[Report Overview](index=1&type=section&id=Report%20Overview) [Interim Results Announcement 2025](index=1&type=section&id=Interim%20Results%20Announcement%202025) This announcement contains the unaudited results of BYD Company Limited and its subsidiaries for the six months ended June 30, 2025, reviewed by the audit committee and prepared according to HKEX Listing Rules - This announcement includes the unaudited results of BYD Company Limited and its subsidiaries for the six months ended June 30, 2025[4](index=4&type=chunk) - The company's audit committee has reviewed these unaudited results[4](index=4&type=chunk) - The announcement is prepared in accordance with the relevant provisions of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited[4](index=4&type=chunk) [COMPANY PROFILE](index=2&type=section&id=COMPANY%20PROFILE) [Business Segments](index=2&type=section&id=Business%20Segments) BYD Group primarily operates in new energy vehicles, mobile phone components and assembly, rechargeable batteries, and photovoltaic businesses, actively expanding into urban rail transit, leading globally in NEVs and rechargeable batteries - BYD is primarily engaged in the automobile business, mainly new energy vehicles, mobile phone components and assembly, rechargeable batteries, and photovoltaic business[5](index=5&type=chunk)[11](index=11&type=chunk) - The Group actively expands into urban rail transit leveraging its technological advantages[5](index=5&type=chunk)[11](index=11&type=chunk) - The Group is a pioneer and leader in the global new energy vehicle industry, with deep accumulation in vehicle electrification and intelligence[6](index=6&type=chunk)[11](index=11&type=chunk) - The Group is one of the world's leading manufacturers of rechargeable batteries, covering consumer batteries, power batteries (e.g., "Blade Battery"), and energy storage batteries[7](index=7&type=chunk)[11](index=11&type=chunk) [Technological Advantages](index=2&type=section&id=Technological%20Advantages) BYD leverages deep expertise in vehicle electrification, intelligence, battery technology, clean energy, and electronic information, building sustainable core competitive advantages through continuous innovation, and actively developing high-tech products like AI data centers - The Group possesses strong technological accumulation in key areas such as vehicle electrification and intelligence, building core competitive advantages through continuous innovation[6](index=6&type=chunk)[11](index=11&type=chunk) - In the power battery sector, the Group developed the highly safe lithium iron phosphate "Blade Battery", accelerating its return to the mainstream market[7](index=7&type=chunk)[11](index=11&type=chunk) - The photovoltaic business has a full industry chain layout including silicon wafers, cells, photovoltaic modules, and photovoltaic system applications, committed to sustainable clean energy development[8](index=8&type=chunk)[12](index=12&type=chunk) - As a high-tech innovation product provider, the Group's business covers consumer electronics, AI data centers, leveraging core advantages in electronic information, AI, 5G, IoT, thermal management, new materials, precision molds, and digital manufacturing technologies[9](index=9&type=chunk)[12](index=12&type=chunk) [CORPORATE INFORMATION](index=4&type=section&id=CORPORATE%20INFORMATION) [Board of Directors and Supervisors](index=4&type=section&id=Board%20of%20Directors%20and%20Supervisors) The company's Board of Directors includes Executive Director Mr. Wang Chuanfu, Non-executive Directors Mr. Lu Xiangyang and Mr. Xia Zuoquan, and Independent Non-executive Directors Mr. Cai Hongping, Mr. Zhang Min, and Ms. Yu Ling. The Board of Supervisors includes Mr. Li Yongzhao, Ms. Zhu Aiyun, Ms. Wang Zhen, Mr. Huang Jiangfeng, and Ms. Tang Mei - Executive Director: Mr. Wang Chuanfu[15](index=15&type=chunk)[17](index=17&type=chunk) - Non-executive Directors: Mr. Lu Xiangyang, Mr. Xia Zuoquan[15](index=15&type=chunk)[17](index=17&type=chunk) - Independent Non-executive Directors: Mr. Cai Hongping, Mr. Zhang Min, Ms. Yu Ling[15](index=15&type=chunk)[17](index=17&type=chunk) - Supervisors: Mr. Li Yongzhao, Ms. Zhu Aiyun, Ms. Wang Zhen, Mr. Huang Jiangfeng, Ms. Tang Mei[15](index=15&type=chunk)[17](index=17&type=chunk) [Committees and Key Personnel](index=4&type=section&id=Committees%20and%20Key%20Personnel) The company has an Audit Committee, Remuneration Committee, Nomination Committee, and Strategy and Sustainable Development Committee, and has disclosed key information such as authorized representatives, registered address, auditor, Hong Kong place of business, H share registrar, investor and media relations consultant, company website, and stock codes - Audit Committee Chairman: Mr. Zhang Min[15](index=15&type=chunk)[17](index=17&type=chunk) - Remuneration Committee Chairman: Mr. Cai Hongping[15](index=15&type=chunk)[17](index=17&type=chunk) - Nomination Committee Chairman: Ms. Yu Ling[15](index=15&type=chunk)[17](index=17&type=chunk) - Strategy and Sustainable Development Committee Chairman: Mr. Wang Chuanfu[16](index=16&type=chunk)[17](index=17&type=chunk) - Company Secretary: Mr. Li Qian[15](index=15&type=chunk)[17](index=17&type=chunk) - Auditor: Ernst & Young Hua Ming LLP (Special General Partnership)[20](index=20&type=chunk)[21](index=21&type=chunk) - H Share Code: 01211 (HKD counter); 81211 (RMB counter). A Share Code: 002594[21](index=21&type=chunk)[22](index=22&type=chunk) [FINANCIAL HIGHLIGHTS](index=6&type=section&id=FINANCIAL%20HIGHLIGHTS) [Key Financial Metrics](index=6&type=section&id=Key%20Financial%20Metrics) For the six months ended June 30, 2025, BYD's revenue increased by 23.30% to RMB 371,281 million, net profit attributable to owners increased by 13.79% to RMB 15,511 million, and earnings per share were RMB 1.71 Key Financial Data for H1 2025 | Indicator | H1 2025 (RMB million) | YoY Growth Rate | | :--- | :--- | :--- | | Revenue | 371,281 | 23.30% | | Gross Profit | 66,866 | 18.24% | | Profit Attributable to Owners of the Parent | 15,511 | 13.79% | | Earnings Per Share | RMB 1.71 | 9.62% | [Operational Highlights](index=6&type=section&id=Operational%20Highlights) New energy vehicle sales reached new highs, maintaining top sales in China and globally, with expanding brand influence. Overseas markets achieved significant growth, becoming a new growth engine. Electronics business focuses on high-value-added consumer electronics and AI data centers. However, intensified competition in the automotive industry led to short-term pressure on domestic profitability - NEV sales reached new highs, maintaining top sales in China and globally, with brand influence continuously expanding[26](index=26&type=chunk) - Brand influence enhanced through technological depth, multi-brand strategy refined, brand awareness and reputation steadily improved, with increasing proportion of high-end models[26](index=26&type=chunk) - Overseas markets fully engaged, achieving significant sales growth, accelerating localization, becoming a new engine for sustained high-speed and high-quality growth[26](index=26&type=chunk) - Electronics business focuses on high-value-added consumer electronics, consolidating and expanding leading position in high-end market, actively seizing AI opportunities, and accelerating layout in new areas like AI data centers[26](index=26&type=chunk) - Intensified competition in the automotive industry, with "fixed pricing" and "over-marketing" issues, and impact on "Intelligent Driving for All" strategy, leading to short-term pressure on domestic profitability[26](index=26&type=chunk) [MANAGEMENT DISCUSSION AND ANALYSIS](index=7&type=section&id=MANAGEMENT%20DISCUSSION%20AND%20ANALYSIS) [PERFORMANCE OVERVIEW](index=7&type=section&id=PERFORMANCE%20OVERVIEW) In H1 2025, BYD achieved revenue of RMB 371.3 billion, overseas revenue of RMB 135.4 billion, net profit attributable to owners of RMB 15.51 billion, R&D investment of RMB 30.9 billion, total domestic tax paid of RMB 27.1 billion, cash reserves of RMB 156.1 billion, and net operating cash flow of RMB 31.8 billion Key Performance Data for H1 2025 | Indicator | Amount (RMB) | | :--- | :--- | | Revenue | 371.3 billion | | Overseas Revenue | 135.4 billion | | Net Profit Attributable to Owners of the Parent | 15.51 billion | | R&D Investment | 30.9 billion | | Total Domestic Tax Paid | 27.1 billion | | Cash Reserves | 156.1 billion | | Net Operating Cash Flow | 31.8 billion | [1. INDUSTRY ANALYSIS AND REVIEW](index=7&type=section&id=1.%20INDUSTRY%20ANALYSIS%20AND%20REVIEW) In H1 2025, China's economy grew steadily with GDP up 5.3%. The automotive industry saw robust production and sales, with NEV penetration exceeding 50% and increased market share for domestic brands. Overseas NEV exports achieved breakthrough growth. Consumer electronics demand faced pressure, but new intelligent product markets, especially AI data centers, expanded rapidly - In H1 2025, China's GDP grew by **5.3%**, laying the foundation for the full-year growth target[29](index=29&type=chunk)[30](index=30&type=chunk) - China's automotive production and sales reached **15.621 million** and **15.653 million** units respectively, increasing by **12.5%** and **11.4%** YoY, setting new records[32](index=32&type=chunk)[33](index=33&type=chunk) - China's NEV production and sales reached **6.968 million** and **6.937 million** units respectively, increasing by **41.4%** and **40.3%** YoY, with NEVs accounting for **44.3%** of new car sales[32](index=32&type=chunk)[33](index=33&type=chunk) - China's NEV passenger vehicle retail penetration rate reached **50.2%**, exceeding 50% for four consecutive months, marking the entry into a "mainstream phase" of electrification[32](index=32&type=chunk)[33](index=33&type=chunk) - China's automobile exports rose to **3.083 million** units, up **10.4%** YoY; NEV exports reached **1.06 million** units, up **75.2%** YoY[34](index=34&type=chunk)[36](index=36&type=chunk) - Overall demand in the consumer electronics market faced pressure, with global smartphone shipments increasing by only **0.1%** YoY to **586 million** units[42](index=42&type=chunk)[43](index=43&type=chunk) - The AI data center market expanded rapidly, with IDC projecting embedded GPU servers to grow by **46.7%** YoY in 2025, accounting for nearly **50%** of the total global server market value[42](index=42&type=chunk)[43](index=43&type=chunk) [1.1 Automobiles and Batteries Business](index=7&type=section&id=1.1%20Automobiles%20and%20Batteries%20Business) In H1 2025, China's automotive market achieved double-digit growth driven by policy support and technological innovation, with strong NEV production and sales, and penetration exceeding 50%. Domestic brands significantly increased market share, and NEV exports saw breakthrough growth. The government introduced various policies to support NEV development, including equipment upgrades, consumer trade-ins, and charging infrastructure construction. Rechargeable battery and photovoltaic businesses also maintained steady development, but the consumer electronics industry faced pressure - China's automotive industry production and sales achieved double-digit growth, with NEVs performing exceptionally well[32](index=32&type=chunk)[33](index=33&type=chunk) - China's NEV passenger vehicle retail penetration rate reached **50.2%**, exceeding 50% for four consecutive months[32](index=32&type=chunk)[33](index=33&type=chunk) - China's domestic brand passenger vehicle market share reached **68.5%**, an increase of **6.6 percentage points** YoY[32](index=32&type=chunk)[33](index=33&type=chunk) - China's NEV exports reached **1.06 million** units, an increase of **75.2%** YoY[34](index=34&type=chunk)[36](index=36&type=chunk) - Government introduced a series of favorable policies, including "Notice on Implementing Large-scale Equipment Renewal and Consumer Goods Trade-in Policies in 2025" and "Notice on Carrying out Pilot Work for Automobile Circulation and Consumption Reform"[35](index=35&type=chunk)[37](index=37&type=chunk) - Energy storage demand maintained rapid growth, with expanding market size; global photovoltaic installed capacity maintained steady growth, and profitability improved[40](index=40&type=chunk)[41](index=41&type=chunk) [1.2 Handset Components and Assembly Business](index=12&type=section&id=1.2%20Handset%20Components%20and%20Assembly%20Business) In H1 2025, global consumer electronics market demand faced pressure, with slow growth in smartphone shipments. However, the integration of emerging technologies like AI, 5G, and IoT drove the development of new intelligent product markets, especially the AI data center equipment market, which expanded rapidly due to explosive demand for AI infrastructure - Global smartphone shipments increased by only **0.1%** YoY to **586 million** units; China market increased by **0.4%** YoY to **139 million** units, but decreased by **4%** YoY in Q2[42](index=42&type=chunk)[43](index=43&type=chunk) - Integration of emerging technologies like AI, 5G communication, and IoT rapidly expanded application scenarios for next-generation intelligent products, continuously driving the development of new intelligent product markets[42](index=42&type=chunk)[43](index=43&type=chunk) - Explosive global demand for AI infrastructure drove rapid expansion of markets for AI servers, thermal management, power management, and other AI data center equipment[42](index=42&type=chunk)[43](index=43&type=chunk) - IDC expects servers with embedded GPUs to grow by **46.7%** YoY in 2025, accounting for nearly **50%** of the total global server market value[42](index=42&type=chunk)[43](index=43&type=chunk) [2. BUSINESS REVIEW](index=13&type=section&id=2.%20BUSINESS%20REVIEW) In H1 2025, BYD Group's revenue increased by 23.30% to RMB 371,281 million, with automotive business contributing 81.48%. The Group continued to increase R&D investment, up 53.05%. NEV business maintained top sales in China and globally, with significant growth in overseas markets. The Group continuously enhanced product competitiveness through a multi-brand strategy and technological innovation. Mobile phone components and assembly business focused on high-value-added products and new AI data center segments Business Revenue Composition for H1 2025 | Business Segment | Revenue (RMB million) | YoY Growth Rate | % of Total Revenue | | :--- | :--- | :--- | :--- | | Automobiles, related products, and other products | 302,506 | 32.49% | 81.48% | | Mobile phone components, assembly, and other products | 68,744 | -5.54% | 18.51% | | **Total Revenue** | **371,281** | **23.30%** | **100%** | - R&D investment approximately **RMB 30,880 million**, an increase of **53.05%** YoY[44](index=44&type=chunk)[46](index=46&type=chunk) - Net profit attributable to listed company shareholders approximately **RMB 15,510 million**, an increase of **13.79%** YoY[44](index=44&type=chunk)[46](index=46&type=chunk) - Group completed a **USD 5.6 billion** H-share block placement, the largest ever in the global automotive industry[48](index=48&type=chunk)[49](index=49&type=chunk) - Approved "2025 Employee Stock Ownership Plan" involving no more than **25,000 employees**, with a total fund not exceeding **RMB 4.1 billion**[48](index=48&type=chunk)[49](index=49&type=chunk) - Included in Hang Seng Tech Index as a constituent stock, with a weighting of **8%**[48](index=48&type=chunk)[49](index=49&type=chunk) [2.1 Automobiles and Batteries Business](index=15&type=section&id=2.1%20Automobiles%20and%20Batteries%20Business) In H1 2025, BYD's NEV sales increased by over 33.0% YoY, with market share growing to 13.7%, maintaining top sales in China and globally. The Group achieved breakthroughs in electrification and intelligence through its "Super e-platform" and "Intelligent Driving for All" strategy. A multi-brand strategy (BYD, Fang Cheng Bao, Denza, Yangwang) covers diverse markets, with multiple new models launched. Overseas sales increased by 1.3 times YoY, accelerating localization and becoming a new growth engine. In rechargeable battery and energy storage businesses, the Group maintains technological leadership and continues to expand in international markets - NEV sales increased by over **33.0%** YoY, with automotive market share increasing by **2.2 percentage points** to **13.7%**[50](index=50&type=chunk)[51](index=51&type=chunk) - Ranked second in H1 vehicle exports, and fastest growing among top ten vehicle exporters, with a **1.3-fold** increase YoY[50](index=50&type=chunk)[51](index=51&type=chunk) - Launched the world's first mass-produced passenger vehicle full-domain kilovolt high-voltage architecture – "Super e-platform", with comprehensive upgrades to core three-electric systems, introducing **10C** fast-charging "Flash Battery", the world's first mass-produced **30,000 rpm** motor, and a new generation automotive-grade silicon carbide power chip[53](index=53&type=chunk)[55](index=55&type=chunk) - Launched "Intelligent Driving for All" strategy, with all models to feature advanced intelligent driving technology, bringing advanced intelligent driving to models under **RMB 100,000**[56](index=56&type=chunk)[58](index=58&type=chunk) - As of end of May 2025, cumulative sales of intelligent driving models exceeded **710,000** units, generating over **44 million kilometers** of intelligent driving data daily[56](index=56&type=chunk)[58](index=58&type=chunk) - Deepened multi-brand strategy comprising "BYD", "Fang Cheng Bao", "Denza", and "Yangwang"[57](index=57&type=chunk)[59](index=59&type=chunk) - Overseas sales increased by **1.3 times** YoY, with products distributed across **6 continents** and over **110 countries and regions** globally[96](index=96&type=chunk)[98](index=98&type=chunk) - Laid foundation for passenger vehicle factory in Sihanoukville, Cambodia, established European headquarters in Budapest, Hungary, and signed cooperation agreement with Voestalpine Group[99](index=99&type=chunk)[101](index=101&type=chunk) - Cumulative number of roll-on/roll-off vessels in operation reached six, injecting new momentum into globalization[99](index=99&type=chunk)[101](index=101&type=chunk) - NEV bus exports continued to rank first in the industry in H1[100](index=100&type=chunk)[102](index=102&type=chunk) - Partnered with Xiaoju Charging and Xindiantu to jointly build **10,000** and **5,000** megawatt flash charging stations respectively, promoting the popularization of megawatt flash charging ecosystem[104](index=104&type=chunk)[107](index=107&type=chunk) - Actively focusing on embodied AI robotics, strategically planning for future industries[105](index=105&type=chunk)[107](index=107&type=chunk) [2.2 Handset Components and Assembly Business](index=29&type=section&id=2.2%20Handset%20Components%20and%20Assembly%20Business) As a high-tech innovation product provider, the Group continues to focus on high-value-added consumer electronics, consolidating its leading position in the high-end market, and actively seizing AI development opportunities to accelerate its layout in new segments like AI data centers, achieving leapfrog business growth - Continued focus on high-value-added product areas, consolidating and expanding its leading position in the high-end market, covering core product lines such as titanium alloy phones, other metal phones, and foldable phones[109](index=109&type=chunk)[111](index=111&type=chunk) - In overseas major client business, complete machine assembly business share continued to increase, driving YoY growth in shipments and revenue[109](index=109&type=chunk)[111](index=111&type=chunk) - Actively embracing AI development opportunities, accelerating layout in new segments like AI data centers, achieving leapfrog growth in AI data center business[110](index=110&type=chunk)[112](index=112&type=chunk) - Large shipments of AI servers, with data center liquid cooling and power products certified by industry leading enterprises, injecting new momentum into business growth[110](index=110&type=chunk)[112](index=112&type=chunk) [3. PROSPECT AND STRATEGY](index=30&type=section&id=3.%20PROSPECT%20AND%20STRATEGY) Looking ahead to H2 2025, BYD will continue to strengthen independent and controllable core technologies, enhance product competitiveness, accelerate overseas expansion, and deepen its multi-brand matrix construction. It will continue to invest in electrification and intelligence, driving industry transformation. The mobile phone components and assembly business will seize AI development opportunities, expand into new businesses like AI data centers, and achieve sustainable development - In H2 2025, China's economy shows significant resilience and long-term positive trends, with the government continuing to strengthen macro policies[113](index=113&type=chunk)[114](index=114&type=chunk) - NEV passenger vehicle penetration rate is expected to continue to rise, with trade-in policies and national subsidies remaining in effect[113](index=113&type=chunk)[114](index=114&type=chunk) - 2025 will be the "Year of Intelligent Driving" in China, with intelligence becoming the most important competitive factor in the automotive industry[113](index=113&type=chunk)[114](index=114&type=chunk) - Group will continue to strengthen technological investment in NEV sector, focusing on deepening and integrating core technologies in electrification and intelligence[116](index=116&type=chunk)[118](index=118&type=chunk) - "Fifth-generation DM technology" further evolved, with fuel consumption at low battery charge setting a new global low of **2.6L per 100 km**[116](index=116&type=chunk)[118](index=118&type=chunk) - Continued advancement of "Eye of God" upgrade, covering parking, driving, and safety, with a commitment to fully cover safety and losses in intelligent parking scenarios[116](index=116&type=chunk)[118](index=118&type=chunk) - Accelerated pace of automotive business going global, with overseas business becoming a new core growth pole and a shining example of Chinese NEVs going global[120](index=120&type=chunk)[123](index=123&type=chunk) - Mobile phone components and assembly business will continue to deepen core technology R&D and enhance high-end manufacturing innovation capabilities, expanding into new businesses like AI data centers[126](index=126&type=chunk)[129](index=129&type=chunk) [3.1 Automobiles and Batteries Business](index=31&type=section&id=3.1%20Automobiles%20and%20Batteries%20Business) In H2 2025, BYD will continue to strengthen independent and controllable core technologies, enhance product competitiveness, accelerate overseas expansion, and deepen its multi-brand matrix construction. In electrification, DM 5.0 technology will further evolve, setting new lows for fuel consumption at low battery charge; in intelligence, "Eye of God" will continue to upgrade, providing comprehensive coverage for intelligent parking safety and losses. The Group will actively expand overseas markets, improve global supply chains and self-owned shipping capacity, and deepen development in NEV-related fields, including rechargeable batteries and photovoltaic business - Group's **13 millionth** NEV rolled off the production line, further strengthening its leading position in the global NEV market[115](index=115&type=chunk)[117](index=117&type=chunk) - "Fifth-generation DM technology" further evolved through newly developed engine AI models and three-electric system AI models, refreshing fuel consumption at low battery charge to **2.6L per 100 km**[116](index=116&type=chunk)[118](index=118&type=chunk) - "Eye of God" will continue to upgrade, covering parking, driving, and safety, and commits to fully cover safety and losses in intelligent parking scenarios[116](index=116&type=chunk)[118](index=118&type=chunk) - Actively expanding product lines, improving overseas production capacity and sales networks, building a global supply chain, and establishing self-owned shipping capacity[120](index=120&type=chunk)[123](index=123&type=chunk) - "Denza" and "Yangwang" brands will gradually be launched in overseas markets, continuously deepening the global strategic layout[120](index=120&type=chunk)[123](index=123&type=chunk) - In rechargeable batteries, will enhance independent R&D and technological innovation, accelerate application of new products and cutting-edge technologies, and deepen domestic and international client expansion[125](index=125&type=chunk)[128](index=128&type=chunk) - Photovoltaic business will focus on technological breakthroughs and product upgrades, responding to industry changes and market challenges with high-quality innovative products[125](index=125&type=chunk)[128](index=128&type=chunk) [3.2 Handset Components and Assembly Business](index=33&type=section&id=3.2%20Handset%20Components%20and%20Assembly%20Business) The Group will continue to deeply cultivate core technology R&D and high-end manufacturing innovation, strengthen vertical integration advantages, and deepen strategic cooperation with major clients. Consumer electronics business will seize opportunities in edge AI and foldable phones, focusing on high-value-added products. New intelligent product business will increase R&D investment in AI data centers, build a complete product portfolio, and actively promote cooperation with domestic and international clients to cultivate new business growth engines - Continued deep cultivation of core technology R&D and enhancement of high-end manufacturing innovation capabilities, further strengthening vertical integration barriers, and comprehensively deepening strategic cooperation with major clients[126](index=126&type=chunk)[129](index=129&type=chunk) - Consumer electronics business will seize opportunities from rapid development of edge AI technology and innovation upgrades in high-end products, focusing on high-value-added high-end products[127](index=127&type=chunk)[129](index=129&type=chunk) - New intelligent product business will continue to increase R&D investment in data centers, having built a complete portfolio of high-barrier products including AI servers, liquid cooling systems, power management, and high-speed communication[130](index=130&type=chunk)[131](index=131&type=chunk) - In H2 2025, sustained growth in computing power demand will be the main driver for rapid development of AI server business, and market demand for liquid cooling products will significantly increase[130](index=130&type=chunk)[131](index=131&type=chunk) [FINANCIAL REVIEW](index=35&type=section&id=FINANCIAL%20REVIEW) In H1 2025, the Group's revenue increased by 23.30% to RMB 371,281 million, and net profit attributable to owners increased by 13.79% to RMB 15,510 million, primarily due to growth in the NEV business. Gross profit margin slightly decreased to 18.01%. Operating cash flow significantly increased, liquidity was ample, and the capital-to-debt ratio was -28% Financial Performance for H1 2025 | Indicator | H1 2025 (RMB million) | H1 2024 (RMB million) | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | 371,281 | 301,127 | +23.30% | | Profit Attributable to Owners of the Parent | 15,510 | 13,631 | +13.79% | | Gross Profit | 66,866 | 56,552 | +18.24% | | Gross Profit Margin | 18.01% | 18.78% | -0.77 ppts | Business Revenue Proportion for H1 2025 | Business Category | H1 2025 Proportion | H1 2024 Proportion | | :--- | :--- | :--- | | Automobiles, related products, and other products | 81.48% | 75.82% | | Mobile phone components, assembly, and other products | 18.51% | 24.17% | - Net operating cash inflow approximately **RMB 31,833 million**, a significant increase from **RMB 14,178 million** in the same period last year[140](index=140&type=chunk)[144](index=144&type=chunk) - Accounts receivable turnover period approximately **33 days**, a decrease from **48 days** in the same period of 2024[141](index=141&type=chunk)[144](index=144&type=chunk) - Inventory turnover period approximately **79 days**, no significant change from the same period of 2024 (**77 days**)[141](index=141&type=chunk)[144](index=144&type=chunk) - As of June 30, 2025, capital-to-debt ratio was **-28%**, compared to **-36%** as of December 31, 2024[143](index=143&type=chunk)[145](index=145&type=chunk) - As of June 30, 2025, the Group employed approximately **885,400** employees, with total employee costs accounting for approximately **17.42%** of revenue[148](index=148&type=chunk)[153](index=153&type=chunk) [EMPLOYEE SHARE OWNERSHIP PLANS AND SHARE OPTION SCHEME](index=38&type=section&id=EMPLOYEE%20SHARE%20OWNERSHIP%20PLANS%20AND%20SHARE%20OPTION%20SCHEME) Company implemented 2022, 2024, and 2025 employee stock ownership plans to establish a profit-sharing mechanism and enhance employee cohesion and company competitiveness. The 2022 plan terminated in July 2025. The 2024 and 2025 plans involve A-share purchases with phased unlocking mechanisms. BYD Semiconductor's share option plan terminated in May 2024 - 2022 Employee Stock Ownership Plan terminated on July 18, 2025, with all A shares granted[168](index=168&type=chunk)[173](index=173&type=chunk) - 2024 Employee Stock Ownership Plan involved no more than **150** middle-level managers and core backbone employees, purchased **664,755** A shares, with a duration of **72 months** and unlocking in five batches[171](index=171&type=chunk)[172](index=172&type=chunk)[175](index=175&type=chunk)[176](index=176&type=chunk) - 2025 Employee Stock Ownership Plan involved no more than **25,000** employees, purchased **10,714,990** A shares, with a total fund not exceeding **RMB 4.1 billion**, a duration of **48 months**, and unlocking in three batches[179](index=179&type=chunk)[182](index=182&type=chunk)[183](index=183&type=chunk)[186](index=186&type=chunk)[187](index=187&type=chunk) - First unlocking period performance target for 2025 Employee Stock Ownership Plan is a revenue growth rate of not less than **10%** for the company[194](index=194&type=chunk)[195](index=195&type=chunk) - BYD Semiconductor Co., Ltd. Share Option Incentive Plan terminated on May 11, 2024, with all granted but unexercised share options cancelled[202](index=202&type=chunk)[204](index=204&type=chunk) [SHARE CAPITAL](index=49&type=section&id=SHARE%20CAPITAL) As of June 30, 2025, the company's total share capital was 3,039,065,855 shares, with A shares accounting for 59.60% and H shares for 40.40%. After the reporting period, due to the 2024 profit distribution and capital reserve capitalization plan, the total share capital increased to 9,117,197,565 shares Share Capital Structure as of June 30, 2025 | Share Class | Number of Issued Shares | Approx. Percentage (%) | | :--- | :--- | :--- | | A Shares | 1,811,265,855 | 59.60 | | H Shares | 1,227,800,000 | 40.40 | | **Total** | **3,039,065,855** | **100.00** | - After the reporting period, on July 29, 2025, due to bonus share issue and capitalization issue, the total number of issued shares increased to **9,117,197,565** shares[209](index=209&type=chunk)[210](index=210&type=chunk)[231](index=231&type=chunk)[234](index=234&type=chunk) Share Capital Structure After Reporting Period (July 29, 2025) | Share Class | Number of Issued Shares | Approx. Percentage (%) | | :--- | :--- | :--- | | A Shares | 5,433,797,565 | 59.60 | | H Shares | 3,683,400,000 | 40.40 | | **Total** | **9,117,197,565** | **100.00** | [SIGNIFICANT INVESTMENT HELD AND MATERIAL ACQUISITIONS AND DISPOSALS OF SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES](index=50&type=section&id=SIGNIFICANT%20INVESTMENT%20HELD%20AND%20MATERIAL%20ACQUISITIONS%20AND%20DISPOSALS%20OF%20SUBSIDIARIES%2C%20ASSOCIATES%20AND%20JOINT%20VENTURES) During the reporting period, the company held no significant investments and there were no material acquisitions or disposals of subsidiaries, associates, or joint ventures - During the reporting period, there were no significant investments held, nor material acquisitions or disposals of subsidiaries, associates, or joint ventures[212](index=212&type=chunk)[217](index=217&type=chunk) [CAPITAL COMMITMENT](index=50&type=section&id=CAPITAL%20COMMITMENT) As of June 30, 2025, the Group's total capital commitments were RMB 39,294,235 thousand, and investment commitments were RMB 240,391 thousand. Currently, there are no specific plans to acquire significant investments