[Announcement and Basic Information](index=1&type=section&id=Announcement%20and%20Basic%20Information) This section provides disclaimers, essential company information, and the announcement date for the unaudited interim results [Disclaimer](index=1&type=section&id=Disclaimer) The HKEX and HKSE disclaim responsibility for the announcement's content and any losses incurred from relying on it - The Hong Kong Stock Exchange and the Stock Exchange of Hong Kong assume no responsibility for the content of this announcement[1](index=1&type=chunk) [Company Information](index=1&type=section&id=Company%20Information) The company is a joint stock limited company registered in the PRC with stock code 00753 - The company is a joint stock limited company registered in the People's Republic of China, stock code: **00753**[2](index=2&type=chunk) [Results Announcement Date](index=1&type=section&id=Results%20Announcement%20Date) The Board approved the unaudited interim results for the six months ended June 30, 2025, on August 28, 2025 - The Board approved the unaudited interim results for the six months ended June 30, 2025, on August 28, 2025[3](index=3&type=chunk)[4](index=4&type=chunk) [Consolidated Financial Statements](index=2&type=section&id=Consolidated%20Financial%20Statements) This section presents the group's consolidated financial performance and position, including income, comprehensive income, and balance sheets [Consolidated Income Statement](index=2&type=section&id=Consolidated%20Income%20Statement) The group saw slight revenue growth but expanded operating loss, while loss attributable to shareholders narrowed for the six months ended June 30, 2025 | Metric | June 30, 2025 (RMB thousands) | June 30, 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 80,757,434 | 79,520,332 | 1.56% | | Other income and gains | 2,615,845 | 3,250,850 | -19.53% | | Operating loss | (1,696,430) | (1,081,972) | 56.79% | | Loss before tax | (2,787,902) | (3,286,075) | -15.16% | | Loss for the period | (2,710,105) | (3,538,611) | -23.42% | | Loss attributable to shareholders of the Company | (1,804,820) | (2,778,953) | -35.05% | | Loss per share (basic and diluted) | RMB(0.11) | RMB(0.18) | -38.89% | - Operating loss expanded from **RMB 1.082 billion** in the same period of 2024 to **RMB 1.696 billion** in the same period of 2025, an increase of **56.79%**[5](index=5&type=chunk) - Loss attributable to shareholders of the Company narrowed from **RMB 2.779 billion** in the same period of 2024 to **RMB 1.805 billion** in the same period of 2025, a decrease of **35.05%**[5](index=5&type=chunk) [Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=3&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) Total comprehensive income for the period remained negative but narrowed year-on-year, mainly due to foreign currency translation differences | Metric | June 30, 2025 (RMB thousands) | June 30, 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Loss for the period | (2,710,105) | (3,538,611) | -23.42% | | Other comprehensive income for the period (net of related income tax) | (701,811) | 310,122 | -326.29% | | Total comprehensive income for the period | (3,411,916) | (3,228,489) | 5.68% | | Total comprehensive income attributable to shareholders of the Company | (2,504,603) | (2,433,924) | 2.90% | - Foreign currency translation differences shifted from a **RMB 137 million** gain in the same period of 2024 to a **RMB 363 million** loss in the same period of 2025[6](index=6&type=chunk) [Consolidated Statement of Financial Position](index=4&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, total assets slightly increased, current assets grew significantly, but net assets decreased, and net current liabilities improved | Metric | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Total assets | 347,539,122 | 345,750,173 | 0.52% | | Non-current assets | 299,788,972 | 305,062,970 | -1.73% | | Current assets | 47,750,150 | 40,687,203 | 17.37% | | Current liabilities | (126,209,104) | (137,610,055) | -8.30% | | Non-current liabilities | (183,100,021) | (167,214,148) | 9.50% | | Net assets | 38,229,997 | 40,925,970 | -6.60% | | Equity attributable to shareholders of the Company | 42,623,569 | 45,128,172 | -5.55% | - Cash and cash equivalents increased from **RMB 21.039 billion** as of December 31, 2024, to **RMB 25.331 billion** as of June 30, 2025, a growth of **20.40%**[7](index=7&type=chunk)[54](index=54&type=chunk) - Net current liabilities decreased from **RMB 96.923 billion** as of December 31, 2024, to **RMB 78.459 billion** as of June 30, 2025, an improvement of **18.99%**[8](index=8&type=chunk)[63](index=63&type=chunk) [Notes to the Unaudited Interim Financial Information](index=6&type=section&id=Notes%20to%20the%20Unaudited%20Interim%20Financial%20Information) This section details the basis of preparation, revenue breakdown, segment information, and specific financial items [Basis of Preparation](index=6&type=section&id=Basis%20of%20Preparation) Interim financial information is prepared under IAS 34 and HKEX Listing Rules, reviewed by KPMG, and based on a going concern despite net current liabilities - The interim financial information is prepared in accordance with International Accounting Standard 34 and the disclosure requirements of the Hong Kong Stock Exchange Listing Rules, with accounting policies consistent with the 2024 annual financial statements and no changes occurring[9](index=9&type=chunk) - This interim financial information is unaudited but has been reviewed by KPMG in accordance with Hong Kong Standard on Review Engagements 2410[9](index=9&type=chunk) - As of June 30, 2025, the Group had net current liabilities of approximately **RMB 78.459 billion**, but with cash inflows from operating activities and unused bank credit facilities of **RMB 180.093 billion**, the Board believes the Group has sufficient funds for continuous operation[10](index=10&type=chunk) [Revenue Breakdown](index=7&type=section&id=Revenue%20Breakdown) Total group revenue increased by 1.56% year-on-year, primarily driven by air transportation, with significant growth in aircraft maintenance revenue | Revenue Category | June 30, 2025 (RMB thousands) | June 30, 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Air transportation - Passenger | 73,196,376 | 73,137,116 | 0.08% | | Air transportation - Cargo and mail | 3,577,468 | 3,328,452 | 7.48% | | Air transportation - Other | 921,734 | 859,569 | 7.23% | | Other - Aircraft maintenance revenue | 2,825,795 | 2,023,821 | 39.63% | | Total | 80,757,434 | 79,520,332 | 1.56% | - Aircraft maintenance revenue significantly increased by **39.63%** year-on-year, reaching **RMB 2.826 billion**[11](index=11&type=chunk) [Segment Information](index=7&type=section&id=Segment%20Information) The group operates in air transportation and other operations segments, with air transportation as the main revenue source and growing other operations - The Group has two reportable operating segments: "Air Transportation" (passenger and cargo) and "Other Operations" (aircraft maintenance and other aviation-related services)[13](index=13&type=chunk) - The Group has two reportable operating segments: Air Transportation (passenger and cargo) and Other Operations (aircraft maintenance and other aviation-related services)[13](index=13&type=chunk) [External Customer Sales Revenue by Segment](index=7&type=section&id=External%20Customer%20Sales%20Revenue%20by%20Segment) | Segment | June 30, 2025 External Customer Sales Revenue (RMB thousands) | June 30, 2024 External Customer Sales Revenue (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Air Transportation | 77,869,936 | 77,438,760 | 0.56% | | Other Operations | 2,887,498 | 2,081,572 | 38.72% | | Total | 80,757,434 | 79,520,332 | 1.56% | [Pre-tax (Loss) / Profit by Segment](index=7&type=section&id=Pre-tax%20(Loss)%20%2F%20Profit%20by%20Segment) | Segment | June 30, 2025 Pre-tax (Loss) / Profit (RMB thousands) | June 30, 2024 Pre-tax (Loss) / Profit (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Air Transportation | (3,185,233) | (3,715,694) | -14.39% | | Other Operations | 388,330 | 502,625 | -22.74% | | Total (IFRS) | (2,787,902) | (3,286,075) | -15.16% | [Operating Segment Classification](index=7&type=section&id=Operating%20Segment%20Classification) The group's reporting segments are air transportation (passenger and cargo) and other operations (aircraft maintenance and related services) - The Group's reportable operating segments include "Air Transportation" and "Other Operations"[13](index=13&type=chunk) [Segment Results](index=8&type=section&id=Segment%20Results) Air transportation segment's pre-tax loss narrowed, while other operations' pre-tax profit decreased, with slight increases in total assets and liabilities | Metric | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Air Transportation Segment Assets | 334,218,916 | 335,387,462 | -0.35% | | Other Operations Segment Assets | 29,253,558 | 35,068,041 | -16.60% | | Total Assets (IFRS) | 347,539,122 | 345,750,173 | 0.52% | | Total Liabilities (IFRS) | 309,309,125 | 304,824,203 | 1.47% | [Geographical Segment Revenue](index=10&type=section&id=Geographical%20Segment%20Revenue) International route revenue grew significantly by 15.02%, while mainland China revenue slightly decreased, and Hong Kong, Macau, and Taiwan revenue grew steadily | Region | June 30, 2025 (RMB thousands) | June 30, 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Mainland China | 56,277,430 | 57,960,673 | -2.90% | | Hong Kong, Macau and Taiwan, China | 2,539,842 | 2,484,032 | 2.25% | | International | 21,940,162 | 19,075,627 | 15.02% | | Total | 80,757,434 | 79,520,332 | 1.56% | - International route revenue increased from **23.99%** in 2024 to **27.17%** in 2025[16](index=16&type=chunk) [Other Income and Gains](index=10&type=section&id=Other%20Income%20and%20Gains) Total other income and gains decreased by 19.53% year-on-year, mainly due to a significant reduction in gains from disposal of property, plant, and equipment | Item | June 30, 2025 (RMB thousands) | June 30, 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue from code-share flights and subsidies | 2,407,102 | 2,232,415 | 7.83% | | Gains on disposal of property, plant, equipment and right-of-use assets | 22,327 | 775,226 | -97.12% | | Dividend income | 13,131 | 5,935 | 121.25% | | Total | 2,615,845 | 3,250,850 | -19.53% | [Operating Loss](index=11&type=section&id=Operating%20Loss) The group's operating loss is primarily influenced by depreciation and amortization costs, particularly for property, plant, and equipment and right-of-use assets | Item | June 30, 2025 (RMB thousands) | June 30, 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Depreciation of property, plant and equipment | 7,072,151 | 6,505,225 | 8.71% | | Depreciation of right-of-use assets | 7,748,718 | 7,503,289 | 3.27% | | Depreciation of investment properties | 16,767 | 16,767 | 0.00% | | Amortisation of intangible assets | 2 | 4 | -50.00% | [Interest Expense](index=11&type=section&id=Interest%20Expense) Total interest expense decreased by 9.40% year-on-year, driven by lower interest on interest-bearing loans and lease liabilities, alongside increased capitalized interest | Item | June 30, 2025 (RMB thousands) | June 30, 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Interest on interest-bearing loans | 1,951,327 | 2,215,565 | -11.93% | | Interest on lease liabilities | 1,114,236 | 1,192,838 | -6.60% | | Total interest expense | 3,070,710 | 3,411,031 | -9.98% | | Less: Capitalized interest | (179,756) | (145,558) | 23.49% | | Net interest expense | 2,890,954 | 3,265,473 | -11.46% | - The annual interest rate for capitalized borrowing costs during this period ranged from **1.95% to 2.80%**, lower than the **2.40% to 4.45%** in the same period last year[19](index=19&type=chunk) [Income Tax](index=11&type=section&id=Income%20Tax) Income tax shifted from an expense to a credit, mainly due to deferred income tax becoming a credit and reduced current income tax in mainland China | Item | June 30, 2025 (RMB thousands) | June 30, 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Current income tax - Mainland China | 120,343 | 201,017 | -40.00% | | Deferred income tax | (200,560) | 50,201 | -499.52% | | Total income tax (credit) / expense | (77,797) | 252,536 | -130.81% | - Companies within the Group in Mainland China are subject to a corporate income tax rate of **25%**, with some branches and subsidiaries enjoying a preferential tax rate of **15%**[21](index=21&type=chunk) [Dividends](index=12&type=section&id=Dividends) The Board did not recommend an interim dividend for the six months ended June 30, 2025, nor a dividend for the year 2024 - The Company did not recommend an interim dividend for the first half of 2025 or a dividend for the year 2024[23](index=23&type=chunk)[24](index=24&type=chunk) - Dividend distribution is based on the lower of profits determined under China Accounting Standards and International Financial Reporting Standards[22](index=22&type=chunk) [Loss Per Share](index=12&type=section&id=Loss%20Per%20Share) Basic and diluted loss per share for the six months ended June 30, 2025, narrowed to RMB(0.11) from RMB(0.18) in the prior year | Metric | June 30, 2025 | June 30, 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Loss attributable to ordinary equity holders of the Company (RMB billions) | 1.805 | 2.779 | -35.05% | | Weighted average number of ordinary shares outstanding (shares) | 16,658,566,736 | 15,723,985,056 | 5.94% | | Loss per share (RMB) | (0.11) | (0.18) | -38.89% | - The Group had no potentially dilutive ordinary shares during these two periods, thus basic loss per share is the same as diluted loss per share[26](index=26&type=chunk) [Trade Receivables](index=13&type=section&id=Trade%20Receivables) Total trade receivables increased by 30.33% year-on-year, with the largest portion due within 30 days, but receivables over 90 days also increased | Ageing | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Within 30 days | 3,640,790 | 2,963,962 | 22.84% | | 31 to 60 days | 499,885 | 147,934 | 237.91% | | 61 to 90 days | 76,653 | 139,120 | -44.90% | | Over 90 days | 565,841 | 419,236 | 35.00% | | Total | 4,783,169 | 3,670,252 | 30.33% | [Trade Payables](index=13&type=section&id=Trade%20Payables) Total trade payables increased by 4.15% year-on-year, with a notable increase in payables over 90 days | Ageing | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Within 30 days | 8,148,551 | 8,354,764 | -2.47% | | 31 to 60 days | 2,286,119 | 2,009,755 | 13.75% | | 61 to 90 days | 4,623,235 | 4,806,725 | -3.82% | | Over 90 days | 4,595,477 | 3,698,540 | 24.25% | | Total | 19,653,382 | 18,869,784 | 4.15% | [Summary of Business Operating Data](index=14&type=section&id=Summary%20of%20Business%20Operating%20Data) This section provides key operational metrics including capacity, traffic, passenger and cargo volumes, load factors, utilization, revenue, and unit costs [Capacity](index=14&type=section&id=Capacity) The group's total available seat kilometers and available freight tonne kilometers increased, with significant international capacity expansion and a slight decrease in mainland China | Metric | Jan-Jun 2025 | Jan-Jun 2024 | Increase / (Decrease) | | :--- | :--- | :--- | :--- | | Available Seat Kilometers (millions) | 177,576.14 | 171,790.89 | 3.37% | | International Available Seat Kilometers (millions) | 51,445.77 | 44,082.60 | 16.70% | | Mainland China Available Seat Kilometers (millions) | 121,132.50 | 122,675.40 | (1.26%) | | Available Freight Tonne Kilometers (millions) | 6,425.74 | 6,122.03 | 4.96% | | International Available Freight Tonne Kilometers (millions) | 3,055.74 | 2,577.25 | 18.57% | [Traffic](index=14&type=section&id=Traffic) The group achieved growth in revenue passenger kilometers and revenue freight tonne kilometers, with significant increases in international passenger and cargo traffic | Metric | Jan-Jun 2025 | Jan-Jun 2024 | Increase / (Decrease) | | :--- | :--- | :--- | :--- | | Revenue Passenger Kilometers (millions) | 143,336.58 | 136,213.57 | 5.23% | | International Revenue Passenger Kilometers (millions) | 39,337.74 | 33,625.02 | 16.99% | | Revenue Freight Tonne Kilometers (millions) | 2,408.59 | 2,237.13 | 7.66% | | International Revenue Freight Tonne Kilometers (millions) | 1,560.66 | 1,409.88 | 10.69% | [Passenger and Cargo/Mail Volume](index=15&type=section&id=Passenger%20and%20Cargo%2FMail%20Volume) Both passenger numbers and cargo/mail volume increased, with international passenger numbers showing the largest growth | Metric | Jan-Jun 2025 | Jan-Jun 2024 | Increase / (Decrease) | | :--- | :--- | :--- | :--- | | Passenger Numbers (thousands) | 77,114.33 | 74,959.47 | 2.87% | | International Passenger Numbers (thousands) | 8,939.31 | 7,535.97 | 18.62% | | Cargo and Mail (tons) | 735,334.14 | 701,598.29 | 4.81% | [Load Factor](index=15&type=section&id=Load%20Factor) The group's passenger load factor and overall load factor improved, but international cargo and mail load factor decreased | Metric | Jan-Jun 2025 | Jan-Jun 2024 | Increase / (Decrease) | | :--- | :--- | :--- | :--- | | Passenger Load Factor | 80.72% | 79.29% | 1.43 percentage points | | International Passenger Load Factor | 76.46% | 76.28% | 0.19 percentage points | | Cargo and Mail Load Factor | 37.48% | 36.54% | 0.94 percentage points | | International Cargo and Mail Load Factor | 51.07% | 54.70% | (3.63 percentage points) | | Overall Load Factor | 67.10% | 65.86% | 1.25 percentage points | [Utilization](index=15&type=section&id=Utilization) Aircraft daily utilization slightly decreased | Metric | Jan-Jun 2025 | Jan-Jun 2024 | Increase / (Decrease) | | :--- | :--- | :--- | :--- | | Aircraft Daily Utilization (block hours per aircraft per day) | 8.76 | 8.79 | (0.03 hours) | [Yield](index=15&type=section&id=Yield) Revenue per revenue passenger kilometer and per revenue freight tonne kilometer slightly decreased, but passenger and cargo yields in Hong Kong, Macau, and Taiwan increased | Metric | Jan-Jun 2025 | Jan-Jun 2024 | Increase / (Decrease) | | :--- | :--- | :--- | :--- | | Revenue per Revenue Passenger Kilometer (RMB) | 0.5107 | 0.5369 | (4.88%) | | Mainland China Revenue per Revenue Passenger Kilometer (RMB) | 0.5134 | 0.5475 | (6.23%) | | Hong Kong, Macau and Taiwan Revenue per Revenue Passenger Kilometer (RMB) | 0.6683 | 0.6578 | 1.60% | | Revenue per Revenue Freight Tonne Kilometer (RMB) | 1.4853 | 1.4878 | (0.17%) | | Mainland China Revenue per Revenue Freight Tonne Kilometer (RMB) | 0.9419 | 0.9035 | 4.25% | | Hong Kong, Macau and Taiwan Revenue per Revenue Freight Tonne Kilometer (RMB) | 3.3024 | 3.1906 | 3.50% | [Unit Cost](index=15&type=section&id=Unit%20Cost) The group's operating expenses per available seat kilometer and per available tonne kilometer both decreased | Metric | Jan-Jun 2025 | Jan-Jun 2024 | Increase / (Decrease) | | :--- | :--- | :--- | :--- | | Operating Expenses per Available Seat Kilometer (RMB) | 0.4791 | 0.4881 | (1.84%) | | Operating Expenses per Available Tonne Kilometer (RMB) | 3.7930 | 3.8809 | (2.26%) | [Fleet Information](index=16&type=section&id=Fleet%20Information) As of the reporting period, the group's fleet expanded to 934 aircraft with an average age of 10.28 years, with clear plans for future aircraft introduction and retirement - In the first half of 2025, the Group introduced **9 aircraft** (including 1 A320 series, 5 B737 series, 1 C919, 2 C909) and retired **5 aircraft**[32](index=32&type=chunk) - As of the end of the reporting period, the Group's fleet comprised **934 aircraft** with an average age of **10.28 years**[32](index=32&type=chunk) [Fleet Size and Age](index=16&type=section&id=Fleet%20Size%20and%20Age) As of the reporting period, the group's fleet comprised 934 aircraft with an average age of 10.28 years, including 510 aircraft in the Company's fleet with an average age of 9.92 years | Series | Subtotal | Owned | Finance Lease | Operating Lease | Average Age (years) | | :--- | :--- | :--- | :--- | :--- | :--- | | Airbus Series | 430 | 196 | 115 | 119 | 10.14 | | Boeing Series | 462 | 191 | 97 | 174 | 11.11 | | COMAC Series | 39 | 27 | 12 | – | 2.02 | | Business Jets | 3 | 1 | – | 2 | 9.31 | | Total | 934 | 415 | 224 | 295 | 10.28 | [Future Fleet Introduction and Retirement Plan](index=17&type=section&id=Future%20Fleet%20Introduction%20and%20Retirement%20Plan) The group plans to introduce 141 aircraft and retire 36 between 2025-2027, with a focus on COMAC series aircraft | Series | 2025 Introduction | 2026 Introduction | 2027 Introduction | 2025 Retirement | 2026 Retirement | 2027 Retirement | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Airbus Series | 22 | 27 | 24 | 13 | 13 | 3 | | Boeing Series | 13 | 2 | 21 | 5 | 1 | 1 | | COMAC Series | 12 | 10 | 10 | – | – | – | | Total | 47 | 39 | 55 | 18 | 14 | 4 | - The COMAC series aircraft (C909 and C919) have a stable introduction plan over the next three years, indicating investment in domestically produced aircraft[34](index=34&type=chunk) [Business Overview](index=17&type=section&id=Business%20Overview) This section highlights the group's achievements in safety, efficiency, service quality, digital transformation, and brand value [Safety Operations](index=17&type=section&id=Safety%20Operations) The group achieved 1.465 million safe flight hours, completed critical special charter and rescue missions, and strengthened safety responsibilities - The Group achieved **1.465 million safe flight hours** and successfully completed multiple special charter flight missions[35](index=35&type=chunk) - Important missions such as overseas cultural relic repatriation, Myanmar/Tibet earthquake relief, and Iran evacuation were executed, demonstrating political responsibility and social commitment[35](index=35&type=chunk) [Quality Improvement, Efficiency, and Network Strategy](index=18&type=section&id=Quality%20Improvement%2C%20Efficiency%2C%20and%20Network%20Strategy) The group focused on enhancing quality and efficiency, deepening its hub network strategy, optimizing routes, and expanding international and "Belt and Road" markets - Steadfastly implemented the "four maximization" production organization principles, deepened the hub network strategy, continuously optimized the route network, and meticulously built domestic express routes[36](index=36&type=chunk) - Steadily advanced the opening and resumption of international routes, focusing on developing markets along the "Belt and Road" initiative[36](index=36&type=chunk) - Innovated and upgraded distinctive benefit products such as the "New Traveler Program, Vitality Silver Age Program, and Student Zone," and deeply promoted cost control and centralized fund management[36](index=36&type=chunk) [Service Quality](index=18&type=section&id=Service%20Quality) The group is committed to improving service quality by revising standards, enriching branded products, expanding convenient services, and accelerating platform development - Revised key service standards such as service compensation, optimized satisfaction survey analysis, and established a ticket policy coordination and payment monitoring mechanism[37](index=37&type=chunk) - Added the "Zichen" VIP lounge in Urumqi, launched "Hangzhou-Chengdu" express route and "Chongqing-Shenzhen" city express route, enriching the express product system[37](index=37&type=chunk) - Enriched APP payment methods, introduced functions such as passport chip scanning and inter-airline special service booking, and expanded air-rail intermodal services to **73 cities**[37](index=37&type=chunk) [Digital and Intelligent Transformation](index=19&type=section&id=Digital%20and%20Intelligent%20Transformation) The group is accelerating digital and intelligent transformation across safety, marketing, and customer service, and building an AI+ platform - The global ground flight support platform covers all branches, achieving visualized flight monitoring and support, intelligent scheduling, and mobile frontline operations[38](index=38&type=chunk) - Phase II of the business model project is fully operational, enhancing precise marketing and diversified product management capabilities[38](index=38&type=chunk) - Actively promoted artificial intelligence applications, developing key applications such as intelligent customer service and smart maintenance, and building a group-wide AI+ platform[38](index=38&type=chunk) [Brand Value](index=19&type=section&id=Brand%20Value) The group aims to build a world-class brand, actively promotes its brand overseas, and maintains leading positions in global and domestic brand value rankings - Participated in the 20th Western China International Fair, showcasing practical achievements in serving national strategies and empowering regional economies[39](index=39&type=chunk) - Air China ranked **26th** in the "2025 China Brand Global Communication Power Top List," the only airline to be included in the list[39](index=39&type=chunk) - Air China ranked **25th** in the 2025 "China's 500 Most Valuable Brands" list, with a brand value of **RMB 275.576 billion**, maintaining its leading position in the domestic aviation service industry[39](index=39&type=chunk) [Management Discussion and Analysis of Financial Condition and Operating Results](index=20&type=section&id=Management%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Operating%20Results) This section provides management's perspective on revenue, expenses, financial position, and liquidity [Operating Revenue Analysis](index=20&type=section&id=Operating%20Revenue%20Analysis) The group's operating revenue increased by 1.56% year-on-year, driven by air transportation and other operating income, with strong international route growth [Operating Revenue by Category](index=20&type=section&id=Operating%20Revenue%20by%20Category) | Revenue Category | June 30, 2025 (RMB billions) | June 30, 2024 (RMB billions) | Change (%) | | :--- | :--- | :--- | :--- | | Operating Revenue | 80.757 | 79.520 | 1.56% | | Air Transportation Revenue | 76.774 | 76.466 | 0.40% | | Other Operating Income | 3.983 | 3.054 | 30.41% | [Total Operating Revenue](index=20&type=section&id=Total%20Operating%20Revenue) Total operating revenue increased by 1.56% to RMB 80.757 billion, with other operating income growing significantly by 30.41% - Operating revenue increased by **RMB 1.237 billion** year-on-year, a growth of **1.56%**[41](index=41&type=chunk) - Other operating income increased by **RMB 929 million** year-on-year, a growth of **30.41%**[41](index=41&type=chunk) [Geographical Segment Revenue Contribution](index=20&type=section&id=Geographical%20Segment%20Revenue%20Contribution) International revenue grew by 15.02%, increasing its share to 27.17%, while mainland China revenue decreased by 2.90% | Region | June 30, 2025 (RMB thousands) | June 30, 2024 (RMB thousands) | Change | | :--- | :--- | :--- | :--- | | International | 21,940,162 | 19,075,627 | 15.02% | | Mainland China | 56,277,430 | 57,960,673 | (2.90%) | | Hong Kong, Macau and Taiwan | 2,539,842 | 2,484,032 | 2.25% | | Total | 80,757,434 | 79,520,332 | 1.56% | [Passenger Revenue](index=20&type=section&id=Passenger%20Revenue) Passenger revenue slightly increased by 0.08%, with increased capacity and load factor offset by lower yield, while international passenger revenue grew by 16.09% - Passenger revenue was **RMB 73.196 billion**, an increase of **RMB 59 million** year-on-year[44](index=44&type=chunk) - Increased capacity contributed **RMB 2.463 billion** to revenue, increased load factor contributed **RMB 1.361 billion**, while decreased yield reduced revenue by **RMB 3.765 billion**[44](index=44&type=chunk) [Key Passenger Metrics](index=21&type=section&id=Key%20Passenger%20Metrics) | Metric | 2025 | 2024 | Change | | :--- | :--- | :--- | :--- | | Available Seat Kilometers (millions) | 177,576.14 | 171,790.89 | 3.37% | | Passenger Load Factor (%) | 80.72 | 79.29 | 1.43 percentage points | | Revenue per Revenue Passenger Kilometer (RMB) | 0.5107 | 0.5369 | (4.88%) | [Passenger Revenue by Region](index=21&type=section&id=Passenger%20Revenue%20by%20Region) | Region | June 30, 2025 (RMB thousands) | June 30, 2024 (RMB thousands) | Change | | :--- | :--- | :--- | :--- | | International Passenger Revenue | 19,233,312 | 16,567,178 | 16.09% | | Mainland China Passenger Revenue | 51,523,843 | 54,187,183 | (4.92%) | [Cargo and Mail Transportation Revenue](index=22&type=section&id=Cargo%20and%20Mail%20Transportation%20Revenue) Cargo and mail transportation revenue increased by 7.48%, primarily due to higher capacity and load factor, with international cargo and mail revenue up by 7.91% - Cargo and mail transportation revenue was **RMB 3.577 billion**, an increase of **RMB 249 million** year-on-year[47](index=47&type=chunk) - Increased capacity contributed **RMB 165 million** to revenue, and increased load factor contributed **RMB 90 million**[47](index=47&type=chunk) [Key Cargo Metrics](index=22&type=section&id=Key%20Cargo%20Metrics) | Metric | 2025 | 2024 | Change | | :--- | :--- | :--- | :--- | | Available Freight Tonne Kilometers (millions) | 6,425.74 | 6,122.03 | 4.96% | | Load Factor (%) | 37.48 | 36.54 | 0.94 percentage points | | Revenue per Revenue Freight Tonne Kilometer (RMB) | 1.4853 | 1.4878 | (0.17%) | [Cargo and Mail Revenue by Region](index=22&type=section&id=Cargo%20and%20Mail%20Revenue%20by%20Region) | Region | June 30, 2025 (RMB thousands) | June 30, 2024 (RMB thousands) | Change | | :--- | :--- | :--- | :--- | | International Cargo and Mail Revenue | 2,706,850 | 2,508,449 | 7.91% | | Mainland China Cargo and Mail Revenue | 769,997 | 718,726 | 7.13% | [Operating Expense Analysis](index=22&type=section&id=Operating%20Expense%20Analysis) The group's operating expenses increased by 1.45% year-on-year, with lower aviation fuel costs offset by increases in landing and parking fees, depreciation, and staff costs | Expense Category | June 30, 2025 (RMB thousands) | June 30, 2024 (RMB thousands) | Change | | :--- | :--- | :--- | :--- | | Aviation Fuel Costs | 24,327,485 | 27,132,269 | (10.34%) | | Landing and Parking Fees | 10,613,810 | 9,963,482 | 6.53% | | Depreciation and Amortization | 14,837,638 | 14,025,285 | 5.79% | | Staff Costs | 17,849,218 | 16,953,921 | 5.28% | | Aircraft Maintenance, Repair and Overhaul Costs | 7,292,075 | 6,862,447 | 6.26% | | Other Operating Expenses | 4,836,492 | 3,886,126 | 24.46% | | Total Operating Expenses | 85,069,709 | 83,853,154 | 1.45% | - Aviation fuel costs decreased by **RMB 2.805 billion** year-on-year, primarily due to lower aviation fuel prices[53](index=53&type=chunk) - Other operating expenses increased by **RMB 950 million** year-on-year, mainly due to increased production and operational input and changes in contract performance costs of subsidiary maintenance enterprises[53](index=53&type=chunk) [Net Exchange Gains and Interest Expense](index=23&type=section&id=Net%20Exchange%20Gains%20and%20Interest%20Expense) The group recorded net exchange gains of RMB 176 million, a turnaround from a net loss, and interest expense decreased by RMB 375 million | Item | June 30, 2025 (RMB billions) | June 30, 2024 (RMB billions) | Change | | :--- | :--- | :--- | :--- | | Net Exchange Gains | 0.176 | (0.360) | 148.89% | | Interest Expense (excluding capitalized portion) | 2.891 | 3.265 | (11.46%) | [Share of Results of Associates and Joint Ventures](index=23&type=section&id=Share%20of%20Results%20of%20Associates%20and%20Joint%20Ventures) Share of profit from associates increased by RMB 135 million, significantly contributed by Cathay Pacific, and share of profit from joint ventures increased by RMB 26 million | Item | June 30, 2025 (RMB billions) | June 30, 2024 (RMB billions) | Change | | :--- | :--- | :--- | :--- | | Share of profit from associates | 1.220 | 1.085 | 12.44% | | Share of investment income from Cathay Pacific | 1.174 | 1.068 | 9.93% | | Share of profit from joint ventures | 0.117 | 0.091 | 28.57% | [Analysis of Asset Position](index=24&type=section&id=Analysis%20of%20Asset%20Position) Total assets slightly increased, with significant growth in cash and cash equivalents, while pledged assets and restricted cash also expanded, and capital expenditures focused on aircraft and long-term investments - As of the end of the reporting period, the Group's total assets were **RMB 347.539 billion**, an increase of **0.52%** compared to December 31, 2024[54](index=54&type=chunk) - Cash and cash equivalents amounted to **RMB 25.331 billion**, an increase of **20.40%** compared to December 31, 2024[54](index=54&type=chunk) - The Group pledged aircraft and buildings with a book value of approximately **RMB 4.669 billion**, and land use rights of approximately **RMB 23 million**[55](index=55&type=chunk) - Capital expenditure during the reporting period totaled **RMB 5.859 billion**, primarily including aircraft-related investments (**RMB 2.362 billion**) and long-term investment projects (**RMB 2.726 billion**)[56](index=56&type=chunk) [Total Asset Composition](index=24&type=section&id=Total%20Asset%20Composition) Current assets constitute 13.74% and non-current assets 86.26% of total assets, with property, plant, and equipment and right-of-use assets totaling RMB 237.141 billion - Current assets accounted for **13.74%** of total assets, and non-current assets accounted for **86.26%**[54](index=54&type=chunk) [Pledged Assets](index=24&type=section&id=Pledged%20Assets) As of the reporting period, the group pledged approximately RMB 4.669 billion in aircraft and buildings, and approximately RMB 23 million in land use rights. Restricted cash was approximately RMB 2.591 billion - Pledged assets had a book value of approximately **RMB 4.669 billion** (aircraft and buildings) and **RMB 23 million** (land use rights)[55](index=55&type=chunk) - Restricted cash amounted to approximately **RMB 2.591 billion**, mainly comprising statutory reserves, pledged bank deposits, margins, and time deposits exceeding three months[55](index=55&type=chunk) [Capital Expenditure](index=24&type=section&id=Capital%20Expenditure) Capital expenditure totaled RMB 5.859 billion, primarily for aircraft and engine purchases, long-term investments, and infrastructure - Capital expenditure totaled **RMB 