Financial Performance - Revenue for the six months ended June 30, 2025, was HKD 101,621,000, a decrease of 19.2% compared to HKD 125,692,000 for the same period in 2024[7] - Gross profit for the period was HKD 5,668,000, down 49.5% from HKD 11,252,000 in the previous year[7] - Operating loss increased to HKD 8,447,000 from HKD 6,183,000 year-on-year, reflecting a deterioration in operational performance[7] - The net loss for the period was HKD 10,127,000, compared to a net loss of HKD 7,998,000 in the same period last year, representing a 26.6% increase in losses[8] - Basic and diluted loss per share was HKD 1.71, compared to HKD 1.33 for the same period in 2024, indicating a worsening loss per share[8] - The company reported a total comprehensive loss of HKD 9,684,000 for the period, compared to HKD 8,033,000 in the previous year, reflecting a 20.6% increase in comprehensive losses[8] - The company recorded a pre-tax loss of HKD 10,127,000 for the six months ended June 30, 2025, compared to a loss of HKD 8,259,000 for the same period in 2024[27] - Loss attributable to owners increased by HKD 2.2 million to HKD 10.2 million, primarily due to reduced revenue and gross profit from air and sea freight agency services and logistics[69] Assets and Liabilities - Non-current assets decreased to HKD 42,732,000 as of June 30, 2025, from HKD 56,594,000 at the end of 2024, a decline of 24.5%[10] - Current assets also decreased to HKD 68,442,000 from HKD 85,451,000, reflecting a reduction of 20%[10] - Total liabilities decreased to HKD 59,291,000 from HKD 78,841,000, a reduction of 24.8%[11] - Net assets decreased to HKD 18,698,000 from HKD 33,185,000, indicating a decline of 43.8%[11] - The total equity attributable to owners decreased to HKD 32,678,000 as of June 30, 2025, from HKD 42,475,000 at the beginning of the year, primarily due to accumulated losses[13] - The company’s accumulated losses reached HKD (43,756,000) as of June 30, 2025, reflecting ongoing financial challenges[13] Cash Flow - The net cash generated from operating activities for the six months ended June 30, 2025, was HKD 14,686,000, an increase of 40.0% compared to HKD 10,468,000 in the same period of 2024[15] - The net cash used in investing activities for the same period was HKD (526,000), a decrease from HKD (1,779,000) in 2024, indicating improved investment efficiency[15] - The net cash used in financing activities increased to HKD (14,377,000) from HKD (9,895,000) in 2024, reflecting higher financing costs or activities[15] - Cash and cash equivalents increased to HKD 13,471,000 as of June 30, 2025, up from HKD 10,458,000 at the same time last year, indicating improved liquidity[15] - The company’s cash and cash equivalents at the beginning of the year were HKD 13,245,000, showing a positive cash flow trend over the period[15] Revenue Breakdown - The air freight segment generated external sales of HKD 34,031,000 in 2025, up from HKD 43,979,000 in 2024, a decline of about 22.5%[27] - The logistics and warehousing segment reported external sales of HKD 38,938,000 in 2025, compared to HKD 42,771,000 in 2024, reflecting a decrease of approximately 9.1%[27] - Air freight service revenue decreased from HKD 44.0 million to HKD 34.0 million, a drop of HKD 10.0 million, attributed to local strikes in Dhaka affecting air freight tonnage[58] - Sea freight service revenue declined from HKD 14.7 million to HKD 11.6 million, a decrease of HKD 3.1 million, due to a slight drop in consolidated shipping volumes[58] - Logistics and warehousing service revenue decreased from HKD 42.8 million to HKD 38.9 million, reflecting no significant changes compared to the previous period[58] - E-commerce revenue fell from HKD 24.3 million to HKD 17.0 million, a decrease of HKD 7.3 million, due to additional tariffs imposed by the U.S. on all imports from China[58] Shareholder Information - As of June 30, 2025, the company has 600,000,000 shares issued, with Mr. Lo Wai Wah holding 2,150,000 shares, representing approximately 0.36% of the total shares[90] - Major shareholder Million Venture Holdings Limited owns 170,300,000 shares, accounting for 28.38% of the total shares[96] - Ms. Tai Choi Wan, Noel holds 156,154,000 shares through spouse rights, representing 26.03% of the total shares[96] - Pacific Crouch Limited, another major shareholder, possesses 152,994,000 shares, which is 25.50% of the total shares[96] - Mr. Cheng Han Yat holds 3,160,000 shares, representing approximately 0.53% of the total shares[96] - The company has not purchased, redeemed, or sold any shares during the reporting period[87] Corporate Governance - The audit committee has reviewed the unaudited condensed consolidated financial statements and believes they comply with applicable accounting standards and GEM listing rules[115] - The company has adopted the corporate governance code as per GEM listing rules and believes it has complied with the code provisions during the reporting period[111] - There are no significant events to disclose after the reporting period up to the date of this mid-term report[112] - The mid-term report will be available on the company's website and the Hong Kong Stock Exchange website for at least seven days from the publication date[116]

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。 CIRTEK HOLDINGS LIMITED 常達控股有限公司 （於開曼群島註冊成立之有限公司） 截 至2025年6月30日止六個月 截 至6月30日止六個月 | | | | | | | | | 2025年 | 2024年 | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | | | | | | | （未經審核） | （未經審核） | | | | | | | | | | 附 註 | 千港元 | 千港元 | | | 收 益 | | | | | | | 4 | 258,178 | 264,519 | | | 銷售成本 | | | | | | | | (136,567) | (140,345) | | | 毛 利 | | | | | | | | 121,611 | 124,174 | | | 其他收入及收益 ...

