[Interim Results Announcement](index=1&type=section&id=Interim%20Results%20Announcement) [Company Overview and Scope of Report](index=1&type=section&id=Company%20Overview%20and%20Scope%20of%20Report) This announcement from China Titan Energy Technology Group Co., Ltd. discloses unaudited interim results for the six months ended June 30, 2025, reviewed by the audit committee - China Titan Energy Technology Group Co., Ltd. released its interim results announcement for the six months ended June 30, 2025[2](index=2&type=chunk) - The condensed consolidated interim financial information is unaudited but has been reviewed by the company's audit committee[3](index=3&type=chunk) [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=2&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) [Key Financial Performance](index=2&type=section&id=Key%20Financial%20Performance) For the six months ended June 30, 2025, the Group experienced a year-on-year decrease in turnover, a significant reduction in gross profit, and an expanded loss for the period Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (For the six months ended June 30) | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | Year-on-year Change (RMB thousands) | Year-on-year Change (%) | | :--- | :--- | :--- | :--- | :--- | | Turnover | 137,218 | 148,007 | (10,789) | -7.29% | | Cost of sales | (101,486) | (100,731) | (755) | 0.75% | | Gross profit | 35,732 | 47,276 | (11,544) | -24.42% | | Other income and gains | 1,951 | 4,164 | (2,213) | -53.15% | | Selling and distribution expenses | (26,336) | (32,149) | 5,813 | -18.08% | | Administrative and other expenses | (35,187) | (38,743) | 3,556 | -9.18% | | Loss before tax | (29,804) | (31,753) | 1,949 | -6.14% | | Loss for the period | (29,809) | (29,564) | (245) | 0.83% | | Loss for the period attributable to owners of the Company | (29,618) | (29,290) | (328) | 1.12% | | Basic and diluted loss per share | (1.99 cents) | (1.96 cents) | (0.03 cents) | 1.53% | [Condensed Consolidated Statement of Financial Position](index=4&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) [Asset and Liability Structure](index=4&type=section&id=Asset%20and%20Liability%20Structure) As of June 30, 2025, the Group's total assets slightly decreased, with non-current assets increasing while current assets and current liabilities both decreased Condensed Consolidated Statement of Financial Position (As of June 30) | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | **Non-current assets** | | | | | | Property, plant and equipment | 171,265 | 155,907 | 15,358 | 9.85% | | Interests in associates | 19,455 | 20,392 | (937) | -4.59% | | Total non-current assets | 236,847 | 221,823 | 15,024 | 6.77% | | **Current assets** | | | | | | Inventories | 162,599 | 143,082 | 19,517 | 13.64% | | Trade receivables | 321,705 | 380,413 | (58,708) | -15.43% | | Restricted bank balances | 21,883 | 56,874 | (34,991) | -61.52% | | Bank balances and cash | 154,588 | 133,861 | 20,727 | 15.48% | | Total current assets | 755,088 | 798,874 | (43,786) | -5.48% | | **Current liabilities** | | | | | | Trade and bills payables | 130,280 | 155,765 | (25,485) | -16.36% | | Bank and other borrowings (current) | 209,534 | 155,800 | 53,734 | 34.49% | | Total current liabilities | 379,369 | 386,403 | (7,034) | -1.82% | | Net current assets | 375,719 | 412,471 | (36,752) | -8.91% | | **Non-current liabilities** | | | | | | Bank and other borrowings (non-current) | 60,581 | 53,968 | 6,613 | 12.25% | | Total non-current liabilities | 71,896 | 65,283 | 6,613 | 10.13% | | Net assets | 540,670 | 569,011 | (28,341) | -4.98% | | Total equity | 540,670 | 569,011 | (28,341) | -4.98% | [Notes to the Condensed Consolidated Interim Financial Information](index=6&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Interim%20Financial%20Information) [1. General Information](index=6&type=section&id=1.%20General%20Information) This section outlines China Titan Energy Technology Group Co., Ltd.'s registration, listing, ultimate controlling party, main business scope, and presentation currency - The Company was incorporated in the Cayman Islands and its shares are listed on the Hong Kong Stock Exchange[8](index=8&type=chunk) - The ultimate controlling party is the State-owned Assets Supervision and Administration Commission of Tangshan Municipal People's Government, China[8](index=8&type=chunk) - Principal activities include the supply of power electronic products and equipment, sales and leasing of electric vehicles, provision of electric vehicle charging services, and BOT charging pile construction services, with the Company's principal business being investment holding[9](index=9&type=chunk) - The condensed consolidated financial statements are presented in Renminbi[10](index=10&type=chunk) [2. Basis of Preparation](index=6&type=section&id=2.%20Basis%20of%20Preparation) The condensed consolidated financial statements are prepared in accordance with HKAS 34 and applicable disclosure requirements of Appendix D2 to the Listing Rules - The condensed consolidated financial statements are prepared in accordance with Hong Kong Accounting Standard 34 and Appendix D2 to the Listing Rules of the Stock Exchange[11](index=11&type=chunk) [3. Principal Accounting Policies](index=6&type=section&id=3.%20Principal%20Accounting%20Policies) The condensed consolidated financial information is prepared on a historical cost basis, with accounting policies consistent with last year's annual financial statements, and new HKFRS amendments have no material impact - The condensed consolidated financial information is prepared on a historical cost basis, except for certain financial instruments measured at fair value[12](index=12&type=chunk) - The new and revised Hong Kong Financial Reporting Standards (e.g., HKAS 21 amendments) applied for the first time in the current period have no material impact on financial performance and position[13](index=13&type=chunk) [4. Revenue and Segment Information](index=7&type=section&id=4.%20Revenue%20and%20Segment%20Information) Group revenue primarily derives from sales of electronic products, EV charging services, and other businesses, with total revenue decreasing year-on-year due to reduced power DC system and charging service revenue - Turnover primarily derives from sales of electronic products (power DC systems, energy storage equipment, electric vehicle charging equipment), provision of electric vehicle charging services, and other business income such as electric vehicle sales and leasing[14](index=14&type=chunk) Revenue Analysis (For the six months ended June 30) | Principal Product or Service Lines | 2025 (RMB thousands) | 2024 (RMB thousands) | Year-on-year Change (RMB thousands) | Year-on-year Change (%) | | :--- | :--- | :--- | :--- | :--- | | Sales of electronic products - Power DC systems | 46,858 | 60,122 | (13,264) | -22.06% | | Sales of electronic products - Charging equipment | 79,053 | 75,914 | 3,139 | 4.13% | | Provision of electric vehicle charging services | 11,130 | 11,892 | (762) | -6.41% | | Other business income such as electric vehicle sales and leasing | 177 | 79 | 98 | 124.05% | | **Total Turnover** | **137,218** | **148,007** | **(10,789)** | **-7.29%** | Segment Results (For the six months ended June 30) | Segment | 2025 Revenue (RMB thousands) | 2025 Results (RMB thousands) | 2024 Revenue (RMB thousands) | 2024 Results (RMB thousands) | | :--- | :--- | :--- | :--- | :--- | | Power DC systems | 46,858 | 7,356 | 60,122 | 13,893 | | Charging equipment | 79,053 | 26,435 | 75,914 | 24,876 | | Charging services | 11,130 | 849 | 11,892 | 342 | | Unallocated | 177 | 133 | 79 | 25 | | **Total** | **137,218** | **34,773** | **148,007** | **39,136** | Segment Assets and Liabilities (As of June 30) | Segment | 2025 Assets (RMB thousands) | 2024 Assets (RMB thousands) | 2025 Liabilities (RMB thousands) | 2024 Liabilities (RMB thousands) | | :--- | :--- | :--- | :--- | :--- | | Power DC systems | 263,699 | 290,023 | 55,209 | 94,993 | | Charging equipment | 444,879 | 435,716 | 93,142 | 100,161 | | Charging services | 53,158 | 51,564 | 13,113 | 27,715 | | **Total segments** | **761,736** | **777,303** | **161,464** | **222,869** | | Unallocated | 230,199 | 243,394 | 289,801 | 232,063 | | **Consolidated total** | **991,935** | **1,020,697** | **451,265** | **454,932** | [5. Income Tax (Expense) Credit](index=10&type=section&id=5.%20Income%20Tax%20(Expense)%20Credit) The Group recorded a deferred tax credit of RMB 5 thousand for the period, with no corporate income tax provision due to no taxable profits in Hong Kong and no taxable profits for its high-tech subsidiary in China Income Tax (Expense) Credit (For the six months ended June 30) | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Deferred tax | (5) | 2,189 | - Hong Kong profits tax is calculated at **16.5%**, but no provision was made as the Group had no income in Hong Kong[22](index=22&type=chunk) - Zhuhai Titan Technology Co., Ltd. is certified as a high-tech enterprise, enjoying a preferential corporate income tax rate of **15%**, but no provision was made due to no taxable profits[22](index=22&type=chunk) [6. Loss for the Period](index=11&type=section&id=6.%20Loss%20for%20the%20Period) The loss for the period was primarily influenced by impairment losses on financial assets, depreciation and amortization, and research and development expenses Components of Loss for the Period (For the six months ended June 30) | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Net impairment losses on financial assets and contract assets | 49 | 8,668 | | Depreciation of property, plant and equipment | 9,169 | 11,759 | | Depreciation of right-of-use assets | 910 | 910 | | Amortisation of intangible assets | 4,243 | 2,443 | | Total depreciation and amortisation | 14,322 | 15,112 | | Cost of inventories recognised as an expense | 77,941 | 77,368 | | Research and development expenses (included in administrative and other expenses) | 13,328 | 11,265 | [7. Dividends](index=11&type=section&id=7.%20Dividends) No dividends were paid or proposed by the Company for the six months ended June 30, 2025 - The Company did not pay or propose any dividends during the reporting period[25](index=25&type=chunk) [8. Loss Per Share](index=12&type=section&id=8.%20Loss%20Per%20Share) For the six months ended June 30, 2025, both basic and diluted loss per share attributable to owners of the Company increased to RMB 1.99 cents from RMB 1.96 cents last year Loss Per Share (For the six months ended June 30) | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | Loss for the purpose of calculating basic and diluted loss per share (RMB thousands) | (29,618) | (29,290) | | Weighted average number of ordinary shares (thousands of shares) | 1,492,026 | 1,492,026 | | Basic and diluted loss per share | (1.99 cents) | (1.96 cents) | - As the Group incurred a loss, the effect of share options was not included in the diluted loss per share, thus diluted loss per share is the same as basic loss per share[27](index=27&type=chunk) [9. Movements in Property, Plant and Equipment](index=12&type=section&id=9.%20Movements%20in%20Property,%20Plant%20and%20Equipment) During the reporting period, the Group's cost of acquiring property, plant and equipment significantly increased, with a small amount of property, plant and equipment written off - The Group acquired property, plant and equipment at a cost of approximately **RMB 24.8 million**, an increase from RMB 16.194 million in the same period last year[28](index=28&type=chunk) - The Group wrote off approximately **RMB 273 thousand** of property, plant and equipment[28](index=28&type=chunk) [10. Interests in Associates](index=13&type=section&id=10.%20Interests%20in%20Associates) As of June 30, 2025, the Group's interests in associates slightly decreased, maintaining significant influence over Jiangsu Titan Smart Technology Co., Ltd. and Guangdong Titan Intelligent Power Co., Ltd Interests in Associates (As of June 30) | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Investment cost in unlisted associates | 17,145 | 17,145 | | Share of post-acquisition results, net of dividends received | 3,007 | 3,944 | | Cumulative impairment losses recognised | (697) | (697) | | **Total** | **19,455** | **20,392** | - The Group has significant influence over Jiangsu Titan Smart Technology Co., Ltd. and Guangdong Titan Intelligent Power Co., Ltd. due to the right to appoint their board members[29](index=29&type=chunk) [11. Trade Receivables](index=14&type=section&id=11.%20Trade%20Receivables) As of June 30, 2025, the Group's trade receivables (net of impairment allowance) significantly decreased, with a notable shift in aging towards older receivables Trade Receivables (As of June 30) | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Trade receivables | 388,515 | 483,878 | | Less: Impairment loss allowance | (66,810) | (103,465) | | **Net** | **321,705** | **380,413** | Aging Analysis of Trade Receivables (As of June 30) | Aging | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | 0 to 90 days | 59,568 | 215,345 | | 91 to 180 days | 54,722 | 38,094 | | 181 to 365 days | 149,353 | 88,850 | | 1 to 2 years | 53,288 | 26,216 | | 2 to 3 years | 4,774 | 11,908 | | **Total** | **321,705** | **380,413** | - The Group grants an average credit period of **90 days** to trade customers, with some payments due after installation and testing, and retention money due at the end of the product warranty period[30](index=30&type=chunk) [12. Trade and Bills Payables](index=15&type=section&id=12.%20Trade%20and%20Bills%20Payables) As of June 30, 2025, the Group's total trade and bills payables decreased, with a shift in aging towards older payables Trade and Bills Payables (As of June 30) | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Trade payables | 75,880 | 106,527 | | Bills payables | 54,400 | 49,238 | | **Total** | **130,280** | **155,765** | Aging Analysis of Trade and Bills Payables (As of June 30) | Aging | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | 0 to 90 days | 77,655 | 121,242 | | 91 to 180 days | 13,472 | 21,368 | | 181 to 365 days | 31,405 | 4,800 | | 1 to 2 years | 3,288 | 7,953 | | Over 2 years | 4,460 | 402 | | **Total** | **130,280** | **155,765** | - The average credit period for purchases of goods is **90 days**[31](index=31&type=chunk) [Management Discussion and Analysis](index=16&type=section&id=Management%20Discussion%20and%20Analysis) [Business Review](index=16&type=section&id=Business%20Review) For the six months ended June 30, 2025, the Group's turnover decreased by 7.29% year-on-year, primarily due to intensified competition in power DC products and declining gross profit margin, leading to an increased loss attributable to owners of the Company - The Group's turnover was approximately **RMB 137.218 million**, a year-on-year decrease of **7.29%**[32](index=32&type=chunk) - Loss for the period attributable to owners of the Company was approximately **RMB 29.618 million**, an increase of approximately **RMB 328 thousand** compared to the loss in the same period last year[33](index=33&type=chunk) - The increased loss was primarily due to intensified competition in power DC products, leading to decreased turnover and gross profit margin[33](index=33&type=chunk) [Power DC Products](index=17&type=section&id=Power%20DC%20Products) Sales of power DC products decreased by 22.06% year-on-year to approximately RMB 46.858 million, mainly due to intensified market competition - Sales of power DC products decreased by **22.06%** year-on-year to **RMB 46.858 million**[35](index=35&type=chunk) [Electric Vehicle Charging Equipment](index=17&type=section&id=Electric%20Vehicle%20Charging%20Equipment) Sales of electric vehicle charging equipment increased by 4.13% year-on-year to approximately RMB 79.053 million, driven by growing investment demand for charging infrastructure in various regions - Sales of electric vehicle charging equipment increased by **4.13%** year-on-year to **RMB 79.053 million**[36](index=36&type=chunk) - The growth was primarily due to increased investment demand for charging infrastructure projects in various regions[36](index=36&type=chunk) [Electric Vehicle Charging Services](index=17&type=section&id=Electric%20Vehicle%20Charging%20Services) Sales of electric vehicle charging services decreased by 6.41% year-on-year to approximately RMB 11.130 million, mainly due to reduced charging volume at some public bus charging stations - Sales of electric vehicle charging services decreased by **6.41%** year-on-year to **RMB 11.130 million**[37](index=37&type=chunk) - The decrease in revenue was mainly due to reduced charging volume at some public bus charging stations[37](index=37&type=chunk) [Other Businesses](index=17&type=section&id=Other%20Businesses) Other business turnover (including EV sales and leasing) increased by 124.05% year-on-year to approximately RMB 177 thousand, though it is not a principal business of the Group - Other business turnover increased by **124.05%** year-on-year to **RMB 177 thousand**[38](index=38&type=chunk) - This business is not a principal business of the Group[38](index=38&type=chunk) [Key Operating Activities in the First Half of 2025](index=18&type=section&id=Key%20Operating%20Activities%20in%20the%20First%20Half%20of%202025) In the first half of 2025, the new energy vehicle industry saw high-quality development and significant growth in charging infrastructure, while the Group's main business revenue declined, leading to a loss despite strict cost control - In the first half of 2025, domestic sales of new energy vehicles reached **5.878 million units**, and the increase in charging infrastructure was **3.282 million units**, a year-on-year increase of **99.2%**[39](index=39&type=chunk) - The Group's power DC product turnover decreased by **22.06%** year-on-year, mainly due to weak industry demand and intensified competition, which the Group is addressing through direct sales and product iteration[40](index=40&type=chunk) - The Group's electric vehicle charging equipment revenue increased by **4.13%** year-on-year, with Southern Power Grid related projects progressing efficiently, and the launch of four major product series: Titan Core, Titan Heng, Titan Wing, and Titan Leap[41](index=41&type=chunk)[42](index=42&type=chunk) - Electric vehicle charging service revenue decreased by **6.41%** year-on-year, mainly due to the divestment of some self-operated charging stations, with the Group optimizing software and hardware services and expanding its franchise network[45](index=45&type=chunk) - The Group continues to increase R&D investment, obtaining **2 invention patents**, including a device for detecting ring network impedance and a power peak shaving method based on V2G technology and machine learning[45](index=45&type=chunk)[46](index=46&type=chunk) - The Group is building a comprehensive strategic marketing system, optimizing personnel structure, expanding sales channels and partners, and enhancing customer service quality[47](index=47&type=chunk) [Turnover](index=24&type=section&id=Turnover) For the six months ended June 30, 2025, the Group's turnover was RMB 137.218 million, a 7.29% decrease from the prior year, primarily due to intense competition in the power market Turnover Composition (For the six months ended June 30) | Product Category | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Power DC Products | 46,858 | 60,122 | | Electric Vehicle Charging Equipment | 79,053 | 75,914 | | Electric Vehicle Charging Services | 11,130 | 11,892 | | Other | 177 | 79 | | **Total** | **137,218** | **148,007** | - Total turnover decreased by **7.29%** year-on-year, mainly due to intense competition in the power market[48](index=48&type=chunk) [Cost of Sales](index=24&type=section&id=Cost%20of%20Sales) Cost of sales increased from RMB 100.731 million in the prior year to RMB 101.486 million, primarily due to a lower gross profit margin during the reporting period - Cost of sales increased to **RMB 101.486 million**, a year-on-year increase of **0.75%**[49](index=49&type=chunk) - The increase in cost of sales was mainly due to a lower gross profit margin[49](index=49&type=chunk) [Gross Profit and Gross Profit Margin](index=24&type=section&id=Gross%20Profit%20and%20Gross%20Profit%20Margin) Group gross profit decreased by RMB 11.544 million to RMB 35.732 million, with the overall gross profit margin declining from 31.94% to 26.04% - Gross profit decreased by **RMB 11.544 million** year-on-year to **RMB 35.732 million**[50](index=50&type=chunk) - The overall gross profit margin decreased from **31.94%** to **26.04%**[51](index=51&type=chunk) Segment Gross Profit Margin (For the six months ended June 30) | Segment | 2025 Gross Profit Margin | 2024 Gross Profit Margin | Change | | :--- | :--- | :--- | :--- | | Power DC Products | 16.48% | 28.89% | -12.41% | | Electric Vehicle Charging Equipment | 34.19% | 38.59% | -4.40% | | Electric Vehicle Charging Services | 7.63% | 4.85% | +2.78% | | Other | 75.10% | 44.37% | +30.73% | [Other Income](index=26&type=section&id=Other%20Income) The Group's other income, primarily comprising exchange gains and government subsidies, decreased by approximately 53.15% from RMB 4.164 million to RMB 1.951 million - Other income decreased by approximately **RMB 2.213 million** to **RMB 1.951 million**[53](index=53&type=chunk) - This primarily includes exchange gains and government subsidies[53](index=53&type=chunk) [Selling and Distribution Expenses](index=26&type=section&id=Selling%20and%20Distribution%20Expenses) Selling and distribution expenses decreased by 18.08% year-on-year to RMB 26.336 million, mainly due to reduced sales-related personnel costs, despite increases in some other operational expenses - Selling and distribution expenses decreased by approximately **RMB 5.813 million** or **18.08%** to **RMB 26.336 million**[54](index=54&type=chunk) - This was primarily due to a decrease of approximately **RMB 12.834 million** in sales-related salaries, travel, and entertainment expenses[54](index=54&type=chunk) [Administrative and Other Expenses](index=26&type=section&id=Administrative%20and%20Other%20Expenses) Administrative and other expenses decreased by 9.18% year-on-year to RMB 35.187 million, mainly due to reduced management personnel-related salaries, R&D, and depreciation expenses - Administrative expenses decreased by approximately **RMB 3.556 million** or **9.18%** to **RMB 35.187 million**[55](index=55&type=chunk) - This was primarily due to a decrease of approximately **RMB 3.472 million** in salaries, research and development, and depreciation expenses related to management personnel[55](index=55&type=chunk) [Share of Results of Associates](index=27&type=section&id=Share%20of%20Results%20of%20Associates) During the reporting period, the Group's share of results of associates was a loss, despite profits from Beijing Pangda Yilian and Qingdao Titan, due to losses from Guangdong Titan and Jiangsu Titan - Share of profit from Beijing Pangda Yilian was approximately **RMB 317 thousand**[56](index=56&type=chunk) - Share of profit from Qingdao Titan was approximately **RMB 2 thousand**[56](index=56&type=chunk) - Share of loss from Guangdong Titan was approximately **RMB 183 thousand**[56](index=56&type=chunk) - Share of loss from Jiangsu Titan was approximately **RMB 1.073 million**[57](index=57&type=chunk) [Finance Costs](index=28&type=section&id=Finance%20Costs) Group finance costs increased by 11.06% year-on-year to RMB 4.912 million, rising from 2.99% to 3.58% of turnover, primarily due to increased average borrowing interest expenses - Finance costs increased by approximately **11.06%** to **RMB 4.912 million**[58](index=58&type=chunk) - Finance costs as a percentage of turnover increased from **2.99%** to **3.58%**[58](index=58&type=chunk) - This was primarily due to an increase in average borrowing interest expenses[58](index=58&type=chunk) [Loss Attributable to Non-controlling Interests](index=28&type=section&id=Loss%20Attributable%20to%20Non-controlling%20Interests) Loss attributable to non-controlling interests was approximately RMB 191 thousand, a decrease in loss of approximately RMB 83 thousand compared to the prior year - Loss attributable to non-controlling interests was approximately **RMB 191 thousand**, a decrease in loss of approximately **RMB 83 thousand** compared to the same period last year[59](index=59&type=chunk) [Loss Attributable to Owners of the Company](index=28&type=section&id=Loss%20Attributable%20to%20Owners%20of%20the%20Company) Loss attributable to owners of the Company was approximately RMB 29.618 million, an increase in loss of approximately RMB 328 thousand compared to the prior year - Loss attributable to owners of the Company was approximately **RMB 29.618 million**, a year-on-year increase in loss of approximately **RMB 328 thousand**[60](index=60&type=chunk) [Loss Per Share](index=28&type=section&id=Loss%20Per%20Share) For the six months ended June 30, 2025, both basic and diluted loss per share were RMB 1.99 cents, an increase from RMB 1.96 cents in the prior year - Basic and diluted loss per share were both **RMB 1.99 cents**, compared to RMB 1.96 cents in the same period last year[61](index=61&type=chunk) [Employees and Remuneration](index=29&type=section&id=Employees%20and%20Remuneration) As of June 30, 2025, the Group's total number of employees decreased to 416, with total employee remuneration slightly lower year-on-year, while adhering to various employee benefit plans and regulations - As of June 30, 2025, the Group employed a total of **416 employees**, a decrease from **453** in the same period last year[62](index=62&type=chunk) - Total employee remuneration was approximately **RMB 29.534 million**, a decrease from RMB 30.505 million in the same period last year[62](index=62&type=chunk) - The Group participates in pension benefit schemes and medical insurance, complying with China's social insurance regulations[62](index=62&type=chunk) - The Company adopted a share option scheme on December 18, 2020, aimed at rewarding contributions and attracting and retaining talent[63](index=63&type=chunk) [Liquidity, Financial Resources and Capital Structure](index=30&type=section&id=Liquidity,%20Financial%20Resources%20and%20Capital%20Structure) The Group's capital structure remained unchanged, funding operations through internal resources and borrowings, with increased bank balances and cash but significantly reduced restricted bank balances, leading to decreased net current assets and liquidity ratio - The Group's capital structure remained unchanged, with capital comprising only ordinary shares[64](index=64&type=chunk) - Bank balances and cash were approximately **RMB 154.588 million**, an increase from RMB 133.861 million as of December 31, 2024[64](index=64&type=chunk) - Restricted bank balances were approximately **RMB 21.883 million**, a significant decrease from RMB 56.874 million as of December 31, 2024[64](index=64&type=chunk) - Net current assets were approximately **RMB 375.719 million**, a decrease from RMB 412.471 million as of December 31, 2024[64](index=64&type=chunk) [Use of Net Proceeds from Subscription](index=30&type=section&id=Use%20of%20Net%20Proceeds%20from%20Subscription) The Group completed a subscription on May 11, 2023, raising approximately HK$188.29 million, with most proceeds used for expanding EV charging equipment business and general working capital, while investment in EV charging services is ongoing - The subscription was completed on May 11, 2023, with net proceeds of approximately **HK$188.29 million**[66](index=66&type=chunk) Use of Net Proceeds from Subscription (As of June 30, 2025) | Purpose | Percentage of Total Amount | Net Proceeds (HK$ million) | Amount Utilized as of December 31, 2024 (HK$ million) | Amount Utilized as of June 30, 2025 (HK$ million) | Unutilized Amount as of June 30, 2025 (HK$ million) | Expected Time of Full Utilization | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Investment to expand electric vehicle charging services business | 50% | 94.14 | 42.44 | 53.00 | 41.14 | Before end of 2025 | | Investment to expand electric vehicle charging equipment business | 40% | 75.32 | 75.32 | 75.32 | – | – | | General working capital of the Group | 10% | 18.83 | 18.83 | 18.83 | – | – | | **Total** | **100%** | **188.29** | **136.59** | **147.15** | **41.14** | | [Bank and Other Borrowings](index=31&type=section&id=Bank%20and%20Other%20Borrowings) As of June 30, 2025, the Group's total bank and other borrowings increased to RMB 270.115 million, with a decrease in secured loans, a lower current ratio, and a higher gearing ratio - Total bank and other borrowings were **RMB 270.115 million**, an increase of **RMB 60.347 million** from RMB 209.768 million as of December 31, 2024[67](index=67&type=chunk) - Secured loans were **RMB 104.873 million**, a decrease from RMB 209.768 million as of December 31, 2024[67](index=67&type=chunk) - The current ratio was **1.99**, a decrease from **2.07** as of December 31, 2024[67](index=67&type=chunk) - The gearing ratio was **27.23%**, an increase from **20.55%** as of December 31, 2024[67](index=67&type=chunk) [Material Investments](index=32&type=section&id=Material%20Investments) For the six months ended June 30, 2025, the Group held no material investments other than those disclosed - During the reporting period, the Group held no material investments[68](index=68&type=chunk) [Material Acquisitions and Disposals of Subsidiaries, Associates and Joint Ventures](index=32&type=section&id=Material%20Acquisitions%20and%20Disposals%20of%20Subsidiaries,%20Associates%20and%20Joint%20Ventures) For the six months ended June 30, 2025, the Group had no material acquisitions or disposals of subsidiaries, associates, or joint ventures - During the reporting period, the Group had no material acquisitions or disposals of subsidiaries, associates, or joint ventures[69](index=69&type=chunk) [Trade and Bills Receivables](index=32&type=section&id=Trade%20and%20Bills%20Receivables) As of June 30, 2025, the Group's trade and bills receivables (net of allowance) decreased to RMB 321.705 million, with additional impairment allowance made, and a longer turnover period influenced by accounting policies and project delays - Trade and bills receivables (net of allowance) were approximately **RMB 321.705 million**, a decrease from RMB 380.413 million as of December 31, 2024[70](index=70&type=chunk) - The Group made an additional impairment loss allowance of **RMB 2.28 million** for trade and bills receivables[70](index=70&type=chunk) Aging Analysis of Trade Receivables (Net of Impairment Loss Allowance) | Aging | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Within 90 days | 59,568 | 215,345 | | 91 to 180 days | 56,722 | 38,094 | | 181 to 365 days | 149,353 | 88,850 | | 1 to 2 years | 53,288 | 26,216 | | 2 to 3 years | 4,774 | 11,908 | | **Total** | **321,705** | **380,413** | - The longer turnover days and higher overdue ratio for trade receivables are mainly due to timing differences in accounting policies, payments made after customer project completion, and project schedule delays[72](index=72&type=chunk) [Pledged Assets](index=33&type=section&id=Pledged%20Assets) As of June 30, 2025, leasehold land and buildings with a carrying value of approximately RMB 103.419 million were pledged to secure bank borrowings and other financing - Leasehold land and buildings with a carrying value of approximately **RMB 103.419 million** were pledged to secure bank borrowings and other financing[74](index=74&type=chunk) [Capital Commitments and Contingent Liabilities](index=33&type=section&id=Capital%20Commitments%20and%20Contingent%20Liabilities) As of June 30, 2025, the Group had contracted but unprovided capital expenditures of approximately RMB 5.25 million and no material contingent liabilities - The Group had contracted but unprovided capital expenditures of approximately **RMB 5.25 million**[75](index=75&type=chunk) - The Group had no material contingent liabilities[76](index=76&type=chunk) [Foreign Exchange](index=34&type=section&id=Foreign%20Exchange) The Group primarily operates in China with transactions denominated and settled in RMB, thus RMB fluctuations may impact share value, and no foreign exchange hedging arrangements were in place during the period - The Group primarily operates in China, with transactions denominated and settled in Renminbi[77](index=77&type=chunk) - Exchange gains of approximately **RMB 3 thousand** were recorded during the reporting period[77](index=77&type=chunk) - The Group had no hedging arrangements for foreign exchange[77](index=77&type=chunk) [Credit Risk](index=34&type=section&id=Credit%20Risk) The Group mitigates credit risk through continuous credit assessment and monitoring of customer project progress, maintaining close communication to expedite trade receivables collection - The Group strives to mitigate credit risk through continuous credit assessment of customers' financial conditions[78](index=78&type=chunk) - The Group monitors customer project progress and communicates with customers to expedite the collection of trade receivables[78](index=78&type=chunk) [Future Business Prospects and Plans](index=34&type=section&id=Future%20Business%20Prospects%20and%20Plans) [Industry Outlook and National Policies](index=34&type=section&id=Industry%20Outlook%20and%20National%20Policies) In 2025, the new energy vehicle industry is expected to continue its development with accelerating charging infrastructure upgrades, supported by national policies promoting electrification and new power systems - In 2025, new energy vehicles remain a key area for national efforts to boost domestic demand and industrial upgrading[79](index=79&type=chunk) - Five departments, including the Ministry of Industry and Information Technology, will launch the 2025 New Energy Vehicle to the Countryside campaign[80](index=80&type=chunk) - The National Development and Reform Commission and other agencies issued a notice aiming for over **100,000 high-power charging facilities** nationwide by the end of 2027[80](index=80&type=chunk) - Charging infrastructure serves as a crucial bridge between new energy vehicles and new power systems, undertaking functions of energy management and information interaction[80](index=80&type=chunk) [1. Optimize Production and Sales Systems, Actively Expand Market Presence](index=35&type=section&id=1.