[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)

Financial Statements [Interim Condensed Consolidated Statement of Profit or Loss](index=1&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss) The Group's revenue decreased by 15.2% year-on-year to RMB 1,389,183 thousand in H1 2025, while profit attributable to owners of the Company increased by 32.6% to RMB 171,747 thousand, with basic earnings per share rising to RMB 0.17 2025 H1 Key Profit or Loss Data | Indicator | 2025 H1 (RMB thousands) | 2024 H1 (RMB thousands) | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 1,389,183 | 1,638,141 | -15.2% | | Cost of sales and services | (1,133,795) | (1,330,865) | -14.8% | | Gross profit | 255,388 | 307,276 | -16.9% | | Other income and gains | 135,755 | 31,370 | +332.8% | | Selling and distribution expenses | (21,668) | (30,729) | -29.5% | | Administrative expenses | (139,276) | (96,837) | +43.8% | | Exchange gains, net | 5,587 | 17,137 | -67.4% | | Other expenses, net | (6,067) | (83,430) | -92.7% | | Finance costs | (54,586) | (58,122) | -6.1% | | Profit before tax | 175,133 | 86,665 | +102.1% | | Income tax (expense) / credit | (3,386) | 42,851 | N/A | | Profit for the period attributable to owners of the Company | 171,747 | 129,516 | +32.6% | | Basic and diluted earnings per share attributable to owners of the Company | RMB 0.17 | RMB 0.13 | +30.8% | [Interim Condensed Consolidated Statement of Comprehensive Income](index=3&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) In H1 2025, the Group's total comprehensive income significantly increased by 82.2% to RMB 212,792 thousand, primarily due to exchange differences on translation of foreign operations turning from loss to gain 2025 H1 Comprehensive Income Data | Indicator | 2025 H1 (RMB thousands) | 2024 H1 (RMB thousands) | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Profit for the period | 171,747 | 129,516 | +32.6% | | Exchange differences on translation of foreign operations | 42,650 | (13,477) | N/A | | Exchange differences on translation of the Company's financial statements into presentation currency | (1,605) | 740 | N/A | | Other comprehensive income / (loss) for the period, net of tax | 41,045 | (12,737) | N/A | | Total comprehensive income for the period attributable to owners of the Company | 212,792 | 116,779 | +82.2% | [Interim Condensed Consolidated Statement of Financial Position](index=4&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the Group's total assets slightly decreased, but net current liabilities improved, and net assets significantly grew by 17.2% to RMB 1,451,923 thousand, mainly due to increased reserves Key Financial Position Data as of June 30, 2025 | Indicator | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Total non-current assets | 2,802,090 | 2,820,377 | -0.6% | | Total current assets | 3,487,079 | 3,685,562 | -5.4% | | Total assets | 6,289,169 | 6,505,939 | -3.3% | | Total current liabilities | 3,794,264 | 4,112,922 | -7.8% | | Net current liabilities | (307,185) | (427,360) | +28.1% | | Total non-current liabilities | 1,042,982 | 1,153,886 | -9.5% | | Total liabilities | 4,837,246 | 5,266,808 | -8.2% | | Net assets | 1,451,923 | 1,239,131 | +17.2% | | Total equity | 1,451,923 | 1,239,131 | +17.2% | Notes to the Interim Condensed Consolidated Financial Statements [1. Company Information](index=6&type=section&id=1.%20Company%20Information) Pearl River Petroleum, Natural Gas Steel Pipe Holdings Limited, registered in the Cayman Islands, primarily engages in welded steel pipe manufacturing and sales, related services, and property development and investment, with Bournam Profits Limited as its holding company - The Company's principal activities are the manufacture and sale of welded steel pipes and provision of related manufacturing services, as well as property development and investment, with no significant change in the nature of business[9](index=9&type=chunk) - The holding company and ultimate holding company is Bournam Profits Limited, incorporated in the British Virgin Islands[9](index=9&type=chunk) [2. Basis of Preparation](index=6&type=section&id=2.%20Basis%20of%20Preparation) Financial statements are prepared in RMB under IAS 34; despite net current liabilities, the Board believes the Group can continue as a going concern based on active financing negotiations, new loan acquisitions, and improved operating cash flow measures - As of June 30, 2025, the Group recorded **net current liabilities of approximately RMB 307,185,000**[11](index=11&type=chunk) - The Group has obtained **new loans of RMB 13,500,000** and renewed existing loans of RMB 69,800,000, and is negotiating to renew existing loans of RMB 526,944,000 due within one year[12](index=12&type=chunk) - The Group is implementing cost control measures and expects positive cash flows from its steel pipe business and property sales to support its going concern[13](index=13&type=chunk) [3. Changes in Accounting Policies and Disclosures](index=8&type=section&id=3.%20Changes%20in%20Accounting%20Policies%20and%20Disclosures) The revised IAS 21 'Lack of Exchangeability' was first adopted this period, but it had no material impact on the interim condensed consolidated financial information as all Group transaction currencies are exchangeable - The revised International Accounting Standard 21 "Lack of Exchangeability" was adopted for the first time, but it had **no impact on the financial information**[14](index=14&type=chunk)[15](index=15&type=chunk) [4. Operating Segment Information](index=8&type=section&id=4.%20Operating%20Segment%20Information) The Group operates in two reportable segments: Steel Pipe Business and Property Development and Investment; in H1 2025, the steel pipe segment accounted for 90.9% of revenue, while property development and investment revenue significantly grew to 9.1%, with steel pipe revenue primarily from overseas and property revenue entirely from domestic sources - The Group has two reportable operating segments: **Steel Pipe Business** (manufacturing and sale of welded steel pipes and related services) and **Property Development and Investment** (development of properties for sale and property investment)[20](index=20&type=chunk) 2025 H1 Revenue and Results by Segment | Segment | 2025 H1 Revenue (RMB thousands) | 2024 H1 Revenue (RMB thousands) | 2025 H1 Results (RMB thousands) | 2024 H1 Results (RMB thousands) | | :--- | :--- | :--- | :--- | :--- | | Steel Pipe | 1,262,474 | 1,637,661 | 164,616 | 129,885 | | Property Development and Investment | 126,709 | 480 | (6,278) | (35,491) | | **Total** | **1,389,183** | **1,638,141** | **158,338** | **94,394** | 2025 H1 Revenue by Product and Service | Product/Service | 2025 H1 (RMB thousands) | 2024 H1 (RMB thousands) | | :--- | :--- | :--- | | Manufacture and sale of steel pipes | 1,174,101 | 1,538,881 | | Steel pipe manufacturing services | 44,875 | 40,252 | | Others | 43,498 | 58,528 | | Sale of properties | 126,709 | 480 | | **Total** | **1,389,183** | **1,638,141** | 2025 H1 Revenue by Geographical Region | Region | 2025 H1 (RMB thousands) | 2024 H1 (RMB thousands) | | :--- | :--- | :--- | | Mainland China | 417,781 | 342,145 | | Africa | 550,955 | 947,460 | | Other Asian Countries | 157,647 | 221,845 | | Middle East | 241,608 | 73,037 | | Europe | — | 2,345 | | South America | 21,192 | 8,303 | | North America | — | 43,006 | | **Total** | **1,389,183** | **1,638,141** | 2025 H1 Major Customer Revenue Contribution | Customer | 2025 H1 (RMB thousands) | 2024 H1 (RMB thousands) | | :--- | :--- | :--- | | Customer A | 548,336 | 874,528 | | Customer B | N/A* | 191,981 | * Customer B's revenue contribution did not exceed 10% of the Group's total revenue in H1 2025. [5. Revenue, Other Income and Gains](index=13&type=section&id=5.%20Revenue%2C%20Other%20Income%20and%20Gains) Total revenue decreased by 15.2% year-on-year in H1 2025, with steel pipe business revenue declining but property sales revenue increasing from zero to RMB 126,229 thousand; other income and gains surged by 332.8%, mainly due to gains from disposal of a subsidiary and write-off of fixed-rate bonds and notes 2025 H1 Revenue, Other Income and Gains Analysis | Item | 2025 H1 (RMB thousands) | 2024 H1 (RMB thousands) | | :--- | :--- | :--- | | Revenue from contracts with customers | 1,388,703 | 1,637,661 | | Revenue from lease contracts | 480 | 480 | | **Total Revenue** | **1,389,183** | **1,638,141** | | Bank interest income | 94 | 77 | | Government subsidies from China | 20,849 | 13,577 | | Gain on disposal of property, plant and equipment | 1,160 | — | | Write-off of principal portion of fixed-rate bonds and notes | 6,451 | — | | Write-off of interest portion of fixed-rate bonds and notes | 13,760 | — | | Gain on disposal of a subsidiary | 78,665 | — | | Others | 14,776 | 17,716 | | **Total Other Income and Gains** | **135,755** | **31,370** | - In H1 2025, the disposal of a subsidiary with **net liabilities of approximately RMB 78,365,000** resulted in a **gain on disposal of approximately RMB 78,665,000**[28](index=28&type=chunk) - The Group entered into a settlement deed with noteholders, fully redeeming the settlement amount and writing off the principal and interest portions of fixed-rate bonds and notes[28](index=28&type=chunk) - Revenue from steel pipe sales is recognized when control of the goods is transferred; property sales revenue is recognized when the buyer obtains physical possession of the completed property; manufacturing service revenue is recognized using the input method based on the stage of completion of the contract[33](index=33&type=chunk)[34](index=34&type=chunk)[35](index=35&type=chunk) [6. Other Expenses, Net](index=17&type=section&id=6.%20Other%20Expenses%2C%20Net) Other expenses, net, significantly decreased by 92.7% to RMB 6,067 thousand in H1 2025, primarily due to a large write-off and impairment of receivables in the comparative period of 2024 2025 H1 Other Expenses, Net | Item | 2025 H1 (RMB thousands) | 2024 H1 (RMB thousands) | | :--- | :--- | :--- | | Compensation | 1,892 | 3,022 | | Loss on deregistration of subsidiaries | — | 4,056 | | Write-off of other receivables | — | 46,341 | | Provision for claims arising from litigation | — | 2,020 | | Write-off of property, plant and equipment | — | 88 | | Impairment of other receivables | — | 27,593 | | Others | 4,175 | 310 | | **Total** | **6,067** | **83,430** | [7. Finance Costs](index=17&type=section&id=7.%20Finance%20Costs) Finance costs decreased by 6.1% year-on-year to RMB 54,586 thousand in H1 2025, mainly due to a reduction in the average borrowing balance 2025 H1 Finance Costs Analysis | Item | 2025 H1 (RMB thousands) | 2024 H1 (RMB thousands) | | :--- | :--- | :--- | | Interest on bank and other borrowings (including bonds and notes) | 54,447 | 57,563 | | Interest on discounted bills | 119 | 510 | | Interest on lease liabilities | 20 | 49 | | **Total Interest Expense** | **54,586** | **58,122** | [8. Profit Before Tax](index=18&type=section&id=8.%20Profit%20Before%20Tax) Profit before tax increased by 102.1% year-on-year to RMB 175,133 thousand in H1 2025, primarily influenced by increased other income and gains and a significant rise in research and development costs 2025 H1 Profit Before Tax Adjustments | Item | 2025 H1 (RMB thousands) | 2024 H1 (RMB thousands) | | :--- | :--- | :--- | | Cost of inventories sold | 966,752 | 1,250,491 | | Cost of services provided | 59,915 | 80,374 | | Cost of properties sold | 107,128 | — | | Depreciation of property, plant and equipment | 32,441 | 35,688 | | Depreciation of right-of-use assets | 7,585 | 7,956 | | Gain on disposal of property, plant and equipment | (1,160) | — | | Research and development costs | 62,484 | 16,173 | - Research and development costs significantly increased from **RMB 16,173 thousand in H1 2024 to RMB 62,484 thousand in H1 2025**, representing a **286.3% increase**[38](index=38&type=chunk) [9. Income Tax](index=18&type=section&id=9.%20Income%20Tax) Income tax expense of RMB 3,386 thousand was recorded in H1 2025, compared to an income tax credit of RMB 42,851 thousand in H1 2024, mainly due to tax provisions for profits of certain subsidiaries in the current period - Subsidiaries operating in Mainland China are subject to a **25% tax rate**, a **15% tax rate for high-tech enterprises**, and preferential tax policies for small and micro enterprises[39](index=39&type=chunk) 2025 H1 Income Tax Expense / (Credit) | Item | 2025 H1 (RMB thousands) | 2024 H1 (RMB thousands) | | :--- | :--- | :--- | | China corporate income tax expense for the period | 14,152 | 21,031 | | Under / (over) provision for China corporate income tax in prior periods | 466 | (63,882) | | Deferred tax | (11,232) | — | | **Total Tax Expense / (Credit) for the Period** | **3,386** | **(42,851)** | [10. Interim Dividend](index=19&type=section&id=10.%20Interim%20Dividend) The Board does not recommend the payment of an interim dividend for H1 2025, consistent with H1 2024 - The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025 (H1 2024: nil)[41](index=41&type=chunk) [11. Earnings Per Share Attributable to Owners of the Company](index=19&type=section&id=11.%20Earnings%20Per%20Share%20Attributable%20to%20Owners%20of%20the%20Company) Basic earnings per share for H1 2025 was RMB 0.17, higher than RMB 0.13 in H1 2024, with no potential dilutive ordinary shares 2025 H1 Earnings Per Share | Indicator | 2025 H1 | 2024 H1 | | :--- | :--- | :--- | | Basic and diluted earnings per share attributable to owners of the Company | RMB 0.17 | RMB 0.13 | | Weighted average number of ordinary shares in issue | 1,011,142,000 shares | 1,011,142,000 shares | - The Group had no potential dilutive ordinary shares in issue for the six months ended June 30, 2025 and 2024[43](index=43&type=chunk) [12. Property, Plant and Equipment](index=19&type=section&id=12.%20Property%2C%20Plant%20and%20Equipment) As of June 30, 2025, the net book value of property, plant and equipment slightly decreased to RMB 1,808,510 thousand, with approximately RMB 651,620 thousand pledged Changes in Book Value of Property, Plant and Equipment | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | At beginning of period/year | 1,830,141 | 1,839,427 | | Additions | 10,976 | 62,333 | | Disposals | (166) | (1,683) | | Depreciation | (32,441) | (65,142) | | Write-off | — | (4,794) | | At end of period/year | 1,808,510 | 1,830,141 | - The Group's property, plant and equipment with a **net book value of approximately RMB 651,620,000** (December 31, 2024: RMB 662,261,000) were pledged as collateral for the Group's bank and other borrowings[44](index=44&type=chunk) [13. Investment Properties](index=19&type=section&id=13.%20Investment%20Properties) As of June 30, 2025, the book value of investment properties remained at RMB 355,000 thousand, with no fair value adjustment losses Book Value of Investment Properties | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Book value at beginning of period/year | 355,000 | 360,000 | | Net loss from fair value adjustment | — | (5,000) | | Book value at end of period/year | 355,000 | 355,000 | [14. Inventories](index=20&type=section&id=14.%20Inventories) As of June 30, 2025, total inventories significantly decreased by 53.6% to RMB 378,520 thousand, primarily due to reductions in raw materials and work-in-progress Inventory Composition | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Raw materials | 45,007 | 231,617 | | Work-in-progress | 44,477 | 379,594 | | Finished goods | 302,697 | 218,763 | | Less: Provision for slow-moving and obsolete inventories | (13,661) | (13,661) | | **Total** | **378,520** | **816,313** | [15. Trade and Bills Receivables](index=20&type=section&id=15.%20Trade%20and%20Bills%20Receivables) As of June 30, 2025, total trade and bills receivables increased by 36.9% to RMB 508,992 thousand, with the highest proportion aged within 60 days Trade and Bills Receivables | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Net trade receivables | 500,303 | 352,918 | | Bills receivables | 8,689 | 18,813 | | **Total** | **508,992** | **371,731** | Ageing Analysis of Trade Receivables | Ageing | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Within 60 days | 340,460 | 189,852 | | 61 to 90 days | 17,067 | 15,399 | | 91 to 180 days | 19,745 | 48,738 | | 181 to 365 days | 35,547 | 17,383 | | 1 to 2 years | 47,921 | 40,080 | | 2 to 3 years | 39,563 | 41,466 | | **Total** | **500,303** | **352,918** | - The Group generally grants credit periods of **30 to 90 days** to customers, while new customers are usually required to make advance payments[47](index=47&type=chunk) [16. Trade and Bills Payables](index=21&type=section&id=16.%20Trade%20and%20Bills%20Payables) As of June 30, 2025, total trade and bills payables slightly decreased by 3.5% to RMB 1,025,751 thousand, with a significant reduction in the proportion aged within 90 days Ageing Analysis of Trade and Bills Payables | Ageing | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Trade payables (within 90 days) | 276,776 | 601,752 | | Trade payables (91 to 180 days) | 149,412 | 48,251 | | Trade payables (181 to 365 days) | 222,221 | 114,183 | | Trade payables (1 to 2 years) | 63,299 | 45,581 | | Trade payables (2 to 3 years) | 64,401 | 16,282 | | Trade payables (over 3 years) | 118,482 | 127,756 | | Bills payables | 131,160 | 109,561 | | **Total** | **1,025,751** | **1,063,366** | - Trade payables are non-interest bearing and generally payable within one year, with all bills payables due within 365 days[49](index=49&type=chunk) [17. Fixed Rate Bonds and Notes](index=22&type=section&id=17.%20Fixed%20Rate%20Bonds%20and%20Notes) As of June 30, 2025, the Group fully redeemed all fixed-rate bonds and notes, including the 2020 Notes and 2022 Bonds B, resulting in zero liability for this item Fixed Rate Bonds and Notes (Current Portion) | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | 2020 Notes | — | 54,636 | | 2022 Bonds B | — | 1,852 | | **Total** | **—** | **56,488** | - The Company has **fully redeemed the 2020 Notes**, and the noteholders have surrendered all notes, releasing the Company from all obligations[51](index=51&type=chunk) - The Company has **fully redeemed the 2022 Bonds B**[52](index=52&type=chunk) [18. Interest-Bearing Bank and Other Borrowings](index=23&type=section&id=18.%20Interest-Bearing%20Bank%20and%20Other%20Borrowings) As of June 30, 2025, total interest-bearing bank and other borrowings decreased to RMB 1,697,390 thousand, with approximately 56% repayable within one year. Multiple assets were pledged as collateral for these borrowings Interest-Bearing Bank and Other Borrowings (Current and Non-Current) | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Total current borrowings | 953,154 | 967,281 | | Total non-current borrowings | 744,236 | 841,164 | | **Total** | **1,697,390** | **1,808,445** | Borrowing Repayment Schedule Analysis | Term | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Within one year | 953,154 | 967,281 | | In the second year | 628,236 | 723,164 | | In the third to fifth year | 116,000 | 12,000 | | Over five years | — | 106,000 | | **Total** | **1,697,390** | **1,808,445** | - Certain bank and other borrowings of the Group are secured by property, plant and equipment with a **net book value of approximately RMB 651,620,000**, leasehold land with a **net book value of approximately RMB 458,076,000**, and completed properties held for sale with a **net book value of approximately RMB 956,564,000**[56](index=56&type=chunk) Management Discussion and Analysis [Financial Review](index=26&type=section&id=Financial%20Review) In H1 2025, the Group's revenue decreased by 15.2% year-on-year, mainly due to fewer steel pipe project deliveries; however, profit attributable to owners of the Company significantly increased by 32.6%, driven by a substantial rise in other income and gains (disposal of a subsidiary and bond write-off) and a reduction in other expenses, net 2025 H1 Overall Financial Performance | Indicator | 2025 H1 (RMB) | 2024 H1 (RMB) | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 1,389,200,000 | 1,638,100,000 | -15.2% | | Profit attributable to ordinary equity holders of the Company | 171,700,000 | 129,500,000 | +32.6% | | Earnings per share | 0.17 | 0.13 | +30.8% | - The decrease in revenue was due to the completion of steel pipe deliveries for a large crude oil pipeline project in East Africa during the period[59](index=59&type=chunk) 2025 H1 Revenue by Business Segment | Segment | 2025 H1 Revenue (RMB thousands) | % of Total | 2024 H1 Revenue (RMB thousands) | % of Total | | :--- | :--- | :--- | :--- | :--- | | Steel Pipe | 1,262,474 | 90.9% | 1,637,661 | 100.0% | | Property Development and Investment | 126,709 | 9.1% | 480 | 0.0% | | **Total** | **1,389,183** | **100.0%** | **1,638,141** | **100.0%** | - Domestic sales of steel pipes accounted for approximately **23.1%** of total steel pipe revenue (H1 2024: 20.9%), while overseas sales accounted for approximately **76.9%** (H1 2024: 79.1%)[61](index=61&type=chunk) - Gross profit from the steel pipe business was approximately **RMB 235,800,000**, a **23.1% year-on-year decrease**, with an overall gross profit margin of approximately **18.7%**, similar to H1 2024[67](index=67&type=chunk) - Revenue from property development and investment was approximately **RMB 126,200,000**, compared to zero in H1 2024, mainly from property sales of Jincheng Phase II[69](index=69&type=chunk) - Other income and gains were approximately **RMB 135,800,000**, a **332.8% year-on-year increase**, primarily due to the gain on disposal of a subsidiary and the write-off of principal and interest portions of fixed-rate bonds and notes[71](index=71&type=chunk) - Administrative expenses were approximately **RMB 139,300,000**, a **43.8% year-on-year increase**, mainly due to higher research and development expenses[71](index=71&type=chunk) - Other expenses were approximately **RMB 6,100,000**, a **92.7% year-on-year decrease**, mainly due to reduced write-offs and impairment of other receivables[71](index=71&type=chunk) [Business Review](index=30&type=section&id=Business%20Review) The steel pipe business remains the Group's core, with approximately 202,000 tons of new orders received and 215,000 tons delivered in H1 2025; in property development, sales revenue from Jincheng Phase II began to be recognized, and rental income remained stable - The steel pipe business is the Group's core business, being one of China's largest manufacturers of longitudinally submerged arc welded pipes, with products widely used in large-scale onshore and offshore oil and gas pipeline projects and infrastructure projects[73](index=73&type=chunk)[77](index=77&type=chunk) - During the period, approximately **202,000 tons of new steel pipe orders** were received, and approximately **215,000 tons of welded steel pipes** were delivered[74](index=74&type=chunk) - The property development project, Jincheng Fortune Plaza, is a large-scale integrated commercial complex comprising offices, shops, apartments, and villas, with sales revenue from **Jincheng Phase II beginning to be recognized in 2022**[75](index=75&type=chunk)[76](index=76&type=chunk) [Future Plans and Prospects](index=31&type=section&id=Future%20Plans%20and%20Prospects) Facing global energy market uncertainties, the Group anticipates challenges in the oil and gas industry in 2025, yet China's focus on energy security, clean energy development, and the '14th Five-Year Plan' oil and gas pipeline construction targets present opportunities, with plans to expand insulation pipe business and diversify steel pipe applications to enlarge market share - The ongoing Russia-Ukraine conflict, tensions in the Middle East, global disinflation, a sluggish European economy, slowing US economic growth, and RMB depreciation pose challenges to the Group's international trade[78](index=78&type=chunk) - China's "14th Five-Year Plan" for a modern energy system targets a national oil and gas pipeline network scale of approximately **210,000 kilometers by 2025**, with pipeline transportation expected to remain in a stable growth period for the next 10 to 20 years, focusing on natural gas pipeline construction[80](index=80&type=chunk) - The establishment of China Oil & Gas Piping Network Corporation and the "National One Network" strategy have a positive impact on the Group as a qualified supplier[81](index=81&type=chunk) - China's natural gas consumption continues to grow, and the total mileage of long-distance natural gas pipelines is increasing, presenting opportunities for the Group as a natural gas welded pipe manufacturer[82](index=82&type=chunk) - The Group plans to actively expand its **insulation pipe business** and aims to broaden its customer base and market share by participating in more global oil and gas engineering projects and providing diversified steel pipe products for infrastructure and high-end construction engineering fields such as bridges, wind power, offshore platforms, and water pipes[83](index=83&type=chunk)[84](index=84&type=chunk) [Employees](index=35&type=section&id=Employees) As of June 30, 2025, the Group had 862 full-time employees and offers competitive compensation and benefits to retain talent - As of June 30, 2025, the Group had **862 full-time employees** (December 31, 2024: 858 employees)[85](index=85&type=chunk) - The Group offers a competitive remuneration package, including salaries, medical insurance, discretionary bonuses, and other benefits, to retain employees[85](index=85&type=chunk) [Foreign Exchange Risk](index=35&type=section&id=Foreign%20Exchange%20Risk) Most of the Group's business transactions are settled in RMB, while export sales are primarily denominated in USD; no formal hedging policy was adopted during the period - Most of the Group's business transactions are settled in **RMB**, while export sales are primarily denominated in **USD**[86](index=86&type=chunk) - No formal hedging policy or foreign currency instruments were adopted for hedging purposes during the period[86](index=86&type=chunk) [Interim Dividend](index=35&type=section&id=Interim%20Dividend) The Board does not recommend the payment of an interim dividend for H1 2025 - The Board does not recommend the payment of any interim dividend for the six months ended June 30, 2025 (H1 2024: nil)[87](index=87&type=chunk) [Liquidity, Financial Resources and Pledged Assets](index=35&type=section&id=Liquidity%2C%20Financial%20Resources%20and%20Pledged%20Assets) As of June 30, 2025, the Group's cash and bank balances were RMB 44,600 thousand, with a current ratio of 0.92; total borrowings decreased to RMB 1,697,400 thousand, with 56% repayable within one year, and various assets (including property, plant and equipment, leasehold land, and completed properties held for sale) were pledged Liquidity and Financial Ratios | Indicator | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Cash and bank balances | 44,600 | 53,300 | | Current ratio | 0.92 | 0.90 | | Total borrowings | 1,697,400 | 1,865,000 | | Gearing ratio | 27.0% | 28.7% | - As of June 30, 2025, the Group provided guarantees of **RMB 15,200,000** to property buyers for mortgage financing[88](index=88&type=chunk) - The Group's bank and other borrowings are secured by certain property, plant and equipment with a **total net book value of RMB 651,600,000**, leasehold land with a **total net book value of RMB 458,100,000**, and completed properties held for sale with a **total net book value of RMB 956,600,000**[90](index=90&type=chunk) - As of June 30, 2025, approximately **56% of total borrowings** are repayable within one year, and approximately **44%** are repayable after one year[92](index=92&type=chunk) Other Information [Major Investments, Material Acquisitions and Disposals of Subsidiaries, Associates and Joint Ventures](index=37&type=section&id=Major%20Investments%2C%20Material%20Acquisitions%20and%20Disposals%20of%20Subsidiaries%2C%20Associates%20and%20Joint%20Ventures) During the period, the Group had no other major investments, material acquisitions, or disposals of subsidiaries, associates, and joint ventures - During the period, the Group had **no other major investments, material acquisitions, or disposals** of subsidiaries, associates, and joint ventures[93](index=93&type=chunk) [Events After the Reporting Period](index=37&type=section&id=Events%20After%20the%20Reporting%20Period) As of the announcement date, there were no significant events after the reporting period that would materially affect the Group's operations and financial performance - As of the date of this announcement, there were **no significant events after June 30, 2025**, that could materially affect the Group's operations and financial performance[94](index=94&type=chunk) [Corporate Governance](index=37&type=section&id=Corporate%20Governance) The Group complied with all code provisions of the Corporate Governance Code during the reporting period, and the Board believes the structure where the Chairman and Executive Director, Mr. Chen Chang, also handles company leadership and operational duties does not impair the balance of power - The Company has complied with **all code provisions of the Corporate Governance Code** as set out in Appendix C1 to the Listing Rules throughout the six months ended June 30, 2025[95](index=95&type=chunk) - The Chairman and Executive Director, Mr. Chen Chang, also performs the roles of company leadership and operational duties, and the Board believes this structure provides strong and consistent leadership for the Group, facilitating effective planning and execution of business decisions and strategies[96](index=96&type=chunk) [Compliance with the Model Code for Securities Transactions](index=37&type=section&id=Compliance%20with%20the%20Model%20Code%20for%20Securities%20Transactions) All Directors confirmed compliance with the Model Code for Securities Transactions by Directors of Listed Issuers throughout the reporting period - Following specific enquiries made to all Directors, all Directors confirmed that they have complied with the **Model Code for Securities Transactions by Directors of Listed Issuers** as set out in Appendix C3 to the Listing Rules throughout the six months ended June 30, 2025[97](index=97&type=chunk) [Purchase, Redemption or Sale of the Company's Listed Securities](index=38&type=section&id=Purchase%2C%20Redemption%20or%20Sale%20of%20the%20Company%27s%20Listed%20Securities) During the period, neither the Company nor its subsidiaries purchased, redeemed, or sold any of the Company's listed securities - During the six months ended June 30, 2025, **neither the Company nor any of its subsidiaries purchased, redeemed, or sold any of the Company's listed securities**[98](index=98&type=chunk) [Audit Committee](index=38&type=section&id=Audit%20Committee) The Audit Committee reviewed the Group's unaudited condensed consolidated interim results for H1 2025 and discussed the adequacy and effectiveness of accounting principles, internal controls, risk management, and financial reporting systems - The Audit Committee has reviewed the Group's **unaudited condensed consolidated interim results** for the six months ended June 30, 2025[99](index=99&type=chunk) - The Audit Committee, together with the Company's management, reviewed the accounting principles and practices adopted by the Group and discussed and reviewed the adequacy and effectiveness of the Group's internal control system, risk management function, and financial reporting system[99](index=99&type=chunk) [Publication of Interim Results Announcement](index=38&type=section&id=Publication%20of%20Interim%20Results%20Announcement) This interim results announcement is available on the HKEX and Company websites, and the interim report containing all required information will be dispatched to shareholders and published in due course - This interim results announcement is available on the **HKEX website (http://www.hkexnews.hk)** and the **Company's website (http://www.pck.com.cn)**[100](index=100&type=chunk)

I. Company Overview [I.A. Basic Information](index=5&type=section&id=I.A.%20Basic%20Information) Guorui Health Industry Co., Ltd., incorporated in the Cayman Islands in 2012 and listed on the HKEX Main Board - The company changed its name to Guorui Health Industry Co., Ltd. in June 2022, formerly known as Guorui Properties Limited[7](index=7&type=chunk) - The ultimate holding company is Tonghe Properties Limited, wholly owned by Mr. Zhang Zhangsun, who is the ultimate beneficial owner[7](index=7&type=chunk) - The company's shares are listed on the Main Board of The Stock Exchange of Hong Kong Limited[8](index=8&type=chunk) [I.B. Principal Activities](index=5&type=section&id=I.B.%20Principal%20Activities) The Group's principal activities include property development, primary land development, property investment, and property management services - The Group is principally engaged in property development, provision of primary land construction and development services, property investment, and provision of property management and related services[8](index=8&type=chunk) [I.C. Basis of Preparation and Principal Accounting Policies](index=5&type=section&id=I.C.%20Basis%20of%20Preparation%20and%20Principal%20Accounting%20Policies) Condensed consolidated financial statements are prepared under IAS 34 and HKEX Listing Rules, primarily on a historical cost basis - The condensed consolidated financial statements are prepared in accordance with International Accounting Standard 34 Interim Financial Reporting and the disclosure requirements of Appendix D2 to the Listing Rules of The Stock Exchange of Hong Kong Limited[10](index=10&type=chunk) - The statements are prepared on a historical cost basis, except for investment properties and certain financial instruments measured at fair value[10](index=10&type=chunk) - The application of amendments to International Financial Reporting Standards in the current period had no significant impact on the financial position and performance[11](index=11&type=chunk) [I.D. Going Concern Assumption and Measures](index=6&type=section&id=I.D.%20Going%20Concern%20Assumption%20and%20Measures) The Group's financial statements are based on a going concern, with measures like debt renewal and asset disposal to improve liquidity - The condensed consolidated financial statements are prepared on the assumption that the Group will continue to operate on a going concern basis[12](index=12&type=chunk) - Measures adopted by the directors include renegotiating borrowing plans with banks, believing the Group will be able to renew borrowings upon maturity[15](index=15&type=chunk) - The Group plans to dispose of certain investment properties to improve financial position, liquidity, and cash flow, and implement cost control measures for selling and administrative expenses[15](index=15&type=chunk) II. Financial Data Overview [II.A. Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=2&type=section&id=II.A.%20Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) The Group reported RMB 324.18 million in revenue, RMB 4.37 million gross profit, and a significant net loss of RMB 170.02 million Key Data from Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (For the six months ended June 30) | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Revenue | 324,178 | 987,459 | | Gross Profit | 4,369 | 432,277 | | Other Gains/(Losses) | 20,136 | (30,013) | | Income Tax (Credit) | (18,317) | (60,719) | | Loss for the Period | (170,019) | (64,445) | | Loss Attributable to Owners of the Company for the Period | (225,179) | (58,659) | | Basic and Diluted (Loss) Per Share (RMB) | (0.05) | (1.32) | [II.B. Condensed Consolidated Statement of Financial Position](index=3&type=section&id=II.B.%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, total assets were RMB 32,005.86 million, total liabilities RMB 31,207.61 million, and equity RMB 9,703.51 million Key Data from Condensed Consolidated Statement of Financial Position (As of June 30) | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | **Assets** | | | | Property, Plant and Equipment | 241,098 | 244,763 | | Investment Properties | 13,481 | 13,481 | | Properties Held for Sale | 18,213,018 | 18,306,878 | | Trade and Other Receivables | 5,003,630 | 5,885,422 | | Cash and Bank Balances | 3,339,399 | 2,745,190 | | **Total Assets** | **32,005,860** | **32,365,627** | | **Liabilities** | | | | Trade and Other Payables | 7,320,157 | 8,501,284 | | Borrowings | 25,621,686 | 25,892,773 | | **Total Liabilities** | **31,207,606** | **31,311,905** | | **Equity** | | | | Share Capital | 3,520 | 3,520 | | Reserves | 9,699,992 | 9,925,171 | | **Total Shareholders' Equity** | **9,703,512** | **9,928,691** | [II.C. Condensed Consolidated Statement of Cash Flows](index=8&type=section&id=II.C.%20Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) Operating cash outflow was RMB 188.34 million, investing cash outflow RMB 8.37 million, and financing cash inflow RMB 38.96 million Key Data from Condensed Consolidated Statement of Cash Flows (For the six months ended June 30) | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Net Cash from/(used in) Operating Activities | (188,336) | (125,163) | | Net Cash used in Investing Activities | (8,373) | - | | Net Cash from Financing Activities | 38,958 | 38,517 | [II.D. Financial Notes](index=6&type=section&id=II.D.%20Financial%20Notes) Financial notes provide details on revenue, income tax, loss per share, and financial guarantees, supplementing performance understanding - Capitalized interest is calculated at annual rates ranging from **4.8% to 18%** (2024: 4.8% to 15%), with an average capitalization rate of **8.7%**[24](index=24&type=chunk) - As of June 30, 2025, the Group's outstanding guarantees for customer mortgages amounted to **RMB 1,953.7 million**[33](index=33&type=chunk) - As of June 30, 2025, the Group provided bank financing guarantees for related parties totaling **RMB 215.44 million**[34](index=34&type=chunk) [II.D.1. Revenue Analysis](index=6&type=section&id=II.D.1.%20Revenue%20Analysis) Total revenue for H1 2025 was RMB 324.18 million, comprising RMB 182.67 million from property development and RMB 139.44 million from leasing Timing of Revenue Recognition (For the six months ended June 30) | Revenue Source | At a point in time (RMB thousands) | Over time (RMB thousands) | Leasing (RMB thousands) | Total Revenue (RMB thousands) | | :--- | :--- | :--- | :--- | :--- | | Property Development | 182,672 | - | - | 182,672 | | Primary Land Construction and Development | - | 2,064 | - | 2,064 | | Property Management | - | - | - | 2 | | Leasing | - | - | 139,440 | 139,440 | | **Total** | **182,672** | **2,064** | **139,440** | **324,178** | [II.D.2. Income Tax (Credit)](index=10&type=section&id=II.D.2.