Second Quarter Results Announcement for the Period Ended June 30, 2025 [Financial Data Summary](index=1&type=section&id=%E8%B2%A1%E5%8B%99%E6%95%B8%E6%93%9A%E7%B8%BD%E7%B5%90) Sunshine Oil Sands Ltd. announced its second-quarter results for the period ended June 30, 2025, with oil sales dropping to zero due to West Ells equipment maintenance, leading to an expanded net operating loss and negative operating cash flow, though net loss attributable to shareholders narrowed year-on-year Oil Sales (Net of Royalties) | Period | Amount (CAD Thousands) | | :--- | :--- | | Six Months Ended June 30, 2025 | 0 | | Six Months Ended June 30, 2024 | 21,458 | Oil sales were primarily impacted by revenue loss due to West Ells equipment maintenance in Q1 and Q2 2025[4](index=4&type=chunk)[6](index=6&type=chunk) Net Operating Income (Loss) (Excluding One-time Exchange Gains (Losses)) | Period | Amount (CAD Thousands) | | :--- | :--- | | Three Months Ended June 30, 2025 | (2,100) | | Three Months Ended June 30, 2024 | 1,130 | Operating Cash Flow | Period | Amount (CAD Thousands) | | :--- | :--- | | Three Months Ended June 30, 2025 | (2,473) (Net Outflow) | | Three Months Ended June 30, 2024 | 753 (Net Inflow) | Operating cash flow was primarily impacted by revenue loss due to West Ells equipment maintenance in Q1 and Q2 2025[4](index=4&type=chunk)[6](index=6&type=chunk) Net Profit (Loss) Attributable to Company Shareholders | Period | Amount (CAD Thousands) | | :--- | :--- | | Q2 2025 | (1,981) | | Q2 2024 | (10,974) | Selected Financial Figures (Balance Sheet) | Metric | June 30, 2025 (CAD Thousands) | December 31, 2024 (CAD Thousands) | | :--- | :--- | :--- | | Property, Plant and Equipment | 478,001 | 476,446 | | Exploration and Evaluation Assets | 241,208 | 239,259 | | Shareholders' Equity | 22,202 | 16,848 | Condensed Interim Financial Statements [Condensed Consolidated Statement of Financial Position](index=4&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81%E8%A1%A8) As of June 30, 2025, the company's total assets slightly increased to CAD 742.1 million, and shareholders' equity rose to CAD 22.2 million, but current liabilities significantly increased, with total liabilities remaining high, reflecting ongoing financial structural challenges Balance Sheet Key Data (CAD Thousands) | Metric | June 30, 2025 | December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Total Assets | 742,131 | 739,023 | +3,108 | | Current Assets | 16,516 | 16,496 | +20 | | Non-current Assets | 725,615 | 722,527 | +3,088 | | Total Liabilities and Shareholders' Equity | 742,131 | 739,023 | +3,108 | | Total Liabilities | 719,929 | 722,175 | -2,246 | | Current Liabilities | 125,265 | 109,162 | +16,103 | | Non-current Liabilities | 594,664 | 613,013 | -18,349 | | Total Shareholders' Equity | 22,202 | 16,848 | +5,354 | [Condensed Consolidated Statement of Operations and Comprehensive Loss](index=5&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E7%B6%93%E7%87%9F%E5%8F%8A%E5%85%A8%E9%9D%A2%E虧%E6%90%8D%E8%A1%A8) For the six months ended June 30, 2025, the company reported zero oil sales, leading to an expanded net loss of CAD 11.845 million, and despite a decrease in finance costs, basic and diluted loss per share remained at CAD 0.04 Revenue Overview (CAD Thousands) | Revenue Item | Three Months Ended June 30 (2025) | Three Months Ended June 30 (2024) | Six Months Ended June 30 (2025) | Six Months Ended June 30 (2024) | | :--- | :--- | :--- | :--- | :--- | | Oil Sales, Net of Royalties | - | 10,266 | - | 21,458 | | Other Income | 373 | 380 | 541 | 916 | | Foreign Exchange Gain / (Loss) | 3,681 | (5,420) | 4,194 | (17,729) | | Total Revenue | 4,054 | 5,226 | 4,735 | 4,645 | Expenses Overview (CAD Thousands) | Expense Item | Three Months Ended June 30 (2025) | Three Months Ended June 30 (2024) | Six Months Ended June 30 (2025) | Six Months Ended June 30 (2024) | | :--- | :--- | :--- | :--- | :--- | | Diluent | - | 4,668 | - | 9,610 | | Transportation | - | 1,576 | - | 4,017 | | Operating | 2,473 | 3,269 | 4,351 | 7,559 | | Depletion and Depreciation | 176 | 1,984 | 360 | 4,603 | | General and Administrative | 2,008 | 1,857 | 7,309 | 6,461 | | Finance Costs | 1,449 | 2,920 | 4,560 | 5,660 | | Total Expenses | 6,106 | 16,274 | 16,580 | 37,910 | Net Income / (Loss) and Loss Per Share (CAD Thousands) | Metric | Three Months Ended June 30 (2025) | Three Months Ended June 30 (2024) | Six Months Ended June 30 (2025) | Six Months Ended June 30 (2024) | | :--- | :--- | :--- | :--- | :--- | | Loss Before Income Tax | (2,052) | (11,048) | (11,845) | (33,265) | | Net Income / (Loss) | (2,052) | (11,048) | (11,845) | (33,265) | | Net Income / (Loss) Attributable to Equity Holders of the Company for the Year | (1,981) | (10,974) | (11,697) | (33,118) | | Basic and Diluted Earnings / (Loss) Per Share | (0.01) | (0.05) | (0.04) | (0.14) | [Condensed Consolidated Statement of Changes in Equity](index=6&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%82%A1%E6%9D%B1%E6%AC%8A%E7%9B%8A%E8%AE%8A%E5%8B%95%E8%A1%A8) As of June 30, 2025, the company's total shareholders' equity increased to CAD 22.202 million, primarily driven by the issuance of common shares, despite recording a net loss during the period Overview of Changes in Equity (CAD Thousands) | Item | December 31, 2024 | June 30, 2025 | | :--- | :--- | :--- | | Total Share Capital | 16,848 | 22,202 | | Net Income (Loss) and Comprehensive Income (Loss) for the Year | (11,845) | (11,845) | | Issuance of Common Shares | - | 15,744 | [Condensed Consolidated Statement of Cash Flows](index=7&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E7%8F%BE%E9%87%91%E6%B5%81%E9%87%8F%E8%A1%A8) For the six months ended June 30, 2025, the company experienced a net cash outflow of CAD 0.821 million from operating activities and CAD 1.494 million from investing activities, offset by a net cash inflow of CAD 2.713 million from financing activities, resulting in a period-end cash balance of CAD 0.732 million Cash Flow Overview (CAD Thousands) | Activity Type | Three Months Ended June 30 (2025) | Three Months Ended June 30 (2024) | Six Months Ended June 30 (2025) | Six Months Ended June 30 (2024) | | :--- | :--- | :--- | :--- | :--- | | Net Cash Provided by (Used in) Operating Activities | 418 | (211) | (821) | (1,127) | | Net Cash Provided by (Used in) Investing Activities | (1,375) | 81 | (1,494) | 340 | | Net Cash Generated from Financing Activities | 1,358 | 664 | 2,713 | 1,192 | | Net Increase / (Decrease) in Cash | 401 | 534 | 398 | 405 | | Cash at End of Period | 732 | 914 | 732 | 914 | Notes to the Condensed Consolidated Interim Financial Statements [Company Information](index=8&type=section&id=1.%20%E6%9C%AC%E5%85%AC%E5%8F%B8%E8%B3%87%E6%96%99) Sunshine Oil Sands Ltd. is an oil sands heavy oil producer registered in Alberta, Canada, with shares listed on the Hong Kong Stock Exchange, and operates a joint venture in China for petroleum mineral evaluation and development - The company was incorporated on February 22, 2007, in Alberta, Canada, primarily engaged in oil sands heavy oil production in the Athabasca oil sands region of Canada[17](index=17&type=chunk) - The company's shares were listed on the Hong Kong Stock Exchange (stock code: 2012) on March 1, 2012, and voluntarily delisted from the Toronto Stock Exchange on September 30, 2015[17](index=17&type=chunk) - The company established Sunshine Oil Sands Hebei, a joint venture in China, on April 15, 2019, holding a **51% interest**[18](index=18&type=chunk) [Basis of Preparation](index=8&type=section&id=2.%20%E7%B7%A8%E8%A3%BD%E5%9F%BA%E6%BA%96) Despite a net loss of CAD 11.8 million and net current liabilities of approximately CAD 108.75 million for the six months ended June 30, 2025, the financial statements are prepared on a going concern basis, with the company's ability to continue as a going concern dependent on successful refinancing, debt restructuring, and securing additional funding - For the six months ended June 30, 2025, the Group incurred a net loss of approximately **CAD 11.8 million** and had net current liabilities of approximately **CAD 108.75 million**[20](index=20&type=chunk) - The company's ability to continue as a going concern depends on achieving projected earnings, profitable operations, restructuring cash outflows, controlling expenses, refinancing current debt, and obtaining additional financing[21](index=21&type=chunk) - Management is in discussions with existing shareholders and creditors to refinance current debt, secure additional funding, and meet debt repayment obligations due within the next 12 months[21](index=21&type=chunk) [Statement of Compliance](index=9&type=section&id=2.1%20%E5%90%88%E8%A6%8F%E8%AA%AA%E6%98%8E) The condensed consolidated interim financial statements are prepared in accordance with IFRS, HKEX Listing Rules, and the Hong Kong Companies Ordinance, presented in Canadian dollars, measured at historical cost, with certain disclosures condensed or omitted - The financial statements are prepared in accordance with International Financial Reporting Standards, the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited, and the Hong Kong Companies Ordinance[22](index=22&type=chunk) - The statements are presented in Canadian dollars and prepared on a historical cost basis, with financial instruments measured at fair value[22](index=22&type=chunk) - Certain information and disclosures normally included in audited annual consolidated financial statements have been condensed or omitted[22](index=22&type=chunk) [Adoption of Revised International Financial Reporting Standards (IFRS)](index=9&type=section&id=3.%20%E6%8E%A1%E7%94%A8%E7%B6%93%E4%BF%AE%E8%A8%82%E7%9A%84%E5%9C%8B%E9%9A%9B%E8%B2%A1%E5%8B%99%E5%A0%B1%E5%91%8A%E6%BA%96%E5%89%87(IFRS)) The Group has initially applied amendments to IAS 21 "Lack of Exchangeability" effective January 1, 2024, with no significant impact on financial performance or position, and new or revised IFRS issued but not yet effective are also not expected to have a material impact - The Group has initially applied the amendments to IAS 21 "Lack of Exchangeability" for the financial year beginning January 1, 2024[23](index=23&type=chunk)[24](index=24&type=chunk) - The application of new and revised IFRS has had no significant impact on the Group's financial performance and position for the current and prior periods[24](index=24&type=chunk) - The Directors anticipate that the application of new and revised IFRS issued but not yet effective will not have a material impact on the Group's results and financial position[25](index=25&type=chunk) [Trade and Other Receivables](index=10&type=section&id=4.%20%E6%87%89%E6%94%B6%E8%B2%BF%E6%98%93%E5%8F%8A%E5%85%B6%E4%BB%96%E6%87%89%E6%94%B6%E8%B3%A0%E9%A0%85) As of June 30, 2025, the Group's total trade and other receivables slightly decreased to CAD 17.34 million, with an average credit period of 30 days granted to customers, and expected credit losses on trade receivables are considered minimal Trade and Other Receivables (CAD Thousands) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Other Receivables – Current | 15,784 | 16,177 | | Loans Receivable – Current | 10,834 | 11,366 | | Loans Receivable – Non-current | 1,556 | 1,496 | | Total | 17,340 | 17,673 | - The Group grants its trade customers an average credit period of **30 days**[26](index=26&type=chunk) - As of June 30, 2025, the Company's Directors consider the expected credit losses on trade receivables to be minimal[29](index=29&type=chunk) [Exploration and Evaluation Assets](index=10&type=section&id=5.%20%E5%8B%98%E6%8E%A2%E5%8F%8A%E8%A9%95%E4%BC%B0%E8%B3%87%E7%94%A2) As of June 30, 2025, exploration and evaluation assets increased to CAD 241.2 million, primarily due to capital and non-cash expenditures, with no impairment losses or reversals recognized during the period, and impairment assessments based on the present value of future cash flows Exploration and Evaluation Assets Movements (CAD Thousands) | Item | December 31, 2024 | June 30, 2025 | | :--- | :--- | :--- | | Balance | 239,259 | 241,208 | | Capital Expenditure | 728 | 1,496 | | Non-cash Expenditure | 560 | 453 | - For the six months ended June 30, 2025, the Group recognized no impairment losses (or reversals) for cash-generating units of exploration and evaluation assets[32](index=32&type=chunk) - Impairment assessments are estimated using the fair value less costs of disposal method, calculated as the present value of expected future cash flows (after tax), based on reports from independent reserve evaluators GLJ Petroleum Consultants[31](index=31&type=chunk) [Property, Plant and Equipment](index=11&type=section&id=6.%20%E7%89%A9%E6%A5%AD%E3%80%81%E5%BB%A0%E6%88%BF%E5%8F%8A%E8%A8%AD%E5%82%99) As of June 30, 2025, the carrying value of property, plant and equipment slightly increased to CAD 478 million, with no impairment losses or reversals recognized for the West Ells cash-generating unit during the period, and impairment assessments based on the present value of future cash flows Property, Plant and Equipment Carrying Value (CAD Thousands) | Item | December 31, 2024 | June 30, 2025 | | :--- | :--- | :--- | | Carrying Value | 476,446 | 478,001 | - For the six months ended June 30, 2025, the Group recognized no impairment losses (or reversals) for the West Ells cash-generating unit[34](index=34&type=chunk) - Impairment assessments are estimated using the fair value less costs of disposal method, calculated as the present value of expected future cash flows (after tax), based on reports from independent reserve evaluators GLJ Petroleum Consultants[33](index=33&type=chunk) [Right-of-Use Assets and Lease Liabilities](index=12&type=section&id=7.%20%E4%BD%BF%E7%94%A8%E6%AC%8A%E8%B3%87%E7%94%A2%E5%8F%8A%E7%A7%9F%E8%B3%83%E8%B2%A0%E5%82%B5) As of June 30, 2025, total right-of-use assets decreased to CAD 4.85 million and lease liabilities decreased to CAD 0.809 million, primarily due to depreciation and foreign exchange adjustments, with lease liabilities measured at the present value of unpaid lease payments discounted at 10% Right-of-Use Assets Movements (CAD Thousands) | Item | December 31, 2024 | June 30, 2025 | | :--- | :--- | :--- | | Total | 5,326 | 4,850 | | Depreciation | (656) (2024) | (328) (2025) | | Foreign Exchange Adjustment | 318 (2024) | (148) (2025) | Lease Liabilities (CAD Thousands) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Lease Liabilities | 809 | 1,084 | - Lease liabilities are initially measured at the present value of unpaid lease payments at the commencement date, discounted using the interest rate implicit in the lease (10% for office and equipment)[36](index=36&type=chunk) [Trade and Other Payables](index=12&type=section&id=8.%20%E6%87%89%E4%BB%98%E8%B2%BF%E6%98%93%E5%8F%8A%E6%87%89%E8%A8%88%E8%B2%A0%E5%82%B5) As of June 30, 2025, total trade and other payables increased to CAD 295.5 million, with CAD 20.681 million of trade payables overdue by more than 90 days, indicating liquidity pressure Trade and Other Payables (CAD Thousands) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Trade Payables | 21,510 | 20,340 | | Interest Payable | 215,578 | 215,594 | | Other Payables | 23,608 | 23,520 | | Accrued Liabilities | 34,867 | 26,464 | | Total | 295,563 | 285,918 | Aging Analysis of Trade Payables (CAD Thousands) | Aging | June 30, 2025 | | :--- | :--- | | 0 - 30 Days | 130 | | 31 – 60 Days | 18 | | 61 – 90 Days | 681 | | > 90 Days | 20,681 | [Debt](index=13&type=section&id=9.%20%E5%82%B5%E5%8B%99) This section details the company's other loans and senior notes, including multiple interest waiver and deferral agreements, designed to provide more time for debt repayment or refinancing and to reduce financing costs [Other Loans](index=13&type=section&id=9.1%20%E5%85%B6%E4%BB%96%E8%B2%B8%E6%AC%BE) As of June 30, 2025, total other loans increased to CAD 24.517 million, with CAD 20.743 million classified as current liabilities, all unsecured and bearing annual interest rates between 0% and 36% Other Loans (CAD Thousands) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Current | 20,743 | 15,213 | | Non-current | 3,774 | 3,890 | | Total | 24,517 | 19,103 | - These loans are unsecured and bear annual interest rates ranging from **0% to 36%**[38](index=38&type=chunk) - Approximately **CAD 20.743 million** is due within one year[38](index=38&type=chunk) [Senior Notes](index=13&type=section&id=9.2%20%E5%84%AA%E5%85%88%E7%A5%A8%E6%93%9A) The company has entered into multiple interest waiver and deferral agreements with deferral holders, including for 2023, 2024, and 2025, waiving a total of USD 94.5 million in interest and extending the deferral period to August 31, 2027, to allow more time for repayment or refinancing - The 2023 Interest Waiver Agreement waived approximately **USD 31.5 million** in interest accrued from January 1, 2023, to December 31, 2023[39](index=39&type=chunk) - The 2023 Reinstatement and Amendment Deferral Agreement extended the deferral period to August 31, 2025, with unpaid amounts accruing interest at an annual rate of **10%**[41](index=41&type=chunk) - The 2024 Interest Waiver Agreement waived **USD 31.5 million** in interest accrued from January 1, 2024, to December 31, 2024[40](index=40&type=chunk) - The 2025 Reinstatement and Amendment Deferral Agreement extended the deferral period to August 31, 2027, with unpaid amounts continuing to accrue interest at an annual rate of **10%** (unless further interest waivers apply)[42](index=42&type=chunk) - The 2025 Interest Waiver Agreement waived **USD 31.5 million** in interest accrued from January 1, 2025, to December 31, 2025[43](index=43&type=chunk) [Provisions](index=14&type=section&id=10.%20%E6%92%A5%E5%82%99) As of June 30, 2025, the decommissioning liability provision increased to CAD 55.538 million, with estimated expenditures continuing until 2040, based on estimated costs for oil production area reclamation and abandonment, adjusted using discount and inflation rates Decommissioning Liability Provision (CAD Thousands) | Item | Balance as of January 1 | Impact of Discount Rate Change | Unwinding of Discount | Balance as of December 31 | | :--- | :--- | :--- | :--- | :--- | | 2025 | 53,049 | 2,052 | 437 | 55,538 | | 2024 | 49,829 | 1,466 | 1,754 | 53,049 | - As of June 30, 2025, the Group's total estimated undiscounted cash flows required to fulfill asset retirement obligations amounted to **CAD 81.4 million**[44](index=44&type=chunk) - Decommissioning costs are expected to continue until 2040, discounted using risk-free rates ranging from **3.59% to 4.28%** per annum and inflated at an annual rate of **2.0%**[44](index=44&type=chunk) [Income Tax](index=14&type=section&id=11.%20%E6%89%80%E5%BE%97%E7%A8%85) As of June 30, 2025, the Group's net deferred income tax asset was zero, primarily due to unrecognized deferred tax benefits offsetting deferred tax assets and liabilities Deferred Income Tax Assets (Liabilities) Components (CAD Thousands) | Item | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Exploration and Evaluation Assets and Property, Plant and Equipment | (33,236) | (50,611) | | Decommissioning Liability | 12,774 | 12,201 | | Tax Losses | 243,878 | 243,878 | | Deferred Tax Benefits Unrecognized | (223,435) | (205,487) | | Net Deferred Tax Assets | - | - | [Share Capital](index=15&type=section&id=12.%20%E8%82%A1%E6%9C%AC) As of June 30, 2025, the company's issued and fully paid share capital significantly increased to 503 million shares, totaling CAD 1.334 billion, primarily through the allotment of new shares to creditors to settle debts Movements in Issued and Fully Paid Share Capital | Item | June 30, 2025 (Number of Shares) | June 30, 2025 (CAD) | December 31, 2024 (Number of Shares) | December 31, 2024 (CAD) | | :--- | :--- | :--- | :--- | :--- | | Balance at Beginning of Year | 292,174,417 | 1,318,681 | 243,478,681 | 1,315,265 | | Placement – General Mandate | 48,695,736 | 3,049 | 48,695,736 | 3,416 | | Placement – Specific Mandate | 162,310,261 | 12,695 | - | - | | Balance at End of Year | 503,180,414 | 1,334,425 | 292,174,417 | 1,318,681 | - On April 17, 2025, the company allotted and issued **48,695,736 Class A common shares** to Creditor 1 to settle approximately **HKD 17.04 million** in debt[47](index=47&type=chunk) - On June 25, 2025, the company allotted and issued **60,000,000 Class A common shares** to Creditor 2 to settle approximately **HKD 38.4 million** in debt[47](index=47&type=chunk) - On April 28, 2025, the company allotted and issued **162,310,261 Class A common shares** to Creditor 3 to settle approximately **HKD 73.04 million** in debt[48](index=48&type=chunk) [Share-based Compensation](index=16&type=section&id=13.%20%E4%BB%A5%E8%82%A1%E4%BB%BD%E7%82%BA%E5%9F%BA%E7%A4%8E%E7%9A%84%E8%A3%9C%E5%84%9F) This section outlines the company's employee share option scheme and share option movements, noting that all share options expired by June 30, 2025, resulting in no outstanding options and no share-based compensation expenses recognized during the period [Employee Share Option Scheme](index=16&type=section&id=13.1%20%E5%93%A1%E5%B7%A5%E8%B3%BC%E8%82%A1%E6%AC%8A%E8%A8%88%E5%8A%83) The Post-IPO Share Option Scheme stipulates that the maximum number of Class A common shares reserved for issuance is 10% of the total issued and outstanding shares, with exercise prices determined by the Board, not lower than specific market prices on the HKEX - Under the Post-IPO Share Option Scheme, the maximum number of Class A common shares reserved for issuance is **10%** of the total issued and outstanding shares[50](index=50&type=chunk) - The exercise price of share options is determined by the Board, not lower than the closing price on the HKEX on the grant date or the volume-weighted average trading price for the preceding five trading days[50](index=50&type=chunk) [Share Option Movements](index=16&type=section&id=13.2%20%E8%B3%BC%E8%82%A1%E6%AC%8A%E8%AE%8A%E5%8B%95) As of June 30, 2025, all 200,000 outstanding share options at the beginning of the period had expired, resulting in no unexercised share options at period-end Share Option Movements Overview | Item | June 30, 2025 (Number of Share Options) | December 31, 2024 (Number of Share Options) | | :--- | :--- | :--- | | Balance at Beginning of Period | - | 200,000 | | Expired | - | (200,000) | | Balance at End of Period | - | - | - As of June 30, 2025, the weighted average remaining contractual life of unexercised share options was **0 years**[51](index=51&type=chunk) [Share-based Compensation](index=16&type=section&id=13.3%20%E4%BB%A5%E8%82%A1%E4%BB%BD%E7%82%BA%E5%9F%BA%E7%A4%8E%E7%9A%84%E8%A3%9C%E5%84%9F) For the three and six months ended June 30, 2025, the Group recognized no share-based compensation expenses - For the three and six months ended June 30, 2025, the Group recognized no share-based compensation expenses[52](index=52&type=chunk) [Revenue](index=16&type=section&id=14.%20%E6%94%B6%E5%85%A5) For the three and six months ended June 30, 2025, the company's oil sales (net of royalties) were zero, a significant decrease from the prior year, with all revenue derived from Canadian customers and recognized at a point in time Oil Sales (Net of Royalties) (CAD Thousands) | Period | 2025 | 2024 | | :--- | :--- | :--- | | Three Months Ended June 30 | - | 10,266 | | Six Months Ended June 30 | - | 21,458 | - All revenue from contracts with customers is derived from Canada and recognized at a point in time[54](index=54&type=chunk)[57](index=57&type=chunk) - The West Ells royalty rate is price-sensitive, starting at **1%** of oil sands heavy oil sales and increasing with West Texas Intermediate crude oil prices[54](index=54&type=chunk) [Segment Information](index=17&type=section&id=15.%20%E5%88%86%E9%A1%9E%E4%BF%A1%E6%81%AF) The Group operates in a single business segment: the mining, production, and sale of crude oil products, with no geographical information presented as all revenue and most non-current assets are located in Canada; Customer B contributed 73.3% of revenue in 2024, but there were no major customers in 2025 due to no sales - The Group operates in a single business segment based on its products: the mining, production, and sale of crude oil products[56](index=56&type=chunk) - No geographical information is presented as all the Group's revenue is derived from Canadian customers, and the majority of its non-current assets are located in Canada[57](index=57&type=chunk) - In 2024, Customer B contributed **73.3%** of the Group's revenue, while in 2025, there were no major customers due to no sales[58](index=58&type=chunk) [Other Income](index=17&type=section&id=16.%20%E5%85%B6%E4%BB%96%E6%94%B6%E5%85%A5) For the three months ended June 30, 2025, other income amounted to CAD 0.373 million, primarily from reimbursements by Burgess Energy Holdings L.L.C. for mineral and surface lease rentals incurred by the Group Other Income Overview (CAD Thousands) | Item | Three Months Ended June 30 (2025) | Three Months Ended June 30 (2024) | Six Months Ended June 30 (2025) | Six Months Ended June 30 (2024) | | :--- | :--- | :--- | :--- | :--- | | Interest Income | - | 3 | 2 | 4 | | Other Income | 373 | 377 | 539 | 746 | | Gain / (Loss) on Disposal of Assets | - | - | - | 166 | | Balance at End of Period | 373 | 380 | 541 | 916 | - Other income for the period primarily includes reimbursements from Burgess Energy Holdings L.L.C. to the Group for mineral and surface lease rentals incurred under the royalty agreement terms[59](index=59&type=chunk) [General and Administrative Expenses](index=18&type=section&id=17.%20%E4%B8%80%E8%88%AC%E5%8F%8A%E8%A1%8C%E6%94%BF%E9%96%8B%E6%94%AF) For the six months ended June 30, 2025, general and administrative expenses increased to CAD 7.311 million, mainly due to higher salaries, consulting fees, and other expenses General and Administrative Expenses (CAD Thousands) | Item | Three Months Ended June 30 (2025) | Three Months Ended June 30 (2024) | Six Months Ended June 30 (2025) | Six Months Ended June 30 (2024) | | :--- | :--- | :--- | :--- | :--- | | Salaries, Consulting Fees and Benefits | 1,615 | 1,373 | 3,234 | 2,819 | | Legal and Audit | 6 | 26 | 29 | 88 | | Other | 389 | 448 | 4,035 | 3,538 | | Period-end | 2,010 | 1,857 | 7,311 | 6,461 | [Finance Costs](index=18&type=section&id=18.%20%E8%9E%8D%E8%B3%87%E6%88%90%E6%9C%AC) For the six months ended June 30, 2025, finance costs decreased to CAD 4.56 million, primarily due to reduced interest expenses on loans from related companies and shareholders, despite a slight increase in senior notes interest expense Finance Costs (CAD Thousands) | Item | Three Months Ended June 30 (2025) | Three Months Ended June 30 (2024) | Six Months Ended June 30 (2025) | Six Months Ended June 30 (2024) | | :--- | :--- | :--- | :--- | :--- | | Senior Notes Interest Expense | 298 | 294 | 610 | 588 | | Other Loans Interest Expense | 218 | 71 | 338 | 133 | | Interest Expense on Loans from Related Companies and Shareholders | 718 | 2,030 | 3,088 | 3,908 | | Amortization of Discount on Provisions | - | 441 | 437 | 872 | | Period-end Balance | 1,449 | 2,920 | 4,560 | 5,660 | [Earnings / (Loss) Per Share](index=18&type=section&id=19.%20%E6%AF%8F%E8%82%A1%E7%9B%88%E5%88%A9%2F(%E虧%E6%90%8D)) For the six months ended June 30, 2025, basic and diluted loss per share was CAD 0.04, an improvement from CAD 0.14 in the prior year, mainly due to a narrower net loss Basic and Diluted Earnings / (Loss) Per Share | Period | 2025 | 2024 | | :--- | :--- | :--- | | Loss Per Share for the Six Months Ended June 30 | (0.04) | (0.14) | - Basic loss per share is calculated based on the loss attributable to owners of the Company of approximately **CAD 11.845 million** for the six months ended June 30, 2025 (2024: CAD 33.118 million), and the weighted average number of Class A common shares outstanding during the period[62](index=62&type=chunk)[63](index=63&type=chunk) [Capital and Financial Risk Management](index=19&type=section&id=20.%20%E8%B3%87%E6%9C%AC%E5%8F%8A%E9%87%91%E8%9E%8D%E9%A2%A8%E9%9A%AA%E7%AE%A1%E7%90%86) The Group manages its financial risks and capital requirements by raising capital through equity issuance and debt, and monitors foreign exchange rates, while facing liquidity risk and needing to ensure sufficient liquidity to repay maturing debts [Capital Risk Management](index=19&type=section&id=20.1%20%E8%B3%87%E6%9C%AC%E9%A2%A8%E9%9A%AA%E7%AE%A1%E7%90%86) As of June 30, 2025, the Group's working capital deficit was CAD 108.7 million and shareholders' equity was CAD 22.202 million, with the company raising capital through equity issuance and debt to maintain financial flexibility and future business development Capital Structure (CAD Thousands) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Working Capital Deficit | 108,749 | 92,666 | | Shareholders' Equity | 22,202 | 16,848 | | Total | 130,951 | 109,514 | - The Group's strategy is to raise sufficient capital through equity issuance and debt to maintain its capital base, aiming for financial flexibility and future business development[64](index=64&type=chunk) - For the six months ended June 30, 2025, there were no changes in the Group's capital management objectives and strategies[65](index=65&type=chunk) [Categories of Financial Instruments](index=19&type=section&id=20.2%20%E9%87%91%E8%9E%8D%E5%B7%A5%E5%85%B7%E9%A1%9E%E5%88%A5) As of June 30, 2025, the Group's financial assets measured at amortized cost totaled CAD 16.241 million, and financial liabilities measured at amortized cost totaled CAD 687 million Categories of Financial Instruments (CAD Thousands) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Financial Assets Measured at Amortized Cost | 16,241 | 16,681 | | Financial Liabilities Measured at Amortized Cost | 687,081 | 668,042 | [Fair Value of Financial Instruments](index=19&type=section&id=20.3%20%E9%87%91%E8%9E%8D%E5%B7%A5%E5%85%B7%E7%9A%84%E5%85%AC%E5%85%81%E5%80%BC) The Company's Directors believe that the carrying amounts of financial assets and liabilities recognized at amortized cost in the consolidated financial statements approximate their fair values, which are determined using discounted cash flow analysis - The fair value of financial assets and liabilities is determined using generally accepted valuation models, employing discounted cash flow analysis[67](index=67&type=chunk) - The Company's Directors believe that the carrying amounts of financial assets and liabilities recognized at amortized cost approximate their fair values[67](index=67&type=chunk) [Currency Risk](index=20&type=section&id=20.4%20%E8%B2%A8%E5%B9%A3%E9%A2%A8%E9%9A%AA) The Group is exposed to foreign exchange rate fluctuations arising from expenses and debts denominated in USD, HKD, and RMB; a 1% increase or decrease in the USD to CAD exchange rate would impact the carrying value of debt by approximately CAD 2.6 million - The Group is exposed to risks arising from foreign exchange rate fluctuations, primarily related to expense commitments, deposits, accounts payable, and long-term debt denominated in USD, HKD, and RMB[68](index=68&type=chunk) 1% Exchange Rate Fluctuation Impact on Debt Carrying Value (CAD Thousands, as of June 30, 2024) | Currency | Impact | | :--- | :--- | | USD | Approx. 2,700 | | HKD | Approx. 700 | | RMB | Approx. 100 | - For the six months ended June 30, 2025, the Group did not enter into any forward exchange rate contracts[68](index=68&type=chunk) [Liquidity Risk](index=20&type=section&id=20.5%20%E6%B5%81%E5%8B%95%E9%A2%A8%E9%9A%AA) The Group manages liquidity risk by developing plans to ensure sufficient liquidity to repay liabilities at maturity through equity or debt proceeds; as of June 30, 2025, total financial liabilities cash outflows were CAD 663.5 million, with CAD 124.6 million due within one year - The Group manages liquidity risk by developing plans to ensure sufficient liquidity to repay liabilities at maturity through equity or debt proceeds[70](index=70&type=chunk) Financial Liabilities Cash Flow Timing (CAD Thousands, as of June 30, 2025) | Item | Total | Within One Year | One to Three Years | | :--- | :--- | :--- | :--- | | Trade and Accrued Payables | 295,563 | 92,258 | 203,305 | | Debt | 368,019 | 32,415 | 335,604 | | Total | 663,582 | 124,673 | 538,909 | [Related Party Transactions](index=20&type=section&id=21.