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。 長 城 汽 車 股 份 有 限 公 司 GREAT WALL MOTOR COMPANY LIMITED* （於中華人民共和國註冊成立的股份有限公司） 股份代號：02333（港幣櫃檯）及82333（人民幣櫃檯） 截 至 2 0 2 5 年 6 月 3 0 日 止 6 個 月 中 期 業 績 公 告 長城汽車股份有限公司（「本公司」）董事會（「董事會」）欣然宣佈本公司及其子 公司截至 2025 年 6 月 30 日止 6 個月未經審計中期業績。本公告載有本公司 2025 年中期報 告全文，乃按香港聯合交易所有限公司證券上市規則中有關中期業績初步公告的相關 規定而編制。本公司 2025 年中期報告的印刷版本將寄發予本公司股東，並可于香港聯合 交易所有限公司網站（www.hkexnews.hk）及本公司官方網站（www.gwm.com.cn）閱覽。 承董事會命 長城汽車股份有限公司 聯席公司秘書 李紅栓 重要提 ...

[Interim Results Summary](index=1&type=section&id=Interim%20Results%20Summary) This section provides an overview of the company's financial performance and position for the interim period, highlighting key changes in income, comprehensive expenses, and financial standing [Condensed Consolidated Income Statement](index=1&type=section&id=Condensed%20Consolidated%20Income%20Statement) During the reporting period, the company's revenue significantly decreased by 71.2% to RMB 330 '000, but gross profit turned from loss to a profit of RMB 160 '000 due to strict cost control, with loss for the period narrowing by 51.8% to RMB 1,921 '000 Key Data from Condensed Consolidated Income Statement | Indicator | Six Months Ended 30 June 2025 (RMB '000) | Six Months Ended 30 June 2024 (RMB '000) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 330 | 1,146 | -71.2% | | Cost of services | (170) | (1,384) | -87.7% | | Gross profit/(loss) | 160 | (238) | Turnaround to profit | | Investment income and other gains and losses | 659 | 968 | -31.9% | | Operating and administrative expenses | (2,699) | (4,666) | -42.2% | | Finance costs | (41) | (43) | -4.7% | | Loss before tax | (1,921) | (3,979) | -51.8% | | Income tax expense | – | – | - | | Loss for the period attributable to owners of the Company | (1,921) | (3,979) | -51.8% | | Basic loss per share (RMB cents) | (0.78) | (1.61) | -51.6% | | Diluted loss per share (RMB cents) | (0.78) | (1.61) | -51.6% | [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=2&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) The company's loss for the period was RMB 1,921 '000, but other comprehensive income from foreign currency exchange differences of RMB 991 '000 significantly reduced the total comprehensive expense attributable to owners of the Company to RMB 930 '000, a 74.9% year-on-year narrowing Key Data from Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income | Indicator | Six Months Ended 30 June 2025 (RMB '000) | Six Months Ended 30 June 2024 (RMB '000) | Change (%) | | :--- | :--- | :--- | :--- | | Loss for the period | (1,921) | (3,979) | -51.8% | | Exchange differences on translation of foreign operations | 991 | 271 | +265.7% | | Other comprehensive income for the period, net of tax | 991 | 271 | +265.7% | | Total comprehensive expense for the period attributable to owners of the Company | (930) | (3,708) | -74.9% | [Condensed Consolidated Statement of Financial Position](index=3&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, both non-current and current assets decreased, leading to a 25.2% year-on-year reduction in net assets to RMB 2,775 '000, with corresponding decreases in current and non-current liabilities, notably a significant drop in loans from a related company Key Data from Condensed Consolidated Statement of Financial Position | Indicator | 30 June 2025 (RMB '000) | 31 December 2024 (RMB '000) | Change (%) | | :--- | :--- | :--- | :--- | | **Non-current assets** | | | | | Property, plant and equipment | 458 | 505 | -9.2% | | Right-of-use assets | 1,528 | 1,756 | -13.0% | | Investment properties | 9,619 | 9,743 | -1.3% | | Total non-current assets | 11,605 | 12,004 | -3.3% | | **Current assets** | | | | | Trade receivables | 1,251 | 1,412 | -11.4% | | Prepayments and other deposits | 579 | 600 | -3.5% | | Other receivables | 57 | 97 | -41.2% | | Financial assets at fair value through profit or loss | – | 10,000 | -100.0% | | Bank and cash balances | 4,375 | 3,489 | +25.4% | | Total current assets | 6,262 | 15,598 | -59.9% | | **Current liabilities** | | | | | Accruals and other payables | 2,936 | 4,000 | -26.5% | | Lease liabilities | 434 | 434 | 0.0% | | Total current liabilities | 3,370 | 4,434 | -24.0% | | **Non-current liabilities** | | | | | Lease liabilities | 1,222 | 1,463 | -16.5% | | Loan from a related company | 10,500 | 18,000 | -41.7% | | Total non-current liabilities | 11,722 | 19,463 | -39.7% | | **Net assets** | 2,775 | 3,705 | -25.2% | | **Total equity** | 2,775 | 3,705 | -25.2% | [Notes to the Condensed Consolidated Interim Financial Statements](index=4&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Interim%20Financial%20Statements) This section details the accounting policies, adoption of new standards, revenue breakdown, tax expenses, loss components, dividends, loss per share, and trade receivables for the interim financial statements [1. Basis of Preparation and Accounting Policies](index=4&type=section&id=1.%20Basis%20of%20Preparation%20and%20Accounting%20Policies) These interim financial statements are prepared in accordance with HKAS 34 and the Listing Rules, with accounting policies consistent with the 2024 annual consolidated financial statements - The condensed consolidated interim 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 Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited[5](index=5&type=chunk) - The accounting policies and methods of computation adopted in the preparation of these condensed consolidated interim financial statements are consistent with those applied in the annual consolidated financial statements for the year ended 31 December 2024[5](index=5&type=chunk) [2. Adoption of New and Revised HKFRSs](index=4&type=section&id=2.%20Adoption%20of%20New%20and%20Revised%20HKFRSs) The Group has adopted all new and revised HKFRSs effective January 1, 2025, with no significant impact on current or prior period financial position or performance - The Group has adopted all new and revised Hong Kong Financial Reporting Standards ("HKFRSs") issued by the HKICPA that are relevant to its operations and effective for accounting periods beginning on 1 January 2025[6](index=6&type=chunk) - The application of the amendments to HKFRSs in the current period has had no material effect on the Group's financial position and performance for the current and prior periods and/or on the disclosures set out in these condensed consolidated financial statements[7](index=7&type=chunk) [4. Revenue and Segment Information](index=5&type=section&id=4.%20Revenue%20and%20Segment%20Information) The Group primarily provides property consultancy and sales agency services in China, with revenue of RMB 330 '000 for the period, a 71.2% year-on-year decrease, entirely from integrated property consultancy and sales agency services in the Chinese market - The Group is principally engaged in the business of providing property consultancy and sales agency services for the property market in the People's Republic of China[8](index=8&type=chunk) Revenue by Business and Geographical Location | Revenue Source | Six Months Ended 30 June 2025 (RMB '000) | Six Months Ended 30 June 2024 (RMB '000) | Change (%) | | :--- | :--- | :--- | :--- | | Integrated property consultancy and sales agency service projects (PRC) | 330 | 1,146 | -71.2% | | Pure property planning and consultancy service projects (PRC) | – | – | 0.0% | | **Total Revenue** | **330** | **1,146** | **-71.2%** | - The Group is engaged in a single business, namely the provision of agency services for the sale of properties and property consultancy services, with the majority of its operations and assets located in the PRC[10](index=10&type=chunk) [5. Income Tax Expense](index=5&type=section&id=5.%20Income%20Tax%20Expense) No provision for Hong Kong profits tax, PRC enterprise income tax, or Cambodian profits tax was required as the Company and its related group entities had no assessable profits during the reporting period - No provision for Hong Kong profits tax has been made as the Company had no assessable profits for the review period and the corresponding period last year[11](index=11&type=chunk) - No PRC enterprise income tax was paid for both periods as the relevant group entities had no assessable profits during both periods[11](index=11&type=chunk) - No provision for profits tax has been made as the Company's subsidiary in Cambodia recorded losses during both periods[12](index=12&type=chunk) [6. Loss for the period has been arrived at after charging/(crediting) the following](index=6&type=section&id=6.%20Loss%20for%20the%20period%20has%20been%20arrived%20at%20after%20charging%2F%28crediting%29%20the%20following) During the period, auditor's remuneration remained unchanged, interest income slightly increased, while depreciation for property, plant and equipment, right-of-use assets, and investment properties significantly decreased, and reversal of provision for trade receivables also increased Items Charged/(Credited) in Loss for the Period | Item | Six Months Ended 30 June 2025 (RMB '000) | Six Months Ended 30 June 2024 (RMB '000) | Change (%) | | :--- | :--- | :--- | :--- | | Auditor's remuneration | 160 | 160 | 0.0% | | Interest income | (64) | (63) | +1.6% | | Depreciation of property, plant and equipment | 47 | 177 | -73.5% | | Depreciation of right-of-use assets | 228 | 273 | -16.5% | | Depreciation of investment properties | 124 | 361 | -65.7% | | Rental income from investment properties less direct expenses | (139) | (223) | -37.7% | | Reversal of provision for trade receivables | (492) | (400) | +23.0% | [7. Dividends](index=6&type=section&id=7.%20Dividends) The Board does not recommend the payment of any interim dividend for the reporting period, consistent with the prior corresponding period - The Board does not recommend the payment of any interim dividend for the review period (six months ended 30 June 2024: nil)[14](index=14&type=chunk) [8. Loss Per Share](index=6&type=section&id=8.%20Loss%20Per%20Share) Basic loss per share for the period was RMB 0.78 cents, a significant narrowing from RMB 1.61 cents in the prior period, primarily due to reduced loss for the period, with no diluted loss per share presented due to the absence of potential dilutive ordinary shares Loss Per Share Data | Indicator | Six Months Ended 30 June 2025 | Six Months Ended 30 June 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Loss for the period attributable to owners of the Company (RMB '000) | 1,921 | 3,979 | -51.8% | | Number of ordinary shares in issue (shares) | 246,183,390 | 246,183,390 | 0.0% | | Basic loss per share (RMB cents) | (0.78) | (1.61) | -51.6% | - No diluted loss per share is presented as the Company did not have any potential dilutive ordinary shares for the periods ended 30 June 2025 and 30 June 2024[15](index=15&type=chunk) [9. Trade Receivables](index=6&type=section&id=9.%20Trade%20Receivables) As of June 30, 2025, net trade receivables were RMB 1,251 '000, a decrease from year-end 2024, with an average credit period of 90 days and regular credit loss provisions, and an increase in trade receivables aged over two years Trade Receivables | Indicator | 30 June 2025 (RMB '000) | 31 December 2024 (RMB '000) | Change (%) | | :--- | :--- | :--- | :--- | | Gross trade receivables | 5,807 | 6,460 | -10.1% | | Less: Provision for credit losses | (4,556) | (5,048) | -9.7% | | **Net trade receivables** | **1,251** | **1,412** | **-11.4%** | - The Group grants an average credit period of **90 days** to its customers, maintaining strict control over outstanding receivables, with credit loss provisions made regularly after management considers the timing and likelihood of collection[16](index=16&type=chunk) Ageing Analysis of Trade Receivables | Ageing | 30 June 2025 (RMB '000) | 31 December 2024 (RMB '000) | | :--- | :--- | :--- | | 0 to 90 days | 53 | 279 | | 91 to 180 days | 150 | 9 | | 181 to 365 days | 9 | 18 | | One to two years | 343 | 680 | | Over two years | 696 | 426 | | **Total** | **1,251** | **1,412** | [Management Discussion and Analysis](index=8&type=section&id=Management%20Discussion%20and%20Analysis) This section reviews the business performance, macroeconomic and real estate market conditions, financial highlights, and outlook, along with discussions on liquidity, debt, risk management, and other corporate matters [Business Review](index=8&type=section&id=Business%20Review) In H1 2025, China's macroeconomic indicators remained stable, but domestic demand rebalanced, and the real estate market continued its transformation with declining residential sales, prompting the Group to adopt a cautious strategy, scaling back agency business, and shifting towards asset management opportunities - In the first half of 2025, China's GDP grew by **5.3%** year-on-year, M2 money supply increased by **8.3%**, and investment in manufacturing and high-tech industries continued positive growth[18](index=18&type=chunk) - National residential contracted sales area and sales value still decreased by **3.7%** and **5.2%** year-on-year, respectively, with real estate development investment decreasing by **11.2%** and funds raised by **6.2%** during the same period[19](index=19&type=chunk) - The Group adopted a more cautious and prudent operating strategy, compressing agency business to the Yancheng project with more certain cash flow, and redirecting management resources towards asset management opportunities with low capital occupation and quick cash returns[19](index=19&type=chunk) - The Group is negotiating asset management mandates for Oriental Building and Huaneng United Building in Shanghai's core CBD, targeting operations commencement in Q4 2025[20](index=20&type=chunk) [Macroeconomic and Real Estate Market Overview](index=8&type=section&id=Macroeconomic%20and%20Real%20Estate%20Market%20Overview) - In the first half of 2025, China's GDP grew by **5.3%** year-on-year, and M2 money supply increased by **8.3%**[18](index=18&type=chunk) - National residential contracted sales area and sales value still decreased by **3.7%** and **5.2%** year-on-year, respectively, with real estate development investment decreasing by **11.2%** and funds raised by **6.2%** during the same period[19](index=19&type=chunk) - The Group adopted a more cautious and prudent operating strategy, compressing agency business to the Yancheng project with more certain cash flow, and redirecting management resources towards asset management opportunities with low capital occupation and quick cash returns[19](index=19&type=chunk) [Financial Performance Summary](index=9&type=section&id=Financial%20Performance%20Summary) - The Group recorded revenue of approximately **RMB 0.3 million**, a significant decrease of approximately **71.2%** compared to the same period last year[21](index=21&type=chunk) - The Group recorded a gross profit of approximately **RMB 0.16 million** during the review period, compared to a gross loss of approximately **RMB 0.24 million** in the same period last year, primarily due to strict cost-saving policies[21](index=21&type=chunk) - During the review period, the Group recorded a net loss of approximately **RMB 1.9 million**, compared to a net loss of approximately **RMB 4.0 million** in the same period last year[22](index=22&type=chunk) - Revenue generated from the integrated property consultancy and sales agency services business segment remains the Group's primary source of income, accounting for **100%** of the Group's total revenue[23](index=23&type=chunk) [Integrated Property Consultancy and Sales Agency Business](index=10&type=section&id=Integrated%20Property%20Consultancy%20and%20Sales%20Agency%20Business) - The Group managed **2** integrated property consultancy and sales agency service projects in China (six months ended 30 June 2024: 3 projects)[24](index=24&type=chunk) - Unaudited total revenue from these integrated property consultancy and sales agency service projects was approximately **RMB 0.3 million**, a decrease of approximately **71.2%** compared to the same period in 2024[25](index=25&type=chunk) - The decrease in revenue was primarily due to the weakening Chinese economy since Q2 2023, leading to a decline in demand in China's primary real estate market[25](index=25&type=chunk) - As of 30 June 2025, the Group had **1** integrated property consultancy and sales agency service project (30 June 2024: 3 projects), with a total unsold gross floor area of approximately **2,000 square meters** (30 June 2024: approximately 27,000 square meters)[25](index=25&type=chunk) [Pure Property Planning and Consultancy Business](index=10&type=section&id=Pure%20Property%20Planning%20and%20Consultancy%20Business) - For the six months ended 30 June 2025, the Group's pure property planning and consultancy business segment had no ongoing projects, thus no revenue was recorded for this segment[26](index=26&type=chunk) - No revenue was generated from pure property planning and consultancy business, primarily due to China's economic conditions during the review period, which led to reduced demand from developers for the Group's market research and promotion planning services[26](index=26&type=chunk) [Outlook and Prospects](index=10&type=section&id=Outlook%20and%20Prospects) Looking ahead, the market anticipates potential interest rate cuts and RRR reductions this year, but the real estate market is expected to remain in an adjustment phase, with the Group prioritizing cash preservation and risk control, closely monitoring policies and inventory destocking, and reassessing expansion plans only when demand indicators show sustained improvement - The market generally expects another interest rate cut and further reduction in the reserve requirement ratio within the year[27](index=27&type=chunk) - The real estate market is expected to remain in an adjustment period, influenced by moderate expectations for household income growth and the transformation of urbanization from quantity to quality[27](index=27&type=chunk) - The Group will continue to prioritize cash preservation and risk control, closely monitoring policy implementation and inventory destocking, and will only reassess expansion plans when demand-side indicators show sustained improvement[27](index=27&type=chunk) [Liquidity and Financial Resources](index=11&type=section&id=Liquidity%20and%20Financial%20Resources) As of June 30, 2025, the Group's net current assets, total assets, and shareholders' funds all decreased, with the current ratio falling from 3.52 to 1.86, while bank and cash balances increased to RMB 4.4 million Overview of Liquidity and Financial Resources | Indicator | 30 June 2025 (RMB '000) | 31 December 2024 (RMB '000) | Change (%) | | :--- | :--- | :--- | :--- | | Net current assets | 2,900 (approx) | 11,200 (approx) | -74.1% | | Total assets | 17,900 (approx) | 27,600 (approx) | -35.2% | | Shareholders' funds | 2,800 (approx) | 3,700 (approx) | -24.3% | - The current ratio (calculated as total current assets divided by total current liabilities) decreased from **3.52** as at 31 December 2024 to **1.86** as at 30 June 2025[28](index=28&type=chunk) - Bank deposits and bank and cash balances were denominated in RMB and HKD, amounting to approximately **RMB 4.4 million** (31 December 2024: approximately RMB 3.5 million)[28](index=28&type=chunk) [Indebtedness and Charges on Assets](index=11&type=section&id=Indebtedness%20and%20Charges%20on%20Assets) As of June 30, 2025, the Group had no short-term borrowings, long-term borrowings were RMB 10.5 million (a 41.7% year-on-year decrease), and the gearing ratio fell to 378.4%, with no bank borrowings, overdrafts, or charges on assets - The Group had no short-term borrowings (31 December 2024: nil)[29](index=29&type=chunk) - There were long-term borrowings of **RMB 10.5 million** (31 December 2024: RMB 18 million), denominated in RMB and maturing on 31 December 2027[29](index=29&type=chunk) - The Group's gearing ratio (calculated as total borrowings divided by total equity) was **378.4%** (31 December 2024: 485.8%)[29](index=29&type=chunk) - The Group had no charges on assets[30](index=30&type=chunk) [Material Acquisitions and Disposals of Subsidiaries and Associates](index=11&type=section&id=Material%20Acquisitions%20and%20Disposals%20of%20Subsidiaries%20and%20Associates) During the reporting period, there were no material acquisitions or disposals of subsidiaries, associates, or joint ventures by the Company or its subsidiaries - During the review period, there were no material acquisitions or disposals of subsidiaries, associates, or joint ventures of the Company[31](index=31&type=chunk) [Events After the Reporting Period](index=11&type=section&id=Events%20After%20the%20Reporting%20Period) No significant events occurred after the end of the reporting period up to the date of this announcement - No significant events occurred after the end of the review period up to the date of this announcement[32](index=32&type=chunk) [Financial Risk Management](index=12&type=section&id=Financial%20Risk%20Management) The Group faces no significant foreign exchange risk, currently has no hedging policy but management continuously monitors it, and interest rate risk primarily stems from floating-rate bank balances, with no bank borrowings during the period - The Group has no significant currency fluctuation risk as sales are denominated in RMB and USD, purchases and expenses in RMB, HKD, or USD, and there are no significant foreign currency borrowings[33](index=33&type=chunk) - The Group currently has no foreign exchange hedging policy; however, management continuously monitors the Group's foreign exchange risk and will consider hedging significant foreign exchange risks when necessary[33](index=33&type=chunk) - The Group's interest rate risk primarily arises from fluctuations in interest rates on its floating-rate bank balances and other borrowings, with no bank borrowings exposed to interest rate risk held during the period[34](index=34&type=chunk) [Foreign Exchange Risk](index=12&type=section&id=Foreign%20Exchange%20Risk) - The Group has no significant currency fluctuation risk as sales are denominated in RMB and USD, purchases and expenses in RMB, HKD, or USD, and there are no significant foreign currency borrowings[33](index=33&type=chunk) - The Group currently has no foreign exchange hedging policy; however, management continuously monitors the Group's foreign exchange risk and will consider hedging significant foreign exchange risks when necessary[33](index=33&type=chunk) [Interest Rate Risk](index=12&type=section&id=Interest%20Rate%20Risk) - During the review period, the Group did not hold any bank borrowings exposed to interest rate risk[34](index=34&type=chunk) - The Group's interest rate risk primarily arises from fluctuations in interest rates on its floating-rate bank balances and other borrowings, as the Group had no bank borrowings[34](index=34&type=chunk) [Material Investments](index=12&type=section&id=Material%20Investments) As of December 31, 2024, the Group had invested RMB 10 million in wealth management products from China Merchants Bank and Huaxia Bank, which were fully redeemed by June 30, 2025, realizing a net gain of RMB 18 '000, with no material investments or future plans at the reporting date or announcement date - As of 31 December 2024, the Company, through its group members, had subscribed to wealth management products offered by China Merchants Bank and Huaxia Bank, each amounting to approximately **RMB 5,000,000**, totaling approximately **RMB 10,000,000**[35](index=35&type=chunk) - For the period ended 30 June 2025, the entire principal amount of the wealth management products subscribed from China Merchants Bank and Huaxia Bank was fully redeemed, and the Group recorded a net realized gain of approximately **RMB 18,000** on financial assets at fair value through profit or loss[36](index=36&type=chunk) - As of 30 June 2025, the Group had no material investments, and as of the date of this announcement, the Group had no future plans for material investments or capital assets[36](index=36&type=chunk) [Contingent Liabilities and Capital Commitments](index=12&type=section&id=Contingent%20Liabilities%20and%20Capital%20Commitments) As of June 30, 2025, the Group had no significant contingent liabilities or capital commitments - As of 30 June 2025, the Group had no significant contingent liabilities (31 December 2024: nil)[37](index=37&type=chunk) - As of 30 June 2025, the Group had no significant capital commitments (31 December 2024: nil)[38](index=38&type=chunk) [Employees and Remuneration Policy of the Group](index=13&type=section&id=Employees%20and%20Remuneration%20Policy%20of%20the%20Group) As of June 30, 2025, the Group had 19 employees, with staff costs (excluding directors' emoluments) of RMB 1.5 million, and a remuneration policy based on performance, individual contribution, experience, and responsibilities, complemented by a share option scheme for employee incentives - As of 30 June 2025, the Group had a total of **19** employees (31 December 2024: 25 employees)[39](index=39&type=chunk) - For the six months ended 30 June 2025, the Group recorded staff costs (excluding directors' emoluments) of approximately **RMB 1.5 million** (six months ended 30 June 2024: RMB 1.4 million)[39](index=39&type=chunk) - The Group's remuneration policy is formulated based on the Group's operating results, employees' individual performance, work experience, respective duties, expertise, qualifications, and abilities, as well as comparable market data and national policies[39](index=39&type=chunk) - The Company has adopted a share option scheme aimed at providing incentives and rewards to eligible participants who contribute to the Group[39](index=39&type=chunk) [Purchase, Sale or Redemption of the Company’s Listed Securities](index=13&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company%E2%80%99s%20Listed%20Securities) During the reporting period, neither the Company nor its subsidiaries purchased, sold, or redeemed any of the Company's listed securities - Neither the Company nor its subsidiaries purchased, sold, or redeemed any of the Company's listed securities during the six months ended 30 June 2025[40](index=40&type=chunk) [Public Float](index=13&type=section&id=Public%20Float) As of the latest practicable date prior to the printing of this announcement, the Company has maintained sufficient public float as required by the Listing Rules - As of the latest practicable date prior to the printing of this announcement, the Company has maintained sufficient public float as required by the Listing Rules[41](index=41&type=chunk) [Corporate Governance](index=13&type=section&id=Corporate%20Governance) This section outlines the company's adherence to corporate governance codes, standards for directors' securities transactions, and the audit committee's review of financial statements [Corporate Governance Code Compliance](index=13&type=section&id=Corporate%20Governance%20Code%20Compliance) The Company regularly reviews its corporate governance practices and believes it complied with the Corporate Governance Code during the reporting period, except for the combined roles of Chairman and Chief Executive Officer held by Mr. Jiang Chenfeng, which the Board believes ensures consistent leadership and efficient decision-making - The Directors believe that the Company has complied with the code provisions set out in the Corporate Governance Code for the six months ended 30 June 2025, save for the deviation from code provision C.2.1 of the Corporate Governance Code as disclosed below[42](index=42&type=chunk) - During the review period, the Company did not distinguish between the roles of Chairman and Chief Executive Officer, with Mr. Jiang Chenfeng holding both positions concurrently[43](index=43&type=chunk) - The Board believes that combining the roles of Chairman and Chief Executive Officer in one person ensures consistent leadership for the Group, leading to more effective and efficient overall strategic planning for the Group[43](index=43&type=chunk) [Standard Code for Securities Transactions by Directors](index=14&type=section&id=Standard%20Code%20for%20Securities%20Transactions%20by%20Directors) The Company has adopted a code of conduct for directors' securities transactions no less exacting than the Standard Code in Appendix C3 of the Listing Rules, and all directors confirmed compliance during the reporting period - The Company has adopted a code of conduct regarding securities transactions by Directors, the terms of which are no less exacting than the required standards set out in the Model Code for Securities Transactions by Directors of Listed Issuers contained in Appendix C3 of the Listing Rules[44](index=44&type=chunk) - Following specific enquiries made to all Directors, all Directors confirmed that they have complied with the required standards set out in the Model Code and the Company's code of conduct for the six months ended 30 June 2025[44](index=44&type=chunk) [Review by Audit Committee](index=14&type=section&id=Review%20by%20Audit%20Committee) The Audit Committee, comprising three independent non-executive directors, reviewed the Group's unaudited condensed consolidated interim financial statements and this announcement for the six months ended June 30, 2025, and had no disagreement with the accounting treatments adopted - The Audit Committee comprises all three current independent non-executive Directors, Mr. Zou Yaoming, Mr. Cui Shiwei, and Mr. Lin Juncai, with Mr. Zou Yaoming serving as the Chairman of the Audit Committee[45](index=45&type=chunk) - The Audit Committee has reviewed the Group's unaudited condensed consolidated interim financial statements and this announcement for the six months ended 30 June 2025, including accounting, internal control, and financial reporting matters[45](index=45&type=chunk) - The Audit Committee had no disagreement with the accounting treatments adopted by the Group for its unaudited condensed consolidated interim results for the six months ended 30 June 2025[45](index=45&type=chunk) [Other Information](index=15&type=section&id=Other%20Information) This section covers the publication details of the results announcement and interim report, along with the current composition of the Board of Directors [Publication of Results Announcement and Interim Report](index=15&type=section&id=Publication%20of%20Results%20Announcement%20and%20Interim%20Report) This results announcement has been published on the Company's and Stock Exchange's websites, and the interim report will be dispatched to shareholders and published online for review in due course - This results announcement is published on the Company's website (www.fortune-sun.com) and the Stock Exchange's website (www.hkexnews.hk)[46](index=46&type=chunk) - The 2025 interim report will be dispatched to the Company's shareholders and published on the Company's and the Stock Exchange's websites for review in due course[46](index=46&type=chunk) [Board Composition](index=15&type=section&id=Board%20Composition) As of the announcement date, the Board comprises Mr. Jiang Chenfeng, Ms. Zhang Xiuhua, Mr. Han Lin (Executive Directors), Ms. Lin Qianru (Non-executive Director), and Mr. Cui Shiwei, Mr. Lin Juncai, Mr. Zou Yaoming (Independent Non-executive Directors) - The executive Directors are Mr. Jiang Chenfeng, Ms. Zhang Xiuhua, and Mr. Han Lin; the non-executive Director is Ms. Lin Qianru; and the independent non-executive Directors are Mr. Cui Shiwei, Mr. Lin Juncai, and Mr. Zou Yaoming[48](index=48&type=chunk)

[Financial Summary](index=1&type=section&id=Financial%20Summary) [Key Financial Data](index=1&type=section&id=Key%20Financial%20Data) For the six months ended June 30, 2025, the Company's revenue significantly increased by 37.4% to HK$82,314 thousand, with loss for the period narrowing to HK$11,653 thousand and loss attributable to owners of the Company also decreasing to HK$10,743 thousand, showing a substantial improvement in adjusted net loss margin | Metric | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 82,314 | 59,915 | +37.4% | | Loss for the period | (11,653) | (18,817) | -38.1% | | Loss attributable to owners of the Company | (10,743) | (16,961) | -36.6% | | Adjusted net loss attributable to owners of the Company (1) | (8,620) | (13,618) | -36.7% | | Adjusted net loss margin (%) (2) | (10.5) | (22.7) | -12.2pp | [Key Financial Ratios](index=2&type=section&id=Key%20Financial%20Ratios) As of June 30, 2025, the Company's gross profit margin, return on equity, and return on total assets improved, while current ratio and quick ratio decreased, and gearing ratio increased, indicating increased liquidity pressure and higher leverage | Metric | June 30, 2025 (%) | June 30, 2024 (%) | Change (pp) | | :--- | :--- | :--- | :--- | | Segment gross profit margin (1) | 55.5 | 54.8 | +0.7 | | Return on equity (2) | (6.4) | (8.3) | +1.9 | | Return on total assets (3) | (4.0) | (6.0) | +2.0 | | Current ratio (times) (4) | 1.9 | 2.7 | -0.8 | | Quick ratio (times) (5) | 1.8 | 2.5 | -0.7 | | Gearing ratio (%) (6) | 28.8 | 18.5 | +10.3 | - The Group is in a net cash position, thus net debt to equity ratio is not applicable[3](index=3&type=chunk) [Interim Condensed Consolidated Financial Statements](index=3&type=section&id=Interim%20Condensed%20Consolidated%20Financial%20Statements) [Interim Condensed Consolidated Statement of Comprehensive Income](index=3&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) For the six months ended June 30, 2025, the Company's revenue increased to HK$82,314 thousand, operating loss significantly narrowed to HK$11,054 thousand, loss for the period was HK$11,653 thousand, and basic loss per share was HK$1.15 cents, showing an improvement compared to the same period last year | Metric | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Revenue | 82,314 | 59,915 | | Other income | 4,551 | 3,645 | | Net other losses | (201) | (2,408) | | Cost of inventories sold | (18,274) | (15,198) | | Employee benefit expenses | (39,230) | (31,726) | | Promotion costs | (12,127) | (7,702) | | Operating loss | (11,054) | (20,959) | | Net finance income | 168 | 1,071 | | Loss for the period | (11,653) | (18,817) | | Loss attributable to owners of the Company | (10,743) | (16,961) | | Basic loss per share (HK cents) | (1.15) | (1.79) | [Interim Condensed Consolidated Statement of Financial Position](index=5&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the Company's total assets slightly decreased to HK$288,208 thousand, total equity decreased to HK$182,977 thousand, while total liabilities increased, mainly due to growth in bank and other borrowings | Metric | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Total assets | 288,208 | 293,050 | | Non-current assets | 101,357 | 117,518 | | Current assets | 186,851 | 175,532 | | Total equity | 182,977 | 192,915 | | Total liabilities | 105,231 | 100,135 | | Non-current liabilities | 8,553 | 10,370 | | Current liabilities | 96,678 | 89,765 | [Notes to Interim Financial Information](index=7&type=section&id=Notes%20to%20Interim%20Financial%20Information) [1 General Information](index=7&type=section&id=1%20General%20Information) Semk Holdings International Limited is incorporated in the Cayman Islands, primarily engaged in licensing services, design consulting, and trading of licensed brand products in Hong Kong and mainland China, with financial information presented in HK dollars - The Company's principal businesses are providing licensing services, design consulting services, and trading of licensed brand products, primarily in Hong Kong and mainland China[8](index=8&type=chunk) [2 Basis of Preparation](index=7&type=section&id=2%20Basis%20of%20Preparation) The interim condensed consolidated financial information is prepared in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting" issued by the HKICPA and should be read in conjunction with the annual consolidated financial statements - The interim financial information is prepared in accordance with HKAS 34 and should be read in conjunction with the annual report[9](index=9&type=chunk) [3 Accounting Policies](index=7&type=section&id=3%20Accounting%20Policies) The Group's accounting policies applied are consistent with the previous financial year, with differences only in income tax estimates and the adoption of new/revised standards, which have no material impact on current or prior period financial information, nor are expected to have a significant future impact - The revised standards adopted in the current period, such as HKAS 21 and HKFRS 1 (Amendments) Lack of Exchangeability, have no impact on the interim condensed consolidated financial information[10](index=10&type=chunk)[11](index=11&type=chunk) - New and revised standards issued but not yet effective, such as HKFRS 9 and 7 (Amendments) on classification and measurement of financial instruments, and HKFRS 18 Presentation and Disclosure in Financial Statements, are not expected to have a significant impact on the Group[12](index=12&type=chunk)[13](index=13&type=chunk) [4 Critical Accounting Estimates and Judgements](index=8&type=section&id=4%20Critical%20Accounting%20Estimates%20and%20Judgements) The critical accounting estimates and judgements made by management in preparing the financial information are consistent with those described in the annual consolidated financial statements for the year ended December 31, 2024, and actual results may differ - Critical accounting estimates and judgements are consistent with the 2024 annual consolidated financial statements, and actual results may differ[14](index=14&type=chunk) [5 Financial Risk Management](index=9&type=section&id=5%20Financial%20Risk%20Management) The Group is exposed to market risk, credit risk, and liquidity risk, which are managed through prudent risk management policies; credit risk primarily arises from receivables, liquidity risk is managed by maintaining liquid assets and bank facilities, and capital risk is controlled by monitoring the gearing ratio - The Group's risk management policies have not changed since December 31, 2024[17](index=17&type=chunk) [5.1 Financial Risk Factors](index=9&type=section&id=5.1%20Financial%20Risk%20Factors) [5.1.1 Credit Risk](index=9&type=section&id=5.1.1%20Credit%20Risk) The Group's credit risk primarily arises from trade receivables, contract assets, and other receivables, with the largest customer's receivables accounting for 35% of total assets; management controls risk through credit verification, monitoring overdue debts, and regularly reviewing recoverable amounts, while expected credit losses for trade receivables and contract assets are measured using a simplified approach adjusted for macroeconomic factors - The receivables (other receivables, contract assets, and trade receivables) from the Group's largest customer collectively accounted for **35%** of the Group's total assets (2024: 36%)[19](index=19&type=chunk) - Management considers credit risk manageable and implements credit verification procedures and monitors overdue debts[19](index=19&type=chunk) Trade Receivables and Contract Assets Credit Loss Provision (June 30, 2025) | Category | Gross Carrying Amount (HK$ thousand) | Credit Loss Provision (HK$ thousand) | Expected Loss Rate (%) | | :--- | :--- | :--- | :--- | | **Character Licensing** | | | | | Individually assessed | 52,928 | (17,464) | 33.0 | | Collectively assessed total | 22,377 | (2,010) | | | **E-commerce and Other** | | | | | Collectively assessed total | 5,899 | (681) | | Trade Receivables and Contract Assets Credit Loss Provision (December 31, 2024) | Category | Gross Carrying Amount (HK$ thousand) | Credit Loss Provision (HK$ thousand) | Expected Loss Rate (%) | | :--- | :--- | :--- | :--- | | **Character Licensing** | | | | | Individually assessed | 55,335 | (16,192) | 29.3 | | Collectively assessed total | 18,258 | (3,033) | | | **E-commerce and Other** | | | | | Collectively assessed total | 4,914 | (501) | | - As of June 30, 2025, management assessed that other receivables from third parties (HK$68,835 thousand) had a significant increase in credit risk, recognizing a full lifetime expected credit loss of approximately **HK$2,140 thousand**[26](index=26&type=chunk) [5.1.2 Liquidity Risk](index=12&type=section&id=5.1.2%20Liquidity%20Risk) The Group manages liquidity risk by monitoring its liquidity structure and maintaining prudent levels of liquid assets and bank facilities; as of June 30, 2025, total financial liabilities amounted to HK$86,636 thousand, with most maturing within one year Financial Liabilities Remaining Contractual Maturity Analysis (June 30, 2025) | Category | On demand or within one year (HK$ thousand) | One to two years (HK$ thousand) | Two to five years (HK$ thousand) | Total (HK$ thousand) | | :--- | :--- | :--- | :--- | :--- | | Trade payables | 5,213 | – | – | 5,213 | | Other payables | 14,377 | – | – | 14,377 | | Lease liabilities | 6,628 | 3,737 | 3,942 | 14,307 | | Bank and other borrowings | 51,948 | 791 | – | 52,739 | | **Total** | **78,166** | **4,528** | **3,942** | **86,636** | Bank Borrowings Maturity Analysis (June 30, 2025) | Category | Within one year (HK$ thousand) | One to two years (HK$ thousand) | Two to five years (HK$ thousand) | Over five years (HK$ thousand) | Total (HK$ thousand) | | :--- | :--- | :--- | :--- | :--- | :--- | | Bank borrowings | 22,923 | 10,358 | 23,281 | – | 56,562 | - As of June 30, 2025, the Group had cash and cash equivalents of approximately **HK$54,743 thousand**[31](index=31&type=chunk) [5.2 Capital Risk Management](index=13&type=section&id=5.2%20Capital%20Risk%20Management) The Group aims to safeguard its ability to continue as a going concern, provide returns to shareholders, and maintain an optimal