5.859 billion**[56](index=56&type=chunk) - Aircraft-related investments totaled **RMB 2.362 billion**, and the cash portion of long-term investment projects was **RMB 2.726 billion**[56](index=56&type=chunk) [Equity Investments](index=24&type=section&id=Equity%20Investments) The group's equity investments in associates totaled RMB 14.286 billion, including RMB 13.951 billion in Cathay Pacific. Equity investments in joint ventures totaled RMB 2.486 billion - Equity investments in associates amounted to **RMB 14.286 billion**, a decrease of **2.37%** compared to December 31, 2024[57](index=57&type=chunk) - The equity investment balance in Cathay Pacific was **RMB 13.951 billion**[57](index=57&type=chunk) - Equity investments in joint ventures amounted to **RMB 2.486 billion**, an increase of **2.57%** compared to December 31, 2024[57](index=57&type=chunk) [Analysis of Debt Structure](index=25&type=section&id=Analysis%20of%20Debt%20Structure) Total liabilities increased by 1.47%, with non-current liabilities accounting for nearly 60%, while current interest-bearing debt decreased and non-current interest-bearing debt increased, with RMB-denominated debt over 80% - As of the end of the reporting period, the Group's total liabilities were **RMB 309.309 billion**, an increase of **1.47%** compared to December 31, 2024[58](index=58&type=chunk) - Current liabilities accounted for **40.80%** of total liabilities, and non-current liabilities accounted for **59.20%**[58](index=58&type=chunk) - Current interest-bearing debt decreased by **16.64%**, while non-current interest-bearing debt increased by **10.77%**[58](index=58&type=chunk) [Total Liability Composition](index=25&type=section&id=Total%20Liability%20Composition) Current liabilities account for 40.80% and non-current liabilities for 59.20% of the group's total liabilities - Current liabilities amounted to **RMB 126.209 billion**, and non-current liabilities amounted to **RMB 183.100 billion**[58](index=58&type=chunk) [Currency Classification of Interest-Bearing Debt](index=25&type=section&id=Currency%20Classification%20of%20Interest-Bearing%20Debt) The group's interest-bearing debt is predominantly denominated in RMB (88.85%), with USD-denominated debt decreasing to 10.96% | Currency | June 30, 2025 (RMB thousands) | Proportion | December 31, 2024 (RMB thousands) | Proportion | Change | | :--- | :--- | :--- | :--- | :--- | :--- | | RMB | 209,851,014 | 88.85% | 205,662,318 | 87.15% | 2.04% | | USD | 25,877,883 | 10.96% | 29,874,295 | 12.66% | (13.38%) | | Other | 449,659 | 0.19% | 443,893 | 0.19% | 1.30% | | Total | 236,178,556 | 100.00% | 235,980,506 | 100.00% | 0.08% | - The Group did not use financial instruments for hedging purposes[59](index=59&type=chunk) [Commitments and Contingent Liabilities](index=25&type=section&id=Commitments%20and%20Contingent%20Liabilities) Capital commitments for future aircraft purchases totaled RMB 93.20 billion, investment commitments were RMB 267 million, with no significant contingent liabilities - Capital commitments amounted to **RMB 93.200 billion**, a decrease of **2.07%** compared to December 31, 2024[60](index=60&type=chunk) - Investment commitments amounted to **RMB 267 million**, a decrease of **14.70%** compared to December 31, 2024[60](index=60&type=chunk) - As of the end of the reporting period, the Group had no significant contingent liabilities[61](index=61&type=chunk) [Gearing Ratio](index=26&type=section&id=Gearing%20Ratio) As of the reporting period, the group's gearing ratio was 89.00%, an increase of 0.84 percentage points from December 31, 2024 | Metric | June 30, 2025 | December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Gearing Ratio | 89.00% | 88.16% | 0.84 percentage points | [Liquidity and Funding Sources](index=26&type=section&id=Liquidity%20and%20Funding%20Sources) Net current liabilities decreased, the current ratio improved, and net cash inflow from operating activities increased. Net cash outflow from financing activities significantly rose, mainly due to loan repayments. The company has ample bank credit facilities - Net current liabilities amounted to **RMB 78.459 billion**, a decrease of **RMB 18.464 billion** compared to December 31, 2024[63](index=63&type=chunk) - The current ratio was **0.38**, an increase of **0.08** compared to December 31, 2024[63](index=63&type=chunk) [Cash Flow by Category](index=26&type=section&id=Cash%20Flow%20by%20Category) | Cash Flow Category | June 30, 2025 (RMB billions) | June 30, 2024 (RMB billions) | Change | | :--- | :--- | :--- | :--- | | Net cash inflow from operating activities | 14.828 | 14.253 | 4.03% | | Net cash outflow from investing activities | (7.338) | (8.177) | -10.26% | | Net cash outflow from financing activities | (3.218) | (1.154) | 178.99% | - The Company has obtained bank credit facilities of **RMB 278.622 billion**, of which **RMB 180.093 billion** remains unused[63](index=63&type=chunk) [Potential Risks](index=26&type=section&id=Potential%20Risks) This section outlines external environmental risks such as market, fuel price, and exchange rate fluctuations, as well as competitive risks - The accelerating evolution of the international political and economic landscape creates uncertainty in the company's traditional advantageous international markets, especially the North American market[64](index=64&type=chunk) - If the average aviation fuel price increases or decreases by **5%**, the Group's aviation fuel costs will increase or decrease by approximately **RMB 1.216 billion**[65](index=65&type=chunk) - A **1%** appreciation or depreciation of the RMB against the USD exchange rate would result in an increase or decrease of **RMB 133 million** in the Group's net profit and shareholders' equity, respectively[66](index=66&type=chunk) - The domestic market still exhibits a supply-demand imbalance with increased volume and decreased prices, while competition in certain international regions is intense[67](index=67&type=chunk) - The development of the high-speed rail network poses a risk of continuous passenger diversion for short-to-medium haul transportation[68](index=68&type=chunk) [External Environmental Risks](index=26&type=section&id=External%20Environmental%20Risks) The group faces external risks from market volatility, aviation fuel price fluctuations, and exchange rate changes, significantly impacting costs and profits [Market Volatility](index=26&type=section&id=Market%20Volatility) While the domestic aviation market is expected to grow steadily, international political and economic uncertainties, especially in North America, pose risks, prompting increased international capacity and "Belt and Road" market development - The domestic aviation market is expected to grow steadily, but international market development faces uncertainties[64](index=64&type=chunk) - The Group will increase international capacity investment, optimize its structure, and actively explore and cultivate emerging markets related to the "Belt and Road" initiative[64](index=64&type=chunk) [Aviation Fuel Price Fluctuations](index=27&type=section&id=Aviation%20Fuel%20Price%20Fluctuations) Aviation fuel price volatility significantly impacts the group's performance, with a 5% change in average fuel price affecting fuel costs by approximately RMB 1.216 billion, partially mitigated by fuel surcharges - Aviation fuel is one of the Group's main operating costs, and its performance is significantly affected by fluctuations in aviation fuel prices[65](index=65&type=chunk) - The imposition of fuel surcharges has, to some extent, alleviated the pressure from aviation fuel costs[65](index=65&type=chunk) [Exchange Rate Fluctuations](index=27&type=section&id=Exchange%20Rate%20Fluctuations) As some assets, liabilities, and international revenues/expenses are settled in foreign currencies, a 1% change in the RMB to USD exchange rate would impact net profit and shareholders' equity by RMB 133 million - Certain assets, liabilities, and international revenues and expenses of the Group are settled in currencies other than RMB[66](index=66&type=chunk) - A **1%** change in the RMB to USD exchange rate would result in an increase or decrease of **RMB 133 million** in the Group's net profit and shareholders' equity, respectively[66](index=66&type=chunk) [Competition Risk](index=27&type=section&id=Competition%20Risk) The group faces intense competition from peers and high-speed rail, with domestic market supply-demand imbalance and fierce international competition [Peer Competition](index=27&type=section&id=Peer%20Competition) Market players have not significantly decreased, leading to a supply-demand imbalance in the domestic market and intense competition in international markets. The company will adhere to its hub network strategy to build differentiated competitive advantages - The Company will continue to face strong peer competition pressure, with the domestic market experiencing increased volume and decreased prices, and intense competition in certain international markets[67](index=67&type=chunk) - The Company will adhere to its hub network strategy, building dual hubs in Beijing and Chengdu, developing "four-pole clusters" and the Xinjiang strategic market to achieve differentiated development[67](index=67&type=chunk) [Substitution Competition](index=28&type=section&id=Substitution%20Competition) With the development of the high-speed rail network, there is a risk of continued passenger diversion for short-to-medium haul transportation. Civil aviation should leverage its comparative advantages, increase investment in long-haul domestic and international routes, and promote air-rail intermodal transport - The development of high-speed rail poses a risk of continuous passenger diversion for short-to-medium haul transportation[68](index=68&type=chunk) - Civil aviation should leverage its comparative advantages, increase capacity investment in long-haul domestic and international routes, provide public travel services to remote areas, and promote air-rail intermodal transport[68](index=68&type=chunk) [Other Information](index=28&type=section&id=Other%20Information) This section covers securities transactions, interim dividends, post-balance sheet events, and corporate governance [Purchase, Sale or Redemption of Listed Securities](index=28&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20Listed%20Securities) Neither the company nor its subsidiaries purchased, sold, or redeemed any listed securities during the reporting period - During the reporting period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[69](index=69&type=chunk) [Interim Dividend](index=28&type=section&id=Interim%20Dividend) The company will not declare an interim dividend for the six months ended June 30, 2025 - The Company will not declare an interim dividend for the six months ended June 30, 2025[70](index=70&type=chunk) [Events After the Reporting Period](index=28&type=section&id=Events%20After%20the%20Reporting%20Period) Mr. Xuan Haoxian resigned as Joint Company Secretary on July 31, 2025, with Mr. Xiao Feng continuing as sole Company Secretary and Mr. Liang Yifeng appointed as process agent in Hong Kong - Mr. Xuan Haoxian resigned as Joint Company Secretary on July 31, 2025, and Mr. Xiao Feng continues to serve as the sole Company Secretary[71](index=71&type=chunk) - Mr. Liang Yifeng succeeded Mr. Xuan as the Company's agent for receiving legal process documents and notices in Hong Kong under Rule 19A.13(2) of the Listing Rules[71](index=71&type=chunk) [Corporate Governance](index=28&type=section&id=Corporate%20Governance) The company complied with the Corporate Governance Code, adopted a code of conduct for directors and supervisors, and its Audit and Risk Management Committee reviewed the interim results - The Company consistently complied with the code provisions of Part 2 of Appendix C1 of the Listing Rules' Corporate Governance Code during the reporting period[72](index=72&type=chunk) - All Directors and Supervisors complied with the standards set out in the Model Code and the Company's code of conduct during the reporting period[73](index=73&type=chunk) - The Company's Audit and Risk Management Committee reviewed the Company's interim results and financial statements for the six months ended June 30, 2025[75](index=75&type=chunk) [Compliance with the Corporate Governance Code](index=28&type=section&id=Compliance%20with%20the%20Corporate%20Governance%20Code) The company consistently complied with the code provisions of Appendix C1 of the Listing Rules' Corporate Governance Code during the reporting period - The Company consistently complied with the code provisions of Part 2 of Appendix C1 of the Listing Rules' Corporate Governance Code during the reporting period[72](index=72&type=chunk) [Code of Conduct for Directors and Supervisors](index=29&type=section&id=Code%20of%20Conduct%20for%20Directors%20and%20Supervisors) The company adopted a code of conduct no less exacting than the Model Code, and all directors and supervisors complied with it during the reporting period - The Company has adopted a code of conduct no less exacting than the Model Code[73](index=73&type=chunk) - All Directors and Supervisors consistently complied with the standards set out in the Model Code and the Company's code of conduct during the reporting period[73](index=73&type=chunk) [Disclosure Requirements under the Listing Rules](index=29&type=section&id=Disclosure%20Requirements%20under%20the%20Listing%20Rules) The company confirms no material changes in existing information related to Listing Rule Appendix D2 paragraph 46(3) compared to the 2024 annual report, except as disclosed - The Company confirms that, save as disclosed in this announcement, there have been no material changes in the existing information of the Company relating to the matters set out in paragraph 46(3) of Appendix D2 to the Listing Rules compared to the relevant disclosures in the Company's 2024 annual report[74](index=74&type=chunk) [Review by the Audit and Risk Management Committee](index=29&type=section&id=Review%20by%20the%20Audit%20and%20Risk%20Management%20Committee) The Audit and Risk Management Committee reviewed the interim results, unaudited condensed consolidated financial statements, and accounting policies for the six months ended June 30, 2025 - The Company's Audit and Risk Management Committee has reviewed the Company's interim results for the six months ended June 30, 2025[75](index=75&type=chunk) [Glossary of Technical Terms](index=29&type=section&id=Glossary%20of%20Technical%20Terms) This section defines key technical terms used in the report, including metrics for transportation capacity, traffic volume, and operational efficiency - Defined transportation capacity metrics such as "Available Tonne Kilometers," "Available Seat Kilometers," and "Available Freight Tonne Kilometers"[76](index=76&type=chunk) - Defined traffic volume metrics such as "Revenue Passenger Kilometers," "Revenue Freight Tonne Kilometers," and "Revenue Tonne Kilometers"[76](index=76&type=chunk)[77](index=77&type=chunk) - Defined yield units such as "Passenger Kilometers Yield / Yield per Passenger Kilometer" and "Freight Tonne Kilometers Yield / Yield per Freight Tonne Kilometer"[78](index=78&type=chunk) [Definitions](index=30&type=section&id=Definitions) This section provides definitions for specific companies, organizations, accounting standards, and other proper nouns used in the report for clarity - Defined companies and entities such as "Airbus," "Inner Mongolia Airlines," "Air Macau," "Ameco," and "Articles of Association"[79](index=79&type=chunk) - Defined operational efficiency metrics such as "Passenger Load Factor / Passenger Utilization Rate," "Cargo and Mail Load Factor / Cargo and Mail Utilization Rate," "Overall Load Factor," and "Block Hours"[80](index=80&type=chunk) - Defined proper nouns such as "A Shares," "Beijing Airlines," "Cathay Pacific," "CNAHC," "COMAC," "Air China," "CSRC," "Dalian Airlines," "HKEX," "H Shares," "Board," "Boeing," "CAS," "Directors," "the Group," "Hong Kong," "IFRS," "Kunming Airlines," "Listing Rules," "Model Code," "Reporting Period," "RMB," "SFO," "Shandong Airlines," "Shandong Airlines Group," "Shenzhen Airlines," "Supervisors," "Supervisory Committee," and "USD"[81](index=81&type=chunk)[82](index=82&type=chunk)[83](index=83&type=chunk)[84](index=84&type=chunk)

[Condensed Consolidated Financial Statements](index=1&type=section&id=Condensed%20Consolidated%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements for the six months ended June 30, 2025, including the income statement, statement of comprehensive income, and statement of financial position, reflecting the company's financial performance and position during the period [Condensed Consolidated Income Statement](index=1&type=section&id=Condensed%20Consolidated%20Income%20Statement) For the six months ended June 30, 2025, the Group turned from profit to loss, with revenue decreasing year-on-year, operating activities shifting from profit to loss, ultimately recording a loss attributable to equity holders of the company Key Data from Condensed Consolidated Income Statement (For the six months ended June 30) | Indicator | 2025 (HKD thousands) | 2024 (HKD thousands) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 1,973,653 | 2,136,982 | -7.65% | | Gross Profit | 533,328 | 610,739 | -12.70% | | Operating (Loss) / Profit | (43,832) | 117,553 | -137.29% | | (Loss) / Profit for the Period | (74,760) | 100,387 | -174.47% | | (Loss) / Profit Attributable to Equity Holders of the Company | (86,853) | 63,230 | -237.36% | | Basic and Diluted (Loss) / Earnings Per Share (HK cents) | (1.57) | 1.14 | -237.72% | [Condensed Consolidated Statement of Comprehensive Income](index=3&type=section&id=Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) Total comprehensive income for the period turned from a loss in the prior year to a profit, primarily due to a significant positive change in net exchange differences on translating foreign operations Key Data from Condensed Consolidated Statement of Comprehensive Income (For the six months ended June 30) | Indicator | 2025 (HKD thousands) | 2024 (HKD thousands) | YoY Change (%) | | :--- | :--- | :--- | :--- | | (Loss) / Profit for the Period | (74,760) | 100,387 | -174.47% | | Net Exchange Differences on Translating Foreign Operations | 227,708 | (95,522) | 338.49% | | Total Comprehensive Income / (Loss) for the Period | 163,934 | (1,934) | 8506.72% | | Total Comprehensive Income / (Loss) Attributable to Equity Holders of the Company | 134,819 | (28,818) | 567.15% | [Condensed Consolidated Statement of Financial Position](index=4&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the Group's total assets and total equity both increased, maintaining a sound financial position Key Data from Condensed Consolidated Statement of Financial Position (As of June 30) | Indicator | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Total Assets | 25,184,477 | 24,531,934 | 2.66% | | Total Equity | 18,411,665 | 18,131,893 | 1.54% | | Total Liabilities | 6,772,812 | 6,400,041 | 5.82% | | Total Non-Current Assets | 16,619,862 | 16,555,763 | 0.39% | | Total Current Assets | 8,564,615 | 7,976,171 | 7.38% | | Cash and Bank Balances | 2,853,580 | 2,444,190 | 16.75% | [Notes to the Financial Statements](index=6&type=section&id=Notes%20to%20the%20Financial%20Statements) This section provides detailed notes to the condensed consolidated financial statements, covering company information, basis of preparation, accounting policy changes, segment data, revenue breakdown, expense details, taxation, dividends, earnings per share, and trade receivables/payables, offering context and supplementary information for understanding the financial data [Company Information](index=6&type=section&id=Company%20Information) China Travel International Investment Hong Kong Limited and its subsidiaries primarily operate tourism attractions and related businesses, travel document and related businesses, hotel businesses, and passenger transportation businesses, listed on the Hong Kong Stock Exchange - The Group's principal businesses include tourism attractions and related businesses, travel document and related businesses, hotel businesses, and passenger transportation businesses[9](index=9&type=chunk)[11](index=11&type=chunk) [Basis of Preparation](index=6&type=section&id=Basis%20of%20Preparation) The interim condensed consolidated financial information is prepared in accordance with Hong Kong Accounting Standard 34 and should be read in conjunction with the Group's annual consolidated financial statements for the year ended December 31, 2024 - The interim condensed consolidated financial information is prepared in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting"[10](index=10&type=chunk) - The company has filed its financial statements for the year ended December 31, 2024, with the Registrar of Companies, and the auditor's report was unqualified[10](index=10&type=chunk) [Changes in Accounting Policies](index=7&type=section&id=Changes%20in%20Accounting%20Policies) The revised Hong Kong Accounting Standard 21 "Lack of Exchangeability" was adopted for the first time this period, but it had no impact on the interim condensed consolidated financial information as the Group's transaction and functional currencies are exchangeable into the presentation currency - The revised Hong Kong Accounting Standard 21 "Lack of Exchangeability" was adopted for the first time this period, but it had no impact on the financial information[12](index=12&type=chunk)[13](index=13&type=chunk) [Operating Segment Information](index=7&type=section&id=Operating%20Segment%20Information) The Group's operating businesses are classified into four reportable segments based on the nature of operations, goods, and services: tourism attractions and related businesses, travel document and related businesses, hotel businesses, and passenger transportation businesses, with their performance monitored independently - The Group's operating segments include tourism attractions and related businesses, travel document and related businesses, hotel businesses, and passenger transportation businesses[14](index=14&type=chunk)[15](index=15&type=chunk) Segment Revenue and Results (For the six months ended June 30) | Segment | 2025 Revenue (HKD thousands) | 2024 Revenue (HKD thousands) | 2025 Segment Results (HKD thousands) | 2024 Segment Results (HKD thousands) | | :--- | :--- | :--- | :--- | :--- | | Tourism Attractions and Related Businesses | 870,753 | 1,037,146 | (112,016) | 26,433 | | Travel Document and Related Businesses | 147,168 | 180,408 | 67,175 | 94,360 | | Hotel Businesses | 429,179 | 367,805 | 101,533 | 82,222 | | Passenger Transportation Businesses | 513,397 | 536,894 | 7,800 | 5,656 | | Total Reportable Segments | 1,960,497 | 2,122,253 | 64,492 | 208,671 | | Total Revenue | 1,973,653 | 2,136,982 | | | | Loss / Profit for the Period | (74,760) | 100,387 | | | [Revenue](index=10&type=section&id=Revenue) Total revenue for the period was HKD 1.974 billion, a year-on-year decrease of 7.65%, primarily due to reduced revenue from tourism attractions, travel documents, passenger transportation, and property sales, partially offset by increased hotel revenue and investment property rental income Revenue Breakdown (For the six months ended June 30) | Revenue Source | 2025 (HKD thousands) | 2024 (HKD thousands) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Tourism Attractions and Related Revenue | 781,179 | 901,910 | -13.38% | | Travel Document and Related Revenue | 147,168 | 180,408 | -18.39% | | Hotel Revenue | 417,760 | 376,398 | 10.99% | | Passenger Transportation Revenue | 513,397 | 536,894 | -4.38% | | Property Sales Revenue | 27,334 | 69,110 | -60.44% | | Consulting Services Revenue | 11,745 | 11,641 | 0.90% | | Gross Rental Income from Investment Properties | 75,070 | 60,621 | 23.84% | | **Total** | **1,973,653** | **2,136,982** | **-7.65%** | - The Group does not disclose information about revenue from customer contracts to be recognized in the future, as the performance obligations are part of original expected term contracts of one year or less[20](index=20&type=chunk) [Other Income and Gains, Net](index=11&type=section&id=Other%20Income%20and%20Gains%2C%20Net) Other income and gains, net, for the period was HKD 52.77 million, a year-on-year decrease of 28%, mainly due to a reduction in other income and a shift from gain to loss on disposal of property, plant, and equipment Other Income and Gains, Net (For the six months ended June 30) | Item | 2025 (HKD thousands) | 2024 (HKD thousands) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Net Exchange Differences | 267 | 53 | 403.77% | | Government Grants | 19,812 | 17,444 | 13.57% | | Net (Loss) / Gain on Disposal of Property, Plant and Equipment | (47) | 277 | -116.97% | | Net Rental Income from Other Properties | 11,149 | 12,535 | -11.06% | | Reversal of Provision for Membership Fee Refunds | 34 | 6,779 | -99.50% | | Others | 21,555 | 36,249 | -40.55% | | **Total** | **52,770** | **73,337** | **-28.04%** | [Operating (Loss) / Profit](index=11&type=section&id=Operating%20(Loss)%20%2F%20Profit) The operating loss for the period was primarily impacted by increased fair value changes of investment properties, impairment losses on properties held for sale, and impairment losses on property, plant, and equipment, despite decreases in staff costs and amortization of prepaid land lease payments Key Deductions / (Additions) to Operating (Loss) / Profit (For the six months ended June 30) | Item | 2025 (HKD thousands) | 2024 (HKD thousands) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Staff Costs | 712,485 | 729,875 | -2.40% | | Depreciation | 281,286 | 267,036 | 5.34% | | Amortisation of Prepaid Land Lease Payments | 11,716 | 15,152 | -22.68% | | Cost of Properties Sold | 23,090 | 51,145 | -54.85% | | Net Impairment Provision / (Reversal) for Trade and Other Receivables | 190 | (710) | -126.76% | | Impairment Loss on Properties Held for Sale | 6,520 | – | N/A | | Impairment Loss on Property, Plant and Equipment | 59,699 | – | N/A | | Fair Value Changes of Investment Properties | 123,328 | 99,045 | 24.52% | [Net Finance Income](index=12&type=section&id=Net%20Finance%20Income) Net finance income for the period was HKD 7.21 million, a significant year-on-year decrease of 64.39%, mainly due to reduced interest income from bank deposits, while finance costs remained relatively stable after capitalized interest Net Finance Income (For the six months ended June 30) | Item | 2025 (HKD thousands) | 2024 (HKD thousands) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Finance Income: Bank Deposits | 13,295 | 25,691 | -48.25% | | Finance Costs: Interest on Bank and Other Borrowings | (27,087) | (45,530) | -40.50% | | Finance Costs: Interest on Lease Liabilities | (6,088) | (5,461) | 11.48% | | Less: Interest Expenses Capitalised | 27,087 | 45,530 | -40.50% | | **Net Finance Income** | **7,207** | **20,230** | **-64.39%** | [Income Tax Expense](index=12&type=section&id=Income%20Tax%20Expense) Income tax expense for the period was HKD 66.95 million, a slight year-on-year increase, primarily comprising Hong Kong profits tax, PRC corporate income tax and land appreciation tax, and deferred tax - Hong Kong profits tax is calculated at a **16.5%** rate, and Mainland China operations are subject to corporate income tax and land appreciation tax at applicable rates[24](index=24&type=chunk)[25](index=25&type=chunk) Income Tax Expense (For the six months ended June 30) | Item | 2025 (HKD thousands) | 2024 (HKD thousands) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Current Tax: Hong Kong | 36,054 | 37,105 | -2.83% | | Current Tax: Mainland China and Other Regions | 16,809 | 34,921 | -51.87% | | Deferred Tax | 14,090 | (7,183) | -296.10% | | **Total** | **66,953** | **64,843** | **3.25%** | [Dividends](index=13&type=section&id=Dividends) The Board of Directors does not recommend the payment of an interim dividend for the six months ended June 30, 2025, compared to HKD 1.5 cents per share paid in the prior year - The Board of Directors does not recommend the payment of an interim dividend for the first half of 2025 (2024: **HKD 1.5 cents per share**)[27](index=27&type=chunk) [(Loss) / Earnings Per Share](index=13&type=section&id=(Loss)%20%2F%20Earnings%20Per%20Share) Basic and diluted loss per share for the period was HKD 1.57 cents, compared to earnings per share of HKD 1.14 cents in the prior year, primarily reflecting the loss attributable to equity holders of the company (Loss) / Earnings Per Share (For the six months ended June 30) | Indicator | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | (Loss) / Profit Attributable to Equity Holders of the Company | (86,853) | 63,230 | | Weighted Average Number of Ordinary Shares Outstanding | 5,536,633,709 | 5,536,633,709 | | Basic and Diluted (Loss) / Earnings Per Share (HK cents) | (1.57) | 1.14 | - No diluted adjustment was made to the basic loss per share amount as the assumed exercise of share options would result in a reduction in loss per share[28](index=28&type=chunk) [Trade Receivables](index=14&type=section&id=Trade%20Receivables) As of June 30, 2025, total trade receivables amounted to HKD 222.28 million, a 14.9% increase from the end of the previous year, with the largest proportion being receivables within three months Ageing Analysis of Trade Receivables (As of June 30) | Ageing | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | | :--- | :--- | :--- | | Within three months | 137,690 | 120,803 | | Over three months to six months | 40,654 | 40,183 | | Over six months to twelve months | 32,614 | 30,370 | | Over one year to two years | 10,107 | 1,283 | | Over two years | 1,213 | 824 | | **Total** | **222,278** | **193,463** | - The Group grants an average credit period of **30 to 90 days** to trade customers[30](index=30&type=chunk) [Trade Payables](index=14&type=section&id=Trade%20Payables) As of June 30, 2025, total trade payables amounted to HKD 721.70 million, a 5.4% decrease from the end of the previous year, with the largest proportion being payables within three months Ageing Analysis of Trade Payables (As of June 30) | Ageing | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | | :--- | :--- | :--- | | Within three months | 325,506 | 372,102 | | Over three months to six months | 37,599 | 134,413 | | Over six months to twelve months | 182,375 | 54,783 | | Over one year to two years | 82,369 | 58,552 | | Over two years | 93,851 | 143,192 | | **Total** | **721,700** | **763,042** | [Performance Review and Management Discussion and Analysis](index=15&type=section&id=Performance%20Review%20and%20Management%20Discussion%20and%20Analysis) This section provides a detailed review of the Group's overall performance in the first half of 2025, analyzing the operational status of each business segment, challenges faced, and future strategic development directions, including specific strategies for tourism attractions, travel documents, hotels, and passenger transportation businesses, as well as digital transformation, overseas market expansion, and enhanced operational control [Performance Overview](index=15&type=section&id=Performance%20Overview) In the first half of 2025, the Group's consolidated revenue decreased by 8% year-on-year, turning from a pre-tax profit to a loss, with a loss attributable to shareholders of HKD 87 million, primarily due to a decline in fair value of investment properties and impairment provisions, while financial position remained sound with net cash increasing by 16% - In the first half of 2025, the Group's consolidated revenue was **HKD 1.974 billion**, a year-on-year decrease of **8%**[32](index=32&type=chunk) - Pre-tax loss was **HKD 8 million**, compared to a pre-tax profit of HKD 165 million in the prior year; loss attributable to shareholders was **HKD 87 million**, compared to a profit of HKD 63 million in the prior year[32](index=32&type=chunk) - The shift from profit to loss was mainly due to the decline in fair value of investment properties and impairment provisions by subsidiaries[32](index=32&type=chunk) Key Financial Position Data (As of June 30, 2025) | Indicator | Amount (HKD billions) | Change from Year-End (%) | | :--- | :--- | :--- | | Total Assets | 251.84 | 3% | | Equity Attributable to Shareholders | 162.3 | 1% | | Total Cash and Bank Balances, Pledged and Restricted Deposits | 28.59 | 17% | | Net Cash | 7.45 | 16% | - The Board of Directors does not recommend the payment of an interim dividend for the six months ended June 30, 2025[34](index=34&type=chunk) [Segment Performance Analysis](index=16&type=section&id=Segment%20Performance%20Analysis) This section provides a detailed analysis of the Group's four core business segments' performance in the first half of 2025, including revenue and profit changes and their main drivers, along with an overview of each segment's key operational activities and market strategies [Tourism Attractions and Related Businesses](index=16&type=section&id=Tourism%20Attractions%20and%20Related%20Businesses) In the first half of 2025, total revenue from tourism attractions and related businesses decreased by 16% year-on-year, turning from profit to a loss of HKD 112 million, primarily affected by consumption downgrading, lack of new products, climate change, and a decline in fair value of investment properties and impairment provisions Tourism Attractions and Related Businesses Performance (For the six months ended June 30) | Indicator | 2025 (HKD billions) | 2024 (HKD billions) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Total Revenue | 8.71 | 10.37 | -16% | | Attributable (Loss) / Profit | (1.12) | 0.26 | -530.77% | - Theme park revenue was **HKD 270 million**, a year-on-year decrease of **7%**; attributable profit was **HKD 24 million**, a year-on-year decrease of **20%**; Window of the World and Splendid China enriched experiences through IP collaborations, themed events, and night-time products[38](index=38&type=chunk) - Natural and cultural scenic area destination revenue was **HKD 441 million**, a year-on-year decrease of **13%**; attributable profit was **HKD 21 million**, a year-on-year