%20Optimize%20Production%20and%20Sales%20Systems,%20Actively%20Expand%20Market%20Presence) The Group plans to enhance manufacturing capabilities, accelerate digital and intelligent production transformation, optimize sales incentive mechanisms, and expand market penetration through diversified marketing and sales models - The Group will enhance the design and process levels of its manufacturing plants in Zhuhai, Guangdong, and Tangshan, Hebei, accelerating digital and intelligent production transformation[81](index=81&type=chunk) - Sales will optimize incentive mechanisms to enhance market penetration through digital marketing, scenario-based experiences, joint promotions, and stratified customer operations[82](index=82&type=chunk) - Implement a "direct sales + agent" dual-track model, with direct sales focusing on key industries and core regions, and agents covering sinking markets and standardized demand scenarios[82](index=82&type=chunk) - Consolidate leading positions in high-power fast charging and intelligent flexible charging, offering customized solutions for public charging stations, destination charging, highway energy replenishment, and heavy-duty truck charging and swapping scenarios[82](index=82&type=chunk) - Increase investment in the heavy-duty truck charging and swapping sector, strategically deploy intelligent heavy-duty truck charging and swapping stations, and plan to develop industrial and commercial energy storage projects based on BMS and EMS energy management technologies[83](index=83&type=chunk) [2. Strengthen Charging Station Operations Management, Assist Operators in Upgrading](index=37&type=section&id=2.%20Strengthen%20Charging%20Station%20Operations%20Management,%20Assist%20Operators%20in%20Upgrading) The Group will innovate a full ecological closed-loop model of "investment + construction + operation," leveraging its experience, high-performance equipment, and core technologies to provide upgrade services for existing charging stations and build integrated smart energy demonstration projects - The Group will innovate and build a full ecological closed-loop model of "investment + construction + operation," supported by its independently developed high-performance charging equipment and core technologies such as V2G and intelligent scheduling[84](index=84&type=chunk) - Focus on providing full lifecycle services including equipment updates, system upgrades, and energy efficiency management for existing charging stations in urban transportation hubs, commercial complexes, and other public places[84](index=84&type=chunk) - Create integrated "PV-storage-charging-swapping-inspection" smart energy demonstration projects, building a multi-energy complementary integrated energy service system[84](index=84&type=chunk) [3. Emphasize R&D, Enhance Core Product Competitiveness](index=38&type=section&id=3.%20Emphasize%20R%26D,%20Enhance%20Core%20Product%20Competitiveness) The Group will deeply implement an innovation-driven development strategy, continuously making breakthroughs in smart power, monitoring product systems, liquid-cooled and air-cooled supercharging, and promoting the upgrade of standard products and the implementation of new-generation industrial and commercial energy storage systems - The Group will continue to make breakthroughs in smart power, monitoring product systems, liquid-cooled supercharging, and air-cooled supercharging products[85](index=85&type=chunk) - Promote the upgrade of all standard products and the implementation of new-generation industrial and commercial energy storage systems[85](index=85&type=chunk) - Strengthen monitoring product platforms, software platforms, and system integration capabilities to achieve coordinated control of charging, energy storage, and photovoltaics[85](index=85&type=chunk) [4. Optimize Internal Management, Enhance Comprehensive Responsiveness](index=38&type=section&id=4.%20Optimize%20Internal%20Management,%20Enhance%20Comprehensive%20Responsiveness) The Group will optimize its supply chain, upgrade information systems, streamline personnel structure, cultivate versatile talents, and improve assessment mechanisms to build an efficient team - Optimize the supply chain system, upgrade information systems, improve efficiency, and reduce operating costs[85](index=85&type=chunk) - Promote streamlined and optimized personnel structure, cultivate versatile talents, and advance the rejuvenation of cadres[85](index=85&type=chunk) - Improve assessment mechanisms, deepen the integration of KPIs and OKRs, introduce AI office tools, and enhance employee quality and work efficiency[85](index=85&type=chunk) [Other Information](index=39&type=section&id=Other%20Information) [Interim Dividend](index=39&type=section&id=Interim%20Dividend) The Board did not declare an interim dividend for the six months ended June 30, 2025 - The Board did not declare an interim dividend[86](index=86&type=chunk) [Compliance with Corporate Governance Code](index=39&type=section&id=Compliance%20with%20Corporate%20Governance%20Code) The Company complied with all applicable code provisions of the Corporate Governance Code as set out in Appendix C1 to the Listing Rules during the reporting period - The Company has complied with all applicable code provisions of the Corporate Governance Code as set out in Appendix C1 to the Listing Rules[87](index=87&type=chunk) [Compliance with Standard Code for Securities Transactions by Directors](index=39&type=section&id=Compliance%20with%20Standard%20Code%20for%20Securities%20Transactions%20by%20Directors) All Directors confirmed compliance with the required standards of the Standard Code for Securities Transactions by Directors as set out in Appendix C3 to the Listing Rules during the reporting period - All Directors confirmed compliance with the required standards of the Standard Code for Securities Transactions by Directors as set out in Appendix C3 to the Listing Rules during the reporting period[88](index=88&type=chunk) [Purchase, Sale or Redemption of Listed Securities](index=39&type=section&id=Purchase,%20Sale%20or%20Redemption%20of%20Listed%20Securities) Neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities during the reporting period - Neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities during the reporting period[89](index=89&type=chunk) [Material Litigation and Arbitration Proceedings](index=39&type=section&id=Material%20Litigation%20and%20Arbitration%20Proceedings) The Group had no material litigation or arbitration proceedings during the reporting period - The Group had no material litigation or arbitration during the reporting period[90](index=90&type=chunk) [Review by Audit Committee](index=39&type=section&id=Review%20by%20Audit%20Committee) The Company's Audit Committee reviewed and discussed the Group's accounting principles, risk management, internal control systems, and financial reporting matters, including these interim results - The Audit Committee reviewed and discussed the Group's accounting principles, risk management, internal control systems, and financial reporting matters, including these interim results[91](index=91&type=chunk) [Events After Reporting Period](index=40&type=section&id=Events%20After%20Reporting%20Period) No material events occurred after the reporting period other than those disclosed in this announcement - No material events occurred after the reporting period other than those disclosed in this announcement[92](index=92&type=chunk) [Publication of Interim Results Announcement and Interim Report](index=40&type=section&id=Publication%20of%20Interim%20Results%20Announcement%20and%20Interim%20Report) This results announcement has been published on the Stock Exchange and Company websites, with the interim report to be provided to shareholders and published on the same websites in due course - This results announcement has been published on the Stock Exchange website and the Company's website[93](index=93&type=chunk) - The interim report will be provided to shareholders and published on the aforementioned websites in due course[93](index=93&type=chunk)

[Announcement Information](index=1&type=section&id=Announcement%20Information) [Interim Results Announcement](index=1&type=section&id=Interim%20Results%20Announcement) Baoye Group Co., Ltd. announced its unaudited interim results for the six months ended June 30, 2025, reviewed by the audit committee and approved by the board - The announcement presents unaudited interim results for the six months ended June **30**, **2025**, with comparative data for the same period in **2024**[2](index=2&type=chunk) - The interim results have been reviewed by the company's audit committee and approved by the board of directors[2](index=2&type=chunk) [Financial Statements](index=2&type=section&id=Financial%20Statements) [Interim Condensed Consolidated Income Statement](index=2&type=section&id=Interim%20Condensed%20Consolidated%20Income%20Statement) For the six months ended June 30, 2025, the company experienced significant declines in both turnover and profit, with turnover down 33% and profit attributable to owners down 62% year-on-year Interim Condensed Consolidated Income Statement Key Data | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Turnover | 8,502,567 | 12,770,676 | | Gross Profit | 508,699 | 965,277 | | Operating Profit | 253,587 | 624,434 | | Profit Before Income Tax | 245,328 | 640,867 | | Profit for the Period | 143,431 | 423,265 | | Profit Attributable to Owners of the Company | 140,981 | 373,845 | | Basic Earnings Per Share (RMB) | 0.27 | 0.72 | - Turnover decreased by **33%** year-on-year, operating profit by **59%**, and profit attributable to owners of the company by **62%**[4](index=4&type=chunk)[40](index=40&type=chunk) [Interim Condensed Consolidated Statement of Comprehensive Income](index=3&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) For the six months ended June 30, 2025, total comprehensive income significantly decreased to RMB 69,548 thousands, primarily due to fair value changes in financial assets Interim Condensed Consolidated Statement of Comprehensive Income Key Data | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Profit for the Period | 143,431 | 423,265 | | Currency Translation Differences | 273 | 58 | | Fair value changes of financial assets measured at fair value through other comprehensive income | (74,156) | (103,010) | | Other comprehensive income/(loss) for the period, net of tax | (73,883) | (102,952) | | Total comprehensive income for the period | 69,548 | 320,313 | | Total comprehensive income attributable to owners of the Company | 67,098 | 270,893 | | Total comprehensive income attributable to non-controlling interests | 2,450 | 49,420 | - Total comprehensive income for the period decreased by **78.3%** year-on-year, mainly due to fair value losses on financial assets measured at fair value through other comprehensive income[6](index=6&type=chunk) [Interim Condensed Consolidated Statement of Financial Position](index=4&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, total assets and liabilities slightly decreased, while total equity remained stable, maintaining a net cash ratio of 54% Interim Condensed Consolidated Statement of Financial Position Key Data | Indicator | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Total Assets | 44,346,227 | 45,202,576 | | Total Equity | 13,559,126 | 13,547,523 | | Total Liabilities | 30,787,101 | 31,655,053 | | Debt Ratio | 2.3 | 2.3 | | Net Cash Ratio | 54% | 54% | - Total assets decreased by approximately **1.9%** year-on-year, primarily due to reductions in properties under development and trade and other receivables within current assets[10](index=10&type=chunk) - The company maintained a net cash position with a net cash ratio of **54%** and approximately RMB **7 billion** in unutilized bank credit facilities[70](index=70&type=chunk)[71](index=71&type=chunk) [Notes to Financial Statements](index=6&type=section&id=Notes%20to%20Financial%20Statements) [General Information](index=6&type=section&id=General%20Information) Baoye Group Co., Ltd. is incorporated in China, with H-shares listed on the Hong Kong Stock Exchange, primarily engaged in construction engineering, building materials, and property development - The company's H-shares were listed on the Main Board of the Hong Kong Stock Exchange on June **30**, **2003**[13](index=13&type=chunk) - Its principal businesses include providing construction engineering services, selling and installing building materials, and developing and selling properties[14](index=14&type=chunk) [Basis of Preparation](index=6&type=section&id=Basis%20of%20Preparation) The interim financial report is prepared in accordance with HKAS 34 and should be read in conjunction with the 2024 consolidated financial statements and company announcements - The interim financial report is prepared in accordance with Hong Kong Accounting Standard **34** "Interim Financial Reporting"[15](index=15&type=chunk) - The interim financial information should be read in conjunction with the company's annual consolidated financial statements for the year ended December **31**, **2024**, and announcements published during this interim reporting period[15](index=15&type=chunk) [Significant Accounting Policies](index=6&type=section&id=Significant%20Accounting%20Policies) The accounting policies adopted for this interim financial information are consistent with the 2024 annual financial report, with no significant changes or retrospective adjustments from newly adopted standards - The accounting policies adopted for the preparation of this interim financial information are consistent with those applied in the **2024** annual financial report[16](index=16&type=chunk) - Certain new and amended standards effective during this reporting period did not require the Group to change its accounting policies or make retrospective adjustments upon adoption[17](index=17&type=chunk) - New and revised standards issued but not yet effective are not expected to have a significant impact on the Group in current or future reporting periods[18](index=18&type=chunk) [Segment Information](index=7&type=section&id=Segment%20Information) For the six months ended June 30, 2025, external turnover and operating profit for construction and property development businesses significantly declined, while building materials turnover slightly increased but operating loss widened Segment External Turnover (RMB thousands) | Business Segment | 2025 | 2024 | Change | | :--- | :--- | :--- | :--- | | Construction Business | 5,657,138 | 8,596,299 | -34% | | Property Development Business | 1,616,348 | 3,002,236 | -46% | | Building Materials Business | 1,048,357 | 1,001,350 | 5% | | Other Businesses | 180,724 | 170,791 | 6% | | **Total** | **8,502,567** | **12,770,676** | **-33%** | Segment Operating Profit/(Loss) (RMB thousands) | Business Segment | 2025 | 2024 | Change | | :--- | :--- | :--- | :--- | | Construction Business | 166,581 | 324,535 | -49% | | Property Development Business | 105,034 | 320,526 | -67% | | Building Materials Business | (34,731) | (22,768) | -53% | | Other Businesses | 16,703 | 2,141 | 680% | | **Total** | **253,587** | **624,434** | **-59%** | [Other Gains – Net](index=8&type=section&id=Other%20Gains%20%E2%80%93%20Net) For the six months ended June 30, 2025, other gains – net significantly increased to RMB 29,051 thousands, primarily driven by gains on disposal of land use rights and property, plant, and equipment Other Gains – Net (RMB thousands) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Gain on disposal of land use rights | 7,219 | – | | Government grants | 9,987 | 7,226 | | Gain on disposal of property, plant and equipment | 10,157 | 1,544 | | **Total** | **29,051** | **10,151** | - Other gains – net increased by **186.2%** year-on-year, primarily contributed by gains on disposal of land use rights and property, plant, and equipment[21](index=21&type=chunk) [Income Tax](index=8&type=section&id=Income%20Tax) For the six months ended June 30, 2025, income tax significantly decreased to RMB 101,897 thousands, mainly due to reduced revenue and profit from construction and property development businesses Income Tax Components (RMB thousands) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Current income tax – PRC corporate income tax | 57,524 | 174,606 | | Current income tax – Land appreciation tax | 44,026 | 73,540 | | Deferred tax | 347 | (30,544) | | **Total** | **101,897** | **217,602** | - Income tax decreased by **53.1%** year-on-year, primarily due to a significant decline in revenue and profit from construction and property development businesses amidst an industry downturn[24](index=24&type=chunk)[79](index=79&type=chunk) [Earnings Per Share](index=9&type=section&id=Earnings%20Per%20Share) For the six months ended June 30, 2025, basic earnings per share were RMB 0.27, a significant decrease of 62.5% year-on-year, consistent with the decline in profit attributable to owners Earnings Per Share Data | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | Profit Attributable to Owners of the Company (RMB thousands) | 140,981 | 373,845 | | Weighted Average Number of Ordinary Shares Issued (thousands of shares) | 520,663 | 520,756 | | Basic Earnings Per Share (RMB) | 0.27 | 0.72 | - Basic earnings per share decreased by **62.5%** year-on-year, largely consistent with the decline in profit attributable to owners of the company[26](index=26&type=chunk) - There were no potentially dilutive shares during the period, thus diluted earnings per share were consistent with basic earnings per share[26](index=26&type=chunk) [Investments Accounted for Using the Equity Method](index=9&type=section&id=Investments%20Accounted%20for%20Using%20the%20Equity%20Method) As of June 30, 2025, total investments accounted for using the equity method were RMB 498,845 thousands, a slight decrease from year-end 2024, mainly due to reduced operating performance contributions and dividend payments from joint ventures and associates Investments Accounted for Using the Equity Method (RMB thousands) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Investments in joint ventures | 474,849 | 481,671 | | Investments in associates | 23,996 | 33,056 | | **Total** | **498,845** | **514,727** | - Share of operating results from joint ventures for the period was RMB **2,499** thousands, a significant decrease from RMB **17,755** thousands in the prior year[28](index=28&type=chunk) - Share of operating results from associates for the period was a loss of RMB **7,060** thousands, an increase in loss from RMB **2,384** thousands in the prior year[29](index=29&type=chunk) [Trade and Other Receivables](index=10&type=section&id=Trade%20and%20Other%20Receivables) As of June 30, 2025, total trade and other receivables were RMB 8,764,595 thousands, a decrease from year-end 2024, mainly due to reductions in trade receivables and other receivables and prepayments Trade and Other Receivables (RMB thousands) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Non-current assets: Loans to joint ventures | 398,747 | 398,116 | | Current assets: Trade receivables | 5,836,228 | 6,148,448 | | Current assets: Other receivables and prepayments | 2,600,156 | 3,027,276 | | Current assets: Loans to joint ventures | 190,909 | 47,936 | | Current assets: Loans to associates | 137,302 | 137,302 | | **Total** | **8,764,595** | **9,360,962** | - Impairment provision for trade receivables increased to RMB **767,207** thousands, indicating pressure on credit risk management[33](index=33&type=chunk) - Prepayments within other receivables and prepayments (prepayments for land use rights for property development, prepayments to suppliers) both significantly decreased[35](index=35&type=chunk) [Trade and Other Payables](index=14&type=section&id=Trade%20and%20Other%20Payables) As of June 30, 2025, total trade and other payables were RMB 16,150,018 thousands, a slight decrease from year-end 2024, with reductions in trade payables and project manager deposits Trade and Other Payables (RMB thousands) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Trade payables | 10,617,897 | 11,173,249 | | Other payables | 5,532,121 | 5,599,800 | | **Total** | **16,150,018** | **16,773,049** | - Trade payables decreased by **4.97%** year-on-year, with a slight increase in trade payables within **3** months, but decreases in payables from **3** months to **1** year and over **1** year[37](index=37&type=chunk) - Within other payables, project manager deposits and amounts due to non-controlling interests decreased, while advance payments from property purchasers significantly increased[38](index=38&type=chunk) [Management Discussion and Analysis](index=15&type=section&id=Management%20Discussion%20and%20Analysis) [Performance Review](index=15&type=section&id=Performance%20Review) For the six months ended June 30, 2025, the Group's turnover, operating profit, and profit attributable to owners all significantly declined, primarily due to the industry downturn affecting construction and property development H1 2025 Performance Overview | Indicator | Amount (RMB thousands) | Y-o-Y Change | | :--- | :--- | :--- | | Turnover | 8,502,567 | -33% | | Operating Profit | 253,587 | -59% | | Profit Attributable to Owners of the Company | 140,981 | -62% | | Basic Earnings Per Share (RMB) | 0.27 | -63% | - The decline in performance was primarily attributed to the industry downturn, leading to significant reductions in revenue and profit from construction and property development businesses[40](index=40&type=chunk) [Revenue](index=15&type=section&id=Revenue) For the six months ended June 30, 2025, the Group's total turnover decreased by 33% year-on-year, with construction and property development down 34% and 46% respectively, while building materials and other businesses saw slight growth Segment Turnover and Changes | Business Segment | 2025 (RMB thousands) | 2024 (RMB thousands) | Change | | :--- | :--- | :--- | :--- | | Construction Business | 5,657,138 | 8,596,299 | -34% | | Property Development Business | 1,616,348 | 3,002,236 | -46% | | Building Materials Business | 1,048,357 | 1,001,350 | 5% | | Other | 180,724 | 170,791 | 6% | | **Total** | **8,502,567** | **12,770,676** | **-33%** | - The decline in turnover from construction and property development businesses was the main reason for the overall turnover decrease[41](index=41&type=chunk) [Operating Profit/(Loss)](index=15&type=section&id=Operating%20Profit%2F%28Loss%29) For the six months ended June 30, 2025, the Group's operating profit significantly decreased by 59% year-on-year, mainly due to a substantial decline in profitability of construction and property development, and an expanded loss in building materials Segment Operating Profit/(Loss) and Changes | Business Segment | 2025 (RMB thousands) | 2024 (RMB thousands) | Change | | :--- | :--- | :--- | :--- | | Construction Business | 166,581 | 324,535 | -49% | | Property Development Business | 105,034 | 320,526 | -67% | | Building Materials Business | (34,731) | (22,768) | -53% | | Other | 16,703 | 2,141 | 680% | | **Total** | **253,587** | **624,434** | **-59%** | - Property development business operating profit decreased by **67%**, being the largest contributor to the overall decline in operating profit[43](index=43&type=chunk) - Building materials business operating loss increased by **53%** year-on-year, reflecting intensified industry competition[43](index=43&type=chunk)[61](index=61&type=chunk) [Construction Business](index=16&type=section&id=Construction%20Business) For the six months ended June 30, 2025, construction business turnover and operating profit decreased by 34% and 49% respectively, due to falling real estate investment, market contraction, and increased competition; new contract value declined by 36% - Construction business turnover was approximately RMB **5,657,138** thousands, a year-on-year decrease of **34%**[44](index=44&type=chunk) - Operating profit was approximately RMB **166,581** thousands, a significant year-on-year decrease of **49%**[44](index=44&type=chunk) - New construction contract value was approximately RMB **5.24 billion**, a year-on-year decrease of **36%**, mainly due to sharp market contraction and the company's cautious project risk assessment[46](index=46&type=chunk) [Property Development Business](index=17&type=section&id=Property%20Development%20Business) For the six months ended June 30, 2025, property development business turnover and operating profit significantly decreased by 46% and 67% respectively, primarily due to fewer property projects recognized for revenue and lower profit margins; contract sales amounted to approximately RMB 1.78 billion - Property development business turnover was approximately RMB **1,616,348** thousands, a significant year-on-year decrease of **46%**[47](index=47&type=chunk) - Operating profit was approximately RMB **105,034** thousands, a significant year-on-year decrease of **67%**[47](index=47&type=chunk) - Contract sales for the period amounted to approximately RMB **1.78 billion**, with a sales area of approximately **195,859** square meters[48](index=48&type=chunk) [Property Sales](index=17&type=section&id=Property%20Sales) Property sales revenue during the period primarily came from Baoye Biao Jia Yuan in Lishui, Baoye Siji Yuan in Shaoxing, and Baoye Binhe Lv Yuan in Bozhou, with Baoye Biao Jia Yuan being the largest contributor Major Property Sales Projects | Project Name | Location | Average Selling Price (RMB/sqm) | Sales Area (square meters) | Sales Amount (RMB thousands) | | :--- | :--- | :--- | :--- | :--- | | Baoye Biao Jia Yuan | Lishui | 8,297 | 52,379 | 434,600 | | Baoye Siji Yuan | Shaoxing | 16,151 | 22,018 | 355,625 | | Baoye Binhe Lv Yuan | Bozhou | 4,755 | 29,402 | 139,818 | | Baoye Yunxi Li | Shaoxing | 19,322 | 5,132 | 99,166 | | Baoye Jiangnan Fu | Fuyang | 6,569 | 12,148 | 79,798 | [Properties Under Development](index=18&type=section&id=Properties%20Under%20Development) As of June 30, 2025, the Group had multiple properties under development in various cities, with some projects achieving good sales and others in planning or construction - Shaoxing Daban Green Carbon Park project commenced sales in April **2025**, with good sales performance, expected delivery in **2027**[50](index=50&type=chunk) - Wuhan Baoye Puyuan project completed completion filing in March **2025**, with good sales performance, expected delivery to commence in September **2025**[53](index=53&type=chunk) - Yichang Baoye Qinyuan project Phase I sold out and was the top seller in Yichang City in **2024**, with Phase II pre-sales commencing in January **2025**, also ranking as the top seller in Yichang City in Q**2** **2025**[54](index=54&type=chunk) - Jieshou Guangwu Yuxiu Garden project will be fully repurchased by Jieshou Municipal Government platform company upon completion, with expected delivery in **2026**[59](index=59&type=chunk) [New Land Reserves](index=21&type=section&id=New%20Land%20Reserves) The Group did not acquire new land reserves during the period and will adopt a cautious yet proactive approach, focusing on economically strong central cities while assessing local factors - The Group did not acquire any new land reserves during the period[60](index=60&type=chunk) - Future land acquisition strategy will adhere to prudent operation and innovative business models, cautiously evaluating comprehensive regional factors[60](index=60&type=chunk) - Focus will be primarily on central cities with extensive business coverage and favorable economic conditions, such as Shanghai, Zhejiang, and Hubei[60](index=60&type=chunk) [Building Materials Business](index=22&type=section&id=Building%20Materials%20Business) For the six months ended June 30, 2025, building materials business turnover increased by 5% year-on-year, but operating loss significantly widened by 53%, mainly due to intensified industry competition; curtain wall business grew significantly, while ready-

Financial Performance - The group's revenue for the six months ended June 30, 2025, was HKD 510.1 million, an increase of 17.3% compared to HKD 435.0 million for the same period in 2024[6]. - Gross profit for the first half of 2025 was HKD 129.2 million, up 19.8% from HKD 107.8 million in the first half of 2024[6]. - The gross profit margin increased by 0.5 percentage points to 25.3% in the first half of 2025 from 24.8% in the first half of 2024[6]. - The group reported a net loss of HKD 7.7 million for the first half of 2025, compared to a net profit of HKD 21.1 million in the first half of 2024[6]. - EBITDA for the first half of 2025 was HKD 15.9 million, down from HKD 42.8 million in the first half of 2024[6]. - Adjusted net profit for the first half of 2025 was HKD 10.6 million, compared to HKD 31.1 million in the first half of 2024[6]. - The group reported a net loss of HKD 7.67 million for the period, compared to a profit of HKD 21.12 million in the same period of 2024[26]. - Adjusted profit before tax for the group was a loss of HKD 7.38 million, compared to a profit of HKD 24.22 million in the same period last year[26]. - The company reported a loss attributable to equity holders of HKD 8.0 million, compared to a profit of HKD 21.0 million in the same period last year[66]. - EBITDA for the first half of 2025 was a loss of HKD 7.7 million, compared to a profit of HKD 21.1 million in the first half of 2024[68]. Revenue Breakdown - Total revenue for the six months ended June 30, 2025, reached HKD 540.79 million, a 21.5% increase from HKD 444.92 million in the same period of 2024[26]. - Distribution segment revenue was HKD 354.50 million, up from HKD 343.80 million year-over-year, while e-commerce segment revenue was HKD 104.84 million, with no revenue reported for the same period in 2024[26]. - Retail store segment revenue decreased to HKD 81.45 million from HKD 101.12 million in the previous year, reflecting a decline of 19.5%[26]. - Sales in Hong Kong decreased to HKD 336,636,000 from HKD 358,406,000, a decline of 6.3%[29]. - Revenue from Hong Kong decreased by 6.1% to HKD 336.6 million, while revenue from Macau fell by 5.1% to HKD 42.9 million due to weakened consumer demand[63]. - Revenue from Southeast Asia significantly increased by 37.6% to HKD 43.2 million, driven by ongoing development and expansion of sales channels[63]. Assets and Liabilities - Total assets as of June 30, 2025, were HKD 1,236.7 million, compared to HKD 1,005.6 million as of December 31, 2024[9]. - Total liabilities increased to HKD 711.7 million as of June 30, 2025, from HKD 516.6 million as of December 31, 2024[10]. - Total equity as of June 30, 2025, was HKD 525.0 million, up from HKD 489.0 million as of December 31, 2024[10]. - Total assets as of June 30, 2025, amounted to HKD 1,236.71 million, an increase from HKD 1,005.56 million as of December 31, 2024[27]. - Total liabilities increased to HKD 711.71 million from HKD 516.61 million at the end of 2024, indicating a rise in financial obligations[27]. - The group's debt-to-equity ratio increased to 44.8% as of June 30, 2025, compared to 38.3% as of December 31, 2024, due to a higher percentage increase in net debt than total equity[71]. - Total borrowings included secured bank loans of approximately HKD 279.3 million and unsecured bank loans of approximately HKD 80.8 million as of June 30, 2025, compared to HKD 231.3 million and HKD 39.0 million respectively as of December 31, 2024[72]. Expenses and Costs - The cost of goods sold increased to HKD 379,579,000, up 16.4% from HKD 326,091,000 in the previous year[30]. - Employee benefits expenses rose significantly to HKD 43,295,000, an increase of 37.7% compared to HKD 31,456,000 in 2024[30]. - Selling and distribution expenses increased by 61.3% to HKD 71.7 million, primarily due to higher advertising and promotional costs[64]. - The total employee cost for the review period was approximately HKD 43.3 million, up from HKD 31.5 million in the previous year[85]. Dividends and Shareholder Returns - The board has resolved not to declare any interim dividend for the first half of 2025, consistent with the first half of 2024[6]. - The company did not declare any dividends for the six months ended June 30, 2025, consistent with the previous year[36]. - The company did not recommend any interim dividend for the review period, consistent with the previous year[86]. Strategic Initiatives and Market Position - The company plans to continue monitoring performance across its operating segments to make informed resource allocation decisions[22]. - The company aims to expand its presence in the Southeast Asian market, capitalizing on the region's growth potential[42]. - The company has diversified its operations across distribution, retail, and e-commerce segments, enhancing its market position in Hong Kong, Macau, mainland China, and Southeast Asia[43]. - The group continues to provide comprehensive marketing and management services for its agency brands, enhancing its product portfolio and business diversification to improve market share and gross margin[49]. - The group has registered over 60 trademarks for its own brand products, with popular items including "BG Pro Immunoglobulin Capsules" and "Kinmen Qiangxiao Essential Oil Patches"[50]. - The group is actively upgrading its own brand products to meet market demand, including enhanced versions of "BG Pro Brain Active" and "Kinmen Qiangxiao Pain Relief Gel"[50]. - The group has established procurement centers in various countries, including Japan, South Korea, and Singapore, to diversify its product offerings and enhance international presence[53]. - The Southeast Asian market has shown strong performance, with distribution sales particularly robust in Singapore and Malaysia, contributing significantly to revenue growth[53]. - The group has secured exclusive distribution rights for several brands in Malaysia, including Tianjin Tongrentang, which has popular products like "Vegetarian White Phoenix Pills" and "Compound Phlegm-Relieving Syrup" contributing to local sales[53]. - The group has formed partnerships with major personal care chains in Malaysia and Singapore, expanding its retail network and becoming a key player in the traditional Chinese medicine and health product market[55]. - The strategic acquisition of CWA is expected to enhance the company's presence in Southeast Asia and improve operational compliance across the region[60]. - The company plans to adjust its product mix and market strategies in response to the traditional tourism peak season in the second half of the year[59]. - The company aims to diversify its business and reduce risks by implementing different development strategies tailored to various regions and local cultures[58]. Share Issuance and Capital Management - The company entered into a subscription agreement with Jacobson Group Treasury Limited to issue 94 million shares at HKD 0.5 per share, raising approximately HKD 47 million[44]. - The subscription price represented a 25% premium over the closing price of HKD 0.4 on the agreement date[44]. - The net proceeds from the subscription are intended for investment in core business growth, supply chain improvements, and general working capital[44]. - The net proceeds from the subscription agreement amount to approximately HKD 46.7 million, with allocations for inventory purchases and marketing activities[56]. - As of June 30, 2025, the group has utilized HKD 20.7 million of the net proceeds, with HKD 26 million remaining for future operational needs[57]. Compliance and Governance - The audit committee reviewed the group's accounting principles and practices, ensuring that the unaudited condensed consolidated financial statements fairly presented the group's financial position and performance during the review period[92]. - The mid-term performance announcement and report for 2025 were published on the Hong Kong Stock Exchange and the company's website, containing all information required by listing rules[93].