[Financial Highlights](index=1&type=section&id=Financial%20Highlights) The company's financial performance for the six months ended June 30, 2025, shows significant profit growth and a stable financial position Financial Highlights for the Six Months Ended June 30, 2025 | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 168,511 | 138,815 | ↑21.4% | | Adjusted EBITDA* | 52,064 | 43,009 | ↑21.1% | | Profit for the period attributable to owners of the Company | 36,191 | 9,037 | ↑300.5% | | Basic and diluted EPS (RMB cents) | 0.79 | 0.21 | ↑276.2% | Balance Sheet (Period-end) | Metric | As of June 30, 2025 (RMB thousands) | As of December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Total Assets | 3,466,785 | 3,507,498 | | Equity attributable to owners of the Company | 2,465,901 | 2,379,960 | [Condensed Consolidated Financial Statements](index=2&type=section&id=Condensed%20Consolidated%20Financial%20Statements) This section presents the condensed consolidated financial statements, covering profit or loss, comprehensive income, and financial position [Condensed Consolidated Statement of Profit or Loss](index=2&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss) The Group's revenue for the six months ended June 30, 2025, grew 21.4% to RMB 169 million, with gross profit surging 156.8% to RMB 74.857 million and profit for the period increasing 300.5% to RMB 36.191 million Key Data from Condensed Consolidated Statement of Profit or Loss | Metric | For the six months ended June 30 (RMB thousands) | | | :--- | :--- | :--- | | | **2025** | **2024** | | Revenue | 168,511 | 138,815 | | Cost of sales | (93,654) | (109,587) | | Gross profit | 74,857 | 29,228 | | Operating profit | 38,345 | 17,021 | | Profit before income tax | 36,373 | 9,882 | | Profit for the period | 36,191 | 9,037 | | Basic and diluted EPS (RMB cents) | 0.79 | 0.21 | - Gross profit increased by **156.8%** year-on-year, primarily due to a significant decrease in cost of sales[4](index=4&type=chunk) - Profit for the period surged by **300.5%** year-on-year, indicating a substantial improvement in profitability[4](index=4&type=chunk) [Condensed Consolidated Statement of Comprehensive Income](index=3&type=section&id=Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) The Group's total comprehensive income for the six months ended June 30, 2025, significantly increased to RMB 37.472 million from RMB 7.289 million in the prior year, driven by profit growth and a positive foreign currency translation difference Key Data from Condensed Consolidated Statement of Comprehensive Income | Metric | For the six months ended June 30 (RMB thousands) | | | :--- | :--- | :--- | | | **2025** | **2024** | | Profit for the period | 36,191 | 9,037 | | Exchange differences on translation of functional currency to presentation currency | 1,281 | (1,748) | | Total comprehensive income for the period | 37,472 | 7,289 | | Total comprehensive income for the period attributable to owners of the Company | 37,472 | 7,289 | - Exchange differences on translation of functional currency to presentation currency turned into a gain of **RMB 1.281 million** from a loss in the prior period[6](index=6&type=chunk) [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 slightly decreased to RMB 3.467 billion, while equity attributable to owners of the Company increased to RMB 2.466 billion, and net current assets significantly rose to RMB 706 million Key Data from Condensed Consolidated Statement of Financial Position | Metric | As of June 30, 2025 (RMB thousands) | As of December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Total non-current assets | 1,809,679 | 1,825,563 | | Total current assets | 1,657,106 | 1,681,935 | | Total current liabilities | 951,045 | 1,082,550 | | Net current assets | 706,061 | 599,385 | | Total non-current liabilities | 49,392 | 44,988 | | Net assets | 2,466,348 | 2,379,960 | | Equity attributable to owners of the Company | 2,465,901 | 2,379,960 | | Total equity | 2,466,348 | 2,379,960 | - Net current assets increased by **17.8%** from **RMB 599 million** as of December 31, 2024, to **RMB 706 million** as of June 30, 2025[7](index=7&type=chunk) - Total current liabilities decreased by **12.15%**, primarily due to a reduction in contract liabilities, accruals and other payables, and bank and other borrowings[7](index=7&type=chunk) [Notes to the Condensed Consolidated Financial Statements](index=6&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) This section details notes to the condensed consolidated financial statements, including general information, accounting policies, and specific financial items [General Information](index=6&type=section&id=General%20Information) The Company, incorporated in the Cayman Islands, primarily engages in the production and sale of aquatic and beer products in China and provides lending services in Hong Kong, with its shares listed on the Stock Exchange and financial statements presented in RMB - The Group's principal activities are the production and sale of aquatic and beer products in China, and the provision of lending services in Hong Kong[9](index=9&type=chunk) - The Company's shares have been listed on The Stock Exchange of Hong Kong Limited since June 30, 2011[10](index=10&type=chunk) - The condensed consolidated financial statements are presented in RMB, which differs from the Company's functional currency of HKD[10](index=10&type=chunk) [Basis of Preparation and Accounting Policies](index=6&type=section&id=Basis%20of%20Preparation%20and%20Accounting%20Policies) The condensed consolidated financial statements are prepared in accordance with IAS 34 and Appendix D2 of the Listing Rules, using the historical cost basis, and the first-time application of amendments to IAS 21 had no material impact on financial position or performance - The condensed consolidated financial statements are prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting" and the applicable disclosure requirements of Appendix D2 to the Listing Rules[11](index=11&type=chunk) - The condensed consolidated financial statements are prepared on the historical cost basis, except for certain financial instruments measured at fair value[12](index=12&type=chunk) - The amendments to IAS 21 "Lack of Exchangeability" were first applied in the current interim period but did not have a material impact on the financial position and performance[13](index=13&type=chunk) [Segment Information](index=7&type=section&id=Segment%20Information) The Group operates two main segments: water and beer businesses; in H1 2025, water business revenue surged 117.6% to RMB 118 million with a profit of RMB 50.792 million, while beer business revenue declined 39.9% to RMB 50.258 million with a profit of RMB 7.565 million - The Group primarily operates in the water business segment (manufacturing and selling water products, selling raw materials and consumables, and leasing production lines) and the beer business segment (manufacturing and selling beer products)[15](index=15&type=chunk) Segment Results for the Six Months Ended June 30, 2025 | Metric | Water Business Segment (RMB thousands) | Beer Business Segment (RMB thousands) | Corporate and Others (RMB thousands) | Total (RMB thousands) | | :--- | :--- | :--- | :--- | :--- | | Total segment revenue | 118,147 | 50,258 | 106 | 168,511 | | Gross