section&id=Revenue_FinancialReview) Wood product revenue remains the largest income source, growing 6.8% to RMB 198.1 million, driven by increased sales in Australasia; renewable energy business revenue grew 34.1% to RMB 1.4 million, but domestic market demand decreased Product Revenue (For the six months ended June 30, 2025) | Product | 2025 Revenue (RMB'000) | 2024 Revenue (RMB'000) | Change (%) | | :--- | :--- | :--- | :--- | | Wood Products | 198,090 | 185,431 | 6.8% | | Renewable Energy Products | 1,421 | 1,060 | 34.1% | | **Total** | **199,511** | **186,491** | **7.0%** | - Wood product revenue accounts for **99.3% of total sales**, primarily attributable to increased sales in the Australasian market[31](index=31&type=chunk) - Renewable energy business revenue increased, but domestic market demand decreased[32](index=32&type=chunk)[36](index=36&type=chunk) [Other Revenue](index=10&type=section&id=Other%20Revenue_FinancialReview) Other income significantly decreased by 56.2% to RMB 12.2 million during the period, primarily due to reduced bank deposit interest income Other Income (For the six months ended June 30, 2025) | Indicator | 2025 (RMB'000) | 2024 (RMB'000) | Change (%) | | :--- | :--- | :--- | :--- | | Other Income | 12,200 | 27,900 | -56.2% | | Primary Reason | Decrease in bank deposit interest income | | | [Other Net Gain/Loss](index=10&type=section&id=Other%20Net%20Gain_Loss) The Group recorded a net other gain of RMB 16.3 million during the period, primarily from net foreign exchange gains, contrasting with a loss in the prior period Other Net Gain/(Loss) (For the six months ended June 30, 2025) | Indicator | 2025 (RMB'000) | 2024 (RMB'000) | | :--- | :--- | :--- | | Other Net Gain | 16,300 | (2,800) | | Primary Reason | Net foreign exchange gains | | [Selling and Distribution Expenses](index=10&type=section&id=Selling%20and%20Distribution%20Expenses) Selling and distribution expenses decreased by 39.1% to RMB 6.6 million during the period, primarily due to reduced sales personnel costs Selling and Distribution Expenses (For the six months ended June 30, 2025) | Indicator | 2025 (RMB'000) | 2024 (RMB'000) | Change (%) | | :--- | :--- | :--- | :--- | | Selling and Distribution Expenses | 6,600 | 10,800 | -39.1% | | Primary Reason | Decrease in sales personnel costs | | | [Administrative Expenses](index=11&type=section&id=Administrative%20Expenses) Administrative expenses slightly increased to RMB 18.4 million during the period, primarily due to higher research and development costs and corporate expenses Administrative Expenses (For the six months ended June 30, 2025) | Indicator | 2025 (RMB'000) | 2024 (RMB'000) | | :--- | :--- | :--- | | Administrative Expenses | 18,400 | 18,000 | | Primary Reason | Increase in R&D costs and corporate expenses | | [Finance Costs](index=11&type=section&id=Finance%20Costs) Finance costs significantly decreased to approximately RMB 3.6 million, primarily due to bank loan interest payments Finance Costs (For the six months ended June 30, 2025) | Indicator | 2025 (RMB'000) | 2024 (RMB'000) | Change (%) | | :--- | :--- | :--- | :--- | | Finance Costs | 3,600 | 8,800 | -59.0% | | Primary Reason | Bank loan interest payments | | | [Dividend](index=11&type=section&id=Dividend_FinancialReview) The Board of Directors does not recommend paying any interim dividend for the six months ended June 30, 2025 - The Board of Directors does not recommend paying an interim dividend for the period[42](index=42&type=chunk)[48](index=48&type=chunk) [Profit for the Period](index=11&type=section&id=Profit%20for%20the%20Period) Considering the aforementioned factors, the Group recorded a profit of approximately RMB 8.8 million for the period, successfully reversing the loss from the prior period Profit/(Loss) for the Period (For the six months ended June 30, 2025) | Indicator | 2025 (RMB'000) | 2024 (RMB'000) | | :--- | :--- | :--- | | Profit/(Loss) for the Period | 8,800 | (1,700) | [Liquidity and Capital Resources](index=11&type=section&id=Liquidity%20and%20Capital%20Resources) The Group primarily meets liquidity needs through operating cash flow and bank borrowings; as of June 30, 2025, current assets were RMB 535.4 million, cash and cash equivalents increased to RMB 33.8 million, and total utilized bank facilities were RMB 222.6 million - Working capital requirements are primarily met through operating cash flows and bank borrowings[44](index=44&type=chunk)[50](index=50&type=chunk) Liquidity and Capital Resources (As of June 30, 2025) | Indicator | June 30, 2025 (RMB'000) | December 31, 2024 (RMB'000) | | :--- | :--- | :--- | | Current Assets | 535,400 | 550,700 | | Cash and Cash Equivalents | 33,800 | 27,200 | | Total Utilized Bank Facilities | 222,600 | 186,400 | [Pledge of Assets](index=12&type=section&id=Pledge%20of%20Assets) As of June 30, 2025, the Group pledged land use rights, buildings, and bank deposits, primarily to secure bank loans, derivative financial instruments, and bills payable - Land use rights, buildings, and bank deposits are pledged to secure bank loans, derivative financial instruments, and bills payable[51](index=51&type=chunk)[56](index=56&type=chunk) [Capital Expenditure](index=12&type=section&id=Capital%20Expenditure) During the period, the Group's total expenditure on property, plant, and equipment was RMB 3.0 million, with no such expenditure in the prior period Capital Expenditure (For the six months ended June 30, 2025) | Indicator | 2025 (RMB'000) | 2024 (RMB'000) | | :--- | :--- | :--- | | Total Expenditure on Property, Plant and Equipment | 3,000 | 0 | [Capital Commitment and Contingent Liabilities](index=12&type=section&id=Capital%20Commitment%20and%20Contingent%20Liabilities) As of June 30, 2025, the Group had no significant capital commitments or contingent liabilities - As of June 30, 2025, the Group had no significant capital commitments or contingent liabilities[53](index=53&type=chunk)[58](index=58&type=chunk) [Significant Investment, Material Acquisitions and Disposals of Subsidiaries, Future Plans for Material Investments or Acquisition of Capital Assets](index=12&type=section&id=Significant%20Investment,%20Material%20Acquisitions%20and%20Disposals%20of%20Subsidiaries,%20Future%20Plans%20for%20Material%20Investments%20or%20Acquisition%20of%20Capital%20Assets) The company had no significant investments, acquisitions, or disposals of subsidiaries during the period; the Group currently has no major plans for capital asset investments or acquisitions but will continue to seek potential opportunities - No significant investments, acquisitions, or disposals of subsidiaries occurred during the period[54](index=54&type=chunk)[58](index=58&type=chunk) - There are currently no major plans for capital asset investments or acquisitions, but potential opportunities will be sought as development needs arise[54](index=54&type=chunk)[58](index=58&type=chunk) [Foreign Currency Risks](index=12&type=section&id=Foreign%20Currency%20Risks) The Group faces profit margin risks from RMB appreciation against USD and AUD, as sales are primarily denominated in USD/AUD while costs are in RMB; the Group manages exchange rate fluctuations through forward foreign currency contracts and matching cash flows - Sales are primarily denominated in USD, AUD, and RMB, while costs and operating expenses are mainly denominated in RMB[55](index=55&type=chunk)[59](index=59&type=chunk) - Appreciation of the RMB against the USD and AUD may impact profit margins[55](index=55&type=chunk)[59](index=59&type=chunk) - Foreign exchange risk is managed through forward foreign currency contracts and matching USD-denominated export sales with timber import cash flows[55](index=55&type=chunk)[59](index=59&type=chunk)[60](index=60&type=chunk) [Prospects](index=13&type=section&id=Prospects) The 2025 outlook for China's wood product exports is cautiously optimistic, driven by recovering global housing demand and cross-border e-commerce; however, new EU sustainability regulations, US tariffs, and Southeast Asian competition pose challenges; success hinges on shifting to sustainably certified production, high-value innovative products, and market diversification - The outlook for China's wood product exports in 2025 is cautiously optimistic[62](index=62&type=chunk)[64](index=64&type=chunk) - Growth drivers include recovering global housing demand and the development of cross-border e-commerce[62](index=62&type=chunk)[64](index=64&type=chunk) - Challenges include new EU sustainability regulations, ongoing US tariffs, and competition from Southeast Asian manufacturers[62](index=62&type=chunk)[64](index=64&type=chunk) - Strategic transformation focuses on sustainably certified production, high-value innovative products, and market diversification[62](index=62&type=chunk)[64](index=64&type=chunk) [Human Resources](index=14&type=section&id=Human%20Resources) As of June 30, 2025, the Group employed 288 staff, primarily in China and Hong Kong; the Group continuously enhances process automation, strengthens employee training, and offers competitive remuneration packages, discretionary bonuses, and social insurance contributions Number of Employees (As of June 30, 2025) | Indicator | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Total Employees | 288 | 232 | - The Group maintains continuous employee development and enhances competitiveness by increasing process automation, strengthening staff training, and focusing on high-tech processing[65](index=65&type=chunk)[68](index=68&type=chunk) - Remuneration policy is based on individual employee performance, offering competitive compensation packages, discretionary bonuses, and social insurance contributions[65](index=65&type=chunk)[66](index=66&type=chunk)[68](index=68&type=chunk) [Events After the Reporting Period](index=14&type=section&id=Events%20After%20the%20Reporting%20Period) No significant events occurred for the Group after the reporting period - No significant events occurred for the Group after the reporting period[67](index=67&type=chunk)[69](index=69&type=chunk) Other Information [Directors' and Chief Executive's Interests and Short Positions in Shares, Underlying Shares and Debentures](index=15&type=section&id=Directors'%20and%20Chief%20Executive's%20Interests%20and%20Short%20Positions%20in%20Shares,%20Underlying%20Shares%20and%20Debentures) As of June 30, 2025, executive directors Mr. Wu Zheyan and Ms. Xie Qingmei held interests in the company's shares, with Mr. Wu Zheyan holding a total of 22.2% through controlled corporations and as a beneficial owner, and Ms. Xie Qingmei holding 1.82% Directors' and Chief Executive's Interests in Shares (As of June 30, 2025) | Director Name | Capacity/Nature of Interest | Number of Shares | Approximate Percentage of Holding (%) | | :--- | :--- | :--- | :--- | | Mr. Wu Zheyan | Interest in controlled corporation/Long position | 8,992,948 | 9.76% | | | Beneficial owner/Long position | 11,459,540 | 12.44% | | Ms. Xie Qingmei | Beneficial owner/Long position | 1,675,068 | 1.82% | - Mr. Wu Zheyan is deemed to have an interest in the shares held by Green Seas Capital Limited, a company wholly owned by him[73](index=73&type=chunk) [Interests and Short Positions of the Substantial Shareholders in Shares and Underlying Shares of the Company](index=17&type=section&id=Interests%20and%20Short%20Positions%20of%20the%20Substantial%20Shareholders%20in%20Shares%20and%20Underlying%20Shares%20of%20the%20Company) As of June 30, 2025, besides the directors, the company's substantial shareholders include Green Seas Capital Limited, Hong Kong Chengkun Holdings Limited, Hong Kong Guoyuan Group Financial Holdings Limited, and Ms. Wu Baozhen, all holding over 8% of shares Substantial Shareholders' Interests in Shares (As of June 30, 2025) | Name/Entity | Capacity/Nature of Interest | Number of Shares | Approximate Percentage of Holding (%) | | :--- | :--- | :--- | :--- | | Green Seas Capital Limited | Beneficial owner/Long position | 8,992,948 | 9.76% | | Hong Kong Chengkun Holdings Limited | Beneficial owner/Long position | 8,292,000 | 8.99% | | Ms. Wang Xinyi | Interest in controlled corporation/Long position | 8,292,000 | 8.99% | | Hong Kong Guoyuan Group Financial Holdings Limited | Beneficial owner/Long position | 14,035,000 | 15.23% | | Shanghai Jingxun Industrial Equipment Holdings Limited | Interest in controlled corporation/Long position | 14,035,000 | 15.23% | | Mr. Wang Xin | Interest in controlled corporation/Long position | 14,035,000 | 15.23% | | Ms. Wu Baozhen | Beneficial owner/Long position | 9,730,000 | 10.56% | - Green Seas Capital Limited is wholly owned by Mr. Wu Zheyan[78](index=78&type=chunk) - Hong Kong Guoyuan Group Financial Holdings Limited is wholly owned by Shanghai Jingxun Industrial Equipment Holdings Limited, which is **98% owned** by Mr. Wang Xin[78](index=78&type=chunk) [Share Option Scheme](index=19&type=section&id=Share%20Option%20Scheme) The company adopted a share option scheme in 2012 to recognize and reward contributions from eligible participants; the scheme expired in 2022, and no share options have been granted since its effective date - The Share Option Scheme was adopted on June 15, 2012, to recognize and reward eligible participants' contributions to the Group[81](index=81&type=chunk)[83](index=83&type=chunk) - The maximum number of shares that can be granted is **10% of the total issued shares** upon completion of the global offering, amounting to **100,000,000 shares**[81](index=81&type=chunk)[83](index=83&type=chunk) - The scheme expired in 2022, and no share options have been granted since its effective date[86](index=86&type=chunk)[89](index=89&type=chunk) [Share Award Scheme](index=21&type=section&id=Share%20Award%20Scheme) The company adopted a share award scheme in 2020 to align eligible persons' interests with the Group and encourage long-term contributions; total awarded shares do not exceed 20% of issued shares; awards were granted in 2020, 2021, and 2024, with a new 2025 scheme proposed on August 8, 2025 - The Share Award Scheme was adopted on December 14, 2020, to align eligible persons' interests with the Group and encourage their long-term contributions[90](index=90&type=chunk)[95](index=95&type=chunk) - The total number of awarded shares shall not exceed **20% of the total issued shares** (i.e., **741,200,400 shares**)[91](index=91&type=chunk)[95](index=95&type=chunk) - On April 15, 2024, **3,900,000 award shares** were granted to **7 employees**, with a vesting period of **12 months**[99](index=99&type=chunk)[100](index=100&type=chunk) - On August 8, 2025, the company proposed adopting the 2025 Share Award Scheme, valid for ten years, to be satisfied by allotting new shares and/or acquiring existing shares in the market, subject to shareholder approval[109](index=109&type=chunk)[110](index=110&type=chunk)[113](index=113&type=chunk) [Interim Dividend](index=24&type=section&id=Interim%20Dividend) The Board of Directors resolved not to declare any interim dividend for the six months ended June 30, 2025 - The Board of Directors resolved not to declare an interim dividend for the period[112](index=112&type=chunk)[114](index=114&type=chunk) [Compliance with the Corporate Governance Code](index=25&type=section&id=Compliance%20with%20the%20Corporate%20Governance%20Code) The company complied with Corporate Governance Code principles during the period and up to the report date, with explained deviations from C.5.1 (board meeting frequency) and D.1.2 (monthly updates to all directors) - The company complies with the Corporate Governance Code principles, but deviates from **Code Provision C.5.1** and **D.1.2**[115](index=115&type=chunk)[119](index=119&type=chunk) - The deviation from C.5.1 is because the Board only held two regular meetings, with other matters handled by written resolutions or ad-hoc meetings[116](index=116&type=chunk)[119](index=119&type=chunk) - The deviation from D.1.2 is due to monthly updates being conducted on-site at the China factory, which not all directors could receive[118](index=118&type=chunk)[120](index=120&type=chunk) [Model Code for Securities Transactions by Directors](index=26&type=section&id=Model%20Code%20for%20Securities%20Transactions%20by%20Directors) The company adopted the Model Code as the code of conduct for directors' securities