[Company Information](index=4&type=section&id=Company%20Information) [Board of Directors and Key Personnel](index=4&type=section&id=Board%20of%20Directors%20and%20Key%20Personnel) The company's board comprises six executive directors (including Chairman and CEO Mr. Dang Fei) and three independent non-executive directors, with details on company secretary, compliance officer, authorized representatives, and committee members - The Board of Directors consists of **six executive directors** (including Chairman and CEO Mr. Dang Fei) and **three independent non-executive directors**[9](index=9&type=chunk) - The company has an Audit Committee, Remuneration Committee, and Nomination Committee, with their respective chairmen and members listed[9](index=9&type=chunk) [Registered and Operating Locations](index=4&type=section&id=Registered%20and%20Operating%20Locations) The company is registered in the Cayman Islands, with primary operations in Guangyuan City, Sichuan Province, China, and a principal place of business in Hong Kong, alongside details of banks and share registrar - The company's registered address is in the Cayman Islands, with its principal place of business in China located in Guangyuan City, Sichuan Province, and in Hong Kong in Tsim Sha Tsui, Kowloon[9](index=9&type=chunk)[10](index=10&type=chunk) - Principal bankers include Bank of Communications, Bank of China, and branches of Chengdu Rural Commercial Bank in Pidu District[10](index=10&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) [Overview of Profit or Loss and Comprehensive Income](index=6&type=section&id=Overview%20of%20Profit%20or%20Loss%20and%20Comprehensive%20Income) For the six months ended June 30, 2025, the Group experienced significant revenue growth but a decline in gross profit and an expanded loss for the period, primarily due to increased cost of sales and reduced other income, with basic and diluted loss per share remaining unchanged Key Profit or Loss and Comprehensive Income Data | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Revenue | 168,245 | 89,327 | | Cost of sales | (167,583) | (88,241) | | Gross profit | 662 | 1,086 | | Other income | 848 | 4,276 | | Loss before income tax expense | (15,850) | (13,892) | | Loss for the period | (16,476) | (11,220) | | Loss for the period attributable to owners of the Company | (15,023) | (11,257) | | Basic and diluted loss per share (RMB cents) | (0.12) | (0.12) | - Revenue increased by **88.3% year-on-year**, from **RMB 89,327 thousands** in 2024 to **RMB 168,245 thousands** in 2025[11](index=11&type=chunk) - Loss for the period expanded from **RMB 11,220 thousands** in 2024 to **RMB 16,476 thousands** in 2025[11](index=11&type=chunk) [Unaudited Condensed Consolidated Statement of Financial Position](index=8&type=section&id=Unaudited%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) [Financial Position](index=8&type=section&id=Financial%20Position) As of June 30, 2025, the Group's total assets and net assets both decreased, with an increase in net current liabilities leading to negative equity attributable to owners of the Company, reflecting a deteriorating financial position Key Financial Position Data | Indicator | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Total assets | 228,223 | 272,799 | | Net current liabilities | (79,509) | (63,765) | | Net assets | 693 | 12,468 | | Equity attributable to owners of the Company | (10,451) | (129) | | Total equity | 693 | 12,468 | - Total assets decreased from **RMB 272,799 thousands** as of December 31, 2024, to **RMB 228,223 thousands** as of June 30, 2025[13](index=13&type=chunk) - Equity attributable to owners of the Company further deteriorated from **negative RMB 129 thousands** as of December 31, 2024, to **negative RMB 10,451 thousands** as of June 30, 2025[14](index=14&type=chunk) [Unaudited Condensed Consolidated Statement of Changes in Equity](index=10&type=section&id=Unaudited%20Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) [Analysis of Changes in Equity](index=10&type=section&id=Analysis%20of%20Changes%20in%20Equity) For the six months ended June 30, 2025, equity attributable to owners of the Company significantly decreased due to the loss for the period, with accumulated losses continuing to rise despite new share issuance, leading to a substantial decline in total equity Key Equity Movement Data | Indicator | January 1, 2025 (RMB thousands) | June 30, 2025 (RMB thousands) | | :--- | :--- | :--- | | Share capital | 9,913 | 10,345 | | Accumulated losses | (129,399) | (144,422) | | Subtotal of equity attributable to owners of the Company | (129) | (10,451) | | Non-controlling interests | 12,597 | 11,144 | | Total equity | 12,468 | 693 | - Loss for the period resulted in an increase of **RMB 15,023 thousands** in accumulated losses attributable to owners of the Company[15](index=15&type=chunk) - Share issuance led to an increase of **RMB 4,730 thousands** in share capital and share premium[15](index=15&type=chunk) [Unaudited Condensed Consolidated Statement of Cash Flows](index=11&type=section&id=Unaudited%20Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) [Cash Flow Analysis](index=11&type=section&id=Cash%20Flow%20Analysis) For the six months ended June 30, 2025, the Group experienced a decrease in net cash from operating activities, reduced cash outflow from investing activities, and a decrease in net cash from financing activities, yet achieved a net increase in cash and cash equivalents at period-end Key Cash Flow Data | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Net cash from operating activities | 1,623 | 9,178 | | Net cash used in investing activities | (3,049) | (18,800) | | Net cash from financing activities | 2,026 | 8,556 | | Net increase/(decrease) in cash and cash equivalents | 600 | (1,066) | | Cash and cash equivalents at end of period | 2,376 | 343 | - Net cash from operating activities decreased from **RMB 9,178 thousands** in 2024 to **RMB 1,623 thousands** in 2025[17](index=17&type=chunk) - Cash and cash equivalents at period-end increased from **RMB 343 thousands** in 2024 to **RMB 2,376 thousands** in 2025[17](index=17&type=chunk) [Notes to the Unaudited Condensed Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20the%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) [General Information and Basis of Preparation](index=12&type=section&id=General%20Information%20and%20Basis%20of%20Preparation) The Company is an investment holding company registered in the Cayman Islands, with subsidiaries primarily engaged in the production and sale of wires, cables, aluminum products, and polymeric materials in China; interim financial statements are prepared in RMB according to HKAS 34 and GEM Listing Rules - The Company is primarily engaged in the production and sale of wires and cables, sale of aluminum products, and sale of polymeric materials in China[18](index=18&type=chunk) - The interim financial statements are prepared in accordance with Hong Kong Accounting Standard 34 issued by the Hong Kong Institute of Certified Public Accountants and the applicable disclosure requirements of the GEM Listing Rules of the Stock Exchange[20](index=20&type=chunk) - The financial statements are presented in RMB and prepared on a historical cost basis[21](index=21&type=chunk)[22](index=22&type=chunk) [Accounting Policies and Estimates](index=13&type=section&id=Accounting%20Policies%20and%20Estimates) Revisions to Hong Kong Financial Reporting Standards issued by the HKICPA were first applied in this period but had no significant impact on the financial statements, which involve management's judgments, estimates, and assumptions - Revisions to Hong Kong Accounting Standard 21 and Hong Kong Financial Reporting Standard 1 were first applied in this period but had **no significant impact** on the financial statements[24](index=24&type=chunk) - The preparation of financial statements requires the application of certain judgments, estimates, and assumptions, and actual results may differ from these estimates[23](index=23&type=chunk)[25](index=25&type=chunk) [Financial Risk Management and Segment Reporting](index=14&type=section&id=Financial%20Risk%20Management%20and%20Segment%20Reporting) The Group's operations involve credit, market (foreign exchange and interest rate), and liquidity risks, without the use of derivative instruments for hedging; it has only one reportable operating segment: the sale of wires, cables, aluminum products, and polymeric materials, with all revenue and non-current assets originating from China - The Group's operations involve credit risk, market risk (foreign exchange risk and interest rate risk), and liquidity risk, without the use of derivative instruments for hedging[26](index=26&type=chunk) - The Group has only **one reportable operating segment**, which is the sale of wires, cables, aluminum products, and polymeric materials[28](index=28&type=chunk) - All of the Group's revenue is derived from customers in China, and all non-current assets are located in China[29](index=29&type=chunk) Revenue from Major Customers | Customer | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Customer A | 108,930 | 70,273 | [Revenue and Other Income](index=15&type=section&id=Revenue%20and%20Other%20Income) Revenue for the period primarily stemmed from the production and sale of wires, cables, and aluminum products, with wire and cable contributing the most; other income significantly decreased, mainly due to lower interest income and government grants Revenue by Product Type | Product Type | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Production and sale of wires and cables | 167,023 | 89,327 | | Production and sale of aluminum products | 1,222 | – | | Total revenue | 168,245 | 89,327 | Other Income Details | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Interest income | 1 | 1,208 | | Government grants and subsidies | 470 | 1,943 | | Rental income | 215 | 513 | | Others | 162 | 612 | | Total | 848 | 4,276 | - Other income significantly decreased from **RMB 4,276 thousands** in 2024 to **RMB 848 thousands** in 2025, primarily due to reduced interest income and government subsidies[36](index=36&type=chunk) [Finance Costs and Loss Before Income Tax Expense](index=16&type=section&id=Finance%20Costs%20and%20Loss%20Before%20Income%20Tax%20Expense) Finance costs remained relatively stable, mainly comprising interest expenses on bank and other borrowings, while loss before income tax expense increased, primarily influenced by inventory costs, depreciation, amortization, and expected credit loss provisions Finance Costs | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Interest expense on bank and other borrowings | 2,650 | 2,844 | | Interest expense on lease liabilities | 146 | – | | Total finance costs | 2,796 | 2,844 | Components of Loss Before Income Tax Expense | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Cost of inventories recognized as expense | 167,583 | 88,241 | | Depreciation of property, plant and equipment | 3,464 | 2,749 | | Provision for expected credit losses on trade receivables | 2,536 | 2 | | Employee costs | 4,691 | 4,391 | - Loss before income tax expense increased from **RMB 13,892 thousands** in 2024 to **RMB 15,850 thousands** in 2025[11](index=11&type=chunk) [Income Tax Expense and Loss Per Share](index=18&type=section&id=Income%20Tax%20Expense%20and%20Loss%20Per%20Share) The period recorded an income tax expense, compared to an income tax credit in the prior year, mainly due to reduced recognition of deferred tax assets; loss per share remained consistent with the prior period, as no potentially dilutive ordinary shares existed Income Tax Expense (Credit) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Deferred tax (credit) | 626 | (2,672) | | Income tax (credit) | 626 | (2,672) | - Guangyuan Tongchuang New Material Co, Ltd is eligible for a **10% income tax rate** under the Western Development Tax Incentive Policy[42](index=42&type=chunk) - Basic and diluted loss per share attributable to owners of the Company for the period was **RMB 0.12**[12](index=12&type=chunk)[44](index=44&type=chunk) [Property, Plant and Equipment](index=19&type=section&id=Property%2C%20Plant%20and%20Equipment) The cost of acquiring machinery and office equipment significantly decreased during the period, reflecting a slowdown in capital expenditure - For the six months ended June 30, 2025, the Group's cost of acquiring machinery and office equipment was approximately **RMB 3,049 thousands**, a significant decrease from **RMB 18,800 thousands** in the prior year[45](index=45&type=chunk) [Trade and Other Receivables](index=20&type=section&id=Trade%20and%20Other%20Receivables) Total trade receivables decreased, but the provision for expected credit losses slightly increased, with the aging analysis of receivables showing a higher proportion of amounts over 365 days Trade and Other Receivables | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Trade receivables | 139,930 | 169,834 | | Less: Provision for expected credit losses on trade receivables | (56,286) | (55,313) | | Net trade receivables | 83,644 | 114,521 | | Prepayments, deposits and other receivables | 8,693 | 34,303 | | Total | 92,778 | 149,470 | Aging Analysis of Trade Receivables | Aging | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | 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 | - Provision for expected credit losses on trade receivables increased from **RMB 55,313 thousands** as of December 31, 2024, to **RMB 56,286 thousands** as of June 30, 2025[46](index=46&type=chunk) [Trade and Other Payables](index=22&type=section&id=Trade%20and%20Other%20Payables) Total trade payables decreased, but interest payable and other payables increased, with supplier credit terms generally ranging from 0 to 120 days Trade and Other Payables | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Current trade payables | 83,018 | 97,285 | | Accruals and other payables | 60,363 | 68,939 | | Non-current trade payables | — | 2,077 | | Non-current other payables | 2,677 | 1,550 | Aging Analysis of Trade Payables | Aging | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | 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 | - Interest payable increased from **RMB 8,215 thousands** as of December 31, 2024, to **RMB 9,450 thousands** as of June 30, 2025[48](index=48&type=chunk) [Borrowings](index=23&type=section&id=Borrowings) The Group's total borrowings slightly decreased, but most are current borrowings repayable within one year, with approximately RMB 6,900 thousands in defaulted borrowings, which are secured by various assets and individuals Borrowings Details | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Current borrowings | 53,150 | 49,708 | | Non-current borrowings | 16,813 | 22,820 | | Total borrowings | 69,963 | 72,528 | - As of June 30, 2025, the Group was in default on borrowings totaling approximately **RMB 6,900 thousands** in principal amount[51](index=51&type=chunk) - Borrowings are secured by buildings, land use rights, plant and machinery, properties of the Company's directors and their close family members, properties of independent third parties, and inventory of a shareholder[51](index=51&type=chunk) [Share Capital](index=25&type=section&id=Share%20Capital) The Company's share capital increased due to a rights issue, with 45,775,245 ordinary shares issued, raising net proceeds of approximately HKD 4.17 million Share Capital Movement | Item | Number of Shares | Amount (RMB thousands) | | :--- | :--- | :--- | | As at December 31, 2024 | 110,400,000 | 9,913 | | Shares issued after rights issue | 45,775,245 | 432 | | As at June 30, 2025 | 156,175,245 | 10,345 | - On May 6, 2025, the Company issued **45,775,245 ordinary shares** under a rights issue arrangement, raising net proceeds of approximately **HKD 4.17 million**[53](index=53&type=chunk)[84](index=84&type=chunk) [Related Party Transactions](index=26&type=section&id=Related%20Party%20Transactions) Remuneration for the Group's key management personnel decreased, and properties of key management personnel and their close family members were pledged as collateral for bank and other borrowings Key Management Personnel Remuneration | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Salaries, allowances and other benefits | 268 | 398 | | Contributions to defined contribution retirement plans | 39 | 64 | | Total | 307 | 462 | - The Group's key management personnel and their close family members pledged their properties as collateral for bank and other borrowings[57](index=57&type=chunk) [Management Discussion and Analysis](index=27&type=section&id=Management%20Discussion%20and%20Analysis) [Business Review and Outlook](index=27&type=section&id=Business%20Review%20and%20Outlook) The Group, as a wire and cable manufacturer and supplier, operates in wire and cable, aluminum products, and polymeric materials; despite macroeconomic uncertainties and increased competition, future growth opportunities lie in China's infrastructure, renewable energy, 5G development, and domestic market expansion, with the Group focusing on product quality, innovation, and prudent financial management - The Group is primarily engaged in the manufacturing and sale of wires and cables, as well as aluminum cast-rolled coil processing, aluminum foil manufacturing, and polymeric material sales[60](index=60&type=chunk) - Future growth drivers include the Chinese government's infrastructure investments in power grid upgrades, urban transportation networks, and new industrial parks[62](index=62&type=chunk) - The development of renewable energy (solar and wind power) and 5G network expansion in China will stimulate demand for specialized and advanced cable solutions[63](index=63&type=chunk)[64](index=64&type=chunk) - The Group will strengthen its local customer network, diversify its customer base, and enhance operational efficiency and cost management through optimizing production processes, outsourcing, exploring new businesses, and digitalization[65](index=65&type=chunk)[66](index=66&type=chunk) [Financial Review](index=29&type=section&id=Financial%20Review) Revenue significantly increased during the period, but gross profit and gross margin declined due to rising raw material costs and price competition; other income substantially decreased, leading to an expanded loss for the period, while selling and distribution expenses decreased, administrative expenses slightly declined, and finance costs remained stable Revenue, Gross Profit and Gross Margin by Product Type | Product Type | 2025 Revenue (RMB thousands) | 2024 Revenue (RMB thousands) | 2025 Gross Profit (RMB thousands) | 2024 Gross Profit (RMB thousands) | 2025 Gross Margin | 2024 Gross Margin | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Classic finished wire and cable - Copper | 58 | – | 17 | – | 29.3% | – | | Classic finished wire and cable - Aluminum | 146,305 | 88,804 | 577 | 1,080 | 0.4% | 1.2% | | Semi-finished wire - Aluminum rod | 19,856 | 523 | 58 | 6 | 0.3% | 1.1% | | Polymeric materials and others | 2,026 | – | 10 | – | 0.5% | – | | Total | 168,245 | 89,327 | 662 | 1,086 | 0.4% | 1.2% | - Revenue increased by approximately **88.3% year-on-year** to **RMB 168.2 million**, primarily due to increased market demand[67](index=67&type=chunk) - Gross profit decreased by approximately **39.0%** to **RMB 0.7 million**, with gross margin falling from **1.2% to 0.4%**, mainly due to a significant increase in raw material and subcontracting costs and price competition[69](index=69&type=chunk) - Other income and gains significantly decreased from **RMB 4.3 million** to **RMB 0.8 million**, primarily due to reduced interest income from loans and government subsidies[70](index=70&type=chunk) - Loss attributable to owners of the Company increased by approximately **33.4%** to **RMB 15.0 million**, mainly due to a significant decrease in other income and gains[75](index=75&type=chunk) [Liquidity, Financial Resources and Capital Structure](index=31&type=section&id=Liquidity%2C%20Financial%20Resources%20and%20Capital%20Structure) The Group primarily funds its operations through cash generated from operations, borrowings, and shareholder advances; cash and cash equivalents slightly increased, but total borrowings remain high, with most being short-term, and total equity significantly decreased, worsening the debt-to-equity ratio, prompting management to continue prudent financial management strategies - As of June 30, 2025, cash and cash equivalents were approximately **RMB 2.4 million**, a slight increase from **RMB 1.8 million** as of December 31, 2024[76](index=76&type=chunk) - Total borrowings were approximately **RMB 70.0 million**, of which **RMB 53.2 million** are repayable within one year or on demand, indicating reliance on short-term financing[76](index=76&type=chunk) - Total equity significantly decreased from **RMB 12.5 million** as of December 31, 2024, to **RMB 0.7 million** as of June 30, 2025, leading to a deterioration in the debt-to-equity ratio[76](index=76&type=chunk) - Management believes the capital structure remains challenging and will strengthen cash flow control and explore financing options[77](index=77&type=chunk) [Pledge of Assets and Capital Commitments](index=32&type=section&id=Pledge%20of%20Assets%20and%20Capital%20Commitments) The Group has pledged buildings, land use rights, and plant and machinery to secure bank and other borrowings, with capital commitments primarily for capital injections into subsidiaries Net Book Value of Pledged Assets | Pledged Assets | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Buildings | 39,862 | 40,373 | | Land use rights | 5,805 | 5,901 | | Plant and machinery | 6,342 | 2,523 | | Total | 52,009 | 48,797 | - As of June 30, 2025, the Group had capital commitments for capital injections into subsidiaries of approximately **RMB 10,810 thousands**[79](index=79&type=chunk) [Employees and Remuneration Policy](index=33&type=section&id=Employees%20and%20Remuneration%20Policy) The Group's employee headcount increased, with a corresponding rise in total employee benefit expenses, and remuneration policy is based on market terms, individual performance, qualifications, and experience - As of June 30, 2025, the Group employed **127 full-time employees**, an increase from **119** in the prior year[82](index=82&type=chunk) - Total employee benefit expenses increased from approximately **RMB 4.4 million** in 2024 to approximately **RMB 4.7 million** in 2025[82](index=82&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, issuing 45,775,245 shares and raising net proceeds of approximately HKD 4.17 million, primarily allocated to debt repayment, investment in non-automotive industries, and general working capital - 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**[84](index=84&type=chunk) Use of Proceeds from Rights Issue | Intended Use | Intended Proceeds (HKD thousands) | Actual Use (HKD thousands) | Unutilized Balance (HKD thousands) | 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 | | [Other Information](index=35&type=section&id=Other%20Information) [Interim Dividend and Securities Transactions](index=35&type=section&id=Interim%20Dividend%20and%20Securities%20Transactions) The Board decided not to declare an interim dividend, and neither the Company nor its subsidiaries engaged in any purchase, sale, or redemption of the Company's listed securities during the reporting period - The Directors decided not to declare any interim dividend for the six months ended June 30, 2025[87](index=87&type=chunk) - Neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[88](index=88&type=chunk) [Compliance with Corporate Governance Code](index=35&type=section&id=Compliance%20with%20Corporate%20Governance%20Code) The Group has complied with the Corporate Governance Code, except for Code Provision C.2.1 (separation of Chairman and CEO roles), as the Board believes Mr. Dang Fei's dual role maximizes Group interests, and all Directors confirm full compliance with the Model Code for Securities Transactions - The Company has complied with the Corporate Governance Code, except for Code Provision C.2.1[89](index=89&type=chunk) - Mr. Dang Fei serves as both Chairman and Chief Executive Officer, an arrangement the Board believes maximizes the Group's interests[89](index=89&type=chunk) - All Directors confirmed full compliance with the Model Code for Securities Transactions by Directors during the reporting period[90](index=90&type=chunk) [Directors' and Major Shareholders' Interests](index=37&type=section&id=Directors'%20and%20Major%20Shareholders'%20Interests) The report discloses the long positions in the Company's shares held by Directors, chief executives, and major shareholders, including interests through controlled corporations and spouses, with Directors confirming no competing interests Directors' and Chief Executive's Long Positions in Shares | Name | 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% | Major 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% | - The Directors confirmed that no controlling shareholder or Director and their close associates held interests in any business competing with the Group's business[95](index=95&type=chunk) [Share Option Scheme and Post-Reporting Period Events](index=39&type=section&id=Share%20Option%20Scheme%20and%20Post-Reporting%20Period%20Events) The Company has a share option scheme, but no options have been granted, exercised, cancelled, or lapsed since the listing date up to the reporting date; post-reporting period events include changes in directors, and the Audit Committee has reviewed the interim financial statements - The Company adopted a share option scheme on June 10, 2020, but no share options have been granted, exercised, cancelled, or lapsed from the listing date up to the date of this report[96](index=96&type=chunk) - Post-reporting period director changes occurred: Li Xia resigned as executive director, Ms. Zhou Wenqi and Mr. Zhang Weixian were appointed as executive directors (July 18, 2025); Mr. Wang Yifan resigned as executive director (August 6, 2025)[97](index=97&type=chunk)[98](index=98&type=chunk) - The Audit Committee has reviewed the Group's unaudited condensed consolidated financial statements for the six months ended June 30, 2025, and deemed them compliant with applicable accounting standards and GEM Listing Rules[99](index=99&type=chunk)

