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。 樂享集團有限公司 （於開曼群島註冊成立之有限公司） （股份代號：6988） 截至2025年6月30日止六個月之中期業績公告及變更所得款項用途 樂享集團有限公司（「本公司」）董事（「董事」）會（「董事會」）欣然公佈，本公司及 其附屬公司（「樂享集團」或「本集團」）截至2025年6月30日止六個月（「報告期」） 之未經審核簡明綜合中期業績，連同截至2024年6月30日止六個月之比較數據如 下： 財務業績摘要 | | 截至6月30日止六個月 | | 同比變動 | | --- | --- | --- | --- | | | 2025年 | 2024年 | 增加╱（減少） | | | （未經審核） | （未經審核） | | | | （百萬港元，百分比除外） | | | | 收益 | 8.89 | 111.23 | (92.01)% | | 毛利 | 4.85 | 0.44 | 1,002.27% | | 本公司擁有 ...

[Company Overview](index=2&type=section&id=Company%20Overview) True Partner Capital, established in 2010, is a professional hedge fund manager specializing in global volatility trading across liquid markets using a 3-T model and proprietary technology [Company Profile and Business Model](index=2&type=section&id=Company%20Profile%20and%20Business%20Model) True Partner Capital, established in 2010, is a hedge fund manager specializing in global volatility trading across liquid markets using a 3-T model and proprietary technology - Established in 2010 by a team of former market makers, the company specializes in volatility trading in liquid markets, primarily focusing on equity index futures, options, and exchange-traded funds (ETFs)[4](index=4&type=chunk) - Employs a "3-T model" combining advanced technology, an experienced team, and professional trading strategies to achieve global, round-the-clock trading[4](index=4&type=chunk) - The company benefits from proprietary technology, including a suite of models and tools that shape its trading approach, and leverages a scalable investment platform for potential growth opportunities in adjacent market segments[4](index=4&type=chunk) [Financial Summary and Performance Overview](index=3&type=section&id=Financial%20Summary%20and%20Performance%20Overview) For H1 2025, the Group's total revenue decreased by 5% to HKD 4,784 thousand, while operating loss and loss attributable to owners significantly narrowed, and its relative value volatility strategy achieved a 6.3% positive return [Selected Financial Summary](index=3&type=section&id=Selected%20Financial%20Summary) For the six months ended June 30, 2025, total revenue decreased by 5% to HKD 4,784 thousand, while operating loss and loss attributable to owners significantly narrowed Selected Financial Summary (For the six months ended June 30) | Metric | H1 2025 (Thousand HKD) | H1 2024 (Thousand HKD) | % Change | | :--- | :--- | :--- | :--- | | Total Revenue | 4,784 | 5,026 | (5)% | | Revenue from Managed Funds | 3,549 | 3,534 | 0% | | Consulting Service Revenue | 1,310 | 840 | 56% | | Net Trading Gain/(Loss) | (75) | 652 | (112)% | | Gross Profit | 4,268 | 4,547 | (6)% | | Operating Loss | (15,923) | (26,611) | (40)% | | Loss Attributable to Owners of the Company | (15,967) | (26,871) | (41)% | | Total Comprehensive Loss | (14,393) | (27,234) | (47)% | | Loss Per Share (HK cents) — Basic and Diluted | (3.86) | (6.72) | (43)% | [Selected Business and Financial Highlights](index=4&type=section&id=Selected%20Business%20and%20Financial%20Highlights) Global equity markets rebounded in H1 2025, with volatility creating trading opportunities, leading to a 6.3% positive return for the Group's relative value volatility strategy - In the first half of 2025, global equity markets rebounded, with the MSCI World Index rising by **6.8%** and the Bloomberg Global Aggregate Government Bond Index rising by **2.3%**[7](index=7&type=chunk) - Implied volatility indicators showed little overall change or a slight increase, but fluctuations within the first half created trading opportunities, particularly a **5.3%** rise in the Group's relative value strategy in April[7](index=7&type=chunk) - Realized volatility (daily actual volatility of equity indices) increased compared to the second half of 2024, creating a more favorable trading environment[9](index=9&type=chunk) - The Group's relative value volatility strategy recorded a **6.3%** positive return in the first half of 2025 and achieved a **12.0%** return for the 12 months ended June 30, 2025, outperforming broad hedge fund indices and several volatility hedge fund indices[9](index=9&type=chunk)[11](index=11&type=chunk) [Business and Market Review](index=10&type=section&id=Business%20and%20Market%20Review) The Group, a global fund manager focused on volatility trading, saw its relative value strategy achieve a 6.3% positive return in H1 2025, despite a decrease in AUM to USD 474 million, while actively adapting to market changes and enhancing technology [Business Review](index=10&type=section&id=Business%20Review) The Group is a global fund management company specializing in volatility trading in liquid markets, primarily implementing global relative value volatility strategies through managed funds and accounts, supported by a proprietary trading platform - The Group is a fund management group based in Hong Kong, Europe, and the United States, with its business focused on volatility trading in liquid markets[24](index=24&type=chunk) - Primarily manages funds and managed accounts on a discretionary basis, utilizing global relative value volatility strategies and other volatility strategies[24](index=24&type=chunk) - Trading decisions are supported by an internal proprietary trading platform designed for specific trading methods, enabling real-time pricing, quantitative comparison, risk management, and rapid trade execution[24](index=24&type=chunk) [Market Environment](index=11&type=section&id=Market%20Environment) Global equity and bond markets grew in H1 2025, with stable implied volatility but increased realized volatility, creating a favorable environment for the Group's trading - The MSCI World Total Return USD Hedged Index rose by **6.8%** during the reporting period, and the Bloomberg Global Aggregate Government Bond USD Hedged Index rose by **2.3%**[26](index=26&type=chunk) - Popular indicators measuring in-the-money implied volatility showed little overall change or a slight increase during the reporting period, but fluctuations within the first half created trading opportunities[26](index=26&type=chunk) - Realized volatility (daily actual volatility of equity indices) increased compared to the second half of 2024 and showed significant differences compared to the first half of 2024, creating a more favorable trading environment[27](index=27&type=chunk) [Investment Performance](index=12&type=section&id=Investment%20Performance) The Group's relative value volatility strategy achieved a **6.3%** positive return in H1 2025 and **12.0%** over 12 months, outperforming hedge fund indices, with True Partner Fund recognized for superior returns since 2011 - The Group's relative value volatility strategy recorded a **6.3%** positive return in the first half of 2025 and achieved a **12.0%** return for the 12 months ended June 30, 2025[29](index=29&type=chunk)[30](index=30&type=chunk) - This strategy outperformed broad hedge fund indices, relative value volatility hedge fund indices, long volatility hedge fund indices, short volatility hedge fund indices, and tail risk hedge fund indices[30](index=30&type=chunk) - True Partner Fund received the Hedge Fund Journal "Best Performing Fund for 2024 and Two Years" award and was nominated for the "With Intelligence HFM APAC Performance Awards 2025"[32](index=32&type=chunk)[33](index=33&type=chunk) - Since its inception in July 2011, True Partner Fund's returns and alpha values have been higher than broad hedge fund indices and other volatility hedge fund indices[34](index=34&type=chunk) [Assets Under Management](index=16&type=section&id=Assets%20Under%20Management) As of June 30, 2025, AUM decreased to **USD 474 million** from **USD 512 million** year-on-year, mainly due to client portfolio adjustments and market challenges Assets Under Management (Million USD) | Date | AUM (Million USD) | | :--- | :--- | | June 30, 2025 | 474 | | December 31, 2024 | 501 | | June 30, 2024 | 512 | - The decrease in AUM was primarily driven by portfolio adjustments by investors in some of the Group's products, influenced by changes in their own asset management[39](index=39&type=chunk) AUM Breakdown by Product Category (Million USD) | Product Category | June 30, 2025 (Million USD) | December 31, 2024 (Million USD) | June 30, 2024 (Million USD) | | :--- | :--- | :--- | :--- | | Fund Vehicles | 46 | 43 | 87 | | Managed Accounts | 428 | 459 | 426 | [Business Development Activities](index=16&type=section&id=Business%20Development%20Activities) The Group adapted to post-pandemic challenges by expanding digital engagement and successfully launched two new managed account strategies with a combined **USD 77 million** AUM - The Group successfully adapted to the COVID-19 and post-COVID-19 environment by expanding digital content offerings and leveraging technology to interact with global investors[40](index=40&type=chunk) - The team actively engaged with investors and potential clients through webinars, one-on-one online meetings, and company communications, receiving positive media coverage from outlets like Bloomberg[41](index=41&type=chunk) - In the second half of 2024 and the first half of 2025, the Group launched two new managed account investment strategies with institutional investors, with a combined Assets Under Management of **USD 77 million**[13](index=13&type=chunk)[44](index=44&type=chunk)[45](index=45&type=chunk) - The Group is actively seeking potential additional investors for these new strategies and is considering launching a commingled fund version[13](index=13&type=chunk)[45](index=45&type=chunk) [Technology Development](index=18&type=section&id=Technology%20Development) In H1 2025, the Group optimized global data center deployment, enhanced cybersecurity, improved core proprietary systems, and completed the Hong Kong office relocation - Optimized the deployment and connectivity of global data centers to enhance cost-effectiveness while maintaining redundancy and stability[46](index=46&type=chunk) - Implemented multiple third-party hardware, software, and network solution upgrades, significantly enhancing cybersecurity resilience[46](index=46&type=chunk) - The development team focused on maintaining and progressively improving key elements of core proprietary systems, including enhancements to front-end applications and backtesting environments[46](index=46&type=chunk) [Market Outlook and Strategy](index=19&type=section&id=Market%20Outlook%20and%20Strategy) US equity valuations are near historical peaks with high earnings growth expectations, while policy uncertainties and low implied volatility suggest future attractive volatility trading opportunities and a need for adaptive investor strategies [Macroeconomic Observations](index=19&type=section&id=Macroeconomic%20Observations) The S&P 500 saw **25%+** returns in 2024, while 2025 brought initial market uncertainty from new US government policies, followed by recovery due to easing measures - In 2024, the S&P 500 Index recorded total returns exceeding **25%** for the second consecutive year, with investors pricing in potentially market-friendly policies[47](index=47&type=chunk) - After the new US government took office in 2025, proposed tariffs and plans to repatriate some labor caused market uncertainty, but subsequent government easing measures led to a recovery in global markets from earlier lows[48](index=48&type=chunk) [Valuation Analysis](index=19&type=section&id=Valuation%20Analysis) US equity valuations are near historical peaks, with a cyclically adjusted P/E ratio of **41x**, driven by high earnings growth expectations from "Magnificent Seven" and AI optimism, but AI capital expenditure may increase competition - US equities' cyclically adjusted price-to-earnings ratio is close to **41x**, placing it in the **98th percentile** of observations since 1900, near historical peaks[49](index=49&type=chunk) - Market expectations for future earnings growth are high, primarily stemming from the "Magnificent Seven" stocks and optimism surrounding artificial intelligence[54](index=54&type=chunk) - Increased capital expenditure related to artificial intelligence could lead to more competition and a higher likelihood of oversupply, impacting future profits[54](index=54&type=chunk) - US market breadth narrowed in the first half of 2025, with the top **10** stocks accounting for over one-third of the S&P 500's market capitalization, and small and mid-cap companies underperforming large-cap stocks[55](index=55&type=chunk) [Policy Impact: Trump 2.0](index=23&type=section&id=Policy%20Impact%3A%20Trump%202.0) The Trump 2.0 administration rapidly advanced policies like the "Big and Beautiful Bill" tax cuts, increasing federal deficit, with ideologically driven appointments and policies like tariffs potentially raising inflation and reducing labor supply - The Trump 2.0 administration has rapidly advanced its policy agenda, including the "Big and Beautiful Bill" tax cut plan, projected to increase the federal deficit by **USD 3.4 trillion** over the next decade (or **USD 5 trillion** if temporary tax relief provisions are extended)[60](index=60&type=chunk) - Government appointments clearly favor individuals loyal to the administration, removing checks and balances typically provided by traditional appointments, potentially leading to more ideologically driven policies[60](index=60&type=chunk)[61](index=61&type=chunk) - Key elements of the Trump agenda are likely to be inflationary, particularly the imposition of tariffs and the deportation of undocumented immigrants, which could raise domestic prices and reduce labor supply[62](index=62&type=chunk) - Markets and consumers are beginning to worry about economic conditions, with a significant rise in breakeven inflation rates and a notable decline in the University of Michigan Consumer Sentiment Index[62](index=62&type=chunk) [Impact on Equity Markets](index=24&type=section&id=Impact%20on%20Equity%20Markets) US equity valuations are high, with **91%** of fund managers deeming the market overvalued and "Magnificent Seven" as the most crowded trade, prompting diversification into outperforming non-US markets like China - **91%** of fund managers believe US equities are overvalued, the highest level since April 2001, with the most crowded trade being long the "Magnificent Seven"[63](index=63&type=chunk) - The US accounts for **65%** of the MSCI All Country World Index (**75%** of the MSCI World Index), and the risk of underperforming the benchmark is a concern for many portfolio managers[63](index=63&type=chunk) - Non-US markets, including Europe and China, have performed well since early 2025. China's equity market trades at lower prices than other major markets, and authorities are implementing coordinated fiscal and monetary stimulus measures[63](index=63&type=chunk)[67](index=67&type=chunk) [Volatility Market Risk Pricing](index=26&type=section&id=Volatility%20Market%20Risk%20Pricing) Volatility market pricing shows 1-month at-the-money implied volatility below long-term averages despite rising downside risks, but increased realized volatility in H1 2025 offers hedging opportunities - Volatility market pricing indicates that 1-month at-the-money implied volatility for almost all indices is below long-term averages, despite increasing market downside risks[69](index=69&type=chunk) - Realized volatility in the first half of 2025 significantly increased compared to the past few years, which could be an interesting entry point for hedging[69](index=69&type=chunk) - The company believes that the combination of near-peak equity valuations, significant policy uncertainty, and low implied volatility is unlikely to persist, anticipating attractive volatility trading opportunities in the future[70](index=70&type=chunk) [Potential Investor Solutions](index=27&type=section&id=Potential%20Investor%20Solutions) Investors need adaptive strategies; the Group suggests volatility strategies, including tail risk protection and relative value volatility, to add value and diversify, especially during market downturns and rising volatility - Investors require portfolios capable of adapting to changing market environments, and increasing tail risk protection is an attractive option designed to provide strong returns during significant market downturns[72](index=72&type=chunk) - The Group's relative value volatility strategy can serve as an important diversification factor, often performing best during periods of rising volatility and disruptive shocks, and exhibiting a negative correlation with equities[73](index=73&type=chunk) - The Group believes the current environment presents an opportunity for investors to reconsider their portfolio construction and long-term asset allocation, potentially benefiting alternative diversification tools such as hedge funds and volatility trading strategies[74](index=74&type=chunk) [Use of Proceeds and Financial Performance Analysis](index=28&type=section&id=Use%20of%20Proceeds%20and%20Financial%20Performance%20Analysis) The Company extended the utilization timeline for HKD 104 million net listing proceeds to December 2025, while HKD 7.3 million from a recent subscription was used for working capital, as revenue decreased by 4% and general and administrative expenses significantly reduced [Use of Proceeds from Listing](index=28&type=section&id=Use%20of%20Proceeds%20from%20Listing) The Company raised **HKD 104 million** net proceeds from its 2020 listing, with the utilization timeline for remaining funds extended to December 31, 2025, due to market conditions and recruitment delays - The Company's shares were listed on October 16, 2020, raising net proceeds of approximately **HKD 104 million**[75](index=75&type=chunk) Utilization of Net Proceeds from Listing (As of June 30, 2025) | Item | Actual Net Proceeds (Thousand HKD) | Amount Utilized (Thousand HKD) | Balance (Thousand HKD) | Expected Timeline | | :--- | :--- | :--- | :--- | :--- | | **Business Expansion:** | | | | | | Hong Kong | 26,403 | 6,297 | 20,106 | Before December 31, 2025 | | Amsterdam, Netherlands | 20,610 | 17,009 | 3,601 | Before December 31, 2025 | | London, UK | 10,711 | 6,663 | 4,048 | Before December 31, 2025 | | Chicago, USA | 8,216 | 1,373 | 6,843 | Before December 31, 2025 | | Business expansion through obtaining an investment firm license from the Dutch Authority for the Financial Markets | 5,403 | 1,958 | 3,445 | Before December 31, 2025 | | Enhancement of IT Systems | 22,302 | 16,083 | 6,219 | Before December 31, 2025 | | Sales and Marketing | 2,745 | 2,745 | – | Before December 31, 2025 | | Investment in Funds Managed by the Group | 7,610 | – | 7,610 | Before December 31, 2025 | | **Total** | **104,000** | **52,128** | **51,872** | | - The expected timeline for utilizing the remaining unutilized net proceeds from the listing has been extended from June 30, 2023, to December 31, 2025, primarily due to recruitment delays and unfavorable market conditions[79](index=79&type=chunk)[80](index=80&type=chunk)[81](index=81&type=chunk) [Use of Proceeds from Subscription](index=28&type=section&id=Use%20of%20Proceeds%20from%20Subscription) The Company completed a December 2024 subscription, issuing **19,500,000** new shares and raising **HKD 7.3 million** net proceeds for general working capital, aligning with planned usage - The Company entered into a subscription agreement with True Partner International Limited on December 27, 2024, to issue **19,500,000** new shares at a subscription price of **HKD 0.400** per share[77](index=77&type=chunk) - The subscription was completed on February 24, 2025, raising net proceeds of approximately **HKD 7.3 million**[77](index=77&type=chunk) - The net proceeds are primarily used to increase the Group's general working capital to cover general operating expenses, including salaries, professional fees, office administrative expenses, and other general expenses for maintaining existing operations[78](index=78&type=chunk) Utilization of Net Proceeds from Subscription (As of June 30, 2025) | Item | Actual Net Proceeds (Thousand HKD) | Amount Utilized (Thousand HKD) | Balance (Thousand HKD) | Expected Timeline | | :--- | :--- | :--- | :--- | :--- | | **Strengthening General Working Capital:** | | | | | | Salaries | 4,234 | 2,458 | 1,776 | Before December 31, 2025 | | Professional Fees | 657 | 412 | 245 | Before December 31, 2025 | | Office Administrative Expenses | 1,168 | 254 | 914 | Before December 31, 2025 | | Other General Expenses for Maintaining Existing Operations | 1,241 | 344 | 897 | Before December 31, 2025 | | **Total** | **7,300** | **3,468** | **3,832** | | [Financial Review](index=46&type=section&id=Financial%20Review) Revenue decreased by **4%** to **HKD 4.8 million** due to product changes and reduced AUM, while gross profit fell **6%** to **HKD 4.3 million**, and general and administrative expenses significantly decreased by **34%** to **HKD 20.9 million** - Revenue for the reporting period was **HKD 4.8 million**, a decrease of approximately **4%** compared to the same period in 2024, primarily due to reduced revenue from funds and managed accounts resulting from changes in product structure[116](index=116&type=chunk) - Gross profit was **HKD 4.3 million**, a **4%** decrease compared to the same period in 2024, mainly due to a reduction in average revenue per unit of Assets Under Management[117](index=117&type=chunk) - General and administrative expenses were **HKD 20.9 million**, a **34%** decrease compared to the same period in 2024, primarily from reduced staff costs, professional, and administrative expenses, as the Group actively reviewed its operations and implemented headcount reductions and efficiency adjustments[118](index=118&type=chunk) - Share of results of associates was **HKD 0**, as the Group disposed of its entire interest in Zhejiang Honglanmu Investment Management Co., Ltd. in October 2024[119](index=119&type=chunk) [Unaudited Condensed Consolidated Financial Statements](index=31&type=section&id=Unaudited%20Condensed%20Consolidated%20Financial%20Statements) For H1 2025, the Group's loss significantly narrowed to HKD 15,967 thousand, with net current assets and total equity at HKD 38,691 thousand, and net cash used in operating activities at HKD 11,876 thousand [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=31&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For the six months ended June 30, 2025, the Group's loss significantly narrowed to **HKD 15,967 thousand**, with total revenue at **HKD 4,784 thousand** and reduced general and administrative expenses Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (For the six months ended June 30) | Metric | 2025 (Thousand HKD) | 2024 (Thousand HKD) | | :--- | :--- | :--- | | Revenue | 4,784 | 5,026 | | Other Income and Gains | 687 | 567 | | Direct Costs | (516) | (479) | | Net Gains/(Losses) from Financial Assets at Fair Value Through Profit or Loss | – | 198 | | General and Administrative Expenses | (20,878) | (31,725) | | Finance Costs | (3) | (36) | | Share of Results of Associates | – | (329) | | Loss Before Income Tax | (15,926) | (26,778) | | Income Tax Expense | (41) | (93) | | Loss for the Period Attributable to Owners of the Company | (15,967) | (26,871) | | Other Comprehensive Income/(Loss) | 1,573 | (363) | | Total Comprehensive Loss for the Period Attributable to Owners of the Company | (14,394) | (27,234) | | Loss Per Share (HK cents) — Basic and Diluted | (3.86) | (6.72) | [Condensed Consolidated Statement of Financial Position](index=32&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, net current assets and total equity decreased to **HKD 38,691 thousand**, with cash and cash equivalents falling to **HKD 16,458 thousand** Condensed Consolidated Statement of Financial Position (As of June 30) | Metric | June 30, 2025 (Thousand HKD) | December 31, 2024 (Thousand HKD) | | :--- | :--- | :--- | | **Current Assets** | | | | Derivative Financial Assets | 321 | 577 | | Trade Receivables | 2,643 | 2,540 | | Other Receivables | 1,847 | 3,121 | | Deposits with Brokers | 7,117 | 12,786 | | Tax Recoverable | 1,102 | 1,143 | | Fixed Bank Deposits | 12,770 | 112 | | Cash and Cash Equivalents | 16,458 | 32,475 | | **Total Current Assets** | **42,258** | **52,754** | | Assets Classified as Held for Sale | 470 | 470 | | **Total Current Assets** | **42,728** | **53,224** | | **Current Liabilities** | | | | Accrued Expenses and Other Payables | 3,883 | 6,775 | | Derivative Financial Liabilities | 154 | 311 | | Lease Liabilities | – | 353 | | **Total Current Liabilities** | **4,037** | **7,439** | | **Net Current Assets** | **38,691** | **45,785** | | **Total Equity** | **38,691** | **45,785** | [Condensed Consolidated Statement of Changes in Equity](index=33&type=section&id=Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) Total equity attributable to owners decreased to **HKD 38,691 thousand** by June 30, 2025, due to period loss and exchange reserve changes, partially offset by **HKD 7,300 thousand** from new share subscriptions Condensed Consolidated Statement of Changes in Equity (For the six months ended June 30) | Item | Share Capital (Thousand HKD) | Share Premium (Thousand HKD) | Group Reorganization Reserve (Thousand HKD) | Exchange Fluctuation Reserve (Thousand HKD) | Capital Reserve (Thousand HKD) | Retained Profits/(Accumulated Losses) (Thousand HKD) | Total (Thousand HKD) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | As of January 1, 2024 (Audited) | 4,000 | 153,074 | 1,145 | (585) | (1,093) | (61,281) | 95,260 | | Loss for the period | – | – | – | – | – | (26,871) | (26,871) | | Other comprehensive loss | – | – | – | (363) | – | – | (363) | | As of June 30, 2024 (Unaudited) | 4,000 | 153,074 | 1,145 | (948) | (1,093) | (88,152) | 68,026 | | As of January 1, 2025 (Audited) | 4,000 | 153,074 | 1,145 | (1,554) | (1,093) | (109,787) | 45,785 | | Loss for the period | – | – | – | – | – | (15,967) | (15,967) | | Other comprehensive income | – | – | – | 1,573 | – | – | 1,573 | | Subscription of new shares | 195 | 7,105 | – | – | – | – | 7,300 | | As of June 30, 2025 (Unaudited) | 4,195 | 160,179 | 1,145 | 19 | (1,093) | (125,754) | 38,691 | [Condensed Consolidated Statement of Cash Flows](index=34&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) For the six months ended June 30, 2025, net cash used in operating activities was **HKD 11,876 thousand**, net cash used in investing activities was **HKD 12,657 thousand**, and net cash from financing activities was **HKD 6,944 thousand** Condensed Consolidated Statement of Cash Flows (For the six months ended June 30) | Item | 2025 (Thousand HKD) | 2024 (Thousand HKD) | | :--- | :--- | :--- | | Net cash used in operating activities | (11,876) | (28,539) | | Net cash used in investing activities | (12,657) | (18,290) | | Net cash generated from/(used in) financing activities | 6,944 | (711) | | Net decrease in cash and cash equivalents | (17,589) | (47,540) | | Cash and cash equivalents at beginning of period | 32,475 | 66,048 | | Effect of foreign exchange rate changes | 1,572 | (389) | | Cash and cash equivalents at end of period | 16,458 | 18,119 | - Net cash generated from financing activities primarily resulted from **HKD 7,300 thousand** from the subscription of new shares[89](index=89&type=chunk) [Notes to the Financial Statements](index=36&type=section&id=Notes%20to%20the%20Financial%20Statements) The notes detail the Company's Cayman Islands incorporation, fund management business, accounting policies, segment revenue, and provide breakdowns for financial statement items, including a narrowed loss before tax and changes in share capital [Company Information](index=36&type=section&id=Company%20Information) The Company, incorporated in the Cayman Islands, is an investment holding company engaged in fund management, derivatives trading, and consulting services, listed on GEM of the HKEX since October 2020 - The Company is a limited liability company incorporated in the Cayman Islands, with its principal business being investment holding[90](index=90&type=chunk) - The Group is principally engaged in fund management business, derivatives trading, and providing consulting services[90](index=90&type=chunk) - The Company's shares were listed on GEM of The Stock Exchange of Hong Kong Limited on October 16, 2020[91](index=91&type=chunk) [Basis of Preparation and Accounting Policies](index=36&type=section&id=Basis%20of%20Preparation%20and%20Accounting%20Policies) The unaudited condensed consolidated financial statements are prepared under HKAS 34 and GEM Listing Rules, consistent with prior accounting policies, with no significant impact from new standards - The unaudited condensed consolidated financial statements have been prepared in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting" issued by the Hong Kong Institute of Certified Public Accountants and the applicable disclosure requirements of the GEM Listing Rules of the Stock Exchange[92](index=92&type=chunk) - The accounting policies adopted in the preparation are consistent with those used in the preparation of the Group's consolidated financial statements for the year ended December 31, 2024, except for the adoption of new standards and interpretations effective from January 1, 2024, which had no significant impact[92](index=92&type=chunk) - The unaudited condensed consolidated financial statements have not been audited by the Company's auditor but have been reviewed by the Company's audit committee[93](index=93&type=chunk) [Segment Information](index=37&type=section&id=Segment%20Information) The Group operates primarily in Hong Kong, with trading offices in Chicago and the Netherlands, generating **HKD 3,143 thousand** and **HKD 1,641 thousand** in revenue from these regions respectively - The Group's primary operating location is Hong Kong, with trading offices in Chicago and the Netherlands to maximize trading opportunities across different global equity markets[94](index=94&type=chunk) Geographical Information of Revenue (For the six months ended June 30) | Region | 2025 (Thousand HKD) | 2024 (Thousand HKD) | | :--- | :--- | :--- | | Hong Kong | 3,143 | 3,412 | | Chicago | 1,641 | 1,614 | | **Total** | **4,784** | **5,026** | Revenue Information from Major Clients (For the six months ended June 30) | Client | 2025 (Thousand HKD) | 2024 (Thousand HKD) | | :--- | :--- | :--- | | Client A | 1,908 | 1,191 | | Client B | 1,641 | 1,321 | | Client C | – | 729 | [Revenue](index=38&type=section&id=Revenue) The Group's revenue primarily comprises management fees (**HKD 2,867 thousand**), performance fees (**HKD 682 thousand**), and consulting service income (**HKD 1,310 thousand**) for the six months ended June 30, 2025 Revenue Analysis (For the six months ended June 30) | Revenue Source | 2025 (Thousand HKD) | 2024 (Thousand HKD) | | :--- | :--- | :--- | | **Revenue from Funds and Managed Accounts** | | | | Management fee income | 2,867 | 3,534 | | Performance fee income | 682 | – | | **Subtotal** | **3,549** | **3,534** | | Revenue from Consulting Services | 1,310 | 840 | | **Subtotal** | **4,859** | **4,374** | | Other sources: Net (Loss)/Gain from Derivative Instruments | (75) | 652 | | **Total Revenue** | **4,784** | **5,026** | Timing of Revenue Recognition (For the six months ended June 30) | Timing of Recognition | 2025 (Thousand HKD) | 2024 (Thousand HKD) | | :--- | :--- | :--- | | At a point in time | 1,310 | 840 | | Over time | 3,549 | 3,534 | | **Total** | **4,859** | **4,374** | [Loss Before Income Tax](index=39&type=section&id=Loss%20Before%20Income%20Tax) Loss before income tax narrowed to **HKD 15,926 thousand** for the six months ended June 30, 2025, primarily due to reduced staff benefits, auditor's remuneration, short-term lease expenses, and exchange losses Loss Before Income Tax is Arrived at After Charging (For the six months ended June 30) | Item | 2025 (Thousand HKD) | 2024 (Thousand HKD) | | :--- | :--- | :--- | | Auditor's remuneration | 550 | 568 | | Short-term lease expenses | 688 | 720 | | Staff benefits (including directors' emoluments) | 11,693 | 18,494 | | Exchange losses | 71 | 451 | | Management fee expenses recognized as direct costs | 516 | 479 | | Interest expense on lease liabilities | 3 | 36 | [Income Tax Expense](index=39&type=section&id=Income%20Tax%20Expense) Income tax expense decreased to **HKD 41 thousand** for the six months ended June 30, 2025, with no tax in Cayman Islands, Hong Kong entities taxed at **8.25%** or **16.5%**, and no provision for other entities Income Tax Expense (For the six months ended June 30) | Item | 2025 (Thousand HKD) | 2024 (Thousand HKD) | | :--- | :--- | :--- | | Current tax — Hong Kong | 41 | 93 | - The Group is not subject to income tax in the Cayman Islands[102](index=102&type=chunk) - Hong Kong entities are subject to profits tax at a rate of **8.25%** or **16.5%**[102](index=102&type=chunk) - No tax provision was made for the Group's entities in the United States, the Netherlands, Singapore, and China due to no estimated taxable profits[102](index=102&type=chunk)[103](index=103&type=chunk) [Dividends](index=40&type=section&id=Dividends) The Board does not recommend any dividend payment for the six months ended June 30, 2025, consistent with the prior year - The Board does not recommend the payment of any dividend for the six months ended June 30, 2025 (for the six months ended June 30, 2024: nil)[103](index=103&type=chunk) [Loss Per Share](index=40&type=section&id=Loss%20Per%20Share) Basic and diluted loss per share improved to **3.86 HK cents** for the six months ended June 30, 2025, from **6.72 HK cents** in the prior year, driven by reduced loss attributable to owners Loss Per Share Calculation Data (For the six months ended June 30) | Item | 2025 (Thousand HKD) | 2024 (Thousand HKD) | | :--- | :--- | :--- | | Loss for the period attributable to owners of the Company | (15,967) | (26,871) | | Weighted average number of ordinary shares | 413,574,586 | 400,000,000 | | Basic and diluted loss per share (HK cents) | (3.86) | (6.72) | - As there were no potential ordinary shares in issue as of June 30, 2025, and 2024, the diluted loss per share is the same as the basic loss per share[106](index=106&type=chunk) [Financial Assets/Liabilities at Fair Value Through Profit or Loss](index=41&type=section&id=Financial%20Assets%2FLiabilities%20at%20Fair%20Value%20Through%20Profit%20or%20Loss) As of June 30, 2025, current derivative financial assets were **HKD 321 thousand** (long positions in China-listed derivatives), and liabilities were **HKD 154 thousand** (short positions), both decreased from December 31, 2024 Financial Assets/Liabilities at Fair Value Through Profit or Loss (As of June 30) | Item | June 30, 2025 (Thousand HKD) | December 31, 2024 (Thousand HKD) | | :--- | :--- | :--- | | Current assets: Long positions in China-listed derivative instruments | 321 | 577 | | Current liabilities: Short positions in China-listed derivative instruments | 154 | 311 | [Trade Receivables](index=41&type=section&id=Trade%20Receivables) Total trade receivables increased to **HKD 2,643 thousand** as of June 30, 2025, with a notable increase in performance fees receivable to **HKD 558 thousand** Trade Receivables Breakdown (As of June 30) | Item | June 30, 2025 (Thousand HKD) | December 31, 2024 (Thousand HKD) | | :--- | :--- | :--- | | Consulting service fees receivable | 931 | 1,113 | | Management fees receivable | 1,154 | 1,427 | | Performance fees receivable | 558 | – | | **Total** | **2,643** | **2,540** | Aging Analysis of Trade Receivables (As of June 30) | Aging | June 30, 2025 (Thousand HKD) | December 31, 2024 (Thousand HKD) | | :--- | :--- | :--- | | Less than 30 days | 2,237 | 1,536 | | 31 to 60 days | 108 | 179 | | 61 to 90 days | 298 | 179 | | Over 90 days | – | 646 | | **Total** | **2,643** | **2,540** | [Other Receivables](index=42&type=section&id=Other%20Receivables) Total other receivables significantly decreased to **HKD 1,847 thousand** as of June 30, 2025, primarily due to reduced deposits and prepayments Other Receivables Breakdown (As of June 30) | Item | June 30, 2025 (Thousand HKD) | December 31, 2024 (Thousand HKD) | | :--- | :--- | :--- | | Deposits | 483 | 979 | | Other receivables | 84 | 138 | | Prepayments | 1,280 | 2,004 | | **Total** | **1,847** | **3,121** | [Accrued Expenses and Other Payables](index=43&type=section&id=Accrued%20Expenses%20and%20Other%20Payables) Total accrued expenses and other payables significantly decreased to **HKD 3,883 thousand** as of June 30, 2025, mainly due to reduced accrued employee benefits and expenses Accrued Expenses and Other Payables Breakdown (As of June 30) | Item | June 30, 2025 (Thousand HKD) | December 31, 2024 (Thousand HKD) | | :--- | :--- | :--- | | Accrued employee benefits | 875 | 2,705 | | Accrued expenses | 2,809 | 3,935 | | Other payables | 199 | 135 | | **Total** | **3,883** | **6,775** | [Share Capital](index=43&type=section&id=Share%20Capital) As of June 30, 2025, total issued shares were **419,500,000**, with share capital of **HKD 4,195 thousand** and share premium of **HKD 160,179 thousand**, including **19,500,000** new shares from a **HKD 7,300 thousand** subscription Changes in Share Capital (As of June 30) | Item | Number of Shares | Share Capital (Thousand HKD) | Share Premium (Thousand HKD) | Total (Thousand HKD) | | :--- | :--- | :--- | :--- | :--- | | As of December 31, 2024, January 1, 2025, and June 30, 2025 | 400,000,000 | 4,000 | 153,074 | 157,074 | | Subscription of new shares | 19,500,000 | 195 | 7,105 | 7,300 | | As of June 30, 2025 (Unaudited) | 419,500,000 | 4,195 | 160,179 | 164,374 | - The subscription was completed on February 24, 2025, with the allotment and issue of **19,500,000** new shares to True Partner International Limited, generating net proceeds of approximately **HKD 7,300 thousand**[110](index=110&type=chunk) [Related Party Transactions](index=44&type=section&id=Related%20Party%20Transactions) For the six months ended June 30, 2025, the Group generated **HKD 1,908 thousand** in management and performance fees from True Partner Fund, an increase from the prior year Related Party Transactions (For the six months ended June 30) | Name of Related Party | Nature of Transaction | 2025 (Thousand HKD) | 2024 (Thousand HKD) | | :--- | :--- | :--- | :--- | | True Partner Fund ("TPF") | Management and performance fee income | 1,908 | 1,190 | | True Partner Volatility Fund ("TPVF") | Management fee income | – | 729 | Key Management Personnel Remuneration (For the six months ended June 30) | Item | 2025 (Thousand HKD) | 2024 (Thousand HKD) | | :--- | :--- | :--- | | Short-term employee benefits | 5,713 | 7,682 | | Post-employment benefits — pension scheme contributions | 77 | 133 | | **Total** | **5,790** | **7,815** | [Approval of Interim Financial Information](index=45&type=section&id=Approval%20of%20Interim%20Financial%20Information) The interim financial information was approved and authorized for issue by the Board on August 28, 2025 - The interim financial information was approved and authorized for issue by the Board on August 28, 2025[115](index=115&type=chunk) [Risk Management and Capital Structure](index=47&type=section&id=Risk%20Management%20and%20Capital%20Structure) The