transactions, and all directors confirmed compliance with its provisions during the period - The company has adopted the Model Code as the code of conduct for directors' securities transactions[121](index=121&type=chunk)[124](index=124&type=chunk) - All directors confirmed compliance with the required standards set out in the Model Code during the period[121](index=121&type=chunk)[124](index=124&type=chunk) [Audit Committee](index=26&type=section&id=Audit%20Committee) The company's Audit Committee reviewed the Group's adopted accounting principles and policies with management, discussed audit, internal control, and financial reporting matters, and reviewed the unaudited interim financial report for the period - The Audit Committee has reviewed the Group's accounting principles and policies, and discussed audit, internal control, and financial reporting matters[122](index=122&type=chunk)[125](index=125&type=chunk) - The Audit Committee has reviewed the unaudited interim financial report for the period[122](index=122&type=chunk)[125](index=125&type=chunk) [Purchase, Sale and Redemption of Listed Securities](index=26&type=section&id=Purchase,%20Sale%20and%20Redemption%20of%20Listed%20Securities) Neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities during the period and up to the report date - Neither the company nor its subsidiaries purchased, sold, or redeemed any of the company's listed securities during the period and up to the report date[123](index=123&type=chunk)[126](index=126&type=chunk) Consolidated Statement of Profit or Loss – Unaudited [Consolidated Statement of Profit or Loss Summary](index=27&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss%20Summary) For the six months ended June 30, 2025, the Group's revenue grew 7.0% to RMB 199.5 million, gross profit increased to RMB 15.7 million; profit for the period reached RMB 8.8 million, reversing the prior period's loss, with basic and diluted earnings per share of RMB 0.0950 Key Data from Consolidated Statement of Profit or Loss (For the six months ended June 30, 2025) | Indicator | 2025 (RMB'000) | 2024 (RMB'000) | | :--- | :--- | :--- | | Revenue | 199,511 | 186,491 | | Cost of Sales | (183,762) | (173,110) | | Gross Profit | 15,749 | 13,381 | | Other Income | 12,202 | 27,883 | | Other Net Gain/(Loss) | 16,323 | (2,817) | | Selling and Distribution Expenses | (6,604) | (10,839) | | Administrative Expenses | (18,449) | (17,986) | | Expected Credit Loss (Provision)/Reversal for Financial Assets | (8,051) | (2,000) | | Operating Profit/(Loss) | 11,170 | 7,622 | | Finance Costs | (3,625) | (8,804) | | Profit/(Loss) Before Tax | 7,545 | (1,182) | | Income Tax Credit | 1,207 | (533) | | Profit/(Loss) for the Period | 8,752 | (1,715) | | Earnings/(Loss) Per Share Basic and Diluted (RMB) | 0.0950 | (0.0183) | - Profit for the period was **RMB 8,752 thousand**, a significant improvement from a loss of **RMB 1,715 thousand** in the prior period[127](index=127&type=chunk) - Basic and diluted earnings per share were **RMB 0.0950**, compared to a loss per share of **RMB 0.0183** in the prior period[127](index=127&type=chunk) Consolidated Statement of Profit or Loss and Other Comprehensive Income – Unaudited [Consolidated Statement of Profit or Loss and Other Comprehensive Income Summary](index=28&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income%20Summary) For the six months ended June 30, 2025, the Group's profit for the period was RMB 8.8 million, and with other comprehensive income (primarily from exchange differences on translating foreign operations' financial statements and fair value changes of equity investments), total comprehensive income for the period reached RMB 12.5 million Key Data from Consolidated Statement of Profit or Loss and Other Comprehensive Income (For the six months ended June 30, 2025) | Indicator | 2025 (RMB'000) | 2024 (RMB'000) | | :--- | :--- | :--- | | Profit/(Loss) for the Period | 8,752 | (1,715) | | Exchange differences on translating foreign operations' financial statements | 3,597 | 6,017 | | Fair value changes of equity investments | 176 | – | | Total Comprehensive Income for the Period | 12,525 | 4,302 | - Total comprehensive income for the period was **RMB 12,525 thousand**, a significant increase from **RMB 4,302 thousand** in the prior period[129](index=129&type=chunk) Consolidated Statement of Financial Position – Unaudited [Consolidated Statement of Financial Position Summary](index=29&type=section&id=Consolidated%20Statement%20of%20Financial%20Position%20Summary) As of June 30, 2025, the Group's total assets less current liabilities were RMB 1,012.1 million, and net assets were RMB 887.4 million; total current assets were RMB 788.9 million, total current liabilities were RMB 253.5 million, and net current assets were RMB 535.4 million Key Data from Consolidated Statement of Financial Position (As of June 30, 2025) | Indicator | June 30, 2025 (RMB'000) | December 31, 2024 (RMB'000) | | :--- | :--- | :--- | | Total Non-current Assets | 476,733 | 452,599 | | Total Current Assets | 788,936 | 758,229 | | Total Current Liabilities | 253,544 | 207,483 | | Total Non-current Liabilities | 124,744 | 128,489 | | Net Assets | 887,381 | 874,856 | | Total Equity | 887,381 | 874,856 | - Cash and cash equivalents increased from **RMB 27.2 million** as of December 31, 2024, to **RMB 33.8 million** as of June 30, 2025[131](index=131&type=chunk) - The portion of interest-bearing bank borrowings (secured) repayable within one year or on demand increased from **RMB 66.4 million** as of December 31, 2024, to **RMB 106.2 million** as of June 30, 2025[131](index=131&type=chunk) Consolidated Statement of Changes in Equity – Unaudited [Consolidated Statement of Changes in Equity Summary](index=31&type=section&id=Consolidated%20Statement%20of%20Changes%20in%20Equity%20Summary) For the six months ended June 30, 2025, total equity attributable to equity holders increased from RMB 874.9 million on January 1, 2025, to RMB 887.4 million, primarily driven by profit for the period of RMB 8.8 million and other comprehensive income of RMB 3.8 million Key Data from Consolidated Statement of Changes in Equity (For the six months ended June 30, 2025) | Indicator | January 1, 2025 (RMB'000) | June 30, 2025 (RMB'000) | | :--- | :--- | :--- | | Share Capital | 38,462 | 38,462 | | Share Premium | 695,243 | 695,243 | | Exchange Reserve | 31,690 | 35,287 | | Statutory Reserve | 55,107 | 55,107 | | Fair Value Reserve (Non-recyclable) | (5,882) | (5,706) | | Retained Profits | 60,236 | 68,988 | | **Total Attributable to Equity Holders of the Company** | **874,856** | **887,381** | - Profit for the period of **RMB 8,752 thousand** and other comprehensive income of **RMB 3,773 thousand** contributed to the equity growth[135](index=135&type=chunk) Consolidated Cash Flow Statement – Unaudited [Consolidated Cash Flow Statement Summary](index=33&type=section&id=Consolidated%20Cash%20Flow%20Statement%20Summary) For the six months ended June 30, 2025, the Group reported net cash outflow from operating activities of RMB 6.2 million, net cash outflow from investing activities of RMB 28.1 million, and net cash inflow from financing activities of RMB 40.8 million; cash and cash equivalents increased by RMB 6.5 million to RMB 33.8 million at period-end Key Data from Consolidated Cash Flow Statement (For the six months ended June 30, 2025) | Activity Type | 2025 (RMB'000) | 2024 (RMB'000) | | :--- | :--- | :--- | | Net Cash (Used in)/Generated from Operating Activities | (6,188) | 20,811 | | Net Cash Used in Investing Activities | (28,089) | (76,011) | | Net Cash Generated from Financing Activities | 40,766 | 36,296 | | Net Increase/(Decrease) in Cash and Cash Equivalents | 6,489 | (18,904) | | Cash and Cash Equivalents at June 30 | 33,767 | 13,615 | - Cash flow from operating activities shifted from a net inflow in the prior period to a **net outflow** in the current period[137](index=137&type=chunk) - Net cash outflow from investing activities significantly decreased, primarily due to reduced fixed deposits and pledged deposits[137](index=137&type=chunk) Notes to the Unaudited Interim Financial Report [Basis of Preparation](index=35&type=section&id=Basis%20of%20Preparation) This interim financial report is prepared in accordance with HKEX Listing Rules and IAS 34, authorized for issue by the Board, adopting the same accounting policies as the 2024 annual financial statements, and includes explanations for changes in financial position and performance - This interim financial report is prepared in compliance with the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited and International Accounting Standard 34[140](index=140&type=chunk)[145](index=145&type=chunk) - The report adopts the same accounting policies as the 2024 annual financial statements, except for changes in accounting policies expected to be reflected in the 2025 annual financial statements[141](index=141&type=chunk)[145](index=145&type=chunk) - The 2024 annual financial statements have been filed with the Registrar of Companies, and the auditor's report contained no qualified opinion[144](index=144&type=chunk)[146](index=146&type=chunk)[147](index=147&type=chunk)[148](index=148&type=chunk) [Changes in Accounting Policies](index=36&type=section&id=Changes%20in%20Accounting%20Policies) Certain IFRS amendments issued by the IASB became effective for the first time in this accounting period but had no significant impact on the Group's current or prior period results and financial position; the Group has not early adopted any new standards or interpretations not yet effective - The International Accounting Standards Board has issued several amendments to International Financial Reporting Standards, which became effective for the Group for the first time in the current accounting period[149](index=149&type=chunk)[151](index=151&type=chunk) - These standard changes had no significant impact on how the Group's current or prior period results and financial position are prepared or presented in this interim financial report[149](index=149&type=chunk)[151](index=151&type=chunk) [Revenue](index=36&type=section&id=Revenue_Notes) The Group's primary business is manufacturing and selling outdoor wood products and renewable energy products; total revenue for the period was RMB 199.5 million, with wood products accounting for the majority; revenue is classified by major geographical markets (China, North America, Europe, Asia Pacific, Australasia) and product type, recognized upon product transfer - The Group's principal activities are the production and sale of outdoor wood products and the production and sale of renewable energy products[150](index=150&type=chunk)[151](index=151&type=chunk) Revenue from Contracts with Customers (For the six months ended June 30, 2025) | Product | 2025 (RMB'000) | 2024 (RMB'000) | | :--- | :--- | :--- | | Sale of outdoor wood products | 198,090 | 185,431 | | Sale of renewable energy products | 1,421 | 1,060 | | **Total** | **199,511** | **186,491** | - Revenue is disaggregated by major geographical markets (China, North America, Europe, Asia Pacific, Australasia) and major products (wood products, renewable energy products)[155](index=155&type=chunk)[158](index=158&type=chunk) [Segment Reporting](index=39&type=section&id=Segment%20Reporting) The Group has two reportable segments: manufacturing and selling wood products, and manufacturing and selling renewable energy products; the wood product segment is the primary revenue source and achieved profit, while the renewable energy segment recorded a loss; geographically, Australasia is the largest source of external customer revenue - The Group has identified two reportable segments: the production and sale of wood products, and the production and sale of renewable energy products[159](index=159&type=chunk)[162](index=162&type=chunk) Reportable Segment Revenue and Profit/(Loss) (For the six months ended June 30, 2025) | Segment | 2025 External Customer Revenue (RMB'000) | 2025 Segment Profit/(Loss) (RMB'000) | | :--- | :--- | :--- | | Wood Products | 198,090 | 7,588 | | Renewable Energy Products | 1,421 | (298) | | **Total** | **199,511** | **7,290** | - Australasia is the largest source of external customer revenue, amounting to **RMB 140.5 million** in 2025[173](index=173&type=chunk) [Seasonality of Operations](index=43&type=section&id=Seasonality%20of%20Operations) The Group's operations are not significantly affected by seasonal fluctuations, and sales revenue recorded in both the first and second halves of the financial year are not impacted by seasonality - The Group's operations are not significantly affected by seasonal fluctuations[174](index=174&type=chunk) [Other Revenue and Other Net Gain/Loss](index=44&type=section&id=Other%20Revenue%20and%20Other%20Net%20Gain_Loss_Notes) Other income decreased to RMB 12.2 million during the period, primarily due to reduced bank deposit interest income; concurrently, the Group recorded a net other gain of RMB 16.3 million, mainly from net exchange gains Other Income (For the six months ended June 30, 2025) | Indicator | 2025 (RMB'000) | 2024 (RMB'000) | | :--- | :--- | :--- | | Bank deposit interest income | 9,537 | 26,849 | | Government subsidies | – | 284 | | Others | 2,665 | 750 | | **Total** | **12,202** | **27,883** | Other Net Gain/(Loss) (For the six months ended June 30, 2025) | Indicator | 2025 (RMB'000) | 2024 (RMB'000) | | :--- | :--- | :--- | | Net exchange gains/(losses) | 16,302 | (2,074) | | Fair value changes of derivative financial instruments | 4 | (744) | | Others | 17 | 1 | | **Total** | **16,323** | **(2,817)** | - Unconditional government subsidies were **zero** in 2025, compared to **RMB 284 thousand** in 2024[175](index=175&type=chunk) [Profit/Loss Before Taxation](index=45&type=section&id=Profit_Loss%20Before%20Taxation) Profit/loss before taxation is calculated considering finance costs and other items; finance costs significantly decreased, while inventory costs, depreciation of property, plant and equipment, investment property depreciation, and R&D costs were major expense items Finance Costs (For the six months ended June 30, 2025) | Indicator | 2025 (RMB'000) | 2024 (RMB'000) | | :--- | :--- | :--- | | Interest expense on bank loans and bonds | 3,623 | 8,804 | | Interest on lease liabilities | 2 | – | | **Total** | **3,625** | **8,804** | Other Items (For the six months ended June 30, 2025) | Indicator | 2025 (RMB'000) | 2024 (RMB'000) | | :--- | :--- | :--- | | Cost of inventories | 183,762 | 173,110 | | Depreciation of property, plant and equipment | 13,028 | 15,660 | | Depreciation of investment properties | 1,451 | 960 | | Research and development costs | 4,435 | 5,410 | [Income Tax in the Consolidated Statement of Profit or Loss](index=46&type=section&id=Income%20Tax%20in%20the%20Consolidated%20Statement%20of%20Profit%20or%20Loss) The Group is exempt from income tax in the Cayman Islands and BVI, with no Hong Kong profits tax provision; Chinese subsidiary Zhangping Kimura enjoys preferential high-tech enterprise tax rates, some small enterprise subsidiaries benefit from preferential rates for low-profit small enterprises, and Australian subsidiaries are subject to a 30% statutory tax rate Income Tax in the Consolidated Statement of Profit or Loss (For the six months ended June 30, 2025) | Indicator | 2025 (RMB'000) | 2024 (RMB'000) | | :--- | :--- | :--- | | Current tax - Corporate income tax | – | 533 | | Deferred tax credit | (1,207) | – | | **Total** | **(1,207)** | **533** | - The Group is not subject to income tax in the Cayman Islands and British Virgin Islands, and no provision for Hong Kong profits tax has been made[180](index=180&type=chunk) - Chinese subsidiary Zhangping Kimura enjoys a preferential income tax rate for high-tech enterprises, and some small enterprise subsidiaries benefit from effective preferential tax rates ranging from **2.5% to 10%**[180](index=180&type=chunk)[181](index=181&type=chunk) [Earnings/Loss Per Share](index=47&type=section&id=Earning_Loss%20Per%20Share) For the six months ended June 30, 2025, basic and diluted earnings per share were RMB 0.0950, calculated based on profit attributable to equity holders of RMB 8,752,000 and a weighted average of 92,137,051 issued shares Earnings/(Loss) Per Share (For the six months ended June 30, 2025) | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | Profit/(Loss) attributable to equity holders of the Company (RMB'000) | 8,752 | (1,715) | | Weighted average number of issued shares | 92,137,051 | 92,137,051 | | Basic and diluted earnings/(loss) per share (RMB) | 0.0950 | (0.0183) | [Property, Plant and Equipment](index=48&type=section&id=Property,%20Plant%20and%20Equipment) For the six months ended June 30, 2025, the Group incurred costs of RMB 2,982,000 for the acquisition of plant and machinery, with no such expenditure in the prior period Acquisition Cost of Property, Plant and Equipment (For the six months ended June 30, 2025) | Indicator | 2025 (RMB'000) | 2024 (RMB'000) | | :--- | :--- | :--- | | Acquisition cost of plant and machinery | 2,982 | – | [Inventories](index=48&type=section&id=Inventories) As of June 30, 2025, the Group's total inventories were RMB 114.5 million, primarily comprising raw materials and work-in-progress; no inventory write-downs occurred during the period or the prior period Inventory Composition (As of June 30, 2025) | Inventory Category | June 30, 2025 (RMB'000) | December 31, 2024 (RMB'000) | | :--- | :--- | :--- | | Raw materials | 66,162 | 38,107 | | Work-in-progress | 45,605 | 57,211 | | Finished goods | 2,771 | 28,334 | | **Total** | **114,538** | **123,652** | - No inventory write-downs occurred for the six months ended June 30, 2025, and 2024[190](index=190&type=chunk) [Trade and Other Receivables](index=49&type=section&id=Trade%20and%20Other%20Receivables) As of June 30, 2025, the Group's total trade and other receivables were RMB 190.7 million; net trade receivables were RMB 70.0 million, and total prepayments for raw materials and other receivables were RMB 120.7 million; trade receivables aging analysis shows most are due within 3 months Trade and Other Receivables (As of June 30, 2025) | Category | June 30, 2025 (RMB'000) | December 31, 2024 (RMB'000) | | :--- | :--- | :--- | | Total trade receivables (net of loss allowance) | 70,001 | 77,394 | | Prepayments for raw materials | 80,066 | 44,068 | | Total prepayments and other receivables (net of loss allowance) | 120,679 | 79,615 | | **Total** | **190,680** | **157,009** | Aging Analysis of Trade Receivables (As of June 30, 2025) | Aging | June 30, 2025 (RMB'000) | December 31, 2024 (RMB'000) | | :--- | :--- | :--- | | Within 1 month | 22,362 | 25,036 | | 1 to 2 months | 24,722 | 20,556 | | 2 to 3 months | 22,415 | 20,650 | | Over 3 months | 502 | 11,152 | | **Total** | **70,001** | **77,394** | - Trade receivables and bills receivable are generally due within **90 to 180 days** from the invoice date[196](index=196&type=chunk)[198](index=198&type=chunk) [Pledged Deposits](index=50&type=section&id=Pledged%20Deposits) Deposits pledged to banks have been used as collateral for bank financing and financial derivative instruments issued by banks to the Group - Deposits pledged to banks have been used as collateral for bank financing and financial derivative instruments issued by banks to the Group[197](index=197&type=chunk)[199](index=199&type=chunk) [Cash and Cash Equivalents](index=51&type=section&id=Cash%20and%20Cash%20Equivalents) As of June 30, 2025, the Group's cash and cash equivalents totaled RMB 33,767,000, primarily comprising cash at bank and in hand Cash and Cash Equivalents (As of June 30, 2025) | Category | June 30, 2025 (RMB'000) | December 31, 2024 (RMB'000) | | :--- | :--- | :--- | | Cash at bank and in hand | 33,767 | 27,200 | [Trade and Other Payables](index=51&type=section&id=Trade%20and%20Other%20Payables) As of June 30, 2025, the Group's total trade and other payables were RMB 109.6 million; trade payables and bills payable were RMB 77.4 million, with most due within 1 month; other payables and accrued expenses primarily include salaries, wages, bonuses, and payables for property, plant, and equipment purchases Trade and Other Payables (As of June 30, 2025) | Category | June 30, 2025 (RMB'000) | December 31, 2024 (RMB'000) | | :--- | :--- | :--- | | Trade payables and bills payable | 77,353 | 85,309 | | Other payables and accrued expenses | 31,871 | 27,080 | | Provision for medical compensation | 3,855 | 4,000 | | Less: Non-current portion of provision for medical compensation | (3,510) | (3,610) | | **Total** | **109,569** | **112,779** | Maturity Analysis of Trade Payables (As of June 30, 2025) | Aging | June 30, 2025 (RMB'000) | December 31, 2024 (RMB'000) | | :--- | :--- | :--- | | Within 1 month | 59,607 | 27,330 | | 1 to 2 months | 12,794 | 12,969 | | 2 to 3 months | 370 | 13,963 | | Over 3 months | 4,582 | 31,047 | | **Total** | **77,353** | **85,309** | - All the above balances are expected to be settled within one year or on demand[204](index=204&type=chunk) [Contract Liabilities](index=52&type=section&id=Contract%20Liabilities) Contract liabilities represent the aggregate transaction price allocated to unsatisfied performance obligations at the reporting period end, primarily advance payments received for wood product sales; as of June 30, 2025, contract liabilities increased by RMB 13.3 million, mainly due to increased advance payments for sales - Contract liabilities represent advance payments received from customers for goods not yet transferred, primarily including advance payments for wood product sales[206](index=206&type=chunk)[207](index=207&type=chunk)[208](index=208&type=chunk) Changes in Contract Liabilities (As of June 30, 2025) | Indicator | June 30, 2025 (RMB'000) | December 31, 2024 (RMB'000) | | :--- | :--- | :--- | | As at January 1 | 12,805 | 7,675 | | Cash received in advance for performance obligations not yet satisfied during the year | 26,124 | 12,632 | | **As at June 30/December 31** | **26,124** | **12,805** | - Contract liabilities increased by **RMB 13,319 thousand**, primarily due to increased advance payments for sales[207](index=207&type=chunk)[208](index=208&type=chunk) [Interest-Bearing Bank Borrowings, Secured](index=54&type=section&id=Interest-Bearing%20Bank%20Borrowings,%20Secured) As of June 30, 2025, the Group's total interest-bearing bank borrowings were RMB 222.6 million, with RMB 106.2 million repayable within one year or on demand, and RMB 116.4 million repayable between one and two years Maturity Analysis of Interest-Bearing Bank Borrowings (As of June 30, 2025) | Maturity Date | June 30, 2025 (RMB'000) | December 31, 2024 (RMB'000) | | :--- | :--- | :--- | | Within one year or on demand | 106,150 | 66,400 | | Over one year but not exceeding two years | 116,400 | 120,000 | | **Total** | **222,550** | **186,400** | [Capital, Reserves and Dividends](index=54&type=section&id=Capital,%20Reserves%20and%20Dividends) The Board does not recommend an interim dividend; regarding share capital, award shares were granted in 2021, a share consolidation occurred in 2024, and 3,900,000 award shares were granted to employees in April 2024; no award shares were granted for the six months ended June 30, 2025; fair value reserve (non-recyclable) includes net cumulative changes in fair value of equity investments - The Board of Directors does not recommend paying an interim dividend for the six months ended June 30, 2025[215](index=215&type=chunk) - In 2021, a total of **66,618,016 award shares** were granted to **13 selected participants** under the Share Award Scheme[216](index=216&type=chunk)[217](index=217&type=chunk) - On January 2, 2024, a share consolidation became effective, where every **ten shares of HK$0.05** each were consolidated into **one share of HK$0.5**[222](index=222&type=chunk) - On April 15, 2024, **3,900,000 award shares** were granted to **7 employees**, with a vesting period of **12 months**[223](index=223&type=chunk) - No award shares were granted for the six months ended June 30, 2025[224](index=224&type=chunk) [Fair Value Measurement of Financial Instruments](index=57&type=section&id=Fair%20Value%20Measurement%20of%20Financial%20Instruments) As of June 30, 2025, the Group's derivative financial instrument assets and liabilities were zero, accounted for at fair value, classified as Level 2 under IFRS 13; Level 2 fair value measurements utilize valuation techniques such as discounted contractual forward prices - As of June 30, 2025, the Group's derivative financial instrument assets and liabilities were **zero**, accounted for at fair value, and classified as **Level 2** in the fair value hierarchy[227](index=227&type=chunk)[231](index=231&type=chunk) - Level 2 fair value measurements utilize valuation techniques such as discounted contractual forward prices and deducting current spot rates[229](index=229&type=chunk)[231](index=231&type=chunk) - There is no material difference between the carrying amounts and fair values of the Group's financial instruments accounted for at cost or amortized cost[233](index=233&type=chunk)[237](index=237&type=chunk) [Commitments](index=58&type=section&id=Commitments) As of June 30, 2025, there were no unprovided and outstanding capital commitments within these consolidated financial statements - As of June 30, 2025, the Group had no unprovided and outstanding capital commitments[234](index=234&type=chunk)[238](index=238&type=chunk) [Material Related Party Transactions](index=58&type=section&id=Material%20Related%20Party%20Transactions) The Group entered into material related party transactions during the reporting period, including amounts due from an associate (Green Seas Capital Limited) and amounts due to a director; key management personnel compensation also increased Amounts Due from an Associate (As of June 30, 2025) | Counterparty Name | Relationship | June 30, 2025 (RMB'000) | December 31, 2024 (RMB'000) | | :--- | :--- | :--- | :--- | | Green Seas Capital Limited | Private company controlled by Mr. Wu Zheyan (a director of the Company) | 71 | 72 | Amounts Due to a Director (As of June 30, 2025) | Category | June 30, 2025 (RMB'000) | December 31, 2024 (RMB'000) | | :--- | :--- | :--- | | Amount due to a director | 7,822 | 10,781 | Key Management Personnel Compensation (For the six months ended June 30, 2025) | Category | 2025 (RMB'000) | 2024 (RMB'000) | | :--- | :--- | :--- | | Short-term employee benefits | 2,823 | 730 | | Contributions to retirement schemes | 32 | 2 | | **Total** | **2,855** | **732** |

[Interim Results Overview](index=1&type=section&id=Interim%20Results%20for%20the%20Six%20Months%20Ended%2030%20June%202025) This section provides a concise overview of the group's financial performance and position for the six months ended June 30, 2025 [Condensed Consolidated Statement of Profit or Loss](index=1&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E6%90%8D%E7%9B%8A%E8%A1%A8) The group recorded an expanded net loss of **RMB 2,029.8 million** for the six months ended June 30, 2025, compared to **RMB 1,610.4 million** in the prior period, primarily due to a significant revenue decline, impairment losses on properties held for sale, and fair value changes of investment properties | Indicator | 2025 (RMB'000) | 2024 (RMB'000) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 1,039,691 | 1,942,823 | -46.5% | | Gross Profit | 376,296 | 437,732 | -14.0% | | Other Income and Losses, Net | (105,108) | (21,905) | +380.0% | | Impairment Loss on Properties Held for Sale | (471,228) | – | N/A | | Fair Value Change of Investment Properties | (1,070,050) | (951,714) | +12.4% | | Finance Costs | (682,597) | (833,526) | -18.1% | | Loss Before Tax | (2,175,213) | (1,600,486) | +35.9% | | Loss for the Period | (2,029,785) | (1,610,419) | +26.0% | | Loss Attributable to Owners of the Company | (1,837,931) | (1,528,224) | +20.3% | | Basic Loss Per Share (RMB cents) | (31.25) | (29.98) | +4.2% | [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=2&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E6%90%8D%E7%9B%8A%E5%8F%8A%E5%85%B6%E4%BB%96%E5%85%A8%E9%9D%A2%E6%94%B6%E7%9B%8A%E8%A1%A8) The group's total comprehensive expense for the six months ended June 30, 2025, increased to **RMB 1,882.8 million**, primarily due to an expanded loss for the period, partially offset by foreign exchange translation differences and fair value changes of equity instruments at fair value through other comprehensive income | Indicator | 2025 (RMB'000) | 2024 (RMB'000) | Change (%) | | :--- | :--- | :--- | :--- | | Loss for the Period | (2,029,785) | (1,610,419) | +26.0% | | Exchange Differences on Translation | 84,520 | (24,882) | N/A | | Fair Value Change of Equity Instruments at Fair Value Through Other Comprehensive Income | 62,438 | 55,168 | +13.2% | | Other Comprehensive Income for the Period | 146,958 | 30,286 | +385.2% | | Total Comprehensive Expense for the Period | (1,882,827) | (1,580,133) | +19.2% | | Total Comprehensive Expense Attributable to Owners of the Company | (1,691,096) | (1,497,373) | +12.9% | [Condensed Consolidated Statement of Financial Position](index=3&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81%E5%A0%B1%E8%A1%A8) As of June 30, 2025, the group's total assets slightly decreased, while total liabilities increased, leading to a reduction in net assets and reflecting liquidity pressure from a decline in net current assets | Indicator | June 30, 2025 (RMB'000) | December 31, 2024 (RMB'000) | Change (%) | | :--- | :--- | :--- | :--- | | Non-current Assets | 39,838,940 | 40,962,258 | -2.7% | | Current Assets | 63,271,098 | 62,624,419 | +1.0% | | Current Liabilities | 60,568,750 | 59,441,065 | +1.9% | | Net Current Assets | 2,702,348 | 3,183,354 | -15.1% | | Total Assets Less Current Liabilities | 42,541,288 | 44,145,612 | -3.7% | | Non-current Liabilities | 20,442,912 | 20,164,409 | +1.4% | | Net Assets | 22,098,376 | 23,981,203 | -7.8% | | Total Equity | 22,098,376 | 23,981,203 | -7.8% | [Basis of Preparation and Going Concern Assumption](index=4&type=section&id=1.%20%E7%B7%A8%E8%A3%BD%E5%9F%BA%E6%BA%96) The condensed consolidated financial statements are prepared under HKAS 34 and Listing Rules on a going concern basis, despite significant liquidity challenges including substantial losses, maturing short-term borrowings, and a winding-up petition, with the Board implementing plans to ensure continued operations - For the six months ended June 30, 2025, the group incurred a net loss of **RMB 2,030 million**[7](index=7&type=chunk) - As of June 30, 2025, **RMB 29,593 million** of the group's borrowings were repayable within one year, with **RMB 29,139 million** becoming immediately repayable due to default or cross-default triggers[7](index=7&type=chunk) - The group's cash and cash equivalents amounted to **RMB 342 million** as of June 30, 2025[7](index=7&type=chunk) - A winding-up petition against the company was filed by a lender with the High Court of Hong Kong on February 4, 2025[7](index=7&type=chunk) - The Board has implemented various plans, including seeking legal advice to oppose the winding-up petition, appointing advisors for offshore debt restructuring, actively negotiating with lenders for renewal or extension of borrowings, utilizing approved credit facilities, accelerating sales of existing development projects, communicating with contractors and suppliers for payments, seeking asset disposals for cash flow (including the sale of a US hotel property for **USD 20 million** cash), and controlling costs[8](index=8&type=chunk)[9](index=9&type=chunk) [Significant Accounting Policies](index=5&type=section&id=2.%20%E4%B8%BB%E8%A6%81%E6%9C%83%E8%A8%88%E6%94%BF%E7%AD%96) The condensed consolidated financial statements are primarily prepared on a historical cost basis, except for investment properties and certain financial instruments measured at fair value, with no significant impact from newly applied HKFRS amendments - The condensed consolidated financial statements are primarily prepared on a historical cost basis, with investment properties and certain financial instruments measured at fair value[12](index=12&type=chunk) - Newly applied HKFRS amendments, including HKAS 21 (Revised) 'Lack of Exchangeability', had no significant impact on the group's financial position and performance during the interim period[13](index=13&type=chunk) [Revenue and Segment Information](index=6&type=section&id=3.