capital structure by monitoring the gearing ratio; as cash and cash equivalents exceed total borrowings, the Group is in a net cash position, and the gearing ratio is not applicable - The Group is in a net cash position, and the gearing ratio is not applicable[33](index=33&type=chunk) [5.3 Fair Value Estimation](index=13&type=section&id=5.3%20Fair%20Value%20Estimation) The carrying amounts of investments in life insurance contracts, financial assets at fair value through profit or loss, accruals, provisions, and other payables are reasonable approximations of their fair values, estimated by discounting future contractual cash flows - Fair values of financial assets and liabilities are estimated by discounting future contractual cash flows[34](index=34&type=chunk) [6 Revenue and Segment Information](index=14&type=section&id=6%20Revenue%20and%20Segment%20Information) The Group's revenue primarily derives from licensing services, design consulting, and sales of licensed brand products, with total revenue increasing by 37.4% year-on-year; business is divided into character licensing and e-commerce and other segments, with mainland China as the main revenue source, and contract assets and liabilities related to customer contracts are recognized [6(a) Revenue](index=14&type=section&id=6%28a%29%20Revenue) Revenue Analysis (For the six months ended June 30) | Revenue Category | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | **Recognized over time** | | | | | Provision of licensing services | 23,611 | 18,945 | +24.6% | | Provision of design consulting services | 10,943 | 7,380 | +48.3% | | Subtotal | 34,554 | 26,325 | +31.3% | | **Recognized at a point in time** | | | | | Sales of licensed brand products | 43,874 | 33,590 | +30.6% | | Live entertainment related ticketing income | 3,886 | – | Not applicable | | Subtotal | 47,760 | 33,590 | +42.2% | | **Total Revenue** | **82,314** | **59,915** | **+37.4%** | [6(b) Segment Information](index=14&type=section&id=6%28b%29%20Segment%20Information) - The Group's businesses are divided into character licensing (providing licensing services, design consulting, live entertainment ticketing) and e-commerce and other (trading of licensed brand products)[36](index=36&type=chunk) Segment Results (For the six months ended June 30) | Metric | Character Licensing (HK$ thousand) | E-commerce and Other (HK$ thousand) | Total (HK$ thousand) | | :--- | :--- | :--- | :--- | | **2025** | | | | | External sales revenue | 38,440 | 43,874 | 82,314 | | Segment results | (8,381) | (1,149) | (9,530) | | **2024** | | | | | External sales revenue | 26,325 | 33,590 | 59,915 | | Segment results | (12,858) | (2,172) | (15,030) | Revenue by Customer Location (For the six months ended June 30) | Region | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Mainland China | 76,347 | 57,161 | | Hong Kong | 1,287 | 956 | | Southeast Asia and Taiwan | 3,981 | 1,622 | | Other | 699 | 176 | | **Total** | **82,314** | **59,915** | [6(c) Contract Assets and Liabilities from Contracts with Customers](index=16&type=section&id=6%28c%29%20Contract%20Assets%20and%20Liabilities%20from%20Contracts%20with%20Customers) - Live entertainment related ticketing income is recognized when customers redeem tokens, with revenue from unused tokens deferred as contract liabilities[38](index=38&type=chunk) Contract Assets and Liabilities from Contracts with Customers | Metric | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Contract assets | 16,389 | 19,713 | | Contract liabilities | 10,119 | 10,116 | Changes in Impairment Provision for Contract Assets (For the six months ended June 30) | Metric | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Beginning of period | (1,233) | (543) | | Reversal/(Provision) | 779 | (719) | | End of period | (481) | (1,256) | Unfulfilled Obligations (As of June 30) | Period | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Within one year | 24,245 | 23,579 | | One to two years | 14,718 | 14,989 | | Two to three years | 2,801 | 8,685 | | Three to four years | 251 | 662 | | After four years | – | 29 | | **Total** | **42,015** | **47,944** | [7 Other Income and Net Other Losses](index=17&type=section&id=7%20Other%20Income%20and%20Net%20Other%20Losses) For the six months ended June 30, 2025, other income increased by 27.8% to HK$4,551 thousand, primarily driven by increased other tax refunds and e-commerce solution services income, while net other losses significantly narrowed due to reduced net foreign exchange losses Other Income and Net Other Losses (For the six months ended June 30) | Metric | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | **Other Income** | | | | Sample sales | 536 | 554 | | Management fee income | 901 | 1,111 | | Government grants | 194 | 181 | | Compensation received | 614 | 1,361 | | Other tax refunds | 1,232 | – | | E-commerce solution services | 748 | – | | **Total Other Income** | **4,551** | **3,645** | | **Net Other Losses** | | | | Net foreign exchange losses | (201) | (2,494) | | Net gain on disposal of property, plant and equipment | – | 86 | | **Total Net Other Losses** | **(201)** | **(2,408)** | - Other income increased primarily due to other tax refunds of approximately **HK$1.2 million** received in the first six months of 2025[42](index=42&type=chunk)[95](index=95&type=chunk) - Net other losses significantly decreased, mainly due to a reduction in net foreign exchange losses from HK$2,494 thousand to **HK$201 thousand**[42](index=42&type=chunk) [8 Employee Benefit Expenses](index=17&type=section&id=8%20Employee%20Benefit%20Expenses) For the six months ended June 30, 2025, employee benefit expenses increased to HK$39,230 thousand, primarily due to higher salaries, allowances, and benefits, partially offset by a decrease in share award scheme expenses Employee Benefit Expenses (For the six months ended June 30) | Category | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Salaries, allowances and benefits | 32,495 | 24,364 | | Retirement benefit costs | 4,612 | 3,575 | | Share-based payments | 2,123 | 3,787 | | **Total** | **39,230** | **31,726** | - The increase in employee benefit expenses was mainly due to an increase in personnel for the character licensing business and e-commerce and other businesses, partially offset by a decrease in share-based payments[93](index=93&type=chunk) [9 Other Expenses](index=18&type=section&id=9%20Other%20Expenses) For the six months ended June 30, 2025, other expenses decreased to HK$16,010 thousand, primarily due to a significant reduction in legal and professional fees, partially offset by increased office expenses and commission expenses Other Expenses (For the six months ended June 30) | Category | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Travel and transportation | 2,288 | 2,930 | | Office expenses | 2,732 | 2,592 | | Legal and professional fees | 4,243 | 7,322 | | Agency fees | 354 | 89 | | Commission expenses | 1,422 | – | | Auditor's remuneration | 998 | 1,114 | | Other | 2,867 | 2,180 | | **Total** | **16,010** | **17,652** | - Other expenses decreased mainly due to a reduction in legal, audit, and professional fees, partially offset by an increase in office expenses and other expenses[103](index=103&type=chunk) [10 Net Finance Income](index=18&type=section&id=10%20Net%20Finance%20Income) For the six months ended June 30, 2025, net finance income significantly decreased to HK$168 thousand, primarily due to lower interest income from bank deposits, as well as the impact of interest expenses and bank charges Net Finance Income (For the six months ended June 30) | Category | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | **Finance Income** | | | | Interest income from bank deposits | 513 | 1,629 | | Other interest income | 844 | 860 | | **Total Finance Income** | **1,357** | **2,489** | | **Finance Costs** | | | | Finance costs on lease liabilities | (335) | (497) | | Bank charges | (123) | (29) | | Interest expenses | (731) | (892) | | **Total Finance Costs** | **(1,189)** | **(1,418)** | | **Net Finance Income** | **168** | **1,071** | - The decrease in net finance income was mainly due to lower average deposit balances and lower interest rates, resulting in reduced interest income from bank deposits[104](index=104&type=chunk) [11 Income Tax](index=19&type=section&id=11%20Income%20Tax) For the six months ended June 30, 2025, the income tax position shifted from a credit in the prior period to an expense of HK$767 thousand, primarily due to increased enterprise income tax in mainland China; Hong Kong profits tax is calculated under a two-tiered system, while mainland China entities are subject to a statutory income tax rate of 25% Income Tax (Expense)/Credit (For the six months ended June 30) | Category | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Current income tax | 692 | 762 | | Deferred income tax | 75 | (1,833) | | **Total** | **767** | **(1,071)** | - The income tax position shifted from an income tax credit of approximately **HK$1.1 million** in the first six months of 2024 to an income tax expense of approximately **HK$0.8 million** in the first six months of 2025, primarily due to an increase in mainland China enterprise income tax[105](index=105&type=chunk) - Hong Kong profits tax is calculated at **8.25%** (for the first HK$2,000,000) and **16.5%** (for the remainder), while mainland China entities are subject to a statutory income tax rate of **25%**[48](index=48&type=chunk)[49](index=49&type=chunk) [12 Dividends](index=19&type=section&id=12%20Dividends) The Company settled the 2023 final dividend of HK$0.5 cents per ordinary share on June 21, 2024, but the Board has resolved not to declare any interim dividend for the six months ended June 30, 2025 - The 2023 final dividend of **HK$0.5 cents** per share was settled on June 21, 2024, totaling **HK$4,904,965**[51](index=51&type=chunk) - The Board has resolved not to declare any interim dividend for the six months ended June 30, 2025[52](index=52&type=chunk) [13 Loss Per Share](index=20&type=section&id=13%20Loss%20Per%20Share) For the six months ended June 30, 2025, basic loss per share was HK$1.15 cents, an improvement from HK$1.79 cents in the prior period; diluted loss per share is the same as basic loss per share due to the anti-dilutive effect of potential ordinary shares Loss Per Share (For the six months ended June 30) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Loss attributable to owners of the Company (HK$ thousand) | (10,743) | (16,961) | | Weighted average number of ordinary shares in issue | 937,787,514 | 947,743,355 | | Basic loss per share (HK cents) | (1.15) | (1.79) | - Diluted loss per share is the same as basic loss per share because potential ordinary shares have an anti-dilutive effect[55](index=55&type=chunk) [14 Inventories](index=20&type=section&id=14%20Inventories) As of June 30, 2025, net inventories increased to HK$16,833 thousand, primarily due to increased e-commerce business revenue; cost of inventories sold for the period was HK$18,274 thousand, and an impairment reversal of HK$2,046 thousand was recognized Inventories (As of June 30) | Category | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Finished goods – gross | 21,167 | 20,189 | | Less: Inventory provision | (4,334) | (6,310) | | **Finished goods – net** | **16,833** | **13,879** | - Cost of inventories sold was **HK$18,274 thousand** (2024: HK$15,198 thousand), and an impairment reversal of **HK$2,046 thousand** (2024: HK$1,674 thousand) was recognized[56](index=56&type=chunk) [15 Trade Receivables](index=21&type=section&id=15%20Trade%20Receivables) As of June 30, 2025, net trade receivables increased to HK$44,660 thousand, primarily due to increased revenue; credit terms are typically 0 to 30 days, but overdue amounts over 180 days still represent a significant proportion, and loss provision for trade receivables increased during the period Trade Receivables (As of June 30) | Metric | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Gross trade receivables | 64,334 | 57,561 | | Less: Loss provision | (19,674) | (18,493) | | **Net** | **44,660** | **39,068** | Ageing Analysis of Trade Receivables (As of June 30) | Ageing | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Current to 30 days | 45,108 | 38,840 | | Over 180 days | 15,762 | 17,148 | Changes in Credit Loss Provision for Trade Receivables (For the six months ended June 30) | Metric | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Beginning of period | (18,493) | (19,803) | | Write-off | 952 | 1,195 | | Impairment loss (provision)/reversal | (1,886) | 1,821 | | End of period | (19,674) | (16,668) | [16 Deposits, Prepayments and Other Receivables](index=22&type=section&id=16%20Deposits%2C%20Prepayments%20and%20Other%20Receivables) As of June 30, 2025, the current portion of net deposits, prepayments, and other receivables increased to HK$54,226 thousand, mainly due to increased consideration receivable for trademark transfers, while the non-current portion decreased, and impairment provision slightly decreased during the period Deposits, Prepayments and Other Receivables (As of June 30) | Category | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | **Current Portion** | | | | Consideration receivable for trademark transfers | 30,817 | 13,833 | | Other prepayments | 7,795 | 10,315 | | **Current Net** | **54,226** | **39,887** | | **Non-current Portion** | | | | Consideration receivable for trademark transfers | 38,018 | 56,157 | | **Non-current Net** | **46,619** | **64,232** | Changes in Credit Loss Provision for Deposits and Other Receivables (As of June 30) | Metric | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Beginning of period | (2,176) | (3,863) | | Reversal of impairment loss | 36 | 932 | | End of period | (2,140) | (2,931) | - The Group has purchased life insurance for a director, with a cash surrender value available at any time[58](index=58&type=chunk) [17 Financial Assets at Fair Value Through Profit or Loss](index=23&type=section&id=17%20Financial%20Assets%20at%20Fair%20Value%20Through%20Profit%20or%20Loss) As of June 30, 2025, the balance of financial assets at fair value through profit or loss increased to HK$9,139 thousand, primarily comprising unlisted equity investments; there were no fair value losses during the period, but currency translation differences were recorded Financial Assets at Fair Value Through Profit or Loss (As of June 30) | Metric | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Balance at January 1 | 9,000 | 9,735 | | Fair value loss | – | (889) | | Currency translation differences | 139 | (64) | | **Balance at June 30** | **9,139** | **8,782** | - Financial assets include equity investments in two unlisted Chinese entities, classified as financial assets at fair value through profit or loss due to preferential rights or lack of control/significant influence[59](index=59&type=chunk)[60](index=60&type=chunk) [18 Trade Payables](index=24&type=section&id=18%20Trade%20Payables) As of June 30, 2025, trade payables significantly increased to HK$5,213 thousand, mainly due to an increase in amounts payable to related parties; supplier credit terms are typically around 60 days Trade Payables (As of June 30) | Category | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Related parties | 1,986 | – | | Third parties | 3,227 | 2,307 | | **Total** | **5,213** | **2,307** | Ageing Analysis of Trade Payables (As of June 30) | Ageing | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Within 30 days | 3,427 | 1,545 | | Over 90 days | 517 | 368 | [19 Accruals and Other Payables](index=24&type=section&id=19%20Accruals%20and%20Other%20Payables) As of June 30, 2025, total accruals and other payables slightly increased to HK$22,585 thousand, primarily due to increases in accrued salaries and other benefits, as well as other payables Accruals and Other Payables (As of June 30) | Category | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Accrued expenses | 4,191 | 4,974 | | Accrued salaries and other benefits | 4,990 | 4,365 | | Other payables | 10,186 | 8,949 | | VAT and other taxes payable | 3,218 | 4,056 | | **Total** | **22,585** | **22,344** | [20 Bank and Other Borrowings](index=25&type=section&id=20%20Bank%20and%20Other%20Borrowings) As of June 30, 2025, total bank and other borrowings increased to HK$52,731 thousand, with most being current bank borrowings; the Group has utilized part of its bank facilities, pledged with corporate guarantees Bank and Other Borrowings (As of June 30) | Category | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Non-current | 783 | – | | Current | 51,948 | 45,923 | | **Total** | **52,731** | **45,923** | Repayable Amounts of Borrowings (As of June 30) | Period | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Within one year | 21,139 | 12,119 | | One to two years | 9,397 | 7,671 | | Two to five years | 22,195 | 24,689 | | Over five years | – | 1,444 | | **Total** | **52,731** | **45,923** | - As of June 30, 2025, the weighted average effective annual interest rate for bank borrowings was **3.28%**[63](index=63&type=chunk) - The Group has utilized bank facilities of **HK$48,567 thousand**, with unutilized facilities of **HK$21,821 thousand**, pledged with corporate guarantees[64](index=64&type=chunk) [21 Share Capital](index=26&type=section&id=21%20Share%20Capital) As of June 30, 2025, the Company's issued and fully paid share capital was HK$191 thousand, with share premium of HK$240,511 thousand, unchanged since January 1, 2024 Share Capital (As of June 30) | Metric | Number of Ordinary Shares | Share Capital Par Value (HK$ thousand) | Share Premium (HK$ thousand) | | :--- | :--- | :--- | :--- | | As at January 1, 2024 | 980,993,000 | 191 | 245,253 | | Dividends declared from share premium account | – | – | (4,742) | | As at June 30, 2025 | 980,993,000 | 191 | 240,511 | [22 Share Award Scheme](index=26&type=section&id=22%20Share%20Award%20Scheme) The Company operates a share award scheme managed by a trustee to reward eligible participants; for the six months ended June 30, 2025, the Group recognized share award expenses of approximately HK$2,213 thousand, and 8,560,000 vested shares were transferred to employees - The share award scheme limit is **10%** of the Company's issued share capital, aiming to reward employees and other service providers[66](index=66&type=chunk) - As of June 30, 2025, **32,384,000 shares** were held under the share award scheme (December 31, 2024: 40,944,000 shares)[68](index=68&type=chunk) - For the six months ended June 30, 2025, the Group recognized share award expenses of approximately **HK$2,213 thousand** (2024: HK$3,787 thousand)[70](index=70&type=chunk) - As of June 30, 2025, **8,560,000 vested shares** were transferred from the share award scheme to employees[70](index=70&type=chunk) [23 Related Party Transactions](index=27&type=section&id=23%20Related%20Party%20Transactions) The Group engages in transactions with various related parties, including purchases of goods, management fee income, e-commerce solution services, and lease expenses; as of June 30, 2025, both receivables from and payables to related parties have changed - Key related parties include the ultimate holding company, Semk Products (Group) Limited, and companies controlled by Mr. Hui Hiu Lam[71](index=71&type=chunk) Related Party Transactions (For the six months ended June 30) | Transaction Category | Related Party | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | :--- | | Purchases of goods | Semk Toys | (16,790) | (11,956) | | Management fee income | Semk Toys | 901 | 1,111 | | E-commerce solution services | Semk Toys | 748 | – | | Lease expenses | Ego Brand International Limited | (120) | (120) | | Advertising expenses | Dream Factory | (17) | (187) | Balances with Related Parties (As of June 30) | Balance Category | Related Party | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | :--- | | Prepayments and other receivables from related parties | Semk Toys | 965 | 3,742 | | Trade receivables | Dream Factory | 166 | 156 | | Trade payables | Semk Toys | (1,986) | – | | Other payables | Semk Toys | (783) | (4,592) | Key Management Personnel Remuneration (For the six months ended June 30) | Category | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Salaries and allowances | 3,340 | 3,371 | | Social security costs | 46 | 44 | | Retirement benefit costs | 54 | 59 | | **Total** | **3,440** | **3,474** | [24 Contingent Liabilities](index=29&type=section&id=24%20Contingent%20Liabilities) The Group faces a trademark infringement lawsuit, with the claimant seeking RMB55,000,000 in damages; despite a first-instance judgment requiring the Group to pay compensation, the Group has appealed, and the claimant's trademark has been declared invalid, with the Board having made a provision of RMB1,000,000 and a counter-indemnity provided by the controlling shareholder - The Group faces a trademark infringement lawsuit, with the claimant seeking **RMB55,000,000** in damages[76](index=76&type=chunk) - The first-instance judgment required the Group to pay **RMB6,000,000** in damages, but the Group has appealed, and the claimant's trademark has been declared invalid[76](index=76&type=chunk)[77](index=77&type=chunk) - The Board has made a provision of **RMB1,000,000** (approximately HK$1,097,000) for the case[77](index=77&type=chunk) - The controlling shareholder has entered into an indemnity deed to indemnify the Group for any losses incurred from the aforementioned case[77](index=77&type=chunk) [25 Events After the Reporting Period](index=29&type=section&id=25%20Events%20After%20the%20Reporting%20Period) No other significant events have occurred after June 30, 2025, except for those disclosed in other sections of this announcement - No other significant events occurred after the reporting period[78](index=78&type=chunk) [Business Review](index=30&type=section&id=Business%20Review) [Business Overview](index=30&type=section&id=Business%20Overview) The Group primarily operates character licensing and e-commerce and other businesses, and has entered into cooperation arrangements with 8 new IPs to develop into a multi-IP company - The Group is primarily engaged in character licensing business (B.Duck family character creation, design, licensing, brand management, and marketing) and e-commerce and other businesses (design, development, sourcing, and retail of B.Duck family character products)[79](index=79&type=chunk) - To develop into a multi-IP company, the Group entered into cooperation arrangements with **8 new IPs** in July 2025[79](index=79&type=chunk) [Character Licensing Business](index=30&type=section&id=Character%20Licensing%20Business) The character licensing business covers five service categories: merchandise licensing, live entertainment licensing, content and media licensing, promotional licensing, and design consulting; the Group began launching self-operated live entertainment projects in 2025, such as B.Duck City Funs and B.Duck City Park - The character licensing business is divided into five service categories: merchandise licensing, live entertainment licensing, content and media licensing, promotional licensing, and design consulting[80](index=80&type=chunk) - The Group began launching self-operated live entertainment projects in 2025, such as B.Duck City Funs and B.Duck City Park, aiming to expand the scale of its self-operated live entertainment initiatives[80](index=80&type=chunk)[83](index=83&type=chunk) [E-commerce and Other Businesses](index=30&type=section&id=E-commerce%20and%20Other%20Businesses) E-commerce and other businesses primarily involve selling B.Duck family character products through third-party platforms, expanding from Tmall to domestic platforms like JD.com, Vipshop, Pinduoduo, Xiaohongshu, and Douyin, and extending to overseas markets such as Thailand, Indonesia, and the United States since 2022 - The e-commerce business has expanded from Tmall to domestic platforms such as JD.com, Vipshop, Pinduoduo, Xiaohongshu, and Douyin[81](index=81&type=chunk) - Since 2022, the Group has launched overseas e-commerce businesses in Thailand, Indonesia, and the United States, currently operating e-commerce stores on Lazada, TikTok, and Amazon[81](index=81&type=chunk) [Financial Review](index=31&type=section&id=Financial%20Review) [Revenue by Business Segment](index=31&type=section&id=Revenue%20by%20Business%20Segment) For the six months ended June 30, 2025, revenue from the character licensing business increased by 46.0% to HK$38.4 million, driven by increased live entertainment licensing and design consulting services, while e-commerce and other businesses revenue grew by 30.6% to HK$43.9 million, attributed to promotional efforts and overseas market expansion Revenue by Business Segment (For the six months ended June 30) | Business Segment | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Character Licensing Business | 38,440 | 26,325 | +46.0% | | E-commerce and Other Businesses | 43,874 | 33,590 | +30.6% | | **Total** | **82,314** | **59,915** | **+37.4%** | - The increase in character licensing business revenue was mainly due to increased licensing fees and additional licensing fees from live entertainment licensing and design consulting services, as well as **HK$3.9 million** in ticketing income from self-operated live entertainment initiatives[83](index=83&type=chunk) - The increase in e-commerce and other businesses revenue was primarily due to increased promotional efforts on e-commerce platforms and expansion to other e-commerce platforms in China and Southeast Asia[84](index=84&type=chunk) - The number of licensees with business relationships with the Group increased from **530** as of December 31, 2024, to **577** as of June 30, 2025[83](index=83&type=chunk)[84](index=84&type=chunk) [Revenue by Intellectual Property](index=31&type=section&id=Revenue%20by%20Intellectual%20Property) B.Duck family characters primarily target brand-conscious consumers aged 15 to 34 in Asia; B.Duck products remain the main revenue source for the Group's character licensing business, accounting for 90.6% of licensing revenue in the first six months of 2025, with a year-on-year growth of 54.9% - B.Duck family characters primarily target brand-conscious, high-purchasing power, tech-savvy, and social media-active consumers aged 15 to 34 in Asia[85](index=85&type=chunk) Revenue from Character Licensing Business by IP Character (For the six months ended June 30) | IP Character | 2025 (HK$ thousand) | 2025 (%) | 2024 (HK$ thousand) | 2024 (%) | | :--- | :--- | :--- | :--- | :--- | | B.Duck | 34,817 | 90.6 | 22,471 | 85.3 | | Buffy | 1,518 | 3.9 | 1,551 | 5.9 | | B.Duck Baby | 1,610 | 4.2 | 1,884 | 7.2 | | Licensed Characters | 495 | 1.3 | 419 | 1.6 | | **Total** | **38,440** | **100** | **26,325** | **100** | - Revenue from B.Duck products accounted for **90.6%** of licensing revenue in the first six months of 2025, growing by **54.9%** year-on-year to **HK$34.8 million**[86](index=86&type=chunk) [Revenue by Geographical Location of Customers](index=32&type=section&id=Revenue%20by%20Geographical%20Location%20of%20Customers) Mainland China remains the Group's largest revenue source, accounting for 92.8% of total revenue in the first six months of 2025; as the Group expands its operations in other Asia-Pacific regions, the revenue share from Hong Kong, Southeast Asia, and Taiwan has increased, with plans to focus on the United States for global expansion Revenue by Geographical Location of Customers (For the six months ended June 30) | Region | 2025 (HK$ thousand) | 2025 (%) | 2024 (HK$ thousand) | 2024 (%) | | :--- | :--- | :--- | :--- | :--- | | Mainland China | 76,347 | 92.8 | 57,161 | 95.4 | | Hong Kong | 1,287 | 1.6 | 956 | 1.6 | | Southeast Asia and Taiwan | 3,981 | 4.8 | 1,622 | 2.7 | | Other | 699 | 0.8 | 176 | 0.3 | | **Total** | **82,314** | **100** | **59,915** | **100** | - Mainland China remains the largest revenue contributing region, accounting for **92.8%** of total revenue (2024: 95.4%)[88](index=88&type=chunk) - The revenue share from Hong Kong, Southeast Asia, and Taiwan increased from **4.3% to 6.4%**, with the Group aiming to expand its global business beyond Asia, focusing on the United States in the short term[88](index=88&type=chunk) [Revenue from Character Licensing Business](index=33&type=section&id=Revenue%20from%20Character%20Licensing%20Business) For the six months ended June 30, 2025, revenue from the character licensing business increased to HK$38.4 million; merchandise licensing remains the largest component, but live entertainment licensing and related ticketing income grew significantly, and design consulting service fees also saw a substantial increase Revenue from Character Licensing Business by Service Type (For the six months ended June 30) | Service Type | 2025 (HK$ thousand) | 2025 (%) | 2024 (HK$ thousand) | 2024 (%) | | :--- | :--- | :--- | :--- | :--- | | **Merchandise Licensing** | | | | | | Total licensing fee income | 17,501 | 45.5 | 17,335 | 65.9 | | **Live Entertainment Licensing** | | | | | | Total licensing fee income | 6,001 | 15.6 | 1,499 | 5.7 | | Live entertainment related ticketing income | 3,886 | 10.1 | – | – | | **Content and Media Licensing** | | | | | | Total licensing fee income | 81 | 0.2 | 105 | 0.4 | | **Promotional Licensing** | | | | | | Total licensing fee income | 28 | 0.1 | 6 | 0.0 | | **Design Consulting Service Fees** | 10,943 | 28.5 | 7,380 | 28.0 | | **Total** | **38,440** | **100** | **26,325** | **100** | - Total licensing fee income from live entertainment licensing significantly increased from **HK$1,499 thousand to HK$6,001 thousand**, with an additional **HK$3,886 thousand** in live entertainment related ticketing income[89](index=89&type=chunk) - Design consulting service fees increased from **HK$7,380 thousand to HK$10,943 thousand**, with a slight increase in proportion[89](index=89&type=chunk) [Cost of Inventories Sold](index=34&type=section&id=Cost%20of%20Inventories%20Sold) For the six months ended June 30, 2025, cost of inventories sold increased to HK$18.3 million, primarily from e-commerce and other businesses; the gross profit margin for this business remained stable at 55.5%, indicating good cost control - Cost of inventories sold was approximately **HK$18.3 million** (2024: HK$15.2 million), primarily from e-commerce and other businesses[90](index=90&type=chunk) - The gross profit margin for e-commerce and other businesses was **55.5%** (2024: 54.8%), remaining stable[90](index=90&type=chunk) [Employee Benefit Expenses](index=34&type=section&id=Employee%20Benefit%20Expenses) For the six months ended June 30, 2025, employee benefit expenses increased to HK$39.2 million, mainly due to increased personnel in character licensing and e-commerce and other businesses; the employee benefit expenses to revenue ratio for character licensing business decreased, indicating improved efficiency, but the ratio for China pop toy e-commerce sales significantly increased - Employee benefit expenses were approximately **HK$39.2 million** (2024: HK$31.7 million), accounting for **40.6%** of total operating expenses (2024: 38.1%)[91](index=91&type=chunk) Employee Benefit Expenses by Business Segment (For the six months ended June 30) | Business Segment | 2025 Revenue (HK$ thousand) | 2025 Employee Benefit Expenses (HK$ thousand) | 2024 Revenue (HK$ thousand) | 2024 Employee Benefit Expenses (HK$ thousand) | | :--- | :--- | :--- | :--- | :--- | | Character Licensing Business | 38,440 | 25,310 | 26,325 | 21,157 | | China E-commerce Sales (Apparel, Gifts & Accessories) | 35,681 | 5,205 | 28,701 | 3,411 | | Overseas Market E-commerce Sales | 3,667 | 1,448 | 1,155 | 544 | | China E-commerce Sales (Pop Toys) | 1,675 | 1,086 | 1,541 | 383 | | Share Award Scheme Expenses | – | 2,123 | – | 3,787 | - The employee benefit expenses to revenue ratio for the character licensing business decreased from **80.4% to 65.8%**, indicating economies of scale and good cost control[93](index=93&type=chunk) - The employee benefit expenses to revenue ratio for China pop toy e-commerce sales significantly increased from **24.9% to 64.8%**, due to higher initial staffing for business development[93](index=93&type=chunk) [Impairment Loss (Provision)/Reversal of Contract Assets and Financial Assets Measured at Amortised Cost](index=35&type=section&id=Impairment%20Loss%20%28Provision%29%2FReversal%20of%20Contract%20Assets%20and%20Financial%20Assets%20Measured%20at%20Amortised%20Cost) For the six months ended June 30, 2025, the Group recorded an impairment loss provision of approximately HK$1.1 million for contract assets and financial assets, compared to a net reversal of HK$2.0 million in the prior period, primarily due to increased trade receivables - The Group recorded an impairment loss provision of approximately **HK$1.1 million** (2024: net reversal of HK$2.0 million), mainly due to an increase in trade receivables[94](index=94&type=chunk) - The Group will continue to closely monitor the recoverability of trade receivables and implement strict policies to ensure timely collection[94](index=94&type=chunk) [Other Income](index=35&type=section&id=Other%20Income) For the six months ended June 30, 2025, other income increased by 27.8% to HK$4.6 million, primarily due to receiving approximately HK$1.2 million in other tax refunds - Other income increased by **27.8% to HK$4.6 million** (2024: HK$3.6 million), mainly due to receiving approximately **HK$1.2 million** in other tax refunds[95](index=95&type=chunk) [Promotion Costs](index=36&type=section&id=Promotion%20Costs) For the six months ended June 30, 2025, promotion costs increased to HK$12.1 million; the promotion costs to revenue ratio for both character licensing business and China/overseas e-commerce sales increased, mainly due to investments in live entertainment event promotion, initial promotion for new platforms, and early-stage development in overseas markets - Promotion costs were approximately **HK$12.1 million** (2024: HK$7.7 million)[96](index=96&type=chunk) Promotion Costs by Business Segment (For the six months ended June 30) | Business Segment | 2025 Revenue (HK$ thousand) | 2025 Promotion Costs (HK$ thousand) | 2024 Revenue (HK$ thousand) | 2024 Promotion Costs (HK$ thousand) | | :--- | :--- | :--- | :--- | :--- | | Character Licensing Business | 38,440 | 2,853 | 26,325 | 1,741 | | China E-commerce Sales (Apparel, Gifts & Accessories) | 35,681 | 6,139 | 28,701 | 4,583 | | Overseas Market E-commerce Sales | 3,667 | 1,082 | 1,155 | 267 | | China E-commerce Sales (Pop Toys) | 1,675 | 536 | 1,541 | 277 | - The promotion costs to revenue ratio for the character licensing business increased to **7.4%**, mainly due to more promotion of live entertainment activities[98](index=98&type=chunk) - The promotion costs to revenue ratio for overseas market e-commerce sales increased to **29.5%**, as overseas markets are still in early development stages, incurring higher promotion costs[99](index=99&type=chunk) [Online Platform Usage Fees](index=37&type=section&id=Online%20Platform%20Usage%20Fees) For the six months ended June 30, 2025, online platform usage fees increased by 18.4% to HK$3.5 million; given the 30.6% revenue growth in e-commerce and other businesses, the lower increase in online platform usage fees indicates improved operational efficiency - Online platform usage fees were approximately **HK$3.5 million** (2024: HK$2.9 million), an increase of approximately **18.4%**[100](index=100&type=chunk) - E-commerce and other businesses revenue grew by **30.6%**, while online platform usage fees increased by **18.4%**, indicating improved operational efficiency[100](index=100&type=chunk) [Operating Loss](index=37&type=section&id=Operating%20Loss) For the six months ended June 30, 2025, the Group's operating loss significantly decreased by 47.3% to HK$11.1 million, reflecting an overall improvement in operating performance - Operating loss decreased by **47.3%** from approximately **HK$21.0 million** in the first six months of 2024 to approximately **HK$11.1 million** in the first six months of 2025[101](index=101&type=chunk) [Other Expenses](index=37&type=section&id=Other%20Expenses) For the six months ended June 30, 2025, other expenses decreased to HK$16.0 million, primarily due to reduced legal, audit, and professional fees, offset by increased office expenses and other miscellaneous expenses Other Expenses Analysis (For the six months ended June 30) | Category | 2025 (HK$ thousand) | 2025 (%) | 2024 (HK$ thousand) | 2024 (%) | | :--- | :--- | :--- | :--- | :--- | | Travel and transportation | 2,288 | 14.3 | 2,930 | 16.6 | | Office expenses | 2,732 | 17.1 | 2,592 | 14.7 | | Legal, audit and professional fees | 5,241 | 32.7 | 8,436 | 47.8 | | Agency fees | 354 | 2.2 | 89 | 0.5 | | Building management fees and rental expenses | 663 | 4.1 | 1,023 | 5.8 | | Licensing fees | 197 | 1.2 | 38 | 0.2 | | Other | 4,535 | 28.4 | 2,544 | 14.4 | | **Total** | **16,010** | **100** | **17,652** | **100.0** | - Other expenses decreased mainly due to a reduction in legal, audit, and professional fees, partially offset by an increase in office expenses and other expenses[103](index=103&type=chunk) [Net Finance Income](index=38&type=section&id=Net%20Finance%20Income) For the six months ended June 30, 2025, net finance income decreased to HK$0.2 million, primarily due to lower interest income from bank deposits resulting from lower average deposit balances and interest rates - Net finance income decreased from approximately **HK$1.1 million** in the first six months of 2024 to approximately **HK$0.2 million** in the first six months of 2025[104](index=104&type=chunk) - The decrease was mainly due to lower average deposit balances and lower interest rates, resulting in reduced interest income from bank deposits[104](index=104&type=chunk) [Income Tax Expense](index=38&type=section&id=Income%20Tax%20Expense) For the six months ended June 30, 2025, the income tax position shifted from a credit in the prior period to an expense of approximately HK$0.8 million, primarily due to increased enterprise income tax in mainland China - The income tax position shifted from an income tax credit of approximately **HK$1.1 million** in the first six months of 2024 to an income tax expense of approximately **HK$0.8 million** in the first six months of 2025, a change of approximately **HK$1.9 million**[105](index=105&type=chunk) - This was primarily due to an increase in mainland China enterprise income tax in the first six months of 2025 compared to the first six months of 2024[105](index=105&type=chunk) [Non-HKFRS Financial Measures](index=38&type=section&id=Non-HKFRS%20Financial%20Measures) The Group presents non-HKFRS financial measures of adjusted net loss attributable to owners of the Company to better reflect operating performance after deducting share award scheme expenses, with this metric showing a narrowing of loss - Non-HKFRS financial measures of adjusted net loss attributable to owners of the Company represent the loss after deducting share award scheme expenses[106](index=106&type=chunk) Reconciliation of Non-HKFRS Financial Measures (For the six months ended June 30) | Metric | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Loss attributable to owners of the Company | (10,743) | (16,961) | | Add: Share award scheme expenses | 2,123 | 3,343 | | **Adjusted Net Loss** | **(8,620)** | **(13,618)** | [Loss for the Period](index=39&type=section&id=Loss%20for%20the%20Period) For the six months ended June 30, 2025, loss attributable to owners of the Company was approximately HK$10.7 million, a year-on-year decrease of 37.1%, indicating a significant narrowing of loss - Loss attributable to owners of the Company was approximately **HK$10.7 million** (2024: HK$17.0 million), a year-on-year decrease of **37.1%**[108](index=108&type=chunk) [Capital Structure](index=39&type=section&id=Capital%20Structure) Since its listing on the Stock Exchange on January 17, 2022, the Company's capital structure has remained unchanged as of June 30, 2025, with share capital comprising only ordinary shares - Since its listing on January 17, 2022, the Company's capital structure has remained unchanged, with share capital comprising only ordinary shares[109](index=109&type=chunk) - As of June 30, 2025, the issued share capital was **US$24,524.825**, divided into **980,993,000 shares** of US$0.000025 each[109](index=109&type=chunk) [Assets, Financial Resources and Capital Expenditure](index=39&type=section&id=Assets%2C%20Financial%20Resources%20and%20Capital%20Expenditure) The Group's net current assets increased, with both trade receivables and inventories growing, but cash and cash equivalents decreased; right-of-use assets and intangible assets slightly declined due to depreciation and amortization [Net Current Assets](index=39&type=section&id=Net%20Current%20Assets) - Net current assets increased from approximately **HK$85.8 million** as of December 31, 2024, to approximately **HK$90.2 million** as of June 30, 2025, mainly due to increases in trade receivables and deposits, prepayments, and other receivables[110](index=110&type=chunk) [Trade Receivables and Contract Assets](index=39&type=section&id=Trade%20Receivables%20and%20Contract%20Assets) - Net trade receivables and contract assets combined increased from approximately **HK$58.8 million** as of December 31, 2024, to approximately **HK$61.1 million** as of June 30, 2025, mainly due to increased revenue[111](index=111&type=chunk) - Loss provision was approximately **HK$20.2 million** (December 31, 2024: HK$19.7 million)[111](index=111&type=chunk) [Inventories](index=40&type=section&id=Inventories) - Inventories