%20Income%20Tax%20%28Credit%29) Income tax credit for H1 2025 was RMB 18.32 million, a significant decrease, with China corporate income tax at 25% Income Tax (Credit) (For the six months ended June 30) | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Current tax - China corporate income tax | 78 | (41) | | Current tax - Land appreciation tax | 6,682 | 15,347 | | Deferred tax | (25,077) | (76,025) | | **Income tax (credit)** | **(18,317)** | **(60,719)** | - China corporate income tax is calculated at a rate of **25%**, and land appreciation tax is accrued at progressive rates on the appreciation value[26](index=26&type=chunk)[27](index=27&type=chunk) [II.D.3. (Loss) Per Share](index=10&type=section&id=II.D.3.%20%28Loss%29%20Per%20Share) Loss attributable to owners for H1 2025 was RMB 225.18 million, resulting in a basic and diluted loss per share of RMB 0.05 Calculation of (Loss) Per Share (For the six months ended June 30) | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | (Loss) used in calculating basic and diluted (loss) per share | (225,179) | (58,659) | | Weighted average number of ordinary shares (thousands of shares) | 4,444,418 | 4,444,418 | [II.D.4. Financial Guarantees and Contingent Liabilities](index=13&type=section&id=II.D.4.%20Financial%20Guarantees%20and%20Contingent%20Liabilities) Outstanding customer mortgage guarantees totaled RMB 1,953.7 million, with additional RMB 215.44 million in related party bank financing guarantees - As of June 30, 2025, the Group's outstanding guarantees for customer mortgages amounted to **RMB 1,953.7 million**[33](index=33&type=chunk) - As of June 30, 2025, the Group provided bank financing guarantees for related parties Jiangmen Yinghuiwan Real Estate Co., Ltd. and Shantou Huirui Hotel Management Co., Ltd., totaling **RMB 215.44 million**[34](index=34&type=chunk) III. Chairman's Statement [III.A. Interim Results Review](index=14&type=section&id=III.A.%20Interim%20Results%20Review) H1 2025 revenue was RMB 324.2 million, with property development contributing RMB 182.7 million - During the reporting period, the Group's revenue was **RMB 324.2 million**[37](index=37&type=chunk) - Revenue from property development amounted to **RMB 182.7 million**[37](index=37&type=chunk) [III.B. Market Review](index=14&type=section&id=III.B.%20Market%20Review) Real estate policies eased, with governments relaxing restrictions and introducing financial measures to stimulate market recovery - Industry policies focus on building a new real estate development model, promoting stable, healthy, and high-quality market development, and driving a rebound from decline[38](index=38&type=chunk) - Strict policies such as purchase, sale, and loan restrictions are gradually being relaxed, with the central bank and financial regulators continuously introducing various financial measures to lower homebuying thresholds and ease residents' mortgage burdens[38](index=38&type=chunk) [III.C. Business Operations](index=14&type=section&id=III.C.%20Business%20Operations) The Group paused property development investment, focusing on sales, debt reduction, asset disposal, and business transformation, with urban renewal projects as future profit drivers - The Group paused new investments, fully promoting sales, shrinking property development scale, adhering to debt reduction, and accelerating asset disposal to improve liquidity[39](index=39&type=chunk) - The Group is fully committed to ensuring project completion and delivery, while accelerating its transformation pace[39](index=39&type=chunk) - During the reporting period, the Group's total rental income was **RMB 139.4 million**, which decreased due to the impact of e-commerce and the downturn in the real economy[40](index=40&type=chunk) [III.C.1. Property Development Business](index=14&type=section&id=III.C.1.%20Property%20Development%20Business) H1 2025 saw the Group pause new property investments, focusing on sales, debt reduction, asset disposal, and ensuring project completion and delivery - The Group adapted to market changes by pausing new investments, fully promoting sales to capture market share within the limited market capacity[39](index=39&type=chunk) - The Group further scaled back property development, adhering to debt reduction and accelerating asset disposal to improve liquidity[39](index=39&type=chunk) [III.C.2. Investment Property Business](index=14&type=section&id=III.C.2.%20Investment%20Property%20Business) Total rental income was RMB 139.4 million, impacted by e-commerce and economic downturn, despite owning 9 prime investment properties totaling 745,289 sq.m. - During the reporting period, the Group's total rental income was **RMB 139.4 million**, which decreased due to the impact of e-commerce and the downturn in the real economy[40](index=40&type=chunk) - The Group owns **9** self-held investment properties in prime locations in first- and second-tier cities like Beijing and Shenzhen, with a total planned GFA of approximately **745,289 square meters**[40](index=40&type=chunk) [III.C.3. Land Bank and Urban Renewal](index=15&type=section&id=III.C.3.%20Land%20Bank%20and%20Urban%20Renewal) As of June 30, 2025, the Group's land bank totaled 6.3871 million sq.m., with urban renewal projects, particularly in Shenzhen, expected to drive future profits - As of June 30, 2025, the Group's total planned GFA of land bank was **6.3871 million square meters**[41](index=41&type=chunk) - The Group holds existing primary land development and urban renewal projects, with unconfirmed primary development and urban renewal projects covering **5.811 million square meters**, of which **51.6%** are in Shenzhen[41](index=41&type=chunk) - Urban renewal projects require less capital and offer high profit margins, with cash flow expected from **H2 2025 to 2026**, becoming new profit drivers[41](index=41&type=chunk) [III.D. Capital Structure](index=15&type=section&id=III.D.%20Capital%20Structure) The Group optimizes its debt structure, reduces financing costs, and strengthens risk management to alleviate short-term repayment pressure - The Group continuously optimizes its debt structure, alleviates short-term repayment pressure, reduces financing costs, effectively manages exchange rate risks, and achieves effective debt reduction through communication with banks and financial institutions[42](index=42&type=chunk) - The Group further strengthens its risk management function, improves its financial risk monitoring system, and enhances risk warning and prevention[42](index=42&type=chunk) [III.E. Business Transformation](index=15&type=section&id=III.E.%20Business%20Transformation) The Group is gradually transitioning from property to health industry, focusing on elderly care, online health services, and regenerative medicine incubation - The Group is gradually scaling back its property business and steadily advancing its business transformation towards the health industry[43](index=43&type=chunk) - The Group will focus on exploring innovations in residential formats, developing industries such as elderly care communities, online health living, and regenerative medicine incubation[43](index=43&type=chunk) - The Group will comprehensively enhance its integrated operational and service capabilities by developing innovative businesses such as Guorui Hospital and online medical services, online elderly care services, and regenerative medicine[43](index=43&type=chunk) [III.F. Outlook](index=15&type=section&id=III.F.%20Outlook) H2 2025 expects increased real estate policy support, but the market remains challenging; long-term, the Group will adapt to intense competition and transition to health industry - The Group expects continued strong real estate policy support in **H2 2025**, but the market will remain in a bottoming-out phase, and rebuilding buyer confidence will take time[44](index=44&type=chunk) - Improving the financing environment for real estate enterprises is crucial; currently, the 'whitelist' policy has limited coverage, and the industry urgently needs financial policies to restore normal capital circulation[45](index=45&type=chunk) - In the long term, the real estate industry still has room for development but will enter a highly competitive landscape with differentiated development across cities, enterprises, and products[46](index=46&type=chunk) [III.F.1. Second Half Outlook](index=15&type=section&id=III.F.1.%20Second%20Half%20Outlook) H2 2025 expects intensified real estate policy support and full relaxation of restrictions, but the market remains challenging with low confidence and urgent funding needs - Looking ahead to **H2 2025**, real estate policy support is expected to intensify, with purchase, sale, and loan restrictions gradually and completely relaxed[44](index=44&type=chunk) - The real estate market is expected to remain in a bottoming-out phase, with investment confidence at a low, shrinking market scale, continued price declines, and urgent need for developers' liquidity pressure to be alleviated[44](index=44&type=chunk) - The industry urgently needs financial policies to restore normal capital circulation; currently, the 'whitelist' policy has limited coverage and cannot effectively improve developers' cash flow[45](index=45&type=chunk) [III.F.2. Long-Term Industry Outlook](index=16&type=section&id=III.F.2.%20Long-Term%20Industry%20Outlook) Long-term, real estate has growth potential but faces differentiation across cities, companies, and products, leading to intense competition - With China's urbanization and improved per capita housing, the real estate industry still has development potential, but it will no longer be universal, instead developing through continuous differentiation[46](index=46&type=chunk) - City differentiation is evident, with properties in high-quality cities showing strong resilience, while those in weaker cities face significant price reductions and immense inventory pressure[46](index=46&type=chunk) - The future real estate industry will enter a highly competitive landscape where the fittest survive, requiring enterprises to continuously improve in corporate image, product quality, comprehensive services, and operational management capabilities[47](index=47&type=chunk) [III.F.3. Future Development Strategy](index=16&type=section&id=III.F.3.%20Future%20Development%20Strategy) The Group will adapt to the industry downturn by enhancing services, managing debt, improving competitiveness, and transitioning to the health industry - The Group will continue operating during the current industry downturn, while adapting to industry changes, improving both internal and external aspects, and continuously enhancing corporate and product competitiveness from multiple perspectives[47](index=47&type=chunk) - In the future, the Group will continuously enhance service levels and operational management capabilities, adjust debt structure, mitigate debt risks, strive to reduce financing costs, and improve the Group's core competitiveness[47](index=47&type=chunk) - In a complex and challenging market environment, the Group will transition towards the health industry, exploring its vast market potential[47](index=47&type=chunk) IV. Management Discussion and Analysis [IV.A. Business Review](index=18&type=section&id=IV.A.%20Business%20Review) H1 2025 saw RMB 324.2 million revenue, RMB 4.4 million gross profit, and RMB 170.0 million net loss, with contracted sales down 45.0% to RMB 651.1 million - For the six months ended June 30, 2025, the Group's revenue was **RMB 324.2 million**, gross profit was **RMB 4.4 million**, and net loss was **RMB 170.0 million**[50](index=50&type=chunk) - The Group's contracted sales in **H1 2025** were approximately **RMB 651.1 million**, a year-on-year decrease of **45.0%**[51](index=51&type=chunk)[52](index=52&type=chunk) - The Group actively undertakes primary land development projects, urban renewal, and 'three old' renovation projects, with significant progress in both Beijing and Shenzhen[56](index=56&type=chunk) [IV.A.1. Contracted Sales](index=18&type=section&id=IV.A.1.%20Contracted%20Sales) H1 2025 contracted sales were RMB 651.1 million, down 45.0% year-on-year, with Beijing contributing 87.7% (RMB 571.3 million) Contracted Sales by Region (For the six months ended June 30) | City | 2025 Contracted Sales (RMB millions) | 2025 % of Total Contracted Sales | 2024 Contracted Sales (RMB millions) | 2024 % of Total Contracted Sales | | :--- | :--- | :--- | :--- | :--- | | Beijing | 571.3 | 87.7 | 836.8 | 70.7 | | Shenyang | 18.5 | 2.8 | 162.1 | 13.7 | | Foshan | 17.8 | 2.7 | 7.0 | 0.6 | | Guizhou | 17.7 | 2.7 | 1.3 | 0.1 | | **Total** | **651.1** | **100.0** | **1,184.1** | **100.0** | - Sales in **H1 2025** were **RMB 651.1 million**, a year-on-year decrease of **45.0%** compared to **RMB 1,184.1 million** in **H1 2024**[52](index=52&type=chunk) [IV.A.2. Primary Land Development and Urban Renewal Projects](index=20&type=section&id=IV.A.2.%20Primary%20Land%20Development%20and%20Urban%20Renewal%20Projects) The Group actively pursues primary land development and urban renewal projects, with significant progress in Beijing and Shenzhen, including demolition and planning - The Group actively undertakes primary land development projects, urban renewal, and 'three old' renovation projects to secure potential land reserve supply[56](index=56&type=chunk) - Beijing Qinian Street West project has a planned GFA of approximately **474,304 square meters**, with plots 4 and 5 having completed demolition and progressing towards market entry[57](index=57&type=chunk) - Shenzhen Xikeng Community urban renewal project has a planned GFA of approximately **3 million square meters**; Phase 1, covering **0.53 million square meters** with a planned GFA of approximately **1.2 million square meters**, has completed project approval and initiated demolition negotiations[58](index=58&type=chunk) [IV.A.2.a. Beijing Urban Renewal Project](index=20&type=section&id=IV.A.2.a.%20Beijing%20Urban%20Renewal%20Project) Since September 2007, the Group has developed Beijing's Qinian Street West project (474,304 sq.m.), with plots 4 and 5 now demolished and progressing to market - The Group is undertaking primary land development for the Qinian Street West project in Beijing, located west of Qinian Street, less than one kilometer from Tiananmen Square[57](index=57&type=chunk) - The project has a planned GFA of approximately **474,304 square meters**, comprising five plots, with plots 4 and 5 having completed demolition and progressing towards market entry[57](index=57&type=chunk) [IV.A.2.b. Shenzhen Urban Renewal Project](index=20&type=section&id=IV.A.2.b.%20Shenzhen%20Urban%20Renewal%20Project) Shenzhen Dachao Shan Construction is renewing Xikeng Community (3 million sq.m. planned GFA); Phase 1 is approved, and demolition negotiations for the first unit have begun - Shenzhen Dachao Shan Construction Co., Ltd. signed an urban renewal cooperation agreement with Shenzhen Longgang District Xikeng Shareholding Cooperative Company to renew Xikeng Community, with a planned GFA of approximately **3 million square meters**[58](index=58&type=chunk) - Phase 1 covers **0.53 million square meters** with a planned GFA of approximately **1.2 million square meters**, having completed project approval and planning documents[58](index=58&type=chunk) - Integrated with the construction plan for Xikeng Station on Metro Line 16 Phase 2, the Group has adjusted the special planning scheme and fully initiated demolition negotiations for the first renewal unit[58](index=58&type=chunk) [IV.B. Financial Review](index=21&type=section&id=IV.B.%20Financial%20Review) H1 2025 revenue decreased 67.2% to RMB 324.2 million, gross profit fell to RMB 4.4 million, and loss attributable to owners increased to RMB 225.2 million - For the six months ended June 30, 2025, the Group's revenue was **RMB 324.2 million**, a **67.2%** decrease from **RMB 987.5 million** in the prior year period[59](index=59&type=chunk) - Gross profit decreased from **RMB 432.3 million** in the prior year period to **RMB 4.4 million**, primarily due to a significant reduction in property development revenue[61](index=61&type=chunk) - Loss attributable to owners of the Company was **RMB 225.2 million**, an increase of **RMB 166.5 million** from **RMB 58.7 million** in the prior year period[62](index=62&type=chunk) [IV.B.1. Revenue](index=21&type=section&id=IV.B.1.%20Revenue) H1 2025 revenue was RMB 324.2 million, a 67.2% decrease, with property development revenue down 76.9% to RMB 182.7 million - For the six months ended June 30, 2025, the Group's revenue was **RMB 324.2 million**, a **67.2%** decrease from **RMB 987.5 million** in the prior year period[59](index=59&type=chunk) - Property development revenue was **RMB 182.7 million**, a **76.9%** decrease from the prior year period, mainly due to reduced completion and sales area[59](index=59&type=chunk) [IV.B.2. Cost of Sales and Services](index=21&type=section&id=IV.B.2.%20Cost%20of%20Sales%20and%20Services) H1 2025 cost of sales and services was RMB 319.8 million, down 42.4% year-on-year, mainly due to reduced property development completion - For the six months ended June 30, 2025, the Group's cost of sales and services was **RMB 319.8 million**, a **42.4%** decrease from the prior year period[60](index=60&type=chunk) - The decrease in cost of sales and services was primarily due to reduced completion and delivery area in the property development segment[60](index=60&type=chunk) [IV.B.3. Gross Profit](index=21&type=section&id=IV.B.3.%20Gross%20Profit) H1 2025 gross profit was RMB 4.4 million, down from RMB 432.3 million, primarily due to significantly lower property development revenue - For the six months ended June 30, 2025, the Group's gross profit was **RMB 4.4 million**, compared to **RMB 432.3 million** in the prior year period[61](index=61&type=chunk) - The significant decrease in gross profit was primarily due to a substantial reduction in property development revenue[61](index=61&type=chunk) [IV.B.4. Loss Attributable to Owners of the Company](index=21&type=section&id=IV.B.4.%20Loss%20Attributable%20to%20Owners%20of%20the%20Company) H1 2025 loss attributable to owners was RMB 225.2 million, an increase of RMB 166.5 million from RMB 58.7 million year-on-year - For the six months ended June 30, 2025, the loss attributable to owners of the Company was **RMB 225.2 million**, an increase of **RMB 166.5 million** from **RMB 58.7 million** in the prior year period[62](index=62&type=chunk) [IV.B.5. Other Gains/(Losses)](index=21&type=section&id=IV.B.5.%20Other%20Gains%2F%28Losses%29) H1 2025 saw other gains of RMB 20.1 million, a reversal from RMB 30.0 million losses, primarily due to USD bond exchange rate changes - For the six months ended June 30, 2025, other gains were **RMB 20.1 million**, compared to other losses of **RMB 30.0 million** for the six months ended June 30, 2024[63](index=63&type=chunk) - This was mainly due to changes in USD bond exchange rates[63](index=63&type=chunk) [IV.B.6. Other Income](index=22&type=section&id=IV.B.6.%20Other%20Income) H1 2025 other income decreased to RMB 1.3 million from RMB 1.6 million in the prior year period - Other income decreased from **RMB 1.6 million** for the six months ended June 30, 2024, to **RMB 1.3 million** for the six months ended June 30, 2025[64](index=64&type=chunk) [IV.B.7. Distribution and Selling Expenses](index=22&type=section&id=IV.B.7.%20Distribution%20and%20Selling%20Expenses) H1 2025 distribution and selling expenses decreased by RMB 19.1 million to RMB 43.3 million, mainly due to reduced sales revenue - Distribution and selling expenses decreased by **RMB 19.1 million** to **RMB 43.3 million** for the six months ended June 30, 2025, from **RMB 62.4 million** for the six months ended June 30, 2024[65](index=65&type=chunk) - This was mainly due to reduced sales revenue in the current year[65](index=65&type=chunk) [IV.B.8. Administrative Expenses](index=22&type=section&id=IV.B.8.%20Administrative%20Expenses) H1 2025 administrative expenses decreased by RMB 53.7 million to RMB 86.5 million, driven by organizational restructuring and operational optimization - Administrative expenses decreased by **RMB 53.7 million** to **RMB 86.5 million** for the six months ended June 30, 2025, from **RMB 140.2 million** for the six months ended June 30, 2024[66](index=66&type=chunk) - The decrease was mainly due to the Group's improved operational quality through organizational restructuring and optimization during the reporting period[66](index=66&type=chunk) [IV.B.9. Finance Costs](index=22&type=section&id=IV.B.9.%20Finance%20Costs) H1 2025 finance costs increased by RMB 0.5 million to RMB 39.0 million from RMB 38.5 million in the prior year period - Finance costs increased by **RMB 0.5 million** to **RMB 39.0 million** for the six months ended June 30, 2025, from **RMB 38.5 million** for the six months ended June 30, 2024[67](index=67&type=chunk) [IV.B.10. Income Tax Credit](index=22&type=section&id=IV.B.10.%20Income%20Tax%20Credit) H1 2025 income tax credit decreased to RMB 18.3 million from RMB 60.7 million, with corporate income tax at RMB 0.1 million and land appreciation tax at RMB 6.7 million - Income tax credit decreased from **RMB 60.7 million** for the six months ended June 30, 2024, to **RMB 18.3 million** for the six months ended June 30, 2025[68](index=68&type=chunk) - For the six months ended June 30, 2025, the Group's China corporate income tax and land appreciation tax were approximately **RMB 0.1 million** and **RMB 6.7 million**, respectively[68](index=68&type=chunk) [IV.B.11. Total Comprehensive Loss](index=22&type=section&id=IV.B.11.%20Total%20Comprehensive%20Loss) H1 2025 total comprehensive loss increased to RMB 170.0 million from RMB 64.4 million in the prior year period - The Group's total comprehensive loss increased from **RMB 64.4 million** for the six months ended June 30, 2024, to **RMB 170.0 million** for the six months ended June 30, 2025[69](index=69&type=chunk) [IV.C. Liquidity, Financial Resources and Funding](index=22&type=section&id=IV.C.%20Liquidity%2C%20Financial%20Resources%20and%20Funding) As of June 30, 2025, cash and bank balances increased to RMB 333.9 million, with total outstanding borrowings of RMB 22,594.6 million secured by various assets - As of June 30, 2025, the Group's cash, restricted bank deposits, and bank balances were approximately **RMB 333.9 million**, an increase from **RMB 201.9 million** as of December 31, 2024[70](index=70&type=chunk) - As of June 30, 2025, the Group's outstanding borrowings totaled **RMB 22,594.6 million**, comprising bank and other borrowings of **RMB 18,732.1 million** and senior notes of **RMB 3,862.5 million**[71](index=71&type=chunk) - As of June 30, 2025, pledged assets securing certain borrowings granted to the Group amounted to **RMB 25,553.1 million**[72](index=72&type=chunk) [IV.C.1. Cash Position](index=22&type=section&id=IV.C.1.%20Cash%20Position) As of June 30, 2025, cash, restricted bank deposits, and bank balances increased to RMB 333.9 million from RMB 201.9 million - As of June 30, 2025, the Group's cash, restricted bank deposits, and bank balances were approximately **RMB 333.9 million**, compared to **RMB 201.9 million** as of December 31, 2024[70](index=70&type=chunk) [IV.C.2. Borrowings](index=23&type=section&id=IV.C.2.%20Borrowings) As of June 30, 2025, total outstanding borrowings were RMB 22,594.6 million, including RMB 18,732.1 million in bank loans and RMB 3,862.5 million in senior notes - As of June 30, 2025, the Group's outstanding borrowings totaled **RMB 22,594.6 million**[71](index=71&type=chunk) - Borrowings include bank and other borrowings of **RMB 18,732.1 million** and senior notes of **RMB 3,862.5 million**[71](index=71&type=chunk) [IV.C.3. Pledged Assets](index=23&type=section&id=IV.C.3.%20Pledged%20Assets) Certain Group borrowings are secured by properties under development, properties held for sale, investment properties, and other assets, totaling RMB 25,553.1 million - Certain of the Group's borrowings are secured by properties under development for sale, properties held for sale, investment properties, prepaid lease payments, property, plant and equipment, and restricted bank deposits[72](index=72&type=chunk) - As of June 30, 2025, pledged assets securing certain borrowings granted to the Group amounted to **RMB 25,553.1 million**[72](index=72&type=chunk) [IV.C.4. Financial Guarantees and Contingent Liabilities](index=23&type=section&id=IV.C.4.%20Financial%20Guarantees%20and%20Contingent%20Liabilities) Outstanding customer mortgage guarantees totaled RMB 1,953.7 million, with additional RMB 215.44 million in related party bank financing guarantees - As of June 30, 2025, the Group's outstanding guarantees for customer mortgages amounted to **RMB 1,953.7 million**[73](index=73&type=chunk) - As of June 30, 2025, the Group provided bank financing guarantees for related parties Jiangmen Yinghuiwan Real Estate Co., Ltd. and Shantou Huirui Hotel Management Co., Ltd., totaling **RMB 215.44 million**[34](index=34&type=chunk) [IV.C.5. Future Plans for Material Investments or Capital Assets](index=23&type=section&id=IV.C.5.%20Future%20Plans%20for%20Material%20Investments%20or%20Capital%20Assets) The Group plans to continue property development and land acquisition, funded by internal resources and bank borrowings, with no other material investment plans disclosed - The Group will continue to invest in property development projects and acquire suitable land plots in selected cities, if deemed appropriate[75](index=75&type=chunk) - Internal resources and bank borrowings are expected to be sufficient to meet necessary funding requirements[75](index=75&type=chunk) - As of the date of this announcement, the Group has no other future material investment plans or capital assets[75](index=75&type=chunk) [IV.D. Employees and Remuneration Policy](index=23&type=section&id=IV.D.%20Employees%20and%20Remuneration%20Policy) H1 2025 saw approximately 389 employees with RMB 47.6 million in costs, with remuneration including salaries, bonuses, and welfare schemes - For the six months ended June 30, 2025, the Group had approximately **389** employees, incurring employee costs of approximately **RMB 47.6 million**[76](index=76&type=chunk) - Employee remuneration generally includes salaries and performance bonuses, and participation in various employee welfare schemes such as housing provident fund, pension, and medical care[76](index=76&type=chunk) V. Corporate Governance and Other Information [V.A. Interim Dividend](index=24&type=section&id=V.A.%20Interim%20Dividend) The Board has decided not to declare an interim dividend to shareholders - The Board of Directors has decided not to declare an interim dividend to shareholders[77](index=77&type=chunk) [V.B. Corporate Governance Practices](index=24&type=section&id=V.B.%20Corporate%20Governance%20Practices) The Company generally complied with the Corporate Governance Code, with deviations regarding combined Chairman/CEO roles and lack of directors' legal liability insurance - The Company has complied with the code provisions of the Corporate Governance Code set out in Appendix C1 to the Listing Rules for the six months ended June 30, 2025[78](index=78&type=chunk) - Deviations include the combined roles of Chairman and Chief Executive Officer, which the Company believes benefits business operations without negative impact[78](index=78&type=chunk) - Another deviation is that the Company has not yet arranged adequate insurance coverage for directors' legal liabilities, as no insurance with reasonable premiums and sufficient compensation was found in the market[79](index=79&type=chunk) [V.C. Non-Compliance with Listing Rules](index=24&type=section&id=V.C.%20Non-Compliance%20with%20Listing%20Rules) Following a director's resignation, the Company's independent non-executive director count and Audit Committee composition fell below Listing Rule minimums, and suitable replacements are being sought - Following Mr. Yuan Hao's resignation as an independent non-executive director on June 10, 2025, the Company has only **two** independent non-executive directors, with both the number and proportion falling below the minimum requirements of Listing Rules **3.10(1)** and **3.10A**[80](index=80&type=chunk)[81](index=81&type=chunk) - Due to the insufficient number of independent non-executive directors, the Company also failed to comply with Listing Rule **3.21** regarding the minimum number and composition of the Audit Committee[81](index=81&type=chunk) - The Company will make its best efforts to identify suitable candidates to comply with the Listing Rules as soon as possible, aiming to complete this within **three months**[81](index=81&type=chunk) [V.D. Compliance with the Model Code for Securities Transactions by Directors of Listed Issuers](index=25&type=section&id=V.D.%20Compliance%20with%20the%20Model%20Code%20for%20Securities%20Transactions%20by%20Directors%20of%20Listed%20Issuers) The Company adopted the Model Code for directors' securities transactions, and all directors confirmed compliance during the reporting period - The Company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers set out in Appendix C3 to the Listing Rules as its own code of conduct for directors' securities transactions[82](index=82&type=chunk) - Following specific inquiries with all directors, each director confirmed compliance with the Model Code for the six months ended June 30, 2025[82](index=82&type=chunk) [V.E. Purchase, Sale or Redemption of the Company's Listed Securities](index=26&type=section&id=V.E.%20Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company%27s%20Listed%20Securities) Neither the Company nor its subsidiaries purchased, sold, or redeemed any listed securities during H1 2025, except as disclosed - For the six months ended June 30, 2025, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities, except as disclosed in this announcement[83](index=83&type=chunk) [V.F. Audit Committee](index=26&type=section&id=V.F.%20Audit%20Committee) The Audit Committee reviewed H1 2025 unaudited interim financial results but currently fails to meet Listing Rule minimums due to an independent non-executive director's resignation - The Company has established its Audit Committee in accordance with Listing Rule **3.21** and code provision D.3 of the Corporate Governance Code[84](index=84&type=chunk) - The Group's unaudited interim financial results for the six months ended June 30, 2025, have been reviewed by the Audit Committee[84](index=84&type=chunk) - Following Mr. Yuan Hao's resignation as an independent non-executive director, the Audit Committee now comprises **two** independent non-executive directors, which does not meet the minimum requirements of the Listing Rules[84](index=84&type=chunk) [V.G. Post Balance Sheet Events](index=26&type=section&id=V.G.%20Post%20Balance%20Sheet%20Events) As of this announcement, no material post balance sheet events occurred after June 30, 2025, beyond those disclosed - Except as disclosed in this announcement, the Group has not undertaken any material post balance sheet events from June 30, 2025, up to the date of this announcement[85](index=85&type=chunk) [V.H. Publication of Interim Results and Report](index=26&type=section&id=V.H.%20Publication%20of%20Interim%20Results%20and%20Report) This announcement is published on the HKEX and Company websites; the full interim report for H1 2025 will be dispatched to shareholders and published online - This announcement is published on the HKEX website and the Company's website[86](index=86&type=chunk) - The interim report for the six months ended June 30, 2025, containing all Company information, will be dispatched to shareholders and published on the HKEX and the Company's respective websites in due course[86](index=86&type=chunk)

[Financial Summary](index=1&type=section&id=%E8%B2%A1%E5%8B%99%E6%91%98%E8%A6%81) [Key Financial Data](index=1&type=section&id=1.1%20%E9%97%9C%E9%8D%B5%E8%B2%A1%E5%8B%99%E6%95%B8%E6%93%9A) Huashi Group Holdings Limited achieved significant growth in revenue, gross profit, and profit for the period, with net profit up 49.6% year-on-year for H1 2025 Six-Month Financial Summary Ended June 30 | Indicator | 2025 (RMB million) | 2024 (RMB million) | Year-on-year Change | |---|---|---|---| | Revenue | 155.4 | 123.2 | 26.1% | | Gross Profit | 108.0 | 75.0 | 44.0% | | Profit Before Income Tax | 65.0 | 44.1 | 47.4% | | Profit for the Period | 53.7 | 35.9 | 49.6% | | Adjusted Net Profit | 53.7 | 35.9 | 49.6% | [Interim Condensed Consolidated Financial Statements](index=2&type=section&id=%E4%B8%AD%E6%9C%9F%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8) [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=2&type=section&id=2.1%20%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E6%90%8D%E7%9B%8A%E5%8F%8A%E5%85%B6%E4%BB%96%E5%85%A8%E9%9D%A2%E6%94%B6%E7%9B%8A%E8%A1%A8) For H1 2025, the company's revenue grew 26.1% to RMB155,355 thousand, gross profit increased 44.0%, and profit for the period rose 49.6% to RMB53,720 thousand Interim Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | |---|---|---| | Revenue | 155,355 | 123,245 | | Cost of Services | (47,393) | (48,260) | | Gross Profit | 107,962 | 74,985 | | Profit for the Period | 53,720 | 35,900 | | Basic and Diluted Earnings Per Share (RMB cents) | 6.97 | 4.66 | [Condensed Consolidated Statement of Financial Position](index=3&type=section&id=2.2%20%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81%E8%A1%A8) As of June 30, 2025, total assets increased to RMB683,089 thousand, total liabilities to RMB286,125 thousand, and net assets to RMB396,964 thousand, with significant growth in trade receivables and payables Interim Condensed Consolidated Statement of Financial Position | Indicator | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | |---|---|---| | Total Assets | 683,089 | 522,652 | | Total Liabilities | 286,125 | 179,408 | | Net Assets | 396,964 | 343,244 | | Trade Receivables | 343,897 | 203,236 | | Trade Payables | 91,730 | 29,581 | [Notes to the Interim Condensed Consolidated Financial Statements](index=5&type=section&id=%E4%B8%AD%E6%9C%9F%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8%E9%99%84%E8%A8%BB) [General Information](index=5&type=section&id=3.1%20%E4%B8%80%E8%88%AC%E8%B3%87%E6%96%99) Huashi Group Holdings Limited, incorporated in the Cayman Islands, primarily engages in investment holding, with subsidiaries providing branding, advertising, and marketing services in China - The Company is incorporated in the Cayman Islands as an exempted company with limited liability, primarily engaged in investment holding[7](index=7&type=chunk) - The Group is principally engaged in providing branding, advertising, and marketing services, as well as advertising placement services in China[7](index=7&type=chunk) [Basis of Preparation](index=5&type=section&id=3.2%20%E7%B7%A8%E8%A3%BD%E5%9F%BA%E6%BA%96) The interim condensed consolidated financial statements are prepared under HKAS 34 and comply with HKEX Listing Rules, with no material revisions to management's judgments or estimates - The interim condensed consolidated financial statements are prepared in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting" issued by the Hong Kong Institute of Certified Public Accountants[8](index=8&type=chunk) - There have been no material revisions to the nature and amounts of estimates reported in prior periods[8](index=8&type=chunk) [Accounting Policies](index=6&type=section&id=3.3%20%E6%9C%83%E8%A8%88%E6%94%BF%E7%AD%96) The Group applies the same accounting policies as in its 2024 annual financial statements, with new amendments effective in 2025, such as HKAS 21, having no significant impact - The Group has applied the same accounting policies and methods of computation as in its 2024 annual financial statements[10](index=10&type=chunk) - The new amendment "Lack of Exchangeability" (Amendments to HKAS 21) effective from January 1, 2025, has no significant impact on the interim condensed consolidated financial statements[11](index=11&type=chunk)[12](index=12&type=chunk)[14](index=14&type=chunk) [Revenue](index=7&type=section&id=3.4%20%E6%94%B6%E7%9B%8A) The Group's revenue, primarily from branding, advertising, and marketing services in China, totaled RMB155,355 thousand for H1 2025, with significant growth in advertising placement services - All the Group's revenue is generated from China, and no single customer's revenue accounts for over **10%** of total revenue[15](index=15&type=chunk)[16](index=16&type=chunk) [Sources of Revenue and Geographical Distribution](index=7&type=section&id=3.4.1%20%E6%94%B6%E7%9B%8A%E4%BE%86%E6%BA%90%E8%88%87%E5%9C%B0%E7%90%86%E5%88%86%E4%BD%88) The Group's revenue is entirely generated from branding, advertising, and marketing services in China, with no single customer accounting for over 10% of total revenue - The Group is principally engaged in providing branding, advertising, and marketing services, as well as advertising placement services in China[15](index=15&type=chunk) - All the Group's revenue for the six months ended June 30, 2025, and 2024, was generated from China[15](index=15&type=chunk) - No external customer revenue from providing branding, advertising, and marketing services and advertising placement services accounted for over **10%** of the Group's total revenue[16](index=16&type=chunk) [Revenue by Category Analysis](index=7&type=section&id=3.4.2%20%E6%94%B6%E7%9B%8A%E9%A1%9E%E5%88%A5%E5%88%86%E6%9E%90) For H1 2025, advertising placement services revenue surged by 135.6% year-on-year, while online media advertising services revenue experienced a slight decrease Revenue by Category | Service Category | 2025 (RMB thousand) | 2024 (RMB thousand) | |---|---|---| | Branding Services | 52,579 | 50,004 | | Event Execution and Production Services | 31,037 | 27,345 | | Online Media Advertising Services | 17,790 | 19,942 | | Advertising Placement Services | 43,911 | 18,635 | | Rebates from Media Partners | 10,038 | 7,319 | | Total | 155,355 | 123,245 | [Timing of Revenue Recognition](index=8&type=section&id=3.4.3%20%E6%94%B6%E7%9B%8A%E7%A2%BA%E8%AA%8D%E6%99%82%E9%96%93) The Group recognizes revenue from services transferred over time and at a point in time, with both categories showing growth Timing of Revenue Recognition | Revenue Recognition Method | 2025 (RMB thousand) | 2024 (RMB thousand) | |---|---|---| | Services Transferred Over Time | 80,407 | 77,349 | | Services Transferred at a Point in Time | 74,948 | 45,896 | [Other Income and Gains, Net](index=8&type=section&id=3.5%20%E5%85%B6%E4%BB%96%E6%94%B6%E5%85%A5%E5%8F%8A%E6%94%B6%E7%9B%8A%E6%B7%A8%E9%A1%8D) Other income and gains, net, decreased to RMB364 thousand for H1 2025, primarily due to lower interest income, exchange gains, and no government grants Other Income and Gains, Net | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | |---|---|---| | Interest Income | 37 | 355 | | Government Grants | – | 354 | | Net Exchange Gains | 228 | 487 | - No government grants were received for the six months ended June 30, 2025[21](index=21&type=chunk) [Finance Costs](index=9&type=section&id=3.6%20%E8%B2%A1%E5%8B%99%E6%88%90%E6%9C%AC) Finance costs decreased year-on-year to RMB2,310 thousand for H1 2025, mainly attributable to lower interest on borrowings Finance Costs | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | |---|---|---| | Interest on Borrowings | 2,091 | 2,992 | | Interest on Lease Liabilities | 219 | 175 | [Profit Before Income Tax Expense](index=9&type=section&id=3.7%20%E9%99%A4%E6%89%80%E5%BE%97%E7%A8%85%E9%96%8B%E6%94%AF%E5%89%8D%E6%BA%A2%E5%88%A9) Several expense items, including depreciation of property, plant and equipment, net provision for expected credit losses on financial and contract assets, and staff costs, increased in the calculation of profit before income tax expense Items Deducted in Profit Before Income Tax Expense | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | |---|---|---| | Depreciation of Property, Plant and Equipment | 6,517 | 2,654 | | Net Provision for Expected Credit Losses on Financial and Contract Assets | 7,635 | 3,115 | | Staff Costs (including Directors' Emoluments) | 10,515 | 8,692 | [Income Tax Expense](index=10&type=section&id=3.8%20%E6%89%80%E5%BE%97%E7%A8%85%E9%96%8B%E6%94%AF) Income tax expense increased to RMB11,284 thousand for H1 2025, primarily due to the 25% corporate income tax rate for Chinese subsidiaries, with one high-tech enterprise enjoying a 15% preferential rate Income Tax Expense | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | |---|---|---| | Current Tax | 12,478 | 7,143 | | Deferred Tax | (1,194) | 1,055 | - The tax rate for the Company's Chinese subsidiaries is **25%**[24](index=24&type=chunk) - Huashi Zhongguang International Media (Wuhan) Co., Ltd., as a high-tech enterprise, enjoys a preferential income tax rate of **15%**[24](index=24&type=chunk) [Dividends](index=10&type=section&id=3.9%20%E8%82%A1%E6%81%AF) The company neither paid nor declared any dividends for the six months ended June 30, 2025, and 2024 - The Company neither paid nor declared any dividends for the six months ended June 30, 2025, and 2024[26](index=26&type=chunk) [Earnings Per Share](index=11&type=section&id=3.10%20%E6%AF%8F%E8%82%A1%E7%9B%88%E5%88%A9) Profit for the period attributable to owners of the company was RMB53,720 thousand for H1 2025, with basic and diluted earnings per share of RMB6.97 cents, an increase from the prior period Earnings Per Share Calculation Data | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | |---|---|---| | Profit for the Period Attributable to Owners of the Company | 53,720 | 35,900 | | Weighted Average Number of Shares in Issue | 770,650,000 | 770,650,000 | | Basic Earnings Per Share (RMB cents) | 6.97 | 4.66 | - Diluted earnings per share is the same as basic earnings per share as there were no potential dilutive ordinary shares outstanding during the reporting period[27](index=27&type=chunk) [Trade Receivables](index=11&type=section&id=3.11%20%E8%B2%BF%E6%98%93%E6%87%89%E6%94%B6%E6%AC%BE%E9%A0%85) As of June 30, 2025, total trade receivables increased to RMB343,897 thousand, with the majority being current, indicating an expanded accounts receivable balance Trade Receivables | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | |---|---|---| | Gross Trade Receivables | 366,013 | 217,717 | | Less: Provision for Impairment Losses on Trade Receivables | (22,116) | (14,481) | | Net Trade Receivables | 343,897 | 203,236 | Trade Receivables Aging Analysis (Due Date) | Aging Analysis (Due Date) | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | |---|---|---| | Not Yet Due | 313,622 | 200,152 | Trade Receivables Aging Analysis (Invoice Date) | Aging Analysis (Invoice Date) | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | |---|---|---| | Within 90 Days | 313,622 | 200,152 | [Trade Payables](index=12&type=section&id=3.12%20%E8%B2%BF%E6%98%93%E6%87%89%E4%BB%98%E6%AC%BE%E9%A0%85) As of June 30, 2025, total trade payables significantly increased to RMB91,730 thousand, with the largest portion due within 30 days Trade Payables Aging Analysis | Aging | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | |---|---|---| | Within 30 Days | 82,777 | 20,485 | | Total | 91,730 | 29,581 | [Borrowings](index=13&type=section&id=3.13%20%E5%80%9F%E6%AC%BE) As of June 30, 2025, total bank loans increased to RMB132,930 thousand, with the weighted average effective annual interest rate decreasing to 3.1%, and all loans guaranteed by the controlling shareholder and subsidiaries Borrowings | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | |---|---|---| | Bank Loans – Secured | 132,930 | 107,920 | | Carrying Amount Repayable: Within 1 Year | 124,950 | 93,920 | - As of June 30, 2025, the weighted average effective annual interest rate for borrowings was **3.1%** (December 31, 2024: **4.5%**)[31](index=31&type=chunk) - All bank loans are guaranteed by the Group's controlling shareholder and subsidiaries[31](index=31&type=chunk) [Share Capital](index=14&type=section&id=3.14%20%E8%82%A1%E6%9C%AC) As of June 30, 2025, the company's issued and fully paid share capital comprised 770,650,000 ordinary shares of USD0.05 each, totaling RMB276,515 thousand, with no changes during the period Share Capital | Item | Number | Amount (USD thousand) | Amount (RMB thousand) | |---|---|---|---| | Issued and Fully Paid Ordinary Shares | 770,650,000 | 38,533 | 276,515 | [Events After the Reporting Period](index=14&type=section&id=3.15%20%E5%A0%B1%E5%91%8A%E6%9C%9F%E5%AE%8C%E7%B5%90%E5%BE%8C%E4%BA%8B%E4%BB%B6) The Group had no significant disclosable events after the end of the reporting period - The Group had no significant disclosable events after the end of the reporting period[33](index=33&type=chunk) [Management Discussion and Analysis](index=15&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) [Business Review](index=15&type=section&id=4.1%20%E6%A5%AD%E5%8B%99%E5%9B%9E%E9%A1%A7) As a branding, advertising, and marketing service provider in Hubei, China, the Group maintained stable operations amid a complex global economy, deepening tech innovation, accelerating AI business incubation, and expanding through strategic partnerships, with total revenue growing 26.1% to RMB155.4 million - The Group is a branding, advertising, and marketing service provider located in Hubei Province, China, offering a full value chain of services from market research to project execution[34](index=34&type=chunk) - The global economy remains under pressure, while China's GDP grew by **5.3%** year-on-year and total retail sales of consumer goods increased by **5.0%** year-on-year, maintaining a stable and positive development trend in the domestic economy[35](index=35&type=chunk) - The Group maintained stable overall operations, continuously strengthening its professional service capabilities, consolidating business partnerships, and successfully hosting the "Caidian District 2025 Cultural Tourism Consumption Season Launch Ceremony"[36](index=36&type=chunk) - The Group is accelerating AI business incubation, with its first AI digital product, "Huashi • Flash BAO" digital human, having commenced internal testing, featuring IP image customization, AIGC video generation, and digital human interaction capabilities[37](index=37&type=chunk) - During the reporting period, the Group's profitability steadily improved, recording total revenue of **RMB155.4 million**, a **26.1%** year-on-year increase[38](index=38&type=chunk)[49](index=49&type=chunk) [Business Summary](index=15&type=section&id=4.1.1%20%E6%A5%AD%E5%8B%99%E6%91%98%E8%A6%81) Amid a complex global economy, Huashi Group achieved stable operations and enhanced profitability through professional services and AI innovation, launching its first AI digital product and signing strategic cooperation agreements - The Group is a branding, advertising, and marketing service provider located in Hubei Province, China, offering a full value chain of services from market research to project execution[34](index=34&type=chunk) - The global economy remains under pressure, while China's GDP grew by **5.3%** year-on-year and total retail sales of consumer goods increased by **5.0%** year-on-year[35](index=35&type=chunk) - The Group continuously strengthened its professional service capabilities, consolidated business partnerships, and successfully hosted the "Caidian District 2025 Cultural Tourism Consumption Season Launch Ceremony," achieving over **two million exposures**[36](index=36&type=chunk) - The Group is accelerating AI business incubation, with its first AI digital product, "Huashi • Flash BAO," having commenced internal testing, featuring IP image customization, AIGC video generation, and digital human interaction capabilities[37](index=37&type=chunk) - Strategic cooperation agreements were signed with a leading steel structure enterprise in China and a local government in Hubei Province to explore business models such as "new infrastructure + AI media" and digital economy industry incubation[38](index=38&type=chunk) - Total revenue for the reporting period was **RMB155.4 million**, with total contract value signed with customers amounting to **RMB715.1 million**, of which **96.2%** of services have been provided[38](index=38&type=chunk) [Branding Services](index=16&type=section&id=4.1.2%20%E5%93%81%E7%89%8C%E6%9C%8D%E5%8B%99) Branding services revenue grew 5.1% to RMB52.6 million, leveraging AI to boost creative efficiency and exploring 'government+enterprise+scenic area' models, successfully promoting Macheng Guifeng Mountain Scenic Area to 5A status - Revenue from branding services was **RMB52.6 million**, representing a year-on-year increase of **5.1%**[39](index=39&type=chunk) - AI technology applications are used to guide innovation in branding services, focusing on improving creative planning and marketing copywriting efficiency[40](index=40&type=chunk) - The Group explored a "government + enterprise + scenic area" cooperation model, successfully promoting Macheng Guifeng Mountain Scenic Area to be selected as a National 5A-level tourist attraction[40](index=40&type=chunk) [Online Media Advertising Services](index=17&type=section&id=4.1.3%20%E7%B7%9A%E4%B8%8A%E5%AA%92%E9%AB%94%E5%BB%A3%E5%91%8A%E6%9C%8D%E5%8B%99) Online media advertising services revenue decreased 10.8% to RMB17.8 million, but the Group continues to optimize advertising strategies with digitalization and AI, actively exploring AI digital human technology applications - Revenue from online media advertising services was **RMB17.8 million**, representing a year-on-year decrease of **10.8%**[41](index=41&type=chunk) - Advertising strategies and digital systems are optimized to enhance precise targeting, data management and analysis, and automated monitoring and evaluation capabilities[42](index=42&type=chunk) - The Group continues to explore AI digital human technology and its application prospects, gradually initiating functional and business adaptability tests[42](index=42&type=chunk) [Event Execution and Production Services](index=18&type=section&id=4.1.4%20%E6%B4%BB%E5%8B%95%E5%9F%B7%E8%A1%8C%E5%8F%8A%E8%A3%BD%E4%BD%9C%E6%9C%8D%E5%8B%99) Event execution and production services revenue grew 13.5% to RMB31.0 million, with the Group integrating traditional and digital interactive marketing, leveraging media resources and customized services to successfully host the 'Caidian District 2025 Cultural Tourism Consumption Season Launch Ceremony' - Revenue from event execution and production services was **RMB31.0 million**, representing a year-on-year increase of **13.5%**[43](index=43&type=chunk) - The Group integrates the advantages of traditional marketing and digital interactive marketing, utilizing a comprehensive media resource matrix to precisely reach potential users[44](index=44&type=chunk) - The "Caidian District 2025 Cultural Tourism Consumption Season Launch Ceremony" was successfully hosted, enhancing the fun of sightseeing through intelligent interactive devices such as AI check-in points[44](index=44&type=chunk) [Advertising Placement Services](index=18&type=section&id=4.1.5%20%E5%BB%A3%E5%91%8A%E6%8A%95%E6%94%BE%E6%9C%8D%E5%8B%99) Advertising placement services revenue surged 135.6% to RMB43.9 million, as the Group enhanced advertising and media operational efficiency through diversified placement strategies and expanded partner networks - Revenue from advertising placement services was **RMB43.9 million**, representing a year-on-year increase of **135.6%**[45](index=45&type=chunk) - Customers adopt diversified placement strategies targeting different audience characteristics through the platform, improving media operational efficiency and return on investment[46](index=46&type=chunk) - The Group actively expanded its partner list, continuously integrating media resources with different characteristics to meet personalized marketing demands and promote sustainable business development[46](index=46&type=chunk) [Business Outlook](index=19&type=section&id=4.2%20%E6%A5%AD%E5%8B%99%E5%B1%95%E6%9C%9B) The Group will focus on strengthening AI R&D, enhancing competitive advantages, expanding business scope, improving budget control for cost reduction and efficiency, and building a professional talent pipeline to solidify market position and drive revenue growth - Strengthen AI technology research and development and application, utilizing AI technology to reshape the media business matrix and explore more commercial scenarios that can be deeply empowered by AI[48](index=48&type=chunk) - Enhance industry competitive advantages, improving intelligent content creation, precise advertising placement, and full-scenario event execution efficiency to attract more strategic cooperation opportunities[48](index=48&type=chunk) - Expand business layout, consolidating advantages in the Hubei region while accelerating business expansion in economically active areas such as the Yangtze River Delta and the Guangdong-Hong Kong-Macao Greater Bay Area, and exploring overseas business opportunities[48](index=48&type=chunk) - Strengthen budget control, reduce costs, and enhance efficiency by focusing on core businesses, detailing cost items, optimizing resource allocation, cutting unnecessary expenses, and gradually promoting new technologies across all business processes to reduce labor costs[51](index=51&type=chunk) - Build a professional talent pipeline, recruiting technical and marketing talents, improving training systems and incentive mechanisms to provide talent support for business development[51](index=51&type=chunk) [Financial Review](index=20&type=section&id=4.3%20%E8%B2%A1%E5%8B%99%E5%9B%9E%E9%A1%A7) The Group's total revenue grew 26.1% to RMB155.4 million, with significant increases in gross profit and margin, and profit for the period up 49.6%; cash and cash equivalents decreased due to software platform development, capital expenditure surged, and the gearing ratio slightly rose - Total revenue increased by **26.1%** from **RMB123.2 million** for the six months ended June 30, 2024, to **RMB155.4 million** for the reporting period[49](index=49&type=chunk) - Gross profit increased from **RMB75.0 million** to **RMB108.0 million**, and gross profit margin increased from **60.8%** to **69.5%**[55](index=55&type=chunk) - Profit for the period was **RMB53.7 million**, with a net profit margin of **34.6%**, both significantly higher than the **RMB35.9 million** and **29.1%** in the same period last year[61](index=61&type=chunk) - Cash and cash equivalents decreased by **RMB19.7 million** to **RMB80.7 million**, primarily due to increased expenditure on software platform development[59](index=59&type=chunk) - Capital expenditure significantly increased from **RMB5.6 million** to **RMB44.5 million**, mainly due to increased expenditure on software platform development[67](index=67&type=chunk) - The gearing ratio increased from **34.3%** as of December 31, 2024, to **35.5%**, primarily due to an increase in the Group's total bank borrowings during the reporting period[63](index=63&type=chunk) [Total Revenue](index=21&type=section&id=4.3.1%20%E7%B8%BD%E6%94%B6%E7%9B%8A) Total revenue increased 26.1% to RMB155.4 million, driven by business expansion and new client relationships, particularly significant growth in advertising placement services - Total revenue increased by **26.1%** from **RMB123.2 million** for the six months ended June 30, 2024, to **RMB155.4 million** for the reporting period[49](index=49&type=chunk) - Revenue from "branding services," "event execution and production services," "advertising placement services," and "rebates from media partners" all showed significant year-on-year growth, stemming from the Group's active business expansion and establishment of solid cooperation relationships with more new customers[52](index=52&type=chunk) [Revenue Breakdown by Service Type](index=20&type=section&id=4.3.2%20%E6%8C%89%E6%9C%8D%E5%8B%99%E9%A1%9E%E5%9E%8B%E5%8A%83%E5%88%86%E7%9A%84%E6%94%B6%E7%9B%8A%E6%98%8E%E7%B4%B0) Advertising placement services and rebates from media partners saw significant revenue growth, accounting for 28.3% and 6.5% of total revenue respectively, while online media advertising services revenue slightly declined Revenue Breakdown by Service Type | Service Type | 2025 (RMB thousand) | Percentage of Total Revenue (%) | 2024 (RMB thousand) | Percentage of Total Revenue (%) | |---|---|---|---|---| | Branding Services | 52,579 | 33.8 | 50,004 | 40.6 | | Advertising Placement Services | 43,911 | 28.3 | 18,635 | 15.1 | | Rebates from Media Partners | 10,038 | 6.5 | 7,319 | 5.9 | | Online Media Advertising Services | 17,790 | 11.4 | 19,942 | 16.2 | - Revenue from "online media advertising services" slightly decreased year-on-year, mainly due to an increased proportion of online media advertising services provided to related advertising agencies, with direct costs for this business deducted from total revenue on a net basis[52](index=52&type=chunk) [Cost of Services](index=21&type=section&id=4.3.3%20%E6%9C%8D%E5%8B%99%E6%88%90%E6%9C%AC) Cost of services decreased to RMB47.4 million, primarily because direct costs for online media advertising services provided to related agencies were deducted from total revenue on a net basis - Cost of services decreased from **RMB48.3 million** for the six months ended June 30, 2024, to **RMB47.4 million** for the reporting period[53](index=53&type=chunk) - The main reason is that direct costs for online media advertising services provided to related advertising agencies in the online media advertising services business are deducted from total revenue, with revenue recognized on a net basis[53](index=53&type=chunk)[54](index=54&type=chunk) [Gross Profit and Gross Profit Margin](index=22&type=section&id=4.3.4%20%E6%AF%9B%E5%88%A9%E5%8F%8A%E6%AF%9B%E5%88%A9%E7%8E%87) Gross profit increased from RMB75.0 million to RMB108.0 million, with gross profit margin rising from 60.8% to 69.5%, driven by significant revenue growth and net recognition for advertising placement, media partner rebates, and online media advertising services - Gross profit increased from **RMB75.0 million** for the six months ended June 30, 2024, to **RMB108.0 million** for the reporting period[55](index=55&type=chunk) - Gross profit margin increased from **60.8%** for the six months ended June 30, 2024, to **69.5%** for the reporting period[55](index=55&type=chunk) - This is mainly due to significant revenue growth and net recognition of revenue for advertising placement services, rebates from media partners, and online media advertising services provided to related advertising agencies[55](index=55&type=chunk) [Other Income and Gains, Net](index=22&type=section&id=4.3.5%20%E5%85%B6%E4%BB%96%E6%94%B6%E5%85%A5%E5%8F%8A%E6%94%B6%E7%9B%8A%E6%B7%A8%E9%A1%8D) Other income and gains, net, decreased from RMB1.2 million to RMB0.4 million, mainly due to lower interest income, exchange gains, and no government grants during the reporting period - Other income and gains, net, decreased from **RMB1.2 million** for the six months ended June 30, 2024, to **RMB0.4 million** for the reporting period[56](index=56&type=chunk) - This was mainly due to lower interest income and exchange gains, as well as no government grants during the reporting period[56](index=56&type=chunk) [Selling and Marketing Expenses](index=22&type=section&id=4.3.6%20%E9%8A%B7%E5%94%AE%E5%8F%8A%E7%87%9F%E9%8A%B7%E9%96%8B%E6%94%AF) Selling and marketing expenses increased from RMB5.9 million to RMB9.2 million, primarily due to increased headcount in sales and media operations teams from business expansion, and higher depreciation of office equipment - Selling and marketing expenses increased from **RMB5.9 million** for the six months ended June 30, 2024, to **RMB9.2 million** for the reporting period[57](index=57&type=chunk) - This was mainly due to an increase in the number of employees in the sales team and media operations team as a result of business expansion, and an increase in depreciation expenses for office equipment[57](index=57&type=chunk) [Administrative Expenses](index=23&type=section&id=4.3.7%20%E8%A1%8C%E6%94%BF%E9%96%8B%E6%94%AF) Administrative expenses increased from RMB19.9 million to RMB24.2 million, mainly due to increased headcount in administrative and R&D teams from business expansion - Administrative expenses increased from **RMB19.9 million** for the six months ended June 30, 2024, to **RMB24.2 million** for the reporting period[58](index=58&type=chunk) - This was mainly due to an increase in salaries and daily expense reimbursements resulting from an increase in the number of employees in the administrative management team and R&D team due to business expansion[58](index=58&type=chunk) [Liquidity and Capital Resources](index=23&type=section&id=4.3.8%20%E6%B5%81%E5%8B%95%E8%B3%87%E9%87%91%E5%8F%8A%E8%B3%87%E6%9C%AC%E8%B3%87%E6%BA%90) As of June 30, 2025, cash and cash equivalents decreased to RMB80.7 million, primarily due to increased software platform development expenditure, with working capital mainly sourced from operating cash flow and borrowings - Cash and cash equivalents amounted to **RMB80.7 million**, a decrease of **RMB19.7 million** from **RMB100.4 million** as of December 31, 2024[59](index=59&type=chunk) - This was mainly due to increased expenditure on software platform development[59](index=59&type=chunk) - The Group primarily funds its operating needs through cash flows from operating activities and borrowings[59](index=59&type=chunk) [Income Tax Expense](index=23&type=section&id=4.3.9%20%E6%89%80%E5%BE%97%E7%A8%85%E9%96%8B%E6%94%AF) China corporate income tax expense increased to RMB11.3 million, mainly due to a smaller proportion of business from subsidiaries enjoying a 15% preferential income tax rate - China corporate income tax expense increased from **RMB8.2 million** for the six months ended June 30, 2024, to **RMB11.3 million** for the reporting period[60](index=60&type=chunk) - This was mainly due to a smaller proportion of business occurring in Group subsidiaries with a preferential income tax rate of **15%** during the reporting period compared to the six months ended June 30, 2024[60](index=60&type=chunk) [Profit for the Period](index=23&type=section&id=4.3.10%20%E5%A0%B1%E5%91%8A%E6%9C%9F%E5%85%A7%E6%BA%A2%E5%88%A9) Profit for the period was RMB53.7 million, a 49.6% year-on-year increase, with net profit margin rising to 34.6% Profit for the Period and Net Profit Margin | Indicator | 2025 (RMB million) | 2024 (RMB million) | |---|---|---| | Profit | 53.7 | 35.9 | | Net Profit Margin | 34.6% | 29.1% | [Capital Structure](index=23&type=section&id=4.3.11%20%E8%B3%87%E6%9C%AC%E6%9E%B6%E6%A7%8B) As of June 30, 2025, total borrowings were RMB132.9 million, and the gearing ratio increased to 35.5%, primarily due to higher total bank borrowings - The Company's authorized share capital is **USD50,000,000**, and its issued share capital is **USD38,532,500**, with no changes during the reporting period[62](index=62&type=chunk) - The Group's total borrowings amounted to **RMB132.9 million**, of which **94.0%** were classified as current liabilities[63](index=63&type=chunk) - The gearing ratio increased from **34.3%** as of December 31, 2024, to **35.5%**, primarily due to an increase in the Group's total bank borrowings during the reporting period[63](index=63&type=chunk) [Pledge of Assets](index=24&type=section&id=4.3.12%20%E8%B3%87%E7%94%A2%E6%8A%B5%E6%8A%BC) As of June 30, 2025, the Group had no pledged assets - As of June 30, 2025, the Group had no pledged assets[64](index=64&type=chunk) [Foreign Exchange Risk Management](index=24&type=section&id=4.3.13%20%E5%A4%96%E5%8C%AF%E9%A2%A8%E9%9A%AA%E7%AE%A1%E7%90%86) The Group's operations are primarily in China, with most transactions denominated and settled in RMB, and no financial instruments were used for hedging during the reporting period - The Group's business is primarily operated in China, and most transactions are denominated and settled in RMB[65](index=65&type=chunk) - During the reporting period, the Group did not use any financial instruments for hedging purposes[65](index=65&type=chunk) [Employees](index=24&type=section&id=4.3.14%20%E5%83%B1%E5%93%A1) As of June 30, 2025, the Group had 242 full-time employees, with total staff remuneration expenses of RMB10.5 million, a 20.7% year-on-year increase - As of June 30, 2025, the Group had **242** full-time employees, all located in China[66](index=66&type=chunk) - Total staff remuneration expenses (including directors' emoluments) for the reporting period were **RMB10.5 million** (six months ended June 30, 2024: **RMB8.7 million**)[66](index=66&type=chunk) [Capital Expenditure](index=25&type=section&id=4.3.15%20%E8%B3%87%E6%9C%AC%E9%96%8B%E6%94%AF) Capital expenditure significantly increased to RMB44.5 million, primarily due to higher software platform development expenditure, funded by internal resources and bank borrowings - Capital expenditure increased from **RMB5.6 million** for the six months ended June 30, 2024, to **RMB44.5 million** for the reporting period[67](index=67&type=chunk) - This was mainly due to increased expenditure on software platform development[67](index=67&type=chunk) - The Group primarily funds its capital expenditure through internal resources and bank borrowings[67](index=67&type=chunk) [Contingent Liabilities](index=25&type=section&id=4.3.16%20%E6%88%96%E7%84%B6%E8%B2%A0%E5%82%B5) As of June 30, 2025, the Group had no significant contingent liabilities - As of June 30, 2025, the Group had no significant contingent liabilities[68](index=68&type=chunk) [Material Acquisitions, Disposals and Investments](index=25&type=section&id=4.3.17%20%E9%87%8D%E5%A4%A7%E6%94%B6%E8%B3%BC%E3%80%81%E5%87%BA%E5%94%AE%E5%8F%8A%E6%8A%95%E8%B3%87) During the reporting period, the Group made no material acquisitions or disposals of subsidiaries, associates, or joint ventures, nor did it hold any significant investments - During the reporting period, the Group made no material acquisitions or disposals of subsidiaries, associates, or joint ventures, and held no material investments[69](index=69&type=chunk) [Use of Net Proceeds from Global Offering](index=25&type=section&id=4.3.18%20%E5%85%A8%E7%90%83%E7%99%BC%E5%94%AE%E6%B7%A8%E6%89%80%E5%BE%97%E6%AC%BE%E9%A0%85%E7%9A%84%E7%94%A8%E9%80%94) The company's global offering in November 2023 of 125,000,000 shares generated net proceeds of approximately HKD72.1 million, with detailed use to be published in due course - The Company was listed on the Main Board of the Stock Exchange of Hong Kong Limited on November 10, 2023, with a global offering of **125,000,000 shares** at an issue price of **HKD1.04** per share[70](index=70&type=chunk) - The Group received net proceeds from the global offering of approximately **HKD72.1 million**[70](index=70&type=chunk) [Future Plans for Material Investments or Capital Assets](index=25&type=section&id=4.3.19%20%E9%87%8D%E5%A4%A7%E6%8A%95%E8%B3%87%E6%88%96%E8%B3%87%E6%9C%AC%E8%B3%87%E7%94%A2%E7%9A%84%E6%9C%AA%E4%BE%86%E8%A8%88%E5%8A%83) As of the announcement date, the Group has no detailed future plans for material investments or capital assets - As of the date of this announcement, the Group has no detailed future plans for any material investments or capital assets[71](index=71&type=chunk) [Events After Reporting Period](index=25&type=section&id=4.3.20%20%E5%A0%B1%E5%91%8A%E6%9C%9F%E5%BE%8C%E4%BA%8B%E9%A0%85) No significant events occurred from the end of the reporting period up to the date of this announcement - No significant events occurred from the end of the reporting period up to the date of this announcement[72](index=72&type=chunk) [Other Information](index=26&type=section&id=%E5%85%B6%E4%BB%96%E8%B3%87%E6%96%99) [Interim Dividend](index=26&type=section&id=5.1%20%E4%B8%AD%E6%9C%9F%E8%82%A1%E6%81%AF) The Board recommends not declaring any interim dividend for the reporting period - The Board recommends not declaring any interim dividend for the reporting period[73](index=73&type=chunk) [Corporate Governance Practices](index=26&type=section&id=5.2%20%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB%E5%B8%B8%E8%A6%8F) The Group is committed to high corporate governance standards, adopting the Corporate Governance Code in Appendix C1 of the Listing Rules, and complied with all applicable code provisions during the reporting period, except for deviations regarding directors' legal liability insurance and the combined roles of Chairman and CEO - The Company has adopted the Corporate Governance Code as set out in Part 2 of Appendix C1 to the Listing Rules of the Stock Exchange of Hong Kong Limited[74](index=74&type=chunk) - During the reporting period, the Company complied with all applicable code provisions of the Corporate Governance Code, save for deviations from code provision C.1.8 (directors' legal liability insurance) and C.2.1 (separation of roles of Chairman and Chief Executive Officer)[74](index=74&type=chunk)[75](index=75&type=chunk) - The Board believes that Mr. Chen Jicheng (Chairman and Chief Executive Officer) can effectively undertake both management and business development roles, which is in the best interests of the Group[76](index=76&type=chunk) [Compliance with the Model Code for Securities Transactions by Directors](index=27&type=section&id=5.3%20%E9%81%B5%E5%AE%88%E8%91%A3%E4%BA%8B%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 Group adopted the Model Code for Securities Transactions by Directors in Appendix C3 of the Listing Rules, and all directors confirmed compliance during the reporting period - The Group has adopted the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix C3 to the Listing Rules[78](index=78&type=chunk) - Following specific enquiries made to all Directors, each Director has confirmed that they have complied with the required standards set out in the Model Code throughout the reporting period[78](index=78&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=27&type=section&id=5.4%20%E8%B3%BC%E8%B2%B7%E3%80%81%E5%87%BA%E5%94%AE%E6%88%96%E8%B4%96%E5%9B%9E%E6%9C%AC%E5%85%AC%E5%8F%B8%E4%B9%8B%E4%B8%8A%E5%B8%82%E8%AD%89%E5%88%B8) During the reporting period, neither the company nor its subsidiaries purchased, sold, or redeemed any of the company's listed securities, and the company held no treasury shares - During the reporting period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[79](index=79&type=chunk) - As of June 30, 2025, the Company did not hold any treasury shares[79](index=79&type=chunk) [Audit Committee](index=27&type=section&id=5.5%20%E5%AF%A9%E6%A0%B8%E5%A7%94%E5%93%A1%E6%9C%83) The Audit Committee, comprising three independent non-executive directors, reviewed the Group's unaudited condensed consolidated financial statements for the reporting period, confirming compliance with applicable accounting standards and Listing Rules - The Audit Committee comprises three independent non-executive Directors: Dr. He Weifeng (Chairman), Mr. Peng Litang, and Mr. Li Guangdou[80](index=80&type=chunk) - The Audit Committee has reviewed the Group's unaudited condensed consolidated financial statements for the reporting period and is satisfied that they have been prepared in accordance with applicable accounting standards and fairly reflect the Group's financial position and performance[81](index=81&type=chunk) [Publication of Interim Results Announcement and 2025 Interim Report](index=28&type=section&id=5.6%20%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%BA%8C%E9%9B%B6%E4%BA%8C%E4%BA%94%E5%B9%B4%E4%B8%AD%E6%9C%9F%E5%A0%B1%E5%91%8A) This interim results announcement is available on the HKEX and company websites, and the 2025 interim report, containing all information required by the Listing Rules, will be dispatched to shareholders and posted online in due course - This interim results announcement is published on the website of the Stock Exchange (www.hkexnews.hk) and the Company's website (www.youmeimu.com)[82](index=82&type=chunk) - The Company's interim report for the six months ended June 30, 2025, containing all information required by the Listing Rules, will be dispatched to shareholders and published on the aforementioned websites in due course[82](index=82&type=chunk)

Financial Performance - The company reported revenue of RMB 148.285 million for the six months ended June 30, 2025, representing a 71.1% increase from RMB 86.716 million in the same period of 2024[3]. - Gross profit for the same period was RMB 6.315 million, up from RMB 3.621 million, indicating a gross margin improvement[3]. - The company incurred a net loss of RMB 23.665 million, compared to a net loss of RMB 25.601 million in the prior year, reflecting a reduction in losses[3]. - The company’s total comprehensive loss for the period was RMB 21.903 million, compared to RMB 26.160 million in the previous year, showing an improvement in overall financial performance[5]. - The basic and diluted loss per share was RMB 2.15, compared to RMB 2.50 in the prior year, indicating a reduction in loss per share[5]. - The company reported a total loss before tax of RMB 23,076,000 for the six months ended June 30, 2025, compared to a loss of RMB 28,150,000 for the same period in 2024[20]. - The company reported a net loss attributable to shareholders of RMB 22,800,000 (approximately $3.2 million) for the six months ended June 30, 2025, compared to a net loss of RMB 25,254,000 (approximately $3.6 million) for the same period in 2024, indicating a reduction in losses of 5.8%[33]. Assets and Liabilities - Total assets as of June 30, 2025, were RMB 212.872 million, compared to RMB 146.259 million as of December 31, 2024, showing significant asset growth[6]. - Current liabilities increased to RMB 351.061 million from RMB 259.164 million, indicating a rise in short-term financial obligations[6]. - Total liabilities rose to RMB 395,199,000 (approximately $56.1 million) as of June 30, 2025, from RMB 306,683,000 (approximately $43.7 million) as of December 31, 2024, marking an increase of 28.9%[21]. - Trade payables as of June 30, 2025, totaled RMB 130,590,000, significantly up from RMB 52,919,000 as of December 31, 2024[36]. - Interest payable increased to RMB 77,060,000 as of June 30, 2025, from RMB 66,236,000 as of December 31, 2024[37]. Cash Flow and Liquidity - The company’s cash and cash equivalents decreased to RMB 6.377 million from RMB 9.075 million, highlighting liquidity challenges[6]. - Operating cash flow deficit was approximately RMB 195.5 million, compared to RMB 175.9 million at the end of 2024[64]. - The current ratio improved to 0.44 from 0.32 at the end of 2024, indicating better short-term financial health[64]. - The company continues to maintain sufficient financial resources to meet upcoming financial obligations and ongoing operations[11]. Revenue Breakdown - Revenue from solar power generation reached RMB 6,171,000, up from RMB 5,188,000, while energy storage sales decreased to RMB 878,000 from RMB 6,595,000[15]. - The logistics services segment generated revenue of RMB 49,503,000, down from RMB 74,299,000, indicating a decline of 33.4%[15]. - Solar and energy storage revenue increased by approximately RMB 86.4 million or 695.5% to approximately RMB 98.8 million, driven by successful new EPC projects[49]. - Logistics services revenue decreased by 33.4% to approximately RMB 49.5 million, primarily due to the termination of contracts by two customers in the first half of 2025[49]. Expenses and Cost Management - Research and development expenses were RMB 0.211 million, down from RMB 0.411 million, suggesting a focus on cost management[3]. - Depreciation and amortization expenses rose to RMB 6,207,000 (approximately $885,000) for the six months ended June 30, 2025, compared to RMB 5,126,000 (approximately $730,000) for the same period in 2024, an increase of 21.1%[30]. - Administrative expenses decreased by approximately RMB 2.7 million or 17.3% to about RMB 13.1 million, due to strict cost control measures[56]. - Employee costs totaled RMB 3,478,000 (approximately $495,000) for the six months ended June 30, 2025, compared to RMB 2,674,000 (approximately $380,000) for the same period in 2024, an increase of 30%[29]. Strategic Initiatives - The company plans to acquire a logistics cloud technology platform to enhance existing business operations and profitability[13]. - The company has invested RMB 15,500,000 in a hybrid energy storage system to improve profitability[13]. - The company is actively promoting its lithium battery energy storage systems and is seeking higher-value procurement orders[47]. - The company is exploring a new investment in a 150 MW flywheel energy project in Fushan County, Shanxi, with construction expected to start in the second half of 2025[74]. - The company plans to enter the hazardous materials transportation and smart logistics sectors through partnerships with local governments and industry experts[71]. Financial Reporting and Governance - The company has adopted new international financial reporting standards effective from January 1, 2025, with no significant impact on the financial statements[14]. - The company has not declared or proposed any dividends for the six months ended June 30, 2025, and 2024[32]. - The company maintained a public float of at least 25% of its issued shares throughout the reporting period[82]. - The board has achieved a gender diversity goal of at least 10% female representation[76]. - The board of directors includes executive director Zhang Yi and non-executive directors Dai Ji and Qiao Fenglin, along with independent non-executive directors Jiang Qiang, Dr. Zhen Jiasheng, and Qiu Ping[87].