%20%E6%94%B6%E7%9B%8A%E5%8F%8A%E5%88%86%E9%A1%9E%E8%B3%87%E6%96%99) The group's revenue primarily derives from property sales, commercial property leasing, and integrated services, with total revenue significantly decreasing by **46.5%** year-on-year due to reduced property sales, across its segments of property development and sales, commercial property investment and operation, and integrated services Revenue Source Analysis | Revenue Source | 2025 (RMB'000) | 2024 (RMB'000) | Change (%) | | :--- | :--- | :--- | :--- | | Property Sales | 527,497 | 1,389,244 | -62.0% | | Hotel Operations, Property Management Services, and Other Services | 200,367 | 210,871 | -5.0% | | Rental Income | 311,827 | 342,708 | -9.0% | | **Total Revenue** | **1,039,691** | **1,942,823** | **-46.5%** | - The group's operating segments include property development and sales, commercial property investment and operation, and integrated services[14](index=14&type=chunk) [Segment Revenue and Results](index=7&type=section&id=%E5%88%86%E9%A1%9E%E6%94%B6%E7%9B%8A%E5%8F%8A%E6%A5%AD%E7%B8%BE) Revenue and profit from property development and sales significantly decreased, while commercial property investment and operation and integrated services also experienced varying degrees of decline in revenue and profit Segment Revenue and Profit for H1 2025 | Segment | Revenue from External Customers (RMB'000) | Reportable Segment Profit (RMB'000) | | :--- | :--- | :--- | | Property Development and Sales | 527,497 | 20,094 | | Commercial Property Investment and Operation | 311,827 | 301,235 | | Integrated Services | 200,367 | 54,967 | | **Total** | **1,039,691** | **376,296** | Segment Revenue and Profit for H1 2024 | Segment | Revenue from External Customers (RMB'000) | Reportable Segment Profit (RMB'000) | | :--- | :--- | :--- | | Property Development and Sales | 1,389,244 | 24,474 | | Commercial Property Investment and Operation | 342,708 | 334,946 | | Integrated Services | 210,871 | 78,312 | | **Total** | **1,942,823** | **437,732** | [Segment Assets](index=8&type=section&id=%E5%88%86%E9%A1%9E%E8%B3%87%E7%94%A2) As of June 30, 2025, the group's total assets were **RMB 103,110.0 million**, with property development and sales assets accounting for the largest portion, followed by commercial property investment and operation assets Segment Assets | Segment | June 30, 2025 (RMB'000) | December 31, 2024 (RMB'000) | | :--- | :--- | :--- | | Property Development and Sales | 62,056,352 | 61,215,269 | | Commercial Property Investment and Operation | 38,066,648 | 39,131,259 | | Integrated Services | 197,079 | 361,943 | | **Total Reportable Segment Assets** | **100,320,079** | **100,708,471** | | **Total Consolidated Assets** | **103,110,038** | **103,586,677** | [Finance Costs](index=9&type=section&id=4.%20%E8%9E%8D%E8%B3%87%E6%88%90%E6%9C%AC) For the six months ended June 30, 2025, the group's finance costs decreased by **18.1%** to **RMB 682.6 million**, primarily due to an increase in capitalized amounts | Item | 2025 (RMB'000) | 2024 (RMB'000) | | :--- | :--- | :--- | | Interest on Bank and Other Borrowings | 1,177,775 | 1,352,462 | | Interest on Convertible Bonds | 10,170 | 11,806 | | Interest on Domestic Corporate Bonds | 42,117 | 41,532 | | Interest on Lease Liabilities | 16,272 | 11,625 | | Interest on Contract Liabilities | 304,914 | 154,712 | | Less: Amount Capitalized to Investment Properties Under Construction and Properties Under Development for Sale | (563,737) | (583,899) | | Capitalization of Interest on Contract Liabilities | (304,914) | (154,712) | | **Total Finance Costs** | **682,597** | **833,526** | - Finance costs were capitalized at annual interest rates ranging from **4.85% to 6.62%** (2024: **4.50% to 7.50%**)[20](index=20&type=chunk) [Loss Before Tax](index=9&type=section&id=5.%20%E9%99%A4%E7%A8%85%E5%89%8D%E虧%E6%90%8D) For the six months ended June 30, 2025, the loss before tax expanded to **RMB 2,175.2 million**, compared to **RMB 1,600.5 million** in the prior period, primarily influenced by costs of properties held for sale, depreciation, rental income, and operating expenses | Item | 2025 (RMB'000) | 2024 (RMB'000) | | :--- | :--- | :--- | | Cost of Properties Held for Sale Recognized as Expense | 507,403 | 1,364,770 | | Depreciation of Property, Plant and Equipment | 30,136 | 30,540 | | Total Rental Income from Investment Properties | (311,827) | (342,708) | | Direct Operating Expenses for Investment Properties Generating Rental Income During the Period | 10,592 | 7,762 | | Short-term Lease Related Expenses | – | 1,927 | [Income Tax (Credit) Expense](index=9&type=section&id=6.%20%E6%89%80%E5%BE%97%E7%A8%85%EF%BC%88%E6%8A%B5%E5%85%8D%EF%BC%89%E9%96%8B%E6%94%AF) For the six months ended June 30, 2025, the group recorded an income tax credit of **RMB 145.4 million**, compared to an expense of **RMB 9.9 million** in the prior period, primarily due to an increase in deferred tax credits | Item | 2025 (RMB'000) | 2024 (RMB'000) | | :--- | :--- | :--- | | China Corporate Income Tax | 1,293 | 117,625 | | Mainland China Land Appreciation Tax | 26,625 | 99,386 | | Deferred Tax | (173,346) | (207,078) | | **Total** | **(145,428)** | **9,933** | [Dividends](index=10&type=section&id=7.%20%E8%82%A1%E6%81%AF) The Board of Directors decided not to declare or pay any dividends for the six months ended June 30, 2025 - No dividends were paid, declared, or proposed during the interim period[23](index=23&type=chunk) [Loss Per Share](index=10&type=section&id=8.%20%E6%AF%8F%E8%82%A1%E虧%E6%90%8D) For the six months ended June 30, 2025, basic and diluted loss per share attributable to owners of the company increased to **RMB 31.25 cents**, up from **RMB 29.98 cents** in the prior period | Indicator | 2025 (RMB'000) | 2024 (RMB'000) | | :--- | :--- | :--- | | Loss Used for Calculating Basic and Diluted Loss Per Share | (1,837,931) | (1,528,224) | | Weighted Average Number of Ordinary Shares for Calculating Basic and Diluted Loss Per Share (thousand shares) | 5,882,214 | 5,097,704 | | **Basic and Diluted Loss Per Share (RMB cents)** | **(31.25)** | **(29.98)** | - Unexercised convertible preference shares and share options were not assumed to be converted or exercised in calculating diluted loss per share, as they would result in a decrease in loss per share or have an exercise price higher than the average market price[24](index=24&type=chunk) [Trade Receivables](index=10&type=section&id=9.%20%E6%87%89%E6%94%B6%E8%B3%AC%E6%AC%BE) As of June 30, 2025, the group's total trade receivables increased to **RMB 87.1 million** from **RMB 68.2 million** at December 31, 2024, primarily from customer contracts and lease receivables | Trade Receivables Source | June 30, 2025 (RMB'000) | December 31, 2024 (RMB'000) | | :--- | :--- | :--- | | Customer Contracts | 52,025 | 38,372 | | Lease Receivables | 40,654 | 35,490 | | Total Trade Receivables | 92,679 | 73,862 | | Less: Provision for Credit Losses | (5,596) | (5,688) | | **Net Trade Receivables** | **87,083** | **68,174** | Aging Analysis of Trade Receivables | Aging | June 30, 2025 (RMB'000) | December 31, 2024 (RMB'000) | | :--- | :--- | :--- | | Within 1 Month | 17,325 | 24,217 | | 1 to 12 Months | 49,665 | 33,501 | | 13 to 24 Months | 20,093 | 10,456 | | **Total** | **87,083** | **68,174** | [Trade Payables](index=11&type=section&id=10.%20%E6%87%89%E4%BB%98%E8%B3%AC%E6%AC%BE) As of June 30, 2025, the group's total trade payables increased to **RMB 4,922.5 million** from **RMB 4,444.3 million** at December 31, 2024 Aging Analysis of Trade Payables | Aging | June 30, 2025 (RMB'000) | December 31, 2024 (RMB'000) | | :--- | :--- | :--- | | Within 1 Month | 997,984 | 1,903,996 | | 1 to 12 Months | 2,585,973 | 1,872,320 | | 13 to 24 Months | 1,139,048 | 530,660 | | Over 24 Months | 199,455 | 137,284 | | **Total** | **4,922,460** | **4,444,260** | [Management Discussion and Analysis](index=12&type=section&id=%E7%AE%A1%E7%90%86%E5%B1%A4%E8%A8%8E%E8%AB%96%E8%88%87%E5%88%86%E6%9E%90) This section provides an in-depth review of the group's operational performance, financial position, and strategic outlook, alongside an analysis of the market environment and key risks [Industry Review](index=12&type=section&id=%E8%A1%8C%E6%A5%AD%E5%9B%9E%E9%A1%A7) In H1 2025, China's economy grew by **5.3%** amidst challenges, with continuous easing of real estate policies, yet the market still faced downward pressure despite strong performance in the Greater Bay Area - In H1 2025, China's GDP grew by **5.3%** year-on-year at constant prices[28](index=28&type=chunk) - The central bank lowered the 5-year-plus LPR to **3.5%** in May, and the 5-year-plus provident fund loan interest rate to **2.6%**, a historical low[29](index=29&type=chunk) - Approximately **170** provinces, cities, and counties introduced over **340** optimization policies, focusing on financial support, urban renewal, home purchase subsidies, and inventory reduction[29](index=29&type=chunk) - Government work reports, Politburo meetings, and State Council executive meetings all emphasized accelerating the construction of a new real estate development model, focusing on 'good housing' and urban renewal[30](index=30&type=chunk)[31](index=31&type=chunk) National Real Estate Market Data for H1 2025 | Indicator | H1 2025 | Year-on-Year Change | | :--- | :--- | :--- | | Real Estate Development Investment | 4,665.8 billion RMB | -11.2% | | Residential Investment | 3,577.0 billion RMB | -10.4% | | New Commercial Housing Sales Area | 458.51 million square meters | -3.5% | | New Commercial Housing Sales Value | 4,424.1 billion RMB | -5.5% | - The total import and export value of the 9 mainland cities in the Guangdong-Hong Kong-Macao Greater Bay Area reached **RMB 4.38 trillion**, a **4.3%** year-on-year increase, accounting for **20.1%** of the national total[33](index=33&type=chunk) [Corporate Strategy and Project Progress](index=13&type=section&id=%E5%85%AC%E5%8F%B8%E7%B6%93%E7%87%9F%E7%AD%96%E7%95%A5%E8%88%87%E9%A0%85%E7%9B%AE%E9%80%B2%E5%B1%95) Facing industry challenges, LVGEM China maintains a strategy of streamlining operations, focusing on quality project development, enhancing asset management, and specializing in urban renewal, with the core Baishizhou project progressing well towards its January 2026 delivery target - Leveraging over **40 years** of experience, the group focuses on urban renewal, developing a 'Mega-City Model' and achieving strong sales for the Baishizhou project[34](index=34&type=chunk) - The group's 2025 development strategy includes streamlining operations to focus on **five** quality projects, enhancing asset management and profitability, and specializing in urban renewal[41](index=41&type=chunk) - Phase I of the Baishizhou project has nearly **70%** completion for curtain wall construction and **60%** for interior decoration, on track for promised delivery in **January 2026**, with Phase II planned for full commencement in **2026**[45](index=45&type=chunk) - The group completed the sale of a hotel property in California, USA, for a cash consideration of **USD 20 million** (approximately **RMB 144 million**), to reduce outstanding debt[9](index=9&type=chunk)[47](index=47&type=chunk) [Property Development and Sales](index=17&type=section&id=%E6%88%BF%E5%9C%B0%E7%94%A2%E9%96%8B%E7%99%BC%E8%88%87%E9%8A%B7%E5%94%AE) Property development and sales remain the group's core business, but revenue decreased by **62.0%** year-on-year, and contracted sales by **80.3%**, primarily from the Baishizhou Phase I, Zhuhai Xiyue Bay, and LVGEM International Garden projects | Indicator | H1 2025 | H1 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Property Development and Sales Revenue | RMB 527.5 million | RMB 1,389.2 million | -62.0% | | Contracted Sales Amount from Property Subscription Agreements | RMB 1,057.6 million | RMB 5,389.7 million | -80.3% | - Property sales primarily originated from Xiyue Bay and LVGEM Hongshuwan No. 1, with a total GFA of approximately **18,600 square meters** recognized for properties held for sale (2024: approximately **28,500 square meters**)[62](index=62&type=chunk) [Commercial Property Investment and Operation](index=17&type=section&id=%E5%95%86%E6%A5%AD%E7%89%A9%E6%A5%AD%E6%8A%95%E8%B3%87%E8%88%87%E7%B6%93%E7%87%9F) The group continues to deepen its 'Zuo Lin' and 'NEO' dual-brand strategy, with commercial property investment and operation revenue decreasing by **9.0%** year-on-year, yet core project occupancy rates remain high, demonstrating stable asset operational capability | Indicator | H1 2025 | H1 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Commercial Property Investment and Operation Revenue | RMB 311.8 million | RMB 342.7 million | -9.0% | | Investment Property Occupancy Rate | 72% | 78% | -6 percentage points | | LVGEM NEO Tower Hong Kong Occupancy Rate | 68% | 73% | -5 percentage points | - The group holds over **30** commercial property projects with a total GFA exceeding **1.6 million square meters**[53](index=53&type=chunk) [Integrated Services](index=17&type=section&id=%E7%B6%9C%E5%90%88%E6%9C%8D%E5%8B%99) Integrated services, including property management, hotel operations, and others, saw a slight **5.0%** year-on-year revenue decrease, but strengthened operational resilience through enhanced professional standards and diversified development | Indicator | H1 2025 | H1 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Integrated Services Revenue | RMB 200.4 million | RMB 210.9 million | -5.0% | - The average occupancy rate of LVGEM Jinjiang Hotel in Shenzhen Futian Central Business District exceeded **68%**[54](index=54&type=chunk) [Financial Performance Overview](index=14&type=section&id=%E8%B2%A1%E5%8B%99%E8%A1%A8%E7%8F%BE%E7%B8%BD%E8%A6%BD) In H1 2025, the group's total revenue decreased by **46.5%**, gross profit by **14.0%**, but gross margin improved to **36%**, while losses for the period and attributable to owners expanded, basic loss per share increased, and the debt-to-asset ratio rose amidst reduced cash balances Key Financial Indicators for H1 2025 | Indicator | H1 2025 (RMB million) | H1 2024 (RMB million) | Change | | :--- | :--- | :--- | :--- | | Revenue | 1,039.7 | 1,942.8 | -46.5% | | Gross Profit | 376.3 | 437.7 | -14.0% | | Loss Attributable to Owners of the Company | (1,837.9) | (1,528.2) | +20.3% | | Basic Loss Per Share (RMB cents) | (31.25) | (29.98) | +4.2% | | Gross Margin (%) | 36 | 23 | +13 percentage points | | Bank Balances and Cash (including restricted and pledged bank deposits) | 1,961.7 | 3,303.8 (Dec 31, 2024) | -40.6% | | Average Finance Cost (%) | 7.9 | 8.0 | -0.1 percentage points | | Debt-to-Asset Ratio (%) | 78.6 | 76.9 (Dec 31, 2024) | +1.7 percentage points | | Return on Capital (%) | (11.24) | (28.67) | N/A | - The Board does not recommend the payment of any dividend for the six months ended June 30, 2025[40](index=40&type=chunk) [Future Outlook and Response Strategies](index=17&type=section&id=%E6%9C%AA%E4%BE%86%E5%B1%95%E6%9C%9B) Looking ahead, China's real estate market is expected to stabilize with policy support, but differentiation will persist, with urban renewal as a key focus for LVGEM China to drive quality project delivery, debt restructuring, and sales acceleration, leveraging its prime asset portfolio and urban renewal expertise despite liquidity challenges - The real estate market in H2 is expected to find a new balance amidst differentiation, with high-quality projects potentially stabilizing new home markets in core cities, though comprehensive market stabilization requires further policy efforts[55](index=55&type=chunk) - Urban renewal has become a core driver for high-quality development, with increasing policy support from central and regulatory authorities, including the issuance of guiding documents like the 'Opinions on Continuously Advancing Urban Renewal Actions'[56](index=56&type=chunk) - Urban renewal in the Guangdong-Hong Kong-Macao Greater Bay Area is entering a golden period characterized by multi-stakeholder participation, multi-element integration, and multi-mode convergence[57](index=57&type=chunk) - The group will focus on three main operational pillars: **first**, prioritizing the delivery of quality projects (especially the Baishizhou project); **second**, advancing offshore debt restructuring and optimizing financing structure; and **third**, accelerating sales to enhance cash collection efficiency[58](index=58&type=chunk)[59](index=59&type=chunk) - As