or capital assets beyond ordinary business activities Capital Commitment Status | Category | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Capital Commitments | 39,053,844 | 35,169,398 | | Investment Commitments | 240,391 | 568,455 | | **Total** | **39,294,235** | **35,737,853** | - As of the report date, other than those undertaken in the ordinary course of business, the Group currently has no specific plans to acquire any significant investments or capital assets[213](index=213&type=chunk)[218](index=218&type=chunk) [CONTINGENT LIABILITIES](index=50&type=section&id=CONTINGENT%20LIABILITIES) The Group faces a Foxconn lawsuit, with the final outcome and potential compensation obligations not reliably estimable. Additionally, the Group provided guarantees for subsidiaries, with actual guaranteed amount of RMB 35,409,098 thousand, and assumed repurchase obligations for certain customer financing, with a maximum exposure of RMB 404,782 thousand - The Foxconn lawsuit is still in litigation, and the final outcome and compensation obligations (if any) cannot be reliably estimated[397](index=397&type=chunk)[399](index=399&type=chunk) Contingent Liabilities from Guarantees Provided by the Group | Guarantee Type | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Guarantees to banks for financing granted to subsidiaries | 130,588,920 | 125,886,603 | | Actual guarantees provided for subsidiaries | 35,409,098 | 37,826,863 | - The Group's maximum exposure to customer financing repurchase obligations is **RMB 404,782 thousand**, with no payments made due to customer defaults[403](index=403&type=chunk)[404](index=404&type=chunk) [FUND RAISING AND USE OF PROCEEDS](index=50&type=section&id=FUND%20RAISING%20AND%20USE%20OF%20PROCEEDS) During the reporting period, the company completed an H-share placement in March 2025, raising net proceeds of approximately RMB 40,075 million. The proceeds were primarily used for R&D investment and general corporate purposes, overseas business expansion, and working capital, with RMB 10,769 million for overseas business expansion remaining unutilized - A placement agreement was entered into on March 3, 2025, for **129,800,000** new H shares at a price of **HKD 335.2** per share[215](index=215&type=chunk)[216](index=216&type=chunk)[220](index=220&type=chunk) - Net proceeds from the placement were approximately **HKD 43,383 million** (approximately **RMB 40,075 million**)[222](index=222&type=chunk)[223](index=223&type=chunk) Use of Net Proceeds (as of June 30, 2025) | Use | Approx. Net Proceeds Utilized (RMB million) | Approx. Net Proceeds Unutilized (RMB million) | Expected Timeline for Utilizing Remaining Net Proceeds | | :--- | :--- | :--- | :--- | | R&D investment and general corporate purposes | 13,178 | – | Not applicable | | Overseas business expansion of the Group | 8,928 | 10,769 | Before December 31, 2025 | | Working capital | 7,200 | – | Not applicable | [2024 PROFIT DISTRIBUTION PLAN AND CAPITAL RESERVE CAPITALIZATION PLAN](index=52&type=section&id=2024%20PROFIT%20DISTRIBUTION%20PLAN%20AND%20CAPITAL%20RESERVE%20CAPITALIZATION%20PLAN) The company's Board of Directors approved on April 22, 2025, and shareholders approved on June 6, 2025, the 2024 profit distribution and capital reserve capitalization plan, including a cash dividend of RMB 39.74 per 10 shares, a bonus share issue of 8 shares per 10 shares, and a capitalization issue of 12 shares per 10 shares, totaling 6,078,131,710 new shares - Plan approved by the Board on April 22, 2025, and by the Annual General Meeting on June 6, 2025[228](index=228&type=chunk)[230](index=230&type=chunk)[231](index=231&type=chunk)[234](index=234&type=chunk) - Cash dividend of **RMB 39.74** (tax inclusive) per ten (10) shares to all shareholders, totaling approximately **RMB 12,077,248 thousand**[230](index=230&type=chunk)[236](index=236&type=chunk) - Bonus share issue on the basis of eight (8) bonus shares for every ten (10) issued shares held, totaling **2,431,252,684** new shares[230](index=230&type=chunk)[236](index=236&type=chunk) - Capitalization issue on the basis of twelve (12) capitalization shares for every ten (10) issued shares held, totaling **3,646,879,026** new shares[230](index=230&type=chunk)[236](index=236&type=chunk) - Immediately after the bonus share issue and capitalization issue, the total number of issued shares of the company increased to **9,117,197,565** shares[231](index=231&type=chunk)[234](index=234&type=chunk) [EVENTS AFTER THE BALANCE SHEET DATE](index=53&type=section&id=EVENTS%20AFTER%20THE%20BALANCE%20SHEET%20DATE) In addition to the 2024 profit distribution and capital reserve capitalization plan, the company successfully issued two tranches of technology innovation bonds in July and August 2025, each totaling RMB 5,000,000 thousand - On July 30, 2025, the company successfully issued the third tranche of 2025 technology innovation bonds, totaling **RMB 5,000,000 thousand**, with a term of **183 days** and an interest rate of **1.48%**[455](index=455&type=chunk)[459](index=459&type=chunk) - On August 25, 2025, the company successfully issued the fourth tranche of 2025 technology innovation bonds, totaling **RMB 5,000,000 thousand**, with a term of **3 years** and an interest rate of **1.82%**[456](index=456&type=chunk)[459](index=459&type=chunk) [CORPORATE GOVERNANCE](index=54&type=section&id=CORPORATE%20GOVERNANCE) The company's Board of Directors is committed to maintaining high standards of corporate governance, complying with all code provisions and most recommended best practices in Appendix C1 of the Listing Rules, except for C.2.1 (merger of Chairman and CEO roles) and C.1.5 (some directors not attending EGM). The Board has adopted a diversity policy and regularly reviews its effectiveness. The Audit Committee has reviewed the interim results, and the Board does not recommend an interim dividend - Company has implemented corporate governance practices, complying with all code provisions and most recommended best practices in Appendix C1 of the Listing Rules, with deviations from code provisions C.2.1 and C.1.5[238](index=238&type=chunk)[242](index=242&type=chunk) - Mr. Wang Chuanfu serves as both Chairman and CEO, a structure the Board believes contributes to robust and consistent leadership[240](index=240&type=chunk)[243](index=243&type=chunk) - Some non-executive and independent non-executive directors did not attend the EGM held on April 15, 2025, due to other commitments[241](index=241&type=chunk)[244](index=244&type=chunk) - Board has adopted a diversity policy, with selection based on diverse perspectives including gender, age, cultural and educational background, professional experience, skills, knowledge, and length of service[252](index=252&type=chunk)[253](index=253&type=chunk)[256](index=256&type=chunk) - One of the Board's measurable objectives is to include at least one female director, and currently there is one female director[254](index=254&type=chunk)[257](index=257&type=chunk) - Audit Committee has reviewed the Group's unaudited results for the six months ended June 30, 2025[259](index=259&type=chunk)[263](index=263&type=chunk) - Board does not recommend payment of an interim dividend for the six months ended June 30, 2025[260](index=260&type=chunk)[264](index=264&type=chunk) [DIRECTORS', SUPERVISORS' AND CHIEF EXECUTIVES' INTERESTS](index=57&type=section&id=DIRECTORS%27%2C%20SUPERVISORS%27%20AND%20CHIEF%20EXECUTIVES%27%20INTERESTS) As of June 30, 2025, the company's directors, supervisors, and chief executives held interests in the company's A and H shares. Mr. Wang Chuanfu held 513,623,850 A shares and 1,000,000 H shares. Mr. Lu Xiangyang held 394,378,222 A shares (including those held through Rongjie Investment). Mr. Xia Zuoquan held 82,635,607 A shares and 500,000 H shares A Shareholdings of Directors, Supervisors, and Chief Executives (as of June 30, 2025) | Name | Number of A Shares | Approx. % of Total Issued A Shares | Approx. % of Total Issued Share Capital | | :--- | :--- | :--- | :--- | | Wang Chuanfu (Director & President) | 513,623,850 (L) | 28.36 | 16.90 | | Lu Xiangyang (Director) | 394,378,222 (L) | 21.77 | 12.98 | | Xia Zuoquan (Director) | 82,635,607 (L) | 4.56 | 2.72 | | Zhu Aiyun (Supervisor) | 615,965 (L) | 0.03 | 0.02 | H Shareholdings of Directors, Supervisors, and Chief Executives (as of June 30, 2025) | Name | Number of H Shares | Approx. % of Total Issued H Shares | Approx. % of Total Issued Share Capital | | :--- | :--- | :--- | :--- | | Wang Chuanfu (Director & President) | 1,000,000 (L) | 0.08 | 0.03 | | Xia Zuoquan (Director) | 500,000 (L) | 0.04 | 0.02 | - Mr. Lu Xiangyang is deemed to have an interest in **155,149,602** A shares held by Rongjie Investment Holding Group Co., Ltd[268](index=268&type=chunk)[273](index=273&type=chunk) - Of the **500,000** H shares held by Mr. Xia Zuoquan, **305,000** shares are held by Sign Investments Limited, a wholly-owned company[270](index=270&type=chunk)[272](index=272&type=chunk) [SHAREHOLDERS WITH NOTIFIABLE INTERESTS](index=59&type=section&id=SHAREHOLDERS%20WITH%20NOTIFIABLE%20INTERESTS) As of June 30, 2025, in addition to directors, supervisors, and chief executives, Rongjie Investment Holding Group Co., Ltd. and BlackRock, Inc. held notifiable interests. Rongjie Investment held 155,149,602 A shares, while BlackRock, Inc. held 229,584,635 H shares long position and 1,259,505 H shares short position A Shareholdings of Shareholders with Notifiable Interests (as of June 30, 2025) | Name | Number of A Shares | Approx. % of Total Issued A Shares | Approx. % of Total Issued Share Capital | | :--- | :--- | :--- | :--- | | Rongjie Investment (Note) | 155,149,602 (L) | 8.57 | 5.11 | H Shareholdings of Shareholders with Notifiable Interests (as of June 30, 2025) | Name | Number of H Shares | Approx. % of Total Issued H Shares | Approx. % of Total Issued Share Capital | | :--- | :--- | :--- | :--- | | BlackRock, Inc. (Note) | 229,584,635 (L) | 6.23 | 2.51 | | | 1,259,505 (S) | 0.03 | 0.01 | - BlackRock, Inc.'s H share interests have been adjusted to account for the bonus share issue and capitalization issue under the 2024 profit distribution and capital reserve capitalization plan[279](index=279&type=chunk)[281](index=281&type=chunk) [Consolidated Balance Sheet](index=61&type=section&id=Consolidated%20Balance%20Sheet) As of June 30, 2025, the Group's total assets were RMB 846,342,643 thousand, total liabilities were RMB 601,592,451 thousand, and total equity attributable to owners of the parent was RMB 232,166,363 thousand. Current assets primarily included cash and cash equivalents and inventories, while current liabilities mainly comprised trade payables and contract liabilities Summary of Consolidated Balance Sheet (as of June 30, 2025) | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Total Assets | 846,342,643 | 783,355,855 | | Total Current Assets | 390,635,460 | 370,572,244 | | Total Non-current Assets | 455,707,183 | 412,783,611 | | Total Liabilities | 601,592,451 | 584,667,646 | | Total Current Liabilities | 513,355,792 | 495,985,176 | | Total Non-current Liabilities | 88,236,659 | 88,682,470 | | Total Equity Attributable to Owners of the Parent | 232,166,363 | 185,251,104 | | Non-controlling Interests | 12,583,829 | 13,437,105 | | Total Equity | 244,750,192 | 198,688,209 | - Cash and cash equivalents were **RMB 111,734,283 thousand**, and financial assets held for trading were **RMB 35,694,505 thousand**[283](index=283&type=chunk) - Inventories were **RMB 140,839,351 thousand**, and property, plant and equipment were **RMB 280,794,676 thousand**[283](index=283&type=chunk) - Trade payables were **RMB 235,214,038 thousand**, and contract liabilities were **RMB 48,908,232 thousand**[284](index=284&type=chunk) [Consolidated Income Statement](index=64&type=section&id=Consolidated%20Income%20Statement) For the six months ended June 30, 2025, the Group achieved operating revenue of RMB 371,280,948 thousand, a 23.30% increase YoY. Net profit was RMB 16,038,939 thousand, with net profit attributable to owners of the parent being RMB 15,510,533 thousand. Basic earnings per share were RMB 1.71 Summary of Consolidated Income Statement (for the six months ended June 30, 2025) | Item | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Operating Revenue | 371,280,948 | 301,126,713 | | Operating Costs | 304,415,089 | 244,577,008 | | Operating Profit | 18,719,509 | 17,323,276 | | Total Profit | 18,910,015 | 17,228,138 | | Income Tax Expense | 2,871,076 | 3,114,922 | | Net Profit | 16,038,939 | 14,113,216 | | Net Profit Attributable to Owners of the Parent | 15,510,533 | 13,631,257 | | Basic Earnings Per Share (RMB/share) | 1.71 | 1.56 | | Diluted Earnings Per Share (RMB/share) | 1.71 | 1.56 | - R&D expenses were **RMB 29,596,366 thousand**, a significant increase from **RMB 19,620,756 thousand** in the same period last year[288](index=288&type=chunk) - Finance expenses were negative **RMB 3,247,033 thousand**, compared to positive **RMB 69,006 thousand** in the same period last year, primarily affected by interest income and exchange gains/losses[288](index=288&type=chunk) [Consolidated Statement of Changes in Owners' Equity](index=67&type=section&id=Consolidated%20Statement%20of%20Changes%20in%20Owners%27%20Equity) For the six months ended June 30, 2025, total equity attributable to owners of the parent increased from RMB 185,251,104 thousand at the beginning of the period to RMB 232,166,363 thousand at the end of the period, primarily due to increases in share capital, capital reserve, and other equity instruments Summary of Changes in Equity Attributable to Owners of the Parent (for the six months ended June 30, 2025) | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Share Capital | 3,039,066 | 2,909,266 | | Other Equity Instruments | 21,713,195 | 14,894,442 | | Capital Reserve | 100,425,189 | 60,679,406 | | Less: Treasury Stock | 4,712,239 | 723,968 | | Other Comprehensive Income | 2,291,262 | 1,440,616 | | Surplus Reserve | 7,374,087 | 7,374,087 | | Retained Earnings | 102,004,934 | 98,647,794 | | **Total Equity Attributable to Owners of the Parent** | **232,166,363** | **185,251,104** | - Share capital increased by **RMB 129,800 thousand** during the period, primarily due to the completion of the additional issuance of overseas listed foreign shares in March 2025[374](index=374&type=chunk) - Capital reserve increased by **RMB 39,944,968 thousand**, mainly from the H-share additional issuance[374](index=374&type=chunk) - Other equity instruments increased by **RMB 16,748,087 thousand**[295](index=295&type=chunk) [Consolidated Cash Flow Statement](index=69&type=section&id=Consolidated%20Cash%20Flow%20Statement) For the six months ended June 30, 2025, net cash flow from operating activities was RMB 31,833,471 thousand, net cash flow used in investing activities was RMB 74,495,747 thousand, and net cash flow from financing activities was RMB 49,657,739 thousand. Cash and cash equivalents at the end of the period totaled RMB 109,716,780 thousand Summary of Consolidated Cash Flow Statement (for the six months ended June 30, 2025) | Item | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | 31,833,471 | 14,178,310 | | Net Cash Flow Used in Investing Activities | (74,495,747) | (55,874,075) | | Net Cash Flow from Financing Activities | 49,657,739 | (12,358,424) | | Effect of Exchange Rate Changes on Cash and Cash Equivalents | 464,775 | (230,984) | | Net Increase (Decrease) in Cash and Cash Equivalents | 7,460,238 | (54,285,173) | | Cash and Cash Equivalents at End of Period | 109,716,780 | 54,226,572 | - Cash received from sales of goods and rendering of services was **RMB 402,581,644 thousand**, a significant increase from **RMB 297,083,766 thousand** in the same period last year[300](index=300&type=chunk) - Cash paid for acquisition of property, plant and equipment, intangible assets, and other long-term assets was **RMB 80,524,516 thousand**, a significant increase from **RMB 47,225,661 thousand** in the same period last year[302](index=302&type=chunk) - Cash received from investments was **RMB 40,221,768 thousand**, compared to **RMB 98,000 thousand** in the same period last year, primarily due to capital injection[304](index=304&type=chunk) [Notes to Financial Statements](index=72&type=section&id=Notes%20to%20Financial%20Statements) [1. CORPORATE INFORMATION](index=72&type=section&id=1.%20CORPORATE%20INFORMATION) BYD Company Limited is a joint stock company registered in the People's Republic of China, with its H shares listed on the Hong Kong Stock Exchange since July 31, 2002. Its registered office is located in Kuaichong Town, Dapeng New District, Shenzhen, Guangdong Province, China - BYD Company Limited is a joint stock company registered in the People's Republic of China[305](index=305&type=chunk)[308](index=308&type=chunk) - H shares have been listed on The Stock Exchange of Hong Kong Limited since July 31, 2002[305](index=305&type=chunk)[308](index=308&type=chunk) [2. BASIS OF PREPARATION](index=72&type=section&id=2.%20BASIS%20OF%20PREPARATION) The financial statements are prepared in accordance with Accounting Standards for Business Enterprises issued by the Ministry of Finance and presented on a going concern basis. Despite net current liabilities of RMB 122,720,332 thousand as of June 30, 2025, management believes the Group has sufficient liquidity and financial credit lines to continue as a going concern - Financial statements are prepared in accordance with Accounting Standards for Business Enterprises issued by the Ministry of Finance[306](index=306&type=chunk)[309](index=309&type=chunk) - Financial statements are presented on a going concern basis[307](index=307&type=chunk)[309](index=309&type=chunk) - As of June 30, 2025, the Group's net current liabilities were **RMB 122,720,332 thousand**[307](index=307&type=chunk)[309](index=309&type=chunk) - Management believes the Group has sufficient liquidity and financial credit lines to continue as a going concern[307](index=307&type=chunk)[309](index=309&type=chunk) [3. SEGMENT REPORTING](index=73&type=section&id=3.%20SEGMENT%20REPORTING) The Group is divided into mobile phone components, assembly, and other products segment, and automobiles, automotive-related products, and other products segment. In H1 2025, external transaction revenue from automotive business was RMB 302,506,271 thousand, and from mobile phone components business was RMB 68,743,903 thousand. Overseas operating revenue was RMB 135,357,667 thousand. A single major customer contributed RMB 42,142,580 thousand in operating revenue - Group primarily consists of mobile phone components, assembly, and other products segment, and automobiles, automotive-related products, and other products segment[310](index=310&type=chunk)[313](index=313&type=chunk) Segment External Transaction Revenue for H1 2025 | Segment | External Transaction Revenue (RMB thousand) | | :--- | :--- | | Mobile phone components, assembly, and other products | 68,743,903 | | Automobiles, related products, and other products | 302,506,271 | | **Total** | **371,280,948** | Geographical Distribution of Operating Revenue for H1 2025 | Region | Operating Revenue (RMB thousand) | | :--- | :--- | | China (including Hong Kong, Macau, and Taiwan) | 235,923,281 | | Overseas | 135,357,667 | | **Total** | **371,280,948** | - For the six months ended June 30, 2025, operating revenue of **RMB 42,142,580 thousand** was from a single customer[323](index=323&type=chunk)[325](index=325&type=chunk) [4. REVENUE AND COST OF OPERATING](index=77&type=section&id=4.%20REVENUE%20AND%20COST%20OF%20OPERATING) In H1 2025, the Group's main business revenue was RMB 362,287,018 thousand, and main business cost was RMB 297,763,090 thousand. Revenue breakdown shows China contributed RMB 235,823,467 thousand and overseas contributed RMB 135,324,865 thousand. Most revenue is recognized at a point in time Operating Revenue and Operating Costs for H1 2025 | Item | Revenue (RMB thousand) | Cost (RMB thousand) | | :--- | :--- | :--- | | Main Business Revenue | 362,287,018 | 297,763,090 | | Other Business Revenue | 8,993,930 | 6,651,999 | | **Total** | **371,280,948** | **304,415,089** | Geographical Breakdown of Revenue from Contracts with Customers for H1 2025 | Operating Region | Mobile Phone Components, Assembly, and Other Products (RMB thousand) | Automobiles, Related Products, and Other Products (RMB thousand) | Other (RMB thousand) | Total (RMB thousand) | | :--- | :--- | :--- | :--- | :--- | | China (including Hong Kong, Macau, and Taiwan) | 16,489,271 | 219,304,004 | 30,192 | 235,823,467 | | Overseas | 52,230,977 | 83,093,888 | – | 135,324,865 | | **Total** | **68,720,248** | **302,397,892** | **30,192** | **371,148,332** | - Most revenue from transfer of goods is recognized at a point in time, totaling **RMB 369,878,044 thousand**[332](index=332&type=chunk) - Major contracted performance obligations that are unfulfilled or partially unfulfilled are expected to be recognized as revenue within **1 year**[339](index=339&type=chunk) [5. INCOME TAX EXPENSES](index=83&type=section&id=5.%20INCOME%20TAX%20EXPENSES) In H1 2025, income tax expense was RMB 2,871,076 thousand, a decrease from RMB 3,114,922 thousand in the same period last year. The difference between income tax expense and total profit was mainly affected by different tax rates applicable to subsidiaries and deductible temporary differences for which deferred tax assets were not recognized Composition of Income Tax Expense (for the six months ended June 30, 2025) | Item | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Current Income Tax Expense | 5,499,947 | 3,911,959 | | Deferred Income Tax Expense | (2,628,871) | (797,037) | | **Total** | **2,871,076** | **3,114,922** | - The difference between income tax expense and total profit was mainly affected by different tax rates applicable to subsidiaries (reducing by **RMB 1,689,614 thousand**) and deductible temporary differences for which deferred tax assets were not recognized (increasing by **RMB 3,171,715 thousand**)[344](index=344&type=chunk) - R&D expenses and other tax-deductible items reduced income tax expense by **RMB 2,654,288 thousand**[344](index=344&type=chunk) [6. EARNINGS PER SHARE](index=85&type=section&id=6.%20EARNINGS%20PER%20SHARE) In H1 2025, basic and diluted earnings per share were both RMB 1.71, an increase from RMB 1.56 in the same period last year. The calculation of earnings per share has been adjusted for the bonus share issue and capitalization issue that occurred after the reporting period Earnings Per Share (for the six months ended June 30, 2025) | Item | H1 2025 (RMB/share) | H1 2024 (RMB/share) | | :--- | :--- | :--- | | Basic Earnings Per Share | 1.71 | 1.56 | | Diluted Earnings Per Share | 1.71 | 1.56 | - Net profit attributable to ordinary shareholders of the company for the current period was **RMB 15,510,533 thousand**[348](index=348&type=chunk) - The weighted average number of shares has been adjusted for the bonus share issue and capitalization issue that occurred in July 2025, resulting in **9,117,197,565** ordinary shares[348](index=348&type=chunk) [7. TRADE RECEIVABLES](index=87&type=section&id=7.%20TRADE%20RECEIVABLES) As of June 30, 2025, total trade receivables were RMB 47,581,730 thousand, with the majority (83.70%) aged within 1 year. Total allowance for doubtful accounts was RMB 4,200,188 thousand. The top five trade receivables and contract assets totaled RMB 12,422,984 thousand Aging Analysis of Trade Receivables (as of June 30, 2025) | Aging | Amount (RMB thousand) | Proportion (%) | | :--- | :--- | :--- | | Within 1 year | 39,827,889 | 83.70 | | 1 to 2 years | 2,763,299 | 5.81 | | 2 to 3 years | 1,308,214 | 2.75 | | Over 3 years | 3,682,328 | 7.74 | | **Total** | **47,581,730** | **100.00** | Allowance for Doubtful Accounts for Trade Receivables (as of June 30, 2025) | Type of Allowance | Amount (RMB thousand) | Provision Rate (%) | | :--- | :--- | :--- | | Individually assessed allowance | 986,410 | 100.00 | | Collectively assessed allowance based on credit risk characteristics | 3,213,778 | 6.90 | | **Total** | **4,200,188** | | - The top five trade receivables and contract assets totaled **RMB 12,422,984 thousand**, accounting for **25.16%** of the total balance of trade receivables and contract assets at period-end[362](index=362&type=chunk)[363](index=363&type=chunk) [8. BILLS PAYABLES](index=91&type=section&id=8.%20BILLS%20PAYABLES) As of June 30, 2025, total bills payables were RMB 1,471,593 thousand, primarily comprising commercial acceptance bills and bank acceptance bills. At period-end, RMB 7,103 thousand of bills payables were overdue Composition of Bills Payables (as of June 30, 2025) | Bill Type | Amount (RMB thousand) | | :--- | :--- | | Commercial Acceptance Bills | 845,703 | | Bank Acceptance Bills | 625,890 | | **Total** | **1,471,593** | - As of June 30, 2025, the Group had overdue bills payables totaling **RMB 7,103 thousand**, due to holders not initiating collection at maturity[366](index=366&type=chunk) [9. TRADE PAYABLES](index=92&type=section&id=9.%20TRADE%20PAYABLES) As of June 30, 2025, total trade payables were RMB 235,214,038 thousand, with the vast majority (RMB 233,687,932 thousand) aged within 1 year. Trade payables are non-interest bearing and typically settled within one year Aging Analysis of Trade Payables (as of June 30, 2025) | Aging | Amount (RMB thousand) | | :--- | :--- | | Within 1 year | 233,687,932 | | 1 to 2 years | 917,485 | | 2 to 3 years | 227,064 | | Over 3 years | 381,557 | | **Total** | **235,214,038** | - Trade payables are non-interest bearing and typically settled within **one year**[369](index=369&type=chunk)[371](index=371&type=chunk) - As of June 30, 2025, there were no significant trade payables with an aging over **1 year**[370](index=370&type=chunk)[371](index=371&type=chunk) [10. SHARE CAPITAL](index=92&type=section&id=10.%20SHARE%20CAPITAL) As of June 30, 2025, the company's registered and paid-up share capital was RMB 3,039,066 thousand. During the period, share capital increased by RMB 129,800 thousand, and share premium increased by RMB 39,944,968 thousand, primarily due to the completion of the additional issuance of overseas listed foreign shares in March 2025 Registered and Paid-up Share Capital (as of June 30, 2025) | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Registered and Paid-up Share Capital | 3,039,066 | 2,909,266 | - The company completed an additional issuance of **129,800 thousand** overseas listed foreign shares in March 2025, with a par value of **RMB 1** per share, leading to an increase in share capital of **RMB 129,800 thousand** and an increase in share premium of **RMB 39,944,968 thousand** during the period[374](index=374&type=chunk) [11. SHARE-BASED PAYMENTS](index=93&type=section&id=11.%20SHARE-BASED%20PAYMENTS) The company implemented 2022 and 2025 employee stock ownership plans, and its subsidiary BYD Electronic implemented the 2025 share award scheme. The 2022 plan granted 5,511,024 A shares. The 2025 plan purchased 10,714,990 A shares, totaling no more than RMB 4.1 billion. BYD Electronic's share award scheme is expected to involve no more than 3,000 participants, with a total fund not exceeding RMB 250 million. All plans have phased unlocking mechanisms linked to company and individual performance assessments - 2022 Employee Stock Ownership Plan granted **5,511,024** A shares at a subscription price of **RMB 0** per share, with no capital contribution required from participants[375](index=375&type=chunk)[376](index=376&type=chunk) - 2025 Employee Stock Ownership Plan cumulatively purchased **10,714,990** A shares through secondary market centralized bidding transactions, with an average transaction price of approximately **RMB 372.18** per share, and a transaction amount of **RMB 3,987,912,042.01**[379](index=379&type=chunk)[380](index=380&type=chunk) - Shares held under the 2025 Employee Stock Ownership Plan are unlocked in three tranches, with unlocking ratios of **30%**, **30%**, and **40%** respectively, determined by company and individual performance assessments[382](index=382&type=chunk)[384](index=384&type=chunk) - BYD Electronic's 2025 Share Award Scheme is expected to involve no more than **3,000** participants, with a total fund not exceeding **RMB 250 million**[387](index=387&type=chunk)[388](index=388&type=chunk)[390](index=390&type=chunk)[391](index=391&type=chunk) Share-based Payment Expenses for H1 2025 | Personnel Category | Equity-settled Share-based Payment Expenses (RMB thousand) | | :--- | :--- | | R&D personnel | 174,656 | | Management personnel | 110,756 | | Sales personnel | 37,025 | | Manufacturing and other personnel | 69,642 | | **Total** | **392,079** | [12. CONTINGENT EVENTS](index=98&type=section&id=12.%20CONTINGENT%20EVENTS) The Group faces a Foxconn lawsuit, with the final outcome and potential compensation obligations not reliably estimable. Additionally, the Group provided guarantees for subsidiaries, with actual guaranteed amount of RMB 35,409,098 thousand as of June 30, 2025. The Group also assumed repurchase obligations for certain customer financing, with a maximum exposure of RMB 404,782 thousand - The Foxconn lawsuit is still in litigation, and the Board believes the final outcome and compensation obligations (if any) cannot be reliably estimated[397](index=397&type=chunk)[399](index=399&type=chunk) Contingent Liabilities from Guarantees Provided by the Group (as of June 30, 2025) | Guarantee Type | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Guarantees to banks for financing granted to subsidiaries | 130,588,920 | 125,886,603 | | Actual guarantees provided for subsidiaries | 35,409,098 | 37,826,863 | - The Group's maximum exposure to customer financing repurchase obligations is **RMB 404,782 thousand**, and no payments have been made due to customer defaults[403](index=403&type=chunk)[404](index=404&type=chunk) [13. COMMITMENTS](index=100&type=section&id=13.%20COMMITMENTS) As of June 30, 2025, the Group's total capital commitments were RMB 39,053,844 thousand, and investment commitments were RMB 240,391 thousand. Currently, there are no specific plans to acquire significant investments or capital assets beyond ordinary business activities Commitments (as of June 30, 2025) | Category | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Capital Commitments | 39,053,844 | 35,169,398 | | Investment Commitments | 240,391 | 568,455 | | **Total** | **39,294,235** | **35,737,853** | - As of the report date, other than those undertaken in the ordinary course of business, the Group currently has no specific plans to acquire any significant investments or capital assets[213](index=213&type=chunk)[218](index=218&type=chunk) [14. RELATED PARTIES TRANSACTIONS](index=100&type=section&id=14.%20RELATED%20PARTIES%20TRANSACTIONS) In H1 2025, the Group engaged in transactions with related parties for goods and services, with total purchases of RMB 5,755,880 thousand and total sales of RMB 884,965 thousand. Key management personnel compensation was RMB 60,405 thousand. Related party receivables totaled RMB 1,204,346 thousand, and payables totaled RMB 4,159,205 thousand. Cash and cash equivalents of RMB 27,024,363 thousand were deposited with BYD Auto Finance Co., Ltd Purchases of Goods and Acceptance of Services from Related Parties for H1 2025 | Related Party Category | Transaction Content | H1 2025 (RMB thousand) | | :--- | :--- | :--- | | Joint Ventures | Purchases of goods and acceptance of services | 233,613 | | Associates | Purchases of goods and acceptance of services | 5,465,115 | | Other Related Parties | Purchases of goods and acce

華新水泥股份有限公司 HUAXIN CEMENT CO., LTD. * （於中華人民共和國註冊成立的股份有限公司） 香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不負責，對其準確性或完 整性亦不發表任何聲明，並明確表示，概不對因本公告全部或任何部份內容而產生或因倚賴該等內 容而引致的任何損失承擔任何責任。 截至二零二五年六月三十日止半年度業績 （股份代號：6655） 華新水泥股份有限公司（「本公司」或「公司」）董事會（「董事會」）謹此公告本公司及其附屬 公司（「本集團」）根據中國企業會計準則編制的截至二零二五年六月三十日止半年度(「報告期」) 的未經審核的中期業績。除另有說明，本公告的貨幣單位為中華人民共和國(「中國」)的法定貨幣 (「人民幣」)。 1 截至二零二五年六月三十日止六個月，本集團未經審核收入為人民幣 16,047 百萬元，較二 零二四年同期減少 1.17%。 截至二零二五年六月三十日止六個月，本集團未經審核税息折舊及攤銷前利潤為人民幣 4,194 百萬元，較二零二四年同期上升 13.42%。 截至二零二五年六月三十日止六個月，本集團未經審核權益持有者應佔利潤為人民幣 1,10 ...

