香港交易及結算所有限公司及香港聯合交易所有限公司（「聯交所」）對本公告的內容概不負責， 對其準確性或完整性亦不發表任何聲明，並明確表示，概不對因本公告全部或任何部分內容 而產生或因倚賴該等內容而引致的任何損失承擔任何責任。 S&P INTERNATIONAL HOLDING LIMITED 椰豐集團有限公司 （於開曼群島註冊成立的有限公司） （股份代號：1695） 截至二零二五年六月三十日止六個月 未經審核中期業績公告 | 財務摘要 | | | | | --- | --- | --- | --- | | 主要財務表現 | | | | | 綜合損益表 | | | | | | | 截至六月三十日止六個月 | | | | 二零二五年 | 二零二四年 | 百分比變動 | | | 馬來西亞令吉 | 馬來西亞令吉 | | | | （未經審核） | （未經審核） | | | 收益 | 72,740,832 | 56,331,822 | 29.13 | | 經營溢利 | 8,936,187 | 3,943,529 | >100 | | 財務成本淨額 | (550,163) | (696,133) | (20.97) | | ...

[Company Profile](index=3&type=section&id=Company%20Profile) Luzhou Bank Co., Ltd. was established in China on September 15, 1997, with its H-shares listed on the main board of the Hong Kong Stock Exchange on December 17, 2018 [Company Overview](index=3&type=section&id=Company%20Overview) Luzhou Bank Co., Ltd. was established in China on September 15, 1997, with a registered capital of RMB 2,717,752,062 and H-shares listed on the HKEX - Legal Chinese Name: Luzhou Bank Co., Ltd., Legal English Name: LUZHOU BANK CO., LTD[5](index=5&type=chunk) - Registered Capital: **RMB 2,717,752,062**[5](index=5&type=chunk) - H-shares listed on the main board of the Hong Kong Stock Exchange on **December 17, 2018**, stock code 1983[7](index=7&type=chunk) [Company Status](index=4&type=section&id=Company%20Status) As of the end of the reporting period, Luzhou Bank's total assets reached RMB 192.25 billion, with total customer loans of RMB 117.59 billion and total customer deposits of RMB 155.08 billion, demonstrating steady growth in scale As of the End of the Reporting Period, Key Scale Indicators | Indicator | Amount (RMB Billion) | | :--- | :--- | | Total Assets | 192.25 | | Total Customer Loans | 117.59 | | Total Customer Deposits | 155.08 | [Financial Highlights](index=5&type=section&id=Financial%20Highlights) This section provides a concise overview of Luzhou Bank's operating performance, scale, asset quality, capital adequacy, and profitability indicators [Operating Performance](index=5&type=section&id=Operating%20Performance) For the six months ended June 30, 2025, Luzhou Bank's net profit increased by 11.65% year-on-year to RMB 902 million, and pre-tax profit increased by 19.78% to RMB 1.24 billion, despite a 14.57% decrease in operating income 2025 H1 Operating Performance Overview (RMB Thousand) | Item | 2025 | 2024 | YoY Change (%) | | :--- | :--- | :--- | :--- | | Net Interest Income | 1,897,023 | 1,757,680 | 7.93 | | Net Fee and Commission Income | 78,660 | 82,592 | (4.76) | | Operating Income | 2,422,775 | 2,835,908 | (14.57) | | Operating Expenses | (968,254) | (898,069) | 7.82 | | Expected Credit Losses / Other Asset Impairment Losses | (215,577) | (903,809) | (76.15) | | Pre-tax Profit | 1,239,926 | 1,035,133 | 19.78 | | Net Profit | 902,489 | 808,336 | 11.65 | | Net Profit Attributable to Bank Shareholders | 902,489 | 808,336 | 11.65 | [Scale Indicators](index=5&type=section&id=Scale%20Indicators) As of June 30, 2025, Luzhou Bank's total assets and net customer loans both achieved double-digit growth, increasing by 12.43% and 13.51% year-on-year, respectively, indicating continuous business expansion 2025 H1 Scale Indicators (RMB Thousand) | Item | June 30, 2025 | December 31, 2024 | YoY Change (%) | | :--- | :--- | :--- | :--- | | Total Assets | 192,253,762 | 170,999,572 | 12.43 | | Of which: Net Customer Loans | 111,900,229 | 98,585,035 | 13.51 | | Total Liabilities | 179,260,751 | 158,559,168 | 13.06 | | Of which: Customer Deposits | 155,081,860 | 135,314,340 | 14.61 | | Equity Attributable to Bank Shareholders | 12,993,011 | 12,440,404 | 4.44 | [Asset Quality Indicators](index=5&type=section&id=Asset%20Quality%20Indicators) As of June 30, 2025, Luzhou Bank's non-performing loan ratio slightly decreased by 0.01 percentage points to 1.18%, while its provision coverage ratio and loan loss provision ratio both declined 2025 H1 Asset Quality Indicators (%) | Indicator | June 30, 2025 | December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Non-performing Loan Ratio | 1.18 | 1.19 | (0.01) | | Provision Coverage Ratio | 411.53 | 435.19 | (23.66) | | Loan Loss Provision Ratio | 4.88 | 5.18 | (0.30) | [Capital Adequacy Ratios](index=5&type=section&id=Capital%20Adequacy%20Ratios) As of June 30, 2025, Luzhou Bank's Common Equity Tier 1 capital adequacy ratio, Tier 1 capital adequacy ratio, and capital adequacy ratio all decreased but remained above regulatory requirements 2025 H1 Capital Adequacy Ratios (%) | Indicator | June 30, 2025 | December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Common Equity Tier 1 Capital Adequacy Ratio | 8.01 | 8.27 | (0.26) | | Tier 1 Capital Adequacy Ratio | 9.82 | 10.15 | (0.33) | | Capital Adequacy Ratio | 12.66 | 13.12 | (0.46) | [Other Indicators](index=5&type=section&id=Other%20Indicators) As of June 30, 2025, Luzhou Bank's liquidity ratio was 76.30%, a decrease of 7.80 percentage points from the end of the previous year 2025 H1 Liquidity Ratio (%) | Indicator | June 30, 2025 | December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Liquidity Ratio | 76.30 | 84.10 | (7.80) | [Profitability Indicators](index=6&type=section&id=Profitability%20Indicators) For the six months ended June 30, 2025, Luzhou Bank's average return on equity increased by 0.55 percentage points to 14.62%, but average return on total assets, net interest margin, and net interest spread all decreased, and the cost-to-income ratio significantly rose by 7.97 percentage points to 37.94% 2025 H1 Profitability Indicators (%) | Item | 2025 | 2024 | Change | | :--- | :--- | :--- | :--- | | Average Return on Total Assets | 0.99 | 1.00 | (0.01) | | Average Return on Equity | 14.62 | 14.07 | 0.55 | | Net Interest Spread | 2.71 | 2.77 | (0.06) | | Net Interest Margin | 2.44 | 2.55 | (0.11) | | Cost-to-Income Ratio | 37.94 | 29.97 | 7.97 | [Management Discussion and Analysis](index=7&type=section&id=Management%20Discussion%20and%20Analysis) This section provides an in-depth analysis of Luzhou Bank's operating environment, strategic direction, financial performance, asset quality, capital adequacy, and risk management [Environment and Outlook](index=7&type=section&id=1.%20Environment%20and%20Outlook) In the first half of 2025, China's economy maintained stable and positive growth, with Sichuan Province outperforming the national average, while the banking sector faced challenges from narrowing net interest margins and intensified competition - In the first half of 2025, China's GDP grew by **5.3%** year-on-year, and Sichuan Province's GDP grew by **5.6%** year-on-year, **0.3 percentage points higher** than the national average[10](index=10&type=chunk) - The banking industry faces multiple challenges, including continuously narrowing net interest margins and intensified "involutionary" competition[11](index=11&type=chunk) - Luzhou Bank's operations in the first half of the year showed a good trend of **stable scale growth, improved efficiency, and controllable risks**[11](index=11&type=chunk) [Development Strategy](index=7&type=section&id=2.%20Development%20Strategy) In the second half of 2025, Luzhou Bank will focus on high-quality development, business transformation, asset structure optimization, liability cost reduction, credit risk control, fintech investment, and integration into regional economic strategies - Anchor high-quality development goals, unswervingly promote business transformation, and continuously optimize asset structure[12](index=12&type=chunk) - Continuously reduce liability costs and increase the proportion of high-quality customers through innovative measures[12](index=12&type=chunk) - Further strengthen full-process credit risk management and proactively prevent reputational risks[12](index=12&type=chunk) - Continue to increase investment in financial technology to solidify the foundation of financial technology[12](index=12&type=chunk) - Closely align with the Chengdu-Chongqing economic circle and Luzhou's "one body, two wings" development strategy, actively integrating into the overall regional economic development[12](index=12&type=chunk) [Income Statement Analysis](index=8&type=section&id=3.%20Income%20Statement%20Analysis) In the first half of 2025, Luzhou Bank's pre-tax profit and net profit increased by 19.78% and 11.65% year-on-year, respectively, primarily due to a significant reduction in expected credit losses, despite a 14.57% decrease in operating income 2025 H1 Income Statement Key Item Changes (RMB Thousand) | Item | 2025 | 2024 | Change | | :--- | :--- | :--- | :--- | | Pre-tax Profit | 1,239,926 | 1,035,133 | +204,793 | | Net Profit | 902,489 | 808,336 | +94,153 | | Operating Income | 2,422,775 | 2,835,908 | -413,133 | | Expected Credit Losses / Other Asset Impairment Losses | (215,577) | (903,809) | +688,232 | [Financial Performance Summary](index=8&type=section&id=3.1%20Financial%20Performance%20Summary) In the first half of 2025, Luzhou Bank's pre-tax profit increased by 19.78% year-on-year to RMB 1.24 billion, and net profit increased by 11.65% to RMB 902 million, mainly driven by a significant reduction in expected credit losses 2025 H1 Pre-tax Profit Change Impact (RMB Thousand) | Item | Amount | | :--- | :--- | | Pre-tax Profit for the 6 months ended June 30, 2024 | 1,035,133 | | Change in Net Interest Income | 139,343 | | Change in Net Fee and Commission Income | (3,932) | | Change in Net Gains from Trading Activities, Financial Investments, and Other Operating Income | (548,544) | | Change in Operating Expenses | (70,185) | | Change in Expected Credit Losses / Other Asset Impairment Losses | 688,232 | | Change in Share of Profit of Associates | (121) | | Pre-tax Profit for the 6 months ended June 30, 2025 | 1,239,926 | [Operating Income](index=9&type=section&id=3.2%20Operating%20Income) In the first half of 2025, Luzhou Bank's operating income decreased by 14.57% year-on-year to RMB 2.42 billion, with net interest income's share rising to 78.30% and non-interest net income's share falling to 21.70% 2025 H1 Operating Income Composition (%) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Net Interest Income | 78.30 | 61.98 | | Net Fee and Commission Income | 3.25 | 2.91 | | Net Gains from Trading Activities, Financial Investments, and Other Operating Income | 18.45 | 35.11 | | Total | 100.00 | 100.00 | [Net Interest Income](index=9&type=section&id=3.3%20Net%20Interest%20Income) In the first half of 2025, Luzhou Bank's net interest income increased by 7.93% year-on-year to RMB 1.897 billion, driven by growth in interest-earning assets and a decrease in interest-bearing liability costs, despite declines in net interest margin and net interest spread - Net interest income increased by **7.93%** year-on-year to **RMB 1.897 billion**, primarily due to growth in interest-earning assets and a decrease in interest-bearing liability costs[19](index=19&type=chunk) - Net interest margin decreased by **0.11 percentage points** to **2.44%**, and net interest spread decreased by **0.06 percentage points** to **2.71%**[24](index=24&type=chunk) 2025 H1 Net Interest Income Change Analysis (RMB Thousand) | Item | Scale Factor | Interest Rate Factor | Net Increase (Decrease) | | :--- | :--- | :--- | :--- | | Change in Interest Income | 466,459 | (339,869) | 126,590 | | Change in Interest Expense | 292,072 | (304,825) | (12,753) | | Change in Net Interest Income | 174,387 | (35,044) | 139,343 | [Interest Income](index=11&type=section&id=3.4%20Interest%20Income) In the first half of 2025, Luzhou Bank's interest income increased by 3.38% year-on-year to RMB 3.872 billion, primarily driven by the growth in interest-earning assets, with customer loan interest income being the main contributor - Interest income increased by **3.38%** year-on-year to **RMB 3.872 billion**, mainly influenced by the growth in interest-earning assets[27](index=27&type=chunk) - Customer loan interest income: **RMB 3.354 billion**, a year-on-year increase of **7.15%**[28](index=28&type=chunk) - Investment interest income: **RMB 421 million**, a year-on-year decrease of **19.46%**, mainly due to a decrease in the average yield on investments[31](index=31&type=chunk) - Interest income from balances with central bank: **RMB 66 million**, a year-on-year increase of **18.16%**, mainly due to an increase in deposit size[33](index=33&type=chunk) [Interest Expense](index=13&type=section&id=3.5%20Interest%20Expense) In the first half of 2025, Luzhou Bank's interest expense decreased by 0.64% year-on-year to RMB 1.975 billion, primarily due to a decrease in the average cost of interest-bearing liabilities, with customer deposit interest expense and debt instrument interest expense being the main components - Interest expense decreased by **0.64%** year-on-year to **RMB 1.975 billion**, primarily due to a decrease in the average cost of interest-bearing liabilities[34](index=34&type=chunk) - Customer deposit interest expense: **RMB 1.713 billion**, a year-on-year increase of **2.79%**[35](index=35&type=chunk) - Interest expense on deposits from and borrowings from banks and other financial institutions: **RMB 38 million**, a year-on-year decrease of **45.85%**, mainly due to a decrease in scale[38](index=38&type=chunk) - Interest expense on debt instruments issued: **RMB 172 million**, a year-on-year decrease of **8.84%**, mainly due to a decrease in the average cost rate[39](index=39&type=chunk) [Net Non-Interest Income](index=14&type=section&id=3.6%20Net%20Non-Interest%20Income) In the first half of 2025, Luzhou Bank's net non-interest income significantly decreased by 51.24% year-on-year to RMB 526 million, primarily due to a reduction in net gains from trading activities, financial investments, and other operating income - Net non-interest income decreased by **51.24%** year-on-year to **RMB 526 million**[41](index=41&type=chunk) 2025 H1 Net Non-Interest Income Composition (RMB Thousand) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Net Fee and Commission Income | 78,660 | 82,592 | | Net Gains from Trading Activities, Financial Investments, and Other Operating Income | 447,092 | 995,636 | | Total Net Non-Interest Income | 525,752 | 1,078,228 | [Net Fee and Commission Income](index=14&type=section&id=3.7%20Net%20Fee%20and%20Commission%20Income) In the first half of 2025, Luzhou Bank's net fee and commission income decreased by 4.76% year-on-year to RMB 78.66 million, mainly due to a decline in wealth management business fee income - Net fee and commission income decreased by **RMB 3.932 million** to **RMB 78.66 million** year-on-year[42](index=42&type=chunk) 2025 H1 Fee and Commission Income Composition (RMB Thousand) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Wealth Management Business Fee Income | 78,907 | 94,274 | | Agency Business Fee Income | 5,301 | 1,254 | | Guarantee and Commitment Business Fee Income | 13,342 | 3,991 | | Total Fee and Commission Income | 102,556 | 104,615 | | Fee and Commission Expense | (23,896) | (22,023) | | Net Fee and Commission Income | 78,660 | 82,592 | [Net Gains from Trading Activities, Financial Investments, and Other Operating Income](index=15&type=section&id=3.8%20Net%20Gains%20from%20Trading%20Activities%2C%20Financial%20Investments%2C%20and%20Other%20Operating%20Income) In the first half of 2025, Luzhou Bank's combined net gains from trading activities, financial investments, and other operating income decreased by 55.09% year-on-year to RMB 447 million, with all components showing a downward trend - Combined net gains from trading activities, financial investments, and other operating income decreased by **RMB 549 million**, a **55.09%** decrease year-on-year[45](index=45&type=chunk) 2025 H1 Net Gains from Trading Activities, Financial Investments, and Other Operating Income Composition (RMB Thousand) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Net Gains from Trading Activities | 321,174 | 492,091 | | Net Gains from Financial Investments | 88,745 | 197,435 | | Other Operating Income | 37,173 | 306,110 | | Total | 447,092 | 995,636 | [Operating Expenses](index=15&type=section&id=3.9%20Operating%20Expenses) In the first half of 2025, Luzhou Bank's operating expenses increased by 7.82% year-on-year to RMB 968 million, primarily due to increased staff costs, while business and administrative expenses decreased - Operating expenses increased by **7.82%** year-on-year to **RMB 968 million**[47](index=47&type=chunk) - Staff costs increased by **7.76%** year-on-year to **RMB 479 million**[47](index=47&type=chunk) - Business and administrative expenses decreased by **5.32%** year-on-year to **RMB 281 million**[47](index=47&type=chunk) [Expected Credit Losses / Other Asset Impairment Losses](index=16&type=section&id=3.10%20Expected%20Credit%20Losses%20%2F%20Other%20Asset%20Impairment%20Losses) In the first half of 2025, Luzhou Bank's expected credit losses / other asset impairment losses significantly decreased by 76.15% year-on-year to RMB 216 million, with loan expected credit losses decreasing by 28.60% - Expected credit losses / other asset impairment losses decreased by **76.15%** year-on-year to **RMB 216 million**[50](index=50&type=chunk) - Loan expected credit losses were **RMB 452 million**, a year-on-year decrease of **28.60%**[52](index=52&type=chunk) 2025 H1 Major Components of Expected Credit Losses (RMB Thousand) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Expected Credit Losses on Loans Measured at Amortized Cost | 451,919 | 630,126 | | Expected Credit Losses on Credit-Type Financial Investments | (231,868) | 22,072 | | Expected Credit Losses on Financial Assets Measured at Amortized Cost | 4,446 | 248,389 | | Total | 215,577 | 903,809 | [Analysis of Key Balance Sheet Items](index=17&type=section&id=4.%20Analysis%20of%20Key%20Balance%20Sheet%20Items) As of June 30, 2025, Luzhou Bank's total assets increased by 12.43% year-on-year to RMB 192.25 billion, driven by loan growth, while total liabilities increased by 13.06% to RMB 179.26 billion, with customer deposits as the primary funding source - Total assets increased by **12.43%** year-on-year to **RMB 192.25 billion**, primarily due to growth in customer loans and other items[53](index=53&type=chunk) - Total liabilities increased by **13.06%** year-on-year to **RMB 179.26 billion**, mainly due to steady growth in customer deposits[74](index=74&type=chunk) - Shareholders' equity increased by **4.44%** year-on-year to **RMB 12.993 billion**[80](index=80&type=chunk) [Assets](index=17&type=section&id=4.1%20Assets) As of June 30, 2025, Luzhou Bank's total assets increased by 12.43%, with net customer loans accounting for 58.20% and financial investments for 18.49% of total assets; corporate loans grew by 15.78%, while personal loans decreased by 4.37% 2025 H1 Total Assets Composition (RMB Thousand) | Item | Amount | Percentage of Total % | | :--- | :--- | :--- | | Net Customer Loans | 111,900,229 | 58.20 | | Financial Investments - Financial Assets at Fair Value Through Profit or Loss | 35,550,571 | 18.49 | | Financial Investments - Financial Assets at Amortized Cost | 20,638,532 | 10.74 | | Total Assets | 192,253,762 | 100.00 | - Total customer loans were **RMB 117.59 billion**, an increase of **13.15%** from the end of the previous year[57](index=57&type=chunk) - Total corporate loans were **RMB 103.78 billion**, an increase of **15.78%** from the end of the previous year, accounting for **88.26%** of total customer loans[59](index=59&type=chunk) - Personal loans were **RMB 12.845 billion**, a decrease of **4.37%** from the end of the previous year, accounting for **10.92%** of total customer loans[61](index=61&type=chunk) - Investment book value was **RMB 63.61 billion**, an increase of **9.88%** from the end of the previous year[62](index=62&type=chunk) [Liabilities](index=21&type=section&id=4.2%20Liabilities) As of June 30, 2025, Luzhou Bank's total liabilities increased by 13.06%, with customer deposits accounting for 86.51% as the primary funding source, and corporate demand deposits' share of total customer deposits increasing 2025 H1 Total Liabilities Composition (RMB Thousand) | Item | Amount | Percentage of Total % | | :--- | :--- | :--- | | Customer Deposits | 155,081,860 | 86.51 | | Debt Instruments Issued | 14,366,963 | 8.01 | | Borrowings from Central Bank | 5,609,509 | 3.13 | | Total Liabilities | 179,260,751 | 100.00 | - Total customer deposits were **RMB 155.082 billion**, an increase of **14.61%** from the end of the previous year[76](index=76&type=chunk) - The proportion of corporate demand deposits to total customer deposits was **32.43%**, an increase of **2.65 percentage points** from the end of the previous year[77](index=77&type=chunk) - Debt instruments issued were **RMB 14.367 billion**, an increase of **12.72%** from the end of the previous year[79](index=79&type=chunk) [Shareholders' Equity](index=23&type=section&id=4.3%20Shareholders%27%20Equity) As of June 30, 2025, Luzhou Bank's total shareholders' equity was RMB 12.993 billion, an increase of 4.44% from the end of the previous year 2025 H1 Shareholders' Equity Composition (RMB Thousand) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Share Capital | 2,717,752 | 2,717,752 | | Other Equity Instruments | 2,399,547 | 2,296,704 | | Retained Earnings | 2,960,546 | 2,627,492 | | Total Shareholders' Equity | 12,993,011 | 12,440,404 | [Other Financial Information](index=23&type=section&id=5.%20Other%20Financial%20Information) As of the end of the reporting period, Luzhou Bank's credit commitments amounted to RMB 4.042 billion, with no overdue debts, and some assets were pledged to the central bank as collateral - Credit commitments amounted to **RMB 4.042 billion**, representing the main component of off-balance sheet items[82](index=82&type=chunk) - There were no overdue debts at the end of the reporting period[83](index=83&type=chunk) - Some assets were pledged to the central bank as collateral in accordance with agreements[84](index=84&type=chunk) [Loan Quality Analysis](index=24&type=section&id=6.%20Loan%20Quality%20Analysis) As of June 30, 2025, Luzhou Bank's total loans increased by 13.13%, with the non-performing loan ratio slightly decreasing by 0.01 percentage points to 1.18%; corporate loan NPL ratio remained flat, while retail loan NPL ratio increased by 0.52 percentage points to 4.18% - Total loans were **RMB 116.829 billion**, an increase of **13.13%** from the end of the previous year[85](index=85&type=chunk) - Total non-performing loans were **RMB 1.384 billion**, an increase of **RMB 156 million** from the end of the previous year[85](index=85&type=chunk) - Non-performing loan ratio was **1.18%**, a decrease of **0.01 percentage points** from the end of the previous year[85](index=85&type=chunk) - Corporate loan NPL ratio remained flat compared to the end of the previous year, while retail loan NPL ratio increased by **0.52 percentage points** to **4.18%**[93](index=93&type=chunk)[95](index=95&type=chunk) [Loan Distribution by Five-Category Classification](index=24&type=section&id=Loan%20Distribution%20by%20Five-Category%20Classification) As of June 30, 2025, Luzhou Bank's total non-performing loans amounted to RMB 1.384 billion, with a non-performing loan ratio of 1.18%; the proportion of substandard and doubtful loans decreased, while loss loans increased 2025 H1 Loan Five-Category Classification Distribution (RMB Thousand) | Item | June 30, 2025 Amount | Percentage of Total % | | :--- | :--- | :--- | | Pass Loans | 113,599,469 | 97.24 | | Special Mention Loans | 1,845,647 | 1.58 | | Substandard Loans | 419,716 | 0.36 | | Doubtful Loans | 294,557 | 0.25 | | Loss Loans | 670,106 | 0.57 | | Total Non-performing Loans | 1,384,379 | 1.18 | [Loan and NPL Distribution by Industry](index=25&type=section&id=Loan%20and%20NPL%20Distribution%20by%20Industry) As of June 30, 2025, Luzhou Bank's corporate non-performing loans were primarily concentrated in real estate, leasing and business services, and construction, accounting for 88.10% of total corporate NPLs - Corporate non-performing loans mainly include real estate, leasing and business services, and construction, accounting for **88.10%** of total corporate non-performing loans[89](index=89&type=chunk) 2025 H1 Corporate Loan NPL Ratio (by Industry) | Industry | Loan Amount (RMB Thousand) | NPL Ratio % | | :--- | :--- | :--- | | Real Estate | 7,867,678 | 4.94 | | Leasing and Business Services | 35,613,768 | 0.56 | | Construction | 34,522,607 | 0.46 | [Loan and NPL Distribution by Product Type](index=26&type=section&id=Loan%20and%20NPL%20Distribution%20by%20Product%20Type) As of June 30, 2025, corporate loans' share increased to 88.83% with a flat NPL ratio, while retail loan balance decreased, its share declined, and the NPL ratio rose by 0.52 percentage points to 4.18% - Corporate loan share increased by **2.03 percentage points** to **88.83%**, with the NPL ratio remaining flat[92](index=92&type=chunk)[93](index=93&type=chunk) - Retail loan balance decreased by **RMB 587 million**, its share decreased by **2.02 percentage points** to **10.99%**, and the non-performing loan ratio increased by **0.52 percentage points** to **4.18%**[94](index=94&type=chunk)[95](index=95&type=chunk) [Loan and NPL Distribution by Region](index=27&type=section&id=Loan%20and%20NPL%20Distribution%20by%20Region) As of June 30, 2025, loans in Luzhou accounted for 66.71% of the total with an NPL ratio of 1.25%, while loans outside Luzhou accounted for 33.29% with an NPL ratio of 1.05% 2025 H1 Loan NPL Ratio (by Region) | Region | Loan Amount (RMB Thousand) | Percentage of Total % | NPL Ratio % | | :--- | :--- | :--- | :--- | |

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不負 責，對其準確性或完整性亦不發表任何聲明，並明確表示，概不對因本公告全部 或任何部份內容而產生或因倚賴該等內容而引致的任何損失承擔任何責任。 Jiangsu Guofu Hydrogen Energy Equipment Co., Ltd. 江蘇國富氫能技術裝備股份有限公司 （於中華人民共和國註冊成立的股份有限公司） （股份代號：02582） 截 至2025年6月30日止六個月的 中期業績公告 | | | | | | 截 | | 至6月30日止六個月 | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | | | | | 2025年 | | | 2024年 | | | | | | 附 註 | | 人民幣千元 | | 人民幣千元 | | | | | | | | | （未經審計） | | （未經審計） | | | 收 益 | | | | 4 | | 108,956 | | 134,886 | | | 銷售成本 | | | | | | (108,009) | ...