of June 30, 2025, the group held a land bank of approximately **6.3 million square meters**, with nearly **80%** located in core areas of core cities within the Guangdong-Hong Kong-Macao Greater Bay Area[50](index=50&type=chunk) [Financial Position and Risk Management](index=19&type=section&id=%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81%E8%88%87%E9%A2%A8%E9%9A%AA%E7%AE%A1%E7%90%86) This section details the group's financial performance, liquidity, and capital structure, along with an overview of asset pledges, significant transactions, contingent liabilities, and foreign exchange risk management [Detailed Financial Review](index=19&type=section&id=%E8%B2%A1%E5%8B%99%E5%9B%9E%E9%A1%A7%E8%A9%B3%E6%83%85) This section provides a detailed review of the group's financial indicators for the six months ended June 30, 2025, including revenue, gross profit, expenses, fair value changes, finance costs, income tax, and operating results, alongside an analysis of liquidity, financial resources, and capital gearing ratio changes [Revenue Analysis](index=19&type=section&id=%E6%94%B6%E7%9B%8A%E5%88%86%E6%9E%90) The group's total revenue decreased by **46.5%** year-on-year, primarily due to a **62.0%** reduction in property development and sales revenue, with slight declines also observed in commercial property investment and operation and integrated services revenue | Revenue Source | 2025 (RMB'000) | 2024 (RMB'000) | Change (%) | | :--- | :--- | :--- | :--- | | Property Development and Sales | 527,497 | 1,389,244 | -62.0% | | Commercial Property Investment and Operation | 311,827 | 342,708 | -9.0% | | Integrated Services | 200,367 | 210,871 | -5.0% | | **Total** | **1,039,691** | **1,942,823** | **-46.5%** | - Property sales primarily originated from Xiyue Bay and LVGEM Hongshuwan No. 1, with a total GFA of approximately **18,600 square meters** recognized for properties held for sale (2024: approximately **28,500 square meters**)[62](index=62&type=chunk) - The occupancy rate of investment properties was approximately **72%** (2024: **78%**), and LVGEM NEO Tower in Hong Kong had an occupancy rate of approximately **68%** (2024: **73%**)[63](index=63&type=chunk) [Gross Profit and Gross Margin](index=20&type=section&id=%E6%AF%9B%E5%88%A9%E5%8F%8A%E6%AF%9B%E5%88%A9%E7%8E%87) The group's consolidated gross profit decreased by **14.0%** year-on-year, but the gross margin improved from **23%** to **36%**, primarily due to the revenue recognition mix from different projects | Indicator | 2025 (RMB'000) | 2024 (RMB'000) | Change (%) | | :--- | :--- | :--- | :--- | | Consolidated Gross Profit | 376,300 | 437,700 | -14.0% | | Consolidated Gross Margin | 36% | 23% | +13 percentage points | [Selling Expenses](index=20&type=section&id=%E9%8A%B7%E5%94%AE%E9%96%8B%E6%94%AF) Selling expenses decreased by **16.1%** year-on-year, primarily due to reduced revenue from properties held for sale | Indicator | 2025 (RMB'000) | 2024 (RMB'000) | Change (%) | | :--- | :--- | :--- | :--- | | Selling Expenses | 50,100 | 59,700 | -16.1% | [Administrative Expenses](index=20&type=section&id=%E8%A1%8C%E6%94%BF%E9%96%8B%E6%94%AF) Administrative expenses decreased by **7.6%** year-on-year | Indicator | 2025 (RMB'000) | 2024 (RMB'000) | Change (%) | | :--- | :--- | :--- | :--- | | Administrative Expenses | 190,900 | 206,700 | -7.6% | [Fair Value Change of Investment Properties](index=20&type=section&id=%E6%8A%95%E8%B3%87%E7%89%A9%E6%A5%AD%E7%9A%84%E5%85%AC%E5%85%81%E5%83%B9%E5%80%BC%E8%AE%8A%E5%8B%95) Investment properties recorded a negative fair value change of approximately **RMB 1,070.1 million**, an expansion compared to the negative change in the prior period | Indicator | 2025 (RMB'000) | 2024 (RMB'000) | Change (%) | | :--- | :--- | :--- | :--- | | Negative Fair Value Change of Investment Properties | (1,070,100) | (951,700) | +12.4% | [Finance Costs](index=20&type=section&id=%E8%9E%8D%E8%B3%87%E6%88%90%E6%9C%AC) Finance costs decreased by **18.1%** year-on-year, with the average finance cost remaining stable at **7.9%** | Indicator | 2025 (RMB'000) | 2024 (RMB'000) | Change (%) | | :--- | :--- | :--- | :--- | | Finance Costs | 682,600 | 833,500 | -18.1% | | Average Finance Cost of Interest-bearing Borrowings | 7.9% | 7.9% | 0.0 percentage points | [Income Tax Credit (Expense)](index=20&type=section&id=%E6%89%80%E5%BE%97%E7%A8%85%E6%8A%B5%E5%85%8D%EF%BC%88%E9%96%8B%E6%94%AF%EF%BC%89) The group recorded an income tax credit of **RMB 145.4 million**, compared to an expense of **RMB 9.9 million** in the prior period, primarily due to deferred tax provisions | Item | 2025 (RMB'000) | 2024 (RMB'000) | | :--- | :--- | :--- | | Income Tax Credit (Expense) | 145,400 | (9,900) | | Corporate Income Tax | 1,300 | 117,600 | | Land Appreciation Tax | 26,600 | 99,400 | | Deferred Tax | (173,300) | (207,100) | [Operating Results](index=20&type=section&id=%E7%B6%93%E7%87%9F%E6%A5%AD%E7%B8%BE) Loss attributable to owners of the company increased by **20.3%** year-on-year to **RMB 1,837.9 million** | Indicator | 2025 (RMB'000) | 2024 (RMB'000) | Change (%) | | :--- | :--- | :--- | :--- | | Loss Attributable to Owners of the Company | (1,837,900) | (1,528,200) | +20.3% | [Liquidity, Financial Resources, and Capital Gearing Ratio](index=20&type=section&id=%E6%B5%81%E5%8B%95%E8%B3%87%E9%87%91%E3%80%81%E8%B2%A1%E5%8B%99%E8%B3%87%E6%BA%90%E5%8F%8A%E8%B3%87%E6%9C%AC%E8%B2%A0%E5%82%B5%E6%AF%94%E7%8E%87) Bank balances and cash decreased, total borrowings slightly declined, but the capital gearing ratio rose to **136.8%**, indicating increased financial leverage | Indicator | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Bank Balances and Cash | 1,961.7 | 3,303.8 | -40.6% | | Total Borrowings | 32,185.5 | 33,578.7 | -4.1% | | Borrowings Classified as Current Liabilities | 29,592.5 | 30,905.3 | -4.2% | | Capital Gearing Ratio | 136.8% | 126.2% | +10.6 percentage points | Borrowings by Denominated Currency | Currency | June 30, 2025 (RMB'000) | December 31, 2024 (RMB'000) | | :--- | :--- | :--- | | RMB | 22,007,418 | 23,289,842 | | HKD | 6,404,804 | 6,502,835 | | USD | 3,773,284 | 3,785,999 | Borrowings by Fixed or Floating Interest Rates | Interest Rate Type | June 30, 2025 (RMB'000) | December 31, 2024 (RMB'000) | | :--- | :--- | :--- | | Fixed Rate | 7,216,551 | 7,966,080 | | Floating Rate | 24,968,955 | 25,612,596 | [Current Assets, Total Assets, and Net Assets](index=21&type=section&id=%E6%B5%81%E5%8B%95%E8%B3%87%E7%94%A2%E3%80%81%E7%B8%BD%E8%B3%87%E7%94%A2%E5%8F%8A%E8%B3%87%E7%94%A2%E6%B7%A8%E5%80%BC) Net current assets decreased by **15.1%**, total assets slightly declined, and total liabilities increased, resulting in a **7.8%** reduction in net assets and a rise in the debt-to-asset ratio to **78.6%** | Indicator | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Current Assets | 63,271.1 | 62,624.4 | +1.0% | | Current Liabilities | 60,568.8 | 59,441.1 | +1.9% | | Net Current Assets | 2,702.3 | 3,183.4 | -15.1% | | Total Assets | 103,110.0 | 103,586.7 | -0.5% | | Total Liabilities | 81,011.7 | 79,605.5 | +1.8% | | Debt-to-Asset Ratio | 78.6% | 76.9% | +1.7 percentage points | | Net Assets | 22,098.4 | 23,981.2 | -7.8% | [Pledge of Assets](index=22&type=section&id=%E8%B3%87%E7%94%A2%E6%8A%B5%E6%8A%BC) As of June 30, 2025, approximately **RMB 29,634.2 million** in loans were secured by the group's properties under development for sale, properties held for sale, investment properties, property, plant and equipment, equity instruments at fair value through other comprehensive income, pledged bank deposits, and equity interests in subsidiaries - As of June 30, 2025, approximately **RMB 29,634.2 million** of loans were secured by group assets totaling approximately **RMB 22,601.0 million** and equity interests in subsidiaries[77](index=77&type=chunk) [Significant Acquisitions and Disposals](index=22&type=section&id=%E9%87%8D%E5%A4%A7%E6%94%B6%E8%B3%BC%E5%8F%8A%E5%87%BA%E5%94%AE%E4%BA%8B%E9%A0%85) The group completed the disposal of a hotel property in California, USA, for **USD 20 million** in January 2025, with no other significant acquisitions or disposals during the period - LVGEM Hotel Corporation disposed of its entire interest in certain hotel assets in Los Angeles on January 16, 2025, for a consideration of **USD 20 million**[78](index=78&type=chunk) [Contingent Liabilities](index=22&type=section&id=%E6%88%96%E7%84%B6%E8%B2%A0%E5%82%B5) As of June 30, 2025, the group had financial guarantee contracts of approximately **RMB 6,894.0 million** for certain buyers' mortgage financing, with directors deeming the likelihood of loss from these guarantees to be low | Indicator | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | | :--- | :--- | :--- | | Financial Guarantee Contracts for Buyers' Mortgage Financing | 6,894.0 | 7,007.4 | - The guarantee period extends from the mortgage loan grant date until the buyer obtains individual property ownership certificates or fully repays the mortgage loan, whichever is earlier[79](index=79&type=chunk) - The directors believe it is unlikely for the group to incur losses from these mortgage guarantees during the guarantee period, as the fair market value of the related properties is sufficient to cover outstanding mortgage loans[80](index=80&type=chunk) [Foreign Exchange Fluctuation Risk and Hedging](index=22&type=section&id=%E5%8C%AF%E7%8E%87%E6%B3%A2%E5%8B%95%E9%A2%A8%E9%9A%AA%E5%8F%8A%E6%9C%89%E9%97%9C%E5%B0%8D%E6%B2%96) The group's primary operations are in mainland China, with most transactions denominated in RMB, but it faces foreign exchange risk from HKD and USD cash balances and loans, currently without a foreign currency hedging policy - The group is exposed to foreign exchange risk from HKD and USD against RMB but does not have a foreign currency hedging policy[81](index=81&type=chunk) [Treasury Policy and Capital Structure](index=22&type=section&id=%E8%B2%A1%E8%B3%87%E6%94%BF%E7%AD%96%E5%8F%8A%E8%B3%87%E6%9C%AC%E7%B5%90%E6%A7%8B) The group maintains a prudent approach to its treasury and capital policies, focusing on risk management and transactions directly related to its business operations - The group adopts a prudent approach to its treasury and capital policies, focusing on risk management[82](index=82&type=chunk) [Corporate Governance and Other Information](index=23&type=section&id=%E5%85%AC%E5%8F%B8%E6%B2%BB%E7%90%86%E8%88%87%E5%85%B6%E4%BB%96%E4%BF%A1%E6%81%AF) This section covers the group's employee information, compliance with corporate governance codes, review of interim financial information, and post-reporting period events [Employees](index=23&type=section&id=%E5%83%B1%E5%93%A1) As of June 30, 2025, the group employed **2,067** staff, with remuneration aligned to market trends and comprehensive training and development programs provided | Indicator | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Total Number of Employees | 2,067 | 2,073 | | Employees in Mainland China | 2,035 | 2,042 | | Employees in Hong Kong | 32 | 31 | [Compliance with Corporate Governance Code](index=23&type=section&id=%E9%81%B5%E5%AE%88%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB%E5%B8%B8%E8%A6%8F%E5%AE%88%E5%89%87) The company is committed to good corporate governance, with Ms. Huang Jingshu serving as both Chairman and CEO, a deviation from Listing Rule C.2.1, and temporary non-compliance with other rules due to independent non-executive director resignations was rectified on May 13, 2025 - Ms. Huang Jingshu serves concurrently as Chairman and Chief Executive Officer, deviating from Code Provision C.2.1 of the Corporate Governance Code set out in Appendix C1 of the Listing Rules[84](index=84&type=chunk) - Due to the resignations of Ms. Hu Jingying and Mr. Mo Fan, the company was temporarily non-compliant with Listing Rule 3.10(1) (at least three independent non-executive directors), Rule 3.21 (at least three members on the audit committee), and Rule 3.25 (chairman and majority of remuneration committee members must be independent non-executive directors)[86](index=86&type=chunk) - The company regained compliance with the aforementioned Listing Rules following the appointment of Ms. Wang Tingdan to fill the vacancies on May 13, 2025[86](index=86&type=chunk) [Compliance with Standard Securities Dealing Code](index=23&type=section&id=%E9%81%B5%E5%AE%88%E9%80%B2%E8%A1%8C%E8%AD%89%E5%88%B8%E4%BA%A4%E6%98%93%E4%B9%8B%E6%A8%99%E6%BA%96%E5%AE%88%E5%89%87) The company has adopted the Model Code set out in Appendix C3 of the Listing Rules, and directors confirmed continuous compliance throughout the period - The directors confirmed continuous compliance with the Model Code set out in Appendix C3 of the Listing Rules for the six months ended June 30, 2025[88](index=88&type=chunk) [Review of Interim Financial Information](index=23&type=section&id=%E5%AF%A9%E9%96%B1%E4%B8%AD%E6%9C%9F%E8%B2%A1%E5%8B%99%E8%B3%87%E6%96%99) The group's interim results have been reviewed by the Board's Audit Committee, which deemed their preparation compliant with applicable accounting standards and requirements - The group's interim results have been reviewed by the Board's Audit Committee, which deemed their preparation compliant with applicable accounting standards and requirements[89](index=89&type=chunk) [Repurchase, Sale, or Redemption of Listed Securities](index=24&type=section&id=%E8%B3%BC%E5%9B%9E%E3%80%81%E5%87%BA%E5%94%AE%E6%88%96%E8%B4%96%E5%9B%9E%E6%9C%AC%E5%85%AC%E5%8F%B8%E4%B8%8A%E5%B8%82%E8%AD%89%E5%88%B8) For the six months ended June 30, 2025, neither the company nor its subsidiaries repurchased, sold, or redeemed any of the company's listed securities, and the company held no treasury shares - For the six months ended June 30, 2025, neither the company nor any of its subsidiaries repurchased, sold, or redeemed any of the company's listed securities[90](index=90&type=chunk) [Events After Reporting Period](index=24&type=section&id=%E5%A0%B1%E5%91%8A%E6%9C%9F%E5%BE%8C%E7%9A%84%E4%BA%8B%E9%A0%85) Subsequent to the reporting period, the winding-up petition hearing filed on February 4, 2025, has been adjourned to November 3, 2025, with the group actively negotiating financing extensions and signing restructuring support agreements with some creditors - The winding-up petition hearing filed by a lender on February 4, 2025, has been further adjourned to November 3, 2025[93](index=93&type=chunk) - The group has received positive responses from several banks regarding the extension of bank financing maturity dates[93](index=93&type=chunk) - The company has entered into a support agreement with one creditor to advance its restructuring efforts, with more creditors actively considering signing similar agreements[93](index=93&type=chunk) [Publication of Interim Results Announcement and Interim Report](index=24&type=section&id=%E5%88%8A%E7%99%BC%E4%B8%AD%E6%9C%9F%E6%A5%AD%E7%B8%BE%E5%85%AC%E5%91%8A%E5%8F%8A%E4%B8%AD%E6%9C%9F%E5%A0%B1%E5%91%8A) This results announcement has been published on the company's and HKEX websites, with the interim report to be dispatched to shareholders in due course - The content of this results announcement is available on the company's website (www.lvgem-china.com) and the HKEX website (www.hkex.com.hk)[92](index=92&type=chunk) [General Information](index=24&type=section&id=%E4%B8%80%E8%88%AC%E8%B3%87%E6%96%99) As of the announcement date, the Board of Directors comprises four executive directors and three independent non-executive directors, with Ms. Huang Jingshu serving as Chairman and CEO - The Board of Directors includes executive directors Ms. Huang Jingshu (Chairman and Chief Executive Officer), Mr. Ye Xing'an, Mr. Huang Haoyuan, and Ms. Li Yufei; and independent non-executive directors Mr. Chan Koon Fat, Ms. Jiao Jie, and Ms. Wang Tingdan[93](index=93&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佈的內容概不 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 佈 全部或任何部份內容而產生或因倚賴該等內容而引致的任何損失承擔任何責 任。 SILVER GRANT INTERNATIONAL HOLDINGS GROUP LIMITED 銀建國際控股集團有限公司 (於香港註冊成立之有限公司) （股份代號：171） 2025中期業績公佈 銀 建 國 際 控 股 集 團 有 限 公 司（「本 公 司」）董 事（「董 事」）會（「董 事 會」）宣 佈 本 公 司 及 其 附 屬 公 司（統 稱 為「本 集 團」）截 至2025年6月30日 止 六 個 月（「2025年 期 間」）之 未 經 審 核 綜 合 中 期 業 績 如 下： – 1 – 簡明綜合損益表 截 至2025年6月30日止六個月 | （未 | 經 | 審 | 核） | （未 | 經 | 審 | 核） | 截 | 至6月30日止六個月 | | | | | | | | | | | | | | | | | | | | | | -- ...