%20%E9%97%9C%E8%81%AF%E6%96%B9%E4%BA%A4%E6%98%93) This section discloses the Group's transactions with related parties, including consulting fees paid to a director's associated company, remuneration for key management personnel and directors, and loans from related companies and shareholders [Purchase and Sale Transactions](index=21&type=section&id=21.1%20%E8%B2%B7%E8%B3%A3%E4%BA%A4%E6%98%93) For the six months ended June 30, 2025, the Group paid CAD 0.25 million in management and consulting fees to a consulting firm associated with a director, and Executive Chairman Mr. Sun Guoping beneficially owns approximately 30.00% of the company's issued common shares - For the six months ended June 30, 2025, a consulting firm associated with a director of Sunshine Oil Sands charged the Group **CAD 0.25 million** for management and consulting services[73](index=73&type=chunk) - Mr. Sun Guoping, the Executive Chairman of the Company, beneficially owns or controls or directs **150,962,591 common shares**, representing approximately **30.00%** of the Company's issued common shares[73](index=73&type=chunk) [Key Management Personnel and Directors' Remuneration](index=21&type=section&id=21.2%20%E4%B8%BB%E8%A6%81%E7%AE%A1%E7%90%86%E4%BA%BA%E5%93%A1%E5%8F%8A%E8%91%A3%E4%BA%8B%E7%9A%84%E9%85%AC%E9%87%91) For the six months ended June 30, 2025, total remuneration for directors and key management personnel was CAD 1.144 million, a slight decrease from the prior year Directors' and Key Management Personnel Remuneration (CAD Thousands) | Item | Three Months Ended June 30 (2025) | Three Months Ended June 30 (2024) | Six Months Ended June 30 (2025) | Six Months Ended June 30 (2024) | | :--- | :--- | :--- | :--- | :--- | | Directors' Fees | 71 | 92 | 162 | 182 | | Salaries and Allowances | 491 | 489 | 980 | 980 | | Share-based Compensation | 1 | 1 | 2 | - | | Total | 563 | 580 | 1,144 | 1,162 | [Loans from Related Companies](index=21&type=section&id=21.3%20%E9%97%9C%E8%81%AF%E5%85%AC%E5%8F%B8%E8%B2%B8%E6%AC%BE) As of June 30, 2025, non-current loans from related companies decreased to CAD 53.897 million from December 31, 2024, these loans are unsecured, bear a 10% annual interest rate, and are extendable for 2 to 3 years Loans from Related Companies (CAD Thousands) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Non-current | 53,897 | 56,205 | - As of June 30, 2025, loans obtained by the Group from related companies are unsecured, bear an annual interest rate of **10%**, with approximately **CAD 53.897 million** extendable for 2 to 3 years[75](index=75&type=chunk) [Shareholder Loans](index=21&type=section&id=21.4%20%E8%82%A1%E6%9D%B1%E8%B2%B8%E6%AC%BE) As of June 30, 2025, shareholder loans significantly decreased to CAD 3.114 million, these loans are unsecured, bear a 10% annual interest rate, and have maturity dates between 1 and 3 years Shareholder Loans (CAD Thousands) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Non-current | 3,114 | 20,990 | - As of June 30, 2025, loans from shareholders held by the Group are unsecured, bear an annual interest rate of **10%**, with approximately **CAD 3.114 million** maturing between 1 and 3 years[76](index=76&type=chunk) [Commitments and Contingencies](index=21&type=section&id=22.%E6%89%BF%E8%AB%BE%E5%92%8C%E7%AA%81%E7%99%BC%E4%BA%8B%E9%A0%85) The Group faces various commitments and contingencies, including annual lease rental obligations of CAD 2.5 million, disputes with RMWB over municipal property taxes and penalties, and a New York State court judgment on senior notes, for which the company is actively pursuing legal remedies [Commitments](index=21&type=section&id=22.1%20%E6%89%BF%E8%AB%BE) As of June 30, 2025, the Group has an annual obligation to pay approximately CAD 2.5 million in oil sands mineral lease rentals and surface lease rentals - The Group has an annual obligation to pay approximately **CAD 2.5 million** in oil sands mineral lease rentals and surface lease rentals[77](index=77&type=chunk) [Contingencies](index=22&type=section&id=22.2%20%E7%AA%81%E7%99%BC%E4%BA%8B%E9%A0%85) The Group is actively negotiating to resolve disputes with the Regional Municipality of Wood Buffalo (RMWB) regarding municipal property taxes (CAD 17.2 million) and overdue penalties (CAD 23.7 million) for 2016-2025, and has sought judicial review; additionally, the company is appealing a New York State court judgment for approximately USD 19.694 million on senior notes - The Company received demand notices from RMWB for municipal property taxes from 2016 to 2025, totaling **CAD 17.2 million** in accrued taxes and **CAD 23.7 million** in accrued overdue penalties[78](index=78&type=chunk) - The Company has sought judicial review to determine the impact of non-compliant tax notices on RMWB's property tax claims[78](index=78&type=chunk) - The Group received a judgment from a New York State court to pay non-deferral holders of senior notes a total of approximately **USD 19.694 million** (approximately **CAD 26.048 million**) in principal and interest, which the Company has appealed[80](index=80&type=chunk) - As of June 30, 2025, the Company had incurred **CAD 0.82 million** (approximately **USD 0.57 million**) in liens arising in the normal course of business[79](index=79&type=chunk) [Subsidiaries](index=22&type=section&id=23.%20%E9%99%84%E5%B1%AC%E5%85%AC%E5%8F%B8) The Group owns several wholly-owned subsidiaries (Sunshine Oil Sands (Hong Kong) Limited, Boswell Investments Limited, Sunshine Oil Sands Shanghai) and a 51% owned joint venture (Sunshine Oil Sands Hebei), with most having no operating activities as of June 30, 2024 - The Company owns several wholly-owned subsidiaries, including Sunshine Oil Sands (Hong Kong) Limited, Boswell Investments Limited (registered in the British Virgin Islands to seek new investment opportunities), and Sunshine Oil Sands Shanghai[81](index=81&type=chunk) - The Company's **51%** owned joint venture is Sunshine Oil Sands Hebei[82](index=82&type=chunk) - As of June 30, 2024, most subsidiaries had no operating activities[81](index=81&type=chunk)[82](index=82&type=chunk) [Supplemental Cash Flow Information](index=23&type=section&id=24.%20%E8%A3%9C%E5%85%85%E7%8F%BE%E9%87%91%E6%B5%81%E6%8A%AB%E9%9C%B2) For the six months ended June 30, 2025, non-cash working capital changes provided a net cash inflow of CAD 9.516 million from operating activities, primarily influenced by an increase in trade and other payables Non-cash Working Capital Movements (CAD Thousands) | Item | Three Months Ended June 30 (2025) | Three Months Ended June 30 (2024) | Six Months Ended June 30 (2025) | Six Months Ended June 30 (2024) | | :--- | :--- | :--- | :--- | :--- | | Trade and Other Receivables | (324) | 577 | (377) | (224) | | Prepaid Expenses and Deposits | - | (86) | 238 | (1) | | Trade and Other Payables | 3,992 | 23 | 9,655 | 4,374 | | Total | 3,668 | 514 | 9,516 | 4,149 | [Subsequent Events](index=23&type=section&id=25.%20%E5%BE%8C%E7%BA%8C%E4%BA%8B%E9%A0%85) Subsequent to the reporting period, the company settled Mr. Zhang Jun's debt by issuing shares on July 30, 2025, and entered an agreement to acquire a 51% equity interest in Nobao Technology Co. Ltd. on August 19, 2025; additionally, the company received a winding-up petition from Qiaoshi Finance Limited on August 20, 2025, which it is actively opposing - On July 30, 2025, the company entered into a settlement agreement with Mr. Zhang Jun, allotting and issuing **8,174,030 Class A ordinary voting shares** at an issue price of **HKD 0.50 per share** to fully and finally settle his outstanding debt of **HKD 4,087,015**[84](index=84&type=chunk) - On August 19, 2025, the company agreed to acquire a **51% equity interest** in Nobao Technology Co. Ltd. for a consideration of **HKD 50.91945 million**, to be paid by issuing **56,983,240 consideration shares**[84](index=84&type=chunk) - On August 20, 2025, the company received a winding-up petition from Qiaoshi Finance Limited for a financial obligation of **HKD 3.106295 million**, which the company is taking legal measures to vigorously oppose[85](index=85&type=chunk) [Approval of Interim Consolidated Financial Statements](index=23&type=section&id=26.%20%E6%89%B9%E5%87%86%E4%B8%AD%E6%9C%9F%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8) The Board of Directors approved the publication of the condensed interim consolidated financial statements on August 28, 2025 (Calgary time) / August 29, 2025 (Hong Kong time) - The Board of Directors approved the condensed interim consolidated financial statements and authorized their publication on August 28, 2025 (Calgary time) / August 29, 2025 (Hong Kong time)[86](index=86&type=chunk) Appendix to the Condensed Consolidated Interim Financial Statements (Unaudited) [Sunshine Oil Sands Ltd. Non-Consolidated Statement of Financial Position](index=24&type=section&id=A1.%20%E9%99%BD%E5%85%89%E6%B2%B9%E7%A0%82%E6%9C%89%E9%99%90%E5%85%AC%E5%8F%B8%E9%9D%9E%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, Sunshine Oil Sands Ltd.'s non-consolidated statement of financial position shows total assets of CAD 737.3 million, total liabilities of CAD 706.6 million, and total shareholders' equity of CAD 30.726 million, a decrease from December 31, 2024 Sunshine Oil Sands Ltd. Non-Consolidated Statement of Financial Position (CAD Thousands) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Assets | 737,378 | 738,246 | | Total Liabilities | 706,652 | 673,623 | | Total Shareholders' Equity | 30,726 | 64,623 | [Directors' Remuneration and Other Staff Costs](index=26&type=section&id=A2.%20%E8%91%A3%E4%BA%8B%E9%85%AC%E9%87%91%E5%8F%8A%E5%85%B6%E4%BB%96%E5%93%A1%E5%B7%A5%E6%88%90%E6%9C%AC) For the six months ended June 30, 2025, total staff costs (including directors' remuneration) increased significantly to CAD 4.483 million from CAD 2.819 million in the prior year, primarily due to growth in other staff salaries and benefits Directors' Remuneration and Other Staff Costs (CAD Thousands) | Item | Three Months Ended June 30 (2025) | Three Months Ended June 30 (2024) | Six Months Ended June 30 (2025) | Six Months Ended June 30 (2024) | | :--- | :--- | :--- | :--- | :--- | | Directors' Remuneration | 563 | 580 | 1,144 | 1,162 | | Other Staff Costs | 1,820 | 793 | 2,858 | 1,657 | | Total Staff Costs (Including Directors' Remuneration) | 2,383 | 1,373 | 4,483 | 2,819 | - Other staff salaries and other benefits increased from **CAD 1.657 million** for the six months ended June 30, 2024, to **CAD 2.801 million** for the same period in 2025[89](index=89&type=chunk)

Financial Performance - The company recorded an unaudited net loss of approximately RMB 4.45 million for the six months ended June 30, 2025, compared to a net loss of approximately RMB 5.51 million for the same period in 2024, representing a decrease in loss of about 19.2%[8] - Total unaudited revenue for the six months ended June 30, 2025, was approximately RMB 5.59 million, accounting for 65% of the total unaudited revenue of approximately RMB 8.66 million for the same period in 2024[8] - Total revenue for the six months ended June 30, 2025, was approximately RMB 5.59 million, representing a decrease of about 65% compared to the same period in 2024[53] - The company's total revenue for the first half of 2025 was RMB 5,585,018.75, a decrease of 35.5% compared to RMB 8,659,011.97 in the same period of 2024[33] - The gross profit for the six months ended June 30, 2025, was approximately RMB 2.10 million, with a gross margin of about 38%, compared to 40% in the same period of 2024[54] - Basic and diluted earnings per share for the first half of 2025 were both (RMB 0.00231), a decrease from (RMB 0.00291) in the first half of 2024, reflecting a decline of about 20.7%[13] - Total comprehensive income for the period from January 1 to June 30, 2025, was (RMB 4,449,140.12), compared to (RMB 5,514,962.85) in the same period of 2024, indicating a decrease of approximately 19.4%[13] Assets and Liabilities - The company's total current assets as of June 30, 2025, amounted to RMB 28.57 million, an increase from RMB 26.82 million as of December 31, 2024[7] - The total liabilities of the company as of June 30, 2025, were RMB 99.85 million, compared to RMB 96.76 million as of December 31, 2024, indicating an increase of approximately 3.2%[10] - The company's total assets decreased to RMB 48.64 million as of June 30, 2025, from RMB 49.99 million as of December 31, 2024[10] - The total assets of the company as of June 30, 2025, were 48,643,114.58, a decrease from 49,999,190.96 as of December 31, 2024[47] - Total liabilities increased to 99,851,437.85 as of June 30, 2025, compared to 96,758,374.11 as of December 31, 2024[47] Cash Flow - Cash inflow from operating activities for the first half of 2025 was RMB 7,386,864.36, down from RMB 7,710,743.04 in 2024, representing a decrease of approximately 4.2%[15] - Net cash flow from operating activities for the first half of 2025 was (RMB 1,428,565.94), an improvement compared to (RMB 3,992,620.50) in the same period of 2024, indicating a reduction in losses[15] - Cash inflow from financing activities in the first half of 2025 was RMB 57,985.13, significantly lower than RMB 4,335,800.00 in 2024, showing a decrease of approximately 98.7%[16] - Net cash flow from financing activities for the first half of 2025 was (RMB 73,431.52), compared to a positive cash flow of RMB 2,954,584.50 in the same period of 2024, indicating a shift in financing strategy[16] - The ending cash and cash equivalents balance as of June 30, 2025, was RMB 1,331,293.09, down from RMB 1,185,265.79 at the end of June 2024[16] - The company reported a decrease in cash outflows related to operating activities, which totaled RMB 8,815,430.30 in the first half of 2025, compared to RMB 11,703,363.54 in 2024, reflecting a reduction of approximately 24.9%[15] Expenses - The total operating costs for the six months ended June 30, 2025, were approximately RMB 10.04 million, down from RMB 14.47 million for the same period in 2024, reflecting a decrease of about 30.5%[12] - Research and development expenses for the six months ended June 30, 2025, were approximately RMB 0.85 million, compared to RMB 1.00 million for the same period in 2024, showing a decrease of about 15.0%[12] - Total sales expenses for the first half of 2025 amounted to 1,052,649.29, a decrease of 30.2% compared to 1,509,091.26 in the same period of 2024[35] - Management expenses totaled 4,540,965.48 in the first half of 2025, down 31.7% from 6,625,145.97 in the first half of 2024[36] - Financial expenses decreased to 90,407.85 in the first half of 2025, down 41.4% from 154,367.75 in the same period of 2024[38] - Other income for the first half of 2025 was 704.13, significantly lower than 2,840.85 in the same period of 2024[39] Shareholder Information - Tianan Enterprise holds 328,363,637 domestic shares, representing approximately 26.23% of total issued domestic shares[74] - Chen Jing holds a total of 485,832,335 domestic shares, accounting for about 38.81% of total issued domestic shares[74] - Gao Xiang Investment holds 254,844,804 domestic shares, which is about 20.36% of total issued domestic shares[74] - The total number of domestic shares held by major shareholders indicates a significant concentration of ownership, with the top three shareholders holding over 60% of total domestic shares[74] - The company has seen a transfer of shares among major shareholders, indicating potential strategic realignments[73] - The overall market presence of the company is reinforced by substantial holdings from various investment entities, enhancing its financial stability[74] Corporate Governance - The company has adopted and complied with the corporate governance code as per GEM Listing Rules Appendix C1 for the six months ending June 30, 2025[85] - The company has revised its articles of association to remove the supervisory board and clarify the functions of the audit committee, approved at the shareholders' annual general meeting on June 27, 2025[86] - The company has ensured compliance with applicable laws and regulations in mainland China and Hong Kong, with no significant violations reported as of June 30, 2025[89] - The company has adopted a code of conduct for securities trading by directors and supervisors, effective until June 28, 2025, with no known violations reported[90] - The audit committee, chaired by independent non-executive director Ms. Wang Qian, reviewed the unaudited consolidated results for the six months ended June 30, 2025, confirming compliance with applicable accounting standards[92] - There are no significant lawsuits or arbitrations involving the company as of June 30, 2025, with no known threats to the group[93] Employee Information - Employee costs totaled approximately RMB 2.1 million for the six months ending June 30, 2025, down from RMB 2.38 million in 2024[65] - As of June 30, 2025, the group had 37 full-time employees, a decrease from 39 in 2024[65] Strategic Initiatives - The group aims to diversify its operations and will explore financing options such as issuing new shares and bank loans to support business development[60] - The group is actively promoting its lens WiFi products and exploring new sales models to attract new customer segments[60] - As of June 30, 2025, the group secured new orders from mobile communication operators in provinces such as Heilongjiang and Inner Mongolia, focusing on antenna business[60] Miscellaneous - The company did not recommend the distribution of an interim dividend for the six months ended June 30, 2025[5] - The company did not acquire any significant intangible assets during the period, consistent with 2024[29] - The company did not purchase, sell, or redeem any of its listed securities during the six months ending June 30, 2025[82] - The company has no significant events affecting its operations and financial performance after June 30, 2025, until the interim results announcement date[80]

Company Information [Board Members and Committees](index=3&type=section&id=Board%20Members%20and%20Committees) The Board of Directors consists of executive and independent non-executive directors, supported by Review, Nomination, Remuneration, and Strategy Committees - The Board of Directors includes **6 executive directors** and **3 independent non-executive directors**[6](index=6&type=chunk) - Four Board committees are established: Review, Nomination, Remuneration, and Strategy[6](index=6&type=chunk) [Registration and Business Locations](index=3&type=section&id=Registration%20and%20Business%20Locations) The company is registered in the Cayman Islands, with its headquarters and main China operations in Xiamen, Fujian Province, and its principal Hong Kong office in Causeway Bay - The company is registered in the **Cayman Islands**[6](index=6&type=chunk) - The main operating location in China is **Xiamen, Fujian Province**[6](index=6&type=chunk) [Share Registrar and Principal Bankers](index=4&type=section&id=Share%20Registrar%20and%20Principal%20Bankers) The Cayman Islands principal share registrar is Conyers Trust Company (Cayman) Limited, and the Hong Kong share registrar is Tricor Investor Services Limited, with principal bankers being China Construction Bank and Industrial Bank - The Hong Kong share registrar is **Tricor Investor Services Limited**[7](index=7&type=chunk) - Principal bankers are **China Construction Bank (Xinglin Branch)** and **Industrial Bank (Xiamen Wenbin Branch)**[7](index=7&type=chunk) Financial Highlights [Overview of Key Financial Indicators](index=5&type=section&id=Overview%20of%20Key%20Financial%20Indicators) For the six months ended June 30, 2025, the company's revenue increased by 6.4% to RMB259.7 million, but gross profit significantly decreased by 82.6% to RMB7.9 million, resulting in a loss of RMB49.1 million for the period Key Financial Data for the Six Months Ended June 30 | Metric | 2025 (RMB thousand) | 2024 (RMB thousand) | Change % | | :--- | :--- | :--- | :--- | | Revenue | 259,673 | 244,079 | 6.4% | | Gross Profit | 7,905 | 45,517 | (82.6%) | | Loss/(Profit) for the Period | (49,061) | 1,172 | (4,286.1%) | - Revenue growth was primarily driven by a **14.0% increase in sales of ready-mixed concrete** and a **6.8% increase in revenue from iron ore tailings recycling and eco-friendly bricks**[9](index=9&type=chunk) - Gross profit significantly decreased by **82.6%**, mainly due to a gross loss in the ready-mixed concrete business[10](index=10&type=chunk) - The company recorded a **loss of RMB49.1 million** for the current period, compared to a profit of RMB1.2 million in the same period last year[11](index=11&type=chunk) Chairman's Report [Business Overview and Performance Review](index=6&type=section&id=Business%20Overview%20and%20Performance%20Review) The Group primarily manufactures and supplies concrete building materials in Xiamen, Fujian, and engages in comprehensive utilization of iron ore tailings and eco-friendly brick production in Changjiang, Hainan, with revenue growth driven by tailings recycling and ready-mixed concrete, but overall gross profit declined significantly due to gross loss in ready-mixed concrete, leading to a net loss - The Group's business is categorized into **ready-mixed concrete, precast concrete components, and iron ore tailings recycling and eco-friendly bricks**[12](index=12&type=chunk) - Revenue for the period was approximately **RMB259.7 million**, a **6.4% year-on-year increase**, primarily driven by increased revenue from iron ore tailings recycling and ready-mixed concrete[12](index=12&type=chunk) - Overall gross profit decreased by **82.6% to RMB7.9 million**, mainly due to a gross loss of approximately **RMB19.3 million** in the ready-mixed concrete business[13](index=13&type=chunk) - The Group recorded a **net loss of approximately RMB49.1 million** for the period, primarily attributable to segment losses in the ready-mixed concrete and precast concrete components businesses[13](index=13&type=chunk) [Business Outlook](index=6&type=section&id=Business%20Outlook) Despite anticipated ongoing market pressure in ready-mixed concrete and precast concrete components, the Group remains optimistic about the iron ore tailings recycling and eco-friendly bricks business, expecting it to continue generating strong revenue - Market pressure on ready-mixed concrete and precast concrete components is expected to persist[13](index=13&type=chunk) - The outlook for the **comprehensive utilization of iron ore tailings business is optimistic**, with expectations of continued strong revenue generation[13](index=13&type=chunk) Management Discussion and Analysis [Business Review](index=7&type=section&id=Business%20Review) The Group's revenue increased by 6.4% to RMB259.7 million, with ready-mixed concrete revenue up 14.0% but incurring losses due to intense competition, while precast concrete components revenue sharply declined by 91.8% with a segment loss, and iron ore tailings recycling and eco-friendly bricks revenue grew by 6.8% due to higher selling prices, but cost of sales increased by 26.8%, leading to an 82.6% decrease in gross profit [Revenue Analysis (By Business Segment)](index=7&type=section&id=Revenue%20Analysis%20%28By%20Business%20Segment%29) Total revenue for the period was approximately RMB259.7 million, a 6.4% year-on-year increase, with ready-mixed concrete revenue growing 14.0% to RMB148.2 million but remaining unprofitable due to intense market competition, precast concrete components revenue significantly decreasing by 91.8% to RMB870 thousand, and iron ore tailings recycling and eco-friendly bricks revenue increasing by 6.8% to RMB110.6 million, mainly due to higher selling prices Comparison of Revenue by Business Segment | Business Segment | 2025 (RMB thousand) | 2024 (RMB thousand) | Change % | | :--- | :--- | :--- | :--- | | Ready-mixed Concrete | 148,220 | 130,000 | 14.0% | | Precast Concrete Components | 870 | 10,600 | (91.8%) | | Iron Ore Tailings Recycling and Eco-friendly Bricks | 110,600 | 103,500 | 6.8% | | **Total Revenue** | **259,700** | **244,100** | **6.4%** | - The ready-mixed concrete segment incurred losses due to **intense competition and narrowing profit margins** in the Xiamen market[20](index=20&type=chunk) - Precast concrete components revenue significantly decreased and resulted in a segment loss, also impacted by **fierce competition**[20](index=20&type=chunk) [Cost of Sales](index=7&type=section&id=Cost%20of%20Sales) Cost of sales increased by 26.8% year-on-year to RMB251.8 million, primarily due to increased revenue from iron ore tailings recycling and eco-friendly bricks, and rising raw material costs for ready-mixed concrete Comparison of Cost of Sales | Metric | 2025 (RMB thousand) | 2024 (RMB thousand) | Change % | | :--- | :--- | :--- | :--- | | Cost of Sales | 251,800 | 198,600 | 26.8% | - The increase in cost of sales was mainly influenced by **higher revenue from iron ore tailings recycling and eco-friendly bricks** and **rising raw material costs for ready-mixed concrete**[21](index=21&type=chunk) [Gross Profit and Gross Margin](index=7&type=section&id=Gross%20Profit%20and%20Gross%20Margin) Overall gross profit significantly decreased by 82.6% to RMB7.9 million, primarily because the increase in cost of sales outpaced revenue growth, particularly as the ready-mixed concrete business shifted from a gross profit in the prior period to a gross loss of approximately RMB19.3 million in the current period Comparison of Gross Profit | Metric | 2025 (RMB thousand) | 2024 (RMB thousand) | Change % | | :--- | :--- | :--- | :--- | | Gross Profit | 7,900 | 45,500 | (82.6%) | - The ready-mixed concrete business shifting from a gross profit of approximately **RMB12.9 million** in the same period of 2024 to a gross loss of approximately **RMB19.3 million** in the current period is the primary reason for the overall gross profit decline[23](index=23&type=chunk) [Operating Expenses and Profit](index=8&type=section&id=Operating%20Expenses%20and%20Profit) Other income increased by 83.4% to RMB5.2 million, selling expenses decreased by 38.1%, and administrative expenses increased by 46.5% to RMB42.6 million, mainly due to reclassification of precast concrete component production line depreciation, while net finance costs decreased by 13.6%, and income tax shifted from a credit to an expense, resulting in a loss of RMB49.1 million for the period [Other Income](index=8&type=section&id=Other%20Income) Other income increased by 83.4% to RMB5.2 million, primarily due to non-recurring government grants and awards, as well as compensation for delayed settlement of trade receivables Comparison of Other Income | Metric | 2025 (RMB thousand) | 2024 (RMB thousand) | Change % | | :--- | :--- | :--- | :--- | | Other Income | 5,200 | 2,800 | 83.4% | - The increase in other income was mainly attributable to **non-recurring government grants** and **compensation for delayed settlement of trade receivables**[24](index=24&type=chunk) [Selling Expenses](index=8&type=section&id=Selling%20Expenses) Selling expenses decreased by 38.1% to RMB6.5 million, primarily due to reduced sales volume of precast concrete components Comparison of Selling Expenses | Metric | 2025 (RMB thousand) | 2024 (RMB thousand) | Change % | | :--- | :--- | :--- | :--- | | Selling Expenses | 6,500 | 10,500 | (38.1%) | - The decrease in selling expenses was mainly due to **lower sales volume of precast concrete components**[25](index=25&type=chunk) [Administrative Expenses](index=8&type=section&id=Administrative%20Expenses) Administrative expenses increased by 46.5% to RMB42.6 million, primarily due to the reclassification of depreciation for the precast concrete component production line to administrative costs following its temporary suspension Comparison of Administrative Expenses | Metric | 2025 (RMB thousand) | 2024 (RMB thousand) | Change % | | :--- | :--- | :--- | :--- | | Administrative Expenses | 42,600 | 29,100 | 46.5% | - The increase in administrative expenses was primarily due to the **reclassification of depreciation for the precast concrete component production line**[26](index=26&type=chunk) [Net Finance Costs](index=8&type=section&id=Net%20Finance%20Costs) Net finance costs decreased by 13.6% to RMB8.7 million, mainly due to a reduction in interest on bank borrowings Comparison of Net Finance Costs | Metric | 2025 (RMB thousand) | 2024 (RMB thousand) | Change % | | :--- | :--- | :--- | :--- | | Net Finance Costs | 8,700 | 10,000 | (13.6%) | - The decrease in net finance costs was mainly due to **lower interest on bank borrowings**[27](index=27&type=chunk) [Income Tax Expense/Credit](index=8&type=section&id=Income%20Tax%20Expense%2FCredit) Income tax expense for the period was approximately RMB1.2 million, compared to an income tax credit of approximately RMB1.3 million in the prior period, primarily due to losses in the ready-mixed concrete and precast concrete components businesses Comparison of Income Tax Expense/Credit | Metric | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Income Tax Expense/(Credit) | 1,200 | (1,300) | - Income tax expense was primarily due to **losses in the ready-mixed concrete and precast concrete components businesses**[28](index=28&type=chunk) [Loss/Profit for the Period](index=8&type=section&id=Loss%2FProfit%20for%20the%20Period) Considering the aforementioned factors, the Group recorded a loss of approximately RMB49.1 million for the current period, compared to a profit of RMB1.2 million in the prior period Comparison of Loss/Profit for the Period | Metric | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Loss/(Profit) for the Period | (49,100) | 1,200 | [Liquidity and Financial Resources](index=8&type=section&id=Liquidity%20and%20Financial%20Resources) The Group primarily funds its operations through cash generated from operating activities and borrowings, reporting net current liabilities of approximately RMB37.5 million and cash and cash equivalents of approximately RMB15.7 million as of June 30, 2025, with a significant decrease in current borrowings and a substantial increase in non-current borrowings, leading to a rise in the gearing ratio to 54% - The Group primarily funds its operations through **cash generated from operating activities and borrowings**[30](index=30&type=chunk) Liquidity and Borrowing Status | Metric | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Net Current Liabilities | 37,500 | 72,500 | | Cash and Cash Equivalents | 15,700 | 19,000 | | Current Borrowings | 121,100 | 227,700 | | Non-current Borrowings | 260,200 | 132,700 | | Gearing Ratio | 54% | 48% | [Financial Risk Management](index=9&type=section&id=Financial%20Risk%20Management) The Group primarily faces market risks (including foreign exchange and interest rate risks), credit risk, and liquidity risk, currently having no foreign currency hedging policy but with management continuously monitoring, and no contingent liabilities for the period - The Group faces **market risks (foreign exchange risk and interest rate risk), credit risk, and liquidity risk**[32](index=32&type=chunk) - There is currently **no foreign currency hedging policy**, but management will continue to monitor it[32](index=32&type=chunk) - There were **no contingent liabilities** for the current period or at the end of the previous year[35](index=35&type=chunk) [Capital Commitments and Significant Events](index=9&type=section&id=Capital%20Commitments%20and%20Significant%20Events) As of June 30, 2025, the Group's capital commitments totaled approximately RMB451.8 million, a significant increase from the end of the previous year, with no major acquisitions, disposals, or investments during the period, and the capital structure remaining unchanged Comparison of Capital Commitments | Metric | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Capital Commitments | 451,800 | 404,300 | - There were **no significant acquisitions or disposals** during the period[37](index=37&type=chunk) - There were **no significant investments** during the period[38](index=38&type=chunk) [Employees and Remuneration Policy](index=10&type=section&id=Employees%20and%20Remuneration%20Policy) As of June 30, 2025, the Group had 376 employees, a decrease from the prior period, with remuneration determined by factors such as qualifications, responsibilities, contributions, and experience, and some factory workers outsourced for efficiency Comparison of Employee Numbers | Metric | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Number of Employees | 376 | 462 | - The remuneration policy considers factors such as **qualifications, responsibilities, contributions, and experience**[39](index=39&type=chunk) - Some factory workers are outsourced to **enhance human resource efficiency and flexibility**[39](index=39&type=chunk) [Use of Proceeds](index=10&type=section&id=Use%20of%20Proceeds) The net proceeds from the share offer amounted to approximately HKD238.7 million, of which HKD5.4 million had been utilized as of June 30, 2025, primarily for expanding precast concrete component production capacity, with the majority remaining unutilized Use of Proceeds from Share Offer | Purpose | Updated Intended Use of Net Proceeds (million HKD) | Utilized as of December 31, 2024 (million HKD) | Utilized from January 1 to June 30, 2025 (million HKD) | Unutilized as of June 30, 2025 (million HKD) | | :--- | :--- | :--- | :--- | :--- | | Expand precast concrete component production capacity | 24.5 | 5.4 | — | 5.4 | | Enhance IT systems | 1.2 | — | — | — | | Improve environmental protection systems | 1.2 | — | — | — | | Purchase mixer trucks and concrete pump trucks | 2.0 | — | — | — | | General working capital | 105.3 | — | — | — | | Repay borrowings | 104.5 | — | — | — | | **Total** | **238.7** | **5.4** | **—** | **5.4** | - The majority of the net proceeds remain unutilized, with the remaining funds for expanding precast concrete component production capacity expected to be utilized before **December 2025**[40](index=40&type=chunk) [Prospects](index=10&type=section&id=Prospects) Increased competition in Xiamen's ready-mixed concrete and precast concrete component markets is pressuring the Group's profitability, while the iron ore tailings comprehensive utilization business in Hainan is expected to remain a strong revenue source due to ample tailings supply and demand from neighboring regions - Increased competition in the Xiamen ready-mixed concrete and precast concrete component markets is exerting **significant pressure on profitability**[41](index=41&type=chunk) - The iron ore tailings comprehensive utilization business in Hainan is expected to continue as a **strong source of revenue**[41](index=41&type=chunk) Condensed Consolidated Interim Statement of Comprehensive Income [Key Income Statement Data](index=11&type=section&id=Key%20Income%20Statement%20Data) For the six months ended June 30, 2025, the Group reported revenue of RMB259,673 thousand, gross profit of RMB7,905 thousand, a loss for the period of RMB49,061 thousand, and basic loss per share of RMB0.066 Condensed Consolidated Interim Statement of Comprehensive Income (For the Six Months Ended June 30) | Metric | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Revenue | 259,673 | 244,079 | | Cost of Sales | (251,768) | (198,562) | | Gross Profit | 7,905 | 45,517 | | Other Income | 5,203 | 2,837 | | Operating Profit/(Loss) | (39,187) | 9,891 | | Net Finance Costs | (8,669) | (10,032) | | Loss Before Income Tax | (47,856) | (141) | | Income Tax Expense/(Credit) | (1,205) | 1,313 | | Loss/(Profit) for the Period Attributable to Owners of the Company | (49,061) | 1,172 | | Basic and Diluted Loss/Earnings Per Share (RMB) | (0.066) | 0.002 | Condensed Consolidated Interim Statement of Financial Position [Key Balance Sheet Data](index=12&type=section&id=Key%20Balance%20Sheet%20Data) As of June 30, 2025, the Group's total assets were RMB1,129,847 thousand, total liabilities were RMB800,959 thousand, and total equity was RMB328,888 thousand, with non-current assets increasing while current assets and total equity decreased Condensed Consolidated Interim Statement of Financial Position (As of June 30) | Metric | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | **Assets** | | | | Non-current Assets | 646,184 | 601,421 | | Current Assets | 483,663 | 531,233 | | **Total Assets** | **1,129,847** | **1,132,654** | | **Equity** | | | | Total Equity | 328,888 | 377,949 | | **Liabilities** | | | | Non-current Liabilities | 279,768 | 150,989 | | Current Liabilities | 521,191 | 603,716 | | **Total Liabilities** | **800,959** | **754,705** | | **Total Equity and Liabilities** | **1,129,847** | **1,132,654** | - Non-current assets increased, primarily reflected in an **increase in property, plant and equipment**[44](index=44&type=chunk) - Current assets decreased, mainly due to a **reduction in trade receivables and cash and bank balances**[44](index=44&type=chunk) - Non-current liabilities significantly increased, primarily driven by **higher borrowings**[46](index=46&type=chunk) Condensed Consolidated Interim Statement of Changes in Equity [Changes in Shareholders' Equity](index=14&type=section&id=Changes%20in%20Shareholders%27%20Equity) As of June 30, 2025, total equity attributable to owners of the Company was RMB328,888 thousand, a decrease from RMB377,949 thousand at the beginning of the period, mainly due to a loss of RMB49,061 thousand recorded during the period Condensed Consolidated Interim Statement of Changes in Equity (For the Six Months Ended June 30) | Metric | Share Capital (RMB thousand) | Reserves (RMB thousand) | Retained Earnings/(Accumulated Losses) (RMB thousand) | Total (RMB thousand) | | :--- | :--- | :--- | :--- | :--- | | January 1, 2025 | 6,358 | 364,659 | 6,932 | 377,949 | | Loss for the Period | — | — | (49,061) | (49,061) | | June 30, 2025 | 6,358 | 364,659 | (42,129) | 328,888 | | January 1, 2024 | 6,358 | 364,659 | 82,131 | 453,148 | | Profit for the Period | — | — | 1,172 | 1,172 | | June 30, 2024 | 6,358 | 364,659 | 83,303 | 454,320 | - A **loss of RMB49,061 thousand** was recorded for the current period, leading to a shift from retained earnings to accumulated losses[47](index=47&type=chunk) Condensed Consolidated Interim Statement of Cash Flows [Key Cash Flow Data](index=15&type=section&id=Key%20Cash%20Flow%20Data) For the six months ended June 30, 2025, net cash generated from operating activities was RMB8,262 thousand, net cash used in investing activities was RMB70,506 thousand, and net cash generated from financing activities was RMB58,933 thousand, resulting in a decrease in cash and cash equivalents at the end of the period compared to the beginning Condensed Consolidated Interim Statement of Cash Flows (For the Six Months Ended June 30) | Metric | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Net Cash Generated from Operating Activities | 8,262 | 53,998 | | Net Cash Used in Investing Activities | (70,506) | (28,874) | | Net Cash Generated from/(Used in) Financing Activities | 58,933 | (24,780) | | Net Decrease/(Increase) in Cash and Cash Equivalents | (3,311) | 344 | | Cash and Cash Equivalents at End of Period | 15,705 | 26,212 | - Net cash generated from operating activities significantly decreased, while net cash used in investing activities **substantially increased**[49](index=49&type=chunk) - Financing activities shifted from a net cash outflow in the prior period to a **net cash inflow** in the current period, primarily due to an increase in proceeds from bank borrowings[49](index=49&type=chunk) Notes to the Condensed Consolidated Interim Financial Statements [1. General Information of the Group](index=16&type=section&id=1.%20General%20Information%20of%20the%20Group) The Company was incorporated in the Cayman Islands on November 14, 2018, primarily engaged in the manufacturing and sale of ready-mixed concrete and precast concrete components in China, and since 2022, in eco-friendly bricks and iron ore tailings recycling, with its shares listed on the Main Board of the Hong Kong Stock Exchange since March 26, 2021 - The Company was incorporated in the **Cayman Islands on November 14, 2018**[50](index=50&type=chunk) - Principal businesses include **manufacturing and sale of ready-mixed concrete and precast concrete components**, as well as **eco-friendly bricks and iron ore tailings recycling**[50](index=50&type=chunk) - The Company's shares have been listed on the **Main Board of the Hong Kong Stock Exchange since March 26, 2021**[51](index=51&type=chunk) [2. Basis of Preparation](index=16&type=section&id=2.%20Basis%20of%20Preparation) The condensed consolidated interim financial statements are prepared in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting" and should be read in conjunction with the annual consolidated financial statements for the year ended December 31, 2024 - The financial statements are prepared in accordance with **Hong Kong Accounting Standard 34 "Interim Financial Reporting"**[55](index=55&type=chunk) - They should be read in conjunction with the **annual consolidated financial statements for the year ended December 31, 2024**[55](index=55&type=chunk) [3. Significant Accounting Policies](index=17&type=section&id=3.%20Significant%20Accounting%20Policies) The accounting policies adopted for the current period are consistent with those of the previous year, except for the adoption of new and revised standards, such as HKAS 21 (Amendment) "Lack of Exchangeability," and management is currently assessing the full impact of new and revised standards not yet effective, such as HKFRS 18 - The current period adopted **HKAS 21 (Amendment) "Lack of Exchangeability," effective from January 1, 2025**[57](index=57&type=chunk)[58](index=58&type=chunk) - Management is assessing the impact of new and revised standards not yet effective, including **HKFRS 18 "Presentation and Disclosure in Financial Statements" (effective January 1, 2027)**[59](index=59&type=chunk) [4. Estimates](index=18&type=section&id=4.%20Estimates) The preparation of interim financial statements requires management to make judgments, estimates, and assumptions, and actual results may differ from these estimates, with significant judgments and sources of estimation uncertainty remaining consistent with the prior year - The preparation of interim financial statements involves **management judgments, estimates, and assumptions**, and actual results may differ[60](index=60&type=chunk) - Significant judgments and sources of estimation uncertainty for the current period are **consistent with the prior year**[60](index=60&type=chunk) [5. Financial Risk Management](index=19&type=section&id=5.%20Financial%20Risk%20Management) The Group faces market risks (foreign exchange and interest rate risks), credit risk, and liquidity risk, with risk management policies unchanged since the prior year-end, credit risk primarily related to cash, bank balances, and trade receivables, measured using a simplified approach for expected credit losses, and liquidity risk managed by analyzing contractual maturities of non-derivative financial liabilities, while the carrying amounts of liquid financial assets and liabilities approximate their fair values [5.1 Financial Risk Factors](index=19&type=section&id=5.1%20Financial%20Risk%20Factors) The Group faces market risk, credit risk, and liquidity risk, with credit risk primarily arising from cash and bank balances and trade receivables, for which expected credit losses are measured using the simplified approach under HKFRS 9, grouped by overdue days and customer credit risk characteristics, and total loss allowance for trade receivables was RMB32,885 thousand as of June 30, 2025 - The Group's risk management program aims to **minimize the adverse effects of financial market unpredictability** on financial performance[61](index=61&type=chunk) - Credit risk for trade receivables is measured using the **simplified approach under HKFRS 9** for expected credit losses[66](index=66&type=chunk) Loss Allowance for Trade Receivables (As of June 30) | Aging | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Gross Carrying Amount | 408,621 | 422,274 | | Total Loss Allowance | 32,885 | 31,291 | [5.2 Fair Value Estimation of Financial Assets and Liabilities Measured at Amortized Cost](index=22&type=section&id=5.2%20Fair%20Value%20Estimation%20of%20Financial%20Assets%20and%20Liabilities%20Measured%20at%20Amortized%20Cost) The carrying amounts of the Group's current financial assets and liabilities approximate their fair values due to their short-term nature - The carrying amounts of current financial assets and liabilities approximate their fair values due to their **short-term nature**[71](index=71&type=chunk) [6. Segment Information](index=23&type=section&id=6.%20Segment%20Information) The Group's operations are divided into three segments: ready-mixed concrete, precast concrete components, and recycled iron ore tailings and bricks, with ready-mixed concrete and precast concrete components segments recording losses, while the recycled iron ore tailings and bricks segment recorded a profit, and contract liabilities are primarily related to recycled iron ore tailings and bricks and ready-mixed concrete businesses [6(a) Segment Information of the Group](index=24&type=section&id=6%28a%29%20Segment%20Information%20of%20the%20Group) For the six months ended June 30, 2025, the ready-mixed concrete segment reported revenue of RMB148,220 thousand and a gross loss of RMB19,268 thousand, the precast concrete components segment reported revenue of RMB870 thousand and a gross profit of RMB330 thousand but a segment loss of RMB10,371 thousand, and the recycled iron ore tailings and bricks segment reported revenue of RMB110,583 thousand, a gross profit of RMB26,843 thousand, and a segment profit of RMB11,933 thousand Segment Results (For the Six Months Ended June 30) | Segment | 2025 Revenue (RMB thousand) | 2025 Gross Profit (RMB thousand) | 2025 Segment Result (RMB thousand) | | :--- | :--- | :--- | :--- | | Ready-mixed Concrete | 148,220 | (19,268) | (39,124) | | Precast Concrete Components | 870 | 330 | (10,371) | | Recycled Iron Ore Tailings and Bricks | 110,583 | 26,843 | 11,933 | | **Total** | **259,673** | **7,905** | **(37,562)** | - The ready-mixed concrete segment shifting from a gross profit in the prior period to a **gross loss** in the current period is the main reason for the overall gross profit decline[75](index=75&type=chunk) - The recycled iron ore tailings and bricks segment continues to contribute **positive gross profit and segment results**[75](index=75&type=chunk) [6(b) Contract Liabilities](index=26&type=section&id=6%28b%29%20Contract%20Liabilities) As of June 30, 2025, total contract liabilities amounted to RMB7,156 thousand, primarily arising from the recycled iron ore tailings and bricks and ready-mixed concrete businesses, with RMB4,255 thousand of revenue recognized during the period related to the opening balance of contract liabilities Contract Liabilities (As of June 30) | Business Segment | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Recycled Iron Ore Tailings and Bricks | 469 | 3,732 | | Precast Concrete Components | 100 | — | | Ready-mixed Concrete | 6,587 | 1,321 | | **Total** | **7,156** | **5,053** | Revenue Recognized Related to Contract Liabilities (For the Six Months Ended June 30) | Business Segment | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Ready-mixed Concrete | 975 | 233 | | Precast Concrete Components | — | 320 | | Recycled Iron Ore Tailings and Bricks | 3,280 | 2,427 | | **Total** | **4,255** | **2,980** | [7. Expenses by Nature](index=27&type=section&id=7.%20Expenses%20by%20Nature) For the six months ended June 30, 2025, the Group's total expenses were RMB300,868 thousand, an increase from the prior period, with raw materials and consumables used, employee benefit expenses, and transportation expenses being the main components Expenses by Nature (For the Six Months Ended June 30) | Expense Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Raw Materials and Consumables Used | 195,381 | 126,214 | | Employee Benefit Expenses | 28,220 | 27,645 | | Outsourcing Service Fees | 16,949 | 18,101 | | Depreciation of Property, Plant and Equipment | 15,375 | 15,637 | | Transportation Expenses | 16,758 | 17,232 | | Utilities | 7,938 | 10,897 | | **Total** | **300,868** | **238,131** | - The significant increase in **raw materials and consumables used** was the primary reason for the rise in total expenses[80](index=80&type=chunk) [8. Income Tax Expense/(Credit)](index=27&type=section&id=8.%20Income%20Tax%20Expense%2F%28Credit%29) For the six months ended June 30, 2025, the Group's income tax expense was RMB1,205 thousand, compared to an income tax credit of RMB1,313 thousand in the prior period, with China corporate income tax at 25% and some subsidiaries enjoying a preferential rate of 15%, and no provision for China withholding income tax made for the period Income Tax Expense/(Credit) (For the Six Months Ended June 30) | Metric | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Current Income Tax — China Income Tax | 1,274 | (1,868) | | Deferred Income Tax | (69) | 555 | | **Income Tax Expense/(Credit)** | **1,205** | **(1,313)** | - China corporate income tax rate is **25%**, with some subsidiaries enjoying a **preferential tax rate of 15%**[84](index=84&type=chunk) - No provision for China withholding income tax was made for the period, as the parent company can **control the timing of distributions from its subsidiaries**[84](index=84&type=chunk) [9. Basic and Diluted Loss/Earnings Per Share](index=28&type=section&id=9.%20Basic%20and%20Diluted%20Loss%2FEarnings%20Per%20Share) For the six months ended June 30, 2025, basic loss per share attributable to owners of the Company was RMB0.066, compared to basic earnings per share of RMB0.002 in the prior period, with diluted loss per share being the same as basic loss per share due to no potential dilutive ordinary shares Basic Loss/Earnings Per Share (For the Six Months Ended June 30) | Metric | 2025 (RMB) | 2024 (RMB) | | :--- | :--- | :--- | | Basic Loss/Earnings Per Share | (0.066) | 0.002 | - The weighted average number of ordinary shares in issue was **748,000,000 shares**[86](index=86&type=chunk) - Diluted earnings per share is the same as basic earnings per share due to **no potential dilutive ordinary shares** for the period[87](index=87&type=chunk) [10. Dividends](index=29&type=section&id=10.%20Dividends) No dividends were paid, declared, or proposed for the six months ended June 30, 2025 - **No dividends** were paid, declared, or proposed for the period[88](index=88&type=chunk) [11. Property, Plant and Equipment, Right-of-Use Assets, Investment Properties and Intangible Assets](index=29&type=section&id=11.%20Property%2C%20Plant%20and%20Equipment%2C%20Right-of-Use%20Assets%2C%20Investment%20Properties%20and%20Intangible%20Assets) As of June 30, 2025, the carrying amount of property, plant and equipment increased to RMB456,253 thousand, primarily due to additions, while right-of-use assets, investment properties, and intangible assets remained relatively stable, and some of the Group's assets are pledged as security for borrowings Non-current Asset Movements (As of June 30) | Metric | Property, Plant and Equipment (RMB thousand) | Right-of-Use Assets (RMB thousand) | Investment Properties (RMB thousand) | Intangible Assets (RMB thousand) | | :--- | :--- | :--- | :--- | :--- | | January 1, 2025 | 412,302 | 100,367 | 31,085 | 39,403 | | Additions | 60,758 | — | — | 19 | | Depreciation/Amortization | (15,375) | (1,695) | (557) | (17) | | June 30, 2025 | 456,253 | 98,672 | 30,528 | 39,405 | - Additions to property, plant and equipment amounted to **RMB60,758 thousand**[89](index=89&type=chunk) - The Group has **pledged certain assets as security for borrowings**[89](index=89&type=chunk) [12. Inventories](index=30&type=section&id=12.%20Inventories) As of June 30, 2025, total inventories amounted to RMB18,521 thousand, slightly lower than the prior year-end, with an impairment provision for inventories of RMB1,410 thousand Inventory Composition (As of June 30) | Metric | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Raw Materials | 13,047 | 12,702 | | Finished Goods | 6,884 | 7,892 | | Less: Impairment Provision for Inventories | (1,410) | (1,601) | | **Total** | **18,521** | **18,993** | - The impairment provision for inventories at the end of the period was **RMB1,410 thousand**[90](index=90&type=chunk) [13. Trade Receivables](index=30&type=section&id=13.%20Trade%20Receivables) As of June 30, 2025, total trade receivables amounted to RMB413,619 thousand, a decrease from the prior year-end, comprising current trade receivables of RMB403,782 thousand and non-current retention receivables of RMB9,837 thousand, with the majority of trade receivables aged within one year Trade Receivables (As of June 30) | Metric | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Current Trade Receivables | 403,782 | 451,217 | | Non-current Retention Receivables | 9,837 | 13,810 | | **Total** | **413,619** | **465,027** | - The carrying amount of trade receivables includes receivables subject to factoring arrangements of **RMB49,890 thousand**[92](index=92&type=chunk) Aging Analysis of Trade Receivables (As of June 30) | Aging | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Within 1 Year | 261,330 | 261,204 | | 1 to 2 Years | 51,130 | 74,880 | | 2 to 3 Years | 71,449 | 99,729 | | Over 3 Years | 62,595 | 60,505 | | **Total** | **446,504** | **496,318** | [14. Prepayments, Deposits and Other Receivables](index=31&type=section&id=14.%20Prepayments%2C%20Deposits%20and%20Other%20Receivables) As of June 30, 2025, total prepayments, deposits, and other receivables amounted to RMB45,655 thousand, an increase from the prior year-end, primarily due to an increase in prepayments for raw materials and operating expenses Prepayments, Deposits and Other Receivables (As of June 30) | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Prepayments for Raw Materials and Operating Expenses | 15,100 | 12,796 | | Recoverable Deductible VAT | 7,430 | 6,973 | | Rental Receivables | 4,089 | 4,840 | | Refundable Deposits | 10,110 | 9,285 | | Other Receivables | 8,926 | 8,093 | | **Total** | **45,655** | **41,987** | [15. Cash and Bank Balances](index=32&type=section&id=15.%20Cash%20and%20Bank%20Balances) As of June 30, 2025, cash and bank balances amounted to RMB15,705 thousand, a decrease from the prior year-end, with restricted bank balances pledged for the issuance of bills payable Cash and Bank Balances (As of June 30) | Metric | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Cash on Hand and at Bank | 15,705 | 19,036 | - Restricted bank balances have been **pledged for the issuance of bills payable**[95](index=95&type=chunk) [16. Share Capital](index=32&type=section&id=16.%20Share%20Capital) As of June 30, 2025, the Company's authorized share capital was 3,000,000,000 shares, and issued share capital was 748,000,000 shares, with a share capital amount of RMB6,358 thousand, remaining unchanged from the beginning of the period Share Capital Status (As of June 30) | Metric | Number of Ordinary Shares | Share Capital (RMB thousand) | | :--- | :--- | :--- | | Authorized Share Capital | 3,000,000,000 | 25,500 | | Issued Share Capital | 748,000,000 | 6,358 | - Issued share capital has **remained unchanged since January 1, 2025**[96](index=96&type=chunk) [17. Reserves](index=32&type=section&id=17.%20Reserves) As of June 30, 2025, the Group's total reserves amounted to RMB364,659 thousand, including share premium, capital reserve, and statutory reserve, remaining unchanged from the beginning of the period Reserve Composition (From January 1 to June 30, 2025) | Reserve Type | 2025 (RMB thousand) | | :--- | :--- | | Share Premium | 220,966 | | Capital Reserve | 127,135 | | Statutory Reserve | 16,558 | | **Total** | **364,659** | - Total reserves have **remained unchanged since January 1, 2025**[96](index=96&type=chunk) [18. Trade Payables](index=33&type=section&id=18.%20Trade%20Payables) As of June 30, 2025, total trade payables amounted to RMB322,425 thousand, an increase from the prior year-end, with the majority of payables aged within one year Trade Payables (As of June 30) | Metric | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Trade Payables — Third Parties | 322,425 | 299,173 | Aging Analysis of Trade Payables (As of June 30) | Aging | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Within One Year | 266,976 | 246,851 | | One to Two Years | 15,555 | 50,035 | | Over Two Years | 39,894 | 2,287 | | **Total** | **322,425** | **299,173** | [19. Other Payables and Accrued Expenses](index=33&type=section&id=19.%20Other%20Payables%20and%20Accrued%20Expenses) As of June 30, 2025, total other payables and accrued expenses amounted to RMB70,362 thousand, largely consistent with the prior year-end, primarily including payables for property, plant and equipment purchases and amounts due to related parties Other Payables and Accrued Expenses (As of June 30) | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Payables for Purchase of Property, Plant and Equipment | 31,972 | 31,079 | | Amounts Due to Related Parties | 16,605 | 7,919 | | Accrued Operating Expenses | 9,691 | 10,432 | | Employee Benefit Payables | 2,903 | 7,138 | | Other Tax Payables | 3,436 | 6,336 | | Others | 5,755 | 7,060 | | **Total** | **70,362** | **69,964** | [20. Borrowings](index=34&type=section&id=20.%20Borrowings) As of June 30, 2025, the Group's total borrowings amounted to RMB381,300 thousand, with a significant increase in non-current borrowings, and bank borrowings are secured by company assets, subsidiary equity, and related party guarantees, while the Group has RMB248,640 thousand in undrawn borrowing facilities [20(a) Bank Borrowings](index=34&type=section&id=20%28a%29%20Bank%20Borrowings) As of June 30, 2025, total bank borrowings amounted to RMB381,300 thousand, including secured borrowings of RMB331,410 thousand and factoring borrowings of RMB49,890 thousand, with borrowings secured by the Group's assets, subsidiary equity, and related parties Borrowing Composition (As of June 30) | Type | June 30, 2025 Current (RMB thousand) | June 30, 2025 Non-current (RMB thousand) | June 30, 2025 Total (RMB thousand) | | :--- | :--- | :--- | :--- | | Bank Borrowings — Secured | 71,200 | 260,210 | 331,410 | | Bank Borrowings — Factoring | 49,890 | — | 49,890 | | **Total Borrowings** | **121,090** | **260,210** | **381,300** | - Secured bank borrowings are pledged by **property, plant and equipment, construction in progress, right-of-use assets, investment properties, and transferred receivables**[100](index=100&type=chunk)[101](index=101&type=chunk) [20(b) Repayment Schedule](index=35&type=section&id=20%28b%29%20Repayment%20Schedule) As of June 30, 2025, the Group's total borrowings amounted to RMB381,300 thousand, of which RMB121,090 thousand are repayable within one year, and the majority of borrowings (RMB190,310 thousand) are repayable after three years Borrowing Repayment Schedule (As of June 30) | Repayment Period | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Within One Year | 121,090 | 227,698 | | One to Two Years | 25,000 | 16,058 | | Two to Three Years | 44,900 | 19,980 | | Over Three Years | 190,310 | 96,653 | | **Total** | **381,300** | **360,389** | [20(c) Undrawn Borrowing Facilities](index=35&type=section&id=20%28c%29%20Undrawn%20Borrowing%20Facilities) As of June 30, 2025, the Group had RMB248,640 thousand in undrawn borrowing facilities, all of which are floating-rate bank borrowings maturing within one year Undrawn Borrowing Facilities (As of June 30) | Maturity Period | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Maturing Within One Year | 248,640 | 800 | | Maturing One to Two Years | — | 25,550 | | Maturing Two to Three Years | — | — | | Maturing After Three Years | — | 187 | | **Total** | **248,640** | **26,537** | [21. Commitments](index=35&type=section&id=21.%20Commitments) As of June 30, 2025, the Group's total capital commitments amounted to RMB451,719 thousand, all of which were contracted but not provided for property, plant and equipment [21(a) Capital Commitments](index=35&type=section&id=21%28a%29%20Capital%20Commitments) As of June 30, 2025, the Group's capital commitments for property, plant and equipment, contracted but not provided for, amounted to RMB451,719 thousand, a significant increase from RMB115,447 thousand at the prior year-end Capital Expenditure Commitments (As of June 30) | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Contracted but not Provided For — Property, Plant and Equipment | 451,719 | 115,447 | | Authorized but not Provided For — Property, Plant and Equipment | — | 288,805 | | **Total** | **451,719** | **404,252** | [22. Related Party Transactions](index=36&type=section&id=22.%20Related%20Party%20Transactions) During the period, there were advance transactions with Mr. Ye Zhijie, and amounts payable to Mr. Ye Zhijie and Mr. Huang Kaining as related party balances, with key management compensation totaling RMB1,645 thousand [22(a) Transactions with Related Parties](index=36&type=section&id=22%28a%29%20Transactions%20with%20Related%20Parties) For the six months ended June 30, 2025, the Group received advances of RMB8,686 thousand from Mr. Ye Zhijie, compared to repayments of RMB1,553 thousand in the prior period Transactions with Related Parties (For the Six Months Ended June 30) | Related Party | 2025 Advances from/(Repayments to) (RMB thousand) | 2024 Advances from/(Repayments to) (RMB thousand) | | :--- | :--- | :--- | | Mr. Ye Zhijie | 8,686 | (1,553) | [22(b) Balances with Related Parties](index=36&type=section&id=22%28b%29%20Balances%20with%20Related%20Parties) As of June 30, 2025, amounts payable to Mr. Ye Zhijie were RMB9,233 thousand and to Mr. Huang Kaining were RMB7,372 thousand, both being unsecured, interest-free, and repayable on demand related party advances Balances with Related Parties (As of June 30) | Related Party | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Mr. Ye Zhijie | 9,233 | 547 | | Mr. Huang Kaining | 7,372 | 7,372 | | **Total** | **16,605** | **7,919** | - Amounts due to related parties are **unsecured, interest-free, and repayable on demand advances**, used to supplement working capital needs[105](index=105&type=chunk) [22(c) Key Management Compensation](index=36&type=section&id=22%28c%29%20Key%20Management%20Compensation) For the six months ended June 30, 2025, key management compensation amounted to RMB1,645 thousand, a decrease from the prior period Key Management Compensation (For the Six Months Ended June 30) | Metric | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Key Management Compensation | 1,645 | 2,144 | Corporate Governance and Other Information [Compliance with Corporate Governance Code](index=37&type=section&id=Compliance%20with%20Corporate%20Governance%20Code) The Board is committed to establishing sound corporate governance principles and confirms the Company's compliance with the principles and provisions of the Corporate Governance Code during the period - The Board is committed to establishing **sound corporate governance principles and practices**[107](index=107&type=chunk) - The Company has **complied with the principles and provisions of the Corporate Governance Code**[108](index=108&type=chunk) [Standard Securities Dealing Code for Directors and Chief Executive](index=37&type=section&id=Standard%20Securities%20Dealing%20Code%20for%20Directors%20and%20Chief%20Executive) The Company has adopted a code of conduct for directors' securities transactions no less exacting than the Model Code and confirms that directors have complied with it during the period, also adopting the Model Code as the standard for relevant employees' dealings in company securities - The Company has adopted a **code of conduct for directors' securities transactions no less exacting than the Model Code**[109](index=109&type=chunk) - Directors confirm **compliance with the Model Code and relevant codes of conduct**[109](index=109&type=chunk) [Directors' and Chief Executive's Interests in Shares of the Company and its Associated Corporations](index=38&type=section&id=Directors%27%20and%20Chief%20Executive%27s%20Interests%20in%20Shares%20of%20the%20Company%20and%20its%20Associated%20Corporations) As of June 30, 2025, Mr. Ye Zhijie held 36.73% of shares through controlled corporations, Mr. Huang Wengui held 16.25% through controlled corporations, and Mr. Lai Quanshui, Mr. Qiu Limiao, and Mr. Ye Dan held small beneficial interests, with no other disclosable interests or short positions during the period Directors' Interests in Shares of the Company (As of June 30) | Director | Nature of Interest | Number of Shares Interested | Approximate Percentage of the Company's Issued Share Capital | | :--- | :--- | :--- | :--- | | Mr. Ye Zhijie | Interest in controlled corporation | 274,706,100 (L) | 36.73% | | Mr. Huang Wengui | Interest in controlled corporation | 121,568,700 (L) | 16.25% | | Mr. Lai Quanshui | Beneficial interest | 10,000,000 (L) | 1.34% | | Mr. Qiu Limiao | Beneficial interest | 56,000 (L) | 0.01% | | Mr. Ye Dan | Beneficial interest | 50,000 (L) | 0.01% | - Mr. Ye Zhijie is the **sole shareholder of Zhixin Investment Holdings Limited**, and Mr. Huang Wengui is the **sole shareholder of Yaohao Holdings Limited**[113](index=113&type=chunk) [Major Shareholders' Interests in Shares and Underlying Shares of the Company](index=39&type=section&id=Major%20Shareholders%27%20Interests%20in%20Shares%20and%20Underlying%20Shares%20of%20the%20Company) As of June 30, 2025, Zhixin Investment Holdings Limited held 36.73% of shares, and Yaohao Holdings Limited held 16.25% of shares, with the spouses of Mr. Ye Zhijie and Mr. Huang Wengui deemed to have the same share interests due to spousal interests, and Huatai Securities Co., Ltd. and its subsidiaries collectively held 5.04% of shares Major Shareholders' Long Positions in Shares of the Company (As of June 30) | Name/Designation | Nature of Interest | Number of Shares Interested | Approximate Percentage of the Company's Issued Share Capital | | :--- | :--- | :--- | :--- | | Zhixin Investment Holdings Limited | Beneficial interest | 274,706,100 | 36.73% | | Ms. Hong Wei | Spouse's interest | 274,706,100 | 36.73% | | Yaohao Holdings Limited | Beneficial interest | 121,568,700 | 16.25% | | Ms. Lin Lingling | Spouse's interest | 121,568,700 | 16.25% | | Huatai Securities Co., Ltd. | Interest in controlled corporation | 37,718,000 | 5.04% | | Huatai International Financial Holdings Company Limited | Interest in controlled corporation | 37,718,000 | 5.04% | | Huatai Financial Holdings (Hong Kong) Limited | Beneficial interest | 37,718,000 | 5.04% | - Ms. Hong Wei is the spouse of Mr. Ye Zhijie, and Ms. Lin Lingling is the spouse of Mr. Huang Wengui, and are **deemed to have interests under the Securities and Futures Ordinance**[117](index=117&type=chunk) - Huatai Securities Co., Ltd. holds shares through its **wholly-owned subsidiaries Huatai International Financial Holdings Company Limited and Huatai Financial Holdings (Hong Kong) Limited**[117](index=117&type=chunk) [Changes in Directors and Competing Business Interests](index=40&type=section&id=Changes%20in%20Directors%20and%20Competing%20Business%20Interests) There were no changes in directors during the period, and no director had any interest in any business that competes or is likely to compete, directly or indirectly, with the Group's business - There were **no changes in directors** during the period[118](index=118&type=chunk) - No director had any interest in any business that **competes with the Group's business**[119](index=119&type=chunk) [Purchase, Sale or Redemption of Listed Securities](index=40&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20Listed%20Securities) During the period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities - Neither the Company nor its subsidiaries **purchased, sold, or redeemed any of the Company's listed securities** during the period[120](index=120&type=chunk) [Review of Interim Financial Statements and Dividends](index=40&type=section&id=Review%20of%20Interim%20Financial%20Statements%20and%20Dividends) The Company's interim financial statements have been reviewed by the Review Committee, and the Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025 - The interim financial statements have been **reviewed by the Review Committee**[121](index=121&type=chunk) - The Board does not recommend the **payment of an interim dividend** for the period[122](index=122&type=chunk) Glossary [Definitions of Terms in the Report](index=41&type=section&id=Definitions%20of%20Terms%20in%20the%20Report) This section provides definitions for key terms and abbreviations used in this interim report to ensure a clear understanding of its content - This section defines key terms used in the report, such as **"Review Committee," "Board," "Company," and "Group"**[123](index=123&type=chunk)

