[Consolidated Statement of Profit or Loss](index=1&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss) This section details the company's financial performance, showing a decline in profit for the period and earnings per share [Profit for the Period](index=2&type=section&id=Profit%20for%20the%20Period) The company's profit for the period decreased by 24.8% to 106,165 thousand RMB, with basic and diluted earnings per share falling to 12.16 RMB cents Key Consolidated Statement of Profit or Loss Data (For the six months ended June 30) | Metric | 2025 (thousand RMB) | 2024 (thousand RMB) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 4,388,782 | 3,593,506 | +22.1% | | Gross Profit | 378,040 | 430,096 | -12.1% | | Operating Profit | 132,723 | 195,912 | -32.3% | | Profit Before Tax | 126,788 | 183,663 | -30.9% | | Profit for the Period | 106,165 | 141,135 | -24.8% | | Attributable to Equity Holders of the Company | 106,128 | 140,937 | -24.7% | | Basic Earnings Per Share (RMB cents) | 12.16 | 15.97 | -23.8% | | Diluted Earnings Per Share (RMB cents) | 12.16 | 15.97 | -23.8% | [Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=3&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) This section presents the company's total comprehensive income, reflecting the impact of profit for the period and other comprehensive income items [Total Comprehensive Income for the Period](index=3&type=section&id=Total%20Comprehensive%20Income%20for%20the%20Period) Total comprehensive income for the period decreased by 25.9% to 104,714 thousand RMB, driven by lower profit and exchange rate fluctuations Total Comprehensive Income for the Period (For the six months ended June 30) | Metric | 2025 (thousand RMB) | 2024 (thousand RMB) | | :--- | :--- | :--- | | Profit for the Period | 106,165 | 141,135 | | Exchange differences on translation of the Company's financial statements | (24,978) | 3,116 | | Exchange differences on translation of financial statements of subsidiaries outside Mainland China | 23,527 | (2,908) | | Other comprehensive income for the period | (1,451) | 208 | | Total comprehensive income for the period | 104,714 | 141,343 | [Consolidated Statement of Financial Position](index=4&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) This section provides a snapshot of the company's assets, liabilities, and equity, indicating growth in total assets and net current assets [Overview of Assets and Liabilities](index=4&type=section&id=Overview%20of%20Assets%20and%20Liabilities) As of June 30, 2025, total assets and liabilities increased, with net current assets reaching 1,269,977 thousand RMB and total equity at 2,278,974 thousand RMB Key Consolidated Statement of Financial Position Data (As of June 30) | Metric | 2025 (thousand RMB) | 2024 (thousand RMB) | | :--- | :--- | :--- | | **Non-current assets** | 1,504,271 | 1,471,454 | | Property, plant and equipment | 1,376,426 | 1,304,270 | | **Current assets** | 4,885,098 | 4,202,613 | | Inventories | 1,831,574 | 1,548,355 | | Trade and other receivables | 1,186,612 | 1,019,967 | | Cash and cash equivalents | 700,273 | 681,211 | | **Current liabilities** | 3,615,121 | 3,007,210 | | Interest-bearing borrowings | 1,391,761 | 948,508 | | Trade and other payables | 2,186,072 | 2,011,397 | | **Net current assets** | 1,269,977 | 1,195,403 | | **Net assets** | 2,278,974 | 2,183,167 | | **Total equity** | 2,278,974 | 2,183,167 | [Notes to the Unaudited Interim Financial Results](index=6&type=section&id=Notes%20to%20the%20Unaudited%20Interim%20Financial%20Results) This section provides detailed explanations and disclosures regarding the accounting policies, financial performance, and financial position presented in the interim financial statements [1 Reporting Entity and Background Information](index=6&type=section&id=1%20Reporting%20Entity%20and%20Background%20Information) Incorporated in the Cayman Islands in 2007 and listed on HKEX, the Group's core business is high-precision copper strip manufacturing and trading, supplemented by network gaming since 2016 - The Company was incorporated in the Cayman Islands on July 19, 2007, and listed on the Main Board of the Hong Kong Stock Exchange on December 27 of the same year[7](index=7&type=chunk) - The Group's principal activities include manufacturing and selling high-precision copper strips, trading raw materials, providing processing services, and developing, publishing, and operating online games since August 2016[7](index=7&type=chunk) [2 Basis of Preparation](index=6&type=section&id=2%20Basis%20of%20Preparation) Interim financial information is prepared under IAS 34, using consistent accounting policies from 2024, involving management judgments, estimates, and assumptions - The interim financial information is prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting" and adopts the same accounting policies as the 2024 annual financial statements[8](index=8&type=chunk) - The preparation of interim financial information requires management to make judgments, estimates, and assumptions, and actual results may differ from these estimates[8](index=8&type=chunk) [3 Changes in Accounting Policies](index=7&type=section&id=3%20Changes%20in%20Accounting%20Policies) The Group applied IFRS 21 amendments on exchange rate changes, but they had no significant impact on the interim financial report due to the absence of relevant foreign currency transactions - The Group has applied IFRS 21 "The Effects of Changes in Foreign Exchange Rates (Amendments) – Lack of Exchangeability"[9](index=9&type=chunk) - As the Group did not undertake foreign currency transactions where one currency is not exchangeable into another, these amendments had no significant impact on this interim financial report[9](index=9&type=chunk) [4 Revenue and Segment Reporting](index=7&type=section&id=4%20Revenue%20and%20Segment%20Reporting) Group revenue is predominantly from copper products, with minimal gaming contribution, a diversified customer base, and no single customer exceeding 10% of total revenue, operating as a single segment Revenue by Major Product or Service Line (For the six months ended June 30) | Product/Service Line | 2025 (thousand RMB) | 2024 (thousand RMB) | Year-on-year Growth (%) | | :--- | :--- | :--- | :--- | | Sales of high-precision copper strips | 4,213,297 | 3,435,293 | +22.6% | | Processing service fees | 133,634 | 129,539 | +3.2% | | Trading of raw materials | 40,272 | 25,886 | +55.6% | | **Total related to copper products** | **4,387,203** | **3,590,718** | **+22.2%** | | Publishing and operating online games | 1,579 | 2,788 | -43.4% | | **Total Revenue** | **4,388,782** | **3,593,506** | **+22.1%** | Revenue by Customer Geographical Location (For the six months ended June 30) | Geographical Location | 2025 (thousand RMB) | 2024 (thousand RMB) | | :--- | :--- | :--- | | Mainland China | 3,948,998 | 3,187,147 | | Taiwan, China | 73,638 | 106,194 | | Vietnam | 48,458 | 15,524 | | Singapore | 47,041 | 51,596 | | India | 46,386 | 31,764 | | United States of America | 19,638 | 7,079 | | Other regions | 204,623 | 194,102 | | **Total Revenue** | **4,388,782** | **3,593,506** | - The Group has a diversified customer base, with no single customer contributing more than **10% of total revenue**[13](index=13&type=chunk) - The Group has only one operating segment, and segment assets and liabilities are not regularly reported to the chief operating decision maker[14](index=14&type=chunk) [5 Other Income and (Losses) – Net](index=9&type=section&id=5%20Other%20Income%20and%20(Losses)%20%E2%80%93%20Net) Other income and losses – net improved to (44,292) thousand RMB, primarily due to reduced net losses from metal futures contracts Other Income and (Losses) – Net (For the six months ended June 30) | Item | 2025 (thousand RMB) | 2024 (thousand RMB) | | :--- | :--- | :--- | | Credit loss allowance for trade and other receivables | (6,582) | (6,254) | | Gain/(loss) on disposal of property, plant and equipment | 634 | (491) | | Net loss on metal futures contracts | (37,405) | (60,458) | | Others | (939) | (248) | | **Total** | **(44,292)** | **(67,451)** | - Net loss on metal futures contracts decreased from **60,458 thousand RMB** to **37,405 thousand RMB**, which was the primary reason for the reduction in total losses[15](index=15&type=chunk) [6 Profit Before Tax](index=10&type=section&id=6%20Profit%20Before%20Tax) Profit before tax reflects a reduction in net finance costs to (5,935) thousand RMB, driven by higher net foreign exchange gains and lower interest expenses Net Finance Costs (For the six months ended June 30) | Item | 2025 (thousand RMB) | 2024 (thousand RMB) | | :--- | :--- | :--- | | Interest income from bank deposits | 13,190 | 15,491 | | Net foreign exchange gain | 419 | — | | Gain on foreign exchange option contracts | 102 | — | | **Finance income** | **13,711** | **15,491** | | Interest expense on interest-bearing borrowings | (20,289) | (23,218) | | Less: Interest expense capitalized | 645 | 992 | | Net interest expense recognized in profit or loss | (19,646) | (22,236) | | Net foreign exchange loss | — | (5,391) | | Loss on forward foreign exchange contracts and swap contracts | — | (113) | | **Finance costs** | **(19,646)** | **(27,740)** | | **Net finance costs** | **(5,935)** | **(12,249)** | - Borrowing costs were capitalized at an annual rate of **3.2%** (2024: **3.2% to 4.3%**)[16](index=16&type=chunk) Items Included in/Deducted from Profit Before Tax (For the six months ended June 30) | Item | 2025 (thousand RMB) | 2024 (thousand RMB) | | :--- | :--- | :--- | | Cost of inventories | 4,008,463 | 3,161,144 | | Research and development expenses | 123,198 | 80,252 | | Depreciation (property, plant and equipment) | 64,719 | 50,922 | | Government grants | 30,611 | 26,331 | [7 Income Tax](index=11&type=section&id=7%20Income%20Tax) Income tax expense significantly decreased to 20.6 million RMB, with the effective tax rate falling from 23% to 16%, primarily due to increased R&D super deduction Income Tax Expense (For the six months ended June 30) | Item | 2025 (thousand RMB) | 2024 (thousand RMB) | | :--- | :--- | :--- | | Current tax | 25,088 | 45,483 | | Deferred tax | (4,465) | (2,955) | | **Total** | **20,623** | **42,528** | - The effective tax rate decreased from **23%** in the prior period of 2024 to **16%** in the current period of 2025[18](index=18&type=chunk) - The reduction in the effective tax rate was primarily due to an increase in the estimated super deduction for qualified research and development expenses[18](index=18&type=chunk) [8 Earnings Per Share](index=12&type=section&id=8%20Earnings%20Per%20Share) Basic and diluted earnings per share decreased to 12.16 RMB cents, down from 15.97 RMB cents, primarily due to lower profit attributable to equity holders Earnings Per Share (For the six months ended June 30) | Metric | 2025 (RMB cents) | 2024 (RMB cents) | | :--- | :--- | :--- | | Basic Earnings Per Share | 12.16 | 15.97 | | Diluted Earnings Per Share | 12.16 | 15.97 | - Basic earnings per share are calculated based on profit attributable to ordinary equity holders of the Company of **106,128,000 RMB** and the weighted average number of ordinary shares outstanding of **872,628,581 shares**[19](index=19&type=chunk) - As of June 30, 2025, diluted earnings per share were the same as basic earnings per share due to the absence of potentially dilutive shares during the period[20](index=20&type=chunk) [9 Inventories](index=12&type=section&id=9%20Inventories) Total inventories increased to 1,831,574 thousand RMB, driven by raw materials, with a 20,974 thousand RMB allowance and some inventories pledged for bank loans Inventory Composition (As of June 30) | Item | 2025 (thousand RMB) | 2024 (thousand RMB) | | :--- | :--- | :--- | | Raw materials | 398,011 | 140,722 | | Work in progress | 1,028,213 | 1,065,196 | | Finished goods | 404,972 | 342,081 | | Others | 378 | 356 | | **Total** | **1,831,574** | **1,548,355** | - An allowance of **20,974 thousand RMB** (December 31, 2024: **20,450 thousand RMB**) has been made for inventories where the net realizable value is below the carrying amount[21](index=21&type=chunk) - Certain inventories with a maximum aggregate carrying amount of **480,000 thousand RMB** have been pledged as collateral for bank loans[21](index=21&type=chunk) [10 Trade and Other Receivables](index=13&type=section&id=10%20Trade%20and%20Other%20Receivables) Trade and other receivables increased to 1,186,612 thousand RMB, primarily due to higher net trade receivables and bills, with discounted/endorsed bank acceptance bills still recognized Composition of Trade and Other Receivables (As of June 30) | Item | 2025 (thousand RMB) | 2024 (thousand RMB) | | :--- | :--- | :--- | | Net trade receivables after allowance for credit losses | 647,449 | 601,348 | | Bills receivable | 349,038 | 254,165 | | Deposits for metal futures contracts | 82,820 | 75,988 | | Recoverable value-added tax | 65,057 | 43,296 | | Prepayments | 34,648 | 40,796 | | **Total** | **1,186,612** | **1,019,967** | - The Group discounted or endorsed bank acceptance bills totaling **278,312 thousand RMB** and continued to fully recognize the carrying amounts of these bills receivable and related settled trade payables[23](index=23&type=chunk) Ageing Analysis of Trade Receivables and Bills Receivable (As of June 30) | Ageing | 2025 (thousand RMB) | 2024 (thousand RMB) | | :--- | :--- | :--- | | Within 3 months | 893,085 | 780,955 | | Over 3 months but less than 6 months | 99,790 | 69,025 | | Over 6 months but less than 1 year | 796 | 1,667 | | Over 1 year | 2,816 | 3,866 | | **Total** | **996,487** | **855,513** | [11 Interest-Bearing Borrowings](index=14&type=section&id=11%20Interest-Bearing%20Borrowings) Total interest-bearing borrowings rose to 1,822,692 thousand RMB, with short-term debt at 76.4%, and some loans secured by inventories and property, plant, and equipment Composition of Interest-Bearing Borrowings (As of June 30) | Item | 2025 (thousand RMB) | 2024 (thousand RMB) | | :--- | :--- | :--- | | **Current** | **1,391,761** | **948,508** | | Short-term secured bank loans | 124,648 | 155,042 | | Unsecured bank loans | 69,516 | 191,618 | | Bank advances under discounted bills | 1,078,468 | 495,514 | | Current portion of non-current secured bank loans | 119,129 | 106,334 | | **Non-current** | **430,931** | **417,659** | | Secured bank loans | 430,931 | 417,659 | | **Total** | **1,822,692** | **1,366,167** | Carrying Amount of Pledged Assets (As of June 30) | Item | 2025 (thousand RMB) | 2024 (thousand RMB) | | :--- | :--- | :--- | | Inventories | 480,000 | 480,000 | | Property, plant and equipment | 123,170 | 132,982 | | Right-of-use assets | 5,838 | 6,058 | | **Total** | **609,008** | **619,040** | - Unsecured bank loans bear interest at **2.45% to 2.80%** per annum (December 31, 2024: **2.50% to 3.01%**)[27](index=27&type=chunk) - Secured bank loans bear interest at **2.30% to 4.20%** per annum (December 31, 2024: **2.70% to 4.30%**)[29](index=29&type=chunk) [12 Trade and Other Payables](index=15&type=section&id=12%20Trade%20and%20Other%20Payables) Trade and other payables increased to 2,186,072 thousand RMB, driven by higher trade payables, while bills payable decreased Composition of Trade and Other Payables (As of June 30) | Item | 2025 (thousand RMB) | 2024 (thousand RMB) | | :--- | :--- | :--- | | Trade payables | 1,548,719 | 1,275,642 | | Bills payable | 389,709 | 479,270 | | Accrued staff welfare | 65,175 | 88,101 | | Payables for purchase of property, plant and equipment | 70,474 | 61,599 | | Accruals and others | 50,244 | 63,786 | | Contract liabilities | 61,751 | 42,999 | | **Total** | **2,186,072** | **2,011,397** | Ageing Analysis of Trade Payables and Bills Payable (As of June 30) | Ageing | 2025 (thousand RMB) | 2024 (thousand RMB) | | :--- | :--- | :--- | | Within 3 months | 1,791,171 | 1,295,337 | | Over 3 months but less than 6 months | 126,145 | 414,162 | | Over 6 months but less than 1 year | 8,435 | 34,405 | | Over 1 year | 12,677 | 11,008 | | **Total** | **1,938,428** | **1,754,912** | [13 Equity-Settled Share-Based Transactions](index=16&type=section&id=13%20Equity-Settled%20Share-Based%20Transactions) The 2016 share award scheme aims to reward employees; as of June 30, 2025, 66,801 thousand RMB was injected into the trust, which purchased 69,767,000 shares, with 14,000,000 shares granted in December 2023 - The Company adopted a share award scheme on April 18, 2016, to recognize and reward eligible employees who have contributed to the Group's business growth[31](index=31&type=chunk) - As of June 30, 2025, the Company had cumulatively injected **66,801 thousand RMB** into the trust, and the trustee had cumulatively purchased **69,767,000 shares** of the Company[32](index=32&type=chunk) - Pursuant to a Board resolution on December 22, 2023, **14,000,000 ordinary shares** under the share award scheme were granted free of charge to **3 directors and 7 employees**, vesting in two tranches[33](index=33&type=chunk) Details of Shares Held Under Share Award Scheme (As of June 30) | Item | 2025 (Number of shares) | 2025 (thousand RMB) | 2024 (Number of shares) | 2024 (thousand RMB) | | :--- | :--- | :--- | :--- | :--- | | At January 1 | 23,862,000 | 23,153 | 19,200,000 | 18,853 | | Shares purchased during the period/year | 10,519,000 | 9,907 | 11,662,000 | 11,092 | | Shares vested during the period/year | — | — | (7,000,000) | (6,792) | | At June 30/December 31 | 34,381,000 | 33,060 | 23,862,000 | 23,153 | [14 Dividends](index=17&type=section&id=14%20Dividends) The Board of Directors decided not to declare or pay an interim dividend for the six months ended June 30, 2025 - No dividends were declared or paid for the six months ended June 30, 2025, and the Board has decided not to pay any dividend for the interim period[35](index=35&type=chunk) [Management Discussion and Analysis](index=18&type=section&id=Management%20Discussion%20and%20Analysis) This section offers management's perspective on the Group's operational and financial performance, key business segments, market risks, and future outlook [Copper Processing Business](index=18&type=section&id=Copper%20Processing%20Business) In H1 2025, the copper processing business saw increased production and sales amid volatile copper prices, but net profit declined due to rising costs and policy changes, prompting product structure optimization and enhanced management - In the first half of 2025, the global economy experienced a moderate recovery, though trade frictions and geopolitical conflicts continued to pose uncertainties[36](index=36&type=chunk) - The copper concentrate market saw weak supply and demand, with treatment and refining charges (TC) hitting a historical low; demand from new energy and photovoltaic installations weakened, while high-value copper materials were driven by high-end manufacturing (AI computing power, data centers)[36](index=36&type=chunk) - In the first half of 2025, the copper market was characterized by "tight supply and high prices," with copper prices rising first and then falling; the average price of copper in the domestic non-ferrous market was **77,800 RMB/ton** (year-on-year **+4.2%**)[37](index=37&type=chunk)[38](index=38&type=chunk) - Demand for red copper strips was strong, yellow copper strips were significantly impacted by the real estate sector, and high-end alloy copper strips saw significant growth driven by the electronics and artificial intelligence industries[38](index=38&type=chunk) - In the first half of 2025, the Group's copper strip business achieved a total production volume of **87,254 tons** and a total sales volume of **84,171 tons**, representing year-on-year increases of **13.7%** and **13.6%**, respectively[40](index=40&type=chunk) Copper Strip Business Sales Revenue and Net Profit (For the six months ended June 30) | Metric | 2025 (million RMB) | 2024 (million RMB) | Year-on-year Change (%) | | :--- | :--- | :--- | :--- | | Sales Revenue | 4,387.2 | 3,590.7 | +22.2% | | Copper Product Sales Revenue | 4,213.3 | 3,435.3 | +22.6% | | Processing Service Revenue | 133.6 | 129.5 | +3.2% | | Copper Trading Revenue | 40.3 | 25.9 | +55.6% | | Net Profit | 108.3 | 143.4 | -24.5% | - The decrease in net profit from the copper business was mainly due to: (1) increased labor costs; (2) increased depreciation costs; and (3) reduced gross profit from overseas sales due to the Chinese government's cancellation of export tax rebates for certain copper products[40](index=40&type=chunk) - The Group continues to adjust its product structure, increasing market share in domestic substitution areas such as automotive, electronic products, semiconductors, and new energy, while strengthening overseas market research[41](index=41&type=chunk) - The Group completed the preparation of its new five-year strategic plan, implementing a key task responsibility system and management methodology to improve departmental efficiency[41](index=41&type=chunk) - The Group engaged a global senior consulting firm for human resource reform, breaking through personnel management bottlenecks through organizational structure changes, recruitment system establishment, and compensation performance optimization[44](index=44&type=chunk) - The Group actively practices ESG principles, earning an **EcoVadis Bronze rating** and successfully breaking through overseas market entry barriers[44](index=44&type=chunk) - The Group is actively promoting energy cost reduction, saving costs through participation in electricity trading, leveraging energy storage advantages, and upgrading high-energy-consuming motors[44](index=44&type=chunk) - Looking ahead to the second half of the year, the Group expects to meet challenges, overcome difficulties, and achieve its targets, primarily benefiting from its specialized production line advantages, improved management, and team cohesion[42](index=42&type=chunk) [Gaming Business](index=21&type=section&id=Gaming%20Business) Gaming business revenue totaled 1.6 million RMB with a 2.1 million RMB net loss, mainly due to declining existing game product revenue, with plans to boost new product revenue in H2 Gaming Business Financial Performance (For the six months ended June 30) | Metric | 2025 (million RMB) | 2024 (million RMB) | | :--- | :--- | :--- | | Total Revenue | 1.6 | 2.8 | | Net Loss | 2.1 | 2.3 | - The primary reason for the gaming business loss was the decrease in revenue from existing game products[43](index=43&type=chunk) - Looking ahead to the second half of the year, the gaming business will continue to attempt to increase new product revenue[43](index=43&type=chunk) [Financial Review](index=22&type=section&id=Financial%20Review) In H1 2025, total revenue grew 22.1% driven by copper, though copper gross margin fell to 8.6%; other income and net other losses improved, administrative expenses and net finance costs shifted, income tax decreased, and profit attributable to shareholders declined, while liquidity remained sufficient despite increased short-term debt - During the reporting period, the Group recorded total sales revenue of **4,388.8 million RMB**, an increase of **22.1%** compared to the prior period in 2024[45](index=45&type=chunk) Revenue Composition and Proportion (For the six months ended June 30) | Item | 2025 (million RMB) | % of Total Revenue | 2024 (million RMB) | % of Total Revenue | | :--- | :--- | :--- | :--- | :--- | | Sales of high-precision copper strips | 4,213.3 | 96.0% | 3,435.3 | 95.7% | | Provision of processing services | 133.6 | 3.0% | 129.5 | 3.6% | | Trading of raw materials | 40.3 | 1.0% | 25.9 | 0.7% | | Online gaming business | 1.6 | 0.04% | 2.8 | 0.08% | - The overall gross profit margin for the copper business decreased from **12.0%** in the prior period of 2024 to **8.6%** in the reporting period, mainly due to reduced processing service revenue per ton, the cancellation of export tax rebate policies, and rising raw material prices[46](index=46&type=chunk) - Other income increased by **23.6 million RMB** to **50.4 million RMB**, primarily due to compensation received by a PRC subsidiary for equipment quality defects[47](index=47&type=chunk) - Net other losses decreased by **23.2 million RMB** to **44.3 million RMB**, mainly due to a reduction in net losses from metal futures contracts[48](index=48&type=chunk) - The ratio of distribution expenses to revenue increased from **0.7%** to **0.9%**, primarily due to higher freight charges[49](index=49&type=chunk) - Administrative expenses increased by **27.4%** to **213.3 million RMB**, attributable to increased research and development expenses[50](index=50&type=chunk) - Net finance costs decreased by **6.3 million RMB** to **5.9 million RMB**, mainly due to a reduction in net foreign exchange losses[51](index=51&type=chunk) - Income tax expense was **20.6 million RMB**, with an effective tax rate of **16%**, primarily due to an increase in the estimated super deduction for qualified research and development expenses[52](index=52&type=chunk) - Profit attributable to equity holders of the Company was **106.1 million RMB**, a decrease of **34.8 million RMB** compared to the prior period[53](index=53&type=chunk) - Net current assets increased to **1,270.0 million RMB**, mainly due to an increase in restricted bank deposits and cash and cash equivalents[54](index=54&type=chunk) - The percentage of short-term interest-bearing borrowings to total interest-bearing borrowings was **76.4%** (December 31, 2024: **69.4%**)[55](index=55&type=chunk) - The Group has bank facilities of **3,043.1 million RMB** and bank cash of **1,866.9 million RMB**, and the Board is confident in its sufficient financial resources[55](index=55&type=chunk) - As of June 30, 2025, **37.0%** of the Group's debt was secured (December 31, 2024: **49.7%**)[56](index=56&type=chunk) - The gearing ratio (net debt divided by total capital) was **39.9%** (December 31, 2024: **34.8%**)[56](index=56&type=chunk) - Assets with an aggregate carrying amount of **609.0 million RMB** were pledged as security for bank loans and facilities[57](index=57&type=chunk) - Capital expenditure was approximately **78.0 million RMB**, primarily for the acquisition of property, plant and equipment[58](index=58&type=chunk) - Future capital commitments amounted to **114.0 million RMB**, mainly for plant construction and capacity expansion in the copper processing business[59](index=59&type=chunk) - As of June 30, 2025, the Group had no significant contingent liabilities[60](index=60&type=chunk) [Market Risks](index=25&type=section&id=Market%20Risks) The Group manages price, interest rate, and foreign exchange risks through copper futures and foreign exchange option contracts, with interest rate risk primarily from bank borrowings and no interest rate swaps - The Group is exposed to the risk of fluctuations in raw material prices, primarily including cathode copper, alloy scraps, zinc, tin, and nickel[62](index=62&type=chunk) - The Group uses copper futures contracts on SHFE and LME to hedge against copper price fluctuations, recording a net loss of approximately **37.4 million RMB** on metal futures contracts in H1 2025, a reduction from the prior period[62](index=62&type=chunk) - The Group's market risk from interest rate changes is primarily related to fluctuations in interest rates on bank borrowings, but it has not entered into any interest rate swaps to hedge this risk[63](index=63&type=chunk) - The Group's export sales and some raw material purchases are denominated in foreign currencies (primarily USD), creating foreign exchange exposure, which is hedged using foreign exchange option contracts[64](index=64&type=chunk) - During the reporting period, the Group recorded a net foreign exchange gain of **0.4 million RMB**, compared to a net foreign exchange loss of **5.4 million RMB** in the prior period of 2024[64](index=64&type=chunk) [Employees](index=26&type=section&id=Employees) As of June 30, 2025, the Group employed 1,868 individuals, providing competitive compensation and benefits, and fostering skill development through annual training - As of June 30, 2025, the Group employed a total of **1,868 employees** (December 31, 2024: **1,757 employees**)[65](index=65&type=chunk) - The Group provides competitive compensation and benefits, including salaries, pensions, medical insurance, and other social insurance[65](index=65&type=chunk) - The Group has an annual training program aimed at enhancing the basic skills of new employees and the skills of existing employees[65](index=65&type=chunk) [Share Option Scheme and Share Award Scheme](index=26&type=section&id=Share%20Option%20Scheme%20and%20Share%20Award%20Scheme) The Company maintains 2007 (terminated for grants) and 2016 Share Option Schemes, with no activity in the latter during the period, and a 2016 Share Award Scheme detailed in Note 13 - The 2007 Share Option Scheme was terminated on May 27, 2016, and no further share options will be granted under this scheme[66](index=66&type=chunk) - The 2016 Share Option Scheme was adopted on May 27, 2016, with no share options granted, exercised, lapsed, cancelled, or outstanding during the reporting period[66](index=66&type=chunk) - The Company's Board of Directors adopted a Share Award Scheme on April 18, 2016, with details provided in Note 13[66](index=66&type=chunk) [Other Information](index=27&type=section&id=Other%20Information) This section provides additional disclosures on corporate governance, compliance, share transactions, dividends, and post-reporting period events [Audit Committee](index=27&type=section&id=Audit%20Committee) The Audit Committee reviewed accounting policies and practices with management, and examined the interim results and report for the period - The Audit Committee has reviewed the accounting policies and practices adopted by the Group with management and discussed financial reporting matters[67](index=67&type=chunk) - The Audit Committee has reviewed the interim results and interim report for the review period prepared in accordance with relevant accounting standards[67](index=67&type=chunk) [Compliance with Corporate Governance Code](index=27&type=section&id=Compliance%20with%20Corporate%20Governance%20Code) The Company consistently complied with the applicable code provisions of Part 2 of Appendix C1 to the HKEX Listing Rules' Corporate Governance Code during the reporting period - The Company has complied with the applicable code provisions set out in Part 2 of Appendix C1 to the Listing Rules' Corporate Governance Code throughout the reporting period[68](index=68&type=chunk) [Compliance with Model Code for Securities Transactions](index=27&type=section&id=Compliance%20with%20Model%20Code%20for%20Securities%20Transactions) All directors confirmed compliance with the Model Code for Securities Transactions by Directors of Listed Issuers for the six months ended June 30, 2025 - All directors confirmed their compliance with the Model Code for Securities Transactions by Directors of Listed Issuers for the six months ended June 30, 2025[69](index=69&type=chunk) [Purchase, Sale or Redemption of the Company’s Listed Securities](index=27&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company%E2%80%99s%20Listed%20Securities) The share award scheme trustee purchased 10,519,000 Company shares for 9,907,000 RMB; otherwise, no other listed securities were purchased, sold, or redeemed by the Company or its subsidiaries - The trustee of the share award scheme purchased a total of **10,519,000 shares** of the Company on the Stock Exchange for a total consideration of **9,907,000 RMB**[70](index=70&type=chunk) - Save for the aforementioned share purchases under the share award scheme, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[70](index=70&type=chunk) [Interim Dividend](index=27&type=section&id=Interim%20Dividend) The Board of Directors will not declare an interim dividend for the six months ended June 30, 2025 - The Company's Board of Directors will not declare an interim dividend for the six months ended June 30, 2025[71](index=71&type=chunk) [Events After Reporting Period](index=27&type=section&id=Events%20After%20Reporting%20Period) No significant events occurred after the reporting period up to the date of this announcement - There have been no significant events after the reporting period up to the date of this announcement[72](index=72&type=chunk) [Publication of 2025 Interim Results Announcement and Interim Report](index=28&type=section&id=Publication%20of%202025%20Interim%20Results%20Announcement%20and%20Interim%20Report) This results announcement is available on the Company's and HKEX websites, with the interim report to be published and dispatched to shareholders in due course - This results announcement has been published on the Company's website (www.xingyealloy.com) and the website of Hong Kong Exchanges and Clearing Limited (www.hkexnews.hk)[73](index=73&type=chunk) - The Company's 2025 interim report will be published on the Company's website and the website of Hong Kong Exchanges and Clearing Limited, and will be dispatched to the Company's shareholders in due course[73](index=73&type=chunk)