Group manages foreign exchange and credit risks, maintains a stable liquidity position with a 10.6x current ratio and no corporate debt, and has no pledged assets or significant contingent liabilities [Principal Risks and Uncertainties](index=47&type=section&id=Principal%20Risks%20and%20Uncertainties) The Group faces foreign exchange risk from major currency fluctuations and credit risk from counterparty defaults, mitigated by close monitoring and credit approval processes - The Group's revenue, cost of sales, administrative expenses, and investments and borrowings are primarily denominated in HKD, USD, EUR, SGD, RMB, and GBP, exposing it to foreign exchange risk[121](index=121&type=chunk) - Hong Kong operates a linked exchange rate system, ensuring the stability of the HKD against the USD. RMB currency risk arises from deposits related to derivatives transactions settled in RMB[121](index=121&type=chunk) - The Group is exposed to credit risk, which is the risk of financial loss if a counterparty fails to meet its obligations, and mitigates this through close monitoring and credit approval processes[122](index=122&type=chunk) [Liquidity, Current Ratio and Capital Structure](index=47&type=section&id=Liquidity%2C%20Current%20Ratio%20and%20Capital%20Structure) As of June 30, 2025, the Group maintains a stable liquidity position with **HKD 16.5 million** net cash, **HKD 12.8 million** fixed deposits, and a **10.6x** current ratio, with no corporate bank borrowings - The Group monitors and maintains adequate levels of cash and cash equivalents to provide working capital and mitigate the impact of cash flow fluctuations[123](index=123&type=chunk) - As of June 30, 2025, the Group's net cash balance was **HKD 16.5 million**, with fixed bank deposits of **HKD 12.8 million**[123](index=123&type=chunk) - The Group's current ratio (current assets divided by current liabilities) was **10.6x**, with no corporate bank borrowings, and net cash exceeding net debt[123](index=123&type=chunk) - As of June 30, 2025, the Group's shareholders' equity was **HKD 38.7 million**, with a total of **419,500,000** shares in issue[124](index=124&type=chunk) [Pledged Assets](index=48&type=section&id=Pledged%20Assets) As of June 30, 2025, the Group had not pledged any assets as collateral for overdrafts or other loan financing - As of June 30, 2025, the Group had not pledged any assets as collateral for overdrafts or other loan financing[125](index=125&type=chunk) [Future Plans for Material Investments or Capital Assets](index=48&type=section&id=Future%20Plans%20for%20Material%20Investments%20or%20Capital%20Assets) As of June 30, 2025, the Group had no specific plans for material investments or capital assets - As of June 30, 2025, the Group had no specific plans regarding material investments or capital assets[127](index=127&type=chunk) [Contingent Liabilities](index=48&type=section&id=Contingent%20Liabilities) As of June 30, 2025, the Group had no significant contingent liabilities or guarantees - As of June 30, 2025, the Group had no significant contingent liabilities or guarantees[128](index=128&type=chunk) [Other Company Information](index=48&type=section&id=Other%20Company%20Information) The Group made HKD 98,000 in donations, did not recommend an interim dividend, reduced staff to 16, and disclosed directors' and substantial shareholders' interests, share option scheme, and corporate governance compliance [Donations for Charitable or Other Purposes](index=48&type=section&id=Donations%20for%20Charitable%20or%20Other%20Purposes) During the reporting period, the Group made donations of approximately **HKD 98,000** for charitable and community activities, consistent with the prior year - During the reporting period, the Group made donations of approximately **HKD 98,000** for charitable or other purposes such as sponsoring community activities (for the six months ended June 30, 2024: **HKD 98,000**)[129](index=129&type=chunk) [Interim Dividend](index=48&type=section&id=Interim%20Dividend) The Board does not recommend an interim dividend for the reporting period, consistent with the prior year - The Board does not recommend the payment of an interim dividend for the reporting period (for the six months ended June 30, 2024: nil)[130](index=130&type=chunk) [Human Resources Management](index=48&type=section&id=Human%20Resources%20Management) As of June 30, 2025, the Group employed **16** staff, a decrease from **20** in 2024, with remuneration based on merit, and a share option scheme in place - As of June 30, 2025, the Group employed a total of **16** staff members (as of June 30, 2024: **20**)[131](index=131&type=chunk) - Employee remuneration is determined with reference to individual qualifications and performance, ensuring all staff are provided with adequate training and continuous professional opportunities[131](index=131&type=chunk) - The Group has adopted a share option scheme to reward individual employees for their contributions to the Group[132](index=132&type=chunk) [Directors' and Chief Executive's Interests](index=49&type=section&id=Directors%27%20and%20Chief%20Executive%27s%20Interests) As of June 30, 2025, directors and chief executives held significant long positions in Company shares, with Mr. Chan Hang Fai holding **23.02%**, Mr. Tobias Benjamin Hekster **14.08%**, and Mr. Godefriedus Jelte Heijboer **13.36%** Directors' and Chief Executive's Long Positions in Shares (As of June 30, 2025) | Name of Director/Chief Executive | Capacity/Nature of Interest | Number of Ordinary Shares Held | Approximate % of Interest | | :--- | :--- | :--- | :--- | | Tobias Benjamin Hekster | Beneficial owner | 59,049,018 | 14.08% | | Godefriedus Jelte Heijboer | Beneficial owner | 56,055,644 | 13.36% | | Ralph Paul Johan van Put | Interest in controlled corporation | 58,337,399 | 13.91% | | Roy van Bakel | Beneficial owner | 27,686,280 | 6.60% | | Chan Hang Fai | Interest in controlled corporation and beneficial owner | 96,582,908 | 23.02% | [Substantial Shareholders' Interests](index=50&type=section&id=Substantial%20Shareholders%27%20Interests) As of June 30, 2025, substantial shareholders included True Partner International Limited (**19.51%**) and Nardinc Beheer B.V. (**8.63%**), alongside directors' spouses holding interests Substantial Shareholders' Long Positions in Shares (As of June 30, 2025) | Name of Shareholder/Entity | Capacity/Nature of Interest | Number of Ordinary Shares Held | Approximate % of Interest | | :--- | :--- | :--- | :--- | | Franca Kurpershoek-Hekster | Spouse's interest | 59,049,018 | 14.08% | | Wong Rosa Maria | Spouse's interest | 56,055,644 | 13.36% | | True Partner Participation Limited | Beneficial owner | 58,337,399 | 13.91% | | Gong Yunliang | Spouse's interest | 58,337,399 | 13.91% | | True Partner International Limited | Beneficial owner | 81,836,908 | 19.51% | | DSS Financial Management, Inc. | Interest in controlled corporation | 81,836,908 | 19.51% | | DSS Securities, Inc. | Interest in controlled corporation | 81,836,908 | 19.51% | | DSS, Inc. | Interest in controlled corporation | 81,836,908 | 19.51% | | Chan Kong Yuk Kiu | Spouse's interest | 96,582,908 | 23.02% | | Edo Bordoni | Beneficial owner | 29,839,153 | 7.11% | | Anne Joy Bordoni | Spouse's interest | 29,839,153 | 7.11% | | Maria Victoria Diaz Basilio | Spouse's interest | 27,686,280 | 6.60% | | Nardinc Beheer B.V. | Beneficial owner | 36,200,000 | 8.63% | | SomethingEls B.V. | Interest in controlled corporation | 36,200,000 | 8.63% | | ERMA B.V. | Interest in controlled corporation | 36,200,000 | 8.63% | | Dasym Managed Accounts B.V. | Investment manager | 36,200,000 | 8.63% | | F.J. Botman Holding B.V. | Interest in controlled corporation | 36,200,000 | 8.63% | | Franciscus Johannes Botman | Interest in controlled corporation | 36,200,000 | 8.63% | [Share Option Scheme](index=53&type=section&id=Share%20Option%20Scheme) The Company adopted a GEM Listing Rules-compliant share option scheme on September 22, 2020, but no options have been granted since its adoption - The then shareholders of the Company adopted and approved a share option scheme on September 22, 2020, with terms established in accordance with Chapter 23 of the GEM Listing Rules[139](index=139&type=chunk) - No share options have been granted by the Company under the share option scheme since its adoption up to the date of this announcement[139](index=139&type=chunk) [Interests in Competing Business](index=53&type=section&id=Interests%20in%20Competing%20Business) As of June 30, 2025, no directors, substantial shareholders, or their associates held interests in any business competing with the Group - For the six months ended June 30, 2025, and up to the date of this announcement, none of the Company's directors, substantial shareholders, or their respective close associates had any interests in any business (other than the Group's business) that directly or indirectly competes or may compete with the Group's business[140](index=140&type=chunk) [Changes in Share Capital](index=53&type=section&id=Changes%20in%20Share%20Capital) On February 24, 2025, the Company issued **19,500,000** shares to True Partner International Limited, increasing issued share capital to **419,500,000** shares - On February 24, 2025, a total of **19,500,000** shares were allotted and issued to True Partner International Limited[141](index=141&type=chunk) - The subscription shares represented approximately **4.88%** of the Company's issued share capital immediately before the completion of the subscription, and approximately **4.65%** of the Company's issued share capital as enlarged by the allotment and issue of the subscription shares[141](index=141&type=chunk) - The Company's issued share capital immediately following the completion of the subscription was **419,500,000** shares[141](index=141&type=chunk) [Corporate Governance Code](index=54&type=section&id=Corporate%20Governance%20Code) The Group adopted the GEM Listing Rules' Corporate Governance Code, with no material deviation except for the combined Chairman and CEO roles, which the Board believes provides strong leadership - The Group has adopted the principles and code provisions set out in the Corporate Governance Code in Appendix C1 of the GEM Listing Rules[142](index=142&type=chunk) - The Group has no material deviation from the Corporate Governance Code, except for the deviation from code provision C.2.1 of the Corporate Governance Code (the roles of chairman and chief executive should be separate)[142](index=142&type=chunk) - The Directors believe that Mr. Ralph Paul Johan van Put serving concurrently as Chairman and Chief Executive Officer provides strong leadership to the Group, and this arrangement is beneficial and in the overall best interests of the Company and its shareholders[142](index=142&type=chunk) [Directors' Securities Transactions](index=54&type=section&id=Directors%27%20Securities%20Transactions) The Company adopted a code of conduct for directors' securities transactions, and all directors confirmed full compliance for the six months ended June 30, 2025 - The Company has adopted a code of conduct regarding directors' securities transactions on terms no less exacting than the required standard of dealings set out in Rules 5.48 to 5.67 of the GEM Listing Rules[145](index=145&type=chunk) - Following specific enquiries made to all Directors, all Directors have confirmed that they have fully complied with the code of conduct for the six months ended June 30, 2025[145](index=145&type=chunk) [Purchase, Sale or Redemption of Listed Securities](index=55&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20Listed%20Securities) Except for the issuance of **19,500,000** ordinary shares on February 24, 2025, neither the Company nor its subsidiaries purchased, sold, or redeemed any Company securities during the reporting period - On February 24, 2025, the Company completed the additional issuance of **19,500,000** ordinary shares of the Company to True Partner International Limited[146](index=146&type=chunk) - Save as disclosed above, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's securities for the six months ended June 30, 2025[146](index=146&type=chunk) - As at the end of the reporting period, the Company did not hold any treasury shares[147](index=147&type=chunk) [Changes in Directors' Information](index=55&type=section&id=Changes%20in%20Directors%27%20Information) Mr. Chan Hang Fai was appointed Non-executive Director effective June 30, 2025, and Mr. Wei Mingde's external directorships changed effective June 23, 2025 - Mr. Chan Hang Fai was appointed as a Non-executive Director, effective June 30, 2025[148](index=148&type=chunk) - Mr. Wei Mingde was appointed as an external director of China Merchants Group Limited, effective June 23, 2025[148](index=148&type=chunk) - Mr. Wei Mingde resigned as an external director of China COSCO Shipping Corporation Limited, effective June 23, 2025[148](index=148&type=chunk) [Audit Committee](index=55&type=section&id=Audit%20Committee) The Audit Committee, comprising three independent non-executive directors with Ms. Bai Wanting as Chairperson, oversees external auditors, financial statements, internal controls, and risk management, and has reviewed the interim financial results - The Company has established an Audit Committee in compliance with the GEM Listing Rules and the Corporate Governance Code, with written terms of reference[149](index=149&type=chunk) - The Audit Committee members include three independent non-executive directors: Ms. Bai Wanting (Chairperson), Mr. Jeronimus Mattheus Tielman, and Mr. Wei Mingde[149](index=149&type=chunk) - The Committee's primary responsibilities include making recommendations on the appointment and removal of external auditors, reviewing and overseeing financial statements, and monitoring internal control procedures and risk management systems[149](index=149&type=chunk) - The Audit Committee has reviewed the Company's unaudited condensed consolidated financial results for the six months ended June 30, 2025, and considers them to be in compliance with applicable accounting standards and the requirements of the GEM Listing Rules[150](index=150&type=chunk)

[Executive Summary](index=1&type=section&id=Executive%20Summary) The company focuses on high-end brands, drives new energy transformation, and optimizes management, supported by a HKD 1 billion capital injection from Guomao Holdings, which became the controlling shareholder [Company Strategy and Transformation](index=1&type=section&id=Company%20Strategy%20and%20Transformation) Amid intense competition, the company focuses on high-end brands, optimizes management, promotes new energy vehicles, closes inefficient stores, and enhances digital management, supported by a HKD 1 billion capital injection from Guomao Holdings - Facing overcapacity and price wars in the automotive industry, the group focuses on operating high-end and mid-range brands, enhancing core competitiveness and operational quality through optimized management, new energy transformation, closure of inefficient stores, and strengthened centralized procurement and digital management[3](index=3&type=chunk) - The company completed a share issuance to a Guomao Holdings subsidiary, raising approximately **HKD 1 billion**, making Guomao Holdings the controlling shareholder and providing strong capital and resource support. The management headquarters relocated to Xiamen to integrate local resources[3](index=3&type=chunk) [Financial Highlights](index=2&type=section&id=Financial%20Highlights) For the six months ended June 30, 2025, revenue decreased by 10.0% to RMB 8,891.0 million, but gross profit significantly increased by 67.9% to RMB 297.5 million due to reclassification of mortgage loan support service income, while loss for the period widened to RMB 887.5 million Key Financial Data for the Six Months Ended June 30, 2025 | Indicator | June 30, 2025 (RMB million) | Same Period 2024 (RMB million) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Revenue | 8,891.0 | 9,875.6 | -10.0% | | Overall Gross Profit | 297.5 | 177.1 | +67.9% | | Gross Profit Margin | 3.3% | 1.8% | +1.5 percentage points | | Loss for the Period | (887.5) | (634.8) | Loss widened | | Basic Loss Per Share | (0.228) | (0.250) | Loss narrowed | | Net Cash from Operating Activities | 77.9 | 147.1 | -47.1% | - Revenue decrease was primarily due to lower new car selling prices; gross profit increase was mainly due to income from mortgage loan support services being reclassified as revenue starting April 1, 2024[4](index=4&type=chunk) - The widening loss for the period was primarily due to lower new car selling prices, impairment losses on goodwill and intangible assets, and impairment losses on property, plant, and equipment[4](index=4&type=chunk) [Consolidated Financial Statements](index=3&type=section&id=Consolidated%20Financial%20Statements) This section presents the company's consolidated financial performance and position, including income, comprehensive income, and balance sheets [Consolidated Statement of Profit or Loss](index=3&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss) For the six months ended June 30, 2025, the company reported a decrease in revenue, a significant increase in gross profit, but a wider loss for the period due to impairment losses and increased operating loss Consolidated Statement of Profit or Loss for the Six Months Ended June 30, 2025 (RMB thousand) | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | Revenue | 8,891,028 | 9,875,622 | | Cost of Sales | (8,593,504) | (9,698,464) | | Gross Profit | 297,524 | 177,158 | | Other Income | 249,959 | 564,592 | | Selling and Distribution Expenses | (459,658) | (470,564) | | Administrative Expenses | (516,545) | (504,360) | | Impairment Loss on Goodwill and Intangible Assets | (115,000) | — | | Operating Loss | (543,720) | (233,174) | | Finance Costs | (439,912) | (492,060) | | Loss Before Tax | (982,742) | (723,118) | | Income Tax | 95,205 | 88,278 | | Loss for the Period | (887,537) | (634,840) | | Loss for the Period Attributable to Ordinary Equity Holders of the Company | (993,826) | (711,734) | | Basic and Diluted Loss Per Share (RMB cents) | (22.8) | (25.0) | [Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=4&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For the six months ended June 30, 2025, the company reported a loss for the period of RMB 887.5 million, with total comprehensive income slightly lower due to foreign exchange differences Consolidated Statement of Profit or Loss and Other Comprehensive Income for the Six Months Ended June 30, 2025 (RMB thousand) | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | Loss for the Period | (887,537) | (634,840) | | Other Comprehensive Income for the Period (After Tax): | | | | Exchange Differences on Translation of Financial Statements of Overseas Operations in Mainland China | 2,007 | (7,010) | | Other Comprehensive Income for the Period | 2,007 | (7,010) | | Total Comprehensive Income for the Period | (885,530) | (641,850) | | Total Comprehensive Income for the Period Attributable to Ordinary Equity Holders of the Company | (991,819) | (718,744) | [Consolidated Statement of Financial Position](index=5&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the company's non-current and current assets decreased, but net current liabilities improved, while net assets and total equity increased due to capital structure changes Consolidated Statement of Financial Position as of June 30, 2025 (RMB thousand) | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Non-Current Assets** | | | | Property, Plant and Equipment | 5,641,808 | 5,855,395 | | Intangible Assets | 2,159,073 | 2,302,546 | | Goodwill | 494,851 | 534,641 | | Total Non-Current Assets | 13,470,802 | 13,896,931 | | **Current Assets** | | | | Inventories | 3,599,258 | 3,306,990 | | Trade and Bills Receivables | 980,337 | 1,145,086 | | Cash and Cash Equivalents | 872,939 | 573,088 | | Total Current Assets | 13,644,453 | 15,321,305 | | **Current Liabilities** | | | | Loans and Borrowings | 14,631,705 | 17,550,020 | | Total Current Liabilities | 20,212,460 | 23,654,203 | | Net Current Liabilities | (6,568,007) | (8,332,898) | | **Non-Current Liabilities** | | | | Loans and Borrowings | 3,315,440 | 2,419,911 | | Total Non-Current Liabilities | 5,256,752 | 4,494,295 | | Net Assets | 1,646,043 | 1,069,738 | | Total Equity | 1,646,043 | 1,069,738 | [Notes to the Unaudited Interim Financial Statements](index=7&type=section&id=Notes%20to%20the%20Unaudited%20Interim%20Financial%20Statements) This section provides detailed explanations and disclosures for the unaudited interim financial statements, covering general information, accounting policies, and specific financial items [General Information](index=7&type=section&id=General%20Information) This section outlines the registration details and primary business scope of China ZhengTong Auto Services Holdings Limited - The company was incorporated in the Cayman Islands on July 9, 2010, primarily engaging in 4S dealership business, automotive supply chain business, and integrated property business in China[9](index=9&type=chunk) [Basis of Preparation](index=7&type=section&id=Basis%20of%20Preparation) This section details the accounting standards and review process for the interim financial statements, affirming the company's going concern despite losses, supported by the controlling shareholder - These interim financial statements are prepared in accordance with the applicable disclosure provisions of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited and Hong Kong Accounting Standard 34 "Interim Financial Reporting" issued by the Hong Kong Institute of Certified Public Accountants[10](index=10&type=chunk) - As of June 30, 2025, the group incurred a net loss of **RMB 888 million** and recorded net current liabilities of **RMB 6,568 million**, but the directors, based on cash flow forecasts for the next 12 months and financial support from controlling shareholder Guomao Holdings, believe the group has the ability to continue as a going concern[12](index=12&type=chunk) [Changes in Accounting Policies](index=8&type=section&id=Changes%20in%20Accounting%20Policies) This section describes the changes in accounting policies applied to the interim financial statements for the current period and their impact - The amendments to Hong Kong Accounting Standard 21 "The Effects of Changes in Foreign Exchange Rates—Lack of Exchangeability" were applied in the current accounting period but had no significant impact on the interim financial statements[13](index=13&type=chunk) [Revenue](index=9&type=section&id=Revenue) This section details the company's main revenue sources and amounts, explaining the impact of reclassifying mortgage loan support service income - The group's primary revenue sources include passenger car sales, mortgage loan support services, after-sales services, logistics services, and sales of integrated properties[15](index=15&type=chunk) Revenue Breakdown for the Six Months Ended June 30, 2025 (RMB thousand) | Revenue Category | 2025 | 2024 | | :--- | :--- | :--- | | Passenger Car Sales | 6,552,047 | 7,657,625 | | Provision of Mortgage Loan Support Services | 693,024 | 325,635 | | Provision of After-Sales Services | 1,486,857 | 1,698,980 | | Provision of Logistics Services | 155,438 | 180,775 | | Sales of Integrated Properties | 3,662 | 12,597 | | **Total Revenue** | **8,891,028** | **9,875,612** | - Income from providing mortgage loan support services has been reclassified as revenue since April 1, 2024, leading to a significant increase in this revenue item[16](index=16&type=chunk) [Loss Before Tax](index=10&type=section&id=Loss%20Before%20Tax) This section details the major expenses impacting the company's loss before tax, including finance costs, staff costs, and other operating items, explaining property, plant, and equipment impairment - Loss before tax is arrived at after deducting/(crediting) finance costs, staff costs, and other items[18](index=18&type=chunk)[21](index=21&type=chunk) [Finance Costs](index=10&type=section&id=Finance%20Costs) This section presents a breakdown of the company's finance costs for the six months ended June 30, 2025 and 2024 Finance Costs for the Six Months Ended June 30, 2025 (RMB thousand) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Interest on Loans and Borrowings | 403,701 | 461,936 | | Interest on Lease Liabilities | 36,180 | 36,091 | | Other Finance Costs | 11,369 | 16,577 | | Less: Capitalized Interest | (11,338) | (22,544) | | **Total Finance Costs** | **439,912** | **492,060** | [Staff Costs](index=10&type=section&id=Staff%20Costs) This section presents a breakdown of the company's staff costs for the six months ended June 30, 2025 and 2024 Staff Costs for the Six Months Ended June 30, 2025 (RMB thousand) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Salaries, Wages and Other Benefits | 329,455 | 367,388 | | Defined Contribution Retirement Plan Contributions | 30,704 | 28,136 | | Equity-Settled Share-Based Payment Expenses | — | 196 | | **Total Staff Costs** | **360,159** | **395,720** | [Other Items](index=11&type=section&id=Other%20Items) This section details other significant items affecting the company's financial performance, including impairment losses on property, plant, and equipment - For the six months ended June 30, 2025, in view of intense market competition in the automotive industry and evolving customer demand, the group decided to transform or close some 4S stores, recognizing an impairment loss on property, plant and equipment of **RMB 126,376,000**[21](index=21&type=chunk) [Income Tax](index=12&type=section&id=Income%20Tax) This section outlines the company's income tax credit for the reporting period, including corporate income tax rates and preferential policies for its Chinese subsidiaries Income Tax for the Six Months Ended June 30, 2025 (RMB thousand) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Current Tax: Provision for China Income Tax for the Period | 5,045 | 50,446 | | Deferred Tax: Origination and Reversal of Temporary Differences | (100,250) | (138,724) | | **Total Income Tax** | **(95,205)** | **(88,278)** | - The corporate income tax rate for the group's Chinese subsidiaries is **25%**, while Shengze Jietong Supply Chain Co., Ltd., a Chinese automotive logistics provider, enjoys a preferential tax rate of **15%** as a high-tech enterprise[26](index=26&type=chunk) [Loss Per Share](index=12&type=section&id=Loss%20Per%20Share) This section provides the company's basic and diluted loss per share for the six months ended June 30, 2025, and the weighted average number of ordinary shares used in the calculation Loss Per Share for the Six Months Ended June 30, 2025 (RMB cents) | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | Basic Loss Per Share | (22.8) | (25.0) | | Diluted Loss Per Share | (22.8) | (25.0) | - For the six months ended June 30, 2025, the weighted average number of ordinary shares outstanding was **4,367,979,834** shares, a significant increase from **2,850,682,420** shares in the same period of 2024[25](index=25&type=chunk) [Intangible Assets](index=13&type=section&id=Intangible%20Assets) This section details the composition, cost, accumulated amortization, and impairment losses of the company's intangible assets, explaining the impairment due to market changes Carrying Value of Intangible Assets as of June 30, 2025 (RMB thousand) | Category | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Automobile Dealership Rights and Dealership Operating Rights | 1,941,138 | 2,084,689 | | Trademarks | 208,659 | 208,659 | | Software and Others | 9,276 | 9,198 | | **Total** | **2,159,073** | **2,302,546** | - For the six months ended June 30, 2025, an impairment loss on intangible assets of **RMB 75,210,000** was recognized due to changes in the macroeconomic environment, intense competition in the automotive dealership industry, and evolving customer demand[30](index=30&type=chunk) [Goodwill](index=15&type=section&id=Goodwill) This section presents the cost, accumulated impairment losses, and carrying value of the company's goodwill, explaining impairment due to market competition and underperforming stores Carrying Value of Goodwill as of June 30, 2025 (RMB thousand) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cost | 2,006,335 | 2,006,335 | | Accumulated Impairment Losses | 1,511,484 | 1,471,694 | | **Carrying Value** | **494,851** | **534,641** | - For the six months ended June 30, 2025, an impairment loss on goodwill of **RMB 39,790,000** was recognized due to intense competition in the automotive dealership industry and certain stores performing below expectations[30](index=30&type=chunk)[32](index=32&type=chunk) [Other Financial Assets / (Liabilities)](index=16&type=section&id=Other%20Financial%20Assets%20%2F%20%28Liabilities%29) This section details the composition of the company's other financial assets and liabilities, including wealth management products, option contracts, swap contracts, and investments Other Financial Assets / (Liabilities) as of June 30, 2025 (RMB thousand) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Other Financial Assets at Fair Value Through Profit or Loss (Current) | 57,039 | 65,119 | | Other Financial Assets at Fair Value Through Profit or Loss (Non-Current) | 514,406 | 511,829 | | Other Financial Liabilities at Fair Value Through Profit or Loss (Current) | (13,772) | (296) | | Other Financial Liabilities at Fair Value Through Profit or Loss (Non-Current) | (6,040) | (6,320) | - The investment in Dongfeng Logistics (8.66% equity interest) had a fair value of **RMB 501,715,000** as of June 30, 2025, consistent with December 31, 2024[35](index=35&type=chunk) [Inventories](index=17&type=section&id=Inventories) This section details the composition of the company's inventories, including vehicles and spare parts for 4S dealership business and properties under development for sale, and analyzes inventory recognized as expense Inventory Composition as of June 30, 2025 (RMB thousand) | Category | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | 4S Dealership Business — Automobiles | 2,863,745 | 2,655,612 | | 4S Dealership Business — Automobile Spare Parts | 266,930 | 258,865 | | Integrated Property Business — Properties Under Development for Sale | 415,935 | 339,822 | | **Total Inventories** | **3,599,258** | **3,306,990** | Amount of Inventories Recognized as Expense for the Six Months Ended June 30, 2025 (RMB thousand) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Carrying Amount of Inventories Sold | 8,462,197 | 9,369,900 | | Write-down of Inventories | 42,939 | 106,288 | | Reversal of Write-down of Inventories | (5,809) | (3,235) | | **Total** | **8,499,327** | **9,472,953** | [Trade and Bills Receivables](index=18&type=section&id=Trade%20and%20Bills%20Receivables) This section provides an aging analysis of the company's trade and bills receivables and outlines its credit risk management policy Aging Analysis of Trade and Bills Receivables as of June 30, 2025 (RMB thousand) | Aging | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Within 3 Months | 975,952 | 1,139,432 | | Over 3 Months but Within 1 Year | 2,344 | 2,159 | | Over 1 Year | 2,041 | 3,495 | | **Total** | **980,337** | **1,145,086** | - Trade receivables primarily refer to amounts due from individual customers and warranty deposits from automobile manufacturers, with limited credit risk, and management has implemented credit policies for continuous monitoring[39](index=39&type=chunk) [Prepayments, Deposits and Other Receivables](index=19&type=section&id=Prepayments%2C%20Deposits%20and%20Other%20Receivables) This section lists the components of the company's prepayments, deposits, and other receivables, noting that other receivables primarily include supplier rebates from auto manufacturers Prepayments, Deposits and Other Receivables as of June 30, 2025 (RMB thousand) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Prepayments | 296,848 | 272,164 | | Deposits | 292,065 | 239,213 | | Other Receivables | 4,132,282 | 4,326,730 | | Amounts Due from Related Parties | 112 | — | | **Total** | **4,721,307** | **4,838,107** | - Other receivables primarily include supplier rebates receivable from automobile manufacturers totaling **RMB 3,603,323,000**[40](index=40&type=chunk) [Trade and Other Payables](index=19&type=section&id=Trade%20and%20Other%20Payables) This section provides an aging analysis and composition of the company's trade and other payables, including trade payables, contract liabilities, and other payables Trade and Other Payables as of June 30, 2025 (RMB thousand) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Current | | | | Within 3 Months | 2,764,944 | 3,256,258 | | Over 3 Months but Within 6 Months | 518,431 | 634,230 | | Over 6 Months but Within 12 Months | 5,936 | 5,253 | | Trade and Bills Payables | 3,289,311 | 3,895,741 | | Contract Liabilities | 1,215,294 | 948,918 | | Other Payables and Accruals | 458,945 | 572,251 | | Amounts Due to Related Parties | 38,584 | 54,030 | | **Total Current** | **5,002,134** | **5,470,940** | | Non-Current | | | | Long-Term Payables | 85,731 | 108,697 | | **Total** | **5,087,865** | **5,579,637** | [Capital, Reserves and Dividends](index=20&type=section&id=Capital%2C%20Reserves%20and%20Dividends) This section details changes in the company's share capital, including new share issuance for fundraising, and confirms the board's decision not to recommend an interim dividend - The Board of Directors does not recommend the payment of any interim dividend for the reporting periods ended June 30, 2025, and June 30, 2024[46](index=46&type=chunk) [Share Capital](index=20&type=section&id=Share%20Capital) This section details the changes in the company's issued and fully paid ordinary share capital, including new share issuance from a subscription agreement Changes in Issued and Fully Paid Ordinary Shares as of June 30, 2025 (thousand shares/HKD thousand) | Item | 2025 (Number of Shares) | 2025 (Amount) | 2024 (Number of Shares) | 2024 (Amount) | | :--- | :--- | :--- | :--- | :--- | | As of January 1 | 3,346,990 | 334,699 | 2,867,102 | 286,710 | | Issuance of Ordinary Shares | 6,669,061 | 666,906 | 479,888 | 47,989 | | As of June 30 / December 31 | 10,016,051 | 1,001,605 | 3,346,990 | 334,699 | | RMB Equivalent (thousand) | | 901,394 | | 290,228 | - On January 25, 2025, the company entered into a subscription agreement with Cinda Auto (Hong Kong) Limited to issue **6,669,060,524** subscription shares, raising approximately **HKD 1 billion**, with net proceeds of **RMB 913,544,000**[44](index=44&type=chunk)[45](index=45&type=chunk) [Perpetual Bonds](index=21&type=section&id=Perpetual%20Bonds) This section describes the company's perpetual bonds, their terms, interest rates, redemption rights, and accounting classification as equity - Perpetual bonds 1 to 9 are classified as equity because they impose contractual obligations only in certain circumstances at the group's discretion, essentially granting the group an unconditional right to avoid delivering cash or other financial assets[63](index=63&type=chunk) - For the six months ended June 30, 2025, profit attributable to holders of perpetual bonds 3, 5, and 9 was **RMB 63,414,000**, with **RMB 107,127,000** distributed to relevant bondholders[63](index=63&type=chunk) - Excluding perpetual bonds 3, 5, and 9, profit attributable to holders of other perpetual bonds issued by subsidiaries to external third parties was **RMB 43,250,000**, with **RMB 44,582,000** distributed[64](index=64&type=chunk) [Contingent Liabilities](index=25&type=section&id=Contingent%20Liabilities) This section discloses two major contingent liabilities, including a dispute with Beijing Guangze and a loan guarantee, with directors assessing low probability of payment - A dispute with Beijing Guangze involves a contractor's payment notice of **RMB 6 million**, but the company's directors believe the likelihood of being sued or required to pay is low, thus no provision has been made[65](index=65&type=chunk)[66](index=66&type=chunk) - Wuhan Zhengtong provided a guarantee for a fixed asset loan contract between Hubei Bank, Beijing Guangze, and Inner Mongolia Shengze, with an outstanding debt of approximately **RMB 553 million**, but the estimated realizable value of the collateral is **RMB 627 million**, leading directors to assess a low probability of payment[67](index=67&type=chunk)[68](index=68&type=chunk) [Management Discussion and Analysis](index=27&type=section&id=Management%20Discussion%20and%20Analysis) This section provides an in-depth review of the company's operational and financial performance, market conditions, and strategic initiatives for the reporting period [Market Review](index=27&type=section&id=Market%20Review) In the first half of 2025, China's automotive market saw strong growth, particularly in new energy vehicles, driven by policy support and increasing market penetration - In H1 2025, China's passenger car market achieved total retail sales of **10.901 million units**, a year-on-year increase of approximately **10.8%**, driven by policies for vehicle scrapping and replacement[70](index=70&type=chunk) - New energy vehicle sales reached approximately **5.468 million units**, a year-on-year increase of approximately **33.3%**, with market penetration rising to **50.2%**, dominating China's new car sales market[70](index=70&type=chunk) - As of the end of June 2025, the national vehicle parc was approximately **360 million units**, with new energy vehicles accounting for over **10%** at **10.3%**, generating significant new demand for the automotive after-sales market[71](index=71&type=chunk) [Business Review](index=27&type=section&id=Business%20Review) In H1 2025, the group focused on high-end brands, new energy transformation, and management optimization, supported by a HKD 1 billion capital injection from Guomao Holdings, with headquarters relocating to Xiamen - The group continues to focus on operating high-end and mid-range automotive brands, comprehensively enhancing its core competitiveness and operational quality through optimized management structure, promotion of new energy brand transformation, closure and consolidation of inefficient stores, strengthened centralized procurement, and improved digital management capabilities[72](index=72&type=chunk)[73](index=73&type=chunk) - The company completed a share issuance to a Guomao Holdings subsidiary, raising approximately **HKD 1 billion**, making Guomao Holdings the controlling shareholder, and officially relocating its management headquarters to Xiamen to deeply integrate local resources[73](index=73&type=chunk) - The group ranked **21st** in the 2025 China Automobile Dealer Group Top 100 list and **66th** in the 2025 China Top 100 Automobile Dealer Groups—New Energy Sub-list[73](index=73&type=chunk) [Automobile Dealership](index=28&type=section&id=Automobile%20Dealership) The group restructured its automobile dealership business in H1 2025, accelerating the transition to new energy brands, which now account for approximately 8.6% of