profit | 65,321 | 9,430 | 106 | 74,857 | | Adjusted EBITDA* | 52,636 | 11,943 | (12,515) | 52,064 | | Profit / (Loss) for the period | 50,792 | 7,565 | (22,166) | 36,191 | Segment Results for the Six Months Ended June 30, 2024 | Metric | Water Business Segment (RMB thousands) | Beer Business Segment (RMB thousands) | Corporate and Others (RMB thousands) | Total (RMB thousands) | | :--- | :--- | :--- | :--- | :--- | | Total segment revenue | 54,307 | 83,581 | 927 | 138,815 | | Gross profit | 10,548 | 17,753 | 927 | 29,228 | | Adjusted EBITDA* | 6,395 | 43,721 | (7,107) | 43,009 | | Profit / (Loss) for the period | 1,462 | 27,749 | (20,174) | 9,037 | [Revenue](index=10&type=section&id=Revenue) The Group's revenue primarily derives from sales of water products, beer products, and other sources (rental income, interest income from lending services); in H1 2025, water product sales revenue increased 126.9% year-on-year, while beer product sales revenue decreased 39.9% year-on-year Revenue Breakdown | Revenue Source | For the six months ended June 30 (RMB thousands) | | | :--- | :--- | :--- | | | **2025** | **2024** | | Sales of water products | 115,572 | 50,935 | | Sales of beer products | 50,258 | 83,581 | | Rental income | 2,575 | 3,372 | | Interest income from lending services | 106 | 927 | | **Total Revenue** | **168,511** | **138,815** | - Water product sales revenue increased by **126.9%** year-on-year, serving as the primary driver of total revenue growth[21](index=21&type=chunk) - Beer product sales revenue decreased by **39.9%** year-on-year, putting pressure on total revenue growth[21](index=21&type=chunk) [Other Income, Net](index=11&type=section&id=Other%20Income,%20Net) In H1 2025, the Group's other income, net, significantly decreased to RMB 11.833 million from RMB 37.039 million in the prior year, mainly due to reduced government grants and a gain from disposal of a subsidiary in the prior period Other Income, Net Breakdown | Item | For the six months ended June 30 (RMB thousands) | | | :--- | :--- | :--- | | | **2025** | **2024** | | Government grants | 8,002 | 15,567 | | (Loss) / Gain on disposal of a subsidiary | (65) | 16,524 | | Others | 3,896 | 4,948 | | **Total** | **11,833** | **37,039** | - Government grants decreased from **RMB 15.567 million** in the prior period to **RMB 8.002 million** in the current period[22](index=22&type=chunk) - The prior period included a gain of **RMB 16.524 million** from the disposal of a subsidiary, while the current period recorded a loss of **RMB 0.065 million**[22](index=22&type=chunk) [Profit for the Period](index=11&type=section&id=Profit%20for%20the%20Period) Profit for the period was calculated after deducting various expenses, with a significant decrease in depreciation of property, plant and equipment, and a shift from a reversal to a provision for expected credit losses on financial assets Items Deducted / (Credited) in Profit for the Period | Item | For the six months ended June 30 (RMB thousands) | | | :--- | :--- | :--- | | | **2025** | **2024** | | Raw materials and consumables used | 65,466 | 64,448 | | Depreciation of property, plant and equipment | 14,012 | 25,744 | | Employee benefit expenses | 33,825 | 32,606 | | Provision for / (reversal of provision for) expected credit losses on financial assets - trade receivables | 3,887 | (45) | - Depreciation of property, plant and equipment decreased by **45.5%** year-on-year, contributing to the increase in profit for the period[23](index=23&type=chunk) - Provision for expected credit losses on financial assets shifted from a reversal of **RMB 0.045 million** in the prior period to a provision of **RMB 3.887 million** in the current period[23](index=23&type=chunk) - Equity-settled share-based payment expenses of approximately **RMB 4.241 million** were recognized in the current period[23](index=23&type=chunk) [Income Tax Expense](index=12&type=section&id=Income%20Tax%20Expense) The Group's income tax expense for H1 2025 significantly decreased to RMB 0.182 million from RMB 0.845 million in the prior year, mainly due to reduced pre-tax profit in the beer business segment and utilization of prior year losses in the water business segment Income Tax Expense Breakdown | Item | For the six months ended June 30 (RMB thousands) | | | :--- | :--- | :--- | | | **2025** | **2024** | | Current income tax | 147 | 1,403 | | Deferred tax | 35 | (558) | | **Income Tax Expense** | **182** | **845** | - Income tax expense decreased by **78.46%** year-on-year, primarily attributable to reduced pre-tax profit in the beer business segment, changes in deferred tax, and the utilization of accumulated prior year losses in the water business segment[48](index=48&type=chunk) [Earnings per Share](index=12&type=section&id=Earnings%20per%20Share) The Group's basic and diluted earnings per share for the six months ended June 30, 2025, significantly increased by 276.2% to RMB 0.79 cents from RMB 0.21 cents in the prior year, primarily due to a substantial increase in profit for the period Earnings per Share Calculation | Metric | For the six months ended June 30 | | | :--- | :--- | :--- | | | **2025** | **2024** | | Profit attributable to owners of the Company (RMB thousands) | 36,191 | 9,037 | | Weighted average number of ordinary shares in issue (thousands) | 4,566,684 | 4,373,452 | | Basic EPS (RMB cents) | 0.79 | 0.21 | - Diluted earnings per share is the same as basic earnings per share as the outstanding convertible bonds and unexercised share options had an anti-dilutive effect on basic earnings per share[26](index=26&type=chunk) [Investments Accounted for Using the Equity Method](index=13&type=section&id=Investments%20Accounted%20for%20Using%20the%20Equity%20Method) As of June 30, 2025, the Group's investments accounted for using the equity method totaled RMB 739 million, a slight decrease from the beginning of the period, mainly due to the share of loss from results Changes in Investments Accounted for Using the Equity Method | Item | As of June 30, 2025 (RMB thousands) | As of December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Beginning balance | 741,527 | 1,215,508 | | Share of results | (2,731) | (8,312) | | Impairment loss recognized | — | (462,729) | | Ending balance | 738,796 | 741,527 | - The share of loss from results for the current period was **RMB 2.731 million**, compared to **RMB 8.312 million** in the prior period[27](index=27&type=chunk) [Trade Receivables](index=13&type=section&id=Trade%20Receivables) As of June 30, 