Financial Highlights [Interim Performance Overview](index=1&type=section&id=Interim%20Performance%20Overview) Chaowei Power Holdings Limited reported unaudited H1 2025 interim results, showing year-on-year growth in key financial metrics, with no interim dividend declared - The Board resolved not to declare an interim dividend for the period[4](index=4&type=chunk) Key Financial Data Comparison for H1 2025 | Indicator | H1 2025 (RMB) | H1 2024 (RMB) | Year-on-Year Growth | | :--- | :--- | :--- | :--- | | Revenue | 27.257 billion yuan | 21.236 billion yuan | 28.4% | | Gross Profit | 1.786 billion yuan | 1.614 billion yuan | 10.6% | | Profit Attributable to Owners of the Company | 205.2 million yuan | 203.4 million yuan | 0.9% | | Basic Earnings Per Share | 0.19 yuan | 0.18 yuan | 5.6% | Interim Condensed Consolidated Financial Statements [Interim Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=2&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) This section presents the unaudited consolidated statement of profit or loss and other comprehensive income for the six months ended June 30, 2025, detailing revenue, cost of sales, gross profit, various expenses, profit before tax, and profit attributable to owners, with a comparison to the same period in 2024 Interim Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (Summary) | Indicator | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Revenue | 27,257,243 | 21,236,322 | | Cost of sales | (25,471,209) | (19,622,114) | | Gross Profit | 1,786,034 | 1,614,208 | | Other income | 258,465 | 391,175 | | Distribution and selling expenses | (437,875) | (442,537) | | Administrative expenses | (281,976) | (317,946) | | Research and development expenses | (657,715) | (555,867) | | Finance costs | (243,952) | (230,246) | | Profit before tax | 367,239 | 408,317 | | Income tax expense | (91,040) | (95,724) | | Profit for the period | 276,199 | 312,593 | | Profit attributable to owners of the Company | 205,169 | 203,355 | | Non-controlling interests | 71,030 | 109,238 | | Basic and diluted earnings per share (RMB yuan) | 0.19 | 0.18 | [Interim Condensed Consolidated Statement of Financial Position](index=3&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) This section provides the unaudited consolidated statement of financial position as of June 30, 2025, detailing the composition of current assets, non-current assets, current liabilities, non-current liabilities, and equity, compared with audited data as of December 31, 2024 Interim Condensed Consolidated Statement of Financial Position (Summary) | Indicator | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | **Non-current assets** | | | | Property, plant and equipment | 4,541,825 | 4,607,263 | | Right-of-use assets | 627,662 | 636,969 | | Goodwill | 49,447 | 49,447 | | Intangible assets | 45,480 | 66,382 | | Deferred tax assets | 511,398 | 544,124 | | **Current assets** | | | | Inventories | 4,802,996 | 4,347,571 | | Trade receivables | 3,055,092 | 2,577,941 | | Restricted bank deposits | 4,224,550 | 3,277,050 | | Bank balances and cash | 3,828,789 | 3,612,035 | | **Current liabilities** | | | | Borrowings | 7,831,133 | 7,197,844 | | Trade payables | 1,681,538 | 1,616,192 | | Bills payable | 1,060,084 | 1,588,565 | | **Non-current liabilities** | | | | Borrowings | 2,569,189 | 2,242,776 | | **Total equity** | 7,880,022 | 7,650,064 | Notes to the Interim Condensed Consolidated Financial Statements [1. General Information](index=5&type=section&id=1.%20General%20Information) Chaowei Power Holdings Limited was incorporated in the Cayman Islands and listed on the Main Board of the Hong Kong Stock Exchange, with its principal business being the manufacturing and sale of lead-acid and lithium-ion batteries, and financial statements presented in RMB - The company was incorporated in the Cayman Islands on January 18, 2010, and listed on the Main Board of the Hong Kong Stock Exchange on July 7, 2010[8](index=8&type=chunk) - The Group's principal activities are the manufacturing and sale of lead-acid motive batteries, lithium-ion batteries, and other related products[8](index=8&type=chunk) - The condensed consolidated financial statements are presented in RMB, which is also the functional currency of the company and most of its subsidiaries[8](index=8&type=chunk) [2. Basis of Preparation](index=5&type=section&id=2.%20Basis%20of%20Preparation) The condensed consolidated financial statements for this period are prepared in accordance with IAS 34 "Interim Financial Reporting" and should be read in conjunction with the Group's annual financial statements for the year ended December 31, 2024 - The condensed consolidated financial statements are prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting" issued by the International Accounting Standards Board[9](index=9&type=chunk) - This report should be read in conjunction with the Group's annual financial statements for the year ended December 31, 2024[9](index=9&type=chunk) [3. Significant Accounting Policies](index=5&type=section&id=3.%20Significant%20Accounting%20Policies) The Group has not yet applied new and revised IFRSs that have been issued but are not yet effective, and is assessing their potential impact, which is not expected to be material to financial performance and position - The Group has not yet applied new and revised International Financial Reporting Standards (IFRSs) that have been issued but are not yet effective, and intends to adopt them upon their effective dates[10](index=10&type=chunk) - Current assessment indicates that the new and revised IFRSs may lead to changes in accounting policies but are unlikely to have a **material impact** on the Group's financial performance and position[11](index=11&type=chunk) - Amendments to IAS 21 regarding currency convertibility assessment and spot exchange rate estimation have no impact on the interim condensed consolidated financial information, as the Group's transaction and functional currencies are convertible[13](index=13&type=chunk) [4. Revenue](index=6&type=section&id=4.%20Revenue) The Group's revenue primarily derives from the sale of lead-acid motive batteries, lithium-ion batteries, and renewable materials, with total revenue of **RMB 27.257 billion** for the six months ended June 30, 2025, where renewable materials contributed the most, and revenue is recognized upon transfer of control and delivery of goods Disaggregation of Revenue from Contracts with Customers (H1 2025) | Product Category | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Electric bicycle batteries | 9,147,158 | 8,596,208 | | Electric vehicle batteries and special purpose electric vehicle batteries | 4,062,935 | 4,061,933 | | Lithium-ion batteries | 357,106 | 65,459 | | Renewable materials | 13,690,044 | 8,512,722 | | **Total Revenue** | **27,257,243** | **21,236,322** | - Revenue is recognized when control of the goods has been transferred and the goods have been delivered to the customer's designated location (at the time of delivery)[15](index=15&type=chunk) - The Group generally offers credit terms of **45 to 90 days** to customers with good credit records; otherwise, sales are conducted on a cash basis[15](index=15&type=chunk) [5. Profit Before Tax](index=7&type=section&id=5.%20Profit%20Before%20Tax) This section details various expenses affecting profit before tax, including staff costs, depreciation and amortization, cost of inventories sold, impairment loss provisions, and loss on disposal of property, plant and equipment, with a comparison to the prior period Items Deducted From / (Credited To) Profit Before Tax (Summary) | Item | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Total staff costs | 866,474 | 822,520 | | Total depreciation and amortization | 321,076 | 467,331 | | Cost of inventories sold | 25,471,209 | 19,622,114 | | Provision for impairment losses | 56,827 | (19,777) | | Loss on disposal of property, plant and equipment | 5,258 | 7,159 | | Net foreign exchange loss (gain) | 507 | (770) | - Total staff costs increased by **5.34% year-on-year**, primarily due to higher wages, salaries, and contributions to retirement benefit plans[16](index=16&type=chunk) - Total depreciation and amortization decreased by **31.3% year-on-year**, mainly due to reduced amortization of intangible assets and depreciation of property, plant and equipment[16](index=16&type=chunk) [6. Income Tax Expense](index=8&type=section&id=6.%20Income%20Tax%20Expense) Income tax expense for the period was **RMB 91.04 million**, a 4.9% year-on-year decrease, with Chinese subsidiaries subject to a 25% corporate income tax rate, and some high-tech enterprises enjoying a 15% preferential rate, leading to an effective tax rate increase to 24.8% due to higher-taxed subsidiaries' increased profit contribution Composition of Income Tax Expense | Item | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Current tax — PRC Enterprise Income Tax | 47,524 | 59,252 | | Under-provision (over-provision) in prior years — PRC Enterprise Income Tax | 6,920 | (4,346) | | Deferred tax | 36,596 | 40,818 | | **Total Income Tax Expense** | **91,040** | **95,724** | - The tax rate for PRC subsidiaries is **25%**, with certain high-tech enterprises eligible for a **preferential income tax rate of 15%**[17](index=17&type=chunk) - The effective tax rate for the period was approximately **24.8%**, higher than **23.4%** in the same period of 2024, primarily due to higher-taxed subsidiaries contributing more profit[56](index=56&type=chunk) [7. Earnings Per Share](index=8&type=section&id=7.%20Earnings%20Per%20Share) For the six months ended June 30, 2025, basic earnings per share attributable to owners of the company was **RMB 0.19**, up from **RMB 0.18** in the same period of 2024, with no adjustment for diluted ordinary shares as none were issued Earnings Per Share Calculation | Indicator | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Profit for the purpose of basic earnings per share (RMB thousand) | 205,169 | 203,355 | | Weighted average number of ordinary shares (thousand shares) | 1,104,127 | 1,104,127 | | Basic earnings per share (RMB yuan) | 0.19 | 0.18 | - Basic earnings per share amounts were not adjusted as the Group did not issue any potentially dilutive ordinary shares during either period[21](index=21&type=chunk) [8. Dividends](index=9&type=section&id=8.%20Dividends) During the period, the company declared a final dividend of **HKD 0.043** (approximately **RMB 0.039**) per share for the year ended December 31, 2024, totaling approximately **RMB 43.297 million**, and the Board resolved not to declare an interim dividend for the current period - A final dividend of **HKD 0.043** (approximately **RMB 0.039**) per share for the year ended December 31, 2024, totaling approximately **RMB 43,297,000**, was declared during the period[22](index=22&type=chunk) - The Board resolved not to declare an interim dividend for the period[23](index=23&type=chunk) [9. Trade Receivables](index=9&type=section&id=9.%20Trade%20Receivables) As of June 30, 2025, net trade receivables amounted to **RMB 3.055 billion**, an increase from December 31, 2024, with the Group generally offering **45 to 90 days** credit and providing detailed aging analysis Trade Receivables and Provision for Credit Losses | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Trade receivables from customer contracts | 3,835,192 | 3,308,520 | | Less: Provision for credit losses | (780,100) | (730,579) | | **Net amount** | **3,055,092** | **2,577,941** | Aging Analysis of Trade Receivables (Net of Provision for Doubtful Debts) | Aging | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | 0–45 days | 1,558,578 | 1,304,205 | | 46–90 days | 387,125 | 345,114 | | 91–180 days | 685,267 | 568,424 | | 181–365 days | 215,216 | 243,805 | | Over 365 days | 208,906 | 116,393 | | **Total** | **3,055,092** | **2,577,941** | [10. Receivables at Fair Value Through Other Comprehensive Income](index=10&type=section&id=10.%20Receivables%20at%20Fair%20Value%20Through%20Other%20Comprehensive%20Income) This balance represents bills receivable held by the Group measured at fair value through other comprehensive income, whose business model is to achieve objectives by collecting contractual cash flows and selling financial assets, with contractual cash flows solely comprising principal and interest payments on the outstanding principal amount - The balance represents bills receivable held by the Group measured at fair value through other comprehensive income[25](index=25&type=chunk) - The business model for these bills is to achieve objectives by collecting contractual cash flows and selling financial assets, and the contractual cash flows are solely payments of principal and interest on the outstanding principal amount[25](index=25&type=chunk) [11. Trade Payables](index=10&type=section&id=11.%20Trade%20Payables) As of June 30, 2025, total trade payables amounted to **RMB 1.6815 billion**, a slight increase from December 31, 2024, with an aging analysis provided by invoice date Aging Analysis of Trade Payables | Aging | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | 0–30 days | 931,557 | 958,901 | | 31–90 days | 485,211 | 348,006 | | 91–180 days | 99,935 | 165,659 | | 181–365 days | 35,190 | 27,178 | | 1–2 years | 20,939 | 32,605 | | Over 2 years | 108,706 | 83,843 | | **Total** | **1,681,538** | **1,616,192** | [12. Bills Payable](index=10&type=section&id=12.%20Bills%20Payable) All bills payable are transactional in nature and are due within one year from their issue date - All bills payable are transactional in nature and are due within one year from their issue date[27](index=27&type=chunk) Management Discussion and Analysis [Overall Financial Performance](index=11&type=section&id=Overall%20Financial%20Performance) The Group primarily manufactures and sells lead-acid and lithium-ion batteries and related products, with total revenue increasing by **28.4%** to **RMB 27.257 billion** and gross profit by **10.6%** to **RMB 1.786 billion**, though gross margin declined to **6.6%**, while profit attributable to owners grew by **0.9%** to **RMB 205.2 million**, and basic earnings per share reached **RMB 0.19** - The Group's principal activities are the manufacturing and sale of lead-acid motive batteries, lithium-ion batteries, and other related products[28](index=28&type=chunk) Overview of Overall Financial Performance | Indicator | H1 2025 (RMB) | H1 2024 (RMB) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Total Revenue | 27.257 billion yuan | 21.236 billion yuan | Increased by 28.4% | | Gross Profit | 1.786 billion yuan | 1.614 billion yuan | Increased by 10.6% | | Overall Gross Margin | 6.6% | 7.6% | Decreased by 1.0 percentage point | | Profit Attributable to Owners of the Company | 205.2 million yuan | 203.4 million yuan | Increased by 0.9% | | Basic Earnings Per Share | 0.19 yuan | 0.18 yuan | Increased by 0.01 yuan | [Industry Review](index=11&type=section&id=Industry%20Review) China's electric bicycle market continues to grow due to efficiency, convenience, and environmental benefits, with increasing demand from instant delivery services and new national standards and trade-in subsidies expected to further boost sales, while lead-acid batteries maintain dominance due to cost-effectiveness, safety, and high recycling rates - Electric bicycles remain a crucial short-distance transportation tool in China, favored by consumers for their efficiency, convenience, environmental friendliness, and cost-effectiveness[29](index=29&type=chunk) - China's instant delivery order volume reached **42 billion** in 2023, projected to exceed **48 billion** in 2024, driving demand in the electric bicycle market[29](index=29&type=chunk) - China's annual electric bicycle sales are expected to reach **52 million units** in 2025, benefiting from the release of new national standard policies and trade-in subsidies[30](index=30&type=chunk) - The new "Electric Bicycle Safety Technical Specification" will be implemented on September 1, 2025, aiming to enhance electric bicycle safety[31](index=31&type=chunk) - The "Implementation Plan for Promoting Electric Bicycle Trade-in" and related notices were issued, confirming the continuation of trade-in programs with consumer subsidies starting January 1, 2025[31](index=31&type=chunk) - Lead-acid motive batteries maintain a dominant share in the electric bicycle sector due to their **high cost-effectiveness, safety, stability, wide applicability, and high recycling rate**, with a substantial replacement market[33](index=33&type=chunk) [Business Operations](index=13&type=section&id=Business%20Operations) The Group's lead-acid motive battery business achieved stable growth, contributing **48.5%** of total revenue, with ongoing graphene battery technology innovation, while the lithium-ion battery business grew steadily to **RMB 357 million** in sales, and the renewable materials business established a nationwide standardized recycling network through a "trade-in, reverse logistics" model, obtaining hazardous waste operating permits - Lead-acid motive batteries are the Group's primary product, with sales revenue of approximately **RMB 13.21 billion** during the period, accounting for approximately **48.5%** of total revenue[34](index=34&type=chunk) - The Group continues to innovate in graphene battery technology, having accumulated over **39 related patents** and engaged Nobel laureate Professor Andre Geim[35](index=35&type=chunk) - The lithium-ion battery business achieved "National Torch Program Industrialization Demonstration Project Certificate" through the development and application of new materials, technologies, and processes, with sales revenue of approximately **RMB 357 million** during the period[36](index=36&type=chunk) - The Group fully initiated producer responsibility extension, establishing a nationwide standardized recycling network through "trade-in, reverse logistics" pilot programs in major cities across the country[37](index=37&type=chunk) - The Group has established recycling companies in provinces and cities including Tianjin, Hebei, Shanghai, Shandong, Fujian, and Guangxi, obtained **"Hazardous Waste Operating Permits"**, and set up over **65 centralized transfer points**[38](index=38&type=chunk) [Market and Brand](index=14&type=section&id=Market%20and%20Brand) The Group's sales network covers first and second-tier markets, employing a localized production strategy to reduce costs and enhance efficiency, while market promotion efforts, including exhibitions and celebrity endorsements, deepen brand influence, alongside active corporate social responsibility and consistent market recognition for technological advantages and high-quality development - The Group's sales and distribution network fully covers national first and second-tier markets, supported by a national service hotline and a comprehensive sales service system[39](index=39&type=chunk) - The Group adopts a strategic localized production layout, deploying manufacturing facilities in regions with high demand for lead-acid motive batteries to reduce warehousing and logistics costs and improve operational efficiency[40](index=40&type=chunk) - During the period, multiple market promotion activities were conducted, including participation in the 17th Shenzhen International Battery Technology Exchange Exhibition, and the 22nd consecutive year of engaging renowned actor Mr. Donnie Yen as brand ambassador[41](index=41&type=chunk) - The Group actively fulfills its social responsibilities, establishing a dedicated charity fund and co-organizing the "Technology Leads New Energy, Illuminating Students' Green Power Dreams Public Welfare Activity"[42](index=42&type=chunk) - The Group has received widespread market recognition, being included in prestigious lists such as "China's Top 500 Enterprises" and "China's Top 500 Private Enterprises," and successfully listed on the "China Brand Value Evaluation Information List"[43](index=43&type=chunk) - Research and development expenses for the period amounted to approximately **RMB 658 million**, accounting for approximately **2.4%** of total revenue, reflecting continued investment in technological innovation[44](index=44&type=chunk) - As of June 30, 2025, the Group has engaged over **30 renowned domestic and international experts** and established multiple R&D platforms, including a National Certified Enterprise Technology Center and a National Accredited Laboratory[45](index=45&type=chunk) [Future Development Strategies](index=16&type=section&id=Future%20Development%20Strategies) The Group will continue to prioritize technological innovation, seize opportunities in cutting-edge technologies, explore diversified innovation models focusing on "new technologies, new materials, and new products" to build an industrial upgrading system, while also pursuing green development, promoting "Zero-Carbon Chaowei" and "Smart Chaowei" initiatives, and optimizing strategic layouts to expand overseas markets and build a global new energy platform - The Group will continue to firmly prioritize **technological innovation**, seize opportunities in cutting-edge technologies, and pursue a path of sustainable high-quality development[46](index=46&type=chunk) - It will explore diversified innovation models, focusing on "new technologies, new materials, and new products," to build an industrial upgrading system through material innovation, intelligent manufacturing, and ecological synergy[46](index=46&type=chunk) - The Group will continue to practice green development, vigorously promoting the construction of "Zero-Carbon Chaowei" and "Smart Chaowei"[46](index=46&type=chunk) - Strategic layouts will be optimized to expand overseas markets in multiple directions, building a global new energy platform and driving towards a new stage of high-quality development[46](index=46&type=chunk) Financial Review [Revenue Analysis](index=16&type=section&id=Revenue%20Analysis) Revenue for the period was approximately **RMB 27.257 billion**, an increase of approximately **28.4%** compared to the same period in 2024, primarily driven by increased sales of renewable materials Revenue Comparison | Indicator | H1 2025 (RMB) | H1 2024 (RMB) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Revenue | 27,257,243,000 | 21,236,322,000 | Increased by 28.4% | - The increase in revenue was primarily due to increased sales of renewable materials[48](index=48&type=chunk) [Gross Profit Analysis](index=17&type=section&id=Gross%20Profit%20Analysis) Gross profit for the period was approximately **RMB 1.786 billion**, a year-on-year increase of approximately **10.6%**, however, the gross margin decreased from **7.6%** in the same period of 2024 to **6.6%** this period, mainly due to increased revenue from lower-margin renewable materials Gross Profit and Gross Margin Comparison | Indicator | H1 2025 (RMB) | H1 2024 (RMB) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Gross Profit | 1,786,034,000 | 1,614,208,000 | Increased by 10.6% | | Gross Margin | 6.6% | 7.6% | Decreased by 1.0 percentage point | - The decrease in gross margin was primarily due to increased revenue from lower-margin renewable materials[49](index=49&type=chunk) [Other Income Analysis](index=17&type=section&id=Other%20Income%20Analysis) Other income for the period was approximately **RMB 258.465 million**, a decrease of approximately **33.9%** compared to the same period in 2024, mainly due to a reduction in government grants received Other Income Comparison | Indicator | H1 2025 (RMB) | H1 2024 (RMB) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Other Income | 258,465,000 | 391,175,000 | Decreased by 33.9% | - The decrease in other income was primarily due to a reduction in government grants received during the period[50](index=50&type=chunk) [Distribution and Selling Expenses Analysis](index=17&type=section&id=Distribution%20and%20Selling%20Expenses%20Analysis) Distribution and selling expenses for the period were approximately **RMB 437.875 million**, a decrease of approximately **1.1%** compared to the same period in 2024, mainly due to reduced advertising and transportation expenses Distribution and Selling Expenses Comparison | Indicator | H1 2025 (RMB) | H1 2024 (RMB) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Distribution and Selling Expenses | 437,875,000 | 442,537,000 | Decreased by 1.1% | - The decrease in distribution and selling expenses was primarily due to reduced advertising and transportation expenses during the period[51](index=51&type=chunk) [Administrative Expenses Analysis](index=17&type=section&id=Administrative%20Expenses%20Analysis) Administrative expenses for the period were approximately **RMB 281.976 million**, a decrease of approximately **11.3%** compared to the same period in 2024, mainly due to reduced consulting fees and depreciation expenses Administrative Expenses Comparison | Indicator | H1 2025 (RMB) | H1 2024 (RMB) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Administrative Expenses | 281,976,000 | 317,946,000 | Decreased by 11.3% | - The decrease in administrative expenses was primarily due to reduced consulting fees and depreciation expenses incurred during the period[52](index=52&type=chunk) [Research and Development Expenses Analysis](index=17&type=section&id=Research%20and%20Development%20Expenses%20Analysis) Research and development expenses for the period were approximately **RMB 657.715 million**, an increase of approximately **18.3%** compared to the same period in 2024, mainly due to increased R&D expenses for lead-acid motive batteries and other new technology products Research and Development Expenses Comparison | Indicator | H1 2025 (RMB) | H1 2024 (RMB) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Research and Development Expenses | 657,715,000 | 555,867,000 | Increased by 18.3% | - The increase in research and development expenses was primarily due to increased R&D expenses for lead-acid motive batteries and other new technology products during the period[53](index=53&type=chunk) [Finance Costs Analysis](index=17&type=section&id=Finance%20Costs%20Analysis) Finance costs for the period were approximately **RMB 243.952 million**, an increase of approximately **6.0%** compared to the same period in 2024, mainly due to increased interest expenses on bank borrowings Finance Costs Comparison | Indicator | H1 2025 (RMB) | H1 2024 (RMB) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Finance Costs | 243,952,000 | 230,246,000 | Increased by 6.0% | - The increase in finance costs was primarily due to increased interest expenses on bank borrowings during the period[54](index=54&type=chunk) [Profit Before Tax Analysis](index=18&type=section&id=Profit%20Before%20Tax%20Analysis) Profit before tax decreased by approximately **10.1%** to **RMB 367.239 million** for the period, primarily due to the combined impact of the aforementioned changes in income and expenses Profit Before Tax Comparison | Indicator | H1 2025 (RMB) | H1 2024 (RMB) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Profit Before Tax | 367,239,000 | 408,317,000 | Decreased by 10.1% | [Income Tax Expense Analysis](index=18&type=section&id=Income%20Tax%20Expense%20Analysis) Income tax expense decreased by approximately **4.9%** to **RMB 91.04 million** for the period, while the effective tax rate increased from **23.4%** in the same period of 2024 to **24.8%** this period, mainly due to higher-taxed subsidiaries contributing more profit Income Tax Expense and Effective Tax Rate Comparison | Indicator | H1 2025 (RMB) | H1 2024 (RMB) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Income Tax Expense | 91,040,000 | 95,724,000 | Decreased by 4.9% | | Effective Tax Rate | 24.8% | 23.4% | Increased by 1.4 percentage points | - The increase in the effective tax rate was primarily due to higher-taxed subsidiaries contributing more profit during the period[56](index=56&type=chunk) [Profit Attributable to Owners of the Company Analysis](index=18&type=section&id=Profit%20Attributable%20to%20Owners%20of%20the%20Company%20Analysis) Profit attributable to owners of the company for the period was approximately **RMB 205.169 million**, an increase of approximately **0.9%** compared to the same period in 2024 Profit Attributable to Owners of the Company Comparison | Indicator | H1 2025 (RMB) | H1 2024 (RMB) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Profit Attributable to Owners of the Company | 205,169,000 | 203,355,000 | Increased by 0.9% | [Liquidity and Financial Resources](index=18&type=section&id=Liquidity%20and%20Financial%20Resources) As of June 30, 2025, the Group's net current assets were approximately **RMB 4.238 billion**, with cash and bank balances of approximately **RMB 3.829 billion**, net debt of approximately **RMB 2.351 billion**, a current ratio of **1.30**, and a gearing ratio of **9.6%**, indicating a sound financial position with ample cash and bank facilities and no significant foreign exchange risk Key Indicators of Liquidity and Financial Resources | Indicator | June 30, 2025 (RMB) | December 31, 2024 (RMB) | | :--- | :--- | :--- | | Net Current Assets | 4,238,035,000 | 3,662,836,000 | | Cash and Bank Balances | 3,828,789,000 | 3,612,035,000 | | Net Debt | 2,350,856,000 | 2,559,471,000 | | Current Ratio | 1.30 | 1.27 | | Gearing Ratio | 9.6% | 10.7% | - Borrowings are primarily used to finance the Group's capital expenditures, raw material purchases, and operations, with approximately **RMB 2.275 billion** bearing fixed interest rates and approximately **RMB 7.831 billion** repayable within one year[58](index=58&type=chunk) - The Group adopts a centralized financial and treasury policy, monitors interest rate risk conservatively, and has no significant foreign exchange rate risk as its business primarily operates in China and transacts in RMB[58](index=58&type=chunk)[60](index=60&type=chunk) [Pledge of Assets](index=19&type=section&id=Pledge%20of%20Assets) As of June 30, 2025, the Group pledged certain assets as collateral for bank facilities, including buildings, right-of-use assets, receivables at fair value through other comprehensive income, restricted bank deposits, and inventories Total Carrying Amount of Pledged Assets | Asset Category | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Buildings | 353,036 | 367,491 | | Right-of-use assets | 74,681 | 147,478 | | Receivables at fair value through other comprehensive income | 900,467 | 2,033,792 | | Restricted bank deposits | 4,224,550 | 3,277,050 | | Inventories | 50,355 | – | [Contingent Liabilities](index=19&type=section&id=Contingent%20Liabilities) As of June 30, 2025, the Group had no contingent liabilities - As of June 30, 2025, the Group had no contingent liabilities[61](index=61&type=chunk) Other Information [Human Resources and Employee Remuneration](index=19&type=section&id=Human%20Resources%20and%20Employee%20Remuneration) As of June 30, 2025, the Group employed **13,770 staff**, with total employee costs of approximately **RMB 866.474 million**, and continues to strengthen employee training and offer competitive remuneration Human Resources Overview | Indicator | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Total Number of Employees | 13,770 | 15,654 | | Total Employee Costs (RMB) | 866,474,000 | 822,520,000 | - The Group continues to strengthen employee training and offers competitive remuneration[62](index=62&type=chunk) [Material Investments and Acquisitions/Disposals](index=20&type=section&id=Material%20Investments%20and%20Acquisitions%2FDisposals) As of June 30, 2025, the Group held no material investments, nor did it undertake any material acquisitions or disposals of subsidiaries, associates, or joint ventures during the period - As of June 30, 2025, no material investments were held[63](index=63&type=chunk) - No material acquisitions or disposals of subsidiaries, associates, or joint ventures were undertaken during the period[63](index=63&type=chunk) - The Board has not authorized any plans for other significant investments or increases in capital assets[63](index=63&type=chunk) [Purchase, Sale or Redemption of Listed Securities](index=20&type=section&id=Purchase%20Sale%20or%20Redemption%20of%20Listed%20Securities) Neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities during the period, and as of June 30, 2025, the number of treasury shares held by the company was zero - Neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities during the period[64](index=64&type=chunk) - As of June 30, 2025, the number of treasury shares held by the company was zero[65](index=65&type=chunk) [Corporate Governance](index=20&type=section&id=Corporate%20Governance) The company is committed to maintaining high standards of corporate governance and has complied with all code provisions of the Corporate Governance Code in Appendix C1 of the Listing Rules during the period, though the roles of Chairman and CEO are not separated, which the Board believes benefits business strategy execution and operational efficiency - The company has complied with all code provisions of the Corporate Governance Code set out in Appendix C1 of the Listing Rules during the period[66](index=66&type=chunk) - Mr. Zhou Mingming serves as both Chairman and Chief Executive Officer, an arrangement the Board believes facilitates the execution of business strategies and enhances operational efficiency[66](index=66&type=chunk) [Directors' Securities Transactions](index=20&type=section&id=Directors'%20Securities%20Transactions) The company has adopted a code of conduct for securities transactions by directors, senior management, and relevant employees, and all directors have confirmed compliance with the required standards and the company's code of conduct during the period - The company has adopted a code of conduct for securities transactions by directors, senior management, and relevant employees, which is no less exacting than the Model Code for Securities Transactions by Directors of Listed Issuers set out in Appendix C3 of the Listing Rules[67](index=67&type=chunk) - All directors confirmed compliance with the Model Code and the company's code of conduct during the period[67](index=67&type=chunk) [Audit Committee](index=21&type=section&id=Audit%20Committee) The company's Audit Committee comprises three independent non-executive directors, chaired by Mr. Li Gangwei, and has reviewed the Group's unaudited results for the period, deeming them compliant with relevant accounting standards, rules, and regulations - The Audit Committee comprises three independent non-executive directors: Mr. Li Gangwei (Chairman), Mr. Wu Zhijie, and Mr. Sun Wenping[68](index=68&type=chunk) - The Committee has reviewed the Group's unaudited results for the period and considers them to be in compliance with relevant accounting standards, rules, and regulations[68](index=68&type=chunk) [Interim Dividends](index=21&type=section&id=Interim%20Dividends) The Board resolved not to declare an interim dividend for the period - The Board resolved not to declare an interim dividend for the period[69](index=69&type=chunk) [General Information (Auditor's Review)](index=21&type=section&id=General%20Information%20(Auditor's%20Review)) The Group's unaudited condensed consolidated financial statements for the period have been reviewed by Ernst & Young in accordance with International Standard on Review Engagements 2410 - The Group's unaudited condensed consolidated financial statements for the period have been reviewed by Ernst & Young in accordance with International Standard on Review Engagements 2410[70](index=70&type=chunk) [Publication of Interim Report](index=21&type=section&id=Publication%20of%20Interim%20Report) The company's full 2025 interim report will be dispatched to shareholders and published on the HKEXnews website and the company's website in due course - The company's full 2025 interim report will be published on the HKEXnews website (www.hkexnews.hk) and the company's website (www.chaowei.com.hk)[71](index=71&type=chunk) [Acknowledgements](index=22&type=section&id=Acknowledgements) The Board extends its sincere gratitude to the company's shareholders, the public, and all employees for their continued support and dedicated efforts - The Board extends its sincere gratitude to the company's shareholders and the public for their continued support, and to all employees for their efforts and dedication[72](index=72&type=chunk) [Board of Directors Composition](index=22&type=section&id=Board%20of%20Directors%20Composition) As of the date of this announcement, the Board comprises four executive directors, including Mr. Zhou Mingming (Chairman and CEO), one non-executive director, Ms. Fang Jianjun, and three independent non-executive directors, including Mr. Li Gangwei - The executive directors are Mr. Zhou Mingming (Chairman and Chief Executive Officer), Mr. Zhou Longrui, Ms. Yang Yunfei, and Mr. Yang Xinxin[74](index=74&type=chunk) - The non-executive director is Ms. Fang Jianjun[74](index=74&type=chunk) - The independent non-executive directors are Mr. Li Gangwei, Mr. Wu Zhijie, and Mr. Sun Wenping[74](index=74&type=chunk)