[Financial Highlights](index=1&type=section&id=Financial%20Highlights) [Summary of Financial Performance](index=1&type=section&id=Summary%20of%20Financial%20Performance) Yida China Holdings Limited reported a 5.0% revenue increase for the six months ended June 30, 2025, but gross profit fell 47.3%, net loss expanded to RMB 778 million, and no interim dividend was declared Key Financial Data Comparison for H1 2025 (RMB thousands) | Metric | H1 2025 | H1 2024 | Year-on-Year Change | Change Rate | Notes | | :--- | :--- | :--- | :--- | :--- | :--- | | Recognized Revenue | 700,410 | 667,065 | +33,345 | +5.0% | | | Gross Profit | 99,700 | 189,347 | -89,647 | -47.3% | | | Gross Profit Margin | 14.2% | 28.4% | -14.2% | -50.0% | | | Net Loss | (778,340) | (361,430) | -416,910 | +115.4% | Loss Widened | | Basic Loss Per Share | (30.01 cents) | (13.94 cents) | -16.07 cents | +115.3% | Loss Widened | | Interim Dividend | Not Declared | Not Declared | - | - | | [Financial Information](index=2&type=section&id=Financial%20Information) [Condensed Consolidated Statement of Profit or Loss](index=2&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss) For the six months ended June 30, 2025, revenue grew 5.0% to RMB 700 million, but increased cost of sales, fair value loss on investment properties, and higher finance costs led to a net loss of RMB 778 million Key Data from Condensed Consolidated Statement of Profit or Loss (RMB thousands) | Metric | H1 2025 | H1 2024 | Year-on-Year Change | Change Rate | | :--- | :--- | :--- | :--- | :--- | | Revenue | 700,408 | 667,065 | +33,343 | +5.0% | | Cost of Sales | (600,707) | (477,718) | -122,989 | +25.7% | | Gross Profit | 99,701 | 189,347 | -89,646 | -47.3% | | Fair Value (Loss)/Gain on Investment Properties | (123,899) | 233 | -124,132 | -53275.5% | | Finance Costs | (505,433) | (399,786) | -105,647 | +26.4% | | Loss for the Period | (778,342) | (361,429) | -416,913 | +115.4% | | Loss Attributable to Owners of the Company | (775,538) | (360,118) | -415,420 | +115.3% | | Basic Loss Per Share (RMB cents) | (30.01) | (13.94) | -16.07 | +115.3% | [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, the Group's total comprehensive loss was RMB 778 million, significantly widening from the prior period, primarily due to increased loss attributable to owners of the Company Key Data from Condensed Consolidated Statement of Comprehensive Income (RMB thousands) | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Loss for the Period | (778,342) | (361,429) | | Other Comprehensive Loss That May Be Reclassified to Profit or Loss in Subsequent Periods | – | – | | Total Comprehensive Loss for the Period | (778,342) | (361,429) | | Attributable to Owners of the Company | (775,538) | (360,118) | | Non-controlling Interests | (2,804) | (1,311) | [Condensed Consolidated Statement of Financial Position](index=4&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, total assets slightly increased, but net current liabilities expanded to RMB 11.585 billion, indicating persistent liquidity pressure, with investment properties as the largest asset and borrowings as major liabilities Key Data from Condensed Consolidated Statement of Financial Position (RMB thousands) | Metric | As of June 30, 2025 | As of December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Total Assets | 33,883,030 | 33,879,986 | +3,044 | | Total Non-current Assets | 20,482,986 | 20,649,343 | -166,357 | | Total Current Assets | 13,400,044 | 13,230,643 | +169,401 | | Total Liabilities | 27,260,812 | 26,479,011 | +781,801 | | Total Non-current Liabilities | 2,275,475 | 2,308,088 | -32,613 | | Total Current Liabilities | 24,985,337 | 24,170,923 | +814,414 | | Total Equity | 6,622,218 | 7,400,975 | -778,757 | | Net Current Liabilities | (11,585,293) | (10,940,280) | -645,013 | [Notes to the Condensed Consolidated Financial Statements](index=6&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) [Company and Group Information](index=6&type=section&id=Company%20and%20Group%20Information) Yida China Holdings Limited, an investment holding company incorporated in the Cayman Islands, primarily operates in property development, investment, and business park management in mainland China, with China Minsheng Investment Corp., Ltd. as its ultimate holding company - The Company is an investment holding company, with principal activities including property development, investment, business park operation and management, construction, decoration, and landscaping, primarily concentrated in mainland China cities such as Dalian, Wuhan, Shenyang, Shanghai, Chongqing, Zhengzhou, Hefei, Changsha, and Chengdu[9](index=9&type=chunk) - The ultimate holding company of the Company is China Minsheng Investment Corp., Ltd[9](index=9&type=chunk) [Basis of Preparation and Going Concern](index=6&type=section&id=Basis%20of%20Preparation%20and%20Going%20Concern) These financial statements, prepared under HKAS 34, highlight significant going concern uncertainties due to substantial current liabilities, overdue borrowings, and unfulfilled settlement agreements, despite the Board's plans to mitigate liquidity pressure [Going Concern Basis](index=6&type=section&id=Going%20Concern%20Basis) As of June 30, 2025, the Group's net current liabilities reached RMB 11.585 billion, with RMB 11.552 billion in current borrowings and only RMB 186 million in cash, compounded by RMB 6.445 billion in overdue borrowings and a RMB 1.523 billion unfulfilled settlement with Andu Fang, potentially triggering immediate repayment of RMB 5.107 billion in other borrowings - As of June 30, 2025, the Group's current liabilities exceeded current assets by **RMB 11,585,293,000**[11](index=11&type=chunk) - As of June 30, 2025, borrowings with a total principal amount of **RMB 6,444,986,000** remained unsettled[11](index=11&type=chunk) - The Group's outstanding balance payable to Andu Fang (including accrued interest) totaled **RMB 1,522,726,000**, and the overdue borrowings and Andu Fang event constituted defaults, potentially leading to immediate repayment demands for **RMB 5,106,826,000** of other borrowings[12](index=12&type=chunk) [Uncertainties Regarding Going Concern and Mitigation Measures](index=7&type=section&id=Uncertainties%20Regarding%20Going%20Concern%20and%20Mitigation%20Measures) To address going concern uncertainties, the Board has developed mitigation plans including debt renegotiation, new financing, accelerated property sales, cost control, and asset disposals, believing these will ensure sufficient working capital, though successful implementation remains highly uncertain - The Group plans to negotiate a final settlement agreement with Andu Fang to avoid a winding-up petition[13](index=13&type=chunk) - The Group is actively negotiating with all lenders for the renewal and deferral of overdue borrowings and striving to facilitate the renewal or extension of existing borrowings[13](index=13&type=chunk) - The Group will accelerate the pre-sale and sale of properties under development and completed properties, expedite the collection of sales proceeds, and seek opportunities to dispose of certain assets and investments to generate cash inflows[13](index=13&type=chunk) [Accounting Policies](index=8&type=section&id=Accounting%20Policies) The accounting policies for these interim financial statements are consistent with the 2024 annual consolidated financial statements, with no significant impact or retrospective adjustments, and no new standards are expected to materially affect financial position or operating results - The accounting policies adopted in the preparation of these unaudited condensed consolidated financial statements are consistent with those adopted in the annual consolidated financial statements of the Company for the year ended December 31, 2024, with no significant impact on the Group's financial statements and no retrospective adjustments required[15](index=15&type=chunk) [Operating Segment Information](index=8&type=section&id=Operating%20Segment%20Information) The Group operates five reportable segments: property development, property investment, business park operation, construction, and others; property development incurred the largest loss in H1 2025, while property investment generated positive earnings, with all external revenue and most assets in mainland China - The Group has five reportable operating segments: property development, property investment, business park operation and management, construction, decoration and landscaping, and other segments[16](index=16&type=chunk)[17](index=17&type=chunk)[21](index=21&type=chunk) Segment Revenue and Results for H1 2025 (RMB thousands) | Segment | Sales to External Customers | Segment Results | | :--- | :--- | :--- | | Property Development | 212,200 | (218,963) | | Property Investment | 216,387 | 22,900 | | Business Park Operation and Management | 86,889 | (587) | | Construction, Decoration and Landscaping | 184,932 | (5,296) | | Others | – | (1,389) | | **Total** | **700,408** | **(203,335)** | - All of the Group's external customer revenue is derived from mainland China, and the majority of segment assets are located in mainland China[23](index=23&type=chunk) [Revenue Breakdown](index=11&type=section&id=Revenue%20Breakdown) The Group's H1 2025 total revenue was RMB 700 million, up 5.0%, driven by a 20.8% increase in property sales and a 25.3% rise in construction income, despite declines in rental and business park operation management service revenues Revenue Source Analysis (RMB thousands) | Revenue Source | H1 2025 | H1 2024 | Year-on-Year Change | Change Rate | | :--- | :--- | :--- | :--- | :--- | | Sales of Properties | 212,200 | 175,623 | +36,577 | +20.8% | | Business Park Operation and Management Service Income | 86,889 | 100,080 | -13,191 | -13.2% | | Construction, Decoration and Landscaping Income | 184,932 | 147,564 | +37,368 | +25.3% | | Rental Income | 216,387 | 243,798 | -27,411 | -11.2% | | **Total** | **700,408** | **667,065** | **+33,343** | **+5.0%** | [Expenses by Nature](index=12&type=section&id=Expenses%20by%20Nature) The Group's H1 2025 total cost of sales, selling and marketing, and administrative expenses reached RMB 679 million, up 21.5%, primarily due to increased cost of properties sold, cost of providing other services, and direct operating expenses for investment properties Expenses by Nature (RMB thousands) | Expense Item | H1 2025 | H1 2024 | Year-on-Year Change | Change Rate | | :--- | :--- | :--- | :--- | :--- | | Cost of Properties Sold | 257,497 | 171,599 | +85,898 | +50.1% | | Cost of Providing Other Services | 250,659 | 239,260 | +11,399 | +4.8% | | Direct Operating Expenses Arising from Investment Properties That Generate Rental Income | 92,551 | 66,859 | +25,692 | +38.4% | | Employee Benefit Expenses | 30,955 | 34,505 | -3,550 | -10.3% | | **Total Cost of Sales, Selling and Marketing Expenses and Administrative Expenses** | **679,379** | **559,336** | **+120,043** | **+21.5%** | [Other Losses, Net](index=12&type=section&id=Other%20Losses%2C%20Net) The Group's H1 2025 other losses, net, surged to RMB 102 million, primarily driven by RMB 120 million in late payment penalties, contrasting with foreign exchange losses in the prior period Other Losses, Net (RMB thousands) | Item | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Net Foreign Exchange Gain/(Loss) | 14,307 | (19,590) | | Late Payment Penalties | (119,748) | – | | Others | 3,641 | (38,871) | | **Total** | **(101,800)** | **(58,461)** | [Finance Costs](index=12&type=section&id=Finance%20Costs) The Group's H1 2025 net finance costs rose 26.4% to RMB 505 million, mainly due to higher interest on bank and other borrowings and a significant decrease in capitalized interest Finance Costs (RMB thousands) | Item | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Interest on Bank and Other Borrowings | 556,028 | 529,166 | | Interest on Lease Liabilities | 386 | 537 | | Less: Capitalized Interest | (50,981) | (129,917) | | **Total** | **505,433** | **399,786** | [Income Tax Expense](index=13&type=section&id=Income%20Tax%20Expense) The Group's H1 2025 income tax expense surged 332.4% to RMB 70.01 million, mainly due to a significant increase in land appreciation tax provision from property sales settlements in China Income Tax Expense Analysis (RMB thousands) | Item | H1 2025 | H1 2024 | | :--- | :--- | :--- | | PRC Enterprise Income Tax | 9,982 | 7,418 | | PRC Land Appreciation Tax | 90,190 | (494) | | Deferred Income Tax (Current Period) | (30,162) | 9,267 | | **Total Income Tax Expense for the Period** | **70,010** | **16,191** | [Interim Dividend](index=13&type=section&id=Interim%20Dividend) The Board resolved not to declare any interim dividend for the six months ended June 30, 2025 - The Company has resolved not to declare any interim dividend for the six months ended June 30, 2025 (for the six months ended June 30, 2024: nil)[32](index=32&type=chunk) [Loss Per Share Attributable to Ordinary Equity Holders of the Company](index=13&type=section&id=Loss%20Per%20Share%20Attributable%20to%20Ordinary%20Equity%20Holders%20of%20the%20Company) As of June 30, 2025, basic loss per share attributable to ordinary equity holders was RMB 30.01 cents, significantly widening from the prior period due to increased loss, with diluted loss per share being identical Loss Per Share (RMB cents) | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Basic Loss Per Share | (30.01) | (13.94) | | Diluted Loss Per Share | (30.01) | (13.94) | - Loss for the period attributable to ordinary equity holders of the Company was **RMB 775,538,000**, compared to **RMB 360,118,000** in the prior period[33](index=33&type=chunk) [Investment Properties](index=14&type=section&id=Investment%20Properties) As of June 30, 2025, total investment properties were RMB 16.207 billion, slightly down from year-start due to a RMB 124 million fair value loss, with most properties pledged to banks as loan collateral Movement in Investment Properties (RMB thousands) | Item | As of January 1, 2025 | Additions | Disposals | Net Loss from Fair Value Adjustments | As of June 30, 2025 | | :--- | :--- | :--- | :--- | :--- | :--- | | Completed | 11,399,000 | – | (10,486) | (112,038) | 11,276,476 | | Under Construction | 4,941,772 | 152 | – | (11,861) | 4,930,063 | | **Total** | **16,340,772** | **152** | **(10,486)** | **(123,899)** | **16,206,539** | - As of June 30, 2025, certain investment properties of the Group with a value of **RMB 14,130,464,000** have been pledged to banks as collateral for loans[34](index=34&type=chunk) [Trade Receivables](index=14&type=section&id=Trade%20Receivables) As of June 30, 2025, the Group's net trade receivables increased to RMB 375 million from a total of RMB 558 million, with a high proportion of receivables over two years old indicating collection risks Aging Analysis of Trade Receivables (RMB thousands) | Aging | As of June 30, 2025 | As of December 31, 2024 | | :--- | :--- | :--- | | Within One Year | 276,059 | 205,416 | | One to Two Years | 71,559 | 54,475 | | Over Two Years | 210,005 | 242,923 | | **Total Trade Receivables** | **557,623** | **502,814** | | Less: Impairment Provision for Trade Receivables | (182,493) | (180,428) | | **Net Trade Receivables** | **375,130** | **322,386** | [Cash and Cash Equivalents and Restricted Cash](index=15&type=section&id=Cash%20and%20Cash%20Equivalents%20and%20Restricted%20Cash) As of June 30, 2025, the Group's total cash and bank balances were RMB 441 million, with RMB 255 million restricted, leaving net cash and cash equivalents at RMB 186 million, primarily for property pre-sale proceeds and project deposits Cash and Cash Equivalents and Restricted Cash (RMB thousands) | Item | As of June 30, 2025 | As of December 31, 2024 | | :--- | :--- | :--- | | Cash and Bank Balances | 440,872 | 373,802 | | Less: Restricted Cash | (254,919) | (217,548) | | **Cash and Cash Equivalents** | **185,953** | **156,254** | - Restricted cash primarily includes guarantee deposits from property pre-sale proceeds deposited into designated bank accounts (**RMB 24,820,000**) and deposits for payment of promissory notes, work injury compensation, and talent development (**RMB 230,099,000**)[39](index=39&type=chunk) [Trade Payables](index=15&type=section&id=Trade%20Payables) As of June 30, 2025, total trade payables increased slightly to RMB 3.489 billion, with a significant rise in payables over one year, indicating accumulated payment pressure Aging Analysis of Trade Payables (RMB thousands) | Aging | As of June 30, 2025 | As of December 31, 2024 | | :--- | :--- | :--- | | Within One Year | 1,721,783 | 2,231,487 | | Over One Year | 1,766,919 | 1,113,431 | | **Total** | **3,488,702** | **3,344,918** | [Interest-Bearing Bank and Other Borrowings](index=16&type=section&id=Interest-Bearing%20Bank%20and%20Other%20Borrowings) As of June 30, 2025, total interest-bearing borrowings were RMB 11.605 billion, with RMB 11.552 billion due within one year or on demand, indicating significant short-term repayment pressure, exacerbated by reclassification of non-current borrowings and immediate repayment demands for senior notes due to defaults Interest-Bearing Bank and Other Borrowings (RMB thousands) | Loan Type | As of June 30, 2025 | As of December 31, 2024 | | :--- | :--- | :--- | | Bank Loans - Secured | 5,072,665 | 5,340,153 | | Other Borrowings - Secured | 4,263,965 | 4,119,741 | | Other Borrowings - Unsecured | 2,268,715 | 2,210,990 | | **Total** | **11,605,345** | **11,670,884** | Borrowings Maturity Analysis (RMB thousands) | Maturity | As of June 30, 2025 | As of December 31, 2024 | | :--- | :--- | :--- | | Within One Year or On Demand | 11,551,811 | 11,618,346 | | Second Year | 53,534 | 52,538 | | **Total** | **11,605,345** | **11,670,884** | - Current interest-bearing borrowings include principal amounts of **RMB 2,543,759,000** originally due after June 30, 2026, which were reclassified as current liabilities due to going concern uncertainties[41](index=41&type=chunk) - The senior notes have been subject to acceleration notices from holders due to non-payment of consent fees, alternative accrued interest, and accrued interest, requiring immediate repayment of principal, premium, and accrued unpaid interest[42](index=42&type=chunk) [Business Review and Outlook](index=18&type=section&id=Business%20Review%20and%20Outlook) [Review of H1 2025](index=18&type=section&id=Review%20of%20H1%202025) In H1 2025, the real estate market continued its deep adjustment, pressuring transaction volumes and developer performance; the Group faced significant debt risks but worked to maintain operational stability through quality operations and debt resolution with management and shareholder support - In H1 2025, the real estate market continued its contraction trend, with land auction transaction volumes and completed construction area consistently declining year-on-year, insufficient market demand, and frequent defaults among property developers[45](index=45&type=chunk) - The Group's debt risks became prominent during the period, and management is striving to address operational challenges through quality-focused operations and debt risk resolution[45](index=45&type=chunk) [Outlook for H2 2025](index=18&type=section&id=Outlook%20for%20H2%202025) H2 2025 is expected to see stronger macro policies driving real estate transformation; the Group will focus on core businesses, accelerate destocking, revitalize assets to improve its balance sheet, and strictly control expenses to meet operational and debt challenges - Macro policies are expected to further strengthen in H2 2025, driving the industry towards a new development model, but household income, demographic structure, and property expectations remain weak[46](index=46&type=chunk) - The Group will focus on core business drivers, accelerate the destocking of existing saleable projects, seize policy windows for land acquisition, promote the revitalization of existing assets to improve its asset-liability position, and strictly control expenses[46](index=46&type=chunk) [Operation of Business Park Investment Properties](index=19&type=section&id=Operation%20of%20Business%20Park%20Investment%20Properties) The Group operates four business parks and a 50% interest in Wuhan Software New City, totaling 1.929 million sq.m. GFA; H1 2025 rental income fell 11.2% to RMB 216 million due to foreign client withdrawals, prompting active client expansion and innovative industrial services - The Group wholly owns four business parks: Dalian Software Park, Dalian Tech City, Dalian Tiandi, and Yida Information Software Park, and holds a **50%** interest in Wuhan Software New City, with a total GFA of completed investment properties of approximately **1.929 million sq.m.**[47](index=47&type=chunk) H1 2025 Business Park Investment Properties Operation Data | Metric | H1 2025 | | :--- | :--- | | Rental Income | RMB 216 million | | Year-on-year Decrease | 11.2% | | Primary Reason | Decreased occupancy rate, with approximately **28,000 sq.m.** vacated by some foreign clients | - The Group actively expanded its client base, adding **11** new client enterprises and signing approximately **7,000 sq.m.** of new area during the period, while enhancing client stickiness through industrial resource integration and development services[49](index=49&type=chunk)[50](index=50&type=chunk) [Property Sales](index=20&type=section&id=Property%20Sales) In H1 2025, amidst a deeply adjusting real estate market, the Group focused on asset revitalization and debt control, achieving RMB 415 million in contract sales and RMB 212 million in property sales revenue (up 20.8%), though average selling price fell 39.7% due to product mix changes - The Group will continue to focus on core businesses such as 'asset revitalization, debt risk control, sales collection, and project construction' to ensure timely completion of key 'guaranteed delivery' projects[51](index=51&type=chunk) H1 2025 Property Sales Overview | Metric | Amount/Quantity | | :--- | :--- | | Contract Sales Amount | RMB 415 million | | Contract Sales Area | 34,100 sq.m. | | Contract Average Selling Price | RMB 12,148/sq.m. | | Sales Revenue | RMB 212 million (up 20.8% year-on-year) | | Average Selling Price (Revenue) | RMB 11,077/sq.m. (down 39.7% year-on-year) | - Dalian market transaction GFA decreased by **16%** year-on-year, but transaction area in the central five districts increased by **14%**, with average price rising by **7%**; the Group's Dalian Hekouwan • Xinyuan project achieved contract sales of approximately **RMB 114 million**[53](index=53&type=chunk) [Contract Sales Breakdown](index=22&type=section&id=Contract%20Sales%20Breakdown) As of June 30, 2025, total contract sales were RMB 415 million, with Dalian contributing 82.2% and Hefei 8.2%, and residential properties accounting for 75.2% of the total H1 2025 Contract Sales Breakdown by City | City | Sales GFA (sq.m.) | Sales Amount (RMB ten thousands) | Average Selling Price (RMB/sq.m.) | Percentage of Total Amount | | :--- | :--- | :--- | :--- | :--- | | Dalian | 24,184 | 34,113 | 14,106 | 82.2% | | Hefei | 5,064 | 3,393 | 6,700 | 8.2% | | Chongqing | 2,407 | 2,371 | 9,850 | 5.7% | | Changsha | 927 | 951 | 10,262 | 2.3% | | Shenyang | 1,567 | 630 | 4,020 | 1.5% | | Wuhan | – | 26 | – | 0.1% | | **Total** | **34,149** | **41,484** | **12,148** | **100.0%** | [Business Park Operation Management](index=22&type=section&id=Business%20Park%20Operation%20Management) The Group's H1 2025 business park operation management income was RMB 87 million, down 13.2% due to client business scale-downs, with the company focusing on developing smart park investment attraction and a national industrial network - The Group's total entrusted business park operation management area was approximately **219,000 sq.m.**, generating revenue of approximately **RMB 87 million** during the period[55](index=55&type=chunk) - Revenue decreased by **13.2%** year-on-year, primarily due to clients scaling down their business operations during the period[55](index=55&type=chunk) [Construction, Decoration and Landscaping](index=23&type=section&id=Construction%2C%20Decoration%20and%20Landscaping) Amidst a real estate downturn, this segment achieved RMB 185 million in revenue, up 25.3%, driven by increased external project output and supported by digital management and cost control, with an annual output value of RMB 180 million expected - The Group optimized its organizational structure, improved per capita efficiency, and strictly controlled costs through a digital management platform and material management technology[56](index=56&type=chunk) H1 2025 Construction, Decoration and Landscaping Business Revenue | Metric | Amount | | :--- | :--- | | Revenue | RMB 185 million | | Year-on-year Growth | 25.3% | | Primary Reason | Increased completed output value from external projects | | Expected Annual Output Value | RMB 180 million | [Land Bank](index=23&type=section&id=Land%20Bank) As of June 30, 2025, the Group's total land bank GFA was approximately 6.47 million sq.m., with Dalian comprising 77.1%, and the attributable interest of 5.96 million sq.m. primarily concentrated in business park projects - As of June 30, 2025, the Group's total land bank GFA was approximately **6.47 million sq.m.**, with Dalian accounting for **77.1%**[57](index=57&type=chunk) - The Group's attributable interest in land bank GFA was approximately **5.96 million sq.m.**, of which **86.6%** were business park projects[57](index=57&type=chunk)[58](index=58&type=chunk) [Land Bank Breakdown](index=23&type=section&id=Land%20Bank%20Breakdown) The Group's land bank, primarily business parks in Dalian, Wuhan, and Zhengzhou, includes 2.433 million sq.m. of completed leasable/saleable GFA, 999,800 sq.m. under development, and 3.0417 million sq.m. for future development Land Bank by City as of June 30, 2025 | City | Total Land Bank (sq.m.) | Percentage of Total | Attributable Interest in Total Land Bank (sq.m.) | Percentage of Attributable Total | | :--- | :--- | :--- | :--- | :--- | | Dalian | 4,992,525 | 77.1% | 4,992,525 | 83.8% | | Wuhan | 620,072 | 9.6% | 310,036 | 5.2% | | Zhengzhou | 297,535 | 4.6% | 297,535 | 5.0% | | Changsha | 253,879 | 3.9% | 129,478 | 2.2% | | Hefei | 136,284 | 2.1% | 88,585 | 1.5% | | Chongqing | 80,755 | 1.3% | 80,755 | 1.4% | | Chengdu | 65,848 | 1.0% | 45,063 | 0.7% | | Shenyang | 27,714 | 0.4% | 14,134 | 0.2% | | **Total** | **6,474,612** | **100.0%** | **5,958,111** | **100.0%** | Attributable Interest in Land Bank by Stage as of June 30, 2025 (sq.m.) | Stage | Business Park Subtotal | Mixed-use Residential Subtotal | Total | | :--- | :--- | :--- | :--- | | Completed Remaining Leasable/Saleable GFA | 2,055,394 | 377,719 | 2,433,113 | | GFA Under Development | 831,967 | 167,791 | 999,758 | | GFA Held for Future Development | 2,786,044 | 255,697 | 3,041,741 | [Financial Review](index=27&type=section&id=Financial%20Review) [Revenue](index=27&type=section&id=Revenue) The Group's H1 2025 total revenue increased 5.0% to RMB 700 million, driven by a 20.8% rise in property sales and a 25.3% increase in construction income, despite declines in rental and business park operation management service revenues due to lower occupancy and client scale-downs Revenue Composition and Year-on-Year Change (RMB thousands) | Revenue Source | H1 2025 | Percentage of Total | H1 2024 | Percentage of Total | Year-on-Year Change Rate | | :--- | :--- | :--- | :--- | :--- | :--- | | Property Sales Revenue | 212,200 | 30.3% | 175,623 | 26.3% | +20.8% | | Rental Income | 216,387 | 30.9% | 243,798 | 36.5% | -11.2% | | Business Park Operation and Management Service Income | 86,889 | 12.4% | 100,080 | 15.0% | -13.2% | | Construction, Decoration and Landscaping Income | 184,932 | 26.4% | 147,564 | 22.2% | +25.3% | | **Total** | **700,408** | **100.0%** | **667,065** | **100.0%** | **+5.0%** | - The increase in property sales revenue was primarily due to increased project deliveries during the period; the decrease in rental income and business park operation management service income was mainly due to lower occupancy rates and clients scaling down their business operations; the increase in construction, decoration, and landscaping income was primarily due to increased completed output value from external projects[63](index=63&type=chunk)[64](index=64&type=chunk)[65](index=65&type=chunk)[66](index=66&type=chunk) [Cost of Sales](index=28&type=section&id=Cost%20of%20Sales) The Group's H1 2025 cost of sales increased 25.7% to RMB 601 million, mainly due to higher costs from increased revenue and inventory impairment provisions - The Group's cost of sales for the period was approximately **RMB 601 million**, an increase of **25.7%** compared to the prior period in 2024, primarily due to increased costs associated with higher revenue and inventory impairment provisions during the period[67](index=67&type=chunk) [Gross Profit and Gross Profit Margin](index=28&type=section&id=Gross%20Profit%20and%20Gross%20Profit%20Margin) The Group's H1 2025 gross profit significantly decreased by 47.3% to RMB 99.7 million, with gross profit margin falling from 28.4% to 14.2%, primarily due to changes in product mix and lower corresponding gross profit Gross Profit and Gross Profit Margin Comparison | Metric | H1 2025 | H1 2024 | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Gross Profit | RMB 99.7 million | RMB 189 million | -47.3% | | Gross Profit Margin | 14.2% | 28.4% | -14.2 percentage points | - The decrease in gross profit margin was primarily due to a different product mix recognized during the period, and the corresponding gross profit for recognized products was lower compared to the prior period in 2024[68](index=68&type=chunk) [Selling and Marketing Expenses](index=28&type=section&id=Selling%20and%20Marketing%20Expenses) The Group's H1 2025 selling and marketing expenses increased 19.5% to RMB 27.92 million, mainly due to higher property management fees and sales commissions - Selling and marketing expenses increased by **19.5%** from approximately **RMB 23.36 million** in the prior period of 2024 to approximately **RMB 27.92 million**, primarily due to increased property management fees and sales commissions during the period[69](index=69&type=chunk) [Administrative Expenses](index=28&type=section&id=Administrative%20Expenses) The Group's H1 2025 administrative expenses decreased 12.9% to RMB 50.75 million, primarily due to proactive measures to control office costs - Administrative expenses were approximately **RMB 50.75 million**, a decrease of **12.9%** compared to the prior period in 2024, primarily due to proactive measures taken to control office costs during the period[70](index=70&type=chunk) [Other Losses, Net](index=28&type=section&id=Other%20Losses%2C%20Net) The Group's H1 2025 other losses, net, increased 74.1% to RMB 102 million, primarily due to RMB 120 million in late payment penalties incurred - Other losses, net, were approximately **RMB 101.8 million**, an increase of **74.1%** compared to the prior period in 2024, primarily due to late payment penalties incurred during the period[71](index=71&type=chunk) [Fair Value (Loss)/Gain on Investment Properties](index=29&type=section&id=Fair%20Value%20(Loss)%2FGain%20on%20Investment%20Properties) The Group's H1 2025 fair value of investment properties shifted from a gain to a loss of RMB 124 million, mainly due to international client relocations and park vacancies driven by client cost-cutting initiatives - Fair value loss on investment properties was approximately **RMB 123.9 million**, compared to a gain of approximately **RMB 0.23 million** in the prior period of 2024, primarily due to business relocations of certain international clients and some clients demanding business transfers to lower-cost regions for cost reduction and efficiency improvement, leading to multiple enterprises vacating the parks during the period[72](index=72&type=chunk) [Net Finance Costs](index=29&type=section&id=Net%20Finance%20Costs) The Group's H1 2025 net finance costs increased 26.4% to RMB 505 million, mainly due to higher interest expenses and lower capitalized interest - Net finance costs increased by **26.4%** from approximately **RMB 399.79 million** in the prior period of 2024 to approximately **RMB 505.43 million** during the period, primarily due to increased interest expenses and reduced capitalized interest[73](index=73&type=chunk) [Share of Profits/(Losses) of Joint Ventures and Associates](index=29&type=section&id=Share%20of%20Profits%2F(Losses)%20of%20Joint%20Ventures%20and%20Associates) The Group's H1 2025 share of profits from joint ventures and associates improved significantly to RMB 1.38 million from a prior period loss, mainly due to increased equity investment income from Wuhan Software New City Development Co., Ltd - Share of profits from joint ventures and associates was approximately **RMB 1.38 million**, an increase of approximately **RMB 1.44 million** compared to a loss of approximately **RMB 0.06 million** in the prior period of 2024, primarily due to increased equity investment income from Wuhan Software New City Development Co., Ltd[74](index=74&type=chunk) [Income Tax Expense](index=29&type=section&id=Income%20Tax%20Expense) The Group's H1 2025 income tax expense surged 332.4% to RMB 70.01 million, mainly due to increased land appreciation tax provision from property sales settlements - Income tax expense increased by **332.4%** from approximately **RMB 16.19 million** in the prior period of 2024 to approximately **RMB 70.01 million** during the period, primarily due to increased land appreciation tax provision resulting from land appreciation tax settlement for property sales during the period[75](index=75&type=chunk) [Loss for the Period](index=29&type=section&id=Loss%20for%20the%20Period) Considering the above factors, the Group's H1 2025 loss before tax expanded to RMB 708 million, net loss to RMB 778 million, and net loss attributable to shareholders to RMB 776 million, all significantly increasing from the prior period Loss for the Period Comparison (RMB thousands) | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Loss Before Income Tax | (708,332) | (345,238) | | Net Loss | (778,342) | (361,429) | | Net Loss Attributable to Equity Holders | (775,538) | (360,118) | [Liquidity, Financial and Capital Resources](index=30&type=section&id=Liquidity%2C%20Financial%20and%20Capital%20Resources) [Cash Position](index=30&type=section&id=Cash%20Position) As of June 30, 2025, the Group's total cash and bank balances were RMB 441 million, with RMB 255 million restricted, leaving net cash and cash equivalents at RMB 186 million, reflecting a tight cash position Cash and Bank Balances (RMB thousands) | Metric | As of June 30, 2025 | As of December 31, 2024 | | :--- | :--- | :--- | | Cash and Bank Balances | 440,872 | 373,802 | | Restricted Cash | 254,919 | 217,550 | [Indebtedness](index=30&type=section&id=Indebtedness) As of June 30, 2025, total bank and other borrowings were RMB 11.605 billion, with RMB 11.552 billion due within one year or on demand, indicating significant short-term repayment pressure, and most borrowings are fixed-rate Borrowing Type and Maturity (RMB thousands) | Loan Type | As of June 30, 2025 | As of December 31, 2024 | | :--- | :--- | :--- | | Secured Bank Loans | 5,072,665 | 5,340,153 | | Secured Other Borrowings | 4,263,965 | 4,119,741 | | Unsecured Other Borrowings | 2,268,715 | 2,210,990 | | **Total** | **11,605,345** | **11,670,884** | | Repayable Within One Year or On Demand | 11,551,811 | 11,618,346 | | Repayable in Second Year | 53,534 | 52,538 | - Approximately **RMB 11.32 billion** of bank and other borrowings bear fixed annual interest rates ranging from **1.2% to 12.00%**, while the remaining approximately **RMB 285 million** bear variable interest rates[78](index=78&type=chunk) [Net Gearing Ratio](index=31&type=section&id=Net%20Gearing%20Ratio) As of June 30, 2025, the Group's net gearing ratio increased by 16 percentage points to 168.6% from 152.6% at year-end 2024, indicating further increased leverage - The Group's net gearing ratio was approximately **168.6%** as of June 30, 2025, an increase of **16 percentage points** compared to **152.6%** as of December 31, 2024[79](index=79&type=chunk) [Pledge of Assets](index=31&type=section&id=Pledge%20of%20Assets) The Group's bank and other borrowings are secured by properties under development, investment properties, land held for development, completed properties for sale, buildings, and corporate guarantees and equity pledges from subsidiaries - The Group's bank and other loans are secured by properties under development, investment properties, land held for development for sale, completed properties held for sale, buildings, corporate guarantees executed by certain subsidiaries, and certain equity pledges of the Company's subsidiaries[43](index=43&type=chunk) [Foreign Exchange Rate Risk](index=31&type=section&id=Foreign%20Exchange%20Rate%20Risk) The Group, whose functional currency is RMB, faces foreign exchange risk from HKD and USD cash balances, and