[Management Discussion and Analysis](index=3&type=section&id=%E7%AE%A1%E7%90%86%E5%B1%A4%E8%A8%8E%E8%AB%96%E5%8F%8A%E5%88%86%E6%9E%90) [Financial Review](index=3&type=section&id=%E8%B2%A1%E5%8B%99%E5%9B%9E%E9%A1%A7) The Group's revenue slightly decreased, but gross profit significantly increased due to higher average selling prices of branded watches, while other income and losses turned profitable, and the loss for the period narrowed substantially [Revenue](index=3&type=section&id=%E6%94%B6%E7%9B%8A) - Revenue slightly decreased by **3.2%**, primarily due to intense industry competition leading to fewer sales orders, partially offset by increased exhibition income and higher average selling prices of branded watches[6](index=6&type=chunk) Revenue Overview | Indicator | Six Months Ended June 30, 2025 (RMB million) | Six Months Ended June 30, 2024 (RMB million) | Change (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Revenue | 21.4 | 22.1 | (0.7) | (3.2%) | [Cost of Sales](index=3&type=section&id=%E9%8A%B7%E5%94%AE%E6%88%90%E6%9C%AC) - Cost of sales decreased by **21.7%**, consistent with the reduction in revenue from branded watch sales during the period[7](index=7&type=chunk) Cost of Sales Overview | Indicator | Six Months Ended June 30, 2025 (RMB million) | Six Months Ended June 30, 2024 (RMB million) | Change (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Cost of sales | 12.6 | 16.1 | (3.5) | (21.7%) | [Gross Profit and Gross Margin](index=3&type=section&id=%E6%AF%9B%E5%88%A9%E5%8F%8A%E6%AF%9B%E5%88%A9%E7%8E%87) - Gross profit significantly increased by **49.2%**, primarily due to higher average selling prices of branded watches[8](index=8&type=chunk) - Overall gross margin improved from 26.9% to **41.1%**[8](index=8&type=chunk) Gross Profit and Gross Margin Overview | Indicator | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change | | :--- | :--- | :--- | :--- | | Gross profit (RMB million) | 8.8 | 5.9 | 49.2% increase | | Gross margin | 41.1% | 26.9% | 14.2 percentage points increase | [Other Income and Losses](index=3&type=section&id=%E5%85%B6%E4%BB%96%E6%94%B6%E7%9B%8A%E5%8F%8A%E虧%E6%90%8D) - Other income and losses turned from a loss of **RMB 5.7 million** in the prior period to an income of **RMB 1.2 million**, mainly due to unrealized fair value changes of financial assets at fair value through profit or loss[9](index=9&type=chunk) Other Income and Losses Overview | Indicator | Six Months Ended June 30, 2025 (RMB million) | Six Months Ended June 30, 2024 (RMB million) | Change | | :--- | :--- | :--- | :--- | | Other income and losses | 1.2 (income) | (5.7) (loss) | Turnaround to profit | [Selling and Distribution Expenses](index=3&type=section&id=%E9%8A%B7%E5%94%AE%E5%8F%8A%E5%88%86%E9%8A%B7%E9%96%8B%E6%94%AF) - Selling and distribution expenses remained stable at approximately **RMB 2.8 million**[10](index=10&type=chunk) Selling and Distribution Expenses Overview | Indicator | Six Months Ended June 30, 2025 (RMB million) | Six Months Ended June 30, 2024 (RMB million) | Change | | :--- | :--- | :--- | :--- | | Selling and distribution expenses | 2.8 | 2.8 | Stable | [Administrative Expenses](index=3&type=section&id=%E8%A1%8C%E6%94%BF%E9%96%8B%E6%94%AF) - Administrative expenses increased by **RMB 4.7 million** to **RMB 11.4 million**, primarily due to higher depreciation and staff costs[11](index=11&type=chunk) Administrative Expenses Overview | Indicator | Six Months Ended June 30, 2025 (RMB million) | Six Months Ended June 30, 2024 (RMB million) | Change (RMB million) | | :--- | :--- | :--- | :--- | | Administrative expenses | 11.4 | 6.7 | 4.7 increase | [Finance Costs](index=3&type=section&id=%E8%9E%8D%E8%B3%87%E6%88%90%E6%9C%AC) - Finance costs slightly decreased to **RMB 1.3 million**[12](index=12&type=chunk) Finance Costs Overview | Indicator | Six Months Ended June 30, 2025 (RMB million) | Six Months Ended June 30, 2024 (RMB million) | Change (RMB million) | | :--- | :--- | :--- | :--- | | Finance costs | 1.3 | 1.5 | (0.2) decrease | [Loss Before Tax](index=4&type=section&id=%E9%99%A4%E7%A8%85%E5%89%8D%E虧%E6%90%8D) - Loss before tax decreased from **RMB 10.7 million** in the prior period to **RMB 5.6 million**[14](index=14&type=chunk) Loss Before Tax Overview | Indicator | Six Months Ended June 30, 2025 (RMB million) | Six Months Ended June 30, 2024 (RMB million) | Change (RMB million) | | :--- | :--- | :--- | :--- | | Loss before tax | (5.6) | (10.7) | 5.1 decrease | [Loss for the Period](index=4&type=section&id=%E6%9C%9F%E5%85%A7%E虧%E6%90%8D) - Loss for the period decreased from **RMB 10.7 million** in the prior period to **RMB 5.6 million**, influenced by increased gross profit, higher administrative expenses, and the turnaround in other income and losses[15](index=15&type=chunk) Loss for the Period Overview | Indicator | Six Months Ended June 30, 2025 (RMB million) | Six Months Ended June 30, 2024 (RMB million) | Change (RMB million) | | :--- | :--- | :--- | :--- | | Loss for the period | (5.6) | (10.7) | 5.1 decrease | [Prospects and Future Outlook](index=4&type=section&id=%E5%89%8D%E6%99%AF%E5%8F%8A%E6%9C%AA%E4%BE%86%E5%B1%95%E6%9C%9B) The Group plans to enhance watch and jewelry design capabilities by strengthening its design team and recruiting talent to navigate the challenging economic environment of 2025, focusing on luxury high-end watches and jewelry and considering collaborations with renowned designers - The Group aims to enhance watch and jewelry design and development capabilities and strengthen core competitiveness by improving the design and artistic literacy of its design team and recruiting more talent[16](index=16&type=chunk) - Anticipating a challenging year in 2025, the Group will closely monitor market responses and re-strategize its business and product portfolio to adapt to market demands[16](index=16&type=chunk) - The Group remains optimistic about the luxury high-end watch, luxury jewelry, and accessories consumer markets in the long term, especially driven by the rising middle class and increased disposable income of Chinese women[16](index=16&type=chunk) - Consideration is given to collaborating with renowned designers for fashionable, reasonably priced watches and jewelry suitable for professional wear[16](index=16&type=chunk) [Financial Position](index=4&type=section&id=%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81) The Group's cash and bank balances significantly increased, liquidity ratio substantially improved, and gearing ratio significantly decreased, indicating improved liquidity and reduced financial leverage - Total cash and bank balances increased to approximately **RMB 2.4 million** (December 31, 2024: approximately RMB 1.0 million)[18](index=18&type=chunk) - Current ratio increased from **5.7 times** as of December 31, 2024, to **15.5 times** as of June 30, 2025[18](index=18&type=chunk) - Gearing ratio decreased from approximately **86.2%** as of December 31, 2024, to approximately **52.0%** as of June 30, 2025[18](index=18&type=chunk) Financial Position Key Indicators | Indicator | June 30, 2025 | December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Cash and bank balances (RMB million) | 2.4 | 1.0 | 1.4 increase | | Current ratio | 15.5 times | 5.7 times | 9.8 times increase | | Gearing ratio | 52.0% | 86.2% | 34.2 percentage points decrease | [Debts and Asset Pledges](index=4&type=section&id=%E5%82%B5%E9%A0%85%E5%8F%8A%E8%B3%87%E7%94%A2%E6%8A%B5%E6%8A%BC) As of June 30, 2025, the Group had not pledged any assets to secure loans - As of June 30, 2025, the Group had not pledged any assets to obtain any loans[19](index=19&type=chunk) [Capital Commitments](index=5&type=section&id=%E8%B3%87%E6%9C%AC%E6%89%BF%E6%93%94) As of June 30, 2025, the Group had no significant capital commitments - As of June 30, 2025, the Group had no significant capital commitments (December 31, 2024: RMB zero)[21](index=21&type=chunk) [Foreign Exchange Risk](index=5&type=section&id=%E5%A4%96%E5%8C%AF%E9%A2%A8%E9%9A%AA) The Group primarily operates in China, facing foreign exchange risks related to RMB and USD, with no hedging arrangements in place during the period, but management will monitor and hedge as necessary - The Group primarily operates in China and is exposed to foreign exchange risks related to RMB and USD[22](index=22&type=chunk) - For the six months ended June 30, 2025, the Group had not entered into any hedging arrangements[22](index=22&type=chunk) - Management will continue to closely monitor foreign currency risks and make hedging arrangements when necessary[22](index=22&type=chunk) [Capital Structure](index=5&type=section&id=%E8%B3%87%E6%9C%AC%E6%9E%B6%E6%A7%8B) Details of changes in the Company's share capital are provided in Note 12 to the condensed consolidated interim financial statements - Details of changes in the Company's share capital are set out in Note 12 to the condensed consolidated interim financial statements[23](index=23&type=chunk) [Contingent Liabilities](index=5&type=section&id=%E6%88%96%E7%84%B6%E8%B2%A0%E5%82%B5) As of June 30, 2025, and December 31, 2024, the Group had no significant contingent liabilities - The Group had no significant contingent liabilities as of June 30, 2025, and December 31, 2024[24](index=24&type=chunk) [Dividend Payment](index=5&type=section&id=%E6%B4%BE%E4%BB%98%E8%82%A1%E6%81%AF) The Board does not recommend the payment of any interim dividend for the six months ended June 30, 2025 - The Board does not recommend the payment of any interim dividend for the six months ended June 30, 2025[25](index=25&type=chunk) [Significant Acquisitions or Disposals](index=5&type=section&id=%E9%87%8D%E5%A4%A7%E6%94%B6%E8%B3%BC%E6%88%96%E5%87%BA%E5%94%AE) For the six months ended June 30, 2025, there were no significant acquisitions or disposals of subsidiaries and associates - For the six months ended June 30, 2025, there were no significant acquisitions or disposals of subsidiaries and associates[26](index=26&type=chunk) [Significant Investments](index=5&type=section&id=%E9%87%8D%E5%A4%A7%E6%8A%95%E8%B3%87) The Group holds significant investments in listed securities, including Caixin Media Group Co., Ltd. and Juntai Holdings Limited, totaling **RMB 15.853 million**, representing **22.7%** of total assets, with a strategy to maximize sustainable long-term returns - As of June 30, 2025, significant investments totaled **RMB 15.853 million**, representing **22.7%** of the Group's total assets[27](index=27&type=chunk) - The investment strategy aims to build a diversified and flexible investment portfolio to maximize sustainable long-term returns and strive for high growth[28](index=28&type=chunk) Significant Investment Details | Investee Company Name | Fair Value Gain/(Loss) (RMB thousand) | Fair Value as of June 30, 2025 (RMB thousand) | Percentage of Group's Total Assets (%) | Number of Shares Held | Percentage of Equity Held (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Caixin Media Group Co., Ltd. (205.HK) | 2,278 | 4,437 | 6.4% | 11,620,000 | 1.58% | | Juntai Holdings Limited (630.HK) | 4,076 | 7,337 | 10.5% | 29,890,000 | 3.09% | | Other listed securities | (5,204) | 4,079 | 5.8% | - | - | | **Total** | **1,150** | **15,853** | **22.7%** | - | - | [Employees and Remuneration Policy](index=6&type=section&id=%E5%83%B1%E5%93%A1%E5%8F%8A%E9%85%AC%E9%87%91%E6%94%BF%E7%AD%96) As of June 30, 2025, the Group maintained 56 employees, with total remuneration costs increasing to approximately **RMB 4.7 million**, and annual performance reviews determine salaries and promotions to attract and retain valuable employees - As of June 30, 2025, the Group employed **56 employees**, consistent with the end of last year[30](index=30&type=chunk) - Total remuneration costs increased to approximately **RMB 4.7 million** (prior period 2024: approximately RMB 3.5 million)[30](index=30&type=chunk) - Employee performance is assessed annually, with results used to determine annual salaries and promotions to attract and retain talent[30](index=30&type=chunk) Remuneration Costs Overview | Indicator | Six Months Ended June 30, 2025 (RMB million) | Six Months Ended June 30, 2024 (RMB million) | Change (RMB million) | | :--- | :--- | :--- | :--- | | Total remuneration costs | 4.7 | 3.5 | 1.2 increase | [Purchase, Sale or Redemption of the Company's Listed Securities](index=6&type=section&id=%E8%B3%BC%E8%B2%B7%E3%80%81%E5%87%BA%E5%94%AE%E6%88%96%E8%B4%96%E5%9B%9E%E6%9C%AC%E5%85%AC%E5%8F%B8%E4%B9%8B%E4%B8%8A%E5%B8%82%E8%AD%89%E5%88%B8) For the six months ended June 30, 2025, neither the Company nor any of its subsidiaries purchased, redeemed, or sold any of the Company's listed securities - For the six months ended June 30, 2025, neither the Company nor any of its subsidiaries purchased, redeemed, or sold any of the Company's listed securities[31](index=31&type=chunk) [Directors' and Chief Executive's Interests and Short Positions in Shares, Underlying Shares and Debentures of the Company](index=6&type=section&id=%E8%91%A3%E4%BA%8B%E5%8F%8A%E4%B8%BB%E8%A6%81%E8%A1%8C%E6%94%BF%E4%BA%BA%E5%93%A1%E6%96%BC%E6%9C%AC%E5%85%AC%E5%8F%B8%E8%82%A1%E4%BB%BD%E3%80%81%E7%9B%B8%E9%97%9C%E8%82%A1%E4%BB%BD%E5%8F%8A%E5%82%B5%E6%AC%8A%E8%AD%89%E4%B8%AD%E7%9A%84%E6%AC%8A%E7%9B%8A%E5%8F%8A%E6%B7%A1%E5%80%89) As of June 30, 2025, no directors or chief executives held any interests or short positions in the Company's or its associated corporations' shares, underlying shares, or debentures requiring disclosure under the SFO or the Model Code - As of June 30, 2025, no directors or chief executives of the Company held any interests or short positions in the shares, underlying shares, or debentures of the Company or any of its associated corporations that are required to be notified to the Company and the Stock Exchange under the Securities and Futures Ordinance or the Model Code[34](index=34&type=chunk) [Substantial Shareholders' Interests and Short Positions in Shares and Underlying Shares of the Company](index=7&type=section&id=%E4%B8%BB%E8%A6%81%E8%82%A1%E6%9D%B1%E6%96%BC%E6%9C%AC%E5%85%AC%E5%8F%B8%E8%82%A1%E4%BB%BD%E5%8F%8A%E7%9B%B8%E9%97%9C%E8%82%A1%E4%BB%BD%E7%9A%84%E6%AC%8A%E7%9B%8A%E5%8F%8A%E6%B7%A1%E5%80%89) As of June 30, 2025, no other persons (excluding directors and chief executives) held or were deemed to hold any disclosable interests or short positions of **5%** or more in the shares or underlying shares - As of June 30, 2025, no other persons (excluding directors and chief executives of the Company) held or were deemed to hold any interests or short positions of **5%** or more in the shares or underlying shares that are required to be disclosed under the Securities and Futures Ordinance[35](index=35&type=chunk) [Directors' Rights to Acquire Shares or Debentures](index=7&type=section&id=%E8%91%A3%E4%BA%8B%E8%B3%BC%E8%B2%B7%E8%82%A1%E4%BB%BD%E6%88%96%E5%82%B5%E6%AC%8A%E8%AD%89%E4%B9%8B%E6%AC%8A%E5%88%A9) For the six months ended June 30, 2025, neither the Company nor any of its subsidiaries was a party to any arrangement enabling directors or their associates to acquire benefits by purchasing shares or debt securities of the Company or any associated corporation - For the six months ended June 30, 2025, no rights were granted to any director or their respective spouses or children under 18 years of age to acquire benefits through the acquisition of shares or debentures of the Company or any other body corporate[36](index=36&type=chunk) [Directors' Interests in Competing Businesses](index=7&type=section&id=%E8%91%A3%E4%BA%8B%E6%96%BC%E7%AB%B6%E7%88%AD%E6%A5%AD%E5%8B%99%E7%9A%84%E6%AC%8A%E7%9B%8A) For the six months ended June 30, 2025, the directors were unaware of any business or interest of any director or their respective associates that competed or might compete with the Group's business, or any other conflict of interest - For the six months ended June 30, 2025, the directors were unaware of any business or interest that competed with or had a conflict of interest with the Group's business[37](index=37&type=chunk) [Corporate Governance Code](index=8&type=section&id=%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB%E5%AE%88%E5%89%87) For the six months ended June 30, 2025, the Group adopted and complied with the code provisions set out in Appendix 14 to the Listing Rules, the Corporate Governance Code, and Corporate Governance Report - The Group has adopted and complied with the code provisions set out in Appendix 14 to the Listing Rules, the Corporate Governance Code, and Corporate Governance Report[38](index=38&type=chunk) [Standard Securities Dealing Code for Directors](index=8&type=section&id=%E8%91%A3%E4%BA%8B%E9%80%B2%E8%A1%8C%E8%AD%89%E5%88%B8%E4%BA%A4%E6%98%93%E7%9A%84%E6%A8%99%E6%BA%96%E5%AE%88%E5%89%87) The Company has adopted the Standard Securities Dealing Code for Directors of Listed Issuers as set out in Appendix 10 to the Listing Rules, and all directors confirmed compliance after inquiry - The Company has adopted the Standard Securities Dealing Code for Directors of Listed Issuers as set out in Appendix 10 to the Listing Rules[39](index=39&type=chunk) - All directors confirmed compliance with the required standards set out in the Standard Code for the six months ended June 30, 2025[39](index=39&type=chunk) [Audit Committee](index=8&type=section&id=%E5%AF%A9%E6%A0%B8%E5%A7%94%E5%93%A1%E6%9C%83) The Audit Committee, comprising three independent non-executive directors, reviewed the Company's accounting principles and practices, discussed audit, internal control, and financial reporting matters, and reviewed the Group's unaudited condensed consolidated financial statements for the six months ended June 30, 2025 - The Audit Committee has reviewed the Company's adopted accounting principles and practices and discussed audit, internal control, and financial reporting matters[40](index=40&type=chunk) - The Audit Committee has reviewed the Group's unaudited condensed consolidated financial statements for the six months ended June 30, 2025[40](index=40&type=chunk) [Compliance with the Standard Code](index=8&type=section&id=%E9%81%B5%E5%AE%88%E6%A8%99%E6%BA%96%E5%AE%88%E5%89%87) The Company has adopted a code of conduct for directors' securities transactions, with terms no less exacting than the required standards set out in Appendix 10 to the Listing Rules, and confirmed all directors have complied with it - The Company has adopted a code of conduct with terms no less exacting than the Standard Code set out in Appendix 10 to the Listing Rules[41](index=41&type=chunk) - All directors have complied with the Standard Code[41](index=41&type=chunk) [Board of Directors](index=8&type=section&id=%E8%91%A3%E4%BA%8B%E6%9C%83) As of June 30, 2025, the Board of Directors comprised two executive directors (Mr. Liang Yanhuan, Mr. Yang Xi) and three independent non-executive directors (Mr. Yu Junmin, Ms. Duan Baili, Mr. Zhong Weili) - The Board of Directors comprises two executive directors (Mr. Liang Yanhuan, Mr. Yang Xi) and three independent non-executive directors (Mr. Yu Junmin, Ms. Duan Baili, Mr. Zhong Weili)[42](index=42&type=chunk) [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=9&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E6%90%8D%E7%9B%8A%E5%8F%8A%E5%85%B6%E4%BB%96%E5%85%A8%E9%9D%A2%E6%94%B6%E7%9B%8A%E8%A1%A8) For the six months ended June 30, 2025, the Group recorded a loss for the period of **RMB 5.591 million**, a significant reduction from **RMB 10.729 million** in the prior period, with basic and diluted loss per share improving to **RMB 3.5 cents** Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (Six Months Ended June 30) | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Revenue | 21,366 | 22,090 | | Cost of sales | (12,577) | (16,144) | | Gross profit | 8,789 | 5,946 | | Other income and losses | 1,150 | (5,733) | | Selling and distribution expenses | (2,785) | (2,762) | | Administrative expenses | (11,442) | (6,680) | | Finance costs | (1,303) | (1,500) | | Loss before tax | (5,591) | (10,729) | | Tax | – | – | | Loss for the period | (5,591) | (10,729) | | Exchange differences on translation of overseas operations | (2,136) | 136 | | Total comprehensive loss for the period | (7,727) | (10,593) | | Loss per share attributable to owners of the Company (RMB cents) | (3.5) | (9.6) | [Condensed Consolidated Statement of Financial Position](index=10&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81%E8%A1%A8) As of June 30, 2025, the Group's net current assets and total equity both increased, indicating an improved financial position, with non-current assets and current liabilities decreasing, while current assets and non-current liabilities remained relatively stable Condensed Consolidated Statement of Financial Position (As of June 30, 2025) | Indicator | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | **Assets** | | | | Non-current assets | 9,198 | 13,877 | | Current assets | 60,572 | 59,874 | | **Liabilities** | | | | Current liabilities | 3,898 | 10,569 | | Non-current liabilities | 24,711 | 29,286 | | **Equity** | | | | Share capital | 1,911 | 45,286 | | Reserves | 39,250 | (11,390) | | **Total equity** | **41,161** | **33,896** | | Net current assets | 56,674 | 49,305 | | Total assets less current liabilities | 65,872 | 63,182 | [Condensed Consolidated Statement of Changes in Equity](index=11&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E6%AC%8A%E7%9B%8A%E8%AE%8A%E5%8B%95%E8%A1%A8) As of June 30, 2025, total equity attributable to owners of the Company increased to **RMB 41.161 million**, with changes primarily influenced by share capital reduction and rights issue, offsetting the loss for the period and decrease in foreign currency translation reserve Condensed Consolidated Statement of Changes in Equity (Six Months Ended June 30, 2025) | Indicator | Share Capital (RMB thousand) | Share Premium (RMB thousand) | Foreign Currency Translation Reserve (RMB thousand) | Share Option Reserve (RMB thousand) | Accumulated Losses (RMB thousand) | Total (RMB thousand) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | January 1, 2025 (Audited) | 45,286 | 473,246 | 8,917 | 5,919 | (499,472) | 33,896 | | Loss for the period | – | – | – | – | (5,591) | (5,591) | | Other comprehensive income for the period | – | – | (2,136) | – | – | (2,136) | | Share capital reduction | (44,381) | – | – | – | 44,381 | – | | Shares issued under rights issue | 1,006 | 13,986 | – | – | – | 14,992 | | **June 30, 2025 (Unaudited)** | **1,911** | **487,232** | **6,781** | **5,919** | **(460,682)** | **41,161** | [Condensed Consolidated Statement of Cash Flows](index=12&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E7%8F%BE%E9%87%91%E6%B5%81%E9%87%8F%E8%A1%A8) For the six months ended June 30, 2025, the Group's net increase in cash and cash equivalents was **RMB 1.409 million**, primarily driven by net cash from financing activities, despite net cash outflow from operating activities Condensed Consolidated Statement of Cash Flows (Six Months Ended June 30) | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Net cash used in operating activities | (2,824) | (235) | | Net cash used in investing activities | – | – | | Net cash from/(used in) financing activities | 4,233 | (410) | | Net increase/(decrease) in cash and cash equivalents | 1,409 | (645) | | Effect of exchange rate changes | (57) | 28 | | Cash and cash equivalents at beginning of period | 1,030 | 1,998 | | **Cash and cash equivalents at end of period** | **2,382** | **1,381** | [Notes to the Condensed Consolidated Interim Financial Statements](index=13&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E4%B8%AD%E6%9C%9F%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8%E9%99%84%E8%A8%BB) [1. Basis of Preparation](index=13&type=section&id=1.%20%E7%B7%A8%E8%A3%BD%E5%9F%BA%E6%BA%96) These interim financial statements are prepared in accordance with HKAS 34 and the Listing Rules, with the Group primarily engaged in manufacturing, trading, and retailing of own-brand watches and jewelry, OEM watches, and assisting clients with exhibitions, using HKD as functional currency and RMB as presentation currency - Interim financial statements are prepared in accordance with Hong Kong Accounting Standard 34 and the Listing Rules[56](index=56&type=chunk) - The Group's principal activities include manufacturing, trading, and retailing of own-brand watches and jewelry, OEM watches, and assisting clients with exhibitions[56](index=56&type=chunk) - The Company's functional currency is HKD, and the presentation currency is RMB[56](index=56&type=chunk) [2. Application of New and Revised Hong Kong Financial Reporting Standards](index=13&type=section&id=2.%20%E6%87%89%E7%94%A8%E6%96%B0%E8%A8%82%E5%8F%8A%E7%B6%93%E4%BF%AE%E8%A8%82%E9%A6%99%E6%B8%AF%E8%B2%A1%E5%8B%99%E5%A0%B1%E5%91%8A%E6%BA%96%E5%89%87%E6%9C%83%E8%A8%88%E6%BA%96%E5%89%87) The condensed consolidated financial statements are prepared on a historical cost basis, except for certain financial instruments measured at fair value, and the Group has initially applied amendments to HKAS 21, which are not expected to have a significant impact on operating results and financial position - The condensed consolidated financial statements are prepared on a historical cost basis, except for certain financial instruments measured at fair value[57](index=57&type=chunk) - The Group has initially applied the amendments to Hong Kong Accounting Standard 21 "The Effects of Changes in Foreign Exchange Rates—Lack of Exchangeability," effective from January 1, 2025[58](index=58&type=chunk) - The adoption of new and revised Hong Kong Financial Reporting Standards is not expected to have a significant impact on the Group's operating results and financial position[58](index=58&type=chunk) [3. Operating Segments](index=14&type=section&id=3.%20%E7%B6%93%E7%87%9F%E5%88%86%E9%83%A8) The Group operates two business segments: watch manufacturing, trading, and retail, and assisting clients with exhibitions, with no separate reportable segments due to a single management team overseeing the entire business - The Group operates two business segments: watch manufacturing, trading, and retail, and assisting clients with exhibitions[60](index=60&type=chunk) - Due to a single management team, the Group has no separate reportable segments[60](index=60&type=chunk) [Principal Product Turnover](index=14&type=section&id=%E4%B8%BB%E8%A6%81%E7%94%A2%E5%93%81%E7%87%9F%E6%A5%AD%E9%A1%8D) Principal Product Turnover (Six Months Ended June 30) | Product Category | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Branded watches | 16,655 | 19,080 | | Exhibition income | 4,711 | 3,010 | | **Total** | **21,366** | **22,090** | [Geographical Information](index=14&type=section&id=%E5%9C%B0%E7%90%86%E8%B3%87%E6%96%99) - The Group's operations and non-current assets are primarily located in the People's Republic of China and Hong Kong[62](index=62&type=chunk) External Customer Revenue by Customer Location (Six Months Ended June 30) | Customer Location | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Hong Kong, China | 4,711 | 3,010 | | China (excluding Hong Kong) | 16,655 | 19,080 | | **Total** | **21,366** | **22,090** | [Major Customer Information](index=14&type=section&id=%E4%B8%BB%E8%A6%81%E5%AE%A2%E6%88%B6%E8%B3%87%E6%96%99) - For the six months ended June 30, 2025, and 2024, no individual customer contributed more than **10%** of the Group's total revenue[64](index=64&type=chunk) [4. Other Income and Losses](index=15&type=section&id=4.%20%E5%85%B6%E4%BB%96%E6%94%B6%E7%9B%8A%E5%8F%8A%E虧%E6%90%8D) During the period, financial assets at fair value through profit or loss generated an unrealized fair value gain of **RMB 1.150 million**, a significant improvement from a loss of **RMB 5.733 million** in the prior period Other Income and Losses (Six Months Ended June 30) | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Unrealized fair value loss on financial assets at fair value through profit or loss | 1,150 | (5,733) | | **Total** | **1,150** | **(5,733)** | [5. Finance Costs](index=15&type=section&id=5.%20%E8%9E%8D%E8%B3%87%E6%88%90%E6%9C%AC) Finance costs, primarily from interest on bonds payable and lease liabilities, decreased to **RMB 1.303 million** during the period Finance Costs (Six Months Ended June 30) | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Interest on bonds payable and lease liabilities | 1,303 | 1,500 | [6. Taxation](index=15&type=section&id=6.%20%E7%A8%85%E9%A0%85) No Hong Kong profits tax was provided for the period due to no estimated assessable profits, while Chinese subsidiaries are subject to corporate income tax at a rate of **25%** - For the six months ended June 30, 2025, and 2024, no Hong Kong profits tax was provided as there were no estimated assessable profits arising in or derived from Hong Kong[69](index=69&type=chunk) - Chinese subsidiaries are subject to a tax rate of **25%**[70](index=70&type=chunk) Taxation (Six Months Ended June 30) | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Hong Kong profits tax | – | – | | Deferred tax reversed in Hong Kong | – | – | | **Total** | **–** | **–** | [7. Loss for the Period](index=16&type=section&id=7.%20%E6%9C%9F%E5%85%A7%E虧%E6%90%8D) Loss for the period is stated after deducting employee expenses, advertising expenses, cost of inventories recognized as expense, and depreciation, with employee expenses and depreciation showing increases Loss for the Period Deductions (Six Months Ended June 30) | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Total employee expenses (including directors' emoluments) | 4,716 | 3,530 | | Advertising expenses | 2,785 | 962 | | Cost of inventories recognized as expense | 12,577 | 16,144 | | Depreciation | 4,291 | 3,870 | [8. Loss Per Share Attributable to Owners of the Company](index=16&type=section&id=8.%20%E6%9C%AC%E5%85%AC%E5%8F%B8%E6%93%81%E6%9C%89%E4%BA%BA%E6%87%89%E4%BD%94%E6%AF%8F%E8%82%A1%E虧%E6%90%8D) For the six months ended June 30, 2025, basic and diluted loss per share attributable to owners of the Company was **RMB 3.5 cents**, an improvement from **RMB 9.6 cents** in the prior period, with weighted average ordinary shares adjusted for capital reorganization and rights issue, and diluted loss per share being the same as basic due to anti-dilutive share options - Basic and diluted loss per share attributable to owners of the Company was **RMB 3.5 cents** (2024: RMB 9.6 cents)[74](index=74&type=chunk) - The weighted average number of ordinary shares has been adjusted for the share consolidation under the capital reorganization effective March 14, 2025, and the rights issue completed on April 30, 2025[74](index=74&type=chunk) - Diluted loss per share is the same as basic loss per share because the exercise of share options had an anti-dilutive effect[79](index=79&type=chunk) Loss Per Share Calculation Data (Six Months Ended June 30) | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | Loss for the period attributable to owners of the Company (RMB thousand) | (5,591) | (10,729) | | Weighted average number of ordinary shares (thousand shares) | 158,580 | 111,305 | | Basic and diluted loss per share (RMB cents) | (3.5) | (9.6) | [9. Interim Dividend](index=17&type=section&id=9.%20%E4%B8%AD%E6%9C%9F%E8%82%A1%E6%81%AF) The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025 - The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025[76](index=76&type=chunk) [10. Property, Plant and Equipment](index=17&type=section&id=10.%20%E7%89%A9%E6%A5%AD%E3%80%81%E5%BB%A0%E6%88%BF%E5%8F%8A%E8%A8%AD%E5%82%99) For the six months ended June 30, 2025, the Group did not acquire any property, plant, and equipment - For the six months ended June 30, 2025, the Group did not acquire any property, plant, and equipment[77](index=77&type=chunk) [11. Trade Receivables](index=17&type=section&id=11.%20%E8%B2%A8%E6%98%93%E6%87%89%E6%94%B6%E6%AC%BE%E9%A0%85) As of June 30, 2025, net trade receivables decreased to **RMB 11.682 million**, with a significant reduction in receivables aged over 180 days, and the Group generally grants credit terms of 0 to 180 days to trade customers - Net trade receivables decreased to **RMB 11.682 million** (December 31, 2024: RMB 13.986 million)[78](index=78&type=chunk) - The Group generally grants credit terms of **0 to 180 days** to its trade customers[78](index=78&type=chunk) Trade Receivables Ageing Analysis (Presented by Invoice Date at End of Reporting Period) | Ageing | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | 0 to 30 days | 3,091 | 1,083 | | 31 to 60 days | 3,026 | 735 | | 61 to 90 days | – | 553 | | 91 to 180 days | 1,838 | 498 | | Over 180 days | 3,727 | 11,117 | | **Total** | **11,682** | **13,986** | [12. Share Capital](index=18&type=section&id=12.%20%E8%82%A1%E6%9C%AC) The Company completed a capital reorganization on March 14, 2025, involving share consolidation, capital reduction, and share subdivision, followed by a rights issue on April 30, 2025, issuing 107,827,200 new shares and raising approximately **HKD 16.2 million** (before expenses), increasing issued share capital - The Company completed a capital reorganization on March 14, 2025, involving share consolidation, capital reduction, and share subdivision[80](index=80&type=chunk)[81](index=81&type=chunk)[83](index=83&type=chunk) - Share consolidation: every five (5) existing shares of **HKD 0.10** each were consolidated into one (1) consolidated share of **HKD 0.50** each[81](index=81&type=chunk) - Capital reduction: the par value of each issued consolidated share was reduced from **HKD 0.50** to **HKD 0.01**, with the credit arising used to offset accumulated losses[81](index=81&type=chunk) - Rights issue: completed on April 30, 2025, issuing 107,827,200 rights shares on the basis of one rights share for every one issued share, raising a maximum of approximately **HKD 16.2 million** (before expenses)[83](index=83&type=chunk) Issued and Fully Paid Share Capital Overview | Indicator | June 30, 2025 (thousand shares) | December 31, 2024 (thousand shares) | | :--- | :--- | :--- | | Number of issued and fully paid ordinary shares | 215,654 | 539,136 | | Par value of issued and fully paid ordinary shares (RMB thousand) | 1,911 | 45,286 | [13. Share Option Scheme](index=19&type=section&id=13.%20%E8%B3%BC%E8%82%A1%E6%AC%8A%E8%A8%88%E5%8A%83) The Company's share option scheme was adopted on December 19, 2014, for a 10-year term, with no share options granted during the six months ended June 30, 2025, and the number of share options decreased due to adjustments - The share option scheme was adopted on December 19, 2014, with a term of **10 years**[84](index=84&type=chunk) - For the six months ended June 30, 2025, no share options were granted under the share option scheme[84](index=84&type=chunk) Details of Changes in Number of Share Options Under Share Option Scheme | Indicator | Outstanding as of January 1, 2025 (thousand options) | Granted during the period (thousand options) | Exercised during the period (thousand options) | Adjusted during the period (thousand options) | Outstanding as of June 30, 2025 (thousand options) | | :--- | :--- | :--- | :--- | :--- | :--- | | Employee share options | 29,376 | – | – | (23,311) | 6,065 | [14. Events After the Reporting Period](index=19&type=section&id=14.%20%E5%A0%B1%E5%91%8A%E6%9C%9F%E5%BE%8C%E4%BA%8B%E9%A0%85) No significant events affecting the Group have occurred since the end of the reporting period - No significant events affecting the Group have occurred since the end of the reporting period[86](index=86&type=chunk)