[Report Foreword and Company Overview](index=1&type=section&id=Report%20Foreword%20and%20Company%20Overview) This section introduces the company's interim results announcement and provides an overview of its corporate structure [Announcement Statement and Company Profile](index=1&type=section&id=Announcement%20Statement%20and%20Company%20Profile) This announcement presents Fuyin Financial Leasing (Shenzhen) Co., Ltd.'s unaudited interim results for H1 2025, highlighting GEM market characteristics and investment risks - This announcement presents the unaudited consolidated results of Fuyin Financial Leasing (Shenzhen) Co., Ltd. for the six months ended June 30, 2025[2](index=2&type=chunk)[4](index=4&type=chunk) - The HKEX GEM market is positioned as a listing platform for small and medium-sized companies, carrying higher investment risks, thus investors should exercise prudence[3](index=3&type=chunk) [Board Members and Responsibility Statement](index=2&type=section&id=Board%20Members%20and%20Responsibility%20Statement) The announcement lists the company's board members and emphasizes their collective responsibility for the accuracy and completeness of the content - Board members include executive directors Mr. Li Peng (Chairman), Mr. Weng Jianxing, Ms. Gong Xiaoting, non-executive directors Mr. Peng Qilei, Ms. Liu Jing, and independent non-executive directors Mr. Liu Shengwen, Mr. Han Liang, Mr. Tong Qiang[7](index=7&type=chunk) - All directors jointly and individually assume full responsibility for this announcement, confirming the information contained is accurate, complete, and free from misleading or fraudulent content[7](index=7&type=chunk) [Company Information](index=4&type=section&id=Company%20Information) This section details the company's governance structure, registration, and key operational contacts [Board of Directors, Supervisory Committee, and Committees](index=4&type=section&id=Board%20of%20Directors%2C%20Supervisory%20Committee%2C%20and%20Committees) The company details the members of its Board, Supervisory Committee, and various committees, including recent appointment changes - The Board of Directors comprises executive, non-executive, and independent non-executive directors, with Mr. Li Peng serving as Chairman[9](index=9&type=chunk) - Mr. Zhu Xiaodong chairs the Supervisory Committee, and Ms. Li Juan was appointed as a staff representative supervisor on March 31, 2025[9](index=9&type=chunk) - The Audit Committee, Nomination Committee, and Remuneration Committee are all chaired or primarily composed of independent non-executive directors, ensuring the independence of corporate governance[9](index=9&type=chunk) [Registration and Principal Place of Business](index=5&type=section&id=Registration%20and%20Principal%20Place%20of%20Business) The company is registered in Shenzhen, China, with its principal place of business in Hong Kong, and discloses key information on auditors, legal counsel, and banks - The company's registered office is located in Qianhai Shenzhen-Hong Kong Cooperation Zone, Shenzhen, Guangdong, China, with its China head office in Futian District, Shenzhen[10](index=10&type=chunk) - The principal place of business in Hong Kong is situated at Dah Sing Financial Centre, Queen's Road East, Wan Chai[10](index=10&type=chunk) - Shinewing (HK) CPA Limited serves as the auditor, and legal counsel includes Sidley Austin and Beijing Tian Yuan Law Firm[10](index=10&type=chunk) [Management Discussion and Analysis](index=6&type=section&id=Management%20Discussion%20and%20Analysis) This section provides an in-depth review of the Group's business performance, financial results, and strategic outlook for the reporting period [Business Review and Outlook](index=6&type=section&id=Business%20Review%20and%20Outlook) The Group achieved significant revenue growth and narrowed net loss in H1 2025 amidst a complex economic environment, with a future focus on expanding its energy storage business 2025 H1 Key Financial Performance | Indicator | 2025 H1 (RMB million) | 2024 H1 (RMB million) | Year-on-Year Growth Rate | | :--- | :--- | :--- | :--- | | Total Revenue | 46.61 | 25.20 | 84.96% | | Net Loss | (1.39) | (2.97) | 53.20% (Loss narrowed) | - The Group's main businesses include financial leasing, factoring, consulting services, medical equipment supply, energy storage business, and cross-border e-commerce business[12](index=12&type=chunk) - The energy storage business adheres to the strategic goal of "doing well in energy storage and utilizing energy storage effectively," developing industrial and commercial energy storage and power storage to expand market and enhance competitiveness[13](index=13&type=chunk) - The cross-border e-commerce business adjusted its product operation strategy, delisting loss-making products, and improving sales and profitability of profitable products, resulting in reduced losses compared to the same period last year[13](index=13&type=chunk) - Looking ahead, the Group will continue to adopt a prudent financial management strategy and further develop its energy storage business to expand its revenue base[14](index=14&type=chunk) [Financial Review](index=7&type=section&id=Financial%20Review) The Group's H1 2025 revenue surged 84.96% to RMB 46.61 million, driven by energy storage and cross-border e-commerce, while administrative expenses decreased 31.70% due to cost controls 2025 H1 Key Financial Indicators Changes | Indicator | 2025 H1 (RMB million) | 2024 H1 (RMB million) | Change Rate | | :--- | :--- | :--- | :--- | | Revenue | 46.61 | 25.20 | +84.96% | | Cost of Sales | 33.71 | 12.52 | +169.24% | | Other Income and Gains | 1.36 | 2.59 | -47.54% | | Operating Expenses | 3.59 | 2.63 | +36.64% | | Administrative Expenses | 9.38 | 13.74 | -31.70% | | Impairment Provision for Accounts Receivable | 1.35 | 1.37 | -1.46% | | Income Tax Expense | 0.33 | 1.11 | -70.36% | - Revenue growth was primarily due to increased income from energy storage business and cross-border e-commerce business[15](index=15&type=chunk) - The decrease in administrative expenses was mainly due to the implementation of cost control measures[19](index=19&type=chunk) [Financial Position Analysis](index=8&type=section&id=Financial%20Position%20Analysis) As of June 30, 2025, total assets slightly increased by 0.38% to RMB 559.64 million, with accounts receivable accounting for nearly 60%, and the gearing ratio slightly rose to 21.23% Financial Position as of June 30, 2025 | Indicator | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | Change Rate | | :--- | :--- | :--- | :--- | | Total Assets | 559.64 | 557.54 | +0.38% | | Accounts Receivable | 333.33 | 313.15 | +6.44% | | Total Liabilities | 118.79 | 115.23 | +3.04% | | Gearing Ratio | 21.23% | 20.68% | +0.55% | | Bank Borrowings Repayable within One Year | 10.00 | 10.00 | 0% | - Accounts receivable accounted for approximately **59.56%** of the Group's total assets[22](index=22&type=chunk) [Cash Flow Analysis](index=9&type=section&id=Cash%20Flow%20Analysis) The Group's operating cash flow turned from net outflow to net inflow of RMB 0.53 million, and investing cash flow also turned to net inflow of RMB 1.56 million, while financing cash flow became a net outflow of RMB 0.48 million 2025 H1 Cash Flow | Activity Type | 2025 H1 (RMB million) | 2024 H1 (RMB million) | | :--- | :--- | :--- | | Net Cash from (Used in) Operating Activities | +0.53 (Inflow) | (21.30) (Outflow) | | Net Cash from (Used in) Investing Activities | +1.56 (Inflow) | (7.26) (Outflow) | | Net Cash (Used in) from Financing Activities | (0.48) (Outflow) | +4.23 (Inflow) | [Capital Management](index=9&type=section&id=Capital%20Management) The Group aims to ensure continuous operation and provide adequate shareholder returns by balancing high returns with a sound capital structure, with no changes to objectives - The capital management objective is to ensure continuous operation and provide adequate returns to equity holders[24](index=24&type=chunk) - During the reporting period, the Group made no changes to its capital management objectives, policies, or procedures[24](index=24&type=chunk) [Capital Expenditure](index=9&type=section&id=Capital%20Expenditure) Due to the nature of its business, the Group's capital expenditure is minimal, primarily for office equipment, with no significant capital expenditure during the reporting period - The Group's capital expenditure is minimal, primarily for office equipment expenses[25](index=25&type=chunk) - During the reporting period, the Group incurred no significant capital expenditure[25](index=25&type=chunk) [Risk Management and Internal Control System](index=9&type=section&id=Risk%20Management%20and%20Internal%20Control%20System) The Group maintains a comprehensive risk management and internal control system covering credit, liquidity, interest rate, operational, and legal compliance risks, which the Board deems effective and adequate - The Group is committed to maintaining a comprehensive risk management and internal control system to address various risks and enhance risk control capabilities[26](index=26&type=chunk) - The internal audit department is responsible for analyzing and evaluating the risk management and internal control system, with results reported to the Audit Committee and the Board[27](index=27&type=chunk) - The Board considers the risk management and internal control system effective and adequate in all material aspects[27](index=27&type=chunk) [Human Resources](index=10&type=section&id=Human%20Resources) As of June 30, 2025, the Group's full-time employees decreased to 64, leading to a 44.60% year-on-year reduction in employee benefit expenses, with compensation based on market conditions, experience, and performance Employee Count and Benefit Expense Changes | Indicator | June 30, 2025 | June 30, 2024 | Change Rate | | :--- | :--- | :--- | :--- | | Full-time Employees | 64 | 86 | -25.58% | | Employee Benefit Expenses (RMB million) | 0.52 | 0.94 | -44.60% | - The decrease in employee benefit expenses was primarily due to a reduction in the number of full-time employees[28](index=28&type=chunk) [Contingent Liabilities](index=10&type=section&id=Contingent%20Liabilities) As of June 30, 2025, the Group had no significant contingent liabilities - As of June 30, 2025, the Group had no significant contingent liabilities[29](index=29&type=chunk) [Capital Commitments](index=11&type=section&id=Capital%20Commitments) As of June 30, 2025, the Group had no contracted but unprovided capital commitments, except for disclosed major acquisitions or disposals and significant investments - As of June 30, 2025, the Group had no contracted but unprovided capital commitments, except for those disclosed in item 13[30](index=30&type=chunk) [Liquidity, Financial Resources, and Capital Structure](index=11&type=section&id=Liquidity%2C%20Financial%20Resources%2C%20and%20Capital%20Structure) As of June 30, 2025, the Group's net current assets and cash and cash equivalents both increased, while bank borrowings remained stable Liquidity Position | Indicator | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | | :--- | :--- | :--- | | Net Current Assets | 297.83 | 294.83 | | Cash and Cash Equivalents | 27.69 | 26.08 | | Bank Borrowings Repayable within One Year | 10.00 | 10.00 | [Events After Reporting Period](index=11&type=section&id=Events%20After%20Reporting%20Period) No other significant events affecting the Group occurred after the reporting period, apart from those already disclosed in this report - No other significant events affecting the Group occurred after the reporting period, apart from those disclosed in this report[32](index=32&type=chunk) [Major Acquisitions or Disposals and Significant Investments](index=11&type=section&id=Major%20Acquisitions%20or%20Disposals%20and%20Significant%20Investments) The Group completed the disposal of 5G base station assets during the period and holds significant investments in associates and financial assets at fair value through profit or loss, primarily in strategic emerging industries - The Group's non-wholly owned subsidiary sold 18 base stations and 105 base stations for a total consideration of **RMB 999,670.5** and **RMB 8,750,000**, respectively[33](index=33&type=chunk)[34](index=34&type=chunk) - The Group's investment strategy aims to indirectly participate in rapidly developing industries with broad market prospects and explore potential business cooperation opportunities[36](index=36&type=chunk) Significant Investment Details as of June 30, 2025 | Investment Name | Investment Cost (RMB thousand) | Shareholding Percentage | Percentage of Total Assets Book Value | Book Value/Fair Value (RMB thousand) | Share of (Loss) Profit (RMB thousand) | | :--- | :--- | :--- | :--- | :--- | :--- | | Shanghai Kuaiyi Mingshang Cloud Technology Co., Ltd. | 50,000 | 20.81% | 8.93% | 45,760 | (806) | | Zhuhai Huihe Guangjing Venture Capital Fund (Limited Partnership) | 30,000 | 33.57% | 5.36% | 18,207 | – | | Beijing Shuncheng Health Investment Enterprise (Limited Partnership) | 30,000 | 9.9% | 5.36% | 22,202 | – | [Pledged Assets](index=13&type=section&id=Pledged%20Assets) As of June 30, 2025, the Group had no pledged assets - As of June 30, 2025, the Group had no pledged assets[39](index=39&type=chunk) [Exchange Rate Risk](index=13&type=section&id=Exchange%20Rate%20Risk) The Group's income, expenses, assets, and liabilities are primarily denominated in RMB, with no significant impact from exchange rate fluctuations on operating liquidity or hedging activities during the period - The Group's income and expenses are primarily denominated in RMB, as are most assets and liabilities[40](index=40&type=chunk) - During the reporting period, the Group experienced no significant impact or difficulties on operating liquidity due to exchange rate fluctuations, nor did it engage in hedging transactions or forward contract arrangements[40](index=40&type=chunk) [Future Plans for Major Investments or Capital Assets](index=13&type=section&id=Future%20Plans%20for%20Major%20Investments%20or%20Capital%20Assets) As of June 30, 2025, the Group had no specific plans for acquiring any major investments or capital assets, other than those disclosed in major acquisitions or disposals and significant investments - As of June 30, 2025, the Group had no specific plans for acquiring any major investments or capital assets, other than those disclosed in item 13 above[41](index=41&type=chunk) [Other Information](index=14&type=section&id=Other%20Information) This section covers corporate governance, shareholder disclosures, and other statutory information [Audit Committee](index=14&type=section&id=Audit%20Committee) The Company's Audit Committee, comprising three independent non-executive directors, has reviewed the Group's unaudited condensed consolidated interim financial statements and interim report for the six months ended June 30, 2025 - The Audit Committee comprises three independent non-executive directors: Mr. Liu Shengwen (Chairman), Mr. Han Liang, and Mr. Tong Qiang[44](index=44&type=chunk) - The Audit Committee has reviewed the Group's unaudited condensed consolidated interim financial statements and interim report for the six months ended June 30, 2025[45](index=45&type=chunk) [Disclosure of Interests](index=14&type=section&id=Disclosure%20of%20Interests) As of June 30, 2025, major shareholders and other persons held interests in the Company's shares, with Beijing Dayuan Tiandi Real Estate Development Co., Ltd. and its associates holding 22.26% and Shenzhen Zhonglian Jinkong Investment Development Co., Ltd. and its associates holding 19.60% Major Shareholder Interests as of June 30, 2025 | Shareholder Name/Individual | Share Type | Nature of Interest | Number of Shares with Interest in Total Share Capital of the Company | Percentage (Approx.) | | :--- | :--- | :--- | :--- | :--- | | Beijing Dayuan Tiandi Real Estate Development Co., Ltd. | Domestic Shares | Beneficial Owner | 80,000,000 | 22.26% | | Mr. Zhao Dehua | Domestic Shares | Interest of Controlled Corporation | 80,000,000 | 22.26% | | Mr. Gong Liang | Domestic Shares | Interest of Controlled Corporation | 80,000,000 | 22.26% | | Shenzhen Zhonglian Jinkong Investment Development Co., Ltd. | Unlisted Foreign Shares/Domestic Shares | Beneficial Owner | 75,445,200 | 19.60% | | Hainan Mujing Chengyuan Technology Partnership (Limited Partnership) | Unlisted Foreign Shares/Domestic Shares | Interest of Controlled Corporation | 75,445,200 | 19.60% | | Mr. Gong Changjiu | Unlisted Foreign Shares/Domestic Shares | Interest of Controlled Corporation | 75,445,200 | 19.60% | | Mr. Xu Dongsheng | Unlisted Foreign Shares/Domestic Shares | Interest of Controlled Corporation | 75,445,200 | 19.60% | | Beijing Youke Yu Technology Development Co., Ltd. | Unlisted Foreign Shares | Beneficial Owner | 46,714,200 | 13.00% | | Beijing Hengsheng Rongcheng Commercial and Trading Co., Ltd. | Unlisted Foreign Shares | Beneficial Owner | 32,340,600 | 9.00% | | KKC Capital Limited | H Shares | Investment Manager | 9,408,000 | 2.62% | | A Plus Capital Management Limited | H Shares | Investment Manager | 9,318,000 | 2.59% | - The Company has a total of **359,340,000** shares issued, including **120,000,000** domestic shares, **89,840,000** H shares, and **149,500,000** unlisted foreign shares[47](index=47&type=chunk) [Securities Interests of Directors, Supervisors, and Chief Executive](index=16&type=section&id=Securities%20Interests%20of%20Directors%2C%20Supervisors%2C%20and%20Chief%20Executive) As of June 30, 2025, no directors, supervisors, or chief executive of the Company held any disclosable 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 executive of the Company held any disclosable interests or short positions in the shares, underlying shares, or debentures of the Company or its associated corporations[50](index=50&type=chunk) [Dividends](index=16&type=section&id=Dividends) The Board does not recommend the payment of any interim dividend for the reporting period - The Board does not recommend the payment of any interim dividend for the reporting period[51](index=51&type=chunk) [Purchase, Sale, or Redemption of the Company's Listed Securities](index=16&type=section&id=Purchase%2C%20Sale%2C%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, and the Company held no treasury shares - During the reporting period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[52](index=52&type=chunk) - As of June 30, 2025, and up to the date of this report, the Company held no treasury shares[52](index=52&type=chunk) [Competing Interests](index=16&type=section&id=Competing%20Interests) As of June 30, 2025, no directors, controlling shareholders of the Company, or their respective close associates had any interests in businesses competing or potentially competing with the Group's business - As of June 30, 2025, no directors, controlling shareholders of the Company, or their respective close associates had any interests in any business competing or potentially competing with the Group's business[53](index=53&type=chunk) [Securities Transactions by Directors and Supervisors](index=16&type=section&id=Securities%20Transactions%20by%20Directors%20and%20Supervisors) The Group has adopted a code of conduct for securities transactions by directors and supervisors, and all have confirmed compliance with the required standards - The Group has adopted a code of conduct for securities transactions by directors and supervisors, with terms no less exacting than the required standards set out in the GEM Listing Rules[54](index=54&type=chunk) - All directors and supervisors confirmed their compliance with the required standards and code of conduct for the six months ended June 30, 2025[54](index=54&type=chunk) [Changes in Information of Directors and Supervisors](index=16&type=section&id=Changes%20in%20Information%20of%20Directors%20and%20Supervisors) There were no changes in the information of directors and supervisors requiring disclosure under the GEM Listing Rules - No changes in the information of directors and supervisors requiring disclosure under Rule 17.50A(1) of the GEM Listing Rules[55](index=55&type=chunk) [Corporate Governance and Culture](index=17&type=section&id=Corporate%20Governance%20and%20Culture) The Company is committed to high corporate governance standards and core values of integrity, responsibility, and innovation, acknowledging a deviation where the Chairman and CEO roles are held by the same person for operational efficiency - The Company has adopted the principles set out in the Corporate Governance Code, committed to maintaining high standards of corporate governance practices[57](index=57&type=chunk) - The Group's core principles include integrity and code of conduct, honesty, responsibility, innovation, and dedication, aiming to build a strong and efficient workforce[59](index=59&type=chunk)[60](index=60&type=chunk) - A deviation exists where the roles of Chairman and Chief Executive Officer are combined and held by Mr. Li Peng, which the Board believes facilitates business strategy execution and maximizes operational efficiency[61](index=61&type=chunk) [Share Incentive Scheme](index=17&type=section&id=Share%20Incentive%20Scheme) The Group had no share incentive scheme during the reporting period - The Group had no share incentive scheme during the reporting period[62](index=62&type=chunk) [Condensed Consolidated Interim Financial Statements](index=18&type=section&id=Condensed%20Consolidated%20Interim%20Financial%20Statements) This section presents the Group's condensed consolidated interim financial statements, including the statement of profit or loss, financial position, changes in equity, and cash flows [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=18&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For the six months ended June 30, 2025, the Group's revenue from continuing operations was RMB 46.613 million, with a gross profit of RMB 12.901 million, and a narrowed loss for the period Summary of Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income | Indicator | Six Months Ended June 30, 2025 (RMB thousand) | Six Months Ended June 30, 2024 (RMB thousand) | | :--- | :--- | :--- | | Revenue | 46,613 | 25,202 | | Cost of Sales | (33,712) | (12,521) | | Gross Profit | 12,901 | 12,681 | | Loss Before Income Tax | (1,067) | (1,795) | | Income Tax Expense | (329) | (1,110) | | Loss and Total Comprehensive Expenses for the Period | (1,394) | (2,973) | | Loss Attributable to Owners of the Company for the Period | (1,137) | 258 (Profit) | | Basic and Diluted Loss Per Share (RMB cents) | (0.32) | 0.04 (Earnings) | [Condensed Consolidated Statement of Financial Position](index=19&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the Group's total assets were RMB 559.642 million, with current assets at RMB 416.178 million, total liabilities at RMB 118.785 million, and net assets at RMB 440.857 million Summary of Condensed Consolidated Statement of Financial Position | Indicator | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Non-current Assets | 143,464 | 147,481 | | Current Assets | 416,178 | 410,055 | | Total Assets | 559,642 | 557,536 | | Current Liabilities | 118,347 | 115,229 | | Non-current Liabilities | 438 | 56 | | Net Assets | 440,857 | 442,251 | | Equity Attributable to Owners of the Company | 435,835 | 436,972 | | Non-controlling Interests | 5,022 | 5,279 | | Total Equity | 440,857 | 442,251 | - Accounts receivable amounted to **RMB 333,329 thousand**, representing a significant portion of current assets[66](index=66&type=chunk) [Condensed Consolidated Statement of Changes in Equity](index=21&type=section&id=Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) For the six months ended June 30, 2025, the loss attributable to owners of the Company was RMB 1.137 million, reducing total equity attributable to owners from RMB 436.972 million to RMB 435.835 million Summary of Condensed Consolidated Statement of Changes in Equity | Indicator | January 1, 2025 (RMB thousand) | Loss and Total Comprehensive Expenses for the Period (RMB thousand) | June 30, 2025 (RMB thousand) | | :--- | :--- | :--- | :--- | | Total Attributable to Owners of the Company | 436,972 | (1,137) | 435,835 | | Non-controlling Interests | 5,279 | (257) | 5,022 | | Total Equity | 442,251 | (1,394) | 440,857 | - In the corresponding period of 2024, profit attributable to owners of the Company was **RMB 258 thousand**[70](index=70&type=chunk) [Condensed Consolidated Statement of Cash Flows](index=22&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) For the six months ended June 30, 2025, the Group generated net cash of RMB 0.531 million from operating activities and RMB 1.561 million from investing activities, while using RMB 0.479 million in financing activities, increasing cash and cash equivalents to RMB 27.690 million Summary of Condensed Consolidated Statement of Cash Flows | Activity Type | Six Months Ended June 30, 2025 (RMB thousand) | Six Months Ended June 30, 2024 (RMB thousand) | | :--- | :--- | :--- | | Net Cash from (Used in) Operating Activities | 531 | (21,299) | | Net Cash from (Used in) Investing Activities | 1,561 | (7,258) | | Net Cash (Used in) from Financing Activities | (479) | 4,228 | | Net Increase (Decrease) in Cash and Cash Equivalents | 1,613 | (24,329) | | Cash and Cash Equivalents at End of Period | 27,690 | 37,934 | - Operating cash flow turned from a net outflow in the prior year to a net inflow, indicating improved operating conditions[72](index=72&type=chunk) [Notes to the Condensed Consolidated Interim Financial Statements](index=23&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Interim%20Financial%20Statements) This section provides detailed notes and explanations supporting the condensed consolidated interim financial statements [General Information](index=23&type=section&id=General%20Information) Fuyin Financial Leasing (Shenzhen) Co., Ltd., established in China in 2012 and listed on HKEX GEM in 2017, engages in diverse financial and energy storage businesses - The Company was established in China on December 7, 2012, and has been listed on the HKEX GEM since May 23, 2017[73](index=73&type=chunk) - Principal businesses include financial leasing, consulting services, customer referral services, as well as factoring, medical equipment supply, investment holding, and energy storage business[73](index=73&type=chunk) [Basis of Preparation](index=23&type=section&id=Basis%20of%20Preparation) The Group's condensed consolidated financial statements are prepared in RMB in accordance with HKAS 34 and applicable GEM Listing Rules disclosure requirements - The condensed consolidated financial statements are prepared in accordance with HKAS 34 issued by the HKICPA and the applicable disclosure requirements of Chapter 18 of the GEM Listing Rules[74](index=74&type=chunk) - The financial statements are presented in RMB, which is also the functional currency of the Group's principal subsidiaries[74](index=74&type=chunk) [Application of Amendments to Hong Kong Financial Reporting Standards](index=23&type=section&id=Application%20of%20Amendments%20to%20Hong%20Kong%20Financial%20Reporting%20Standards) The Group first applied HKAS 21 (Amendment) "Lack of Exchangeability" during this interim period, with no significant impact expected on current or future periods - The Group first applied HKAS 21 (Amendment) "Lack of Exchangeability" issued by the HKICPA during this interim period[75](index=75&type=chunk) - The aforementioned standard has no impact on the Group's accounting policies and is not expected to have a significant impact on the current or future periods[75](index=75&type=chunk) [Segment Information](index=24&type=section&id=Segment%20Information) The Group has three reportable segments: financial and consulting, trading operations, and energy storage, with energy storage showing significant revenue growth and all revenue and non-current assets primarily from China - The Group has three reportable segments: financial and consulting business, trading operations business, and energy storage business[76](index=76&type=chunk)[78](index=78&type=chunk) 2025 H1 Revenue by Segment | Segment | 2025 H1 Revenue (RMB thousand) | 2024 H1 Revenue (RMB thousand) | | :--- | :--- | :--- | | Financial and Consulting Business | 6,816 | 11,699 | | Trading Operations Business | 14,066 | 12,453 | | Energy Storage Business | 25,731 | 1,050 | | Total | 46,613 | 25,202 | - All of the Group's revenue and non-current assets are primarily derived from China[79](index=79&type=chunk) - For the six months ended June 30, 2025, no single customer contributed **10%** or more of the Group's revenue[79](index=79&type=chunk) [Revenue](index=25&type=section&id=Revenue) The Group's total revenue from continuing operations for H1 2025 was RMB 46.613 million, primarily from energy storage services and sales of electronic products, while factoring income decreased 2025 H1 Revenue from Continuing Operations Analysis | Revenue Source | 2025 H1 (RMB thousand) | 2024 H1 (RMB thousand) | | :--- | :--- | :--- | | Energy Storage Service Income | 25,731 | 1,050 | | Sales of Goods – Electronic Products | 14,066 | 12,453 | | Finance Lease Income | – | 9 | | Sale and Leaseback Transaction Income | 540 | 111 | | Factoring Income | 6,276 | 11,579 | | Total | 46,613 | 25,202 | - Revenue from contracts with customers, disaggregated by timing of recognition, includes **RMB 14,066 thousand** recognized at a point in time and **RMB 25,731 thousand** recognized over time[80](index=80&type=chunk) [Other Income and Gains and Losses](index=26&type=section&id=Other%20Income%20and%20Gains%20and%20Losses) The Group's total other income and gains for H1 2025 decreased to RMB 1.356 million from RMB 2.585 million in the prior year, mainly due to reduced maintenance service income 2025 H1 Other Income and Gains | Item | 2025 H1 (RMB thousand) | 2024 H1 (RMB thousand) | | :--- | :--- | :--- | | Bank Interest Income | 85 | 248 | | Net Exchange Gain or Loss | 153 | – | | Maintenance Service Income | 1,027 | 1,901 | | Others | 91 | 2 | | Total | 1,356 | 2,585 | - Maintenance service income decreased from **RMB 1.901 million** to **RMB 1.027 million**, being the primary reason for the decline in other income[82](index=82&type=chunk) [Loss Before Tax](index=26&type=section&id=Loss%20Before%20Tax) The Group's loss before tax for H1 2025 was RMB 1.067 million, primarily composed of cost of sales, staff costs, depreciation, and impairment losses 2025 H1 Loss Before Tax Components | Item | 2025 H1 (RMB thousand) | 2024 H1 (RMB thousand) | | :--- | :--- | :--- | | Cost of Sales | 33,712 | 12,521 | | Staff Costs | 6,789 | 9,383 | | Depreciation of Property, Plant and Equipment | 174 | 556 | | Depreciation of Right-of-Use Assets | 505 | 575 | | Net Impairment Loss on Finance Lease Receivables and Accounts Receivable | 1,351 | 1,377 | - Staff costs (including directors' emoluments) decreased from **RMB 9.383 million** to **RMB 6.789 million**[83](index=83&type=chunk) [Discontinued Operations](index=27&type=section&id=Discontinued%20Operations) The Group entered into an asset transfer agreement on May 16, 2024, to dispose of its 5G base station business segment, which is classified as a discontinued operation, generating a pre-tax profit of RMB 2 thousand despite the disposal not yet being completed - The Group disposed of assets from its 5G base station business segment to optimize resource allocation and enhance operational quality and efficiency[84](index=84&type=chunk) - As of June 30, 2025, the disposal had not yet been completed and is expected to be completed within the next twelve months[84](index=84&type=chunk) 2025 H1 Discontinued Operations Performance | Item | 2025 H1 (RMB thousand) | 2024 H1 (RMB thousand) | | :--- | :--- | :--- | | Revenue | – | 808 | | Profit (Loss) Before Tax | 2 | (57) | | Profit (Loss) for the Period | 2 | (68) | [Income Tax Expense](index=28&type=section&id=Income%20Tax%20Expense) The Group's income tax expense for H1 2025 was RMB 0.329 million, a significant 70.36% decrease from the prior year, mainly due to reduced income tax provisions 2025 H1 Income Tax Expense | Item | 2025 H1 (RMB thousand) | 2024 H1 (RMB thousand) | | :--- | :--- | :--- | | Income Tax | 329 | 1,074 | | Deferred Tax | – | 36 | | Total | 329 | 1,110 | - Provision for PRC corporate income tax is calculated at a statutory tax rate of **25%**[88](index=88&type=chunk) [(Loss) Earnings Per Share](index=28&type=section&id=(Loss)%20Earnings%20Per%20Share) The basic and diluted loss per share attributable to owners of the Company was RMB 0.32 cents, primarily from continuing operations 2025 H1 (Loss) Earnings Per Share | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | (Loss) Profit for the Year Attributable to Owners of the Company Used for Calculating Basic and Diluted (Loss) Earnings Per Share | | | | From Continuing Operations | (1,138) | (7,463) | | From Discontinued Operations | 1 | 590 | | Number of Ordinary Shares | 359,340,000 | 359,340,000 | | Basic and Diluted (Loss) Earnings Per Share (RMB cents) | | | | From Continuing Operations | (0.32) | (2.08) | | From Discontinued Operations | – | 0.17 | | Total Basic (Loss) Earnings Per Share | (0.32) | (1.91) | [Dividends](index=29&type=section&id=Dividends) No dividends were paid or proposed for the six months ended June 30, 2025, nor were any proposed since the end of the reporting period - No dividends were paid or proposed for the six months ended June 30, 2025[90](index=90&type=chunk) [Property, Plant and Equipment and Right-of-Use Assets](index=29&type=section&id=Property%2C%20Plant%20and%20Equipment%20and%20Right-of-Use%20Assets) For the six months ended June 30, 2025, the Group added RMB 24 thousand in property, plant and equipment and RMB 683 thousand in right-of-use assets, with no write-offs or disposals during the period 2025 H1 Additions to Property, Plant and Equipment/Right-of-Use Assets | Asset Type | 2025 H1 Additions (RMB thousand) | 2024 H1 Additions (RMB thousand) | | :--- | :--- | :--- | | Property, Plant and Equipment | 24 | 446 | | Right-of-Use Assets | 683 | 11 | - No write-offs or disposals of property, plant and equipment occurred for the six months ended June 30, 2025[91](index=91&type=chunk) [Financial Assets at Fair Value Through Profit or Loss](index=29&type=section&id=Financial%20Assets%20at%20Fair%20Value%20Through%20Profit%20or%20Loss) As of June 30, 2025, the Group's total financial assets at fair value through profit or loss amounted to RMB 69.465 million, primarily investments in Puqiang Times, Zhuhai Huihe, Beijing Shuncheng, Shenzhen Shenchuang, and Yixing, with a partial capital refund from Zhuhai Huihe Financial Assets at Fair Value Through Profit or Loss as of June 30, 2025 | Investment Name | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Puqiang Times Preferred Shares | 5,723 | 5,723 | | Equity in Zhuhai Huihe | 18,207 | 19,817 | | Equity in Beijing Shuncheng | 22,202 | 22,202 | | Shenzhen Shenchuang Ordinary Shares | 14,350 | 14,350 | | Equity in Yixing | 8,983 | 8,983 | | Total | 69,465 | 71,075 | - The Group received a partial capital investment refund of **RMB 1.610 million** from Zhuhai Huihe, with no change in ownership after withdrawal[94](index=94&type=chunk) - No fair value gains or losses were recognized for most financial assets during the period ended June 30, 2025[94](index=94&type=chunk) [Finance Lease Receivables](index=30&type=section&id=Finance%20Lease%20Receivables) As of June 30, 2025, the present value of minimum lease payments for the Group's finance lease receivables was RMB 10.790 million, reduced to RMB 0.418 million after credit loss provisions, with all receivables overdue by more than 180 days classified as credit-impaired Finance Lease Receivables as of June 30, 2025 | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Present Value of Minimum Lease Payments | 10,790 | 10,977 | | Less: Provision for Credit Losses | (10,372) | (8,967) | | Net Amount | 418 | 2,010 | - Finance lease receivables overdue by more than **180 days** amounted to **RMB 418 thousand**, classified as overdue and credit-impaired[96](index=96&type=chunk) - Provision for impairment losses on finance lease receivables increased from **RMB 8.967 million** at the beginning of the year to **RMB 10.372 million**[96](index=96&type=chunk) [Accounts Receivable](index=31&type=section&id=Accounts%20Receivable) As of June 30, 2025, the Group's total accounts receivable amounted to RMB 333.329 million, primarily comprising factoring receivables with recourse and trade receivables, with detailed aging analysis and credit quality assessments Accounts Receivable Composition as of June 30, 2025 | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Sale and Leaseback Receivables | 6,574 | 7,854 | | Factoring Receivables with Recourse | 215,241 | 205,351 | | Trade Receivables | 108,567 | 96,340 | | Operating Lease Receivables | 2,947 | 4,406 | | Total Accounts