decrease of **66%**; Shapotou Scenic Area successfully held a desert starry sky music festival, and Detian Scenic Area promoted sales through distinctive marketing activities[39](index=39&type=chunk)[40](index=40&type=chunk) - Leisure and resort scenic area destination revenue was **HKD 147 million**, a year-on-year decrease of **33%**; attributable loss was **HKD 146 million**, a year-on-year increase of **115%**, mainly due to a decline in fair value of investment properties and impairment provisions[41](index=41&type=chunk) - Tourism attractions supporting services revenue was **HKD 13 million**, a year-on-year decrease of **28%**; attributable loss was **HKD 11 million**, compared to a profit of HKD 3 million in the prior year[42](index=42&type=chunk) [Travel Document and Related Businesses](index=19&type=section&id=Travel%20Document%20and%20Related%20Businesses) In the first half of 2025, revenue from travel document and related businesses decreased by 18% year-on-year, and attributable profit decreased by 29% year-on-year, mainly because the pent-up demand for document renewals during the 2023 pandemic has returned to normal levels Travel Document and Related Businesses Performance (For the six months ended June 30) | Indicator | 2025 (HKD billions) | 2024 (HKD billions) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 1.47 | 1.80 | -18% | | Attributable Profit | 0.67 | 0.94 | -29% | - China Travel Service Technology Computer Co., Ltd. continuously optimized its travel document business system and actively supported the Group's digital transformation[43](index=43&type=chunk) [Hotel Businesses](index=19&type=section&id=Hotel%20Businesses) In the first half of 2025, hotel business revenue increased by 17% year-on-year, and attributable profit increased by 24% year-on-year, benefiting from increased international tourists and the operation of new hotels, with both occupancy rates and average room rates improving in Hong Kong and Macau hotels Hotel Businesses Performance (For the six months ended June 30) | Indicator | 2025 (HKD billions) | 2024 (HKD billions) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 4.29 | 3.68 | 17% | | Attributable Profit | 1.02 | 0.82 | 24% | - The Metropark Hotel Hung Hom and Parkview Service Apartment commenced operations in May 2024, expanding profit growth points[44](index=44&type=chunk) Key Hotel Operating Indicators (First Half) | Hotel Type | Indicator | 2025 First Half | 2024 First Half | | :--- | :--- | :--- | :--- | | Six Hotels and One Serviced Apartment in Hong Kong and Macau | Average Occupancy Rate (%) | 95.15 | 94.42 | | | Average Room Rate (HKD) | 768.48 | 693.66 | | Beijing Metropark Hotel | Average Occupancy Rate (%) | 77.22 | 76.17 | | | Average Room Rate (RMB) | 703.87 | 716.57 | [Passenger Transportation Businesses](index=20&type=section&id=Passenger%20Transportation%20Businesses) In the first half of 2025, passenger transportation business revenue decreased by 4% year-on-year, but attributable profit increased by 33% year-on-year, with coach business revenue and profit both growing, while ferry business revenue decreased due to competition Passenger Transportation Businesses Performance (For the six months ended June 30) | Indicator | 2025 (HKD billions) | 2024 (HKD billions) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 5.13 | 5.37 | -4% | | Attributable Profit | 0.08 | 0.06 | 33% | - Shun Tak-China Travel will seize the opportunities presented by "Hong Kong people traveling north" and the opening of the "Shenzhen-Zhongshan Link" to actively expand the market, with both coach business revenue and profit increasing[47](index=47&type=chunk) - Ferry business revenue decreased due to competitors' ticket giveaway strategies[47](index=47&type=chunk) [Strategy and Future Development](index=21&type=section&id=Strategy%20and%20Future%20Development) This section outlines the Group's future strategic priorities, including building first-class tourism destinations, strengthening technological innovation and digital transformation, optimizing passenger transportation businesses, expanding Hong Kong and overseas markets, and enhancing overall operational control and core competitiveness, aiming for long-term business growth and value creation [Tourism Attractions and Related Businesses Strategy](index=21&type=section&id=Tourism%20Attractions%20and%20Related%20Businesses%20Strategy) The Group will focus on natural and cultural scenic areas, urban and leisure resort destinations, enhancing its four capabilities in investment, products, digitalization, and operations, to create industry-leading benchmark products, and actively expand business through IP collaborations, existing asset upgrades, and strategic acquisitions - Strategic positioning as a "first-class tourism destination investment and operation service provider," focusing on natural and cultural scenic areas, urban, and leisure resort destinations[48](index=48&type=chunk) - Promote cooperation with renowned IPs like Harry Potter, striving to build **1-2 domestic first-class theme parks** during the "15th Five-Year Plan" period[49](index=49&type=chunk) - Explore "tourism + wellness" and "tourism + education" models through existing asset upgrades and introducing high-quality external partners[50](index=50&type=chunk) - Acquired **75% equity** in Songhuahu Company and Wanbingxue Company, actively expanding into the ice and snow economy, aligning with the development strategy for urban and leisure resort products[51](index=51&type=chunk) - Subsidiaries such as CTS Scenery, CTS Wisdom, and CTS Resort provide scenic area, hotel, and performing arts output management services, with **33 output management projects**[52](index=52&type=chunk)[53](index=53&type=chunk) [Technological Innovation and Digital Transformation](index=24&type=section&id=Technological%20Innovation%20and%20Digital%20Transformation) The Group adheres to technology-led innovation and digital-real integration, promoting business online and integrated operations through digital platforms, actively applying AI, XR immersive experiences, and exploring new scenarios like low-altitude tourism to enhance service quality and operational efficiency - Leveraging digital platforms to promote business online and integrated operations, providing a "one-stop travel" experience[54](index=54&type=chunk) - Developing intelligent agent applications such as "Destination AI Tourism" and "AI Employee Assistant" based on large models like DeepSeek[54](index=54&type=chunk) - Detian Scenic Area and Splendid China launched XR immersive projects and signed a "Low-Altitude Economy Cooperation Framework Agreement" with China Telecom Shenzhen Branch[54](index=54&type=chunk) - In the second half of the year, it will upgrade to a smart tourism platform for destinations, increase the promotion of AI applications, and advance "ticket + low-altitude tour" bundled products for low-altitude tourism pilots[55](index=55&type=chunk) [Passenger Transportation Business Development Strategy](index=25&type=section&id=Passenger%20Transportation%20Business%20Development%20Strategy) The passenger transportation business will seize the opportunities of "Hong Kong people traveling north" and the opening of the "Shenzhen-Zhongshan Link," adjusting routes, procuring new energy vehicles, and seeking M&A to address quota shortages, while also exploring the low-altitude economy, striving to build the "largest cross-border passenger transportation platform in the Guangdong-Hong Kong-Macao Greater Bay Area" - The coach business will adjust routes for "Hong Kong people traveling north" and the opening of the "Shenzhen-Zhongshan Link," accelerate new energy vehicle procurement, and seek M&A to address quota shortages[56](index=56&type=chunk) - The ferry business will implement cost control, divest inefficient assets and routes, and increase its market share in cross-border water transportation[56](index=56&type=chunk) - Shun Tak-China Travel will explore the low-altitude economy, leveraging the trend of interconnectedness in the Greater Bay Area, striving to become the "**largest cross-border passenger transportation platform in the Guangdong-Hong Kong-Macao Greater Bay Area**"[56](index=56&type=chunk) [Hong Kong and Overseas Business Layout](index=25&type=section&id=Hong%20Kong%20and%20Overseas%20Business%20Layout) The Group adheres to the strategy of "based in Hong Kong, deeply cultivating Hainan, expanding into Mainland China, and refining overseas operations," orderly advancing the Maldives project, actively researching the revitalization of existing assets such as Hong Kong properties, and providing consulting and operational support for the second phase of Ma Wan Park's cultural tourism business - Adhering to the strategy of "based in Hong Kong, deeply cultivating Hainan, expanding into Mainland China, and refining overseas operations," actively exploring overseas market layouts[57](index=57&type=chunk) - Land reclamation for the Maldives Ambaara Island project is largely complete, entering the hotel design refinement phase, aiming to create a high-quality island resort[57](index=57&type=chunk) - Researching the revitalization of existing assets such as Hong Kong properties, with Metropark Hotel Hung Hom having commenced operations in May 2024[57](index=57&type=chunk) - Collaborating with a subsidiary of Sun Hung Kai Properties to provide consulting and operational support services for the second phase of Ma Wan Park's cultural tourism business[57](index=57&type=chunk) [Operational Control and Core Competitiveness Enhancement](index=26&type=section&id=Operational%20Control%20and%20Core%20Competitiveness%20Enhancement) The Group will deepen operational control, optimize performance assessment, strengthen brand marketing, and focus on enhancing its four core competencies: investment, products, digitalization, and operations, while also reinforcing the safety production baseline and improving internal control management and risk prevention capabilities - Deepen operational control, optimize and improve corporate performance assessment, strengthen the weighting of key indicators, and adhere to a value creation orientation[58](index=58&type=chunk) - Strengthen brand marketing, increase brand promotion efforts, and improve marketing conversion rates[58](index=58&type=chunk) - Focus on strengthening the four core competencies: investment capability, product capability, digitalization capability, and operational capability[58](index=58&type=chunk) - Reinforce the safety production baseline, improve safety production management organizations, and strengthen the dual prevention system and employee safety training[58](index=58&type=chunk) - Strictly comply with listing rules, continuously optimize governance mechanisms, improve internal control management, and strengthen control over operating cash flow and asset-liability ratio[58](index=58&type=chunk) [Outlook](index=26&type=section&id=Outlook) The Group remains cautiously optimistic about the business outlook for the second half of the year, expecting resilient growth in the Chinese economy, renewed vitality in Hong Kong's financial sector, and a recovery in the consumer market; despite global economic volatility and external uncertainties, the Group will continue to pursue long-term business and profit growth, committed to enhancing its overall financial position and creating greater value for shareholders - The International Monetary Fund raised China's 2025 economic growth forecast to **4.8%**, indicating continued resilient growth for the Chinese economy[59](index=59&type=chunk) - The Chinese government actively implemented macro policies to expand domestic demand and promote consumption, with GDP growing by **5.3%** year-on-year in the first half[59](index=59&type=chunk) - Hong Kong's financial sector regained momentum, with inbound tourist arrivals continuously increasing by **12%**, while local outbound tourism showed signs of a pullback[60](index=60&type=chunk) - The Group remains cautiously optimistic about the business outlook for the second half of the year, will continue to explore diversified long-term value-added opportunities for shareholders, and implement stringent financial management[61](index=61&type=chunk) [Other Information](index=27&type=section&id=Other%20Information) This section provides supplementary information on the Group's operations and governance, including employee matters, financial resources, risk management, significant transactions, contingent liabilities, and corporate governance practices, ensuring transparency and compliance [Employees and Remuneration](index=27&type=section&id=Employees%20and%20Remuneration) As of June 30, 2025, the Group employed 6,750 employees, with remuneration determined based on performance, experience, and industry practice, and discretionary bonuses and share options granted - As of June 30, 2025, the Group employed **6,750 employees**[62](index=62&type=chunk) - Employee remuneration is determined based on work performance, professional experience, and current industry practice, with discretionary bonuses and share options granted[62](index=62&type=chunk) [Liquidity, Financial Resources and Capital Structure](index=28&type=section&id=Liquidity%2C%20Financial%20Resources%20and%20Capital%20Structure) The Group maintains a sound financial position, primarily using internal cash flow and bank loans for working capital, with HKD 2.859 billion in cash and bank balances as of June 30, 2025, and a debt-to-capital ratio of 33% - The Group maintains a sound financial position, with working capital primarily sourced from internal cash flow and bank loans[63](index=63&type=chunk) Liquidity and Financial Resources (As of June 30, 2025) | Indicator | Amount (HKD billions) | | :--- | :--- | | Cash and Bank Balances, Pledged and Restricted Deposits | 28.59 | | Bank and Other Borrowings, Amounts Due to Fellow Subsidiaries and Holding Company | 21.14 | | Debt-to-Capital Ratio | 33% | [Foreign Exchange Risk](index=28&type=section&id=Foreign%20Exchange%20Risk) The Group is exposed to foreign exchange risk arising from foreign currency-denominated assets, borrowings, and transactions, but currently does not use specific hedging instruments and will closely monitor and manage these risks - The Group is exposed to foreign exchange risk arising from foreign currency-denominated assets, borrowings, and transactions[64](index=64&type=chunk) - Currently, no specific hedging instruments are used, and foreign currency risks will be closely monitored and managed[64](index=64&type=chunk) [Pledged Assets](index=28&type=section&id=Pledged%20Assets) As of June 30, 2025, certain bank deposits, land, and buildings of the Group were pledged to banks as security for credit facilities from suppliers - Certain bank deposits, land, and buildings have been pledged to banks as security for supplier credit facilities[65](index=65&type=chunk) [Significant Acquisitions and Disposals](index=28&type=section&id=Significant%20Acquisitions%20and%20Disposals) Apart from the acquisition of equity in Songhuahu Company and Wanbingxue Company disclosed in the "Management Discussion and Analysis" section, the Group had no other significant acquisitions or disposals of subsidiaries, associates, and joint ventures, or material investments during the reporting period - During the reporting period, there were no other significant acquisitions or disposals of subsidiaries, associates, and joint ventures, or material investments, except for the acquisition of equity in Songhuahu Company and Wanbingxue Company disclosed in the Management Discussion and Analysis[66](index=66&type=chunk) [Plans for Future Material Investments or Capital Assets](index=28&type=section&id=Plans%20for%20Future%20Material%20Investments%20or%20Capital%20Assets) Apart from those disclosed in the "Management Discussion and Analysis" section, the Group had no plans for future material investments or capital assets during the reporting period - Apart from those disclosed in the Management Discussion and Analysis, there were no plans for future material investments or capital assets during the reporting period[67](index=67&type=chunk) [Contingent Liabilities](index=28&type=section&id=Contingent%20Liabilities) As of June 30, 2025, the Group provided performance guarantees of HKD 0.3 million; additionally, a subsidiary received a notice from the local tax authority to pay approximately HKD 160 million in taxes and late fees on behalf of an associate, which is currently under active negotiation, with no provision made yet - The Group provided performance guarantees of **HKD 0.3 million** for sales contracts[68](index=68&type=chunk) - A subsidiary received a notice from the local tax authority to pay approximately **HKD 160 million** in taxes and late fees on behalf of an associate, which is currently under negotiation, with no provision made yet[68](index=68&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=29&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company%27s%20Listed%20Securities) Neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities during the period - Neither the Company nor its subsidiaries purchased, sold, or redeemed any of the Company's listed securities during the period[69](index=69&type=chunk) [Corporate Governance](index=29&type=section&id=Corporate%20Governance) The Group is committed to maintaining high standards of corporate governance and complies with the Corporate Governance Code in Appendix C1 of the Listing Rules, though there are deviations regarding directors' appointment letters and the Chairman's attendance at the Annual General Meeting, which have been explained - The Group has adopted and complied with the Corporate Governance Code in Appendix C1 of the Listing Rules, but with deviations[70](index=70&type=chunk) - Deviations include not issuing formal appointment letters to some directors and the Chairman of the Board being unable to attend the Annual General Meeting due to other business commitments[71](index=71&type=chunk) [Review of Interim Results](index=30&type=section&id=Review%20of%20Interim%20Results) The unaudited condensed consolidated interim financial results of the Group for the six months ended June 30, 2025, have been reviewed by the Company's Audit Committee and by Ernst & Young in accordance with Hong Kong Standard on Review Engagements 2410 - The interim financial results have been reviewed by the Audit Committee and by Ernst & Young in accordance with Hong Kong Standard on Review Engagements 2410[73](index=73&type=chunk) [Publication of 2025 Interim Results and Interim Report](index=30&type=section&id=Publication%20of%202025%20Interim%20Results%20and%20Interim%20Report) This results announcement has been published on the HKEXnews website and the Company's website, and the interim report will be published and dispatched to shareholders later - The results announcement has been published on the HKEXnews website and the Company's website, and the interim report will be published and dispatched to shareholders later[74](index=74&type=chunk) [Board of Directors](index=30&type=section&id=Board%20of%20Directors) As of the date of this announcement, the Board of Directors comprises three executive directors, three non-executive directors, and three independent non-executive directors - The Board of Directors comprises three executive directors, three non-executive directors, and three independent non-executive directors[75](index=75&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佈之內容概不負責， 對其準確性或完整性亦不發表任何聲明，並明確表示不會就本公佈全部或任何部 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。 CSC HOLDINGS LIMITED 中策資本控股有限公司 （於香港註冊成立之有限公司） （股份代號：235） 截至二零二五年六月三十日止六個月之 中期業績 中策資本控股有限公司（「本公司」）之董事會（「董事會」）謹此公佈本公司及其附屬 公司（統稱為「本集團」）截至二零二五年六月三十日止六個月之未經審核簡明綜合 業績連同比較數字如下： 簡明綜合損益及其他全面收益表 截至二零二五年六月三十日止六個月 截至六月三十日止六個月 | | | 二零二五年 | 二零二四年 | | --- | --- | --- | --- | | | 附註 | 千港元 | 千港元 | | | | （未經審核） | （未經審核） | | 收入 | 3 | 20,205 | 19,888 | | 利息收入 | | 19,250 | 19,431 | | 佣金、手續費收入及其他 | | 955 | 457 | | 其他收入 | 5 | ...

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。 （ 於 中 華 人 民 共 和 國 註 冊 成 立 的 股 份 有 限 公 司 ） （股份代號：6099） 截至2025年6月30日止六個月之中期業績公告 招商證券股份有限公司（「本公司」）董事會（「董事會」）謹此宣佈本公司及其附屬公司（「本 集團」）截至2025年6月30日止六個月之未經審計中期業績。本公告載列本公司2025年中 期報告全文，並符合香港聯合交易所有限公司證券上市規則中有關中期業績初步公告附 載的資料的要求。 刊發中期業績公告及中期報告 本中期業績公告將分別於香港聯合交易所有限公司網站(www.hkexnews.hk)及本公司網站 (www.cmschina.com)刊發。 本公司將適時根據H股股東需要寄發本公司2025年中期報告印刷版本，並在本公司網站 及香港聯合交易所有限公司網站刊發2025年中期報告。 承董事會命 招商證券股份有限公司 霍達 董事長 中國深圳 2025年8月28日 ...

[Summary](index=1&type=section&id=Summary) Company's H1 2025 revenue decreased by 25.0% to HKD 612.1 million, but achieved a turnaround to profit attributable to owners of the company of approximately HKD 20.7 million through asset sales and reduced interest expenses, with gross margin improving to 20.0% 2025 H1 Key Financial Summary | Metric | H1 2025 (HKD thousands) | H1 2024 (HKD thousands) | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | 612,100 | 816,567 | -25.0% | | SI Business Revenue | 150,200 | N/A | -56.5% | | IBO Business Revenue | 461,900 | N/A | -2.0% | | Gross Profit | 122,400 | 140,549 | -12.9% | | Gross Margin | 20.0% | N/A | Improved | | Profit/(Loss) attributable to owners of the company | 20,700 | (138,599) | Turned profitable | [Condensed Consolidated Financial Statements](index=2&type=section&id=Condensed%20Consolidated%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements for the six months ended June 30, 2025, including the income statement, statement of comprehensive income, and statement of financial position, compared with 2024 data [Condensed Consolidated Statement of Profit or Loss](index=2&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss) For H1 2025, revenue decreased by 25.0% to HKD 612.1 million, but the company achieved a pre-tax profit of HKD 21.7 million, reversing last year's loss Condensed Consolidated Statement of Profit or Loss Key Data | Metric | 2025 (HKD thousands) | 2024 (HKD thousands) | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | 612,100 | 816,567 | -25.0% | | Cost of sales | (489,707) | (676,018) | -27.5% | | Gross Profit | 122,393 | 140,549 | -12.9% | | Other income and gains, net | 169,375 | 30,845 | +450.0% | | Selling and distribution expenses | (9,342) | (5,644) | +65.5% | | Administrative expenses | (116,371) | (152,885) | -23.9% | | Other expenses, net | (54,319) | (7,844) | +592.5% | | Finance costs | (106,800) | (140,708) | -24.1% | | Profit/(Loss) before tax | 21,689 | (131,574) | Turned profitable | | Profit/(Loss) for the period | 21,067 | (138,303) | Turned profitable | | Profit/(Loss) attributable to owners of the company | 20,683 | (138,599) | Turned profitable | | Basic earnings/(loss) per share | 0.31 HK cents | (2.08) HK cents | Turned profitable | [Condensed Consolidated Statement of Comprehensive Income](index=3&type=section&id=Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) For H1 2025, total comprehensive income was HKD 63.9 million, driven by profit for the period and positive exchange differences on overseas operations Condensed Consolidated Statement of Comprehensive Income Key Data | Metric | 2025 (HKD thousands) | 2024 (HKD thousands) | YoY Change | | :--- | :--- | :--- | :--- | | Profit/(Loss) for the period | 21,067 | (138,303) | Turned profitable | | Exchange differences on translation of overseas operations | 42,852 | (40,010) | Turned from negative to positive | | Total comprehensive income/(loss) for the period | 63,919 | (178,313) | Turned profitable | | Attributable to owners of the company | 63,535 | (178,609) | Turned profitable | [Condensed Consolidated Statement of Financial Position](index=4&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, total assets less current liabilities slightly increased, with net assets rising to HKD 1,645.3 million, reflecting asset disposal activities Condensed Consolidated Statement of Financial Position Key Data | Metric | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | Change | | :--- | :--- | :--- | :--- | | Total non-current assets | 1,660,772 | 1,629,773 | +1.9% | | Total current assets | 3,930,614 | 4,231,051 | -7.1% | | Assets held for sale | 415,463 | 969,328 | -57.1% | | Total current liabilities | 3,782,278 | 4,073,795 | -7.2% | | Net current assets | 148,336 | 157,256 | -5.6% | | Total assets less current liabilities | 1,809,108 | 1,787,029 | +1.2% | | Total non-current liabilities | 163,773 | 205,613 | -20.4% | | Net assets | 1,645,335 | 1,581,416 | +4.0% | | Total equity | 1,645,335 | 1,581,416 | +4.0% | [Notes to the Financial Statements](index=6&type=section&id=Notes%20to%20the%20Financial%20Statements) This section details the basis of preparation, accounting policies, operating segment information, income and expenses, and key balance sheet items, providing supplementary financial insights [Company and Group Information](index=6&type=section&id=Company%20and%20Group%20Information) The company designs, integrates, sells, and installs engine-based generator sets and provides distributed power solutions, with CNTIC as its direct holding company - Company's main businesses are generator set design, integration, sales, and installation (SI business) and distributed power solutions (IBO business)[11](index=11&type=chunk) - The company's direct holding company is CNTIC, and the ultimate holding company is China General Technology (Group) Holding Co., Ltd[11](index=11&type=chunk) [Basis of Preparation](index=6&type=section&id=Basis%20of%20Preparation) Financial statements are prepared under HKAS 34 on a going concern basis, despite significant loan repayment uncertainties, as management has plans to improve liquidity [Going Concern Basis](index=6&type=section&id=Going%20Concern%20Basis) Despite significant uncertainty regarding HKD 1,736.5 million in bank and other borrowings, the board believes the company can continue as a going concern through asset sales and shareholder support - The company faces significant uncertainty regarding the repayment of **HKD 1,736.5 million** in bank and other borrowings according to the repayment schedule[13](index=13&type=chunk) - Management has taken measures including selling power generation assets, leveraging holding shareholder resources to accelerate new projects, and negotiating with creditor banks to extend loan maturities to improve liquidity[13](index=13&type=chunk) [Consolidation Basis](index=7&type=section&id=Consolidation%20Basis) These interim financial statements should be read in conjunction with the annual consolidated financial statements for the year ended December 31, 2024 - These interim financial statements should be read in conjunction with the annual consolidated financial statements for the year ended December 31, 2024[15](index=15&type=chunk) [Changes in Accounting Policies and Disclosures](index=7&type=section&id=Changes%20in%20Accounting%20Policies%20and%20Disclosures) Revised Hong Kong Financial Reporting Standards adopted this period have no significant impact on the Group's financial position or performance - The application of revised HKFRS 21 (Lack of Exchangeability) has no significant impact on the financial position and performance[17](index=17&type=chunk) [Operating Segment Information](index=7&type=section&id=Operating%20Segment%20Information) The company is divided into SI and IBO operating segments, with management separately monitoring their performance, covering generator set and distributed power solutions [Segment Revenue](index=8&type=section&id=Segment%20Revenue) In H1 2025, SI business external customer revenue was HKD 150.2 million, and IBO business was HKD 461.9 million, with SI revenue significantly decreasing Segment Revenue (Sales to external customers) | Segment | H1 2025 (HKD thousands) | H1 2024 (HKD thousands) | YoY Change | | :--- | :--- | :--- | :--- | | SI | 150,204 | 345,074 | -56.5% | | IBO | 461,896 | 471,493 | -2.0% | | **Total** | **612,100** | **816,567** | **-25.0%** | [Segment Assets and Liabilities](index=8&type=section&id=Segment%20Assets%20and%20Liabilities) As of June 30, 2025, SI segment assets were HKD 2,053.5 million and IBO segment assets were HKD 2,470.6 million, with corresponding liabilities of HKD 960.5 million and HKD 658.8 million Segment Assets and Liabilities (June 30, 2025) | Metric | SI (HKD thousands) | IBO (HKD thousands) | Total (HKD thousands) | | :--- | :--- | :--- | :--- | | Segment Assets | 2,053,475 | 2,470,599 | 4,524,074 | | Segment Liabilities | 960,539 | 658,837 | 1,619,376 | [Revenue by Geographical Location](index=10&type=section&id=Revenue%20by%20Geographical%20Location) In H1 2025, Latin America was the largest revenue source, contributing HKD 354.7 million or 58.0% of total revenue, while Hong Kong and Mainland China revenue decreased Revenue by Geographical Location (H1 2025) | Region | 2025 (HKD thousands) | % of Total Revenue | 2024 (HKD thousands) | % of Total Revenue | | :--- | :--- | :--- | :--- | :--- | | Hong Kong and Mainland China | 59,928 | 8.3% | 181,711 | 20.7% | | Other Asian Countries | 189,601 | 14.9% | 144,970 | 5.4% | | Latin America | 354,723 | 58.0% | 357,014 | 43.7% | | Other Countries | 7,848 | 1.3% | 132,872 | 16.2% | | **Total** | **612,100** | **100.0%** | **816,567** | **100.0%** | [Non-current Assets by Geographical Location](index=10&type=section&id=Non-current%20Assets%20by%20Geographical%20Location) As of June 30, 2025, Hong Kong and Mainland China held the largest share of non-current assets, followed by Latin America, with other Asian countries showing an increase Non-current Assets by Geographical Location (June 30, 2025) | Region | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | | :--- | :--- | :--- | | Hong Kong and Mainland China | 946,892 | 986,959 | | Other Asian Countries | 130,354 | 92,287 | | Latin America | 491,632 | 443,016 | | Other Countries | 45,426 | 56,875 | | **Total** | **1,614,304** | **1,579,137** | [Revenue, Other Income and Gains, Net](index=11&type=section&id=Revenue%2C%20Other%20Income%20and%20Gains%2C%20Net) In H1 2025, total revenue was HKD 612.1 million, while other income and gains net significantly increased by 450.0% to HKD 169.4 million, mainly from asset sales Revenue Composition | Segment | H1 2025 (HKD thousands) | H1 2024 (HKD thousands) | | :--- | :--- | :--- | | SI | 150,204 | 345,074 | | IBO | 461,896 | 471,493 | | **Total** | **612,100** | **816,567** | Other Income and Gains, Net | Item | H1 2025 (HKD thousands) | H1 2024 (HKD thousands) | YoY Change | | :--- | :--- | :--- | :--- | | Bank interest income | 2,766 | 386 | +616.6% | | Gain on disposal of property, plant and equipment, net | 149,285 | 1,578 | Significant increase | | Fair value gain on derivative financial instruments | — | 21,391 | Turned from positive to negative | | **Total** | **169,375** | **30,845** | **+450.0%** | [Details of Profit/(Loss) Before Tax Items](index=12&type=section&id=Details%20of%20Profit%2F%28Loss%29%20Before%20Tax%20Items) During the reporting period, depreciation of property, plant and equipment significantly decreased, while depreciation of right-of-use assets substantially increased, and fair value losses were recorded Key Items of Profit/(Loss) Before Tax | Item | H1 2025 (HKD thousands) | H1 2024 (HKD thousands) | YoY Change | | :--- | :--- | :--- | :--- | | Depreciation of property, plant and equipment | 28,287 | 117,561 | -75.9% | | Depreciation of right-of-use assets | 40,176 | 6,378 | +530.0% | | Fair value loss on derivative financial instruments | 1,802 | — | New loss | | Foreign exchange differences, net | 4,641 | 6,861 | -32.4% | [Income Tax](index=12&type=section&id=Income%20Tax) Income tax expense for H1 2025 was HKD 0.6 million, a significant decrease from HKD 6.7 million in the prior year, with no provision for Hong Kong profits tax and an effective tax rate of 2.9% Income Tax Expense | Item | H1 2025 (HKD thousands) | H1 2024 (HKD thousands) | | :--- | :--- | :--- | | Current—Other locations | 2,849 | 5,921 | | Deferred | (1,165) | 279 | | **Total tax expense for the period** | **622** | **6,729** | - The effective tax rate for H1 2025 was **2.9%**, while the prior period was not applicable due to pre-tax loss[69](index=69&type=chunk) [Dividends](index=13&type=section&id=Dividends) The Board resolved not to declare an interim dividend for the six months ended June 30, 2025, consistent with the prior year - The Board resolved not to declare an interim dividend for H1 2025[31](index=31&type=chunk) [Earnings/(Loss) Per Share](index=13&type=section&id=Earnings%2F%28Loss%29%20Per%20Share) Basic earnings per share for H1 2025 was 0.31 HK cents, reversing the basic loss per share of 2.08 HK cents from the same period last year Earnings/(Loss) Per Share | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Basic earnings/(loss) per share | 0.31 HK cents | (2.08) HK cents | | Diluted earnings/(loss) per share | 0.31 HK cents | (2.08) HK cents | - Earnings per share turned profitable, primarily based on profit attributable to owners of the company of **HKD 20.7 million**[33](index=33&type=chunk) [Property, Plant and Equipment](index=13&type=section&id=Property%2C%20Plant%20and%20Equipment) During the reporting period, the Group acquired property, plant and equipment totaling HKD 68.1 million, an increase compared to the same period last year Acquisition of Property, Plant and Equipment | Item | H1 2025 (HKD thousands) | H1 2024 (HKD thousands) | | :--- | :--- | :--- | | Acquisition of property, plant and equipment | 68,111 | 25,532 | [Interests in Joint Ventures](index=13&type=section&id=Interests%20in%20Joint%20Ventures) The company holds interests in joint ventures and reclassified Genrent Peru Group as a joint venture due to a revised shareholder agreement - The Group invested approximately **HKD 819.7 million** in Tamar VPower Energy Fund I, L.P[36](index=36&type=chunk) - The Group has ceased to recognise its share of losses in CNTIC VPower as losses exceeded its interest and there is no obligation to incur further losses[37](index=37&type=chunk) - Genrent Peru S.A.C. and VPTM Iquitos S.A.C. were reclassified from subsidiaries to joint ventures due to a revised shareholder agreement[38](index=38&type=chunk) [Trade and Bills Receivables](index=14&type=section&id=Trade%20and%20Bills%20Receivables) As of June 