[Condensed Consolidated Statement of Profit or Loss](index=1&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss) The Group's profit or loss for the period and key financial metrics are presented, highlighting significant changes in revenue and profitability [Profit (Loss) for the Period](index=1&type=section&id=Profit%20%28Loss%29%20for%20the%20Period) For the six months ended June 30, 2025, the Group turned a loss into a profit of HKD 12,511 thousand, primarily due to a significant improvement in other gains and losses Key Data from Condensed Consolidated Statement of Profit or Loss (For the six months ended June 30) | Metric | 2025 (HKD thousands) | 2024 (HKD thousands) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Revenue from goods and services | 5,976 | 2,425 | 146.43 | | Rental income | 13,238 | 13,243 | -0.04 | | **Total Revenue** | **19,214** | **15,668** | **22.63** | | Cost of sales and services | (8,812) | (4,922) | 79.03 | | **Gross Profit** | **10,402** | **10,746** | **-3.20** | | Other gains and losses | 36,926 | (62,438) | 159.14 | | Finance costs | (17,218) | (16,494) | 4.45 | | **Profit (Loss) before tax** | **12,396** | **(79,752)** | **115.54** | | **Profit (Loss) for the period** | **12,511** | **(79,613)** | **115.71** | | Profit (Loss) attributable to owners of the Company | 8,425 | (76,931) | 110.95 | | Basic earnings (loss) per share | 0.16 HK cents | (1.45 HK cents) | 111.03 | [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=3&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) This section details the Group's total comprehensive income, highlighting the impact of foreign currency translation differences on overseas operations [Total Comprehensive Income (Expense) for the Period](index=3&type=section&id=Total%20Comprehensive%20Income%20%28Expense%29%20for%20the%20Period) The Group's total comprehensive income for the period shifted from an expense to an income, primarily due to a significant positive change in foreign currency translation differences from overseas operations Key Data from Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (For the six months ended June 30) | Metric | 2025 (HKD thousands) | 2024 (HKD thousands) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Profit (Loss) for the period | 12,511 | (79,613) | 115.71 | | Exchange differences arising from translation of overseas operations | 22,930 | (1,312) | 1847.41 | | **Total comprehensive income (expense) for the period** | **35,441** | **(80,925)** | **143.79** | | Total comprehensive income (expense) attributable to owners of the Company | 24,709 | (77,690) | 131.80 | [Condensed Consolidated Statement of Financial Position](index=4&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) This section outlines the Group's asset structure, liabilities, and equity, reflecting changes in financial position [Asset Structure](index=4&type=section&id=Asset%20Structure) As of June 30, 2025, the Group's non-current assets slightly decreased, while current assets significantly increased, mainly due to a substantial rise in financial assets measured at fair value through profit or loss Key Asset Data from Condensed Consolidated Statement of Financial Position | Metric | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Investment properties | 517,946 | 455,605 | 13.68 | | Property, plant and equipment | 10,062 | 5,353 | 87.96 | | Financial assets measured at fair value through profit or loss (Non-current) | – | 130,743 | -100.00 | | **Total non-current assets** | **671,414** | **735,812** | **-8.75** | | Financial assets measured at fair value through profit or loss (Current) | 168,815 | 15,965 | 958.60 | | Bank balances and cash | 13,834 | 18,116 | -23.64 | | **Total current assets** | **206,060** | **61,399** | **235.60** | | **Total Assets** | **877,474** | **797,211** | **10.07** | [Liabilities and Equity](index=4&type=section&id=Liabilities%20and%20Equity) The Group's net current liabilities significantly narrowed, total equity increased, and the debt-to-equity ratio decreased, indicating an improved financial position Key Liabilities and Equity Data from Condensed Consolidated Statement of Financial Position | Metric | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Bank and other borrowings (Current) | 268,292 | 262,480 | 2.21 | | **Total current liabilities** | **330,406** | **322,234** | **2.53** | | **Net current liabilities** | **(124,346)** | **(260,835)** | **-52.33** | | Other borrowings (Non-current) | 132,378 | 119,374 | 10.89 | | Promissory notes (Non-current) | 78,830 | 77,740 | 1.40 | | **Total non-current liabilities** | **244,114** | **207,464** | **17.66** | | **Total Liabilities** | **574,520** | **529,698** | **8.46** | | Equity attributable to owners of the Company | 237,296 | 212,587 | 11.62 | | **Total Equity** | **302,954** | **267,513** | **13.24** | - The debt-to-equity ratio decreased from **180.0%** as of December 31, 2024, to **173.9%** as of June 30, 2025, primarily driven by an increase in equity from fair value gains on investment properties and financial assets measured at fair value through profit or loss[48](index=48&type=chunk) [Notes to the Condensed Consolidated Financial Statements](index=6&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed notes on the basis of preparation, accounting policies, segment information, and specific financial items [1. Basis of Preparation](index=6&type=section&id=1.%20Basis%20of%20Preparation) The Group faces challenges with net current liabilities and net operating cash outflows, but the Board has plans, including expected loan renewals and new financing options, to ensure going concern - As of June 30, 2025, the Group's net current liabilities amounted to **HKD 124,346 thousand**, with net operating cash outflows of **HKD 212 thousand**[8](index=8&type=chunk) - Directors anticipate successful one-year renewal of **HKD 268,292 thousand** in other borrowings due on October 18, 2025, supported by sufficient collateral (Scottish investment property valued at **HKD 470,346 thousand**) and past renewal experience[8](index=8&type=chunk) - The Group has **HKD 121,000 thousand** in undrawn committed loan facilities and may explore better financing options or realize non-current assets to strengthen its financial position[9](index=9&type=chunk) [2. Significant Accounting Policies](index=7&type=section&id=2.%20Significant%20Accounting%20Policies) These interim financial statements adopt the same accounting policies as the previous year, with the first-time application of HKFRS 21 (Amendment) "Lack of Exchangeability" having no significant impact on the financial position - The Group first applied HKFRS 21 (Amendment) "Lack of Exchangeability" during this interim period, with no significant impact on its financial position or performance[11](index=11&type=chunk) [3. Segment Information](index=7&type=section&id=3.%20Segment%20Information) The Group operates three segments: Automotive, Property Investment, and Financial Investment and Services; as of June 30, 2025, Automotive and Property Investment segments achieved segment profit, while Financial Investment and Services recorded a loss, leading to a significant improvement in overall profit before tax - The Group operates three operating segments: **Automotive** (trading of vehicles and parts, after-sales services, EV R&D and sales), **Property Investment**, and **Financial Investment and Services** (securities investment, financing, and corporate finance services)[13](index=13&type=chunk) Segment Revenue and Results (For the six months ended June 30) | Segment | 2025 Revenue (HKD thousands) | 2024 Revenue (HKD thousands) | 2025 Segment Profit (Loss) (HKD thousands) | 2024 Segment (Loss) Profit (HKD thousands) | | :--- | :--- | :--- | :--- | :--- | | Automotive | 5,976 | 2,425 | 12,292 | (2,818) | | Property Investment | 13,238 | 13,243 | 22,909 | 4,499 | | Financial Investment and Services | – | – | (166) | (177) | | **Consolidated Total Revenue** | **19,214** | **15,668** | | | | **Profit (Loss) before tax** | | | **12,396** | **(79,752)** | Segment Assets and Liabilities (As of June 30) | Segment | 2025 Assets (HKD thousands) | 2024 Assets (HKD thousands) | 2025 Liabilities (HKD thousands) | 2024 Liabilities (HKD thousands) | | :--- | :--- | :--- | :--- | :--- | | Automotive | 271,158 | 249,781 | 57,095 | 50,645 | | Property Investment | 531,229 | 467,882 | 291,414 | 262,830 | | Financial Investment and Services | – | – | – | – | | **Consolidated Total Assets** | **877,474** | **797,211** | | | | **Consolidated Total Liabilities** | | | **574,520** | **529,698** | [4. Other Income](index=12&type=section&id=4.%20Other%20Income) Other income for the period slightly decreased, primarily due to lower commission income from the automotive segment, partially offset by increased bank interest income Other Income (For the six months ended June 30) | Item | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | Bank interest income | 93 | 2 | | Commission income | – | 113 | | Others | 12 | – | | **Total** | **105** | **115** | [5. Other Gains and Losses](index=12&type=section&id=5.%20Other%20Gains%20and%20Losses) Other gains and losses for the period shifted from a net loss to a net gain, primarily due to significant increases in fair value gains on investment properties and financial assets, and a substantial reduction in fair value losses on investments in associates Other Gains and Losses (For the six months ended June 30) | Item | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | Net exchange gains | 345 | 102 | | Fair value loss on investments in associates | (1,129) | (60,212) | | Fair value gain (loss) on investment properties | 16,117 | (2,963) | | Fair value gain on financial assets | 21,622 | 653 | | Loss on disposal of property, plant and equipment | (29) | (18) | | **Total** | **36,926** | **(62,438)** | [6. Finance Costs](index=12&type=section&id=6.%20Finance%20Costs) Finance costs for the period slightly increased, primarily due to higher interest on bank and other borrowings Finance Costs (For the six months ended June 30) | Item | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | Interest on bank and other borrowings | 15,091 | 14,459 | | Interest on shareholder loans | 339 | – | | Interest on promissory notes | 1,091 | 1,097 | | **Total** | **17,218** | **16,494** | [7. Taxation](index=13&type=section&id=7.%20Taxation) Taxation expense for the period was negative, primarily due to the offsetting effect of deferred tax Taxation (For the six months ended June 30) | Item | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | Current tax expense: Hong Kong | 47 | 35 | | Deferred tax | (162) | (174) | | **Total** | **(115)** | **(139)** | [8. Profit (Loss) for the Period](index=13&type=section&id=8.%20Profit%20%28Loss%29%20for%20the%20Period) Profit (loss) for the period is stated after deducting various operating expenses, with a decrease in net rental income from investment properties after direct operating expenses and a significant increase in inventory costs recognized as expenses Deductions from Profit (Loss) for the Period (For the six months ended June 30) | Item | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | Rental income from investment properties | 13,238 | 13,243 | | Less: Direct operating expenses | (3,820) | (3,010) | | **Net amount** | **9,418** | **10,233** | | Depreciation of property, plant and equipment | 786 | 1,184 | | Depreciation of right-of-use assets | 792 | 656 | | Amortization of intangible assets | 1,608 | – | | Cost of inventories recognized as expense | 4,892 | 1,440 | [9. Earnings (Loss) Per Share](index=13&type=section&id=9.%20Earnings%20%28Loss%29%20Per%20Share) Basic and diluted earnings per share attributable to owners of the Company turned from a loss to a profit, reflecting a significant improvement in the company's profitability Earnings (Loss) Per Share Calculation Data (For the six months ended June 30) | Metric | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | Profit (Loss) for the period used in calculating basic and diluted earnings (loss) per share | 8,425 | (76,931) | | Weighted average number of ordinary shares (Basic) | 5,295,515,390 | 5,292,515,390 | | Weighted average number of ordinary shares (Diluted) | 5,305,695,025 | 5,292,515,390 | - For the six months ended June 30, 2025, the calculation of basic earnings per share excludes contingent returnable shares related to the acquisition of Hudson Holding Limited, as the relevant conditions have not yet been met[25](index=25&type=chunk) [10. Dividends](index=14&type=section&id=10.%20Dividends) No dividends were paid or declared during the current or prior periods, nor were any proposed after the reporting period - No dividends were paid or declared for the six months ended June 30, 2025 and 2024, and no dividends have been proposed since the end of the reporting period[26](index=26&type=chunk) [11. Trade and Other Receivables](index=14&type=section&id=11.%20Trade%20and%20Other%20Receivables) The Group's total trade and other receivables decreased, with a reduction in prepayments but an increase in VAT receivables; no overdue trade receivables or rental receivables were outstanding at period-end Trade and Other Receivables (As of June 30) | Item | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | | :--- | :--- | :--- | | Trade receivables | 1,092 | 1,146 | | Rental receivables | 7,160 | 7,345 | | Prepayments | 4,840 | 8,095 | | VAT receivables | 3,045 | 2,780 | | **Total** | **23,967** | **27,628** | | Amount classified under current assets | 13,718 | 17,094 | - As of June 30, 2025, and December 31, 2024, there were no overdue trade receivables or rental receivables[29](index=29&type=chunk) [12. Trade and Other Payables](index=15&type=section&id=12.%20Trade%20and%20Other%20Payables) The Group's total trade and other payables slightly increased, with a significant rise in trade payables and an increase in deferred income Trade and Other Payables (As of June 30) | Item | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | | :--- | :--- | :--- | | Trade payables | 2,247 | 717 | | Accrued expenses | 3,440 | 4,980 | | Deferred income | 7,890 | 7,429 | | Other payables | 22,650 | 22,035 | | **Total** | **36,227** | **35,161** | Trade Payables Ageing Analysis (As of June 30) | Ageing | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | | :--- | :--- | :--- | | Within 30 days | 1,362 | 446 | | 61 to 90 days | 21 | 50 | | 91 days to 1 year | 444 | 172 | | Over 1 year | 420 | 49 | | **Total** | **2,247** | **717** | [13. Bank and Other Borrowings](index=16&type=section&id=13.%20Bank%20and%20Other%20Borrowings) The Group obtained new other borrowings and repaid more bank and other borrowings than in the prior period, with adjusted interest rates and maturity dates for new borrowings - Other borrowings of **HKD 8,198 thousand** were obtained during the period (2024: HKD 11,000 thousand)[32](index=32&type=chunk) - New borrowings bear interest at annual rates ranging from **3.85% to 9%**, with maturity dates between January 15, 2028, and April 16, 2028[32](index=32&type=chunk) - Bank and other borrowings of **HKD 20,125 thousand** were repaid during the period (2024: HKD 5,775 thousand)[32](index=32&type=chunk) [14. Loans from a Related Party/Shareholder](index=16&type=section&id=14.%20Loans%20from%20a%20Related%20Party%2FShareholder) The related party loan is unsecured and interest-free, with its maturity extended to 2026; a new unsecured shareholder loan bears 7% annual interest and matures in 2028 - The loan from a related party is unsecured and interest-free, maturing on **February 12, 2026** (December 31, 2024: February 12, 2025)[33](index=33&type=chunk) - The loan from a shareholder is unsecured, bears interest at an annual rate of **7%**, and matures on **April 7, 2028**[34](index=34&type=chunk) [15. Promissory Notes](index=16&type=section&id=15.%20Promissory%20Notes) The Group issued new interest-free promissory notes as partial consideration for the Hudson Group acquisition and extended existing promissory notes' terms; no principal of promissory notes was repaid during the period - On October 29, 2024, the Group issued interest-free promissory notes with a fair value of **HKD 45,834 thousand** as partial consideration for the acquisition of Hudson Holding Limited, with a three-year term[35](index=35&type=chunk) - Unsecured promissory notes of **HKD 53,500 thousand** issued in 2021 were further extended by two years to **March 2028**, bearing interest at an annual rate of **8%**[35](index=35&type=chunk) - For the six months ended June 30, 2025, the Group did not repay any principal of promissory notes[35](index=35&type=chunk) [Management Discussion and Analysis](index=17&type=section&id=Management%20Discussion%20and%20Analysis) This section provides an overview of the Group's financial performance, liquidity, and business operations, including segment-specific reviews [Financial Review](index=17&type=section&id=Financial%20Review) Financial performance significantly improved this period, with total revenue growth driven by the automotive segment, while gross margin contracted due to revenue mix changes; other gains and losses turned positive, leading to a profit attributable to shareholders Segment Revenue Contribution (For the six months ended June 30) | Segment | 2025 Revenue (HKD thousands) | 2024 Revenue (HKD thousands) | Change (HKD thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Property Investment | 13,200 | 13,200 | 0 | 0.00 | | Automotive | 6,000 | 2,400 | 3,600 | 150.00 | | Financial Investment and Services | – | – | 0 | 0.00 | | **Total Revenue** | **19,200** | **15,600** | **3,600** | **23.08** | - Automotive segment revenue significantly increased, primarily due to the acquisition of Hudson Holding Limited and its subsidiaries in October 2024, contributing **HKD 5,800 thousand** in revenue[37](index=37&type=chunk) - Gross profit slightly decreased by **HKD 0.3 million** to **HKD 10,400 thousand**, with the overall gross margin contracting by **14.5 percentage points** to **54.1%** (2024: 68.6%), mainly because the automotive industry's gross margin is lower than that of property investment[39](index=39&type=chunk) - Other gains and losses resulted in a net gain of **HKD 36,900 thousand** (2024: net loss of HKD 62,400 thousand), primarily from net fair value gains on investment properties of **HKD 16,100 thousand** and fair value gains on financial assets of **HKD 21,600 thousand**, alongside reduced fair value losses on investments in associates[41](index=41&type=chunk) - Selling and distribution costs and administrative expenses combined increased by **HKD 6,100 thousand** to **HKD 17,800 thousand**, mainly due to legal and professional fees, staff costs, and marketing expenses for the new energy vehicle business[42](index=42&type=chunk) - Profit attributable to owners of the Company was **HKD 8,400 thousand** (2024: loss of HKD 76,900 thousand), primarily benefiting from reduced unrealized fair value losses on investments in associates and unrealized fair value gains on investment properties[45](index=45&type=chunk) [Life Science Investment Segment](index=18&type=section&id=Life%20Science%20Investment%20Segment) The Group holds preferred share investments in Chime Biologics Limited (CBL), which saw revenue growth but expanded operating losses, and recorded an unrealized fair value loss - The Group holds Series A preferred shares in Chime Biologics Limited (CBL), with an investment cost of **USD 32 million**[44](index=44&type=chunk) - For the six months ended June 30, 2025, CBL's revenue was **USD 13.6 million** (2024 H1: USD 12 million), with an operating loss of **USD 6.4 million** (2024 H1: USD 4.1 million)[44](index=44&type=chunk) - The Group's investment in CBL had a fair value of **HKD 39,700 thousand**, representing approximately **4.5%** of total assets, and recorded an unrealized fair value loss of **HKD 1,100 thousand** (2024: HKD 60,200 thousand)[44](index=44&type=chunk) [Liquidity and Financial Resources](index=19&type=section&id=Liquidity%20and%20Financial%20Resources) The Group funds operations through business cash flow and borrowings, with a slight decrease in cash and cash equivalents; total borrowings increased, but the debt-to-equity ratio decreased due to equity growth, and foreign currency risk is managed by matching debt currency with income - During the period, **HKD 31,200 thousand** in borrowings were obtained, and **HKD 20,100 thousand** in bank borrowings were repaid[46](index=46&type=chunk) - As of June 30, 2025, cash and cash equivalents (including pledged bank deposits) amounted to **HKD 17,000 thousand** (December 31, 2024: HKD 21,400 thousand), primarily denominated in **GBP (84.3%)**, **HKD (12.3%)**, and **RMB (3.1%)**[47](index=47&type=chunk) - Total borrowings (including bank and other borrowings, related party/shareholder loans, and promissory notes) amounted to **HKD 527 million** (December 31, 2024: HKD 481.6 million), with **HKD 234.5 million** repayable after one year[48](index=48&type=chunk) - The debt-to-equity ratio decreased from **180.0%** to **173.9%**, primarily due to an increase in equity driven by fair value gains on investment properties and financial assets[48](index=48&type=chunk) - The Group has no foreign currency hedging policy, managing foreign currency risk by monitoring the matching of debt currency with pledged assets and business income[52](index=52&type=chunk) - As of June 30, 2025, certain bank deposits and properties totaling **HKD 521.1 million** were pledged as collateral for related borrowings[54](index=54&type=chunk) - Total capital commitments amounted to **HKD 6,600 thousand**, primarily related to increasing equipment for the electric vehicle business, expected to be funded by internal resources[55](index=55&type=chunk) - Subsequent to the reporting period, the Group terminated its automotive dealership business in Wuhan[57](index=57&type=chunk) [Business Review](index=22&type=section&id=Business%20Review) This section reviews the performance and strategic developments across the Group's key business segments, including property investment, automotive, financial services, and life science investments [Property Investment](index=22&type=section&id=Property%20Investment) The Group's property investment business remained stable, generating rental income from properties in Hong Kong and Scotland, and recording unrealized fair value gains on investment properties - The Group's property investment portfolio primarily includes the **Capella office building in Scotland**, industrial buildings, and car parks in Hong Kong[59](index=59&type=chunk) - A net unrealized fair value gain of **HKD 16,100 thousand** on investment properties was recorded for the period (2024: fair value loss of HKD 3,000 thousand)[59](index=59&type=chunk) - Approximately **86%** of Capella's net internal area is subject to multiple lease agreements, with total annual rent of approximately **GBP 3 million** and a weighted average unexpired lease term of **4.26 years**[59](index=59&type=chunk) [Automotive](index=22&type=section&id=Automotive) The Group made significant strides in the European automotive market by establishing a management headquarters in the Netherlands, expanding its agency sales network, focusing on EV product strategy, and actively participating in industry events, laying a foundation for long-term growth - Two subsidiaries were established in the Netherlands as the European management headquarters, responsible for brand management, sales strategy, pricing approval, and unified oversight of European operations[61](index=61&type=chunk) - Adopting a "low investment, quick return" agency business model, **eight agents** have been appointed to enhance market penetration[62](index=62&type=chunk) - Focused on selling **three main electric vehicle models**, with eBOLD and eBEAR models officially registered and authorized in Switzerland, and multi-country regulatory approvals completed in key European markets including Germany, France, Italy, Poland, Czech Republic, and Switzerland[63](index=63&type=chunk) - Actively participated in automotive industry events such as the **Rencontres Flotauto Paris trade show** and the **Lamborghini Super Trofeo Asia Challenge** to enhance brand awareness[64](index=64&type=chunk) [Financial Investment and Services](index=24&type=section&id=Financial%20Investment%20and%20Services) The Group holds a valid money lender's license, successfully renewed, but adopts a cautious approach to lending due to market downturns, with no outstanding secured loans during the period - The Group holds a valid money lender's license, successfully renewed in **January 2025**[65](index=65&type=chunk) - In response to market volatility, the Group adopted a cautious approach to its money lending business, with no outstanding secured loans to customers as of June 30, 2025, and December 31, 2024[65](index=65&type=chunk) [Life Science Investment Segment](index=24&type=section&id=Life%20Science%20Investment%20Segment) CBL made good progress in expanding its China and overseas markets, with significant contract growth, smooth commercial product production, and the establishment of a European innovation center to attract more clients - CBL signed **17 contracts** and provided over **60 proposals** to potential clients, with cumulative pre-commercial contract value of **USD 112 million**, a **61% increase** from June 2024[66](index=66&type=chunk) - CBL's second commercial product successfully completed **three commercial-scale performance qualification processes**, while the first commercial product underwent **five batches of commercial-scale production**[66](index=66&type=chunk) - CBL's first European late-stage clinical project successfully passed a major audit in **June 2025**, and a European Innovation Center was established in **Basel, Switzerland**[66](index=66&type=chunk) - CBL management accelerated the GMP-2 expansion project, with new facilities expected to commence operations in **H1 2026**, providing **twice the commercial capacity** of current GMP-1[66](index=66&type=chunk) [Outlook and Other Information](index=25&type=section&id=Outlook%20and%20Other%20Information) This section covers the Group's future outlook, dividend policy, securities transactions, and compliance with corporate governance and director's dealing codes [Outlook](index=25&type=section&id=Outlook) The Group will continue to focus on sustainable growth in the European EV market, committed to optimizing its financial position, prudently managing costs, and enhancing operational efficiency to navigate economic uncertainties and pursue sustainable development opportunities - The Group will continue to focus on sustainable growth and maintaining a leading position in the **European electric vehicle market**[67](index=67&type=chunk) - Management will focus on optimizing financial position, prudently managing costs, and enhancing operational efficiency to address economic uncertainties and geopolitical tensions[67](index=67&type=chunk) [Interim Dividend](index=25&type=section&id=Interim%20Dividend) The Board did not declare an interim dividend for the period - The Board did not declare an interim dividend for the six months ended June 30, 2025 (2024: nil)[68](index=68&type=chunk) [Purchase, Sale or Redemption of Securities](index=25&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20Securities) Neither the Company nor its subsidiaries purchased, sold, or redeemed any listed securities during the period - 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[69](index=69&type=chunk) [Compliance with Corporate Governance Code](index=25&type=section&id=Compliance%20with%20Corporate%20Governance%20Code) The Company generally complies with the Corporate Governance Code, with the Chairman and CEO roles combined to provide strong, consistent leadership, and the Board's composition ensures a balance of power - The Company has complied with all code provisions of the Corporate Governance Code set out in Appendix C1 to the Listing Rules of The Stock Exchange of Hong Kong Limited for the six months ended June 30, 2025, except for a deviation from code provision C.2.1[70](index=70&type=chunk) - Mr. Chong Tin Lung, Benny serves concurrently as Executive Chairman and Chief Executive Officer, an arrangement the Board believes provides strong and consistent leadership and facilitates business strategy implementation[71](index=71&type=chunk) - The Board comprises **three executive directors**, **one non-executive director**, and **three independent non-executive directors**, ensuring a balance of power and authority[71](index=71&type=chunk) [Compliance with Model Code for Securities Transactions by Directors](index=26&type=section&id=Compliance%20with%20Model%20Code%20for%20Securities%20Transactions%20by%20Directors) Following specific inquiries, all directors confirmed in writing their compliance with the Model Code for Securities Transactions by Directors, as set out in Appendix C3 of the Listing Rules, throughout the period - Following specific inquiries by the Company to all Directors, the Directors confirmed in writing that they have complied with the standards set out in the Model Code for the six months ended June 30, 2025[73](index=73&type=chunk) [Audit Committee](index=26&type=section&id=Audit%20Committee) The Audit Committee, composed of three independent non-executive directors, advises on auditor appointment, audit procedures, accounting policies, connected transactions, cash flow, dividend policy, internal controls, and risk management systems - The Audit Committee members include **Mr. Kong Kai Chuen, Frankie (Chairman)**, **Mr. To Chun Wai, Stephen**, and **Dr. Shum Chung Ping, B.B.S.