Receivable Less Provision for Credit Losses | 333,329 | 313,951 | - The effective interest rate for sale and leaseback receivables is **6.14%**, with an overdue interest rate of **0.1%** per day[102](index=102&type=chunk)[101](index=101&type=chunk) - Factoring receivables have a credit period of **0 to 30 days**, with an overdue interest rate of **0.1%** per day[105](index=105&type=chunk)[107](index=107&type=chunk) - Trade receivables have a credit period of **0 to 30 days**; as of June 30, 2025, amounts overdue within 30 days were **RMB 30,036 thousand**[113](index=113&type=chunk)[112](index=112&type=chunk) [Trade and Other Payables](index=37&type=section&id=Trade%20and%20Other%20Payables) As of June 30, 2025, the Group's total trade and other payables amounted to RMB 98.306 million, with trade payables at RMB 88.780 million and an average credit period of 30 days Trade and Other Payables as of June 30, 2025 | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Trade Payables | 88,780 | 86,814 | | Accrued Expenses | 78 | 1,707 | | Deposits from Finance Lease Customers | 266 | 582 | | VAT Payable | 3,615 | 4,166 | | Others | 5,567 | 806 | | Total | 98,306 | 94,075 | - The average credit period for purchases of goods for the period ended June 30, 2025, was **30 days**[122](index=122&type=chunk) [Bank Borrowings](index=37&type=section&id=Bank%20Borrowings) As of June 30, 2025, the Group's unsecured bank borrowings repayable within one year amounted to RMB 10.000 million, bearing fixed annual interest rates from 2.95% to 3.05% Bank Borrowings as of June 30, 2025 | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Unsecured Bank Borrowings Classified as Current Liabilities | 10,000 | 10,000 | | Book Value of Bank Borrowings Repayable within One Year | 10,000 | 10,000 | - Bank borrowings are denominated in RMB, bear fixed annual interest rates from **2.95%** to **3.05%**, and are used for operating purposes[123](index=123&type=chunk) [Share Capital](index=37&type=section&id=Share%20Capital) As of June 30, 2025, the Company's total registered domestic and H share capital was 359,340,000 shares, amounting to RMB 359.340 million, consistent with 2024 Share Capital as of June 30, 2025 | Item | Number of Shares | RMB thousand | | :--- | :--- | :--- | | Registered Domestic Shares and H Shares | 359,340,000 | 359,340 | [Related Party Transactions](index=38&type=section&id=Related%20Party%20Transactions) The Group and its related parties engaged in factoring income and lease payments, with total receivables from related companies amounting to RMB 22.900 million as of June 30, 2025, and key management personnel emoluments at RMB 1.274 million 2025 H1 Related Party Transaction Income | Related Party Name | Nature of Transaction | 2025 H1 (RMB thousand) | 2024 H1 (RMB thousand) | | :--- | :--- | :--- | :--- | | Dayuan Tiandi | Factoring Transaction Income | 212 | 381 | | Longding Huayuan | Factoring Transaction Income | 546 | 1,098 | | Longding Huayuan | Lease Payments | 82 | 82 | | Longding Huayuan | Lease Liability Interest | 4 | 7 | Receivables from Related Companies as of June 30, 2025 | Related Party Name | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Longding Huayuan Factoring Receivables | 22,900 | 22,900 | | Dayuan Tiandi Factoring Receivables | – | 7,950 | | Total | 22,900 | 30,850 | 2025 H1 Key Management Personnel Emoluments | Item | 2025 H1 (RMB thousand) | 2024 H1 (RMB thousand) | | :--- | :--- | :--- | | Salaries, Allowances, and Benefits in Kind | 1,216 | 855 | | Contributions to Defined Contribution Plans | 58 | 55 | | Total | 1,274 | 910 | [Capital Commitments](index=39&type=section&id=Capital%20Commitments) As of June 30, 2025, the Group's contracted but unprovided capital commitments primarily involved an investment in a fund, totaling RMB 12.023 million Capital Commitments as of June 30, 2025 | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Commitment to Invest in a Fund | 12,023 | 6,000 | [Contingent Liabilities](index=39&type=section&id=Contingent%20Liabilities) As of June 30, 2025, the Group had no significant contingent liabilities - As of June 30, 2025, the Group had no significant contingent liabilities[130](index=130&type=chunk) [Financial Instruments Measured at Fair Value](index=39&type=section&id=Financial%20Instruments%20Measured%20at%20Fair%20Value) As of June 30, 2025, the Group's financial instruments measured at fair value through profit or loss totaled RMB 69.465 million, primarily classified within Level 3 (unobservable inputs) and Level 2 (observable inputs) - Fair value measurements are categorized into Level 1 (quoted prices in active markets), Level 2 (observable inputs), and Level 3 (unobservable inputs)[131](index=131&type=chunk) 2025 H1 Financial Instruments Measured at Fair Value by Hierarchy | Item | Level 1 (RMB thousand) | Level 2 (RMB thousand) | Level 3 (RMB thousand) | Total (RMB thousand) | | :--- | :--- | :--- | :--- | :--- | | Financial Assets at Fair Value Through Profit or Loss | | | | | | – Preferred Shares of Unlisted Investments | – | – | 5,723 | 5,723 | | – Equity in Zhuhai Huihe | – | – | 18,207 | 18,207 | | – Equity in Beijing Shuncheng | – | – | 22,202 | 22,202 | | – Equity in Shenzhen Shenchuang | – | 14,350 | – | 14,350 | | – Equity in Yixing | – | – | 8,983 | 8,983 | | Total | – | 14,350 | 55,115 | 69,465 | - No transfers between levels occurred during the period[132](index=132&type=chunk)

[Company Profile](index=6&type=section&id=%E5%85%AC%E5%8F%B8%E7%AE%80%E4%BB%8B) [Corporate Information](index=6&type=section&id=%E4%BC%81%E4%B8%9A%E4%BF%A1%E6%81%AF) Grandshores Construction Development disclosed its basic corporate information, including board members, committee composition, company secretary, authorized representatives, registered office, headquarters, Hong Kong principal place of business, share registrar, principal bankers, auditors, legal advisors, and company website - The Chairman of the Board is Mr. Kong Fanxing, the Chief Executive Officer is Mr. Zhan Jing, and the Co-Chief Financial Officer is Mr. Tang Li[8](index=8&type=chunk) - The company's registered office is in the Cayman Islands, its headquarters are in Tianjin, China, and its principal place of business in Hong Kong is in Causeway Bay[8](index=8&type=chunk)[9](index=9&type=chunk) - The company's shares are listed on the Main Board of The Stock Exchange of Hong Kong Limited, with stock code 9930[9](index=9&type=chunk) [Company Overview](index=8&type=section&id=%E5%85%AC%E5%8F%B8%E7%AE%80%E4%BB%8B) Grandshores Construction Development is a leading equipment operation service provider in China, ranking among the top global leasing enterprises, offering one-stop 'product + service' solutions with a diverse equipment portfolio and strong service capabilities, boasting the largest number of service outlets among Chinese providers and actively expanding overseas - Grandshores Construction Development is a leading equipment operation service provider in China, offering one-stop 'product + service' integrated solutions[10](index=10&type=chunk) - The company has the largest number of service outlets among equipment operation service providers in China and has deployed in multiple overseas regions to enhance global service capabilities[10](index=10&type=chunk) - The company's shares were listed on the Main Board of the Hong Kong Stock Exchange on May 25, 2023, with its direct controlling company being Far East Horizon Limited (stock code: 3360)[10](index=10&type=chunk) [Performance Overview](index=10&type=section&id=%E6%A5%AD%E7%B8%BE%E6%A6%82%E8%A6%BD) Grandshores Construction Development reported a 10.7% revenue decrease to RMB 4,350,062 thousand in H1 2025, with profit for the period plummeting 86.8% to RMB 35,490 thousand, alongside a gross margin decline to 21.6% and a slight rise in the asset-liability ratio to 69.0% Key Financial Data for H1 2025 (RMB thousands) | Metric | H1 2025 | H1 2024 | Change % | | :--- | :--- | :--- | :--- | | Total Revenue | 4,350,062 | 4,872,421 | -10.7% | | Operating Lease Service Revenue | 2,265,244 | 1,895,622 | 19.5% | | Engineering Technical Service Revenue | 1,138,882 | 1,946,261 | -41.5% | | Asset Management and Other Service Revenue | 945,936 | 1,030,538 | -8.2% | | Gross Profit | 940,667 | 1,559,325 | -39.7% | | Profit Before Tax | 50,276 | 406,890 | -87.6% | | Profit for the Period Attributable to Ordinary Equity Holders of the Company | 35,490 | 268,228 | -86.8% | | Basic Earnings Per Share (RMB) | 0.011 | 0.084 | -86.9% | | Gross Profit Margin | 21.6% | 32.0% | -10.4% | | Average Return on Equity | 0.6% | 4.9% | -4.3% | | Average Return on Total Assets | 0.2% | 1.6% | -1.4% | | Asset-Liability Ratio | 69.0% | 68.7% | 0.3% | | Total Assets | 36,581,356 | 36,434,181 (End of 2024) | 0.4% | | Total Liabilities | 25,253,610 | 24,975,831 (End of 2024) | 1.1% | - EBITDA margin (non-HKFRS measure) increased to **45.3%** from **41.1%** in the prior year period[10](index=10&type=chunk) [Management Discussion and Analysis](index=14&type=section&id=%E7%AE%A1%E7%90%86%E5%B1%A4%E8%AE%A8%E8%AE%BA%E4%B8%8E%E5%88%86%E6%9E%90) [1、Industry Environment and Company Response](index=14&type=section&id=1%E3%80%81%E8%A1%8C%E4%B8%9A%E7%8E%AF%E5%A2%83%E4%B8%8E%E5%85%AC%E5%8F%B8%E5%BA%94%E5%AF%B9) In H1 2025, global economic uncertainty increased while China's economy grew steadily, with the construction sector showing signs of recovery, infrastructure and manufacturing investment rising, and real estate construction area decline narrowing; the company actively responded by optimizing asset structure, refining operations, and deepening its "3+3+3" overseas development strategy through acquisitions - In H1 2025, China's GDP grew by **5.3%** year-on-year, fixed asset investment by **2.8%**, infrastructure investment by **4.6%**, and manufacturing investment by **7.5%**[16](index=16&type=chunk) - Overseas markets in countries like Malaysia, Indonesia, Vietnam, Thailand, Saudi Arabia, UAE, and Turkey show strong infrastructure investment demand, with overseas contracted project turnover increasing by **9.3%** and new contract value by **13.7%** year-on-year[18](index=18&type=chunk)[19](index=19&type=chunk)[20](index=20&type=chunk)[21](index=21&type=chunk)[24](index=24&type=chunk) - The company actively optimizes its asset structure, transitioning from investment-driven to lean operations, accelerating business diversification, and firmly implementing the "3+3+3" overseas development strategy[25](index=25&type=chunk)[26](index=26&type=chunk) - As of H1 2025, the company operates **567** service outlets globally, including **63** overseas, covering **7** countries[26](index=26&type=chunk) - During the reporting period, the company completed the acquisition of Tong Heng Machinery Sdn. Bhd., a leading Malaysian leasing enterprise, advancing its global expansion into a new stage of deep integration of "industrial capital + localized operations"[26](index=26&type=chunk) [1.1 National and Regional Environment](index=14&type=section&id=1.1%20%E5%9B%BD%E5%AE%B6%E5%8F%8A%E5%8C%BA%E5%9F%9F%E7%8E%AF%E5%A2%83) In H1 2025, China's GDP grew by 5.3%, fixed asset investment by 2.8%, infrastructure investment by 4.6%, and manufacturing investment by 7.5%, while real estate construction area decline narrowed, and overseas markets saw robust growth in contracted projects and new contracts - In H1 2025, mainland China's GDP grew by **5.3%** year-on-year, fixed asset investment by **2.8%**, infrastructure investment by **4.6%**, and manufacturing investment by **7.5%**[16](index=16&type=chunk) - China's real estate development enterprises' housing construction area decreased by **9.1%** year-on-year, with the decline narrowing compared to the same period last year[16](index=16&type=chunk) - Overseas contracted project turnover increased by **9.3%** year-on-year, and new contract value increased by **13.7%**, with Southeast Asia remaining an investment hub and the Middle East and African markets showing increased potential[18](index=18&type=chunk)[24](index=24&type=chunk) [1.2 Company Business Environment](index=16&type=section&id=1.2%20%E5%85%AC%E5%8F%B8%E4%B8%9A%E5%8A%A1%E7%8E%AF%E5%A2%83) The company primarily offers comprehensive operation services for machinery leasing, including aerial work platforms, new shoring systems, and new formwork systems, with significant market potential in China and growing overseas demand, despite challenges in the formwork sector - The company primarily provides comprehensive operation services for aerial work platforms, new shoring systems, new formwork systems, road equipment, and power equipment, while actively exploring new products such as special aerial work equipment, material handling equipment, hoisting equipment, and mining equipment[22](index=22&type=chunk) - In 2024, China's leasing market for aerial work platforms held **669,000 units**, a **12.4%** year-on-year increase, indicating further market demand release[23](index=23&type=chunk) - As of the end of 2024, the national construction market held **27 million tons** of cuplock scaffolding, a **4.7%** year-on-year increase, but the industry remains in a contraction phase, facing supply-demand imbalance and price competition[24](index=24&type=chunk) [1.3 Company Response](index=18&type=section&id=1.3%20%E5%85%AC%E5%8F%B8%E5%BA%94%E5%AF%B9) The company actively navigates complex market conditions by implementing systemic reforms and management restructuring, focusing on structural optimization and lean efficiency domestically, while steadfastly pursuing a "3+3+3" overseas development strategy to expand its global footprint through strategic acquisitions - Domestic operations focus on structural optimization and lean efficiency, dynamically adjusting asset structure and regional layout through asset transformation, inefficient asset disposal, and efficient new asset allocation[25](index=25&type=chunk) - The company accelerates business diversification, breaking through traditional housing and infrastructure limitations, and comprehensively upgrading customer marketing in various scenarios such as mining machinery leasing, marine shipyards, and petrochemicals[25](index=25&type=chunk) - The company firmly implements the "3+3+3" overseas development strategy, consolidating the Southeast Asian market, deeply exploring the potential of Saudi Arabia and UAE in the Middle East, and accelerating expansion into new countries[26](index=26&type=chunk) - During the reporting period, the company completed the acquisition of Tong Heng Machinery Sdn. Bhd., a leading Malaysian leasing enterprise, achieving deep expansion in asset categories and customer base, and promoting global layout[26](index=26&type=chunk) [2、Income Statement Analysis](index=19&type=section&id=2%E3%80%81%E5%88%A9%E6%B6%A6%E8%A1%A8%E5%88%86%E6%9E%90) In H1 2025, the company's revenue decreased by 10.7% to RMB 4,350,062 thousand, with profit before tax sharply down 87.6% to RMB 50,276 thousand and profit for the period declining 86.8%, primarily due to domestic market rental declines, material business contraction, and equipment relocation overseas, leading to a 10.4% drop in gross profit margin to 21.6% 2025年上半年利润表概览（人民币千元） | Metric | H1 2025 | H1 2024 | Change % | | :--- | :--- | :--- | :--- | | Revenue | 4,350,062 | 4,872,421 | -10.7% | | Cost of Sales | (3,409,395) | (3,313,096) | 2.9% | | Gross Profit | 940,667 | 1,559,325 | -39.7% | | Profit Before Tax | 50,276 | 406,890 | -87.6% | | Profit for the Period | 35,490 | 268,228 | -86.8% | | EBITDA (non-HKFRS measure) | 1,968,638 | 2,003,614 | -1.7% | - Revenue decreased primarily due to a continuous decline in domestic market equipment rentals, proactive contraction of material-related businesses, and the temporary impact of relocating domestic equipment overseas on utilization rates[32](index=32&type=chunk) - The overall gross profit margin decreased by **10.4%** to **21.6%**, mainly affected by market fluctuations in rental or service prices[48](index=48&type=chunk) - Income tax expense significantly decreased by **89.3%**, with the effective tax rate falling to **29.4%**, primarily due to a reduction in profit before tax and the provision for cross-border dividend withholding tax in H1 2024 which was not required this period[65](index=65&type=chunk) [2.1 Income Statement Analysis (Overview)](index=19&type=section&id=2.1%20%E5%88%A9%E6%B6%A6%E8%A1%A8%E5%88%86%E6%9E%90%EF%BC%88%E6%A6%82%E8%A7%88%EF%BC%89) In H1 2025, the company's revenue decreased by 10.7%, profit before tax significantly fell by 87.6% to RMB 50,276 thousand, and EBITDA (non-HKFRS measure) slightly declined by 1.7%, while gross profit decreased by 39.7%, and selling and administrative expenses increased by 9.2% Key Income Statement Metrics for H1 2025 (RMB thousands) | Metric | H1 2025 | H1 2024 | Change % | | :--- | :--- | :--- | :--- | | Revenue | 4,350,062 | 4,872,421 | -10.7% | | Gross Profit | 940,667 | 1,559,325 | -39.7% | | Selling and Administrative Expenses | (758,331) | (694,651) | 9.2% | | Asset Impairment Provisions | 182,796 | (162,720) | -212.3% | | Profit Before Tax | 50,276 | 406,890 | -87.6% | | Profit for the Period | 35,490 | 268,228 | -86.8% | | EBITDA (non-HKFRS measure) | 1,968,638 | 2,003,614 | -1.7% | [2.2 Revenue](index=20&type=section&id=2.2%20%E6%94%B6%E5%85%A5) Total revenue for H1 2025 decreased by 10.7% to RMB 4,350,062 thousand, primarily due to domestic market rental declines, material business contraction, and equipment relocation overseas, while overseas revenue surged by 719.8% to RMB 597,380 thousand, and customer numbers increased to approximately 367,000 - Total revenue for H1 2025 was **RMB 4,350,062 thousand**, a **10.7%** year-on-year decrease[32](index=32&type=chunk) - Overseas revenue was approximately **RMB 597,380 thousand**, a **719.8%** year-on-year increase, accounting for **13.7%** of total revenue[32](index=32&type=chunk)[46](index=46&type=chunk) - The number of customers increased to approximately **367,000** (including approximately **6,000** overseas customers), covering a wide range of fields such as municipal construction, housing construction, and transportation construction[32](index=32&type=chunk) Revenue by Business Segment for H1 2025 (RMB thousands) | Business Segment | H1 2025 | Proportion % | H1 2024 | Proportion % | Change % | | :--- | :--- | :--- | :--- | :--- | :--- | | Operating Lease Services | 2,265,244 | 52.1% | 1,895,622 | 38.9% | 19.5% | | Engineering Technical Services | 1,138,882 | 26.2% | 1,946,261 | 39.9% | -41.5% | | Asset Management and Other Services | 945,936 | 21.7% | 1,030,538 | 21.2% | -8.2% | | **Total** | **4,350,062** | **100.0%** | **4,872,421** | **100.0%** | **-10.7%** | Revenue by Geographical Segment for H1 2025 (RMB thousands) | Geographical Segment | H1 2025 | Proportion % | H1 2024 | Proportion % | Change % | | :--- | :--- | :--- | :--- | :--- | :--- | | Domestic Regions (incl. Hong Kong & Macau) | 3,752,682 | 86.3% | 4,799,552 | 98.5% | -21.8% | | Overseas Regions | 597,380 | 13.7% | 72,869 | 1.5% | 719.8% | | **Total** | **4,350,062** | **100.0%** | **4,872,421** | **100.0%** | **-10.7%** | [2.3 Gross Profit and Gross Profit Margin](index=25&type=section&id=2.3%20%E6%AF%9B%E5%88%A9%E5%8F%8A%E6%AF%9B%E5%88%A9%E7%8E%87) In H1 2025, gross profit decreased by 39.7% to RMB 940,667 thousand, with the gross profit margin falling by 10.4% to 21.6% due to market fluctuations, impacting all service segments, while overseas gross profit significantly increased by 2,638.8% Gross Profit and Gross Profit Margin by Business Segment for H1 2025 (RMB thousands) | Business Segment | H1 2025 Gross Profit | Gross Profit Margin % | H1 2024 Gross Profit | Gross Profit Margin % | Gross Profit Change % | | :--- | :--- | :--- | :--- | :--- | :--- | | Operating Lease Services | 621,196 | 27.4% | 702,774 | 37.1% | -11.6% | | Engineering Technical Services | 171,407 | 15.1% | 525,491 | 27.0% | -67.4% | | Asset Management and Other Services | 148,064 | 15.7% | 331,060 | 32.1% | -55.3% | | **Total Gross Profit / Gross Profit Margin** | **940,667** | **21.6%** | **1,559,325** | **32.0%** | **-39.7%** | Gross Profit by Geographical Segment for H1 2025 (RMB thousands) | Geographical Segment | H1 2025 Gross Profit | Proportion % | H1 2024 Gross Profit | Proportion % | Change % | | :--- | :--- | :--- | :--- | :--- | :--- | | Domestic Regions (incl. Hong Kong & Macau) | 669,585 | 71.2% | 1,549,427 | 99.4% | -56.8% | | Overseas Regions | 271,082 | 28.8% | 9,898 | 0.6% | 2,638.8% | | **Total** | **940,667** | **100.0%** | **1,559,325** | **100.0%** | **-39.7%** | [2.4 Cost of Sales and Selling and Administrative Expenses](index=27&type=section&id=2.4%20%E9%94%80%E5%94%AE%E6%88%90%E6%9C%AC%E5%8F%8A%E9%94%80%E5%94%AE%E4%B8%8E%E8%A1%8C%E6%94%BF%E5%BC%80%E6%94%AF) In H1 2025, the combined cost of sales and selling and administrative expenses increased by 4.0% to RMB 4,167,726 thousand, primarily driven by higher depreciation and amortization, trade, and sub-lease costs, despite reductions in staff and subcontracting costs and transportation fees - The combined cost of sales and selling and administrative expenses increased by **4.0%** to **RMB 4,167,726 thousand**, mainly due to increases in depreciation and amortization, and trade and sub-lease costs[53](index=53&type=chunk)[54](index=54&type=chunk) Cost of Sales and Selling and Administrative Expenses Details for H1 2025 (RMB thousands) | Item | H1 2025 | % of Revenue | H1 2024 | % of Revenue | Amount Change % | | :--- | :--- | :--- | :--- | :--- | :--- | | Depreciation and Amortization | 1,486,981 | 34.2% | 1,196,156 | 24.5% | 24.3% | | Staff and Subcontracting Costs | 944,183 | 21.7% | 1,014,150 | 20.8% | -6.9% | | Trade and Sub-lease Costs | 658,887 | 15.1% | 571,953 | 11.7% | 15.2% | | Transportation and Hoisting Fees | 304,439 | 7.0% | 448,274 | 9.2% | -32.1% | | Research and Development Expenses | 106,442 | 2.4% | 70,910 | 1.5% | 50.1% | - Research and development expenses increased by **50.1%**, primarily due to the company's efforts to upgrade its digital systems for internationalization[55](index=55&type=chunk) [2.5 Other Income and Gains](index=29&type=section&id=2.5%20%E5%85%B6%E4%BB%96%E6%94%B6%E5%85%A5%E5%8F%8A%E6%94%B6%E7%9B%8A) In H1 2025, other income and gains decreased by 2.4% to RMB 104,327 thousand, mainly due to a 60.9% reduction in interest income, despite a slight increase in government grants and a significant 132.1% rise in net fair value gains within other income Other Income and Gains for H1 2025 (RMB thousands) | Item | H1 2025 | H1 2024 | Change % | | :--- | :--- | :--- | :--- | | Interest Income | 3,923 | 10,026 | -60.9% | | Government Grants and Super Deduction Benefits | 83,250 | 82,009 | 1.5% | | Net Fair Value Gains (Others) | 10,706 | 4,612 | 132.1% | | **Total** | **104,327** | **106,938** | **-2.4%** | - The decrease in other income and gains was primarily due to reduced interest income[56](index=56&type=chunk) [2.6 Asset Impairment Provisions](index=29&type=section&id=2.6%20%E8%B5%84%E4%BA%A7%E6%8B%A8%E5%A4%87) In H1 2025, the net expected credit loss for financial assets was negative RMB 186,877 thousand, a significant shift from a positive RMB 171,117 thousand in the prior year, primarily influenced by changes in provisions for trade and contract receivables Expected Credit Loss on Financial Assets Details for H1 2025 (RMB thousands) | Item | H1 2025 | Proportion % | H1 2024 | Proportion % | Change % | | :--- | :--- | :--- | :--- | :--- | :--- | | Trade and Contract Receivables | -163,029 | 87.3% | 168,004 | 98.2% | N/A | | Bills Receivable | -26,765 | 14.3% | -5,183 | -3.0% | 416.4% | | Others | 2,917 | -1.6% | 8,296 | 4.8% | -64.8% | | **Total** | **-186,877** | **100.0%** | **171,117** | **100.0%** | **N/A** | - The company adopts a prudent strategy to assess asset impairment risks, strengthening monitoring of customer repayment capabilities through a customer grading management system and a blacklist system[58](index=58&type=chunk)[80](index=80&type=chunk) [2.7 Other Expenses](index=30&type=section&id=2.7%20%E5%85%B6%E4%BB%96%E5%BC%80%E6%94%AF) In H1 2025, other expenses decreased by 9.0% to RMB 18,113 thousand, primarily due to a reduction in exchange losses, with these expenses mainly comprising exchange losses and commission fees - Other expenses decreased by **9.0%** to **RMB 18,113 thousand**, mainly due to reduced exchange losses[61](index=61&type=chunk) - Other expenses primarily include exchange losses arising from foreign currency-denominated bank borrowings and commission fees and charges collected by banks and non-bank financial institutions[60](index=60&type=chunk) [2.8 Finance Costs](index=30&type=section&id=2.8%20%E8%B4%A2%E5%8A%A1%E6%88%90%E6%9C%AC) In H1 2025, finance costs increased by 5.0% to RMB 401,070 thousand, primarily due to higher interest on borrowings, despite a 0.30% decrease in the average financing interest rate for interest-bearing bank and other borrowings to 3.69% - Finance costs increased by **5.0%** to **RMB 401,070 thousand**, mainly due to a **RMB 21,965 thousand** increase in interest on borrowings[62](index=62&type=chunk) Borrowing Interest and Average Financing Interest Rate for H1 2025 | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Average Balance of Interest-Bearing Bank and Other Financing (RMB thousands) | 21,063,794 | 18,382,079 | | Interest Expense (RMB thousands) | 388,992 | 367,027 | | Average Financing Interest Rate | 3.69% | 3.99% | - The average financing interest rate decreased by **0.30%**, primarily due to central bank interest rate cuts and the company's principal business qualifying for preferential rates[64](index=64&type=chunk) [2.9 Income Tax Expense](index=31&type=section&id=2.9%20%E6%89%80%E5%BE%97%E7%A8%8E%E5%BC%80%E6%94%AF) In H1 2025, income tax expense decreased by 89.3% to RMB 14,786 thousand, primarily due to a reduction in profit before tax, resulting in a 4.7% decrease in the effective tax rate to 29.4% as no cross-border dividend withholding tax provision was required this period - Income tax expense decreased by **89.3%** to **RMB 14,786 thousand**, mainly due to a reduction in profit before tax[65](index=65&type=chunk) - The effective tax rate decreased by **4.7%** to **29.4%**, primarily because a provision for cross-border dividend withholding tax was made in H1 2024 but was not required this period[65](index=65&type=chunk) [2.10 Profit for the Period](index=32&type=section&id=2.10%20%E6%9C%9F%E5%86%85%E6%BA%A2%E5%88%A9) In H1 2025, profit for the period was RMB 35,490 thousand, a significant 86.8% year-on-year decrease, with domestic regions (including Hong Kong and Macau) shifting from profit to loss, while overseas regions turned from loss to substantial profit - Profit for the period was **RMB 35,490 thousand**, a **86.8%** year-on-year decrease[66](index=66&type=chunk) Net Profit After Tax by Geographical Segment for H1 2025 (RMB thousands) | Geographical Segment | H1 2025 | Proportion % | H1 2024 | Proportion % | Change % | | :--- | :--- | :--- | :--- | :--- | :--- | | Domestic Regions (incl. Hong Kong & Macau) | -77,861 | -219.4% | 296,955 | 110.7% | N/A | | Overseas Regions | 113,351 | 319.4% | -28,727 | -10.7% | N/A | | **Total** | **35,490** | **100.0%** | **268,228** | **100.0%** | **-86.8%** | [2.11 Basic Earnings Per Share](index=32&type=section&id=2.11%20%E5%9F%BA%E6%9C%AC%E6%AF%8F%E8%82%A1%E6%94%B6%E7%9B%8A) In H1 2025, basic earnings per share decreased by 86.9% to RMB 0.011, primarily due to the decline in profit for the period Basic Earnings Per Share for H1 2025 | Metric | H1 2025 | H1 2024 | Change % | | :--- | :--- | :--- | :--- | | Profit for the Period Attributable to Ordinary Equity Holders of the Company (RMB thousands) | 35,490 | 268,228 | -86.8% | | Weighted Average Number of Ordinary Shares Issued (shares) | 3,133,375,000 | 3,196,827,500 | -2.0% | | **Basic Earnings Per Share (RMB)** | **0.011** | **0.084** | **-86.9%** | [3、Financial Position Analysis](index=33&type=section&id=3%E3%80%81%E8%B4%A2%E5%8A%A1%E7%8A%B6%E5%86%B5%E5%88%86%E6%9E%90) As of June 30, 2025, the company's total assets slightly increased by 0.4% to RMB 36,581,356 thousand, while total liabilities rose by 1.1% to RMB 25,253,610 thousand, with a notable increase in overseas asset proportion and a 38.1% surge in cash and bank balances Financial Position Overview as of June 30, 2025 (RMB thousands) | Metric | June 30, 2025 | December 31, 2024 | Change % | | :--- | :--- | :--- | :--- | | Total Assets | 36,581,356 | 36,434,181 | 0.4% | | Total Liabilities | 25,253,610 | 24,975,831 | 1.1% | | Total Equity | 11,327,746 | 11,458,350 | -1.1% | | Property, Plant and Equipment | 21,720,292 | 22,245,403 | -2.4% | | Cash and Bank Balances | 2,476,599 | 1,793,336 | 38.1% | | Interest-Bearing Bank and Other Financing | 21,224,692 | 20,902,895 | 1.5% | - Total overseas assets increased by **52.8%** to **RMB 5,420,399 thousand**, accounting for **14.8%** of total assets[71](index=71&type=chunk) - Total trade and contract receivables slightly increased by **0.8%**, but provisions decreased by **10.3%**, mainly due to the company's implementation of a customer grading management system[79](index=79&type=chunk)[80](index=80&type=chunk) - Among interest-bearing bank and other financing, the proportion of unsecured borrowings increased to **66.6%**, while secured borrowings decreased, reflecting an optimized financing structure[96](index=96&type=chunk) [3.1 Assets (Overview)](index=33&type=section&id=3.1%20%E8%B5%84%E4%BA%A7%EF%BC%88%E6%A6%82%E8%A7%88%EF%BC%89) As of June 30, 2025, total assets increased by 0.4% to RMB 36,581,356 thousand, with non-current assets accounting for 65.1% and current assets for 34.9%, while total overseas assets grew by 52.8%, increasing their proportion to 14.8% Asset Composition as of June 30, 2025 (RMB thousands) | Item | June 30, 2025 | Proportion % | December 31, 2024 | Proportion % | Change % | | :--- | :--- | :--- | :--- | :--- | :--- | | Property, Plant and Equipment | 21,720,292 | 59.4% | 22,245,403 | 61.1% | -2.4% | | Trade and Contract Receivables | 6,810,439 | 18.6% | 6,624,774 | 18.2% | 2.8% | | Cash and Bank Balances | 2,476,599 | 6.8% | 1,793,336 | 4.9% | 38.1% | | **Total Assets** | **36,581,356** | **100.0%** | **36,434,181** | **100.0%** | **0.4%** | - Total overseas assets amounted to **RMB 5,420,399 thousand**, an increase of **52.8%** from the end of the prior year, with their proportion rising from **9.7%** to **14.8%**[71](index=71&type=chunk) [3.2 Property, Plant and Equipment](index=34&type=section&id=3.2%20%E7%89%A9%E4%B8%9A%E3%80%81%E5%8E%82%E6%88%BF%E5%8F%8A%E8%AE%BE%E5%A4%87) As of June 30, 2025, the net book value of property, plant and equipment decreased by 2.4% to RMB 21,720,292 thousand, primarily due to the proactive contraction of material-related businesses in mainland China and depreciation recognized during the period, with aerial work platforms remaining the largest component at 53% - The net book value of property, plant and equipment decreased by **2.4%** to **RMB 21,720,292 thousand**, mainly due to the proactive contraction strategy for material-related businesses in mainland China and depreciation of **RMB 1,315,971 thousand** recognized during the period[72](index=72&type=chunk) - Aerial work platforms, new shoring systems, and new formwork systems are the main components, with aerial work platforms accounting for **53%**[73](index=73&type=chunk)[75](index=75&type=chunk) [3.3 Trade and Contract Receivables](index=35&type=section&id=3.3%20%E6%87%89%E6%94%B6%E6%AC%BE%E9%A0%85%E5%8F%8A%E5%90%88%E5%90%8C%E8%B3%87%E7%94%A2) As of June 30, 2025, total trade and contract receivables slightly increased by 0.8% to RMB 7,881,043 thousand, but provisions decreased by 10.3% to RMB 1,070,604 thousand, mainly due to the company's customer grading management system, while receivable turnover days increased to 248 days due to lower revenue Trade and Contract Receivables as of June 30, 2025 (RMB thousands) | Item | June 30, 2025 | December 31, 2024 | Change % | | :--- | :--- | :--- | :--- | | Total Trade and Contract Receivables | 7,881,043 | 7,817,941 | 0.8% | | Provisions | -1,070,604 | -1,193,167 | -10.3% | | **Net Amount** | **6,810,439** | **6,624,774** | **2.8%** | - Provisions decreased by **10.3%**, mainly because the company implemented a customer grading management system, removing customers with good repayment records within one year from the blacklist[80](index=80&type=chunk) - Receivable turnover days increased to **248 days** from **193 days** in the prior year period, primarily due to lower revenue[82](index=82&type=chunk)[83](index=83&type=chunk) [3.4 Bills Receivable](index=38&type=section&id=3.4%20%E6%87%89%E6%94%B6%E7%A5%A8%E6%93%9A) As of June 30, 2025, bills receivable decreased by 20.1% to RMB 697,052 thousand, primarily due to the company's prudent bill collection strategy, with bank acceptance bills significantly decreasing by 55.5% - Bills receivable decreased by **20.1%** to **RMB 697,052 thousand**, mainly due to the company's prudent bill collection strategy[84](index=84&type=chunk) Bills Receivable Composition as of June 30, 2025 (RMB thousands) | Item | June 30, 2025 | Proportion % | December 31, 2024 | Proportion % | Change % | | :--- | :--- | :--- | :--- | :--- | :--- | | Bank Acceptance Bills | 132,133 | 19.0% | 296,947 | 34.1% | -55.5% | | Commercial Acceptance Bills and Credit Notes | 564,919 | 81.0% | 574,973 | 65.9% | -1.7% | | **Total** | **697,052** | **100.0%** | **871,920** | **100.0%** | **-20.1%** | [3.5 Prepayments, Other Receivables and Other Assets](index=38&type=section&id=3.5%20%E9%A2%84%E4%BB%98%E6%AC%BE%E9%A0%85%E3%80%81%E5%85%B6%E4%BB%96%E6%87%89%E6%94%B6%E6%AC%BE%E9%A0%85%E5%8F%8A%E5%85%B6%E4%BB%96%E8%B3%87%E7%94%A2) As of June 30, 2025, net prepayments, other receivables, and other assets decreased by 4.8% to RMB 3,214,244 thousand, primarily due to a reduction in prepayments and deposits - Net prepayments, other receivables, and other assets decreased by **4.8%** to **RMB 3,214,244 thousand**, mainly due to a reduction in prepayments and deposits[86](index=86&type=chunk) Prepayments, Other Receivables and Other Assets Details as of June 30, 2025 (RMB thousands) | Item | June 30, 2025 | Proportion % | December 31, 2024 | Proportion % | Change % | | :--- | :--- | :--- | :--- | :--- | :--- | | Prepayments and Deposits | 1,346,337 | 41.2% | 1,451,147 | 42.3% | -7.2% | | Recoverable Taxes | 1,488,823 | 45.6% | 1,524,137 | 44.5% | -2.3% | | Other Receivables | 25,905 | 0.8% | 69,204 | 2.0% | -62.6% | | Others | 405,952 | 12.4% | 382,883 | 11.2% | 6.0% | | **Total** | **3,267,017** | **100.0%** | **3,427,371** | **100.0%** | **-4.7%** | [3.6 Cash and Bank Balances](index=39&type=section&id=3.6%20%E7%8E%B0%E9%87%91%E5%8F%8A%E9%93%B6%E8%A1%8C%E7%BB%93%E4%BD%99) As of June 30, 2025, cash and bank balances significantly increased by 38.1% to RMB 2,476,599 thousand, primarily to maintain liquidity, with the majority being RMB assets and a small portion held in foreign currencies - Cash and bank balances increased by **38.1%** to **RMB 2,476,599 thousand**, mainly due to the company maintaining liquidity[88](index=88&type=chunk) - Cash and cash equivalents are primarily RMB assets, with a small portion held in foreign currencies, including HKD, USD, and Malaysian Ringgit[88](index=88&type=chunk) [3.7 Right-of-Use Assets](index=39&type=section&id=3.7%20%E4%BD%BF%E7%94%A8%E6%9D%83%E8%B5%84%E4%BA%A7) As of June 30, 2025, right-of-use assets decreased by 5.7% to RMB 853,558 thousand, primarily due to normal depreciation, with equipment-related right-of-use assets accounting for 68.1% - Right-of-use assets decreased by **5.7%** to **RMB 853,558 thousand**, mainly due to normal depreciation of right-of-use assets[89](index=89&type=chunk) Right-of-Use Assets Details as of June 30, 2025 (RMB thousands) | Item | June 30, 2025 | Proportion % | December 31, 2024 | Proportion % | Change % | | :--- | :--- | :--- | :--- | :--- | :--- | | Equipment | 581,349 | 68.1% | 609,296 | 67.3% | -4.6% | | Leased Land | 174,340 | 20.4% | 176,693 | 19.5% | -1.3% | | Offices and Others | 97,869 | 11.5% | 119,150 | 13.2% | -17.9% | | **Total** | **853,558** | **100.0%** | **905,139** | **100.0%** | **-5.7%** | [3.8 Goodwill](index=39&type=section&id=3.8%20%E5%95%86%E8%AA%89) As of June 30, 2025, the company's goodwill amounted to RMB 173,979 thousand, arising from the acquisition of TH Tong Heng Machinery Sdn. Bhd. completed on May 30, 2025 - Goodwill amounted to **RMB 173,979 thousand**, arising from the acquisition of TH Tong Heng Machinery Sdn. Bhd. completed on May 30, 2025[90](index=90&type=chunk) [3.9 Other Asset Items](index=39&type=section&id=3.9%20%E5%85%B6%E4%BB%96%E8%B5%84%E4%BA%A7%E9%A0%85) As of June 30, 2025, other assets totaled RMB 635,193 thousand, primarily comprising deferred tax assets and inventories - Other assets totaled **RMB 635,193 thousand**, primarily comprising deferred tax assets of **RMB 383,088 thousand** and inventories of **RMB 245,162 thousand**[91](index=91&type=chunk) [3.10 Liabilities (Overview)](index=40&type=section&id=3.10%20%E8%B4%9F%E5%80%BA%EF%BC%88%E6%A6%82%E8%A7%88%EF%BC%89) As of June 30, 2025, total liabilities increased by 1.1% to RMB 25,253,610 thousand, with interest-bearing bank and other financing accounting for 84.0%, and current liabilities representing 44.2% while non-current liabilities represented 55.8% Liability Composition as of June 30, 2025 (RMB thousands) | Item | June 30, 2025 | Proportion % | December 31, 2024 | Proportion % | Change % | | :--- | :--- | :--- | :--- | :--- | :--- | | Interest-Bearing Bank and Other Financing | 21,224,692 | 84.0% | 20,902,895 | 83.7% | 1.5% | | Trade and Bills Payables | 2,244,433 | 8.9% | 2,395,257 | 9.6% | -6.3% | | Other Payables and Accruals | 1,001,932 | 4.0% | 886,686 | 3.5% | 13.0% | | Lease Liabilities | 615,281 | 2.4% | 633,582 | 2.5% | -2.9% | | **Total Liabilities** | **25,253,610** | **100.0%** | **24,975,831** | **100.0%** | **1.1%** | - Current liabilities increased by **10.0%** to **RMB 11,162,091 thousand**, while non-current liabilities decreased by **5.0%** to **RMB 14,091,519 thousand**[93](index=93&type=chunk) [3.11 Interest-Bearing Bank and Other Financing](index=40&type=section&id=3.11%20%E8%AE%A1%E6%81%AF%E9%93%B6%E8%A1%8C%E5%8F%8A%E5%85%B6%E4%BB%96%E8%9E%8D%E8%B5%84) As of June 30, 2025, interest-bearing bank and other financing increased by 1.5% to RMB 21,224,692 thousand, with an average financing interest rate of 3.69%, and the proportion of unsecured borrowings rising to 66.6% while secured borrowings decreased, reflecting an optimized financing structure primarily due to overseas business expansion - Interest-bearing bank and other financing increased by **1.5%** to **RMB 21,224,692 thousand**, with an average financing interest rate of **3.69%**[95](index=95&type=chunk) Interest-Bearing Bank and Other Financing Composition as of June 30, 2025 (RMB thousands) | Item | June 30, 2025 | Proportion % | December 31, 2024 | Proportion % | Change % | | :--- | :--- | :--- | :--- | :--- | :--- | | Secured | 7,080,783 | 33.4% | 8,036,093 | 38.4% | -11.9% | | Unsecured | 14,143,909 | 66.6% | 12,866,802 | 61.6% | 9.9% | | **Total** | **21,224,692** | **100.0%** | **20,902,895** | **100.0%** | **1.5%** | - The proportion of unsecured interest-bearing bank and other borrowings increased to **66.6%**, while secured borrowings decreased, mainly due to the company optimizing its financing structure[96](index=96&type=chunk) [3.12 Trade and Bills Payables](index=41&type=section&id=3.12%20%E6%87%89%E4%BB%98%E6%AC%BE%E9%A0%85%E5%8F%8A%E6%87%89%E4%BB%98%E7%A5%A8%E6%93%9A) As of June 30, 2025, trade and bills payables decreased by 6.3% to RMB 2,244,433 thousand, primarily due to a reduction in the scale of self-held asset purchases during the first half of the year - Trade and bills payables decreased by **6.3%** to **RMB 2,244,433 thousand**, mainly due to a reduction in the scale of self-held asset purchases during the first half of the year[97](index=97&type=chunk) [3.13 Other Payables and Accruals](index=42&type=section&id=3.13%20%E5%85%B6%E4%BB%96%E5%BA%94%E4%BB%98%E6%AC%BE%E9%A0%85%E5%8F%8A%E5%BA%94%E8%AE%A1%E8%B4%B9%E7%94%A8) As of June 30, 2025, other payables and accruals increased by 13.0% to RMB 1,001,932 thousand, primarily due to the provision for dividends payable during the first half of 2025 - Other payables and accruals increased by **13.0%** to **RMB 1,001,932 thousand**, mainly due to the company's provision for dividends payable in H1 2025[99](index=99&type=chunk) [3.14 Lease Liabilities](index=42&type=section&id=3.14%20%E7%A7%9F%E8%B3%83%E8%B2%A0%E5%82%B5) As of June 30, 2025, lease liabilities decreased by 2.9% to RMB 615,281 thousand, primarily due to the normal amortization of lease liabilities - Lease liabilities decreased by **2.9%** to **RMB 615,281 thousand**, mainly due to the normal amortization of lease liabilities[101](index=101&type=chunk) [3.15 Derivative Financial Instruments](index=42&type=section&id=3.15%20%E8%A1%8D%E7%94%9F%E9%87%91%E8%9E%8D%E5%B7%A5%E5%85%B7) The company's derivative financial instrument liabilities consist of interest rate swaps used to hedge interest rate risk exposure from floating-rate borrowings, accounted for using hedge accounting - Derivative financial instrument liabilities are interest rate swaps used to hedge interest rate risk exposure from floating-rate borrowings, applying hedge accounting treatment[102](index=102&type=chunk) [3.16 Financial Liabilities at Fair Value Through Profit or Loss](index=42&type=section&id=3.16%20%E4%BB%A5%E5%85%AC%E5%85%81%E4%BB%B7%E5%80%BC%E8%AE%A1%E9%87%8F%E4%B8%94%E5%85%B6%E5%8F%98%E5%8A%A8%E8%AE%A1%E5%85%A5%E6%8D%9F%E7%9B%8A%E7%9A%84%E9%87%91%E8%9E%8D%E8%B4%9F%E5%80%BA) This financial liability, amounting to RMB 73,937 thousand, represents contingent consideration arising from the acquisition of TH Tong Heng Machinery Sdn. Bhd., allowing the company to purchase the remaining 20% equity based on future average EBITDA and other metrics - Financial liabilities at fair value through profit or loss amounted to **RMB 73,937 thousand**, representing contingent consideration arising from the acquisition of TH Tong Heng Machinery Sdn. Bhd.[103](index=103&type=chunk) - This liability is based on an exercise price determined by future average EBITDA and cash debt status, used to acquire the remaining **20%** equity in TH Tong Heng Machinery Sdn. Bhd.[103](index=103&type=chunk) [3.17 Shareholders' Equity](index=43&type=section&id=3.17%20%E8%82%A1%E6%9D%B1%E6%AC%8A%E7%9B%8A) As of June 30, 2025, the company's total equity decreased by 1.1% to RMB 11,327,746 thousand, with profit for the period at RMB 35,490 thousand and dividend distribution of RMB 132,874 thousand Equity Movement as of June 30, 2025 (RMB thousands) | Item | Amount | | :--- | :--- | | December 31, 2024 | 11,458,350 | | Profit for the Period | 35,490 | | Dividend Distribution | -132,874 | | Other Equity Changes | -33,220 | | **June 30, 2025** | **11,327,746** | - The company's total equity decreased by **1.1%** to **RMB 11,327,746 thousand**[104](index=104&type=chunk) [4、Capital Management](index=44&type=section&id=4%E3%80%81%E8%B5%84%E6%9C%AC%E7%AE%A1%E7%90%86) The company employs a prudent capital management strategy, monitoring financial return indicators and leverage ratios, which in H1 2025 saw a decline in average return on equity and total assets, and a slight increase in the asset-liability ratio Key Financial Ratios for H1 2025 | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Average Return on Equity | 0.6% | 4.9% | | Average Return on Total Assets | 0.2% | 1.6% | | Asset-Liability Ratio | 69.0% | 68.7% | - Average return on equity decreased by **4.3%**, mainly due to lower profit for the period and an increase in average equity[111](index=111&type=chunk) - Average return on total assets decreased by **1.4%**, mainly due to lower profit for the period and an increase in average total assets[112](index=112&type=chunk) - The asset-liability ratio increased by **0.4%** to **69.0%** compared to the end of the prior year[113](index=113&type=chunk) [5、Capital Expenditure](index=45&type=section&id=5%E3%80%81%E8%B5%84%E6%9C%AC%E5%BC%80%E6%94%AF) In H1 2025, capital expenditure significantly decreased by 81.1% to RMB 824,817 thousand, with net capital expenditure after sales of used equipment and materials plummeting by 90.3% to RMB 384,301 thousand, and the company plans to fund future capital expenditures through operating cash flow and bank borrowings - Capital expenditure for H1 2025 was **RMB 824,817 thousand**, a significant year-on-year decrease of **81.1%**[114](index=114&type=chunk) - Net capital expenditure after deducting sales of used equipment and materials was **RMB 384,301 thousand**, a significant year-on-year decrease of **90.3%**[114](index=114&type=chunk) [6、Risk Management](index=45&type=section&id=6%E3%80%81%E9%A3%8E%E9%99%A9%E7%AE%A1%E7%90%86) The company manages foreign exchange risk, which is limited due to its predominantly RMB-denominated business and the use of derivative financial instruments for hedging, and addresses liquidity risk by optimizing its financing structure, expanding long-term financing products and maintaining adequate cash positions - The company's foreign exchange risk exposure is limited, with business primarily denominated in RMB, and derivative financial instruments are used to hedge foreign exchange risk[116](index=116&type=chunk) - Liquidity risk is managed by optimizing the financing structure, expanding long-term financing products and maintaining a certain proportion of cash positions[117](index=117&type=chunk) [7、Group Asset Pledges](index=45&type=section&id=7%E3%80%81%E9%9B%86%E5%9B%A2%E8%B5%84%E4%BA%A7%E6%8A%BC%E8%AE%B0) As of June 30, 2025, the company had RMB 7,632,561 thousand in property, plant and equipment pledged to non-bank financial institutions, and an additional RMB 300,000 thousand in time deposits used as collateral for bank borrowings - **RMB 7,632,561 thousand** of property, plant and equipment are pledged to non-bank financial institutions to secure other borrowings[118](index=118&type=chunk) - **RMB 300,000 thousand** in time deposits are used as collateral for bank borrowings[118](index=118&type=chunk) [8、Contingent Liabilities and Capital Commitments](index=45&type=section&id=8%E3%80%81%E6%88%96%E6%9C%89%E8%B4%9F%E5%80%BA%E5%8F%8A%E8%B5%84%E6%9C%AC%E6%89%BF%E6%8B%85%E7%9A%84%E6%83%85%E5%86%B5) As of June 30, 2025, the company had no significant contingent liabilities, guarantees, or outstanding litigation, but had capital commitments of RMB 385,593 thousand for contracted but unprovided purchases of plant and machinery - As of June 30, 2025, the company had no significant contingent liabilities, guarantees, or any other outstanding or threatened material litigation or claims against the Group that could have a material adverse effect on its business, financial condition, or operating results[119](index=119&type=chunk) Capital Commitments as of June 30, 2025 (RMB thousands) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Contracted but not provided for: purchase of plant and machinery | 385,593 | 212,503 | [9、Significant Investments, Acquisitions or Disposals](index=46&type=section&id=9%E3%80%81%E9%87%8D%E5%A4%A7%E6%8A%95%E8%B5%84%E3%80%81%E6%94%B6%E8%B3%BC%E6%88%96%E5%87%BA%E5%94%AE) On May 30, 2025, the company completed the acquisition of an 80% equity interest in TH Tong Heng Machinery Sdn. Bhd. for a total cash consideration of approximately RMB 289,502,273, aiming to expand its market share in the Malaysian equipment leasing industry, with the target company becoming a subsidiary - On May 30, 2025, the company completed the acquisition of an **80%** equity interest in TH Tong Heng Machinery Sdn. Bhd. for a total cash consideration of approximately **RMB 289,502,273**[123](index=123&type=chunk) - This acquisition aims to expand the company's market share in the Malaysian equipment leasing industry, and the target company has become a subsidiary of the company[129](index=129&type=chunk) - The acquisition and put option, when combined, constitute a discloseable transaction but are exempt from shareholder approval requirements[122](index=122&type=chunk) [10、Human Resources](index=49&type=section&id=10%E3%80%81%E4%BA%BA%E5%8A%9B%E8%B5%84%E6%BA%90) As of June 30, 2025, the company's total number of employees decreased to 4,317, and it has established a 2024 Share Option Scheme and a Restricted Share Award Scheme to incentivize and retain talent, though no new options or restricted shares were granted or vested during the reporting period, with some expiring - As of June 30, 2025, the company had a total of **4,317** employees, a decrease from **5,346** in the prior year period[132](index=132&type=chunk) - The company established the 2024 Share Option Scheme and Restricted Share Award Scheme to build a medium-to-long-term incentive and retention mechanism for outstanding management talent[133](index=133&type=chunk)[136](index=136&type=chunk) Share Option Movement for H1 2025 | Grantee | Unexercised as of Jan 1, 2025 | Expired | Unexercised as of June 30, 2025 | | :--- | :--- | :--- | :--- | | Directors Subtotal | 610,000 | – | 610,000 | | Employees | 10,810,000 | 1,330,000 | 9,480,000 | | **Total** | **11,420,000** | **1,330,000** | **10,090,000** | Restricted Share Movement for H1 2025 | Grantee | Unvested as of Jan 1, 2025 | Expired | Unvested as of June 30, 2025 | | :--- | :--- | :--- | :--- | | Directors Subtotal | 1,420,000 | – | 1,420,000 | | Employees Subtotal | 25,160,000 | 3,080,000 | 22,080,000 | | **Total** | **26,580,000** | **3,080,000** | **23,500,000** | [12、Events After Reporting Period](index=52&type=section&id=12%E3%80%81%E6%8A%A5%E5%91%8A%E6%9C%9F%E5%90%8E%E4%BA%8B%E9%A1%B9) As of the date of this report, the company has not experienced any significant events after June 30, 2025, that require disclosure - As of the date of this report, the company has not experienced any significant events after June 30, 2025, that require disclosure[139](index=139&type=chunk) [13、Future Outlook](index=52&type=section&id=13%E3%80%81%E6%9C%AA%E6%9D%A5%E5%B1%95%E6%9C%9B) Facing external uncertainties, the company plans to continue market-driven strategies in H2 2025, focusing on lean operations domestically through enhanced customer marketing, industry solutions, and optimized asset allocation, while pursuing a dual-driven strategy of "deepening existing country markets" and "expanding into emerging markets" overseas, with a cautious approach to new market development in Africa, South America, and Asia - In H2 2025, domestic operations will focus on lean management to counter risks, enhancing asset lifecycle value through deepened customer marketing, industry solutions, and optimized asset allocation[140](index=140&type=chunk) - Overseas, the company will implement a dual-driven strategy of "deepening existing country markets" and "expanding into emerging markets," consolidating its presence in Southeast Asia and cautiously exploring new markets, with a focus on regions such as Africa, South America, and Asia[140](index=140&type=chunk) [Disclosure of Interests](index=53&type=section&id=%E6%AC%8A%E7%9B%8A%E6%8A%AB%E9%9C%B2) This chapter discloses the interests and/or short positions of the company's directors, chief executives, and substantial shareholders in the company's shares and associated corporations as of June 30, 2025, with several directors holding company shares and Far East Horizon as the controlling shareholder with a 41.70% stake Directors' and Chief Executives' Interests in the Company as of June 30, 2025 | Name of Director and Chief Executive | Capacity / Nature of Interest | Total Number of Ordinary Shares | Approximate Percentage of Interest | | :--- | :--- | :--- | :--- | | Kong Fanxing | Beneficial Owner | 8,078,052 | 0.25% | | Zhan Jing | Beneficial Owner | 1,000,186 | 0.03% | | Tang Li | Beneficial Owner | 2,269,125 | 0.07% | | He Ziming | Interest in Controlled Corporation | 177,090,112 | 5.54% | - Several directors obtained shares in the company through in-specie distribution from Far East Horizon, and some directors also hold share options and restricted shares[143](index=143&type=chunk)[147](index=147&type=chunk) Substantial Shareholders' Interests in Shares as of June 30, 2025 | Shareholder Name | Nature of Interest | Number of Ordinary Shares | Approximate Percentage of Interest | | :--- | :--- | :--- | :--- | | Far East Horizon | Beneficial Owner | 1,333,247,413 | 41.70% | | Farsighted Wit Limited | Beneficial Owner | 176,600,000 | 5.52% | [Corporate Governance](index=58&type=section&id=%E4%BC%81%E4%B8%9A%E7%AE%A1%E6%B2%BB) The company complied with the Corporate Governance Code in H1 2025, despite the absence of the Board Chairman and several committee chairmen at the AGM, and has adopted the Model Code for Securities Transactions, meeting listing rule requirements for independent non-executive directors, with the Audit Committee having reviewed this interim report - The company complied with the Corporate Governance Code in H1 2025, although the Chairman of the Board and several committee chairmen were unable to attend the Annual General Meeting due to other work commitments[153](index=153&type=chunk)[154](index=154&type=chunk) - The company has adopted the Model Code for Securities Transactions, and directors confirmed compliance throughout the period[155](index=155&type=chunk)[156](index=156&type=chunk) - The Board of Directors complies with the Listing Rules regarding the number and professional background of independent non-executive directors[157](index=157&type=chunk) - The Audit Committee has reviewed this interim report and the condensed consolidated financial statements with management and external auditors[158](index=158&type=chunk)[159](index=159&type=chunk) [Other Information](index=60&type=section&id=%E5%85%B6%E4%BB%96%E8%B5%84%E6%96%99) The company distributed a final dividend of HKD 0.045 per share for 2024 on July 2, 2025, but the Board recommended no interim dividend for H1 2025; a cooperation framework agreement with controlling shareholder Far East Horizon for engineering technical services and equipment operating lease services constitutes a continuing connected transaction, and no listed securities were purchased, sold, or redeemed during the reporting period - The company distributed a final dividend of **HKD 0.045** per share for 2024, totaling **HKD 143,876 thousand**, on July 2, 2025[160](index=160&type=chunk) - The Board of Directors recommended not to declare an interim dividend for the six months ended June 30, 2025[161](index=161&type=chunk) - The company entered into a cooperation framework agreement with Far East Horizon, its controlling shareholder, to provide engineering technical services and equipment operating lease services and to receive consulting service fees, which constitutes a continuing connected transaction[163](index=163&type=chunk)[166](index=166&type=chunk) - During the reporting period, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities[162](index=162&type=chunk) [Independent Review Report](index=63&type=section&id=%E7%8D%A8%E7%AB%8B%E5%AF%A9%E9%96%B1%E5%A0%B1%E5%91%8A) Ernst & Young has reviewed Grandshores Construction Development's condensed interim consolidated financial information for the six months ended June 30, 2025, and found no matters suggesting that the financial information was not prepared in all material respects in accordance with Hong Kong Accounting Standard 34 - Ernst & Young has reviewed the company's condensed interim consolidated financial information for the six months ended June 30, 2025[170](index=170&type=chunk) - The review concluded that no matters were found to suggest that the financial information was not prepared in all material respects in accordance with Hong Kong Accounting Standard 34[172](index=172&type=chunk) [Condensed Interim Consolidated Financial Information](index=64&type=section&id=%E7%B0%A1%E6%98%8E%E4%B8%AD%E6%9C%9F%E5%90%88%E5%B9%B6%E8%B4%A2%E5%8A%A1%E8%B5%84%E6%96%99) [Condensed Interim Consolidated Income Statement](index=64&type=section&id=%E7%B0%A1%E6%98%8E%E4%B8%AD%E6%9C%9F%E5%90%88%E5%B9%B6%E6%8D%9F%E7%9B%8A%E8%A1%A8) For the six months ended June 30, 2025, the company reported revenue of RMB 4,350,062 thousand, cost of sales of RMB 3,409,395 thousand, gross profit of RMB 940,667 thousand, profit for the period of RMB 35,490 thousand, and basic and diluted earnings per share of RMB 0.01 Condensed Interim Consolidated Income Statement Summary for H1 2025 (RMB thousands) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Revenue | 4,350,062 | 4,872,421 | | Cost of Sales | (3,409,395) | (3,313,096) | | Gross Profit | 940,667 | 1,559,325 | | Profit Before Tax | 50,276 | 406,890 | | Profit for the Period | 35,490 | 268,228 | | Basic Earnings Per Share (RMB) | 0.01 | 0.08 | | Diluted Earnings Per Share (RMB) | 0.01 | 0.08 | [Condensed Interim Consolidated Statement of Comprehensive Income](index=65&type=section&id=%E7%B0%A1%E6%98%8E%E4%B8%AD%E6%9C%9F%E5%90%88%E5%B9%B6%E7%BB%BC%E5%90%88%E6%94%B6%E7%9B%8A%E8%A1%A8) For the six months ended June 30, 2025, the company's profit for the period was RMB 35,490 thousand, with net other comprehensive income of negative RMB 32,346 thousand, resulting in a total comprehensive income of RMB 3,144 thousand for the period Condensed Interim Consolidated Statement of Comprehensive Income Summary for H1 2025 (RMB thousands) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Profit for the Period | 35,490 | 268,228 | | Net Other Comprehensive Income that may be reclassified to profit or loss in subsequent periods | (32,346) | (8,239) | | **Total Comprehensive Income for the Period** | **3,144** | **259,989** | [Condensed Interim Consolidated Statement of Financial Position](index=66&type=section&id=%E7%B0%A1%E6%98%8E%E4%B8%AD%E6%9C%9F%E5%90%88%E5%B9%B6%E8%B4%A2%E5%8A%A1%E7%8A%B6%E5%86%B5%E8%A1%A8) As of June 30, 2025, the company's total non-current assets were RMB 23,800,675 thousand, total current assets were RMB 12,780,681 thousand, total liabilities were RMB 25,253,610 thousand, with current liabilities at RMB 11,162,091 thousand, and net assets amounted to RMB 11,327,746 thousand Condensed Interim Consolidated Statement of Financial Position Summary as of June 30, 2025 (RMB thousands) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Non-Current Assets | 23,800,675 | 24,225,463 | | Total Current Assets | 12,780,681 | 12,208,718 | | **Total Assets** | **36,581,356** | **36,434,181** | | Total Current Liabilities | 11,162,091 | 10,149,736 | | Total Non-Current Liabilities | 14,091,519 | 14,826,095 | | **Total Liabilities** | **25,253,610** | **24,975,831** | | **Net Assets** | **11,327,746** | **11,458,350** | [Condensed Interim Consolidated Statement of Changes in Equity](index=68&type=section&id=%E7%B0%A1%E6%98%8E%E4%B8%AD%E6%9C%9F%E5%90%88%E5%B9%B6%E6%AC%8A%E7%9B%8A%E5%8F%98%E5%8A%A8%E8%A1%A8) For the six months ended June 30, 2025, total equity attributable to owners of the parent company was RMB 11,327,746 thousand, with profit for the period at RMB 35,490 thousand, total comprehensive income at RMB 3,144 thousand, and a dividend distribution of RMB 132,874 thousand Condensed Interim Consolidated Statement of Changes in Equity Summary for H1 2025 (RMB thousands) | Item | June 30, 2025 | | :--- | :--- | | Total Equity as of December 31, 2024 | 11,458,350 | | Profit for the Period | 35,490 | | Other Comprehensive Income for the Period | (32,346) | | Total Comprehensive Income for the Period | 3,144 | | 2024 Dividends | (132,874) | | **Total Equity as of June 30, 2025** | **11,327,746** | [Condensed Interim Consolidated Cash Flow Statement](index=70&type=section&id=%E7%B0%A1%E6%98%8E%E4%B8%AD%E6%9C%9F%E5%90%88%E5%B9%B6%E7%8E%B0%E9%87%91%E6%B5%81%E9%87%8F%E8%A1%A8) For the six months ended June 30, 2025, net cash flow from operating activities was RMB 1,780,366 thousand, net cash flow used in investing activities was RMB (861,560) thousand, and net cash flow used in financing activities was RMB (519,592) thousand, resulting in cash and cash equivalents of RMB 2,176,580 thousand at period-end Condensed Interim Consolidated Cash Flow Statement Summary for H1 2025 (RMB thousands) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | 1,780,366 | 1,348,514 | | Net Cash Flow Used in Investing Activities | (861,560) | (3,108,325) | | Net Cash Flow (Used in) / Generated from Financing Activities | (519,592) | 1,535,932 | | Net Increase / (Decrease) in Cash and Cash Equivalents | 399,214 | (223,879) | | Cash and Cash Equivalents at End of Period | 2,176,580 | 1,932,626 | [Notes to the Condensed Interim Consolidated Financial Information](index=72&type=section&id=%E7%B0%A1%E6%98%8E%E4%B8%AD%E6%9C%9F%E5%90%88%E5%B9%B6%E8%B4%A2%E5%8A%A1%E8%B5%84%E6%96%99%E9%99%84%E6%B3%A8) These notes detail the basis of preparation, accounting policy changes, operating segment information, revenue breakdown, other income and gains, profit before tax, finance costs, income tax, dividends, earnings per share, balance sheet items, business combinations, cash flows, contingent liabilities, asset pledges, commitments, related party transactions, financial instruments, and post-reporting period events - The company prepares interim financial information in accordance with Hong Kong Accounting Standard 34 and on a going concern basis[185](index=185&type=chunk) - Operating segments include operating lease services, engineering technical services, and asset management and other services[191](index=191&type=chunk) - The acquisition of an **80%** equity interest in TH Tong Heng Machinery Sdn. Bhd. was completed on May 30, 2025, resulting in goodwill of **RMB 173,979 thousand**[290](index=290&type=chunk) - The company established the 2024 Share Option Scheme and Restricted Share Award Scheme to incentivize employees[270](index=270&type=chunk)[276](index=276&type=chunk) [1. Company Information](index=72&type=section&id=1.%20%E5%85%AC%E5%8F%B8%E8%B5%84%E6%96%99) Grandshores Construction Development, incorporated in the Cayman Islands on September 28, 2020, is an investment holding company primarily engaged in operating lease services, engineering technical services, and asset management, with Far East Horizon Limited as its direct controlling company - The company was incorporated in the Cayman Islands on September 28, 2020, as an investment holding company[183](index=183&type=chunk) - It primarily engages in operating lease services, engineering technical services, and asset management and other services[187](index=187&type=chunk) - Its direct controlling company is Far East Horizon Limited[184](index=184&type=chunk) [2. Basis of Preparation](index=72&type=section&id=2.%20%E7%BC%96%E5%88%B6%E5%9F%BA%E5%87%86) The condensed interim consolidated financial information is prepared in accordance with Hong Kong Accounting Standard 34 and on a going concern basis, with all amounts presented in RMB thousands - The condensed interim consolidated financial information is prepared in accordance with Hong Kong Accounting Standard 34 and on a going concern basis[185](index=185&type=chunk) - Financial information is presented in RMB, with all amounts rounded to the nearest thousand[186](index=186&type=chunk) [3. Changes in Accounting Policies](index=73&type=section&id=3.%20%E4%BC%9A%E8%AE%A1%E6%94%BF%E7%AD%96%E7%9A%84%E5%8F%98%E5%8A%A8) The accounting policies adopted for the condensed interim consolidated financial information are consistent with the 2024 consolidated financial statements, with the only change being the initial adoption of amendments to HKAS 21 regarding lack of exchangeability, which had no impact on the Group's financial information - Accounting policies are consistent with the 2024 consolidated financial statements, with the initial adoption of amendments to HKAS 21 regarding lack of exchangeability[188](index=188&type=chunk)[189](index=189&type=chunk) - As the Group's transaction and functional currencies are exchangeable, these amendments had no impact on the financial information[189](index=189&type=chunk) [4. Operating Segment Information](index=73&type=section&id=4.%20%E7%BB%8F%E8%90%A5%E5%88%86%E9%83%A8%E8%B5%84%E6%96%99) The company reports three operating segments: operating lease services, engineering technical services, and asset management and other services, with H1 2025 seeing growth in operating lease service revenue but declines in the other two segments, and a significant increase in the proportion of overseas assets - The company has three reportable operating segments: operating lease services, engineering technical services, and asset management and other services[191](index=191&type=chunk) Segment Revenue for H1 2025 (RMB thousands) | Segment | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Operating Lease Services | 2,265,244 | 1,895,622 | | Engineering Technical Services | 1,138,882 | 1,946,261 | | Asset Management and Other Services | 945,936 | 1,030,538 | | **Total** | **4,350,062** | **4,872,421** | - As of June 30, 2025, total overseas assets amounted to **RMB 5,420,399 thousand**, representing **14.82%** of the Group's total assets, a significant increase from **9.74%** at the end of 2024[196](index=196&type=chunk) [5. Revenue](index=77&type=section&id=5.%20%E6%94%B6%E5%85%A5) Total revenue for H1 2025 was RMB 4,350,062 thousand, comprising RMB 2,926,086 thousand from operating leases and RMB 1,423,976 thousand from contracts with customers, with overseas revenue significantly increasing to RMB 597,380 thousand, and performance obligations satisfied upon goods delivery or as services are provided Revenue Composition for H1 2025 (RMB thousands) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Operating Lease Services | 2,265,244 | 1,895,622 | | Sub-lease | 660,842 | 748,026 | | **Subtotal Operating Lease Revenue** | **2,926,086** | **2,643,648** | | Revenue from Contracts with Customers | 1,423,976 | 2,228,773 | | **Total** | **4,350,062** | **4,872,421** | - For the six months ended June 30, 2025, revenue from overseas regions was **RMB 597,380 thousand**[198](index=198&type=chunk) - Performance obligations for sales of goods are satisfied upon delivery, while for engineering technical services, they are satisfied over time as services are provided[201](index=201&type=chunk)[202](index=202&type=chunk) [6. Other Income and Gains](index=81&type=section&id=6.%20%E5%85%B6%E4%BB%96%E6%94%B6%E5%85%A5%E5%8F%8A%E6%94%B6%E7%9B%8A) In H1 2025, total other income and gains amounted to RMB 104,327 thousand, primarily consisting of government grants of RMB 83,250 thousand and bank interest income of RMB 3,923 thousand, with other gains mainly including gains on disposal of property, plant and equipment and fair value gains Other Income and Gains for H1 2025 (RMB thousands) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Government Grants | 83,250 | 63,628 | | Bank Interest Income | 3,923 | 10,026 | | Gains on Disposal of Property, Plant and Equipment | 6,448 | 6,559 | | Others | 10,386 | 4,324 | | **Total** | **104,327** | **106,938** | [7. Profit Before Tax](index=82&type=section&id=7.%20%E9%99%A4%E7%A8%8E%E5%89%8D%E6%BA%A2%E5%88%A9) The company's profit before tax was RMB 50,276 thousand, with major costs including operating lease service costs, engineering technical service costs, and asset management and other service costs, alongside significant expenses such as employee benefits, R&D, and travel - Profit before tax was **RMB 50,276 thousand**[174](index=174&type=chunk) Items Deducted/Credited to Profit Before Tax for H1 2025 (RMB thousands) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Operating Lease Service Costs | 1,644,048 | 1,192,848 | | Engineering Technical Service Costs | 967,475 | 1,420,770 | | Asset Management and Other Service Costs | 797,872 | 699,478 | | Depreciation of Property, Plant and Equipment | 1,315,971 | 1,073,569 | | Employee Benefit Expenses | 310,475 | 293,571 | | Research and Development Expenses | 106,442 | 70,910 | | Net Expected Credit Loss on Financial and Contract Assets | -186,877 | 171,117 | [8. Finance Costs](index=84&type=section&id=8.%20%E8%B4%A2%E5%8A%A1%E6%88%90%E6%9C%AC) In H1 2025, total finance costs amounted to RMB 401,070 thousand, primarily consisting of interest on interest-bearing bank and other financing and interest on lease liabilities Finance Costs Analysis for H1 2025 (RMB thousands) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Interest on Interest-Bearing Bank and Other Financing | 388,992 | 367,027 | | Interest on Lease Liabilities | 12,078 | 15,070 | | **Total** | **401,070** | **382,097** | [9. Income Tax](index=84&type=section&id=9.%20%E6%89%80%E5%BE%97%E7%A8%8E) In H1 2025, income tax expense was RMB 14,786 thousand, with mainland China companies generally subject to a 25% statutory tax rate, while some high-tech enterprises enjoy a 15% preferential rate, and the difference between the effective and statutory tax rates is mainly influenced by withholding tax and tax incentives Income Tax Expense for H1 2025 (RMB thousands) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Current Tax – Mainland China | 62,566 | 191,103 | | Deferred Tax | (47,780) | (52,441) | | **Total** | **14,786** | **138,662** | - Dividends paid by companies established in mainland China to foreign investors are generally subject to a **10%** withholding tax, which can be reduced to **5%** for eligible Hong Kong-registered investors[211](index=211&type=chunk) - Shanghai Grandshores Equipment Engineering Co., Ltd. and

目錄 | 釋義 | 3 | | --- | --- | | 重要提示 | 6 | | 公司基本情況 | 7 | | 財務摘要 | 9 | | 經營情況概覽 | 11 | | 管理層討論與分析 | 13 | | 財務回顧 | 13 | | 經濟與金融環境 | 13 | | 利潤表主要項目分析 | 14 | | 資產負債表項目分析 | 19 | | 現金流量分析 | 23 | | 分部信息 | 24 | | 公允價值計量 | 25 | | 其他財務信息 | 25 | | 業務回顧 | 26 | | 扎實做好「五篇大文章」 | 26 | | 境內商業銀行業務 | 30 | | 全球化經營業務 | 39 | | 綜合化經營業務 | 45 | | 服務渠道 | 52 | | 金融科技創新 | 53 | | 風險管理 | 55 | | 信用風險管理 | 56 | | 市場風險管理 | 60 | | 銀行賬簿利率風險管理 | 60 | | 流動性風險管理 | 61 | | 操作風險管理 | 62 | | 國別風險管理 | 63 | | 聲譽風險管理 | 63 | 1 | 戰略風險管理 | 63 | | --- | --- ...