[Characteristics of GEM of The Stock Exchange of Hong Kong Limited](index=2&type=section&id=CHARACTERISTICS%20OF%20GEM%20OF%20THE%20STOCK%20EXCHANGE%20OF%20HONG%20KONG%20LIMITED%20%28THE%20%22STOCK%20EXCHANGE%22%29) The GEM market provides a listing platform for SMEs, but carries higher investment risks and market volatility, with directors fully responsible for report accuracy - GEM market positioning: Provides a listing platform for small and medium-sized companies, with **higher investment risks** than main board companies[2](index=2&type=chunk)[6](index=6&type=chunk) - Market risk: GEM securities may be subject to significant market volatility and do not guarantee high liquidity[3](index=3&type=chunk)[7](index=7&type=chunk) - Directors' responsibility: Company directors assume full responsibility for the report's content, confirming its accuracy, completeness, and non-misleading nature[5](index=5&type=chunk)[7](index=7&type=chunk) [Independent Review Report](index=3&type=section&id=INDEPENDENT%20REVIEW%20REPORT) Independent auditors reviewed the company's condensed consolidated interim financial information for the six months ended June 30, 2025, concluding its compliance with HKAS 34 [Introduction](index=3&type=section&id=INTRODUCTION) Independent auditors were engaged to review Nameko International Holdings Limited's condensed consolidated financial information for the six months ended June 30, 2025, under HKAS 34 and GEM Listing Rules - Review subject: Condensed consolidated financial information of Nameko International Holdings Limited and its subsidiaries for the six months ended June 30, 2025[9](index=9&type=chunk)[11](index=11&type=chunk) - Preparation basis: Complies with Hong Kong Accounting Standard 34 "Interim Financial Reporting" and GEM Listing Rules[9](index=9&type=chunk)[11](index=11&type=chunk) [Scope of Review](index=3&type=section&id=SCOPE%20OF%20REVIEW) The review was conducted under HKSRS 2410, primarily through inquiries and analytical procedures, with a scope narrower than an audit, thus no audit opinion is expressed - Review standard: Conducted in accordance with Hong Kong Standard on Review Engagements 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity"[10](index=10&type=chunk)[12](index=12&type=chunk) - Nature of review: Primarily involves inquiries and analytical procedures, with a scope significantly narrower than an audit, thus no audit opinion is expressed[10](index=10&type=chunk)[12](index=12&type=chunk) [Conclusion](index=4&type=section&id=CONCLUSION) Based on the review, independent auditors found no material non-compliance of the interim financial information with HKAS 34 - Financial information compliance: No material non-compliance found in the interim financial report with International Accounting Standard 34 Interim Financial Reporting[15](index=15&type=chunk)[16](index=16&type=chunk) [Condensed Consolidated Financial Statements](index=5&type=section&id=CONDENSED%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) This section presents the unaudited condensed consolidated financial statements for the six months ended June 30, 2025, including comparative data for 2024 - Reporting period: For the six months ended June 30, 2025[18](index=18&type=chunk)[19](index=19&type=chunk) - Nature of report: Unaudited condensed consolidated financial statements[18](index=18&type=chunk)[19](index=19&type=chunk) [Condensed Consolidated Statement of Profit or Loss – Unaudited](index=5&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENT%20OF%20PROFIT%20OR%20LOSS%20%E2%80%93%20UNAUDITED) For the six months ended June 30, 2025, the company reported a net loss of HK$6,286 thousand, compared to a net profit of HK$616 thousand in the prior period, driven by revenue decline and operating losses | Indicator | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 39,723 | 47,236 | -15.9% | | Cost of sales | (9,312) | (15,734) | -40.8% | | Gross profit | 30,411 | 31,502 | -3.5% | | Other income and other gains/(losses), net | (2,252) | 2,575 | -187.4% | | Operating (loss)/profit | (5,501) | 1,422 | -486.8% | | (Loss)/profit for the period | (6,286) | 616 | -1122.7% | | (Loss)/profit attributable to owners of the Company | (7,420) | (585) | -1168.4% | | Basic loss per share (HK cents) | (1.67) | (0.13) | -1184.6% | [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income – Unaudited](index=6&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENT%20OF%20PROFIT%20OR%20LOSS%20AND%20OTHER%20COMPREHENSIVE%20INCOME%20%E2%80%93%20UNAUDITED) For the six months ended June 30, 2025, the company reported a total comprehensive loss of HK$5,869 thousand, mainly due to the loss for the period and exchange differences | Indicator | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | | :--- | :--- | :--- | | (Loss)/profit for the period | (6,286) | 616 | | Exchange differences on translation of financial statements of overseas subsidiaries | (29) | 31 | | Fair value changes of equity instruments at fair value through other comprehensive income | 446 | (13) | | Other comprehensive income for the period, net of tax | 417 | 18 | | Total comprehensive income for the period | (5,869) | 634 | | Total comprehensive income attributable to owners of the Company | (7,003) | (567) | [Condensed Consolidated Statement of Financial Position – Unaudited](index=7&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENT%20OF%20FINANCIAL%20POSITION%20%E2%80%93%20UNAUDITED) As of June 30, 2025, total assets were HK$261,476 thousand and net assets were HK$202,024 thousand, a decrease from 2024 year-end, primarily due to reduced net current assets | Indicator | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Non-current assets | 158,219 | 156,770 | +0.9% | | Current assets | 103,257 | 121,335 | -14.9% | | Current liabilities | 38,736 | 38,225 | +1.3% | | Net current assets | 64,521 | 83,110 | -22.4% | | Non-current liabilities | 20,716 | 18,654 | +11.0% | | Net assets | 202,024 | 221,226 | -8.7% | | Share capital | 4,444 | 4,444 | 0.0% | | Reserves | 158,318 | 178,654 | -11.4% | | Equity attributable to owners of the Company | 162,762 | 183,098 | -11.1% | | Non-controlling interests | 39,262 | 38,128 | +3.0% | | Total equity | 202,024 | 221,226 | -8.7% | [Condensed Consolidated Statement of Changes in Equity – Unaudited](index=9&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENT%20OF%20CHANGES%20IN%20EQUITY%20%E2%80%93%20UNAUDITED) For the six months ended June 30, 2025, total equity decreased from HK$221,226 thousand to HK$202,024 thousand, mainly due to the loss for the period and dividends paid | Indicator | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Total equity as at January 1, 2025 | 221,226 | 219,274 | | (Loss)/profit for the period | (6,286) | 616 | | Other comprehensive income for the period | 417 | 18 | | Total comprehensive income for the period | (5,869) | 634 | | Dividends paid | (13,333) | – | | Total equity as at June 30, 2025 | 202,024 | 219,908 | - On June 25, 2024, the company cancelled share premium of approximately **HK$517,181 thousand** and transferred it to contributed surplus[34](index=34&type=chunk)[132](index=132&type=chunk) [Condensed Consolidated Statement of Cash Flows – Unaudited](index=10&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENT%20OF%20CASH%20FLOWS%20%E2%80%93%20UNAUDITED) For the six months ended June 30, 2025, net cash and cash equivalents decreased by HK$21,640 thousand, primarily due to cash outflows from investing and financing activities | Indicator | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Net cash generated from/(used in) operating activities | 14,395 | (3,683) | | Net cash used in investing activities | (19,950) | (20,458) | | Net cash used in financing activities | (16,085) | (323) | | Net decrease in cash and cash equivalents | (21,640) | (24,464) | | Effect of foreign exchange rate changes | (29) | 31 | | Cash and cash equivalents as at June 30 | 60,039 | 58,909 | [Notes to the Condensed Consolidated Financial Statements](index=11&type=section&id=NOTES%20TO%20THE%20CONDENSED%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) This section provides detailed notes to the condensed consolidated financial statements, covering corporate information, accounting policies, revenue, expenses, assets, liabilities, segment reporting, fair value measurement of financial instruments, and capital commitments - Reporting period: For the six months ended June 30, 2025[32](index=32&type=chunk) - Currency unit: Presented in HK$ thousand unless otherwise stated[34](index=34&type=chunk) [1. Corporate Information](index=11&type=section&id=1.%20CORPORATE%20INFORMATION) Nameko International Holdings Limited, incorporated in Cayman Islands and re-domiciled in Bermuda, is an investment holding company with subsidiaries engaged in software, e-commerce, securities investment, and IT services - Company registration: Incorporated in the Cayman Islands and re-domiciled in Bermuda[32](index=32&type=chunk)[37](index=37&type=chunk) - Principal activities: Investment holding, software R&D and distribution, B2C/B2B e-commerce platform operation, securities investment, enterprise management solutions, and IT contract services[33](index=33&type=chunk)[37](index=37&type=chunk) [2. Basis of Preparation](index=11&type=section&id=2.%20BASIS%20OF%20PREPARATION) The unaudited condensed consolidated interim financial statements are prepared in accordance with HKAS 34, HK GAAP, and GEM Listing Rules, consistent with 2024 audited statements, except for new HKFRS amendments - Basis of preparation: Prepared in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting", Hong Kong Generally Accepted Accounting Principles, and GEM Listing Rules[35](index=35&type=chunk)[38](index=38&type=chunk) - Consistency of accounting policies: Consistent with those used in the 2024 audited consolidated financial statements, except for new and revised HKFRS accounting standards adopted for the first time[36](index=36&type=chunk)[38](index=38&type=chunk) [3. Adoption of New and Revised HKFRS Accounting Standards](index=12&type=section&id=3.%20ADOPTION%20OF%20NEW%20AND%20REVISED%20HKFRS%20ACCOUNTING%20STANDARDS) The Group adopted all new and revised HKFRS effective January 1, 2025, with no significant impact on accounting policies or financial statements, and is assessing future standards - New standards adoption: The Group has adopted all relevant new and revised HKFRS accounting standards effective from January 1, 2025[39](index=39&type=chunk)[42](index=42&type=chunk) - Impact assessment: The adoption of new standards did not result in significant changes to the Group's accounting policies, financial statement presentation, or reported amounts[39](index=39&type=chunk)[42](index=42&type=chunk) - Future standards: The Group is assessing the potential impact of new and revised HKFRS accounting standards effective in future periods[41](index=41&type=chunk)[44](index=44&type=chunk) [4. Revenue](index=13&type=section&id=4.%20REVENUE) For the six months ended June 30, 2025, total revenue was HK$39,723 thousand, a decrease from the prior period, primarily from software sales and IT services | Service Line | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Sales of computer and mobile phone software and toolbar advertisements | 36,576 | 36,091 | +1.3% | | Provision of enterprise management solutions and IT contract services | 3,147 | 11,145 | -71.8% | | **Total Revenue** | **39,723** | **47,236** | **-15.9%** | [5. Other Income and Other Gains and (Losses), Net](index=14&type=section&id=5.%20OTHER%20INCOME%20AND%20OTHER%20GAINS%20AND%20%28LOSSES%29%2C%20NET) For the six months ended June 30, 2025, net other income and gains/(losses) was a loss of HK$2,252 thousand, compared to a gain of HK$2,575 thousand in the prior period, mainly due to goodwill impairment and financial asset losses | Indicator | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Bank interest income | 439 | 213 | | Dividend income | 43 | 123 | | Other income | – | 9 | | Goodwill impairment loss | (2,300) | – | | Realized and unrealized (losses)/gains on financial assets at fair value through profit or loss | (541) | 2,386 | | Exchange gains/(losses), net | 107 | (156) | | **Total** | **(2,252)** | **2,575** | - The Group recognized a goodwill impairment loss of **HK$2,300 thousand** for Wifa Systems (Hong Kong) Limited[49](index=49&type=chunk)[50](index=50&type=chunk) [6. (Loss)/Profit Before Tax](index=15&type=section&id=6.%20%28LOSS%29%2FPROFIT%20BEFORE%20TAX) For the six months ended June 30, 2025, the Group reported a loss before tax of HK$5,530 thousand, compared to a profit of HK$1,394 thousand in the prior period, impacted by goodwill impairment, intangible asset amortization, and increased staff costs | Item | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Interest expense on lease liabilities | 29 | 28 | | Salaries, wages and other benefits | 7,701 | 7,022 | | Retirement scheme contributions | 209 | 194 | | Amortization of intangible assets | 19,688 | 19,072 | | Goodwill impairment loss | 2,300 | – | | Auditor's remuneration | 351 | 351 | | Depreciation of property, plant and equipment | 2 | 3 | | Depreciation of right-of-use assets | 374 | 297 | | Provision for impairment loss on trade and other receivables | 175 | 478 | | Legal and professional fees | 774 | 985 | | Short-term lease related expenses | 60 | 17 | [7. Income Tax Expense](index=16&type=section&id=7.%20INCOME%20TAX%20EXPENSE) For the six months ended June 30, 2025, income tax expense was HK$756 thousand, slightly lower than HK$778 thousand in the prior period, comprising Hong Kong profits tax, withholding tax, and deferred tax | Item | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Current tax - Hong Kong profits tax | 550 | 704 | | Current tax - Withholding tax for the period | 84 | 74 | | Deferred tax | 122 | – | | **Total** | **756** | **778** | - Hong Kong profits tax operates under a two-tiered system, with the first **HK$2 million** of assessable profits taxed at **8.25%** and the remainder at **16.5%**[57](index=57&type=chunk) - No provision for PRC enterprise income tax was made for the Group's PRC subsidiaries for the current and prior periods due to tax losses incurred[57](index=57&type=chunk) [8. Dividends](index=17&type=section&id=8.%20DIVIDENDS) The Board does not recommend any interim dividend for the first half of 2025; the company paid a final and special dividend totaling HK$0.030 per share, or HK$13,333 thousand, during the period - Interim dividend: The Board does not recommend any interim dividend for the current period (2024: nil)[59](index=59&type=chunk)[61](index=61&type=chunk) - Dividends paid: During the period, a final dividend of **HK$0.002** per share and a special dividend of **HK$0.028** per share for 2024, totaling **HK$0.030** per share, amounting to approximately **HK$13,333 thousand**, were paid[59](index=59&type=chunk)[61](index=61&type=chunk) [9. Loss Per Share](index=17&type=section&id=9.%20LOSS%20PER%20SHARE) For the six months ended June 30, 2025, basic loss per share was 1.67 HK cents, a significant increase from 0.13 HK cents in the prior period, due to increased loss attributable to owners | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | Loss attributable to owners of the Company (HK$ Thousand) | (7,420) | (585) | | Weighted average number of ordinary shares (Thousand shares) | 444,448 | 444,448 | | Basic loss per share (HK cents) | (1.67) | (0.13) | - Diluted loss per share is the same as basic loss per share as there were no potential dilutive ordinary shares for the current and prior periods[63](index=63&type=chunk)[64](index=64&type=chunk) [10. Segment Reporting](index=18&type=section&id=10.%20SEGMENT%20REPORTING) The Group segments its business into four reportable segments: software, securities investment, enterprise management solutions and IT contract services, and B2C/B2B product trading, reporting their performance, assets, and liabilities - Reportable segments: Software business, securities investment business, enterprise management solutions and IT contract services business, and B2C online sales platform and B2B product trading business[65](index=65&type=chunk)[67](index=67&type=chunk) - Reporting purpose: To monitor segment performance and allocate resources among segments[66](index=66&type=chunk)[67](index=67&type=chunk) [10. (a) Segment results](index=18&type=section&id=10.%20%28a%29%20Segment%20results) For the six months ended June 30, 2025, software business recorded a profit, while other segments reported losses, leading to an overall operating loss for the Group | Segment | 2025 Revenue (HK$ Thousand) | 2025 Segment Results (HK$ Thousand) | 2024 Revenue (HK$ Thousand) | 2024 Segment Results (HK$ Thousand) | | :--- | :--- | :--- | :--- | :--- | | Software business | 36,576 | 5,513 | 36,091 | 5,652 | | Securities investment business | – | (536) | – | 2,450 | | Enterprise management solutions and IT contract services business | 3,147 | (3,248) | 11,145 | 91 | | B2C online sales platform and B2B product trading business | – | (405) | – | (650) | | **Total** | **39,723** | **1,324** | **47,236** | **7,543** | - In the first half of 2025, the Group reported an operating loss of **HK$5,501 thousand**, compared to an operating profit of **HK$1,422 thousand** in the prior period[70](index=70&type=chunk)[74](index=74&type=chunk) [10. (b) Segment assets and liabilities](index=22&type=section&id=10.%20%28b%29%20Segment%20assets%20and%20liabilities) As of June 30, 2025, total segment assets were HK$233,147 thousand and total segment liabilities were HK$55,552 thousand, with the software business accounting for the largest share | Segment | June 30, 2025 Segment Assets (HK$ Thousand) | June 30, 2025 Segment Liabilities (HK$ Thousand) | December 31, 2024 Segment Assets (HK$ Thousand) | December 31, 2024 Segment Liabilities (HK$ Thousand) | | :--- | :--- | :--- | :--- | :--- | | Software business | 167,864 | 47,733 | 172,361 | 50,491 | | Securities investment business | 29,306 | 30 | 29,426 | 60 | | Enterprise management solutions and IT contract services business | 19,266 | 7,441 | 18,374 | 3,309 | | B2C online sales platform and B2B product trading business | 16,711 | 348 | 17,074 | 375 | | **Total Segments** | **233,147** | **55,552** | **237,235** | **54,235** | - As of June 30, 2025, unallocated assets included property, plant and equipment of **HK$4 thousand**, right-of-use assets of **HK$2,874 thousand**, trade and other receivables of **HK$1,936 thousand**, and cash and cash equivalents of **HK$23,515 thousand**[81](index=81&type=chunk) - Capitalized development costs for the software business amounted to **HK$20,429 thousand** (December 31, 2024: HK$41,583 thousand)[81](index=81&type=chunk)[83](index=83&type=chunk) [10. (c) Geographical information](index=25&type=section&id=10.%20%28c%29%20Geographical%20information) For the six months ended June 30, 2025, the Group's revenue primarily originated from the United States, Hong Kong, and the United Kingdom, with all specific non-current assets located in Hong Kong | Country/Region | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | | :--- | :--- | :--- | | United States of America | 16,361 | 16,163 | | Hong Kong | 3,284 | 11,321 | | United Kingdom | 2,562 | 2,423 | | Brazil | 1,804 | 2,072 | | Germany | 1,571 | 1,959 | | Japan | 1,352 | 1,143 | | Canada | 1,253 | 1,281 | | Australia | 1,139 | 1,147 | | Netherlands | 643 | 798 | | Mainland China | 319 | 282 | | Others | 9,435 | 8,647 | | **Total** | **39,723** | **47,236** | - As of June 30, 2025, all specific non-current assets (including property, plant and equipment, right-of-use assets, intangible assets, and goodwill) were located in Hong Kong, totaling **HK$156,706 thousand**[86](index=86&type=chunk) [10. (d) Information about major customers](index=26&type=section&id=10.%20%28d%29%20Information%20about%20major%20customers) For the six months ended June 30, 2025, one major customer in the enterprise management solutions and IT contract services segment contributed approximately 11.5% of total revenue - Major customer contribution: In the first half of 2025, one customer contributed approximately **11.5%** of the total revenue of the enterprise management solutions and IT contract services business segment[87](index=87&type=chunk)[91](index=91&type=chunk) - Prior period contribution: In the first half of 2024, one customer in the same business segment contributed approximately **16.5%** of total revenue[88](index=88&type=chunk)[91](index=91&type=chunk) [11. Right-of-Use Assets](index=26&type=section&id=11.%20RIGHT-OF-USE%20ASSETS) As of June 30, 2025, right-of-use assets were HK$2,874 thousand, a significant increase from HK$311 thousand at 2024 year-end, mainly due to a new office property lease agreement | Indicator | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Right-of-use assets | 2,874 | 311 | +824.1% | - New lease: During the period, the Group entered into a new three-year lease agreement for office premises, recognizing right-of-use assets and lease liabilities of approximately **HK$2,938 thousand**[89](index=89&type=chunk)[92](index=92&type=chunk) - Depreciation: Depreciation of right-of-use assets for the period was approximately **HK$374 thousand** (2024: approximately HK$297 thousand)[90](index=90&type=chunk)[93](index=93&type=chunk) [12. Goodwill](index=27&type=section&id=12.%20GOODWILL) As of June 30, 2025, goodwill carrying amount was HK$40,225 thousand, a decrease from HK$42,525 thousand at 2024 year-end, primarily due to an impairment loss of HK$2,300 thousand for Wifa Systems (Hong Kong) Limited | Indicator | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Cost | 778,575 | 778,575 | | Accumulated impairment losses | 738,350 | 736,050 | | Carrying amount | 40,225 | 42,525 | - Goodwill impairment: An impairment loss of **HK$2,300 thousand** was recognized for the goodwill of Wifa Systems (Hong Kong) Limited during the period, due to its underperforming financial results and significant revenue decline[99](index=99&type=chunk)[101](index=101&type=chunk) - Valuation method: Fair value less costs of disposal (FVLCD) method was used, employing market approach (price-to-sales multiples, enterprise value-to-sales multiples) for valuation[100](index=100&type=chunk)[102](index=102&type=chunk) [13. Financial Assets at Fair Value Through Other Comprehensive Income](index=29&type=section&id=13.%20FINANCIAL%20ASSETS%20AT%20FAIR%20VALUE%20THROUGH%20OTHER%20COMPREHENSIVE%20INCOME) As of June 30, 2025, financial assets at fair value through other comprehensive income were HK$1,513 thousand, an increase from HK$1,067 thousand at 2024 year-end, primarily comprising unlisted equity securities | Indicator | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Unlisted equity securities | 1,513 | 1,067 | +41.8% | - Valuation method: Fair value of unlisted equity securities was estimated by an independent valuer using the index return method at the end of the reporting period[107](index=107&type=chunk) [14. Trade and Other Receivables](index=29&type=section&id=14.%20TRADE%20AND%20OTHER%20RECEIVABLES) As of June 30, 2025, total trade and other receivables were HK$17,007 thousand, a significant increase from HK$11,484 thousand at 2024 year-end, mainly due to higher prepayments, deposits, other receivables, and amounts due from brokers | Item | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Trade receivables (net of impairment provision) | 9,337 | 9,404 | -0.7% | | Prepayments, deposits and other receivables | 5,465 | 1,630 | +235.3% | | Amounts due from brokers | 2,117 | 362 | +484.8% | | Amounts due from non-controlling interests of a subsidiary | 88 | 88 | 0.0% | | **Total** | **17,007** | **11,484** | **+48.1%** | - Trade receivables aging: As of June 30, 2025, trade receivables not yet due were **HK$7,988 thousand**, and those overdue for more than 12 months were **HK$14 thousand**[111](index=111&type=chunk) - Other loans receivable: The loan receivable from Jun Yang Energy Holdings Limited is unsecured, interest-free, and has no fixed repayment terms, with a full impairment provision of **HK$27,230 thousand** recognized[116](index=116&type=chunk)[119](index=119&type=chunk) [15. Financial Assets at Fair Value Through Profit or Loss](index=32&type=section&id=15.%20FINANCIAL%20ASSETS%20AT%20FAIR%20VALUE%20THROUGH%20PROFIT%20OR%20LOSS) As of June 30, 2025, financial assets at fair value through profit or loss were HK$25,212 thousand, a decrease from HK$27,449 thousand at 2024 year-end, primarily comprising Hong Kong listed equity securities | Item | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Hong Kong listed equity securities | 25,211 | 27,448 | -8.2% | | Unlisted equity securities | 1 | 1 | 0.0% | | **Total** | **25,212** | **27,449** | **-8.2%** | - Investment nature: These investments aim to provide return opportunities to the Group through dividend income and fair value gains, with no fixed maturity dates or coupon rates[124](index=124&type=chunk) - Valuation method: Listed securities in active markets are valued at market price; listed securities with suspended trading and unlisted securities are classified as Level 3, estimated by an independent valuer using the index return method[122](index=122&type=chunk)[123](index=123&type=chunk)[125](index=125&type=chunk) [16. Trade and Other Payables](index=33&type=section&id=16.%20TRADE%20AND%20OTHER%20PAYABLES) As of June 30, 2025, total trade and other payables were HK$6,453 thousand, a decrease from HK$9,659 thousand at 2024 year-end, mainly due to a reduction in accrued expenses and other payables | Item | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Trade payables | 2,625 | 821 | +219.7% | | Accrued expenses and other payables | 3,828 | 8,838 | -56.7% | | **Total** | **6,453** | **9,659** | **-33.3%** | - Trade payables aging: As of June 30, 2025, all trade payables were within **3 months**[128](index=128&type=chunk) [17. Share Capital](index=33&type=section&id=17.%20SHARE%20CAPITAL) As of June 30, 2025, the company's authorized share capital was HK$800,000 thousand, with issued and fully paid share capital of HK$4,444 thousand, comprising 444,448 thousand ordinary shares at HK$0.01 par value, unchanged from 2024 year-end | Item | Par Value (HK$) | Number of Shares (Thousand shares) | Amount (HK$ Thousand) | | :--- | :--- | :--- | :--- | | Authorized ordinary shares | 0.01 | 80,000,000 | 800,000 | | Issued and fully paid ordinary shares | 0.01 | 444,448 | 4,444 | [18. Reserves](index=34&type=section&id=18.%20RESERVES) Changes in the Group's reserves are presented in the unaudited condensed consolidated statement of changes in equity; approximately HK$517,181 thousand of share premium was cancelled and transferred to contributed surplus on June 25, 2024 - Reserve movements: The Group's reserve amounts and movements are presented in the unaudited condensed consolidated statement of changes in equity[131](index=131&type=chunk) - Share premium cancellation: On June 25, 2024, approximately **HK$517,181 thousand** of share premium was cancelled and transferred to an account designated as contributed surplus[132](index=132&type=chunk)[135](index=135&type=chunk) [19. Fair Value Measurement of Financial Instruments](index=34&type=section&id=19.%20FAIR%20VALUE%20MEASUREMENT%20OF%20FINANCIAL%20INSTRUMENTS) The carrying amounts of the Group's financial assets and liabilities approximate their fair values, with fair value measurements categorized into a three-level hierarchy, primarily using Level 3 inputs for unlisted and inactive market equity securities - Fair value hierarchy: Divided into three levels, Level 1 for quoted prices in active markets, Level 2 for observable inputs, and Level 3 for unobservable inputs[137](index=137&type=chunk) - Valuation process: Management is responsible for fair value measurements, reviewed at least annually; Level 3 measurements typically involve external valuation experts with recognized professional qualifications[148](index=148&type=chunk)[149](index=149&type=chunk) | Item | Level 1 (HK$ Thousand) | Level 3 (HK$ Thousand) | Total (HK$ Thousand) | | :--- | :--- | :--- | :--- | | Financial assets at fair value through profit or loss - Listed equity securities | 19,552 | 5,659 | 25,211 | | Financial assets at fair value through profit or loss - Unlisted equity securities | – | 1 | 1 | | Financial assets at fair value through other comprehensive income - Unlisted equity securities | – | 1,513 | 1,513 | | **Total** | **19,552** | **7,173** | **26,725** | [20. Capital Commitments](index=41&type=section&id=20.%20CAPITAL%20COMMITMENTS) As of June 30, 2025, total contracted but unprovided capital commitments were HK$20,457 thousand, mainly for intangible asset development costs and property, plant, and equipment acquisition | Item | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Development costs of intangible assets | 20,429 | – | | Costs of property, plant and equipment | 28 | – | | **Total** | **20,457** | **–** | [Management Discussion and Analysis](index=42&type=section&id=MANAGEMENT%20DISCUSSION%20AND%20ANALYSIS) This section reviews the Group's business and financial performance for the six months ended June 30, 2025, analyzing segment operations, financial metric changes, risk factors, and future outlook - Reporting period: For the six months ended June 30, 2025[167](index=167&type=chunk) - Content covered: Business review, financial review, risk factors, treasury policy, material transactions, employees and remuneration policies, contingent liabilities, capital commitments, and outlook[167](index=167&type=chunk)[191](index=191&type=chunk)[209](index=209&type=chunk)[222](index=222&type=chunk)[223](index=223&type=chunk)[224](index=224&type=chunk)[225](index=225&type=chunk)[226](index=226&type=chunk)[232](index=232&type=chunk) [Business Review](index=42&type=section&id=BUSINESS%20REVIEW) The business review covers the performance of software, IT services, e-commerce, and securities investment segments, highlighting challenges and future development directions - Business diversification: The Group's businesses cover software, IT services, e-commerce, and securities investment[33](index=33&type=chunk)[37](index=37&type=chunk) - Market challenges: Post-pandemic changes in customer behavior, intense competition in the IT industry, inflation, and geopolitical pressures create uncertainties[173](index=173&type=chunk)[179](index=179&type=chunk) [Software Business](index=42&type=section&id=Software%20Business) Software business revenue slightly increased, but segment profit marginally decreased; the Group continues R&D investment, market expansion, and product optimization, with new software versions expected by late 2025 | Indicator | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 36,576 | 36,091 | +1.3% | | Segment profit | 5,513 | 5,652 | -2.5% | - Product innovation: Continuous investment in R&D teams, strengthening cybersecurity, software product development, and marketing channels, with a focus on security defense and computer optimization[169](index=169&type=chunk)[172](index=172&type=chunk) - Market expansion: Consolidating customer base in traditional markets and exploring business opportunities and distribution channels in emerging markets such as the Asia Pacific region[170](index=170&type=chunk)[172](index=172&type=chunk) - User growth: Total new users exceeded **17 million** during the period, including new non-paying users and active paying users[170](index=170&type=chunk)[172](index=172&type=chunk) [Corporate Management Solutions and I.T. Contract Services Business](index=43&type=section&id=Corporate%20Management%20Solutions%20and%20I.T.%20Contract%20Services%20Business) This segment's revenue significantly declined, resulting in a loss, primarily due to intense competition in Hong Kong's IT sector and goodwill impairment; the Group plans to enhance competitiveness and pursue new projects | Indicator | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 3,147 | 11,145 | -71.8% | | Segment (loss)/profit | (3,248) | 91 | -3670.3% | - Loss reason: Primarily due to intense competition in the IT industry and a goodwill impairment loss of **HK$2,300 thousand**[174](index=174&type=chunk)[180](index=180&type=chunk) - Future strategy: Committed to enhancing competitiveness, strengthening technical capabilities, maintaining service quality standards, and actively pursuing government and corporate contract projects[176](index=176&type=chunk)[180](index=180&type=chunk) [B2C Online Sales Platform and B2B Product Trading Business](index=43&type=section&id=B2C%20Online%20Sales%20Platform%20and%20B2B%20Product%20Trading%20Business) This segment generated no revenue during the period, but its segment loss narrowed; the Group will continue developing online and offline sales channels and exploring new business opportunities | Indicator | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | – | – | 0.0% | | Segment loss | (405) | (650) | -37.7% | - Development direction: Committed to providing quality products to global customers by developing online and offline sales channels and exploring new business opportunities[178](index=178&type=chunk)[182](index=182&type=chunk) [Securities Investment Business](index=44&type=section&id=Securities%20Investment%20Business) The securities investment business recorded a segment loss of HK$536 thousand, compared to a profit of HK$2,450 thousand in the prior period, mainly due to realized and unrealized losses on financial assets; the Group will continue to monitor the market and explore opportunities | Indicator | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Segment (loss)/profit | (536) | 2,450 | -1218.8% | - Loss reason: Primarily due to net realized and unrealized losses of approximately **HK$541 thousand** on financial assets at fair value through profit or loss[184](index=184&type=chunk)[188](index=188&type=chunk) - Investment portfolio: As of June 30, 2025, FVTPL financial assets and FVTOCI financial assets had fair values of **HK$25,212 thousand** and **HK$1,513 thousand** respectively, comprising **11 investment items**, of which **9** were listed shares[186](index=186&type=chunk)[189](index=189&type=chunk) - Key investment: Holds shares in Goldstream Investment Limited, with a market value of approximately **HK$32,962 thousand** as of August 22, 2025[187](index=187&type=chunk)[190](index=190&type=chunk) [Financial Review](index=45&type=section&id=FINANCIAL%20REVIEW) The Group's financial performance shows decreased total revenue and gross profit, shifting from profit to loss for the period, primarily due to underperforming business segments and increased corporate expenses, with liquidity remaining adequate despite a slight rise in gearing - Revenue decline: Total revenue for the period was approximately **HK$39,723 thousand**, a **15.9%** year-on-year decrease[191](index=191&type=chunk)[197](index=197&type=chunk) - Net loss: A net loss of approximately **HK$6,286 thousand** was recorded for the period, compared to a profit of approximately **HK$616 thousand** in the prior period[194](index=194&type=chunk)[200](index=200&type=chunk) - Loss attribution: Primarily due to segment losses in securities investment, enterprise management solutions and IT contract services, B2C online sales platform and B2B product trading businesses, combined with increased corporate expenses[194](index=194&type=chunk)[200](index=200&type=chunk) [Revenue](index=45&type=section&id=Revenue) For the six months ended June 30, 2025, total Group revenue was HK$39,723 thousand, a 15.9% year-on-year decrease, primarily from software and IT contract services | Indicator | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Total Revenue | 39,723 | 47,236 | -15.9% | | Software business revenue | 36,576 | – | – | | Enterprise management solutions and IT contract services business revenue | 3,147 | – | – | [Gross Profit](index=45&type=section&id=Gross%20Profit) For the six months ended June 30, 2025, the Group's gross profit was HK$30,411 thousand, a 3.5% year-on-year decrease | Indicator | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Gross profit | 30,411 | 31,502 | -3.5% | [Finance Costs](index=45&type=section&id=Finance%20Costs) For the six months ended June 30, 2025, the Group's finance costs were HK$29 thousand, a slight increase of 3.6% year-on-year | Indicator | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Finance costs | 29 | 28 | +3.6% | [(Loss)/Profit for the Period](index=45&type=section&id=%28Loss%29%2FProfit%20for%20the%20Period) For the six months ended June 30, 2025, the Group reported a net loss of HK$6,286 thousand, compared to a net profit of HK$616 thousand in the prior period, due to segment losses and increased corporate expenses | Indicator | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Net (loss)/profit for the period | (6,286) | 616 | | Net (loss)/profit attributable to owners of the Company | (7,420) | (585) | - Loss attribution: Primarily due to segment losses in securities investment, enterprise management solutions and IT contract services, B2C online sales platform and B2B product trading businesses, combined with increased corporate expenses[194](index=194&type=chunk)[200](index=200&type=chunk) [Liquidity, Financial Resources and Capital Structure](index=46&type=section&id=Liquidity%2C%20Financial%20Resources%20and%20Capital%20Structure) As of June 30, 2025, total cash and cash equivalents were HK$60,683 thousand, a decrease from 2024 year-end; the Group primarily funds operations through internal resources, with no significant changes in capital structure or financial institution loans | Indicator | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Total cash and cash equivalents and pledged bank deposits | 60,683 | 82,349 | -26.3% | - Funding sources: The Group primarily funds its operations through internal resources, with no significant changes in its capital structure[196](index=196&type=chunk)[201](index=201&type=chunk) - Loan status: As of June 30, 2025, and December 31, 2024, the Group had no loans from financial institutions[203](index=203&type=chunk)[210](index=210&type=chunk) [Gearing Ratio](index=46&type=section&id=Gearing%20Ratio) As of June 30, 2025, the Group's gearing ratio was 22.7%, a slight increase from 20.5% at 2024 year-end | Indicator | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Total assets | 261,476 | 278,105 | | Total liabilities | 59,452 | 56,879 | | Gearing ratio | 22.7% | 20.5% | [Dividend](index=46&type=section&id=Dividend) The Board does not recommend any interim dividend for the current period - Interim dividend: The Board does not recommend any interim dividend for the current period (2024: nil)[205](index=205&type=chunk)[212](index=212&type=chunk) [Charges on the Group's Assets](index=46&type=section&id=Charges%20on%20the%20Group%27s%20Assets) As of June 30, 2025, the Group had pledged bank deposits of approximately HK$644 thousand to secure a HK$500 thousand banking facility, with approximately HK$287 thousand in undrawn facilities - Pledged bank deposits: Approximately **HK$644 thousand** (December 31, 2024: HK$641 thousand), pledged as collateral for the Group's **HK$500 thousand** banking facility[206](index=206&type=chunk)[213](index=213&type=chunk) - Undrawn banking facilities: Approximately **HK$287 thousand** (December 31, 2024: HK$307 thousand)[207](index=207&type=chunk)[213](index=213&type=chunk) - Margin trading accounts: As of June 30, 2025, and December 31, 2024, the Group did not hold any margin trading accounts[208](index=208&type=chunk)[213](index=213&type=chunk) [Risk Factors](index=46&type=section&id=RISK%20FACTORS) The Group faces foreign exchange, financial, operational, and credit risks, managed through close monitoring of exchange rates, regular review of financial assets, assessment of operational risks, and enhanced accounts receivable management - Risk types: Foreign exchange risk, financial risk, operational risk, credit risk[209](index=209&type=chunk)[215](index=215&type=chunk)[216](index=216&type=chunk)[217](index=217&type=chunk) - Risk management: Management is responsible for monitoring and assessing various risks, and implementing corresponding risk management policies and procedures[216](index=216&type=chunk)[219](index=219&type=chunk) [Foreign Exchange Exposure](index=46&type=section&id=Foreign%20Exchange%20Exposure) The Group's business is primarily denominated in HKD, USD, and RMB; with HKD pegged to USD, there is no significant USD exchange risk, and other currency risks are managed through monitoring and potential hedging - Primary trading currencies: Hong Kong Dollars, US Dollars, and Renminbi, with US Dollars being the Group's primary trading currency[209](index=209&type=chunk)[214](index=214&type=chunk) - USD risk: As the Hong Kong Dollar remains pegged to the US Dollar within a defined range, the Group is not exposed to any significant foreign exchange risk in relation to the US Dollar[209](index=209&type=chunk)[214](index=214&type=chunk) - Risk management: The Group continues to manage foreign currency risk against other currencies by closely monitoring exchange rate movements and may utilize hedging derivatives where appropriate[209](index=209&type=chunk)[214](index=214&type=chunk) [Financial Risk](index=47&type=section&id=Financial%20Risk) The Group is exposed to equity security price risk from fair value fluctuations of FVTOCI and FVTPL financial assets; the Board regularly reviews these risks and conducts impairment reviews for cash-generating units - Risk source: Exposed to equity security price risk due to fair value fluctuations of financial assets at fair value through other comprehensive income and financial assets at fair value through profit or loss[215](index=215&type=chunk)[218](index=218&type=chunk) - Asset composition: As of June 30, 2025, total assets were approximately **HK$261,476 thousand**, primarily comprising FVTOCI financial assets of **HK$1,513 thousand**, FVTPL financial assets of **HK$25,212 thousand**, goodwill of **HK$40,225 thousand**, and intangible assets of **HK$113,603 thousand**[215](index=215&type=chunk)[218](index=218&type=chunk) - Risk management: Directors regularly review equity security price risk and conduct impairment reviews for cash-generating units containing goodwill and intangible assets annually or more frequently[215](index=215&type=chunk)[218](index=218&type=chunk) [Operation Risk](index=47&type=section&id=Operation%20Risk) Each business segment faces operational risks, with management responsible for monitoring operations, assessing risks, implementing risk management policies, and reporting anomalies to the Board - Risk management responsibilities: Management of each business segment is responsible for monitoring their respective business operations and assessing operation-related risks[216](index=216&type=chunk)[219](index=219&type=chunk) - Reporting mechanism: Management is responsible for implementing the Group's risk management policies and procedures and should report any non-compliance regarding project operations to the Board for instructions[216](index=216&type=chunk)[219](index=219&type=chunk) [Credit Risk](index=47&type=section&id=Credit%20Risk) The Group primarily faces credit risk from trade and other receivables, especially in unstable economic environments; the Board monitors credit exposure, and management handles credit approval, collection, and receivable recoverability - Risk source: Primarily arises from its trade and other receivables, which amounted to approximately **HK$17,007 thousand** as of June 30, 2025[217](index=217&type=chunk)[220](index=220&type=chunk) - Increased risk: Due to socio-political uncertainties leading to an unstable economic environment, the likelihood of payment defaults is inevitably higher than anticipated[217](index=217&type=chunk)[220](index=220&type=chunk) - Risk management: Directors continue to closely monitor the overall level of credit risk faced, while management is responsible for determining credit approval and overseeing collection procedures, and reviewing the recoverability of individual trade debts[217](index=217&type=chunk)[220](index=220&type=chunk) [Treasury Policy](index=48&type=section&id=TREASURY%20POLICY) The Group maintains a prudent treasury policy with centralized activities, diversified investments, guidelines for risk and capital management, and close monitoring of liquidity to ensure sufficient funding - Policy characteristics: The Group adopts a prudent treasury policy, with centralized treasury activities and a preference for investing in a diversified product portfolio[222](index=222&type=chunk)[227](index=227&type=chunk) - Risk control: The Group has guidelines for monitoring and controlling investment risks and managing capital[222](index=222&type=chunk)[227](index=227&type=chunk) - Liquidity management: The Board closely reviews the Group's liquidity position to ensure its liquidity structure can meet its funding requirements at all times[222](index=222&type=chunk)[227](index=227&type=chunk) [Material Transaction](index=48&type=section&id=MATERIAL%20TRANSACTION) The Group did not undertake any material acquisitions or disposals during the period - No material transactions: The Group did not undertake any material acquisitions or disposals during the period[223](index=223&type=chunk)[228](index=228&type=chunk) [Employees and Remuneration Policies](index=48&type=section&id=EMPLOYEES%20AND%20REMUNERATION%20POLICIES) As of June 30, 2025, the Group employed 23 staff; its remuneration policy emphasizes equality, incentives, and performance, offering provident fund, medical insurance, and discretionary bonuses, with a share option scheme for reward and motivation - Employee count: As of June 30, 2025, the Group employed **23** staff (December 31, 2024: 23 staff)[224](index=224&type=chunk)[229](index=229&type=chunk) - Remuneration policy: The Group's remuneration policy is guided by equality, incentives, and employee performance, aiming to enhance market competitiveness while complying with Hong Kong legal requirements[224](index=224&type=chunk)[229](index=229&type=chunk) - Employee benefits: In addition to salaries, other employee benefits include provident fund contributions, medical insurance, and performance-linked discretionary bonuses[224](index=224&type=chunk)[229](index=229&type=chunk) - Incentive scheme: The Group also has a share option scheme to reward and incentivize employees[224](index=224&type=chunk)[229](index=229&type=chunk) [Contingent Liabilities](index=48&type=section&id=CONTINGENT%20LIABILITIES) As of June 30, 2025, the Group had no significant contingent liabilities - No significant contingent liabilities: As of June 30, 2025, the Group had no significant contingent liabilities (December 31, 2024: nil)[225](index=225&type=chunk)[230](index=230&type=chunk) [Capital Commitments](index=48&type=section&id=CAPITAL%20COMMITMENTS) As of June 30, 2025, total contracted but unprovided capital commitments were HK$20,457 thousand, mainly for intangible asset development costs and property, plant, and equipment acquisition | Item | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Development costs of intangible assets | 20,429 | – | | Costs of property, plant and equipment | 28 | – | | **Total** | **20,457** | **–** | [Outlook](index=49&type=section&id=OUTLOOK) For the second half of 2025, the market remains challenging with ongoing cybersecurity threats; the Group will focus on software, monitor IT trends, upgrade products, expand sales channels, and diversify business to achieve sustainable growth and shareholder returns - Market outlook: In the second half of 2025, the market environment will remain challenging, with continuous cybersecurity threats in the digital world[232](index=232&type=chunk)[235](index=235&type=chunk) - Software business: The software business is expected to remain one of the Group's primary revenue sources; the Group will closely monitor IT trends, continuously upgrade existing products, and strengthen its product portfolio[232](index=232&type=chunk)[233](index=233&type=chunk)[235](index=235&type=chunk) - Strategic direction: The Group will continue to consolidate and expand its software product sales channels and strengthen its position in the US and European markets to enhance its long-term profitability[233](index=233&type=chunk)[235](index=235&type=chunk) - Business diversification: The Group will continue to adopt a diversified development approach, timely assessing the revenue and growth prospects of each business segment and flexibly allocating resources[234](index=234&type=chunk)[235](index=235&type=chunk) [Other Information](index=50&type=section&id=OTHER%20INFORMATION) This section provides information on corporate governance and