increased from approximately **HK$13.9 million** as of December 31, 2024, to approximately **HK$16.8 million** as of June 30, 2025, mainly due to increased e-commerce business revenue[113](index=113&type=chunk) [Cash and Cash Equivalents and Bank Deposits](index=40&type=section&id=Cash%20and%20Cash%20Equivalents%20and%20Bank%20Deposits) - Cash and cash equivalents and bank deposits decreased from approximately **HK$63.0 million** as of December 31, 2024, to approximately **HK$54.7 million** as of June 30, 2025, mainly due to repayment of lease liabilities and acquisition of property, plant and equipment[114](index=114&type=chunk) [Right-of-Use Assets](index=40&type=section&id=Right-of-Use%20Assets) - Right-of-use assets decreased from approximately **HK$16.3 million** as of December 31, 2024, to approximately **HK$13.0 million** as of June 30, 2025, mainly due to depreciation of assets and lease payments[115](index=115&type=chunk) [Intangible Assets](index=40&type=section&id=Intangible%20Assets) - Intangible assets slightly decreased from approximately **HK$3.3 million** as of December 31, 2024, to approximately **HK$3.0 million** as of June 30, 2025, mainly due to amortization of trademarks[116](index=116&type=chunk) [Bank and Other Borrowings](index=40&type=section&id=Bank%20and%20Other%20Borrowings) Borrowings Analysis (As of June 30) | Category | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Non-current portion | 783 | – | | Current portion | 51,948 | 45,923 | | **Total** | **52,731** | **45,923** | - Bank and other borrowings are denominated in HKD and RMB, with fixed interest rates ranging from **2.5% to 13.1%**, and a weighted average effective annual interest rate of **3.28%**[117](index=117&type=chunk) [Pledged Assets](index=41&type=section&id=Pledged%20Assets) As of June 30, 2025, certain assets of the Group with a total net carrying value of approximately HK$2.6 million were pledged as collateral for bank and other borrowings - As of June 30, 2025, certain assets of the Group with a total net carrying value of approximately **HK$2.6 million** were pledged as collateral for bank and other borrowings[118](index=118&type=chunk) [Gearing Ratio](index=41&type=section&id=Gearing%20Ratio) As of June 30, 2025, the Group's gearing ratio was 28.8%, an increase from 18.5% in the prior period - The gearing ratio increased from **18.5%** as of June 30, 2024, to **28.8%** as of June 30, 2025[119](index=119&type=chunk) [Contingent Liabilities](index=41&type=section&id=Contingent%20Liabilities) The Group faces a trademark infringement lawsuit, and despite the claimant's trademark being declared invalid and legal counsel believing the judgment is likely to be overturned, the Board has made a provision of RMB1,000,000, with the controlling shareholder providing an indemnity guarantee - The Group faces a trademark infringement lawsuit, with the claimant seeking **RMB55,000,000** in damages[120](index=120&type=chunk) - The claimant's trademark has been declared invalid by the National Intellectual Property Administration, and the Group's legal counsel believes the judgment is highly likely to be overturned[121](index=121&type=chunk) - The Board has made a provision of **RMB1,000,000** (approximately HK$1,097,000)[121](index=121&type=chunk) - The controlling shareholder has entered into an indemnity deed to indemnify the Group for any losses incurred from the aforementioned case[121](index=121&type=chunk) [Foreign Exchange Risk Management](index=41&type=section&id=Foreign%20Exchange%20Risk%20Management) The Group primarily operates in Hong Kong and mainland China, exposed to foreign exchange risk from USD and RMB; the Group does not use derivative financial instruments but manages foreign exchange risk through regular review and monitoring - The Group is primarily exposed to foreign exchange risk from USD and RMB, but most of its local business revenue and costs are transacted in local functional currencies, resulting in lower foreign exchange transaction risk[123](index=123&type=chunk) - The Group does not hold or issue any derivative financial instruments to manage its foreign exchange risk, but manages it through regular review and monitoring[123](index=123&type=chunk) [Capital Expenditure and Commitments](index=42&type=section&id=Capital%20Expenditure%20and%20Commitments) The Group's capital expenditure includes the acquisition of property, plant and equipment and intangible assets; as of June 30, 2025, the Group had no significant capital commitments - The Group's capital expenditure includes the acquisition of property, plant and equipment and intangible assets[124](index=124&type=chunk) - As of June 30, 2025, the Group had no significant capital commitments[124](index=124&type=chunk) [Human Resources](index=42&type=section&id=Human%20Resources) As of June 30, 2025, the Group had 203 employees, with staff costs of approximately HK$39.2 million; the Group offers competitive remuneration, training, and a share award scheme to attract and retain talent, especially specialized talent in the character licensing industry - As of June 30, 2025, the Group had **203 employees**, with staff costs of approximately **HK$39.2 million**[125](index=125&type=chunk) - The Group offers competitive remuneration, training, share option schemes, and share award schemes to attract and retain elite employees[125](index=125&type=chunk) Employee Analysis by Function and Geographical Location (June 30, 2025) | Function | Hong Kong and Overseas | Mainland China | Total | | :--- | :--- | :--- | :--- | | Management | 6 | 1 | 7 | | Design | 6 | 55 | 61 | | AIGC | – | 4 | 4 | | Licensing | 2 | 28 | 30 | | Sales | 2 | 43 | 45 | | Brand | 2 | 10 | 12 | | Human Resources and Administration | 3 | 19 | 22 | | Finance | 3 | 7 | 10 | | Product Management | – | 12 | 12 | | **Total** | **24** | **179** | **203** | [Future Outlook](index=45&type=section&id=Future%20Outlook) [Market Overview](index=45&type=section&id=Market%20Overview) The Company has adjusted its operating vision to "Make A Playful World," focusing on the global market; China's IP industry continues to grow, with licensed merchandise retail sales reaching RMB155.09 billion in 2024, a 10.7% year-on-year increase, and B.Duck ranking 46th globally with RMB700 million in retail sales, demonstrating its international market position - The Company's operating vision has been adjusted to "Make A Playful World," reflecting a strategic positioning rooted in China and facing the global market[137](index=137&type=chunk) - In 2024, China's annual retail sales of licensed merchandise reached **RMB155.09 billion**, a year-on-year increase of **10.7%**; annual licensing fees were **RMB5.99 billion**, a year-on-year increase of **9.4%**[137](index=137&type=chunk) - B.Duck ranked **46th** in the "2025 Global Licensors Report" with retail sales of **RMB700 million**, highlighting its benchmark position in the international IP licensing industry[138](index=138&type=chunk) [Strategic Focus](index=46&type=section&id=Strategic%20Focus) The Group is committed to becoming an "IP Full Industry Chain China Operations Company," with strategic priorities including expanding IP commercial innovation models, deepening the pop toy segment, reconstructing the IP business ecosystem, and empowering the IP ecosystem with AI, to enhance brand influence, expand consumption scenarios, and improve operational efficiency [Focus on Core Business, Expand IP Commercial Innovation Models](index=46&type=section&id=Focus%20on%20Core%20Business%2C%20Expand%20IP%20Commercial%20Innovation%20Models) - The Group will prioritize "IP + Merchandise" as its core business, and actively explore models such as "IP + Ecological Cultural Tourism" and "IP + Games" to expand consumption scenarios and increase brand coverage[138](index=138&type=chunk) - By fully implementing a "self-research, self-production, self-sales" model, the Group aims to establish a full-chain IP derivative operation system and build an omni-channel retail system of "online full platform + offline experience network"[139](index=139&type=chunk) [Deepen Pop Toy Segment, Strengthen Product Retail](index=46&type=section&id=Deepen%20Pop%20Toy%20Segment%2C%20Strengthen%20Product%20Retail) - Since the first half of 2025, Semk Holdings has launched IPs such as Grabby Goose, Milolo, and Aotu World, enriching its core self-developed product library including blind boxes, plush toys, AI toys, home goods, and cultural and creative merchandise[140](index=140&type=chunk) - In cultural cross-over, the Group adheres to three major themes: "Intangible Cultural Heritage," "National Inheritance," and "Internationalization," collaborating with IPs such as the Palace Museum Cultural, Guizhou ethnic minority culture, and the British Museum[140](index=140&type=chunk) - The Group will deepen cooperation with "Hidden Wooo" in pop toy IP co-creation, supply chain, product planning, retail channels, and private fan community operations[140](index=140&type=chunk) [Reconstruct Core Competitiveness Through IP Business Ecosystem](index=47&type=section&id=Reconstruct%20Core%20Competitiveness%20Through%20IP%20Business%20Ecosystem) - IP licensing is the Group's cornerstone, with over **570 licensees** and more than **50,000 licensed product SKUs**, covering a wide range of product lines[141](index=141&type=chunk) - In product retail, the Group is actively expanding retail categories to include self-developed products such as blind boxes, pop toys, 3C products, plush toys, and AI companion toys[141](index=141&type=chunk) - Significant investment in cultural tourism, focusing on cultural tourism leisure and live entertainment, such as jointly developing and operating the "Guizhou Huangguoshu B.Duck Little Yellow Duck Themed Rafting Project" with the Guizhou Huangguoshu Tourist Area[142](index=142&type=chunk) [AI Empowering IP Ecosystem](index=48&type=section&id=AI%20Empowering%20IP%20Ecosystem) - Deepen the application of large AI models in IP content creation, using AIGC to enhance content production efficiency, assist designers in quickly rendering effect drawings, shorten creation time, and reduce economic costs[143](index=143&type=chunk)[144](index=144&type=chunk) - Collaborate with Nasdaq-listed Alpha Tech to develop AI agents and build an intelligent IP ecosystem, aiming to unlock IP potential, enhance IP commercial value, and jointly develop AI-driven marketing and content solutions[144](index=144&type=chunk) - Utilize AI models to process and analyze social media and sales channel data, obtaining information on market sentiment, consumer engagement, and consumption trends to optimize marketing content and product direction[144](index=144&type=chunk) [Corporate Governance and Other Information](index=43&type=section&id=Corporate%20Governance%20and%20Other%20Information) [Future Plans for Material Investments or Capital Assets](index=43&type=section&id=Future%20Plans%20for%20Material%20Investments%20or%20Capital%20Assets) Except as disclosed in the prospectus and this announcement, as of the date of this announcement, the Group has no other specific plans for material investments or capital expenditures in the coming year - The Group has no other specific plans for material investments or capital expenditures in the coming year[127](index=127&type=chunk) [Material Acquisitions and Disposals](index=43&type=section&id=Material%20Acquisitions%20and%20Disposals) For the six months ended June 30, 2025, the Group did not undert

[Corporate Information](index=2&type=section&id=%E5%85%AC%E5%8F%B8%E8%B3%87%E6%96%99) [Changes in Board of Directors and Supervisory Committee](index=2&type=section&id=%E5%9F%B7%E8%A1%8C%E8%91%A3%E4%BA%8B) During the reporting period, there were changes in the company's Board of Directors and Supervisory Committee - Executive Director **Yu Fan resigned** on April 25, 2025, and **Zhu Lintao was appointed** on June 25, 2025[4](index=4&type=chunk) - Independent Non-executive Director **Siu Chi Hung resigned** on June 25, 2025, and **Li Kwok Tung was appointed** on the same day, also taking over as Chairman of the Audit and Risk Management Committee[4](index=4&type=chunk) - Supervisor **Chan Pui Wan resigned** on June 25, 2025, and **Ma Xujian was appointed** on the same day[4](index=4&type=chunk) [Share Information and Contact Details](index=3&type=section&id=%E8%82%A1%E4%BB%BD%E4%BB%A3%E8%99%9F) The company's A-shares are listed on the Shenzhen Stock Exchange (stock code 002672) and H-shares on the Hong Kong Stock Exchange (stock code 00895) - The company's **A-share stock code is 002672**, and the **H-share stock code is 00895**[5](index=5&type=chunk) - The auditor is **Da Hua Certified Public Accountants (Special General Partnership)**, and the H-share registrar in Hong Kong is **Tricor Investor Services Limited**[5](index=5&type=chunk) [Definitions](index=4&type=section&id=%E9%87%8B%20%E7%BE%A9) [Consolidated Balance Sheet](index=7&type=section&id=%E5%90%88%E4%BD%B5%E8%B3%87%E7%94%A2%E8%B2%A0%E5%82%B5%E8%A1%A8) As of June 30, 2025, the Group's total assets were RMB 11.03 billion, a decrease of 2.24% from the beginning of the period, while total liabilities slightly increased to RMB 7.20 billion Key Data from Consolidated Balance Sheet (As of June 30, 2025 vs December 31, 2024) | Item | Closing Balance (2025-06-30) | Opening Balance (2024-12-31) | Change (%) | | :--- | :--- | :--- | :--- | | **Assets** | | | | | Total current assets | 3,600,500,457.56 | 3,563,956,903.50 | +1.02% | | Total non-current assets | 7,425,026,889.93 | 7,714,522,511.96 | -3.75% | | **Total Assets** | **11,025,527,347.49** | **11,278,479,415.46** | **-2.24%** | | **Liabilities** | | | | | Total current liabilities | 3,750,180,723.18 | 3,877,229,219.04 | -3.28% | | Short-term borrowings | 1,890,353,893.69 | 1,197,012,027.16 | +57.92% | | Non-current liabilities due within one year | 927,936,161.65 | 1,599,167,098.28 | -41.97% | | Total non-current liabilities | 3,450,442,664.04 | 3,250,360,379.76 | +6.16% | | **Total Liabilities** | **7,200,623,387.22** | **7,127,589,598.80** | **+1.02%** | | **Equity** | | | | | Total equity attributable to owners of the parent | 3,324,824,504.66 | 3,599,850,228.42 | -7.64% | | Minority interests | 500,079,455.61 | 551,039,588.24 | -9.25% | | **Total Equity** | **3,824,903,960.27** | **4,150,889,816.66** | **-7.85%** | | **Total Liabilities and Equity** | **11,025,527,347.49** | **11,278,479,415.46** | **-2.24%** | - The company's **debt-to-asset ratio increased** from 63.20% at the end of 2024 to **65.31%** on June 30, 2025[116](index=116&type=chunk) [Parent Company Balance Sheet](index=12&type=section&id=%E6%AF%8D%E5%85%AC%E5%8F%B8%E8%B3%87%E7%94%A2%E8%B2%A0%E5%82%B5%E8%A1%A8) As of June 30, 2025, the parent company's total assets were RMB 7.99 billion, an increase of 2.96% from the beginning of the period, with total liabilities rising to RMB 4.93 billion Key Data from Parent Company Balance Sheet (As of June 30, 2025 vs December 31, 2024) | Item | Closing Balance (2025-06-30) | Opening Balance (2024-12-31) | Change (%) | | :--- | :--- | :--- | :--- | | **Assets** | | | | | Total current assets | 3,814,254,494.36 | 3,599,282,904.03 | +6.00% | | Total non-current assets | 4,173,464,516.59 | 4,159,079,166.05 | +0.35% | | **Total Assets** | **7,987,719,010.95** | **7,758,362,070.08** | **+2.96%** | | **Liabilities** | | | | | Total current liabilities | 2,931,223,760.36 | 2,929,887,812.29 | +0.05% | | Short-term borrowings | 1,220,606,552.78 | 745,366,293.49 | +63.76% | | Notes payable | 194,298,000.00 | 84,652,905.76 | +129.53% | | Non-current liabilities due within one year | 668,531,096.43 | 1,269,043,698.82 | -47.24% | | Total non-current liabilities | 1,993,889,056.54 | 1,724,321,614.76 | +15.63% | | **Total Liabilities** | **4,925,112,816.90** | **4,654,209,427.05** | **+5.82%** | | **Equity** | | | | | **Total Equity** | **3,062,606,194.05** | **3,104,152,643.03** | **-1.34%** | | **Total Liabilities and Equity** | **7,987,719,010.95** | **7,758,362,070.08** | **+2.96%** | [Consolidated Income Statement (Unaudited)](index=17&type=section&id=%E5%90%88%20%E4%BD%B5%20%E5%88%A9%20%E6%BD%A4%20%E8%A1%A8%EF%BC%88%E6%9C%AA%20%E7%B6%93%20%E5%AF%A9%20%E6%A0%B8%EF%BC%89) For the six months ended June 30, 2025, the Group's total operating revenue decreased by 3.40% year-over-year to RMB 1.50 billion, with the net loss attributable to parent company shareholders widening by 8.09% to RMB 278.18 million Key Data from Consolidated Income Statement (For the six months ended June 30, 2025 vs Same period in 2024) | Item | H1 2025 (RMB Yuan) | H1 2024 (RMB Yuan) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Total operating revenue | 1,500,470,309.76 | 1,553,358,452.26 | -3.40% | | Total operating costs | 1,846,670,942.48 | 1,882,149,083.44 | -1.89% | | Operating profit | -329,316,352.67 | -313,793,031.30 | -4.95% | | Total profit | -324,780,391.79 | -315,039,567.24 | -3.10% | | Net profit | -328,240,737.00 | -319,313,114.02 | -2.79% | | Net profit attributable to shareholders of the parent company | -278,177,080.22 | -257,357,295.18 | -8.09% | | Basic earnings per share | -0.25 | -0.23 | -8.70% | [Parent Company Income Statement (Unaudited)](index=23&type=section&id=%E6%AF%8D%20%E5%85%AC%20%E5%8F%B8%20%E5%88%A9%20%E6%BD%A4%20%E8%A1%A8%EF%BC%88%E6%9C%AA%20%E7%B6%93%20%E5%AF%A9%20%E6%A0%B8%EF%BC%89) For the six months ended June 30, 2025, the parent company's operating revenue significantly increased by 259.57% year-over-year to RMB 350.82 million, while the net loss narrowed by 18.69% to RMB 41.55 million Key Data from Parent Company Income Statement (For the six months ended June 30, 2025 vs Same period in 2024) | Item | H1 2025 (RMB Yuan) | H1 2024 (RMB Yuan) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Operating revenue | 350,817,891.13 | 97,567,903.51 | +259.57% | | Operating costs | 343,887,443.53 | 95,598,420.71 | +259.74% | | Operating profit | -42,333,129.75 | -51,075,902.62 | +17.09% | | Total profit | -41,564,100.28 | -51,075,915.58 | +18.62% | | Net profit | -41,546,448.98 | -51,093,275.17 | +18.69% | [Consolidated Statement of Cash Flows (Unaudited)](index=26&type=section&id=%E5%90%88%20%E4%BD%B5%20%E7%8F%BE%20%E9%87%91%20%E6%B5%81%20%E9%87%8F%20%E8%A1%A8%EF%BC%88%E6%9C%AA%20%E7%B6%93%20%E5%AF%A9%20%E6%A0%B8%EF%BC%89) For the six months ended June 30, 2025, the Group's net cash flow from operating activities turned negative to RMB -50.71 million, while net cash flow from financing activities turned positive to RMB 159.54 million Key Data from Consolidated Statement of Cash Flows (For the six months ended June 30, 2025 vs Same period in 2024) | Item | H1 2025 (RMB Yuan) | H1 2024 (RMB Yuan) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Net cash flow from operating activities | -50,708,328.58 | 2,381,171.66 | -2237.92% | | Net cash flow from investing activities | -73,967,557.57 | -147,850,885.18 | +49.97% | | Net cash flow from financing activities | 159,540,961.07 | -195,531,541.11 | +181.60% | | Net increase in cash and cash equivalents | 34,893,597.13 | -341,015,021.71 | +110.23% | | Closing balance of cash and cash equivalents | 1,051,200,772.35 | 896,795,765.01 | +17.22% | [Parent Company Statement of Cash Flows (Unaudited)](index=31&type=section&id=%E6%AF%8D%20%E5%85%AC%20%E5%8F%B8%20%E7%8F%BE%20%E9%87%91%20%E6%B5%81%20%E9%87%8F%20%E8%A1%A8%EF%BC%88%E6%9C%AA%20%E7%B6%93%20%E5%AF%A9%20%E6%A0%B8%EF%BC%89) For the six months ended June 30, 2025, the parent company's net cash flow from operating activities turned positive to RMB 80.20 million, and net cash inflow from investing activities increased significantly Key Data from Parent Company Statement of Cash Flows (For the six months ended June 30, 2025 vs Same period in 2024) | Item | H1 2025 (RMB Yuan) | H1 2024 (RMB Yuan) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Net cash flow from operating activities | 80,198,751.91 | -259,911,142.48 | +130.85% | | Net cash flow from investing activities | 81,159,015.34 | 10,372,557.68 | +682.44% | | Net cash flow from financing activities | -157,509,683.94 | -85,456,387.45 | -84.32% | | Net increase in cash and cash equivalents | 3,848,083.31 | -334,994,972.25 | +101.15% | | Closing balance of cash and cash equivalents | 764,109,267.64 | 713,387,722.13 | +7.11% | [Consolidated Statement of Changes in Equity (Unaudited)](index=33&type=section&id=%E5%90%88%20%E4%BD%B5%20%E6%89%80%20%E6%9C%89%20%E8%80%85%20%E6%AC%8A%20%E7%9B%8A%20%E8%AE%8A%20%E5%8B%95%20%E8%A1%A8%EF%BC%88%E6%9C%AA%20%E7%B6%93%20%E5%AF%A9%20%E6%A0%B8%EF%BC%89) For the six months ended June 30, 2025, the Group's total equity attributable to parent company shareholders decreased by RMB 275.03 million, primarily due to an expanded net loss Key Data from Consolidated Statement of Changes in Equity (For the six months ended June 30, 2025 vs Same period in 2024) | Item | H1 2025 (RMB Yuan) | H1 2024 (RMB Yuan) | | :--- | :--- | :--- | | Change in total equity attributable to owners of the parent | -275,025,723.76 | -355,628,130.07 | | Total comprehensive income | -328,212,214.79 | -319,326,881.10 | | Total comprehensive income attributable to owners of the parent | -278,148,558.01 | -257,371,062.26 | | Total comprehensive income attributable to minority interests | -50,063,656.78 | -61,955,818.84 | [Parent Company Statement of Changes in Equity (Unaudited)](index=36&type=section&id=%E6%AF%8D%20%E5%85%AC%20%E5%8F%B8%20%E6%89%80%20%E6%9C%89%20%E8%80%85%20%E6%AC%8A%20%E7%9B%8A%20%E8%AE%8A%20%E5%8B%95%20%E8%A1%A8%EF%BC%88%E6%9C%AA%20%E7%B6%93%20%E5%AF%A9%20%E6%A0%B8%EF%BC%89) For the six months ended June 30, 2025, the parent company's total equity decreased by RMB 41.55 million, mainly due to the net loss Key Data from Parent Company Statement of Changes in Equity (For the six months ended June 30, 2025 vs Same period in 2024) | Item | H1 2025 (RMB Yuan) | H1 2024 (RMB Yuan) | | :--- | :--- | :--- | | Change in total equity | -41,546,448.98 | -51,093,275.17 | | Total comprehensive income | -41,546,448.98 | -51,093,275.17 | [Notes to the Unaudited Interim Financial Statements](index=38&type=section&id=%E6%9C%AA%E7%B6%93%E5%AF%A9%E6%A0%B8%E7%9A%84%E4%B8%AD%E6%9C%9F%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8%E9%99%84%E8%A8%BB) [1. General Information](index=38&type=section&id=1.%20%E4%B8%80%E8%88%AC%E8%B3%87%E6%96%99) Dongjiang Environmental Company Limited is a joint-stock limited company registered in China, with its H-shares and A-shares listed on the Hong Kong and Shenzhen stock exchanges, respectively - The company's **H-shares and A-shares are listed** on the Hong Kong Stock Exchange and Shenzhen Stock Exchange, respectively[52](index=52&type=chunk) - The Group's main business scope includes **industrial waste recycling, treatment and disposal, wastewater and waste gas treatment, and precious metal recovery**[52](index=52&type=chunk) [2. Basis of Preparation](index=39&type=section&id=2.%20%E7%B7%A8%E8%A3%BD%E5%9F%BA%E7%A4%8E) The financial statements are prepared on a going concern basis in accordance with China's Accounting Standards for Business Enterprises and relevant disclosure requirements - The financial statements are prepared on a **going concern basis**, following the Accounting Standards for Business Enterprises of China and relevant disclosure regulations[53](index=53&type=chunk) - Management has assessed that the company has **sufficient funds** to meet its needs for the next 12 months, with no significant doubts about its ability to continue as a going concern[53](index=53&type=chunk) - This interim result is **unaudited** but has been reviewed by the Audit and Risk Management Committee[54](index=54&type=chunk) [3. Operating Revenue](index=40&type=section&id=3.%20%E7%87%9F%E6%A5%AD%E6%94%B6%E5%85%A5) For the six months ended June 30, 2025, the Group's total operating revenue was RMB 1.50 billion, a year-over-year decrease of 3.40%, mainly due to a significant drop in revenue from precious metal recycling Analysis of Operating Revenue by Industry (For the six months ended June 30, 2025 vs Same period in 2024) | Industry Segment | H1 2025 (RMB Yuan) | H1 2024 (RMB Yuan) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Industrial Waste Recycling | 646,104,217.38 | 564,376,350.26 | +14.48% | | Industrial Waste Treatment and Disposal | 396,990,856.03 | 401,533,859.48 | -1.13% | | Precious Metal Recycling | 287,227,264.88 | 396,750,877.20 | -27.61% | | Municipal Waste Treatment and Disposal | 44,642,362.92 | 61,648,664.38 | -27.59% | | Renewable Energy Utilization | 10,590,979.26 | 15,145,986.04 | -30.08% | | Environmental Engineering and Services | 28,246,587.57 | 50,003,630.90 | -43.51% | | E-waste Dismantling | 67,557,360.90 | 54,742,150.14 | +23.41% | | Other Businesses | 19,110,680.82 | 9,156,933.86 | +108.71% | | **Total** | **1,500,470,309.76** | **1,553,358,452.26** | **-3.40%** | [4. Segment Information](index=41&type=section&id=4.%20%E5%88%86%E9%83%A8%E8%B3%87%E6%96%99) The Group's operations are divided into eight reportable segments, with most segments reporting a loss for the period, led by industrial waste treatment and disposal - The company's business is divided into **8 reportable segments**, including industrial waste recycling, industrial waste treatment and disposal, precious metal recycling, and others[56](index=56&type=chunk) Segment Operating Revenue and Total Profit (For the six months ended June 30, 2025) | Item | Industrial Waste Recycling | Industrial Waste Treatment & Disposal | Precious Metal Recycling | Municipal Waste Treatment & Disposal | E-waste Dismantling | Environmental Engineering & Services | Renewable Energy Utilization | Others | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Operating Revenue (RMB Yuan) | 661,524,909.18 | 418,926,680.14 | 287,227,264.88 | 44,642,362.92 | 67,557,360.90 | 40,908,544.61 | 10,590,979.26 | 26,187,343.82 | | Total Profit (RMB Yuan) | -52,618,411.21 | -194,426,714.65 | -9,576,803.30 | 6,359,051.30 | -9,750,112.09 | 3,576,311.30 | -2,889,308.65 | 1,410,322.78 | [5. Finance Costs](index=42&type=section&id=5.%20%E8%B2%A1%E5%8B%99%E8%B2%BB%E7%94%A8) For the six months ended June 30, 2025, the Group's total finance costs were RMB 93.87 million, remaining stable compared to the same period last year Breakdown of Finance Costs (For the six months ended June 30, 2025 vs Same period in 2024) | Item | H1 2025 (RMB Yuan) | H1 2024 (RMB Yuan) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Interest expense | 94,743,471.81 | 99,028,016.25 | -4.29% | | Less: Interest income | 2,603,195.24 | 4,522,859.03 | -42.45% | | Foreign exchange gains/losses | 1,517,236.25 | -753,018.73 | +301.35% | | Bank charges and others | 217,207.84 | 143,120.45 | +51.76% | | **Total** | **93,874,720.66** | **93,895,258.94** | **-0.02%** | [6. Taxation](index=43&type=section&id=6.%20%E7%A8%85%20%E9%A0%85) For the six months ended June 30, 2025, the Group's income tax expense was RMB 3.46 million, a year-over-year decrease of 19.03%, while the company benefits from various tax preferential policies Income Tax Expense (For the six months ended June 30, 2025 vs Same period in 2024) | Item | H1 2025 (RMB Yuan) | H1 2024 (RMB Yuan) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Current income tax expense | 3,749,946.01 | 4,759,422.68 | -21.21% | | Deferred income tax expense | -289,600.80 | -485,875.90 | +40.39% | | **Total** | **3,460,345.21** | **4,273,546.78** | **-19.03%** | - The company enjoys a **"three-year exemption and three-year half-reduction" income tax preferential policy** for environmental protection and energy-saving projects, involving several subsidiaries[72](index=72&type=chunk) - Multiple subsidiaries of the company enjoy **income tax incentives for comprehensive resource utilization**, with revenue calculated at 90% of the total amount[72](index=72&type=chunk) - Subsidiaries such as Humen Lvyuan and Xiantao Dongjiang enjoy a **preferential 15% income tax rate** for third-party pollution control enterprises[73](index=73&type=chunk) - Multiple subsidiaries are recognized as **high-tech enterprises** and enjoy a preferential 15% income tax rate[73](index=73&type=chunk) - The company benefits from various **VAT incentives**, including 100% refund for landfill gas power generation and partial refunds for waste/sludge/sewage treatment services[76](index=76&type=chunk) [7. Loss Per Share](index=53&type=section&id=7.%20%E6%AF%8F%E8%82%A1%E8%99%A7%E6%90%8D) For the six months ended June 30, 2025, the Group's basic loss per share was RMB 0.25, an increase from RMB 0.23 in the same period last year Loss Per Share (For the six months ended June 30, 2025 vs Same period in 2024) | Indicator | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Basic loss per share (RMB Yuan) | -0.25 | -0.23 | | Diluted loss per share (RMB Yuan) | -0.25 | -0.23 | | Loss attributable to ordinary equity holders of the parent (RMB Yuan) | 278,177,080.22 | 257,357,295.18 | | Weighted average number of shares in issue (shares) | 1,105,255,802 | 1,105,255,802 | - The Group had **no potential dilutive ordinary shares** outstanding during the current and prior periods[78](index=78&type=chunk) [8. Dividends](index=53&type=section&id=8.%20%E8%82%A1%20%E6%81%AF) The Board of Directors does not recommend the payment of an interim dividend for the six months ended June 30, 2025 - The Board **does not recommend the payment of an interim dividend** for the six months ended June 30, 2025[79](index=79&type=chunk)[141](index=141&type=chunk) [9. Trade and Other Receivables](index=53&type=section&id=9.%20%E5%85%B6%E4%BB%96%E6%87%89%E6%94%B6%E6%AC%BE) As of June 30, 2025, the Group's total trade receivables amounted to RMB 1.13 billion, with a credit period generally set at three months for customers Aging Analysis of Trade Receivables (As of June 30, 2025 vs December 31, 2024) | Aging | June 30, 2025 (RMB Yuan) | December 31, 2024 (RMB Yuan) | | :--- | :--- | :--- | | Within 1 year | 512,746,062.02 | 540,139,017.80 | | 1-2 years | 168,691,267.01 | 188,934,086.00 | | 2-3 years | 180,468,225.19 | 192,854,302.94 | | Over 3 years | 272,364,960.69 | 235,942,934.55 | | **Total** | **1,134,270,514.91** | **1,157,870,341.29** | - The company applies an internal credit assessment policy for new customers, with a **credit period generally of three months**, which can be extended to six months for major customers[81](index=81&type=chunk) [10. Trade and Other Payables](index=55&type=section&id=10.%20%E5%85%B6%E4%BB%96%E6%87%89%E4%BB%98%E6%AC%BE) As of June 30, 2025, the Group's total trade payables amounted to RMB 500.16 million, a decrease of 18.63% from the beginning of the period Aging Analysis of Trade Payables (As of June 30, 2025 vs December 31, 2024) | Aging | June 30, 2025 (RMB Yuan) | December 31, 2024 (RMB Yuan) | | :--- | :--- | :--- | | Within 90 days | 367,098,862.85 | 479,203,580.77 | | 91 to 180 days | 17,720,105.81 | 23,751,599.77 | | 181 to 365 days | 40,511,096.30 | 34,502,763.87 | | Over 1 year | 74,830,599.44 | 77,278,936.55 | | **Total Trade Payables** | **500,160,664.40** | **614,736,880.96** | [11. Net Current Assets](index=56&type=section&id=11.%20%E6%B7%A8%E6%B5%81%E5%8B%95%E8%B3%87%E7%94%A2) As of June 30, 2025, the Group's net current assets were RMB -149.68 million, showing an improvement but remaining negative Net Current Assets (As of June 30, 2025 vs December 31, 2024) | Item | June 30, 2025 (RMB Yuan) | December 31, 2024 (RMB Yuan) | | :--- | :--- | :--- | | Current assets | 3,600,500,457.56 | 3,563,956,903.50 | | Less: Current liabilities | 3,750,180,723.18 | 3,877,229,219.04 | | **Net Current Assets** | **-149,680,265.62** | **-313,272,315.54** | [12. Total Assets Less Current Liabilities](index=56&type=section&id=12.%20%E7%B8%BD%E8%B3%87%E7%94%A2%E6%B8%9B%E6%B5%81%E5%8B%95%E8%B2%A0%E5%82%B5) As of June 30, 2025, the Group's total assets less current liabilities amounted to RMB 7.28 billion, a slight decrease from the end of 2024 Total Assets Less Current Liabilities (As of June 30, 2025 vs December 31, 2024) | Item | June 30, 2025 (RMB Yuan) | December 31, 2024 (RMB Yuan) | | :--- | :--- | :--- | | Total assets | 11,025,527,347.49 | 11,278,479,415.46 | | Less: Current liabilities | 3,750,180,723.18 | 3,877,229,219.04 | | **Total Assets Less Current Liabilities** | **7,275,346,624.31** | **7,401,250,196.42** | [13. Leases](index=57&type=section&id=13.%20%E7%A7%9F%20%E8%B3%83) For the six months ended June 30, 2025, the Group's rental income from land and buildings was RMB 5.68 million, a year-over-year decrease of 6.89% Lease Income and Future Minimum Lease Payments Receivable (As of June 30, 2025 vs Same period/end of 2024) | Item | H1/End of 2025 (RMB Yuan) | H1/End of 2024 (RMB Yuan) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Rental income from land and buildings | 5,684,646.06 | 6,104,944.86 | -6.89% | | Minimum lease payments receivable within one year | 10,894,111.22 | 12,871,557.61 | -15.36% | | Short-term lease expenses recognized in profit or loss | 4,091,997.49 | N/A | N/A | | Total cash outflow for leases | 7,112,406.89 | N/A | N/A | [14. Changes in the Scope of Consolidation](index=58&type=section&id=14.%20%E5%90%88%E4%BD%B5%E7%AF%84%E5%9C%8D%E7%9A%84%E8%AE%8A%E6%9B%B4) During the reporting period, the Group added one new subsidiary, Dongjiang Automobile Resources Recycling (Hubei) Co, Ltd, through establishment with a 51.00% equity interest Increase in Scope of Consolidation (First half of 2025) | Company Name | Method of Acquisition | Date of Acquisition | Capital Contribution (RMB Yuan) | Shareholding Ratio (%) | | :--- | :--- | :--- | :--- | :--- | | Dongjiang Automobile Resources Recycling (Hubei) Co, Ltd | Newly established subsidiary | June 3, 2025 | 25,500,000.00 | 51.00 | [15. Commitments and Contingencies](index=58&type=section&id=15.%20%E6%89%BF%E8%AB%BE%E5%8F%8A%E6%88%96%E6%9C%89%E4%BA%8B%E9%A0%85) As of June 30, 2025, the Group's significant commitments totaled RMB 91.64 million, and it faced several lawsuits, including a franchise agreement termination and a frozen fund issue Significant Commitments (As of June 30, 2025 vs December 31, 2024) | Item | Closing Balance (RMB Yuan) | Opening Balance (RMB Yuan) | | :--- | :--- | :--- | | Major contracting agreements | 57,171,416.77 | 71,830,125.95 | | Commitments for the purchase and construction of long-term assets | 23,043,041.61 | 23,002,506.21 | | External investment commitments | 11,426,136.84 | 23,406,302.44 | | **Total** | **91,640,595.22** | **118,238,934.60** | - The **Shaoyang City operating franchise agreement was unilaterally terminated** by the government due to policy changes; the company has filed an administrative lawsuit for compensation, and the case is awaiting judgment[88](index=88&type=chunk)[89](index=89&type=chunk) - Subsidiary **Hunan Dongjiang was sued** by Jiayuan Environmental over a landfill leachate treatment service contract dispute; the company has filed a counterclaim, and the case has been suspended[91](index=91&type=chunk)[92](index=92&type=chunk) - Some funds in the company's dedicated account for raised capital were **frozen due to a contract dispute**, involving an amount of **RMB 96.32 million**; the case has been heard in court and is awaiting judgment[94](index=94&type=chunk) [16. Related Party Transactions](index=62&type=section&id=16.%20%E9%97%9C%E8%81%AF%E4%BA%A4%E6%98%93) For the six months ended June 30, 2025, the Group's purchases from related parties increased by 14.31% while sales to related parties decreased by 31.72% Related Party Transactions for Goods and Services (For the six months ended June 30, 2025 vs Same period in 2024) | Transaction Type | H1 2025 (RMB Yuan) | H1 2024 (RMB Yuan) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Purchases of goods and services from related parties | 2,613,936.66 | 2,286,862.29 | +14.31% | | Sales of goods and provision of services to related parties | 4,613,057.52 | 6,756,334.30 | -31.72% | Related Party Guarantees (As of June 30, 2025) | Guaranteed Party | Relationship | Guarantee Amount (RMB Yuan) | Start Date | End Date | | :--- | :--- | :--- | :--- | :--- | | Mianyang Dongjiang Environmental Protection Technology Co, Ltd | Subsidiary | 246,000,000.00 | 2021-04-01 | 2030-03-25 | | Foshan Fulong Environmental Protection Technology Co, Ltd | Subsidiary | 160,497,000.00 | 2020-03-18 | 2030-03-18 | | Xiamen Oasis Environmental Protection Industry Co, Ltd | Subsidiary | 80,000,000.00 | 2024-06-27 | 2027-06-27 | | Fujian Xingye Dongjiang Environmental Technology Co, Ltd | Associate | 57,375,000.00 | 2021-06-30 | 2026-09-15 | | Dongguan Fengye Solid Waste Treatment Co, Ltd | Associate | 44,000,000.00 | 2018-10-15 | 2033-10-15 | | **Total** | | **587,872,000.00** | | | Key Management Personnel Remuneration (For the six months ended June 30, 2025 vs Same period in 2024) | Item | H1 2025 (RMB Yuan) | H1 2024 (RMB Yuan) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Key management personnel remuneration | 3,620,453.15 | 3,364,618.13 | +7.60% | [17. Approval of the Condensed Interim Financial Information](index=63&type=section&id=17.