total new car sales, operating 92 outlets - The group implemented a business architecture restructuring for its automobile dealership brands, combining regional coordination with vertical brand management, vigorously promoting the transformation of stores towards new energy brands, with new energy new car sales accounting for approximately **8.6%** of the group's total sales[74](index=74&type=chunk) - As of June 30, 2025, the group operated **92** outlets across **36** cities in **15** provinces and municipalities nationwide, having also established dealership and after-sales operations for mainstream new energy brands such as AITO Wenjie, Tesla, and NIO[82](index=82&type=chunk) [New Car Sales Business](index=29&type=section&id=New%20Car%20Sales%20Business) The group actively adjusted brand strategies, optimized inventory, and implemented a "online lead generation, offline conversion, private domain retention" marketing approach, resulting in a 0.8% increase in new car sales - The group actively adjusted existing brand operating strategies and marketing methods, focusing on "structural optimization and efficiency improvement," dynamically allocating inventory, and building a regional inventory allocation platform to enhance inventory turnover efficiency[75](index=75&type=chunk) - Marketing adhered to a "online lead generation, offline conversion, private domain retention" strategy, increasing lead acquisition and transaction volume through new media operations, cross-industry traffic import, and community fission[76](index=76&type=chunk) - For the six months ended June 30, 2025, new car sales totaled **26,840 units**, a year-on-year increase of approximately **0.8%**, with **23,747 units** being high-end and mid-range vehicles, an increase of approximately **4.7%** year-on-year[77](index=77&type=chunk) [After-Sales Service Business](index=30&type=section&id=After-Sales%20Service%20Business) The group continuously optimized customer service experience, implemented tiered customer operations, and accelerated digital service channel development, achieving approximately RMB 1,486.9 million in after-sales service revenue - The group continuously optimized customer service experience, refined customer segmentation operations, launched exclusive service packages for high-value customers, and accelerated the construction of digital service channels to improve service efficiency and transparency[78](index=78&type=chunk) - For the six months ended June 30, 2025, cumulative after-sales service instances reached **504,250**, generating after-sales service revenue of approximately **RMB 1,486.9 million**[78](index=78&type=chunk) [Automobile Derivative Business](index=30&type=section&id=Automobile%20Derivative%20Business) The group made positive progress in used car, auto finance, and insurance agency businesses, enhancing efficiency through platform optimization, financial institution partnerships, and product innovation - The group deepened its used car business layout, promoted the transformation and upgrade of used car centers, optimized the auction platform cooperation system, and piloted its self-operated auction platform to improve turnover efficiency and gross profit margins[79](index=79&type=chunk)[80](index=80&type=chunk) - The group continued extensive and in-depth cooperation with various financial institutions to expand auto retail mortgage loan solutions, effectively increasing the total volume and terms of financial products offered[80](index=80&type=chunk) - Dingze Insurance Agency continued to optimize its business structure, implement intensive operations, and piloted a renewal center in Wuhan, with plans to expand to other core cities[81](index=81&type=chunk) [Used Car Business](index=30&type=section&id=Used%20Car%20Business) The group's used car sales increased by approximately 7.2% year-on-year for the six months ended June 30, 2025, driven by enhanced efficiency and platform optimization - For the six months ended June 30, 2025, the group's used car sales increased by approximately **7.2%** year-on-year[80](index=80&type=chunk) [Auto Finance Business](index=31&type=section&id=Auto%20Finance%20Business) For the six months ended June 30, 2025, income from mortgage loan support services increased by approximately 112.8% to RMB 693.0 million, primarily due to reclassification as revenue - For the six months ended June 30, 2025, income from providing mortgage loan support services was approximately **RMB 693.0 million**, a year-on-year increase of approximately **112.8%**, mainly due to its income being reclassified as revenue starting April 1, 2024[80](index=80&type=chunk) [Insurance Agency Business](index=31&type=section&id=Insurance%20Agency%20Business) For the six months ended June 30, 2025, the group's insurance agency income increased by approximately 68.6% to RMB 55.6 million, driven by business structure optimization and centralized operations - For the six months ended June 30, 2025, the group's cumulative insurance agency income reached approximately **RMB 55.6 million**, a year-on-year increase of approximately **68.6%**[81](index=81&type=chunk) [Accelerated New Energy Transformation](index=32&type=section&id=Accelerated%20New%20Energy%20Transformation) The group rapidly expanded its new energy vehicle dealership network by converting existing assets, opening new stores, and securing pre-authorizations for mainstream new energy brands - The group achieved rapid deployment of its new energy vehicle dealership network through the conversion of existing assets, with the Beijing AITO Wenjie User Center and Zhanjiang Jetour store successfully opening in the first half of the year, and new Geely Galaxy authorization in Guangzhou[82](index=82&type=chunk) - As of mid-August 2025, the group has successfully obtained pre-authorizations for **7** mainstream new energy brands in Beijing, Zhuhai, Jieyang, Shantou, and other locations, with related preparatory work fully underway[83](index=83&type=chunk) [Supply Chain Business](index=33&type=section&id=Supply%20Chain%20Business) The group's supply chain subsidiary, Shengze Jietong Supply Chain Co., Ltd., generated approximately RMB 155.4 million in revenue, actively expanding and optimizing vehicle and spare parts warehousing services - Shengze Jietong Supply Chain Co., Ltd. generated operating revenue of approximately **RMB 155.4 million** in the first half of the year, affected by national new energy vehicle subsidy policies and changes in business routes[84](index=84&type=chunk) - In terms of complete vehicle business, the company continued to carry out commercial vehicle road transport and coastal multimodal transport projects, actively promoted the normalization of new energy passenger vehicle shipping, and expanded new complete vehicle transport businesses for FAW Group and Geely Auto brands in multiple regions[84](index=84&type=chunk) - For spare parts warehousing business, the focus was on optimizing spare parts inventory and warehousing costs, improving the inbound and outbound capabilities for automotive spare parts, and continuously expanding warehousing leasing business[84](index=84&type=chunk) [Emerging Businesses](index=33&type=section&id=Emerging%20Businesses) The group is actively pursuing international business expansion and closely monitoring the transformative impact of intelligent connected vehicles to strategically position for future growth - The group is accelerating its international business strategic layout, vigorously expanding its global business footprint, actively striving for domestic main airport export authorizations, overseas local dealership authorizations, and seeking overseas localized joint ventures and cooperation[85](index=85&type=chunk)[86](index=86&type=chunk) - The company closely monitors the transformative impact of intelligent connected vehicles on the future mobility market, aiming to strategically position for development during the industry's transformation period[86](index=86&type=chunk) [Management Enhancement](index=34&type=section&id=Management%20Enhancement) In H1 2025, the group continuously improved management across organizational structure, cost reduction, governance, internal supervision, risk prevention, and digital transformation to optimize operational efficiency - In terms of organizational structure, the group adjusted and optimized the headquarters' departmental structure, streamlined management levels in the automotive dealership segment, and established a flatter business control model[87](index=87&type=chunk) - Regarding cost reduction and efficiency improvement, the group strictly controlled various expense expenditures, expanded diversified financing channels, replaced high-interest debt, and improved operational management and economic efficiency[87](index=87&type=chunk) - In terms of standardized governance, internal supervision, risk prevention, and digital transformation, the group continuously improved its systems and internal control framework, reconstructed its risk and compliance system, and launched the "Cangqiong" digital platform for implementation and promotion[87](index=87&type=chunk)[89](index=89&type=chunk) [Financial Review](index=35&type=section&id=Financial%20Review) This section reviews the company's H1 2025 financial performance, including revenue, costs, gross profit, expenses, loss, assets, liabilities, cash flow, capital expenditure, inventory, and leverage - The group will actively enhance its operating efficiency and consider various methods to improve its current financial position and reduce its leverage level[103](index=103&type=chunk) [Operating Revenue](index=35&type=section&id=Operating%20Revenue) Total operating revenue decreased by 10.0% to RMB 8,891.0 million, primarily due to lower new car selling prices, with new car sales and mortgage loan services contributing 81.5% of total revenue Operating Revenue for the Six Months Ended June 30, 2025 (RMB million) | Item | 2025 | 2024 | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Total Revenue | 8,891.0 | 9,875.6 | -10.0% | | New Car Sales and Mortgage Loan Services Revenue | 7,245.1 | 7,983.3 | -9.2% | | After-Sales Service Revenue | 1,486.9 | 1,699.0 | -12.5% | - The decrease in revenue was primarily due to lower new car selling prices during the period. New car sales and mortgage loan services revenue accounted for **81.5%** of total revenue, with high-end and mid-range automotive sales revenue accounting for approximately **94.3%** of new car sales revenue[88](index=88&type=chunk) [Cost of Sales](index=36&type=section&id=Cost%20of%20Sales) Total cost of sales decreased by 11.4% to RMB 8,593.5 million, primarily due to lower average new car procurement prices and reduced new car and after-sales service revenue Cost of Sales for the Six Months Ended June 30, 2025 (RMB million) | Item | 2025 | 2024 | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Total Cost of Sales | 8,593.5 | 9,698.5 | -11.4% | | New Car Sales Cost | 7,496.5 | 8,497.8 | -11.8% | | After-Sales Service Cost | 981.1 | 1,019.1 | -3.7% | - The decrease in cost of sales was primarily due to lower average new car procurement prices and a corresponding reduction in new car and after-sales service revenue[90](index=90&type=chunk) [Gross Profit and Gross Profit Margin](index=36&type=section&id=Gross%20Profit%20and%20Gross%20Profit%20Margin) Gross profit increased by 67.9% to RMB 297.5 million, and gross profit margin rose by 1.5 percentage points to 3.3%, mainly due to the reclassification of mortgage loan support service income Gross Profit and Gross Profit Margin for the Six Months Ended June 30, 2025 (RMB million) | Indicator | 2025 | 2024 | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Gross Profit | 297.5 | 177.2 | +67.9% | | Gross Profit Margin | 3.3% | 1.8% | +1.5 percentage points | - The increase in gross profit and gross profit margin was primarily due to income from providing mortgage loan support services being reclassified as revenue starting April 1, 2024[91](index=91&type=chunk) [Selling and Distribution Expenses](index=36&type=section&id=Selling%20and%20Distribution%20Expenses) Selling and distribution expenses decreased by approximately 2.3% to RMB 459.7 million, primarily attributable to a reduction in staff costs Selling and Distribution Expenses for the Six Months Ended June 30, 2025 (RMB million) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Selling and Distribution Expenses | 459.7 | 470.6 | - Selling and distribution expenses decreased by approximately **2.3%**, primarily due to a decrease in staff costs[92](index=92&type=chunk) [Administrative Expenses](index=36&type=section&id=Administrative%20Expenses) Administrative expenses increased by approximately 2.4% to RMB 516.5 million, primarily due to impairment losses on property, plant, and equipment Administrative Expenses for the Six Months Ended June 30, 2025 (RMB million) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Administrative Expenses | 516.5 | 504.4 | - Administrative expenses increased by approximately **2.4%**, primarily due to impairment losses on property, plant, and equipment[93](index=93&type=chunk) [Operating Loss](index=37&type=section&id=Operating%20Loss) Operating loss widened to RMB 543.7 million, primarily due to lower new car selling prices, impairment losses on goodwill, intangible assets, and property, plant, and equipment Operating Loss for the Six Months Ended June 30, 2025 (RMB million) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Operating Loss | (543.7) | (233.2) | - The increase in operating loss was primarily due to lower new car selling prices, impairment losses on goodwill and intangible assets, and impairment losses on property, plant, and equipment[94](index=94&type=chunk) [Income Tax](index=37&type=section&id=Income%20Tax) The company recorded an income tax credit of RMB 95.2 million for the six months ended June 30, 2025 Income Tax Credit for the Six Months Ended June 30, 2025 (RMB million) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Income Tax Credit | 95.2 | 88.3 | [Contingent Liabilities](index=37&type=section&id=Contingent%20Liabilities) As of June 30, 2025, the group had no significant contingent liabilities other than those disclosed in note 18 to the interim financial statements - As of June 30, 2025, the group had no significant contingent liabilities other than those disclosed in note 18 to the interim financial statements[96](index=96&type=chunk) [Loss for the Period](index=37&type=section&id=Loss%20for%20the%20Period) Loss for the period widened to RMB 887.5 million, primarily due to lower new car selling prices, impairment losses on goodwill, intangible assets, and property, plant, and equipment Loss for the Period for the Six Months Ended June 30, 2025 (RMB million) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Loss for the Period | (887.5) | (634.8) | - The increase in loss for the period was primarily due to lower new car selling prices, impairment losses on goodwill and intangible assets, and impairment losses on property, plant, and equipment[97](index=97&type=chunk) [Current Assets and Current Liabilities](index=37&type=section&id=Current%20Assets%20and%20Current%20Liabilities) Current assets decreased by RMB 1,676.9 million, while current liabilities decreased by RMB 3,441.7 million, primarily due to a reduction in short-term borrowings Current Assets and Current Liabilities as of June 30, 2025 (RMB million) | Item | June 30, 2025 | December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Current Assets | 13,644.5 | 15,321.3 | -1,676.9 | | Current Liabilities | 20,212.5 | 23,654.2 | -3,441.7 | - Current liabilities decreased by approximately **RMB 3,441.7 million**, primarily due to a reduction in short-term borrowings[98](index=98&type=chunk) [Cash Flow](index=37&type=section&id=Cash%20Flow) Net cash generated from operating activities was RMB 77.9 million, with cash and cash equivalents increasing by RMB 299.9 million to RMB 872.9 million as of June 30, 2025 Net Cash from Operating Activities for the Six Months Ended June 30, 2025 (RMB million) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Net Cash from Operating Activities | 77.9 | 147.1 | - As of June 30, 2025, cash and cash equivalents were approximately **RMB 872.9 million**, an increase of approximately **RMB 299.9 million** compared to December 31, 2024[99](index=99&type=chunk) [Capital Expenditure and Investments](index=38&type=section&id=Capital%20Expenditure%20and%20Investments) Capital expenditure and investments decreased by approximately RMB 189.1 million, primarily due to the completion of construction in progress Capital Expenditure and Investments for the Six Months Ended June 30, 2025 (RMB million) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Capital Expenditure and Investments | 275.5 | 464.6 | - Capital expenditure and investments decreased by approximately **RMB 189.1 million**, primarily due to the completion of construction in progress, leading to reduced investment[101](index=101&type=chunk) [Inventories](index=38&type=section&id=Inventories) Inventories increased by RMB 292.3 million, mainly due to higher year-end vehicle inventory, while average inventory turnover days decreased by 2.4 days, indicating improved efficiency Inventories and Average Inventory Turnover Days as of June 30, 2025 (RMB million/days) | Item | June 30, 2025 | December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Inventories | 3,599.3 | 3,307.0 | +292.3 | | Average Inventory Turnover Days | 48.0 days | 50.4 days | -2.4 days | - The increase in inventories was primarily due to higher year-end vehicle inventory, while average inventory turnover days decreased by **2.4 days**, indicating improved inventory management efficiency[102](index=102&type=chunk) [Exchange Rate Risk](index=38&type=section&id=Exchange%20Rate%20Risk) The group primarily conducts business in RMB and uses swap and option foreign exchange instruments to hedge a portion of its future USD-denominated loan repayments - The group primarily conducts business in RMB and uses swap instruments and option foreign exchange instruments to hedge a portion of its future USD-denominated loan repayments[102](index=102&type=chunk) [Sources of Funds and Net Gearing Ratio](index=39&type=section&id=Sources%20of%20Funds%20and%20Net%20Gearing%20Ratio) The net gearing ratio significantly decreased by 513.1 percentage points, indicating an improvement in the group's leverage level Funding Status and Net Gearing Ratio as of June 30, 2025 (RMB million) | Item | June 30, 2025 | December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Cash and Cash Equivalents, Time Deposits and Pledged Bank Deposits | 4,794.0 | 6,468.4 | -1,674.5 | | Loans and Borrowings, Lease Liabilities | 19,192.5 | 21,314.0 | -2,121.5 | | Net Gearing Ratio | 874.7% | 1,387.8% | -513.1 percentage points | - The net gearing ratio significantly decreased by **513.1 percentage points**, indicating an improvement in the group's leverage level[103](index=103&type=chunk) [Pledged Assets](index=39&type=section&id=Pledged%20Assets) Pledged assets, totaling RMB 7,342.4 million, serve as collateral for loans and borrowings used for daily business operations Pledged Assets as of June 30, 2025 (RMB million) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Pledged Assets | 7,342.4 | 9,447.0 | - Pledged assets serve as collateral for loans and borrowings, used as working capital for daily business operations[104](index=104&type=chunk) [Foreign Currency Investments](index=39&type=section&id=Foreign%20Currency%20Investments) As of June 30, 2025, the group held no foreign currency investments - As of June 30, 2025, the group held no foreign currency investments[105](index=105&type=chunk) [Employees and Remuneration Policy](index=39&type=section&id=Employees%20and%20Remuneration%20Policy) As of June 30, 2025, the company had 5,523 employees with staff costs of RMB 360.2 million, emphasizing talent development, incentive programs, and corporate culture Number of Employees and Staff Costs as of June 30, 2025 (RMB million) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Number of Employees | 5,523 | 5,672 | | Staff Costs (Six Months) | 360.2 | 395.7 | - The group is dedicated to creating an open, inclusive, and vibrant workplace, focusing on value creation, strengthening performance assessment and incentives, and continuously developing the professional depth and innovation capabilities of management and business personnel through a four-tier training system and specialized training mechanisms[106](index=106&type=chunk)[107](index=107&type=chunk) [Future Outlook and Strategies](index=40&type=section&id=Future%20Outlook%20and%20Strategies) This section outlines the group's future strategic direction, focusing on electrification, internationalization, digitalization, marketization, and refinement, supported by its controlling shareholder [Future Outlook and Strategies](index=40&type=section&id=Future%20Outlook%20and%20Strategies) The group plans to accelerate new energy transformation, expand international business, enhance digitalization, and deepen market-oriented reforms to become a leading integrated automotive service provider - The group will accelerate its new energy transformation and upgrade, using cooperation with relevant mainstream new energy brands as a breakthrough to comprehensively promote the new energy upgrade of its stores; simultaneously, it will actively explore service models such as intelligent connected vehicles based on the achievements of the automotive industry research institute[108](index=108&type=chunk) - In terms of internationalization, the group will use automotive export trade as an entry point, actively strive for domestic main airport export authorizations, overseas local dealership authorizations, and seek overseas localized joint ventures and cooperation to form a comprehensive international business layout[108](index=108&type=chunk) - The group will strengthen digital transformation, promote the construction of an integrated business and finance system, vigorously promote digital intelligence platforms, and launch AI customer service to enhance data analysis and refined customer operations capabilities[109](index=109&type=chunk) - The group will deepen market-oriented reforms, optimize organizational structure, stimulate internal corporate vitality, and steadily advance towards its vision of becoming a "leading integrated service provider in the automotive ecosystem"[109](index=109&type=chunk) [Interim Dividend](index=41&type=section&id=Interim%20Dividend) The Board of Directors does not recommend the payment of an interim dividend for the six months ended June 30, 2025 - The Board of Directors does not recommend the payment of an interim dividend for the six months ended June 30, 2025[109](index=109&type=chunk) [Other Information](index=41&type=section&id=Other%20Information) This section covers additional disclosures, including the review of interim results, new share subscription, mandatory general offer, and corporate governance matters [Review of Interim Results](index=41&type=section&id=Review%20of%20Interim%20Results) The company's unaudited condensed consolidated interim financial statements for the six months ended June 30, 2025, have been reviewed by the Audit Committee and KPMG - The company's Audit Committee has reviewed the unaudited condensed consolidated interim financial statements for the six months ended June 30, 2025, which were also reviewed by KPMG in accordance with Hong Kong Standard on Review Engagements 2410[110](index=110&type=chunk) [Subscription of New Shares Under Specific Mandate and Mandatory General Offer](index=42&type=section&id=Subscription%20of%20New%20Shares%20Under%20Specific%20Mandate%20and%20Mandatory%20General%20Offer) This section details the subscription of new shares by Cinda Auto (Hong Kong) Limited for approximately HKD 1 billion, the use of proceeds, and the subsequent mandatory general offer due to the waiver not being granted - The company entered into a subscription agreement with Cinda Auto (Hong Kong) Limited to allot and issue **6,669,060,524** ordinary shares at a subscription price of **HKD 0.15 per share**, for a total cash consideration of approximately **HKD 1 billion**[111](index=111&type=chunk) - The subscription was completed on June 2, 2025, raising net proceeds of approximately **HKD 997 million** (approximately **RMB 914 million**), planned for increasing working capital, strategic investments or industrial mergers and acquisitions, and repayment of existing debts[112](index=112&type=chunk)[113](index=113&type=chunk) - As of June 30, 2025, **RMB 100 million** had been used for working capital, **RMB 270 million** for debt repayment, with the remaining **RMB 544 million** unutilized[114](index=114&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=44&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company%27s%20Listed%20Securities) Except for the connected subscription, neither the company nor its subsidiaries purchased, sold, or redeemed any of its listed securities during the reporting period - Except for the connected subscription, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities during the six months ended June 30, 2025[116](index=116&type=chunk) [Events After Reporting Period](index=44&type=section&id=Events%20After%20Reporting%20Period) This section discloses significant events after the reporting period, including the suspension of share trading due to insufficient public float and changes in board members - Following the close of the offer, the company's public float decreased to approximately **9.29%**, failing to meet the minimum public float requirement of **25%** as stipulated in Listing Rule 8.08(1)(a), leading to the suspension of trading in shares on the Stock Exchange starting July 2, 2025[115](index=115&type=chunk)[118](index=118&type=chunk)[119](index=119&type=chunk) [Suspension of Trading in Shares](index=44&type=section&id=Suspension%20of%20Trading%20in%20Shares) The company's shares were suspended from trading on July 2, 2025, due to the public float falling below 25%, and the company is seeking a waiver and will announce plans to restore it - The company has applied to the Stock Exchange for a temporary waiver from strict compliance with Listing Rule 8.08(1)(a) and has received resumption guidance, and will issue further announcements regarding the restoration of public float in its shares in due course in accordance with the Listing Rules[115](index=115&type=chunk)[119](index=119&type=chunk) [Changes in Directors](index=45&type=section&id=Changes%20in%20Directors) On July 11, 2025, Mr. Chen Hong resigned as Executive Director, and Mr. Zhuang Zhibo and Mr. Wu Xiaoqiang were appointed as Executive Directors - On July 11, 2025, Mr. Chen Hong resigned as an Executive Director due to work reallocation and ceased to be a member of the company's Environmental, Social and Governance Committee. Mr. Zhuang Zhibo and Mr. Wu Xiaoqiang were appointed as Executive Directors on the same day[120](index=120&type=chunk) [Corporate Governance](index=45&type=section&id=Corporate%20Governance) The group is committed to high standards of corporate governance and confirmed compliance with the Corporate Governance Code during the six months ended June 30, 2025 - The group has always been committed to upholding high standards of corporate governance to protect shareholders' interests and enhance corporate value. For the six months ended June 30, 2025, the company complied with the code provisions set out in Part 2 of the Corporate Governance Code[121](index=121&type=chunk) [Directors' Securities Transactions](index=45&type=section&id=Directors%27%20Securities%20Transactions) The company has adopted a Securities Dealing Code for directors, and all current directors confirmed compliance with both the company's code and the Model Code during the reporting period - The company has adopted a Securities Dealing Code for directors' securities transactions, with standards no less stringent than those set out in the Model Code for Securities Transactions by Directors of Listed Issuers in Appendix C3 of the Listing Rules. All current directors confirmed their compliance with the Securities Dealing Code and the Model Code throughout the six months ended June 30, 2025[123](index=123&type=chunk) [Publication of Interim Results Announcement](index=46&type=section&id=Publication%20of%20Interim%20Results%20Announcement) The interim results announcement is available on the HKEX and company websites, with the full interim report to be published later - This interim results announcement is available on the websites of Hong Kong Exchanges and Clearing Limited and the company, and the company's interim report for the six months ended June 30, 2025, containing all information required by the Listing Rules, will be published on the aforementioned websites at a later date[124](index=124&type=chunk) [Acknowledgement](index=46&type=section&id=Acknowledgement) The Board of Directors extends its sincere gratitude to the management team, employees, shareholders, and business partners for their dedication and support - The Board of Directors extends its sincere gratitude to the management team and employees of the group for their commitment and diligence, and to the shareholders and business partners for their strong support of the group[125](index=125&type=chunk)

[Report Cover and Basic Information](index=1&type=section&id=%E6%8A%A5%E5%91%8A%E5%B0%81%E9%9D%A2%E4%B8%8E%E5%9F%BA%E6%9C%AC%E4%BF%A1%E6%81%AF) [Financial Highlights](index=1&type=section&id=%E8%B4%A2%E5%8A%A1%E6%91%98%E8%A6%81) The company's unaudited interim financial performance for the six months ended June 30, 2025, shows significant declines in revenue and gross profit, a narrowed loss attributable to shareholders, and no interim dividend declaration | Indicator | 2025 (RMB million) | 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 10.4 | 26.9 | -61.3% | | Gross Profit | 5.1 | 18.7 | -72.7% | | Gross Profit Margin | 49.0% | 69.5% | -20.5% | | Loss Attributable to Company Shareholders | (32.2) | (41.6) | -22.6% | | Adjusted Non-HKFRS Loss Attributable to Company Shareholders | (33.8) | (40.2) | -15.9% | | Basic and Diluted Loss Per Share (RMB) | (0.02) | (0.04) | -50.0% | - The Board resolved not to declare any interim dividend for the six months ended June 30, 2025[2](index=2&type=chunk) - The Group incurred a loss of **RMB 33.3 million**, primarily due to ongoing expenses for R&D, manufacturing, and commercialization of medical devices[2](index=2&type=chunk) [Unaudited Interim Condensed Consolidated Financial Statements](index=2&type=section&id=%E6%9C%AA%E7%BB%8F%E5%AE%A1%E6%A0%B8%E4%B8%AD%E6%9C%9F%E7%AE%80%E6%98%8E%E7%BB%BC%E5%90%88%E8%B4%A2%E5%8A%A1%E6%8A%A5%E8%A1%A8) [Unaudited Interim Condensed Consolidated Statement of Profit or Loss](index=2&type=section&id=%E6%9C%AA%E7%BB%8F%E5%AE%A1%E6%A0%B8%E4%B8%AD%E6%9C%9F%E7%AE%80%E6%98%8E%E7%BB%BC%E5%90%88%E6%94%B6%E7%9B%8A%E8%A1%A8) This statement presents the unaudited interim condensed consolidated statement of profit or loss for the six months ended June 30, 2025, showing significant declines in revenue and gross profit, but narrowed operating and period losses | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Revenue | 10,405 | 26,868 | | Cost of Sales | (5,288) | (8,215) | | Gross Profit | 5,117 | 18,653 | | Research and Development Expenses | (6,362) | (18,469) | | Selling Expenses | (15,090) | (29,607) | | General and Administrative Expenses | (20,644) | (23,356) | | Operating Loss | (33,238) | (44,666) | | Loss for the Period | (33,291) | (42,728) | | Loss Attributable to Company Shareholders | (32,169) | (41,646) | - Loss for the period narrowed year-on-year from **RMB 42,728 thousand** in 2024 to **RMB 33,291 thousand** in 2025[3](index=3&type=chunk) [Unaudited Interim Condensed Consolidated Statement of Comprehensive Income](index=3&type=section&id=%E6%9C%AA%E7%BB%8F%E5%AE%A1%E6%A0%B8%E4%B8%AD%E6%9C%9F%E7%AE%80%E6%98%8E%E7%BB%BC%E5%90%88%E5%85%A8%E9%9D%A2%E6%94%B6%E7%9B%8A%E8%A1%A8) This statement presents the unaudited interim condensed consolidated statement of comprehensive income for the six months ended June 30, 2025, indicating a year-on-year decrease in total comprehensive expense, primarily due to exchange differences | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Loss for the Period | (33,291) | (42,728) | | Exchange Differences Arising from Translation of the Company | (6,407) | 2,910 | | Exchange Differences Arising from Translation of Subsidiaries | 3,818 | (1,303) | | Other Comprehensive (Expense) Income for the Period, Net of Tax | (2,589) | 1,607 | | Total Comprehensive Expense for the Period | (35,880) | (41,121) | - Exchange differences arising from translation of the Company changed from an income of **RMB 2,910 thousand** in 2024 to an expense of **RMB 6,407 thousand** in 2025[4](index=4&type=chunk) [Unaudited Interim Condensed Consolidated Statement of Financial Position](index=4&type=section&id=%E6%9C%AA%E7%BB%8F%E5%AE%A1%E6%A0%B8%E4%B8%AD%E6%9C%9F%E7%AE%80%E6%98%8E%E7%BB%BC%E5%90%88%E8%B5%84%E4%BA%A7%E8%B4%9F%E5%80%BA%E8%A1%A8) This statement provides the unaudited interim condensed consolidated statement of financial position as of June 30, 2025, showing increases in total assets and liabilities, a slight decrease in equity attributable to company shareholders, and a reduction in net current assets | Indicator | 2025 June 30 (RMB thousand) | 2024 December 31 (RMB thousand) | | :--- | :--- | :--- | | Total Assets | 504,248 | 463,060 | | Total Liabilities | 96,955 | 53,148 | | Total Equity | 407,293 | 409,912 | | Equity Attributable to Company Shareholders | 405,498 | 406,995 | | Net Current Assets | 144,545 | 189,574 | - Current liabilities significantly increased from **RMB 48,338 thousand** as of December 31, 2024, to **RMB 96,592 thousand** as of June 30, 2025, primarily due to increases in trade and other payables and borrowings[6](index=6&type=chunk) - Net current assets decreased from **RMB 189.6 million** as of December 31, 2024, to **RMB 144.5 million** as of June 30, 2025, mainly attributable to a decrease in bank deposits maturing in over three months[6](index=6&type=chunk) [Notes to the Unaudited Interim Condensed Consolidated Financial Information](index=6&type=section&id=%E6%9C%AA%E7%BB%8F%E5%AE%A1%E6%A0%B8%E4%B8%AD%E6%9C%9F%E7%AE%80%E6%98%8E%E7%BB%BC%E5%90%88%E8%B4%A2%E5%8A%A1%E8%B5%84%E6%96%99%E9%99%84%E6%B3%A8) [General Information](index=6&type=section&id=%E4%B8%80%E8%88%AC%E8%B5%84%E6%96%99) This chapter outlines the company's registration details, principal place of business, and core operations, focusing on the R&D, manufacturing, and commercialization of medical devices related to caFFR, caIMR systems, and IVD products - The Company was incorporated as a limited company in the Cayman Islands on April 9, 2021, with its shares listed on the Main Board of the Stock Exchange on July 8, 2022[7](index=7&type=chunk)[8](index=8&type=chunk) - The Company and its subsidiaries are primarily engaged in the R&D, manufacturing, and commercialization of medical devices related to caFFR systems, caIMR systems, and IVD products in China, Europe, and other regions[7](index=7&type=chunk) [Basis of Preparation and Accounting Policies](index=6&type=section&id=%E7%BC%96%E5%88%B6%E5%9F%BA%E5%87%86%E4%B8%8E%E4%BC%9A%E8%AE%A1%E6%94%BF%E7%AD%96) This chapter details that the interim financial information is prepared in accordance with HKAS 34 issued by the HKICPA, noting no significant impact from new amendments applied during the period - The interim financial information has been prepared in accordance with Hong Kong Accounting Standard 34 'Interim Financial Reporting' issued by the Hong Kong Institute of Certified Public Accountants[10](index=10&type=chunk) - The application of amendments to Hong Kong Financial Reporting Standards during this interim period had no significant impact on the Group's financial performance and position[11](index=11&type=chunk) [Segment and Revenue Information](index=7&type=section&id=%E5%88%86%E9%83%A8%E5%8F%8A%E6%94%B6%E7%9B%8A%E8%B5%84%E6%96%99) This chapter details the company's revenue composition, contract liabilities, geographical distribution, and key customer information, indicating product sales as the primary revenue source and China as the main contributor - The Group has only one reportable operating segment, which is the R&D, manufacturing, and commercialization of medical devices related to caFFR systems, caIMR systems, and IVD products[12](index=12&type=chunk) Revenue Recognition Timing | Revenue Recognition Timing | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Product Sales | 9,774 | 26,560 | | Installation and Training Services | 631 | 308 | | **Total Revenue** | **10,405** | **26,868** | Revenue by Geographical Region | Region | 2025 Revenue (RMB thousand) | 2024 Revenue (RMB thousand) | | :--- | :--- | :--- | | China | 9,461 | 26,497 | | Other | 944 | 371 | | **Total** | **10,405** | **26,868** | - As of June 30, 2025, all of the Group's non-current assets are located in China[15](index=15&type=chunk) [Analysis of Expenses](index=9&type=section&id=%E5%BC%80%E6%94%AF%E5%88%86%E6%9E%90) This chapter details the composition of cost of sales, R&D expenses, selling expenses, and general and administrative expenses, highlighting employee benefit expenses and raw material costs as major components Expense Categories | Expense Category | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Employee Benefit Expenses | 26,604 | 45,550 | | Professional Services | 1,406 | 2,391 | | Depreciation and Amortization Expenses | 10,619 | 11,481 | | Raw Material Costs | 2,768 | 7,526 | | Travel Expenses | 2,158 | 3,347 | | Promotion and Entertainment Expenses | 2,153 | 4,422 | | Clinical Trial and Testing Expenses | – | 1,892 | | **Total** | **47,384** | **79,647** | - Total expenses decreased from **RMB 79,647 thousand** in 2024 to **RMB 47,384 thousand** in 2025, a year-on-year decrease of approximately **40.5%**[17](index=17&type=chunk) [Income Tax Expense](index=9&type=section&id=%E6%89%80%E5%BE%97%E7%A8%85%E9%96%8B%E6%94%AF) This chapter details the Group's income tax expense and applicable tax rates, noting that Suzhou Rainmed, a PRC subsidiary, enjoys a 15% preferential tax rate as a high-tech enterprise, with no PRC income tax provision made for the period Income Tax Expense Summary | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Current Income Tax Expense | (9) | (302) | | Deferred Income Tax | – | 16 | | **Income Tax Expense** | **(9)** | **(286)** | - No provision for Hong Kong profits tax has been made for Hong Kong-registered subsidiaries as they had no estimated assessable profits[19](index=19&type=chunk) - Suzhou Rainmed was certified as a high-tech enterprise in December 2024, enjoying a **15%** preferential income tax rate from January 1, 2024, and eligible for a **200%** super deduction for R&D expenses[20](index=20&type=chunk)[21](index=21&type=chunk) [Loss Per Share](index=10&type=section&id=%E6%AF%8F%E8%82%A1%E8%99%A7%E6%90%8D) This chapter calculates basic and