compliance, including directors' securities dealings, interests, share option scheme, substantial shareholders, new bye-laws, listed securities transactions, competing interests, corporate governance, and the audit committee [Dealings for Securities Transactions by Directors](index=50&type=section&id=DEALINGS%20FOR%20SECURITIES%20TRANSACTIONS%20BY%20DIRECTORS) The company's directors confirmed compliance with the GEM Listing Rules' required standards for directors' securities transactions during the reporting period - Compliance: All directors confirmed compliance with the standards for securities transactions as set out in Rules 5.48 to 5.67 of the GEM Listing Rules throughout the period[237](index=237&type=chunk)[240](index=240&type=chunk) [Directors' Interests in Contracts or Arrangements](index=50&type=section&id=DIRECTORS%27%20INTERESTS%20IN%20CONTRACTS%20OR%20ARRANGEMENTS) No director or associated entity held any material direct or indirect interest in significant transactions, arrangements, or contracts, or in the Group's assets, during or at the end of the reporting period - No material interests: No director or entity connected with a director had any material direct or indirect interest in any significant transaction, arrangement, or contract subsisting during or at the end of the period that was material to the Group's business[238](index=238&type=chunk)[241](index=241&type=chunk) - No asset interests: No director had any direct or indirect interest in any assets acquired, disposed of, leased, or proposed to be acquired, disposed of, or leased by any member of the Group at the end of or at any time during the period[238](index=238&type=chunk)[241](index=241&type=chunk) [Directors' and Chief Executive's Interests or Short Positions in the Shares, Underlying Shares or Debentures of the Company or Any Associated Corporations](index=50&type=section&id=DIRECTORS%27%20AND%20CHIEF%20EXECUTIVE%27S%20INTERESTS%20OR%20SHORT%20POSITIONS%20IN%20THE%20SHARES%2C%20UNDERLYING%20SHARES%20OR%20DEBENTURES%20OF%20THE%20COMPANY%20OR%20ANY%20ASSOCIATED%20CORPORATIONS) As of June 30, 2025, Executive Director and Chairman Mr. Wong Ching Chun held a 75.0% long position in the company's shares; no other directors or chief executives had disclosable interests under the SFO | Director Name | Capacity | Number of Shares Held (Thousand shares) | Approximate Percentage of Issued Share Capital | | :--- | :--- | :--- | :--- | | Mr. Wong Ching Chun | Beneficial owner | 333,336,177 | 75.0% | - Other interests: Save for Mr. Wong Ching Chun, no other directors or chief executives had interests or short positions in the shares, underlying shares, or debentures disclosable under the SFO[245](index=245&type=chunk) [Directors' and Chief Executive's Rights to Acquire Shares or Debt Securities](index=51&type=section&id=DIRECTORS%27%20AND%20CHIEF%20EXECUTIVE%27S%20RIGHTS%20TO%20ACQUIRE%20SHARES%20OR%20DEBT%20SECURITIES) Neither the company nor its subsidiaries entered into any arrangements during or at the end of the period enabling directors, chief executives, or their associates to profit from acquiring shares or debt securities - No acquisition rights arrangements: At no time during the period or at the end of the period had the company or any of its subsidiaries entered into any arrangements to enable directors and chief executives of the company, their respective spouses, or children under 18 years of age to acquire benefits by means of acquiring shares or debentures of the company or any other body corporate[244](index=244&type=chunk)[246](index=246&type=chunk) [Share Option Scheme](index=52&type=section&id=SHARE%20OPTION%20SCHEME) The company adopted a new 2024 Share Option Scheme on July 11, 2024, replacing the 2017 scheme, to incentivize and attract talent, with total shares granted not exceeding 10% of issued shares; no options were granted during the period - New and old schemes: The company adopted a new share option scheme on July 11, 2024, and terminated the 2017 share option scheme on the same date[248](index=248&type=chunk)[254](index=254&type=chunk) - 2017 scheme: Terminated on July 11, 2024, with no share options granted and no outstanding share options at termination[249](index=249&type=chunk)[250](index=250&type=chunk)[255](index=255&type=chunk)[256](index=256&type=chunk) - 2024 scheme purpose: Aims to incentivize and reward eligible participants for their contributions to the Group, and/or to recruit and retain high-caliber personnel[252](index=252&type=chunk)[257](index=257&type=chunk) - Grant limit: The total number of shares that may be issued upon exercise of all options that may be granted under the 2024 Share Option Scheme shall not exceed **10%** of the total number of shares in issue on the adoption date (i.e., 44,444,823 shares)[258](index=258&type=chunk)[261](index=261&type=chunk) - Current period status: No share options were granted during the period and as of the date of this report; as of January 1, 2025, and June 30, 2025, there were no outstanding share options under the 2024 Share Option Scheme[267](index=267&type=chunk)[270](index=270&type=chunk) [Interests Discloseable Under the SFO and Substantial Shareholders' and Other Persons' Interest in Securities](index=55&type=section&id=INTERESTS%20DISCLOSEABLE%20UNDER%20THE%20SFO%20AND%20SUBSTANTIAL%20SHAREHOLDERS%27%20AND%20OTHER%20PERSONS%27%20INTEREST%20IN%20SECURITIES) Except for the share interest of Executive Director and Chairman Mr. Wong Ching Chun, the Board was unaware of any other persons holding disclosable interests or short positions in shares or underlying shares under the SFO as of June 30, 2025 - Substantial shareholder interest: Executive Director and Chairman Mr. Wong Ching Chun holds a **75.0%** long position in the company's shares[243](index=243&type=chunk)[271](index=271&type=chunk) - Other persons' interests: Save for the directors or chief executives of the company, the Board is not aware of any other persons who had, or were deemed or taken to have, interests or short positions in the shares or underlying shares disclosable under the SFO[271](index=271&type=chunk)[275](index=275&type=chunk) [Adoption of New Bye-Laws](index=55&type=section&id=ADOPTION%20OF%20NEW%20BYE-LAWS) The company adopted the Third Amended and Restated Bye-laws via special resolution at the AGM on May 9, 2025, to replace the old ones, providing flexibility for treasury shares and updating terms to comply with latest regulations - Adoption date: The new Bye-laws were adopted by shareholders through a special resolution passed at the company's Annual General Meeting held on May 9, 2025[273](index=273&type=chunk)[276](index=276&type=chunk) - Amendment purpose: Aims to (i) provide the company with the flexibility to hold treasury shares in accordance with the Bye-laws; and (ii) make other miscellaneous and housekeeping amendments, and update certain provisions with reference to the latest applicable laws of Bermuda and the GEM Listing Rules[272](index=272&type=chunk)[276](index=276&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=55&type=section&id=PURCHASE%2C%20SALE%20OR%20REDEMPTION%20OF%20THE%20COMPANY%27S%20LISTED%20SECURITIES) Neither the company nor its subsidiaries purchased, sold, or redeemed any of the company's listed securities during the reporting period - No securities transactions: During the period, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities[274](index=274&type=chunk)[277](index=277&type=chunk) [Competing Interest](index=56&type=section&id=COMPETING%20INTEREST) Chairman and Executive Director Mr. Wong Ching Chun and Executive Director Mr. Lau Siu Cheong hold interests in companies that may compete with the Group's IT services and money lending businesses - Mr. Wong Ching Chun's competing interests: Mr. Wong Ching Chun holds interests in Alliance Group and E-Business Software Group, which are primarily engaged in IT contract and maintenance services, potentially competing with the Group's enterprise management solutions and IT contract services business[279](index=279&type=chunk)[280](index=280&type=chunk)[285](index=285&type=chunk)[286](index=286&type=chunk) - Mr. Lau Siu Cheong's competing interests: Mr. Lau Siu Cheong is a director and sole shareholder of Wealthy Asset Management Limited, which is engaged in money lending business, potentially competing with the Group's money lending business through Union Faith Finance Limited[280](index=280&type=chunk)[281](index=281&type=chunk)[287](index=287&type=chunk) - Group's money lending business: Union Faith Finance Limited is a licensed money lender in Hong Kong, but is currently inactive and has no loan portfolio[281](index=281&type=chunk)[287](index=287&type=chunk) [Corporate Governance](index=56&type=section&id=CORPORATE%20GOVERNANCE) The company complied with the code provisions set out in Part 2 of Appendix C1 to the GEM Listing Rules during the reporting period - Compliance: During the period, the company complied with the code provisions set out in Part 2 of Appendix C1 to the GEM Listing Rules[283](index=283&type=chunk)[288](index=288&type=chunk) [Audit Committee](index=56&type=section&id=AUDIT%20COMMITTEE) The Audit Committee, comprising three independent non-executive directors, reviews and oversees the Group's financial reporting, risk management, and internal control procedures, and has reviewed the unaudited condensed consolidated financial statements for the period - Composition: The Audit Committee currently comprises three independent non-executive directors, namely Mr. Cheng Hong Ki (Chairman of the Audit Committee), Mr. Chan Yung, and Ms. Wong Chi Yan[284](index=284&type=chunk)[289](index=289&type=chunk) - Responsibilities: The primary responsibilities of the Audit Committee are to review and oversee the Group's financial reporting process, risk management, and internal control procedures[284](index=284&type=chunk)[289](index=289&type=chunk) - Report review: The Audit Committee has reviewed the Group's unaudited condensed consolidated financial statements for the period[284](index=284&type=chunk)[289](index=289&type=chunk) [Sufficiency of Public Float](index=57&type=section&id=SUFFICIENCY%20OF%20PUBLIC%20FLOAT) As of the latest practicable date prior to the report's publication, the company maintained the public float required by the GEM Listing Rules - Public float: The company has maintained the public float required by the GEM Listing Rules[290](index=290&type=chunk)[293](index=293&type=chunk) [Appreciation](index=57&type=section&id=APPRECIATION) The Chairman, on behalf of the Board, extends sincere gratitude to all business partners, shareholders, and customers for their support - Acknowledgements: On behalf of the Board, I would like to express sincere gratitude to all business partners, shareholders, and customers for their support to the company[291](index=291&type=chunk)[294](index=294&type=chunk) - Board members: As of the date of this report, the Board comprises two executive directors and three independent non-executive directors[292](index=292&type=chunk)[295](index=295&type=chunk)

Financial Summary and Announcement [Financial Highlights](index=1&type=section&id=1.1%20Financial%20Highlights) During the reporting period, the company experienced significant declines in revenue and gross profit, alongside an expanded net loss Financial Highlights | Indicator | Six Months Ended June 30, 2025 (RMB thousands) | Six Months Ended June 30, 2024 (RMB thousands) | | :--- | :--- | :--- | | Revenue | 21,668 | 31,050 | | Cost of Sales | (21,022) | (29,725) | | Gross Profit | 646 | 1,325 | | Net Loss | (33,961) | (30,742) | [Interim Results Announcement](index=1&type=section&id=1.2%20Interim%20Results%20Announcement) MemeStrategy, Inc. announced its unaudited consolidated interim results for the six months ended June 30, 2025 - Company announced its unaudited consolidated interim results for the six months ended June 30, 2025[3](index=3&type=chunk) Condensed Consolidated Financial Statements [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=2&type=section&id=2.1%20Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For the six months ended June 30, 2025, revenue decreased by **30.2%** to **RMB 21,668 thousand**, gross profit fell by **51.2%**, and loss for the period expanded to **RMB 33,961 thousand** Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income | Indicator | Six Months Ended June 30, 2025 (RMB thousands) | Six Months Ended June 30, 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 21,668 | 31,050 | -30.2% | | Cost of Sales | (21,022) | (29,725) | -29.3% | | Gross Profit | 646 | 1,325 | -51.2% | | Other Income and Gains or Losses | 129 | 1,503 | -91.4% | | Selling and Distribution Expenses | (787) | (978) | -19.5% | | Administrative Expenses | (21,338) | (25,990) | -17.9% | | Finance Costs | (12,557) | (121) | +10277% | | Loss Before Tax | (33,961) | (30,742) | +10.5% | | Loss for the Period | (33,961) | (30,742) | +10.5% | | Basic and Diluted Loss Per Share (RMB cents) | (11.61) | (11.16) | +4.0% | [Condensed Consolidated Statement of Financial Position](index=4&type=section&id=2.2%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, total non-current assets increased to **RMB 20,939 thousand**, total current assets slightly decreased to **RMB 217,242 thousand**, and net assets marginally declined to **RMB 202,873 thousand** Condensed Consolidated Statement of Financial Position | Indicator | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Total Non-Current Assets | 20,939 | 16,236 | +28.9% | | Total Current Assets | 217,242 | 235,817 | -7.8% | | Total Current Liabilities | 34,765 | 46,391 | -25.1% | | Net Current Assets | 182,477 | 189,426 | -3.7% | | Net Assets | 202,873 | 205,437 | -1.2% | | Share Capital | 17,104 | 15,646 | +9.3% | | Share Premium | 160,329 | 205,017 | -21.8% | | Reserves | 29,462 | (19,248) | N/A | | Total Equity | 202,873 | 205,437 | -1.2% | Notes to the Condensed Consolidated Interim Financial Statements [Company and Group Information](index=6&type=section&id=3.1%20Company%20and%20Group%20Information) The company, incorporated in the Cayman Islands, focuses on hardware and software development in IoT, telecommunications, and innovative technologies, with HODL becoming its ultimate controlling party - Company primarily engages in hardware and software development in IoT, telecommunications, and other innovation technology-driven fields[8](index=8&type=chunk) - **HODL** became the company's direct and ultimate controlling company on January 27, 2025[9](index=9&type=chunk) [Basis of Preparation](index=6&type=section&id=3.2%20Basis%20of%20Preparation) The condensed consolidated financial statements are presented in RMB and prepared in accordance with HKAS 34 and the Listing Rules of the Stock Exchange - Financial statements are presented in **RMB** and comply with **HKAS 34** and the **Listing Rules** of the Stock Exchange[10](index=10&type=chunk) [Accounting Policies](index=6&type=section&id=3.3%20Accounting%20Policies) Financial statements are prepared on a historical cost basis, with certain equity investments and intangible assets (cryptocurrencies) measured at fair value, and new cryptocurrency accounting policies adopted this period - Financial statements are prepared on a historical cost basis, but certain assets, such as cryptocurrencies and equity investments, are measured at fair value[11](index=11&type=chunk) [Intangible Assets – Cryptocurrencies](index=6&type=section&id=3.3.1%20Intangible%20Assets%20%E2%80%93%20Cryptocurrencies) The company treats cryptocurrencies as intangible assets with indefinite useful lives, measured using the revaluation model, with fair value based on active market bid prices - Company treats held cryptocurrencies as intangible assets with indefinite useful lives, measured using the revaluation model, with fair value referencing active market bid prices[12](index=12&type=chunk) - Revaluation gains on cryptocurrencies are recognized in other comprehensive income, while impairment losses are recognized in profit or loss (or reverse revaluation reserve)[13](index=13&type=chunk) [Application of HKFRS Amendments](index=7&type=section&id=3.3.2%20Application%20of%20HKFRS%20Amendments) Amendments to HKFRS were first applied this period, but they had no significant impact on the financial position or performance - Amendments to HKFRS were first applied this period, but had no significant impact on financial position or performance[14](index=14&type=chunk) [Revenue and Segment Information](index=7&type=section&id=3.4%20Revenue%20and%20Segment%20Information) The Group operates in the technology sector, focusing on IoT, telecommunications, and innovative technologies, with revenue primarily from data transmission services and communication equipment sales in Mainland China - Group primarily operates in the technology sector, focusing on hardware and software development in IoT, telecommunications, and innovative technology fields[15](index=15&type=chunk) - Group has only one reportable operating segment, with key operating decisions monitored by the overall performance decision-maker[19](index=19&type=chunk) [Revenue Analysis](index=7&type=section&id=3.4.1%20Revenue%20Analysis) This section provides a detailed breakdown of the Group's revenue sources from customer contracts Revenue Analysis | Revenue Source | Six Months Ended June 30, 2025 (RMB thousands) | Six Months Ended June 30, 2024 (RMB thousands) | | :--- | :--- | :--- | | Revenue from Customer Contracts | 21,668 | 31,050 | [Disaggregation of Revenue Information](index=8&type=section&id=3.4.2%20Disaggregation%20of%20Revenue%20Information) Revenue is disaggregated by type of goods or services, showing contributions from IoT application data transmission and processing services and communication equipment sales Disaggregation of Revenue Information | Type of Goods or Services | Six Months Ended June 30, 2025 (RMB thousands) | Six Months Ended June 30, 2024 (RMB thousands) | | :--- | :--- | :--- | | IoT Application Data Transmission and Processing Services | 20,392 | 31,050 | | Communication Equipment Sales | 1,276 | – | | **Total Revenue from Customer Contracts** | **21,668** | **31,050** | [Geographical Information](index=8&type=section&id=3.4.3%20Geographical%20Information) The Group's revenue and non-current assets are primarily concentrated in Mainland China and Hong Kong Geographical Revenue | Region | Six Months Ended June 30, 2025 (RMB thousands) | Six Months Ended June 30, 2024 (RMB thousands) | | :--- | :--- | :--- | | Mainland China Revenue | 21,668 | 31,050 | Geographical Non-Current Assets | Non-Current Assets by Region | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Mainland China | 933 | 2,346 | | Hong Kong | 7,254 | – | | **Total** | **8,187** | **2,346** | [Major Customers Information](index=9&type=section&id=3.4.4%20Major%20Customers%20Information) This section details the revenue contributions from the Group's major customers during the reporting periods Major Customers Revenue | Major Customer | Six Months Ended June 30, 2025 (RMB thousands) | Six Months Ended June 30, 2024 (RMB thousands) | | :--- | :--- | :--- | | Customer 1 | 10,203 | N/A* | | Customer 2 | 10,189 | N/A* | | Customer 3 | N/A* | 12,849 | | Customer 4 | N/A* | 9,236 | | Customer 5 | N/A* | 4,915 | [Other Income and Gains or Losses](index=9&type=section&id=3.5%20Other%20Income%20and%20Gains%20or%20Losses) Other income and gains or losses significantly decreased to **RMB 129 thousand** in H1 2025, mainly due to reduced government grants and lower net foreign exchange gains Other Income and Gains or Losses | Item | Six Months Ended June 30, 2025 (RMB thousands) | Six Months Ended June 30, 2024 (RMB thousands) | | :--- | :--- | :--- | | Bank Interest Income | 7 | 288 | | Government Grants | 11 | 1,169 | | Net Foreign Exchange Gains | 225 | 48 | | Loss on Disposal of Property, Plant and Equipment | (113) | – | | Loss on Early Termination of Lease | (5) | – | | Others | 4 | (2) | | **Total** | **129** | **1,503** | [Loss Before Tax](index=10&type=section&id=3.6%20Loss%20Before%20Tax) Loss before tax for the six months ended June 30, 2025, was **RMB 33,961 thousand**, primarily influenced by a significant increase in finance costs and a notable decrease in research and development costs Loss Before Tax Components | Item | Six Months Ended June 30, 2025 (RMB thousands) | Six Months Ended June 30, 2024 (RMB thousands) | | :--- | :--- | :--- | | Directors' Remuneration | 7,116 | 5,946 | | Staff Welfare Expenses (excluding Directors' and Chief Executive's Remuneration) | 5,675 | 5,645 | | Cost of Inventories Sold | 1,233 | – | | Cost of Services Provided | 19,789 | 29,725 | | Depreciation of Property, Plant and Equipment | 309 | 768 | | Depreciation of Right-of-Use Assets | 560 | 485 | | Amortisation of Intangible Assets | 38 | 39 | | Research and Development Costs | 602 | 12,536 | | Net Impairment Loss on Trade Receivables under Expected Credit Loss Model | 12,550 | 6,494 | | Net Reversal of Impairment Loss on Contract Assets under Expected Credit Loss Model | – | (13) | | Net Impairment Loss on Other Receivables under Expected Credit Loss Model | 7 | – | [Income Tax Expense](index=10&type=section&id=3.7%20Income%20Tax%20Expense) The Group incurred no taxable profit during the period, resulting in no income tax provision, while certain Mainland China subsidiaries enjoy a **15%** high-tech enterprise preferential tax rate - Group generated no taxable profit in Hong Kong, thus no income tax provision was made[26](index=26&type=chunk) - Nanjing Haoying and Shenzhen Wulian, as high-tech enterprises, enjoy a preferential income tax rate of **15%**[26](index=26&type=chunk) Income Tax Expense | Income Tax Item | Six Months Ended June 30, 2025 (RMB thousands) | Six Months Ended June 30, 2024 (RMB thousands) | | :--- | :--- | :--- | | Current | – | – | | Deferred | – | – | | **Total Tax Expense for the Period** | **–** | **–** | [Dividends](index=11&type=section&id=3.8%20Dividends) No dividends were paid or proposed by the company for the six months ended June 30, 2025 - Company neither paid nor proposed dividends for the six months ended June 30, 2025[29](index=29&type=chunk) [Loss Per Share](index=11&type=section&id=3.9%20Loss%20Per%20Share) Basic and diluted loss per share for the six months ended June 30, 2025, increased to **RMB 11.61 cents** from **RMB 11.16 cents**, based on the weighted average number of ordinary shares Loss Per Share | Indicator | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 (Restated) | | :--- | :--- | :--- | | Basic and Diluted Loss Per Share (RMB cents) | (11.61) | (11.16) | | Weighted Average Number of Ordinary Shares for Basic and Diluted Loss Per Share | 292,428,051 | 275,429,904 | [Property, Plant and Equipment and Intangible Assets](index=11&type=section&id=3.10%20Property%2C%20Plant%20and%20Equipment%20and%20Intangible%20Assets) In H1 2025, the Group acquired approximately **RMB 101 thousand** in property, plant, and equipment, and cryptocurrency intangible assets for **RMB 5,003 thousand** cash, revalued to **RMB 5,516 thousand** at period-end - In H1 2025, the Group acquired property, plant, and equipment totaling approximately **RMB 101 thousand**[32](index=32&type=chunk) - Group acquired cryptocurrency intangible assets for approximately **RMB 5,003 thousand**, with a period-end revaluation of **RMB 5,516 thousand**[32](index=32&type=chunk) [Equity Investment Designated at Fair Value Through Other Comprehensive Income](index=12&type=section&id=3.11%20Equity%20Investment%20Designated%20at%20Fair%20Value%20Through%20Other%20Comprehensive%20Income) The company subscribed for approximately **2.18%** equity in Etic International Limited for **RMB 13,513 thousand**, designated at fair value through other comprehensive income due to its strategic nature - Company subscribed for approximately **2.18%** equity in Etic International Limited for **RMB 13,513 thousand**[33](index=33&type=chunk) - This equity investment is designated at fair value through other comprehensive income due to its strategic nature[33](index=33&type=chunk) [Trade Receivables](index=12&type=section&id=3.12%20Trade%20Receivables) As of June 30, 2025, net trade receivables decreased to **RMB 196,012 thousand** from **RMB 223,268 thousand** at year-end 2024, with impairment loss provisions increasing to **RMB 56,006 thousand** Trade Receivables | Indicator | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Trade Receivables | 252,018 | 294,083 | | Less: Provision for Impairment Loss | (56,006) | (70,815) | | **Net Trade Receivables** | **196,012** | **223,268** | Ageing Analysis of Trade Receivables (Net of Impairment Loss Provision) | Ageing Analysis | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Within 1 Year | 14,751 | 29,862 | | 1 to 2 Years | 100,267 | 134,784 | | 2 to 3 Years | 63,588 | 54,348 | | 3 to 4 Years | 17,138 | 4,005 | | 4 to 5 Years | 268 | 269 | | **Total** | **196,012** | **223,268** | Movement in Provision for Impairment Loss | Movement in Provision for Impairment Loss | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | At Beginning of Period | 70,815 | 42,785 | | Net Impairment Loss | 12,550 | 28,030 | | Written Off | (27,359) | – | | **At End of Period** | **56,006** | **70,815** | [Trade Payables](index=13&type=section&id=3.13%20Trade%20Payables) As of June 30, 2025, total trade payables significantly decreased to **RMB 19,242 thousand** from **RMB 34,282 thousand** at year-end 2024, with credit terms ranging from 7 to 90 days Ageing Analysis of Trade Payables | Ageing Analysis | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Within 1 Year | 11,458 | 11,522 | | 1 to 2 Years | 72 | 11,975 | | 2 to 3 Years | 5,376 | 8,453 | | Over 3 Years | 2,336 | 2,332 | | **Total** | **19,242** | **34,282** | [Loan from Controlling Shareholder](index=13&type=section&id=3.14%20Loan%20from%20Controlling%20Shareholder) As of June 30, 2025, the Group drew down approximately **RMB 12,203 thousand** in interest-free, unsecured, and repayable-on-demand shareholder loans from its controlling shareholder, HODL - Group drew down approximately **RMB 12,203 thousand** in interest-free, unsecured, and repayable-on-demand shareholder loans from controlling shareholder HODL[38](index=38&type=chunk) [Interest-Bearing Bank Borrowings](index=14&type=section&id=3.15%20Interest-Bearing%20Bank%20Borrowings) As of June 30, 2025, interest-bearing bank borrowings significantly decreased to **RMB 10 thousand**, with an effective interest rate of **2.75%** and maturity in March 2026 Interest-Bearing Bank Borrowings | Bank Borrowing | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | Effective Interest Rate | Maturity Date | | :--- | :--- | :--- | :--- | :--- | | Bank Loan – Unsecured | 10 | 3,000 | 2.75% | March 2026 (December 2025) | [Events After the Reporting Period](index=14&type=section&id=3.16%20Events%20After%20the%20Reporting%20Period) Post-reporting period, the company successfully completed a rights issue, raising approximately **HKD 154.8 million** by issuing **122,659,756** rights shares, and increased its authorized share capital to **USD 10,000,000** - Company completed a rights issue on August 7, 2025, issuing **122,659,756** rights shares and raising approximately **HKD 154.8 million**[41](index=41&type=chunk) - Company's authorized share capital increased to **USD 10,000,000** (divided into 1,000,000,000 shares of USD 0.01 par value each)[42](index=42&type=chunk) Management Discussion and Analysis [Company Overview and Strategic Transformation](index=15&type=section&id=4.1%20Company%20Overview%20and%20Strategic%20Transformation) Renamed "MemeStrategy, Inc.", the company is committed to advancing decentralized technologies, leveraging AI, blockchain, and other cutting-edge technologies to drive digital assets and Web3 projects, building on its IoT expertise - Company renamed "MemeStrategy, Inc.", committed to advancing decentralized technology, leveraging AI, blockchain, and cutting-edge technologies to drive digital assets and Web3 projects[43](index=43&type=chunk) - Company will leverage its established IoT expertise to forge new pathways for sustainable growth in the evolving digital economy[43](index=43&type=chunk) [Financial Performance Summary](index=15&type=section&id=4.2%20Financial%20Performance%20Summary) In H1 2025, the company's revenue decreased by **30.2%** to **RMB 21,668 thousand**, gross profit fell by **51.2%** to **RMB 646 thousand**, and net loss expanded to **RMB 33,961 thousand** Financial Performance Summary | Indicator | Six Months Ended June 30, 2025 (RMB thousands) | Six Months Ended June 30, 2024 (RMB thousands) | | :--- | :--- | :--- | | Revenue | 21,668 | 31,050 | | Cost of Sales | (21,022) | (29,725) | | Gross Profit | 646 | 1,325 | | Net Loss | (33,961) | (30,742) | [Financial Performance Analysis](index=15&type=section&id=4.3%20Financial%20Performance%20Analysis) Revenue declined by **30.2%** due to IoT customer project delays, gross profit fell by **51.2%**, and net loss expanded by **10.5%** to **RMB 34.0 million**, primarily impacted by increased impairment losses on trade receivables - Revenue decreased by **30.2%** to **RMB 21.7 million**, primarily due to IoT customers delaying project progress amid cash flow concerns and macroeconomic uncertainty[46](index=46&type=chunk) - Gross profit decreased by **51.2%** to **RMB 0.6 million**, and net loss expanded to **RMB 34.0 million**, mainly due to increased impairment losses on trade receivables[47](index=47&type=chunk) [Market Dynamics and Strategic Integration](index=16&type=section&id=4.4%20Market%20Dynamics%20and%20Strategic%20Integration) The IoT and telecommunications sectors face increased competition and declining demand, but the rapidly expanding global digital economy and Hong Kong's emergence as a digital asset hub create opportunities for AI and blockchain ventures - Increased competition and declining demand in the IoT and telecommunications sectors led to a contraction in company revenue[48](index=48&type=chunk) - Global digital asset market is projected to reach **USD 110.2 billion** by 2026, with Hong Kong emerging as a global digital asset hub[49](index=49&type=chunk) - Company will continue to develop existing businesses while exploring new opportunities to integrate next-generation technologies like AI and blockchain[50](index=50&type=chunk) [2025 Outlook](index=16&type=section&id=4.5%202025%20Outlook) The company is strategically transforming to focus on AI, digital assets, and Web3, complementing its IoT expertise by investing in AI, blockchain, and culture to bridge traditional finance with the new economy, with sufficient funding from a successful rights issue - Company is strategically transforming, focusing on AI, digital assets, and Web3 to complement IoT expertise, connecting traditional finance with the new economy through investments in AI, blockchain, and culture[51](index=51&type=chunk) - Following the successful completion of the rights issue, the company has ample funds to implement its strategic initiatives[51](index=51&type=chunk) [Group's Three Business Pillars](index=17&type=section&id=4.6%20Group%27s%20Three%20Business%20Pillars) The Group will develop AI and blockchain solutions based on existing IoT expertise, drive digital transformation in IP and cultural industries, and strategically allocate digital assets, focusing on cryptocurrencies like Solana - Group will provide AI and blockchain-related solutions to enhance transparency, strengthen security, and reduce fraudulent activities[53](index=53&type=chunk) - Group plans to collaborate with traditional industry companies and intellectual property owners to promote digital and cultural transformation[54](index=54&type=chunk) - Group's asset allocation strategy will focus on cryptocurrencies and other high-growth digital assets, having acquired **4,880 units of Solana (SOL)**[55](index=55&type=chunk) [AI and Blockchain Development Based on Existing IoT Solutions](index=17&type=section&id=4.6.1%20AI%20and%20Blockchain%20Development%20Based%20on%20Existing%20IoT%20Solutions) The Group aims to integrate AI and blockchain into existing technologies through internal R&D to provide value-added services for IoT clients and explore new industry opportunities - Group will integrate AI and blockchain into existing technologies through internal R&D, driving digital and cultural transformation across various business areas[53](index=53&type=chunk) - This initiative aims to provide value-added services for IoT clients and explore new industry and market opportunities[53](index=53&type=chunk) [Digital Transformation of Intellectual Property and Cultural Industries](index=17&type=section&id=4.6.2%20Digital%20Transformation%20of%20Intellectual%20Property%20and%20Cultural%20Industries) The Group plans to collaborate with traditional industry companies and IP owners to facilitate digital and cultural transformation through various strategies, potentially expanding into new markets via joint ventures or equity investments - Group plans to collaborate with traditional industry companies and intellectual property owners to promote digital and cultural transformation through various means, such as co-branding and strategic partnerships[54](index=54&type=chunk) - Group may expand into new markets through joint ventures or equity investments, leveraging its technology and digital innovation capabilities[54](index=54&type=chunk) [Digital Asset Allocation Strategy](index=17&type=section&id=4.6.3%20Digital%20Asset%20Allocation%20Strategy) The Group has acquired **4,880 units of Solana (SOL)** using internal funds, incorporating it into long-term asset planning due to Solana's scalability, low-cost transactions, and active community supporting DeFi, tokenized real-world assets, and AI-driven Web3 applications - Group has used internal funds to purchase **4,880 units of Solana (SOL)**, incorporating it into long-term asset planning[55](index=55&type=chunk) - Solana is considered one of the most scalable and cost-effective networks due to its high speed, low-cost transactions, and active community, supporting DeFi platforms, tokenized real-world assets, and AI-driven Web3 applications[55](index=55&type=chunk) [Business Performance](index=18&type=section&id=4.7%20Business%20Performance) Despite intense competition, the Group is poised to capitalize on the significant growth potential of China's IoT market, particularly 5G IoT, leveraging its industry experience and comprehensive solutions, though data transmission revenue declined while communication equipment sales grew - China's IoT market has significant growth potential, with an estimated CAGR of approximately **13.3%** from 2021-2026, and the 5G IoT market CAGR at approximately **62.2%**[58](index=58&type=chunk) - As an IoT solution provider focused on network connectivity and platform layers, the Group possesses advantages such as industry experience, market knowledge, and one-stop solutions[60](index=60&type=chunk) [Industry and Group Strengths](index=18&type=section&id=4.7.1%20Industry%20and%20Group%20Strengths) Despite intense competition in China's fragmented IoT market, the Group is well-positioned to meet growing demand with its extensive industry experience, market knowledge, and comprehensive solutions - China's IoT market is highly competitive and fragmented, but the Group is well-positioned to capture growth demand with its years of industry experience, market knowledge, and one-stop solutions[60](index=60&type=chunk) [Data Transmission and Processing Services](index=19&type=section&id=4.7.2%20Data%20Transmission%20and%20Processing%20Services) Revenue from data transmission and processing services declined due to unfavorable market conditions in China, as customers prioritized non-5G network establishment Data Transmission and Processing Services Revenue | Service Type | Six Months Ended June 30, 2025 (RMB thousands) | Six Months Ended June 30, 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Non-5G Network Services Revenue | 20,392 | 31,050 | -34.3% | | IoT Application Data Transmission and Processing Services | 20,392 | 31,050 | -34.3% | - Revenue decline primarily due to unfavorable overall market conditions in China, with customers tending to establish non-5G networks first[62](index=62&type=chunk) [Communication Equipment Sales](index=20&type=section&id=4.7.3%20Communication%20Equipment%20Sales) The Group offers a range of 5G and other communication equipment, with sales showing growth during the period Communication Equipment Sales | Equipment Type | Six Months Ended June 30, 2025 (RMB thousands) | Six Months Ended June 30, 2024 (RMB thousands) | | :--- | :--- | :--- | | 5G Communication Equipment Sales | 1,276 | – | - Group provides 5G communication equipment (including 5G distributed radio frequency remote units, various 5G antennas, and 5G communication modules) and other communication equipment[63](index=63&type=chunk) [Financial Review](index=20&type=section&id=4.8%20Financial%20Review) The Group's revenue decreased by **30.2%**, gross profit margin fell to **3.0%** due to increased market competition, and net loss expanded by **10.5%**; cash and cash equivalents increased from option exercises, while the Group invested in Solana cryptocurrency and received a controlling shareholder loan, leading to a slight increase in the gearing ratio - Group's revenue decreased by **30.2%**, gross profit margin fell to **3.0%**, and net loss expanded by **10.5%**[71](index=71&type=chunk) - Cash and cash equivalents increased to **RMB 15.4 million**, primarily due to cash inflow from the exercise of share options[72](index=72&type=chunk) - Group invested in **Solana** cryptocurrency and received a **RMB 12.2 million** loan from the controlling shareholder[73](index=73&type=chunk)[76](index=76&type=chunk) [Revenue](index=20&type=section&id=4.8.1%20Revenue) Total revenue declined by **30.2%**, primarily due to project delays by IoT customers driven by cash flow concerns and macroeconomic uncertainties Revenue Breakdown | Revenue Source | Six Months Ended June 30, 2025 (RMB thousands) | Six Months Ended June 30, 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Total Revenue | 21,668 | 31,050 | -30.2% | | Data Transmission and Processing Services | 20,392 | 31,050 | -34.3% | | Equipment Sales | 1,276 | – | N/A | | 5G Business | 1,276 | – | N/A | | Non-5G Business | 20,392 | 31,050 | -34.3% | | Mainland China Market Revenue | 21,668 | 31,050 | -30.2% | - Revenue decline primarily due to IoT industry customers delaying projects amid cash flow concerns and macroeconomic uncertainty[65](index=65&type=chunk) [Costs and Expenses](index=21&type=section&id=4.8.2%20Costs%20and%20Expenses) Sales costs decreased, administrative expenses declined due to reduced R&D, but were partially offset by higher staff costs and professional fees, while impairment losses on financial assets increased significantly Costs and Expenses | Cost and Expense Item | Six Months Ended June 30, 2025 (RMB thousands) | Six Months Ended June 30, 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Cost of Sales | 21,022 | 29,725 | -29.3% | | Material Costs | 19,789 | 29,624 | -33.2% | | Outsourcing Expenses | 1,233 | – | N/A | | Administrative Expenses | 21,338 | 25,990 | -17.9% | | Research and Development Expenses | 602 | 12,536 | -95.2% | | Staff Costs (Administrative) | 11,469 | 8,609 | +33.2% | | Professional Fees (Administrative) | 4,139 | 1,192 | +247.2% | | Selling and Distribution Expenses | 787 | 978 | -19.5% | | Impairment Loss on Financial Assets | 12,557 | 6,481 | +93.7% | - Significant reduction in R&D expenses was the main reason for the decrease in administrative expenses, partially offset by increased staff costs (due to higher severance payments) and professional fees[68](index=68&type=chunk) - Impairment losses on financial assets increased, mainly due to an approximately **38.2%** increase in trade receivables aged over two years[69](index=69&type=chunk) [Gross Profit, Loss Before Tax and Net Loss](index=22&type=section&id=4.8.3%20Gross%20Profit%2C%20Loss%20Before%20Tax%20and%20Net%20Loss) Gross profit decreased by **51.2%**, with gross profit margin falling to **3.0%** due to increased market competition, and both loss before tax and net loss expanded by **10.5%** Profitability Metrics | Indicator | Six Months Ended June 30, 2025 (RMB thousands) | Six Months Ended June 30, 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Gross Profit | 646 | 1,325 | -51.2% | | Gross Profit Margin | 3.0% | 4.3% | -1.3pp | | Loss Before Tax | (33,961) | (30,742) | +10.5% | | Net Loss | (33,961) | (30,742) | +10.5% | - Gross profit margin decreased primarily due to intensified market competition[71](index=71&type=chunk) [Cash and Cash Equivalents](index=22&type=section&id=4.8.4%20Cash%20and%20Cash%20Equivalents) Cash and cash equivalents increased to **RMB 15.4 million**, primarily driven by cash inflows of approximately **RMB 29.6 million** from the exercise of share options - Cash and cash equivalents increased to **RMB 15.4 million**, primarily due to cash inflow of approximately **RMB 29.6 million** from the exercise of share options[72](index=72&type=chunk) [Intangible Assets – Investment in Cryptocurrencies](index=23&type=section&id=4.8.5%20Intangible%20Assets%20%E2%80%93%20Investment%20in%20Cryptocurrencies) The Group acquired **4,880 units of Solana (SOL)** at a total cost of approximately **RMB 5.0 million**, with a period-end fair value of approximately **RMB 5.5 million**, aiming to engage with its ecosystem, generate validation revenue, and diversify assets - Group acquired **4,880 units of Solana (SOL)** at a total cost of approximately **RMB 5.0 million**, with a period-end fair value of approximately **RMB 5.5 million**[73](index=73&type=chunk) - Investment in SOL aims to gain exposure to the rapidly expanding ecosystem, generate revenue through network validation, and diversify inventory assets[74](index=74&type=chunk) [Borrowings](index=23&type=section&id=4.8.6%20Borrowings) Interest-bearing bank borrowings decreased to **RMB 10 thousand**, with **RMB 9.99 million** of the total **RMB 10.0 million** authorized credit facilities remaining undrawn - Interest-bearing bank borrowings decreased to **RMB 10 thousand**, with **RMB 9.99 million** of the total **RMB 10.0 million** authorized credit facilities remaining undrawn[75](index=75&type=chunk) [Loan from Controlling Shareholder](index=23&type=section&id=4.8.7%20Loan%20from%20Controlling%20Shareholder) As of June 30, 2025, the Group had an unsecured, interest-free loan of **RMB 12.2 million** from its controlling shareholder, with no fixed repayment terms - As of June 30, 2025, the loan from the controlling shareholder was **RMB 12.2 million**, unsecured, interest-free, and without a fixed repayment period[76](index=76&type=chunk) [Gearing Ratio](index=23&type=section&id=4.8.8%20Gearing%20Ratio) The gearing ratio