[Financial Performance Summary](index=1&type=section&id=Financial%20Performance%20Summary) The Group achieved significant revenue growth and successfully turned losses into profits for the six months ended June 30, 2025 [Overall Financial Performance](index=1&type=section&id=Overall%20Financial%20Performance) For the six months ended June 30, 2025, Lemon Entertainment Media Co., Ltd. achieved revenue of RMB 401 million, a year-on-year increase of 108.5%, and adjusted net profit of RMB 14 million, successfully turning losses into profits Summary of Financial Performance for H1 2025 | Indicator | 2025 (RMB Thousand) | 2024 (RMB Thousand) | | :--- | :--- | :--- | | Revenue | 401,329 | 192,529 | | Cost of Sales | (300,344) | (149,492) | | Gross Profit | 100,985 | 43,037 | | Other Income and Gains | 28,156 | 46,476 | | Selling and Distribution Expenses | (34,039) | (35,317) | | Administrative Expenses | (74,670) | (99,013) | | Other Expenses | (5,066) | (455) | | Finance Costs | (2,333) | (1,489) | | Share of Profits and (Losses) of Associates | (325) | 163 | | Profit / (Loss) Before Tax | 12,708 | (46,598) | | Income Tax Expense | (1,453) | (6,282) | | Profit / (Loss) and Total Comprehensive Income / (Expense) for the Period | 11,255 | (52,880) | | Attributable to Owners of the Parent | 10,821 | (52,572) | | Attributable to Non-Controlling Interests | 434 | (308) | | Adjusted Net Profit / (Loss) | 14,441 | (49,412) | - In H1 2025, the Group achieved operating revenue of **RMB 401 million**, a year-on-year increase of **108.5%**, and adjusted net profit of **RMB 14 million**, turning losses into profits year-on-year[5](index=5&type=chunk) [Business Review](index=3&type=section&id=Business%20Review) The Group advanced its "Super Content" strategy, developing premium long-form and short-form dramas, expanding overseas, and integrating AI technologies [Overall Business Strategy and Achievements](index=3&type=section&id=Overall%20Business%20Strategy%20and%20Achievements) In H1 2025, the Group adhered to its "Super Content Connecting New Audiences" strategic vision, focusing on premium copyrighted long-form dramas, achieving both scale and quality in short-form dramas, significantly increasing overseas distribution revenue, and deepening the application of new technologies like AI in creation and promotion - The Group adheres to its "Super Content Connecting New Audiences" strategic vision, focusing on premium copyrighted long-form dramas, pursuing both scale and quality in short-form dramas, achieving significant year-on-year growth in overseas distribution revenue, and deepening the application of new technologies like AI[5](index=5&type=chunk) [Premium Copyrighted Dramas](index=3&type=section&id=Premium%20Copyrighted%20Dramas) In the first half, the company continued to develop premium copyrighted dramas, successfully airing "A Dream of Splendor" to positive market reception, with "Midnight Return" currently airing, and multiple projects in post-production or preparation, effectively boosting production capacity - Produced and aired the copyrighted drama "A Dream of Splendor," setting a new record for the highest first-day popularity on iQiyi in 2025, with its main topic on Douyin exceeding **8 billion** views[6](index=6&type=chunk) - The copyrighted drama "Midnight Return" is currently airing on Tencent Video[6](index=6&type=chunk) - New copyrighted dramas "Moonlight Miles" and "The Play" have commenced and wrapped filming, currently in post-production; multiple projects including "A Thought of Jiangnan" and "Confrontation" are planned to start filming in H2 2025[10](index=10&type=chunk) [Short-Form Drama Business](index=5&type=section&id=Short-Form%20Drama%20Business) The short-form drama business achieved both scale and quality, with rapidly growing production capacity, launching over 3,400 minutes of short-form dramas in H1, creating multiple hit works, and generating revenue exceeding RMB 50 million through diversified commercialization models, significantly improving financial performance - In H1 2025, over **3,400 minutes** of short-form dramas were launched, a year-on-year increase of over **70%**, with current production capacity exceeding **16 titles per month**[11](index=11&type=chunk) - The short-form drama sub-brand "Hao You Ben Ling" was shortlisted as an excellent international micro-drama brand, with multiple short-form dramas achieving platform TOP1 rankings or advertising awards[11](index=11&type=chunk) - In H1, the short-form drama business generated revenue exceeding **RMB 50 million**, with significantly improved financial performance compared to FY2024[11](index=11&type=chunk) [Overseas Business](index=5&type=section&id=Overseas%20Business) Overseas business maintained diversified development, with H1 revenue exceeding RMB 33 million, approximately 2.5 times that of the same period in 2024. The drama "A Dream of Splendor" was popular on multiple overseas platforms, achieving excellent results, while the first overseas local production long-form drama "Nothing But Thirty • Bangkok Chapter" is simultaneously airing in China and Thailand, and the company is actively exploring the production and distribution of micro-dramas in minority languages - In H1 2025, the Group's overseas business revenue exceeded **RMB 33 million**, approximately **2.5 times** that of the same period in 2024[11](index=11&type=chunk) - The copyrighted drama "A Dream of Splendor" was launched on multiple leading overseas platforms including iQiyi International, WeTV, Viu, and YouTube, achieving TOP1 viewership in several countries and regions[13](index=13&type=chunk) - The first overseas local production long-form drama "Nothing But Thirty • Bangkok Chapter" is currently airing simultaneously in China and Thailand, and the company is actively exploring the production and distribution of Thai and Indonesian micro-dramas[13](index=13&type=chunk) [IP Derivative Development](index=6&type=section&id=IP%20Derivative%20Development) The Group fully promotes IP derivative development, achieving progress in merchandise, brand licensing, and content derivatives for drama IPs. Over 120 types of merchandise for "A Dream of Splendor" were launched simultaneously, with sales ranking among the top tier of dramas in 2025 - Following the broadcast of the copyrighted drama "A Dream of Splendor," over **120** types of merchandise were launched simultaneously, with sales ranking among the top tier of dramas in 2025[12](index=12&type=chunk) - Content derivatives and related products such as online novels and card games have been launched, with commercial collaborations like comic series and music gift boxes actively under development[12](index=12&type=chunk) [Employees](index=7&type=section&id=Employees) As of June 30, 2025, the Group had 185 employees, primarily in Shanghai and Beijing. The Group is committed to maintaining high recruitment standards, offering competitive compensation and benefits, providing training opportunities, and ensuring a diverse workforce, with female employees accounting for approximately 76.8% of the total - As of June 30, 2025, the Group had **185** employees, primarily located in Shanghai and Beijing[15](index=15&type=chunk) - The Group maintains high recruitment standards, provides competitive and fair compensation and benefits, and offers regular training opportunities[15](index=15&type=chunk) - As of June 30, 2025, female employees accounted for approximately **76.8%** of the Group's total workforce, maintaining gender diversity[15](index=15&type=chunk) [Financial Performance Analysis](index=8&type=section&id=Financial%20Performance%20Analysis) This section analyzes the Group's revenue, costs, gross profit, operating expenses, and net profit, highlighting key drivers of financial improvement [Revenue](index=8&type=section&id=Revenue) For the six months ended June 30, 2025, the Group's sales revenue was RMB 401.3 million, a 1.09-fold increase from the prior year, primarily due to the broadcast of key drama "A Dream of Splendor" and expansion of overseas distribution Revenue by Geographical Location | Region | 2025 (RMB Thousand) | 2024 (RMB Thousand) | | :--- | :--- | :--- | | Mainland China | 367,887 | 179,168 | | Other Countries / Regions | 33,442 | 13,361 | | Total Revenue | 401,329 | 192,529 | - Total revenue was **RMB 401.3 million**, a **1.09-fold** increase from the prior year, primarily driven by the broadcast of the key costume drama "A Dream of Splendor" and the expansion of overseas distribution business[16](index=16&type=chunk) [Cost of Sales](index=8&type=section&id=Cost%20of%20Sales) The Group's cost of sales increased by 1.01 times from RMB 149.5 million in the prior year to RMB 300.3 million, primarily related to the broadcast of dramas during the reporting period - Cost of sales increased by **1.01 times** from **RMB 149.5 million** to **RMB 300.3 million**, primarily related to the broadcast of dramas during the reporting period[17](index=17&type=chunk) [Gross Profit and Gross Margin](index=8&type=section&id=Gross%20Profit%20and%20Gross%20Margin) The Group's gross profit increased by 1.35 times to RMB 101 million, with gross margin improving by 2.8 percentage points to 25.2%, primarily influenced by drama broadcast performance Changes in Gross Profit and Gross Margin | Indicator | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | | Gross Profit (RMB Million) | 100.99 | 43.0 | Increased by 1.35 times | | Gross Margin (%) | 25.2 | 22.4 | Increased by 2.8 percentage points | [Other Income and Gains](index=9&type=section&id=Other%20Income%20and%20Gains) Other income and gains decreased by 39.4% to RMB 28.2 million, primarily due to a RMB 4.2 million reduction in exchange gains and a RMB 2.9 million decrease in interest income - Other income and gains amounted to **RMB 28.2 million**, a **39.4%** decrease from the prior year, primarily due to a **RMB 4.2 million** reduction in exchange gains and a **RMB 2.9 million** decrease in interest income[20](index=20&type=chunk) [Selling and Distribution Expenses](index=9&type=section&id=Selling%20and%20Distribution%20Expenses) Selling and distribution expenses were RMB 34.0 million, largely consistent with the prior year - Selling and distribution expenses were **RMB 34.0 million**, largely consistent with **RMB 35.3 million** in the prior year[21](index=21&type=chunk) [Administrative Expenses](index=9&type=section&id=Administrative%20Expenses) Administrative expenses decreased by 24.6% to RMB 74.7 million, primarily due to the Group's continuous strict control over various operating expenses - Administrative expenses decreased by **24.6%** from **RMB 99.0 million** to **RMB 74.7 million**, primarily due to the Group's continuous strict control over various operating expenses[22](index=22&type=chunk) [Finance Costs](index=9&type=section&id=Finance%20Costs) Finance costs increased by 56.7% to RMB 2.3 million, primarily related to interest expenses from new bank borrowings - Finance costs were **RMB 2.3 million**, an increase of **56.7%** from the prior year, primarily related to interest expenses from new bank borrowings[23](index=23&type=chunk) [Share of Profits and (Losses) of Associates](index=9&type=section&id=Share%20of%20Profits%20and%20(Losses)%20of%20Associates) The Group recognized a share of losses from associates of RMB 0.3 million, compared to a profit of RMB 0.2 million in the prior year, primarily related to its investment in Beijing Fangzhou Reading Technology Co., Ltd - A share of losses from associates of **RMB 0.3 million** was recognized, compared to a profit of **RMB 0.2 million** in the prior year, primarily related to the Group's investment in Beijing Fangzhou Reading Technology Co., Ltd[24](index=24&type=chunk) [Income Tax Expense](index=10&type=section&id=Income%20Tax%20Expense) Income tax expense decreased to RMB 1.5 million, primarily due to the utilization of deductible losses from prior years, leading to a reduction in current income tax - Income tax expense was **RMB 1.5 million**, compared to **RMB 6.3 million** in the prior year, primarily due to the utilization of deductible losses from prior years[25](index=25&type=chunk) [Profit / (Loss) for the Period](index=10&type=section&id=Profit%20%2F%20(Loss)%20for%20the%20Period) For the six months ended June 30, 2025, the Group recorded a net profit of RMB 11.3 million, successfully reversing a net loss of RMB 52.9 million in the prior year - The Group recorded a net profit of **RMB 11.3 million**, compared to a net loss of **RMB 52.9 million** in the prior year[26](index=26&type=chunk) [Adjusted Net Profit / (Loss)](index=10&type=section&id=Adjusted%20Net%20Profit%20%2F%20(Loss)) Adjusted net profit was RMB 14.4 million, successfully turning losses into profits, primarily due to revenue and profit growth from quality dramas, improved financial performance of new business lines like short-form dramas, and optimized expenses driven by comprehensive budget management Adjusted Net Profit / (Loss) | Indicator | 2025 (RMB Million) | 2024 (RMB Million) | | :--- | :--- | :--- | | Profit / (Loss) for the Period | 11.3 | (52.9) | | Add: Share-based Payments | 3.1 | 3.5 | | Adjusted Net Profit / (Loss) | 14.4 | (49.4) | | Adjusted Earnings / (Loss) Per Share - Basic (RMB) | 0.03 | (0.14) | - Adjusted net profit was **RMB 14.4 million**, compared to an adjusted net loss of **RMB 49.4 million** in the prior year, with the turnaround primarily driven by quality dramas, improved new business lines, and optimized expenses[29](index=29&type=chunk) [Financial Position and Liquidity](index=11&type=section&id=Financial%20Position%20and%20Liquidity) This section reviews the Group's balance sheet items, including receivables, payables, liquidity, gearing, foreign exchange, investments, and contingencies [Trade Receivables and Bills Receivable](index=11&type=section&id=Trade%20Receivables%20and%20Bills%20Receivable) Trade receivables and bills receivable increased by 21.9% to RMB 344.2 million, primarily due to the ongoing settlement of receivables and bills corresponding to dramas aired in H1 2025 - Trade receivables and bills receivable increased by **21.9%** from **RMB 282.4 million** to **RMB 344.2 million**, primarily due to the ongoing settlement of receivables and bills corresponding to dramas aired in H1 2025[30](index=30&type=chunk) [Trade Payables](index=11&type=section&id=Trade%20Payables) Trade payables increased by 79.4% to RMB 107.1 million, primarily due to the ongoing settlement of production and promotion expenses corresponding to dramas aired in H1 2025 - Trade payables increased by **79.4%** from **RMB 59.7 million** to **RMB 107.1 million**, primarily due to the ongoing settlement of production and promotion expenses corresponding to dramas aired in H1 2025[31](index=31&type=chunk) [Liquidity, Financial and Capital Resources](index=11&type=section&id=Liquidity%2C%20Financial%20and%20Capital%20Resources) As of June 30, 2025, the Group's net current assets were RMB 2.306 billion and current ratio was 5.0, both largely consistent with December 31, 2024. Total equity attributable to owners of the Company also remained largely stable - As of June 30, 2025, the Group's net current assets were **RMB 2,306.0 million** and the current ratio was **5.0**, both largely consistent with December 31, 2024[32](index=32&type=chunk) - As of June 30, 2025, the Group's total equity attributable to owners of the Company was **RMB 2,335.7 million**, largely consistent with December 31, 2024[32](index=32&type=chunk) [Gearing Ratio](index=11&type=section&id=Gearing%20Ratio) As of June 30, 2025, the gearing ratio (calculated as total debt divided by total assets) was 26.6%, a decrease from 28.1% as of December 31, 2024 - As of June 30, 2025, the gearing ratio was **26.6%**, compared to **28.1%** as of December 31, 2024[33](index=33&type=chunk) [Foreign Exchange and Exchange Rate Risk](index=11&type=section&id=Foreign%20Exchange%20and%20Exchange%20Rate%20Risk) The Group's operations are primarily in China, with limited foreign exchange exposure, and no significant foreign currency exchange losses were incurred during the reporting period. Management will continue to monitor and consider measures to mitigate adverse impacts from exchange rate fluctuations - The Group's operations are currently primarily conducted in China, with foreign exchange risk arising from foreign currency bank balances and exchange rate fluctuations[34](index=34&type=chunk) - For the six months ended June 30, 2025, the Group did not incur any significant foreign currency exchange losses in its operations[34](index=34&type=chunk) [Significant Investments Held](index=12&type=section&id=Significant%20Investments%20Held) As of June 30, 2025, the Group held no significant investments, only subscribing to wealth management products from financial institutions for cash management purposes - As of June 30, 2025, the Group held no significant investments, only subscribing to wealth management products from financial institutions for cash management purposes[35](index=35&type=chunk) [Contingent Liabilities](index=12&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[36](index=36&type=chunk) [Future Plans for Material Investments or Capital Assets](index=12&type=section&id=Future%20Plans%20for%20Material%20Investments%20or%20Capital%20Assets) As of June 30, 2025, the Group had no future plans for material investments or capital assets - As of June 30, 2025, the Group had no future plans for material investments or capital assets[37](index=37&type=chunk) [Hedging Activities](index=12&type=section&id=Hedging%20Activities) As of June 30, 2025, the Group had no hedging activities - As of June 30, 2025, the Group had no hedging activities[38](index=38&type=chunk) [Events After the Reporting Period](index=12&type=section&id=Events%20After%20the%20Reporting%20Period) From the end of the reporting period up to the date of this announcement, no significant events have occurred that would materially affect the Group's business operations - From the end of the reporting period up to the date of this announcement, no significant events have occurred that would materially affect the Group's business operations[39](index=39&type=chunk) [Other Important Information](index=12&type=section&id=Other%20Important%20Information) This section covers the use of IPO proceeds, dividend policy, corporate governance, and other regulatory compliance matters [Use of Proceeds from Listing](index=12&type=section&id=Use%20of%20Proceeds%20from%20Listing) The Company's net proceeds from listing were approximately HKD 311.8 million, with an unutilized balance of approximately HKD 40.3 million as of June 30, 2025, primarily for potential strategic investments and acquisition opportunities, expected to be utilized by end of 2026 - Net proceeds from the listing were approximately **HKD 311.8 million**, with an unutilized balance of approximately **HKD 40.3 million** as of June 30, 2025[40](index=40&type=chunk) Use of Proceeds from Listing and Timetable | Item | Percentage (%) | Funds for Relevant Use (HKD Million) | Unutilized Funds as of January 1, 2025 (HKD Million) | Net Funds Utilized During Reporting Period (HKD Million) | Unutilized Funds at End of Reporting Period (HKD Million) | Expected Timetable for Unutilized Proceeds | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | IP Library Expansion | 10 | 31.2 | – | – | – | – | | Drama Production and Promotion | 50 | 155.9 | – | – | – | – | | Exploration of New Business Opportunities | 15 | 46.8 | – | – | – | – | | Potential Strategic Investments and Acquisition Opportunities | 15 | 46.8 | 40.3 | 0 | 40.3 | By end of 2026 | | Working Capital and General Corporate Purposes | 10 | 31.1 | – | – | – | – | | Total | 100 | 311.8 | 40.3 | 0 | 40.3 | | [Interim Dividend](index=13&type=section&id=Interim%20Dividend) The Board resolved not to declare an interim dividend for the six months ended June 30, 2025 - The Board resolved not to declare an interim dividend for the six months ended June 30, 2025[42](index=42&type=chunk) [Corporate Governance Practices](index=14&type=section&id=Corporate%20Governance%20Practices) The Company adopted the Corporate Governance Code in Appendix C1 of the Listing Rules and complied with all applicable code provisions during the reporting period, except for a deviation from code provision C.2.1 (separation of roles for Chairman and CEO). The Board believes Mr. Su Xiao's dual role provides strong and consistent leadership for the Group, with sufficient checks and balances - The Company has adopted the Corporate Governance Code set out in Appendix C1 of the Listing Rules and has complied with all applicable code provisions, except for a deviation from code provision C.2.1[43](index=43&type=chunk) - The roles of Chairman and CEO are currently combined and held by Mr. Su Xiao, an arrangement the Board believes provides strong and consistent leadership for the Group and facilitates effective execution of business strategies[43](index=43&type=chunk) - The Board believes this structure does not impair the balance of power and authority, as Board decisions require approval by at least a majority of directors, including three independent non-executive directors[44](index=44&type=chunk) [Standard Code for Securities Transactions by Directors](index=15&type=section&id=Standard%20Code%20for%20Securities%20Transactions%20by%20Directors) Following specific inquiries to all Directors, each Director confirmed compliance with the Standard Code set out in Appendix C3 of the Listing Rules for the six months ended June 30, 2025 - Each Director confirmed compliance with the required standards set out in the Standard Code for the six months ended June 30, 2025[46](index=46&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=15&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company%27s%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[47](index=47&type=chunk) [Audit Committee](index=15&type=section&id=Audit%20Committee) The Board established an Audit Committee comprising one non-executive director and two independent non-executive directors, chaired by Ms. Tang Songlian. Its primary duties include reviewing and overseeing the Group's financial reporting process, internal control system, and risk management system, and it has reviewed the Group's unaudited interim results for the six months ended June 30, 2025 - The Audit Committee members include Mr. Zhang Rong, a non-executive director, and Ms. Tang Songlian (Chairperson) and Ms. Liang Ning, both independent non-executive directors[48](index=48&type=chunk) - Its primary duties include reviewing and overseeing the Group's financial reporting process, internal control system, risk management system, and supervising audit procedures[48](index=48&type=chunk) - The Audit Committee, together with the Board, has reviewed the Group's unaudited interim results for the six months ended June 30, 2025[48](index=48&type=chunk) [Publication of Interim Results and 2025 Interim Report](index=15&type=section&id=Publication%20of%20Interim%20Results%20and%202025%20Interim%20Report) This interim results announcement has been published on the HKEX website and the Company's website, and the Company's interim report for the six months ended June 30, 2025, will be posted on the aforementioned websites in due course - This interim results announcement has been published on the HKEX website and the Company's website, and the interim report will be posted on the aforementioned websites in due course[49](index=49&type=chunk) [Unaudited Interim Condensed Consolidated Financial Statements](index=16&type=section&id=Unaudited%20Interim%20Condensed%20Consolidated%20Financial%20Statements) This section presents the Group's unaudited interim financial statements, including the statement of profit or loss, financial position, and explanatory notes [Unaudited Interim Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=16&type=section&id=Unaudited%20Interim%20Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) This statement provides detailed data on the Group's revenue, costs, gross profit, various expenses, profit before tax, income tax, and profit for the period, indicating the Group has turned from loss to profit Unaudited Interim Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income | Indicator | 2025 (RMB Thousand) | 2024 (RMB Thousand) | | :--- | :--- | :--- | | Revenue | 401,329 | 192,529 | | Cost of Sales | (300,344) | (149,492) | | Gross Profit | 100,985 | 43,037 | | Other Income and Gains | 28,156 | 46,476 | | Selling and Distribution Expenses | (34,039) | (35,317) | | Administrative Expenses | (74,670) | (99,013) | | Other Expenses | (5,066) | (455) | | Finance Costs | (2,333) | (1,489) | | Share of Profits and Losses of Associates | (325) | 163 | | Profit / (Loss) Before Tax | 12,708 | (46,598) | | Income Tax Expense | (1,453) | (6,282) | | Profit / (Loss) and Total Comprehensive Income / (Expense) for the Period | 11,255 | (52,880) | | Attributable to Owners of the Company | 10,821 | (52,572) | | Attributable to Non-Controlling Interests | 434 | (308) | | Basic Earnings / (Loss) Per Share Attributable to Ordinary Equity Holders of the Company (RMB) | 0.03 | (0.15) | | Diluted Earnings / (Loss) Per Share Attributable to Ordinary Equity Holders of the Company (RMB) | 0.03 | (0.15) | [Unaudited Interim Condensed Consolidated Statement of Financial Position](index=17&type=section&id=Unaudited%20Interim%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) This statement presents the Group's financial position data at the end of the reporting period, including non-current assets, current assets, current liabilities, non-current liabilities, and total equity, reflecting changes in the asset and liability structure Unaudited Interim Condensed Consolidated Statement of Financial Position | Indicator | June 30, 2025 (RMB Thousand) | December 31, 2024 (RMB Thousand) | | :--- | :--- | :--- | | **Non-Current Assets** | | | | Property, Plant and Equipment | 15,726 | 18,948 | | Right-of-Use Assets | 38,358 | 48,418 | | Other Intangible Assets | 703 | 1,403 | | Investments in Associates | 21,138 | 21,463 | | Deferred Tax Assets | 90,546 | 92,124 | | Financial Assets at Fair Value Through Profit or Loss | 51,559 | 51,559 | | Prepayments, Other Receivables and Other Assets | 72,758 | 67,241 | | Time Deposits | – | 56,000 | | **Total Non-Current Assets** | **290,788** | **357,156** | | **Current Assets** | | | | Film and TV Series Rights | 747,570 | 690,925 | | Trade Receivables and Bills Receivable | 344,243 | 282,422 | | Prepayments, Other Receivables and Other Assets | 261,630 | 242,564 | | Financial Assets at Fair Value Through Profit or Loss | 575,659 | 550,519 | | Time Deposits | 132,462 | – | | Restricted Cash | 11,860 | 7,987 | | Cash and Cash Equivalents | 810,316 | 1,086,280 | | **Total Current Assets** | **2,883,740** | **2,860,697** | | **Current Liabilities** | | | | Trade Payables | 107,100 | 59,691 | | Other Payables and Accruals | 77,977 | 106,010 | | Bank Borrowings | 130,000 | 60,000 | | Lease Liabilities | 19,562 | 17,708 | | Contract Liabilities | 237,673 | 268,344 | | Tax Payable | 5,467 | 7,083 | | **Total Current Liabilities** | **577,779** | **518,836** | | **Net Current Assets** | **2,305,961** | **2,341,861** | | **Total Assets Less Current Liabilities** | **2,596,749** | **2,699,017** | | **Non-Current Liabilities** | | | | Other Payables and Accruals | 13,923 | 4,457 | | Contract Liabilities | 230,189 | 346,604 | | Lease Liabilities | 23,566 | 34,106 | | **Total Non-Current Liabilities** | **267,678** | **385,167** | | **Net Assets** | **2,329,071** | **2,313,850** | | **Equity** | | | | Share Capital | 60 | 59 | | Share Premium | 4,437,226 | 4,358,691 | | Reserves | (2,101,625) | (2,045,991) | | **Equity Attributable to Owners of the Company** | **2,335,661** | **2,312,759** | | Non-Controlling Interests | (6,590) | 1,091 | | **Total Equity** | **2,329,071** | **2,313,850** | [Notes to the Unaudited Interim Condensed Consolidated Financial Information](index=19&type=section&id=Notes%20to%20the%20Unaudited%20Interim%20Condensed%20Consolidated%20Financial%20Information) These notes provide detailed explanations and supplementary information for various financial statement figures, including company information, accounting policies, operating segment data, revenue breakdown, taxation, earnings per share calculation, and aging analysis of trade receivables and payables [Company Information](index=19&type=section&id=Company%20Information) This section provides details on the Company's registration, listing, and the primary business activities of its subsidiaries - The Company was incorporated in the Cayman Islands on June 10, 2021, and successfully listed on the Main Board of The Stock Exchange of Hong Kong Limited on August 10, 2022[53](index=53&type=chunk) - The Company's subsidiaries are primarily engaged in the production, distribution, and licensing of broadcasting rights for television dramas[53](index=53&type=chunk) [Basis of Preparation](index=19&type=section&id=Basis%20of%20Preparation) This section outlines the accounting standards and measurement basis used for preparing the condensed consolidated financial statements - The condensed consolidated financial statements are prepared in accordance with Hong Kong Accounting Standard 34 Interim Financial Reporting issued by the Hong Kong Institute of Certified Public Accountants and the applicable disclosure requirements of the Listing Rules of the Stock Exchange[54](index=54&type=chunk) - The condensed consolidated financial statements have been prepared on a historical cost basis, except for certain financial instruments measured at fair value[55](index=55&type=chunk) - The application of amendments to Hong Kong Financial Reporting Standards during this interim period has no significant impact on the Group's financial position and performance for the current and prior periods[56](index=56&type=chunk) [Operating Segment Data](index=20&type=section&id=Operating%20Segment%20Data) This section details the Group's single reportable operating segment and its revenue breakdown by geographical location - The Group does not disaggregate its business units by product and has only one reportable operating segment[57](index=57&type=chunk) Revenue from External Customers by Geographical Information | Region | 2025 (RMB Thousand) | 2024 (RMB Thousand) | | :--- | :--- | :--- | | Mainland China | 367,887 | 179,168 | | Other Countries / Regions | 33,442 | 13,361 | | Total Revenue | 401,329 | 192,529 | - All of the Group's non-current assets are located in Mainland China[59](index=59&type=chunk) [Revenue (Detailed)](index=20&type=section&id=Revenue%20(Detailed)) This section provides a detailed breakdown of revenue from customer contracts and by the timing of revenue recognition Revenue from Contracts with Customers | Item | 2025 (RMB Thousand) | 2024 (RMB Thousand) | | :--- | :--- | :--- | | Revenue from Contracts with Customers | 401,329 | 192,529 | Disaggregation of Revenue (by Timing of Revenue Recognition) | Timing of Revenue Recognition | 2025 (RMB Thousand) | 2024 (RMB Thousand) | | :--- | :--- | :--- | | Goods Transferred at a Point in Time | 389,488 | 188,272 | | Services Transferred Over Time | 6,341 | 3,680 | | Services Transferred at a Point in Time | 5,500 | 577 | | Total | 401,329 | 192,529 | [Profit / (Loss) Before Tax (Detailed)](index=21&type=section&id=Profit%20%2F%20(Loss)%20Before%20Tax%20(Detailed)) This section details the specific components contributing to the Group's profit or loss before tax Components of Profit / (Loss) Before Tax | Item | 2025 (RMB Thousand) | 2024 (RMB Thousand) | | :--- | :--- | :--- | | Cost of Film and TV Series Rights Sold | 296,219 | 156,172 | | Government Grants | (13,783) | (12,612) | | Net Exchange Gains | (86) | (4,256) | [Income Tax](index=22&type=section&id=Income%20Tax) This section explains the applicable income tax rates for the Group's entities and the breakdown of income tax expense - The Group is subject to income tax on profits in the jurisdictions where its member companies are located and operate, with tax rates including **16.5%** (partially **8.25%**) in Hong Kong and **25%** in China[63](index=63&type=chunk) - Some Chinese subsidiaries qualify as small and micro-enterprises, enjoying a preferential income tax rate of **5%** on taxable profits below **RMB 3 million** during the period[64](index=64&type=chunk) Components of Income Tax Expense | Item | 2025 (RMB Thousand) | 2024 (RMB Thousand) | | :--- | :--- | :--- | | Current Tax: (Credit) / Expense for the Period | (74) | 4,453 | | Deferred Tax | 1,527 | 1,829 | | Total Tax Expense for the Period | 1,453 | 6,282 | [Earnings / (Loss) Per Share](index=23&type=section&id=Earnings%20%2F%20(Loss)%20Per%20Share) This section details the calculation of basic and diluted earnings per share, including the underlying profit and share counts - Basic earnings / (loss) per share is calculated based on the profit / (loss) attributable to ordinary equity holders of the Company and the weighted average number of **360,974,015** ordinary shares outstanding during the period[66](index=66&type=chunk) Data for Basic and Diluted Earnings / (Loss) Per Share Calculation | Indicator | 2025 (RMB Thousand) | 2024 (RMB Thousand) | | :--- | :--- | :--- | | Profit / (Loss) Attributable to Ordinary Equity Holders of the Parent for Basic Earnings / (Loss) Per Share Calculation | 10,821 | (52,572) | | **Number of Shares** | **2025** | **2024** | | Weighted Average Number of Ordinary Shares for Basic Earnings / (Loss) Per Share Calculation | 360,974,015 | 360,458,829 | | Dilutive Effect - Weighted Average Number of Ordinary Shares: Share Options | 2,019,708 | 481,567* | | Total | 362,993,723 | 360,940,396 | - For the six months ended June 30, 2024, no adjustment was made for dilution to the reported basic loss per share amount, as the effect of unexercised share options was anti-dilutive to the reported basic loss per share amount[67](index=67&type=chunk) [Dividends](index=24&type=section&id=Dividends) This section clarifies whether any interim dividends were paid or declared by the Company during the reporting period - The Company neither paid nor declared any interim dividends for the six months ended June 30, 2025[68](index=68&type=chunk) [Trade Receivables and Bills Receivable (Detailed)](index=24&type=section&id=Trade%20Receivables%20and%20Bills%20Receivable%20(Detailed)) This section provides a detailed breakdown and aging analysis of the Group's trade receivables and bills receivable Trade Receivables and Bills Receivable | Item | June 30, 2025 (RMB Thousand) | December 31, 2024 (RMB Thousand) | | :--- | :--- | :--- | | Trade Receivables | 353,302 | 300,634 | | Bills Receivable | 9,068 | 10,656 | | Subtotal | 362,370 | 311,290 | | Impairment | (18,127) | (28,868) | | Net Book Value | 344,243 | 282,422 | Aging Analysis of Trade Receivables | Aging | June 30, 2025 (RMB Thousand) | December 31, 2024 (RMB Thousand) | | :--- | :--- | :--- | | Within 3 Months | 316,589 | 223,360 | | 3 to 6 Months | 1,024 | 4,108 | | 6 to 12 Months | 7,408 | 500 | | 1 to 2 Years | 8,316 | 39,841 | | 2 to 3 Years | 1,838 | 3,957 | | Total | 335,175 | 271,766 | [Trade Payables (Detailed)](index=25&type=section&id=Trade%20Payables%20(Detailed)) This section provides a detailed breakdown and aging analysis of the Group's trade payables Trade Payables | Item | June 30, 2025 (RMB Thousand) | December 31, 2024 (RMB Thousand) | | :--- | :--- | :--- | | Trade Payables | 107,100 | 59,691 | Aging Analysis of Trade Payables | Aging | June 30, 2025 (RMB Thousand) | December 31, 2024 (RMB Thousand) | | :--- | :--- | :--- | | Within 3 Months | 106,433 | 58,341 | | 3 to 6 Months | 241 | 334 | | 6 to 12 Months | – | 141 | | 1 to 2 Years | 320 | 691 | | 2 to 3 Years | 64 | 184 | | Over 3 Years | 42 | – | | Total | 107,100 | 59,691 |