Revenue and Segment Performance - For the six months ended June 30, 2025, revenue was approximately RMB 687.7 million, representing an increase of approximately RMB 72.2 million or 11.7% compared to RMB 615.5 million for the same period in 2024[17]. - The Trading and Logistics segment generated revenue of approximately RMB 494.2 million, up from approximately RMB 422.1 million in the last period, primarily due to increased sales volume of base oil as market prices improved[18]. - The Printing segment recorded revenue of approximately RMB 169.9 million, an increase from approximately RMB 160.2 million, driven by a recovery in orders from beauty and cosmetics customers[19]. - The Property Development and Investments segment contributed revenue of approximately RMB 10.2 million, slightly down from RMB 10.7 million in the last period[22]. - The Others segment generated revenue of approximately RMB 13.4 million, down from RMB 22.5 million in the last period[22]. - The Group's revenue for the Reporting Period was approximately RMB 687.7 million, representing an increase of approximately RMB 72.2 million or 11.7% compared to RMB 615.5 million in the Last Period[32]. - The Trading and Logistics segment generated revenue of approximately RMB 494.2 million, an increase from approximately RMB 422.1 million in the Last Period, primarily due to improved market prices and increased sales volume of base oil[33]. - The Printing segment reported revenue of approximately RMB 169.9 million, up from approximately RMB 160.2 million in the Last Period, driven by a recovery in orders from beauty and cosmetics customers[34]. - For the six months ended June 30, 2025, the Group's total revenue from external customers was RMB 687,746,000, an increase from RMB 615,514,000 for the same period in 2024, representing a growth of approximately 11.7%[116][120]. - The printing segment generated revenue of RMB 169,926,000, while the trading and logistics segment contributed RMB 494,243,000, and property development and investments brought in RMB 10,166,000 for the first half of 2025[116]. Financial Performance and Losses - Gross profit for the Reporting Period was approximately RMB 42.7 million, with a gross profit margin of approximately 6.2%, down from 7.2% in the Last Period[37]. - The Group recorded a loss attributable to shareholders of approximately RMB 383.9 million, compared to a loss of approximately RMB 408.0 million in the Last Period[47]. - The company recorded a loss attributable to shareholders of approximately RMB 383.9 million for the period, compared to a loss of RMB 408.0 million in the previous period, reflecting a decrease of 6.5%[53]. - Total comprehensive expense for the period was RMB 379,939,000, a slight improvement from RMB 409,938,000 in the previous year, indicating a reduction of about 7.3%[74]. - Basic and diluted loss per share was RMB 6.24, compared to RMB 6.63 in the prior year, reflecting a decrease in loss per share of approximately 5.9%[74]. - The loss for the period attributable to shareholders of the Company was RMB 383,916,000 for the six months ended June 30, 2025, compared to RMB 408,022,000 for the same period in 2024, showing a decrease of 6%[135]. - The segment results showed a loss before tax of RMB 383,199,000 for the first half of 2025, compared to a loss of RMB 408,403,000 in the same period of 2024, indicating a slight improvement in performance[116][120]. Expenses and Cost Management - Selling and distribution expenses decreased by approximately RMB 1.3 million or 4.5% to approximately RMB 27.9 million, representing 4.1% of revenue for the Reporting Period[38]. - Administrative expenses decreased by approximately RMB 12.9 million or 16.2% to approximately RMB 66.7 million, attributed to reductions in staff costs and legal fees[39]. - The cost of inventories recognized as an expense was RMB 543,864,000 for the six months ended June 30, 2025, compared to RMB 475,375,000 in 2024, indicating an increase of 14.4%[132]. - The depreciation of property, plant, and equipment for the six months ended June 30, 2025, was RMB 26,857,000, compared to RMB 34,926,000 in 2024, a decrease of 23.2%[132]. - Corporate administrative expenses for the first half of 2025 were RMB 4,923,000, a decrease from RMB 7,499,000 in the same period of 2024[116][120]. Financial Position and Liabilities - As of June 30, 2025, total shareholders' funds recorded a deficiency of approximately RMB 7,966.2 million, compared to RMB 7,586.3 million as of December 31, 2024[48]. - The Group's current ratio was 0.17 as of June 30, 2025, unchanged from December 31, 2024[49]. - The gearing ratio was 106.1% as of June 30, 2025, compared to 103.7% as of December 31, 2024[50]. - Current assets were approximately RMB 2,065.4 million, slightly up from RMB 2,035.2 million as of December 31, 2024, while current liabilities increased to RMB 12,545.5 million from RMB 12,276.6 million[55]. - The company's net current liabilities stood at RMB (10,480,085,000), worsening from RMB (10,241,444,000) in the previous period, indicating a deterioration of about 2.3%[78]. - Total assets as of June 30, 2025, amounted to RMB 4,721,542,000, a decrease from RMB 4,834,511,000 as of December 31, 2024[123]. - The Group's total liabilities increased to RMB 12,687,748,000 as of June 30, 2025, compared to RMB 12,420,778,000 at the end of 2024[123]. - The Group's total deficiency attributable to shareholders was RMB (8,087,058,000), an increase from RMB (7,621,857,000) in the previous year, indicating a rise of about 6.1%[78]. - The Group's total equity attributable to shareholders decreased to RMB (7,966,206,000) as of June 30, 2025, from RMB (6,724,171,000) as of June 30, 2024[80]. Cash Flow and Liquidity - The Group's cash and cash equivalents as of June 30, 2025, were approximately RMB 49,085,000, a decrease from RMB 57,254,000 at the same date in 2024[83]. - The net cash from operating activities for the six months ended June 30, 2025, was RMB 6,252,000, significantly lower than RMB 109,793,000 for the same period in 2024[81]. - The Group's net cash used in financing activities for the six months ended June 30, 2025, was RMB 3,524,000, compared to RMB 117,203,000 for the same period in 2024[83]. - The Group's cash and cash equivalents were approximately RMB 49,085,000 as of June 30, 2025, highlighting liquidity concerns[90]. Debt and Restructuring - The Group is undergoing an offshore debt restructuring, with 33 scheme creditors representing 96.72% of the total value of voting scheme claims approving the restructuring plan[96]. - The restructuring became effective on June 26, 2025, after receiving approval from the High Court of Hong Kong[96]. - The Group plans to issue 12,000,000 new shares at HK$1 each to raise funds, which is part of its strategy to improve financial stability[94]. - The Group's financial obligations have led to significant legal proceedings, including arbitration and court orders, impacting its operational strategy[164]. - A significant default occurred on a borrowing of RMB 1,440,000,000, with RMB 240,000,000 in default since March 27, 2020[146]. - The Group has outstanding bank borrowings of RMB 300,000,000, which has been in default since July 30, 2021, with outstanding interest, penalties, and compound interest amounting to approximately RMB 188,323,000 as of June 30, 2025[177]. - The Group has not repaid the entire outstanding principal of RMB 2,658,800,000 as of June 30, 2025, with outstanding interest of RMB 1,077,462,000 at a rate of 10.725% per annum[161]. Share Capital and Options - The company has a total share capital of RMB 55,983,000 as of June 30, 2025, with 61,543,000 shares issued and fully paid[193]. - The company adopted a new share option scheme on October 25, 2017, to incentivize and reward its directors and employees[194]. - The company adopted a new share option scheme on October 25, 2017, to replace the previous scheme from September 28, 2007, aimed at providing flexibility in rewarding directors and employees[195]. - As of June 30, 2025, the number of share options granted to executive directors and employees showed movements including 38,735 options exercised during the period[198]. - For the year ended December 31, 2024, the outstanding share options for directors were 38,735 after 38,735 options were exercised during the year[199].

Financial Performance - The company reported a loss attributable to equity holders of RMB 85.6 million for the six months ended June 30, 2025, a decrease of 11.7% compared to the same period in 2024[3]. - Revenue for the period was RMB 3,646.3 million, down 19.2% year-over-year, with new car sales declining by 17.5% to 11,613 units and corresponding sales revenue dropping by 19.8% to RMB 2,969.5 million[4]. - The gross loss for the period was RMB 46.5 million, compared to a gross profit of RMB 11.3 million in the same period of 2024, resulting in a gross loss margin of 1.3%[4]. - The company recorded a pre-tax loss of RMB 89.6 million, which is a 7.0% improvement from the pre-tax loss of RMB 96.3 million in 2024[4]. - Basic and diluted loss per share attributable to equity holders was RMB 0.14, compared to RMB 0.16 in the same period of 2024[6]. - The company reported a loss of RMB 85,552 thousand for the period, compared to a loss of RMB 96,866 thousand in the previous year[10]. - The company’s total comprehensive income for the period was RMB (85,966) thousand, reflecting the loss and foreign exchange adjustments[10]. - The group reported a pre-tax loss of RMB 85,552,000 for the six months ended June 30, 2025, compared to a loss of RMB 96,866,000 for the same period in 2024, indicating an improvement of approximately 13.5%[29]. Revenue and Sales - For the six months ended June 30, 2025, total revenue was RMB 3,646,293 thousand, a decrease of 19.2% compared to RMB 4,515,142 thousand for the same period in 2024[19]. - Revenue from automobile sales was RMB 3,129,414 thousand, down 20.1% from RMB 3,918,879 thousand in the previous year[19]. - Other income totaled RMB 286,959 thousand, a slight decrease of 3.5% from RMB 297,150 thousand in the same period last year[20]. - New car sales revenue was RMB 2,969.5 million, down RMB 733.7 million or 19.8% year-on-year[61]. - After-sales service revenue was RMB 516.9 million, a decrease of RMB 79.4 million or 13.3% compared to 2024[61]. Assets and Liabilities - Total assets as of June 30, 2025, were RMB 5,098.3 million, a decrease from RMB 5,665.2 million as of December 31, 2024[8]. - Current liabilities decreased to RMB 2,438.3 million from RMB 2,878.9 million at the end of 2024, improving the company's liquidity position[8]. - Non-current liabilities decreased to RMB 460.2 million from RMB 532.3 million, indicating a reduction in long-term financial obligations[9]. - The company reported a total equity of RMB 2,199.8 million as of June 30, 2025, down from RMB 2,254.0 million at the end of 2024[9]. - As of June 30, 2025, the total amount of bank loans and other borrowings was RMB 1,699,736,000, a decrease of approximately 17.6% from RMB 2,062,915,000 as of December 31, 2024[34]. - The company's trade payables amounted to RMB 823,307,000 as of June 30, 2025, down from RMB 953,153,000 as of December 31, 2024, representing a decrease of about 13.6%[35]. Operational Efficiency and Cost Management - The company continues to focus on improving operational efficiency and reducing costs in response to declining sales and revenue[5]. - Employee benefits expenses totaled RMB 124,602,000 for the six months ended June 30, 2025, down 16.1% from RMB 148,569,000 in 2024[21]. - The cost of sales and services decreased to RMB 3,692,779,000 in 2025 from RMB 4,503,891,000 in 2024, representing a reduction of 18%[21]. - Operating expenses decreased to RMB 191.3 million, down 18.5% from RMB 234.6 million in 2024, maintaining a consistent percentage of 5.2% of revenue[68]. - Administrative expenses were RMB 93.4 million, a decrease of 22.7% from RMB 120.9 million in 2024, reducing the percentage of revenue from 2.7% to 2.6%[69]. Market and Industry Trends - The production and sales of new energy vehicles in China reached 696.8 million and 693.7 million units respectively in the first half of 2025, with year-on-year growth of 41.4% and 40.3%[41]. - The total number of motor vehicles in China reached 460 million by the end of June 2025, with 36.89 million being new energy vehicles, accounting for 10.27% of the total[41]. - The automotive industry faces challenges and opportunities, with increased competition and uncertainties in tariffs impacting market dynamics[90]. Strategic Initiatives - The group established a "three-level, four-stage" target control system to enhance sales rhythm management, ensuring efficient operation throughout the business cycle[47]. - The group is optimizing its brand network and focusing on enhancing service quality and profitability, with a strategic emphasis on investment efficiency[91]. - The group is advancing towards "full-domain intelligence," focusing on data governance and intelligent decision-making as core strategies for business growth[93]. - The intelligent decision-making hub will utilize extensive business data to provide real-time insights and support strategic decisions[96]. - The financial shared services center is being accelerated to automate financial processes and enhance operational efficiency[96]. Employee and Organizational Changes - The group employed 2,182 employees as of June 30, 2025, a reduction of 10.6% from 2,440 employees on December 31, 2024[88]. - Employee costs decreased by 17.9% to RMB 142.3 million from RMB 173.4 million in the same period of 2024, attributed to brand optimization and personnel adjustments[88]. Future Outlook - The group anticipates a GDP growth of approximately 5.5% in Xi'an for the second half of 2025, supported by consumption policies and industrial integration[89]. - The group plans to enhance manufacturing capabilities through a dual-driven approach of "industrial strong chain + innovation transformation" in the second half of 2025[89].

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不負責，對其準確性 或完整性亦不發表任何聲明，並明確表示概不會就本公告全部或任何部分內容而產生或因倚賴 該等內容而引致的任何損失承擔任何責任。 Sichuan Baicha Baidao Industrial Co., Ltd. 四川百茶百道實業股份有限公司 （於中華人民共和國註冊成立的股份有限公司） （股份代號：2555） 截至2025年6月30日止六個月之中期業績公告 四川百茶百道實業股份有限公司（「本公司」）董事（「董事」）會（「董事會」）欣然宣 佈本公司及其附屬公司（「本集團」或「我們」）截至2025年6月30日止六個月（「報告 期」）之未經審核簡明綜合中期業績，連同2024年同期的比較數字如下： 財務表現摘要 | | 截至6月30日止六個月 | | | --- | --- | --- | | | 2025年 | 2024年 | | | 人民幣千元 | 人民幣千元 | | 收入 | 2,499,550 | 2,395,829 | | 毛利 | 814,762 | 760,056 | | 稅前利潤 | 413,567 | 309,380 | ...

[Summary](index=1&type=section&id=Summary) The company reported a significant 233.4% revenue increase, but profit before tax and profit for the period declined sharply, while profit attributable to owners rose 26.1% with no interim dividend recommended Overview of Core Financial Indicators (For the six months ended June 30, 2025) | Indicator | H1 2025 (thousand RMB) | H1 2024 (thousand RMB) | Change | Change % | | :--- | :--- | :--- | :--- | :--- | | Revenue | 202,700 | 60,800 | +141,900 | +233.4% | | Profit Before Tax | 7,000 | 33,600 | -26,600 | -79.2% | | Profit for the Period | 2,500 | 25,400 | -22,900 | -90.2% | | Profit Attributable to Owners of the Company | 31,900 | 25,300 | +6,600 | +26.1% | | Basic Earnings Per Share | RMB 0.61 cents | RMB 0.89 cents | -0.28 cents | -31.5% | - The Board does not recommend the payment of any interim dividend for the current interim period, consistent with the corresponding period[5](index=5&type=chunk) [Unaudited Condensed Consolidated Financial Statements](index=2&type=section&id=Unaudited%20Condensed%20Consolidated%20Financial%20Statements) [Condensed Consolidated Statement of Profit or Loss](index=2&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss) Revenue for the period surged by **233.4% to 202,677 thousand RMB**, but profit before tax and profit for the period significantly decreased, primarily due to a sharp rise in administrative and marketing expenses; however, profit attributable to owners of the company increased by **26.1%** Key Data from Condensed Consolidated Statement of Profit or Loss (thousand RMB) | Indicator | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Revenue | 202,677 | 60,804 | | Other Income and Other Gains and Losses | 17,553 | (3,631) | | Administrative Expenses | (89,595) | (15,847) | | Marketing Expenses | (119,338) | (5,849) | | Profit Before Tax | 7,018 | 33,596 | | Profit for the Period | 2,546 | 25,388 | | Profit Attributable to Owners of the Company | 31,876 | 25,275 | | Basic Earnings Per Share | RMB 0.61 cents | RMB 0.89 cents | [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=3&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) Profit for the period significantly decreased, and due to exchange differences from functional currency translation and overseas operations, total comprehensive expense for the period was **16,886 thousand RMB**, compared to comprehensive income of **33,613 thousand RMB** in the prior period Key Data from Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (thousand RMB) | Indicator | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Profit for the Period | 2,546 | 25,388 | | Exchange Differences Arising from Translation of Functional Currency to Presentation Currency | (17,192) | 7,499 | | Exchange Differences Arising from Translation of Overseas Operations | (2,240) | 726 | | Total Comprehensive (Expense) / Income for the Period | (16,886) | 33,613 | | Total Comprehensive (Expense) / Income Attributable to Owners of the Company | 14,558 | 32,975 | [Condensed Consolidated Statement of Financial Position](index=4&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the Group's total assets slightly increased, with a significant rise in intangible assets within non-current assets, while current liabilities surged, leading to a slight decrease in net current assets and total equity Key Data from Condensed Consolidated Statement of Financial Position (thousand RMB) | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Non-Current Assets | 1,168,042 | 1,125,393 | | Total Current Assets | 1,509,133 | 1,482,098 | | Total Current Liabilities | 143,759 | 81,587 | | Net Current Assets | 1,365,374 | 1,400,511 | | Total Assets Less Current Liabilities | 2,533,416 | 2,525,904 | | Total Non-Current Liabilities | 87,790 | 60,837 | | Total Equity | 2,445,626 | 2,465,067 | - Intangible assets increased from **286,695 thousand RMB** as of December 31, 2024, to **323,958 thousand RMB** as of June 30, 2025, primarily due to business combinations and other intangible asset expenditures[8](index=8&type=chunk)[32](index=32&type=chunk) - Contract liabilities significantly increased from **10,154 thousand RMB** as of December 31, 2024, to **43,361 thousand RMB** as of June 30, 2025, mainly from subscription revenue, financial information service revenue, and digital content service revenue[8](index=8&type=chunk)[41](index=41&type=chunk) [Notes to the Unaudited Condensed Consolidated Financial Statements](index=6&type=section&id=Notes%20to%20the%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) [1 Company Information and Basis of Preparation](index=6&type=section&id=1%20Company%20Information%20and%20Basis%20of%20Preparation) The company is incorporated in Bermuda and listed on the HKEX, primarily engaged in investment holding, with subsidiaries covering digital internet platforms, digital content ecosystems, and FinTech services; financial statements are presented in RMB, prepared in accordance with HKAS 34 and Listing Rules - The Company's principal business is investment holding, with subsidiaries engaged in digital internet platform business, digital content ecosystem business, and FinTech services[10](index=10&type=chunk) - The condensed consolidated financial statements are presented in **RMB** and prepared in accordance with **Hong Kong Accounting Standard 34** and the applicable disclosure requirements of the **Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited**[10](index=10&type=chunk)[11](index=11&type=chunk) [2 Accounting Policies](index=7&type=section&id=2%20Accounting%20Policies) The condensed consolidated financial statements are prepared on a historical cost basis, with the first-time application of revised HKFRS accounting standards in the current period having no significant impact on financial position or performance; digital content service revenue is recognized using a time-based output method, proportional to the contract period - New and revised Hong Kong Financial Reporting Standards accounting standards applied in the current interim period have **no significant impact** on the Group's financial position and performance[13](index=13&type=chunk) - Digital content service revenue, such as platform-based digital marketing services, is recognized using a time-based output method, proportional to the contract period (typically one to three months)[14](index=14&type=chunk) [3 Segment Operating Information](index=8&type=section&id=3%20Segment%20Operating%20Information) The Group updated its segment reporting from March 18, 2025, to better reflect its latest business strategy, now comprising three reportable segments: Digital Internet Platform Business, Digital Content Ecosystem Business, and FinTech Services Business; the Digital Content Ecosystem Business contributes the most revenue, but the Digital Internet Platform Business incurred significant losses - As of March 18, 2025, the Group's segment reporting has been updated to include Digital Internet Platform Business, Digital Content Ecosystem Business, and FinTech Services Business[16](index=16&type=chunk) H1 2025 Segment Revenue and Results (thousand RMB) | Segment | Revenue from External Customers | Segment Results | | :--- | :--- | :--- | | Digital Internet Platform Business | 11,923 | (42,488) | | Digital Content Ecosystem Business | 131,074 | 2,835 | | FinTech Services Business | 59,680 | 39,589 | | **Total** | **202,677** | **(64)** | - In H1 2025, the Digital Content Ecosystem Business was the primary source of revenue, the FinTech Services Business contributed most of the segment results, while the Digital Internet Platform Business recorded a significant loss[19](index=19&type=chunk) Segment Assets and Liabilities (thousand RMB) | Segment | Segment Assets as of June 30, 2025 | Segment Liabilities as of June 30, 2025 | | :--- | :--- | :--- | | Digital Internet Platform Business | 122,317 | 164,523 | | Digital Content Ecosystem Business | 779,434 | 42,963 | | FinTech Services Business | 1,355,994 | 8,752 | | **Total** | **2,257,745** | **216,238** | [4 Revenue, Other Income and Other Gains and Losses](index=13&type=section&id=4%20Revenue,%20Other%20Income%20and%20Other%20Gains%20and%20Losses) Revenue for the period significantly increased to **202,677 thousand RMB**, primarily driven by advertising services, top-up services, and subscription revenue; other income decreased, but a significant increase in exchange gains offset some losses Revenue Source Analysis (thousand RMB) | Revenue Category | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Interest Income from Accounts Receivable Factoring Loans | 40,123 | 39,172 | | Advertising Service Income | 41,719 | 255 | | Top-up Service Income | 88,200 | 5,718 | | Subscription Income | 11,923 | – | | Digital Content Service Income | 1,155 | – | | Financial Information Service Income | 19,557 | 15,659 | | **Total Revenue** | **202,677** | **60,804** | Other Income and Gains/Losses (thousand RMB) | Category | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Bank Interest Income | 766 | 2,973 | | Bargain Purchase Gain | 37 | – | | Exchange Gains / (Losses) | 16,709 | (6,978) | | **Total** | **17,553** | **(3,631)** | [5 Profit Before Tax](index=14&type=section&id=5%20Profit%20Before%20Tax) Profit before tax significantly decreased, mainly due to a substantial increase in employee benefit expenses, depreciation of right-of-use assets, and amortization of intangible assets Profit Before Tax Deductions (thousand RMB) | Item | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Employee Benefit Expenses | 50,950 | 7,498 | | Depreciation of Property, Plant and Equipment | 194 | – | | Depreciation of Right-of-Use Assets | 4,065 | 580 | | Amortization of Intangible Assets | 14,549 | – | [6 Finance Costs](index=14&type=section&id=6%20Finance%20Costs) Finance costs significantly increased from **7 thousand RMB** to **2,169 thousand RMB**, primarily due to higher interest expenses on borrowings Finance Costs Analysis (thousand RMB) | Item | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Interest Expense on Borrowings | 1,950 | – | | Interest Expense on Lease Liabilities | 219 | 7 | | **Total** | **2,169** | **7** | [7 Income Tax Expense](index=15&type=section&id=7%20Income%20Tax%20Expense) Income tax expense decreased from **8,208 thousand RMB** to **4,472 thousand RMB**, mainly due to a reduction in China corporate income tax - The Group did not generate taxable profits in Hong Kong, and estimated taxable profits generated in mainland China are provided at a tax rate of **25%**[26](index=26&type=chunk) Income Tax Expense Analysis (thousand RMB) | Item | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Current Tax – China Corporate Income Tax | 3,992 | 7,749 | | Deferred Tax | 480 | 459 | | **Total Tax Expense for the Period** | **4,472** | **8,208** | [8 Dividends](index=15&type=section&id=8%20Dividends) The Board does not recommend the payment of any interim dividend for the current interim period, consistent with the prior year - The Board does not recommend the payment of any interim dividend for the six months ended June 30, 2025[28](index=28&type=chunk) [9 Earnings Per Share](index=15&type=section&id=9%20Earnings%20Per%20Share) Basic earnings per share decreased from **RMB 0.89 cents** to **RMB 0.61 cents**, despite an increase in profit attributable to owners of the company, due to a significant increase in the weighted average number of ordinary shares outstanding Basis for Basic Earnings Per Share Calculation | Indicator | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Profit Attributable to Ordinary Equity Holders of the Company for Basic EPS Calculation (thousand RMB) | 31,876 | 25,275 | | Weighted Average Number of Ordinary Shares Outstanding (thousand shares) | 5,201,123 | 2,838,486 | | **Basic Earnings Per Share** | **RMB 0.61 cents** | **RMB 0.89 cents** | - Diluted earnings per share are not presented as the Company had no dilutive potential ordinary shares during the interim period[30](index=30&type=chunk) [10 Right-of-Use Assets and Intangible Assets](index=16&type=section&id=10%20Right-of-Use%20Assets%20and%20Intangible%20Assets) Both right-of-use assets and intangible assets significantly increased during the period due to business combinations and new lease agreements; intangible assets primarily include mobile software and technology, amortized on a straight-line basis over five years - For the six months ended June 30, 2025, the Group acquired **1,224 thousand RMB** in right-of-use assets through business combinations and recognized **8,618 thousand RMB** in right-of-use assets due to renewals and new lease agreements[31](index=31&type=chunk) - For the six months ended June 30, 2025, the Group acquired **4,079 thousand RMB** in intangible assets through business combinations and incurred **48,447 thousand RMB** in other intangible asset expenditures; intangible assets include mobile software and technology, amortized on a straight-line basis over five years[32](index=32&type=chunk) [11 Trade and Loan Receivables](index=17&type=section&id=11%20Trade%20and%20Loan%20Receivables) Total trade and loan receivables increased to **1,401,150 thousand RMB**, primarily driven by commercial factoring loans receivable; the aging structure of trade receivables shows a high proportion of short-term receivables, and all receivables and loans are neither past due nor credit-impaired Overview of Trade and Loan Receivables (thousand RMB) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Commercial Factoring Loans Receivable | 1,346,054 | 1,281,656 | | Trade Receivables | 72,148 | 59,309 | | Provision for Expected Credit Losses | (17,052) | (14,944) | | **Total** | **1,401,150** | **1,326,021** | - Commercial factoring loans receivable have terms ranging from **90 to 360 days**, with effective interest rates between **6% and 7.5% per annum**; as of the reporting period end, all commercial factoring loans receivable were not yet due[33](index=33&type=chunk) Aging Analysis of Trade Receivables (thousand RMB) | Aging | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | 0 to 30 days | 29,693 | 57,449 | | 31 to 60 days | 18,102 | 1,278 | | 61 to 90 days | 18,146 | 386 | | Over 90 days | 6,207 | 196 | - As of June 30, 2025, and December 31, 2024, none of the Group's trade and loan receivables were credit-impaired[34](index=34&type=chunk) [12 Prepayments, Deposits and Other Receivables](index=19&type=section&id=12%20Prepayments,%20Deposits%20and%20Other%20Receivables) Total prepayments amounted to **403,006 thousand RMB**, with the majority arising from the acquisition of Tianjin Guanchuang Meitong E-commerce Co., Ltd., which is still pending approval; Mr. Huang Guangyu has provided a personal guarantee for the recoverability of the prepayments, and management believes no further impairment is needed Overview of Prepayments, Deposits and Other Receivables (thousand RMB) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Prepayments Arising from Acquisition of Tianjin Guanchuang | 576,000 | 576,000 | | Impairment Loss | (208,000) | (208,000) | | **Total Carrying Amount** | **403,006** | **393,592** | - Prepayments of **576,000 thousand RMB** for the acquisition of Tianjin Guanchuang are pending approval from the People's Bank of China, and the change of actual controller has not yet been completed[37](index=37&type=chunk) - Mr. Huang