2025, the Group's net trade receivables significantly increased to RMB 241 million from RMB 134 million as of December 31, 2024, primarily due to credit limits and payment terms granted to strategic cooperative distributors to expand their business Ageing Analysis of Trade Receivables | Ageing | As of June 30, 2025 (RMB thousands) | As of December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Within 6 months | 167,658 | 76,642 | | Over 6 months but not over 1 year | 24,071 | 14,928 | | Over 1 year but not over 2 years | 50,118 | 53,352 | | Over 2 years | 90,396 | 76,897 | | **Total** | **332,243** | **221,819** | | Less: Provision for expected credit losses | (91,362) | (87,475) | | **Net** | **240,881** | **134,344** | - Net trade receivables increased by **79.3%** year-on-year, mainly due to granting credit limits and payment terms to strategic cooperative distributors to expand their business[50](index=50&type=chunk) - Provision for expected credit losses increased from **RMB 87.475 million** to **RMB 91.362 million**[28](index=28&type=chunk) [Trade and Bills Payables](index=14&type=section&id=Trade%20and%20Bills%20Payables) As of June 30, 2025, the Group's total trade and bills payables increased to RMB 143 million from RMB 131 million as of December 31, 2024, primarily due to an increase in bills payables and trade payables Trade and Bills Payables Breakdown | Item | As of June 30, 2025 (RMB thousands) | As of December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Trade payables | 33,232 | 27,906 | | Bills payables | 110,000 | 102,770 | | **Total** | **143,232** | **130,676** | - Bills payables increased by **RMB 7 million**, and trade payables increased by **RMB 5 million**[51](index=51&type=chunk) - Bank acceptance bills of **RMB 110 million** are secured by bank deposits of **RMB 12 million**[30](index=30&type=chunk) [Convertible Bonds - Liability Component](index=15&type=section&id=Convertible%20Bonds%20-%20Liability%20Component) In H1 2025, the Company issued two tranches of convertible bonds (2025 Convertible Bonds I and II) with principal amounts of HKD 165 million and HKD 138 million, respectively; as of June 30, a portion of 2025 Convertible Bonds I had been converted into shares, with the total liability component amounting to RMB 240 million - On January 21, 2025, the Company completed the issuance of 8% convertible bonds with a total principal amount of **HKD 165 million** ("2025 Convertible Bonds I"), with an initial conversion price of **HKD 0.33**[31](index=31&type=chunk) - For the period ended June 30, 2025, 2025 Convertible Bonds I with a principal amount of **HKD 39.85 million** (approximately **RMB 36.762 million**) were converted into **120,757,575** new shares[32](index=32&type=chunk) - On March 18, 2025, the Company completed the issuance of 8% convertible bonds with a total principal amount of **HKD 138 million** ("2025 Convertible Bonds II"), with an initial conversion price of **HKD 0.345**[32](index=32&type=chunk) Changes in Convertible Bonds Liability Component | Item | RMB thousands | | :--- | :--- | | Liability component as of December 31, 2024 | — | | Liability component of 2025 Convertible Bonds I and 2025 Convertible Bonds II at issue date | 267,804 | | Conversion | (36,433) | | Prepaid interest | (2,565) | | Interest paid / payable | 10,641 | | Exchange adjustment | 327 | | Liability component as of June 30, 2025 | 239,774 | [Share Capital](index=17&type=section&id=Share%20Capital) As of June 30, 2025, the number of issued ordinary shares increased to 4,699,945 thousand shares, and the nominal value of share capital increased to RMB 40.043 million, primarily due to the conversion of convertible bonds into shares Changes in Share Capital | Item | Number of Ordinary Shares (thousands) | Nominal Value of Ordinary Shares (RMB thousands) | | :--- | :--- | :--- | | Balance as of December 31, 2024 | 4,579,188 | 38,929 | | Conversion of convertible bonds | 120,757 | 1,114 | | Balance as of June 30, 2025 | 4,699,945 | 40,043 | - **120,757 thousand** new shares were issued during the period due to the conversion of convertible bonds[37](index=37&type=chunk) [Dividends](index=17&type=section&id=Dividends) For the period ended June 30, 2025, the Board of Directors resolved not to pay, declare, or propose any dividends - No dividends were paid, declared, or proposed for the period ended June 30, 2025[38](index=38&type=chunk) [Events after the Reporting Period](index=17&type=section&id=Events%20after%20the%20Reporting%20Period) After the reporting period, on August 20, 2025, a holder of 2025 Convertible Bonds I elected to convert their bonds into 454,545 ordinary shares of the Company - On August 20, 2025, a holder of 2025 Convertible Bonds I converted their bonds into **454,545** new ordinary shares of the Company[39](index=39&type=chunk) - The related **HKD 0.15 million** debt was transferred to equity[39](index=39&type=chunk) [Management Discussion and Analysis](index=18&type=section&id=Management%20Discussion%20and%20Analysis) This section reviews the group's business and financial performance, offering insights and future outlook [Business Review](index=18&type=section&id=Business%20Review) In H1 2025, the Group's water business sales volume grew 54.1% and revenue increased 117.6%, driven by higher demand for premium products and cinema sales; the beer business saw sales and revenue decline by 29.5% and 39.9% respectively, affected by market contraction and channel adjustments; the Group successfully issued convertible bonds to support operations - Water business total sales volume increased by **54.1%** year-on-year, and revenue increased by **117.6%** year-on-year, primarily benefiting from increased consumer health awareness driving demand for premium products and a significant increase of over **40%** in cinema channel sales[40](index=40&type=chunk) - Beer business sales volume decreased by **29.5%** year-on-year, and revenue decreased by **39.9%** year-on-year, affected by multiple factors including the contraction of traditional on-premise channels in Tibet and a period of channel integration and adjustment[40](index=40&type=chunk) - The Group successfully completed two convertible bond issuances in January and March 2025, providing strong support for stable business operations[41](index=41&type=chunk) [Financial Review](index=19&type=section&id=Financial%20Review) The Group's total revenue grew 21.4% in H1 2025, with gross margin improving 23.3 percentage points to 44.4%; water