30, 2025, net trade and bills receivables increased to HKD 1,693.1 million, with receivables aged over 360 days accounting for the largest proportion Ageing Analysis of Trade and Bills Receivables (Net of impairment) | Ageing | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | | :--- | :--- | :--- | | Within 90 days | 198,308 | 136,693 | | 91 to 180 days | 4,116 | 6,387 | | 181 to 360 days | 12,968 | 11,322 | | Over 360 days | 1,477,667 | 1,464,292 | | **Total** | **1,693,059** | **1,618,694** | [Trade and Bills Payables](index=15&type=section&id=Trade%20and%20Bills%20Payables) As of June 30, 2025, total trade and bills payables increased to HKD 555.6 million, with payables aged over 360 days representing the largest portion Ageing Analysis of Trade and Bills Payables | Ageing | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | | :--- | :--- | :--- | | Within 90 days | 91,830 | 50,504 | | 91 to 180 days | 8,423 | 1,792 | | 181 to 360 days | 3,450 | 112,548 | | Over 360 days | 451,900 | 338,272 | | **Total** | **555,603** | **503,116** | [Interest-bearing Bank and Other Borrowings](index=15&type=section&id=Interest-bearing%20Bank%20and%20Other%20Borrowings) As of June 30, 2025, total interest-bearing bank and other borrowings decreased by 15.7% to HKD 1,916.1 million, with most borrowings denominated in USD Total Interest-bearing Bank and Other Borrowings | Metric | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | Change | | :--- | :--- | :--- | :--- | | Total | 1,916,080 | 2,272,193 | -15.7% | Interest-bearing Bank and Other Borrowings by Currency (June 30, 2025) | Currency | Amount (HKD thousands) | | :--- | :--- | | USD | 1,614,118 | | BRL | 128,754 | | HKD | 97,674 | | RMB | 50,787 | | EUR | 24,747 | [Assets Held for Sale](index=16&type=section&id=Assets%20Held%20for%20Sale) The company completed the sale of the second batch of power generation assets to an associate of its controlling shareholder, while the third batch of equipment and assets subject to a buy-back arrangement remain classified as held for sale - The sale of the second batch of equipment, valued at approximately **RMB 660.8 million**, to an associate of the controlling shareholder has been completed[43](index=43&type=chunk) - The third batch of equipment with a carrying amount of **HKD 323.9 million** and buy-back assets totaling **HKD 91.5 million** remain classified as assets held for sale[43](index=43&type=chunk) [Management Discussion and Analysis](index=17&type=section&id=Management%20Discussion%20and%20Analysis) This section reviews H1 2025 market environment, SI and IBO operational performance, future outlook, financial indicator changes, liquidity, and significant transactions [Market Review](index=17&type=section&id=Market%20Review) In H1 2025, global electricity demand grew steadily, driven by AI and manufacturing electrification, with emerging markets showing strong performance and distributed gas power gaining importance - Global electricity demand increased by approximately **3.5%** year-on-year, driven by AI/cloud computing, high temperatures, and manufacturing electrification[44](index=44&type=chunk) - Emerging markets (Southeast Asia, Central Asia, South America) are actively promoting energy structure transformation and enhancing electricity self-sufficiency under the "Belt and Road" framework[44](index=44&type=chunk) - The global energy transition is entering a rational adjustment phase, with oil and gas co-developing with renewable energy, and distributed gas power solutions becoming crucial for stable power supply[45](index=45&type=chunk) [Business Review](index=17&type=section&id=Business%20Review) In H1 2025, the company leveraged its controlling shareholder's network to advance its distributed power market strategy and achieved a turnaround to profit through strategic asset management - Leveraging the controlling shareholder's business network, the company steadily advanced its distributed power market strategy, with projects under construction and implementation[46](index=46&type=chunk) - Strategic asset management measures were implemented, including asset disposals, effectively reducing finance costs and driving a turnaround to profit[46](index=46&type=chunk) [System Integration ("SI") Business](index=17&type=section&id=System%20Integration%20%28%22SI%22%29%20Business) In H1 2025, SI business revenue decreased by 56.5% to HKD 150.2 million, as the company prudently adjusted its strategy due to liquidity pressure, leading to an improved gross margin of 18.5% SI Business Key Data | Metric | H1 2025 (HKD thousands) | H1 2024 (HKD thousands) | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | 150,200 | 345,074 | -56.5% | | Gross Profit | 27,700 | N/A | N/A | | Gross Margin | 18.5% | 14.0% | Improved | - Due to liquidity pressure, the company prudently adjusted its resource allocation strategy, temporarily suspending some new projects and focusing resources on existing ones[48](index=48&type=chunk) - The customer portfolio was optimized by selecting high-quality customers with good credit, sound financials, and long-term cooperation potential[48](index=48&type=chunk) [Investment, Build and Operate ("IBO") Business](index=18&type=section&id=Investment%2C%20Build%20and%20Operate%20%28%22IBO%22%29%20Business) In H1 2025, IBO business revenue slightly decreased by 2% to HKD 461.9 million, but gross profit increased by 2.7%, improving the gross margin to 20.5%, with steady progress in key markets IBO Business Key Data | Metric | H1 2025 (HKD thousands) | H1 2024 (HKD thousands) | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | 461,900 | 471,493 | -2.0% | | Gross Profit | 94,600 | 92,177 | +2.7% | | Gross Margin | 20.5% | 19.6% | Improved | - Approximately **200 MW** of contracted capacity is operating in the Indonesian market, with three 150 MW power stations in Batam performing exceptionally well[49](index=49&type=chunk) - In Brazil, **61.2 MW** of contracted capacity is operating, with two power stations completing or undergoing diesel-solar hybrid upgrade projects[49](index=49&type=chunk) - Construction of the **100 MW** power station in Uzbekistan is progressing smoothly, with civil works completed and major equipment installed[50](index=50&type=chunk) - The Myanmar project continues to scale down in a complex political environment, with the joint venture assessing asset operating strategies[50](index=50&type=chunk) [Significant Investments](index=19&type=section&id=Significant%20Investments) The Group's total investment cost in Tamar VPower Energy Fund I, L.P., a joint venture with CITIC Pacific, was approximately HKD 819.7 million as of June 30, 2025, representing about 12.4% of total assets - The Group's total investment cost in Tamar VPower Energy Fund I, L.P. is approximately **HKD 819.7 million**, with a carrying amount of approximately **HKD 692.9 million**[51](index=51&type=chunk) - Fund investments account for approximately **12.4%** of the Group's total assets, with returns expected through an investment disposal plan[51](index=51&type=chunk) [Outlook](index=19&type=section&id=Outlook) The company anticipates an accelerated structural transformation in the global energy industry, with electricity as a core driver, and plans to expand overseas, optimize asset operations, and leverage SI technical advantages [IBO Business Outlook](index=19&type=section&id=IBO%20Business%20Outlook) The IBO business will expand its overseas footprint, focusing on stable markets, optimizing asset operational efficiency, and bringing projects under construction into operation - The IBO business will continue to expand its overseas footprint, focusing on markets with stable policies or growing electricity demand[52](index=52&type=chunk) - Optimize existing asset operational efficiency and ensure projects under construction are brought into operation as scheduled to improve overall asset returns[52](index=52&type=chunk) - The Uzbekistan project is expected to commence operations in the second half of the year, while Indonesian and Brazilian assets will enhance efficiency through technological upgrades and operational optimization[52](index=52&type=chunk) [SI Business Outlook](index=19&type=section&id=SI%20Business%20Outlook) The SI business will leverage its technical advantages and market network to target high-potential customer groups, prudently improving its customer portfolio and capital utilization efficiency - The SI business will leverage its technical advantages and market network to target high-potential customer groups such as data centers, smart cities, and industrial electrification projects[53](index=53&type=chunk) - Prudently improve the customer portfolio, enhance project success rates and capital utilization efficiency, and further improve gross margin and profitability[53](index=53&type=chunk) [Financial Performance Analysis](index=20&type=section&id=Financial%20Performance%20Analysis) This section analyzes the changes in the company's financial indicators for H1 2025, including revenue, cost of sales, gross profit, various expenses, finance costs, and income tax [Revenue](index=20&type=section&id=Revenue) Total revenue for H1 2025 was HKD 612.1 million, a 25.0% year-on-year decrease, primarily due to reduced SI business revenue Revenue by Business Segment | Segment | H1 2025 (HKD thousands) | H1 2024 (HKD thousands) | YoY Change | | :--- | :--- | :--- | :--- | | SI | 150,204 | 345,074 | -56.5% | | IBO | 461,896 | 471,493 | -2.0% | | **Total** | **612,100** | **816,567** | **-25.0%** | [Revenue by Geographical Location](index=20&type=section&id=Revenue%20by%20Geographical%20Location) SI business revenue significantly decreased in Hong Kong and Mainland China but grew substantially in other Asian countries, while IBO business revenue saw growth in Indonesia SI Business Revenue by Geographical Location | Region | H1 2025 (HKD thousands) | % of SI Total Revenue | H1 2024 (HKD thousands) | % of SI Total Revenue | | :--- | :--- | :--- | :--- | :--- | | Hong Kong and Mainland China | 50,752 | 33.8% | 168,942 | 49.0% | | Other Asian Countries | 91,604 | 61.0% | 43,954 | 12.7% | | Other Countries | 7,848 | 5.2% | 132,178 | 38.3% | | **Total** | **150,204** | **100.0%** | **345,074** | **100.0%** | IBO Business Revenue by Geographical Location | Region | H1 2025 (HKD thousands) | % of IBO Total Revenue | H1 2024 (HKD thousands) | % of IBO Total Revenue | | :--- | :--- | :--- | :--- | :--- | | Brazil | 354,724 | 76.8% | 357,013 | 75.7% | | Indonesia | 74,332 | 16.1% | 48,404 | 10.3% | | Myanmar | 23,665 | 5.1% | 52,612 | 11.2% | | China | 9,175 | 2.0% | 12,769 | 2.7% | | United Kingdom | — | — | 695 | 0.1% | | **Total** | **461,896** | **100.0%** | **471,493** | **100.0%** | [Cost of Sales](index=21&type=section&id=Cost%20of%20Sales) Cost of sales for H1 2025 was HKD 489.7 million, a year-on-year decrease of HKD 186.3 million, primarily due to reduced SI business cost of sales Cost of Sales | Metric | H1 2025 (HKD thousands) | H1 2024 (HKD thousands) | YoY Change | | :--- | :--- | :--- | :--- | | Cost of sales | 489,707 | 676,018 | -27.5% | [Gross Profit and Gross Margin](index=21&type=section&id=Gross%20Profit%20and%20Gross%20Margin) Gross profit for H1 2025 was HKD 122.4 million, a 12.9% year-on-year decrease, while gross margin improved from 17.2% to 20.0%, mainly driven by SI sales Gross Profit and Gross Margin | Segment | H1 2025 Gross Profit (HKD thousands) | H1 2025 Gross Margin | H1 2024 Gross Profit (HKD thousands) | H1 2024 Gross Margin | | :--- | :--- | :--- | :--- | :--- | | SI | 27,746 | 18.5% | 48,372 | 14.0% | | IBO | 94,647 | 20.5% | 92,177 | 19.6% | | **Total** | **122,393** | **20.0%** | **140,549** | **17.2%** | [Profit/(Loss) Before Tax](index=22&type=section&id=Profit%2F%28Loss%29%20Before%20Tax) H1 2025 saw a pre-tax profit of HKD 21.7 million, reversing the HKD 131.6 million loss from the prior year, mainly due to asset sales and reduced interest expenses Profit/(Loss) Before Tax | Metric | H1 2025 (HKD thousands) | H1 2024 (HKD thousands) | YoY Change | | :--- | :--- | :--- | :--- | | Profit/(Loss) before tax | 21,700 | (131,600) | Turned profitable | - The turnaround to profit was primarily due to other income generated from the sale of power generation assets to an associate of the controlling shareholder and reduced interest expenses from repaying bank borrowings[63](index=63&type=chunk) [Other Income and Gains, Net](index=22&type=section&id=Other%20Income%20and%20Gains%2C%20Net) Other income and gains, net, significantly increased by 450.0% to HKD 169.4 million in H1 2025, primarily driven by gains from the disposal of property, plant and equipment Other Income and Gains, Net | Metric | H1 2025 (HKD thousands) | H1 2024 (HKD thousands) | YoY Change | | :--- | :--- | :--- | :--- | | Other income and gains, net | 169,400 | 30,800 | +450.0% | - The increase was primarily due to gains from the disposal of property, plant and equipment[64](index=64&type=chunk) [Selling and Distribution Expenses](index=22&type=section&id=Selling%20and%20Distribution%20Expenses) Selling and distribution expenses increased by 65.5% to HKD 9.3 million in H1 2025 Selling and Distribution Expenses | Metric | H1 2025 (HKD thousands) | H1 2024 (HKD thousands) | YoY Change | | :--- | :--- | :--- | :--- | | Selling and distribution expenses | 9,300 | 5,600 | +65.5% | [Administrative Expenses](index=22&type=section&id=Administrative%20Expenses) Administrative expenses decreased by 23.9% to HKD 116.4 million in H1 2025, mainly due to reduced depreciation expenses Administrative Expenses | Metric | H1 2025 (HKD thousands) | H1 2024 (HKD thousands) | YoY Change | | :--- | :--- | :--- | :--- | | Administrative expenses | 116,400 | 152,900 | -23.9% | - The decrease was primarily due to reduced depreciation expenses[66](index=66&type=chunk) [Other Expenses, Net](index=23&type=section&id=Other%20Expenses%2C%20Net) Other expenses, net, significantly increased by 596.2% to HKD 54.3 million in H1 2025, mainly due to increased relocation fees for asset disposal Other Expenses, Net | Metric | H1 2025 (HKD thousands) | H1 2024 (HKD thousands) | YoY Change | | :--- | :--- | :--- | :--- | | Other expenses, net | 54,300 | 7,800 | +596.2% | - The increase was primarily due to increased relocation fees for the disposal of certain power generation assets[67](index=67&type=chunk) [Finance Costs](index=23&type=section&id=Finance%20Costs) Finance costs decreased by 24.1% to HKD 106.8 million in H1 2025, primarily due to a reduction in total interest-bearing bank borrowings Finance Costs | Metric | H1 2025 (HKD thousands) | H1 2024 (HKD thousands) | YoY Change | | :--- | :--- | :--- | :--- | | Finance costs | 106,800 | 140,700 | -24.1% | - The decrease was primarily due to a reduction in total interest-bearing bank borrowings[68](index=68&type=chunk) [Income Tax Expense](index=23&type=section&id=Income%20Tax%20Expense) Income tax expense for H1 2025 was HKD 0.6 million, a significant decrease from the prior year, with an effective tax rate of 2.9% Income Tax Expense | Metric | H1 2025 (HKD thousands) | H1 2024 (HKD thousands) | YoY Change | | :--- | :--- | :--- | :--- | | Income tax expense | 600 | 6,700 | Significant decrease | - The effective tax rate for H1 2025 was **2.9%**[69](index=69&type=chunk) [Profit/(Loss) Attributable to Owners and Earnings/(Loss) Per Share](index=23&type=section&id=Profit%2F%28Loss%29%20Attributable%20to%20Owners%20and%20Earnings%2F%28Loss%29%20Per%20Share) Profit attributable to owners of the company for H1 2025 was HKD 20.7 million, reversing the HKD 138.6 million loss from the prior year, with basic earnings per share of 0.31 HK cents Profit/(Loss) Attributable to Owners and Earnings/(Loss) Per Share | Metric | H1 2025 (HKD thousands) | H1 2024 (HKD thousands) | YoY Change | | :--- | :--- | :--- | :--- | | Profit/(Loss) attributable to owners of the company | 20,700 | (138,600) | Turned profitable | | Basic earnings/(loss) per share | 0.31 HK cents | (2.08) HK cents | Turned profitable | [Liquidity, Financial and Capital Resources](index=23&type=section&id=Liquidity%2C%20Financial%20and%20Capital%20Resources) As of June 30, 2025, cash and cash equivalents increased to HKD 310.2 million, total bank and other borrowings decreased by 15.7%, and liquidity ratios improved [Liquidity Ratios](index=23&type=section&id=Liquidity%20Ratios) As of June 30, 2025, cash and cash equivalents increased to HKD 310.2 million, total bank and other borrowings decreased by 15.7%, and liquidity ratios improved Liquidity Ratios | Metric | June 30, 2025 | December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Cash and cash equivalents (HKD thousands) | 310,195 | 122,808 | +152.6% | | Total bank and other borrowings (HKD thousands) | 1,916,080 | 2,272,193 | -15.7% | | Current ratio | 1.0 | 1.0 | Unchanged | | Gearing ratio | 70.6% | 73.0% | Improved | | Net debt ratio | 96.8% | 135.1% | Improved | [Pledge of Assets](index=24&type=section&id=Pledge%20of%20Assets) As of June 30, 2025, certain inventories, property, plant and equipment, pledged deposits, and equity interests in subsidiaries were pledged as security for the company's bank borrowings - Inventories of approximately **HKD 64.4 million**, property, plant and equipment of **HKD 140.9 million**, pledged deposits of **HKD 0.2 million**, and equity interests in subsidiaries were pledged as security for bank borrowings[73](index=73&type=chunk) [Exchange Rate Fluctuation Risk](index=24&type=section&id=Exchange%20Rate%20Fluctuation%20Risk) The company faces foreign exchange risk as its revenue and payments are denominated in multiple currencies and has established hedging policies to manage this risk - The company's revenue and payments are primarily denominated in USD, EUR, BRL, and other currencies, exposing it to foreign exchange risk[74](index=74&type=chunk) - Hedging policies have been established to manage exchange rate fluctuation risk, with regular monitoring to mitigate related risks[76](index=76&type=chunk) [Contingent Liabilities](index=25&type=section&id=Contingent%20Liabilities) As of June 30, 2025, the company had no contingent liabilities - As of June 30, 2025, the company had no contingent liabilities[77](index=77&type=chunk) [Capital Expenditure](index=25&type=section&id=Capital%20Expenditure) Capital expenditure for H1 2025 was HKD 68.1 million, with HKD 68.0 million allocated to IBO projects Capital Expenditure | Item | H1 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | | :--- | :--- | :--- | | Investment in property, plant and equipment | 68,100 | 76,200 | | Of which for IBO projects | 68,000 | 75,900 | [Treasury Policy](index=25&type=section&id=Treasury%20Policy) The company implemented a treasury policy to control treasury management and financial resources, requiring sufficient cash and bank financing for daily operations and funding needs - A treasury policy has been implemented, requiring sufficient cash and cash equivalents and bank financing to fund daily operations and funding needs[79](index=79&type=chunk) [Significant Acquisitions and Disposals](index=25&type=section&id=Significant%20Acquisitions%20and%20Disposals) The company completed the sale of the second batch of equipment, valued at approximately RMB 660.8 million, to an associate of its controlling shareholder, constituting a very substantial disposal - The sale of the second batch of equipment, valued at approximately **RMB 660.8 million**, to an associate of the controlling shareholder has been completed[80](index=80&type=chunk) - The transaction under the equipment purchase agreement constitutes a connected transaction and a very substantial disposal[80](index=80&type=chunk) [Employees](index=25&type=section&id=Employees) As of June 30, 2025, the company had 401 employees, an increase from 2024, with remuneration based on performance, experience, and industry practice, and training provided Number of Employees | Metric | June 30, 2025 | December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Number of employees | 401 | 380 | +21 | - The company remunerates employees based on performance, experience, and industry practice, and provides internal and external training[81](index=81&type=chunk) [Other Information](index=26&type=section&id=Other%20Information) This section provides other important information for the reporting period, including interim dividend policy, post-reporting events, corporate governance, and account review [Interim Dividend](index=26&type=section&id=Interim%20Dividend) The Board resolved not to declare an interim dividend for the six months ended June 30, 2025 - The Board resolved not to declare an interim dividend for H1 2025[82](index=82&type=chunk) [Events After Reporting Period](index=26&type=section&id=Events%20After%20Reporting%20Period) There were no significant events after the reporting period up to the date of this announcement - There were no significant events after the reporting period up to the date of this announcement[83](index=83&type=chunk) [Corporate Governance](index=26&type=section&id=Corporate%20Governance) For H1 2025, the company complied with all applicable code provisions of the Corporate Governance Code set out in Appendix C1 to the Listing Rules - The company complied with all applicable code provisions of the Corporate Governance Code set out in Appendix C1 to the Listing Rules[84](index=84&type=chunk) [Standard Code for Securities Transactions by Directors](index=26&type=section&id=Standard%20Code%20for%20Securities%20Transactions%20by%20Directors) The company adopted the Standard Code as its code of conduct for directors' securities transactions and found no instances of non-compliance - The company adopted the Standard Code as its code of conduct for directors' securities transactions, with no instances of non-compliance found[85](index=85&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=26&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company%27s%20Listed%20Securities) For H1 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[86](index=86&type=chunk) [Review of Accounts](index=26&type=section&id=Review%20of%20Accounts) The company's audit committee reviewed the unaudited interim financial statements for the six months ended June 30, 2025 - The company's audit committee reviewed the unaudited interim financial statements for the six months ended June 30, 2025[87](index=87&type=chunk) [Publication of 2025 Interim Results and Interim Report](index=26&type=section&id=Publication%20of%202025%20Interim%20Results%20and%20Interim%20Report) This results announcement has been published on the company's website and HKEXnews website, with the 2025 interim report expected in September 2025 - This results announcement has been published on the company's website and HKEXnews website[88](index=88&type=chunk) - The 2025 interim report is expected to be published in September 2025[88](index=88&type=chunk) [Acknowledgement](index=27&type=section&id=Acknowledgement) The company extends its gratitude to shareholders, customers, suppliers, partners, management, and employees for their support and contributions - The company extends its gratitude to shareholders, customers, suppliers, partners, management, and employees for their support and contributions[89](index=89&type=chunk)

Interim Results Announcement This announcement presents Xiangzhong International Holdings Limited's unaudited consolidated interim results for the six months ended June 30, 2025, indicating an expanded loss compared to the prior year [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=2&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E6%90%8D%E7%9B%8A%E5%8F%8A%E5%85%B6%E4%BB%96%E5%85%A8%E9%9D%A2%E6%94%B6%E7%9B%8A%E8%A1%A8) For the six months ended June 30, 2025, the company's revenue decreased by 6.0%, while loss attributable to owners significantly expanded by 104.0% Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (For the six months ended June 30) | Indicator | 2025 (RMB '000) | 2024 (RMB '000) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 17,061 | 18,147 | -6.0% | | Cost of Services Provided | (14,412) | (14,715) | -2.1% | | Gross Profit | 2,649 | 3,432 | -22.8% | | Other Income and Losses, Net | 59 | 398 | -85.2% | | Selling and Marketing Expenses | (939) | (877) | +7.1% | | Administrative Expenses | (6,176) | (6,367) | -3.0% | | Finance Costs | (1,385) | (1,848) | -25.1% | | Loss Before Income Tax | (5,792) | (5,262) | +10.1% | | Income Tax Credit | 1,003 | 2,914 | -65.6% | | Loss and Total Comprehensive Expense for the Period Attributable to Owners of the Company | (4,789) | (2,348) | +104.0% | | Basic and Diluted Loss Per Share (RMB cents) | (1.10) | (0.55) | +100.0% | [Condensed Consolidated Statement of Financial Position](index=3&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81%E8%A1%A8) As of June 30, 2025, the company's total assets less current liabilities were RMB 185,807 thousand, a slight decrease from December 31, 2024, with net assets and total equity at RMB 182,029 thousand Condensed Consolidated Statement of Financial Position (As of June 30) | Indicator | June 30, 2025 (RMB '000) | December 31, 2024 (RMB '000) | | :--- | :--- | :--- | | **Non-current Assets** | | | | Property, Plant and Equipment | 94,353 | 94,045 | | Right-of-use Assets | 41,938 | 41,650 | | Prepayments for Property, Plant and Equipment | – | 4,190 | | Prepayments for Acquisition of a Subsidiary | – | 3,900 | | **Current Assets** | | | | Trade and Other Receivables and Prepayments | 1,304 | 1,628 | | Bank Balances and Cash | 120,329 | 120,913 | | **Current Liabilities** | | | | Trade and Other Payables and Accrued Expenses | 16,985 | 15,647 | | Contract Liabilities | 10,314 | 12,691 | | Lease Liabilities (Current) | 1,588 | 1,635 | | Borrowings (Current) | 43,230 | 45,230 | | **Non-current Liabilities** | | | | Lease Liabilities (Non-current) | 2,274 | 1,798 | | Deferred Tax Liabilities | 1,504 | 2,507 | | **Net Assets** | 182,029 | 186,818 | | **Total Equity** | 182,029 | 186,818 | - The company released its unaudited consolidated interim results for the six months ended June 30, 2025[3](index=3&type=chunk) Notes to the Condensed Consolidated Financial Statements This section details company information, basis of financial statement preparation, accounting standard application, revenue and expense breakdowns, balance sheet item changes, and share capital information, providing accounting and background context for understanding the interim results [Company Information](index=5&type=section&id=1.%20%E5%85%AC%E5%8F%B8%E8%B3%87%E6%96%99) Xiangzhong International Holdings Limited, incorporated in the Cayman Islands, primarily provides driving training services in China through its operating subsidiaries, and its shares are listed on the Stock Exchange's Main Board - The company was incorporated in the Cayman Islands on February 22, 2017, as an investment holding company[7](index=7&type=chunk) - Its principal operating subsidiaries provide driving training services in China[8](index=8&type=chunk) - The company's immediate and ultimate holding company is First Leap Holdings Limited, wholly owned by Mr Qi Xiangzhong[7](index=7&type=chunk) [Basis of Preparation](index=5&type=section&id=2.%20%E7%B7%A8%E8%A3%BD%E5%9F%BA%E6%BA%96) The condensed consolidated financial statements are prepared in accordance with HKAS 34 'Interim Financial Reporting' and the Listing Rules, on a historical cost basis, and are unaudited - The 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[9](index=9&type=chunk) - The condensed consolidated financial statements are prepared on a historical cost basis at the end of the reporting period and are unaudited[10](index=10&type=chunk)[11](index=11&type=chunk) [Application of New and Revised Hong Kong Financial Reporting Standards](index=6&type=section&id=3.%20%E6%8E%A1%E7%94%A8%E6%96%B0%E8%A8%82%E5%8F%8A%E7%B6%93%E4%BF%AE%E8%A8%82%E9%A6%99%E6%B8%AF%E8%B2%A1%E5%8B%99%E5%A0%B1%E5%91%8A%E6%BA%96%E5%89%87) The Group has first applied amendments to HKFRS effective January 1, 2025, with no significant impact on financial position or performance, and is evaluating the future impact of new standards issued but not yet effective - During the interim period, the Group first applied HKAS 21 (Amendment) 'The Effects of Changes in Foreign Exchange Rates – Lack of Exchangeability', which had no significant impact on financial position or performance[12](index=12&type=chunk) - New and revised HKFRSs issued but not yet effective include HKFRS 9, 7, 18, 19, etc, with effective dates ranging from January 1, 2026, to be determined[13](index=13&type=chunk) [Revenue](index=7&type=section&id=4.%20%E6%94%B6%E7%9B%8A) The Group's revenue primarily derives from driving training services, with total revenue for the six months ended June 30, 2025, at RMB 17,061 thousand, a 6.0% year-on-year decrease, driven by significant growth in standard course revenue and a sharp decline in advanced course revenue, with large vehicles remaining the main revenue source but with a reduced proportion - Revenue refers to income from driving training services, recognized over time[14](index=14&type=chunk) Revenue Analysis by Course Type (RMB '000) | Course Type | June 30, 2025 | June 30, 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Standard Courses | 13,428 | 10,263 | +30.8% | | Advanced Courses | 2,899 | 7,713 | -62.4% | | Additional Training Fees | 734 | 171 | +329.2% | | **Total** | **17,061** | **18,147** | **-6.0%** | Revenue Analysis by Vehicle Type (RMB '000) | Vehicle Type | June 30, 2025 | June 30, 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Large Vehicles | 11,883 | 13,607 | -12.7% | | Small Vehicles | 5,178 | 4,540 | +14.1% | | **Total** | **17,061** | **18,147** | **-6.0%** | [Segment Information](index=8&type=section&id=5.%20%E5%88%86%E9%83%A8%E8%B3%87%E6%96%99) The Group primarily engages in providing driving training services, considered a single reportable and operating segment, with all revenue and non-current assets originating from China, and no single customer accounting for over 10% of total revenue - The Group's operations are considered a single reportable and operating segment, namely the provision of driving training services[16](index=16&type=chunk) - All of the Group's revenue is derived from China, and all non-current assets are located in China, thus no geographical segment information is presented[17](index=17&type=chunk) - During both periods, no individual customer accounted for more than 10% of the Group's total revenue[18](index=18&type=chunk) [Other Income and Losses, Net](index=8&type=section&id=6.%20%E5%85%B6%E4%BB%96%E6%94%B6%E5%85%A5%E5%8F%8A%E虧%E6%90%8D%E6%B7%A8%E9%A1%8D) For the six months ended June 30, 2025, other income and losses, net, significantly decreased by 85.2% to RMB 59 thousand, primarily due to increased losses from the disposal of property, plant and equipment Other Income and Losses, Net (RMB '000) | Item | June 30, 2025 | June 30, 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Interest Income | 58 | 201 | -71.1% | | Income from Student Cancellation of Driving Courses Due | 188 | 231 | -18.6% | | Others | 116 | 26 | +346.2% | | Loss on Disposal of Property, Plant and Equipment | (300) | (41) | +631.7% | | Exchange Loss, Net | (3) | (19) | -84.2% | | **Total** | **59** | **398** | **-85.2%** | [Finance Costs](index=8&type=section&id=7.%20%E8%B2%A1%E5%8B%99%E8%B2%BB%E7%94%A8) For the six months ended June 30, 2025, finance costs decreased by 25.1% to RMB 1,385 thousand, primarily due to reduced interest on bank loans Finance Costs (RMB '000) | Item | June 30, 2025 | June 30, 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Interest on Bank Loans | 1,325 | 1,776 | -25.4% | | Interest on Lease Liabilities | 60 | 72 | -16.7% | | **Total** | **1,385** | **1,848** | **-25.1%** | [Loss Before Income Tax](index=9&type=section&id=8.%20%E9%99%A4%E6%89%80%E5%BE%97%E7%A8%85%E5%89%8D%E虧%E6%90%8D) For the six months ended June 30, 2025, loss before income tax was RMB 5,792 thousand, primarily impacted by staff costs, depreciation, and fuel expenses Key Components of Loss Before Income Tax (RMB '000) | Item | June 30, 2025 | June 30, 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Directors' Remuneration | 614 | 758 | -19.0% | | Other Staff Costs – Salaries and Other Allowances | 5,687 | 6,005 | -5.3% | | Retirement Benefit Scheme Contributions | 649 | 537 | +20.9% | | Auditor's Remuneration | 10 | 10 | 0.0% | | Depreciation of Property, Plant and Equipment | 7,707 | 5,535 | +39.2% | | Depreciation of Right-of-use Assets | 1,009 | 1,426 | -29.2% | | Fuel Expenses | 1,984 | 2,894 | -31.5% | [Income Tax Credit](index=9&type=section&id=9.%20%E6%89%80%E5%BE%97%E7%A8%85%E6%8A%B5%E5%85%8D) For the six months ended June 30, 2025, income tax credit significantly decreased by 65.6% to RMB 1,003 thousand, mainly due to prior year's over-provision recognized in the same period of 2024, with no income tax payable in Cayman Islands, BVI, Hong Kong, and zero PRC corporate income tax provision Income Tax Credit (RMB '000) | Item | June 30, 2025 | June 30, 2024 | Change (%) | | :--- | :--- | :--- | :--- | | PRC Corporate Income Tax – Over-provision in Prior Years | – | (2,874) | -100.0% | | Deferred Tax Credit | (1,003) | (40) | +2407.5% | | **Total** | **(1,003)** | **(2,914)** | **-65.6%** | - For the six months ended June 30, 2025, no PRC corporate income tax provision was recognized in the consolidated financial statements as the Group had no taxable profits during the period[23](index=23&type=chunk) [Dividends](index=10&type=section&id=10.%20%E8%82%A1%E6%81%AF) For the interim period ended June 30, 2025, the company neither paid, declared, nor proposed any dividends - No dividends have been paid/declared or proposed to ordinary shareholders of the company during the interim period and since the end of the reporting period[24](index=24&type=chunk) [Loss Per Share](index=10&type=section&id=11.