Guangyu has provided a personal guarantee, committing to make up any shortfall by **December 31, 2026**, if the transaction cannot be completed and the funds cannot be recovered[38](index=38&type=chunk) - Management believes the recoverable amount of prepayments is higher than their carrying amount, and no impairment of prepayments needs to be recognized in profit or loss[39](index=39&type=chunk) [13 Trade Payables](index=21&type=section&id=13%20Trade%20Payables) Trade payables increased to **37,867 thousand RMB**, primarily due within 30 days, with an average credit period of 60 days; the Group ensures all payables are settled within their credit terms Aging Analysis of Trade Payables (thousand RMB) | Aging | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | 0 to 30 days | 23,942 | 23,484 | | 31 to 60 days | 11,943 | – | | 61 to 90 days | 959 | – | | Over 90 days | 1,023 | 68 | | **Total** | **37,867** | **23,552** | - Trade payables are non-interest bearing, with an average credit period of **60 days**, and the Group ensures all payables are settled within their credit terms[40](index=40&type=chunk) [14 Contract Liabilities](index=22&type=section&id=14%20Contract%20Liabilities) Contract liabilities significantly increased to **43,361 thousand RMB**, primarily from advance payments related to subscription revenue, financial information service revenue, and digital content service revenue Sources of Contract Liabilities (thousand RMB) | Source | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Subscription Income | 34,338 | 9,712 | | Financial Information Service Income | 633 | 442 | | Digital Content Service Income | 8,390 | – | | **Total** | **43,361** | **10,154** | - Contract liabilities represent proceeds received in advance from customers related to subscription revenue, financial information service revenue, and digital content service revenue, expected to be settled within the normal operating cycle[41](index=41&type=chunk) [15 Borrowings](index=22&type=section&id=15%20Borrowings) Total borrowings increased to **84,315 thousand RMB**, mainly from loans from independent third parties and additional borrowings acquired through business combinations, all unsecured and incurring finance costs at an annual interest rate of 6% - Borrowing balances include principal amounts of **70,737 thousand RMB** from independent third parties (2024: **55,128 thousand RMB**), incurring finance costs at an annual interest rate of **6%**, repayable in **2027**[43](index=43&type=chunk) - Additional loan principal of **7,586 thousand RMB** was acquired through business combinations, incurring finance costs at an annual interest rate of **6%**, repayable in **2028**[43](index=43&type=chunk) - All borrowings are unsecured by any of the Group's assets or guarantees[43](index=43&type=chunk) [16 Share Capital](index=23&type=section&id=16%20Share%20Capital) The company's issued share capital remained unchanged during the interim period at **5,201,123 thousand shares**, amounting to **45,824 thousand RMB**; a capital reorganization was completed in June 2024, involving capital reduction and share subdivision, and new shares were issued due to subsidiary acquisitions Issued and Fully Paid Share Capital (thousand shares/thousand HKD) | Item | Number of Shares (thousand shares) | Amount (thousand HKD) | | :--- | :--- | :--- | | As of January 1, 2024 | 2,701,123 | 230,159 | | Capital Reduction | – | (207,143) | | Shares Issued upon Acquisition of Subsidiaries | 2,500,000 | 22,808 | | **As of June 30, 2025** | **5,201,123** | **45,824** | - A capital reorganization was completed on **June 21, 2024**, including the reduction of par value per share from **HK$0.1 to HK$0.01** and the subdivision of unissued shares[44](index=44&type=chunk)[46](index=46&type=chunk) - Following the capital reorganization, the issuance of **2,500,000,000 ordinary shares** due to subsidiary acquisitions resulted in credits of **22,808 thousand RMB** to the share capital account and **499,495 thousand RMB** to the share premium account, respectively[46](index=46&type=chunk) [17 Contingent Liabilities](index=24&type=section&id=17%20Contingent%20Liabilities) As of June 30, 2025, and December 31, 2024, the Group had no significant contingent liabilities - The Group had **no significant contingent liabilities** at the end of the reporting period[45](index=45&type=chunk) [Management Discussion and Analysis](index=25&type=section&id=Management%20Discussion%20and%20Analysis) [Overview](index=25&type=section&id=Overview) The Group accelerated its digital transformation and business diversification by deepening its "Technology + Finance" integrated internet strategy, achieving a **233.4% revenue increase to 202,700 thousand RMB**, primarily driven by the acquisitions of CashBox and Beijing Liheng Group; despite a decline in profit before tax, profit attributable to owners of the company increased due to non-controlling interests absorbing losses, and the Group will continue to develop its digital internet ecosystem business for multi-domain synergy - The Group is primarily engaged in Digital Internet Platform Business, Digital Content Ecosystem Business, and FinTech Services Business[47](index=47&type=chunk) - Revenue for the interim period significantly increased by **233.4% to 202,700 thousand RMB**, mainly attributable to the acquisitions of CashBox Group Technology (Hong Kong) Limited (**129,900 thousand RMB**) and Beijing Liheng Group (**11,900 thousand RMB**), as well as the steady growth of commercial factoring and other financial services businesses[48](index=48&type=chunk)[49](index=49&type=chunk) - Profit before tax significantly decreased by **79.2% to 7,000 thousand RMB**, primarily due to a substantial increase in staff costs (**43,500 thousand RMB**) and amortization of intangible assets (**14,500 thousand RMB**) resulting from Beijing Liheng Group's business expansion, partially offset by increased exchange gains[48](index=48&type=chunk)[49](index=49&type=chunk) - Profit attributable to owners of the company increased to **31,900 thousand RMB**, mainly because a significant portion of Beijing Liheng Group's losses was borne by non-controlling interests[50](index=50&type=chunk) - The Group successfully expanded into internet social and digital content domains through the Beijing Liheng contractual arrangement, Beijing Yiheng contractual arrangement, and Beijing Jiayu contractual arrangement[51](index=51&type=chunk)[52](index=52&type=chunk)[53](index=53&type=chunk) [Industry Environment](index=29&type=section&id=Industry%20Environment) In H1 2025, the Hong Kong capital market recovered, China's economy grew steadily, and policies continued to promote inclusive and technology-driven finance; the financial services sector transformed through regulation and technology integration, with deepening blockchain applications; the internet industry accelerated "quality leap" with AI large models empowering various sectors, and Web3.0-AI convergence fostering decentralized ecosystems; in the digital content ecosystem, games and short dramas saw explosive growth, with China's overseas micro-short drama market growing nearly fourfold year-on-year - In H1 2025, China's economy showed a "generally stable, structurally differentiated" trend, with policies continuously promoting the development of inclusive finance and FinTech[57](index=57&type=chunk) - The financial services industry accelerated its digital transformation, with blockchain technology enabling full-process traceability in supply chain finance, and Hong Kong laying the foundation for cross-border payments through the **"Stablecoin Bill"**[58](index=58&type=chunk) - The internet industry accelerated its transformation towards a "quality leap," with policies promoting the **"AI+" initiative**, AI large models empowering various industries, and the convergence of Web3.0 and AI fostering decentralized ecosystems[58](index=58&type=chunk) - In the digital content ecosystem, games and short dramas became core growth engines; China's micro-short drama market size is estimated to reach **63.43 billion RMB** in 2025, with the number of overseas market applications growing nearly **fourfold year-on-year**[59](index=59&type=chunk)[60](index=60&type=chunk) [Business Review](index=31&type=section&id=Business%20Review) The Group expanded its digital content ecosystem business through the acquisitions of CashBox and Beijing Yiheng Group, showing strong performance in game development and publishing and gaining market attention for short drama production; the digital internet platform business developed social commerce platforms and commercial ecosystem collaboration platforms through the acquisitions of Beijing Liheng Group and Beijing Jiayu Group, with over 1.8 million registered users; the FinTech services business maintained stable growth in commercial factoring and other financial services revenue [Digital Content Ecosystem Business](index=31&type=section&id=Digital%20Content%20Ecosystem%20Business) The Group successfully expanded its digital content ecosystem business through the acquisitions of CashBox and Beijing Yiheng Group; CashBox demonstrated strong performance in game development and publishing, having developed and released over **500 games** and recorded **129,900 thousand RMB** in revenue; Beijing Yiheng Group focuses on producing high-quality short dramas, collaborating deeply with multiple platforms, and recorded **1,200 thousand RMB** in revenue - The Group acquired CashBox and Beijing Yiheng Group between **June 2024 and March 2025** to achieve business diversification[61](index=61&type=chunk) - CashBox has developed and released over **500 games**, with users in **100+ countries**, recording revenue of **129,900 thousand RMB**[62](index=62&type=chunk) - Beijing Yiheng Group focuses on the high-quality short drama segment, collaborating deeply with platforms such as Hongguo Short Drama, iQiyi Micro-Short Drama, and Douyin, recording revenue of **1,200 thousand RMB**[63](index=63&type=chunk) [Digital Internet Platform Business](index=33&type=section&id=Digital%20Internet%20Platform%20Business) The Group expanded its digital internet platform business through the acquisitions of Beijing Liheng Group and Beijing Jiayu Group, including social commerce platforms and commercial ecosystem collaboration platforms; Beijing Liheng Group's "Tongtong APP" and "Lehuo Universe App" have accumulated over **1.8 million registered users**, with approximately **65,000 paying users**, generating **11,900 thousand RMB** in revenue; Beijing Jiayu Group focuses on cross-merchant asset interoperability and has achieved ecosystem integration with "Tongtong APP" - The Group acquired Beijing Liheng Group through the Beijing Liheng contractual arrangement, focusing on social networking, artificial intelligence, e-commerce, information technology services, and technology research and development[64](index=64&type=chunk) - Beijing Liheng Group's platforms have accumulated over **1,800,000 registered users**, of whom approximately **65,000 users** have paid for subscriptions, generating revenue of **11,900 thousand RMB**[67](index=67&type=chunk) - The Group completed the acquisition of Beijing Jiayu Group through the Beijing Jiayu contractual arrangement, focusing on cross-merchant asset interoperability and achieving ecosystem integration with the Tongtong APP[69](index=69&type=chunk) [FinTech Services Business](index=35&type=section&id=FinTech%20Services%20Business) The Group's FinTech services business includes commercial factoring and other financial services; commercial factoring loan amounts increased to **1,028,100 thousand RMB**, with revenue rising to **40,100 thousand RMB** and stable segment results; other financial services revenue increased to **19,600 thousand RMB**, primarily due to business promotion efforts - Commercial factoring loan amounts increased to **1,028,100 thousand RMB**, with revenue increasing to **40,100 thousand RMB**, and segment results of **34,400 thousand RMB**[71](index=71&type=chunk) - The interest rate charged to commercial factoring borrowers slightly decreased, ranging from **6.0% to 7.5%**, consistent with market rates[71](index=71&type=chunk) - Other financial services revenue increased to **19,600 thousand RMB**, primarily due to enhanced business promotion efforts[72](index=72&type=chunk) [Financial Review](index=37&type=section&id=Financial%20Review) The Group's revenue significantly increased by **233.4% to 202,700 thousand RMB**, primarily driven by the acquisitions of CashBox and Beijing Liheng Group; however, a surge in administrative and marketing expenses led to a substantial decline in profit before tax; business segment performance was mixed, with the Digital Content Ecosystem Business contributing the most revenue, the FinTech Services Business showing stable growth, and the Digital Internet Platform Business incurring losses due to expansion; the credit risk management system is robust, with a **0% non-performing loan ratio** [Performance Summary](index=37&type=section&id=Performance%20Summary) Revenue for the interim period significantly increased by **233.4% to 202,700 thousand RMB**, mainly from the CashBox acquisition (**129,900 thousand RMB**), Beijing Liheng Group acquisition (**11,900 thousand RMB**), and FinTech services business expansion; profit before tax decreased to **7,000 thousand RMB**, primarily affected by increased staff costs, intangible asset amortization, and marketing expenses; despite this, profit attributable to owners of the company grew due to non-controlling interests absorbing losses - Revenue significantly increased by **233.4% to 202,700 thousand RMB**, primarily from the CashBox acquisition (**129,900 thousand RMB**), Beijing Liheng Group acquisition (**11,900 thousand RMB**), and FinTech services business expansion[73](index=73&type=chunk)[74](index=74&type=chunk) - Other income (bank interest income) decreased to **800 thousand RMB**, but exchange gains of **16,700 thousand RMB** arose from the appreciation of RMB against HKD[75](index=75&type=chunk) - Administrative expenses increased by **73,800 thousand RMB to 89,600 thousand RMB**, mainly due to staff costs (increase of **43,500 thousand RMB**), intangible asset amortization (increase of **14,500 thousand RMB**), and increased service fees[76](index=76&type=chunk) - Marketing expenses increased to **119,300 thousand RMB**, primarily comprising advertising and promotion expenses, technical service fees, etc., from CashBox, Beijing Liheng Group, and Beijing Yiheng Group[77](index=77&type=chunk) - Finance costs increased to **2,200 thousand RMB**, mainly related to non-bank borrowings of Beijing Liheng Group[78](index=78&type=chunk) - Profit attributable to owners of the company increased to **31,900 thousand RMB**, mainly because a significant portion of Beijing Liheng Group's substantial losses was borne by non-controlling interests[79](index=79&type=chunk) [Digital Content Ecosystem Business Segment Analysis](index=40&type=section&id=Digital%20Content%20Ecosystem%20Business%20Segment%20Analysis) Total revenue for the Digital Content Ecosystem Business significantly increased to **131,074 thousand RMB**, primarily contributed by CashBox's online advertising and top-up services, as well as Beijing Yiheng Group's digital content service revenue; net operating expenses increased significantly, but the segment still recorded a profit Digital Content Ecosystem Business Operating Results (thousand RMB) | Indicator | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Total Revenue | 131,074 | 5,973 | | Net Operating Expenses | (128,137) | (5,801) | | Segment Results | 2,835 | 172 | - CashBox's online advertising services and top-up services accounted for **31.8% and 67.3%**, respectively, of the Digital Content Ecosystem Business's total revenue[81](index=81&type=chunk) - Beijing Yiheng Group's digital content service revenue was **1,200 thousand RMB**[81](index=81&type=chunk) [Digital Internet Platform Business Segment Analysis](index=41&type=section&id=Digital%20Internet%20Platform%20Business%20Segment%20Analysis) The Digital Internet Platform Business generated **11,923 thousand RMB** in revenue, but due to increased R&D, personnel, and marketing costs from Beijing Liheng Group's business expansion, the segment recorded a significant loss of **53,809 thousand RMB** Digital Internet Platform Business Operating Results (thousand RMB) | Indicator | H1 2025 | | :--- | :--- | | Revenue | 11,923 | | Net Operating Expenses | (65,732) | | Segment Results (excluding inter-segment transactions) | (53,809) | - The segment recorded a significant loss due to increased R&D, personnel, and related costs from Beijing Liheng Group's expanded business scope, while products are not yet fully mature[84](index=84&type=chunk) [FinTech Services Business Segment Analysis](index=42&type=section&id=FinTech%20Services%20Business%20Segment%20Analysis) FinTech services business revenue grew steadily, with commercial factoring business revenue increasing to **40,123 thousand RMB** and segment results of **34,430 thousand RMB**; other financial services revenue increased to **19,557 thousand RMB**, with segment results of **16,480 thousand RMB**; the total loan return rate decreased, but the non-performing loan ratio remained **0%**, indicating robust risk management Commercial Factoring Business Operating Results (thousand RMB) | Indicator | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Revenue | 40,123 | 39,172 | | Net Operating Expenses | (3,685) | (3,072) | | Segment Results (excluding inter-segment transactions) | 34,430 | 34,226 | Other Financial Services Business Operating Results (thousand RMB) | Indicator | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Revenue | 19,557 | 15,659 | | Net Operating Expenses | (3,077) | (2,249) | | Segment Results (excluding inter-segment transactions) | 16,480 | 13,410 | Key Indicators for Commercial Factoring Business | Indicator | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Total Loan Return (Revenue as % of Average Total Loan Balance) | 6.12% | 7.16% | | Loan Loss Provision Ratio (Impairment Provision as % of Total Loan Balance) | 1.22% | 1.14% | | Non-Performing Loan Ratio | 0.00% | 0.00% | - The decrease in total loan return is mainly due to the People's Bank of China continuously lowering the Loan Prime Rate, leading the Group to also adjust its commercial factoring loan interest rates to align with market conditions[92](index=92&type=chunk) - The non-performing loan ratio remained at **0%**, and the provision coverage ratio remained above **100%** or was not applicable, indicating that provisions fully cover the total balance of all non-performing loans[93](index=93&type=chunk) [Provision for Expected Credit Losses](index=47&type=section&id=Provision%20for%20Expected%20Credit%20Losses) During the interim period, a provision for expected credit losses of **2,000 thousand RMB** was made for commercial factoring business and **100 thousand RMB** for game development and publishing business; the total provision at period-end increased to **17,052 thousand RMB** Changes in Provision for Expected Credit Losses on Trade and Loan Receivables (thousand RMB) | Item | H1 2025 | H1 2024 | | :--- | :--- | :--- | | As of January 1 | 14,944 | 11,473 | | Impairment Provision Recognized | 10,733 | 7,710 | | Reversal of Impairment Loss | (8,625) | (5,836) | | **As of June 30** | **17,052** | **13,347** | [Credit Policy and Credit Approval Procedures](index=47&type=section&id=Credit%20Policy%20and%20Credit%20Approval%20Procedures) The Group has established stringent credit policies and approval procedures, including due diligence by the business department, review and analysis by the risk audit department, and approval by the Credit Review Committee; the finance department is responsible for signing, disbursing, and collecting payments, with standard collection procedures in place to ensure loan quality and risk control - The Group has established credit policies and approval procedures, including due diligence by the business department, review and analysis by the risk audit department, and approval by the Credit Review Committee[95](index=95&type=chunk)[96](index=96&type=chunk)[97](index=97&type=chunk) - The finance department is responsible for loan signing, disbursement, and collection, with standard collection and recovery procedures in place, allowing for legal action against borrowers with overdue or delinquent repayments[98](index=98&type=chunk)[99](index=99&type=chunk) - Commercial factoring loans have credit terms ranging from **90 to 360 days**, with effective annual interest rates between **6.0% and 7.5%**; during the interim period, no trade and loan receivables from commercial factoring services business were overdue[100](index=100&type=chunk)[102](index=102&type=chunk) [Assessment of Equity Value Corresponding to Prepayments Arising from Acquisitions](index=50&type=section&id=Assessment%20of%20Equity%20Value%20Corresponding%20to%20Prepayments%20Arising%20from%20Acquisitions) The Group prepaid **576,000 thousand RMB** to OPCO for the acquisition of Tianjin Guanchuang, but the transaction is delayed due to pending approval from the People's Bank of China; Mr. Huang Guangyu has provided a personal guarantee to cover any shortfall if the transaction fails; management believes Tianjin Guanchuang is crucial for the Group's business development and will continue to pursue approvals, with no further impairment of prepayments currently deemed necessary - The Group has prepaid **576,000 thousand RMB** for the acquisition of **100% equity interest** in Tianjin Guanchuang Meitong E-commerce Co., Ltd., but the transaction has not yet received approval from the People's Bank of China[103](index=103&type=chunk) - Mr. Huang Guangyu has provided a personal guarantee, committing to make up any shortfall to the Group with his personal assets by **December 31, 2026**, if the transaction ultimately cannot be completed and the funds cannot be recovered[106](index=106&type=chunk) - Management believes Tianjin Guanchuang will bring more development opportunities and synergies to the Group and will continue to actively pursue approval procedures; currently, the estimated recoverable amount of prepayments is higher than their carrying amount, and no further impairment is needed[105](index=105&type=chunk)[107](index=107&type=chunk) [Outlook](index=52&type=section&id=Outlook) The Group will continue to strengthen its technological empowerment and risk control capabilities, exploring new paths for integrated "Technology + Finance" development; in terms of business layout, it will focus on innovations in financial services such as cross-border payments, promote the international expansion of its digital internet business, and deepen the synergy among its three major business segments—FinTech services, digital content ecosystem, and digital internet platform—to address challenges and achieve steady growth - The Group will continue to strengthen its technological empowerment and risk control capabilities, exploring new paths for integrated "Technology + Finance" development[108](index=108&type=chunk) - In terms of business layout, the Group will focus on innovation opportunities in financial services such as cross-border payments, explore enhancing the efficiency of cross-border capital flows through technological upgrades, and timely promote the international expansion of its digital internet business[109](index=109&type=chunk) - The Group will deepen the synergy among its three major business segments: FinTech services, digital content ecosystem, and digital internet platform, strengthening risk identification and technical safeguards, and improving operational compliance to lay a solid foundation for steady growth in the second half of the year[109](index=109&type=chunk) [Liquidity and Financial Resources](index=54&type=section&id=Liquidity%20and%20Financial%20Resources) [Liquidity and Financial Resources](index=54&type=section&id=Liquidity%20and%20Financial%20Resources) The Group maintains a sound financial position, but cash and cash equivalents decreased to **73,000 thousand RMB**, primarily due to business expansion costs of Beijing Liheng Group and an increase in commercial factoring loan scale; the current ratio decreased to **10.5**, and the debt-to-asset ratio increased to **9.15%** - The Group's total equity was **2,445,600 thousand RMB**, and cash and cash equivalents decreased to **73,000 thousand RMB**[110](index=110&type=chunk) - The decrease in cash balance was mainly due to increased R&D, personnel, and related costs from Beijing Liheng Group's business expansion, as well as an increase in the scale of commercial factoring loans[110](index=110&type=chunk) Cash Flow Overview (thousand RMB) | Item | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Cash Outflow from Operating Activities | (9,100) | (89,100) | | Cash Outflow from Investing Activities | (47,600) | (7,700) | | Cash Inflow from Financing Activities | 14,600 | (700) | Liquidity Ratios | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Current Ratio | 10.5 | 18.2 | | Debt-to-Asset Ratio | 9.15% | 5.25% | [Capital Structure](index=55&type=section&id=Capital%20Structure) [Capital Structure](index=55&type=section&id=Capital%20Structure) The company's issued share capital remained unchanged during the interim period, maintaining **5,201,123,120 shares** - The number of issued ordinary shares of the Company remained at **5,201,123,120 shares** as of June 30, 2025[113](index=113&type=chunk) [Significant Acquisitions and Disposals of Subsidiaries, Associates and Joint Ventures](index=55&type=section&id=Significant%20Acquisitions%20and%20Disposals%20of%20Subsidiaries,%20Associates%20and%20Joint%20Ventures) [Significant Acquisitions and Disposals of Subsidiaries, Associates and Joint Ventures](index=55&type=section&id=Significant%20Acquisitions%20and%20Disposals%20of%20Subsidiaries,%20Associates%20and%20Joint%20Ventures) Apart from the Beijing Yiheng contractual arrangement and Beijing Jiayu contractual arrangement, the Group had no other significant acquisitions or disposals of subsidiaries, associates, or joint ventures during the interim period - Apart from the Beijing Yiheng contractual arrangement and Beijing Jiayu contractual arrangement, the Group had no other significant acquisitions or disposals of subsidiaries, associates, or joint ventures during the interim period[114](index=114&type=chunk) [Material Investments](index=55&type=section&id=Material%20Investments) [Material Investments](index=55&type=section&id=Material%20Investments) As of June 30, 2025, the Group had no material investments - As of June 30, 2025, the Group had **no material investments**[115](index=115&type=chunk) [Pledge of Assets and Contingent Liabilities](index=55&type=section&id=Pledge%20of%20Assets%20and%20Contingent%20Liabilities) [Pledge of Assets and Contingent Liabilities](index=55&type=section&id=Pledge%20of%20Assets%20and%20Contingent%20Liabilities) As of June 30, 2025, the Group had no pledged assets or significant contingent liabilities - As of June 30, 2025, the Group had **no pledged assets or significant contingent liabilities**[116](index=116&type=chunk) [Treasury Policy and Foreign Exchange Risk](index=55&type=section&id=Treasury%20Policy%20and%20Foreign%20Exchange%20Risk) [Treasury Policy and Foreign Exchange Risk](index=55&type=section&id=Treasury%20Policy%20and%20Foreign%20Exchange%20Risk) The Group adopts a prudent treasury policy, closely monitoring its liquidity position and customer financial conditions; all bank deposits are in HKD, RMB, and USD; the Group has not adopted any hedging policy but will continue to monitor foreign exchange risk and consider hedging measures when necessary - The Group adopts a prudent treasury policy, with all bank deposits held in **HKD, RMB, and USD**[117](index=117&type=chunk) - The Group has not adopted any hedging policy, but the executive directors and management will continue to monitor foreign exchange risk and consider hedging measures when necessary[117](index=117&type=chunk) [Staff and Remuneration](index=56&type=section&id=Staff%20and%20Remuneration) [Staff and Remuneration](index=56&type=section&id=Staff%20and%20Remuneration) As of June 30, 2025, the Group's total number of employees increased to **630**; employee remuneration (excluding directors and chief executive) for the interim period was **50,300 thousand RMB**, and staff training was conducted in a timely manner - As of June 30, 2025, the Group employed a total of **630 staff** (December 31, 2024: **381 staff**)[118](index=118&type=chunk) - Employee remuneration (excluding remuneration for directors and chief executive) for the interim period was **50,300 thousand RMB** (corresponding period: **6,500 thousand RMB**)[118](index=118&type=chunk) - The Group pays social insurance and mandatory provident fund contributions for employees in accordance with applicable laws in China and Hong Kong, and conducts relevant staff training in a timely manner[118](index=118&type=chunk) [Interim Dividend](index=56&type=section&id=Interim%20Dividend) [Interim Dividend](index=56&type=section&id=Interim%20Dividend) The directors do not recommend the payment of any interim dividend for the current interim period, consistent with the prior year - The directors do not recommend the payment of any interim dividend for the current interim period[119](index=119&type=chunk) [Compliance with Corporate Governance Code](index=56&type=section&id=Compliance%20with%20Corporate%20Governance%20Code) [Compliance with Corporate Governance Code](index=56&type=section&id=Compliance%20with%20Corporate%20Governance%20Code) The company has complied with the Corporate Governance Code during the interim period, except for the unseparated roles of Chairman and Chief Executive; the Chief Executive's role is performed by the Operating Management Committee, and the Board will review and consider appointing a suitable candidate - The Company has complied with the Corporate Governance Code throughout the interim period, except that the roles of Chairman and Chief Executive are not separated[120](index=120&type=chunk) - The role of Chief Executive is performed by the Operating Management Committee (comprising executive directors), and the Board will review and consider appointing a suitable candidate from time to time[121](index=121&type=chunk) [Standard Securities Dealing Code for Directors](index=57&type=section&id=Standard%20Securities%20Dealing%20Code%20for%20Directors) [Standard Securities Dealing Code for Directors](index=57&type=section&id=Standard%20Securities%20Dealing%20Code%20for%20Directors) Upon inquiry with all directors, it is confirmed that they have complied with the Standard Code as set out in Appendix C3 of the Listing Rules throughout the interim period - All directors confirmed compliance with the Standard Code as set out in Appendix C3 of the Listing Rules throughout the interim period[122](index=122&type=chunk) [Purchase, Redemption or Sale of the Company's Listed Securities](index=57&type=section&id=Purchase,%20Redemption%20or%20Sale%20of%20the%20Company's%20Listed%20Securities) [Purchase, Redemption or Sale of the Company's Listed Securities](index=57&type=section&id=Purchase,%20Redemption%20or%20Sale%20of%20the%20Company's%20Listed%20Securities) Neither the company nor any of its subsidiaries purchased, redeemed, or sold any of the company's listed securities during the interim period, nor did they hold any treasury shares - Neither the Company nor any of its subsidiaries purchased, redeemed, or sold any of the Company's listed securities during the interim period, nor did they hold any treasury shares[123](index=123&type=chunk) [Audit Committee](index=58&type=section&id=Audit%20Committee) [Audit Committee](index=58&type=section&id=Audit%20Committee) The Audit Committee comprises four members, including three independent non-executive directors and one non-executive director, with Chairman Mr. Mak Yau Kee possessing appropriate financial and accounting professional qualifications; the committee has reviewed the Group's unaudited interim results for the current interim period - The Audit Committee comprises four members, including three independent non-executive directors and one non-executive director, with Chairman Mr. Mak Yau Kee possessing appropriate financial and accounting professional qualifications[124](index=124&type=chunk) - The Audit Committee met with management on **August 27, 2025**, to review accounting standards and practices and the Group's unaudited interim results for the current interim period[124](index=124&type=chunk) [Publication of Financial Information](index=58&type=section&id=Publication%20of%20Financial%20Information) [Publication of Financial Information](index=58&type=section&id=Publication%20of%20Financial%20Information) This results announcement has been published on the HKEX website and the company's website, and the interim report containing all information will be available for viewing at the appropriate time - This results announcement has been published on the HKEX website (www.hkexnews.hk) and the Company's website (www.00628.hk.com)[125](index=125&type=chunk) - The Company's interim report for the current interim period, containing all information required by the Listing Rules, will be available for viewing on the aforementioned websites at the appropriate time[125](index=125&type=chunk)