diluted loss per share for the six months ended June 30, 2025, showing a narrowed loss per share year-on-year, with diluted loss per share being the same as basic due to anti-dilutive potential ordinary shares Loss Per Share Calculation | Indicator | 2025 (Unaudited) | 2024 (Unaudited) | | :--- | :--- | :--- | | Loss Attributable to Company Shareholders (RMB thousand) | (32,169) | (41,646) | | Weighted Average Number of Ordinary Shares Issued (thousand shares) | 1,401,359 | 1,167,799 | | Basic Loss Per Share (RMB/share) | (0.02) | (0.04) | - Basic loss per share narrowed from **RMB (0.04)** in 2024 to **RMB (0.02)** in 2025[23](index=23&type=chunk) - Diluted loss per share for the six months ended June 30, 2025, and 2024, was the same as basic loss per share due to the anti-dilutive effect of potential ordinary shares[24](index=24&type=chunk) [Trade and Other Receivables](index=11&type=section&id=%E8%B4%B8%E6%98%93%E5%8F%8A%E5%85%B6%E4%BB%96%E5%BA%94%E6%94%B6%E6%AC%BE%E9%A1%B9) This chapter details the composition and aging analysis of trade and other receivables, showing increases in both net and gross trade receivables, with other receivables primarily comprising recoverable VAT and employee loans Trade and Other Receivables Summary | Indicator | 2025 June 30 (RMB thousand) | 2024 December 31 (RMB thousand) | | :--- | :--- | :--- | | Net Trade Receivables | 2,271 | 2,088 | | Net Other Receivables | 19,252 | 16,754 | | **Net Trade and Other Receivables** | **21,505** | **18,486** | Aging Analysis of Trade Receivables | Trade Receivables Aging | 2025 June 30 (RMB thousand) | 2024 December 31 (RMB thousand) | | :--- | :--- | :--- | | Within 30 Days | 977 | 359 | | 30 to 90 Days | 752 | 183 | | 91 to 180 Days | 195 | 411 | | 181 to 365 Days | 44 | 611 | | 1 to 2 Years | 395 | 709 | | **Total** | **2,363** | **2,273** | - Other receivables primarily include employee loans of **RMB 3,251 thousand**, deposits of **RMB 1,307 thousand**, and recoverable VAT of **RMB 13,323 thousand**[26](index=26&type=chunk) [Dividends](index=12&type=section&id=%E8%82%A1%E6%81%AF) This chapter confirms that neither the Company nor any of its group companies paid or declared any dividends for the six months ended June 30, 2025, and 2024 - Neither the Company nor any of its current group companies paid or declared any dividends for each of the six-month periods ended June 30, 2025, and 2024[28](index=28&type=chunk) [Trade and Other Payables](index=13&type=section&id=%E8%B4%B8%E6%98%93%E5%8F%8A%E5%85%B6%E4%BB%96%E5%BA%94%E4%BB%98%E6%AC%BE%E9%A1%B9) This chapter presents the composition and aging analysis of trade and other payables, indicating a significant increase in amounts payable for construction in progress, leading to a substantial rise in total payables Trade and Other Payables Summary | Indicator | 2025 June 30 (RMB thousand) | 2024 December 31 (RMB thousand) | | :--- | :--- | :--- | | Trade Payables | 600 | 559 | | Accrued Staff Salaries and Benefits | 4,775 | 5,675 | | Other Taxes Payable | 4,728 | 4,736 | | Amounts Payable for Construction in Progress | 45,266 | – | | Amounts Payable to Service Providers | – | 6,837 | | Other Accrued Expenses | 1,771 | 3,140 | | **Total** | **57,140** | **20,947** | - Amounts payable for construction in progress increased from zero as of December 31, 2024, to **RMB 45,266 thousand** as of June 30, 2025, being the primary reason for the significant growth in trade and other payables[29](index=29&type=chunk) [Business Review and Outlook](index=14&type=section&id=%E4%B8%9A%E5%8A%A1%E5%9B%9E%E9%A1%BE%E4%B8%8E%E5%B1%95%E6%9C%9B) [Company Overview](index=14&type=section&id=%E5%85%AC%E5%8F%B8%E6%A6%82%E8%A7%88) The company aims to be a global leader in vascular interventional surgical robotics, focusing on the design, development, and commercialization of caFFR, caIMR systems, and IVD products to improve coronary artery disease diagnosis and treatment through innovative medical devices - Core products, the caFFR and caIMR systems, are used to assess the severity of myocardial ischemia caused by coronary artery stenosis and microvascular dysfunction, aiming to replace pressure guidewires and enhance diagnostic efficiency and accuracy[30](index=30&type=chunk) - The caFFR system has received European CE certification, NMPA, and approvals from multiple other countries, while the caIMR system obtained NMPA approval in April 2023, making it the world's first commercially approved minimally invasive IMR system[31](index=31&type=chunk) - In March 2023, the Group acquired a **68.32%** equity interest in Tianjin Yuehekang Biotechnology Co., Ltd., expanding into biochemical in-vitro diagnostic reagents and enhancing its product portfolio[32](index=32&type=chunk) [Commercialization](index=15&type=section&id=%E5%95%86%E4%B8%9A%E5%8C%96) The company continues to expand market channels for caFFR, caIMR, and IVD systems, and despite a year-on-year revenue decrease, has established a broad domestic distribution network, actively pursuing international commercialization, with core products covering over 780 hospitals in China - As of June 30, 2025, the company has established a vast distribution network of **157** domestic distributors, covering over **320** hospitals across **21** provinces, four autonomous regions, and four municipalities in China[34](index=34&type=chunk) - As of June 30, 2025, the company has cumulatively sold and installed core products in over **780** hospitals, with over **1,480** hospitals in China having used its core products[34](index=34&type=chunk) - Proprietary consumables for the caFFR system have obtained self-pay prices for patients in **33** provinces and regions, with **24** of these included in medical insurance reimbursement lists[34](index=34&type=chunk) [Research and Development](index=16&type=section&id=%E7%A0%94%E5%8F%91) The company possesses a dedicated in-house R&D team focused on innovative products in interventional precision diagnosis and treatment, having established four R&D platforms, and as of June 30, 2025, holds **210** granted patents and **67** pending patent applications - The company has four major R&D platforms: medical imaging algorithm and application R&D platform, fluid dynamics simulation computing platform, high-performance device R&D platform, and interventional consumables R&D platform[35](index=35&type=chunk) - As of June 30, 2025, the company holds **210** granted patents (**183** in China, **7** in the US, **4** in Europe, **16** in Japan) and **67** pending patent applications[35](index=35&type=chunk) [Manufacturing](index=16&type=section&id=%E5%88%B6%E9%80%A0) The company operates three GMP-compliant production sites totaling approximately **7,962** square meters, with an estimated annual capacity of **11,375** consoles, **1,130,765** pressure sensors, and over **80** IVD products, and plans to build its own production and R&D base - As of June 30, 2025, the company has three production sites, two in Suzhou, Jiangsu Province, China, and one in Tianjin, China, totaling approximately **7,962** square meters, all compliant with China's GMP standards for medical devices[36](index=36&type=chunk) - The estimated annual production capacity is **11,375** consoles, **1,130,765** pressure sensors, and over **80** categories of IVD products[36](index=36&type=chunk) - In May 2023, the company acquired approximately **20,000** square meters of land to build its own production and R&D base, aiming to integrate existing facilities and enhance overall capabilities[36](index=36&type=chunk) [Products and Pipeline](index=17&type=section&id=%E4%BA%A7%E5%93%81%E5%8F%8A%E7%AE%A1%E7%BA%BF) This chapter details the R&D and commercialization progress of the company's core products: caFFR system, caIMR system, Flash Robot vascular interventional navigation surgical system, and IVD product lines, listing each product's indications, type, and stage Product Pipeline Overview | Product | Indication | Type | Stage | Approval/Launch | | :--- | :--- | :--- | :--- | :--- | | caFFR System | Coronary Artery Disease | III (China) | Post-market Clinical Trials | Launched (CE, NMPA, Korea) | | caIMR System | Coronary Artery Disease | III (China) | Post-market Clinical Trials | Launched (NMPA, Brazil, Korea) | | Flash Robot Vascular Interventional Navigation Surgical System | Coronary Artery Disease | III | Research Refinement Stage | － | | IVD Products | Biochemical In-vitro Diagnostic Reagents | Class II | 85 Registration Certificates Obtained | Launched | | FlashAngio caFFR System Sales | - | - | - | 66 (2025) vs 15 (2024) | | FlashPressure caFFR Pressure Sensor Sales | - | - | - | 6,781 (2025) vs 21,142 (2024) | | FlashAngio caIMR System Sales | - | - | - | 630 (2025) vs 1,731 (2024) | | IVD Product Sales | - | - | - | 2,297 (2025) vs 3,673 (2024) | - The caFFR system obtained European CE certification in September 2019 and NMPA registration in December 2019, with ongoing post-market clinical trials for indication expansion[40](index=40&type=chunk) - The caIMR system is the world's only minimally invasive IMR measurement product to complete confirmatory clinical trials, receiving NMPA approval for commercialization in April 2023[41](index=41&type=chunk) - The IVD product business has obtained **85** Class II registration certificates for biochemical diagnostic reagents and is developing innovative cardiovascular IVD precision diagnostic products such as 'coagulation' and 'copeptin'[43](index=43&type=chunk) [Outlook and Prospects](index=19&type=section&id=%E5%B1%95%E6%9C%9B%E5%8F%8A%E5%89%8D%E6%99%AF) Despite a challenging market in H1 2025, the company achieved certain results, with caIMR system commercialization approval and IVD market entry via Tianjin Yuehekang acquisition; H2 plans include strengthening FFR/IMR advantages, expanding IVD coverage, and pursuing overseas markets for positive full-year growth - The core product, caIMR system, successfully obtained commercialization approval from the NMPA and the Brazilian National Health Surveillance Agency[44](index=44&type=chunk) - The acquisition of Tianjin Yuehekang strategically positions the company in the in-vitro diagnostics field, further enhancing its product pipeline[44](index=44&type=chunk) - The company plans to strengthen its competitive advantages in FFR and IMR, expand IVD product coverage and market presence, actively pursue overseas markets, and enhance domestic market penetration in the second half of the year, aiming for positive full-year growth in 2025[44](index=44&type=chunk) [Management Discussion and Analysis of Financial Performance](index=20&type=section&id=%E8%B4%A2%E5%8A%A1%E8%A1%A8%E7%8E%B0%E7%AE%A1%E7%90%86%E5%B1%82%E8%AE%A8%E8%AE%BA%E4%B8%8E%E5%88%86%E6%9E%90) [Revenue](index=20&type=section&id=%E6%94%B6%E5%85%A5) This chapter analyzes the company's revenue for the six months ended June 30, 2025, showing a significant **61.3%** year-on-year decrease in total revenue, primarily due to reduced sales of FlashPressure caFFR pressure sensors and caIMR systems Revenue by Product Category | Product Category | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | FlashAngio caFFR System Sales | 66 | 15 | | FlashPressure caFFR Pressure Sensor Sales | 6,781 | 21,142 | | FlashAngio caIMR System Sales | 630 | 1,731 | | IVD Product Sales | 2,297 | 3,673 | | Installation and Training Services | 631 | 308 | | **Total** | **10,405** | **26,869** | - Total revenue decreased by approximately **61.3%** year-on-year, mainly due to reduced sales of FlashPressure caFFR pressure sensors and caIMR systems[45](index=45&type=chunk) [Gross Profit and Gross Profit Margin](index=20&type=section&id=%E6%AF%9B%E5%88%A9%E5%8F%8A%E6%AF%9B%E5%88%A9%E7%8E%87) This chapter analyzes the company's gross profit and gross profit margin, showing a **72.7%** year-on-year decrease in gross profit and a decline in gross profit margin to **49.0%**, primarily due to reduced caFFR system sales and depreciation and amortization expenses for new production facilities Gross Profit and Margin Summary | Indicator | 2025 (RMB million) | 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Gross Profit | 5.1 | 18.7 | -72.7% | | Gross Profit Margin | 49.0% | 69.5% | -20.5% | - The decrease in gross profit margin was mainly due to depreciation and amortization expenses for newly utilized major production facilities[46](index=46&type=chunk) [Research and Development Expenses](index=21&type=section&id=%E7%A0%94%E7%99%BC%E9%96%8B%E6%94%AF) This chapter analyzes the company's R&D expenses, showing a year-on-year decrease of approximately **65.6%**, primarily due to reduced employee benefit expenses from cost control and decreased clinical trial and testing expenses due to fewer new R&D projects R&D Expense Categories | Expense Category | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Employee Benefit Expenses | 4,635 | 9,034 | | Raw Material Costs | 356 | 4,674 | | Clinical Trial and Testing Expenses | – | 1,892 | | **Total** | **6,362** | **18,469** | - R&D expenses decreased by approximately **65.6%** year-on-year, mainly due to a **RMB 4.4 million** reduction in employee benefit expenses and a **RMB 1.9 million** reduction in clinical trial and testing expenses[48](index=48&type=chunk) [Selling Expenses](index=22&type=section&id=%E9%8A%B7%E5%94%AE%E9%96%8B%E6%94%AF) This chapter analyzes the company's selling expenses, showing a year-on-year decrease of approximately **49.0%**, primarily due to reduced employee benefit expenses from cost control and decreased marketing development expenses from fewer sales and marketing activities Selling Expense Categories | Expense Category | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Employee Benefit Expenses | 9,713 | 20,204 | | Marketing Development Expenses | 5,126 | 7,817 | | **Total** | **15,090** | **29,607** | - Selling expenses decreased by approximately **49.0%** year-on-year, mainly due to a **RMB 10.5 million** reduction in employee benefit expenses and a **RMB 2.7 million** reduction in marketing development expenses[49](index=49&type=chunk) [General and Administrative Expenses](index=23&type=section&id=%E4%B8%80%E8%88%AC%E8%A1%8C%E6%94%BF%E9%96%8B%E6%94%AF) This chapter analyzes the company's general and administrative expenses, showing a year-on-year decrease of approximately **11.6%**, primarily due to reduced employee benefit expenses associated with a decrease in salaried and administrative staff General and Administrative Expense Categories | Expense Category | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Employee Benefit Expenses | 10,754 | 12,801 | | Depreciation and Amortization Expenses | 6,086 | 5,372 | | Professional Service Expenses | 1,156 | 965 | | Other Expenses | 2,648 | 4,218 | | **Total** | **20,644** | **23,356** | - General and administrative expenses decreased by approximately **11.6%** year-on-year, mainly due to a **RMB 2.0 million** reduction in employee benefit expenses[51](index=51&type=chunk) [Other Income](index=23&type=section&id=%E5%85%B6%E4%BB%96%E6%94%B6%E5%85%A5) This chapter analyzes the company's other income, showing a significant year-on-year decrease, primarily due to a one-off government grant received in 2024 Other Income Summary | Indicator | 2025 (RMB million) | 2024 (RMB million) | | :--- | :--- | :--- | | Other Income | 1.0 | 7.3 | - The decrease in other income was mainly due to a one-off government grant received in 2024[52](index=52&type=chunk) [Income Tax Expense](index=24&type=section&id=%E6%89%80%E5%BE%97%E7%A8%8E%E9%96%8B%E6%94%AF) This chapter analyzes the company's income tax expense, showing a significant year-on-year decrease, primarily due to lower profit generated by a subsidiary from interest income Income Tax Expense Summary | Indicator | 2025 (RMB million) | 2024 (RMB million) | | :--- | :--- | :--- | | Income Tax Expense | 0.01 | 0.3 | - The decrease in income tax expense was mainly due to lower profit generated by a subsidiary from interest income[53](index=53&type=chunk) [Loss for the Period](index=24&type=section&id=%E6%9C%9F%E5%85%A7%E8%99%A7%E6%90%8D) This chapter summarizes the company's loss for the six months ended June 30, 2025, indicating a narrowed loss year-on-year Loss for the Period Summary | Indicator | 2025 (RMB million) | 2024 (RMB million) | | :--- | :--- | :--- | | Loss for the Period | 33.3 | 42.7 | - Loss for the period narrowed from **RMB 42.7 million** in 2024 to **RMB 33.3 million** in 2025[54](index=54&type=chunk) [Liquidity and Financial Resources](index=24&type=section&id=%E6%B5%81%E5%8A%A8%E8%B5%84%E9%87%91%E4%B8%8E%E8%B4%A2%E5%8A%A1%E8%B5%84%E6%BA%90) [Overview of Liquidity and Financial Resources](index=24&type=section&id=%E6%B5%81%E5%8B%95%E8%B3%87%E9%87%91%E5%8F%8A%E8%B2%A1%E5%8B%99%E8%B3%87%E6%BA%90%E6%A6%82%E6%B3%81) This chapter outlines the company's cash flow, showing net cash used in operating activities of **RMB 44.1 million**, primarily impacted by R&D, administrative, and selling expenses, with shareholder contributions and equity financing as main liquidity sources Cash Flow Summary | Cash Flow Category | For the Six Months Ended 2025 June 30 (RMB million) | | :--- | :--- | | Net Cash Used in Operating Activities | (44.1) | | Net Cash From Investing Activities | 0.8 | | Net Cash From Financing Activities | 42.1 | - As of June 30, 2025, cash and cash equivalents amounted to **RMB 53.2 million**, a decrease of **RMB 1.4 million** compared to December 31, 2024[56](index=56&type=chunk) [Gearing Ratio](index=25&type=section&id=%E8%B3%87%E7%94%A2%E8%B2%A0%E5%82%B5%E6%AF%94%E7%8E%87) This chapter states that as of June 30, 2025, the Group's gearing ratio was **0%** because interest-bearing borrowings were less than cash and cash equivalents - As of June 30, 2025, the Group's gearing ratio was **0%**, as interest-bearing borrowings were less than cash and cash equivalents[57](index=57&type=chunk) [Indebtedness](index=25&type=section&id=%E5%82%B5%E5%8B%99) This chapter discloses the company's outstanding borrowing balance and unutilized bank facilities, noting a decrease in lease liabilities Indebtedness Summary | Indicator | 2025 June 30 (RMB million) | | :--- | :--- | | Outstanding Borrowing Balance | 31.6 | | Unutilized Bank Facilities | 75.6 | | Lease Liabilities | 2.2 | - Lease liabilities decreased from **RMB 3.0 million** as of December 31, 2024, to **RMB 2.2 million** as of June 30, 2025, primarily due to lease payments[58](index=58&type=chunk) [Capital Commitments](index=25&type=section&id=%E8%B5%84%E6%9C%AC%E6%89%BF%E6%93%94) This chapter discloses that as of June 30, 2025, the company had contracted but unprovided capital commitments of **RMB 301.3 million**, primarily related to construction and services for its industrial park - As of June 30, 2025, the company had contracted but unprovided capital commitments of **RMB 301.3 million**, related to the purchase of construction and services for the Group's industrial park[59](index=59&type=chunk) [Pledge of Assets and Contingent Liabilities](index=25&type=section&id=%E8%B5%84%E7%94%A2%E6%8A%B5%E6%8A%BC%E4%B8%8E%E6%88%96%E7%84%B6%E8%B2%A0%E5%82%B5) This chapter confirms that as of June 30, 2025, the Group had no pledge of assets or any significant contingent liabilities - As of June 30, 2025, the Group had no pledge of assets[60](index=60&type=chunk) - As of June 30, 2025, the Group had no significant contingent liabilities[61](index=61&type=chunk) [Material Investments, Material Acquisitions and Disposals](index=25&type=section&id=%E9%87%8D%E5%A4%A7%E6%8A%95%E8%B5%84%E3%80%81%E9%87%8D%E5%A4%A7%E6%94%B6%E8%B3%BC%E5%8F%8A%E5%87%BA%E5%94%AE%E4%BA%8B%E9%A0%85) This chapter states that during the reporting period, the company held no material investments and did not undertake any material acquisitions or disposals of subsidiaries, associates, or joint ventures - During the reporting period, the company held no material investments and did not undertake any material acquisitions or disposals of subsidiaries, associates, or joint ventures[62](index=62&type=chunk) [Foreign Exchange Risk](index=25&type=section&id=%E5%A4%96%E5%8C%AF%E9%A2%A8%E9%99%A9) This chapter explains that the company faces foreign currency risk primarily from USD-denominated bank cash, currently without a hedging policy, but management monitors and considers future hedging measures - The company faces foreign currency risk primarily arising from bank cash denominated in US dollars[63](index=63&type=chunk) - The company currently has no foreign currency hedging policy, but management monitors foreign exchange risk and considers future hedging measures[63](index=63&type=chunk) [Future Plans for Material Investments or Capital Assets](index=25&type=section&id=%E9%87%8D%E5%A4%A7%E6%8A%95%E8%B3%87%E6%88%96%E8%B3%87%E6%9C%AC%E8%B3%87%E7%94%A2%E4%B9%8B%E6%9C%AA%E4%BE%86%E8%A8%88%E5%8A%83) This chapter outlines the company's future development strategy, including expanding Chinese and global markets, driving product development, growing through organic means and M&A, and planning to support capital expenditures via internal funds and bank loans - The Group will continue to expand its markets in China and globally, drive product development, and grow through organic development, mergers, and acquisitions[64](index=64&type=chunk) - The company will utilize various financing channels to support capital expenditures, including internal funds and bank loans, with sufficient bank credit facilities currently available[64](index=64&type=chunk) [Employees](index=26&type=section&id=%E5%83%B1%E5%93%A1) This chapter details the company's employee situation as of June 30, 2025, with **214** full-time employees and total employee benefit expenses of approximately **RMB 26.6 million**, highlighting its focus on employee training, development, and a pre-IPO share option scheme to attract and incentivize talent - As of June 30, 2025, the Group employed **214** full-time employees, with total employee benefit expenses of approximately **RMB 26.6 million**[65](index=65&type=chunk) - The company provides continuous education and training programs for management and other employees, assessing salaries, promotion opportunities, and career development based on performance[65](index=65&type=chunk) - The company approved the adoption of a pre-IPO share option scheme on December 10, 2021, aimed at attracting, incentivizing, and retaining talent[65](index=65&type=chunk) [Financial Resources and Use of Proceeds](index=26&type=section&id=%E8%B4%A2%E5%8A%A1%E8%B5%84%E6%BA%90%E4%B8%8E%E8%B5%84%E9%87%91%E7%94%A8%E9%80%94) [2025 Subscription](index=26&type=section&id=2025%E5%B9%B4%E8%AA%8D%E8%B3%BC%E4%BA%8B%E9%A0%85) This chapter discloses that on May 26, 2025, the company entered into a subscription agreement with Apsara Technology Limited, completing the allotment and issuance of **233,559,800** shares, generating net proceeds of **HKD 37.47 million** - On May 26, 2025, the company entered into a subscription agreement with Apsara Technology Limited for the allotment and issuance of **233,559,800** shares at a subscription price of **HKD 0.163** per share[66](index=66&type=chunk) - The subscription was completed on June 20, 2025, with total net proceeds of **HKD 37.47 million** received[66](index=66&type=chunk) [Use of Proceeds from Listing](index=27&type=section&id=%E4%B8%8A%E5%B8%82%E6%89%80%E5%BE%97%E6%AC%BE%E9%A0%85%E7%94%A8%E9%80%94) This chapter states that the company was listed on July 8, 2022, with net proceeds from the global offering of approximately **HKD 78.6 million**, all of which were fully utilized as described in the prospectus by December 31, 2024 - Net proceeds from the global offering of approximately **HKD 78.6 million** were fully utilized by December 31, 2024[67](index=67&type=chunk) [Use of Proceeds from 2025 Subscription](index=27&type=section&id=2025%E5%B9%B4%E8%AA%8D%E8%B3%BC%E4%BA%8B%E9%A0%85%E4%B9%8B%E6%89%80%E5%BE%97%E6%AC%BE%E9%A0%85%E7%94%A8%E9%80%94) This chapter details the planned use of net proceeds from the 2025 subscription, primarily allocated to R&D for existing and new products, business development and marketing, and general working capital Planned Use of 2025 Subscription Proceeds | Planned Use | Percentage of Net Proceeds (%) | Unutilized Proceeds (HKD million) | Expected Timeline | | :--- | :--- | :--- | :--- | | R&D for Existing and New Products and Candidate Products | 20.00 | 7.49 | October 31, 2025 | | Business Development and Marketing for Existing and New Products and Candidate Products | 60.00 | 22.48 | December 31, 2025 | | General Working Capital for the Group | 20.00 | 7.49 | August 31, 2025 | | **Total** | **100.00** | **37.46** | | - As of June 30, 2025, the net proceeds from the 2025 subscription remained unutilized[68](index=68&type=chunk) [Interim Dividend](index=27&type=section&id=%E4%B8%AD%E6%9C%9F%E8%82%A1%E6%81%AF) This chapter confirms that the Board does not recommend the payment of any interim dividend for the six-month period ended June 30, 2025 - The Board does not recommend the payment of any interim dividend for the six-month period ended June 30, 2025[69](index=69&type=chunk) [Events After the Reporting Period](index=28&type=section&id=%E5%A0%B1%E5%91%8A%E6%9C%9F%E9%96%93%E5%BE%8C%E4%BA%8B%E9%A0%85) This chapter notes that, apart from disclosed changes in Board members, the Group has not undertaken any other significant post-reporting period events from June 30, 2025, to the date of this announcement - Except for changes in Board members, the Group has not undertaken any other significant post-reporting period events from June 30, 2025, to the date of this announcement[71](index=71&type=chunk) [Corporate Governance](index=28&type=section&id=%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB) [Corporate Governance Practices](index=28&type=section&id=%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB%E5%B8%B8%E8%A6%8F) This chapter explains the company's commitment to maintaining high standards of corporate governance, having adopted the Corporate Governance Code set out in Appendix C1 of the Listing Rules - The Group is committed to maintaining high standards of corporate governance and has adopted the Corporate Governance Code set out in Appendix C1 of the Listing Rules[72](index=72&type=chunk) [Changes in Board Members](index=28&type=section&id=%E8%91%A3%E4%BA%8B%E6%9C%83%E6%88%90%E5%93%A1%E8%AE%8A%E5%8B%95) This chapter lists Board member changes effective July 15, 2025, including resignations and appointments of the CEO, executive directors, and members of the Remuneration and Nomination Committees - Mr. Huo Yunfei resigned as Chief Executive Officer but remains Chairman of the Board, Executive Director, and Authorised Representative[73](index=73&type=chunk) - Mr. Lü Yonghui resigned as Executive Director but remains Co-Chief Executive Officer[73](index=73&type=chunk) - Mr. Zhu Zeke was appointed Executive Director and Co-Chief Executive Officer, Ms. Duan Jing was appointed Executive Director and a member of the Remuneration and Nomination Committees, and Mr. Zhao Hui was appointed Independent Non-executive Director, Chairman of the Nomination Committee, and a member of the Audit Committee[73](index=73&type=chunk) [Deviation from and Compliance with Corporate Governance Code](index=29&type=section&id=%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB%E5%AE%88%E5%88%99%E5%81%8F%E7%A6%BB%E5%8F%8A%E9%81%B5%E5%AE%88%E6%83%85%E5%86%B5) This chapter explains that the company deviated from the Corporate Governance Code's requirement for separation of Chairman and CEO roles during the reporting period, but has fully complied since Mr. Huo Yunfei's resignation as CEO - During the reporting period, Mr. Huo Yunfei concurrently held the roles of Chairman of the Board and Chief Executive Officer, constituting a deviation from Code Provision C.2.1 of the Corporate Governance Code[74](index=74&type=chunk) - Since Mr. Huo Yunfei ceased to be Chief Executive Officer on July 15, 2025, the company has fully complied with Code Provision C.2.1 of Part 2 of the Corporate Governance Code set out in Appendix C1 to the Listing Rules[74](index=74&type=chunk) [Non-compliance with Listing Rules and Remedial Actions](index=29&type=section&id=%E6%9C%AA%E8%83%BD%E9%81%B5%E5%AE%88%E4%B8%8A%E5%B8%82%E8%A6%8F%E5%89%87%E6%A2%9D%E6%96%87%E5%8F%8A%E8%A3%9C%E6%95%91%E6%8E%AA%E6%96%BD) This chapter notes that the company previously failed to comply with Listing Rules regarding Board composition and committee membership due to an independent non-executive director's resignation, but has since regained compliance through the appointment of a new independent non-executive director and committee adjustments - Following Mr. Li Haomin's resignation as an independent non-executive director, the company failed to comply with Listing Rules 3.10(1), 3.10A, 3.21, 3.25, and 3.27A[76](index=76&type=chunk) - Following the appointment of Mr. Zhao Hui as an independent non-executive director and changes in the composition of Board committees effective July 15, 2025, the company has regained compliance with the relevant Listing Rules[76](index=76&type=chunk) [Model Code for Securities Transactions](index=30&type=section&id=%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) This chapter confirms that the company has adopted the Model Code set out in Appendix C3 of the Listing Rules, and all directors complied with it during the reporting period - The company has adopted the Model Code set out in Appendix C3 of the Listing Rules, and all directors complied with it for the six months ended June 30, 2025[77](index=77&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=30&type=section&id=%E8%B3%BC%E8%B2%B7%E3%80%81%E5%87%BA%E5%94%AE%E6%88%96%E8%B4%96%E5%9B%9E%E6%9C%AC%E5%85%AC%E5%8F%B8%E4%B9%8B%E4%B8%8A%E5%B8%82%E8%AD%89%E5%88%B8) This chapter confirms that for the six months ended June 30, 2025, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities - For the six months ended June 30, 2025, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[78](index=78&type=chunk) [Audit Committee](index=30&type=section&id=%E5%AF%A9%E6%A0%B8%E5%A7%94%E5%91%98%E6%9C%83) This chapter describes the Audit Committee's composition and responsibilities, confirming its review of the Group's unaudited condensed interim financial information for the six months ended June 30, 2025 - The Audit Committee comprises three independent non-executive directors: Mr. Liao Chuanjiang (Chairman), Mr. Chen Xuefeng, and Mr. Zhao Hui[79](index=79&type=chunk) - The Audit Committee's primary responsibilities include assisting the Board in providing independent opinions on financial reporting procedures, internal control, and risk management systems, and overseeing the audit process[79](index=79&type=chunk) - The Audit Committee has reviewed the Group's unaudited condensed interim financial information for the six months ended June 30, 2025[79](index=79&type=chunk) [Publication of Interim Results Announcement and Interim Report](index=30&type=section&id=%E5%88%8A%E7%99%BC%E4%B8%AD%E6%9C%9F%E6%A5%AD%E7%B8%BE%E5%85%AC%E5%91%8A%E5%8F%8A%E4%B8%AD%E6%9C%9F%E5%A0%B1%E5%91%8A) This chapter states that the interim results announcement has been published on the Stock Exchange and company websites, and the 2025 interim report, containing all required information, will be dispatched to shareholders and posted on relevant websites in due course - This interim results announcement is published on the Stock Exchange website (www.hkexnews.hk) and the Company's website (www.rainmed.com)[80](index=80&type=chunk) - The 2025 interim report, containing all information required by the Listing Rules, will be dispatched to shareholders and posted on the respective websites of the Stock Exchange and the Company in due course[80](index=80&type=chunk) [Appendix](index=31&type=section&id=%E9%99%84%E9%8C%84) [Definitions](index=31&type=section&id=%E9%87%8B%E7%BE%A9) This chapter provides definitions for key terms and abbreviations used in this interim results announcement to ensure clear understanding of the report content - This chapter provides definitions for key terms such as 'Company', 'CAD', 'caFFR', 'caIMR', 'CE Mark', 'FFR', 'IMR', 'IVD', 'KOL', 'Listing Rules', 'NMPA', 'PCI', 'RMB', 'Shares', 'STEMI', and 'Stock Exchange'[81](index=81&type=chunk)[82](index=82&type=chunk)[83](index=83&type=chunk)[86](index=86&type=chunk) [Board Approval and Composition](index=34&type=section&id=%E8%91%A3%E4%BA%8B%E6%9C%83%E6%89%B9%E5%87%86%E5%8F%8A%E7%B5%84%E6%88%90) This chapter confirms the Board's approval of this announcement on August 28, 2025, and lists the Board's composition as of the announcement date - This announcement was approved by the Board on August 28, 2025[85](index=85&type=chunk) - As of the announcement date, the Board comprises three executive directors, three non-executive directors, and three independent non-executive directors[85](index=85&type=chunk)

[Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=1&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) The Group's profit for the period significantly decreased by 33.6% to HK$2,223 thousand, despite a 70.3% revenue increase, primarily due to higher staff, depreciation, and finance costs Key Financial Data from Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income | Indicator | H1 2025 (HK$ thousand) | H1 2024 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 72,744 | 42,705 | +70.3% | | Other income and gains | 3,822 | 2,303 | +65.9% | | Staff costs | (13,047) | (8,733) | +49.4% | | Depreciation expense | (40,696) | (17,889) | +127.5% | | Operating profit | 15,578 | 15,544 | +0.2% | | Finance costs | (13,350) | (12,139) | +10.0% | | Profit for the period | 2,223 | 3,349 | -33.6% | | Total comprehensive income for the period | 1,233 | 3,068 | -59.8% | | Earnings per share (HK cents) | 0.03 | 0.10 | -70.0% | [Condensed Consolidated Statement of Financial Position](index=3&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, total assets slightly increased, net current liabilities improved, and net assets grew marginally, with reduced bank borrowings and lease liabilities, indicating a relatively stable financial structure Key Financial Data from Condensed Consolidated Statement of Financial Position | Indicator | June 30, 2025 (HK$ thousand) | Dec 31, 2024 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Non-current assets | 987,965 | 1,005,764 | -1.8% | | Current assets | 90,803 | 69,500 | +30.6% | | Current liabilities | 263,019 | 263,395 | -0.1% | | Net current liabilities | (172,216) | (193,895) | +11.3% (improvement) | | Non-current liabilities | 323,752 | 321,105 | +0.8% | | Total assets less current liabilities | 815,749 | 811,869 | +0.5% | | Bank borrowings | 128,000 | 144,000 | -11.1% | | Lease liabilities | 338,741 | 353,351 | -4.1% | | Share capital | 317,635 | 317,635 | 0.0% | | Reserves | 174,362 | 173,129 | +0.7% | | Total equity | 491,997 | 490,764 | +0.2% | [Notes to the Unaudited Condensed Consolidated Financial Statements](index=5&type=section&id=Notes%20to%20the%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) This section details financial statement notes, including company information, accounting policies, fair value measurement, segment reporting, asset/liability changes, and going concern assumptions with risk mitigation [1. Company Information](index=5&type=section&id=1.%20Company%20Information) Asia Graphene Group Limited is a Bermuda-incorporated investment holding company with diverse operations, including property investment, horticultural services, and property management, controlled by Mr. Wong Ping Kwong - The company is an investment holding company, with principal subsidiary activities covering property investment, horticultural services and plant sales, and property management and related services[7](index=7&type=chunk) - The ultimate controlling company is controlled by **Mr. Wong Ping Kwong** (controlling shareholder)[7](index=7&type=chunk) [2. Basis of Preparation](index=5&type=section&id=2.%20Basis%20of%20Preparation) Interim financial statements are prepared under HKAS 34 and Listing Rules, with consistent accounting policies; despite net current liabilities, the Board deems the going concern basis appropriate due to financial resources and support - Interim financial statements are prepared in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting" issued by the Hong Kong Institute of Certified Public Accountants and the Listing Rules of the Stock Exchange[8](index=8&type=chunk) - As of June 30, 2025, the Group recorded **net current liabilities of approximately HK$172,216 thousand**, raising significant doubt about its ability to continue as a going concern[9](index=9&type=chunk) - The Board considers the going concern basis appropriate, anticipating sufficient financial resources, cost reduction measures, financial support from the controlling shareholder, and banks not demanding immediate repayment of borrowings[9](index=9&type=chunk)[12](index=12&type=chunk) [3. Application of Amendments to Hong Kong Financial Reporting Standards](index=6&type=section&id=3.%20Application%20of%20Amendments%20to%20Hong%20Kong%20Financial%20Reporting%20Standards) The Group first applied HKAS 21 (Amendment) — Lack of Exchangeability during the period, which had no significant impact on financial position or performance - First application of Hong Kong Accounting Standard 21 (Amendment) — Lack of Exchangeability[11](index=11&type=chunk) - The application of this amendment had no significant impact on the Group's financial position and performance[11](index=11&type=chunk) [4. Fair Value Measurement](index=7&type=section&id=4.%20Fair%20Value%20Measurement) Financial assets and liabilities' carrying amounts approximate fair values; investment properties (Hong Kong residential units) are measured at Level 3 fair value using the income approach, with unchanged valuation methods - Investment properties (Hong Kong residential units) are measured at Level 3 fair value, using the income approach for valuation[15](index=15&type=chunk)[16](index=16&type=chunk) - Key inputs include capitalization rates, average monthly rent on a net floor area basis, and the reversionary potential of property rights[16](index=16&type=chunk) Fair Value of Investment Properties (Hong Kong Residential Units) | Date | Amount (HK$ thousand) | | :--- | :--- | | June 30, 2025 | 355,500 | | Dec 31, 2024 | 355,000 | [5. Revenue and Segment Reporting](index=8&type=section&id=5.