香港聯合交易所有限公司（「聯交所」）GEM的特色 GEM的定位，乃為中小型公司提供一個上市的市場，此等公司相比起其他在主板上市的公司帶有較高投資風險。有意投資 的人士應了解投資於該等公司的潛在風險，並應經過審慎周詳的考慮後方作出投資決定。 由於GEM上市公司普遍為中小型公司，在GEM買賣的證券可能會較於主板買賣之證券承受較大的市場波動風險，同時無法 保證在GEM買賣的證券會有高流通量的市場。 香港交易及結算所有限公司及聯交所對本報告之內容概不負責，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 因本報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。 本報告的資料乃遵照《聯交所GEM證券上市規則》（「GEM上市規則」）而刊載，旨在提供有關1957 & Co. (Hospitality) Limited （「本公司」，連同其附屬公司統稱為「本集團」或「我們」）的資料；本公司董事（「董事」）就本報告的資料共同及個別承擔全部 責任。各董事作出一切合理查詢後確認，就彼等所知及所信，本報告所載資料在各重大方面均準確完整，並無誤導或欺詐成 分，及並無遺漏任何其他事項，以致本報告或其所載任何陳述 ...

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不負責，對其準確性 或完整性亦不發表任何聲明，並明確表示，概不對因本公告全部或任何部分內容而產生或因倚 賴該等內容而引致的任何損失承擔任何責任。 長飛光纖光纜股份有限公司 Yangtze Optical Fibre and Cable Joint Stock Limited Company* （於中華人民共和國註冊成立之股份有限公司） （股份代號：6869） 截至二零二五年六月三十日止六個月之中期業績公告 財務摘要 長飛光纖光纜股份有限公司（「本公司」或「公司」）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（「本期 間」）之未經審核合併中期業績以及同期比較數據如下： * 僅供識別 1 • 營業收入約為人民幣6,384.5百萬元，較去年同期增加約人民幣1,036.4百萬 元，增幅約為19.4%。 • 毛利約為人民幣1,806.6百萬元，較去年同期增加約人民幣314.5百萬元，毛 利增幅約為21.1%。 • 歸屬於母公司股東的淨利潤約為人民幣295.7百萬元，較去年同期減少約人 民幣82.0百萬 ...

[Financial Statements](index=1&type=section&id=Financial%20Statements) [Condensed Consolidated Statement of Profit or Loss](index=1&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss) Revenue significantly declined, resulting in a net loss of HK$298,803 thousand and basic loss per share of HK cents 5.7 - **Condensed Consolidated Statement of Profit or Loss Key Data (HK$ thousand):** | Indicator | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | | Revenue | 17,685 | 48,697 | -63.7% | | Net (loss)/gain on financial assets at FVTPL | (27,745) | 28,375 | Turned from gain to loss | | (Loss)/profit before tax | (314,260) | 118,574 | Turned from profit to loss | | (Loss)/profit for the period | (298,803) | 142,581 | Turned from profit to loss | | (Loss) attributable to owners of the Company | (497,874) | (57,447) | Loss widened | | Basic loss per share (HK cents) | (5.7) | (0.7) | Loss widened | [Condensed Consolidated Statement of Comprehensive Income](index=2&type=section&id=Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) Total comprehensive loss reached HK$318,571 thousand, driven by the period's loss and other comprehensive loss - **Condensed Consolidated Statement of Comprehensive Income Key Data (HK$ thousand):** | Indicator | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | | (Loss)/profit for the period | (298,803) | 142,581 | Turned from profit to loss | | Other comprehensive (loss)/income for the period, net of tax | (19,768) | 2,066 | Turned from income to loss | | Total comprehensive (loss)/income for the period | (318,571) | 144,647 | Turned from income to loss | | (Loss) attributable to owners of the Company | (517,642) | (55,381) | Loss widened | [Condensed Consolidated Statement of Financial Position](index=3&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) Total assets decreased to HK$1,779,867 thousand, with rising liabilities expanding net liabilities to HK$2,790,592 thousand - **Condensed Consolidated Statement of Financial Position Key Data (HK$ thousand):** | Indicator | June 30, 2025 | Dec 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Total non-current assets | 870,866 | 1,083,985 | -19.7% | | Total current assets | 909,001 | 981,785 | -7.4% | | Total current liabilities | 645,144 | 503,514 | +28.1% | | Net current assets | 263,857 | 478,271 | -44.9% | | Net liabilities | (2,790,592) | (2,273,381) | Loss widened | | Total equity | (2,790,592) | (2,273,381) | Loss widened | [Notes to the Financial Statements](index=5&type=section&id=Notes%20to%20the%20Financial%20Statements) [General Information and Basis of Preparation](index=5&type=section&id=General%20Information%20and%20Basis%20of%20Preparation) This section details the company's basic information, business scope, shareholder structure, and the basis for interim financial preparation and going concern [General Information](index=5&type=section&id=General%20Information) Citic International Capital Holdings Limited is a Bermuda-registered investment holding company engaged in diverse financial services, ultimately controlled by China CITIC Financial Asset Management Co., Ltd - The company's principal businesses include securities brokerage, margin financing, loan financing, financial advisory, direct investment, corporate finance, and management consulting services[6](index=6&type=chunk) - The ultimate controlling company is China CITIC Financial Asset Management Co., Ltd[6](index=6&type=chunk) [Basis of Preparation and Going Concern](index=5&type=section&id=Basis%20of%20Preparation%20and%20Going%20Concern) Interim financials are prepared on a going concern basis despite challenges, with management confirming sufficient resources through various liquidity measures and shareholder support - As of June 30, 2025, the Group's net current assets were **HK$264 million** (December 31, 2024: HK$478 million), net liabilities were **HK$2,791 million** (December 31, 2024: HK$2,273 million), and loss for the period was **HK$299 million** (June 30, 2024: profit of HK$143 million)[10](index=10&type=chunk) - The Group has obtained a financial support letter from its indirect controlling shareholder, CITIC Financial Asset International Holdings, committing to provide sufficient financial support[12](index=12&type=chunk) - The Group plans to improve liquidity by disposing of publicly traded bonds and listed equity securities, recovering project cash flows, controlling expenses and capital expenditures, and actively developing its licensed businesses[13](index=13&type=chunk)[14](index=14&type=chunk)[15](index=15&type=chunk) [Changes in Accounting Policies](index=7&type=section&id=Changes%20in%20Accounting%20Policies) The revised HKAS 21 "Lack of Exchangeability" is applied for the first time, with no significant impact expected on the Group's condensed consolidated financial statements - The revised HKAS 21 "Lack of Exchangeability" is applied for the first time, requiring assessment of currency exchangeability and estimation of spot exchange rates[18](index=18&type=chunk) - This revision is not expected to have any significant impact on the Group's condensed consolidated financial statements[18](index=18&type=chunk) [Segment Information](index=7&type=section&id=Segment%20Information) The Group's operating segments include Securities, Corporate Finance, Asset Management and Direct Investment, Financial Services, and Others, with Asset Management and Direct Investment recording the largest loss [Overview of Operating Segments](index=7&type=section&id=Overview%20of%20Operating%20Segments) The Executive Committee serves as the chief operating decision-maker, categorizing business into four reportable segments for internal reporting and performance assessment - The Group's chief operating decision-maker is the Executive Committee[19](index=19&type=chunk) - The Group's businesses are divided into four reportable segments: Securities, Corporate Finance, Asset Management and Direct Investment, Financial Services, and Others[20](index=20&type=chunk) [Segment Performance and Assets & Liabilities](index=8&type=section&id=Segment%20Performance%20and%20Assets%20%26%20Liabilities) Asset Management and Direct Investment recorded a significant loss of HK$304,366 thousand, while the Securities segment turned from profit to a loss of HK$6,672 thousand - **H1 2025 Segment Performance (HK$ thousand):** | Segment | Segment Revenue | Segment Results | | :--- | :--- | :--- | | Securities | 2,787 | (6,672) | | Corporate Finance | – | – | | Asset Management and Direct Investment | 14,898 | (304,366) | | Financial Services and Others | – | (4,132) | | **Total** | **17,685** | **(315,170)** | - **H1 2024 Segment Performance (HK$ thousand):** | Segment | Segment Revenue | Segment Results | | :--- | :--- | :--- | | Securities | 1,590 | 2,747 | | Corporate Finance | 32 | (2,140) | | Asset Management and Direct Investment | 46,440 | 159,690 | | Financial Services and Others | 667 | (39,201) | | **Total** | **48,697** | **121,096** | - **Segment Assets and Liabilities (HK$ thousand):** | Segment | June 30, 2025 (Assets) | Dec 31, 2024 (Assets) | June 30, 2025 (Liabilities) | Dec 31, 2024 (Liabilities) | | :--- | :--- | :--- | :--- | :--- | | Securities | 234,978 | 205,848 | 153,496 | 121,204 | | Corporate Finance | 10,133 | 10,126 | – | – | | Asset Management and Direct Investment | 1,392,111 | 1,742,287 | 463,837 | 354,262 | | Financial Services and Others | 80,279 | 71,351 | 11,157 | 26,472 | | **Total Segment** | **1,717,501** | **2,029,612** | **628,490** | **501,938** | [Geographical Information and Major Customers](index=12&type=section&id=Geographical%20Information%20and%20Major%20Customers) Group operations are primarily in Hong Kong and Mainland China, with Hong Kong's external customer revenue significantly decreasing, and three major customers contributing over 10% of total revenue - **Revenue from External Customers (HK$ thousand):** | Region | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Hong Kong | 14,607 | 48,030 | | Mainland China | 3,078 | 667 | | **Total** | **17,685** | **48,697** | - **Major Customer Revenue Contribution (HK$ thousand):** | Customer | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Customer A (Asset Management and Direct Investment) | 6,750 | 29,734 | | Customer B (Asset Management and Direct Investment) | 3,230 | 3,933 | | Customer C (Asset Management and Direct Investment) | 2,926 | 5,540 | [Revenue Breakdown](index=13&type=section&id=Revenue%20Breakdown) Total revenue significantly decreased from HK$48,697 thousand to HK$17,685 thousand, driven by substantial reductions in commission, service fees, and interest income - **Revenue Breakdown (HK$ thousand):** | Revenue Source | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | | Commission and service fee income | 1,613 | 2,350 | -31.3% | | Interest income (effective interest method) | 14,377 | 40,187 | -64.2% | | Other interest income | 1,695 | 5,380 | -68.5% | | Investment income (dividends) | – | 780 | -100% | | **Total Revenue** | **17,685** | **48,697** | **-63.7%** | [Finance Costs](index=14&type=section&id=Finance%20Costs) Total finance costs decreased to HK$126,018 thousand, mainly due to reduced interest on bank borrowings and direct controlling company loans, despite an increase in indirect controlling company loan interest - **Finance Costs (HK$ thousand):** | Cost Source | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | | Interest on bank borrowings | – | 10,339 | -100% | | Interest on direct controlling company loans | – | 33,335 | -100% | | Interest on indirect controlling company loans | 125,392 | 88,723 | +41.3% | | **Total Finance Costs** | **126,018** | **134,039** | **-5.98%** | [Breakdown of Loss/(Profit) Before Tax](index=14&type=section&id=Breakdown%20of%20Loss%2F%28Profit%29%20Before%20Tax) Loss before tax was significantly impacted by a substantial increase in net impairment provisions for other loans and debt instruments, turning from a reversal to a large provision - **Breakdown of Loss/(Profit) Before Tax (HK$ thousand):** | Item | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | | Net impairment provisions/(reversal) for other loans and debt instruments | 160,360 | (214,006) | Turned from reversal to provision | | Legal and professional fees | 5,765 | 1,115 | +417% | | Employee benefit expenses | 4,996 | 6,319 | -21% | | Net impairment reversal for financial assets at FVOCI | (13,812) | (7,746) | Reversal increased | [Income Tax](index=15&type=section&id=Income%20Tax) No Hong Kong profits tax provision was made due to the absence of assessable profits, with Chinese subsidiaries taxed at 25% and a total tax credit from prior year over-provisions - No Hong Kong profits tax provision was made as no assessable profits were generated in Hong Kong[36](index=36&type=chunk) - Chinese subsidiaries are subject to a tax rate of **25%**[36](index=36&type=chunk) - **Total Tax Credit for the Period (HK$ thousand):** | Item | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Over-provision in prior years (Mainland China) | (15,457) | (24,007) | | **Total Tax Credit for the Period** | **(15,457)** | **(24,007)** | [Loss Per Share](index=15&type=section&id=Loss%20Per%20Share) Basic loss per share attributable to ordinary equity holders significantly widened to HK cents 5.7, with no diluted loss per share presented due to the absence of potential dilutive ordinary shares - **Basic Loss Per Share (HK cents):** | Indicator | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | | Loss for the period attributable to ordinary equity holders of the Company (HK$ thousand) | (497,874) | (57,447) | Loss widened | | Basic loss per share (HK cents) | (5.7) | (0.7) | Loss widened | [Financial Assets](index=16&type=section&id=Financial%20Assets) The Group's financial assets at FVTPL and FVOCI both decreased, with non-listed fixed income securities remaining a major component and increased impairment reversal for FVOCI assets [Financial Assets at Fair Value Through Profit or Loss](index=16&type=section&id=Financial%20Assets%20at%20Fair%20Value%20Through%20Profit%20or%20Loss) Total financial assets at FVTPL decreased to HK$955,595 thousand, with non-listed fixed income securities and non-listed fund investments as primary components - **Financial Assets at Fair Value Through Profit or Loss (HK$ thousand):** | Item | June 30, 2025 | Dec 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Non-listed fund investments (non-current) | 281,736 | 320,120 | -11.99% | | Non-listed fixed income securities (non-current) | 414,718 | 428,415 | -3.19% | | Non-listed fund investments (current) | 169,757 | 168,392 | +0.81% | | Listed fixed income securities (current) | 48,713 | 104,518 | -53.4% | | **Total** | **955,595** | **1,065,438** | **-10.31%** | [Financial Assets at Fair Value Through Other Comprehensive Income](index=17&type=section&id=Financial%20Assets%20at%20Fair%20Value%20Through%20Other%20Comprehensive%20Income) Total financial assets at FVOCI slightly decreased to HK$73,763 thousand, recording a fair value loss and an increased net impairment reversal - **Financial Assets at Fair Value Through Other Comprehensive Income (HK$ thousand):** | Item | June 30, 2025 | Dec 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Fixed income securities (non-current) | 18,354 | 24,575 | -25.39% | | Fixed income securities (current) | 55,409 | 52,628 | +5.28% | | **Total** | **73,763** | **77,203** | **-4.59%** | - The fair value loss for the period was **HK$4,123 thousand** (2024: gain of HK$5,479 thousand)[42](index=42&type=chunk) - The net impairment reversal for the period was **HK$13,812 thousand** (2024: HK$7,746 thousand)[42](index=42&type=chunk) [Finance Lease Receivables](index=17&type=section&id=Finance%20Lease%20Receivables) The carrying amount of finance lease receivables decreased to HK$7,818 thousand, with an expected credit loss provision of HK$159,826 thousand and an average loss rate of 91% - **Finance Lease Receivables (HK$ thousand):** | Item | June 30, 2025 | Dec 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Gross finance lease receivables | 167,644 | 174,709 | -4.04% | | Provision for expected credit losses | (159,826) | (166,034) | -3.74% | | **Carrying Amount** | **7,818** | **8,675** | **-10.0%** | - As of June 30, 2025, the average loss rate for credit-impaired finance lease receivables was **91%** (December 31, 2024: 90%)[46](index=46&type=chunk) [Other Loans and Debt Instruments](index=18&type=section&id=Other%20Loans%20and%20Debt%20Instruments) The carrying amount of other loans and debt instruments significantly decreased to HK$191,803 thousand, with expected credit loss provisions increasing to HK$1,155,082 thousand and an average loss rate of 92% - **Other Loans and Debt Instruments (HK$ thousand):** | Item | June 30, 2025 | Dec 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Other loans and debt instruments | 1,346,885 | 1,333,979 | +0.97% | | Provision for expected credit losses | (1,155,082) | (994,720) | +16.12% | | **Carrying Amount** | **191,803** | **339,259** | **-43.47%** | - As of June 30, 2025, the average loss rate for credit-impaired other loans and debt instruments was **92%** (December 31, 2024: 79%)[51](index=51&type=chunk) [Margin Loan Advances to Customers](index=19&type=section&id=Margin%20Loan%20Advances%20to%20Customers) The carrying amount of margin loan advances decreased to HK$7,840 thousand, with expected credit loss provisions increasing to HK$91,975 thousand and high concentration among top customers - **Margin Loan Advances to Customers (HK$ thousand):** | Item | June 30, 2025 | Dec 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Margin loan advances | 99,815 | 93,999 | +6.19% | | Provision for expected credit losses | (91,975) | (82,456) | +11.55% | | **Carrying Amount** | **7,840** | **11,543** | **-32.08%** | - As of June 30, 2025, loans to the top five margin customers accounted for **99%** of the total carrying amount[53](index=53&type=chunk) - As of June 30, 2025, the average loss rate for credit-impaired margin loan advances was **92.9%** (December 31, 2024: 88.4%)[55](index=55&type=chunk) [Trade Receivables](index=21&type=section&id=Trade%20Receivables) The carrying amount of trade receivables significantly decreased to HK$1,261 thousand, with expected credit loss provisions of HK$80,302 thousand, primarily from direct investment business - **Trade Receivables (HK$ thousand):** | Item | June 30, 2025 | Dec 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Gross trade receivables | 81,563 | 83,597 | -2.43% | | Provision for expected credit losses | (80,302) | (80,298) | +0.005% | | **Carrying Amount** | **1,261** | **3,299** | **-61.8%** | - As of June 30, 2025, trade receivables arising from direct investment business amounted to **HK$79,177 thousand** (December 31, 2024: HK$73,992 thousand)[61](index=61&type=chunk) [Trade Payables](index=22&type=section&id=Trade%20Payables) Trade payables increased to HK$134,644 thousand, with most of them bearing interest at bank savings deposit rates - **Trade Payables (HK$ thousand):** | Item | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Trade payables | 134,644 | 100,798 | - Approximately **HK$132,390 thousand** (December 31, 2024: HK$99,111 thousand) of trade payables bear interest at bank savings deposit rates[62](index=62&type=chunk) [Dividends](index=22&type=section&id=Dividends) The Board of Directors resolved not to declare any interim dividend for the reporting period - The Board of Directors resolved not to declare any interim dividend for the six months ended June 30, 2025, and June 30, 2024[63](index=63&type=chunk) [Management Discussion and Analysis](index=23&type=section&id=Management%20Discussion%20and%20Analysis) [Financial Highlights](index=23&type=section&id=Financial%20Highlights) Revenue significantly decreased, resulting in a net loss of HK$298,803 thousand and basic loss per share of HK cents 5.7, primarily due to increased loan impairment and FVTPL losses - Revenue for the period was approximately **HK$17,685 thousand** (last corresponding period: HK$48,697 thousand), with a net loss of **HK$27,745 thousand** from financial assets at FVTPL (last corresponding period: gain of HK$28,375 thousand)[64](index=64&type=chunk) - Net loss was approximately **HK$298,803 thousand** (last corresponding period: net profit of HK$142,581 thousand), primarily due to increased impairment provisions from a significant decline in the expected recoverable value of loans, and a net loss from financial assets at FVTPL[64](index=64&type=chunk) - Basic loss per share was **HK cents 5.7** (last corresponding period: HK cents 0.7)[65](index=65&type=chunk) [Business Review](index=23&type=section&id=Business%20Review) In H1 2025, the Group focused on licensed businesses, strengthened risk control, and pursued business transformation amidst global economic challenges, resulting in losses in key segments [Macroeconomic Environment](index=23&type=section&id=Macroeconomic%20Environment) H1 2025 saw global economic slowdown due to geopolitical conflicts, while China's economy showed resilience and Hong Kong's economy recovered with policy support - The global economy slowed due to geopolitical conflicts and US tariff policies[66](index=66&type=chunk) - China's economy demonstrated resilience in industrial upgrading, domestic demand growth, and technological innovation[66](index=66&type=chunk) - Hong Kong's economy showed signs of recovery with policy support and deepening regional cooperation[66](index=66&type=chunk) [Securities Business](index=24&type=section&id=Securities%20Business) The Securities business maintained compliance, enhanced FinTech, and increased business synergy for asset disposal, but recorded a loss of HK$6,672 thousand due to increased impairment provisions - The Securities business continuously enhanced its FinTech capabilities and launched an SMS anti-fraud registration program[67](index=67&type=chunk) - Increased business synergy to assist in disposing of stock-related assets from existing projects within the system, thereby increasing intermediary income[67](index=67&type=chunk) - **Securities Segment Performance (HK$ thousand):** | Indicator | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | | Segment revenue and other gains/(losses) | 636 | 5,050 | -87.4% | | Segment results | (6,672) | 2,747 | Turned from profit to loss | [Asset Management and Direct Investment](index=24&type=section&id=Asset%20Management%20and%20Direct%20Investment) This business actively responded to market changes, strengthened risk control, and focused on distressed asset management, but recorded a loss of HK$304,366 thousand - Focused on distressed asset management, targeting investment and financing opportunities in state-owned enterprises and distressed assets/corporate rescue themes[69](index=69&type=chunk) - **Asset Management and Direct Investment Segment Performance (HK$ thousand):** | Indicator | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | | Segment revenue | 14,898 | 46,440 | -67.9% | | Net loss/(gain) on financial assets at FVTPL | (27,745) | 28,375 | Turned from gain to loss | | Segment results | (304,366) | 159,690 | Turned from profit to loss | [Corporate Finance](index=25&type=section&id=Corporate%20Finance) The Corporate Finance business continued its licensed business transformation, strengthened compliance and risk control, and expanded advisory services, achieving zero segment results for the period - Expanded services including financial advisory for listed companies, debt restructuring, asset stripping, and asset injection[71](index=71&type=chunk) - Collaborated with China CITIC Financial Asset's distressed asset business, leveraging its licensed support role[71](index=71&type=chunk) - **Corporate Finance Segment Performance (HK$ thousand):** | Indicator | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | | Segment revenue | – | – | No change | | Segment results | – | (2,140) | Loss narrowed | [Financial Services and Others](index=25&type=section&id=Financial%20Services%20and%20Others) This business, primarily providing finance lease services in Mainland China, focused on recovering existing projects with no new additions, resulting in zero revenue but a narrowed loss - The business primarily focuses on gradually recovering existing projects, with no new projects added during the period[72](index=72&type=chunk) - **Financial Services and Others Segment Performance (HK$ thousand):** | Indicator | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | | Segment revenue | – | 667 | -100% | | Segment loss | (4,132) | (39,201) | Loss narrowed | [Outlook](index=26&type=section&id=Outlook) The Group anticipates continued global economic challenges, aiming to capitalize on market opportunities by enhancing marketing, deepening distressed asset business, and developing unique investment banking models - The Securities business will increase market promotion and institutional client expansion, raise the proportion of intermediary business income, and strengthen internal business synergy[74](index=74&type=chunk) - The Asset Management business will counter-cyclically deepen its "big distressed asset" business, focusing on investment opportunities such as cooperation with state-owned enterprises, substantive restructuring, and corporate rescue[74](index=74&type=chunk) - The Corporate Finance business will build a distinctive investment banking model, explore cross-border distressed asset disposal opportunities, and assist listed companies with debt restructuring, asset stripping, and asset injection[74](index=74&type=chunk) [Financial Review](index=26&type=section&id=Financial%20Review) [Capital Structure and Liquidity](index=26&type=section&id=Capital%20Structure%20and%20Liquidity) Total equity attributable to owners was negative HK$2,790,592 thousand, with the gearing ratio increasing to 257%, but the Group expects sufficient working capital from shareholder support - **Capital Structure and Liquidity (HK$ thousand):** | Indicator | June 30, 2025 | Dec 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Total equity attributable to owners | (2,790,592) | (2,273,381) | Loss widened | | Cash and bank balances | 379,152 | 413,122 | -8.22% | | Gearing ratio | 257% | 186% | +71 percentage points | | Controlling shareholder loans and perpetual capital bonds | 10,088,215 | 9,929,603 | +1.6% | | Undrawn bank standby facilities | 100,000 | 100,000 | No change | - The change in gearing ratio is primarily due to a decrease in total assets from increased provisions and an increase in total liabilities from new shareholder loans[76](index=76&type=chunk) [Pledged Group Assets](index=28&type=section&id=Pledged%20Group%20Assets) As of June 30, 2025, the Group had not pledged any fixed deposits to secure bank loan facilities - As of June 30, 2025, the Group had not pledged any fixed deposits to secure bank loan facilities[81](index=81&type=chunk) [Foreign Exchange Risk](index=28&type=section&id=Foreign%20Exchange%20Risk) The Group's primary operations are transacted and recorded in HKD, USD, and RMB, resulting in minimal significant foreign exchange risk due to the HKD-USD peg - The Group's principal businesses are transacted and recorded in Hong Kong Dollars, US Dollars, and Renminbi[82](index=82&type=chunk) - Due to the peg between the Hong Kong Dollar and the US Dollar, the Group faces minimal significant foreign exchange risk[82](index=82&type=chunk) [Contingent Liabilities](index=28&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 at the end of the reporting period[83](index=83&type=chunk) [Material Investments](index=28&type=section&id=Material%20Investments) The Group holds several material investments, with some facing default or significant declines in expected recoverable value, leading to increased impairment provisions - Holds ordinary shares and convertible bonds in Yu Cheng Ke Jin, with a total fair value representing approximately **23.31%** of total assets; this project is in default and has entered