slightly increased to approximately **6.8%** (from **1.9%** at year-end 2024), primarily due to the increase in the loan from the controlling shareholder - Gearing ratio slightly increased to approximately **6.8%** (year-end 2024: **1.9%**), primarily due to the increase in the loan from the controlling shareholder[77](index=77&type=chunk) [Rights Issue](index=24&type=section&id=4.9%20Rights%20Issue) The company proposed a rights issue of up to **122,659,756** rights shares at **HKD 1.262** per share on a two-for-one basis, aiming to raise up to approximately **HKD 154.8 million**, which was oversubscribed by **964.53%**, yielding net proceeds of approximately **HKD 152.96 million** for long-term growth - Company proposed a rights issue, on a basis of one rights share for every two existing shares, at a subscription price of **HKD 1.262** per rights share, to issue up to **122,659,756** rights shares and raise up to approximately **HKD 154.8 million**[78](index=78&type=chunk) - Rights issue was oversubscribed by **964.53%**, with net proceeds of approximately **HKD 152.96 million** to be used for long-term growth[79](index=79&type=chunk)[80](index=80&type=chunk) [Capital Structure](index=25&type=section&id=4.10%20Capital%20Structure) As of June 30, 2025, the company had issued share capital of approximately **USD 2,453 thousand**, comprising **245,319,513** ordinary shares, and subsequently completed a rights issue and increased its authorized share capital to **USD 10,000,000** - As of June 30, 2025, the company's issued share capital was approximately **USD 2,453 thousand**, with **245,319,513** ordinary shares issued[81](index=81&type=chunk) - Post-reporting period, the company completed a rights issue and increased its authorized share capital to **USD 10,000,000**[81](index=81&type=chunk)[82](index=82&type=chunk) [Capital Expenditure](index=25&type=section&id=4.11%20Capital%20Expenditure) Capital expenditure increased to approximately **RMB 0.1 million** in H1 2025 from zero in the prior period, primarily for the purchase of property, plant, and equipment and renovation expenses - Capital expenditure increased to approximately **RMB 0.1 million**, primarily for the purchase of property, plant, and equipment and renovation[83](index=83&type=chunk) [Pledge of Assets](index=25&type=section&id=4.12%20Pledge%20of%20Assets) As of June 30, 2025, the Group had no pledged assets or rights - As of June 30, 2025, the Group had no pledged assets or rights[84](index=84&type=chunk) [Contingent Liabilities](index=25&type=section&id=4.13%20Contingent%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[85](index=85&type=chunk) [Foreign Currency Risk](index=25&type=section&id=4.14%20Foreign%20Currency%20Risk) The Group is exposed to foreign currency risk from transactional currency and RMB exchange rate fluctuations against foreign currencies, but these risks were not hedged as of June 30, 2025 - Group faces foreign currency risk from transactional currencies and RMB exchange rate fluctuations against foreign currencies, but these risks were not hedged[86](index=86&type=chunk) [Employees and Remuneration Policy](index=26&type=section&id=4.15%20Employees%20and%20Remuneration%20Policy) As of June 30, 2025, the Group had **33** employees, with staff costs increasing by **10.4%** to **RMB 12.8 million**, and is committed to attracting, retaining, and motivating talent through competitive remuneration and training - As of June 30, 2025, the Group had **33** employees, with staff costs increasing by **10.4%** to **RMB 12.8 million**[87](index=87&type=chunk) - Group attracts, retains, and motivates talent through competitive remuneration, training, and performance evaluations[88](index=88&type=chunk) [Significant Investments, Acquisitions and Disposals](index=26&type=section&id=4.16%20Significant%20Investments%2C%20Acquisitions%20and%20Disposals) The company holds a significant strategic investment in Etic International Limited (ETIC), subscribing for approximately **2.17695%** equity for **RMB 13,513 thousand**, with a fair value of approximately **RMB 12.6 million** at period-end, and no other significant investments, acquisitions, or disposals occurred during the reporting period - Company holds a significant investment in **ETIC**, subscribing for approximately **2.17695%** equity for **RMB 13,513 thousand**[89](index=89&type=chunk) - As of June 30, 2025, the fair value of the **ETIC** equity investment was approximately **RMB 12.6 million**, representing approximately **6.2%** of the Group's net assets[90](index=90&type=chunk) - No other significant investments, acquisitions, or disposals occurred during the reporting period, with the business model strategically shifting towards integrating AI, digital assets, and Web3[91](index=91&type=chunk) [Events After Reporting Period](index=27&type=section&id=4.17%20Events%20After%20Reporting%20Period) No other significant events affecting the Group occurred after the reporting period up to the announcement date, apart from the disclosed rights issue, increase in authorized share capital, and strategic shift in business model - No other significant events occurred after the reporting period up to the announcement date, apart from the disclosed rights issue, increase in authorized share capital, and strategic shift in business model[92](index=92&type=chunk) Other Information and Corporate Governance [Purchase, Sale or Redemption of Listed Securities](index=27&type=section&id=5.1%20Purchase%2C%20Sale%20or%20Redemption%20of%20Listed%20Securities) Neither the company nor its subsidiaries purchased, sold, or redeemed any of the company's listed securities during the reporting period - Neither the company nor its subsidiaries purchased, sold, or redeemed any of the company's listed securities during the reporting period[93](index=93&type=chunk) [Interim Dividend](index=27&type=section&id=5.2%20Interim%20Dividend) The Board of Directors resolved not to declare any interim dividend for the six months ended June 30, 2025 - Board of Directors resolved not to declare any interim dividend for the six months ended June 30, 2025[94](index=94&type=chunk) [Compliance with the Model Code for Securities Transactions](index=27&type=section&id=5.3%20Compliance%20with%20the%20Model%20Code%20for%20Securities%20Transactions) The company adopted the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix C3 of the Listing Rules and confirmed compliance by all directors during the reporting period - Company adopted the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix C3 of the Listing Rules and confirmed compliance by all directors[95](index=95&type=chunk) [Corporate Governance Practices](index=27&type=section&id=5.4%20Corporate%20Governance%20Practices) The company strives to maintain good corporate governance practices, though the roles of Chairman and Chief Executive Officer are combined under Mr. Chan Chin Ching, a deviation from Code Provision C.2.1, which the Board believes ensures unified leadership and efficient decision-making - Company strives to maintain good corporate governance practices, but the roles of Chairman and Chief Executive Officer are combined under Mr. Chan Chin Ching, deviating from Code Provision C.2.1[97](index=97&type=chunk) - Board believes this combined arrangement ensures unified leadership and efficient decision-making, and will review it periodically[97](index=97&type=chunk) [Audit Committee](index=28&type=section&id=5.5%20Audit%20Committee) The Audit Committee reviewed the Group's unaudited interim results for the six months ended June 30, 2025, confirming compliance with all applicable accounting principles, standards, and requirements - Audit Committee reviewed the interim results and confirmed compliance with all applicable accounting principles, standards, and requirements[99](index=99&type=chunk) [Auditor](index=28&type=section&id=5.6%20Auditor) The company's interim financial statements were reviewed by Deloitte Touche Tohmatsu, an independent auditor, in accordance with Hong Kong Standard on Review Engagements 2410 - Interim financial statements were reviewed by independent auditor Deloitte Touche Tohmatsu[100](index=100&type=chunk) [Publication of 2025 Interim Results and Interim Report](index=28&type=section&id=5.7%20Publication%20of%202025%20Interim%20Results%20and%20Interim%20Report) This announcement has been published on the HKEXnews website and the company's website, with the interim report to be published and dispatched to shareholders in due course - This announcement has been published on the HKEXnews website and the company's website, with the interim report to be published and dispatched to shareholders in due course[101](index=101&type=chunk) Definitions [Definitions](index=29&type=section&id=6.1%20Definitions) This section provides definitions for key terms and abbreviations used throughout the report to ensure consistent understanding - This section provides definitions for key terms and abbreviations used in the report, such as "5G", "IoT", and "RMB"[102](index=102&type=chunk)[105](index=105&type=chunk) By Order of the Board [By Order of the Board](index=30&type=section&id=7.1%20By%20Order%20of%20the%20Board) This section lists the Board of Directors and is signed by Mr. Chan Chin Ching, Chairman and Executive Director, on behalf of the Board - Board of Directors includes Executive Directors Mr. Chan Chin Ching, Mr. Chan Chin Chun, Mr. Kwong Tak Ching, and Mr. Li Ming Hong; and Independent Non-executive Directors Mr. Ng Pui Sum, Ms. Pang Ching, and Mr. Siu Chi Wai[104](index=104&type=chunk)

[Performance Highlights](index=1&type=section&id=業績摘要) The Group delivered approximately 12,000 residential units and achieved a profit attributable to owners of RMB 10.202 billion, primarily due to non-cash gains from offshore debt restructuring - The Group continued to ensure delivery, completing approximately **12,000 residential units** during the period[2](index=2&type=chunk) - Profit attributable to owners of the Company was **RMB 10.202 billion**, compared to a loss of RMB 5.382 billion in the same period last year, mainly due to non-cash gains from completing offshore debt restructuring[2](index=2&type=chunk) - Offshore debt restructuring was completed during the period, with total loans decreasing to **RMB 66.997 billion** and total equity increasing to **RMB 8.227 billion**[2](index=2&type=chunk) 2025 H1 Performance Highlights | Indicator | Amount (RMB) | YoY Change | Remarks | | :--- | :--- | :--- | :--- | | Contracted Sales | 13.370 billion yuan | down 27% | | | Revenue | 6.203 billion yuan | down 53% | Asset-light business revenue share increased to 45% | | Gross Loss | 4.966 billion yuan | - | | | Profit Attributable to Owners of the Company | 10.202 billion yuan | turned loss into profit | Mainly from non-cash gains of offshore debt restructuring | | Total Loans | 66.997 billion yuan | decreased | Offshore debt restructuring completed | | Total Equity | 8.227 billion yuan | increased | Offshore debt restructuring completed | [2025 Interim Results](index=2&type=section&id=2025年中期業績) The Group's H1 2025 revenue decreased by 53% to RMB 6.203 billion due to market adjustments, while profit attributable to owners turned positive at RMB 10.202 billion - Affected by the continuous adjustment in the domestic real estate market, the Group's H1 2025 revenue was **RMB 6.203 billion**, a **53% year-on-year decrease**[4](index=4&type=chunk) - Profit attributable to owners of the Company was **RMB 10.202 billion**, with basic and diluted earnings per share of **RMB 1.171** and **RMB 0.919**, respectively[4](index=4&type=chunk) 2025 H1 Key Financial Data | Indicator | 2025 H1 (RMB) | 2024 H1 (RMB) | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | 6.203 billion yuan | 13.313 billion yuan | down 53% | | Gross Loss/(Profit) | 4.966 billion yuan (loss) | 0.297 billion yuan (profit) | turned to loss | | Profit/(Loss) Attributable to Owners of the Company | 10.202 billion yuan (profit) | 5.382 billion yuan (loss) | turned loss into profit | | Basic Earnings/(Loss) Per Share | 1.171 yuan | -0.707 yuan | turned loss into profit | | Diluted Earnings/(Loss) Per Share | 0.919 yuan | -0.707 yuan | turned loss into profit | [Market Review and Outlook](index=2&type=section&id=市場回顧及展望) China's real estate market remained in deep adjustment in H1 2025, with sales declining, and the second half is expected to continue market risk resolution and focus on asset-light business opportunities - In H1 2025, China's real estate market was in a deep adjustment phase, with homebuyer demand needing a boost, industry growth momentum facing challenges, and overall operations remaining at a low level[5](index=5&type=chunk) - National commercial property sales amounted to approximately **RMB 4.4 trillion**, a **5.5% year-on-year decrease**, and a **52% decrease** compared to the same period in 2021[5](index=5&type=chunk) - Looking ahead to H2, the market is expected to take time to turn around, with industry risks in the process of being cleared[6](index=6&type=chunk) - The industry will fully enter a new stage of improving quality and efficiency of existing assets, with business opportunities emerging in commercial and asset management, elderly care services, property services, urban renewal, and disposal of existing assets[6](index=6&type=chunk) [Financial Review](index=3&type=section&id=財務回顧) A comprehensive review of the Group's financial performance, including revenue composition, costs, other income/losses, expenses, and liquidity, highlighting the impact of market adjustments and debt restructuring [Analysis of Revenue Components](index=3&type=section&id=營業額的組成部分分析) The Group's H1 2025 revenue decreased by approximately 53% to RMB 6.203 billion, with property development remaining the largest contributor at 53% and asset-light businesses increasing to 45% 2025 H1 Revenue Composition | Business Segment | 2025 (RMB million) | 2024 (RMB million) | Change | | :--- | :--- | :--- | :--- | | Property Development | 3,296 | 10,300 | -68% | | Property Investment | 144 | 181 | -20% | | Property Management and Related Services | 1,348 | 1,361 | -1% | | Other Real Estate Related Businesses | 1,415 | 1,471 | -4% | | Total | 6,203 | 13,313 | -53% | - Property development revenue accounted for approximately **53% of total revenue**, mainly from Beijing (**29%**), Central China (**22%**), Southern China (**20%**), and Bohai Rim (**18%**) regions[7](index=7&type=chunk) - Property management and related services cover property management services, community value-added services, and non-owner value-added services[8](index=8&type=chunk) - Other real estate related businesses include full industry chain services for construction, data real estate, and elderly care services[9](index=9&type=chunk) [Cost of Sales and Gross Loss](index=3&type=section&id=銷售成本與毛虧) The Group's H1 2025 total cost of sales decreased, but a gross loss of RMB 4.966 billion was recorded, with a gross loss margin of approximately 80%, mainly due to market adjustments and increased inventory impairment Cost of Sales and Gross Loss | Indicator | 2025 H1 (RMB) | 2024 H1 (RMB) | YoY Change | | :--- | :--- | :--- | :--- | | Total Cost of Sales | 11.169 billion yuan | 13.016 billion yuan | down 14.2% | | Average Land Cost for Property Development (excluding parking spaces) | 6,300 yuan/square meter | 8,400 yuan/square meter | down 25% | | Average Construction Cost for Property Development (excluding parking spaces) | 5,700 yuan/square meter | 5,800 yuan/square meter | largely flat | | Gross Loss/(Profit) | 4.966 billion yuan (loss) | 0.297 billion yuan (profit) | turned to loss | | Gross Loss Margin/(Gross Profit Margin) | 80% (loss) | 2% (profit) | turned to loss | - The decrease in average land cost for property development was mainly due to fewer projects in first-tier and core second-tier cities being recognized in H1 2025[9](index=9&type=chunk) - The gross loss was mainly due to the continuous adjustment in the domestic real estate market, leading to no significant recovery in industry gross profit margins and increased impairment provisions for inventories[11](index=11&type=chunk) [Other Income and Losses](index=4&type=section&id=其他收入與虧損) Interest and other income increased by 27% to RMB 448 million, while other losses (net) significantly rose to RMB 3.326 billion, driven by fair value losses on financial assets/liabilities, litigation provisions, and goodwill impairment Other Income and Losses | Indicator | 2025 H1 (RMB) | 2024 H1 (RMB) | YoY Change | | :--- | :--- | :--- | :--- | | Interest and Other Income | 0.448 billion yuan | 0.353 billion yuan | up 27% | | Other Losses (Net) | 3.326 billion yuan | 0.479 billion yuan | significantly increased | | Offshore Debt Restructuring Gain | 31.756 billion yuan | N/A | newly added | | Decrease in Fair Value of Investment Properties | 0.644 billion yuan | 0.293 billion yuan | increased 120% | - Other losses (net) primarily included fair value losses on financial assets and liabilities at fair value through profit or loss, litigation provisions, and goodwill impairment losses[12](index=12&type=chunk) - An offshore debt restructuring gain of **RMB 31.756 billion** was recorded, which was a one-off non-cash gain[12](index=12&type=chunk) [Expenses and Impairment](index=4&type=section&id=費用與減值) H1 2025 sales and marketing expenses increased to RMB 361 million, while administrative expenses slightly decreased but rose as a percentage of revenue; impairment losses under ECL model significantly increased to RMB 9.725 billion due to market adjustments Expenses and Impairment | Indicator | 2025 H1 (RMB) | 2024 H1 (RMB) | YoY Change | | :--- | :--- | :--- | :--- | | Selling and Marketing Expenses | 0.361 billion yuan | 0.282 billion yuan | increased 27.9% | | Proportion of Contracted Sales | 2.7% | 1.5% | up | | Administrative Expenses | 0.632 billion yuan | 0.658 billion yuan | down 4% | | Proportion of Total Revenue | 10.2% | 4.9% | up | | Net Impairment Losses under Expected Credit Loss Model | 9.725 billion yuan | 0.297 billion yuan | significantly increased | | Corporate Income Tax and Deferred Income Tax | 0.162 billion yuan (credit) | 0.216 billion yuan (expense) | turned to credit | | Land Appreciation Tax | 0.081 billion yuan | -0.646 billion yuan (credit) | turned to expense | - The increase in selling and marketing expenses was mainly due to the increase in new project launches in first-tier cities during the period[13](index=13&type=chunk) - The tax credit recorded was mainly due to a combination of factors such as decreased revenue and gross loss during the reporting period[16](index=16&type=chunk) [Finance Costs and Profitability](index=5&type=section&id=財務費用與盈利) H1 2025 weighted average interest rate increased to 5.84%, while total interest expenses slightly decreased; profit attributable to owners was RMB 10.202 billion, primarily driven by non-cash gains from offshore debt restructuring Finance Costs and Profitability | Indicator | 2025 H1 (RMB) | 2024 H1 (RMB) | YoY Change | | :--- | :--- | :--- | :--- | | Weighted Average Interest Rate | 5.84% | 5.60% | up | | Total Interest Paid or Accrued | 2.765 billion yuan | 2.813 billion yuan | down 1.7% | | Interest Not Capitalized and Expensed | 2.065 billion yuan | 1.948 billion yuan | up 6% | | Profit/(Loss) Attributable to Owners of the Company | 10.202 billion yuan (profit) | 5.382 billion yuan (loss) | turned loss into profit | - Excluding the one-off offshore debt restructuring gain, the Group would have recorded a loss attributable to owners of the Company during the period[17](index=17&type=chunk) [Liquidity and Debt Structure](index=5&type=section&id=流動性與債務結構) As of June 30, 2025, the Group's total cash resources were RMB 5.831 billion, with a current ratio of 0.93 and a net gearing ratio of approximately 743%; total loans decreased to RMB 66.997 billion due to offshore debt restructuring Liquidity and Debt Structure | Indicator | June 30, 2025 (RMB) | December 31, 2024 (RMB) | Change | | :--- | :--- | :--- | :--- | | Total Cash Resources | 5.831 billion yuan | - | - | | Current Ratio | 0.93 | - | - | | Net Gearing Ratio | approx. 743% | - | - | | Total Loans | 66.997 billion yuan | 98.373 billion yuan | down 31.9% | | Loans Due Within 1 Year | 41.676 billion yuan (62%) | 65.935 billion yuan (67%) | decreased | | Total Pledged Assets as % of Total Assets | approx. 45% | 40% | up | | Total Mortgage Loan Guarantees | 11.711 billion yuan | 12.716 billion yuan | down 7.9% | - Approximately **98% of cash resources** were in RMB, with the remainder mainly in USD and HKD[18](index=18&type=chunk) - Approximately **68% of loans** were fixed-rate, and approximately **85% of loans** were in RMB[19](index=19&type=chunk)[20](index=20&type=chunk) - The Group bears net currency risk from exchange rate fluctuations, prudently uses non-RMB currency loans, and will continue to monitor exchange rate movements[20](index=20&type=chunk) [Business Review](index=7&type=section&id=業務回顧) A review of the Group's core business segments, including property development and investment properties, highlighting operational performance, sales, land bank, and strategic initiatives [Property Development](index=7&type=section&id=物業開發) H1 2025 property development revenue decreased by approximately 68% to RMB 3.296 billion, with contracted sales down 27% to RMB 13.370 billion, while average selling price increased due to more first-tier city project launches Key Property Development Data | Indicator | 2025 H1 | 2024 H1 | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | 3.296 billion yuan | 10.300 billion yuan | down 68% | | Deliverable Saleable GFA | 340,000 square meters | 755,000 square meters | down 55% | | Average Recognized Sales Price (excluding parking spaces) | 11,000 yuan/square meter | 15,000 yuan/square meter | down 26.7% | | Contracted Sales | 13.370 billion yuan | 18.330 billion yuan | down 27% | | Saleable GFA | 849,000 square meters | 1,514,100 square meters | down 44% | | Average Selling Price (excluding parking spaces) | 18,900 yuan/square meter | 13,400 yuan/square meter | up 41% | | Total Land Bank (as of June 30, 2025) | 27,232,000 square meters | 31,072,000 square meters (as of Dec 31, 2024) | down 12.4% | | Attributable Portion of Land Bank (as of June 30, 2025) | 14,592,000 square meters | 16,464,000 square meters (as of Dec 31, 2024) | down 11.4% | | Average Land Cost of Land Bank (as of June 30, 2025) | 6,400 yuan/square meter | 6,200 yuan/square meter (as of Dec 31, 2024) | up 3.2% | - The decrease in average recognized sales price was mainly due to fewer projects in first-tier and core second-tier cities being recognized in 2025[23](index=23&type=chunk) - The increase in average selling price was mainly due to more first-tier city projects launched in H1 2025[26](index=26&type=chunk) - In H1 2025, there were approximately **130 saleable projects**, with contracted sales from first- and second-tier cities accounting for approximately **94%** of the total[26](index=26&type=chunk) - In H1 2025, the Group and its joint ventures and associates did not acquire any new land[30](index=30&type=chunk) [Investment Properties](index=18&type=section&id=投資物業) H1 2025 property investment revenue decreased by approximately 20% to RMB 144 million; the Group holds over 23 operating investment properties and continues to pursue an asset-light strategy to enhance cash recovery Investment Property Revenue | Indicator | 2025 H1 (RMB) | 2024 H1 (RMB) | YoY Change | | :--- | :--- | :--- | :--- | | Property Investment Revenue | 0.144 billion yuan | 0.181 billion yuan | decreased 20% | - As of June 30, 2025, the Group and its joint ventures and associates collectively held over **23 operating investment properties**[37](index=37&type=chunk) - Wuhan Sino-Ocean Li officially opened in April 2025; the Group will continue to advance its asset-light strategy for investment properties to strengthen cash recovery[37](index=37&type=chunk) [Employees and Human Resources](index=19&type=section&id=僱員及人力資源) The total number of employees decreased to 12,218, mainly due to the Group's continuous streamlining of its core development business and related operations, while maintaining a performance-oriented compensation and incentive mechanism Changes in Employee Numbers | Indicator | June 30, 2025 | December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Total Employees | 12,218 people | 12,586 people | decreased by 368 people | - The decrease in employee numbers was mainly due to the Group's continuous streamlining of personnel in its core development business and related operations[39](index=39&type=chunk) - The Group adheres to a performance-oriented compensation philosophy and incentive mechanism, focusing limited resources on frontline teams and key performance contributors who ensure property delivery, mitigate risks, and enhance revenue[40](index=40&type=chunk) [Completion of Overall Debt Management for Relevant Offshore Debts](index=19&type=section&id=完成相關境外債務之整體債務管理) The offshore debt restructuring became effective on March 27, 2025, involving the release and discharge of approximately USD 6.315 billion in debt, significantly reducing leverage and alleviating offshore liquidity pressure - The offshore debt restructuring became effective on **March 27, 2025**, involving the release and discharge of approximately **USD 6.315 billion** of in-scope debt[42](index=42&type=chunk) - The consideration included new debt (new loans and new notes) with a principal amount of **USD 2.2 billion** and mandatory convertible bonds and/or new perpetual securities totaling approximately **USD 4.115 billion**[42](index=42&type=chunk) - Following the successful implementation of the offshore debt restructuring, the Group's leverage was reduced by approximately **USD 4 billion**, its asset-liability structure significantly improved, and offshore liquidity pressure was substantially alleviated[42](index=42&type=chunk) [Information on Domestic Public Market Debts](index=20&type=section&id=有關境內公開市場債務的相關信息) The Group is advancing a comprehensive restructuring plan for its domestic public market debts, including adjusting principal and interest payment arrangements and offering various settlement options to bondholders - The first bondholder meeting for four domestic corporate bonds in 2025 was effectively convened, approving proposals such as adjusting principal and interest payment arrangements[44](index=44&type=chunk) - Sino-Ocean Holdings will provide an overall restructuring plan for holders of outstanding domestic corporate bonds and interbank directional debt financing instruments (target bonds), adjusting principal and interest repayment arrangements and offering multiple settlement options including cash repurchase, equity economic interest rights, and asset-for-debt swaps[45](index=45&type=chunk) - Seven outstanding corporate bonds of Sino-Ocean Holdings were suspended from trading on the Shanghai Stock Exchange starting August 15, 2025, to facilitate the restructuring of the target bonds[46](index=46&type=chunk) [Significant Events After the Period Ended June 30, 2025](index=21&type=section&id=截至2025年6月30日止期間後的重大事件) Key events after the reporting period include an internal asset restructuring where the Company reacquired 2,684 parking spaces from Sino-Ocean Service, increasing its ownership to 100% [Internal Asset Restructuring](index=21&type=section&id=內部資產重組) The Company and Sino-Ocean Service entered into a framework agreement to return 2,684 parking spaces in China to the Group for RMB 323.2 million, an internal asset restructuring increasing the Group's ownership to 100% - On **July 16, 2025**, the Company and Sino-Ocean Service entered into a framework agreement to return **2,684 parking spaces** located in China to the Group, with a transfer price of **RMB 323.2 million**[49](index=49&type=chunk) - The return will be conducted by rescinding the original asset transfer, with the original transfer price to be returned and settled by Sino-Ocean Service providing a long-term loan[49](index=49&type=chunk) - This internal asset restructuring will result in the Group net acquiring approximately **36.18% equity interest** in the target assets, increasing its ownership from **63.82% to 100%**[50](index=50&type=chunk) [Interim Condensed Consolidated Financial Statements](index=22&type=section&id=中期簡明綜合財務報表) Presentation of the Group's interim condensed consolidated financial statements, including the statement of profit or loss, comprehensive income, and financial position, reflecting the impact of market conditions and debt restructuring [Interim Condensed Consolidated Statement of Profit or Loss](index=22&type=section&id=中期簡明綜合損益表) The Group recorded H1 2025 revenue of RMB 6.203 billion and a gross loss of RMB 4.966 billion, but achieved a profit attributable to owners of RMB 10.202 billion, turning loss into profit, driven by a RMB 31.756 billion offshore debt restructuring gain Summary of Interim Condensed Consolidated Statement of Profit or Loss | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand, restated) | | :--- | :--- | :--- | | Revenue | 6,203,069 | 13,313,451 | | Cost of sales | (11,169,233) | (13,016,643) | | Gross (loss)/profit | (4,966,164) | 296,808 | | Interest and other income | 447,672 | 353,276 | | Other losses — net | (3,326,486) | (478,723) | | Fair value changes of investment properties | (643,676) | (292,770) | | Selling and marketing expenses | (360,808) | (282,350) | | Impairment losses under expected credit loss model | (9,724,988) | (296,780) | | Administrative expenses | (631,543) | (657,843) | | Operating loss | (19,205,993) | (3,065,012) | | Offshore debt restructuring gain | 31,756,397 | – | | Finance costs | (2,064,729) | (1,948,086) | | Share of results of joint ventures | (1,173,565) | (751,265) | | Share of results of associates | (337,339) | (55,983) | | Profit/(loss) before income tax | 8,974,771 | (5,820,346) | | Income tax credit/(expense) | 81,386 | 429,950 | | Profit/(loss) for the period | 9,056,157 | (5,390,396) | | Profit/(loss) attributable to owners of the Company | 10,202,141 | (5,381,705) | | Non-controlling interests | (1,145,984) | (8,691) | | Basic earnings/(loss) per share | 1.171 | (0.707) | | Diluted earnings/(loss) per share | 0.919 | (0.707) | [Interim Condensed Consolidated Statement of Comprehensive Income](index=23&type=section&id=中期簡明綜合全面收益表) The Group's H1 2025 total comprehensive income for the period was RMB 9.551 billion, a significant improvement from the prior year's loss of RMB 5.881 billion, primarily due to increased profit and positive foreign exchange differences Summary of Interim Condensed Consolidated Statement of Comprehensive Income | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand, restated) | | :--- | :--- | :--- | | Profit/(loss) for the period | 9,056,157 | (5,390,396) | | Other comprehensive income/(loss) (after tax) | | | | Fair value changes of financial assets at fair value through other comprehensive income | 25,888 | (43,829) | | Exchange differences | 496,686 | (133,173) | | Share of other comprehensive income of investments accounted for using equity method | (27,421) | (313,407) | | Other comprehensive income/(loss) for the period | 495,153 | (490,409) | | Total comprehensive income/(loss) for the period | 9,551,310 | (5,880,805) | | Total comprehensive income/(loss) attributable to owners of the Company | 10,706,576 | (5,900,271) | | Non-controlling interests | (1,155,266) | 19,466 | [Interim Condensed Consolidated Statement of Financial Position](index=24&type=section&id=中期簡明綜合財務狀況表) As of June 30, 2025, the Group's total assets were RMB 165.240 billion, total liabilities RMB 157.013 billion, and net assets RMB 8.227 billion, a significant improvement from the negative equity position at year-end 2024, though liquidity pressure persists Summary of Interim Condensed Consolidated Statement of Financial Position | Indicator | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand, restated) | | :--- | :--- | :--- | | **ASSETS** | | | | Total non-current assets | 45,451,226 | 50,234,407 | | Total current assets | 119,788,889 | 131,170,739 | | **TOTAL ASSETS** | **165,240,115** | **181,405,146** | | **LIABILITIES** | | | | Total current liabilities | 128,849,857 | 148,357,977 | | Total non-current liabilities | 28,163,471 | 35,509,326 | | **TOTAL LIABILITIES** | **157,013,328** | **183,867,303** | | **NET ASSETS/(NET LIABILITIES)** | **8,226,787** | **(2,462,157)** | | **EQUITY** | | | | Equity attributable to owners of the Company | 4,117,119 | (12,659,291) | | Non-controlling interests | 4,109,668 | 10,197,134 | | **TOTAL EQUITY** | **8,226,787** | **(2,462,157)** | - Current liabilities exceeded current assets by approximately **RMB 9.06 billion**[61](index=61&type=chunk) - Total loans were approximately **RMB 67.00 billion**, of which current loans were approximately **RMB 41.68 billion**, while cash and cash equivalents were approximately **RMB 2.00 billion**[61](index=61&type=chunk) [Notes to the Interim Condensed Consolidated Financial Statements](index=26&type=section&id=中期簡明綜合財務報表附註) Detailed notes to the interim condensed consolidated financial statements, covering general information, basis of preparation, accounting policies, segment information, and specific financial line items [1. General Information](index=26&type=section&id=1.%20一般資料) Sino-Ocean Group Holding Limited and its subsidiaries primarily engage in investment holding, property development, and property investment in China, with shares listed on the HKEX Main Board, and these unaudited interim financial statements are presented in RMB - The Group's principal activities are investment holding, property development, and property investment in Mainland China[57](index=57&type=chunk) - The Company was incorporated in Hong Kong on **March 12, 2007**, and its shares are listed on the Main Board of The Stock Exchange of Hong Kong Limited[57](index=57&type=chunk) - These interim condensed consolidated financial statements are unaudited and presented in RMB[57](index=57&type=chunk) [2. Basis of Preparation and Prior Period Adjustments](index=26&type=section&id=2.%20編製基準及過往年度調整) These interim condensed consolidated financial statements are prepared in accordance with HKAS 34 and Listing Rules, and should be read with the 2024 annual financial statements, for which the auditor issued a disclaimer of opinion - These interim condensed consolidated financial statements have been prepared in accordance with Hong Kong Accounting Standard 34 issued by the Hong Kong Institute of Certified Public Accountants and the applicable disclosure provisions of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited[58](index=58&type=chunk) - These interim condensed consolidated financial statements should be read in conjunction with the Group's annual financial statements for the year ended December 31, 2024, prepared in accordance with Hong Kong Financial Reporting Standards[58](index=58&type=chunk) - The Company's auditor issued a disclaimer of opinion on the financial statements for the year ended December 31, 2024[60](index=60&type=chunk) [2.1 Going Concern Assumption](index=27&type=section&id=2.1%20持續經營假設) The Group faces significant going concern uncertainties, including a net loss of RMB 22.70 billion (excluding offshore debt restructuring gain), current liabilities exceeding current assets by RMB 9.06 billion, and substantial overdue loans and domestic bonds, despite ongoing restructuring efforts - Excluding the offshore debt restructuring gain, the Group incurred a net loss of **RMB 22.70 billion** for the six months ended June 30, 2025[61](index=61&type=chunk) - As of June 30, 2025, the Group's current liabilities exceeded current assets by approximately **RMB 9.06 billion**, with total loans of approximately **RMB 67.00 billion**, of which current loans were approximately **RMB 41.68 billion**[61](index=61&type=chunk) - The Group has outstanding loans with a principal amount of approximately **RMB 14.03 billion** and domestic bonds of **RMB 3.53 billion**, and borrowings with a principal amount of approximately **RMB 11.97 billion** may be subject to accelerated repayment[62](index=62&type=chunk) - The Group has initiated a domestic debt restructuring plan involving domestic bonds with a total carrying amount of approximately **RMB 18.07 billion** and is actively negotiating with creditors[63](index=63&type=chunk)[65](index=65&type=chunk) - The Group has completed its offshore debt restructuring, releasing approximately **USD 6.38 billion** of existing debt[67](index=67&type=chunk) - The Company's directors believe that the validity of the going concern assumption depends on the successful implementation of these plans and measures, but there are multiple significant uncertainties[68](index=68&type=chunk)[70](index=70&type=chunk) [2.2 Prior Period Adjustments](index=30&type=section&id=2.2%20過往年度調整) The Group reclassified perpetual bonds totaling approximately RMB 2.679 billion from non-controlling interests to borrowings, which further expanded the H1 2024 loss to RMB 5.390 billion and impacted total equity at the beginning and end of 2024 - The Group reclassified perpetual bonds totaling approximately **RMB 2.679 billion** (including issue amount of approximately **RMB 2.359 billion** and interest of **RMB 320 million**) from non-controlling interests to borrowings[72](index=72&type=chunk) Impact of Prior Period Adjustments on Financial Statements | Indicator | June 30, 2024 Impact (RMB thousand) | December 31, 2024 Impact (RMB thousand) | January 1, 2024 Impact (RMB thousand) | | :--- | :--- | :--- | :--- | | Increase in finance costs | (73,222) | - | - | | Increase in loss before income tax | (73,222) | - | - | | Increase in loss for the period | (73,222) | - | - | | Increase in loss for the period attributable to non-controlling interests | (73,222) | - | - | | Increase in current loans | - | 2,359,000 | 2,359,000 | | Increase in trade and other payables | - | 320,159 | 220,796 | | Decrease in total equity | - | (2,679,159) | (2,579,796) | | Decrease in total equity attributable to non-controlling interests | - | (2,679,159) | (2,579,796) | - The restatement resulted in the Group's loss for the period ended June 30, 2024, further expanding to **RMB 5.390 billion**[75](index=75&type=chunk) [3. Accounting Policies](index=31&type=section&id=3.%20會計政策) The Group's accounting policies are consistent with those of the 2024 annual financial statements, with the adoption of HKAS 21 and HKFRS 1 amendments (lack of exchangeability) not expected to have a significant impact - The accounting policies applied are consistent with those adopted in the annual financial statements for the year ended December 31, 2024, except for the adoption of amendments to HKAS 21 and HKFRS 1 (Lack of Exchangeability)[77](index=77&type=chunk) - These amendments had no impact and are not expected to have a significant impact on the Group's transactions in the current or future reporting periods and the foreseeable future[77](index=77&type=chunk) [4. Segment Information](index=32&type=section&id=4.%20分部資料) The Group determines operating segments based on reports reviewed by executive directors, primarily property development (by geographical location), property management, and property investment, with segment operating profit/loss excluding certain other income/losses and finance costs - Management determines operating segments based on reports reviewed by the Company's executive directors for strategic decisions, primarily considering business from geographical and product perspectives[78](index=78&type=chunk) - The measurement basis for segment operating profit/loss excludes the impact of other gains/losses of operating segments, as well as finance costs, corporate financial income, share of profit or loss of interests in joint ventures and associates, fair value changes of investment properties, etc[79](index=79&type=chunk) 2025 H1 Segment Revenue and Operating Profit/(Loss) | Segment | Revenue (RMB thousand) | Operating Profit/(Loss) (RMB thousand) | | :--- | :--- | :--- | | Property Development - Beijing Region | 990,857 | (513,271) | | Property Development - Bohai Rim Region | 593,176 | (837,045) | | Property Development - East China Region | 125,870 | (2,209,312) | | Property Development - South China Region | 650,459 | (2,066,719) | | Property Development - Central China Region | 718,597 | (534,849) | | Property Development - West China Region | 216,755 | (659,228) | | Property Investment | 143,540 | 121,340 | | Property Management | 1,347,545 | (44,779) | | All Other Segments | 1,416,270 | (8,425,358) | | **Total** | **6,203,069** | **(15,169,221)** | - The Group's revenue from external customers primarily originated from Mainland China; as of June 30, 2025, total non-current assets located in Mainland China were approximately **RMB 33.392 billion**[83](index=83&type=chunk) [5. Trade and Other Receivables and Prepayments](index=35&type=section&id=5.%20貿易及其他應收款項及預付款項) As of June 30, 2025, total trade receivables were RMB 5.514 billion (with RMB 1.378 billion impairment), and other receivables and prepayments were RMB 55.338 billion (with RMB 2.037 billion impairment), showing an increase in trade receivables aged over one year Trade and Other Receivables and Prepayments | Indicator | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Trade receivables | 4,136,805 | 4,443,710 | | Other receivables and prepayments | 55,337,976 | 60,056,862 | | **Total** | **59,474,781** | **64,500,572** | | Less: Non-current portion | (6,675,150) | (6,725,443) | | **Current portion** | **52,799,631** | **57,775,129** | | Impairment provision for trade receivables | (1,377,662) | (991,607) | | Impairment provision for other receivables and prepayments | (2,037,401) | (1,253,493) | Ageing Analysis of Trade Receivables (as of June 30, 2025) | Ageing | Amount (RMB thousand) | | :--- | :--- | | Less than 6 months | 1,459,305 | | 6 months to 1 year | 2,422,555 | | 1 year to 2 years | 453,782 | | 2 years to 3 years | 611,492 | | Over 3 years | 567,333 | | **Total** | **5,514,467** | - As of June 30, 2025, trade receivables with a carrying amount of approximately **RMB 316 million** were pledged as collateral for the Group's loans[85](index=85&type=chunk) [6. Trade and Other Payables](index=38&type=section&id=6.