[Financial Summary](index=1&type=section&id=%E8%B2%A1%E5%8B%99%E6%91%98%E8%A6%81) The Group's revenue and profit attributable to owners of the parent grew, while gross profit margin slightly declined | Indicator | H1 2025 (RMB'000) | H1 2024 (RMB'000) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 955,046 | 774,645 | 23.3% | | Profit attributable to owners of the parent | 25,891 | 18,240 | 41.9% | | Gross Profit Margin | 27.4% | 29.0% | -1.6 p.p. | | Basic earnings per share | RMB0.0146 | RMB0.0103 | 41.7% | - The Board of Directors resolved not to declare any interim dividend for the six months ended June 30, 2025 (H1 2024: Nil)[2](index=2&type=chunk) [Unaudited Interim Results](index=2&type=section&id=%E6%9C%AA%E7%B6%93%E5%AF%A9%E6%A0%B8%E4%B8%AD%E6%9C%9F%E6%A5%AD%E7%B8%BE) This section presents the unaudited condensed consolidated financial results for the six months ended June 30, 2025 - The unaudited condensed consolidated financial results of the Company and its subsidiaries (collectively, the "Group") for the six months ended June 30, 2025, together with the comparative figures for the six months ended June 30, 2024[3](index=3&type=chunk) [Interim Condensed Consolidated Statement of Profit or Loss](index=2&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) For the six months ended June 30, 2025, the Group's revenue grew significantly by 23.3% and profit attributable to owners of the parent increased by 41.9%, though gross margin slightly decreased | Indicator | H1 2025 (RMB'000) | H1 2024 (RMB'000) | | :--- | :--- | :--- | | Revenue | 955,046 | 774,645 | | Cost of sales | (693,747) | (549,856) | | Gross profit | 261,299 | 224,789 | | Other income and gains | 22,984 | 21,719 | | Selling and distribution expenses | (71,008) | (58,253) | | Administrative expenses | (182,366) | (165,089) | | Profit before tax | 29,479 | 25,895 | | Income tax expense | (5,436) | (4,891) | | Profit for the period | 24,043 | 21,004 | | Profit attributable to owners of the parent | 25,891 | 18,240 | | Profit attributable to non-controlling interests | (1,848) | 2,764 | | Basic earnings per share | RMB0.0146 | RMB0.0103 | [Interim Condensed Consolidated Statement of Comprehensive Income](index=4&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%E5%85%A5%E8%A1%A8) For the six months ended June 30, 2025, the Group recorded a total comprehensive income of RMB17,542,000, mainly driven by profit for the period | Indicator | H1 2025 (RMB'000) | H1 2024 (RMB'000) | | :--- | :--- | :--- | | Profit for the period | 24,043 | 21,004 | | Exchange differences on translation of foreign operations | (145) | 2,892 | | Equity investments designated at FVOCI: Changes in fair value | (8,475) | (53,599) | | Income tax effect | 2,119 | 13,400 | | Other comprehensive loss for the period, net of tax | (6,501) | (37,307) | | Total comprehensive income/(loss) for the period | 17,542 | (16,303) | | Attributable to owners of the parent | 19,390 | (19,067) | | Attributable to non-controlling interests | (1,848) | 2,764 | [Interim Condensed Consolidated Statement of Financial Position](index=5&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%E7%8B%80%E6%B3%81%E8%A1%A8) As of June 30, 2025, the Group's total non-current assets slightly increased, while a rise in both current assets and liabilities led to a significant drop in net current assets | Indicator | June 30, 2025 (RMB'000) | December 31, 2024 (RMB'000) | | :--- | :--- | :--- | | Total non-current assets | 1,769,714 | 1,760,651 | | Total current assets | 2,124,244 | 2,023,857 | | Total current liabilities | 2,066,529 | 1,815,563 | | Net current assets | 57,715 | 208,294 | | Total assets less current liabilities | 1,827,429 | 1,968,945 | | Total non-current liabilities | 288,834 | 403,715 | | Net assets | 1,538,595 | 1,565,230 | | Equity attributable to owners of the parent | 1,403,862 | 1,388,885 | | Non-controlling interests | 134,733 | 176,345 | | Total equity | 1,538,595 | 1,565,230 | [Notes to the Interim Condensed Consolidated Financial Information](index=8&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 notes on corporate information, basis of preparation, accounting policies, and segment data - This section details the notes to the Group's financial statements, including corporate information, accounting policies, segment information, revenue and expense components, dividend policy, earnings per share calculation, and major balance sheet item changes[13](index=13&type=chunk)[14](index=14&type=chunk)[15](index=15&type=chunk) [Corporate Information](index=8&type=section&id=%E5%85%AC%E5%8F%B8%E8%B3%87%E6%96%99) Huazhong In-Vehicle Holdings Company Limited was incorporated in the Cayman Islands in 2010 and listed on the Hong Kong Stock Exchange in 2012 - The Company was incorporated in the Cayman Islands on December 3, 2010, and was listed on the Main Board of The Stock Exchange of Hong Kong Limited on January 12, 2012[13](index=13&type=chunk) - The Group is principally engaged in the manufacturing and sales of automotive interior and exterior structural and decorative parts, molds and tooling, air-conditioner housings and reservoirs, and other non-automotive products[13](index=13&type=chunk) [Basis of Preparation](index=8&type=section&id=%E7%B7%A8%E8%A3%BD%E5%9F%BA%E6%BA%96) The interim financial information is prepared in accordance with IAS 34 and should be read with the 2024 annual financial statements - The interim condensed consolidated financial information has been prepared in accordance with International Accounting Standard 34 Interim Financial Reporting[14](index=14&type=chunk) [Changes in Accounting Policies and Disclosures](index=8&type=section&id=%E6%9C%83%E8%A8%88%E6%94%BF%E7%AD%96%E5%8F%8A%E6%8A%AB%E9%9C%B2%E8%AE%8A%E6%9B%B4) Accounting policies are consistent with the previous year, except for the adoption of amended IFRSs, which had no material impact - The initial adoption of amendments to IAS 21, Lack of Exchangeability, had no impact on the interim condensed consolidated financial information as the currencies used by the Group are exchangeable[15](index=15&type=chunk)[16](index=16&type=chunk)[17](index=17&type=chunk) [Operating Segment Information](index=9&type=section&id=%E7%B6%93%E7%87%9F%E5%88%86%E9%83%A8%E8%B3%87%E6%96%99) The Group is managed as a single business unit, thus no segment analysis is presented, with Mainland China being the primary source of revenue and location of assets - The Group is organized as a single business unit, primarily engaged in the production and sale of automotive parts and other non-automotive products, therefore no segment analysis is presented[18](index=18&type=chunk) [Geographical Information](index=9&type=section&id=%E5%9C%B0%E5%8D%80%E8%B3%87%E6%96%99) **Revenue from External Customers (based on customer location):** | Region | H1 2025 (RMB'000) | H1 2024 (RMB'000) | | :--- | :--- | :--- | | Mainland China | 918,078 | 734,408 | | Overseas | 36,968 | 40,237 | | Total | 955,046 | 774,645 | **Non-current Assets (based on asset location):** | Region | June 30, 2025 (RMB'000) | December 31, 2024 (RMB'000) | | :--- | :--- | :--- | | Mainland China | 1,532,512 | 1,518,891 | | Overseas | 26,652 | 25,442 | | Total | 1,559,164 | 1,544,333 | [Revenue, Other Income and Gains](index=10&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) The Group's revenue is mainly from customer contracts, with sales of plastic and automotive parts being the primary contributors **Disaggregation of Revenue from Contracts with Customers:** | Category | H1 2025 (RMB'000) | H1 2024 (RMB'000) | | :--- | :--- | :--- | | Sales of plastic parts and automotive parts | 867,017 | 678,160 | | Sales of molds and tooling | 88,029 | 96,485 | | **Total revenue from contracts with customers** | **955,046** | **774,645** | | **Geographical markets:** | | | | Mainland China | 918,078 | 734,408 | | Overseas | 36,968 | 40,237 | | **Total revenue from contracts with customers** | **955,046** | **774,645** | | **Timing of revenue recognition:** | | | | Goods transferred at a point in time | 955,046 | 774,645 | **Analysis of Other Income and Gains:** | Item | H1 2025 (RMB'000) | H1 2024 (RMB'000) | | :--- | :--- | :--- | | Rental income | 5,057 | 2,811 | | Government grants | 7,127 | 9,687 | | Management fee | 2,649 | 1,951 | | VAT incentives | 4,274 | 4,924 | | Gain on disposal of items of property, plant and equipment | 90 | 240 | | Gain on sales of scrap materials | 659 | 844 | | Exchange gains | 1,469 | 137 | | Others | 1,659 | 1,125 | | **Total** | **22,984** | **21,719** | [Profit Before Tax](index=12&type=section&id=%E9%99%A4%E7%A8%85%E5%89%8D%E6%BA%A2%E5%88%A9) The Group's profit before tax was affected by factors including inventory costs, depreciation, higher employee benefits, and reversal of financial asset impairments **Profit Before Tax is Arrived at After Charging/(Crediting):** | Item | H1 2025 (RMB'000) | H1 2024 (RMB'000) | | :--- | :--- | :--- | | Cost of inventories recognised | 693,747 | 549,856 | | Depreciation of property, plant and equipment | 61,829 | 55,456 | | Depreciation of right-of-use assets | 10,845 | 8,730 | | Depreciation of investment properties | 1,446 | 1,446 | | Amortisation of intangible assets | 299 | 744 | | Lease payments under short-term leases | 6,653 | 7,118 | | Employee benefit expense | 177,425 | 140,104 | | Net rental income | (5,057) | (2,811) | | Net exchange differences | (1,469) | (137) | | (Reversal of impairment)/impairment of financial assets | (1,389) | 883 | | Write-down of inventories to net realisable value | 3,488 | (1,148) | | Gain on disposal of items of property, plant and equipment | (90) | (240) | [Income Tax](index=13&type=section&id=%E6%89%80%E5%BE%97%E7%A8%85) The Group's income tax expense for the period totaled RMB5,436,000, an increase from the prior year's RMB4,891,000 **Components of Income Tax Expense:** | Item | H1 2025 (RMB'000) | H1 2024 (RMB'000) | | :--- | :--- | :--- | | Current income tax - charge for the period | 6,166 | 7,403 | | Deferred tax | (730) | (2,512) | | **Total tax charge for the period** | **5,436** | **4,891** | [Dividend](index=13&type=section&id=%E8%82%A1%E6%81%AF) The Board has resolved not to declare any interim dividend for the six months ended June 30, 2025, consistent with the prior year - The Board has resolved not to declare any interim dividend for the six months ended June 30, 2025 (H1 2024: Nil)[25](index=25&type=chunk) [Earnings Per Share Attributable to Ordinary Equity Holders of the Parent](index=13&type=section&id=%E6%AF%8D%E5%85%AC%E5%8F%B8%E6%99%AE%E9%80%9A%E8%82%A1%E8%82%A1%E6%AC%8A%E6%8C%81%E6%9C%89%E4%BA%BA%E6%87%89%E4%BD%94%E6%AF%8F%E8%82%A1%E7%9B%88%E5%88%A9) For the six months ended June 30, 2025, basic earnings per share attributable to owners of the parent was RMB0.0146 **Calculation of Basic and Diluted Earnings Per Share:** | Item | H1 2025 (RMB'000) | H1 2024 (RMB'000) | | :--- | :--- | :--- | | Profit attributable to owners of the parent for basic and diluted EPS | 25,891 | 18,240 | | Weighted average number of ordinary shares in issue during the period for basic EPS | 1,769,193,800 | 1,769,193,800 | - Basic earnings per share for the period was calculated based on the consolidated net profit attributable to owners of the parent and the weighted average number of 1,769,193,800 ordinary shares in issue[26](index=26&type=chunk) [Property, Plant and Equipment](index=14&type=section&id=%E7%89%A9%E6%A5%AD%E3%80%81%E5%BB%A0%E6%88%BF%E5%8F%8A%E8%A8%AD%E5%82%99) During the period, the Group purchased property, plant and equipment costing RMB85,377,000 and disposed of assets with a net book value of RMB6,744,000 - The Group purchased property, plant and equipment at a cost of **RMB85,377,000** (H1 2024: RMB101,639,000)[28](index=28&type=chunk) - Assets with a net book value of **RMB6,744,000** were disposed of, resulting in a net gain on disposal of RMB90,000[28](index=28&type=chunk) [Trade and Bills Receivables](index=15&type=section&id=%E8%B2%BF%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) As of June 30, 2025, the Group's net trade receivables remained stable, while bills receivable increased **Trade and Bills Receivables:** | Item | June 30, 2025 (RMB'000) | December 31, 2024 (RMB'000) | | :--- | :--- | :--- | | Trade receivables | 716,598 | 773,395 | | Bills receivable | 245,665 | 190,378 | | Impairment of trade receivables | (85,556) | (86,945) | | **Net carrying amount** | **876,707** | **876,828** | **Ageing Analysis of Trade Receivables (net of loss allowance):** | Ageing | June 30, 2025 (RMB'000) | December 31, 2024 (RMB'000) | | :--- | :--- | :--- | | Within 3 months | 556,549 | 642,655 | | 3 to 6 months | 47,097 | 29,688 | | 6 months to 1 year | 23,022 | 12,023 | | Over 1 year | 4,374 | 2,084 | | **Total** | **631,042** | **686,450** | [Trade and Bills Payables](index=16&type=section&id=%E8%B2%BF%E6%98%93%E6%87%89%E4%BB%98%E6%AC%BE%E9%A0%85%E5%8F%8A%E6%87%89%E4%BB%98%E7%A5%A8%E6%93%9A) As of June 30, 2025, the Group's total trade and bills payables increased, with payables within three months accounting for the largest portion **Ageing Analysis of Trade and Bills Payables (based on invoice date):** | Ageing | June 30, 2025 (RMB'000) | December 31, 2024 (RMB'000) | | :--- | :--- | :--- | | Within 3 months | 887,797 | 825,536 | | 3 to 12 months | 395,939 | 378,355 | | 1 to 2 years | 7,528 | 5,227 | | 2 to 3 years | 880 | 3,518 | | Over 3 years | 6,094 | 3,712 | - Certain bills payable were secured by the Group's pledged deposits with a carrying value of **RMB69,277,000** as at June 30, 2025 (December 31, 2024: RMB27,990,000)[32](index=32&type=chunk) [Events After the Reporting Period](index=16&type=section&id=%E5%A0%B1%E5%91%8A%E6%9C%9F%E5%BE%8C%E4%BA%8B%E9%A0%85) The Group had no significant events after the reporting period as of June 30, 2025 - The Group had no significant events after June 30, 2025[33](index=33&type=chunk) [Approval of the Interim Condensed Consolidated Financial Information](index=16&type=section&id=%E6%89%B9%E5%87%86%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) The unaudited interim financial statements were approved and authorized for issue by the Board of Directors on August 29, 2025 - The unaudited interim condensed consolidated financial statements were approved and authorised for issue by the Board of Directors on August 29, 2025[34](index=34&type=chunk) [Management Discussion and Analysis](index=17&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 reviews the Group's business, market performance, financial results, liquidity, and future outlook - This section reviews the Group's business and market performance, analyzes changes in financial indicators, and discusses liquidity, capital structure, major investments, employee policies, and future outlook[35](index=35&type=chunk)[63](index=63&type=chunk) [Business and Market Review](index=17&type=section&id=%E6%A5%AD%E5%8B%99%E5%8F%8A%E5%B8%82%E5%A0%B4%E5%9B%9E%E9%A1%A7) The Group's revenue for H1 2025 was approximately RMB955,046,000, a YoY increase of 23.3%, while profit attributable to owners of the parent grew by 41.9% - The Group is principally engaged in the manufacturing and sales of automotive interior and exterior structural and decorative parts, molds and tooling, air-conditioner housings and reservoirs, and other non-automotive products[35](index=35&type=chunk) | Indicator | H1 2025 (RMB'000) | H1 2024 (RMB'000) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 955,046 | 774,645 | 23.3% | | Profit attributable to owners of the parent | 25,891 | 18,240 | 41.9% | [Financial Review](index=17&type=section&id=%E8%B2%A1%E5%8B%99%E5%9B%9E%E9%A1%A7) This section analyzes changes in the Group's financial indicators, including revenue, gross margin, expenses, and financing costs - The Group's revenue is primarily derived from five product categories: automotive interior and exterior parts, molds and tooling, air-conditioner housings and reservoirs, non-automotive products, and sales of raw materials[36](index=36&type=chunk) [Revenue](index=17&type=section&id=%E6%94%B6%E7%9B%8A) **Revenue and Gross Profit Margin by Product Category:** | Product Category | H1 2025 Revenue (RMB'000) | H1 2025 Gross Margin (%) | H1 2024 Revenue (RMB'000) | H1 2024 Gross Margin (%) | | :--- | :--- | :--- | :--- | :--- | | Automotive interior and exterior structural and decorative parts | 735,473 | 29.4 | 543,222 | 32.2 | | Molds and tooling | 88,029 | 19.7 | 96,485 | 22.8 | | Air-conditioner housings and reservoirs | 59,780 | 21.4 | 78,729 | 20.4 | | Non-automotive products | 20,919 | 37.8 | 23,654 | 38.4 | | Sales of raw materials | 50,845 | 13.5 | 32,555 | 8.4 | | **Total** | **955,046** | **27.4** | **774,645** | **29.0** | - Revenue from automotive interior and exterior parts increased its share from 70.1% to **77.0%**, but its gross margin decreased by 2.8 percentage points[37](index=37&type=chunk) - Revenue from molds and tooling **decreased by 8.8%**, and its gross margin fell by 3.1 percentage points[38](index=38&type=chunk) - Revenue from air-conditioner housings and reservoirs **decreased by 24.0%**, while its gross margin increased by 1.0 percentage point[39](index=39&type=chunk) - Revenue from sales of raw materials **grew by 56.2%**, with its gross margin increasing by 5.1 percentage points[40](index=40&type=chunk) - The overall gross profit margin **decreased to approximately 27.4%** (H1 2024: 29.0%)[40](index=40&type=chunk) [Other Income and Gains](index=19&type=section&id=%E5%85%B6%E4%BB%96%E6%94%B6%E5%85%A5%E5%8F%8A%E6%94%B6%E7%9B%8A) | Indicator | H1 2025 (RMB'000) | H1 2024 (RMB'000) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Other income and gains | 22,984 | 21,719 | 5.8% | [Selling and Distribution Expenses](index=20&type=section&id=%E9%8A%B7%E5%94%AE%E5%8F%8A%E5%88%86%E9%8A%B7%E9%96%8B%E6%94%AF) | Indicator | H1 2025 (RMB'000) | H1 2024 (RMB'000) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Selling and distribution expenses | 71,008 | 58,253 | 21.9% | [Administrative Expenses](index=20&type=section&id=%E8%A1%8C%E6%94%BF%E9%96%8B%E6%94%AF) | Indicator | H1 2025 (RMB'000) | H1 2024 (RMB'000) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Administrative expenses | 182,366 | 165,089 | 10.5% | - The increase in administrative expenses was mainly due to **higher research and development expenses** during the period[43](index=43&type=chunk) [Share of Profit of a Joint Venture](index=20&type=section&id=%E5%88%86%E4%BD%94%E4%B8%80%E9%96%93%E5%90%88%E7%87%9F%E4%BC%81%E6%A5%AD%E7%9A%84%E6%BA%A2%E5%88%A9) | Indicator | H1 2025 (RMB'000) | H1 2024 (RMB'000) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Share of profit of a joint venture | 9,555 | 15,274 | -37.5% | [Finance Income](index=20&type=section&id=%E8%9E%8D%E8%B3%87%E6%94%B6%E5%85%A5) | Indicator | H1 2025 (RMB'000) | H1 2024 (RMB'000) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Finance income | 1,069 | 1,578 | -32.3% | [Finance Costs](index=20&type=section&id=%E8%9E%8D%E8%B3%87%E6%88%E9%9B%86%E6%9C%AC) | Indicator | H1 2025 (RMB'000) | H1 2024 (RMB'000) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Finance costs | 11,058 | 12,847 | -13.9% | - The decrease in finance costs was mainly due to **lower loan interest rates** during the six months ended June 30, 2025[46](index=46&type=chunk) [Tax Expenses](index=21&type=section&id=%E7%A8%85%E9%A0%85%E9%96%8B%E6%94%AF) | Indicator | H1 2025 (RMB'000) | H1 2024 (RMB'000) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Tax expenses | 5,436 | 4,891 | 11.1% | - The increase in tax expenses was mainly due to a **smaller decrease in deferred income tax expense** in H1 2025 compared to H1 2024[47](index=47&type=chunk) [Liquidity and Financial Resources](index=21&type=section&id=%E6%B5%81%E5%8B%95%E8%B3%87%E9%87%91%E5%8F%8A%E8%B2%A1%E5%8B%99%E8%B3%87%E6%BA%90) The Group's net cash from operating activities decreased significantly, leading to a net cash outflow for the period **Cash Flow Summary:** | Item | H1 2025 (RMB'000) | H1 2024 (RMB'000) | | :--- | :--- | :--- | | Net cash flows from operating activities | 29,384 | 130,412 | | Net cash used in investing activities | (75,481) | (86,771) | | Net cash flows from financing activities | 4,829 | 4,141 | | Net cash outflow/(inflow) for the period | (41,268) | 47,782 | **Cash and Cash Equivalents:** | Item | June 30, 2025 (RMB'000) | December 31, 2024 (RMB'000) | | :--- | :--- | :--- | | Cash and cash equivalents | 119,821 | 161,143 | **Interest-bearing Bank and Other Borrowings:** | Item | June 30, 2025 (RMB'000) | December 31, 2024 (RMB'000) | | :--- | :--- | :--- | | Total borrowings | 678,330 | 614,212 | | Due within one year | 434,070 | 256,041 | - The Group's borrowings are subject to interest payable at annual rates ranging from **2.06% to 4.55%**[49](index=49&type=chunk) [Capital Commitments](index=22&type=section&id=%E8%B3%87%E6%9C%AC%E6%89%BF%E6%93%94) As of June 30, 2025, the Group's capital commitments for the purchase of property, plant and equipment increased to approximately RMB142,462,000 | Item | June 30, 2025 (RMB'000) | December 31, 2024 (RMB'000) | | :--- | :--- | :--- | | Capital commitments (for purchase of property, plant and equipment) | 142,462 | 118,475 | [Foreign Exchange Risk](index=22&type=section&id=%E5%A4%96%E5%8C%AF%E9%A2%A8%E9%9A%AA) The Group's foreign exchange risk is not significant as most transactions are denominated in RMB and HKD, and no hedging policy is currently in place - The Group's sales and purchases are mainly denominated in RMB, cash and cash equivalents are mainly in RMB and HKD, and borrowings are in RMB[51](index=51&type=chunk) - As the Group's exposure to exchange rate fluctuations is not significant, **no foreign currency hedging policy is currently adopted**[51](index=51&type=chunk) - Management will closely monitor the Group's foreign exchange risk and consider hedging if it becomes significant[51](index=51&type=chunk) [Capital Structure](index=22&type=section&id=%E8%82%A1%E6%9C%AC%E6%9E%B6%E6%A7%8B) As of June 30, 2025, the total number of issued and fully paid-up ordinary shares of the Company was 1,769,193,800 | Item | June 30, 2025 (Shares) | | :--- | :--- | | Total issued and fully paid-up ordinary shares | 1,769,193,800 | [Contingent Liabilities](index=22&type=section&id=%E6%88%96%E7%84%B6%E8%B2%A0%E5%82%B5) As of June 30, 2025, the Group had no significant contingent liabilities - As at June 30, 2025, the Group had **no significant contingent liabilities** (December 31, 2024: Nil)[53](index=53&type=chunk) [Pledge of Assets](index=23&type=section&id=%E8%B3%87%E7%94%A2%E6%8A%B5%E6%8A%BC) As of June 30, 2025, assets of approximately RMB101,849,000 were pledged to secure certain interest-bearing bank and other borrowings **Carrying Value of Pledged Assets:** | Item | June 30, 2025 (RMB'000) | December 31, 2024 (RMB'000) | | :--- | :--- | :--- | | Property, plant and equipment | 33,628 | 34,624 | | Leasehold land | 38,221 | 38,794 | | Pledged deposits | 30,000 | 30,000 | | **Total** | **101,849** | **103,418** | [Gearing Ratio](index=23&type=section&id=%E8%B3%87%E6%9C%AC%E8%B2%A0%E5%82%B5%E6%AF%94%E7%8E%87) As of June 30, 2025, the Group's gearing ratio was approximately 60.5%, a slight increase from 58.8% at the end of 2024 | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Gearing ratio | 60.5% | 58.8% | - The gearing ratio is calculated as net debt divided by total capital (including equity attributable to owners of the parent) plus net debt at the end of the review period[55](index=55&type=chunk) [Significant Investments Held, Material Acquisitions and Disposals of Subsidiaries, Associates and Joint Ventures, and Future Plans for Material Investments or Capital Assets](index=24&type=section&id=%E6%8C%81%E6%9C%89%E7%9A%84%E9%87%8D%E5%A4%A7%E6%8A%95%E8%B3%87%E3%80%81%E9%87%8D%E5%A4%A7%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%E5%8F%8A%E5%90%88%E7%87%9F%E4%BC%81%E6%A5%AD%E4%BB%A5%E5%8F%8A%E9%87%8D%E5%A4%A7%E6%8A%95%E8%B3%87%E6%88%96%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) A subsidiary acquired a 15% stake in Ningbo Donghua Lotte Automotive Decorative Fabric Co, Ltd, increasing its holding to 80% to enhance control - The Company's wholly-owned subsidiary acquired a **15% equity interest** in Ningbo Donghua Lotte Automotive Decorative Fabric Co, Ltd for a total consideration of EUR4,500,000 (approximately RMB34,290,000)[56](index=56&type=chunk) - Following the acquisition, the Group's shareholding in the target company **increased from 65% to 80%**, aiming to enhance control, improve decision-making, and reduce costs[57](index=57&type=chunk) - The Board and independent directors considered the transaction fair and reasonable, supporting the Group's core business of producing automotive parts in China[57](index=57&type=chunk) - As of the date of this announcement, the Board has **not authorized any plans for material investments** or additions of capital assets[59](index=59&type=chunk) [Employees and Remuneration Policy](index=25&type=section&id=%E5%83%B1%E5%93%A1%E5%8F%8A%E8%96%AA%E9%85%AC%E6%94%BF%E7%AD%96) As of June 30, 2025, the Group had 3,656 employees, with total staff costs increasing year-on-year | Item | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Number of employees | 3,656 | 3,070 | | Total staff costs (RMB'000) | 177,425 | 140,104 | - The Group's remuneration policy complies with relevant legislation, market conditions, and employee performance, with a share option scheme to reward outstanding contributors[60](index=60&type=chunk) [Events After the Reporting Period](index=25&type=section&id=%E5%A0%B1%E5%91%8A%E6%9C%9F%E5%BE%8C%E4%BA%8B%E9%A0%85) The Group had no significant events after the reporting period up to the date of this announcement - The Group had no significant events after June 30, 2025, and up to the date of this announcement[61](index=61&type=chunk) [Outlook](index=25&type=section&id=%E5%B1%95%E6%9C%9B) The Group will expand cooperation with automotive brands, develop lightweight products, and establish a new production facility in Mexico for global expansion - The China Association of Automobile Manufacturers expects total sales of new energy vehicles in China to reach **15.6 million units in 2025**, a year-on-year increase of about 28%[62](index=62&type=chunk) - The Group will continue to expand cooperation with traditional and new energy vehicle brands to develop lightweight new products using high-performance plastics to replace metal parts[63](index=63&type=chunk) - The Group will strengthen its presence in the new energy market, enhance connections with NEV brands, and seek to expand economies of scale[63](index=63&type=chunk) - The Group plans to **establish a new production facility in Mexico** to achieve global business development and secure orders from overseas manufacturers[63](index=63&type=chunk) - The Group will focus on optimizing its product portfolio, improving capacity utilization, and strengthening expense management to enhance profitability[63](index=63&type=chunk) [Forward-Looking Statements](index=26&type=section&id=%E5%89%8D%E7%9E%BB%E9%99%B3%E8%BF%B0%E8%81%B2%E6%98%8E) This analysis contains forward-looking statements involving known and unknown risks that may cause actual results to differ materially from expectations - Forward-looking statements involve known and unknown risks and uncertainties that may cause actual results, performance, or events to differ materially from those expressed or implied in such statements[64](index=64&type=chunk)[65](index=65&type=chunk) [Corporate Governance Code](index=27&type=section&id=%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB%E5%AE%88%E5%89%87) This section details the company's compliance with the Corporate Governance Code, including deviations and committee reports - The Company has adopted the Corporate Governance Code and complied with all applicable code provisions during the reporting period, except for the deviation where the roles of Chairman and CEO are held by the same individual[66](index=66&type=chunk)[67](index=67&type=chunk) [Code Provision C.2.1](index=27&type=section&id=%E5%AE%88%E5%89%87%E6%A2%9D%E6%96%87%E7%AC%ACC.2.1%E6%A2%9D) The Company deviates from Code Provision C.2.1 as Mr Zhou Minfeng serves as both Chairman and CEO, an arrangement the Board believes is effective - Mr Zhou Minfeng currently serves as both the Chairman and Chief Executive Officer of the Company, which deviates from Code Provision C.2.1 of the Corporate Governance Code[67](index=67&type=chunk) - The Board believes that the structure of having the same person as Chairman and CEO can effectively implement the Group's business strategies and operations[67](index=67&type=chunk) - The Board, comprising two executive directors, four non-executive directors, and four independent non-executive directors, possesses a balanced mix of skills and experience for the Group's development and will review this deviation from time to time[67](index=67&type=chunk) [Model Code for Securities Transactions by Directors of Listed Issuers](index=28&type=section&id=%E4%B8%8A%E5%B8%82%E7%99%BC%E8%A1%8C%E4%BA%BA%E8%91%A3%E4%BA%8B%E9%80%B2%E8%A1%8C%E8%AD%89%E5%88%B8%E4%BA%A4%E6%98%93%E7%9A%84%E6%A8%99%E6%BA%96%E5%AE%88%E5%89%87) The Company has adopted the Model Code for Securities Transactions by Directors and all directors have confirmed compliance during the period - The Company has adopted the Model Code for Securities Transactions by Directors as set out in Appendix C3 to the Listing Rules, and all directors have confirmed their compliance during the reporting period[68](index=68&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=28&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) Neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities during the period - Neither the Company nor any of its subsidiaries purchased, sold or redeemed any of the Company's listed securities during the six months ended June 30, 2025[69](index=69&type=chunk) [Interim Dividend](index=28&type=section&id=%E4%B8%AD%E6%9C%9F%E8%82%A1%E6%81%AF) The Board has resolved not to declare any interim dividend for the six months ended June 30, 2025, consistent with the prior year - The Board has resolved not to declare any interim dividend for the six months ended June 30, 2025 (H1 2024: Nil)[70](index=70&type=chunk) [Audit Committee](index=28&type=section&id=%E5%AF%A9%E6%A0%B8%E5%A7%94%E5%93%A1%E6%9C%83) The Audit Committee, comprising three independent non-executive directors, has reviewed the interim results and found them to be properly prepared - The Audit Committee comprises three independent non-executive directors, namely Ms Xu Li (Chairlady), Mr Wang Dongchen and Mr Xu Jiali[71](index=71&type=chunk) - The primary duties of the Audit Committee are to review and supervise the Group's financial reporting process, risk management, and internal control systems[71](index=71&type=chunk) - The Audit Committee has reviewed the interim results announcement for the six months ended June 30, 2025, and considers it to be prepared in accordance with applicable accounting standards, rules, and regulations with appropriate disclosures made[71](index=71&type=chunk)[72](index=72&type=chunk) [Acknowledgement](index=29&type=section&id=%E8%87%B4%E8%AC%9D) The Chairman of the Board extends his gratitude to the directors for their guidance and to the employees for their diligent work - The Chairman of the Board thanks the directors for their valuable advice and guidance, and all employees for their hard work and dedication to the Group[73](index=73&type=chunk) [Publication of Interim Results and Interim Report](index=29&type=section&id=%E5%88%8A%E7%99%BC%E4%B8%AD%E6%9C%9F%E6%A5%AD%E7%B8%BE%E5%8F%8A%E4%B8%AD%E6%9C%9F%E5%A0%B1%E5%91%8A) This interim results announcement is published on the websites of the Stock Exchange and the Company, with the interim report to follow - This interim results announcement is published on the website of the Stock Exchange (www.hkexnews.hk) and the Company's website (http://www.cn-huazhong.com)[74](index=74&type=chunk) - The interim report for the six months ended June 30, 2025 will be dispatched to shareholders and published on the websites of the Stock Exchange and the Company in due course[74](index=74&type=chunk)