[Company Information and Financial Summary](index=1&type=section&id=Company%20Information%20and%20Financial%20Summary) [Company Overview](index=1&type=section&id=Company%20Overview) Vala Inc. (formerly 51 Credit Card Inc.) announced its unaudited condensed consolidated interim results for the six months ended June 30, 2025 - The company's name changed from “51 Credit Card Inc.” to “Vala Inc.” effective June 11, 2025, marking Vala, a new energy mobile lifestyle brand, as the core of its future development strategy[2](index=2&type=chunk)[20](index=20&type=chunk) [Financial Summary](index=1&type=section&id=Financial%20Summary) For the six months ended June 30, 2025, total revenue increased by 16.4% to RMB 135.7 million, while operating and net losses widened, though non-IFRS adjusted losses narrowed Financial Summary for the Six Months Ended June 30, 2025 | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | Change | | :----- | :------------------- | :------------------- | :----- | | Revenue | 135,651 | 116,568 | 16.4% | | Valalife Business | 50,272 | 8,624 | 482.9% | | Credit Facilitation and Service Fees | 25,999 | 29,433 | (11.7%) | | SaaS Service Fees | 21,068 | 46,029 | (54.2%) | | Children's Entertainment Revenue | 16,750 | 11,338 | 47.7% | | Operating Loss for the Period | (49,608) | (34,084) | 45.5% | | Net Loss for the Period | (50,870) | (48,129) | 5.7% | | Non-IFRS Adjusted Operating Loss for the Period | (29,567) | (31,549) | (6.3%) | | Non-IFRS Adjusted Net Loss for the Period | (29,967) | (34,102) | (12.1%) | - For the six months ended June 30, 2025, the company did not declare an interim dividend[5](index=5&type=chunk) [Management Discussion and Analysis](index=3&type=section&id=Management%20Discussion%20and%20Analysis) [Business Review](index=3&type=section&id=Business%20Review) The Group actively expanded its Valalife automotive business in H1 2025, achieving significant user growth and strategic industry positioning, while Xiaolanben advanced with AI-powered cross-border logistics, and credit facilitation scaled back due to regulatory impacts [Valalife Business](index=3&type=section&id=Valalife%20Business) Valalife leveraged Vala vehicles and WeChat mini-programs for user growth, established a co-creator system and mobile store network, and achieved bulk delivery of Pro models, redefining automotive lifestyles - Valalife mini-program's cumulative registered users grew from approximately **37,000** as of December 31, 2024, to approximately **67,000** as of June 30, 2025[7](index=7&type=chunk) - Vala vehicles are the first original factory-liftable new energy multi-purpose vehicles in China, integrating a tent-style sloped roof, Lego-style modular design, and high-quality entertainment system[8](index=8&type=chunk) - For the six months ended June 30, 2025, the Group successfully recruited **131 Vala co-creators** and established **13 Vala experience centers** nationwide[9](index=9&type=chunk) - Vala Pro models have achieved bulk delivery, with cooperation agreements signed with Chongqing Ruichi Automobile Industry Co, Ltd and Henan Automobile Industry Investment Group Co, Ltd to jointly develop new models[9](index=9&type=chunk) [51 Credit Card Manager and Xiaolanben Business](index=3&type=section&id=51%20Credit%20Card%20Manager%20and%20Xiaolanben%20Business) 51 Credit Card Manager maintained user and managed card numbers, while Xiaolanben advanced with an AI-powered cross-border logistics version, offering one-stop marketing solutions globally - As of June 30, 2025, 51 Credit Card Manager's registered users were approximately **88.8 million**, with cumulative managed credit cards at approximately **152.5 million**, largely consistent with December 31, 2024[7](index=7&type=chunk) - As of June 30, 2025, Xiaolanben's registered users were approximately **7.0 million**[7](index=7&type=chunk) - Xiaolanben iterated its cross-border logistics industry version on February 18, 2025, integrating DeepSeek and Doubao dual AI engines to provide one-stop marketing solutions covering over 200 countries and regions globally[10](index=10&type=chunk) [Credit Facilitation Business](index=5&type=section&id=Credit%20Facilitation%20Business) The credit facilitation business scaled back to mitigate risks due to anticipated regulatory policy changes, resulting in a decrease in overall volume - The credit facilitation business scaled back due to anticipated new regulations from the China National Financial Regulatory Administration, aiming to reduce business risks[11](index=11&type=chunk) [Business Outlook and Strategic Adjustments](index=8&type=section&id=Business%20Outlook%20and%20Strategic%20Adjustments) The company will continue to drive new businesses, expanding Valalife, focusing SaaS on AI SEO and channel expansion, and adjusting credit facilitation to an asset-light model to meet regulatory requirements [Valalife Business Outlook](index=8&type=section&id=Valalife%20Business%20Outlook) Valalife business, already covering 26 provinces and over 100 cities, will further expand its footprint with ongoing Vala Pro model deliveries and new ecosystem scenarios, aiming to create richer mobile lifestyles - Valalife business has covered **26 provinces** and over **100 cities** nationwide, with future expansion driven by Vala Pro model deliveries and the implementation of more scenario-based ecosystems[20](index=20&type=chunk) - The company has officially changed its name to “Vala Inc.”, clearly positioning the new energy mobile lifestyle brand Vala as the strategic core for future development[20](index=20&type=chunk) [SaaS Business Outlook](index=8&type=section&id=SaaS%20Business%20Outlook) Xiaolanben is developing AI search engine optimization technology to reduce enterprise promotion costs and improve conversion efficiency, while expanding channels to acquire more market leads - Xiaolanben is developing AI search engine optimization technology to reduce enterprise promotion costs and improve conversion efficiency[21](index=21&type=chunk) - Xiaolanben will gradually integrate with channels such as Alibaba Bailian, MCP service channels, ByteDance Koutou, and DingTalk third-party application service markets to expand customer reach opportunities[21](index=21&type=chunk) [Credit Facilitation Business Outlook](index=8&type=section&id=Credit%20Facilitation%20Business%20Outlook) The credit facilitation business will transition to an asset-light credit referral service model, incorporating risk control measures to comply with the latest industry regulations - The credit facilitation business will gradually transition to an asset-light credit referral service model, aligning with the latest industry regulatory requirements[21](index=21&type=chunk) [Financial Statements](index=8&type=section&id=Financial%20Statements) [Condensed Consolidated Interim Statement of Comprehensive Loss](index=9&type=section&id=Condensed%20Consolidated%20Interim%20Statement%20of%20Comprehensive%20Loss) For the six months ended June 30, 2025, total revenue grew to RMB 135.7 million, but operating and net losses widened, with Valalife revenue significantly increasing while SaaS and credit facilitation fees declined, resulting in a loss attributable to owners of RMB 47.3 million Condensed Consolidated Interim Statement of Comprehensive Loss (Key Items) | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | | :----- | :------------------- | :------------------- | | Total Revenue | 135,651 | 116,568 | | Valalife Service Fees | 50,272 | 8,624 | | Credit Facilitation and Service Fees | 25,999 | 29,433 | | SaaS Service Fees | 21,068 | 46,029 | | Operating Loss | (49,608) | (34,084) | | Loss for the Period | (50,870) | (48,129) | | Loss for the Period Attributable to Owners of the Company | (47,258) | (42,165) | [Condensed Consolidated Interim Statement of Financial Position](index=11&type=section&id=Condensed%20Consolidated%20Interim%20Statement%20of%20Financial%20Position) As of June 30, 2025, total assets were RMB 967.0 million, a decrease from year-end 2024, with stable non-current assets but a significant reduction in cash and cash equivalents, and total liabilities also decreased due to reduced bank and other borrowings Condensed Consolidated Interim Statement of Financial Position (Key Items) | Metric | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :----- | :---------------------------- | :-------------------------------- | | Total Assets | 966,984 | 1,075,751 | | Cash and Cash Equivalents | 161,039 | 280,326 | | Total Equity | 749,317 | 779,522 | | Total Liabilities | 217,667 | 296,229 | | Bank and Other Borrowings | 500 | 59,820 | [Notes to the Financial Statements](index=13&type=section&id=Notes%20to%20the%20Financial%20Statements) [Significant Accounting Policies](index=13&type=section&id=Significant%20Accounting%20Policies) These interim financial statements are prepared in accordance with IAS 34 and incorporate all new and revised IFRS effective January 1, 2025, without significant changes to accounting policies or financial statement presentation - The condensed consolidated interim financial information is prepared in accordance with International Accounting Standard 34 “Interim Financial Reporting”[27](index=27&type=chunk) - All new and revised International Financial Reporting Standards effective from January 1, 2025, have been adopted for the current period, resulting in no significant changes to accounting policies or financial statement presentation[28](index=28&type=chunk) [Credit Facilitation and Service Fees](index=13&type=section&id=Credit%20Facilitation%20and%20Service%20Fees) For the six months ended June 30, 2025, total credit facilitation and service fees decreased to RMB 26.0 million, with management expecting all remaining performance obligations to be recognized as revenue within twelve months Credit Facilitation and Service Fees | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :------------------- | :------------------- | | Upfront Credit Facilitation Service Fees | 13,064 | 14,267 | | Post-loan Credit Facilitation Service Fees | 12,935 | 15,166 | | Total | 25,999 | 29,433 | - As of June 30, 2025, unsatisfied performance obligations amounted to approximately **RMB 17,008,000**, with **100%** expected to be recognized as revenue within the next twelve months[30](index=30&type=chunk) [Other Income](index=14&type=section&id=Other%20Income) For the six months ended June 30, 2025, total other income increased to RMB 21.4 million, primarily due to new revenue from automotive equipment sales, partially offset by decreases in referral service fees and overdue charges Composition of Other Income | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :------------------- | :------------------- | | Referral Service Fees | 8,158 | 10,811 | | Overdue Charges | 2,466 | 3,322 | | Sales of Automotive Equipment | 5,946 | — | | Total | 21,390 | 19,816 | [Expenses by Nature](index=14&type=section&id=Expenses%20by%20Nature) For the six months ended June 30, 2025, total operating expenses increased, mainly driven by significant growth in automotive business and marketing and advertising costs, while external technical service fees and R&D expenses decreased Expenses by Nature | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :------------------- | :------------------- | | Employee Benefit Expenses | 55,355 | 52,675 | | External Technical Service Fees | 31,505 | 57,322 | | Marketing and Advertising Expenses | 20,256 | 7,602 | | Automotive Business | 49,210 | 17,077 | | Total of Processing and Service Expenses, General and Administrative Expenses, R&D Expenses, and Sales and Marketing Expenses | 208,001 | 182,772 | [Net Expected Credit Losses](index=15&type=section&id=Net%20Expected%20Credit%20Losses) For the six months ended June 30, 2025, net expected credit losses significantly decreased to RMB 7.7 million, primarily due to a substantial reduction in expected credit losses related to quality guarantees and receivables Composition of Net Expected Credit Losses | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :------------------- | :------------------- | | Contract Assets | 1,511 | 3,514 | | Trade Receivables | 1,216 | 3,812 | | Quality Guarantees | 4,232 | 22,674 | | Total | 7,719 | 33,749 | [Net Other Income](index=15&type=section&id=Net%20Other%20Income) For the six months ended June 30, 2025, net other income significantly decreased to RMB 30.5 million, primarily due to losses from the disposal of a listed subsidiary and reduced recovery of overdue assets Composition of Net Other Income | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :------------------- | :------------------- | | Government Grants | 268 | — | | Fair Value (Loss) / Gain on Financial Assets at Fair Value Through Profit or Loss | (1,542) | 349 | | Loss on Disposal of Listed Subsidiary | (13,287) | — | | Others (primarily including recovery of overdue assets) | 45,383 | 68,357 | | Total | 30,461 | 65,869 | [Income Tax (Credit) / Expense](index=16&type=section&id=Income%20Tax%20(Credit)%20%2F%20Expense) For the six months ended June 30, 2025, income tax shifted from an expense to a credit, mainly due to an increase in deferred tax assets, with high-tech enterprises in China enjoying a preferential 15% tax rate Income Tax (Credit) / Expense | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :------------------- | :------------------- | | Current Income Tax | 2 | 31 | | Deferred Income Tax | (468) | 3,126 | | Total | (466) | 3,157 | - Domestic subsidiaries and variable interest entities in China are generally subject to a 25% corporate income tax rate, while high-tech enterprises enjoy a preferential **15%** tax rate[38](index=38&type=chunk) [Loss Per Share](index=17&type=section&id=Loss%20Per%20Share) For the six months ended June 30, 2025, basic loss per share attributable to owners was RMB 3.07 cents, a narrowing from the prior year, with diluted loss per share being the same due to the period's loss Loss Per Share | Metric | 2025 (Unaudited) | 2024 (Unaudited) | | :----- | :--------------- | :--------------- | | Loss Attributable to Owners of the Company (RMB thousands) | (47,258) | (42,165) | | Weighted Average Number of Ordinary Shares Issued (thousands) | 1,541,856 | 1,221,240 | | Basic Loss Per Share (RMB cents) | (3.07) | (3.45) | - Due to the Group's loss for the period, potential ordinary shares have an anti-dilutive effect, thus diluted loss per share is the same as basic loss per share[40](index=40&type=chunk) [Intangible Assets](index=18&type=section&id=Intangible%20Assets) As of June 30, 2025, the net book value of intangible assets significantly decreased to RMB 1.6 million, primarily due to a substantial reduction in goodwill and software costs from the disposal of a subsidiary Net Book Value of Intangible Assets | Item | June 30, 2025 (RMB thousands) | January 1, 2025 (RMB thousands) | | :--- | :---------------------------- | :------------------------------ | | Goodwill | — | 482,377 | | Software | 51 | 21,721 | | Total | 1,594 | 512,911 | - The disposal of a subsidiary resulted in a reduction of goodwill cost by **RMB 482,377 thousand**, with accumulated impairment losses reversed accordingly[42](index=42&type=chunk) [Prepayments and Other Receivables](index=19&type=section&id=Prepayments%20and%20Other%20Receivables) As of June 30, 2025, total prepayments and other receivables increased to RMB 137.8 million from year-end 2024, mainly driven by growth in deposits, prepaid expenses, and other receivables Prepayments and Other Receivables | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :---------------------------- | :-------------------------------- | | Included in Non-current Assets: Rental Deposits | 641 | 641 | | Included in Current Assets: Deposits and Prepaid Expenses | 51,860 | 46,587 | | Included in Current Assets: Third-party Loans | 35,436 | 32,479 | | Total | 137,841 | 122,692 | [Payable and Receivable Quality Guarantees](index=19&type=section&id=Payable%20and%20Receivable%20Quality%20Guarantees) As of June 30, 2025, the ending balance of quality guarantees payable was RMB 26.3 million, with net quality guarantees receivable at RMB 10.7 million, and total expected credit loss provisions slightly increased to RMB 39.3 million Changes in Quality Guarantees Payable | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :------------------- | :------------------- | | Beginning Balance | 23,359 | 37,043 | | Ending Balance | 26,342 | 25,426 | Changes in Quality Guarantees Receivable | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :------------------- | :------------------- | | Beginning Balance | 9,772 | 21,060 | | Ending Balance | 10,693 | 12,054 | Expected Credit Loss Provisions for Quality Guarantees Receivable | Stage | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :---- | :---------------------------- | :-------------------------------- | | Stage 1 | 2,733 | 2,620 | | Stage 2 | 657 | 646 | | Stage 3 | 35,945 | 35,635 | | Total | 39,335 | 38,901 | [Contract Assets / (Liabilities)](index=22&type=section&id=Contract%20Assets%20%2F%20(Liabilities)) As of June 30, 2025, net contract assets were RMB 22.7 million and contract liabilities were RMB 19.6 million, with total expected credit loss provisions for contract assets amounting to RMB 615.4 million Contract Assets / (Liabilities) | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :---------------------------- | :-------------------------------- | | Net Contract Assets | 22,734 | 24,465 | | Contract Liabilities | (19,622) | (25,609) | Expected Credit Loss Provisions for Contract Assets | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :------------------- | :------------------- | | Ending Balance | (615,354) | (612,390) | [Trade Receivables](index=23&type=section&id=Trade%20Receivables) As of June 30, 2025, net trade receivables decreased to RMB 39.1 million from year-end 2024, with expected credit loss provisions totaling RMB 215.1 million Trade Receivables | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :---------------------------- | :-------------------------------- | | Receivables from Referral and Credit Card Technology Services | 247,681 | 258,761 | | Expected Credit Loss Provisions | (215,086) | (217,780) | | Net Amount | 39,087 | 51,383 | Ageing Analysis of Trade Receivables | Ageing | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :----- | :---------------------------- | :-------------------------------- | | Within 30 Days | 5,194 | 12,139 | | Over 30 Days | 248,979 | 257,024 | [Trade and Other Payables](index=24&type=section&id=Trade%20and%20Other%20Payables) As of June 30, 2025, total trade and other payables decreased to RMB 31.3 million from year-end 2024, primarily due to a reduction in salaries and welfare payables and other payables Trade and Other Payables | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :---------------------------- | :-------------------------------- | | Trade Payables | 14,771 | 15,480 | | Salaries and Welfare Payables | 7,552 | 15,624 | | Total | 31,318 | 43,456 | Ageing Analysis of Trade Payables | Ageing | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :----- | :---------------------------- | :-------------------------------- | | Within 30 Days | 7,204 | 10,974 | [Dividends](index=24&type=section&id=Dividends) For the six months ended June 30, 2025, the company did not pay or declare any dividends - For the six months ended June 30, 2025, the company did not pay or declare any interim dividend[51](index=51&type=chunk) [Disposal of Listed Subsidiary](index=25&type=section&id=Disposal%20of%20Listed%20Subsidiary) The Group disposed of a 10.16% equity interest in Zhongcaiwangtong Holdings Limited in H1 2025 for approximately RMB 6.5 million, resulting in a disposal loss of RMB 13.3 million, while retaining a 29.00% indirect interest as an associate - The Group disposed of a **10.16%** equity interest in Zhongcaiwangtong Holdings Limited for approximately **HKD 7,140,000** (approximately **RMB 6,538,000**)[52](index=52&type=chunk) - The disposal was completed on June 9, 2025, resulting in a disposal loss of **RMB 13,287 thousand**[34](index=34&type=chunk)[53](index=53&type=chunk) - Following the completion of the placing, the company indirectly held approximately **29.00%** of Zhongcaiwangtong's total issued share capital, which was accounted for as an associate[52](index=52&type=chunk)[81](index=81&type=chunk) [Financial Review](index=26&type=section&id=Financial%20Review) [Revenue Analysis](index=26&type=section&id=Revenue%20Analysis) For the six months ended June 30, 2025, total revenue increased by 16.4% to RMB 135.7 million, driven by a 482.9% surge in Valalife revenue and a 47.7% increase in children's entertainment, despite declines in credit facilitation, SaaS, and credit card technology service fees - Total revenue increased by **16.4%** to **RMB 135.7 million**[55](index=55&type=chunk) - Valalife revenue significantly increased by **482.9%** to **RMB 50.3 million**, primarily due to the bulk delivery of Vala vehicles[55](index=55&type=chunk) - Credit facilitation and service fees decreased by **11.7%** to **RMB 26.0 million**, due to reduced business volume from strategic adjustments[55](index=55&type=chunk) - SaaS service fees decreased by **54.2%** to **RMB 21.1 million**, mainly due to reduced revenue from the smart retail business[55](index=55&type=chunk) - Children's entertainment business revenue increased by **47.7%** to **RMB 16.8 million**, due to stable operations[56](index=56&type=chunk) - Credit card technology service fees decreased by **87.0%** to **RMB 0.2 million**, due to the gradual cessation of investment in co-branded card business[56](index=56&type=chunk) - Other income increased by **7.9%** to **RMB 21.4 million**, primarily due to increased revenue from Zhongcaiwangtong's automotive lifestyle business, partially offset by reduced referral service income[57](index=57&type=chunk) [Operating Expense Analysis](index=27&type=section&id=Operating%20Expense%20Analysis) For the six months ended June 30, 2025, total operating expenses increased by 23.0% to RMB 185.3 million, with significant increases in processing and service expenses and sales and marketing expenses due to Valalife automotive business growth, offset by reduced R&D and net expected credit losses - Total operating expenses increased by **23.0%** to **RMB 185.3 million**[58](index=58&type=chunk) - Processing and service expenses increased by **15.4%** to **RMB 125.5 million**, primarily due to an increase in Vala vehicle procurement costs of **RMB 39.2 million**[58](index=58&type=chunk) - Sales and marketing expenses increased by **74.3%** to **RMB 33.3 million**, mainly due to a **166.5%** increase in Vala vehicle marketing and promotion expenses to **RMB 20.3 million**[59](index=59&type=chunk) - R&D expenses decreased by **24.8%** to **RMB 21.1 million**, primarily due to a phased reduction resulting from the mass production and delivery of Valalife business's Vala Pro models[60](index=60&type=chunk) - Net expected credit losses decreased by **77.1%** to **RMB 7.7 million**, primarily due to reduced losses related to quality guarantees and receivables[60](index=60&type=chunk) - Net other income decreased by **53.8%** to **RMB 30.5 million**, primarily due to investment losses from the disposal of a subsidiary and reduced recovery of overdue assets[61](index=61&type=chunk) [Net Loss from Associates](index=28&type=section&id=Net%20Loss%20from%20Associates) The share of net loss from associates accounted for using the equity method significantly increased by 716.5% to RMB 0.9 million, primarily due to operating losses incurred by the associates - The share of net loss from associates accounted for using the equity method increased by **716.5%** to **RMB 0.9 million**, primarily due to operating losses incurred by the associates[62](index=62&type=chunk) [Fair Value Loss on Financial Liabilities](index=29&type=section&id=Fair%20Value%20Loss%20on%20Financial%20Liabilities) Fair value loss on financial liabilities at fair value through profit or loss significantly decreased by 92.5% to RMB 0.9 million, mainly due to improved operating performance of Xiaolanben, leading to an increase in the valuation of this liability - Fair value loss on financial liabilities at fair value through profit or loss decreased by **92.5%** to **RMB 0.9 million**, primarily due to improved operating performance of Xiaolanben[63](index=63&type=chunk) [Net Finance Income](index=29&type=section&id=Net%20Finance%20Income) Net finance income decreased by 89.8% to RMB 0.1 million, primarily due to a reduction in interest income resulting from a decrease in the Group's overall cash balance - Net finance income decreased by **89.8%** to **RMB 0.1 million**, primarily due to a reduction in interest income resulting from a decrease in the Group's overall cash balance[64](index=64&type=chunk) [Income Tax Credit / (Expense)](index=29&type=section&id=Income%20Tax%20Credit%20%2F%20(Expense)) Income tax shifted from an expense in the prior year to a credit in the current period, primarily due to an increase in deferred tax assets - Income tax shifted from an expense of approximately **RMB 3.2 million** for the six months ended June 30, 2024, to a credit of approximately **RMB 0.5 million** for the six months ended June 30, 2025, primarily due to an increase in deferred tax assets[65](index=65&type=chunk) [Loss for the Period](index=29&type=section&id=Loss%20for%20the%20Period) Loss for the period increased by 5.7% to RMB 50.9 million, primarily due to investment losses from the disposal of certain subsidiaries, partially offset by a reduction in fair value losses on financial liabilities - Loss for the period increased by **5.7%** to **RMB 50.9 million**, primarily due to investment losses of approximately **RMB 12.7 million** from the disposal of certain subsidiaries[66](index=66&type=chunk) - Part of the loss was offset by a **92.5%** reduction in fair value loss on financial liabilities at fair value through profit or loss to **RMB 0.9 million**[66](index=66&type=chunk) [Non-IFRS Measures](index=30&type=section&id=Non-IFRS%20Measures) [Definitions and Uses](index=30&type=section&id=Definitions%20and%20Uses) The company uses non-IFRS adjusted operating loss and net loss as supplementary financial metrics to provide clearer comparisons of operating performance, excluding non-operating or non-cash items deemed not reflective of core operations - Non-IFRS adjusted operating loss and adjusted net loss are used to supplement IFRS, providing a comparison of operating performance across different periods[67](index=67&type=chunk) - These non-IFRS measures exclude share-based compensation expenses, fair value losses/gains on financial assets/liabilities at fair value through profit or loss, losses on disposal of property, plant and equipment/subsidiaries, and other losses, due to their non-operating nature or non-cash outflow[68](index=68&type=chunk) [Adjustments and Reconciliations](index=31&type=section&id=Adjustments%20and%20Reconciliations) For the six months ended June 30, 2025, non-IFRS adjusted operating loss was RMB 29.6 million and non-IFRS adjusted net loss was RMB 30.0 million, both narrowing compared to the prior year Reconciliation of Non-IFRS Adjusted Operating Loss | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :------------------- | :------------------- | | Operating Loss | (49,608) | (34,084) | | Adjusted Operating Loss | (29,567) | (31,549) | Reconciliation of Non-IFRS Adjusted Net Loss | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :------------------- | :------------------- | | Net Loss | (50,870) | (48,129) | | Adjusted Net Loss | (29,967) | (34,102) | [Liquidity and Financial Resources](index=32&type=section&id=Liquidity%20and%20Financial%20Resources) [Overview of Liquidity and Financial Resources](index=32&type=section&id=Overview%20of%20Liquidity%20and%20Financial%20Resources) As of June 30, 2025, the Group maintained a net cash position of RMB 160.5 million, a decrease from year-end 2024, with the debt-to-asset ratio significantly reduced to 0.1% and total borrowings substantially decreased Net Cash Position | Item | June 30, 2025 (RMB millions) | December 31, 2024 (RMB millions) | | :--- | :--------------------------- | :------------------------------- | | Cash and Cash Equivalents | 161 | 280 | | Borrowings | (0.5) | (60) | | Net Cash | 160.5 | 220 | - For the six months ended June 30, 2025, the Group recorded a net cash outflow of approximately **RMB 119.9 million**[70](index=70&type=chunk) - As of June 30, 2025, the debt-to-asset ratio was approximately **0.1%** (December 31, 2024: approximately **5.6%**)[71](index=71&type=chunk) Borrowing Maturity Profile | Term | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :---------------------------- | :-------------------------------- | | Within One Year | 500 | 59,820 | | Total Borrowings | 500 | 59,820 | - For the six months ended June 30, 2025, the annual interest rate on borrowings was approximately **3.2%**[73](index=73&type=chunk) [Fundraising Activities and Use of Proceeds](index=33&type=section&id=Fundraising%20Activities%20and%20Use%20of%20Proceeds) The company completed a placing in November 2024, raising net proceeds of approximately HKD 38.73 million, primarily allocated to strengthening existing credit facilitation and SaaS businesses, developing and expanding Valalife, and general working capital - The company completed a placing in November 2024, raising total proceeds of approximately **HKD 39.66 million** and net proceeds of approximately **HKD 38.73 million**[74](index=74&type=chunk) Use of Proceeds from 2024 Placing (as of June 30, 2025) | Use | Allocated Net Proceeds (HKD thousands) | Utilized Net Proceeds (HKD thousands) | Unutilized Net Proceeds (HKD thousands) | | :-- | :----------------------------------- | :----------------------------------- | :------------------------------------- | | Strengthening the Group's Existing Credit Facilitation and SaaS Businesses | 17,430 | 650 | 16,780 | | Development and Expansion of Vala | 17,430 | 0 | 17,430 | | General Working Capital | 3,870 | 543 | 3,327 | | Total | 38,730 | 1,193 | 37,537 | [Exchange Rate Fluctuation Risk](index=34&type=section&id=Exchange%20Rate%20Fluctuation%20Risk) The Group, operating primarily in China, faces exchange rate risks between USD and HKD against RMB, and did not enter into any foreign exchange forward contracts or other hedging instruments for the six months ended June 30, 2025 - The Group's subsidiaries operating primarily in China face exchange rate risks between USD and HKD against RMB[77](index=77&type=chunk) - For the six months ended June 30, 2025, the Group did not enter into any foreign exchange forward contracts or other hedging instruments[77](index=77&type=chunk) [Asset Pledges and Future Investment Plans](index=34&type=section&id=Asset%20Pledges%20and%20Future%20Investment%20Plans) As of June 30, 2025, the Group had no asset pledges and no specific plans for significant investments or capital asset acquisitions - As of June 30, 2025, the Group had no asset pledges[78](index=78&type=chunk) - As of June 30, 2025, the Group had no specific plans for significant investments or capital asset acquisitions[79](index=79&type=chunk) [Other Information](index=35&type=section&id=Other%20Information) [Significant Acquisitions and Disposals of Subsidiaries](index=35&type=section&id=Significant%20Acquisitions%20and%20Disposals%20of%20Subsidiaries) The Group disposed of a portion of its equity interest in Zhongcaiwangtong Holdings Limited in H1 2025, reclassifying it from a subsidiary to an associate, and subsequently completed the disposal of the remaining interest after the reporting period - The Group disposed of a **10.16%** equity interest in Zhongcaiwangtong Holdings Limited in H1 2025, reclassifying it from a subsidiary to an associate[81](index=81&type=chunk) - On July 15, 2025, the Group completed the disposal of its remaining **29%** equity interest in Zhongcaiwangtong, no longer directly or indirectly holding any interest in Zhongcaiwangtong[54](index=54&type=chunk)[90](index=90&type=chunk) [Contingent Liabilities](index=36&type=section&id=Contingent%20Liabilities) A subsidiary of the company is in dispute with Wenzhou Bank Co., Ltd. regarding fund settlement and allocation for co-branded credit card business, involving approximately RMB 42 million, currently in communication and mediation, with no provision made - A subsidiary of the company is in dispute with Wenzhou Bank Co., Ltd. regarding fund settlement and allocation for co-branded credit card business, involving approximately **RMB 42 million**[82](index=82&type=chunk) - As of June 30, 2025, this dispute remains in the communication and mediation stage, and no provision has been made due to the inability to reasonably predict the outcome[82](index=82&type=chunk) [Interim Dividends](index=36&type=section&id=Interim%20Dividends) The Board of Directors decided not to declare any interim dividend for the six months ended June 30, 2025 - The Board of Directors decided not to declare any interim dividend for the six months ended June 30, 2025[83](index=83&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=36&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company's%20Listed%20Securities) For the six months ended June 30, 2025, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities - For the six months ended June 30, 2025, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities[84](index=84&type=chunk) [Corporate Governance Practices](index=36&type=section&id=Corporate%20Governance%20Practices) The company complies with the Corporate Governance Code, with deviations including the Chairman also serving as CEO and a non-executive director's absence from the AGM, though the Board believes the dual role enhances decision-making efficiency - Mr. Sun Haitao serves concurrently as Chairman of the Board and Chief Executive Officer, which deviates from Corporate Governance Code Provision C.2.1 (separation of roles of chairman and chief executive)[85](index=85&type=chunk) - The Board believes that the concurrent roles of Chairman and Chief Executive Officer enhance the efficiency of the company's decision-making and execution, effectively seizing business opportunities[85](index=85&type=chunk) - Ms. Zou Yunli was unable to attend the company's Annual General Meeting held on June 5, 2025, which deviates from Code Provision C.1.6 (attendance of non-executive directors at general meetings)[86](index=86&type=chunk) [Employees and Remuneration Policy](index=37&type=section&id=Employees%20and%20Remuneration%20Policy) As of June 30, 2025, the Group had approximately 430 employees, with total employee costs of RMB 55.4 million, adhering to a competitive remuneration principle to attract talent, establishing a compensation management system, and focusing on training - As of June 30, 2025, the Group had approximately **430 employees** (December 31, 2024: approximately **373 employees**)[87](index=87&type=chunk) - For the six months ended June 30, 2025, total employee costs were approximately **RMB 55.4 million** (prior period: approximately **RMB 52.7 million**)[87](index=87&type=chunk) - The company adheres to the principle of "competitive remuneration to attract high-quality talent," establishing a remuneration management system and talent incentive mechanism, and focusing on employee training system development[87](index=87&type=chunk) [Review of Interim Results](index=37&type=section&id=Review%20of%20Interim%20Results) The Audit Committee reviewed the Group's unaudited consolidated interim results and financial information for the six months ended June 30, 2025, confirming no objections to the accounting principles and practices adopted - The Audit Committee reviewed the Group's unaudited consolidated interim results and financial information for the six months ended June 30, 2025[89](index=89&type=chunk) - The Audit Committee confirmed no objections to the accounting principles and practices adopted by the company[89](index=89&type=chunk) [Events After Reporting Period](index=38&type=section&id=Events%20After%20Reporting%20Period) As of July 15, 2025, the company completed the disposal of its remaining equity interest in Zhongcaiwangtong, which is no longer an associate of the company - On July 15, 2025, the company completed the disposal of its remaining **1,358,954,030 shares** in Zhongcaiwangtong[90](index=90&type=chunk) - Following the completion of the disposal and acquisition, the company no longer directly or indirectly holds any interest in Zhongcaiwangtong, and Zhongcaiwangtong is no longer an associate of the company[90](index=90&type=chunk) [Publication of Interim Report](index=38&type=section&id=Publication%20of%20Interim%20Report) This interim results announcement has been published on the HKEX and company websites, and the interim report will be dispatched to shareholders and published at an appropriate time - This interim results announcement has been published on the HKEX website (www.hkexnews.hk) and the company's website (www.vala.life)[91](index=91&type=chunk) - The interim report will be dispatched to shareholders and published on the aforementioned two websites at an appropriate time[91](index=91&type=chunk)