provisional liquidation proceedings[84](index=84&type=chunk)[85](index=85&type=chunk) - Holds Fund I (Tujia equity), with a fair value representing approximately **8.35%** of total assets, and has received in-specie distribution of Tujia Series E preferred shares[87](index=87&type=chunk) - Holds loans to Crown International Group Limited, with a fair value representing approximately **3.81%** of total assets, and recorded a net impairment provision of approximately **HK$149,677 thousand** for the period due to a significant decline in expected recoverable value[87](index=87&type=chunk) - Holds shares in Fund II, with a fair value representing approximately **8.41%** of total assets, and is currently operating normally[88](index=88&type=chunk) [Impairment Provision Status](index=30&type=section&id=Impairment%20Provision%20Status) The Group makes expected credit loss provisions for financial assets under HKFRS 9, with major credit risks from various loan and debt instruments, resulting in a net impairment loss of approximately HK$151 million [Overall Impairment Provision Status](index=30&type=section&id=Overall%20Impairment%20Provision%20Status) The Group applies HKFRS 9's expected credit loss model for financial asset impairment, categorizing projects into three stages, with a net impairment loss of approximately HK$151 million for the period - The Group makes impairment provisions for financial assets based on the expected credit loss model under HKFRS 9[89](index=89&type=chunk) - Major credit risks arise from other loans and debt instruments, margin loan advances to customers, financial assets at FVOCI, finance lease receivables, trade receivables, and amounts due from associates[91](index=91&type=chunk) - The net impairment loss for the period was approximately **HK$151 million**, primarily due to a significant decline in the expected recoverable value of other loans and debt instruments transferred from a margin project, resulting in a net impairment provision of approximately **HK$150 million**[93](index=93&type=chunk) [Impairment Provision Status for Public Bonds](index=31&type=section&id=Impairment%20Provision%20Status%20for%20Public%20Bonds) Public bonds are classified as financial assets at FVOCI and measured for expected credit losses across three stages, with a reversal of impairment provisions of HK$13,813 thousand for the period - Public bonds are classified as financial assets at FVOCI, with fair value measured by public market trading prices[94](index=94&type=chunk) - Expected credit loss provisions for Stage 1 and 2 public bonds are measured using the expected credit loss model, while Stage 3 is determined by the market price at period-end[95](index=95&type=chunk) - A reversal of impairment provisions of **HK$13,813 thousand** for financial assets at FVOCI was recorded for the period[96](index=96&type=chunk) [Explanation of Finance Lease Business and Impairment Provision Status](index=32&type=section&id=Explanation%20of%20Finance%20Lease%20Business%20and%20Impairment%20Provision%20Status) The Group provides finance lease services in Mainland China, with three existing projects classified as Stage 3, and no new projects planned, focusing on recovery - The Group provides finance lease services in Mainland China through Zhongju Leasing, primarily using a sale-and-leaseback model[97](index=97&type=chunk) - As of June 30, 2025, there were three outstanding finance lease projects with a total carrying amount of approximately **HK$7,818 thousand**, representing approximately **0.44%** of the Group's total assets[98](index=98&type=chunk) - All finance lease projects are classified as Stage 3, with impairment provisions of approximately **HK$352 thousand** recorded for the period[101](index=101&type=chunk) - The finance lease business will primarily focus on gradually recovering existing projects, with no plans for new projects[98](index=98&type=chunk) [Key Internal Control Measures](index=33&type=section&id=Key%20Internal%20Control%20Measures) The Group implements key internal control measures in its finance lease business, including daily risk monitoring, actions for overdue projects, and regular review by management and the Board - Implements daily risk monitoring, continuous tracking of deployed projects, and activation of early warning signals[102](index=102&type=chunk) - Takes various recovery actions for overdue projects, including collection notices, communication and negotiation, legal proceedings, and debt assignment[102](index=102&type=chunk) - Management reviews risk classification results quarterly, while the Board's Audit Committee and Risk Management Committee regularly review and supervise impairment projects and risk management mechanisms[103](index=103&type=chunk) [Other Information](index=34&type=section&id=Other%20Information) [Employees and Remuneration Policy](index=34&type=section&id=Employees%20and%20Remuneration%20Policy) As of June 30, 2025, the Group employed 10 individuals, with a remuneration policy considering job nature, market levels, experience, expertise, and potential, alongside benefits and training - **Number of Employees:** | Date | Number of Employees | | :--- | :--- | | June 30, 2025 | 10 | | Dec 31, 2024 | 12 | - The remuneration policy considers job nature, market levels, employee experience, expertise, and development potential, with discretionary incentives and bonuses[104](index=104&type=chunk) - Provides benefits such as group medical and life insurance, and is committed to offering a learning and development environment and training programs[104](index=104&type=chunk)[105](index=105&type=chunk) [Changes in Directors' Information](index=35&type=section&id=Changes%20in%20Directors'%20Information) Independent Non-executive Director Mr. Hung Ka Hai, Clement, had changes in other directorships, and Board Chairman Mr. Wang Cheng was appointed as a director of CITIC Financial Asset International Holdings - Independent Non-executive Director Mr. Hung Ka Hai, Clement, was appointed as an independent non-executive director of Wealthy Financial Investment Holdings Limited and resigned as an independent non-executive director of Frontier Services Group Limited[110](index=110&type=chunk) - Board Chairman Mr. Wang Cheng was appointed as a director of CITIC Financial Asset International Holdings[110](index=110&type=chunk) - During the period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[106](index=106&type=chunk) [Corporate Governance Practices](index=35&type=section&id=Corporate%20Governance%20Practices) The Company adopted and complied with all applicable code provisions of the Corporate Governance Code and the Model Code for Securities Transactions by Directors of Listed Issuers - The Company has adopted and complied with all applicable code provisions of the Corporate Governance Code set out in Appendix C1 to the Listing Rules[107](index=107&type=chunk) - The Company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers set out in Appendix C3 to the Listing Rules, and all Directors have confirmed full compliance[108](index=108&type=chunk) [Review of Interim Financial Information](index=35&type=section&id=Review%20of%20Interim%20Financial%20Information) The Company's Audit Committee reviewed the Group's interim financial information, which was also reviewed by the external auditor, BDO Limited, in accordance with HKSRS 2410 - The Company's Audit Committee has reviewed the interim financial information[109](index=109&type=chunk) - The external auditor, BDO Limited, has reviewed the interim financial information in accordance with Hong Kong Standard on Review Engagements 2410[109](index=109&type=chunk) [Report Publication](index=36&type=section&id=Report%20Publication) The Company's interim report will be published in September 2025 on the HKEXnews website and the Company's website - The Company's interim report will be published in September 2025 on the HKEXnews website (www.hkexnews.hk) and the Company's website (www.hrif.com.hk)[111](index=111&type=chunk)

[Financial Highlights](index=1&type=section&id=Financial%20Highlights) The company reported a 10.0% revenue increase to RMB 1,693.6 million, with gross profit up 22.7% and a significant reduction in loss for the period Financial Highlights (RMB million) | Indicator | Six Months Ended June 30, 2025 (RMB million) | Six Months Ended June 30, 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 1,693.6 | 1,539.5 | 10.0% | | Gross Profit | 152.7 | 124.5 | 22.7% | | Operating Profit/(Loss) | 29.0 | (35.7) | -181.2% | | Loss Before Tax | (12.7) | (77.2) | -83.5% | | Loss for the Period | (15.0) | (69.7) | -78.5% | | Adjusted Net Loss (Non-IFRS) | (8.9) | (55.1) | -83.8% | | Net Loss Margin | (0.9%) | (4.5%) | - | | Adjusted Net Loss Margin (Non-IFRS) | (0.5%) | (3.6%) | - | | Basic Loss Per Share (RMB) | (0.01) | (0.05) | - | | Diluted Loss Per Share (RMB) | (0.01) | (0.05) | - | [Consolidated Financial Statements](index=2&type=section&id=Consolidated%20Financial%20Statements) This section presents the Group's consolidated financial performance and position, highlighting key changes in revenue, profitability, assets, and liabilities over the reporting periods [Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=2&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For the six months ended June 30, 2025, the company's revenue grew 10.0% to RMB 1,693.6 million, gross profit increased 22.7% to RMB 152.7 million, and operating results turned profitable with RMB 29.0 million, significantly narrowing the loss for the period by 78.5% to RMB 15.0 million Consolidated Statement of Profit or Loss and Other Comprehensive Income (RMB thousand) | Indicator | Six Months Ended June 30, 2025 (RMB thousand) | Six Months Ended June 30, 2024 (RMB thousand) | | :--- | :--- | :--- | | Revenue | 1,693,626 | 1,539,454 | | Cost of Sales | (1,540,887) | (1,414,991) | | Gross Profit | 152,739 | 124,463 | | Other Income | 30,386 | 27,324 | | Selling Expenses | (61,437) | (79,169) | | Administrative Expenses | (92,708) | (108,317) | | Operating Profit/(Loss) | 28,980 | (35,699) | | Finance Costs | (41,724) | (41,538) | | Loss Before Tax | (12,744) | (77,237) | | Income Tax | (2,221) | 7,557 | | Loss for the Period Attributable to Equity Holders of the Company | (14,965) | (69,680) | | Basic Loss Per Share (RMB) | (0.01) | (0.05) | | Diluted Loss Per Share (RMB) | (0.01) | (0.05) | - Loss for the period significantly narrowed by **78.5% to RMB 15.0 million**, indicating substantial improvement in financial performance[4](index=4&type=chunk)[84](index=84&type=chunk) [Consolidated Statement of Financial Position](index=3&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the company's total net assets slightly decreased, but net current assets significantly improved from RMB 59.5 million to RMB 311.5 million, with a notable increase in property, plant, and equipment reflecting capital expenditure Consolidated Statement of Financial Position (RMB thousand) | Indicator | As of June 30, 2025 (RMB thousand) | As of December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Non-current Assets | 2,406,735 | 1,967,765 | | Current Assets | 2,333,995 | 2,541,433 | | Current Liabilities | 2,022,456 | 2,481,885 | | Net Current Assets | 311,539 | 59,548 | | Total Assets Less Current Liabilities | 2,718,274 | 2,027,313 | | Non-current Liabilities | 1,413,462 | 712,279 | | Net Assets/Total Equity | 1,304,812 | 1,315,034 | | Trade and Bills Receivables | 1,207,466 | 1,280,584 | | Bank and Cash Balances | 355,485 | 412,136 | | Trade and Bills Payables | 753,571 | 837,921 | | Interest-bearing Borrowings (Current) | 1,127,290 | 1,515,795 | | Interest-bearing Borrowings (Non-current) | 1,395,641 | 696,808 | - Net current assets significantly increased from **RMB 59,548 thousand** as of December 31, 2024, to **RMB 311,539 thousand** as of June 30, 2025[5](index=5&type=chunk) - Property, plant, and equipment increased from **RMB 1,967,581 thousand** as of December 31, 2024, to **RMB 2,406,584 thousand** as of June 30, 2025, reflecting capital investment[5](index=5&type=chunk) [Notes to the Financial Statements](index=4&type=section&id=Notes%20to%20the%20Financial%20Statements) This section provides detailed explanations and disclosures regarding the accounting policies, significant estimates, and specific line items presented in the consolidated financial statements [Company and Basis of Preparation](index=4&type=section&id=Company%20and%20Basis%20of%20Preparation) Dalipu Holdings Limited, incorporated in the Cayman Islands and listed on the HKEX Main Board, primarily develops, manufactures, and sells pipes for oil and gas, new energy, and special seamless steel pipes, with interim financial reports prepared under IAS 34 and reviewed by KPMG - The company's principal activities involve the development, manufacture, and sale of pipes for oil and gas, new energy, and special seamless steel pipes[6](index=6&type=chunk) - The interim financial report is prepared in accordance with International Accounting Standard 34 and has been reviewed by KPMG[7](index=7&type=chunk)[8](index=8&type=chunk) [Changes in Accounting Policies](index=5&type=section&id=Changes%20in%20Accounting%20Policies) The Group adopted amendments to IAS 21, "The Effects of Changes in Foreign Exchange Rates: Lack of Exchangeability," during the period, which had no material impact on the interim financial report due to no transactions in non-exchangeable foreign currencies, and no other new standards or interpretations not yet effective were adopted - The Group adopted amendments to IAS 21, which had no material impact on the interim financial report[10](index=10&type=chunk) - The company has not early adopted any new standards or interpretations that are not yet effective[11](index=11&type=chunk) [Revenue and Segment Reporting](index=6&type=section&id=Revenue%20and%20Segment%20Reporting) The Group's revenue primarily derives from the sale of pipes for oil and gas and new energy/special seamless steel pipes, with all revenue recognized upon product delivery to customers; for the six months ended June 30, 2025, total revenue was RMB 1,693.6 million, predominantly from the China market, though overseas market revenue declined - Revenue is recognized when products are shipped to and received at the customer's designated premises[13](index=13&type=chunk) [Revenue Breakdown](index=6&type=section&id=Revenue%20Breakdown) For the six months ended June 30, 2025, sales revenue from oil and gas pipes was RMB 1,078.7 million, and from new energy and special seamless steel pipes was RMB 614.9 million, both showing growth Revenue Breakdown (RMB thousand) | Product Category | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Sales of Oil and Gas Pipes | 1,078,720 | 1,004,396 | | Sales of New Energy and Special Seamless Steel Pipes | 614,906 | 535,058 | | **Total** | **1,693,626** | **1,539,454** | [Segment Reporting](index=6&type=section&id=Segment%20Reporting) The Group has three reportable segments: oil and gas pipes, new energy and special seamless steel pipes, and other products; segment performance is measured by gross profit, with oil and gas pipes grossing RMB 127.5 million and new energy/special seamless steel pipes grossing RMB 25.2 million as of June 30, 2025 - The Group has three reportable segments: oil and gas pipes, new energy and special seamless steel pipes, and other products[17](index=17&type=chunk) Segment Gross Profit (RMB thousand) | Segment | Six Months Ended June 30, 2025 (RMB thousand) | Six Months Ended June 30, 2024 (RMB thousand) | | :--- | :--- | :--- | | Gross Profit from Oil and Gas Pipes | 127,525 | 106,182 | | Gross Profit from New Energy and Special Seamless Steel Pipes | 25,214 | 18,281 | | Gross Profit from Other Products | – | – | | **Total Reportable Segment Gross Profit** | **152,739** | **124,463** | [Geographical Information](index=7&type=section&id=Geographical%20Information) The China market is the Group's primary revenue source, contributing RMB 1,475.5 million as of June 30, 2025, with year-on-year growth, while overseas market revenue declined, particularly in the Middle East and Africa Revenue by Region (RMB thousand) | Region | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | China | 1,475,540 | 1,227,931 | | Overseas: Middle East | 166,034 | 230,549 | | Overseas: Africa | 30,546 | 64,257 | | Overseas: Others | 21,506 | 16,717 | | **Total** | **1,693,626** | **1,539,454** | - Revenue from the China market increased year-on-year, while overseas market revenue, particularly in the Middle East and Africa, decreased[21](index=21&type=chunk) [Loss Before Tax](index=8&type=section&id=Loss%20Before%20Tax) For the six months ended June 30, 2025, the Group's loss before tax significantly narrowed to RMB 12.7 million from RMB 77.2 million in the prior period, with a slight increase in finance costs and a decrease in depreciation expenses and impairment losses on trade and other receivables [Finance Costs](index=8&type=section&id=Finance%20Costs) The Group's finance costs slightly increased by 0.5% to RMB 41.7 million, primarily due to interest expenses on borrowings and the capitalization of new loan costs for the second phase expansion Finance Costs (RMB thousand) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Interest Expense on Borrowings | 39,574 | 39,835 | | Interest Expense on Lease Liabilities | 113 | 186 | | Others | 2,037 | 1,517 | | **Total** | **41,724** | **41,538** | - Borrowing costs are capitalized at an annual interest rate of **3-4.59%**[22](index=22&type=chunk) [Other Items](index=8&type=section&id=Other%20Items) Depreciation expense for owned property, plant, and equipment decreased from RMB 64.6 million to RMB 59.9 million, impairment losses on trade and other receivables significantly dropped from RMB 8.8 million to RMB 1.8 million, while R&D costs slightly increased Other Items (RMB thousand) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Depreciation Expense – Owned Property, Plant and Equipment | 59,995 | 64,634 | | Depreciation Expense – Right-of-use Assets | 5,080 | 4,912 | | Impairment Loss on Trade and Other Receivables | 1,778 | 8,801 | | Research and Development Costs | 18,319 | 16,547 | | Cost of Inventories | 1,540,887 | 1,414,991 | - Impairment losses on trade and other receivables significantly decreased from **RMB 8.8 million** to **RMB 1.8 million**[23](index=23&type=chunk) [Income Tax](index=9&type=section&id=Income%20Tax) For the six months ended June 30, 2025, the Group incurred an income tax expense of RMB 2.2 million, compared to an income tax credit of RMB 7.6 million in the prior period, primarily due to profits generated by certain subsidiaries, with varying tax rates applied across regions and a 15% preferential tax rate for high-tech enterprises in China Income Tax (RMB thousand) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Current Tax | – | 2,153 | | Deferred Tax | 2,221 | (9,710) | | **Total** | **2,221** | **(7,557)** | - Subsidiaries in China (excluding Hong Kong) are subject to a **25%** corporate income tax rate, with high-tech enterprises enjoying a **15%** preferential tax rate[26](index=26&type=chunk) - No income tax provision was made for the Saudi Arabian subsidiary as it did not generate taxable profits[26](index=26&type=chunk) [Loss Per Share](index=10&type=section&id=Loss%20Per%20Share) For the six months ended June 30, 2025, both basic and diluted loss per share significantly narrowed to RMB 0.01 from RMB 0.05 in the prior period, with diluted loss not considering the impact of share options and share award schemes due to their anti-dilutive effect Loss Per Share (RMB) | Indicator | 2025 (RMB) | 2024 (RMB) | | :--- | :--- | :--- | | Basic Loss Per Share | (0.01) | (0.05) | | Diluted Loss Per Share | (0.01) | (0.05) | - Basic loss per share is calculated based on a loss attributable to equity holders of the company of **RMB 14,965,000** and a weighted average of **1,466,683,000** ordinary shares outstanding[27](index=27&type=chunk) - Diluted loss per share does not consider the impact of outstanding share options and share award schemes, as they have an anti-dilutive effect[29](index=29&type=chunk) [Trade and Bills Receivables](index=10&type=section&id=Trade%20and%20Bills%20Receivables) As of June 30, 2025, total trade receivables increased to RMB 794.5 million, while bills receivables significantly decreased to RMB 419.6 million, totaling RMB 1,207.5 million for trade and bills receivables, all expected to be recovered within one year, with some pledged as collateral for borrowings Trade and Bills Receivables (RMB thousand) | Item | As of June 30, 2025 (RMB thousand) | As of December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Trade Receivables | 794,481 | 466,922 | | Less: Loss Allowance | (6,663) | (5,977) | | Bills Receivables | 419,648 | 819,639 | | **Total** | **1,207,466** | **1,280,584** | - Trade receivables are generally due immediately and up to **90 days** after the invoice date[32](index=32&type=chunk) [Aging Analysis](index=11&type=section&id=Aging%20Analysis) As of June 30, 2025, trade receivables within 1 month and 1 to 3 months accounted for the largest portions, at RMB 298.9 million and RMB 318.4 million respectively, with an increase in receivables aged over 6 months Trade Receivables Aging Analysis (RMB thousand) | Aging | As of June 30, 2025 (RMB thousand) | As of December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Within 1 Month | 298,906 | 221,242 | | 1 to 3 Months | 318,424 | 195,637 | | 3 to 6 Months | 154,932 | 41,025 | | Over 6 Months | 15,556 | 3,041 | | **Total** | **787,818** | **460,945** | [Transferred Financial Assets](index=11&type=section&id=Transferred%20Financial%20Assets) The Group has discounted or endorsed some bank acceptance bills to settle payables and derecognized the related bills receivables, having transferred most risks and rewards; as of June 30, 2025, bank and trade acceptance bills with recourse not derecognized totaled RMB 219.5 million - The Group has derecognized certain discounted or endorsed bills receivables, as substantially all the risks and rewards of ownership have been transferred[34](index=34&type=chunk) Transferred Financial Assets (RMB thousand) | Item | As of June 30, 2025 (RMB thousand) | As of December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Bank Acceptance Bills (with recourse) | 160,771 | 407,627 | | Trade Acceptance Bills (with recourse) | 58,768 | 144,950 | | **Total** | **219,539** | **552,577** | [Trade and Bills Payables](index=12&type=section&id=Trade%20and%20Bills%20Payables) As of June 30, 2025, total trade and bills payables amounted to RMB 753.6 million, a decrease from RMB 837.9 million as of December 31, 2024, with all amounts expected to be settled within one year Trade and Bills Payables (RMB thousand) | Item | As of June 30, 2025 (RMB thousand) | As of December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Trade Payables | 730,563 | 819,081 | | Bills Payables | 23,008 | 18,840 | | **Total** | **753,571** | **837,921** | Trade and Bills Payables Aging Analysis (RMB thousand) | Aging | As of June 30, 2025 (RMB thousand) | As of December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Within 1 Month | 385,587 | 615,665 | | 1 to 3 Months | 303,092 | 151,682 | | 3 to 6 Months | 34,590 | 36,548 | | Over 6 Months | 30,302 | 34,026 | | **Total** | **753,571** | **837,921** | [Dividends](index=12&type=section&id=Dividends) The Board recommends no interim dividend for the six months ended June 30, 2025, with the final dividend for the previous financial year being zero HKD per ordinary share, compared to HKD 0.04 per share in the corresponding period of 2024 - The Board recommends no interim dividend for the six months ended June 30, 2025[38](index=38&type=chunk) Dividends (RMB thousand) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Final Dividend for Previous Financial Year (per ordinary share) | Zero HKD | 0.04 HKD (54,740) | [Management Discussion and Analysis](index=13&type=section&id=Management%20Discussion%20and%20Analysis) This section provides an overview of the Group's business performance, industry trends, strategic initiatives, and financial condition, offering insights into operational highlights and future outlook [Business Review](index=13&type=section&id=Business%20Review) The Group specializes in R&D, production, and sales of high-end energy pipes and special seamless steel pipes for oil, gas, and new energy sectors, continuously enhancing core competitiveness through R&D innovation, intelligent manufacturing, and ESG practices, with significant progress in its Hebei and Saudi Dammam base constructions during the reporting period [Principal Business and Operating Model](index=13&type=section&id=Principal%20Business%20and%20Operating%20Model) The Group, a national high-tech enterprise, focuses on R&D, production, technical services, and sales of high-end energy and special seamless steel pipes for oil, gas, shale gas, and new energy development, primarily operating on a "production-to-order" and direct sales model, expanding non-API specialized products through differentiation and customization - The Group's principal business is the R&D, production, technical services, and sales of high-end energy pipes and special seamless steel pipes for oil, natural gas, shale gas, and new energy sectors[40](index=40&type=chunk) - The operating model is primarily "production-to-order," with direct sales as the main sales model, actively expanding the scale of non-API specialized products[41](index=41&type=chunk) - New intelligent oil pipe production lines have been completed and are gradually commencing operation, enhancing product market competitiveness[41](index=41&type=chunk) [Industry Overview](index=13&type=section&id=Industry%20Overview) In H1 2025, the global energy pipe industry underwent structural adjustments, with temporary supply-demand imbalances and intensified competition for low-end products; the Middle East saw surging demand for seawater corrosion-resistant pipes, Southeast Asia for large-diameter steel pipes, and Europe/America for new energy supporting pipes, while domestic output remained resilient despite low average profit margins, with growing demand for high-end, specialized products, and a consensus on technological upgrades and green, low-carbon development - The global energy pipe industry experienced temporary supply-demand imbalances, with intensified homogeneous competition for low-end products[43](index=43&type=chunk) - The Middle East saw a surge in procurement of seawater corrosion-resistant pipes, Southeast Asia experienced increased demand for large-diameter steel pipes, and the European and American markets maintained growth in demand for new energy supporting pipes[44](index=44&type=chunk) - Domestic seamless steel pipe production increased by **3.2%** year-on-year, but the industry's average profit margin remained low, with growing demand for high-end and specialized products[46](index=46&type=chunk)[47](index=47&type=chunk) - Technological upgrades focus on developing high-value-added, high-corrosion-resistant