[Company Overview and Financial Summary](index=1&type=section&id=Company%20Overview%20and%20Financial%20Summary) This section provides an overview of Lecoo Group Limited and its financial performance for H1 2025 [Company Information and Announcement Statement](index=1&type=section&id=Company%20Information%20and%20Announcement%20Statement) Lecoo Group Limited (2540) announced H1 2025 unaudited interim results; HKEX disclaims responsibility - Lecoo Group Limited (Stock Code: 2540) released its unaudited interim results announcement for the six months ended June 30, 2025[2](index=2&type=chunk)[3](index=3&type=chunk) - Hong Kong Exchanges and Clearing Limited is not responsible for the content of this announcement, makes no representation as to its accuracy or completeness, and expressly disclaims any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement[1](index=1&type=chunk) [Financial Performance Summary](index=1&type=section&id=Financial%20Performance%20Summary) H1 2025 revenue surged 127.3% to RMB 682,939 thousand, but gross profit and net profit declined, signaling profitability pressure Financial Performance Summary for the Six Months Ended June 30 | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 682,939 | 300,519 | 127.3% | | Gross Profit | 33,249 | 42,998 | -22.7% | | Profit Before Tax | 11,139 | 29,710 | -62.5% | | Profit for the Period Attributable to Owners of the Company | 10,651 | 28,274 | -62.3% | [Management Discussion and Analysis](index=2&type=section&id=Management%20Discussion%20and%20Analysis) This section reviews macroeconomic conditions, business segment performance, and the Group's competitive strategies [Macroeconomic and Business Review](index=2&type=section&id=Macroeconomic%20and%20Business%20Review) H1 2025 saw macroeconomic recovery and consumer market improvements, but an uncertain business climate led to a 62.6% net profit decline - In the first half of 2025, the macroeconomic environment gradually recovered with structural improvements in the consumer market, but the business environment remained uncertain, leading enterprises to adopt a cautious approach[6](index=6&type=chunk) - The Group focused on core resources, enhancing its ability to provide comprehensive marketing services to quality clients and committed to building high-quality content (text, images, short videos) production capabilities[7](index=7&type=chunk) Key Business Indicators for H1 2025 | Metric | H1 2025 (RMB millions) | H1 2024 (RMB millions) | Growth Rate | | :--- | :--- | :--- | :--- | | Total Billing | 963.1 | 435.2 | 121.3% | | Total Revenue | 682.9 | 300.5 | 127.3% | | Net Profit | 10.7 | 28.6 | -62.6% | [Business Segment Performance](index=2&type=section&id=Business%20Segment%20Performance) Mobile advertising solutions revenue surged 137.8% to 99.6% of total revenue, while advertising distribution services revenue sharply declined 81.4% [Mobile Advertising Solutions Services](index=2&type=section&id=Mobile%20Advertising%20Solutions%20Services) The Group provides comprehensive mobile advertising services, collaborating with 17 media platforms of four major Chinese tech companies, driving a 137.8% revenue increase - The Group provides comprehensive mobile advertising services, covering marketing planning, traffic acquisition, advertisement production, placement optimization, and campaign management[8](index=8&type=chunk) - Business relationships have been established with **17 media platforms** of **four well-known technology companies** in China, covering short video, search engines, news and information, mobile browsers, app stores, and social media platforms[9](index=9&type=chunk) - For the six months ended June 30, 2025, **188 clients** were served, primarily from China's technology, internet services, financial services, and e-commerce industries[10](index=10&type=chunk) Revenue from Mobile Advertising Solutions Services | Metric | H1 2025 (RMB millions) | H1 2024 (RMB millions) | Growth Rate | | :--- | :--- | :--- | :--- | | Revenue | 680.2 | 286.0 | 137.8% | | Proportion of Total Revenue | 99.6% | - | - | [Advertising Distribution Services](index=3&type=section&id=Advertising%20Distribution%20Services) Advertising distribution services revenue dropped 81.4% to RMB 2.7 million in H1 2025 due to business adjustments and declining transaction rates - Advertising distribution services, as an independent service, primarily generate arbitrage by purchasing and reselling advertising space[11](index=11&type=chunk) Revenue from Advertising Distribution Services | Metric | H1 2025 (RMB millions) | H1 2024 (RMB millions) | Change Rate | | :--- | :--- | :--- | :--- | | Revenue | 2.7 | 14.5 | -81.4% | [Competitive Advantages and Strategies](index=3&type=section&id=Competitive%20Advantages%20and%20Strategies) The Group enhances market position and growth through strong media partnerships, expanded short video production, optimized platforms, and M&A pursuits [Top-tier Media Partner Relationships](index=3&type=section&id=Top-tier%20Media%20Partner%20Relationships) The Group maintains strong relationships with leading Chinese media platforms, distributing mobile ads across 17 platforms for four major tech companies - As of June 30, 2025, the Group is a distributor for **four well-known Chinese technology companies**, enabling direct distribution of mobile advertisements across their **17 media platforms**[13](index=13&type=chunk) - The strategy is to develop and maintain a balanced portfolio of media platforms, leveraging stable traffic and user data to customize mobile advertising solutions for clients[13](index=13&type=chunk)[14](index=14&type=chunk) [Expansion of Short Video Production Capabilities](index=4&type=section&id=Expansion%20of%20Short%20Video%20Production%20Capabilities) The Group possesses in-house video production capabilities and actively explores AI-generative technologies to enhance service and profitability - The Group possesses in-house video production capabilities, offering end-to-end services from project planning, concept development, scriptwriting, filming, editing, to post-production[15](index=15&type=chunk) - Actively exploring the practical application of various new technologies in short video production, including **AI-generative technologies**[15](index=15&type=chunk) [Optimization of Proprietary Platform Functions](index=5&type=section&id=Optimization%20of%20Proprietary%20Platform%20Functions) The Group optimizes cost structure and efficiency via its ERP system, planning platform upgrades to enhance data collection and analytical capabilities - The Group utilizes its proprietary integrated application as an Enterprise Resource Planning (ERP) system to manage accounting, finance, operations, orders, data, and customer information[16](index=16&type=chunk) - Plans to upgrade platform functions to automatically collect media platform traffic usage data and mobile user behavior data, and add computing capabilities to enhance market analysis accuracy[16](index=16&type=chunk) [Business Cooperation and M&A Opportunities](index=5&type=section&id=Business%20Cooperation%20and%20M%26A%20Opportunities) The Group plans to explore cross-border e-commerce collaborations and seek M&A opportunities to strengthen technology and expand service offerings - Plans to explore cooperation with media platforms, specializing in the **cross-border e-commerce market**, to strengthen technological capabilities and existing business synergies[17](index=17&type=chunk) - Seeking business cooperation and M&A opportunities with established companies to expand advertising content creation and post-production service capabilities in specific regional and overseas markets[17](index=17&type=chunk) [Financial Performance Analysis](index=6&type=section&id=Financial%20Performance%20Analysis) This section analyzes the Group's revenue, cost of services, gross profit, other income/expenses, and net profit for the reporting period [Revenue Analysis](index=6&type=section&id=Revenue%20Analysis) H1 2025 revenue increased 127.3% to RMB 682.9 million, driven by mobile advertising solutions, while advertising distribution services revenue declined - Group revenue increased by **127.3%** year-on-year to **RMB 682.9 million**, primarily driven by increased demand for mobile advertising solutions services[18](index=18&type=chunk) Revenue Breakdown (For the Six Months Ended June 30) | Service Type | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Mobile advertising solutions services (gross basis) | 680,218 | 285,989 | | Advertising distribution services (net basis) | 2,721 | 14,530 | | **Total Revenue** | **682,939** | **300,519** | - Revenue from mobile advertising solutions services grew by **137.8%** to **RMB 680.2 million**, while advertising distribution services revenue decreased by **81.4%** to **RMB 2.7 million**[20](index=20&type=chunk)[21](index=21&type=chunk) [Cost of Services and Gross Profit](index=7&type=section&id=Cost%20of%20Services%20and%20Gross%20Profit) Cost of services increased 152.3% to RMB 649.7 million, leading to a 22.8% gross profit decrease and a gross margin decline to 4.9% - Cost of services increased by **152.3%** year-on-year to **RMB 649.7 million**, primarily due to increased traffic acquisition costs and reduced rebates from media partners[22](index=22&type=chunk) - Gross profit decreased by **22.8%** to **RMB 33.2 million**, with gross margin significantly declining from **14.3% to 4.9%**, mainly impacted by rebate policy adjustments and an increased proportion of mobile advertising solutions services revenue[23](index=23&type=chunk) [Other Income and Expenses](index=7&type=section&id=Other%20Income%20and%20Expenses) Other net income turned to a loss, selling/marketing and G&A expenses increased, finance costs rose, and income tax expenses fell due to preferential rates [Other Net (Loss)/Income](index=7&type=section&id=Other%20Net%20%28Loss%29%2FIncome) H1 2025 other net loss was RMB 177 thousand, a significant decrease from prior year's net income, mainly due to reduced interest income and government subsidies Other Net (Loss)/Income (For the Six Months Ended June 30) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Other net (loss)/income | (177) | 3,741 | -105.4% | - The decrease was primarily due to reduced interest income and government subsidies[24](index=24&type=chunk) [Selling and Marketing Expenses](index=7&type=section&id=Selling%20and%20Marketing%20Expenses) Selling and marketing expenses increased 30.8% to RMB 1.7 million, mainly due to higher staff welfare, entertainment, and travel expenses from business expansion - Selling and marketing expenses increased by **30.8%** year-on-year to **RMB 1.7 million**, mainly due to increased staff welfare, entertainment, and travel expenses associated with business expansion[25](index=25&type=chunk) [General and Administrative Expenses](index=8&type=section&id=General%20and%20Administrative%20Expenses) General and administrative expenses increased 38.0% to RMB 14.9 million, driven by R&D expansion, increased staff, higher depreciation, and new office expenses - General and administrative expenses increased by **38.0%** year-on-year to **RMB 14.9 million**, primarily due to the expansion of the R&D department, increased operational staff, higher depreciation, and property management expenses for new offices[26](index=26&type=chunk) [Impairment Loss on Trade and Other Receivables](index=8&type=section&id=Impairment%20Loss%20on%20Trade%20and%20Other%20Receivables) Impairment loss on trade and other receivables decreased 8.6% to RMB 3.2 million, mainly due to reduced older outstanding receivables - Impairment loss on trade and other receivables decreased by **8.6%** year-on-year to **RMB 3.2 million**, mainly due to a reduction in older outstanding receivables[27](index=27&type=chunk) [Finance Costs](index=8&type=section&id=Finance%20Costs) Finance costs increased 57.1% to RMB 2.2 million, driven by higher factoring fees and lease interest, partially offset by lower bank loan interest - Finance costs increased by **57.1%** year-on-year to **RMB 2.2 million**, primarily due to higher factoring fees and interest on lease liabilities, partially offset by a decrease in bank loan interest[28](index=28&type=chunk) [Income Tax](index=8&type=section&id=Income%20Tax) Income tax expense decreased 58.3% to RMB 0.5 million, with low effective tax rates due to tax holidays and preferential rates for high-tech subsidiaries - Income tax expense decreased by **58.3%** year-on-year to **RMB 0.5 million**[29](index=29&type=chunk) - The effective tax rate was low (**4.4% in 2025, 3.9% in 2024**), mainly because some Chinese subsidiaries enjoyed tax holidays and a **15% preferential tax rate** for high-tech enterprises[29](index=29&type=chunk) [Profit for the Period](index=9&type=section&id=Profit%20for%20the%20Period) Profit for the period decreased 62.6% to RMB 10.7 million, with net profit margin falling from 9.5% to 1.6% due to reduced gross profit and increased expenses - Profit for the period significantly decreased by **62.6%** year-on-year to **RMB 10.7 million**[30](index=30&type=chunk) - Net profit margin declined from **9.5% to 1.6%**, primarily due to reduced gross profit and increased selling, general, and administrative expenses[30](index=30&type=chunk) [Liquidity and Capital Resources](index=9&type=section&id=Liquidity%20and%20Capital%20Resources) This section details the Group's liquidity, capital expenditure, contingent liabilities, and key financial ratios [Liquidity Overview](index=9&type=section&id=Liquidity%20Overview) The Group's operations require substantial funding, with bank borrowings increasing, gearing ratio rising, and cash decreasing as of June 30, 2025 - The Group's business operations and expansion plans require substantial funding, primarily for purchasing advertising space, content production, labor costs, and other recurring expenses[31](index=31&type=chunk) - Funding sources primarily include cash generated from operating activities, proceeds from the initial public offering, and bank loans[32](index=32&type=chunk) Key Liquidity Indicators | Metric | June 30, 2025 (RMB millions) | December 31, 2024 (RMB millions) | Change | | :--- | :--- | :--- | :--- | | Bank Borrowings | 94.7 | 36.7 | Increase | | Gearing Ratio | 20.4% | 6.5% | Increase | | Cash and Cash Equivalents | 106.3 | 149.4 | Decrease | - The effective weighted average annual interest rate for bank and other loans was approximately **5.2%** (4.8% for H1 2024)[32](index=32&type=chunk) [Capital Expenditure and Contingent Liabilities](index=9&type=section&id=Capital%20Expenditure%20and%20Contingent%20Liabilities) Capital expenditure primarily involves property, equipment, and subsidiary acquisitions, with no significant capital commitments or contingent liabilities as of June 30, 2025 - Capital expenditure primarily includes expenses for property and equipment and acquisitions of subsidiaries[34](index=34&type=chunk) - As of June 30, 2025, the Group had no material capital commitments or contingent liabilities[34](index=34&type=chunk)[35](index=35&type=chunk) [Key Financial Ratios](index=10&type=section&id=Key%20Financial%20Ratios) Profitability ratios declined significantly, with gross margin at 4.9% and net profit margin at 1.6%; current ratio dropped, and gearing ratio increased Key Financial Ratios | Metric | June 30, 2025 (%) | June 30, 2024 (%) | Change | | :--- | :--- | :--- | :--- | | Gross Margin | 4.9 | 14.3 | Decrease | | Net Profit Margin | 1.6 | 9.5 | Decrease | | Return on Equity | 1.7 | 10.1 | Decrease | | Return on Total Assets | 1.1 | 7.0 | Decrease | | Current Ratio | 2.9x | 4.0x | Decrease | | Gearing Ratio | 20.4 | 6.5 | Increase | [Consolidated Financial Statements](index=11&type=section&id=Consolidated%20Financial%20Statements) This section presents the Group's consolidated statement of comprehensive income and financial position [Consolidated Statement of Comprehensive Income](index=11&type=section&id=Consolidated%20Statement%20of%20Comprehensive%20Income) H1 2025 revenue increased to RMB 682,939 thousand, but surging service costs led to substantial declines in gross profit and profit Consolidated Statement of Comprehensive Income Summary (For the Six Months Ended June 30) | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Revenue | 682,939 | 300,519 | | Cost of services | (649,690) | (257,521) | | Gross Profit | 33,249 | 42,998 | | Profit Before Tax | 11,139 | 29,710 | | Profit for the period | 10,651 | 28,560 | | Total comprehensive income for the period | 10,367 | 31,397 | - Basic and diluted earnings per share were **RMB 0.02** (RMB 0.06 in 2024)[38](index=38&type=chunk) [Consolidated Statement of Financial Position](index=13&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, non-current assets increased due to right-of-use assets, trade receivables rose, cash decreased, and liabilities increased Consolidated Statement of Financial Position Summary (As of June 30) | Metric | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | **Non-current assets** | | | | Property and equipment | 2,480 | 601 | | Right-of-use assets | 31,513 | 3,751 | | **Current assets** | | | | Trade and other receivables | 835,892 | 661,484 | | Cash and cash equivalents | 106,346 | 149,421 | | **Current liabilities** | | | | Trade and other payables | 200,895 | 148,949 | | Bank and other loans | 91,919 | 36,657 | | **Total equity** | 622,383 | 612,016 | - Total non-current assets increased from **RMB 4,749 thousand** to **RMB 34,745 thousand**, primarily due to a significant increase in right-of-use assets[39](index=39&type=chunk) - Net current assets increased from **RMB 608,435 thousand** to **RMB 616,782 thousand**[39](index=39&type=chunk) [Notes to the Financial Statements](index=15&type=section&id=Notes%20to%20the%20Financial%20Statements) This section provides detailed notes on the Group's general information, accounting policies, and specific financial statement items [General Information](index=15&type=section&id=General%20Information) Lecoo Group Limited, incorporated in Cayman Islands on June 22, 2020, provides mobile advertising services and listed on HKEX on March 8, 2024 - The company was incorporated in the Cayman Islands on **June 22, 2020**, primarily engaged in providing mobile advertising services[41](index=41&type=chunk) - The company's shares were listed on the Main Board of the Hong Kong Stock Exchange on **March 8, 2024**[41](index=41&type=chunk) [Summary of Significant Accounting Policies and Changes](index=15&type=section&id=Summary%20of%20Significant%20Accounting%20Policies%20and%20Changes) This interim financial report, prepared under HKEX Listing Rules and IAS 34, applies 2024 accounting policies; IAS 21 (Amendment) has no material impact - The interim financial report is prepared in accordance with the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited and International Accounting Standard 34[42](index=42&type=chunk) - International Accounting Standard 21 (Amendment) 'The Effects of Changes in Foreign Exchange Rates – Lack of Exchangeability' has been applied, but it has no material impact on this interim announcement[43](index=43&type=chunk) [Revenue Notes](index=16&type=section&id=Revenue%20Notes) The Group's primary businesses are mobile advertising solutions and advertising distribution services, with H1 2025 revenue of RMB 680,218 thousand and RMB 2,721 thousand respectively - The Group's principal businesses are providing mobile advertising solutions services and advertising distribution services[45](index=45&type=chunk) Revenue Classification (For the Six Months Ended June 30) | Service Type | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Mobile advertising solutions services (gross basis) | 680,218 | 285,989 | | Advertising distribution services (net basis) | 2,721 | 14,530 | - All of the Group's revenue is generated from external customers in China, and non-current assets are primarily located in China[45](index=45&type=chunk) [Other Net (Loss)/Income Notes](index=16&type=section&id=Other%20Net%20%28Loss%29%2FIncome%20Notes) H1 2025 other net loss was RMB 177 thousand, a significant decrease from prior year's net income, mainly due to reduced interest income and government subsidies Other Net (Loss)/Income (For the Six Months Ended June 30) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Interest income | 99 | 1,580 | | Government grants | 150 | 2,144 | | Others | (426) | 17 | | **Total** | **(177)** | **3,741** | [Profit Before Tax Notes](index=16&type=section&id=Profit%20Before%20Tax%20Notes) Profit before tax was RMB 11,139 thousand, after deducting finance costs, depreciation, and impairment loss on trade and other receivables Finance Costs (For the Six Months Ended June 30) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Interest expense | 1,711 | 1,341 | | Interest on lease liabilities | 493 | 51 | | **Total** | **2,204** | **1,392** | Other Items (For the Six Months Ended June 30) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Depreciation expense | 3,229 | 1,342 | | Impairment loss on trade and other receivables | 3,165 | 3,520 | [Income Tax Notes](index=17&type=section&id=Income%20Tax%20Notes) Income tax expense was RMB 488 thousand, mainly from China corporate income tax, with a low effective tax rate due to tax holidays and preferential rates for high-tech subsidiaries Income Tax (For the Six Months Ended June 30) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Current tax | 628 | 1,526 | | Deferred tax | (140) | (376) | | **Total** | **488** | **1,150** | - Some Chinese subsidiaries enjoy tax holidays or a **15% preferential tax rate** (high-tech enterprises), resulting in a lower effective tax rate[49](index=49&type=chunk)[50](index=50&type=chunk) [Earnings Per Share Notes](index=18&type=section&id=Earnings%20Per%20Share%20Notes) H1 2025 basic earnings per share were RMB 0.02, identical to diluted EPS due to no dilutive potential ordinary shares - Basic earnings per share were **RMB 0.02** (RMB 0.06 for H1 2024)[52](index=52&type=chunk) - Diluted earnings per share were the same as basic earnings per share, as there were no dilutive potential ordinary shares during the reporting period[53](index=53&type=chunk) [Right-of-Use Assets Notes](index=18&type=section&id=Right-of-Use%20Assets%20Notes) Right-of-use assets relate to leased office premises and staff dormitories, with RMB 33.4 million additions recognized for new lease agreements in H1 2025 - Right-of-use assets refer to leased office premises and staff dormitories[54](index=54&type=chunk) - For the six months ended June 30, 2025, additions to right-of-use assets of **RMB 33.4 million** were recognized due to new lease agreements[54](index=54&type=chunk) [Trade and Other Receivables Notes](index=18&type=section&id=Trade%20and%20Other%20Receivables%20Notes) As of June 30, 2025, total trade and other receivables were RMB 835,892 thousand, with trade receivables at RMB 721,492 thousand, mostly due within 6 months Aging Analysis of Trade and Other Receivables (As of June 30) | Aging | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Within 6 months | 636,451 | 325,495 | | 6 to 12 months | 44,885 | 126,296 | | 12 to 24 months | 40,156 | 16 | | **Trade receivables, net of loss allowance** | **721,492** | **451,807** | - Trade receivables are due within **90 days** from the invoice date[55](index=55&type=chunk) [Trade and Other Payables Notes](index=19&type=section&id=Trade%20and%20Other%20Payables%20Notes) As of June 30, 2025, total trade and other payables were RMB 200,895 thousand, with trade payables at RMB 114,706 thousand, primarily due within 3 months Aging Analysis of Trade and Other Payables (As of June 30) | Aging | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Within 3 months | 113,968 | 58,808 | | 3 to 6 months | 441 | 25,459 | | 6 months to 1 year | 245 | 36 | | **Trade payables** | **114,706** | **84,332** | [Capital, Reserves and Dividends Notes](index=19&type=section&id=Capital%2C%20Reserves%20and%20Dividends%20Notes) H1 2025 directors did not recommend dividends; issued share capital was 500,000 thousand shares, valued at RMB 3,537 thousand - For the six months ended June 30, 2025, the directors did not recommend the payment of any dividend[57](index=57&type=chunk) Share Capital Movement (As of June 30) | Item | June 30, 2025 (thousand shares) | June 30, 2025 (RMB thousands) | December 31, 2024 (thousand shares) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | :--- | :--- | | As at January 1 | 500,000 | 3,537 | 20,000 | 130 | | As at June 30/December 31 | 500,000 | 3,537 | 500,000 | 3,537 | [Other Information](index=20&type=section&id=Other%20Information) This section covers major customers/suppliers, employees, IPO proceeds, future investments, and corporate governance [Major Customers and Suppliers](index=20&type=section&id=Major%20Customers%20and%20Suppliers) H1 2025 top five customers and largest customer accounted for 72.5% and 22.0% of total revenue; top five suppliers and largest supplier accounted for 99.1% and 89.7% of cost of services - The **top five customers** and the **largest customer** accounted for **72.5%** and **22.0%** of total revenue respectively[59](index=59&type=chunk) - The **top five suppliers** and the **largest supplier** accounted for **99.1%** and **89.7%** of cost of services respectively[59](index=59&type=chunk) - No director or their close associates or shareholders holding **more than 5%** of the shares had any material interest in the top five customers or suppliers[59](index=59&type=chunk) [Employees Information](index=20&type=section&id=Employees%20Information) As of June 30, 2025, the Group had 226 full-time employees in China, with total staff costs of RMB 14.7 million for H1, providing social security plans - As of June 30, 2025, the Group had **226 full-time employees** (December 31, 2024: 150 employees), all based in China[60](index=60&type=chunk) - For the six months ended June 30, 2025, total staff costs were approximately **RMB 14.7 million**[60](index=60&type=chunk) - The Group provides social security plans for its employees, including housing, pension, medical, work injury, and unemployment benefits[60](index=60&type=chunk) [Use of Net Proceeds from Initial Public Offering](index=20&type=section&id=Use%20of%20Net%20Proceeds%20from%20Initial%20Public%20Offering) IPO net proceeds were HKD 85.5 million (RMB 78.7 million); HKD 45.8 million utilized by June 30, 2025, for mobile advertising, short video, and platform upgrades - The net proceeds from the initial public offering were approximately **HKD 85.5 million** (approximately **RMB 78.7 million**)[61](index=61&type=chunk) Use of Net Proceeds from Initial Public Offering (As of June 30, 2025) | Future Plans | Expected Proportion of Net Proceeds (%) | Total Net Proceeds Utilized (HKD millions) | Utilized as of December 31, 2024 (HKD millions) | Utilized for the Six Months Ended June 30, 2025 (HKD millions) | Utilized as of June 30, 2025 (HKD millions) | | :--- | :--- | :--- | :--- | :--- | :--- | | Expand mobile advertising business in China | 40.0 | 34.1 | 31.6 | – | 2.5 | | Expand short video production capabilities | 20.0 | 17.1 | – | 3.4 | 13.7 | | Optimize and upgrade proprietary platform functions | 20.0 | 17.1 | – | 2.2 | 14.9 | | Seek business cooperation and M&A opportunities with established companies | 10.0 | 8.6 | – | – | 8.6 | | General working capital | 10.0 | 8.6 | 8.6 | – | – | | **Total** | **100.0** | **85.5** | **45.8** | **28.6** | **11.1** | - There were no material changes or delays in the use of net proceeds, except for funds allocated to exploring business cooperation and M&A opportunities with large-scale companies, which were delayed due to the inability to acquire suitable target companies[62](index=62&type=chunk) [Plans for Material Investments or Capital Asset Purchases](index=22&type=section&id=Plans%20for%20Material%20Investments%20or%20Capital%20Asset%20Purchases) As of this announcement, the Group has no plans for material investments or capital asset purchases beyond disclosed IPO proceeds usage - As of the date of this announcement, the Group has no plans for material investments or capital asset purchases, other than those disclosed for the use of IPO proceeds[64](index=64&type=chunk) [Material Investments, Acquisitions and Disposals](index=22&type=section&id=Material%20Investments%2C%20Acquisitions%20and%20Disposals) H1 2025 saw no material investments, acquisitions, or disposals of subsidiaries, associates, or joint ventures - For the six months ended June 30, 2025, the Group held no material investments and undertook no material acquisitions or disposals of its subsidiaries, associates, or joint ventures[65](index=65&type=chunk) [Events After the Reporting Period](index=22&type=section&id=Events%20After%20the%20Reporting%20Period) In July 2025, a Group subsidiary entered guarantee contracts with media platform suppliers for advertising space payments, with Mr. Zhao Libing also providing guarantees - In July 2025, a Group subsidiary entered into guarantee contracts with certain media platform suppliers to secure payment obligations for advertising space purchases by Group subsidiaries[66](index=66&type=chunk) - Additionally, Mr. Zhao Libing also provided guarantees to media platform suppliers for the acquisition of advertising space[66](index=66&type=chunk) [Interim Dividend](index=22&type=section&id=Interim%20Dividend) The directors do not recommend any dividend payment for the six months ended June 30, 2025 - The directors do not recommend the payment of any dividend for the six months ended June 30, 2025[68](index=68&type=chunk) [Corporate Governance and Securities Transactions](index=22&type=section&id=Corporate%20Governance%20and%20Securities%20Transactions) The Group maintains high corporate governance standards, complying with the Corporate Governance Code, and all directors adhere to the Standard Code for Securities Transactions [Corporate Governance Code](index=22&type=section&id=Corporate%20Governance%20Code) The Group maintains high corporate governance standards, complying with Appendix C1 Part 2 of the Listing Rules' Corporate Governance Code for H1 2025 - The Group is committed to maintaining high standards of corporate governance and has complied with the Corporate Governance Code set out in Appendix C1 Part 2 of the Listing Rules[69](index=69&type=chunk) [Standard Code for Securities Transactions](index=23&type=section&id=Standard%20Code%20for%20Securities%20Transactions) The company adopted the Standard Code for Securities Transactions in Appendix C3 of the Listing Rules, with all directors confirming compliance throughout the reporting period - The company has adopted the Standard Code for Securities Transactions in Appendix C3 of the Listing Rules, and all directors confirmed compliance with the code throughout the reporting period[71](index=71&type=chunk) [Purchase, Sale or Redemption of Listed Securities](index=23&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20Listed%20Securities) Neither the company nor its subsidiaries purchased, sold, or redeemed any listed securities during H1 2025 and up to the announcement date - Neither the company nor its subsidiaries purchased, sold, or redeemed any of the company's listed securities during the six months ended June 30, 2025, and up to the date of this announcement[72](index=72&type=chunk) [Audit Committee and Review of Financial Information](index=23&type=section&id=Audit%20Committee%20and%20Review%20of%20Financial%20Information) The Audit Committee, established on February 21, 2024, oversees financial reporting and internal controls; this unaudited interim result was reviewed by KPMG and approved - The Audit Committee was established on **February 21, 2024**, comprising **three independent non-executive directors**, with Mr. Hu Hui as chairman[73](index=73&type=chunk) - The Audit Committee's primary responsibilities include reviewing and overseeing the Group's financial reporting process and internal control systems[73](index=73&type=chunk) - These interim results are unaudited but have been reviewed by KPMG in accordance with Hong Kong Standard on Review Engagements 2410 and approved by the Audit Committee[74](index=74&type=chunk) [Publication of Report](index=24&type=section&id=Publication%20of%20Report) This results announcement is published on HKEX and company websites; the full interim report will be published on these sites in due course - This results announcement has been published on the HKEX website (www.hkexnews.hk) and the company's website (www.lscx.com.cn)[75](index=75&type=chunk) - The interim report, containing all information required by the Listing Rules, will be published on the aforementioned websites in due course[75](index=75&type=chunk)

[**Company Information**](index=3&type=section&id=%E5%85%AC%E5%8F%B8%E8%B3%87%E6%96%99) The company's board members include executive, non-executive, and independent non-executive directors, with stock code 1736 and website www.ci123.com - Board members include executive directors Zhang Lake Mozi (Chairman) and Cheng Li; non-executive directors Zhang Haihua and Song Yuanyuan; and independent non-executive directors Zhao Zhen, Huang Mengting, and Pan Wenni[6](index=6&type=chunk) - The company's stock code is **1736**, and its website is www.ci123.com[8](index=8&type=chunk) [**Summary**](index=5&type=section&id=%E6%91%98%E8%A6%81) The company experienced a significant revenue decline but improved gross profit, while net loss increased substantially for the six months ended June 30, 2025 Key Financial Indicators for the Six Months Ended June 30, 2025 (RMB'000) | Indicator | June 30, 2025 (Unaudited) | June 30, 2024 (Unaudited) | Change | | :--- | :--- | :--- | :--- | | Revenue | 9,475 | 16,539 | -42.7% | | Gross Profit | 2,686 | 1,599 | +68.0% | | Loss for the Period | (21,925) | (10,262) | +113.6% | | Total Loss Attributable to Owners of the Company | (21,925) | (10,262) | +113.6% | [**Management Discussion and Analysis**](index=6&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) This section provides an overview of the company's business, financial performance, and future strategies, including risk factors and investment policies [**Business Review**](index=6&type=section&id=%E6%A5%AD%E5%8B%99%E5%9B%9E%E9%A1%A7) Yu'erwang focuses on serving young Chinese families by providing personalized smart home solutions through content, private domain, e-commerce, and O2O services - Yu'erwang focuses on serving young Chinese families, providing personalized smart home solutions through four matrices: content, private domain, e-commerce, and O2O services, to cover the entire family consumption chain[11](index=11&type=chunk) - Deeply engaging with new-generation maternal and infant families, enhancing high-quality content productivity, and collaborating with professional institutions like the China National Committee for the Wellbeing of the Youth and the National Health Commission to develop 0-6 year-old parent school curriculum systems and content co-creation projects[12](index=12&type=chunk) - The community matrix's total coverage exceeded **5.26 million person-times**, with a total of **27,300+ communities**, building a professional, full-chain health operation map to activate private domain GMV[12](index=12&type=chunk) - Through content empowerment, platform operations, public relations marketing, local life services, channel management, and smart services across the entire family consumption chain, the company creates an open, multi-scenario ecosystem to achieve external circulation of communication effects and generate more brand value increments[13](index=13&type=chunk) - Yu'erwang has **25,000+ maternal and infant stores** using the Mamishop SaaS system, **40,000+ educational institutions** using the Yu'erwang Education System Jiaowubao, and the Parent-Child Weekend platform serves **tens of thousands of offline merchants**, with accumulated **30 million family trips**[14](index=14&type=chunk) [**Future Outlook**](index=7&type=section&id=%E6%9C%AA%E4%BE%86%E5%B1%95%E6%9C%9B) Yu'erwang will continue to innovate and improve its ecosystem to provide personalized smart home solutions for young Chinese families and drive brand growth - The company will continue to innovate and progress, constantly improving its ecosystem layout, committed to providing personalized smart home solutions for young Chinese families[15](index=15&type=chunk) - To help brands achieve sustained business growth[15](index=15&type=chunk) [**Financial Review**](index=7&type=section&id=%E8%B2%A1%E5%8B%99%E5%9B%9E%E9%A1%A7) Revenue significantly declined due to reduced e-commerce wholesale and advertising, but lower sales costs boosted gross profit, while loss for the period increased due to subsidiary disposals and other factors - Revenue was approximately **RMB9.5 million**, a decrease of approximately **43%** from the same period last year, primarily due to reduced e-commerce wholesale and a decline in advertising and promotion business in the first half of the year[16](index=16&type=chunk) - Cost of sales was approximately **RMB6.8 million**, a decrease of approximately **55%** from the same period last year, mainly due to fewer orders during the current period[17](index=17&type=chunk) - Gross profit was approximately **RMB2.7 million**, an increase of approximately **68%** from the same period last year; gross profit margin increased from approximately **9.7%** to approximately **28.3%**, as APP product maintenance expenses were concentrated in 2024 and returned to normal in 2025[18](index=18&type=chunk) - Other income, gains and losses resulted in a loss of approximately **RMB8.0 million**, a decrease of approximately **226%** from the same period last year, primarily due to the disposal of two subsidiaries[19](index=19&type=chunk) - Selling and distribution expenses were approximately **RMB2.7 million**, a decrease of approximately **59%** from the same period last year, mainly due to sluggish market conditions[20](index=20&type=chunk) - Administrative expenses were approximately **RMB7.7 million**, an increase of approximately **8%** from the same period last year, mainly due to increased intermediary fees[21](index=21&type=chunk) - Research and development costs were approximately **RMB2.8 million**, an increase of approximately **35%** from the same period last year, mainly due to increased investment in technology development[22](index=22&type=chunk) - Income tax expense was approximately **RMB0.4 million**, with no income tax expense in the same period last year[23](index=23&type=chunk) - Loss for the period was approximately **RMB21.9 million**, an increase of approximately **114%** from the same period last year[24](index=24&type=chunk) [**Gearing Ratio**](index=8&type=section&id=%E8%B3%87%E7%94%A2%E8%B2%A0%E5%82%B5%E6%AF%94%E7%8E%87) As of June 30, 2025, the Group's gearing ratio (total liabilities divided by total assets) was 137%, an increase from 112% on December 31, 2024 - Gearing ratio: **137%** (June 30, 2025) vs **112%** (December 31, 2024)[25](index=25&type=chunk) [**Liquidity and Financial Resources**](index=8&type=section&id=%E6%B5%81%E5%8B%95%E8%B3%87%E9%87%91%E5%92%8C%E8%B2%A1%E5%8B%99%E8%B3%87%E6%BA%90) As of June 30, 2025, the Group had net current liabilities of approximately RMB27.0 million, cash and cash equivalents of RMB4.2 million, and borrowings of RMB23.5 million - Net current liabilities approximately **RMB27.0 million** (June 30, 2025) vs approximately **RMB20.4 million** (December 31, 2024)[26](index=26&type=chunk) - Cash and cash equivalents approximately **RMB4.2 million** (June 30, 2025) vs approximately **RMB2.8 million** (December 31, 2024)[26](index=26&type=chunk) - Borrowings approximately **RMB23.5 million** (June 30, 2025) vs approximately **RMB21.5 million** (December 31, 2024)[26](index=26&type=chunk) [**Foreign Exchange Risk**](index=8&type=section&id=%E5%A4%96%E5%BD%99%E9%A2%A8%E9%9A%AA) The Group's transactions are primarily settled in RMB, with some cash and bank deposits in HKD; no significant operational impact or liquidity issues from exchange rate fluctuations occurred - The Group's transactions are primarily settled in RMB, with some cash and bank deposits settled in HKD[27](index=27&type=chunk) - During the period, no significant operational impact or liquidity difficulties resulted from exchange rate fluctuations, nor were there any hedging transactions or forward contract arrangements[27](index=27&type=chunk) [**Employees, Training and Remuneration Policies**](index=9&type=section&id=%E5%83%B1%E5%93%A1%E3%80%81%E5%9F%B9%E8%A8%93%E5%8F%8A%E8%96%AA%E9%85%AC%E6%94%BF%E7%AD%96) As of June 30, 2025, the Group had 33 employees with total staff costs of approximately RMB1.9 million, and provides training based on performance and tenure - As of June 30, 2025, the Group had a total of **33 employees** (including executive directors), a decrease from **41** as of June 30,

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不負責， 對其準確性或完整性亦不發表任何聲明，並明確表示，概不對因本公告全部或任 何部分內容而產生或因倚賴該等內容而引致的任何損失承擔任何責任。 SHENZHEN HEPALINK PHARMACEUTICAL GROUP CO., LTD. （深圳市海普瑞藥業集團股份有限公司） （於中華人民共和國註冊成立的股份有限公司） （股份代號：9989） 截至二零二五年六月三十日止六個月之中期業績公告 深圳市海普瑞藥業集團股份有限公司（「本公司」、「公司」或「海普瑞」）董事會（「董 事會」）欣然宣佈本公司及其子公司（「本集團」或「我們」）截至二零二五年六月三十 日止六個月（「報告期」）之未經審核綜合中期業績，連同二零二四年同期的比較數字。 財務摘要 截至二零二五年六月三十日止六個月，本集團錄得以下未經審核業績： | | 截至6月30日止六個月 | | | | --- | --- | --- | --- | | | 2025年 人民幣千元 | 2024年 人民幣千元 | 變動% | | 收入 | 2,791,387 | 2,828,657 | -1.3% ...