香港交易及結算所有限公司及香港聯合交易所有限公司對本公佈的內容概不負 責，對 其 準 確 性 或 完 整 性 亦 不 發 表 任 何 聲 明，且 明 確 表 示 概 不 就 因 本 公 佈 全 部 或任何部分內容而產生或因依賴該等內容而引致的任何損失承擔任何責任。 IDT INTERNATIONAL LIMITED 萬威國際有限公司 * （於百慕達註冊成立之有限公司） （股份代號：167） – 1 – • 收益約為港幣47.4百 萬 元（二 零 二 四 年 上 半 年：約 港 幣51.1百 萬 元）。 • 毛利約為港幣5.9百 萬 元（二 零 二 四 年 上 半 年：約 港 幣17.4百 萬 元）。 • 總營運開支約為港幣7.9百 萬 元（二 零 二 四 年 上 半 年：約 港 幣6.4百 萬 元）。 • 期內溢利約為港幣62.6百萬元（二零二四年上半年：溢利約港幣5.6百萬元）。 • 董 事 會 不 建 議 就 二 零 二 五 年 上 半 年 派 付 股 息（二 零 二 四 年 上 半 年：無）。 萬 威 國 際 有 限 公 司（「本公司」）董 事 會（「董事會」）謹 此 公 佈 本 公 司 及 其 附 屬 ...

Financial Performance - Total revenue for the six months ended June 30, 2025, was HKD 187,261,000, representing a 34.7% increase from HKD 138,942,000 for the same period in 2024[3] - Commission and fee income increased to HKD 65,561,000, up 60.5% from HKD 40,859,000 year-over-year[3] - Net investment income turned positive at HKD 27,471,000 compared to a loss of HKD 1,799,000 in the previous year[3] - The company reported a net profit attributable to equity holders of HKD 2,523,000, down 77.4% from HKD 11,162,000 in the prior year[4] - Basic and diluted earnings per share decreased to HKD 0.04 from HKD 0.18 year-over-year[4] - Total reported segment revenue for the six months ended June 30, 2025, was HKD 189,389,000, an increase from HKD 143,808,000 for the same period in 2024, representing a growth of approximately 31.7%[9] - The total segment profit for the six months ended June 30, 2025, was HKD 4,865,000, compared to a loss of HKD 7,451,000 in the same period of 2024, marking a turnaround[10] - The group recorded a pre-tax profit of HKD 2 million for the six months ended June 30, 2025, down from HKD 12 million in the same period of 2024, primarily due to a significant decrease in expected credit loss reversals from HKD 45 million to HKD 9 million[39] - Total revenue increased to HKD 187 million in the first half of 2025, up from HKD 139 million in the same period of 2024, representing a growth of HKD 48 million or 35%[39] Assets and Liabilities - Total assets as of June 30, 2025, amounted to HKD 4,145,913,000, a slight decrease from HKD 4,189,276,000 at the end of 2024[6] - Cash and cash equivalents increased to HKD 244,727,000 from HKD 156,675,000 at the end of 2024, reflecting a 56.1% growth[6] - Total liabilities increased to HKD 2,147,013,000 from HKD 2,195,917,000 at the end of 2024, indicating a reduction in overall liabilities[6] - The net amount of credit loans as of June 30, 2025, was HKD 368,888,000, an increase from HKD 320,459,000 as of December 31, 2024, reflecting a growth of about 15.1%[26] - The total expected credit loss provision for credit loans was HKD 4,450,542,000 as of June 30, 2025, compared to HKD 4,262,809,000 as of December 31, 2024, indicating an increase of about 4.4%[26] - The group's net assets were HKD 1.999 billion as of June 30, 2025, slightly up from HKD 1.993 billion on December 31, 2024[67] - Total borrowings decreased by 28% to HKD 483 million as of June 30, 2025, down from HKD 668 million on December 31, 2024[66] Revenue Streams - The brokerage segment generated revenue of HKD 108,525,000 in the first half of 2025, compared to HKD 105,339,000 in the same period of 2024, indicating a slight increase of 2.1%[13] - The company reported a significant increase in asset management fees, which rose to HKD 13,257,000 in the first half of 2025 from HKD 2,702,000 in 2024, reflecting a growth of 390.5%[13] - Core operating business revenue rose to HKD 127 million, a 13% increase from HKD 112 million in the first half of 2024, driven by brokerage and successful implementation of external asset management[39] - The asset management business revenue surged 333% from HKD 3 million in 2024 to HKD 13 million in 2025, reflecting significant growth in assets under management[44] - Brokerage business revenue increased by 50% to HKD 45 million, up from HKD 30 million, primarily due to a surge in trading activity in the Hong Kong securities market[45] Expenses and Costs - Employee costs decreased from HKD 81,030,000 in 2024 to HKD 74,160,000 in 2025, a reduction of about 8.5%[15] - The total operating expenses for the six months ended June 30, 2025, were HKD 19,244,000, down from HKD 27,236,000 in 2024, indicating a decline of approximately 29.3%[15] - Direct costs rose by 23% to HKD 43 million, up from HKD 35 million, mainly due to increased commission expenses and trading costs associated with higher total commission income[52] - Other operating expenses saw a significant reduction of 30% to HKD 19 million from HKD 27 million[52] Credit and Risk Management - The company recorded a net expected credit loss reversal of HKD 9,362,000 compared to a reversal of HKD 45,453,000 in the previous year[4] - The aging analysis of credit loans as of June 30, 2025, shows a net amount of HKD 368.88 million, with HKD 310.81 million overdue by more than 90 days[64] - The group has adopted a credit risk policy to manage its lending business, ensuring compliance with applicable laws and regulations[59] - The group has maintained a prudent credit risk management approach, with no significant expected credit loss reversals or expenses exceeding 1% of total assets as of June 30, 2025[53] Market and Economic Conditions - The Hang Seng Index increased by approximately 20% in the first half of 2025, with an average daily trading volume of HKD 240.2 billion, a year-on-year increase of 120%[37] - A total of 44 companies went public in Hong Kong in the first half of 2025, raising HKD 107.1 billion, a sevenfold increase compared to the same period in 2024[38] - The company reported that the S&P 500 index rose by 5.5% and the Nasdaq index by 5.48% in the first half of 2025[36] - The company noted a significant increase in gold prices, which rose over 25% due to heightened demand for safe-haven assets[36] Corporate Governance and Compliance - The company has adopted a corporate governance code in accordance with the listing rules, although it deviates from the code by having the same individual serve as both Chairman and CEO[81] - The company has implemented a standard code of conduct for securities trading, which has been updated to align with the latest listing rules and now includes specific employees who may possess sensitive information[82] - The audit committee, composed of three independent non-executive directors, has reviewed the unaudited interim results for the six months ending June 30, 2025[83] - The unaudited interim results announcement for the six months ending June 30, 2025, has been published on the HKEX news website and the company's website[84]

Financial Performance - Revenue for the six months ended June 30, 2025, was RMB 303,197,000, a decrease of 1.70% compared to RMB 308,433,000 for the same period in 2024[6] - Gross profit increased by 21.94% to RMB 210,161,000 from RMB 172,344,000 year-on-year[6] - Profit for the period rose slightly by 1.11% to RMB 19,034,000 compared to RMB 18,825,000 in the previous year[6] - Revenue from SaaS value-added services increased significantly to RMB 197,750,000 from RMB 153,335,000 year-on-year[14] - The company's profit attributable to owners for the six months ended June 30, 2025, was RMB 19,121,000, compared to RMB 18,896,000 for the same period in 2024, reflecting a growth of 1.2%[24] - The net profit for the period was approximately RMB 19.03 million, a slight increase of about 1.1% from RMB 18.82 million in 2024[43] Income and Expenses - The company reported other income of RMB 9,048,000, up from RMB 4,020,000 in the prior period[7] - Total other income for the six months ended June 30, 2025, was RMB 9,048,000, an increase of 125.4% compared to RMB 4,020,000 for the same period in 2024[17] - The total employee costs for the six months ended June 30, 2025, were RMB 25,207,000, up from RMB 24,021,000 in the same period of 2024, indicating a rise of 4.9%[22] - Distribution and selling expenses rose by approximately 40.4% to RMB 174.6 million, driven by the expansion of software and value-added services sales[37] - Administrative expenses decreased by approximately 25.8% to RMB 14.6 million compared to RMB 19.7 million in 2024[38] - Research and development expenses were RMB 9,219,000, a decrease from RMB 9,752,000 year-on-year[7] - Research and development expenses decreased by approximately 5.5% to RMB 9.2 million, compared to RMB 9.8 million in the previous year[39] Assets and Liabilities - Total assets as of June 30, 2025, were RMB 676,843,000, down from RMB 699,004,000 at the end of 2024[10] - Current liabilities decreased to RMB 230,501,000 from RMB 226,836,000 year-on-year[10] - The company’s net assets increased to RMB 678,348,000 from RMB 659,222,000 in the previous year[10] - Trade payables as of June 30, 2025, totaled RMB 86,179,000, a decrease from RMB 122,210,000 as of December 31, 2024[26] - Trade and other receivables and prepayments increased by approximately 18.9% to RMB 251.65 million as of June 30, 2025, from RMB 211.73 million as of December 31, 2024, due to business expansion and growth[46] - Trade and other payables decreased by approximately 29.5% to RMB 86.18 million as of June 30, 2025, from RMB 122.2 million as of December 31, 2024, primarily due to a reduction in amounts payable to suppliers[47] Shareholder Information - The company’s basic earnings per share for the period were RMB 0.05, compared to RMB 0.31 in the previous year[8] - The company's weighted average number of ordinary shares for calculating basic earnings per share was 366,600,000 for the six months ended June 30, 2025, compared to 60,600,000 for the same period in 2024[24] - The company did not declare any dividends during the reporting period[23] - No interim dividend was recommended by the board for the reporting period[65] Corporate Governance and Compliance - The company has complied with all applicable corporate governance codes during the reporting period[59] - The company maintained sufficient public float as required by the Listing Rules, with at least 25% of the issued share capital held by the public throughout the reporting period[63] - An audit committee has been established, consisting of three independent non-executive directors, to review the unaudited interim financial information[67] - The interim results announcement is available on the company's website and the Hong Kong Stock Exchange website, complying with all regulatory requirements[68] Future Plans and Developments - The company plans to expand its customer base among leading new energy vehicle manufacturers and explore new business scenarios in used car trading and digital financial services[31] - The company has no future significant investments or new capital asset plans as of the announcement date[58] - The company had no significant investments, acquisitions, or disposals of subsidiaries, associates, or joint ventures during the reporting period[48] Employee Information - The company has 248 full-time employees as of June 30, 2025, primarily located in Shenzhen and Huizhou, Guangdong Province[54]

[Financial Summary](index=1&type=section&id=Financial%20Summary) The company experienced a **70% revenue decline** and a significant increase in net loss in the first half of 2025, alongside a 6% reduction in total borrowings Financial Highlights | Indicator | H1 2025 (RMB million) | H1 2024 (RMB million) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 1,631 | 5,367 | -70% | | Net Loss | 666 | 154 | +332% | | Sales & Marketing and G&A Expenses (Total) | 131 | 159.7 (89+70.62) | -18% | | Bank & Other Borrowings (Period-end) | 4,290 | 4,552 (Dec 31, 2024) | -6% (vs. end of 2024) | [Interim Condensed Consolidated Financial Statements](index=2&type=section&id=Interim%20Condensed%20Consolidated%20Financial%20Statements) [Interim Condensed Consolidated Statement of Comprehensive Income](index=2&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) For H1 2025, revenue declined **70% to RMB 1,631 million**, resulting in a **RMB 450 million gross loss** and an expanded net loss of **RMB 666 million** Interim Condensed Consolidated Statement of Comprehensive Income | Indicator | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Revenue | 1,631,319 | 5,367,139 | | Cost of Sales | (2,081,321) | (5,076,777) | | Gross (Loss) / Profit | (450,002) | 290,362 | | Operating (Loss) / Profit | (573,677) | 130,032 | | Net Finance Costs | (29,358) | (40,709) | | (Loss) / Profit Before Income Tax | (609,403) | 81,772 | | Income Tax Expense | (56,670) | (235,714) | | Loss and Total Comprehensive Loss for the Period | (666,073) | (153,942) | | Loss Attributable to Owners of the Company | (329,717) | (76,419) | | Basic and Diluted Loss Per Share (RMB) | (0.20) | (0.05) | [Interim Condensed Consolidated Statement of Financial Position](index=3&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, total assets and liabilities decreased, with a shift from non-current to current borrowings and a decline in total equity Interim Condensed Consolidated Statement of Financial Position | Indicator | June 30, 2025 (RMB thousand) | Dec 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | **Assets** | | | | Total Non-current Assets | 1,664,240 | 1,690,070 | | Total Current Assets | 18,999,943 | 21,623,914 | | **Total Assets** | **20,664,183** | **23,313,984** | | **Equity** | | | | Total Equity | 7,412,068 | 8,078,141 | | **Liabilities** | | | | Total Non-current Liabilities | 1,157,241 | 1,884,578 | | Of which: Borrowings | 914,909 | 1,630,522 | | Total Current Liabilities | 12,094,874 | 13,351,265 | | Of which: Borrowings | 3,375,502 | 2,921,418 | | **Total Liabilities** | **13,252,115** | **15,235,843** | | **Total Equity and Liabilities** | **20,664,183** | **23,313,984** | [Notes to the Interim Condensed Consolidated Financial Information](index=5&type=section&id=Notes%20to%20the%20Interim%20Condensed%20Consolidated%20Financial%20Information) [1. General Information](index=5&type=section&id=1.%20General%20Information) The company, incorporated in the Cayman Islands, develops real estate in China, listed on HKEX in 2020, and its RMB-denominated interim financials were approved on August 29, 2025 - The company was incorporated in the Cayman Islands on **October 8, 2018**, primarily engaging in real estate project development in China[7](index=7&type=chunk) - The company's shares were listed on The Stock Exchange of Hong Kong Limited on **July 15, 2020**[7](index=7&type=chunk) - This interim condensed consolidated financial information is presented in **RMB** and was approved for issue by the Board of Directors on **August 29, 2025**[7](index=7&type=chunk) [2. Basis of Preparation](index=5&type=section&id=2.%20Basis%20of%20Preparation) The interim condensed consolidated financial information is prepared in accordance with HKAS 34 "Interim Financial Reporting," is unaudited, and should be read in conjunction with the company's annual financial report - The interim condensed consolidated financial information is prepared in accordance with **HKAS 34 "Interim Financial Reporting"**[9](index=9&type=chunk) - This interim condensed consolidated financial information for the six months ended June 30, 2025, has **not been audited**[8](index=8&type=chunk) - This interim condensed consolidated financial information should be read in conjunction with the annual report for the year ended December 31, 2024, and any announcements published by the company during the interim reporting period[9](index=9&type=chunk) [3. Accounting Policies](index=5&type=section&id=3.