business performed strongly, while beer business faced pressure; selling and administrative expenses decreased, but provision for expected credit losses on financial assets increased; profit for the period significantly grew, and gearing ratio remained stable [Revenue Analysis](index=19&type=section&id=Revenue%20Analysis) In H1 2025, the Group's total revenue increased by 21.4% year-on-year to RMB 169 million; water business revenue grew 117.6% with gross margin up 35.9 percentage points to 55.3%, while beer business revenue decreased 39.9% with gross margin down 2.4 percentage points to 18.8% Revenue and Gross Margin Analysis | Metric | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | | Total revenue | RMB 169 million | RMB 139 million | ↑21.4% | | Water business revenue | RMB 118 million | RMB 54 million | ↑117.6% | | Beer business revenue | RMB 50 million | RMB 83 million | ↓39.9% | | Overall gross margin | 44.4% | 21.1% | ↑23.3 percentage points | | Water business gross margin | 55.3% | 19.4% | ↑35.9 percentage points | | Beer business gross margin | 18.8% | 21.2% | ↓2.4 percentage points | - The increase in water business gross margin was primarily due to higher selling prices and reduced allocated fixed costs from increased sales volume[42](index=42&type=chunk) - The decrease in beer business gross margin was mainly due to lower selling prices[42](index=42&type=chunk) [Selling and Distribution Expenses and Administrative Expenses](index=19&type=section&id=Selling%20and%20Distribution%20Expenses%20and%20Administrative%20Expenses) In H1 2025, selling and distribution expenses decreased by 24.6% year-on-year to RMB 15 million, mainly due to reduced advertising and marketing expenses; administrative expenses decreased by 8.8% year-on-year to RMB 30 million, primarily due to lower consulting and professional service fees Changes in Selling and Distribution Expenses and Administrative Expenses | Expense Type | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Selling and distribution expenses | 15,000 | 20,000 | ↓24.6% | | Administrative expenses | 30,000 | 33,000 | ↓8.8% | - The decrease in selling and distribution expenses was primarily due to reduced advertising and marketing expenses[43](index=43&type=chunk) - The decrease in administrative expenses was mainly due to lower consulting and professional service fees[43](index=43&type=chunk) [Provision for Expected Credit Losses on Financial Assets / Reversal of Provision](index=19&type=section&id=Provision%20for%20Expected%20Credit%20Losses%20on%20Financial%20Assets%20/%20Reversal%20of%20Provision) In H1 2025, the Group recorded a provision for expected credit losses on financial assets of RMB 4 million, compared to a reversal of RMB 3 million in the prior period, indicating a more cautious assessment of credit risk Changes in Provision for Expected Credit Losses on Financial Assets | Item | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | | :--- | :--- | :--- | | Provision for expected credit losses on financial assets / Reversal of provision | 4,000 (Provision) | (3,000) (Reversal of provision) | [Other Income, Net](index=19&type=section&id=Other%20Income,%20Net) In H1 2025, other income, net, decreased significantly to RMB 12 million from RMB 37 million in the prior period, primarily due to reduced government grants Changes in Other Income, Net | Item | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | | :--- | :--- | :--- | | Other income, net | 12,000 | 37,000 | | Of which: Government grants | 8,000 | 16,000 | [Net Finance Income / (Expense)](index=19&type=section&id=Net%20Finance%20Income%20/%20(Expense)) In H1 2025, the Group's net finance income was RMB 1 million (finance income of RMB 23 million, finance expenses of RMB 22 million), an improvement from a net finance expense of RMB 5 million in the prior period, mainly due to increased net exchange gains Changes in Net Finance Income / (Expense) | Item | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | | :--- | :--- | :--- | | Finance income | 23,000 | 16,000 | | Finance expenses | (22,000) | (21,000) | | **Net Finance Income / (Expense)** | **1,000** | **(5,000)** | - Finance income increased by **RMB 7 million**, primarily due to an increase in net exchange gains in H1 2025[46](index=46&type=chunk) [Share of Loss of Investments Accounted for Using the Equity Method](index=20&type=section&id=Share%20of%20Loss%20of%20Investments%20Accounted%20for%20Using%20the%20Equity%20Method) In H1 2025, the share of loss of investments accounted for using the equity method increased to RMB 3 million from RMB 2 million in the prior period, mainly due to an increased share of loss from associates Changes in Share of Loss of Investments Accounted for Using the Equity Method | Item | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | | :--- | :--- | :--- | | Share of loss of investments accounted for using the equity method | (3,000) | (2,000) | - The increase in share of loss was primarily due to an increased share of loss from associates[47](index=47&type=chunk) [Income Tax Expense](index=20&type=section&id=Income%20Tax%20Expense) In H1 2025, income tax expense was RMB 0.18 million, a significant decrease from RMB 1 million in the prior period, mainly due to reduced pre-tax profit in the beer business segment, changes in deferred tax, and the utilization of accumulated prior year losses in the water business segment Changes in Income Tax Expense | Item | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | | :--- | :--- | :--- | | Income tax expense | 180 | 1,000 | [Interim Profit](index=20&type=section&id=Interim%20Profit) In H1 2025, the Group's interim profit was RMB 36 million, a significant increase from RMB 9 million in the prior period, primarily driven by revenue growth, improved gross margin, and expense control Changes in Interim Profit | Item | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | | :--- | :--- | :--- | | Interim profit | 36,000 | 9,000 | [Other Financial Position](index=20&type=section&id=Other%20Financial%20Position) As of June 30, 2025, the Group's inventory decreased, net trade receivables increased, contract liabilities decreased, bank and other borrowings reduced, and a new convertible bond liability component of RMB 240 million was added - Inventory decreased to **RMB 46 million** (December 31, 2024: **RMB 72 million**), primarily due to a reduction in finished goods and raw material inventories[50](index=50&type=chunk) - Net trade receivables increased to **RMB 241 million** (December 