%20%E6%AF%8F%E8%82%A1%E虧%E6%90%8D) For the six months ended June 30, 2025, basic and diluted loss per share expanded to RMB 1.10 cents, up from RMB 0.55 cents in the same period of 2024, primarily due to increased loss for the period Loss Per Share Calculation (RMB '000 and Number of Shares) | Indicator | June 30, 2025 | June 30, 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Loss for the Period Attributable to Owners of the Company Used in Basic Loss Per Share Calculation | 4,789 | 2,348 | +104.0% | | Weighted Average Number of Ordinary Shares Used in Basic Loss Per Share Calculation | 435,958,192 | 425,740,532 | +2.4% | | Basic and Diluted (RMB cents) | (1.10) | (0.55) | +100.0% | - As of June 30, 2025 and 2024, there were no outstanding potential ordinary shares[26](index=26&type=chunk) [Property, Plant and Equipment](index=11&type=section&id=12.%20%E7%89%A9%E6%A5%AD%E3%80%81%E5%BB%A0%E6%88%BF%E5%8F%8A%E8%A8%AD%E5%82%99) As of June 30, 2025, the carrying amount of property, plant and equipment was RMB 94,353 thousand, a slight increase from December 31, 2024, with additions of RMB 4,611 thousand and depreciation provision of RMB 7,707 thousand during the period Carrying Amount of Property, Plant and Equipment (RMB '000) | Item | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :--- | :--- | :--- | | Buildings | 28,870 | 30,125 | | Leasehold Improvements | 51,117 | 47,532 | | Equipment | 811 | 2,019 | | Furniture and Fixtures | 470 | 401 | | Office Equipment | 5,352 | 5,529 | | Motor Vehicles | 7,733 | 8,439 | | **Total** | **94,353** | **94,045** | - For the six months ended June 30, 2025, additions to property, plant and equipment amounted to **RMB 4,611 thousand**[27](index=27&type=chunk) - For the six months ended June 30, 2025, depreciation provision for the period was **RMB 7,707 thousand**[27](index=27&type=chunk) [Right-of-use Assets](index=12&type=section&id=13.%20%E4%BD%BF%E7%94%A8%E6%AC%8A%E8%B3%87%E7%94%A2) As of June 30, 2025, the carrying amount of right-of-use assets was RMB 41,938 thousand, slightly higher than December 31, 2024, with all motor vehicle right-of-use assets under hire purchase arrangements with purchase options Carrying Amount of Right-of-use Assets (RMB '000) | Item | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :--- | :--- | :--- | | Leasehold Land | 37,322 | 38,056 | | Buildings | – | – | | Motor Vehicles | 4,616 | 3,594 | | **Total** | **41,938** | **41,650** | - As of June 30, 2025 and December 31, 2024, all motor vehicles within right-of-use assets were under hire purchase arrangements with purchase options[28](index=28&type=chunk) [Trade and Other Receivables and Prepayments](index=13&type=section&id=14.%20%E8%B2%BF%E6%98%93%E5%8F%8A%E5%85%B6%E4%BB%96%E6%87%89%E6%94%B6%E6%AC%BE%E9%A0%85%E5%8F%8A%E9%A0%90%E4%BB%98%E6%AC%BE%E9%A0%85) As of June 30, 2025, the current portion of trade and other receivables and prepayments was RMB 1,304 thousand, a decrease from RMB 1,628 thousand on December 31, 2024, with trade receivables primarily aged 0 to 30 days Trade and Other Receivables and Prepayments (RMB '000) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Trade Receivables | 119 | 67 | | Other Receivables (Net of Expected Credit Losses) | 962 | 201 | | Prepayments | 223 | 9,450 | | **Total Current Portion** | **1,304** | **1,628** | - The Group's payment methods for driving training services to its customers are primarily cash and online payment platforms; generally, course enrollment fees are pre-billed, and no credit period is granted to customers[29](index=29&type=chunk) - As of December 31, 2024, the non-current portion of prepayments primarily consisted of approximately RMB 3,900,000 for the acquisition of a subsidiary for a new driving school and approximately RMB 4,190,000 for renovation expenses for the new driving school's training grounds and interior decoration of the proposed acquired subsidiary, with renovations completed in March 2025[29](index=29&type=chunk) [Trade and Other Payables and Accrued Expenses](index=14&type=section&id=15.%20%E8%B2%BF%E6%98%93%E5%8F%8A%E5%85%B6%E4%BB%96%E6%87%89%E4%BB%98%E6%AC%BE%E9%A0%85%E5%8F%8A%E6%87%89%E8%A8%88%E8%B2%BB%E7%94%A8) As of June 30, 2025, total trade and other payables and accrued expenses were RMB 16,985 thousand, an increase from RMB 15,647 thousand on December 31, 2024, with trade payables generally settled within 30 days Trade and Other Payables and Accrued Expenses (RMB '000) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Trade Payables | 1,415 | 1,158 | | Construction Costs Payable | 2,394 | 3,104 | | Accrued Salaries and Other Staff Costs | 3,699 | 2,675 | | Accrued Directors' Remuneration | 3,176 | 2,756 | | Examination Fees Payable | 1,066 | 1,139 | | Other Taxes Payable | 1,124 | 1,167 | | Other Payables | 4,111 | 3,648 | | **Total** | **16,985** | **15,647** | - No credit period is granted by trade creditors. Trade payables are generally settled within 30 days from the invoice date[30](index=30&type=chunk) [Lease Liabilities](index=15&type=section&id=16.%20%E7%A7%9F%E8%B3%83%E8%B2%A0%E5%82%B5) As of June 30, 2025, the present value of lease liabilities was RMB 3,862 thousand, with RMB 1,588 thousand classified as current liabilities, and the weighted average incremental borrowing rate ranging from 5.4% to 12.8% Present Value of Lease Liabilities (RMB '000) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Present Value of Lease Liabilities | 3,862 | 3,433 | | Less: Amounts Due for Settlement Within 12 Months from the End of the Reporting Period (Presented as Current Liabilities) | (1,588) | (1,635) | | **Amounts Due for Settlement After 12 Months from the End of the Reporting Period** | **2,274** | **1,798** | - The weighted average incremental borrowing rate applicable to lease liabilities ranged from **5.4% to 12.8%**[32](index=32&type=chunk) [Deferred Tax Liabilities / (Assets)](index=15&type=section&id=17.%20%E9%81%9E%E5%BB%B6%E7%A8%85%E9%A0%85%E8%B2%A0%E5%82%B5%E2%88%95%EF%BC%88%E8%B3%87%E7%94%A2%EF%BC%89) As of June 30, 2025, total deferred tax liabilities were RMB 1,504 thousand, a decrease from RMB 2,507 thousand on December 31, 2024, primarily due to amounts deducted from profit or loss Key Components of Deferred Tax Liabilities / (Assets) (RMB '000) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Depreciation of Property, Plant and Equipment | 297 | 332 | | Right-of-use Assets | – | – | | Lease Liabilities | (318) | (348) | | Temporary Differences on Capitalization of Interest | – | 343 | | Deductible Temporary Differences | 1,379 | 1,452 | | Revenue Recognition | 2,883 | 2,649 | | Losses | (2,737) | (1,921) | | **Total** | **1,504** | **2,507** | - For the six months ended June 30, 2025, deferred tax deducted from / (credited to) profit or loss was **RMB 1,003 thousand**[33](index=33&type=chunk) [Share Capital](index=16&type=section&id=18.%20%E8%82%A1%E6%9C%AC) As of June 30, 2025, the company's issued and fully paid share capital comprised 435,958,192 shares with a par value of HKD 0.01 each, totaling approximately RMB 3,939 thousand, remaining unchanged since the completion of the rights issue on March 20, 2024 Share Capital Composition (RMB '000 and Number of Shares) | Item | Number of Shares | Amount (RMB '000) | | :--- | :--- | :--- | | Authorized Share Capital (Ordinary Shares of HKD 0.01 each) | 10,000,000,000 | 90,179 | | Issued and Fully Paid Share Capital (As of June 30, 2025) | 435,958,192 | 3,939 | - On March 20, 2024, a total of 35,958,192 rights shares were issued and allotted at **HKD 0.20** per rights share under the rights issue, raising net proceeds of approximately **HKD 6,062,000**[34](index=34&type=chunk) Business Review This section reviews the company's driving training services in Zhumadian City, Henan Province, China, covering its operating subsidiaries, course types, market competition, student enrollment, revenue composition, and future development strategies, with a focus on market consolidation and expansion into new training areas [Company Profile and Services](index=17&type=section&id=%E5%85%AC%E5%8F%B8%E6%A6%82%E6%B3%81%E8%88%87%E6%9C%8D%E5%8B%99) The company is a driving training service provider in Zhumadian City, Henan Province, China, offering standard and advanced courses for small and large vehicles through Shunda Driving School, Tongtai Driving School, Kaiyuan Driving School, and Xincai Driving School - The company is a driving training service provider in Zhumadian City, Henan Province, China, primarily offering driving training services through Shunda Driving School and Tongtai Driving School[35](index=35&type=chunk) - Kaiyuan Driving School and Xincai Driving School were acquired in November 2024 and March 2025, respectively, to mitigate intense competition and capture market share[35](index=35&type=chunk)[37](index=37&type=chunk) - Two types of driving training courses are offered: standard courses (lower fees, fewer training hours) and advanced courses (training hours equivalent to minimum requirements, including holiday and weekend courses, economy courses, and VIP courses)[36](index=36&type=chunk) [Market Environment and Competition Strategy](index=17&type=section&id=%E5%B8%82%E5%A0%B4%E7%92%B0%E5%A2%83%E8%88%87%E7%AB%B6%E7%88%AD%E7%AD%96%E7%95%A5) The driving training services market faces intensified competition due to worsening logistics market conditions from US-China trade tensions and lower entry barriers for small vehicle driving schools into large vehicle training, adversely affecting the company's financial performance, which it addresses by acquiring other driving schools - Ongoing US-China trade tensions continue to worsen market conditions in the logistics industry, intensifying competition in the driving training services market[37](index=37&type=chunk) - The lowered entry barrier for existing small vehicle driving schools into the large vehicle driving training services industry further intensifies market competition[37](index=37&type=chunk) - To mitigate intense competition and capture market share, the company adopted an operating strategy of acquiring other driving schools in Zhumadian City and surrounding areas, purchasing Kaiyuan Driving School and Xincai Driving School in November 2024 and March 2025, respectively[37](index=37&type=chunk) [Course Enrollment and Student Number Analysis](index=18&type=section&id=%E8%AA%B2%E7%A8%8B%E5%A0%B1%E5%90%8D%E8%88%87%E5%AD%B8%E5%93%A1%E4%BA%BA%E6%95%B8%E5%88%86%E6%9E%90) For the six months ended June 30, 2025, total course enrollments increased by 31.6% year-on-year to 6,232, and total students grew by 31.4% to 7,188, with standard course enrollments surging by 92.2% while advanced course enrollments plummeted by 96.1%, reflecting market strategy adjustments and intensified competition - For the six months ended June 30, 2025, total course enrollments increased by **31.6%** from 4,736 to **6,232**[38](index=38&type=chunk) - Total enrollments for large and small vehicle standard courses increased by approximately **92.2%** to **6,173**, primarily due to course redesign, sales and marketing efforts, and the acquisition of new driving schools[39](index=39&type=chunk) - Total enrollments for large and small vehicle advanced courses decreased by approximately **96.1%** to **59**, due to worsening market conditions in the logistics industry and intensified competition[39](index=39&type=chunk) Course Enrollment Details (By Course Type) | Course Type | June 30, 2025 (Number of Persons) | June 30, 2024 (Number of Persons) | Change (%) | | :--- | :--- | :--- | :--- | | Total Standard Courses | 6,173 | 3,211 | +92.2% | | Total Advanced Courses | 59 | 1,525 | -96.1% | | **Total** | **6,232** | **4,736** | **+31.6%** | | Large Vehicles | 1,918 | 1,696 | +13.1% | | Small Vehicles | 4,314 | 3,040 | +41.9% | [Revenue and Training Hours Analysis](index=20&type=section&id=%E6%94%B6%E7%9B%8A%E8%88%87%E5%9F%B9%E8%A8%93%E6%99%82%E6%95%B8%E5%88%86%E6%9E%90) Despite a significant increase in student numbers, total revenue decreased by 6.0% to RMB 17.1 million, primarily due to reduced actual training hours; large vehicles remain the main revenue source, but advanced course revenue share significantly declined, while standard course revenue share increased - Total revenue was approximately **RMB 17.1 million**, a decrease of approximately **6.0%**, despite a significant increase of approximately **31.4%** in enrolled students for driving courses[41](index=41&type=chunk) - The overall decrease in revenue was due to a reduction in actual training hours for students, which offset the positive impact of increased student numbers and higher average course fees per hour for standard courses[42](index=42&type=chunk) - The provision of large vehicle driving training services continued to be the primary source of revenue, accounting for approximately **69.6%** of total revenue (H1 2024: 75.0%)[42](index=42&type=chunk) Revenue Details (By Vehicle Type and Driving Course Type) | Item | June 30, 2025 (RMB '000) | June 30, 2024 (RMB '000) | Change (%) | | :--- | :--- | :--- | :--- | | **Large Vehicles** | | | | | – Standard Courses | 10,173 | 9,897 | +2.8% | | – Advanced Courses | 1,516 | 3,628 | -58.2% | | – Additional Training Services | 194 | 82 | +136.6% | | **Subtotal** | **11,883** | **13,607** | **-12.7%** | | **Small Vehicles** | | | | | – Standard Courses | 3,255 | 366 | +789.3% | | – Advanced Courses | 1,383 | 4,085 | -66.2% | | – Additional Training Services | 540 | 89 | +506.7% | | **Subtotal** | **5,178** | **4,540** | **+14.1%** | | **Total** | **17,061** | **18,147** | **-6.0%** | [Industry Trends and Future Outlook](index=22&type=section&id=%E8%A1%8C%E6%A5%AD%E8%B6%A8%E5%8B%A2%E8%88%87%E6%9C%AA%E4%BE%86%E5%B1%95%E6%9C%9B) The driving training market faces intensifying competition and overall price declines, yet the Group's enrollment has increased; the company plans to seize market consolidation opportunities, explore new areas like drone training for transformation and upgrading - The Chinese government's relaxed regulatory requirements for driving school establishment have intensified competition in the driving training market, leading to a continuous downward trend in overall industry prices[43](index=43&type=chunk) - Despite intensified industry competition, the Group's enrollment numbers for both large and small vehicles increased in H1 2025 compared to H1 2024[43](index=43&type=chunk) - With the gradual rise of the emerging low-altitude economy, several qualified driving schools in the industry are utilizing existing venues to enter the field of drone training, opening a new direction for driving school transformation and upgrading[43](index=43&type=chunk) [Key Initiatives for H2 2025](index=22&type=section&id=2025%E5%B9%B4%E4%B8%8B%E5%8D%8A%E5%B9%B4%E9%87%8D%E9%BB%9E%E5%B7%A5%E4%BD%9C) In H2 2025, the company will focus on internal optimization for cost reduction and efficiency (intelligent teaching, online marketing), seize market consolidation opportunities to build regional leadership, plan to enter drone training, and actively seek multi-regional joint ventures to enhance profitability - Continue internal optimization for cost reduction and efficiency, including intelligent teaching and expanding online marketing, gradually achieving cross-regional and cross-temporal online marketing promotion methods[44](index=44&type=chunk) - Plan to enter the drone training field as a new area of vocational education and training, actively preparing relevant procedures to lay the groundwork for new revenue growth points[46](index=46&type=chunk) - Utilize industry troughs to implement regional joint ventures to maintain healthy market prices, stable enrollment, and increase market share[46](index=46&type=chunk) - Actively seek multi-regional cooperation, especially in northwestern regions like Xinjiang and Gansu, and areas with slightly higher driving school prices like Hunan and Guangxi, to achieve breakthroughs in high-profit regional markets outside the core market[46](index=46&type=chunk) Management Discussion and Analysis This section provides an in-depth analysis of the company's financial performance for the six months ended June 30, 2025, including changes and key reasons for revenue, costs, gross profit, various expenses, net loss, liquidity, gearing ratio, and employee benefits [Financial Performance Overview](index=24&type=section&id=1.%20%E6%A6%82%E8%A7%88) For the six months ended June 30, 2025, the company's overall financial performance deteriorated, with total revenue down 6.0%, gross profit down 22.8%, loss before income tax up 10.1%, and net loss attributable to owners significantly increasing to RMB 4.8 million, with a net loss margin of 28.1% Financial Performance Overview (RMB million) | Indicator | June 30, 2025 | June 30, 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Total Revenue | 17.1 | 18.1 | -6.0% | | Gross Profit | 2.6 | 3.4 | -22.8% | | Gross Profit Margin | 15.5% | 18.9% | -3.4pp | | Loss Before Income Tax | (5.8) | (5.3) | +10.1% | | Net Loss Attributable to Owners of the Company | (4.8) | (2.3) | +108.7% | | Net Loss Margin | 28.1% | 12.9% | +15.2pp | - The increase in net loss attributable to owners was primarily due to the income tax credit recognized from over-provision of income tax in prior years during the six months ended June 30, 2024, leading to a reduction in income tax credit for the six months ended June 30, 2025[47](index=47&type=chunk) [Revenue Analysis](index=25&type=section&id=2.%20%E6%94%B6%E7%9B%8A) Total revenue decreased by 6.0% to RMB 17.1 million, primarily due to a 12.7% (RMB 1.7 million) reduction in large vehicle driving training services revenue, despite a 14.1% (RMB 0.6 million) increase in small vehicle driving training services revenue; the revenue decline is attributed to reduced actual training hours, influenced by market competition and rising demand for standard courses - Overall revenue decreased by approximately **6.0%** to approximately **RMB 17.1 million**, primarily due to a reduction of approximately **RMB 1.7 million** in revenue from large vehicle driving training services[48](index=48&type=chunk) - Revenue from large vehicle driving training services decreased by **12.7%**, mainly due to a reduction in actual training hours for large vehicle students, despite an increase in the number of students enrolled in large vehicle standard courses[49](index=49&type=chunk) - Revenue from small vehicle driving training services increased by **14.1%**, primarily due to a significant increase in students enrolled in small vehicle standard courses, leading to higher average course fees per hour[50](index=50&type=chunk) [Cost of Services Provided](index=26&type=section&id=3.%20%E5%B7%B2%E6%8F%90%E4%BE%9B%E6%9C%8D%E5%8B%99%E6%88%90%E6%9C%AC) Cost of services provided decreased by 2.1% to RMB 14.4 million, primarily due to reduced employee benefits and fuel expenses, benefiting from driving simulator application and new energy vehicle purchases; however, depreciation expenses rose due to increased training venues and vehicles - Cost of services provided decreased by approximately **2.1%** from approximately **RMB 14.7 million** to approximately **RMB 14.4 million**[51](index=51&type=chunk) - Employee benefits expenses decreased by **7.9%** to approximately **RMB 4.0 million**, primarily due to reduced salaries paid to driving instructors and other support staff, consistent with fewer actual training hours resulting from driving simulator application[52](index=52&type=chunk) - Fuel expenses decreased by **31.4%** to approximately **RMB 2.0 million**, attributed to reduced actual training hours for students, the application of driving simulators, and the purchase of new energy small training vehicles[52](index=52&type=chunk) - Depreciation of property, plant and equipment and right-of-use assets increased by **18.5%** to approximately **RMB 7.1 million**, due to increased fixed depreciation expenses for training venues and vehicles, and amortization expenses for right-of-use assets[52](index=52&type=chunk) [Gross Profit Analysis](index=27&type=section&id=4.%20%E6%AF%9B%E5%88%A9) Overall gross profit decreased by 22.8% to RMB 2.6 million, with gross profit margin down 3.4 percentage points to 15.5%, primarily due to reduced actual training hours and increased fixed depreciation; large vehicle gross profit and margin significantly declined, while small vehicle gross profit and margin substantially rose, benefiting from increased standard course students, lower employee benefits, and new energy vehicle adoption - Overall gross profit decreased by **22.8%** to approximately **RMB 2.6 million**, with gross profit margin decreasing by **3.4 percentage points** from 18.9% to **15.5%**[53](index=53&type=chunk) - Gross profit from large vehicle driving training services decreased by **64.6%** to approximately **RMB 0.8 million**, with gross profit margin declining by **10.1 percentage points** to **7.0%**, primarily due to reduced actual training hours and increased fixed depreciation expenses[54](index=54&type=chunk) - Gross profit from small vehicle driving training services increased by **65.9%** to approximately **RMB 1.8 million**, with gross profit margin increasing by **11.0 percentage points** to **35.2%**, primarily due to a significant increase in students for higher-margin standard courses, lower employee benefits, and the application of new energy training vehicles[55](index=55&type=chunk) [Other Income and Losses, Net](index=28&type=section&id=5.%20%E5%85%B6%E4%BB%96%E6%94%B6%E5%85%A5%E5%8F%8A%E虧%E6%90%8D%EF%BC%8C%E6%B7%A8%E9%A1%8D) Other income and losses, net, significantly decreased by 85.2% to RMB 0.1 million, primarily due to a substantial increase in losses from the disposal of training vehicles - Other income and losses, net, decreased by approximately **85.2%** to approximately **RMB 0.1 million**[56](index=56&type=chunk) - The main reason was an increase in losses from the disposal of large and small vehicle training vehicles from approximately **RMB 41,000** to approximately **RMB 0.3 million**[56](index=56&type=chunk) [Selling and Marketing Expenses](index=28&type=section&id=6.%20%E9%8A%B7%E5%94%AE%E5%8F%8A%E7%87%9F%E9%8A%B7%E8%B2%BB%E7%94%A8) For the six months ended June 30, 2025, selling and marketing expenses remained stable at approximately RMB 0.9 million - Selling and marketing expenses remained stable at approximately **RMB 0.9 million**[57](index=57&type=chunk) [Administrative Expenses](index=28&type=section&id=7.%20%E8%A1%8C%E6%94%BF%E8%B2%BB%E7%94%A8) Administrative expenses decreased by 3.0% to RMB 6.2 million, primarily due to reduced employee benefits paid to administrative staff - Administrative expenses decreased by approximately **3.0%** to approximately **RMB 6.2 million**[58](index=58&type=chunk) - Primarily due to a reduction in employee benefits paid to administrative staff[58](index=58&type=chunk) [Finance Costs](index=28&type=section&id=8.%20%E8%B2%A1%E5%8B%99%E8%B2%BB%E7%94%A8) Finance costs decreased by 25.1% to RMB 1.4 million, primarily due to the repayment of bank borrowings during the period - Finance costs decreased by approximately **25.1%** to approximately **RMB 1.4 million**[59](index=59&type=chunk) - Primarily due to the repayment of bank borrowings during the period[59](index=59&type=chunk) [Income Tax Credit](index=28&type=section&id=9.%20%E6%89%80%E5%BE%97%E7%A8%85%E6%8A%B5%E5%85%8D) Income tax credit significantly decreased by 65.6% to RMB 1.0 million, primarily due to a reduction in the over-provision of income tax from prior years recognized in the same period of 2024 - Income tax credit decreased by approximately **65.6%** to approximately **RMB 1.0 million**[60](index=60&type=chunk) - Primarily due to the recognition of an over-provision of income tax from prior years of approximately **RMB 2.9 million** for the six months ended June 30, 2024[60](index=60&type=chunk) [Loss and Total Comprehensive Expense for the Period](index=29&type=section&id=10.%20%E6%9C%9F%E5%85%A7%E虧%E6%90%8D%E5%8F%8A%E5%85%A8%E9%9D%A2%E9%96%8B%E6%94%AF%E7%B8%BD%E9%A1%8D) For the six months ended June 30, 2025, loss before income tax was RMB 5.8 million, and net loss attributable to owners expanded to RMB 4.8 million, with a net loss margin of 28.1%, primarily impacted by reduced income tax credit - For the six months ended June 30, 2025, loss before income tax was approximately **RMB 5.8 million** (H1 2024: approximately RMB 5.3 million)[61](index=61&type=chunk) - Net loss attributable to owners of the company was approximately **RMB 4.8 million** (H1 2024: approximately RMB 2.3 million), with a net loss margin of **28.1%**[61](index=61&type=chunk) - The expanded net loss was primarily due to the income tax credit recognized for the six months ended June 30, 2024[61](index=61&type=chunk) [Liquidity, Capital Resources and Borrowings](index=29&type=section&id=11.%20%E6%B5%81%E5%8B%95%E8%B3%87%E9%87%91%E5%8F%8A%E8%B3%87%E9%87%91%E4%BE%86%E6%BA%90%E5%8F%8A%E5%80%9F%E6%AC%BE) As of June 30, 2025, bank balances and cash slightly decreased to RMB 120.3 million; net current assets were RMB 49.5 million, with a current ratio of 1.69; total interest-bearing borrowings decreased to RMB 43.2 million, mainly due to bank loan repayments - Bank balances and cash decreased from approximately **RMB 120.9 million** as of December 31, 2024, to approximately **RMB 120.3 million** as of June 30, 2025, primarily due to cash inflows from operating activities being offset by cash outflows from investing and financing activities during the period[62](index=62&type=chunk) Liquidity Indicators (RMB million) | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Current Assets | 121.6 | 122.5 | | Current Liabilities | 72.1 | 75.2 | | Current Ratio | 1.69 | 1.63 | | Total Interest-bearing Borrowings (Repayable within one year) | 43.2 | 45.2 | - The decrease in interest-bearing borrowings was primarily due to the repayment of bank loans in June 2025[63](index=63&type=chunk) [Gearing Ratio](index=30&type=section&id=12.%20%E8%B3%87%E7%94%A2%E8%B2%A0%E5%82%B5%E7%8E%87) As of June 30, 2025, the Group's gearing ratio was approximately 0.26 times, consistent with December 31, 2024 - As of June 30, 2025, the Group's gearing ratio was approximately **0.26 times** (December 31, 2024: 0.26 times)[64](index=64&type=chunk) [Material Investments, Acquisitions and Disposals](index=30&type=section&id=13.%20%E9%87%8D%E5%A4%A7%E6%8A%95%E8%B3%87) For the six months ended June 30, 2025, the Group made no material investments, acquisitions, or disposals - For the six months ended June 30, 2025, the Group made no material investments[65](index=65&type=chunk) - For the six months ended June 30, 2025, the Group made no material acquisitions or disposals[66](index=66&type=chunk) [Borrowings and Pledged Assets](index=30&type=section&id=15.%20%E5%80%9F%E6%AC%BE%E5%8F%8A%E8%B3%87%E7%94%A2%E6%8A%B5%E6%8A%BC) As of June 30, 2025, the Group's total interest-bearing borrowings were approximately RMB 43.2 million, all repayable within one year and bearing fixed interest rates, secured and pledged by prepaid lease payments for land, right-of-use assets, office buildings, and operating rights of certain subsidiaries - As of June 30, 2025, the Group's total interest-bearing borrowings were approximately **RMB 43.2 million**, repayable within one year and bearing fixed interest rates[67](index=67&type=chunk) - The borrowings are secured and pledged by certain prepaid lease payments for land/right-of-use assets, office buildings, and the operating rights of certain subsidiaries of the Group[67](index=67&type=chunk) [Contingent Liabilities](index=30&type=section&id=16.%20%E6%88%96%E7%84%B6%E8%B2%A0%E5%82%B5) As of June 30, 2025, the Group had no material contingent liabilities or guarantees, nor was it involved in any material claims, litigation, or arbitration - As of June 30, 2025, the Group had no material contingent liabilities or guarantees[68](index=68&type=chunk) - No member of the Group was involved in any material claims, litigation, or arbitration[68](index=68&type=chunk) [Foreign Exchange Risk](index=31&type=section&id=17.%20%E5%A4%96%E5%8C%AF%E9%A2%A8%E9%9A%AA) The Group's foreign currency risk primarily relates to bank balances and other payables denominated in HKD; the company currently has no foreign currency hedging policy, but management monitors and considers hedging when necessary - As of June 30, 2025, the Group's foreign currency risk primarily related to certain bank balances and other payables denominated in HKD[69](index=69&type=chunk) - The Group currently has no foreign currency hedging policy. However, management monitors foreign currency risk and will consider hedging when necessary[69](index=69&type=chunk) [Employee Benefits](index=31&type=section&id=18.%20%E5%83%B1%E5%93%A1%E7%A6%8F%E5%88%A9) As of June 30, 2025, the number of employees increased to 171; employee remuneration is determined based on industry practice, experience, and performance, with participation in local government social security schemes; total employee benefits expense was RMB 7.0 million - As of June 30, 2025, the Group had **171 employees**, an increase from 158 employees as of December 31, 2024[70](index=70&type=chunk) - Employee remuneration is determined based on current industry practice and employees' work experience and performance. The company participates in various employee social security schemes managed by local governments in accordance with PRC laws and regulations[70](index=70&type=chunk) Number of Employees by Function (June 30, 2025) | Function | Number of Employees | Percentage of Total (%) | | :--- | :--- | :--- | | Directors | 6 | 3.5 | | Driving Instructors | 85 | 49.7 | | Sales and Marketing | 21 | 12.3 | | Finance and Accounting | 6 | 3.5 | | Academic Affairs Office | 15 | 8.8 | | Administration | 35 | 20.5 | | Vehicle Management | 3 | 1.7 | | **Total** | **171** | **100.0** | - The Group's total employee benefits expense for the six months ended June 30, 2025, was approximately **RMB 7.0 million**[70](index=70&type=chunk) Other Information This section provides non-financial information including significant events after the reporting date, use of IPO proceeds, interim dividend policy, trading of listed securities, corporate governance, and audit committee review [Events After Reporting Period](index=32&type=section&id=%E6%9C%9F%E5%BE%8C%E4%BA%8B%E9%A0%85) As of the date of this announcement, no significant events have occurred after June 30, 2025, that would materially affect the Group's operations and financial results - As of the date of this announcement, no significant events have occurred after June 30, 2025, that would materially affect the Group's operations and financial results[73](index=73&type=chunk) [Use of Proceeds](index=32&type=section&id=%E6%89%80%E5%BE%97%E6%AC%BE%E9%A0%85%E7%94%A8%E9%80%94) Net proceeds from the IPO were approximately HKD 108.4 million, with approximately HKD 45.5 million utilized as of June 30, 2025; the company plans to continue acquiring land and constructing training venues but has been unable to identify suitable plots due to the pandemic, and will closely monitor the business environment to consider alternative uses - Net proceeds from the initial public offering were approximately **HKD 108.4 million**[74](index=74&type=chunk) Use of IPO Proceeds (HKD '000) | Intended Use | Net Proceeds from IPO | Utilized as of June 30, 2025 | Unutilized Amount as of June 30, 2025 | Expected Timeline for Intended Use | | :--- | :--- | :--- | :--- | :--- | | Acquisition of a Land Plot | 49,547 | – | 49,547 | Before December 31, 2025 | | Construction of Training Venues | 13,333 | – | 13,333 | Before December 31, 2025 | | Purchase of Training Vehicles | 10,517 | 10,517 | – | Completed | | Costs for Recruiting and Training 40 New Driving Instructors | 10,408 | 10,408 | – | Completed | | Repayment of Bank Loans | 13,769 | 13,769 | – | Completed | | Working Capital and General Corporate Purposes | 10,844 | 10,844 | – | Completed | | **Total** | **108,418** | **45,538** | **62,880** | | - The company currently plans to increase its training capacity by acquiring a land plot and constructing training venues, but has been unable to identify suitable plots due to the COVID-19 pandemic[76](index=76&type=chunk) [Interim Dividend](index=34&type=section&id=%E4%B8%AD%E6%9C%9F%E8%82%A1%E6%81%AF) The Board does not recommend paying any interim dividend to shareholders for the six months ended June 30, 2025 - The Board does not recommend paying any interim dividend to shareholders for the six months ended June 30, 2025[77](index=77&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=34&type=section&id=%E8%B3%BC%E8%B2%B7%E3%80%81%E5%87%BA%E5%94%AE%E6%88%96%E8%B3%96%E5%9B%9E%E6%9C%AC%E5%85%AC%E5%8F%B8%E7%9A%84%E4%B8%8A%E5%B8%82%E8%AD%89%E5%88%B8) 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) [Corporate Governance and Other Information](index=34&type=section&id=%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB%E5%8F%8A%E5%85%B6%E4%BB%96%E8%B3%87%E6%96%99) The company is committed to maintaining high corporate governance standards, having complied with all applicable provisions of the Corporate Governance Code; directors confirmed compliance with the Model Code for securities transactions; the Audit Committee reviewed the interim financial statements, deeming them compliant with accounting standards and Listing Rules - For the six months ended June 30, 2025, the company complied with all applicable code provisions set out in the Corporate Governance Code[79](index=79&type=chunk) - Following specific enquiries to all Directors, all Directors confirmed their compliance with the required standards for securities transactions by Directors as set out in the Model Code[80](index=80&type=chunk) - The Audit Committee reviewed the Group's unaudited consolidated financial statements for the six months ended June 30, 2025, and considered that these results complied with applicable accounting standards and requirements of the Listing Rules and other applicable laws and regulations[81](index=81&type=chunk) Appendix This section provides detailed definitions of proprietary and technical terms used in the report to ensure readers have a clear understanding of the content [Definitions](index=36&type=section&id=%E9%87%8B%E7%BE%A9) This section provides definitions for key terms used in the report, including company entities, regulatory bodies, financial terminology, and corporate actions - Definitions are provided for terms such as 'Audit Committee', 'Board', 'Company', 'Corporate Governance Code', 'Directors', 'Group', 'HKD', 'Hong Kong', 'IPO', 'Kaiyuan Driving School', 'Ministry of Public Security', 'Listing Rules', 'Main Board', 'Model Code', 'PRC', 'Prospectus', 'Record Date', 'Rights Issue', 'Rights Shares', 'RMB', 'Shareholder(s)', 'Share(s)', 'Shunda Driving School', 'Stock Exchange', 'Xincai Driving School', 'Tongtai Culture', and 'Tongtai Driving School'[84](index=84&type=chunk)[85](index=85&type=chunk)[86](index=86&type=chunk)[87](index=87&type=chunk) [Technical Terms](index=39&type=section&id=%E6%8A%80%E8%A1%93%E8%A9%9E%E5%BD%99) This section explains professional terms related to the driving training business in the report, specifically different vehicle classifications (e.g., Class A2, A3, B1, B2, C1, C2, C6 vehicles) and driving school qualification levels (Qualified Class 1 Driving School, Qualified Class 2 Driving School) - Definitions are provided for technical terms such as 'Class A2 vehicles', 'Class A3 vehicles', 'Class B1 vehicles', 'Class B2 vehicles', 'Class C1 vehicles', 'Class C2 vehicles', 'Class C6 vehicles', 'Large Vehicles', 'Qualified Class 1 Driving School', 'Qualified Class 2 Driving School', and 'Small Vehicles'[89](index=89&type=chunk)[90](index=90&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) This statement details the company's financial performance, including revenue, costs, and loss for the six months ended June 30, 2025 Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (For the six months ended June 30, 2025) | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Revenue | 2,072,472 | 2,112,181 | | Cost of Sales | (1,933,730) | (1,964,841) | | Gross Profit | 138,742 | 147,340 | | Other Income | 132,110 | 136,709 | | Loss Before Tax | (26,124) | (4,686) | | Income Tax Expense | (5,225) | (3,456) | | Loss and Total Comprehensive Expense for the Period | (31,349) | (8,142) | | Loss and Total Comprehensive Expense for the Period Attributable to Owners of the Company | (35,530) | (12,290) | | Basic Loss Per Share (RMB cents) | (1.43) | (0.50) | [Condensed Consolidated Statement of Financial Position](index=3&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) This statement provides a snapshot of the company's assets, liabilities, and equity as of June 30, 2025 Condensed Consolidated Statement of Financial Position (as of June 30, 2025) | Indicator | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Non-current Assets | 2,759,013 | 4,568,427 | | Current Assets | 7,291,419 | 5,615,501 | | Current Liabilities | 2,550,037 | 2,657,623 | | Net Current Assets | 4,741,382 | 2,957,878 | | Total Equity | 7,488,756 | 7,520,105 | | Non-current Liabilities | 11,639 | 6,200 | | Total Assets Less Current Liabilities | 7,500,395 | 7,526,305 | [Notes to the Condensed Consolidated Financial Statements](index=5&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and disclosures supporting the condensed consolidated financial statements [1. Basis of Preparation](index=5&type=section&id=1.