[Announcement Cover and Disclaimer](index=1&type=section&id=Announcement%20Cover%20and%20Disclaimer) This section presents the announcement cover and disclaimer [Financial Statements](index=2&type=section&id=Financial%20Statements) This section presents the Group's condensed interim financial statements [Condensed Consolidated Interim Statement of Profit or Loss](index=2&type=section&id=Condensed%20Consolidated%20Interim%20Statement%20of%20Profit%20or%20Loss) The Group reported a net loss of **HKD 99,956 thousand** for the six months ended June 30, 2025, a reversal from the prior period's net profit, driven by decreased revenue, a gross loss, and higher finance costs and loan loss provisions Condensed Consolidated Interim Statement of Profit or Loss Key Data | Indicator | June 30, 2025 (thousand HKD) | June 30, 2024 (thousand HKD) | | :--- | :--- | :--- | | Revenue | 74,662 | 143,797 | | Cost of sales | (84,801) | (112,948) | | Gross (loss)/profit | (10,139) | 30,849 | | Other income and gains | 13,823 | 18,709 | | Administrative expenses | (16,130) | (17,690) | | Finance costs | (36,803) | (20,780) | | Provision for loss on loans to an associate | (63,664) | (1,544) | | (Loss)/profit before tax | (113,080) | 9,544 | | Income tax credit/(expense) | 13,124 | (1,619) | | (Loss)/profit for the period | (99,956) | 7,925 | | (Loss)/earnings per share (HK cents) | (0.78) | 0.06 | [Condensed Consolidated Interim Statement of Comprehensive Income](index=3&type=section&id=Condensed%20Consolidated%20Interim%20Statement%20of%20Comprehensive%20Income) Total comprehensive income for the period shifted from a loss to a gain, primarily due to significant exchange differences from foreign operations translation, offsetting the net loss and negative cash flow hedge impacts Condensed Consolidated Interim Statement of Comprehensive Income Key Data | Indicator | June 30, 2025 (thousand HKD) | June 30, 2024 (thousand HKD) | | :--- | :--- | :--- | | (Loss)/profit for the period | (99,956) | 7,925 | | Effective portion of cash flow hedges | (3,406) | 3,860 | | Reclassification adjustment for cash flow hedges | (3,050) | (27,357) | | Income tax effect on cash flow hedges | 1,614 | 5,874 | | Exchange differences arising from translation of foreign operations | 149,571 | (28,649) | | Other comprehensive income/(loss) for the period, net of tax | 144,729 | (46,272) | | Total comprehensive income/(loss) for the period | 44,773 | (38,347) | [Condensed Consolidated Interim Statement of Financial Position](index=4&type=section&id=Condensed%20Consolidated%20Interim%20Statement%20of%20Financial%20Position) As of June 30, 2025, the Group's total assets and net equity increased, but a significant rise in current liabilities resulted in negative net current liabilities, mainly due to reclassified bank borrowings Condensed Consolidated Interim Statement of Financial Position Key Data | Indicator | June 30, 2025 (thousand HKD) | December 31, 2024 (thousand HKD) | | :--- | :--- | :--- | | Total non-current assets | 2,667,065 | 2,253,400 | | Total current assets | 1,085,841 | 1,214,563 | | Total assets | 3,752,906 | 3,467,963 | | Total current liabilities | 1,680,482 | 82,472 | | Net current (liabilities)/assets | (594,641) | 1,132,091 | | Total non-current liabilities | 155,990 | 1,513,830 | | Net assets | 1,916,434 | 1,871,661 | | Total equity | 1,916,434 | 1,871,661 | [Notes to the Condensed Consolidated Interim Financial Information](index=6&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Interim%20Financial%20Information) This section provides detailed notes and explanations for the condensed consolidated interim financial information [Company Information](index=6&type=section&id=Company%20Information) The Company is a Bermuda-incorporated investment holding company, with subsidiaries primarily engaged in hotel operations and financing businesses - The Company's principal business is investment holding, with subsidiaries primarily engaged in hotel operations and financing businesses[9](index=9&type=chunk) [Basis of Preparation and Going Concern](index=6&type=section&id=Basis%20of%20Preparation%20and%20Going%20Concern) Interim financial information is prepared under HKAS 34; despite failing loan covenants and reclassifying substantial bank borrowings as current liabilities, the Group secured lender waivers, affirming the going concern basis - The interim financial information is prepared in accordance with HKAS 34[10](index=10&type=chunk) - The Group failed to meet financial ratios in loan covenants, resulting in **HKD 1,582,077 thousand** of bank borrowings being reclassified as current liabilities[10](index=10&type=chunk) - The Group has placed additional collateral deposits and obtained waivers from lenders, and the directors consider the preparation of financial information on a going concern basis to be appropriate[10](index=10&type=chunk) [Changes in Accounting Policies](index=6&type=section&id=Changes%20in%20Accounting%20Policies) Revised HKFRS accounting standards were adopted this period, with no anticipated material impact on the Group's operating results or financial position - Revised HKFRS accounting standards, including amendments to HKAS 21, were adopted for the first time during this period[11](index=11&type=chunk)[12](index=12&type=chunk) - The changes in accounting policies are not expected to have a significant impact on the Group's operating results and financial position[12](index=12&type=chunk) [Segment Information](index=7&type=section&id=Segment%20Information) The Group operates two reportable segments: hotel operations, which shifted from profit to loss, and financing business, which continued to incur losses - The Group has two reportable operating segments: hotel operations in France and financing business in Hong Kong[13](index=13&type=chunk) Segment Performance Overview | Segment | June 30, 2025 (thousand HKD) | June 30, 2024 (thousand HKD) | | :--- | :--- | :--- | | **Revenue** | | | | Hotel operations | 74,662 | 143,797 | | Financing business | – | – | | **Segment (loss)/profit** | | | | Hotel operations | (53,031) | 3,801 | | Financing business | (469) | (467) | | **(Loss)/profit before tax** | (113,080) | 9,544 | - Non-current assets are primarily located in France, totaling **HKD 2,533,656 thousand** as of June 30, 2025, an increase from **HKD 2,189,434 thousand** as of December 31, 2024[16](index=16&type=chunk) [Revenue, Other Income and Gains](index=9&type=section&id=Revenue%2C%20Other%20Income%20and%20Gains) Revenue for the period, primarily from accommodation services, decreased **48.1%** year-on-year, largely due to hotel renovations, alongside a reduction in bank interest income Revenue and Other Income Analysis | Item | June 30, 2025 (thousand HKD) | June 30, 2024 (thousand HKD) | | :--- | :--- | :--- | | **Revenue** | | | | Provision of services | 74,662 | 143,797 | | **Other income** | | | | Bank interest income | 13,291 | 17,377 | | Rental income | 532 | 694 | | Exchange gain | – | 638 | | **Total** | 88,485 | 162,506 | Revenue from Contracts with Customers by Service Type | Service Type | June 30, 2025 (thousand HKD) | June 30, 2024 (thousand HKD) | | :--- | :--- | :--- | | Provision of accommodation services | 67,540 | 123,481 | | Provision of food and beverage services | 6,019 | 17,392 | | Provision of travel agency services | 943 | 2,548 | | Provision of laundry services | 160 | 376 | | **Total revenue from contracts with customers** | 74,662 | 143,797 | - All revenue from contracts with customers is derived from the French market and recognized over time[18](index=18&type=chunk) [Components of Profit Before Tax](index=10&type=section&id=Components%20of%20Profit%20Before%20Tax) Loss before tax was primarily influenced by increased hotel service costs, depreciation and amortization, and higher provisions for losses on loans to associates Items Deducted/Credited to Profit Before Tax | Item | June 30, 2025 (thousand HKD) | June 30, 2024 (thousand HKD) | | :--- | :--- | :--- | | Cost of hotel services | 67,175 | 91,044 | | Depreciation of property, plant and equipment | 18,758 | 21,883 | | Depreciation of right-of-use assets | 758 | 843 | | Amortisation of intangible assets | 19 | 23 | | Provision for loss on loans to an associate | 63,664 | 1,544 | | Net exchange difference | 167 | (638) | [Income Tax](index=11&type=section&id=Income%20Tax) The Group is subject to income tax in Hong Kong, Mainland China, France, and Luxembourg at local rates, reporting an income tax credit this period compared to an expense last year - Hong Kong profits tax rate is **16.5%**, with the first **HKD 2,000,000** for qualifying entities taxed at **8.25%**[20](index=20&type=chunk) - The statutory tax rate in Mainland China is **25%**, France is **25%**, and Luxembourg is **24.94%**[20](index=20&type=chunk)[21](index=21&type=chunk) Total Income Tax (Credit)/Expense | Item | June 30, 2025 (thousand HKD) | June 30, 2024 (thousand HKD) | | :--- | :--- | :--- | | Total deferred and current income tax (credit)/expense for the period | (13,124) | 1,619 | [Dividend Policy](index=11&type=section&id=Dividend%20Policy) The Board does not recommend an interim dividend for this period, consistent with the prior period - The Board does not recommend the payment of an interim dividend for the current period[23](index=23&type=chunk) [Loss/Earnings Per Share](index=11&type=section&id=Loss%2FEarnings%20Per%20Share) Basic and diluted loss per share for the period was **0.78 HK cents**, a shift from **0.06 HK cents** earnings per share in the prior period, primarily due to the period's net loss Loss/Earnings Per Share Data | Indicator | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | (Loss)/profit attributable to ordinary equity holders of the Company (thousand HKD) | (99,956) | 7,925 | | Basic and diluted (loss)/earnings per share (HK cents) | (0.78) | 0.06 | | Weighted average number of ordinary shares in issue (thousand shares) | 12,778,880 | 12,778,880 | - The Group had no potential dilutive ordinary shares outstanding[25](index=25&type=chunk) [Trade Receivables](index=12&type=section&id=Trade%20Receivables) As of June 30, 2025, the aging analysis of trade receivables (net of loss allowance) shows all receivables are within one month Aging Analysis of Trade Receivables | Aging | June 30, 2025 (thousand HKD) | December 31, 2024 (thousand HKD) | | :--- | :--- | :--- | | Within 1 month | 12,798 | 13,188 | [Trade Payables](index=12&type=section&id=Trade%20Payables) As of June 30, 2025, the aging analysis of trade payables shows all payables are within one month Aging Analysis of Trade Payables | Aging | June 30, 2025 (thousand HKD) | December 31, 2024 (thousand HKD) | | :--- | :--- | :--- | | Within 1 month | 3,055 | 4,061 | [Events After the Reporting Period](index=12&type=section&id=Events%20After%20the%20Reporting%20Period) As of the financial information approval date, the Group had no significant events after the reporting period - The Group had not undertaken any significant events after the reporting period[29](index=29&type=chunk) [Management Discussion and Analysis](index=13&type=section&id=Management%20Discussion%20and%20Analysis) This section provides an overview and analysis of the Group's financial performance, operational results, and future outlook [Business Review](index=13&type=section&id=Business%20Review) The Group's revenue declined **48.1%** this period, shifting to a loss, primarily due to reduced income from Paris Marriott Hotel's Phase II renovation, increased loan impairment provisions for associates, and higher finance costs - Revenue for the period was approximately **HKD 74.7 million**, a year-on-year decrease of approximately **48.1%**, primarily due to the Phase II renovation of the Paris Marriott Hotel[31](index=31&type=chunk) - A loss of approximately **HKD 100 million** was recorded for the period, compared to a profit of approximately **HKD 7.9 million** in the prior period[32](index=32&type=chunk) - The loss was primarily attributable to reduced income from hotel renovations, an impairment provision of approximately **HKD 63.7 million** for loans to associates, increased finance costs, and decreased other income[32](index=32&type=chunk) [Overall Performance Overview](index=13&type=section&id=Overall%20Performance%20Overview) Total non-current assets increased **18.4%** due to Euro appreciation and loan reclassification, while current assets decreased **10.6%** from reclassification and cash reduction; current liabilities surged **1,937.6%** due to reclassified bank borrowings Asset and Liability Changes Overview | Indicator | June 30, 2025 (approx. HKD) | December 31, 2024 (approx. HKD) | Change Rate | | :--- | :--- | :--- | :--- | | Total non-current assets | 2,667,100,000 | 2,253,400,000 | +18.4% | | Total current assets | 1,085,800,000 | 1,214,600,000 | -10.6% | | Total current liabilities | 1,680,500,000 | 82,500,000 | +1,937.6% | | Total non-current liabilities | 156,000,000 | 1,513,800,000 | -89.7% | - The increase in non-current assets was mainly due to the appreciation of the Euro against HKD and the reclassification of loans to associates from current to non-current assets[33](index=33&type=chunk) - The significant increase in current liabilities was primarily due to the failure to meet financial ratio requirements for the Paris Marriott Hotel Phase II renovation financing arrangement, leading to the reclassification of interest-bearing bank borrowings from non-current to current liabilities[34](index=34&type=chunk) [Hotel Operations Segment](index=15&type=section&id=Hotel%20Operations%20Segment) Hotel operations revenue decreased **48.1%** year-on-year, shifting to a loss, primarily due to the Paris Marriott Hotel's Phase II renovation significantly reducing room availability - Revenue from the hotel operations segment was approximately **HKD 74.7 million**, a year-on-year decrease of approximately **48.1%**[35](index=35&type=chunk) - Due to the Phase II renovation, the Paris Marriott Hotel had fewer than **70 rooms** available, resulting in reduced revenue and a recorded loss of approximately **HKD 53 million**[35](index=35&type=chunk) Paris Marriott Hotel Operating Performance | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | Occupancy Rate | 33.4% | 78.9% | | Average Room Rate (Euro) | 695 | 545 | | Revenue Per Available Room (Euro) | 232 | 430 | [Financing Business Segment](index=15&type=section&id=Financing%20Business%20Segment) The financing business segment reported no revenue and a continuous loss of approximately **HKD 500 thousand** for the period, with no mortgage loan receivables at period-end - The financing business segment generated no revenue during the period, recording a loss of approximately **HKD 500 thousand**[38](index=38&type=chunk) - As of June 30, 2025, there were no mortgage loan receivables[38](index=38&type=chunk) [Equity Investments and Loans to Associates](index=16&type=section&id=Equity%20Investments%20and%20Loans%20to%20Associates) The court rejected the Group's loan enforcement application for an associate, which entered bankruptcy reorganization; while equity may be diluted, the loans are unaffected, leading to an expected credit loss provision of approximately **HKD 63.7 million** under HKFRS 9 - The court rejected the Group's enforcement application for the pledged assets, and the pledged associate has been approved to commence pre-reorganization procedures[40](index=40&type=chunk) - Under the restructuring plan, the Group's indirectly held **37.125%** equity interest in the pledged associate may be diluted, but the loans provided to the associate (secured by pledged assets) are not within the scope of the restructuring and will not be eliminated or reduced[40](index=40&type=chunk) - The Group assessed the credit risk status of the pledged assets as Stage 3 (default stage) under HKFRS 9[41](index=41&type=chunk)[42](index=42&type=chunk) Expected Credit Loss Assessment | Item | June 30, 2025 (approx. RMB) | December 31, 2024 (approx. RMB) | | :--- | :--- | :--- | | Value of pledged assets | 121,800,000 | 121,800,000 | | Unpaid construction costs | 42,100,000 | 19,500,000 | | Impact of restructuring plan | 37,300,000 | 0 | | Default debt exposure | 199,500,000 | 199,500,000 | | **Expected credit loss** | 157,100,000 | 97,200,000 | | **Expected credit loss provision for the period (HKD)** | 63,700,000 | 0 | [Outlook](index=19&type=section&id=Outlook) Hotel operations anticipate revitalization post-renovation, yet face challenges from European inflation, geopolitical tensions, and new environmental policies; the financing market remains competitive and uncertain, prompting the Group to review assets and seek new investments [Hotel Operations Outlook](index=19&type=section&id=Hotel%20Operations%20Outlook) Paris Marriott Hotel's renovation is expected to conclude by late 2025, revitalizing it for 2026, but faces challenges from European inflation, geopolitical tensions, and new French environmental policies - The renovated rooms of the Paris Marriott Hotel are expected to be completed by the end of December 2025, with a refreshed appearance in 2026[46](index=46&type=chunk) - The segment faces multiple challenges, including rising European prices, geopolitical tensions between Ukraine and Russia, and new environmental policies in France[46](index=46&type=chunk) [Financing Business Outlook](index=20&type=section&id=Financing%20Business%20Outlook) The Hong Kong mortgage loan market continues to be challenging, highly competitive, and uncertain, necessitating cautious action from the Board - The Hong Kong mortgage loan market will remain challenging, highly competitive, and uncertain[47](index=47&type=chunk) [Equity Investment Outlook](index=20&type=section&id=Equity%20Investment%20Outlook) The Company will keep shareholders and investors informed of any significant developments regarding the associate's reorganization - The Company will inform shareholders and investors of any significant developments regarding the associate's reorganization[48](index=48&type=chunk) [Overall Strategic Outlook](index=20&type=section&id=Overall%20Strategic%20Outlook) The Board will review the Group's portfolio to enhance asset quality and actively seek new business investment opportunities to boost shareholder returns - The Board will review the Group's portfolio to restructure and enhance the quality of its assets[49](index=49&type=chunk) - The Group will continue to explore investment opportunities in new business segments to enhance and improve returns for the Company's stakeholders[49](index=49&type=chunk) [Liquidity and Financial Resources](index=20&type=section&id=Liquidity%20and%20Financial%20Resources) As of June 30, 2025, the Group's total assets and net equity increased, but cash and bank balances decreased, resulting in negative net current assets and a higher gearing ratio, with continued prudent financial management Liquidity and Financial Resources Overview | Indicator | June 30, 2025 (approx. HKD) | December 31, 2024 (approx. HKD) | | :--- | :--- | :--- | | Total assets | 3,752,900,000 | 3,468,000,000 | | Net assets | 1,916,400,000 | 1,871,100,000 | | Cash and bank balances | 928,700,000 | 994,500,000 | | Total current assets | 1,085,800,000 | 1,214,600,000 | | Net current liabilities/(assets) | (594,600,000) | 1,132,100,000 (Net current assets) | | Outstanding bank loans and other borrowings | 1,582,100,000 | 1,379,100,000 | | Gearing ratio (Total borrowings/Total assets) | 42.2% | 39.8% | - The annual interest rate for outstanding bank loans and other borrowings is three-month EURIBOR converted to a fixed rate plus **2.5%**[51](index=51&type=chunk) - The Group adopts a prudent financial approach, strictly monitoring cash management and continuously tracking cash flows, loan maturities, available bank facilities, gearing ratio, and interest rate risks[50](index=50&type=chunk) [Material Transactions](index=21&type=section&id=Material%20Transactions) The Group conducted no material acquisitions or disposals of subsidiaries, associates, or joint ventures during this period - During the period, the Group did not undertake any material acquisitions or disposals concerning subsidiaries, associates, or joint ventures[52](index=52&type=chunk) [Risk Management](index=21&type=section&id=Risk%20Management) This section outlines the Group's approach to managing various financial and operational risks [Foreign Exchange Risk](index=21&type=section&id=Foreign%20Exchange%20Risk) Operating across France, Luxembourg, China, and Hong Kong, the Group is exposed to Euro and RMB foreign currency risks, which are regularly monitored, though no forward contracts were used for hedging this period - The Group is exposed to foreign currency risks from the Euro and RMB, primarily arising from its daily business operations and financing activities[53](index=53&type=chunk) - For the six months ended June 30, 2025, the Group did not enter into any forward contracts to hedge foreign exchange risk[53](index=53&type=chunk) - The Group manages foreign exchange risk through regular review and monitoring, and will consider foreign exchange hedging arrangements when appropriate and necessary[53](index=53&type=chunk) [Contingent Liabilities](index=21&type=section&id=Contingent%20Liabilities) As of June 30, 2025, the Group reported no contingent liabilities - As of June 30, 2025, the Group had no contingent liabilities[54](index=54&type=chunk) [Pledged Assets](index=21&type=section&id=Pledged%20Assets) As of June 30, 2025, approximately **HKD 67.3 million** in cash deposits and **HKD 2.5333 billion** in buildings were pledged as collateral for the Group's bank loans Pledged Assets Status | Pledged Assets | June 30, 2025 (approx. HKD) | December 31, 2024 (approx. HKD) | | :--- | :--- | :--- | | Cash deposits | 67,300,000 | 38,300,000 | | Buildings (net book value) | 2,533,300,000 | 2,189,100,000 | - The aforementioned assets have been pledged as collateral for bank loans granted to the Group[55](index=55&type=chunk) [Employees and Remuneration](index=21&type=section&id=Employees%20and%20Remuneration) As of June 30, 2025, the Group employed **9 individuals** with total remuneration of approximately **HKD 3.6 million**, regularly reviewing its policy to provide bonuses, MPF, medical insurance, and share option schemes Employees and Remuneration Overview | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Number of employees | 9 | 9 | | Total employee remuneration (approx. HKD) | 3,600,000 | 3,200,000 (prior period) | - The Group regularly reviews its remuneration policy, providing benefits such as basic salary, bonuses, Mandatory Provident Fund Scheme, medical insurance plans, and participation in share option schemes[56](index=56&type=chunk) [Securities Transactions](index=22&type=section&id=Securities%20Transactions) Neither the Company nor its subsidiaries purchased, redeemed, or sold any of the Company's listed securities during this period - During the period, neither the Company nor any of its subsidiaries purchased, redeemed, or sold any of the Company's listed securities[57](index=57&type=chunk) [Corporate Governance](index=22&type=section&id=Corporate%20Governance) This section details the Group's corporate governance practices, including board structure and committee functions [Corporate Governance Report](index=22&type=section&id=Corporate%20Governance%20Report) The Board and management uphold high corporate governance standards, adhering to Listing Rules; a chairman vacancy during the period led to executive directors sharing duties, a noted deviation - The Board and management are committed to maintaining high standards of corporate governance and complying with the Corporate Governance Code set out in Appendix C1 of the Listing Rules[58](index=58&type=chunk) - During the period, there were deviations from Corporate Governance Code Provision C.2.1 (no chairman) and F.2.2 (no chairman presiding over the annual general meeting)[58](index=58&type=chunk) - The chairman's responsibilities are shared among the executive directors, and the Company will continuously review and revise its corporate governance policies[58](index=58&type=chunk)[59](index=59&type=chunk) [Audit Committee](index=23&type=section&id=Audit%20Committee) Composed of four independent non-executive directors, the Audit Committee reviewed the Group's accounting policies, risk management, and internal controls, expressing satisfaction with procedures and financial reporting disclosures - The Audit Committee comprises four independent non-executive directors, with Mr. Tam San Wing as Chairman[60](index=60&type=chunk) - The Committee has reviewed the Group's accounting policies, risk management, and internal control systems, and expressed satisfaction with the internal control procedures and financial reporting disclosures[60](index=60&type=chunk) [Remuneration Committee](index=23&type=section&id=Remuneration%20Committee) Comprising one executive and four independent non-executive directors, the Remuneration Committee advises on compensation policies and structures for directors and senior management - The Remuneration Committee is responsible for making recommendations to the Board on the remuneration policies and structures for directors and senior management[61](index=61&type=chunk) - The Committee comprises one executive director (Mr. Law Wing Chi) and four independent non-executive directors, with Mr. Tam San Wing as Chairman[61](index=61&type=chunk) [Nomination Committee](index=23&type=section&id=Nomination%20Committee) Comprising one executive and four independent non-executive directors, the Nomination Committee reviews the Board's structure, size, and composition - The Nomination Committee is responsible for reviewing the structure, size, and composition of the Board[62](index=62&type=chunk) - The Committee comprises one executive director (Mr. Law Wing Chi) and four independent non-executive directors, with Mr. Ng Chi Pan as Chairman[62](index=62&type=chunk) [Directors' Information Update under Listing Rule 13.51B](index=24&type=section&id=Directors'%20Information%20Update%20under%20Listing%20Rule%2013.51B) Independent Non-executive Director Ms. Kwok Pui Ha was appointed as an independent non-executive director for International Aerospace Technology Group Limited from July 1, 2025, and for Digital Domain Holdings Limited from August 15, 2025 - Independent Non-executive Director Ms. Kwok Pui Ha was appointed as an independent non-executive director of International Aerospace Technology Group Limited (Stock Code: 01725), effective July 1, 2025[63](index=63&type=chunk) - Ms. Kwok was also appointed as an independent non-executive director of Digital Domain Holdings Limited (Stock Code: 02350), effective August 15, 2025[63](index=63&type=chunk) [Directors' Securities Dealing Code](index=24&type=section&id=Directors'%20Securities%20Dealing%20Code) The Company adopted a directors' securities dealing code no less exacting than the Listing Rules' Model Code, with directors confirming compliance throughout the period - The Company has adopted a code of conduct for directors' securities transactions no less exacting than the Model Code set out in Appendix C3 of the Listing Rules[64](index=64&type=chunk) - The directors have confirmed compliance with the Model Code and the Company's code of conduct throughout the period[64](index=64&type=chunk) [Report Publication Information](index=25&type=section&id=Report%20Publication%20Information) This interim results announcement is published on the HKEX and Company websites; the interim report will be dispatched to shareholders and posted on these sites in due course - The interim results announcement has been published on the HKEX website (www.hkex.com.hk) and the Company's website (www.kaiyuanholdings.com)[65](index=65&type=chunk) - The interim report will be dispatched to shareholders and posted on the aforementioned websites in due course[65](index=65&type=chunk) [Sign-off Information](index=25&type=section&id=Sign-off%20Information) This announcement was signed by Executive Director Mr. Law Wing Chi on August 29, 2025, on behalf of the Board, which consists of two executive and four independent non-executive directors - This announcement was signed by Mr. Law Wing Chi, Executive Director, on behalf of the Board on August 29, 2025[66](index=66&type=chunk) - The Board comprises Executive Directors Mr. Xue Jian and Mr. Law Wing Chi, and Independent Non-executive Directors Mr. Tam San Wing, Mr. Ng Chi Pan, Mr. He Yi, and Ms. Kwok Pui Ha[66](index=66&type=chunk)

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不負責， 對其準確性或完整性亦不發表任何聲明，並明確表示，概不對因本公告全部或任何 部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。 GLOBAL CORN GROUP LIMITED 大成玉米集團有限公司 * （ 於 開 曼 群 島 註 冊 成 立 的 有 限 公 司 ） （股份代號：03889） 截至2025年6月30日止六個月 中期業績公告 大成玉米集團有限公司（前稱大成糖業控股有限公司，「本公司」）董事（「董事」）會 （「董事會」）謹此公佈本公司及其附屬公司（統稱「本集團」）截至2025年6月30日止 六個月（「本期間」）的未經審核綜合中期業績。 簡明綜合損益及其他全面收益表 截至2025年6月30日止六個月 | | | 截至6月30日止六個月 | | | --- | --- | --- | --- | | | | 2025年 | 2024年 | | | | （未經審核） | （未經審核） | | | 附註 | 千港元 | 千港元 | | 收益 | 4 | 253,647 | 332,475 | | 銷售成本 | | (229 ...