** (all independent non-executive directors)[74](index=74&type=chunk) - Key responsibilities include recommending the appointment and remuneration of external auditors, reviewing the effectiveness of audit processes, accounting policies, connected transactions, cash flow status, dividend policy, internal control, and risk management systems[74](index=74&type=chunk) [Review of Interim Results](index=26&type=section&id=Review%20of%20Interim%20Results) The Group's interim results for the six months ended June 30, 2025, are unaudited but have been reviewed by Deloitte Touche Tohmatsu, the Company's auditor, and by the Audit Committee - The Group's interim results for the six months ended June 30, 2025, are unaudited but have been reviewed by **Deloitte Touche Tohmatsu**, the Company's auditor[75](index=75&type=chunk) - The unaudited condensed consolidated financial statements have been reviewed by the Audit Committee[75](index=75&type=chunk) [Publication of Interim Results Announcement and Interim Report](index=27&type=section&id=Publication%20of%20Interim%20Results%20Announcement%20and%20Interim%20Report) This interim results announcement has been published on the HKEX and the Company's website, with the interim report to be published and dispatched to shareholders in due course - This interim results announcement will be published on the **HKEX website** (http://www.hkexnews.hk) and the **Company's website** (http://www.autoitalia.com.hk)[76](index=76&type=chunk) - The Company's interim report for the six months ended June 30, 2025, will be published and dispatched to the Company's shareholders in due course according to their selected means of receiving corporate communications[76](index=76&type=chunk)

* 經調整EBITDA不包括財務費用、所得稅、折舊及攤銷、外匯收益╱（虧損）淨額、銀行利息收入、分 佔聯營公司收益、出售物業、廠房及設備之收益、調解和解產生之虧損、撇銷物業、廠房及設備以 及就貿易及其他應收款項、其他非流動資產及應收關聯方款項確認╱（撥回）虧損備抵。 — 1 — 簡明綜合損益及其他全面收益表 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，概不就因本公告全部或任何部分內容 而產生或因倚賴該等內容而引致的任何損失承擔任何責任。 01165 截至2025年6月30日止六個月的中期業績公告 董事會欣然公佈本集團截至2025年6月30日止六個月的未經審核中期業績，連同2024年同 期的比較數字。 該等未經審核中期簡明綜合財務報表已由本公司核數師中匯安達會計師事務所有限公司 及審核委員會審閱及於2025年8月29日獲董事會批准。 | 業績摘要 | | | | | --- | --- | --- | --- | | | 截至2025年 | 截至2024年 | | | | 6月30日 | 6月30日 | | | | 止六個月 | 止六 ...

[Financial Highlights](index=1&type=section&id=Financial%20Highlights) This section presents key financial indicators for the first half of 2025 and 2024, highlighting growth in revenue, gross profit, and net profit 2025 H1 Key Financial Indicators | Indicator | 2025 H1 (RMB million) | 2024 H1 (RMB million) | YoY Growth | | :--- | :--- | :--- | :--- | | Revenue | 113.6 | 88.5 | 28.4% | | Gross Profit | 42.1 | 37.2 | 13.2% | | Profit for the Period | 25.1 | 21.3 | 17.8% | | Profit Attributable to Equity Holders | 25.1 | 21.6 | 16.2% | [Interim Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=2&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) This statement provides a summary of the Group's financial performance, including revenue, gross profit, operating profit, and net profit for the six months ended June 30, 2025 and 2024 Summary of Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income | Indicator | 2025 H1 (RMB thousand) | 2024 H1 (RMB thousand) | | :--- | :--- | :--- | | Revenue | 113,580 | 88,456 | | Cost of Sales | (71,467) | (51,248) | | Gross Profit | 42,113 | 37,208 | | Operating Profit | 30,709 | 26,251 | | Profit for the Period | 25,099 | 21,258 | | Basic and Diluted Earnings Per Share (RMB) | 0.18 | 0.20 | [Interim Condensed Consolidated Statement of Financial Position](index=4&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) This statement presents the Group's financial position, detailing non-current assets, current assets, current liabilities, and total equity as of June 30, 2025, and December 31, 2024 Summary of Condensed Consolidated Statement of Financial Position | Indicator | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Non-current Assets | 104,078 | 145,953 | | Current Assets | 543,300 | 489,440 | | Current Liabilities | 42,968 | 37,021 | | Net Current Assets | 500,332 | 452,419 | | Total Assets Less Current Liabilities | 604,410 | 598,372 | | Total Equity | 604,410 | 598,372 | [Notes to the Interim Condensed Consolidated Financial Information](index=6&type=section&id=Notes%20to%20the%20Interim%20Condensed%20Consolidated%20Financial%20Information) This section provides detailed explanatory notes to the interim condensed consolidated financial statements, covering accounting policies, revenue, expenses, and other financial items [1 Basis of Preparation](index=6&type=section&id=1%20Basis%20of%20Preparation) This chapter outlines that the interim financial report is prepared in accordance with HKEX Listing Rules and IAS 34, using consistent accounting policies with the 2024 annual financial statements, and has been reviewed by KPMG - The report is prepared in accordance with the Listing Rules of the Stock Exchange of Hong Kong and International Accounting Standard 34, with accounting policies consistent with the 2024 annual financial statements[9](index=9&type=chunk) - This interim financial report is unaudited but has been reviewed by KPMG in accordance with Hong Kong Standard on Review Engagements 2410[10](index=10&type=chunk) [2 Revenue and Segment Reporting](index=7&type=section&id=2%20Revenue%20and%20Segment%20Reporting) The Group generates revenue primarily from three business segments: insurance agency, IT services, and consulting services, with insurance agency being the main revenue driver showing significant growth - The Group's principal activities are providing insurance agency services, IT services, and consulting services in China[11](index=11&type=chunk) [(a) Disaggregation of Revenue](index=7&type=section&id=2(a)%20Disaggregation%20of%20Revenue) This section disaggregates the Group's revenue by business segment and by the timing of revenue recognition from customer contracts for the periods presented Revenue by Business Segment | Business Segment | 2025 H1 (RMB thousand) | 2024 H1 (RMB thousand) | | :--- | :--- | :--- | | Insurance Agency Business | 109,204 | 82,213 | | IT Services | 4,340 | 5,486 | | Consulting Services | 36 | 757 | | **Total** | **113,580** | **88,456** | Revenue from Contracts with Customers by Timing of Revenue Recognition | Timing of Revenue Recognition | 2025 H1 (RMB thousand) | 2024 H1 (RMB thousand) | | :--- | :--- | :--- | | At a point in time | 107,435 | 80,464 | | Over time | 6,145 | 7,992 | | **Total** | **113,580** | **88,456** | [(b) Segment Reporting](index=7&type=section&id=2(b)%20Segment%20Reporting) This section details the Group's management of its business across insurance agency, IT services, and consulting segments, with gross profit used as the key performance indicator - The Group manages its business through three reportable segments: insurance agency business, IT services, and consulting services, with gross profit used as the performance indicator for each segment[14](index=14&type=chunk)[18](index=18&type=chunk) Gross Profit by Business Segment | Business Segment | 2025 H1 (RMB thousand) | 2024 H1 (RMB thousand) | | :--- | :--- | :--- | | Insurance Agency Services | 39,627 | 33,260 | | IT Services | 2,450 | 3,413 | | Consulting Services | 36 | 535 | | **Total** | **42,113** | **37,208** | - The majority of the Group's operating assets and results are derived from China, thus no geographical segment analysis is provided[20](index=20&type=chunk) [3 Other Income](index=9&type=section&id=3%20Other%20Income) Other income for the six months ended June 30, 2025, totaled RMB 4,260 thousand, a slight decrease from the prior year, mainly due to reduced government grants and negative other income items, partially offset by increased interest income Other Income Details | Item | 2025 H1 (RMB thousand) | 2024 H1 (RMB thousand) | | :--- | :--- | :--- | | Interest Income | 5,098 | 3,959 | | Government Grants | – | 400 | | Others | (838) | 30 | | **Total** | **4,260** | **4,389** | [4 Profit Before Tax](index=9&type=section&id=4%20Profit%20Before%20Tax) Profit before tax for the six months ended June 30, 2025, was RMB 30,697 thousand, influenced by a significant decrease in finance costs and an increase in staff costs and other items like referral fees [(a) Finance Costs](index=9&type=section&id=4(a)%20Finance%20Costs) This section details the components of the Group's finance costs for the six months ended June 30, 2025, and 2024 Finance Costs Details | Item | 2025 H1 (RMB thousand) | 2024 H1 (RMB thousand) | | :--- | :--- | :--- | | Interest expense on lease liabilities | – | 131 | | Others | 12 | 18 | | **Total** | **12** | **149** | [(b) Staff Costs](index=10&type=section&id=4(b)%20Staff%20Costs) This section details the Group's staff costs, including salaries, wages, other benefits, and contributions to defined contribution retirement plans Staff Costs Details | Item | 2025 H1 (RMB thousand) | 2024 H1 (RMB thousand) | | :--- | :--- | :--- | | Salaries, wages and other benefits | 13,581 | 12,998 | | Contributions to defined contribution retirement plans | 1,110 | 1,287 | | **Total** | **14,691** | **14,285** | [(c) Other Items](index=10&type=section&id=4(c)%20Other%20Items) This section provides a breakdown of other operating expenses, including referral fees, commission fees, service fees, and depreciation Other Items Details | Item | 2025 H1 (RMB thousand) | 2024 H1 (RMB thousand) | | :--- | :--- | :--- | | Referral fees | 62,051 | 40,228 | | Commission fees | 2,990 | 4,855 | | Service fees | 2,500 | 2,340 | | IT subcontracting fees | 1,015 | 376 | | Listing expenses | – | 676 | | Depreciation of property, plant and equipment | 54 | 76 | | Depreciation of right-of-use assets | 876 | 637 | [5 Income Tax in the Consolidated Statement of Profit or Loss](index=11&type=section&id=5%20Income%20Tax%20in%20the%20Consolidated%20Statement%20of%20Profit%20or%20Loss) Income tax expense for the six months ended June 30, 2025, was RMB 5,598 thousand, an increase from the prior year, primarily due to higher profit before tax and the company benefiting from high-tech enterprise and small-profit enterprise tax incentives [(a) Tax in the Consolidated Statement of Profit or Loss](index=11&type=section&id=5(a)%20Tax%20in%20the%20Consolidated%20Statement%20of%20Profit%20or%20Loss) This section details the components of income tax expense recognized in the consolidated statement of profit or loss Tax in Consolidated Statement of Profit or Loss Details | Item | 2025 H1 (RMB thousand) | 2024 H1 (RMB thousand) | | :--- | :--- | :--- | | Current tax – PRC Enterprise Income Tax | 5,595 | 4,845 | | Deferred tax – Temporary differences | 3 | (1) | | **Total** | **5,598** | **4,844** | [(b) Reconciliation of Tax Expense to Accounting Profit at Applicable Tax Rate](index=11&type=section&id=5(b)%20Reconciliation%20of%20Tax%20Expense%20to%20Accounting%20Profit%20at%20Applicable%20Tax%20Rate) This section reconciles the Group's tax expense with the accounting profit calculated at the applicable tax rate, considering various tax adjustments and incentives Tax Expense Reconciliation | Item | 2025 H1 (RMB thousand) | 2024 H1 (RMB thousand) | | :--- | :--- | :--- | | Profit before tax | 30,697 | 26,102 | | Income tax at statutory tax rate | 6,190 | 5,376 | | Super deduction for R&D expenses | (785) | (643) | | Tax effect of non-deductible expenses and others | 193 | 111 | | **Total** | **5,598** | **4,844** | - The Company, as a high-tech enterprise, enjoys a preferential income tax rate of **15%**[26](index=26&type=chunk) - Certain PRC subsidiaries are recognized as small-profit enterprises, benefiting from a preferential tax policy where the portion of taxable income not exceeding **RMB 3 million** is subject to a **25% reduction** and taxed at a **20%** enterprise income tax rate[27](index=27&type=chunk) [6 Earnings Per Share](index=12&type=section&id=6%20Earnings%20Per%20Share) Net profit attributable to equity holders for the six months ended June 30, 2025, was RMB 25,063 thousand, resulting in basic and diluted earnings per share of RMB 0.18, a decrease from RMB 0.20 in the prior period, despite increased net profit, due to an increase in the weighted average number of ordinary shares outstanding Earnings Per Share Calculation | Indicator | 2025 H1 | 2024 H1 | | :--- | :--- | :--- | | Net profit attributable to equity holders (RMB thousand) | 25,063 | 21,588 | | Weighted average number of ordinary shares outstanding (thousand shares) | 141,196 | 105,896 | | Basic earnings per share attributable to equity holders (RMB) | 0.18 | 0.20 | - The weighted average number of ordinary shares outstanding increased due to the Company's listing on the Main Board of the Stock Exchange on August 6, 2024, with the issuance of **35,300,000 ordinary shares**[28](index=28&type=chunk) [7 Trade and Bills Receivables](index=13&type=section&id=7%20Trade%20and%20Bills%20Receivables) Net trade and bills receivables as of June 30, 2025, increased significantly to RMB 56,388 thousand from RMB 41,965 thousand at the end of 2024, with the majority of receivables aged within three months Net Trade and Bills Receivables | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Trade and bills receivables | 56,455 | 42,048 | | Less: Impairment allowance | (67) | (83) | | **Net Amount** | **56,388** | **41,965** | Ageing Analysis of Trade Receivables | Ageing | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Within 3 months (inclusive) | 53,711 | 41,277 | | 3 to 6 months (inclusive) | 1,136 | 596 | | Over 6 months | 1,541 | 92 | | **Net Amount** | **56,388** | **41,965** | [8 Cash and Cash Equivalents, Restricted Cash and Time Deposits](index=13&type=section&id=8%20Cash%20and%20Cash%20Equivalents%2C%20Restricted%20Cash%20and%20Time%20Deposits) As of June 30, 2025, cash and cash equivalents significantly increased to RMB 286,923 thousand, while total time deposits (current and non-current) decreased, and restricted cash notably increased, primarily due to funds collected on behalf of others [(a) Cash and Cash Equivalents](index=13&type=section&id=8(a)%20Cash%20and%20Cash%20Equivalents) This section provides a breakdown of the Group's cash and cash equivalents, including bank deposits and amounts placed with other financial institutions Cash and Cash Equivalents Details | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Bank deposits | 286,803 | 169,691 | | Amounts placed with other financial institutions | 120 | 30 | | **Total** | **286,923** | **169,721** | [(b) Time Deposits](index=14&type=section&id=8(b)%20Time%20Deposits) This section details the Group's time deposits, categorized into current and non-current assets Time Deposits Details | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Current assets – Time deposits | 177,457 | 262,638 | | Non-current assets – Time deposits | 94,709 | 136,282 | | **Total** | **272,166** | **398,920** | [(c) Restricted Cash](index=14&type=section&id=8(c)%20Restricted%20Cash) This section details the components of restricted cash, including margins and funds collected on behalf of others Restricted Cash Details | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Non-current assets – Margin deposits | 7,826 | 7,736 | | Current assets – Funds collected on behalf of others | 16,601 | 7,372 | | **Total** | **24,427** | **15,108** | - Funds collected on behalf of others primarily include premiums collected on behalf of insurance companies but not yet remitted[37](index=37&type=chunk) - Qingdao Haier Insurance Agency Co., Ltd. is required to maintain **15%** of its registered capital as working capital reserves[37](index=37&type=chunk) [9 Trade and Other Payables](index=15&type=section&id=9%20Trade%20and%20Other%20Payables) Total trade and other payables as of June 30, 2025, increased to RMB 33,375 thousand from RMB 26,896 thousand at the end of 2024, primarily driven by a substantial increase in premiums payable Trade and Other Payables Details | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Amounts due to suppliers | 15,899 | 16,329 | | Premiums payable | 12,429 | 2,474 | | Dividends payable | 77 | – | | Accrued listing expenses | – | 1,029 | | Others | 4,970 | 7,064 | | **Total** | **33,375** | **26,896** | - Premiums payable represent premiums collected on behalf of insurance companies but not yet remitted as of the balance sheet date[38](index=38&type=chunk) [10 Capital and Reserves](index=16&type=section&id=10%20Capital%20and%20Reserves) As of June 30, 2025, total equity attributable to the Company's equity holders was RMB 606,197 thousand, with this section detailing share capital issuance, PRC statutory reserve requirements, and dividends paid [(a) Contributed Capital/Share Capital and Capital Reserve](index=16&type=section&id=10(a)%20Contributed%20Capital%2FShare%20Capital%20and%20Capital%20Reserve) This section outlines the issuance of ordinary shares and the allocation of proceeds to share capital and capital reserve - On August 6, 2024, the Company issued **35,300,000 ordinary shares** with a par value of RMB 1 each, with proceeds of **RMB 35,300,000** credited to share capital[39](index=39&type=chunk) - After deducting share issue costs, approximately **RMB 153,028,003** was credited to the capital reserve account[39](index=39&type=chunk) [(b) PRC Statutory Reserves](index=16&type=section&id=10(b)%20PRC%20Statutory%20Reserves) This section explains the requirements for the Group's PRC subsidiaries to appropriate 10% of their after-tax profit to statutory reserves until the reserve reaches 50% of registered capital - The Group is required to appropriate **10%** of its after-tax profit to statutory reserves until the reserve reaches **50%** of its registered capital[40](index=40&type=chunk) - Statutory reserves can be used to offset prior year losses and may be converted into capital in proportion to equity, provided that the remaining reserve balance is not less than **25%** of the entity's registered capital after conversion[40](index=40&type=chunk) [(c) Dividends](index=16&type=section&id=10(c)%20Dividends) This section details the final dividend for 2024 of RMB 0.135 per share, totaling RMB 19,061,406, which was paid before July 4, 2025 - The 2024 final dividend of **RMB 0.135 per share**, totaling **RMB 19,061,406**, was paid before July 4, 2025[41](index=41&type=chunk) [11 Non-Adjusting Post Balance Sheet Events](index=16&type=section&id=11%20Non-Adjusting%20Post%20Balance%20Sheet%20Events) On August 22, 2025, the Company entered into an agreement to conditionally acquire a 55% equity interest in Beijing Kechuang Rongxin Technology Co., Ltd. for RMB 165 million in cash - On August 22, 2025, the Company entered into an agreement to conditionally acquire a **55% equity interest** in Beijing Kechuang Rongxin Technology Co., Ltd. for **RMB 165 million** in cash[42](index=42&type=chunk) [Management Discussion and Analysis](index=17&type=section&id=Management%20Discussion%20and%20Analysis) This section provides an overview of the Group's business performance, financial results, and future outlook, emphasizing its commitment to an intelligent insurance service platform and AI technology [Business Review](index=17&type=section&id=Business%20Review) The Group is dedicated to building a one-stop intelligent insurance service platform, promoting full-process digital upgrades, and increasing investment in AI and big data technologies, achieving significant growth in revenue and net profit for the six months ended June 30, 2025 - The Group is committed to building and improving a one-stop intelligent insurance service platform, promoting full-process digital upgrades from underwriting to policy management and claims services[43](index=43&type=chunk) - Continuous investment in cutting-edge technologies such as artificial intelligence, big data, and blockchain is a key focus[43](index=43&type=chunk) 2025 H1 Business Review Key Indicators | Indicator | 2025 H1 (RMB million) | 2024 H1 (RMB million) | YoY Growth | | :--- | :--- | :--- | :--- | | Operating Revenue | 113.6 | 88.5 | 28.4% | | Net Profit Attributable to Equity Holders | 25.1 | 21.6 | 16.2% | [Insurance Agency Business](index=17&type=section&id=Insurance%20Agency%20Business) This section reviews the performance of the insurance agency business, highlighting significant increases in gross premiums and commission income, driven by platform optimization and new partnerships, despite a decline in life and health insurance - Gross premiums facilitated by the insurance agency business increased by **40.5%** from **RMB 666.2 million** to **RMB 936.0 million** in the first half of the year[44](index=44&type=chunk) - Insurance agency business commission income rose by **32.8%** from **RMB 82.2 million** to **RMB 109.2 million**, accounting for **96.1%** of total revenue[44](index=44&type=chunk) - Commission income from property insurance products grew by **47.4%** to **RMB 52.9 million**, driven by optimization of the enterprise insurance interactive service platform and product iterations[44](index=44&type=chunk) - Commission income from accident and auto insurance products increased by **38.6%** to **RMB 47.4 million**, primarily due to the introduction of new strategic channel partners[44](index=44&type=chunk) - Commission income from life and health insurance products decreased by **26.4%** to **RMB 8.9 million**, affected by the overall economic situation in China, weakened consumer demand, and the "reporting and execution in one" policy[44](index=44&type=chunk) [IT Services](index=18&type=section&id=IT%20Services) This section reviews the performance of IT services, noting a decrease in revenue primarily due to the timing of IT project acceptance milestones - IT services revenue decreased by **21.8%** from **RMB 5.5 million** to **RMB 4.3 million**[45](index=45&type=chunk) - The decline in revenue was mainly due to the timing of IT project acceptance milestones[45](index=45&type=chunk) - IT services revenue accounted for **3.8%** of total revenue[45](index=45&type=chunk) [Consulting Services](index=18&type=section&id=Consulting%20Services) This section describes the consulting services offered by the Group, including human resources consulting, management and recruitment strategy advice, and marketing and promotion services - The Group provides human resources consulting services and marketing and promotion services, including management and recruitment strategy advice, direct recruitment services, and design of promotional materials and advertisements[46](index=46&type=chunk) [Outlook](index=18&type=section&id=Outlook) The Group's long-term strategic goals include achieving sustainable development by expanding its ecosystem, proactively embracing AI technology, particularly in risk reduction and smart claims, and making prudent investments and acquisitions in the insurance intermediary and FinTech industries [Continuous Expansion of Ecosystem](index=18&type=section&id=Continuous%20Expansion%20of%20Ecosystem) This section outlines the strategy to expand the ecosystem through collaborative models, offering extended services beyond insurance, and actively developing a comprehensive FinTech business ecosystem - The Group aims to expand its ecosystem through a co-creation model, establishing connections with more companies to offer a wider range of insurance product solutions[47](index=47&type=chunk) - Services will extend beyond insurance, providing ecosystem services that originate from but are not limited to insurance, thereby enhancing user stickiness[47](index=47&type=chunk) - The Group plans to seize opportunities in financial digital development, actively expand its FinTech business landscape, and build a comprehensive FinTech business ecosystem[47](index=47&type=chunk) [Proactive Embrace of AI](index=19&type=section&id=Proactive%20Embrace%20of%20AI) This section details the Group's "AI+" strategy, focusing on enhancing risk reduction through comprehensive information collection and smart management, and improving smart claims processing with large models and rule engines for higher accuracy and efficiency - The "AI+" strategy will be deepened, with a focus on **AI+ risk reduction** through large models and big data technology to build a comprehensive information collection network, enabling intelligent hierarchical management, real-time warnings, and interventions to enhance warehouse safety management and emergency response efficiency[48](index=48&type=chunk) - **Smart claims processing** will be advanced using large models and rule engines to achieve intelligent collection of all medical bill details nationwide, dynamic correction of standard databases, improving collection accuracy, and adapting precise claims assessment algorithms to enhance claims efficiency and reasonably reduce losses[48](index=48&type=chunk) [Prudent Investments and Acquisitions in the Insurance Intermediary and FinTech Industries](index=19&type=section&id=Prudent%20Investments%20and%20Acquisitions%20in%20the%20Insurance%20Intermediary%20and%20FinTech%20Industries) This section outlines the Group's intention to actively seek strategic investment and acquisition opportunities in the insurance intermediary and FinTech sectors to accelerate business development and enhance overall competitiveness - The Group intends to actively seek strategic investment and acquisition opportunities in the insurance