[Financial Highlights](index=1&type=section&id=Financial%20Highlights) [Interim Results Overview](index=1&type=section&id=Interim%20Results%20Overview) For the six months ended June 30, 2025, the company's revenue increased by 3.7% to RMB 676.7 million, but gross profit decreased by 3.4% to RMB 497.8 million, with net profit significantly impacted by non-recurring items - The Board does not recommend paying any interim dividend for the six months ended June 30, 2025 (2024: nil)[3](index=3&type=chunk) - Changes in non-recurring items, including a decrease in other gains from financial assets at fair value through profit or loss from approximately **RMB 32.9 million** in 2024 to **RMB 9.9 million** in 2025, and a significant increase in share-based payment expenses from approximately **RMB 61.3 million** to **RMB 193.5 million**, were the primary reasons for the substantial decrease in net profit[4](index=4&type=chunk) Key Financial Indicators for the Six Months Ended June 30 | Indicator | 2025 (RMB million) | 2024 (RMB million) | Year-on-year Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 676.7 | 652.8 | +3.7% | | Gross Profit | 497.8 | 515.4 | -3.4% | | Profit attributable to owners of the company (excluding non-recurring items) | 238.5 | 233.6 | +2.1% | | Profit attributable to owners of the company (including non-recurring items) | 55.1 | 205.6 | -73.2% | [Condensed Consolidated Financial Statements](index=2&type=section&id=Condensed%20Consolidated%20Financial%20Statements) [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=2&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For the six months ended June 30, 2025, group revenue increased to RMB 676.7 million, but gross profit declined due to higher cost of sales, with operating and period profit significantly reduced by increased expenses and share-based payments - Other comprehensive income (expense) shifted from a loss of **RMB 93,205 thousand** in 2024 to a gain of **RMB 25,697 thousand** in 2025, primarily due to fair value gains on equity instruments at fair value through other comprehensive income and exchange differences[6](index=6&type=chunk) Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (For the six months ended June 30) | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 676,707 | 652,831 | +3.7% | | Cost of Sales | (178,952) | (137,447) | +30.2% | | Gross Profit | 497,755 | 515,384 | -3.4% | | Operating Profit | 64,387 | 202,006 | -68.1% | | Profit Before Tax | 79,800 | 208,645 | -61.8% | | Profit for the Period | 41,765 | 185,808 | -77.5% | | Profit attributable to owners of the company for the period | 55,074 | 205,557 | -73.2% | | Basic Earnings Per Share | RMB 1.3 cents | RMB 4.6 cents | -71.7% | [Condensed Consolidated Statement of Financial Position](index=3&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the group's total assets less current liabilities increased to RMB 4,340.4 million, and net assets rose to RMB 3,737.0 million, driven by significant increases in non-current and current financial assets and trade receivables, alongside higher current liabilities - Among non-current assets, interests in associates significantly increased from **RMB 72,692 thousand** to **RMB 210,118 thousand**, and financial assets at fair value through profit or loss rose from **RMB 252,149 thousand** to **RMB 262,018 thousand**[7](index=7&type=chunk) - Within current liabilities, trade and other payables increased from **RMB 758,212 thousand** to **RMB 841,265 thousand**, and contract liabilities significantly rose from **RMB 21,435 thousand** to **RMB 95,515 thousand**[7](index=7&type=chunk) Condensed Consolidated Statement of Financial Position (As of June 30) | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Total Non-current Assets | 2,760,395 | 2,566,205 | +7.6% | | Total Current Assets | 2,573,290 | 2,334,173 | +10.2% | | Total Current Liabilities | 993,262 | 815,638 | +21.8% | | Net Current Assets | 1,580,028 | 1,518,535 | +4.1% | | Total Assets Less Current Liabilities | 4,340,423 | 4,084,740 | +6.3% | | Net Assets | 3,736,950 | 3,475,429 | +7.5% | | Equity attributable to owners of the company | 3,770,199 | 3,494,507 | +7.9% | [Notes to the Condensed Consolidated Financial Statements](index=5&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed notes on the preparation basis, significant accounting policies, segment information, and specific financial line items within the condensed consolidated financial statements [1. General Information](index=5&type=section&id=1.%20General%20Information) LifeTech Scientific Corporation, incorporated in the Cayman Islands and listed on the HKEX, primarily develops, manufactures, and trades advanced interventional medical devices for cardiovascular and peripheral vascular diseases, with financial statements presented in RMB - The Group's principal activities involve the development, manufacture, and trading of advanced interventional medical devices for cardiovascular and peripheral vascular diseases and disorders[9](index=9&type=chunk) - The condensed consolidated financial statements are presented in RMB, the functional currency of the Company and its principal operating subsidiaries[10](index=10&type=chunk) [2. Basis of Preparation](index=5&type=section&id=2.%20Basis%20of%20Preparation) The Group's unaudited condensed consolidated financial statements are prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting" and applicable disclosure requirements of the HKEX Listing Rules - The condensed consolidated financial statements are prepared in accordance with International Accounting Standard 34 'Interim Financial Reporting' issued by the IASB and the applicable disclosure requirements of Appendix D2 to the Listing Rules[11](index=11&type=chunk) [3. Significant Accounting Policies](index=5&type=section&id=3.%20Significant%20Accounting%20Policies) The condensed consolidated financial statements are primarily prepared under the historical cost convention, consistent with the annual financial statements for the year ended December 31, 2024, with no significant impact from new IFRS interpretations or amendments applied this period - The condensed consolidated financial statements are prepared on the historical cost basis, except for certain financial instruments measured at fair value[12](index=12&type=chunk) - The application of new interpretations and amendments to IFRS during the interim period had no significant impact on the amounts presented and/or disclosures in the condensed consolidated financial statements[12](index=12&type=chunk) [4. Segment Information](index=6&type=section&id=4.%20Segment%20Information) The Group reports data across three business segments: structural heart disease, peripheral vascular disease, and pacing and electrophysiology, with peripheral vascular disease being the largest contributor to revenue and segment profit, and pacing and electrophysiology showing significant revenue growth - The Group's operating segments include structural heart disease business, peripheral vascular disease business, and pacing and electrophysiology business, all involving the trading, manufacturing, and research and development of related devices[14](index=14&type=chunk)[16](index=16&type=chunk) [(A) Segment Revenue and Results](index=6&type=section&id=%28A%29%20Segment%20Revenue%20and%20Results) For the six months ended June 30, 2025, peripheral vascular disease business contributed the largest revenue of RMB 391.7 million, structural heart disease revenue remained stable at RMB 271.5 million, and pacing and electrophysiology revenue significantly grew to RMB 13.5 million, with total segment profit at RMB 497.8 million - Revenue from the pacing and electrophysiology business significantly increased from **RMB 856 thousand** in 2024 to **RMB 13,475 thousand** in 2025, achieving a turnaround to profitability[15](index=15&type=chunk)[17](index=17&type=chunk) Revenue and Results by Operating and Reportable Segment (For the six months ended June 30) | Segment | 2025 (RMB thousand) | 2024 (RMB thousand) | 2025 Segment Profit (RMB thousand) | 2024 Segment Profit (RMB thousand) | | :--- | :--- | :--- | :--- | :--- | | Structural Heart Disease Business | 271,539 | 271,250 | 237,686 | 243,166 | | Peripheral Vascular Disease Business | 391,693 | 380,725 | 258,214 | 285,320 | | Pacing and Electrophysiology Business | 13,475 | 856 | 1,855 | (13,102) | | **Total** | **676,707** | **652,831** | **497,755** | **515,384** | [(B) Segment Assets and Liabilities](index=8&type=section&id=%28B%29%20Segment%20Assets%20and%20Liabilities) As of June 30, 2025, the Group's total segment assets were RMB 1,929.9 million, with peripheral vascular disease business holding the largest asset base, and total segment liabilities were RMB 449.5 million, also higher for peripheral vascular disease, while unallocated assets and liabilities include interests in associates, financial assets, and cash - Total consolidated assets amounted to **RMB 5,333,685 thousand**, and total consolidated liabilities were **RMB 1,596,735 thousand**[18](index=18&type=chunk)[19](index=19&type=chunk) Assets and Liabilities by Operating and Reportable Segment (As of June 30) | Segment | 2025 Assets (RMB thousand) | 2024 Assets (RMB thousand) | 2025 Liabilities (RMB thousand) | 2024 Liabilities (RMB thousand) | | :--- | :--- | :--- | :--- | :--- | | Structural Heart Disease Business | 768,334 | 688,026 | 172,333 | 127,440 | | Peripheral Vascular Disease Business | 1,108,398 | 979,544 | 248,607 | 181,439 | | Pacing and Electrophysiology Business | 53,239 | 70,595 | 28,525 | 22,733 | | **Total Segment** | **1,929,971** | **1,738,165** | **449,465** | **331,612** | [5. Other Income, Expenses, Gains and Losses](index=10&type=section&id=5.%20Other%20Income%2C%20Expenses%2C%20Gains%20and%20Losses) For the six months ended June 30, 2025, total other income, expenses, gains, and losses slightly increased to RMB 50.4 million, with stable government grants and investment property rental income, but a shift in fair value changes for mixed funds from loss to gain, and for equity funds from gain to loss, alongside a significant increase in net exchange gains - Fair value change of mixed funds shifted from a loss of **RMB 18,243 thousand** in 2024 to a gain of **RMB 13,996 thousand** in 2025[20](index=20&type=chunk) - Fair value change of equity funds shifted from a gain of **RMB 50,163 thousand** in 2024 to a loss of **RMB 3,260 thousand** in 2025[20](index=20&type=chunk) Other Income, Expenses, Gains and Losses (For the six months ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Government Grants | 7,989 | 7,941 | | Rental Income from Investment Properties | 17,712 | 17,097 | | Fair Value Change of Mixed Funds (Gain) Loss | 13,996 | (18,243) | | Fair Value Change of Equity Funds (Loss) Gain | (3,260) | 50,163 | | Net Other Exchange Gains (Losses) | 24,033 | (2,539) | | **Total** | **50,365** | **49,125** | [6. Profit Before Tax](index=11&type=section&id=6.%20Profit%20Before%20Tax) For the six months ended June 30, 2025, total staff costs deducted from profit before tax significantly increased to RMB 359.6 million, primarily due to share-based payment expenses rising from RMB 61.3 million to RMB 193.5 million, with inventory costs and depreciation also increasing - Share-based payment expenses increased by approximately **215.5%** year-on-year, being the primary reason for the significant increase in total staff costs[21](index=21&type=chunk) Items Deducted (Credited) from Profit Before Tax (For the six months ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Total Staff Costs | 359,576 | 228,224 | | - Share-based Payment Expenses | 193,500 | 61,325 | | Cost of Inventories Recognized as Expense | 178,952 | 137,447 | | Total Depreciation and Amortization | 42,750 | 41,776 | [7. Income Tax Expense](index=12&type=section&id=7.%20Income%20Tax%20Expense) For the six months ended June 30, 2025, income tax expense increased to RMB 38.0 million, primarily due to higher taxable income, with LifeTech Shenzhen, a high-tech enterprise, benefiting from a preferential corporate income tax rate of 15% - LifeTech Shenzhen, as a high-tech enterprise, enjoyed a preferential corporate income tax rate of **15%** for the periods ended June 30, 2025, and 2024[23](index=23&type=chunk) Income Tax Expense (For the six months ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | PRC Corporate Income Tax | 30,415 | 34,210 | | Hong Kong Profits Tax | 8,530 | 8,059 | | Deferred Tax Credit | (910) | (19,432) | | **Total** | **38,035** | **22,837** | [8. Dividends](index=12&type=section&id=8.%20Dividends) For the interim periods ended June 30, 2025, and 2024, the Company neither paid, declared, nor proposed any dividends - No dividends were paid, declared, or proposed for the interim periods ended June 30, 2025, and 2024[25](index=25&type=chunk) [9. Earnings Per Share](index=13&type=section&id=9.%20Earnings%20Per%20Share) For the six months ended June 30, 2025, both basic and diluted earnings per share attributable to owners of the company were RMB 1.3 cents, a significant decrease from RMB 4.6 cents in the prior year, primarily due to reduced profit - The calculation of diluted earnings per share does not assume the conversion of share options with an exercise price higher than the average market price of the shares[26](index=26&type=chunk) Earnings Per Share Calculation (For the six months ended June 30) | Item | 2025 (RMB thousand / thousand shares) | 2024 (RMB thousand / thousand shares) | | :--- | :--- | :--- | | Profit for the purpose of calculating basic and diluted earnings per share | 55,074 | 205,557 | | Weighted average number of ordinary shares for the purpose of calculating basic earnings per share | 4,344,028 | 4,420,884 | | Weighted average number of ordinary shares for the purpose of calculating diluted earnings per share | 4,350,648 | 4,452,162 | | Basic Earnings Per Share | RMB 1.3 cents | RMB 4.6 cents | | Diluted Earnings Per Share | RMB 1.3 cents | RMB 4.6 cents | [10. Financial Assets at Fair Value Through Profit or Loss](index=14&type=section&id=10.%20Financial%20Assets%20at%20Fair%20Value%20Through%20Profit%20or%20Loss) As of June 30, 2025, total financial assets at fair value through profit or loss increased to RMB 703.0 million, comprising non-current equity and mixed funds and current short-term bank structured deposits, all considered long-term strategic investments primarily in the healthcare industry - The Group, as a limited partner, invests in private equity funds primarily focused on the healthcare industry, aiming for capital appreciation[28](index=28&type=chunk) - The Directors consider the holding of these funds as long-term strategic investments, thus classified as non-current assets[29](index=29&type=chunk) Financial Assets at Fair Value Through Profit or Loss (As of June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Unlisted Equity Funds | 205,302 | 209,430 | | Mixed Funds | 56,636 | 42,639 | | Short-term Bank Structured Deposits | 441,000 | 311,000 | | **Total** | **703,018** | **563,149** | [11. Equity Instruments at Fair Value Through Other Comprehensive Income](index=15&type=section&id=11.%20Equity%20Instruments%20at%20Fair%20Value%20Through%20Other%20Comprehensive%20Income) As of June 30, 2025, equity instruments at fair value through other comprehensive income, comprising Hong Kong-listed equity securities, increased in fair value to RMB 43.4 million, representing a long-term strategic investment as a cornerstone investor in Genesis MedTech - The Group subscribed for shares in Genesis MedTech as a cornerstone investor on September 21, 2022, for a total consideration of **USD 20.0 million**[30](index=30&type=chunk) - The Directors consider this investment as a long-term strategic investment, thus classified as a non-current asset[31](index=31&type=chunk) Equity Instruments at Fair Value Through Other Comprehensive Income (As of June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Hong Kong Listed Equity Securities | 43,410 | 17,099 | [12. Trade Receivables](index=15&type=section&id=12.%20Trade%20Receivables) As of June 30, 2025, total trade receivables increased to RMB 205.2 million, primarily driven by amounts aged 1 to 90 days, with the Group generally granting trade customers credit terms of 30 to 180 days - Total trade receivables increased by approximately **50.1%** year-on-year, primarily concentrated in the 90-day ageing category[32](index=32&type=chunk) Ageing Analysis of Trade Receivables (As of June 30) | Ageing | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | 1 to 90 days | 158,755 | 124,812 | | 91 to 180 days | 36,504 | 6,616 | | 181 to 365 days | 7,328 | 2,760 | | Over 365 days | 2,625 | 2,502 | | **Total** | **205,212** | **136,690** | [13. Other Receivables and Prepayments](index=16&type=section&id=13.%20Other%20Receivables%20and%20Prepayments) As of June 30, 2025, total other receivables and prepayments amounted to RMB 479.5 million, largely consistent with December 31, 2024, with advances to employees (others) being the largest component, primarily related to the 2019 share award scheme - Advances to employees (others) primarily refer to deferred payments for shares acquired by employees under the 2019 Share Award Scheme, secured by the relevant shares[33](index=33&type=chunk) Other Receivables and Prepayments (As of June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Other Debts | 41,110 | 18,823 | | Deductible VAT | 47,720 | 76,596 | | Prepayments | 72,735 | 67,928 | | Advances to Employees - Others | 284,495 | 287,519 | | **Total** | **479,543** | **478,222** | [14. Trade Payables](index=16&type=section&id=14.%20Trade%20Payables) As of June 30, 2025, total trade payables increased to RMB 83.0 million, primarily due to growth in amounts aged 0 to 30 days and over 120 days, with suppliers granting credit terms ranging from 30 to 120 days - Total trade payables increased by approximately **39.4%** year-on-year[34](index=34&type=chunk) Ageing Analysis of Trade Payables (As of June 30) | Ageing | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | 0 to 30 days | 17,729 | 7,520 | | 31 to 60 days | 8,863 | 9,020 | | 61 to 120 days | 13,498 | 9,007 | | Over 120 days | 42,908 | 33,996 | | **Total** | **82,998** | **59,543** | [15. Financial Liabilities at Fair Value Through Profit or Loss](index=17&type=section&id=15.%20Financial%20Liabilities%20at%20Fair%20Value%20Through%20Profit%20or%20Loss) As of June 30, 2025, financial liabilities at fair value through profit or loss remained at RMB 558.3 million, consistent with December 31, 2024, primarily due to shareholder agreements for Yuanxin Technology's Series A and B rounds, which include share redemption rights if specific conditions are not met - This financial liability arises from Yuanxin Technology's Series A and B shareholder agreements, which include share redemption rights, leading to the classification of related shares as financial liabilities[36](index=36&type=chunk) - Following the completion of the Series B agreement, the Group's equity interest in Yuanxin Technology decreased from **57.44%** to **49.64%**[36](index=36&type=chunk) Financial Liabilities at Fair Value Through Profit or Loss (As of June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Capital Contributions from Other Investors | 558,326 | 558,326 | [16. Share Capital](index=17&type=section&id=16.%20Share%20Capital) As of June 30, 2025, the Company's authorized share capital was 40,000,000,000 shares with a par value of USD 0.00000125 each, with issued and fully paid share capital slightly increasing due to option exercises, but the total amount remained RMB 37 thousand - The authorized share capital consists of **40,000,000,000 shares** with a par value of **USD 0.00000125** per share[37](index=37&type=chunk) Changes in Share Capital (As of June 30) | Item | Number of Shares | Amount (USD) | Amount (RMB thousand) | | :--- | :--- | :--- | :--- | | As at January 1, 2024 | 4,630,232,400 | 5,789 | 37 | | Exercise of share options | 380,000 | — | — | | As at December 31, 2024 | 4,630,612,400 | 5,789 | 37 | | Exercise of share options | 1,100,000 | 1 | — | | As at June 30, 2025 | 4,631,712,400 | 5,790 | 37 | [Management Discussion and Analysis](index=19&type=section&id=Management%20Discussion%20and%20Analysis) This section provides an in-depth review of the Group's business operations, financial performance, and strategic initiatives for the reporting period, including sales, R&D, and liquidity [Business Overview](index=19&type=section&id=Business%20Overview) The Group is a developer, manufacturer, and marketer of minimally invasive interventional medical devices for cardiovascular and peripheral vascular diseases, with three main product lines and a stable global sales network - The Group currently has three main product lines: structural heart disease business, peripheral vascular disease business, and pacing and electrophysiology business[40](index=40&type=chunk) - Products include congenital heart disease occluders, left atrial appendage occluders, vena cava filters, covered stents, implantable cardiac pacemakers, and pacemaker leads[40](index=40&type=chunk) - The Group has established a stable global sales network covering numerous countries in Asia, Europe, North America, South America, and Africa[40](index=40&type=chunk) [First Half Performance](index=19&type=section&id=First%20Half%20Performance) For the six months ended June 30, 2025, group revenue grew by 3.7% to RMB 676.7 million, with mainland China remaining the largest market at 74.1% of total revenue, and overseas sales increasing by 8.0% due to active expansion and marketing, while net profit attributable to owners of the company increased by 2.1% excluding non-recurring items but significantly decreased by 73.2% when including them - Asia (excluding mainland China) and Europe were the two largest overseas markets, accounting for approximately **11.4%** and **11.0%** of total revenue, respectively[41](index=41&type=chunk) - Profit attributable to owners of the company (excluding non-recurring items) increased by **2.1%** from **RMB 233.6 million** to **RMB 238.5 million**; however, including non-recurring items, net profit decreased by **73.2%** from **RMB 205.6 million** to **RMB 55.1 million**[42](index=42&type=chunk) First Half Revenue and Market Distribution | Indicator | 2025 | 2024 | Change | | :--- | :--- | :--- | :--- | | Total Revenue | RMB 676.7 million | RMB 652.8 million | +3.7% | | Mainland China Revenue Share | Approx. 74.1% | Approx. 75.1% | -1.0% | | Overseas Sales Growth | +8.0% | - | - | [Sales and Marketing](index=20&type=section&id=Sales%20and%20Marketing) The Group leverages its experienced sales and marketing team to enhance product brand awareness, influence, and sales through participation in domestic and international medical conferences, academic events, seminars, live surgeries, and professional training, fostering academic exchange in cardiovascular minimally invasive interventions - The Group enhances product brand awareness and influence by organizing or participating in domestic and international medical conferences, academic activities, seminars, live surgeries, and training for medical professionals[43](index=43&type=chunk) - LifeTech Scientific's academic exchange platform connects global cardiovascular experts for academic exchange, promoting the development of medical technology[43](index=43&type=chunk) [Research and Development ("R&D")](index=20&type=section&id=Research%20and%20Development%20%28%22R%26D%22%29) The Company continuously strengthens its innovation capabilities and accelerates product R&D to maintain industry leadership, with several products receiving NMPA or CE MDR certification in the first half, and others undergoing registration approval, CE certification, or clinical enrollment/follow-up - The Aortic Stent Graft System, Aortic Arch Stent Graft System, Peripheral Balloon Dilatation Catheter, YoscopTM Multi-Loop Retrieval System, and SteerEaseTM-m Cardiac Occluder Delivery System have obtained NMPA certification[45](index=45&type=chunk) - The IrisFitTM PFO Occluder and SteerEaseTM Delivery Sheath have obtained CE MDR certification[45](index=45&type=chunk) - Products such as the Thoracoabdominal Aortic Stent Graft System, Iliac Artery Stent Graft System, IBS TitanTM Bioresorbable Drug-Eluting Peripheral Stent System, and IBSTM Bioresorbable Drug-Eluting Coronary Stent System are currently undergoing registration approval or clinical enrollment in China or Europe[45](index=45&type=chunk)[50](index=50&type=chunk) [Intellectual Property](index=21&type=section&id=Intellectual%20Property) Intellectual property is a crucial intangible asset and core competitive driver for the Group, with 73 patent applications submitted and 41 patents approved in the first half of 2025, bringing the total to 1,123 approved and valid patents - For the six months ended June 30, 2025, the Group submitted **73** patent applications and successfully obtained approval for **41** patents[46](index=46&type=chunk) - As of June 30, 2025, the Group had cumulatively submitted **2,464** valid patent applications, with **1,123** approved and valid patents[46](index=46&type=chunk) [Financial Review](index=21&type=section&id=Financial%20Review) This section provides a detailed review of the Group's financial performance during the reporting period, covering revenue, gross profit, various expenses, changes in financial assets and liabilities, and net profit, indicating overall revenue growth but declining gross margins and significantly reduced operating and net profit due to increased share-based payment expenses [Revenue](index=21&type=section&id=Revenue) For the six months ended June 30, 2025, the Group's revenue was approximately RMB 676.7 million, a 3.7% year-on-year increase, primarily driven by increased sales of covered stents and left atrial appendage occluders - The increase in revenue was primarily due to higher revenue from the sales of covered stents and left atrial appendage occluders[48](index=48&type=chunk) Revenue Overview (For the six months ended June 30) | Indicator | 2025 (RMB million) | 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Total Revenue | 676.7 | 652.8 | +3.7% | [Revenue from Structural Heart Disease Business](index=21&type=section&id=Revenue%20from%20Structural%20Heart%20Disease%20Business) Revenue from the structural heart disease business was approximately RMB 271.5 million, a marginal 0.1% year-on-year increase, with left atrial appendage occluder sales revenue growing by 14.7% while congenital heart disease occluder sales revenue decreased by 7.2% Structural Heart Disease Business Revenue (For the six months ended June 30) | Item | 2025 (RMB million) | 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Total Revenue | 271.5 | 271.2 | +0.1% | | Left Atrial Appendage Occluder Sales Revenue Growth | +14.7% | - | - | | Congenital Heart Disease Occluder Sales Revenue Decrease | -7.2% | - | - | [Revenue from Peripheral Vascular Disease Business](index=22&type=section&id=Revenue%20from%20Peripheral%20Vascular%20Disease%20Business) Revenue from the peripheral vascular disease business was approximately RMB 391.7 million, a 2.9% year-on-year increase, with covered stent sales revenue growing by 9.6% while vena cava filter sales revenue decreased by 16.8% Peripheral Vascular Disease Business Revenue (For the six months ended June 30) | Item | 2025 (RMB million) | 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Total Revenue | 391.7 | 380.7 | +2.9% | | Covered Stent Sales Revenue Growth | +9.6% | - | - | | Vena Cava Filter Sales Revenue Decrease | -16.8% | - | - | [Revenue from Pacing and Electrophysiology Business](index=22&type=section&id=Revenue%20from%20Pacing%20and%20Electrophysiology%20Business) Revenue from the pacing and electrophysiology business was approximately RMB 13.5 million, representing a significant year-on-year increase of 1,400.0%, indicating strong growth momentum in this segment Pacing and Electrophysiology Business Revenue (For the six months ended June 30) | Item | 2025 (RMB million) | 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Total Revenue | 13.5 | 0.9 | +1,400.0% | [Gross Profit and Gross Margin](index=22&type=section&id=Gross%20Profit%20and%20Gross%20Margin) The Group's gross profit decreased by 3.4% year-on-year to RMB 497.8 million, with the gross margin declining by 5.3 percentage points to 73.6%, primarily due to lower product selling prices from centralized procurement policies and changes in sales mix - The decrease in gross margin was primarily due to lower selling prices of certain products under centralized procurement policies and changes in sales mix[53](index=53&type=chunk) Gross Profit and Gross Margin (For the six months ended June 30) | Indicator | 2025 | 2024 | Change | | :--- | :--- | :--- | :--- | | Gross Profit | RMB 497.8 million | RMB 515.4 million | -3.4% | | Gross Margin | Approx. 73.6% | Approx. 78.9% | -5.3 percentage points | [Other Income, Expenses, Gains and Losses](index=22&type=section&id=Other%20Income%2C%20Expenses%2C%20Gains%20and%20Losses) Other income, expenses, gains, and losses slightly increased to RMB 50.4 million, with an increase in net exchange gains largely offset by a decrease in fair value gains from financial assets at fair value through profit or loss - The change was primarily due to an increase in net exchange gains being offset by a decrease in gains from fair value changes of financial assets at fair value through profit or loss[54](index=54&type=chunk) Other Income, Expenses, Gains and Losses (For the six months ended June 30) | Indicator | 2025 (RMB million) | 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Total | 50.4 | 49.1 | +2.6% | [Financial Assets at Fair Value Through Profit or Loss](index=22&type=section&id=Financial%20Assets%20at%20Fair%20Value%20Through%20Profit%20or%20Loss) The Group made strategic investments in several private equity and mixed funds, with varying fair values; as of June 30, 2025, investments in 2018 equity fund were RMB 9.2 million, 2022 equity fund RMB 196.1 million, 2021 mixed fund RMB 13.5 million, and 2023 mixed fund RMB 43.2 million, all classified as non-current assets - For the six months ended June 30, 2025, total gains from fair value changes of financial assets at fair value through profit or loss amounted to approximately **RMB 10.7 million** (2024: approximately **RMB 31.9 million** gain)[57](index=57&type=chunk) Fair Value of Major Financial Assets at Fair Value Through Profit or Loss (As of June 30) | Investment Item | 2025 (RMB million) | 2024 (RMB million) | | :--- | :--- | :--- | | 2018 Equity Fund | 9.2 | 8.9 | | 2021 Mixed Fund | 13.5 | 12.5 | | 2022 Equity Fund | 196.1 | 200.5 | | 2023 Mixed Fund | 43.2 | 30.2 | [Selling and Distribution Expenses](index=23&type=section&id=Selling%20and%20Distribution%20Expenses) Selling and distribution expenses significantly increased by 67.3% year-on-year to RMB 250.9 million, primarily due to higher staff costs, with share-based payment expenses rising from RMB 24.1 million to RMB 128.4 million Selling and Distribution Expenses (For the six months ended June 30) | Indicator | 2025 (RMB million) | 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Total | 250.9 | 150.0 | +67.3% | | Share-based Payment Expenses | 128.4 | 24.1 | +432.8% | [Administrative Expenses](index=23&type=section&id=Administrative%20Expenses) Administrative expenses increased by 63.1% year-on-year to RMB 118.4 million, primarily due to higher staff costs, with share-based payment expenses rising from RMB 16.0 million to RMB 54.6 million Administrative Expenses (For the six months ended June 30) | Indicator | 2025 (RMB million) | 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Total | 118.4 | 72.6 | +63.1% | | Share-based Payment Expenses | 54.6 | 16.0 | +241.3% | [Research and Development Expenses](index=24&type=section&id=Research%20and%20Development%20Expenses) R&D expenses decreased by 18.2% year-on-year to RMB 114.5 million, and total R&D costs, after considering capitalized development expenditure, decreased by 23.6% to RMB 156.0 million, primarily due to reduced share-based payment expenses related to Yuanxin Technology Research and Development Expenses (For the six months ended June 30) | Indicator | 2025 (RMB million) | 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | R&D Expenses | 114.5 | 139.9 | -18.2% | | Capitalized Development Expenditure | 41.5 | 64.3 | -35.4% | | Total R&D Costs (after capitalization) | 156.0 | 204.2 | -23.6% | | Yuanxin Technology-related Share-based Payment Expenses | 5.9 | 36.3 | -83.7% | [Operating Profit](index=24&type=section&id=Operating%20Profit) Operating profit significantly decreased by 68.1% year-on-year to RMB 64.4 million, primarily due to increased staff costs from higher share-based payment expenses and reduced fair value gains from financial assets at fair value through profit or loss - The decrease in operating profit was primarily due to increased staff costs from higher share-based payment expenses and reduced gains from fair value changes of financial assets at fair value through profit or loss[61](index=61&type=chunk) Operating Profit (For the six months ended June 30) | Indicator | 2025 (RMB million) | 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Operating Profit | 64.4 | 202.0 | -68.1% | [Share of Results of Associates](index=24&type=section&id=Share%20of%20Results%20of%20Associates) The Group's share of results of associates turned from a loss of RMB 1.4 million in 2024 to a gain of RMB 5.3 million in 2025 Share of Results of Associates (For the six months ended June 30) | Indicator | 2025 (RMB million) | 2024 (RMB million) | | :--- | :--- | :--- | | Share of Results of Associates | 5.3 (Gain) | (1.4) (Loss) | [Finance Income and Finance Costs](index=24&type=section&id=Finance%20Income%20and%20Finance%20Costs) Finance income increased by 15.7% year-on-year to RMB 10.3 million, while finance costs significantly decreased by 88.9% to RMB 0.1 million Finance Income and Finance Costs (For the six months ended June 30) | Indicator | 2025 (RMB million) | 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Finance Income | 10.3 | 8.9 | +15.7% | | Finance Costs | 0.1 | 0.9 | -88.9% | [Financial Liabilities at Fair Value Through Profit or Loss](index=24&type=section&id=Financial%20Liabilities%20at%20Fair%20Value%20Through%20Profit%20or%20Loss) As of June 30, 2025, financial liabilities at fair value through profit or loss remained at RMB 558.3 million, consistent with December 31, 2024, primarily related to Yuanxin Technology's shareholder agreements, which classify them as financial liabilities due to redemption rights - This financial liability arises from Yuanxin Technology's Series A and B shareholder agreements, which include share redemption rights[64](index=64&type=chunk) - For the six months ended June 30, 2025, the fair value change of financial liabilities was not significant[65](index=65&type=chunk) Financial Liabilities at Fair Value Through Profit or Loss (As of June 30) | Indicator | 2025 (RMB million) | 2024 (RMB million) | | :--- | :--- | :--- | | Fair Value | 558.3 | 558.3 | [Income Tax](index=25&type=section&id=Income%20Tax) Income tax expense increased year-on-year to RMB 38.0 million, primarily attributable to higher taxable income - The increase in income tax was primarily attributable to higher taxable income[68](index=68&type=chunk) Income Tax Expense (For the six months ended June 30) | Indicator | 2025 (RMB million) | 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Income Tax | 38.0 | 22.8 | +66.7% | [Net Profit](index=25&type=section&id=Net%20Profit) Excluding non-recurring items, net profit attributable to owners of the company increased by 2.1% year-on-year to RMB 238.5 million; however, including non-recurring items, net profit significantly decreased by 73.2% to RMB 55.1 million, primarily due to reduced fair value gains from financial assets and substantially increased share-based payment expenses - Non-recurring items included other gains from financial assets at fair value through profit or loss of approximately **RMB 9.9 million** (2024: **RMB 32.9 million**) and share-based payment expenses of approximately **RMB 193.5 million** (2024: **RMB 61.3 million**)[69](index=69&type=chunk) Net Profit (For the six months ended June 30) | Indicator | 2025 (RMB million) | 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Net Profit (excluding non-recurring items) | 238.5 | 233.6 | +2.1% | | Net Profit (including non-recurring items) | 55.1 | 205.6 | -73.2% | [Equity Instruments at Fair Value Through Other Comprehensive Income](index=25&type=section&id=Equity%20Instruments%20at%20Fair%20Value%20Through%20Other%20Comprehensive%20Income) As of June 30, 2025, the Group's investment in Genesis MedTech had a fair value of approximately RMB 43.4 million, representing about 0.8% of total assets, classified as an equity instrument at fair value through other comprehensive income and considered a long-term strategic investment, generating a fair value gain of approximately RMB 27.0 million this period - For the six months ended June 30, 2025, gains from fair value changes of equity instruments at fair value through other comprehensive income amounted to approximately **RMB 27.0 million** (2024: approximately **RMB 93.2 million** loss)[70](index=70&type=chunk) - The Group holds approximately **1.8%** of Genesis MedTech's issued share capital, and this investment is considered a long-term strategic investment[71](index=71&type=chunk) Equity Instruments at Fair Value Through Other Comprehensive Income (As of June 30) | Indicator | 2025 (RMB million) | 2024 (RMB million) | | :--- | :--- | :--- | | Fair Value | 43.4 | 17.1 | | Percentage of Total Assets | 0.8% | 0.3% | [Liquidity and Financial Resources](index=26&type=section&id=Liquidity%20and%20Financial%20Resources) The Group primarily funds its operations with internal working capital; as of June 