%20%E6%89%B9%E5%87%86%E7%B0%A1%E6%98%8E%E4%B8%AD%E6%9C%9F%E8%B2%A1%E5%8B%99%E8%B3%87%E6%96%99) The Group's condensed interim financial information for the six months ended June 30, 2025, was approved by the Board of Directors on August 22, 2025 - The condensed interim financial information was **approved by the Board of Directors** on August 22, 2025[104](index=104&type=chunk) [Management Discussion and Analysis](index=64&type=section&id=%E7%AE%A1%E7%90%86%E5%B1%A4%E8%A8%8E%E8%AB%96%E8%88%87%E5%88%86%E6%9E%90) [Business Review](index=64&type=section&id=%E6%A5%AD%E5%8B%99%E5%9B%9E%E9%A1%A7) In the first half of 2025, the company's hazardous waste collection volume grew over 10%, but intense competition squeezed profit margins, while new business ventures in auto parts remanufacturing were initiated - Hazardous waste collection volume **grew by over 10%**, but profit margins were squeezed due to lower prices for harmless treatment and higher discount rates for resource utilization[106](index=106&type=chunk) - Revenue from the precious metals recycling business **declined by over 20%**, significantly impacted by metal prices[106](index=106&type=chunk) - The company achieved product sales of **RMB 646 million**, with sales of new products surging by **272% year-over-year**[107](index=107&type=chunk) - In R&D, **15 new patents were applied for**, and AI was applied to the comprehensive environmental services industry chain[108](index=108&type=chunk) - The company entered the **auto parts remanufacturing sector** and registered three new brands: "Dongjiang Regeneration," "Dongjiang Renewal," and "Dongjiang New Green"[108](index=108&type=chunk) - The company will continue to deepen reforms, optimize its business structure, and increase its focus on the **resource recycling sector**[109](index=109&type=chunk) [Financial Review](index=66&type=section&id=%E8%B2%A1%E5%8B%99%E5%9B%9E%E9%A1%A7) In the first half of 2025, the Group's total operating revenue decreased by 3.40% year-over-year to RMB 1.50 billion, with the net loss attributable to parent company shareholders widening by 8.09% to RMB 278.18 million Key Financial Review Indicators (For the six months ended June 30, 2025 vs Same period in 2024) | Indicator | H1 2025 (RMB Yuan) | H1 2024 (RMB Yuan) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Total operating revenue | 1,500,470,309.76 | 1,553,358,452.26 | -3.40% | | Comprehensive gross profit margin | 3.24% | 5.00% | -1.76 percentage points | | Net profit attributable to shareholders of the parent company | -278,177,080.22 | -257,357,295.18 | -8.09% | | Selling expenses | 41,851,616.53 | 38,307,401.98 | +9.26% | | Administrative expenses | 170,893,774.94 | 187,314,630.91 | -8.77% | | Finance costs | 93,874,720.66 | 93,895,258.94 | -0.02% | | Income tax expense | 3,460,345.21 | 4,273,546.78 | -19.03% | - The decrease in total operating revenue was mainly due to a **27.61% reduction** in revenue from the precious metals recycling business[110](index=110&type=chunk) - The **widening net loss attributable to the parent** was primarily due to intense market competition and sustained pressure on the main business's profit margins[111](index=111&type=chunk) - The increase in selling expenses was mainly due to **higher business commissions** resulting from increased collection volumes in the harmless treatment business[112](index=112&type=chunk) [Financial Position and Liquidity](index=68&type=section&id=%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81%E5%8F%8A%E6%B5%81%E5%8B%95%E8%B3%87%E9%87%91) As of June 30, 2025, the Group's net current assets were RMB -149.68 million, with a debt-to-asset ratio of 65.31% and cash and cash equivalents of approximately RMB 1.05 billion Key Financial Position and Liquidity Indicators (As of June 30, 2025 vs December 31, 2024) | Indicator | June 30, 2025 (RMB Yuan) | December 31, 2024 (RMB Yuan) | | :--- | :--- | :--- | | Net current assets | -149,680,265.62 | -313,272,315.54 | | Cash and cash equivalents | 1,051,200,772.35 | 1,016,307,175.22 | | Total liabilities | 7,200,623,387.22 | 7,127,589,598.80 | | Debt-to-asset ratio | 65.31% | 63.20% | | Bank loans | 4,827,608,335.70 | 5,088,018,406.13 | - The Board believes the Group has a **solid financial position and sufficient liquidity** to meet future business development needs[116](index=116&type=chunk) [Material Investments, Acquisitions, and Disposals of Subsidiaries, Associates, or Joint Ventures](index=68&type=section&id=%E9%87%8D%E5%A4%A7%E6%8A%95%E8%B3%87%E3%80%81%E6%94%B6%E8%B3%BC%E5%8F%8A%E5%87%BA%E5%94%AE%E9%99%84%E5%B1%AC%E5%85%AC%E5%8F%B8%E3%80%81%E8%81%AF%E7%87%9F%E5%85%AC%E5%8F%B8%E6%88%96%E5%90%88%E7%87%9F%E4%BC%81%E6%A5%AD) During the reporting period, the Group had no material investments, acquisitions, or disposals of subsidiaries, associates, or joint ventures - During the reporting period, the Group had **no material investments, acquisitions, or disposals** of subsidiaries, associates, or joint ventures[117](index=117&type=chunk) [Future Plans for Material Investments or Capital Assets](index=68&type=section&id=%E6%9C%AA%E4%BE%86%E9%87%8D%E5%A4%A7%E6%8A%95%E8%B3%87%E6%88%96%E8%B3%87%E6%9C%AC%E6%80%A7%E8%B3%87%E7%94%A2%E8%A8%88%E5%8A%83) Other than as disclosed in this report, the Group has no other future plans for material investments or capital assets - Other than as disclosed in this report, the Group has **no other future plans for material investments** or capital assets[118](index=118&type=chunk) [Interest Rate and Foreign Exchange Risks](index=69&type=section&id=%E5%88%A9%E7%8E%87%E5%8F%8A%E5%A4%96%E5%8C%AF%E9%A2%A8%E9%9A%AA) The Group is exposed to fair value interest rate risk from fixed-rate bank loans and cash flow interest rate risk from floating-rate loans, while managing foreign exchange risk through forward contracts - The Group is exposed to **fair value interest rate risk** on fixed-rate bank loans and **cash flow interest rate risk** on floating-rate bank loans[119](index=119&type=chunk) - The company maintains floating-rate bank loans to mitigate cash flow interest rate risk and monitors interest rate fluctuations[119](index=119&type=chunk) - Foreign exchange risk mainly arises from assets and liabilities denominated in HKD and USD; the company has used **forward foreign exchange contracts** to hedge against foreign currency borrowing risks[120](index=120&type=chunk) [Contingent Liabilities](index=70&type=section&id=%E6%88%96%E7%84%B6%E8%B2%A0%E5%82%B5) Other than the litigation and guarantee matters disclosed in Note 15 to the financial statements, the Group had no other material contingent liabilities as of June 30, 2025 - Other than as disclosed in Note 15 to the financial statements, the Group had **no other material contingent liabilities**[121](index=121&type=chunk) [Employee Information and Remuneration Policy](index=70&type=section&id=%E5%83%B1%E5%93%A1%E8%B3%87%E6%96%99%E5%8F%8A%E8%96%AA%E9%85%AC%E6%94%BF%E7%AD%96) As of June 30, 2025, the Group had 3,904 full-time employees, with total staff costs for the first half of the year amounting to approximately RMB 274.59 million Employee Information and Costs (As of June 30, 2025 vs Dec 31, 2024/Same period in 2024) | Indicator | June 30, 2025/H1 2025 | Dec 31, 2024/H1 2024 | | :--- | :--- | :--- | | Number of full-time employees | 3,904 | 3,984 | | Total staff costs (RMB Yuan) | 274,589,998.00 | 278,693,042.50 | - The Group provides employees with **continuous training, a comprehensive remuneration package**, and a range of additional benefits, including retirement benefits, housing allowances, and medical insurance[122](index=122&type=chunk) [Events During the Period](index=71&type=section&id=%E6%9C%9F%E5%85%A7%E4%BA%8B%E9%A0%85) During the period, the company fulfilled guarantee obligations for subsidiaries, signed a new financial services agreement, issued RMB 400 million in medium-term notes, and changed its H-share registrar - The company fulfilled its guarantee obligation for its subsidiary Mianyang Dongjiang by paying **RMB 21.81 million**[123](index=123&type=chunk) - The company fulfilled its guarantee obligation for its subsidiary Tangshan Wanders by paying **RMB 111.10 million**[124](index=124&type=chunk) - The company entered into a **new financial services agreement with GDFM**, which has been approved by independent shareholders[126](index=126&type=chunk) - The company successfully issued **RMB 400 million** of the first tranche of 2025 medium-term notes with an annual interest rate of **2.66%**[127](index=127&type=chunk) - Effective from July 27, 2025, the H-share registrar will be changed to **Tricor Investor Services Limited**[128](index=128&type=chunk) [Use of Proceeds from the Non-public Issuance of A-Shares](index=73&type=section&id=%E9%9D%9E%E5%85%AC%E9%96%8B%E7%99%BC%E8%A1%8CA%E8%82%A1%E6%89%80%E5%BE%97%E6%AC%BE%E9%A0%85%E7%94%A8%E9%80%94) Of the approximately RMB 1.19 billion in net proceeds, RMB 8.95 million was utilized as of June 30, 2025, with some fundraising projects being postponed Use of Proceeds from Non-public A-Share Issuance (As of June 30, 2025) | Proposed Use of Proceeds | Allocated Net Proceeds (RMB million) | Unutilized Net Proceeds (Jan 1, 2025) (RMB million) | Utilized Net Proceeds (H1 2025) (RMB million) | Unutilized Net Proceeds (June 30, 2025) (RMB million) | Expected Timeline | | :--- | :--- | :--- | :--- | :--- | :--- | | Construction of Jieyang Dananhai Petrochemical Industrial Zone Green Recycling Center Phase I | 410.00 | 271.52 | 7.26 | 264.26 | By Dec 2025 | | Expansion of Jingzhou City Jiangling County Sewage Treatment Plant (Phase II) in Hubei Province | 165.00 | 93.99 | – | 93.99 | By Dec 2025 | | Digital and Intelligent Construction Project | 184.31 | 160.25 | 0.09 | 160.16 | By Dec 2028 | | Hazardous Waste Treatment Transformation and Upgrade Project | 95.00 | 64.88 | 1.60 | 63.28 | By Dec 2028 | | Supplement general working capital | 340.00 | – | – | – | – | | **Total** | **1,194.31** | **590.64** | **8.95** | **581.69** | | - The company has used the proceeds to replace **RMB 133 million** of self-raised funds pre-invested in the projects and **RMB 1.25 million** in issuance expenses[130](index=130&type=chunk) - Some of the investment projects funded by the proceeds have been **postponed**[131](index=131&type=chunk) [Directors', Supervisors' and Chief Executive's Interests and Short Positions in Shares, Underlying Shares and Debentures](index=74&type=section&id=%E8%91%A3%E4%BA%8B%E3%80%81%E7%9B%A3%E4%BA%8B%E5%8F%8A%E6%9C%80%E9%AB%98%E8%A1%8C%E6%94%BF%E4%BA%BA%E5%93%A1%E6%96%BC%E8%82%A1%E4%BB%BD%E3%80%81%E7%9B%B8%E9%97%9C%E8%82%A1%E4%BB%BD%E5%8F%8A%E5%82%B5%E5%88%B8%E4%B9%8B%E6%AC%8A%E7%9B%8A%E5%8F%8A%E6%B7%A1%E5%80%89) As of June 30, 2025, no directors, supervisors, or chief executives of the Company had any interests or short positions in the shares, underlying shares, or debentures of the Company or its associated corporations - As of June 30, 2025, **no directors, supervisors, or chief executives** of the Company had any interests or short positions in the shares, underlying shares, or debentures of the Company or its associated corporations[132](index=132&type=chunk) [Substantial Shareholders' Interests and Short Positions in Shares and Underlying Shares](index=75&type=section&id=%E4%B8%BB%E8%A6%81%E8%82%A1%E6%9D%B1%E6%96%BC%E8%82%A1%E4%BB%BD%E5%8F%8A%E7%9B%B8%E9%97%9C%E8%82%A1%E4%BB%BD%E4%B9%8B%E6%AC%8A%E7%9B%8A%E5%8F%8A%E6%B7%A1%E5%80%89) As of June 30, 2025, Guangdong Rising Holdings Group was the largest shareholder, holding a combined interest of 26.37% of the total share capital Substantial Shareholders' Interests in Shares and Underlying Shares (As of June 30, 2025) | Shareholder Name | Class of Shares | Number of Shares | Approx. % of Relevant Share Class | % of Company's Issued Shares | | :--- | :--- | :--- | :--- | :--- | | Guangdong Rising Holdings Group | A-shares | 266,279,028 | 29.42% | 24.09% | | | H-shares | 25,179,200 | 12.58% | 2.28% | | Baowu Environment | A-shares | 86,629,001 | 9.57% | 7.84% | | | A-shares (Interest of controlled corporation) | 37,664,783 | 4.16% | 4.16% | | Huihong Group | A-shares | 50,087,669 | 5.53% | 4.53% | | | A-shares (Interest of controlled corporation) | 25,995,038 | 2.87% | 2.35% | | | H-shares (Interest of controlled corporation) | 18,204,800 | 9.10% | 1.65% | - Percentages are calculated based on **1,105,255,802 shares in issue** as of June 30, 2025 (comprising 200,137,500 H-shares and 905,118,302 A-shares)[135](index=135&type=chunk) [Share Option Scheme](index=77&type=section&id=%E8%82%A1%E4%BB%BD%E8%A8%88%E5%8A%83) During the reporting period, the Group did not implement any share option scheme as defined in Chapter 17 of the Listing Rules - During the reporting period, the Group **did not implement any share option scheme** as defined in Chapter 17 of the Listing Rules[137](index=137&type=chunk) [Competing Interests or Business](index=77&type=section&id=%E7%AB%B6%E7%88%AD%E6%AC%8A%E7%9B%8A%E6%88%96%E6%A5%AD%E5%8B%99) During the reporting period, no director, supervisor, chief executive, or substantial shareholder of the Company had any interest in a business that competes or is likely to compete with the Group's business - During the reporting period, **no director, supervisor, chief executive, or substantial shareholder** of the Company had any interest in a business that competes or is likely to compete with the Group's business[138](index=138&type=chunk) [Audit and Risk Management Committee and Review of Interim Results](index=78&type=section&id=%E5%AF%A9%E8%A8%88%E8%88%87%E9%A2%A8%E9%9A%AA%E7%AE%A1%E7%90%86%E5%A7%94%E5%93%A1%E6%9C%83%E5%8F%8A%E5%AF%A9%E9%96%B1%E4%B8%AD%E6%9C%9F%E6%A5%AD%E7%B8%BE) The Company's Audit and Risk Management Committee, chaired by Mr. Li Kwok Tung, has reviewed the Group's unaudited interim results for the six months ended June 30, 2025 - The Audit and Risk Management Committee comprises **Mr. Li Kwok Tung (Chairman), Mr. Li Jinhui, and Mr. Wang Shi**[139](index=139&type=chunk) - The Committee has **reviewed the Group's interim results** and financial statements for the six months ended June 30, 2025, which have not been reviewed by the company's auditor[139](index=139&type=chunk) [Purchase, Sale or Redemption of its Listed Securities](index=78&type=section&id=%E8%B3%BC%E5%85%A5%E3%80%81%E5%87%BA%E5%94%AE%E6%88%96%E8%B4%96%E5%9B%9E%E5%85%B6%E4%B8%8A%E5%B8%82%E8%AD%89%E5%88%B8) During the reporting period, neither the Company nor any of its subsidiaries repurchased, sold, or redeemed any of the Company's listed securities - During the reporting period, neither the Company nor any of its subsidiaries **repurchased, sold, or redeemed** any of the Company's listed securities[140](index=140&type=chunk) [Interim Dividend](index=78&type=section&id=%E4%B8%AD%E6%9C%9F%E8%82%A1%E6%81%AF) The Board does not recommend the payment of any interim dividend for the six months ended June 30, 2025 - The Board **does not recommend the payment of any interim dividend** for the six months ended June 30, 2025[141](index=141&type=chunk) [Corporate Governance](index=78&type=section&id=%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB) The Company is committed to maintaining a high standard of corporate governance and has complied with all applicable code provisions of the Corporate Governance Code - The Company is committed to maintaining a **high overall standard of corporate governance** by continuously improving its corporate management practices and procedures[142](index=142&type=chunk) - The Company has **complied with all applicable code provisions** of the Corporate Governance Code during the reporting period[142](index=142&type=chunk) [Changes in Information of Directors](index=79&type=section&id=%E6%9C%89%E9%97%9C%E8%91%A3%E4%BA%8B%E8%B3%87%E6%96%99%E7%9A%84%E8%AE%8A%E5%8B%95) There were no changes in the information of the directors that are required to be disclosed pursuant to Rule 13.51B(1) of the Listing Rules - There were **no changes in the information of the directors** that are required to be disclosed pursuant to Rule 13.51B(1) of the Listing Rules[143](index=143&type=chunk) [Directors' and Supervisors' Dealings in Securities](index=79&type=section&id=%E8%91%A3%E4%BA%8B%E5%8F%8A%E7%9B%A3%E4%BA%8B%E8%AD%89%E5%88%B8%E8%B2%B7%E8%B3%A3) The Company has adopted the Model Code as the code of conduct for securities transactions by directors and supervisors, all of whom have confirmed compliance during the reporting period - The Company has adopted the **Model Code** as the code of conduct for securities transactions by directors and supervisors[144](index=144&type=chunk) - All directors and supervisors have **confirmed their compliance** with the required standards set out in the Model Code during the reporting period[144](index=144&type=chunk)

[Part I. Company Information and Core Financial Statements](index=1&type=section&id=I.%20Company%20Information%20and%20Core%20Financial%20Statements) This section provides an overview of the Company's profile, core financial statements, and key financial performance indicators [Company Overview](index=5&type=section&id=1.1%20Company%20Overview) China Dredging Environment Protection Holdings Limited (the Company) is incorporated in the Cayman Islands, listed on the HKEX main board, and primarily engaged in dredging, water management, and marine engineering services - The Company is incorporated in the Cayman Islands, listed on the HKEX main board, and ultimately wholly owned by Mr. Liu Kaijin and his spouse Ms. Zhou Shuhua[8](index=8&type=chunk) - The Group's principal businesses include dredging and water management, marine lifting, installation, and other engineering services[9](index=9&type=chunk) [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=1&type=section&id=1.2%20Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For the six months ended June 30, 2025, the Group reported revenue of RMB 145,766 thousand, an 11.2% decrease year-on-year, with loss and total comprehensive expense for the period significantly narrowing by 51.3% to RMB 9,478 thousand Summary of Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (For the six months ended June 30) | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 145,766 | 164,089 | -11.2% | | Operating Costs | (120,013) | (145,331) | -17.4% | | Gross Profit | 25,753 | 18,758 | +37.3% | | Other Income | 1,605 | 5,548 | -71.1% | | Net Other Gains and Losses | 1,687 | 465 | +262.8% | | Administrative Expenses | (21,122) | (27,589) | -23.4% | | Finance Costs | (9,550) | (11,946) | -20.0% | | Loss Before Tax | (1,628) | (14,884) | -89.0% | | Income Tax Expense | (7,850) | (4,571) | +71.7% | | Loss and Total Comprehensive Expense for the Period | (9,478) | (19,455) | -51.3% | | Loss for the Period Attributable to Owners of the Company | (21,280) | (31,522) | -32.5% | [Condensed Consolidated Statement of Financial Position](index=3&type=section&id=1.3%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the Group's total assets decreased to RMB 1,227,311 thousand, with net current liabilities of approximately RMB 457,896 thousand and a current ratio of 0.41, indicating ongoing liquidity pressure Summary of Condensed Consolidated Statement of Financial Position (As of June 30) | Metric | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Non-current Assets | 902,972 | 939,453 | -3.8% | | Current Assets | 324,339 | 363,266 | -10.8% | | Current Liabilities | 782,235 | 822,621 | -4.9% | | Net Current Liabilities | (457,896) | (459,355) | -0.3% | | Total Equity | 289,566 | 306,988 | -5.7% | | Non-current Liabilities | 155,510 | 173,110 | -10.2% | - As of June 30, 2025, the Group's **net current liabilities** were approximately **RMB 457,896 thousand**, with a **current ratio of 0.41**, indicating persistent liquidity challenges[12](index=12&type=chunk)[62](index=62&type=chunk) [Part II. Notes to the Financial Statements](index=5&type=section&id=II.%20Notes%20to%20the%20Financial%20Statements) This section details the Group's accounting policies, financial performance breakdowns, and specific financial statement items [General Information](index=5&type=section&id=2.1%20General%20Information) This section provides the Company's basic registration, listing location, ownership structure, primary business scope, and confirms the financial statements are presented in RMB - The Company is an investment holding company, with its subsidiaries primarily engaged in dredging and water management, marine lifting, installation, and other engineering services[9](index=9&type=chunk) - The condensed consolidated financial statements are presented in RMB, which is also the Company's functional currency[10](index=10&type=chunk) [Basis of Preparation of Condensed Consolidated Financial Statements](index=5&type=section&id=2.2%20Basis%20of%20Preparation%20of%20Condensed%20Consolidated%20Financial%20Statements) The condensed consolidated financial statements are prepared in accordance with Hong Kong Accounting Standard 34 Interim Financial Reporting and applicable disclosure requirements of the HKEX Listing Rules - The financial statements are prepared in accordance with Hong Kong Accounting Standard 34 Interim Financial Reporting and the disclosure requirements of Appendix D2 to the HKEX Listing Rules[11](index=11&type=chunk) [Going Concern Assessment](index=5&type=section&id=2.2.1%20Going%20Concern%20Assessment) As of June 30, 2025, the Group faces significant uncertainties regarding its going concern ability due to net loss and net current liabilities, but the Board believes it can continue operations based on shareholder commitments, banking relationships, and financing efforts - As of June 30, 2025, the Group incurred a **net loss of approximately RMB 21,280 thousand** and had **net current liabilities of approximately RMB 457,896 thousand**, indicating significant going concern uncertainties[12](index=12&type=chunk) - Controlling shareholder Mr. Liu has committed to providing financial support to ensure the Group can meet its liabilities due within the next 12 months[15](index=15&type=chunk) - The Board believes the Group can improve cash flow through renewing bank borrowings, seeking additional financing, and continuous cost control, thus preparing financial statements on a going concern basis[13](index=13&type=chunk)[15](index=15&type=chunk) [Significant Accounting Policies](index=6&type=section&id=2.3%20Significant%20Accounting%20Policies) The condensed consolidated financial statements are prepared on a historical cost basis, with certain investment properties and financial instruments measured at fair value, and include significant changes since the 2024 annual financial statements - The financial statements are prepared on a historical cost basis, with certain investment properties and financial instruments measured at fair value[14](index=14&type=chunk) [Application of Revised Hong Kong Financial Reporting Standards](index=7&type=section&id=2.3.1%20Application%20of%20Revised%20Hong%20Kong%20Financial%20Reporting%20Standards) The Group has adopted revised Hong Kong Financial Reporting Standards, including HKAS 21 (Amendment) Lack of Exchangeability, with no significant impact on the financial position or disclosures for the current and prior periods - The Group has initially applied revised Hong Kong Financial Reporting Standards, including HKAS 21 (Amendment) "Lack of Exchangeability"[17](index=17&type=chunk) - The application of these amendments had no significant impact on the Group's financial position and disclosures for the current and prior periods[17](index=17&type=chunk) [Revenue](index=8&type=section&id=2.4%20Revenue) For the six months ended June 30, 2025, the Group's total revenue was RMB 145,766 thousand, primarily from other marine business which saw a year-on-year decrease, while infrastructure and reclamation dredging and environmental dredging and water management businesses experienced significant growth Revenue Breakdown (For the six months ended June 30) | Revenue Category | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Infrastructure and Reclamation Dredging Business | 19,285 | 7,714 | +150.0% | | Environmental Dredging and Water Management Business | 1,470 | 265 | +454.7% | | Other Marine Business | 125,011 | 152,122 | -17.8% | | Property Management Business | – | 3,988 | -100.0% | | **Total Revenue** | **145,766** | **164,089** | **-11.2%** | - All revenue is recognized over time[19](index=19&type=chunk) [Segment Information](index=8&type=section&id=2.5%20Segment%20Information) The Group's operations are divided into four reportable and operating segments based on reports reviewed by the chief operating decision-maker: infrastructure and reclamation dredging, environmental dredging and water management, other marine business, and property management - The Group's operating segments are determined based on reports reviewed by the executive directors (chief operating decision-makers) for strategic decision-making[20](index=20&type=chunk) - The four reportable segments include infrastructure and reclamation dredging, environmental dredging and water management, other marine business, and property management business[21](index=21&type=chunk) [Segment Descriptions](index=8&type=section&id=2.5.1%20Segment%20Descriptions) This section details the Group's four main business segments: infrastructure and reclamation dredging (services and consulting), environmental dredging and water management (water quality improvement), other marine business (lifting, installation, salvage, vessel chartering), and property management (leasing and hotel construction) - Infrastructure and reclamation dredging business provides services and related consulting[21](index=21&type=chunk) - Environmental dredging and water management business primarily enhances environmental benefits and water quality in inland rivers[21](index=21&type=chunk) - Other marine business includes marine lifting, installation, salvage, vessel chartering, and other engineering services[21](index=21&type=chunk) - Property management business involves leasing management of shopping malls and factories, and hotel construction[21](index=21&type=chunk) [Segment Revenue and Results](index=9&type=section&id=2.5.2%20Segment%20Revenue%20and%20Results) For the six months ended June 30, 2025, external sales for infrastructure and reclamation dredging and environmental dredging and water management businesses grew significantly but still incurred losses, while other marine business saw decreased external sales but remained the only profitable segment, and property management had no external sales and recorded a loss Segment Revenue and Results (For the six months ended June 30) | Segment | 2025 Revenue (RMB thousands) | 2024 Revenue (RMB thousands) | Revenue Change (%) | 2025 Results (RMB thousands) | 2024 Results (RMB thousands) | Results Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Infrastructure and Reclamation Dredging Business | 19,285 | 7,714 | +150.0% | (7,992) | (33,572) | +76.2% | | Environmental Dredging and Water Management Business | 1,470 | 265 | +454.7% | (3,488) | (13,855) | +74.8% | | Other Marine Business | 125,011 | 152,122 | -17.8% | 33,292 | 51,911 | -35.9% | | Property Management Business | – | 3,988 | -100.0% | (780) | 2,954 | -126.4% | | **Total** | **145,766** | **164,089** | **-11.2%** | **21,032** | **7,438** | **+182.8%** | - Segment results exclude certain other income, fair value changes of investment properties, central administrative costs, and finance costs[25](index=25&type=chunk) [Segment Assets](index=11&type=section&id=2.5.3%20Segment%20Assets) As of June 30, 2025, the Group's total segment assets decreased to RMB 1,212,711 thousand, with other marine business remaining the largest segment by asset size Segment Assets (As of June 30) | Segment | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Infrastructure and Reclamation Dredging Business | 278,104 | 295,092 | -5.8% | | Environmental Dredging and Water Management Business | 137,345 | 145,833 | -5.8% | | Other Marine Business | 585,772 | 597,873 | -2.0% | | Property Management Business | 211,490 | 212,287 | -0.4% | | **Total Segment Assets** | **1,212,711** | **1,251,085** | **-3.1%** | | Unallocated Assets (Bank balances and cash, etc) | 14,600 | 51,634 | -71.8% | | **Consolidated Assets** | **1,227,311** | **1,302,719** | **-5.8%** | [Segment Liabilities and Geographical Information](index=12&type=section&id=2.5.4%20Segment%20Liabilities%20and%20Geographical%20Information) The Group does not present total liabilities for reportable segments as the chief operating decision-maker reviews them on an overall basis; revenue from external customers in Mainland China decreased, while other regions saw significant growth, and most non-current assets are located in Mainland China - The Group does not present total liabilities for reportable segments as the chief operating decision-maker reviews them on an overall basis[27](index=27&type=chunk) Revenue from External Customers (by Geographical Region) | Region | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Mainland China | 127,966 | 161,090 | -20.6% | | Other Regions | 17,800 | 2,999 | +493.5% | | **Total** | **145,766** | **164,089** | **-11.2%** | - The vast majority of the Group's non-current assets are located in Mainland China[29](index=29&type=chunk) [Net Other Gains and Losses](index=12&type=section&id=2.6%20Net%20Other%20Gains%20and%20Losses) For the six months ended June 30, 2025, the Group's net other gains and losses significantly increased to RMB 1,687 thousand year-on-year, primarily driven by gains from disposal of a subsidiary and exchange gains Net Other Gains and Losses (For the six months ended June 30) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Loss on disposal of property, plant and equipment | (15) | – | N/A | | Gain on disposal of a subsidiary | 983 | – | N/A | | Net exchange gains and losses | 719 | 465 | +54.6% | | **Total** | **1,687** | **465** | **+262.8%** | [Income Tax Expense](index=13&type=section&id=2.7%20Income%20Tax%20Expense) For the six months ended June 30, 2025, income tax expense increased to RMB 7,850 thousand, mainly due to higher PRC corporate income tax, with PRC subsidiaries taxed at 25% and no Hong Kong profits tax provision for Hong Kong companies due to no assessable profits Income Tax Expense (For the six months ended June 30) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Current tax - PRC corporate income tax | 8,288 | 5,069 | +63.5% | | Deferred tax - Current period | (438) | (498) | -12.1% | | **Total** | **7,850** | **4,571** | **+71.7%** | - The corporate income tax rate for PRC subsidiaries is **25%**[31](index=31&type=chunk) - Hong Kong companies had no assessable profits, thus no Hong Kong profits tax provision was made[32](index=32&type=chunk) [Components of Loss and Total Comprehensive Expense for the Period](index=14&type=section&id=2.8%20Components%20of%20Loss%20and%20Total%20Comprehensive%20Expense%20for%20the%20Period) This section details the main expenses deducted (or credited) in the loss for the period, including staff costs, investment property rental income and related expenses, depreciation, and operating costs, with staff costs and depreciation being key expense items Items Deducted (Credited) in Loss for the Period (For the six months ended June 30) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Total staff costs | 28,257 | 25,945 | +8.9% | | Net rental income from investment properties | (1,858) | (3,918) | +52.6% | | Depreciation of property, plant and equipment | 36,455 | 44,144 | -17.4% | | Depreciation of right-of-use assets | 1,726 | 781 | +121.0% | | Operating costs | 120,013 | 145,331 | -17.4% | [Loss Per Share](index=15&type=section&id=2.9%20Loss%20Per%20Share) For the six months ended June 30, 2025, basic and diluted loss per share attributable to owners of the Company narrowed to RMB 1.42 cents from 2.10 cents in the prior year, with no potential ordinary shares during the period Loss Per Share (For the six months ended June 30) | Metric | 2025 (RMB thousands/cents) | 2024 (RMB thousands/cents) | Change (%) | | :--- | :--- | :--- | :--- | | Loss for the period attributable to owners of the Company | (21,280) | (31,522) | -32.5% | | Weighted average number of ordinary shares (thousands) | 1,503,882 | 1,503,882 | 0.0% | | **Basic and diluted loss per share (RMB cents)** | **(1.42)** | **(2.10)** | **+32.4%** | - The Group had no potential ordinary shares during the reporting period[34](index=34&type=chunk) [Dividends](index=15&type=section&id=2.10%20Dividends) For the six months ended June 30, 2025, and 2024, the Company neither paid nor proposed any dividends, nor has it proposed any dividends since the end of the reporting period - The Company neither paid nor proposed any dividends during the reporting period or since the end of the reporting period[35](index=35&type=chunk) [Movements in Property, Plant and Equipment](index=15&type=section&id=2.11%20Movements%20in%20Property%2C%20Plant%20and%20Equipment) For the six months ended June 30, 2025, the Group purchased RMB 1,866 thousand in property, plant, and equipment, and disposed of equipment with a carrying amount of RMB 180 thousand, resulting in a loss on disposal of RMB 15 thousand, with no additions or disposals in the prior period - As of June 30, 2025, the Group purchased **RMB 1,866 thousand** in property, plant and equipment[36](index=36&type=chunk) - The Group disposed of plant and equipment with a carrying amount of **RMB 180 thousand**, resulting in a **loss on disposal of RMB 15 thousand**[36](index=36&type=chunk) - For the six months ended June 30, 2024, the Group made no additions or disposals of property, plant and equipment[36](index=36&type=chunk) [Trade and Other Receivables and Prepayments](index=16&type=section&id=2.12%20Trade%20and%20Other%20Receivables%20and%20Prepayments) As of June 30, 2025, total trade and other receivables and prepayments slightly decreased to RMB 311,384 thousand from December 31, 2024, with trade receivables (net of credit loss allowance) at RMB 187,844 thousand Trade and Other Receivables and Prepayments (As of June 30) | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Trade receivables (net of allowance) | 187,844 | 191,833 | -2.1% | | Bills receivable | 39,079 | 38,260 | +2.1% | | Recoverable VAT | 20,159 | 22,734 | -11.4% | | Deposits | 8,307 | 7,537 | +10.2% | | Other receivables | 13,728 | 17,323 | -20.7% | | Other prepayments | 25,672 | 20,112 | +27.6% | | Loans to investees | 16,595 | 16,595 | 0.0% | | **Total** | **311,384** | **314,394** | **-1.0%** | - The Group sets credit limits based on customer credit quality and prepares trade receivables aging analysis based on the agreed date of service completion[38](index=38&type=chunk) - As of June 30, 2025, trade receivables (net of allowance) overdue for **over 2 years** amounted to **RMB 55,608 thousand**, representing a significant proportion[39](index=39&type=chunk) - Loans to investees totaled **RMB 16,595 thousand**, bearing interest at **4%**, are unsecured, and repayable on demand[42](index=42&type=chunk) [Trade and Other Payables](index=18&type=section&id=2.13%20Trade%20and%20Other%20Payables) As of June 30, 2025, total trade and other payables decreased by 10.9% to RMB 372,459 thousand from December 31, 2024, with a significant drop in trade payables, though those overdue for over 180 days still constitute a large proportion Trade and Other Payables (As of June 30) | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Trade payables | 142,395 | 184,674 | -22.9% | | Payables for construction costs of investment properties | 70,973 | 70,973 | 0.0% | | Accrued other taxes | 43,746 | 47,880 | -8.7% | | Accrued staff salaries and benefits | 24,485 | 29,316 | -16.5% | | Other payables | 90,860 | 84,881 | +7.0% | | **Total** | **372,459** | **417,724** | **-10.9%** | - As of June 30, 2025, trade payables overdue for **over 180 days** amounted to **RMB 81,265 thousand**, representing **57.1%** of total trade payables[44](index=44&type=chunk) - Payables for construction costs of investment properties of approximately **RMB 70,973 thousand** have been overdue for **over 1 year**[43](index=43&type=chunk) [Bank Borrowings](index=19&type=section&id=2.14%20Bank%20Borrowings) As of June 30, 2025, the Group's bank borrowings totaled RMB 178,450 thousand, with effective annual interest rates ranging from 4.50% to 6.80%, having borrowed RMB 136,250 thousand and repaid RMB 142,600 thousand during the period Bank Borrowings (As of June 30) | Metric | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Bank borrowings | 178,450 | 184,800 | -3.4% | | Effective annual interest rate | 4.50% to 6.80% | 4.50% to 6.80% | 0.0% | - During the reporting period, the Group borrowed **RMB 136,250 thousand** in bank loans and repaid **RMB 142,600 thousand** in bank loans[45](index=45&type=chunk) [Share Capital](index=19&type=section&id=2.15%20Share%20Capital) As of June 30, 2025, the Company's authorized share capital was 5,000,000 thousand shares, with 1,503,882 thousand shares issued and fully paid, amounting to RMB 255,247 thousand, and no changes in share capital during the reporting period Share Capital Structure (As of June 30) | Item | Number of Shares (thousands) | Amount (HKD thousands) | Equivalent Amount (RMB thousands) | | :--- | :--- | :--- | :--- | | Authorized share capital (par value HKD 0.2 per share) | 5,000,000 | 1,000,000 | N/A | | Issued and fully paid share capital (par value HKD 0.2 per share) | 1,503,882 | 300,776 | 255,247 | - There were no changes in the Company's share capital for the six months ended June 30, 2025, and 2024[48](index=48&type=chunk) [Part III. Management Discussion and Analysis](index=20&type=section&id=III.%20Management%20Discussion%20and%20Analysis) This section provides an overview of the Group's business performance, financial results, liquidity, capital structure, and future outlook [Overview](index=20&type=section&id=3.1%20Overview) The Group primarily engages in dredging, categorized into infrastructure and reclamation dredging, environmental dredging and water management, and other marine businesses, alongside property management, reporting a narrowed loss of approximately RMB 9,500 thousand for the period - The Group's core business is dredging, divided into infrastructure and reclamation dredging, environmental dredging and water management, and other marine businesses, also including property management[49](index=49&type=chunk) - During the reporting period, the Group recorded a **loss of approximately RMB 9,500 thousand**, significantly narrowing from a loss of RMB 19,500 thousand in the prior period[49](index=49&type=chunk) - Loss attributable to shareholders of the Company was approximately **RMB 21,300 thousand**[49](index=49&type=chunk) [Business Review](index=20&type=section&id=3.2%20Business%20Review) During the reporting period, infrastructure and reclamation dredging and environmental dredging and water management businesses saw significant revenue growth, while other marine business contracted due to intense market competition, and property management ceased leasing activities to reduce costs - Revenue from the infrastructure and reclamation dredging business segment increased by approximately **150%** year-on-year, with the Group actively seeking project opportunities in Southeast Asia and Belt and Road countries[50](index=50&type=chunk) - Revenue from the environmental dredging and water management business segment increased by approximately **455%** year-on-year, but its development in the second half remains relatively unstable[50](index=50&type=chunk) - The other marine business segment faced contraction due to intense market competition, with revenue decreasing from approximately **RMB 152,100 thousand** to approximately **RMB 125,000 thousand**[50](index=50&type=chunk) - The property management business suspended all leasing activities to reduce operating costs, with future plans dependent on market trends[51](index=51&type=chunk) [Infrastructure and Reclamation Dredging Business](index=20&type=section&id=3.2.1%20Infrastructure%20and%20Reclamation%20Dredging%20Business) Despite challenges, this business segment's revenue increased by approximately 150% year-on-year, primarily due to an increase in contracted projects, with the Group actively seeking opportunities in Southeast Asia and Belt and Road countries - During the reporting period, revenue from the infrastructure and reclamation dredging business segment increased by approximately **150%**, mainly due to an increase in contracted projects[50](index=50&type=chunk)[52](index=52&type=chunk) - The Group is committed to seeking dredging project opportunities in Southeast Asia and Belt and Road countries to enhance future performance[50](index=50&type=chunk) [Environmental Dredging and Water Management Business](index=20&type=section&id=3.2.2%20Environmental%20Dredging%20and%20Water%20Management%20Business) This business segment's revenue significantly increased by approximately 455% year-on-year, primarily due to an increase in contracted projects, though its development in the second half remains relatively unstable - During the reporting period, revenue from the environmental dredging and water management business segment increased by approximately **455%**, mainly due to an increase in contracted projects[50](index=50&type=chunk)[52](index=52&type=chunk) - The development of this segment in the second half remains relatively unstable[50](index=50&type=chunk) [Other Marine Business](index=20&type=section&id=3.2.3%20Other%20Marine%20Business) This business segment faced contraction due to intense market competition, with revenue decreasing by 18% from approximately RMB 152,100 thousand to RMB 125,000 thousand year-on-year - The other marine business segment contracted due to intense market competition, with revenue decreasing by **18%** year-on-year[50](index=50&type=chunk)[52](index=52&type=chunk) [Property Management Business](index=21&type=section&id=3.2.4%20Property%20Management%20Business) Affected by a sharp decline in the domestic property market, the Group suspended all leasing activities to reduce operating costs, generating no revenue during the reporting period, with future plans dependent on market trends - The property management business suspended all leasing activities to reduce operating costs due to the domestic property market downturn, resulting in **no revenue** during the reporting period[51](index=51&type=chunk)[52](index=52&type=chunk) [Financial Review](index=21&type=section&id=3.3%20Financial%20Review) The Group's revenue decreased by 11.2% to RMB 145,800 thousand, but gross profit increased by 37% to RMB 25,800 thousand, raising the overall gross margin to 17.7%; administrative expenses and finance costs decreased, while income tax expense increased, leading to a significantly narrowed loss for the period - During the reporting period, the Group's revenue was approximately **RMB 145,800 thousand**, a **11.2% decrease** year-on-year[52](index=52&type=chunk) - Gross profit increased by **37%** to approximately **RMB 25,800 thousand**, with the overall gross margin rising from 11.4% to **17.7%**[53](index=53&type=chunk) - Loss for the period was approximately **RMB 9,500 thousand**, significantly narrowing from a loss of RMB 19,500 thousand in the prior period[60](index=60&type=chunk) [Revenue](index=21&type=section&id=3.3.1%20Revenue) The Group's total revenue decreased by 11.2% year-on-year, with infrastructure and reclamation dredging and environmental dredging and water management revenues growing by 150% and 455% respectively, while other marine business revenue decreased by 18% and property management business generated no revenue Revenue Changes (For the six months ended June 30) | Business Segment | 2025 Revenue (RMB thousands) | 2024 Revenue (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Total Revenue | 145,800 | 164,100 | -11.2% | | Infrastructure and Reclamation Dredging Business | 19,300 | 7,700 | +150.0% | | Environmental Dredging and Water Management Business | 1,500 | 300 | +455.0% | | Other Marine Business | 125,000 | 152,100 | -18.0% | | Property Management Business | – | 4,000 | -100.0% | [Operating Costs and Gross Profit](index=22&type=section&id=3.3.2%20Operating%20Costs%20and%20Gross%20Profit) Operating costs decreased by 17.4% to RMB 120,000 thousand, and gross profit increased by 37% to RMB 25,800 thousand; infrastructure and reclamation dredging and environmental dredging and water management businesses still incurred gross losses, other marine business's gross margin declined, and property management turned from profit to loss, with the overall gross margin rising to 17.7% - Operating costs decreased by **17.4%** to approximately **RMB 120,000 thousand**[53](index=53&type=chunk) - Gross profit increased by **37%** to approximately **RMB 25,800 thousand**, with the overall gross margin rising from 11.4% to **17.7%**[53](index=53&type=chunk) - Infrastructure and reclamation dredging and environmental dredging and water management businesses recorded gross losses, mainly because revenue was insufficient to cover fixed expenses and depreciation[53](index=53&type=chunk) - The gross margin of the other marine business segment decreased from 34.1% to **26.6%**, primarily due to a decline in revenue[53](index=53&type=chunk) - The property management business segment's gross profit turned from a profit to a **loss of approximately RMB 800 thousand**[53](index=53&type=chunk) [Other Income](index=22&type=section&id=3.3.3%20Other%20Income) Other income decreased by 71.1% from approximately RMB 5,500 thousand in the prior period to approximately RMB 1,600 thousand in the reporting period, mainly due to a reduction in sundry income Other Income Changes (For the six months ended June 30) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Other income | 1,600 | 5,500 | -71.1% | - The decrease in other income was primarily due to a reduction in sundry income[54](index=54&type=chunk) [Net Other Gains](index=22&type=section&id=3.3.4%20Net%20Other%20Gains) Net other gains increased from approximately RMB 500 thousand in the prior period to approximately RMB 1,700 thousand in the reporting period, primarily due to gains from the disposal of a subsidiary Net Other Gains Changes (For the six months