31, 2024: **RMB 134 million**), mainly to support strategic cooperative distributors in expanding their business by granting credit limits and payment terms[50](index=50&type=chunk) - Contract liabilities decreased to **RMB 21 million** (December 31, 2024: **RMB 123 million**), primarily due to a decrease in customer prepayments for sales of water and beer products[51](index=51&type=chunk) - Bank borrowings within bank and other borrowings decreased by **RMB 35 million**, mainly due to net repayment of bank loan principal[52](index=52&type=chunk) - The liability component of convertible bonds issued by the Company was **RMB 240 million** (December 31, 2024: zero), primarily from the issuance of 2025 Convertible Bonds I and II[53](index=53&type=chunk) [Employees](index=21&type=section&id=Employees) As of June 30, 2025, the Group had a total of 342 employees, with employee costs of RMB 34 million; share-based payment expenses of RMB 4 million were recognized during the period, stemming from a newly adopted share option scheme aimed at retaining talent and business partners Employee Data | Metric | As of June 30, 2025 | As of June 30, 2024 | | :--- | :--- | :--- | | Total number of employees | 342 | 360 | | Employee costs | RMB 34 million | RMB 33 million | - Equity-settled share-based payment expenses of approximately **RMB 4.241 million** were recognized in the current period[23](index=23&type=chunk) - The Company adopted a new share option scheme in 2023 and granted share options on April 14, 2025, recognizing share-based payment expenses of **RMB 4 million** as of June 30, 2025[56](index=56&type=chunk) [Gearing Ratio](index=22&type=section&id=Gearing%20Ratio) As of June 30, 2025, the Group's gearing ratio was 21.75%, a slight increase from 21.59% as of December 31, 2024, but remaining relatively stable Gearing Ratio | Date | Gearing Ratio | | :--- | :--- | | June 30, 2025 | 21.75% | | December 31, 2024 | 21.59% | - The gearing ratio is calculated as borrowings (including bank borrowings, the liability component of convertible bonds, and third-party borrowings) divided by total capital[57](index=57&type=chunk) [Mergers and Acquisitions](index=22&type=section&id=Mergers%20and%20Acquisitions) In H1 2025, the Group did not engage in any significant mergers and acquisitions activities - The Group did not engage in any significant mergers and acquisitions activities in H1 2025[58](index=58&type=chunk) [Material Investments](index=22&type=section&id=Material%20Investments) In H1 2025, the Group's investment in the purchase of property, plant and equipment was RMB 3 million, a decrease from RMB 6 million in the prior period Investment in Purchase of Property, Plant and Equipment | Item | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | | :--- | :--- | :--- | | Purchase of property, plant and equipment | 3,000 | 6,000 | [Pledged Assets](index=23&type=section&id=Pledged%20Assets) As of June 30, 2025, several of the Group's bank borrowings were secured by equity interests, mining rights, factory plants, land use rights, and factory production lines, with bank acceptance bills secured by bank deposits - Bank borrowings of **RMB 150 million** are pledged by a **35%** equity interest in Tibet Tiandi Green Beverage Development Co., Ltd., a **7%** equity interest in Tibet Plateau Natural Water Co., Ltd., and mineral water mining rights within Damxung County[60](index=60&type=chunk) - Bank borrowings of **RMB 95 million** are pledged by a **25%** equity interest in Tibet Shannan Yarlung Zangbo Industrial Co., Ltd[60](index=60&type=chunk) - Bank acceptance bills of **RMB 110 million** are secured by bank deposits of **RMB 12 million**[60](index=60&type=chunk) [Contingent Liabilities](index=23&type=section&id=Contingent%20Liabilities) As of June 30, 2025, the Group provided net financial guarantees of RMB 268 million to an associate, with a portion of the borrowings pledged by the associate's equity - The Group provided net financial guarantees of **RMB 268 million** to an associate (December 31, 2024: **RMB 230 million**)[61](index=61&type=chunk) - Among these, **RMB 49 million** of borrowings are pledged by a **10%** equity interest in Plateau Natural Water held by Tibet Glacier Mineral Water Co., Ltd[61](index=61&type=chunk) [Foreign Exchange Risk](index=23&type=section&id=Foreign%20Exchange%20Risk) The Group primarily operates in China with most transactions denominated in RMB, but cash exchange transactions are mainly in HKD, exposing it to foreign exchange risk; management believes no hedging transactions are currently necessary - The Group primarily operates in China, with most commercial transactions denominated in RMB, but cash exchange transactions are mainly denominated in HKD, thus facing foreign exchange risk[62](index=62&type=chunk) - Management believes the foreign exchange risk is not significant after offsetting assets and liabilities exposed to such risk, and no hedging transactions are deemed necessary[62](index=62&type=chunk) [Production Capacity](index=23&type=section&id=Production%20Capacity) In H1 2025, the Group's estimated annual water and beer production capacities were approximately 300,000 tons and 2,000,000 hectoliters respectively, consistent with the prior period, and will be regularly assessed to meet future development needs Estimated Annual Production Capacity | Product | Estimated Annual Capacity | | :--- | :--- | | Water | 300,000 tons | | Beer | 2,000,000 hectoliters | - Production capacity is consistent with H1 2024, and the Group will regularly assess and consider increasing capacity to meet future development needs[63](index=63&type=chunk) [Outlook](index=24&type=section&id=Outlook) For H2 2025, the Group anticipates continued positive momentum in its water product business, focusing on community and home delivery services to enhance consumer experience, while adhering to a "seek progress while maintaining stability" marketing strategy, concentrating on core capabilities and operational efficiency to create sustainable long-term value for shareholders - The water product business is expected to continue its positive momentum in H2 2025, benefiting from sustained consumer demand for premium products[65](index=65&type=chunk) - The Group will continue to deeply cultivate community and home delivery services, making premium products more accessible to consumers and enhancing the consumer experience[65](index=65&type=chunk) - The Group will adhere to a "seek progress while maintaining stability" marketing