products, intelligent manufacturing and digital transformation are core directions for industry upgrading, and green, low-carbon development has become an industry consensus[49](index=49&type=chunk)[50](index=50&type=chunk)[51](index=51&type=chunk) [Core Competitiveness Analysis](index=16&type=section&id=Core%20Competitiveness%20Analysis) The Group builds core competitiveness around technology and products, intelligent manufacturing, ESG, and talent development, with unique leading product sales surging over 300%, intelligent production lines achieving full-process digital management and unmanned operations, an A-grade ESG rating, and certifications for carbon management and green supply chain, while strengthening talent cultivation to support new production line construction - Sales of unique leading products surged by over **300%** year-on-year, with continuous optimization of product structure towards high-value-added and high-end directions[52](index=52&type=chunk) - New high-end oil drilling and energy equipment pipe production lines extensively apply digital technology and intelligent equipment, achieving digital management, intelligent control, and high-efficiency operation throughout the production process[53](index=53&type=chunk) - Achieved Huazheng ESG rating A and Wind ESG rating A, and passed on-site certification audits for both "Carbon Management System" and "Green Supply Chain Management System"[56](index=56&type=chunk) - Talent development is conducted with a focus on training-and-combat integration, combined with the integrated management platform and new production line projects, while ensuring human resource allocation[58](index=58&type=chunk)[59](index=59&type=chunk) [Progress of Core Production Base Construction](index=20&type=section&id=Progress%20of%20Core%20Production%20Base%20Construction) The new production line project at China's Hebei base is steadily advancing, with two intelligent oil pipe production lines and heat treatment lines in equipment debugging and trial production, and hot rolling and upsetting lines expected to commence production in Q3, significantly enhancing the intelligence and efficiency of oil pipe production; the Saudi Dammam base, a strategic international hub, is progressing smoothly, integrated into the Saudi Ministry of Energy's localization platform, and has appointed an experienced executive director - Two intelligent oil pipe production lines and heat treatment lines at the China Hebei base are in the equipment debugging and trial production phase, with the hot rolling line expected to commence production in the third quarter[60](index=60&type=chunk) - The new intelligent oil pipe production line achieves full-process intelligent manufacturing and digital management, increasing production efficiency by **35%** and reducing labor allocation by **30%**[60](index=60&type=chunk)[63](index=63&type=chunk) - The Saudi Dammam base project is progressing smoothly, has been integrated into the Saudi Ministry of Energy's localization platform, and an executive director with extensive local Saudi experience has been appointed[61](index=61&type=chunk) [Outlook](index=21&type=section&id=Outlook) The Group anticipates structural changes in the global energy equipment industry, with differentiated international market opportunities and growing domestic demand for special pipes driven by energy security strategies; the company will leverage its core strengths in technology R&D, industrial chain layout, and international foundation to focus on product structure upgrading, market expansion, operational efficiency optimization, and green and global synergy, reinforcing strategic support through technological innovation, digital empowerment, talent pipeline development, and resource integration to achieve sustainable long-term returns [Industry Environment and Market Trends](index=21&type=section&id=Industry%20Environment%20and%20Market%20Trends) The global energy equipment industry faces structural changes, with oil and gas development and new energy infrastructure in the Middle East driving demand for high-end products, and infrastructure projects in Southeast Asia creating incremental opportunities; the domestic market, driven by energy security strategies, sees rapid development in shale gas, offshore oil and gas, and hydrogen energy, generating rigid demand for special pipes, while technological innovation, intelligent manufacturing, and green transformation reshape the industry's competitive landscape, requiring companies to balance technological upgrades with cost control - Deepening oil and gas development and accelerating new energy infrastructure in the Middle East will continue to drive demand for high-end products such as high-grade oil casing[62](index=62&type=chunk) - The domestic market, driven by energy security strategies, sees rapid development in shale gas, offshore oil and gas exploration, and the hydrogen energy industry, creating rigid demand for special pipes with corrosion resistance and high-pressure tolerance[62](index=62&type=chunk) - Technological innovation, intelligent manufacturing, and green transformation are reshaping the industry's competitive landscape, requiring enterprises to strike a balance between technological upgrades and cost control[64](index=64&type=chunk) [Company Strategic Positioning and Competitive Advantages](index=22&type=section&id=Company%20Strategic%20Positioning%20and%20Competitive%20Advantages) The Group leverages three core advantages: as a national high-tech enterprise, it has achieved breakthroughs in unique products like sulfur-resistant casing and cutting-edge technologies; it possesses full-chain cost control capabilities through lean operations enabling flexible conversion between mass and customized production; and the establishment of the Saudi Dammam production base, coupled with the synergistic effect of the Hong Kong capital platform, provides a solid foundation for its globalization strategy - In technology R&D, the company has achieved mass supply of unique products such as sulfur-resistant casing and economic special connections, and made breakthrough progress in cutting-edge technologies[66](index=66&type=chunk) - In industrial chain layout, the company achieves flexible conversion between mass and customized production through a lean operation system, demonstrating strong full-chain cost control capabilities[66](index=66&type=chunk) - In internationalization, the establishment of the Saudi Dammam production base and breakthroughs in Middle East market access, coupled with the synergistic effect of the Hong Kong capital platform, provide a solid foundation for the globalization strategy[66](index=66&type=chunk) [Core Operating Strategies and Implementation Paths](index=22&type=section&id=Core%20Operating%20Strategies%20and%20Implementation%20Paths) In H2 2025, the Group will focus on product structure upgrading and technology reserves, increasing the proportion of high-value-added products and advancing hydrogen pipeline industrialization; deepen market expansion, targeting domestic shale gas and offshore oil and gas markets, and ensuring the Saudi Dammam base's international production; comprehensively optimize operational efficiency through a digital management platform and cost reduction initiatives to achieve profit targets; and accelerate green and global dual-track synergy, applying green power substitution technologies and deepening resource linkage between the Middle East base and the Hong Kong capital platform - Product structure upgrading and technology reserves: increase the proportion of high-value-added products such as sulfur/hydrogen/CO2 corrosion-resistant pipes, and promote the industrialization of hydrogen pipeline pipes[65](index=65&type=chunk) - Deepen market expansion: domestically focus on shale gas and offshore oil and gas markets, and internationally fully ensure the timely commissioning of the Saudi Dammam base[67](index=67&type=chunk) - Comprehensive optimization of operational efficiency: integrate data through a digital management platform, shorten manufacturing cycles, and focus on process innovation, human efficiency improvement, and intensive energy management[68](index=68&type=chunk) - Green and globalization dual-track synergy: accelerate the application of green power substitution technologies and deepen resource linkage between the Middle East base and the Hong Kong capital platform[69](index=69&type=chunk) [Strategic Support System](index=23&type=section&id=Strategic%20Support%20System) To achieve strategic goals, the Group will strengthen its technology innovation and commercialization mechanism, aligning R&D resources with market demand; deepen its digital empowerment system to achieve optimized production scheduling, quality traceability, and information-based customer service; build a talent pipeline to meet new production line needs and improve incentive mechanisms; and enhance resource integration capabilities through external cooperation and internal capital optimization - Technology innovation and commercialization mechanism: drive R&D resources towards market demand, breaking through production line extreme specifications and unit process upgrade bottlenecks[70](index=70&type=chunk) - Digital empowerment system: deepen the application of the management platform to achieve full-process information integration for production scheduling optimization, quality traceability, and customer service[70](index=70&type=chunk) - Talent pipeline development: align with new production line requirements, organize professional technical training and on-the-job practice, and improve talent selection and performance incentive mechanisms[70](index=70&type=chunk) - Resource integration capability: form synergistic effects through external cooperation and internal capital optimization[70](index=70&type=chunk) [Development Outlook](index=24&type=section&id=Development%20Outlook) In H2 2025, the Group will leverage technological differentiation, lean operations, and global layout as core drivers, breaking through homogeneous competition with high-end products, building dual barriers in cost and delivery through intelligent production lines and the Middle East strategic base, committed to achieving technological leadership and value creation in the energy equipment sector, and generating sustainable long-term returns for shareholders - Core drivers include technological differentiation, lean operations, and global layout[71](index=71&type=chunk) - Break through homogeneous competition with high-end products, building dual barriers in cost and delivery through intelligent production lines and the Middle East strategic base[71](index=71&type=chunk) - Steadfastly advance technological leadership and value creation in the energy equipment sector, generating sustainable long-term returns for shareholders[71](index=71&type=chunk) [Financial Review](index=24&type=section&id=Financial%20Review) This section provides a detailed analysis of the Group's financial performance, including revenue, costs, profitability, and financial position, highlighting key drivers and changes during the reporting period [Revenue](index=24&type=section&id=Revenue) The Group's total revenue for the reporting period was RMB 1,693.6 million, a 10.0% year-on-year increase, primarily due to sales volume growth, with oil and gas pipe revenue up 7.4% and new energy/special seamless steel pipe revenue up 14.9%; domestic sales revenue grew 20.2%, while international sales revenue decreased 30.0% due to geopolitical and other factors Revenue by Product Category (RMB million) | Product Category | 2025 Sales (RMB million) | 2024 Sales (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Oil and Gas Pipes | 1,078.7 | 1,004.4 | 7.4% | | New Energy and Special Seamless Steel Pipes | 614.9 | 535.1 | 14.9% | | **Total** | **1,693.6** | **1,539.5** | **10.0%** | Revenue by Sales Region (RMB million) | Sales Region | 2025 Sales (RMB million) | 2024 Sales (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Domestic Sales | 1,475.5 | 1,228.0 | 20.2% | | International Sales | 218.1 | 311.5 | (30.0%) | | **Total** | **1,693.6** | **1,539.5** | **10.0%** | - International sales decreased by **30.0%**, primarily due to negative factors such as geopolitical issues, economic policies, and fluctuations in regional energy exploration investments[76](index=76&type=chunk) [Cost of Sales](index=25&type=section&id=Cost%20of%20Sales) Cost of sales for the reporting period was RMB 1,540.9 million, an 8.9% increase year-on-year, primarily driven by higher sales volume and optimized product structure - Cost of sales was **RMB 1,540.9 million**, a year-on-year increase of **8.9%**, primarily due to increased sales volume and optimized product structure[77](index=77&type=chunk) [Gross Profit and Gross Profit Margin](index=25&type=section&id=Gross%20Profit%20and%20Gross%20Profit%20Margin) The Group's total gross profit was RMB 152.7 million, an increase of RMB 28.2 million year-on-year, with the overall gross profit margin rising 0.9 percentage points to 9.0% from 8.1% in the prior period, primarily due to optimized product sales structure and a higher proportion of high-value-added products Gross Profit and Gross Profit Margin (RMB million) | Indicator | 2025 (RMB million) | 2024 (RMB million) | Change (RMB million) | | :--- | :--- | :--- | :--- | | Total Gross Profit | 152.7 | 124.5 | 28.2 | | Gross Profit Margin | 9.0% | 8.1% | +0.9 percentage points | - The increase in gross profit margin was primarily due to optimized product sales structure and a higher proportion of high-value-added products[78](index=78&type=chunk) [Other Income](index=25&type=section&id=Other%20Income) Other income for the reporting period was RMB 30.4 million, an increase of RMB 3.1 million year-on-year, primarily due to higher VAT and other tax refunds - Other income increased by **RMB 3.1 million** to **RMB 30.4 million**, primarily due to increased VAT and other tax refunds[79](index=79&type=chunk) [Selling Expenses](index=26&type=section&id=Selling%20Expenses) Selling expenses were RMB 61.4 million, a decrease of approximately 22.5% year-on-year, primarily due to reduced sea freight, port charges, and commissions resulting from lower overseas sales volume - Selling expenses decreased by approximately **22.5%** to **RMB 61.4 million**, primarily due to reduced overseas sales volume[80](index=80&type=chunk) [Administrative Expenses](index=26&type=section&id=Administrative%20Expenses) Administrative expenses were RMB 92.7 million, a decrease of approximately 14.4% year-on-year, primarily due to reduced bad debts, staff costs, and equity-settled share-based payment expenses - Administrative expenses decreased by approximately **14.4%** to **RMB 92.7 million**, primarily due to reduced bad debts, staff costs, and share-based payment expenses[81](index=81&type=chunk) [Finance Costs](index=26&type=section&id=Finance%20Costs) The Group's finance costs were RMB 41.7 million, a slight increase of 0.5% year-on-year, primarily due to stable loan interest rates and the capitalization of new loan costs for the second phase expansion - Finance costs slightly increased by **0.5%** to **RMB 41.7 million**, primarily due to stable loan interest rates and the capitalization of new loan costs for the second phase expansion[82](index=82&type=chunk) [Income Tax](index=26&type=section&id=Income%20Tax) Income tax expense for the reporting period was RMB 2.2 million, compared to an income tax credit of RMB 7.6 million in the prior period, primarily due to profits generated by the Group's subsidiaries - Income tax expense was **RMB 2.2 million**, compared to an income tax credit of **RMB 7.6 million** in the prior period, primarily due to profits generated by subsidiaries[83](index=83&type=chunk) [Loss for the Period](index=26&type=section&id=Loss%20for%20the%20Period) The Group's loss for the period significantly narrowed by 78.5% to RMB 15.0 million, from a loss of RMB 69.7 million in the prior period, with improved financial performance primarily attributed to continuous optimization of product and market structures and enhanced competitiveness - Loss for the period significantly narrowed by **78.5% to RMB 15.0 million**[84](index=84&type=chunk) - Improved financial performance is primarily due to continuous optimization and adjustment of product and market structures, and enhanced competitiveness[84](index=84&type=chunk) [Non-IFRS Financial Measures](index=26&type=section&id=Non-IFRS%20Financial%20Measures) The company uses adjusted net loss and adjusted net loss margin as non-IFRS financial measures to supplement the consolidated financial statements presented under IFRS, which aid in comparing operating performance across periods and companies and provide additional information to investors, but are not substitutes for IFRS operating results or financial position - Adjusted net loss and adjusted net loss margin are used as additional non-IFRS financial measures[85](index=85&type=chunk) - These measures aid in comparing operating performance but are not substitutes for IFRS operating results or financial position[86](index=86&type=chunk) Non-IFRS Financial Measures (RMB million) | Indicator | 2025 (RMB million) | 2024 (RMB million) | | :--- | :--- | :--- | | Loss for the Period | (15.0) | (69.7) | | Add: Equity-settled Share-based Payment Expenses | 6.1 | 14.6 | | **Adjusted Net Loss (Non-IFRS)** | **(8.9)** | **(55.1)** | [Capital Expenditure](index=27&type=section&id=Capital%20Expenditure) During the reporting period, the Group's investment in property, plant, and equipment was RMB 505.8 million, a significant increase from RMB 158.4 million in the prior period, primarily due to increased expenditures for the second phase expansion - Investment in property, plant, and equipment was **RMB 505.8 million**, a significant increase from **RMB 158.4 million** in the prior period[88](index=88&type=chunk) - The increase in capital expenditure was primarily due to increased expenses for the second phase expansion[88](index=88&type=chunk) [Liquidity, Financial Resources and Capital Structure](index=27&type=section&id=Liquidity%2C%20Financial%20Resources%20and%20Capital%20Structure) As of June 30, 2025, bank and cash balances were RMB 355.5 million, with total interest-bearing borrowings at RMB 2,522.9 million, and an increased proportion of long-term borrowings; the debt-to-equity ratio rose to 166.1%, and the current ratio increased to 1.15, indicating improved liquidity Liquidity, Financial Resources and Capital Structure (RMB million) | Indicator | As of June 30, 2025 (RMB million) | As of December 31, 2024 (RMB million) | | :--- | :--- | :--- | | Bank and Cash Balances | 355.5 | 412.1 | | Total Interest-bearing Borrowings | 2,522.9 | 2,212.6 | | Long-term Borrowings | 1,395.6 | 696.8 | | Short-term Borrowings | 1,127.3 | 1,515.8 | | Debt-to-Equity Ratio | 166.1% | 136.9% | | Current Ratio | 1.15 | 1.02 | - The debt-to-equity ratio increased by **29.2 percentage points** to **166.1%**, primarily due to increased borrowings and a reduction in equity from losses[90](index=90&type=chunk) - The current ratio increased from **1.02** as of December 31, 2024, to **1.15** as of June 30, 2025[91](index=91&type=chunk) [Employees and Remuneration Policy](index=28&type=section&id=Employees%20and%20Remuneration%20Policy) As of June 30, 2025, the Group had 1,934 employees, with total staff costs of RMB 131.5 million; the company prioritizes employee training, offers competitive remuneration, and has adopted share option and share award schemes to incentivize staff Employees and Staff Costs (RMB million) | Indicator | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Number of Employees | 1,934 | 1,774 | | Total Staff Costs (RMB million) | 131.5 | 119.1 | - The company offers competitive remuneration packages and has adopted share option schemes and share award schemes to incentivize employees[92](index=92&type=chunk) [Pledge of Assets](index=28&type=section&id=Pledge%20of%20Assets) As of June 30, 2025, the Group's property, plant, and equipment with a carrying amount of RMB 1,104.4 million, and other movable assets of RMB 638.5 million, have been pledged as collateral for bank borrowings Pledged Assets (RMB million) | Pledged Assets | As of June 30, 2025 (RMB million) | As of December 31, 2024 (RMB million) | | :--- | :--- | :--- | | Property, Plant and Equipment | 1,104.4 | 1,131.8 | | Other Movable Assets | 638.5 | 755.9 | [Foreign Exchange Risk](index=28&type=section&id=Foreign%20Exchange%20Risk) The Group's operations are primarily in China and denominated in RMB; with developing export business, the company uses forward foreign exchange contracts to mitigate currency fluctuation risks, expecting no significant adverse impact from exchange rate changes but will closely monitor and take necessary measures - The Group's operations are primarily conducted in China and denominated in RMB, with foreign exchange risk mitigated through forward foreign exchange contracts[94](index=94&type=chunk) - Expected exchange rate changes will not have a significant adverse impact on the Group, but will be closely monitored with appropriate measures taken when necessary[94](index=94&type=chunk) [Other Information](index=29&type=section&id=Other%20Information) This section covers additional disclosures including material investments, contingent liabilities, dividends, securities transactions, post-reporting period events, corporate governance, and board composition [Material Investments and Acquisitions/Disposals](index=29&type=section&id=Material%20Investments%20and%20Acquisitions%2FDisposals) During the reporting period, the Group held no material investments and made no significant acquisitions or disposals of subsidiaries, associates, or joint ventures; apart from the ongoing second phase expansion, there are no specific future plans for material investments or capital assets as of the announcement date - During the reporting period, the Group held no material investments and made no significant acquisitions or disposals[95](index=95&type=chunk) - Apart from the ongoing second phase expansion, there are no specific future plans for material investments or capital assets[95](index=95&type=chunk) [Contingent Liabilities](index=29&type=section&id=Contingent%20Liabilities) As of June 30, 2025, the Group had no contingent liabilities - As of June 30, 2025, the Group had no contingent liabilities[96](index=96&type=chunk) [Interim Dividend](index=29&type=section&id=Interim%20Dividend) The Board does not recommend the payment of an interim dividend for the reporting period - The Board does not recommend the payment of an interim dividend for the reporting period[97](index=97&type=chunk) [Purchase, Sale or Redemption of Listed Securities](index=29&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20Listed%20Securities) During the reporting period, the trustee of the share award scheme purchased shares to fulfill share awards; otherwise, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities - The trustee of the share award scheme purchased shares to fulfill share awards[98](index=98&type=chunk) - Other than the above, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities[98](index=98&type=chunk) [Events After Reporting Period](index=29&type=section&id=Events%20After%20Reporting%20Period) No material events occurred after the end of the reporting period and up to the date of this announcement - No material events occurred after the end of the reporting period and up to the date of this announcement[99](index=99&type=chunk) [Corporate Governance Practices](index=29&type=section&id=Corporate%20Governance%20Practices) During the reporting period, the company applied and complied with all provisions contained in Part 2 of the Corporate Governance Code - During the reporting period, the company applied and complied with all provisions contained in Part 2 of the Corporate Governance Code[100](index=100&type=chunk) [Standard Code for Securities Transactions by Directors](index=29&type=section&id=Standard%20Code%20for%20Securities%20Transactions%20by%20Directors) The company has adopted a code of conduct for directors' securities transactions, with terms no less stringent than those required by the Model Code, and all directors have confirmed compliance throughout the reporting period - The company has adopted a code of conduct for directors' securities transactions, with terms no less stringent than those required by the Model Code[101](index=101&type=chunk) - All directors have confirmed compliance with the required standards set out in the Model Code and the company's relevant code of conduct throughout the reporting period[101](index=101&type=chunk) [Review of Interim Results](index=30&type=section&id=Review%20of%20Interim%20Results) The company's Audit and Risk Management Committee reviewed the Group's accounting principles and practices with management, discussing audit, internal control, risk management, and financial reporting matters, including the unaudited interim financial statements, with no disagreements, and the external auditor reviewed the interim financial report in accordance with Hong Kong Standard on Review Engagements 2410 - The Audit and Risk Management Committee has reviewed the interim financial statements with no disagreements[102](index=102&type=chunk) - The external auditor has reviewed the interim financial report in accordance with Hong Kong Standard on Review Engagements 2410[102](index=102&type=chunk) [Glossary](index=30&type=section&id=Glossary) This section provides definitions for key terms and abbreviations used in the report, including company, Group, Board, Corporate Governance Code, Listing Rules, Share Award Scheme, Share Option Scheme, Second Phase Expansion, and RMB - Definitions for key terms and abbreviations used in the report are provided[102](index=102&type=chunk)[103](index=103&type=chunk) [Board of Directors](index=31&type=section&id=Board%20of%20Directors) As of the announcement date, the Board of Directors includes executive directors Mr. Meng Fanyong (Chairman), Mr. Zhang Hongyao, Ms. Xu Wenhong, Mr. Meng Yuxiang, and Mr. Al Gosaibi, Saud Yousif M; non-executive director Mr. Yin Zhixiang; and independent non-executive directors Mr. Guo Kaiqi, Mr. Wang Zhirong, and Mr. Cheng Haitao - The Board of Directors comprises executive directors, a non-executive director, and independent non-executive directors[105](index=105&type=chunk) - Mr. Al Gosaibi, Saud Yousif M is a newly appointed executive director[105](index=105&type=chunk)

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不負責，對其準確性或完整性亦不發表任何聲 明，並明確表示，概不對因本公告全部或任何部份內容而產生或因倚賴該等內容而引致的任何損失承擔任何責任。 SHOUGANG CENTURY HOLDINGS LIMITED 首 佳 科 技 製 造 有 限 公 司 （於香港註冊成立之有限公司） （股份代號：103） 截至二零二五年六月三十日止六個月之中期業績 董事會提呈本集團截至二零二五年六月三十日止六個月之未經審核綜合中期業績如下： 簡明綜合全面收益表 截至二零二五年六月三十日止六個月 | | | 六月三十日止六個月 | | | --- | --- | --- | --- | | | | 二零二五年 | 二零二四年 | | | | (未經審核) | (未經審核) | | | 附註 | 港幣千元 | 港幣千元 | | 營業額 | 5 | 1,159,711 | 1,260,697 | | 銷售成本 | 7 | (993,675) | (1,062,862) | | 毛利 | | 166,036 | 197,835 | | 其他收入 | 5 | 9,111 | ...