ended June 30) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Net Other Gains | 1,700 | 500 | +240.0% | - The increase in net other gains was primarily due to gains from the disposal of a subsidiary recorded during the reporting period[55](index=55&type=chunk) [Marketing and Promotion Expenses](index=23&type=section&id=3.3.5%20Marketing%20and%20Promotion%20Expenses) No marketing and promotion expenses were incurred during the reporting period - No marketing and promotion expenses were incurred during the reporting period[56](index=56&type=chunk) [Administrative Expenses](index=23&type=section&id=3.3.6%20Administrative%20Expenses) Administrative expenses decreased by 23.4% year-on-year to approximately RMB 21,100 thousand, primarily due to a reduction in depreciation Administrative Expenses Changes (For the six months ended June 30) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Administrative expenses | 21,100 | 27,600 | -23.4% | - The decrease in administrative expenses was primarily due to a reduction in depreciation[57](index=57&type=chunk) [Finance Costs](index=23&type=section&id=3.3.7%20Finance%20Costs) Finance costs decreased by 20% year-on-year to approximately RMB 9,600 thousand Finance Costs Changes (For the six months ended June 30) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Finance costs | 9,600 | 12,000 | -20.0% | [Income Tax Expense](index=23&type=section&id=3.3.8%20Income%20Tax%20Expense) Income tax expense increased by 71.7% from approximately RMB 4,600 thousand in the prior period to approximately RMB 7,900 thousand in the reporting period Income Tax Expense Changes (For the six months ended June 30) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Income tax expense | 7,900 | 4,600 | +71.7% | [Loss for the Period](index=23&type=section&id=3.3.9%20Loss%20for%20the%20Period) Considering the above factors, the loss for the reporting period significantly narrowed to approximately RMB 9,500 thousand, compared to a loss of approximately RMB 19,500 thousand in the prior period Loss for the Period Changes (For the six months ended June 30) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Loss for the period | (9,500) | (19,500) | +51.3% | [Loss Per Share](index=23&type=section&id=3.3.10%20Loss%20Per%20Share) Loss per share for the reporting period narrowed to approximately RMB 1.4 cents, compared to approximately RMB 2.1 cents in the prior period Loss Per Share Changes (For the six months ended June 30) | Item | 2025 (RMB cents) | 2024 (RMB cents) | Change (%) | | :--- | :--- | :--- | :--- | | Loss per share | (1.4) | (2.1) | +33.3% | [Financial Position](index=23&type=section&id=3.4%20Financial%20Position) As of June 30, 2025, the Group's total equity was approximately RMB 289,600 thousand, with net current liabilities of approximately RMB 457,900 thousand and a current ratio of 0.41, indicating liquidity pressure Summary of Financial Position (As of June 30) | Metric | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Total Equity | 289,600 | 307,000 | -5.7% | | Net Current Liabilities | (457,900) | (459,400) | -0.3% | | Current Ratio | 0.41 | 0.44 | -6.8% | [Liquidity and Financial Resources](index=24&type=section&id=3.5%20Liquidity%20and%20Financial%20Resources) The Group maintains prudent cash and financial management with centralized treasury activities; as of June 30, 2025, bank balances and cash significantly decreased to RMB 13,000 thousand, while total liabilities decreased by approximately 6% and the gearing ratio fell to 107.5%, mainly due to loan repayments - The Group adopts prudent cash and financial management policies with centralized treasury activities, and cash is primarily denominated in RMB and HKD[63](index=63&type=chunk) Liquidity and Financial Resources (As of June 30) | Metric | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Bank balances and cash | 13,000 | 48,900 | -73.4% | | Trade receivables | 187,800 | 191,800 | -2.1% | | Total Liabilities | 937,700 | 997,500 | -6.0% | | Gearing Ratio | 107.5% | 108.4% | -0.9% | - The decrease in the gearing ratio was primarily due to the repayment of bank and other borrowings during the reporting period[63](index=63&type=chunk) [Capital Structure](index=24&type=section&id=3.6%20Capital%20Structure) The Group's capital structure comprises debt and equity reserves attributable to owners of the Company; the Board reviews the capital structure semi-annually and has completed a capital reorganization involving capital reduction and share subdivision to offset accumulated losses - The Group's capital structure consists of debt (including amounts due to non-controlling interests, bank borrowings, and other borrowings) and equity reserves attributable to owners of the Company[64](index=64&type=chunk) - The Board reviews the capital structure semi-annually and has completed a capital reorganization, involving capital reduction and share subdivision, aimed at offsetting accumulated losses[64](index=64&type=chunk)[65](index=65&type=chunk)[67](index=67&type=chunk) - The credit amount of **HKD 270,698,670** arising from the capital reduction will be used to offset the Company's accumulated losses[67](index=67&type=chunk) [Risk Management Policies](index=25&type=section&id=3.7%20Risk%20Management%20Policies) The Group faces market risks, such as currency and interest rate risks, and aims to minimize their adverse effects, having recognized exchange gains of approximately RMB 500 thousand during the period; it does not enter into interest rate hedging contracts but closely monitors interest rate risk - The Group faces market risks, such as currency risk and interest rate risk, and aims to minimize their adverse effects[66](index=66&type=chunk) - Exchange gains of approximately **RMB 500 thousand** were recognized during the reporting period (compared to a loss of approximately RMB 500 thousand in the prior period)[66](index=66&type=chunk) - The Group has not entered into interest rate hedging contracts but continuously monitors interest rate risk closely[66](index=66&type=chunk) [Pledge of Group Assets](index=26&type=section&id=3.8%20Pledge%20of%20Group%20Assets) As of June 30, 2025, the Group's bank borrowings are secured by dredgers, land, properties beneficially owned by Mr. Liu Kaijin, and personal guarantees from Mr. Liu Kaijin and Ms. Zhou Shuhua - Bank borrowings are secured by the Group's dredgers and land, properties beneficially owned by Mr. Liu Kaijin, and personal guarantees from Mr. Liu Kaijin and Ms. Zhou Shuhua[68](index=68&type=chunk) - Intra-group pledges arise from contractual arrangements between two wholly-owned subsidiaries[68](index=68&type=chunk) [Significant Acquisitions and Disposals](index=26&type=section&id=3.9%20Significant%20Acquisitions%20and%20Disposals) During the reporting period, the Group had no significant acquisitions or disposals of subsidiaries, associates, and joint ventures, nor any definite plans for major investments or capital assets - During the reporting period, the Group had no significant acquisitions or disposals of subsidiaries, associates, and joint ventures[69](index=69&type=chunk) - The Group has no definite plans for major investments or capital assets[69](index=69&type=chunk) [Capital Commitments and Contingent Liabilities](index=26&type=section&id=3.10%20Capital%20Commitments%20and%20Contingent%20Liabilities) As of June 30, 2025, the Group's capital commitments were approximately RMB 73,600 thousand, primarily for hotel construction costs, with no significant contingent liabilities during the reporting period Capital Commitments and Contingent Liabilities (As of June 30) | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Capital commitments | 73,600 | 73,600 | 0.0% | | Contingent liabilities | None | None | 0.0% | - Capital commitments primarily include hotel construction costs[70](index=70&type=chunk) [Employees and Remuneration Policies](index=26&type=section&id=3.11%20Employees%20and%20Remuneration%20Policies) As of June 30, 2025, the Group had 393 employees, with total staff costs of approximately RMB 30,300 thousand, an increase of RMB 4,400 thousand year-on-year, mainly due to increased contributions to social insurance and retirement benefit schemes, and remuneration policies are based on employee performance and market conditions Employee and Remuneration Information (As of June 30) | Metric | June 30, 2025 | December 31, 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Number of Employees | 393 | 415 | -5.4% | | Total Staff Costs (RMB thousands) | 30,300 | 25,900 | +17.0% | - The increase in staff costs was primarily due to increased contributions to staff social insurance and retirement benefit schemes[71](index=71&type=chunk) - Remuneration policies are determined by the Board based on individual performance and market conditions, including salaries, discretionary bonuses, pension contributions, and share options[71](index=71&type=chunk) [Future Outlook](index=27&type=section&id=3.12%20Future%20Outlook) The Group will continue to implement cost control, stable operations, and risk reduction strategies, optimizing its operational footprint and enhancing risk management capabilities, having temporarily ceased environmental new energy and digital business operations, while actively seeking high-growth opportunities and robust financial solutions to support business development - The Group will continue to adopt strategies of cost control, stable operations, and risk reduction, committed to maintaining consistency in construction projects, streamlining operations, and strengthening management[72](index=72&type=chunk) - It has been decided to temporarily cease operations related to environmental new energy and digital business opportunities, though these may be revisited when market conditions are favorable in the future[72](index=72&type=chunk) - The Group will continue to actively seek high-growth opportunities, diversify revenue streams, and proactively identify and implement robust and feasible financial solutions to strengthen its capital structure[72](index=72&type=chunk) - During the reporting period, several infrastructure and reclamation dredging and environmental dredging and water management business projects made progress compared to the prior period[72](index=72&type=chunk) [Interim Dividend](index=27&type=section&id=3.13%20Interim%20Dividend) The Board has decided not to pay any dividends for the reporting period - The Board has decided not to pay any dividends for the reporting period[73](index=73&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=27&type=section&id=3.14%20Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company%27s%20Listed%20Securities) During the reporting period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities - During the reporting period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[74](index=74&type=chunk) [Part IV. Other Information](index=28&type=section&id=IV.%20Other%20Information) This section covers corporate governance, audit committee review, publication of results, and board composition [Compliance with Corporate Governance Code](index=28&type=section&id=4.1%20Compliance%20with%20Corporate%20Governance%20Code) The Company is committed to high standards of corporate governance, having complied with all code provisions of the Corporate Governance Code in Appendix C1 of the Listing Rules throughout the reporting period without deviation - The Company is committed to high standards of corporate governance, having complied with all code provisions of the Corporate Governance Code set out in Appendix C1 of the Listing Rules throughout the reporting period, with no deviations[75](index=75&type=chunk) [Audit Committee and Review of Unaudited Financial Statements](index=28&type=section&id=4.2%20Audit%20Committee%20and%20Review%20of%20Unaudited%20Financial%20Statements) The Board's Audit Committee, comprising three independent non-executive directors, has reviewed the Group's adopted accounting principles and practices, financial reporting matters, including the unaudited consolidated results for the reporting period, with management - The Audit Committee, composed of three independent non-executive directors, has reviewed the Group's accounting principles, practices, and financial reporting matters, including the unaudited consolidated results[76](index=76&type=chunk) [Publication of Interim Results and Interim Report](index=28&type=section&id=4.3%20Publication%20of%20Interim%20Results%20and%20Interim%20Report) This interim results announcement has been published on the Company's and HKEX websites, and the interim report containing all information required by Appendix D2 of the Listing Rules will be dispatched to shareholders and available online in due course - This interim results announcement has been published on the Company's website (www.cdep.com.hk) and the HKEX website (www.hkexnews.hk)[77](index=77&type=chunk) - The interim report, containing all information required by Appendix D2 of the Listing Rules, will be dispatched to shareholders and made available on the website in due course[77](index=77&type=chunk) [Board of Directors](index=28&type=section&id=4.4%20Board%20of%20Directors) As of the announcement date, the Board of Directors includes Ms. Zhou Shuhua (Chairperson and Executive Director), Mr. Wu Xize (Executive Director and CEO), Mr. Zhang Chunxi and Mr. Wang Jianhua (Executive Directors), and Mr. Huan Xuedong, Mr. Chan Ming Sum, and Mr. Leung Chak Chuen (Independent Non-executive Directors) - The Board of Directors includes Ms. Zhou Shuhua (Chairperson and Executive Director), Mr. Wu Xize (Executive Director and Chief Executive Officer), Mr. Zhang Chunxi, and Mr. Wang Jianhua (Executive Directors)[79](index=79&type=chunk) - Independent non-executive directors include Mr. Huan Xuedong, Mr. Chan Ming Sum, and Mr. Leung Chak Chuen[79](index=79&type=chunk)

[Company Overview](index=1&type=section&id=%E5%85%AC%E5%8F%B8%E6%A6%82%E8%A7%88) This section provides an overview of the company's interim results, business scope, and financial statement preparation basis [Report Introduction](index=1&type=section&id=%E5%A0%B1%E5%91%8A%E4%BB%8B%E7%B4%B9) This announcement discloses the unaudited condensed consolidated interim results of Golden Solar New Energy Technology Holdings Limited for the six months ended June 30, 2025, with comparative data for 2024 - This release presents the unaudited condensed consolidated interim results of Golden Solar New Energy Technology Holdings Limited for the six months ended June 30, 2025[2](index=2&type=chunk)[3](index=3&type=chunk) - The condensed consolidated interim results have been reviewed by the company's audit committee without objection[4](index=4&type=chunk) [Company Information](index=6&type=section&id=%E5%85%AC%E5%8F%B8%E5%9F%BA%E6%9C%AC%E8%B3%87%E6%96%99) Golden Solar New Energy Technology Holdings Limited is an investment holding company listed on the HKEX, primarily engaged in manufacturing and selling footwear, graphene, and photovoltaic products - The company's principal business is investment holding, engaged in the production and sale of various products, including Baoren brand products, graphene products, OEM products, and photovoltaic products[10](index=10&type=chunk) - The ultimate controlling shareholder of the company is Mr. Qiu Xinwang[11](index=11&type=chunk) [Basis of Preparation](index=6&type=section&id=%E7%B7%A8%E8%A3%BD%E5%9F%BA%E6%BA%96) Interim financial statements are prepared under IAS 34 and HKEX Listing Rules, applying consistent accounting policies, with no material impact from the new IAS 21 amendment - The interim financial statements are prepared in accordance with International Accounting Standard 34 and Appendix D2 of the HKEX Listing Rules[12](index=12&type=chunk) - The first-time application of International Accounting Standard 21 (Amendment) "Lack of Exchangeability" had no material impact on the financial performance and position for the current period[13](index=13&type=chunk)[14](index=14&type=chunk) [Condensed Consolidated Financial Statements](index=2&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8) This section presents the group's condensed consolidated financial statements, including statements of profit or loss, financial position, and changes in equity [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=2&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E6%90%8D%E7%9B%8A%E5%8F%8A%E5%85%B6%E4%BB%96%E5%85%A8%E9%9D%A2%E6%94%B6%E7%9B%8A%E8%A1%A8) Group revenue for the six months ended June 30, 2025, significantly decreased by 50.5% to RMB 63,084 thousand, resulting in a gross loss Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income Key Data | Indicator | June 30, 2025 (RMB thousands) | June 30, 2024 (RMB thousands) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 63,084 | 127,481 | -50.5% | | Gross (Loss)/Profit | (3,612) | 13,267 | -127.2% | | Loss Before Tax | (159,169) | (157,845) | +0.8% | | Loss and Total Comprehensive Expense for the Period | (159,336) | (158,184) | +0.7% | | Basic Loss Per Share | (0.088) | (0.087) | +1.1% | [Condensed Consolidated Statement of Financial Position](index=3&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81%E8%A1%A8) As of June 30, 2025, the group's net assets decreased by 22.6% to RMB 295,989 thousand, shifting to a net current liability position Condensed Consolidated Statement of Financial Position Key Data | Indicator | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Non-current Assets | 380,657 | 327,292 | +16.3% | | Current Assets | 278,818 | 368,889 | -24.4% | | Current Liabilities | 336,291 | 277,644 | +21.1% | | Net Current (Liabilities)/Assets | (57,473) | 91,245 | -163.0% | | Net Assets | 295,989 | 382,386 | -22.6% | [Condensed Consolidated Statement of Changes in Equity](index=5&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) Group equity decreased from RMB 382,386 thousand to RMB 295,989 thousand, mainly due to the period's loss, partially offset by share-based payments Condensed Consolidated Statement of Changes in Equity Key Data | Indicator | January 1, 2025 (RMB thousands) | June 30, 2025 (RMB thousands) | Change (RMB thousands) | | :--- | :--- | :--- | :--- | | Total Equity | 382,386 | 295,989 | (86,397) | | Loss and Total Comprehensive Expense for the Period | - | (159,336) | (159,336) | | Equity-settled Share-based Payments | - | 72,933 | 72,933 | [Notes to the Financial Statements](index=7&type=section&id=%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8%E9%99%84%E8%A8%BB) This section provides detailed notes to the financial statements, covering segment information, revenue, expenses, and financial position items [Segment Information](index=7&type=section&id=%E5%88%86%E9%83%A8%E8%B3%87%E6%96%99) The group's business is segmented into Baoren brand, Graphene, OEM, and Photovoltaic products, with significant revenue declines in OEM and Photovoltaic segments - The group is divided into four reportable operating segments: Baoren brand products, Graphene products, OEM, and Photovoltaic products[15](index=15&type=chunk) [Segment Revenue and Results](index=8&type=section&id=%E5%88%86%E9%83%A8%E6%94%B6%E7%9B%8A%E8%88%87%E6%A5%AD%E7%B8%BE) For the six months ended June 30, 2025, OEM and Photovoltaic segment revenues significantly decreased by 48.9% and 77.8% respectively Segment Revenue and Results (For the six months ended June 30, 2025) | Segment | Revenue (RMB thousands) | Results (RMB thousands) | | :--- | :--- | :--- | | Baoren Brand Products | 1,818 | (846) | | Graphene Products | 1,764 | 392 | | OEM | 56,833 | (6,510) | | Photovoltaic Products | 2,669 | (43,876) | | **Total** | **63,084** | **(50,840)** | Segment Revenue and Results (For the six months ended June 30, 2024) | Segment | Revenue (RMB thousands) | Results (RMB thousands) | | :--- | :--- | :--- | | Baoren Brand Products | 1,997 | (421) | | Graphene Products | 2,288 | 221 | | OEM | 111,172 | 14,019 | | Photovoltaic Products | 12,024 | (63,726) | | **Total** | **127,481** | **(49,907)** | [Segment Assets and Liabilities](index=9&type=section&id=%E5%88%86%E9%83%A8%E8%B3%87%E7%94%A2%E8%88%87%E8%B2%A0%E5%82%B5) As of June 30, 2025, total group assets were RMB 498,410 thousand and liabilities RMB 99,271 thousand, with Photovoltaic holding the largest segment share Segment Assets and Liabilities (As of June 30, 2025) | Segment | Assets (RMB thousands) | Liabilities (RMB thousands) | | :--- | :--- | :--- | | Baoren Brand Products | 3,251 | 1,288 | | Graphene Products | 8,222 | 3,931 | | OEM | 101,596 | 40,253 | | Photovoltaic Products | 385,341 | 53,799 | | **Total** | **498,410** | **99,271** | Segment Assets and Liabilities (As of December 31, 2024) | Segment | Assets (RMB thousands) | Liabilities (RMB thousands) | | :--- | :--- | :--- | | Baoren Brand Products | 3,268 | 1,258 | | Graphene Products | 9,907 | 4,514 | | OEM | 165,110 | 63,537 | | Photovoltaic Products | 418,193 | 75,317 | | **Total** | **596,478** | **144,626** | [Geographical Information](index=10&type=section&id=%E5%9C%B0%E5%8D%80%E8%B3%87%E6%96%99) Revenue from the United States significantly decreased to RMB 51,122 thousand, while China remains the primary operating location for non-current assets Revenue from External Customers (By Geographical Region) | Region | June 30, 2025 (RMB thousands) | June 30, 2024 (RMB thousands) | YoY Change (%) | | :--- | :--- | :--- | :--- | | China | 8,083 | 8,099 | -0.2% | | United States | 51,122 | 102,866 | -50.3% | | Europe | 1,193 | 6,760 | -82.4% | | Southeast Asia | 161 | 1,331 | -87.9% | | **Total** | **63,084** | **127,481** | **-50.5%** | - As of June 30, 2025, the group's non-current assets are primarily located in China (RMB 380,649 thousand)[21](index=21&type=chunk) [Major Customer Information](index=11&type=section&id=%E4%B8%BB%E8%A6%81%E5%AE%A2%E6%88%B6%E8%B3%87%E6%96%99) Major customers A and B, both in the OEM segment, experienced significant revenue declines, though they remain key contributors to total sales Major Customer Revenue Contribution | Customer | June 30, 2025 (RMB thousands) | June 30, 2024 (RMB thousands) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Customer A | 28,767 | 58,873 | -51.1% | | Customer B | 18,856 | 44,087 | -57.3% | - Major customers A and B are both included in the OEM segment[22](index=22&type=chunk) [Revenue, Other Income and Gains, Net](index=11&type=section&id=%E6%94%B6%E7%9B%8A%E3%80%81%E5%85%B6%E4%BB%96%E6%94%B6%E5%85%A5%E5%8F%8A%E6%94%B6%E7%9B%8A%E6%B7%A8%E9%A1%8D) Total group revenue was RMB 63,084 thousand, with other income and gains decreasing to RMB 7,323 thousand, primarily due to lower interest and exchange gains Other Income and Gains, Net Analysis | Item | June 30, 2025 (RMB thousands) | June 30, 2024 (RMB thousands) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Interest Income | 263 | 708 | -62.9% | | Sale of Scraps | 62 | 118 | -47.5% | | Rental Income from Investment Properties | 2,332 | 2,401 | -2.9% | | Government Grants | 3,339 | 1,795 | +85.0% | | Net Exchange Gains | 693 | 2,985 | -76.8% | | **Total** | **7,323** | **8,407** | **-12.9%** | [Finance Costs](index=12&type=section&id=%E8%9E%8D%E8%B3%87%E6%88%90%E6%9C%AC) Finance costs increased to RMB 4,745 thousand for the six months ended June 30, 2025, primarily driven by interest on bank and other borrowings Finance Costs Composition | Item | June 30, 2025 (RMB thousands) | June 30, 2024 (RMB thousands) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Interest on Bank and Other Borrowings | 3,040 | 2,085 | +45.8% | | Interest on Lease Liabilities | 1,237 | 1,791 | -30.9% | | Imputed Interest on Deferred Rental Income | 468 | 353 | +32.6% | | **Total** | **4,745** | **4,229** | **+12.2%** | [Loss Before Tax](index=13&type=section&id=%E9%99%A4%E7%A8%85%E5%89%8D%E虧%E6%90%8D) Loss before tax was RMB 159,169 thousand, driven by costs of inventories sold, depreciation, and employee benefits, including share-based payments Loss Before Tax Key Components | Item | June 30, 2025 (RMB thousands) | June 30, 2024 (RMB thousands) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Cost of Inventories Sold | 66,696 | 114,214 | -41.6% | | Depreciation of Property, Plant and Equipment | 10,734 | 9,526 | +12.7% | | Depreciation of Right-of-use Assets | 12,440 | 11,841 | +5.1% | | Total Employee Benefit Expenses | 133,005 | 143,497 | -7.3% | | Of which: Equity-settled Share-based Payments | 72,933 | 80,218 | -9.0% | | Impairment Loss on Intangible Assets | 691 | 281 | +146.0% | [Income Tax Expense](index=14&type=section&id=%E6%89%80%E5%BE%97%E7%A8%85%E9%96%8B%E6%94%AF) Income tax expense decreased to RMB 167 thousand, primarily due to the impact of deferred tax Income Tax Expense Analysis | Item | June 30, 2025 (RMB thousands) | June 30, 2024 (RMB thousands) | YoY Change (%) | | :--- | :--- | :--- | :--- | | PRC Enterprise Income Tax (Current Period) | 178 | 1,017 | -82.5% | | Under-provision in Prior Years | 60 | 83 | -27.8% | | Deferred Tax | (71) | (761) | -90.7% | | **Total Tax Expense for the Period** | **167** | **339** | **-50.7%** | [Dividends](index=14&type=section&id=%E8%82%A1%E6%81%AF) The Board did not recommend any interim dividends for the periods ended June 30, 2025, and 2024 - The company did not recommend any interim dividends for the periods ended June 30, 2025, and 2024[28](index=28&type=chunk) [Loss Per Share](index=14&type=section&id=%E6%AF%8F%E8%82%A1%E虧%E6%90%8D) Basic loss per share was RMB 0.088, slightly higher than prior period, with diluted loss per share not calculated due to anti-dilutive effect Loss Per Share Data | Indicator | June 30, 2025 (RMB) | June 30, 2024 (RMB) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Basic Loss Per Share | (0.088) | (0.087) | +1.1% | | Weighted Average Number of Shares in Issue | 1,813,269,608 | 1,814,277,795 | -0.06% | - Diluted loss per share was not calculated as the exercise of share options would result in a decrease in loss per share, thus considered anti-dilutive[29](index=29&type=chunk) [Investment Properties](index=15&type=section&id=%E6%8A%95%E8%B3%87%E7%89%A9%E6%A5%AD) The fair value of investment properties was RMB 66,017 thousand, slightly down due to fair value losses, with some leased land pledged as collateral for bank financing Investment Properties Fair Value | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | Change (RMB thousands) | | :--- | :--- | :--- | :--- | | Fair Value of Investment Properties | 66,017 | 66,421 | (404) | - As of June 30, 2025, leased land within investment properties with a value of approximately **RMB 35,443 thousand** was pledged as collateral for the group's bank financing[31](index=31&type=chunk) [Interests in an Associate](index=15&type=section&id=%E6%96%BC%E8%81%AF%E7%87%9F%E5%85%AC%E5%8F%B8%E4%B9%8B%E6%AC%8A%E7%9B%8A) The group invested RMB 71,000 thousand in associate Jinlong for production line upgrades, acquiring a 27.31% equity interest via a non-related party loan - The group's indirect wholly-owned subsidiary, Jinyang (Quanzhou), invested **RMB 71,000 thousand** in the joint venture Jinlong, acquiring a **27.31% equity interest** for production line upgrades[32](index=32&type=chunk)[34](index=34&type=chunk) - This cash contribution was funded by a **RMB 71,000 thousand** loan obtained from a non-related party company[33](index=33&type=chunk) [Trade and Bills Receivables](index=16&type=section&id=%E6%87%89%E6%94%B6%E8%B2%BF%E6%98%93%E8%B3%B4%E6%AC%BE%E5%8F%8A%E6%87%89%E6%94%B6%E7%A5%A8%E6%93%9A) Trade and bills receivables significantly decreased to RMB 63,855 thousand, primarily from reduced short-term receivables Trade and Bills Receivables Aging Analysis | Aging | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | Change (RMB thousands) | | :--- | :--- | :--- | :--- | | Within 3 months | 30,180 | 89,043 | (58,863) | | 4 to 6 months | 17,596 | 25,894 | (8,298) | | Over 6 months | 16,079 | 29,358 | (13,279) | | **Total** | **63,855** | **144,295** | **(80,440)** | - The group generally grants credit periods of one to three months to its customers[35](index=35&type=chunk) [Trade Payables](index=17&type=section&id=%E6%87%89%E4%BB%98%E8%B2%BF%E6%98%93%E8%B3%B4%E6%AC%BE) Trade payables decreased to RMB 42,460 thousand, mainly due to a reduction in payables within three months Trade Payables Aging Analysis | Aging | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | Change (RMB thousands) | | :--- | :--- | :--- | :--- | | Within 3 months | 23,945 | 60,409 | (36,464) | | Over 3 months | 18,515 | 11,481 | 7,034 | | **Total** | **42,460** | **71,890** | **(29,430)** | - Trade payables are non-interest bearing and generally repayable within six months[36](index=36&type=chunk) [Borrowings](index=17&type=section&id=%E5%80%9F%E8%B2%B8) Total borrowings increased to RMB 176,381 thousand, largely due to a new RMB 71,000 thousand unsecured loan for associate Jinlong investment Borrowings Composition | Borrowing Type | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | Change (RMB thousands) | | :--- | :--- | :--- | :--- | | Secured Bank Loans Repayable Within One Year | 100,200 | 100,200 | 0 | | Unsecured Loans Repayable Within One Year | 71,000 | – | 71,000 | | Unsecured Loans Repayable After One Year | 5,181 | – | 5,181 | | **Total** | **176,381** | **100,200** | **76,181** | - Borrowing interest rates range from **3.00% to 8.00%** per annum[38](index=38&type=chunk) - The new **RMB 71,000 thousand** unsecured loan was obtained for the cash contribution to associate Jinlong[39](index=39&type=chunk) [Share Capital](index=18&type=section&id=%E8%82%A1%E6%9C%AC) As of June 30, 2025, the company's issued and fully paid share capital was RMB 120,790 thousand, comprising 1,813,269,608 ordinary shares Share Capital Details | Item | June 30, 2025 (Number of Shares) | June 30, 2025 (RMB thousands) | | :--- | :--- | :--- | | Number of Authorized Ordinary Shares | 5,000,000,000 | 342,400 | | Number of Issued and Fully Paid Ordinary Shares | 1,813,269,608 | 120,790 | - No shares were issued, repurchased, or cancelled by the company during the period[40](index=40&type=chunk) [Business Review and Future Outlook](index=20&type=section&id=%E6%A5%AD%E5%8B%99%E5%9B%9E%E9%A1%A7%E8%88%87%E6%9C%AA%E4%BE%86%E5%B1%95%E6%9C%9B) This section reviews the group's financial performance, product category revenue, operating expenses, liquidity, and outlines future strategies [Overall Financial Performance Review](index=20&type=section&id=%E6%95%B4%E9%AB%94%E8%B2%A1%E5%8B%99%E8%A1%A8%E7%8F%BE%E5%9B%9E%E9%A1%A7) Group revenue decreased by 50.5% to RMB 63.1 million, resulting in a gross loss, while net loss slightly increased to RMB 159.3 million, mainly from non-cash share-based payments - Revenue for the period decreased by approximately **RMB 64.4 million** or **50.5%** to approximately **RMB 63.1 million**, primarily due to a decrease in OEM business revenue[41](index=41&type=chunk) - The group recorded a gross loss of approximately **RMB 3.6 million** for the period, with a gross loss margin of approximately **5.7%**, compared to a gross profit margin of approximately 10.4% in the prior period[41](index=41&type=chunk) - Net loss was approximately **RMB 159.3 million**, mainly attributable to equity-settled share-based payments of approximately **RMB 72.9 million** (a non-cash item)[42](index=42&type=chunk) [Revenue by Product Category](index=21&type=section&id=%E6%8C%89%E7%94%A2%E5%93%81%E9%A1%9E%E5%88%A5%E5%88%86%E9%A1%9E%E7%9A%84%E6%94%B6%E7%9B%8A) All product categories experienced revenue declines, with Photovoltaic and OEM businesses showing the most significant decreases Revenue by Product Category Change | Product Category | June 30, 2025 (RMB thousands) | June 30, 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Baoren Brand Products | 1,818 | 1,997 | (9.0%) | | Graphene Products | 1,764 | 2,288 | (22.9%) | | OEM Business | 56,833 | 111,172 | (48.9%) | | Photovoltaic Products | 2,669 | 12,024 | (77.8%) | | **Total** | **63,084** | **127,481** | **(50.5%)** | [Baoren Brand Products](index=21&type=section&id=%E5%AF%B6%E4%BA%BA%E7%89%8C%E7%94%A2%E5%93%81) Baoren brand product revenue decreased by 9.0% to RMB 1.8 million, attributed to intensified domestic competition in China - Baoren brand product revenue decreased by **9.0%** to **RMB 1.8 million**, attributed to intensified domestic competition in China[44](index=44&type=chunk) [Graphene Products](index=21&type=section&id=%E7%9F%B3%E5%A2%A8%E7%83%AF%E7%94%A2%E5%93%81) Graphene product revenue decreased by 22.9% to RMB 1.8 million, primarily due to reduced sales of air conditioning system sterilization components - Graphene product revenue decreased by **22.9%** to **RMB 1.8 million**, primarily due to reduced sales of air conditioning system sterilization components[45](index=45&type=chunk) [OEM Business](index=21&type=section&id=OEM%E6%A5%AD%E5%8B%99) OEM business revenue significantly dropped by 48.9% to RMB 56.8 million, resulting in a gross loss due to US tariffs and competitive pricing - OEM business revenue decreased by **48.9%** to **RMB 56.8 million**, and recorded a gross loss, mainly affected by adjustments in US import tariff policies and intense price competition from Southeast Asian manufacturers[46](index=46&type=chunk) [Photovoltaic Products](index=22&type=section&id=%E5%85%89%E4%BC%8F%E7%94%A2%E5%93%81) Photovoltaic product revenue decreased by 77.8% to RMB 2.7 million, as the group transitions to flexible solar modules and high-efficiency HBC solar cell technology licensing - Photovoltaic product revenue decreased by **77.8%** to **RMB 2.7 million**, primarily due to the group's transition from traditional solar glass modules to flexible solar modules and high-efficiency HBC solar cell technology licensing business[47](index=47&type=chunk) - The HBC licensee's factory is still under construction, with future licensing revenue anticipated[47](index=47&type=chunk) [Operating Expense Analysis](index=22&type=section&id=%E7%B6%93%E7%87%9F%E9%96%8B%E6%94%AF%E5%88%86%E6%9E%90) Sales and distribution expenses, general and administrative expenses, and R&D costs all decreased, with the latter focusing on HBC solar cell technology cost reduction - Sales and distribution expenses decreased by **26.6%** to **RMB 10.0 million**, mainly due to reduced marketing and promotional activities in overseas markets[48](index=48&type=chunk) - General and administrative expenses decreased by **5.5%** to **RMB 117.4 million**, primarily due to a decrease of approximately **RMB 7.3 million** in equity-settled share-based payments[49](index=49&type=chunk) - Research and development costs decreased by approximately **RMB 2.9 million** to **RMB 29.9 million**, primarily focused on developing cost reduction solutions for HBC solar cell technology[50](index=50&type=chunk) [Liquidity and Capital Structure](index=23&type=section&id=%E6%B5%81%E5%8B%95%E6%80%A7%E8%88%87%E8%B3%87%E6%9C%AC%E6%9E%B6%E6%A7%8B) Net cash inflow from operating activities was RMB 9.2 million, but cash balances decreased by 25.7%, and total borrowings increased, raising the gearing ratio to 121.3% - Net cash inflow from operating activities for the period was approximately **RMB 9.2 million**[51](index=51&type=chunk) Cash and Bank Balances and Borrowings | Indicator | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Cash and Bank Balances | 23,700 | 31,900 | -25.7% | | Total Borrowings | 176,400 | 100,200 | +76.0% | | Gearing Ratio | 121.3% | 80.7% | +40.6 percentage points | - The increase in gearing ratio was primarily due to increased borrowings for the cash contribution to associate Jinlong[51](index=51&type=chunk) [Significant Investments and Asset Pledges](index=23&type=section&id=%E9%87%8D%E5%A4%A7%E6%8A%95%E8%B3%87%E8%88%87%E8%B3%87%E7%94%A2%E6%8A%B5%E6%8A%BC) The group invested 27.31% in associate Jinlong, with certain buildings, leased land, and investment properties pledged as collateral for bank borrowings - The group's indirect wholly-owned subsidiary, Quanzhou Jinyang, made a **27.31% equity investment** in associate Jinlong[53](index=53&type=chunk) - Approximately **RMB 2.1 million** in buildings, **RMB 3.5 million** in leased land within right-of-use assets, and **RMB 35.4 million** in leased land within investment properties were pledged as collateral for bank borrowings[54](index=54&type=chunk) [Use of Net Proceeds from 2022 Placing](index=24&type=section&id=%E4%BA%8C%E9%9B%B6%E4%BA%8C%E4%BA%8C%E5%B9%B4%E9%85%8D%E5%94%AE%E4%BA%8B%E9%A0%85%E6%89%80%E5%BE%97%E6%AC%BE%E9%A0%85%E6%B7%A8%E9%A1%8D%E7%94%A8%E9%80%94) Most of the RMB 407,291 thousand net proceeds from the 2022 placing have been utilized, with RMB 2,240 thousand remaining for flexible module raw materials Use of Net Proceeds from 2022 Placing | Intended Use | Net Proceeds (RMB thousands) | Unutilized Balance as of Jan 1, 2025 (RMB thousands) | Utilized as of June 30, 2025 (RMB thousands) | Unutilized Balance as of June 30, 2025 (RMB thousands) | | :--- | :--- | :--- | :--- | :--- | | Procurement costs and processing fees for raw materials for monocrystalline silicon wafers and solar modules | 156,952 | – | – | – | | Renovation of ingot furnaces | 61,358 | – | – | – | | Procurement of other peripheral production equipment | 49,086 | – | – | – | | Procurement of HBC solar cell and module and flexible module production equipment | 14,726 | – | – | – | | Procurement costs for raw materials for flexible modules | 2,454 | 2,401 | 161 | 2,240 | | Potential strategic equity investments | 40,905 | – | – | – | | General working capital | 81,810 | – | – | – | | **Total** | **407,291** | **2,401** | **161** | **2,240** | - The remaining unutilized net proceeds of **RMB 2,240 thousand** are expected to be used by December 31, 2025, or earlier[59](index=59&type=chunk) [Future Outlook and Strategies](index=25&type=section&id=%E6%9C%AA%E4%BE%86%E5%B1%95%E6%9C%9B%E8%88%87%E7%AD%96%E7%95%A5) The group anticipates OEM business recovery, transitions its photovoltaic business to flexible modules and HBC technology licensing, and is developing LMFP battery technology for a dual-engine new energy strategy - The OEM business is expected to recover in the second half of 2025 due to temporary reductions in US retaliatory tariffs[61](index=61&type=chunk) - The photovoltaic product business is transitioning to flexible solar modules and high-efficiency HBC solar cell technology licensing, with patent licensing agreements signed with two of the top three industry manufacturers[62](index=62&type=chunk) - Completed pilot and final testing of HBC-specific low-silver content silver-copper paste and complementary insulating ink, initiating mass production planning[63](index=63&type=chunk) - Flexible products successfully entered the supplier list of globally renowned RV and outdoor product providers, achieving comprehensive product development and cooperation[63](index=63&type=chunk) - Successfully developed **100% pure Lithium Manganese Iron Phosphate (LMFP)** battery technology and signed an industrialization cooperation agreement with a major automotive manufacturer[63](index=63&type=chunk) - The group will continue to invest resources in developing technologies with higher efficiency than HBC 27.5% cells and simpler production processes, leveraging technological advantages in energy storage to form a dual-engine new energy strategy of power generation and storage[64](index=64&type=chunk) [Other Information](index=24&type=section&id=%E5%85%B6%E4%BB%96%E8%B3%87%E6%96%99) This section covers contingent liabilities, foreign exchange risk, human resources, corporate governance, audit committee review, and post-reporting period events [Contingent Liabilities](index=24&type=section&id=%E6%88%96%E7%84%B6%E8%B2%A0%E5%82%B5) The group had no significant contingent liabilities as of June 30, 2025, and December 31, 2024 - The group had no significant contingent liabilities as of June 30, 2025, and December 31, 2024[55](index=55&type=chunk) [Foreign Exchange Risk](index=24&type=section&id=%E5%A4%96%E5%8C%AF%E9%A2%A8%E9%9A%AA) The group's revenue is primarily denominated in USD and RMB, while costs are mainly in RMB, with management monitoring and considering hedging foreign exchange risk - The group's revenue is primarily denominated in **USD** and **RMB**, while costs and expenses are mainly denominated in **RMB**[56](index=56&type=chunk) - Management monitors foreign exchange risk and will consider hedging significant foreign currency exposures when necessary[56](index=56&type=chunk) [Human Resources](index=24&type=section&id=%E4%BA%BA%E5%8A%9B%E8%B3%87%E6%BA%90) As of June 30, 2025, the group had approximately 1,130 employees with total staff costs of RMB 133.0 million, and a remuneration policy based on merit and a share option scheme Human Resources Overview | Indicator | June 30, 2025 | December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Number of Employees | 1,130 | 1,020 | +110 | | Total Staff Costs (RMB thousands) | 133,000 | 143,500 | -10,500 | - The remuneration policy is based on employee strengths, qualifications, and capabilities, with a share option scheme to incentivize directors and eligible employees[57](index=57&type=chunk) [Corporate Governance](index=27&type=section&id=%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB) The company's board and management are committed to good corporate governance, complying with the Corporate Governance Code and Standard Securities Trading Code - The company has complied with the provisions of the Corporate Governance Code set out in Appendix C1 Part 2 of the Listing Rules throughout the period[66](index=66&type=chunk) - All directors confirmed compliance with the Standard Securities Trading Code for directors as set out in Appendix C3 of the Listing Rules[67](index=67&type=chunk) [Audit Committee Review](index=28&type=section&id=%E5%AF%A9%E6%A0%B8%E5%A7%94%E5%93%A1%E6%9C%83%E5%AF%A9%E9%96%B1) The Audit Committee, comprising three independent non-executive directors, reviewed the unaudited interim financial statements without objection - The Audit Committee, comprising three independent non-executive directors, reviewed the unaudited interim financial statements without objection[68](index=68&type=chunk) [Events After the Reporting Period](index=28&type=section&id=%E5%AF%A9%E9%96%B1%E6%9C%9F%E9%96%93%E5%BE%8C%E9%87%8D%E5%A4%A7%E4%BA%8B%E9%A0%85) No significant events affecting the group have occurred since June 30, 2025, the end of the reporting period - No significant events affecting the group have occurred since June 30, 2025[70](index=70&type=chunk) [Board of Directors Information](index=28&type=section&id=%E8%91%A3%E4%BA%8B%E6%9C%83%E8%B3%87%E6%96%99) This announcement lists the Board of Directors as of the publication date, including executive, non-executive, and independent non-executive directors - As of the publication date, the Board of Directors includes executive directors Mr. Kang Zhuang and Mr. Zheng Jingdong, non-executive director Ms. Lin Weihuan, and independent non-executive directors Dr. Zhang Baoping, Mr. Chen Shaohua, and Professor Zhao Jinbao[71](index=71&type=chunk)