strategy, focusing on building core capabilities and improving operational efficiency to create sustainable long-term value for shareholders[65](index=65&type=chunk) [Corporate Governance and Other Information](index=24&type=section&id=Corporate%20Governance%20and%20Other%20Information) This section outlines the company's corporate governance practices and other relevant information [Corporate Governance Practices](index=24&type=section&id=Corporate%20Governance%20Practices) In H1 2025, the Company complied with the Corporate Governance Code in Appendix C1 of the Listing Rules; post-reporting period, the number of independent non-executive directors fell below Listing Rules requirements, and the Company will identify suitable candidates promptly; all directors confirmed compliance with the Model Code for Securities Transactions, and the Audit Committee reviewed the interim results - The Company has complied with the Corporate Governance Code as set out in Appendix C1 to the Listing Rules[67](index=67&type=chunk) - After the end of the reporting period, the number of independent non-executive directors fell below the one-third requirement of the Board as stipulated by Rule 3.10A of the Listing Rules, and the Company will identify suitable candidates as soon as practicable[67](index=67&type=chunk) - All Directors confirmed compliance with the Model Code for Securities Transactions by Directors of Listed Issuers throughout H1 2025[67](index=67&type=chunk) - The Audit Committee has reviewed the accounting principles and methods adopted by the Group, as well as the interim results for H1 2025[67](index=67&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=25&type=section&id=Purchase,%20Sale%20or%20Redemption%20of%20the%20Company's%20Listed%20Securities) In H1 2025, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's shares - Neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's shares in H1 2025[68](index=68&type=chunk) [Publication of Interim Report](index=25&type=section&id=Publication%20of%20Interim%20Report) The Company's 2025 interim report will be uploaded to the Company's website and the Stock Exchange website at a later date - The Company's 2025 interim report will be uploaded to the Company's website (http://www.twr1115.net) and the Stock Exchange website (http://www.hkexnews.hk) at a later date[69](index=69&type=chunk)

[Group Financial Summary](index=1&type=section&id=%E9%9B%86%E5%9C%98%E8%B2%A1%E5%8B%99%E6%91%98%E8%A6%81) The group achieved a turnaround from loss to profit in the first half of 2025, with operating revenue increasing by 26.50% and profit attributable to owners of the company reaching RMB 9.54 million Group Financial Summary for H1 2025 | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | | :--- | :--- | :--- | | Operating Revenue | 680.75 | 538.13 | | YoY Growth | 26.50% | - | | Profit attributable to owners of the company | 9.54 | -23.92 | | Basic earnings per share | 0.0329 RMB/share | -0.0825 RMB/share | - The company successfully turned losses into profits, with **profit attributable to owners of the company** shifting from a loss of **RMB 23.92 million** in the prior period to a profit of **RMB 9.54 million**[5](index=5&type=chunk) - The Board did not recommend the payment of an interim dividend for the six months ended June 30, 2025 (H1 2024: nil)[5](index=5&type=chunk) [Consolidated Financial Statements](index=2&type=section&id=%E5%90%88%E4%BD%B5%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8) This section presents the consolidated balance sheet and income statement, detailing the group's financial position and performance for the reporting period [Consolidated Balance Sheet](index=2&type=section&id=%E5%90%88%E4%BD%B5%E8%B3%87%E7%94%A2%E8%B2%A0%E5%82%B5%E8%A1%A8) As of June 30, 2025, the group's total assets decreased by 3.80% to RMB 2,272.44 million, with significant changes in current assets and liabilities, while shareholders' equity slightly increased Key Items from Consolidated Balance Sheet (RMB yuan) | Item | Jun 30, 2025 | Dec 31, 2024 | Change (%) | | :--- | :--- | :--- | :--- | | **Assets** | | | | | Total Current Assets | 1,417,395,153.63 | 1,501,357,844.75 | -5.60% | | Cash and cash equivalents | 450,480,720.80 | 723,367,245.89 | -37.74% | | Accounts Receivable | 431,982,416.57 | 454,540,912.60 | -4.96% | | Prepayments | 6,703,314.33 | 43,752,219.31 | -84.66% | | Contract Assets | 171,067,549.61 | 41,787,484.40 | +309.32% | | Total Non-current Assets | 855,040,747.40 | 860,935,525.45 | -0.68% | | Total Assets | 2,272,435,901.03 | 2,362,293,370.20 | -3.80% | | **Liabilities** | | | | | Total Current Liabilities | 994,257,677.65 | 1,113,766,488.62 | -10.73% | | Accounts Payable | 528,676,582.55 | 575,719,949.40 | -8.17% | | Contract Liabilities | 275,153,986.87 | 287,842,203.33 | -4.39% | | Total Non-current Liabilities | 64,752,547.34 | 55,428,322.35 | +16.82% | | Total Liabilities | 1,059,010,224.99 | 1,169,194,810.97 | -9.42% | | **Shareholders' Equity** | | | | | Total Equity attributable to owners of the parent company | 1,137,591,957.52 | 1,127,896,161.02 | +0.86% | | Total Shareholders' Equity | 1,213,425,676.04 | 1,193,098,559.23 | +1.70% | [Consolidated Income Statement](index=6&type=section&id=%E5%90%88%E4%BD%B5%E5%88%A9%E6%BD%A4%E8%A1%A8) For the six months ended June 30, 2025, total operating revenue increased by 26.50% to RMB 680.75 million, achieving a turnaround to a net profit of RMB 9.54 million attributable to owners of the parent company Key Items from Consolidated Income Statement (RMB yuan) | Item | Jan-Jun 2025 | Jan-Jun 2024 | YoY Change (%) | | :--- | :--- | :--- | :--- | | Total Operating Revenue | 680,753,944.94 | 538,129,918.34 | +26.50% | | Total Operating Costs | 665,908,091.24 | 549,459,549.69 | +21.20% | | Cost of Sales | 525,196,062.65 | 380,453,928.10 | +38.04% | | Selling Expenses | 48,230,600.04 | 62,261,696.16 | -22.54% | | Administrative Expenses | 64,137,672.41 | 58,658,905.34 | +9.34% | | Research and Development Expenses | 29,616,065.26 | 51,571,948.49 | -42.57% | | Investment Income | 39,998,899.86 | -5,925,821.92 | Turned loss into profit | | Operating Profit | 20,579,518.56 | -11,517,099.32 | Turned loss into profit | | Net Profit | 20,172,834.92 | -11,253,066.53 | Turned loss into profit | | Net Profit attributable to owners of the parent company | 9,541,514.61 | -23,920,445.62 | Turned loss into profit | | Basic Earnings Per Share (RMB/share) | 0.0329 | -0.0825 | Turned loss into profit | [Notes to the Financial Statements](index=9&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 on the company's basic information, accounting policies, and specific financial statement items [1. Company Information](index=9&type=section&id=1.