%20Basis%20of%20Preparation) The condensed consolidated financial statements are prepared in accordance with HKAS 34 and applicable disclosure requirements of the HKEX Listing Rules - The financial statements comply with Hong Kong Accounting Standard 34 and Appendix D2 of the Listing Rules disclosure requirements[7](index=7&type=chunk) [2. Significant Accounting Policies](index=5&type=section&id=2.%20Significant%20Accounting%20Policies) The financial statements are prepared on a historical cost basis, with consistent accounting policies and no material impact from new HKFRS standards - The financial statements are prepared on a historical cost basis, with accounting policies consistent with the previous year[8](index=8&type=chunk) - The first-time application of revised HKFRS accounting standards, such as HKAS 21 (Revised) Lack of Exchangeability, had no material impact on financial position or performance during this interim period[9](index=9&type=chunk) [3. Revenue / Segment Information](index=6&type=section&id=3.%20Revenue%20%2F%20Segment%20Information) Group revenue primarily derives from vehicle and parts sales, with a slight year-on-year decrease, and is reviewed across four operating segments [i. Disaggregation of Revenue from Contracts with Customers](index=6&type=section&id=i.%20Disaggregation%20of%20Revenue%20from%20Contracts%20with%20Customers) Total revenue for H1 2025 was RMB 2.072 billion, a 1.88% decrease, with growth in light commercial vehicles and pickups, but declines in medium/heavy vehicles and exports Disaggregation of Revenue from Contracts with Customers (RMB thousands) | Type of Goods | 2025 | 2024 | Year-on-year change | | :--- | :--- | :--- | :--- | | Sales of Light Commercial Vehicles | 932,672 | 902,670 | +3.32% | | Sales of Pickup Trucks | 261,801 | 227,963 | +14.80% | | Sales of Medium and Heavy-Duty Vehicles | 489,612 | 511,302 | -4.24% | | Sales of Chassis | 170,909 | 298,421 | -42.73% | | Sales of Auto Parts, Components and Others | 217,478 | 171,825 | +26.57% | | **Total** | **2,072,472** | **2,112,181** | **-1.88%** | - Excluding export sales to countries outside China of **RMB 71,728,000** (H1 2024: RMB 181,712,000), all other sales were to customers within China, with a significant year-on-year decrease in export sales[10](index=10&type=chunk) [ii. Segment Information](index=7&type=section&id=ii.%20Segment%20Information) The Group operates in four reportable segments, with the auto parts segment profitable in H1 2025, while pickup and medium/heavy vehicle segments recorded losses - The Group's operating and reportable segments include: light commercial vehicles and chassis, pickup trucks and chassis, medium and heavy-duty vehicles and chassis, and auto parts, components, and others[17](index=17&type=chunk) Overview of Segment Profit (Loss) (RMB thousands) | Segment | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Light Commercial Vehicles and Chassis | 10,620 (Profit) | (17,710) (Loss) | | Pickup Trucks and Chassis | (25,160) (Loss) | (20,267) (Loss) | | Medium and Heavy-Duty Vehicles and Chassis | (48,575) (Loss) | 692 (Profit) | | Auto Parts, Components and Others | 60,841 (Profit) | 25,714 (Profit) | | **Total Segment Profit (Loss)** | **(2,274)** | **(11,571)** | - In H1 2025, the auto parts, components, and others segment reported assets of **RMB 1,331,393 thousand** and liabilities of **RMB 97,755 thousand**[21](index=21&type=chunk) [4. Loss Before Tax Has Been Arrived At After Charging (Crediting)](index=12&type=section&id=4.%20Loss%20Before%20Tax%20Has%20Been%20Arrived%20At%20After%20Charging%20%28Crediting%29) This section details expenses and income affecting loss before tax, including increased staff costs and depreciation, and significant government grants for hydrogen fuel cell R&D Key Expense and Income Items (RMB thousands) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Total Staff Costs | 170,387 | 156,909 | | Amortization of Intangible Assets | 21,135 | 19,174 | | Total Depreciation | 50,291 | 40,590 | | Interest Income from Fixed Deposits and Bank Balances | (59,653) | (69,808) | | Government Grants | (23,268) | (12,241) | - In H1 2025, the Group recognized **RMB 22,500,000** in subsidies related to hydrogen fuel cell vehicle R&D and production, with no such subsidy in H1 2024[24](index=24&type=chunk) - No subsidies related to special funds for innovation and development projects were recognized in H1 2025, compared to **RMB 10,870,000** in H1 2024[24](index=24&type=chunk) [5. Income Tax Expense](index=13&type=section&id=5.%20Income%20Tax%20Expense) Income tax expense increased to RMB 5.225 million in H1 2025, with the company and Qingling Mould enjoying a preferential 15% corporate income tax rate Income Tax Expense (RMB thousands) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Current Tax | 804 | 3,441 | | Under (Over) Provision in Prior Years | 654 | (542) | | Deferred Tax | 3,767 | 557 | | **Total** | **5,225** | **3,456** | - The Company and Qingling Mould enjoy a preferential corporate income tax rate of **15%** due to qualifying for Western Development encouraging industry policies[26](index=26&type=chunk) - The tax rate for other Chinese subsidiaries is **20%** (H1 2024: 20% and 25%)[27](index=27&type=chunk) [6. Dividends](index=14&type=section&id=6.%20Dividends) The Board of Directors resolved not to declare an interim dividend for the six months ended June 30, 2025, consistent with the prior year - No dividends were paid, declared, or proposed during the interim period[28](index=28&type=chunk) - The Board resolved not to distribute an interim dividend[29](index=29&type=chunk) [7. Loss Per Share](index=14&type=section&id=7.%20Loss%20Per%20Share) Basic loss per share attributable to owners of the company expanded to RMB 1.43 cents for H1 2025, with no diluted loss per share presented due to absence of potential ordinary shares Basic Loss Per Share Calculation (RMB thousands) | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | Loss and Total Comprehensive Expense for the Period Attributable to Owners of the Company | (35,530) | (12,290) | | Number of Shares for Basic Loss Per Share Calculation (thousands) | 2,482,268 | 2,482,268 | | **Basic Loss Per Share (RMB cents)** | **(1.43)** | **(0.50)** | - No diluted loss per share is presented as there were no outstanding potential ordinary shares during either presented period[31](index=31&type=chunk) [8. Property, Plant and Equipment](index=14&type=section&id=8.%20Property%2C%20Plant%20and%20Equipment) The Group acquired RMB 66.117 million in property, plant, and equipment, primarily construction in progress, and disposed of RMB 0.641 million in assets during the interim period - The Group acquired new property, plant, and equipment totaling **RMB 66,117,000** (H1 2024: RMB 77,650,000), primarily for construction in progress[32](index=32&type=chunk) - Property, plant, and equipment with a total carrying amount of **RMB 641,000** (H1 2024: RMB 1,000,000) were disposed of[32](index=32&type=chunk) [9. Trade and Bills Receivables and Other Receivables and Prepayments](index=15&type=section&id=9.%20Trade%20and%20Bills%20Receivables%20and%20Other%20Receivables%20and%20Prepayments) Total trade and bills receivables, other receivables, and prepayments increased to RMB 2.251 billion as of June 30, 2025, driven by higher bills receivables and long-term trade receivables Trade and Bills Receivables and Other Receivables and Prepayments (RMB thousands) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Trade Receivables less Credit Loss Provision | 1,240,288 | 1,163,549 | | Bills Receivables | 642,749 | 337,650 | | Other Receivables less Credit Loss Provision | 84,546 | 24,999 | | Prepayments for Raw Materials | 54,958 | 140,039 | | Receivables for Subsidies less Credit Loss Provision | 228,989 | 228,852 | | **Total** | **2,251,530** | **1,895,089** | - The credit period for goods sold is primarily **3 to 6 months**, except for subsidiaries of Qingling Motors (Group) Co., Ltd., which have a **1-year** credit period[34](index=34&type=chunk) - Since last year, the Company has entered into structured installment payment contracts with some customers, with a fixed term of **five years**[35](index=35&type=chunk) Aging Analysis of Trade Receivables (RMB thousands) | Aging | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Within 3 months | 186,624 | 601,284 | | 3 to 6 months | 326,062 | 202,744 | | 7 to 12 months | 438,144 | 316,342 | | Over 1 year | 289,458 | 43,179 | - All bills receivables are bank-guaranteed and mature within **12 months**[36](index=36&type=chunk) [10. Fixed Deposits](index=17&type=section&id=10.%20Fixed%20Deposits) The Group's fixed deposits have maturities ranging from 3 to 36 months, with annual interest rates between 1.60% and 3.45% - Fixed deposits mature within **3 to 36 months**[37](index=37&type=chunk) - The annual interest rate for deposits ranges from **1.60% to 3.45%** (December 31, 2024: 1.50% to 3.55%)[37](index=37&type=chunk) [11. Trade and Bills Payables and Other Payables](index=17&type=section&id=11.%20Trade%20and%20Bills%20Payables%20and%20Other%20Payables) Total trade and bills payables and other payables decreased slightly to RMB 2.352 billion as of June 30, 2025, with trade and bills payables forming the largest component Trade and Bills Payables and Other Payables (RMB thousands) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Trade and Bills Payables | 2,006,507 | 2,126,249 | | Payables for Selling Expenses | 148,249 | 124,660 | | Other Taxes Payable | 34,912 | 28,169 | | Other Payables | 163,234 | 161,133 | | **Total** | **2,352,902** | **2,440,211** | Aging Analysis of Trade and Bills Payables (RMB thousands) | Aging | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Within 3 months | 1,775,400 | 1,853,310 | | 3 to 6 months | 227,463 | 268,300 | | 7 to 12 months | 275 | 940 | | Over 12 months | 3,369 | 3,699 | [Management Discussion and Analysis](index=18&type=section&id=Management%20Discussion%20and%20Analysis) This section provides an overview of the Group's operational and financial performance, market conditions, and strategic initiatives for the period [Results for the Six Months Ended 30 June 2025](index=18&type=section&id=Results%20for%20the%20Six%20Months%20Ended%2030%20June%202025) The Group sold 16,842 vehicles, a 1.82% decrease, with sales revenue of RMB 2.072 billion, and an expanded loss attributable to owners of RMB 35.53 million - The Group sold **16,842 vehicles**, a year-on-year decrease of **1.82%**[39](index=39&type=chunk) - Sales revenue was **RMB 2.072 billion**, a year-on-year decrease of **1.88%**[39](index=39&type=chunk) - Loss and total comprehensive expense for the period attributable to owners of the Company was **RMB 35,530,000**, compared to RMB 12,290,000 in the prior period[39](index=39&type=chunk) [Performance Review](index=18&type=section&id=Performance%20Review) Despite a challenging market with price wars, the company achieved sales growth in pickups and new energy vehicles, maintaining a 4.51% R&D intensity and launching new products - Domestic commercial vehicle production and sales increased by **4.7%** and **2.6%** respectively, but overall market demand was weak, consumer confidence was insufficient, and price wars led to a decline in average industry profit margins[40](index=40&type=chunk) - H1 pickup sales increased by **20%** year-on-year, medium and heavy-duty truck sales increased by **3%** year-on-year, and new energy vehicle sales increased by **10.39%** year-on-year[41](index=41&type=chunk) - R&D intensity reached **4.51%**, with new products like Lingjie, Lingkun, and VAN/mini-truck launched on schedule, and the H47 Xinjiang coal transport tractor successfully developed[41](index=41&type=chunk) - The company will focus on strategies including stabilizing fuel vehicles, advancing electric vehicles, expanding overseas, stabilizing hydrogen energy, seizing market share, reducing costs, accelerating transformation, activating vitality, and improving efficiency[42](index=42&type=chunk) [Financial Performance](index=20&type=section&id=Financial%20Performance) Group revenue decreased by 1.88% to RMB 2.072 billion due to reduced overseas demand, gross profit declined by 5.84%, and loss attributable to owners expanded to RMB 35.53 million - The Group's revenue was **RMB 2,072,472,000**, a **1.88%** decrease compared to the prior period, primarily due to reduced overseas commercial vehicle demand[43](index=43&type=chunk) - Gross profit for the period was **RMB 138,742,000**, a **5.84%** decrease compared to the prior period; gross profit margin was **6.69%** (prior period: 6.98%)[43](index=43&type=chunk) - Loss and total comprehensive expense for the period attributable to owners of the Company was **RMB 35,530,000**, compared to RMB 12,290,000 in the prior period[43](index=43&type=chunk) - Other income was **RMB 132,110,000**, a **3.36%** decrease compared to the prior period, mainly due to reduced government grants and interest income[43](index=43&type=chunk) - Basic loss per share was **RMB 1.43 cents**[44](index=44&type=chunk) [Financial Position](index=20&type=section&id=Financial%20Position) As of June 30, 2025, total assets were RMB 10.05 billion and total liabilities were RMB 2.56 billion, with net current assets increasing by 60.30% to RMB 4.74 billion - The Group's total assets and total liabilities were **RMB 10,050,432,000** and **RMB 2,561,676,000** respectively[45](index=45&type=chunk) - Non-current assets amounted to **RMB 2,759,013,000**, primarily comprising fixed deposits, property, plant and equipment, interests in joint ventures, trade receivables, and intangible assets[45](index=45&type=chunk) - Net current assets increased by **60.30%** from **RMB 2,957,878,000** as of December 31, 2024, to **RMB 4,741,382,000** as of June 30, 2025[46](index=46&type=chunk) [Liquidity and Capital Structure](index=21&type=section&id=Liquidity%20and%20Capital%20Structure) The Group funds operations through internal cash flow, with the gearing ratio decreasing to 34.21% as of June 30, 2025, and no significant changes in financing strategy or share capital - The Group's gearing ratio was **34.21%** (December 31, 2024: 35.42%)[47](index=47&type=chunk) - The Company's issued share capital remained at **RMB 2,482,268,000**, with no new shares issued during the interim period[47](index=47&type=chunk) - The Group's financing strategy remained unchanged, with no new bank borrowings or non-current liabilities added[47](index=47&type=chunk) - Total equity attributable to owners of the Company was **RMB 7,307,176,000**, with net asset value per share at **RMB 2.94**[48](index=48&type=chunk) [Material Investments](index=21&type=section&id=Material%20Investments) As of June 30, 2025, the Group's interests in joint ventures totaled RMB 492.723 million, primarily in Isuzu (China) Engine Co., Ltd., with no material acquisitions or disposals during the period - The Group's interests in joint ventures amounted to **RMB 492,723,000**, primarily comprising an interest of **RMB 428,288,000** in Isuzu (China) Engine Co., Ltd[49](index=49&type=chunk) - Interests in associates amounted to **RMB 7,333,000**[49](index=49&type=chunk) - There were no material acquisitions or disposals by the Group during the interim period[50](index=50&type=chunk) [Segment Information](index=21&type=section&id=Segment%20Information) Light commercial vehicles and chassis, along with medium and heavy-duty vehicles and chassis, collectively represent 76.87% of total revenue, making them the Group's largest product contributors - Light commercial vehicles and chassis, and medium and heavy-duty vehicles and chassis, collectively contributed **76.87%** of total revenue[51](index=51&type=chunk) - Pickup trucks and chassis contributed **RMB 261,801,000** to revenue, representing **12.63%** of total revenue[51](index=51&type=chunk) - Light commercial vehicles and chassis, and medium and heavy-duty vehicles and chassis are currently the Group's primary products with the largest revenue contribution rates[52](index=52&type=chunk) [Impact of Exchange Rate Fluctuations](index=22&type=section&id=Impact%20of%20Exchange%20Rate%20Fluctuations) The Group's primary foreign currency transactions involve JPY-denominated auto parts procurement, but exchange rate fluctuations have not materially impacted operations or liquidity due to small balances - The Group holds foreign currency bank balances of **RMB 2,059,000** and foreign currency trade and bills receivables and other receivables and prepayments of **RMB 1,028,000**[54](index=54&type=chunk) - The Group's primary foreign currency transactions involve JPY-denominated procurement of auto parts[54](index=54&type=chunk) - The Group's operating condition or liquidity has not experienced difficulties or been materially affected by currency exchange rate fluctuations[54](index=54&type=chunk) [Commitments](index=22&type=section&id=Commitments) As of June 30, 2025, the Group had capital commitments of RMB 161.53 million, primarily for property, plant, and equipment, expected to be funded by internal cash flows - The Group had capital commitments contracted but not provided for in the condensed consolidated financial statements amounting to **RMB 161,530,000**[55](index=55&type=chunk) - These primarily include outstanding consideration payable for the acquisition of property, plant, and equipment[55](index=55&type=chunk) - The Group expects to fund these capital requirements through its own cash flows[55](index=55&type=chunk) [Interim Dividends](index=22&type=section&id=Interim%20Dividends) The Board of Directors resolved not to declare an interim dividend for the six months ended June 30, 2025, consistent with the prior year - The Board resolved not to declare an interim dividend for the six months ended June 30, 2025[56](index=56&type=chunk) [Employees and Remuneration Policy](index=22&type=section&id=Employees%20and%20Remuneration%20Policy) As of June 30, 2025, the Group had 2,984 employees with total staff costs of RMB 170.387 million, and remuneration is determined by performance, qualifications, and industry practice - The Group's total number of employees was **2,984**[57](index=57&type=chunk) - Staff costs for the six months ended June 30, 2025, amounted to **RMB 170,387,000**[57](index=57&type=chunk) - The Group determines employee remuneration based on performance, qualifications, and prevailing industry practices, incentivizing employees through bonuses and awards[57](index=57&type=chunk) [Other Information](index=23&type=section&id=Other%20Information) This section covers details regarding the company's share capital, major shareholders, directors' interests, corporate governance, and financial information publication [Share Capital](index=23&type=section&id=Share%20Capital) As of June 30, 2025, the company's total share capital comprised 2,482,268,268 shares, with domestic shares accounting for approximately 50.10% and H shares for 49.90% Share Capital Structure (as of June 30, 2025) | Share Class | Number of Shares | Percentage of Total Issued Shares | | :--- | :--- | :--- | | Domestic Shares | 1,243,616,403 shares | Approximately 50.10% | | H Shares | 1,238,651,865 shares | Approximately 49.90% | [Major Shareholders](index=23&type=section&id=Major%20Shareholders) As of June 30, 2025, Qingling Motors (Group) Co., Ltd. held 50.10% of domestic shares, and Isuzu Motors Limited held 20.00% of H shares, making them the company's major shareholders Major Shareholders' Shareholdings (as of June 30, 2025) | Shareholder Name | Share Class | Number of Shares Held | Percentage of Total Share Capital | | :--- | :--- | :--- | :--- | | Qingling Motors (Group) Co., Ltd. | Domestic Shares | 1,243,616,403 shares | 50.10% | | Isuzu Motors Limited | H Shares | 496,453,654 shares | 20.00% | [Directors', Former Supervisors' and Chief Executive's Interests in Shares](index=24&type=section&id=Directors%27%2C%20Former%20Supervisors%27%20and%20Chief%20Executive%27s%20Interests%20in%20Shares) As of June 30, 2025, no directors or chief executive held any registrable interests or short positions in the company's shares, related shares, or debentures - None of the Company's directors or chief executive held any registrable interests or short positions in the shares, underlying shares, or debentures of the Company or its associated corporations[61](index=61&type=chunk) - None of the Company's directors, former supervisors, chief executive, or their spouses or children under 18 years of age held or exercised any rights to subscribe for equity or debt securities of the Company[61](index=61&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=24&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company%27s%20Listed%20Securities) For the six months ended June 30, 2025, neither the company nor its subsidiaries purchased, sold, redeemed, or cancelled any of its listed securities, nor held any treasury shares - Neither the Company nor its subsidiaries purchased, sold, redeemed, or cancelled any of the Company's listed securities[62](index=62&type=chunk) - As of June 30, 2025, the Company held no treasury shares[62](index=62&type=chunk) [Corporate Governance](index=24&type=section&id=Corporate%20Governance) The company maintains high corporate governance standards, complying with all applicable code provisions of the HKEX Listing Rules, with Mr. Chen Daijin currently serving as acting General Manager - The Company has complied with all applicable code provisions of the Corporate Governance Code set out in Appendix C1 Part 2 of the HKEX Listing Rules[63](index=63&type=chunk) - Since Mr. Yasuda Tatsuya's retirement as the Company's General Manager on June 27, 2024, his duties are currently being performed by Mr. Chen Daijin, the Company's Executive Deputy General Manager[63](index=63&type=chunk) [Standard Code for Securities Transactions by Directors and Former Supervisors](index=24&type=section&id=Standard%20Code%20for%20Securities%20Transactions%20by%20Directors%20and%20Former%20Supervisors) The company adopted the Standard Code for securities transactions by directors and supervisors, confirming compliance by all directors and former supervisors, with all supervisors having retired on June 27, 2025 - The Company has adopted the Standard Code as set out in Appendix C3 of the Listing Rules for securities transactions by its directors and supervisors[64](index=64&type=chunk) - The Company confirms that all directors and former supervisors complied with the standards set out in the Standard Code for the six months ended June 30, 2025 (or for former supervisors, up to June 27, 2025)[64](index=64&type=chunk) - All supervisors of the Company retired from their positions on June 27, 2025, immediately following the abolition of the Company's supervisory committee on the same date[64](index=64&type=chunk) [Publication of Financial Information](index=25&type=section&id=Publication%20of%20Financial%20Information) The 2025 interim results are unaudited but reviewed by auditors and the audit committee, with the interim report to be dispatched to shareholders and published online - The interim results for the six months ended June 30, 2025, are unaudited but have been reviewed by the Company's auditors in accordance with Hong Kong Standard on Review Engagements 2410[65](index=65&type=chunk) - The interim results have also been reviewed by the Company's Audit Committee[65](index=65&type=chunk) - The Company's 2025 interim report will be dispatched to shareholders and published on the HKEX website www.hkexnews.hk and the Company's website www.qingling.com.cn in due course[66](index=66&type=chunk) [Directors](index=25&type=section&id=Directors) As of the announcement date, the Board of Directors comprises eleven directors, including seven executive directors and four independent non-executive directors - The Board of Directors consists of **eleven directors**, including Mr. Luo Yuguang, Mr. Nakamura Koji, Mr. Kijima Katsuya, Mr. Tsukui Mikio, Mr. Xu Song, Mr. Li Juxing, and Mr. Li Xiaodong as executive directors[67](index=67&type=chunk) - Mr. Long Tao, Mr. Song Xiaojiang, Mr. Liu Tianni, and Ms. Chen Yanyun are independent non-executive directors[67](index=67&type=chunk)

[Financial Performance Summary](index=1&type=section&id=%E8%B2%A1%E5%8B%99%E8%A1%A8%E7%8F%BE%E6%91%98%E8%A6%81) The company achieved a significant turnaround, reporting a period profit for the first half of 2025, driven by a substantial increase in adjusted period profit Financial Performance Summary for the Six Months Ended June 30, 2025 | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Revenue | 685,798 | 845,223 | | Gross Profit | 289,488 | 291,786 | | Profit/(Loss) Before Income Tax | 34,741 | (107,393) | | Profit/(Loss) for the Period | 32,952 | (109,279) | | Adjusted Period Profit* | 95,139 | 3,297 | - The company achieved a period profit of **RMB 32,952 thousand** in the first half of 2025, a significant turnaround from a loss of **RMB 109,279 thousand** in the same period of 2024[4](index=4&type=chunk) - Adjusted period profit significantly increased to **RMB 95,139 thousand**, representing a year-on-year growth of approximately **2785%**, indicating a substantial improvement in core business profitability[4](index=4&type=chunk) [Business Review](index=2&type=section&id=%E6%A5%AD%E5%8B%99%E5%9B%9E%E9%A1%A7) The company's business review highlights robust growth in overseas game publishing, strong performance from self-developed titles, and the effective integration of AI capabilities across operations [Overseas Premium Game Publishing Business](index=2&type=section&id=%E6%B5%B7%E5%A4%96%E7%B2%BE%E5%93%81%E9%81%8A%E6%88%B2%E7%99%BC%E8%A1%8C%E6%A5%AD%E5%8B%99) The company's overseas premium game publishing business maintains steady growth, with evergreen titles continuing to generate revenue and new games in reserve poised for launch - *Subway Surfers* maintains strong vitality 13 years after its launch, consistently ranking among the top downloads through content updates and IP collaborations, with its paid user rate increasing by nearly **30%** compared to 2024[5](index=5&type=chunk) - *Gardenscapes* and *Homescapes* series show steady growth, with 6 versions launched and multiple IP collaborations in the first half of the year, leading to an average daily active user payment increase of over **9%** year-on-year[6](index=6&type=chunk) - *Mech Arena* community engagement surged, with a collaboration version with a Gundam designer in June achieving a record-high average daily active user payment on its launch day, and the Fanbook community user base increasing by over **36.6%** compared to the end of 2024[6](index=6&type=chunk) - A rich pipeline of new games includes *Rush Royale* (overseas revenue of nearly **USD 300 million**, global downloads exceeding **80 million**) and *Super Slime Simulator* (overseas revenue exceeding **USD 70 million**), expected to drive new growth upon domestic launch[7](index=7&type=chunk) [Self-Developed Business](index=3&type=section&id=%E8%87%AA%E7%A0%94%E6%A5%AD%E5%8B%99) The self-developed business is progressively delivering results, with *Calabiyau* PC achieving high-quality growth and its mobile version expected to launch this year, while *Delta Force: Hawk Ops*, co-developed with Tencent, has launched globally with impressive performance - *Calabiyau* PC's MAU increased by **9.9%** in the first half of 2025, revenue grew by **74.8%**, and the paid user rate and average monthly active user payment increased by **23.2%** and **59.0%** respectively[8](index=8&type=chunk) - The *Calabiyau* Carnival event attracted nearly 5,000 players, with online live broadcast peak viewership exceeding **1 million**, and the mobile version is announced for official launch within the year[8](index=8&type=chunk)[9](index=9&type=chunk) - *Delta Force: Hawk Ops* has launched globally on both PC and mobile, with its daily active user base exceeding **20 million** in July, ranking among the top five in domestic daily active users and top three in game revenue[10](index=10&type=chunk) [AI Capability Application](index=4&type=section&id=AI%E8%83%BD%E5%8A%9B%E6%87%89%E7%94%A8) The company is fully integrating AI capabilities across R&D, user services, and gaming experience, significantly enhancing organizational efficiency, optimizing user experience, and achieving cost reduction and efficiency gains - AI code assistants fully cover technical development roles, improving overall R&D efficiency by over **30%**, and an AI code review platform has been launched to enhance code and game product quality[12](index=12&type=chunk) - AI capabilities are applied in art design, game version internationalization, and automated testing, serving as a key driver for the company's cost reduction, efficiency improvement, and quality enhancement[12](index=12&type=chunk) - The self-developed global user voice AI listening platform "Fengsheng" enhances strategy response and operational iteration efficiency, contributing to a **24%** increase in *Calabiyau*'s Steam positive review rate and over **30%** improvement in KOL connection efficiency[12](index=12&type=chunk) - The AI customer service system covers multiple platforms and supports multiple languages, with a knowledge base co-built with Alibaba Cloud's Tongyi achieving **75%** self-resolution for high-frequency issues, a **40%** decrease in manual intervention rate, and an accuracy rate of **93%**[12](index=12&type=chunk) [Management Discussion and Analysis](index=5&type=section&id=%E7%AE%A1%E7%90%86%E5%B1%A4%E8%A8%8E%E8%AB%96%E8%88%87%E5%88%86%E6%9E%90) This section provides an in-depth analysis of the company's financial performance, focusing on revenue, cost, and expense trends, highlighting a significant turnaround in profitability for the period [Revenue Analysis](index=5&type=section&id=%E6%94%B6%E7%9B%8A%E5%88%86%E6%9E%90) For the six months ended June 30, 2025, the company's total revenue decreased by 18.9% year-on-year, primarily due to the late lifecycle revenue decline of *All-Star Glory*, though game business still constitutes the vast majority of total revenue Revenue Composition and Year-on-Year Change | Revenue Category | 2025 (RMB thousands) | Proportion (%) | 2024 (RMB thousands) | Proportion (%) | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Game Revenue | 668,968 | 97.5 | 822,238 | 97.3 | -18.6 | | Information Service Revenue | 13,590 | 2.0 | 17,618 | 2.1 | -22.9 | | Other Revenue | 3,240 | 0.5 | 5,367 | 0.6 | -39.6 | | **Total Revenue** | **685,798** | **100.0** | **845,223** | **100.0** | **-18.9** | - Game revenue decreased by **18.6%**, mainly due to *All-Star Glory* entering its mid-to-late lifecycle, leading to a decline in revenue, but its marketing expenses significantly decreased, improving profit margins[15](index=15&type=chunk) - Information service revenue decreased by **22.9%**, primarily due to the company's proactive strategy adjustment to reduce in-app advertising and enhance user experience[16](index=16&type=chunk) [Cost and Expense Analysis](index=6&type=section&id=%E6%88%90%E6%9C%AC%E8%88%87%E8%B2%BB%E7%94%A8%E5%88%86%E6%9E%90) The company effectively controlled cost of revenue and R&D expenses during the reporting period, while selling and marketing expenses