[Company Information and Financial Highlights](index=1&type=section&id=%E5%85%AC%E5%8F%B8%E4%BF%A1%E6%81%AF%E4%B8%8E%E8%B4%A2%E5%8A%A1%E6%91%98%E8%A6%81) This section provides an overview of the company's key information and a summary of its financial performance for the reporting period [Disclaimer and Forward-Looking Statements](index=1&type=section&id=%E5%85%8D%E8%B4%A3%E5%A3%B0%E6%98%8E%E4%B8%8E%E5%89%8D%E7%9E%BB%E6%80%A7%E9%99%88%E8%BF%B0) This announcement contains forward-looking statements involving known and unknown risks and uncertainties that may cause actual results to differ materially from expectations, and the company disclaims any obligation to update or revise these statements - This announcement contains forward-looking statements involving known and unknown risks and uncertainties that may cause actual results, performance, or achievements to differ materially from those expressed or implied by such statements[2](index=2&type=chunk) - The company assumes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise[2](index=2&type=chunk) [Company Overview and Reporting Period](index=1&type=section&id=%E5%85%AC%E5%8F%B8%E6%A6%82%E5%86%B5%E4%B8%8E%E6%8A%A5%E5%91%8A%E6%9C%9F) Rego Interactive Co., Ltd (stock code: 2422) has released its unaudited condensed interim consolidated financial results announcement for the six months ended June 30, 2025 - The company name is Rego Interactive Co., Ltd, with stock code 2422[3](index=3&type=chunk) - This announcement presents interim results for the six months ended June 30, 2025, including comparative figures for the six months ended June 30, 2024[3](index=3&type=chunk)[4](index=4&type=chunk) [Financial Summary](index=1&type=section&id=%E8%B4%A2%E5%8A%A1%E6%91%98%E8%A6%81) For the six months ended June 30, 2025, the company's revenue increased by 16.8% year-on-year to RMB 135,766 thousand, but gross profit significantly decreased by 48.0% to RMB 21,543 thousand, resulting in a loss for the period of RMB 19,644 thousand attributable to owners of the company, with an adjusted net loss of RMB 19,116 thousand, and the Board resolved not to declare an interim dividend Financial Performance Highlights | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 135,766 | 116,204 | +16.8 | | Gross Profit | 21,543 | 41,467 | -48.0 | | (Loss) / Profit Before Income Tax | (20,786) | 3,184 | -752.8 | | (Loss) / Profit for the Period Attributable to Owners of the Company | (19,644) | 3,457 | -668.2 | | Adjusted Net (Loss) / Profit | (19,116) | 4,031 | -574.2 | - The Board has resolved not to declare any interim dividend for the reporting period ended June 30, 2025 (June 30, 2024: nil)[6](index=6&type=chunk) [Management Discussion and Analysis](index=2&type=section&id=%E7%AE%A1%E7%90%86%E5%B1%82%E8%AE%A8%E8%AE%BA%E5%8F%8A%E5%88%86%E6%9E%90) This section provides an in-depth analysis of the company's operational performance, financial results, and strategic initiatives [Business Review](index=2&type=section&id=%E4%B8%9A%E5%8A%A1%E5%9B%9E%E9%A1%BE) In the first half of 2025, the Group faced challenges from a sluggish Chinese consumer market and reduced corporate marketing budgets, but also seized opportunities from digital transformation and AI technology, actively expanding new products like lottery experience vouchers and reorganizing its business into enterprise digitalization services and industry digitalization services to adapt to market changes and achieve cross-industry empowerment - The Chinese consumer market was sluggish in 2024, with many companies cutting marketing budgets, but digital transformation continued to drive technological development trends, leading to rapid shifts in corporate marketing strategies[7](index=7&type=chunk) - The Group leveraged its experience in the advertising market to launch lottery experience vouchers as a new product to achieve client marketing objectives and will continue to market these products to various brand clients in 2025[10](index=10&type=chunk) - The Group reorganized its operating segments into two core businesses: enterprise digitalization services and industry digitalization services, aiming to achieve cross-industry empowerment services in the future[16](index=16&type=chunk) [China Market Overview](index=2&type=section&id=%E4%B8%AD%E5%9B%BD%E5%B8%82%E5%9C%BA%E6%A6%82%E8%A7%88) The Chinese advertising market cooled due to weak client demand and intense competition, but the digital advertising market is rapidly transforming, driven by AI and automation, emphasizing personalized marketing and ad targeting, while the Chinese lottery market continues to grow, reaching RMB 623.5 billion in sales in 2024, a 7.6% year-on-year increase, with its public welfare contribution becoming increasingly important - The Chinese advertising market faces weak client demand and intense competition, with companies cutting advertising spending or shifting to marketing activities that quickly boost sales, leading to a gradual cooling of the market[8](index=8&type=chunk) - Driven by AI and automation, China's digital advertising market is rapidly transforming and flourishing, requiring companies to focus on leveraging AI to enhance personalized marketing and ad targeting[8](index=8&type=chunk) China Lottery Annual Sales | Indicator | 2024 Sales (RMB billion) | 2023 Sales (RMB billion) | Year-on-Year Growth (%) | | :--- | :--- | :--- | :--- | | China Lottery Annual Sales | 623.5 | 580.0 (estimated) | 7.6 | | Welfare Lottery Sales | 208.0 | 194.4 (estimated) | 7.0 | | Sports Lottery Sales | 415.5 | 385.0 (estimated) | 7.9 | [Our Group's Business](index=3&type=section&id=%E6%9C%AC%E9%9B%86%E5%9B%A2%E4%B8%9A%E5%8A%A1) Since 2015, the Group has specialized in digital marketing services, covering the lottery industry, virtual goods procurement and delivery, and physical goods supply chain, demonstrating strong R&D capabilities in lottery solutions across 23 provinces and over 130,000 sales points, while also integrating supply chain resources to provide employee benefits and O2O marketing solutions for corporate clients, and launching lottery experience vouchers as an innovative marketing tool in 2024 - The Group has been deeply involved in digital marketing services since 2015, with businesses covering the lottery industry, integrated virtual goods procurement and delivery services, and physical goods supply chain[13](index=13&type=chunk) - The Group possesses strong R&D capabilities in lottery solutions, having established business relationships with provincial welfare lottery issuance and administration centers in 23 provinces, municipalities, and autonomous regions nationwide, covering over 130,000 lottery sales points[14](index=14&type=chunk) - The Group focuses on providing "online-offline integrated" solution services, promoting clients' digital transformation, and building a marketing service operation platform[16](index=16&type=chunk) [Enterprise Digitalization Services](index=4&type=section&id=%E4%BC%81%E4%B8%9A%E6%95%B0%E5%AD%97%E5%8C%96%E6%9C%8D%E5%8A%A1) Enterprise digitalization services aim to enhance corporate private domain traffic through promotion, advertising, and user acquisition/retention solutions, with the company continuously developing virtual and physical goods supply chains, actively expanding to new clients in financial services, insurance, and telecom operators, and leveraging innovative lottery experience vouchers to boost consumer activity and brand influence - Enterprise digitalization services focus on providing promotion and advertising services, as well as user acquisition and retention solutions, to help enterprises enhance their private domain traffic[17](index=17&type=chunk) - The Group builds a digital service capability matrix through its main business lines, with a one-stop marketing solution as its core product, integrating upstream and downstream supply chain resources to create a digital marketing service platform[19](index=19&type=chunk) - Lottery experience vouchers were approved by the China Sports Lottery Center in 2023 as a third-party service system provider, offering marketing services to enterprises with redemption capabilities at lottery centers, effectively boosting consumer desire and corporate image[21](index=21&type=chunk)[22](index=22&type=chunk) [Physical Goods Procurement and Delivery Services](index=6&type=section&id=%E5%AE%9E%E7%89%A9%E5%95%86%E5%93%81%E9%87%87%E8%B4%AD%E5%8F%8A%E4%BA%A4%E4%BB%98%E6%9C%8D%E5%8A%A1) Since 2024, the Group has focused on physical goods procurement and delivery services, building a comprehensive supply chain for clients through its marketing service operation platform, offering group buying and employee welfare procurement services, operating two warehouses with over 3,311 SKUs, and providing customized online shopping center solutions, while also partnering with a renowned liquor sales company for distribution and cross-selling with lottery experience vouchers - Since 2024, the Group has focused on physical goods procurement and delivery services, building a comprehensive supply chain for clients through its marketing service operation platform, offering group buying and employee welfare procurement services[23](index=23&type=chunk) - The company operates two warehouses with over 3,311 stock-keeping units (SKUs), ensuring operational efficiency to meet client demands, and provides customized online shopping center solutions[23](index=23&type=chunk) - The Group entered into a cooperation agreement with a renowned Chinese liquor sales company to provide liquor distribution services and a lottery experience voucher marketing agreement to help retain clients through cross-selling[24](index=24&type=chunk) [Industry Digitalization Services](index=6&type=section&id=%E8%A1%8C%E4%B8%9A%E6%95%B0%E5%AD%97%E5%8C%96%E6%9C%8D%E5%8A%A1) The Group's industry digitalization services focus on the lottery sector, leveraging its strengths in serving the welfare lottery industry across over 23 provinces, providing lottery security, information management, and regulatory systems as one of China's leading lottery solution providers, having won over 8 bidding projects for lottery terminals or maintenance services, and will focus on AI digital lottery stores to gather private domain traffic in the future - Industry digitalization services focus on the lottery industry, leveraging the Group's strengths in serving the welfare lottery industry across over 23 provinces[25](index=25&type=chunk) - The Group is one of China's leading lottery solution providers, offering lottery security, information management, and regulatory systems, and has won over 8 bidding projects in the first half of 2025[26](index=26&type=chunk)[27](index=27&type=chunk) - The company will focus on AI digital lottery stores for the remainder of 2025 and beyond, gathering private domain traffic from lottery operators and stores[28](index=28&type=chunk) [Our Group's Development History](index=7&type=section&id=%E6%9C%AC%E9%9B%86%E5%9B%A2%E5%8F%91%E5%B1%95%E5%8E%86%E5%8F%B2) The Group's development spans from building operator value-added services (2009-2016) to developing digital platforms (e.g., Rego Virtual Goods Platform, 2017-2020), achieving breakthroughs in lottery industry digitalization (2021-2023), expanding and integrating supply chains (2024), and implementing an AI digital lottery store model in 2025 to provide technical support for intelligent development and optimize marketing solutions in the lottery industry - From 2009 to 2016, the Group focused on expanding its marketing service capabilities, starting with traditional offline channels and expanding its service portfolio to online marketing services while accumulating core technologies[31](index=31&type=chunk) - From 2017 to 2020, the Group successfully developed and launched a series of digital platforms, including the Rego Virtual Goods Platform and RegoAd SDK, initiating its digital transformation[33](index=33&type=chunk) - In 2025, the Group focuses on developing the AI digital lottery store model, aiming to build a large-scale model for the lottery industry, provide technical support for intelligent development, optimize marketing solutions, and promote a comprehensive upgrade of intelligent marketing in the lottery industry[36](index=36&type=chunk) [Financial Review](index=9&type=section&id=%E8%B4%A2%E5%8A%A1%E5%9B%9E%E9%A1%BE) For the six months ended June 30, 2025, the Group's revenue increased by 16.8% year-on-year to RMB 135.8 million, primarily driven by significant growth in physical goods procurement and delivery services; however, due to a shift in revenue focus towards lower-margin physical goods services, gross profit decreased by 48.2% year-on-year to RMB 21.5 million, with gross margin falling to 15.9%, resulting in a loss for the period of RMB 19.6 million attributable to owners of the company - Total revenue increased by **16.8%** from RMB 116.2 million for the six months ended June 30, 2024, to **RMB 135.8 million** for the six months ended June 30, 2025, primarily due to increased revenue from enterprise digitalization services, particularly physical goods procurement and delivery services[53](index=53&type=chunk) - Gross profit decreased by **48.2%** to **RMB 21.5 million**, and gross margin declined from **35.7%** to **15.9%**, mainly due to a shift in revenue structure towards physical goods procurement and delivery services recognized on a gross basis[55](index=55&type=chunk)[56](index=56&type=chunk) - (Loss) / Profit for the period shifted from a profit of approximately **RMB 2.7 million** in the prior year to a loss of approximately **RMB 20.8 million** in 2025, representing an **870.4%** decrease[63](index=63&type=chunk) [Revenue](index=9&type=section&id=%E6%94%B6%E7%9B%8A) The Group's total revenue increased by 16.8% to RMB 135.8 million, with enterprise digitalization services contributing 92.1% of revenue and growing by 15.7%, primarily driven by strong growth in physical goods procurement and delivery services offsetting a decline in virtual goods, while industry digitalization services revenue increased by 30.5% mainly from lottery-related system and equipment sales Revenue by Business Segment | Business Segment | 2025 (RMB thousand) | 2025 (%) | 2024 (RMB thousand) | 2024 (%) | | :--- | :--- | :--- | :--- | :--- | | **Enterprise Digitalization Services** | **125,036** | **92.1** | **108,014** | **93.0** | | Enterprise Private Domain Traffic Marketing Services | 30,294 | 22.3 | 24,798 | 21.4 | | Marketing Service Operation Platform Services – Virtual Goods Procurement and Delivery Services | 6,851 | 5.0 | 32,000 | 27.5 | | Marketing Service Operation Platform Services – Physical Goods Procurement and Delivery Services | 87,504 | 64.5 | 50,789 | 43.7 | | Others | 387 | 0.3 | 427 | 0.4 | | **Industry Digitalization Services** | **10,730** | **7.9** | **8,190** | **7.0** | | Lottery-related Software Systems and Equipment Solutions | 10,730 | 7.9 | 8,190 | 7.0 | | **Total** | **135,766** | **100.0** | **116,204** | **100.0** | - Revenue from enterprise digitalization services increased by **15.7%** from approximately **RMB 108.0 million** in the prior year to approximately **RMB 125.0 million** in 2025, primarily due to an increase of **RMB 36.7 million** in revenue from physical goods procurement and delivery services[38](index=38&type=chunk) - Revenue from industry digitalization services increased by **30.5%** from approximately **RMB 8.2 million** in the prior year to approximately **RMB 10.7 million** in 2025, mainly because related contracts were signed near the end of the 2024 financial year, and sales were transferred to clients in the first half of 2025[52](index=52&type=chunk) [Enterprise Digitalization Services Revenue](index=10&type=section&id=%E4%BC%81%E4%B8%9A%E6%95%B0%E5%AD%97%E5%8C%96%E6%9C%8D%E5%8A%A1%E6%94%B6%E7%9B%8A) Enterprise digitalization services revenue increased by 15.7% to RMB 125.0 million, primarily driven by a significant RMB 36.7 million increase in physical goods procurement and delivery services revenue, which offset a RMB 25.1 million decrease in virtual goods procurement and delivery services revenue, leading to a lower proportion of online service revenue and a higher proportion of hybrid model revenue, with advertising agency clients' revenue share significantly increasing while enterprise clients' share decreased Revenue by Marketing Channel Type | Marketing Channel Type | 2025 (RMB thousand) | 2025 (%) | 2024 (RMB thousand) | 2024 (%) | | :--- | :--- | :--- | :--- | :--- | | Online | 37,532 | 30.0 | 57,225 | 53.0 | | Hybrid | 87,504 | 70.0 | 50,788 | 47.0 | | **Total** | **125,036** | **100.0** | **108,014** | **100.0** | Revenue by Client Type | Client Type | 2025 (RMB thousand) | 2025 (%) | 2024 (RMB thousand) | 2024 (%) | | :--- | :--- | :--- | :--- | :--- | | Advertising Agencies | 60,088 | 48.1 | 33,172 | 30.7 | | Enterprises | 64,948 | 51.9 | 74,842 | 69.3 | | **Total** | **125,036** | **100.0** | **108,014** | **100.0** | - The proportion of revenue from enterprise clients decreased from **69.3%** in the prior year to **51.9%** in 2025, mainly due to the Group maintaining a prudent policy in selecting high-quality clients to control credit risk[41](index=41&type=chunk) [Industry Digitalization Services Revenue](index=15&type=section&id=%E8%A1%8C%E4%B8%9A%E6%95%B0%E5%AD%97%E5%8C%96%E6%9C%8D%E5%8A%A1%E6%94%B6%E7%9B%8A) Industry digitalization services revenue, primarily from lottery-related software systems and equipment solutions, increased by 30.5% from approximately RMB 8.2 million in the prior year to approximately RMB 10.7 million in 2025, mainly due to certain lottery-related system and equipment sales contracts signed at the end of the 2024 fiscal year and transferred in the first half of 2025 - Industry digitalization services revenue primarily provides lottery-related software systems and equipment solutions, including lottery security and payment systems[51](index=51&type=chunk) - Revenue increased by **30.5%** to **RMB 10.7 million**, mainly due to an increase of **RMB 2.0 million** in revenue recognized at a point in time, with related contracts signed near the end of the 2024 financial year and transferred to clients in the first half of 2025[52](index=52&type=chunk) [Cost of Sales](index=16&type=section&id=%E9%94%80%E5%94%AE%E6%88%90%E6%9C%AC) Total cost of sales increased by 52.9% year-on-year to RMB 114.2 million, primarily due to a significant RMB 61.0 million increase in inventory costs for physical goods procurement and delivery services and lottery system and equipment sales, with inventory costs being the largest component of cost of sales, accounting for approximately 53.5% - Total cost of sales increased by **52.9%** from approximately **RMB 74.7 million** in the prior year to approximately **RMB 114.2 million** in 2025[54](index=54&type=chunk) - This was primarily due to an increase of **RMB 61.0 million** in inventory costs for physical goods procurement and delivery services and lottery system and equipment sales for the six months ended June 30, 2025, compared to the same period last year[54](index=54&type=chunk) - Inventory costs accounted for approximately **53.5%** and **63.7%** of the cost of sales for the periods ended June 30, 2025, and 2024, respectively, constituting the largest portion of cost of sales[54](index=54&type=chunk) [Gross Profit and Gross Margin](index=16&type=section&id=%E6%AF%9B%E5%88%A9%E5%8F%8A%E6%AF%9B%E5%88%A9%E7%8E%87) Gross profit decreased by 48.2% year-on-year to RMB 21.5 million, with gross margin falling from 35.7% to 15.9%, primarily attributed to a shift in revenue structure in 2025 towards physical goods procurement and delivery services, which are recognized on a gross basis and accounted for 64.5% of total revenue, leading to increased inventory costs and a lower overall gross margin - Gross profit was approximately **RMB 21.5 million**, a decrease of approximately **48.2%** compared to approximately **RMB 41.5 million** in the prior year[55](index=55&type=chunk) - Gross margin decreased from **35.7%** in the prior year to **15.9%** in 2025[56](index=56&type=chunk) - This was mainly due to an increase in revenue from physical goods procurement and delivery services recognized on a gross basis, which accounted for **64.5%** of total revenue (2024: **43.7%**), leading to increased inventory costs and a decrease in gross profit[56](index=56&type=chunk) [Other Income and Other Gains or Losses](index=17&type=section&id=%E5%85%B6%E4%BB%96%E6%94%B6%E5%85%A5%E5%8F%8A%E5%85%B6%E4%BB%96%E6%94%B6%E7%9B%8A%E6%88%96%E4%BA%8F%E6%8D%9F) For the six months ended June 30, 2025, total other income and other gains or losses amounted to approximately RMB 1.8 million, consistent with the prior year, primarily comprising bank interest income, government grants, exchange gains, and miscellaneous income - Other income and other gains or losses primarily include bank interest income, government grants, exchange gains, and miscellaneous income[57](index=57&type=chunk) - Other income for the six months ended June 30, 2025, was approximately **RMB 1.8 million**, consistent with approximately **RMB 1.8 million** for the six months ended June 30, 2024[57](index=57&type=chunk) [Selling and Distribution Expenses](index=17&type=section&id=%E9%94%80%E5%94%AE%E5%8F%8A%E5%88%86%E9%94%80%E5%BC%80%E6%94%AF) Selling and distribution expenses slightly decreased by 0.9% year-on-year to approximately RMB 10.8 million, primarily including staff welfare, travel and entertainment, advertising and promotion, rent depreciation, and technical support service fees, maintaining a stable level in the first half of 2025 - Selling and distribution expenses decreased by **0.9%** from approximately **RMB 10.9 million** in the prior year to approximately **RMB 10.8 million** in 2025[58](index=58&type=chunk) - These primarily include staff welfare expenses, travel and entertainment expenses, advertising and promotion expenses, rent, depreciation and impairment of right-of-use assets, and service fees related to technical support, software development, and equipment installation for lottery-related software systems and equipment solutions[58](index=58&type=chunk) [Administrative Expenses](index=17&type=section&id=%E8%A1%8C%E6%94%BF%E5%BC%80%E6%94%AF) Administrative expenses decreased by 3.4% year-on-year to approximately RMB 14.1 million, primarily comprising staff welfare, travel and entertainment, professional fees, and general office expenses, maintaining a stable level in the first half of 2025 - Administrative expenses decreased by **3.4%** from approximately **RMB 14.6 million** in the prior year to approximately **RMB 14.1 million** in 2025[59](index=59&type=chunk) - These primarily include staff welfare expenses, travel and entertainment expenses, professional fees, and general office expenses[59](index=59&type=chunk) [Research and Development Expenses](index=18&type=section&id=%E7%A0%94%E5%8F%91%E5%BC%80%E6%94%AF) Research and development expenses decreased by 6.8% year-on-year to approximately RMB 9.6 million, primarily including R&D staff salaries, technical services and license fees, and depreciation of property, plant, and equipment, consistent with the trend of decreasing revenue from secondary business software development and maintenance services - Research and development expenses decreased by **6.8%** from approximately **RMB 10.3 million** in the prior year to approximately **RMB 9.6 million** in 2025[60](index=60&type=chunk) - These primarily include salaries, bonuses, and other benefits for R&D personnel; technical services and license fees; and depreciation of property, plant, and equipment[60](index=60&type=chunk) - This decrease is consistent with the trend of decreasing revenue from the Group's secondary business software development and maintenance services[60](index=60&type=chunk) [Finance Costs](index=18&type=section&id=%E8%9E%8D%E8%B5%84%E6%88%90%E6%9C%AC) Finance costs decreased by 36.0% year-on-year to approximately RMB 1.6 million, primarily due to the company's efforts to secure financing at lower effective interest rates, resulting in a reduction of approximately RMB 1.0 million in bank borrowing interest expenses - Finance costs decreased by **36.0%** from approximately **RMB 2.5 million** in the prior year to approximately **RMB 1.6 million** in 2025[61](index=61&type=chunk) - This was primarily due to the company's efforts in 2025 to obtain financing at lower effective interest rates, resulting in a reduction of approximately **RMB 1.0 million** in bank borrowing interest expenses[61](index=61&type=chunk) [Income Tax Expense](index=18&type=section&id=%E6%89%80%E5%BE%97%E7%A8%8E%E5%BC%80%E6%94%AF) Income tax expense significantly decreased by 94.7% year-on-year to approximately RMB 24 thousand, primarily due to a reduction in taxable profit, with the effective income tax rate falling from 14.2% to -0.12% as most subsidiaries were in a loss position in the first half of 2025 - Income tax expense decreased by **94.7%** from approximately **RMB 453 thousand** in the prior year to approximately **RMB 24 thousand** in 2025, primarily due to a decrease in taxable profit[62](index=62&type=chunk) - The effective income tax rate decreased from **14.2%** in the prior year to **-0.12%** in 2025, as most subsidiaries were in a loss position for the period ended June 30, 2025[62](index=62&type=chunk) [(Loss) / Profit for the Period](index=18&type=section&id=%E6%9C%9F%E5%86%85%EF%BC%88%E4%BA%8F%E6%8D%9F%EF%BC%89%E2%88%95%E6%BA%A2%E5%88%A9) (Loss) / Profit for the period shifted from a profit of approximately RMB 2.7 million in the prior year to a loss of approximately RMB 20.8 million in 2025, representing an 870.4% year-on-year decrease - (Loss) / Profit for the period decreased by approximately **RMB 23.5 million** or **870.4%** from a profit of approximately **RMB 2.7 million** for the six months ended June 30, 2024, to a loss of approximately **RMB 20.8 million** for the six months ended June 30, 2025[63](index=63&type=chunk) [Non-HKFRS Measure: Adjusted Net (Loss) / Profit](index=19&type=section&id=%E9%9D%9E%E9%A6%99%E6%B8%AF%E8%B4%A2%E5%8A%A1%E6%8A%A5%E5%91%8A%E5%87%86%E5%88%99%E8%AE%A1%E9%87%8F%EF%BC%9A%E7%BB%8F%E8%B0%83%E6%95%B4%EF%BC%88%E4%BA%8F%E6%8D%9F%EF%BC%89%E2%88%95%E6%BA%A2%E5%88%A9%E5%87%80%E9%A2%9D) To supplement HKFRS, the company uses adjusted net (loss) / profit as an additional financial measure to help investors understand and assess operating performance by eliminating items management believes do not reflect performance, such as translation differences and fair value changes of financial assets at fair value through profit or loss; as of June 30, 2025, the adjusted net loss was RMB 19,116 thousand, compared to a profit of RMB 4,031 thousand in the prior year - The company uses adjusted net (loss) / profit as an additional financial measure to eliminate the potential impact of items management believes do not reflect performance, helping to compare performance across different years and companies[64](index=64&type=chunk) Adjusted Net (Loss) / Profit | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | (Loss) / Profit for the Period Attributable to Owners of the Company | (19,644) | 3,457 | | Add: Translation Differences | 26 | (4) | | Add: Fair Value Changes of Financial Assets at Fair Value Through Profit or Loss | 502 | 578 | | **Adjusted Net (Loss) / Profit** | **(19,116)** | **4,031** | [Liquidity, Financial and Capital Resources](index=19&type=section&id=%E6%B5%81%E5%8A%A8%E8%B5%84%E9%87%91%E3%80%81%E8%B4%A2%E5%8A%A1%E5%8F%8A%E8%B5%84%E6%9C%AC%E8%B5%84%E6%BA%90) As of June 30, 2025, the Group had 229 full-time employees with total staff costs of approximately RMB 23.5 million, total interest-bearing borrowings of RMB 98.5 million, and a gearing ratio of 34.0%; cash and cash equivalents decreased to RMB 103.7 million primarily due to increased advances to suppliers for business development, with capital expenditures and working capital funded by bank borrowings, global offering, and rights issue proceeds, while significant investments include the acquisition of Shanghai Maichun Brand Management Co., Ltd (Target Company A) (due diligence extended) and the completed acquisition of the remaining equity in Cai Ping Fang Technology Co., Ltd (Target Company B); controlling shareholders have pledged shares as collateral for a subsidiary's bank borrowings, and the company maintains a prudent financial management approach, closely monitoring liquidity and foreign exchange risks without using financial instruments for hedging - As of June 30, 2025, the Group had **229** full-time employees, with total staff costs of approximately **RMB 23.5 million**[66](index=66&type=chunk)[67](index=67&type=chunk) - As of June 30, 2025, the Group had interest-bearing borrowings of approximately **RMB 98.5 million**, and its gearing ratio was **34.0%** (December 31, 2024: **28.0%**)[69](index=69&type=chunk)[70](index=70&type=chunk) - Cash and cash equivalents decreased from **RMB 139.0 million** as of December 31, 2024, to **RMB 103.7 million**, primarily due to an increase of **RMB 53.0 million** in advances to suppliers for business development[71](index=71&type=chunk) - The company completed the acquisition of the remaining equity in Cai Ping Fang Technology Co., Ltd (Target Company B) for **RMB 18,300,000**, with the transaction finalized in July 2025[77](index=77&type=chunk)[79](index=79&type=chunk) - Controlling shareholders have pledged a portion of the company's shares (approximately **3.95%** of total issued share capital) as collateral for a **RMB 18,500,000** bank borrowing by Hangzhou Rego Network Co., Ltd, a wholly-owned subsidiary[82](index=82&type=chunk)[83](index=83&type=chunk) Key Financial Ratios | Financial Ratio | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Gross Margin | 15.9% | 26.9% | | Net Profit Margin | -15.3% | -16.1% | | Adjusted Net Profit Margin | -14.9% | -12.5% | | Return on Equity | -6.2% | -11.0% | | Return on Total Assets | -3.5% | -7.4% | | Current Ratio | 2.0 times | 2.7 times | | Quick Ratio | 2.0 times | 2.7 times | | Gearing Ratio | 34.0% | 28.0% | | Debt to Equity Ratio | 3.2% | Not Applicable | [Employees and Remuneration Policy](index=19&type=section&id=%E5%83%B1%E5%93%A1%E5%8F%8A%E8%96%AA%E9%85%AC%E6%94%BF%E7%AD%96) As of June 30, 2025, the Group had 229 full-time employees primarily located in Hangzhou, Shanghai, and Xi'an, China, with remuneration based on performance, experience, capabilities, and market levels, offering competitive salaries, performance bonuses, housing allowances, and career development opportunities, with total staff costs of approximately RMB 23.5 million and contributions to mandatory social security funds, and while an employee share option scheme was adopted in 2022, no options were granted during the reporting period - As of June 30, 2025, the Group had **229** full-time employees, primarily located in Hangzhou, Shanghai, and Xi'an, China[66](index=66&type=chunk) - Employee remuneration is determined based on performance, experience, capabilities, and market comparable levels, offering competitive salaries, performance bonuses, housing allowances, team-building activities, and career development opportunities[66](index=66&type=chunk) - For the six months ended June 30, 2025, the Group's total staff costs were approximately **RMB 23.5 million** (prior year: approximately **RMB 25.3 million**)[67](index=67&type=chunk) [Contingent Liabilities and Indebtedness](index=20&type=section&id=%E6%88%96%E7%84%B6%E8%B4%9F%E5%80%BA%E5%8F%8A%E5%80%BA%E9%A1%B9) As of June 30, 2025, the Group had interest-bearing borrowings of approximately RMB 98.5 million, including unsecured and secured, secured and unsecured, and unsecured and unsecured portions, all repayable within one year or on demand, in addition to lease liabilities of RMB 6.2 million, with no other significant contingent liabilities - As of June 30, 2025, the Group had interest-bearing borrowings of approximately **RMB 98.5 million**, of which approximately **RMB 32.0 million** were unsecured and guaranteed, **RMB 9.0 million** were secured and guaranteed, and **RMB 