30, 2025, total current assets were RMB 2,573.3 million, total current liabilities were RMB 993.3 million, resulting in a current ratio of approximately 2.59, with trade receivables turnover days at 45 and trade payables at 72, and cash and cash equivalents increasing by 17.5% to RMB 782.6 million - The Group had no bank borrowings at the end of the reporting period or as of December 31, 2024, resulting in a zero gearing ratio[74](index=74&type=chunk)[76](index=76&type=chunk) Liquidity and Financial Resources Overview (As of June 30) | Indicator | 2025 (RMB million) | 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Total Current Assets | 2,573.3 | 2,334.2 | +10.2% | | Total Current Liabilities | 993.3 | 815.6 | +21.8% | | Current Ratio | 2.59 | 2.86 | -9.5% | | Trade Receivables Turnover Days | 45 days | 33 days | +36.4% | | Trade Payables Turnover Days | 72 days | 103 days | -30.1% | | Cash and Cash Equivalents | 782.6 | 665.8 | +17.5% | [Properties Held](index=27&type=section&id=Properties%20Held) Dongguan LifeTech, a wholly-owned subsidiary, acquired land use rights for a plot in Dongguan Songshan Lake in 2019 and commenced construction of an industrial park in 2020; as of June 30, 2025, the park has obtained property ownership certificates, with portions used for self-operation, external leasing, and future allocation - Dongguan LifeTech acquired land use rights for a plot of **43,604 square meters** in 2019, with a total consideration of approximately **RMB 43.6 million**[79](index=79&type=chunk) - The industrial park's total construction contract price reached up to **RMB 620.0 million**, and property ownership certificates for all buildings and the basement were obtained in May 2023[79](index=79&type=chunk) [Significant Acquisitions and Disposals of Subsidiaries, Associates and Joint Ventures](index=27&type=section&id=Significant%20Acquisitions%20and%20Disposals%20of%20Subsidiaries%2C%20Associates%20and%20Joint%20Ventures) The Company, through LifeTech Shenzhen, plans to invest RMB 150.0 million in Jianhu Medical Technology (Suzhou) Co., Ltd. to strengthen its position in the high-growth electrophysiology market; as of the reporting period, the first phase of investment is complete, with LifeTech Shenzhen acquiring a 22.22% equity interest - The Company, through LifeTech Shenzhen, intends to invest a total of **RMB 150.0 million** in Jianhu Medical Technology (Suzhou) Co., Ltd[80](index=80&type=chunk)[81](index=81&type=chunk) - This investment will be carried out in phases, and upon completion of all phases, LifeTech Shenzhen will hold a **30%** equity interest in Jianhu Medical[81](index=81&type=chunk) - As of the date of this interim results announcement, the first phase of the investment has been completed, with LifeTech Shenzhen acquiring a **22.22%** equity interest in Jianhu Medical[81](index=81&type=chunk) [Significant Investments and Future Plans for Significant Investments or Capital Assets](index=28&type=section&id=Significant%20Investments%20and%20Future%20Plans%20for%20Significant%20Investments%20or%20Capital%20Assets) As of June 30, 2025, the Company held no significant investments exceeding 5% of total assets and had no other board-authorized plans for major investments or capital asset additions; its investment strategy focuses on seeking strategic collaborations with growth potential in the medical industry to enrich product lines and expand business scale - The Company did not hold any significant investments exceeding **5%** of total assets, nor did it have other plans for significant investments or additions of capital assets[82](index=82&type=chunk) - The investment strategy is to identify investment opportunities with growth potential within the medical industry and seek strategic collaborations to enrich product lines and expand business scale[82](index=82&type=chunk) [Contingent Liabilities](index=28&type=section&id=Contingent%20Liabilities) As of June 30, 2025, the Group had no significant contingent liabilities - The Group had no significant contingent liabilities as of June 30, 2025[83](index=83&type=chunk) [Financial Instruments](index=28&type=section&id=Financial%20Instruments) As of June 30, 2025, the Group had no outstanding hedging contracts or financial derivative instruments - As of June 30, 2025, the Group had no outstanding hedging contracts or financial derivative instruments[84](index=84&type=chunk) [Capital Expenditure](index=28&type=section&id=Capital%20Expenditure) For the six months ended June 30, 2025, the Group's capital expenditure was approximately RMB 56.7 million, a significant decrease from RMB 213.2 million in the prior year - Capital expenditure was primarily for property, plant and equipment, construction in progress, intangible assets, right-of-use assets, and deposits for property, plant and equipment[85](index=85&type=chunk) Capital Expenditure (For the six months ended June 30) | Indicator | 2025 (RMB million) | 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Capital Expenditure | 56.7 | 213.2 | -73.4% | [Foreign Exchange Risk](index=29&type=section&id=Foreign%20Exchange%20Risk) The Group primarily operates in Asia and Europe, with its operating results and financial position influenced by exchange rate fluctuations; while no hedging strategies were employed during the reporting period, management closely monitors foreign exchange risk, anticipating no significant adverse impact in the short term and considering hedging when necessary - The Group primarily conducts business in Asia and Europe, with revenue from Asia (excluding mainland China) and Europe accounting for approximately **11.4%** and **11.0%** of total revenue, respectively[86](index=86&type=chunk) - Management closely monitors foreign exchange risk to maintain net exposure at an acceptable level and does not anticipate exchange rate fluctuations to have a significant adverse impact on its operations in the foreseeable future[86](index=86&type=chunk) [Pledged Group Assets](index=29&type=section&id=Pledged%20Group%20Assets) As of June 30, 2025, the Group had no pledged assets - As of June 30, 2025, the Group had no pledged assets[87](index=87&type=chunk) [Capital Commitments](index=29&type=section&id=Capital%20Commitments) As of June 30, 2025, the Group's contracted capital expenditure not yet provided for in the condensed consolidated financial statements was approximately RMB 46.3 million, a decrease from RMB 55.1 million as of December 31, 2024 Capital Commitments (As of June 30) | Indicator | 2025 (RMB million) | 2024 (RMB million) | | :--- | :--- | :--- | | Contracted Capital Expenditure Not Provided For | 46.3 | 55.1 | [Segment Information (Business Outlook)](index=29&type=section&id=Segment%20Information%20%28Business%20Outlook%29) The Group's revenue primarily stems from structural heart disease, peripheral vascular disease, and pacing and electrophysiology businesses, with future market demand for its products expected to rise due to aging populations, urbanization, and increased health awareness, which the company plans to capitalize on through differentiated marketing, product upgrades, and technological leadership - Aging populations, urbanization, and increasing health awareness collectively drive stable growth in the healthcare industry, with market demand for the Company's products expected to show an upward trend in the future[89](index=89&type=chunk) [Structural Heart Disease Business](index=29&type=section&id=Structural%20Heart%20Disease%20Business) The Company deploys four generations of congenital heart disease occluders to meet diverse patient needs and continuously upgrades its left atrial appendage occluders, anticipating sustained growth in the global market share for left atrial appendage occluders - The Company deploys four generations of congenital heart disease occluders and continuously upgrades its left atrial appendage occluders[90](index=90&type=chunk) - Based on the large global population of atrial fibrillation patients, the global market share for left atrial appendage occluders is expected to continue growing in the future[90](index=90&type=chunk) [Peripheral Vascular Disease Business](index=29&type=section&id=Peripheral%20Vascular%20Disease%20Business) The Company offers technologically advanced systemic comprehensive interventional medical device solutions for peripheral vascular diseases, with leading domestic market shares for vena cava filters and covered stents, and anticipates market demand growth driven by aging populations, increased disease detection rates, and expanded product applications - The Company provides patients with technologically advanced systemic comprehensive interventional medical device solutions for peripheral vascular diseases, with vena cava filters and covered stents holding leading market shares domestically[91](index=91&type=chunk) - Aging populations, increased disease detection rates, and expanded product applications will help drive market demand growth for these products[91](index=91&type=chunk) [Pacing and Electrophysiology Business](index=30&type=section&id=Pacing%20and%20Electrophysiology%20Business) The Company is China's first manufacturer to possess a complete product portfolio of domestically produced implantable cardiac pacemakers with international-level technology and functionality - The Company is China's first manufacturer to possess a complete product portfolio of domestically produced implantable cardiac pacemakers with international-level technology and functionality[92](index=92&type=chunk) [Employees and Remuneration Policy](index=30&type=section&id=Employees%20and%20Remuneration%20Policy) As of June 30, 2025, the Group had 1,273 full-time employees, with total staff costs of approximately RMB 359.6 million in the first half, primarily impacted by share-based payment expenses; the company offers various benefits, fair performance appraisal systems, and share award schemes, committed to providing a safe and comfortable work environment and development opportunities - The Group's remuneration policy is determined with reference to individual employees' performance, qualifications, and work experience, as well as the Group's performance and market conditions[94](index=94&type=chunk) - The Company has adopted share option schemes and share award schemes to provide incentives to employees and other eligible participants[94](index=94&type=chunk) Employees and Remuneration Overview (For the six months ended June 30) | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | Number of Full-time Employees | 1,273 | 1,392 | | Total Staff Costs | RMB 359.6 million | RMB 228.2 million | | Retirement Benefit Scheme Contributions | RMB 18.7 million | RMB 18.0 million | [2020 Placing](index=31&type=section&id=2020%20Placing) The Company completed a placing of 287,320,000 new ordinary shares in December 2020, raising approximately HKD 930.0 million in net proceeds; as of June 30, 2025, approximately HKD 391.2 million remains unutilized, earmarked for potential business development, including new overseas clinical projects, with gradual deployment expected from the second half of 2025 to 2027 - The Company completed a placing of **287,320,000** new ordinary shares in December 2020 at a placing price of **HKD 3.2368** per share, raising net proceeds of approximately **HKD 930.0 million**[96](index=96&type=chunk)[97](index=97&type=chunk) - The Directors believe that the 2020 Placing strengthened the Company's financial position and provided working capital[100](index=100&type=chunk) Use of Proceeds from 2020 Placing (As of June 30) | Intended Use | Approximate Allocated Net Proceeds (HKD million) | Approximate Unutilized Net Proceeds as of June 30, 2025 (HKD million) | Expected Time of Utilization | | :--- | :--- | :--- | :--- | | Repayment of Bank Borrowings | 406.0 | — | Fully utilized | | Funding for Potential Business Development | 465.0 | 391.2 | H2 2025 to 2027 | | General Working Capital Purposes | 59.0 | — | Fully utilized | | **Total** | **930.0** | **391.2** | - | [Events After Reporting Period](index=32&type=section&id=Events%20After%20Reporting%20Period) No significant events affecting the Group occurred after June 30, 2025 - No significant events affecting the Group occurred after June 30, 2025[102](index=102&type=chunk) [Future Outlook](index=33&type=section&id=Future%20Outlook) [Future Outlook](index=33&type=section&id=Future%20Outlook) The global medical device industry continues to present significant growth opportunities driven by demographic shifts, technological advancements, and increasing healthcare demands; the Company, with strong R&D, diversified products, and international presence, is strategically investing in Jianhu Medical to strengthen its electrophysiology market position and commercialize innovative products through overseas networks, focusing on international expansion, technological innovation, product upgrades, and prudent capital allocation for sustainable growth and shareholder value maximization - The global medical device industry continues to present significant growth opportunities driven by demographic shifts, technological advancements, and increasing healthcare demands[103](index=103&type=chunk) - The strategic investment in Jianhu Medical is a key milestone to consolidate its position in the high-growth electrophysiology market, expected to generate significant synergies, particularly through leveraging overseas distribution networks for the commercialization of innovative products[103](index=103&type=chunk) - The future focus will remain on international business expansion, maintaining overall operational efficiency, continuous investment in new technology development and product upgrades, and a prudent capital allocation strategy[103](index=103&type=chunk) [Other Information](index=34&type=section&id=Other%20Information) This section covers corporate governance, compliance, and administrative matters, including dividend policy, securities transactions, and the review of interim results [Interim Dividend](index=34&type=section&id=Interim%20Dividend) The Board does not recommend paying any interim dividend for the six months ended June 30, 2025 - The Directors do not recommend paying any interim dividend for the six months ended June 30, 2025 (2024: nil)[105](index=105&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=34&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company%27s%20Listed%20Securities) For the six months ended June 30, 2025, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities - For the six months ended June 30, 2025, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[106](index=106&type=chunk) [Compliance with Corporate Governance Code](index=34&type=section&id=Compliance%20with%20Corporate%20Governance%20Code) The Company is committed to high standards of corporate governance and confirms compliance with the Corporate Governance Code provisions in Appendix C1 of the Listing Rules during the reporting period, noting that the combined roles of Chairman and Chief Executive Officer, while deviating from Code Provision C.2.1, are deemed by the Board to provide strong and stable leadership - The Company confirms compliance with the Code Provisions under the Corporate Governance Code for the six months ended June 30, 2025, except for the deviation from Code Provision C.2.1 where the roles of Chairman and Chief Executive Officer are combined[107](index=107&type=chunk) - The Board believes that Mr. Xie Yuehui serving concurrently as Chairman and Chief Executive Officer provides strong and stable leadership for the Company, ensuring effective implementation of business decisions and strategies[107](index=107&type=chunk) [Standard Code for Securities Transactions](index=34&type=section&id=Standard%20Code%20for%20Securities%20Transactions) The Company has adopted the Standard Code for Securities Transactions as set out in Appendix C3 of the Listing Rules as its code of conduct and confirms that all Directors, senior management, executives, and employees with potential access to inside information complied with this code during the reporting period - The Company has adopted the Standard Code for Securities Transactions by Directors of Listed Issuers, as set out in Appendix C3 of the Listing Rules, as its own code of conduct[109](index=109&type=chunk) - For the six months ended June 30, 2025, all members of the Board and employees with potential access to inside information complied with the requirements of the Standard Code[109](index=109&type=chunk) [Audit Committee and Review of Interim Results](index=35&type=section&id=Audit%20Committee%20and%20Review%20of%20Interim%20Results) The Audit Committee, comprising three independent non-executive directors, reviewed and discussed the Group's unaudited interim results for the six months ended June 30, 2025, confirming compliance with relevant accounting standards, Listing Rules, and applicable legal requirements, with adequate disclosures made - The Audit Committee comprises three independent non-executive directors: Mr. Leung Hin Chee (Chairman), Mr. Zhou Luming, and Mr. Wang Wansong[110](index=110&type=chunk) - The Audit Committee has reviewed and discussed the Group's unaudited interim results for the six months ended June 30, 2025, deeming them compliant with relevant accounting standards, Listing Rules, and applicable legal requirements, with adequate disclosures made[110](index=110&type=chunk) [Publication of Interim Results Announcement and Interim Report](index=35&type=section&id=Publication%20of%20Interim%20Results%20Announcement%20and%20Interim%20Report) The interim results announcement has been published on the websites of The Stock Exchange of Hong Kong Limited and the Company, with the 2025 interim report, containing all required information, to be made available to shareholders and published on the aforementioned websites in due course - The interim results announcement has been published on the websites of The Stock Exchange of Hong Kong Limited and the Company[111](index=111&type=chunk) - The Company's 2025 interim report, containing all information required by the Listing Rules, will be made available to shareholders and published on the aforementioned websites in due course[111](index=111&type=chunk)

[Unaudited Interim Results Announcement Overview](index=1&type=section&id=Unaudited%20Interim%20Results%20Announcement%20Overview) [H1 2025 Performance Summary](index=1&type=section&id=H1%202025%20Performance%20Summary) The Group achieved 1.6% revenue growth in H1 2025, driven by strong online and wholesale business performance - The Group's H1 2025 revenue grew by **1.6%**, primarily driven by the online business (**26.1% growth**) and wholesale operations[3](index=3&type=chunk)[30](index=30&type=chunk) - Gross profit margin decreased by **3.3 percentage points to 55.6%** due to channel mix shifts and strategic inventory clearance[3](index=3&type=chunk)[30](index=30&type=chunk) - Operating expenses as a percentage of revenue decreased by **0.6 percentage points to 48.9%**, reflecting disciplined cost management[3](index=3&type=chunk)[30](index=30&type=chunk) Key Financial Indicators for H1 2025 | Indicator | 2025 (HK$ million) | 2024 (HK$ million) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 1,934 | 1,903 | 1.6% | | Gross Profit Margin | 55.6% | 58.9% | -3.3 p.p. | | Operating Expenses as % of Revenue | 48.9% | 49.5% | -0.6 p.p. | | Net Profit Attributable to Shareholders | 121 | 120 | 0.8% | | Inventory Balance | 513 | 514 | -0.2% | | Inventory Turnover Days | 108 days | 119 days | -11 days | | Cash and Bank Balances, Net of Bank Loans | 722 | 720 | 0.3% | | Basic Earnings Per Share (HK cents) | 7.5 | 7.4 | 1.4% | | Interim Dividend (HK cents per share) | 7.5 | 8.0 | -6.3% | [Consolidated Financial Statements](index=3&type=section&id=Consolidated%20Financial%20Statements) [Consolidated Income Statement](index=3&type=section&id=Consolidated%20Income%20Statement) The Group's revenue grew 1.6% to HK$1,934 million, while operating profit declined 11.4% to HK$179 million Summary of Consolidated Income Statement (For the six months ended June 30) | Indicator | 2025 (HK$ million) | 2024 (HK$ million) | | :--- | :--- | :--- | | Revenue | 1,934 | 1,903 | | Cost of sales | (858) | (783) | | Gross profit | 1,076 | 1,120 | | Other income and other gains, net | 49 | 24 | | Distribution costs | (842) | (811) | | Administrative expenses | (104) | (131) | | Operating profit | 179 | 202 | | Finance costs | (23) | (22) | | Share of profit of a joint venture | – | 15 | | Profit before income tax | 156 | 195 | | Income tax | (23) | (53) | | Profit for the period after income tax | 133 | 142 | | Net profit attributable to shareholders of the Company | 121 | 120 | | Non-controlling interests | 12 | 22 | | Basic earnings per share (HK cents) | 7.5 | 7.4 | [Consolidated Statement of Comprehensive Income](index=3&type=section&id=Consolidated%20Statement%20of%20Comprehensive%20Income) Total comprehensive income for the period significantly increased to HK$193 million from HK$88 million year-over-year Summary of Consolidated Statement of Comprehensive Income (For the six months ended June 30) | Indicator | 2025 (HK$ million) | 2024 (HK$ million) | | :--- | :--- | :--- | | Profit for the period after income tax | 133 | 142 | | Exchange translation adjustments attributable to non-controlling interests of overseas subsidiaries | (1) | (5) | | Exchange translation adjustments of overseas subsidiaries, a joint venture and branches | 61 | (49) | | Total comprehensive income for the period | 193 | 88 | | Attributable to shareholders of the Company | 182 | 71 | | Non-controlling interests | 11 | 17 | [Consolidated Balance Sheet](index=4&type=section&id=Consolidated%20Balance%20Sheet) Total assets slightly decreased to HK$3,723 million, while net current assets improved to HK$640 million Summary of Consolidated Balance Sheet (As at June 30) | Indicator | 2025 (HK$ million) | 2024 (HK$ million) | | :--- | :--- | :--- | | **Assets** | | | | Total current assets | 1,662 | 1,692 | | Total non-current assets | 2,061 | 2,074 | | Total assets | 3,723 | 3,766 | | **Liabilities and Equity** | | | | Total current liabilities | 1,022 | 1,134 | | Total non-current liabilities | 491 | 512 | | Total liabilities | 1,513 | 1,646 | | Equity attributable to shareholders of the Company | 2,083 | 1,998 | | Non-controlling interests | 127 | 122 | | Total equity | 2,210 | 2,120 | | Net current assets | 640 | 558 | [Notes to Financial Statements](index=5&type=section&id=Notes%20to%20Financial%20Statements) [Significant Accounting Policies](index=5&type=section&id=Significant%20Accounting%20Policies) The interim results are prepared in accordance with HKAS 34, with accounting policies consistent with the 2024 annual report - These interim results are prepared in accordance with the Listing Rules of the Hong Kong Stock Exchange and HKAS 34, with accounting policies largely consistent with the 2024 annual financial statements[7](index=7&type=chunk) - The adoption of revised standards this period (e.g, amendments to HKAS 21 and HKFRS 1) had no material impact on the Group's accounting policies or financial performance[10](index=10&type=chunk) - HKFRS 18, which will replace HKAS 1, is expected to have a broad impact on financial statement presentation and disclosure, with management currently assessing its detailed effects[11](index=11&type=chunk) [Sales and Operating Segments](index=6&type=section&id=Sales%20and%20Operating%20Segments) The Group's operating segments are managed by geography and brand, with performance measured by adjusted EBITDA - The Group's main operating segments are retail and distribution, and wholesale to overseas franchisees, which management oversees by region and brand[12](index=12&type=chunk) Sales and Segment Results by Geography (For the six months ended June 30) | Region | 2025 Sales (HK$ million) | 2024 Sales (HK$ million) | 2025 Segment Results (HK$ million) | 2024 Segment Results (HK$ million) | | :--- | :--- | :--- | :--- | :--- | | Mainland China | 337 | 300 | (16) | (13) | | Hong Kong & Macau | 177 | 182 | 9 | 18 | | Taiwan | 203 | 206 | 15 | 18 | | Southeast Asia & Australia | 688 | 739 | 85 | 133 | | GCC | 368 | 362 | 73 | 76 | | Wholesale to overseas franchisees | 161 | 114 | 11 | 13 | | Total | 1,934 | 1,903 | 177 | 245 | Retail and Distribution Sales and Operating Profit by Brand (For the six months ended June 30) | Brand | 2025 Sales (HK$ million) | 2025 Operating Profit (HK$ million) | 2024 Sales (HK$ million) | 2024 Operating Profit (HK$ million) | | :--- | :--- | :--- | :--- | :--- | | Giordano and Giordano Junior | 1,525 | 161 | 1,502 | 201 | | Giordano Ladies | 122 | 14 | 122 | 18 | | BSX | 4 | – | 4 | – | | Others | 122 | (9) | 161 | 13 | | Total | 1,773 | 166 | 1,789 | 232 | [Other Income and Gains](index=8&type=section&id=Other%20Income%20and%20Gains) Net other income and gains increased significantly to HK$49 million from HK$24 million, driven by higher exchange gains Other Income and Gains, Net (For the six months ended June 30) | Item | 2025 (HK$ million) | 2024 (HK$ million) | | :--- | :--- | :--- | | Royalty and license income | 13 | 14 | | Interest income | 5 | 10 | | Rental and sub-letting income | 4 | 4 | | Net loss on disposal of property, plant and equipment | (1) | (1) | | Net foreign exchange gains (losses) | 11 | (7) | | Others | 17 | 4 | | **Total** | **49** | **24** | [Composition of Operating Profit](index=9&type=section&id=Composition%20of%20Operating%20Profit) Operating profit is stated after charging cost of sales, distribution costs, and administrative expenses Items Deducted from / Credited to Operating Profit (For the six months ended June 30) | Item | 2025 (HK$ million) | 2024 (HK$ million) | | :--- | :--- | :--- | | **Cost of Sales** | | | | Cost of inventories sold | 861 | 783 | | Net reversal of provision for and write-off of obsolete inventories | (3) | – | | **Total Cost of Sales** | **858** | **783** | | **Distribution Costs** | | | | Staff costs | 306 | 303 | | Depreciation (right-of-use assets) | 203 | 202 | | Depreciation (property, plant and equipment) | 29 | 27 | | Lease payments for land and buildings | 115 | 104 | | Advertising, promotion and incentives | 49 | 39 | | **Total Distribution Costs** | **842** | **811** | | **Administrative Expenses** | | | | Staff costs | 70 | 93 | | Depreciation (right-of-use assets) | 9 | 7 | | Depreciation (property, plant and equipment and investment properties) | 3 | 3 | | Legal and professional fees | 8 | 11 | | **Total Administrative Expenses** | **104** | **131** | [Finance Costs](index=10&type=section&id=Finance%20Costs) Finance costs for the period were HK$23 million, a slight increase from HK$22 million in the prior year Finance Costs (For the six months ended June 30) | Item | 2025 (HK$ million) | 2024 (HK$ million) | | :--- | :--- | :--- | | Interest on lease liabilities | 22 | 22 | | Interest on bank loans | 1 | – | | **Total** | **23** | **22** | [Income Tax](index=10&type=section&id=Income%20Tax) Income tax expense decreased significantly to HK$23 million from HK$53 million, due to provision reversals and deferred tax adjustments Income Tax (For the six months ended June 30) | Item | 2025 (HK$ million) | 2024 (HK$ million) | | :--- | :--- | :--- | | **Current Income Tax** | | | | Hong Kong | 1 | 1 | | Outside Hong Kong | 26 | 34 | | Over-provision in prior periods | (7) | – | | Withholding tax | 10 | 18 | | **Subtotal** | **30** | **53** | | **Deferred Income Tax** | | | | Origination and reversal of temporary differences | (7) | – | | **Total** | **23** | **53** | [Earnings Per Share](index=10&type=section&id=Earnings%20Per%20Share) Basic earnings per share for the period was 7.5 HK cents, a slight increase from 7.4 HK cents year-over-year Earnings Per Share (For the six months ended June 30) | Indicator | 2025 (HK cents) | 2024 (HK cents) | | :--- | :--- | :--- | | Basic earnings per share | 7.5 | 7.4 | | Diluted earnings per share | 7.5 | 7.4 | | Weighted average number of ordinary shares in issue (Basic) | 1,616,190,628 | 1,614,555,002 | | Weighted average number of ordinary shares in issue (Diluted) | 1,616,190,628 | 1,614,555,002 | | Weighted average number of shares issued upon exercise of share options | 1,453,313 | 8,911,412 | [Dividends](index=11&type=section&id=Dividends) The Board declared an interim dividend of 7.5 HK cents per share, totaling approximately HK$121 million Dividends (For the six months ended June 30) | Item | 2025 (HK$ million) | 2024 (HK$ million) | | :--- | :--- | :--- | | Interim dividend declared (HK cents per share) | 7.5 (121) | 8.0 (129) | | 2024 final dividend paid (HK cents per share) | 6.0 (97) | 13.5 (218) | [Trade and Other Receivables](index=11&type=section&id=Trade%20and%20Other%20Receivables) Net trade receivables increased to HK$225 million, with a rise in balances aged over 90 days Trade and Other Receivables (As at June 30) | Item | 2025 (HK$ million) | 2024 (HK$ million) | | :--- | :--- | :--- | | Net trade receivables | 225 | 209 | | Other receivables, including deposits and prepayments | 157 | 133 | | **Total** | **382** | **342** | Aging Analysis of Trade Receivables (As at June 30) | Aging | 2025 (HK$ million) | 2024 (HK$ million) | | :--- | :--- | :--- | | 0 to 30 days | 185 | 142 | | 31 to 60 days | 14 | 48 | | 61 to 90 days | 4 | 13 | | Over 90 days | 22 | 6 | | **Total** | **225** | **209** | [Trade and Other Payables](index=12&type=section&id=Trade%20and%20Other%20Payables) Total trade and other payables decreased to HK$478 million from HK$611 million at year-end 2024 Trade and Other Payables (As at June 30) | Item | 2025 (HK$ million) | 2024 (HK$ million) | | :--- | :--- | :--- | | Trade payables | 215 | 292 | | Pension obligations | 40 | 36 | | Other payables and accrued charges | 223 | 283 | | **Total** | **478** | **611** | Aging Analysis of Trade Payables (As at June 30) | Aging | 2025 (HK$ million) | 2024 (HK$ million) | | :--- | :--- | :--- | | 0 to 30 days | 183 | 262 | | 31 to 60 days | 22 | 19 | | 61 to 90 days | 3 | 4 | | Over 90 days | 7 | 7 | | **Total** | **215** | **292** | [Management Discussion and Analysis](index=13&type=section&id=Management%20Discussion%20and%20Analysis) [Operating Results Overview](index=13&type=section&id=Operating%20Results%20Overview) The Group's H1 2025 revenue grew 1.6%, while operating profit declined 11.4%, with significant improvement in inventory turnover Group Operating Results (For the six months ended June 30) | Indicator | 2025 (HK$ million) | % of Revenue | 2024 (HK$ million) | % of Revenue | Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Group revenue | 1,934 | 100.0% | 1,903 | 100.0% | 1.6% | | Gross profit | 1,076 | 55.6% | 1,120 | 58.9% | (3.9%) | | Other income and other gains, net | 49 | 2.6% | 24 | 1.2% | 104.2% | | Operating expenses | (946) | (48.9%) | (942) | (49.5%) | 0.4% | | Operating profit | 179 | 9.3% | 202 | 10.6% | (11.4%) | | Profit after tax attributable to shareholders | 121 | 6.3% | 120 | 6.3% | 0.8% | | Group same-store sales | 1,447 | | 1,431 | | 1.1% | | Closing inventory | 513 | | 514 | | (0.2%) | | Inventory turnover days | 108 | | 119 | | (11) | | Number of stores at period end | 1,668 | | 1,774 | | (106) | - Excluding the adverse impact of the non-Giordano brand in Indonesia, the Group's revenue would have grown by **3.8%**, and profit attributable to shareholders would have reached **HK$146 million**[30](index=30&type=chunk)[33](index=33&type=chunk) [Revenue and Gross Profit Analysis](index=15&type=section&id=Revenue%20and%20Gross%20Profit%20Analysis) Revenue grew 1.6% with a 1.1% rise in same-store sales, while gross margin declined due to channel mix and inventory clearance - The Group's revenue grew by **1.6%** with a **1.1%** increase in same-store sales, demonstrating the resilience of its business model[32](index=32&type=chunk) - Revenue in Greater China grew by **9.5%**, primarily driven by online business expansion under the "Digital First" strategy[33](index=33&type=chunk) - Online sales surged by **26.1%**, accelerating to 32.3% in Q2, largely due to the success of the "Digital First" strategy in Mainland China[35](index=35&type=chunk) - Wholesale channel revenue grew by **20.2%**, driven by strong demand in franchise markets, particularly the Philippines[35](index=35&type=chunk) - Gross profit margin decreased by **3.3 percentage points to 55.6%**, mainly due to a higher mix of online and wholesale business, strategic clearance, and rising merchandise costs[38](index=38&type=chunk) Revenue Analysis (For the six months ended June 30) | Category | 2025 (HK$ million) | Contribution (%) | 2024 (HK$ million) | Contribution (%) | Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | **By Market** | | | | | | | Greater China | 878 | 45.4% | 802 | 42.1% | 9.5% | | Southeast Asia & Australia | 688 | 35.6% | 739 | 38.9% | (6.9%) | | GCC | 368 | 19.0% | 362 | 19.0% | 1.7% | | **By Channel** | | | | | | | Offline business | 1,416 | 73.2% | 1,483 | 77.9% | (4.5%) | | Online business | 280 | 14.5% | 222 | 11.7% | 26.1% | | Total retail | 1,696 | 87.7% | 1,705 | 89.6% | (0.5%) | | Total wholesale to franchisees | 238 | 12.3% | 198 | 10.4% | 20.2% | [Other Income and Other Gains, Net](index=17&type=section&id=Other%20Income%20and%20Other%20Gains%2C%20Net) Net other income and gains increased significantly, primarily driven by higher foreign exchange gains - The increase in net other income and other gains was mainly due to an increase in foreign exchange gains[40](index=40&type=chunk) [Operating Expenses and Operating Profit](index=17&type=section&id=Operating%20Expenses%20and%20Operating%20Profit) Operating expenses as a percentage of revenue improved, though operating profit declined to HK$179 million - Operating expenses as a percentage of revenue decreased by **0.6 percentage points to 48.9%**, reflecting strict and effective cost management[41](index=41&type=chunk) - Operating profit was **HK$179 million** with an operating margin of **9.3%**, a year-on-year decrease of 11.4%[42](index=42&type=chunk) - Excluding the impact of the non-Giordano brand in Indonesia, the core brand's operating profit would have been **HK$185 million**, with an operating margin of **10.2%**[42](index=42&type=chunk) [Net Impairment Loss](index=18&type=section&id=Net%20Impairment%20Loss) The Group recognized a net impairment provision of HK$2 million for right-of-use assets and equipment - The Group made a net impairment provision of **HK$2 million** for right-of-use assets and property, plant and equipment during the period[43](index=43&type=chunk) [Finance Costs](index=18&type=section&id=Finance%20Costs_MDA) Finance costs of HK$23 million were primarily attributable to imputed interest on lease liabilities - Finance costs were **HK$23 million** (2024: HK$22 million), mainly comprising imputed interest on lease liabilities[44](index=44&type=chunk) [Profit Attributable to Shareholders](index=18&type=section&id=Profit%20Attributable%20to%20Shareholders) Profit attributable to shareholders remained stable at HK$121 million, with a lower effective tax rate - Profit after tax attributable to shareholders was **HK$121 million**, remaining stable compared to the previous year[45](index=45&type=chunk) - Had the profitability of the non-Giordano brand in Indonesia and the South Korea joint venture remained at last year's levels, attributable profit would have reached **HK$146 million**[45](index=45&type=chunk) - The effective tax rate decreased to **14.7%**, mainly due to a favorable shift in the tax regime mix and the reversal of tax provisions[46](index=46&type=chunk) [Market Analysis](index=19&type=section&id=Market%20Analysis) Greater China revenue grew 4.2%, driven by online initiatives, while Southeast Asia declined due to non-core brand performance [Greater China](index=19&type=section&id=Greater%20China) Greater China revenue grew 4.2% year-on-year, with robust same-store sales growth of 6.2% - Revenue in Greater China grew by **4.2%** year-on-year, with strong Q2 growth of **6.9%** and robust same-store sales growth of **6.2%**[59](index=59&type=chunk) [Hong Kong and Macau](index=19&type=section&id=Hong%20Kong%20and%20Macau) The Hong Kong and Macau market saw a significant recovery in the second quarter, driven by a successful "Minions" collaboration - The Hong Kong and Macau market saw a **2.2%** positive revenue growth in Q2, reversing the Q1 decline, primarily driven by the "Minions" collaboration[50](index=50&type=chunk) - H1 revenue saw a slight decline of **2.2%**, outperforming the overall apparel retail sales performance announced by the HKSAR Government[50](index=50&type=chunk) - The Giordano Ladies brand will be transformed into a more modern, relaxed "Refined Elegance" style, with a new store opening in Causeway Bay[52](index=52&type=chunk) [Mainland China](index=20&type=section&id=Mainland%20China) Total revenue in Mainland China grew 13.0%, driven by significant online business growth of approximately 30.0% - Total revenue in Mainland China grew by **13.0%**, with Q2 growth near **18.0%**, and the online business achieved significant year-on-year growth of approximately **30.0%**[53](index=53&type=chunk) - Gross profit margin improved significantly, increasing by nearly **12 percentage points** quarter-on-quarter, closely tied to the "Digital First" strategy[54](index=54&type=chunk) - Offline same-store sales were nearly flat in Q2, as the restructuring plan focused on Southern China and closed loss-making stores[55](index=55&type=chunk) [Taiwan](index=22&type=section&id=Taiwan) Taiwan's revenue saw a low single-digit decline, though the online channel grew by 18.2% - The Taiwan market recorded a low single-digit percentage decline in revenue, but the online channel grew by **18.2%** year-on-year[57](index=57&type=chunk) Greater China Revenue and Store Statistics (For the six months ended June 30, at constant exchange rates) | Region | 2025 Revenue (HK$ million) | 2024 Revenue (HK$ million) | Change (%) | 2025 Closing