[Section I Definitions](index=5&type=section&id=Section%20I%20Definitions) This section defines common terms used in the report, ensuring a unified understanding of professional terminology - The report clearly defines common terms such as "the Company", "the Group", "Board of Directors", "Hong Kong Listing Rules", and "Reporting Period" to ensure accuracy of information transmission[19](index=19&type=chunk)[21](index=21&type=chunk) [Section II Company Profile and Key Financial Indicators](index=7&type=section&id=Section%20II%20Company%20Profile%20and%20Key%20Financial%20Indicators) This section provides Zhongyuan Securities' basic information, business qualifications, contact details, stock overview, and key accounting data and financial indicators for the six months ended June 30, 2025 [I. Company Information](index=7&type=section&id=I.%20Company%20Information) This section discloses the company's Chinese name, abbreviation, foreign name, legal representative, general manager, registered capital, and net capital - Company Legal Representative: **Zhang Qiuyun**; Company General Manager: **Li Zhaoxin**[22](index=22&type=chunk) Key Company Information | Indicator | End of Current Reporting Period (RMB) | | :--- | :--- | | Registered Capital | 4,642,884,700.00 | | Net Capital | 9,857,509,618.41 | [Business Qualifications](index=7&type=section&id=Business%20Qualifications) This section details the various business qualifications held by the company and its subsidiaries, covering securities brokerage, investment consulting, underwriting and sponsorship, proprietary trading, asset management, margin financing and securities lending, fund distribution, futures brokerage, and overseas business - The company has a wide range of business operations, including securities brokerage, securities investment consulting, financial advisory, securities underwriting and sponsorship, proprietary securities trading, securities asset management, margin financing and securities lending, securities investment, fund distribution, and distribution of financial products[24](index=24&type=chunk) - The company holds various business qualifications approved by the CSRC, exchanges, Securities Association of China, and the People's Bank of China; subsidiaries Zhongyuan Futures, Zhongzhou International, Zhongding Kaiyuan, Henan Kaiyuan Private Equity Fund Management Co., Ltd., and Zhongzhou Lan Hai also possess their respective professional business qualifications[25](index=25&type=chunk)[26](index=26&type=chunk)[28](index=28&type=chunk)[29](index=29&type=chunk)[30](index=30&type=chunk)[31](index=31&type=chunk) [II. Contact Persons and Information](index=9&type=section&id=II.%20Contact%20Persons%20and%20Information) This section provides the names, contact addresses, telephone numbers, and email addresses of the company's Board Secretary and Securities Affairs Representative - Board Secretary: **Guo Liangyong**; Securities Affairs Representative: **Xu Changyu**. Contact Address: No. 10 Business Outer Ring Road, Zhengdong New District, Zhengzhou, Henan Province, China[33](index=33&type=chunk) [III. Brief Introduction to Changes in Basic Information](index=9&type=section&id=III.%20Brief%20Introduction%20to%20Changes%20in%20Basic%20Information) This section discloses the company's registered address, office address, website, email address, and principal place of business in Hong Kong, stating no changes during the reporting period - The company's registered and office address is No. 10 Business Outer Ring Road, Zhengdong New District, Zhengzhou, Henan Province, China, and its principal place of business in Hong Kong is 40/F, Dah Sing Financial Centre, 248 Queen's Road East, Wanchai, Hong Kong. No changes occurred during the reporting period[34](index=34&type=chunk) [IV. Brief Introduction to Changes in Information Disclosure and Document Custody Locations](index=9&type=section&id=IV.%20Brief%20Introduction%20to%20Changes%20in%20Information%20Disclosure%20and%20Document%20Custody%20Locations) This section lists the company's selected newspapers for information disclosure, website addresses for semi-annual reports, and report custody locations, stating no changes during the reporting period - The company's selected newspapers for information disclosure include China Securities Journal, Shanghai Securities News, etc. The website addresses for semi-annual reports are http://www.sse.com.cn and http://www.hkexnews.hk. No changes occurred during the reporting period[35](index=35&type=chunk) [V. Company Stock Overview](index=9&type=section&id=V.%20Company%20Stock%20Overview) This section provides the listing exchange, stock abbreviation, and stock code for the company's A-shares and H-shares Company Stock Information | Stock Type | Listing Exchange | Stock Abbreviation | Stock Code | | :--- | :--- | :--- | :--- | | A-shares | Shanghai Stock Exchange | Zhongyuan Securities | 601375 | | H-shares | Hong Kong Stock Exchange | Zhongzhou Securities | 01375 | [VI. Other Relevant Information](index=10&type=section&id=VI.%20Other%20Relevant%20Information) This section discloses the accounting firm, legal counsel, share registrar, and unified social credit code appointed by the company - The company's domestic accounting firm is Shinewing Certified Public Accountants (Special General Partnership), and the A-share share registrar is China Securities Depository and Clearing Corporation Limited Shanghai Branch[38](index=38&type=chunk) [VII. Key Accounting Data and Financial Indicators](index=10&type=section&id=VII.%20Key%20Accounting%20Data%20and%20Financial%20Indicators) This section summarizes the company's key accounting data and financial indicators for the current reporting period (January-June 2025) and the same period last year, with explanations for some indicators Key Accounting Data (Consolidated Statements) | Indicator | Current Reporting Period (Jan–Jun) (RMB) | Prior Year Period (RMB) | Change (%) | | :--- | :--- | :--- | :--- | | Operating Revenue | 921,354,746.21 | 1,198,670,567.05 | -23.14 | | Total Profit | 292,765,454.14 | 214,647,671.11 | 36.39 | | Net Profit Attributable to Parent Company Shareholders | 260,308,365.67 | 201,265,120.05 | 29.34 | | Net Cash Flow from Operating Activities | 627,914,417.23 | 856,846,780.21 | -26.72 | | Total Assets (End of Period) | 53,444,217,894.41 | 51,614,348,080.07 | 3.55 | | Total Liabilities (End of Period) | 38,994,629,559.20 | 37,331,529,726.77 | 4.45 | | Equity Attributable to Parent Company Shareholders (End of Period) | 14,229,724,178.52 | 14,060,235,023.57 | 1.21 | Key Financial Indicators (Consolidated Statements) | Key Financial Indicator | Current Reporting Period (Jan–Jun) | Prior Year Period | Change (%) | | :--- | :--- | :--- | :--- | | Basic Earnings Per Share (RMB/share) | 0.0561 | 0.0433 | 29.56 | | Diluted Earnings Per Share (RMB/share) | 0.0561 | 0.0433 | 29.56 | | Basic Earnings Per Share After Deducting Non-recurring Gains and Losses (RMB/share) | 0.0545 | 0.0425 | 28.24 | | Weighted Average Return on Net Assets (%) | 1.84 | 1.44 | Increase 0.40 percentage points | | Weighted Average Return on Net Assets After Deducting Non-recurring Gains and Losses (%) | 1.79 | 1.41 | Increase 0.38 percentage points | Parent Company Net Capital and Risk Control Indicators (End of Period) | Item | End of Current Reporting Period | End of Prior Year | | :--- | :--- | :--- | | Net Capital (RMB) | 9,857,509,618.41 | 9,468,635,644.80 | | Risk Coverage Ratio (%) | 375.48 | 287.40 | | Capital Leverage Ratio (%) | 23.83 | 22.66 | | Liquidity Coverage Ratio (%) | 273.50 | 286.47 | | Net Stable Funding Ratio (%) | 224.37 | 204.62 | - During the reporting period, the company's net capital and other key risk control indicators all met regulatory requirements[45](index=45&type=chunk) [VIII. Non-recurring Gains and Losses Items and Amounts](index=12&type=section&id=VIII.%20Non-recurring%20Gains%20and%20Losses%20Items%20and%20Amounts) This section lists the specific amounts of non-recurring gains and losses items for the current reporting period, totaling **RMB 7,086,379.04** Non-recurring Gains and Losses Items | Non-recurring Gains and Losses Item | Amount (RMB) | | :--- | :--- | | Gains and losses from disposal of non-current assets | 969,549.51 | | Government subsidies included in current profit and loss | 9,131,599.02 | | Other non-operating income and expenses apart from the above | -631,560.60 | | Less: Income tax impact | 2,366,845.92 | | Impact of minority interests (after tax) | 16,362.97 | | Total | 7,086,379.04 | [Section III Management Discussion and Analysis](index=13&type=section&id=Section%20III%20Management%20Discussion%20and%20Analysis) This section comprehensively reviews the company's operating environment, business development, core competitiveness, financial performance, and risk management measures in the first half of 2025 [I. Explanation of the Company's Industry and Main Business During the Reporting Period](index=13&type=section&id=I.%20Explanation%20of%20the%20Company%27s%20Industry%20and%20Main%20Business%20During%20the%20Reporting%20Period) This section elaborates on the capital market development, regulatory policy direction in the first half of 2025, and the overall performance of the company's main business and the implementation of the "Quality Improvement, Efficiency Enhancement, and Return Focus" action plan - In the first half of 2025, the Central Political Bureau meeting proposed "continuously stabilizing and invigorating the capital market", and the new "Nine National Guidelines" and supporting policy system continued to improve, focusing on consolidating market recovery, serving the development of new quality productive forces, and promoting long-term capital entry[49](index=49&type=chunk)[50](index=50&type=chunk) - In the first half, major A-share indices rose steadily, with the Shanghai Composite Index up **2.76%** and the Shenzhen Component Index up **6.00%**. The average daily stock trading volume across the market increased by **61.12%** year-on-year, and the average daily balance of margin financing and securities lending increased by **20.19%**, indicating active market trading[52](index=52&type=chunk) - Equity financing scale was **RMB 762.836 billion** (by listing date), a year-on-year increase of **402.91%**; excluding the impact of large bank refinancing, the actual scale was **RMB 242.8 billion**, a year-on-year increase of **60.09%**. The number of IPOs and fundraising scale increased by **7** and **14.96%** respectively[52](index=52&type=chunk) - The company adheres to "two highs and four focuses", deeply cultivates Henan, serves the whole country, plays the role of "strategic carrier of Henan capital market", comprehensively deepens reforms, improves governance mechanisms, and carries out "Quality Improvement, Efficiency Enhancement, and Return Focus" special actions[53](index=53&type=chunk) - Wealth management business achieved a **20%** increase in average daily assets for all clients compared to the end of last year, a **56%** increase in high-net-worth product holdings, a **22.44%** year-on-year increase in average daily margin financing and securities lending balance, and a **200%** year-on-year increase in investment advisory signed assets[54](index=54&type=chunk) - The company has cumulatively implemented **16** profit distributions, with a total dividend of **RMB 3.464 billion**. The proposed 2025 interim profit distribution plan is to distribute a cash dividend of **RMB 0.08** (including tax) per **10** shares[55](index=55&type=chunk) [II. Discussion and Analysis of Operating Performance](index=16&type=section&id=II.%20Discussion%20and%20Analysis%20of%20Operating%20Performance) This section analyzes the market environment, operational measures, and performance of the company's various businesses during the reporting period, and outlines development strategies for the second half [1. Securities Brokerage Business](index=16&type=section&id=1.%20Securities%20Brokerage%20Business) During the reporting period, the A-share market fluctuated upwards, and the company's wealth management business enhanced its one-stop service capabilities, achieving significant growth in client assets and investment advisory business - In the first half of 2025, the total market value of A-shares exceeded **RMB 100 trillion**, reaching a new historical high, with total A-share transaction volume of **RMB 162.68 trillion**, a year-on-year increase of **61%**[57](index=57&type=chunk) - The company's "Caishenbao APP" had over **1.3 million** monthly active users, ranking **22nd** overall, firmly in the industry's first tier[57](index=57&type=chunk) - Outlook for the second half: Explore differentiated development, integrate digital support platforms, build a professional investment advisory team, and enrich client service scenarios[58](index=58&type=chunk) [2. Investment Banking Business](index=17&type=section&id=2.%20Investment%20Banking%20Business) Investment banking business closely aligns with its function as a "strategic carrier of Henan capital market," strengthening its role in serving the real economy, successfully hosting a M&A and Restructuring Conference, and actively promoting innovative businesses - In the first half of 2025, a total of **51** enterprises completed initial public offerings on the Shanghai, Shenzhen, and Beijing stock exchanges, raising a total of **RMB 37.355 billion**, a year-on-year increase of **14.96%**[59](index=59&type=chunk) - The company, in conjunction with Henan Daily Press Group, hosted the "2025 M&A and Restructuring High-Quality Development Conference" to open up new sources for M&A and restructuring business[59](index=59&type=chunk) - As of the end of the reporting period, the company completed **4** interbank and ABS bond distribution projects, with a cumulative distribution amount of **RMB 244 million**; **1** new third board listing was completed[61](index=61&type=chunk) - Outlook for the second half: Focus on key reserve projects such as Beijing Stock Exchange IPOs, deepen investment banking transformation, vigorously develop M&A and restructuring business, and explore innovative businesses such as income right ABS and CMBS[61](index=61&type=chunk) [3. Investment Management Business](index=18&type=section&id=3.%20Investment%20Management%20Business) Investment management business includes asset management, private equity fund management, and alternative investments, with steady growth in scale, focus on new quality productive forces, and optimized asset structure [(1) Asset Management](index=18&type=section&id=%281%29%20Asset%20Management) Asset management business, while consolidating its fixed-income base, enhanced active management capabilities, optimized investment strategies, and achieved steady growth in asset management scale - The investment returns of the company's fixed-income products consistently ranked among the top in similar bank wealth management and public bond funds[62](index=62&type=chunk) - As of the end of the reporting period, the company's total asset management scale was **RMB 4.144 billion** (excluding special asset management plans)[63](index=63&type=chunk) - Outlook for the second half: Continuously enhance investment management capabilities, improve business control, and promote internal mechanism improvements to ensure stable and healthy development of asset management business[64](index=64&type=chunk) [(2) Private Equity Fund Management](index=19&type=section&id=%282%29%20Private%20Equity%20Fund%20Management) Through its subsidiary Zhongding Kaiyuan, the company conducts private equity fund management business, focusing on industries representative of new quality productive forces, with an additional fund filing and management scale of **RMB 200 million**, and completed investments of **RMB 33 million** - In the first half of 2025, the number and scale of newly raised funds increased by **12.1%** and **12.0%** year-on-year, respectively[66](index=66&type=chunk) - An additional fund filing and management scale of **RMB 200 million** was achieved, with **RMB 33 million** invested to support the development of the photonics industry chain[66](index=66&type=chunk) - As of the end of the reporting period, Zhongding Kaiyuan and its subordinate entities managed **17** filed private equity funds, with a total management scale of **RMB 6.4995 billion**[67](index=67&type=chunk) - Outlook for the second half: Continue to focus on new quality productive forces representative industries such as green development, advanced manufacturing, new energy, information technology, and life sciences, seizing opportunities in listed company M&A and restructuring[69](index=69&type=chunk) [(3) Alternative Investment](index=20&type=section&id=%283%29%20Alternative%20Investment) Through its subsidiary Zhongzhou Lan Hai, the company conducts alternative investment business, increasing efforts in recovering existing projects, optimizing asset structure, and strengthening "investment banking + investment + research" synergy - As of the end of the reporting period, Zhongzhou Lan Hai had **43** ongoing investment projects, with a total scale of **RMB 1.975 billion**[71](index=71&type=chunk) - During the reporting period, various types of projects achieved a recovery amount of **RMB 180 million**[71](index=71&type=chunk) - Outlook for the second half: Continue to focus on core business, operate steadily, strengthen "investment banking + investment + research" synergy, and enhance profitability[72](index=72&type=chunk) [4. Proprietary Trading](index=21&type=section&id=4.%20Proprietary%20Trading) Proprietary business developed steadily, building a large asset allocation portfolio using risk parity theory, focusing on high-dividend and high-yield stocks, and strengthening investment research support and market risk management - In the first half of 2025, major A-share indices generally rose, with the Beijing Stock Exchange 50 Index increasing by **39.45%**[73](index=73&type=chunk) - Equity investment business uses risk parity theory to construct a large asset allocation portfolio, focusing on high-dividend and high-yield stocks[73](index=73&type=chunk) - Fixed-income investment business adheres to prudent principles, adjusting positions as appropriate to ensure high asset liquidity[73](index=73&type=chunk) - Outlook for the second half: Explore H-share investments, strengthen quasi-fixed income investments, increase investment returns, and continuously optimize the proprietary business organizational structure[74](index=74&type=chunk) [5. Credit Business](index=22&type=section&id=5.%20Credit%20Business) Margin financing and securities lending business continued to advance client development, steadily expanding its high-quality client base; stock pledge repurchase business adhered to the "service synergy" positioning and a prudent and stable development strategy - As of the end of the reporting period, the total market balance of margin financing and securities lending was **RMB 1.85 trillion**, largely flat compared to the end of 2024[76](index=76&type=chunk) - The company's margin financing and securities lending balance was **RMB 8.478 billion**, a decrease of **7.92%** from the end of last year[77](index=77&type=chunk) - The balance of on-balance sheet stock pledge repurchase business was **RMB 383 million**, a decrease of **20.78%** from the end of last year, with an average maintenance guarantee ratio of **230.38%**[77](index=77&type=chunk) - Outlook for the second half: Continuously track market dynamics, improve interest rate pricing mechanisms, enhance service depth for high-net-worth clients, and strengthen risk prevention and control[78](index=78&type=chunk) [6. Futures Business](index=23&type=section&id=6.%20Futures%20Business) Through its subsidiary Zhongyuan Futures, the company conducts futures brokerage and trading advisory services, deepening industry-finance integration, strengthening business synergy, and accelerating digital transformation, with increases in both client numbers and trading volume - In the first half of 2025, China's futures market cumulative trading volume was **4.076 billion** lots, a year-on-year increase of **17.82%**[80](index=80&type=chunk) - Zhongyuan Futures added **1,164** new clients, bringing the total number of clients served to **40.6 thousand** accounts[81](index=81&type=chunk) - Trading volume was **17.1562 million** lots, a year-on-year increase of **12.14%**; trading value was **RMB 1.393942 trillion**, a year-on-year decrease of **3.56%**[81](index=81&type=chunk) - Outlook for the second half: Deepen industry services, strengthen business synergy with Zhongyuan Securities, improve online client conversion rates, and operate market-making business steadily[83](index=83&type=chunk) [7. Overseas Business](index=24&type=section&id=7.%20Overseas%20Business) Through its subsidiary Zhongzhou International, the company conducts overseas business, implementing the "window + intermediary" strategic positioning, collaborating with the parent company to explore overseas financing projects for provincial enterprises, and participating in multiple bond issuance and IPO projects - In the first half of 2025, the Hong Kong capital market's Hang Seng Index rose by approximately **20.0%**, and IPO fundraising ranked first globally[85](index=85&type=chunk) - During the reporting period, the company participated in **3** provincial state-owned platform bond issuance projects and acted as the sole financial advisor for the first GEM-listed enterprise in Hong Kong to transfer to the Main Board[85](index=85&type=chunk) - As of the end of the reporting period, Zhongzhou International Securities had **4,501** existing clients and total assets under custody of **HKD 2.361 billion**[85](index=85&type=chunk) - Outlook for the second half: Anchor the "window + intermediary" strategic positioning, deeply cultivate the Henan market, improve securities brokerage and investment banking performance, and serve Henan enterprises "going global"[86](index=86&type=chunk) [8. Other Businesses](index=25&type=section&id=8.%20Other%20Businesses) Regional equity market business is conducted through the subsidiary Equity Center, actively playing a regional hub role, promoting the construction of a "specialized, refined, unique, and innovative" board, and deepening enterprise cultivation and financing matching services - The Equity Center continues to promote the construction of the "specialized, refined, unique, and innovative" board, completing the system for Henan Province's specialized, refined, unique, and innovative cultivation database entrusted by the Provincial Department of Industry and Information Technology[90](index=90&type=chunk) - Organized multiple investment and financing roadshows and specialized training sessions, assisting several enterprises in achieving equity financing[90](index=90&type=chunk) - As of the end of the reporting period, cumulative financing reached **RMB 28.21 billion**, a **2%** increase from the end of last year[91](index=91&type=chunk) - Outlook for the second half: Strengthen the functional positioning of Henan's regional private equity market, with the "specialized, refined, unique, and innovative" board construction as the core, reserve the first batch of enterprises to be listed on the board, and innovate enterprise financing products[92](index=92&type=chunk) [III. Analysis of Core Competitiveness During the Reporting Period](index=27&type=section&id=III.%20Analysis%20of%20Core%20Competitiveness%20During%20the%20Reporting%20Period) The company's core competitiveness primarily lies in its strategic carrier advantage in the Henan capital market, integrated development advantage, and A+H platform comprehensive service advantage - Strategic carrier advantage in Henan capital market: Leveraging the most complete business network covering Henan Province, coordinating overall resources, strengthening synergistic promotion, and serving regional capital market development[93](index=93&type=chunk) - Building an integrated development advantage: Continuously deepening the "One Zhongyuan" externally and "One Client" internally integrated operating mechanism, enhancing the comprehensive service system capabilities and overall development efficiency[94](index=94&type=chunk) - A+H platform comprehensive service advantage: Leveraging the advantages of A+H dual listing, building a "window" and "intermediary" platform for regional economy to connect with international capital markets in Hong Kong, and enriching service content[95](index=95&type=chunk) [IV. Key Operating Performance During the Reporting Period](index=28&type=section&id=IV.%20Key%20Operating%20Performance%20During%20the%20Reporting%20Period) This section analyzes the changes in financial statement items of the company's main business, asset and liability status, investment status, and major controlled and investee companies during the reporting period [(I) Analysis of Main Business](index=28&type=section&id=%28I%29%20Analysis%20of%20Main%20Business) During the reporting period, the company's operating revenue decreased by **23.14%** year-on-year, mainly due to reduced bulk commodity sales revenue and proprietary investment income, but securities brokerage business revenue and subsidiary investment income increased. Operating costs decreased by **36.16%** year-on-year, mainly due to reduced bulk commodity sales costs and business and management expenses. Net profit attributable to parent company shareholders increased by **29.34%** year-on-year Major Consolidated Income Statement Items (Changes exceeding 30%) | Item | Jan–Jun 2025 (RMB) | Jan–Jun 2024 (RMB) | Change (%) | Explanation | | :--- | :--- | :--- | :--- | :--- | | Net interest income | 174,898,824.75 | 78,626,368.95 | 122.44 | Increase in interest income from margin financing and securities lending business and decrease in interest expense from debt financing | | Net fee and commission income | 424,854,336.38 | 319,162,088.55 | 33.12 | Increase in net income from securities brokerage business | | Net brokerage fee income | 358,387,152.25 | 248,077,408.62 | 44.47 | Increase in income from agency securities trading business | | Net investment banking fee income | 5,653,889.37 | 25,574,336.50 | -77.89 | Decrease in income from securities underwriting business | | Investment income | 275,310,673.55 | 675,775,506.06 | -59.26 | Decrease in investment income from financial instruments | | Investment income from associates and joint ventures | 58,235,148.03 | -27,503,805.08 | Not applicable | Increase in net profit of associates | | Other income | 8,631,599.02 | 5,368,173.00 | 60.79 | Increase in government subsidies | | Gains from changes in fair value | 32,381,186.01 | -120,698,919.06 | Not applicable | Increase in fair value change gains from trading financial assets | | Exchange gains | 2,205,970.10 | -167,332.82 | Not applicable | Exchange rate changes | | Other operating income | 1,784,577.34 | 240,605,710.27 | -99.26 | Decrease in bulk commodity sales revenue | | Gains from asset disposal | 1,287,579.06 | -1,027.90 | Not applicable | Increase in gains from disposal of right-of-use assets | | Credit impairment losses | 2,021,098.12 | 26,164,774.93 | -92.28 | Decrease in impairment provisions for funds lent out, etc | | Other asset impairment losses | 4,752,513.00 | 2,964,419.83 | 60.32 | Increase in impairment provisions for assets taken in lieu of debt | | Other operating costs | 503,302.73 | 235,756,486.40 | -99.79 | Decrease in bulk commodity sales costs | | Non-operating income | 600,879.39 | 1,598,648.85 | -62.41 | Decrease in income unrelated to the company's daily activities | | Non-operating expenses | 1,050,469.54 | 1,741,100.80 | -39.67 | Decrease in expenses unrelated to the company's daily activities | | Minority interests | -1,167,552.64 | -21,863,679.29 | Not applicable | Increase in net profit of some subsidiaries, leading to increased minority interests | | Other comprehensive income | -11,890,170.82 | 6,960,345.18 | -270.83 | Decrease in foreign currency translation differences | - Operating revenue decreased by **23.14%** year-on-year, mainly due to reduced bulk commodity sales revenue and proprietary investment income, but securities brokerage business revenue and subsidiary investment income increased[101](index=101&type=chunk) - Net profit attributable to parent company shareholders was **RMB 260 million**, an increase of **RMB 59 million**, mainly due to increased securities brokerage business revenue, increased subsidiary investment income, and reduced business and management expenses[103](index=103&type=chunk) - Changes in net cash flow from operating activities were mainly influenced by increased cash outflow due to increased investment in trading financial instruments, while increased cash inflow resulted from increased repurchase business funds[103](index=103&type=chunk) - Changes in net cash flow from financing activities were mainly due to a year-on-year decrease in cash received from bond issuance, leading to reduced cash inflow[104](index=104&type=chunk) [(III) Analysis of Assets and Liabilities](index=31&type=section&id=%28III%29%20Analysis%20of%20Assets%20and%20Liabilities) As of the end of June 2025, the Group's total assets were **RMB 53.444 billion**, an increase of **3.55%** from the beginning of the year; total liabilities were **RMB 38.995 billion**, an increase of **4.45%** from the beginning of the year. Asset quality and liquidity are good, and the asset structure is excellent Asset and Liability Status (Changes exceeding 30%) | Item Name | Current Period End (RMB) | % of Total Assets | Prior Year End (RMB) | % of Total Assets | Change from Prior Year End (%) | Explanation | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Settlement reserve | 2,762,998,770.48 | 5.17 | 4,531,325,343.18 | 8.78 | -39.02 | Decrease in client settlement funds at period end | | Derivative financial assets | 896,398.00 | 0.00 | 16,126,760.68 | 0.03 | -94.44 | Impact of changes in OTC options and income swaps at period end | | Accounts receivable | 181,350,303.92 | 0.34 | 331,013,831.49 | 0.64 | -45.21 | Decrease in receivables from equity disposal at period end | | Financial assets purchased under resale agreements | 875,784,920.54 | 1.64 | 1,445,001,679.44 | 2.80 | -39.39 | Decrease in bond pledge repurchase business scale at period end | | Other debt investments | 51,097,876.71 | 0.10 | 114,330,970.55 | 0.22 | -55.31 | Decrease in local government bond scale at period end | | Short-term borrowings | 0.00 | 0.00 | 7,008,341.66 | 0.01 | -100.00 | Decrease in guaranteed borrowings at period end | | Short-term financing payable | 2,616,169,129.14 | 4.90 | 3,896,489,565.69 | 7.55 | -32.86 | Maturity of some bonds at period end | | Funds borrowed | 2,960,539,577.52 | 5.54 | 3,962,603,712.35 | 7.68 | -25.29 | Decrease in re-lending funds borrowed at period end | | Trading financial liabilities | 1,160,660,111.95 | 2.17 | 578,887,667.66 | 1.12 | 100.50 | Increase in scale of bonds sold at period end | | Derivative financial liabilities | 0.00 | 0.00 | 1,996,580.00 | 0.00 | -100.00 | Impact of changes in exchange-traded options at period end | | Deferred income tax liabilities | 10,075,221.11 | 0.02 | 6,619,866.41 | 0.01 | 52.20 | Impact of changes in financial asset values at period end | | Other liabilities | 285,278,236.57 | 0.53 | 202,678,184.19 | 0.39 | 40.75 | Increase in dividends payable at period end | - As of the end of June 2025, the Group's total assets were **RMB 53.444 billion**, an increase of **3.55%** from **RMB 51.614 billion** at the beginning of the year. Asset quality and liquidity are good, and the asset structure is excellent[111](index=111&type=chunk) - As of the end of June 2025, the Group's total liabilities were **RMB 38.995 billion**, an increase of **4.45%** from **RMB 37.332 billion** at the beginning of the year. The asset-liability ratio, excluding client funds for securities trading and underwriting, was **59.69%**, a year-on-year increase of **0.34** percentage points[112](index=112&type=chunk) - Overseas assets were **RMB 792 million**, accounting for **1.48%** of total assets[112](index=112&type=chunk) [(IV) Analysis of Investment Status](index=34&type=section&id=%28IV%29%20Analysis%20of%20Investment%20Status) As of the end of the reporting period, the Group's long-term equity investments were **RMB 937 million**, an increase of **3.53%** from the end of last year, mainly due to increased investment income recognized under the equity method - As of the end of the reporting period, the Group's long-term equity investments were **RMB 937 million**, an increase of **RMB 32 million** or **3.53%** compared to the end of last year, mainly due to increased investment income recognized under the equity method during the current period[114](index=114&type=chunk) [(V) Analysis of Major Controlled and Investee Companies](index=35&type=section&id=%28V%29%20Analysis%20of%20Major%20Controlled%20and%20Investee%20Companies) This section lists the basic information and financial data of major controlled subsidiaries and investee companies whose impact on the company's net profit exceeds **10%**, and discloses the cancellation of subsidiaries during the reporting period Major Subsidiaries and Investee Companies Financial Data (Unit: billion RMB) | Company Name | Company Type | Main Business | Registered Capital (billion RMB) | Total Assets (billion RMB) | Net Assets (billion RMB) | Operating Revenue (billion RMB) | Operating Profit (billion RMB) | Net Profit (billion RMB) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Zhongyuan Futures Co., Ltd. | Subsidiary | Commodity futures brokerage, financial futures brokerage, futures trading consulting | 0.33 | 2.738 | 0.461 | 0.038 | 0.004 | 0.005 | | Zhongding Kaiyuan Venture Capital Management Co., Ltd. | Subsidiary | Private equity fund management, venture capital fund management services | 0.28 | 0.622 | 0.412 | 0.012 | 0.005 | 0.001 | | Zhongzhou Lan Hai Investment Management Co., Ltd. | Subsidiary | Financial product investment, securities investment, equity investment with own funds | 2.226 | 2.416 | 2.413 | 0.092 | 0.079 | 0.073 | | Zhongzhou International Financial Holdings Limited | Subsidiary | Securities brokerage, advisory on securities, margin financing, sponsorship and underwriting, financial advisory, proprietary investment, and other capital market services | HKD 1.80 billion | 0.792 | 0.439 | 0.009 | -0.003 | -0.003 | | Zhongyuan Equity Exchange Center Co., Ltd. | Subsidiary | Providing registration, custody, listing, transfer, and financing services for equity, debt, and other equity-type assets for enterprises; investment and asset management; financial advisory, enterprise promotion, enterprise display, training, and consulting services | 0.35 | 0.322 | 0.307 | 0.023 | 0.017 | 0.009 | | Henan Asset Management Co., Ltd. | Associate | Bulk acquisition of non-performing assets, equity investment, financial leasing, and private equity fund management, etc | 60 | 346.60 | 135.79 | 9.27 | 6.01 | 4.75 | - During the reporting period, Zhongzhou International Financial Group Co., Ltd. was canceled, with no impact on overall production and operation or performance[121](index=121&type=chunk) [(VI) Information on Structured Entities Controlled by the Company](index=36&type=section&id=%28VI%29%20Information%20on%20Structured%20Entities%20Controlled%20by%20the%20Company) As of June 30, 2025, the Group consolidated **5** structured entities, which were included in the consolidated financial statements because the company has control over them - As of June 30, 2025, the Group consolidated **5** structured entities[121](index=121&type=chunk) - For structured entities where the company acts as manager or investment advisor and holds product shares, the company considers factors such as its investment decision-making power, exposure to variable returns, and the ability to use investment decision-making power to affect variable returns, and includes structured entities over which it has control in the consolidated financial statements[121](index=121&type=chunk) [V. Other Disclosures](index=36&type=section&id=V.