[Condensed Consolidated Financial Statements](index=1&type=section&id=Condensed%20Consolidated%20Financial%20Statements) [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=1&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) Total revenue for the period was **174,000 thousand HKD**, a **12.6% decrease**, with gross profit at **35,904 thousand HKD** and a **20.6%** margin, and loss significantly narrowed to **22,834 thousand HKD** | Metric | June 30, 2025 (thousand HKD) | June 30, 2024 (thousand HKD) | Change (%) | | :--- | :--- | :--- | :--- | | Total Revenue | 174,000 | 199,197 | -12.6% | | Cost of Sales and Services | (138,096) | (155,729) | -11.3% | | Gross Profit | 35,904 | 43,468 | -17.4% | | Loss Before Tax | (24,629) | (39,534) | -37.7% | | Loss for the Period | (22,834) | (40,109) | -43.1% | | Loss for the Period Attributable to Owners of the Company | (22,602) | (40,056) | -43.6% | | Basic Loss Per Share (HK cents) | (8.9) | (15.8) | -43.7% | [Condensed Consolidated Statement of Financial Position](index=4&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, total assets were **1,066,906 thousand HKD**, a slight decrease from December 31, 2024, with net current assets at **366,099 thousand HKD** and net assets at **613,523 thousand HKD** | Metric | June 30, 2025 (thousand HKD) | December 31, 2024 (thousand HKD) | Change (%) | | :--- | :--- | :--- | :--- | | Non-current Assets | 330,861 | 331,485 | -0.2% | | Current Assets | 736,045 | 745,608 | -1.3% | | Current Liabilities | 369,946 | 367,337 | +0.7% | | Net Current Assets | 366,099 | 378,271 | -3.2% | | Net Assets | 613,523 | 625,790 | -1.96% | [Condensed Consolidated Statement of Changes in Equity](index=6&type=section&id=Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) Total equity attributable to owners of the company decreased from **629,607 thousand HKD** to **617,685 thousand HKD**, primarily due to the **22,602 thousand HKD** loss for the period, partially offset by exchange differences from translating overseas operations | Metric | June 30, 2025 (thousand HKD) | January 1, 2024 (thousand HKD) | Change (thousand HKD) | | :--- | :--- | :--- | :--- | | Total Attributable to Owners of the Company (End of Period) | 617,685 | 629,607 | -11,922 | | Loss for the Period | (22,602) | (40,056) | +17,454 | | Exchange Differences Arising from Translating Overseas Operations | 10,680 | (8,380) | +19,060 | [Notes to the Condensed Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) [Basis of Preparation and Principal Accounting Policies](index=7&type=section&id=Basis%20of%20Preparation%20and%20Principal%20Accounting%20Policies) The condensed consolidated financial statements are prepared in accordance with HKAS 34 and Listing Rules, using historical cost basis, with investment properties and certain financial instruments measured at fair value - The condensed consolidated financial statements are prepared in accordance with HKAS 34 and the Listing Rules, adopting a historical cost basis, except for investment properties and certain financial instruments measured at fair value[10](index=10&type=chunk)[11](index=11&type=chunk) - Revisions to Hong Kong Financial Reporting Standards adopted for the first time in the current period, such as amendments to HKAS 21, have **no significant impact** on the Group's financial position or performance[12](index=12&type=chunk) [Revenue Analysis](index=8&type=section&id=Revenue%20Analysis) The Group's total revenue was **174,000 thousand HKD**, primarily from manufacturing and sales, which saw a decline, with China being the largest market and Europe showing significant growth, while several segments continued to report losses - The Group's total revenue was **174,000 thousand HKD**, a **12.6% decrease** from the prior period, mainly due to a decline in manufacturing and sales business revenue[4](index=4&type=chunk)[55](index=55&type=chunk) - China was the **largest source of revenue**, and revenue from Europe increased by **36.5%** to **16,960 thousand HKD**[16](index=16&type=chunk) - Manufacturing and sales, property development, and property investment businesses continued to record segment losses, while the securities trading business turned from loss to profit[20](index=20&type=chunk)[55](index=55&type=chunk) Revenue from Goods and Services Total revenue from goods and services was **169,206 thousand HKD**, a **12.4% decrease** year-on-year, with printing and other product manufacturing and sales being the largest component but declining, and China as the primary market with notable growth in Europe | Type of Goods or Services | June 30, 2025 (thousand HKD) | June 30, 2024 (thousand HKD) | Change (%) | | :--- | :--- | :--- | :--- | | Printing and Other Product Manufacturing and Sales | 157,785 | 177,671 | -11.2% | | Music Works Licensing Income | 1,513 | 1,408 | +7.5% | | Record Sales | 152 | 217 | -29.9% | | Sales of Printing and Other Products (Trading) | 9,755 | 13,523 | -27.9% | | **Total** | **169,206** | **193,008** | **-12.4%** | | Timing of Revenue Recognition | June 30, 2025 (thousand HKD) | June 30, 2024 (thousand HKD) | Change (%) | | :--- | :--- | :--- | :--- | | Over Time | 157,785 | 177,671 | -11.2% | | At a Point in Time | 11,421 | 15,337 | -25.6% | Segment Information The Group operates seven business segments, with manufacturing and sales remaining the largest revenue contributor, and overall segment losses narrowing due to improved performance in property investment - The Group operates seven business segments: money lending, manufacturing and sales, music and entertainment, property development, property investment, securities trading, and trading businesses[19](index=19&type=chunk) - Manufacturing and sales business remains the **largest source of revenue**, accounting for **90.7%** of total revenue[20](index=20&type=chunk) - Total segment loss narrowed from **32,175 thousand HKD** in the prior period to **15,239 thousand HKD** in the current period, primarily due to a significant reduction in property investment business losses[20](index=20&type=chunk) Revenue by Source | Revenue Source | June 30, 2025 (thousand HKD) | June 30, 2024 (thousand HKD) | Change (%) | | :--- | :--- | :--- | :--- | | From Goods and Services | 169,206 | 193,008 | -12.4% | | Rental Income | 3,914 | 3,827 | +2.3% | | Interest Income from Money Lending Business | 880 | 2,362 | -62.7% | | **Total Revenue** | **174,000** | **199,197** | **-12.6%** | Revenue by Geographical Market | Geographical Market | June 30, 2025 (thousand HKD) | June 30, 2024 (thousand HKD) | Change (%) | | :--- | :--- | :--- | :--- | | Hong Kong | 39,149 | 70,384 | -44.4% | | China | 90,774 | 88,989 | +2.0% | | Europe | 16,960 | 12,421 | +36.5% | | United States | 17,603 | 20,108 | -12.4% | | Other | 4,720 | 1,106 | +326.8% | Segment Profit/Loss | Business Segment | June 30, 2025 (thousand HKD) | June 30, 2024 (thousand HKD) | Change (thousand HKD) | | :--- | :--- | :--- | :--- | | Money Lending Business (Loss) | (337) | 1,266 | -1,603 | | Manufacturing and Sales Business (Loss) | (5,095) | (8,617) | +3,522 | | Music and Entertainment Business (Loss) | (52) | (1,409) | +1,357 | | Property Development Business (Loss) | (5,902) | (6,977) | +1,075 | | Property Investment Business (Loss) | (4,199) | (12,193) | +7,994 | | Securities Trading Business (Profit) | 1,109 | (3,835) | +4,944 | | Trading Business (Loss) | (763) | (410) | -353 | | **Total (Loss)** | **(15,239)** | **(32,175)** | **+16,936** | Segment Assets and Liabilities | Business Segment | June 30, 2025 (thousand HKD) | December 31, 2024 (thousand HKD) | Change (%) | | :--- | :--- | :--- | :--- | | Total Segment Assets | 852,308 | 860,636 | -0.97% | | Total Segment Liabilities | 433,064 | 427,330 | +1.34% | [Finance Costs and Taxation](index=13&type=section&id=Finance%20Costs%20and%20Taxation) Total finance costs for the period increased to **3,597 thousand HKD**, mainly from bank borrowing interest, while the Group recorded a **1,795 thousand HKD** tax credit primarily due to deferred tax credits | Finance Cost Item | June 30, 2025 (thousand HKD) | June 30, 2024 (thousand HKD) | Change (%) | | :--- | :--- | :--- | :--- | | Interest Expense on Lease Liabilities | 1,129 | 946 | +19.3% | | Interest Expense on Bank Borrowings | 2,468 | 2,202 | +12.1% | | **Total Finance Costs** | **3,597** | **3,148** | **+14.3%** | | Tax Item | June 30, 2025 (thousand HKD) | June 30, 2024 (thousand HKD) | Change (thousand HKD) | | :--- | :--- | :--- | :--- | | China Corporate Income Tax Expense | (764) | (575) | -189 | | Deferred Tax Credit | 2,559 | – | +2,559 | | **Tax Credit (Expense)** | **1,795** | **(575)** | **+2,370** | - Hong Kong profits tax is calculated at **16.5%**, while the tax rate for PRC subsidiaries is **25%**[26](index=26&type=chunk) [Loss for the Period and Loss Per Share](index=14&type=section&id=Loss%20for%20the%20Period%20and%20Loss%20Per%20Share) The loss for the period significantly narrowed to **22,834 thousand HKD**, after accounting for depreciation, net foreign exchange gains, fair value changes in financial assets, and investment properties, with no dividends declared and a basic loss per share of **8.9 HK cents** | Item | June 30, 2025 (thousand HKD) | June 30, 2024 (thousand HKD) | Change (thousand HKD) | | :--- | :--- | :--- | :--- | | Depreciation of Property, Plant and Equipment | 13,158 | 15,794 | -2,636 | | Net Foreign Exchange Gains | (400) | (147) | -253 | | Fair Value (Increase) Decrease in Financial Assets at FVTPL | (1,358) | 3,683 | -5,041 | | Fair Value Decrease in Investment Properties | 4,021 | 12,684 | -8,663 | - The Directors do not recommend the payment of an interim dividend for the current interim period[30](index=30&type=chunk) | Metric | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Loss for the Period Attributable to Owners of the Company (thousand HKD) | (22,602) | (40,056) | | Number of Shares in Issue | 253,359,456 | 253,359,456 | | Basic Loss Per Share (HK cents) | (8.9) | (15.8) | [Changes in Assets and Liabilities](index=16&type=section&id=Changes%20in%20Assets%20and%20Liabilities) Property, plant and equipment acquisitions increased, investment property fair value decrease narrowed, and additions to properties under development for sale significantly decreased, while the Qingyuan land freezing order was extended, listed equity investments increased, trade receivables decreased, and contract liabilities significantly rose - Acquisitions of property, plant and equipment increased to **1,892 thousand HKD** (prior period: **546 thousand HKD**)[34](index=34&type=chunk) - The fair value decrease in investment properties narrowed to **4,021 thousand HKD** from **12,684 thousand HKD** in the prior period, mainly due to reduced market rental transactions for comparable properties[35](index=35&type=chunk) - Total additions to properties under development for sale were approximately **8,512 thousand HKD**, a significant decrease from **81,625 thousand HKD** in the prior period[40](index=40&type=chunk) - The freezing order for the Qingyuan land was extended again to **May 12, 2028**[40](index=40&type=chunk) Financial Assets | Financial Asset Type | June 30, 2025 (thousand HKD) | December 31, 2024 (thousand HKD) | Change (%) | | :--- | :--- | :--- | :--- | | Equity Instruments at FVTOCI | 13,176 | 13,088 | +0.7% | | Financial Assets at FVTPL (Listed Equity Investments) | 10,984 | 9,488 | +15.8% | Receivables | Receivable Type | June 30, 2025 (thousand HKD) | December 31, 2024 (thousand HKD) | Change (%) | | :--- | :--- | :--- | :--- | | Total Trade Receivables | 107,346 | 129,733 | -17.3% | | Total Trade and Other Receivables, Prepayments and Deposits | 159,514 | 176,194 | -9.5% | Liabilities | Liability Type | June 30, 2025 (thousand HKD) | December 31, 2024 (thousand HKD) | Change (%) | | :--- | :--- | :--- | :--- | | Total Trade Payables | 52,148 | 57,556 | -9.3% | | Accrued Construction Costs for Properties Under Development for Sale | 85,459 | 102,352 | -16.5% | | Total Contract Liabilities | 61,793 | 20,519 | +201.2% | [Financial Guarantees](index=23&type=section&id=Financial%20Guarantees) The Group provides stage guarantees for mortgage loans to purchasers of properties under development for sale, increasing contingent liabilities, but management assesses the fair value and expected credit losses of these guarantees as not material - The Group provides stage guarantees for mortgage loans to purchasers of properties under development for sale, with guaranteed amounts of approximately **56,930 thousand HKD** (December 31, 2024: **18,020 thousand HKD**)[52](index=52&type=chunk) - Management assesses that the fair value and expected credit losses of the financial guarantees at initial recognition are **not material**[52](index=52&type=chunk) [Management Discussion and Analysis](index=24&type=section&id=Management%20Discussion%20and%20Analysis) [Overall Financial Performance Review](index=24&type=section&id=Overall%20Financial%20Performance%20Review) Total revenue for the period was approximately **174,000 thousand HKD**, a **12.6% decrease**, with gross profit at **35,900 thousand HKD** and a **20.6%** margin, while loss significantly narrowed to **22,800 thousand HKD** due to reduced segment losses | Metric | June 30, 2025 (thousand HKD) | June 30, 2024 (thousand HKD) | Change (%) | | :--- | :--- | :--- | :--- | | Total Revenue | 174,000 | 199,200 | -12.6% | | Gross Profit | 35,900 | 43,500 | -17.5% | | Gross Profit Margin | 20.6% | 21.8% | -1.2 percentage points | | Loss for the Period | 22,800 | 40,100 | -43.1% | - The narrowing of the loss for the period was primarily attributable to reduced segment losses in the manufacturing and sales, property development, and property investment businesses[55](index=55&type=chunk) [Operations Review and Outlook](index=25&type=section&id=Operations%20Review%20and%20Outlook) The Group's diverse business segments showed varied performance, with money lending experiencing a significant decline, manufacturing and sales improving due to bad debt recovery, property development progressing on Zhongxing Industrial Park, property investment seeing slight rental growth, securities trading turning profitable, and trading business facing increased losses - Money lending business interest income decreased by **62.7%**, resulting in a segment loss, mainly due to a reduction in the loan portfolio and suspension of interest accrual on some loans[59](index=59&type=chunk) - Manufacturing and sales business revenue decreased by **11.2%**, but segment loss narrowed, primarily benefiting from a **one-time recovery of approximately 5,000 thousand HKD** in bad debt[63](index=63&type=chunk)[65](index=65&type=chunk) - In property development, approximately **70%** of Zhongxing Industrial Park's construction is complete, with sales agreements signed for approximately **3,300 square meters** and **24,000 square meters** expected for delivery in the second half of the year[74](index=74&type=chunk)[75](index=75&type=chunk) - Securities trading business recorded fair value gains of approximately **1,400 thousand HKD** and realized gains of approximately **387 thousand HKD**, turning from loss to profit[83](index=83&type=chunk) [Money Lending Business](index=25&type=section&id=Money%20Lending%20Business) The Group's money lending business, operated by Huatai Financial International Limited, saw new loans totaling **6,100 thousand HKD** at an average annual interest rate of **18%**, but interest income decreased by **62.7%** to **880 thousand HKD**, resulting in a **337 thousand HKD** segment loss, with legal actions initiated for **27,200 thousand HKD** in receivables - The money lending business is operated by the wholly-owned subsidiary, Huatai Financial International Limited, with all loan applications subject to internal guideline approval[56](index=56&type=chunk) | Metric | June 30, 2025 | June 30, 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Total New Loans Granted | 6,100 thousand HKD | N/A | N/A | | Average Annual Interest Rate | 18% | N/A | N/A | | Loan Interest Income | 880 thousand HKD | 2,400 thousand HKD | -62.7% | | Segment Loss (Prior Period Profit) | (337 thousand HKD) | 1,300 thousand HKD | -125.9% | - Legal actions have been initiated for outstanding loans with a principal amount of approximately **27,200 thousand HKD**, of which approximately **24,200 thousand HKD** has been impaired[60](index=60&type=chunk) - The Group plans to continue collaborating with other lending companies to offer more borrowing and collateral options, while prudently expanding its loan portfolio[62](index=62&type=chunk) [Manufacturing and Sales Business](index=27&type=section&id=Manufacturing%20and%20Sales%20Business) Segment revenue decreased by **11.2%** to **157,800 thousand HKD**, primarily due to reduced orders for packaging and labeling products from overseas and domestic clients, impacted by US tariffs, domestic competition, and decreased consumer purchasing power, but segment loss narrowed to **5,100 thousand HKD** due to a **5,000 thousand HKD** bad debt recovery | Metric | June 30, 2025 (thousand HKD) | June 30, 2024 (thousand HKD) | Change (%) | | :--- | :--- | :--- | :--- | | Segment Revenue | 157,800 | 177,700 | -11.2% | | Segment Loss | (5,100) | (8,600) | +40.7% | | Segment Gross Profit Margin | 17.0% | 17.9% | -0.9 percentage points | - The revenue decrease was mainly affected by US reciprocal tariffs, intensified domestic competition in China's printing market, and reduced consumer purchasing power[63](index=63&type=chunk) - The primary driver for improved performance is a **one-time recovery of approximately 5,000 thousand HKD** in bad debt from a US customer[65](index=65&type=chunk) - The Group is implementing measures to enhance production efficiency, reduce operating costs, strengthen procurement capabilities, streamline workflows, and expand its sales team to address market challenges[65](index=65&type=chunk)[66](index=66&type=chunk) [Music and Entertainment Business](index=29&type=section&id=Music%20and%20Entertainment%20Business) Segment revenue decreased by **8.2%** to **1,700 thousand HKD**, mainly due to reduced record sales and event income, but segment loss significantly narrowed to **52 thousand HKD** due to increased gross profit margin and cost-cutting measures | Metric | June 30, 2025 (thousand HKD) | June 30, 2024 (thousand HKD) | Change (%) | | :--- | :--- | :--- | :--- | | Segment Revenue | 1,700 | 1,800 | -8.2% | | Segment Loss | (52) | (1,400) | +96.3% | - The revenue decrease was primarily due to reduced record sales and income from organizing events[67](index=67&type=chunk) - The significant reduction in loss was mainly due to an **increase in gross profit margin** and the adoption of **cost-cutting measures**[67](index=67&type=chunk) - The Group plans to continue allocating resources to expand its music works licensing business and organize events in Hong Kong and the Greater Bay Area of China[67](index=67&type=chunk) [Property Development Business](index=29&type=section&id=Property%20Development%20Business) The Group's property development business includes Qingyuan Land and Zhongxing Industrial Park, with the former's auction postponed due to market downturn and the latter's construction approximately **70%** complete, with sales agreements signed and further deliveries expected - The Group owns two property development projects: Qingyuan Land and Zhongxing Industrial Park[68](index=68&type=chunk) - The compulsory auction of Qingyuan Land was postponed due to the downturn in China's property market, and the freezing order has been extended to **May 12, 2028**[70](index=70&type=chunk)[69](index=69&type=chunk) - Approximately **70%** of Zhongxing Industrial Park's construction is complete, with an additional **7%** expected to be completed in 2025[74](index=74&type=chunk) - Sales agreements have been signed for approximately **3,300 square meters** at Zhongxing Industrial Park, with approximately **24,000 square meters** of industrial buildings and dormitories expected for delivery in the second half of 2025[75](index=75&type=chunk) - The Group will continue to invest resources in sales and marketing activities for Zhongxing Industrial Park and introduce more retail shops[77](index=77&type=chunk) [Qingyuan Land](index=29&type=section&id=Qingyuan%20Land) The land use rights for Qingyuan Land, held by Zhongqing, have been frozen since 2014 due to shareholder loan disputes, with the freezing order extended to **May 12, 2028**, and despite shareholder approval for a compulsory auction, the company has decided to postpone the auction due to the depressed Chinese property market - Qingyuan Land has been frozen due to shareholder loan disputes, with the freezing order extended to **May 12, 2028**[69](index=69&type=chunk)[70](index=70&type=chunk) - Shareholders approved a compulsory auction for Qingyuan Land, but the company decided to postpone further action due to the depressed property development market in China[70](index=70&type=chunk) [Zhongda Qingyuan](index=31&type=section&id=Zhongda%20Qingyuan) Zhongda Qingyuan is developing Zhongxing Industrial Park, with approximately **70%** of the **183,000 square meters** total construction area completed, sales agreements signed for **3,300 square meters**, and **24,000 square meters** expected for delivery in the second half of 2025, with property certificates issued for **56,000 square meters** and related stage guarantees released - Zhongda Qingyuan is developing Zhongxing Industrial Park, with a total construction area of approximately **183,000 square meters**, of which approximately **70%** has been completed[73](index=73&type=chunk)[74](index=74&type=chunk) - Sales agreements have been signed for approximately **3,300 square meters** during the period, with approximately **24,000 square meters** of industrial buildings and dormitories expected for delivery in the second half of 2025[75](index=75&type=chunk) - Property certificates for approximately **56,000 square meters** have been issued, and related stage guarantees have been released[77](index=77&type=chunk) - The Group will continue to invest resources in sales and marketing activities for Zhongxing Industrial Park and introduce more retail shops[77](index=77&type=chunk) [Property Investment Business](index=32&type=section&id=Property%20Investment%20Business) The property investment business involves four properties in Hong Kong, Beijing, Shenzhen, and Qingyuan, generating approximately **3,900 thousand HKD** in rental income, a slight increase, but recorded a fair value loss of **4,000 thousand HKD** primarily due to declining market and rental values of Qingyuan properties - The property investment business involves four properties located in Yuen Long, Hong Kong, Beijing, Shenzhen, and Zhongxing Industrial Park in Qingyuan, China[80](index=80&type=chunk) | Metric | June 30, 2025 (thousand HKD) | June 30, 2024 (thousand HKD) | Change (%) | | :--- | :--- | :--- | :--- | | Total Rental Income | 3,900 | 3,800 | +2.6% | | Fair Value Loss | (4,000) | (12,700) | +68.5% | - The increase in rental income primarily came from Qingyuan properties, partially offset by rental concessions for Shenzhen and Yuen Long properties[80](index=80&type=chunk) - The fair value loss was mainly due to a **decrease in the market value and rental value** of Qingyuan properties and surrounding areas[81](index=81&type=chunk) [Securities Trading and Equity Investment Business](index=34&type=section&id=Securities%20Trading%20and%20Equity%20Investment%20Business) Total securities trading and equity investments amounted to approximately **24,200 thousand HKD**, with the Group recording fair value gains of **1,400 thousand HKD** and realized gains of **387 thousand HKD**, reversing the prior period's loss, and the largest investment being in Zhong Wei Capital L.P. | Metric | June 30, 2025 (thousand HKD) | December 31, 2024 (thousand HKD) | Change (%) | | :--- | :--- | :--- | :--- | | Total Equity Instruments and Financial Assets | 24,200 | 22,600 | +7.1% | | Fair Value Gain (Prior Period Loss) | 1,400 | (3,700) | +137.8% | | Realized Gain | 387 | 0 | N/A | - The largest investment is in the offshore investment fund Zhong Wei Capital L.P., accounting for **1.33%** of total equity, with a fair value of approximately **8,500 thousand HKD**[84](index=84&type=chunk) - The Group will prudently research the market and potential investment targets, closely monitor investment performance, and adjust its investment strategy accordingly[86](index=86&type=chunk) [Trading Business](index=35&type=section&id=Trading%20Business) Trading business revenue decreased to **9,800 thousand HKD**, and segment loss increased to **763 thousand HKD**, primarily due to reduced revenue and gross profit margin from Hong Kong customers, with plans to expand the sales team, optimize product portfolio, and offer value-added services | Metric | June 30, 2025 (thousand HKD) | June 30, 2024 (thousand HKD) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 9,800 | 13,500 | -27.4% | | Segment Loss | (763) | (410) | +86.1% | - The increased loss was mainly attributable to