[Condensed Consolidated Statement of Profit or Loss](index=2&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E6%90%8D%E7%9B%8A%E8%A1%A8) This section provides an overview of the company's financial performance, showing a shift from profit to loss primarily due to fair value losses on financial assets [Overview of Condensed Consolidated Statement of Profit or Loss](index=2&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E6%90%8D%E7%9B%8A%E8%A1%A8%E6%A6%82%E8%A7%88) The company recorded a net loss for the six months ended June 30, 2025, primarily due to unrealized losses on financial assets at fair value through profit or loss Condensed Consolidated Statement of Profit or Loss | Indicator | June 30, 2025 (US$ thousand) | June 30, 2024 (US$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 63,109 | 65,821 | -4.1% | | Cost of sales | (53,201) | (59,721) | -10.9% | | Gross profit | 9,908 | 6,100 | +62.4% | | (Loss)/profit from operations | (13,509) | 28,618 | Shift from profit to loss | | (Loss)/profit for the period and attributable to owners | (15,108) | 27,717 | Shift from profit to loss | | Basic (loss)/earnings per share (US cents) | (3.97) | 7.64 | Shift from profit to loss | - The net loss was mainly due to the recognition of a net unrealized loss of approximately **US$19,100 thousand** on financial assets at fair value through profit or loss[5](index=5&type=chunk) - Excluding this loss, the company would have recorded a profit of approximately **US$4,000 thousand** for the period[5](index=5&type=chunk)[36](index=36&type=chunk) [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=3&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%E5%85%A5%E8%A1%A8) This section presents the company's net loss for the period and positive foreign currency translation differences, resulting in a total comprehensive loss [Overview of Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=3&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%E5%85%A5%E8%A1%A8%E6%A6%82%E8%A7%88) For the six months ended June 30, 2025, the company reported a net loss of US$15,108 thousand, with positive foreign currency translation differences leading to a total comprehensive loss of US$10,572 thousand Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income | Indicator | June 30, 2025 (US$ thousand) | June 30, 2024 (US$ thousand) | | :--- | :--- | :--- | | (Loss)/profit for the period | (15,108) | 27,717 | | Exchange differences on translation of foreign operations | 4,536 | (283) | | Other comprehensive income for the period | 4,536 | (192) | | Total comprehensive income for the period and attributable to owners | (10,572) | 27,525 | - In H1 2025, foreign currency translation generated a gain of **US$4,536 thousand**, compared to a loss of **US$283 thousand** in the prior period[7](index=7&type=chunk) [Condensed Consolidated Statement of Financial Position](index=4&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81%E8%A1%A8) This section details the company's assets, liabilities, and equity, showing a decrease in total assets and net assets, mainly due to a reduction in non-current financial assets [Overview of Condensed Consolidated Statement of Financial Position](index=4&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81%E8%A1%A8%E6%A6%82%E8%A7%88) As of June 30, 2025, total assets and net assets decreased, primarily due to a significant reduction in non-current financial assets at fair value through profit or loss Condensed Consolidated Statement of Financial Position | Indicator | June 30, 2025 (US$ thousand) | December 31, 2024 (US$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Total non-current assets | 47,575 | 65,831 | -27.7% | | Total current assets | 396,885 | 386,297 | +2.7% | | Total current liabilities | 22,099 | 21,142 | +4.5% | | Net current assets | 374,786 | 365,155 | +2.6% | | Net assets | 421,797 | 430,410 | -2.0% | - Non-current financial assets at fair value through profit or loss decreased by approximately **44.0%** from **US$43,431 thousand** to **US$24,296 thousand**[8](index=8&type=chunk)[11](index=11&type=chunk) - Inventories increased by **44.8%** from **US$22,279 thousand** to **US$32,263 thousand**[8](index=8&type=chunk) [Condensed Consolidated Statement of Changes in Equity](index=6&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) This section illustrates the changes in the company's total equity, primarily driven by the total comprehensive loss for the period, partially offset by new share issuance [Overview of Condensed Consolidated Statement of Changes in Equity](index=6&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%E6%A6%82%E8%A7%88) Total equity decreased from US$430,410 thousand to US$421,797 thousand, mainly due to the total comprehensive loss, partially offset by shares issued from convertible bond conversion Condensed Consolidated Statement of Changes in Equity | Indicator | January 1, 2025 (US$ thousand) | June 30, 2025 (US$ thousand) | Change (US$ thousand) | | :--- | :--- | :--- | :--- | | Total equity | 430,410 | 421,797 | (8,613) | - Total comprehensive income for the period was a **loss of US$10,572 thousand**[10](index=10&type=chunk) - Share capital increased by **US$1,959 thousand** due to shares issued upon convertible bond conversion[10](index=10&type=chunk) [Notes to the Unaudited Interim Condensed Consolidated Financial Statements](index=7&type=section&id=%E6%9C%AA%E7%B6%93%E5%AF%A9%E6%A0%B8%E4%B8%AD%E6%9C%9F%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8%E9%99%84%E8%A8%BB) This section provides detailed explanations and disclosures supporting the interim condensed consolidated financial statements [1. Basis of Preparation](index=7&type=section&id=1.%20%E7%B7%A8%E8%A3%BD%E5%9F%BA%E6%BA%96) The interim financial statements are prepared in accordance with HKAS 34 and applicable disclosure requirements of the Listing Rules - The statements are prepared in accordance with **HKAS 34 "Interim Financial Reporting"** and **Appendix D2 of the Listing Rules**[11](index=11&type=chunk) [2. Changes in Significant Accounting Policies](index=7&type=section&id=2.%20%E4%B8%BB%E8%A6%81%E6%9C%83%E8%A8%88%E6%94%BF%E7%AD%96%E8%AE%8A%E5%8B%95) The financial statements adopted amendments to HKAS 21 and HKFRS 1 effective January 1, 2025, with no significant impact on accounting policies - Adopted amendments to **HKAS 21** and **HKFRS 1 "Lack of Exchangeability"** effective January 1, 2025[13](index=13&type=chunk) - The adoption of these amended HKFRSs had **no significant impact** on the Group's accounting policies[13](index=13&type=chunk) [3. Revenue and Segment Information](index=8&type=section&id=3.%20%E6%94%B6%E7%9B%8A%E5%8F%8A%E5%88%86%E9%83%A8%E8%B3%87%E6%96%99) Revenue primarily from graphite and electronic product manufacturing and sales, with total revenue decreasing by 4.1% year-on-year, driven by a significant drop in graphite product revenue and growth in electronic products - Revenue is derived from the **production and sale of graphite products**, **manufacturing and sale of electronic products**, and **design of electronic products**[14](index=14&type=chunk) Segment Revenue and Results | Segment | June 30, 2025 Revenue (US$ thousand) | June 30, 2024 Revenue (US$ thousand) | Revenue Change (%) | June 30, 2025 Results (US$ thousand) | June 30, 2024 Results (US$ thousand) | Results Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Graphite products | 12,069 | 21,618 | -44.2% | 844 | 314 | +168.8% | | Electronic products | 51,040 | 44,160 | +15.6% | 6,683 | 3,861 | +73.1% | | Design and manufacturing | – | 43 | -100% | – | (299) | Shift from loss to profit | | **Total** | **63,109** | **65,821** | **-4.1%** | **7,527** | **3,876** | **+94.2%** | - Operating activities resulted in a **loss of US$13,509 thousand** in H1 2025, compared to a **profit of US$28,618 thousand** in the prior period[14](index=14&type=chunk)[15](index=15&type=chunk) [4. Other Income](index=9&type=section&id=4.%20%E5%85%B6%E4%BB%96%E6%94%B6%E5%85%A5) Other income significantly decreased in H1 2025 due to reduced rental and miscellaneous income, and the first-time recognition of realized cryptocurrency losses Other Income Details | Item | June 30, 2025 (US$ thousand) | June 30, 2024 (US$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Bank interest income | 3 | 66 | -95.5% | | Rental income | 55 | 1,358 | -95.9% | | Realized loss on cryptocurrency | (2) | – | New loss | | Miscellaneous income | 55 | 907 | -93.9% | | **Total** | **111** | **2,331** | **-95.2%** | - Significant decreases in **rental income** and **miscellaneous income** were the primary reasons for the overall decline in other income[16](index=16&type=chunk) [5. (Loss)/Profit from Operations](index=9&type=section&id=5.%20%E7%B6%93%E7%87%9F%E6%B4%BB%E5%8B%95%EF%BC%88%E虧%E6%90%8D%EF%BC%89%E2%88%95%E6%BA%A2%E5%88%A9) Operating activities shifted from profit to loss in H1 2025, mainly influenced by changes in depreciation expenses Depreciation Expenses | Item | June 30, 2025 (US$ thousand) | June 30, 2024 (US$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Depreciation of owned property, plant and equipment and investment properties | 716 | 1,873 | -61.8% | | Depreciation of right-of-use assets | 192 | 191 | +0.5% | - **No interest on amounts due from joint ventures** in H1 2025, compared to **US$85 thousand** in the prior period[17](index=17&type=chunk) [6. Income Tax Expense](index=9&type=section&id=6.%20%E6%89%80%E5%BE%97%E7%A8%85%E9%96%8B%E6%94%AF) Income tax expense increased by 78.6% year-on-year in H1 2025, calculated based on Hong Kong's two-tiered profits tax system and applicable overseas rates Income Tax Expense | Indicator | June 30, 2025 (US$ thousand) | June 30, 2024 (US$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Income tax expense | 1,591 | 891 | +78.6% | - Hong Kong profits tax is levied at **16.5%**, with qualifying subsidiaries taxed at **8.25%** for the first **HK$2,000,000** and **16.5%** thereafter; overseas subsidiaries are taxed at local applicable rates[18](index=18&type=chunk)[19](index=19&type=chunk) [7. (Loss)/Earnings Per Share](index=10&type=section&id=7.%20%E6%AF%8F%E8%82%A1%EF%BC%88%E虧%E6%90%8D%EF%BC%89%E2%88%95%E7%9B%88%E5%88%A9) Basic and diluted (loss)/earnings per share shifted from a profit of 7.64 US cents to a loss of 3.97 US cents in H1 2025 (Loss)/Earnings Per Share | Indicator | June 30, 2025 (US cents) | June 30, 2024 (US cents) | | :--- | :--- | :--- | | Basic and diluted (loss)/earnings per share | (3.97) | 7.64 | - Calculated based on **(loss)/profit attributable to owners** divided by the **weighted average number of ordinary shares** outstanding[20](index=20&type=chunk)[22](index=22&type=chunk) - Basic and diluted (loss)/earnings per share are the **same** as there were no potential dilutive ordinary shares outstanding during the reporting period[22](index=22&type=chunk) [8. Property, Plant and Equipment](index=10&type=section&id=8.%20%E7%89%A9%E6%A5%AD%E3%80%81%E5%BB%A0%E6%88%BF%E5%8F%8A%E8%A8%AD%E5%82%99) The company's purchases of property, plant and equipment significantly increased in H1 2025 compared to the prior period Purchases of Property, Plant and Equipment | Item | June 30, 2025 (US$ thousand) | June 30, 2024 (US$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Purchases of property, plant and equipment | 432 | 243 | +77.8% | - Total property, plant and equipment increased from **US$12,952 thousand** as of December 31, 2024, to **US$13,888 thousand** as of June 30, 2025[8](index=8&type=chunk)[23](index=23&type=chunk) [9. Trade Receivables](index=10&type=section&id=9.%20%E6%87%89%E6%94%B6%E8%B2%BF%E6%98%93%E8%B3%AC%E6%AC%BE) Total trade receivables slightly decreased as of June 30, 2025, but the aging structure deteriorated significantly, with a substantial increase in receivables over 90 days Aging Analysis of Trade Receivables | Aging | June 30, 2025 (US$ thousand) | December 31, 2024 (US$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | 0-30 days | 12,798 | 315,720 | -95.9% | | 31-60 days | 9,827 | 12,142 | -19.0% | | 61-90 days | 6,765 | 2,446 | +176.6% | | Over 90 days | 312,520 | 17,040 | +1733.5% | | **Total** | **341,910** | **347,348** | **-1.6%** | - Trade receivables over **90 days** surged from **US$17,040 thousand** to **US$312,520 thousand**, indicating a significant increase in collection risk[24](index=24&type=chunk) [10. Other Receivables, Deposits and Prepayments](index=11&type=section&id=10.%20%E5%85%B6%E4%BB%96%E6%87%89%E6%94%B6%E8%B2%A1%E6%AC%BE%E3%80%81%E6%8C%89%E9%87%91%E5%8F%8A%E9%A0%90%E4%BB%98%E6%AC%BE%E9%A0%85) Total other receivables, deposits, and prepayments significantly increased as of June 30, 2025, primarily driven by other deposits and prepayments Analysis of Other Receivables, Deposits and Prepayments | Item | June 30, 2025 (US$ thousand) | December 31, 2024 (US$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Other deposits and prepayments | 6,807 | 679 | +902.5% | | Other receivables | 1,484 | 1,484 | 0% | | **Total** | **8,291** | **2,163** | **+283.3%** | - **Other deposits and prepayments** increased by nearly **9 times**, being the main driver of the total increase in this category[25](index=25&type=chunk) [11. Financial Assets at Fair Value Through Profit or Loss](index=11&type=section&id=11.%20%E6%8C%89%E5%85%AC%E5%B9%B3%E5%80%BC%E8%A8%88%E5%85%A5%E6%90%8D%E7%9B%8A%E4%B9%8B%E9%87%91%E8%9E%8D%E8%B3%87%E7%94%A2) Total financial assets at fair value through profit or loss significantly decreased as of June 30, 2025, mainly due to a reduction in US OTC Pink Sheet market shares Financial Assets Details | Item | June 30, 2025 (US$ thousand) | December 31, 2024 (US$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Non-current assets - US OTC Pink Sheet market shares | 24,296 | 43,431 | -44.0% | | Current assets - Hong Kong listed shares | 244 | 244 | 0% | | **Total** | **24,540** | **43,675** | **-43.9%** | - The Group is exposed to **price risk** from its investments in these equity securities[25](index=25&type=chunk) [12. Trade Payables](index=11&type=section&id=12.%20%E6%87%89%E4%BB%98%E8%B2%BF%E6%98%93%E8%B3%AC%E6%AC%BE) Total trade payables decreased year-on-year as of June 30, 2025, with a notable reduction in payables aged 31-90 days Aging Analysis of Trade Payables | Aging | June 30, 2025 (US$ thousand) | December 31, 2024 (US$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | 0-30 days | 6,111 | 5,568 | +9.8% | | 31-60 days | 1,843 | 3,511 | -47.5% | | 61-90 days | 649 | 1,893 | -65.7% | | Over 90 days | 676 | 438 | +54.3% | | **Total** | **9,279** | **11,410** | **-18.6%** | - Overall trade payables decreased, particularly **mid-term aged liabilities**[26](index=26&type=chunk) [13. Other Payables and Accruals](index=12&type=section&id=13.%20%E5%85%B6%E4%BB%96%E6%87%89%E4%BB%98%E8%B2%A1%E6%AC%BE%E5%8F%8A%E6%87%89%E8%A8%88%E8%B2%BB%E7%94%A8) Total other payables and accruals significantly increased as of June 30, 2025, primarily driven by other taxes payable and accruals Analysis of Other Payables and Accruals | Item | June 30, 2025 (US$ thousand) | December 31, 2024 (US$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Other payables | 4,323 | 3,809 | +13.5% | | Accruals | 2,015 | 1,099 | +83.3% | | Other taxes payable | 4,221 | 1,716 | +145.9% | | **Total** | **10,559** | **6,624** | **+59.4%** | - Significant increases in **other taxes payable** and **accruals** led to a substantial rise in the total amount[27](index=27&type=chunk) [14. Dividends](index=12&type=section&id=14.%20%E8%82%A1%E6%81%AF) The Board decided not to declare any interim dividend for the six months ended June 30, 2025, consistent with the prior period - **No interim dividend** declared for H1 2025[28](index=28&type=chunk)[65](index=65&type=chunk) [15. Share Capital](index=12&type=section&id=15.%20%E8%82%A1%E6%9C%AC) As of June 30, 2025, the company's share capital increased due to the conversion of convertible bonds, leading to a corresponding increase in issued ordinary shares Share Capital Movement | Indicator | June 30, 2025 (US$ thousand) | December 31, 2024 (US$ thousand) | Change (US$ thousand) | | :--- | :--- | :--- | :--- | | Share capital | 610,464 | 608,505 | +1,959 | - **50,950,000 ordinary shares** were issued through convertible bond conversion, increasing share capital by **US$1,959 thousand**[29](index=29&type=chunk)[66](index=66&type=chunk) - Total **417,994,073 ordinary shares** were issued as of June 30, 2025[29](index=29&type=chunk)[66](index=66&type=chunk) [16. Fair Value Measurement of Financial Instruments](index=12&type=section&id=16.%20%E9%87%91%E8%9E%8D%E5%B7%A5%E5%85%B7%E4%B9%8B%E5%85%AC%E5%B9%B3%E5%80%BC%E8%A8%88%E9%87%8F) Fair value measurements of the company's financial instruments are primarily based on Level 1 inputs (quoted prices in active markets), with no transfers between fair value hierarchies during the period Fair Value Hierarchy | Level | June 30, 2025 (US$ thousand) | December 31, 2024 (US$ thousand) | | :--- | :--- | :--- | | Level 1 (Quoted prices in active markets) | 24,540 | 43,675 | | Level 2 (Observable input data) | – | – | | Level 3 (Unobservable input data) | – | – | | **Total** | **24,540** | **43,675** | - The fair value of financial assets is determined primarily by **quoted prices in active markets (Level 1)**[30](index=30&type=chunk)[32](index=32&type=chunk)[35](index=35&type=chunk) - There were **no transfers** between fair value hierarchies during the period[32](index=32&type=chunk) [17. Related Party Transactions](index=13&type=section&id=17.%20%E9%97%9C%E9%80%A3%E4%BA%BA%E5%A3%AB%E4%BA%A4%E6%98%93) The Group did not enter into any other significant related party transactions during the reporting period, except as otherwise disclosed - Except as otherwise disclosed, the Group had **no other significant related party transactions** during the reporting period[33](index=33&type=chunk) [18. Approval of Unaudited Interim Condensed Consolidated Financial Statements](index=13&type=section&id=18.%20%E6%89%B9%E5%87%86%E6%9C%AA%E7%B6%93%E5%AF%A9%E6%A0%B8%E4%B8%AD%E6%9C%9F%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8) The Board of Directors approved the unaudited interim condensed consolidated financial statements on August 29, 2025 - The unaudited interim condensed consolidated financial statements were approved by the **Board of Directors on August 29, 2025**[34](index=34&type=chunk) [Management Discussion and Analysis of Financial Condition and Operating Results](index=14&type=section&id=%E7%AE%A1%E7%90%86%E5%B1%A4%E5%B0%8D%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81%E5%8F%8A%E7%B6%93%E7%87%9F%E6%A5%AD%E7%B8%BE%E4%B9%8B%E8%A8%8E%E8%AB%96%E5%8F%8A%E5%88%86%E6%9E%90) This section provides management's perspective on the company's financial performance and position, including revenue trends, profitability, and strategic initiatives [Overall Financial Performance](index=14&type=section&id=%E6%95%B4%E9%AB%94%E8%B2%A1%E5%8B%99%E8%A1%A8%E7%8F%BE) This section discusses the company's financial condition and operating results for the six months ended June 30, 2025, including revenue decline, shift from profit to loss, and decrease in net assets - Revenue decreased by **4.1%** year-on-year to **US$63.1 million**, with a net loss attributable to owners of **US$15.1 million** (vs. net profit of **US$27.7 million** in prior period), mainly due to **US$19.1 million** unrealized loss on financial assets at fair value through profit or loss[36](index=36&type=chunk) - Total assets approximately **US$444.5 million** and net assets approximately **US$421.8 million** as of June 30, 2025, both decreased from the end of 2024[36](index=36&type=chunk) [Business Review](index=14&type=section&id=%E6%A5%AD%E5%8B%99%E5%9B%9E%E9%A1%A7) The company's business encompasses graphite product sales, electronic product manufacturing, and design services, with active expansion into Web3-related businesses, including a "light-asset" model for graphite and new Web3 collaborations - Business segments include **global sales of graphite products**, **UK manufacturing and sale of electronic products**, **design and manufacturing services**, and **development of Web3-related businesses**[37](index=37&type=chunk) - The company plans to operate its graphite product business with a **"light-asset" model**, having sold Madagascar production lines and some graphite ore inventory to ensure stable supply and cost savings[38](index=38&type=chunk)[39](index=39&type=chunk) - Actively seeking opportunities combining **AI and cryptocurrency**, with subsidiaries signing cooperation agreements with Goldpay Limited, Macau Lotus TV Media, Macau Network Media Development (Aomei APP), and Madagascar Graphite Limited to explore utility token issuance, Web3 program sponsorship, commodity trading platforms, and cryptocurrency exchange services[37](index=37&type=chunk)[40](index=40&type=chunk)[41](index=41&type=chunk)[42](index=42&type=chunk) [Impact of Inflation and Climate Change on Business Operations](index=16&type=section&id=%E9%80%9A%E8%84%B9%E5%8F%8A%E6%B0%A3%E5%80%99%E8%AE%8A%E5%8C%96%E5%B0%8D%E6%A5%AD%E5%8B%99%E7%B6%93%E7%87%9F%E9%80%A0%E6%88%90%E4%B9%8B%E5%BD%B1%E9%9F%BF) Global trade conflicts and supply chain uncertainties affected order demand and delivery times for graphite and electronic products, increasing working capital needs, while climate change had no significant impact - Escalating tariff wars and trade barriers created global trade uncertainty, impacting customer order demand and supply chains, particularly for **graphite products** and **Axiom's electronic products**[43](index=43&type=chunk) - Global supply chain issues and extended supplier lead times increased **working capital requirements** due to higher inventory[43](index=43&type=chunk) - The company implemented **energy-saving and emission reduction measures** and severe weather work arrangements, with no significant climate-related issues during the reporting period[43](index=43&type=chunk) [Operating Results](index=16&type=section&id=%E7%B6%93%E7%87%9F%E6%A5%AD%E7%B8%BE) Total turnover decreased by 4.1% in H1 2025. Graphite business turnover significantly dropped by 44.2% due to trade tensions, but average selling price and gross margin improved. Electronic product manufacturing services saw a 15.6% increase in turnover and higher profit - H1 2025 turnover was approximately **US$63.1 million**, a **4.1% decrease** year-on-year[44](index=44&type=chunk) - Graphite business turnover was approximately **US$12.1 million**, a **44.2% decrease** year-on-year, mainly due to global trade tariff wars, China's export restrictions on graphite-related products, and decreased market demand for small-sized graphite products; despite lower sales volume and revenue, **weighted average selling price** and **gross margin** were higher than the prior period[44](index=44&type=chunk) - Electronic product manufacturing services turnover was approximately **US$51.0 million**, a **15.6% increase** year-on-year; profit increased from **US$3.9 million** to **US$6.7 million**, reflecting strong sales revenue and repricing with key customers[45](index=45&type=chunk) [Outlook](index=17&type=section&id=%E5%B1%95%E6%9C%9B) The company anticipates uneven global economic growth and ongoing trade conflicts. It will continue to adjust its graphite business to a "light-asset" model and develop a trading platform, while expanding Web3 initiatives and investing in electronic manufacturing services - Expects **uneven global economic growth**, **ongoing trade conflicts**, and **rising tariffs** potentially disrupting supply chains and increasing costs[46](index=46&type=chunk) - The graphite business will actively transition to a **"light-asset" model**, reduce cost of sales, explore the small graphite sheet market, and plan to develop a **graphite trading platform** for enhanced trading experience and synergy[46](index=46&type=chunk) - The Web3 business continues strategic positioning in the Web3 domain, with multiple cooperation agreements signed, leveraging **AI and blockchain technologies**, expected to lay the foundation for future growth and revenue generation[47](index=47&type=chunk) - Axiom performed well with a **positive material purchase spread**, favorably impacted by a stronger GBP against USD; will continue to invest in **capital equipment and latest technologies** to improve output, capacity, and service portfolio, and continue to distribute dividends to the parent company[47](index=47&type=chunk) [Liquidity and Financial Resources](index=17&type=section&id=%E6%B5%81%E5%8B%95%E8%B3%87%E9%87%91%E5%8F%8A%E8%B2%A1%E5%8B%99%E8%B3%87%E6%BA%90) As of June 30, 2025, cash and bank balances slightly decreased, but net current assets increased. The company has no bank borrowings and a low gearing ratio, indicating good liquidity and financial health Cash and Bank Balances | Indicator | June 30, 2025 (US$ thousand) | December 31, 2024 (US$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Cash and bank balances | 12,100 | 12,600 | -4.0% | - Net current assets were approximately **US$374.8 million** as of June 30, 2025, an increase from **US$365.2 million** as of December 31, 2024[48](index=48&type=chunk) - As of June 30, 2025, the Group had no bank borrowings, and its gearing ratio (lease liabilities divided by total equity) was **0.05%**, lower than **0.07%** as of December 31, 2024, indicating low financial leverage[48](index=48&type=chunk) [Use of Proceeds from Convertible Bonds](index=18&type=section&id=%E5%8F%AF%E6%8F%9B%E8%82%A1%E5%82%B5%E5%88%B8%E6%89%80%E5%BE%97%E6%AC%BE%E9%A0%85%E7%94%A8%E9%80%94) The company disclosed the use and changes in intended use of proceeds from 2018 and 2024 convertible bonds. Unutilized 2018 proceeds will fund Web3 mineral trading platform working capital. Unutilized 2024 proceeds, originally for AI business, are now reallocated to R&D, marketing, and working capital for graphite and various commodity trading platforms - **2018 convertible bonds** received approximately **US$13,091.6 thousand**, utilized approximately **US$11,555.6 thousand**, with unutilized net proceeds of approximately **US$1,536 thousand**; use changed to working capital for **Web3 mineral products (including graphite) trading platform**, expected to be utilized by December 31, 2028[49](index=49&type=chunk)[51](index=51&type=chunk)[52](index=52&type=chunk) - **2024 convertible bonds** received net proceeds of **HK$21,000 thousand** (approximately **US$2,120 thousand**), unutilized; original intended use for exploring Web3 combined with AI and cultural industry new business directions, but no consensus reached, and GoMeta Limited will no longer develop AI-related businesses[53](index=53&type=chunk)[54](index=54&type=chunk) - **2024 convertible bonds** use changed to **R&D of graphite and various commodity trading platforms (HK$9,000 thousand)**, **marketing and brand building (HK$5,500 thousand)**, and **working capital (HK$6,500 thousand)**, expected to be utilized by December 31, 2027[54](index=54&type=chunk)[55](index=55&type=chunk) [Indebtedness](index=20&type=section&id=%E5%82%B5%E5%8B%99) As of June 30, 2025, and the announcement date, the company had no bank borrowings, bank financing commitments, related party loans, or bank overdrafts, with no significant adverse changes in indebtedness - The company has no **bank borrowings** or **bank financing commitments**, nor any loans from **related parties**[56](index=56&type=chunk) - There were no **significant adverse changes** in the Group's indebtedness as of June 30, 2025, and up to the announcement date[57](index=57&type=chunk) [Contingent Liabilities and Pledge of Assets](index=20&type=section&id=%E6%88%96%E7%84%B6%E8%B2%A0%E5%82%B5%E5%8F%8A%E8%B3%87%E7%94%A2%E6%8A%B5%E6%8A%BC) As of June 30, 2025, the company had no significant contingent liabilities and had not pledged any assets - The Group had no **significant contingent liabilities** and no **assets pledged**[58](index=58&type=chunk) [Capital Commitments](index=20&type=section&id=%E8%B3%87%E6%9C%AC%E6%89%BF%E6%93%94) As of June 30, 2025, the company had no capital commitments related to the purchase of fixed assets, consistent with the prior period - The Group had no **capital commitments** related to the purchase of fixed assets[59](index=59&type=chunk) [Material Investments Held](index=20&type=section&id=%E6%8C%81%E6%9C%89%E9%87%8D%E5%A4%A7%E6%8A%95%E8%B3%87) As of June 30, 2025, the company did not hold any material investments - The Group held no **material investments**[60](index=60&type=chunk) [Material Acquisitions and Disposals](index=20&type=section&id=%E9%87%8D%E5%A4%A7%E6%94%B6%E8%B3%BC%E5%8F%8A%E5%87%BA%E5%94%AE%E4%BA%8B%E9%A0%85) During the six months ended June 30, 2025, the company did not undertake any material acquisitions or disposals of subsidiaries, associates, or joint ventures - There were no **material acquisitions or disposals** of subsidiaries, associates, or joint ventures during the period[61](index=61&type=chunk) [Capital Structure](index=20&type=section&id=%E8%B3%87%E6%9C%AC%E6%9E%B6%E6%A7%8B) The company's capital structure remained unchanged during the six months ended June 30, 2025, primarily consisting of ordinary shares and other reserves - There were no **changes in the company's capital structure** during the six months ended June 30, 2025[62](index=62&type=chunk) - Capital comprises **ordinary shares** and **other reserves**[62](index=62&type=chunk) [Employees and Remuneration Policy](index=21&type=section&id=%E5%83%B1%E5%93%A1%E5%8F%8A%E8%96%AA%E9%85%AC%E6%94%BF%E7%AD%96) As of June 30, 2025, the company employed 338 staff globally with good employee relations. Remuneration is based on merit, qualifications, and competence, determined by the Remuneration Committee, and no share option scheme is in place - As of June 30, 2025, the Group employed **338 staff** in Hong Kong, UK, and Macau (2024: 325 staff)[63](index=63&type=chunk) - The remuneration policy is determined by the **Remuneration Committee** based on employee merit, qualifications, and competence; directors' remuneration is also determined by the Remuneration Committee[63](index=63&type=chunk) - The company has **no share option scheme** in place[63](index=63&type=chunk) [Foreign Exchange Risk](index=21&type=section&id=%E5%A4%96%E5%8C%AF%E9%A2%A8%E9%9A%AA) The company faces foreign exchange fluctuation risks from revenues and costs denominated in HKD, USD, RMB, and GBP, managing this risk through close monitoring without a formal hedging policy - Revenue and costs denominated in **HKD, USD, RMB, and GBP** expose the company to exchange rate fluctuation risks[64](index=64&type=chunk) - Currently, there is **no foreign exchange hedging policy**; risks are managed by close monitoring to maintain an acceptable net exposure, with hedging considered if necessary[64](index=64&type=chunk) [Interim Dividend](index=21&type=section&id=%E4%B8%AD%E6%9C%9F%E8%82%A1%E6%81%AF) The Board decided not to declare any interim dividend for the six months ended June 30, 2025, consistent with the prior period - **No interim dividend** declared for H1 2025[65](index=65&type=chunk) [Share Capital](index=21&type=section&id=%E8%82%A1%E6%9C%AC) As of June 30, 2025, the company's issued share capital was US$610,464,921, with 417,994,073 ordinary shares issued, primarily due to convertible bond conversions - As of June 30, 2025, issued share capital was **US$610,464,921**, with **417,994,073 ordinary shares** issued[66](index=66&type=chunk) - **50,950,000 ordinary shares** were issued during the six months ended June 30, 2025, through the exercise of convertible bonds[66](index=66&type=chunk) [Material Uncertainties](index=21&type=section&id=%E9%87%8D%E5%A4%A7%E4%B8%8D%E6%98%8E%E6%9C%97%E4%BA%8B%E4%BB%B6) The company found no material uncertainties or conditions that could cast significant doubt on its ability to continue as a going concern - There are no **material uncertainties or conditions** that may cast significant doubt on the company's ability to continue as a going concern[67](index=67&type=chunk) [Legal Proceedings](index=21&type=section&id=%E6%B3%95%E5%BE%8B%E8%A8%B4%E8%A8%9F) The company is unaware of any pending or threatened legal proceedings that, if unsuccessful, could significantly adversely affect its business and operations - The Group is **unaware of any pending or threatened legal proceedings** that could materially adversely affect its business and operations if unsuccessful[68](index=68&type=chunk) [Material Events After Reporting Period](index=21&type=section&id=%E5%A0%B1%E5%91%8A%E6%9C%9F%E5%BE%8C%E4%B9%8B%E9%87%8D%E5%A4%A7%E4%BA%8B%E9%A0%85) After the reporting period, the company entered into a HK$24,339,000 zero-coupon six-year convertible bond subscription agreement with Mr. Zhang Yi for Web3 business development and changed its auditor - On July 17, 2025, a **HK$24,339,000 zero-coupon six-year convertible bond subscription agreement** was signed with Mr. Zhang Yi, with proceeds for **Web3-related business development**[69](index=69&type=chunk) - On August 4, 2025, the auditor was changed from BDO Limited to Evergreen (Hong Kong) CPA Limited due to **disagreement on audit fees**[70](index=70&type=chunk) [Additional Information](index=22&type=section&id=%E9%A1%8D%E5%A4%96%E8%B3%87%E6%96%99) This section provides additional information on corporate governance, securities transactions, share interests, audit committee review, and interim results publication - The company complies with the **Corporate Governance Code**, but the Chairman and CEO roles are combined, which the Board believes has sufficient safeguards[72](index=72&type=chunk) - All directors complied with the **Model Code for Securities Transactions by Directors** during the reporting period[73](index=73&type=chunk) - Neither the company nor its subsidiaries purchased, sold, or redeemed any of the company's listed securities during the period[74](index=74&type=chunk) - As of June 30, 2025, directors and chief executives had **no disclosable interests or short positions** in the company's or its associated corporations' shares; major shareholders also had **no disclosable interests, short positions, or shares available for lending**[75](index=75&type=chunk)[76](index=76&type=chunk) - The **Audit Committee reviewed the interim results**, discussing accounting principles, internal controls, and financial reporting with management[77](index=77&type=chunk) - The interim report will be **dispatched to shareholders** and published on the HKEX and company websites[78](index=78&type=chunk)

股份代號 Stock Code：8021 (Incorporated in Cayman Islands and continued in Bermuda with limited liability) (於開曼群島成立並於百慕達存續之有限公司) 2024 年 報 ANNUAL REPORT 2025 Annual Report 年 報 ANNUAL REPORT 2025 年報 WLS HOLDINGS LIMITED 滙隆控股有限公司 GEM has been positioned as a market designed to accommodate small and mid-sized companies to which a higher investment risk may be attached than other companies listed on the Stock Exchange. Prospective investors should be aware of the potential risks of investing in such companies and sho ...