increased, indicating an optimized overall expense structure [Cost of Revenue](index=6&type=section&id=%E6%94%B6%E7%9B%8A%E6%88%90%E6%9C%AC) Cost of revenue decreased by 28.4% year-on-year, and its percentage of revenue also dropped from 65.5% to 57.8%, primarily due to the increased revenue contribution from self-developed and newly launched products, which have lower cost of revenue ratios Cost of Revenue and Proportion Change | Indicator | 2025 (RMB thousands) | Proportion of Revenue (%) | 2024 (RMB thousands) | Proportion of Revenue (%) | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Cost of Revenue | 396,310 | 57.8 | 553,437 | 65.5 | -28.4 | [Selling and Marketing Expenses](index=7&type=section&id=%E9%8A%B7%E5%94%AE%E5%8F%8A%E7%87%9F%E9%8Š%B7%E9%96%8B%E6%94%AF) Selling and marketing expenses increased by 39.4% year-on-year, mainly due to increased market promotion expenditures for *Calabiyau* overseas PC and the newly launched game *Legendary Shop: Build & Battle* at the beginning of the year Selling and Marketing Expenses and Proportion Change | Indicator | 2025 (RMB thousands) | Proportion of Revenue (%) | 2024 (RMB thousands) | Proportion of Revenue (%) | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Selling and Marketing Expenses | 108,429 | 15.8 | 77,766 | 9.2 | 39.4 | [General and Administrative Expenses](index=7&type=section&id=%E4%B8%80%E8%88%AC%E5%8F%8A%E8%A1%8C%E6%94%BF%E9%96%8B%E6%94%AF) General and administrative expenses remained largely stable at approximately RMB 47.1 million General and Administrative Expenses | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | General and Administrative Expenses | 47,098 | 50,381 | [Research and Development Expenses](index=7&type=section&id=%E7%A0%94%E7%99%BC%E9%96%8B%E6%94%AF) Research and development expenses significantly decreased by 68.2%, primarily due to the progressive completion of *Calabiyau* R&D and the application of AI technology across game development stages, which substantially improved R&D efficiency and reduced costs Research and Development Expenses and Proportion Change | Indicator | 2025 (RMB thousands) | Proportion of Revenue (%) | 2024 (RMB thousands) | Proportion of Revenue (%) | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Research and Development Expenses | 48,743 | 7.1 | 153,286 | 18.1 | -68.2 | [Net Impairment Loss on Financial Assets](index=7&type=section&id=%E9%87%91%E8%9E%8D%E8%B3%87%E7%94%A2%E4%B9%8B%E6%B8%9B%E5%80%BC%E虧%E6%90%8D%E6%B7%A8%E9%A1%8D) Net impairment loss on financial assets decreased year-on-year, from RMB 82.2 million to RMB 36.2 million Net Impairment Loss on Financial Assets | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Net Impairment Loss on Financial Assets | 36,229 | 82,162 | [Net Finance Costs](index=7&type=section&id=%E8%B2%A1%E5%8B%99%E6%88%90%E6%9C%AC%E6%B7%A8%E9%A1%8D) Net finance costs decreased by 42.9% year-on-year, primarily due to lower interest costs resulting from a decrease in bank loan interest rates Net Finance Costs | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Net Finance Costs | 28,397 | 49,741 | [Income Tax Expense](index=8&type=section&id=%E6%89%80%E5%BE%97%E7%A8%85%E9%96%8B%E6%94%AF) Income tax expense remained stable at approximately RMB 1.8 million Income Tax Expense | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Income Tax Expense | 1,789 | 1,886 | [Profit/(Loss) for the Period](index=8&type=section&id=%E6%9C%9F%E9%96%93%E5%88%A9%E6%BD%A4%E2%88%95%EF%BC%88%E虧%E6%90%8D%EF%BC%89) The company achieved a period profit of RMB 33.0 million during the reporting period, a significant turnaround from a loss of RMB 109.3 million in the same period last year Profit/(Loss) for the Period | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Profit/(Loss) for the Period | 32,952 | (109,279) | [Other Financial Information](index=8&type=section&id=%E5%85%B6%E4%BB%96%E8%B2%A1%E5%8B%99%E8%B3%87%E6%96%99) This section provides additional financial details, including non-IFRS measures, liquidity, contingent liabilities, capital expenditure, and foreign exchange risk management [Non-IFRS Financial Measures](index=8&type=section&id=%E9%9D%9E%E5%9C%8B%E9%9A%9B%E8%B2%A1%E5%8B%99%E5%A0%B1%E5%91%8A%E6%BA%96%E5%89%87%E8%B2%A1%E5%8B%99%E8%A8%88%E9%87%8F) The company uses non-IFRS measures such as adjusted period profit, EBITDA, and adjusted EBITDA to more clearly assess operating performance by excluding the impact of non-indicative or non-recurring items Non-IFRS Financial Measures | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Adjusted Period Profit | 95,139 | 3,297 | | EBITDA | 110,863 | 11,719 | | Adjusted EBITDA | 164,216 | 100,087 | - Adjusted period profit significantly increased year-on-year, and both EBITDA and adjusted EBITDA also showed substantial growth, reflecting an improvement in the company's profitability and cash flow position[26](index=26&type=chunk) Reconciliation of Profit/(Loss) for the Period and Adjusted Period Profit | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Profit/(Loss) for the Period | 32,952 | (109,279) | | Add: Interest expense on convertible bonds | 8,834 | 24,208 | | Add: Fair value loss/(gain) on financial assets at fair value through profit or loss | 9,051 | (1,974) | | Add: Fair value loss on financial liabilities at fair value through profit or loss | 2,000 | — | | Add: Share-based payment expense | 5,972 | 4,005 | | Add: Exchange loss/(gain) | 101 | (3,246) | | Add: Net impairment loss on financial assets | 36,229 | 82,162 | | Add: Impairment loss on prepayments | — | 7,421 | | **Adjusted Period Profit** | **95,139** | **3,297** | [Liquidity and Financial Resources](index=10&type=section&id=%E6%B5%81%E5%8B%95%E8%B3%87%E9%87%91%E5%8F%8A%E8%B2%A1%E5%8B%99%E8%B3%87%E6%BA%90) The company maintains a prudent financial management policy, with a decrease in cash and cash equivalents but also a reduction in total borrowings, leading to improved current, gearing, and capital gearing ratios, indicating a stable financial position [Cash and Cash Equivalents](index=10&type=section&id=%E7%8F%BE%E9%87%91%E5%8F%8A%E7%8F%BE%E9%87%91%E7%AD%89%E5%83%B9%E7%89%A9) As of June 30, 2025, total cash and cash equivalents were approximately RMB 105.0 million, a 46.7% decrease from December 31, 2024 Cash and Cash Equivalents | Indicator | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Cash and Cash Equivalents | 105,013 | 196,926 | -46.7 | [Borrowings](index=11&type=section&id=%E5%80%9F%E6%AC%BE) As of June 30, 2025, total borrowings were approximately RMB 994.1 million, a decrease from December 31, 2024, primarily consisting of secured bank borrowings Total Borrowings Composition | Borrowing Category | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Secured bank borrowings | 979,079 | 1,055,075 | | Secured other borrowings | 15,000 | 15,000 | | **Total Borrowings** | **994,079** | **1,070,075** | [Current Ratio and Gearing Ratio](index=11&type=section&id=%E6%B5%81%E5%8B%95%E6%AF%94%E7%8E%87%E8%88%87%E8%B2%A0%E5%82%B5%E6%AF%94%E7%8E%87) The current ratio decreased from 0.90 to 0.85, and the gearing ratio decreased from 59.5% to 56.5%, indicating a slight tightening of liquidity but an overall improvement in the debt level Current Ratio and Gearing Ratio | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Current Ratio | 0.85 | 0.90 | | Gearing Ratio | 56.5% | 59.5% | [Capital Gearing Ratio](index=11&type=section&id=%E8%B3%87%E6%9C%AC%E8%B2%A0%E5%82%B5%E6%AF%94%E7%8E%87) The capital gearing ratio decreased from 75.0% as of December 31, 2024, to 67.1% as of June 30, 2025, reflecting an optimization of the capital structure Capital Gearing Ratio | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Capital Gearing Ratio | 67.1% | 75.0% | [Pledge of Borrowings](index=12&type=section&id=%E5%80%9F%E8%B2%B8%E6%8A%B5%E6%8A%BC) As of June 30, 2025, approximately 70.3% of total borrowings were pledged by certain right-of-use assets, construction in progress, trade receivables, game intellectual property, and deposits - Approximately **RMB 698.7 million** of the borrowings were pledged by certain right-of-use assets, construction in progress, certain trade receivables, certain game intellectual property, and certain deposits of the Group[35](index=35&type=chunk) - Pledged borrowings accounted for **70.3%** of total borrowings, slightly lower than **70.8%** as of December 31, 2024[35](index=35&type=chunk) [Contingent Liabilities](index=12&type=section&id=%E6%88%96%E6%9C%89%E8%B2%A0%E5%82%B5) As of June 30, 2025, the Group had no significant unrecorded contingent liabilities or guarantees - As of June 30, 2025, the Group had no significant unrecorded contingent liabilities or guarantees made[36](index=36&type=chunk) [Capital Expenditure](index=12&type=section&id=%E8%B3%87%E6%9C%AC%E9%96%8B%E6%94%AF) For the six months ended June 30, 2025, total capital expenditure was approximately RMB 86.0 million, primarily for copyright fees, construction in progress, and the acquisition of property, plant, and equipment, representing a year-on-year increase Capital Expenditure | Indicator | 2025 (RMB millions) | 2024 (RMB millions) | | :--- | :--- | :--- | | Total Capital Expenditure | 86.0 | 58.7 | - Capital expenditure primarily includes copyright fees paid, construction in progress, and the purchase of property, plant, and equipment[37](index=37&type=chunk) [Material Acquisitions and Disposals and Material Investments](index=12&type=section&id=%E9%87%8D%E5%A4%A7%E6%94%B6%E8%B3%BC%E5%8F%8A%E5%87%BA%E5%94%AE%E5%8F%8A%E9%87%8D%E5%A4%A7%E6%8A%95%E8%B3%87) During the reporting period, the Group did not undertake any material acquisitions, disposals, or material investments - For the six months ended June 30, 2025, the Group did not undertake any material acquisitions, disposals, or material investments[38](index=38&type=chunk) [Foreign Exchange Risk Management](index=12&type=section&id=%E5%A4%96%E5%8C%AF%E9%A2%A8%E9%9A%AA%E7%AE%A1%E7%90%86) The Group faces foreign exchange risks from multiple currencies including RMB, HKD, and USD, which are managed through regular reviews and natural hedging, but no foreign exchange fluctuations were hedged during the reporting period - The Group operates international businesses and is exposed to foreign exchange risks arising from various currencies including RMB, HKD, and USD[39](index=39&type=chunk) - The Group manages these risks by regularly reviewing net foreign exchange exposures and through natural hedging[39](index=39&type=chunk) - No foreign exchange fluctuations were hedged for the six months ended June 30, 2025, and 2024[40](index=40&type=chunk) [Employees and Remuneration Policy, Retirement Schemes and Training Programs](index=13&type=section&id=%E5%83%B1%E5%93%A1%E5%8F%8A%E5%85%B6%E8%96%AA%E9%85%AC%E6%94%BF%E7%AD%96%E3%80%81%E9%80%80%E4%BC%91%E8%A8%88%E5%8A%83%E5%8F%8A%E5%9F%B9%E8%A8%93%E8%A8%88%E5%8A%83) This section outlines the company's human resources, including a decrease in full-time employees, its remuneration policy designed to attract and retain talent, and diverse training programs aimed at enhancing professional skills Number of Full-time Employees | Date | Number of Full-time Employees | | :--- | :--- | | June 30, 2025 | 702 | | December 31, 2024 | 852 | - The company's number of full-time employees has decreased, but it remains committed to attracting, retaining, and motivating qualified staff[41](index=41&type=chunk) - The remuneration policy includes basic salary, performance bonuses, share awards, and commercial health and accident insurance, with plans to continue granting share awards to incentivize employees[41](index=41&type=chunk) - Diverse training programs are provided to employees, covering talent management, role-specific training (e.g., customer service, compliance management), Techtalk events, new graduate onboarding, and employee sharing activities, to enhance professional skills and comprehensive capabilities[42](index=42&type=chunk) [Financial Statements](index=14&type=section&id=%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8) This section presents the interim condensed consolidated financial statements, including the statement of comprehensive income and statement of financial position, reflecting the company's financial performance and position [Interim Condensed Consolidated Statement of Comprehensive Income](index=14&type=section&id=%E4%B8%AD%E6%9C%9F%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E5%85%A8%E9%9D%A2%E6%94%B6%E7%9B%8A%E8%A1%A8) This section presents the unaudited consolidated statement of comprehensive income for the six months ended June 30, 2025, showing the company's shift from a loss to a profit compared to the same period last year, primarily due to improved operating profit and reduced finance costs Interim Condensed Consolidated Statement of Comprehensive Income (Summary) | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Revenue | 685,798 | 845,223 | | Gross Profit | 289,488 | 291,786 | | Operating Profit/(Loss) | 45,311 | (54,624) | | Net Finance Costs | (28,397) | (49,741) | | Profit/(Loss) Before Income Tax | 34,741 | (107,393) | | Profit/(Loss) for the Year | 32,952 | (109,279) | | Total Comprehensive Income/(Loss) for the Period | 33,661 | (104,238) | | Profit/(Loss) for the Period Attributable to Owners of the Company | 28,514 | (109,817) | [Interim Condensed Consolidated Statement of Financial Position](index=16&type=section&id=%E4%B8%AD%E6%9C%9F%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81%E8%A1%A8) This section provides the unaudited consolidated statement of financial position as of June 30, 2025, reflecting changes in the structure of assets, liabilities, and equity, with both total assets and total liabilities showing a decrease Interim Condensed Consolidated Statement of Financial Position (Summary) | Indicator | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Total Assets | 3,512,143 | 3,590,220 | | Current Assets | 1,349,611 | 1,567,037 | | Cash and Cash Equivalents | 105,013 | 196,926 | | Total Equity | 1,528,301 | 1,455,368 | | Total Liabilities | 1,983,842 | 2,134,852 | | Current Liabilities | 1,588,146 | 1,735,915 | | Borrowings (Total) | 994,079 | 1,070,075 | [Notes to the Financial Statements](index=18&type=section&id=%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8%E9%99%84%E8%A8%BB) This section provides detailed notes to the financial statements, covering general information, basis of preparation, significant accounting policies, segment information, expense analysis, and other financial details [General Information](index=18&type=section&id=%E4%B8%80%E8%88%AC%E8%B3%87%E6%96%99) This note provides basic information about iDreamSky Technology Holdings Limited, including its place of incorporation, primary business (game development and operation in China), and listing on the Hong Kong Stock Exchange - The Company is incorporated in the Cayman Islands and primarily engaged in game development and operation in China[50](index=50&type=chunk) - The Company's shares have been listed on the Main Board of the Stock Exchange of Hong Kong since December 6, 2018[50](index=50&type=chunk) [Basis of Preparation](index=18&type=section&id=%E7%B7%A8%E8%A3%BD%E5%9F%BA%E6%BA%96) The interim financial information is prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting" and should be read in conjunction with the 2024 annual consolidated financial statements - The interim financial information is prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting"[51](index=51&type=chunk) - This information should be read in conjunction with the Group's annual consolidated financial statements for the year ended December 31, 2024[51](index=51&type=chunk) [Significant Accounting Policies](index=19&type=section&id=%E9%87%8D%E5%A4%A7%E6%9C%83%E8%A8%88%E6%94%BF%E7%AD%96) The accounting policies adopted in the preparation of the interim financial information are consistent with those used for the 2024 financial statements, and the adoption of new and revised standards is not expected to have a material impact on the financial position and operating results - The accounting policies adopted in the preparation of the interim financial information are consistent with those used for the 2024 financial statements[52](index=52&type=chunk) - The adoption of new and revised standards is not expected to have any significant impact on the interim condensed consolidated financial information[53](index=53&type=chunk)[57](index=57&type=chunk) [Segment Information](index=20&type=section&id=%E5%88%86%E9%83%A8%E8%B3%87%E6%96%99) The Group considers its operations as a single reportable segment (games and information services), with key operating decision-makers assessing performance based on segment revenue, cost of revenue, gross profit, and segment results, with revenue primarily derived from China - The Group's operations are operated and managed as a single reportable segment (games and information services)[58](index=58&type=chunk) - The chief operating decision-maker assesses the performance of the operating segment based on segment revenue, cost of revenue, gross profit, and segment results[58](index=58&type=chunk) Revenue from Games and Information Services | Revenue Category | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Game Revenue | 668,968 | 822,238 | | Information Service Revenue | 13,590 | 17,618 | | Other | 3,240 | 5,367 | | **Total** | **685,798** | **845,223** | Timing of Revenue Recognition by Category | Timing of Recognition | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | At a point in time | 485,875 | 438,444 | | Over time | 199,923 | 406,779 | | **Total** | **685,798** | **845,223** | [Expense Analysis](index=22&type=section&id=%E9%96%8B%E6%94%AF%E5%88%86%E6%9E%90) This section details the various expenses included in cost of revenue, selling and marketing expenses, general and administrative expenses, and research and development expenses, showing a significant decrease in employee benefit expenses and revenue sharing with content providers Expense Analysis | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Channel costs | 212,881 | 277,059 | | Revenue sharing with content providers | 110,014 | 217,079 | | Employee benefit expenses | 80,462 | 147,361 | | Promotion and advertising expenses | 98,758 | 70,191 | | Service fees for game development and other technical development | 6,954 | 37,416 | | Cloud computing, bandwidth and server hosting fees | 23,547 | 18,948 | | Amortisation of intangible assets | 37,877 | 30,129 | | Professional service fees | 12,309 | 6,148 | | Depreciation of right-of-use assets | 5,897 | 6,021 | | Travel and entertainment expenses | 3,850 | 6,375 | | Short-term leases and utilities expenses | 2,073 | 2,539 | | Depreciation of property, plant and equipment | 533 | 607 | | Impairment provision for prepayments | — | 7,421 | | Other tax expenses | 728 | 445 | | Depreciation of investment properties | 220 | 220 | | Others | 4,477 | 6,911 | | **Total** | **600,580** | **834,870** | [Other Income and Net (Losses)/Gains](index=23&type=section&id=%E5%85%B6%E4%BB%96%E6%94%B6%E5%85%A5%E5%8F%8A%EF%BC%88%E虧%E6%90%8D%EF%BC%89%2F%E6%94%B6%E7%9B%8A%E6%B7%A8%E9%A1%8D) This section presents the composition of other income and net other (losses)/gains, with government grants being the primary source of other income, and net other (losses)/gains comprising gains from disposal of financial assets and other items Other Income | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Government grants | 5,706 | 6,543 | | Others | 171 | 1,116 | | **Total** | **5,877** | **7,659** | Net Other (Losses)/Gains | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Gain on disposal of investments in associates and joint ventures | — | 5,073 | | Gain on disposal of financial assets | 1,669 | 1,850 | | Others | (2,173) | 629 | | **Total** | **(504)** | **7,552** | [Income Tax Expense](index=24&type=section&id=%E6%89%80%E5%BE%97%E7%A8%85%E9%96%8B%E6%94%AF) This section analyzes the income tax expense for the six months ended June 30, 2025, primarily consisting of deferred income tax, with the total amount remaining largely consistent with the prior year Income Tax Expense Analysis | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Current income tax | — | 46 | | Deferred income tax | 1,789 | 1,840 | | **Income Tax Expense** | **1,789** | **1,886** | [Earnings/(Loss) Per Share and Dividends](index=24&type=section&id=%E6%AF%8F%E8%82%A1%E7%9B%88%E5%88%A9%E2%88%95%EF%BC%88%E虧%E6%90%8D%EF%BC%89%E5%8F%8A%E8%82%A1%E6%81%AF) This section details the calculation of basic and diluted earnings per share, showing the company's shift from a loss to a profit per share, and confirms that the Board did not declare an interim dividend Basic Earnings/(Loss) Per Share | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | Profit/(Loss) attributable to owners of the Company (RMB thousands) | 28,514 | (109,817) | | Weighted average number of ordinary shares in issue (thousand shares) | 1,693,786 | 1,570,305 | | **Basic Earnings/(Loss) Per Share (RMB)** | **0.02** | **(0.07)** | Diluted Earnings/(Loss) Per Share | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | Profit/(Loss) attributable to owners of the Company (RMB thousands) | 28,514 | (109,817) | | Weighted average number of shares for diluted earnings per share (thousand shares) | 1,811,794 | 1,570,305 | | **Diluted Earnings/(Loss) Per Share (RMB)** | **0.02*** | **(0.07)** | - For the six months ended June 30, 2025, the share award scheme and convertible bonds had an anti-dilutive effect, thus the diluted earnings per share is equal to the basic earnings per share[73](index=73&type=chunk) - The Board has resolved not to declare an interim dividend for the six months ended June 30, 2025[74](index=74&type=chunk) [Trade Receivables](index=26&type=section&id=%E8%B2%A3%E6%98%93%E6%87%89%E6%94%B6%E6%AC%BE%E9%A0%85) Total trade receivables decreased, with most due within 3 months, and the company has made impairment provisions and written off some amounts, while certain receivables are pledged for bank financing Total Trade Receivables | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Third parties | 201,536 | 320,642 | | Related parties | 26,493 | 2,150 | | Less: Impairment provision | (127,589) | (164,378) | | **Net** | **100,440** | **158,414** | Ageing Analysis of Trade Receivables | Ageing | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Within 3 months | 80,488 | 102,335 | | 3 months to 1 year | 996 | 697 | | 1 to 2 years | 19,999 | 53,119 | | 2 to 3 years | 93,334 | 166,536 | | Over 3 years | 33,212 | 105 | | **Total** | **228,029** | **322,792** | - The Group wrote off trade receivables of **RMB 73,206,000**, primarily due to insufficient repayment ability of certain customers and business partners[81](index=81&type=chunk) - As of June 30, 2025, trade receivables of **RMB 29,546,000** were pledged to secure bank financing[80](index=80&type=chunk) [Prepayments and Other Receivables](index=28&type=section&id=%E9%A0%90%E4%BB%98%E6%AC%BE%E9%A0%85%E5%8F%8A%E5%85%B6%E4%BB%96%E6%87%89%E6%94%B6%E6%AC%BE%E9%A0%85) Total prepayments and other receivables decreased, mainly comprising prepayments for revenue sharing with content providers and advertising expenses, with impairment provisions made for game-related prepayments that were underperforming or not aligned with future strategies Total Prepayments and Other Receivables | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Prepayments (net) | 858,752 | 875,972 | | Other receivables (net) | 101,357 | 194,223 | | **Total** | **960,109** | **1,070,195** | - Prepayments for revenue sharing with content providers and prepayments for advertising expenses are the main components of prepayments[86](index=86&type=chunk) - Impairment provisions primarily target prepayments for revenue sharing with game developers, involving games that are underperforming or not aligned with future strategies[87](index=87&type=chunk) - The Group will continue to adjust and optimize its product portfolio, gradually discontinuing products that no longer align with its future game business strategy[87](index=87&type=chunk) [Convertible Bonds](index=30&type=section&id=%E5%8F%AF%E6%8F%9B%E8%82%A1%E5%82%B5%E5%88%B8) This section details the convertible bonds due in 2028, including their principal, interest rate, conversion price adjustments, and accounting treatment for liability and equity components, noting no conversions occurred during the reporting period - The Group entered into a subscription agreement on July 24, 2023, for the issuance of convertible bonds due in 2028 with a total principal amount of **HKD 386,000,000** (approximately **RMB 352,804,000**) and an initial conversion price of **HKD 3.64** per share[88](index=88&type=chunk) - Due to the issuance of placing shares, the conversion price of the convertible bonds has been adjusted from **HKD 3.64** to **HKD 3.58** per share, effective from July 31, 2024[88](index=88&type=chunk) Movements in 2028 Convertible Bonds | Item | Liability (RMB thousands) | Other Reserves (RMB thousands) | Total (RMB thousands) | | :--- | :--- | :--- | :--- | | As at January 1, 2025 | 275,608 | 126,702 | 402,310 | | Interest expense | 8,834 | — | 8,834 | | Interest paid | (8,882) | — | (8,882) | | Currency translation difference | (4,193) | — | (4,193) | | **As at June 30, 2025** | **271,367** | **126,702** | **398,069** | - Interest expense is calculated using an effective annual interest rate of **16.07%** for the liability component[91](index=91&type=chunk) - As of June 30, 2025, no 2028 convertible bonds have been converted[92](index=92&type=chunk) [Borrowings](index=32&type=section&id=%E5%80%9F%E6%AC%BE) This section provides detailed information on borrowings, including the composition of non-current and current borrowings, weighted average annual interest rates, and various collateral arrangements Borrowings Composition | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Included in non-current liabilities (secured bank borrowings) | 124,329 | 123,329 | | Included in current liabilities (secured bank borrowings) | 814,750 | 903,746 | | Included in current liabilities (current portion of secured long-term bank borrowings) | 40,000 | 28,000 | | Included in current liabilities (secured other borrowings) | 15,000 | 15,000 | | **Total** | **994,079** | **1,070,075** | - The weighted average annual interest rate for long-term bank borrowings was **3.66%** (2024: **3.79%**), and for short-term bank borrowings was **3.85%** (2024: **4.46%**)[93](index=93&type=chunk) - Borrowings are secured by deposits and shares of subsidiaries, guarantees provided by the Company and/or subsidiaries, pledges of Group assets (such as trade receivables, intellectual property), and pledged certificates of deposit[94](index=94&type=chunk) Borrowings Maturity Dates | Maturity Date | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Within 1 year | 869,750 | 946,746 | | 1 to 2 years | 53,029 | 47,015 | | 2 to 5 years | 30,090 | 30,090 | | Over 5 years | 41,210 | 46,224 | | **Total** | **994,079** | **1,070,075** | [Trade Payables](index=34&type=section&id=%E8%B2%A3%E6%98%93%E6%87%89%E4%BB%98%E6%AC%BE%E9%A0%85) Total trade payables decreased, primarily related to server hosting services, game licenses, and revenue sharing with partner game developers, with a typical credit period of 3 months Ageing Analysis of Trade Payables | Ageing | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Within 3 months | 25,371 | 108,944 | | 3 months to 1 year | 297,500 | 147,700 | | 1 to 2 years | 29,037 | 120,393 | | 2 to 5 years | 1,512 | 1,728 | | **Total** | **353,420** | **378,765** | [Other Information](index=35&type=section&id=%E5%85%B6%E4%BB%96%E4%BF%A1%E6%81%AF) This section covers various other important information, including dividend policy, corporate governance compliance, securities trading standards, share repurchases, audit committee review, and post-reporting period events [Dividends](index=35&type=section&id=%E8%82%A1%E6%81%AF) The Board did not declare an interim dividend for the six months ended June 30, 2025 - The Board did not declare any interim dividend for the six months ended June 30, 2025[96](index=96&type=chunk) [Compliance with Corporate Governance Code](index=35&type=section&id=%E9%81%B5%E5%AE%88%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB%E5%AE%88%E5%89%87) The company has adopted the Corporate Governance Code set out in Appendix C1 of the Listing Rules and complied with all applicable provisions during the reporting period, despite the Chairman and CEO roles being held by the same person, an arrangement the Board believes is in the company's best interest - The Company has adopted the Corporate Governance Code set out in Appendix C1 to the Listing Rules as its own corporate governance code[97](index=97&type=chunk) - Mr Chen Xiangyu concurrently holds the roles of Chairman and Chief Executive Officer, an arrangement the Board believes helps maintain the continuity of the Company's policies and operational stability[97](index=97&type=chunk) - Save as disclosed above, the Company has complied with all applicable code provisions of the Corporate Governance Code during the reporting period[98](index=98&type=chunk) [Standard Code for Securities Transactions](index=36&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) The company has adopted the Standard Code set out in Appendix C3 of the Listing Rules, and all directors confirmed compliance with the code during the reporting period - The Company has adopted the Standard Code set out in Appendix C3 to the Listing Rules as its own code of conduct regarding securities transactions by directors[99](index=99&type=chunk) - Each Director has confirmed that they have complied with the required standards set out in the Standard Code during the six months ended June 30, 2025[99](index=99&type=chunk) [Purchase, Sale or Redemption of Listed Securities](index=36&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%E4%B8%8A%E5%B8%82%E8%AD%89%E5%88%B8) For the six months ended June 30, 2025, the company repurchased 20,856,800 shares on the Stock Exchange for a total consideration of HKD 35,791,300, holding 23,390,000 treasury shares at period-end Share Repurchase Details | Month | Number of Shares Repurchased | Total Consideration (before expenses, HKD) | | :--- | :--- | :--- | | January 2025 | 20,856,800 | 35,791,300 | | **Total** | **20,856,800** | **35,791,300** | - As of the end of the reporting period, the Company held **23,390,000** treasury shares[101](index=101&type=chunk) [Audit Committee](index=36&type=section&id=%E5%AF%A9%E6%A0%B8%E5%A7%94%E5%93%A1%E6%9C%83) The Audit Committee has reviewed the Group's unaudited consolidated financial statements, interim results announcement, accounting standards and practices for the six months ended June 30, 2025, and discussed matters related to risk management, internal control, and financial reporting - The Audit Committee has reviewed the Group's unaudited consolidated financial statements for the six months ended June 30, 2025, and this interim results announcement[102](index=102&type=chunk) - The Audit Committee has also reviewed the accounting standards and practices adopted by the Group and discussed and reviewed matters relating to risk management, internal control, and financial reporting[102](index=102&type=chunk) [Events After the Reporting Period](index=37&type=section&id=%E6%9C%9F%E5%BE%8C%E4%BA%8B%E9%A0%85) On July 28, 2025, the company announced the placement and issuance of 38,085,937 shares to PLR Worldwide Sales Limited, with gross proceeds of approximately HKD 38,999,999.488, intended to offset royalties payable to the subscriber - On July 28, 2025, the Company announced the placement and issuance of a total of **38,085,937** shares to the subscriber, PLR Worldwide Sales Limited[103](index=103&type=chunk) - The gross proceeds from the subscription shares amounted to approximately **HKD 38,999,999.488**, and the issuance was completed on August 11, 2025[103](index=103&type=chunk) - This subscription aims to offset royalties payable by Shenzhen iDreamSky to the subscriber on an equivalent basis[103](index=103&type=chunk) [Publication of Interim Results and 2025 Interim Report](index=37&type=section&id=%E5%88%8A%E7%99%BC%E4%B8%AD%E6%9C%9F%E6%A5%AD%E7%B8%BE%E5%8F%8A2025%E5%B9%B4%E4%B8%AD%E6%9C%9F%E5%A0%B1%E5%91%8A) This interim results announcement has been published on the Stock Exchange website and the company's website, and the interim report will be published in due course - This interim results announcement is published on the website of the Stock Exchange (www.hkexnews.hk) and the Company's website (www.idreamsky.com)[104](index=104&type=chunk) - The Group's interim report (containing all information required by the Listing Rules) will be published on the websites of the Stock Exchange and the Company in due course[104](index=104&type=chunk) [Definitions](index=37&type=section&id=%E5%AE%9A%E7%BE%A9) This section provides definitions for key terms and abbreviations used in the announcement to ensure consistent understanding of the report's content - Provides definitions for terms such as "Board", "Super Endless", "Alibaba Cloud Tongyi", "Audit Committee", "Board", "Corporate Governance Code", "Company", "Group", "HKD", "Hong Kong", "IAS", "IFRS", "IP", "KOC", "KOL", "Listing Rules", "MAU", "Standard Code", "China", "PRC Consolidated Affiliated Entities", "PVE", "Reporting Period", "RMB", "Shares", "Shenzhen iDreamSky", "Steam", "Stock Exchange", "Tencent", "Tencent Cloud", "Tencent Group", "Treasury Shares", "Subsidiary", "USD", and "%"[105](index=105&type=chunk)[106](index=106&type=chunk)[107](index=107&type=chunk)[108](index=108&type=chunk)[110](index=110&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佈之內容概不負責， 對其準確性或完整性亦不發表任何聲明，並明確表示概不就因本公佈全部或任何 部分內容而產生或因倚賴該等內容而引致之任何損失承擔任何責任。 Wuxi Life International Holdings Group Limited ⽝䏝㯹◉教㉥佟斄◖㗇攎 ⊶ （於開曼群島註冊成立之有限公司） （股份代號：8148） 中期業績公佈 截至二零二五年六月三十日止六個月 香港聯合交易所有限公司（「聯交所」）GEM的特色 GEM的定位，乃為中小型公司提供一個上市的市場，此等公司相比起其他在聯交 所上市的公司帶有較高投資風險。有意投資的人士應了解投資於該等公司的潛在 風險，並應經過審慎周詳的考慮後方作出投資決定。 由於GEM上市公司普遍為中小型公司，在GEM買賣的證券可能會較於主板買賣之 證券承受較大的市場波動風險，同時無法保證在GEM買賣的證券會有高流通量的 市場。 本公佈乃遵照聯交所GEM證券上市規則（「GEM上市規則」）而刊載，旨在提供有 關悟喜生活國際控股集團有限公司（「本公司」）的資料，本公司的董事（「董事」） 願就本公佈的資料共同及個別地承 ...