a **decrease in revenue and gross profit margin** from Hong Kong customers compared to the prior period[87](index=87&type=chunk) - The Group will continue to allocate more resources to expand and develop its sales team in Hong Kong, overseas, and China, broaden its customer base, optimize its product portfolio, and provide more value-added services[87](index=87&type=chunk) [Liquidity, Capital Resources, and Capital Structure](index=35&type=section&id=Liquidity%2C%20Capital%20Resources%2C%20and%20Capital%20Structure) As of June 30, 2025, the Group's cash and cash equivalents, pledged bank deposits, and short-term bank deposits totaled approximately **180,900 thousand HKD**, with current and quick ratios maintained at **2.0x** and **1.1x**, and total borrowings at **199,200 thousand HKD**, leading to a reduced gearing ratio of **32.5%** due to decreased bank borrowings | Metric | June 30, 2025 (thousand HKD) | December 31, 2024 (thousand HKD) | Change (%) | | :--- | :--- | :--- | :--- | | Cash and Cash Equivalents, Pledged Bank Deposits, and Short-term Bank Deposits | 180,900 | 182,100 | -0.7% | | Current Ratio | 2.0x | 2.0x | No Change | | Quick Ratio | 1.1x | 1.1x | No Change | | Total Borrowings | 199,200 | 213,400 | -6.7% | | Gearing Ratio | 32.5% | 34.1% | -1.6 percentage points | - The decrease in the gearing ratio was primarily due to a **reduction in the Group's bank borrowings**[90](index=90&type=chunk) - Total borrowings include amounts due to non-controlling shareholders, secured bank borrowings, unsecured bank borrowings, and lease liabilities[90](index=90&type=chunk) - The Group will utilize internally generated cash flows and bank borrowings as working capital, adhering to a prudent financial management policy[93](index=93&type=chunk) [Foreign Exchange Risk](index=37&type=section&id=Foreign%20Exchange%20Risk) The Group's transactions are primarily denominated in RMB, HKD, and USD, and management will closely monitor RMB exchange rate risk, considering appropriate hedging solutions if necessary, with no hedging activities undertaken during the period - The Group's transactions are primarily denominated in RMB, HKD, and USD[94](index=94&type=chunk) - Management will closely monitor RMB exchange rate risk and consider adopting appropriate hedging solutions when necessary[94](index=94&type=chunk) - No hedging activities using financial instruments were undertaken during the period, and there were no outstanding hedging instruments[94](index=94&type=chunk) [Capital Expenditure and Commitments](index=37&type=section&id=Capital%20Expenditure%20and%20Commitments) Capital expenditure for the period was approximately **10,400 thousand HKD**, significantly lower than the prior period, mainly for machinery and Zhongxing Industrial Park construction, with contracted but unprovided capital commitments of **95,800 thousand HKD** expected to be funded by internal resources and bank borrowings | Metric | June 30, 2025 (thousand HKD) | June 30, 2024 (thousand HKD) | Change (%) | | :--- | :--- | :--- | :--- | | Capital Expenditure | 10,400 | 82,200 | -87.4% | - Capital expenditure primarily arose from the acquisition of machinery for production in China and construction work for Zhongxing Industrial Park[95](index=95&type=chunk) | Metric | June 30, 2025 (thousand HKD) | December 31, 2024 (thousand HKD) | Change (%) | | :--- | :--- | :--- | :--- | | Contracted but Unprovided Capital Commitments | 95,800 | 111,100 | -13.8% | - Capital commitments are expected to be funded by internal resources and bank borrowings[97](index=97&type=chunk) [Contingent Liabilities and Pledged Assets](index=38&type=section&id=Contingent%20Liabilities%20and%20Pledged%20Assets) As of June 30, 2025, the Group's contingent liabilities were approximately **56,900 thousand HKD**, mainly related to stage guarantees for Zhongxing Industrial Park property mortgage loans, and assets with a total carrying value of **204,400 thousand HKD** were pledged as security for various bank borrowings and financing | Metric | June 30, 2025 (thousand HKD) | December 31, 2024 (thousand HKD) | Change (%) | | :--- | :--- | :--- | :--- | | Contingent Liabilities | 56,900 | 18,000 | +216.1% | - Contingent liabilities primarily relate to stage guarantees provided by Zhongda Qingyuan for mortgage loans to purchasers of industrial buildings in Zhongxing Industrial Park, with the mortgage bank as beneficiary[98](index=98&type=chunk) | Metric | June 30, 2025 (thousand HKD) | December 31, 2024 (thousand HKD) | Change (%) | | :--- | :--- | :--- | :--- | | Total Carrying Value of Pledged Assets | 204,400 | 199,800 | +2.3% | - Pledged assets include pledged bank deposits, investment properties, and properties under development for sale/properties held for sale, serving as security for construction loans, mortgage loans, and general banking facilities[99](index=99&type=chunk) [Share Capital and Capital Structure](index=38&type=section&id=Share%20Capital%20and%20Capital%20Structure) There were no changes in the company's share capital and capital structure during the period, and no treasury shares were held - There were **no changes** in the company's share capital and capital structure during the current period[100](index=100&type=chunk) - As of June 30, 2025, the company held **no treasury shares**[101](index=101&type=chunk) [Other Information](index=39&type=section&id=Other%20Information) [Human Resources](index=39&type=section&id=Human%20Resources) As of June 30, 2025, the Group had approximately **930 full-time employees**, with total staff costs of **75,500 thousand HKD**, and compensation plans are determined by market conditions and qualifications, including share option schemes, medical insurance, and training | Metric | June 30, 2025 | December 31, 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Number of Full-time Employees | 930 | 940 | -1.1% | | Total Staff Costs (thousand HKD) | 75,500 | 74,900 | +0.8% | - Compensation plans are determined with reference to market conditions and employee qualifications, offering share option schemes, medical insurance, and training[102](index=102&type=chunk) [Events After Reporting Period](index=39&type=section&id=Events%20After%20Reporting%20Period) No significant events have occurred from the end of the reporting period up to the date of this announcement - No significant events have occurred from the end of the reporting period up to the date of this announcement[103](index=103&type=chunk) [Corporate Governance and Compliance](index=39&type=section&id=Corporate%20Governance%20and%20Compliance) The company has adopted the Listing Rules' Model Code and Corporate Governance Code, confirming compliance with all code provisions during the period, and the Board believes the Chairman and Chief Executive Officer being the same person enhances strategic synergy and streamlines decision-making - The company has adopted the Model Code set out in Appendix C3 of the Listing Rules and confirms that its directors have complied with it throughout the period[104](index=104&type=chunk) - The company has complied with all code provisions of the Corporate Governance Code set out in Appendix C1 Part 2 of the Listing Rules during the current period[107](index=107&type=chunk) - Mr. Sit Ka Lun serves as both Chairman and Chief Executive Officer, an arrangement the Board believes enhances strategic synergy, streamlines decision-making, and accelerates key growth initiatives[107](index=107&type=chunk)[108](index=108&type=chunk) [Standard Code for Securities Transactions](index=39&type=section&id=Standard%20Code%20for%20Securities%20Transactions) The company has adopted the Model Code for securities transactions by directors as set out in Appendix C3 of the Listing Rules, and directors confirmed compliance throughout the period - The company has adopted the Model Code set out in Appendix C3 of the Listing Rules, and all directors confirmed compliance throughout the current period[104](index=104&type=chunk) - The company has also adopted securities dealing procedures for employees who may possess unpublished inside information, with terms no less stringent than the Model Code[104](index=104&type=chunk) [Audit Committee](index=40&type=section&id=Audit%20Committee) The Audit Committee, comprising one non-executive director and two independent non-executive directors, has reviewed accounting policies, internal controls, risk management, financial reporting matters, and the interim results for the period - The Audit Committee comprises one non-executive director and two independent non-executive directors[105](index=105&type=chunk) - The Audit Committee has reviewed accounting policies, internal controls, risk management, financial reporting matters, and the Group's interim results for the current period[105](index=105&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=40&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company%27s%20Listed%20Securities) Neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities during the period - Neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities during the current period[106](index=106&type=chunk) [Corporate Governance](index=40&type=section&id=Corporate%20Governance) The Board believes the company has complied with all code provisions of the Corporate Governance Code during the period, and the combined roles of Chairman and Chief Executive Officer are seen to enhance strategic synergy and decision-making efficiency - The Board believes the company has complied with all code provisions of the Corporate Governance Code during the current period[107](index=107&type=chunk) - Mr. Sit Ka Lun serves concurrently as Chairman of the Board and Chief Executive Officer, an arrangement the Board believes enhances strategic synergy, streamlines decision-making processes, and accelerates key growth initiatives[107](index=107&type=chunk)[108](index=108&type=chunk) - Former Chief Executive Officer, Mr. Sit Chai Kwong, will continue as an Executive Director, focusing on providing strategic guidance[108](index=108&type=chunk) [Review and Publication of Interim Report](index=41&type=section&id=Review%20and%20Publication%20of%20Interim%20Report) The Group's interim results for the period are unaudited but have been reviewed by the Audit Committee and Deloitte Touche Tohmatsu, with the detailed interim report to be published in September 2025 on the HKEXnews and company websites - The Group's interim results for the current period are unaudited but have been reviewed by the Audit Committee and the auditor, Deloitte Touche Tohmatsu[109](index=109&type=chunk) - The detailed interim report will be published in September 2025 on the HKEXnews website (www.hkexnews.hk) and the company's website (www.newaygroup.com.hk)[110](index=110&type=chunk)

Financial Performance - Revenue for the six months ended June 30, 2025, was RMB 340,852,000, a decrease of 25% compared to RMB 454,200,000 for the same period in 2024[4] - Gross loss for the period was RMB 2,317,000, significantly improved from a gross loss of RMB 33,792,000 in the previous year[4] - The company reported a pre-tax loss of RMB 208,066,000, slightly improved from a pre-tax loss of RMB 221,660,000 in 2024[4] - Basic and diluted loss per share for the period was RMB 0.46, compared to RMB 0.49 in the same period last year[4] - Other net income and gains for the period were RMB 2,879,000, down from RMB 33,708,000 in 2024[4] - The company recorded net losses of approximately RMB 208.07 million and RMB 221.74 million for the periods ending June 30, 2025, and June 30, 2024, respectively[9] - The company reported a total pre-tax loss of RMB 208,066 thousand for the six months ending June 30, 2025, compared to RMB 221,660 thousand in 2024, showing a slight improvement[22] - The loss attributable to equity shareholders for the six months ended June 30, 2025, was RMB 208.066 million, a decrease from RMB 221.735 million for the same period in 2024[35] - The net loss for the six months ended June 30, 2025, was RMB 208 million, a slight improvement from a loss of RMB 222 million in the same period of 2024[59] Assets and Liabilities - Total non-current assets decreased to RMB 535,181,000 from RMB 549,506,000 as of December 31, 2024[5] - Current liabilities increased to RMB 5,429,378,000 from RMB 5,244,623,000 as of December 31, 2024[6] - Net current liabilities rose to RMB 4,897,048,000 compared to RMB 4,711,009,000 in the previous year[6] - Total equity remained negative at RMB (4,361,867,000), worsening from RMB (4,161,503,000) in 2024[6] - As of June 30, 2025, the company's net current liabilities were approximately RMB 4.90 billion, and net debt was about RMB 4.36 billion[9] - The total interest-bearing borrowings as of June 30, 2025, were RMB 1,652 million, a minor decrease from RMB 1,666 million at the end of 2024[62] - The total net value of assets pledged for financing was RMB 335 million as of June 30, 2025, slightly down from RMB 338.8 million at the end of 2024[66] Sales and Revenue Breakdown - For the six months ending June 30, 2025, total sales amounted to RMB 340,852 thousand, a decrease from RMB 454,200 thousand for the same period in 2024, representing a decline of approximately 25%[27] - The sales of recycled copper products for the six months ending June 30, 2025, were RMB 339,422 thousand, down from RMB 445,883 thousand in 2024, indicating a decrease of about 24%[27] - The sales of copper products amounted to RMB 339 million, down 24% from RMB 446 million in the previous year, reflecting a 30% decrease in sales volume from 7,004 tons to 4,877 tons[58] - The sales of power distribution cables increased to RMB 543 thousand in the six months ending June 30, 2025, from RMB 177 thousand in 2024, marking a growth of approximately 206%[27] Debt and Restructuring - The company faced significant financial challenges, including unpaid interest-bearing bank loans of approximately RMB 1.63 billion and other debts of about RMB 24 million as of June 30, 2025[9] - The company is undergoing debt restructuring involving its subsidiaries, with the first creditors' meeting for the restructuring held on March 28, 2023[9] - The company has submitted voluntary bankruptcy restructuring applications for several subsidiaries, including Taiyue, which was accepted by the court on May 23, 2023[10] - The company is actively seeking new financing arrangements, including issuing convertible bonds to raise new funds[15] - The company is negotiating with creditors for debt extensions and is working to maintain positive relationships with suppliers while reducing operational scale[16] - The company has initiated voluntary bankruptcy restructuring applications for its subsidiaries, including Tongxin and Jinxun, to address existing debts[50] - The restructuring is seen as a strategic move to enhance the overall financial condition of the company and its subsidiaries[49] Operational Challenges and Strategies - The company continues to focus on the production and trading of copper, aluminum, and related products, with no new product launches or market expansions reported[7] - The company is implementing cost control measures to improve cash flow and maintain sufficient liquidity through working capital management[15] - The company is addressing ongoing litigation to lift bank account freezes and the seizure of assets, including properties and inventory[15] - The company is committed to leveraging its strengths to benefit from the anticipated growth in copper demand[48] - The company believes that despite short-term operational and financial impacts from the restructuring, the long-term business outlook remains optimistic due to strong future demand for copper[48] - The company is facing challenges in the copper market due to a mismatch in inventory and reduced demand from the U.S., which is expected to exert downward pressure on copper prices in the second half of the year[47] Government Support and Subsidies - The company received local government subsidies amounting to RMB 211.797 million as immediate financial assistance for its operating subsidiaries in China[39] - The company received government subsidies totaling RMB 19 thousand for the six months ending June 30, 2025, down from RMB 20,300 thousand in 2024[31] Corporate Governance - The company has adopted a code of conduct for directors regarding securities trading, which complies with the standards set out in the listing rules[76] - The company has taken measures to strengthen internal controls and will provide training to directors regarding compliance with listing rules[78] - The company continues to review and enhance its corporate governance practices to ensure compliance with the corporate governance code[80]

[Company Information](index=4&type=section&id=Company%20Information) This chapter provides essential information about China Shutower International Holdings Group Limited, including its board members, company secretary, compliance officer, authorized representatives, committee members, auditor, legal counsel, registered office, principal places of business, principal bankers, share registrar, and company website - The Board of Directors comprises Mr. Dang Fei (Chairman and CEO), Mr. Wang Xiaozhong, Ms. Luo Qian, Ms. Hu Yi, Ms. Zhou Wenqi, Mr. Zhang Weixian (Executive Directors), and Dr. Zuo Xinzhang, Mr. Ma Kaibing, Mr. Li Jian (Independent Non-executive Directors)[7](index=7&type=chunk) - The company's registered office is in the Cayman Islands, with its principal place of business in Guangyuan City, Sichuan Province, China, and in Tsim Sha Tsui, Kowloon, Hong Kong[7](index=7&type=chunk)[8](index=8&type=chunk) - Mr. Ma Kaibing chairs the Audit Committee, Mr. Li Jian chairs the Remuneration Committee, and Mr. Dang Fei chairs the Nomination Committee[7](index=7&type=chunk) [Unaudited Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=6&type=section&id=Unaudited%20Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) This chapter reports the unaudited condensed consolidated statement of profit or loss and other comprehensive income for the six months ended June 30, 2025, showing an expanded loss for the period, primarily due to increased revenue but decreased gross profit and other income Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income Key Data | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 168,245 | 89,327 | 88.3% | | Cost of sales | (167,583) | (88,241) | 90.0% | | Gross profit | 662 | 1,086 | -39.0% | | Other income | 848 | 4,276 | -80.2% | | Loss before income tax expense | (15,850) | (13,892) | 14.1% | | Loss for the period | (16,476) | (11,220) | 46.8% | | Loss for the period attributable to owners of the Company | (15,023) | (11,257) | 33.4% | | Basic and diluted loss per share (RMB cents) | (0.12) | (0.12) | 0.0% | [Unaudited Condensed Consolidated Statement of Financial Position](index=8&type=section&id=Unaudited%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the company's total assets and net assets both decreased, with an expanded net current liabilities, reflecting challenging financial conditions Condensed Consolidated Statement of Financial Position Key Data | Indicator | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Total assets | 228,223 | 272,799 | -16.4% | | Non-current assets | 106,885 | 111,842 | -4.4% | | Current assets | 121,338 | 160,957 | -24.6% | | Current liabilities | 200,847 | 224,722 | -10.7% | | Net current liabilities | (79,509) | (63,765) | 24.7% | | Net assets | 693 | 12,468 | -94.4% | | Total equity | 693 | 12,468 | -94.4% | [Unaudited Condensed Consolidated Statement of Changes in Equity](index=10&type=section&id=Unaudited%20Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) For the six months ended June 30, 2025, the company's total equity significantly decreased, primarily due to losses for the period and other comprehensive expenses, despite new share issuance Condensed Consolidated Statement of Changes in Equity Key Data | Indicator | June 30, 2025 (RMB thousand) | January 1, 2024 (RMB thousand) | | :--- | :--- | :--- | | Share capital | 10,345 | 8,222 | | Share premium | 42,691 | 37,111 | | Accumulated losses | (144,422) | (70,563) | | Subtotal of equity attributable to owners of the Company | (10,451) | 48,599 | | Non-controlling interests | 11,144 | 21,938 | | Total equity | 693 | 70,537 | - Loss for the period attributable to owners of the Company was **RMB 15,023 thousand**, and loss attributable to non-controlling interests was **RMB 1,455 thousand**[13](index=13&type=chunk) - In the first half of 2025, **RMB 4,730 thousand** was raised through share issuance[13](index=13&type=chunk) [Unaudited Condensed Consolidated Statement of Cash Flows](index=11&type=section&id=Unaudited%20Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) For the six months ended June 30, 2025, net cash flow from operating activities significantly decreased, cash outflow from investing activities reduced, and net cash flow from financing activities also decreased, though cash and cash equivalents at period-end slightly increased Condensed Consolidated Statement of Cash Flows Key Data | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Net cash from operating activities | 1,623 | 9,178 | -82.3% | | Net cash used in investing activities | (3,049) | (18,800) | -83.8% | | Net cash from financing activities | 2,026 | 8,556 | -76.4% | | Net increase/(decrease) in cash and cash equivalents | 600 | (1,066) | N/A | | Cash and cash equivalents at end of period | 2,376 | 343 | 592.7% | - Proceeds from borrowings were **RMB 13,800 thousand**, and repayment of borrowings was **RMB 14,311 thousand**, resulting in a net outflow from borrowings[15](index=15&type=chunk) [Notes to the Unaudited Condensed Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20the%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) This chapter elaborates on the basis of preparation, accounting policies, risk management, segment reporting, specific components and changes of financial items, and related party transactions, providing supplementary information for understanding the financial statements - The Group is primarily engaged in the production and sale of wire and cable, sale of aluminum products, and sale of polymer materials in China[16](index=16&type=chunk) - The financial statements are prepared in accordance with Hong Kong Accounting Standard 34 and the GEM Listing Rules, and are presented in RMB[18](index=18&type=chunk)[20](index=20&type=chunk) [1. General Information](index=12&type=section&id=1.%20General%20Information) This section introduces China Shutower International Holdings Group Limited's registration place, principal places of operation, business scope, and its shares listed on GEM of the Stock Exchange - The Company was incorporated in the Cayman Islands, with its principal place of operation in Guangyuan City, Sichuan Province, China[16](index=16&type=chunk) - The Group's principal activities are the production and sale of wire and cable, sale of aluminum products, and sale of polymer materials[16](index=16&type=chunk) - The Company's shares were listed on GEM of the Stock Exchange on July 10, 2020[17](index=17&type=chunk) [2. Basis of Preparation](index=12&type=section&id=2.%20Basis%20of%20Preparation) This section clarifies that the interim financial statements are prepared in accordance with HKAS 34 and GEM Listing Rules, using a historical cost basis, consistent with the 2024 annual report's accounting policies, with no significant impact from new standards adoption - The financial statements are prepared in accordance with Hong Kong Accounting Standard 34 issued by the HKICPA and the applicable disclosure requirements of the GEM Listing Rules of the Stock Exchange[18](index=18&type=chunk) - The financial statements are prepared on a historical cost basis and presented in RMB[19](index=19&type=chunk)[20](index=20&type=chunk) - The adoption of new and revised HKFRSs had no significant impact on the financial statements for the current period[21](index=21&type=chunk) [3. Adoption of New and Revised Hong Kong Financial Reporting Standards](index=13&type=section&id=3.%20Adoption%20of%20New%20and%20Revised%20Hong%20Kong%20Financial%20Reporting%20Standards) During this period, amendments to HKAS 21 and HKFRS 1 (Lack of Exchangeability) were first applied, but these amendments had no significant impact on the Group's financial performance and position - The Group first applied the amendments to Hong Kong Accounting Standard 21 and Hong Kong Financial Reporting Standard 1 (Lack of Exchangeability)[22](index=22&type=chunk) - The adoption of new and revised HKFRSs had no significant impact on the Group's results and financial position for the current and prior periods[22](index=22&type=chunk) [4. Application of Judgements and Estimates](index=13&type=section&id=4.%20Application%20of%20Judgements%20and%20Estimates) The significant judgements and key sources of estimation uncertainty made by management in applying accounting policies for the interim financial statements are consistent with those in the accountant's report - The significant judgements and estimates made by management in preparing the financial statements are the same as those in the accountant's report[23](index=23&type=chunk) [5. Financial Risk Management](index=14&type=section&id=5.