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。 MicroTech Medical (Hangzhou) Co., Ltd. 微 泰 醫 療 器 械（ 杭 州 ）股 份 有 限 公 司 於 中 華 人 民 共 和 國 註 冊 成 立 的 股 份 有 限 公 司 ） （股份代號： 2235） 截至2025年6月30日止六個月的中期業績公告 董事會欣然宣佈本集團截至2025年6月30日止六個月的未經審核簡明綜合中期 業績，連同截至2024年6月30日止六個月的比較數字。 | 財務摘要 | | | | | --- | --- | --- | --- | | | 截至6月30日止六個月 | | | | | 2025年 | 2024年 | 同比變動 | | | 人民幣元 | 人民幣元 | (%) | | | （未經審核） | （未經審核） | | | 營業收入 | 245,933,101.49 | 150,815,673.60 | 63.1 | | 毛利 | ...

Section I Important Notes, Table of Contents and Definitions [Important Notes](index=2&type=section&id=Important%20Notes) The Board of Directors, Supervisory Committee, and senior management guarantee the truthfulness, accuracy, and completeness of the semi-annual report, which includes a plan not to distribute dividends or bonus shares - The company's Board of Directors, Supervisory Committee, and senior management guarantee the truthfulness, accuracy, and completeness of the semi-annual report content[4](index=4&type=chunk) - Company head Hu Changqing, chief accountant Dong Lianming, and head of accounting department Zhang Bo declare that the financial report is true, accurate, and complete[4](index=4&type=chunk) - The company plans not to distribute cash dividends, bonus shares, or convert capital reserves into share capital[6](index=6&type=chunk) [Table of Contents](index=3&type=section&id=Table%20of%20Contents) The report's table of contents clearly outlines eight main chapters, providing comprehensive information from important notes to financial statements - The report contains eight main chapters, covering company overview, financials, management analysis, governance, significant matters, shareholder information, and bond information[7](index=7&type=chunk) [List of Reference Documents](index=4&type=section&id=List%20of%20Reference%20Documents) The list of reference documents includes five categories, such as signed financial statements and regulatory filings, ensuring comprehensive and traceable information disclosure - Reference documents include signed and sealed financial statements, the semi-annual report text signed by the legal representative, original drafts of documents disclosed on the CSRC-designated website, the semi-annual report text disclosed on HKEX, and other relevant materials[8](index=8&type=chunk) [Definitions](index=5&type=section&id=Definitions) This section defines key terms like "Company" and "Chenming Group," along with the reporting period, to facilitate accurate understanding of the report - "Company," "the Company," and "Chenming Group" all refer to Shandong Chenming Paper Holdings Limited and its subsidiaries[9](index=9&type=chunk) - The reporting period is from January 1, 2025, to June 30, 2025[9](index=9&type=chunk) Section II Company Profile and Key Financial Indicators [I. Company Profile](index=6&type=section&id=I.%20Company%20Profile) The company's shares are listed on the Shenzhen Stock Exchange (A and B shares) and HKEX (H shares), with Shandong Chenming Paper Holdings Limited as its full name Company Stock Information | Stock Abbreviation | Stock Code | Listing Exchange | | :--- | :--- | :--- | | ST Chenming | 000488 | Shenzhen Stock Exchange | | ST Chenming B | 200488 | Shenzhen Stock Exchange | | Chenming Paper | 01812 | The Stock Exchange of Hong Kong Limited | - The company's Chinese name is Shandong Chenming Paper Holdings Limited, and its legal representative is Hu Changqing[10](index=10&type=chunk) [II. Contact Persons and Information](index=6&type=section&id=II.%20Contact%20Persons%20and%20Information) This section provides detailed contact information for the Board Secretary, Securities Affairs Representatives, and Hong Kong Company Secretary for stakeholder communication - Contact information for Board Secretary Yuan Xikun, Securities Affairs Representatives Zhang Chuanyong and Chen Lin, and Hong Kong Company Secretary Zhu Hanliang is provided[11](index=11&type=chunk) [III. Other Information](index=6&type=section&id=III.%20Other%20Information) The company's contact information, disclosure, and document storage locations remained unchanged during the reporting period, as detailed in the 2024 annual report - The company's registered address, office address, website, and email address remained unchanged during the reporting period[12](index=12&type=chunk) - Information disclosure and document storage locations remained unchanged during the reporting period[13](index=13&type=chunk) [IV. Key Accounting Data and Financial Indicators](index=7&type=section&id=IV.%20Key%20Accounting%20Data%20and%20Financial%20Indicators) The company's H1 2025 key financial indicators show a significant decline in operating revenue to **RMB 2.107 billion** and a net loss attributable to shareholders of **RMB 3.858 billion**, with reduced EPS and net assets Key Accounting Data and Financial Indicators for H1 2025 | Indicator | Current Reporting Period (RMB) | Prior Year Period (RMB) | Change from Prior Year Period | | :--- | :--- | :--- | :--- | | Operating Revenue | 2,106,630,952.30 | 13,884,731,519.04 | -84.83% | | Net Profit Attributable to Shareholders of Listed Company | -3,857,953,190.56 | 28,646,205.42 | -13,567.59% | | Net Profit Attributable to Shareholders of Listed Company (Excluding Non-Recurring Gains and Losses) | -3,645,363,615.81 | -270,865,043.51 | -1,245.82% | | Net Cash Flow from Operating Activities | 785,303,274.19 | 1,992,499,393.07 | -60.59% | | Basic Earnings Per Share (RMB/share) | -1.31 | 0.01 | -13,200.00% | | Diluted Earnings Per Share (RMB/share) | -1.31 | 0.01 | -13,200.00% | | Weighted Average Return on Net Assets | -53.39% | 0.17% | Decreased by 53.56 percentage points | | Indicator | End of Current Reporting Period (RMB) | End of Prior Year (RMB) | Change from End of Prior Year | | :--- | :--- | :--- | :--- | | Total Assets | 54,698,875,991.74 | 63,509,295,142.08 | -13.87% | | Net Assets Attributable to Shareholders of Listed Company | 5,318,763,216.33 | 9,156,104,358.91 | -41.91% | [V. Differences in Accounting Data under Domestic and Overseas Accounting Standards](index=7&type=section&id=V.%20Differences%20in%20Accounting%20Data%20under%20Domestic%20and%20Overseas%20Accounting%20Standards) The company reported no differences in net profit or net assets between international/overseas accounting standards and Chinese accounting standards during the period - The company's financial reports disclosed under International Accounting Standards and Chinese Accounting Standards show no differences in net profit and net assets during the reporting period[16](index=16&type=chunk) - The company's financial reports disclosed under overseas accounting standards and Chinese Accounting Standards show no differences in net profit and net assets during the reporting period[17](index=17&type=chunk) [VI. Non-Recurring Gains and Losses and Amounts](index=8&type=section&id=VI.%20Non-Recurring%20Gains%20and%20Losses%20and%20Amounts) Total non-recurring losses amounted to **RMB -212.59 million**, primarily from asset disposals, fair value changes, and debt restructuring, with some recurring government subsidies Non-Recurring Gains and Losses and Amounts | Item | Amount (RMB) | | :--- | :--- | | Gains or losses from disposal of non-current assets | -97,049,878.76 | | Government grants recognized in current profit or loss | 25,503,367.73 | | Gains or losses from changes in fair value of financial assets and liabilities and disposal of financial assets | 8,439,571.88 | | Reversal of impairment provisions for accounts receivable subject to separate impairment testing | 13,201,496.76 | | Gains or losses from debt restructuring | -37,171,293.24 | | Gains or losses from changes in fair value of consumable biological assets | -129,059,190.34 | | Other non-operating income and expenses | -18,188,031.78 | | Less: Income tax impact | 2,948,680.16 | | Less: Impact on minority interests (after tax) | -24,683,063.16 | | **Total** | **-212,589,574.75** | - Government grants related to assets and closely linked to the company's normal operations (**RMB 24,301,996.32**) are classified as recurring gains and losses due to their continuous impact on the company's profit or loss[20](index=20&type=chunk) Section III Management Discussion and Analysis [I. Principal Businesses During the Reporting Period](index=9&type=section&id=I.%20Principal%20Businesses%20During%20the%20Reporting%20Period) The company, a leading pulp and paper producer, experienced significant declines in production and profitability due to facility shutdowns but is actively implementing measures to restore operations and improve performance - The company is a modern large-scale enterprise group primarily engaged in pulping and papermaking, implementing an integrated pulp and paper strategy, and is the first domestic enterprise to achieve a balance between pulp and paper production capacity[24](index=24&type=chunk) - During the reporting period, some production lines at the company's Zhanjiang, Jilin, and Shouguang production bases were shut down for maintenance, leading to a year-on-year decline in production and sales, with operating revenue of **RMB 2.107 billion** and a net loss attributable to shareholders of **RMB 3.858 billion**[25](index=25&type=chunk) - The company is actively taking measures to improve operations, including equipment overhaul and upgrade, full-process cost control, and strengthening communication with financial institutions (including the approval of a **RMB 2.31 billion** syndicated loan) to gradually restore profitability and promote resumption of production[25](index=25&type=chunk)[31](index=31&type=chunk) [1. Industry Overview](index=9&type=section&id=1.%20Industry%20Overview) The paper industry faced overcapacity and weak demand in H1 2025, leading to price drops and a **21.4%** profit decline, but long-term outlook suggests recovery driven by "dual carbon" and anti-overcompetition policies - In the first half of 2025, the paper industry saw new production capacity come online and weakened end-user demand, leading to a structural imbalance between supply and demand, with significant price drops for machine-made paper products such as cultural paper and white board paper[22](index=22&type=chunk) Key Financial Data for National Paper and Paper Products Industry (Jan-Jun 2025) | Indicator | Amount (RMB 100 million) | Year-on-Year Change | | :--- | :--- | :--- | | Operating Revenue | 6,812.1 | -2.3% | | Operating Cost | 6,017.3 | -2.1% | | Total Profit | 175.7 | -21.4% | - In the medium to long term, driven by the "dual carbon" strategy and "anti-involution" policies, outdated production capacity in the paper industry will accelerate its exit, market concentration will increase, and demand-side improvement is expected, leading to a gradual recovery in overall operating performance[23](index=23&type=chunk) [2. Company Business Overview](index=10&type=section&id=2.%20Company%20Business%20Overview) As an integrated pulp and paper group with diverse products, the company saw significant revenue and profit declines due to production line shutdowns and asset impairments, now focusing on recovery - The company is the domestic paper industry's most diverse and comprehensive enterprise in terms of product categories, covering over 200 varieties across 7 series, including cultural paper, coated paper, white board paper, copy paper, industrial paper, specialty paper, and household paper[24](index=24&type=chunk) - During the reporting period, the company achieved operating revenue of **RMB 2.107 billion** and a net loss attributable to shareholders of **RMB 3.858 billion**, primarily due to the shutdown of some production bases for maintenance and asset impairment[25](index=25&type=chunk) - The company is gradually restoring profitability and promoting the resumption of production through measures such as equipment overhaul and upgrade, full-process cost control, and strengthening communication with financial institutions (including the approval of a **RMB 2.31 billion** syndicated loan)[25](index=25&type=chunk)[31](index=31&type=chunk) [3. Main Products and Their Uses](index=11&type=section&id=3.%20Main%20Products%20and%20Their%20Uses) The company prioritizes R&D, offering a wide range of machine-made paper products for publishing, packaging, office, and hygiene, continuously optimizing its product portfolio and brand value - The company highly values technological research and development, possessing national-level innovation platforms such as a National Enterprise Technology Center and a Post-doctoral Research Workstation, focusing on green papermaking technology[26](index=26&type=chunk) Company's Main Machine-Made Paper Product Series and Uses | Category | Main Brands and Varieties | Application Scope | | :--- | :--- | :--- | | Cultural Paper Series | Biyuntian, Yunjing, Yunbao, Yunjin, etc. offset paper, lightweight paper | Printing books, textbooks, magazines, notebooks, test papers, etc. | | Coated Paper Series | Xuesha, Xueying, Xuetu, etc. single and double-sided coated paper | High-end albums, pictures, magazines, cigarette labels, handbags, gift packaging, etc. | | White Board Paper Series | Liya, Lipin, Baiyang, etc. series white board, food board | High-end gift boxes, cosmetic boxes, hang tags, milk cartons, disposable paper cups, etc. | | Copy Paper Series | Jinmingyang, Jinchenming, Boya, etc. copy paper | Printing and copying, business documents, training materials, writing, etc. | | Industrial Paper Series | High-grade yellow anti-sticking base paper, coated base paper | Production of release paper, self-adhesive face paper or composite paper for playing cards | | Specialty Paper Series | Thermal paper, glassine paper | High-end self-adhesive base paper for electronics, medicine, food, detergents, supermarket labels, etc. | | Household Paper Series | Toilet paper, facial tissue, handkerchief paper, napkins, hand towels | Daily hygiene products, restaurants, hotels, guesthouses, office buildings, and household use | [II. Liquidity, Financial Resources, and Capital Structure Analysis Disclosed under HKEX Listing Rules](index=13&type=section&id=II.%20Liquidity,%20Financial%20Resources,%20and%20Capital%20Structure%20Analysis%20Disclosed%20under%20HKEX%20Listing%20Rules) As of June 30, 2025, the company's liquidity ratios were low, with a high debt-to-asset ratio of **85.93%** and significantly reduced cash, but a syndicated loan for resuming production has been approved Liquidity and Financial Resources Indicators as of June 30, 2025 | Indicator | Value | | :--- | :--- | | Current Ratio | 23.72% | | Quick Ratio | 17.34% | | Debt-to-Asset Ratio | 85.93% | | Total Bank Borrowings | RMB 29.103 billion | | Cash and Cash Equivalents | RMB 954 million | - The company's funding sources primarily include cash inflows from operating activities and borrowings from financial institutions, but liquidity and solvency are constrained due to the shutdown of some production bases for maintenance[31](index=31&type=chunk) - As of the report disclosure date, a **RMB 2.31 billion** syndicated loan specifically for resuming production has been approved, and the company will proceed with resumption based on funding and market conditions[31](index=31&type=chunk) [III. Core Competitiveness Analysis](index=14&type=section&id=III.%20Core%20Competitiveness%20Analysis) With over 60 years of development, the company boasts seven core competencies, including integrated pulp-paper operations, scale, diverse products, advanced technology, and strong R&D, supporting its industry leadership - The company possesses an integrated pulp and paper advantage, largely achieving self-sufficiency in wood pulp, ensuring stable raw material supply and cost advantages[35](index=35&type=chunk) - The company has a scale advantage, with large production bases in major markets and supporting international logistics centers, enhancing efficiency and stabilizing costs[36](index=36&type=chunk) - The company offers the most diverse and comprehensive product range, covering cultural paper, white board paper, etc., and enhances product quality and brand value through technological R&D[37](index=37&type=chunk) - The company's industrial layout is rational, with production bases rooted in core target markets, enabling close-range sales and reducing transportation costs[38](index=38&type=chunk) - The company's technical equipment is advanced, having introduced production lines from internationally renowned manufacturers, ensuring production efficiency and product quality[39](index=39&type=chunk) - The company has strong scientific research and innovation capabilities, owning national-level scientific research institutions and multiple patents, and is a high-tech enterprise[40](index=40&type=chunk) - The company leads in environmental governance, having invested over **RMB 8 billion** in pollution control facilities, achieving industry-leading wastewater reuse rates, and actively introducing photovoltaic and biomass power generation[41](index=41&type=chunk) [IV. Analysis of Principal Business](index=16&type=section&id=IV.%20Analysis%20of%20Principal%20Business) Principal business revenue declined by **84.83%** due to production shutdowns, leading to a significant net loss, with machine-made paper revenue share decreasing while chemical pulp revenue grew Year-on-Year Changes in Key Financial Data | Indicator | Current Reporting Period (RMB) | Prior Year Period (RMB) | Year-on-Year Change | Reason for Change | | :--- | :--- | :--- | :--- | :--- | | Operating Revenue | 2,106,630,952.30 | 13,884,731,519.04 | -84.83% | Shutdown of some production bases, reduced sales of machine-made paper | | Operating Cost | 3,727,203,720.24 | 12,185,505,709.00 | -69.41% | Shutdown of some production bases, reduced sales of machine-made paper | | R&D Expenses | 36,567,185.69 | 611,914,096.41 | -94.02% | Shutdown of some production bases, reduced R&D investment | | Investment Income | -430,669,782.44 | 181,332,096.11 | -337.50% | Reduced investment income from associates and gains from equity disposal | | Fair Value Change Gains | -129,487,561.79 | -2,221,596.44 | -5,728.58% | Increased fair value loss on forest assets | | Credit Impairment Losses | -506,322,424.22 | -124,386,619.66 | 307.06% | Increased provision for bad debts on accounts receivable | | Asset Impairment Losses | -240,561,409.32 | -3,041,427.75 | 7,809.49% | Increased provision for impairment of equipment | Operating Revenue Composition (by Industry, Product, Region) | Item | Current Reporting Period Amount (RMB) | Proportion of Operating Revenue | Prior Year Period Amount (RMB) | Proportion of Operating Revenue | Year-on-Year Change | | :--- | :--- | :--- | :--- | :--- | :--- | | **By Industry** | | | | | | | Machine-made Paper | 1,121,420,145.71 | 53.23% | 12,429,565,296.10 | 89.52% | -90.98% | | Chemical Pulp | 740,160,267.96 | 35.13% | 676,203,401.45 | 4.87% | 9.46% | | **By Product** | | | | | | | Coated Paper | 322,730,071.72 | 15.32% | 2,407,591,953.96 | 17.34% | -86.60% | | White Board Paper | 260,654,282.46 | 12.37% | 2,926,439,060.82 | 21.08% | -91.09% | | Offset Paper | 213,202,847.01 | 10.12% | 3,710,036,202.61 | 26.72% | -94.25% | | Chemical Pulp | 740,160,267.96 | 35.13% | 676,203,401.45 | 4.87% | 9.46% | | **By Region** | | | | | | | Mainland China | 2,075,083,434.21 | 98.50% | 11,052,530,679.12 | 79.60% | -81.23% | | Other Countries and Regions | 31,547,518.09 | 1.50% | 2,832,200,839.92 | 20.40% | -98.89% | - The gross profit margin for machine-made paper business was **-135.68%**, a year-on-year decrease of **147.16 percentage points**, while chemical pulp gross profit margin was **-0.23%**, a year-on-year decrease of **17.53 percentage points**[48](index=48&type=chunk) [V. Analysis of Non-Principal Businesses](index=20&type=section&id=V.%20Analysis%20of%20Non-Principal%20Businesses) Non-principal businesses significantly impacted total profit negatively, with investment income, fair value changes, and impairment losses being substantial and mostly non-recurring, except for some government subsidies Non-Principal Business Items and Their Impact on Total Profit | Item | Amount (RMB) | Proportion of Total Profit | Explanation of Cause | Sustainability | | :--- | :--- | :--- | :--- | :--- | | Other Income | 22,794,816.03 | -0.55% | Government grants and debt restructuring gains | Partially sustainable | | Investment Income | -430,669,782.44 | 10.30% | Investment income from external investments and gains/losses from disposal of equity and financial assets | No | | Fair Value Change Gains/Losses | -129,487,561.79 | 3.10% | Fair value fluctuations of Bohai Bank shares and forest assets | No | | Credit Impairment Losses | -506,322,424.22 | 12.11% | Provision for bad debts on accounts receivable | No | | Asset Impairment Losses | -240,561,409.32 | 5.75% | Provision for impairment of non-current assets | No | | Non-Operating Expenses | 26,198,489.55 | -0.63% | Expenses not directly related to daily operations | No | [VI. Analysis of Assets and Liabilities](index=21&type=section&id=VI.%20Analysis%20of%20Assets%20and%20Liabilities) The company's asset and liability structure saw significant changes, including reduced cash and increased payables, indicating liquidity stress and debt restructuring, with many assets restricted as collateral or due to litigation Significant Changes in Asset Composition | Item | Period-End Amount (RMB) | Proportion of Total Assets | Prior Year-End Amount (RMB) | Proportion of Total Assets | Change in Proportion | Explanation of Significant Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Cash and Cash Equivalents | 953,661,496.60 | 1.74% | 5,909,879,812.18 | 9.31% | -7.57% | Decrease in outstanding deposits at period-end | | Notes Payable | 107,370,000.00 | 0.20% | 1,423,918,112.99 | 2.24% | -2.04% | Reclassification of overdue notes to accounts payable and short-term borrowings | | Accounts Payable | 8,426,902,071.31 | 15.41% | 7,708,967,406.47 | 12.14% | 3.27% | Reclassification of overdue commercial notes to accounts payable | | Other Payables | 3,560,628,293.65 | 6.51% | 2,896,409,953.94 | 4.56% | 1.95% | Increase in intercompany payables and accrued expenses at period-end | | Non-Current Liabilities Due Within One Year | 2,534,511,114.58 | 4.63% | 1,577,936,964.14 | 2.48% | 2.15% | Increase in long-term liabilities reclassified as due within one year at period-end | | Long-Term Payables | 2,544,988,247.10 | 4.65% | 774,965,008.29 | 1.22% | 3.43% | Reclassification of some equipment finance lease extensions to long-term payables | - As of the end of the reporting period, multiple assets of the company are restricted, including fixed assets, investment properties, and intangible assets serving as collateral, and long-term equity investments, cash, and inventory frozen or seized due to outstanding debts or lawsuits[57](index=57&type=chunk) [1. Significant Changes in Asset Composition](index=21&type=section&id=1.%20Significant%20Changes%20in%20Asset%20Composition) At period-end, cash decreased by **7.57%** due to reduced deposits, while payables and current portion of non-current liabilities increased due to reclassification of overdue notes and extended financing leases Significant Changes in Asset Composition | Item | Period-End Amount (RMB) | Proportion of Total Assets | Prior Year-End Amount (RMB) | Proportion of Total Assets | Change in Proportion | Explanation of Significant Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Cash and Cash Equivalents | 953,661,496.60 | 1.74% | 5,909,879,812.18 | 9.31% | -7.57% | Decrease in outstanding deposits at period-end | | Accounts Receivable | 930,731,502.52 | 1.70% | 1,384,290,313.70 | 2.18% | -0.48% | Decrease in customer receivables at period-end | | Long-Term Equity Investments | 3,621,265,404.11 | 6.62% | 3,971,035,411.54 | 6.25% | 0.37% | Decrease in investment income from associates recognized during the period | | Other Non-Current Financial Assets | 344,266,989.06 | 0.63% | 751,030,454.68 | 1.18% | -0.55% | Weifang Chenchuang Equity Investment Fund Partnership (Limited Partnership) included in consolidation scope | | Notes Payable | 107,370,000.00 | 0.20% | 1,423,918,112.99 | 2.24% | -2.04% | Overdue notes reclassified to accounts payable and short-term borrowings at period-end | | Accounts Payable | 8,426,902,071.31 | 15.41% | 7,708,967,406.47 | 12.14% | 3.27% | Overdue commercial notes reclassified to accounts payable at period-end | | Other Payables | 3,560,628,293.65 | 6.51% | 2,896,409,953.94 | 4.56% | 1.95% | Increase in intercompany payables and accrued expenses compared to beginning of year | | Non-Current Liabilities Due Within One Year | 2,534,511,114.58 | 4.63% | 1,577,936,964.14 | 2.48% | 2.15% | Increase in long-term liabilities reclassified as due within one year at period-end | | Other Current Liabilities | 844,340,067.04 | 1.54% | 2,680,562,600.58 | 4.22% | -2.68% | Reclassification of some equipment finance lease extensions to long-term payables at period-end | | Long-Term Payables | 2,544,988,247.10 | 4.65% | 774,965,008.29 | 1.22% | 3.43% | Reclassification of some equipment finance lease extensions to long-term payables at period-end | [2. Major Overseas Assets](index=22&type=section&id=2.%20Major%20Overseas%20Assets) The company had no major overseas assets during the reporting period - The company had no major overseas assets during the reporting period[54](index=54&type=chunk) [3. Assets and Liabilities Measured at Fair Value](index=22&type=section&id=3.%20Assets%20and%20Liabilities%20Measured%20at%20Fair%20Value) As of period-end, total assets measured at fair value were **RMB 1.48 billion**, primarily financial and biological assets, with fair value changes resulting in a **RMB -129.49 million** loss Assets and Liabilities Measured at Fair Value | Item | Beginning Balance (RMB) | Fair Value Change Gains/Losses for the Period (RMB) | Period-End Balance (RMB) | | :--- | :--- | :--- | :--- | | Financial Assets Held for Trading | 37,259,325.70 | -428,371.45 | 36,692,409.73 | | Other Non-Current Financial Assets | 751,030,454.68 | 0 | 344,266,989.06 | | Consumable Biological Assets Measured at Fair Value | 1,256,379,773.85 | -129,059,190.34 | 1,098,778,602.31 | | **Total Above** | **2,044,669,554.23** | **-129,487,561.79** | **1,479,738,001.10** | - There were no significant changes in the measurement attributes of the company's major assets during the reporting period[55](index=55&type=chunk) [4. Asset Restrictions as of the End of the Reporting Period](index=23&type=section&id=4.%20Asset%20Restrictions%20as%20of%20the%20End%20of%20the%20Reporting%20Period) As of period-end, **RMB 45.70 billion** in assets (book value **RMB 28.78 billion**) were restricted, primarily as collateral for loans or frozen due to litigation Asset Restrictions as of the End of the Reporting Period | Item | Book Balance (RMB) | Book Value (RMB) | Type of Restriction | Restriction Details | | :--- | :--- | :--- | :--- | :--- | | Fixed Assets | 34,753,954,012.60 | 19,712,891,634.14 | Pledge | As collateral for bank borrowings and long-term payables | | Investment Properties | 6,556,109,499.47 | 5,195,027,744.73 | Pledge | As collateral for bank borrowings | | Intangible Assets | 1,842,713,402.08 | 1,328,582,983.12 | Pledge | As collateral for bank borrowings and long-term payables | | Long-Term Equity Investments | 1,653,602,939.71 | 1,649,407,876.62 | Freeze | Frozen due to lawsuits for outstanding debts | | Cash and Cash Equivalents | 875,404,665.38 | 875,404,665.38 | Pledge, Freeze | As guarantee deposits for acceptance bills, letters of credit, loan guarantees, reserve deposits, or frozen accounts due to lawsuits, etc. | | Inventory | 20,028,521.46 | 14,865,436.95 | Court Seizure | Seized due to lawsuits for outstanding debts | | **Total** | **45,701,813,040.70** | **28,776,180,340.94** | | | [VII. Investment Analysis](index=24&type=section&id=VII.%20Investment%20Analysis) The company's total investment in the period was **RMB 646.25 million**, mainly in subsidiary M&A and capital increases, resulting in a net loss of **RMB -97.33 million**, with no major non-equity or derivative investments Significant Equity Investments Acquired During the Reporting Period | Name of Investee Company | Investment Method | Investment Amount (RMB) | Profit/Loss for the Period (RMB) | | :--- | :--- | :--- | :--- | | Weifang Chenchuang Equity Investment Fund Partnership (Limited Partnership) | Acquisition | 512,000,000.00 | 626.63 | | Shandong Chenming Paper Products Sales Co. Ltd. | Capital Increase | 98,500,000.00 | -30,348,394.39 | | Shouguang Chenming Art Paper Co. Ltd. | Acquisition | 35,748,442.80 | -66,979,940.94 | | **Total** | | **646,248,442.80** | **-97,327,708.70** | Financial Asset Investments (Securities Investments) | Security Type | Security Abbreviation | Beginning Book Value (RMB) | Fair Value Change Gains/Losses for the Period (RMB) | Period-End Book Value (RMB) | | :--- | :--- | :--- | :--- | :--- | | Domestic and Overseas Stocks | Bohai Bank | 37,259,325.70 | -428,371.45 | 36,692,409.73 | - The company had no derivative investments or use of raised funds during the reporting period[64](index=64&type=chunk)[65](index=65&type=chunk) [1. Overall Situation](index=24&type=section&id=1.%20Overall%20Situation) This section provides an overview of the company's investment activities during the reporting period, primarily focusing on equity investments, with details in subsequent subsections - The company had investment activities during the reporting period, with specific details to be disclosed in subsequent sections[58](index=58&type=chunk)[61](index=61&type=chunk) [2. Significant Equity Investments Acquired During the Reporting Period](index=24&type=section&id=2.%20Significant%20Equity%20Investments%20Acquired%20During%20the%20Reporting%20Period) The company made three significant equity investments totaling **RMB 646.25 million**, primarily through M&A and capital increases in subsidiaries, resulting in a combined loss of **RMB -97.33 million** Significant Equity Investments Acquired During the Reporting Period | Name of Investee Company | Investment Method | Investment Amount (RMB) | Shareholding Percentage | Profit/Loss for the Period (RMB) | Involved in Litigation | | :--- | :--- | :--- | :--- | :--- | :--- | | Weifang Chenchuang Equity Investment Fund Partnership (Limited Partnership) | Acquisition | 512,000,000.00 | 99.67% | 626.63 | No | | Shandong Chenming Paper Products Sales Co. Ltd. | Capital Increase | 98,500,000.00 | 100.00% | -30,348,394.39 | No | | Shouguang Chenming Art Paper Co. Ltd. | Acquisition | 35,748,442.80 | 100.00% | -66,979,940.94 | No | | **Total** | | **646,248,442.80** | | **-97,327,708.70** | | [3. Significant Non-Equity Investments in Progress During the Reporting Period](index=25&type=section&id=3.%20Significant%20Non-Equity%20Investments%20in%20Progress%20During%20the%20Reporting%20Period) The company had no significant non-equity investments in progress during the reporting period - The company had no significant non-equity investments in progress during the reporting period[61](index=61&type=chunk) [4. Financial Asset Investments](index=25&type=section&id=4.%20Financial%20Asset%20Investments) The company's financial asset investments primarily consist of Bohai Bank shares, with a period-end book value of **RMB 36.69 million** and a fair value change loss of **RMB -0.43 million** Securities Investment Information | Security Type | Security Abbreviation | Initial Investment Cost (RMB) | Beginning Book Value (RMB) | Fair Value Change Gains/Losses for the Period (RMB) | Period-End Book Value (RMB) | | :--- | :--- | :--- | :--- | :--- | :--- | | Domestic and Overseas Stocks | Bohai Bank | 195,684,817.15 | 37,259,325.70 | -428,371.45 | 36,692,409.73 | - The company had no derivative investments during the reporting period[64](index=64&type=chunk) [5. Use of Raised Funds](index=25&type=section&id=5.%20Use%20of%20Raised%20Funds) The company did not use any raised funds during the reporting period - The company had no use of raised funds during the reporting period[65](index=65&type=chunk) [VIII. Significant Asset and Equity Disposals](index=26&type=section&id=VIII.