%20貿易及其他應付款項) As of June 30, 2025, total trade payables were RMB 11.578 billion and other payables were RMB 35.628 billion, with a decrease in trade payables aged within 6 months and an increase in those over 1 year Trade and Other Payables | Indicator | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand, restated) | | :--- | :--- | :--- | | Trade payables | 11,578,474 | 13,340,695 | | Accrued expenses | 6,333,044 | 7,542,128 | | Amounts due to joint ventures | 8,596,449 | 7,950,594 | | Amounts due to associates | 715,047 | 1,009,299 | | Amounts due to non-controlling interests | 961,659 | 926,122 | | Amounts due to government | 499,512 | 504,528 | | Other taxes payable | 4,251,019 | 4,046,311 | | Deposits received | 1,598,297 | 1,617,461 | | Other payables | 12,718,693 | 13,986,093 | | **Total** | **47,252,194** | **50,923,231** | | Less: Non-current portion | (45,313) | (47,762) | | **Current portion** | **47,206,881** | **50,875,469** | Ageing Analysis of Trade Payables (as of June 30, 2025) | Ageing | Amount (RMB thousand) | | :--- | :--- | | Within 6 months | 4,581,262 | | 6 months to 1 year | 899,873 | | 1 year to 2 years | 2,542,196 | | 2 years to 3 years | 2,501,237 | | 3 years and above | 2,816,127 | | **Total** | **13,340,695** | - Amounts due to joint ventures, associates, and non-controlling interests are unsecured, interest-free, and repayable on demand[89](index=89&type=chunk) [7. Other Losses — Net](index=39&type=section&id=7.%20其他虧損%20—%20淨額) The Group's H1 2025 other losses net significantly increased to RMB 3.326 billion from RMB 479 million in the prior year, primarily due to fair value losses on financial assets/liabilities, exchange losses, litigation provisions, and impairment losses on property, plant, and equipment and goodwill Composition of Other Losses — Net | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Fair value changes of financial assets and financial liabilities at fair value through profit or loss | (1,422,241) | (238,463) | | Exchange losses | (363,368) | (56,491) | | Amounts used to discharge contractual obligations | (48,240) | (37,783) | | Gain/(loss) on disposal of interests in subsidiaries | 13,567 | (135,171) | | Loss on disposal of joint ventures and associates | (183,997) | (10,727) | | Net (loss)/gain on deemed disposal of joint ventures and associates | (163,221) | 4,189 | | Litigation provision | (422,183) | – | | Impairment loss on property, plant and equipment | (324,594) | – | | Impairment loss on goodwill | (409,008) | – | | Other losses | (3,557) | (4,277) | | **Total** | **(3,326,486)** | **(478,723)** | [8. Finance Costs](index=39&type=section&id=8.%20財務費用) The Group's H1 2025 total interest expenses were RMB 2.765 billion, with RMB 2.065 billion expensed through profit or loss due to non-capitalization, and the weighted average capitalization rate increased to 5.84% Composition of Finance Costs | Item | 2025 (RMB thousand) | 2024 (RMB thousand, restated) | | :--- | :--- | :--- | | Interest expense: bank loans | 1,250,425 | 1,081,799 | | Interest expense: other loans | 1,465,769 | 1,672,080 | | Interest expense: lease liabilities | 48,469 | 59,574 | | **Total interest expense** | **2,764,663** | **2,813,453** | | Less: Interest capitalised (at annual capitalisation rate of 5.84%) | (699,934) | (865,367) | | **Finance costs** | **2,064,729** | **1,948,086** | - The weighted average capitalisation rate increased from **5.60%** (restated) in the same period of 2024 to **5.84%** in the current period[92](index=92&type=chunk) [9. Income Tax Credit](index=40&type=section&id=9.%20所得稅抵免) The Group recorded an income tax credit of RMB 81.386 million in H1 2025, primarily due to decreased revenue and gross loss, with China corporate income tax provisioned at a statutory rate of 25% Composition of Income Tax Credit | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Current income tax: PRC corporate income tax | 116,121 | 403,404 | | Current income tax: PRC land appreciation tax | 80,572 | (646,028) | | Deferred income tax | (278,079) | (187,326) | | **Total** | **(81,386)** | **(429,950)** | - Most of the Group's subsidiaries are subject to PRC corporate income tax, with provisions made at the statutory income tax rate of **25%**[94](index=94&type=chunk) - The tax credit amount recorded was mainly due to a combination of factors such as decreased revenue and gross loss during the reporting period[16](index=16&type=chunk) [10. Earnings/(Loss) Per Share](index=40&type=section&id=10.%20每股盈利%EF%BC%8F%EF%BC%88虧損%EF%BC%89) The Group's H1 2025 basic earnings per share were RMB 1.171 and diluted earnings per share were RMB 0.919, both turning loss into profit, with potential dilutive ordinary shares including employee share options and mandatory convertible bonds Calculation of Earnings/(Loss) Per Share | Indicator | 2025 (RMB) | 2024 (RMB) | | :--- | :--- | :--- | | Profit/(loss) attributable to owners of the Company (RMB thousand) | 10,202,141 | (5,381,705) | | Dividends on perpetual securities (RMB thousand) | (22,827) | – | | Profit/(loss) for the purpose of basic earnings per share (RMB thousand) | 10,179,314 | (5,381,705) | | Weighted average number of ordinary shares in issue (thousand shares) | 8,689,431 | 7,616,096 | | **Basic earnings/(loss) per share** | **1.171** | **(0.707)** | | Profit/(loss) for the purpose of diluted earnings/(loss) per share (RMB thousand) | 10,179,314 | (5,381,705) | | Weighted average number of ordinary shares for diluted earnings/(loss) per share (thousand shares) | 11,082,194 | 7,616,096 | | **Diluted earnings/(loss) per share** | **0.919** | **(0.707)** | - Basic earnings/(loss) per share is calculated by dividing the profit/(loss) attributable to owners of the Company by the weighted average number of ordinary shares in issue during the period[96](index=96&type=chunk) - The Company has two classes of potential dilutive ordinary shares: employee share options and mandatory convertible bonds[98](index=98&type=chunk) [11. Dividends](index=41&type=section&id=11.%20股息) The Board of Directors does not recommend the payment of an interim dividend for the six months ended June 30, 2025, or 2024 - The Board of Directors does not recommend the payment of an interim dividend for the six months ended June 30, 2025, and 2024[100](index=100&type=chunk) [12. Events After the Reporting Period](index=41&type=section&id=12.%20期後事項) Apart from going concern disclosures and domestic public market debt information, no other significant events occurred after June 30, 2025, except for an internal restructuring where the Company reacquired 2,684 parking spaces from Sino-Ocean Service, increasing its ownership to 100% - On **July 16, 2025**, the Company and Sino-Ocean Service entered into a framework agreement to return **2,684 parking spaces** located in China (with a transfer price of **RMB 323.2 million**) to the Group[102](index=102&type=chunk) - This transaction is an internal restructuring that will effectively increase the Group's asset ownership from **63.82% to 100%**, resulting in a net acquisition of **36.18% equity interest**[102](index=102&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=42&type=section&id=購買%E3%80%81出售%E6%88%96%E8%B4%96%E5%9B%9E%E6%9C%AC%E5%85%AC%E5%8F%B8%E4%B8%8A%E5%B8%82%E8%AD%89%E5%88%B8) Neither the Company nor its subsidiaries purchased, sold, or redeemed any of the Company's listed securities during the six months ended June 30, 2025, and no treasury shares were held - Neither the Company nor its subsidiaries purchased, sold, or redeemed any of the Company's listed securities during the six months ended June 30, 2025[103](index=103&type=chunk) - As of June 30, 2025, the Company did not hold any treasury shares[103](index=103&type=chunk) [Review of Interim Financial Information](index=42&type=section&id=中期財務資料審閱) The Group's interim condensed consolidated financial statements for the six months ended June 30, 2025, have been reviewed by the Company's auditor, and the Audit Committee has reviewed accounting policies, internal controls, and risk management - The Group's interim condensed consolidated financial statements for the six months ended June 30, 2025, have been reviewed by the Company's auditor, BDO Limited[104](index=104&type=chunk) - The Audit Committee has reviewed the accounting policies and practices adopted by the Group with the Company's management and discussed matters such as internal control, risk management, and financial reporting[104](index=104&type=chunk) [Summary of Independent Auditor's Review Report on Interim Condensed Consolidated Financial Statements](index=42&type=section&id=中期簡明綜合財務報表的獨立核數師審閱報告摘要) The independent auditor issued a disclaimer of conclusion on the interim condensed consolidated financial statements due to multiple significant uncertainties regarding the Group's ability to continue as a going concern [Basis for Disclaimer of Conclusion](index=42&type=section&id=不發表結論的基礎) The independent auditor disclaimed a conclusion on the interim financial statements due to significant going concern uncertainties, including a RMB 22.70 billion loss (excluding restructuring gain), current liabilities exceeding current assets by RMB 9.06 billion, and substantial overdue debts - The auditor issued a disclaimer of conclusion on the Group's interim condensed consolidated financial statements for the six months ended June 30, 2025[105](index=105&type=chunk) - Excluding the offshore debt restructuring gain, the Group recorded a loss of approximately **RMB 22.70 billion**, and current liabilities exceeded current assets by approximately **RMB 9.06 billion**[105](index=105&type=chunk) - The Group has outstanding loans with a principal amount of approximately **RMB 14.03 billion** and domestic bonds of **RMB 3.53 billion**, and borrowings with a principal amount of approximately **RMB 11.97 billion** may be subject to accelerated repayment[106](index=106&type=chunk) - The Group has initiated a domestic debt restructuring plan involving seven listed domestic bonds with a carrying amount of approximately **RMB 13.07 billion** and three other domestic bonds of approximately **RMB 5.00 billion**[107](index=107&type=chunk) - All these events or conditions indicate the existence of multiple material uncertainties that may cast significant doubt on the Group's ability to continue as a going concern[107](index=107&type=chunk) - The auditor was unable to conclude whether the use of the going concern basis of accounting is appropriate due to multiple uncertainties regarding the successful implementation of management's plans and measures[108](index=108&type=chunk)[109](index=109&type=chunk)[111](index=111&type=chunk) [Compliance with Corporate Governance Code](index=45&type=section&id=遵守企業管治守則) The Company has applied the principles of the Corporate Governance Code and complied with applicable code provisions, except for the combined roles of Chairman and Chief Executive Officer, which is deemed to maintain sufficient balance of power - The Company has applied the principles of the Corporate Governance Code to its corporate governance framework and practices and has complied with the applicable code provisions, except for the non-segregation of the roles of Chairman and Chief Executive Officer[113](index=113&type=chunk) - The Company believes that combining the roles of Chairman and Chief Executive Officer facilitates daily business operations, and all major decisions are made after consultation with the Board and senior management, thus maintaining a sufficient balance of power[114](index=114&type=chunk) [Interim Dividends](index=45&type=section&id=中期股息) The Board of Directors resolved not to declare an interim dividend for the six months ended June 30, 2025 (six months ended June 30, 2024: nil) - The Board of Directors resolved not to declare an interim dividend for the six months ended June 30, 2025 (six months ended June 30, 2024: nil)[115](index=115&type=chunk) [Publication of Interim Results Announcement and Interim Report on HKEX and Company Website](index=45&type=section&id=於聯交所及本公司網站刊載之中期業績公告及中期報告) This announcement has been published on the HKEX and Company websites, and the interim report for the six months ended June 30, 2025, will be distributed to shareholders and published accordingly - This announcement has been published on the HKEX website (www.hkexnews.hk) and the Company's website (www.sinooceangroup.com)[116](index=116&type=chunk) - The Company's interim report for the six months ended June 30, 2025, will be distributed to shareholders and published on the HKEX and Company websites in due course[116](index=116&type=chunk) [Acknowledgements](index=45&type=section&id=致謝) The Board of Directors extends its sincere gratitude to shareholders, investors, local governments, partners, customers, and all directors, management, and staff for their strong support and efforts - The Board of Directors expresses its deep gratitude to shareholders, investors, local governments, partners, and customers for their strong support, and to the directors, management, and all staff for their efforts with the Company[117](index=117&type=chunk) [Definitions](index=46&type=section&id=釋義) This section provides definitions for key terms used in the announcement, such as "Audit Committee," "BDO Limited," "Board," "Company," "Group," and "RMB" - This section provides definitions for key terms used in the announcement, such as "Audit Committee," "BDO Limited," "Board," "Company," "Group," and "RMB"[118](index=118&type=chunk)[119](index=119&type=chunk)[122](index=122&type=chunk)

[Interim Results and Operations Summary](index=1&type=section&id=%E4%B8%AD%E6%9C%9F%E6%A5%AD%E7%B8%BE%E5%8F%8A%E7%B6%93%E7%87%9F%E6%91%98%E8%A6%81) [Interim Results](index=1&type=section&id=%E4%B8%AD%E6%9C%9F%E6%A5%AD%E7%B8%BE) Zhenro Properties Group Limited (the Group) announced its unaudited condensed consolidated interim results for the six months ended June 30, 2025, showing significant deterioration in contracted sales, revenue, and loss attributable to owners of the parent, alongside a reduction in land reserves | Indicator | Six Months Ended June 30, 2025 (RMB million) | Six Months Ended June 30, 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Contracted Sales Amount | 2,365.2 | 3,427.8 | -31.0% | | Revenue | 4,645.4 | 24,658.4 | -81.2% | | Loss Attributable to Owners of the Parent | (6,463.1) | (2,343.4) | 175.8% (Loss widened) | | Land Reserve (million sq.m.) | 9.71 | 9.95 (December 31, 2024) | -2.4% | [Condensed Consolidated Interim Financial Statements](index=2&type=section&id=%E4%B8%AD%E6%9C%9F%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8) [Condensed Consolidated Interim Statement of Profit or Loss](index=2&type=section&id=%E4%B8%AD%E6%9C%9F%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E6%90%8D%E7%9B%8A%E8%A1%A8) The Group's statement of profit or loss for the six months ended June 30, 2025, shows a significant decline in revenue, sharp reduction in gross profit, and substantial increases in various expenses, leading to a significant widening of loss for the period and basic loss per share | Indicator | June 30, 2025 (RMB thousand) | June 30, 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 4,645,377 | 24,658,401 | -81.2% | | Cost of Sales | (4,513,712) | (23,344,275) | -80.7% | | Gross Profit | 131,665 | 1,314,126 | -90.0% | | Net Impairment Loss on Financial Assets | (1,344,660) | (119,340) | 1027.2% | | Other Expenses | (2,495,201) | (1,262,005) | 97.7% | | Finance Costs | (1,946,317) | (1,564,696) | 24.4% | | Loss Before Tax | (6,769,508) | (2,645,597) | 155.9% | | Loss for the Period | (6,657,578) | (2,508,370) | 165.4% | | Loss Attributable to Owners of the Parent | (6,463,094) | (2,343,441) | 175.8% | | Basic and Diluted Loss Per Share | RMB (1.48) | RMB (0.54) | 174.1% | [Condensed Consolidated Interim Statement of Comprehensive Income](index=3&type=section&id=%E4%B8%AD%E6%9C%9F%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E5%85%A8%E9%9D%A2%E6%94%B6%E7%9B%8A%E8%A1%A8) The Group's total comprehensive expenses for the period significantly increased, primarily due to the widening loss for the period, partially offset by other comprehensive income from exchange differences | Indicator | June 30, 2025 (RMB thousand) | June 30, 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Loss for the Period | (6,657,578) | (2,508,370) | 165.4% | | Exchange Differences Arising from Translation of Overseas Operations | 537,497 | (182,126) | 394.0% | | Total Comprehensive Expenses for the Period, Net of Tax | (6,120,081) | (2,690,496) | 127.5% | | Total Comprehensive Expenses Attributable to Owners of the Parent | (5,925,597) | (2,525,567) | 134.6% | [Condensed Consolidated Interim Statement of Financial Position](index=4&type=section&id=%E4%B8%AD%E6%9C%9F%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81%E8%A1%A8) As of June 30, 2025, the Group's financial position continued to deteriorate, with a significant increase in net current liabilities and net debt, and total equity turning negative, reflecting severe liquidity pressure | Indicator | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Total Non-current Assets | 15,788,274 | 16,811,768 | -6.1% | | Total Current Assets | 85,907,105 | 96,570,399 | -11.1% | | Total Current Liabilities | 103,824,342 | 109,438,139 | -5.2% | | Net Current Liabilities | (17,917,237) | (12,867,740) | 39.2% (Deficit widened) | | Total Assets Less Current Liabilities | (2,128,963) | 3,944,028 | -154.0% (Turned negative) | | Total Non-current Liabilities | 6,292,001 | 6,223,813 | 1.1% | | Total Equity | (8,420,964) | (2,279,785) | 269.4% (Deficit widened) | [Notes to the Condensed Consolidated Interim Financial Information](index=6&type=section&id=%E4%B8%AD%E6%9C%9F%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E8%B3%87%E6%96%99%E9%99%84%E8%A8%BB) [Company Information](index=6&type=section&id=%E5%85%AC%E5%8F%B8%E8%B3%87%E6%96%99) Zhenro Properties Group Limited is incorporated in the Cayman Islands, with shares listed on the Hong Kong Stock Exchange, primarily engaged in property development and property leasing - The Company is a limited liability company incorporated in the Cayman Islands, with its shares listed on the Main Board of the Hong Kong Stock Exchange on **January 16, 2018**[11](index=11&type=chunk) - The Group is principally engaged in property development and property leasing businesses[11](index=11&type=chunk) [Basis of Preparation](index=6&type=section&id=%E7%B7%A8%E8%A3%BD%E5%9F%BA%E6%BA%96) The interim financial information is prepared in accordance with IAS 34 and should be read in conjunction with the annual consolidated financial statements; the Group faces severe going concern uncertainties, but the Board believes that preparing financial information on a going concern basis remains appropriate after implementing various measures [Going Concern Basis](index=6&type=section&id=%E6%8C%81%E7%BA%8C%E7%B6%93%E7%91%B6%E5%9F%BA%E6%BA%96) The Group faces severe going concern uncertainties, including substantial losses, current liabilities exceeding current assets, significant borrowings maturing soon, and multiple debt defaults, yet management is actively pursuing offshore debt restructuring, loan extensions, new financing, accelerated property sales, cash collection, cost control, and equity disposals, with the Board still deeming the going concern basis appropriate - The Group recorded a net loss of **RMB 6,657,578,000** and its current liabilities exceeded current assets by **RMB 17,917,237,000**[13](index=13&type=chunk) - Of the total **RMB 59,551,166,000** in bank and other borrowings, senior notes, corporate bonds, perpetual capital securities, and asset-backed securities, **RMB 53,559,327,000** is repayable within the next twelve months or on demand, while cash and cash equivalents are only **RMB 467,615,000**[13](index=13&type=chunk) - The Group has defaulted on multiple debts, including principal and interest on senior notes of **RMB 25,514,182,000**, principal on interest-bearing bank and other borrowings of **RMB 20,619,286,000**, principal and interest on corporate bonds of **RMB 2,532,335,000**, principal and interest on perpetual capital securities of **RMB 1,799,698,000**, and principal and interest on asset-backed securities of **RMB 1,120,284,000**[13](index=13&type=chunk) - Management is actively collaborating with legal and financial advisors to advance an offshore overall debt management plan, considering various options for a revised restructuring plan and exploring new offshore restructuring solutions[14](index=14&type=chunk) - The Group successfully extended the maturity dates of approximately **RMB 1.95 billion** in borrowings by one to six years, with annual interest cost reductions ranging from **0.4% to 7.4%**[15](index=15&type=chunk) - The Group has formulated a business strategic plan primarily focused on accelerating property sales, but due to the sluggish market, significant price reductions for quick sales have not been adopted[17](index=17&type=chunk) [Changes in Accounting Policies and Disclosures](index=8&type=section&id=%E6%9C%83%E8%A8%88%E6%94%BF%E7%AD%96%E5%8F%8A%E6%8A%AB%E9%9C%B2%E8%AE%8A%E5%8B%95) This period saw the first-time adoption of amendments to IAS 21 'Lack of Exchangeability', which had no impact on the condensed consolidated interim financial information as all currencies transacted by the Group are exchangeable - This period saw the first-time adoption of amendments to IAS 21 'Lack of Exchangeability', which specifies how an entity should assess whether a currency is exchangeable and how to estimate the spot exchange rate in the absence of exchangeability[19](index=19&type=chunk) - As all currencies transacted by the Group are exchangeable, these amendments had no impact on the condensed consolidated interim financial information[19](index=19&type=chunk) [Operating Segment Information](index=8&type=section&id=%E7%B6%93%E7%91%B6%E5%88%86%E9%83%A8%E8%B3%87%E6%96%99) The Group aggregates all its businesses into a single reportable operating segment due to similar economic characteristics across project locations and comparable nature, processes, customer types, and service delivery methods for property development, leasing, and management services, with revenue primarily from mainland China and no significant non-current assets outside mainland China - Management monitors the Group's business by project location, but all businesses are aggregated into a single reportable operating segment due to similar economic characteristics across all locations[20](index=20&type=chunk) - The Group's revenue from external customers is solely derived from its operations in mainland China, and it has no significant non-current assets located outside mainland China[21](index=21&type=chunk) - Sales to a single customer or a group of customers under common control did not account for **10% or more** of the Group's revenue during the period[22](index=22&type=chunk) [Revenue](index=9&type=section&id=%E6%94%B6%E7%9B%8A) The Group's revenue primarily derives from property sales, with total revenue for the period significantly decreasing by 81.2% due to a sharp decline in property sales revenue, while property leasing income saw a slight increase | Revenue Source | June 30, 2025 (RMB thousand) | June 30, 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue from Contracts with Customers | 4,600,123 | 24,617,558 | -81.3% | | Gross Rental Income from Operating Leases of Investment Properties | 45,254 | 40,843 | 10.8% | | Total | 4,645,377 | 24,658,401 | -81.2% | | Type of Goods or Services | June 30, 2025 (RMB thousand) | June 30, 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Property Sales | 4,598,119 | 24,609,579 | -81.3% | | Management Consulting Services | 2,004 | 7,979 | -74.9% | [Other Expenses](index=10&type=section&id=%E5%85%B6%E4%BB%96%E9%96%8B%E6%94%AF) The Group's other expenses significantly increased by 97.7%, primarily due to a substantial rise in impairment losses on properties under development and completed properties held for sale, as well as net exchange losses | Expense Item | June 30, 2025 (RMB thousand) | June 30, 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Impairment Loss Recognized on Properties Under Development and Completed Properties Held for Sale | 1,971,541 | 1,198,502 | 64.5% | | Net Exchange Loss | 336,566 | 33,783 | 896.1% | | Loss on Disposal of an Associate | 93,050 | – | N/A | | Liquidated Damages and Overdue Payment Compensation | 91,004 | 28,609 | 218.1% | | Total | 2,495,201 | 1,262,005 | 97.7% | [Finance Costs](index=10&type=section&id=%E8%9E%8D%E8%B3%87%E6%88%90%E6%9C%AC) The Group's finance costs increased by 24.4%, mainly due to a significant reduction in capitalized interest, despite a decrease in total interest on bank and other borrowings | Finance Cost Item | June 30, 2025 (RMB thousand) | June 30, 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Interest on Bank and Other Borrowings, Corporate Bonds, Senior Notes and Asset-backed Securities | 2,382,698 | 2,452,715 | -2.9% | | Interest Expense Arising from Revenue Contracts | 12,580 | 423,550 | -97.0% | | Total Interest Expense on Financial Liabilities Not at Fair Value Through Profit or Loss | 2,395,340 | 2,877,258 | -16.8% | | Less: Capitalized Interest | (449,023) | (1,312,562) | -65.8% | | Total | 1,946,317 | 1,564,696 | 24.4% | [Loss Before Tax](index=11&type=section&id=%E9%99%A4%E7%A8%85%E5%89%8D%E虧%E6%90%8D) The Group's loss before tax significantly widened, primarily influenced by factors such as cost of properties sold, impairment losses, fair value losses, and exchange losses | Item | June 30, 2025 (RMB thousand) | June 30, 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Cost of Properties Sold | 4,505,148 | 23,336,626 | -80.7% | | Impairment Loss Recognized on Properties Under Development and Completed Properties Held for Sale | 1,971,541 | 1,198,502 | 64.5% | | Net Impairment Loss on Financial Assets | 1,344,660 | 119,340 | 1027.2% | | Fair Value Loss on Investment Properties | 259,300 | 225,600 | 15.0% | | Net Exchange Loss | 336,566 | 33,783 | 896.1% | | Employee Benefit Expenses | 141,472 | 190,562 | -25.7% | [Income Tax Credit](index=11&type=section&id=%E6%89%80%E5%BE%97%E7%A8%85%E6%8A%B5%E5%85%8D) The Group's income tax credit for the period decreased, mainly due to a reduction in over-provision for prior years, despite an increase in land appreciation tax - The Group's subsidiaries operating in mainland China are subject to corporate income tax at a rate of **25%** and land appreciation tax at progressive rates ranging from **30% to 60%**[28](index=28&type=chunk) | Tax Item | June 30, 2025 (RMB thousand) | June 30, 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Corporate Income Tax | — | 70,167 | -100.0% | | Land Appreciation Tax | 27,872 | 18,740 | 48.7% | | Over-provision in Prior Years | (167,372) | (294,488) | -43.1% | | Total Tax Credit for the Period | (111,930) | (137,227) | -18.4% | [Dividends](index=12&type=section&id=%E8%82%A1%E6%81%AF) The Board resolved not to declare an interim dividend for the six months ended June 30, 2025 - The Board resolved not to declare an interim dividend for the six months ended **June 30, 2025**[30](index=30&type=chunk) [Loss Per Share Attributable to Ordinary Equity Holders of the Parent](index=12&type=section&id=%E6%AF%8D%E5%85%AC%E5%8F%B8%E6%99%AE%E9%80%9A%E6%AC%8A%E7%9B%8A%E6%8C%81%E6%9C%89%E4%BA%BA%E6%87%89%E4%BD%B5%E6%AF%8F%E8%82%A1%E虧%E6%90%8D) The Group's basic loss per share significantly widened to RMB (1.48), reflecting a substantial increase in loss attributable to owners of the parent | Indicator | June 30, 2025 (RMB thousand) | June 30, 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Loss Attributable to Ordinary Equity Holders of the Parent | (6,463,094) | (2,343,441) | 175.8% | | Weighted Average Number of Ordinary Shares Issued During the Period | 4,367,756,000 | 4,367,756,000 | 0.0% | | Basic and Diluted Loss Per Share | RMB (1.48) | RMB (0.54) | 174.1% | - As the Group had no potential dilutive ordinary shares outstanding during the reporting period, no diluted adjustment was made to the basic loss per share amount[31](index=31&type=chunk) [Trade and Other Receivables](index=13&type=section&id=%E8%B2%BF%E6%98%93%E6%87%89%E6%94%B6%E6%AC%BE%E9%A0%85) The Group's total trade and other receivables slightly decreased, with a significant reduction in receivables within one year and a notable increase in receivables over one year, while the expected credit loss rate remained stable | Aging | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Within One Year | 19,376 | 104,306 | -81.4% | | Over One Year | 235,075 | 158,364 | 48.4% | | Total | 254,451 | 262,670 | -3.1% | - The expected loss rate for trade and other receivables was assessed at **0.7%** (2024: **0.7%**), and the directors believe that the expected credit losses are not material, thus no loss allowance was recognized[33](index=33&type=chunk) [Trade and Other Payables and Bills Payable](index=13&type=section&id=%E8%B2%BF%E6%98%93%E6%87%89%E4%BB%98%E6%AC%BE%E9%A0%85%E5%8F%8A%E6%87%89%E4%BB%98%E7%A5%A8%E6%93%9A) The Group's total trade and other payables and bills payable decreased, but payables over one year significantly increased, with overdue commercial acceptance bills outstanding | Aging | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Within One Year | 2,372,189 | 15,194,182 | -84.4% | | Over One Year | 11,228,684 | 1,155,507 | 871.7% | | Total | 13,600,873 | 16,349,689 | -16.8% | - As of **June 30, 2025**, approximately **RMB 1,171,134,000** of commercial acceptance bills issued by the Company's subsidiaries were overdue and unpaid[34](index=34&type=chunk) [Chairman's Report — 2025 Interim](index=14&type=section&id=%E4%B8%BB%E5%B8%AD%E5%A0%B1%E5%91%8A%E2%80%942025%E4%B8%AD%E6%9C%9F) [Results](index=14&type=section&id=%E6%A5%AD%E7%B8%BE) The Group's revenue for the period was approximately RMB 4,645.4 million, with a loss of approximately RMB 6,657.6 million, and loss attributable to owners of the parent of RMB 6,463.1 million; the Board does not recommend an interim dividend | Indicator | Amount (RMB million) | | :--- | :--- | | Revenue | 4,645.4 | | Loss | 6,657.6 | | Loss Attributable to Owners of the Parent | 6,463.1 | - The Board does not recommend the payment of any interim dividend for the period[36](index=36&type=chunk) [Market and Operations Review](index=14&type=section&id=%E5%B8%82%E5%A0%B4%E4%BB%A5%E5%8F%8A%E7%B6%93%E7%91%B6%E5%9B%9E%E9%A1%A7) In the first half of 2025, China's real estate market remained sluggish, and the Group, facing difficulties, strived to maintain overall operational stability by ensuring project construction, advancing existing asset operations, implementing liquidity management and cost-saving measures, and actively promoting offshore debt restructuring - In the first half of **2025**, China's real estate market continued to operate at a low level, with real estate enterprises facing immense operational pressure[37](index=37&type=chunk) - The Group delivered approximately **2,000** new homes on schedule, committed to building high-quality products and services[37](index=37&type=chunk) - The Group continued to implement liquidity management and cost-saving measures, including seeking extensions for domestic and overseas financing, improving the quality of new home sales, revitalizing existing assets and accelerating cash recovery, streamlining corporate structure, and reducing administrative expenses[37](index=37&type=chunk) - The Group is actively collaborating with legal and financial advisors to advance the overall offshore debt restructuring to achieve a long-term sustainable capital structure[37](index=37&type=chunk) [Outlook](index=14&type=section&id=%E5%B1%95%E6%9C%9B) Looking ahead to the second half of 2025, the Group anticipates continued challenges in China's real estate sector and plans to leverage policy opportunities to restart key projects, advance ongoing construction, enhance existing asset operational capabilities, strengthen financial risk management, optimize asset structure, strictly control operating costs, and improve management efficiency and team innovation to foster new development for the enterprise - China's real estate industry is expected to continue facing difficulties in the second half of **2025**[38](index=38&type=chunk) - The Group will seize policy opportunities for economic revitalization and stabilization of the real estate market, striving to restart key challenging projects and orderly advance the construction of ongoing projects[38](index=38&type=chunk) - The Group will focus on enhancing its existing asset operational capabilities to further improve the effectiveness of asset value recovery[39](index=39&type=chunk) - The Group will strengthen financial risk management, optimize its asset structure, strictly control operating costs, while enhancing management efficiency and operational effectiveness, and improving the team's innovative and pioneering spirit and capabilities[39](index=39&type=chunk) [Management Discussion and Analysis](index=16&type=section&id=%E7%AE%A1%E7%90%86%E5%B1%A4%E8%A8%8E%E8%AB%96%E5%8F%8A%E5%88%86%E6%9E%90) [Property Development](index=16&type=section&id=%E6%88%BF%E5%9C%B0%E7%94%A2%E9%96%8B%E7%99%BC) The Group's property development business faces challenges, with significant declines in contracted sales and gross floor area, though average selling price increased; recognized revenue sharply decreased due to fewer deliveries, and both completed properties held for sale and properties under development saw reduced amounts [Contracted Sales](index=16&type=section&id=%E5%90%88%E7%B4%84%E9%8A%B7%E5%94%AE) The Group's contracted sales amount and gross floor area both significantly decreased during the period, but the contracted average selling price increased | Indicator | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Contracted Sales Amount (RMB million) | 2,365.2 | 3,427.8 | -31.0% | | Total Contracted Sales Gross Floor Area (sq.m.) | 142,620 | 248,700 | -42.7% | | Contracted Average Selling Price (RMB/sq.m.) | 16,584 | 13,781 | 20.3% | [Revenue Recognized from Property Sales](index=16&type=section&id=%E9%8A%B7%E5%94%AE%E7%89%A9%E6%A5%AD%E5%B7%B2%E7%A2%BA%E8%AA%8D%E6%94%B6%E7%9B%8A) Revenue recognized from property sales for the period significantly decreased by 81.3%, primarily due to a reduction in gross floor area delivered, though the recognized average selling price increased due to higher property prices in the cities where properties were delivered | Indicator | Six Months Ended June 30, 2025 (RMB million) | Six Months Ended June 30, 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue Recognized from Property Sales | 4,598.1 | 24,609.6 | -81.3% | | Recognized Average Selling Price (RMB/sq.m.) | 23,236.1 | 15,912.0 | 46.0% | - The significant decrease in revenue was primarily due to a reduction in gross floor area delivered[42](index=42&type=chunk) - The increase in recognized average selling price was mainly due to higher property prices in the cities where properties were delivered during the period[42](index=42&type=chunk) [Completed Properties Held for Sale](index=16&type=section&id=%E6%8C%81%E4%BD%9C%E5%87%BA%E5%94%AE%E5%B7%B2%E7%AB%A3%E5%B7%A5%E7%89%A9%E6%A5%AD) As of June 30, 2025, the amount of completed properties held for sale decreased by 21.2%, primarily due to a reduction in fair value caused by declining property market conditions | Indicator | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Completed Properties Held for Sale | 23,236.1 | 29,483.4 | -21.2% | - The decrease was primarily due to a reduction in the fair value of completed properties held for sale recognized during the period, caused by declining property market conditions[43](index=43&type=chunk) [Properties Under Development](index=17&type=section&id=%E9%96%8B%E7%99%BC%E4%B8%AD%E7%89%A9%E6%A5%AD) As of June 30, 2025, the amount of properties under development decreased by 1.6%, primarily due to a reduction in the number of development projects in the first half of the year | Indicator | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Properties Under Development | 32,848.9 | 33,373.4 | -1.6% | - The decrease was primarily due to a reduction in the number of development projects undertaken by the Group in the first half of **2025**[45](index=45&type=chunk) [Property Investment](index=17&type=section&id=%E7%89%A9%E6%A5%AD%E6%8A%95%E8%B3%87) The Group's property investment business saw an increase in rental income, mainly benefiting from improved occupancy rates of investment properties; as of the period-end, the Group held 11 investment properties, with 8 already leased out [Rental Income](index=17&type=section&id=%E7%A7%9F%E9%87%91%E6%94%B6%E5%85%A5) The Group's rental income increased by 10.8% during the period, primarily due to an improvement in the occupancy rate of investment properties | Indicator | Six Months Ended June 30, 2025 (RMB million) | Six Months Ended June 30, 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Rental Income | 45.3 | 40.8 | 10.8% | - The increase in rental income was due to an improvement in the occupancy rate of the Group's investment properties during the period[46](index=46&type=chunk) [Investment Properties](index=17&type=section&id=%E6%8A%95%E8%B3%87%E7%89%A9%E6%A5%AD) As of June 30, 2025, the Group held 11 investment properties with a total gross floor area of 684,476 sq.m., of which 8 properties with a total gross floor area of 429,429 sq.m. have commenced leasing - As of **June 30, 2025**, the Group held **11** investment properties with a total gross floor area of **684,476 sq.m.**[47](index=47&type=chunk) - Of these, **8** investment properties with a total gross floor area of **429,429 sq.m.** have commenced leasing[47](index=47&type=chunk) [Land Bank](index=17&type=section&id=%E5%9C%9F%E5%9C%B0%E5%84%B2%E5%82%99) The Group did not acquire any land during the period, and as of June 30, 2025, its total land bank gross floor area was 9.71 million sq.m. - The Group did not acquire any land during the period[48](index=48&type=chunk) - As of **June 30, 2025**, the Group, together with its joint ventures and associates, held a land bank with a total gross floor area of **9.71 million sq.m.