%20Financial%20Risk%20Management) The Group's operations involve credit, market (foreign exchange and interest rate), and liquidity risks, but it historically does not use derivatives for hedging or trading, and risk management policies remain unchanged since December 31, 2024 - The Group's operations involve credit risk, market risk (foreign exchange risk and interest rate risk), and liquidity risk[24](index=24&type=chunk) - The Group has historically not used derivative instruments for hedging or trading purposes[24](index=24&type=chunk) - Risk management policies have not changed since December 31, 2024[25](index=25&type=chunk) [6. Segment Reporting](index=14&type=section&id=6.%20Segment%20Reporting) The Group primarily produces and sells wire and cable, aluminum products, and polymer materials in China, with management treating overall operating results as a single reportable operating segment, thus no separate operating or geographical segment information is presented - The Group is primarily engaged in the production and sale of wire and cable, sale of aluminum products, and sale of polymer materials in China[26](index=26&type=chunk) - The Group has only one reportable operating segment, therefore no operating segment information is presented[26](index=26&type=chunk) - All of the Group's revenue and non-current assets are derived from China, thus no geographical segment reporting is presented[27](index=27&type=chunk) Major Customer Revenue Contribution | Customer | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Customer A | 108,930 | 70,273 | [7. Revenue](index=15&type=section&id=7.%20Revenue) Revenue primarily derived from the production and sale of wire and cable and aluminum products, totaling **RMB 168,245 thousand** in the first half of 2025, with wire and cable being the largest contributor and aluminum product sales also beginning to contribute - Revenue refers to amounts received and receivable from the production and sale of wire and cable and the sale of aluminum products during the period[30](index=30&type=chunk) Revenue by Product Type | Product Type | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Production and sale of wire and cable | 167,023 | 89,327 | | Production and sale of aluminum products | 1,222 | – | | **Total Revenue** | **168,245** | **89,327** | [8. Other Income](index=16&type=section&id=8.%20Other%20Income) Other income significantly decreased to **RMB 848 thousand** in the first half of 2025, primarily due to a notable decline in interest income and government grants and subsidies Other Income Components | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Interest income | 1 | 1,208 | | Government grants and subsidies | 470 | 1,943 | | Rental income | 215 | 513 | | Others | 162 | 612 | | **Total** | **848** | **4,276** | - The decrease in other income was mainly due to the lack of significant interest income from receivables and reduced government subsidies[34](index=34&type=chunk)[35](index=35&type=chunk) [9. Finance Costs](index=16&type=section&id=9.%20Finance%20Costs) Finance costs remained relatively stable at approximately **RMB 2,796 thousand** in the first half of 2025, with a slight decrease in interest expense on bank and other borrowings offset by interest expense on lease liabilities Finance Costs Components | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Interest expense on bank and other borrowings | 2,650 | 2,844 | | Interest expense on lease liabilities | 146 | – | | **Finance costs recognized in profit or loss** | **2,796** | **2,844** | - Finance costs remained relatively stable, with a slight decrease in bank borrowing interest offset by lease liability interest[34](index=34&type=chunk) [10. Loss Before Income Tax Expense](index=17&type=section&id=10.%20Loss%20Before%20Income%20Tax%20Expense) Loss before income tax expense expanded to **RMB 15,850 thousand** in the first half of 2025, up from **RMB 13,892 thousand** in the prior period, primarily influenced by cost of inventories, depreciation, amortization, and expected credit loss allowance Loss Before Income Tax Expense Key Components | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Cost of inventories recognized | 167,583 | 88,241 | | Depreciation of property, plant and equipment | 3,464 | 2,749 | | Depreciation of right-of-use assets | 1,392 | – | | Allowance for expected credit losses on trade receivables | 2,536 | 2 | | Employee costs | 3,885 | 3,637 | - Allowance for expected credit losses on trade receivables significantly increased from **RMB 2 thousand** in 2024 to **RMB 2,536 thousand** in 2025[37](index=37&type=chunk) [11. Income Tax Expense (Credit)](index=18&type=section&id=11.%20Income%20Tax%20Expense%20(Credit)) The Group recorded an income tax expense of **RMB 626 thousand** in the first half of 2025, compared to an income tax credit of **RMB 2,672 thousand** in the prior period, mainly due to a decrease in deferred tax credit Income Tax Expense (Credit) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Current income tax expense (credit) | — | – | | Deferred tax (credit) | 626 | (2,672) | | **Income tax (credit)** | **626** | **(2,672)** | - Guangyuan Tongchuang New Material Co., Ltd. is eligible for a reduced income tax rate of **10%** under the Western Development Tax Incentive Policy[40](index=40&type=chunk) [12. Dividends](index=19&type=section&id=12.%20Dividends) The Board of Directors does not recommend the payment of an interim dividend for the six months ended June 30, 2025 - The Directors do not recommend the payment of an interim dividend for the six months ended June 30, 2025[41](index=41&type=chunk) [13. Loss Per Share](index=19&type=section&id=13.%20Loss%20Per%20Share) For the six months ended June 30, 2025, basic and diluted loss per share attributable to owners of the Company was **RMB 0.12 cents**, consistent with the prior period, as the increase in total loss was offset by a corresponding increase in the weighted average number of ordinary shares outstanding Loss Per Share Data | Indicator | 2025 (RMB cents) | 2024 (RMB cents) | | :--- | :--- | :--- | | Basic and diluted loss per share | (0.12) | (0.12) | - Loss attributable to owners of the Company increased from approximately **RMB 11,257 thousand** in 2024 to approximately **RMB 15,023 thousand** in 2025[42](index=42&type=chunk) - The weighted average number of ordinary shares outstanding increased from **92,000,000 shares** in 2024 to **124,386,880 shares** in 2025[42](index=42&type=chunk) [14. Property, Plant and Equipment](index=19&type=section&id=14.%20Property,%20Plant%20and%20Equipment) In the first half of 2025, the Group's cost of acquiring property, plant and equipment items was approximately **RMB 3,049 thousand**, a significant decrease from **RMB 18,800 thousand** in the prior period Cost of Property, Plant and Equipment Acquisitions | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Cost of acquiring machinery and office equipment | 3,049 | 18,800 | [15. Trade and Other Receivables](index=20&type=section&id=15.%20Trade%20and%20Other%20Receivables) As of June 30, 2025, net trade receivables and prepayments, deposits, and other receivables all significantly decreased, with the aging structure of trade receivables showing a decline in the over 365-day portion but a notable increase in the 181-365 day portion Trade and Other Receivables Key Data | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Trade receivables (net) | 83,644 | 114,521 | -26.9% | | Prepayments, deposits and other receivables | 8,693 | 34,303 | -74.6% | | **Total** | **92,778** | **149,470** | -37.9% | Aging Analysis of Trade Receivables (Net) | Aging | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | 0 to 60 days | 21,543 | 14,491 | | 61 to 180 days | 3,661 | 22,661 | | 181 to 365 days | 84,329 | 3,166 | | Over 365 days | 30,390 | 129,516 | | **Total** | **139,923** | **169,834** | - Allowance for expected credit losses on trade receivables increased from **RMB 55,313 thousand** as of December 31, 2024, to **RMB 56,286 thousand** as of June 30, 2025[44](index=44&type=chunk) [16. Trade and Other Payables](index=22&type=section&id=16.%20Trade%20and%20Other%20Payables) As of June 30, 2025, trade payables and accrued expenses and other payables both decreased, but the aging structure of trade payables showed an increase in the 61-180 day and over 365-day portions Trade and Other Payables Key Data | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Current trade payables | 83,018 | 97,285 | -14.7% | | Accrued expenses and other payables | 60,363 | 68,939 | -12.5% | Aging Analysis of Trade Payables | Aging | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | 0 to 60 days | 20,996 | 46,632 | | 61 to 180 days | 32,148 | 26,504 | | 181 to 365 days | 2,953 | 5,386 | | Over 365 days | 26,921 | 20,840 | | **Total** | **83,018** | **99,362** | - The credit period for purchases from suppliers generally ranges from **0 to 120 days**[46](index=46&type=chunk) [17. Borrowings](index=23&type=section&id=17.%20Borrowings) As of June 30, 2025, the Group's total borrowings slightly decreased to **RMB 69,963 thousand**, with most being current borrowings repayable within one year, and approximately **RMB 6,900 thousand** in borrowing defaults Total Borrowings and Liquidity | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Current borrowings | 53,150 | 49,708 | 6.9% | | Non-current borrowings | 16,813 | 22,820 | -26.3% | | **Total borrowings** | **69,963** | **72,528** | -3.4% | - Borrowings are secured by buildings, land use rights, plant and machinery, properties of directors and their close family members, properties of independent third parties, and inventories of a shareholder[49](index=49&type=chunk) - As of June 30, 2025, the Group was in default on principal borrowings of approximately **RMB 6,900 thousand**[49](index=49&type=chunk) [18. Share Capital](index=25&type=section&id=18.%20Share%20Capital) As of June 30, 2025, the Company's issued and fully paid share capital increased to **RMB 10,345 thousand**, primarily due to the issuance of **45,775,245 new shares** through a rights issue in 2025 Share Capital Movement | Item | Number of Shares | Amount (RMB thousand) | | :--- | :--- | :--- | | Issued and fully paid as at January 1, 2024 | 920,000,000 | 8,222 | | Share consolidation | (828,000,000) | — | | Shares issued upon subscription | 18,400,000 | 1,691 | | December 31, 2024 | 110,400,000 | 9,913 | | Shares issued upon rights issue | 45,775,245 | 432 | | **June 30, 2025** | **156,175,245** | **10,345** | - A share consolidation was conducted on July 10, 2024, where every **10 shares** were consolidated into **1 share**[56](index=56&type=chunk) - On May 6, 2025, **45,775,245 ordinary shares** were issued through a rights issue, raising net proceeds of approximately **HKD 4.17 million**[51](index=51&type=chunk)[56](index=56&type=chunk)[82](index=82&type=chunk) [19. Related Party Transactions](index=26&type=section&id=19.%20Related%20Party%20Transactions) This section discloses transactions between the Group and related parties, including key management personnel compensation and the pledging of properties by directors and their close family members as collateral for borrowings Key Management Personnel Compensation for the Period | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Salaries, allowances and other benefits | 268 | 398 | | Contributions to defined contribution retirement plans | 39 | 64 | | **Total** | **307** | **462** | - The Company's directors and their close family members, and key management personnel and their close family members, pledged properties as collateral for bank and other borrowings[55](index=55&type=chunk)[56](index=56&type=chunk) [Management Discussion and Analysis](index=27&type=section&id=Management%20Discussion%20and%20Analysis) Management discusses the Group's business performance, future outlook, financial review, liquidity, and capital structure for the six months ended June 30, 2025, expressing confidence in long-term growth opportunities despite challenges - The Group is a regional manufacturer and supplier of wire and cable, also engaged in aluminum cast-rolling coil processing and aluminum foil manufacturing[58](index=58&type=chunk) - In the first half of 2025, the Group continued to manufacture and sell wire and cable, primarily serving power companies, manufacturing enterprises, construction and decoration companies, and trading companies[58](index=58&type=chunk) [Business Review and Outlook](index=27&type=section&id=Business%20Review%20and%20Outlook) The Group continued to focus on wire and cable manufacturing and sales in the first half of 2025, anticipating a challenging yet structurally growing industry environment for the second half and beyond, aiming to seize opportunities in infrastructure, renewable energy, 5G development, and the domestic market - The Group continued to engage in the manufacturing and sale of wire and cable, serving power companies, manufacturing enterprises, construction and decoration companies, and trading companies[58](index=58&type=chunk) - Looking ahead, the operating environment for Chinese wire and cable manufacturers remains difficult but also full of opportunities, with macroeconomic uncertainties and intensified competition putting pressure on profit margins[59](index=59&type=chunk) [Future Prospects](index=27&type=section&id=Future%20Prospects) Looking ahead, the Group will seize opportunities from China's infrastructure and urbanization, renewable energy transition, 5G technology development, and domestic market expansion, while addressing challenges by optimizing operational efficiency and cost management - Management is confident in strengthening its competitive position and seizing long-term industry growth opportunities by focusing on product quality, innovation, and prudent financial management[64](index=64&type=chunk) [1. Infrastructure and Urbanization Initiatives](index=27&type=section&id=1.%20Infrastructure%20and%20Urbanization%20Initiatives) China's continuous government investment in infrastructure, including power grid upgrades and urban transportation networks, is expected to drive stable demand for quality wire and cable, with the Group planning to leverage its existing production bases to capture regional development opportunities - The Chinese government's continuous investment in infrastructure development is expected to drive stable demand for high-quality wire and cable[60](index=60&type=chunk) - The Group plans to leverage its existing production base in Sichuan Province to seize opportunities arising from regional development initiatives and urbanization projects[60](index=60&type=chunk) [2. Transition to Renewable Energy](index=27&type=section&id=2.%20Transition%20to%20Renewable%20Energy) China's ongoing promotion of renewable energy, such as solar and wind power, will stimulate demand for specialized cables and related products, and the Group will explore product innovation to meet these specific needs - China's continuous promotion of renewable energy development is expected to stimulate demand for specialized cables and related products[61](index=61&type=chunk) - The Group will continue to explore product innovation to meet the specific needs of renewable energy applications[61](index=61&type=chunk) [3. Technological Advancement and 5G Development](index=28&type=section&id=3.%20Technological%20Advancement%20and%205G%20Development) The expansion of China's 5G network and digital infrastructure will continue to generate demand for advanced cable solutions, with the Group closely monitoring technological trends and investing resources to develop products meeting telecommunications industry standards - The development of China's 5G network and expansion of digital infrastructure will continue to generate demand for advanced cable solutions[62](index=62&type=chunk) - The Group will invest resources to develop products that meet the stringent performance standards of the telecommunications industry[62](index=62&type=chunk) [4. Domestic Market Opportunities](index=28&type=section&id=4.%20Domestic%20Market%20Opportunities) As China increasingly focuses on expanding domestic demand, the wire and cable industry will benefit from a broader domestic market, and the Group will strengthen its local customer network and diversify its customer base - The Chinese wire and cable industry is expected to benefit from a broader domestic market[63](index=63&type=chunk) - The Group will strengthen its local customer network, diversify its customer base, and establish long-term partnerships with power companies, manufacturers, and infrastructure contractors[63](index=63&type=chunk) [5. Operational Efficiency and Cost Management](index=28&type=section&id=5.%20Operational%20Efficiency%20and%20Cost%20Management) Facing volatile raw material prices and high costs, the Group will maintain a rigorous approach to cost control, working capital management, and efficiency improvement, including optimizing production processes, outsourcing some products, exploring new businesses, and digitalizing internal operations - The Group will maintain a rigorous approach to cost control, working capital management, and efficiency improvement[64](index=64&type=chunk) - Measures include optimizing production processes, outsourcing certain products, researching and expanding into new business areas, tightening procurement specifications, and further digitalizing internal operations[64](index=64&type=chunk) [Financial Review](index=29&type=section&id=Financial%20Review) The financial review indicates that the Group's revenue significantly grew in the first half of 2025, but gross profit and gross margin notably decreased due to rising raw material costs and price competition, leading to an expanded loss for the period - Revenue for the first half of 2025 was approximately **RMB 168.2 million**, an increase of approximately **88.3%** compared to 2024[65](index=65&type=chunk) - Gross profit was approximately **RMB 0.7 million**, a decrease of approximately **39.0%** compared to the same period in 2024; gross margin decreased from **1.2%** in 2024 to **0.4%** in 2025[67](index=67&type=chunk) - Loss for the period attributable to owners of the Company was approximately **RMB 15.0 million**, an increase of approximately **33.4%** compared to the same period in 2024[73](index=73&type=chunk) [Revenue](index=29&type=section&id=Revenue) The Group's revenue significantly grew by **88.3%** to **RMB 168.2 million** in the first half of 2025, primarily driven by increased market demand for aluminum wire and cable sales Revenue by Product Type | Product Type | 2025 (RMB thousand) | 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Copper wire and cable | 58 | – | N/A | | Aluminum wire and cable | 146,305 | 88,804 | 64.7% | | Aluminum rods | 19,856 | 523 | 3697.5% | | Polymer materials and others | 2,026 | – | N/A | | **Total Revenue** | **168,245** | **89,327** | **88.3%** | - The increase in revenue was primarily due to increased market demand[65](index=65&type=chunk) [Cost of Sales](index=29&type=section&id=Cost%20of%20Sales) Cost of sales significantly increased by **90.0%** year-on-year to **RMB 167.6 million**, consistent with revenue growth, primarily comprising raw material costs, aluminum product costs, and subcontractor finished product costs Cost of Sales Movement | Indicator | 2025 (RMB million) | 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Cost of sales | 167.6 | 88.2 | 90.0% | - The increase in cost of sales was consistent with the increase in revenue[66](index=66&type=chunk) [Gross Profit and Gross Margin](index=30&type=section&id=Gross%20Profit%20and%20Gross%20Margin) Gross profit decreased by **39.0%** year-on-year to **RMB 0.7 million** in the first half of 2025, with gross margin falling from **1.2%** to **0.4%**, mainly due to significant increases in raw material and subcontracting costs, and industry price competition Gross Profit and Gross Margin Movement | Indicator | 2025 (RMB million) | 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Gross profit | 0.7 | 1.1 | -39.0% | | Gross margin | 0.4% | 1.2% | -0.8pp | - The decrease in gross profit and gross margin was mainly due to a significant increase in raw material and subcontracting costs, especially for aluminum products and semi-finished wires, which outpaced revenue growth[67](index=67&type=chunk) - Price competition pressure in China's wire and cable industry further compressed gross margin during the period[67](index=67&type=chunk) [Other Income and Gains](index=30&type=section&id=Other%20Income%20and%20Gains) Other income and gains significantly decreased from approximately **RMB 4.3 million** in the first half of 2024 to approximately **RMB 0.8 million** in the first half of 2025, primarily due to reduced interest income and government subsidies Other Income and Gains Movement | Indicator | 2025 (RMB million) | 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Other income and gains | 0.8 | 4.3 | -81.4% | - The decrease was mainly due to the absence of significant interest income from receivables and reduced government subsidies received during the period[68](index=68&type=chunk) [Selling and Distribution Expenses](index=30&type=section&id=Selling%20and%20Distribution%20Expenses) Selling and distribution expenses decreased by approximately **40.7%** year-on-year to **RMB 0.9 million**, primarily due to controlled transportation and logistics costs and reduced staff expenses following streamlined sales activities Selling and Distribution Expenses Movement | Indicator | 2025 (RMB million) | 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Selling and distribution expenses | 0.9 | 1.5 | -40.0% | - The decrease was mainly due to enhanced control over transportation and logistics costs, and reduced staff expenses following streamlined sales activities[69](index=69&type=chunk) [Administrative and Other Expenses](index=30&type=section&id=Administrative%20and%20Other%20Expenses) Administrative and other expenses slightly decreased by **8.3%** to **RMB 13.7 million**, primarily due to reduced professional fees and staff costs, partially offset by increased depreciation expenses from newly acquired machinery Administrative and Other Expenses Movement | Indicator | 2025 (RMB million) | 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Administrative and other expenses | 13.7 | 14.9 | -8.1% | - The decrease was mainly due to reduced professional fees and staff costs, partially offset by increased depreciation expenses arising from newly acquired machinery[70](index=70&type=chunk) [Finance Costs](index=30&type=section&id=Finance%20Costs) Finance costs remained relatively stable at approximately **RMB 2.8 million** in the first half of 2025, with a slight decrease in bank borrowing interest offset by interest expense on lease liabilities Finance Costs Movement | Indicator | 2025 (RMB million) | 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Finance costs | 2.8 | 2.8 | 0.0% | - Interest on bank borrowings slightly decreased, but was offset by interest expense on lease liabilities recognized during the period[71](index=71&type=chunk) [Income Tax Credit](index=31&type=section&id=Income%20Tax%20Credit) The Group recorded an income tax expense of approximately **RMB 0.6 million** in the first half of 2025, compared to an income tax credit of **RMB 2.7 million** in the prior period, primarily due to reduced recognition of deferred tax assets Income Tax Credit Movement | Indicator | 2025 (RMB million) | 2024 (RMB million) | | :--- | :--- | :--- | | Income tax (expense) credit | 0.6 (expense) | 2.7 (credit) | - The decrease was mainly due to reduced recognition of deferred tax assets related to tax losses carried forward in 2025[72](index=72&type=chunk) [Loss for the Period Attributable to Owners of the Company](index=31&type=section&id=Loss%20for%20the%20Period%20Attributable%20to%20Owners%20of%20the%20Company) Loss for the period attributable to owners of the Company expanded by **33.4%** to approximately **RMB 15.0 million** in the first half of 2025, primarily due to a significant decrease in other income and gains, offsetting the impact of revenue growth Loss for the Period Attributable to Owners of the Company Movement | Indicator | 2025 (RMB million) | 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Loss for the period attributable to owners of the Company | 15.0 | 11.3 | 32.7% | - The increase in net loss was primarily due to a significant decrease in other income and gains[73](index=73&type=chunk) [Liquidity, Financial Resources and Capital Structure](index=31&type=section&id=Liquidity,%20Financial%20Resources%20and%20Capital%20Structure) The Group's liquidity relies on cash from operations, bank borrowings, and shareholder advances; as of June 30, 2025, cash and cash equivalents slightly increased, but total borrowings remain high, mostly short-term, and net loss led to a significant decline in total equity and deteriorated gearing ratio - The Group primarily funds its operations through cash generated from operations, bank and other borrowings, and advances from shareholders[74](index=74&type=chunk) Liquidity and Capital Structure Key Data | Indicator | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Cash and cash equivalents | 2.4 | 1.8 | 33.3% | | Total borrowings | 70.0 | 72.5 | -3.4% | | Borrowings repayable within one year or on demand | 53.2 | 49.7 | 7.0% | | Total equity | 0.7 | 12.5 | -94.4% | | Gearing ratio | Negative | 95.4% | N/A | - The Directors believe that the Group's current capital structure remains challenging, with a limited equity base and heavy reliance on borrowings[75](index=75&type=chunk) [Pledge of the Group's Assets](index=32&type=section&id=Pledge%20of%20the%20Group's%20Assets) As of June 30, 2025, the Group pledged buildings, land use rights, and plant and machinery with a total net book value of approximately **RMB 52,009 thousand** to secure bank and other borrowings Net Book Value of Pledged Assets | Pledged Assets | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Buildings | 39,862 | 40,373 | | Land use rights | 5,805 | 5,901 | | Plant and machinery | 6,342 | 2,523 | | **Total** | **52,009** | **48,797** | [Capital Commitments](index=32&type=section&id=Capital%20Commitments) As of June 30, 2025, the Group had capital commitments for capital injection into subsidiaries of approximately **RMB 10,810,000**, consistent with December 31, 2024 Capital Commitments | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Capital commitments for capital injection into subsidiaries | 10,810 | 10,810 | [Contingent Liabilities](index=32&type=section&id=Contingent%20Liabilities) As of June 30, 2024, the Group had no significant contingent liabilities - The Group had no significant contingent liabilities as of June 30, 2024[78](index=78&type=chunk) [Foreign Currency Risk](index=32&type=section&id=Foreign%20Currency%20Risk) The Group has no significant foreign currency risk as its business transactions and most assets and liabilities are primarily denominated in its functional currency, RMB, and no hedging instruments were used during the period - The Group has no significant foreign currency risk as most of its assets and liabilities are primarily denominated in its functional currency, RMB[79](index=79&type=chunk) - The Group did not have any hedging instruments to hedge other foreign currency transactions during the six months ended June 30, 2025[79](index=79&type=chunk) [Employees and Remuneration Policy](index=33&type=section&id=Employees%20and%20Remuneration%20Policy) As of June 30, 2025, the Group's total number of employees increased to **127**, with a corresponding increase in total employee benefit expenses, and remuneration policy is determined by market terms and individual performance Number of Employees and Employee Benefit Expenses | Indicator | June 30, 2025 | June 30, 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Number of full-time employees | 127 | 119 | 6.7% | | Total employee benefit expenses (RMB million) | 4.7 | 4.4 | 6.8% | - Remuneration is determined with reference to market terms and individual employee's performance, qualifications, and experience[80](index=80&type=chunk) [Significant Investments Held, Material Acquisitions or Disposals of Subsidiaries and Associates, and Plans for Material Investments or Capital Assets](index=33&type=section&id=Significant%20Investments%20Held,%20Material%20Acquisitions%20or%20Disposals%20of%20Subsidiaries%20and%20Associates,%20and%20Plans%20for%20Material%20Investments%20or%20Capital%20Assets) For the six months ended June 30, 2025, the Group held no significant investments, made no material acquisitions or disposals of subsidiaries and associates, and currently has no plans for material investments or capital assets - The Group held no significant investments during the six months ended June 30, 2025[81](index=81&type=chunk) - The Group had no material acquisitions or disposals of subsidiaries, associates, and joint ventures[81](index=81&type=chunk) - As of the date of this report, there were no plans for material investments or capital assets[81](index=81&type=chunk) [Rights Issue and Use of Proceeds](index=33&type=section&id=Rights%20Issue%20and%20Use%20of%20Proceeds) The Company completed a rights issue on May 6, 2025, issuing **45,775,245 ordinary shares** and raising net proceeds of approximately **HKD 4.17 million**, primarily for debt repayment, investment in non-automotive industries, and general working capital - On May 6, 2025, the Company issued **45,775,245 ordinary shares** through a rights issue[82](index=82&type=chunk) Use of Net Proceeds from Rights Issue | Intended Use | Intended Amount (HKD thousand) | Actual Use (HKD thousand) | Unutilized Balance (HKD thousand) | Expected Timeline for Use | | :--- | :--- | :--- | :--- | :--- | | Repayment of the Group's debts and borrowings | 1,250 | 1,250 | — | Not applicable | | Investment in non-automotive industries | 1,670 | 100 | 1,570 | June 30, 2026 | | Working capital | 1,250 | 1,250 | — | Not applicable | | **Total** | **4,170** | **2,600** | **1,570** | | - Net proceeds from the rights issue were approximately **HKD 4.17 million**[82](index=82&type=chunk) [Other Information](index=35&type=section&id=Other%20Information) This chapter discloses information on dividend policy, securities dealings, corporate governance, directors' interests, major shareholders' interests, competing interests, share option scheme, and post-reporting period changes in directors and audit committee review - The Directors decided not to declare any interim dividend for the six months ended June 30, 2025[85](index=85&type=chunk) - The Company has complied with the provisions of the Corporate Governance Code from the six months ended June 30, 2025, up to the date of this report, except for the roles of Chairman and Chief Executive Officer being held by the same person[87](index=87&type=chunk) [Interim Dividend](index=35&type=section&id=Interim%20Dividend) The Board of Directors decided not to declare any interim dividend for the six months ended June 30, 2025 - The Directors decided not to declare any interim dividend for the six months ended June 30, 2025[85](index=85&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=35&type=section&id=Purchase,%20Sale%20or%20Redemption%20of%20the%20Company's%20Listed%20Securities) For the six months ended June 30, 2025, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities - For the six months ended June 30, 2025, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[86](index=86&type=chunk) [Compliance with Corporate Governance Code](index=35&type=section&id=Compliance%20with%20Corporate%20Governance%20Code) The Company has complied with the Corporate Governance Code provisions, except for the roles of Chairman and Chief Executive Officer being held by the same person (Mr. Dang Fei), which the Board believes is in the Company's best interest - The Company has complied with the provisions of the Corporate Governance Code from the six months ended June 30, 2025, up to the date of this report[87](index=87&type=chunk) - The roles of Chairman and Chief Executive Officer are held by the same person (Mr. Dang Fei), which deviates from Code Provision C.2.1, but the Board believes this arrangement maximizes the Group's interests[87](index=87&type=chunk) [Code of Conduct for Securities Transactions by Directors](index=36&type=section&id=Code%20of%20Conduct%20for%20Securities%20Transactions%20by%20Directors) The Company has adopted the required standard of dealings set out in the GEM Listing Rules as the code of conduct for directors' securities transactions, and all directors have confirmed full compliance - The Company has adopted the required standard of dealings set out in Rules 5.48 to 5.67 of the GEM Listing Rules as the code of conduct for directors' securities transactions[88](index=88&type=chunk) - All Directors have confirmed full compliance with the required standard of dealings set out in the Model Code[88](index=88&type=chunk) [Directors' and Chief Executive's Interests and Short Positions in Shares, Underlying Shares and Debentures of the Company or its Associated Corporations](index=37&type=section&id=Directors'%20and%20Chief%20Executive's%20Interests%20and%20Short%20Positions%20in%20Shares,%20Underlying%20Shares%20and%20Debentures%20of%20the%20Company%20or%20its%20Associated%20Corporations) As of June 30, 2025, Mr. Dang Fei, Mr. Wang Xiaozhong, and Ms. Luo Qian held long positions in the Company's shares through controlled corporations, with Mr. Dang Fei holding **33.74%** of the shares Directors' and Chief Executive's Long Positions in Shares | Director/Chief Executive | Capacity/Nature of Interest | Number of Shares | Approximate Percentage | | :--- | :--- | :--- | :--- | | Mr. Dang Fei | Interest in controlled corporation | 52,692,000 | 33.74% | | Mr. Wang Xiaozhong | Interest in controlled corporation | 14,964,000 | 9.58% | | Ms. Luo Qian | Interest in controlled corporation | 1,168,500 | 0.75% | - Mr. Dang Fei holds shares through Red Fly Investment Limited, which is wholly owned by him[89](index=89&type=chunk) [Substantial Shareholders' and Other Persons' Interests and Short Positions in Shares and Underlying Shares of the Company](index=38&type=section&id=Substantial%20Shareholders'%20and%20Other%20Persons'%20Interests%20and%20Short%20Positions%20in%20Shares%20and%20Underlying%20Shares%20of%20the%20Company) As of June 30, 2025, Red Fly Investment Limited and Xseven Investment Limited were the Company's substantial shareholders, holding **33.74%** and **9.58%** of the shares respectively, with Ms. Gao Hong deemed to hold Mr. Wang Xiaozhong's share interests due to spousal relationship Substantial Shareholders' and Other Persons' Long Positions in Shares | Shareholder Name/Name | Capacity/Nature of Interest | Number of Shares (Long Position) | Approximate Percentage of Interest | | :--- | :--- | :--- | :--- | | Red Fly Investment Limited | Beneficial owner | 52,692,000 | 33.74% | | Xseven Investment Limited | Beneficial owner | 14,694,000 | 9.58% | | Ms. Gao Hong | Interest of spouse | 14,694,000 | 9.58% | - Red Fly is wholly owned by Mr. Dang Fei, and Xseven Investment is wholly owned by Mr. Wang Xiaozhong[91](index=91&type=chunk) [Competing Interests](index=39&type=section&id=Competing%20Interests) For the six months ended June 30, 2025, the Directors confirmed that neither the Company's controlling shareholders nor any Directors and their close associates held interests in any business that competes with the Group's business - The Directors confirmed that none of the Company's controlling shareholders or Directors and their respective close associates had any interests in any business that directly or indirectly competes with the Group's business[93](index=93&type=chunk) [Share Option Scheme](index=39&type=section&id=Share%20Option%20Scheme) The Company adopted a share option scheme on June 10, 2020, with **8,000,000 shares** authorized for grant as of the report date, but no share options have been granted, exercised, cancelled, or lapsed since the listing date - The Company conditionally adopted a share option scheme on June 10, 2020[94](index=94&type=chunk) - As of June 30, 2025, the number of share options authorized for grant under the share option scheme was **8,000,000 shares**[94](index=94&type=chunk) - No share options have been granted, exercised, cancelled, or lapsed from the listing date up to the date of this report[94](index=94&type=chunk) [Events After Reporting Period](index=40&type=section&id=Events%20After%20Reporting%20Period) Subsequent to the reporting period, there were changes in directors, with Mr. Li Xia and Mr. Wang Yifan resigning as executive directors, and Ms. Zhou Wenqi and Mr. Zhang Weixian appointed as executive directors - Subsequent to the reporting period, Mr. Li Xia resigned as an executive director, and Ms. Zhou Wenqi and Mr. Zhang Weixian were appointed as executive directors[95](index=95&type=chunk) - Mr. Wang Yifan resigned as an executive director[96](index=96&type=chunk) [Changes in Directors](index=40&type=section&id=Changes%20in%20Directors) Subsequent to the reporting period, Mr. Li Xia and Mr. Wang Yifan resigned as executive directors, and Ms. Zhou Wenqi and Mr. Zhang Weixian were appointed as executive directors - On July 18, 2025, Mr. Li Xia resigned as an executive director, and Ms. Zhou Wenqi and Mr. Zhang Weixian were appointed as executive directors[95](index=95&type=chunk) - On August 6, 2025, Mr. Wang Yifan resigned as an executive director[96](index=96&type=chunk) [Audit Committee and Interim Business Review](index=40&type=section&id=Audit%20Committee%20and%20Interim%20Business%20Review) The Audit Committee has reviewed the Group's unaudited condensed consolidated financial statements for the six months ended June 30, 2025, deeming them prepared in compliance with applicable accounting standards and GEM Listing Rules, with adequate disclosures - The Audit Committee comprises Mr. Ma Kaibing (Chairman), Dr. Zuo Xinzhang, and Mr. Li Jian, all independent non-executive directors[97](index=97&type=chunk) - The Audit Committee has reviewed the Group's unaudited condensed consolidated financial statements for the six months ended June 30, 2025[97](index=97&type=chunk) - The Audit Committee believes that these statements were prepared in compliance with applicable accounting standards and the GEM Listing Rules, and that adequate disclosures have been made[97](index=97&type=chunk)

Corporate Information [Corporate Information Details](index=3&type=section&id=Corporate%20Information%20Details) This section details the company's governance structure and contact information, including key personnel and operational specifics - Executive Directors include **Mr. Zhu Min (Chairman)** and **Ms. Ye Xinyu**[7](index=7&type=chunk) - Independent Non-executive Directors include **Mr. Li Kam Wing** (appointed on June 25, 2025), **Mr. Li Yisheng**, and **Mr. Cao Ke**, with **Mr. Tang Yiu On** resigning on August 15, 2025[7](index=7&type=chunk) - The company's stock code is **HKEX: 1020**[14](index=14&type=chunk) Unaudited Interim Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income [Profit or Loss Summary](index=6&type=section&id=Profit%20or%20Loss%20Summary) For the six months ended June 30, 2025, the group experienced a significant decline in revenue, leading to an increased loss for the period and total comprehensive expenses, alongside a wider basic and diluted loss per share Key Profit or Loss Data (RMB in thousands) | Indicator | H1 2025 | H1 2024 (Restated) | | :--- | :--- | :--- | | Revenue | 28,029 | 44,505 | | Cost of sales/services | (17,356) | (35,388) | | Gross profit | 10,673 | 9,117 | | Net other gains or losses | (8,320) | (2,362) | | Net impairment losses | (2,077) | 2,002 | | Administrative expenses | (16,655) | (14,510) | | Finance costs | (14,624) | (21,658) | | Loss before tax | (31,003) | (27,411) | | Loss for the period | (31,003) | (27,411) | | Total comprehensive expenses for the period | (31,512) | (25,835) | | Basic and diluted loss per share | (RMB 0.63 cents) | (RMB 0.55 cents) | Unaudited Interim Condensed Consolidated Statement of Financial Position [Financial Position Summary](index=8&type=section&id=Financial%20Position%20Summary) As of June 30, 2025, the group's net current liabilities significantly increased, resulting in a substantial decrease in total assets less current liabilities and net assets, primarily due to a sharp rise in the current portion of promissory notes Key Financial Position Data (RMB in thousands) | Indicator | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :--- | :--- | :--- | | Non-current assets | 82,548 | 86,956 | | Current assets | 233,126 | 306,988 | | Current liabilities | 265,354 | 126,504 | | Net current (liabilities)/assets | (32,228) | 180,484 | | Total assets less current liabilities | 50,320 | 267,440 | | Non-current liabilities | – | 185,615 | | Net assets | 50,320 | 81,825 | | Total equity | 50,320 | 81,825 | - The current portion of promissory notes significantly increased from approximately **RMB 2,984 thousand** as of December 31, 2024, to approximately **RMB 176,873 thousand** as of June 30, 2025[20](index=20&type=chunk) Unaudited Interim Condensed Consolidated Statement of Changes in Equity [Equity Changes Summary](index=10&type=section&id=Equity%20Changes%20Summary) For the six months ended June 30, 2025, total equity attributable to owners decreased from approximately RMB 82,270 thousand at the beginning of the period to RMB 50,716 thousand at the end, mainly due to loss for the period and exchange differences Key Equity Changes Data (RMB in thousands) | Indicator | January 1, 2025 (Audited) | Loss for the period | Other comprehensive expenses | June 30, 2025 (Unaudited) | | :--- | :--- | :--- | :--- | :--- | | Equity attributable to owners of the Company | 82,270 | (31,053) | (508) | 50,716 | | Non-controlling interests | (445) | 50 | (1) | (396) | | Total equity | 81,825 | (31,003) | (509) | 50,320 | Unaudited Interim Condensed Consolidated Statement of Cash Flows [Cash Flows Summary](index=11&type=section&id=Cash%20Flows%20Summary) For the six months ended June 30, 2025, the group generated net cash from operating activities, but net cash used in financing activities led to an overall decrease in cash and cash equivalents Key Cash Flow Data (RMB in thousands) | Indicator | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Net cash generated from operating activities | 26,067 | 21,511 | | Net cash used in investing activities | 107 | (4,510) | | Net cash used in financing activities | (28,685) | 1,944 | | Net decrease in cash and cash equivalents | (2,511) | 18,945 | | Cash and cash equivalents at end of period | 23,248 | 51,557 | Notes to the Unaudited Interim Condensed Consolidated Financial Statements [1. BASIS OF PREPARATION](index=12&type=section&id=1.%20BASIS%20OF%20PREPARATION) The condensed consolidated financial statements are prepared under HKAS 34 "Interim Financial Reporting" and Appendix 16 of the Listing Rules, primarily on a historical cost basis, with some financial instruments measured at fair value - The financial statements are prepared in accordance with **Hong Kong Accounting Standard 34 "Interim Financial Reporting"** issued by the Hong Kong Institute of Certified Public Accountants and Appendix 16 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited[25](index=25&type=chunk)[29](index=29&type=chunk) - The statements are prepared on a **historical cost basis**, except for certain financial instruments measured at fair value[26](index=26&type=chunk)[30](index=30&type=chunk) [2. PRINCIPAL ACCOUNTING POLICIES](index=12&type=section&id=2.%20PRINCIPAL%20ACCOUNTING%20POLICIES) Accounting policies for this period are consistent with those applied in the annual financial statements for the year ended December 31, 2024, with no significant impact from new or revised HKFRSs - The accounting policies for the six months ended June 30, 2025, are **consistent** with those presented in the group's annual financial statements for the year ended December 31, 2024[27](index=27&type=chunk)[30](index=30&type=chunk) - New or revised standards effective from January 1, 2025, had **no significant impact** on the group's consolidated financial statements[32](index=32&type=chunk) [3. PRIOR PERIOD ADJUSTMENTS ON COMPARATIVE FIGURES](index=13&type=section&id=3.%20PRIOR%20PERIOD%20ADJUSTMENTS%20ON%20COMPARATIVE%20FIGURES) Management adjusted prior period financial statements to correct errors in exchange difference allocation for non-controlling interests and promissory note amortization, leading to restated comparative information - An error was identified regarding the allocation of exchange differences arising from the translation of the presentation currency of a non-wholly owned subsidiary, requiring a revision of the allocation between **owners of the Company and non-controlling interests**[34](index=34&type=chunk) - The amortization schedule for promissory notes was previously incorrect, with the revised effective interest rate for the PN corrected from 16.78% to **23.72%**, necessitating an adjustment to interest expenses[34](index=34&type=chunk) Impact of Prior Period Adjustments on Profit or Loss (RMB in thousands) | Indicator | Previously Reported | Prior Period Adjustment (1) | Prior Period Adjustment (2) | Restated | | :--- | :--- | :--- | :--- | :--- | | Finance costs | (17,050) | – | (4,608) | (21,658) | | Loss before tax | (22,803) | – | (4,608) | (27,411) | | Loss for the period | (22,803) | – | (4,608) | (27,411) | | Loss for the period attributable to owners of the Company | (22,149) | – | (4,608) | (26,757) | | Basic and diluted loss per share | (RMB 0.45 cents) | – | (RMB 0.1 cents) | (RMB 0.55 cents) | [4. REVENUE](index=15&type=section&id=4.%20REVENUE) The group's total revenue decreased by approximately 37% year-on-year in the first half of 2025, primarily due to a significant reduction in internet business revenue, while money lending business revenue slightly increased Revenue Analysis (RMB in thousands) | Revenue Source | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Revenue from internet business | 18,498 | 35,568 | | Revenue from money lending business | 9,531 | 8,937 | | **Total Revenue** | **28,029** | **44,505** | [5. OPERATING SEGMENTS](index=15&type=section&id=5.%20OPERATING%20SEGMENTS) The group's operating segments have been reclassified from three (money lending, e-commerce, internet education services) to two (money lending business and internet business) to reflect the current internal reporting structure, with money lending business recording a profit and internet business a loss in H1 2025 - The group's operating activities are divided into two segments: i) **money lending business**; and ii) **internet business** (e-commerce and internet education services have been merged)[41](index=41&type=chunk)[43](index=43&type=chunk) Revenue and Results by Operating Segment (RMB in thousands) | Segment | H1 2025 Revenue | H1 2025 Segment (Loss)/Profit | | :--- | :--- | :--- | | Money lending business | 9,531 | 5,212 | | Internet business | 18,498 | (6,124) | | **Consolidated** | **28,029** | **(912)** | | Unallocated corporate income | | 832 | | Unallocated corporate expenses | | (30,923) | | **Loss before tax** | | **(31,003)** | [6. NET IMPAIRMENT LOSS RECOGNISED/(REVERSED)](index=18&type=section&id=6.%20NET%20IMPAIRMENT%20LOSS%20RECOGNISED/(REVERSED)) In the first half of 2025, the group recognized a net impairment loss of approximately RMB 2,077 thousand, contrasting with a net impairment reversal of approximately RMB 2,002 thousand in the same period of 2024, mainly due to impairment loss on other receivables Net Impairment Loss Recognised/(Reversed) (RMB in thousands) | Item | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Trade receivables | (1,512) | (53) | | Loan receivables | (195) | (1,949) | | Other receivables | 3,784 | – | | **Net impairment loss recognised/(reversed)** | **2,077** | **(2,002)** | [7. FINANCE COSTS](index=18&type=section&id=7.%20FINANCE%20COSTS) The group's finance costs decreased by approximately 32.5% year-on-year in the first half of 2025, primarily due to reduced interest on promissory notes Finance Costs (RMB in thousands) | Item | H1 2025 | H1 2024 (Restated) | | :--- | :--- | :--- | | Interest on lease liabilities | 45 | 43 | | Interest on promissory notes | 14,492 | 21,476 | | Interest on borrowings | 87 | 139 | | **Total finance costs** | **14,624** | **21,658** | [8. TAXATION](index=19&type=section&id=8.%20TAXATION) The group has no assessable profits in Hong Kong, thus no Hong Kong profits tax is provided, while its PRC subsidiaries are subject to a 25% corporate income tax rate - No provision for **Hong Kong profits tax** has been made for the current and prior periods as the group had no assessable profits arising in Hong Kong[55](index=55&type=chunk)[58](index=58&type=chunk) - The tax rate for the PRC subsidiaries is **25%**[59](index=59&type=chunk)[61](index=61&type=chunk) [9. LOSS FOR THE PERIOD](index=20&type=section&id=9.%20LOSS%20FOR%20THE%20PERIOD) For the first half of 2025, the group's loss for the period was RMB 31,003 thousand, primarily after deducting inventory costs recognized as expenses, depreciation of property, plant and equipment, and right-of-use assets Key Deductions for Loss for the Period (RMB in thousands) | Item | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Cost of inventories recognized as expense | 16,274 | 34,447 | | Depreciation of property, plant and equipment | 246 | 281 | | Depreciation of right-of-use assets | 668 | 716 | [10. DIVIDENDS](index=21&type=section&id=10.%20DIVIDENDS) The Board of Directors does not recommend the payment of an interim dividend for the current period - The Directors do not recommend the payment of an interim dividend for the six months ended June 30, 2025 (H1 2024: nil)[64](index=64&type=chunk)[65](index=65&type=chunk) [11. LOSS PER SHARE](index=21&type=section&id=11.