Stores | 2024 Closing Stores | | :--- | :--- | :--- | :--- | :--- | :--- | | Mainland China | 339 | 300 | 13.0% | 359 | 454 | | Taiwan | 200 | 206 | (2.9%) | 163 | 161 | | Hong Kong & Macau | 177 | 181 | (2.2%) | 50 | 41 | | **Total** | **716** | **687** | **4.2%** | **572** | **656** | Greater China Profit Before Tax (For the six months ended June 30, at constant exchange rates) | Indicator | 2025 (HK$ million) | % of Revenue | 2024 (HK$ million) | % of Revenue | Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | 716 | 100.0% | 687 | 100.0% | 4.2% | | Gross profit | 401 | 56.0% | 404 | 58.8% | (0.7%) | | Operating profit | 7 | 1.0% | 23 | 3.4% | (69.6%) | | Profit before tax | 2 | 0.3% | 19 | 2.8% | (89.5%) | [Southeast Asia and Australia](index=23&type=section&id=Southeast%20Asia%20and%20Australia) Revenue in this region declined by 8.0%, primarily due to the weak performance of non-Giordano brands in Indonesia - The region's revenue decreased by **8.0%**, mainly due to weak performance in the Indonesian business, particularly non-Giordano brands; excluding this impact, the decline was limited to **4.6%**[61](index=61&type=chunk) - The e-commerce channel in Southeast Asia (excluding non-Giordano brands) showed strong performance, achieving nearly **42.0%** year-on-year growth[62](index=62&type=chunk) Southeast Asia and Australia Profit Before Tax (For the six months ended June 30, at constant exchange rates) | Indicator | 2025 (HK$ million) | % of Revenue | 2024 (HK$ million) | % of Revenue | Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | 680 | 100.0% | 739 | 100.0% | (8.0%) | | Gross profit | 389 | 57.2% | 450 | 60.9% | (13.6%) | | Operating profit | 84 | 12.3% | 133 | 18.0% | (36.8%) | | Profit before tax | 73 | 10.7% | 122 | 16.5% | (40.2%) | Southeast Asia and Australia Revenue and Store Statistics (For the six months ended June 30, at constant exchange rates) | Region | 2025 Revenue (HK$ million) | 2024 Revenue (HK$ million) | Change (%) | 2025 Closing Stores | 2024 Closing Stores | | :--- | :--- | :--- | :--- | :--- | :--- | | Indonesia | 342 | 382 | (10.5%) | 199 | 231 | | Thailand | 116 | 127 | (8.7%) | 154 | 157 | | Singapore | 105 | 100 | 5.0% | 31 | 30 | | Malaysia | 78 | 84 | (7.1%) | 84 | 87 | | Vietnam | 30 | 34 | (11.8%) | 28 | 35 | | Australia | 7 | 10 | (30.0%) | 3 | 5 | | Cambodia | 2 | 2 | Flat | 2 | 2 | | **Total** | **680** | **739** | **(8.0%)** | **501** | **547** | [GCC](index=25&type=section&id=GCC) The GCC business achieved 1.9% revenue growth and maintained stable profitability despite geopolitical tensions - The GCC business achieved **1.9%** year-on-year revenue growth, with online sales surging by **33.3%**[64](index=64&type=chunk)[65](index=65&type=chunk) GCC Profit Before Tax and Store Statistics (For the six months ended June 30, at constant exchange rates) | Indicator | 2025 (HK$ million) | % of Revenue | 2024 (HK$ million) | % of Revenue | Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | 369 | 100.0% | 362 | 100.0% | 1.9% | | Gross profit | 233 | 63.2% | 233 | 64.3% | Flat | | Operating profit | 73 | 19.8% | 76 | 21.0% | (3.9%) | | Profit before tax | 67 | 18.2% | 69 | 19.1% | (2.9%) | | Closing stores | 186 | | 179 | | 7 | [South Korea Joint Venture](index=26&type=section&id=South%20Korea%20Joint%20Venture) The South Korea joint venture faced challenges, resulting in a share of loss due to a weak economy and intense competition - The South Korea joint venture faced challenges, resulting in a share of loss due to a weak economy and intense competition[66](index=66&type=chunk) - The Group is actively collaborating with stakeholders and leveraging expertise from its Korean operations, successfully launching a Korean collection in Mainland China and Hong Kong[67](index=67&type=chunk) South Korea Share of Net (Loss) Profit and Store Statistics (For the six months ended June 30, in KRW million) | Indicator | 2025 | % of Revenue | 2024 | % of Revenue | Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | 65,545 | 100.0% | 77,640 | 100.0% | (15.6%) | | Gross profit | 33,884 | 51.7% | 41,936 | 54.0% | (19.2%) | | Net (loss) profit | (139) | (0.2%) | 5,486 | 7.1% | (102.5%) | | Share of net (loss) profit | (67) | | 2,662 | | (102.5%) | | Closing stores | 114 | | 115 | | (1) | [Overseas Franchisees and Licensees](index=27&type=section&id=Overseas%20Franchisees%20and%20Licensees) The overseas franchisee network achieved substantial growth, with wholesale revenue increasing by nearly 34.0% - Wholesale revenue from overseas franchisees and licensees surged by nearly **34.0%** year-on-year, with particularly strong performance in the Philippines[68](index=68&type=chunk) - Store count is expected to increase, especially in high-potential emerging markets like Africa and South Asia[69](index=69&type=chunk) Overseas Franchisee Closing Store Statistics | Region | 2025 Closing Stores | 2024 Closing Stores | | :--- | :--- | :--- | | Southeast Asia | 185 | 183 | | South Korea | 114 | 115 | | South Asia | 103 | 89 | | Africa | 29 | 26 | | Other Markets | 22 | 20 | | **Total** | **453** | **433** | [Financial Position](index=28&type=section&id=Financial%20Position) The Group maintains a solid financial position with increased net cash, a low gearing ratio, and improved inventory management [Liquidity and Financial Resources](index=28&type=section&id=Liquidity%20and%20Financial%20Resources) The Group's net cash and bank balances increased to HK$722 million, indicating continued financial stability - Cash and bank balances, net of bank loans, increased year-on-year to **HK$722 million**, demonstrating continued financial stability[70](index=70&type=chunk) - The gearing ratio was **1.2%** (2024: 1.3%) and the current ratio was **1.6** (2024: 1.5), indicating a solid financial position[70](index=70&type=chunk) [Property, Plant and Equipment](index=28&type=section&id=Property%2C%20Plant%20and%20Equipment) Capital expenditure for the period was HK$33 million, primarily for store upgrades and relocations - Capital expenditure for the period was **HK$33 million** (2024: HK$27 million), mainly for store upgrades and relocations[71](index=71&type=chunk) [Goodwill and Put Option Liabilities Granted](index=28&type=section&id=Goodwill%20and%20Put%20Option%20Liabilities%20Granted) Goodwill from the GCC acquisitions was tested for impairment with no impairment recognized - Goodwill and put option liabilities arose from the 2012 and 2015 acquisitions of the GCC business, and it has been confirmed that no goodwill impairment occurred[72](index=72&type=chunk) [Interest in South Korea Joint Venture](index=28&type=section&id=Interest%20in%20South%20Korea%20Joint%20Venture) The carrying value of the South Korea joint venture decreased by 5.2% to HK$417 million - The carrying value of the South Korea joint venture decreased by **5.2% to HK$417 million**, mainly due to fluctuations in the Korean Won and dividend income[73](index=73&type=chunk) [Inventory Management](index=29&type=section&id=Inventory%20Management) Inventory turnover days improved significantly by 11 days to 108 days, reflecting more effective inventory management - Inventory turnover days improved significantly, decreasing by **11 days to 108 days**, highlighting a commitment to more effective inventory management[74](index=74&type=chunk) - Strategic price promotions successfully cleared aged inventory from previous years, aligning the inventory mix with current consumer preferences[74](index=74&type=chunk) System Inventory (As at June 30) | Item | 2025 (HK$ million) | 2024 (HK$ million) | | :--- | :--- | :--- | | Inventory owned by the Group | 513 | 514 | | Inventory held by the 48.5%-owned South Korea joint venture | 293 | 181 | | Inventory held by Mainland China franchisees | 34 | 34 | | Finished goods at suppliers | 6 | 11 | | Total inventory not owned by the Group | 333 | 226 | | **Total system inventory** | **846** | **740** | [Trade and Other Receivables and Payables](index=29&type=section&id=Trade%20and%20Other%20Receivables%20and%20Payables_MDA) Receivable and payable turnover days were 46 and 45 days, respectively - Trade receivable and payable turnover days were **46 days** (2024: 38 days) and **45 days** (2024: 45 days), respectively[77](index=77&type=chunk) - The increase in trade payables was mainly due to the early receipt of Autumn/Winter merchandise scheduled for a July launch, causing a timing difference in payments[77](index=77&type=chunk) [Outlook and Strategy](index=30&type=section&id=Outlook%20and%20Strategy) ["Beyond Boundaries" Five-Year Strategy](index=30&type=section&id=Beyond%20Boundaries%20Five-Year%20Strategy) The Group is embarking on a new chapter guided by its "Beyond Boundaries" five-year strategy to become a growth company again - The "Beyond Boundaries" five-year strategy is the Group's "North Star," aiming to reset, reallocate, and revitalize the business to become a growth company again[78](index=78&type=chunk) - 2025 is a year of reset, laying the foundation for the next phase of sustainable growth with a focus on product excellence, operational agility, and customer centricity[79](index=79&type=chunk) [Revitalizing Brand Portfolio](index=30&type=section&id=Revitalizing%20Brand%20Portfolio) The strategy focuses on Giordano products, optimizing the product lifecycle and launching the new Giordano Concepts (GC) brand - The focus is on Giordano-branded products, optimizing design, development, sourcing, and delivery, and using advanced analytics to enhance supply chain responsiveness[80](index=80&type=chunk) - The new brand, Giordano Concepts (GC), targeting young, tech-savvy female consumers aged 20-35, will be launched online in Mainland China in September[82](index=82&type=chunk) - Giordano Ladies will be transformed into a more modern, relaxed "Refined Elegance" style, leveraging Giordano Korea as a brand ambassador to build its image for female consumers[83](index=83&type=chunk) [Digital First](index=31&type=section&id=Digital%20First) The Group will accelerate its digitalization journey to meet the needs of a younger, digitally native generation - The digitalization journey will be accelerated by developing products for Tmall and Douyin, and launching the Giordano Ladies collection and GC brand to connect with Gen Z and Millennials[84](index=84&type=chunk) - Digital tools and data-driven processes, including AI-powered demand forecasting and personalized marketing, will be embedded into daily operations to create an omnichannel ecosystem[85](index=85&type=chunk) [Win in Greater China](index=32&type=section&id=Win%20in%20Greater%20China) Greater China is identified as a "must-win" strategic market, with a two-pronged approach for Mainland China - Greater China is considered a "must-win" strategic market, with a two-pronged restructuring plan for Mainland China[86](index=86&type=chunk) - The plan will accelerate the e-commerce business, focusing on product development for Tmall and Douyin to achieve positive growth and profitability[89](index=89&type=chunk) - The physical retail business will be restructured by closing loss-making stores and focusing on Southern China with increased brand investment, resulting in nearly flat comparable store sales in Q2[89](index=89&type=chunk) - Hong Kong will serve as a model city to pilot new products and concepts, with positive progress seen in Q2[86](index=86&type=chunk) [One Giordano](index=32&type=section&id=One%20Giordano) "One Giordano" aims to establish a centralized creation and planning model with excellent in-market execution - "One Giordano" aims to establish a headquarters and market operating model where creation and planning are centralized for excellent in-market execution[87](index=87&type=chunk) - The organizational structure will be reshaped from a traditional regional silo model to a more agile matrix model to enhance cross-functional team capabilities[88](index=88&type=chunk) - Back-end operations will be streamlined, supply chain and sourcing functions rebuilt, and investments made in employee training to foster a culture of agility and collaboration[88](index=88&type=chunk) [Reshaping the Organization and Transformation](index=32&type=section&id=Reshaping%20the%20Organization%20and%20Transformation) The transformation focuses on fostering a culture of agility, collaboration, and continuous learning under new management - The organizational structure is shifting from a traditional regional silo model to a more agile matrix model to enhance cross-functional capabilities and accelerate decision-making[88](index=88&type=chunk) - Back-end operations are being streamlined, supply chain and sourcing functions rebuilt, and investments made in employee training to foster a culture of agility and collaboration[88](index=88&type=chunk) - The goal for 2025 is to sow the seeds by investing in systems, capabilities, and culture to set the stage for Giordano to thrive in the years to come[91](index=91&type=chunk) [Shared Vision](index=33&type=section&id=Shared%20Vision) The Group is confident in its future, aiming to inspire customer confidence through excellent products and memorable experiences - The Group's purpose remains constant: to inspire customers' confidence and self-expression through excellent products and memorable experiences[92](index=92&type=chunk) - With a clear vision, a robust strategy, and a passionate team, Giordano is ready for its next phase of growth, turning challenges into opportunities[92](index=92&type=chunk) [Other Information](index=34&type=section&id=Other%20Information) [Human Resources](index=34&type=section&id=Human%20Resources) As of June 30, 2025, the Group employed approximately 6,500 staff and invested heavily in training and development - As of June 30, 2025, the Group had approximately **6,500** employees[94](index=94&type=chunk) - The Group offers competitive remuneration, target-based bonuses, performance-based incentive schemes, and share options to reward and retain its high-caliber leadership team[94](index=94&type=chunk) - Significant investments are made in training for sales and customer service, management, planning, and leadership development[94](index=94&type=chunk) [Interim Dividend Policy and Distribution](index=34&type=section&id=Interim%20Dividend%20Policy%20and%20Distribution) The Board declared an interim dividend of 7.5 HK cents per share, payable on October 3, 2025 - The Board declared an interim dividend of **7.5 HK cents** per share for the six months ended June 30, 2025 (2024: 8.0 HK cents per share)[95](index=95&type=chunk) - The dividend will be paid on October 3, 2025, to shareholders on the register as of September 19, 2025[95](index=95&type=chunk) - The register of members will be closed from September 18, 2025, to September 19, 2025, to determine entitlement to the interim dividend[96](index=96&type=chunk) [Corporate Governance](index=35&type=section&id=Corporate%20Governance) The Company complied with the Corporate Governance Code, with an exception for the rotation of the Chairman and Managing Director - During the review period, the Company complied with all applicable provisions of the Corporate Governance Code, except for code provision B.2.2 (rotation of directors)[97](index=97&type=chunk) - The Board believes that continuity in the roles of the Chairman and Managing Director is beneficial to the Group, thus exempting them from retirement by rotation[97](index=97&type=chunk) - The Company has adopted a code of conduct for securities transactions by directors and confirmed that all directors have complied[98](index=98&type=chunk) [Securities Transactions and Buybacks](index=35&type=section&id=Securities%20Transactions%20and%20Buybacks) No purchase, sale, or redemption of the Company's listed securities was made by the Group during the period - During the six months ended June 30, 2025, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[99](index=99&type=chunk) [Review of Interim Results](index=36&type=section&id=Review%20of%20Interim%20Results) The unaudited interim financial information has been reviewed by PricewaterhouseCoopers and the Audit Committee - The Group's interim financial information has been reviewed by PricewaterhouseCoopers in accordance with Hong Kong Standard on Review Engagements 2410[100](index=100&type=chunk) - The Audit Committee has reviewed accounting principles, risk management, internal control systems, and financial reporting matters, and has reviewed the interim results with management[100](index=100&type=chunk)

[Executive Summary](index=1&type=section&id=Executive%20Summary) [Summary of Interim Results Announcement](index=1&type=section&id=Summary%20of%20Interim%20Results%20Announcement) Kangda International Environmental Protection Co., Ltd. announced its unaudited interim results for the six months ended June 30, 2025, with revenue up 4.6%, gross profit margin at 50.3%, and record operating cash flow, despite a 4.7% decline in net profit attributable to owners due to disposal losses and impairment, with no interim dividend recommended Key Financial Highlights | Metric | June 30, 2025 (RMB million) | June 30, 2024 (RMB million) | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 1,166.5 | 1,115.5 | +4.6% | | Gross Profit | 587.3 | 544.5 | +7.9% | | Gross Profit Margin | 50.3% | 48.8% | +1.5 percentage points | | Finance Costs | 232.7 | 274.2 | -15.1% | | Profit Attributable to Owners of the Parent | 103.4 | 108.6 | -4.7% | | Basic Earnings Per Share | 4.83 cents | 5.08 cents | -4.9% | | Net Cash Inflow from Operating Activities | 394.2 | 160.9 | +145.0% | - Revenue growth was primarily driven by an increase in construction service revenue[4](index=4&type=chunk) - The increase in gross profit margin was mainly attributable to effective cost-saving measures[4](index=4&type=chunk) - The decrease in finance costs was primarily due to lower benchmark interest rates and a reduction in the average loan balance[4](index=4&type=chunk) - The decline in net profit attributable to owners was mainly impacted by a one-off loss and impairment of approximately **RMB 67.5 million** from the disposal of subsidiaries[4](index=4&type=chunk) - Net cash inflow from operating activities reached a record interim high since the Group's listing in 2014[4](index=4&type=chunk) - The Board does not recommend an interim dividend for the six months ended June 30, 2025[4](index=4&type=chunk) [Financial Statements](index=2&type=section&id=Financial%20Statements) [Interim Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=2&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For the six months ended June 30, 2025, the company's revenue increased by **4.6%** to **RMB 1,166.5 million**, gross profit grew by **7.9%** to **RMB 587.3 million**, and gross profit margin improved to **50.3%**, while net profit attributable to owners decreased by **4.7%** to **RMB 103.4 million** due to disposal losses and impairment, despite a **15.1%** reduction in finance costs Interim Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income | Metric (RMB thousand) | June 30, 2025 (Unaudited) | June 30, 2024 (Unaudited) | | :--- | :--- | :--- | | Revenue | 1,166,493 | 1,115,511 | | Cost of sales | (579,227) | (571,040) | | Gross profit | 587,266 | 544,471 | | Other income and gains | 38,097 | 38,387 | | Selling and distribution expenses | (693) | (476) | | Administrative expenses | (121,716) | (132,844) | | Other expenses | (97,033) | (20,440) | | Finance costs | (232,687) | (274,221) | | Profit before tax | 169,989 | 153,297 | | Income tax expense | (62,594) | (47,198) | | Profit for the period | 107,395 | 106,099 | | Profit attributable to owners of the parent | 103,441 | 108,597 | | Non-controlling interests | 3,954 | (2,498) | | Basic earnings per share (RMB cents) | 4.83 | 5.08 | | Diluted earnings per share (RMB cents) | 4.81 | 5.08 | - Total other comprehensive income for the period was **RMB 111,645 thousand**, primarily comprising fair value changes of equity investments designated at fair value through other comprehensive income[7](index=7&type=chunk) [Interim Condensed Consolidated Statement of Financial Position](index=4&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the company's total assets slightly increased, with total non-current assets reaching **RMB 12,139.7 million** and total current assets reaching **RMB 7,014.3 million**, while total current and non-current liabilities slightly reduced, leading to an increase in net assets to **RMB 6,130.2 million**, reflecting a sound financial position Interim Condensed Consolidated Statement of Financial Position | Metric (RMB thousand) | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :--- | :--- | :--- | | **ASSETS** | | | | Total non-current assets | 12,139,651 | 11,909,214 | | Total current assets | 7,014,275 | 7,145,789 | | **LIABILITIES** | | | | Total current liabilities | 5,164,337 | 5,302,629 | | Total non-current liabilities | 7,760,504 | 7,831,452 | | **EQUITY** | | | | Net assets | 6,130,162 | 6,019,845 | | Total equity | 6,130,162 | 6,019,845 | - Financial receivables (non-current portion) increased from **RMB 9,631,996 thousand** as of December 31, 2024, to **RMB 9,688,655 thousand** as of June 30, 2025[9](index=9&type=chunk) - Contract assets (non-current portion) increased from **RMB 242,455 thousand** as of December 31, 2024, to **RMB 492,730 thousand** as of June 30, 2025[9](index=9&type=chunk) - Interest-bearing bank and other borrowings (current portion) increased from **RMB 2,961,204 thousand** as of December 31, 2024, to **RMB 3,057,445 thousand** as of June 30, 2025[10](index=10&type=chunk) [Notes to the Financial Statements](index=6&type=section&id=Notes%20to%20the%20Interim%20Condensed%20Consolidated%20Financial%20Information) [Company and Group Information](index=6&type=section&id=1.%20Company%20and%20Group%20Information) Kangda International Environmental Protection Co., Ltd. was incorporated in the Cayman Islands and listed on the Hong Kong Stock Exchange in 2014, primarily engaging in the design, construction, operation, and maintenance of various water and wastewater treatment facilities and other municipal infrastructure in mainland China - The company was incorporated in the Cayman Islands and listed on the Main Board of the Hong Kong Stock Exchange on July 4, 2014[11](index=11&type=chunk) - Its principal activities include the design, construction, operation, and maintenance of wastewater treatment plants, reclaimed water treatment plants, water supply plants, sludge treatment plants, and other municipal infrastructure[12](index=12&type=chunk) [Basis of Preparation and Changes in Accounting Policies](index=6&type=section&id=2.%20Basis%20of%20Preparation%20and%20Changes%20in%20the%20Group's%20Accounting%20Policies) The interim condensed consolidated financial information is prepared in accordance with International Accounting Standard 34 'Interim Financial Reporting' and the Hong Kong Stock Exchange Listing Rules, presented under the historical cost convention, except for equity investments designated at fair value through other comprehensive income, with no significant impact from newly adopted revised IFRS this period - The financial information is prepared in accordance with International Accounting Standard 34 'Interim Financial Reporting' and the Hong Kong Stock Exchange Listing Rules[13](index=13&type=chunk) - The financial information is prepared on a historical cost basis, presented in RMB, with all values rounded to the nearest thousand[14](index=14&type=chunk) - Amendments to IAS 21 'Lack of Exchangeability' had no impact on the Group's interim condensed consolidated financial information, as both the Group's transaction and functional currencies are exchangeable[16](index=16&type=chunk) [Operating Segment Information](index=8&type=section&id=3.%20Operating%20Segment%20Information) The Group's operating segments include urban water services, integrated water environment management, and rural wastewater treatment, with urban water services being the primary revenue source and contributor to segment results, while integrated water environment management revenue grew and rural wastewater treatment revenue declined, and management allocates resources and assesses performance based on each segment's results - The Group's operating segments include urban water services, integrated water environment management, and rural wastewater treatment[19](index=19&type=chunk) Segment Revenue for the Six Months Ended June 30, 2025 (RMB thousand) | Segment | Revenue | | :--- | :--- | | Urban Water Services | 1,136,702 | | Integrated Water Environment Management | 15,749 | | Rural Wastewater Treatment | 14,042 | | **Total** | **1,166,493** | Segment Results for the Six Months Ended June 30, 2025 (RMB thousand) | Segment | Results | | :--- | :--- | | Urban Water Services | 275,909 | | Integrated Water Environment Management | 13,078 | | Rural Wastewater Treatment | (6,440) | | **Total** | **282,547** | - The urban water services segment's total assets amounted to **RMB 16,664,933 thousand**, and total liabilities amounted to **RMB 12,160,792 thousand**[21](index=21&type=chunk) [Revenue](index=13&type=section&id=4.%20Revenue) For the six months ended June 30, 2025, the Group's total revenue was **RMB 1,166.5 million**, primarily comprising operating service revenue and construction service revenue, with construction service revenue significantly increasing while financial income from service concession arrangements slightly decreased Revenue by Category (RMB thousand) | Revenue Category | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Operating service revenue | 664,516 | 642,667 | | Construction service revenue | 143,189 | 100,177 | | Financial income from service concession arrangements | 358,788 | 372,667 | | **Total** | **1,166,493** | **1,115,511** | - Construction service revenue increased by **43.0%** year-on-year, operating service revenue increased by **3.4%** year-on-year, and financial income from service concession arrangements decreased by **3.7%** year-on-year[24](index=24&type=chunk) - All revenue is recognized over time and generated entirely within mainland China[24](index=24&type=chunk)[25](index=25&type=chunk) [Other Income and Gains](index=14&type=section&id=5.%20Other%20Income%20and%20Gains) For the six months ended June 30, 2025, total other income and gains amounted to **RMB 38.1 million**, largely consistent with the prior year, with key components including government grants, interest income from loans to third parties/associates/joint ventures, and other non-operating income Other Income and Gains (RMB thousand) | Category | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Government grants | 27,456 | 7,271 | | Interest income from loans to third parties | 5,385 | 8,704 | | Interest income from loans to joint ventures and associates | 988 | 985 | | Bank interest income | 462 | 1,137 | | Rental income less depreciation of investment properties | 290 | 267 | | Investment income | – | 1,432 | | Others | 3,542 | 18,565 | | **Total** | **38,097** | **38,387** | - Government grants primarily refer to VAT refunds and environmental protection funds, with some environmental protection funds recognized as deferred income[26](index=26&type=chunk) [Finance Costs](index=14&type=section&id=6.%20Finance%20Costs) For the six months ended June 30, 2025, finance costs were **RMB 232.7 million**, a significant year-on-year decrease of **15.1%**, primarily due to a reduction in interest on interest-bearing bank and other borrowings Finance Costs (RMB thousand) | Category | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Interest on interest-bearing bank and other borrowings | 232,657 | 274,161 | | Interest on lease liabilities | 30 | 60 | | **Total** | **232,687** | **274,221** | - The decrease in finance costs was mainly due to lower benchmark interest rates and a reduction in the average balance of interest-bearing bank and other borrowings[4](index=4&type=chunk)[62](index=62&type=chunk) [Profit Before Tax](index=15&type=section&id=7.%20Profit%20Before%20Tax) For the six months ended June 30, 2025, profit before tax was **RMB 169.99 million**, derived after deducting operating service costs, construction service costs, depreciation and amortization, losses from disposal of subsidiaries, and various impairment losses Components of Profit Before Tax (RMB thousand) | Category | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Operating service costs | 466,385 | 491,910 | | Construction service costs | 112,842 | 79,130 | | Total cost of sales | 579,227 | 571,040 | | Depreciation of property, plant and equipment | 2,428 | 2,665 | | Depreciation of investment properties | 309 | 309 | | Depreciation of right-of-use assets | 205 | 524 | | Amortization of intangible assets—concession rights | 55,459 | 64,178 | | Amortization of other intangible assets | 160 | 173 | | Loss on disposal of subsidiaries | 20,656 | – | | Impairment of financial receivables | 57,053 | 118 | | Impairment of trade receivables | 15,522 | 14,785 | | Exchange differences, net | 268 | 2,358 | - Loss on disposal of subsidiaries was **RMB 20,656 thousand**, which was the main reason for the significant increase in other expenses during the period[28](index=28&type=chunk)[61](index=61&type=chunk) - Impairment of financial receivables significantly increased to **RMB 57,053 thousand**[28](index=28&type=chunk) [Income Tax Expense](index=15&type=section&id=8.%20Income%20Tax%20Expense) For the six months ended June 30, 2025, total income tax expense was **RMB 62.6 million**, with an effective tax rate of approximately **37%**, an increase of **6 percentage points** from the prior year, primarily due to the combined impact of increased influence from lower tax rates enacted by specific provinces or local government authorities, increased impact from non-deductible expenses, and tax losses Income Tax Expense (RMB thousand) | Category | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Current — Mainland China | 30,757 | 20,242 | | Deferred | 31,837 | 26,956 | | **Income tax expense for the period** | **62,594** | **47,198** | - The Group had no assessable profits in Hong Kong, thus no provision for Hong Kong profits tax was made[29](index=29&type=chunk) - The increase in the effective tax rate was mainly due to the combined impact of increased influence from lower tax rates, increased impact from non-deductible expenses, and tax losses[64](index=64&type=chunk) [Earnings Per Share](index=16&type=section&id=9.%20Earnings%20Per%20Share%20Attributable%20to%20Ordinary%20Equity%20Holders%20of%20the%20Parent) For the six months ended June 30, 2025, basic earnings per share were **RMB 4.83 cents**, and diluted earnings per share were **RMB 4.81 cents**, both lower than the prior year, with calculations based on profit attributable to ordinary equity holders of the parent and the weighted average number of ordinary shares outstanding during the period Earnings Per Share (RMB thousand/share) | Metric | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Profit attributable to ordinary equity holders of the parent | 103,441 | 108,597 | | Weighted average number of ordinary shares outstanding during the period for basic and diluted EPS calculation | 2,139,735,000 | 2,139,735,000 | | Dilutive effect—share options | – | 8,613,703 | | **Total (diluted shares)** | **2,139,735,000** | **2,148,348,703** | - Both basic and diluted earnings per share decreased due to the decline in net profit attributable to owners of the parent[4](index=4&type=chunk)[5](index=5&type=chunk) [Financial Receivables](index=17&type=section&id=10.%20Financial%20Receivables) As of June 30, 2025, total financial receivables amounted to **RMB 11,681.9 million**, a slight increase from the end of 2024, primarily arising from service concession arrangements, with most pledged as collateral for borrowings Financial Receivables (RMB thousand) | Category | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :--- | :--- | :--- | | Receivables from service concession arrangements | 11,685,716 | 11,677,750 | | Impairment | (3,769) | (3,769) | | **Total** | **11,681,947** | **11,673,981** | | Portion classified as current assets | (1,993,292) | (2,041,985) | | **Non-current portion** | **9,688,655** | **9,631,996** | - Financial receivables primarily consist of amounts due from PRC government authorities, with no collateral or credit enhancement products[35](index=35&type=chunk) - As of June 30, 2025, **RMB 7,907.3 million** of financial receivables were pledged as collateral for borrowings[36](index=36&type=chunk) [Trade Receivables](index=18&type=section&id=11.%20Trade%20Receivables) As of June 30, 2025, total trade receivables amounted to **RMB 3,335.8 million**, an increase from the end of 2024, with the largest portion aged over 12 months, reflecting a longer collection cycle for some amounts Trade Receivables Ageing Analysis (RMB thousand) | Ageing | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :--- | :--- | :--- | | Within 3 months | 530,805 | 503,937 | | 4 to 6 months | 428,710 | 380,334 | | 7 to 12 months | 585,175 | 669,303 | | Over 12 months | 1,782,177 | 1,624,998 | | **Total** | **3,335,751** | **3,169,688** | - Trade receivables are non-interest bearing, and credit terms are considered on a case-by-case basis[37](index=37&type=chunk) [Trade Payables and Bills Payable](index=18&type=section&id=12.%20Trade%20Payables%20and%20Bills%20Payable) As of June 30, 2025, total trade payables and bills payable amounted to **RMB 1,859.7 million**, largely consistent with the end of 2024, with the largest portion aged over 12 months, indicating the presence of long-term payables Trade Payables and Bills Payable Ageing Analysis (RMB thousand) | Ageing | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :--- | :--- | :--- | | Within 3 months | 408,704 | 313,775 | | 4 to 6 months | 186,121 | 83,862 | | 7 to 12 months | 229,738 | 257,212 | | Over 12 months | 1,035,167 | 1,194,871 | | **Total** | **1,859,730** | **1,849,720** | | Portion classified as current liabilities | (1,859,541) | (1,849,716) | | **Non-current portion** | **189** | **4** | - Trade payables and bills payable are non-interest bearing, and credit terms are determined on a case-by-case basis[38](index=38&type=chunk) [Dividends](index=18&type=section&id=13.