**[48](index=48&type=chunk) [Financial Review](index=17&type=section&id=%E8%B2%A1%E5%8B%99%E5%9B%9E%E9%A1%A7) The Group's financial performance significantly deteriorated during the period, with substantial declines in revenue and gross profit, significant increases in various expenses (including impairment losses, exchange losses, and finance costs), leading to a widened loss for the period; share of loss of associates increased, and income tax credit decreased [Revenue](index=17&type=section&id=%E6%94%B6%E7%9B%8A) The Group's revenue significantly decreased by 81.2%, primarily due to a sharp decline in property sales revenue, while property leasing revenue saw a slight increase | Revenue Source | Six Months Ended June 30, 2025 (RMB thousand) | Six Months Ended June 30, 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Property Sales | 4,598,119 | 24,609,579 | -81.3% | | Property Leasing | 45,254 | 40,843 | 10.8% | | Management Consulting Services | 2,004 | 7,979 | -74.9% | | Total | 4,645,377 | 24,658,401 | -81.2% | [Cost of Sales](index=18&type=section&id=%E9%8A%B7%E5%94%AE%E6%88%90%E6%9C%AC) The Group's cost of sales significantly decreased by 80.7%, primarily due to a substantial reduction in the number of properties delivered during the period, leading to lower revenue | Indicator | Six Months Ended June 30, 2025 (RMB million) | Six Months Ended June 30, 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Cost of Sales | 4,513.7 | 23,344.3 | -80.7% | - The decrease in cost of sales was primarily due to a significant reduction in the number of properties delivered by the Group during the period, leading to lower revenue[52](index=52&type=chunk) [Gross Profit and Gross Profit Margin](index=18&type=section&id=%E6%AF%9B%E5%88%A9%E5%8F%8A%E6%AF%9B%E5%88%A9%E7%8E%87) The Group's gross profit significantly decreased by 90.0%, and gross profit margin fell by 2.5 percentage points to 2.8%, reflecting a notable deterioration in profitability | Indicator | Six Months Ended June 30, 2025 (RMB million) | Six Months Ended June 30, 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Gross Profit | 131.7 | 1,314.1 | -90.0% | | Gross Profit Margin | 2.8% | 5.3% | -2.5 percentage points | [Other Income and Gains](index=18&type=section&id=%E5%85%B6%E4%BB%96%E6%94%B6%E5%85%A5%E5%8F%8A%E6%94%B6%E7%9B%8A) The Group's other income and gains increased by 37.2%, primarily due to higher interest income, government grants, and forfeited deposits | Indicator | Six Months Ended June 30, 2025 (RMB million) | Six Months Ended June 30, 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Other Income and Gains | 20.3 | 14.8 | 37.2% | - The increase was primarily due to higher interest income, government grants, and forfeited deposits during the period[54](index=54&type=chunk) [Selling and Distribution Expenses](index=19&type=section&id=%E9%8A%B7%E5%94%AE%E5%8F%8A%E5%88%86%E9%8A%B7%E9%96%8B%E6%94%AF) The Group's selling and distribution expenses decreased by 17.7%, consistent with the declining trend in contracted sales during the period | Indicator | Six Months Ended June 30, 2025 (RMB million) | Six Months Ended June 30, 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Selling and Distribution Expenses | 397.7 | 483.4 | -17.7% | - The decrease was consistent with the declining trend in contracted sales during the period[55](index=55&type=chunk) [Administrative Expenses](index=19&type=section&id=%E8%A1%8C%E6%94%BF%E9%96%8B%E6%94%AF) The Group's administrative expenses decreased by 23.2%, mainly due to streamlining the corporate structure and strengthening cost control over administrative items | Indicator | Six Months Ended June 30, 2025 (RMB million) | Six Months Ended June 30, 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Administrative Expenses | 248.9 | 324.1 | -23.2% | - The decrease was mainly due to the Group streamlining its corporate structure and strengthening cost control over administrative items during the period[56](index=56&type=chunk) [Other Expenses](index=19&type=section&id=%E5%85%B6%E4%BB%96%E9%96%8B%E6%94%AF) The Group's other expenses significantly increased by 97.7%, primarily due to a substantial rise in impairment losses on properties under development and completed properties held for sale, as well as net exchange losses | Indicator | Six Months Ended June 30, 2025 (RMB million) | Six Months Ended June 30, 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Other Expenses | 2,495.2 | 1,262.0 | 97.7% | | Of which: Impairment Loss on Properties Under Development and Completed Properties Held for Sale | 1,971.5 | 1,198.5 | 64.5% | | Of which: Net Exchange Loss | 336.6 | 33.8 | 896.1% | [Net Impairment Loss on Financial Assets](index=19&type=section&id=%E9%87%91%E8%9E%8D%E8%B3%87%E7%94%A2%E6%B8%9B%E5%80%BC%E虧%E6%90%8D%E6%B7%A8%E9%A1%8D) Net impairment loss on financial assets significantly increased by 1,027.2%, due to a substantial decline in the overall fair value of financial assets | Indicator | Six Months Ended June 30, 2025 (RMB million) | Six Months Ended June 30, 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Net Impairment Loss on Financial Assets | 1,344.7 | 119.3 | 1027.2% | - The increase was due to a substantial decline in the overall fair value of financial assets[58](index=58&type=chunk) [Fair Value Loss on Investment Properties](index=19&type=section&id=%E6%8A%95%E8%B3%87%E7%89%A9%E6%A5%AD%E5%85%AC%E5%B9%B3%E5%80%BC%E虧%E6%90%8D) The Group's fair value loss on investment properties increased, primarily due to the adverse macroeconomic environment and decreased demand for commercial properties | Indicator | Six Months Ended June 30, 2025 (RMB million) | Six Months Ended June 30, 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Fair Value Loss on Investment Properties | 259.3 | 225.6 | 15.0% | - The increase in loss was primarily due to the adverse macroeconomic environment and decreased demand for commercial properties[59](index=59&type=chunk) [Finance Costs](index=19&type=section&id=%E8%9E%8D%E8%B3%87%E6%88%90%E6%9C%AC) The Group's finance costs increased by 24.4%, primarily due to a reduction in capitalized interest on borrowings for properties under construction during the period | Indicator | Six Months Ended June 30, 2025 (RMB million) | Six Months Ended June 30, 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Finance Costs | 1,946.3 | 1,564.7 | 24.4% | - The increase was primarily due to a reduction in capitalized interest on borrowings for properties under construction during the period, resulting from lower interest on borrowings[60](index=60&type=chunk) [Share of Loss of Joint Ventures and Associates](index=20&type=section&id=%E6%87%89%E4%BD%B5%E5%90%88%E7%87%9F%E4%BC%81%E6%A5%AD%E5%8F%8A%E8%81%AF%E7%87%9F%E5%85%AC%E5%8F%B8%E虧%E6%90%8D) The Group's share of loss of joint ventures decreased, but its share of loss of associates significantly increased, turning from profit to loss | Item | Six Months Ended June 30, 2025 (RMB million) | Six Months Ended June 30, 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Share of Loss of Joint Ventures | 0.6 | 17.3 | -96.5% | | Share of Loss/(Profit) of Associates | 228.8 | (21.9) | N/A (turned to loss) | - The decrease in share of loss of joint ventures was primarily due to reduced losses from projects delivered by joint ventures[61](index=61&type=chunk) - The increase in share of loss of associates was primarily due to increased losses from projects delivered by associates[61](index=61&type=chunk) [Income Tax Credit](index=20&type=section&id=%E6%89%80%E5%BE%97%E7%A8%85%E6%8A%B5%E5%85%8D) The Group's income tax credit for the period decreased, mainly due to a reversal of land appreciation tax | Indicator | Six Months Ended June 30, 2025 (RMB million) | Six Months Ended June 30, 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Income Tax Credit | 111.9 | 137.2 | -18.4% | - The change was mainly due to a reversal of land appreciation tax during the period[62](index=62&type=chunk) [Loss for the Period](index=20&type=section&id=%E6%9C%9F%E5%85%A7%E虧%E6%90%8D) The Group's loss for the period significantly widened to RMB 6,657.6 million | Indicator | Six Months Ended June 30, 2025 (RMB million) | Six Months Ended June 30, 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Loss for the Period | 6,657.6 | 2,508.4 | 165.4% | [Liquidity, Financial and Capital Resources](index=20&type=section&id=%E6%B5%81%E5%8B%95%E8%B3%87%E9%87%91%E3%80%81%E8%B2%A1%E5%8B%99%E5%8F%8A%E8%B3%87%E6%9C%AC%E8%B3%87%E6%BA%90) The Group's cash position deteriorated, total borrowings remained high, and it faced severe liquidity pressure; to address financial risks, the Group implemented various liquidity management and cost-saving measures and advanced its offshore debt management plan, with key financial ratios indicating ongoing pressure on liquidity and solvency [Cash Position](index=20&type=section&id=%E7%8F%BE%E9%87%91%E7%8B%80%E6%B3%81) As of June 30, 2025, the Group's total cash and bank balances decreased, with a significant decline in cash and cash equivalents | Indicator | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Total Cash and Bank Balances | 2,599.4 | 3,184.7 | -18.4% | | Of which: Cash and Cash Equivalents | 467.6 | 1,215.3 | -61.5% | | Of which: Restricted Cash | 2,076.7 | 1,905.5 | 9.0% | [Total Borrowings](index=21&type=section&id=%E5%80%9F%E6%AC%BE%E7%B8%BD%E9%A1%8D) The Group's total borrowings slightly decreased, but current borrowings still constitute the vast majority, indicating significant short-term repayment pressure | Borrowing Type | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Bank and Other Borrowings | 26,169,100 | 27,827,900 | -5.9% | | Corporate Bonds | 5,145,900 | 5,098,500 | 0.9% | | Senior Notes | 24,250,700 | 24,514,700 | -1.1% | | Perpetual Capital Securities | 1,406,800 | 1,412,700 | -0.4% | | Total | 56,972,581 | 58,853,779 | -3.2% | | Maturity | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Repayable Within One Year | 52,213,339 | 54,219,250 | -3.7% | | Repayable in the Second Year | 4,243,084 | 337,050 | 1159.0% | | Repayable in Three to Five Years | 736,741 | 4,297,479 | -82.8% | [Pledged Assets](index=22&type=section&id=%E8%B3%87%E7%94%A2%E6%8A%B5%E6%8A%BC) As of June 30, 2025, several of the Group's assets, including property, plant and equipment, right-of-use assets, investment properties, properties under development, and completed properties held for sale, were pledged as collateral for secured borrowings - As of **June 30, 2025**, property, plant and equipment with a carrying amount of **RMB 486.1 million**, right-of-use assets of **RMB 214.3 million**, investment properties of **RMB 7,174.4 million**, properties under development of **RMB 32,848.9 million**, and completed properties held for sale of **RMB 23,236.1 million** were pledged as collateral for the Group's secured borrowings[69](index=69&type=chunk) [Financial Risks](index=22&type=section&id=%E8%B2%A1%E5%8B%99%E9%A2%A8%E9%9A%AA) The Group primarily faces foreign exchange risk (RMB depreciation affecting dividend value for offshore shareholders) and interest rate risk (market interest rate changes impacting borrowings), with no hedging currently undertaken; declining presales and financing difficulties for Chinese property developers adversely affect the Group's financing capabilities, leading to the implementation of liquidity management and cost-saving measures and the advancement of an offshore overall debt management plan - The Group faces foreign exchange risk (RMB depreciation adversely affecting dividend value for offshore shareholders) and interest rate risk (market interest rate changes impacting bank and other borrowings), and currently does not engage in hedging activities[70](index=70&type=chunk) - Declining presales by Chinese property developers and a difficult financing environment adversely affect the Group's ability to obtain financing from capital markets and other channels[70](index=70&type=chunk) - The Group implemented a series of liquidity management and cost-saving measures, including seeking financing extensions and waivers, pursuing asset disposals, accelerating sales and cash recovery, streamlining corporate structure, and reducing non-core business operations and administrative expenses[71](index=71&type=chunk) - The Company has commenced work on an offshore overall management plan for its debt[71](index=71&type=chunk) [Key Financial Ratios](index=23&type=section&id=%E4%B8%BB%E8%A6%81%E8%B2%A1%E5%8B%99%E6%AF%94%E7%8E%87) Both the Group's current ratio and net debt-to-equity ratio indicate a continuous deterioration in financial position | Indicator | June 30, 2025 | December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Current Ratio | 0.83 | 0.88 | Decreased | | Net Debt to Equity Ratio | -648.3% | -2,441.9% | Improved (negative narrowed) | [Contingent Liabilities](index=23&type=section&id=%E6%88%96%E7%84%B6%E8%B2%A0%E5%82%B5) The Group's contingent liabilities primarily include mortgage guarantees and other financial guarantees, with mortgage guarantee amounts increasing; the Board confirmed no significant buyer defaults were encountered [Mortgage Guarantees](index=23&type=section&id=%E6%8C%89%E6%8F%AD%E6%93%94%E4%BF%9D) The Group provides guarantees for customers' mortgage loans, with significant contingent liabilities amounting to RMB 21,564.5 million as of June 30, 2025, an increase from year-end 2024; the directors confirmed no buyer defaults that would materially adversely affect the financial position were encountered | Indicator | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Mortgage Guarantee Contingent Liabilities | 21,564.5 | 19,760.2 | 9.1% | - The directors confirmed that the Group has not encountered buyer defaults on its mortgage guarantees that would collectively have a material adverse effect on the Group's financial position and operating results[73](index=73&type=chunk) [Other Financial Guarantees](index=23&type=section&id=%E5%85%B6%E4%BB%96%E9%87%91%E8%9E%8D%E6%93%94%E4%BF%9D) As of June 30, 2025, the Group's guarantees for borrowings by associated companies and third parties amounted to RMB 2,538.0 million, a decrease from year-end 2024 | Indicator | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Other Financial Guarantees | 2,538.0 | 2,760.5 | -8.0% | [Legal Contingencies](index=23&type=section&id=%E6%B3%95%E5%BE%8B%E6%88%96%E7%84%B6%E4%BA%8B%E4%BB%B6) The Group believes that, as of the date of this announcement, liabilities arising from litigation and other legal proceedings in the ordinary course of business will not have a material adverse effect on the Group's business, financial position, or operating results - The Group believes that, as of the date of this announcement, liabilities arising from litigation and other legal proceedings in the ordinary course of business will not have a material adverse effect on the Group's business, financial position, or operating results[75](index=75&type=chunk) [Commitments](index=24&type=section&id=%E6%89%BF%E6%93%94) The Group's capital commitments contracted but not yet provided for amounted to RMB 6,160.2 million as of June 30, 2025, a decrease from year-end 2024 | Indicator | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Capital Commitments | 6,160.2 | 7,955.2 | -22.6% | [Off-balance Sheet Commitments and Arrangements](index=24&type=section&id=%E8%B3%87%E7%94%A2%E8%B2%A0%E5%82%B5%E8%A1%A8%E5%A4%96%E6%89%BF%E6%93%94%E5%8F%8A%E5%AE%89%E6%8E%92) Except for disclosed contingent liabilities and matters in the notes to the consolidated financial statements, the Group had no other significant off-balance sheet commitments and arrangements as of June 30, 2025 - Except for disclosed contingent liabilities and matters disclosed in the notes to the consolidated financial statements, the Group had no outstanding loan capital, bank overdrafts, loans, debt securities, borrowings or other similar indebtedness, acceptance credits (other than normal trade bills), acceptance credits, bonds, mortgages, charges, finance leases or hire purchase commitments, guarantees or other material contingent liabilities issued or agreed to be issued as of **June 30, 2025**[77](index=77&type=chunk) [Non-payment of Principal, Interest and/or Distributions on Certain Senior Notes and Perpetual Capital Securities](index=24&type=section&id=%E6%9C%89%E9%97%9C%E6%9C%AA%E6%94%AF%E4%BB%98%E8%8B%A5%E5%B9%B2%E5%84%AA%E5%85%88%E7%A5%A8%E6%93%9A%E5%8F%8A%E6%B0%B8%E7%BA%8C%E8%B3%87%E6%9C%AC%E8%AD%89%E5%88%B8%E6%9C%AC%E9%87%91%E3%80%81%E5%88%A9%E6%81%AF%E5%8F%8A%E2%95%B1%E6%88%96%E5%88%86%E6%B4%BE) As of the date of this announcement, the Company failed to pay the overdue principal, distributions, and/or interest on multiple senior notes and perpetual capital securities, constituting events of default; however, the Company has not received any notices leading to acceleration of debt maturity - The Company failed to pay the overdue principal and/or interest on multiple senior notes, including RMB notes due **June 2022** with **7.125%** interest, notes due **April 2022** with **5.98%** interest, notes due **September 2023** with **8.3%** interest, notes due **March 2024** with **8.35%** interest, notes due **April 2024** with **7.875%** interest, notes due **September 2024** with **7.1%** interest, notes due **February 2025** with **7.35%** interest, notes due **May 2023** with **9.15%** interest, notes due **August 2022** with **8.7%** interest, notes due **January 2026** with **6.63%** interest, notes due **August 2026** with **6.7%** interest, notes due **September 2022** with **6.50%** interest, notes due **March 2023** with **8.0%** interest, and RMB notes due **March 2023** with **8.0%** interest[79](index=79&type=chunk)[82](index=82&type=chunk)[83](index=83&type=chunk)[84](index=84&type=chunk) - The Company failed to pay the overdue principal and distributions on perpetual capital securities[84](index=84&type=chunk) - The non-payment constituted events of default under the respective debt securities[81](index=81&type=chunk)[82](index=82&type=chunk) - As of **June 30, 2025**, and the date of this announcement, the Company had not received any acceleration notices due to the non-payment of the relevant perpetual capital securities and/or senior notes[85](index=85&type=chunk) [Offshore Overall Debt Management Plan](index=26&type=section&id=%E5%A2%83%E5%A4%96%E6%95%B4%E9%AB%94%E5%82%B5%E5%8B%99%E7%AE%A1%E7%90%86%E6%96%B9%E6%A1%88) The Company will make further announcements regarding the progress of the offshore overall debt management plan as appropriate - The Company will make further announcements regarding the progress of the offshore overall debt management plan as appropriate[87](index=87&type=chunk) [Material Investments Held by the Group](index=26&type=section&id=%E6%9C%AC%E9%9B%86%E5%9C%98%E6%89%80%E6%8C%81%E6%9C%89%E9%87%8D%E5%A4%A7%E6%8A%95%E8%B3%87) The Group held no material investments during the period - The Group held no material investments during the period[88](index=88&type=chunk) [Plans for Material Investments and Capital Assets](index=26&type=section&id=%E6%9C%AA%E4%BE%86%E9%87%8D%E5%A4%A7%E6%8A%95%E8%B3%87%E5%8F%8A%E8%B3%87%E6%9C%AC%E8%B3%87%E7%94%A2%E8%A8%88%E5%8A%83) The Group currently has no plans for any material investments or acquisitions of capital assets - The Group currently has no plans for any material investments or acquisitions of capital assets[89](index=89&type=chunk) [Employees and Remuneration Policies](index=26&type=section&id=%E5%83%B1%E5%93%A1%E5%8F%8A%E8%96%AA%E9%85%AC%E6%94%BF%E7%AD%96) As of June 30, 2025, the Group's employee count decreased to 574; the Group values talent, provides systematic training, competitive remuneration, and participates in social insurance and mandatory provident fund schemes | Indicator | June 30, 2025 | December 31, 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Number of Employees | 574 | 709 | -19.18% | - The Group recruits skilled and qualified personnel through various channels, valuing employees who are loyal to their work, identify with the corporate culture, and possess relevant work experience[90](index=90&type=chunk) - The Group offers competitive remuneration packages, including basic salary, discretionary bonuses, and performance-based pay, and has adopted a share option scheme[90](index=90&type=chunk) - The Group participates in social insurance contribution schemes and a retirement benefits scheme for its Hong Kong employees[91](index=91&type=chunk) [Events After the Reporting Period](index=27&type=section&id=%E6%9C%9F%E5%BE%8C%E4%BA%8B%E4%BB%B6) Except for events disclosed in the 'Offshore Overall Debt Management Plan' section, the Group had no other material events from June 30, 2025, up to the date of this announcement - Except for events disclosed in the 'Offshore Overall Debt Management Plan' section, the Group had no other material events from **June 30, 2025**, up to the date of this announcement[92](index=92&type=chunk) [Continuing Disclosure Obligations under the Listing Rules](index=27&type=section&id=%E6%A0%B9%E6%93%9A%E4%B8%8A%E5%B8%82%E8%A6%8F%E5%89%87%E7%9A%84%E6%8C%81%E7%BA%8C%E6%8A%AB%E9%9C%B2%E8%B2%AC%E4%BB%BB) The Company failed to pay the overdue principal and/or interest on 2019 and 2020 loan facilities, constituting events of default; these agreements contain commitment revocation clauses related to major shareholder equity and management control, and the Company is working on an offshore overall debt management plan - The Company failed to pay the overdue principal and/or interest on the **2019** loan facility (**HKD 234,000,000** and **USD 90,000,000**) and the **2020** loan facility (**HKD 273,000,000** and **USD 106,000,000**), constituting events of default[93](index=93&type=chunk)[95](index=95&type=chunk)[97](index=97&type=chunk) - The **2019** financing agreement stipulates that if Mr. Ou Zongrong, Mr. Ou Guoqiang, and Mr. Ou Guowei collectively cease to directly or indirectly own at least **51%** beneficial equity interest (with at least **51%** voting rights) in the Company, or cease to be the single largest shareholder, or cease to have management control, the loan commitments may be revoked and all outstanding amounts become immediately due and payable[94](index=94&type=chunk) - The **2020** financing agreement stipulates that if the relevant parties collectively cease to directly or indirectly own at least **51%** beneficial equity interest (with at least **51%** voting rights) in the Company, or cease to be the single largest shareholder, or cease to have management control, and/or the Company's chairman is not Mr. Huang Xianzhi, Mr. Liu Weiliang, or Mr. Chen Weijian or any relevant person, the loan commitments may be revoked and all outstanding amounts become immediately due and payable[96](index=96&type=chunk) - The Company is working on an offshore overall debt management plan[97](index=97&type=chunk) [Other Information](index=29&type=section&id=%E5%85%B6%E4%BB%96%E8%B3%87%E6%96%99) [Compliance with Corporate Governance Code](index=29&type=section&id=%E9%81%B5%E5%AE%88%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB%E5%AE%88%E5%89%87) The Company is committed to high standards of corporate governance, having adopted the Corporate Governance Code set out in Appendix C1 of the Listing Rules as its foundation, and complied with all applicable code provisions during the period - The Company has adopted the Corporate Governance Code set out in Appendix C1 of the Listing Rules as the basis for its corporate governance practices[98](index=98&type=chunk) - To the best of the directors' knowledge, the Company has complied with all applicable code provisions in Part **2** of the Corporate Governance Code during the period[98](index=98&type=chunk) [Standard Code for Securities Transactions by Directors](index=29&type=section&id=%E8%91%A3%E4%BA%8B%E9%80%B2%E8%A1%8C%E8%AD%89%E5%88%B8%E4%BA%A4%E6%98%93%E7%9A%84%E6%A8%99%E6%BA%96%E5%AE%88%E5%89%87) The Company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers set out in Appendix C3 of the Listing Rules, and all directors confirmed compliance with the code during the period - The Company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers set out in Appendix C3 of the Listing Rules[99](index=99&type=chunk) - Following specific inquiries by the Company, all directors confirmed their compliance with the Model Code during the period[99](index=99&type=chunk) [Purchase, Sale or Redemption of the Group's Listed Securities](index=29&type=section&id=%E8%B3%BC%E8%B2%B7%E3%80%81%E5%87%BA%E5%94%AE%E6%88%96%E8%B4%96%E5%9B%9E%E6%9C%AC%E9%9B%86%E5%9C%98%E4%B8%8A%E5%B8%82%E8%AD%89%E5%88%B8) Except as disclosed in this announcement, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Group's listed securities during the period, and the Company held no treasury shares as of June 30, 2025 - Except as disclosed in this announcement, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Group's listed securities during the period[100](index=100&type=chunk) - As of **June 30, 2025**, the Company held no treasury shares[100](index=100&type=chunk) [Interim Dividends](index=29&type=section&id=%E4%B8%AD%E6%9C%9F%E8%82%A1%E6%81%AF) The Board does not recommend the payment of any interim dividend for the period - The Board does not recommend the payment of any interim dividend for the period[101](index=101&type=chunk) [Audit Committee](index=29&type=section&id=%E5%AF%A9%E6%A0%B8%E5%A7%94%E5%93%A1%E6%9C%83) The Company's Audit Committee comprises three independent non-executive directors, with Ms. Yang Wing Yee as Chairperson; its primary responsibilities include recommending external auditors, reviewing accounting policies and financial position, overseeing internal audit and control structures, and examining risk management; the Committee has reviewed the unaudited condensed consolidated interim results for the current period - The Audit Committee comprises three members, namely Ms. Yang Wing Yee, Mr. Wang Chuanxu, and Mr. Xie Jun, each being an independent non-executive director[102](index=102&type=chunk) - Ms. Yang Wing Yee was appointed as the Chairperson of the Audit Committee and is an independent non-executive director possessing the appropriate professional qualifications as required by Rule **3.10(2)** of the Listing Rules[102](index=102&type=chunk) - The primary responsibilities of the Audit Committee include making recommendations on the appointment and removal of the Company's external auditors; reviewing the Company's accounting policies and financial position; examining and overseeing the Company's internal audit function and internal control structure; and reviewing and monitoring the Company's risk management[102](index=102&type=chunk) - The Company's unaudited condensed consolidated interim results and interim report for the six months ended **June 30, 2025**, were reviewed by the Audit Committee before being presented to the Board for approval[103](index=103&type=chunk) [Publication of Interim Results and Interim Report on HKEX and Company Website](index=30&type=section&id=%E6%96%BC%E8%81%AF%E4%BA%A4%E6%89%80%E5%8F%8A%E6%9C%AC%E5%85%AC%E5%8F%B8%E7%B6%B2%E7%AB%99%E5%88%8A%E7%99%BB%E4%B8%AD%E6%9C%9F%E6%A5%AD%E7%B8%BE%E5%8F%8A%E4%B8%AD%E6%9C%9F%E5%A0%B1%E5%91%8A) The interim results announcement has been published on the HKEX website and the Company's website, and the interim report will be published in due course - The interim results announcement is published on the HKEX website (**www.hkexnews.hk**) and the Company's website (**www.zhenrodc.com**)[104](index=104&type=chunk) - The interim report will be published on the HKEX and the Company's website in due course[104](index=104&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。 CMON LIMITED （於開曼群島註冊成立的有限公司） （股份代號：1792） 截至二零二五年六月三十日止六個月 中期業績公告 中期業績 CMON Limited（「本公司」）董事（「董事」）會（「董事會」）欣然宣佈本公司及其附屬公司（統 稱「本集團」）截至二零二五年六月三十日止六個月的未經審核簡明綜合財務業績，連同 截至二零二四年六月三十日止六個月的比較數字如下： 簡明綜合損益及其他全面收益表 截至二零二五年六月三十日止六個月 | | | | 截至六月三十日止六個月 | | | --- | --- | --- | --- | --- | | | | 二零二五年 | | 二零二四年 | | | | （未經審核） | | （未經審核） | | | 附註 | 美元 | | 美元 | | 收益 | 2、3 | 3,433,655 | | 15,916,225 | | 銷售成本 | | (4,196,326) ...

[Performance Highlights](index=1&type=section&id=Performance%20Highlights) The Group announced a **7.78% increase in revenue** and a **3.90% increase in profit attributable to equity holders** for the first half of 2025, alongside an interim dividend declaration 2025 H1 Performance Highlights (RMB Thousand) | Indicator | 2025 | 2024 (Restated) | Difference | | :--- | :--- | :--- | :--- | | Revenue | 109,099,344 | 101,224,495 | 7,874,849 | | Profit Attributable to Equity Holders of the Company | 17,527,589 | 16,870,109 | 657,480 | | Basic Earnings Per Share (RMB) | 1.12 | 1.05 | 0.07 | - The Board is pleased to announce an interim dividend of **RMB 0.56 per ordinary share (tax inclusive)**[3](index=3&type=chunk) [Unaudited Interim Condensed Consolidated Financial Information](index=2&type=section&id=Unaudited%20Interim%20Condensed%20Consolidated%20Financial%20Information) This section presents the Group's unaudited interim condensed consolidated financial statements, including the statement of profit or loss, comprehensive income, and financial position, for the period ended June 30, 2025 [Unaudited Interim Condensed Consolidated Statement of Profit or Loss](index=2&type=section&id=Unaudited%20Interim%20Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss) For the six months ended June 30, 2025, the Group's revenue increased by **7.78%** to **RMB 109,099,344 thousand**, with significant growth in other income driving operating profit and profit attributable to equity holders 2025 H1 Consolidated Statement of Profit or Loss Key Data (RMB Thousand) | Indicator | 2025 | 2024 (Restated) | | :--- | :--- | :--- | | Revenue | 109,099,344 | 101,224,495 | | Cost of Services | (86,670,370) | (78,059,101) | | Gross Profit | 22,428,974 | 23,165,394 | | Other Income | 1,852,627 | 593,853 | | Operating Profit | 19,718,615 | 19,057,634 | | Profit Attributable to Equity Holders of the Company | 17,527,589 | 16,870,109 | | Basic Earnings Per Share (RMB) | 1.12 | 1.05 | [Unaudited Interim Condensed Consolidated Statement of Comprehensive Income](index=3&type=section&id=Unaudited%20Interim%20Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) For the six months ended June 30, 2025, the Group's total comprehensive income for the period was **RMB 20,316,179 thousand**, with a shift in other comprehensive income from joint ventures and associates from loss to gain, while exchange differences moved from gain to loss 2025 H1 Consolidated Statement of Comprehensive Income Key Data (RMB Thousand) | Indicator | 2025 | 2024 (Restated) | | :--- | :--- | :--- | | Profit for the Period | 20,196,169 | 19,255,613 | | Share of Other Comprehensive Income/(Loss) of Joint Ventures and Associates, Net | 135,489 | (1,520) | | Exchange Differences | (1,227) | 465,805 | | Other Comprehensive Income for the Period, Net of Tax | 120,010 | 509,455 | | Total Comprehensive Income for the Period | 20,316,179 | 19,765,068 | | Total Comprehensive Income for the Period Attributable to Equity Holders of the Company | 17,488,936 | 17,305,657 | [Unaudited Interim Condensed Consolidated Statement of Financial Position](index=4&type=section&id=Unaudited%20Interim%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the Group's total assets slightly increased to **RMB 498,497,058 thousand**, with increases in property, plant and equipment, right-of-use assets, and investments in associates, while cash and cash equivalents decreased Consolidated Statement of Financial Position Key Data as of June 30, 2025 (RMB Thousand) | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Assets | 498,497,058 | 497,472,214 | | Total Non-current Assets | 303,132,242 | 291,355,237 | | Total Current Assets | 195,364,816 | 206,116,977 | | Total Equity | 282,893,627 | 285,058,777 | | Total Liabilities | 215,603,431 | 212,413,437 | | Net Current Assets | 69,922,644 | 83,326,274 | - Property, plant and equipment increased from **RMB 151,162,582 thousand** to **RMB 159,871,660 thousand**, and right-of-use assets increased from **RMB 43,951,780 thousand** to **RMB 45,870,987 thousand**[8](index=8&type=chunk) - Cash and cash equivalents decreased from **RMB 184,189,078 thousand** to **RMB 169,142,909 thousand**[8](index=8&type=chunk) [Notes to the Unaudited Interim Condensed Consolidated Financial Information](index=6&type=section&id=Notes%20to%20the%20Unaudited%20Interim%20Condensed%20Consolidated%20Financial%20Information) This section provides detailed notes to the unaudited interim condensed consolidated financial information, covering general information, basis of preparation, accounting policy changes, segment reporting, and other financial items [1 General Information](index=6&type=section&id=1%20General%20Information) The Company, established in China in 2005, is listed on the HKEX and SSE, primarily engaged in global container shipping and terminal management, with its interim financial information reviewed but unaudited - The company was incorporated in China on March 3, 2005, with H shares listed on the HKEX and A shares on the SSE[11](index=11&type=chunk) - The Group's business includes providing extensive global container shipping, container terminal management, and operation services[11](index=11&type=chunk) - The interim financial information was approved for publication by the Board on August 28, 2025, and has been reviewed but not audited[12](index=12&type=chunk)[13](index=13&type=chunk) [2 Basis of Preparation](index=6&type=section&id=2%20Basis%20of%20Preparation) The interim financial information is prepared in accordance with HKAS 34 and Listing Rules, on a going concern basis using historical cost, with certain financial assets and liabilities measured at fair value, and 2024 comparative data restated due to a common control business combination - The interim financial information is prepared in accordance with HKAS 34 "Interim Financial Reporting" issued by the HKICPA and the applicable disclosure requirements of Appendix D2 to the Listing Rules of The Stock Exchange of Hong Kong Limited[14](index=14&type=chunk) - The interim financial information is prepared on a going concern basis and under the historical cost convention, except for certain financial assets and liabilities (including derivative instruments) which are measured at fair value[15](index=15&type=chunk)[16](index=16&type=chunk) - In the second half of 2024, a subsidiary of the Group, COSCO SHIPPING Lines (Europe) GmbH, entered into a concerted action agreement with COSCO SHIPPING Logistics (Hong Kong) Co., Limited and COSCO SHIPPING (Europe) GmbH, which is regarded as a common control business combination, and comparative data has been restated[15](index=15&type=chunk) [3 Changes in Accounting Policies](index=7&type=section&id=3%20Changes%20in%20Accounting%20Policies) The Group adopted HKAS 21 (Amendment) "Lack of Exchangeability" in the 2025 interim period with no significant impact, while evaluating new standards, including HKFRS 18 "Presentation and Disclosure in Financial Statements," which may affect financial statement presentation [3.1 Adoption of New and Revised Standards](index=7&type=section&id=3.1%20Adoption%20of%20New%20and%20Revised%20Standards) The Group adopted HKAS 21 (Amendment) "Lack of Exchangeability," effective January 1, 2025, during the 2025 interim period, which had no significant impact on the results or financial position for the current or prior periods - The Group adopted HKAS 21 (Amendment) "Lack of Exchangeability" during the 2025 interim period, effective for financial years beginning on or after January 1, 2025[18](index=18&type=chunk) - The adoption of the above amendments to existing standards had no significant impact on the results and financial position for the current and prior periods and/or the disclosures contained in these condensed consolidated financial statements[18](index=18&type=chunk) [3.2 New Standards and Amendments to Existing Standards and Interpretations Not Yet Effective](index=7&type=section&id=3.2%20New%20Standards%20and%20Amendments%20to%20Existing%20Standards%20and%20Interpretations%20Not%20Yet%20Effective) The Group has not early adopted several new standards and amendments, including HKFRS 9, 7, and 18, with only HKFRS 18 expected to potentially impact the presentation of the consolidated financial statements - The Group has not early adopted new standards not yet effective, including HKFRS 9 and 7 (Amendments), Annual Improvements to HKFRS Accounting Standards – Volume 11, and HKFRS 18[20](index=20&type=chunk) - Except for the adoption of HKFRS 18, which may affect the presentation of the Group's consolidated financial statements, the adoption of the above amendments and improvements to existing standards and interpretations is not expected to have a significant impact on the Group's consolidated financial statements[20](index=20&type=chunk) [4 Revenue and Segment Information](index=8&type=section&id=4%20Revenue%20and%20Segment%20Information) The Group's operating segments include container shipping, terminal, and corporate and other businesses, with container shipping contributing the majority of revenue and operating profit in H1 2025, and revenue geographically presented by trade lane for container shipping and by operating location for terminals [4.1 Operating Segments](index=8&type=section&id=4.1%20Operating%20Segments) The Group's operating segments, as reported to the chief operating decision maker, include container shipping, terminal, and corporate and other businesses, with container shipping generating **RMB 104,803,089 thousand** in total revenue and **RMB 18,716,607 thousand** in segment operating profit in H1 2025, making it the primary source of revenue and profit - The Group's operating segments include container shipping business, terminal business, and corporate and other businesses, primarily comprising investment holding, management services, and financing[24](index=24&type=chunk) - 2025 H1 Segment Revenue and Operating Profit (RMB Thousand) | Indicator | Container Shipping Business | Terminal Business | Corporate and Other Businesses | Inter-segment Eliminations | Total | | :--- | :--- | :--- | :--- | :--- | :--- | | Total Revenue | 104,803,089 | 5,842,108 | – | (1,545,853) | 109,099,344 | | Segment Operating Profit | 18,716,607 | 981,891 | 6,020,117 | (6,000,000) | 19,718,615 | [4.2 Geographical Information](index=11&type=section&id=4.2%20Geographical%20Information) The Group's revenue and non-current assets are presented geographically, with container shipping revenue derived from major global trade lanes and terminal revenue by operating location, while container vessels and containers are unallocated due to their global mobility [4.2.1 Revenue](index=11&type=section&id=4.2.1%20Revenue) In H1 2025, external revenue from container shipping primarily originated from the Americas (**RMB 28,697,465 thousand**), Asia-Pacific (**RMB 27,098,395 thousand**), and Europe (**RMB 21,025,603 thousand**), while terminal business external revenue mainly came from Europe (**RMB 2,121,180 thousand**) and Mainland China (**RMB 1,883,758 thousand**) - Revenue from container shipping business is classified by trade lane, and revenue from terminal operations is presented by the geographical area where the business operates[27](index=27&type=chunk)[28](index=28&type=chunk) - 2025 H1 Container Shipping Business External Revenue (RMB Thousand) | Region | External Revenue | | :--- | :--- | | Americas | 28,697,465 | | Europe | 21,025,603 | | Asia-Pacific | 27,098,395 | | Mainland China | 11,945,964 | | Other International Regions | 15,991,541 | | **Total** | **104,758,968** | - 2025 H1 Terminal Business External Revenue (RMB Thousand) | Region | External Revenue | | :--- | :--- | | Mainland China | 1,883,758 | | Europe | 2,121,180 | | Asia-Pacific | 201,579 | | Other International Regions | 133,859 | | **Total** | **4,340,376** | [4.2.2 Non-current Assets](index=12&type=section&id=4.2.2%20Non-current%20Assets) Of the Group's non-current assets, **RMB 163,917,099 thousand** is unallocated, primarily due to the global deployment of container vessels and containers, while Mainland China accounts for the largest portion of the remaining regional non-current assets at **RMB 92,822,840 thousand** - Container vessels and containers (included in property, plant and equipment and right-of-use assets) are primarily used for cargo shipping across various regions globally, thus their locations cannot be reported by region and are presented as unallocated non-current assets[32](index=32&type=chunk) - Non-current Assets Geographical Distribution as of June 30, 2025 (RMB Thousand) | Category | June 30, 2025 | | :--- | :--- | | Unallocated | 163,917,099 | | Remaining Assets – Mainland China | 92,822,840 | | Remaining Assets – Regions Outside Mainland China | 39,052,359 | [5 Other Income and Expenses](index=13&type=section&id=5%20Other%20Income%20and%20Expenses) In H1 2025, the Group's other income significantly increased by **211.97%** to **RMB 1,852,627 thousand**, driven by higher dividend income from financial assets measured at fair value through other comprehensive income, government grants, and exchange gains, while other expenses decreased by **28.36%** to **RMB 29,169 thousand** 2025 H1 Other Income and Expenses (RMB Thousand) | Item | 2025 | 2024 (Restated) | | :--- | :--- | :--- | | Dividend income from financial assets measured at fair value through other comprehensive income | 163,985 | 24,961 | | Government grants | 881,421 | 148,932 | | Exchange gains | 653,273 | 259,361 | | Total other income | 1,852,627 | 593,853 | | Total other expenses | (29,169) | (40,716) | - Other income significantly increased by **211.97%** year-on-year, primarily due to higher net exchange gains and dividend income from financial assets measured at fair value through other comprehensive income[35](index=35&type=chunk)[71](index=71&type=chunk) - Other expenses decreased by **28.36%** year-on-year[35](index=35&type=chunk)[71](index=71&type=chunk) [6 Finance Income and Costs](index=14&type=section&id=6%20Finance%20Income%20and%20Costs) In H1 2025, the Group's net finance income slightly increased to **RMB 1,444,518 thousand**, with finance income decreasing by **2.66%** to **RMB 3,009,276 thousand** due to lower deposit interest rates, and finance costs decreasing by **6.00%** to **RMB 1,564,758 thousand** due to lower loan interest rates 2025 H1 Finance Income and Costs (RMB Thousand) | Item | 2025 | 2024 (Restated) | | :--- | :--- | :--- | | Total finance income | 3,009,276 | 3,091,382 | | Total finance costs | (1,564,758) | (1,664,637) | | Net finance income | 1,444,518 | 1,426,745 | - Finance income decreased by **2.66%** year-on-year, mainly due to a decrease in interest income as deposit rates declined[36](index=36&type=chunk)[73](index=73&type=chunk) - Finance costs decreased by **6.00%** year-on-year, mainly due to a decrease in interest expenses as loan rates declined[36](index=36&type=chunk)[74](index=74&type=chunk) [7 Income Tax Expense](index=15&type=section&id=7%20Income%20Tax%20Expense) In H1 2025, the Group's income tax expense slightly decreased by **0.24%** to **RMB 3,795,823 thousand**, with tax provisions based on prevailing rates ranging from **5% to 39%** in the countries of operation, including a **25%** statutory corporate income tax rate in China and **16.5%** for Hong Kong profits tax 2025 H1 Income Tax Expense (RMB Thousand) | Item | 2025 | 2024 (Restated) | | :--- | :--- | :--- | | Current income tax | 3,611,895 | 3,398,160 | | Deferred income tax | 183,928 | 406,782 | | Total income tax expense | 3,795,823 | 3,804,942 | - Income tax expense decreased by **0.24%** year-on-year[37](index=37&type=chunk)[76](index=76&type=chunk) - Tax is provided at the prevailing relevant tax rates in the countries where the Group operates, ranging from **5% to 39%**, with the statutory corporate income tax rate in China being **25%** and Hong Kong profits tax at **16.5%**[38](index=38&type=chunk) [8 Dividends](index=15&type=section&id=8%20Dividends) The Board approved an interim profit distribution plan on August 28, 2025, to distribute a cash dividend of **RMB 0.56 per share (tax inclusive)** to all shareholders, totaling approximately **RMB 8.674 billion**, representing about **50%** of the net profit attributable to listed company shareholders for H1 2025, which is higher than the **RMB 0.52 per share** in H1 2024 - The Board announced an interim dividend of **RMB 0.56 per ordinary share (tax inclusive)** for 2025, totaling approximately **RMB 8.674 billion** based on the total share capital[39](index=39&type=chunk) - This dividend amount represents approximately **50%** of the Company's net profit attributable to listed company shareholders for H1 2025[39](index=39&type=chunk) - In H1 2024, a cash dividend of **RMB 0.52 per share (tax inclusive)** was distributed, totaling approximately **RMB 8.3 billion**, representing about **50%** of the net profit attributable to listed company shareholders for H1 2024[39](index=39&type=chunk) [9 Earnings Per Share](index=16&type=section&id=9%20Earnings%20Per%20Share) In H1 2025, both basic and diluted earnings per share attributable to equity holders of the Company were **RMB 1.12**, an increase from **RMB 1.05** in the corresponding period of 2024 [9.1 Basic](index=16&type=section&id=9.1%20Basic) Basic earnings per share is calculated by dividing the profit attributable to equity holders of the Company by the weighted average number of ordinary shares outstanding during the period, amounting to **RMB 1.12** for H1 2025 2025 H1 Basic Earnings Per Share (RMB) | Indicator | 2025 | 2024 (Restated) | | :--- | :--- | :--- | | Profit Attributable to Equity Holders of the Company | 17,527,589,000 | 16,870,109,000 | | Weighted Average Number of Ordinary Shares | 15,634,868,388 | 16,023,215,797 | | Basic Earnings Per Share | 1.12 | 1.05 | [9.2 Diluted](index=16&type=section&id=9.2%20Diluted) Diluted earnings per share is calculated by adjusting the profit attributable to equity holders and the weighted average number of ordinary shares for the effect of all dilutive potential ordinary shares, amounting to **RMB 1.12** for H1 2025 2025 H1 Diluted Earnings Per Share (RMB) | Indicator | 2025 | 2024 (Restated) | | :--- | :--- | :--- | | Profit Attributable to Equity Holders of the Company | 17,527,589,000 | 16,870,109,000 | | Weighted Average Number of Ordinary Shares (Adjusted) | 15,638,205,569 | 16,029,729,330 | | Diluted Earnings Per Share | 1.12 | 1.05 | [10 Trade and Other Receivables and Contract Assets](index=17&type=section&id=10%20Trade%20and%20Other%20Receivables%20and%20Contract%20Assets) As of June 30, 2025, the Group's total trade and other receivables and contract assets increased to **RMB 17,424,620 thousand**, with trade receivables primarily from third parties and related parties, mostly due within one year, and prepayments, deposits, and other receivables also showing significant growth Trade and Other Receivables and Contract Assets as of June 30, 2025 (RMB Thousand) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Trade receivables | 10,223,420 | 8,759,225 | | Bills receivable | 122,484 | 149,858 | | Contract assets | 206,043 | 239,795 | | Prepayments, deposits and other receivables | 6,872,673 | 5,348,566 | | **Total** | **17,424,620** | **14,497,444** | - The general credit period for trade receivables is within **90 days**, primarily including shipping-related receivables[46](index=46&type=chunk) - Net trade receivables, bills receivable, and contract assets amounted to **RMB 10,551,947 thousand** as of June 30, 2025, with the largest proportion due within one year[46](index=46&type=chunk) [11 Trade and Other Payables and Contract Liabilities](index=19&type=section&id=11%20Trade%20and%20Other%20Payables%20and%20Contract%20Liabilities) As of June 30, 2025, the Group's total trade and other payables and contract liabilities slightly increased to **RMB 105,500,871 thousand**, with accrued expenses being the largest component, and trade payables and bills payable primarily from third parties and fellow subsidiaries, mostly due within one year Trade and Other Payables and Contract Liabilities as of June 30, 2025 (RMB Thousand) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Trade payables and bills payable | 16,784,391 | 15,569,001 | | Accrued expenses | 69,014,733 | 70,469,951 | | Other payables | 19,193,426 | 17,583,381 | | Contract liabilities | 508,321 | 646,722 | | **Total** | **105,500,871** | **104,269,055** | - An analysis of trade payables and bills payable by aging shows that the largest proportion, **RMB 16,744,006 thousand**, is due within one year[47](index=47&type=chunk) [12 Provisions and Other Liabilities](index=20&type=section&id=12%20Provisions%20and%20Other%20Liabilities) As of June 30, 2025, the Group's total provisions and other liabilities amounted to **RMB 6,977,523 thousand**, including a significant onerous contract provision of **RMB 6,419,439 thousand** related to OOCL's minimum throughput commitment at Long Beach Container Terminal, reflecting high uncertainties from the US economic environment and tariff policies Provisions and Other Liabilities as of June 30, 2025 (RMB Thousand) | Item | Current Portion | Non-current Portion | Total | | :--- | :--- | :--- | :--- | | One-off housing subsidy provision | – | 20,612 | 20,612 | | Onerous contract provision | – | 6,419,439 | 6,419,439 | | Deferred income and others | 51,392 | 486,080 | 537,472 | | **Total** | **51,392** | **6,926,131** | **6,977,523** | - The onerous contract provision is primarily related to OOCL's minimum vessel throughput commitment at Long Beach Container Terminal, due to high uncertainties arising from the US economic environment, tariff policies, and other targeted policies[48](index=48&type=chunk)[49](index=49&type=chunk) [13 Events After the Reporting Period](index=20&type=section&id=13%20Events%20After%20the%20Reporting%20Period) On August 28, 2025, the Board announced an interim dividend of **RMB 0.56 per ordinary share (tax inclusive)**, with no other significant events disclosed after the reporting period - On August 28, 2025, the Board announced an interim dividend of **RMB 0.56 per ordinary share (tax inclusive)**[50](index=50&type=chunk) [I. Management Discussion and Analysis of the Group's Operations During the Reporting Period](index=21&type=section&id=I.