%20LOSS%20PER%20SHARE) In the first half of 2025, basic and diluted loss per share attributable to owners was RMB 0.63 cents, an increase from RMB 0.55 cents in the same period of 2024, with diluted loss being the same as basic loss as share options would reduce loss per share Loss Per Share Data | Indicator | H1 2025 | H1 2024 (Restated) | | :--- | :--- | :--- | | Loss for the period attributable to owners of the Company (RMB in thousands) | (31,053) | (26,757) | | Weighted average number of ordinary shares for basic and diluted loss per share (thousands of shares) | 4,918,781 | 4,908,781 | | Basic and diluted loss per share | (RMB 0.63 cents) | (RMB 0.55 cents) | - The diluted loss per share is the same as the basic loss per share because the calculation of diluted loss per share does not assume the exercise of the company's outstanding share options, as they would result in a **reduction in loss per share**[69](index=69&type=chunk)[72](index=72&type=chunk) [12. PROPERTY, PLANT AND EQUIPMENT](index=22&type=section&id=12.%20PROPERTY,%20PLANT%20AND%20EQUIPMENT) For the six months ended June 30, 2025, the group neither purchased nor disposed of any property, plant and equipment - For the six months ended June 30, 2025, the group **neither purchased nor disposed of any property, plant and equipment** (2024: nil)[70](index=70&type=chunk)[73](index=73&type=chunk) [13. RIGHT-OF-USE ASSETS](index=22&type=section&id=13.%20RIGHT-OF-USE%20ASSETS) No new right-of-use assets were added during the period ended June 30, 2025, compared to RMB 2,615 thousand in the same period of 2024 - During the period ended June 30, 2025, **no new right-of-use assets were added** (2024: RMB 2,615 thousand)[71](index=71&type=chunk)[74](index=74&type=chunk) [14. TRADE RECEIVABLES](index=23&type=section&id=14.%20TRADE%20RECEIVABLES) As of June 30, 2025, trade receivables significantly decreased to RMB 23,217 thousand, with an impairment reversal of approximately RMB 1,512 thousand recognized Ageing Analysis of Trade Receivables (RMB in thousands) | Ageing | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | 0 to 30 days | 8,473 | 7,208 | | 31 to 60 days | 3,192 | 17,966 | | 61 to 90 days | 3,707 | 12,929 | | 91 to 120 days | 1,349 | 566 | | 121 to 180 days | – | – | | 181 days to one year | 6,496 | 11,618 | | **Total** | **23,217** | **50,287** | - An impairment reversal of approximately **RMB 1,512 thousand** was recognized for the six months ended June 30, 2025 (H1 2024: approximately RMB 53 thousand)[79](index=79&type=chunk)[81](index=81&type=chunk) [15. LOAN RECEIVABLES](index=24&type=section&id=15.%20LOAN%20RECEIVABLES) As of June 30, 2025, net loan receivables decreased to RMB 168,703 thousand, with an impairment reversal of approximately RMB 195 thousand recognized Loan Receivables by Maturity (RMB in thousands) | Remaining Period | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Within three months | 82,960 | 122,208 | | Three months to one year | 81,011 | 80,367 | | Over one year (with repayment on demand clause) | 4,732 | 6,644 | | Over one year | – | 523 | | **Total** | **168,703** | **209,742** | - An impairment reversal of approximately **RMB 195 thousand** was recognized for the six months ended June 30, 2025 (H1 2024: approximately RMB 1,949 thousand)[84](index=84&type=chunk)[86](index=86&type=chunk) - Loan receivables bear interest at **variable and fixed rates** and are secured by properties and personal guarantees of the debtors/certain individuals[80](index=80&type=chunk)[82](index=82&type=chunk) [16. TRADE PAYABLES](index=25&type=section&id=16.%20TRADE%20PAYABLES) As of June 30, 2025, trade payables decreased to RMB 40,300 thousand, with suppliers granting credit terms within 30 days Ageing Analysis of Trade Payables (RMB in thousands) | Ageing | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | 0 to 30 days | 7,933 | 7,167 | | 31 to 60 days | – | 17,064 | | 61 to 90 days | 6,733 | 12,084 | | Over 90 days | 25,634 | 31,748 | | **Total** | **40,300** | **68,063** | - The credit period granted by suppliers to the group is **within 30 days**[89](index=89&type=chunk) [17. PROMISSORY NOTES](index=26&type=section&id=17.%20PROMISSORY%20NOTES) As of June 30, 2025, total promissory notes amounted to RMB 176,873 thousand, with all promissory notes classified as current liabilities and no non-current portion Promissory Notes Movement and Analysis (RMB in thousands) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | At January 1 | 188,360 | 198,256 | | Accrued interest deducted | 14,492 | 36,868 | | Loss on revised promissory notes | 1,045 | 6,876 | | Repayment | (12,996) | (39,257) | | Exchange adjustment | (6,197) | 8,345 | | **At June 30/December 31** | **176,873** | **188,360** | | **Analysed as:** | | | | Current | 176,873 | 2,984 | | Non-current | – | 185,376 | [18. SHARE CAPITAL](index=27&type=section&id=18.%20SHARE%20CAPITAL) As of June 30, 2025, the company's issued and fully paid share capital remained at 4,081,448 thousand shares, equivalent to RMB 346,736 thousand Share Capital Details | Item | Number of Shares (thousands of shares) | Amount (HKD in thousands) | | :--- | :--- | :--- | | Authorised share capital (HKD 0.10 par value per share) | 19,066,667 | 1,906,667 | | Issued and fully paid share capital (as at June 30, 2025) | 4,081,448 | 408,145 | | Shown in condensed consolidated financial statements (RMB in thousands equivalent) | | 346,736 | [19. RELATED PARTY TRANSACTIONS](index=28&type=section&id=19.%20RELATED%20PARTY%20TRANSACTIONS) Related party transactions primarily involve remuneration for directors and key management, along with loan receivables and interest received from executive directors, with one executive director's loan fully repaid in early 2025 Remuneration of Directors and Key Management (RMB in thousands) | Item | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Remuneration of directors and other key management personnel | 849 | 1,136 | | Contributions to retirement benefit schemes | 8 | 7 | | **Total** | **857** | **1,143** | Related Party Transactions (RMB in thousands) | Name of Related Party | Relationship | Nature of Transaction/Balance | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Lu Yongchao (resigned Executive Director) | Executive Director | Interest received on loan | 28 | 63 | | | | Loan receivables | – | 2,692 | | Ye Xinyu | Executive Director | Interest received on loan | 81 | 79 | | | | Loan receivables | 2,644 | 2,647 | - The loan receivables from **Mr. Lu Yongchao** were fully repaid in early 2025[100](index=100&type=chunk) [20. EVENT AFTER THE REPORTING PERIOD](index=30&type=section&id=20.%20EVENT%20AFTER%20THE%20REPORTING%20PERIOD) Two significant events occurred after the reporting period: a subsidiary granted a HKD 5 million loan, and the maturity dates of two promissory notes were extended to January 1, 2027 - On July 11, 2025, AIA Credit Limited, a subsidiary of the Company, granted a loan with a principal amount of **HKD 5 million** to a borrower[101](index=101&type=chunk)[104](index=104&type=chunk) - The maturity dates of two promissory notes with principal amounts of **HKD 44,208,000** and **HKD 153,208,000** were extended from January 1, 2026, to January 1, 2027[103](index=103&type=chunk)[105](index=105&type=chunk) Management Discussion and Analysis [MARKET REVIEW](index=31&type=section&id=MARKET%20REVIEW) In the first half of 2025, China's economy grew by 5.3% amidst a complex international environment and US tariff policies, leading major economies, while Hong Kong's economy also expanded steadily, though global uncertainties remain high - In the first half of 2025, China's Gross Domestic Product (GDP) grew by **5.3% year-on-year**, leading major economies[106](index=106&type=chunk)[109](index=109&type=chunk) - Major international economic institutions forecast global economic growth to slow to **2.3%-2.4%** in 2025[107](index=107&type=chunk)[109](index=109&type=chunk) - Hong Kong's economy demonstrated considerable resilience with a **3.1% year-on-year real GDP growth** in Q2 2025, but external uncertainties remain high[112](index=112&type=chunk)[113](index=113&type=chunk) [BUSINESS REVIEW](index=33&type=section&id=BUSINESS%20REVIEW) The group's business is divided into money lending and internet segments; money lending performed stably, while internet business revenue decreased due to lower demand for refurbished used iPhones, and internet education services are undergoing restructuring after suspending operations due to policy changes - The group's money lending business (AIA Credit Limited, TCL) provides a **stable revenue source** by offering first mortgage property loans to high-net-worth or large corporate clients[116](index=116&type=chunk)[119](index=119&type=chunk) - The e-commerce segment of the internet business (VTZero) saw a **decrease in revenue** in the first half of 2025, primarily due to reduced demand for refurbished used iPhones[121](index=121&type=chunk)[123](index=123&type=chunk) - Internet education services (WoXue) suspended operations in July 2021 due to China's "Double Reduction" policy and are currently undergoing **restructuring**, with business expected to resume upon completion of equity transfer[122](index=122&type=chunk)[124](index=124&type=chunk) [FINANCIAL REVIEW](index=35&type=section&id=FINANCIAL%20REVIEW) The group experienced a decline in revenue and an expanded loss for the period in the first half of 2025, despite an increase in gross profit, alongside rising administrative expenses, reduced finance costs, an increased gearing ratio, and challenging liquidity Key Financial Review Data (RMB in thousands) | Indicator | H1 2025 | H1 2024 (Restated) | | :--- | :--- | :--- | | Total revenue | 28,029 | 44,505 | | Money lending business revenue | 9,500 | 8,900 | | Internet business revenue | 18,500 | 35,600 | | Cost of sales/services | 17,400 | 35,400 | | Gross profit | 10,700 | 9,100 | | Impairment reversal on trade receivables | 1,500 | 100 | | Impairment reversal on loan receivables | 200 | 1,900 | | Administrative expenses | 16,700 | 14,500 | | Finance costs | 14,600 | 21,700 | | Loss for the period and total comprehensive expenses | 31,500 | 25,800 | | Basic loss per share | RMB 0.63 cents | RMB 0.55 cents | | Bank balances and cash (end of period) | 23,200 | 26,500 | | Total equity (end of period) | 50,300 | 81,800 | | Promissory notes (end of period) | 176,900 | 188,400 | | Gearing ratio | 57% | 53% | - The group **did not declare any interim dividend** for the first half of 2025[148](index=148&type=chunk)[152](index=152&type=chunk) - As of June 30, 2025, the group pledged buildings with a carrying value of approximately **RMB 6.4 million** as collateral for promissory notes totaling approximately **RMB 173.9 million**, with no bank deposits pledged[154](index=154&type=chunk)[155](index=155&type=chunk)[158](index=158&type=chunk) - During the reporting period, the group had **no significant acquisitions or disposals** of subsidiaries and associates[156](index=156&type=chunk)[159](index=159&type=chunk) [CONTINGENT LIABILITIES](index=39&type=section&id=CONTINGENT%20LIABILITIES) The group is involved in a significant lawsuit against its subsidiary VT Zero Limited, claiming approximately HKD 63.16 million; the court dismissed the plaintiff's interim payment and injunction applications, with the trial scheduled for early July 2026 - VT Zero Limited, a wholly-owned subsidiary, received a writ of summons from the High Court of Hong Kong, with a supplier, Ai Shou Hui Co., Limited, claiming approximately **HKD 26.23 million** (net proceeds from sales of unpaid goods) and approximately **HKD 36.93 million** (overdue remittances)[157](index=157&type=chunk)[160](index=160&type=chunk) - VT Zero disputes the claims and has filed a counterclaim, alleging the plaintiff breached quality warranties and that the overdue remittances constitute **unenforceable penalties**[162](index=162&type=chunk)[166](index=166&type=chunk) - The court dismissed the plaintiff's applications for interim payment and proprietary injunction in June 2023, finding that VT Zero had a reasonably arguable defense, with the trial scheduled for **early July 2026**[163](index=163&type=chunk)[166](index=166&type=chunk) [CURRENCY EXCHANGE EXPOSURES](index=41&type=section&id=CURRENCY%20EXCHANGE%20EXPOSURES) The group's purchases and sales are primarily denominated in Euro, RMB, and HKD, while operating expenses are mainly in HKD and RMB, with robust monitoring and management of currency exchange rate fluctuation risks - The group's purchases and sales are primarily denominated in **Euro, RMB, and HKD**, while operating expenses are mainly in **HKD and RMB**[167](index=167&type=chunk)[169](index=169&type=chunk) - The group has established a robust system to **monitor and manage** the risks associated with currency exchange rate fluctuations[167](index=167&type=chunk)[169](index=169&type=chunk) [HUMAN RESOURCES AND STAFF REMUNERATION](index=41&type=section&id=HUMAN%20RESOURCES%20AND%20STAFF%20REMUNERATION) As of June 30, 2025, the group's total headcount increased to 42, with continued investment in training programs and fair compensation to enhance employee professionalism and cohesion - As of June 30, 2025, the group employed a total of **42 staff** in mainland China and Hong Kong (2024: 35 staff)[168](index=168&type=chunk)[170](index=170&type=chunk) - The group continues to invest significant resources to enhance **training programs**, providing learning opportunities for management and professional technical personnel[168](index=168&type=chunk)[170](index=170&type=chunk) - The group provides **fair remuneration** to its employees to encourage their dedication and enhance professionalism[168](index=168&type=chunk)[170](index=170&type=chunk) [FUTURE PROSPECTS](index=42&type=section&id=FUTURE%20PROSPECTS) Despite global economic uncertainties, the group anticipates a slow recovery in Hong Kong and mainland China's economies, planning cautious capital management, seeking growth in money lending, diversifying internet business, and actively expanding into new areas like satellite technology products and intellectual property services, especially in Southeast Asia - The group anticipates a **slow recovery** in the economies of Hong Kong and mainland China in the second half of 2025, though market volatility and geopolitical situations continue to pose uncertainties[173](index=173&type=chunk)[174](index=174&type=chunk) - The group will continue to adopt **prudent capital management and liquidity risk management**, seek reasonable returns from loan growth in its money lending business, and implement robust and flexible marketing strategies for its internet business[173](index=173&type=chunk)[174](index=174&type=chunk) - The group is actively exploring market opportunities for **communication, navigation, and remote sensing satellite technology products and solutions**, particularly in Hong Kong, Southeast Asia, and the Middle East, and has signed MOUs with several ASEAN companies[175](index=175&type=chunk)[176](index=176&type=chunk) - The group intends to acquire Newsbaba Ltd. for **RMB 120 million** to expand into the Chinese intellectual property asset management and maintenance services market[178](index=178&type=chunk)[180](index=180&type=chunk) [COMPLIANCE WITH MONEY LENDERS ORDINANCE (CHAPTER 163 OF THE LAWS OF HONG KONG) (THE "MLO")](index=45&type=section&id=COMPLIANCE%20WITH%20MONEY%20LENDERS%20ORDINANCE%20(CHAPTER%20163%20OF%20THE%20LAWS%20OF%20HONG%20KONG)%20(THE%20%22MLO%22)) The group's money lending business strictly complies with the Money Lenders Ordinance, targeting high-net-worth individuals, corporations, and other licensed money lenders, with most loans secured by Hong Kong properties and rigorous credit risk assessment and monitoring procedures - The group's money lending business is required to and has at all times **strictly complied with all relevant laws and regulations**, including the Money Lenders Ordinance (Chapter 163 of the Laws of Hong Kong)[182](index=182&type=chunk)[184](index=184&type=chunk) - The primary target clients are **high-net-worth individuals, corporations, and other licensed money lenders** referred through commercial networks, with most loans secured by first legal mortgages on Hong Kong properties[186](index=186&type=chunk)[187](index=187&type=chunk) - The company has adopted procedures for **monitoring loan repayment and recovery**, including direct management of the lending segment by executive directors and regular reporting to the Board[186](index=186&type=chunk)[187](index=187&type=chunk) Other Information [COMPLIANCE WITH THE CORPORATE GOVERNANCE CODE](index=47&type=section&id=COMPLIANCE%20WITH%20THE%20CORPORATE%20GOVERNANCE%20CODE) The company has adopted the principles and code provisions of the Corporate Governance Code and complied with all applicable code provisions for the six months ended June 30, 2025 - The company has adopted the principles and code provisions of the **Corporate Governance Code** as set out in Appendix 14 of the Listing Rules[188](index=188&type=chunk)[191](index=191&type=chunk) - The Board believes that the company has **complied with all applicable code provisions** set out in Part 2 of the Corporate Governance Code for the six months ended June 30, 2025[188](index=188&type=chunk)[191](index=191&type=chunk) [COMPLIANCE WITH THE MODEL CODE FOR SECURITIES TRANSACTIONS BY DIRECTORS OF LISTED ISSUERS](index=47&type=section&id=COMPLIANCE%20WITH%20THE%20MODEL%20CODE%20FOR%20SECURITIES%20TRANSACTIONS%20BY%20DIRECTORS%20OF%20LISTED%20ISSUERS) The company has adopted a strict code of conduct for directors' securities transactions, with all directors confirming compliance, and relevant employees also bound by similar rules - The company has adopted a **code of conduct for directors' securities transactions** with terms no less exacting than the required standard set out in Appendix 10 of the Listing Rules[189](index=189&type=chunk)[192](index=192&type=chunk) - Following specific enquiries with all Directors, all Directors have confirmed their **compliance with the required standard** set out in the Model Code for the six months ended June 30, 2025[189](index=189&type=chunk)[192](index=192&type=chunk) - Relevant employees who may possess unpublished price-sensitive information are required to comply with the company's **code for employee securities transactions**[190](index=190&type=chunk)[192](index=192&type=chunk) [CHANGES IN DIRECTORS' INFORMATION](index=48&type=section&id=CHANGES%20IN%20DIRECTORS'%20INFORMATION) Mr. Li Kam Wing was appointed as an Independent Non-executive Director on June 25, 2025, while Mr. Tang Yiu On resigned as an Independent Non-executive Director on August 15, 2025 - **Mr. Li Kam Wing** was appointed as an Independent Non-executive Director of the company on June 25, 2025[193](index=193&type=chunk)[196](index=196&type=chunk) - **Mr. Tang Yiu On** resigned as an Independent Non-executive Director on August 15, 2025[194](index=194&type=chunk)[196](index=196&type=chunk) [AUDIT COMMITTEE AND REVIEW OF THE UNAUDITED INTERIM RESULTS](index=48&type=section&id=AUDIT%20COMMITTEE%20AND%20REVIEW%20OF%20THE%20UNAUDITED%20INTERIM%20RESULTS) The Audit Committee, in conjunction with management, reviewed the group's accounting principles and policies, discussed audit, internal control, and financial reporting matters, and reviewed the unaudited interim results for the six months ended June 30, 2025 - The Audit Committee comprises three Independent Non-executive Directors: **Mr. Li Kam Wing** (appointed on August 15, 2025), **Mr. Li Yisheng**, **Mr. Cao Ke**, and **Mr. Tang Yiu On** (resigned on August 15, 2025)[195](index=195&type=chunk)[197](index=197&type=chunk) - The Audit Committee has reviewed the group's **accounting principles, policies, audit, internal control, and financial reporting matters**, and has reviewed the unaudited interim results for the first half of 2025[195](index=195&type=chunk)[197](index=197&type=chunk) [IMPORTANT EVENTS AFTER THE REPORTING PERIOD](index=49&type=section&id=IMPORTANT%20EVENTS%20AFTER%20THE%20REPORTING%20PERIOD) After the reporting period, a subsidiary of the company granted a HKD 5 million loan, and the maturity dates of two promissory notes were extended to January 1, 2027 - On July 11, 2025, AIA Credit Limited, a subsidiary of the company, entered into a loan agreement with a borrower, granting a loan with a principal amount of **HKD 5 million**[198](index=198&type=chunk)[200](index=200&type=chunk) - The maturity dates of two promissory notes with principal amounts of **HKD 44,208,000** and **HKD 153,208,000** were extended from January 1, 2026, to January 1, 2027[199](index=199&type=chunk)[201](index=201&type=chunk) [PURCHASE, SALE OR REDEMPTION OF THE COMPANY'S LISTED SECURITIES](index=50&type=section&id=PURCHASE,%20SALE%20OR%20REDEMPTION%20OF%20THE%20COMPANY'S%20LISTED%20SECURITIES) During the six months ended June 30, 2025, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities - During the six months ended June 30, 2025, **neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities**[203](index=203&type=chunk)[205](index=205&type=chunk) [SHARE OPTION SCHEME AND MOVEMENT OF THE SHARE OPTIONS](index=50&type=section&id=SHARE%20OPTION%20SCHEME%20AND%20MOVEMENT%20OF%20THE%20SHARE%20OPTIONS) The company has a share option scheme to incentivize eligible participants; as of June 30, 2025, 237,000,000 share options remained unexercised, representing 5.81% of issued shares, with clear exercise price and period stipulations - The company has a **share option scheme**, adopted on September 24, 2021, to provide incentives or rewards to selected eligible participants[204](index=204&type=chunk)[206](index=206&type=chunk) - As of June 30, 2025, the number of shares involved in share options granted and outstanding under the scheme was **237,000,000 shares**, representing **5.81%** of the company's issued shares on that date[214](index=214&type=chunk)[215](index=215&type=chunk) - The exercise price of the share options shall be determined by the Board, but shall not be less than the highest of the closing price on the Stock Exchange on the date of grant, the average closing price for the five trading days immediately preceding the date of grant, and the par value per share[213](index=213&type=chunk)[216](index=216&type=chunk) - Share options may be exercised at any time from the date of grant for a period of **three years up to the tenth anniversary** of the date of grant[219](index=219&type=chunk)[221](index=221&type=chunk) [INTERESTS AND SHORT POSITIONS OF OUR DIRECTORS IN THE SHARES, UNDERLYING SHARES OR DEBENTURES OF OUR COMPANY](index=56&type=section&id=INTERESTS%20AND%20SHORT%20POSITIONS%20OF%20OUR%20DIRECTORS%20IN%20THE%20SHARES,%20UNDERLYING%20SHARES%20OR%20DEBENTURES%20OF%20OUR%20COMPANY) As of June 30, 2025, Mr. Zhu Min, through his wholly-owned Cybernaut International Limited, held a beneficial interest of approximately 15.54% in the company's issued share capital - **Mr. Zhu Min** holds 356,000,000 shares (long position) through a controlled corporation, representing approximately **8.72%**[231](index=231&type=chunk) - **Cybernaut International Limited**, wholly-owned by Mr. Zhu Min, is the legal and beneficial owner of approximately **15.54%** of the company's entire issued share capital, holding 634,284,000 shares (long position)[231](index=231&type=chunk) [INTEREST DISCLOSEABLE UNDER THE SFO AND SUBSTANTIAL SHAREHOLDERS](index=57&type=section&id=INTEREST%20DISCLOSEABLE%20UNDER%20THE%20SFO%20AND%20SUBSTANTIAL%20SHAREHOLDERS) As of June 30, 2025, apart from the disclosed directors, the company had not been notified by any person of interests or short positions in shares or underlying shares of 5% or more, as required by the SFO - As of June 30, 2025, save for the Directors of the company, no person had notified the company of any interests or short positions in the shares or underlying shares, or directly or indirectly owned **5% or more** of the shares, as required to be disclosed under Divisions 2 and 3 of Part XV of the Securities and Futures Ordinance[232](index=232&type=chunk)[234](index=234&type=chunk) [APPRECIATION](index=57&type=section&id=APPRECIATION) The Board of Directors extends its sincere gratitude to shareholders, business partners, clients, and all employees for their continuous support and contributions - The Board of Directors extends its sincere gratitude to shareholders, business partners, and clients for their continuous support, and to the dedicated staff for their contributions to the group's success[233](index=233&type=chunk)[235](index=235&type=chunk)

annual REPORT 2025 年報 Annual REPORT 2025 年報 1 CONTENTS 目錄 2 Corporate Information 集團資料 4 Director's Statement 董事會報告 12 Biographical Details of Directors 董事之簡歷 14 Corporate Governance Report 企業管治報告 31 Directors' Report 董事會報告 41 Independent Auditor's Report 獨立核數師報告 50 Consolidated Statement of Profit or Loss and Other Comprehensive Income 綜合損益及其他全面收益表 51 Consolidated Statement of Financial Position 綜合財務狀況表 53 Consolidated Statement of Changes in Equity 綜合權益變動表 55 Consolidated Statement of Cash Flows 綜合現金流量表 5 ...