%20Dividends) The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025, consistent with the prior year - The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025[39](index=39&type=chunk) [Management Discussion and Analysis](index=19&type=section&id=Management%20Discussion%20and%20Analysis) [Industry Overview](index=19&type=section&id=Industry%20Overview) In the first half of 2025, Kangda International Environmental Protection adopted a prudent operating approach, enhancing profitability through energy saving, disposal of inefficient projects, and leveraging the downward interest rate cycle, resulting in revenue growth, improved gross profit margin and operating cash flow, despite a decrease in net profit attributable to owners due to one-off losses from project disposals, with the company's financial structure remaining robust and the current ratio reaching a new high in recent years - The company enhanced its profitability through energy saving, disposal of inefficient projects, and reduction of finance costs[40](index=40&type=chunk) - Total revenue increased by **4.6%** to **RMB 1,166.5 million**, and gross profit margin improved by **1.5 percentage points** to **50.3%**[41](index=41&type=chunk) - Finance costs significantly decreased by **15.1%** to **RMB 232.7 million**, with an average borrowing interest rate of **4.85%**, a year-on-year decrease of **0.68 percentage points**[41](index=41&type=chunk)[42](index=42&type=chunk) - Net profit attributable to owners decreased by **4.7%** to **RMB 103.4 million**, primarily impacted by one-off losses and provisions related to project disposals[41](index=41&type=chunk) - Net operating cash inflow was **RMB 394.2 million**, marking a record interim high since the company's listing[42](index=42&type=chunk) - Long-term borrowings accounted for **68.1%** of total borrowings, and the current ratio reached **1.38**, its best level since 2016[42](index=42&type=chunk) [Development Strategies and Future Outlook](index=20&type=section&id=Development%20Strategies%20and%20Future%20Outlook) Supported by national ecological environment policies, the Group will continue to deepen its presence in urban water services, enhancing profitability through upgrading standards, negotiating wastewater treatment price adjustments, vigorously collecting receivables, and seeking local government buybacks of inefficient projects, with future development focusing on urban water services and selective investment in value-added areas across the water industry value chain - National policies support technological innovation in the ecological environment sector and the construction of a Beautiful China, promoting the healthy development of the wastewater treatment industry[43](index=43&type=chunk) - The Group will enhance the profitability of existing projects through upgrading standards, expansion, and seeking reasonable adjustments to wastewater treatment prices[44](index=44&type=chunk) - The Group will vigorously collect receivables and actively seek buybacks of inefficient projects by local governments or government-related enterprises to reduce financial burdens[44](index=44&type=chunk) - Future development will continue to focus on urban water services, which generate stable cash flow, while selectively investing in value-added areas across the upstream and downstream water industry value chain[46](index=46&type=chunk) - As of June 30, 2025, the Group had **104** operating service concession arrangement projects, with an operating treatment capacity exceeding **4 million tons per day**[45](index=45&type=chunk) [Business Segment Performance](index=22&type=section&id=Business%20Segment%20Performance) The Group's business primarily focuses on urban water services, supplemented by integrated water environment management and rural wastewater treatment, with urban water services projects and treatment capacity continuing to grow, leading to increased operating revenue, while integrated water environment management revenue increased and rural wastewater treatment project revenue decreased due to reduced construction work [Urban Water Services](index=22&type=section&id=1.1%20Urban%20Water%20Services) As of June 30, 2025, the Group had entered into **107** service concession arrangement projects, including **101** wastewater treatment plants, with a total operating capacity of **4,059,500 tons/day** and an annual utilization rate of approximately **81%**, resulting in a **5%** year-on-year increase in total operating revenue from urban water services due to more upgraded projects in operation, and a **51%** year-on-year increase in construction revenue driven by new upgrading projects - As of June 30, 2025, the Group had entered into **107** service concession arrangement projects, including **101** wastewater treatment plants, **1** water supply plant, **3** sludge treatment plants, and **2** reclaimed water treatment plants[47](index=47&type=chunk)[48](index=48&type=chunk) Urban Water Services Project Treatment Capacity (tons/day) | Category | In operation | Not yet commenced operation/not yet handed over | Total | | :--- | :--- | :--- | :--- | | Wastewater treatment | 4,059,500 | 80,500 | 4,140,000 | | Water supply | – | 30,000 | 30,000 | | Reclaimed water treatment | 65,000 | – | 65,000 | | Sludge treatment | 550 | – | 550 | | **Total** | **4,125,050** | **110,500** | **4,235,550** | - For the six months ended June 30, 2025, the actual total treatment volume was **595.0 million tons**, a year-on-year decrease of **5%** (2024: **624.1 million tons**)[50](index=50&type=chunk) - The actual average water treatment fee was approximately **RMB 1.63 per ton** (2024: approximately **RMB 1.60 per ton**)[50](index=50&type=chunk) - Total operating revenue from urban water services was **RMB 649.8 million**, an increase of approximately **5%** year-on-year, mainly due to an increase in operating projects with upgraded standards[51](index=51&type=chunk) - Construction revenue was **RMB 133.7 million**, an increase of approximately **51%** year-on-year, primarily due to increased construction work for new upgrading projects[53](index=53&type=chunk) [Integrated Water Environment Management](index=26&type=section&id=1.2%20Integrated%20Water%20Environment%20Management) The Group continued to execute existing integrated water environment management projects, focusing on risk reduction and achieving reasonable profits, with total revenue from this segment reaching **RMB 15.7 million** for the six months ended June 30, 2025, an increase of approximately **14%** year-on-year, primarily benefiting from the execution of newly signed EPC projects - The Group has **5** integrated water environment management projects under construction, primarily located in Jiangxi Province and Henan Province[54](index=54&type=chunk) - Total revenue was **RMB 15.7 million**, an increase of approximately **14%** year-on-year (2024: **RMB 13.8 million**), mainly due to the execution of newly signed EPC projects[54](index=54&type=chunk) [Rural Wastewater Treatment](index=26&type=section&id=1.3%20Rural%20Wastewater%20Treatment) For the six months ended June 30, 2025, the Group had **2** rural wastewater treatment projects in Guangdong Province, with total revenue from this segment at **RMB 14.0 million**, a year-on-year decrease of approximately **42%**, primarily due to reduced construction service revenue, partially offset by increased operating revenue from projects in operation - The Group has **2** rural wastewater treatment projects located in Guangdong Province[55](index=55&type=chunk) - Total revenue was **RMB 14.0 million**, a year-on-year decrease of approximately **42%** (2024: **RMB 24.1 million**)[55](index=55&type=chunk) - The decrease in revenue was mainly due to the net effect of reduced construction service revenue and increased operating revenue from projects in operation[55](index=55&type=chunk) [Financial Performance Analysis](index=27&type=section&id=Financial%20Performance%20Analysis) During the reporting period, the Group achieved growth in both revenue and gross profit, with an improved gross profit margin, reflecting the effectiveness of cost control measures, while finance costs significantly decreased, but net profit was pressured by losses from the disposal of subsidiaries, and income tax expense increased, with the effective tax rate rising [Revenue](index=27&type=section&id=Revenue) For the six months ended June 30, 2025, the Group's revenue was **RMB 1,166.5 million**, an increase of approximately **5%** year-on-year, primarily driven by increased construction and operating revenue, partially offset by a decrease in financial income from service concession arrangements - The increase in revenue was mainly due to an increase of **RMB 43.0 million** in construction revenue and **RMB 21.9 million** in operating revenue[56](index=56&type=chunk) - Financial income from service concession arrangements decreased by **RMB 13.9 million**, primarily due to a reduction in financial assets[56](index=56&type=chunk) [Cost of Sales](index=27&type=section&id=Cost%20of%20Sales) For the six months ended June 30, 2025, cost of sales was **RMB 579.2 million**, a slight increase, with the rise in construction costs consistent with the growth in construction revenue, while operating costs decreased due to reduced total treatment volume and energy-saving measures - Cost of sales slightly increased by **RMB 8.2 million**, with construction costs increasing by **RMB 33.7 million** and operating costs decreasing by **RMB 25.5 million**[57](index=57&type=chunk) - The decrease in operating costs was mainly due to a reduction in actual total treatment volume and the implementation of various energy-saving measures[57](index=57&type=chunk) [Gross Profit Margin](index=27&type=section&id=Gross%20Profit%20Margin) For the six months ended June 30, 2025, the Group's gross profit margin was approximately **50%**, an increase of **1 percentage point** from the prior year, primarily benefiting from an improved operating gross profit margin - Gross profit margin increased by **1 percentage point** to **50%**, mainly due to an improvement in operating gross profit margin during the period[58](index=58&type=chunk) [Other Income and Gains](index=28&type=section&id=Other%20Income%20and%20Gains) For the six months ended June 30, 2025, other income and gains amounted to **RMB 38.1 million**, largely consistent with the prior year, primarily including government grants, loan interest income, and other non-operating income - This primarily includes government grants of **RMB 27.5 million**, loan interest income of **RMB 6.4 million**, and other non-operating income of **RMB 3.5 million**[59](index=59&type=chunk) [Administrative Expenses](index=28&type=section&id=Administrative%20Expenses) For the six months ended June 30, 2025, administrative expenses were **RMB 121.7 million**, a year-on-year decrease of approximately **8%**, primarily due to reduced professional fees - Administrative expenses decreased by approximately **8%**, mainly due to a reduction in professional fees[60](index=60&type=chunk) [Other Expenses](index=28&type=section&id=Other%20Expenses) For the six months ended June 30, 2025, other expenses were **RMB 97.0 million**, a significant year-on-year increase, primarily due to increased losses from the disposal of subsidiaries, non-operating expenses, and impairment losses, partially offset by reduced exchange losses - Other expenses significantly increased, mainly due to increased losses from the disposal of subsidiaries, non-operating expenses, and impairment losses[61](index=61&type=chunk) [Finance Costs](index=28&type=section&id=Finance%20Costs) For the six months ended June 30, 2025, finance costs were **RMB 232.7 million**, a year-on-year decrease of approximately **15%**, primarily due to lower benchmark interest rates and a reduction in the average balance of interest-bearing bank and other borrowings - Finance costs decreased by approximately **15%**, mainly due to lower benchmark interest rates and a reduction in the average balance of interest-bearing bank and other borrowings[62](index=62&type=chunk) - The average borrowing interest rate was **4.85%**, a decrease of **0.68 percentage points** from the prior year[62](index=62&type=chunk) [Share of Profits and Losses of Associates](index=29&type=section&id=Share%20of%20Profits%20and%20Losses%20of%20Associates) For the six months ended June 30, 2025, the Group's share of losses of associates was **RMB 0.8 million**, a shift from profit in the prior year, and the Group will implement measures to reduce these losses - Share of losses of associates was **RMB 0.8 million** (2024: profit of **RMB 0.1 million**)[63](index=63&type=chunk) [Income Tax Expense](index=29&type=section&id=Income%20Tax%20Expense) For the six months ended June 30, 2025, income tax expense was **RMB 62.6 million**, with an effective tax rate of approximately **37%**, an increase of **6 percentage points** from the prior year, primarily influenced by a combination of multiple factors - Income tax expense included current PRC income tax of **RMB 30.8 million** and deferred tax expense of **RMB 31.8 million**[64](index=64&type=chunk) - The increase in the effective tax rate was mainly due to the combined impact of increased influence from lower tax rates enacted by specific provinces or local government authorities, increased impact from non-deductible expenses, and tax losses[64](index=64&type=chunk) [Balance Sheet Item Analysis](index=29&type=section&id=Balance%20Sheet%20Item%20Analysis) The Group's balance sheet items showed structural changes during the reporting period, with financial receivables and trade receivables increasing, while contract assets and prepayments, other receivables, and other assets decreased, and cash and cash equivalents significantly increased, reflecting improved operating cash flow, while trade payables and bills payable slightly increased, and other payables and accrued expenses decreased [Financial Receivables](index=29&type=section&id=Financial%20Receivables) As of June 30, 2025, financial receivables amounted to **RMB 11,681.9 million**, a slight increase, primarily due to the reclassification of contract assets to financial receivables after the completion of water treatment project construction and upgrading cycles, partially offset by transfers to assets held for sale and intangible assets - Financial receivables increased by **RMB 7.9 million** to **RMB 11,681.9 million**[65](index=65&type=chunk) - The increase was mainly due to the reclassification of contract assets to financial receivables[65](index=65&type=chunk) [Contract Assets](index=30&type=section&id=Contract%20Assets) As of June 30, 2025, contract assets amounted to **RMB 320.0 million**, a decrease of **RMB 225.8 million**, primarily due to the reclassification of contract assets to financial receivables and the net effect of increased construction from BOT, PPP, and EPC contract projects Contract Assets (RMB thousand) | Category | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :--- | :--- | :--- | | Contract assets | 320,008 | 545,787 | | Portion classified as current | (77,553) | (53,057) | | **Non-current portion** | **242,455** | **492,730** | - Contract assets decreased by **RMB 225.8 million**, mainly due to the reclassification of contract assets to financial receivables[66](index=66&type=chunk) [Trade Receivables](index=30&type=section&id=Trade%20Receivables) As of June 30, 2025, trade receivables amounted to **RMB 3,335.8 million**, an increase of **RMB 166.1 million**, primarily arising from construction and operating services for urban water, integrated water environment management, and rural wastewater treatment projects - Trade receivables increased by **RMB 166.1 million**, mainly due to an increase of approximately **RMB 220.8 million** in receivables from urban water services projects[67](index=67&type=chunk) - Receivables from integrated water environment management projects saw a net increase of approximately **RMB 12.9 million**[67](index=67&type=chunk) [Prepayments, Other Receivables and Other Assets](index=30&type=section&id=Prepayments%2C%20Other%20Receivables%20and%20Other%20Assets) As of June 30, 2025, prepayments, other receivables, and other assets amounted to **RMB 775.3 million**, a decrease of **RMB 4.1 million**, primarily due to a reduction in other operating receivables - A decrease of **RMB 4.1 million**, mainly due to a reduction of approximately **RMB 5.1 million** in other operating receivables[68](index=68&type=chunk) [Cash and Cash Equivalents](index=31&type=section&id=Cash%20and%20Cash%20Equivalents) As of June 30, 2025, cash and cash equivalents amounted to **RMB 236.5 million**, an increase of **RMB 59.4 million** from the end of the prior year, primarily attributable to increased cash inflow from operating activities Cash Flow Statement Summary (RMB thousand) | Category | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Net cash flows from operating activities | 394,172 | 160,900 | | Net cash flows (used in)/from investing activities | (74,235) | 178,816 | | Net cash flows used in financing activities | (260,488) | (287,630) | | Net increase in cash and cash equivalents | 59,449 | 52,086 | | Cash and cash equivalents at end of period | 236,504 | 300,245 | - The increase in cash and cash equivalents was mainly due to increased cash inflow from operating activities[69](index=69&type=chunk) - If investments in BOT/TOT and PPP businesses were not classified as cash flows used in operating activities, the Group would have generated cash inflows of **RMB 475.4 million** and **RMB 254.6 million**, respectively[70](index=70&type=chunk) [Trade Payables and Bills Payable](index=31&type=section&id=Trade%20Payables%20and%20Bills%20Payable) As of June 30, 2025, trade payables and bills payable amounted to **RMB 1,859.7 million**, a slight increase, consistent with the execution and settlement of construction projects undertaken by the Group - Trade payables and bills payable increased by **RMB 10.0 million** to **RMB 1,859.7 million**[71](index=71&type=chunk) [Other Payables and Accrued Expenses](index=32&type=section&id=Other%20Payables%20and%20Accrued%20Expenses) As of June 30, 2025, other payables and accrued expenses amounted to **RMB 96.3 million**, a decrease of **RMB 45.7 million**, primarily due to reductions in acquisition payables, salaries and welfare payables, and advances for equity and other operating payables - Other payables and accrued expenses decreased by **RMB 45.7 million** to **RMB 96.3 million**[72](index=72&type=chunk) [Liquidity and Financial Resources](index=32&type=section&id=Liquidity%20and%20Financial%20Resources) The Group's liquidity and capital requirements are primarily related to project investments, operation and maintenance, working capital, and general corporate purposes, with cash and cash equivalents increasing, total interest-bearing debt decreasing, and the gearing ratio declining as of June 30, 2025, indicating continuous improvement in financial position - Cash and cash equivalents increased by **RMB 59.4 million** to **RMB 236.5 million**[74](index=74&type=chunk) - Total interest-bearing debt decreased to **RMB 9,584.7 million** (December 31, 2024: **RMB 9,854.0 million**)[75](index=75&type=chunk) - **68.1%** of interest-bearing debt was long-term debt, with over **66%** bearing interest at floating rates[75](index=75&type=chunk) - Bank credit facilities amounted to **RMB 9,732.4 million**, of which **RMB 2,230.0 million** remained unutilized[75](index=75&type=chunk) - The gearing ratio decreased to **67.8%** (2024: **69.2%**)[76](index=76&type=chunk) [Pledge of Assets](index=33&type=section&id=Pledge%20of%20the%20Group's%20Assets) As of June 30, 2025, approximately **RMB 9,584.7 million** of the Group's interest-bearing bank and other borrowings were secured by financial receivables, intangible assets, investment properties, trade receivables, equity, contract assets, and pledged deposits totaling **RMB 11,078.9 million** - Interest-bearing borrowings were secured by financial receivables, intangible assets—concession rights, investment properties, trade receivables, equity in an investment company, contract assets, and pledged deposits[77](index=77&type=chunk) - The total value of pledged assets was **RMB 11,078.9 million**[77](index=77&type=chunk) [Employees and Remuneration Policies](index=33&type=section&id=Employees%20and%20Remuneration%20Policies) As of June 30, 2025, the Group employed **2,242** staff, with remuneration policies determined with reference to market conditions and individual performance, reviewed annually, and training programs provided, and a defined contribution scheme adopted as its pension plan - As of June 30, 2025, the Group employed **2,242** staff[78](index=78&type=chunk) - The remuneration package is determined with reference to market conditions and individual performance, and reviewed annually[78](index=78&type=chunk) - The Group provides external and internal training programs for its employees and has adopted a defined contribution scheme[78](index=78&type=chunk) [Contingent Liabilities](index=33&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[79](index=79&type=chunk) [Foreign Exchange Risk](index=33&type=section&id=Foreign%20Exchange%20Risk) The majority of the Group's operations are in China, with transactions denominated and settled in RMB, and except for bank deposits denominated in foreign currencies and certain interest-bearing bank borrowings, the Group has no significant foreign currency risk and currently does not use derivative financial instruments for hedging - The majority of operations are conducted in China, with transactions denominated and settled in RMB[80](index=80&type=chunk) - Except for bank deposits denominated in foreign currencies and certain interest-bearing bank borrowings, there is no significant foreign currency risk[80](index=80&type=chunk) - Currently, no derivative financial instruments are used to hedge foreign currency risk[80](index=80&type=chunk) [Events After Reporting Period](index=33&type=section&id=Events%20After%20Reporting%20Period) Except as disclosed, no significant events have occurred after June 30, 2025 - No significant events have occurred after June 30, 2025[81](index=81&type=chunk) [Corporate Governance and Other Information](index=34&type=section&id=Corporate%20Governance%20and%20Other%20Information) [Compliance with Corporate Governance Code](index=34&type=section&id=Compliance%20with%20Corporate%20Governance%20Code) The Company has adopted and complied with the code provisions of the Corporate Governance Code set out in Appendix C1 of the Stock Exchange Listing Rules, with the Board believing that for the six months ended June 30, 2025, the company has complied with all code provisions and is committed to continuously improving management efficiency and transparency - The Company has adopted and complied with the code provisions of the Corporate Governance Code set out in Appendix C1 of the Stock Exchange Listing Rules[82](index=82&type=chunk) - For the six months ended June 30, 2025, the company has complied with the Corporate Governance Code without any deviation[82](index=82&type=chunk) - The Group strengthened budget, risk, performance, and accountability management, optimized management tools and strategies, and enhanced operational efficiency[83](index=83&type=chunk) [Interim Dividends](index=34&type=section&id=Interim%20Dividends) The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025, consistent with the prior year - The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025[84](index=84&type=chunk) [Audit Committee and Review of Interim Results](index=35&type=section&id=Audit%20Committee%20and%20Review%20of%20Interim%20Results) The Audit Committee has reviewed the Group's unaudited interim results for the six months ended June 30, 2025, and discussed accounting policies, practices, and internal control matters with senior management, with the committee comprising three independent non-executive directors - The Audit Committee has reviewed the Group's unaudited interim results for the six months ended June 30, 2025[85](index=85&type=chunk) - The committee comprises Mr. Zhou Jinrong (Chairman), Mr. Chang Qing, and Mr. Peng Yongzhen, all independent non-executive directors[85](index=85&type=chunk) [Standard Code for Securities Transactions by Directors](index=35&type=section&id=Standard%20Code%20for%20Securities%20Transactions%20by%20Directors) The Company has adopted the Standard Code set out in Appendix C3 of the Listing Rules as the code of conduct for directors' dealings in the Company's securities, and all directors have confirmed compliance with this code during the reporting period - The Company has adopted the Standard Code set out in Appendix C3 of the Listing Rules as the code of conduct for directors' dealings in the Company's securities[86](index=86&type=chunk) - All directors have confirmed compliance with the Standard Code for the six months ended June 30, 2025[86](index=86&type=chunk) [Purchase, Sale and Redemption of the Company's Listed Securities](index=35&type=section&id=Purchase%2C%20Sale%20and%20Redemption%20of%20the%20Company's%20Listed%20Securities) For the six months ended June 30, 2025, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities - For the six months ended June 30, 2025, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[87](index=87&type=chunk) [Publication of Interim Results Announcement and Interim Report](index=36&type=section&id=Publication%20of%20Interim%20Results%20Announcement%20and%20Interim%20Report) This interim results announcement has been published on the Stock Exchange website and the Company's website, and the interim report will be dispatched to the Company's shareholders in due course - This interim results announcement has been published on the Stock Exchange website (www.hkexnews.hk) and the Company's website (www.kangdaep.com)[88](index=88&type=chunk) - The interim report will be dispatched to the Company's shareholders in due course[88](index=88&type=chunk) [Board of Directors Information](index=36&type=section&id=Board%20of%20Directors%20Information) As of the announcement date, the Board of Directors comprises eight directors, including four executive directors, one non-executive director, and three independent non-executive directors - The Board includes eight directors: Mr. Li Zhong, Ms. Liu Yujie, Mr. Duan Linnan, and Mr. Zhou Wei (Executive Directors), Mr. Zhao Junxian (Non-executive Director), and Mr. Zhou Jinrong, Mr. Chang Qing, and Mr. Peng Yongzhen (Independent Non-executive Directors)[90](index=90&type=chunk)

[Supplemental Announcement Regarding the 2024 Annual Report](index=1&type=section&id=%E6%9C%89%E9%97%9C%E4%BA%8C%E9%9B%B6%E4%BA%94%E5%9B%9B%E5%B9%B4%E5%B9%B4%E5%A0%B1%E7%9A%84%E8%A3%9C%E5%85%85%E5%85%AC%E5%91%8A) This section provides supplementary information to the 2024 Annual Report, covering share options, continuing connected transactions, and other corporate details [Share Options](index=1&type=section&id=%E8%B3%BC%E8%82%A1%E6%AC%8A) This section details the company's share option scheme, including authorized total, unexercised status, participant entitlement limits, exercise period, and minimum vesting period [Total Authorized Share Options](index=1&type=section&id=%E6%8E%88%E6%AC%8A%E8%B3%BC%E8%82%A1%E6%AC%8A%E7%B8%BD%E6%95%B8) This subsection presents the total number of share options authorized under the scheme and their proportion to issued shares Authorized Share Options Overview | Metric | Value | | :--- | :--- | | Total share options authorized for grant under the scheme | 116,862,651 options | | Total company shares available for issue under the scheme | 116,862,651 shares | | Percentage of total issued company shares (excluding treasury shares) | 10% | [Unexercised Share Options Status](index=1&type=section&id=%E6%9C%AA%E8%A1%8C%E4%BD%BF%E8%B3%BC%E8%82%A1%E6%AC%8A%E6%83%85%E6%B3%81) This subsection clarifies the current status of unexercised share options under the company's scheme - As of December 31, 2024, there were **no unexercised share options** under the scheme[5](index=5&type=chunk) [Maximum Entitlement per Participant](index=1&type=section&id=%E6%AF%8F%E5%90%8D%E5%8F%83%E8%88%87%E4%BA%BA%E5%8F%AF%E7%8D%B2%E6%8E%88%E6%AC%8A%E6%AC%8A%E7%9B%8A%E4%B8%8A%E9%99%90) This subsection addresses the limits on entitlements for individual participants within the share option scheme - The share option scheme rules do not specify a maximum entitlement per participant, but the company will continuously monitor compliance with Chapter 17 of the Listing Rules[6](index=6&type=chunk) [Share Option Exercise Period](index=1&type=section&id=%E8%A1%8C%E4%BD%BF%E6%9C%9F%E6%AC%8A%E7%9A%84%E6%9C%9F%E9%99%90) This subsection defines the permissible timeframe for exercising share options granted under the scheme - Share options are exercisable within a period determined by the directors and notified to the grantee, not exceeding **ten years** from the offer date of the share option[7](index=7&type=chunk) [Minimum Vesting Period](index=2&type=section&id=%E6%9C%80%E7%9F%AD%E6%AD%B8%E5%B1%AC%E6%9C%9F) This subsection outlines the minimum holding period required before share options become exercisable - Unless otherwise determined by the directors and stated in the offer to the grantee, there is **no minimum vesting period** required before share options become exercisable[8](index=8&type=chunk) [Continuing Connected Transactions and Connected Transactions](index=2&type=section&id=%E6%8C%81%E7%BA%8C%E9%97%9C%E9%80%A3%E4%BA%A4%E6%98%93%E5%8F%8A%E9%97%9C%E9%80%A3%E4%BA%A4%E6%98%93) This section details the company's compliance with continuing connected transactions, including auditor's unqualified opinion and confirmation of adherence to Listing Rules for disclosed transactions [Auditor's Opinion](index=2&type=section&id=%E6%A0%B8%E6%95%B8%E5%B8%AB%E6%84%8F%E8%A6%8B) This subsection presents the auditor's findings and conclusions regarding the company's continuing connected transactions - The company's auditor has issued an **unqualified opinion letter** in accordance with Listing Rule 14A.56, containing findings and conclusions on the continuing connected transactions described on page 65 of the 2024 Annual Report[9](index=9&type=chunk) [Transaction Disclosure and Compliance Confirmation](index=2&type=section&id=%E4%BA%A4%E6%98%93%E6%8A%AB%E9%9C%B2%E8%88%87%E5%90%88%E8%A6%8F%E7%A2%BA%E8%AA%8D) This subsection confirms the company's compliance with Listing Rules for disclosed transactions and clarifies other related party transactions - The company confirms compliance with Chapter 14A of the Listing Rules for transactions under the termination agreement and the 2023 factoring agreement (the 'Disclosed Transactions')[9](index=9&type=chunk)[10](index=10&type=chunk) - Other related party transactions disclosed in Notes 14 and 31 to the consolidated financial statements in the 2024 Annual Report do not constitute connected transactions or continuing connected transactions requiring announcement, circular, shareholder approval, and/or reporting under Chapter 14A of the Listing Rules[9](index=9&type=chunk) [Impact on Annual Report](index=2&type=section&id=%E5%B0%8D%E5%B9%B4%E5%A0%B1%E7%9A%84%E5%BD%B1%E9%9F%BF) This subsection clarifies that the supplementary information does not alter the original content of the 2024 Annual Report - The supplementary information does not affect other data contained in the 2024 Annual Report, and the content of the 2024 Annual Report remains unchanged[10](index=10&type=chunk) [Other Information](index=2&type=section&id=%E5%85%B6%E4%BB%96%E4%BF%A1%E6%81%AF) This section includes the board's statement, a list of board members, and the principle for resolving inconsistencies between language versions [Board Members](index=2&type=section&id=%E8%91%A3%E4%BA%8B%E6%9C%83%E6%88%90%E5%93%A1) This subsection lists the current composition of the company's Board of Directors as of the announcement date - As of the announcement date, the Board of Directors includes Executive Directors Mr Ji Hulin, Mr Xue Zhicheng, Mr Pan Mingfeng, and Dr Teng Songsong; Non-executive Directors Mr Li Biao and Mr Hu Huaimin; and Independent Non-executive Directors Dr Liu Yongping, Mr Zhang Tingji, and Ms Zhang Yan[12](index=12&type=chunk) [Language Version Statement](index=2&type=section&id=%E8%AA%9E%E8%A8%80%E7%89%88%E6%9C%AC%E8%81%B2%E6%98%8E) This subsection specifies the authoritative language version in case of discrepancies in the announcement - In case of any inconsistency between the English and Chinese versions of this announcement, the **English version shall prevail**[13](index=13&type=chunk)

Financial Highlights This section provides a concise overview of the Group's key financial and operational performance for the six months ended June 30, 2025 [Financial Highlights for the Six Months Ended June 30, 2025](index=1&type=section&id=%E8%B2%A1%E5%8B%99%E6%91%98%E8%A6%81) | Metric | 2025 (HK$ '000) | 2024 (HK$ '000) | Change (%) | | :--- | :--- | :--- | :--- | | **Performance** | | | | | Revenue | 8,087,956 | 8,439,807 | -4.2 | | Gross Profit | 1,306,118 | 1,888,578 | -30.8 | | Profit for the Period | 740,142 | 1,010,270 | -26.7 | | Profit Attributable to Owners of the Company | 740,147 | 1,010,276 | -26.7 | | Basic Earnings Per Share (HK cents) | 2.88 | 3.90 | -26.2 | | Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA) | 3,600,330 | 4,155,035 | -13.4 | | Adjusted EBITDA | 3,427,420 | 4,156,371 | -17.5 | [Key Data from Condensed Consolidated Statement of Financial Position as at June 30, 2025](index=1&type=section&id=%E8%B2%A1%E5%8B%99%E6%91%98%E8%A6%81) | Metric | June 30, 2025 (HK$ '000) | December 31, 2024 (HK$ '000) | Change (%) | | :--- | :--- | :--- | :--- | | Equity Attributable to Owners of the Company | 12,802,716 | 13,289,971 | -3.7 | | Total Assets | 25,034,842 | 26,120,400 | -4.2 | | Net Assets | 12,808,120 | 13,295,380 | -3.7 | [Operational Summary as at June 30, 2025 (Average Entitlement Daily Production)](index=1&type=section&id=%E8%B2%A1%E5%8B%99%E6%91%98%E8%A6%81) | Asset | 2025 (BOED) | 2024 (BOED) | Change (%) | | :--- | :--- | :--- | :--- | | Pakistan Assets | 31,571 | 38,349 | -17.7 | | Middle East and North Africa Assets | 80,191 | 63,949 | +25.4 | | Iraq | 68,815 | 52,790 | +30.4 | | Egypt | 11,376 | 11,159 | +1.9 | [Condensed Consolidated Financial Statements](index=2&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8) This section presents the Group's condensed consolidated financial statements, including the statement of profit or loss, comprehensive income, and financial position [Condensed Consolidated Statement of Profit or Loss](index=2&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E6%90%8D%E7%9B%8A%E8%A1%A8) For the six months ended June 30, 2025, the Group's revenue was HK$8.088 billion, a 4.2% year-on-year decrease, with gross profit at HK$1.306 billion, down 30.8%, and profit for the period at HK$740.1 million, a 26.7% decrease, resulting in basic earnings per share of 2.88 HK cents [Key Data from Condensed Consolidated Statement of Profit or Loss](index=2&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E6%90%8D%E7%9B%8A%E8%A1%A8) | Metric | 2025 (HK$ '000) | 2024 (HK$ '000) | | :--- | :--- | :--- | | Revenue | 8,087,956 | 8,439,807 | | Cost of Sales | (6,781,838) | (6,551,229) | | Gross Profit | 1,306,118 | 1,888,578 | | Operating Profit | 1,162,820 | 1,501,328 | | Profit Before Tax | 1,029,078 | 1,375,268 | | Income Tax Expense | (288,936) | (364,998) | | Profit for the Period | 740,142 | 1,010,270 | | Profit Attributable to Owners of the Company | 740,147 | 1,010,276 | | Basic Earnings Per Share (HK cents) | 2.88 | 3.90 | [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=3&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E6%90%8D%E7%9B%8A%E5%8F%8A%E5%85%B6%E4%BB%96%E5%85%A8%E9%9D%A2%E6%94%B6%E7%9B%8A%E8%A1%A8) For the six months ended June 30, 2025, profit for the period was HK$740.1 million, with other comprehensive income primarily from exchange differences on foreign operations of HK$28.669 million and reclassification of foreign currency translation reserve of HK$30.834 million, leading to a total comprehensive income of HK$799.6 million, a 21.0% year-on-year decrease [Key Data from Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=3&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E6%90%8D%E7%9B%8A%E5%8F%8A%E5%85%B6%E4%BB%96%E5%85%A8%E9%9D%A2%E6%94%B6%E7%9B%8A%E8%A1%A8) | Metric | 2025 (HK$ '000) | 2024 (HK$ '000) | | :--- | :--- | :--- | | Profit for the Period | 740,142 | 1,010,270 | | Exchange differences on translation of foreign operations | 28,669 | 1,176 | | Foreign currency translation reserve released on deemed disposal of investment in an associate and reclassified to profit or loss | 30,834 | - | | Other comprehensive income for the period, net of tax | 59,503 | 1,176 | | Total comprehensive income for the period | 799,645 | 1,011,446 | | Total comprehensive income attributable to owners of the Company | 799,650 | 1,011,452 | [Condensed Consolidated Statement of Financial Position](index=4&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81%E8%A1%A8) As of June 30, 2025, the Group's total assets were HK$25.035 billion, a 4.2% decrease from December 31, 2024, driven by a reduction in bank and cash balances, resulting in net current liabilities of HK$1.435 billion and a 3.7% decrease in net assets [Key Data from Condensed Consolidated Statement of Financial Position](index=4&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81%E8%A1%A8) | Metric | June 30, 2025 (HK$ '000) | December 31, 2024 (HK$ '000) | | :--- | :--- | :--- | | **Non-current assets** | | | | Property, plant and equipment | 12,548,238 | 11,870,336 | | Intangible assets | 1,696,254 | 1,582,605 | | Total non-current assets | 15,660,805 | 15,287,406 | | **Current assets** | | | | Trade and other receivables | 7,091,957 | 7,603,933 | | Bank and cash balances | 1,993,774 | 2,935,796 | | Total current assets | 9,374,037 | 10,832,994 | | **Current liabilities** | | | | Trade and other payables | 8,610,968 | 8,794,443 | | Current tax liabilities | 1,456,666 | 1,638,556 | | Total current liabilities | 10,808,619 | 10,768,648 | | Net current (liabilities)/assets | (1,434,582) | 64,346 | | **Non-current liabilities** | | | | Trade and other payables | 361,589 | 979,276 | | Total non-current liabilities | 1,418,103 | 2,056,372 | | Net assets | 12,808,120 | 13,295,380 | | Equity attributable to owners of the Company | 12,802,716 | 13,289,971 | [Notes to the Condensed Financial Statements](index=6&type=section&id=Notes%20to%20the%20Condensed%20Financial%20Statements) This section provides essential details and explanations for the condensed financial statements [1. Basis of Preparation](index=6&type=section&id=1.%20Basis%20of%20Preparation) The condensed financial statements are prepared in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting" and the disclosure requirements of the Hong Kong Stock Exchange Listing Rules - The condensed financial statements are prepared in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting" and the disclosure requirements of the Hong Kong Stock Exchange Listing Rules[7](index=7&type=chunk) [2. Going Concern Basis](index=6&type=section&id=2.%20Going%20Concern%20Basis) As of June 30, 2025, the Group had net current liabilities of approximately HK$1.435 billion, indicating significant uncertainty, but the Board believes the financial statements are appropriately prepared on a going concern basis due to future cash flow forecasts, expected core business growth, and cost control measures - As of June 30, 2025, the Group had net current liabilities of approximately **HK$1,434,582,000**, indicating a significant going concern uncertainty[8](index=8&type=chunk) - The Board believes the Group will have sufficient working capital, citing ongoing negotiations for additional bank financing, expected positive cash flows from future operations, and continued strengthening of cost controls[8](index=8&type=chunk)[10](index=10&type=chunk) [3. Significant Accounting Policies Information](index=6&type=section&id=3.%20Significant%20Accounting%20Policies%20Information) The condensed consolidated financial statements adopt the same accounting policies as the 2024 annual consolidated financial statements, with the addition of a new policy for derivative financial instruments, which are initially recognized at fair value and subsequently remeasured at fair value - The condensed consolidated financial statements adopt the same accounting policies as the 2024 annual consolidated financial statements, with the addition of a new accounting policy for derivative financial instruments[9](index=9&type=chunk) - Derivative instruments are initially recognized at fair value on the contract date and subsequently remeasured at fair value at each reporting period end[9](index=9&type=chunk) [4. Adoption of New and Revised Hong Kong Financial Reporting Standards](index=7&type=section&id=4.%20Adoption%20of%20New%20and%20Revised%20Hong%20Kong%20Financial%20Reporting%20Standards) The Group first applied the amendments to Hong Kong Accounting Standard 21 "Lack of Exchangeability" from January 1, 2025, without changing accounting policies or making retrospective adjustments, and has not early adopted any new or revised standards that are not yet effective - The Group first applied the amendments to Hong Kong Accounting Standard 21 "Lack of Exchangeability" from January 1, 2025[12](index=12&type=chunk) - The Group did not change accounting policies or make retrospective adjustments due to the adoption of the revised standard[12](index=12&type=chunk) [5. Fair Value Measurement](index=7&type=section&id=5.