[Interim Results Summary](index=1&type=section&id=%E4%B8%AD%E6%9C%9F%E6%A5%AD%E7%B8%BE%E6%91%98%E8%A6%81) Medtide Pharmaceuticals (Zhejiang) Co., Ltd. announced its unaudited consolidated results for the six months ended June 30, 2025, showing significant growth in revenue, gross profit, profit before tax, and profit for the period Interim Results Summary for the Six Months Ended June 30, 2025 | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | Year-on-year Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 253,767 | 197,457 | 28.5% | | Gross Profit | 154,954 | 107,407 | 44.3% | | Gross Margin (%) | 61.1% | 54.4% | - | | Profit Before Tax | 115,677 | 58,512 | 97.7% | | Profit for the Period | 101,999 | 50,567 | 101.7% | | Net Margin (%) | 40.2% | 25.6% | - | [Management Discussion and Analysis](index=2&type=section&id=%E7%AE%A1%E7%90%86%E5%B1%A4%E8%A8%8E%E8%AB%96%E5%8F%8A%E5%88%86%E6%9E%90) This section provides an in-depth analysis of the company's operational performance, strategic initiatives, and financial results for the reporting period [Business Review](index=2&type=section&id=%E6%A5%AD%E5%8B%99%E5%9B%9E%E9%A1%A7) The company maintained business growth in H1 2025, successfully completed its global offering and listing, and expanded its global client relationships and service footprint, particularly in peptide and oligonucleotide CRDMO services [Key Operating Data](index=2&type=section&id=%E9%97%9C%E9%8D%B5%E9%81%8B%E7%87%9F%E6%95%B8%E6%93%9A) During the reporting period, the company maintained growth in the number of ongoing projects, particularly in CRO and CDMO (CMC development phase) projects, reflecting continuous business expansion Key Operating Data | Indicator | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Number of ongoing projects at beginning of period | 1,549 | 1,449 | | Number of new projects obtained during period | 4,674 | 4,353 | | Number of projects completed at end of period | 4,760 | 4,424 | | Number of ongoing projects at end of period | 1,463 | 1,378 | Breakdown of Ongoing Projects at Period End | Project Type | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | CRO | 1,125 | 1,046 | | CDMO (CMC Development Phase) | 325 | 319 | | CDMO (Commercial Manufacturing Phase) | 13 | 13 | | Total | 1,463 | 1,378 | - The company successfully completed its global offering, achieving a listing milestone in **June 2025**[8](index=8&type=chunk) - The company has established stable client relationships and a service footprint in over **50** countries, offering full-lifecycle solutions for peptide synthesis, development, and production[8](index=8&type=chunk) - As of June 30, 2025, full-time employees totaled **520**, a **14.5%** year-on-year increase, to meet growing demand[8](index=8&type=chunk) [Overall Performance of TIDES CRDMO](index=3&type=section&id=TIDES%20CRDMO%E6%95%B4%E9%AB%94%E8%A1%A8%E7%8F%BE) Guided by the 'Molecule-to-Market' strategy, the TIDES CRDMO business continued to grow, with significant increases in revenue, gross profit, and net profit, alongside a steady rise in adjusted net profit TIDES CRDMO Key Financial Indicators | Indicator | Six Months Ended June 30, 2025 (RMB millions) | Six Months Ended June 30, 2024 (RMB millions) | Growth Rate (%) | | :--- | :--- | :--- | :--- | | Revenue | 253.8 | 197.5 | 28.5% | | Gross Profit | 155.0 | 107.4 | 44.3% | | Net Profit | 102.0 | 50.6 | 101.7% | | Adjusted Net Profit (Non-IFRS) | 104.1 | 90.6 | 14.9% | - The number of ongoing CDMO projects increased from **332** as of June 30, 2024, to **338** as of June 30, 2025[13](index=13&type=chunk) [Service Scope and Market Positioning](index=4&type=section&id=%E6%9C%8D%E5%8B%99%E7%AF%84%E5%9C%8D%E8%88%87%E5%B8%82%E5%A0%B4%E5%AE%9A%E4%BD%8D) As a leading global peptide CRDMO, the company offers full-lifecycle services from early discovery to commercial production, primarily focusing on APIs rather than drug products, and strategically expanding into oligonucleotide CDMO services - The company provides CRO services (peptide NCE discovery synthesis) and CDMO services (peptide CMC development and commercial production), primarily offering APIs[14](index=14&type=chunk) - Stable client relationships have been established in over **50** countries, including China, the United States, Japan, Europe, South Korea, and Australia[14](index=14&type=chunk) - Strategically offering oligonucleotide CDMO services to clients, covering preclinical research, clinical development, and commercial production[17](index=17&type=chunk) [Technology Platforms](index=5&type=section&id=%E6%8A%80%E8%A1%93%E5%B9%B3%E5%8F%B0) The company has 61 R&D employees, with approximately 40% holding master's degrees or higher, focusing on strengthening advanced synthesis methods and proprietary technology platforms to maintain a competitive edge - The R&D department comprises **61** employees, with approximately **40%** holding master's degrees or higher[19](index=19&type=chunk) - The company masters advanced synthesis methods including solid-phase synthesis, liquid-phase synthesis, hybrid solid-liquid synthesis, and fragment condensation synthesis[19](index=19&type=chunk) - Proprietary technology platforms include OmniPeptSynth™ (efficient peptide synthesis), PeptiConjuX™ and PeptiNuclide LinkTech™ (custom synthesis of conjugated peptide APIs and radiopharmaceutical conjugates), GreenSynth Innovations™ (green chemistry), and Impurity Screening™ (impurity analysis)[20](index=20&type=chunk)[23](index=23&type=chunk) [Quality Management](index=5&type=section&id=%E8%B3%AA%E9%87%8F%E7%AE%A1%E7%90%86) The company has established a high-standard quality management system with a 100-employee Quality Assurance and Quality Control department, successfully passing multiple domestic and international regulatory and client GMP inspections and audits - The Quality Assurance and Quality Control department has a total of **100** employees[21](index=21&type=chunk) - All client quality audits have been passed in the past five years, along with **five** FDA on-site GMP inspections, **three** other overseas regulatory inspections, and **nine** NMPA inspections[21](index=21&type=chunk) - ISO9001 and ISO13485 certifications have been obtained, and **17** regulatory and client audits were passed during the reporting period[21](index=21&type=chunk)[22](index=22&type=chunk) [Production Capacity](index=6&type=section&id=%E7%94%A2%E8%83%BD) The company possesses substantial peptide API production capacity, with cGMP facilities in Hangzhou Qiantang Park exceeding **500 kg** annual capacity, and new expansion projects initiated, including establishing a production base in Rocklin Park, USA - The cGMP-compliant production facility in Hangzhou Qiantang Park has a total floor area exceeding **20,000** square meters, with an annual peptide API production capacity exceeding **500 kg** and batch capacity exceeding **30 kg**[24](index=24&type=chunk) - The Qiantang Park facility has the capability to produce **1 to 17 kg** of oligonucleotides annually[24](index=24&type=chunk) - As of June 30, 2025, new expansion projects have been initiated at Rocklin Park (California) and Qiantang Park, including the installation of a **3,000-liter** SPPS reactor[24](index=24&type=chunk) [Business Development](index=6&type=section&id=%E6%A5%AD%E5%8B%99%E7%99%BC%E5%B1%95) The company operates sales offices globally, strategically expanding its reach into European and Asian markets, increasing resources for oligonucleotide drug market entry, and continuously growing its client base through industry conferences and client engagement - Sales offices operate globally, with dedicated sales and marketing teams in China, the United States, and Europe[25](index=25&type=chunk) - Strategically expanding business scope into European and Asian markets, and increasing business development resources to enter the oligonucleotide drug market[25](index=25&type=chunk) - Actively participating in industry conferences such as DCAT 2025 and TIDES USA to enhance brand awareness and expand the client base[25](index=25&type=chunk) [Outlook](index=6&type=section&id=%E5%B1%95%E6%9C%9B) The company benefits from strong growth in the GLP-1 receptor agonist market, having established an extensive project pipeline with a particular focus on GLP-1, and plans to capitalize on market opportunities through capacity expansion, technology development, and generic drug pipeline construction [Market Trends and Opportunities](index=6&type=section&id=%E5%B8%82%E5%A0%B4%E8%B6%A8%E5%8B%A2%E8%88%87%E6%A9%9F%E9%81%87) The GLP-1 receptor agonist market has seen significant sales growth, with global peptide and GLP-1 drug markets projected for continued high growth, presenting substantial opportunities for the company - In H1 2025, the GLP-1 receptor agonist market saw significant sales growth, with Novo Nordisk's semaglutide products reaching **USD 16.683 billion** in sales, becoming the world's top-selling drug[26](index=26&type=chunk) - The global peptide drug market is projected to grow from **USD 89.5 billion** in 2023 to **USD 261.2 billion** in 2032, at a CAGR of **12.6%**[26](index=26&type=chunk) - The GLP-1 drug market is expected to grow from **USD 38.9 billion** in 2023 to **USD 129.9 billion** in 2032, at a CAGR of **14.3%**[26](index=26&type=chunk) - As of June 30, 2025, the company's project pipeline includes **338** ongoing CDMO projects, with **nine** NCE GLP-1 molecule development projects conducted with **seven** clients[27](index=27&type=chunk) [Future Strategy and Capacity Expansion](index=7&type=section&id=%E6%9C%AA%E4%BE%86%E6%88%B0%E7%95%A5%E8%88%87%E7%94%A2%E8%83%BD%E6%8B%B6%E5%BC%B5) The company plans capacity expansion in the US and China, expecting a significant increase in annual API production, while continuing to focus on advanced technology development and building a high-value generic drug product pipeline - Equipment installation at Rocklin Park (USA) is planned to commence in H2 2025, aiming for an annual peptide API production capacity of **300 kg**[28](index=28&type=chunk) - The new expansion project at Hangzhou Qiantang Park is expected to be completed by the end of 2025, adding **500 kg** of capacity, bringing Medtide Group's total annual API capacity to over **1,000 kg**[28](index=28&type=chunk) - Plans for the next few years include building or acquiring new production facilities to increase annual API production by several additional metric tons, with batch capacity rising to **100 kg**, to meet GLP-1 product demand[29](index=29&type=chunk) - The "Molecule-to-Market" strategy will be further implemented, with plans for CMC research on novel TIDES-related drugs such as GLP-1, PDC, RDC, and POC[29](index=29&type=chunk) - The company plans to continuously enhance automation in production processes and develop high-value generic drug products, actively preparing for DMF submissions[29](index=29&type=chunk) [Financial Review](index=8&type=section&id=%E8%B2%A1%E5%8B%99%E5%9B%9E%E9%A1%A7) During the reporting period, the company achieved significant growth in revenue, gross profit, and net profit, primarily driven by strong performance in FFS and CDMO businesses, while maintaining ample liquidity and substantially improving its gearing ratio [Revenue](index=8&type=section&id=%E6%94%B6%E7%9B%8A) For the six months ended June 30, 2025, revenue increased by **28.5%** year-over-year, primarily driven by increased demand in FFS and FTE businesses, with particularly significant growth in CDMO service revenue Revenue Breakdown by Charging Model | Charging Model | 2025 (RMB thousands) | 2024 (RMB thousands) | Year-on-year Change (%) | | :--- | :--- | :--- | :--- | | FFS | 232,924 | 192,944 | 20.7% | | FTE | 20,843 | 4,296 | 385.2% | | Others | – | 217 | Not Applicable | | Total | 253,767 | 197,457 | 28.5% | Revenue Breakdown by Service Type | Service Type | 2025 (RMB thousands) | 2024 (RMB thousands) | Year-on-year Change (%) | | :--- | :--- | :--- | :--- | | CRO Services | 55,570 | 47,632 | 16.7% | | CDMO Services | 198,197 | 149,608 | 32.5% | | Others | – | 217 | Not Applicable | | Total | 253,767 | 197,457 | 28.5% | - CDMO revenue grew by **32.5%**, primarily from clients with late-stage clinical or commercial projects[32](index=32&type=chunk) [Cost of Sales](index=9&type=section&id=%E9%8A%B7%E5%94%AE%E6%88%90%E6%9C%AC) Cost of sales increased by **9.7%** year-over-year, primarily due to increased production volume, despite a decrease in staff costs and utility expenses Cost of Sales Breakdown | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | Year-on-year Change (%) | | :--- | :--- | :--- | :--- | | Material Costs | 36,322 | 28,290 | 28.4% | | Staff Costs | 29,987 | 31,672 | -5.3% | | Utilities and Other Expenses | 12,218 | 13,460 | -9.2% | | Depreciation and Amortization | 8,995 | 9,646 | -6.7% | | Share-based Payment Expenses | 951 | 940 | 1.2% | | Others | 10,340 | 6,042 | 71.1% | | Total | 98,813 | 90,050 | 9.7% | [Gross Profit and Gross Margin](index=9&type=section&id=%E6%AF%9B%E5%88%A9%E5%8F%8A%E6%AF%9B%E5%88%A9%E7%8E%87) Gross profit increased by **44.3%** year-over-year, with gross margin improving by **6.7** percentage points to **61.1%**, primarily due to slower growth in cost of sales compared to revenue growth - Gross profit increased from **RMB 107.4 million** to **RMB 155.0 million**, a **44.3%** increase[35](index=35&type=chunk) - Gross margin increased from **54.4%** to **61.1%**, an increase of **6.7** percentage points[35](index=35&type=chunk) [Other Income and Gains](index=9&type=section&id=%E5%85%B6%E4%BB%96%E6%94%B6%E5%85%A5%E5%8F%8A%E6%94%B6%E7%9B%8A) Other income and gains decreased by **60.4%** year-over-year, primarily due to a one-off bond-related subsidy recognized in 2024 - Other income and gains decreased from **RMB 42.9 million** to **RMB 17.0 million**[36](index=36&type=chunk) - The decrease was primarily due to the one-off nature of bond-related subsidies recognized in **2024**[36](index=36&type=chunk) [Selling and Marketing Expenses](index=9&type=section&id=%E9%8A%B7%E5%94%AE%E5%8F%8A%E7%87%9F%E9%8Š%B7%E9%96%8B%E6%94%AF) Selling and marketing expenses increased by **7.5%** year-over-year, consistent with increased client-related activities and sales revenue growth - Selling and marketing expenses increased from **RMB 17.3 million** to **RMB 18.6 million**, a **7.5%** increase[37](index=37&type=chunk) [Administrative Expenses](index=10&type=section&id=%E8%A1%8C%E6%94%BF%E9%96%8B%E6%94%AF) Administrative expenses increased by **5.7%** year-over-year, primarily due to higher listing expenses - Administrative expenses increased from **RMB 38.3 million** to **RMB 40.5 million**, a **5.7%** increase[38](index=38&type=chunk) [Research and Development Expenses](index=10&type=section&id=%E7%A0%94%E7%99%BC%E9%96%8B%E6%94%AF) Research and development expenses decreased by **2.3%** year-over-year, primarily due to reduced material costs - Research and development expenses decreased from **RMB 13.0 million** to **RMB 12.7 million**, a **2.3%** decrease[39](index=39&type=chunk) [Income Tax Expense](index=10&type=section&id=%E6%89%80%E5%BE%97%E7%A8%85%E9%96%8B%E6%94%AF) Income tax expense significantly increased year-over-year, comprising both current and deferred tax components - Income tax expense increased from **RMB 7.9 million** to **RMB 13.7 million**[40](index=40&type=chunk) [Fair Value Gain/(Loss) on Financial Liabilities at Fair Value Through Profit or Loss](index=10&type=section&id=%E6%8C%89%E5%85%AC%E5%85%81%E5%83%B9%E5%80%BC%E8%A8%88%E5%85%A5%E6%90%8D%E7%9B%8A%E7%9A%84%E9%87%91%E8%9E%8D%E8%B2%A0%E5%82%B5%E7%9A%84%E5%85%AC%E5%85%81%E5%83%B9%E5%80%BC%E6%94%B6%E7%9B%8A%E2%88%95%EF%BC%88%E虧%E6%90%8D%EF%BC%89) This item shifted from a loss in 2024 to a gain in 2025, primarily due to changes in the company's valuation - Shifted from a loss of **RMB 21.7 million** in 2024 to a gain of **RMB 18.5 million** in 2025[41](index=41&type=chunk) [Profit for the Period](index=10&type=section&id=%E6%9C%9F%E5%85%A7%E5%88%A9%E6%BD%A4) Profit for the period increased by **101.7%** year-over-year, primarily driven by higher gross profit and fair value gains on financial liabilities at fair value through profit or loss - Profit for the period increased from **RMB 50.6 million** to **RMB 102.0 million**, a **101.7%** increase[42](index=42&type=chunk) [Non-IFRS Measures](index=10&type=section&id=%E9%9D%9E%E5%9C%8B%E9%9A%9B%E8%B2%A1%E5%8B%99%E5%A0%B1%E5%91%8A%E6%BA%96%E5%89%87%E8%A8%88%E9%87%8F) The company uses adjusted net profit as a supplementary financial measure to provide a clearer perspective on operating performance, which showed growth during the reporting period - Adjusted net profit (Non-IFRS measure) is defined as profit for the period adjusted for fair value gain/loss on financial liabilities, share-based payment expenses, and listing expenses[43](index=43&type=chunk) Reconciliation of Profit to Adjusted Net Profit | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Profit for the Period | 101,999 | 50,567 | | Add back: Fair value (gain)/loss on financial liabilities at fair value through profit or loss | (18,463) | 21,683 | | Add back: Share-based payment expenses | 2,311 | 2,132 | | Add back: Listing expenses | 18,211 | 16,183 | | Adjusted Net Profit for the Period (Non-IFRS measure) | 104,058 | 90,565 | [Liquidity and Capital Resources](index=11&type=section&id=%E6%B5%81%E5%8B%95%E8%B3%87%E9%87%91%E5%8F%8A%E8%B3%87%E6%9C%AC%E8%B3%87%E6%BA%90) The company maintains ample liquidity, with a significant increase in cash and cash equivalents, primarily due to cash generated from operations and proceeds from the global offering - As of June 30, 2025, cash and cash equivalents significantly increased to **RMB 998.4 million** from **RMB 387.2 million** as of December 31, 2024[45](index=45&type=chunk) - Primary sources of liquidity include cash generated from operations, capital contributions from shareholders, and proceeds from the issuance of equity shares (global offering)[45](index=45&type=chunk) [Material Investments](index=11&type=section&id=%E9%87%8D%E5%A4%A7%E6%8A%95%E8%B3%87) During the reporting period, the company did not make or hold any material investments - For the six months ended June 30, 2025, the company did not make or hold any material investments[46](index=46&type=chunk) [Material Acquisitions and/or Disposals of Subsidiaries, Associates and Joint Ventures](index=11&type=section&id=%E9%99%84%E5%B1%AC%E5%85%AC%E5%8F%B8%E3%80%81%E8%81%AF%E7%87%9F%E5%85%AC%E5%8F%B8%E5%8F%8A%E5%90%88%E8%B3%87%E4%BC%81%E6%A5%AD%E7%9A%84%E9%87%8D%E5%A4%A7%E6%94%B6%E8%B3%BC%E5%8F%8A%E2%88%95%E6%88%96%E5%87%BA%E5%94%AE) During the reporting period, the company did not undertake any material acquisitions and/or disposals of subsidiaries and associates - For the six months ended June 30, 2025, the company did not undertake any material acquisitions and/or disposals of subsidiaries and associates[47](index=47&type=chunk) [Future Plans for Material Investments and Capital Assets](index=12&type=section&id=%E9%87%8D%E5%A4%A7%E6%8A%95%E8%B3%87%E5%8F%8A%E8%B3%87%E6%9C%AC%E8%B3%87%E7%94%A2%E7%9A%84%E6%9C%AA%E4%BE%86%E8%A8%88%E5%8A%83) Except as disclosed in the prospectus and this announcement, the company has no other 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 other than those disclosed in the prospectus and this announcement[48](index=48&type=chunk) [Employees and Remuneration](index=12&type=section&id=%E5%83%B1%E5%93%A1%E5%8F%8A%E8%96%AA%E9%85%AC) The company's employee headcount increased, leading to a corresponding rise in total employee benefit expenses - As of June 30, 2025, the number of full-time employees was **520**, an increase from **454** as of June 30, 2024[49](index=49&type=chunk) - Total employee benefit expenses (including share-based payment expenses) increased from **RMB 64.4 million** to **RMB 71.1 million**[49](index=49&type=chunk) [Bank Borrowings and Gearing Ratio](index=12&type=section&id=%E9%8A%80%E8%A1%8C%E5%80%9F%E6%AC%BE%E5%8F%8A%E8%B3%87%E7%94%A2%E8%B2%A0%E5%80%B5%E6%AF%94%E7%8E%87) The company's outstanding borrowings remained low, and the gearing ratio significantly decreased due to changes in redeemable equity shares liability and proceeds from the global offering - As of June 30, 2025, outstanding borrowings amounted to **RMB 50.0 million**[50](index=50&type=chunk) - The gearing ratio significantly decreased from **72.8%** as of December 31, 2024, to **17.1%** as of June 30, 2025[50](index=50&type=chunk) [Contingent Liabilities](index=12&type=section&id=%E6%88%96%E7%84%B6%E8%B2%A0%E5%82%B5) As of the end of the reporting period, the company had no material contingent liabilities or guarantees - As of June 30, 2025, the company had no material contingent liabilities or guarantees[51](index=51&type=chunk) [Pledge of Assets](index=12&type=section&id=%E8%B3%87%E7%94%A2%E8%B3%AA%E6%8A%BC) As of the end of the reporting period, the company had not pledged or charged any assets, except for restricted cash - As of June 30, 2025, the company had not pledged or charged any other assets, except for restricted cash used as collateral for foreign exchange transactions and other operating activities[52](index=52&type=chunk) [Foreign Exchange Risk](index=12&type=section&id=%E5%A4%96%E5%8C%AF%E9%A2%A8%E9%9A%AA) The company faces foreign exchange risk, but no hedging was undertaken during the reporting period due to the expected immateriality of the risk, and it will continue to be monitored - The company faces foreign exchange risk related to the US Dollar, Hong Kong Dollar, and Euro[53](index=53&type=chunk) - For the six months ended June 30, 2025, the Group did not use any financial instruments for hedging purposes, as the expected exchange rate risk was not material[53](index=53&type=chunk) [Interim Condensed Consolidated Statement of Profit or Loss](index=13&type=section&id=%E4%B8%AD%E6%9C%9F%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E6%90%8D%E7%9B%8A%E8%A1%A8) This section presents the unaudited consolidated statement of profit or loss for the six months ended June 30, 2025, detailing the company's financial performance including revenue, costs, expenses, and profit for the period - The statement of profit or loss includes revenue, cost of sales, gross profit, other income and gains, various expenses, finance costs, fair value changes, and income tax expense[55](index=55&type=chunk) - Profit for the period was **RMB 101,999 thousand** (2024: **RMB 50,567 thousand**)[55](index=55&type=chunk) - Basic earnings per share were **RMB 0.82** (2024: **RMB 0.40**), and diluted earnings per share were **RMB 0.82** (2024: **RMB 0.30**)[55](index=55&type=chunk) [Interim Condensed Consolidated Statement of Comprehensive Income](index=14&type=section&id=%E4%B8%AD%E6%9C%9F%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E5%85%A8%E9%9D%A2%E6%94%B6%E7%9B%8A%E8%A1%A8) This section presents the unaudited consolidated statement of comprehensive income for the six months ended June 30, 2025, including profit for the period and other comprehensive income items such as exchange differences on translation of foreign operations - Profit for the period was **RMB 101,999 thousand** (2024: **RMB 50,567 thousand**)[57](index=57&type=chunk) - Exchange differences on translation of foreign operations amounted to **RMB (487) thousand** (2024: **RMB 400 thousand**)[57](index=57&type=chunk) - Total comprehensive income for the period was **RMB 101,512 thousand** (2024: **RMB 50,967 thousand**)[57](index=57&type=chunk) [Interim Consolidated Statement of Financial Position](index=15&type=section&id=%E4%B8%AD%E6%9C%9F%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81%E8%A1%A8) This section provides the unaudited consolidated statement of financial position as of June 30, 2025, detailing the company's assets, liabilities, and equity composition - Total non-current assets were **RMB 487,486 thousand** (December 31, 2024: **RMB 478,828 thousand**)[58](index=58&type=chunk) - Total current assets were **RMB 1,284,001 thousand** (December 31, 2024: **RMB 693,800 thousand**), including cash and cash equivalents of **RMB 998,403 thousand**[58](index=58&type=chunk) - Total current liabilities were **RMB 265,349 thousand** (December 31, 2024: **RMB 172,043 thousand**)[58](index=58&type=chunk) - Total non-current liabilities were **RMB 37,235 thousand** (December 31, 2024: **RMB 681,835 thousand**), with redeemable equity shares liability reduced to zero[59](index=59&type=chunk) - Total equity was **RMB 1,468,903 thousand** (December 31, 2024: **RMB 318,750 thousand**)[59](index=59&type=chunk) [Notes to the Interim Condensed Consolidated Financial Information](index=17&type=section&id=%E4%B8%AD%E6%9C%9F%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E8%B3%87%E6%96%99%E9%99%84%E8%A8%BB) This section provides detailed explanatory notes to the interim condensed consolidated financial information, covering company details, basis of preparation, accounting policy changes, and segment information [Company Information](index=17&type=section&id=%E5%85%AC%E5%8F%B8%E8%B3%87%E6%96%99) Medtide Pharmaceuticals (Zhejiang) Co., Ltd. was established in 2020, restructured as a joint-stock company in 2023, and primarily provides CRDMO services for peptide production - The company was established in China as a limited liability company on **June 11, 2020**, and restructured into a joint-stock company on **February 10, 2023**[60](index=60&type=chunk) - Its principal activities involve providing significant Contract Research, Development and Manufacturing Organization (CRDMO) services, focusing on synthetic peptide production[60](index=60&type=chunk) [Basis of Preparation](index=17&type=section&id=%E7%B7%A8%E8%A3%BD%E5%9F%BA%E6%BA%96) The interim condensed consolidated financial information is prepared in accordance with IAS 34 and presented in RMB, and should be read in conjunction with the company's prospectus - The interim condensed consolidated financial information is prepared in accordance with International Accounting Standard **34** Interim Financial Reporting[61](index=61&type=chunk) - The financial information is presented in **RMB**, with all values rounded to the nearest thousand[61](index=61&type=chunk) [Changes in Accounting Policies](index=17&type=section&id=%E6%9C%83%E8%A8%88%E6%94%BF%E7%AD%96%E8%AE%8A%E5%8B%95) Accounting policies adopted this period are consistent with the prior year, with only IAS 21 (Amendment) 'Lack of Exchangeability' being newly adopted, which had no material impact on the Group's financial information - The financial information for this period saw the first-time adoption of IAS **21** (Amendment) 'Lack of Exchangeability'[62](index=62&type=chunk)[63](index=63&type=chunk) - This amendment had no impact on the interim condensed consolidated financial information, as all the Group's transaction currencies are convertible[63](index=63&type=chunk) [Segment Information](index=17&type=section&id=%E5%88%86%E9%83%A8%E8%B3%87%E6%96%99) The company operates in a single reportable segment, providing external customer revenue and non-current asset information by geographical location, along with revenue contributions from major clients - The Group has only one reportable segment, with the CEO reviewing consolidated results to allocate resources and assess overall performance[64](index=64&type=chunk) External Customer Revenue by Location of Customer Entity | Region | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Mainland China | 38,903 | 56,624 | | United States | 147,675 | 121,990 | | Japan | 10,457 | 2,573 | | Europe | 37,945 | 5,551 | | Others | 18,787 | 10,719 | | Total | 253,767 | 197,457 | Non-current Assets by Location of Assets | Region | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Mainland China | 422,311 | 418,599 | | Overseas | 63,099 | 58,326 | | Total | 485,410 | 476,925 | Major Customer Revenue Contribution | Customer | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Customer A | 99,352 | 66,531 | | Customer B | 30,468 | 1,162 | [Revenue](index=19&type=section&id=%E6%94%B6%E5%85%A5) Revenue primarily derives from CRDMO services, dominated by the Fee-for-Service (FFS) model, with most revenue recognized at a point in time Revenue by Type of Goods and Services | Type | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | CRDMO Services | 253,767 | 197,240 | | Others | – | 217 | | Total | 253,767 | 197,457 | Revenue by Type of Charging Model | Type | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Fee-for-Service (FFS) | 232,924 | 192,944 | | Full-Time Equivalent (FTE) | 20,843 | 4,296 | | Others | – | 217 | | Total | 253,767 | 197,457 | Revenue by Timing of Revenue Recognition | Type | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Services and goods transferred at a point in time | 232,924 | 192,944 | | Services transferred over a period of time | 20,843 | 4,513 | | Total | 253,767 | 197,457 | [Other Income and Gains](index=20&type=section&id=%E5%85%B6%E4%BB%96%E6%94%B6%E5%85%A5%E5%8F%8A%E6%94%B6%E7%9B%8A) Other income and gains primarily include government grants and bank interest income, with a decrease in total during the reporting period mainly due to a one-off government grant in 2024 Analysis of Other Income and Gains | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Government grants – income | 4,940 | 29,682 | | Government grants – assets | 3,111 | – | | Bank interest income | 8,609 | 6,702 | | Net exchange differences | – | 3,678 | | Fair value gain on financial assets at fair value through profit or loss | 170 | 2,701 | | Others | 159 | 94 | | Total | 16,989 | 42,857 | [Income Tax](index=20&type=section&id=%E6%89%80%E5%BE%97%E7%A8%85) The company and its subsidiaries pay income tax at different rates in Mainland China, Hong Kong, and the US, with Mainland China subsidiaries enjoying preferential tax rates as high-tech enterprises - The corporate income tax rate in Mainland China is **25%**, with Medtide Bio-Pharmaceutical Co., Ltd. enjoying a preferential tax rate of **15%** as a high-tech enterprise (2024 to 2026)[72](index=72&type=chunk) - Hong Kong subsidiaries are subject to profits tax at **8.25%** on the first **HKD 2,000,000** of assessable profits and **16.5%** on the remaining profits, with no Hong Kong profits tax provision for the reporting period[74](index=74&type=chunk) - The US subsidiary is subject to a federal corporate income tax rate of **21%** and a California state income tax rate of **8.84%**[75](index=75&type=chunk) Income Tax Expense Breakdown | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Current – Mainland China | 14,679 | 6,867 | | Current – United States | 505 | 500 | | Deferred | (1,506) | 578 | | Total | 13,678 | 7,945 | [Dividends](index=21&type=section&id=%E8%82%A1%E6%81%AF) For the six months ended June 30, 2025 and 2024, the company neither declared nor paid any dividends - For the six months ended June 30, 2025 and 2024, the company neither declared nor paid any dividends[77](index=77&type=chunk) [Earnings Per Share Attributable to Owners of the Parent](index=21&type=section&id=%E6%AF%8D%E5%85%AC%E5%8F%B8%E6%99%AE%E9%80%9A%E8%82%A1%E6%AC%8A%E7%9B%8A%E6%8C%81%E6%9C%89%E4%BA%BA%E6%87%89%E4%BD%B5%E6%AF%8F%E8%82%A1%E7%9B%88%E5%88%A9) Both basic and diluted earnings per share are calculated based on profit for the period attributable to owners of the parent and the weighted average number of shares outstanding, considering the dilutive effect of convertible bonds - Basic earnings per share are calculated based on the profit for the period attributable to owners of the parent and the weighted average number of ordinary shares outstanding[78](index=78&type=chunk) - Diluted earnings per share consider the fair value gain on convertible bonds and the dilutive effect of their assumed conversion into ordinary shares[78](index=78&type=chunk) Earnings Per Share Calculation | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Profit attributable to owners of the parent for basic EPS calculation | 101,999 | 50,567 | | Add: Fair value gain on convertible bonds | – | (10,781) | | Profit attributable to owners of the parent before fair value gain on convertible bonds | 101,999 | 39,786 | | Number of Shares (thousands) | 2025 | 2024 | | :--- | :--- | :--- | | Weighted average number of ordinary shares outstanding for basic EPS calculation | 125,000 | 125,000 | | Dilutive effect – weighted average number of ordinary shares: convertible bonds | – | 6,849 | | Total | 125,000 | 131,849 | [Trade and Bills Receivables](index=22&type=section&id=%E8%B2%A8%E6%98%93%E6%87%89%E6%94%B6%E6%AC%BE%E9%A0%85%E5%8F%8A%E6%87%89%E6%94%B6%E7%A5%A8%E6%93%9A) Total trade receivables decreased at the end of the reporting period, with the vast majority being receivables within one year Ageing Analysis of Trade Receivables | Ageing | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Within 1 year | 32,498 | 57,460 | | 1 to 2 years | 350 | 240 | | 2 to 3 years | 3 | 20 | | Total | 32,851 | 57,720 | [Trade Payables](index=23&type=section&id=%E8%B2%A8%E6%98%93%E6%87%89%E4%BB%98%E6%AC%BE%E9%A0%85) Total trade payables increased at the end of the reporting period, primarily concentrated within one year and generally settled within one month Ageing Analysis of Trade Payables | Ageing | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Within 1 year | 28,853 | 23,328 | | 1 to 2 years | 30 | 22 | | Over 2 years | 109 | 119 | | Total | 28,992 | 23,469 | - Trade payables are non-interest-bearing and generally settled within **one month**[81](index=81&type=chunk) [Share Capital](index=23&type=section&id=%E8%82%A1%E6%9C%AC) The company's share capital increased due to its initial public offering, with **16,800,000** ordinary shares issued Overview of Share Capital Changes | Item | Number of Shares | Amount (RMB thousands) | | :--- | :--- | :--- | | As at December 31, 2023, January 1, 2024 and December 31, 2024 | 125,000,000 | 125,000 | | Shares issued upon initial public offering | 16,800,000 | 16,800 | | As at June 30, 2025 | 141,800,000 | 141,800 | - As of June 30, 2025, the company issued a total of **16,800,000** ordinary shares through a global offering at a price of **HKD 30.60** per share[83](index=83&type=chunk) [Corporate Governance and Other Information](index=24&type=section&id=%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB%E5%8F%8A%E5%85%B6%E4%BB%96%E8%B3%87%E6%96%99) This section outlines the company's adherence to corporate governance standards, securities trading policies, and other relevant information for the reporting period [Compliance with Corporate Governance Code](index=24&type=section&id=%E9%81%B5%E5%AE%88%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB%E5%AE%88%E5%89%87) The company has complied with the Corporate Governance Code since its listing date, except for the combined roles of Chairman and CEO, which the Board believes ensures consistent leadership without compromising power balance - The company has complied with all applicable code provisions of the Corporate Governance Code since its listing date, except for the combined roles of Chairman and Chief Executive Officer[84](index=84&type=chunk)[85](index=85&type=chunk) - The Board believes that Dr. Xu Qi's dual role as Chairman and CEO ensures consistent leadership within the Group and enhances efficiency in strategic planning[85](index=85&type=chunk) [Standard Code for Securities Transactions by Directors and Supervisors of Listed Issuers](index=24&type=section&id=%E4%B8%8A%E5%B8%82%E7%99%BC%E8%A1%8C%E4%BA%BA%E8%91%A3%E4%BA%8B%E5%8F%8A%E7%9B%A3%E4%BA%8B%E9%80%B2%E8%A1%8C%E8%AD%89%E5%88%B8%E4%BA%A4%E6%98%93%E7%9A%84%E6%A8%99%E6%BA%96%E5%AE%88%E5%89%87) The company has adopted the Standard Code as the code of conduct for directors and supervisors trading company securities, with all directors and supervisors confirming strict compliance - The company has adopted the Standard Code as the code of conduct for directors and supervisors dealing in the company's securities[86](index=86&type=chunk) - All directors and supervisors confirmed strict compliance with the Standard Code from the listing date up to the date of this announcement[86](index=86&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=25&type=section&id=%E8%B3%BC%E8%B2%B7%E3%80%81%E5%87%BA%E5%94%AE%E6%88%96%E8%B4%96%E5%9B%9E%E6%9C%AC%E5%85%AC%E5%8F%B8%E4%B8%8A%E5%B8%82%E8%AD%89%E5%88%B8) From the listing date to the date of this announcement, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities - From the listing date up to the date of this announcement, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities[87](index=87&type=chunk) - As of June 30, 2025, the company did not hold any treasury shares[87](index=87&type=chunk) [Audit Committee](index=25&type=section&id=%E5%AF%A9%E6%A0%B8%E5%A7%94%E5%93%A1%E6%9C%83) The company has established an Audit Committee, comprising three members, responsible for reviewing financial reporting procedures, internal control systems, and connected transactions, and has reviewed these interim financial statements - The Audit Committee comprises three members: Mr. Xia Xinsheng (Chairman), Dr. Yu Changhai, and Dr. Zhu Xun[88](index=88&type=chunk) - Its primary responsibilities include reviewing and overseeing the Group's financial reporting procedures and internal control systems, and reviewing and approving connected transactions[88](index=88&type=chunk) - The Audit Committee has reviewed the Group's unaudited condensed consolidated financial statements for the six months ended June 30, 2025[88](index=88&type=chunk) [Significant Events After Reporting Period](index=25&type=section&id=%E5%A0%B1%E5%91%8A%E6%9C%9F%E5%BE%8C%E9%87%8D%E5%A4%A7%E4%BA%8B%E9%A0%85) From June 30, 2025, to the date of this announcement, there have been no significant events that could affect the company - From June 30, 2025, to the date of this announcement, there have been no significant events that could affect the company[89](index=89&type=chunk) [Interim Dividend](index=26&type=section&id=%E4%B8%AD%E6%9C%9F%E8%82%A1%E6%81%AF) The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025 - The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025[90](index=90&type=chunk) [Publication of Interim Results Announcement and Interim Report](index=26&type=section&id=%E5%88%8A%E7%99%BC%E4%B8%AD%E6%9C%9F%E6%A5%AD%E7%B8%BE%E5%85%AC%E5%91%8A%E5%8F%8A%E4%B8%AD%E6%9C%9F%E5%A0%B1%E5%91%8A) This interim results announcement has been published on the HKEX and company websites, and the interim report will be published and dispatched to shareholders in due course - This interim results announcement is published on the HKEX website www.hkexnews.hk and the company's website https://medtideinc.com/[91](index=91&type=chunk) - The Group's interim report for the six months ended June 30, 2025, will be published and dispatched to shareholders in due course[91](index=91&type=chunk) [Acknowledgements](index=26&type=section&id=%E8%87%B4%E8%AC%9D) The Board extends its sincere gratitude to the Group's shareholders, management team, employees, business partners, and clients for their support and contributions - The Board extends its sincere gratitude to the Group's shareholders, management team, employees, business partners, and clients[92](index=92&type=chunk) [By Order of the Board](index=26&type=section&id=%E6%89%BF%E8%91%A3%E4%BA%8B%E6%9C%83%E5%91%BD) This announcement is issued by Dr. Xu Qi, Chairman and CEO, on behalf of the Board, and lists the updated roster of the company's executive, non-executive, and independent non-executive directors - This announcement is issued by Dr. Xu Qi, Chairman and CEO, on behalf of the Board[93](index=93&type=chunk) - The company's executive directors include Dr. Xu Qi, Dr. Li Xiang, Ms. Li Xiangli, Ms. Cheng Tao, and Ms. Li Lingmei[94](index=94&type=chunk) - The company's non-executive director is Mr. Wu Yihui; independent non-executive directors are Dr. Yu Changhai, Dr. Zhu Xun, and Mr. Xia Xinsheng[94](index=94&type=chunk)

利 特 米 有 限 公 司（「 本 公 司 」）董 事（「 董 事 」）會（「 董 事 會 」）宣 佈 本 公 司 及 其 附 屬 公 司（ 統 稱 為「 本 集 團」）截至二零二五年六月三十日止六個月之未經審核簡明綜合業績，連同二零二四年同期的相關比 較數字如下： 利 特 米 有 限 公 司 （ 於開曼群島註冊成立之有限公司） （股份代號：1936） 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。 Ritamix Global Limited 截至二零二五年六月三十日止六個月 之中期業績公告 未經審核簡明綜合權益變動表 截至二零二五年六月三十日止六個月 – 1 – 未經審核簡明綜合損益及其他全面收益表 截至二零二五年六月三十日止六個月 | | | 截至六月三十日止六個月 | | | --- | --- | --- | --- | | | | 二零二五年 | 二零二四年 | | | 附註 | 千令吉 | 千令吉 | | | | （未經審核） | （ 未經 ...