%20Accounting%20Policies) Accounting policies are consistent with the prior fiscal year, except for income tax estimates and adopted revised standards, with HKFRS 18 expected to significantly impact financial statement presentation and disclosure from January 1, 2027 [3(a) Revised Standards Adopted by the Group](index=5&type=section&id=3(a)%20Revised%20Standards%20Adopted%20by%20the%20Group) - Certain revised standards are applicable to this reporting period, and the Group was not required to change its accounting policies or make retrospective adjustments upon their adoption[10](index=10&type=chunk) [3(b) New and Revised Standards and Interpretations Not Yet Adopted by the Group](index=5&type=section&id=3(b)%20New%20and%20Revised%20Standards%20and%20Interpretations%20Not%20Yet%20Adopted%20by%20the%20Group) - **HKFRS 18** will replace **HKAS 1**, expected to have a broad impact on presentation and disclosure, particularly concerning the statement of comprehensive income and management-defined performance measures[11](index=11&type=chunk) - The Group expects to apply the new standard from its mandatory effective date of **January 1, 2027**, at which point comparative information for the fiscal year ended December 31, 2026, will be restated[12](index=12&type=chunk) [3(c) Going Concern](index=6&type=section&id=3(c)%20Going%20Concern) - The Group recorded a net loss of **RMB 666,073,000** for the six months ended June 30, 2025, with significant uncertainties raising substantial doubt about its ability to continue as a going concern[13](index=13&type=chunk) - As of June 30, 2025, the Group's total interest-bearing bank and other borrowings amounted to **RMB 4,290,411,000**, of which **RMB 3,375,502,000** are due within the next twelve months[13](index=13&type=chunk) - Interest-bearing bank and other borrowings totaling **RMB 373,611,000** were not repaid on time, causing certain borrowings of **RMB 832,500,000** to become repayable on demand[13](index=13&type=chunk) - Unpaid interest of **USD 8,576,203** related to the November 2025 notes led to approximately **USD 161.9 million** in principal, premium, and accrued interest being declared immediately due and payable by major noteholders[13](index=13&type=chunk) - The directors have adopted several plans and measures to improve liquidity and financial position, including communicating with noteholders for a holistic solution, negotiating rollovers or extensions with onshore debt holders, seeking alternative financing, accelerating property sales, controlling costs and expenses, resolving claim disputes, and disposing of project equity[14](index=14&type=chunk) - Despite the directors' belief in the Group's ability to continue as a going concern, significant uncertainty remains regarding management's successful implementation of these plans and measures[15](index=15&type=chunk)[16](index=16&type=chunk) [4. Revenue and Segment Information](index=8&type=section&id=4.%20Revenue%20and%20Segment%20Information) The Executive Directors are identified as the chief operating decision makers, assessing performance based on profit before tax, with property development as the sole operating segment, and all revenue from property sales in China recognized at a point in time - Property development is identified as the **sole operating segment**, with no geographical segment analysis presented[17](index=17&type=chunk) - For the six months ended June 30, 2025, and 2024, no single external customer accounted for **10% or more** of the Group's revenue[17](index=17&type=chunk) - Contract revenue with customers primarily consists of property sales in China, all of which are recognized at a point in time[17](index=17&type=chunk) Property Sales Revenue | Revenue Source | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Property Sales | 1,631,319 | 5,367,139 | [5. Net Finance Costs](index=9&type=section&id=5.%20Net%20Finance%20Costs) For H1 2025, net finance costs decreased to **RMB 29,358 thousand** from **RMB 40,709 thousand** in the prior period, primarily due to reduced bank deposit interest income and increased capitalized interest Net Finance Costs | Indicator | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Finance Income (Interest income from bank deposits) | (816) | (2,917) | | Finance Costs (Bank and other borrowings) | 190,800 | 203,188 | | Finance Costs (Lease liabilities) | 1,554 | 2,034 | | Less: Interest capitalized | (162,180) | (161,596) | | Net Finance Costs | 29,358 | 40,709 | [6. Income Tax Expense](index=9&type=section&id=6.%20Income%20Tax%20Expense) For H1 2025, income tax expense significantly decreased to **RMB 56,670 thousand**, primarily due to lower PRC corporate income tax and land appreciation tax, with varying tax rates across jurisdictions Income Tax Expense | Indicator | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Current income tax: | | | | - PRC corporate income tax | 46,504 | 188,613 | | - PRC Land Appreciation Tax | 7,362 | 32,890 | | Deferred income tax | 2,804 | 14,211 | | **Total Income Tax Expense** | **56,670** | **235,714** | - The applicable corporate income tax rate for PRC mainland group entities is **25%**[23](index=23&type=chunk) - PRC Land Appreciation Tax is levied at progressive rates ranging from **30% to 60%** on the appreciation of land value[24](index=24&type=chunk) - Hong Kong profits tax rate is **16.5%**, but no provision was made for the current period due to the absence of assessable profits[27](index=27&type=chunk) [7. Loss Per Share](index=11&type=section&id=7.%20Loss%20Per%20Share) For H1 2025, basic loss per share significantly increased to **RMB 0.20**, up from **RMB 0.05** in the prior period, with diluted loss per share being identical due to no outstanding dilutive shares Loss Per Share | Indicator | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Loss attributable to owners of the company (RMB thousand) | (329,717) | (76,419) | | Weighted average number of ordinary shares in issue (thousand shares) | 1,621,799 | 1,621,799 | | Basic loss per share (RMB) | (0.20) | (0.05) | - For the six months ended June 30, 2025, and 2024, the company had no potentially dilutive shares outstanding, thus diluted loss per share was the same as basic loss per share[31](index=31&type=chunk) [8. Trade and Other Receivables and Prepayments](index=11&type=section&id=8.%20Trade%20and%20Other%20Receivables%20and%20Prepayments) As of June 30, 2025, total trade and other receivables and prepayments slightly increased to **RMB 2,596,757 thousand**, with trade receivables primarily from property sales, all within 30 days, and a near-zero expected credit loss rate Trade and Other Receivables and Prepayments | Indicator | June 30, 2025 (RMB thousand) | Dec 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Trade receivables (from third parties) | 180,805 | 131,309 | | Other receivables | 833,019 | 796,287 | | Prepayments | 1,582,933 | 1,525,286 | | **Total** | **2,596,757** | **2,452,882** | - Trade receivables primarily arise from property sales, and generally, no credit period is granted to property purchasers[33](index=33&type=chunk) - The aging of trade receivables is entirely within **0-30 days**, with an expected credit loss rate close to zero[34](index=34&type=chunk) [9. Trade Payables, Bills Payable and Other Payables](index=12&type=section&id=9.%20Trade%20Payables%2C%20Bills%20Payable%20and%20Other%20Payables) As of June 30, 2025, total trade payables, bills payable, and other payables decreased to **RMB 2,630,044 thousand**, with the largest portion of trade payables, **RMB 1,692,939 thousand**, being over 90 days old Trade Payables, Bills Payable and Other Payables | Indicator | June 30, 2025 (RMB thousand) | Dec 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Trade payables | 2,508,064 | 3,210,536 | | Bills payable | 2,645 | 3,021 | | Other payables | 119,335 | 256,267 | | **Total** | **2,630,044** | **3,469,824** | Aging Analysis of Trade Payables | Aging of Trade Payables | June 30, 2025 (RMB thousand) | Dec 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | 0–30 days | 304,482 | 677,840 | | 31–60 days | 301,003 | 500,004 | | 61–90 days | 209,640 | 500,678 | | Over 90 days | 1,692,939 | 1,532,014 | | **Total** | **2,508,064** | **3,210,536** | [10. Share Capital](index=13&type=section&id=10.%20Share%20Capital) As of June 30, 2025, the company's authorized share capital was **10,000,000,000 shares**, with **1,621,799,000 shares** issued, totaling **RMB 14,838 thousand**, consistent with January 1, 2025 Share Capital | Indicator | Number of Shares | Share Capital (HKD/RMB thousand) | | :--- | :--- | :--- | | Authorized Share Capital (as at Jan 1, 2025 and June 30, 2025) | 10,000,000,000 | 100,000,000 (HKD) | | Issued Share Capital (as at Jan 1, 2025 and June 30, 2025) | 1,621,799,000 | 14,838 (RMB thousand) | [11. Share Option Scheme](index=13&type=section&id=11.%20Share%20Option%20Scheme) The company's share option scheme became effective on July 15, 2020, and no options have been granted, exercised, cancelled, or lapsed under the scheme since its listing date through the announcement date - The company's share option scheme became effective on **July 15, 2020** (the Listing Date)[37](index=37&type=chunk) - For the year ended December 31, 2024, and from the Listing Date up to the date of this announcement, no share options have been granted, exercised, cancelled, or lapsed under the share option scheme[37](index=37&type=chunk) [12. Dividends](index=13&type=section&id=12.%20Dividends) The Board does not recommend an interim dividend for the six months ended June 30, 2025, consistent with the prior corresponding period - The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025 (six months ended June 30, 2024: nil)[38](index=38&type=chunk) [Management Discussion and Analysis](index=14&type=section&id=Management%20Discussion%20and%20Analysis) [H1 2025 Review and H2 2025 Outlook](index=14&type=section&id=H1%202025%20Review%20and%20H2%202025%20Outlook) In H1 2025, the real estate sector faced downward pressure, with the company delivering approximately **RMB 1,631 million** in value, focusing on marketing, cost reduction, cash collection, and quality delivery, while anticipating continued market adjustments in H2 - In H1 2025, the real estate industry faced overall downward pressure, with the Group's cumulative delivery value of approximately **RMB 1,631 million** and an area of approximately **177,042 square meters**[39](index=39&type=chunk) - The Group's strategies include strengthening marketing, balancing volume and price, reducing expenses for financial stability, focusing on core business and cash collection, and ensuring quality delivery[40](index=40&type=chunk) - The national real estate market is expected to continue facing adjustment pressure in H2 2025, and the company will remain focused on product development, customer service, strict cost control, optimizing financing structure, talent assessment, and fulfilling social responsibilities[41](index=41&type=chunk)[42](index=42&type=chunk) [Business Review](index=15&type=section&id=Business%20Review) The company's H1 revenue was approximately **RMB 1,631 million** from property sales, with total land reserves of **3,795,222 square meters** across 54 projects, predominantly in the Yangtze River Delta region [Contracted Sales](index=15&type=section&id=Contracted%20Sales) - For the six months ended June 30, 2025, the Group (including joint ventures and associates) recorded unaudited contracted sales of approximately **RMB 2,700 million**, with a contracted sales GFA of approximately **221,613 square meters**[44](index=44&type=chunk) - The average selling price for contracted sales was approximately **RMB 12,183 per square meter**[44](index=44&type=chunk) - As of June 30, 2025, the Group's contract liabilities were approximately **RMB 2,033 million**, a decrease from approximately **RMB 2,746 million** as of December 31, 2024[44](index=44&type=chunk) [Property Sales](index=16&type=section&id=Property%20Sales) - For the six months ended June 30, 2025, the Group recognized property sales revenue of approximately **RMB 1,631 million**, with a total GFA of approximately **177,042 square meters**[45](index=45&type=chunk) - The average selling price for recognized property sales was approximately **RMB 9,214 per square meter**[45](index=45&type=chunk) Recognized Property Sales by City | City | Recognized GFA (square meters) | Average Selling Price (RMB/square meter) | Recognized Revenue (RMB thousand) | | :--- | :--- | :--- | :--- | | Fuyang | 56,543 | 7,984 | 451,443 | | Taizhou | 22,428 | 14,782 | 331,536 | | Wuhu | 17,745 | 9,285 | 164,763 | | Hefei | 11,469 | 11,087 | 127,155 | | Yancheng | 21,833 | 5,774 | 126,056 | | Yangzhou | 10,454 | 7,478 | 78,175 | | Suzhou | 4,633 | 12,851 | 59,539 | | Huangshan | 5,690 | 9,895 | 56,300 | | Huaian | 3,950 | 10,569 | 41,749 | | Guangzhou | 5,081 | 7,825 | 39,758 | | Luoyang | 7,921 | 4,526 | 35,853 | | Haian | 2,916 | 11,656 | 33,990 | | Nanjing | 2,693 | 10,063 | 27,099 | | Foshan | 1,242 | 12,969 | 16,107 | | Guizhou | 1,504 | 8,588 | 12,917 | | Changzhou | 940 | 10,844 | 10,193 | | Parking spaces/facilities and other remaining units | 18,686 | - | - | | **Total** | **177,042** | **9,214** | **1,631,319** | [Land Bank](index=16&type=section&id=Land%20Bank) - As of June 30, 2025, the Group (together with its joint ventures and associates) owned **54 projects**, with a total land bank GFA of **3,795,222 square meters**[46](index=46&type=chunk) - Of these, **47 projects** are located in the Yangtze River Delta region[46](index=46&type=chunk) Land Bank by Province/City | Province/City | Total Land Bank (square meters) | Percentage of Total Land Bank (%) | | :--- | :--- | :--- | | Guangdong | 1,606,729 | 42 | | Jiangsu | 1,066,735 | 29 | | Anhui | 559,273 | 15 | | Guizhou | 234,152 | 6 | | Zhejiang | 154,694 | 4 | | Henan | 132,350 | 3 | | Sichuan | 26,504 | 1 | | Shanghai | 14,785 | 0 | | **Total** | **3,795,222** | **100%** | [Financial Review](index=18&type=section&id=Financial%20Review) The company's H1 total revenue was approximately **RMB 1,631 million**, a **70% year-on-year decrease**, resulting in a **RMB 450 million gross loss** and an expanded total comprehensive loss of **RMB 666 million**, driven by reduced property sales and increased impairment [Overall Performance](index=18&type=section&id=Overall%20Performance) - For the six months ended June 30, 2025, the Group's total revenue was approximately **RMB 1,631 million**, gross loss approximately **RMB 450 million**, net loss approximately **RMB 666 million**, and loss attributable to owners of the company approximately **RMB 330 million**[48](index=48&type=chunk) [Revenue](index=18&type=section&id=Revenue) - For the six months ended June 30, 2025, the Group's total revenue was approximately **RMB 1,631 million**, representing a year-on-year decrease of approximately **70%**[49](index=49&type=chunk) - This decrease was primarily attributable to the reduction in contracted sales and recognition of properties sold[49](index=49&type=chunk) [Cost of Sales](index=18&type=section&id=Cost%20of%20Sales) - For the six months ended June 30, 2025, the Group's cost of sales was approximately **RMB 2,081 million**, compared to approximately **RMB 5,077 million** in the prior period[50](index=50&type=chunk) - Cost of sales included a net impairment provision of approximately **RMB 392 million** (prior period: RMB 121 million) for properties under development and completed properties held for sale[50](index=50&type=chunk) [Gross (Loss) / Profit](index=18&type=section&id=Gross%20(Loss)%20%2F%20Profit) - For the six months ended June 30, 2025, the Group recorded a gross loss of approximately **RMB 450 million**, compared to a gross profit of approximately **RMB 290 million** in the prior period[51](index=51&type=chunk) - The gross loss margin was approximately **28%**, compared to a gross profit margin of approximately **5%** in the corresponding period of 2024[51](index=51&type=chunk) - The decline in gross margin was primarily due to unfavorable market conditions and increased impairment provisions for properties under development compared to the prior period[51](index=51&type=chunk) [Other Income / (Expenses) and Other Gains / (Losses) – Net](index=19&type=section&id=Other%20Income%20%2F%20(Expenses)%20and%20Other%20Gains%20%2F%20(Losses)%20%E2%80%93%20Net) - For the six months ended June 30, 2025, the Group's other income was approximately **RMB 7 million**, compared to other expenses of approximately **RMB 1 million** in the prior period[52](index=52&type=chunk) - This primarily included rental, management, and consulting service income of approximately **RMB 11 million**, offset by expenses for tax deferrals of approximately **RMB 4 million**[52](index=52&type=chunk) [Selling and Marketing Expenses](index=19&type=section&id=Selling%20and%20Marketing%20Expenses) - Selling and marketing expenses decreased by approximately **28%** during the period, from approximately **RMB 89 million** in the prior period to approximately **RMB 64 million**[53](index=53&type=chunk) - This reduction was attributable to decreased recognition of properties sold and sales commissions, effective control measures for marketing and advertising