intermediary and FinTech industries to accelerate business development and enhance overall competitiveness[48](index=48&type=chunk) - Key considerations for investment and acquisition targets include their ability to strategically complement the Group's business in terms of technological capabilities, resource channels, or talent teams[48](index=48&type=chunk) [Financial Review](index=20&type=section&id=Financial%20Review) For the six months ended June 30, 2025, the Group experienced increases in revenue, gross profit, R&D costs, general and administrative expenses, and income tax, while selling and marketing costs and finance costs decreased, leading to a slight decline in overall net profit margin [Revenue](index=20&type=section&id=Revenue) This section reviews the Group's total revenue, which increased by 28.4% to RMB 113.6 million, primarily driven by higher insurance agency business income, despite a decrease in IT services revenue - Total revenue increased by **28.4%** from **RMB 88.5 million** to **RMB 113.6 million**, primarily due to increased revenue from the insurance agency business[49](index=49&type=chunk) - The increase in insurance agency business commission income was mainly attributable to the optimization and upgrade of the enterprise insurance interactive service platform and the addition of new strategic channel partners[49](index=49&type=chunk) - IT services revenue decreased, primarily due to the timing of IT project acceptance milestones[49](index=49&type=chunk) [Gross Profit and Gross Profit Margin](index=20&type=section&id=Gross%20Profit%20and%20Gross%20Profit%20Margin) This section reviews the Group's gross profit, which increased to RMB 42.1 million, while the overall gross profit margin decreased to 37.1%, mainly due to a higher proportion of lower-margin property insurance products within the insurance agency business - Overall gross profit increased from **RMB 37.2 million** to **RMB 42.1 million**[50](index=50&type=chunk) - The overall gross profit margin decreased from **42.0%** to **37.1%**[50](index=50&type=chunk) - The decrease in gross profit margin was mainly attributable to a decline in the gross profit margin of the insurance agency business, due to an increased proportion of commission income from property insurance products, which have relatively lower distribution gross margins[50](index=50&type=chunk) [Other Income](index=21&type=section&id=Other%20Income) This section reviews the Group's other income, which slightly decreased to RMB 4.3 million, primarily due to increased exchange losses, partially offset by higher interest income from time deposits - Other income decreased from **RMB 4.4 million** to **RMB 4.3 million**[51](index=51&type=chunk) - The decrease was mainly due to increased exchange losses, partially offset by increased interest income from time deposits[51](index=51&type=chunk) [Research and Development Costs](index=21&type=section&id=Research%20and%20Development%20Costs) This section reviews the Group's R&D costs, which slightly increased to RMB 4.7 million, primarily due to higher staff costs resulting from an increased number of R&D employees - Research and development costs slightly increased from **RMB 4.4 million** to **RMB 4.7 million**[52](index=52&type=chunk) - The increase was due to higher staff costs resulting from an increased number of R&D employees[52](index=52&type=chunk) [General and Administrative Expenses](index=21&type=section&id=General%20and%20Administrative%20Expenses) This section reviews the Group's general and administrative expenses, which increased to RMB 8.1 million, mainly due to higher personnel costs aimed at improving corporate governance and motivating management - General and administrative expenses increased from **RMB 6.9 million** to **RMB 8.1 million**[53](index=53&type=chunk) - The increase was mainly due to higher personnel costs aimed at improving corporate governance and enhancing the motivation of management personnel[53](index=53&type=chunk) [Selling and Marketing Costs](index=21&type=section&id=Selling%20and%20Marketing%20Costs) This section reviews the Group's selling and marketing costs, which decreased to RMB 2.8 million, primarily attributed to optimized business processes and enhanced organizational efficiency - Selling and marketing costs decreased from **RMB 4.1 million** to **RMB 2.8 million**[54](index=54&type=chunk) - The decrease was mainly attributable to optimized business processes and enhanced organizational efficiency[54](index=54&type=chunk) [Finance Costs](index=21&type=section&id=Finance%20Costs) This section reviews the Group's finance costs, which significantly decreased to RMB 12 thousand, mainly due to reduced interest expenses on lease liabilities - Finance costs decreased from **RMB 149 thousand** to **RMB 12 thousand**[55](index=55&type=chunk) - The decrease was mainly due to reduced interest expenses on lease liabilities[55](index=55&type=chunk) [Income Tax](index=21&type=section&id=Income%20Tax) This section reviews the Group's income tax, which increased to RMB 5.6 million, primarily due to higher profit before tax resulting from business growth - Income tax increased from **RMB 4.8 million** to **RMB 5.6 million**[56](index=56&type=chunk) - The increase was mainly due to higher profit before tax resulting from business growth[56](index=56&type=chunk) [Profit](index=22&type=section&id=Profit) This section reviews the Group's profit for the period, which increased to RMB 25.1 million, although the net profit margin decreased to 22.1% - Profit for the period increased from **RMB 21.3 million** to **RMB 25.1 million**[57](index=57&type=chunk) - The net profit margin decreased from **24.1%** to **22.1%**[57](index=57&type=chunk) [Financial Position](index=22&type=section&id=Financial%20Position) The Group's net assets slightly increased from RMB 598.4 million at the end of 2024 to RMB 604.4 million as of June 30, 2025, primarily due to increased operating profit during the period, partially offset by cash dividends paid Financial Position Summary | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Non-current Assets | 104,078 | 145,953 | | Current Assets | 543,300 | 489,440 | | Current Liabilities | 42,968 | 37,021 | | Net Assets | 604,410 | 598,372 | - Net assets slightly increased due to higher operating profit during the period, partially offset by cash dividends paid[58](index=58&type=chunk) [Cash and Cash Equivalents and Time Deposits in Other Financial Assets](index=22&type=section&id=Cash%20and%20Cash%20Equivalents%20and%20Time%20Deposits%20in%20Other%20Financial%20Assets) The total of cash and cash equivalents and time deposits in other financial assets decreased from RMB 568.6 million at the end of 2024 to RMB 559.1 million as of June 30, 2025, mainly due to cash dividends paid and delayed collection of trade receivables, partially offset by increased operating profit Total Cash and Other Financial Assets in Time Deposits | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Cash and cash equivalents | 286,923 | 169,721 | | Time deposits in other financial assets – Current portion | 177,457 | 262,638 | | Time deposits in other financial assets – Non-current portion | 94,709 | 136,282 | | **Total** | **559,089** | **568,641** | - The total amount decreased mainly due to cash dividends paid and delayed collection of trade receivables, partially offset by increased operating profit during the period[60](index=60&type=chunk) [Liquidity and Financial Resources](index=23&type=section&id=Liquidity%20and%20Financial%20Resources) As of June 30, 2025, the Group's net current assets were RMB 500.3 million, with total cash and cash equivalents and time deposits in other financial assets amounting to RMB 559.1 million, indicating sufficient liquidity for operations and strategic investments in the coming year - As of June 30, 2025, net current assets were **RMB 500.3 million** (December 31, 2024: RMB 452.4 million)[61](index=61&type=chunk) - Total cash and cash equivalents and time deposits in other financial assets amounted to **RMB 559.1 million**[61](index=61&type=chunk) - The Group will have sufficient liquidity to meet its working capital requirements for the next year and maintain financial flexibility for future strategic investment opportunities[61](index=61&type=chunk) [Gearing Ratio](index=23&type=section&id=Gearing%20Ratio) As of June 30, 2025, the Group's gearing ratio was 0.0035%, reflecting a very low level of leverage - As of June 30, 2025, the gearing ratio was **0.0035%**[62](index=62&type=chunk) [Bank Borrowings](index=23&type=section&id=Bank%20Borrowings) As of June 30, 2025, the Group had no bank borrowings - As of June 30, 2025, the Group had **zero bank borrowings**[63](index=63&type=chunk) [Contingent Liabilities](index=23&type=section&id=Contingent%20Liabilities) As of June 30, 2025, the Group had no significant contingent liabilities - As of June 30, 2025, the Group had **no significant contingent liabilities**[64](index=64&type=chunk) [Capital Commitments](index=23&type=section&id=Capital%20Commitments) For the six months ended June 30, 2025, the Group incurred no capital commitments - For the six months ended June 30, 2025, the Group incurred **no capital commitments** (RMB 11 thousand for the same period last year)[65](index=65&type=chunk) [Dividends](index=24&type=section&id=Dividends) The Board of Directors does not recommend the payment of any interim dividend for the six months ended June 30, 2025 - The Board of Directors does not recommend the payment of any interim dividend for the six months ended June 30, 2025[66](index=66&type=chunk) [Use of Net Proceeds from Global Offering](index=24&type=section&id=Use%20of%20Net%20Proceeds%20from%20Global%20Offering) The net proceeds from the global offering were approximately HKD 198.9 million, with HKD 1.2 million utilized by June 30, 2025, for enhancing IT service products and R&D capabilities, while the majority remains unutilized and is planned for developing insurance agency business, improving IT services, prudent investments, and general working capital - The net proceeds from the global offering were approximately **HKD 198.9 million**[67](index=67&type=chunk) Use of Net Proceeds from Global Offering and Utilization Status | Main Use | Approximate Percentage | Total Net Proceeds Allocated (HKD million) | Amount Utilized (June 30, 2025) (HKD million) | Unutilized Amount (June 30, 2025) (HKD million) | Expected Timeline for Unutilized Proceeds | | :--- | :--- | :--- | :--- | :--- | :--- | | Development of insurance agency business | 53.8% | 107.0 | – | 107.0 | Before end of 2027 | | Enhancement of IT service products and R&D capabilities | 26.2% | 52.1 | 1.2 | 50.9 | Before end of 2029 | | Seeking prudent investments and acquisitions | 10.0% | 19.9 | – | 19.9 | Before end of 2026 | | General working capital and general corporate purposes | 10.0% | 19.9 | – | 19.9 | Before end of 2027 | | **Total** | **100.0%** | **198.9** | **1.2** | **197.7** | | [Corporate Governance Code](index=25&type=section&id=Corporate%20Governance%20Code) The Company has adopted and complied with all principles and code provisions of the Corporate Governance Code as set out in Appendix C1 of the Listing Rules during the reporting period - The Company has adopted the Corporate Governance Code as set out in Appendix C1 of the Listing Rules and has complied with all principles and code provisions during the reporting period[69](index=69&type=chunk) - The roles of Chairman and Chief Executive Officer are combined and held by Mr. Lu Yao, an arrangement the Board believes ensures consistent internal leadership and enhances overall strategic planning efficiency[70](index=70&type=chunk) [Standard Code for Securities Transactions](index=26&type=section&id=Standard%20Code%20for%20Securities%20Transactions) The Company has adopted a code of conduct for securities transactions by directors and supervisors that is no less exacting than the Standard Code set out in Appendix C3 of the Listing Rules, with all directors and supervisors confirming compliance during the period - The Company has adopted a code of conduct for securities transactions by directors and supervisors that is no less exacting than the Standard Code set out in Appendix C3 of the Listing Rules[71](index=71&type=chunk) - All directors and supervisors confirmed compliance with the required standards of the Standard Code for the six months ended June 30, 2025[71](index=71&type=chunk) [Purchase, Sale or Redemption of Listed Securities](index=26&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%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[72](index=72&type=chunk) [Review of Interim Financial Information](index=26&type=section&id=Review%20of%20Interim%20Financial%20Information) The Company's unaudited condensed consolidated interim results have been reviewed by KPMG in accordance with Hong Kong Standard on Review Engagements 2410 and by the Audit Committee of the Board - The Company's unaudited condensed consolidated interim results have been reviewed by KPMG in accordance with Hong Kong Standard on Review Engagements 2410[73](index=73&type=chunk) - The interim results have also been reviewed by the Audit Committee of the Board[73](index=73&type=chunk) [Post Balance Sheet Events](index=26&type=section&id=Post%20Balance%20Sheet%20Events) On August 22, 2025, the Company entered into an agreement to conditionally acquire a 55% equity interest in Beijing Kechuang Rongxin Technology Co., Ltd. for RMB 165 million in cash - On August 22, 2025, the Company entered into an agreement to conditionally acquire a **55% equity interest** in Beijing Kechuang Rongxin Technology Co., Ltd. for **RMB 165 million** in cash[74](index=74&type=chunk) [Publication of Results Announcement and Interim Report](index=27&type=section&id=Publication%20of%20Results%20Announcement%20and%20Interim%20Report) This interim results announcement has been published on the HKEX website and the Company's website, with the full 2025 interim report to be dispatched to shareholders and posted online in due course - This interim results announcement has been published on the HKEX website (www.hkexnews.hk) and the Company's website (www.haierbx.net)[76](index=76&type=chunk) - The 2025 interim report, containing all information required by the Listing Rules, will be dispatched to shareholders and posted on the respective websites of the Stock Exchange and the Company in due course[76](index=76&type=chunk) [Acknowledgement](index=27&type=section&id=Acknowledgement) The Board extends its sincere gratitude to the Group's management and all employees for their efforts and contributions during the period, as well as to shareholders, business partners, and other professionals for their support - The Board extends its sincere gratitude to the Group's management and all employees for their efforts and contributions during the period, as well as to shareholders, business partners, and other professionals for their support[77](index=77&type=chunk) [By Order of the Board](index=27&type=section&id=By%20Order%20of%20the%20Board) This section lists the executive directors, Mr. Lu Yao, Mr. Zhang Zhiquan, Ms. Li Tian, and Mr. Wang Heping, and independent non-executive directors, Ms. Fang Qiaoling, Mr. Zhong Weiwen, and Ms. Wu Xianqiao - The executive directors are Mr. Lu Yao, Mr. Zhang Zhiquan, Ms. Li Tian, and Mr. Wang Heping[78](index=78&type=chunk) - The independent non-executive directors are Ms. Fang Qiaoling, Mr. Zhong Weiwen, and Ms. Wu Xianqiao[78](index=78&type=chunk)

[Company Information](index=5&type=section&id=Company%20Information) [Company Basic Information](index=5&type=section&id=Company%20Basic%20Information) Hong Kong Entertainment International Holdings Limited (Stock Code: 8291) is a Cayman Islands-registered investment holding company focused on tinplate manufacturing in China and product repackaging in Hong Kong, with details on governance and operations - Company Name: **Hong Kong Entertainment International Holdings Limited** (Stock Code: **8291**)[2](index=2&type=chunk)[6](index=6&type=chunk) - Registered in the **Cayman Islands** as an investment holding company[20](index=20&type=chunk) - Principal businesses include (i) manufacturing and selling **tinplate and tinplate packaging products in China**; and (ii) **product repackaging and sales in Hong Kong**[20](index=20&type=chunk)[28](index=28&type=chunk) - Board of Directors comprises Executive Directors Mr. Wang Yun, Mr. Zou Yonggang; and Independent Non-executive Directors Mr. Wong Shui Chi, Ms. Wan So Ying, Mr. Wu Tsz King[4](index=4&type=chunk)[11](index=11&type=chunk) - Audit Committee Chairman: Mr. Wong Shui Chi; Remuneration Committee Chairman: Ms. Wan So Ying; Nomination Committee Chairman: Mr. Wu Tsz King[11](index=11&type=chunk) [Financial Highlights](index=7&type=section&id=Financial%20Highlights) [Interim Financial Performance Overview](index=7&type=section&id=Interim%20Financial%20Performance%20Overview) For the six months ended June 30, 2025, the Group's revenue decreased by 36.0% year-on-year to RMB24.4 million, but loss attributable to owners of the company significantly narrowed to RMB0.1 million, a substantial improvement from RMB11.1 million in the prior period, with no interim dividend proposed and increased liquidity pressure indicated by a higher asset-liability ratio Key Financial Indicators for the Six Months Ended June 30 | Indicator | June 30, 2025 (RMB million) | June 30, 2024 (RMB million) | Year-on-Year Change (%) | | :--- | :---: | :---: | :---: | | Revenue | 24.4 | 38.1 | -36.0% | | Loss Attributable to Owners of the Company | (0.1) | (11.1) | -99.1% (Loss narrowed) | | Interim Dividend | Nil | Nil | - | | Cash and Bank Balances (End of Period) | 3.6 | 7.1 (December 31, 2024) | -49.3% | | Asset-Liability Ratio (End of Period) | 82.6% | 60.0% (December 31, 2024) | +22.6 pp | [Unaudited Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=8&type=section&id=Unaudited%20Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) [Profit or Loss and Comprehensive Income Overview](index=8&type=section&id=Profit%20or%20Loss%20and%20Comprehensive%20Income%20Overview) For the six months ended June 30, 2025, the Group's revenue decreased to RMB24,396 thousand from RMB38,080 thousand in the prior period, yet the loss for the period significantly narrowed to RMB170 thousand, with loss attributable to owners of the company at RMB147 thousand and basic and diluted loss per share at RMB0.09 cents, primarily due to a net gain from other income and reduced selling, administrative, and finance costs Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (For the Six Months Ended June 30) | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | Year-on-Year Change (RMB thousand) | Year-on-Year Change (%) | | :--- | :---: | :---: | :---: | :---: | | Revenue | 24,396 | 38,080 | (13,684) | -36.0% | | Cost of Sales | (23,279) | (37,284) | 14,005 | -37.6% | | Gross Profit | 1,117 | 796 | 321 | +40.3% | | Other Income / (Losses) Net | 2,150 | (5,516) | 7,666 | Turned to profit | | Selling Expenses | (93) | (770) | 677 | -87.9% | | Administrative and Other Expenses | (2,477) | (3,984) | 1,507 | -37.8% | | Finance Costs | (867) | (1,659) | 792 | -47.7% | | Loss Before Income Tax | (170) | (11,133) | 10,963 | -98.5% | | Loss for the Period | (170) | (11,133) | 10,963 | -98.5% | | Loss Attributable to Owners of the Company | (147) | (11,133) | 10,986 | -98.7% | | Basic and Diluted Loss Per Share (RMB cents) | (0.09) | (6.96) | 6.87 | -98.7% | [Unaudited Condensed Consolidated Statement of Financial Position](index=10&type=section&id=Unaudited%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) [Financial Position Overview](index=10&type=section&id=Financial%20Position%20Overview) As of June 30, 2025, the Group's non-current assets slightly decreased, and total current assets declined to RMB32,168 thousand from RMB44,614 thousand as of December 31, 2024, primarily due to reductions in inventories, trade receivables, and pledged bank deposits, while total current liabilities also decreased to RMB81,681 thousand from RMB93,723 thousand, mainly driven by lower trade payables and bills payable, with the Group continuing to face challenges from net current liabilities and net liabilities, and an expanding capital deficit Condensed Consolidated Statement of Financial Position (As of June 30, 2025) | Indicator | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | Change (RMB thousand) | Change (%) | | :--- | :---: | :---: | :---: | :---: | | **Assets** | | | | | | Non-current Assets | 1,718 | 2,084 | (366) | -17.6% | | Current Assets | 32,168 | 44,614 | (12,446) | -27.9% | | - Inventories | 5,810 | 8,526 | (2,716) | -31.9% | | - Trade Receivables | 5,587 | 14,640 | (9,053) | -61.8% | | - Financial Assets at Fair Value Through Profit or Loss | 12,716 | 9,541 | 3,175 | +33.3% | | - Cash and Cash Equivalents | 3,565 | 4,099 | (534) | -13.0% | | **Liabilities** | | | | | | Current Liabilities | 81,681 | 93,723 | (12,042) | -12.8% | | - Trade Payables and Bills Payable | 35,212 | 52,993 | (17,781) | -33.6% | | - Borrowings (Current) | 28,000 | 28,000 | 0 | 0.0% | | Non-current Liabilities (Borrowings) | 46,573 | 46,573 | 0 | 0.0% | | **Net** | | | | | | Net Current Liabilities | (49,513) | (49,109) | (404) | +0.8% (Liabilities increased) | | Net Liabilities | (94,368) | (93,598) | (770) | +0.8% (Liabilities increased) | | **Equity** | | | | | | Equity Attributable to Owners of the Company | (94,305) | (93,558) | (747) | +0.8% (Deficit increased) | | Capital Deficit | (94,368) | (93,598) | (770) | +0.8% (Deficit increased) | [Unaudited Condensed Consolidated Statement of Changes in Equity](index=12&type=section&id=Unaudited%20Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) [Equity Changes Overview](index=12&type=section&id=Equity%20Changes%20Overview) For the six months ended June 30, 2025, equity attributable to owners of the company decreased from RMB(93,558) thousand at the beginning of the period to RMB(94,305) thousand at the end, primarily due to a loss for the period of RMB147 thousand and other comprehensive expenses of RMB600 thousand from exchange differences on translating overseas operations, with lapsed share options also reclassified to accumulated losses Condensed Consolidated Statement of Changes in Equity (For the Six Months Ended June 30) | Indicator | June 30, 2025 (RMB thousand) | January 1, 2024 (RMB thousand) | | :--- | :---: | :---: | | Share Capital | 27,909 | 27,909 | | Share Premium | 105,325 | 105,325 | | Statutory Reserve Fund | 3,826 | 3,826 | | Capital Reserve | 7,200 | 7,200 | | Share Option Reserve | 2,463 | 4,208 | | Exchange Reserve | 6,123 | 6,032 | | Other Reserves | (35,783) | (35,783) | | Accumulated Losses | (211,368) | (206,052) | | **Subtotal Equity Attributable to Owners of the Company** | **(94,305)** | **(87,335)** | | Non-controlling Interests | (63) | – | | **Total** | **(94,368)** | **(87,335)** | - Loss for the period: Loss attributable to owners of the company was **RMB147 thousand** (2024: RMB11,133 thousand)[18](index=18&type=chunk) - Other comprehensive expenses: Exchange differences on translating overseas operations resulted in **RMB600 thousand** expenses (2024: RMB492 thousand income)[18](index=18&type=chunk) - Lapsed share options: For the six months ended June 30, 2025, **RMB1,266 thousand** was deducted from the share option reserve and reclassified to accumulated losses due to lapsed share options[18](index=18&type=chunk) [Unaudited Condensed Consolidated Statement of Cash Flows](index=13&type=section&id=Unaudited%20Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) [Cash Flow Overview](index=13&type=section&id=Cash%20Flow%20Overview) For the six months ended June 30, 2025, the Group's net cash used in operating activities significantly decreased to RMB1,345 thousand, with net cash from investing activities at RMB1,741 thousand and net cash used in financing activities at RMB867 thousand, resulting in cash and cash equivalents at the end of the period of RMB3,565 thousand, a decrease of RMB471 thousand from the beginning of the period Condensed Consolidated Statement of Cash Flows (For the Six Months Ended June 30) | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | Change (RMB thousand) | | :--- | :---: | :---: | :---: | | Net Cash Used in Operating Activities | (1,345) | (14,409) | 13,064 | | Net Cash From Investing Activities | 1,741 | 3,455 | (1,714) | | Net Cash Used in Financing Activities | (867) | (1,659) | 792 | | Net Decrease in Cash and Cash Equivalents | (471) | (12,613) | 12,142 | | Cash and Cash Equivalents at End of Period | 3,565 | 7,999 | (4,434) | [Notes to the Unaudited Condensed Consolidated Interim Financial Information](index=14&type=section&id=Notes%20to%20the%20Unaudited%20Condensed%20Consolidated%20Interim%20Financial%20Information) [1. General Information and Basis of Preparation](index=14&type=section&id=1.%20General%20Information%20and%20Basis%20of%20Preparation) This section outlines the company's basic information, principal businesses, functional currency, and the basis for preparing financial statements, with the Board affirming the Group's going concern ability despite significant uncertainties like net loss and net current liabilities, supported by unutilized bank facilities, former directors' financial support, and cost control measures - The company is an investment holding company, with principal businesses in **tinplate operations in China** and **product repackaging and sales in Hong Kong**[20](index=20&type=chunk) - The functional currency is **HKD**, but **RMB** is used as the presentation currency for financial reporting[21](index=21&type=chunk) - Basis of preparation: Prepared in accordance with **Hong Kong Accounting Standard 34 "Interim Financial Reporting"** issued by the HKICPA and the GEM Listing Rules[21](index=21&type=chunk) - Going concern considerations: As of June 30, 2025, the Group incurred a **net loss of RMB170 thousand**, **net current liabilities of RMB49,513 thousand**, and **net liabilities of RMB94,368 thousand**, indicating significant uncertainties[24](index=24&type=chunk) - Going concern measures: The Group has **unutilized bank facilities of RMB52,000 thousand**, former directors have agreed to provide financial support, other financing options can be sought, and cost control measures are being implemented[24](index=24&type=chunk)[26](index=26&type=chunk) [2. Revenue, Other Income / (Losses) Net and Segment Information](index=16&type=section&id=2.%20Revenue,%20Other%20Income%20%2F%20(Losses)%20Net%20and%20Segment%20Information) The Group's total revenue for the six months ended June 30, 2025, was RMB24,396 thousand, a decrease from RMB38,080 thousand in the prior period, mainly due to reduced sales in the China tinplate business; however, net other income turned from a loss of RMB5,516 thousand to a gain of RMB2,150 thousand, primarily driven by fair value gains on financial assets at fair value through profit or loss, with no segment information presented as the chief operating decision maker reviews overall financial performance Revenue and Other Income / (Losses) Net (For the Six Months Ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :---: | :---: | | Revenue from Sales of Tinplate Packaging Products and Tinplate | 20,403 | 38,080 | | Revenue from Product Repackaging and Sales | 3,993 | – | | **Total Revenue** | **24,396** | **38,080** | | Realized and Unrealized Fair Value Gains / (Losses) on Financial Assets at FVTPL | 2,146 | (5,571) | | Gain on Disposal of Property, Plant and Equipment | 4 | – | | Gain on Disposal of a Subsidiary | – | 55 | | **Other Income / (Losses) Net** | **2,150** | **(5,516)** | - Geographical revenue: **China (excluding Hong Kong) revenue was RMB20,403 thousand** (2024: RMB38,080 thousand), and **Hong Kong, China revenue was RMB3,993 thousand** (2024: Nil)[31](index=31&type=chunk) Revenue from Major Customers (For the Six Months Ended June 30) | Customer | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :---: | :---: | | Customer A | 4,406 | Not applicable | | Customer B | 3,910 | Not applicable | | Customer C | 2,670 | Not applicable | | Customer D | Not applicable | 14,094 | | Customer E | Not applicable | 5,636 | [3. Finance Costs](index=18&type=section&id=3.%20Finance%20Costs) For the six months ended June 30, 2025, the Group's finance costs, primarily interest expense on borrowings, significantly decreased to RMB867 thousand from RMB1,659 thousand in the prior period, reflecting reduced utilization of bank facilities Finance Costs (For the Six Months Ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :---: | :---: | | Interest Expense on Borrowings | 867 | 1,659 | [4. Income Tax](index=18&type=section&id=4.%20Income%20Tax) The Group's subsidiaries in Hong Kong and China did not make any income tax provisions for the six months ended June 30, 2025, and 2024, due to no assessable profits in Hong Kong and tax losses incurred in China - Hong Kong Profits Tax: **No assessable profits**, no provision made[37](index=37&type=chunk) - PRC Enterprise Income Tax: **PRC subsidiaries incurred tax losses**, no provision made[37](index=37&type=chunk) [5. Loss Before Income Tax](index=18&type=section&id=5.