[Interim Results Summary](index=1&type=section&id=Interim%20Results) Feishang Anthracite Resources Limited's interim results for the six months ended June 30, 2025, show revenue from continuing operations decreased by 11.1% year-on-year to RMB136.6 million, with gross profit turning into a gross loss of RMB31.5 million; loss from continuing operations attributable to owners of the parent significantly increased by 65.9% to RMB237.9 million, with basic loss per share at RMB0.17 yuan Summary of Interim Results for H1 2025 | Metric | Six Months Ended June 30, 2025 (RMB million) | Six Months Ended June 30, 2024 (RMB million) | Year-on-year change | | :--- | :--- | :--- | :--- | | Revenue from continuing operations | 136.6 | 153.6 | -11.1% | | Gross (Loss)/Profit from continuing operations | (31.5) | 1.5 | Shifted from profit to loss | | Loss from continuing operations attributable to owners of the parent | (237.9) | (143.4) | +65.9% | | Basic loss per share from continuing operations | 0.17 yuan | - | - | [Interim Condensed Consolidated Financial Statements](index=2&type=section&id=Interim%20Condensed%20Consolidated%20Financial%20Statements) This section presents the company's interim condensed consolidated financial statements, including the income statement, statement of comprehensive income, and statement of financial position, detailing financial performance and position [Interim Condensed Consolidated Income Statement](index=2&type=section&id=Interim%20Condensed%20Consolidated%20Income%20Statement) For the six months ended June 30, 2025, the company's revenue from continuing operations decreased to RMB136,593 thousand, with sales costs increasing, resulting in a gross loss of RMB31,489 thousand; impairment loss on property, plant and equipment of RMB111,744 thousand was a primary driver of the expanded loss for the period from continuing operations, totaling RMB282,129 thousand, with RMB237,916 thousand attributable to owners of the parent Key Data from Interim Condensed Consolidated Income Statement | Metric | Six Months Ended June 30, 2025 (RMB thousand) | Six Months Ended June 30, 2024 (RMB thousand) | | :--- | :--- | :--- | | Revenue | 136,593 | 153,619 | | Cost of sales | (168,082) | (152,119) | | Gross (Loss)/Profit | (31,489) | 1,500 | | Impairment loss on property, plant and equipment | (111,744) | – | | Loss before tax from continuing operations | (286,257) | (170,380) | | Loss for the period from continuing operations | (282,129) | (150,458) | | Loss from continuing operations attributable to owners of the parent | (237,916) | (143,382) | [Interim Condensed Consolidated Statement of Comprehensive Income](index=4&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) For the six months ended June 30, 2025, the company's loss for the period significantly increased to RMB282,312 thousand, with net other comprehensive income of RMB611 thousand primarily from foreign exchange differences on translating overseas operations, resulting in a total comprehensive loss of RMB281,701 thousand, of which RMB237,486 thousand was attributable to owners of the parent Key Data from Interim Condensed Consolidated Statement of Comprehensive Income | Metric | Six Months Ended June 30, 2025 (RMB thousand) | Six Months Ended June 30, 2024 (RMB thousand) | | :--- | :--- | :--- | | Loss for the period | (282,312) | (150,668) | | Other comprehensive income/(loss) for the period, net of tax | 611 | (444) | | Total comprehensive loss for the period, net of tax | (281,701) | (151,112) | | Total comprehensive loss for the period attributable to owners of the parent | (237,486) | (144,034) | [Interim Condensed Consolidated Statement of Financial Position](index=5&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the company's total assets decreased to RMB2,779,765 thousand, total current liabilities increased to RMB4,243,548 thousand, and total equity was negative RMB1,909,991 thousand, indicating a deteriorating financial position with negative shareholders' equity Key Data from Interim Condensed Consolidated Statement of Financial Position | Metric | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Total non-current assets | 2,582,196 | 2,731,158 | | Total current assets | 197,569 | 133,436 | | Total assets | 2,779,765 | 2,864,594 | | Total current liabilities | 4,243,548 | 4,022,374 | | Total non-current liabilities | 446,208 | 470,510 | | Total liabilities | 4,689,756 | 4,492,884 | | Total equity | (1,909,991) | (1,628,290) | [Notes to the Interim Condensed Consolidated Financial Information](index=7&type=section&id=Notes%20to%20the%20Interim%20Condensed%20Consolidated%20Financial%20Information) This section provides detailed notes on the basis of preparation, accounting policy changes, segment information, discontinued operations, revenue, finance costs, loss before tax, income tax, loss per share, dividends, property, plant and equipment, leases, trade receivables, trade payables, and interest-bearing borrowings [Basis of Preparation and Changes in Accounting Policies](index=7&type=section&id=1.%20Basis%20of%20Preparation%20and%20Changes%20in%20Accounting%20Policies) The interim financial information is prepared under IAS 34, with the Group facing significant going concern uncertainties due to net current liabilities of approximately RMB4,046.0 million, shareholders' deficit of RMB1,910.0 million, and substantial bank borrowings due within 12 months, including overdue and reclassified amounts; management has implemented measures to improve profitability and liquidity, and accounting policy changes related to IAS 21 (amended) had no impact - As of June 30, 2025, the Group's net current liabilities were approximately **RMB4,046.0 million** (December 31, 2024: RMB3,888.9 million), and total assets less current liabilities were approximately **negative RMB1,463.8 million** (December 31, 2024: negative RMB1,157.8 million)[11](index=11&type=chunk) - As of June 30, 2025, the Group's total bank and other borrowings were **RMB1,676.7 million**, of which **RMB1,655.9 million** are due within the next 12 months, including approximately **RMB605.7 million** of overdue borrowings and approximately **RMB74.0 million** reclassified due to loan covenant breaches[12](index=12&type=chunk) - To maintain going concern, the Group is implementing various measures, including seeking lender support, negotiating litigation settlements, improving coal quality and output, strictly controlling costs, and receiving financial support from controlling shareholder Feishang Industrial Group Co., Ltd[13](index=13&type=chunk) - Changes to IAS 21 (amended) regarding lack of exchangeability had no impact on the Group's interim condensed consolidated financial information[16](index=16&type=chunk) [Operating Segment Information](index=8&type=section&id=2.%20Operating%20Segment%20Information) The Group operates a single segment, anthracite mining and sales, and anthracite trading, primarily in mainland China, with sales revenue from the top four customers significantly increasing, the largest customer's share rising from 21.1% to 44.8% - The Group operates a single operating segment: anthracite mining and sales and anthracite trading, primarily in mainland China[17](index=17&type=chunk)[18](index=18&type=chunk) Change in Sales Revenue Share of Top Four Customers | Customer | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Largest Customer | 44.8% | 21.1% | | Second Largest Customer | 14.1% | 12.1% | | Third Largest Customer | 12.7% | 10.4% | | Fourth Largest Customer | 10.5% | 10.1% | [Discontinued Operations](index=9&type=section&id=3.%20Discontinued%20Operations) Gouchang Coal Mine, suspended since March 2013 and planned for closure, had its operating results reclassified to discontinued operations, recording a loss of RMB183 thousand and a net cash outflow of RMB35 thousand for the reporting period - Gouchang Coal Mine, suspended since March 2013 and planned for closure, had its operating results reclassified to discontinued operations[20](index=20&type=chunk)[64](index=64&type=chunk) Gouchang Coal Mine Discontinued Operations Performance | Metric | Six Months Ended June 30, 2025 (RMB thousand) | Six Months Ended June 30, 2024 (RMB thousand) | | :--- | :--- | :--- | | Administrative expenses | (183) | (210) | | Loss for the period from discontinued operations | (183) | (210) | | Loss attributable to owners of the parent | (181) | (208) | | Loss attributable to non-controlling interests | (2) | (2) | Gouchang Coal Mine Discontinued Operations Cash Flow | Activity | Six Months Ended June 30, 2025 (RMB thousand) | Six Months Ended June 30, 2024 (RMB thousand) | | :--- | :--- | :--- | | Operating activities | (53) | (145) | | Financing activities | 18 | (28) | | Net cash outflow | (35) | (173) | [Revenue from Continuing Operations](index=10&type=section&id=4.%20Revenue%20from%20Continuing%20Operations) For the six months ended June 30, 2025, revenue from continuing operations was RMB136,593 thousand, a year-on-year decrease of 11.1%, primarily due to a 17.1% decline in the average selling price of coal, despite a slight 7.2% increase in sales volume of self-produced anthracite; revenue from processed coal sales slightly increased, but its average selling price also decreased Revenue Disaggregation Information | Item | Six Months Ended June 30, 2025 (RMB thousand) | Six Months Ended June 30, 2024 (RMB thousand) | | :--- | :--- | :--- | | Revenue from contracts with customers | 136,593 | 153,619 | | Coal sales | 136,593 | 153,607 | | Coal trading | – | 12 | | Total | 136,593 | 153,619 | | Revenue in Mainland China | 136,593 | 153,619 | - The average selling price of self-produced anthracite (excluding VAT) decreased by approximately **17.1%** from **RMB366.7 yuan per ton** in the prior period to **RMB304.1 yuan per ton** in the reporting period, mainly due to declining coal quality and a market price slump; sales volume slightly increased by **7.2%** to approximately **0.45 million tons**[55](index=55&type=chunk) - Revenue from sales of processed coal increased from **RMB66.6 million** to **RMB71.9 million**, with its proportion of total revenue rising from **43.4%** to **52.6%**, primarily due to a **0.01 million ton** increase in sales volume, despite a **7.0%** decrease in the average selling price of processed coal[55](index=55&type=chunk) [Finance Costs from Continuing Operations](index=12&type=section&id=5.%20Finance%20Costs%20from%20Continuing%20Operations) For the six months ended June 30, 2025, finance costs from continuing operations decreased to RMB59,671 thousand from RMB67,196 thousand in the prior period, primarily due to lower interest on interest-bearing bank and other borrowings Finance Costs Breakdown | Item | Six Months Ended June 30, 2025 (RMB thousand) | Six Months Ended June 30, 2024 (RMB thousand) | | :--- | :--- | :--- | | Interest on interest-bearing bank and other borrowings | 54,094 | 59,407 | | Interest on lease liabilities | 2,804 | 3,338 | | Interest on payables for mining rights | 1,073 | 1,237 | | Total interest expenses | 57,971 | 63,982 | | Bank charges | 1,003 | 26 | | Discounting interest on bills | 109 | 2,639 | | Accretion expenses | 588 | 549 | | Total | 59,671 | 67,196 | [Loss Before Tax from Continuing Operations](index=12&type=section&id=6.%20Loss%20Before%20Tax%20from%20Continuing%20Operations) For the six months ended June 30, 2025, loss before tax from continuing operations significantly increased to RMB286,257 thousand from RMB170,380 thousand in the prior period, mainly due to an impairment loss on property, plant and equipment of RMB111,744 thousand, as well as increased cost of sales, employee benefit expenses, and depreciation and amortization Key Components of Loss Before Tax | Item | Six Months Ended June 30, 2025 (RMB thousand) | Six Months Ended June 30, 2024 (RMB thousand) | | :--- | :--- | :--- | | Interest income from bank deposits | (6) | (56) | | Government grants | (4,482) | (5,645) | | Cost of inventories sold | 125,594 | 110,762 | | Sales taxes and surcharges | 6,494 | 8,551 | | Utilisation of safety production funds and maintenance funds | 35,994 | 32,806 | | Cost of sales | 168,082 | 152,119 | | Employee benefit expenses | 95,176 | 92,119 | | Depreciation, depletion and amortization | 56,946 | 47,244 | | Impairment loss on property, plant and equipment | 111,744 | – | [Income Tax Credit and Deferred Tax from Continuing Operations](index=13&type=section&id=7.%20Income%20Tax%20Credit%20and%20Deferred%20Tax%20from%20Continuing%20Operations) For the six months ended June 30, 2025, the income tax credit from continuing operations was RMB4,128 thousand, primarily from deferred tax in mainland China; the Group did not recognize deferred tax liabilities for unremitted earnings of Chinese subsidiaries due to their aggregate losses, and deferred tax assets mainly arose from tax losses and accrued liabilities, while deferred tax liabilities primarily stemmed from depreciation and fair value adjustments of property, plant and equipment Income Tax Credit Breakdown | Item | Six Months Ended June 30, 2025 (RMB thousand) | Six Months Ended June 30, 2024 (RMB thousand) | | :--- | :--- | :--- | | Current – Mainland China | – | – | | Deferred – Mainland China | 4,128 | 19,922 | | Total | 4,128 | 19,922 | - The Group did not recognize deferred tax liabilities for unremitted earnings of its subsidiaries in Mainland China subject to withholding tax, as the aggregate losses of these subsidiaries resulted in no undistributed distributable earnings[30](index=30&type=chunk) Net Deferred Tax Assets and Liabilities | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Total deferred tax assets | 96,680 | 87,660 | | Total deferred tax liabilities | (176,756) | (171,863) | | Net deferred tax liabilities | (80,076) | (84,203) | [Loss Per Share Attributable to Owners of the Parent](index=15&type=section&id=8.%20Loss%20Per%20Share%20Attributable%20to%20Owners%20of%20the%20Parent) For the six months ended June 30, 2025, basic and diluted loss per share attributable to owners of the parent increased to RMB0.17 yuan from RMB0.10 yuan in the prior period, primarily due to the expanded loss from continuing operations Loss Per Share Calculation | Metric | Six Months Ended June 30, 2025 (RMB thousand) | Six Months Ended June 30, 2024 (RMB thousand) | | :--- | :--- | :--- | | Loss for the period attributable to owners of the parent | (238,097) | (143,590) | | Weighted average number of ordinary shares (thousand shares) | 1,380,546 | 1,380,546 | | Loss per share (RMB yuan per share) | (0.17) | (0.10) | - The company had no potential dilutive shares during the reporting period, thus the diluted loss per share is the same as the basic loss per share[36](index=36&type=chunk) [Dividends](index=15&type=section&id=9.%20Dividends) The company neither paid nor declared any dividends during the reporting period or the corresponding prior period - The company neither paid nor declared any dividends during the reporting period (six months ended June 30, 2024: nil)[37](index=37&type=chunk) [Property, Plant and Equipment](index=15&type=section&id=10.%20Property,%20Plant%20and%20Equipment) During the reporting period, additions to property, plant and equipment were RMB2.2 million and additions to construction in progress were RMB22.7 million, both significantly lower than the prior period; total depreciation increased to RMB54.6 million, and due to ongoing operating losses, the company recognized an impairment loss of approximately RMB111.7 million on property, plant and equipment at Liujiaba Coal Mine and Baiping Coal Mine Property, Plant and Equipment Related Changes | Item | Six Months Ended June 30, 2025 (RMB million) | Six Months Ended June 30, 2024 (RMB million) | | :--- | :--- | :--- | | Additions to property, plant and equipment | 2.2 | 9.8 | | Additions to construction in progress | 22.7 | 72.7 | | Total depreciation charged | 54.6 | 43.7 | - Due to continuous operating losses at certain coal mines, the company recognized an impairment loss on property, plant and equipment of approximately **RMB111.7 million** at Liujiaba Coal Mine and Baiping Coal Mine (prior period: nil)[40](index=40&type=chunk) - As of June 30, 2025, mining rights of approximately **RMB344.1 million** and mining structures, machinery and equipment of approximately **RMB20.5 million** were pledged to secure bank loans[39](index=39&type=chunk) [Leases](index=16&type=section&id=11.%20Leases) As of June 30, 2025, the carrying amount of right-of-use assets was RMB196,482 thousand, a slight decrease from the beginning of the year primarily due to depreciation expenses; total lease liabilities were RMB97,792 thousand, with current portion at RMB46,723 thousand and non-current portion at RMB51,069 thousand Right-of-Use Assets Carrying Amount Changes | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Carrying amount at beginning of period/year | 198,819 | 269,098 | | Depreciation expense | (2,337) | (7,850) | | Carrying amount at end of period/year | 196,482 | 198,819 | Lease Liabilities Composition | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Carrying amount at beginning of period/year | 97,191 | 132,069 | | Carrying amount at end of period/year | 97,792 | 97,191 | | Current portion | 46,723 | 16,990 | | Non-current portion | 51,069 | 80,201 | [Trade Receivables](index=17&type=section&id=12.%20Trade%20Receivables) As of June 30, 2025, net trade receivables significantly increased to RMB30,067 thousand from RMB5,322 thousand as of December 31, 2024, with receivables within 3 months rising from RMB616 thousand to RMB24,422 thousand; the provision for impairment loss on trade receivables remained at RMB55,404 thousand Net Trade Receivables | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Trade receivables | 85,471 | 60,726 | | Less: Provision for impairment loss | (55,404) | (55,404) | | Net amount | 30,067 | 5,322 | Ageing Analysis of Trade Receivables | Ageing | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Within 3 months | 24,422 | 616 | | 3 to 6 months | 360 | 584 | | 6 to 12 months | 4,215 | 3,258 | | Over 12 months | 1,070 | 864 | | Total | 30,067 | 5,322 | - As of June 30, 2025, trade receivables of approximately **RMB52.0 million** were pledged to secure short-term loans of **RMB48.2 million**[43](index=43&type=chunk) [Trade Payables](index=18&type=section&id=13.%20Trade%20Payables) As of June 30, 2025, total trade payables increased to RMB908,307 thousand from RMB872,442 thousand as of December 31, 2024, including approximately RMB557.1 million payable to construction-related contractors; trade payables are generally settled within three to six months, while amounts due to contractors are settled within three months to one year Total Trade Payables | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Trade payables | 908,307 | 872,442 | Ageing Analysis of Trade Payables | Ageing | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Within one year | 218,419 | 243,372 | | One to two years | 294,004 | 374,491 | | Over two years | 395,884 | 254,579 | | Total | 908,307 | 872,442 | - Trade payables include amounts due to construction-related contractors of approximately **RMB557.1 million** as of June 30, 2025 (December 31, 2024: approximately RMB563.9 million)[45](index=45&type=chunk) [Interest-bearing Bank and Other Borrowings](index=20&type=section&id=14.%20Interest-bearing%20Bank%20and%20Other%20Borrowings) As of June 30, 2025, total interest-bearing bank and other borrowings amounted to RMB1,676,664 thousand, with a current portion of RMB1,655,939 thousand; approximately RMB605.7 million of borrowings were overdue, and RMB74.0 million were reclassified as current liabilities due to loan covenant breaches; various assets, including mining rights, equity interests, trade receivables, and mining structures, were pledged, and the controlling shareholder and fellow subsidiaries provided guarantees, with the Group actively negotiating loan extensions and settlement agreements Total Interest-bearing Bank and Other Borrowings | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Total current borrowings | 1,655,939 | 1,686,588 | | Total non-current borrowings | 20,725 | 33,908 | | Total | 1,676,664 | 1,720,496 | - The total amount of interest-bearing bank and other borrowings (including principal and interest) not repaid by the Group according to the repayment schedule is **RMB605.7 million**; approximately **RMB74.0 million** of borrowings have been reclassified as current liabilities due to loan covenant breaches[48](index=48&type=chunk) - Mr Li Feilie has provided guarantees for approximately **RMB1,463.1 million** of the Group's borrowings, and fellow subsidiaries have provided guarantees for approximately **RMB1,484.1 million** of borrowings[48](index=48&type=chunk) - Various assets are pledged, including mining rights of approximately **RMB344.1 million**, the company's equity interests in five entities including Guizhou Puxin, trade receivables of approximately **RMB52.0 million**, and mining structures, machinery and equipment of approximately **RMB20.5 million**[47](index=47&type=chunk) [Management Discussion and Analysis](index=22&type=section&id=Management%20Discussion%20and%20Analysis) This section provides an overview of the company's business and financial performance, resources, employee policies, and future outlook, highlighting challenges and strategic responses [Business Review](index=22&type=section&id=Business%20Review) In H1 2025, China's economy saw moderate recovery with 5.3% GDP growth, but the real estate market remained challenging; the coal industry faced weak supply and demand, with domestic raw coal output up 5.4% but imports down 11.1%, and thermal power generation declining while coal chemical industry was the sole growth driver; coal prices continued to fall, hitting a five-year low in Q2, and the Group faced multiple internal and external challenges, leading to expanded losses and questions about its going concern ability - In H1 2025, China's GDP grew by **5.3%** year-on-year, with strong manufacturing but sluggish domestic consumption and persistent headwinds in the real estate sector[50](index=50&type=chunk) - The coal industry experienced weak supply and demand, with domestic raw coal output increasing by **5.4%** year-on-year in H1, but coal imports decreasing by **11.1%** year-on-year to a three-year low[51](index=51&type=chunk) - On the demand side, thermal power generation decreased by **2.4%** year-on-year, with new energy sources playing a substitution role; the coal chemical industry was the sole growth driver for coal demand[52](index=52&type=chunk) - Coal prices continued to fall, reaching a five-year low in Q2 2025, with Q5500 thermal coal prices at northern ports falling by **28.5%** year-on-year to **RMB619 yuan per ton**[52](index=52&type=chunk) - The Group faced multiple internal (complex geology, production halts, mining team optimization, lagging tunneling) and external (weak market supply and demand, falling prices, strict regulations, high interest expenses) challenges, leading to plummeting production and sales, rising costs, falling selling prices, operational contraction, and deteriorating cash flow[53](index=53&type=chunk) [Financial Review](index=23&type=section&id=Financial%20Review) The Group's revenue from continuing operations decreased by 11.1% year-on-year to RMB136.6 million, primarily due to a 17.1% decline in average selling price; cost of sales increased by 10.5% to RMB168.1 million, resulting in a gross profit turning into a gross loss of RMB31.5 million; loss from continuing operations significantly increased to RMB282.1 million, mainly impacted by an RMB111.7 million impairment loss on property, plant and equipment, and loss attributable to owners of the parent rose to RMB237.9 million - Revenue from continuing operations decreased by **11.1%** year-on-year to **RMB136.6 million**, primarily due to a **17.1%** decline in average selling price, despite a slight **7.2%** increase in sales volume[55](index=55&type=chunk) - Cost of sales increased by **10.5%** year-on-year to **RMB168.1 million**, mainly due to increased sales volume and higher unit production costs[56](index=56&type=chunk) Changes in Unit Cost of Sales for Coal Mining | Cost Item | Six Months Ended June 30, 2025 (RMB/ton) | Six Months Ended June 30, 2024 (RMB/ton) | | :--- | :--- | :--- | | Labor costs | 129.9 | 112.2 | | Raw materials, fuel and energy | 96.5 | 93.3 | | Depreciation and amortization | 88.3 | 84.7 | | Taxes and levies payable to government | 13.9 | 20.1 | | Other production-related costs | 15.4 | 24.4 | | Total | 344.0 | 334.7 | - Overall gross profit turned into a gross loss of **RMB31.5 million** (prior period gross profit: RMB1.5 million), with a decrease in gross margin, mainly due to falling average selling prices and increased unit cost of sales[61](index=61&type=chunk) - Loss from continuing operations increased to **RMB282.1 million**, primarily due to an impairment loss on property, plant and equipment of approximately **RMB111.7 million** at Baiping Coal Mine and Liujiaba Coal Mine, as well as reduced gross profit and decreased income tax credit[62](index=62&type=chunk) - Loss from continuing operations attributable to owners of the parent increased from **RMB143.4 million** to **RMB237.9 million**[63](index=63&type=chunk) [Financial Resources Review](index=26&type=section&id=Financial%20Resources%20Review) As of June 30, 2025, the Group's net current liabilities increased to RMB4,046.0 million, with cash and cash equivalents at only RMB3.1 million; total interest-bearing bank and other borrowings were RMB1,676.7 million, mostly short-term, with approximately RMB605.7 million overdue; various assets were pledged, and the controlling shareholder and related parties provided guarantees, leading to a deterioration in the debt-to-equity ratio to negative 1,981.6% - As of June 30, 2025, the Group's net current liabilities were approximately **RMB4,046.0 million** (December 31, 2024: RMB3,888.9 million), and cash and cash equivalents were approximately **RMB3.1 million**[65](index=65&type=chunk)[66](index=66&type=chunk) - Total interest-bearing bank and other borrowings were approximately **RMB1,676.7 million**, of which current borrowings and current portion of long-term borrowings amounted to approximately **RMB1,655.9 million**; approximately **RMB605.7 million** of borrowings were overdue and could trigger cross-default clauses for other borrowings[66](index=66&type=chunk)[67](index=67&type=chunk) - The Group faces outstanding payables of **RMB368.7 million** related to ongoing litigation and arbitration; the Group is negotiating loan extensions, waivers, and litigation settlements[67](index=67&type=chunk) - Controlling shareholder Mr Li Feilie and fellow subsidiaries provided guarantees for a significant portion of the Group's bank borrowings, amounting to approximately **RMB1,463.1 million** and **RMB1,484.1 million** respectively as of June 30, 2025[68](index=68&type=chunk) - Various assets are pledged, including mining rights (**RMB344.1 million**), the company's equity interests (securing bank loans of **RMB519.2 million**), mining structures, machinery and equipment (**RMB20.5 million**), and trade receivables (**RMB52.0 million**)[68](index=68&type=chunk)[69](index=69&type=chunk) - Controlling shareholder Feishang Group Limited pledged its **600,000,000 ordinary shares** to secure operating capital financing of up to **RMB200.0 million** from Guizhou Provincial Material Development Investment Co., Ltd to Guizhou Puxin[70](index=70&type=chunk) - The debt-to-equity ratio (calculated as total interest-bearing debt divided by the sum of total equity and total interest-bearing debt) deteriorated from **798.3%** as of December 31, 2024, to **negative 1,981.6%** as of June 30, 2025, primarily due to significant losses[74](index=74&type=chunk) [Employees and Remuneration Policy](index=29&type=section&id=Employees%20and%20Remuneration%20Policy) As of June 30, 2025, the Group employed 2,475 full-time employees, with total employee costs (including directors' emoluments and wages for workers dispatched by third-party labor agencies) amounting to approximately RMB103.1 million, an increase from the prior period; the company offers remuneration based on industry practice and individual performance, along with medical and retirement benefits, and a share option scheme - As of June 30, 2025, the Group employed **2,475 full-time employees** (excluding 541 workers dispatched by third-party labor agencies)[76](index=76&type=chunk) - During the reporting period, total employee costs (including directors' emoluments) amounted to approximately **RMB103.1 million** (prior period: approximately RMB96.8 million)[76](index=76&type=chunk) - The Group offers employee remuneration based on industry practice and individual performance, along with medical and retirement benefits, and a share option scheme[76](index=76&type=chunk) [Outlook](index=29&type=section&id=Outlook) China's coal industry continues to face structural constraints and strict regulations, with moderate supply growth and structural demand weakness expected in the second half, leading to narrow fluctuations in coal prices; the Group anticipates ongoing operational challenges in the short term, including geological complexities, mining efficiency issues, and increased compliance costs, and will implement comprehensive measures such as expanding production, quality management, cost control, negotiating repayment plans, and considering fundraising; recovery depends on production restoration, liquidity resolution, and market diversification, with the company also exploring new energy business projects to diversify revenue streams - China's coal industry faces structural constraints and strict regulations, with moderate coal supply growth and persistent structural demand weakness expected in the second half, leading to narrow fluctuations in coal prices[77](index=77&type=chunk) - The Group anticipates ongoing operational challenges in the short term, including geological complexities, mining efficiency issues, and increased compliance costs, putting pressure on profitability[78](index=78&type=chunk) - The Group will implement comprehensive measures, including expanding production, managing coal quality, enhancing intelligent mining, strictly controlling costs, negotiating favorable loan repayment plans, and considering fundraising activities and disposal plans[78](index=78&type=chunk) - The Group's recovery depends on restoring production, addressing liquidity issues, resolving operational inefficiencies, and diversifying into high-quality coal markets to mitigate cyclical risks[78](index=78&type=chunk) - The company will explore new energy business projects, leveraging major shareholder resources, to diversify revenue streams and align with national sustainable development goals[78](index=78&type=chunk) [Other Information](index=30&type=section&id=Other%20Information) This section covers information regarding the purchase, sale or redemption of the company's listed securities, corporate governance practices, the model code for securities transactions by directors, the audit committee, publication of the interim report, acknowledgements, and the composition of the Board of Directors [Purchase, Sale or Redemption of the Company's Listed Securities](index=30&type=section&id=Purchase,%20Sale%20or%20Redemption%20of%20the%20Company's%20Listed%20Securities) Neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities during the reporting period - Neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities during the reporting period[79](index=79&type=chunk) [Corporate Governance Practices](index=30&type=section&id=Corporate%20Governance%20Practices) The company has complied with the code provisions of the Corporate Governance Code set out in Appendix C1 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited during the reporting period - The company has complied with the code provisions of the Corporate Governance Code set out in Appendix C1 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited during the reporting period[80](index=80&type=chunk) [Model Code for Securities Transactions by Directors](index=30&type=section&id=Model%20Code%20for%20Securities%20Transactions%20by%20Directors) The company has adopted the Model Code set out in Appendix C3 of the Listing Rules as its code of conduct for directors' securities transactions and confirms that all directors have complied with it throughout the reporting period - The company has adopted the Model Code set out in Appendix C3 of the Listing Rules as its code of conduct for directors' securities transactions and confirms that all directors have complied with it throughout the reporting period[81](index=81&type=chunk) [Audit Committee](index=31&type=section&id=Audit%20Committee) The Audit Committee, comprising three independent non-executive directors, is responsible for reviewing and monitoring the Group's financial reporting process, risk management, and internal controls, and has reviewed the Group's interim condensed consolidated financial information for the reporting period - The Audit Committee comprises three independent non-executive directors (Mr Chen Qian, Ms Liang Ying, and Mr Wang Xiufeng) and is responsible for reviewing and monitoring the Group's financial reporting process, risk management, and internal controls[82](index=82&type=chunk) - The Audit Committee has reviewed the Group's interim condensed consolidated financial information for the reporting period[82](index=82&type=chunk) [Publication of Interim Report](index=31&type=section&id=Publication%20of%20Interim%20Report) The company's interim report, containing all relevant information, will be dispatched to shareholders and published on the HKEXnews website and the company's website in due course - The company's interim report, containing all relevant information, will be dispatched to shareholders and published on the HKEXnews website (www.hkexnews.hk) and the company's website (www.fsanthracite.com) in due course[83](index=83&type=chunk) [Acknowledgements](index=31&type=section&id=Acknowledgements) The Board expresses its gratitude to all employees and the management team for their efforts and dedication during the reporting period, and extends sincere thanks to all shareholders for their continued support - The Board expresses its gratitude to all employees and the management team for their efforts and dedication, and extends sincere thanks to all shareholders for their continued support[84](index=84&type=chunk) [Board of Directors](index=31&type=section&id=Board%20of%20Directors) As of the date of this announcement, the Board of Directors comprises executive directors Mr Wang Xinhua, Mr He Jianhu, Mr Tan Zhuohao, and Mr Huang Huaan, and independent non-executive directors Mr Chen Qian, Ms Liang Ying, and Mr Wang Xiufeng - As of the date of this announcement, the executive directors are Mr Wang Xinhua, Mr He Jianhu, Mr Tan Zhuohao, and Mr Huang Huaan; the independent non-executive directors are Mr Chen Qian, Ms Liang Ying, and Mr Wang Xiufeng[85](index=85&type=chunk)