57.5 million** were unsecured and unguaranteed[69](index=69&type=chunk) - As of June 30, 2025, the Group had lease liabilities of **RMB 6.2 million**[69](index=69&type=chunk) - Save as disclosed above, as of June 30, 2025, the Group had no other significant contingent liabilities[69](index=69&type=chunk) [Liquidity, Financial and Capital Resources](index=21&type=section&id=%E6%B5%81%E5%8A%A8%E8%B5%84%E9%87%91%E3%80%81%E8%B4%A2%E5%8A%A1%E5%8F%8A%E8%B5%84%E6%9C%AC%E8%B5%84%E6%BA%90) The Group primarily funds capital expenditures and working capital through bank borrowings, proceeds from the 2022 global offering, and the 2023 rights issue; as of June 30, 2025, bank borrowings were approximately RMB 98.5 million with effective interest rates ranging from 2.7% to 4.8%, and the gearing ratio was 34.0%; cash and cash equivalents decreased to RMB 103.7 million mainly due to increased advances to suppliers, and the company has not engaged in any financial instrument hedging - The Group primarily funds capital expenditures and working capital requirements through bank borrowings, proceeds from the company's global offering in October 2022, and proceeds from the rights issue in December 2023[70](index=70&type=chunk) - As of June 30, 2025, bank borrowings were approximately **RMB 98.5 million**, with effective interest rates ranging from **2.7%** to **4.8%** per annum[70](index=70&type=chunk) - The Group's gearing ratio as of June 30, 2025, was **34.0%** (December 31, 2024: **28.0%**)[70](index=70&type=chunk) - Cash and cash equivalents decreased by **RMB 35.3 million** from **RMB 139.0 million** as of December 31, 2024, to **RMB 103.7 million**, primarily due to an increase of **RMB 53.0 million** in advances to suppliers for business development[71](index=71&type=chunk) [Significant Investments, Acquisitions and Disposals of Major Subsidiaries, Associates and Joint Ventures](index=21&type=section&id=%E9%87%8D%E5%A4%A7%E6%8A%95%E8%B5%84%E3%80%81%E9%87%8D%E5%A4%A7%E9%99%84%E5%B1%9E%E5%85%AC%E5%8F%B8%E3%80%81%E8%81%94%E8%90%A5%E5%85%AC%E5%8F%B8%E5%8F%8A%E5%90%88%E8%90%A5%E4%BC%81%E4%B8%9A%E6%94%B6%E8%B4%AD%E5%8F%8A%E5%87%BA%E5%94%AE%E4%BA%8B%E9%A1%B9) The Group is undertaking two significant acquisitions: the due diligence for the 100% equity acquisition of Shanghai Maichun Brand Management Co., Ltd (Target Company A) has been repeatedly extended to June 30, 2026, due to Target Company A's failure to meet expected business performance, while the acquisition of the remaining equity in Cai Ping Fang Technology Co., Ltd (Target Company B) for RMB 18,300,000 was completed in July 2025, aiming to enhance existing client service capabilities and improve resource utilization efficiency - The company will acquire **100%** equity in Shanghai Maichun Brand Management Co., Ltd (Target Company A), with due diligence extended to June 30, 2026, as Target Company A failed to achieve expected business performance in the last fiscal year[73](index=73&type=chunk)[75](index=75&type=chunk) - A wholly-owned subsidiary of the company entered into a share transfer agreement with three sellers to acquire all shares of Cai Ping Fang Technology Co., Ltd (Target Company B) for **RMB 18,300,000**, with the transaction completed in July 2025[77](index=77&type=chunk)[79](index=79&type=chunk) - The Directors believe that the acquisition of Target Company B is an attractive investment opportunity consistent with the Group's business development strategy, which will enhance its ability to serve existing clients and improve resource utilization efficiency[77](index=77&type=chunk) [Capital Commitments](index=22&type=section&id=%E8%B5%84%E6%9C%AC%E6%89%BF%E6%8B%85) As of June 30, 2025, the Group had capital commitments of RMB 18,300,000, primarily for the acquisition of equity in Cai Ping Fang Technology Co., Ltd, with 50% of the consideration, RMB 9,150,000, paid in July 2025, and the remaining portion due by December 31, 2025 - As of June 30, 2025, the Group had capital commitments of **RMB 18,300,000**, primarily for the acquisition of equity in Cai Ping Fang Technology Co., Ltd[80](index=80&type=chunk) - The Group was required to pay **50%** of the consideration for the acquisition of Cai Ping Fang Technology Co., Ltd's equity, **RMB 9,150,000**, by July 31, 2025, and the remaining **50%**, **RMB 9,150,000**, by December 31, 2025[80](index=80&type=chunk) - The Group paid **50%** of the consideration, **RMB 9,150,000**, in July 2025[80](index=80&type=chunk) [Controlling Shareholders' Pledged Shares](index=23&type=section&id=%E6%8E%A7%E8%82%A1%E8%82%A1%E4%B8%9C%E8%B4%A8%E6%8A%BC%E8%82%A1%E4%BB%BD) As of June 26, 2025, the company's three controlling shareholders (Weichen Investment, Tianhuan Investment, and Yunshan Investment) have pledged approximately 2.44%, 1.02%, and 0.49% of the company's total issued shares, respectively, as collateral for a RMB 18,500,000 bank borrowing by Hangzhou Rego Network Co., Ltd, a wholly-owned subsidiary, with ownership, voting rights, and dividend rights not transferred during the pledge period, but their exercise must not harm the pledgee's interests - The company's controlling shareholders, Weichen Investment Co., Ltd, Tianhuan Investment Co., Ltd, and Yunshan Investment Co., Ltd, have pledged shares of the company, representing approximately **2.44%**, **1.02%**, and **0.49%** of the total issued shares, respectively[82](index=82&type=chunk) - The shares pledged by the three controlling shareholders serve as collateral for a **RMB 18,500,000** bank borrowing by Hangzhou Rego Network Co., Ltd, a wholly-owned subsidiary of the company[83](index=83&type=chunk) - During the pledge period, the pledged shares do not involve the transfer of ownership, voting rights, or dividend rights, but the exercise of such rights shall not prejudice the interests of the pledgee[83](index=83&type=chunk) [Major Customers](index=24&type=section&id=%E4%B8%BB%E8%A6%81%E5%AE%A2%E6%88%B7) For the six months ended June 30, 2025, the Group's top five customers accounted for 60.1% of revenue, with the largest customer contributing 23.3%, indicating an increase in concentration for both the top five and the largest customer compared to the prior year - For the period ended June 30, 2025, the Group's top five customers accounted for **60.1%** of revenue (prior year: **57.3%**)[85](index=85&type=chunk) - For the period ended June 30, 2025, the Group's largest customer accounted for **23.3%** of revenue (prior year: **30.2%**)[85](index=85&type=chunk) [Major Suppliers](index=24&type=section&id=%E4%B8%BB%E8%A6%81%E4%BE%9B%E5%BA%94%E5%95%86) For the six months ended June 30, 2025, the Group's top five suppliers accounted for 66.0% of total cost of sales, with the largest supplier contributing 31.0%, showing a decrease in concentration for both the top five and the largest supplier compared to the prior year - For the period ended June 30, 2025, the Group's top five suppliers accounted for **66.0%** of total cost of sales (prior year: **80.3%**)[86](index=86&type=chunk) - For the period ended June 30, 2025, the Group's largest supplier accounted for **31.0%** of total cost of sales (prior year: **36.6%**)[86](index=86&type=chunk) [Key Financial Ratios](index=24&type=section&id=%E4%B8%BB%E8%A6%81%E8%B4%A2%E5%8A%A1%E6%AF%94%E7%8E%87) As of June 30, 2025, the Group's profitability ratios (gross margin, net profit margin, return on equity, and return on total assets) all decreased, with gross margin falling from 26.9% to 15.9%; both the current ratio and quick ratio decreased from 2.7 times to 2.0 times, while the gearing ratio increased from 28.0% to 34.0%, and the debt-to-equity ratio was 3.2% Key Financial Ratios | Financial Ratio | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Gross Margin | 15.9% | 26.9% | | Net Profit Margin | -15.3% | -16.1% | | Adjusted Net Profit Margin | -14.9% | -12.5% | | Return on Equity | -6.2% | -11.0% | | Return on Total Assets | -3.5% | -7.4% | | Current Ratio | 2.0 times | 2.7 times | | Quick Ratio | 2.0 times | 2.7 times | | Gearing Ratio | 34.0% | 28.0% | | Debt to Equity Ratio | 3.2% | Not Applicable | [Treasury Policy](index=25&type=section&id=%E5%BA%93%E5%8A%A1%E6%94%BF%E7%AD%96) The Group adopts a prudent financial management approach to maintain a robust liquidity position, continuously assessing client creditworthiness to mitigate credit risk and closely monitoring liquidity to ensure sufficient financial resources for its funding needs and commitments - The Group adopts a prudent financial management approach in formulating its treasury policy, thereby maintaining a robust liquidity position throughout the review period[89](index=89&type=chunk) - The Group continuously conducts credit assessments and financial condition assessments of its clients to mitigate credit risk[89](index=89&type=chunk) - The Board closely monitors the Group's liquidity position to ensure sufficient available financial resources to meet its funding needs and commitments from time to time[89](index=89&type=chunk) [Foreign Exchange Risk](index=25&type=section&id=%E5%A4%96%E6%B1%87%E9%A3%8E%E9%99%A9) The Group's operations are primarily in China, with most transactions denominated and settled in RMB, thus foreign exchange risk is not significant; for the six months ended June 30, 2025, the Group did not use any financial instruments to hedge foreign exchange risk and will continue to monitor and take measures to ensure foreign exchange risk remains controllable - The Group's business primarily operates in China, with most transactions denominated and settled in RMB, thus foreign exchange risk is not significant[90](index=90&type=chunk) - For the six months ended June 30, 2025, the Group did not use any financial instruments to hedge its foreign exchange risk exposure, nor did it commit to using any financial instruments for such purpose[92](index=92&type=chunk) - The company's directors and senior management will continue to closely monitor foreign exchange risk and take measures as necessary to ensure foreign exchange risk remains within controllable limits[92](index=92&type=chunk) [Capital Structure](index=26&type=section&id=%E8%B5%84%E6%9C%AC%E6%9E%B6%E6%9E%84) The company's shares were listed on the Main Board of the Stock Exchange on October 17, 2022; in December 2023, the company conducted a rights issue, raising approximately HKD 100 million in gross proceeds, with 40,263,600 unsubscribed rights shares sold to independent placees through a placing arrangement - The company's shares were listed on the Main Board of the Stock Exchange on the listing date[93](index=93&type=chunk) - In December 2023, the rights issue raised total gross proceeds of approximately **HKD 100 million** (before deducting expenses)[94](index=94&type=chunk) - **40,263,600** rights shares under the rights issue were undersubscribed, representing approximately **8.05%** of the total rights shares available for subscription, and were sold to independent placees through a placing arrangement[93](index=93&type=chunk)[94](index=94&type=chunk) [Condensed Interim Consolidated Financial Statements](index=27&type=section&id=%E4%B8%AD%E6%9C%9F%E7%AE%80%E6%98%8E%E7%BB%BC%E5%90%88%E8%B4%A2%E5%8A%A1%E6%8A%A5%E8%A1%A8) This section presents the Group's condensed interim consolidated financial statements, including the statement of profit or loss and other comprehensive income, and the statement of financial position [Condensed Interim Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=27&type=section&id=%E4%B8%AD%E6%9C%9F%E7%AE%80%E6%98%8E%E7%BB%BC%E5%90%88%E6%8D%9F%E7%9B%8A%E5%8F%8A%E5%85%B6%E4%BB%96%E5%85%A8%E9%9D%A2%E6%94%B6%E5%85%A5%E8%A1%A8) For the six months ended June 30, 2025, the Group's revenue was RMB 135,766 thousand, a 16.8% year-on-year increase; however, due to a significant increase in cost of sales, gross profit decreased by 48.0% year-on-year to RMB 21,543 thousand, resulting in a loss for the period of RMB 19,644 thousand attributable to owners of the company, with a basic loss per share of RMB 0.03 Condensed Interim Consolidated Statement of Profit or Loss and Other Comprehensive Income | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Revenue | 135,766 | 116,204 | | Cost of Sales | (114,223) | (74,737) | | Gross Profit | 21,543 | 41,467 | | (Loss) / Profit Before Income Tax | (20,786) | 3,184 | | (Loss) / Profit for the Period | (20,810) | 2,731 | | (Loss) / Profit for the Period Attributable to Owners of the Company | (19,644) | 3,457 | | Basic and Diluted (Loss) / Earnings Per Share (RMB) | (0.03) | 0.01 | [Condensed Interim Consolidated Statement of Financial Position](index=29&type=section&id=%E4%B8%AD%E6%9C%9F%E7%AE%80%E6%98%8E%E7%BB%BC%E5%90%88%E8%B4%A2%E5%8A%A1%E7%8A%B6%E5%86%B5%E8%A1%A8) As of June 30, 2025, the Group's total assets increased to RMB 599,589 thousand compared to December 31, 2024, but net current assets decreased from RMB 287,262 thousand to RMB 267,103 thousand, while total liabilities significantly increased to RMB 263,160 thousand, leading to a decrease in net assets and equity attributable to owners of the company, with trade receivables and prepayments notably increasing and cash and cash equivalents decreasing Condensed Interim Consolidated Statement of Financial Position | Indicator | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | **Assets** | | | | Non-current Assets | 74,963 | 78,709 | | Current Assets | 524,626 | 453,240 | | **Total Assets** | **599,589** | **531,949** | | **Liabilities** | | | | Current Liabilities | 257,523 | 165,978 | | Non-current Liabilities | 5,637 | 7,187 | | **Total Liabilities** | **263,160** | **173,165** | | **Equity** | | | | Equity Attributable to Owners of the Company | 338,435 | 359,624 | | Non-controlling Interests | (2,006) | (840) | | **Total Equity** | **336,429** | **358,784** | | Net Current Assets | 267,103 | 287,262 | - Trade receivables increased from **RMB 153,396 thousand** as of December 31, 2024, to **RMB 205,246 thousand** as of June 30, 2025[97](index=97&type=chunk) - Cash and cash equivalents decreased from **RMB 138,994 thousand** as of December 31, 2024, to **RMB 103,673 thousand** as of June 30, 2025[97](index=97&type=chunk) [Notes to the Condensed Interim Consolidated Financial Statements](index=31&type=section&id=%E4%B8%AD%E6%9C%9F%E7%AE%80%E6%98%8E%E7%BB%BC%E5%90%88%E8%B4%A2%E5%8A%A1%E6%8A%A5%E8%A1%A8%E9%99%84%E6%B3%A8) This section provides detailed notes and explanations supporting the condensed interim consolidated financial statements [General Information](index=31&type=section&id=%E4%B8%80%E8%88%AC%E8%B5%84%E6%96%99) Rego Interactive Co., Ltd, incorporated in the Cayman Islands on August 8, 2017, is an investment holding company whose subsidiaries primarily engage in enterprise digitalization services and industry digitalization services in China, with its shares listed on the Main Board of the Hong Kong Stock Exchange, and its controlling shareholders being Mr. Tian Huan, Mr. Chen Ping, and Mr. Zhang Yongli, along with their controlled entities Tianhuan Investment, Weichen Investment, and Yunshan Investment - Rego Interactive Co., Ltd was incorporated as an exempted company in the Cayman Islands on August 8, 2017, under the Companies Law of Cayman, and its shares are listed on the Main Board of the Hong Kong Stock Exchange[99](index=99&type=chunk) - The company is an investment holding company, and the Group is engaged in enterprise digitalization services and industry digitalization services in China[99](index=99&type=chunk)[103](index=103&type=chunk) - The ultimate shareholders of the company are Mr. Tian Huan, Mr. Chen Ping, and Mr. Zhang Yongli, who, together with their controlled entities Tianhuan Investment, Weichen Investment, and Yunshan Investment, are collectively referred to as the "Controlling Shareholders"[100](index=100&type=chunk) [Basis of Preparation of Condensed Interim Consolidated Financial Statements and Adoption of HKFRSs](index=31&type=section&id=%E4%B8%AD%E6%9C%9F%E7%AE%80%E6%98%8E%E7%BB%BC%E5%90%88%E8%B4%A2%E5%8A%A1%E6%8A%A5%E8%A1%A8%E7%BC%96%E5%88%B6%E5%9F%BA%E5%87%86%E5%8F%8A%E9%87%87%E7%BA%B3%E9%A6%99%E6%B8%AF%E8%B4%A2%E5%8A%A1%E6%8A%A5%E5%91%8A%E5%87%86%E5%88%99) The condensed interim consolidated financial statements for the six months ended June 30, 2025, are prepared in accordance with Hong Kong Accounting Standard 34 Interim Financial Reporting issued by the HKICPA and the applicable disclosure requirements of the Listing Rules of the Hong Kong Stock Exchange, with accounting policies consistent with the 2024 annual consolidated financial statements, except for the adoption of new standards effective January 1, 2025 (e.g., amendments to HKAS 21), which did not have a significant impact on the Group's condensed interim consolidated financial statements - The condensed interim consolidated financial statements are prepared in accordance with Hong Kong Accounting Standard 34 Interim Financial Reporting issued by the Hong Kong Institute of Certified Public Accountants and the applicable disclosure requirements of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited[102](index=102&type=chunk) - The accounting policies adopted in the preparation of the condensed interim consolidated financial statements are consistent with those applied in the preparation of the Group's annual consolidated financial statements for the year ended December 31, 2024, except for the adoption of new standards effective January 1, 2025[104](index=104&type=chunk) - Certain amendments first applied in 2025 (e.g., amendments to HKAS 21) did not have any significant impact on the Group's condensed interim consolidated financial statements[104](index=104&type=chunk)[105](index=105&type=chunk) [Critical Accounting Judgements and Key Sources of Estimation Uncertainty](index=32&type=section&id=%E9%87%8D%E8%A6%81%E4%BC%9A%E8%AE%A1%E5%88%A4%E6%96%AD%E5%8F%8A%E4%BC%B0%E8%AE%A1%E4%B8%8D%E7%A1%AE%E5%AE%9A%E5%9B%A0%E7%B4%A0%E4%B9%8B%E4%B8%BB%E8%A6%81%E6%9D%A5%E6%BA%90) The preparation of condensed interim consolidated financial statements requires management to make judgments, estimates, and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income, and expenses, with actual results potentially differing from these estimates, and other significant judgments and key sources of estimation uncertainty in applying accounting policies are consistent with those used in the 2024 annual financial statements - The preparation of condensed interim consolidated financial statements requires management to make judgments, estimates, and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income, and expenses[107](index=107&type=chunk) - In preparing these condensed interim consolidated financial statements, other significant judgments made by management in applying the Group's accounting policies and key sources of estimation uncertainty are the same as those applied in the annual financial statements for the year ended December 31, 2024[107](index=107&type=chunk) [Segment Information](index=32&type=section&id=%E6%9D%BF%E5%9D%97%E8%B5%84%E6%96%99) The Group's operating and reportable segments are enterprise digitalization services and industry digitalization services, with the chief operating decision maker assessing segment performance based on segment profit, which is equivalent to the Group's gross profit, and all major external customers and significant non-current assets are located in mainland China - The Group's operating and reportable segments are enterprise digitalization services and industry digitalization services[110](index=110&type=chunk) - The chief operating decision maker assesses the performance of operating segments based on segment profit, which is the same as the Group's gross profit, and a reconciliation of segment profit to profit before income tax is presented in the consolidated statement of profit or loss and other comprehensive income[111](index=111&type=chunk) - All of the Group's major external customers and significant non-current assets are located in mainland China[113](index=113&type=chunk)[114](index=114&type=chunk) Segment Performance | Segment | 2025 Revenue (RMB thousand) | 2025 Cost of Sales (RMB thousand) | 2025 Segment Profit (RMB thousand) | | :--- | :--- | :--- | :--- | | Enterprise Digitalization Services | 125,036 | (108,334) | 16,702 | | Industry Digitalization Services | 10,730 | (5,889) | 4,841 | | **Consolidated Total** | **135,766** | **(114,223)** | **21,543** | | Segment | 2024 Revenue (RMB thousand) | 2024 Cost of Sales (RMB thousand) | 2024 Segment Profit (RMB thousand) | | :--- | :--- | :--- | :--- | | Enterprise Digitalization Services | 108,014 | (70,712) | 37,302 | | Industry Digitalization Services | 8,190 | (4,025) | 4,165 | | **Consolidated Total** | **116,204** | **(74,737)** | **41,467** | [Revenue](index=34&type=section&id=%E6%94%B6%E7%9B%8A) For the six months ended June 30, 2025, the Group's total revenue from contracts with customers was RMB 135,766 thousand, with RMB 127,399 thousand recognized at a point in time (primarily from enterprise digitalization services) and RMB 8,367 thousand recognized over time (primarily from industry digitalization services) Revenue Recognition Timing | Revenue Recognition Timing | 2025 Enterprise Digitalization Services (RMB thousand) | 2025 Industry Digitalization Services (RMB thousand) | 2025 Total (RMB thousand) | | :--- | :--- | :--- | :--- | | At a point in time | 125,036 | 2,363 | 127,399 | | Over time | – | 8,367 | 8,367 | | **Total Revenue from Contracts with Customers** | **125,036** | **10,730** | **135,766** | | Revenue Recognition Timing | 2024 Enterprise Digitalization Services (RMB thousand) | 2024 Industry Digitalization Services (RMB thousand) | 2024 Total (RMB thousand) | | :--- | :--- | :--- | :--- | | At a point in time | 108,014 | 323 | 108,337 | | Over time | – | 7,867 | 7,867 | | **Total Revenue from Contracts with Customers** | **108,014** | **8,190** | **116,204** | [Other Income and Net Other Gains or Losses](index=34&type=section&id=%E5%85%B6%E4%BB%96%E6%94%B6%E5%85%A5%E5%8F%8A%E5%85%B6%E4%BB%96%E6%94%B6%E7%9B%8A%E6%88%96%E4%BA%8F%E6%8D%9F%E5%87%80%E9%A2%9D) For the six months ended June 30, 2025, other income and net other gains or losses amounted to RMB 1,830 thousand, consistent with RMB 1,828 thousand in the prior year, with other income primarily comprising government grants (RMB 445 thousand) and miscellaneous income (RMB 1,875 thousand), while net other gains/losses were mainly affected by a net fair value loss of financial assets at fair value through profit or loss (RMB 502 thousand) Other Income and Net Other Gains or Losses | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | **Other Income** | | | | Bank interest income | 38 | 259 | | Government grants | 445 | 1,723 | | Miscellaneous income | 1,875 | 420 | | **Subtotal** | **2,358** | **2,402** | | **Net Other Gains / (Losses)** | | | | Exchange (loss) / gain | (26) | 4 | | Net fair value loss of financial assets at fair value through profit or loss | (502) | (578) | | **Subtotal** | **(528)** | **(574)** | | **Total** | **1,830** | **1,828** | - For the six months ended June 30, 2025, and 2024, the Group enjoyed tax benefits on input VAT and received government grants from local Chinese government authorities as reimbursement for R&D activities[116](index=116&type=chunk) [Income Tax Expense](index=35&type=section&id=%E6%89%80%E5%BE%97%E7%A8%8E%E5%BC%80%E6%94%AF) For the six months ended June 30, 2025, income tax expense was RMB 24 thousand, a significant decrease from the prior year, primarily due to reduced taxable profit and most subsidiaries being in a loss position, with Chinese subsidiaries subject to a 25% corporate income tax rate, certain high-tech enterprises (e.g., Hangzhou Rego and Xi'an Tiantai) enjoying a preferential 15% rate, and companies engaged in R&D activities eligible for a 175% super deduction for R&D expenses Income Tax Expense | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Current income tax – China | | | | – Tax for the period | 72 | 3,081 | | – Over-provision in prior years | (6) | (523) | | **Subtotal** | **66** | **2,558** | | Deferred tax | (42) | (2,105) | | **Income Tax Expense** | **24** | **453** | - The tax rate for the Group's subsidiaries operating in China is **25%** of taxable profit[119](index=119&type=chunk) - Certain subsidiaries (e.g., Hangzhou Rego and Xi'an Tiantai) are certified as "High and New Technology Enterprises" and are eligible for a preferential corporate income tax rate of **15%** from January 1, 2016, to December 31, 2025[120](index=120&type=chunk) - Enterprises engaged in R&D activities are entitled to deduct **175%** of the R&D expenses incurred for such activities as deductible expenses ("super deduction") when determining their taxable profit[121](index=121&type=chunk) [Dividends](index=35&type=section&id=%E8%82%A1%E6%81%AF) No dividends were paid or proposed for the company's ordinary shares for the six months ended June 30, 2025, and 2024 - No dividends were paid or proposed for the company's ordinary shares for the six months ended June 30, 2025, and 2024[122](index=122&type=chunk) [(Loss) / Earnings Per Share](index=36&type=section&id=%E6%AF%8F%E8%82%A1%EF%BC%88%E4%BA%8F%E6%8D%9F%EF%BC%89%E2%88%95%E7%9B%88%E5%88%A9) For the six months ended June 30, 2025, the loss attributable to owners of the company was RMB 19,644 thousand, resulting in a basic and diluted loss per share of RMB 0.03, compared to a profit of RMB 3,457 thousand and basic and diluted earnings per share of RMB 0.01 in the prior year, with no potential dilutive shares exercised during the reporting period, making basic and diluted (loss) / earnings per share identical (Loss) / Earnings Per Share | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | (Loss) / Profit Attributable to Owners of the Company | (19,644) | 3,457 | | Weighted average number of ordinary shares for basic (loss) / earnings per share (thousand shares) | 732,396 | 732,396 | | Basic and Diluted (Loss) / Earnings Per Share (RMB) | (0.03) | 0.01 | - There were no diluted (loss) / earnings per share as no potential dilutive shares were exercised for the six months ended June 30, 2025, and 2024; therefore, diluted (loss) / earnings per share are the same as basic (loss) / earnings per share[124](index=124&type=chunk) [Trade Receivables](index=36&type=section&id=%E8%B4%B8%E6%98%93%E5%BA%94%E6%94%B6%E6%AC%BE%E9%A1%B9) As of June 30, 2025, net trade receivables significantly increased to RMB 205,246 thousand from RMB 153,396 thousand as of December 31, 2024, with amounts due from third parties totaling RMB 239,271 thousand, and credit loss provisions increasing to RMB 34,025 thousand; customer credit terms range from 5 to 60 days, and the aging analysis shows the highest proportion of receivables within one month Trade Receivables | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Trade receivables – due from third parties | 239,271 | 179,161 | | Trade receivables – due from related companies | – | 90 | | **Subtotal** | **239,271** | **179,251** | | Less: Provision for credit losses | (34,025) | (25,855) | | **Net Trade Receivables** | **205,246** | **153,396** | Aging Analysis of Trade Receivables | Aging | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Within one month | 146,099 | 121,748 | | Over one month but less than three months | 41,299 | 14,095 | | Over three months but less than six months | 1,734 | 2,975 | | Over six months but less than one year | 2,594 | 5,180 | | Over one year | 13,520 | 9,398 | | **Total** | **205,246** | **153,396** | - At the end of the reporting period, credit terms granted to customers ranged from **5 to 60 days**[125](index=125&type=chunk) [Trade Payables](index=37&type=section&id=%E8%B4%B8%E6%98%93%E5%BA%94%E4%BB%98%E6%AC%BE%E9%A1%B9) As of June 30, 2025, trade payables significantly increased to RMB 87,119 thousand from RMB 27,896 thousand as of December 31, 2024, with credit terms for purchases from suppliers generally ranging from 10 to 60 days, and the aging analysis showing the highest proportion of payables within one month Trade Payables | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Trade payables | 87,119 | 27,896 | Aging Analysis of Trade Payables | Aging | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Within one month | 52,878 | 22,211 | | Over one month but less than three months | 18,255 | 1,776 | | Over three months but less than six months | 11,030 | 2,567 | | Over six months but less than one year | 3,616 | 1,022 | | Over one year | 1,340 | 320 | | **Total** | **87,119** | **27,896** | - At the end of the period, credit terms for purchases from suppliers generally ranged from **10 to 60 days**[126](index=126&type=chunk) [Events After the Reporting Period](index=37&type=section&id=%E6%8A%A5%E5%91%8A%E6%9C%9F%E5%90%8E%E4%BA%8B%E9%A1%B9) As of June 30, 2025, the Group entered into a share transfer agreement with three independent third parties to acquire the remaining equity in Cai Ping Fang for RMB 18,300,000, with the transaction completed in July 2025 - As of June 30, 2025, the Group entered into a share transfer agreement with three independent third parties to acquire the remaining equity in Cai Ping Fang for **RMB 18,300,000**[128](index=128&type=chunk) - The transaction was completed in July 2025[128](index=128&type=chunk) [Future and Outlook](index=38&type=section&id=%E6%9C%AA%E6%9D%A5%E5%8F%8A%E5%B1%95%E6%9C%9B) This section outlines the Group's strategic direction, future plans, and market outlook [Overall Strategy and Risk Management](index=38&type=section&id=%E6%95%B4%E4%BD%93%E6%88%98%E7%95%A5%E4%B8%8E%E9%A3%8E%E9%99%A9%E7%AE%A1%E7%90%86) Facing a sluggish global economy in 2025, the Group will closely monitor economic trends and market competition, focusing on boosting core businesses and developing the AI digital lottery store model, streamlining capital allocation, and enhancing operational efficiency, while strengthening risk awareness, adhering to prudent risk management strategies, actively expanding its strategic vision, seizing new business opportunities, and achieving cross-industry empowerment services to promote sustained and stable corporate development - In 2025, the global economic situation remains challenging, with persistent economic slowdown[129](index=129&type=chunk) - The Group's strategy is to closely monitor economic development trends and changes in market competition, focusing on boosting core businesses and developing the AI digital lottery store model, streamlining capital allocation, and enhancing operational efficiency[129](index=129&type=chunk) - The Group plans to strengthen awareness of potential risks, adhere to prudent risk management strategies, actively expand its strategic vision, keenly observe and seize new business opportunities, aiming to achieve cross-industry empowerment services in the future[129](index=129&type=chunk) [Outlook for Enterprise Digitalization Services](index=38&type=section&id=%E4%BC%81%E4%B8%9A%E6%95%B0%E5%AD%97%E5%8C%96%E6%9C%8D%E5%8A%A1%E5%B1%95%E6%9C%9B) The Group will strive to identify stable and reliable new clients and suppliers, adopt an omnichannel marketing strategy, actively explore new growth areas, and deepen its enterprise welfare business; in the second half of the year, it will focus on lottery marketing vouchers, seizing opportunities from growing lottery sales to expand its market share in welfare and sports lotteries - The Group will strive to identify stable and reliable new clients and suppliers, use an omnichannel marketing strategy to precisely reach various client groups, and actively explore new growth points[130](index=130&type=

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不負責，對其準確性 或完整性亦不發表任何聲明，並明確表示，概不對因本公告全部或任何部分內容而產生或因倚 賴該等內容而引致之任何損失承擔任何責任。 中國銀行股份有限公司 BANK OF CHINA LIMITED （於中華人民共和國註冊成立的股份有限公司） （「本行」） （股份代號：3988） 2025 年中期業績公告 本行董事會欣然宣布本行及其附屬公司截至2025年6月30日止之未經審計業 績。本公告列載本行2025年中期報告全文，並符合香港上市規則中有關中期 業績初步公告附載的資料之要求。本行2025年中期報告的印刷版本將於2025 年9月寄發予本行H股股東，並可於其時在香港交易及結算所有限公司的網站 www.hkexnews.hk及本行的網站www.boc.cn閱覽。 目錄 | 釋義 | 3 | | --- | --- | | 重要提示 | 6 | | 公司基本情況 | 7 | | 財務摘要 | 9 | | 經營情況概覽 | 11 | | 管理層討論與分析 | 13 | | 財務回顧 | 13 | | 經濟與金融環境 | 13 | | 利潤表 ...