%20Fair%20Value%20Measurement) The carrying amounts of the Group's financial assets and liabilities in the condensed consolidated statement of financial position approximate their fair values, with fair value measurements using a three-level hierarchy, where financial assets and derivative financial instruments at fair value through profit or loss were measured using Level 1 inputs as of June 30, 2025 - The carrying amounts of financial assets and financial liabilities approximate their fair values[14](index=14&type=chunk) - The fair value measurement hierarchy is divided into three levels, with financial assets and derivative financial instruments at fair value through profit or loss measured using Level 1 inputs as of June 30, 2025[14](index=14&type=chunk)[15](index=15&type=chunk) [6. Segment Information](index=8&type=section&id=6.%20Segment%20Information) The Group has identified three reportable segments: Exploration and Production, Trading, and Clean Energy Business, due to the acquisition of a wind power project subsidiary during the period, with detailed revenue, profit, assets, and liabilities presented for each segment - The Group has identified three reportable segments: Exploration and Production, Trading, and Clean Energy Business, due to the acquisition of a subsidiary engaged in the development and operation of wind power projects during the period[16](index=16&type=chunk)[17](index=17&type=chunk) [Segment Revenue and Profit for the Six Months Ended June 30, 2025](index=8&type=section&id=6.%20Segment%20Information) | Segment | Revenue from external customers (HK$ '000) | Segment profit (HK$ '000) | | :--- | :--- | :--- | | Exploration and Production | 4,318,738 | 403,550 | | Trading | 3,722,090 | (8,769) | | Clean Energy Business | 47,128 | 10,619 | | **Total** | **8,087,956** | **405,400** | [Segment Assets and Liabilities as at June 30, 2025](index=8&type=section&id=6.%20Segment%20Information) | Segment | Segment assets (HK$ '000) | Segment liabilities (HK$ '000) | | :--- | :--- | :--- | | Exploration and Production | 20,291,884 | 7,495,902 | | Trading | 523,192 | 2,570,157 | | Clean Energy Business | 1,103,555 | 75,011 | | **Total** | **21,918,631** | **10,141,070** | [7. Revenue](index=10&type=section&id=7.%20Revenue) For the six months ended June 30, 2025, the Group's total revenue was HK$8.088 billion, a 4.2% year-on-year decrease, primarily due to lower sales and production income from crude oil, condensate, natural gas, and LPG, partially offset by increased energy product trading income and new wind power electricity sales, with Iraq being the largest regional market [Revenue Sources for the Six Months Ended June 30, 2025](index=10&type=section&id=7.%20Revenue) | Source | 2025 (HK$ '000) | 2024 (HK$ '000) | | :--- | :--- | :--- | | Sales and production of crude oil, condensate, natural gas and LPG | 4,318,738 | 5,049,188 | | Trading of energy products | 3,722,090 | 3,390,619 | | Sales of electricity generated from wind power | 47,128 | - | | **Total** | **8,087,956** | **8,439,807** | [Revenue by Major Geographical Market for the Six Months Ended June 30, 2025](index=10&type=section&id=7.%20Revenue) | Major Geographical Market | 2025 (HK$ '000) | 2024 (HK$ '000) | | :--- | :--- | :--- | | Pakistan | 1,581,682 | 1,647,813 | | Singapore | 2,860,656 | 1,323,254 | | Egypt | 472,278 | 573,776 | | Iraq | 2,560,593 | 2,714,154 | | UAE | 612,747 | 939,077 | | Switzerland | - | 1,026,146 | | Hong Kong | - | 215,587 | | **Total revenue from external customers** | **8,087,956** | **8,439,807** | [8. Finance Costs](index=12&type=section&id=8.%20Finance%20Costs) For the six months ended June 30, 2025, the Group's total finance costs were HK$144.8 million, with HK$3.142 million capitalized, resulting in net finance costs of HK$141.7 million, a 13.3% year-on-year decrease, primarily due to lower bank loan interest and a weighted average capitalization rate of 7.5% [Finance Costs for the Six Months Ended June 30, 2025](index=12&type=section&id=8.%20Finance%20Costs) | Item | 2025 (HK$ '000) | 2024 (HK$ '000) | | :--- | :--- | :--- | | Interest on bank loans | 12,355 | 78,526 | | Interest expense on lease liabilities | 7,960 | 9,769 | | Interest on customer deposits | 102,823 | 64,568 | | Provision - unwinding of discount | 20,914 | 13,231 | | Others | 745 | - | | **Total borrowing costs** | **144,797** | **166,094** | | Amount capitalized | (3,142) | (2,629) | | **Total finance costs** | **141,655** | **163,465** | - The weighted average capitalization rate for borrowing costs in 2025 was **7.5%** (2024: 8.1%)[22](index=22&type=chunk) [9. Income Tax Expense](index=12&type=section&id=9.%20Income%20Tax%20Expense) For the six months ended June 30, 2025, the Group's income tax expense was HK$288.9 million, a 20.8% year-on-year decrease, comprising current tax of HK$353.9 million and deferred tax income of HK$64.936 million, with varying tax rates applied across different operating regions [Income Tax Expense for the Six Months Ended June 30, 2025](index=12&type=section&id=9.%20Income%20Tax%20Expense) | Item | 2025 (HK$ '000) | 2024 (HK$ '000) | | :--- | :--- | :--- | | Current tax - overseas | 353,872 | 573,481 | | Underprovision in prior years | 240 | - | | Deferred tax | (64,936) | (208,723) | | **Total income tax expense** | **288,936** | **364,998** | - Income tax rates in Egypt, Iraq, Pakistan, Singapore, and China are **22.5%**, **35%**, **40% to 50%**, **17%**, and **25%**, respectively[23](index=23&type=chunk) [10. Profit for the Period](index=13&type=section&id=10.%20Profit%20for%20the%20Period) Profit for the period is derived after deducting or including several non-recurring or non-cash items, primarily including depreciation of HK$2.286 billion, amortization of intangible assets of HK$99.38 million, a bargain purchase gain on acquisition of a subsidiary of HK$114.381 million, and a gain on deemed disposal of investment in an associate of HK$78.912 million [Adjustments to Profit for the Period for the Six Months Ended June 30, 2025](index=13&type=section&id=10.%20Profit%20for%20the%20Period) | Item | 2025 (HK$ '000) | 2024 (HK$ '000) | | :--- | :--- | :--- | | Acquisition related costs | 1,798 | - | | Impairment loss on property, plant and equipment | 24,020 | - | | Write-off of property, plant and equipment | 11,799 | - | | Gain on deemed disposal of investment in an associate | (78,912) | - | | Bargain purchase gain on acquisition of a subsidiary | (114,381) | - | | Amortization of intangible assets | 99,380 | 166,926 | | Depreciation | 2,285,989 | 2,409,060 | | Depreciation of right-of-use assets | 44,228 | 40,316 | | Impairment loss on investment in an associate | - | 38,842 | [11. Earnings Per Share](index=13&type=section&id=11.%20Earnings%20Per%20Share) For the six months ended June 30, 2025, basic earnings per share were 2.88 HK cents, a decrease from 3.90 HK cents in the prior year, with diluted earnings per share being the same as basic earnings per share due to the absence of potentially dilutive ordinary shares [Earnings Per Share for the Six Months Ended June 30, 2025](index=13&type=section&id=11.%20Earnings%20Per%20Share) | Metric | 2025 (HK cents) | 2024 (HK cents) | | :--- | :--- | :--- | | Basic earnings per share | 2.88 | 3.90 | | Diluted earnings per share | Not applicable | Not applicable | - Profit attributable to owners of the Company was approximately **HK$740,147,000** (2024: HK$1,010,276,000), with a weighted average number of ordinary shares outstanding of **25,682,474,305** (2024: 25,895,565,679) during the period[26](index=26&type=chunk) [12. Dividends](index=14&type=section&id=12.%20Dividends) The Board does not recommend the payment of any interim dividend for the six months ended June 30, 2025, following a final dividend of 5 HK cents per ordinary share, totaling HK$1.292 billion, paid for 2024 - The Board does not recommend the payment of any interim dividend for the six months ended June 30, 2025[28](index=28&type=chunk) - A final dividend of **5 HK cents** per ordinary share, totaling **HK$1,292,480,000**, was paid for 2024[28](index=28&type=chunk) [13. Property, Plant and Equipment](index=14&type=section&id=13.%20Property,%20Plant%20and%20Equipment) For the six months ended June 30, 2025, the Group acquired approximately HK$2.244 billion in property, plant and equipment, a decrease from HK$2.934 billion in the prior year, and also acquired approximately HK$419.3 million through business combinations - For the six months ended June 30, 2025, the Group acquired approximately **HK$2,244,137,000** in property, plant and equipment (2024: HK$2,934,258,000)[29](index=29&type=chunk) - Property, plant and equipment acquired through business combinations amounted to approximately **HK$419,307,000**[29](index=29&type=chunk) [14. Right-of-use Assets](index=14&type=section&id=14.%20Right-of-use%20Assets) For the six months ended June 30, 2025, the Group recognized right-of-use assets and lease liabilities of approximately HK$14.501 million for new lease agreements, and approximately HK$980,000 in right-of-use assets upon the step acquisition of a subsidiary - For the six months ended June 30, 2025, the Group recognized right-of-use assets and lease liabilities of approximately **HK$14,501,000** for new lease agreements (2024: HK$59,983,000)[30](index=30&type=chunk) - Approximately **HK$980,000** in right-of-use assets and approximately **HK$2,807,000** in lease liabilities were recognized upon the completion of a step acquisition[30](index=30&type=chunk) [15. Trade and Other Receivables](index=14&type=section&id=15.%20Trade%20and%20Other%20Receivables) As of June 30, 2025, total trade and other receivables amounted to HK$7.092 billion, a 6.7% decrease from December 31, 2024, comprising trade receivables of HK$5.729 billion with provisions, and other receivables of HK$1.661 billion, mainly from joint operators and deposits [Trade and Other Receivables as at June 30, 2025](index=14&type=section&id=15.%20Trade%20and%20Other%20Receivables) | Item | June 30, 2025 (HK$ '000) | December 31, 2024 (HK$ '000) | | :--- | :--- | :--- | | Trade receivables | 5,729,194 | 6,320,638 | | Provision for trade receivables | (102,348) | (102,348) | | Provision for price adjustment | (195,837) | (196,100) | | Other receivables | 1,661,335 | 1,582,130 | | Provision for other receivables | (387) | (387) | | **Total trade and other receivables** | **7,091,957** | **7,603,933** | - The credit period for trade receivables is generally **30 to 45 days**, with Iraqi customers settling through physical delivery of crude oil[32](index=32&type=chunk) - A price adjustment provision of approximately **HK$195,837,000** is made for potential price adjustments under Pakistan natural gas sales agreements[34](index=34&type=chunk) [16. Trade and Other Payables](index=17&type=section&id=16.%20Trade%20and%20Other%20Payables) As of June 30, 2025, total trade and other payables were HK$8.973 billion, an 8.2% decrease from December 31, 2024, with current liabilities of HK$8.611 billion and non-current liabilities of HK$361.589 million, primarily including accrued operating and capital expenditures, customer deposits, and other taxes payable [Trade and Other Payables as at June 30, 2025](index=17&type=section&id=16.%20Trade%20and%20Other%20Payables) | Item | June 30, 2025 (HK$ '000) | December 31, 2024 (HK$ '000) | | :--- | :--- | :--- | | Trade payables | 1,569,633 | 2,139,032 | | Other payables | 7,402,924 | 7,634,687 | | **Total trade and other payables** | **8,972,557** | **9,773,719** | | Current liabilities | 8,610,968 | 8,794,443 | | Non-current liabilities | 361,589 | 979,276 | - Customer deposits of approximately **HK$1,872,000,000** relate to an agreement with a customer for secured crude oil prepayments financing up to approximately **HK$3,120,000,000** (equivalent to approximately US$400,000,000)[38](index=38&type=chunk) [17. Borrowings](index=18&type=section&id=17.%20Borrowings) As of June 30, 2025, the Group's total secured bank loans increased to HK$332.495 million from HK$233.775 million on December 31, 2024, comprising current liabilities of HK$201.649 million and non-current liabilities of HK$130.846 million [Borrowings Analysis as at June 30, 2025](index=18&type=section&id=17.%20Borrowings) | Item | June 30, 2025 (HK$ '000) | December 31, 2024 (HK$ '000) | | :--- | :--- | :--- | | Bank loans, secured | 332,495 | 233,775 | | Current liabilities | 201,649 | 155,825 | | Non-current liabilities | 130,846 | 77,950 | [18. Provisions](index=19&type=section&id=18.%20Provisions) As of June 30, 2025, the Group's total provisions amounted to HK$706.359 million, primarily for dismantlement costs of leasehold improvements and decommissioning costs related to oil and gas exploration and production activities, requiring restoration of concession areas to an acceptable state [Movement in Provisions as at June 30, 2025](index=19&type=section&id=18.%20Provisions) | Item | Dismantlement costs for leasehold improvements (HK$ '000) | Decommissioning costs (HK$ '000) | Total (HK$ '000) | | :--- | :--- | :--- | :--- | | At January 1, 2025 (audited) | 500 | 733,211 | 733,711 | | Less: Actual costs incurred during the period | - | (48,126) | (48,126) | | Less: Reversal of provision recognised during the period | - | (140) | (140) | | Add: Unwinding of discount | - | 20,914 | 20,914 | | **At June 30, 2025 (unaudited)** | **500** | **705,859** | **706,359** | - Decommissioning costs relate to oil and gas exploration and production activities, where the Group is required to restore concession areas to an acceptable state[40](index=40&type=chunk) [19. Share Capital](index=20&type=section&id=19.%20Share%20Capital) As of June 30, 2025, the Company's authorized share capital was HK$600 million, with issued and fully paid share capital of HK$260.405 million, comprising 26,040,504,786 ordinary shares of HK$0.01 each, and no treasury shares were purchased during the period [Share Capital Structure as at June 30, 2025](index=20&type=section&id=19.%20Share%20Capital) | Item | June 30, 2025 (HK$ '000) | December 31, 2024 (HK$ '000) | | :--- | :--- | :--- | | Authorised share capital (60,000,000,000 ordinary shares of HK$0.01 each) | 600,000 | 600,000 | | Issued and fully paid share capital (26,040,504,786 ordinary shares of HK$0.01 each) | 260,405 | 260,405 | - For the six months ended June 30, 2025, the Company did not purchase any treasury shares (2024: 91,054,000 shares)[42](index=42&type=chunk) [20. Performance Share Unit Scheme](index=21&type=section&id=20.%20Performance%20Share%20Unit%20Scheme) The Company adopted the Performance Share Unit (PSU) Scheme on April 1, 2019, to incentivize employees; for the six months ended June 30, 2025, no shares were purchased by the trustee or granted to eligible employees, while 36,366,895 awarded shares vested and 700,000 were forfeited, resulting in an expense of approximately HK$5.575 million recognized by the Group - The PSU Scheme aims to incentivize employees, drive shareholder value growth, and achieve medium-to-long-term performance targets[43](index=43&type=chunk) - For the six months ended June 30, 2025, the trustee did not purchase shares from the market, nor did it grant shares to eligible employees[43](index=43&type=chunk)[44](index=44&type=chunk) [Movement of Awarded Shares under Performance Share Unit Scheme](index=21&type=section&id=20.%20Performance%20Share%20Unit%20Scheme) | Date of Grant | Outstanding at January 1, 2025 (shares) | Granted during the period (shares) | Vested during the period (shares) | Forfeited during the period (shares) | Outstanding at June 30, 2025 (shares) | | :--- | :--- | :--- | :--- | :--- | :--- | | May 17, 2022 | 21,292,097 | - | (21,106,108) | (185,989) | - | | May 17, 2022 | 14,224,798 | - | (13,960,787) | (264,011) | - | | June 27, 2023 | 20,150,000 | - | (1,300,000) | (250,000) | 18,600,000 | | **Total** | **55,666,895** | **-** | **(36,366,895)** | **(700,000)** | **18,600,000** | - For the six months ended June 30, 2025, the Group recognized an expense of approximately **HK$5,575,000** for the PSU Scheme (2024: HK$7,775,000)[46](index=46&type=chunk) [21. Capital Commitments](index=22&type=section&id=21.%20Capital%20Commitments) As of June 30, 2025, the Group's total contracted but unprovided capital commitments significantly increased to HK$3.605 billion from HK$1.572 billion on December 31, 2024, primarily due to the acquisition of subsidiaries and property, plant and equipment [Capital Commitments as at June 30, 2025](index=22&type=section&id=21.%20Capital%20Commitments) | Item | June 30, 2025 (HK$ '000) | December 31, 2024 (HK$ '000) | | :--- | :--- | :--- | | Acquisition of property, plant and equipment | 1,782,076 | 977,177 | | Acquisition of subsidiaries | 1,224,600 | - | | Contribution to subsidiaries | 575,912 | 573,084 | | Contribution to associates | 21,931 | 21,597 | | **Total** | **3,604,519** | **1,571,858** | [22. Contingent Liabilities](index=22&type=section&id=22.%20Contingent%20Liabilities) The Group faces several contingent liabilities, including an unlimited corporate guarantee for United Energy Pakistan Limited, a dispute with the Pakistan government over a windfall levy potentially requiring an additional HK$192 million provision, tax directives from the Pakistan tax authorities totaling HK$1.135 billion in potential taxes, and bank guarantees for concession agreement obligations - The Company provides an unlimited corporate guarantee for United Energy Pakistan Limited to fulfill concession agreement obligations[48](index=48&type=chunk) - A dispute with the Pakistan government regarding a windfall levy could require an additional provision of approximately **HK$191,969,000** if implemented retrospectively[48](index=48&type=chunk) - The Pakistan tax authorities have issued multiple tax directives, with cumulative potential tax amounts of approximately **HK$1,135,414,000**[48](index=48&type=chunk) [23. Acquisition of Subsidiaries](index=23&type=section&id=23.%20Acquisition%20of%20Subsidiaries) On May 12, 2025, the Group completed the acquisition of a 52% equity interest in Oriental Group Beijing Investment Holding Co., Ltd. (OGBIH Group) for HK$148.2 million in cash, making it a wholly-owned subsidiary, as part of its clean energy expansion strategy, and recognized a gain on deemed disposal of investment in an associate of HK$78.912 million and a bargain purchase gain of HK$114.381 million - On May 12, 2025, the Group completed the acquisition of a **52%** equity interest in OGBIH Group for a cash consideration of approximately **HK$148,200,000**, making it a wholly-owned subsidiary[49](index=49&type=chunk) - OGBIH Group is engaged in a **99 MW** wind power project in Pakistan, and this acquisition is part of the Group's strategy to expand its clean energy business segment[49](index=49&type=chunk) - The Group remeasured the fair value of its original interest in OGBIH Group, recognizing a gain of approximately **HK$78,912,000**[49](index=49&type=chunk)[51](index=51&type=chunk) - A bargain purchase gain of **HK$114,381,000** was recognized in the business combination, attributed to the increase in the fair value of the acquired net assets[53](index=53&type=chunk) - OGBIH Group contributed approximately **HK$47,128,000** in revenue and approximately **HK$28,036,000** in profit from the acquisition date to the end of the reporting period[54](index=54&type=chunk) [24. Related Party Transactions](index=25&type=section&id=24.%20Related%20Party%20Transactions) During the reporting period, the Group engaged in various related party transactions, including the acquisition of OGBIH Group, guarantees and service fee waivers from Oriental Group, a personal guarantee from former director Mr. Zhang Hongwei, lease payments to Beijing Dacheng Hotel, property management fees received by Oriental An Yi, and wind turbine operation and maintenance service income from former associate UEP Wind Power (Private) Limited - The acquisition of OGBIH Group was a related party transaction, with a cash consideration of approximately **HK$148,200,000**[55](index=55&type=chunk) - Oriental Group waived bank financing guarantee service fees for OGBIH of approximately **HK$999,000** (2024: HK$2,415,000)[55](index=55&type=chunk) - Office lease payments to Beijing Dacheng Hotel amounted to approximately **HK$12,701,000** (2024: HK$8,499,000)[56](index=56&type=chunk) - Oriental An Yi received property management service fees, electricity supply, and lease fees of approximately **HK$1,723,000** (2024: HK$1,789,000)[56](index=56&type=chunk) - Wind turbine operation and maintenance service income of approximately **HK$16,323,000** (2024: HK$21,911,000) was received from former associate UEP Wind Power (Private) Limited[56](index=56&type=chunk) [Management Discussion and Analysis](index=27&type=section&id=Management%20Discussion%20and%20Analysis) This section provides management's perspective on the company's performance, financial condition, and future outlook [Business Review](index=27&type=section&id=Business%20Review) The Group operates as an integrated energy company listed on the Hong Kong Stock Exchange, with businesses spanning upstream oil and gas, clean energy, and energy trading; in H1 2025, despite an anticipated 3.0% global economic growth and increased crude oil demand, the average Brent crude oil price decreased by 14.04% year-on-year, leading to a 26.7% decline in profit attributable to owners of the Company - The Group primarily engages in upstream oil and gas, clean energy, and energy trading businesses[57](index=57&type=chunk) - The average Brent crude oil price in H1 2025 was **US$72.03 per barrel**, a decrease of approximately **14.04%** compared to the same period in 2024[59](index=59&type=chunk) - Profit attributable to owners of the Company was approximately **HK$740,147,000**, a **26.7%** decrease compared to the same period in 2024[59](index=59&type=chunk) [Exploration, Development and Production](index=27&type=section&id=Exploration,%20Development%20and%20Production) In H1 2025, the Group achieved three commercial discoveries (one in Pakistan, two in Egypt), with average operating daily production increasing by 9.4% to 187,258 BOED and average entitlement daily production rising by 9.3% to 111,762 BOED, primarily driven by existing well management and new discoveries - In H1 2025, the Group achieved **3 commercial discoveries**, with **1 in Pakistan** and **2 in Egypt**[60](index=60&type=chunk) [Production Data for the Six Months Ended June 30, 2025](index=27&type=section&id=Exploration,%20Development%20and%20Production) | Metric | 2025 | 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Average Operating Daily Production (BOED) | 187,258 | 171,195 | +9.4 | | Cumulative Operating Production (million BOE) | 33.89 | 31.15 | +8.8 | | Average Entitlement Daily Production (BOED) | 111,762 | 102,298 | +9.3 | | Cumulative Entitlement Production (million BOE) | 20.23 | 18.62 | +8.6 | [Pakistan](index=28&type=section&id=Pakistan) For the six months ended June 30, 2025, Pakistan assets experienced an approximately 18% decrease in both average operating daily production and average entitlement daily production, with an oil-to-gas ratio of about 21%, though one commercial discovery during the period is expected to contribute to reserves and production - Pakistan assets' average operating daily production was approximately **44,686 BOED**, a year-on-year decrease of **18%**[62](index=62&type=chunk) - Average entitlement daily production was approximately **31,571 BOED**, a year-on-year decrease of **17.7%**[62](index=62&type=chunk) - The oil-to-gas ratio in Pakistan was approximately **21%**, with **1 commercial discovery** during the period[62](index=62&type=chunk) [Iraq](index=28&type=section&id=Iraq) In Iraq, the Group's average operating daily production and average entitlement daily production in Block 9 both increased by 35.5% to 101,390 BOED and 60,834 BOED, respectively, while Siba gas field saw a 1.1% increase in both average operating and entitlement daily production - Iraq Block 9's average operating daily production was approximately **101,390 BOED**, a year-on-year increase of **35.5%**; average entitlement daily production was approximately **60,834 BOED**, a year-on-year increase of **35.5%**[63](index=63&type=chunk) - Iraq Siba gas field's average operating daily production was approximately **26,604 BOED**, a year-on-year increase of **1.1%**; average entitlement daily production was approximately **7,981 BOED**, a year-on-year increase of **1.1%**[63](index=63&type=chunk) [Egypt](index=28&type=section&id=Egypt) For the six months ended June 30, 2025, Egypt assets experienced a 6.4% decrease in average operating daily production and a 1.9% decrease in average entitlement daily production, with an oil-to-gas ratio of approximately 99%, though two commercial discoveries during the period are expected to contribute to reserves and production - Egypt assets' average operating daily production was approximately **14,577 BOED**, a year-on-year decrease of **6.4%**; average entitlement daily production was approximately **11,376 BOED**, a year-on-year decrease of **1.9%**[64](index=64&type=chunk) - The oil-to-gas ratio in Egypt was approximately **99%**, with **2 commercial discoveries** during the period[64](index=64&type=chunk) [Core Competencies Analysis](index=29&type=section&id=Core%20Competencies%20Analysis) The Group's core competencies include successful exploration and a robust resource base with a reserve life of nearly 16 years, rapid development and capacity enhancement of large oil fields, significant low-cost advantages and strong financial performance, industry-leading Health, Safety, and Environment (HSE) performance, a "dual-driven" strategy for a low-carbon future, and a strong commitment to social responsibility - In the first half of the year, **3 commercial discoveries** were made, maintaining a reserve life of nearly **16 years**[65](index=65&type=chunk) - The central processing facilities in Iraq Block 9, with a daily crude oil processing capacity of **100,000 barrels** and a natural gas processing capacity of **130 million cubic feet per day**, are operating normally[66](index=66&type=chunk) - The Group maintains an industry-leading **low-cost advantage**, possesses a robust financial position, and has a **low leverage ratio**[67](index=67&type=chunk) - Operational safety is a top priority, with HSE indicators at an **industry-leading level**[68](index=68&type=chunk) - A "dual-driven" strategy is adopted to develop traditional fossil energy businesses while promoting clean energy projects[69](index=69&type=chunk) - The Group highly values its employees, building a diverse international team, and actively invests in local community education, healthcare, and vocational training programs[70](index=70&type=chunk) [Sales and Marketing](index=30&type=section&id=Sales%20and%20Marketing) The Group primarily sells crude oil and condensate through international traders, with prices benchmarked against Brent crude oil, while natural gas sales are based on long-term agreements linked to international oil prices, and the energy trading segment optimizes sales of Iraqi and Pakistani share crude oil and products, with petrochemical product sales reaching 896,723 metric tons - Crude oil sales prices are primarily determined by international benchmark crude oil prices of similar quality, denominated and settled in US dollars, with Brent crude oil as the benchmark[71](index=71&type=chunk) - Natural gas sales prices are based on long-term sales agreements negotiated with customers, including a price review mechanism linked to international oil prices[72](index=72&type=chunk) - The energy trading segment conducts energy product trading, optimizing sales of Iraqi and Pakistani share crude oil and products[73](index=73&type=chunk) [Crude Oil Sales](index=30&type=section&id=Crude%20Oil%20Sales) For the six months ended June 30, 2025, the Group's cumulative entitlement sales volume of crude oil and condensate was 15.1 million barrels, an 18.9% year-on-year increase, while the average realized crude oil price was US$68.19 per barrel, a 13.6% year-on-year decrease, mainly due to the decline in Brent crude oil prices - Cumulative entitlement sales volume of crude oil and condensate was **15.1 million barrels**, a year-on-year increase of **18.9%**[71](index=71&type=chunk) - The average realized crude oil price was approximately **US$68.19 per barrel**, a year-on-year decrease of **13.6%**[71](index=71&type=chunk) [Natural Gas Sales](index=30&type=section&id=Natural%20Gas%20Sales) For the six months ended June 30, 2025, the Group's cumulative entitlement natural gas sales volume was 5.0 million BOE, a 12.3% year-on-year decrease, with an average realized natural gas sales price of US$29.75 per BOE, a 3.0% year-on-year decrease - Cumulative entitlement natural gas sales volume was **5.0 million BOE**, a year-on-year decrease of **12.3%**[72](index=72&type=chunk) - The average realized natural gas sales price was approximately **US$29.75 per BOE**, a year-on-year decrease of **3.0%**[72](index=72&type=chunk) [Energy Product Sales](index=30&type=section&id=Energy%20Product%20Sales) For the six months ended June 30, 2025, the Group's petrochemical product sales volume was 896,723 metric tons, with an average realized price of approximately US$532.15 per metric ton - Petrochemical product sales volume was **896,723 metric tons**[73](index=73&type=chunk) - The average realized price was approximately **US$532.15 per metric ton**[73](index=73&type=chunk) [Financial Performance](index=31&type=section&id=Financial%20Performance) This section provides a detailed analysis of the Group's financial results, including profit, revenue, costs, and cash flows for the reporting period [Financial Review](index=31&type=section&id=Financial%20Review) For the six months ended June 30, 2025, profit attributable to owners of the Company was approximately HK$740.1 million, a 26.7% year-on-year decrease, despite a 9.3% increase in average entitlement daily production to 111,762 BOED, due to an 8.4% decline in the average realized oil and gas price to US$58.58 per BOE - Profit attributable to owners of the Company was approximately **HK$740,147,000**, a **26.7%** decrease compared to the same period last year[74](index=74&type=chunk) - Average entitlement daily production was approximately **111,762 BOED**, a **9.3%** increase compared to the same period last year[74](index=74&type=chunk) - The average realized price for oil and gas was approximately **US$58.58 per BOE**, an **8.4%** year-on-year decrease[74](index=74&type=chunk) [Revenue](index=31&type=section&id=Revenue) During the reporting period, revenue was approximately HK$8.088 billion, a 4.2% year-on-year decrease, primarily due to lower average realized prices for crude oil and condensate, partially offset by growth in trading and new clean energy businesses [Revenue for the Six Months Ended June 30, 2025](index=31&type=section&id=Revenue) | Business | 2025 (HK$ '000) | 2024 (HK$ '000) | | :--- | :--- | :--- | | Exploration and Production | 4,318,738 | 5,049,188 | | Trading | 3,722,090 | 3,390,619 | | Clean Energy Business | 47,128 | - | | **Total** | **8,087,956** | **8,439,807** | - Revenue decreased by **4.2%**, primarily due to lower average realized prices for crude oil and condensate, partially offset by increased trading business and new clean energy business[75](index=75&type=chunk) [Key Data for Exploration and Production Business](index=31&type=section&id=Revenue) | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Crude Oil and Natural Gas Sales (US$ '000) | 1,182,219 | 1,180,357 | +1,862 | +0.2% | | Sales Volume (million BOE) | 20.2 | 18.5 | +1.7 | +9.2% | | Realized Price (US$ per BOE) | 58.58 | 63.93 | -5.35 | -8.4% | [Cost of Sales and Services](index=32&type=section&id=Cost%20of%20Sales%20and%20Services) In H1 2025, extraction costs for exploration and production activities increased by 14.8% to HK$607.296 million, with overall extraction costs per BOE slightly rising by 4.8% to US$4.4, and total sales and services costs including depreciation and amortization of approximately HK$2.355 billion, a 7.7% year-on-year decrease - Extraction costs for exploration and production activities increased by **14.8%** to approximately **HK$607,296,000**[77](index=77&type=chunk) - Overall extraction costs per BOE were approximately **US$4.4**, a slight increase of **4.8%**[77](index=77&type=chunk) - Sales and services costs included approximately **HK$2,354,880,000** in depreciation and amortization, a year-on-year decrease of **7.7%**[78](index=78&type=chunk) [Gross Profit](index=32&type=section&id=Gross%20Profit) During the reporting period, gross profit was approximately HK$1.306 billion, with a gross profit margin of 16.1%, representing a 30.8% year-on-year decrease, primarily due to the decline in average realized prices for crude oil and condensate - Gross profit was approximately **HK$1,306,118,000** (gross profit margin of **16.1%**), a year-on-year decrease of **30.8%**[79](index=79&type=chunk) - The significant decrease in gross profit was primarily due to the decline in average realized prices for crude oil and condensate during the period[79](index=79&type=chunk) [Exploration Expenses](index=32&type=section&id=Exploration%20Expenses) During the reporting period, exploration expenses amounted to approximately HK$65.168 million, primarily for geological and geophysical data studies, surface use rights, and losses from dry and abandoned wells written off in Egyptian assets - Exploration expenses were approximately **HK$65,168,000** (2024: HK$92,684,000)[80](index=80&type=chunk) - Exploration expenses were primarily for geological and geophysical data studies, surface use rights, and losses from dry and abandoned wells written off in Egyptian assets of approximately **HK$11,799,000**[80](index=80&type=chunk) [Administrative Expenses](index=32&type=section&id=Administrative%20Expenses) During the reporting period, administrative expenses were approximately HK$374 million, representing 4.6% of revenue, an increase from HK$292 million in the prior year - Administrative expenses were approximately **HK$374,030,000** (2024: HK$292,463,000), representing approximately **4.6%** of revenue (2024: 3.5%)[81](index=81&type=chunk) [Finance Costs](index=32&type=section&id=Finance%20Costs) During the reporting period, finance costs were approximately HK$141.7 million, a 13.3% year-on-year decrease, primarily due to the one-off amortization of upfront fees upon repayment of borrowings in the prior year, partially offset by an increase in trade finance loans, with a weighted average borrowing interest rate of 9.69% - Finance costs were approximately **HK$141,655,000**, a year-on-year decrease of **13.3%**[82](index=82&type=chunk) - The decrease in finance costs was primarily due to the one-off amortization of upfront fees upon repayment of borrowings in the prior year, partially offset by an increase in trade finance loans during the reporting period[82](index=82&type=chunk) - The weighted average borrowing interest rate for the reporting period was **9.69%** (2024: 13.47%)[82](index=82&type=chunk) [Income Tax Expense](index=32&type=section&id=Income%20Tax%20Expense) During the reporting period, income tax expense was approximately HK$288.9 million, comprising current tax of HK$353.9 million and deferred tax income of HK$64.936 million, with an effective tax rate of approximately 28.1%, an increase of 1.6 percentage points from the prior year - Income tax expense was approximately **HK$288,936,000**, comprising current tax of approximately **HK$353,872,000** and deferred tax income of approximately **HK$64,936,000**[83](index=83&type=chunk) - The effective tax rate for the reporting period was approximately **28.1%**, an increase of **1.6 percentage points** compared to approximately 26.5% in the prior year[83](index=83&type=chunk) [Net Cash Generated from Operating Activities](index=33&type=section&id=Net%20Cash%20Generated%20from%20Operating%20Activities) During the reporting period, net cash inflow from operating activities was approximately HK$2.740 billion, a 36.9% year-on-year decrease, primarily due to reduced sales inflows resulting from a decline in average net realized sales prices - Net cash inflow from operating activities was approximately **HK$2,739,813,000**, a **36.9%** decrease compared to the same period last year[84](index=84&type=chunk) - The decrease was primarily due to lower sales inflows resulting from a decline in average net realized sales prices during the period[84](index=84&type=chunk) [Net Cash Used in Investing Activities](index=33&type=section&id=Net%20Cash%20Used%20in%20Investing%20Activities) In H1 2025, net cash outflow from investing activities was approximately HK$2.123 billion, a 27.3% year-on-year decrease, primarily due to reduced capital expenditures - Net cash outflow from investing activities was approximately **HK$2,122,961,000**, a **27.3%** decrease compared to the same period last year[85](index=85&type=chunk) - Capital expenditures amounted to approximately **HK$2,211,950,000**, a total decrease of **22.3%** compared to the same period last year[85](index=85&type=chunk) [Net Cash Used in Financing Activities](index=33&type=section&id=Net%20Cash%20Used%20in%20Financing%20Activities) In H1 2025, net cash outflow from financing activities was approximately HK$1.566 billion, primarily due to dividends paid of HK$1.292 billion and repayment of borrowings of HK$186.42 million during the period - Net cash outflow from financing activities was approximately **HK$1,565,619,000**[86](index=86&type=chunk) - This was primarily due to dividends paid of approximately **HK$1,292,480,000** and repayment of borrowings of approximately **HK$186,420,000** during the period[86](index=86&type=chunk) [Dividends](index=33&type=section&id=Dividends) The Board does not recommend