%20Revenue%20and%20Segment%20Reporting) The Group operates four segments, with total revenue increasing by 70.3% to HK$72,744 thousand, driven by property investment (sub-leasing) and new construction services, alongside significant growth in China revenue - The Group has four operating segments: property investment, horticultural services and plant sales, property management and other related services, and construction services (a new business established in H2 2024)[18](index=18&type=chunk) Revenue from Contracts with Customers by Major Products or Services | Product or Service | H1 2025 (HK$ thousand) | H1 2024 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Provision of construction services | 1,771 | – | N/A | | Provision of property management and other related services | 9,009 | 9,639 | -6.5% | | Provision of horticultural services and sales of plants | 3,278 | 3,043 | +7.7% | | Revenue from contracts with customers | 14,058 | 12,682 | +10.8% | | Rental income from leased properties under sub-leasing arrangements | 54,784 | 26,567 | +106.2% | | Rental income from investment properties | 3,902 | 3,456 | +12.9% | | **Total Revenue** | **72,744** | **42,705** | **+70.3%** | - Property investment segment revenue significantly increased by **95.5% to HK$58,686 thousand**, primarily due to the commencement of sub-leasing operations at Silicon Valley Industrial Park[23](index=23&type=chunk)[25](index=25&type=chunk)[66](index=66&type=chunk) - Revenue from China (excluding Hong Kong) significantly increased from **HK$36,206 thousand in H1 2024 to HK$65,564 thousand in H1 2025**[31](index=31&type=chunk) [6. Other Income and Gains](index=14&type=section&id=6.%20Other%20Income%20and%20Gains) Other income and gains increased by 65.9% to HK$3,822 thousand, mainly driven by a significant rise in imputed interest income from lease deposits Details of Other Income and Gains | Item | H1 2025 (HK$ thousand) | H1 2024 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Interest income from bank deposits | 206 | 318 | -35.2% | | Imputed interest income from lease deposits paid | 2,681 | 1,364 | +96.5% | | Others | 935 | 621 | +50.6% | | **Total** | **3,822** | **2,303** | **+65.9%** | [7. Finance Costs](index=15&type=section&id=7.%20Finance%20Costs) Finance costs increased by 10% to HK$13,350 thousand, mainly due to higher interest on lease liabilities from an extended recognition period, despite reduced bank borrowing interest Details of Finance Costs | Item | H1 2025 (HK$ thousand) | H1 2024 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Interest on bank borrowings | 3,222 | 5,926 | -45.6% | | Interest paid on lease liabilities | 10,038 | 6,213 | +61.6% | | Interest on loans from controlling shareholder | 90 | – | N/A | | **Total** | **13,350** | **12,139** | **+10.0%** | [8. Income Tax Expense](index=15&type=section&id=8.%20Income%20Tax%20Expense) Income tax expense was only HK$5 thousand, attributed to sufficient tax losses in Hong Kong and preferential SME tax rates for Chinese subsidiaries - Income tax expense for the period was **HK$5 thousand** (H1 2024: HK$56 thousand)[36](index=36&type=chunk) - No provision for Hong Kong profits tax was made due to sufficient tax losses carried forward or no taxable profits[36](index=36&type=chunk) - China corporate income tax is provided at preferential tax rates for small and medium-sized enterprises[36](index=36&type=chunk) Preferential Corporate Income Tax Rates in China | Profit Range (RMB) | Applicable Tax Rate | | :--- | :--- | | Below 1 million | 2.5% | | 1 million to 3 million | 5% | | Above 3 million | 25% | [9. Profit for the Period](index=16&type=section&id=9.%20Profit%20for%20the%20Period) Profit for the period is reported after various expenses, notably a 132.7% increase in investment property depreciation to HK$40,015 thousand and a 70.4% decrease in legal and professional service fees Items Deducted/Included in Profit for the Period | Item | H1 2025 (HK$ thousand) | H1 2024 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Cost of inventories sold or consumed | 407 | 432 | -5.8% | | Depreciation of property, plant and equipment and right-of-use assets | 681 | 695 | -2.0% | | Depreciation of investment properties | 40,015 | 17,194 | +132.7% | | Directors' emoluments | 1,051 | 1,390 | -24.4% | | Legal and professional service fees | 404 | 1,365 | -70.4% | [10. Earnings Per Share](index=16&type=section&id=10.%20Earnings%20Per%20Share) Basic and diluted earnings per share decreased from **HK$0.10 cents in H1 2024 to HK$0.03 cents in H1 2025**, due to lower profit attributable to owners and an increased weighted average number of ordinary shares - Profit attributable to owners of the company decreased from **HK$3,673 thousand in H1 2024 to HK$2,223 thousand in H1 2025**[38](index=38&type=chunk) - The weighted average number of ordinary shares increased from **3,829,305 thousand shares in H1 2024 to 6,352,702 thousand shares in H1 2025**[38](index=38&type=chunk) - Basic and diluted earnings per share were **HK$0.03 cents** (H1 2024: HK$0.10 cents)[4](index=4&type=chunk)[38](index=38&type=chunk) [11. Interim Dividend](index=17&type=section&id=11.%20Interim%20Dividend) The Board does not recommend any interim dividend for the reporting period, consistent with the prior year - The Board does not recommend the payment of an interim dividend for H1 2025 (H1 2024: nil)[39](index=39&type=chunk) [12. Right-of-Use Assets](index=17&type=section&id=12.%20Right-of-Use%20Assets) As of June 30, 2025, right-of-use assets (land and buildings) had a carrying amount of HK$1,324 thousand, with typical lease agreements of one to three years - The carrying amount of right-of-use assets (land and buildings) was **HK$1,324 thousand** (Dec 31, 2024: HK$1,810 thousand)[40](index=40&type=chunk) - Total cash outflow for leases during the period was **HK$514 thousand**[41](index=41&type=chunk) [13. Investment Properties](index=18&type=section&id=13.%20Investment%20Properties) Total investment properties were HK$728,046 thousand, with fair value-measured Hong Kong residential units slightly appreciating, while cost-measured sub-leased properties decreased due to depreciation; HK$355,500 thousand were pledged as collateral - Total investment properties amounted to **HK$728,046 thousand** (Dec 31, 2024: HK$748,905 thousand)[42](index=42&type=chunk) - Hong Kong residential units measured at fair value model were valued at **HK$355,500 thousand**, with a fair value gain of **HK$500 thousand** during the period[42](index=42&type=chunk) - Leased properties under sub-leasing arrangements measured at cost model had a carrying amount of **HK$372,546 thousand**, with depreciation expense of **HK$40,015 thousand** during the period[42](index=42&type=chunk)[44](index=44&type=chunk) - Approximately **HK$355,500 thousand** of investment properties have been pledged as collateral for bank borrowings[43](index=43&type=chunk) [14. Deposits Paid to Landlords](index=21&type=section&id=14.%20Deposits%20Paid%20to%20Landlords) Deposits paid to landlords totaled HK$257,347 thousand, related to lease agreements and connected transactions; the Board assessed no significant credit risk, thus no expected credit loss provision - Deposits paid to landlords amounted to approximately **HK$257,347 thousand** (Dec 31, 2024: HK$254,037 thousand)[47](index=47&type=chunk) - After assessing the counterparty's financial position, the Board determined there was no significant credit risk, with an expected credit loss rate close to zero[47](index=47&type=chunk) [15. Property, Plant and Equipment](index=21&type=section&id=15.%20Property,%20Plant%20and%20Equipment) During the reporting period, the Group acquired property, plant, and equipment at a cost of approximately **HK$427 thousand**, an increase from the prior year - The cost of property, plant and equipment acquired during the reporting period was approximately **HK$427 thousand** (H1 2024: HK$196 thousand)[48](index=48&type=chunk) [16. Trade and Other Receivables](index=22&type=section&id=16.%20Trade%20and%20Other%20Receivables) Total trade and other receivables increased to HK$42,572 thousand, with trade receivables (net of provisions) at HK$38,512 thousand; the Group maintains strict control over overdue receivables with 30-60 day credit terms Details of Trade and Other Receivables | Item | June 30, 2025 (HK$ thousand) | Dec 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Trade receivables (net of provisions) | 38,512 | 28,203 | | Prepayments | 1,104 | 2,090 | | Rental and other deposits | 553 | 576 | | Other receivables | 2,403 | 1,413 | | **Total** | **42,572** | **32,282** | - Credit terms for horticultural services and plant sales business are generally **30 days**, while for property investment business, they are generally **30 to 60 days**[49](index=49&type=chunk) [17. Trade and Other Payables](index=23&type=section&id=17.%20Trade%20and%20Other%20Payables) Total trade and other payables increased to HK$55,907 thousand, mainly due to a significant rise in contract liabilities, despite a decrease in other payables and accrued expenses Details of Trade and Other Payables | Item | June 30, 2025 (HK$ thousand) | Dec 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Trade payables | 3,436 | 3,570 | | Other payables and accrued expenses | 8,823 | 24,340 | | Other taxes payable | 5,269 | 555 | | Contract liabilities | 38,379 | 14,734 | | **Total** | **55,907** | **43,199** | [18. Amounts Due to Related Parties](index=24&type=section&id=18.%20Amounts%20Due%20to%20Related%20Parties) Total amounts due to related parties increased to HK$64,087 thousand, mostly non-current, including interest-free and 3% interest-bearing amounts to a related company and controlling shareholder, largely repayable after twelve months Details of Amounts Due to Related Parties | Item | June 30, 2025 (HK$ thousand) | Dec 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Amounts due to a related company | 23,247 | 22,893 | | Amounts due to controlling shareholder | 40,840 | 21,035 | | **Total** | **64,087** | **43,928** | | Less: Non-current portion | (52,617) | (32,633) | | Current portion | 11,470 | 11,295 | - Amounts due to the controlling shareholder include **HK$6,000 thousand** bearing **3% annual interest**, and approximately **HK$34,840 thousand** which is interest-free and repayable after twelve months from the reporting period end[53](index=53&type=chunk) [19. Lease Liabilities](index=24&type=section&id=19.%20Lease%20Liabilities) Lease liabilities' present value decreased to HK$338,741 thousand, with incremental borrowing rates for lessees ranging from 5% to 6.5% used for discounting Present Value of Lease Liabilities | Date | Amount (HK$ thousand) | | :--- | :--- | | June 30, 2025 | 338,741 | | Dec 31, 2024 | 353,351 | - The incremental borrowing rate for lessees ranged from **5% to 6.5%** (Dec 31, 2024: 5% to 6.5%)[54](index=54&type=chunk) [20. Bank Borrowings](index=25&type=section&id=20.%20Bank%20Borrowings) Total bank borrowings decreased to HK$128,000 thousand, secured by investment properties, bank deposits, and rental income, bearing floating interest rates, exposing the Group to cash flow interest rate risk - Total bank borrowings amounted to **HK$128,000 thousand** (Dec 31, 2024: HK$144,000 thousand)[56](index=56&type=chunk) - Borrowings bear interest at **one-month HIBOR plus 2% or Hong Kong Dollar Prime Rate minus 0.5%**, whichever is lower[57](index=57&type=chunk) - Borrowings are secured by investment properties (**HK$355,500 thousand**), bank deposits (not less than **HK$4,000 thousand** pledged, not less than **HK$7,000 thousand** unpledged), and rental income from investment properties[59](index=59&type=chunk) - Committed to maintaining investment property occupancy rate at **60% or above**[59](index=59&type=chunk) [21. Share Capital](index=26&type=section&id=21.%20Share%20Capital) Issued and fully paid share capital is HK$317,635 thousand, comprising 6,352,702 thousand ordinary shares, reflecting last year's convertible bond conversion - Issued and fully paid share capital amounted to **HK$317,635 thousand**[61](index=61&type=chunk) - The number of ordinary shares was **6,352,702 thousand shares**[61](index=61&type=chunk) - For the year ended December 31, 2024, **HK$353,360 thousand** convertible bonds were converted into **3,533,600 thousand shares**[61](index=61&type=chunk) [22. Capital Commitments](index=26&type=section&id=22.%20Capital%20Commitments) As of June 30, 2025, the Group had no significant capital commitments - The Group had no significant capital commitments as of June 30, 2025[62](index=62&type=chunk) [23. Lease Commitments](index=27&type=section&id=23.%20Lease%20Commitments) As a lessor, the Group's total minimum lease payments receivable under non-cancellable operating leases amounted to HK$396,363 thousand Total Minimum Lease Payments Receivable as Lessor in the Future | Period | June 30, 2025 (HK$ thousand) | Dec 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Within one year | 85,401 | 91,408 | | In the second to fifth year inclusive | 247,116 | 258,524 | | After five years | 63,846 | 91,423 | | **Total** | **396,363** | **441,355** | [24. Approval of Interim Financial Statements](index=27&type=section&id=24.%20Approval%20of%20Interim%20Financial%20Statements) These interim financial statements were approved and authorized for issue by the Board of Directors on August 28, 2025 - The interim financial statements were approved and authorized for issue by the Board of Directors on **August 28, 2025**[64](index=64&type=chunk) [Management Discussion and Analysis](index=28&type=section&id=Management%20Discussion%20and%20Analysis) This section reviews the Group's business and financial performance, highlighting revenue growth from property investment and new construction services, but a decline in profit due to increased costs, alongside liquidity, employee policies, outlook, and corporate governance [Business and Financial Review](index=28&type=section&id=Business%20and%20Financial%20Review) Group revenue increased by 70.3% to HK$72,744 thousand, driven by property investment and new construction services, but profit for the period decreased by 33.6% to HK$2,228 thousand due to higher costs - Group revenue increased by **70.3% to HK$72,744 thousand**, primarily due to significant increases in property investment revenue and construction services revenue[65](index=65&type=chunk) - Property investment rental income increased by **95.5% to HK$58,686 thousand**, mainly due to the commencement of sub-leasing operations at Silicon Valley Industrial Park[66](index=66&type=chunk) - Construction services revenue added **HK$1,771 thousand**, representing a new business established in H2 2024[69](index=69&type=chunk) - Staff costs increased by **49.4% to HK$13,047 thousand**, primarily due to the full recognition of staff costs for leased properties under sub-leasing arrangements[70](index=70&type=chunk) - Depreciation and amortization expenses increased by **127.5% to HK$40,696 thousand**, mainly due to the full recognition of depreciation expenses for right-of-use assets from Silicon Valley Industrial Park sub-leasing operations[71](index=71&type=chunk) - Profit for the period was **HK$2,228 thousand**, a decrease from HK$3,405 thousand in the same period last year[78](index=78&type=chunk) [Liquidity and Financial Resources](index=30&type=section&id=Liquidity%20and%20Financial%20Resources) The Group's liquidity is from bank loans, controlling shareholder advances, and operating cash flows; bank borrowings decreased to HK$128,000 thousand, gearing ratio improved to 103%, and foreign currency risk exists without hedging - Outstanding bank loans amounted to **HK$128,000 thousand** (Dec 31, 2024: HK$144,000 thousand)[79](index=79&type=chunk) - Total advances from the controlling shareholder amounted to **HK$40,840 thousand** (Dec 31, 2024: HK$21,035 thousand)[79](index=79&type=chunk) - Net asset value per share was **HK$0.08** (Dec 31, 2024: HK$0.08)[80](index=80&type=chunk) - Investment properties and bank deposits with a total value of approximately **HK$366,500 thousand** have been pledged to banks[81](index=81&type=chunk) - Gearing ratio was **103%** (Dec 31, 2024: 106%), calculated as total debt divided by total equity[84](index=84&type=chunk) - The Group faces foreign currency risk and currently has no foreign currency hedging policy[84](index=84&type=chunk) [Interim Dividend](index=32&type=section&id=Interim%20Dividend) The Board does not recommend any interim dividend for the reporting period, consistent with the prior year - The Board does not recommend the payment of an interim dividend for H1 2025 (H1 2024: nil)[85](index=85&type=chunk) [Material Investments Held](index=32&type=section&id=Material%20Investments%20Held) As of June 30, 2025, the Group held no material investments - The Group held no material investments as of June 30, 2025[86](index=86&type=chunk) [Material Acquisitions and Disposals](index=32&type=section&id=Material%20Acquisitions%20and%20Disposals) During the reporting period, the Group did not undertake any material acquisitions or disposals of subsidiaries, associates, or joint ventures - During the reporting period, the Group had no material acquisitions or disposals of subsidiaries, associates, and joint ventures[87](index=87&type=chunk) [Future Plans for Material Investments or Capital Assets](index=32&type=section&id=Future%20Plans%20for%20Material%20Investments%20or%20Capital%20Assets) As of June 30, 2025, the Group had no other future plans for material investments or capital assets - The Group had no other plans for material investments or capital assets as of June 30, 2025[88](index=88&type=chunk) [Employees and Remuneration Policy](index=32&type=section&id=Employees%20and%20Remuneration%20Policy) As of June 30, 2025, the Group had 116 employees, with remuneration based on performance, experience, and market practice, including discretionary bonuses - The Group's total number of employees was **116** (Dec 31, 2024: 149)[89](index=89&type=chunk) - Employee remuneration is determined based on job performance, professional experience, and current market practice, with discretionary bonuses[90](index=90&type=chunk) [Prospects](index=33&type=section&id=Prospects) The Group anticipates strengthened project portfolio and improved financial performance post-lease agreements, with stable Hong Kong residential rents and leasing business upside dependent on potential US interest rate cuts - Upon completion of lease agreements, the Group's project portfolio will be strengthened, expected to benefit overall financial performance and business development[91](index=91&type=chunk) - Hong Kong residential property rents remained stable and recorded a slight increase[91](index=91&type=chunk) - The potential upside for the leasing business depends on interest rate reductions following possible future interest rate cuts in the US[91](index=91&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=33&type=section&id=Purchase,%20Sale%20or%20Redemption%20of%20the%20Company's%20Listed%20Securities) 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, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[92](index=92&type=chunk) [Standard Code for Securities Transactions](index=33&type=section&id=Standard%20Code%20for%20Securities%20Transactions) The Company adopted the Standard Code from Listing Rules Appendix C3, and all Directors confirmed compliance during the reporting period - The Company has adopted the Standard Code as set out in Appendix C3 of the Listing Rules[93](index=93&type=chunk) - All Directors have confirmed compliance with the requirements set out in the Standard Code during the reporting period[93](index=93&type=chunk) [Compliance with Corporate Governance Code](index=33&type=section&id=Compliance%20with%20Corporate%20Governance%20Code) The Company complied with most Corporate Governance Code provisions, with one deviation: Chairman and CEO roles are combined, which the Board believes enhances strategy and efficiency with adequate oversight - The Company has complied with all code provisions set out in the Corporate Governance Code, save for one deviation[94](index=94&type=chunk) - The deviation is from code provision C.2.1, where the roles of Chairman and Chief Executive Officer are performed by the same individual (**Mr. Wong Ping Kwong**)[95](index=95&type=chunk) - The Board believes that combining the roles of Chairman and Chief Executive Officer facilitates business strategy and enhances operational efficiency, while providing adequate oversight[95](index=95&type=chunk) [Events After the Reporting Period](index=34&type=section&id=Events%20After%20the%20Reporting%20Period) No significant events affecting the Group occurred after the reporting period - No significant events that could affect the Group occurred after the end of the reporting period[96](index=96&type=chunk) [Review of Interim Results by Audit Committee](index=34&type=section&id=Review%20of%20Interim%20Results%20by%20Audit%20Committee) The Audit Committee reviewed the Group's accounting policies, internal controls, and financial reporting, confirming compliance of this results announcement with relevant standards and regulations - The Audit Committee has reviewed the Group's accounting policies, internal controls, and financial reporting matters[97](index=97&type=chunk) - The Audit Committee is of the opinion that this results announcement complies with relevant accounting standards, rules, and regulations and has made appropriate disclosures[97](index=97&type=chunk) [Publication of Interim Results Announcement and Interim Report](index=35&type=section&id=Publication%20of%20Interim%20Results%20Announcement%20and%20Interim%20Report) The Company's interim results announcement is published on the Stock Exchange and Company websites, with the interim report to follow for shareholders - The interim results announcement is published on the Stock Exchange website (www.hkex.com.hk) and the Company's website (www.00063.cn)[98](index=98&type=chunk) - The interim report will be dispatched to shareholders and published on the aforementioned websites in due course[98](index=98&type=chunk)

[Financial Highlights](index=1&type=section&id=Financial%20Highlights) This financial summary provides an overview of the unaudited interim results for the six months ended June 30, 2025, showing a significant decrease in revenue and gross profit compared to the same period in 2024, but a narrowed loss for the period and loss per share, with a relatively stable balance sheet structure, slightly improved current ratio, and decreased debt-to-asset ratio Financial Performance for the Six Months Ended June 30 (Thousand HKD) | Indicator | 2025 | 2024 (Restated) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 118,051 | 316,051 | (62.65%) | | Gross Profit | 1,669 | 57,139 | (97.08%) | | Loss for the Period | (64,740) | (77,301) | (16.25%) | | Loss Attributable to Owners of the Company | (59,616) | (78,821) | (24.37%) | | Loss Per Share (HK cents) | (11.31) | (27.43) | (58.77%) | | EBITDA | 20,310 | 45,640 | (55.50%) | Financial Position as at June 30 (Thousand HKD) | Indicator | June 30, 2025 | December 31, 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Total Assets | 2,276,103 | 2,319,171 | (1.86%) | | Total Liabilities | 1,166,118 | 1,264,139 | (7.75%) | | Current Assets | 1,010,077 | 1,010,102 | – | | Current Liabilities | 792,073 | 802,261 | (1.27%) | | Current Ratio | 1.28 times | 1.26 times | 1.58% | | Cash and Cash Equivalents | 44,795 | 45,156 | (0.80%) | | Debt-to-Asset Ratio | 51.23% | 54.51% | (6.02%) | | Net Assets | 1,109,985 | 1,055,032 | 5.21% | | Equity Attributable to Owners of the Company | 857,553 | 796,204 | 7.71% | | Equity Per Share Attributable to Owners of the Company (HKD) | 1.63 | 2.77 | (41.16%) | [Condensed Consolidated Financial Statements](index=2&type=section&id=Condensed%20Consolidated%20Financial%20Statements) [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=2&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For the six months ended June 30, 2025, the company's revenue significantly decreased by 62.65%, leading to a 97.08% plunge in gross profit, and despite reduced administrative and selling expenses and finance costs, the loss for the period was HKD 64.74 million, though narrower than the prior year, with non-controlling interests shifting from profit to loss Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (Thousand HKD) | Indicator | 2025 (Unaudited) | 2024 (Unaudited, Restated) | | :--- | :--- | :--- | | Revenue | 118,051 | 316,051 | | Cost of Sales | (116,382) | (258,912) | | Gross Profit | 1,669 | 57,139 | | Net Other Income | 10,425 | 13,498 | | Selling and Distribution Expenses | (1,450) | (18,352) | | Administrative Expenses | (51,453) | (91,131) | | Finance Costs | (24,631) | (29,339) | | Impairment Loss on Trade and Other Receivables Recognized | – | (5,501) | | Share of Profit/(Loss) of Associates | 564 | (196) | | Share of Profit of Joint Ventures | – | 182 | | Loss Before Tax | (64,876) | (73,700) | | Income Tax Expense | 136 | (3,601) | | Loss for the Period | (64,740) | (77,301) | | Loss Attributable to Owners of the Company | (59,616) | (78,821) | | Non-controlling Interests | (5,124) | 1,520 | | Basic and Diluted Loss Per Share (HK cents) | (11.31) | (27.43) | Other Comprehensive Loss for the Period (Thousand HKD) | Indicator | 2025 (Unaudited) | 2024 (Unaudited) | | :--- | :--- | :--- | | Loss for the Period | (64,740) | (77,301) | | Exchange Differences Arising from Translation of Financial Statements of Overseas Operations | 12,997 | (12,004) | | Net Revaluation Gain/(Loss) on Financial Assets at Fair Value Through Other Comprehensive Income | 5,024 | (805) | | Share of Other Comprehensive Income/(Loss) of Associates | 28 | (36) | | Share of Other Comprehensive Loss of Joint Ventures | – | (159) | | Other Comprehensive Income/(Loss) for the Period, Net of Income Tax | 18,049 | (13,004) | | Total Comprehensive Loss for the Period | (46,691) | (90,305) | | Attributable to Owners of the Company | (42,465) | (89,769) | | Non-controlling Interests | (4,226) | (536) | [Condensed Consolidated Statement of Financial Position](index=4&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the company's total assets slightly decreased, but total liabilities saw a larger reduction, leading to an increase in net assets and equity attributable to owners of the Company, with non-current assets primarily comprising property, plant and equipment, right-of-use assets, and operating concessions, while trade and other receivables constituted a significant portion of current assets Condensed Consolidated Statement of Financial Position (Thousand HKD) | Indicator | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :--- | :--- | :--- | | **Non-current Assets** | | | | Property, Plant and Equipment | 452,396 | 446,588 | | Right-of-use Assets | 155,823 | 193,057 | | Operating Concessions | 201,689 | 210,403 | | Investment Properties | 177,759 | 175,052 | | Other Intangible Assets | 74,182 | 81,643 | | Financial Assets at Fair Value Through Other Comprehensive Income | 2,885 | 2,633 | | Deferred Tax Assets | 5,269 | 5,612 | | **Current Assets** | | | | Inventories | 51,815 | 57,589 | | Financial Assets at Fair Value Through Profit or Loss | 11,449 | 11,274 | | Trade and Other Receivables | 899,756 | 893,724 | | Bank Balances and Cash | 22,050 | 21,424 | | **Current Liabilities** | | | | Trade and Other Payables | 346,682 | 359,523 | | Bank Borrowings | 135,032 | 107,755 | | Lease Liabilities | 154,666 | 157,166 | | **Non-current Liabilities** | | | | Bank Borrowings | 216,174 | 257,058 | | Lease Liabilities | 48,433 | 86,885 | | Deferred Tax Liabilities | 26,406 | 29,446 | | **Total Equity** | 1,109,985 | 1,055,032 | [Notes to the Condensed Consolidated Interim Financial Statements](index=6&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Interim%20Financial%20Statements) [1. Company Information](index=6&type=section&id=1.%20Company%20Information) The company is an exempted limited company incorporated in the Cayman Islands with shares listed on the Hong Kong Stock Exchange, primarily engaged in wastewater treatment, renewable energy, property investment, and waste management - The Company is incorporated in the Cayman Islands, with its shares listed on the Hong Kong Stock Exchange, and its principal place of business is in Kowloon Bay, Hong Kong[8](index=8&type=chunk) - The Group is principally engaged in wastewater treatment and related construction services, development and sale of renewable energy, property investment and development, and waste management and recycling businesses[9](index=9&type=chunk) - The Group's functional currency is HKD, while its subsidiaries established in China and Indonesia use RMB and Rupiah, respectively, as their functional currencies[9](index=9&type=chunk) [2. Basis of Preparation](index=6&type=section&id=2.%20Basis%20of%20Preparation) The unaudited condensed consolidated interim financial statements are prepared in accordance with Appendix 16 of the Listing Rules and HKAS 34 "Interim Financial Reporting" issued by the HKICPA, and have been reviewed by the Company's audit committee - The interim financial statements are prepared in accordance with Appendix 16 of the Listing Rules and HKAS 34, have not been audited by external auditors, but have been reviewed by the Company's audit committee[10](index=10&type=chunk) [3. Changes in Accounting Policies](index=6&type=section&id=3.%20Changes%20in%20Accounting%20Policies) Revisions to Hong Kong Financial Reporting Standards, including HKAS 21 "Lack of Exchangeability," effective for the first time in this accounting period, have no significant impact on the Group's results or financial position - Revisions to HKAS 21 "Lack of Exchangeability" have no significant impact on the Group's results or financial position for the current or prior periods[12](index=12&type=chunk) [4. Revenue](index=7&type=section&id=4.%20Revenue) For the six months ended June 30, 2025, the Group's total revenue was HKD 118.05 million, a significant decrease from HKD 316.05 million in the prior year, with water supply revenue ceasing, wastewater treatment and renewable energy revenues substantially reduced, but waste management and recycling revenue increasing Revenue Breakdown for the Six Months Ended June 30 (Thousand HKD) | Revenue Source | 2025 | 2024 (Restated) | | :--- | :--- | :--- | | Water Supply Services | – | 53,096 | | Wastewater Treatment Services | 27,927 | 46,437 | | Water Supply Related Installation and Construction Revenue | – | 57,550 | | Water Supply and Wastewater Treatment Infrastructure Construction Revenue | 56 | 34,832 | | Electricity Sales | 53,401 | 91,001 | | Compressed Natural Gas Sales | 4,342 | 6,834 | | Service Income from Biogas Collection | 822 | 203 | | Solid Organic Fertilizer Sales | – | 2,242 | | Service Income from Glass Bottle Collection and Recycling | 20,721 | 18,008 | | Service Income from Food Waste Collection | 10,782 | 5,848 | | **Total Revenue** | **118,051** | **316,051** | [5. Segment Information](index=7&type=section&id=5.%20Segment%20Information) The Group categorizes its operations into four reportable segments: wastewater treatment and related construction services, development and sale of renewable energy, property investment and development, and waste management and recycling, with comparative figures reclassified following the identification of waste management and recycling as a separate reportable segment in the second half of 2024 - The Group has identified four reportable segments: provision of wastewater treatment and related construction services, development and sale of renewable energy, property investment and development, and waste management and recycling[15](index=15&type=chunk)[17](index=17&type=chunk) - In the second half of 2024, waste management and recycling was identified as a separate reportable segment, and comparative figures have been reclassified[14](index=14&type=chunk) Segment Revenue and Results for the Period Ended June 30, 2025 (Thousand HKD) | Segment | Revenue | Profit/(Loss) | | :--- | :--- | :--- | | Wastewater Treatment and Related Construction Services | 27,983 | 7,578 | | Development and Sale of Renewable Energy | 58,565 | (50,742) | | Property Investment and Development | – | (522) | | Waste Management and Recycling | 31,503 | 750 | | Unallocated Corporate Expenses | – | (13,747) | | Interest Income | – | 4 | | Interest on Fixed Rate Bonds and Other Loans | – | (8,197) | | Loss Before Tax | **118,051** | **(64,876)** | Segment Revenue and Results for the Period Ended June 30, 2024 (Thousand HKD, Restated) | Segment | Revenue | Profit/(Loss) | | :--- | :--- | :--- | | Water Supply, Wastewater Treatment and Construction Services | 191,915 | 8,445 | | Development and Sale of Renewable Energy | 100,280 | (55,299) | | Property Investment and Development | – | 850 | | Waste Management and Recycling | 23,856 | 1,701 | | Unallocated Corporate Expenses | – | (22,834) | | Interest Income | – | 21 | | Interest on Fixed Rate Bonds and Other Loans | – | (6,584) | | Loss Before Tax | **316,051** | **(73,700)** | Segment Assets and Liabilities (Thousand HKD) | Segment | June 30, 2025 Assets | June 30, 2025 Liabilities | December 31, 2024 Assets | December 31, 2024 Liabilities | | :--- | :--- | :--- | :--- | :--- | | Wastewater Treatment and Related Construction Services | 252,983 | (101,381) | 255,480 | (104,325) | | Development and Sale of Renewable Energy | 1,433,930 | (562,853) | 1,487,216 | (622,736) | | Property Investment and Development | 404,646 | (267,484) | 397,439 | (261,972) | | Waste Management and Recycling | 54,391 | (32,647) | 56,784 | (34,751) | | Corporate | 130,153 | (179,189) | 122,252 | (216,212) | | Unallocated | – | (22,564) | – | (24,143) | | **Total** | **2,276,103** | **(1,166,118)** | **2,319,171** | **(1,264,139)** | [6. Finance Costs](index=10&type=section&id=6.%20Finance%20Costs) For the six months ended June 30, 2025, the Group's finance costs decreased to HKD 24.631 million, primarily due to lower interest on bank borrowings and lease liabilities Finance Costs Breakdown (Thousand HKD) | Source of Finance Costs | 2025 | 2024 | | :--- | :--- | :--- | | Interest on Bank Borrowings | 8,428 | 10,605 | | Interest on Other Loans | 9,418 | 8,722 | | Interest on Lease Liabilities | 6,825 | 11,590 | | **Total Borrowing Costs** | **24,671** | **30,917** | | Less: Interest Capitalized into Construction in Progress | (40) | (1,578) | | **Total Finance Costs** | **24,631** | **29,339** | [7. Income Tax Expense](index=10&type=section&id=7.%20Income%20Tax%20Expense) For the six months ended June 30, 2025, the Group's income tax expense was HKD 0.136 million, primarily from China corporate income tax, with no provision for Hong Kong profits tax, and some Chinese subsidiaries benefiting from tax exemptions and reductions Income Tax Expense Breakdown (Thousand HKD) | Tax Type | 2025 | 2024 | | :--- | :--- | :--- | | Current Tax — Hong Kong Profits Tax | – | – | | Current Tax — China Corporate Income Tax | 2,562 | 5,993 | | Deferred Tax | (2,698) | (2,392) | | **Total Income Tax Expense** | **(136)** | **3,601** | - The Company and its subsidiaries had no assessable profits subject to Hong Kong profits tax in the first half of 2025, thus no provision was made[23](index=23&type=chunk) - Certain Chinese subsidiaries engaged in electricity, renewable energy sales, and wastewater treatment services enjoy a three-year full tax exemption followed by a 50% tax reduction for the subsequent three years[24](index=24&type=chunk) [8. Loss for the Period](index=11&type=section&id=8.%20Loss%20for%20the%20Period) For the six months ended June 30, 2025, the loss for the period was HKD 64.74 million, a reduction from the prior year, primarily influenced by employee costs, depreciation and amortization, finance costs, and exchange losses Items Deducted From/(Credited To) Loss for the Period (Thousand HKD) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Total Employee Costs | 31,881 | 85,306 | | Write-off: Concession Intangible Assets | 11,691 | 27,497 | | Write-off: Other Intangible Assets | 8,746 | 10,348 | | Depreciation: Property, Plant and Equipment | 27,018 | 29,529 | | Depreciation: Right-of-use Assets | 13,100 | 22,627 | | (Gain)/Loss on Disposal of Property, Plant and Equipment | (52) | 426 | | Write-off/(Reversal): Property, Plant and Equipment | 1,726 | 3,314 | | Write-off/(Reversal): Operating Concession Intangible Assets | (466) | – | | Bank Interest Income | (343) | (555) | | Net Exchange (Gain)/Loss | (1,322) | 375 | [9. Loss Per Share](index=12&type=section&id=9.%20Loss%20Per%20Share) For the six months ended June 30, 2025, the basic and diluted loss per share attributable to owners of the Company was 11.31 HK cents, a significant reduction from 27.43 HK cents in the prior year, with diluted loss per share being the same as basic loss per share due to the absence of dilutive potential shares Loss Per Share Calculation Data | Indicator | 2025 | 2024 (Restated) | | :--- | :--- | :--- | | Loss Attributable to Owners of the Company for Basic and Diluted Loss Per Share Calculation (Thousand HKD) | (59,616) | (78,821) | | Weighted Average Number of Ordinary Shares in Issue | 527,093,022 | 287,360,964 | | Basic and Diluted Loss Per Share (HK cents) | (11.31) | (27.43) | - The share consolidation effective on December 11, 2024, has resulted in adjusted comparative figures as if the share consolidation had been effective from January 1, 2024[26](index=26&type=chunk)[27](index=27&type=chunk) - Diluted loss per share is the same as basic loss per share as there are no dilutive potential ordinary shares[27](index=27&type=chunk) [10. Dividends](index=12&type=section&id=10.%20Dividends) The Company's directors do not recommend the payment of any interim dividend for either of the two reporting periods - The Directors do not recommend the payment of an interim dividend for the six months ended June 30, 2025[28](index=28&type=chunk) [11. Property, Plant and Equipment](index=12&type=section&id=11.%20Property%E3%80%81厂房及设备) For the six months ended June 30, 2025, the Group acquired approximately HKD 4.326 million in property, plant and equipment, disposed of items with a carrying amount of approximately HKD 2.524 million, and wrote off items with a carrying amount of approximately HKD 1.726 million - The Group acquired approximately **HKD 4.326 million** (including right-of-use assets of HKD 0.667 million) in property, plant and equipment in the first half of 2025, a significant decrease from HKD 13.701 million in the first half of 2024[29](index=29&type=chunk) - The Group disposed of property, plant and equipment with a carrying amount of approximately **HKD 2.524 million** and wrote off items with a carrying amount of approximately **HKD 1.726 million** in the first half of 2025[29](index=29&type=chunk) [12. Financial Assets at Fair Value Through Profit or Loss / Other Comprehensive Income](index=13&type=section&id=12.%20透过损益%E2%95%9D其他全面收益按公平值处理之金融资产) As of June 30, 2025, the Group's total fair value of financial assets was HKD 14.334 million, primarily comprising listed equity securities and unlisted fund investments, with unlisted fund investments classified as Level 3 valuations within the fair value hierarchy Financial Assets Fair Value Breakdown (Thousand HKD) | Financial Asset Type | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Listed Equity Securities (Measured at Fair Value) | 2,885 | 2,633 | | Unlisted Fund Investments (Measured at Fair Value) | 11,449 | 11,274 | | **Total** | **14,334** | **13,907** | | Classified as: Financial Assets at Fair Value Through Profit or Loss (Current) | 11,449 | 11,274 | | Classified as: Financial Assets at Fair Value Through Other Comprehensive Income (Non-current) | 2,885 | 2,633 | - Fair value measurements are categorized into three levels: Level 1 (unadjusted quoted prices in active markets), Level 2 (observable inputs), and Level 3 (significant unobservable inputs)[31](index=31&type=chunk) Fair Value Hierarchy of Financial Instruments (Thousand HKD) | Asset Type | June 30, 2025 (Level 1) | June 30, 2025 (Level 3) | December 31, 2024 (Level 1) | December 31, 2024 (Level 3) | | :--- | :--- | :--- | :--- | :--- | | Financial Assets at Fair Value Through Other Comprehensive Income — Listed | 2,885 | – | 2,633 | – | | Financial Assets at Fair Value Through Profit or Loss — Unlisted Fund Investments | – | 11,449 | – | 11,274 | [13. Trade and Other Receivables](index=14&type=section&id=13.