costs, and reduced staff costs[53](index=53&type=chunk) [General and Administrative Expenses](index=19&type=section&id=General%20and%20Administrative%20Expenses) - General and administrative expenses decreased by approximately **6%** during the period, from approximately **RMB 71 million** in the prior period to approximately **RMB 67 million**[54](index=54&type=chunk) - The decrease was primarily due to further streamlining of the organizational structure to reduce costs and improve efficiency[54](index=54&type=chunk) [Net Finance Costs_FinancialReview](index=19&type=section&id=Net%20Finance%20Costs_FinancialReview) - Net finance costs decreased by approximately **29%** during the period, from approximately **RMB 41 million** in the prior period to approximately **RMB 29 million**[55](index=55&type=chunk) - This decrease was attributable to a reduction in the average principal balance of interest-bearing liabilities[55](index=55&type=chunk) [Share of Results of Joint Ventures and Associates](index=19&type=section&id=Share%20of%20Results%20of%20Joint%20Ventures%20and%20Associates) - The share of results of joint ventures and associates recorded losses of approximately **RMB 6 million** and **RMB 8 million** for the six months ended June 30, 2025, and 2024, respectively[56](index=56&type=chunk) - This loss is consistent with the decline in property sales revenue from joint ventures and associates[56](index=56&type=chunk) [Income Tax Expense_FinancialReview](index=20&type=section&id=Income%20Tax%20Expense_FinancialReview) - Income tax expense recorded approximately **RMB 57 million** and **RMB 236 million** for the six months ended June 30, 2025, and 2024, respectively[57](index=57&type=chunk) [Loss and Total Comprehensive Loss for the Period](index=20&type=section&id=Loss%20and%20Total%20Comprehensive%20Loss%20for%20the%20Period) - For the six months ended June 30, 2025, the Group's loss and total comprehensive loss for the period was approximately **RMB 666 million** (prior period: RMB 154 million)[58](index=58&type=chunk) - Loss attributable to owners of the company was approximately **RMB 330 million** (prior period: RMB 76 million)[58](index=58&type=chunk) - Basic and diluted loss per share was **RMB 0.20** per share (prior period: RMB 0.05 per share)[58](index=58&type=chunk) [Liquidity and Financial Resources](index=20&type=section&id=Liquidity%20and%20Financial%20Resources) The company maintains prudent treasury management, funding operations and capital expenditures primarily through operating cash, with total cash of approximately **RMB 670 million** and total borrowings of **RMB 4,290 million** as of June 30, 2025, a **6% decrease** from year-end 2024, with **RMB 3,375 million** due within one year - The Group primarily funds its working capital, capital expenditures, and other capital requirements through cash generated from operations, including proceeds from property pre-sales and sales[59](index=59&type=chunk) - Total borrowings decreased by approximately **6%** compared to December 31, 2024[60](index=60&type=chunk) Liquidity and Financial Resources Summary | Indicator | June 30, 2025 (RMB million) | Dec 31, 2024 (RMB million) | | :--- | :--- | :--- | | Total Cash | 670 | 839 | | Total Bank and Other Borrowings | 4,290 | 4,552 | | Of which: Repayable within one year | 3,375 | 2,921 | | Of which: Repayable after one year | 915 | 1,631 | [Senior Notes](index=21&type=section&id=Senior%20Notes) The company previously redeemed senior notes via payment-in-kind, but the failure to pay **USD 8,576,203** interest on the November 2025 notes resulted in a default event on June 17, 2025, with major noteholders declaring approximately **USD 161.9 million** immediately due and payable, prompting the company to seek a holistic solution - On **November 6, 2023**, senior notes with a principal amount of approximately **USD 145 million** were fully redeemed, and new notes (2024 Senior Notes) with a total principal amount of **USD 164,411,875** were issued via payment-in-kind[61](index=61&type=chunk) - On **November 18, 2024**, the 2024 Senior Notes were fully redeemed, and new notes (November 2025 Notes) with a total principal amount of **USD 180,551,641** were issued via payment-in-kind[61](index=61&type=chunk) - Interest of **USD 8,576,203** related to the November 2025 Notes was due on **May 18, 2025**, and the company's failure to pay due to liquidity pressure constituted an event of default on **June 17, 2025**[62](index=62&type=chunk) - Major noteholders have declared the principal, premium, and accrued and unpaid interest of the November 2025 Notes, totaling approximately **USD 161.9 million**, immediately due and payable[62](index=62&type=chunk) - The company is continuing to communicate with relevant noteholders to seek a holistic solution for the related debt[62](index=62&type=chunk) [Key Financial Ratios](index=21&type=section&id=Key%20Financial%20Ratios) As of June 30, 2025, the company's net gearing ratio increased to **49%**, total cash to short-term debt ratio decreased to **0.2 times**, and current ratio slightly declined to **1.57 times**, indicating increased liquidity pressure, which the company plans to manage through working capital policies and existing financial resources Key Financial Ratios | Financial Ratio | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Net Gearing Ratio | 49% | 46% | | Gearing Ratio (excluding contract liabilities) | 60% | 61% | | Total Cash to Short-term Debt Ratio | 0.2 times | 0.3 times | | Current Ratio | 1.57 times | 1.62 times | - The company will continue to effectively manage its working capital through working capital management policies and utilize proceeds from property project sales and pre-sales, bank financing and other borrowings, and negotiated payment arrangements to manage financial resources[63](index=63&type=chunk) [Foreign Exchange Risk](index=22&type=section&id=Foreign%20Exchange%20Risk) The company primarily operates in China and faces no other significant direct foreign exchange fluctuation risks apart from USD-denominated offshore senior notes, with directors expecting no material adverse impact from RMB exchange rate fluctuations and no hedging transactions currently in place - The Group primarily operates in China and has no other significant direct foreign exchange fluctuation risks apart from its **USD-denominated offshore senior notes**[65](index=65&type=chunk) - The directors expect that fluctuations in the **RMB exchange rate** will not have a material adverse impact on the Group's operations[65](index=65&type=chunk) - As of June 30, 2025, the Group had **not entered into any hedging transactions**[65](index=65&type=chunk) [Interest Rate Risk](index=22&type=section&id=Interest%20Rate%20Risk) The company's interest rate risk primarily stems from RMB-denominated borrowings influenced by PBOC benchmark rates, while offshore senior notes are fixed-rate, with risk managed through close monitoring of rate trends and debt portfolio - The Group's interest rate risk arises from borrowings, with most denominated in **RMB** and interest rates primarily influenced by the benchmark rates set by the People's Bank of China[66](index=66&type=chunk) - Except for the fixed-rate offshore senior notes, most of the Group's borrowings are denominated in **RMB**[66](index=66&type=chunk) - The Group manages its interest rate risk by closely monitoring interest rate fluctuation trends and their impact on the Group's interest rate risk, as well as by monitoring the Group's debt portfolio[66](index=66&type=chunk) [Pledge of Assets](index=22&type=section&id=Pledge%20of%20Assets) As of June 30, 2025, certain bank and other borrowings were secured by assets with a total carrying value of approximately **RMB 13,027 million**, including pledged fixed deposits, equity interests in group companies, properties under development, completed properties held for sale, and investment properties - As of June 30, 2025, certain bank and other borrowings of the Group were secured by assets with a total carrying value of approximately **RMB 13,027 million** (December 31, 2024: RMB 13,060 million)[67](index=67&type=chunk) - The pledged assets include pledged fixed deposits, equity interests in group companies, properties under development, completed properties held for sale, and investment properties[67](index=67&type=chunk) [Financial Guarantees and Contingent Liabilities](index=22&type=section&id=Financial%20Guarantees%20and%20Contingent%20Liabilities) As of June 30, 2025, total financial guarantees amounted to **RMB 4,782,326 thousand**, primarily for purchasers' mortgage financing and joint venture borrowings, with directors deeming the likelihood of default remote, thus no significant liabilities were recognized, and no other material contingent liabilities existed Financial Guarantees | Type of Financial Guarantee | June 30, 2025 (RMB thousand) | Dec 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Guarantees for mortgage financing of certain property purchasers | 4,548,156 | 6,042,682 | | Guarantees for borrowings of joint ventures | 234,170 | 234,170 | | **Total** | **4,782,326** | **6,276,852** | - The guarantee period for purchasers extends from the mortgage loan grant date until the purchaser obtains the property ownership certificate or repays the mortgage loan, whichever is earlier[69](index=69&type=chunk) - The directors consider the likelihood of purchasers and joint ventures defaulting on their payment obligations to be remote, thus the financial guarantees measured at fair value are insignificant, and no liabilities have been recognized[69](index=69&type=chunk)[70](index=70&type=chunk) - As of June 30, 2025, the Group had no other material contingent liabilities[71](index=71&type=chunk) [Material Acquisitions and Disposals of Subsidiaries, Associates and Joint Ventures](index=23&type=section&id=Material%20Acquisitions%20and%20Disposals%20of%20Subsidiaries%2C%20Associates%20and%20Joint%20Ventures) For the six months ended June 30, 2025, the company made no material acquisitions or disposals of subsidiaries, associates, or joint ventures - For the six months ended June 30, 2025, the Group made **no material acquisitions or disposals** of subsidiaries, associates, or joint ventures[72](index=72&type=chunk) [Future Plans for Material Investments](index=23&type=section&id=Future%20Plans%20for%20Material%20Investments) The company will continue to invest in property development and acquire suitable land plots as appropriate, funded by internal resources and external borrowings, with no other material investment plans disclosed as of the announcement date - The Group will continue to invest in its property development projects and acquire suitable land plots as appropriate, with such investments funded by internal resources and external borrowings[73](index=73&type=chunk) - Save as disclosed above, as of the date of this announcement, the Group has **no other future plans for material investments**[73](index=73&type=chunk) [Human Resources](index=23&type=section&id=Human%20Resources) As of June 30, 2025, the company had **275 employees**, a decrease from 299 at year-end 2024, with total employee salary and benefits expenses of approximately **RMB 40 million**, and a performance-based compensation system with continuous training - As of June 30, 2025, the Group had **275 employees** (December 31, 2024: 299 employees)[74](index=74&type=chunk) - For the six months ended June 30, 2025, the Group's total employee salary and benefits expenses were approximately **RMB 40 million** (prior period: RMB 63 million)[74](index=74&type=chunk) - The Group adopts a performance-based compensation system for employees and provides competitive remuneration packages along with continuous and systematic training[74](index=74&type=chunk) [Other Information](index=24&type=section&id=Other%20Information) [Purchase, Redemption or Sale of the Company's Listed Securities](index=24&type=section&id=Purchase%2C%20Redemption%20or%20Sale%20of%20the%20Company%27s%20Listed%20Securities) Neither the company nor its subsidiaries purchased, sold, or redeemed any of the company's shares or other listed securities during the period - Neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's shares or other listed securities during the period[75](index=75&type=chunk) [Interim Dividend](index=24&type=section&id=Interim%20Dividend) The directors do not recommend any interim dividend for the six months ended June 30, 2025, consistent with the prior corresponding period - The directors do not recommend the payment of any interim dividend for the six months ended June 30, 2025 (six months ended June 30, 2024: nil)[76](index=76&type=chunk) [Corporate Governance](index=24&type=section&id=Corporate%20Governance) The company adopted and generally complied with the Corporate Governance Code, though the combined roles of Chairman and CEO represent a deviation, which the Board believes facilitates efficient decision-making while diverse non-executive and independent non-executive directors provide balance - The company has adopted the **Corporate Governance Code** as set out in Appendix C1 to the Listing Rules[77](index=77&type=chunk) - For the six months ended June 30, 2025, the company has complied with the Corporate Governance Code to the extent applicable and practicable, except for the deviation where the roles of Chairman of the Board and Chief Executive Officer are held by the same person[77](index=77&type=chunk) - The Board believes that the current structure facilitates efficient and effective business decision-making and implementation, with the diverse backgrounds of non-executive and independent non-executive directors providing a balance of power[78](index=78&type=chunk) [Standard Code for Securities Transactions](index=24&type=section&id=Standard%20Code%20for%20Securities%20Transactions) The company adopted the Standard Code for Securities Transactions by Directors of Listed Issuers, and all directors confirmed compliance for the six months ended June 30, 2025 - The company has adopted the **Standard Code for Securities Transactions by Directors of Listed Issuers** as set out in Appendix C3 to the Listing Rules[80](index=80&type=chunk) - All directors have confirmed that they have complied with the required standards set out in the Standard Code for the six months ended June 30, 2025[81](index=81&type=chunk) [Material Subsequent Events](index=25&type=section&id=Material%20Subsequent%20Events) No other material subsequent events occurred after June 30, 2025, up to the date of this announcement, except as otherwise disclosed herein - Save as otherwise disclosed in this announcement, no other material subsequent events occurred after June 30, 2025, and up to the date of this announcement[82](index=82&type=chunk) [Review of Unaudited Interim Financial Information](index=25&type=section&id=Review%20of%20Unaudited%20Interim%20Financial%20Information) The company's Audit Committee discussed and reviewed the unaudited interim financial information and interim results announcement for the six months ended June 30, 2025, confirming compliance with all applicable accounting principles, standards, and requirements - The company's Audit Committee has discussed with management and the Board, and reviewed the Group's unaudited interim financial information and this interim results announcement for the six months ended June 30, 2025[83](index=83&type=chunk) - The Audit Committee confirmed compliance with all applicable accounting principles, standards, and requirements[83](index=83&type=chunk) [Publication of Unaudited Interim Results Announcement and Interim Report](index=25&type=section&id=Publication%20of%20Unaudited%20Interim%20Results%20Announcement%20and%20Interim%20Report) This interim results announcement is published on the HKEX and company websites, and the interim report for the six months ended June 30, 2025, will be dispatched to shareholders and published on these websites in due course - This interim results announcement is published on the HKEX website (www.hkexnews.hk) and the company's website (www.glchina.group)[84](index=84&type=chunk) - The company's interim report for the six months ended June 30, 2025, will be dispatched to shareholders (upon request) and published on the aforementioned websites in due course[84](index=84&type=chunk)