the payment of an interim dividend for the reporting period - The Board does not recommend the payment of an interim dividend for the reporting period[87](index=87&type=chunk) [Other Financial Information](index=33&type=section&id=Other%20Financial%20Information) To supplement the consolidated results under Hong Kong Financial Reporting Standards, the Group uses non-HKFRS measures such as Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA) and Adjusted EBITDA as additional financial metrics; Adjusted EBITDA was approximately HK$3.427 billion, a 17.5% year-on-year decrease, primarily due to lower average net realized sales prices - The Group uses non-HKFRS measures such as EBITDA and Adjusted EBITDA as additional financial metrics to provide useful information regarding its financial position and operating performance[88](index=88&type=chunk) [Reconciliation of Non-HKFRS Measures to HKFRS Measures](index=33&type=section&id=Other%20Financial%20Information) | Item | 2025 (HK$ '000) | 2024 (HK$ '000) | | :--- | :--- | :--- | | Profit for the Period | 740,142 | 1,010,270 | | Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA) | 3,600,330 | 4,155,035 | | Adjusted Earnings Before Interest, Tax, Depreciation and Amortization | 3,427,420 | 4,156,371 | - Adjusted EBITDA for the reporting period was approximately **HK$3,427,420,000**, a **17.5%** decrease compared to the same period last year, primarily due to lower average net realized sales prices[91](index=91&type=chunk) [Business and Market Outlook](index=35&type=section&id=Business%20and%20Market%20Outlook) Global economic growth is projected at 3.0% in 2025, with crude oil demand expected to increase by 1.3 million barrels per day year-on-year; the Group targets an average operating daily production of 178,900 to 204,200 BOED and an average entitlement daily production of 104,200 to 120,600 BOED for 2025, with capital expenditures estimated at US$750 million, mainly for exploration, development, and engineering construction - Global economic growth is projected at **3.0%** in 2025, with global crude oil demand expected to increase by **1.3 million barrels per day** year-on-year[92](index=92&type=chunk) - The 2025 target for average operating daily production is **178,900 to 204,200 BOED**, and for average entitlement daily production is **104,200 to 120,600 BOED**[92](index=92&type=chunk) - Capital expenditures are projected to reach **US$750 million**, primarily to support exploration, development, and engineering construction plans[92](index=92&type=chunk) [Pakistan Assets](index=35&type=section&id=Pakistan%20Assets) Pakistan's natural gas demand is projected to increase while domestic production is expected to decline rapidly, leading to a gas shortage; the Group plans to achieve an average entitlement daily production of 29,500 to 35,500 BOED in Pakistan for 2025 and will continue to seek market opportunities for expansion - Pakistan's natural gas demand is projected to increase from **3.56 billion cubic feet per day** in 2020 to **4.24 billion cubic feet per day** in 2030, while domestic production is expected to decline rapidly[93](index=93&type=chunk) - The plan for 2025 is to achieve an average entitlement daily production of **29,500 to 35,500 BOED**[94](index=94&type=chunk) [Middle East and North Africa Assets](index=35&type=section&id=Middle%20East%20and%20North%20Africa%20Assets) Middle East and North Africa assets hold 576.7 million BOE in entitlement proved and probable reserves, with 97.0% located in Iraq; the Group plans to further develop the region's potential, expecting Iraq Block 9 to reach an average operating daily production of 130,000 BOED, Siba gas field to maintain peak production, and the Egyptian asset portfolio to double if acquisitions are successful - Middle East and North Africa assets hold **576.7 million BOE** in entitlement proved and probable reserves, with **97.0%** located in Iraq[95](index=95&type=chunk) - Iraq Block 9's average operating daily production is expected to reach **130,000 BOED**[95](index=95&type=chunk) - In 2025, Iraq assets are planned to achieve an average entitlement daily production of **65,100 to 73,000 BOED**, and Egyptian assets are planned to achieve an average entitlement daily production of **9,500 to 12,100 BOED**[95](index=95&type=chunk) [Conclusion](index=35&type=section&id=Conclusion) Despite facing challenges of increased costs and decreased profitability in H1 2025, the Group remains committed to consolidating its strategic position through targeted investments and operational efficiency, focusing on sustainable development practices and exploring new market opportunities for long-term growth and shareholder value creation - In H1 2025, the Group faced challenges of increased costs and decreased profitability[96](index=96&type=chunk) - The Group will focus on sustainable development practices and explore new opportunities in emerging markets to enable long-term growth and create value for shareholders[96](index=96&type=chunk) [Other Information](index=36&type=section&id=Other%20Information) This section covers various corporate governance, financial, and operational details not included in the main financial statements or management discussion [Liquidity and Financial Resources](index=36&type=section&id=Liquidity%20and%20Financial%20Resources) As of June 30, 2025, the Group's bank and cash balances were approximately HK$1.994 billion, with total borrowings of approximately HK$332.495 million at an average interest rate of 8.80%, a debt-to-equity ratio of 9.7%, and a current ratio of approximately 0.87 times; the Group is exploring opportunities to optimize its capital structure and utilize international debt capital markets - As of June 30, 2025, bank and cash balances were approximately **HK$1,993,774,000** (December 31, 2024: HK$2,935,796,000)[97](index=97&type=chunk) [Outstanding Borrowings Principal as at June 30, 2025](index=36&type=section&id=Liquidity%20and%20Financial%20Resources) | Borrowing Type | US$ | Equivalent HK$ | | :--- | :--- | :--- | | Term borrowings | 42,600,000 | 332,280,000 | | Trade finance loans | 240,000,000 | 1,872,000,000 | | **Total** | **282,600,000** | **2,204,280,000** | - The debt-to-equity ratio was **9.7%** (December 31, 2024: 11.6%), and the current ratio was approximately **0.87 times** (December 31, 2024: 1.01 times)[98](index=98&type=chunk) - Total borrowings were approximately **HK$332,495,000**, with an average interest rate of **8.80%** (December 31, 2024: 8.61%)[99](index=99&type=chunk) - The Group is exploring various opportunities to optimize its capital structure, including utilizing international debt capital markets[99](index=99&type=chunk) [Material Acquisitions and Disposals](index=36&type=section&id=Material%20Acquisitions%20and%20Disposals) During the reporting period, the Group signed an agreement to acquire Apex International Energy Holdings I (AIEH I), an upstream oil and gas company primarily engaged in exploration and production activities in Egypt, for approximately HK$1.17 billion, pending Egyptian government approval; additionally, the acquisition of a 52% equity interest in OGBIH from an associated company for approximately US$19 million was completed on May 12, 2025 - The Group signed an agreement to acquire Apex International Energy Holdings I (AIEH I), an upstream oil and gas company primarily engaged in exploration and production activities in Egypt, for approximately **HK$1,170,000,000**[100](index=100&type=chunk) - The completion of the AIEH I acquisition is subject to the satisfaction of preconditions and approval from the Egyptian government by February 7, 2026[100](index=100&type=chunk) - The acquisition of a **52%** equity interest in Oriental Group Beijing Investment Holding Co., Ltd. (OGBIH) from an associated company for approximately **US$19,000,000** was completed on May 12, 2025[101](index=101&type=chunk) [Segment Information](index=37&type=section&id=Segment%20Information) Details regarding the Group's segment information are provided in Note 6 to the condensed consolidated financial statements - The Group's segment information is detailed in Note 6 to the condensed consolidated financial statements[102](index=102&type=chunk) [Capital Structure](index=37&type=section&id=Capital%20Structure) As of June 30, 2025, the Company's total issued share capital (including treasury shares) was 26,040,504,786 shares, and the number of issued shares excluding treasury shares was 25,849,594,786 shares, remaining consistent with January 1, 2025 - As of June 30, 2025, the Company's total issued share capital (including treasury shares) was **26,040,504,786 shares**[103](index=103&type=chunk) - The number of issued shares excluding treasury shares was **25,849,594,786 shares**[103](index=103&type=chunk) [Employees](index=37&type=section&id=Employees) As of June 30, 2025, the Group employed 2,345 full-time employees globally across Hong Kong, China, Pakistan, Dubai, and other Middle East and North Africa regions, with employee remuneration packages, including basic salary, year-end bonuses, medical, and provident fund contributions, regularly reviewed and determined - As of June 30, 2025, the Group employed a total of **2,345 full-time employees** across Hong Kong, China, Pakistan, Dubai, and other Middle East and North Africa regions[104](index=104&type=chunk) - Employee remuneration packages, including basic salary, year-end bonuses, medical, and provident fund contributions, are regularly reviewed with reference to individual performance and market practices[104](index=104&type=chunk) [Contingent Liabilities](index=37&type=section&id=Contingent%20Liabilities) Details regarding the Company's contingent liabilities are provided in Note 22 to the condensed consolidated financial statements - Details regarding the Company's contingent liabilities are provided in Note 22 to the condensed consolidated financial statements[105](index=105&type=chunk) [Exchange Rate Fluctuation Risk and Related Hedging](index=37&type=section&id=Exchange%20Rate%20Fluctuation%20Risk%20and%20Related%20Hedging) The Group's monetary assets and transactions are primarily denominated in US dollars and Hong Kong dollars, maintaining relatively stable exchange rates, while the impact of other transaction currencies (RMB, Pakistani Rupee, Iraqi Dinar, and Egyptian Pound) is lower, thus no financial instruments were used for hedging during the reporting period, but exchange rate fluctuations are continuously monitored - The Group's monetary assets and transactions are primarily denominated in US dollars and Hong Kong dollars, with relatively stable exchange rates[106](index=106&type=chunk) - No financial instruments were used for hedging during the reporting period, but exchange rate fluctuations are monitored, and appropriate actions will be taken[106](index=106&type=chunk) [Sufficiency of Public Float](index=37&type=section&id=Sufficiency%20of%20Public%20Float) The Company has maintained a sufficient public float throughout the six months ended June 30, 2025 - The Company has maintained a sufficient public float throughout the six months ended June 30, 2025[107](index=107&type=chunk) [Share Option Scheme](index=38&type=section&id=Share%20Option%20Scheme) The Company's Share Option Scheme, adopted on May 27, 2016, aims to incentivize directors, employees, and consultants, authorizing the subscription of up to 1,308,572,137 shares, with no options granted, exercised, lapsed, or cancelled during the reporting period - The Share Option Scheme was adopted on May 27, 2016, to provide directors, employees, and consultants with an opportunity to acquire ownership interests in the Group[108](index=108&type=chunk) - The scheme authorizes the grant of share options to subscribe for up to **1,308,572,137** shares of the Company[108](index=108&type=chunk) - During the reporting period, no share options were granted, exercised, lapsed, or cancelled under the Share Option Scheme[109](index=109&type=chunk) [Performance Share Unit Scheme](index=38&type=section&id=Performance%20Share%20Unit%20Scheme) The Company adopted the PSU Scheme on April 1, 2019, to drive shareholder value growth, achieve medium-to-long-term performance targets, and retain key talent; during the reporting period, no new PSUs were granted, 36,366,895 awarded shares vested, and 700,000 were cancelled, with Mr. Song Yu holding 2,700,000 vested and unvested awarded shares - The PSU Scheme aims to drive successful growth in the Group's shareholder value, achieve medium-to-long-term performance targets, and attract, motivate, and retain key talent[110](index=110&type=chunk) - During the reporting period, no new PSUs were granted, **36,366,895** awarded shares vested, and **700,000** awarded shares were cancelled[111](index=111&type=chunk) - Mr. Song Yu holds **1,500,000 vested shares** and **1,200,000 unvested shares**, totaling **2,700,000 shares** of the Company[111](index=111&type=chunk) - As of the date of this announcement, the number of shares available for future grants under the PSU Scheme is **123,926,846 shares**, representing approximately **4.8%** of the scheme limit[112](index=112&type=chunk) [Disclosure of Interests](index=39&type=section&id=Disclosure%20of%20Interests) This section details the interests and short positions of directors and substantial shareholders in the Company's securities [Directors' and Chief Executive's Interests and Short Positions in Shares, Underlying Shares and Debentures of the Company or any Associated Corporation](index=39&type=section&id=Directors'%20and%20Chief%20Executive's%20Interests%20and%20Short%20Positions%20in%20Shares,%20Underlying%20Shares%20and%20Debentures%20of%20the%20Company%20or%20any%20Associated%20Corporation) As of June 30, 2025, Mr. Yao Zhisheng held a long position of 6,013,681,397 shares (23.09%), and Mr. Song Yu held a long position of 2,700,000 shares (0.01%) [Directors' Interests in the Company's Securities as at June 30, 2025](index=39&type=section&id=Directors'%20and%20Chief%20Executive's%20Interests%20and%20Short%20Positions%20in%20Shares,%20Underlying%20Shares%20and%20Debentures%20of%20the%20Company%20or%20any%20Associated%20Corporation) | Name of Director | Nature of Interest | Long Position (Number of Shares) | Short Position (Number of Shares) | Approximate % of Shareholding | | :--- | :--- | :--- | :--- | :--- | | Yao Zhisheng | Interest in controlled corporation | 6,013,681,397 | - | 23.09% (L) | | Song Yu | Beneficial owner | 2,700,000 | - | 0.01% (L) | [Substantial Shareholders](index=39&type=section&id=Substantial%20Shareholders) As of June 30, 2025, Mr. Zhang Hongwei and his controlled corporations held long and short positions in the Company's shares, with a long position of 32.19%; Mr. Yao Zhisheng and his controlled corporations held a 23.09% long position; Oriental Group Company Limited and its controlled corporations held a 25.24% long position; and Guotai Haitong Securities Co., Ltd. and its controlled corporations held a 7.83% long position [Disclosure of Major Shareholders' Interests as at June 30, 2025](index=39&type=section&id=Substantial%20Shareholders) | Name | Capacity and Nature of Interest | Number of Shares | Approximate % of Shareholding | | :--- | :--- | :--- | :--- | | Zhang Hongwei | Interest in controlled corporation | 8,382,607,845 (L) | 32.19% (L) | | | | 2,020,915,141 (S) | 7.76% (S) | | Yao Zhisheng | Interest in controlled corporation | 6,013,681,397 (L) | 23.09% (L) | | Oriental Group Company Limited | Interest in controlled corporation | 6,572,483,000 (L) | 25.24% (L) | | Guotai Haitong Securities Co., Ltd. | Interest in controlled corporation | 2,039,700,000 (L) | 7.83% (L) | - Mr. Zhang Hongwei is deemed to have an interest in **8,382,607,845 shares (32.19%)**, including shares held by his wholly-owned Wanfu Enterprise Limited and He Fu International Limited, controlled through Oriental Group Company Limited[119](index=119&type=chunk) - Mr. Yao Zhisheng ultimately owns Sheen Wise International Investment Limited, which holds **6,013,681,397 shares (23.09%)**[119](index=119&type=chunk) [Corporate Governance Code](index=42&type=section&id=Corporate%20Governance%20Code) During the reporting period, the Board and Board committees saw changes in composition, with Mr. Song Yu appointed Executive Director and Chairman, Mr. Zhao Pingshun appointed Executive Director, and Mr. Yao Zhisheng re-designated as Non-executive Director; the Group complies with the Corporate Governance Code in Appendix C1 of the Listing Rules, except for the vacant CEO position whose duties are performed by Executive Directors and management - Mr. Song Yu has been appointed as an Executive Director of the Company and re-designated as Chairman on June 27, 2025[120](index=120&type=chunk) - Mr. Zhao Pingshun has been appointed as an Executive Director, Authorized Representative, and a member of both the Remuneration Committee and Nomination Committee[120](index=120&type=chun

[Management Report Summary](index=2&type=section&id=%E9%8C%A8%E5%AE%9A%E5%B0%8E%E5%90%91%20%E6%8E%A8%E5%8B%95%E6%A0%B8%E5%BF%83%E4%B8%BB%E6%A5%AD%E5%A4%9A%E7%B6%AD%E7%AA%81%E7%A0%B4) [Strategic Direction and Business Development](index=2&type=section&id=%E9%8C%A8%E5%AE%9A%E5%B0%8E%E5%90%91%20%E6%8E%A8%E5%8B%95%E6%A0%B8%E5%BF%83%E4%B8%BB%E6%A5%AD%E5%A4%9A%E7%B6%AD%E7%AA%81%E7%A0%B4) The Group adheres to its strategic direction, focusing on core business operations, technological innovation, governance upgrades, and green development to accelerate its transformation into an international investment holding company[1](index=1&type=chunk) - The Group's strategic direction is to "expand increments, extend stock, activate variables, and stabilize profitability," focusing on core business operations, technological innovation, governance upgrades, and green, low-carbon initiatives[1](index=1&type=chunk) - Its subsidiary, Zheshang Securities, actively seized capital market opportunities, leading to **significant improvements in operating results**[1](index=1&type=chunk) - In 2024, the Company acquired **100% equity of Yonglan Expressway**, a key transportation route to the Pearl River Delta, Hong Kong, and Macau[1](index=1&type=chunk) [Definitions](index=4&type=section&id=%E9%87%8B%E7%BE%A9) [Key Terms and Definitions](index=4&type=section&id=%E9%87%8B%E7%BE%A9) This section defines key terms and corporate entities used in the report, ensuring a clear understanding of the content - Key entities are defined, such as "the Company" referring to Zhejiang Expressway Co, Ltd, and "Communications Group" being the Company's controlling shareholder[4](index=4&type=chunk) - The Group's major expressway companies (e g, Hanghui Company, Jinhua Company, Zhoushan Company) and their respective shareholding ratios are listed[4](index=4&type=chunk)[6](index=6&type=chunk) - "The Period" is explicitly defined as the period from January 1, 2025, to June 30, 2025, providing a baseline for the report's timeframe[4](index=4&type=chunk) [2025 Interim Results](index=6&type=section&id=2025%E5%B9%B4%E4%B8%AD%E6%9C%9F%E6%A5%AD%E7%B8%BE) [Interim Financial Performance Overview](index=6&type=section&id=2025%E5%B9%B4%E4%B8%AD%E6%9C%9F%E6%A5%AD%E7%B8%BE) The Group's H1 2025 revenue increased by 3.8% YoY to RMB 8.685 billion, with profit attributable to owners rising by 4.0% to RMB 2.787 billion, while no interim dividend was proposed 2025 H1 Interim Results Overview | Indicator | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | YoY Growth Rate | | :--- | :--- | :--- | :--- | | Revenue | 8,685,460 | 8,367,599 | 3.8% | | Profit Attributable to Owners of the Company | 2,787,480 | 2,680,010 | 4.0% | | Basic Earnings Per Share | 46.51 cents | 44.72 cents | 4.0% | | Diluted Earnings Per Share | 46.51 cents | 44.04 cents | 5.6% | - The Board of Directors **recommends not to declare an interim dividend** for 2025[8](index=8&type=chunk) - The condensed consolidated financial statements are unaudited but have been reviewed by the Audit Committee[8](index=8&type=chunk) [Business Review](index=7&type=section&id=%E6%A5%AD%E5%8B%99%E5%9B%9E%E9%A1%A7) [Overall Business Performance](index=7&type=section&id=%E6%95%B4%E9%AB%94%E6%A5%AD%E5%8B%99%E8%A1%A8%E7%8F%BE) In H1 2025, the Group's total revenue grew by 3.8% to RMB 8.685 billion, driven by a 13.4% increase in securities business revenue, which now constitutes 36.6% of the total - In H1 2025, China's GDP grew by **5.3% YoY**, and Zhejiang Province's GDP grew by **5.8% YoY**[9](index=9&type=chunk) 2025 H1 Revenue Composition | Business Segment | H1 2025 Revenue (RMB thousand) | H1 2024 Revenue (RMB thousand) | YoY Growth Rate | % of Total Revenue | | :--- | :--- | :--- | :--- | :--- | | Expressway Operations | 5,132,493 | 5,112,572 | 0.4% | 59.1% | | Securities Business | 3,182,990 | 2,805,936 | 13.4% | 36.6% | | Other Businesses | 369,974 | 449,091 | -17.6% | 4.3% | | **Total Revenue** | **8,685,457** | **8,367,599** | **3.8%** | **100%** | [Expressway Operations](index=9&type=section&id=%E9%AB%98%E9%80%9F%E5%85%AC%E8%B7%AF%E6%A5%AD%E5%8B%99) Expressway toll revenue grew by 0.4% to RMB 5.132 billion amidst a 1.5% increase in traffic volume, with performance supported by regional economic growth and strategic operational enhancements - Expressway toll revenue increased by **0.4% YoY to RMB 5.132 billion**, with overall traffic volume growing by **1.5% YoY**[12](index=12&type=chunk) Expressway Segment Performance (H1 2025) | Expressway | Average Daily Full-trip Traffic Volume (vehicles) | YoY Growth Rate (Traffic) | Toll Revenue (RMB million) | YoY Growth Rate (Revenue) | | :--- | :--- | :--- | :--- | :--- | | Shanghai-Hangzhou-Ningbo Expressway | 90,928 | 2.06% | 2,400.94 | 0.8% | | Shangsan Expressway | 30,678 | -9.97% | 464.00 | -15.7% | | Jinhua Section of Yongjin Expressway | 35,155 | 4.79% | 279.18 | 3.7% | | Hanghui Expressway | 28,215 | -4.36% | 334.57 | -5.5% | | Huihang Expressway | 13,912 | 6.13% | 103.89 | 2.5% | | Zhoushan Cross-sea Bridge | 32,448 | 10.64% | 630.09 | 10.4% | | Longli-Lilong Expressway | 17,770 | 7.58% | 407.89 | 5.4% | | Zhajiasu Expressway | 43,615 | 4.13% | 243.06 | 2.7% | | Huangqunan Expressway | 13,739 | 6.54% | 268.87 | 2.6% | - The slower growth in toll revenue compared to traffic volume was mainly due to the **15% toll discount for ETC-equipped trucks** implemented on April 25, 2025[14](index=14&type=chunk) - Zhoushan Cross-sea Bridge benefited from industrial park development and the construction of the Yong-Zhou Expressway Connection, leading to a **significant increase in truck traffic**[14](index=14&type=chunk) - Traffic on Shangsan and Hanghui Expressways declined due to **construction-related traffic diversions** and the opening of new competing routes[14](index=14&type=chunk) - The Group enhanced road network operational efficiency through measures like hard shoulder running, intelligent upgrades, and intensive construction management[15](index=15&type=chunk) - Successfully won the bid for the Yong-Zhou Expressway Connection (Phase II) project and acquired a **51% stake in Guisan Expressway** through a joint venture investment platform, expanding its strategic regional presence[17](index=17&type=chunk) - Accelerated the development of green, low-carbon industries by launching new energy heavy-duty truck battery swapping stations and grid-connecting distributed photovoltaic power projects[17](index=17&type=chunk) - Deepened innovation-driven development, with Zhejiang Zhijiang Intelligent Transportation Technology Co, Ltd obtaining high-tech enterprise status and exploring the application of smart expressway data assetization[17](index=17&type=chunk) [Securities Business](index=12&type=section&id=%E8%AD%89%E5%88%B8%E6%A5%AD%E5%8B%99) Zheshang Securities capitalized on a stabilizing A-share market to achieve a 13.4% YoY increase in operating revenue to RMB 3.183 billion, driven by strong growth in investment income - China's capital market showed an overall trend of stabilization and recovery, supported by policy measures and economic recovery, leading to active trading in the A-share market[18](index=18&type=chunk) - Zheshang Securities' operating revenue **increased by 13.4% YoY to RMB 3.183 billion**[18](index=18&type=chunk) Zheshang Securities H1 2025 Revenue Breakdown | Revenue Type | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | YoY Growth Rate | | :--- | :--- | :--- | :--- | | Commission and Fee Income | 1,886,362 | 1,609,014 | 17.2% | | Interest Income | 1,296,628 | 1,196,922 | 8.3% | | Securities Investment Income | 1,416,100 | 574,768 | 146.4% | [Hotel and Catering Business](index=12&type=section&id=%E9%85%92%E5%BA%97%E5%8F%8A%E9%A4%90%E9%A3%B2%E6%A5%AD%E5%8B%99) The Group's hotel and catering business faced continued pressure in H1 2025, with both Zhejiang Grand Hotel and Zheshang Grand Metropark Hotel experiencing slight revenue declines Hotel and Catering Business H1 2025 Revenue | Hotel Name | H1 2025 Revenue (RMB thousand) | YoY Decrease Rate | | :--- | :--- | :--- | | Zhejiang Grand Hotel | 18,910 | 4.0% | | Zheshang Grand Metropark Hotel | 30,890 | 3.8% | - Zhejiang Grand Hotel is actively exploring **street stall operations** to inject new momentum and counter industry pressures[19](index=19&type=chunk) [Long-term Investments](index=13&type=section&id=%E9%95%B7%E6%9C%9F%E6%8A%95%E8%B3%87) The Group's long-term investments showed mixed results, with strong profit growth from Shengxin Company and financial services, while some expressway investments declined due to construction impacts Long-term Investment Net Profit Performance (H1 2025) | Investee Entity | Business Type | H1 2025 Net Profit (RMB thousand) | YoY Growth/Change | | :--- | :--- | :--- | :--- | | Shengxin Company | Expressway | 117,110 | 46.7% | | Zhijiang Jiaokong | Expressway | 69,940 | N/A | | Hangning Company | Expressway | 201,850 | -20.3% | | Wenzhou Yongtaiwen Company | Expressway | 99,180 | -26.0% | | Zhejiang Communications Finance | Financial Services | 247,890 | 15.2% | | Changjiang Golden Leasing | Financial Leasing | 350,420 | 4.5% | | Zheshang Fund of Funds | Equity Investment | (29,010) | N/A (Net Loss) | - The decline in net profit for Hangning Expressway and Yongtaiwen Expressway was primarily due to **traffic disruptions from expansion and reconstruction projects** on related sections[21](index=21&type=chunk)[22](index=22&type=chunk) - As of the report's publication date, Shanghai Rural Commercial Bank had not yet released its 2025 interim results[24](index=24&type=chunk) [Financial Analysis](index=15&type=section&id=%E8%B2%A1%E5%8B%99%E5%88%86%E6%9E%90) [Profitability](index=15&type=section&id=%E7%9B%88%E5%88%A9%E8%83%BD%E5%8A%9B) Profit attributable to owners of the Company rose by 4.0% to RMB 2.787 billion in H1 2025, though the return on equity decreased by 8.7% to 6.0% H1 2025 Profitability Metrics | Indicator | H1 2025 | H1 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Profit Attributable to Owners of the Company | RMB 2.787 billion | RMB 2.680 billion | +4.0% | | Basic Earnings Per Share | RMB 46.51 cents | RMB 44.72 cents | +4.0% | | Diluted Earnings Per Share | RMB 46.51 cents | RMB 44.04 cents | +5.6% | | Return on Equity | 6.0% | 6.6% | -8.7% | [Liquidity and Financial Resources](index=15&type=section&id=%E8%B3%87%E9%87%91%E6%B5%81%E5%8B%95%E6%80%A7%E5%8F%8A%E8%B2%A1%E5%8B%99%E8%B3%87%E6%BA%90) As of June 30, 2025, the Group maintained strong liquidity with total current assets of RMB 183.044 billion and a net cash inflow from operating activities of RMB 4.905 billion Liquidity Metrics (as of June 30, 2025) | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Current Assets | RMB 183.044 billion | RMB 145.924 billion | | Current Ratio | 1.30 | 1.30 | | Current Ratio (excluding client funds from securities business) | 1.50 | 1.60 | | Net Cash Inflow from Operating Activities (during the period) | RMB 4.905 billion | RMB 6.492 billion | - Financial assets at fair value through profit or loss amounted to **RMB 50.323 billion**, with 54.1% invested in bonds, 26.9% in funds, and 5.5% in stocks[28](index=28&type=chunk) - The directors believe the Company will not face any liquidity issues in the foreseeable future[30](index=30&type=chunk) [Borrowings and Gearing](index=16&type=section&id=%E5%80%9F%E8%B2%B8%E5%8F%8A%E5%84%9F%E5%82%B5%E8%83%BD%E5%8A%9B) As of June 30, 2025, the Group's total interest-bearing borrowings increased to RMB 59.389 billion, with an improved interest coverage ratio of 7.5 and a gearing ratio of 67.9% Borrowings and Gearing Metrics (as of June 30, 2025) | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Liabilities | RMB 176.763 billion | RMB 143.484 billion | | Total Interest-bearing Borrowings | RMB 59.389 billion | RMB 55.266 billion | | Interest Coverage Ratio (during the period) | 7.5 | 5.6 | | Gearing Ratio | 67.9% | 66.1% | | Gearing Ratio (excluding client funds from securities business) | 56.7% | 56.6% | - Of the interest-bearing borrowings, **52.9% are not repayable within one year**, indicating manageable short-term repayment pressure[31](index=31&type=chunk) Maturity Profile of Interest-bearing Borrowings (as of June 30, 2025) | Maturity | Total (RMB thousand) | Within 1 Year (RMB thousand) | 2 to 5 Years (RMB thousand) | Over 5 Years (RMB thousand) | | :--- | :--- | :--- | :--- | :--- | | Floating Rate Borrowings | 15,232,531 | 1,747,717 | 8,526,954 | 4,957,860 | | Fixed Rate Borrowings | 44,156,316 | 26,222,576 | 17,933,740 | 0 | | **Total** | **59,388,847** | **27,970,293** | **26,460,694** | **4,957,860** | [Capital Structure](index=19&type=section&id=%E8%B3%87%E6%9C%AC%E7%B5%90%E6%A7%8B) As of June 30, 2025, the Group's total equity stood at RMB 83.68 billion, with the leverage ratio slightly increasing to 130.9% from 129.0% at the end of 2024 Capital Structure Overview (as of June 30, 2025) | Indicator | Amount (RMB thousand) | % of Total Capital | | :--- | :--- | :--- | | Total Equity | 83,680,104 | 32.1% | | Fixed Rate Debt | 146,446,890 | 56.2% | | Floating Rate Debt | 15,232,530 | 5.8% | | Interest-free Debt | 15,083,360 | 5.9% | | **Leverage Ratio** | **130.9%** | N/A | - The leverage ratio increased from **129.0%** as of December 31, 2024, to **130.9%** as of June 30, 2025[37](index=37&type=chunk) [Capital Expenditure Commitments and Utilisation](index=19&type=section&id=%E8%B3%87%E6%9C%AC%E9%96%8B%E6%94%AF%E6%89%BF%E8%AB%BE%E5%92%8C%E4%BD%BF%E7%94%A8) The Group's capital expenditure for the period was RMB 504 million, with outstanding commitments of RMB 4.908 billion, primarily for expressway expansion projects H1 2025 Capital Expenditure Utilisation | Purpose | Amount (RMB thousand) | | :--- | :--- | | Expressway Expansion Projects | 304,860 | | Purchase of Equipment and Facilities | 115,420 | | Equity Investments | 51,000 | | Purchase of Properties | 32,390 | | **Total** | **503,670** | Capital Expenditure Commitments (as of June 30, 2025) | Purpose | Amount (RMB thousand) | | :--- | :--- | | Expressway Expansion Projects | 2,495,140 | | Purchase of Equipment and Facilities | 1,468,160 | | Equity Investments | 742,000 | | Purchase of Properties | 202,740 | | **Total** | **4,908,040** | - The Group will prioritize internal resources to fund its capital expenditure commitments, with any shortfall to be met through a combination of debt and equity financing channels[38](index=38&type=chunk) [Contingent Liabilities and Pledge of Assets](index=20&type=section&id=%E6%88%96%E6%9C%89%E8%B2%A0%E5%82%B5%E5%8F%8A%E8%B3%87%E7%94%A2%E6%8A%B5%E6%8A%BC) As of June 30, 2025, the Group had contingent liabilities and pledged assets primarily related to guarantees for bank loans and pledged toll rights for several expressways, totaling over RMB 12.4 billion - The Company, jointly with Shaoxing Communications Investment Group Co, Ltd, provided a guarantee for a bank loan of RMB 2.2 billion to Shengxin Company, with an outstanding balance of **RMB 395 million** as of June 30, 2025[39](index=39&type=chunk) - Zhoushan Cross-sea Bridge's toll rights were pledged as security for bank loans with an outstanding balance of **RMB 4.787 billion**[39](index=39&type=chunk) - Longli-Lilong Expressway's toll rights were pledged as security for bank loans with an outstanding balance of **RMB 6.069 billion**[39](index=39&type=chunk) - Zhajiasu Expressway's toll rights were pledged as security for bank loans with an outstanding balance of **RMB 1.241 billion**[39](index=39&type=chunk) [Foreign Exchange Risk](index=21&type=section&id=%E5%A4%96%E5%8C%AF%E9%A2%A8%E9%9A%AA) The Group's foreign exchange risk is limited, arising mainly from H-share dividends, Hong Kong operations, and outstanding Euro convertible bonds and USD senior notes, with no hedging instruments used during the period - The Group's main operations are settled in RMB, with foreign exchange risk exposure primarily from HKD dividend payments, Hong Kong operations, Euro convertible bonds, and USD senior fixed-rate notes[42](index=42&type=chunk) - The outstanding balance of the EUR 230 million zero-coupon convertible bonds issued in 2021 is **EUR 27.2 million**, which will be redeemed on September 9, 2025[42](index=42&type=chunk) - The USD 470 million senior fixed-rate notes issued in 2021 will mature in July 2026, with a coupon rate of **1.638% per annum**[42](index=42&type=chunk) - No hedging financial instruments were used to mitigate foreign exchange risk during the period[43](index=43&type=chunk) [Use of Proceeds from Convertible Bonds](index=21&type=section&id=%E5%8F%AF%E8%BD%89%E6%8F%9B%E5%82%B5%E5%88%B8%E6%89%80%E5%BE%97%E6%AC%BE%E9%A0%85%E7%94%A8%E9%80%94) The net proceeds of approximately EUR 229 million from the EUR 230 million zero-coupon convertible bonds issued in 2021 have been fully used to repay existing borrowings - The net proceeds of approximately **EUR 229 million** from the EUR 230 million convertible bonds issued in 2021 have been fully used to repay existing borrowings[44](index=44&type=chunk) - The purpose of the issuance was to improve the debt structure, enhance liquidity, and strengthen investment capabilities[44](index=44&type=chunk) [Use of Proceeds from Rights Issue](index=21&type=section&id=%E4%BE%9B%E8%82%A1%E5%8B%9F%E9%9B%86%E8%B3%87%E9%87%91%E6%89%80%E5%BE%97%E6%AC%BE%E9%A0%85%E7%94%A8%E9%80%94) Of the remaining RMB 5.2 billion from the 2023 rights issue, RMB 250 million was used for expressway projects in H1 2025, with the remaining RMB 5.0 billion allocated for future projects and working capital - The remaining proceeds from the 2023 rights issue amounted to **RMB 5.2 billion** (calculated at the exchange rate at the end of 2024)[45](index=45&type=chunk) - As of June 30, 2025, **RMB 250 million** had been used for existing expressway expansion projects[45](index=45&type=chunk) - Of the remaining **RMB 5.0 billion**, RMB 3.97 billion will be used for expressway expansion, with the rest for supplementing working capital and repaying borrowings[45](index=45&type=chunk) [Outlook](index=22&type=section&id=%E5%B1%95%E6%9C%9B) [Macroeconomic Outlook](index=22&type=section&id=%E5%AE%8F%E8%A7%80%E7%B6%93%E6%BF%9F%E5%B1%95%E6%9C%9B) In H2 2025, while the external environment faces uncertainty, China's economy is expected to maintain stable and positive growth driven by domestic demand and technological innovation - Global geopolitical tensions and trade policy adjustments will increase uncertainty in the external environment[46](index=46&type=chunk) - The Chinese government will adhere to the principle of seeking progress while maintaining stability, expanding domestic demand, and promoting the integration of technological and industrial innovation[46](index=46&type=chunk) - China's economy is expected to maintain a stable and positive growth trend, driven by coordinated macroeconomic policies and the release of domestic demand potential[46](index=46&type=chunk) [Expressway Business Outlook](index=22&type=section&id=%E9%AB%98%E9%80%9F%E5%85%AC%E8%B7%AF%E6%A5%AD%E5%8B%99%E5%B1%95%E6%9C%9B) The Group's expressway business will focus on enhancing operational efficiency, pursuing strategic M&A and innovative financing like REITs, and accelerating industrial transformation in energy, smart transport, and related economies - The expressway business is expected to benefit from China's stable economic growth and the resilience of Zhejiang's economy[47](index=47&type=chunk) - The Group will deepen its focus on its core business, strengthening accident prevention, congestion management, and scientific maintenance to improve service quality[47](index=47&type=chunk) - It will steadily advance capital operations, explore M&A opportunities for high-quality expressways, research innovative financing channels like **REITs**, and promote existing expansion projects[49](index=49&type=chunk) - The Group will accelerate industrial transformation, focusing on **transport-energy integration** (new energy heavy-duty truck charging, photovoltaic projects), **smart transportation** (product iteration), and **road-derived economies** (expanding operational businesses)[49](index=49&type=chunk) - It will strengthen digital and intelligent empowerment by advancing digital internal controls, building an energy management platform, and exploring business models for data asset trading[49](index=49&type=chunk) [Securities Business Outlook](index=24&type=section&id=%E8%AD%89%E5%88%B8%E6%A5%AD%E5%8B%99%E5%B1%95%E6%9C%9B) Zheshang Securities will navigate market opportunities and challenges by leveraging its business strengths, supporting tech financing, expanding its client base, and integrating AI into core operations - The securities business faces opportunities from deepening capital market reforms, accelerated fintech development, and expanding cross-border financial services[51](index=51&type=chunk) - It also faces challenges from international financial market uncertainty, stricter industry regulation, and intensified market competition[51](index=51&type=chunk) - Zheshang Securities will support the equity and debt financing and M&A of technology companies, and seize emerging