%20贸易及其他应收款项) As of June 30, 2025, the Group's net trade and other receivables amounted to HKD 899.8 million, a slight increase from December 31, 2024, with net trade receivables constituting a significant portion and the largest aging category being over one year Trade and Other Receivables Breakdown (Thousand HKD) | Receivable Type | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Trade Receivables (Net) | 800,126 | 779,141 | | Other Receivables (Net) | 49,307 | 52,710 | | Loans Receivable (Net) | 639 | 589 | | Deposits and Prepayments | 49,684 | 61,284 | | **Total** | **899,756** | **893,724** | Aging Analysis of Trade Receivables (Thousand HKD) | Aging | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Within 90 Days | 43,027 | 53,618 | | 91 to 180 Days | 14,592 | 20,933 | | 181 to 365 Days | 45,161 | 46,058 | | Over 1 Year | 697,346 | 658,532 | | **Total** | **800,126** | **779,141** | [14. Trade and Other Payables](index=15&type=section&id=14.%20贸易及其他应付款项) As of June 30, 2025, the Group's total trade and other payables were HKD 372.8 million, a slight decrease from December 31, 2024, with trade payables aged over one year representing the largest proportion Aging Analysis of Trade Payables (Thousand HKD) | Aging | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Within 90 Days | 17,016 | 19,013 | | 91 to 180 Days | 5,955 | 7,785 | | 181 to 365 Days | 6,277 | 29,268 | | Over 1 Year | 108,952 | 87,713 | | **Total Trade Payables** | **138,200** | **143,779** | | Other Payables | 214,122 | 227,397 | | Accrued Interest | 20,525 | 14,573 | | **Total** | **372,847** | **385,749** | | Amount Included in Current Liabilities | 346,682 | 359,523 | | Amount Included in Non-current Liabilities | 26,165 | 26,226 | [15. Share Capital](index=16&type=section&id=15.%20股本) As of June 30, 2025, the Company's issued and fully paid share capital significantly increased to HKD 63.219 million from December 31, 2024, primarily due to a rights issue and placing of new shares Share Capital Movement (Thousand Shares/Thousand HKD) | Share Capital Type | Number of Shares as at June 30, 2025 | Amount as at June 30, 2025 | Number of Shares as at December 31, 2024 | Amount as at December 31, 2024 | | :--- | :--- | :--- | :--- | :--- | | **Authorized Ordinary Shares** | | | | | | At January 1 | 20,000,000 | 2,000,000 | 200,000,000 | 2,000,000 | | Share Consolidation | – | – | (180,000,000) | – | | At June 30 / December 31 | 20,000,000 | 2,000,000 | 20,000,000 | 2,000,000 | | **Issued and Fully Paid Ordinary Shares** | | | | | | At January 1 | 287,361 | 28,736 | 2,873,610 | 28,736 | | Share Consolidation | – | – | (2,586,249) | – | | Shares Issued under Placing | 57,472 | 5,747 | – | – | | Rights Issue Shares | 287,361 | 28,736 | – | – | | At June 30 / December 31 | **632,194** | **63,219** | **287,361** | **28,736** | [16. Capital Commitments](index=16&type=section&id=16.%20资本承担) As of June 30, 2025, the Group's contracted but unprovided capital commitments amounted to HKD 1.177 million, primarily for the acquisition of concession intangible assets and property, plant and equipment Capital Commitments (Thousand HKD) | Capital Commitment Type | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Contracted but Not Provided For: Acquisition of Concession Intangible Assets and Property, Plant and Equipment | 1,177 | 1,484 | | **Total** | **1,177** | **1,484** | [17. Litigation and Arbitration](index=17&type=section&id=17.%20诉讼及仲裁) The Group faces multiple ongoing litigation and arbitration cases primarily involving loan receivables, construction fees, and share repurchase payments, with some favorable judgments or settlements achieved but enforcement difficulties persisting, though the Board believes adequate impairment provisions have been made to avoid significant financial impact [Xunying Holdings Limited, an Indirect Wholly-owned Subsidiary of the Company](index=17&type=section&id=本公司间接全资附属公司迅盈控股有限公司) Xunying Holdings Limited's loan receivable litigation against Sihui Wastewater and Daxin Management Limited, involving HKD 53.43 million and related interest, has continued for years, with favorable judgments from the Hong Kong High Court and China's Zhaoqing Intermediate People's Court, but enforcement is hindered as Daxin has been liquidated and no executable assets identified, leading to full impairment of HKD 43.6 million owed by Daxin - Xunying Holdings Limited's loan receivable litigation against Daxin Management Limited involves **HKD 53.43 million** and related interest[40](index=40&type=chunk) - The Hong Kong High Court has issued a final judgment, and the Zhaoqing Intermediate People's Court in China has recognized and accepted enforcement, but Daxin has been liquidated, and no executable assets have been identified[40](index=40&type=chunk)[42](index=42&type=chunk) - The Sihui City People's Court has repeatedly ruled to freeze all equity of Sihui Wastewater held by Daxin, with the latest freeze period extending to June 2026[42](index=42&type=chunk)[44](index=44&type=chunk) - The **HKD 43.6 million** receivable from Daxin has been fully impaired[44](index=44&type=chunk) [Guangzhou Haide Environmental Protection Technology Co., Ltd., an Indirect Wholly-owned Subsidiary of the Company](index=19&type=section&id=本公司间接全资附属公司广州市海德环保科技有限公司) Guangzhou Haide Environmental Protection Technology Co., Ltd.'s dispute with Yunnan Chaoyue Gas Co., Ltd. over a cooperation agreement involves a HKD 10 million refundable deposit, with an arbitration award in favor of Guangzhou Haide for principal and overdue interest, but enforcement is difficult as Yunnan Chaoyue Gas has entered bankruptcy liquidation, and the deposit was fully impaired in 2011 - Guangzhou Haide's dispute with Yunnan Chaoyue Gas over a cooperation agreement involves a **HKD 10 million** refundable deposit[45](index=45&type=chunk) - The arbitration committee has ruled that Yunnan Chaoyue Gas must pay the principal and overdue interest, but the Kunming City Court could not find executable assets and has terminated enforcement[46](index=46&type=chunk)[48](index=48&type=chunk) - Yunnan Chaoyue Gas has entered bankruptcy liquidation proceedings, and the deposit was fully impaired in 2011[48](index=48&type=chunk) [Xinzhongshui (Nanjing) Energy Co., Ltd., an Indirect Wholly-owned Subsidiary of the Company](index=20&type=section&id=本公司间接全资附属公司新中水（南京）能源有限公司) Xinzhongshui Energy's construction contract dispute with Jinling Construction, involving approximately RMB 151.6 million in construction fees, has led to a settlement agreement confirmed by a court civil mediation statement, requiring Xinzhongshui Energy and Xinzhongshui Carbon Energy to jointly and severally pay RMB 89.91 million, with legal proceedings ongoing as obligations are not yet fully met despite partial payments - Xinzhongshui Energy's construction contract dispute with Jinling Construction involves approximately **RMB 151.6 million** in construction fees[49](index=49&type=chunk) - A settlement agreement has been reached, and a civil mediation statement issued by the court confirms that Xinzhongshui Energy and Xinzhongshui Carbon Energy must jointly and severally pay **RMB 89.91 million**[51](index=51&type=chunk) - Xinzhongshui Energy has not yet fully fulfilled its obligations under the civil mediation statement, but partial payments have been made, and legal proceedings are ongoing[52](index=52&type=chunk) [Huizhou Honghu Hengchang Real Estate Co., Ltd. and Honghu (Huizhou) Investment Co., Ltd.](index=21&type=section&id=惠州鸿鹄恒昌置业有限公司及鸿鹄（惠州）投资有限公司) Honghu Hengchang and Honghu Investment face multiple lawsuits: a construction contract dispute with Zhongmin Zhuyou resulting in a court order to pay RMB 28.42 million plus liquidated damages; another construction contract dispute with Zhongrongyu Construction for RMB 15.67 million plus liquidated damages; and a loan dispute with Huicheng Branch involving RMB 36.08 million in outstanding loans, with all cases ongoing and related debts recorded in other payables or bank borrowings - Honghu Hengchang's construction contract dispute with Zhongmin Zhuyou resulted in a court order to pay **RMB 28.42 million** plus liquidated damages, with Honghu Investment bearing joint and several liability[54](index=54&type=chunk) - Honghu Hengchang's construction contract dispute with Zhongrongyu Construction resulted in a court order to pay **RMB 15.67 million** in construction fees plus liquidated damages, with Honghu Investment bearing joint and several liability[56](index=56&type=chunk) - Honghu Hengchang, Honghu Investment, and other co-defendants face a lawsuit initiated by Huicheng Branch, demanding repayment of approximately **RMB 36.08 million** in outstanding loan balance and interest[56](index=56&type=chunk) - Legal proceedings for all cases are ongoing, and the related debts have been included in the Group's liabilities[55](index=55&type=chunk)[56](index=56&type=chunk) [China Water Affairs Group Limited and China Water Affairs (Hong Kong) Limited](index=23&type=section&id=中国水业集团有限公司及中国水业（香港）有限公司) The Company and China Water Affairs (Hong Kong) face a lawsuit initiated by investors demanding the repurchase of Xinzhongshui (Nanjing) equity, involving approximately RMB 22.9 million in repurchase consideration, related interest, and penalties, with a court judgment ordering payment, and parties actively negotiating a settlement - The Company and China Water Affairs (Hong Kong) face a lawsuit initiated by investors demanding the repurchase of Xinzhongshui (Nanjing) equity, involving a total of approximately **RMB 22.9 million** in repurchase consideration and related interest and penalties[59](index=59&type=chunk) - The Shenzhen Qianhai Cooperation Zone People's Court has issued a judgment ordering the Company and China Water Affairs (Hong Kong) to pay the relevant amounts[59](index=59&type=chunk) - The parties are actively negotiating settlement arrangements, and the Chinese legal proceedings are ongoing[59](index=59&type=chunk) [Litigation Related to Finance Lease Agreements](index=24&type=section&id=融资租赁协议相关诉讼) Disputes over finance lease agreements between lessees (Changsha Xinzhongshui, Qingyuan Qinghong, Shenzhen Xinzhongshui, and Hainan Kangda) and Sinopharm Leasing involve total outstanding lease payments of approximately RMB 49.88 million, and despite a settlement agreement and court civil mediation statement, lessees failed to repay, leading Sinopharm Leasing to apply for compulsory enforcement, with legal proceedings ongoing - Disputes over finance lease agreements between lessees and Sinopharm Leasing involve total outstanding lease payments of approximately **RMB 49.88 million**[61](index=61&type=chunk) - A settlement agreement was reached and a civil mediation statement issued by the court, but the lessees failed to repay the outstanding amounts, and Sinopharm Leasing has applied for compulsory enforcement[61](index=61&type=chunk) - The outstanding lease payments have been recognized as lease liabilities as of June 30, 2025, and legal proceedings are ongoing[61](index=61&type=chunk) [Litigation Related to Haitong HENGXIN International Financial Leasing Co., Ltd.](index=25&type=section&id=海通恒信国际融资租赁股份有限公司相关诉讼) Multiple indirect non-wholly owned subsidiaries of the Group (Lessees A to F) are involved in finance lease agreement disputes with Haitong Leasing, concerning approximately RMB 69.33 million in unpaid principal and related interest, for which a settlement agreement was reached through court mediation and a civil mediation statement issued, with the unpaid principal recorded as lease liabilities and legal proceedings ongoing - Multiple subsidiaries of the Group are involved in finance lease agreement disputes with Haitong Leasing, concerning a total of approximately **RMB 69.33 million** in unpaid principal and related interest[63](index=63&type=chunk) - A settlement agreement was reached through court mediation, and a civil mediation statement was issued by the court, requiring the lessees to pay the finance lease amounts[63](index=63&type=chunk) - The unpaid principal has been recognized as lease liabilities as of June 30, 2025, and legal proceedings are ongoing[63](index=63&type=chunk) [18. Comparative Figures](index=25&type=section&id=18.%20比较数字) The Group has identified waste management and recycling as a separate reportable segment, leading to the reclassification of certain comparative figures, including revenue, cost of sales, and other operating income and expenses, to align with the current period's presentation - Waste management and recycling has been identified as a separate reportable segment, and certain comparative figures have been reclassified[65](index=65&type=chunk) [19. Events After the Interim Period](index=25&type=section&id=19.%20中期期间后事项) Details of events after the interim period are provided in the "Material Events During/After the Interim Period" section - Details of events after the interim period are provided in the "Material Events During/After the Interim Period" section[66](index=66&type=chunk) [Management Discussion and Analysis](index=26&type=section&id=Management%20Discussion%20and%20Analysis) [Financial Review](index=26&type=section&id=Financial%20Review) For the six months ended June 30, 2025, the Group's net loss narrowed to HKD 64.7 million, primarily due to stringent cost control, reduced finance costs, and no significant asset impairment losses, although total revenue and gross profit significantly declined due to the disposal of Yichun Water Group and a downturn in renewable energy business performance - The net loss for the first half of 2025 was **HKD 64.7 million**, a reduction from **HKD 77.3 million** in the first half of 2024[67](index=67&type=chunk) - Loss attributable to owners of the Company was **HKD 59.62 million**, a decrease of **HKD 19.205 million** compared to the same period last year[67](index=67&type=chunk)[68](index=68&type=chunk) - The reduction in loss was primarily due to: (i) stringent cost control measures leading to reduced administrative and selling expenses; (ii) decreased finance costs due to lower loan borrowing levels; (iii) no asset impairment losses during the period; and (iv) the disposal of Yichun Water Group[68](index=68&type=chunk) - Total revenue and gross profit were **HKD 118 million** and **HKD 1.67 million**, respectively, representing decreases of **HKD 198 million** and **HKD 55.47 million** compared to the same period last year, mainly due to the disposal of Yichun Water Group and a downturn in renewable energy business performance[70](index=70&type=chunk) - Net other income decreased by **HKD 3.07 million** to **HKD 10.43 million**, primarily due to the completion of the disposal of Yichun Water Group in 2024[72](index=72&type=chunk) - Selling and distribution expenses and administrative expenses combined decreased by **HKD 56.58 million** to **HKD 52.9 million**, mainly attributable to cost control measures and the disposal of Yichun Water Group[73](index=73&type=chunk) - The Group's full-time employee headcount decreased from **739** in the first half of 2024 to **369** in the first half of 2025[73](index=73&type=chunk) - Share of results of associates turned from a loss of **HKD 0.2 million** to a gain of **HKD 0.56 million**, mainly from Ziyang Green Oasis Xinzhongshui Environmental Protection Technology Co., Ltd[74](index=74&type=chunk) - Finance costs decreased by **HKD 4.71 million** to **HKD 24.63 million**, primarily due to repayment of borrowings during the period, leading to a reduction in overall debt levels[75](index=75&type=chunk) - The Group closely monitors foreign exchange risks and may consider hedging measures to mitigate the impact of RMB exchange rate fluctuations against HKD[76](index=76&type=chunk) - The Group maintains a conservative cash and financial management policy, funding its operations through internal cash flow, bank credit, and other borrowings[77](index=77&type=chunk) - As of June 30, 2025, cash and cash equivalents balance was **HKD 44.8 million**, net current assets were **HKD 218 million**, and the current ratio was **1.28 times**[78](index=78&type=chunk)[79](index=79&type=chunk) - Total assets decreased by **HKD 43.07 million** to **HKD 2,276.1 million**, mainly due to depreciation and amortization expenses recognized during the period[79](index=79&type=chunk) - Total liabilities decreased by **HKD 98.02 million** to **HKD 1,166.12 million**, primarily due to repayment of bank and other borrowings and finance lease liabilities[96](index=96&type=chunk) - The debt-to-asset ratio decreased from **54.51%** as of December 31, 2024, to **51.23%** as of June 30, 2025[97](index=97&type=chunk) Debt Analysis (Thousand HKD) | Debt Type | June 30, 2025 | Proportion (%) | December 31, 2024 | Proportion (%) | | :--- | :--- | :--- | :--- | :--- | | **By Maturity:** | | | | | | Repayable within 1 year | 249,737 | 47.84 | 244,908 | 43.50 | | Repayable after 1 year | 272,243 | 52.16 | 318,142 | 56.50 | | **Total Bank and Other Loans** | **521,980** | **100** | **563,050** | **100** | | **By Loan Category:** | | | | | | Secured | 437,605 | 83.84 | 447,050 | 79.40 | | Unsecured | 84,375 | 16.16 | 116,000 | 20.60 | | **Total Bank and Other Loans** | **521,980** | **100** | **563,050** | **100** | | **By Interest Category:** | | | | | | Fixed Rate | 434,809 | 83.30 | 459,617 | 81.63 | | Floating Rate | 54,092 | 10.36 | 72,980 | 12.96 | | Interest-Free | 33,079 | 6.34 | 30,453 | 5.41 | | **Total Bank and Other Loans** | **521,980** | **100** | **563,050** | **100** | - Other loans include **HKD 20.11 million** in 6% coupon unlisted bonds and **HKD 54.5 million** in loans from related companies[99](index=99&type=chunk)[100](index=100&type=chunk) - Trade and other payables decreased by **HKD 12.9 million** to **HKD 372.85 million**, primarily due to the settlement of trade payables during the interim period[101](index=101&type=chunk) [Business Review](index=37&type=section&id=Business%20Review) The Group's business is divided into six segments: water supply, wastewater treatment, construction services, renewable energy, property investment and development, and waste management and recycling; in the first half of 2025, water supply operations ceased, wastewater treatment and renewable energy revenues significantly declined, but waste management and recycling revenue increased, resulting in an overall substantial decrease in revenue and gross profit Financial Performance by Segment (Million HKD) | Segment | 2025 Revenue | 2024 Revenue | Revenue Change | 2025 Gross Profit/(Loss) | 2024 Gross Profit/(Loss) | Gross Profit Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Water Supply Business | 0.00 | 53.09 | (53.09) | 0.00 | 16.28 | (16.28) | | Wastewater Treatment Business | 27.93 | 46.44 | (18.51) | 13.23 | 18.18 | (4.95) | | Construction Services Business | 0.06 | 92.38 | (92.32) | (0.88) | 20.20 | (21.08) | | Subtotal | 27.99 | 191.91 | (163.92) | 12.35 | 54.66 | (42.31) | | Development and Sale of Renewable Energy Business | 58.56 | 100.28 | (41.72) | (16.86) | (4.76) | (12.10) | | Property Development | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | | Waste Management and Recycling | 31.50 | 23.86 | 7.64 | 6.18 | 7.23 | (1.05) | | **Total** | **118.05** | **316.05** | **(198.00)** | **1.67** | **57.13** | **(55.46)** | - Water Supply Business: Following the disposal of Yichun Water Group in September 2024, the Group is no longer involved in water supply operations in China[103](index=103&type=chunk) - Wastewater Treatment Business: In the first half of 2025, revenue and gross profit were **HKD 27.93 million** and **HKD 13.23 million**, respectively, representing decreases of **HKD 18.51 million** and **HKD 4.95 million** compared to the same period last year, primarily due to the disposal of Yichun Water Group; excluding the impact of the disposal, revenue and gross profit increased by **HKD 4.97 million** and **HKD 3.26 million**, respectively, mainly due to increased wastewater treatment fees after the upgrade and renovation of the Jining Haiyuan project[105](index=105&type=chunk)[106](index=106&type=chunk) - Wastewater Treatment Infrastructure Construction Services: In the first half of 2025, revenue and gross loss were **HKD 0.06 million** and **HKD 0.88 million**, respectively, a significant decrease from the same period last year, mainly due to the disposal of Yichun Water Group, completion of wastewater treatment plant upgrades, and reduced construction activities[108](index=108&type=chunk)[109](index=109&type=chunk) - Development and Sale of Renewable Energy Business: In the first half of 2025, revenue and gross loss were **HKD 58.56 million** and **HKD 16.86 million**, respectively, with revenue decreasing by **HKD 41.72 million** and gross loss widening by **HKD 12.10 million** compared to the same period last year, primarily due to a reduction in the number of operating landfills and decreased grid-connected electricity generation as local incineration projects came online[110](index=110&type=chunk)[111](index=111&type=chunk) - Property Investment and Development: As of June 30, 2025, the number of property projects decreased from four to two, located in Nanjing and Huizhou, with a total land area of approximately **56,884 square meters**; the carrying amount of the Nanjing property project increased to **HKD 177.76 million**, mainly due to the appreciation of RMB against HKD[115](index=115&type=chunk)[116](index=116&type=chunk) - Waste Management and Recycling: In the first half of 2025, revenue was **HKD 31.50 million** and gross profit was **HKD 6.18 million**, representing an increase in revenue of **HKD 7.64 million** and a decrease in gross profit of **HKD 1.05 million** compared to the same period last year; the revenue growth was mainly driven by the food waste contract which commenced operations in March 2024[118](index=118&type=chunk)[119](index=119&type=chunk) [Material Events During the Review Period](index=43&type=section&id=于回顾期间的重大事项) During the review period, the Group completed fundraising activities, including a rights issue and placing of new shares, raising a net total of approximately HKD 102.7 million, primarily for debt repayment and general working capital, while also actively expanding into overseas markets by signing MOUs for landfill gas power generation management projects with several local governments in Indonesia [Fundraising Activities](index=43&type=section&id=集资活动) The Group raised a net total of approximately HKD 102.7 million through a rights issue and placing of new shares, with the rights issue raising HKD 90.1 million primarily for debt repayment (HKD 68 million), biomass gas project investment (HKD 15 million), and general working capital (HKD 7.1 million), and the placing raising HKD 12.6 million mainly for debt repayment (HKD 10 million) and general working capital (HKD 2.6 million) - The Company completed a rights issue on January 22, 2025, issuing **287,360,964** rights shares and raising net proceeds of approximately **HKD 90.1 million**[120](index=120&type=chunk)[123](index=123&type=chunk) - The net proceeds from the rights issue were primarily used for debt repayment (**HKD 68 million**), investment in biomass gas projects (**HKD 15 million**), and general working capital (**HKD 7.1 million**)[123](index=123&type=chunk) - On June 5, 2025, the Board resolved to use the remaining **HKD 15 million** of net proceeds from the rights issue to repay outstanding liabilities[125](index=125&type=chunk) - The Company completed a placing of new shares on June 16, 2025, placing **57,472,000** placing shares and raising net proceeds of approximately **HKD 12.6 million**[126](index=126&type=chunk) - The net proceeds from the placing were primarily used for debt repayment (**HKD 10 million**) and general working capital (**HKD 2.6 million**)[126](index=126&type=chunk) [Memoranda of Understanding for Potential Overseas Projects](index=45&type=section&id=潜在海外项目谅解备忘录) The Group is actively expanding into overseas markets, having signed multiple Memoranda of Understanding with the Semarang Regency Government, Sidoarjo Regency Government, and Pekanbaru City Government in Indonesia for potential cooperation projects involving landfill management, landfill gas power generation systems, and food waste treatment, marking a crucial step in its overseas renewable energy market strategy - The Company signed a Memorandum of Understanding with the Semarang Regency Government in Indonesia, involving landfill management, landfill gas power generation, operation, and leachate treatment[129](index=129&type=chunk) - The Company signed a Memorandum of Understanding with the Sidoarjo Regency Government in Indonesia, involving cooperation on landfill gas power generation systems[129](index=129&type=chunk) - The Company signed a Memorandum of Understanding with the Pekanbaru City Government in Indonesia, involving a landfill gas power generation management project at the Muara Fajar landfill[129](index=129&type=chunk) - These Memoranda of Understanding represent significant achievements for the Group in promoting and expanding its landfill and landfill gas power generation businesses in overseas markets[129](index=129&type=chunk) [Other Information](index=46&type=section&id=其他信息) During the review period, the Group had no significant investments, acquisitions, or disposals of subsidiaries, while contingent liabilities significantly decreased, assets were pledged primarily for finance lease debts, bank loans, and other loans, employee numbers reduced due to cost control measures, but remuneration policies remained competitive, board members saw changes, no share options were granted under the share option scheme, and the company maintained sufficient public float - The Group held no significant equity investments in any other companies and made no significant acquisitions or disposals of subsidiaries and associates during the review period[130](index=130&type=chunk)[131](index=131&type=chunk) - As of June 30, 2025, the Group's contingent liabilities were **HKD 0.01 million**, a significant decrease from **HKD 0.47 million** as of December 31, 2024[132](index=132&type=chunk) - A total of **HKD 569.25 million** in the Group's finance lease debts, bank loans, and other loans are secured by property, plant and equipment, right-of-use assets, investment properties, contractual rights, and equity interests in subsidiaries[136](index=136&type=chunk) - Certain bank deposits of **HKD 20.33 million** were pledged to banks to secure **HKD 21 million** in bank facilities[134](index=134&type=chunk) - The Group's employee headcount decreased from **739** as of June 30, 2024, to **369** as of June 30, 2025, primarily due to the closure of landfills and the disposal of Yichun Water Group[137](index=137&type=chunk) - Total employee benefit expenses significantly decreased to **HKD 31.88 million** from **HKD 85.31 million** in the first half of 2024[137](index=137&type=chunk) - The composition of the Nomination Committee changed: Mr. Zhu Yongjun ceased to be Chairman and member, Mr. Wong Siu Keung was re-designated as Chairman, and Ms. Zhu Yanyan was appointed as a member[138](index=138&type=chunk)[140](index=140&type=chunk) - As of June 30, 2025, no share options were granted under the new share option scheme[142](index=142&type=chunk) - At least **25%** of the Company's issued share capital is held by the public, ensuring sufficient public float[144](index=144&type=chunk) [Corporate Governance](index=49&type=section&id=Corporate%20Governance) The Company has complied with the Corporate Governance Code in Appendix C1 of the Listing Rules throughout the interim period, except for the non-segregation of the roles of Chairman and Chief Executive Officer, though the Board believes adequate safeguards are in place, and directors and senior management adhere to the Model Code for Securities Transactions, with no purchases, sales, or redemptions of the Company's listed securities during the period - The Company has complied with the Corporate Governance Code in Appendix C1 of the Listing Rules throughout the interim period, except for the non-segregation of the roles of Chairman and Chief Executive Officer[145](index=145&type=chunk) - The Board believes that adequate safeguards are in place to ensure sufficient balance of power within the Board, but it still requires time to identify a suitable Chief Executive Officer[145](index=145&type=chunk) - All Directors and senior management have complied with the Model Code for Securities Transactions as set out in Appendix C3 of the Listing Rules[146](index=146&type=chunk) - Neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities during the period[147](index=147&type=chunk) [Other Information](index=50&type=section&id=其他资料) The Audit Committee has reviewed the Group's accounting principles, internal controls, and financial reporting matters, the directors do not recommend an interim dividend, and the interim results announcement has been published on the company's and the Stock Exchange's websites - The Audit Committee has reviewed the Group's accounting principles, internal controls, and financial reporting matters, including the unaudited interim financial statements for the six months ended June 30, 2025[148](index=148&type=chunk) - The Directors do not recommend the payment of an interim dividend for the six months ended June 30, 2025[149](index=149&type=chunk) - The interim results announcement has been published on the Company's website and the Stock Exchange's website[150](index=150&type=chunk) [Outlook](index=50&type=section&id=Outlook) The Group faces a challenging operating environment, particularly with substantial accounts receivable, but will seek breakthroughs through "cost reduction, efficiency improvement, and optimization for transformation" and a "dual-driven" strategy, focusing on resolving accounts receivable, accelerating overseas expansion, optimizing the Xinzhongshui segment, consolidating its environmental protection foothold in Hong Kong, deepening integrated water treatment, exploring agricultural sector breakthroughs, and strengthening internal management and financing capabilities [Business Review (Outlook)](index=50&type=section&id=业务回顾（展望）) The Group faces immense financial pressure from substantial accounts receivable, especially for electricity subsidies and wastewater treatment fees, and to address these challenges, the Group will implement a "dual-driven" strategy: stabilizing existing markets while exploring diversified business models, and vigorously expanding into overseas markets like Southeast Asia to export biomass gas technology and operational expertise - The Group faces a massive accounts receivable problem, particularly with outstanding electricity subsidy receivables totaling **RMB 651 million**, with no subsidies received in the first half of 2025, causing immense pressure on cash flow[151](index=151&type=chunk) - Government arrears are prominent in the traditional water affairs sector, with outstanding pipeline fees in Gaoming District and unresolved long-term receivables from Jining Haiyuan and Haisheng Water Co., Ltd[151](index=151&type=chunk) - The Group will implement a "dual-driven" strategy: first, stabilizing existing markets and exploring diversified business models (e.g., new integrated water treatment technologies, co-processing of food waste); second, vigorously expanding into overseas markets such as Southeast Asia to export biomass gas technology and operational service experience[152](index=152&type=chunk) - The Hong Kong environmental protection sector achieved counter-cyclical growth, with stable and increasing glass recycling volumes, successful bulk export of glass cullet to Malaysia, and active exploration of glass resource utilization demonstration projects in the Guangdong-Hong Kong-Macao Greater Bay Area[153](index=153&type=chunk)[154](index=154&type=chunk) - The integrated water treatment sector saw improved performance, contributing cash flow, and enhanced core competitiveness through qualification upgrades and patent reserves; it successfully entered the sustainable aviation fuel wastewater treatment field and deepened organic solid waste treatment cooperation with Zhejiang Energy Group[156](index=156&type=chunk)[157](index=157&type=chunk) - In the overseas sector, with Shengce Investment Co., Ltd. as the core strategic direction, joint ventures for Semarang and Pekanbaru projects in Indonesia have passed judicial review, and the Sidoarjo project has initiated feasibility studies; projects in the Philippines and UAE are also actively progressing[159](index=159&type=chunk)[160](index=160&type=chunk) - The water affairs sector maintains stable operations with high water quality compliance, but government arrears remain the biggest pain point, prompting the establishment of a special task force to collect outstanding payments and consider government buyback or asset disposal plans[161](index=161&type=chunk)[162](index=162&type=chunk) - The Xinzhongshui biogas power generation sector focuses on refined operations and technological upgrades, with 23 landfill gas power generation projects and 1 purification project operating stably, but electricity subsidy payments are severely delayed, with outstanding receivables totaling **RMB 651 million**[163](index=163&type=chunk) - The engineering construction sector (Lisai) provides technical and execution support for the Group's core businesses and fully cooperates with the Group's overseas business unit, offering engineering technical support for key overseas projects in Indonesia, the Philippines, and the UAE[164](index=164&type=chunk) - In the industry-city integration sector, property management at Nanjing Space Big Data Industrial Park has improved efficiency, with occupancy rates expected to reach **85%** by year-end; the Huizhou Honghu Blue Valley Smart Plaza project faces dual pressures from industry adjustments and its own debt risks[165](index=165&type=chunk) [Future Outlook: Turning Pressure into Motivation, Focusing on Core, Breaking Through Innovation](index=55&type=section&id=未来展望：化压力为动力，聚焦核心，突破创新) Looking ahead to the second half, the Group will prioritize resolving the accounts receivable crisis to ensure cash flow, steadfastly advance its "China Biomass Gas Operator" strategy, accelerate overseas expansion, optimize the Xinzhongshui segment, consolidate its environmental protection foothold in Hong Kong, deepen integrated water treatment, seek breakthroughs in the agricultural sector, and strengthen internal management and financing capabilities to meet challenges and seize green transformation opportunities - Prioritize the collection of substantial outstanding electricity subsidies and wastewater treatment fees in the second half of the year, establish a high-level special task force, and pragmatically evaluate and advance government buyback or asset disposal plans[166](index=166&type=chunk) - Steadfastly advance the core strategy of "China Biomass Gas Operator," accelerate overseas expansion, and promote the formal signing and implementation of key contracted projects in Indonesia (Semarang, Pekanbaru, Sidoarjo)[167](index=167&type=chunk) - Optimize and strengthen the Xinzhongshui segment, closely monitor subsidy policy trends, deeply explore carbon asset value, and explore a "biogas power generation + agricultural organic waste" co-processing model[167](index=167&type=chunk) - Consolidate Hong Kong's environmental protection foothold, support the deepening of local glass resource operations in Hong Kong, and use Southeast Asia as a breakthrough to substantially implement technology export and resource integration projects[167](index=167&type=chunk) - The integrated water treatment segment will continue to deeply cultivate industrial wastewater and organic solid waste, strengthen customized technology and project execution capabilities, and focus on breaking through the innovative application verification and commercialization of membrane technology[168](index=168&type=chunk) - Seek breakthroughs in the agricultural sector, strictly control risks, ensure stable operation of the Huoqiu project, and actively seek effective partners for the Boli project[168](index=168&type=chunk) - The Group will actively expand financing channels and enhance financing capabilities, including issuing new shares and obtaining bank loan financing[169](index=169&type=chunk) - Strengthen internal management, optimize organizational structure and processes, improve operational efficiency and cost control capabilities, and enhance talent team building[169](index=169&type=chunk) [Acknowledgements](index=56&type=section&id=致谢) Mr. Zhu Yongjun, Chairman and Executive Director of the Board, extends heartfelt gratitude on behalf of the Board to investors, financial institutions, and all employees, affirming the Group's continued commitment to maintaining existing businesses and actively expanding new ones in the second half of the year - Mr. Zhu Yongjun, Chairman and Executive Director of the Board, extends heartfelt gratitude on behalf of the Board to investors, financial institutions, and all employees[171](index=171&type=chunk) - The Group will continue to dedicate itself to maintaining existing businesses and actively expanding new ones in the second half of the year[171](index=171&type=chunk)

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不負責，對 其準確性或完整性亦不發表任何聲明，並明確表示，概不對因本公告全部或任何部份 內容而產生或因倚賴該等內容而引致之任何損失承擔任何責任。 中國太平洋保險（集團）股份有限公司 CHINA PACIFIC INSURANCE (GROUP) CO., LTD. （於中華人民共和國註冊成立的股份有限公司） （股份代號 ：02601) 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 董事長致辭 尊敬的中國太保股東朋友們 ： 2025年上半年，全球經濟復甦乏力，國際經貿面臨嚴峻挑戰，中國經濟積極面 對外部壓力，保持整體平穩運行，為世界經濟增長貢獻了重要的確定性。國內來看， 中國式現代化建設深入推進，科技創新和產業升級融合發展，新質生產力加速培育， 外貿規模穩定增長，銀髮經濟興起，數字浪潮奔涌，催生多元化的金融服務和風險保 障需求，為保險業開創了巨大的發展空間。同時，行業自身仍然處於轉型升級的關鍵 時期，嚴監管、防風險的導向更加清晰，監管推行「報行合一」、加快個人營銷體制改 革，探索商業保險公司長週期考核等舉措，進一步強化高質量發展理念的牽引 ...

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不負責，對其準確性或 完整性亦不發表任何聲明，並明確表示，概不對因本公告全部或任何部分內容而產生或因倚賴該 等內容而引致的任何損失承擔任何責任。 CENTURY GINWA RETAIL HOLDINGS LIMITED 世紀金花商業控股有限公司 （於百慕達註冊成立之有限公司） （股份代號：162） 截至二零二五年六月三十日止六個月之 中期業績公告 財務摘要 | | 截至該日止六個月 | | | --- | --- | --- | | | 二零二五年 | 二零二四年 | | | 六月三十日 | 六月三十日 | | | 人民幣百萬元 | 人民幣百萬元 | | (1) 總收益 | 401.0 | 496.8 | | 收益 | 197.6 | 225.4 | | 稅息折舊及攤銷前盈利 | 12.7 | 7.2 | | (3)(4) 經調整稅息折舊及攤銷前盈利 | 50.0 | 37.2 | | 稅息前盈利（經營虧損） | (94.4) | (105.0) | | (2)(4) 經調整稅息前利潤（經營虧損） | (55.2) | (73.3) | | 本 ...