%20Management%20Discussion%20and%20Analysis%20of%20the%20Group's%20Operations%20During%20the%20Reporting%20Period) In H1 2025, the Group achieved steady growth despite a complex global container shipping market, with increases in container shipping volume, terminal throughput, revenue, and net profit attributable to listed company shareholders, alongside an interim cash dividend and share repurchases [1.1 Overall Operating Performance](index=21&type=section&id=1.1%20Overall%20Operating%20Performance) In H1 2025, the Group achieved robust growth with container shipping volume increasing by **6.59%** to **13.2809 million TEUs** and terminal throughput by **6.35%** to **74.2960 million TEUs**, leading to a **7.78%** rise in operating revenue and a **3.90%** increase in net profit attributable to listed company shareholders 2025 H1 Key Operating Data | Indicator | 2025 H1 | Year-on-Year Growth (%) | | :--- | :--- | :--- | | Container Shipping Business Bill of Lading Volume | 13.2809 million TEUs | 6.59 | | Terminal Business Total Throughput | 74.2960 million TEUs | 6.35 | | Operating Revenue | RMB 109.099 billion | 7.78 | | Earnings Before Interest and Taxes (EBIT) | RMB 25.483 billion | 3.35 | | Net Profit | RMB 20.196 billion | 4.88 | | Net Profit Attributable to Listed Company Shareholders | RMB 17.528 billion | 3.90 | - The Board announced an interim cash dividend of **RMB 0.56 per share (tax inclusive)** for 2025 to all shareholders, representing approximately **50%** of the net profit attributable to listed company shareholders[53](index=53&type=chunk) - During the reporting period, the Company repurchased approximately **102 million A shares** and **237 million H shares**, all of which have been cancelled[53](index=53&type=chunk) [1.2 Adapting to Economic and Trade Landscape, Focusing on Core Business, and Optimizing Global Shipping Network](index=22&type=section&id=1.2%20Adapting%20to%20Economic%20and%20Trade%20Landscape,%20Focusing%20on%20Core%20Business,%20and%20Optimizing%20Global%20Shipping%20Network) The Group actively responds to globalization trends by upgrading its fleet to **557 self-operated container vessels** with a total capacity exceeding **3.4 million TEUs**, strengthening THE Alliance operations, optimizing main trade lane layouts, and expanding market presence around strategic hubs like Chancay, Yangpu, and Piraeus Port to enhance its global network and integrated channel services - The self-operated container fleet reached **557 vessels** with a total capacity exceeding **3.4 million TEUs**, holding new vessel orders for **910,000 TEUs**, maintaining its position in the industry's top tier[55](index=55&type=chunk) - Strengthened the stable operation of THE Alliance, flexibly allocated capacity, and optimized the layout of main trade lanes to effectively respond to rapid changes in market supply and demand[55](index=55&type=chunk) - Focused on key global strategic hubs, including Chancay Hub Port, Hainan Free Trade Port Yangpu Hub Port, and Piraeus Port, to further expand global market reach and enhance integrated channel network service capabilities[56](index=56&type=chunk) [1.3 Following Industry Trends, Strengthening Digital Intelligence Empowerment, and Enhancing Full-Chain Service Level](index=23&type=section&id=1.3%20Following%20Industry%20Trends,%20Strengthening%20Digital%20Intelligence%20Empowerment,%20and%20Enhancing%20Full-Chain%20Service%20Level) The Group is accelerating the development of digital supply chain capabilities, deepening the application of TMS, WMS, and FMS systems, expanding AI+ R&D, launching "Express Booking" and intelligent customer service platforms, and establishing a global sea-land intermodal network covering **56 countries/regions** with customized solutions for specific clients - Deepened the application of supply chain systems such as TMS (Transportation Management System), WMS (Warehouse Management System), and FMS (Feeder Management System), and expanded AI+ R&D applications including intelligent freight rates, intelligent slot management, intelligent container repositioning, and intelligent truck quotes[57](index=57&type=chunk) - Online "Express Booking" and intelligent customer service platforms were successively launched, and customized control tower solutions empower clients to efficiently manage global supply chains[57](index=57&type=chunk) - Launched trailer products covering **56 countries (regions)** globally, achieving global visibility, inquiry, purchase, and delivery, forming a global sea-land intermodal network, and providing "Overseas Express" services customized for "new three" clients[58](index=58&type=chunk) [1.4 Strengthening Synergy, Accelerating Green Transformation, and Promoting Full-Cycle Decarbonization](index=23&type=section&id=1.4%20Strengthening%20Synergy,%20Accelerating%20Green%20Transformation,%20and%20Promoting%20Full-Cycle%20Decarbonization) The Group actively promotes green transformation through new vessel construction and technological upgrades, having ordered **42 methanol dual-fuel new vessels**, with the successful maiden voyage and green methanol bunkering of China's first methanol dual-fuel container vessel, "COSCO SHIPPING Yangpu," establishing a full methanol fuel chain, and will continue to accelerate global digital supply chain and green low-carbon development - Through a combination of new vessel construction and technological upgrades, the Group is accelerating the structural upgrade of its green fleet, having cumulatively ordered **42 methanol dual-fuel new vessels** with a capacity of **780,000 TEUs**[60](index=60&type=chunk) - China's first methanol dual-fuel container vessel, "COSCO SHIPPING Yangpu," made its maiden voyage to Yangpu Port and completed domestic green methanol bunkering, marking the Group's joint establishment of a full methanol fuel chain from production to transportation and bunkering[60](index=60&type=chunk) - Looking ahead, the Group will accelerate the development of a global digital supply chain and green low-carbon transformation, aligning with its positioning as a "global digital supply chain operation and investment platform with container shipping as its core"[60](index=60&type=chunk) [II. Analysis of Key Profit and Loss Items and Cash Flow](index=25&type=section&id=II.%20Analysis%20of%20Key%20Profit%20and%20Loss%20Items%20and%20Cash%20Flow) This section analyzes the Group's key profit and loss items and cash flows for H1 2025, highlighting a **7.78%** increase in revenue, an **11.03%** rise in cost of services, a **211.97%** surge in other income, a **13.78%** increase in net cash from operating activities, and a **41.25%** increase in net cash used in financing activities [2.1 Analysis Table of Key Items in Consolidated Statement of Profit or Loss and Consolidated Statement of Cash Flows](index=25&type=section&id=2.1%20Analysis%20Table%20of%20Key%20Items%20in%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Consolidated%20Statement%20of%20Cash%20Flows) In H1 2025, the Group's revenue increased by **7.78%**, while cost of services rose by **11.03%**, and other income saw a substantial **211.97%** increase, with net cash from operating activities growing by **13.78%** and net cash used in financing activities significantly increasing by **41.25%** 2025 H1 Key Profit and Loss and Cash Flow Items Changes (RMB Thousand) | Item | 2025 H1 | 2024 H1 (Restated) | Difference | Change Rate (%) | | :--- | :--- | :--- | :--- | :--- | | Revenue | 109,099,344 | 101,224,495 | 7,874,849 | 7.78 | | Cost of Services | (86,670,370) | (78,059,101) | (8,611,269) | 11.03 | | Other Income | 1,852,627 | 593,853 | 1,258,774 | 211.97 | | Net Cash Flows from Operating Activities | 25,776,977 | 22,654,387 | 3,122,590 | 13.78 | | Net Cash Flows Used in Financing Activities | (30,366,227) | (21,498,343) | (8,867,884) | 41.25 | [2.2 Revenue](index=26&type=section&id=2.2%20Revenue) In H1 2025, the Group's total operating revenue grew by **7.78%** to **RMB 109,099,344 thousand**, with container shipping revenue increasing by **7.49%** and terminal business revenue by **14.75%**, while sales to the top five customers accounted for **4.02%** of total sales [2.2.1 Overall Situation](index=26&type=section&id=2.2.1%20Overall%20Situation) The Group's operating revenue for H1 2025 was **RMB 109,099,344 thousand**, an increase of **RMB 7,874,849 thousand** or **7.78%** compared to the same period last year - The Group's operating revenue for H1 2025 was **RMB 109,099,344 thousand**, an increase of **RMB 7,874,849 thousand** or **7.78%** compared to the same period last year[63](index=63&type=chunk) [2.2.2 Container Shipping Business Revenue](index=26&type=section&id=2.2.2%20Container%20Shipping%20Business%20Revenue) In H1 2025, container shipping business revenue reached **RMB 104,803,089 thousand**, a **7.49%** year-on-year increase, with COSCO SHIPPING Lines contributing **RMB 73,029,414 thousand**, up **8.26%** - Container shipping business revenue for H1 2025 was **RMB 104,803,089 thousand**, an increase of **RMB 7,302,378 thousand** or **7.49%** compared to the same period last year[64](index=64&type=chunk) - COSCO SHIPPING Lines achieved container shipping business revenue of **RMB 73,029,414 thousand**, an increase of **RMB 5,570,141 thousand** or **8.26%** compared to the same period last year[64](index=64&type=chunk) [2.2.3 Terminal Business Revenue](index=26&type=section&id=2.2.3%20Terminal%20Business%20Revenue) In H1 2025, terminal business revenue was **RMB 5,842,108 thousand**, an increase of **RMB 750,973 thousand** or **14.75%** compared to the same period last year - Terminal business revenue for H1 2025 was **RMB 5,842,108 thousand**, an increase of **RMB 750,973 thousand** or **14.75%** compared to the same period last year[65](index=65&type=chunk) [2.2.4 Major Sales Customers](index=26&type=section&id=2.2.4%20Major%20Sales%20Customers) The Group's sales to its top five customers in H1 2025 amounted to **RMB 4,382,630 thousand**, representing **4.02%** of total sales for the reporting period - The Group's sales to its top five customers in H1 2025 amounted to **RMB 4,382,630 thousand**, representing **4.02%** of total sales for the reporting period[66](index=66&type=chunk) [2.3 Costs](index=27&type=section&id=2.3%20Costs) In H1 2025, the Group's total operating costs increased by **11.03%** to **RMB 86,670,370 thousand**, with container shipping business costs rising by **10.80%** and terminal business costs by **16.80%** [2.3.1 Overall Situation](index=27&type=section&id=2.3.1%20Overall%20Situation) In H1 2025, the Group incurred operating costs of **RMB 86,670,370 thousand**, an increase of **RMB 8,611,269 thousand** or **11.03%** compared to the same period last year - In H1 2025, the Group incurred operating costs of **RMB 86,670,370 thousand**, an increase of **RMB 8,611,269 thousand** or **11.03%** compared to the same period last year[68](index=68&type=chunk) [2.3.2 Container Shipping Business Costs](index=27&type=section&id=2.3.2%20Container%20Shipping%20Business%20Costs) In H1 2025, container shipping business costs were **RMB 83,937,362 thousand**, a **10.80%** year-on-year increase, driven by a **16.14%** rise in equipment and cargo transportation costs and a **14.78%** increase in vessel costs - Container shipping business costs for H1 2025 were **RMB 83,937,362 thousand**, an increase of **RMB 8,179,766 thousand** or **10.80%** compared to the same period last year[69](index=69&type=chunk) - 2025 H1 Container Shipping Business Cost Composition (RMB Thousand) | Cost Item | 2025 H1 | 2024 H1 (Restated) | Change Rate (%) | | :--- | :--- | :--- | :--- | | Equipment and Cargo Transportation Costs | 40,844,711 | 35,167,509 | 16.14 | | Vessel Costs | 17,227,794 | 15,008,821 | 14.78 | | Subtotal Container Shipping Business Costs | 83,937,362 | 75,757,596 | 10.80 | [2.3.3 Terminal Business Costs](index=27&type=section&id=2.3.3%20Terminal%20Business%20Costs) In H1 2025, terminal business costs were **RMB 4,241,140 thousand**, an increase of **RMB 609,967 thousand** or **16.80%** compared to the same period last year - Terminal business costs for H1 2025 were **RMB 4,241,140 thousand**, an increase of **RMB 609,967 thousand** or **16.80%** compared to the same period last year[70](index=70&type=chunk) [2.4 Other Profit and Loss Items](index=28&type=section&id=2.4%20Other%20Profit%20and%20Loss%20Items) In H1 2025, the Group's net other income and expenses surged by **229.66%** to **RMB 1,823,458 thousand**, primarily due to increased net exchange gains and dividend income from financial assets, while selling, general and administrative expenses slightly decreased by **0.74%**, finance income and costs both declined due to lower interest rates, and share of profits from joint ventures and associates grew by **9.81%** [2.4.1 Net Other Income and Expenses](index=28&type=section&id=2.4.1%20Net%20Other%20Income%20and%20Expenses) In H1 2025, net other income and expenses amounted to **RMB 1,823,458 thousand**, an increase of **RMB 1,270,321 thousand** or **229.66%** compared to the same period last year, mainly due to higher net exchange gains and dividend income from financial assets measured at fair value through other comprehensive income - Net other income and expenses for H1 2025 amounted to **RMB 1,823,458 thousand**, an increase of **RMB 1,270,321 thousand** or **229.66%** compared to the same period last year[61](index=61&type=chunk)[71](index=71&type=chunk) - During the reporting period, the Group's net exchange gains and dividend income from financial assets measured at fair value through other comprehensive income increased year-on-year[71](index=71&type=chunk) [2.4.2 Selling, General and Administrative Expenses](index=28&type=section&id=2.4.2%20Selling,%20General%20and%20Administrative%20Expenses) The Group's selling, general and administrative expenses for H1 2025 were **RMB 4,544,073 thousand**, a decrease of **RMB 34,034 thousand** or **0.74%** compared to the same period last year - The Group's selling, general and administrative expenses for H1 2025 were **RMB 4,544,073 thousand**, a decrease of **RMB 34,034 thousand** or **0.74%** compared to the same period last year[72](index=72&type=chunk) [2.4.3 Finance Income](index=28&type=section&id=2.4.3%20Finance%20Income) The Group's finance income for H1 2025 was **RMB 3,009,276 thousand**, a decrease of **RMB 82,106 thousand** or **2.66%** compared to the same period last year, primarily due to lower interest income as deposit rates declined - The Group's finance income for H1 2025 was **RMB 3,009,276 thousand**, a decrease of **RMB 82,106 thousand** or **2.66%** compared to the same period last year, primarily due to lower interest income as deposit rates declined[73](index=73&type=chunk) [2.4.4 Finance Costs](index=28&type=section&id=2.4.4%20Finance%20Costs) The Group's finance costs for H1 2025 were **RMB 1,564,758 thousand**, a decrease of **RMB 99,879 thousand** or **6%** compared to the same period last year, primarily due to lower interest expenses as loan rates declined - The Group's finance costs for H1 2025 were **RMB 1,564,758 thousand**, a decrease of **RMB 99,879 thousand** or **6%** compared to the same period last year, primarily due to lower interest expenses as loan rates declined[74](index=74&type=chunk) [2.4.5 Share of Profits Less Losses of Joint Ventures and Associates](index=28&type=section&id=2.4.5%20Share%20of%20Profits%20Less%20Losses%20of%20Joint%20Ventures%20and%20Associates) The Group's share of profits less losses of joint ventures and associates for H1 2025 totaled **RMB 2,828,859 thousand**, an increase of **RMB 252,683 thousand** or **9.81%** compared to the same period last year - The Group's share of profits less losses of joint ventures and associates for H1 2025 totaled **RMB 2,828,859 thousand**, an increase of **RMB 252,683 thousand** or **9.81%** compared to the same period last year[75](index=75&type=chunk) [2.4.6 Income Tax Expense](index=28&type=section&id=2.4.6%20Income%20Tax%20Expense) In H1 2025, the Group's income tax expense was **RMB 3,795,823 thousand**, a decrease of **RMB 9,119 thousand** or **0.24%** compared to the same period last year - In H1 2025, the Group's income tax expense was **RMB 3,795,823 thousand**, a decrease of **RMB 9,119 thousand** or **0.24%** compared to the same period last year[76](index=76&type=chunk) [2.4.7 Major Suppliers](index=28&type=section&id=2.4.7%20Major%20Suppliers) The Group's purchases from its top five suppliers in H1 2025 amounted to **RMB 13,140,527 thousand**, representing **15.27%** of total purchases for the reporting period - The Group's purchases from its top five suppliers in H1 2025 amounted to **RMB 13,140,527 thousand**, representing **15.27%** of total purchases for the reporting period[77](index=77&type=chunk) [2.5 Net Cash Flows from Operating, Investing, and Financing Activities](index=29&type=section&id=2.5%20Net%20Cash%20Flows%20from%20Operating,%20Investing,%20and%20Financing%20Activities) In H1 2025, the Group's net cash inflow from operating activities increased by **13.78%** due to improved operating performance, while net cash outflow from investing activities slightly rose due to increased external equity investments, and net cash outflow from financing activities significantly increased by **41.25%** due to higher dividend distribution and share repurchases [2.5.1 Net Cash Flows from Operating Activities](index=29&type=section&id=2.5.1%20Net%20Cash%20Flows%20from%20Operating%20Activities) In H1 2025, net cash inflow from operating activities was **RMB 25,776,977 thousand**, an increase of **RMB 3,122,590 thousand** or **13.78%** compared to the same period last year, primarily due to improved operating performance - Net cash inflow from operating activities for H1 2025 was **RMB 25,776,977 thousand**, an increase of **RMB 3,122,590 thousand** or **13.78%** compared to the same period last year[79](index=79&type=chunk) - This was primarily due to the Group's improved operating performance during the reporting period[79](index=79&type=chunk) [2.5.2 Net Cash Flows from Investing Activities](index=29&type=section&id=2.5.2%20Net%20Cash%20Flows%20from%20Investing%20Activities) In H1 2025, net cash outflow from investing activities was **RMB 10,501,177 thousand**, an increase of **RMB 145,578 thousand** or **1.41%** compared to the same period last year, mainly due to increased external equity investments, partially offset by reduced cash payments for vessel construction and terminal development - Net cash outflow from investing activities for H1 2025 was **RMB 10,501,177 thousand**, an increase of **RMB 145,578 thousand** or **1.41%** compared to the same period last year[80](index=80&type=chunk) - During the reporting period, the Group's cash payments for external equity investments increased year-on-year, cash dividends received from joint ventures and associates decreased year-on-year, and cash payments for vessel construction and terminal development decreased year-on-year[80](index=80&type=chunk) [2.5.3 Net Cash Flows from Financing Activities](index=29&type=section&id=2.5.3%20Net%20Cash%20Flows%20from%20Financing%20Activities) In H1 2025, net cash outflow from financing activities was **RMB 30,366,227 thousand**, an increase of **RMB 8,867,884 thousand** or **41.25%** compared to the same period last year, primarily due to increased cash payments for dividend distribution and share repurchases - Net cash outflow from financing activities for H1 2025 was **RMB 30,366,227 thousand**, an increase of **RMB 8,867,884 thousand** or **41.25%** compared to the same period last year[81](index=81&type=chunk) - During the reporting period, the Group's cash payments for dividend distribution and share repurchases increased, while cash payments for repayment of borrowings decreased year-on-year[81](index=81&type=chunk) [2.5.4 Effect of Exchange Rate Changes on Cash and Cash Equivalents](index=29&type=section&id=2.5.4%20Effect%20of%20Exchange%20Rate%20Changes%20on%20Cash%20and%20Cash%20Equivalents) As of June 30, 2025, the effect of exchange rate changes on cash and cash equivalents was an increase of **RMB 44,258 thousand** - As of June 30, 2025, the balance of cash and cash equivalents increased by **RMB 44,258 thousand** due to exchange rate changes[82](index=82&type=chunk) [III. Liquidity, Financial Resources, and Capital Structure](index=30&type=section&id=III.%20Liquidity,%20Financial%20Resources,%20and%20Capital%20Structure) As of June 30, 2025, the Group's total assets slightly increased by **0.21%** to **RMB 498,497,058 thousand**, while total liabilities grew by **1.50%** to **RMB 215,603,431 thousand**, resulting in a **16.09%** decrease in net current assets and a **6.02 percentage point** reduction in the net cash (debt) to equity ratio [3.1 Overall Situation](index=30&type=section&id=3.1%20Overall%20Situation) As of June 30, 2025, the Group's total assets increased by **0.21%** to **RMB 498,497,058 thousand**, and total liabilities increased by **1.50%** to **RMB 215,603,431 thousand**, while net cash decreased by **RMB 15,194,419 thousand** to **RMB 134,318,973 thousand**, net current assets decreased by **16.09%**, and the net cash (debt) to equity ratio decreased by **6.02 percentage points** to **31.86%** - As of June 30, 2025, the Group's total assets were **RMB 498,497,058 thousand**, an increase of **RMB 1,024,844 thousand** or **0.21%** from the end of last year; total liabilities were **RMB 215,603,431 thousand**, an increase of **RMB 3,189,994 thousand** or **1.50%** from the end of last year[83](index=83&type=chunk) - As of June 30, 2025, the Group's cash and cash equivalents were **RMB 169,142,909 thousand**, which, after deducting total outstanding borrowings of **RMB 34,823,936 thousand**, resulted in net cash of **RMB 134,318,973 thousand**, a decrease of **RMB 15,194,419 thousand** from the end of last year[83](index=83&type=chunk) - As of June 30, 2025, net current assets were **RMB 69,922,644 thousand**, a decrease of **RMB 13,403,630 thousand** or **16.09%** from the end of last year; the net cash (debt) to equity ratio was **31.86%**, a decrease of **6.02 percentage points** from the end of last year[83](index=83&type=chunk) [3.2 Debt Analysis](index=30&type=section&id=3.2%20Debt%20Analysis) As of June 30, 2025, the Group's total short-term and long-term borrowings amounted to **RMB 34,823,936 thousand**, with bank borrowings accounting for **93.04%** and secured borrowings representing **50.08%** of total borrowings, most of which are at floating rates, and US dollar borrowings being the largest component at **65.03%** [3.2.1 Loan Categories and Repayment Periods](index=30&type=section&id=3.2.1%20Loan%20Categories%20and%20Repayment%20Periods) As of June 30, 2025, the Group's total short-term and long-term borrowings amounted to **RMB 34,823,936 thousand**, with long-term borrowings primarily concentrated in repayment periods of **three to five years** (**RMB 11,700,494 thousand**) and **over five years** (**RMB 10,824,457 thousand**) Total Borrowings as of June 30, 2025 (RMB Thousand) | Category | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Short-term borrowings | 2,402,929 | 1,703,638 | | Long-term borrowings | 32,421,007 | 32,972,048 | | **Total Short-term and Long-term Borrowings** | **34,823,936** | **34,675,686** | - Long-term borrowings repayment periods are mainly concentrated in **three to five years** (**RMB 11,700,494 thousand**) and **over five years** (**RMB 10,824,457 thousand**)[85](index=85&type=chunk) [3.2.2 By Currency of Borrowings](index=31&type=section&id=3.2.2%20By%20Currency%20of%20Borrowings) As of June 30, 2025, US dollar denominated borrowings accounted for **65.03%** (**RMB 22,501,183 thousand**) of the Group's total borrowings, with RMB borrowings at **21.00%** and Euro borrowings at **12.39%** - As of June 30, 2025, the Group's US dollar denominated borrowings accounted for **65.03%** of total borrowings, RMB for **21.00%**, and Euro for **12.39%**[87](index=87&type=chunk) [3.2.3 Secured Borrowings](index=31&type=section&id=3.2.3%20Secured%20Borrowings) As of June 30, 2025, the Group's total secured borrowings amounted to **RMB 17,326,140 thousand**, representing **50.08%** of total borrowings, with the majority of the Group's borrowings being at floating interest rates - As of June 30, 2025, the Group's total secured borrowings amounted to **RMB 17,326,140 thousand**, representing **50.08%** of total borrowings[86](index=86&type=chunk)[88](index=88&type=chunk) - The majority of the Group's borrowings are at floating interest rates[86](index=86&type=chunk) [3.3 Company Guarantees](index=31&type=section&id=3.3%20Company%20Guarantees) As of June 30, 2025, guarantees provided among the Group's consolidated entities amounted to **RMB 8,317,779 thousand**, a decrease from the end of 2024, and an additional guarantee of **RMB 407,516 thousand** was provided for an associate - As of June 30, 2025, guarantees provided among the Group's consolidated entities amounted to **RMB 8,317,779 thousand**, a decrease from the end of 2024[89](index=89&type=chunk) - A guarantee of **RMB 407,516 thousand** was provided for an associate[89](index=89&type=chunk) [3.4 Contingent Liabilities](index=31&type=section&id=3.4%20Contingent%20Liabilities) The Group is involved in various claims and litigations, but based on legal counsel's opinion and available information, the directors believe these claims will not have a material impact on the Group's condensed consolidated financial statements for the six months ended June 30, 2025 - The Group is involved in various claims and litigations, including but not limited to claims and litigations arising from vessel damage during transit, cargo loss, delivery delays, vessel collisions, early termination of vessel charter contracts, and disputes in pledge supervision business[90](index=90&type=chunk) - Based on the opinion of legal counsel and/or information available to the Group, the directors believe that the amounts of these claims will not have a material impact on the Group's condensed consolidated financial statements for the six months ended June 30, 2025[90](index=90&type=chunk) [3.5 Foreign Exchange Risk](index=32&type=section&id=3.5%20Foreign%20Exchange%20Risk) The Group operates internationally and is exposed to foreign exchange risk arising from various non-functional currencies, primarily related to bank balances, receivables, payables, and bank borrowings, with management monitoring this risk and considering derivative financial instruments for hedging when appropriate - The Group operates internationally and is exposed to foreign exchange risk arising from various non-functional currencies, primarily related to bank balances, receivables, payables, and bank borrowings denominated in non-functional currencies[91](index=91&type=chunk) - Management monitors foreign exchange risk and considers using derivative financial instruments to hedge foreign exchange risk when appropriate[91](index=91&type=chunk) [3.6 Capital Commitments](index=32&type=section&id=3.6%20Capital%20Commitments) As of June 30, 2025, the Group has capital commitments of **RMB 57,071,031 thousand** for the construction of **51 new container vessels** and **RMB 2,891,575 thousand** for terminal investments - As of June 30, 2025, the Group held orders for **51 new vessels**, with future capital commitments for the construction of container vessels amounting to **RMB 57,071,031 thousand**[92](index=92&type=chunk) - As of June 30, 2025, the Group's capital commitments for terminal investments totaled **RMB 2,891,575 thousand**, including **RMB 1,965,413 thousand** for fixed asset purchases and **RMB 926,162 thousand** for terminal equity investments[92](index=92&type=chunk) [3.7 Credit Facilities](index=32&type=section&id=3.7%20Credit%20Facilities) As of June 30, 2025, the Group had unused bank loan credit facilities of **RMB 16,036,396 thousand**, and management is highly focused on potential risks from expanding financing scale, strengthening monitoring of debt size and asset-liability ratios of its subsidiaries - As of June 30, 2025, the Group had unused bank loan credit facilities of **RMB 16,036,396 thousand**[93](index=93&type=chunk) - The Group is highly focused on the potential risks arising from expanding financing scale and strengthens monitoring of the debt size and asset-liability ratios of its subsidiaries[93](index=93&type=chunk) [3.8 Financing Plan](index=32&type=section&id=3.8%20Financing%20Plan) The Group plans to proactively arrange financing, strengthen fund and debt management, improve capital utilization efficiency, and effectively control debt size, considering maturing debt repayment, debt swaps, and future significant capital expenditures - The Group will proactively arrange financing, considering maturing debt repayment, debt swaps, and future significant capital expenditures[94](index=94&type=chunk) - It will strengthen fund and debt management, improve capital utilization efficiency, and effectively control debt size[94](index=94&type=chunk) [IV. Investment Analysis](index=33&type=section&id=IV.%20Investment%20Analysis) This section provides an analysis of the Group's investment activities, including external equity investments and financial assets measured at fair value [4.1 Overall Analysis of External Equity Investments](index=33&type=section&id=4.1%20Overall%20Analysis%20of%20External%20Equity%20Investments) As of June 30, 2025, the Group's investment balance in joint ventures and associates was **RMB 75.004 billion**, an increase of **RMB 2.503 billion** from the end of last year - As of June 30, 2025, the Group's investment balance in joint ventures and associates was **RMB 75.004 billion**, an increase of **RMB 2.503 billion** from the end of last year[95](index=95&type=chunk) [4.2 Significant Equity Investments](index=33&type=section&id=4.2%20Significant%20Equity%20Investments) There were no significant equity investments during the reporting period - Not applicable[96](index=96&type=chunk) [4.3 Significant Non-Equity Investments](index=33&type=section&id=4.3%20Significant%20Non-Equity%20Investments) There were no significant non-equity investments during the reporting period - Not applicable[97](index=97&type=chunk) [4.4 Financial Assets Measured at Fair Value](index=33&type=section&id=4.4%20Financial%20Assets%20Measured%20at%20Fair%20Value) As of June 30, 2025, the Group's total financial assets measured at fair value decreased to **RMB 4,895,309 thousand**, primarily due to the sale/redemption of non-current financial assets measured at fair value through profit or loss and fair value changes recognized in other comprehensive income 2025 H1 Changes in Financial Assets Measured at Fair Value (RMB Thousand) | Asset Category | Beginning Balance | Fair Value Change Gain/Loss for the Period | Cumulative Fair Value Change Recognized in Equity | Amount Sold/Redeemed During the Period | Ending Balance | | :--- | :--- | :--- | :--- | :--- | :--- | | Financial assets measured at fair value through profit or loss – current portion | 65,948 | 10,317 | – | – | 75,962 | | Financial assets measured at fair value through profit or loss – non-current portion | 444,761 | 18,325 | – | (420,189) | 47,894 | | Financial assets measured at fair value through other comprehensive income | 4,916,682 | – | (132,960) | – | 4,771,453 | | **Total** | **5,427,391** | **28,642** | **(132,960)** | **(420,189)** | **4,895,309** | [V. Industry Operating Business Analysis](index=35&type=section&id=V.%20Industry%20Operating%20Business%20Analysis) This section provides an in-depth analysis of the Group's container shipping and terminal businesses, detailing cargo volume, revenue by trade lane, and key performance indicators [5.1 Container Shipping Business](index=35&type=section&id=5.1%20Container%20Shipping%20Business) In H1 2025, the Group's container shipping business saw cargo volume increase by **6.59%** to **13.2809 million TEUs** and trade lane revenue grow by **6.88%** to **RMB 96,608,725 thousand**, with other international and intra-Asia trade lanes showing strong performance, while EBIT margin slightly decreased by **0.87 percentage points** to **20.52%** [5.1.1 Cargo Volume](index=35&type=section&id=5.1.1%20Cargo%20Volume) In H1 2025, the Group's total cargo volume increased by **6.59%** to **13,280,904 TEUs**, with all major trade lanes showing growth, and other international (including Atlantic) trade lanes experiencing the largest increase at **11.95%** 2025 H1 Group Cargo Volume (TEUs) | Trade Lane | Current Period | Prior Year Period | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | Trans-Pacific | 2,393,008 | 2,285,145 | 4.72 | | Asia-Europe (including Mediterranean) | 1,947,593 | 1,874,775 | 3.88 | | Intra-Asia (including Australia) | 4,495,293 | 4,272,529 | 5.21 | | Other International (including Atlantic) | 1,578,260 | 1,409,782 | 11.95 | | Mainland China | 2,866,750 | 2,617,312 | 9.53 | | **Total** | **13,280,904** | **12,459,543** | **6.59** | [5.1.2 Revenue by Trade Lane](index=36&type=section&id=5.1.2%20Revenue%20by%20Trade%20Lane) In H1 2025, the Group's total trade lane revenue increased by **6.88%** to **RMB 96,608,725 thousand**, with other international (including Atlantic) trade lanes growing by **18.79%** and intra-Asia (including Australia) trade lanes by **13.82%**, while Asia-Europe trade lane revenue slightly decreased by **3.93%** 2025 H1 Group Trade Lane Revenue (RMB Thousand) | Trade Lane | Current Period | Prior Year Period | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | Trans-Pacific | 28,322,639 | 27,731,163 | 2.13 | | Asia-Europe (including Mediterranean) | 19,501,540 | 20,299,731 | (3.93) | | Intra-Asia (including Australia) | 26,551,236 | 23,327,346 | 13.82 | | Other International (including Atlantic) | 15,789,242 | 13,291,789 | 18.79 | | Mainland China | 6,444,068 | 5,739,137 | 12.28 | | **Total** | **96,608,725** | **90,389,166** | **6.88** | [5.1.3 Key Performance Indicators](index=37&type=section&id=5.1.3%20Key%20Performance%20Indicators) In H1 2025, the Group's container shipping business revenue was **RMB 104,803,089 thousand**, a **7.49%** increase, with EBIT growing by **3.14%** to **RMB 21,506,754 thousand**, but EBIT margin decreased by **0.87 percentage points** to **20.52%**, while supply chain revenue excluding ocean shipping increased by **8.37%** 2025 H1 Group Container Shipping Business Key Performance Indicators (RMB Thousand) | Item | Current Period | Prior Year Period (Restated) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Container Shipping Business Revenue | 104,803,089 | 97,500,711 | 7,302,378 | | Of which: Supply Chain Revenue excluding Ocean Shipping | 21,582,976 | 19,916,687 | 1,666,289 | | Earnings Before Interest and Taxes (EBIT) | 21,506,754 | 20,851,773 | 654,981 | | EBIT Margin | 20.52% | 21.39% | Decrease of 0.87 percentage points | | Net Profit | 16,937,574 | 16,330,785 | 606,789 | - International trade lane revenue per TEU (USD/TEU) decreased from **USD 1,210.70** to **USD 1,205.95**, a decrease of **USD 4.75**[106](index=106&type=chunk) [5.2 Terminal Business](index=39&type=section&id=5.2%20Terminal%20Business) In H1 2025, COSCO SHIPPING Ports' total throughput increased by **6.35%** to **74.2960 million TEUs**, with controlling terminals' throughput rising by **3.57%** and equity-accounted terminals' throughput by **7.17%**, and overseas regions showing strong growth of **8.37%** - In H1 2025, COSCO SHIPPING Ports' total throughput was **74.2960 million TEUs**, a year-on-year increase of **6.35%**[108](index=108&type=chunk) - Throughput of controlling terminals increased by **3.57%** to **16.4820 million TEUs**; throughput of equity-accounted terminals increased by **7.17%** to **57.8140 million TEUs**[108](index=108&type=chunk) - 2025 H1 Terminal Total Throughput by Region (TEUs) | Terminal Region | Current Period | Prior Year Period | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | Bohai Rim Region | 25,835,742 | 24,360,269 | 6.06 | | Pearl River Delta Region | 14,633,421 | 13,669,963 | 7.05 | | Southwest Coastal Region | 4,758,500 | 4,320,100 | 10.15 | | Overseas Regions | 17,905,846 | 16,522,679 | 8.37 | [Events After Reporting Period](index=40&type=section&id=Events%20After%20Reporting%20Period) On July 22, 2025, the proposed reduction in the company's registered capital and the revised Articles of Association became effective after registration with the market entity registration authority, along with the Rules of Procedure for General Meetings and Board Meetings - On July 22, 2025, the proposed reduction in the company's registered capital and the revised Articles of Association became effective after registration with the market entity registration authority, and the Rules of Procedure for General Meetings and Board Meetings also became effective[111](index=111&type=chunk) [Audit Committee](index=40&type=section&id=Audit%20Committee) The Audit Committee, comprising three independent non-executive directors, has reviewed and recommended the adoption of the unaudited interim financial information for the six months ended June 30, 2025, with its primary duties including reviewing financial reporting, internal controls, and liaising with external auditors - The Audit Committee, composed of three independent non-executive directors, has reviewed the unaudited interim financial information for the six months ended June 30, 2025, and recommended its adoption by the Board[113](index=113&type=chunk) - The primary duties of the Audit Committee include reviewing the Group's financial reporting process and internal control systems, the completeness and accuracy of accounts, and liaising with external auditors on behalf of the Board[113](index=113&type=chunk) [Corporate Governance](index=40&type=section&id=Corporate%20Governance) The Company is committed to maintaining high standards of corporate governance and has adopted its Corporate Governance Code, with directors confirming compliance with the code's provisions during the six months ended June 30, 2025 - The Company is committed to maintaining high standards of corporate governance for the Group and has adopted its Corporate Governance Code[114](index=114&type=chunk) - The directors confirm that at no time during the six months ended June 30, 2025, was there any non-compliance with the Corporate Governance Code or any applicable code provisions contained therein[114](index=114&type=chunk) [Employees and Remuneration Policy](index=41&type=section&id=Employees%20and%20Remuneration%20Policy) The Company has organized various professional and comprehensive training programs to enhance the quality, capabilities, and team spirit of its human resources, and regularly reviews its remuneration policy, including directors' emoluments, considering company performance and market conditions to formulate better incentive and assessment measures - The Company has organized various professional and comprehensive training programs to enhance the quality, capabilities, and team spirit of its human resources[115](index=115&type=chunk) - The Company regularly reviews its remuneration policy (including directors' emoluments), taking into account the Company's performance and market conditions, to formulate better incentive and assessment measures[115](index=115&type=chunk) [Standard Code for Securities Transactions by Directors](index=41&type=section&id=Standard%20Code%20for%20Securities%20Transactions%20by%20Directors) 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 the code for securities transactions by its directors and supervisors, who have confirmed compliance with its provisions during the six months ended June 30, 2025 - 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 the code for securities transactions by its directors and supervisors[116](index=116&type=chunk) - Following specific inquiries to all directors and supervisors, each director and supervisor confirmed that they had complied with the required standards set out in the Standard Code throughout the six months ended June 30, 2025[116](index=116&type=chunk) [Repurchase, Sale or Redemption of Listed Securities](index=41&type=section&id=Repurchase,%20Sale%20or%20Redemption%20of%20Listed%20Securities) The Board is authorized to repurchase up to **10%** of issued A shares and **10%** of issued H shares, with **102,417,499 A shares** and **237,307,000 H shares** repurchased and cancelled during H1 2025 - The Board is authorized to repurchase up to **10%** of the issued A shares and **10%** of the issued H shares[117](index=117&type=chunk) 2025 H1 A Share Repurchase Status | Repurchase Month | Number of Shares Repurchased | Total Price (RMB) | | :--- | :--- | :--- |