%20Loss%20Before%20Income%20Tax) For the six months ended June 30, 2025, the Group's loss before income tax significantly narrowed to RMB170 thousand from RMB11,133 thousand in the prior period, mainly due to reduced expenses such as cost of inventories and depreciation of property, plant and equipment Loss Before Income Tax Components (For the Six Months Ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :---: | :---: | | Cost of Inventories Recognized | 23,279 | 37,284 | | Depreciation of Property, Plant and Equipment | 595 | 1,948 | | Depreciation of Right-of-Use Assets | – | 12 | | Expenses Relating to Short-term Leases | 17 | – | [6. Dividends](index=19&type=section&id=6.%20Dividends) For the six months ended June 30, 2025, the company neither paid nor proposed any dividends - No dividends were paid or proposed for the current period or the prior corresponding period[40](index=40&type=chunk) [7. Loss Per Share](index=19&type=section&id=7.%20Loss%20Per%20Share) For the six months ended June 30, 2025, the company's basic and diluted loss per share was RMB0.09 cents, a significant reduction from RMB6.96 cents in the prior period, primarily due to a substantial narrowing of the loss for the period Loss Per Share (For the Six Months Ended June 30) | Indicator | 2025 (RMB cents) | 2024 (RMB cents) | | :--- | :---: | :---: | | Basic and Diluted Loss Per Share | (0.09) | (6.96) | - Basis of calculation: Loss attributable to owners of the company was **RMB147 thousand** (2024: RMB11,133 thousand), with a weighted average number of **160,000,000 shares** in issue[41](index=41&type=chunk)[15](index=15&type=chunk) [8. Property, Plant and Equipment](index=19&type=section&id=8.%20Property,%20Plant%20and%20Equipment) For the six months ended June 30, 2025, the Group acquired property, plant and equipment of RMB249 thousand and disposed of property, plant and equipment with a carrying amount of RMB20 thousand, generating a gain of RMB4 thousand Property, Plant and Equipment Movements (For the Six Months Ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :---: | :---: | | Additions | 249 | 100 | | Proceeds from Disposal | 24 | 0 | | Gain on Disposal | 4 | 0 | [9. Inventories](index=19&type=section&id=9.%20Inventories) As of June 30, 2025, the Group's total inventories amounted to RMB5,810 thousand, a decrease from RMB8,526 thousand as of December 31, 2024, primarily reflected in reductions across raw materials, work-in-progress, and finished goods categories Inventories Composition (As of June 30, 2025) | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :---: | :---: | | Raw Materials | 3,110 | 5,319 | | Work-in-progress | 54 | 182 | | Finished Goods | 2,646 | 3,025 | | **Total Inventories** | **5,810** | **8,526** | [10. Trade Receivables](index=20&type=section&id=10.%20Trade%20Receivables) As of June 30, 2025, the Group's net trade receivables significantly decreased to RMB5,587 thousand from RMB14,640 thousand as of December 31, 2024, primarily due to a reduction in trade receivables arising from customer contracts, with a typical credit period of 180 days Trade Receivables (As of June 30, 2025) | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :---: | :---: | | Trade Receivables Arising from Contracts with Customers | 13,797 | 22,850 | | Less: Provision for Expected Credit Losses | (8,210) | (8,210) | | **Net Trade Receivables** | **5,587** | **14,640** | Aging Analysis of Trade Receivables (As of June 30, 2025) | Aging | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :---: | :---: | | Within 1 month | 1,940 | 1,473 | | 1-3 months | 1,679 | 2,578 | | 3-6 months | 1,223 | 3,399 | | 6 months-1 year | 745 | 7,190 | | **Total** | **5,587** | **14,640** | [11. Financial Assets at Fair Value Through Profit or Loss](index=21&type=section&id=11.%20Financial%20Assets%20at%20Fair%20Value%20Through%20Profit%20or%20Loss) As of June 30, 2025, the Group's financial assets at fair value through profit or loss primarily consisted of Hong Kong listed equity securities, with a fair value of RMB12,716 thousand, an increase from RMB9,541 thousand as of December 31, 2024 Financial Assets at Fair Value Through Profit or Loss (As of June 30, 2025) | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :---: | :---: | | Hong Kong Listed Equity Securities | 12,716 | 9,541 | - Fair value measurement: Based on **quoted bid prices on the Stock Exchange** at each reporting period end[45](index=45&type=chunk) [12. Trade Payables and Bills Payable](index=21&type=section&id=12.%20Trade%20Payables%20and%20Bills%20Payable) As of June 30, 2025, the Group's total trade payables and bills payable significantly decreased to RMB35,212 thousand from RMB52,993 thousand as of December 31, 2024, primarily due to bills payable reducing to zero and a decrease in trade payables, with a typical supplier credit period of 90 days Trade Payables and Bills Payable (As of June 30, 2025) | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :---: | :---: | | Trade Payables | 35,212 | 43,009 | | Bills Payable | – | 9,984 | | **Total** | **35,212** | **52,993** | Aging Analysis of Trade Payables and Bills Payable (As of June 30, 2025) | Aging | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :---: | :---: | | Within 1 month | 3,412 | 2,762 | | 1-3 months | 8,794 | 12,276 | | 3-6 months | 5,173 | 6,142 | | 6 months-1 year | 9,661 | 14,957 | | Over 1 year | 8,172 | 16,856 | | **Total** | **35,212** | **52,993** | [13. Borrowings](index=22&type=section&id=13.%20Borrowings) As of June 30, 2025, the Group's total borrowings amounted to RMB74,573 thousand, comprising secured bank borrowings of RMB28,000 thousand and unsecured borrowings from a former director of RMB46,573 thousand, with bank borrowings collateralized by third-party assets and the Group having RMB52,000 thousand in unutilized bank facilities Borrowings Composition (As of June 30, 2025) | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :---: | :---: | | Current Liabilities - Secured Bank Borrowings | 28,000 | 28,000 | | Non-current Liabilities - Unsecured Borrowings | 46,573 | 46,573 | | **Total Borrowings** | **74,573** | **74,573** | - Bank borrowing interest rate: **4.4% per annum**[48](index=48&type=chunk) - Unsecured borrowings: Amounts due to a former director are **non-trade in nature, unsecured, interest-free**, and repayable by June 30, 2027[48](index=48&type=chunk) - Collateral: Bank borrowings are secured by **leasehold land and buildings** owned by a company wholly-owned by a former director[49](index=49&type=chunk) - Unutilized bank facilities: **RMB52,000 thousand**, valid until September 2, 2027[49](index=49&type=chunk) [14. Share Capital](index=23&type=section&id=14.%20Share%20Capital) As of June 30, 2025, the company's authorized share capital consisted of 500,000 thousand ordinary shares with a par value of HKD0.20 each, and its issued and fully paid share capital comprised 160,000 thousand shares with a par value of HKD32,000 thousand, equivalent to RMB27,909 thousand Share Capital Composition (As of June 30, 2025) | Item | Number of Shares (thousand shares) | Par Value (HKD thousand) | Equivalent (RMB thousand) | | :--- | :---: | :---: | :---: | | Authorized Share Capital (Ordinary shares of HKD0.20 each) | 500,000 | 100,000 | 83,490 | | Issued and Fully Paid Share Capital (Ordinary shares of HKD0.20 each) | 160,000 | 32,000 | 27,909 | [15. Share Option Scheme](index=23&type=section&id=15.%20Share%20Option%20Scheme) The company adopted a share option scheme on June 23, 2017, to attract, retain, and motivate participants; as of June 30, 2025, 10,519,352 shares were available for issue under the scheme, with 2,519,352 share options granted but unexercised, and 8,256,000 share options lapsed during the period, resulting in RMB1,266 thousand being reclassified from share option reserve to accumulated losses - Purpose of Share Option Scheme: To **attract, retain, and motivate** eligible participants, fostering the Group's development[51](index=51&type=chunk) - Eligible Participants: Includes **directors, employees, consultants, distributors, suppliers**, among others[51](index=51&type=chunk) - Grant Limit: Not to exceed **10% of the total issued shares**[52](index=52&type=chunk) - Number of Share Options: As of June 30, 2025, **8,000,000 share options were available for grant**; **10,519,352 shares were available for issue** (representing 6.57% of issued shares); **2,519,352 share options were granted but unexercised** (representing 1.57% of issued shares)[53](index=53&type=chunk)[54](index=54&type=chunk) Share Option Movements Overview (For the Six Months Ended June 30) | Category | January 1, 2024 (options) | Lapsed in 2024 (options) | January 1, 2025 (options) | Lapsed in 2025 (options) | June 30, 2025 (options) | | :--- | :---: | :---: | :---: | :---: | :---: | | Employees | 10,460,440 | (2,064,000) | 8,256,000 | (8,256,000) | 2,204,440 | | Consultants | 314,912 | – | 314,912 | – | 314,912 | | **Total** | **12,839,352** | **(2,064,000)** | **10,775,352** | **(8,256,000)** | **2,519,352** | - Impact of Lapsed Share Options: For the six months ended June 30, 2025, **RMB1,266 thousand** was deducted from the share option reserve and reclassified to accumulated losses due to the lapse of **8,256,000 share options**[57](index=57&type=chunk) - No share options were granted during the current period[58](index=58&type=chunk) [16. Fair Value Measurement](index=27&type=section&id=16.%20Fair%20Value%20Measurement) This section describes the Group's method for fair value measurement of financial assets, primarily using Level 1 inputs (unadjusted quoted prices in active markets) for Hong Kong listed equity securities, which amounted to RMB12,716 thousand as of June 30, 2025 - Fair value hierarchy: **Level 1 inputs** (unadjusted quoted prices in active markets for identical assets or liabilities) are used to measure Hong Kong listed equity securities[62](index=62&type=chunk)[64](index=64&type=chunk) Financial Assets at Fair Value Through Profit or Loss (As of June 30, 2025) | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :---: | :---: | | Hong Kong Listed Equity Securities | 12,716 | 9,541 | [17. Events After Reporting Period](index=29&type=section&id=17.%20Events%20After%20Reporting%20Period) Subsequent to the reporting period, the company's directors proposed a share capital reorganisation, including a share consolidation (3 shares into 1), capital reduction (cancellation of fractional shares and reduction of par value from HKD0.6 to HKD0.006 per share), and subdivision of authorized unissued shares, which remains subject to shareholder and Stock Exchange approval - Proposed Share Capital Reorganisation: Includes **share consolidation, capital reduction, and subdivision of authorized unissued shares**[66](index=66&type=chunk)[68](index=68&type=chunk) - Share Consolidation: Every **3 issued shares of HKD0.2 par value** will be consolidated into **1 consolidated share of HKD0.6 par value**[68](index=68&type=chunk) - Capital Reduction: Involves **cancellation of fractional consolidated shares** and reduction of the par value of each consolidated share from **HKD0.6 to HKD0.006**[68](index=68&type=chunk) - Conditions for effectiveness: Subject to **shareholder resolutions, approval by the Stock Exchange Listing Committee**, and compliance with other regulatory requirements[66](index=66&type=chunk) [Management Discussion and Analysis](index=30&type=section&id=Management%20Discussion%20and%20Analysis) [Business Activities](index=30&type=section&id=Business%20Activities) The Group primarily engages in the manufacturing and sale of tinplate packaging products in China and provides repackaging services in Hong Kong, with no significant changes in business operations since its listing in 2017 - Principal businesses: **Manufacturing and sales of tinplate packaging products in China**, and **repackaging services in Hong Kong**[69](index=69&type=chunk) - No significant changes in business operations since its listing in 2017[69](index=69&type=chunk) [Business Review and Outlook](index=30&type=section&id=Business%20Review%20and%20Outlook) For the six months ended June 30, 2025, the Group's revenue decreased by 36.0% due to reduced sales demand from China's economic slowdown; however, loss significantly narrowed to RMB0.2 million, primarily benefiting from fair value gains on financial assets due to a recovering Hong Kong stock market and cost control measures, with future plans to consolidate market share, expand product and service portfolios, broaden sales channels, and improve cash flow through cost control - Revenue decline: For the six months ended June 30, 2025, revenue decreased by **36.0% to RMB24.4 million**, mainly due to reduced sales demand from the **economic slowdown in China**[70](index=70&type=chunk) - Loss narrowing: Loss for the period narrowed from **RMB11.1 million to RMB0.2 million**, primarily attributed to **fair value gains on financial assets (RMB2.1 million)** from a recovering Hong Kong stock market and **cost control measures**[70](index=70&type=chunk) - Future outlook: Plans to **consolidate market share** in the tinplate packaging business, **expand product and service portfolios**, **broaden sales channels**, **enlarge customer base**, and **improve operational efficiency and cash flow through cost control**[71](index=71&type=chunk) [Debts and Pledges of Assets](index=31&type=section&id=Debts%20and%20Pledges%20of%20Assets) As of June 30, 2025, the Group had secured borrowings of RMB28.0 million and unsecured borrowings of RMB46.6 million, with bank borrowings collateralized by buildings owned by a subsidiary of a former director, and RMB52 million in unutilized bank facilities Borrowings Composition (As of June 30, 2025) | Item | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | | :--- | :---: | :---: | | Secured Borrowings | 28.0 | 28.0 | | Unsecured Borrowings | 46.6 | 46.6 | - Collateral: Bank borrowings and other bank facilities are secured by **buildings owned by a subsidiary of a former director**[73](index=73&type=chunk) - Unutilized bank facilities: **RMB52 million**[73](index=73&type=chunk) [Financial Review](index=32&type=section&id=Financial%20Review) This section provides a detailed review of financial indicators for the six months ended June 30, 2025, highlighting a 36.0% revenue decrease due to China's economic slowdown, a corresponding drop in cost of sales, a 40.3% increase in gross profit with a gross margin improvement to 4.6% driven by higher average selling prices, a shift from net other losses to gains, and significant reductions in selling, administrative, and finance costs due to cost control and lower bank financing, ultimately leading to a substantial narrowing of the loss for the period [Revenue](index=32&type=section&id=Revenue) Revenue decreased by **36.0% year-on-year to RMB24.4 million**, primarily due to reduced product sales demand from the **economic slowdown in China**[74](index=74&type=chunk) [Cost of Sales](index=32&type=section&id=Cost%20of%20Sales) Cost of sales decreased by **37.5% year-on-year to RMB23.3 million**, consistent with the revenue decline trend[75](index=75&type=chunk) [Gross Profit and Gross Margin](index=32&type=section&id=Gross%20Profit%20and%20Gross%20Margin) Gross Profit and Gross Margin (For the Six Months Ended June 30) | Indicator | 2025 (RMB million) | 2024 (RMB million) | Change (%) | | :--- | :---: | :---: | :---: | | Gross Profit | 1.1 | 0.8 | +40.3% | | Gross Margin | 4.6% | 2.1% | +2.5 pp | - Gross margin increase was primarily due to an **increase in the average selling price of the Group's products**[76](index=76&type=chunk) [Other Income / Losses Net](index=33&type=section&id=Other%20Income%20%2F%20Losses%20Net) Net other income turned from a **loss of RMB5.6 million in 2024 to a gain of RMB2.1 million in 2025**, primarily benefiting from **fair value gains on financial assets at fair value through profit or loss** due to a recovering Hong Kong stock market[77](index=77&type=chunk) [Selling Expenses](index=33&type=section&id=Selling%20Expenses) Selling expenses decreased by **87.5% year-on-year to RMB0.1 million**, mainly due to the **Group's implementation of cost control measures**[78](index=78&type=chunk) [Administrative and Other Expenses](index=33&type=section&id=Administrative%20and%20Other%20Expenses) Administrative and other expenses decreased by **37.5% year-on-year to RMB2.5 million**, primarily due to the **Group's implementation of cost control measures**[79](index=79&type=chunk) [Finance Costs](index=33&type=section&id=Finance%20Costs) Finance costs decreased by **47.1% year-on-year to RMB0.9 million**, mainly due to **reduced utilization of bank facilities**[80](index=80&type=chunk) [Loss for the Period](index=34&type=section&id=Loss%20for%20the%20Period) Loss for the period significantly decreased from **RMB11.1 million in 2024 to RMB0.2 million in 2025**[81](index=81&type=chunk) [Dividends](index=34&type=section&id=Dividends) The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025 - The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025[82](index=82&type=chunk) [Liquidity and Financial Resources](index=34&type=section&id=Liquidity%20and%20Financial%20Resources) The Group's liquidity primarily stems from cash inflows from operating activities; as of June 30, 2025, total cash and bank balances were RMB3.6 million, and the asset-liability ratio increased to 82.6%, indicating heightened liquidity pressure Liquidity and Financial Resources (As of June 30, 2025) | Indicator | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | | :--- | :---: | :---: | | Total Cash and Bank Balances | 3.6 | 7.1 | | Asset-Liability Ratio | 82.6% | 60.0% | - Financial policy: The Board adopts a **conservative approach** and closely monitors liquidity to meet funding requirements[84](index=84&type=chunk) [Key Performance Indicators](index=35&type=section&id=Key%20Performance%20Indicators) The performance analysis of key performance indicators in this interim report has been detailed in the "Financial Review" section - Performance analysis of key performance indicators has been elaborated in the "Financial Review" section[85](index=85&type=chunk) [Principal Risks, Uncertainties and Risk Management](index=35&type=section&id=Principal%20Risks,%20Uncertainties%20and%20Risk%20Management) The Group primarily faces credit risk arising from trade receivables, other receivables, and bank cash, and has established credit policies and continuous monitoring, conducting individual credit assessments for customers - Principal risk: **Credit risk**, arising from trade receivables, other receivables, and bank cash[86](index=86&type=chunk) - Risk management: **Credit policies are established**, credit risk is continuously monitored, and individual credit assessments are conducted for customers[86](index=86&type=chunk) [Material Acquisitions and Disposals of Subsidiaries](index=35&type=section&id=Material%20Acquisitions%20and%20Disposals%20of%20Subsidiaries) For the six months ended June 30, 2025, the Group did not undertake any material acquisitions or disposals of subsidiaries - No material acquisitions or disposals of subsidiaries occurred during the period[87](index=87&type=chunk) [Contingent Liabilities](index=35&type=section&id=Contingent%20Liabilities) As of June 30, 2025, the Group had no significant contingent liabilities - No significant contingent liabilities existed during the period[88](index=88&type=chunk) [Employees and Remuneration Policy](index=35&type=section&id=Employees%20and%20Remuneration%20Policy) As of June 30, 2025, the Group employed 58 employees, a decrease from 75 as of December 31, 2024, with employee costs approximately RMB1.3 million; the Group aims to ensure salary levels align with industry practices and are determined based on qualifications and performance Employees and Remuneration (For the Six Months Ended June 30) | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :---: | :---: | | Number of Employees | 58 | 75 | | Employee Costs (RMB million) | 1.3 | 1.8 | - Remuneration policy: Salary levels are consistent with **industry practices and market conditions**, and remuneration is determined based on **employee qualifications and performance**[89](index=89&type=chunk) [Material Investments Held](index=36&type=section&id=Material%20Investments%20Held) As of June 30, 2025, the Group held 17 Hong Kong listed equity securities with a fair value of approximately RMB12.7 million; to mitigate concentration risk, the Group intends to diversify its investment portfolio and closely monitor performance, with major investments including shares in Harbour Digital, China Investment and Finance, and RexLot Holdings, which represent a significant portion of the Group's total assets, and the Group will continue to adopt a prudent investment approach, maintaining a diversified portfolio across industries - Investment portfolio: Holds **17 Hong Kong listed equity securities**, with a fair value of approximately **RMB12.7 million**[90](index=90&type=chunk) - Investment strategy: Intends to **diversify its investment portfolio** to mitigate concentration and investment risks, closely monitor performance, adopt a prudent investment approach, aiming to **enhance capital utilization efficiency and generate additional investment returns**[90](index=90&type=chunk)[93](index=93&type=chunk) Major Equity Securities Investments (As of June 30, 2025) | Company Name / Stock Code | Shareholding Percentage | Fair Value (Loss) / Gain for the Six Months Ended June 30, 2025 (RMB thousand) | Fair Value as of June 30, 2025 (RMB thousand) | Percentage of Group's Total Assets | | :--- | :---: | :---: | :---: | :---: | | Harbour Digital Capital Limited (913) | 2.9% | (1,207) | 3,750 | 11.1% | | China Investment and Finance Group Limited (1226) | 0.4% | 1,834 | 2,481 | 7.3% | | RexLot Holdings Limited (1327) | 4.8% | 1,142 | 2,415 | 7.1% | | Other Listed Securities | - | - | 4,070 | 12.0% | | **Total** | - | - | **12,716** | **37.5%** | [Foreign Exchange Risk](index=38&type=section&id=Foreign%20Exchange%20Risk) The Group's primary operations are in China, with most transactions settled in RMB, resulting in minimal foreign exchange risk; for the six months ended June 30, 2025, the Group did not hedge any foreign exchange risk - Foreign exchange risk: **Minimal**, as principal businesses are in China and transactions are settled in RMB[94](index=94&type=chunk) - Foreign exchange hedging: **No foreign exchange risk was hedged** during the period[94](index=94&type=chunk) [Capital Structure](index=38&type=section&id=Capital%20Structure) As of June 30, 2025, the company's issued share capital was HKD32,000,000 (approximately RMB27,909,000), with 160,000,000 ordinary shares issued, each with a par value of HKD0.2; there were no other changes to the capital structure apart from those disclosed elsewhere in this interim report - Issued share capital: **HKD32,000,000** (approximately **RMB27,909,000**)[95](index=95&type=chunk) - Number of ordinary shares issued: **160,000,000 shares**, each with a par value of **HKD0.2**[95](index=95&type=chunk) [Future Plans for Material Investments and Capital Assets](index=38&type=section&id=Future%20Plans%20for%20Material%20Investments%20and%20Capital%20Assets) Apart from what has been disclosed in this interim report, the Group had no other plans for material investments or capital assets as of June 30, 2025 - No other material investment or capital asset plans existed during the period[96](index=96&type=chunk) [Other Information Disclosure](index=39&type=section&id=Other%20Information%20Disclosure) [Directors' and Chief Executive's Interests and Short Positions in Shares, Underlying Shares and Debentures of the Company](index=39&type=section&id=Directors'%20and%20Chief%20Executive's%20Interests%20and%20Short%20Positions%20in%20Shares,%20Underlying%20Shares%20and%20Debentures%20of%20the%20Company) As of June 30, 2025, save as disclosed elsewhere in the report, no directors or chief executive had any disclosable interests or short positions in the shares, underlying shares, or debentures of the company or its associated corporations - Directors and chief executive had no disclosable interests or short positions in shares, underlying shares, or debentures[97](index=97&type=chunk) [Substantial Shareholders' and Other Persons' Interests and Short Positions in Shares, Underlying Shares and Debentures of the Company](index=39&type=section&id=Substantial%20Shareholders'%20and%20Other%20Persons'%20Interests%20and%20Short%20Positions%20in%20Shares,%20Underlying%20Shares%20and%20Debentures%20of%20the%20Company) As of June 30, 2025, apart from the disclosed directors and chief executive, no other persons held any disclosable interests or short positions in the company's shares or underlying shares, or possessed 10% or more of the voting interests in any other member company of the Group - Apart from directors and chief executive, no other persons held disclosable interests or short positions in shares or underlying shares[98](index=98&type=chunk) [Share Option Scheme](index=39&type=section&id=Share%20Option%20Scheme) The company adopted a share option scheme on June 23, 2017; as of June 30, 2025, 2,519,352 share options remained granted but unexercised, with each option entitling the holder to subscribe for one share of HKD0.20 par value - The share option scheme was adopted on **June 23, 2017**[99](index=99&type=chunk) - As of June 30, 2025, **2,519,352 share options were granted but unexercised**[100](index=100&type=chunk)[101](index=101&type=chunk) - Each share option entitles the holder to subscribe for **one share of HKD0.20 par value**[100](index=100&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=40&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 - During the period, the company and its subsidiaries did not purchase, sell, or redeem any of the company's listed securities[102](index=102&type=chunk) [Directors' Contractual Interests](index=41&type=section&id=Directors'%20Contractual%20Interests) As of June 30, 2025, no directors had any significant beneficial interests, directly or indirectly, in any contract entered into by the company or any of its subsidiaries that was material to the Group's business - Directors had no material contractual interests[103](index=103&type=chunk) [Directors' and Controlling Shareholders' Competing Interests](index=41&type=section&id=Directors'%20and%20Controlling%20Shareholders'%20Competing%20Interests) As of June 30, 2025, the directors were unaware of any business or interest of the directors, the company's controlling shareholders, or their respective associates that competed or might compete with the Group's business - Directors and controlling shareholders had no competing interests[104](index=104&type=chunk) [Directors' Securities Transactions](index=41&type=section&id=Directors'%20Securities%20Transactions) The company has adopted written guidelines for directors' securities transactions, and the directors confirm compliance with these guidelines and the required standards of dealing under the GEM Listing Rules as of the report date - The company has adopted written guidelines for directors' securities transactions, and directors confirm compliance with the required dealing standards[105](index=105&type=chunk) [Compliance with Corporate Governance Code Practices](index=41&type=section&id=Compliance%20with%20Corporate%20Governance%20Code%20Practices) The directors believe that, as of the date of this interim report, the company has adopted the principles and complied with all applicable code provisions of the Corporate Governance Code set out in Appendix 15 to the GEM Listing Rules - The company has adopted and complied with the Corporate Governance Code in Appendix 15 of the GEM Listing Rules[106](index=106&type=chunk) [Audit Committee](index=42&type=section&id=Audit%20Committee) The company has established an Audit Committee, comprising three independent non-executive directors, responsible for reviewing and overseeing the financial reporting process and internal control procedures; the Audit Committee has reviewed the condensed consolidated interim financial information in this report - The Audit Committee has been established, comprising Mr. Wong Shui Chi (Chairman), Mr. Wu Tsz King, and Ms. Wan So Ying, all of whom are independent non-executive directors[107](index=107&type=chunk) - Principal responsibilities: To **review and oversee the Group's financial reporting process and internal control procedures**[107](index=107&type=chunk) - Review status: The Committee has **reviewed the condensed consolidated interim financial information** in this report[107](index=107&type=chunk)

INTERIM REPORT 2025 中期報告 INTERIM REPORT 2025 中期報告 COMPANY PROFILE 公司簡介 BYD Company Limited ("BYD" or "the Company", together with its subsidiaries, "the Group"; stock code: H shares: 01211 (HKD counter); 81211 (RMB counter); A shares: 002594) is principally engaged in automobile business which mainly includes new energy vehicles, handset components and assembly services, rechargeable batteries and photovoltaics business. Meanwhile, with its technological superiority, the Group actively develops urban rail t ...