Interim Results Announcement [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=2&type=section&id=簡明綜合損益及其他全面收益表) The Group's unaudited condensed consolidated statement of profit or loss and other comprehensive income for the six months ended June 30, 2025, shows a significant decrease in revenue and profit for the period, with basic earnings per share also declining, while gross profit remained largely stable Key Data from Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (RMB thousands) | Metric | Six Months Ended June 30, 2025 (RMB thousands) | Six Months Ended June 30, 2024 (RMB thousands) | Change Rate | | :--- | :--- | :--- | :--- | | Revenue | 24,191,916 | 49,914,629 | -51.53% | | Cost of Sales | (21,655,008) | (47,368,947) | -54.29% | | Gross Profit | 2,536,908 | 2,545,682 | -0.34% | | Other Income | 889,227 | 1,241,994 | -28.40% | | Profit Before Tax | 1,103,901 | 1,366,916 | -19.24% | | Income Tax Expense | (181,423) | (301,309) | -39.79% | | Profit for the Period | 922,478 | 1,065,607 | -13.43% | | Profit for the Period Attributable to Owners of the Company | 819,768 | 928,222 | -11.70% | | Basic Earnings Per Share (RMB cents) | 72.80 | 82.43 | -11.68% | | Diluted Earnings Per Share (RMB cents) | 72.80 | 81.24 | -10.39% | - Total comprehensive income for the period was **RMB 903,908 thousand**, a **13.09% decrease** from **RMB 1,040,383 thousand** in the prior year[6](index=6&type=chunk) [Condensed Consolidated Statement of Financial Position](index=5&type=section&id=簡明綜合財務狀況表) As of June 30, 2025, the Group's total assets slightly decreased, net current assets increased, and total equity steadily grew, indicating a robust capital structure Key Data from Condensed Consolidated Statement of Financial Position (RMB thousands) | Metric | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | Change Rate | | :--- | :--- | :--- | :--- | | Non-current Assets | 21,345,018 | 22,062,776 | -3.25% | | Current Assets | 33,775,557 | 33,217,779 | +1.68% | | Net Current Assets | 4,943,259 | 3,945,424 | +25.29% | | Total Assets Less Current Liabilities | 26,288,277 | 26,008,200 | +1.08% | | Non-current Liabilities | 6,778,770 | 7,099,277 | -4.51% | | Net Assets | 19,509,507 | 18,908,923 | +3.18% | | Equity Attributable to Owners of the Company | 16,785,358 | 16,160,566 | +3.86% | | Total Equity | 19,509,507 | 18,908,923 | +3.18% | - The increase in current assets was primarily due to higher trade receivables and recoverable VAT; the decrease in non-current assets was mainly due to reduced restricted bank deposits[86](index=86&type=chunk) - The decrease in current liabilities was mainly due to lower bills payable and short-term loans; the decrease in non-current liabilities was primarily due to reduced long-term borrowings[87](index=87&type=chunk) [Notes to the Financial Statements](index=8&type=section&id=財務報表附註) [Basis of Preparation and Accounting Policies](index=8&type=section&id=編製基準與會計政策) The Group's condensed consolidated financial statements are presented in RMB, prepared in accordance with HKAS 34 and HKEX Listing Rules, with no material impact from new HKFRS amendments applied this period - The condensed consolidated financial statements are presented in **RMB** and prepared in accordance with **Hong Kong Accounting Standard 34 'Interim Financial Reporting'** issued by the HKICPA and the applicable disclosure requirements of the HKEX Listing Rules[12](index=12&type=chunk) - The application of amendments to Hong Kong Financial Reporting Standards (such as HKAS 21 (Revised) Lack of Exchangeability) during this interim period had no material impact on the Group's financial position or performance for the current and prior periods[14](index=14&type=chunk) [Revenue from Contracts with Customers](index=9&type=section&id=與客戶合約之收益) The Group's revenue primarily derives from manufacturing (lead-acid, renewable, lithium batteries) and trading, with Mainland China as the main market, and revenue recognition predominantly occurs at a point in time Revenue from Contracts with Customers Breakdown (RMB thousands) | Revenue Source | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | **Manufacturing Business** | | | | Lead-acid Battery Products | 18,292,243 | 19,252,492 | | Renewable Resources Products | 1,800,192 | 1,554,325 | | Lithium Battery Products | 501,247 | 182,549 | | Other Manufacturing | 574,554 | 221,601 | | **Trading** | 3,023,680 | 28,703,662 | | **Total Revenue** | 24,191,916 | 49,914,629 | Revenue by Geographical Market (RMB thousands) | Geographical Market | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Mainland China | 23,966,127 | 49,785,894 | | Other | 225,789 | 128,735 | | **Total Revenue** | 24,191,916 | 49,914,629 | - Regarding revenue recognition timing, the vast majority of revenue (**RMB 24,162,283 thousand** in 2025 and **RMB 49,858,818 thousand** in 2024) was recognized at a point in time[15](index=15&type=chunk) [Segment Information](index=10&type=section&id=分部資料) The Group operates in two segments: manufacturing and trading; during the reporting period, manufacturing external sales remained stable, while trading external sales significantly decreased, leading to a notable reduction in total segment revenue Segment Revenue and Results Analysis (RMB thousands) | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | **Segment Revenue** | | | | Manufacturing Business – External Sales | 21,168,236 | 21,210,967 | | Trading – External Sales | 3,023,680 | 28,703,662 | | **Group Revenue** | 24,191,916 | 49,914,629 | | **Segment Results** | | | | Manufacturing Business | 925,629 | 1,115,429 | | Trading | 12,596 | (37,282) | | **Profit for the Period** | 922,478 | 1,065,607 | - The trading segment turned profitable from a loss in the prior period, but its external sales significantly decreased[19](index=19&type=chunk) [Other Income and Gains](index=11&type=section&id=其他收入及收益) The Group's other income, mainly government grants and interest income, decreased during the reporting period, while other gains and losses were significantly impacted by fair value changes in financial assets and commodity derivative contracts Other Income (RMB thousands) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Government Grants – Income Related | 675,669 | 850,730 | | Government Grants – Asset Related | 43,378 | 33,786 | | Interest Income | 120,080 | 296,844 | | Scrap Sales | 47,059 | 59,989 | | Dividend Income | 3,041 | 645 | | **Total** | 889,227 | 1,241,994 | Other Gains and Losses (RMB thousands) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Fair Value Changes in Financial Assets at Fair Value Through Profit or Loss (Gains/Losses) | | | | – Structured Bank Deposits | 34,417 | 8,301 | | – Investments in Listed Equity Securities | 2,944 | (7,865) | | – Forward Exchange Contracts | (15,811) | (1,747) | | – Commodity Derivative Contracts | (21,544) | 173,292 | | Loss on Disposal of Property, Plant and Equipment | (8,659) | (15,671) | | Net Exchange Losses | (2,382) | (35,983) | | Other | 15,094 | 13,783 | | **Total** | 4,059 | 134,110 | - Other income decreased by approximately **28.40%** compared to the prior period, mainly due to lower government grants and interest income[81](index=81&type=chunk) [Income Tax Expense](index=12&type=section&id=所得稅開支) The Group's income tax expense primarily stems from PRC Enterprise Income Tax, with certain high-tech subsidiaries enjoying a preferential 15% rate, and overall income tax expense decreased during the reporting period Income Tax Expense (RMB thousands) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | PRC Enterprise Income Tax – Current Tax | 264,300 | 175,863 | | Deferred Tax – For the Period | (82,877) | 125,446 | | **Total** | 181,423 | 301,309 | - The Group's income tax expense is recognized based on the **PRC Enterprise Income Tax rate of 25%**, with certain subsidiaries classified as high-tech enterprises enjoying a **15%** tax rate[26](index=26&type=chunk) [Profit for the Period](index=13&type=section&id=期內溢利) Profit for the period is derived after deducting items such as depreciation, capitalization of inventories, and write-down of inventories; total depreciation of property, plant, and equipment increased during the reporting period Profit for the Period Adjustment Items (RMB thousands) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Depreciation of Property, Plant and Equipment | 611,529 | 521,925 | | Depreciation of Right-of-use Assets | 17,635 | 17,252 | | **Total Depreciation** | 629,164 | 539,177 | | Capitalization of Inventories | (454,387) | (391,294) | | Write-down of Inventories (Included in Cost of Sales) | 72,562 | 44,963 | [Dividends and Earnings Per Share](index=14&type=section&id=股息及每股盈利) The Board does not recommend an interim dividend for the reporting period; profit attributable to owners of the Company is used to calculate basic and diluted earnings per share, which decreased compared to the prior period Dividends Declared During the Period (RMB thousands) | Dividend Year | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | 2024 Final Dividend (HK$0.17 per share) | 176,406 | – | | 2023 Final Dividend (HK$0.43 per share) | – | 440,832 | Earnings Per Share (RMB cents) | Metric | 2025 (RMB cents) | 2024 (RMB cents) | | :--- | :--- | :--- | | Basic | 72.80 | 82.43 | | Diluted | 72.80 | 81.24 | - The Directors do not recommend an interim dividend for the six months ended June 30, 2025, and June 30, 2024[30](index=30&type=chunk) [Receivables and Payables](index=15&type=section&id=應收及應付賬款) The Group's total bills receivable, trade receivables, and other receivables increased, with the largest portion of trade receivables aged 0-45 days; total bills payable, trade payables, and other payables slightly increased, with bills payable primarily due within 0-180 days Bills Receivable, Trade Receivables and Other Receivables (RMB thousands) | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Bills Receivable | 1,974,827 | 1,929,737 | | Trade Receivables (Net of Allowance) | 2,172,830 | 1,535,922 | | Other Receivables (Net of Allowance) | 143,410 | 107,661 | | Prepayments for Materials | 312,705 | 217,938 | | Recoverable PRC VAT and Enterprise Income Tax | 1,134,431 | 789,818 | | **Total** | 5,738,203 | 4,581,076 | Ageing Analysis of Trade Receivables (RMB thousands) | Ageing | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | 0 to 45 days | 1,524,032 | 916,782 | | 46 to 90 days | 481,035 | 389,176 | | 91 to 180 days | 42,846 | 57,194 | | 181 to 365 days | 48,932 | 22,401 | | One to two years | 53,121 | 141,784 | | Over two years | 22,864 | 8,585 | | **Total** | 2,172,830 | 1,535,922 | Bills Payable, Trade Payables and Other Payables (RMB thousands) | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Trade Payables | 2,650,968 | 2,398,507 | | Bills Payable | 6,526,363 | 6,808,120 | | VAT Payable and Other Taxes Payable | 753,056 | 663,854 | | Staff Salaries and Welfare Payables | 423,311 | 519,600 | | Payables for Purchase of Property, Plant and Equipment | 1,472,018 | 1,759,105 | | Accrued Expenses | 661,786 | 567,859 | | Deposits Received | 612,180 | 363,335 | | Other Payables | 270,291 | 212,514 | | **Total** | 13,369,973 | 13,292,894 | [Share Capital and Share-based Payments](index=18&type=section&id=股本及股份為基礎之付款) The Company's issued and fully paid share capital remained unchanged; the share option scheme expired on June 30, 2024, with no exercises or related expenses this period, while the share award scheme for Tianneng Shares continued, with expenses recognized Share Capital Information | Item | Number of Shares | Amount (RMB thousands) | | :--- | :--- | :--- | | Issued and Fully Paid Ordinary Shares (par value HK$0.10 per share) | 1,126,124,500 | 109,850 | - The Company's share option scheme expired during the six months ended June 30, 2024, with no share options exercised or related expenses recognized during the period[42](index=42&type=chunk)[43](index=43&type=chunk) - The Group recognized expenses of approximately **RMB 750,000** for Tianneng Shares' share award scheme (2024: **RMB 2,107,000**)[45](index=45&type=chunk) [Operating Review](index=20&type=section&id=營運回顧) [Company Profile](index=20&type=section&id=公司簡介) Tianneng Power International Limited, established in 1986, is a leading Chinese new energy battery enterprise, focusing on lead-acid batteries while actively expanding into diverse technologies like lithium-ion, solid-state, hydrogen fuel, and sodium-ion batteries, and building a circular economy industrial chain - The Group was established in **1986** and listed on the Main Board of The Stock Exchange of Hong Kong Limited (stock code: **00819.HK**) in **2007**[46](index=46&type=chunk) - With lead-acid batteries as its core business, the Group deeply cultivates the electric light vehicle power battery market and expands into diverse fields such as backup power, automotive batteries, and industrial power batteries[46](index=46&type=chunk) - Actively promotes the R&D, production, and sales of lithium-ion batteries, solid-state batteries, hydrogen fuel cells, and sodium-ion batteries, while building a circular economy industrial chain[46](index=46&type=chunk) [Operating Overview](index=20&type=section&id=營運概況) During the reporting period, the Group adhered to a 'industry, technology, capital' driven development, consolidating core competitiveness in lead-acid business, accelerating new energy business expansion, deepening circular system construction, and simultaneously expanding overseas markets for comprehensive and sustainable development - Coordinates the 'industry, technology, capital' three-wheel drive, consolidating core competitiveness in lead-acid business, accelerating new energy business expansion, deepening circular system construction, and simultaneously expanding overseas markets[47](index=47&type=chunk) - Through deep integration of strategic initiatives and structural reforms, market competitive advantages and industry influence have significantly improved, laying a solid foundation for long-term development resilience[47](index=47&type=chunk) [Industry Development and Operating Performance](index=21&type=section&id=行業發展與經營狀況) The Group made progress across its three core business segments: high-end eco-friendly batteries, new energy battery technology matrix, and circular economy industry, with manufacturing revenue of approximately **RMB 21.168 billion**, as business lines focused on technological innovation, market expansion, and internationalization - During the reporting period, the Group achieved manufacturing revenue of approximately **RMB 21.168 billion**[51](index=51&type=chunk) [High-end Eco-friendly Batteries](index=21&type=section&id=高端環保電池) High-end eco-friendly batteries, a strategic cornerstone, include eco-friendly mobility, backup power, automotive, and electric special industrial power batteries, generating approximately **RMB 18.292 billion** in revenue during the reporting period - High-end eco-friendly battery business achieved revenue of approximately **RMB 18.292 billion**[51](index=51&type=chunk) [Eco-friendly Mobility Batteries](index=22&type=section&id=環保出行動力電池) As a key lead-acid battery product, widely used in electric light vehicles, the Group enhances product competitiveness and actively expands overseas markets through smart manufacturing upgrades, technological iterations, and strategic market布局 - China's electric two-wheeler ownership exceeds **420 million units**, with stable replacement demand; the implementation of the new national standard 'Safety Technical Specification for Electric Bicycles' (GB 17761-2024) will consolidate the advantages of leading enterprises[53](index=53&type=chunk) - Fully promotes smart factory construction, deeply integrating **5G**, IoT, and AI technologies to achieve full-process digital and intelligent upgrades; the Puyang City production base in Henan Province was awarded as a national-level '**5G Factory**'[53](index=53&type=chunk) - Possesses over **3,000 distributors**, covering more than **400,000 retail stores**, serving hundreds of millions of electric light vehicle users, and building an integrated online and offline user service platform[55](index=55&type=chunk) - Accelerates the construction of an international business network covering Southeast Asia, Europe, and Africa, with breakthrough growth in overseas business; the Vietnam base construction is progressing in an orderly manner[55](index=55&type=chunk) [Other High-end Eco-friendly Batteries](index=24&type=section&id=其他高端環保電池) Lead-acid batteries are widely applied in backup power, automotive, and electric special industrial power batteries, where the Group has achieved business expansion and technological breakthroughs [Backup Power Supplies](index=24&type=section&id=備用電源) Driven by energy structure transformation and computing infrastructure development, the backup power market is rapidly expanding, with the Group's backup power business showing unexpected growth and accelerating international expansion - The backup power market is rapidly expanding, with lead-acid batteries deeply penetrating scenarios like communication base stations and data centers due to their cost advantage and operational stability[57](index=57&type=chunk) - Backup power business shows unexpected growth, with international expansion accelerating simultaneously, focusing on engaging leading overseas enterprises[58](index=58&type=chunk) [Automotive Batteries and Industrial Power Batteries](index=25&type=section&id=汽車電池與工業動力電池) Automotive battery business focuses on starter and start-stop battery R&D, with leading domestic technology; industrial batteries serve leading engineering machinery enterprises and accelerate global expansion through technological upgrades and market development - Automotive battery business is driven by 'new technology R&D, new material application, and new product development,' breaking through multiple core indicators, with key technologies at a leading domestic level[58](index=58&type=chunk) - Industrial batteries focus on developing products with core advantages of 'high energy density, long cycle life, and fast charging/discharging' to meet the demands of forklifts, AGVs, and smart warehousing equipment[58](index=58&type=chunk) - Serves leading enterprises in the engineering machinery industry, simultaneously accelerating global expansion, and collaborating with international partners to jointly develop European and Asian markets[58](index=58&type=chunk) [New Energy Battery Technology Matrix](index=26&type=section&id=新能源電池技術矩陣) The Group systematically advances R&D, smart manufacturing, and application expansion across diverse technology routes including lithium-ion, solid-state, hydrogen fuel, and sodium-ion batteries, fostering new business growth drivers - Anchored in new energy development, the Group systematically advances R&D, smart manufacturing, and application expansion across diverse technology roadmaps including lithium-ion, solid-state, hydrogen fuel, and sodium-ion batteries[59](index=59&type=chunk) [Lithium-ion Batteries](index=26&type=section&id=鋰離子電池) The Group's lithium-ion battery business primarily focuses on energy storage and low-speed power, achieving significant operational improvement and approximately **RMB 501 million** in revenue during the reporting period, with notable progress in technological innovation and market expansion - Lithium-ion battery business achieved revenue of approximately **RMB 501 million**, with significant improvement in operational quality and efficiency[60](index=60&type=chunk) - Firmly implements a 'high-tech, multi-scenario, full-ecosystem' development strategy, coordinating technological innovation, scenario extension, and overseas expansion[60](index=60&type=chunk) - Focuses on full-chain innovation in lithium-ion battery 'materials, cells, systems, and applications,' building a technology system supporting diverse scenarios, and providing solutions in energy storage, commercial vehicles, and electric special industrial vehicles[61](index=61&type=chunk) - Deepens core market layout, achieving sales breakthroughs in energy storage, backup power, and low-speed power sectors, and promoting brand and ecosystem internationalization[61](index=61&type=chunk) [Solid-state Batteries](index=28&type=section&id=固態電池) The Group made significant progress in solid-state battery industrialization, launching new generation batteries for two-wheelers and a series for low-altitude flight, steadily enhancing industry influence - Leads and participates in the formulation of multiple international, national, and industry standards, focusing on breakthroughs in three major product directions: high specific energy, long cycle life, and high rate performance[63](index=63&type=chunk) - The new generation batteries launched for two-wheelers have garnered widespread industry attention for their excellent safety and higher energy density, establishing strategic partnerships with leading two-wheeler enterprises[63](index=63&type=chunk) - Simultaneously launched a series of solid-state batteries for low-altitude flight, and jointly promotes scenario solution verification with drone and robotics companies[63](index=63&type=chunk) [Hydrogen Fuel Cells](index=28&type=section&id=氫燃料電池) Supported by a full-chain forward R&D system, the Group achieved significant technological and product advancements in hydrogen fuel cells, actively expanding markets and securing orders for fuel cell buses and hydrogen-powered two-wheelers in multiple regions - **80kW/130kW** fuel cell systems and **100kW** graphite plate stacks achieved advanced domestic performance, demonstrating excellent advantages in zero-carbon transportation scenarios like public buses and logistics[65](index=65&type=chunk) - Steadily advances the implementation of core products, completing small-batch delivery of various key components, and initiating iterative development of cutting-edge products such as high-power systems and stacks[65](index=65&type=chunk) - Actively expands cooperation networks with OEMs, logistics companies, and shared mobility platforms, securing orders for fuel cell buses and bulk hydrogen-powered two-wheelers in multiple regions[65](index=65&type=chunk) [Sodium-ion Batteries](index=29&type=section&id=鈉離子電池) Seizing policy and market opportunities, the Group pursues a dual-track approach of 'technological breakthroughs' and 'scenario implementation,' continuously deepening strategic R&D and application deployment for sodium-ion batteries, accelerating development of new square cells and other products - Adheres to the strategy of 'technology reserve, scenario verification, and steady advancement,' focusing on technological breakthroughs at the cell, module, and system levels[66](index=66&type=chunk) - Further focuses on automotive start-stop systems, leveraging an extensive channel network to deeply promote multi-scenario demonstration applications and market promotion[66](index=66&type=chunk) - R&D of new sodium-ion battery square cells and other products is accelerating; sodium-ion automotive battery products debuted at exhibitions like CIBF, receiving positive market feedback for their excellent low-temperature performance[66](index=66&type=chunk) [Circular Economy Industry](index=30&type=section&id=可循環產業) The Group systematically built a full lifecycle industrial chain covering production, recycling, and reuse, forming a dual-track circular industry system for lead-acid and lithium-ion batteries, achieving approximately **RMB 1.8 billion** in external revenue during the reporting period - Circular economy industry achieved external revenue of approximately **RMB 1.8 billion**[68](index=68&type=chunk) [Recycling of High-end Eco-friendly Batteries](index=30&type=section&id=高端環保電池循環利用) As a leading lead-acid battery recycling enterprise with an annual disposal capacity exceeding one million tons, the Group achieved efficient resource regeneration through optimized recycling network and technological innovation, generating approximately **RMB 1.375 billion** in external revenue during the reporting period - Lead-acid battery recycling business achieved external revenue of approximately **RMB 1.375 billion**[69](index=69&type=chunk) - Annual disposal capacity for waste lead-acid batteries now exceeds **one million tons**, positioning it at a leading level in the industry[69](index=69&type=chunk) - Possesses recycling pilot qualifications in provinces such as Zhejiang, Jiangsu, and Anhui, with over **300 cooperative recycling points** covering multiple provinces nationwide[70](index=70&type=chunk) - Through self-developed core technologies like side-blown furnace production enhancement and cost reduction, and refined lead detellurization, production efficiency and cost optimization are achieved, with metal recovery and energy utilization rates at superior industry levels[70](index=70&type=chunk) [Lithium-ion Battery Resource Regeneration](index=32&type=section&id=鋰離子電池資源再生) The Group actively promotes the construction of a lithium-ion battery recycling system, making orderly progress in process improvement, production line enhancement, and channel development, achieving approximately **RMB 425 million** in revenue and industry-leading recycling technology and capacity - Lithium-ion battery recycling business achieved revenue of approximately **RMB 425 million**[71](index=71&type=chunk) - A full-process technical system has been formed, covering retired lithium battery performance testing, crushing and sorting, pyrolysis enrichment, deep reduction, and efficient separation, achieving cobalt, nickel, and manganese recovery rates exceeding **98.5%**, and lithium recovery rate exceeding **92%**[72](index=72&type=chunk) - The self-developed 'Method and Device for Copper-Aluminum Separation from Waste Lithium Batteries' received national patent authorization, and disposal capacity exceeding **70,000 tons** has been established[72](index=72&type=chunk)[73](index=73&type=chunk) - Actively promotes the 'urban mining' development strategy, deploying integrated dry and wet processing bases, regional circular bases, and recycling points, exploring diversified recycling models[73](index=73&type=chunk) [Strategic Planning and Development Direction](index=34&type=section&id=戰略規劃與發展方向) [Multi-technology Synergy](index=34&type=section&id=多元技術協同) The Group will focus on synergistic development across multiple technology routes—lead, lithium, solid-state, hydrogen, and sodium—strengthening independent innovation, concentrating on key technologies like solid-state batteries and hydrogen fuel stacks, and deepening industry-academia-research collaboration - Promotes synergistic development across multiple technology roadmaps—lead, lithium, solid-state, hydrogen, and sodium—systematically strengthening independent innovation capabilities in 'materials, cells, systems, and scenarios'[75](index=75&type=chunk) - Focuses on key technological directions such as solid-state batteries and hydrogen fuel stacks, steadily advancing R&D reserves and application transformation for related technologies[75](index=75&type=chunk) [Digital and Intelligent Transformation](index=34&type=section&id=數智化升級) The Group views smart manufacturing as a key strategic direction, steadily advancing full-process digital management system upgrades and adopting new manufacturing models like '5G factories' to enhance production efficiency, energy utilization, and environmental performance - Steadily advances full-process digital management system upgrades, applying new manufacturing models like '**5G factories**' to enhance production efficiency and energy utilization efficiency[76](index=76&type=chunk) - Promotes the application of clean electricity and the construction of a carbon asset management system, optimizing the environmental performance of manufacturing processes[76](index=76&type=chunk) [Circular Economy System](index=35&type=section&id=循環經濟體系) The Group is committed to building an efficient recycling network with both front-end reach and back-end processing efficiency, promoting dual-track recycling for lead-acid and lithium-ion batteries, and enhancing supply chain integration and synergy - Builds an efficient recycling network with both front-end reach and back-end processing efficiency, promoting dual-track operation for lead-acid battery recycling and lithium-ion battery recycling[77](index=77&type=chunk) - Strengthens differentiated pathway layout for lithium-ion battery recycling, deepens resource linkage in core regions and key scenarios, gradually unleashing the scale advantages and economic value of the circular system[77](index=77&type=chunk) [Global Expansion](index=35&type=section&id=全球化佈局) The Group positions globalization as a key growth engine, accelerating the establishment of localized manufacturing, service, and operating systems in strategic markets like Vietnam, and promoting proprietary technologies and advantageous products to international markets - Accelerates the establishment of localized manufacturing, service, and operating systems in strategic markets like Vietnam, systematically advancing product adaptation, channel construction, and brand penetration[77](index=77&type=chunk) - Promotes proprietary technologies and advantageous products to international markets, gradually integrating into the global industrial system and enhancing global competitiveness[77](index=77&type=chunk) [Financial Review](index=35&type=section&id=財務回顧) [Revenue and Gross Profit](index=35&type=section&id=營業額與毛利) During the reporting period, the Group's revenue decreased by **51.53%** year-on-year, primarily due to a significant decline in trading revenue; gross profit slightly decreased by **0.34%**, and manufacturing gross profit margin marginally fell by **0.20 percentage points** Revenue and Gross Profit Changes (RMB thousands) | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | Change Rate | | :--- | :--- | :--- | :--- | | Total Revenue | 24,192,000 | 49,915,000 | -51.53% | | Manufacturing Revenue | 21,168,000 | 21,211,000 | -0.20% | | Trading Revenue | 3,024,000 | 28,704,000 | -89.47% | | Gross Profit | 2,537,000 | 2,546,000 | -0.34% | | Manufacturing Gross Profit Margin | 11.93% | 12.13% | -0.20pp | - The decrease in gross profit margin was mainly due to lower gross profit margins for low-speed power batteries and industrial batteries[80](index=80&type=chunk) [Other Income and Expenses](index=36&type=section&id=其他收入及費用) The Group's other income decreased by **28.40%**, mainly due to lower government grants and interest income; distribution and selling expenses, administrative expenses, and finance costs all decreased, while R&D costs remained largely stable Other Income and Expense Changes (RMB thousands) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | Change Rate | | :--- | :--- | :--- | :--- | | Other Income | 889,000 | 1,242,000 | -28.40% | | Distribution and Selling Expenses | 592,000 | 643,000 | -7.93% | | Administrative Expenses | 561,000 | 651,000 | -13.83% | | Research and Development Costs | 942,000 | 942,000 | 0.00% | | Finance Costs | 235,000 | 282,000 | -16.67% | - The decrease in distribution and selling expenses was mainly due to lower travel and transportation costs; the decrease in administrative expenses was primarily due to lower employee wages and office expenses[82](index=82&type=chunk)[83](index=83&type=chunk) - The decrease in finance costs was mainly due to reduced loan scale and lower interest rates[85](index=85&type=chunk) [Operating Cash Flow](index=37&type=section&id=經營活動現金流) During the reporting period, the Group's net cash flow from operating activities shifted from a net outflow to a net inflow, primarily due to strengthened inventory and payables management - Net cash flow from operating activities shifted from a net outflow of approximately **RMB 162 million** in the prior period to a net inflow of approximately **RMB 891 million**[86](index=86&type=chunk) - Primarily due to the Group's strengthened inventory and payables management[86](index=86&type=chunk) [Assets, Liabilities and Capital Structure](index=37&type=section&id=資產負債與資本結構) As of June 30, 2025, the Group's total assets slightly decreased, with current assets increasing and non-current assets decreasing; total liabilities decreased, with both current and non-current liabilities showing reductions Assets and Liabilities Changes (RMB thousands) | Metric | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | Change Rate | | :--- | :--- | :--- | :--- | | Total Assets | 55,121,000 | 55,281,000 | -0.29% | | Total Current Assets | 33,776,000 | 33,218,000 | +1.68% | | Total Non-current Assets | 21,345,000 | 22,063,000 | -3.25% | | Total Liabilities | 35,611,000 | 36,372,000 | -2.09% | | Total Current Liabilities | 28,832,000 | 29,272,000 | -1.50% | | Total Non-current Liabilities | 6,779,000 | 7,099,000 | -4.51% | - Equity attributable to owners of the Company was approximately **RMB 16.785 billion**, an increase from approximately **RMB 16.161 billion** as of December 31, 2024[86](index=86&type=chunk) [Borrowings and Liquidity](index=38&type=section&id=借貸與流動性) The Group maintains ample cash and bank balances, with a decrease in total interest-bearing borrowings and substantial unused credit facilities, indicating a healthy and manageable capital structure Borrowings and Liquidity (RMB thousands) | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Cash and Bank Balances | 18,598,000 | 21,410,000 | | Interest-bearing Borrowings and Loan Notes Due Within One Year | 12,030,000 | 12,726,000 | | Interest-bearing Loans Due After One Year | 5,235,000 | 5,823,000 | | **Total Interest-bearing Loans** | 17,265,000 | 18,549,000 | - Fixed annual interest rates for RMB loans ranged from approximately **2.11% to 5.50%** (2024: approximately **2.22% to 5.50%**)[88](index=88&type=chunk) - Possesses approximately **RMB 25.215 billion** in unused credit facilities[88](index=88&type=chunk) [Pledged Assets and Gearing Ratio](index=38&type=section&id=資產抵押與資產負債比率) The Group's bank credit and borrowings are secured by bank deposits, bills receivable, property, plant and equipment, and land use rights; the gearing ratio decreased, indicating reduced financial leverage Pledged Assets and Gearing Ratio | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Net Book Value of Pledged Assets | RMB 11.085 billion | RMB 14.039 billion | | Gearing Ratio | 31.32% | 33.55% | [Exchange Rate Fluctuation Risk and Contingent Liabilities](index=38&type=section&id=匯率波動風險與或然負債) The Group's operations are primarily in China, transacting in RMB, thus the Board believes there is no significant foreign exchange risk; as of the reporting period end, the Group had no material contingent liabilities - There is no significant foreign exchange rate risk for the Company's operating cash flow and liquidity[91](index=91&type=chunk) - As of June 30, 2025, the Group had no material contingent liabilities[92](index=92&type=chunk) [Capital Commitments and Employee Remuneration](index=39&type=section&id=資本承擔與員工薪酬) The Group has contracted but unprovided capital commitments for the acquisition of property, plant and equipment; during the reporting period, both total employees and employee costs decreased Capital Commitments and Employee Information | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Contracted but Not Provided for Capital Commitments for Acquisition of Property, Plant and Equipment | RMB 1.402 billion | RMB 1.592 billion | | Total Employees | 20,709 persons | 21,929 persons (June 30, 2024) | | Employee Costs | RMB 1.335 billion | RMB 1.601 billion (June 30, 2024) | [Material Investments and Financial Assets](index=39&type=section&id=重大投資與金融資產) The Group held no material investments during the reporting period; financial assets at fair value through profit or loss primarily comprise structured bank deposits and wealth management products purchased from commercial banks, along with a small amount of listed equity securities - As of June 30, 2025, the Group held no material investments[96](index=96&type=chunk) - Financial assets at fair value through profit or loss primarily include unlisted financial products purchased from commercial banks, such as structured bank deposits and wealth management products, with a total fair value of approximately **RMB 3,294,036 thousand**[97](index=97&type=chunk)[99](index=99&type=chunk) [Other Important Matters](index=41&type=section&id=其他重要事項) [Material Acquisitions and Disposals](index=41&type=section&id=重大收購及出售) During the reporting period, the Group had no material acquisitions or disposals of subsidiaries, associates, or joint ventures - During the reporting period, the Group had no material acquisitions or disposals of subsidiaries, associates, or joint ventures[100](index=100&type=chunk) [Significant Events After the Reporting Period](index=41&type=section&id=自報告期間完結後之重要事件) Tianneng Battery Group Co., Ltd., a subsidiary, proposes to issue corporate bonds up to **RMB 2 billion**, while Tianneng Holding Group Co., Ltd., another subsidiary, proposes to issue targeted debt financing instruments up to **RMB 2 billion** - Tianneng Battery Group Co., Ltd. (an indirect subsidiary of the Company) proposes to apply to the Shanghai Stock Exchange for registration and issuance of corporate bonds with a total principal amount of up to **RMB 2 billion** (inclusive of **RMB 2 billion**)[102](index=102&type=chunk) - Tianneng Holding Group Co., Ltd. (an indirect wholly-owned subsidiary of the Company) proposes to apply to the National Association of Financial Market Institutional Investors for registration and issuance of targeted debt financing instruments with a total principal amount of up to **RMB 2 billion** (inclusive of **RMB 2 billion**)[102](index=102&type=chunk) [Corporate Governance](index=42&type=section&id=企業管治) The Company is committed to high corporate governance standards, adopting and complying with the HKEX Corporate Governance Code, except for Code Provision C.2.1 (Chairman and CEO held by the same person); the Audit Committee reviewed the interim report - The Company has adopted and complied with the code provisions of the Corporate Governance Code set out in Appendix C1 Part 2 of the HKEX Listing Rules, except for Code Provision C.2.1 (Chairman and Chief Executive Officer held by the same individual)[105](index=105&type=chunk) - The Company's Audit Committee, together with management and independent external auditors, reviewed the Company's 2025 interim report and recommended its adoption by the Board[105](index=105&type=chunk) [Directors and Securities Transactions](index=43&type=section&id=董事及證券交易) All Directors confirmed compliance with the Model Code for securities transactions throughout the reporting period; neither the Company nor its subsidiaries purchased, sold, or redeemed any of the Company's listed securities during the period - All Directors confirmed their continuous compliance with the standards for securities transactions as set out in the Model Code throughout the reporting period[107](index=107&type=chunk) - During the reporting period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[108](index=108&type=chunk) [General Information](index=43&type=section&id=一般資料) This section lists the Company's executive and independent non-executive directors as of the announcement date and specifies the publication channels for the announcement - The Company's Executive Directors are Dr. Zhang Tianren, Mr. Zhang Aogen, Mr. Zhang Kaihong, Mr. Shi Borong, and Mr. Zhou Jianzhong[109](index=109&type=chunk) - The Company's Independent Non-executive Directors are Mr. Huang Dongliang, Mr. Zhang Yong, Mr. Xiao Gang, and Dr. Guo Yuantao[109](index=109&type=chunk) - This announcement will be published on the HKEX website www.hkex.com.hk and the Company's website www.tianneng.com.hk[109](index=109&type=chunk)