USD borrowings of RMB 1.842 billion and HKD borrowings of RMB 379 million, with management monitoring and considering hedging despite no current policy - The Group has cash and bank balances denominated in HKD and USD, as well as borrowings denominated in USD (**RMB 1.842 billion**) and HKD (**RMB 379 million**), exposing it to foreign currency risk[81](index=81&type=chunk) - The Group currently has no foreign currency hedging policy, but management monitors foreign exchange risk and considers hedging when necessary[81](index=81&type=chunk) [Contingent Liabilities](index=31&type=section&id=Contingent%20Liabilities) As of June 30, 2025, the Group had contingent liabilities of approximately RMB 132 million for customer mortgage loan guarantees and RMB 48.78 million for joint venture bank loan guarantees Contingent Liabilities (RMB thousands) | Item | As of June 30, 2025 | As of December 31, 2024 | | :--- | :--- | :--- | | Guarantees for Customers' Mortgage Loans | 132,380 | 156,320 | | Guarantees for Bank Loans of Joint Ventures | 48,780 | 56,110 | [Other Information](index=32&type=section&id=Other%20Information) [Employees and Remuneration Policy](index=32&type=section&id=Employees%20and%20Remuneration%20Policy) As of June 30, 2025, the Group had 300 full-time employees, a decrease from year-end 2024, with remuneration based on performance, experience, and market levels, subject to regular review for competitiveness - As of June 30, 2025, the Group had **300** full-time employees (December 31, 2024: **348**)[83](index=83&type=chunk) - The Group remunerates employees based on their performance, work experience, and prevailing market wage levels, and regularly reviews its remuneration policies and schemes[83](index=83&type=chunk)[84](index=84&type=chunk) [Interim Dividend](index=32&type=section&id=Interim%20Dividend) The Board resolved not to declare any interim dividend for the six months ended June 30, 2025 - The Board resolved not to declare any interim dividend for the period[85](index=85&type=chunk) [Compliance with Corporate Governance Code](index=32&type=section&id=Compliance%20with%20Corporate%20Governance%20Code) The Company complies with the Stock Exchange's Corporate Governance Code, though the Chairman and CEO roles are combined, deviating from C.2.1, an arrangement the Board deems in the Company's best interest and will review periodically - The Company has adopted and complied with the Corporate Governance Code set out in the Listing Rules, but the roles of Chairman and Chief Executive Officer are concurrently held by Mr. Jiang Xiuwen, deviating from Code Provision C.2.1[86](index=86&type=chunk) - The Board believes that Mr. Jiang Xiuwen concurrently holding both positions is in the best interests of the Company, ensuring more unified leadership and facilitating the implementation of business strategies[86](index=86&type=chunk) [Standard Code for Securities Transactions by Directors](index=32&type=section&id=Standard%20Code%20for%20Securities%20Transactions%20by%20Directors) The Company adopted the Standard Code for Securities Transactions by Directors as per Listing Rules Appendix C3, and all Directors confirmed compliance during the period - The Company has adopted the Standard Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix C3 to the Listing Rules, and all Directors have confirmed compliance with the Code during the period[87](index=87&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=32&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company%27s%20Listed%20Securities) During the period, neither the Company nor its subsidiaries purchased, sold, or redeemed any listed securities, and as of June 30, 2025, no treasury shares were held - During the period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities, and as of June 30, 2025, the Company held no treasury shares[88](index=88&type=chunk) [Major Investments Held, Material Acquisitions and Disposals of Subsidiaries, Associates and Joint Ventures](index=33&type=section&id=Major%20Investments%20Held%2C%20Material%20Acquisitions%20and%20Disposals%20of%20Subsidiaries%2C%20Associates%20and%20Joint%20Ventures) During the period, the Company had no major investments or material acquisitions and disposals of subsidiaries, associates, and joint ventures - During the period, the Company had no major investments or material acquisitions and disposals of subsidiaries, associates, and joint ventures[89](index=89&type=chunk) [Future Plans for Material Investments or Capital Assets](index=33&type=section&id=Future%20Plans%20for%20Material%20Investments%20or%20Capital%20Assets) During the period, the Group did not authorize any plans for material investments or additions to capital assets - During the period, the Group did not authorize any plans for material investments or additions to capital assets[90](index=90&type=chunk) [Audit Committee](index=33&type=section&id=Audit%20Committee) The Audit Committee, comprising three independent non-executive directors with Mr. Chan Yee Chuen as Chairman, reviews financial reporting and internal controls; the Company, non-compliant with Listing Rules from January 1-12, 2025, has since re-complied from January 13 - The Audit Committee comprises three independent non-executive directors, with Mr. Chan Yee Chuen, Eugene serving as Chairman and possessing appropriate professional qualifications[91](index=91&type=chunk) - The Committee's primary responsibilities include reviewing and overseeing the Group's financial reporting process and internal control system, and monitoring the audit process[91](index=91&type=chunk) - The Company failed to comply with Listing Rules 3.10(1), 3.10(2), 3.10A, and 3.21 from January 1 to January 12, 2025, but has since re-complied from January 13[91](index=91&type=chunk) [Review of Interim Results](index=33&type=section&id=Review%20of%20Interim%20Results) The Group's unaudited interim results for the six months ended June 30, 2025, have been reviewed and approved by the Audit Committee - The Group's unaudited interim results for the six months ended June 30, 2025, have been reviewed and approved by the Audit Committee[92](index=92&type=chunk) [Litigation and Arbitration](index=33&type=section&id=Litigation%20and%20Arbitration) The Group faces significant legal and debt issues, including a RMB 1.523 billion outstanding balance from an unfulfilled settlement with Andu Fang, a subsidiary's bribery conviction, and accelerated repayment demands for senior notes due to non-payment, following a previous winding-up petition - The final arbitration award with Andu Fang involved a put option price of **USD 108 million** and accrued interest of **USD 84 million**; the settlement agreement stipulated a total payment obligation of **USD 175 million**, but as of the announcement date, the respondent had not fulfilled all payment obligations, with an outstanding balance payable to Andu Fang (including accrued interest) of **RMB 1,522,726,000**[93](index=93&type=chunk)[94](index=94&type=chunk)[95](index=95&type=chunk)[103](index=103&type=chunk) - Dalian Service Outsourcing Base Development Co., Ltd., a wholly-owned subsidiary of the Company, was convicted of bribery due to the actions of a former employee[96](index=96&type=chunk) - The senior notes have been subject to acceleration notices from holders due to non-payment of consent fees, alternative accrued interest, and accrued interest, requiring immediate repayment of principal, premium, and accrued unpaid interest; a winding-up petition against the Company was previously filed but has been approved for withdrawal[99](index=99&type=chunk)[100](index=100&type=chunk) [Disclosure Pursuant to Rule 13.21 of the Listing Rules](index=35&type=section&id=Disclosure%20Pursuant%20to%20Rule%2013.21%20of%20the%20Listing%20Rules) The Company disclosed multiple breaches of material loan agreements, including controlling shareholder liquidity issues, a former executive director's detention, overdue senior notes and other borrowings, and forced execution on subsidiary loans, potentially triggering immediate repayment of RMB 5.107 billion in other borrowings, while the Company seeks new financing - China Minsheng Investment Corp., Ltd., the Company's controlling shareholder, faces liquidity difficulties, leading to trigger events under certain loan agreements[102](index=102&type=chunk) - Mr. Chen Donghui, a former executive director, was detained, further leading to trigger events under certain loan agreements[103](index=103&type=chunk) - Since 2020, the Group has failed to repay certain borrowings by their scheduled repayment dates, with a total principal amount of **RMB 6,444,986,000** remaining unsettled as of June 30, 2025[104](index=104&type=chunk) - Dalian Shengbei Development Co., Ltd., a subsidiary, failed to repay its loan on time, and the creditor, China CITIC Bank Dalian Branch, has applied for forced execution of approximately **RMB 194 million** in loan principal and related interest and penalties[103](index=103&type=chunk) - The aforementioned default events resulted in certain other borrowings (excluding overdue borrowings) totaling **RMB 5,106,826,000** as of June 30, 2025, becoming immediately repayable if demanded by lenders[104](index=104&type=chunk) [Specific Performance with Controlling Shareholder](index=37&type=section&id=Specific%20Performance%20with%20Controlling%20Shareholder) Under the settlement agreement with Andu Fang, the outstanding balance of the total payment obligation becomes due if the controlling shareholder, China Minsheng Investment Corp., Ltd., or its subsidiaries, fails to maintain 35% or more beneficial share ownership - According to the settlement agreement, if the controlling shareholder fails to maintain beneficial ownership of **35%** or more of the shares, the outstanding balance of the total payment obligation, together with accrued interest and all other accrued or unpaid amounts, will become due on the thirtieth day following the change of control[105](index=105&type=chunk) [Pledge of Shares by Controlling Shareholder](index=37&type=section&id=Pledge%20of%20Shares%20by%20Controlling%20Shareholder) Controlling shareholder Jiayou (International) Investment Co., Ltd. pledged 517 million shares (19.99% of total issued shares) to Andu Fang as collateral; in May 2022, receivers were appointed, and Jiayou lost the power to deal with or exercise rights related to these shares - Controlling shareholder Jiayou (International) Investment Co., Ltd. has pledged its **516,764,000** shares (approximately **19.99%** of the Company's total issued shares) to Andu Fang as collateral for obligations under the settlement agreement[106](index=106&type=chunk) - In May 2022, joint and several receivers were appointed, and Jiayou no longer possesses the power to deal with or exercise any rights attached to or associated with the charged shares[106](index=106&type=chunk) [Publication of Interim Results and Interim Report on HKEX and Company Website](index=38&type=section&id=Publication%20of%20Interim%20Results%20and%20Interim%20Report%20on%20HKEX%20and%20Company%20Website) 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 available on these sites - This interim results announcement is published on the HKEX website www.hkexnews.hk and the Company's website www.yidachina.com[107](index=107&type=chunk) [Board of Directors](index=38&type=section&id=Board%20of%20Directors) As of the announcement date, the Board comprises executive directors Mr. Jiang Xiuwen (Chairman and CEO) and Mr. Yuan Wensheng, non-executive directors Mr. Lu Jianhua, Mr. Wang Gang, and Ms. Jiang Qian, and independent non-executive directors Mr. Guo Shaomu, Mr. Chan Yee Chuen, Eugene, and Mr. Tang Yongzhi - The executive directors are Mr. Jiang Xiuwen (Chairman and Chief Executive Officer) and Mr. Yuan Wensheng; the non-executive directors are Mr. Lu Jianhua, Mr. Wang Gang, and Ms. Jiang Qian; and the independent non-executive directors are Mr. Guo Shaomu, Mr. Chan Yee Chuen, Eugene, and Mr. Tang Yongzhi[109](index=109&type=chunk)

Company Overview and Important Statements [Company Information and GEM Characteristics](index=1&type=section&id=Company%20Information%20and%20GEM%20Characteristics) Harbour Equine Holdings Limited (stock code: 8377) is a Cayman Islands-incorporated company listed on the Hong Kong Stock Exchange GEM, a market for SMEs with potentially higher investment risks - Company Name: **HARBOUR EQUINE HOLDINGS LIMITED**[2](index=2&type=chunk) - Stock Code: **8377**[2](index=2&type=chunk) - Place of Incorporation: **Cayman Islands**[2](index=2&type=chunk) - Listing Market: **GEM of The Stock Exchange of Hong Kong**, which provides a listing platform for small and medium-sized companies and may involve higher investment risks and market volatility[2](index=2&type=chunk) [Directors' Responsibility Statement](index=1&type=section&id=Directors%27%20Responsibility%20Statement) The company's directors collectively and individually assume full responsibility for the information in this announcement, confirming its accuracy and completeness - Directors collectively and individually assume full responsibility for the information contained in this announcement[2](index=2&type=chunk) - Directors confirm that the information contained in this announcement is accurate and complete in all material respects, free from misleading or fraudulent elements, and without omission of any other matters[2](index=2&type=chunk) Financial Performance Overview [Unaudited Condensed Consolidated Statement of Profit or Loss](index=2&type=section&id=Unaudited%20Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss) For the six months ended June 30, 2025, the Group achieved revenue of HK$16,651 thousand, gross profit of HK$5,160 thousand, and turned a loss of HK$13,483 thousand into a profit of HK$12,006 thousand, with basic and diluted earnings per share of 2.93 HK cents Condensed Consolidated Statement of Profit or Loss Key Data (For the six months ended June 30) | Indicator | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change | | :--- | :--- | :--- | :--- | | Revenue | 16,651 | 20,715 | -19.6% | | Cost of sales | (11,491) | (22,745) | -49.5% | | Gross profit/(loss) | 5,160 | (2,030) | Turned from loss to profit | | Net other gains and (losses) | 10,940 | (860) | Significant increase | | Administrative expenses | (2,782) | (7,317) | -61.9% | | Profit/(loss) before tax | 12,139 | (13,483) | Turned from loss to profit | | Profit/(loss) for the period | 12,006 | (13,483) | Turned from loss to profit | | Profit/(loss) per share attributable to owners of the Company (HK cents) | 2.93 | (3.30) | Turned from loss to profit | - Profit for the period turned from a loss of **HK$13,483 thousand** in the same period of 2024 to a profit of **HK$12,006 thousand** in the same period of 2025, primarily due to gains from disposal of a subsidiary and cost control[3](index=3&type=chunk)[32](index=32&type=chunk) [Unaudited Condensed Consolidated Statement of Comprehensive Income](index=3&type=section&id=Unaudited%20Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) For the six months ended June 30, 2025, the Group recorded a total comprehensive profit of HK$9,680 thousand, a significant improvement from the total comprehensive loss of HK$15,060 thousand in the prior year, mainly due to the profit for the period turning positive, partially offset by exchange differences on overseas operations Condensed Consolidated Statement of Comprehensive Income Key Data (For the six months ended June 30) | Indicator | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change | | :--- | :--- | :--- | :--- | | Profit/(loss) for the period | 12,006 | (13,483) | Turned from loss to profit | | Exchange differences on translation of overseas operations | (2,326) | (1,577) | Loss widened | | Total comprehensive profit/(loss) for the period | 9,680 | (15,060) | Turned from loss to profit | - Total comprehensive profit for the period turned from a loss of **HK$15,060 thousand** in the same period of 2024 to a profit of **HK$9,680 thousand** in the same period of 2025[4](index=4&type=chunk) - Exchange differences on translation of overseas operations increased from a loss of **HK$1,577 thousand** to **HK$2,326 thousand**, negatively impacting comprehensive income[4](index=4&type=chunk) Financial Position [Consolidated Statement of Financial Position](index=4&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the Group's total assets less current liabilities increased to HK$15,378 thousand, net current assets significantly improved to HK$8,614 thousand, and net liabilities substantially decreased to HK$5,519 thousand, reflecting an improved financial position Consolidated Statement of Financial Position Key Data (As of June 30, 2025) | Indicator | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | Change | | :--- | :--- | :--- | :--- | | Non-current assets | 6,764 | 7,591 | -11.0% | | Current assets | 24,088 | 27,079 | -11.1% | | Assets classified as held for sale | – | 6,478 | -100% | | Current liabilities | 15,474 | 17,018 | -9.1% | | Liabilities associated with assets classified as held for sale | – | 16,307 | -100% | | Net current assets | 8,614 | 232 | +3613.8% | | Total assets less current liabilities | 15,378 | 7,823 | +96.6% | | Non-current liabilities | 20,897 | 23,022 | -9.2% | | Net liabilities | (5,519) | (15,199) | Loss reduced | | Total equity | (5,519) | (15,199) | Loss reduced | - Net current assets significantly increased from **HK$232 thousand** as of December 31, 2024, to **HK$8,614 thousand** as of June 30, 2025[6](index=6&type=chunk) - Net liabilities decreased from **HK$15,199 thousand** as of December 31, 2024, to **HK$5,519 thousand** as of June 30, 2025, indicating an improvement in financial leverage[6](index=6&type=chunk) [Unaudited Condensed Consolidated Statement of Changes in Equity](index=6&type=section&id=Unaudited%20Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) For the six months ended June 30, 2025, the Group's total equity improved from a deficit of HK$15,199 thousand at the beginning of the period to a deficit of HK$5,519 thousand at the end, primarily due to profit for the period, partially offset by exchange differences on overseas operations and the effect of the lapse of disposal of a subsidiary Condensed Consolidated Statement of Changes in Equity Key Data (For the six months ended June 30) | Indicator | January 1, 2025 (HK$ thousand) | June 30, 2025 (HK$ thousand) | Change | | :--- | :--- | :--- | :--- | | Total equity | (15,199) | (5,519) | Increased by 9,680 | | Profit for the period | 12,006 | - | Increased by 12,006 | | Exchange differences on translation of overseas operations | - | (2,326) | Decreased by 2,326 | | Lapse of disposal of a subsidiary | - | - | Zero impact | - As of June 30, 2025, total equity was a deficit of **HK$5,519 thousand**, an improvement from a deficit of **HK$15,199 thousand** as of January 1, 2025[7](index=7&type=chunk) - Profit for the period of **HK$12,006 thousand** is the main driver of the increase in equity[7](index=7&type=chunk) - Exchange differences on translation of overseas operations resulted in other comprehensive loss of **HK$2,326 thousand**[7](index=7&type=chunk) Cash Flows [Unaudited Condensed Consolidated Statement of Cash Flows](index=7&type=section&id=Unaudited%20Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) For the six months ended June 30, 2025, the Group's net cash generated from operating activities significantly increased to HK$4,189 thousand, cash outflow from investing activities was HK$638 thousand, cash outflow from financing activities was HK$1,860 thousand, and cash and cash equivalents at period-end were HK$3,149 thousand Condensed Consolidated Statement of Cash Flows Key Data (For the six months ended June 30) | Indicator | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change | | :--- | :--- | :--- | :--- | | Net cash generated from operating activities | 4,189 | 1,656 | +152.9% | | Net cash (used in)/generated from investing activities | (638) | 7,205 | Turned from inflow to outflow | | Net cash (used in)/generated from financing activities | (1,860) | (7,320) | Outflow decreased | | Net increase in cash and cash equivalents | 1,691 | 1,541 | +9.7% | | Cash and cash equivalents at end of period | 3,149 | 4,087 | -22.9% | - Net cash generated from operating activities increased from **HK$1,656 thousand** in the same period of 2024 to **HK$4,189 thousand** in the same period of 2025, primarily due to the profit before tax turning positive and changes in working capital[9](index=9&type=chunk) - Cash flow from investing activities turned from a net inflow of **HK$7,205 thousand** in the same period of 2024 to a net outflow of **HK$638 thousand** in the same period of 2025, mainly due to reduced proceeds from disposal of investment properties and fixed assets[11](index=11&type=chunk) - Net cash outflow from financing activities decreased from **HK$7,320 thousand** in the same period of 2024 to **HK$1,860 thousand** in the same period of 2025, primarily due to reduced repayment of borrowings[11](index=11&type=chunk) Notes to the Condensed Consolidated Financial Statements [Company and Group Information](index=9&type=section&id=Company%20and%20Group%20Information) The Company is an investment holding company, with its subsidiaries primarily engaged in interior design and decoration, thoroughbred horse trading and management, and securities advisory, corporate finance, and asset management services; the ultimate controlling company is Three Gates Investment Limited, controlled by Mr. Wong Kwok Wai - The Company is an investment holding company, with its principal businesses including sewing thread manufacturing and trading (disposed of), interior design and decoration, equine services, and securities advisory, corporate finance, and asset management services[12](index=12&type=chunk) - The Group's ultimate controlling company is **Three Gates Investment Limited**, controlled by **Mr. Wong Kwok Wai**[12](index=12&type=chunk) Principal Subsidiaries and Their Businesses | Name | Place of Incorporation/Operation | Principal Business | | :--- | :--- | :--- | | Sun Yau (China) Limited | Hong Kong | Investment holding | | Sun Yau Chen Xin Enterprise (Shanghai) Co., Ltd. | China/Mainland China | Investment holding | | Drill Bright Limited | Hong Kong | Investment holding | | Pui Ming International Limited | Hong Kong | Provision of interior design, decoration and fitting-out services | | Better Dynasty Limited | Hong Kong | Investment holding | | Harbour Equine Limited | Hong Kong | Investment holding | | Thrill Rank Company Limited | British Virgin Islands | Investment holding | | Harbour Equine Pty Ltd | Australia | Horse breeding | | Harbour Stallion Pty Ltd | Australia | Horse breeding | | Harbour Racing Limited | Hong Kong | Horse management services | | Huayu Asset Management Limited | Hong Kong | Provision of corporate finance advisory services and asset management services | [Basis of Preparation and Accounting Policies](index=10&type=section&id=Basis%20of%20Preparation%20and%20Accounting%20Policies) The condensed consolidated financial statements are prepared in accordance with Hong Kong Financial Reporting Standards issued by the HKICPA and comply with GEM Listing Rules and Companies Ordinance disclosure requirements, with consistent accounting policies as the 2024 annual consolidated financial statements - The financial statements are prepared in accordance with all applicable Hong Kong Financial Reporting Standards issued by the Hong Kong Institute of Certified Public Accountants[14](index=14&type=chunk) - The accounting policies and methods of computation are consistent with those adopted in the consolidated financial statements for the year ended December 31, 2024[14](index=14&type=chunk) - The Group has not yet applied new Hong Kong Financial Reporting Standards that have been issued but are not yet effective, and is assessing their potential impact[15](index=15&type=chunk) [Operating Segment Information](index=11&type=section&id=Operating%20Segment%20Information) The Group primarily operates in three segments: interior design and decoration, equine services, and securities, corporate finance, and asset management; interior design and decoration revenue significantly grew, while equine services revenue substantially declined, and the sewing thread manufacturing and trading segment was disposed of during the period - The Group has three reportable segments: interior design and decoration, equine services, and advisory on securities, corporate finance, and asset management[17](index=17&type=chunk) - The sewing thread manufacturing and trading segment was disposed of on **January 27, 2025**[31](index=31&type=chunk) [Segment Revenue and Results](index=12&type=section&id=Segment%20Revenue%20and%20Results) For the six months ended June 30, 2025, the interior design and decoration segment contributed most of the revenue (HK$14,584 thousand) and primary segment profit (HK$1,607 thousand), while equine services revenue and results significantly declined, and the securities, corporate finance, and asset management segment saw growth in both revenue and profit Segment Revenue (For the six months ended June 30) | Segment | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change | | :--- | :--- | :--- | :--- | | Sewing thread manufacturing and trading | – | 4,125 | -100% | | Interior design and decoration | 14,584 | 10,450 | +39.6% | | Equine services | 17 | 4,646 | -99.6% | | Securities, corporate finance and asset management | 2,050 | 1,494 | +37.2% | | **Total** | **16,651** | **20,715** | **-19.6%** | Segment Profit/(Loss) (For the six months ended June 30) | Segment | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change | | :--- | :--- | :--- | :--- | | Sewing thread manufacturing and trading | – | (5,176) | Turned from loss to zero | | Interior design and decoration | 1,607 | 253 | +535.2% | | Equine services | (54) | (5,961) | Loss significantly reduced | | Securities, corporate finance and asset management | 107 | 1,424 | -92.5% | | **Total** | **1,660** | **(9,460)** | **Turned from loss to profit** | - Interior design and decoration segment revenue grew **39.6%**, with segment profit increasing from **HK$253 thousand** to **HK$1,607 thousand**[18](index=18&type=chunk) - Equine services segment revenue significantly decreased by **99.6%**, with segment loss reducing from **HK$5,961 thousand** to **HK$54 thousand**[18](index=18&type=chunk) [Geographical Revenue Analysis](index=13&type=section&id=Geographical%20Revenue%20Analysis) For the six months ended June 30, 2025, Hong Kong contributed the vast majority of revenue (HK$16,634 thousand), overseas revenue significantly declined, and there was no revenue from China Revenue by Geographical Location (For the six months ended June 30) | Geographical Location | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change | | :--- | :--- | :--- | :--- | | China | – | 260 | -100% | | Hong Kong | 16,634 | 12,047 | +38.1% | | Overseas | 17 | 8,408 | -99.8% | | **Total** | **16,651** | **20,715** | **-19.6%** | - Hong Kong revenue increased from **HK$12,047 thousand** to **HK$16,634 thousand**, becoming the primary source of income[19](index=19&type=chunk) - Overseas revenue significantly decreased from **HK$8,408 thousand** to **HK$17 thousand**, and there was no revenue from China[19](index=19&type=chunk) [Segment Assets and Liabilities](index=13&type=section&id=Segment%20Assets%20and%20Liabilities) As of June 30, 2025, the Group's total consolidated assets were HK$30,852 thousand, and total consolidated liabilities were HK$36,371 thousand, with the interior design and decoration segment having a larger proportion of assets and liabilities, and equine services segment liabilities significantly reduced Segment Assets (As of June 30) | Segment | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | Change | | :--- | :--- | :--- | :--- | | Sewing thread manufacturing and trading | – | 31 | -100% | | Interior design and decoration | 22,452 | 26,750 | -16.1% | | Equine services | 636 | 779 | -18.4% | | Securities, corporate finance and asset management | 206 | 146 | +41.1% | | **Total Segment Assets** | **23,294** | **27,706** | **-15.9%** | | Assets classified as held for sale | – | 6,478 | -100% | | Unallocated corporate assets | 7,558 | 6,964 | +8.5% | | **Total Consolidated Assets** | **30,852** | **41,148** | **-25.0%** | Segment Liabilities (As of June 30) | Segment | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | Change | | :--- | :--- | :--- | :--- | | Sewing thread manufacturing and trading | – | (338) | Turned from liability to zero | | Interior design and decoration | (4,793) | (6,947) | -31.0% | | Equine services | (3,555) | (17,931) | -80.2% | | Securities, corporate finance and asset management | (6) | (13) | -53.8% | | **Total Segment Liabilities** | **(8,354)** | **(25,229)** | **-66.9%** | | Liabilities associated with assets classified as held for sale | – | (16,307) | -100% | | Unallocated corporate liabilities | (28,017) | (14,811) | +89.2% | | **Total Consolidated Liabilities** | **(36,371)** | **(56,347)** | **-35.5%** | - Equine services segment liabilities significantly decreased from **HK$17,931 thousand** as of December 31, 2024, to **HK$3,555 thousand** as of June 30, 2025[19](index=19&type=chunk) [Net Other Gains and Losses](index=14&type=section&id=Net%20Other%20Gains%20and%20Losses) For the six months ended June 30, 2025, the Group recorded net other gains of HK$10,940 thousand, a significant improvement from a loss of HK$860 thousand in the prior year, primarily due to a gain of HK$10,848 thousand from the disposal of a subsidiary Net Other Gains and Losses (For the six months ended June 30) | Item | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change | | :--- | :--- | :--- | :--- | | Bank interest income | 1 | 1 | Flat | | Net exchange gain/(loss) | 137 | 849 | Decreased | | Fair value loss on investment properties | – | (700) | Loss turned to zero | | (Loss)/gain on disposal of fixed assets | (46) | 976 | Turned from gain to loss | | Loss on disposal of biological assets | – | (2,622) | Loss turned to zero | | Gain on disposal of a subsidiary | 10,848 | – | New gain | | **Total** | **10,940** | **(860)** | **Turned from loss to gain** | - A gain of **HK$10,848 thousand** from the disposal of a subsidiary was the main reason for the significant increase in net other gains[20](index=20&type=chunk)[42](index=42&type=chunk) [Finance Costs](index=14&type=section&id=Finance%20Costs) For the six months ended June 30, 2025, the Group's finance costs were HK$1,179 thousand, a 45.8% decrease from HK$2,175 thousand in the prior year, primarily due to a reduction in interest on borrowings Finance Costs (For the six months ended June 30) | Item | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change | | :--- | :--- | :--- | :--- | | Interest on lease liabilities | 14 | 40 | -65.0% | | Interest on borrowings | 1,165 | 2,135 | -45.4% | | **Total** | **1,179** | **2,175** | **-45.8%** | - Interest on borrowings decreased from **HK$2,135 thousand** to **HK$1,165 thousand**, which was the main reason for the decrease in finance costs[21](index=21&type=chunk) [Items Deducted From/(Credited To) Profit/(Loss) Before Tax](index=15&type=section&id=Items%20Deducted%20From%2F%28Credited%20To%29%20Profit%2F%28Loss%29%20Before%20Tax) This section details the major expenses and gains affecting profit/loss before tax, including cost of inventories sold, depreciation, and employee benefit expenses, with significant reductions in employee benefit expenses and cost of inventories sold Items Deducted From/(Credited To) Profit/(Loss) Before Tax (For the six months ended June 30) | Item | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change | | :--- | :--- | :--- | :--- | | Cost of inventories sold | 10,209 | 13,544 | -24.7% | | Depreciation of fixed assets | 77 | 544 | -85.8% | | Depreciation of right-of-use assets | 223 | 408 | -45.3% | | Employee benefit expenses (excluding directors' emoluments) | 639 | 6,262 | -89.8% | | Net exchange gain | (137) | (849) | Gain decreased | | Gain/(loss) on disposal of fixed assets | 46 | (976) | Turned from gain to loss | | Loss on disposal of biological assets | – | 2,622 | Loss turned to zero | - Employee benefit expenses (excluding directors' emoluments) significantly decreased from **HK$6,262 thousand** to **HK$639 thousand**[22](index=22&type=chunk) - Cost of inventories sold decreased from **HK$13,544 thousand** to **HK$10,209 thousand**[22](index=22&type=chunk) [Income Tax](index=15&type=section&id=Income%20Tax) For the six months ended June 30, 2025, the Group's income tax expense was HK$133 thousand, primarily from Hong Kong and Mainland China, with no income tax expense in the prior year; Hong Kong profits tax is levied at 16.5%, with a two-tiered tax rate applicable to certain eligible subsidiaries Income Tax Expense (For the six months ended June 30) | Item | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change | | :--- | :--- | :--- | :--- | | Current (Hong Kong and Mainland China) | 133 | – | New expense | | Deferred | – | – | Flat | | **Tax (credit)/expense** | **133** | **–** | **New expense** | - Hong Kong profits tax is levied at **16.5%**, with eligible subsidiaries subject to an **8.25%** tax rate on the first **HK$2,000,000** of assessable profits under the two-tiered profits tax regime[23](index=23&type=chunk) [Dividends](index=16&type=section&id=Dividends) The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025, consistent with the prior year - The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025 (2024: nil)[26](index=26&type=chunk)[48](index=48&type=chunk) [Profit/(Loss) Per Share Attributable to Owners of the Company](index=16&type=section&id=Profit%2F%28Loss%29%20Per%20Share%20Attributable%20to%20Owners%20of%20the%20Company) For the six months ended June 30, 2025, basic and diluted profit per share attributable to owners of the Company was 2.93 HK cents, a significant improvement from a loss of 3.30 HK cents in the prior year, primarily due to increased profit for the period Profit/(Loss) Per Share (For the six months ended June 30) | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | Profit/(loss) attributable to owners of the Company (HK$ thousand) | 12,006 | (13,483) | | Weighted average number of ordinary shares | 409,141,860 | 409,141,860 | | Basic and diluted profit/(loss) per share (HK cents) | 2.93 | (3.30) | - Basic and diluted profit per share turned from a loss of **3.30 HK cents** in the same period of 2024 to a profit of **2.93 HK cents** in the same period of 2025[28](index=28&type=chunk)[47](index=47&type=chunk) [Analysis of Trade Balances](index=16&type=section&id=Analysis%20of%20Trade%20Balances) This section provides an aging analysis of trade receivables and trade payables, showing an increase in trade receivables and a decrease in trade payables [Trade Receivables](index=16&type=section&id=Trade%20Receivables) As of June 30, 2025, total trade receivables were HK$13,342 thousand, an increase from HK$10,985 thousand as of December 31, 2024, with the proportion of amounts over three months remaining stable Aging Analysis of Trade Receivables (As of June 30) | Aging | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | Change | | :--- | :--- | :--- | :--- | | Less than 1 month | 1,365 | 5,977 | -77.2% | | 1 to 2 months | 3,350 | 621 | +439.4% | | 2 to 3 months | 4,575 | 422 | +984.1% | | Over 3 months | 4,232 | 4,144 | +2.1% | | **Total (net of allowance)** | **13,342** | **10,985** | **+21.5%** | - Total trade receivables increased from **HK$10,985 thousand** to **HK$13,342 thousand**[29](index=29&type=chunk) [Trade Payables](index=17&type=section&id=Trade%20Payables) As of June 30, 2025, total trade payables were HK$4,600 thousand, a decrease from HK$6,721 thousand as of December 31, 2024, with amounts less than one month now at zero Aging Analysis of Trade Payables (As of June 30) | Aging | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | Change | | :--- | :--- | :--- | :--- | | Less than 1 month | – | 5,056 | -100% | | 1 to 2 months | – | 545 | -100% | | 2 to 3 months | 97 | 55 | +76.4% | | Over 3 months | 4,503 | 1,065 | +322.0% | | **Total** | **4,600** | **6,721** | **-31.6%** | - Total trade payables decreased from **HK$6,721 thousand** to **HK$4,600 thousand**[30](index=30&type=chunk) [Share Capital](index=17&type=section&id=Share%20Capital) As of June 30, 2025, the Company's authorized share capital was HK$50,000 thousand, and issued and fully paid share capital was HK$20,457 thousand, comprising 409,141,860 ordinary shares of HK$0.05 each, with no changes during the reporting period Share Capital Movement (As of June 30) | Item | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | Change | | :--- | :--- | :--- | :--- | | Authorized share capital (1,000,000,000 ordinary shares of HK$0.05 each) | 50,000 | 50,000 | Flat | | Issued and fully paid share capital (409,141,860 ordinary shares of HK$0.05 each) | 20,457 | 20,457 | Flat | - The Company's share capital structure remained unchanged during the reporting period[30](index=30&type=chunk)[53](index=53&type=chunk) Business and Financial Review [Business Review](index=18&type=section&id=Business%20Review) The Group's principal businesses include interior design and decoration, equine services, and securities advisory, corporate finance, and asset management; the sewing thread manufacturing and trading segment was disposed of in January 2025, and management is actively seeking new interior design projects and securities clients while reducing resources in the thoroughbred market - The Group is principally engaged in providing interior design, interior decoration and fitting-out services, thoroughbred horse trading, stallion services and horse management services, and securities advisory, corporate finance and asset management services[31](index=31&type=chunk) - The principal operating subsidiary of the sewing thread manufacturing and trading segment was disposed of on **January 27, 2025**[31](index=31&type=chunk) - Demand for interior design and decoration business in Hong Kong and the Greater Bay Area is increasing, and management is negotiating new projects[31](index=31&type=chunk)[34](index=34&type=chunk) - The equine business segment has disposed of underperforming and unpopular breeding stock to reduce future maintenance costs and resource allocation[31](index=31&type=chunk)[35](index=35&type=chunk) - Management of the securities, corporate finance and asset management segment is seeking new clients[32](index=32&type=chunk)[36](index=36&type=chunk) [Financial Review](index=19&type=section&id=Financial%20Review) For the six months ended June 30, 2025, the Group's revenue decreased by 19.6% year-on-year to HK$16.7 million, but gross profit turned from a loss to a profit of HK$5.2 million; profit for the period turned from a loss of HK$13.5 million to a profit of HK$12.0 million, mainly due to gains from disposal of a subsidiary, reduced cost of sales, and administrative expenses - The Group recorded unaudited revenue of approximately **HK$16.7 million**, a decrease of approximately **19.6%** compared to the same period last year[32](index=32&type=chunk) - The Group recorded a gross profit of **HK$5.2 million**, compared to a gross loss of **HK$2.0 million** in the same period last year[32](index=32&type=chunk)[41](index=41&type=chunk) - Profit attributable to owners of the Company increased from a loss of approximately **HK$13.5 million** in the same period last year to a profit of approximately **HK$12.0 million**[32](index=32&type=chunk) - The increase in profit was primarily due to the gain on disposal of a subsidiary and reduced cost of sales, administrative expenses, and finance costs in the equine segment[32](index=32&type=chunk) [Revenue Analysis](index=19&type=section&id=Revenue%20Analysis) Total Group revenue decreased by 19.6% year-on-year, mainly due to the disposal of the sewing thread manufacturing and trading segment and a significant reduction in equine services revenue; interior design and decoration, and securities, corporate finance, and asset management segments both achieved significant revenue growth Segment Revenue Details (For the six months ended June 30) | Segment | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change Rate (%) | | :--- | :--- | :--- | :--- | | Sewing thread manufacturing and trading | – | 4,125 | Not applicable | | Interior design and decoration | 14,584 | 10,450 | 39.6 | | Equine services | 17 | 4,646 | –99.6 | | Advisory on securities, corporate finance and asset management | 2,050 | 1,494 | 37.2 | | **Total** | **16,651** | **20,715** | **–19.6** | - Interior design and decoration revenue increased by **39.6%** to **HK$14.6 million**, with management expecting continued growth in the second half of the year[34](index=34&type=chunk) - Equine services revenue significantly decreased by **99.6%** to **HK$17 thousand** due to the sluggish thoroughbred market, leading management to reduce resource allocation[35](index=35&type=chunk) - Securities, corporate finance and asset management segment revenue increased by **37.2%** to **HK$2 million**[36](index=36&type=chunk) [Cost of Sales Analysis](index=20&type=section&id=Cost%20of%20Sales%20Analysis) Total Group cost of sales significantly decreased by 49.5% year-on-year to HK$11.5 million, primarily due to the disposal of the sewing thread manufacturing and trading segment and reduced resource allocation in the equine services segment; interior design and decoration cost of sales increased due to higher direct material costs Segment Cost of Sales Details (For the six months ended June 30) | Segment | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change Rate (%) | | :--- | :--- | :--- | :--- | | Sewing thread manufacturing and trading | – | 5,526 | Not applicable | | Interior design and decoration | 11,474 | 8,525 | 34.6 | | Equine services | 17 | 8,694 | –99.8 | | Advisory on securities, corporate finance and asset management | – | – | – | | **Total** | **11,491** | **22,745** | **–49.5** | - Interior design and decoration cost of sales increased by **34.6%** to **HK$11.5 million**, mainly due to higher direct material costs[38](index=38&type=chunk) - Equine services cost of sales significantly decreased by **99.8%** to **HK$17 thousand** due to reduced resource allocation to this segment[39](index=39&type=chunk) - The securities, corporate finance and asset management segment had no cost of sales[40](index=40&type=chunk) [Gross Profit and Gross Profit Margin](index=21&type=section&id=Gross%20Profit%20and%20Gross%20Profit%20Margin) For the six months ended June 30, 2025, the Group's gross profit turned from a gross loss of HK$2 million in the prior year to a gross profit of HK$5.2 million, with the gross profit margin improving from negative 9.8% to 31% - Gross profit turned from a gross loss of **HK$2 million** in the same period of 2024 to a gross profit of **HK$5.2 million** in the same period of 2025[41](index=41&type=chunk) - Gross profit margin increased from **negative 9.8%** to **31%**[41](index=41&type=chunk) - Interior design and decoration and securities, corporate finance and asset management segments recorded gross profits of **HK$3.1 million** and **HK$2.1 million**, respectively[41](index=41&type=chunk) [Net Other Gains and Losses](index=21&type=section&id=Net%20Other%20Gains%20and%20Losses) For the six months ended June 30, 2025, the Group recorded net other gains of approximately HK$10.9 million, a significant improvement from a loss of approximately HK$0.9 million in the prior year, primarily due to gains from the disposal of a subsidiary - Net other gains turned from a loss of approximately **HK$0.9 million** in the same period of 2024 to a gain of approximately **HK$10.9 million** in the same period of 2025[42](index=42&type=chunk) - The change was primarily due to the gain on disposal of a subsidiary[42](index=42&type=chunk) [Selling and Distribution Expenses](index=21&type=section&id=Selling%20and%20Distribution%20Expenses) For the six months ended June 30, 2025, the Group had no selling and distribution expenses, compared to approximately HK$1.1 million in the prior year, mainly due to the disposal of the sewing thread manufacturing and trading segment - Selling and distribution expenses decreased from approximately **HK$1.1 million** in the same period of 2024 to **zero** in the same period of 2025, primarily due to the disposal of the sewing thread manufacturing and trading segment[43](index=43&type=chunk) [Administrative Expenses](index=22&type=section&id=Administrative%20Expenses) Administrative expenses decreased by approximately 61.6% year-on-year to approximately HK$2.8 million, mainly due to reduced staff costs and directors' emoluments - Administrative expenses decreased from approximately **HK$7.3 million** in the same period of 2024 to approximately **HK$2.8 million** in the same period of 2025, a reduction of approximately **61.6%**[44](index=44&type=chunk) - The reduction was primarily due to decreased staff costs and directors' emoluments compared to the prior year[44](index=44&type=chunk) [Profit/(Loss) Before Income Tax](index=22&type=section&id=Profit%2F%28Loss%29%20Before%20Income%20Tax) The Group recorded a profit before income tax of approximately HK$12.1 million for the six months ended June 30, 2025, a significant improvement from a loss of approximately HK$13.5 million in the prior year - Profit before income tax turned from a loss of approximately **HK$13.5 million** in the same period of 2024 to a profit of approximately **HK$12.1 million** in the same period of 2025[45](index=45&type=chunk) [Total Comprehensive Profit/(Loss) Attributable to Owners of the Company](index=22&type=section&id=Total%20Comprehensive%20Profit%2F%28Loss%29%20Attributable%20to%20Owners%20of%20the%20Company) For the six months ended June 30, 2025, total comprehensive profit attributable to owners of the Company was approximately HK$9.7 million, compared to a total comprehensive loss of approximately HK$15.1 million in the prior year, mainly due to reduced losses in the equine services and sewing thread manufacturing and trading segments, and gains from disposal of a subsidiary - Total comprehensive profit attributable to owners of the Company turned from a loss of approximately **HK$15.1 million** in the same period of 2024 to a profit of approximately **HK$9.7 million** in the same period of 2025[46](index=46&type=chunk) - The change was primarily due to reduced losses in the equine services and sewing thread manufacturing and trading segments, and gains from the disposal of a subsidiary[46](index=46&type=chunk) [Basic and Diluted Profit/(Loss) Per Share](index=22&type=section&id=Basic%20and%20Diluted%20Profit%2F%28Loss%29%20Per%20Share) For the six months ended June 30, 2025, basic and diluted profit per share was 2.93 HK cents, a significant improvement from a loss of 3.3 HK cents in the prior year, mainly due to increased profit for the period - Basic and diluted profit per share turned from a loss of **3.3 HK cents** in the same period of 2024 to a profit of **2.93 HK cents** in the same period of 2025[47](index=47&type=chunk) [Interim Dividend](index=22&type=section&id=Interim%20Dividend) The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025, consistent with the prior year - The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025 (2024: nil)[48](index=48&type=chunk) [Liquidity and Financial Resources](index=22&type=section&id=Liquidity%20and%20Financial%20Resources) As of June 30, 2025, the Group's cash and bank balances were approximately HK$3.1 million, net current assets were approximately HK$8.6 million, and the current ratio remained at approximately 1.56, indicating good liquidity - As of June 30, 2025, cash and bank balances were approximately **HK$3.1 million** (December 31, 2024: HK$3.8 million)[50](index=50&type=chunk) - Net current assets were approximately **HK$8.6 million** (December 31, 2024: HK$232 thousand), a significant improvement[50](index=50&type=chunk) - The current ratio remained at approximately **1.56** as of June 30, 2025 (December 31, 2024: 1.01)[50](index=50&type=chunk) - The Group's functional currency is HKD, with **99.3%** of cash and bank balances denominated in the functional currency[50](index=50&type=chunk) [Gearing Ratio](index=23&type=section&id=Gearing%20Ratio) As of June 30, 2025, the Group's gearing ratio was approximately 119.5%, a decrease from 173.1% as of December 31, 2024, indicating an improvement in financial leverage - The gearing ratio decreased from approximately **173.1%** as of December 31, 2024, to approximately **119.5%** as of June 30, 2025[51](index=51&type=chunk) - The Group believes that bank cash provides sufficient liquidity to meet funding needs[51](index=51&type=chunk) [Commitments](index=23&type=section&id=Commitments) As of June 30, 2025, the Group had no capital commitments, consistent with the prior year - As of June 30, 2025, the Group had no capital commitments (December 31, 2024: nil)[52](index=52&type=chunk) [Capital Structure](index=23&type=section&id=Capital%20Structure) For the six months ended June 30, 2025, the Group's capital structure remained unchanged, with share capital comprising only the Company's ordinary shares - The Group's capital structure remained unchanged for the six months ended June 30, 2025[53](index=53&type=chunk) - Issued share capital was approximately **HK$20.5 million**, divided into **409,141,860** shares of **HK$0.05** each[53](index=53&type=chunk) [Material Investments and Acquisitions/Disposals](index=23&type=section&id=Material%20Investments%20and%20Acquisitions%2FDisposals) As of June 30, 2025, the Group held no material investments and had no material acquisitions during the period, but disposed of a subsidiary on January 27, 2025 - As of June 30, 2025, there were no material investments held, nor any material acquisitions[54](index=54&type=chunk)[55](index=55&type=chunk)[56](index=56&type=chunk) - A subsidiary was disposed of on **January 27, 2025**[56](index=56&type=chunk) [Contingent Liabilities](index=24&type=section&id=Contingent%20Liabilities) As of June 30, 2025, the Group had no material contingent liabilities, consistent with the prior year - As of June 30, 2025, the Group had no material contingent liabilities (December 31, 2024: nil)[57](index=57&type=chunk) [Foreign Exchange Risk](index=24&type=section&id=Foreign%20Exchange%20Risk) The Group faces foreign exchange risk from transactions not denominated in its functional currency, primarily related to equine business in Australia; currently, there is no hedging policy, but management will monitor and consider hedging in the future - The Group is exposed to foreign exchange risk when entering into transactions not denominated in the Group's functional currency, primarily related to the acquisition and disposal of mares and stallions and equine services revenue in Australia[58](index=58&type=chunk) - The Group currently has no foreign currency hedging policy, but management will closely monitor and consider hedging when necessary[58](index=58&type=chunk) [Pledge of Assets](index=24&type=section&id=Pledge%20of%20Assets) As of June 30, 2025, and December 31, 2024, no assets were pledged to secure the Group's borrowings - As of June 30, 2025, and December 31, 2024, no assets were pledged to lenders to secure certain borrowings granted to the Group[59](index=59&type=chunk) [Employees and Remuneration Policy](index=24&type=section&id=Employees%20and%20Remuneration%20Policy) As of June 30, 2025, the Group employed 11 staff, a significant reduction from the prior year, with total staff costs (excluding directors' emoluments) decreasing substantially; remuneration policy includes basic salary, discretionary bonuses, and allowances, along with a Mandatory Provident Fund Scheme - As of June 30, 2025, the Group employed **11** staff (2024: 135 staff), all located in Hong Kong[60](index=60&type=chunk) - For the six months ended June 30, 2025, the Group's total staff costs (excluding directors' emoluments) were approximately **HK$1.1 million** (2024: HK$10.2 million), a significant decrease[60](index=60&type=chunk) - The remuneration package includes basic salary, discretionary bonuses, and allowances, and a Mandatory Provident Fund Scheme is in place[60](index=60&type=chunk)[61](index=61&type=chunk) - The Remuneration Committee is responsible for reviewing and determining the remuneration packages of directors and senior management, linked to the Group's profit performance and individual performance[62](index=62&type=chunk) [Future Outlook](index=25&type=section&id=Future%20Outlook) The Group plans to allocate more resources to the interior design and decoration business in the second half due to increasing demand in Hong Kong and the Greater Bay Area; equine services will cautiously consider business opportunities and maintain lower operating costs, while the securities, corporate finance, and asset management segment will continue to seek new clients - Interior design and decoration business line: Management will allocate more resources to this segment in the second half to meet increasing demand in Hong Kong and the Greater Bay Area[63](index=63&type=chunk) - Equine services: Management will cautiously consider business opportunities and maintain lower operating costs in the second half[63](index=63&type=chunk) - Securities, corporate finance and asset management: Management is seeking new clients[63](index=63&type=chunk) Other Information [Directors' and Chief Executive's Interests](index=26&type=section&id=Directors%27%20and%20Chief%20Executive%27s%20Interests) As of June 30, 2025, Mr. Wong Kwok Wai held 29.33% of shares through a controlled corporation, while Mr. Leung King Yu and Mr. Leung Tat Chi beneficially held 2.47% and 4.27% respectively; Mr. Leung King Yu held 4,000,000 share options Directors' Long Positions in Shares and Underlying Shares (As of June 30, 2025) | Director's Name | Nature of Interest/Capacity | Number of Ordinary Shares Held | Percentage of the Company's Issued Share Capital | | :--- | :--- | :--- | :--- | | Mr. Wong Kwok Wai | Interest in controlled corporation | 120,000,000 (L) | 29.33% | | Mr. Leung King Yu | Beneficial owner | 10,100,000 (L) | 2.47% | | Mr. Leung Tat Chi | Beneficial owner | 17,460,466 (L) | 4.27% | Number of Shares Involved in Share Options Granted to Directors (As of June 30, 2025) | Director's Name | Date of Grant of Share Options | Exercisable Period | Exercise Price (HK$) | Outstanding (as of June 30, 2025) | | :--- | :--- | :--- | :--- | :--- | | Mr. Leung King Yu | August 31, 2022 | August 31, 2022 to August 30, 2025 | 0.59 | 4,000,000 | - Mr. Wong Kwok Wai held **120,000,000** shares through **Three Gates Investment Limited**, which is wholly and beneficially owned by him[67](index=67&type=chunk) [Major Shareholders' Interests](index=28&type=section&id=Major%20Shareholders%27%20Interests) As of June 30, 2025, Three Gates Investment held 29.33% of shares; six companies including Junlai Finance Limited and Meijian Credit and Mortgage Limited were deemed to own 19.55% of shares due to security interests; Mr. Fung Wing Cheung beneficially held 9.97% of shares Major Shareholders' Long Positions in Shares and Underlying Shares (As of June 30, 2025) | Major Shareholder Name/Name | Nature of Interest/Capacity | Number of Ordinary Shares Held | Percentage of the Company's Issued Share Capital | | :--- | :--- | :--- | :--- | | Three Gates Investment | Beneficial owner | 120,000,000 shares | 29.33% | | Junlai Finance Limited | Person with security interest in shares | 80,000,000 shares | 19.55% | | Meijian Credit and Mortgage Limited | Person with security interest in shares | 80,000,000 shares | 19.55% | | Kaisheng Limited | Person with security interest in shares | 80,000,000 shares | 19.55% | | Meijian Strategy Limited | Person with security interest in shares | 80,000,000 shares | 19.55% | | Upbest Financial Holdings Limited | Person with security interest in shares | 80,000,000 shares | 19.55% | | Meijian Group Limited | Person with security interest in shares | 80,000,000 shares | 19.55% | | Fung Wing Cheung | Beneficial owner | 40,800,000 shares | 9.97% | - **80,000,000** shares held by **Three Gates Investment** were pledged to **Junlai Finance Limited** as security for a loan granted to Mr. Wong Kwok Wai[73](index=73&type=chunk) - **Junlai Finance Limited** and its parent companies (**Meijian Credit and Mortgage Limited, Meijian Strategy Limited, Kaisheng Limited, Upbest Financial Holdings Limited, and Meijian Group Limited**) are all deemed to have a security interest in the pledged shares[73](index=73&type=chunk) [Directors' and Controlling Shareholders' Interests in Competing Business](index=29&type=section&id=Directors%27%20and%20Controlling%20Shareholders%27%20Interests%20in%20Competing%20Business) As of the date of this report, no directors, controlling shareholders, or their close associates were engaged in any business competing with the Group's business, or had any other conflicts of interest - No directors, controlling shareholders of the Company, or any of their respective close associates conducted any business that competes or may compete with the Group's business, or had any other conflicts of interest with the Group[71](index=71&type=chunk) [Corporate Governance Practices](index=29&type=section&id=Corporate%20Governance%20Practices) The Company has complied with all applicable code provisions of the Corporate Governance Code set out in Appendix C1 of the GEM Listing Rules, with one deviation: Mr. Wong Kwok Wai serves as both Chairman and Chief Executive Officer, an arrangement the Board believes enhances operational efficiency and will be continuously reviewed - The Company has complied with all applicable code provisions of the Corporate Governance Code set out in Part 2 of Appendix C1 to the GEM Listing Rules[74](index=74&type=chunk) - There is one deviation: **Mr. Wong Kwok Wai** holds both the positions of Chairman of the Board and Chief Executive Officer of the Company (Code Provision C.2.1)[74](index=74&type=chunk) - The Board believes that Mr. Wong's dual role ensures strong and consistent leadership, facilitating the Group's business strategy and enhancing operational efficiency, and will continue to review the possibility of separating the roles[74](index=74&type=chunk) [Standard of Dealings in Securities by Directors](index=30&type=section&id=Standard%20of%20Dealings%20in%20Securities%20by%20Directors) The Company has adopted a standard for directors' dealings in securities equivalent to that required by the GEM Listing Rules, and all directors have confirmed compliance with this standard during the reporting period - The Company has adopted a standard for dealings in securities by directors that is equivalent to the required standard of dealings set out in Rules 5.48 to 5.67 of the GEM Listing Rules[75](index=75&type=chunk) - All directors have confirmed their compliance with the required standard of dealings during the relevant period[75](index=75&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=30&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company%27s%20Listed%20Securities) Since the listing date and up to the date of this report, neither the Company nor its subsidiaries have purchased, sold, or redeemed any of the Company's listed securities - Since the listing date and up to the date of this report, neither the Company nor its subsidiaries have purchased, sold, or redeemed any of the Company's listed securities[76](index=76&type=chunk) [Share Option Scheme](index=30&type=section&id=Share%20Option%20Scheme) The Company adopted a new share option scheme on February 8, 2023, and terminated the previous scheme; as of June 30, 2025, the total number of shares available for issue under the share option scheme was 40,914,186, representing 10.00% of the issued shares - The Company adopted a new share option scheme on **February 8, 2023**, and terminated the previous share option scheme adopted on November 24, 2017, on the same date[77](index=77&type=chunk) - As of June 30, 2025, the total number of shares available for issue under the share option scheme was **40,914,186**, representing **10.00%** of the Company's issued shares (excluding treasury shares)[79](index=79&type=chunk) - The total number of shares available for issue under the previous share option scheme was **4,000,000**, representing approximately **0.98%** of the issued shares[79](index=79&type=chunk) [Directors' Interests in Transactions, Arrangements or Contracts](index=31&type=section&id=Directors%27%20Interests%20in%20Transactions%2C%20Arrangements%20or%20Contracts) For the six months ended June 30, 2025, no directors or their associated entities had any direct or indirect material interest in any significant transaction, arrangement, or contract entered into by the Company or its subsidiaries that was material to the Group's business - For the six months ended June 30, 2025, no directors or their associated entities had any direct or indirect material interest in any significant transaction, arrangement, or contract entered into by the Company or its subsidiaries that was material to the Group's business[80](index=80&type=chunk) [Events After the Reporting Period](index=31&type=section&id=Events%20After%20the%20Reporting%20Period) As of the date of this report, the Group had no material subsequent events after June 30, 2025 - As of the date of this report, the Group had no material subsequent events after **June 30, 2025**[81](index=81&type=chunk) [Audit Committee](index=32&type=section&id=Audit%20Committee) The Company has established an Audit Committee, comprising three independent non-executive directors, responsible for reviewing financial information, overseeing financial reporting, risk management, and internal control systems, and has reviewed this report and the Group's consolidated results for the six months ended June 30, 2025 - The Audit Committee was established in accordance with the GEM Listing Rules and the Corporate Governance Code[82](index=82&type=chunk) - The Audit Committee comprises three independent non-executive directors: **Mr. Chan Chun Choi**, **Mr. Tang Chun Hei**, and **Mr. Chow Chin Hang**[82](index=82&type=chunk) - The Audit Committee is primarily responsible for reviewing financial information, overseeing the Company's financial reporting system, risk management, internal control systems, maintaining the relationship with the Company's auditors, and reviewing the Audit Committee's terms of reference[82](index=82&type=chunk) - The Audit Committee has reviewed this report and the Group's consolidated results for the six months ended **June 30, 2025**[82](index=82&type=chunk) [Supplemental Information on the 2024 Annual Report](index=32&type=section&id=Supplemental%20Information%20on%20the%202024%20Annual%20Report) This section supplements information on the share option scheme in the 2024 Annual Report, clarifying the total number of share options available for grant and the vesting period requirement of no less than twelve months - As of **January 1, 2024**, and **December 31, 2024**, the total number of shares that may be issued upon exercise of all options to be granted under the scheme, together with all options and awards that may be granted under any other share scheme of the Company at that time, was **40,914,186** shares[83](index=83&type=chunk) - The vesting period for share options granted under the share option scheme shall not be less than **twelve (12) months**[85](index=85&type=chunk)

[2025 Interim Results Highlights](index=1&type=section&id=2025%20Interim%20Results%20Highlights) Q.P.P. Holdings Limited's H1 2025 revenue slightly decreased by 1.2% to HK$532.4 million, with profit attributable to equity holders declining 28.4% to HK$38.6 million Key Financial Highlights for H1 2025 | Metric | H1 2025 (HKD '000) | H1 2024 (HKD '000) | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Total Revenue | 532.4 | 538.6 | -1.2% | | Profit Attributable to Equity Holders | 38.6 | 54.0 | -28.4% | | Basic Earnings Per Share (HK cents) | 7.26 | 10.15 | -28.5% | | Interim Dividend (HK cents per share) | 2.0 | 3.0 | -33.3% | - In H1 2025, **OEM sales accounted for approximately 78.7% of total revenue**, while **website sales accounted for approximately 21.3%**[3](index=3&type=chunk) [Financial Statements](index=2&type=section&id=Financial%20Statements) [Interim Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=2&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) In H1 2025, the Group's revenue slightly decreased while gross profit marginally increased, but higher net other losses and administrative expenses led to significant declines in operating profit and profit for the period Interim Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (Summary) | Metric | H1 2025 (HKD '000) | H1 2024 (HKD '000) | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 532,417 | 538,630 | -1.2% | | Cost of Sales | (337,366) | (346,133) | -2.5% | | Gross Profit | 195,051 | 192,497 | +1.3% | | Net Other (Losses) / Gains | (8,959) | 3,521 | -354.5% | | Operating Profit | 41,828 | 57,675 | -27.4% | | Profit for the Period | 38,364 | 52,675 | -27.2% | | Profit Attributable to Equity Holders | 38,631 | 53,975 | -28.4% | | Basic and Diluted Earnings Per Share (HK cents) | 7.26 | 10.15 | -28.5% | - Other comprehensive income / (loss) shifted from a **loss of HK$18,251 thousand in H1 2024** to a **gain of HK$19,513 thousand in H1 2025**, primarily due to currency translation differences[5](index=5&type=chunk) [Interim Condensed Consolidated Statement of Financial Position](index=4&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, total assets increased to HK$1,250.7 million due to higher property, plant and equipment and trade receivables, but a significant rise in current liabilities, especially borrowings, reduced net current assets Interim Condensed Consolidated Statement of Financial Position (Summary) | Metric | June 30, 2025 (HKD '000) | Dec 31, 2024 (HKD '000) | Change (%) | | :--- | :--- | :--- | :--- | | Total Assets | 1,250,651 | 1,170,888 | +6.8% | | Non-current Assets | 694,610 | 629,115 | +10.4% | | Current Assets | 556,041 | 541,773 | +2.6% | | Total Equity | 881,593 | 882,236 | -0.1% | | Total Liabilities | 369,058 | 288,652 | +27.8% | | Current Liabilities | 360,931 | 272,748 | +32.3% | | Borrowings (Current Liabilities) | 150,453 | 50,150 | +200.0% | - Property, plant and equipment increased by **14.2%** from **HK$427,514 thousand as of December 31, 2024**, to **HK$488,301 thousand as of June 30, 2025**[6](index=6&type=chunk) - Cash and bank balances decreased by **21.8%** from **HK$246,481 thousand as of December 31, 2024**, to **HK$192,820 thousand as of June 30, 2025**[6](index=6&type=chunk) [Notes](index=6&type=section&id=Notes) [1 General Information](index=6&type=section&id=1%20General%20Information) Q.P.P. Holdings Limited, an investment holding company primarily engaged in paper product manufacturing and trading, is incorporated in the Cayman Islands and listed on the HKEX, with Good Elite Holdings Limited as its ultimate controlling company - The Company is incorporated in the Cayman Islands and its shares are listed on the Main Board of the Hong Kong Stock Exchange[8](index=8&type=chunk) - Good Elite Holdings Limited, 50% owned by Mr. Cheng Wan Wai and Mr. Yeung King Woo respectively, is the direct and ultimate controlling company of the Company[8](index=8&type=chunk) [2 Basis of Preparation](index=6&type=section&id=2%20Basis%20of%20Preparation) The interim condensed consolidated financial information is prepared under HKAS 34 and Listing Rules Appendix D2, and should be read with the annual financial statements for the year ended December 31, 2024 - The interim financial information is prepared in accordance with **HKAS 34** and **Appendix D2 of the Listing Rules**[10](index=10&type=chunk) [3 Accounting Policies](index=7&type=section&id=3%20Accounting%20Policies) Accounting policies are consistent with the 2024 annual financial statements, with new HKAS 21 and HKFRS 1 amendments having no significant impact on the Group's results or financial position - Accounting policies are consistent with the 2024 annual financial statements, and newly adopted standard amendments have no significant impact[11](index=11&type=chunk) [4 Estimates](index=7&type=section&id=4%20Estimates) Management's judgments, estimates, and assumptions for interim financial information preparation share the same key sources of estimation uncertainty as those applied in the 2024 consolidated financial statements - Management's judgments, estimates, and assumptions in preparing financial information are consistent with those applied in the 2024 consolidated financial statements[12](index=12&type=chunk) [5 Revenue and Segment Information](index=8&type=section&id=5%20Revenue%20and%20Segment%20Information) The Group's revenue from paper and other products is segmented into website and OEM sales; H1 2025 saw a slight total revenue decrease, with OEM sales declining and website sales growing, while the US and Europe remain key markets, other regions' share increased Revenue by Business Segment | Segment | H1 2025 (HKD '000) | H1 2024 (HKD '000) | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Website Sales | 113,276 | 99,790 | +13.5% | | OEM Sales | 419,141 | 438,840 | -4.5% | | Total | 532,417 | 538,630 | -1.2% | Revenue by Destination | Region | H1 2025 (HKD '000) | H1 2024 (HKD '000) | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | United States | 317,919 | 340,323 | -6.6% | | Europe | 94,666 | 96,081 | -1.5% | | China | 34,795 | 38,292 | -9.1% | | Others | 85,037 | 63,934 | +33.0% | | Total | 532,417 | 538,630 | -1.2% | - Non-current assets are primarily located in **China (HK$512,500 thousand)** and **Vietnam (HK$175,413 thousand)**, with a significant increase in non-current assets in Vietnam[16](index=16&type=chunk) [6 Net Other (Losses) / Gains](index=11&type=section&id=6%20Net%20Other%20(Losses)%20%2F%20Gains) In H1 2025, the Group recorded net other losses of HK$8,959 thousand, mainly driven by exchange losses of HK$8,375 thousand, a reversal from prior period's exchange gains Details of Net Other (Losses) / Gains | Item | H1 2025 (HKD '000) | H1 2024 (HKD '000) | | :--- | :--- | :--- | | Exchange (Losses) / Gains | (8,375) | 3,869 | | Loss on Disposal of Property, Plant and Equipment | (584) | (348) | | Total | (8,959) | 3,521 | [7 Other Income](index=12&type=section&id=7%20Other%20Income) Other income for H1 2025 decreased to HK$5,338 thousand from HK$7,243 thousand in the prior period, mainly due to reduced government grants Details of Other Income | Item | H1 2025 (HKD '000) | H1 2024 (HKD '000) | | :--- | :--- | :--- | | Sales of Scraps | 3,991 | 4,054 | | Government Grants | 1,083 | 2,936 | | Others | 242 | 227 | | Total | 5,338 | 7,243 | [8 Profit Before Income Tax](index=12&type=section&id=8%20Profit%20Before%20Income%20Tax) Profit before income tax decreased to HK$44,106 thousand, influenced by increased employee benefit expenses, higher depreciation, and a reversal of provision for obsolete inventories Key Deductions / (Credits) for Profit Before Income Tax | Item | H1 2025 (HKD '000) | H1 2024 (HKD '000) | | :--- | :--- | :--- | | (Reversal of) / Provision for Obsolete Inventories | (3,236) | 1,570 | | Employee Benefit Expenses | 190,519 | 180,866 | | Depreciation of Property, Plant and Equipment | 28,982 | 26,908 | | Amortisation of Right-of-use Assets | 3,043 | 2,744 | | Auditor's Remuneration (Audit Services) | 1,199 | 1,090 | | Auditor's Remuneration (Non-audit Services) | 520 | 455 | | Short-term Lease Expenses | 1,150 | 1,492 | | Amortisation of Intangible Assets | 602 | 662 | [9 Net Finance Income](index=13&type=section&id=9%20Net%20Finance%20Income) Net finance income for H1 2025 was HK$2,278 thousand, largely stable year-on-year, with increased bank interest income offset by higher interest expenses on borrowings and supplier financing Details of Net Finance Income | Item | H1 2025 (HKD '000) | H1 2024 (HKD '000) | | :--- | :--- | :--- | | Bank Interest Income | 4,174 | 3,739 | | Interest Expense on Bank Borrowings | (1,645) | (1,316) | | Interest Expense on Liabilities under Supplier Financing Arrangements | (181) | (23) | | Interest Expense on Lease Liabilities | (70) | (68) | | Net Finance Income | 2,278 | 2,332 | [10 Income Tax Expense](index=13&type=section&id=10%20Income%20Tax%20Expense) Income tax expense for H1 2025 decreased by 21.7% to HK$5,742 thousand due to reduced profit, with varying tax rates applied across Hong Kong, China (preferential for high-tech), and Vietnam (tax holidays/reductions) Details of Income Tax Expense | Item | H1 2025 (HKD '000) | H1 2024 (HKD '000) | | :--- | :--- | :--- | | Current Income Tax | 5,991 | 10,561 | | Deferred Income Tax | (249) | (3,229) | | Total | 5,742 | 7,332 | - Hong Kong profits tax operates under a two-tiered system, with the **first HK$2 million of assessable profits taxed at 8.25%** and the remainder at **16.5%**[19](index=19&type=chunk) - Chinese subsidiaries, such as Dongguan Q.P.P. Printing Co., Ltd. and Tengda Printing (Heshan) Co., Ltd., enjoy a **preferential tax rate of 15%** as high-tech enterprises, while some small-profit enterprises benefit from a **5% preferential income tax rate on the first RMB3 million of assessable income**[21](index=21&type=chunk) - Vietnamese subsidiary Q P Enterprise (Vietnam) Company Limited enjoys a **tax holiday and a 50% tax reduction for the subsequent four years**[22](index=22&type=chunk) [11 Earnings Per Share Attributable to Equity Holders of the Company](index=15&type=section&id=11%20Earnings%20Per%20Share%20Attributable%20to%20Equity%20Holders%20of%20the%20Company) Basic earnings per share for H1 2025 decreased by 28.5% to 7.26 HK cents due to reduced profit attributable to equity holders, with the weighted average number of ordinary shares remaining constant Details of Earnings Per Share