%20Other%20Disclosures) This section details the various risks faced by the company and its countermeasures, including market risk, credit risk, liquidity risk, operational risk, reputational risk, compliance risk, and information technology risk, and introduces the company's employees and remuneration policy [(I) Potential Risks](index=36&type=section&id=%28I%29%20Potential%20Risks) The company's overall risk management strategy is a prudent risk appetite, having established a comprehensive risk management organizational structure, institutional system, information technology system, and risk response mechanism to effectively identify, assess, monitor, and report various operating risks - The company's overall risk management strategy is a prudent risk appetite, adhering to the philosophy of matching capital, risk, and return, to achieve an optimal balance between business scale, profitability, and risk tolerance by assuming moderate risk[122](index=122&type=chunk) - The company has established a four-level risk management organizational structure: the Board of Directors and its Risk Control Committee, Audit Committee; the management; the risk management department; and various departments, branches, and subsidiaries[122](index=122&type=chunk) - The company has established a four-level risk management institutional system and continuously improves its risk management information technology system, using the risk management information technology system to measure, aggregate, warn, and monitor risks[128](index=128&type=chunk)[129](index=129&type=chunk) - The company faces major risks including market risk, credit risk, liquidity risk, operational risk, reputational risk, compliance risk, and information technology risk, and has formulated detailed countermeasures for each risk[130](index=130&type=chunk) [(II) Employees, Remuneration Policy, and Training](index=44&type=section&id=%28II%29%20Employees%2C%20Remuneration%20Policy%2C%20and%20Training) As of the end of the reporting period, the Group had a total of **2,434** employees. The company motivates employees through annual operating target responsibility statements and incentive and restraint mechanisms. Remuneration consists of basic salary, allowances, performance bonuses, and benefits, and an enterprise annuity plan has been established. The company continuously strengthens employee training - As of the end of the reporting period, the Group had **2,434** employees, including **2,143** employees of the company and **291** employees of subsidiaries[148](index=148&type=chunk) - The company's remuneration consists of basic salary, allowances, performance bonuses, and benefits, including basic endowment insurance, basic medical insurance, unemployment insurance, work-related injury insurance, maternity insurance, and housing provident fund, and an enterprise annuity plan has been established[148](index=148&type=chunk) - The company has developed targeted training programs for its cadres and employees and continuously strengthens training, having organized multiple specialized business training sessions in the first half of 2025[148](index=148&type=chunk) [Section IV Corporate Governance](index=45&type=section&id=Section%20IV%20Corporate%20Governance) This section discloses changes in the company's directors and senior management, the interim profit distribution plan, and the absence of any equity incentive plans [I. Changes in Company Directors and Senior Management](index=45&type=section&id=I.%20Changes%20in%20Company%20Directors%20and%20Senior%20Management) During the reporting period, there were changes in the company's Board Chairman, directors, and senior management (Executive Committee members, Chief Investment Officer, Deputy General Manager) - Ms. Zhang Qiuyun served as the company's Chairman of the Board from **April 29, 2025**[150](index=150&type=chunk) - Mr. Lu Zhili and Mr. Li Xingjia resigned as directors due to job transfers and reaching retirement age[150](index=150&type=chunk) - Mr. Li Wenqiang and Mr. Feng Ruofan were elected as directors of the company's Seventh Board of Directors[150](index=150&type=chunk) - Mr. Liu Hao resigned as Executive Committee Member and Chief Investment Officer due to personal job changes[150](index=150&type=chunk) - Mr. Wang Xiaogang resigned as Deputy General Manager and Executive Committee Member due to job changes[150](index=150&type=chunk) [II. Profit Distribution or Capital Reserve Conversion Plan](index=46&type=section&id=II.%20Profit%20Distribution%20or%20Capital%20Reserve%20Conversion%20Plan) The company's 2025 interim profit distribution plan, approved by the 36th meeting of the Seventh Board of Directors, proposes a cash dividend of **RMB 0.08** (including tax) per **10** shares Interim Profit Distribution Plan | Item | Value | | :--- | :--- | | Whether to Distribute or Convert | Yes | | Number of Bonus Shares per 10 Shares (shares) | 0.00 | | Dividend per 10 Shares (RMB (including tax)) | 0.08 | | Number of Capitalized Shares per 10 Shares (shares) | 0.00 | - The company plans to distribute a cash dividend of **RMB 37,143,077.60** (including tax), with no capital reserve conversion to share capital and no bonus shares[153](index=153&type=chunk) [III. Information and Impact of Company Equity Incentive Plans, Employee Stock Ownership Plans, or Other Employee Incentive Measures](index=46&type=section&id=III.%20Information%20and%20Impact%20of%20Company%20Equity%20Incentive%20Plans%2C%20Employee%20Stock%20Ownership%20Plans%2C%20or%20Other%20Employee%20Incentive%20Measures) The company has no equity incentive plans, employee stock ownership plans, or other employee incentive measures - The company has no equity incentive plans, employee stock ownership plans, or other employee incentive measures[154](index=154&type=chunk) [Section V Important Matters](index=47&type=section&id=Section%20V%20Important%20Matters) This section covers the company's fulfillment of important commitments, major litigation and arbitration, integrity status, significant related party transactions, and compliance with corporate governance codes [I. Fulfillment of Commitments](index=47&type=section&id=I.%20Fulfillment%20of%20Commitments) The company's actual controller, shareholders, and the company itself strictly fulfilled commitments made during or continuing into the reporting period, primarily concerning avoiding horizontal competition - Henan Investment Group and Zhongyuan Securities signed the "Agreement on Avoiding Horizontal Competition" on **March 10, 2014**, committing to strict long-term adherence[155](index=155&type=chunk) - The Company and Henan Investment Group signed the "Agreement on Avoiding Horizontal Competition" on **March 10, 2014**, committing to strict long-term adherence[155](index=155&type=chunk) [II. Major Litigation and Arbitration Matters](index=47&type=section&id=II.%20Major%20Litigation%20and%20Arbitration%20Matters) The company had no major litigation or arbitration matters during the reporting period - The company had no major litigation or arbitration matters during the reporting period[156](index=156&type=chunk) [III. Explanation of the Integrity Status of the Company, its Controlling Shareholder, and Actual Controller During the Reporting Period](index=47&type=section&id=III.%20Explanation%20of%20the%20Integrity%20Status%20of%20the%20Company%2C%20its%20Controlling%20Shareholder%2C%20and%20Actual%20Controller%20During%20the%20Reporting%20Period) The Group, its controlling shareholder, and actual controller had no unfulfilled effective court judgments, large overdue debts, or adverse integrity issues - The Group, its controlling shareholder, and actual controller had no unfulfilled effective court judgments, no large overdue debts, and no adverse integrity issues[157](index=157&type=chunk) [IV. Significant Related Party Transactions](index=48&type=section&id=IV.%20Significant%20Related%20Party%20Transactions) During the reporting period, the company strictly conducted daily related party transactions in accordance with framework agreements approved by the Board of Directors, primarily involving providing securities and financial services to Henan Investment Group and its subsidiaries, and securities and financial product transactions and services with the Equity Center Daily Related/Continuing Connected Transactions with Henan Investment Group and its Subsidiaries, Related Parties | Transaction Nature | Transaction Category | Estimated Upper Limit (RMB 10,000) | Actual Amount (RMB 10,000) | | :--- | :--- | :--- | :--- | | Securities and financial services | Income from providing securities and financial services to Investment Group | 2,349.12 | 31.97 | | Securities and financial services | Securities and financial service fees provided by Investment Group to the Group/Margin loans provided to Investment Group | 5,700.00 | 0 | Continuing Connected Transactions with Equity Center | Transaction Nature | Transaction Category | Estimated Upper Limit (RMB 10,000) | Actual Amount (RMB 10,000) | | :--- | :--- | :--- | :--- | | Securities and financial product transactions | Total net cash inflow to the Group | 9,000.00 | 4,500.00 | | Securities and financial product transactions | Total net cash outflow from the Group | 9,000.00 | 0 | | Securities and financial services | Income from providing securities and financial services to Equity Center | 5,214.00 | 10.80 | | Securities and financial services | Fees for providing securities and financial services to the Group | 605.00 | 0 | [V. Explanation of Other Significant Matters](index=49&type=section&id=V.%20Explanation%20of%20Other%20Significant%20Matters) The company is committed to maintaining a high level of corporate governance, complying with the "Corporate Governance Code" and "Model Code" during the reporting period, did not purchase, sell, or redeem its listed securities, and has reviewed the interim financial information - The company has adopted and complied with the provisions of Part 2 of Appendix C1 "Corporate Governance Code" of the "Hong Kong Listing Rules" and will continue to review and enhance its corporate governance practices[163](index=163&type=chunk) - The company has adopted the "Model Code" for directors' securities transactions, and all directors confirmed full compliance with the standards contained in the "Model Code" during the reporting period[164](index=164&type=chunk) - During the reporting period, neither the Company nor any of its subsidiaries purchased, sold, or repurchased any of the Company's listed securities[165](index=165&type=chunk) - The Audit Committee and company management have reviewed the interim financial information and believe that the consolidated financial reports were prepared in accordance with applicable accounting standards and regulations and that appropriate disclosures have been made[166](index=166&type=chunk) [Section VI Share Changes and Shareholder Information](index=50&type=section&id=Section%20VI%20Share%20Changes%20and%20Shareholder%20Information) This section discloses that the company's share capital remained unchanged during the reporting period, the total number of shareholders and the top ten shareholders' shareholdings as of the end of the period, and the interests and short positions of directors and chief executives, and major shareholders in the company's shares [I. Changes in Share Capital](index=50&type=section&id=I.%20Changes%20in%20Share%20Capital) During the reporting period, there were no changes in the company's total share capital and share capital structure - During the reporting period, there were no changes in the company's total share capital and share capital structure[170](index=170&type=chunk) [II. Shareholder Information](index=50&type=section&id=II.%20Shareholder%20Information) As of the end of the reporting period, the company had a total of **120,450** ordinary shareholders, and the shareholdings of the top ten shareholders and top ten shareholders with unrestricted shares are listed - As of the end of the reporting period, the total number of ordinary shareholders was **120,450**, including **120,416** A-share holders and **34** H-share registered holders[171](index=171&type=chunk) Top Ten Shareholders' Shareholdings (Number of Shares Held at Period End) | Shareholder Name (Full Name) | Number of Shares Held at Period End (shares) | Percentage (%) | Shareholder Nature | | :--- | :--- | :--- | :--- | | HKSCC Nominees Limited | 1,195,156,550 | 25.74 | Overseas Legal Person | | Henan Investment Group Co., Ltd. | 822,983,847 | 17.73 | State-owned Legal Person | | Jiangsu Suhao Holdings Group Co., Ltd. | 149,070,907 | 3.21 | State-owned Legal Person | | Anyang Iron & Steel Group Co., Ltd. | 131,085,215 | 2.82 | State-owned Legal Person | | China Pingmei Shenma Holding Group Co., Ltd. | 63,694,267 | 1.37 | State-owned Legal Person | | Zheng Yu | 50,000,090 | 1.08 | Domestic Natural Person | | Anyang Economic Development Group Co., Ltd. | 48,824,693 | 1.05 | State-owned Legal Person | | Henan Railway Construction Investment Group Co., Ltd. | 46,219,915 | 1.00 | State-owned Legal Person | | China Construction Bank Corporation — Cathay CSI All Share Securities Company ETF | 42,591,154 | 0.92 | Other | | Hong Kong Securities Clearing Company Limited | 34,683,367 | 0.75 | Overseas Legal Person | - Henan Investment Group Co., Ltd., in addition to directly holding the company's A-shares, also holds the company's H-shares through its wholly-owned subsidiary Dahe Paper (Hong Kong) Co., Ltd. and Stock Connect, holding a total of **1,023,556,847** shares, accounting for **22.05%** of the company's total issued shares[176](index=176&type=chunk) [III. Interests and Short Positions of Directors and Chief Executives in Shares, Related Shares, and Debentures of the Company and Associated Corporations](index=53&type=section&id=III.%20Interests%20and%20Short%20Positions%20of%20Directors%20and%20Chief%20Executives%20in%20Shares%2C%20Related%20Shares%2C%20and%20Debentures%20of%20the%20Company%20and%20Associated%20Corporations) As of the end of the reporting period, the company's directors and chief executives had no disclosable interests or short positions in the shares, related shares, or debentures of the company or its associated corporations - As of the end of the reporting period, the company's directors and chief executives had no interests or short positions in the shares, related shares, or debentures of the Company or any of its associated corporations that are required to be notified to the Company and the Hong Kong Stock Exchange[178](index=178&type=chunk) [IV. Interests and Short Positions of Major Shareholders and Other Persons in Shares and Related Shares](index=53&type=section&id=IV.%20Interests%20and%20Short%20Positions%20of%20Major%20Shareholders%20and%20Other%20Persons%20in%20Shares%20and%20Related%20Shares) As of the end of the reporting period, Henan Investment Group Co., Ltd., as a major shareholder, held long positions in the company's A-shares and H-shares Henan Investment Group Co., Ltd.'s Interests in Company Shares | Name | Share Class | Nature of Interest | Number of Shares Held (shares) | Percentage of Total Issued Shares (%) | Long/Short Position | | :--- | :--- | :--- | :--- | :--- | :--- | | Henan Investment Group | A-shares | Beneficial Owner | 822,983,847 | 17.726 | Long Position | | Henan Investment Group | H-shares | Beneficial Owner / Interest of a Corporation Controlled by a Substantial Shareholder | 200,573,000 | 4.320 | Long Position | - Henan Investment Group Co., Ltd. held a total of **1,023,556,847** shares in the company, accounting for **22.05%** of the company's total issued shares[179](index=179&type=chunk) [Section VII Bond-Related Information](index=54&type=section&id=Section%20VII%20Bond-Related%20Information) This section details the basic information, credit ratings, execution of debt repayment plans and guarantee measures, use of raised funds, and debt structure of the company's corporate bonds [I. Corporate Bonds (Including Enterprise Bonds) and Non-Financial Enterprise Debt Financing Instruments](index=54&type=section&id=I.%20Corporate%20Bonds%20%28Including%20Enterprise%20Bonds%29%20and%20Non-Financial%20Enterprise%20Debt%20Financing%20Instruments) This section lists the basic information of multiple corporate bonds and subordinated bonds issued by the company, including bond balance, interest rate, and principal and interest repayment methods, and states that credit ratings remained stable, and debt repayment plans and guarantee measures were executed normally Basic Information of Corporate Bonds (as of August 31, 2025) | Bond Name | Abbreviation | Code | Maturity Date | Bond Balance (billion RMB) | Interest Rate (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Zhongyuan Securities Co., Ltd. 2022 Publicly Issued Subordinated Bonds to Professional Institutional Investors (Tranche 1) (Type 1) | 22 Zhongyuan C1 | 137909.SH | October 17, 2025 | 5 | 3.30 | | Zhongyuan Securities Co., Ltd. 2023 Publicly Issued Corporate Bonds to Professional Investors (Tranche 1) | 23 Zhongyuan 01 | 115016.SH | March 13, 2026 | 10 | 3.68 | | Zhongyuan Securities Co., Ltd. 2023 Publicly Issued Subordinated Bonds to Professional Institutional Investors (Tranche 1) | 23 Zhongyuan C1 | 115809.SH | August 18, 2026 | 5 | 3.70 | | Zhongyuan Securities Co., Ltd. 2024 Publicly Issued Corporate Bonds to Professional Investors (Tranche 1) | 24 Zhongyuan 01 | 240528.SH | January 25, 2027 | 7 | 2.90 | | Zhongyuan Securities Co., Ltd. 2024 Publicly Issued Subordinated Bonds to Professional Institutional Investors (Tranche 1) | 24 Zhongyuan C1 | 240999.SH | June 4, 2027 | 10 | 2.44 | | Zhongyuan Securities Co., Ltd. 2024 Publicly Issued Corporate Bonds to Professional Investors (Tranche 2) | 24 Zhongyuan 02 | 241202.SH | July 4, 2027 | 20 | 2.22 | | Zhongyuan Securities Co., Ltd. 2025 Non-publicly Issued Corporate Bonds to Professional Investors (Tranche 1) | 25 Zhongyuan 01 | 258335.SH | April 25, 2028 | 20 | 2.35 | - Shanghai New Century Credit Rating Investment Services Co., Ltd. issued a follow-up rating report on **May 22, 2025**, maintaining the company's **AAA** corporate credit rating and **AA+** bond credit rating, with a stable outlook[186](index=186&type=chunk) - During the reporting period, there were no guarantees for the company's bonds, debt repayment plans and guarantee measures were executed normally, and there were no situations where bond principal and interest were expected to be unpaid on time or were not paid on time at maturity[187](index=187&type=chunk)[191](index=191&type=chunk) [(II) Use of Corporate Bond Proceeds](index=57&type=section&id=%28II%29%20Use%20of%20Corporate%20Bond%20Proceeds) This section discloses the basic information and use of corporate bond proceeds, where the **RMB 2 billion** proceeds from the "25 Zhongyuan 01" bond have been fully used to replace the company's own funds used to repay the principal of the matured "22 Zhongyuan 01" corporate bond, consistent with the stated use in the prospectus Corporate Bond Proceeds Information | Bond Code | Bond Abbreviation | Total Proceeds (billion RMB) | Balance of Proceeds at End of Reporting Period (billion RMB) | | :--- | :--- | :--- | :--- | | 258335.SH | 25 Zhongyuan 01 | 20 | 0 | - The **RMB 2 billion** proceeds from the "25 Zhongyuan 01" bond were entirely used to replace the company's own funds used to repay the principal of the matured "22 Zhongyuan 01" corporate bond[196](index=196&type=chunk)[197](index=197&type=chunk) - The actual use of proceeds is consistent with the stated use in the prospectus, and the special account for proceeds is managed compliantly, in line with local government debt management regulations[199](index=199&type=chunk) [(III) Important Matters Related to Corporate Bonds During the Reporting Period](index=58&type=section&id=%28III%29%20Important%20Matters%20Related%20to%20Corporate%20Bonds%20During%20the%20Reporting%20Period) During the reporting period, the company had no non-operating intercompany receivables or fund borrowings. The company's and consolidated interest-bearing debt balance and structure remained stable, with all indicators meeting regulatory requirements - During the reporting period, the company had no non-operating intercompany receivables or fund borrowings[200](index=200&type=chunk)[201](index=201&type=chunk) - The company's (non-consolidated scope) interest-bearing debt balance was **RMB 19.215 billion**, with a year-on-year change of **3.13%** during the reporting period[205](index=205&type=chunk) - The company's (consolidated scope) interest-bearing debt balance was **RMB 19.180 billion**, with a year-on-year change of **-0.46%** during the reporting period[209](index=209&type=chunk) - As of the end of the reporting period, the outstanding corporate credit bonds included **RMB 7.80 billion** in corporate bonds[207](index=207&type=chunk)[211](index=211&type=chunk) [(IV) Key Accounting Data and Financial Indicators](index=61&type=section&id=%28IV%29%20Key%20Accounting%20Data%20and%20Financial%20Indicators) This section summarizes the company's key financial indicators as of the end of the current reporting period and for the current reporting period, including current ratio, asset-liability ratio, net profit, interest coverage ratio, etc., and explains the reasons for changes in some indicators Key Financial Indicators | Key Indicator | End of Current Reporting Period/Current Reporting Period (Jan–Jun) | End of Last Year/Same Period Last Year | Change (%) | | :--- | :--- | :--- | :--- | | Current Ratio | 2.24 | 2.16 | 3.70 | | Quick Ratio | 2.24 | 2.16 | 3.70 | | Asset-Liability Ratio (%) | 59.69 | 59.35 | 0.57 | | Net Profit After Deducting Non-recurring Gains and Losses (RMB) | 253,221,986.63 | 197,291,564.12 | 28.35 | | EBITDA to Total Debt Ratio | 2.87 | 2.32 | 23.71 | | Interest Coverage Ratio | 2.30 | 1.72 | 33.72 | | Cash Interest Coverage Ratio | 7.88 | 8.35 | 8.14 | | EBITDA Interest Coverage Ratio | 2.59 | 1.93 | 34.20 | | Loan Repayment Rate (%) | 100.00 | 100.00 | 0.00 | | Interest Payment Rate (%) | 100.00 | 100.00 | 0.00 | - The increase in interest coverage ratio and EBITDA interest coverage ratio was mainly due to the increase in total profit and EBITDA during the current reporting period[214](index=214&type=chunk) [Section VIII Review Report on Interim Financial Information](index=61&type=section&id=Section%20VIII%20Review%20Report%20on%20Interim%20Financial%20Information) This section includes the accounting firm's review opinion on the interim financial report, as well as detailed consolidated and parent company financial statements and notes [Review Report](index=62&type=section&id=Review%20Report) Shinewing Certified Public Accountants (Special General Partnership) issued a review report on Zhongyuan Securities' interim financial statements for January-June 2025, noting no matters that would lead them to believe the financial statements were not prepared in all material respects in accordance with enterprise accounting standards - Shinewing Certified Public Accountants (Special General Partnership) performed the review engagement in accordance with "China Review Standard No. 2101 — Review of Financial Statements"[216](index=216&type=chunk) - Review Opinion: We have not noted any matters that lead us to believe that the financial statements were not prepared in all material respects in accordance with the provisions of enterprise accounting standards, and failed to fairly reflect Zhongyuan Securities Co., Ltd.'s financial position as of June 30, 2025, and its operating results and cash flows for the period from January to June 2025[216](index=216&type=chunk) [Consolidated Balance Sheet](index=63&type=section&id=Consolidated%20Balance%20Sheet) As of June 30, 2025, consolidated total assets were **RMB 53.444 billion**, total liabilities were **RMB 38.995 billion**, and total equity attributable to parent company shareholders was **RMB 14.230 billion** Major Consolidated Balance Sheet Data | Item | June 30, 2025 (RMB) | December 31, 2024 (RMB) | | :--- | :--- | :--- | | Total Assets | 53,444,217,894.41 | 51,614,348,080.07 | | Total Liabilities | 38,994,629,559.20 | 37,331,529,726.77 | | Total Equity Attributable to Parent Company Shareholders | 14,229,724,178.52 | 14,060,235,023.57 | [Consolidated Income Statement](index=65&type=section&id=Consolidated%20Income%20Statement) For January-June 2025, consolidated total operating revenue was **RMB 921 million**, net profit was **RMB 259 million**, and net profit attributable to parent company owners was **RMB 260 million** Major Consolidated Income Statement Data | Item | Jan–Jun 2025 (RMB) | Jan–Jun 2024 (RMB) | | :--- | :--- | :--- | | Total Operating Revenue | 921,354,746.21 | 1,198,670,567.05 | | Total Operating Expenses | 628,139,701.92 | 983,880,443.99 | | Total Profit | 292,765,454.14 | 214,647,671.11 | | Net Profit | 259,140,813.03 | 179,401,440.76 | | Net Profit Attributable to Parent Company Owners | 260,308,365.67 | 201,265,120.05 | | Basic Earnings Per Share (RMB/share) | 0.0561 | 0.0433 | [Consolidated Cash Flow Statement](index=67&type=section&id=Consolidated%20Cash%20Flow%20Statement) For January-June 2025, consolidated net cash flow from operating activities was **RMB 628 million**, net cash flow from investing activities was **RMB 143 million**, and net cash flow from financing activities was **RMB -953 million** Major Consolidated Cash Flow Statement Data | Item | Jan–Jun 2025 (RMB) | Jan–Jun 2024 (RMB) | | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | 627,914,417.23 | 856,846,780.21 | | Net Cash Flow from Investing Activities | 143,468,509.10 | 127,267,936.50 | | Net Cash Flow from Financing Activities | -952,614,220.02 | -400,958,659.73 | | Net Increase in Cash and Cash Equivalents | -179,025,323.59 | 582,988,724.16 | [Consolidated Statement of Changes in Shareholders' Equity](index=69&type=section&id=Consolidated%20Statement%20of%20Changes%20in%20Shareholders%27%20Equity) For January-June 2025, total equity attributable to parent company shareholders increased by **RMB 169 million**, mainly due to increased net profit and profit distribution - For January-June 2025, total equity attributable to parent company shareholders increased by **RMB 169,489,154.95**[228](index=228&type=chunk) - Total comprehensive income was **RMB 247,250,642.21**[228](index=228&type=chunk) - Profit distribution led to a decrease of **RMB 78,929,039.90** in equity attributable to parent company shareholders[228](index=228&type=chunk) [Parent Company Financial Statements](index=71&type=section&id=Parent%20Company%20Financial%20Statements) This section provides the parent company's balance sheet, income statement, cash flow statement, and statement of changes in shareholders' equity, reflecting the parent company's independent financial position and operating results Major Parent Company Balance Sheet Data (as of June 30, 2025) | Item | June 30, 2025 (RMB) | December 31, 2024 (RMB) | | :--- | :--- | :--- | | Total Assets | 50,903,201,892.21 | 48,632,915,468.30 | | Total Liabilities | 36,246,964,976.64 | 34,095,525,623.52 | | Total Shareholders' Equity | 14,656,236,915.57 | 14,537,389,844.78 | Major Parent Company Income Statement Data (January-June 2025) | Item | Jan–Jun 2025 (RMB) | Jan–Jun 2024 (RMB) | | :--- | :--- | :--- | | Total Operating Revenue | 781,864,537.92 | 986,132,109.49 | | Total Profit | 225,327,716.80 | 355,298,481.30 | | Net Profit | 203,005,548.19 | 309,678,451.34 | Major Parent Company Cash Flow Statement Data (January-June 2025) | Item | Jan–Jun 2025 (RMB) | Jan–Jun 2024 (RMB) | | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | 527,340,255.24 | 401,627,612.83 | | Net Cash Flow from Investing Activities | 208,033,534.24 | 203,399,449.18 | | Net Cash Flow from Financing Activities | -270,197,735.81 | -391,374,555.25 | [Notes to Financial Statements](index=77&type=section&id=Notes%20to%20Financial%20Statements) This section provides detailed notes to the financial statements, including the company's basic information, scope of consolidated financial statements, basis of financial statement preparation, significant accounting policies and estimates, taxes, notes to major items in consolidated financial statements, changes in con

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告之內容概不負 責，對 其 準 確 性 或 完 整 性 亦 不 發 表 任 何 聲 明，並 明 確 表 示 概 不 就 因 本 公 告 全 部 或任何部分內容而產生或因倚賴該等內容而引致之任何損失承擔任何責任。 截至二零二五年六月三十日止六個月之 未經審核中期業績公告 廣 泰 國 際 控 股 有 限 公 司（「本公司」）董 事（「董 事」）會（「董事會」）欣 然 宣 佈 本 公 司 及 其 附 屬 公 司（統 稱「本集團」）截 至 二 零 二 五 年 六 月 三 十 日 止 六 個 月 之 未 經 審 核 簡 明 綜 合 業 績，連 同 二 零 二 四 年 同 期 之 比 較 數 字，乃 根 據 香 港 財 務 報 告 準 則 編 製 如下： – 1 – 簡明綜合損益及其他全面收益表 GREATIME INTERNATIONAL HOLDINGS LIMITED 截至二零二五年六月三十日止六個月 廣泰國際控股有限公司 | 截至六月三十日止六個月 | 二零二五年 | 二零二四年 | | | | | | | | | --- | --- | --- | --- ...