Company Information [Board of Directors and Committees](index=2&type=section&id=Board%20of%20Directors%20and%20Committees) This section lists the members of the company's Board of Directors, Executive Management Committee, Audit Committee, Nomination Committee, Remuneration Committee, and Corporate Governance Committee - Mr. Liu Lit Chi serves as Chairman and Chief Executive[2](index=2&type=chunk) - Mr. Cheng Yuk Wo chairs the Audit Committee[2](index=2&type=chunk) - Dr. Cheng Mo Chi chairs the Remuneration Committee[3](index=3&type=chunk) - Mr. Liu Kam Fai chairs the Corporate Governance Committee[3](index=3&type=chunk) [Legal Advisors, Auditors, Banks, and Offices](index=3&type=section&id=Legal%20Advisors%2C%20Auditors%2C%20Banks%2C%20and%20Offices) This section provides the company's legal advisors, auditors, partner banks, and registered and office addresses in Hong Kong, Guangzhou, Shanghai, and Foshan Nanhai and Sanshui Districts - Auditor is Deloitte Touche Tohmatsu[4](index=4&type=chunk) - Key partner banks include Bangkok Bank, BNP Paribas, CITIC Bank International, Chong Hing Bank, Dah Sing Bank, DBS Bank (Hong Kong), Hang Seng Bank, MUFG Bank, O-Bank, OCBC Wing Hang Bank, Standard Chartered Bank (Hong Kong), and The Hongkong and Shanghai Banking Corporation[4](index=4&type=chunk) - The company has a registered office in Hong Kong and offices in Guangzhou, Shanghai, Foshan Nanhai District, and Sanshui District in mainland China[5](index=5&type=chunk) Shareholder Information [Financial Calendar and Dividends](index=4&type=section&id=Financial%20Calendar%20and%20Dividends) This section discloses the company's financial calendar, including the Annual General Meeting, interim results announcement, interim cash dividend payment details, and share transfer registration arrangements - Interim cash dividend: **HK$0.11 per share**, payable on September 12, 2025[7](index=7&type=chunk) - Share transfer registration will be suspended from September 2 to September 4, 2025[7](index=7&type=chunk) - The company's shares are listed and traded on the Hong Kong Stock Exchange, stock code 00194, trading unit 2,000 shares[7](index=7&type=chunk) Condensed Consolidated Financial Statements [Condensed Consolidated Statement of Profit or Loss](index=5&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss) For the six months ended June 30, 2025, the company achieved a profit of HK$13,717 thousand, a significant improvement from a loss of HK$418,486 thousand in the prior period, driven by substantial revenue growth and a turnaround to pre-tax profit Key Data from Condensed Consolidated Statement of Profit or Loss (For the six months ended June 30) | Indicator | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change (HK$ thousand) | Change Rate | | :--- | :--- | :--- | :--- | :--- | | Revenue | 551,917 | 363,686 | 188,231 | 51.76% | | Direct Costs | (266,177) | (126,828) | (139,349) | 109.87% | | Other Income and Losses | (66,309) | (362,123) | 295,814 | -81.69% | | Finance Costs | (70,966) | (98,229) | 27,263 | -27.75% | | Share of results of joint ventures | 65,059 | (47,052) | 112,111 | -238.27% | | Profit (Loss) before tax | 1,637 | (439,061) | 440,698 | -100.37% | | Profit (Loss) for the period | 13,717 | (418,486) | 432,203 | -103.28% | | Basic earnings (loss) per share | HK$0.04 | HK$(1.10) | | [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=6&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For the six months ended June 30, 2025, total comprehensive income was HK$90,829 thousand, a significant improvement from a loss of HK$467,737 thousand in the prior period, primarily due to a profit for the period and a reversal of exchange differences from foreign operations Key Data from Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (For the six months ended June 30) | Indicator | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change (HK$ thousand) | Change Rate | | :--- | :--- | :--- | :--- | :--- | | Profit (Loss) for the period | 13,717 | (418,486) | 432,203 | -103.28% | | Fair value loss on equity instruments at fair value through other comprehensive income | (5,894) | (2,633) | (3,261) | 123.85% | | Exchange differences arising on translation of foreign operations | 78,600 | (45,154) | 123,754 | -274.09% | | Share of other comprehensive income (expense) of joint ventures (after tax) | 4,406 | (1,464) | 5,870 | -400.96% | | Other comprehensive income (expense) for the period (after tax) | 77,112 | (49,251) | 126,363 | -256.57% | | Total comprehensive income (expense) for the period | 90,829 | (467,737) | 558,566 | -119.43% | [Condensed Consolidated Statement of Financial Position](index=7&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the company's total assets less current liabilities slightly increased, net current assets slightly decreased, and total equity marginally grew, indicating stable financial health Key Data from Condensed Consolidated Statement of Financial Position (As of June 30) | Indicator | June 30, 2025 (HK$ thousand) | Dec 31, 2024 (HK$ thousand) | Change (HK$ thousand) | Change Rate | | :--- | :--- | :--- | :--- | :--- | | Non-current Assets | 11,332,516 | 11,313,017 | 19,499 | 0.17% | | Current Assets | 3,333,765 | 3,578,557 | (244,792) | -6.84% | | Current Liabilities | 1,635,901 | 1,862,116 | (226,215) | -12.15% | | Net Current Assets | 1,697,864 | 1,716,441 | (18,577) | -1.08% | | Total Assets Less Current Liabilities | 13,030,380 | 13,029,458 | 922 | 0.01% | | Non-current Liabilities | 2,466,296 | 2,491,844 | (25,548) | -1.02% | | Total Equity | 10,564,084 | 10,537,614 | 26,470 | 0.25% | [Condensed Consolidated Statement of Changes in Equity](index=9&type=section&id=Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) For the six months ended June 30, 2025, total equity attributable to shareholders increased from HK$10,506,524 thousand on January 1, 2025, to HK$10,527,063 thousand, primarily influenced by profit for the period and increased exchange reserves Key Data from Condensed Consolidated Statement of Changes in Equity (Attributable to Company Shareholders) | Indicator | Jan 1, 2025 (HK$ thousand) | June 30, 2025 (HK$ thousand) | Change (HK$ thousand) | | :--- | :--- | :--- | :--- | | Share Capital | 381,535 | 381,535 | 0 | | Special Reserve | (23,763) | (23,763) | 0 | | Property Revaluation Reserve | 2,956,817 | 2,956,817 | 0 | | Investment Revaluation Reserve | (23,495) | (12,854) | 10,641 | | Exchange Reserve | (92,726) | (18,534) | 74,192 | | Statutory Surplus Reserve | 90,378 | 90,394 | 16 | | Accumulated Profits | 7,217,778 | 7,153,468 | (64,310) | | **Total attributable to company shareholders** | **10,506,524** | **10,527,063** | **20,539** | - In H1 2025, profit for the period was **HK$16,600 thousand**, a significant improvement from a loss of **HK$416,720 thousand** in H1 2024[13](index=13&type=chunk)[12](index=12&type=chunk) - Exchange differences from foreign operations turned from an expense of **HK$43,908 thousand** in H1 2024 to income of **HK$69,786 thousand** in H1 2025[13](index=13&type=chunk)[12](index=12&type=chunk) [Condensed Consolidated Statement of Cash Flows](index=11&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) For the six months ended June 30, 2025, net cash from operating activities significantly increased, but net cash from financing activities shifted from inflow to outflow, resulting in a net decrease in cash and cash equivalents Key Data from Condensed Consolidated Statement of Cash Flows (For the six months ended June 30) | Indicator | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change (HK$ thousand) | Change Rate | | :--- | :--- | :--- | :--- | :--- | | Net cash from operating activities | 137,708 | 84,290 | 53,418 | 63.37% | | Net cash used in investing activities | (4,127) | (92,273) | 88,146 | -95.53% | | Net cash (used in) from financing activities | (251,577) | 881,277 | (1,132,854) | -128.54% | | Net (decrease) increase in cash and cash equivalents | (117,996) | 873,294 | (991,290) | -113.51% | | Cash and cash equivalents at end of period | 1,919,202 | 2,022,422 | (103,220) | -5.10% | - New borrowings of **HK$380,000 thousand** were obtained in H1 2025, a significant decrease from **HK$1,297,000 thousand** in H1 2024[14](index=14&type=chunk) - Repayment of borrowings amounted to **HK$495,320 thousand** in H1 2025, an increase from **HK$263,376 thousand** in H1 2024[14](index=14&type=chunk) Notes to the Condensed Consolidated Financial Statements [Basis of Preparation and Accounting Policies](index=12&type=section&id=Basis%20of%20Preparation%20and%20Accounting%20Policies) The condensed consolidated financial statements are prepared in accordance with HKAS 34 Interim Financial Reporting and the HKEX Listing Rules, based on historical cost and consistent accounting policies with the prior year - The condensed consolidated financial statements are presented in HK$ and prepared in accordance with HKAS 34 and the Listing Rules[15](index=15&type=chunk)[16](index=16&type=chunk) - Accounting policies applied in the current period are consistent with those in the consolidated financial statements for the year ended December 31, 2024[17](index=17&type=chunk) - The application of HKFRS accounting standard amendments (e.g., HKAS 21 amendment 'Lack of Exchangeability') had no material impact on the Group's financial performance and position[18](index=18&type=chunk) [Revenue Breakdown](index=13&type=section&id=Revenue%20Breakdown) For the six months ended June 30, 2025, total revenue significantly grew by 51.76% to HK$551,917 thousand, primarily driven by substantial property development revenue, while hotel operations revenue decreased Revenue Breakdown (For the six months ended June 30) | Revenue Source | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change (HK$ thousand) | Change Rate | | :--- | :--- | :--- | :--- | :--- | | Property Development | 215,096 | 8,978 | 206,118 | 2295.97% | | Property Management | 17,047 | 16,794 | 253 | 1.51% | | Trading and Manufacturing | 40,179 | 43,637 | (3,458) | -7.92% | | Hotel Operations | 77,772 | 101,124 | (23,352) | -23.09% | | **Revenue from contracts with customers** | **350,094** | **170,533** | **179,561** | **105.30%** | | Property Investment (Rental Income) | 159,088 | 155,005 | 4,083 | 2.63% | | Financial Investment (Interest and Dividend Income) | 42,735 | 38,148 | 4,587 | 12.03% | | **Total Revenue** | **551,917** | **363,686** | **188,231** | **51.76%** | - In H1 2025, property development revenue from mainland China was **HK$215,096 thousand**, while property management revenue from Hong Kong was **HK$17,047 thousand**[20](index=20&type=chunk) - Hotel operations revenue primarily from Thailand was **HK$72,263 thousand** in H1 2025[20](index=20&type=chunk) [Segment Information](index=14&type=section&id=Segment%20Information) The company reports revenue and results across six operating segments: property investment, property development, property management, financial investment, trading and manufacturing, and hotel operations; segment profit totaled HK$7,544 thousand in H1 2025, a significant improvement from a HK$293,780 thousand loss in H1 2024, mainly due to a substantial reduction in fair value losses on investment properties - The Group's six reportable segments are: property investment, property development, property management, financial investment, trading and manufacturing, and hotel operations[23](index=23&type=chunk) Segment Revenue and Profit (Loss) (For the six months ended June 30) | Segment | 2025 Segment Revenue (HK$ thousand) | 2025 Segment (Loss) Profit (HK$ thousand) | 2024 Segment Revenue (HK$ thousand) | 2024 Segment (Loss) Profit (HK$ thousand) | | :--- | :--- | :--- | :--- | :--- | | Property Investment | 159,952 | (5,477) | 156,099 | (258,753) | | Property Development | 215,096 | (31,480) | 8,978 | (16,074) | | Property Management | 24,412 | 4,881 | 24,278 | 7,334 | | Financial Investment | 42,735 | 35,746 | 38,148 | (6,517) | | Trading and Manufacturing | 40,179 | 2,631 | 43,637 | 2,821 | | Hotel Operations | 77,795 | 1,243 | 101,271 | (22,591) | | **Segment Total** | **560,169** | **7,544** | **372,411** | **(293,780)** | - In H1 2025, fair value losses on investment properties significantly decreased to **HK$77,320 thousand**, compared to **HK$334,301 thousand** in H1 2024[24](index=24&type=chunk)[27](index=27&type=chunk)[31](index=31&type=chunk) - The financial investment segment turned from a loss in H1 2024 to a profit in H1 2025, primarily due to fair value gains on financial assets at fair value through profit or loss and net exchange gains[24](index=24&type=chunk)[27](index=27&type=chunk)[31](index=31&type=chunk) [Other Income and Losses](index=19&type=section&id=Other%20Income%20and%20Losses) For the six months ended June 30, 2025, net other income and losses were a deficit of HK$66,309 thousand, a significant reduction from a HK$362,123 thousand loss in the prior period, primarily due to a substantial decrease in fair value losses on investment properties Other Income and Losses (For the six months ended June 30) | Indicator | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change (HK$ thousand) | Change Rate | | :--- | :--- | :--- | :--- | :--- | | Fair value loss on investment properties | (77,320) | (334,301) | 256,981 | -76.87% | | Fair value gain (loss) on financial instruments at fair value through profit or loss | 3,502 | (3,150) | 6,652 | -211.17% | | Fair value loss on derivative financial instruments | (4,661) | – | (4,661) | N/A | | Net exchange gain (loss) | 12,307 | (24,456) | 36,763 | -150.32% | | Loss on disposal of property, plant and equipment | (137) | (216) | 79 | -36.57% | | **Total** | **(66,309)** | **(362,123)** | **295,814** | **-81.69%** | [Income Tax Credit](index=19&type=section&id=Income%20Tax%20Credit) For the six months ended June 30, 2025, the company recorded an income tax credit of HK$12,080 thousand, a decrease from HK$20,575 thousand in the prior period, mainly due to reduced deferred tax credits and increased PRC Land Appreciation Tax Income Tax Credit (Expense) (For the six months ended June 30) | Indicator | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change (HK$ thousand) | Change Rate | | :--- | :--- | :--- | :--- | :--- | | Current tax (expense) | 4,233 | 4,896 | (663) | -13.54% | | Over-provision in prior years (credit) | (6) | (3) | (3) | 100.00% | | PRC Land Appreciation Tax (expense) | 3,682 | 630 | 3,052 | 484.44% | | Deferred tax (credit) | (19,989) | (26,098) | 6,109 | -23.41% | | **Total (credit)** | **(12,080)** | **(20,575)** | **8,495** | **-41.29%** | - Hong Kong profits tax is calculated at **16.5%**, PRC subsidiaries' corporate income tax rate is **25%**, and UK corporate tax rate is **25%**[35](index=35&type=chunk)[36](index=36&type=chunk) [Profit (Loss) for the Period](index=20&type=section&id=Profit%20(Loss)%20for%20the%20Period) For the six months ended June 30, 2025, profit for the period was HK$13,717 thousand, after deducting staff costs, depreciation of property, plant and equipment, depreciation of right-of-use assets, and short-term lease expenses Profit (Loss) for the Period Deducted Items (For the six months ended June 30) | Item | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change (HK$ thousand) | Change Rate | | :--- | :--- | :--- | :--- | :--- | | Staff Costs | 78,522 | 82,283 | (3,761) | -4.57% | | Depreciation of property, plant and equipment | 26,228 | 51,514 | (25,286) | -49.09% | | Depreciation of right-of-use assets | 2,902 | 531 | 2,371 | 446.52% | | Expenses relating to short-term leases | 554 | 1,894 | (1,340) | -70.75% | [Basic Earnings (Loss) Per Share](index=20&type=section&id=Basic%20Earnings%20(Loss)%20Per%20Share) For the six months ended June 30, 2025, basic earnings per share were HK$0.04, a significant improvement from a loss of HK$1.10 per share in the prior period, reflecting a substantial increase in the company's profitability Basic Earnings (Loss) Per Share (For the six months ended June 30) | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | Profit (Loss) attributable to company shareholders | HK$16,600,000 | HK$(416,720,000) | | Number of ordinary shares issued | 378,583,440 shares | 378,583,440 shares | | **Basic earnings (loss) per share** | **HK$0.04** | **HK$(1.10)** | - There were no potential ordinary shares in either period, thus diluted earnings per share are not presented[39](index=39&type=chunk) [Dividends](index=20&type=section&id=Dividends) For the six months ended June 30, 2025, the company recognized a final dividend of HK$0.17 per share for 2024 and declared an interim dividend of HK$0.11 per share for 2025, consistent with the prior period Dividends Recognized and Declared (For the six months ended June 30) | Dividend Type | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Final dividend declared and paid for 2024 (HK$0.17 per share) | 64,359 | 64,359 | | Interim dividend declared for 2025 (HK$0.11 per share) | 41,644 | 41,644 | - The Board approved an interim cash dividend of **HK$0.11 per share** on August 7, 2025, payable to shareholders on the register as of September 4, 2025[40](index=40&type=chunk) [Property, Plant and Equipment and Investment Properties](index=21&type=section&id=Property%2C%20Plant%20and%20Equipment%20and%20Investment%20Properties) For the six months ended June 30, 2025, the company disposed of some property, plant and equipment and investment properties, made new acquisitions, significantly narrowed fair value losses on investment properties, and recognized no impairment for Thailand hotel operation assets - Disposal of property, plant and equipment resulted in a loss of **HK$137 thousand** (H1 2024: HK$216 thousand)[41](index=41&type=chunk) - Cash proceeds from disposal of investment properties were **HK$4,109 thousand** (H1 2024: HK$5,798 thousand)[41](index=41&type=chunk) - Fair value losses on investment properties from valuation were approximately **HK$77,320 thousand**, a significant reduction from **HK$334,301 thousand** in H1 2024[42](index=42&type=chunk) - For the six months ended June 30, 2025, no impairment was recognized after assessing property, plant and equipment related to Thailand hotel operations[43](index=43&type=chunk) [Equity Instruments at Fair Value Through Other Comprehensive Income and Financial Assets at Fair Value Through Profit or Loss](index=22&type=section&id=Equity%20Instruments%20at%20Fair%20Value%20Through%20Other%20Comprehensive%20Income%20and%20Financial%20Assets%20at%20Fair%20Value%20Through%20Profit%20or%20Loss) As of June 30, 2025, the company held financial assets measured at fair value totaling HK$241,192 thousand, with unlisted equity securities forming the major portion, and most classified as non-current assets Classification of Financial Assets Measured at Fair Value (As of June 30) | Type | June 30, 2025 (HK$ thousand) | Dec 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Listed equity securities (FVPL) | 23,354 | 15,065 | | Listed equity securities (FVOCI) | 329 | 247 | | Unlisted equity securities (FVOCI) | 194,280 | 211,067 | | Perpetual capital securities (FVOCI) | 23,229 | 23,211 | | **Total** | **241,192** | **249,590** | - As of June 30, 2025, unlisted equity securities constituted the vast majority of equity instruments at fair value through other comprehensive income, amounting to **HK$194,280 thousand**[44](index=44&type=chunk) - Most financial assets measured at fair value are classified as non-current assets (**HK$217,838 thousand**)[44](index=44&type=chunk) [Trade and Other Receivables](index=23&type=section&id=Trade%20and%20Other%20Receivables) As of June 30, 2025, total trade and other receivables were HK$226,015 thousand, a slight increase from December 31, 2024, with prepayments and other receivables being the main components Trade and Other Receivables (As of June 30) | Item | June 30, 2025 (HK$ thousand) | Dec 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Trade receivables | 27,690 | 34,115 | | Lease receivables | 7,871 | 4,902 | | Deposits paid | 4,237 | 5,271 | | Prepayments and other receivables | 134,856 | 126,993 | | VAT recoverable | 51,361 | 50,053 | | **Total** | **226,015** | **221,334** | - The average credit period for trade receivables is **30 to 90 days**[46](index=46&type=chunk) - As of June 30, 2025, trade receivables overdue by more than 90 days amounted to **HK$5,309 thousand**[46](index=46&type=chunk) [Trade and Other Payables](index=24&type=section&id=Trade%20and%20Other%20Payables) As of June 30, 2025, total trade and other payables were HK$456,624 thousand, a decrease from December 31, 2024, with construction costs payable, retention money, and deposits received for investment properties being the main components Trade and Other Payables (As of June 30) | Item | June 30, 2025 (HK$ thousand) | Dec 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Trade payables | 8,810 | 9,158 | | Construction costs payable and retention money | 82,358 | 143,607 | | Deposits received for investment properties | 118,908 | 121,321 | | Rental received in advance | 8,502 | 9,351 | | Deposits received | 148,486 | 147,444 | | Other payables | 89,560 | 107,016 | | **Total** | **456,624** | **537,897** | - As of June 30, 2025, all trade payables were due within **30 days**[48](index=48&type=chunk) [Borrowings](index=25&type=section&id=Borrowings) As of June 30, 2025, total company borrowings were HK$3,267,384 thousand, a slight decrease from December 31, 2024, primarily comprising secured and unsecured bank borrowings Composition of Borrowings (As of June 30) | Item | June 30, 2025 (HK$ thousand) | Dec 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Secured bank borrowings | 2,427,746 | 2,421,955 | | Unsecured bank borrowings | 830,000 | 930,000 | | Amounts due to non-controlling shareholders | 9,638 | 9,612 | | **Total** | **3,267,384** | **3,361,567** | - In H1 2025, the company obtained bank loans of approximately **HK$380,000 thousand** and repaid bank loans of approximately **HK$495,320 thousand**[49](index=49&type=chunk) [Capital Commitments](index=25&type=section&id=Capital%20Commitments) As of June 30, 2025, the company's contracted capital commitments not provided for in the condensed consolidated financial statements totaled HK$16,636 thousand, primarily for property, plant and equipment/investment properties Capital Commitments (As of June 30) | Item | June 30, 2025 (HK$ thousand) | Dec 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Property, plant and equipment/investment properties | 16,636 | 22,761 | [Fair Value Measurement of Financial Instruments](index=26&type=section&id=Fair%20Value%20Measurement%20of%20Financial%20Instruments) The company regularly reviews fair value measurements and valuation processes for financial instruments, classifying financial assets into three levels based on the fair value hierarchy; as of June 30, 2025, most financial assets are valued using active market quotes or observable market data, with unlisted equity securities valuations sensitive to assumptions Fair Value Hierarchy Classification of Financial Assets (As of June 30) | Fair Value Hierarchy | June 30, 2025 (HK$ thousand) | Dec 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Level 1 (Quoted prices in active markets) | 23,683 | 15,312 | | Level 2 (Observable inputs) | 23,229 | 23,211 | | Level 3 (Unobservable inputs) | 194,280 | 211,067 | | **Total** | **241,192** | **249,590** | - The fair value of unlisted equity securities is referenced to the market value of underlying assets, primarily Hong Kong investment properties held by the invested companies, with a discount applied for lack of marketability[55](index=55&type=chunk) - A small portion (approximately **1.3%**) of the Group's total assets are financial assets measured and accounted for under Level 3 investments, and this valuation is highly sensitive to estimation assumptions[57](index=57&type=chunk) [Related Party Disclosures](index=28&type=section&id=Related%20Party%20Disclosures) For the six months ended June 30, 2025, the company's primary related party transactions involved rental expenses paid to directors or their affiliates, with key management personnel compensation also disclosed Related Party Transactions and Key Management Personnel Remuneration (For the six months ended June 30) | Item | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Rental expenses paid and payable to directors or their affiliates | 2,520 | 1,504 | | Key management personnel short-term benefits | 38,096 | 31,214 | | Key management personnel employee retirement benefits | 2,106 | 2,071 | | **Total key management personnel remuneration** | **40,202** | **33,285** | [Pledged Assets](index=28&type=section&id=Pledged%20Assets) As of June 30, 2025, the company has pledged hotel land and buildings, other equipment, leasehold land and buildings, and investment properties to banks to secure general banking facilities Pledged Assets (As of June 30) | Pledged Asset Type | June 30, 2025 (HK$ thousand) | Dec 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Hotel land and buildings and other equipment | 483,960 | 468,678 | | Leasehold land and buildings | 50,476 | 51,223 | | Investment properties | 4,495,739 | 4,520,251 | Review Report on Condensed Consolidated Financial Statements [Conclusion of Review](index=29&type=section&id=Conclusion%20of%20Review) Deloitte Touche Tohmatsu has reviewed Liao's Consolidated Financial Statements and found no matters suggesting they are not prepared in all material respects in accordance with HKAS 34 - Auditor is Deloitte Touche Tohmatsu[66](index=66&type=chunk) - The scope of review is substantially less than an audit, thus no audit opinion is expressed[64](index=64&type=chunk) - The auditor found no matters suggesting the condensed consolidated financial statements are not prepared in all material respects in accordance with HKAS 34[65](index=65&type=chunk) Management Discussion and Analysis [Interim Dividend and Share Transfer Registration](index=31&type=section&id=Interim%20Dividend%20and%20Share%20Transfer%20Registration) The Board resolved to declare an interim cash dividend of HK$0.11 per share for 2025 and announced specific dates and times for the suspension of share transfer registration - The 2025 interim cash dividend is **HK$0.11 per share**, consistent with 2024[67](index=67&type=chunk) - Dividends will be paid on September 12, 2025, to shareholders on the register as of September 4, 2025[67](index=67&type=chunk) - Share transfer registration will be suspended from September 2 to September 4, 2025[68](index=68&type=chunk) [Financial Performance Overview](index=31&type=section&id=Financial%20Performance%20Overview) For the period ended June 30, 2025, the Group's unaudited consolidated profit was approximately HK$13,700,000, a significant increase from a loss in the prior period, primarily due to reduced fair value losses on investment properties and improved joint venture results - Consolidated profit for the period was approximately **HK$13,700,000**, an increase of approximately **HK$432,200,000** from a loss of approximately **HK$418,500,000** in the prior period[69](index=69&type=chunk) - Revenue primarily derived from property investment, property development, property management, financial investment, trading and manufacturing, and hotel operations[69](index=69&type=chunk) - Other income and losses primarily include fair value losses on investment properties and net exchange (losses) gains[71](index=71&type=chunk) [Property Investment](index=31&type=section&id=Property%20Investment) For the period ended June 30, 2025, the Group's gross rental income increased by 3% year-on-year to HK$159,100,000, with an overall occupancy rate of 83.6%; Hong Kong, China, and UK investment properties showed mixed performance, with Shanghai Chong Hing Financial Center's rental income decreasing while London Barratt House's increased Property Investment Rental Income (For the period ended June 30) | Property | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change (HK$ thousand) | Change Rate | | :--- | :--- | :--- | :--- | :--- | | Chong Hing Square (Hong Kong) | 30,400 | 29,300 | 1,100 | 3.75% | | Chong Hing Bank Centre (Hong Kong) | 36,500 | 39,600 | (3,100) | -7.83% | | Shek Tong Tsui Square (Hong Kong) | 6,800 | 8,100 | (1,300) | -16.05% | | Fu Wai Court (Hong Kong) | 2,000 | 1,600 | 400 | 25.00% | | 181–183 Connaught Road West (Hong Kong) | 13,200 | N/A | N/A | N/A | | Shanghai Chong Hing Financial Center (China) | 50,800 | 57,800 | (7,000) | -12.11% | | Barratt House, London (UK) | 13,000 | 12,400 | 600 | 4.84% | | **Total Gross Rental Income** | **159,100** | **155,000** | **4,100** | **2.65%** | - Overall occupancy rate maintained at **83.6%**[73](index=73&type=chunk) - Chong Hing Bank Centre's rental income decreased by **7.8%** due to reduced rent upon renewal[75](index=75&type=chunk) - Shanghai Chong Hing Financial Center's office occupancy rate is approximately **75%**, retail unit occupancy is **83%**, and management is implementing strategies to enhance occupancy and rental income[79](index=79&type=chunk) - London Barratt House occupancy rate is **86%**[80](index=80&type=chunk) [Property Development](index=34&type=section&id=Property%20Development) For the period ended June 30, 2025, property development sales revenue surged by 2,290% to HK$215,100,000, primarily due to new sales recognition from Sanshui Xuanlong Yayuan; Foshan Cuihu Green Oasis Garden is largely sold out, and Sanshui Xuanlong Yayuan shows strong sales performance Property Development Sales Revenue (For the period ended June 30) | Item | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change (HK$ thousand) | Change Rate | | :--- | :--- | :--- | :--- | :--- | | **Sales Revenue** | **215,100** | **9,000** | **206,100** | **2290.00%** | - Foshan Cuihu Green Oasis Garden project has sold all 5,264 residential units and 2,457 (53%) of 4,670 parking spaces, with cumulative sales revenue of approximately **HK$6 billion**[84](index=84&type=chunk) - Sanshui Xuanlong Yayuan has publicly sold 483 (81%) of 600 residential units, with total sales revenue of approximately **RMB497,200,000**[87](index=87&type=chunk) - The remaining **484 residential units** are scheduled for sale in H2 2025[88](index=88&type=chunk) [Hotel Operations](index=35&type=section&id=Hotel%20Operations) For the period ended June 30, 2025, total revenue for Kimpton Kitalay Samui Hotel in Thailand grew to HK$72,300,000, with EBITDA of approximately HK$24,700,000, demonstrating strong performance exceeding budget Hotel Operations Performance (For the period ended June 30) | Indicator | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change (HK$ thousand) | Change Rate | | :--- | :--- | :--- | :--- | :--- | | Total Revenue | 72,300 | 58,400 | 13,900 | 23.80% | | EBITDA | 24,700 | N/A | N/A | N/A | - Kimpton Kitalay Samui Hotel has been fully operational since January 2022 and is one of the highest-rated Kimpton hotels in Asia Pacific[89](index=89&type=chunk)[90](index=90&type=chunk) - Hotel management will continue to implement effective strategies to maintain and enhance growth momentum[90](index=90&type=chunk) [Share of Results of Joint Ventures](index=36&type=section&id=Share%20of%20Results%20of%20Joint%20Ventures) For the period ended June 30, 2025, share of results of joint ventures turned from a HK$47,100,000 loss in the prior period to a HK$65,100,000 profit, primarily due to the disposal of Japanese warehouses and partial beneficial interests in Australian property trusts Share of Results of Joint Ventures (For the period ended June 30) | Indicator | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change (HK$ thousand) | Change Rate | | :--- | :--- | :--- | :--- | :--- | | **Share of results of joint ventures** | **65,100** | **(47,100)** | **112,200** | **-238.22%** | - The Group co-invests with Value Partners Group Limited in logistics centers and commercial buildings in Japan, Australia, and Italy, which maintain stable rental income and high occupancy rates[91](index=91&type=chunk) - The Group successfully disposed of three warehouses in Hokkaido, Higashimatsuyama, and Hadano, Japan, generating proceeds of **JPY9,660,000,000** (approximately **HK$511,000,000**)[91](index=91&type=chunk) - The sale of the remaining Japanese warehouse is expected to be completed in Q3 2025[91](index=91&type=chunk) [Outlook](index=36&type=section&id=Outlook) Despite challenging global economic conditions, management will maintain a prudent and disciplined strategy, focusing on operational resilience, risk management, and long-term value creation, continuously optimizing business operations and enhancing asset performance to strengthen the Group's competitive position in future recovery - The global economic environment remains challenging, but interest rate reductions offer some relief[92](index=92&type=chunk) - Management will maintain a prudent strategy, focusing on operational resilience, risk management, and long-term value creation[92](index=92&type=chunk) - Will continue to optimize business operations, enhance asset performance, and safeguard stakeholders' interests[92](index=92&type=chunk) Other Information [Directors' and Major Shareholders' Interests](index=37&type=section&id=Directors'%20and%20Major%20Shareholders'%20Interests) As of June 30, 2025, Mr. Liu Lit Chi holds 58.77% of the company's shares, and Mr. Liu Kam Fai holds 0.73%; Liu's Group Limited and Aibao Group Limited are major shareholders, holding 34.95% and 23.81% respectively Directors' Equity Interests in the Company and its Associated Corporations (As of June 30, 2025) | Director Name | Total Interests (Number of ordinary shares) | Approximate % of issued share capital | | :--- | :--- | :--- | | Mr. Liu Lit Chi | 222,499,000 | 58.77% | | Mr. Liu Kam Fai | 2,756,867 | 0.73% | - Mr. Liu Lit Chi's interests are primarily held through Liu's Group Limited and Aibao Group Limited[93](index=93&type=chunk) Major Shareholders' Interests (As of June 30, 2025) | Major Shareholder Name | Number of ordinary shares held | % of issued share capital | | :--- | :--- | :--- | | Liu's Group Limited | 132,326,710 | 34.95% | | Aibao Group Limited | 90,148,290 | 23.81% | - The interests of Liu's Group Limited and Aibao Group Limited are both related to Mr. Liu Lit Chi and his associates[95](index=95&type=chunk) [Employees and Remuneration Policy](index=39&type=section&id=Employees%20and%20Remuneration%20Policy) As of June 30, 2025, the Group employed 529 staff with total employee costs of approximately HK$78,500,000; the remuneration policy is reasonable and competitive, including basic salaries and performance-linked bonuses Employees and Remuneration Costs (As of June 30) | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | Number of Employees | 529 persons | 602 persons | | Total Employee Costs | HK$78,500,000 | HK$82,300,000 | - The remuneration policy, considered and recommended by the Remuneration Committee, aims to be reasonable and competitive, linked to performance[96](index=96&type=chunk) [Corporate Governance Code](index=39&type=section&id=Corporate%20Governance%20Code) The company substantially complied with Appendix C1 of the Listing Rules' Corporate Governance Code during the review period, though the roles of Chairman and Chief Executive are not separated, which the Board believes is in the company's best interest - The company substantially complied with the Corporate Governance Code[97](index=97&type=chunk) - The roles of Chairman and Chief Executive are not separated, which the Board believes is in the company's best interest, given Mr. Liu Lit Chi's extensive experience in the property and banking sectors[98](index=98&type=chunk) [Changes in Directors' Information](index=39&type=section&id=Changes%20in%20Directors'%20Information) Dr. Cheng Mo Chi, an Independent Non-executive Director, was appointed Chairman of the Hong Kong Maritime and Port Board on July 1, 2025 - Dr. Cheng Mo Chi was appointed Chairman of the Hong Kong Maritime and Port Board on July 1, 2025[99](index=99&type=chunk) [Model Code for Securities Transactions by Directors of Listed Issuers](index=40&type=section&id=Model%20Code%20for%20Securities%20Transactions%20by%20Directors%20of%20Listed%20Issuers) During the review period, all Directors confirmed compliance with the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix C3 of the Listing Rules - All Directors confirmed compliance with the Model Code for Securities Transactions by Directors of Listed Issuers[101](index=101&type=chunk) [Purchase, Sale or Redemption of Shares](index=40&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20Shares) For the six months ended June 30, 2025, neither the company nor its subsidiaries purchased, sold, or redeemed any of the company's shares - Neither the company nor its subsidiaries purchased, sold, or redeemed shares during the reporting period[102](index=102&type=chunk) [Review of Unaudited Interim Financial Report](index=40&type=section&id=Review%20of%20Unaudited%20Interim%20Financial%20Report) The Audit Committee reviewed the Group's accounting policies, internal controls, and financial reporting with management, and Deloitte Touche Tohmatsu issued an unmodified review report in accordance with Hong Kong Standard on Review Engagements 2410 - The Audit Committee reviewed accounting policies, internal controls, and financial reporting[103](index=103&type=chunk) - Auditor Deloitte Touche Tohmatsu issued an unmodified review report[103](index=103&type=chunk) [Publication of Results on Website](index=40&type=section&id=Publication%20of%20Results%20on%20Website) The results announcement has been published on the HKEXnews website and the company's website, and the interim results report will be dispatched to shareholders and published on the website on August 29, 2025 - The results announcement has been published on the HKEXnews website and the company's website[104](index=104&type=chunk) - The interim results report will be dispatched to shareholders and published on the website on August 29, 2025[104](index=104&type=chunk) [Board of Directors](index=41&type=section&id=Board%20of%20Directors) As of the interim report date, the Board of Directors includes Executive Directors, Non-executive Directors, and Independent Non-executive Directors, with Mr. Liu Lit Chi serving as Chairman and Chief Executive - The Board of Directors includes Mr. Liu Lit Chi (Chairman and Chief Executive), Mr. Liu Kam Fai (Vice Chairman) as Executive Directors, Mr. Hui Wing Chuen as a Non-executive Director, and several Independent Non-executive Directors[105](index=105&type=chunk)