Calculation | Item | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Profit Attributable to Equity Holders (HKD '000) | 38,631 | 53,975 | | Weighted Average Number of Ordinary Shares in Issue (thousand shares) | 532,000 | 532,000 | | Earnings Per Share (HK cents per share) | 7.26 | 10.15 | - The Group had no potentially dilutive ordinary shares in issue during both reporting periods, thus basic and diluted earnings per share are identical[23](index=23&type=chunk) [12 Dividends](index=16&type=section&id=12%20Dividends) The Board declared an interim dividend of 2.0 HK cents per ordinary share for H1 2025, totaling HK$10,640 thousand, a decrease from the prior period, in addition to the 11.0 HK cents final dividend for the previous financial year Dividend Declaration and Payment Status | Dividend Type | H1 2025 (HKD '000) | H1 2024 (HKD '000) | | :--- | :--- | :--- | | Interim Dividend Declared After Reporting Period (HK cents per share) | 10,640 (2.0) | 15,960 (3.0) | | Final Dividend Approved and Paid for Previous Financial Year (HK cents per share) | 58,520 (11.0) | 42,560 (8.0) | [13 Property, Plant and Equipment](index=16&type=section&id=13%20Property%2C%20Plant%20and%20Equipment) In H1 2025, the Group acquired property, plant and equipment totaling HK$81,913 thousand, mainly for Vietnam plant expansion, while disposing of assets with a net book value of HK$984 thousand - Total cost of property, plant and equipment acquired was approximately **HK$81,913 thousand**, primarily attributable to new plant and machinery (**HK$48,096 thousand**) and construction in progress (**HK$26,724 thousand**), mainly for the development and expansion of the Vietnam plant[27](index=27&type=chunk) - The net book value of property, plant and equipment disposed of was approximately **HK$984 thousand**[28](index=28&type=chunk) [14 Trade Receivables](index=17&type=section&id=14%20Trade%20Receivables) As of June 30, 2025, trade receivables increased to HK$200,324 thousand, with credit terms typically 30-90 days, no impairment provision, and primarily denominated in HKD and USD Ageing Analysis of Trade Receivables | Ageing | June 30, 2025 (HKD '000) | Dec 31, 2024 (HKD '000) | | :--- | :--- | :--- | | Within 30 days | 98,772 | 72,417 | | 31 to 60 days | 61,750 | 62,120 | | 61 to 90 days | 37,490 | 15,450 | | Over 90 days | 2,312 | 1,595 | | Total | 200,324 | 151,582 | Currency Denomination of Trade Receivables | Currency | June 30, 2025 (HKD '000) | Dec 31, 2024 (HKD '000) | | :--- | :--- | :--- | | USD | 89,172 | 96,761 | | HKD | 107,018 | 50,912 | | RMB | 3,735 | 3,417 | | Others | 399 | 492 | | Total | 200,324 | 151,582 | - The Group does not hold any collateral and has made no impairment provision for trade receivables[30](index=30&type=chunk)[31](index=31&type=chunk) [15 Borrowings](index=18&type=section&id=15%20Borrowings) As of June 30, 2025, total borrowings significantly increased by 200% to HK$150,453 thousand, primarily denominated in HKD and RMB, and secured by right-of-use assets and property, plant and equipment Total Borrowings and Currency Denomination | Item | June 30, 2025 (HKD '000) | Dec 31, 2024 (HKD '000) | | :--- | :--- | :--- | | Bank Borrowings (Current Liabilities) | 150,453 | 50,150 | | Of which: HKD | 44,253 | 12,861 | | Of which: RMB | 106,200 | 37,289 | Assets Pledged for Borrowings | Pledged Assets | June 30, 2025 (HKD '000) | Dec 31, 2024 (HKD '000) | | :--- | :--- | :--- | | Right-of-use Assets | 77,548 | 78,443 | | Property, Plant and Equipment | 61,701 | 63,337 | | Total | 139,249 | 141,780 | - The effective annual interest rates for borrowings include **HIBOR plus 1.0% to 1.2%**, **LPR minus 0.45% to 0.6%**, and a **fixed rate of 2.5%**[36](index=36&type=chunk) [16 Trade Payables](index=20&type=section&id=16%20Trade%20Payables) As of June 30, 2025, trade payables slightly increased to HK$76,607 thousand, primarily denominated in RMB, with most amounts due within 30 days Ageing Analysis of Trade Payables | Ageing | June 30, 2025 (HKD '000) | Dec 31, 2024 (HKD '000) | | :--- | :--- | :--- | | Within 30 days | 47,523 | 50,451 | | 31 to 60 days | 15,209 | 16,217 | | 61 to 90 days | 8,191 | 5,502 | | Over 90 days | 5,684 | 3,057 | | Total | 76,607 | 75,227 | Currency Denomination of Trade Payables | Currency | June 30, 2025 (HKD '000) | Dec 31, 2024 (HKD '000) | | :--- | :--- | :--- | | RMB | 54,102 | 53,770 | | HKD | 9,252 | 8,088 | | USD | 6,079 | 6,049 | | VND | 7,174 | 7,320 | | Total | 76,607 | 75,227 | [17 Share Capital](index=21&type=section&id=17%20Share%20Capital) As of June 30, 2025, the Company's authorized share capital was HK$20,000 thousand and issued and fully paid share capital was HK$5,320 thousand, both unchanged from December 31, 2024 - Authorized share capital was **HK$20,000 thousand**, and issued and fully paid share capital was **HK$5,320 thousand**, both remaining unchanged[41](index=41&type=chunk) [Management Discussion and Analysis](index=22&type=section&id=Management%20Discussion%20and%20Analysis) [Business Review](index=22&type=section&id=Business%20Review) The Group responded to a complex global economic environment by strategically allocating orders, optimizing trading card game production, developing innovative products, and expanding website and OBM sales channels through marketing and trade shows - Established in 1985, the Group is a paper product manufacturing and printing service provider, with key product categories including **board games, greeting cards, educational products, trading card games, and packaging boxes**[42](index=42&type=chunk) - To address tariff policies and geopolitical tensions, the Group strategically allocates orders between its **China and Vietnam production bases** to enhance supply chain flexibility[44](index=44&type=chunk) - The Group continues to optimize its **trading card game production capacity** through workshop integration and technological upgrades, achieving significant growth and expanding its customer base[44](index=44&type=chunk) - Website sales revenue grew by approximately **13.5% to HK$113.3 million**, with the number of active registered user accounts increasing to approximately **82,000**[46](index=46&type=chunk) [Company Profile](index=22&type=section&id=Company%20Profile) Established in 1985, Q.P.P. Group, headquartered in Hong Kong with production in China and Vietnam, provides paper product manufacturing and printing services, including board games and trading cards, sold via OEM and online channels - The Group's main product categories include **board games, greeting cards, educational products, trading card games, and packaging boxes**[42](index=42&type=chunk) - Sales are made to **OEM clients (approximately 78.7% of total revenue)** and individual and corporate customers through **online sales channels (approximately 21.3% of total revenue)**[3](index=3&type=chunk)[42](index=42&type=chunk) [Business Overview](index=22&type=section&id=Business%20Overview) Amid global economic challenges, the Group responded with flexible supply chain management and investment in high-growth trading card games, while expanding website sales and OBM businesses through marketing and product innovation - The global economic environment is complex and volatile, with **tariff policies and geopolitical tensions posing challenges to the manufacturing industry**[43](index=43&type=chunk) - The Group strategically allocates orders between its **China and Vietnam production bases** to mitigate tariff impacts and enhance supply chain flexibility[44](index=44&type=chunk) - Production capacity for the **trading card game business was optimized**, achieving significant growth through integrated production workshops and technological upgrades[44](index=44&type=chunk) - Website sales business enhanced online platform visibility and expanded global markets through participation in **trade exhibitions and digital marketing strategies**[45](index=45&type=chunk) [Future Outlook](index=23&type=section&id=Future%20Outlook) The Group anticipates a cautious global economic recovery, focusing on OEM diversification and trading card manufacturing expansion through innovation, trade shows, and e-commerce optimization, with a new Vietnam factory expected to boost capacity in Q3 2025 - A **cautious global economic recovery** is anticipated, with stable demand for high-end paper consumer products[47](index=47&type=chunk) - Efforts will be intensified to **diversify OEM business** and focus on expanding the **trading card manufacturing business**, with plans to participate in major trade exhibitions to foster cooperation[47](index=47&type=chunk) - The website sales business will launch new **print-on-demand solutions for trading card products** to cater to niche markets and individual consumer needs[48](index=48&type=chunk) - The new factory building at the **Vietnam production base is expected to commence production in Q3 2025**, significantly enhancing production capacity and flexibility[48](index=48&type=chunk) [Financial Review](index=24&type=section&id=Financial%20Review) In H1 2025, the Group's revenue slightly decreased by 1.2% due to lower OEM sales, despite website sales growth; gross profit margin improved, but exchange losses and increased Vietnam plant employee costs led to a 28.4% decline in profit attributable to equity holders - Total revenue was approximately **HK$532.4 million**, a **1.2% year-on-year decrease**, primarily due to reduced OEM sales revenue[49](index=49&type=chunk) - Gross profit margin increased from approximately **35.7% in H1 2024** to approximately **36.6% in H1 2025**, mainly due to the increased contribution from the higher-margin website sales business[54](index=54&type=chunk) - Profit attributable to equity holders was approximately **HK$38.6 million**, a **28.4% year-on-year decrease**, with net profit margin narrowing from **9.8% to 7.2%**[61](index=61&type=chunk) [Revenue](index=24&type=section&id=Revenue) H1 2025 total revenue decreased 1.2% to HK$532.4 million, with OEM sales down 4.5% to HK$419.1 million due to US tariffs, while website sales grew 13.5% to HK$113.3 million, and other overseas markets expanded Total Revenue by Business Segment | Segment | 2025 (HKD '000) | Share (%) | 2024 (HKD '000) | Share (%) | | :--- | :--- | :--- | :--- | :--- | | OEM Sales | 419,141 | 78.7 | 438,840 | 81.5 | | Website Sales | 113,276 | 21.3 | 99,790 | 18.5 | | Total | 532,417 | 100.0 | 538,630 | 100.0 | Regional Revenue by Destination | Region | 2025 (HKD '000) | Share (%) | 2024 (HKD '000) | Share (%) | | :--- | :--- | :--- | :--- | :--- | | United States | 317,919 | 59.7 | 340,323 | 63.2 | | Europe | 94,666 | 17.8 | 96,081 | 17.8 | | China | 34,795 | 6.5 | 38,292 | 7.1 | | Others | 85,037 | 16.0 | 63,934 | 11.9 | | Total | 532,417 | 100.0 | 538,630 | 100.0 | - The sales proportion from the **US and European markets decreased**, primarily due to business expansion in other overseas markets such as **Vietnam, Japan, and Thailand** during the reporting period[52](index=52&type=chunk) [Cost of Sales](index=25&type=section&id=Cost%20of%20Sales) Cost of sales decreased by 2.5% to HK$337.4 million, primarily due to reduced production volume driven by lower OEM product demand - Cost of sales decreased by approximately **2.5%** from **HK$346.1 million in H1 2024** to **HK$337.4 million in H1 2025**[53](index=53&type=chunk) - The decrease in cost of sales was primarily due to **reduced production volume resulting from lower demand for OEM products**[53](index=53&type=chunk) [Gross Profit](index=26&type=section&id=Gross%20Profit) Gross profit increased by 1.3% to HK$195.1 million, with the gross profit margin improving from 35.7% to 36.6%, mainly due to increased contribution from the higher-margin website sales business - Gross profit was approximately **HK$195.1 million**, an increase of approximately **1.3%** compared to H1 2024[54](index=54&type=chunk) - Gross profit margin increased from approximately **35.7% in H1 2024** to approximately **36.6% in H1 2025**[54](index=54&type=chunk) - The increase in gross profit margin was primarily due to the **increased contribution from the website sales business**, which has a higher gross profit margin compared to OEM business[54](index=54&type=chunk) [Net Other (Losses) / Gains](index=26&type=section&id=Net%20Other%20(Losses)%20%2F%20Gains%20(Financial%20Review)) Net other losses were recorded, primarily due to exchange losses from the appreciation of RMB against HKD - Net other losses were primarily due to the **adverse impact of exchange losses resulting from the appreciation of RMB against HKD**[55](index=55&type=chunk) [Other Income](index=26&type=section&id=Other%20Income%20(Financial%20Review)) Other income decreased, primarily due to reduced government grants received from China - The decrease in other income was primarily due to **reduced government grants received from China** during the reporting period[56](index=56&type=chunk) [Selling and Distribution Expenses](index=26&type=section&id=Selling%20and%20Distribution%20Expenses) Selling and distribution expenses decreased by 5.2% to HK$47.7 million, mainly due to reduced employee costs for sales activities and lower sales commissions - Selling and distribution expenses decreased by approximately **5.2%** from **HK$50.3 million in H1 2024** to **HK$47.7 million in H1 2025**[57](index=57&type=chunk) - The decrease was primarily due to **reduced employee costs related to sales activities** and **lower sales commissions payable** during the reporting period[57](index=57&type=chunk) [Administrative Expenses](index=26&type=section&id=Administrative%20Expenses) Administrative expenses increased by 7.0% to HK$101.9 million, primarily due to increased employee costs at the Vietnam plant - Administrative expenses increased by approximately **7.0%** from **HK$95.2 million in H1 2024** to **HK$101.9 million in H1 2025**[58](index=58&type=chunk) - The increase in administrative expenses was primarily due to **increased employee costs at the Group's Vietnam plant** during the reporting period[58](index=58&type=chunk) [Net Finance Income](index=27&type=section&id=Net%20Finance%20Income%20(Financial%20Review)) Net finance income remained stable at approximately HK$2.3 million across both reporting periods - Net finance income remained stable at approximately **HK$2.3 million** in both H1 2025 and H1 2024[59](index=59&type=chunk) [Income Tax Expense](index=27&type=section&id=Income%20Tax%20Expense%20(Financial%20Review)) Income tax expense decreased by 21.7% to HK$5.7 million, primarily due to reduced profit recognized - Income tax expense decreased by approximately **21.7%** from **HK$7.3 million in H1 2024** to **HK$5.7 million in H1 2025**[60](index=60&type=chunk) - The decrease in income tax expense was primarily due to **reduced profit recognized** during the reporting period[60](index=60&type=chunk) [Profit Attributable to Equity Holders of the Company](index=27&type=section&id=Profit%20Attributable%20to%20Equity%20Holders%20of%20the%20Company%20(Financial%20Review)) Profit attributable to equity holders decreased by 28.4% to HK$38.6 million, with net profit margin narrowing to 7.2%, primarily due to increased Vietnam plant employee costs and adverse exchange losses - Profit attributable to equity holders decreased by approximately **28.4%** from **HK$54.0 million in H1 2024** to **HK$38.6 million in H1 2025**[61](index=61&type=chunk) - Net profit margin decreased from approximately **9.8% in H1 2024** to approximately **7.2% in H1 2025**[61](index=61&type=chunk) - The decrease in net profit was primarily due to **increased employee costs at the Vietnam plant** and the **adverse impact of exchange losses**[61](index=61&type=chunk) [Other Information](index=27&type=section&id=Other%20Information) [Liquidity and Financial Resources](index=27&type=section&id=Liquidity%20and%20Financial%20Resources) The Group maintained healthy liquidity, but net current assets and cash balances decreased, while total borrowings, supplier financing liabilities, and lease liabilities significantly increased - Net current assets decreased to approximately **HK$195.1 million** (December 31, 2024: HK$269.0 million)[62](index=62&type=chunk) - Cash and bank balances decreased by approximately **HK$53.7 million** to approximately **HK$192.8 million** (December 31, 2024: HK$246.5 million)[62](index=62&type=chunk) - Total borrowings, liabilities under supplier financing arrangements, and lease liabilities significantly increased to approximately **HK$166.2 million** (December 31, 2024: HK$70.7 million)[63](index=63&type=chunk) [Contingent Liabilities and Capital Commitments](index=28&type=section&id=Contingent%20Liabilities%20and%20Capital%20Commitments) As of June 30, 2025, the Group had no significant contingent liabilities, and capital commitments for property, plant and equipment acquisitions decreased to HK$34.0 million - As of June 30, 2025, the Group had **no significant contingent liabilities**[64](index=64&type=chunk) - Capital commitments amounted to approximately **HK$34.0 million** (December 31, 2024: HK$59.9 million), primarily for the acquisition of property, plant and equipment[65](index=65&type=chunk) [Exchange Rate Risk and Hedging](index=28&type=section&id=Exchange%20Rate%20Risk%20and%20Hedging) The Group faces foreign currency risk from multi-currency denominated revenues and expenses, managing it by monitoring exchange rates and using financial instruments for hedging when needed, without a formal hedging accounting policy - The Group faces foreign currency risk, primarily due to **revenue, production costs, and operating expenses being denominated in different currencies**[66](index=66&type=chunk) - The Group manages risk by closely monitoring foreign currency exchange rate movements and using financial instruments for hedging when necessary, but **does not adopt a formal hedging accounting policy**[66](index=66&type=chunk) [Material Acquisitions or Disposals](index=29&type=section&id=Material%20Acquisitions%20or%20Disposals) The Group had no material acquisitions or disposals of subsidiaries, associates, or joint ventures during the reporting period - There were **no material acquisitions or disposals** in both H1 2025 and H1 2024[68](index=68&type=chunk) [Future Investment Plans](index=29&type=section&id=Future%20Investment%20Plans) Except as disclosed, the Group has no other plans for significant investments or capital assets and held no significant investments during the reporting period - Except as disclosed in this announcement, the Group has **no other plans for significant investments or capital assets**[69](index=69&type=chunk) - No significant investments were held in H1 2025[70](index=70&type=chunk) [Pledge of Assets](index=29&type=section&id=Pledge%20of%20Assets) As of June 30, 2025, approximately HK$77.5 million of right-of-use assets and HK$61.7 million of property, plant and equipment were pledged for bank borrowings and supplier financing liabilities - Approximately **HK$77.5 million of right-of-use assets** and approximately **HK$61.7 million of property, plant and equipment** were pledged as collateral for bank borrowings and liabilities under supplier financing arrangements[71](index=71&type=chunk) [Employees and Remuneration Policy](index=29&type=section&id=Employees%20and%20Remuneration%20Policy) As of June 30, 2025, the Group had 3,232 employees, with total employee costs of HK$190.5 million, an increase from the prior period, and remuneration policy is reviewed based on market and performance - As of June 30, 2025, the Group had **3,232 employees** (December 31, 2024: 2,976 employees)[72](index=72&type=chunk) - Total employee costs for H1 2025 were approximately **HK$190.5 million** (H1 2024: HK$180.9 million)[72](index=72&type=chunk) - The remuneration policy considers market conditions and individual performance, including **basic salary, directors' emoluments, retirement scheme contributions, and discretionary bonuses**[72](index=72&type=chunk) [Corporate Governance](index=30&type=section&id=Corporate%20Governance) The Group complies with the Corporate Governance Code, with a deviation for the combined Chairman and CEO roles, which the Board believes provides strong leadership; the share option scheme, adopted for incentives, has not granted any options - The Group has adopted and complied with the **Corporate Governance Code in Appendix C1 of the Listing Rules**, with a deviation from code provision C.2.1 (roles of Chairman and Chief Executive should be separate)[73](index=73&type=chunk) - Mr. Cheng Wan Wai serves as both Chairman and Chief Executive Officer, an arrangement the Board believes provides **strong and consistent leadership**[74](index=74&type=chunk) - The share option scheme was adopted on **December 20, 2019**, to provide incentives or rewards, but **no share options have been granted** from its adoption date up to June 30, 2025[76](index=76&type=chunk) [Standard Code for Securities Transactions](index=31&type=section&id=Standard%20Code%20for%20Securities%20Transactions) The Company adopted a directors' securities transaction code no less exacting than the Listing Rules' Standard Code, with all directors confirming compliance during the reporting period - The Company has adopted a code of conduct for directors' securities transactions no less exacting than the **Standard Code set out in Appendix C3 of the Listing Rules**[75](index=75&type=chunk) - All Directors confirmed compliance with the Company's adopted Standard Code throughout H1 2025[75](index=75&type=chunk) [Share Option Scheme](index=31&type=section&id=Share%20Option%20Scheme) The share option scheme, adopted on December 20, 2019, aims to incentivize eligible persons; as of June 30, 2025, no options have been granted, with 53,200,000 options available for grant - The share option scheme was adopted on **December 20, 2019**, to provide incentives or rewards to selected eligible persons[76](index=76&type=chunk) - No share options have been granted under the scheme to any directors, eligible employees, or other third parties from the adoption date up to June 30, 2025[76](index=76&type=chunk) - The number of share options available for grant is **53,200,000 shares**, representing **10% of the issued shares** as of the date of this interim report[76](index=76&type=chunk) [Changes in Directors' Information](index=31&type=section&id=Changes%20in%20Directors%27%20Information) Changes in directors' information include Professor Cheng Man Chung's re-appointment to the Carbon Neutrality Committee and appointment as Vice Chairman of Guangdong Nuclear Safety Advisory Committee, Mr. Chan Hiu Fung's resignation from TransUnion and new roles at HKGCC and HKFA, and Mr. Wu Sung's re-election as Chairman of the Hong Kong Owners Association - Professor Cheng Man Chung was re-appointed to the **Carbon Neutrality and Sustainable Development Committee** and appointed **Vice Chairman of the Guangdong Nuclear Power Station Nuclear Safety Advisory Committee**[77](index=77&type=chunk)[78](index=78&type=chunk) - Mr. Chan Hiu Fung resigned as an independent non-executive director of TransUnion Limited, was elected **Vice Chairman of the China Committee of the Hong Kong General Chamber of Commerce**, and re-elected as a **director of The Hong Kong Football Association Limited**[79](index=79&type=chunk)[80](index=80&type=chunk) - Mr. Wu Sung was re-elected **Chairman of the Hong Kong Owners Association Executive Committee**[80](index=80&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=32&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company%27s%20Listed%20Securities) In H1 2025, neither the Company nor its subsidiaries purchased, sold, or redeemed any of the Company's listed securities - In H1 2025, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[81](index=81&type=chunk) [Interim Dividend and Register of Members](index=32&type=section&id=Interim%20Dividend%20and%20Register%20of%20Members) The Board declared an interim dividend of 2.0 HK cents per ordinary share for H1 2025, payable around October 9, 2025, with share transfer registration suspended from September 17-19, 2025, to determine eligibility - The Board resolved to declare an interim dividend of **2.0 HK cents per ordinary share** for H1 2025, totaling approximately **HK$10.6 million**[82](index=82&type=chunk) - The interim dividend will be paid on or about **Thursday, October 9, 2025**[82](index=82&type=chunk) - The share transfer registration will be suspended from **Wednesday, September 17, 2025, to Friday, September 19, 2025**[83](index=83&type=chunk) [Events After Reporting Period](index=33&type=section&id=Events%20After%20Reporting%20Period) No significant events affecting the Group occurred after H1 2025 and up to the date of this announcement - No significant events affecting the Group occurred after H1 2025 and up to the date of this announcement[84](index=84&type=chunk) [Audit Committee and Auditor's Review](index=33&type=section&id=Audit%20Committee%20and%20Auditor%27s%20Review) The Audit Committee reviewed the Group's accounting principles and interim condensed consolidated financial statements, which were also reviewed by independent auditor PricewaterhouseCoopers under HKSRE 2410 - The Audit Committee, comprising three independent non-executive directors, has reviewed the **accounting principles adopted by the Group** and the **interim condensed consolidated financial statements**[85](index=85&type=chunk) - Independent auditor PricewaterhouseCoopers has reviewed the unaudited interim condensed consolidated financial information in accordance with **Hong Kong Standard on Review Engagements 2410**[86](index=86&type=chunk) [Publication of Report](index=33&type=section&id=Publication%20of%20Report) The H1 2025 interim results announcement will be published on the HKEX and Company websites, with the full interim report dispatched to shareholders and published online in due course - The H1 2025 interim results announcement will be published on the **HKEX website (www.hkexnews.hk)** and the **Company's website (www.qpp.com)**[87](index=87&type=chunk) - The interim report, containing all information required by the Listing Rules, will be dispatched to shareholders and published on the aforementioned websites in due course[87](index=87&type=chunk) [Board Composition](index=33&type=section&id=Board%20Composition) As of this announcement date, the Board comprises six executive directors and three independent non-executive directors - The Board comprises **six executive directors and three independent non-executive directors**[89](index=89&type=chunk)

[Interim Results Summary](index=1&type=section&id=%E4%B8%AD%E6%9C%9F%E6%A5%AD%E7%B8%BE%E6%91%98%E8%A6%81) The company reported a significant decline in contracted sales and revenue for the six months ended June 30, 2025, leading to an expanded loss for the period Interim Results Summary for the Six Months Ended June 30, 2025 | Indicator | 2025 Period (RMB) | 2024 Period (RMB) (Estimated) | Change | Change Percentage | Original Chunk Num | | :--- | :--- | :--- | :--- | :--- | :--- | | Contracted Sales | RMB2.87 billion | RMB4.289 billion | Decreased by RMB1.419 billion | -33.1% | | | Average Contracted Selling Price | RMB12,643/sq.m. | Approximately flat | - | - | | | Revenue | RMB2,267.9 million | RMB6,091.0 million | Decreased by RMB3,823.1 million | -62.8% | | | Loss for the Period | RMB3,417.9 million | RMB2,831.4 million | Increased by RMB586.5 million | +20.7% | | | Loss Attributable to Owners of the Company | RMB3,436.1 million | RMB3,017.9 million | Increased by RMB418.2 million | +13.9% | | | Cost Management | Effectively managed | - | - | - | | [Condensed Consolidated Interim Financial Statements](index=2&type=section&id=%E4%B8%AD%E6%9C%9F%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8) This section presents the company's financial performance and position, highlighting significant declines in revenue and expanded losses, alongside ongoing liquidity challenges [Condensed Consolidated Interim Statement of Profit or Loss](index=2&type=section&id=%E4%B8%AD%E6%9C%9F%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E6%90%8D%E7%9B%8A%E8%A1%A8) For the six months ended June 30, 2025, the company's revenue significantly decreased by 62.8% to RMB2,267.9 million, leading to a 66.5% reduction in gross profit, with loss for the period expanding by 20.7% to RMB3,417.9 million, primarily due to a substantial increase in finance costs and sustained high other expenses Key Data from Condensed Consolidated Interim Statement of Profit or Loss | Indicator | For the Six Months Ended June 30, 2025 (RMB '000) | For the Six Months Ended June 30, 2024 (RMB '000) | Change | Change Percentage | | :--- | :--- | :--- | :--- | :--- | | Revenue | 2,267,935 | 6,091,008 | (3,823,073) | -62.8% | | Cost of Sales | (2,087,843) | (5,553,721) | 3,465,878 | -62.4% | | Gross Profit | 180,092 | 537,287 | (357,195) | -66.5% | | Other Income and Gains | 195,033 | 117,527 | 77,506 | +65.9% | | Selling and Marketing Expenses | (63,292) | (131,754) | 68,462 | -52.0% | | Administrative Expenses | (209,108) | (220,771) | 11,663 | -5.3% | | Impairment and Write-off Losses on Financial Assets | (163,221) | (360,027) | 196,806 | -54.7% | | Other Expenses | (2,075,314) | (1,962,307) | (113,007) | +5.8% | | Finance Costs | (1,155,328) | (581,160) | (574,168) | +98.8% | | Share of Loss of Joint Ventures and Associates | (23,972) | (58,093) | 34,121 | -58.7% | | Loss Before Tax | (3,315,110) | (2,659,298) | (655,812) | +24.7% | | Income Tax Expense | (102,752) | (172,064) | 69,312 | -40.3% | | Loss for the Period | (3,417,862) | (2,831,362) | (586,500) | +20.7% | | Loss Attributable to Owners of the Company | (3,436,128) | (3,017,883) | (418,245) | +13.9% | | Non-controlling Interests | 18,266 | 186,521 | (168,255) | -90.2% | [Condensed Consolidated Interim Statement of Comprehensive Income](index=3&type=section&id=%E4%B8%AD%E6%9C%9F%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E5%85%A8%E9%9D%A2%E6%94%B6%E5%85%A5%E8%A1%A8) For the six months ended June 30, 2025, the company recorded a total comprehensive loss of RMB3,122.5 million, an increase from the prior year, despite a positive shift in exchange differences on translation of overseas operations Key Data from Condensed Consolidated Interim Statement of Comprehensive Income | Indicator | For the Six Months Ended June 30, 2025 (RMB '000) | For the Six Months Ended June 30, 2024 (RMB '000) | Change | | :--- | :--- | :--- | :--- | | Loss for the Period | (3,417,862) | (2,831,362) | (586,500) | | Exchange Differences on Translation of Overseas Operations | 282,689 | (152,827) | 435,516 | | Gain on Revaluation of Properties | 10,758 | 31,339 | (20,581) | | Total Comprehensive Loss for the Period | (3,122,457) | (2,946,024) | (176,433) | | Total Comprehensive Loss Attributable to Owners of the Company | (3,140,723) | (3,132,545) | (8,178) | - Basic and diluted loss per share increased from **RMB144 cents** in the prior year to **RMB163 cents** for the six months ended June 30, 2025[4](index=4&type=chunk) [Condensed Consolidated Interim Statement of Financial Position](index=4&type=section&id=%E4%B8%AD%E6%9C%9F%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81%E8%A1%A8) As of June 30, 2025, the company's total assets and liabilities both decreased, while net current liabilities further expanded, indicating continued liquidity pressure, and total equity deficit widened from RMB7,867.5 million to RMB11,644.8 million Key Data from Condensed Consolidated Interim Statement of Financial Position | Indicator | As of June 30, 2025 (RMB '000) | As of December 31, 2024 (RMB '000) | Change | | :--- | :--- | :--- | :--- | | Total Non-current Assets | 18,437,965 | 19,305,728 | (867,763) | | Total Current Assets | 63,154,669 | 69,239,242 | (6,084,573) | | Total Assets | 81,592,634 | 88,544,970 | (6,952,336) | | Total Current Liabilities | 80,184,993 | 77,241,333 | 2,943,660 | | Total Non-current Liabilities | 13,052,432 | 19,171,128 | (6,118,696) | | Total Liabilities | 93,237,425 | 96,412,461 | (3,175,036) | | Net Current Liabilities | (17,030,324) | (8,002,091) | (9,028,233) | | Total Equity (Deficit) | (11,644,791) | (7,867,491) | (3,777,300) | - Property inventories (current assets) decreased from **RMB44,663.7 million** to **RMB41,962.1 million**, reflecting reduced sales deliveries[5](index=5&type=chunk) - Interest-bearing bank and other borrowings and interest payable (current liabilities) increased from **RMB33,336.4 million** to **RMB38,549.8 million**, indicating increased short-term debt pressure[6](index=6&type=chunk) [Notes to the Financial Statements](index=6&type=section&id=%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8%E9%99%84%E8%A8%BB) This section provides detailed disclosures on the company's operations, accounting policies, and financial risks, including significant going concern uncertainties and debt restructuring efforts [Company Information](index=6&type=section&id=%E5%85%AC%E5%8F%B8%E8%B3%87%E6%96%99) Times China Holdings Limited, incorporated in the Cayman Islands, primarily engages in property development, urban renewal, and property leasing in China, with its ultimate holding company being Joyful Ascent Limited, wholly owned by founder Mr. Shum Chiu Hung - The company was incorporated in the Cayman Islands on November 14, 2007, and changed its name to Times China Holdings Limited on January 15, 2018[7](index=7&type=chunk) - Its principal activities are property development, urban renewal, and property leasing in China[7](index=7&type=chunk) - The ultimate holding company is Joyful Ascent Limited, wholly owned by Mr. Shum Chiu Hung, the founder of the Company[8](index=8&type=chunk) [Basis of Preparation](index=6&type=section&id=%E7%B7%A8%E8%A3%BD%E5%9F%BA%E6%BA%96) The condensed consolidated interim financial information is prepared in accordance with the HKEX Listing Rules and IAS 34, despite significant going concern uncertainties including substantial losses, net current liabilities, and loan defaults, which management addresses through a debt management plan and a court-approved restructuring scheme - The interim financial information is prepared in accordance with Appendix D2 to the Listing Rules of the Stock Exchange of Hong Kong Limited and International Accounting Standard 34[10](index=10&type=chunk) - The company reported a loss attributable to owners of **RMB3,436.1 million** and net current liabilities of **RMB17,030.3 million**, indicating significant going concern uncertainties[11](index=11&type=chunk) - Total principal amount of defaulted borrowings is **RMB27,575.6 million**, with interest totaling **RMB4,166.0 million**, triggering cross-defaults of **RMB225.3 million**[11](index=11&type=chunk) - Management has formulated an overall offshore debt management plan, and the scheme of arrangement was approved by the High Court on July 30, 2025, with the effective date being the same day[12](index=12&type=chunk)[13](index=13&type=chunk) - The ability to continue as a going concern depends on the successful completion of offshore debt restructuring, renewal/extension of borrowings, obtaining new loans, accelerating property sales and cash collection, controlling costs, and disposing of assets[15](index=15&type=chunk)[16](index=16&type=chunk)[21](index=21&type=chunk) [Changes in Accounting Policies and Disclosures](index=8&type=section&id=%E6%9C%83%E8%A8%88%E6%94%BF%E7%AD%96%E8%AE%8A%E5%8B%95%E5%8F%8A%E6%8A%AB%E9%9C%B2) The adoption of the revised IAS 21 "Lack of Exchangeability" during this period had no material financial impact on the condensed consolidated interim financial information - The revised International Accounting Standard 21 "Lack of Exchangeability" has been adopted[18](index=18&type=chunk)[19](index=19&type=chunk) - This change had no material financial impact on the condensed consolidated interim financial information[19](index=19&type=chunk) [Operating Segment Information](index=8&type=section&id=%E9%81%8B%E7%87%9F%E5%88%86%E9%83%A8%E8%B3%87%E6%96%99) The Group's operating segments include property development, urban renewal, and property leasing, with all property development projects located in mainland China; property development remains the primary revenue source, but its segment results and assets significantly declined, while urban renewal business contributed no revenue - The Group's operating segments include property development, urban renewal business, and property leasing, with all property development projects located in mainland China[20](index=20&type=chunk)[22](index=22&type=chunk) Segment Revenue and Results (For the Six Months Ended June 30) | Segment | 2025 Revenue (RMB '000) | 2025 Results (RMB '000) | 2024 Revenue (RMB '000) | 2024 Results (RMB '000) | | :--- | :--- | :--- | :--- | :--- | | Property Development | 1,958,839 | (1,517,759) | 5,752,900 | 59,042 | | Urban Renewal Business | – | (59,248) | – | (27,188) | | Property Leasing | 309,096 | (229,749) | 338,108 | 496 | | **Total** | **2,267,935** | **(1,806,756)** | **6,091,008** | **32,350** | Segment Assets and Liabilities (As