GEM Features and Report Responsibility Statement This section outlines the characteristics of the GEM market and the company's responsibility for the report's accuracy and completeness [GEM Market Features](index=2&type=section&id=GEM%20Features) The GEM market offers a listing platform for SMEs, characterized by higher investment risks, potential for significant market volatility, and unassured liquidity - The GEM market is positioned as a listing platform for small and medium-sized companies, entailing **higher investment risks**[2](index=2&type=chunk) - GEM securities may experience **significant market volatility**, and **high liquidity cannot be guaranteed**[2](index=2&type=chunk) [Report Responsibility Statement](index=2&type=section&id=Report%20Responsibility) HKEX and the Stock Exchange disclaim responsibility for this report, while the company's directors collectively affirm its accuracy and completeness - Hong Kong Exchanges and Clearing Limited and the Stock Exchange bear **no responsibility** for the contents of this report[2](index=2&type=chunk) - The Company's directors confirm the report's information is **accurate, complete, and free from misleading or fraudulent content**, assuming full responsibility[2](index=2&type=chunk) [Language Version Note](index=2&type=section&id=Language%20Note) The report was originally prepared in English, with the Chinese version being a translation, and the English version prevails in case of discrepancies - The original report was prepared in English, with the Chinese version being a translation[3](index=3&type=chunk) - In case of any inconsistency between the Chinese and English versions, the **English version shall prevail**[3](index=3&type=chunk) Financial Highlights Summary This section provides a concise overview of the Group's key financial performance for the period, including revenue, loss, and earnings per share [Key Financial Performance](index=3&type=section&id=Key%20Financial%20Performance) For the six months ended June 30, 2025, the Group's revenue grew by 44.9% to S$7.1 million, with a significant reduction in loss to S$0.2 million Key Financial Performance (S$ thousand) | Metric | Six Months Ended June 30, 2025 (S$ thousand) | Six Months Ended June 30, 2024 (S$ thousand) | Change (S$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Revenue | 7,100 | 4,900 | 2,200 | 44.9% | | Loss | (200) | (1,600) | 1,400 | -87.5% | | Basic Loss Per Share (Singapore cents) | (0.02) | (0.23) | 0.21 | -91.3% | - The Board does **not recommend** the payment of a dividend for the six months ended June 30, 2025[4](index=4&type=chunk) Interim Condensed Consolidated Financial Statements This section presents the Group's unaudited interim financial statements, including comprehensive income, financial position, equity changes, and cash flows [Interim Condensed Consolidated Statement of Comprehensive Income](index=4&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) For the six months ended June 30, 2025, the Group saw significant revenue growth, a shift from gross loss to profit, and a substantial reduction in operating and period losses Interim Condensed Consolidated Statement of Comprehensive Income (S$ thousand) | Metric | 2025 (S$ thousand) | 2024 (S$ thousand) | Change (S$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Revenue | 7,060 | 4,869 | 2,191 | 44.99% | | Cost of sales | (5,517) | (4,987) | (530) | 10.63% | | Gross profit/(loss) | 1,543 | (118) | 1,661 | -1407.63% | | Operating loss | (128) | (1,486) | 1,358 | -91.39% | | Loss for the period | (192) | (1,581) | 1,389 | -87.86% | | Basic and diluted loss per share (Singapore cents) | (0.02) | (0.23) | 0.21 | -91.30% | - Other income **increased from S$50 thousand in 2024 to S$175 thousand in 2025**[6](index=6&type=chunk) - Exchange differences on translation of foreign operations resulted in **other comprehensive loss of S$11 thousand in 2025**[6](index=6&type=chunk) [Interim Condensed Consolidated Statement of Financial Position](index=5&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the Group's total assets slightly decreased, primarily due to reductions in non-current assets and cash, with both total equity and liabilities also declining Interim Condensed Consolidated Statement of Financial Position (S$ thousand) | Metric | June 30, 2025 (S$ thousand) | December 31, 2024 (S$ thousand) | Change (S$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Total assets | 8,341 | 8,753 | (412) | -4.71% | | Non-current assets | 1,683 | 2,262 | (579) | -25.59% | | Current assets | 6,658 | 6,491 | 167 | 2.57% | | Total equity | 1,923 | 2,126 | (203) | -9.55% | | Total liabilities | 6,418 | 6,627 | (209) | -3.15% | - Cash and cash equivalents **decreased from S$1,779 thousand as of December 31, 2024, to S$759 thousand as of June 30, 2025**[8](index=8&type=chunk) - Trade and other receivables **increased from S$4,132 thousand to S$4,992 thousand**[8](index=8&type=chunk) [Interim Condensed Consolidated Statement of Changes in Equity](index=7&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) For the six months ended June 30, 2025, equity attributable to the company's owners decreased due to the loss for the period and exchange differences from foreign operations translation Interim Condensed Consolidated Statement of Changes in Equity (S$ thousand) | Metric | January 1, 2025 (S$ thousand) | June 30, 2025 (S$ thousand) | Change (S$ thousand) | | :--- | :--- | :--- | :--- | | Equity attributable to owners of the Company | 2,141 | 1,938 | (203) | | Loss for the period | - | (192) | (192) | | Exchange differences on translation of foreign operations | - | (11) | (11) | - Share capital, share premium, capital reserve, and other reserves **remained unchanged** during the period[11](index=11&type=chunk) [Unaudited Condensed Consolidated Cash Flow Statement](index=8&type=section&id=Unaudited%20Condensed%20Consolidated%20Cash%20Flow%20Statement) For the six months ended June 30, 2025, net cash used in operating activities increased, cash outflow from investing activities decreased, and financing activities shifted to net outflow, resulting in a net decrease in cash and cash equivalents Unaudited Condensed Consolidated Cash Flow Statement (S$ thousand) | Metric | 2025 (S$ thousand) | 2024 (S$ thousand) | Change (S$ thousand) | | :--- | :--- | :--- | :--- | | Net cash used in operating activities | (792) | (683) | (109) | | Net cash used in investing activities | (18) | (227) | 209 | | Net cash (used in)/generated from financing activities | (210) | 466 | (676) | | Net decrease in cash and cash equivalents | (1,020) | (444) | (576) | | Cash and cash equivalents at end of period | 759 | 1,154 | (395) | - The increase in net cash used in operating activities was primarily influenced by **changes in working capital**, particularly the increase in trade and other receivables[14](index=14&type=chunk) - Cash outflow from financing activities was mainly due to **repayment of borrowings and principal portions of lease liabilities**[15](index=15&type=chunk) Notes to the Interim Condensed Consolidated Financial Statements This section provides detailed notes explaining the accounting policies, estimates, financial risks, and specific line items within the interim condensed consolidated financial statements [Company Information](index=10&type=section&id=Company%20Information) The company, incorporated in the Cayman Islands as an investment holding company, operates in Singapore (medical device components) and China (big data solutions) - The Company was incorporated as an exempted company in the Cayman Islands on **July 17, 2017**[16](index=16&type=chunk) - Principal activities include manufacturing and mold fabrication services for medical device injection molded components in Singapore, and big data solutions and services in China[16](index=16&type=chunk) [Basis of Preparation](index=10&type=section&id=Basis%20of%20Preparation) The interim condensed consolidated financial statements are prepared using consistent accounting policies with the 2024 annual financial statements and are presented in S$ thousand - Accounting policies are **consistent with the 2024 annual consolidated financial statements**[17](index=17&type=chunk) - The financial statements are presented in **S$ thousand**[18](index=18&type=chunk) [New and Revised Standards Adopted](index=10&type=section&id=New%20and%20Revised%20Standards%20Adopted) The Group has adopted new and revised standards effective January 1, 2025, including amendments to IAS 21 regarding lack of exchangeability - The Group has adopted and applied **IAS 21 (Amendment) Lack of Exchangeability**, effective January 1, 2025[20](index=20&type=chunk) [Estimates](index=11&type=section&id=Estimates) The preparation of interim condensed consolidated financial statements involves management judgments, estimates, and assumptions, with key uncertainties consistent with the 2024 annual financial statements - Significant management judgments and sources of estimation uncertainty in preparing the financial statements are **consistent with the 2024 annual consolidated financial statements**[20](index=20&type=chunk) [Financial Risk Management](index=12&type=section&id=Financial%20Risk%20Management) The Group faces market (foreign currency and interest rate), credit, and liquidity risks, with no changes in risk management policies since December 31, 2024 - The Group is exposed to **market risks (foreign currency risk and interest rate risk), credit risk, and liquidity risk**[21](index=21&type=chunk) - Risk management policies have **not changed since December 31, 2024**[22](index=22&type=chunk) [Revenue and Segment Information](index=12&type=section&id=Revenue%20and%20Segment%20Information) The Group allocates resources and assesses performance based on business segments (components, sub-assembly parts, data solutions), with all segments showing revenue growth in H1 2025, including new contributions from data solutions - The Group's reportable business segments include **components, sub-assembly parts, and data solutions and services**[25](index=25&type=chunk) Segment Revenue and Gross Profit (S$ thousand) | Segment | 2025 Revenue | 2024 Revenue | 2025 Gross Profit | 2024 Gross Profit/(Loss) | | :--- | :--- | :--- | :--- | :--- | | Components | 4,550 | 4,037 | 1,019 | 36 | | Sub-assembly parts | 2,169 | 832 | 485 | (154) | | Data solutions and services | 341 | – | 39 | – | | Total | 7,060 | 4,869 | 1,543 | (118) | - In H1 2025, revenue from **sales of goods was S$6,594 thousand**, **sales of services was S$341 thousand**, and **mold fabrication services was S$125 thousand**[29](index=29&type=chunk) [Other Income](index=15&type=section&id=Other%20Income) For the six months ended June 30, 2025, the Group's other income significantly increased, primarily driven by higher scrap sales Other Income (S$ thousand) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Government grants | 21 | 27 | | Scrap sales | 154 | 23 | | Total | 175 | 50 | - Scrap sales revenue **significantly increased from S$23 thousand in 2024 to S$154 thousand in 2025**[32](index=32&type=chunk) [Expenses by Nature](index=16&type=section&id=Expenses%20by%20Nature) For the six months ended June 30, 2025, the Group's total expenses increased, mainly due to higher cost of inventories sold and legal and professional fees, while employee benefit expenses slightly decreased Key Expense Items (S$ thousand) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Cost of inventories sold | 3,283 | 2,404 | | Employee benefit expenses | 1,861 | 1,919 | | Depreciation of property, plant and equipment | 113 | 191 | | Depreciation of right-of-use assets | 482 | 757 | | Legal and professional fees | 430 | 185 | | Total expenses | 7,261 | 6,475 | - Legal and professional fees **significantly increased from S$185 thousand in 2024 to S$430 thousand in 2025**[34](index=34&type=chunk) - Employee benefit expenses **slightly decreased from S$1,919 thousand to S$1,861 thousand**[34](index=34&type=chunk)[35](index=35&type=chunk) [Employee Benefit Expenses](index=17&type=section&id=Employee%20Benefit%20Expenses) For the six months ended June 30, 2025, total employee benefit expenses slightly decreased, primarily due to a reduction in wages, salaries, and emoluments Employee Benefit Expenses (S$ thousand) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Wages, salaries, emoluments, bonuses and allowances | 1,437 | 1,476 | | Incentives | 202 | 186 | | Retirement benefit costs | 94 | 115 | | Others | 128 | 142 | | Total | 1,861 | 1,919 | [Directors' Emoluments](index=17&type=section&id=Directors'%20Emoluments) For the six months ended June 30, 2025, total directors' emoluments slightly increased, mainly due to higher fees Directors' Emoluments (S$ thousand) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Fees | 76 | 64 | | Salaries, allowances and benefits in kind | 120 | 120 | | Retirement benefit costs | 4 | 4 | | Total | 200 | 188 | - Mr. Leong Kian Yew **retired as an independent non-executive Director on May 23, 2025**[38](index=38&type=chunk) [Finance Costs](index=18&type=section&id=Finance%20Costs) For the six months ended June 30, 2025, the Group's finance costs decreased, primarily due to a reduction in interest expense on lease liabilities Finance Costs (S$ thousand) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Interest expense on lease liabilities | 39 | 75 | | Interest expense on bank borrowings | 25 | 13 | | Interest expense on trust receipt loans | – | 7 | | Total | 64 | 95 | - Interest expense on lease liabilities **decreased from S$75 thousand in 2024 to S$39 thousand in 2025**[41](index=41&type=chunk) [Income Tax Expense](index=18&type=section&id=Income%20Tax%20Expense) For the six months ended June 30, 2025, the Group incurred no income tax expense, with varying corporate tax rates across jurisdictions and no withholding tax provided for China Income Tax Expense (S$ thousand) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Current income tax expense | – | – | | Total income tax expense | – | – | - Singapore corporate income tax rate is **17%**, and China corporate income tax rate is **25%**[44](index=44&type=chunk)[48](index=48&type=chunk) - No provision for profits tax was made for the Cayman Islands, British Virgin Islands, and Hong Kong, and **no China withholding income tax was provided** as Chinese subsidiaries are not expected to distribute retained earnings in the foreseeable future[45](index=45&type=chunk)[46](index=46&type=chunk)[47](index=47&type=chunk)[49](index=49&type=chunk) [Loss Per Share](index=20&type=section&id=Loss%20Per%20Share) For the six months ended June 30, 2025, the Group's basic loss per share significantly narrowed, with diluted loss per share being identical due to no potential ordinary shares Loss Per Share (Singapore cents) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Loss for the period attributable to owners of the Company (S$ thousand) | (192) | (1,581) | | Weighted average number of ordinary shares in issue (thousand shares) | 818,455 | 682,046 | | Basic and diluted loss per share (Singapore cents) | (0.02) | (0.23) | - Basic loss per share **significantly decreased from 0.23 Singapore cents in 2024 to 0.02 Singapore cents in 2025**[51](index=51&type=chunk) - Diluted loss per share is **identical to basic loss per share** as there were no potential ordinary shares in issue during the period[53](index=53&type=chunk) [Property, Plant and Equipment](index=21&type=section&id=Property%2C%20Plant%20and%20Equipment) As of June 30, 2025, the Group's net book value of property, plant and equipment decreased, primarily due to depreciation and write-offs Net Book Value of Property, Plant and Equipment (S$ thousand) | Item | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :--- | :--- | :--- | | Net book value | 328 | 425 | | Additions during the period | 18 | 255 | | Depreciation during the period | (113) | (333) | | Write-offs during the period | (2) | (2) | - The net book value of property, plant and equipment **decreased from S$425 thousand as of December 31, 2024, to S$328 thousand as of June 30, 2025**[54](index=54&type=chunk) [Right-of-Use Assets and Lease Liabilities](index=22&type=section&id=Right-of-Use%20Assets%20and%20Lease%20Liabilities) As of June 30, 2025, both the Group's right-of-use assets and lease liabilities significantly decreased, reflecting changes in leasing activities and depreciation impact Right-of-Use Assets and Lease Liabilities (S$ thousand) | Item | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :--- | :--- | :--- | | Right-of-use assets | 176 | 658 | | Lease liabilities | 1,196 | 1,867 | | Depreciation expense of right-of-use assets (six months) | 482 | 757 | | Total cash outflow for leases (six months) | 710 | 820 | - Depreciation expense of right-of-use assets **decreased from S$757 thousand in 2024 to S$482 thousand in 2025**[56](index=56&type=chunk) - The Group leases office properties, factories, motor vehicles, and photocopiers, with fixed lease terms typically ranging from **three to five years**, and **no variable lease payments or residual value guarantees**[57](index=57&type=chunk)[58](index=58&type=chunk)[59](index=59&type=chunk) [Trade and Other Receivables](index=24&type=section&id=Trade%20and%20Other%20Receivables) As of June 30, 2025, the Group's total trade and other receivables increased, mainly driven by higher trade receivables, with credit terms typically 30 to 90 days and no impairment provision Trade and Other Receivables (S$ thousand) | Item | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :--- | :--- | :--- | | Trade receivables | 3,729 | 2,707 | | Other receivables | 417 | 440 | | Prepayments | 250 | 393 | | Deposits paid | 596 | 592 | | Total | 4,992 | 4,132 | - Trade receivables **increased from S$2,707 thousand as of December 31, 2024, to S$3,729 thousand as of June 30, 2025**[60](index=60&type=chunk) Trade Receivables by Currency and Ageing (S$ thousand) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **By Currency** | | | | SGD | 1,616 | 2,124 | | USD | 2,095 | 583 | | RMB | 18 | – | | **By Ageing** | | | | 1 to 30 days | 2,404 | 1,828 | | 31 to 60 days | 1,212 | 829 | | 61 to 90 days | 113 | 50 | - The Group generally grants credit terms of **30 to 90 days** to customers, and **no loss allowance was recognized** for trade receivables and contract assets as of the reporting date[61](index=61&type=chunk)[62](index=62&type=chunk)[64](index=64&type=chunk) [Share Capital and Share Premium](index=28&type=section&id=Share%20Capital%20and%20Share%20Premium) As of June 30, 2025, the company's issued and fully paid share capital and share premium remained unchanged, with a total of 818,455,377 shares Share Capital and Share Premium (S$ thousand) | Item | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :--- | :--- | :--- | | Number of ordinary shares | 818,455,377 | 818,455,377 | | Share capital | 1,412 | 1,412 | | Share premium | 20,516 | 20,516 | - On July 29, 2024, the Company issued **136,409,229 new shares**, generating **S$1,690 thousand in proceeds**[65](index=65&type=chunk) [Trade and Other Payables](index=29&type=section&id=Trade%20and%20Other%20Payables) As of June 30, 2025, the Group's total trade and other payables were largely consistent with December 31, 2024, with a slight decrease in trade payables Trade and Other Payables (S$ thousand) | Item | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :--- | :--- | :--- | | Trade payables | 1,035 | 1,055 | | Other payables and accrued expenses | 356 | 333 | | Total | 1,391 | 1,388 | Trade Payables by Ageing and Currency (S$ thousand) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **By Ageing** | | | | 1 to 30 days | 521 | 425 | | 31 to 60 days | 277 | 327 | | 61 to 90 days | 237 | 184 | | Over 90 days | – | 119 | | **By Currency** | | | | USD | 468 | 367 | | SGD | 564 | 688 | | RMB | 3 | – | - The carrying amounts of trade payables **approximate their fair values**[69](index=69&type=chunk) [Related Party Transactions](index=31&type=section&id=Related%20Party%20Transactions) The Group has related party relationships with Mr. Poon Sui Ho and Ms. Xu Bin, with disclosed key management emoluments and unsecured borrowings at 0% to 4.80% annual interest - Mr. Poon Sui Ho is a **major shareholder and executive Director**, and Ms. Xu Bin is an **executive Director**[71](index=71&type=chunk) - Key management emoluments are **disclosed in Note 8(b)**[72](index=72&type=chunk) - Related party borrowings are **unsecured**, with annual interest rates ranging from **0% to 4.80%**, and repayment dates are one year and extendable[73](index=73&type=chunk) [Significant Acquisitions and Disposals](index=31&type=section&id=Significant%20Acquisitions%20and%20Disposals) For the six months ended June 30, 2025, the Group did not undertake any significant acquisitions or disposals of subsidiaries - The Group did **not undertake any significant acquisitions or disposals of subsidiaries** during the period[74](index=74&type=chunk) Management Discussion and Analysis This section provides management's perspective on the Group's operational and financial performance, future outlook, liquidity, and capital structure [Business Review](index=32&type=section&id=Business%20Review) The Group, engaged in medical device component manufacturing and big data solutions, achieved 44.9% revenue growth and significantly narrowed net loss in H1 2025, driven by increased medical device component orders - The Group's principal activities are manufacturing and selling injection molded plastic components for disposable medical devices, providing mold fabrication services, and offering big data solutions, technical support, and data services in China[76](index=76&type=chunk) Business Performance Overview (S$ thousand) | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change (S$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Revenue | 7,100 | 4,900 | 2,200 | 44.9% | | Net loss | (200) | (1,600) | 1,400 | -87.5% | - The reduction in loss for the period was primarily due to **increased sales orders for injection molded plastic components for disposable medical devices**[76](index=76&type=chunk) [Prospects](index=32&type=section&id=Prospects) Facing a subdued global economic recovery and heightened financial market risk aversion, the Group will prudently manage costs, growth, and risks, leveraging its expertise for sustainable diversification - Global economic recovery is **weaker than expected**, with **heightened risk aversion in financial markets**, leading to an uncertain outlook[77](index=77&type=chunk) - The Group will continue to **prudently manage operating costs, business growth, and the risk profile of its business portfolio**[77](index=77&type=chunk) - The Group believes that **diversification of business segments can promote sustainable development**, and will take timely and appropriate actions to mitigate operational risks and maximize resource utilization[77](index=77&type=chunk) [Financial Review](index=33&type=section&id=Financial%20Review) For the six months ended June 30, 2025, the Group experienced significant growth in revenue, gross profit, and gross margin, with a substantial reduction in loss, despite an increase in administrative expenses [Revenue](index=33&type=section&id=Revenue_FR) The Group's revenue increased by 44.9% year-on-year, driven by higher sales orders for disposable medical device components in Singapore and contributions from big data solutions in China Revenue (S$ thousand) | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change (S$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Revenue | 7,100 | 4,900 | 2,200 | 44.9% | - The increase in revenue was primarily attributable to **increased sales orders for injection molded plastic components for disposable medical devices in Singapore** and the provision of **big data solutions and services in China**[78](index=78&type=chunk) [Cost of Sales](index=33&type=section&id=Cost%20of%20Sales) The Group's cost of sales increased by 10.0% year-on-year, consistent with the growth in revenue Cost of Sales (S$ thousand) | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change (S$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Cost of sales | 5,500 | 5,000 | 500 | 10.0% | - The increase in cost of sales was **consistent with the increase in revenue**[79](index=79&type=chunk) [Gross Profit and Gross Margin](index=33&type=section&id=Gross%20Profit%20and%20Gross%20Margin) The Group's overall gross profit shifted from a loss to a profit, with a significant improvement in gross margin, mainly due to increased revenue from medical device components and big data solutions Gross Profit and Gross Margin (S$ thousand) | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change (S$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Gross profit/(loss) | 1,500 | (100) | 1,600 | -1600.0% | | Gross margin | 21.9% | 2.4% | 19.5% | 812.5% | - The increase in gross profit and gross margin was primarily due to **increased revenue from injection molded plastic components for disposable medical devices and the provision of big data solutions and services**[80](index=80&type=chunk) [Administrative Expenses](index=33&type=section&id=Administrative%20Expenses) The Group's administrative expenses increased by 30.8% year-on-year, mainly due to higher legal and professional fees incurred for business development Administrative Expenses (S$ thousand) | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change (S$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Administrative expenses | 1,700 | 1,300 | 400 | 30.8% | - The increase in administrative expenses was primarily due to **higher legal and professional fees incurred for business development**[82](index=82&type=chunk) [Loss for the Period](index=34&type=section&id=Loss%20for%20the%20Period) The Group's loss for the period significantly narrowed, primarily attributable to revenue growth and improved gross profit Loss for the Period (S$ thousand) | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change (S$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Loss for the period | (200) | (1,600) | 1,400 | -87.5% | - The reduction in loss for the current period was primarily attributable to **increased revenue and improved gross profit**[83](index=83&type=chunk) [Liquidity, Financial Resources and Capital Structure](index=34&type=section&id=Liquidity%2C%20Financial%20Resources%20and%20Capital%20Structure) The Group's liquidity ratio and gearing ratio both deteriorated, mainly due to decreased cash, increased borrowings, and a reduction in total equity Liquidity and Capital Structure Metrics | Metric | June 30, 2025 | December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Current ratio | 1.77 times | 1.83 times | Decrease | | Gearing ratio | 2.1 times | 2.0 times | Increase | | Cash and cash equivalents (S$ thousand) | 800 | 1,800 | Decrease | | Total borrowings (S$ thousand) | 1,100 | 500 | Increase | - The decrease in current ratio was primarily due to **reduced cash and cash equivalents balances, increased borrowings, and higher inventory and trade and other receivables balances**[84](index=84&type=chunk) - The increase in gearing ratio was mainly attributable to **increased borrowings and a reduction in total equity**[84](index=84&type=chunk) [Asset Pledges](index=35&type=section&id=Asset%20Pledges) As of June 30, 2025, and December 31, 2024, the Group had no assets pledged - The Group had **no assets pledged** during the reporting period[86](index=86&type=chunk) [Employee Information](index=36&type=section&id=Employee%20Information) As of June 30, 2025, the Group's total number of employees increased to 94, with competitive remuneration, training, and a harmonious work environment Number of Employees by Function | Function | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Management | 13 | 13 | | Finance | 1 | 2 | | Sales and Marketing | 2 | 1 | | Operations | 38 | 34 | | Quality Assurance | 9 | 9 | | Product Development/Engineering | 28 | 28 | | Human Resources | 3 | 1 | | Total | 94 | 88 | - The Group's total staff costs for the six months ended June 30, 2025, were approximately **S$1.9 million**, consistent with the prior year period[88](index=88&type=chunk) - The Group adopts an **equal opportunity policy** and provides financial support for on-the-job training and career development programs[88](index=88&type=chunk) [Interim Dividend](index=36&type=section&id=Interim%20Dividend) The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025 - The Board does **not recommend** the payment of an interim dividend for the six months ended June 30, 2025[89](index=89&type=chunk) [Commitments](index=36&type=section&id=Commitments) The Group had no significant commitments as of June 30, 2025, and December 31, 2024 - The Group had **no significant commitments** during the reporting period[90](index=90&type=chunk) [Contingent Liabilities](index=37&type=section&id=Contingent%20Liabilities) The Group had no significant contingent liabilities as of June 30, 2025, and December 31, 2024 - The Group had **no significant contingent liabilities** during the reporting period[91](index=91&type=chunk) [Significant Investments Held](index=37&type=section&id=Significant%20Investments%20Held) For the six months ended June 30, 2025, the Group held no significant investments - The Group held **no significant investments** during the period[92](index=92&type=chunk) [Future Plans for Major Investments or Capital Assets](index=37&type=section&id=Future%20Plans%20for%20Major%20Investments%20or%20Capital%20Assets) As of June 30, 2025, the Group had no other future plans for major investments or capital assets beyond those disclosed in this report - The Group had **no other future plans for major investments or capital assets** at the end of the reporting period[93](index=93&type=chunk) [Significant Acquisitions and Disposals (MDA)](index=37&type=section&id=Significant%20Acquisitions%20and%20Disposals_MDA) For the six months ended June 30, 2025, the Group did not undertake any significant acquisitions or disposals of subsidiaries - The Group did **not undertake any significant acquisitions or disposals of subsidiaries** during the period[94](index=94&type=chunk) [Foreign Exchange Risk](index=37&type=section&id=Foreign%20Exchange%20Risk) The Group's revenue and costs are primarily denominated in SGD, USD, and RMB, exposing it to foreign exchange risk from non-SGD purchases, though not significant during the period - The Group's turnover and business costs are primarily denominated in **SGD, USD, and RMB**[95](index=95&type=chunk) - Foreign exchange risk arises from purchases denominated in currencies other than SGD, but the risk was **not significant** during the period, and **no financial instruments were used for hedging**[95](index=95&type=chunk) [Capital Structure of the Group](index=37&type=section&id=Capital%20Structure%20of%20the%20Group) The Group's capital structure remained unchanged during the period ended June 30, 2025 - The Group's capital structure **remained unchanged** during the period[96](index=96&type=chunk) [Subsequent Events](index=37&type=section&id=Subsequent%20Events) The Directors found no significant events concerning the Group's business or financial performance since the interim period end of June 30, 2025 - The Directors found **no significant events** concerning the Group's business or financial performance since the interim period end[97](index=97&type=chunk) Corporate Governance and Other Information This section details the company's corporate governance practices, including directors' and major shareholders' interests, securities transactions, and audit committee functions [Directors' and Chief Executive's Interests in Shares, Underlying Shares, and Debentures of the Company or its Associated Corporations](index=38&type=section&id=Directors'%20and%20Chief%20Executive's%20Interests%20in%20Shares%2C%20Underlying%20Shares%2C%20and%20Debentures%20of%20the%20Company%20or%20its%20Associated%20Corporations) As of June 30, 2025, Mr. Poon Sui Ho held a 4.13% long position in the company's shares, with no other disclosable interests for directors or chief executives Directors' Long Positions in Shares of the Company | Name | Capacity/Nature of Interest | Number of Shares | Percentage of Shareholding | | :--- | :--- | :--- | :--- | | Mr. Poon Sui Ho | Beneficial owner | 33,832,000 (L) | 4.13% | - As of June 30, 2025, none of the Company's Directors or chief executives held any interests in underlying shares in respect of physically settled, cash settled, or other equity derivatives[100](index=100&type=chunk) [Major Shareholders' and Other Persons' Interests in Shares, Underlying Shares, and Debentures of the Company](index=40&type=section&id=Major%20Shareholders'%20and%20Other%20Persons'%20Interests%20in%20Shares%2C%20Underlying%20Shares%2C%20and%20Debentures%20of%20the%20Company) As of June 30, 2025, Ms. Wu Haiyan and Mr. Xie Jianlong were major shareholders, holding 6.44% and 7.53% long positions respectively, excluding directors Major Shareholders' Long Positions in Shares of the Company | Name | Capacity/Nature of Interest | Number of Shares | Percentage of Shareholding | | :--- | :--- | :--- | :--- | | Ms. Wu Haiyan | Beneficial owner | 52,694,000 | 6.44% | | Mr. Xie Jianlong | Beneficial owner | 61,612,000 (L) | 7.53% | - Save as disclosed above, the Company was **not aware of any other disclosable interests** in shares or underlying shares[102](index=102&type=chunk) [Purchase, Sale or Redemption of Listed Securities of the Company](index=41&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20Listed%20Securities%20of%20the%20Company) For the six months ended June 30, 2025, neither the company nor its subsidiaries purchased, sold, or redeemed any of its listed securities - Neither the Company nor any of its subsidiaries **purchased, sold, or redeemed any of the Company's listed securities** during the period[103](index=103&type=chunk) [Share Option Scheme](index=41&type=section&id=Share%20Option%20Scheme) The company adopted a 10-year share option scheme on December 19, 2017, with no options granted or outstanding for the six months ended June 30, 2025 - The Company adopted a share option scheme on **December 19, 2017**, with a validity period of **10 years**[104](index=104&type=chunk) - Under the scheme, the Company has **40,000,000 share options available for issue**, representing approximately **4.9% of the issued shares**[104](index=104&type=chunk) - No share options were granted during the six months ended June 30, 2025, and **no share options were outstanding**[107](index=107&type=chunk) [Compliance with Corporate Governance Code](index=42&type=section&id=Compliance%20with%20Corporate%20Governance%20Code) The company strives for high corporate governance standards, complying with the GEM Listing Rules' Corporate Governance Code, except for the non-segregation of Chairman and CEO roles - The Company has **complied with the Corporate Governance Code** set out in Part C1 of Appendix C1 to the GEM Listing Rules, **except for code provision C.2.1**[108](index=108&type=chunk) - Mr. Poon holds both the Chairman and Chief Executive Officer roles, an arrangement the Board believes is **in the best interests of the Company and its shareholders**[108](index=108&type=chunk) [Directors' Securities Transactions](index=43&type=section&id=Directors'%20Securities%20Transactions) All directors confirmed full compliance with the required standards for securities transactions for the six months ended June 30, 2025, with no non-compliance incidents - All Directors confirmed **full compliance with the required standards for securities transactions** as set out in Rules 5.48 to 5.67 of the GEM Listing Rules[109](index=109&type=chunk) - There were **no incidents of non-compliance** for the six months ended June 30, 2025[109](index=109&type=chunk) [Audit Committee](index=43&type=section&id=Audit%20Committee) The Audit Committee, comprising three independent non-executive directors, advises on external auditors, financial statements, and internal controls, having reviewed the Group's unaudited interim financial information - The Audit Committee comprises **three independent non-executive Directors**, with Professor Cheung Ka Yu as Chairman[110](index=110&type=chunk) - Key responsibilities include **recommending the appointment and removal of external auditors**, reviewing financial statements, and overseeing internal control procedures[110](index=110&type=chunk) - The Audit Committee has discussed and reviewed the Group's **unaudited condensed consolidated financial information** for the six months ended June 30, 2025, deeming it compliant with applicable accounting standards and Listing Rules requirements[110](index=110&type=chunk) [Board Members and Report Publication](index=43&type=section&id=Board%20Members%20and%20Report%20Publication) This report, issued by Chairman and Executive Director Mr. Poon Sui Ho on August 29, 2025, on behalf of the Board, will be published on the Stock Exchange and company websites - This report was issued by Mr. Poon Sui Ho, Chairman and Executive Director, on behalf of the Board on **August 29, 2025**[111](index=111&type=chunk) - The Company's executive Directors include Mr. Poon Sui Ho, Ms. Xu Bin, Mr. Lee Jen Kang, and Mr. Yeo Qi Jun; independent non-executive Directors are Mr. Foo See Ann, Professor Cheung Ka Yu, and Ms. Tan Yee Wah[113](index=113&type=chunk) - This report will be **published and maintained on the Stock Exchange website and the Company's website** at www.inzign.com[113](index=113&type=chunk)