Announcement Summary [Interim Results Announcement](index=1&type=section&id=Interim%20Results%20Announcement) Fangyuan Life Service Group Co, Ltd announced its unaudited results for the six months ended June 30, 2025, highlighting uncertainty about its ability to continue as a going concern - The company announced its unaudited condensed consolidated financial results for the six months ended June 30, 2025[2](index=2&type=chunk) - For the six months ended June 30, 2025, the Group recorded a **net loss of approximately RMB 6,520,000**[3](index=3&type=chunk) - As of June 30, 2025, the Group's **current liabilities exceeded its current assets by approximately RMB 36,167,000**, indicating a material uncertainty that may cast significant doubt on its ability to continue as a going concern[3](index=3&type=chunk) [Board of Directors](index=2&type=section&id=Board%20of%20Directors) As of the announcement date, the company's Board of Directors comprises executive and independent non-executive directors - Executive Directors include Mr Fang Ming (Chairman), Mr Sun Ligong, Mr Han Shuguang, and Ms Xie Lihua[5](index=5&type=chunk) - Independent Non-executive Directors include Mr Leung Wai Hung, Mr Tian Qiusheng, and Mr Du Chenghua[5](index=5&type=chunk) Corporate Information [Board and Committee Composition](index=4&type=section&id=Board%20and%20Committee%20Composition) The company's Board includes executive and independent non-executive directors, with established Audit, Remuneration, and Nomination Committees - The Chairman of the Board is Mr Fang Ming, and the Chief Executive Officer is Mr Sun Ligong[8](index=8&type=chunk) - The Audit Committee is chaired by Mr Leung Wai Hung, the Remuneration Committee by Mr Tian Qiusheng, and the Nomination Committee by Mr Fang Ming[8](index=8&type=chunk) [Key Contact Information](index=4&type=section&id=Key%20Contact%20Information) The company has disclosed key contact information including its registered office, headquarters, and principal business locations - The registered office is in the Cayman Islands, the China headquarters is in Guangzhou, and the principal place of business in Hong Kong is in the United Centre, Admiralty[9](index=9&type=chunk)[10](index=10&type=chunk)[11](index=11&type=chunk) - The auditor is ZHONGHUI ANDA CPA Limited, and principal bankers include Industrial Bank, Agricultural Bank of China, and Shanghai Pudong Development Bank[9](index=9&type=chunk) Unaudited Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income [Financial Performance for H1 2025](index=5&type=section&id=Financial%20Performance%20for%20H1%202025) For the six months ended June 30, 2025, the company's revenue and gross profit decreased, while net loss and basic loss per share narrowed significantly Key Financial Data for H1 2025 (RMB'000) | Indicator | H1 2025 | H1 2024 | Y-o-Y Change | Change Rate | | :--- | :--- | :--- | :--- | :--- | | Revenue | 168,431 | 186,085 | (17,654) | -9.5% | | Cost of services | (135,000) | (148,094) | 13,094 | -8.8% | | Gross profit | 33,431 | 37,991 | (4,560) | -12.0% | | Loss before income tax | (9,212) | (13,313) | 4,101 | -30.8% | | Loss for the period | (6,520) | (12,310) | 5,790 | -47.0% | | Loss attributable to owners of the Company | (5,999) | (14,673) | 8,674 | -59.1% | | Basic and diluted loss per share (RMB cents) | (1.50) | (3.67) | 2.17 | -59.1% | - **Net impairment losses on financial assets decreased by 28.2%** from RMB 32,816 thousand in H1 2024 to RMB 23,576 thousand in H1 2025[14](index=14&type=chunk) - Exchange differences on translation of foreign operations shifted from a loss of RMB 107 thousand in H1 2024 to a **gain of RMB 1,756 thousand** in H1 2025[14](index=14&type=chunk) Unaudited Condensed Consolidated Statement of Financial Position [Asset and Liability Structure](index=6&type=section&id=Asset%20and%20Liability%20Structure) As of June 30, 2025, the company's total assets and total equity decreased, while net current liabilities expanded, indicating continued liquidity pressure Key Financial Position Data as of June 30, 2025 (RMB'000) | Indicator | June 30, 2025 | Dec 31, 2024 | Change | Change Rate | | :--- | :--- | :--- | :--- | :--- | | Total non-current assets | 120,813 | 121,564 | (751) | -0.6% | | Total current assets | 227,426 | 245,178 | (17,752) | -7.2% | | Total current liabilities | 263,593 | 273,193 | (9,600) | -3.5% | | Net current liabilities | (36,167) | (28,015) | (8,152) | 29.1% | | Net assets | 77,620 | 85,724 | (8,104) | -9.5% | | Equity attributable to owners of the Company | 29,812 | 34,055 | (4,243) | -12.5% | | Non-controlling interests | 47,808 | 51,669 | (3,861) | -7.5% | | Total equity | 77,620 | 85,724 | (8,104) | -9.5% | - Trade receivables (net of impairment loss) decreased from RMB 83,956 thousand on December 31, 2024, to **RMB 79,689 thousand** on June 30, 2025[15](index=15&type=chunk) - Amounts due from related companies (net of impairment loss) increased from RMB 21,439 thousand on December 31, 2024, to **RMB 40,833 thousand** on June 30, 2025[15](index=15&type=chunk) Unaudited Condensed Consolidated Statement of Changes in Equity [Analysis of Changes in Equity](index=8&type=section&id=Analysis%20of%20Changes%20in%20Equity) For the six months ended June 30, 2025, equity attributable to owners decreased due to the period's loss and exchange differences, while non-controlling interests also declined Equity Changes in H1 2025 (RMB'000) | Indicator | Jan 1, 2025 | Loss for the period | Exchange differences | Dividends paid to non-controlling interests | June 30, 2025 | | :--- | :--- | :--- | :--- | :--- | :--- | | Equity attributable to owners of the Company | 34,055 | (5,999) | 1,756 | - | 29,812 | | Non-controlling interests | 51,669 | (521) | - | (3,340) | 47,808 | | Total equity | 85,724 | (6,520) | 1,756 | (3,340) | 77,620 | - In H1 2025, the loss attributable to owners of the Company was **RMB 5,999 thousand**, a significant reduction from the RMB 14,673 thousand loss in H1 2024[17](index=17&type=chunk) - Dividends paid to non-controlling interests in H1 2025 amounted to **RMB 3,340 thousand**, a decrease from RMB 3,845 thousand in H1 2024[17](index=17&type=chunk) Unaudited Condensed Consolidated Statement of Cash Flows [Cash Flow Analysis](index=9&type=section&id=Cash%20Flow%20Analysis) For the six months ended June 30, 2025, net cash used in operating, investing, and financing activities all decreased, leading to a smaller net decrease in cash and cash equivalents Cash Flow for H1 2025 (RMB'000) | Cash Flow Activity | H1 2025 | H1 2024 | Change | Change Rate | | :--- | :--- | :--- | :--- | :--- | | Net cash used in operating activities | (18,762) | (22,551) | 3,789 | -16.8% | | Net cash used in investing activities | (276) | (1,016) | 740 | -72.8% | | Net cash used in financing activities | (1,689) | (10,392) | 8,703 | -83.7% | | Net decrease in cash and cash equivalents | (20,727) | (33,959) | 13,232 | -39.0% | | Cash and cash equivalents at end of period | 44,036 | 54,317 | (10,281) | -18.9% | - In investing activities, expenditure on property, plant and equipment decreased from RMB 917 thousand in H1 2024 to **RMB 113 thousand** in H1 2025[18](index=18&type=chunk) - In financing activities, there were **no repayments of bank borrowings** in H1 2025, compared to RMB 6,000 thousand in H1 2024[18](index=18&type=chunk) Notes to the Unaudited Condensed Consolidated Financial Statements [1. General Information](index=10&type=section&id=1.%20General%20Information) The company, incorporated in the Cayman Islands, primarily provides property management and value-added services in China, with a defined ultimate controlling shareholder structure - The Company and its subsidiaries are principally engaged in providing professional property management services and value-added services for residential and non-residential properties in China[19](index=19&type=chunk) - Mr Fang Ming, Ms Xie Lihua, and Mr Huang Peng are the ultimate controlling shareholders of the Group under a concert party deed[20](index=20&type=chunk) [2. Basis of Preparation](index=10&type=section&id=2.%20Basis%20of%20Preparation) The financial statements are prepared under HKFRS using the historical cost basis, with the company facing material uncertainty regarding its going concern status - The consolidated financial statements have been prepared in accordance with all applicable Hong Kong Financial Reporting Standards (HKFRSs) and the disclosure requirements of the Hong Kong Companies Ordinance[21](index=21&type=chunk) - For the six months ended June 30, 2025, the Group recorded a **net loss of approximately RMB 6,520,000**, and its current liabilities exceeded its current assets by approximately RMB 36,167,000, indicating a material going concern uncertainty[24](index=24&type=chunk) - Directors have taken measures to mitigate liquidity pressure, including financial support from shareholders, negotiating repayment plans with suppliers, cutting costs, and expect positive operating cash flow[25](index=25&type=chunk)[29](index=29&type=chunk) [3. Significant Accounting Policies](index=11&type=section&id=3.%20Significant%20Accounting%20Policies) The accounting policies used in these interim financial statements are consistent with the 2024 annual financial statements, with no significant impact expected from new HKFRS amendments - The accounting policies used in the preparation of these interim financial statements are consistent with those used in the annual financial statements for the year ended December 31, 2024[28](index=28&type=chunk) - The directors are not aware of any significant impact on the Group's financial statements from the application of new and revised HKFRSs for the six months ended June 30, 2025, and in the future[28](index=28&type=chunk) [4. Segment Reporting](index=11&type=section&id=4.%20Segment%20Reporting) The company's main operating segments are integrated real estate agency services and professional property management services, with the former's revenue declining sharply in H1 2025 - The Group's reportable and operating segments are the provision of integrated real estate agency services and professional property management services[30](index=30&type=chunk) Segment Revenue and (Loss)/Profit (RMB'000) | Segment | H1 2025 Revenue | H1 2025 (Loss)/Profit | H1 2024 Revenue | H1 2024 (Loss)/Profit | | :--- | :--- | :--- | :--- | :--- | | Real estate agency services | 692 | (4,430) | 5,432 | (14,251) | | Property management services | 167,739 | 13,684 | 180,653 | 18,804 | | Total | 168,431 | 9,254 | 186,085 | 4,553 | - Revenue from real estate agency services **decreased by 87.3%** year-on-year, while revenue from property management services decreased by 7.1%[32](index=32&type=chunk) [5. Revenue](index=13&type=section&id=5.%20Revenue) The company's revenue is primarily derived from property management services, though both property management and community value-added service revenues have declined Revenue Breakdown (RMB'000) | Revenue Type | Recognition Timing | H1 2025 | H1 2024 | Change | Change Rate | | :--- | :--- | :--- | :--- | :--- | :--- | | Real estate agency services income | Point in time | 692 | 5,432 | (4,740) | -87.3% | | Property management services income | Over time | 147,455 | 152,648 | (5,193) | -3.4% | | Value-added services to non-property owners income | Over time | 4,881 | 7,983 | (3,102) | -38.9% | | Community value-added services income - Other | Point in time | 15,240 | 19,511 | (4,271) | -21.9% | | Community value-added services income - Sale of goods | Over time | 163 | 511 | (348) | -68.1% | | Total Revenue | | 168,431 | 186,085 | (17,654) | -9.5% | - Property management services income remains the largest revenue source but **decreased by 3.4%** year-on-year[36](index=36&type=chunk) - Income from value-added services to non-property owners and community value-added services **decreased by 38.9% and 21.9%** respectively[36](index=36&type=chunk) [6. Other Income, Losses and Gains, Net](index=13&type=section&id=6.%20Other%20Income,%20Losses%20and%20Gains,%20Net) In H1 2025, the company's other income, losses and gains, net, turned negative, mainly due to fair value losses on investment properties and exchange losses Other Income, Losses and Gains, Net (RMB'000) | Item | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | | Fair value loss on investment properties | (291) | - | (291) | | Government grants | 109 | 52 | 57 | | Interest income | 3 | 105 | (102) | | Net exchange (loss)/gain | (382) | 105 | (487) | | Fair value gain on financial assets at FVTPL | 148 | 199 | (51) | | Total other income, losses and gains, net | (359) | 795 | (1,154) | - A **fair value loss on investment properties of RMB 291 thousand** was recorded in H1 2025, with no such loss in the prior period[37](index=37&type=chunk) - Net exchange gain of RMB 105 thousand in H1 2024 turned into a **net exchange loss of RMB 382 thousand** in H1 2025[37](index=37&type=chunk) [7. Loss Before Income Tax](index=14&type=section&id=7.%20Loss%20Before%20Income%20Tax) The company's loss before income tax narrowed in H1 2025, primarily due to a significant reduction in net impairment losses on financial assets Components of Loss Before Income Tax (RMB'000) | Item | H1 2025 | H1 2024 | Change | Change Rate | | :--- | :--- | :--- | :--- | :--- | | Auditor's remuneration | 22 | 109 | (87) | -79.8% | | Employee benefit expenses | 65,531 | 71,136 | (5,605) | -7.9% | | Short-term lease expenses | 1,346 | 2,188 | (842) | -38.5% | | Net impairment losses on financial assets | 23,576 | 32,816 | (9,240) | -28.2% | | - Trade receivables | 16,468 | 19,755 | (3,287) | -16.6% | | - Amounts due from related companies | 6,894 | 4,987 | 1,907 | 38.2% | | - Amounts due from fellow subsidiaries/related companies | - | 7,123 | (7,123) | -100.0% | - The **28.2% decrease in net impairment losses on financial assets** was the main driver for the reduced loss before income tax[38](index=38&type=chunk) - Employee benefit expenses and short-term lease expenses **decreased by 7.9% and 38.5%** respectively[38](index=38&type=chunk) [8. Income Tax](index=15&type=section&id=8.%20Income%20Tax) In H1 2025, the company's income tax turned from a credit to a charge, mainly influenced by changes in deferred tax Income Tax Components (RMB'000) | Item | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | | Current tax - PRC Enterprise Income Tax | 1,924 | 1,431 | 493 | | Deferred tax | (4,616) | (2,434) | (2,182) | | Total | (2,692) | (1,003) | (1,689) | - The Group's PRC entities are subject to an income tax rate of 25%, but certain subsidiaries enjoy a preferential rate of 5% as qualified small and micro enterprises[43](index=43&type=chunk) [9. Dividends](index=15&type=section&id=9.%20Dividends) No dividends were paid or declared by the company for the six months ended June 30, 2025 - No dividend was paid or declared by the Company for the six months ended June 30, 2025 (six months ended June 30, 2024: nil), nor has any dividend been proposed since the end of the reporting period[40](index=40&type=chunk) [10. Loss Per Share](index=15&type=section&id=10.%20Loss%20Per%20Share) The company's basic and diluted loss per share narrowed significantly in H1 2025, reflecting the reduced loss for the period Loss Per Share (RMB cents) | Indicator | H1 2025 | H1 2024 | Change | Change Rate | | :--- | :--- | :--- | :--- | :--- | | Loss for the period attributable to owners of the Company (RMB'000) | (5,999) | (14,673) | 8,674 | -59.1% | | Weighted average number of ordinary shares | 400,000,000 | 400,000,000 | 0 | 0.0% | | Basic and diluted loss per share | (1.50) | (3.67) | 2.17 | -59.1% | - As there were no potential dilutive ordinary shares issued for the six months ended June 30, 2025 and 2024, diluted loss per share is the same as the basic loss per share[41](index=41&type=chunk) [11. Property, Plant and Equipment](index=15&type=section&id=11.%20Property,%20Plant%20and%20Equipment) In H1 2025, the company's expenditure on purchasing property, plant and equipment decreased, and a loss was incurred on the disposal of related assets Changes in Property, Plant and Equipment (RMB'000) | Item | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | | Total cost of purchases | 855 | 930 | (75) | | Net book value of disposals | 63 | 563 | (500) | | (Loss)/gain on disposals | (10) | 202 | (212) | - The disposal of property, plant and equipment resulted in a **loss of RMB 10 thousand** in H1 2025, compared to a gain of RMB 202 thousand in the prior period[42](index=42&type=chunk) [12. Investment Properties](index=16&type=section&id=12.%20Investment%20Properties) The company holds investment properties, including shops, commercial properties, residential units, and parking spaces, to earn rental income or for capital appreciation - The Group holds investment properties for the purpose of earning rental income or for capital appreciation[44](index=44&type=chunk) - As of June 30, 2025, investment properties included one leased shop, ten commercial properties, one residential property, and eight parking spaces[44](index=44&type=chunk) [13. Leases](index=16&type=section&id=13.%20Leases) The company has entered into multiple lease agreements for offices, shops, and parking spaces in China with terms of two to seven years - The Group has entered into several lease agreements for the use of offices, shop properties, and parking spaces in China with lease terms of two to seven years[45](index=45&type=chunk) Lease Liabilities (RMB'000) | Item | June 30, 2025 | Dec 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Current liabilities | 303 | 298 | 5 | | Non-current liabilities | 564 | 696 | (132) | | Total | 867 | 994 | (127) | [14. Trade Receivables](index=17&type=section&id=14.%20Trade%20Receivables) As of June 30, 2025, gross trade receivables increased, but a larger impairment provision led to a decrease in the net balance, with a notable decline in receivables aged within one year Trade Receivables (RMB'000) | Item | June 30, 2025 | Dec 31, 2024 | Change | Change Rate | | :--- | :--- | :--- | :--- | :--- | | Gross trade receivables | 178,425 | 166,224 | 12,201 | 7.3% | | Less: Impairment loss | (98,736) | (82,268) | (16,468) | 20.0% | | Net amount | 79,689 | 83,956 | (4,267) | -5.1% | | Ageing: Within 1 year | 39,192 | 61,946 | (22,754) | -36.7% | | Ageing: 1 to 2 years | 26,890 | 17,975 | 8,915 | 49.6% | | Ageing: Over 2 years | 13,607 | 4,035 | 9,572 | 237.2% | - For the six months ended June 30, 2025, an **additional provision of RMB 16,468,000** was made for gross trade receivables[50](index=50&type=chunk) [15. Amounts due from/to fellow subsidiaries/related companies, related companies and non-controlling interests](index=18&type=section&id=15.%20Amounts%20due%20from%2Fto%20fellow%20subsidiaries%2Frelated%20companies%2C%20related%20companies%20and%20non-controlling%20interests) Amounts due from fellow subsidiaries/related companies were reclassified, and both gross amounts and impairment losses for amounts due from related companies increased significantly - Amounts due from fellow subsidiaries/related companies were reclassified to amounts due from related companies after March 20, 2024[51](index=51&type=chunk) Amounts due from related companies (RMB'000) | Item | June 30, 2025 | Dec 31, 2024 | Change | Change Rate | | :--- | :--- | :--- | :--- | :--- | | Gross amounts due from related companies | 170,910 | 63,802 | 107,108 | 167.9% | | Less: Impairment loss | (130,077) | (42,363) | (87,714) | 207.1% | | Net amount | 40,833 | 21,439 | 19,394 | 90.5% | | Ageing: Over 1 year | 37,476 | 18,534 | 18,942 | 102.2% | Amounts due to related companies and non-controlling interests (RMB'000) | Item | June 30, 2025 | Dec 31, 2024 | Change | Change Rate | | :--- | :--- | :--- | :--- | :--- | | Amounts due to related companies (within 1 year) | 1,049 | 21 | 1,028 | 4895.2% | | Amounts due to non-controlling interests (within 1 year) | 2,900 | 159 | 2,741 | 1723.9% | [16. Financial assets at fair value through profit or loss](index=21&type=section&id=16.%20Financial%20assets%20at%20fair%20value%20through%20profit%20or%20loss) The total value of the company's financial assets at FVTPL decreased, primarily due to a reduction in unlisted investments Financial Assets at FVTPL (RMB'000) | Item | June 30, 2025 | Dec 31, 2024 | Change | Change Rate | | :--- | :--- | :--- | :--- | :--- | | Unlisted partnership investment | 5,555 | 5,407 | 148 | 2.7% | | Unlisted investment | - | 1,016 | (1,016) | -100.0% | | Total | 5,555 | 6,423 | (868) | -13.5% | - The fair value change of the partnership investment is recognised in "other income, losses and gains, net" in the consolidated statement of profit or loss and other comprehensive income[57](index=57&type=chunk) [17. Restricted bank balances, bank balances and cash](index=21&type=section&id=17.%20Restricted%20bank%20balances%2C%20bank%20balances%20and%20cash) As of June 30, 2025, the company's total bank balances and cash decreased significantly, with the majority held in RMB-denominated deposits in China Bank Balances and Cash (RMB'000) | Item | June 30, 2025 | Dec 31, 2024 | Change | Change Rate | | :--- | :--- | :--- | :--- | :--- | | Total bank balances and cash | 45,337 | 66,550 | (21,213) | -31.9% | | Less: Restricted bank balances | (1,301) | (1,785) | 484 | -27.1% | | Cash and cash equivalents | 44,036 | 64,765 | (20,729) | -32.0% | - Approximately **RMB 44,570,000** is deposited with banks in China and denominated in RMB, which is not a freely convertible currency[58](index=58&type=chunk) [18. Trade Payables](index=22&type=section&id=18.%20Trade%20Payables) As of June 30, 2025, the company's total trade payables decreased slightly, with amounts due within one year remaining the largest component Trade Payables (RMB'000) | Ageing | June 30, 2025 | Dec 31, 2024 | Change | Change Rate | | :--- | :--- | :--- | :--- | :--- | | Within 1 year | 61,028 | 62,696 | (1,668) | -2.7% | | Over 1 year | 10,032 | 11,770 | (1,738) | -14.8% | | Total | 71,060 | 74,466 | (3,406) | -4.6% | - Trade payables mainly represent commissions payable to cooperative real estate agents and amounts due to property management service suppliers[59](index=59&type=chunk) [19. Share Capital](index=22&type=section&id=19.%20Share%20Capital) As of June 30, 2025, the company's authorised and issued share capital remained unchanged in both number and amount Share Capital Details | Item | Number | Amount (HKD'000) | Amount (RMB'000) | | :--- | :--- | :--- | :--- | | Authorised Share Capital (par value HK$0.01 per share) | 10,000,000,000 | 100,000 | - | | Issued and Fully Paid Share Capital (par value HK$0.01 per share) | 400,000,000 | 4,000 | 3,403 | - From January 1, 2024, to June 30, 2025, there were no changes to the company's authorised and issued share capital[60](index=60&type=chunk)[61](index=61&type=chunk) [20. Commitments and Contingent Liabilities](index=22&type=section&id=20.%20Commitments%20and%20Contingent%20Liabilities) As of June 30, 2025, the company had no significant capital commitments or contingent liabilities - As at June 30, 2025, the Group did not have any significant capital commitments[61](index=61&type=chunk) - As at June 30, 2025, the Group did not have any significant contingent liabilities[62](index=62&type=chunk) [21. Related Party Transactions](index=23&type=section&id=21.%20Related%20Party%20Transactions) In H1 2025, the structure of the company's related party transactions changed, with increased revenue from related companies and decreased revenue from fellow subsidiaries/related companies Related Party Transaction Revenue (RMB'000) | Transaction Type | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | | Property management service income from related companies | 8,297 | - | 8,297 | | Property management service income from fellow subsidiaries/related companies | - | 2,272 | (2,272) | | Value-added services to non-property owners income from related companies | 2,942 | - | 2,942 | | Value-added services to non-property owners income from fellow subsidiaries/related companies | - | 2,926 | (2,926) | | Short-term lease payments to related companies | 1,091 | - | 1,091 | | Short-term lease payments to fellow subsidiaries/related companies | - | 1,708 | (1,708) | - All related party transactions were conducted on terms mutually agreed upon by the parties[63](index=63&type=chunk) Management Discussion and Analysis [Business Review](index=24&type=section&id=Business%20Review) The company continued to optimize its business structure, focusing on property management and community value-added services, yet total revenue decreased by 9.5% year-on-year - The Company continued to optimize its business structure, further focusing on the development of property management services and ancillary community value-added services[64](index=64&type=chunk) - For the six months ended June 30, 2025, the Group's total revenue was approximately **RMB 168.4 million**, a decrease of approximately 9.5% from the same period last year[64](index=64&type=chunk) - The decrease in revenue was mainly due to a decline of approximately RMB 4.7 million in the real estate agency services segment and RMB 12.9 million in the property management services segment[64](index=64&type=chunk) [Integrated Real Estate Agency Services Segment](index=24&type=section&id=Integrated%20Real%20Estate%20Agency%20Services%20Segment) Revenue from real estate agency services plummeted by 87.3% due to the prolonged downturn in the real estate industry and a strategic shift in focus - For the six months ended June 30, 2025, the real estate agency services segment recorded revenue of approximately **RMB 0.7 million**, a decrease of 87.3% from the same period last year[65](index=65&type=chunk) - The decrease was mainly due to the continued downturn in the real estate industry and the company's strategic decision to shift its primary resources to property management services[65](index=65&type=chunk) [Professional Property Management Services Segment](index=24&type=section&id=Professional%20Property%20Management%20Services%20Segment) The property management services segment's revenue declined by 7.1% year-on-year, primarily due to a reduction in contracted and managed GFA - The professional property management services segment recorded revenue of approximately **RMB 167.7 million**, a year-on-year decrease of 7.1%[66](index=66&type=chunk) - The decrease in revenue was mainly due to the reduction in contracted and managed gross floor area (GFA)[66](index=66&type=chunk) Property Management Services Segment Revenue (RMB million) | Service Type | H1 2025 | H1 2024 | Change Rate | | :--- | :--- | :--- | :--- | | Property management services | 147.5 | 152.6 | -3.4% | | Value-added services to non-property owners | 4.9 | 8.0 | -38.9% | | Community value-added services | 15.4 | 20.0 | -23.1% | - As of June 30, 2025, the contracted GFA was approximately **17.9 million sq.m.** and the GFA under management was approximately **14.3 million sq.m.**, representing decreases of 4.3% and 5.2% respectively from December 31, 2024[67](index=67&type=chunk) [Industry Review and Outlook](index=25&type=section&id=Industry%20Review%20and%20Outlook) China's economy grew steadily in H1 2025, but the property service industry is shifting from scale-driven growth to value creation, with future competition hinging on service depth and technology integration - In H1 2025, China's GDP grew by approximately 5%, and the real estate market showed initial signs of stabilization through policy intervention[70](index=70&type=chunk) - The property service industry is transitioning from scale-driven growth to a dual focus on value creation and operational excellence, with competitive advantage depending on technology enablement and value-added service capabilities[70](index=70&type=chunk) - The company will focus on standardization, explore smart service models, promote co-governance, innovate the "property + lifestyle services" model, and introduce trust-based property services[71](index=71&type=chunk) [Financial Review](index=26&type=section&id=Financial%20Review) In H1 2025, the company's total revenue declined, but reduced costs and impairment losses led to a significant narrowing of net loss and loss per share Financial Performance Summary (RMB million) | Indicator | H1 2025 | H1 2024 | Change | Change Rate | | :--- | :--- | :--- | :--- | :--- | | Revenue | 168.4 | 186.1 | (17.7) | -9.5% | | Cost of services | 135.0 | 148.1 | (13.1) | -8.8% | | Administrative expenses | 18.6 | 18.4 | 0.2 | 1.1% | | Net impairment losses on financial assets | 23.6 | 32.8 | (9.2) | -28.2% | | Loss for the period | 6.5 | 12.3 | (5.8) | -47.0% | | Net profit margin | -3.9% | -6.6% | 2.7% | - | - The **reduction in net impairment losses on financial assets** was the primary reason for the narrowed net loss, partially offset by a decrease in gross profit[76](index=76&type=chunk) - The value of investment properties increased by approximately 3.4% to **RMB 14.7 million**[78](index=78&type=chunk) [Liquidity and Financial Resources](index=26&type=section&id=Liquidity%20and%20Financial%20Resources) The company's primary source of funds is cash from operations, but an increase in net current liabilities and a decrease in cash balances indicate heightened liquidity pressure - In 2025, the Group's primary source of funds was cash generated from operating activities[79](index=79&type=chunk) Liquidity and Financial Resources (RMB million) | Indicator | June 30, 2025 | Dec 31, 2024 | Change | Change Rate | | :--- | :--- | :--- | :--- | :--- | | Net current liabilities | 36.2 | 28.0 | 8.2 | 29.3% | | Total assets | 348.2 | 366.7 | (18.5) | -5.0% | | Equity attributable to owners of the Company | 29.8 | 34.1 | (4.3) | -12.6% | | Total bank balances and cash | 45.3 | 66.6 | (21.3) | -32.0% | [Trade Receivables and Amounts due from Related Companies](index=27&type=section&id=Trade%20Receivables%20and%20Amounts%20due%20from%20Related%20Companies) Trade receivables decreased slightly, while amounts due from related companies increased significantly, mainly related to property management, real estate agency services, and earnest money payments - Trade receivables decreased from approximately RMB 84.0 million as of December 31, 2024, to approximately **RMB 79.7 million** as of June 30, 2025[81](index=81&type=chunk) - Amounts due from related companies increased from approximately RMB 38.3 million to approximately **RMB 40.8 million**[81](index=81&type=chunk) [Indebtedness](index=27&type=section&id=Indebtedness) As of June 30, 2025, the company had no short-term or long-term bank borrowings - As at June 30, 2025, the Group had no short-term borrowings and no long-term borrowings[82](index=82&type=chunk) [Foreign Exchange Risk](index=27&type=section&id=Foreign%20Exchange%20Risk) The company's foreign exchange risk is considered insignificant as its main operations are denominated in RMB, and it currently has no foreign currency hedging policy - As the Group's sales are denominated in RMB and its purchases and expenses are denominated in RMB or HKD, foreign exchange risk is considered insignificant[83](index=83&type=chunk) - The Group currently does not have a foreign currency hedging policy, and management continuously monitors foreign exchange risk[83](index=83&type=chunk) [Interest Rate Risk](index=27&type=section&id=Interest%20Rate%20Risk) The company considers its interest rate risk to be insignificant as it has no interest-bearing financial liabilities with a contractual term of more than one year - The Group considers its interest rate risk to be insignificant as it has no interest-bearing financial liabilities with a contractual term of more than one year[84](index=84&type=chunk) [Gearing Ratio](index=27&type=section&id=Gearing%20Ratio) As of June 30, 2025, the company's gearing ratio increased slightly to 78% Gearing Ratio | Indicator | June 30, 2025 | Dec 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Gearing Ratio | 78% | 77% | 1% | [Employees and Group Remuneration Policy](index=27&type=section&id=Employees%20and%20Group%20Remuneration%20Policy) As of June 30, 2025, the total number of employees decreased due to lower demand for real estate agency and property management services Number of Employees | Indicator | June 30, 2025 | June 30, 2024 | Change | Change Rate | | :--- | :--- | :--- | :--- | :--- | | Total Employees | 1,478 | 1,629 | (151) | -9.3% | - The decrease in employees was mainly due to the decline in demand for real estate agency and property management services[86](index=86&type=chunk) - The company provides employees with comprehensive welfare benefits, career development opportunities, and a share option scheme[86](index=86&type=chunk) Disclosure of Interests [Model Code for Securities Transactions by Directors](index=28&type=section&id=Model%20Code%20for%20Securities%20Transactions%20by%20Directors) The company has adopted a code of conduct for securities transactions by directors on terms no less exacting than the required standard, with all directors confirming compliance - The Company has adopted a code of conduct for securities transactions by directors on terms no less exacting than the Model Code set out in Appendix C3 to the Listing Rules[87](index=87&type=chunk) - All directors have confirmed that they have complied with the required standards set out in the Model Code for the six months ended June 30, 2025[87](index=87&type=chunk) [Directors' and Chief Executive's Interests and Short Positions in Shares, Underlying Shares and Debentures](index=28&type=section&id=Directors'%20and%20Chief%20Executive's%20Interests%20and%20Short%20Positions%20in%20Shares,%20Underlying%20Shares%20and%20Debentures) As of June 30, 2025, Mr Fang Ming, Ms Xie Lihua, and Mr Han Shuguang held long positions in the company's shares, with the former two deemed to have interests in the majority due to a concert party deed Directors' and Chief Executive's Shareholdings | Name | Nature of Interest | Total Shares Held | Percentage of Shareholding | | :--- | :--- | :--- | :--- | | Mr Fang Ming | Interest of controlled corporation & legal and beneficial owner | 225,948,000 | 56.49% | | Ms Xie Lihua | Interest of controlled corporation & legal and beneficial owner | 225,948,000 | 56.49% | | Mr Han Shuguang | Interest of controlled corporation | 4,500,000 | 1.125% | - Mr Fang Ming, Ms Xie Lihua, and Mr Huang Peng are parties acting in concert, and therefore Mr Fang and Ms Xie are deemed to be interested in the total number of shares in which each of them is interested[90](index=90&type=chunk) [Substantial Shareholders' and Other Persons' Interests and Short Positions in Shares and Underlying Shares and Debentures](index=29&type=section&id=Substantial%20Shareholders'%20and%20Other%20Persons'%20Interests%20and%20Short%20Positions%20in%20Shares%20and%20Underlying%20Shares%20and%20Debentures) As of June 30, 2025, several individuals and entities, including Ms He Kangkang and Mansion Green, were disclosed as substantial shareholders holding 5% or more of the issued share capital Substantial Shareholders' Shareholdings | Name/Entity | Nature of Interest | Number of Shares Held | Approx. Percentage of Shareholding | | :--- | :--- | :--- | :--- | | Ms He Kangkang | Interest of spouse | 225,948,000 | 56.49% | | Mr Zheng Muming | Interest of spouse | 225,948,000 | 56.49% | | Mr Huang Peng | Interest of controlled corporation, spouse, and beneficial owner | 225,948,000 | 56.49% | | Ms Zheng Hui | Interest of spouse and beneficial owner | 225,948,000 | 56.49% | | Mansion Green | Legal and beneficial owner | 97,200,000 | 24.3% | | Aspiring Vision | Legal and beneficial owner | 64,800,000 | 16.2% | | Huiyu Investment | Legal and beneficial owner | 60,000,000 | 15% | - Ms He Kangkang is the spouse of Mr Fang Ming, Mr Zheng Muming is the spouse of Ms Xie Lihua, and Ms Zheng Hui is the spouse of Mr Huang Peng, and are thus deemed to have interests under the SFO[91](index=91&type=chunk) - Mansion Green is wholly-owned by Mr Fang Ming through his holding companies, thus several other entities are deemed to be interested in the same number of shares as Mansion Green[91](index=91&type=chunk) Other Information [Directors' Rights to Acquire Shares or Debentures](index=30&type=section&id=Directors'%20Rights%20to%20Acquire%20Shares%20or%20Debentures) During the six months ended June 30, 2025, no arrangements were made to enable directors to acquire benefits by means of the acquisition of shares in or debentures of the company - For the six months ended June 30, 2025, neither the Company nor any of its subsidiaries or associated corporations was a party to any arrangement to enable the directors and chief executive of the Company to acquire benefits by means of the acquisition of shares in or debentures of the Company or its associated corporations[93](index=93&type=chunk) [Changes in Directors' Information](index=30&type=section&id=Changes%20in%20Directors'%20Information) Mr Leung Wai Hung resigned as an independent non-executive director of Wing Lee Engineering Holdings Limited on July 14, 2025 - Mr Leung Wai Hung resigned as an independent non-executive director of Wing Lee Engineering Holdings Limited (stock code: 9639) on July 14, 2025[94](index=94&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=30&type=section&id=Purchase,%20Sale%20or%20Redemption%20of%20the%20Company's%20Listed%20Securities) During the six months ended June 30, 2025, neither the company nor its subsidiaries purchased, sold, or redeemed any of its listed securities, and no treasury shares were held - For the six months ended June 30, 2025, neither the Company nor any of its subsidiaries purchased, sold or redeemed any of the Company's listed securities on the Stock Exchange or any other stock exchange by way of private arrangement or general offer[95](index=95&type=chunk) - As at June 30, 2025, the Company did not hold any treasury shares[95](index=95&type=chunk) [Share Option Scheme](index=30&type=section&id=Share%20Option%20Scheme) The company adopted a share option scheme in 2017, under which no options were granted, exercised, or lapsed as of June 30, 2025, with 40,000,000 options available for grant - The Company adopted a share option scheme on October 23, 2017[96](index=96&type=chunk) - As at June 30, 2025, no share options had been granted, agreed, exercised, cancelled or lapsed under the Scheme, and there were no outstanding share options[96](index=96&type=chunk) - As at the date of this interim report, a total of **40,000,000 shares** were available for issue under the Scheme, representing 10% of the Company's issued share capital on that date[96](index=96&type=chunk) [Compliance with the Corporate Governance Code](index=30&type=section&id=Compliance%20with%20the%20Corporate%20Governance%20Code) The Board has reviewed and confirmed that the company complied with all code provisions of the Corporate Governance Code in Appendix C1 of the Listing Rules for the six months ended June 30, 2025 - The Board has reviewed the Group's corporate governance practices and is satisfied that the Company has complied with all the code provisions set out in the Corporate Governance Code in Appendix C1 to the Listing Rules for the six months ended June 30, 2025[97](index=97&type=chunk) [Directors' Interests in Competing Business](index=30&type=section&id=Directors'%20Interests%20in%20Competing%20Business) For the six months ended June 30, 2025, the directors were not aware of any business or interest of a director or controlling shareholder that competes or may compete with the company's business - The Directors are not aware of any business or interest of the Directors or the controlling shareholders of the Company or any of their respective close associates that competes or is likely to compete, either directly or indirectly, with the business of the Group for the six months ended June 30, 2025[98](index=98&type=chunk) - None of them is engaged in any business that competes or is likely to compete with the business of the Group or has any other conflict of interest with the Group, other than those disclosed in the Prospectus[99](index=99&type=chunk) [Pledge of Assets](index=31&type=section&id=Pledge%20of%20Assets) A subsidiary of the company had secured a bank loan with trade receivables and equity, which has been fully repaid, although the equity pledge release is still pending - A subsidiary of the Company had secured a bank loan of approximately **RMB 19,930,000** with certain trade receivables[100](index=100&type=chunk) - A subsidiary of the Company pledged approximately **68.9% of the equity interest** in Fangyuan Modern Life[100](index=100&type=chunk) - The bank loan was fully repaid before its maturity, but the relevant procedures for the release of the equity pledge had not been completed as of the date of this interim report[100](index=100&type=chunk) [Material Investments, Acquisitions and Disposals](index=31&type=section&id=Material%20Investments,%20Acquisitions%20and%20Disposals) For the six months ended June 30, 2025, the company had no material acquisitions or disposals of subsidiaries, associates, or joint ventures - For the six months ended June 30, 2025, the Group did not have any material acquisitions or disposals of subsidiaries, associates and joint ventures[101](index=101&type=chunk) [Progress of Past Connected Transactions](index=31&type=section&id=Progress%20of%20Past%20Connected%20Transactions) The company's swap agreement with Heshan Fudu involving 23 properties is pending physical delivery, and legal action may be taken if obligations are not met - An indirect wholly-owned subsidiary of the Company entered into a swap agreement with Heshan Fudu Property Development Co, Ltd involving 23 properties to offset outstanding receivables[102](index=102&type=chunk) - The physical delivery of the 23 properties is subject to the issuance of the construction project completion acceptance certificate and the housing survey report for the relevant properties[102](index=102&type=chunk) - If Heshan Fudu fails to fulfill its obligations by the final deadline of November 28, 2025, the Company will consider taking necessary legal measures to recover the outstanding receivables[102](index=102&type=chunk) [Outstanding Earnest Money Balance](index=31&type=section&id=Outstanding%20Earnest%20Money%20Balance) The company is addressing an outstanding earnest money balance, having obtained a favorable judgment for a portion and is negotiating the recovery of the remainder - The outstanding earnest money balance, which was initially expected to be settled by December 31, 2023, remains outstanding[104](index=104&type=chunk) - The Company has initiated civil legal proceedings for the outstanding earnest money balance of approximately **RMB 14,180,000** owed by Fangyuan Huijin and has obtained a favorable judgment and enforcement order[104](index=104&type=chunk) - The Company is still in communication and negotiation with the relevant members of Fangyuan Group to recover the remaining balance of the outstanding earnest money[105](index=105&type=chunk) [Interim Dividend](index=32&type=section&id=Interim%20Dividend) The Board of Directors does not recommend the payment of an interim dividend for the six months ended June 30, 2025 - The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025[106](index=106&type=chunk) [Review by Audit Committee](index=32&type=section&id=Review%20by%20Audit%20Committee) The Audit Committee has reviewed the Group's unaudited interim results for the six months ended June 30, 2025, and found them compliant with applicable standards - The Audit Committee has reviewed the unaudited interim results of the Group for the six months ended June 30, 2025[107](index=107&type=chunk) - The Audit Committee is of the view that the unaudited interim results comply with the applicable accounting standards and the Listing Rules and that adequate disclosures have been made[107](index=107&type=chunk) [Acknowledgement](index=32&type=section&id=Acknowledgement) The Chairman, on behalf of the Board, expresses gratitude to shareholders, business partners, customers, directors, management, and employees - The Chairman, on behalf of the Board, would like to express his sincere gratitude to the shareholders, business partners and customers for their continuous support to the Group[108](index=108&type=chunk) - He also extends his appreciation to all directors, management and employees for their hard work and dedication during the period[108](index=108&type=chunk)