demands in cross-border wealth management and overseas listings[51](index=51&type=chunk) - It will continue its strategy of "developing new clients + activating existing clients" to expand its brokerage client base and build a distinctive wealth management brand[51](index=51&type=chunk) - The firm will focus on cultivating the application of **Artificial Intelligence** in core business scenarios such as investment research and advisory services, comprehensively promoting fintech empowerment[51](index=51&type=chunk) [Disclosure of Interests and Other Matters](index=25&type=section&id=%E6%AC%8A%E7%9B%8A%E5%8F%8A%E5%85%B6%E4%BB%96%E4%BA%8B%E9%A0%85%E6%8A%AB%E9%9C%B2) [Dealings in Listed Securities](index=25&type=section&id=%E8%B3%BC%E8%B2%B7%E3%80%81%E5%87%BA%E5%94%AE%E5%8F%8A%E8%B4%96%E5%9B%9E%E6%9C%AC%E5%85%AC%E5%8F%B8%E7%9A%84%E4%B8%8A%E5%B8%82%E8%AD%89%E5%88%B8) Neither the Company nor its subsidiaries purchased, sold, redeemed, or cancelled any of the Company's listed securities during the period - Neither the Company nor any of its subsidiaries purchased, sold, redeemed or cancelled any of the Company's listed securities during the Period[53](index=53&type=chunk) [Disclosure of Interests of Directors, Supervisors and Chief Executive](index=25&type=section&id=%E8%91%A3%E4%BA%8B%E3%80%81%E7%9B%A3%E4%BA%8B%E5%8F%8A%E8%A1%8C%E6%94%BF%E7%B8%BD%E8%A3%81%E6%96%BC%E8%82%A1%E4%BB%BD%E3%80%81%E7%9B%B8%E9%97%9C%E8%82%A1%E4%BB%BD%E5%8F%8A%E5%82%B5%E5%88%B8%E7%9A%84%E6%AC%8A%E7%9B%8A%E5%92%8C%E6%B7%A1%E5%80%89%E7%9A%84%E6%8A%AB%E9%9C%B2) As of June 30, 2025, no directors, supervisors, or the chief executive held any disclosable interests or short positions in the shares or debentures of the Company or its associated corporations - As of June 30, 2025, none of the directors, supervisors, or the chief executive held any disclosable interests or short positions in the shares, underlying shares, or debentures of the Company or its associated corporations[54](index=54&type=chunk) [Disclosure of Interests of Substantial Shareholders](index=25&type=section&id=%E6%A0%B9%E6%93%9A%E8%AD%89%E5%88%B8%E5%8F%8A%E6%9C%9F%E8%B2%A8%E6%A2%9D%E4%BE%8B%E9%A0%88%E6%8A%AB%E9%9C%B2%E7%9A%84%E5%85%B6%E4%BB%96%E6%AC%8A%E7%9B%8A) As of June 30, 2025, key substantial shareholders included Communications Group, China Merchants Expressway, BlackRock, Inc, and JP Morgan Chase & Co, with varying long and short positions in the Company's shares Interests of Substantial Shareholders (as of June 30, 2025) | Substantial Shareholder | Capacity | Number of shares held | % of Issued Share Capital | | :--- | :--- | :--- | :--- | | Communications Group | Beneficial owner (Domestic Shares) | 4,014,778,800 | 100% (Domestic Shares) | | Communications Group (via subsidiaries) | Indirect interest (H Shares) | 72,471,195 | 3.66% (H Shares) | | China Merchants Expressway | Beneficial owner (H Shares) | 363,914,280 (L) | 18.39% (H Shares) | | BlackRock, Inc | Interest of controlled corporation (H Shares) | 140,124,775 (L) | 7.08% (H Shares) | | BlackRock, Inc | Interest of controlled corporation (H Shares) | 18,924,000 (S) | 0.96% (H Shares) | | JP Morgan Chase & Co | Person having a security interest in shares (H Shares) | 123,101,175 (L) | 6.22% (H Shares) | | JP Morgan Chase & Co | Person having a security interest in shares (H Shares) | 4,768,798 (S) | 0.24% (H Shares) | | JP Morgan Chase & Co | Person having a security interest in shares (H Shares) | 77,461,881 (P) | 3.91% (H Shares) | [Corporate Governance Compliance](index=26&type=section&id=%E9%81%B5%E5%AE%88%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB%E5%AE%88%E5%89%87%E5%8F%8A%E6%A8%99%E6%BA%96%E5%AE%88%E5%89%87) The Company complied with the code provisions of the Corporate Governance Code and the directors adhered to the Model Code for securities transactions throughout the period - The Company complied with the code provisions of the Corporate Governance Code and adopted the recommended best practices during the Period[57](index=57&type=chunk) - The directors confirmed full compliance with the Model Code and the Company's own code for directors' securities transactions[57](index=57&type=chunk) [Employees and Remuneration Policy](index=26&type=section&id=%E5%93%A1%E5%B7%A5%E5%8F%8A%E8%96%AA%E9%85%AC%E6%94%BF%E7%AD%96) As of June 30, 2025, the Group employed 10,358 staff, with remuneration determined by market conditions and individual performance Employee Distribution (as of June 30, 2025) | Business Segment | No. of Employees on June 30, 2025 | No. of Employees on Dec 31, 2024 | | :--- | :--- | :--- | | Expressway Operations | 5,097 | 4,969 | | Securities Business | 5,261 | 5,302 | | **Group Total** | **10,358** | **10,271** | - Remuneration and benefits are maintained at competitive levels and are determined based on market conditions and the performance, qualifications, and experience of individual employees[60](index=60&type=chunk) [Future Plans for Material Investments](index=27&type=section&id=%E6%9C%AA%E4%BE%86%E4%BD%9C%E9%87%8D%E5%A4%A7%E6%8A%95%E8%B3%87%E6%88%96%E8%B3%BC%E5%85%A5%E8%B3%87%E6%9C%AC%E8%B3%87%E7%94%A2%E7%9A%84%E8%A8%88%E5%8A%83) In H2 2025, the Group plans to continue several expressway expansion projects and commence construction of the Yong-Zhou Expressway Connection (Phase II), with no other material investment plans - In H2 2025, the Group plans to continue the expansion projects for Zhajiasu Expressway, the Jinhua Section, and the Shaoxing Section of Yongjin Expressway[61](index=61&type=chunk) - The Group plans to commence the construction of the Yong-Zhou Expressway Connection (Phase II) project[61](index=61&type=chunk) - Funding sources will include internal resources, borrowings (if applicable), proceeds from the rights issue, and government subsidies[61](index=61&type=chunk) [Changes in Directors' Information](index=27&type=section&id=%E8%91%A3%E4%BA%8B%E8%B3%87%E6%96%99%E8%AE%8A%E6%9B%B4) There were no material changes to the directors' information during the reporting period - There were no material changes in the directors' information during the reporting period and up to the date of this report[62](index=62&type=chunk) [Directors' Responsibility Statement](index=28&type=section&id=%E6%9C%AC%E5%85%AC%E5%8F%B8%E8%91%A3%E4%BA%8B%E5%B0%8D%E4%B8%AD%E6%9C%9F%E5%A0%B1%E5%91%8A%E5%92%8C%E8%B3%AC%E7%9B%AE%E7%9A%84%E8%B2%AC%E4%BB%BB%E8%81%B2%E6%98%8E) The directors confirmed the fair presentation of the Group's financial position and performance in the condensed consolidated financial statements and the interim report - The directors confirm that the condensed consolidated financial statements give a true and fair view of the Group's financial position and profit[64](index=64&type=chunk) - The directors confirm that the management discussion and analysis in the interim report provides a fair review of the Group's business development and performance[64](index=64&type=chunk) - The directors confirm that the interim report provides a fair review of significant related party transactions and changes during the period[64](index=64&type=chunk) [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=29&type=section&id=%E7%B0%A1%E6%98%8E%E5%90%88%E4%BD%B5%E6%90%8D%E7%9B%8A%E5%8F%8A%E5%85%B6%E4%BB%96%E7%B6%9C%E5%90%88%E6%94%B6%E7%9B%8A%E8%A1%A8) [Overview of Profit or Loss and Comprehensive Income](index=29&type=section&id=%E7%B0%A1%E6%98%8E%E5%90%88%E4%BD%B5%E6%90%8D%E7%9B%8A%E5%8F%8A%E5%85%B6%E4%BB%96%E7%B6%9C%E5%90%88%E6%94%B6%E7%9B%8A%E8%A1%A8) The Group's H1 2025 revenue was RMB 8.685 billion, a 3.8% YoY increase, while profit for the period grew 17.4% to RMB 3.925 billion, driven by a 146.4% surge in securities investment income Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (For the 6 months ended June 30, 2025) | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Revenue | 8,685,457 | 8,367,599 | | Cost of sales | (5,244,295) | (4,681,165) | | Gross profit | 3,441,162 | 3,686,434 | | Securities investment income | 1,416,097 | 574,768 | | Profit before tax | 4,864,215 | 4,155,754 | | Profit for the period | 3,924,615 | 3,343,806 | | Profit attributable to owners of the Company | 2,787,482 | 2,680,010 | | Basic earnings per share (RMB cents) | 46.51 | 44.72 | | Diluted earnings per share (RMB cents) | 46.51 | 44.04 | - **Securities investment income surged by 146.4% YoY**, serving as a key driver for the growth in profit for the period[65](index=65&type=chunk) - Finance costs decreased by **17.6%** from RMB 910 million in 2024 to RMB 750 million in 2025[65](index=65&type=chunk) [Condensed Consolidated Statement of Financial Position](index=31&type=section&id=%E7%B0%A1%E6%98%8E%E5%90%88%E4%BD%B5%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81%E8%A1%A8) [Statement of Financial Position](index=31&type=section&id=%E7%B0%A1%E6%98%8E%E5%90%88%E4%BD%B5%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81%E8%A1%A8) As of June 30, 2025, the Group's total assets were RMB 260.443 billion, a 19.6% increase from year-end 2024, while total liabilities grew 23.2% to RMB 176.763 billion Condensed Consolidated Statement of Financial Position (as of June 30, 2025) | Indicator | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Non-current assets | 77,398,780 | 71,258,072 | | Current assets | 183,044,097 | 145,924,295 | | **Total assets** | **260,442,877** | **217,182,367** | | Current liabilities | 144,392,083 | 108,265,977 | | Non-current liabilities | 32,370,690 | 35,218,026 | | **Total liabilities** | **176,762,773** | **143,484,003** | | Equity attributable to owners of the Company | 46,432,023 | 46,040,953 | | Non-controlling interests | 37,248,081 | 27,657,411 | | **Total equity** | **83,680,104** | **73,698,364** | - **Goodwill increased significantly** from RMB 86.867 million at year-end 2024 to RMB 749 million as of June 30, 2025, primarily due to a business combination[68](index=68&type=chunk)[116](index=116&type=chunk) - Bank balances held on behalf of customers and clearing settlement funds grew by **37.5%** from RMB 49.066 billion at year-end 2024 to RMB 67.491 billion[68](index=68&type=chunk) [Condensed Consolidated Statement of Changes in Equity](index=33&type=section&id=%E7%B0%A1%E6%98%8E%E5%90%88%E4%BD%B5%E6%AC%8A%E7%9B%8A%E8%AE%8A%E5%8B%95%E8%A1%A8) [Analysis of Changes in Equity](index=33&type=section&id=%E7%B0%A1%E6%98%8E%E5%90%88%E4%BD%B5%E6%AC%8A%E7%9B%8A%E8%AE%8A%E5%8B%95%E8%A1%A8) As of June 30, 2025, equity attributable to owners was RMB 46.432 billion, with total equity changes driven mainly by a RMB 9.0 billion increase in non-controlling interests from a subsidiary acquisition Condensed Consolidated Statement of Changes in Equity (as of June 30, 2025) | Indicator | June 30, 2025 (RMB thousand) | January 1, 2025 (RMB thousand) | | :--- | :--- | :--- | | Share capital | 5,993,801 | 5,993,801 | | Share premium | 7,805,445 | 7,805,445 | | Statutory reserve | 6,885,424 | 6,885,424 | | Capital reserve | 1,712 | 1,712 | | Revaluation reserve | 412,397 | 499,133 | | Exchange translation reserve | 8,929 | 10,992 | | Retained profits | 14,094,699 | 11,307,217 | | **Subtotal of equity attributable to owners of the Company** | **46,432,023** | **46,040,953** | | Non-controlling interests | 37,248,081 | 27,657,411 | | **Total** | **83,680,104** | **73,698,364** | - **Non-controlling interests increased significantly by RMB 9.0 billion** due to the acquisition of a subsidiary[72](index=72&type=chunk) - The distribution of the 2024 dividend, amounting to **RMB 2.308 billion**, led to a decrease in retained profits[72](index=72&type=chunk) [Condensed Consolidated Statement of Cash Flows](index=35&type=section&id=%E7%B0%A1%E6%98%8E%E5%90%88%E4%BD%B5%E7%8F%BE%E9%87%91%E6%B5%81%E9%87%8F%E8%A1%A8) [Cash Flow Overview](index=35&type=section&id=%E7%B0%A1%E6%98%8E%E5%90%88%E4%BD%B5%E7%8F%BE%E9%87%91%E6%B5%81%E9%87%8F%E8%A1%A8) The Group's net cash inflow from operating activities in H1 2025 was RMB 4.905 billion, a decrease from the prior year, resulting in a net decrease in cash of RMB 3.448 billion Condensed Consolidated Statement of Cash Flows (For the 6 months ended June 30, 2025) | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Net cash from operating activities | 4,905,185 | 6,491,968 | | Net cash used in investing activities | (5,411,598) | (7,693,002) | | Net cash used in financing activities | (2,941,154) | (1,999,731) | | Net decrease in cash and cash equivalents | (3,447,567) | (3,200,765) | | Cash and cash equivalents at beginning of period | 20,932,480 | 23,830,440 | | Cash and cash equivalents at end of period | 17,475,811 | 20,631,944 | - Net cash inflow from operating activities **decreased by 24.59% YoY**[74](index=74&type=chunk) - Net cash outflow from investing activities **decreased by 29.66% YoY**[74](index=74&type=chunk) [Notes to the Condensed Consolidated Financial Statements](index=36&type=section&id=%E7%B0%A1%E6%98%8E%E5%90%88%E4%BD%B5%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8%E9%99%84%E8%A8%BB) [Basis of Preparation](index=36&type=section&id=%E5%91%88%E5%A0%B1%E5%9F%BA%E6%BA%96) These condensed consolidated financial statements have been prepared in accordance with Hong Kong Accounting Standard 34 and the applicable disclosure requirements of the Hong Kong Stock Exchange Listing Rules - These financial statements have been prepared in accordance with **Hong Kong Accounting Standard 34** and Appendix 16 of the Listing Rules[75](index=75&type=chunk) [Principal Accounting Policies](index=36&type=section&id=%E4%B8%BB%E8%A6%81%E6%9C%83%E8%A8%88%E6%94%BF%E7%AD%96) The financial statements are prepared under the historical cost convention, with certain financial instruments measured at fair value, and the accounting policies adopted are consistent with the 2024 annual report - The financial statements are prepared under the **historical cost convention**, except for certain financial instruments measured at fair value[76](index=76&type=chunk) - The adoption of revised Hong Kong Financial Reporting Standards had **no material impact** on the Group's financial position, performance, or disclosures[77](index=77&type=chunk) [Revenue and Segment Information](index=37&type=section&id=%E6%94%B6%E7%9B%8A%E5%8F%8A%E5%88%86%E9%83%A8%E8%B3%87%E6%96%99) The Group's H1 2025 total revenue was RMB 8.685 billion, with expressway operations contributing 59.1% and securities business contributing 36.6%, the latter showing strong 13.4% revenue growth Segment Revenue and Profit (For the 6 months ended June 30, 2025) | Segment | 2025 Revenue (RMB thousand) | 2024 Revenue (RMB thousand) | Revenue YoY Change | 2025 Profit (RMB thousand) | 2024 Profit (RMB thousand) | Profit YoY Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Expressway Operations | 5,132,493 | 5,112,572 | 0.4% | 2,258,255 | 2,125,371 | 6.2% | | Securities Business | 3,182,990 | 2,805,936 | 13.4% | 1,258,411 | 803,521 | 56.6% | | Other Businesses | 369,974 | 449,091 | -17.6% | 407,949 | 414,914 | -1.7% | | **Total** | **8,685,457** | **8,367,599** | **3.8%** | **3,924,615** | **3,343,806** | **17.4%** | Major Business Revenue Breakdown (For the 6 months ended June 30, 2025) | Business Type | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Expressway operations revenue | 5,132,493 | 5,112,572 | | Securities business commission and fee income | 1,886,362 | 1,609,014 | | Securities business interest income | 1,296,628 | 1,196,922 | | Hotel and catering revenue | 49,801 | 51,791 | | Construction service revenue | 305,722 | 376,475 | | PPP business revenue | 14,451 | 20,825 | | **Total** | **8,685,457** | **8,367,599** | [Other Income, Gains and Losses](index=38&type=section&id=%E5%85%B6%E4%BB%96%E6%94%B6%E7%9B%8A%E5%8F%8A%E5%88%A9%E5%BE%97%E5%92%8C%E6%90%8D%E5%A4%B1) The Group's other income, gains and losses totaled RMB 231 million in H1 2025, a significant decrease from RMB 447 million in the prior year, mainly due to net foreign exchange and spot trading losses Other Income, Gains and Losses (For the 6 months ended June 30, 2025) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Interest income from financial institutions | 230,786 | 234,017 | | Rental income | 34,985 | 37,075 | | (Loss)/gain on fair value changes of derivative component of convertible bonds | (10,022) | 2,987 | | Net foreign exchange (loss)/gain | (36,183) | 2,914 | | Net (loss)/gain on spot trading | (97,186) | 29,297 | | Management fee income | 10,354 | 10,033 | | Compensation | 42,093 | 25,960 | | Gain on disposal of assets | 5,326 | 20,524 | | Others | 51,158 | 83,757 | | **Total** | **231,311** | **446,564** | - The period recorded a **net foreign exchange loss of RMB 36.183 million** and a **net spot trading loss of RMB 97.186 million**, compared to gains in the same period last year[81](index=81&type=chunk) [Finance Costs](index=39&type=section&id=%E8%9E%8D%E8%B3%87%E6%88%90%E6%9C%AC) The Group's finance costs in H1 2025 totaled RMB 750 million, a 17.6% decrease from RMB 910 million in the prior year, mainly due to lower interest expenses on borrowings and bonds Finance Costs Breakdown (For the 6 months ended June 30, 2025) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Bank and other borrowings | 245,688 | 316,129 | | Short-term financing bills | 79,260 | 14,431 | | Bonds payable | 410,041 | 450,865 | | Convertible bonds | 5,154 | 116,771 | | Lease liabilities | 11,128 | 11,759 | | Less: Capitalised interest expense | 1,737 | – | | **Total** | **749,534** | **909,955** | - Interest expense on convertible bonds **decreased significantly** from RMB 117 million in the prior year period to RMB 5.154 million[83](index=83&type=chunk) [Profit Before Tax](index=39&type=section&id=%E9%99%A4%E7%A8%85%E5%89%8D%E6%BA%A2%E5%88%A9) The Group's profit before tax for H1 2025 was RMB 4.864 billion, a 17.0% increase from RMB 4.156 billion in the prior year, driven by higher investment income and lower finance costs Items in Profit Before Tax Calculation (For the 6 months ended June 30, 2025) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Depreciation of property, plant and equipment | 372,101 | 449,827 | | Amortisation of expressway operating rights | 1,342,873 | 1,356,384 | | Amortisation of other intangible assets | 67,170 | 53,201 | | Depreciation of right-of-use assets | 77,786 | 106,271 | - Depreciation of property, plant and equipment and depreciation of right-of-use assets both decreased[84](index=84&type=chunk) [Income Tax Expense](index=40&type=section&id=%E6%89%80%E5%BE%97%E7%A8%85%E9%96%8B%E6%94%AF) The Group's income tax expense for H1 2025 was RMB 940 million, a 15.8% increase from RMB 812 million in the prior year, with the corporate income tax rate for Chinese subsidiaries at 25% Income Tax Expense Breakdown (For the 6 months ended June 30, 2025) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | PRC Enterprise Income Tax | 970,386 | 572,230 | | Deferred tax | (30,786) | 239,718 | | **Total** | **939,600** | **811,948** | - The corporate income tax rate for Chinese subsidiaries is **25%**[85](index=85&type=chunk) - The Group had no estimated assessable profit in Hong Kong for the period, thus no provision for Hong Kong Profits Tax was made[86](index=86&type=chunk) [Earnings Per Share](index=40&type=section&id=%E6%AF%8F%E8%82%A1%E7%9B%88%E5%88%A9) The Group's basic earnings per share for H1 2025 was RMB 46.51 cents, a 4.0% YoY increase, while diluted earnings per share was RMB 46.51 cents, a 5.6% YoY increase Earnings Per Share Data (For the 6 months ended June 30, 2025) | Indicator | 2025 (RMB thousand/thousand shares) | 2024 (RMB thousand/thousand shares) | | :--- | :--- | :--- | | Profit for the period attributable to owners of the Company | 2,787,482 | 2,680,010 | | Profit for the purpose of basic earnings per share | 2,787,482 | 2,680,010 | | Profit for the purpose of diluted earnings per share | 2,818,899 | 2,656,901 | | Number of ordinary shares for basic earnings per share | 5,993,801 | 5,993,498 | | Weighted average number of ordinary shares for diluted earnings per share | 6,032,485 | 6,032,466 | | **Basic earnings per share (RMB cents)** | **46.51** | **44.72** | | **Diluted earnings per share (RMB cents)** | **46.51** | **44.04** | [Accounts Receivable](index=41&type=section&id=%E6%87%89%E6%94%B6%E8%B3%AC%E6%AC%BE) As of June 30, 2025, the Group's accounts receivable (net of credit loss allowance) was RMB 1.338 billion, a 27.4% increase from year-end 2024, primarily from expressway tolls and securities business fees Accounts Receivable Overview (as of June 30, 2025) | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Accounts receivable (contracts with customers) | 1,362,757 | 1,070,246 | | Less: Allowance for credit losses | (24,415) | (19,748) | | **Total** | **1,338,342** | **1,050,498** | Ageing Analysis of Accounts Receivable (as of June 30, 2025) | Ageing | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Within 3 months | 681,205 | 489,187 | | 3 months to 1 year | 339,549 | 391,596 | | 1 to 2 years | 257,939 | 168,839 | | Over 2 years | 59,649 | 876 | | **Total** | **1,338,342** | **1,050,498** | - No credit period is granted to customers of the expressway business, with accounts receivable mainly comprising toll fees[89](index=89&type=chunk) [Loans to Customers Arising from Margin Financing Business](index=42&type=section&id=%E8%9E%8D%E8%B3%87%E8%9E%8D%E5%88%B8%E6%A5%AD%E5%8B%99%E7%94%A2%E7%94%9F%E7%9A%84%E5%AE%A2%E6%88%B6%E8%B2%B8%E6%AC%BE) As of June 30, 2025, the Group's loans and interest to customers from margin financing amounted to RMB 29.113 billion, a 20.18% increase from year-end 2024, secured by client collateral valued at RMB 90.054 billion - Loans and interest to customers from the margin financing business amounted to **RMB 29.113 billion**, a **20.18% increase**[93](index=93&type=chunk) - The loans are secured by customers' stock securities and cash funds held as collateral[93](index=93&type=chunk) - The undiscounted total value of pledged stock securities as collateral for financing was **RMB 90.054 billion**, and cash collateral obtained from customers was **RMB 6.988 billion**[93](index=93&type=chunk) [Other Receivables and Prepayments](index=43&type=section&id=%E5%85%B6%E4%BB%96%E6%87%89%E6%94%B6%E6%AC%BE%E5%92%8C%E9%A0%90%E4%BB%98%E6%AC%BE) As of June 30, 2025, the Group's other receivables and prepayments totaled RMB 7.505 billion, a 41.1% increase from year-end 2024, mainly driven by a rise in trading deposits Other Receivables and Prepayments Breakdown (as of June 30, 2025) | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Non-current prepayments | 517,840 | 242,873 | | Non-current receivables under government cooperation projects | 758,661 | 742,735 | | Current prepayments | 437,292 | 491,682 | | Current trading deposits | 4,691,307 | 3,296,745 | | Current standard warehouse receipts | 457,997 | – | | Current receivables under government cooperation projects | 241,912 | 246,762 | | **Total** | **7,504,563** | **5,317,878** | - Trading deposits increased by **42.28%** from RMB 3.297 billion at year-end 2024 to RMB 4.691 billion[95](index=95&type=chunk) [Financial Assets Purchased under Resale Agreements](index=44&type=section&id=%E8%B2%B7%E5%85%A5%E8%BF%94%E5%94%AE%E9%87%91%E8%9E%8D%E8%B3%87%E7%94%A2) As of June 30, 2025, the Group's financial assets purchased under resale agreements stood at RMB 5.237 billion, with collateral fair value of RMB 10.202 billion Financial Assets Purchased under Resale Agreements Breakdown (as of June 30, 2025) | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Bonds | 2,677,571 | 2,858,303 | | Stock securities | 2,660,604 | 2,734,995 | | Less: Impairment allowance | (101,310) | (102,242) | | **Total** | **5,236,865** | **5,491,056** | - The fair value of the collateral securities was **RMB 10.202 billion**[97](index=97&type=chunk) [Accounts Payable](index=45&type=section&id=%E6%87%89%E4%BB%98%E8%B3%AC%E6%AC%BE) As of June 30, 2025, the Group's accounts payable was RMB 998 million, a 12.7% decrease from year-end 2024, primarily comprising payables for expressway maintenance Ageing Analysis of Accounts Payable (as of June 30, 2025) | Ageing | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Within 3 months | 232,220 | 537,785 | | 3 months to 1 year | 283,295 | 124,735 | | 1 to 2 years | 159,807 | 132,298 | | 2 to 3 years | 56,735 | 76,991 | | Over 3 years | 265,553 | 271,397 | | **Total** | **997,610** | **1,143,206** | - Accounts payable within three months decreased from RMB 538 million at year-end 2024 to RMB 232 million[99](index=99&type=chunk) [Other Payables and Accruals](index=46&type=section&id=%E5%85%B6%E4%BB%96%E6%87%89%E4%BB%98%E6%AC%BE%E5%8F%8A%E6%87%89%E8%A8%88%E6%AC%BE%E9%A0%85) As of June 30, 2025, the Group's other payables and accruals stood at RMB 10.512 billion, a slight increase from year-end 2024, mainly comprising staff costs payable and trading deposits Other Payables and Accruals Breakdown (as of June 30, 2025) | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Staff costs payable | 2,159,036 | 1,550,259 | | Trading deposits | 6,551,357 | 5,937,262 | | Payables to fund company clients in transit | 179,981 | 503,337 | | Consideration payable for equity | – | 779,016 | | **Total** | **10,511,680** | **10,132,003** | - Staff costs payable increased by **39.27%** from RMB 1.55 billion at year-end 2024 to RMB 2.159 billion[100](index=100&type=chunk) - Payables to fund company clients in transit decreased from RMB 503 million at year-end 2024 to RMB 180 million[100](index=100&type=chunk) [Financial Assets Sold under Repurchase Agreements](index=47&type=section&id=%E8%B3%A3%E5%87%BA%E5%9B%9E%E8%B3%BC%E9%87%91%E8%9E%8D%E8%B3%87%E7%94%A2) As of June 30, 2025, the Group's financial assets sold under repurchase agreements increased by 33.1% to RMB 30.796 billion, primarily consisting of bonds where the Group retained substantial risks and rewards Financial Assets Sold under Repurchase Agreements Breakdown (as of June 30, 2025) | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Bonds | 30,796,348 | 23,139,450 | | **Total** | **30,796,348** | **23,139,450** | - Repurchase agreements involve the sale of securities with a simultaneous agreement to repurchase them at a fixed price on a future date[102](index=102&type=chunk) - The Group has retained substantially all the credit risks, market risks, and rewards associated with the securities sold[102](index=102&type=chunk) [Convertible Bonds](index=48&type=section&id=%E5%8F%AF%E8%BD%89%E6%8F%9B%E5%82%B5%E5%88%B8) The Company issued EUR 230 million zero-coupon convertible bonds in 2021, and has issued a notice to redeem all outstanding bonds on September 9, 2025 - In January 2021, the Company issued **EUR 230 million** principal amount of zero-coupon convertible bonds due 2026[104](index=104&type=chunk) - Bondholders have the right to convert the bonds into ordinary shares at an initial conversion price of HKD 8.83 per H share, with the latest conversion price being **HKD 5.84**[105](index=105&type=chunk) - The Company issued a redemption notice on July 29, 2025, to **redeem all outstanding bonds on September 9, 2025**[114](index=114&type=chunk) Movement of Convertible Bonds (as of June 30, 2025) | Item | Debt Component (RMB thousand) | Derivative Component (RMB thousand) | Total (RMB thousand) | | :--- | :--- | :--- | :--- | | As at December 31, 2024 | 194,709 | 30,158 | 224,867 | | Exchange realignment | 21,654 | – | 21,654 | | Interest expense | 5,154 | – | 5,154 | | Loss on fair value changes | – | 10,022 | 10,022 | | **As at June 30, 2025** | **221,517** | **40,180** | **261,697** | [Business Combination](index=52&type=section&id=%E6%A5%AD%E5%8B%99%E5%90%88%E4%BD%B5) Zheshang Securities obtained control of Guodu Securities in May 2025 and consolidated it, resulting in goodwill of RMB 662 million from the RMB 5.373 billion acquisition cost - Zheshang Securities obtained control of Guodu Securities in May 2025 and has since included it in its consolidation scope[115](index=115&type=chunk) Fair Value of Guodu Securities at Acquisition Date | Item | Fair Value at Acquisition Date (RMB thousand) | | :--- | :--- | | Total assets | 37,036,994 | | Total liabilities | (23,325,838) | | Identifiable net assets | 13,711,156 | | Less: Minority interests | (9,000,056) | | Net assets acquired | 4,711,100 | | Goodwill | 662,164 | | **Total cost of combination** | **5,373,264** | [Related Party Transactions and Balances](index=53&type=section&id=%E9%97%9C%E9%80%A3%E6%96%B9%E4%BA%A4%E6%98%93%E5%8F%8A%E7%B5%90%E9%A4%98) The Group engaged in various transactions with related parties, including management services with Communications Group, road maintenance, construction costs, and financial services with associates - The Company provided management and administrative services to Communications Group and its subsidiaries, with service fees of **RMB 10.354 million** during the period[120](index=120&type=chunk) - The Group entered into road maintenance agreements with several subsidiaries of Communications Group, incurring road maintenance expenses of **RMB 137 million** during the period[122](index=122&type=chunk) - Jinhua Company and Zhajiasu Company paid **RMB 231 million** in construction costs to subsidiaries of Zhejiang Communications Construction Group for expressway expansion projects[122](index=122&type=chunk) - Zhejiang Communications Finance provided new short-term and long-term loans to Longli-Lilong Company and De'an Company, with interest expenses of **RMB 11.452 million** during the period[126](index=126&type=chunk)[127](index=127&type=chunk) - The Group placed deposits with Zhejiang Communications Finance, recognizing interest income of **RMB 34.389 million** during the period[128](index=128&type=chunk) - Zheshang Industrial engaged in OTC derivative transactions with Zheshang Zhongtuo Group, resulting in an investment loss of **RMB 2.918 million** during the period[131](index=131&type=chunk) - Zhajiasu Company provided an entrusted loan of **RMB 180 million** to China Merchants Expressway, earning interest income of **RMB 1.304 million** during the period[132](index=132&type=chunk) [Fair Value Measurement of Financial Instruments](index=60&type=section&id=%E9%87%91%E8%9E%8D%E5%B7%A5%E5%85%B7%E7%9A%84%E5%85%AC%E5%85%81%E5%83%B9%E5%80%BC%E8%A8%88%E9%87%8F) The Group's financial instruments are measured at fair value using a three-level hierarchy, with Level 3 instruments, including unlisted equity investments, valued using unobservable inputs - The fair value of financial instruments is measured using a three-level hierarchy: Level 1 (quoted prices in active markets), Level 2 (observable inputs), and Level 3 (unobservable inputs)[134](index=134&type=chunk)[135](index=135&type=chunk) Movement of Level 3 Financial Instruments (as of June 30, 2025) | Item | Financial assets at FVTPL (RMB thousand) | Derivative financial assets (RMB thousand) | Financial liabilities at FVTPL (RMB thousand) | Derivative financial liabilities (RMB thousand) | Total (RMB thousand) | | :--- | :--- | :--- | :--- | :--- | :--- | | As at December 31, 2024 | 471,564 | 532,726 | 300,567 | 419,781 | 1,724,638 | | Additions | 169,000 | – | – | 18,006 | 187,006 | | Disposals | (400) | (227,228) | – | (21,405) | (249,033) | | Fair value changes | 6,329 | – | (464) | (16,302) | (10,437) | | **As at June 30, 2025** | **646,493** | **305,498** | **300,103** | **400,080** | **1,652,174** | - The fair value of the debt component of the 2021 convertible bonds is classified as Level 3, determined using estimated cash flows and a discount rate reflecting the Company's credit risk[149](index=149&type=chunk) [Summary of Financial Information of the Company](index=69&type=section&id=%E6%9C%AC%E5%85%AC%E5%8F%B8%E8%B2%A1%E5%8B%99%E8%B3%87%E6%96%99%E6%91%98%E8%A6%81) As of June 30, 2025, the Company's interests in subsidiaries stood at RMB 12.24 billion, with total assets of RMB 43.536 billion and total equity of RMB 25.743 billion Summary of Financial Information of the Company (as of June 30, 2025) | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Interests in subsidiaries | 12,239,875 | 11,988,197 | | Amounts due from subsidiaries | 1,280,155 | 1,280,171 | | Other assets | 30,015,690 | 32,034,514 | | **Total assets** | **43,535,720** | **45,302,882** | | Total liabilities | 17,793,086 | 18,236,263 | | Share capital | 5,993,801 | 5,993,801 | | Reserves | 19,748,833 | 21,072,818 | | **Total equity** | **25,742,634** | **27,066,619** | [Events After the Reporting Period](index=69&type=section&id=%E6%9C%9F%E5%BE%8C%E4%BA%8B%E9%A0%85) The Company is planning a major asset restructuring with Zhejiang Zhenyang Development Co, Ltd, involving a share-swap merger, which is still in the planning stage and subject to regulatory approval - The Company is planning a major asset restructuring with Zhejiang Zhenyang Development Co, Ltd, through the issuance of A-shares to absorb and merge Zhenyang Development via a share swap[152](index=152&type=chunk) - This transaction is still in the planning stage, no formal agreement has been signed, and it is subject to approval from relevant regulatory authorities[152](index=152&type=chunk) [Approval of the Condensed Consolidated Financial Statements](index=69&type=section&id=%E7%B0%A1%E6%98%8E%E5%90%88%E4%BD%B5%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8%E4%B9%8B%E6%A0%B8%E5%87%86) The condensed consolidated financial statements were approved by the Board of Directors on August 22, 2025 - The condensed consolidated financial statements were approved by the Board of Directors on August 22, 2025[153](index=153&type=chunk) [Corporate Information](index=70&type=section&id=%E5%85%AC%E5%8F%B8%E8%B3%87%E6%96%99) [Company's Basic Information](index=70&type=section&id=%E5%85%AC%E5%8F%B8%E8%B3%87%E6%96%99) This section provides detailed corporate information for Zhejiang Expressway Co, Ltd, including its board members, legal advisors, auditors, and H-share listing details - Lists Board of Directors members including Chairman Mr Yuan Yingjie and Executive Directors Mr Wu Wei and Mr Li Wei[154](index=154&type=chunk) - The Company's registered office is located at 199 Wuxing Road, Shangcheng District, Hangzhou, Zhejiang Province, PRC[154](index=154&type=chunk) - The H-shares are listed on The Stock Exchange of Hong Kong Limited under the stock code **0576**[155](index=155&type=chunk) [Group Structure Chart](index=72&type=section&id=%E9%9B%86%E5%9C%98%E6%9E%B6%E6%A7%8B%E5%9C%96) [Group Company and Business Structure](index=72&type=section&id=%E9%9B%86%E5%9C%98%E6%9E%B6%E6%A7%8B%E5%9C%96) This section presents a chart of the Group's company and business structure as of August 22, 2025, outlining its subsidiaries, associates, and joint ventures across various business segments - The chart illustrates the equity relationships between the Company and its subsidiaries, associates, and joint ventures[157](index=157&type=chunk) - It clearly labels the names and lengths of major expressway sections, such as the Shanghai-Hangzhou Expressway (102.6 km) and the Zhoushan Cross-sea Bridge (46.3 km)[157](index=157&type=chunk) - It showcases diversified business segments including financial services, investment funds, financial leasing, and banking[157](index=157&type=chunk) [Financial Summary](index=73&type=section&id=%E8%B2%A1%E5%8B%99%E6%91%98%E8%A6%81) [Key Financial Indicator Charts](index=73&type=section&id=%E8%B2%A1%E5%8B%99%E6%91%98%E8%A6%81) This section provides charts illustrating the Group's key financial indicators from 2021 to H1 2025, offering a visual overview of trends in revenue, net profit, EPS, and ROE - Charts show the revenue trend from 2021 to H1 2025, with H1 2025 revenue at **RMB 8.685 billion**[158](index=158&type=chunk)[159](index=159&type=chunk) - Charts show the net profit trend from 2021 to H1 2025, with H1 2025 net profit at **RMB 3.925 billion**[160](index=160&type=chunk)[161](index=161&type=chunk) - Charts show the earnings per share trend from 2021 to H1 2025, with H1 2025 EPS at **RMB 46.51 cents**[162](index=162&type=chunk)[163](index=163&type=chunk) - Charts show the return on equity trend from 2021 to H1 2025, with H1 2025 ROE at **6.0%**[164](index=164&type=chunk)[165](index=165&type=chunk) [Map of Expressways in Zhejiang Province](index=74&type=section&id=%E6%B5%99%E6%B1%9F%E7%9C%81%E4%B9%8B%E9%AB%98%E9%80%9F%E5%85%AC%E8%B7%AF%E5%9C%96) [Zhejiang Province Expressway Network](index=74&type=section&id=%E6%B5%99%E6%B1%9F%E7%9C%81%E4%B9%8B%E9%AB%98%E9%80%9F%E5%85%AC%E8%B7%AF%E5%9C%96) This section provides a map of the expressway network in Zhejiang Province, visually presenting the geographical distribution of the Group's expressways and their strategic locations - The map displays the expressway network within Zhejiang Province[166](index=166&type=chunk)[167](index=167&type=chunk) - It helps in understanding the geographical location and strategic advantages of the Group's expressway assets[166](index=166&type=chunk)[167](index=167&type=chunk)