of June 30) | Segment | 2025 Assets (RMB '000) | 2025 Liabilities (RMB '000) | 2024 Assets (RMB '000) | 2024 Liabilities (RMB '000) | | :--- | :--- | :--- | :--- | :--- | | Property Development | 53,086,132 | 17,471,770 | 57,578,671 | 20,335,228 | | Urban Renewal Business | 5,776,406 | 2,156,943 | 6,906,483 | 2,134,571 | | Property Leasing | 8,236,378 | 3,840,226 | 8,599,656 | 3,855,655 | | **Total** | **67,098,916** | **23,468,939** | **73,084,810** | **26,325,454** | [Revenue, Other Income and Gains](index=11&type=section&id=%E6%94%B6%E5%85%A5%E3%80%81%E5%85%B6%E4%BB%96%E6%94%B6%E5%85%A5%E5%8F%8A%E6%94%B6%E7%9B%8A) Total revenue for the period significantly decreased by 62.8% to RMB2,267.9 million, primarily due to reduced property sales, while other income and gains substantially increased due to net gains from debt restructuring Revenue Source Analysis (For the Six Months Ended June 30) | Revenue Source | 2025 (RMB '000) | 2024 (RMB '000) | Change | | :--- | :--- | :--- | :--- | | Revenue from Contracts with Customers (Sale of Properties) | 1,958,839 | 5,752,900 | (3,794,061) | | Leasing of Self-owned Properties | 56,550 | 63,345 | (6,795) | | Sub-leasing of Leased Properties | 252,546 | 274,763 | (22,217) | | **Total Revenue** | **2,267,935** | **6,091,008** | **(3,823,073)** | Other Income and Gains Analysis (For the Six Months Ended June 30) | Item | 2025 (RMB '000) | 2024 (RMB '000) | Change | | :--- | :--- | :--- | :--- | | Bank Interest Income | 2,017 | 11,467 | (9,450) | | Net Gain on Debt Restructuring | 143,139 | - | 143,139 | | Gain on Disposal of Land Held for Development | - | 40,794 | (40,794) | | Net Exchange Gain | - | 24,400 | (24,400) | | **Total Other Income and Gains** | **195,033** | **117,527** | **77,506** | [Loss Before Tax](index=13&type=section&id=%E9%99%A4%E7%A8%85%E5%89%8D%E虧%E6%90%8D) Loss before tax for the period was RMB3,315.1 million, a 24.7% increase from the prior year, primarily influenced by cost of properties sold, exchange losses, and write-down of property inventories Major Components of Loss Before Tax (For the Six Months Ended June 30) | Item | 2025 (RMB '000) | 2024 (RMB '000) | Change | | :--- | :--- | :--- | :--- | | Cost of Properties Sold | 5,385,158 | 1,890,999 | 3,494,159 | | Net Exchange Loss/(Gain) | 331,234 | (24,400) | 355,634 | | Write-down of Property Inventories to Net Realizable Value | 154,520 | 1,506,112 | (1,351,592) | | Impairment Loss on Interests in Joint Ventures | 1,002,547 | - | 1,002,547 | | Staff Welfare Expenses (Net of Capitalization) | 64,790 | 87,956 | (23,166) | [Finance Costs](index=14&type=section&id=%E8%B2%A1%E5%8B%99%E6%88%90%E6%9C%AC) Finance costs for the period significantly increased by 98.8% to RMB1,155.3 million, primarily due to a substantial decrease in capitalized interest expenses Components of Finance Costs (For the Six Months Ended June 30) | Item | 2025 (RMB '000) | 2024 (RMB '000) | Change | | :--- | :--- | :--- | :--- | | Interest Expense | 1,635,218 | 1,764,466 | (129,248) | | Interest on Lease Liabilities | 124,923 | 125,473 | (550) | | Less: Capitalized Interest | (604,813) | (1,308,779) | 703,966 | | **Total Finance Costs** | **1,155,328** | **581,160** | **574,168** | [Income Tax Expense](index=14&type=section&id=%E6%89%80%E5%BE%97%E7%A8%85%E9%96%8B%E6%94%AF) Income tax expense decreased by 40.3% to RMB102.8 million for the period, mainly due to an increased loss before tax, with China corporate income tax and land appreciation tax being the primary tax components - Entities registered in the Cayman Islands and British Virgin Islands are not subject to income tax, and no Hong Kong profits tax provision was made due to the absence of assessable profits[32](index=32&type=chunk)[33](index=33&type=chunk) - China corporate income tax is calculated at applicable rates, with some subsidiaries enjoying a preferential rate of **15%**[34](index=34&type=chunk) - China land appreciation tax is levied at progressive rates ranging from **30% to 60%**[35](index=35&type=chunk) Components of Income Tax Expense (For the Six Months Ended June 30) | Item | 2025 (RMB '000) | 2024 (RMB '000) | Change | | :--- | :--- | :--- | :--- | | Corporate Income Tax | 61,314 | 49,777 | 11,537 | | Land Appreciation Tax | 7,309 | 38,119 | (30,810) | | Deferred Tax | 34,129 | 84,168 | (50,039) | | **Total Tax Expense for the Period** | **102,752** | **172,064** | **(69,312)** | [Dividends](index=15&type=section&id=%E8%82%A1%E6%81%AF) The Board of Directors resolved not to declare an interim dividend for the six months ended June 30, 2025, consistent with the prior year - The Board of Directors does not recommend the payment of an interim dividend for the six months ended June 30, 2025[37](index=37&type=chunk) [Loss Per Share Attributable to Ordinary Equity Holders of the Company](index=15&type=section&id=%E6%9C%AC%E5%85%AC%E5%8F%B8%E6%93%81%E6%9C%89%E4%BA%BA%E6%87%89%E4%BD%B5%E6%AF%8F%E8%82%A1%E虧%E6%90%8D) For the six months ended June 30, 2025, basic and diluted loss per share increased to RMB163 cents, up from RMB144 cents in the prior year, reflecting the company's expanded loss Loss Per Share Data (For the Six Months Ended June 30) | Indicator | 2025 (RMB '000/cents) | 2024 (RMB '000/cents) | | :--- | :--- | :--- | | Loss Attributable to Ordinary Equity Holders of the Company | (3,436,128) | (3,017,883) | | Weighted Average Number of Ordinary Shares in Issue (thousand shares) | 2,101,816 | 2,101,816 | | Basic and Diluted Loss Per Share (RMB cents) | (163) | (144) | - There were no potentially dilutive ordinary shares in issue for both the current and prior periods[38](index=38&type=chunk) [Trade Receivables](index=16&type=section&id=%E6%87%89%E6%94%B6%E8%B2%A3%E6%98%93%E6%AC%BE%E9%A0%85) As of June 30, 2025, total trade receivables amounted to RMB652.3 million, an 18.3% decrease from the end of 2024, with the largest portion due within six months - Trade receivables primarily arise from the sale of completed properties, urban renewal business, and property leasing[40](index=40&type=chunk) Ageing Analysis of Trade Receivables (RMB '000) | Ageing | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Within 6 months | 379,692 | 503,193 | | 7 to 12 months | 104,828 | 22,692 | | After 1 year | 167,734 | 272,524 | | **Total** | **652,254** | **798,409** | [Trade Payables and Bills](index=16&type=section&id=%E6%87%89%E4%BB%98%E8%B2%A3%E6%98%93%E6%AC%BE%E9%A0%85%E5%8F%8A%E7%A5%A8%E6%93%9A) As of June 30, 2025, total trade payables and bills amounted to RMB4,438.6 million, a 19.9% decrease from the end of 2024, with over half of the amount due after one year Ageing Analysis of Trade Payables and Bills (RMB '000) | Ageing | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Within 1 year | 1,471,498 | 2,647,135 | | After 1 year | 2,967,100 | 2,894,382 | | **Total** | **4,438,598** | **5,541,517** | - Trade payables and bills are unsecured, non-interest-bearing, and repayable within normal operating cycles or on demand[42](index=42&type=chunk) [Management Discussion and Analysis](index=17&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 overview of the company's operational and financial performance, market conditions, and future strategies, emphasizing challenges and mitigation efforts [Performance Overview](index=17&type=section&id=%E6%A5%AD%E7%B8%BE%E6%A6%82%E8%A6%BD) For the six months ended June 30, 2025, the Group's revenue decreased by 62.8% year-on-year to RMB2,267.9 million, with loss for the period expanding by 20.7% to RMB3,417.9 million, and loss attributable to owners of the Company increasing by RMB418.2 million, resulting in a basic and diluted loss per share of RMB163 cents Overview of Core Financial Indicators (For the Six Months Ended June 30) | Indicator | 2025 (RMB million) | 2024 (RMB million) | Change | | :--- | :--- | :--- | :--- | | Revenue | 2,267.9 | 6,091.0 | (3,823.1) | | Loss for the Period | 3,417.9 | 2,831.4 | 586.5 | | Core Net Loss | 3,415.9 | 2,827.9 | 588.0 | | Loss Attributable to Owners of the Company | 3,436.1 | 3,017.9 | 418.2 | | Basic and Diluted Loss Per Share (RMB cents) | 163 | 144 | 19 | - Core net loss (non-IFRS measure) excludes the impact of fair value losses on investment properties and related deferred tax, providing a better assessment of operating performance[44](index=44&type=chunk) [Business Operations](index=17&type=section&id=%E6%A5%AD%E5%8B%99%E7%87%9F%E9%81%8B) The Group's business primarily focuses on property development in the Pearl River Delta region, with contracted sales of RMB2.87 billion for the six months ended June 30, 2025, representing a 33.1% year-on-year decrease, while urban renewal business contributed no revenue and property leasing revenue decreased by 8.6% year-on-year [Property Development](index=17&type=section&id=%E7%89%A9%E6%A5%AD%E7%99%BC%E5%B1%95) The Group has 129 major projects in the Pearl River Delta region, achieving contracted sales of RMB2.87 billion for the six months ended June 30, 2025, with a total GFA of approximately 227,000 sq.m. and an average contracted selling price of RMB12,643 per sq.m. - The Group has **129 major projects** in key cities in Guangdong Province, Changsha (Hunan), Chengdu (Sichuan), Hangzhou (Zhejiang), Wuhan (Hubei), and Nanjing (Jiangsu)[45](index=45&type=chunk) Contracted Sales by Region (For the Six Months Ended June 30, 2025) | Region | Sales Area (sq.m.) | Sales Amount (RMB million) | Average Selling Price (RMB/sq.m.) | | :--- | :--- | :--- | :--- | | Guangzhou | 59,900 | 1,132 | 18,898 | | Foshan | 30,100 | 512 | 17,014 | | Dongguan | 29,100 | 373 | 12,818 | | Qingyuan | 35,800 | 208 | 5,817 | | Huizhou | 22,600 | 197 | 8,697 | | Hangzhou Region | 10,900 | 134 | 12,330 | | Jiangmen | 18,100 | 85 | 4,713 | | Changsha | 7,400 | 82 | 11,063 | | Nanjing | 2,800 | 70 | 25,120 | | Zhuhai | 2,400 | 48 | 19,839 | | Zhaoqing | 1,800 | 20 | 11,104 | | Zhongshan | 5,200 | 5 | 915 | | Chengdu | 600 | 3 | 5,226 | | Shanwei | 200 | 1 | 7,241 | | Heyuan | 100 | 0 | 1,099 | | **Total** | **227,000** | **2,870** | **12,643** | [Urban Renewal Business](index=18&type=section&id=%E5%9F%8E%E5%B8%82%E6%9B%B4%E6%96%B0%E6%A5%AD%E5%8B%99) The Group's urban renewal business contributed no revenue during this period - For the six months ended June 30, 2025, the urban renewal business generated no revenue[47](index=47&type=chunk) [Property Leasing and Sub-leasing](index=18&type=section&id=%E7%89%A9%E6%A5%AD%E7%A7%9F%E8%B3%83%E5%8F%8A%E8%BD%89%E7%A7%9F) For the six months ended June 30, 2025, the Group's leasing revenue amounted to RMB309.1 million, accounting for 13.6% of total revenue - The Group owns leasable properties such as Times Property Center, Chengdu Times Center, and Times E-PARK (Tianhe) Phase II, with a total GFA of approximately **141,643 sq.m.** and **221 parking spaces**[48](index=48&type=chunk) - Guangzhou Times Commercial Management Co., Ltd. and its subsidiaries have approximately **820,536 sq.m.** of GFA for sub-leasing[48](index=48&type=chunk) [Land Bank and Project Portfolio](index=19&type=section&id=%E5%9C%9F%E5%9C%B0%E5%84%B2%E5%82%99%E5%8F%8A%E9%A0%85%E7%9B%AE%E7%B5%84%E5%90%88) As of June 30, 2025, the Group's total land bank was approximately 9.8 million sq.m., primarily concentrated in Guangdong cities like Guangzhou, Qingyuan, and Foshan, sufficient for two to three years of future development, with no land acquisitions made during the period [Land Bank](index=19&type=section&id=%E5%9C%9F%E5%9C%B0%E5%84%B2%E5%82%99) The Group's total land bank is approximately 9.8 million sq.m., primarily distributed in cities such as Guangzhou, Qingyuan, Foshan, Jiangmen, and Huizhou Land Bank by Region (As of June 30, 2025) | Region | Total Land Bank (sq.m.) | Percentage (%) | | :--- | :--- | :--- | | Guangzhou | 2,162,817 | 22.0 | | Qingyuan | 2,143,035 | 21.8 | | Foshan | 1,293,670 | 13.2 | | Jiangmen | 1,069,579 | 10.9 | | Huizhou | 862,542 | 8.8 | | Zhaoqing | 663,027 | 6.8 | | Changsha | 435,212 | 4.4 | | Dongguan | 415,906 | 4.2 | | Wuhan | 284,027 | 2.9 | | Hangzhou Region | 125,060 | 1.3 | | Zhuhai | 118,782 | 1.2 | | Zhongshan | 79,728 | 0.8 | | Chengdu | 57,463 | 0.6 | | Nanjing | 50,117 | 0.5 | | Shanwei | 32,965 | 0.3 | | Heyuan | 23,314 | 0.2 | | Shantou | 7,120 | 0.1 | | **Total** | **9,824,364** | **100.0** | - The land bank is sufficient to meet development needs for the next **two to three years**[49](index=49&type=chunk) [Property Development Project Portfolio](index=20&type=section&id=%E7%89%A9%E6%A5%AD%E9%96%8B%E7%99%BC%E9%A0%85%E7%9B%AE%E7%B5%84%E5%90%88) The Group holds a substantial portfolio of completed and under-development/future-development residential and commercial projects across various cities, including Guangzhou, Foshan, and Changsha, with a total site area exceeding 10.4 million sq.m. - As of June 30, 2025, the total site area was **10,496,093 sq.m.**[55](index=55&type=chunk) - Completed GFA for sale was **899,533 sq.m.**, and GFA under development/future development for sale was **4,775,709 sq.m.**[55](index=55&type=chunk) - Project types primarily include residential and commercial, with ownership interests ranging from **33% to 100%**[50](index=50&type=chunk)[51](index=51&type=chunk)[52](index=52&type=chunk)[53](index=53&type=chunk)[54](index=54&type=chunk)[55](index=55&type=chunk) [Land Acquisitions](index=26&type=section&id=%E5%9C%B0%E5%A1%8A%E6%94%B6%E8%B3%BC) The Group did not acquire any land parcels during the six months ended June 30, 2025 - No land acquisitions were made during this period[57](index=57&type=chunk) [Market Review and Outlook](index=27&type=section&id=%E5%B8%82%E5%A0%B4%E5%9B%9E%E9%A1%A7%E8%88%87%E5%89%8D%E6%99%AF) In the first half of 2025, China's real estate market saw continued transaction volume decline, though residential land transactions increased in first and second-tier cities, with most restrictive policies lifted and a new development model promoted; the market is expected to remain in an adjustment period in the second half, with further declines in transaction volume and prices, prompting the company to focus on active sales, cash collection, and debt management [Market Review](index=27&type=section&id=%E5%B8%82%E5%A0%B4%E5%9B%9E%E9%A1%A7) In the first half of 2025, national new commercial housing sales area decreased by 3.5% year-on-year, and sales value decreased by 5.5% year-on-year, with residential land market showing structural divergence as first and second-tier cities saw transaction GFA growth of 20.9% and 18.3% respectively, while third-tier cities declined by 14.3% - In the first half of 2025, national new commercial housing sales area was **458.51 million sq.m.**, a year-on-year decrease of **3.5%**; sales value was **RMB4,424.1 billion**, a year-on-year decrease of **5.5%**[59](index=59&type=chunk) - Land transfer fees for residential land in 300 cities nationwide amounted to **RMB0.86 trillion**, a year-on-year increase of **27.5%**, but transaction GFA for residential land was **170 million sq.m.**, a year-on-year decrease of **5.5%**[59](index=59&type=chunk) - Transaction GFA for residential land in first and second-tier cities increased by **20.9%** and **18.3%** respectively, while third-tier cities saw a **14.3%** decrease[59](index=59&type=chunk) - Restrictive policies have been largely lifted, except for a few cities like Beijing, Shanghai, and Shenzhen, with accelerated efforts to build a "new real estate development model"[60](index=60&type=chunk) [Outlook](index=27&type=section&id=%E5%89%8D%E6%99%AF) The real estate market is expected to remain in an adjustment period in the second half of 2025, with policy focus on implementing existing measures; resident confidence and purchasing power recovery will take time, leading to an anticipated widening year-on-year decline in transaction volume and prices for the full year, while the Group will actively pursue sales, strengthen cash collection, advance urban renewal project investment recovery, proactively manage debt, and enhance project quality - The real estate market is expected to remain in an adjustment period in the second half, with policy focus on implementing housing voucher systems and acquiring existing commercial housing for affordable housing[61](index=61&type=chunk) - The "good housing" policy will support the residential land market in quality cities but also bring product differentiation and price pressure[61](index=61&type=chunk) - The recovery of resident confidence and purchasing power requires stable employment and income expectations, posing significant challenges to market demand recovery[61](index=61&type=chunk) - Transaction volume is expected to see a wider year-on-year decline in the second half, with full-year transaction volume and prices still decreasing year-on-year[61](index=61&type=chunk) - The Group will closely align with policy directions, actively pursue sales, strengthen cash collection, promote investment recovery in urban renewal projects, proactively manage debt, optimize debt structure, improve asset quality, repair its balance sheet, and consistently enhance project quality and services[61](index=61&type=chunk) [Financial Performance Analysis](index=28&type=section&id=%E8%B2%A1%E5%8B%99%E8%A1%A8%E7%8F%BE%E5%88%86%E6%9E%90) Revenue for the period significantly decreased by 62.8%, primarily due to reduced property sales deliveries, leading to a 66.5% decline in gross profit, though gross margin remained largely stable; finance costs substantially increased due to lower capitalized interest, further expanding loss for the period and loss attributable to owners of the Company [Revenue](index=28&type=section&id=%E6%94%B6%E5%85%A5) The Group's revenue decreased by 62.8% from RMB6,091.0 million in the prior year to RMB2,267.9 million in the current period, mainly due to a reduction in property sales deliveries - Property development and property leasing and sub-leasing accounted for approximately **86.4%** and **13.6%** of revenue, respectively[62](index=62&type=chunk) [Cost of Sales](index=28&type=section&id=%E9%8A%B7%E5%94%AE%E6%88%90%E6%9C%AC) Cost of sales decreased by 62.4% from RMB5,553.7 million in the prior year to RMB2,087.8 million in the current period, primarily attributable to reduced property sales deliveries Change in Cost of Sales | Indicator | 2025 (RMB million) | 2024 (RMB million) | Change Percentage | | :--- | :--- | :--- | :--- | | Cost of Sales | 2,087.8 | 5,553.7 | -62.4% | [Gross Profit](index=29&type=section&id=%E6%AF%9B%E5%88%A9) Gross profit decreased by 66.5% from RMB537.3 million in the prior year to RMB180.1 million in the current period, with the gross profit margin at 7.9%, largely stable compared to 8.8% in the prior year Change in Gross Profit and Gross Profit Margin | Indicator | 2025 (RMB million) | 2024 (RMB million) | Change Percentage | | :--- | :--- | :--- | :--- | | Gross Profit | 180.1 | 537.3 | -66.5% | | Gross Profit Margin | 7.9% | 8.8% | -0.9 percentage points | [Other Income and Gains](index=29&type=section&id=%E5%85%B6%E4%BB%96%E6%94%B6%E5%85%A5%E5%8F%8A%E6%94%B6%E7%9B%8A) Other income and gains increased from RMB117.5 million in the prior year to RMB195.0 million in the current period, primarily due to the recognition of gains from interest expense waivers on certain liabilities Change in Other Income and Gains | Indicator | 2025 (RMB million) | 2024 (RMB million) | Change Percentage | | :--- | :--- | :--- | :--- | | Other Income and Gains | 195.0 | 117.5 | +65.9% | [Selling and Marketing Expenses](index=29&type=section&id=%E9%8A%B7%E5%94%AE%E5%8F%8A%E5%B8%82%E5%A0%B4%E6%8E%A8%E5%BB%A3%E6%88%90%E6%9C%AC) Selling and marketing expenses decreased by 52.0% from RMB131.8 million in the prior year to RMB63.3 million in the current period, mainly due to strict control over marketing promotion costs Change in Selling and Marketing Expenses | Indicator | 2025 (RMB million) | 2024 (RMB million) | Change Percentage | | :--- | :--- | :--- | :--- | | Selling and Marketing Expenses | 63.3 | 131.8 | -52.0% | [Administrative Expenses](index=29&type=section&id=%E8%A1%8C%E6%94%BF%E9%96%8B%E6%94%AF) Administrative expenses decreased by 5.3% from RMB220.8 million in the prior year to RMB209.1 million in the current period, primarily due to strict control over administrative expenses Change in Administrative Expenses | Indicator | 2025 (RMB million) | 2024 (RMB million) | Change Percentage | | :--- | :--- | :--- | :--- | | Administrative Expenses | 209.1 | 220.8 | -5.3% | [Impairment and Write-off Losses on Financial Assets](index=29&type=section&id=%E9%87%91%E8%9E%8D%E8%B3%87%E7%94%A2%E6%B8%9B%E5%80%BC%E5%8F%8A%E6%92%BF%E9%8A%B7%E虧%E6%90%8D) Impairment and write-off losses on financial assets decreased by 54.7% from RMB360.0 million in the prior year to RMB163.2 million in the current period, mainly due to the absence of impairment losses on amounts due from joint ventures during the period Change in Impairment and Write-off Losses on Financial Assets | Indicator | 2025 (RMB million) | 2024 (RMB million) | Change Percentage | | :--- | :--- | :--- | :--- | | Impairment and Write-off Losses on Financial Assets | 163.2 | 360.0 | -54.7% | [Other Expenses](index=29&type=section&id=%E5%85%B6%E4%BB%96%E9%96%8B%E6%94%AF) Other expenses for the current period were RMB2,075.3 million, largely comparable to RMB1,962.3 million in the prior year Change in Other Expenses | Indicator | 2025 (RMB million) | 2024 (RMB million) | Change Percentage | | :--- | :--- | :--- | :--- | | Other Expenses | 2,075.3 | 1,962.3 | +5.8% | [Finance Costs](index=30&type=section&id=%E8%B2%A1%E5%8B%99%E6%88%90%E6%9C%AC) Finance costs increased by 98.8% from RMB581.2 million in the prior year to RMB1,155.3 million in the current period, primarily due to a decrease in capitalized interest expenses for projects Change in Finance Costs | Indicator | 2025 (RMB million) | 2024 (RMB million) | Change Percentage | | :--- | :--- | :--- | :--- | | Finance Costs | 1,155.3 | 581.2 | +98.8% | [Loss for the Period](index=30&type=section&id=%E6%9C%9F%E9%96%93%E虧%E6%90%8D) Loss for the period increased by 20.7% from RMB2,831.4 million in the prior year to RMB3,417.9 million in the current period, mainly due to a decrease in gross profit Change in Loss for the Period | Indicator | 2025 (RMB million) | 2024 (RMB million) | Change Percentage | | :--- | :--- | :--- | :--- | | Loss for the Period | 3,417.9 | 2,831.4 | +20.7% | | Basic and Diluted Loss Per Share (RMB cents) | 163 | 144 | +13.2% | [Loss Attributable to Owners of the Company](index=30&type=section&id=%E6%9C%AC%E5%85%AC%E5%8F%B8%E6%93%81%E6%9C%89%E4%BA%BA%E6%87%89%E4%BD%B5%E虧%E6%90%8D) Loss attributable to owners of the Company increased by 13.9% from RMB3,017.9 million in the prior year to RMB3,436.1 million in the current period, with core net loss also increasing by RMB419.7 million Change in Loss Attributable to Owners of the Company | Indicator | 2025 (RMB million) | 2024 (RMB million) | Change Percentage | | :--- | :--- | :--- | :--- | | Loss Attributable to Owners of the Company | 3,436.1 | 3,017.9 | +13.9% | | Core Net Loss Attributable to Owners of the Company | 3,434.1 | 3,014.4 | +13.9% | [Liquidity, Financial and Capital Resources](index=31&type=section&id=%E6%B5%81%E5%8B%95%E8%B3%87%E9%87%91%E3%80%81%E8%B2%A1%E5%8B%99%E5%8F%8A%E8%B3%87%E6%9C%AC%E8%B3%87%E6%BA%90) This section details the company's cash position, borrowings, pledged assets, debt securities, contingent liabilities, and foreign exchange risk management [Cash Position](index=31&type=section&id=%E7%8F%BE%E9%87%91%E7%8B%80%E6%B3%81) As of June 30, 2025, the Group's cash and bank balances were approximately RMB1,733.1 million, a 22.1% decrease from the end of 2024, with restricted bank deposits amounting to RMB1,121.2 million Change in Cash and Bank Balances | Indicator | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | Change Percentage | | :--- | :--- | :--- | :--- | | Cash and Bank Balances | 1,733.1 | 2,224.3 | -22.1% | | Restricted Bank Deposits | 1,121.2 | 1,383.8 | -19.0% | - Portions of proceeds from pre-sales and bank loans are deposited into designated bank accounts, subject to relevant laws, regulations, and loan agreements[77](index=77&type=chunk) [Borrowings and Pledged Assets](index=31&type=section&id=%E5%80%9F%E6%AC%BE%E5%8F%8A%E6%8A%B5%E6%8A%BC%E8%B3%87%E7%94%A2) As of June 30, 2025, the Group's interest-bearing payables were RMB4,593.0 million, and total interest-bearing bank and other borrowings were approximately RMB45,189.3 million, of which RMB37,125.8 million are due within one year; certain borrowings are secured by property inventories, investment properties, trade receivables, property, plant and equipment, and equity interests in subsidiaries Overview of Borrowings and Pledged Assets | Indicator | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | | :--- | :--- | :--- | | Interest-bearing Payables | 4,593.0 | 5,032.8 | | Total Interest-bearing Bank and Other Borrowings | 45,189.3 | - | | Borrowings Due Within One Year | 37,125.8 | 32,292.4 | | Borrowings Due in Two to Five Years | 8,034.8 | - | | Borrowings Due After Five Years | 28.7 | - | - Pledged assets include property inventories (**RMB1,189.9 million**), equity interests in certain subsidiaries (**RMB4,211.7 million**), investment properties (**RMB629.1 million**), trade receivables (**RMB141.9 million**), property inventories (**RMB11,325.7 million**), and property, plant and equipment (**RMB310.4 million**)[78](index=78&type=chunk) [Details of Debt Securities Issued](index=32&type=section&id=%E5%82%B5%E5%8B%99%E8%AD%89%E5%88%B8%E7%99%BC%E8%A1%8C%E8%A9%B3%E6%83%85) The Group has issued various USD senior notes and RMB domestic corporate bonds with coupon rates ranging from 5.00% to 6.80% and maturity dates from 2023 to 2028; most domestic corporate bonds have had their maturity dates adjusted and small-amount redemption mechanisms implemented through bondholder meetings to address liquidity pressure - Various USD senior notes have been issued, including **5.00% USD senior notes due 2028**, **5.55% USD senior notes due 2024**, **5.75% USD senior notes due 2027**, **6.20% USD senior notes due 2026**, **6.75% USD senior notes due 2025**, **6.75% USD senior notes due 2023**, and **6.60% USD senior notes due 2023**[79](index=79&type=chunk)[84](index=84&type=chunk) - Various RMB domestic corporate bonds have been issued, including **5.94% RMB privately placed domestic corporate bonds due 2026**, **5.68% RMB privately placed domestic corporate bonds due 2026**, **5.94% RMB publicly issued domestic corporate bonds due 2027**, **5.24% RMB publicly issued domestic corporate bonds due 2027**, **5.10% RMB publicly issued domestic corporate bonds due 2027**, **6.30% RMB publicly issued domestic corporate bonds due 2027**, **5.00% RMB publicly issued domestic corporate bonds due 2027**, **6.20% RMB publicly issued domestic corporate bonds due 2027**, and **6.80% RMB publicly issued domestic corporate bonds due 2027**[80](index=80&type=chunk)[84](index=84&type=chunk) - Most domestic corporate bonds have undergone adjustments to maturity dates, implementation of small-amount redemption mechanisms, and proportional principal repayment schedules through bondholder meetings, with unpaid interest capitalized and new credit enhancement measures added[80](index=80&type=chunk)[81](index=81&type=chunk)[82](index=82&type=chunk)[83](index=83&type=chunk) - The Group has suspended repayment of certain offshore debts, and trading of offshore USD-denominated senior notes has been suspended since January 5, 2023[85](index=85&type=chunk) [Contingent Liabilities](index=38&type=section&id=%E6%88%96%E7%84%B6%E8%B2%A0%E5%82%B5) As of June 30, 2025, the Group's outstanding guarantees for mortgage loans to property purchasers were approximately RMB6,819.5 million, and bank loan guarantees for joint ventures and associates amounted to approximately RMB1,028.1 million Overview of Contingent Liabilities | Item | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | | :--- | :--- | :--- | | Guarantees for Property Purchasers' Mortgage Loans | 6,819.5 | 13,879.3 | | Bank Loan Guarantees for Joint Ventures and Associates | 1,028.1 | 1,100.6 | - Guarantees for property purchasers' mortgage loans are released upon delivery of relevant certificates or repayment of loans; if purchasers default, the Group may be required to repurchase the properties or bear the difference[88](index=88&type=chunk) [Foreign Exchange Risk](index=38&type=section&id=%E5%A4%96%E5%8C%AF%E9%A2%A8%E9%9A%AA) The Group primarily operates in China, with most business denominated in RMB, and while the company monitors RMB exchange rate fluctuations, it had not engaged in foreign exchange hedging activities as of June 30, 2025 - The Group primarily operates in China, with most of its business denominated in RMB[89](index=89&type=chunk) - As of June 30, 2025, the Group had not engaged in hedging activities to manage foreign exchange rate risk[89](index=89&type=chunk) [Material Investments and Future Plans](index=38&type=section&id=%E4%B8%BB%E8%A6%81%E6%8A%95%E8%B3%87%E5%8F%8A%E6%9C%AA%E4%BE%86%E8%A8%88%E5%8A%83) There were no material investments, significant acquisitions or disposals of subsidiaries, associates, and joint ventures during the period, nor any future plans for other significant investments or capital asset additions - There were no material investments, significant acquisitions or disposals of subsidiaries, associates, and joint ventures during this period[90](index=90&type=chunk) - As of the date of this announcement, there were no other significant investment or capital asset addition plans authorized by the Board of Directors[90](index=90&type=chunk) [Events After the Reporting Period](index=39&type=section&id=%E6%9C%9F%E9%96%93%E5%BE%8C%E4%BA%8B%E9%A0%85) This section outlines significant events occurring after the reporting period, including the successful offshore debt restructuring and the adjournment of a winding-up petition [Proposed Offshore Debt Restructuring](index=39&type=section&id=%E5%BB%BA%E8%AD%B0%E9%87%8D%E7%B5%84%E5%A2%83%E5%A4%96%E5%82%B5%E5%8B%99) The company's offshore debt restructuring scheme was approved by the requisite majority of scheme creditors on July 8, 2025, and subsequently sanctioned by the High Court on July 30, 2025, becoming effective on the same date, following the passing of resolutions at the EGM for the issuance of consideration shares and mandatory convertible bonds - The offshore debt restructuring scheme was approved by the requisite majority of scheme creditors on July 8, 2025[91](index=91&type=chunk) - Resolutions for the issuance of consideration shares and two tranches of mandatory convertible bonds were passed at the Extraordinary General Meeting[91](index=91&type=chunk) - The restructuring scheme was sanctioned by the High Court on July 30, 2025, with all scheme conditions met, and the effective date being the same day[91](index=91&type=chunk) [Adjournment of Winding-up Petition](index=39&type=section&id=%E6%8A%BC%E5%BE%8C%E6%B8%85%E7%9B%A4%E5%91%88%E8%AB%8B) The High Court has adjourned the winding-up petition against the company to January 19, 2026 - The High Court has adjourned the winding-up petition against the company to January 19, 2026[92](index=92&type=chunk) [Other Information](index=40&type=section&id=%E5%85%B6%E4%BB%96%E4%BF%A1%E6%81%AF) This section provides additional information on the company's employees, corporate governance, and compliance with securities trading codes [Employees and Remuneration Policies](index=40&type=section&id=%E5%83%B1%E5%93%A1%E5%8F%8A%E8%96%AA%E9%85%AC%E6%94%BF%E7%AD%96) As of June 30, 2025, the Group had 1,202 employees, a 17% decrease from the end of 2024; employee remuneration is based on performance, skills, knowledge, experience, and market trends, with various benefits and training programs provided, and employee welfare expenses for the period were approximately RMB118.1 million Employee Headcount and Welfare Expenses | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Employee Headcount | 1,202 | 1,449 | | Employee Welfare Expenses (RMB million) | 118.1 | 170.0 (For the six months ended June 30, 2024) | - Employee remuneration is based on performance, skills, knowledge, experience, and market trends, with benefits including provident funds, medical insurance, unemployment insurance, and housing provident funds[94](index=94&type=chunk) [Interim Dividends](index=40&type=section&id=%E4%B8%AD%E6%9C%9F%E8%82%A1%E6%81%AF) The Board of Directors does not recommend the payment of an interim dividend for the six months ended June 30, 2025, consistent with the prior year - The Board of Directors does not recommend the payment of an interim dividend for the six months ended June 30, 2025[95](index=95&type=chunk) [Corporate Governance Practices](index=40&type=section&id=%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB%E5%B8%B8%E8%A6%8F) The company has adopted the Corporate Governance Code set out in Appendix C1 of the HKEX Listing Rules; the Chairman and Chief Executive Officer roles are held by the same individual, a structure the Board believes provides strong leadership and facilitates business strategy implementation, balanced by effective risk management and internal control systems - The company has adopted the Corporate Governance Code set out in Appendix C1 of the Listing Rules of the Stock Exchange of Hong Kong Limited[96](index=96&type=chunk) - The roles of Chairman and Chief Executive Officer are combined and held by Mr. Shum Chiu Hung, which the Board believes provides strong and consistent leadership beneficial to the Group's business prospects[96](index=96&type=chunk) [Compliance with the Model Code for Securities Transactions by Directors](index=41&type=section&id=%E9%81%B5%E5%AE%88%E6%9C%89%E9%97%9C%E8%91%A3%E4%BA%8B%E9%80%B2%E8%A1%8C%E8%AD%89%E5%88%B8%E4%BA%A4%E6%98%93%E7%9A%84%E8%A1%8C%E7%82%BA%E5%AE%88%E5%88%99) The company has adopted a code of conduct for directors' securities transactions that is no less exacting than the Listing Rules' Model Code, with all directors confirming compliance, and a similar code has been adopted for relevant employees who may possess inside information - The company has adopted a code of conduct for directors' securities transactions that is no less exacting than the Model Code set out in Appendix C3 of the Listing Rules[97](index=97&type=chunk) - All directors have confirmed compliance with the Model Code[97](index=97&type=chunk) - A similar code of conduct for securities transactions has been adopted for relevant employees who may possess inside information[97](index=97&type=chunk) [Audit Committee and Review of Financial Statements](index=41&type=section&id=%E5%AF%A9%E6%A0%B8%E5%A7%94%E5%93%A1%E6%9C%83%E5%8F%8A%E5%AF%A9%E9%96%B1%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8) The Audit Committee, comprising three independent non-executive directors, has reviewed the Group's interim report, interim results, and the effectiveness of its risk management and internal control systems, deeming them effective and adequate - The Audit Committee comprises three independent non-executive directors: Mr. Wong Wai Man (Chairman), Mr. Jin Qingjun, and Ms. Sun Hui[98](index=98&type=chunk) - The Audit Committee has reviewed the interim report, interim results, and the effectiveness and adequacy of the risk management and internal control systems[98](index=98&type=chunk) [Purchase, Sale or Redemption of Listed Securities](index=41&type=section&id=%E8%B3%BC%E8%B2%B7%E3%80%81%E5%87%BA%E5%94%AE%E6%88%96%E8%B4%96%E5%9B%9E%E4%B8%8A%E5%B8%82%E8%AD%89%E5%88%B8) For the six months ended June 30, 2025, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities, and the company held no treasury shares - During this period, neither the company nor its subsidiaries purchased, sold, or redeemed any of the company's listed securities[99](index=99&type=chunk) - As of June 30, 2025, the company held no treasury shares[99](index=99&type=chunk) [Publication of Interim Results and Interim Report](index=41&type=section&id=%E5%88%8A%E7%99%BB%E4%B8%AD%E6%9C%9F%E6%A5%AD%E7%B8%BE%E5%8F%8A%E4%B8%AD%E6%9C%9F%E5%A0%B1%E5%91%8A) This interim results announcement has been published on the HKEX and the company's website, and the 2025 interim report, containing all information required by the Listing Rules, will be published in due course - This interim results announcement has been published on the HKEX website (www.hkexnews.hk) and the company's website (www.timesgroup.cn)[100](index=100&type=chunk) - The 2025 interim report, containing all information required by the Listing Rules, will be published in due course[100](index=100&type=chunk)

香港交易及結算所有限公司及香港聯合交易所有限公司對本公佈的內容概不負責， 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。 （於開曼群島註冊成立之有限公司） （股份代號：540） 截至二零二五年六月三十日止六個月 中期業績公佈 | | | 截至六月三十日止六個月 | | | | --- | --- | --- | --- | --- | | | | 二零二五年 | 二零二四年 | 變動 | | | | （未經審核） | （未經審核） | | | 收益 | （百萬港元） | 157.4 | 281.9 | -44.2% | | 毛利 | （百萬港元） | 17.8 | 30.4 | -41.5% | | 毛利率 | | 11.3% | 10.8% | | | 本公司權益持有人應佔期內 | | | | | | 溢利 | （百萬港元） | 2.6 | 5.3 | -51.0% | | 本公司權益持有人應佔淨 | | | | | | 溢利率 | | 1.7% | 1.9% | | | 期內本公司權益持有人應佔 | | | | | | ...