%20Significant%20Asset%20and%20Equity%20Disposals) The company sold 22 Fado Apartment properties for **RMB 85.92 million**, resulting in a net loss of **RMB -65.14 million**, aiming to optimize asset structure and focus on core business Significant Asset Disposal Information | Counterparty | Assets Sold | Transaction Price (RMB ten thousand yuan) | Net Profit Contributed by Asset from Beginning of Period to Disposal Date (RMB ten thousand yuan) | Impact of Disposal on Company | Proportion of Net Profit to Total Net Profit | | :--- | :--- | :--- | :--- | :--- | :--- | | Zhejiang Aikesheng Real Estate Co. Ltd. | 22 Fado Apartment properties | 8,591.60 | -6,514.33 | Conducive to the company integrating resources, optimizing asset structure, concentrating advantages, focusing on core business, and improving quality and efficiency. | 1.56% | - The company had no significant equity disposals during the reporting period[67](index=67&type=chunk) [IX. Analysis of Major Controlled and Invested Companies](index=27&type=section&id=IX.%20Analysis%20of%20Major%20Controlled%20and%20Invested%20Companies) Major subsidiaries Zhanjiang Chenming Pulp & Paper and Shouguang Meilun Paper reported significant net losses of **RMB -844.27 million** and **RMB -677.43 million**, respectively, while new acquisitions had minor profit impacts Major Subsidiaries and Associates with Net Profit Impact Exceeding 10% | Company Name | Company Type | Main Business | Registered Capital (RMB) | Net Profit (RMB) | | :--- | :--- | :--- | :--- | :--- | | Zhanjiang Chenming Pulp & Paper Co. Ltd. | Subsidiary | Production and sales of offset paper, electrostatic paper, white board paper, etc. | 6,913,572,423.00 | -844,270,649.67 | | Shouguang Meilun Paper Co. Ltd. | Subsidiary | Production and sales of coated paper, cultural paper, household paper, chemical pulp | 4,801,045,519.00 | -677,427,573.67 | Acquisition and Disposal of Subsidiaries During the Reporting Period | Company Name | Method of Acquisition and Disposal of Subsidiaries During the Reporting Period | Impact on Overall Production, Operations, and Performance | | :--- | :--- | :--- | | Chenming International Trade Co. Ltd. | Newly established | None | | Shouguang Weiyuan Logistics Co. Ltd. | Transfer | Increased net profit by RMB 0.1664 million | | Weifang Chenchuang Equity Investment Fund Partnership (Limited Partnership) | Acquisition | Increased net profit by RMB 0.0006 million | [X. Structured Entities Controlled by the Company](index=28&type=section&id=X.%20Structured%20Entities%20Controlled%20by%20the%20Company) The company did not control any structured entities during the reporting period - The company had no structured entities under its control during the reporting period[71](index=71&type=chunk) [XI. Risks Faced by the Company and Countermeasures](index=28&type=section&id=XI.%20Risks%20Faced%20by%20the%20Company%20and%20Countermeasures) The company faces risks from macroeconomic policies, environmental regulations, raw material prices, market competition, and liquidity, addressing them through strategic adjustments, debt restructuring, and asset disposal - The company faces risks from macroeconomic policy adjustments and will closely monitor policy changes, focus on its core business, drive innovation, optimize industrial structure and regional layout, strengthen lean management, and broaden financing channels[72](index=72&type=chunk) - Increasing environmental policy pressure poses a risk of rising operating costs; the company will deeply implement the "dual carbon" strategy, adopt new energy-saving and emission-reduction technologies, complete wastewater reuse membrane treatment projects, and promote circular economy development[73](index=73&type=chunk) - To mitigate raw material price fluctuation risks, the company will adhere to its integrated pulp and paper strategy to ensure raw material stability and improve supply chain management and market judgment capabilities[74](index=74&type=chunk) - Facing intensified market competition, the company will continuously advance technological innovation, enhance product quality, and develop a high-end, specialized, differentiated product structure to increase added value[75](index=75&type=chunk) - Due to prominent funding risks, the company will fully activate and dispose of existing assets, increase the disposal of non-core assets, strengthen communication with financial institutions to advance debt restructuring, and raise working capital through multiple channels to resume production[76](index=76&type=chunk) - Financing lease business carries the risk of bad debts from lessees failing to pay rent on time; the company is reducing business scale, making provisions for overdue principal, and mitigating risks through litigation, guarantor recovery, and debt restructuring[77](index=77&type=chunk) [XII. Implementation of Market Value Management System and Valuation Enhancement Plan](index=30&type=section&id=XII.%20Implementation%20of%20Market%20Value%20Management%20System%20and%20Valuation%20Enhancement%20Plan) The company has implemented a Market Value Management System and Valuation Enhancement Plan, focusing on financial and business optimization, market development, and strategic partnerships to boost shareholder value - The company has formulated and disclosed the "Shandong Chenming Paper Holdings Limited Market Value Management System" to standardize market value management practices and protect the legitimate rights and interests of the company and investors[79](index=79&type=chunk) - The company has approved the "Shandong Chenming Paper Holdings Limited Valuation Enhancement Plan," which includes four main aspects: financial optimization, business optimization, market and brand building, and strategic investment and cooperation[81](index=81&type=chunk)[83](index=83&type=chunk)[84](index=84&type=chunk)[85](index=85&type=chunk) - Financial optimization measures include debt restructuring (extending debt terms, lowering interest rates, syndicated loans), asset disposal (activating non-core assets, intensifying debt collection), and cost control (optimizing production processes, reducing procurement and energy costs)[84](index=84&type=chunk) - Business optimization measures include capacity recovery and adjustment (accelerating production resumption at production bases, adjusting product structure) and technological innovation and R&D (increasing investment in green paper products and specialty paper R&D)[84](index=84&type=chunk) - Market and brand building measures include market expansion, brand building, investor relations management, and optimization of information disclosure[87](index=87&type=chunk) - Strategic investment and cooperation measures include introducing strategic investors and industry integration and cooperation[87](index=87&type=chunk) [XIII. Implementation of the "Dual Improvement in Quality and Returns" Action Plan](index=32&type=section&id=XIII.%20Implementation%20of%20the%20%22Dual%20Improvement%20in%20Quality%20and%20Returns%22%20Action%20Plan) The company did not disclose any "Dual Improvement in Quality and Returns" action plan announcements during the reporting period - The company did not disclose any "Dual Improvement in Quality and Returns" action plan announcements during the reporting period[87](index=87&type=chunk) Section IV Corporate Governance, Environment, and Society [I. Changes in Directors, Supervisors, and Senior Management](index=33&type=section&id=I.%20Changes%20in%20Directors,%20Supervisors,%20and%20Senior%20Management) There were no changes in the company's directors, supervisors, or senior management during the reporting period, as detailed in the 2024 annual report - There were no changes in the company's directors, supervisors, and senior management during the reporting period[88](index=88&type=chunk) [II. Profit Distribution and Capital Reserve Conversion to Share Capital During the Reporting Period](index=33&type=section&id=II.%20Profit%20Distribution%20and%20Capital%20Reserve%20Conversion%20to%20Share%20Capital%20During%20the%20Reporting%20Period) The company plans not to distribute cash dividends, bonus shares, or convert capital reserves into share capital for the half-year period - The company plans not to distribute cash dividends, bonus shares, or convert capital reserves into share capital for the half-year period[89](index=89&type=chunk) [III. Implementation of Share Incentive Plans, Employee Stock Ownership Plans, or Other Employee Incentive Measures](index=33&type=section&id=III.%20Implementation%20of%20Share%20Incentive%20Plans,%20Employee%20Stock%20Ownership%20Plans,%20or%20Other%20Employee%20Incentive%20Measures) The 2020 A-share restricted stock incentive plan granted **79.6 million** shares at **RMB 2.85/share**, but most were repurchased due to unmet performance targets and resignations, with **6.9 million** shares still pending cancellation due to judicial freeze - On May 29, 2020, the company granted **79.6 million** A-share restricted shares to 111 incentive recipients at an exercise price of **RMB 2.85** per share[94](index=94&type=chunk) - The incentive plan has a maximum validity period until July 14, 2025, with restricted periods released in three phases: 24 months, 36 months, and 48 months[96](index=96&type=chunk)[99](index=99&type=chunk) - Due to unmet performance conditions for 2022 and 2023 and the resignation of some incentive recipients, the company has repurchased and cancelled most of the restricted shares[106](index=106&type=chunk)[107](index=107&type=chunk) - As of the end of the reporting period, **6.9 million** A-share restricted shares held by 2 resigned incentive recipients have not completed repurchase and cancellation procedures due to judicial freeze[109](index=109&type=chunk)[110](index=110&type=chunk) - During the reporting period, the company did not grant any new awards, nor did it have any employee stock ownership plans or other employee incentive measures[110](index=110&type=chunk)[111](index=111&type=chunk) [1. Share Incentives](index=33&type=section&id=1.%20Share%20Incentives) The 2020 A-share restricted stock incentive plan granted **79.6 million** shares at **RMB 2.85/share** to 111 individuals, but most were repurchased due to unmet performance targets, with **6.9 million** shares still judicially frozen - The 2020 A-share restricted stock incentive plan aims to improve the company's governance structure and incentivize directors, core technical, and business personnel[92](index=92&type=chunk) - The plan involves 111 incentive recipients, granting **79.6 million** A-share restricted shares at an exercise price of **RMB 2.85** per share[93](index=93&type=chunk)[94](index=94&type=chunk) - The incentive plan has a maximum validity period until July 14, 2025, with restricted periods released in three phases: 24 months, 36 months, and 48 months[96](index=96&type=chunk)[99](index=99&type=chunk) - Due to unmet performance conditions for 2022 and 2023 and the resignation of some incentive recipients, the conditions for the second and third restricted periods were not met, and the company has repurchased and cancelled most of the restricted shares[106](index=106&type=chunk)[107](index=107&type=chunk) - As of the end of the reporting period, **6.9 million** A-share restricted shares held by 2 resigned incentive recipients have not completed repurchase and cancellation procedures due to judicial freeze[109](index=109&type=chunk)[110](index=110&type=chunk) [2. Implementation of Employee Stock Ownership Plans](index=38&type=section&id=2.%20Implementation%20of%20Employee%20Stock%20Ownership%20Plans) The company had no employee stock ownership plans in place during the reporting period - The company had no employee stock ownership plans during the reporting period[111](index=111&type=chunk) [3. Other Employee Incentive Measures](index=38&type=section&id=3.%20Other%20Employee%20Incentive%20Measures) The company had no other employee incentive measures during the reporting period - The company had no other employee incentive measures during the reporting period[111](index=111&type=chunk) [IV. Environmental Information Disclosure](index=39&type=section&id=IV.%20Environmental%20Information%20Disclosure) The company and its seven major subsidiaries are listed as legally required environmental information disclosers, publishing reports on respective provincial platforms, demonstrating environmental commitment and transparency - The company and its 7 major subsidiaries are included in the list of enterprises required to disclose environmental information by law[112](index=112&type=chunk) - The environmental information disclosure reports of each enterprise can be found on the respective provincial enterprise environmental information disclosure systems[112](index=112&type=chunk) [V. Social Responsibility](index=40&type=section&id=V.%20Social%20Responsibility) The company upholds its mission of "creating value and contributing to society" by safeguarding stakeholder rights, promoting green development, optimizing governance, ensuring employee welfare, and implementing stringent environmental protection measures - The company continuously optimizes its corporate governance structure, strictly discloses information, communicates with investors through multiple channels, and actively negotiates debt repayment plans with creditors to protect the rights and interests of shareholders and creditors[114](index=114&type=chunk) - The company complies with labor laws, strengthens humanistic care, focuses on employee empowerment, fully implements safety production responsibility systems, and conducts layered and categorized specialized training programs to protect employee rights and interests[115](index=115&type=chunk) - Adhering to the core values of "integrity-based, win-win sharing," the company focuses on customers to improve product quality and services, and protects the rights and interests of customers and suppliers by improving procurement bidding systems and fostering strategic partnerships[116](index=116&type=chunk) - The company practices the philosophy that "lucid waters and lush mountains are invaluable assets," strictly enforces environmental regulations, promotes clean production, strengthens "three wastes" treatment, equips advanced pollution control facilities, and integrates ecological design concepts into product processes to protect the ecological environment[117](index=117&type=chunk) [VI. Disclosures under HKEX Listing Rules](index=41&type=section&id=VI.%20Disclosures%20under%20HKEX%20Listing%20Rules) The company generally complied with HKEX Corporate Governance Code, except for delayed board and supervisory committee re-election, and no non-compliance with the Model Code for Securities Transactions by Directors was noted - During the reporting period, the company complied with the principles and code provisions of the Corporate Governance Code contained in Appendix C1 of the Hong Kong Listing Rules, but the Board of Directors and Supervisory Committee were delayed due to incomplete re-election work, failing to fully comply with code provision B.2.2 regarding the rotation of directors[118](index=118&type=chunk) - After full consultation with all directors of the company, the company is not aware of any information that reasonably indicates that any director failed to comply with the standards stipulated in Appendix C3 of the Hong Kong Listing Rules, "Model Code for Securities Transactions by Directors of Listed Issuers," during the reporting period[119](index=119&type=chunk) Section V Significant Matters [I. Commitments Fulfilled and Overdue Unfulfilled by Controlling Shareholder, Shareholders, Related Parties, Acquirers, and the Company](index=42&type=section&id=I.%20Commitments%20Fulfilled%20and%20Overdue%20Unfulfilled%20by%20Controlling%20Shareholder,%20Shareholders,%20Related%20Parties,%20Acquirers,%20and%20the%20Company) No commitments by the controlling shareholder, related parties, or the company were overdue or unfulfilled at the end of the reporting period - During the reporting period, there were no commitments by the company's actual controller, shareholders, related parties, acquirers, or the company that were fulfilled or overdue and unfulfilled as of the end of the reporting period[120](index=120&type=chunk) [II. Non-Operating Funds Occupied by Controlling Shareholder and Other Related Parties](index=42&type=section&id=II.%20Non-Operating%20Funds%20Occupied%20by%20Controlling%20Shareholder%20and%20Other%20Related%20Parties) There were no non-operating funds occupied by the controlling shareholder or other related parties during the reporting period - During the reporting period, there were no non-operating funds occupied by the controlling shareholder or other related parties of the listed company[121](index=121&type=chunk) [III. Irregular External Guarantees](index=42&type=section&id=III.%20Irregular%20External%20Guarantees) The company had no irregular external guarantees during the reporting period - The company had no irregular external guarantees during the reporting period[122](index=122&type=chunk) [IV. Appointment and Dismissal of Accounting Firms](index=42&type=section&id=IV.%20Appointment%20and%20Dismissal%20of%20Accounting%20Firms) The company's semi-annual financial report was not audited - The company's semi-annual report was not audited[123](index=123&type=chunk) [V. Board of Directors' and Supervisory Committee's Explanations on the Accounting Firm's "Non-Standard Audit Report" for the Current Period](index=42&type=section&id=V.%20Board%20of%20Directors'%20and%20Supervisory%20Committee's%20Explanations%20on%20the%20Accounting%20Firm's%20%22Non-Standard%20Audit%20Report%22%20for%20the%20Current%20Period) The Board of Directors and Supervisory Committee provided no explanations regarding a "non-standard audit report" for the current period - During the reporting period, there were no explanations from the Board of Directors or Supervisory Committee regarding the accounting firm's "non-standard audit report" for the current period[124](index=124&type=chunk) [VI. Board of Directors' Explanations on the "Non-Standard Audit Report" for the Previous Year](index=43&type=section&id=VI.%20Board%20of%20Directors'%20Explanations%20on%20the%20%22Non-Standard%20Audit%20Report%22%20for%20the%20Previous%20Year) The Board addressed the 2024 qualified audit opinion by actively resuming production, securing syndicated loans, restructuring debt, and disposing of non-core assets to improve going concern - The Board of Directors has provided a special explanation regarding the qualified opinion audit report issued by Grant Thornton Certified Public Accountants on the company's 2024 annual financial report[125](index=125&type=chunk) - The company is actively promoting the resumption of production, the disbursement of syndicated loans, debt restructuring, the introduction of strategic investors, and asset disposal to improve its going concern ability[126](index=126&type=chunk) - As of the end of the reporting period, some production bases in Huanggang, Jiangxi, and Shouguang are operating normally, the **RMB 2.31 billion** syndicated loan has been approved, and idle and non-core assets totaling **RMB 587.73 million** have been disposed of[126](index=126&type=chunk) [VII. Bankruptcy Reorganization Matters](index=43&type=section&id=VII.%20Bankruptcy%20Reorganization%20Matters) The company had no bankruptcy reorganization matters during the reporting period - The company had no bankruptcy reorganization matters during the reporting period[127](index=127&type=chunk) [VIII. Litigation Matters](index=44&type=section&id=VIII.%20Litigation%20Matters) The company was involved in multiple litigations, including the dismissal of a winding-up petition by Arjowiggins HKK2 Limited, and various other lawsuits as both plaintiff and defendant - The winding-up petition against the company by Arjowiggins HKK2 Limited was dismissed by the Hong Kong High Court of First Instance on June 20, 2025, and has been fully executed[128](index=128&type=chunk) Summary of Other Litigation Matters | Basic Information of Litigation (Arbitration) | Amount Involved (RMB ten thousand yuan) | Provision for Liabilities Formed | Outcome and Impact of Litigation (Arbitration) | | :--- | :--- | :--- | :--- | | Summary of Litigation (Arbitration) Matters where Chenming Leasing is Plaintiff | 46,432.83 | No | All adjudicated lawsuits recognized the defendants and guarantors' obligation to repay the company's debts, aligning with the company's claims, and will not have a significant impact on the company's operations and financial position. | | Summary of Litigation (Arbitration) Matters where the Company and its Other Subsidiaries are Plaintiffs | 43,406.09 | No | No significant impact on the company's operations and financial position. | | Summary of Litigation (Arbitration) Matters where the Company and its Other Subsidiaries are Defendants | 777,818.36 | Provision for liabilities of RMB 593.5 million | Litigation cases are being properly resolved through communication, negotiation, active defense, and reaching settlements with creditors. | [IX. Penalties and Rectification](index=45&type=section&id=IX.%20Penalties%20and%20Rectification) The company had no penalties or rectification situations during the reporting period - The company had no penalties or rectification situations during the reporting period[130](index=130&type=chunk) [X. Integrity Status of the Company, its Controlling Shareholder, and Actual Controller](index=45&type=section&id=X.%20Integrity%20Status%20of%20the%20Company,%20its%20Controlling%20Shareholder,%20and%20Actual%20Controller) The company and Zhanjiang Chenming were listed as dishonest judgment debtors in two cases for failing to fulfill court-ordered obligations, while the controlling shareholder and actual controller were not - During the reporting period, the company and Zhanjiang Chenming were listed as dishonest judgment debtors in 2 cases for failing to fulfill obligations defined by effective legal documents of the court[131](index=131&type=chunk) - The company's controlling shareholder and actual controller are not dishonest judgment debtors[131](index=131&type=chunk) [XI. Significant Related Party Transactions](index=45&type=section&id=XI.%20Significant%20Related%20Party%20Transactions) The company engaged in routine related-party transactions, including port fees, and had non-operating related-party receivables and payables, with controlling shareholder financial support impacting operations Related Party Transactions Related to Daily Operations | Related Party | Type of Related Party Transaction | Content of Related Party Transaction | Amount of Related Party Transaction (RMB ten thousand yuan) | Approved Transaction Limit (RMB ten thousand yuan) | Exceeded Approved Limit | | :--- | :--- | :--- | :--- | :--- | :--- | | Weifang Port Area Wood Chip Terminal Co. Ltd. | Labor Services | Port miscellaneous fees | 233.33 | 11,000.00 | No | Receivables from Related Parties | Item Name | Related Party | Period-End Balance (RMB ten thousand yuan) | Beginning Balance (RMB ten thousand yuan) | | :--- | :--- | :--- | :--- | | Shouguang Meite Environmental Protection Technology Co. Ltd. | Financial assistance | 1,137.78 | 1,106.33 | | Weifang Port Area Wood Chip Terminal Co. Ltd. | Financial assistance | 8,129.82 | 7,939.77 | | Wuhan Chenming Hanyang Paper Co. Ltd. | Financial assistance | 17,797.13 | 23,809.34 | Payables to Related Parties | Item Name | Related Party | Period-End Balance (RMB ten thousand yuan) | Beginning Balance (RMB ten thousand yuan) | | :--- | :--- | :--- | :--- | | Chenming Holdings Co. Ltd. | Financial assistance | 3,683.98 | 3,850.00 | | Guangdong Nanyue Bank Co. Ltd. | Borrowings | 75,829.00 | 85,789.00 | - During the reporting period, the company had no related party transactions involving asset or equity acquisition/disposal, no related party transactions involving joint external investments, no dealings with related financial companies, and no other significant related party transactions[133](index=133&type=chunk)[134](index=134&type=chunk)[136](index=136&type=chunk)[137](index=137&type=chunk)[138](index=138&type=chunk) [XII. Significant Contracts and Their Performance](index=47&type=section&id=XII.%20Significant%20Contracts%20and%20Their%20Performance) The company had no custodianship, but a subsidiary outsourced port operations for **RMB 4 million** annually; it also engaged in various leases and provided significant guarantees to subsidiaries, with **RMB 19.75 billion** outstanding and **RMB 1.98 billion** overdue - The company had no custodianship during the reporting period[139](index=139&type=chunk)[142](index=142&type=chunk) - Subsidiary Jiangxi Chenming outsourced Jiangxi Port's business to Jiangxi Yirong Investment Co. Ltd. for a 5-year contract period, with an annual fixed fee of **RMB 4 million**[140](index=140&type=chunk) Lease Expenses as Lessee | Item | H1 2025 (RMB) | | :--- | :--- | | Low-value leases | 2,220,927.78 | | **Total** | **2,220,927.78** | Operating Lease Income as Lessor | Item | H1 2025 (RMB) | | :--- | :--- | | Lease income | 60,638,854.58 | | **Total** | **60,638,854.58** | - During the reporting period, the company provided guarantees to subsidiaries totaling **RMB 4.330 billion**. As of June 30, 2025, the company's outstanding external guarantees amounted to **RMB 19.755 billion**, representing **371.42%** of the equity attributable to parent company shareholders, with overdue guarantees totaling **RMB 1.979 billion**[149](index=149&type=chunk)[158](index=158&type=chunk) - The company had no entrusted wealth management or other significant contracts during the reporting period[163](index=163&type=chunk)[164](index=164&type=chunk) [XIII. Explanations of Other Significant Matters](index=59&type=section&id=XIII.%20Explanations%20of%20Other%20Significant%20Matters) The company faces severe challenges including **RMB 3.82 billion** in overdue debt, 332 frozen bank accounts, and production line shutdowns, with delayed board and supervisory committee re-elections - As of the end of the reporting period, the company's cumulative overdue debt amounted to **RMB 3.821 billion**, with 332 bank accounts cumulatively frozen, totaling **RMB 39.3805 million** in frozen funds, and some production lines remain shut down for maintenance[166](index=166&type=chunk) - The term of the company's Tenth Board of Directors and Supervisory Committee expired on June 15, 2025, and the re-election has been postponed due to incomplete charter revisions and re-election work[169](index=169&type=chunk) - This section provides an index of significant matters publicly disclosed by the company during the H1 2025 reporting period, including equity restructuring, litigation, performance forecasts, and risk warnings[170](index=170&type=chunk)[171](index=171&type=chunk)[172](index=172&type=chunk) [XIV. Significant Matters of Company Subsidiaries](index=63&type=section&id=XIV.%20Significant%20Matters%20of%20Company%20Subsidiaries) Shandong Chenming Group Finance Co. Ltd.'s dissolution was approved, and the company decided to terminate the Huanggang Chenming Phase II project to preserve liquidity and protect shareholder interests - The dissolution of Shandong Chenming Group Finance Co. Ltd. has been approved by the National Financial Regulatory Administration, and relevant procedures will be handled as required[174](index=174&type=chunk) - The company has approved the termination of the Huanggang Chenming Phase II project to prevent further capital expenditures from impacting liquidity and to protect the interests of the company and all shareholders[175](index=175&type=chunk) Section VI Share Changes and Shareholder Information [I. Share Changes](index=64&type=section&id=I.%20Share%20Changes) The total number of shares remained unchanged, but restricted shares decreased by **5,562,842**, and unrestricted shares increased by the same amount, mainly due to director/supervisor/senior management share reclassification and resignations Share Changes | Share Class | Number Before Change (shares) | Increase/Decrease in This Change (shares) | Number After Change (shares) | | :--- | :--- | :--- | :--- | | I. Restricted Shares | 30,941,154 | -5,562,842 | 25,378,312 | | II. Unrestricted Shares | 2,910,515,046 | 5,562,842 | 2,916,077,888 | | III. Total Shares | 2,941,456,200 | 0 | 2,941,456,200 | - Share changes were primarily due to the re-calculation of transferable quotas for restricted shares held by directors, supervisors, and senior management at **25%**, and changes in restricted shares due to the resignation of some directors, supervisors, and senior management after 6 months[178](index=178&type=chunk) - Changes in restricted shares involve adjustments to restricted shares held by directors, supervisors, and senior management, as well as some restricted shares from equity incentives that have not completed repurchase and cancellation procedures due to judicial freeze[181](index=181&type=chunk)[182](index=182&type=chunk) [II. Securities Issuance and Listing](index=66&type=section&id=II.%20Securities%20Issuance%20and%20Listing) The company had no securities issuance or listing activities during the reporting period - The company had no securities issuance or listing activities during the reporting period[183](index=183&type=chunk) [III. Number of Shareholders and Shareholding](index=67&type=section&id=III.%20Number%20of%20Shareholders%20and%20Shareholding) As of period-end, the company had **117,668** common shareholders, with Chenming Holdings Co. Ltd. as the largest shareholder (**15.50%**), whose shares are pledged and frozen - As of the end of the reporting period, the total number of common shareholders was **117,668** (including **99,783** A-share holders, **17,568** B-share holders, and **317** H-share holders)[185](index=185&type=chunk) Shareholding of Shareholders Holding 5% or More or Top 10 Shareholders | Shareholder Name | Shareholder Nature | Shareholding Percentage | Number of Shares Held at Period-End (shares) | Pledged, Marked, or Frozen Status (shares) | | :--- | :--- | :--- | :--- | :--- | | Chenming Holdings Co. Ltd. | State-owned Legal Person | 15.50% | 455,781,319 | Pledged 386,811,546, Frozen 409,956,441 | | HKSCC NOMINEES LIMITED | Overseas Legal Person | 12.69% | 373,409,775 | Not applicable 0 | | Chenming Holdings (Hong Kong) Co. Ltd. | Overseas Legal Person | 12.38% | 364,131,563 | Not applicable 0 | | Chen Hongguo | Domestic Natural Person | 0.65% | 19,080,044 | Frozen 19,080,044 | - Chenming Holdings (Hong Kong) Co. Ltd. is a wholly-owned subsidiary of Chenming Holdings Co. Ltd[186](index=186&type=chunk) - **6,000,000** equity incentive restricted shares held by Mr. Chen Hongguo have not completed repurchase and cancellation procedures due to judicial freeze[186](index=186&type=chunk)[188](index=188&type=chunk) [IV. Shareholding Changes of Directors, Supervisors, and Senior Management](index=69&type=section&id=IV.%20Shareholding%20Changes%20of%20Directors,%20Supervisors,%20and%20Senior%20Management) There were no changes in the shareholdings of the company's directors, supervisors, and senior management during the reporting period - There were no changes in the shareholdings of the company's directors, supervisors, and senior management during the reporting period[190](index=190&type=chunk) [V. Changes in Controlling Shareholder or Actual Controller](index=69&type=section&id=V.%20Changes%20in%20Controlling%20Shareholder%20or%20Actual%20Controller) There were no changes in the company's controlling shareholder or actual controller during the reporting period - The company's controlling shareholder did not change during the reporting period[191](index=191&type=chunk) - The company's actual controller did not change during the reporting period[192](index=192&type=chunk) [VI. Preferred Shares](index=69&type=section&id=VI.%20Preferred%20Shares) The company had no preferred shares during the reporting period - The company had no preferred shares during the reporting period[193](index=193&type=chunk) [VII. Securities Interests of Directors, Supervisors, and Chief Executive Disclosed under HKEX Listing Rules](index=70&type=section&id=VII.%20Securities%20Interests%20of%20Directors,%20Supervisors,%20and%20Chief%20Executive%20Disclosed%20under%20HKEX%20Listing%20Rules) As of June 30, 2025, some directors and supervisors held A-shares, but no other registrable interests or short positions in the company's securities were held by directors, supervisors, or the chief executive Securities Interests of Directors, Supervisors, and Chief Executive | Name | Position | Number of A-Shares Held at Period-End (sha