[Company Overview](index=1&type=section&id=Company%20Overview) This section provides an overview of the company's financial performance, operational highlights, and strategic outlook across its game and platform businesses [Financial Highlights](index=1&type=section&id=Financial%20Highlights) XD Inc. achieved significant financial growth for the six months ended June 30, 2025, with revenue increasing by 38.8% year-on-year and profit attributable to owners of the company surging by 268.0% For the Six Months Ended June 30 Financial Highlights | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 3,081,986 | 2,220,567 | 38.8 | | Gross Profit | 2,252,758 | 1,496,811 | 50.5 | | Profit for the Period | 810,596 | 250,579 | 223.5 | | Profit for the Period Attributable to Owners of the Company | 754,856 | 205,102 | 268.0 | | Adjusted Profit for the Period* | 852,855 | 278,811 | 205.9 | | Adjusted Profit for the Period Attributable to Owners of the Company* | 795,650 | 237,290 | 235.3 | For the Six Months Ended June 30 Operating Data | Indicator | 2025 (thousand people) | 2024 (thousand people) | Change (%) | | :--- | :--- | :--- | :--- | | **Online Games** | | | | | Average MAU(1) | 11,409 | 9,534 | 19.7 | | Average MPU(2) | 1,322 | 1,092 | 21.1 | | **TapTap** | | | | | TapTap China App Average MAU | 43,625 | 43,242 | 0.9 | | TapTap International App Average MAU | 5,020 | 5,066 | -0.9 | [Business Review and Outlook](index=3&type=section&id=Business%20Review%20and%20Outlook) In the first half of 2025, the company's game and platform businesses achieved significant growth, driven by strong performance of key games and improved advertising algorithms on the TapTap platform - In the first half of 2025, the company's business continued to grow, with significant year-on-year increases in both revenue and operating profit[7](index=7&type=chunk) - Game business revenue increased by **39.4% year-on-year**, primarily driven by the strong performance of 'Ragnarok M: Origin', 'XD Town', and 'Torchlight: Infinite'[7](index=7&type=chunk) - TapTap platform business revenue achieved a **37.6% year-on-year growth**, benefiting from improved advertising algorithms and enhanced user engagement[7](index=7&type=chunk) [Game Business](index=3&type=section&id=我們的遊戲) The company's game business revenue grew by 39.4% in the first half of 2025, with an existing portfolio of 23 online games and 39 paid games - As of June 30, 2025, the company's existing game portfolio includes **23 online games** and **39 paid games**[8](index=8&type=chunk) [Online Games](index=3&type=section&id=網絡遊戲) Average monthly active users and average monthly paying users for online games increased by 19.7% and 21.1% year-on-year, respectively, primarily driven by new users attracted by the newly launched 'XD Town' - Average monthly active users for online games increased by **19.7% year-on-year**, and average monthly paying users increased by **21.1% year-on-year**, mainly driven by new users attracted by 'XD Town'[9](index=9&type=chunk) - 'Go! Muffin' has been launched in major global markets and is in its mature phase; 'XD Town' is highly popular in mainland China and is planned for future overseas launch[9](index=9&type=chunk)[11](index=11&type=chunk) - 'Ragnarok M: Origin' performed well and is planned for launch in other overseas markets in the second half of 2025; 'Torchlight: Infinite' continues to expand its player base through seasonal updates[11](index=11&type=chunk) [Key Games Under Development](index=4&type=section&id=在研的主要遊戲) The company considers self-developed games a core driver, continuously investing in R&D, with game R&D personnel increasing to 745 as of June 30, 2025 - The company considers self-developed games as one of its core drivers for development, continuously investing in R&D[10](index=10&type=chunk) - As of June 30, 2025, **745 employees** were engaged in game R&D, an increase of 21 from December 31, 2024[10](index=10&type=chunk) - Currently, one online game is under development, with several new games in pre-development[10](index=10&type=chunk) [Paid Games](index=5&type=section&id=付費遊戲) Paid game revenue increased by 14.2% year-on-year, primarily driven by 'Hero's Adventure' and 'Totally Accurate Battle Simulator' mobile games - In the first half of 2025, paid game revenue increased by **14.2%** compared to the same period last year[12](index=12&type=chunk) - 'Hero's Adventure' and 'Totally Accurate Battle Simulator' mobile games drove the overall performance[12](index=12&type=chunk) - Plans include increasing investment in TapTap PC to enrich the platform ecosystem, with 'Volcano Princess' mobile and PC versions and the upcoming dual-platform version of 'Dave the Diver' to be launched in the second half of the year[12](index=12&type=chunk) [TapTap Platform](index=5&type=section&id=TapTap) The TapTap platform is the company's core competitiveness, achieving continuous revenue growth by offering high-quality exclusive content, improving advertising algorithms, and enhancing user engagement - The TapTap platform is one of the company's core competencies and drivers, propelling user growth and revenue through high-quality content, products, and operational advantages[13](index=13&type=chunk) [TapTap China Version](index=5&type=section&id=TapTap%E4%B8%AD%E5%9C%8B%E7%89%88) TapTap China App's average MAU increased by 0.9% year-on-year to 43.6 million, with improved user engagement - TapTap China App's average MAU was **43.6 million**, a year-on-year increase of **0.9%**, with improved user engagement[14](index=14&type=chunk) - Revenue growth for TapTap was driven by upgrading the advertising system's underlying model, which enhanced advertising effectiveness on the platform[14](index=14&type=chunk) - TapTap PC and TapTap mini-games were officially launched, and an AI assistant module was added to TapTap to explore interactive game recommendations[14](index=14&type=chunk)[15](index=15&type=chunk) [TapTap International Version](index=6&type=section&id=TapTap%E5%9C%8B%E9%9A%9B%E7%89%88) TapTap International App's average monthly active users decreased by 0.9% year-on-year to 5.0 million - TapTap International App's average monthly active users were **5.0 million**, a year-on-year decrease of **0.9%**[16](index=16&type=chunk) - The international team is exploring long-term growth opportunities with limited resource investment and has not yet monetized TapTap International[16](index=16&type=chunk)[24](index=24&type=chunk) [Financial Review](index=6&type=section&id=Financial%20Review) This section details the company's financial performance, including revenue, costs, profits, and key expense categories, for the reporting period [Revenue](index=6&type=section&id=Revenue) For the six months ended June 30, 2025, the company's total revenue increased by 38.8% year-on-year to RMB 3,082.0 million, primarily from game business (67.2%) and TapTap platform business (32.8%) - Revenue primarily derived from game operations (online games and paid games) and online promotion services provided by the TapTap platform[17](index=17&type=chunk) Revenue Breakdown by Business Line | Business Line | 2025 Amount (RMB thousand) | 2025 Percentage of Revenue (%) | 2024 Amount (RMB thousand) | 2024 Percentage of Revenue (%) | | :--- | :--- | :--- | :--- | :--- | | Games | 2,071,260 | 67.2 | 1,486,257 | 66.9 | | Game Operations | 2,045,113 | 66.4 | 1,481,074 | 66.7 | | Online Games | 1,982,085 | 64.4 | 1,425,896 | 64.2 | | Paid Games | 63,028 | 2.0 | 55,178 | 2.5 | | Others | 26,147 | 0.8 | 5,183 | 0.2 | | TapTap Platform | 1,010,726 | 32.8 | 734,310 | 33.1 | | Total Revenue | 3,081,986 | 100.0 | 2,220,567 | 100.0 | [Game Revenue](index=7&type=section&id=遊戲) Game business revenue increased by 39.4% year-on-year to RMB 2,071.3 million - Game business revenue increased by **39.4%** year-on-year to **RMB 2,071.3 million**[20](index=20&type=chunk) - Online game revenue increased by **39.0%** year-on-year to **RMB 1,982.1 million**, primarily from self-developed games 'Ragnarok M: Origin', 'XD Town', and 'Torchlight: Infinite'[22](index=22&type=chunk) - Paid game revenue increased by **14.2%** year-on-year to **RMB 63.0 million**, mainly from 'Hero's Adventure' and other newly launched paid games[22](index=22&type=chunk) [TapTap Platform Revenue](index=8&type=section&id=TapTap%E5%B9%B3%E5%8F%B0) TapTap platform business revenue increased by 37.6% year-on-year to RMB 1,010.7 million, primarily due to improved advertising algorithms and enhanced user engagement - TapTap platform business revenue increased by **37.6%** year-on-year to **RMB 1,010.7 million**[23](index=23&type=chunk) - The increase in revenue was mainly due to improved advertising algorithms and enhanced user engagement[23](index=23&type=chunk) - The company has not yet monetized TapTap International[24](index=24&type=chunk) [Cost of Revenue](index=8&type=section&id=收入成本) For the six months ended June 30, 2025, cost of revenue increased by 14.6% year-on-year to RMB 829.2 million - Cost of revenue increased by **14.6%** year-on-year to **RMB 829.2 million**[25](index=25&type=chunk) Cost of Revenue by Business Line | Business Line | 2025 Amount (RMB thousand) | 2025 Percentage of Segment Revenue (%) | 2024 Amount (RMB thousand) | 2024 Percentage of Segment Revenue (%) | | :--- | :--- | :--- | :--- | :--- | | Games | 663,812 | 32.0 | 595,409 | 40.1 | | TapTap Platform | 165,416 | 16.4 | 128,347 | 17.5 | | Total | 829,228 | 26.9 | 723,756 | 32.6 | - The increase in game business cost of revenue was mainly due to higher commissions paid to payment and distribution channels from increased revenue from 'XD Town' and 'Torchlight: Infinite'[28](index=28&type=chunk) - The increase in TapTap platform business cost of revenue was primarily due to higher bandwidth and server hosting fees related to the advertising algorithm system[29](index=29&type=chunk) [Gross Profit and Gross Margin](index=9&type=section&id=毛利及毛利率) Gross profit increased by 50.5% year-on-year to RMB 2,252.8 million, with gross margin rising to 73.1% - Gross profit increased by **50.5%** year-on-year to **RMB 2,252.8 million**[30](index=30&type=chunk) - Gross margin was **73.1%**, higher than **67.4%** in the prior period[30](index=30&type=chunk) - The improvement in gross margin was mainly due to the strong performance of 'Ragnarok M: Origin' in overseas markets, increased contribution from game operation revenue recognized on a net basis, and improved gross margin for the TapTap platform segment[30](index=30&type=chunk) [Selling and Marketing Expenses](index=9&type=section&id=銷售及營銷開支) Selling and marketing expenses increased by 7.0% year-on-year to RMB 743.9 million, primarily due to increased performance-based compensation for sales and marketing personnel and higher professional and technical service fees - Selling and marketing expenses increased by **7.0%** year-on-year to **RMB 743.9 million**[31](index=31&type=chunk) - This was primarily due to increased performance-based compensation for sales and marketing personnel, and higher professional and technical service fees[31](index=31&type=chunk) [Research and Development Expenses](index=9&type=section&id=研發開支) R&D expenses increased by 30.8% year-on-year to RMB 548.9 million, mainly due to increased performance-based compensation for R&D personnel and higher professional and technical service fees - R&D expenses increased by **30.8%** year-on-year to **RMB 548.9 million**[33](index=33&type=chunk) - This was primarily due to increased performance-based compensation for R&D personnel, and higher professional and technical service fees[33](index=33&type=chunk) - The number of R&D personnel increased from **997** as of June 30, 2024, to **1,033** as of June 30, 2025[33](index=33&type=chunk) [General and Administrative Expenses](index=10&type=section&id=一般及行政開支) General and administrative expenses decreased by 8.9% year-on-year to RMB 126.0 million, primarily due to a reduction in share-based compensation expenses, partially offset by increased performance-based compensation for management and administrative personnel - General and administrative expenses decreased by **8.9%** year-on-year to **RMB 126.0 million**[34](index=34&type=chunk) - This was primarily due to a reduction in share-based compensation expenses, partially offset by increased performance-based compensation for management and administrative personnel[34](index=34&type=chunk) [Net Other Gains](index=10&type=section&id=其他收益%E6%B7%A8%E9%A1%8D) Net other gains decreased, with net exchange gains falling from RMB 11.8 million to RMB 9.9 million, and no gain on repurchase of convertible bonds this period - Net exchange gains decreased from **RMB 11.8 million** in the prior period of 2024 to **RMB 9.9 million** in 2025[35](index=35&type=chunk) - There was no gain on repurchase of convertible bonds in the first half of 2025, compared to **RMB 5.0 million** recorded in the prior period of 2024[35](index=35&type=chunk) [Income Tax Expense](index=10&type=section&id=所得稅%E9%96%8B%E6%94%AF) Income tax expense increased from RMB 31.5 million in the prior period of 2024 to RMB 70.1 million in 2025, comprising current income tax expense of RMB 67.8 million and deferred income tax expense of RMB 2.3 million - Income tax expense increased from **RMB 31.5 million** in the prior period of 2024 to **RMB 70.1 million** in 2025[36](index=36&type=chunk) - This includes current income tax expense of **RMB 67.8 million** and deferred income tax expense of **RMB 2.3 million**[36](index=36&type=chunk) [Profit for the Period](index=10&type=section&id=期內%E6%BA%A2%E5%88%A9) For the six months ended June 30, 2025, profit for the period significantly increased to RMB 810.6 million, compared to RMB 250.6 million in the prior period of 2024 - Profit for the period was **RMB 810.6 million**, a substantial increase compared to **RMB 250.6 million** in the prior period of 2024[37](index=37&type=chunk) [Profit for the Period Attributable to Owners of the Company](index=11&type=section&id=本公司%E6%AC%8A%E7%9B%8A%E6%8C%81%E6%9C%89%E4%BA%BA%E6%87%89%E4%BD%B5%E6%9C%9F%E5%85%A7%E6%BA%A2%E5%88%A9) For the six months ended June 30, 2025, profit for the period attributable to owners of the company was RMB 754.9 million, a substantial increase of 268.0% from RMB 205.1 million in the prior period of 2024 - Profit for the period attributable to owners of the company was **RMB 754.9 million**, an increase of **268.0%** from **RMB 205.1 million** in the prior period of 2024[38](index=38&type=chunk) [Other Financial Information](index=11&type=section&id=其他%E8%B2%A1%E5%8B%99%E8%B3%87%E6%96%99) Operating profit significantly increased to RMB 861.4 million, with EBITDA and adjusted EBITDA also showing substantial growth, reflecting improved operational efficiency Reconciliation of Operating Profit to EBITDA and Adjusted EBITDA | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Operating Profit | 861,361 | 270,513 | | EBITDA | 874,722 | 291,022 | | Adjusted EBITDA | 916,981 | 319,254 | [Non-IFRS Measures](index=12&type=section&id=非%E5%9C%8B%E9%9A%9B%E8%B2%A1%E5%8B%99%E5%A0%B1%E5%91%8A%E6%9C%83%E8%A8%88%E6%BA%96%E5%89%87%E8%A8%88%E9%87%8F) The company uses Non-IFRS measures (such as adjusted profit for the period and adjusted profit attributable to owners of the company) to assess core operational performance more clearly by excluding the impact of fair value changes in long-term investments and share-based compensation expenses - The company uses Non-IFRS measures to assess core operational performance, excluding the impact of fair value changes in long-term investments measured at fair value through profit or loss and share-based compensation expenses[40](index=40&type=chunk) Reconciliation of Adjusted Profit for the Period | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Profit for the Period | 810,596 | 250,579 | | Add: Share-based Compensation Expenses | 42,259 | 28,232 | | Adjusted Profit for the Period | 852,855 | 278,811 | Reconciliation of Adjusted Profit for the Period Attributable to Owners of the Company | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Profit for the Period Attributable to Owners of the Company | 754,856 | 205,102 | | Add: Share-based Compensation Expenses | 40,794 | 32,188 | | Adjusted Profit for the Period Attributable to Owners of the Company | 795,650 | 237,290 | [Liquidity and Capital Resources](index=13&type=section&id=Liquidity%20and%20Capital%20Resources) This section outlines the company's cash position, short-term investments, and gearing ratio, reflecting its financial stability and resource management [Cash Position and Short-Term Investments](index=13&type=section&id=流動資金%E5%8F%8A%E8%B3%87%E6%9C%AC%E8%B3%87%E6%BA%90) As of June 30, 2025, the company's total cash and short-term investments increased to RMB 3,182.5 million, primarily due to net cash flow generated from operating activities Cash Position and Short-Term Investments | Indicator | As of June 30, 2025 (RMB thousand) | As of December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Cash and Cash Equivalents | 2,971,628 | 2,781,173 | | Short-Term Investments | 210,848 | 128,984 | | Total | 3,182,476 | 2,910,157 | - The increase in cash position and short-term investments was mainly due to **net cash flow of RMB 637.5 million** generated from operating activities for the six months ended June 30, 2025[44](index=44&type=chunk) - As of June 30, 2025, the company had no borrowings or unutilized bank facilities[45](index=45&type=chunk) [Gearing Ratio](index=13&type=section&id=資產%E8%B2%A0%E5%82%B5%E6%AF%94%E7%8E%87) As of June 30, 2025, the company's gearing ratio was 28.9%, an improvement from 30.8% as of December 31, 2024, indicating a more robust financial structure - As of June 30, 2025, the gearing ratio was **28.9%**, an improvement compared to **30.8%** as of December 31, 2024[46](index=46&type=chunk) [Condensed Consolidated Financial Statements](index=14&type=section&id=Condensed%20Consolidated%20Financial%20Statements) This section presents the company's condensed consolidated statements of comprehensive income and financial position, offering a summary of its financial health and performance [Condensed Consolidated Statement of Comprehensive Income](index=14&type=section&id=Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) The condensed consolidated statement of comprehensive income shows significant growth in revenue, gross profit, and profit for the period for the six months ended June 30, 2025 Summary of Condensed Consolidated Statement of Comprehensive Income | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Revenue | 3,081,986 | 2,220,567 | | Gross Profit | 2,252,758 | 1,496,811 | | Operating Profit | 861,361 | 270,513 | | Profit for the Period | 810,596 | 250,579 | | Profit for the Period Attributable to Owners of the Company | 754,856 | 205,102 | | Basic Earnings Per Share (RMB) | 1.57 | 0.43 | | Diluted Earnings Per Share (RMB) | 1.54 | 0.43 | [Condensed Consolidated Statement of Financial Position](index=16&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) The condensed consolidated statement of financial position shows that as of June 30, 2025, total assets increased to RMB 4,510.8 million and total equity to RMB 3,206.8 million Summary of Condensed Consolidated Statement of Financial Position | Indicator | As of June 30, 2025 (RMB thousand) | As of December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Total Assets | 4,510,758 | 3,923,201 | | Non-Current Assets | 500,174 | 576,522 | | Current Assets | 4,010,584 | 3,346,679 | | Trade Receivables | 743,557 | 333,413 | | Cash and Cash Equivalents | 2,971,628 | 2,781,173 | | Total Equity | 3,206,757 | 2,714,619 | | Total Liabilities | 1,304,001 | 1,208,582 | [Notes to the Financial Statements](index=18&type=section&id=Notes%20to%20the%20Financial%20Statements) This section provides detailed notes on the company's accounting policies, segment information, and other financial disclosures, offering deeper insights into its financial reporting [General Information](index=18&type=section&id=General%20Information) XD Inc. is an investment holding company incorporated in the Cayman Islands, with its shares listed on the Hong Kong Stock Exchange - XD Inc. was incorporated on January 25, 2019, under the laws of the Cayman Islands and listed on The Stock Exchange of Hong Kong Limited on December 12, 2019[52](index=52&type=chunk) - The company and its subsidiaries are primarily engaged in the development, operation, publishing, and distribution of mobile and web games, as well as the operation of the game community and platform TapTap, in China and other countries and regions[52](index=52&type=chunk) [Basis of Preparation](index=18&type=section&id=Basis%20of%20Preparation) These interim financial statements are prepared in accordance with International Accounting Standard 34 'Interim Financial Reporting' and should be read in conjunction with the group's annual consolidated financial statements for the year ended December 31, 2024 - These interim financial statements are prepared in accordance with International Accounting Standard 34 'Interim Financial Reporting'[53](index=53&type=chunk) - The interim financial statements should be read in conjunction with the group's annual consolidated financial statements for the year ended December 31, 2024, which were prepared in accordance with International Financial Reporting Standards[53](index=53&type=chunk) [Significant Accounting Policies Information](index=19&type=section&id=Significant%20Accounting%20Policies%20Information) Except for income tax estimates and IAS 21 (amended), the accounting policies adopted in these interim financial statements are largely consistent with those used for the 2024 financial statements - Except for income tax estimates and IAS 21 (amended), the accounting policies adopted in these interim financial statements are largely consistent with those used for the preparation of the 2024 financial statements[54](index=54&type=chunk) - IAS 21 (amended) 'Lack of Exchangeability' will not have a significant impact on the interim financial statements[55](index=55&type=chunk) - The company is assessing the extensive impact of IFRS 18 'Presentation and Disclosure in Financial Statements' on the presentation and disclosure of financial statements[55](index=55&type=chunk)[57](index=57&type=chunk) [Segment Information and Revenue](index=20&type=section&id=Segment%20Information%20and%20Revenue) The company has two operating segments, Game and TapTap Platform, whose performance is assessed by the chief operating decision-maker based on segment revenue, cost of revenue, and gross profit - The company has two operating segments, Game and TapTap Platform, whose performance is assessed by the chief operating decision-maker based on segment revenue and cost of revenue[58](index=58&type=chunk)[59](index=59&type=chunk) Segment Information for the Six Months Ended June 30, 2025 | Segment | Total Revenue (RMB thousand) | Cost of Revenue (RMB thousand) | Gross Profit (RMB thousand) | Gross Margin (%) | | :--- | :--- | :--- | :--- | :--- | | Game Segment | 2,071,260 | (663,812) | 1,407,448 | 68 | | TapTap Platform Segment | 1,010,726 | (165,416) | 845,310 | 84 | | Total | 3,081,986 | (829,228) | 2,252,758 | 73 | Game Operation Revenue by Geographical Region | Region | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Mainland China | 1,029,406 | 862,829 | | Other Regions | 1,015,707 | 618,245 | | Total | 2,045,113 | 1,481,074 | [Breakdown of Expenses](index=24&type=section&id=Breakdown%20of%20Expenses) For the six months ended June 30, 2025, the company's total expenses were RMB 2,251.4 million Breakdown of Expenses for the Six Months Ended June 30 | Expense Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Employee Benefit Expenses | 698,000 | 537,378 | | Promotion and Advertising Expenses | 610,717 | 633,437 | | Commissions Charged by Payment and Distribution Channels | 331,772 | 303,830 | | Revenue Sharing with Game Developers and Content Owners | 157,168 | 184,852 | | Bandwidth and Server Hosting Fees | 140,201 | 120,092 | | Professional and Technical Service Fees | 118,757 | 78,970 | | Share-based Compensation Expenses | 42,259 | 28,232 | | VAT Input Tax Transfer-out and Surcharges | 35,329 | 12,319 | | Total | 2,251,415 | 1,976,017 | [Other Income](index=25&type=section&id=Other%20Income) For the six months ended June 30, 2025, total other income was RMB 17.2 million, primarily from government grants, which significantly increased from RMB 5.4 million in the prior period of 2024 to RMB 16.9 million Other Income for the Six Months Ended June 30 | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Government Grants | 16,858 | 5,440 | | Interest Income from Short-Term Investments Measured at Amortized Cost | 329 | — | | Total | 17,187 | 5,440 | [Net Other Gains](index=25&type=section&id=其他收益%E6%B7%A8%E9%A1%8D) For the six months ended June 30, 2025, net other gains were RMB 13.6 million, a decrease from RMB 20.5 million in the prior period of 2024, mainly due to reduced net exchange gains and no gain on repurchase of convertible bonds this period Net Other Gains for the Six Months Ended June 30 | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Net Exchange Gains | 9,854 | 11,830 | | Fair Value Change of Wealth Management Products Issued by Commercial Banks | 1,104 | 1,861 | | Net Gain on Repurchase of Convertible Bonds | — | 4,975 | | Others | 2,645 | 1,857 | | Total | 13,603 | 20,523 | [Net Finance Income](index=26&type=section&id=Net%20Finance%20Income) For the six months ended June 30, 2025, net finance income significantly increased to RMB 18.4 million, compared to RMB 2.8 million in the prior period of 2024 Net Finance Income for the Six Months Ended June 30 | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Interest Income from Bank Deposits | 22,661 | 18,381 | | Interest Expense on Lease Liabilities | (3,728) | (4,283) | | Bank Charges | (544) | (908) | | Interest Expense on Convertible Bonds | — | (8,701) | | Interest Expense on Borrowings | — | (1,715) | | Net Finance Income | 18,389 | 2,774 | [Income Tax Expense](index=26&type=section&id=所得稅%E9%96%8B%E6%94%AF) Income tax expense increased from RMB 31.5 million in the prior period of 2024 to RMB 70.1 million in 2025 - Hong Kong profits tax rate is **16.5%**, and Singapore profits tax rate is **17%**[79](index=79&type=chunk)[80](index=80&type=chunk) - PRC subsidiaries qualify as "High and New Technology Enterprises," enjoying a **15% preferential income tax rate**, and as "Software Enterprises," benefiting from tax holidays and halved tax rates[81](index=81&type=chunk) - Enterprises engaged in R&D activities are entitled to claim **200%** of their R&D expenses as deductible tax expenses[81](index=81&type=chunk) - The company does not intend to declare dividends to its directly foreign-invested entities in the foreseeable future, thus no deferred tax liability for withholding tax has arisen as of June 30, 2025[83](index=83&type=chunk) Income Tax Expense for the Six Months Ended June 30 | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Current Income Tax | 67,755 | 3,854 | | Deferred Income Tax | 2,337 | 27,600 | | Total Income Tax Expense | 70,092 | 31,454 | [Earnings Per Share](index=28&type=section&id=Earnings%20Per%20Share) For the six months ended June 30, 2025, basic earnings per share were RMB 1.57 and diluted earnings per share were RMB 1.54, a significant increase from RMB 0.43 per share in the prior period of 2024 Earnings Per Share for the Six Months Ended June 30 | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | Profit for the Period Attributable to Owners of the Company (RMB thousand) | 754,856 | 205,102 | | Weighted Average Number of Shares in Issue (thousand shares) | 481,286 | 472,092 | | Basic Earnings Per Share (RMB) | 1.57 | 0.43 | | Diluted Earnings Per Share (RMB) | 1.54 | 0.43 | [Trade Receivables](index=29&type=section&id=Trade%20Receivables) As of June 30, 2025, total trade receivables increased significantly to RMB 743.6 million from December 31, 2024 Trade Receivables Breakdown | Item | As of June 30, 2025 (RMB thousand) | As of December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Distribution Channels and Game Publishers | 503,173 | 214,598 | | Online Promotion Service Clients | 245,257 | 120,283 | | Less: Impairment Provision | (4,873) | (1,489) | | Total | 743,557 | 333,413 | Ageing Analysis of Trade Receivables | Ageing | As of June 30, 2025 (RMB thousand) | As of December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Within 3 Months | 653,321 | 291,499 | | 3 to 6 Months | 90,531 | 41,300 | | 6 Months to 1 Year | 3,819 | 1,992 | | 1 to 2 Years | 759 | 106 | | Over 2 Years | — | 5 | - The group applies the simplified approach for expected credit loss provisions under IFRS 9, allowing for lifetime expected loss provisions for all trade receivables[89](index=89&type=chunk) [Share Capital](index=32&type=section&id=Share%20Capital) As of June 30, 2025, issued and fully paid share capital was RMB 338 thousand Summary of Share Capital Changes | Item | As of June 30, 2025 (RMB thousand) | As of January 1, 2024 (RMB thousand) | | :--- | :--- | :--- | | Par Value of Shares | 338 | 329 | | Share Premium | 7,278,532 | 7,036,290 | | Shares Held for Share Award Scheme | (107,659) | (6) | - For the six months ended June 30, 2025, **1,988 thousand shares** were issued due to the exercise of share options, increasing share premium by **RMB 50,643 thousand**[95](index=95&type=chunk) - The trustee repurchased a total of **2,243,000 ordinary shares** for a total consideration of **RMB 59.1 million**, recorded as "Shares held for share award scheme"[95](index=95&type=chunk) [Trade Payables](index=33&type=section&id=Trade%20Payables) As of June 30, 2025, trade payables were RMB 229.5 million, primarily related to server hosting, advertising, and revenue sharing payable to game developers - Trade payables were **RMB 229.5 million**, primarily related to server hosting purchase services, advertising, and revenue sharing payable to game developers[97](index=97&type=chunk) Ageing Analysis of Trade Payables | Ageing | As of June 30, 2025 (RMB thousand) | As of December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Within 3 Months | 223,484 | 170,902 | | Over 3 Months | 6,032 | 15,438 | [Other Information](index=34&type=section&id=Other%20Information) This section covers additional corporate information, including dividend policies, share transactions, use of proceeds, and compliance with governance codes [Dividends](index=34&type=section&id=Dividends) The final dividend of HK 40.0 cents per share for the year ended December 31, 2024, was paid on June 30, 2025 - The final dividend of **HK 40.0 cents per share** for the year ended December 31, 2024, was paid on June 30, 2025[100](index=100&type=chunk) - The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025[100](index=100&type=chunk)[103](index=103&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=35&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company%27s%20Listed%20Securities) During the reporting period, save for shares purchased by the trustee for the 2024 Restricted Share Unit Scheme, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities - During the reporting period, save for shares purchased by the trustee for the 2024 Restricted Share Unit Scheme, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities[101](index=101&type=chunk) - As of June 30, 2025, the company held no treasury shares[102](index=102&type=chunk) [Use of Proceeds](index=35&type=section&id=Use%20of%20Proceeds) The net proceeds of approximately HKD 1,113.0 million from the April 2021 share placement were fully utilized as of June 30, 2025, with HKD 67.0 million carried forward for potential acquisitions and strategic investments - The net proceeds from the April 2021 share placement were approximately **HKD 1,113.0 million**[104](index=104&type=chunk) - As of June 30, 2025, all net proceeds have been fully utilized, with **HKD 67.0 million** allocated for potential acquisitions and strategic investments[104](index=104&type=chunk) [2024 Restricted Share Unit Scheme](index=36&type=section&id=2024%20Restricted%20Share%20Unit%20Scheme) The company adopted the 2024 Restricted Share Unit Scheme on May 7, 2024, to recognize participants' contributions and encourage talent retention - The company adopted the 2024 Restricted Share Unit Scheme on May 7, 2024, to recognize participants' contributions and encourage and retain talent[105](index=105&type=chunk) - During the reporting period, the trustee purchased a total of **2,243,000 shares** on the Stock Exchange for the scheme, at a total consideration of **HKD 64.2 million**[105](index=105&type=chunk) [No Material Changes](index=36&type=section&id=No%20Material%20Changes) Save as disclosed in this announcement, there were no material changes affecting the group's results requiring disclosure during the reporting period - Save as disclosed in this announcement, there were no material changes affecting the group's results requiring disclosure under paragraphs 32 and 40(2) of Appendix D2 to the Listing Rules during the reporting period[106](index=106&type=chunk) [Events After the Reporting Period](index=36&type=section&id=Events%20After%20the%20Reporting%20Period) Subsequent to the reporting period, the company granted 152,020 share options on July 9, 2025, and 246,262 share options were exercised - On July 9, 2025, the company granted a total of **152,020 share options** to certain eligible participants under the share option scheme[107](index=107&type=chunk) - Subsequent to the reporting period, certain eligible participants exercised **246,262 share options** to subscribe for **246,262 ordinary shares** of the company[108](index=108&type=chunk) - On August 4, 2025, the company's indirect wholly-owned subsidiary purchased **7,086,420 Series B1 preference shares** of MiAO (Cayman) Limited, representing approximately **5.30%** of its issued share capital, for **USD 14,000,000**[109](index=109&type=chunk) [Compliance with Corporate Governance Code](index=37&type=section&id=Compliance%20with%20Corporate%20Governance%20Code) The company is committed to high standards of corporate governance and has complied with all applicable code provisions of the Corporate Governance Code, except for the roles of Chairman and Chief Executive Officer being combined in Mr. Huang Yimeng - The company has complied with all applicable code provisions of the Corporate Governance Code, except for a deviation from code provision C.2.1 of Part 2 of the Corporate Governance Code, which states that the roles of chairman and chief executive officer should be separate[111](index=111&type=chunk) - Mr. Huang Yimeng currently serves as both the Chairman and Chief Executive Officer of the company[112](index=112&type=chunk) - The Board believes that combining the roles of Chairman and Chief Executive Officer provides strong and consistent leadership for the group, and that the Board's composition maintains substantial independence[112](index=112&type=chunk) [Compliance with the Model Code for Securities Transactions by Directors](index=38&type=section&id=Compliance%20with%20the%20Model%20Code%20for%20Securities%20Transactions%20by%20Directors) Following specific enquiries by the company, the Directors have confirmed their compliance with the Model Code for Securities Transactions by Directors of Listed Issuers for the six months ended June 30, 2025 - The Directors have confirmed their compliance with the Model Code for the six months ended June 30, 2025[114](index=114&type=chunk) [Review of Interim Results by Audit Committee](index=38&type=section&id=Review%20of%20Interim%20Results%20by%20Audit%20Committee) The Audit Committee, together with the auditors, has reviewed the group's unaudited consolidated financial statements for the six months ended June 30, 2025, and discussed matters including accounting principles, risk management, internal controls, and financial reporting - The Audit Committee comprises three members, with Mr. Xin Quandong, who possesses appropriate professional qualifications, serving as chairman[115](index=115&type=chunk) - The Audit Committee, together with the auditors, has reviewed the group's unaudited consolidated financial statements for the six months ended June 30, 2025[115](index=115&type=chunk) - The Audit Committee has also reviewed the accounting principles and practices adopted by the group and discussed matters concerning audit, risk management, internal controls, and financial reporting[115](index=115&type=chunk) [Publication of Interim Results and Interim Report on HKEX and Company Website](index=38&type=section&id=Publication%20of%20Interim%20Results%20and%20Interim%20Report%20on%20HKEX%20and%20Company%20Website) This interim results announcement has been published on the HKEX website (www.hkexnews.hk) and the company's website (2400.hk) - This interim results announcement has been published on the HKEX website (www.hkexnews.hk) and the company's website (2400.hk)[116](index=116&type=chunk) [Definitions](index=38&type=section&id=Definitions) This section provides definitions for key terms and abbreviations used in this announcement to ensure clarity and consistency of information - This section provides definitions for key terms and abbreviations used in this announcement, such as "MAU(s) / Monthly Active User(s)", "MMORPG", and "MPU(s) / Monthly Paying User(s)"[117](index=117&type=chunk)[118](index=118&type=chunk)[119](index=119&type=chunk)

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告之內 容 概 不 負 責，對 其 準 確 性 或 完 整 性 亦 不 發 表 任 何 聲 明，並 明 確 表 示，概 不就因本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。 China Gingko Education Group Company Limited 中國銀杏教育集團有限公司 （於 開 曼 群 島 註 冊 成 立 之 有 限 公 司） （股 份 代 號：1851） 截至二零二五年六月三十日止六個月的 中期業績 中 國 銀 杏 教 育 集 團 有 限 公 司（「本公司」，連 同 其 附 屬 公 司 及 併 表 聯 屬 實 體 統 稱「本集團」）的 董 事（「董 事」）會（「董事會」）宣 佈，本 集 團 截 至 二 零 二 五 年 六 月 三 十 日 止 六 個 月（「報告期」）的 未 經 審 核 合 併 業 績，連 同 截 至 二 零 二 四 年 六 月 三 十 日 止 六 個 月（「過往期間」）的 比 較 數 字 如 下。 – 1 – 中期簡明合併全面收益表 截至二零二五年六月三十日止六個月 （ ...

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之內容概不負責，對其 準確性或完整性亦不發表任何聲明，並明確表示，概不對因本公告全部或任何部分內容 而產生或因依賴該等內容而引致之任何損失承擔任何責任。 Yuanda China Holdings Limited 遠 大 中 國 控 股 有 限 公 司 （ 於 開 曼 群 島 註 冊 成 立 的 有 限 公 司 ） （股份代號：2789） 截至2025年6月30日止六個月未經審核中期之業績公佈 遠大中國控股有限公司（「本公司」）董事（「董事」）會（「董事會」）謹此宣佈本公司及其附屬 公司（統稱「本集團」）截至2025年6月30日止六個月（「報告期間」）之未經審核中期業績。 本集團報告期內之中期財務資料未經審核，惟已經本公司審核委員會（「審核委員會」）審 閱。 | | 截至2025年 | 截至2024年 | | --- | --- | --- | | | 6月30日止 | 6月30日止 | | 財務摘要 | 六個月 | 六個月 | | | （概約） | （概約） | | （人民幣百萬元） 收入 | 1,266.3 | 1,088.2 | | （附註） 經調 ...

簡明綜合損益表 截至2025年6月30日止6個月 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佈之內容概不負責，對其準確性或完 整性亦不發表任何聲明，並明確表示，概不對因本公佈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。 港口控股有限公司 CHINA MERCHANTS PORT HOLDINGS COMPANY LIMITED （根據公司條例於香港註冊成立之有限公司） （股份代號：00144） 2025 年中期業績公佈 董事會欣然公佈本集團於截至2025年6月30日止6個月未經審核綜合中期業績連同 2024年同期之比較數字如下： – 1 – ‧ 完成集裝箱吞吐量7,485萬TEU，同比增加4.3%（2024年：7,177萬TEU） ‧ 完成散雜貨吞吐量2.63億噸，同比減少4.2%（2024年：2.74億噸） ‧ 歸屬於本公司權益持有者之利潤為港幣35.84億元，同比減少19.5%（2024 年：港幣44.52億元） ‧ 歸屬於本公司權益持有者之經常性利潤 √ 港幣36.44億元，同比減少12.3%（2024年：港幣41.54億元） √ 來自港口業務為港幣42.18億元 ...