[Financial Summary](index=1&type=section&id=Financial%20Summary) [Financial Performance Overview](index=1&type=section&id=1.1%20Financial%20Performance%20Overview) For the six months ended June 30, 2025, revenue slightly increased by 1.3%, while gross profit, loss before income tax, loss for the period, and adjusted net loss significantly deteriorated, with adjusted net loss increasing by 120% year-on-year | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | Period Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 328,287 | 324,188 | 1.3 | | Gross Profit | 93,251 | 112,737 | (17.3) | | Loss before Income Tax | (114,586) | (84,001) | 36.4 | | Loss for the Period | (113,574) | (82,904) | 37.0 | | Adjusted Net Loss for the Period | (74,460) | (33,848) | 120.0 | | Adjusted EBITDA for the Period | (63,820) | (21,194) | 201.1 | [Unaudited Condensed Consolidated Interim Statement of Comprehensive Income](index=2&type=section&id=Unaudited%20Condensed%20Consolidated%20Interim%20Statement%20of%20Comprehensive%20Income) [Income Statement Overview](index=2&type=section&id=2.1%20Income%20Statement%20Overview) For the six months ended June 30, 2025, revenue slightly increased to RMB 328,287 thousand, but increased cost of revenue led to a gross profit decline, with R&D expenses and goodwill impairment losses expanding the loss for the period to RMB 113,574 thousand | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Revenue | 328,287 | 324,188 | | Cost of Revenue | (235,036) | (211,451) | | Gross Profit | 93,251 | 112,737 | | Selling and Marketing Expenses | (42,006) | (69,289) | | General and Administrative Expenses | (74,503) | (77,375) | | Research and Development Expenses | (56,348) | (11,552) | | Goodwill Impairment | (39,000) | (51,000) | | Operating Loss | (115,051) | (84,468) | | Loss for the Period | (113,574) | (82,904) | - Research and development expenses significantly increased from **RMB 11,552 thousand** in the same period of 2024 to **RMB 56,348 thousand** in 2025, a **388% increase**[5](index=5&type=chunk) - Loss for the period expanded from **RMB 82,904 thousand** in the same period of 2024 to **RMB 113,574 thousand** in 2025, a **37% increase**[5](index=5&type=chunk) [Other Comprehensive Income and Loss Per Share](index=3&type=section&id=2.2%20Other%20Comprehensive%20Income%20and%20Loss%20Per%20Share) Total other comprehensive income increased during the period, yet total comprehensive loss for the period expanded, leading to an increase in basic and diluted loss per share due to the widened loss | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Total Other Comprehensive Income | 2,487 | 1,069 | | Total Comprehensive Loss for the Period | (111,087) | (81,835) | | Loss for the Period Attributable to Owners of the Company | (112,999) | (82,354) | | Basic and Diluted Loss Per Share (RMB) | (1.80) | (1.31) | [Unaudited Condensed Consolidated Interim Statement of Financial Position](index=4&type=section&id=Unaudited%20Condensed%20Consolidated%20Interim%20Statement%20of%20Financial%20Position) [Changes in Asset Structure](index=4&type=section&id=3.1%20Changes%20in%20Asset%20Structure) As of June 30, 2025, total assets decreased from year-end 2024, mainly due to reductions in goodwill, prepayments, financial assets at fair value, and cash and cash equivalents | Metric | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Total Non-current Assets | 127,054 | 163,741 | | Goodwill | 69,452 | 108,452 | | Total Current Assets | 359,436 | 457,377 | | Trade Receivables | 93,014 | 81,983 | | Prepayments, Deposits and Other Receivables | 30,616 | 76,523 | | Financial Assets Measured at Fair Value Through Profit or Loss | 20,796 | 71,040 | | Cash and Cash Equivalents | 129,196 | 197,880 | | Total Assets | 486,490 | 621,118 | - Goodwill decreased from **RMB 108,452 thousand** at the end of 2024 to **RMB 69,452 thousand** as of June 30, 2025, reflecting impairment impact[8](index=8&type=chunk) - Cash and cash equivalents decreased from **RMB 197,880 thousand** at the end of 2024 to **RMB 129,196 thousand** as of June 30, 2025[8](index=8&type=chunk) [Equity and Liability Structure](index=5&type=section&id=3.2%20Equity%20and%20Liability%20Structure) As of June 30, 2025, total equity significantly decreased due to increased accumulated losses, while total liabilities decreased, primarily driven by a reduction in current liabilities | Metric | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Accumulated Losses | (7,688,537) | (7,575,538) | | Equity Attributable to Owners of the Company | 189,058 | 299,426 | | Total Equity | 185,894 | 296,814 | | Total Non-current Liabilities | 16,250 | 10,282 | | Total Current Liabilities | 284,346 | 314,022 | | Total Liabilities | 300,596 | 324,304 | - Equity attributable to owners of the company decreased from **RMB 299,426 thousand** at the end of 2024 to **RMB 189,058 thousand** as of June 30, 2025, a decrease of approximately **36.8%**[9](index=9&type=chunk) [Unaudited Condensed Consolidated Interim Statement of Cash Flows](index=6&type=section&id=Unaudited%20Condensed%20Consolidated%20Interim%20Statement%20of%20Cash%20Flows) [Cash Flow Overview](index=6&type=section&id=4.1%20Cash%20Flow%20Overview) For the six months ended June 30, 2025, net cash used in operating activities significantly increased, while net cash from investing activities substantially decreased, leading to a net reduction in cash and cash equivalents at period-end, contrasting with the prior year's net increase | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | (115,811) | (43,206) | | Net Cash From Investing Activities | 51,052 | 206,236 | | Net Cash Used in Financing Activities | (5,517) | (8,523) | | Net (Decrease) / Increase in Cash and Cash Equivalents | (70,276) | 154,507 | | Cash and Cash Equivalents at End of Period | 126,389 | 359,735 | - Net cash used in operating activities increased from **RMB 43,206 thousand** in the same period of 2024 to **RMB 115,811 thousand** in 2025, an increase of approximately **168%**[11](index=11&type=chunk) - Net cash from investing activities significantly decreased from **RMB 206,236 thousand** in the same period of 2024 to **RMB 51,052 thousand** in 2025, a decrease of approximately **75%**[11](index=11&type=chunk) [Notes to the Financial Statements](index=8&type=section&id=Notes%20to%20the%20Financial%20Statements) [General Information](index=8&type=section&id=5.1%20General%20Information) GoGoX Holdings Limited, incorporated in the Cayman Islands, primarily offers logistics and delivery solution platform services across Mainland China, Hong Kong, Singapore, South Korea, and other Southeast Asian nations - The company was incorporated as an exempted company in the Cayman Islands on **June 8, 2017**[14](index=14&type=chunk) - The Group primarily provides logistics and delivery solution services and platform services connecting transacting users with logistics and delivery service providers using technology in Mainland China, Hong Kong, Singapore, South Korea, and other Southeast Asian countries[14](index=14&type=chunk) [Basis of Preparation](index=8&type=section&id=5.2%20Basis%20of%20Preparation) Interim financial information is prepared under IAS 34, to be read with the 2024 annual consolidated financial statements, with management's judgments, estimates, and assumptions consistent with the annual report - The interim financial information is prepared in accordance with International Accounting Standard 34 'Interim Financial Reporting' issued by the International Accounting Standards Board[15](index=15&type=chunk) - The interim financial information should be read in conjunction with the company's consolidated financial statements for the year ended **December 31, 2024**[15](index=15&type=chunk) [Changes in Accounting Policies and Disclosures](index=9&type=section&id=5.3%20Changes%20in%20Accounting%20Policies%20and%20Disclosures) The Group's accounting policies align with year-end 2024, with the adoption of IAS 21 (amended) 'Lack of Exchangeability' having no material impact, while new, un-effective standards are currently being assessed for potential effects - The Group has adopted IAS 21 (amended) 'Lack of Exchangeability', which is not expected to have a material impact on current or future periods[17](index=17&type=chunk) - Several new and amended standards have been issued but are not yet effective, including IFRS 18 'Presentation and Disclosure in Financial Statements' and IFRS 19 'Subsidiaries without Public Accountability: Disclosures', and the Group is assessing their impact[18](index=18&type=chunk)[19](index=19&type=chunk) [Segment Reporting](index=9&type=section&id=5.4%20Segment%20Reporting) The Group reports two segments: Mainland China and Hong Kong & Overseas, with performance assessed by revenue; as of June 30, 2025, Hong Kong & Overseas revenue significantly increased its share, offsetting the decline in Mainland China - The Group's reportable segments are Mainland China business and Hong Kong and Overseas business[22](index=22&type=chunk) | Revenue Source | 2025 Mainland China (RMB thousands) | 2025 Hong Kong & Overseas (RMB thousands) | 2025 Total (RMB thousands) | 2024 Mainland China (RMB thousands) | 2024 Hong Kong & Overseas (RMB thousands) | 2024 Total (RMB thousands) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Logistics Services for Enterprise Customers | 39,641 | 194,249 | 233,890 | 37,230 | 174,351 | 211,581 | | Service Revenue from Logistics Service Platform | 26,777 | 36,213 | 62,990 | 47,952 | 33,114 | 81,066 | | Value-Added Services | 1,973 | 29,434 | 31,407 | 4,519 | 27,022 | 31,541 | | **Total** | **68,391** | **259,896** | **328,287** | **89,701** | **234,487** | **324,188** | - As of June 30, 2025, Hong Kong and Overseas business revenue accounted for **79.2%** of total revenue, while Mainland China business revenue decreased by **23.8%**[23](index=23&type=chunk) [Expense Details](index=11&type=section&id=5.5%20Expense%20Details) During the reporting period, total cost of revenue, selling and marketing, R&D, and general and administrative expenses increased, with significant growth in R&D and logistics service provider subcontracting fees | Expense Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Research and Development Expenses (a logistics business service project) | 47,635 | — | | Employee Benefit Expenses | 78,989 | 93,263 | | Incentives to Platform Service Transacting Users | 1,605 | 10,498 | | Subcontracting Fees for Logistics Service Providers | 211,675 | 189,028 | | Total Cost of Revenue, Selling and Marketing Expenses, Research and Development Expenses, and General and Administrative Expenses | 407,893 | 369,667 | - Research and development expenses for a logistics business service project amounted to **RMB 47,635 thousand**, compared to zero in the prior year period[25](index=25&type=chunk) - Incentives to platform service transacting users significantly decreased from **RMB 10,498 thousand** in 2024 to **RMB 1,605 thousand** in 2025[25](index=25&type=chunk) [Net Finance Income](index=12&type=section&id=5.6%20Net%20Finance%20Income) For the six months ended June 30, 2025, net finance income remained stable, primarily consisting of interest income from bank deposits and interest expense on lease liabilities | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Interest Income from Bank Deposits | 833 | 1,080 | | Interest Expense on Lease Liabilities | (368) | (613) | | Net Finance Income | 465 | 467 | [Income Tax Credit](index=12&type=section&id=5.7%20Income%20Tax%20Credit) The Group's income tax credit remained stable, with a 25% corporate income tax rate in Mainland China, no assessable profits tax in Hong Kong, tax exemptions in Cayman Islands and BVI, and no material impact from OECD Pillar Two Model Rules | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Current Income Tax | (89) | — | | Deferred Income Tax | 1,101 | 1,097 | | Total Income Tax Credit | 1,012 | 1,097 | - The corporate income tax rate for subsidiaries in Mainland China is **25%**[28](index=28&type=chunk) - No provision for profits tax has been made for Hong Kong operations due to no assessable profits[29](index=29&type=chunk) - The preliminary assessment of the impact of the OECD Pillar Two Model Rules on the Group is not material[31](index=31&type=chunk) [Loss Per Share](index=14&type=section&id=5.8%20Loss%20Per%20Share) Basic loss per share attributable to owners of the company increased from RMB 1.31 in 2024 to RMB 1.80 in 2025 due to expanded losses, with diluted loss per share remaining identical to basic loss per share after share consolidation adjustments | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Loss for the Period Attributable to Owners of the Company Used in Calculating Basic Loss Per Share | (112,999) | (82,354) | | Weighted Average Number of Ordinary Shares in Issue (in thousands of shares) | 62,883 | 62,847 | | Basic Loss Per Share (expressed in RMB per share) | (1.80) | (1.31) | - The company implemented a share consolidation on **April 25, 2025**, where every ten shares were consolidated into one, and the weighted average number of shares for calculating loss per share has been adjusted[34](index=34&type=chunk) - As the Group incurred losses, diluted loss per share is the same as basic loss per share[35](index=35&type=chunk) [Dividends](index=14&type=section&id=5.9%20Dividends) Neither the company nor its subsidiaries paid or declared any dividends for the six months ended June 30, 2025 and 2024 - For the six months ended **June 30, 2025** and **2024**, neither the company nor its subsidiaries paid or declared any dividends[36](index=36&type=chunk) [Goodwill](index=15&type=section&id=5.10%20Goodwill) As of June 30, 2025, goodwill's net carrying amount decreased due to impairment of the Mainland China business, with management recognizing an impairment loss of RMB 39,000 thousand based on revised five-year forecasts | Metric | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Net Carrying Amount at Beginning of Period | 108,452 | 206,894 | | Impairment | (39,000) | (98,518) | | Net Carrying Amount at End of Period | 69,452 | 108,452 | - Goodwill primarily arose from the acquisition of subsidiaries and structured entities of GoGo Tech Holdings Limited (GoGoVan) in **2017**[38](index=38&type=chunk) - Due to reduced revenue, increased competition, and strategic shifts in the Mainland China market, management revised its five-year forecast, leading to the recognition of an impairment loss of **RMB 39,000 thousand** for the Mainland China business cash-generating unit[39](index=39&type=chunk)[40](index=40&type=chunk) [Trade Receivables](index=17&type=section&id=5.11%20Trade%20Receivables) As of June 30, 2025, net trade receivables increased, with typical 30-60 day credit terms, and a rise in receivables aged over 90 days | Metric | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Trade Receivables | 111,520 | 100,762 | | Less: Loss Allowance | (18,506) | (18,779) | | Net Trade Receivables | 93,014 | 81,983 | | Aging | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | 0 to 30 days | 64,134 | 56,523 | | Over 90 days | 9,572 | 7,748 | [Financial Assets Measured at Fair Value Through Profit or Loss](index=17&type=section&id=5.12%20Financial%20Assets%20Measured%20at%20Fair%20Value%20Through%20Profit%20or%20Loss) As of June 30, 2025, wealth management product balances significantly decreased, with the company redeeming one product and recognizing a gain on disposal | Metric | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Wealth Management Products | 20,796 | 71,040 | - The Group redeemed one of its wealth management products during the period and recognized a gain on disposal of **RMB 1,425 thousand**[42](index=42&type=chunk) [Trade Payables](index=18&type=section&id=5.13%20Trade%20Payables) As of June 30, 2025, total trade payables slightly increased, predominantly within the 0-30 day aging category | Aging | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | 0 to 30 days | 39,822 | 36,732 | | 31 to 60 days | 2,584 | 3,662 | | 61 to 90 days | 731 | 1,030 | | Over 90 days | 3,808 | 3,060 | | **Total** | **46,945** | **44,484** | [Management Discussion and Analysis](index=19&type=section&id=Management%20Discussion%20and%20Analysis) [Business Review](index=19&type=section&id=6.1%20Business%20Review) The Group provides logistics technology services via its digital platform; for the six months ended June 30, 2025, total revenue grew 1.3% year-on-year, driven by strong Hong Kong and overseas performance offsetting Mainland China's decline, while the company optimizes platform functions, expands enterprise services, and develops value-added services [Overview](index=19&type=section&id=6.1.1%20Overview) GoGoX, a leading logistics technology company operating in six Asian countries, achieved RMB 328.3 million in total revenue, a 1.3% year-on-year increase, with Hong Kong and overseas businesses contributing 79.2% and offsetting Mainland China's challenges - The Group operates two brands, 'Kuaigou Dache' and 'GoGoX', in over **370 cities** across **six Asian countries and regions**, including Mainland China, Hong Kong, Singapore, South Korea, India, and Vietnam[45](index=45&type=chunk) - For the six months ended June 30, 2025, total revenue was **RMB 328.3 million**, representing a **1.3% year-on-year increase**[45](index=45&type=chunk) - Hong Kong and overseas business revenue increased by **10.8%** to **RMB 259.9 million**, accounting for **79.2%** of total revenue, offsetting a **23.8% decline** in Mainland China revenue to **RMB 68.4 million**[45](index=45&type=chunk) - As of June 30, 2025, the platform had accumulated **34.9 million registered users** and **7.1 million registered drivers**, completed **5.5 million transportation orders**, and achieved a Gross Transaction Value (GTV) of **RMB 709.2 million**[46](index=46&type=chunk) [Platform Services](index=19&type=section&id=6.1.2%20Platform%20Services) Platform services revenue reached RMB 63.0 million, representing 19.2% of total revenue, primarily driven by Hong Kong and overseas markets, as the company optimizes platform functions, launches new services, and leverages AI and machine learning for efficiency - Platform services revenue was **RMB 63.0 million**, accounting for **19.2%** of the Group's total revenue[48](index=48&type=chunk) - Platform services revenue in Hong Kong and overseas markets increased by **9.4%** to **RMB 36.2 million**[48](index=48&type=chunk) - GTV generated from platform services reached **RMB 474.5 million**, with **4.8 million transportation orders** completed[48](index=48&type=chunk) - The 'GoGoX Reserve Membership Program' was piloted in Hong Kong, 'Premium Van' and 'Pet-Friendly' delivery services were launched, and AI and machine learning technologies were applied to enhance order dispatch efficiency[47](index=47&type=chunk)[48](index=48&type=chunk) [Enterprise Services](index=20&type=section&id=6.1.3%20Enterprise%20Services) Enterprise services revenue grew steadily by 10.5% to RMB 233.9 million, comprising 71.2% of total revenue, driven by Hong Kong and overseas operations, as the company transformed into a one-stop logistics partner, expanding services and advancing cold chain logistics in South Korea - Enterprise services revenue reached **RMB 233.9 million**, a steady year-on-year increase of **10.5%**, accounting for **71.2%** of the Group's total revenue[49](index=49&type=chunk) - Enterprise services revenue in Hong Kong and overseas businesses increased by **11.4%** to **RMB 194.2 million**[49](index=49&type=chunk) - Over **72,200 enterprise customers** have been served cumulatively, with GTV reaching **RMB 234.7 million** during the reporting period[49](index=49&type=chunk) - Strategic transformation into a one-stop logistics partner, expanding service scope to include integrated services like sorting and warehousing, and advancing specialized cold chain logistics in South Korea[49](index=49&type=chunk)[50](index=50&type=chunk) [Value-Added Services](index=21&type=section&id=6.1.4%20Value-Added%20Services) Value-added services revenue was RMB 31.4 million, a slight 0.3% year-on-year decrease, mainly due to Mainland China business contraction, partially offset by 8.9% growth in Hong Kong and overseas markets, as the company relaunched fuel card services and expanded insurance offerings - Value-added services revenue was **RMB 31.4 million**, a slight year-on-year decrease of **0.3%**, accounting for **9.6%** of the Group's total revenue[51](index=51&type=chunk) - Value-added services revenue in Hong Kong and overseas markets grew strongly by **8.9%** to **RMB 29.4 million**, benefiting from the relaunch of fuel card business client collaborations and expanded insurance product offerings[51](index=51&type=chunk) [Business Outlook](index=21&type=section&id=6.1.5%20Business%20Outlook) The Group plans to deepen platform services, expand enterprise clientele, innovate value-added services, and optimize operations with AI and machine learning, focusing on Asia-Pacific expansion and premium service launches while monitoring technology and cybersecurity risks - The Group will continue to focus on deepening platform services, expanding its enterprise customer base, and driving innovation in value-added services[52](index=52&type=chunk) - Leveraging AI and machine learning technologies to continuously optimize operational efficiency and enhance service quality[52](index=52&type=chunk) - Further expansion in the Asia-Pacific region and the launch of new premium services will be key future growth drivers[52](index=52&type=chunk) [Financial Review](index=22&type=section&id=6.2%20Financial%20Review) The Group experienced slight revenue growth but declining gross profit and margin, with operating and period losses significantly expanding due to increased R&D expenses and continued goodwill impairment, leading to substantial deterioration in both non-IFRS adjusted net loss and adjusted EBITDA [Overview](index=22&type=section&id=6.2.1%20Overview) For the six months ended June 30, 2025, total revenue was RMB 328.3 million (up 1.3%), gross profit was RMB 93.3 million (down 17.2%), and both adjusted net loss (RMB 74.5 million) and adjusted EBITDA (RMB 63.8 million) significantly deteriorated - Total revenue was **RMB 328.3 million**, an increase of **1.3%** compared to the same period last year[53](index=53&type=chunk) - Gross profit was **RMB 93.3 million**, a year-on-year decrease of **17.2%**[53](index=53&type=chunk) - Adjusted net loss was **RMB 74.5 million**, and adjusted EBITDA was **RMB 63.8 million**[53](index=53&type=chunk) - Basic and diluted loss per share were **RMB 1.80** and **RMB 1.31**, respectively[53](index=53&type=chunk) [Revenue](index=22&type=section&id=6.2.2%20Revenue) First-half 2025 revenue was RMB 328.3 million, up 1.3% year-on-year, with enterprise services growing 10.5%, platform services declining 22.3%, and value-added services slightly decreasing by 0.3% - Revenue for the first half of **2025** was **RMB 328.3 million**, an increase of **1.3%** compared to the same period in **2024**[54](index=54&type=chunk) | Revenue Source | 2025 Total (RMB thousands) | 2024 Total (RMB thousands) | Period Change (RMB thousands) | | :--- | :--- | :--- | :--- | | Logistics Services for Enterprise Customers | 233,890 | 211,581 | 22,309 | | Service Revenue from Logistics Service Platform | 62,990 | 81,066 | (18,076) | | Value-Added Services | 31,407 | 31,541 | (134) | | **Total** | **328,287** | **324,188** | **4,099** | - Enterprise services revenue increased by **10.5%** to **RMB 233.9 million**, primarily due to increased shipment volumes from enterprise customers in Mainland China, Hong Kong, and overseas markets[58](index=58&type=chunk) - Platform services revenue decreased by **22.3%** to **RMB 63.0 million**, primarily due to intensified competition and strategic shifts in the Mainland China market[59](index=59&type=chunk) [Cost of Revenue](index=24&type=section&id=6.2.3%20Cost%20of%20Revenue) Cost of revenue increased by 11.1% from RMB 211.5 million in 2024 to RMB 235.0 million in 2025, mainly due to higher subcontracting fees driven by increased shipment orders - Cost of revenue increased by **11.1%** from **RMB 211.5 million** to **RMB 235.0 million**[62](index=62&type=chunk) - Primarily due to an increase of **RMB 22.6 million** in subcontracting fees, driven by a higher volume of shipment orders in Mainland China, Hong Kong, and overseas markets[62](index=62&type=chunk) [Gross Profit and Gross Margin](index=24&type=section&id=6.2.4%20Gross%20Profit%20and%20Gross%20Margin) Gross profit decreased from RMB 112.7 million in 2024 to RMB 93.3 million in 2025, with gross margin declining from 34.8% to 28.4% | Metric | 2025 (RMB millions) | 2024 (RMB millions) | | :--- | :--- | :--- | | Gross Profit | 93.3 | 112.7 | | Gross Margin | 28.4% | 34.8% | [Selling and Marketing Expenses](index=24&type=section&id=6.2.5%20Selling%20and%20Marketing%20Expenses) Selling and marketing expenses decreased by 39.4% from RMB 69.3 million in 2024 to RMB 42.0 million in 2025, mainly due to reduced incentives for platform service users and lower employee benefit expenses - Selling and marketing expenses decreased by **39.4%** to **RMB 42.0 million**[64](index=64&type=chunk) - Primarily due to a **RMB 9.0 million reduction** in incentives for platform service transacting users and a **RMB 9.7 million reduction** in employee benefit expenses[64](index=64&type=chunk) [General and Administrative Expenses](index=24&type=section&id=6.2.6%20General%20and%20Administrative%20Expenses) General and administrative expenses decreased by 3.7% from RMB 77.4 million in 2024 to RMB 74.5 million in 2025, mainly due to reduced employee benefit expenses - General and administrative expenses decreased by **3.7%** to **RMB 74.5 million**[65](index=65&type=chunk) - Primarily due to a reduction in employee benefit expenses, including share-based compensation[65](index=65&type=chunk) [Research and Development Expenses](index=25&type=section&id=6.2.7%20Research%20and%20Development%20Expenses) Research and development expenses significantly increased by 385.3% from RMB 11.6 million in 2024 to RMB 56.3 million in 2025, primarily due to a logistics business service project expense - Research and development expenses increased by **385.3%** to **RMB 56.3 million**[66](index=66&type=chunk) - Primarily due to expenses of **RMB 47.6 million** for a logistics business service project[66](index=66&type=chunk) [Reversal of Impairment Loss on Financial Assets](index=25&type=section&id=6.2.8%20Reversal%20of%20Impairment%20Loss%20on%20Financial%20Assets) Reversal of impairment loss on financial assets decreased from RMB 4.4 million in 2024 to RMB 1.4 million in 2025, primarily due to improved trade receivables management | Metric | 2025 (RMB millions) | 2024 (RMB millions) | | :--- | :--- | :--- | | Reversal of Impairment Loss on Financial Assets | 1.4 | 4.4 | - Primarily due to improved management of trade receivables[67](index=67&type=chunk) [Goodwill Impairment](index=25&type=section&id=6.2.9%20Goodwill%20Impairment) For the six months ended June 30, 2025, the Mainland China business cash-generating unit recorded a goodwill impairment loss of RMB 39.0 million, primarily due to intensified market competition and strategic shifts impacting revenue and profit growth - The Mainland China business cash-generating unit recorded a goodwill impairment loss of **RMB 39.0 million**[68](index=68&type=chunk) - The impairment was due to intensified competition in the Mainland China business and strategic shifts aimed at optimizing service offerings and improving profitability, which led to lower-than-expected revenue and profit growth[68](index=68&type=chunk) [Other Income](index=25&type=section&id=6.2.10%20Other%20Income) Other income significantly decreased by 88.6% from RMB 4.4 million in 2024 to RMB 0.5 million in 2025, primarily due to reduced government grants | Metric | 2025 (RMB millions) | 2024 (RMB millions) | | :--- | :--- | :--- | | Other Income | 0.5 | 4.4 | - Primarily due to reduced government grants received in Mainland China, Hong Kong, and overseas during the first half of **2025**[69](index=69&type=chunk) [Net Other Gains](index=26&type=section&id=6.2.11%20Net%20Other%20Gains) Net other gains for the first half of 2025 were RMB 1.7 million, mainly from disposal of financial assets at fair value, contrasting with RMB 3.3 million in 2024, primarily from exchange gains | Metric | 2025 (RMB millions) | 2024 (RMB millions) | | :--- | :--- | :--- | | Net Other Gains | 1.7 | 3.3 | - In **2025**, primarily comprised of gains on disposal of financial assets measured at fair value through profit or loss[70](index=70&type=chunk) [Operating Loss](index=26&type=section&id=6.2.12%20Operating%20Loss) Operating loss increased by 36.2% from RMB 84.5 million in 2024 to RMB 115.1 million in 2025 | Metric | 2025 (RMB millions) | 2024 (RMB millions) | | :--- | :--- | :--- | | Operating Loss | (115.1) | (84.5) | [Net Finance Income](index=26&type=section&id=6.2.13%20Net%20Finance%20Income) Net finance income remained stable at RMB 0.5 million for both the six months ended June 30, 2025 and 2024 | Metric | 2025 (RMB millions) | 2024 (RMB millions) | | :--- | :--- | :--- | | Net Finance Income | 0.5 | 0.5 | [Income Tax Credit](index=26&type=section&id=6.2.14%20Income%20Tax%20Credit) Income tax credit remained stable at RMB 1.0 million in 2025 and RMB 1.1 million in 2024 | Metric | 2025 (RMB millions) | 2024 (RMB millions) | | :--- | :--- | :--- | | Income Tax Credit | 1.0 | 1.1 | [Loss for the Period](index=26&type=section&id=6.2.15%20Loss%20for%20the%20Period) Loss for the period increased by 37.0% from RMB 82.9 million in 2024 to RMB 113.6 million in 2025 | Metric | 2025 (RMB millions) | 2024 (RMB millions) | | :--- | :--- | :--- | | Loss for the Period | (113.6) | (82.9) | [Non-IFRS Measures](index=26&type=section&id=6.2.16%20Non-IFRS%20Measures) Adjusted net loss and adjusted EBITDA significantly deteriorated, increasing by 120.0% and 201.1% respectively, primarily due to the exclusion of non-cash items like share-based compensation and goodwill impairment - Adjusted net loss was **RMB 74.5 million**, an increase of **120.0%** compared to the same period in **2024**[76](index=76&type=chunk) - Adjusted EBITDA was negative **RMB 63.8 million**, an increase of **201.1%** compared to the same period in **2024**[76](index=76&type=chunk) | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Loss for the Period | (113,574) | (82,904) | | Adjusted for: Share-based Compensation Expenses | 114 | (1,944) | | Adjusted for: Goodwill Impairment | 39,000 | 51,000 | | **Adjusted Net Loss for the Period** | **(74,460)** | **(33,848)** | | Adjusted for: Income Tax Credit | (1,012) | (1,097) | | Adjusted for: Depreciation and Amortization | 12,117 | 14,218 | | Adjusted for: Net Finance Income | (465) | (467) | | **Adjusted EBITDA for the Period** | **(63,820)** | **(21,194)** | [Capital Structure, Liquidity and Capital Resources](index=28&type=section&id=Capital%20Structure%2C%20Liquidity%20and%20Capital%20Resources) [Capital Structure and Cash Flows](index=28&type=section&id=7.1%20Capital%20Structure%20and%20Cash%20Flows) As of June 30, 2025, the company's issued share capital was approximately USD 1,572.4, with total equity around RMB 185.9 million; net cash used in operating activities significantly increased, while net cash from investing activities substantially decreased, leading to a net reduction in cash and cash equivalents at period-end - The company approved a share consolidation on **April 23, 2025**, where every **10 shares were consolidated into 1 share**[80](index=80&type=chunk) - As of June 30, 2025, the company's issued share capital was approximately **USD 1,572.4**, and total equity was approximately **RMB 185.9 million**[80](index=80&type=chunk) - As of June 30, 2025, cash and cash equivalents amounted to **RMB 129.2 million**[80](index=80&type=chunk) | Cash Flow Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | (115,811) | (43,206) | | Net Cash From Investing Activities | 51,052 | 206,236 | | Net Cash Used in Financing Activities | (5,517) | (8,523) | | Net (Decrease) / Increase in Cash and Cash Equivalents | (70,276) | 154,507 | | Cash and Cash Equivalents at End of Period | 126,389 | 359,735 | [Material Investments Held](index=29&type=section&id=Material%20Investments%20Held) [Changes in Material Investments](index=29&type=section&id=8.1%20Changes%20in%20Material%20Investments) As of June 30, 2025, the Group held no material investments, having redeemed all participating shares in an independent portfolio fund in March 2025 for approximately HKD 66.2 million - As of June 30, 2025, the Group held **zero material investments** (December 31, 2024: **RMB 60.2 million**)[83](index=83&type=chunk) - On **March 19, 2025**, the company submitted an application to redeem all its participating shares in an independent portfolio fund, receiving proceeds of approximately **HKD 66,179,785.77**[84](index=84&type=chunk) [Future Plans for Material Investments and Capital Assets](index=30&type=section&id=Future%20Plans%20for%20Material%20Investments%20and%20Capital%20Assets) [Future Investment Plans](index=30&type=section&id=9.1%20Future%20Investment%20Plans) As of June 30, 2025, the Group had no other future plans for material investments and capital assets - As of June 30, 2025, the Group had **no other plans for material investments and capital assets**[85](index=85&type=chunk) [Material Acquisitions and/or Disposals of Subsidiaries and Affiliated Companies](index=30&type=section&id=Material%20Acquisitions%20and%2For%20Disposals%20of%20Subsidiaries%20and%20Affiliated%20Companies) [Acquisitions and Disposals During the Reporting Period](index=30&type=section&id=10.1%20Acquisitions%20and%20Disposals%20During%20the%20Reporting%20Period) Except as disclosed, for the six months ended June 30, 2025, the Group had no other material acquisitions or disposals of subsidiaries and affiliated companies - Except as disclosed in this announcement, for the six months ended **June 30, 2025**, the Group had **no other material acquisitions and/or disposals of subsidiaries and affiliated companies**[86](index=86&type=chunk) [Employees and Remuneration Policy](index=30&type=section&id=Employees%20and%20Remuneration%20Policy) [Employee Headcount and Structure](index=30&type=section&id=11.1%20Employee%20Headcount%20and%20Structure) As of June 30, 2025, the Group had 579 full-time employees, a decrease from 2024, with user service and operations personnel forming the largest segment - As of June 30, 2025, the Group had **579 full-time employees** (June 30, 2024: **728 employees**)[87](index=87&type=chunk) | Function | Number of Employees | % of Total | | :--- | :--- | :--- | | Sales and Marketing | 162 | 28.0 | | User Service and Operations | 260 | 44.9 | | Research and Development | 69 | 11.9 | | Management and Administration | 88 | 15.2 | | **Total** | **579** | **100.0** | [Remuneration and Benefits](index=30&type=section&id=11.2%20Remuneration%20and%20Benefits) The company provides competitive salaries, performance bonuses, and other incentives, participates in social security schemes, and saw employee benefit expenses, including share-based compensation, decrease by 15.3% year-on-year - The Group participates in employee social security schemes that comply with the requirements of various local and provincial governments[89](index=89&type=chunk) - Providing employees with competitive salaries, performance cash bonuses, and other incentives, and adopted a share incentive scheme on **August 18, 2021**[90](index=90&type=chunk) - Employee benefit expenses (including share-based compensation expenses) for the six months ended June 30, 2025, were **RMB 79.0 million**, a year-on-year decrease of **15.3%**[90](index=90&type=chunk) [Capital Gearing Ratio](index=31&type=section&id=Capital%20Gearing%20Ratio) [Capital Gearing Ratio Status](index=31&type=section&id=12.1%20Capital%20Gearing%20Ratio%20Status) As of June 30, 2025, the capital gearing ratio is not applicable due to the company having zero borrowings - As of June 30, 2025, the capital gearing ratio is **not applicable** as the company had **zero borrowings**[91](index=91&type=chunk) [Foreign Exchange Risk](index=31&type=section&id=Foreign%20Exchange%20Risk) [Foreign Exchange Risk Management](index=31&type=section&id=13.1%20Foreign%20Exchange%20Risk%20Management) The Group faces foreign exchange risk from currencies including USD, HKD, SGD, KRW, and VND, but currently does not engage in hedging transactions - The Group is exposed to foreign exchange risk arising from currencies such as **USD, HKD, SGD, KRW, and VND**[92](index=92&type=chunk) - The Group currently does **not engage in hedging transactions** for foreign currencies[92](index=92&type=chunk) [Pledge of Assets](index=31&type=section&id=Pledge%20of%20Assets) [Pledge of Restricted Cash](index=31&type=section&id=14.1%20Pledge%20of%20Restricted%20Cash) As of June 30, 2025, **RMB 21.0 million** in restricted cash was pledged, a decrease from year-end 2024 | Metric | June 30, 2025 (RMB millions) | December 31, 2024 (RMB millions) | | :--- | :--- | :--- | | Restricted Cash | 21.0 | 23.6 | [Contingent Liabilities](index=32&type=section&id=Contingent%20Liabilities) [Contingent Liabilities Status](index=32&type=section&id=15.1%20Contingent%20Liabilities%20Status) As of June 30, 2025, the Group had no material contingent liabilities or guarantees - As of June 30, 2025, the Group had **no material contingent liabilities or guarantees**[94](index=94&type=chunk) [Events After the Reporting Period](index=32&type=section&id=Events%20After%20the%20Reporting%20Period) [Acquisition of Bestar Information Technology Co., Ltd.](index=32&type=section&id=16.1%20Acquisition%20of%20Bestar%20Information%20Technology%20Co.%2C%20Ltd.) On June 12, 2025, the company agreed to acquire 100% equity of Bestar Information Technology Co., Ltd. for HKD 11,922,600, paid on July 4, 2025, via issuance of 3,100,000 new shares - On **June 12, 2025**, the company agreed to acquire **100% equity** of Bestar Information Technology Co., Ltd. for a consideration of **HKD 11,922,600**[95](index=95&type=chunk) - The consideration was paid on **July 4, 2025**, through the issuance and allotment of **3,100,000 new shares** of the company to the vendor[95](index=95&type=chunk) [Borrowings](index=32&type=section&id=Borrowings) [Borrowings Status](index=32&type=section&id=17.1%20Borrowings%20Status) As of June 30, 2025, the company had zero outstanding borrowings - As of June 30, 2025, the company had **zero outstanding borrowings**[96](index=96&type=chunk) [Use of Proceeds from Global Offering](index=32&type=section&id=Use%20of%20Proceeds%20from%20Global%20Offering) [Utilization of Proceeds](index=32&type=section&id=18.1%20Utilization%20of%20Proceeds) Net proceeds from the global offering were approximately HKD 554.5 million; as of June 30, 2025, most funds were utilized as planned, with amounts for user base expansion, brand awareness, new service development, working capital, and general corporate purposes fully expended - The net proceeds raised from the global offering were approximately **HKD 554.5 million**[97](index=97&type=chunk) | Purpose | Percentage of Total Amount | Net Proceeds from Global Offering (HKD millions) | Unutilized Amount as of June 30, 2025 (HKD millions) | | :--- | :--- | :--- | :--- | | Expanding our user base and enhancing our brand awareness | 40% | 221.8 | 0.0 | | Developing new services and products to enhance our monetization capabilities | 20% | 110.9 | 0.0 | | Seeking strategic alliances, investments, and acquisitions in overseas markets | 20% | 110.9 | 106.7 | | Enhancing our technological capabilities and strengthening our R&D capabilities | 10% | 55.5 | 0.0 | | Working capital and general corporate purposes | 10% | 55.4 | 0.0 | | **Total** | **100%** | **554.5** | **106.7** | - As of June 30, 2025, **HKD 106.7 million** remained unutilized for seeking strategic alliances, investments, and acquisitions in overseas markets[99](index=99&type=chunk) [Dividends](index=34&type=section&id=Dividends) [Dividend Declaration](index=34&type=section&id=19.1%20Dividend%20Declaration) The Board of Directors resolved not to pay any interim dividend for the six months ended June 30, 2025 - The Board of Directors resolved **not to pay any interim dividend** for the six months ended **June 30, 2025**[100](index=100&type=chunk) [Corporate Governance Practices](index=34&type=section&id=Corporate%20Governance%20Practices) [Compliance with Corporate Governance Code](index=34&type=section&id=20.1%20Compliance%20with%20Corporate%20Governance%20Code) The Group maintains high corporate governance standards, complying with all applicable code provisions of the HKEX Listing Rules' Corporate Governance Code, except for the combined roles of Chairman and Chief Executive Officer - The company has adopted the Corporate Governance Code set out in Appendix C1 of the HKEX Listing Rules as its own corporate governance code[101](index=101&type=chunk) - Except for the combined roles of Chairman and Chief Executive Officer held by Mr. Lam Kai Yin, the company has complied with all applicable code provisions set out in Part 2 of the Corporate Governance Code[101](index=101&type=chunk) - The Board believes that Mr. Lam's dual role is in the best interests of the company, and the composition of the management team helps balance power[101](index=101&type=chunk) [Standard Code for Securities Transactions by Directors](index=35&type=section&id=Standard%20Code%20for%20Securities%20Transactions%20by%20Directors) [Directors' Compliance with Securities Transactions](index=35&type=section&id=21.1%20Directors'%20Compliance%20with%20Securities%20Transactions) The company adopted the Standard Code from Listing Rules Appendix C3, and all directors confirmed compliance throughout the reporting period - The company has adopted the Standard Code for Securities Transactions by Directors of Listed Issuers set out in Appendix C3 of the Listing Rules[103](index=103&type=chunk) - Following specific inquiries to all directors, each director has confirmed continuous compliance with the required standards set out in the Standard Code throughout the reporting period[103](index=103&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=35&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company's%20Listed%20Securities) [Listed Securities Transaction Status](index=35&type=section&id=22.1%20Listed%20Securities%20Transaction%20Status) During the reporting period, neither the company nor its subsidiaries purchased, sold, or redeemed any listed securities, and the company held no treasury shares - During the reporting period, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities[104](index=104&type=chunk) - As of **June 30, 2025**, the company held **no treasury shares**[104](index=104&type=chunk) [Audit Committee](index=35&type=section&id=Audit%20Committee) [Audit Committee Responsibilities and Review Results](index=35&type=section&id=23.1%20Audit%20Committee%20Responsibilities%20and%20Review%20Results) The Audit Committee reviewed the Group's unaudited interim results for the six months ended June 30, 2025, confirming compliance with applicable accounting standards, laws, and regulations - The Audit Committee comprises two independent non-executive directors and one non-executive director, with Mr. Zhao Hongqiang serving as Chairman[105](index=105&type=chunk) - The Audit Committee has reviewed the Group's unaudited interim results for the six months ended **June 30, 2025**, and has no disagreement with them[105](index=105&type=chunk) - The Audit Committee believes that the interim results comply with applicable accounting standards, laws, and regulations, and appropriate disclosures have been made[105](index=105&type=chunk) [Publication of Interim Results Announcement and Interim Report](index=36&type=section&id=Publication%20of%20Interim%20Results%20Announcement%20and%20Interim%20Report) [Report Publication Channels](index=36&type=section&id=24.1%20Report%20Publication%20Channels) The company's interim results announcement for the six months ended June 30, 2025, is published on the HKEX and company websites, with the interim report to be dispatched to shareholders and posted on relevant sites in due course - The company's interim results announcement for the six months ended **June 30, 2025**, has been published on the HKEX website (www.hkexnews.hk) and the company's website (gogoxholdings.com)[106](index=106&type=chunk) - The company's interim report for the six months ended **June 30, 2025**, containing all information required by the Listing Rules, will be dispatched to shareholders (upon request) and posted on the HKEX and company websites, respectively[106](index=106&type=chunk)