%20%E5%85%AC%E5%8F%B8%E7%9A%84%E5%9F%BA%E6%9C%AC%E6%83%85%E5%86%B5) Capital Information Development Co., Ltd. was established in Beijing on July 14, 2000, listed on the HKEX, and primarily engages in software, network application services, and system integration - The Company was established on July 14, 2000, with the approval of the Beijing Municipal People's Government, and its H-shares are listed on the Hong Kong Stock Exchange[15](index=15&type=chunk) - The Group operates in the software industry, with main business activities including network application services, system integration, information source services, and e-commerce services[16](index=16&type=chunk) - A total of **8 accounting entities** are included in the consolidated financial statements for the current period, including the Company, Capital Information Development (Hong Kong) Co., Ltd., and Capital Information Technology Development Co., Ltd[16](index=16&type=chunk) [2. Basis of Preparation of Financial Statements](index=9&type=section&id=2.%20%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8%E7%9A%84%E7%B7%A8%E8%A3%BD%E5%9F%BA%E7%A4%8E) Financial statements are prepared in accordance with PRC GAAP, on an accrual basis and historical cost, with adjustments made for the Hong Kong Companies Ordinance - These financial statements are prepared in accordance with the Accounting Standards for Business Enterprises issued by the Ministry of Finance, on an accrual basis and primarily at historical cost, except for certain financial instruments[17](index=17&type=chunk) - These financial statements have been adjusted in accordance with the requirements of the Hong Kong Companies Ordinance[18](index=18&type=chunk) [3. Going Concern](index=10&type=section&id=3.%20%E6%8C%81%E7%BA%8C%E7%B6%93%E7%87%9F) The Group assessed its going concern ability for the next 12 months from June 30, 2025, and found no significant doubts - The Group evaluated its ability to continue as a going concern for the 12 months from June 30, 2025, and found no matters or circumstances that would cast significant doubt on its going concern ability[19](index=19&type=chunk) [4. Changes in Significant Accounting Policies and Estimates](index=10&type=section&id=4.%20%E9%87%8D%E8%A6%81%E6%9C%83%E8%A8%88%E6%94%BF%E7%AD%96%E3%80%81%E6%9C%83%E8%A8%88%E4%BC%B0%E8%A8%88%E7%9A%84%E8%AE%8A%E6%9B%B4) There were no significant changes in accounting policies or accounting estimates during the current period - There were no significant changes in accounting policies during the current period[20](index=20&type=chunk) - There were no significant changes in accounting estimates during the current period[21](index=21&type=chunk) [5. Segment Reporting](index=10&type=section&id=5.%20%E5%88%86%E9%83%A8%E5%A0%B1%E5%91%8A) The Group operates primarily within a single geographical segment in China, thus segment data disclosure is not required - The Group operates in a single geographical segment, with revenue primarily derived from and major assets located within China, thus segment data disclosure is not required[22](index=22&type=chunk) [6. Taxation](index=10&type=section&id=6.%20%E7%A8%85%E9%A0%85) The Group's main taxes include VAT, urban maintenance and construction tax, education surcharge, and corporate income tax, with several subsidiaries enjoying high-tech or small and micro-enterprise tax incentives Major Taxes and Tax Rates | Tax Type | Tax Base | Tax Rate (%) | | :--- | :--- | :--- | | Value-Added Tax (VAT) | Taxable value-added amount | 5, 6, 9, 13 | | Urban Maintenance and Construction Tax | Amount of VAT payable | 7 | | Education Surcharge | Amount of VAT payable | 2, 3 | | Corporate Income Tax | Taxable income | 15, 16.5, 20 | - The Company, Capital Information Technology Development Co., Ltd., Shou Xin Cloud Technology Co., Ltd., and Shou Xin Yilian Information Technology Co., Ltd. have all obtained high-tech enterprise certificates, enjoying a **15% preferential corporate income tax rate** for a period of **3 years**[24](index=24&type=chunk) - Beijing Parking Management Center Co., Ltd. and Beijing Shuzhixianxing Technology Co., Ltd. benefit from national small and micro-enterprise income tax preferential policies, where the portion of annual taxable income not exceeding **RMB 1 million** is subject to a **25% reduction** in taxable income and taxed at a **20% rate**, with this policy extended until **December 31, 2027**[24](index=24&type=chunk)[25](index=25&type=chunk) [7. Accounts Receivable](index=12&type=section&id=7.%20%E6%87%89%E6%94%B6%E8%B3%87%E6%AC%BE) As of June 30, 2025, total accounts receivable decreased to RMB 605.73 million, with an overall impairment provision ratio of 28.68%, notably higher for the e-commerce portfolio Accounts Receivable by Aging (RMB yuan) | Aging | Jun 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Within 1 year (inclusive) | 295,325,781.76 | 432,838,536.40 | | 1-2 years | 184,535,831.60 | 59,257,120.50 | | 2-3 years | 34,905,328.14 | 27,876,582.88 | | Over 3 years | 90,964,126.02 | 141,165,163.80 | | Total | 605,731,067.52 | 661,137,403.58 | Accounts Receivable by Impairment Provision Method (RMB yuan) | Category | Book Balance as of Jun 30, 2025 | Impairment Provision as of Jun 30, 2025 | Provision Ratio (%) as of Jun 30, 2025 | | :--- | :--- | :--- | :--- | | Provision for bad debts on an individual basis | 2,662,189.13 | 2,662,189.13 | 100.00 | | Provision for bad debts on a portfolio basis | 603,068,878.39 | 171,086,461.82 | 28.37 | | Of which: E-government portfolio | 493,500,794.50 | 134,130,520.90 | 27.18 | | E-commerce portfolio | 109,568,083.89 | 36,955,940.92 | 33.73 | | Total | 605,731,067.52 | 173,748,650.95 | 28.68 | [8. Contract Assets](index=13&type=section&id=8.%20%E5%90%88%E5%90%8C%E8%B3%87%E7%94%A2) As of June 30, 2025, contract assets significantly increased to RMB 171.07 million, with an impairment provision ratio of 5.56% Contract Assets (RMB yuan) | Item | Book Balance as of Jun 30, 2025 | Impairment Provision as of Jun 30, 2025 | Book Value as of Jun 30, 2025 | | :--- | :--- | :--- | :--- | | Contract Assets | 181,143,508.64 | 10,075,959.03 | 171,067,549.61 | | Item | Book Balance as of Dec 31, 2024 | Impairment Provision as of Dec 31, 2024 | Book Value as of Dec 31, 2024 | | Contract Assets | 44,515,029.98 | 2,727,545.58 | 41,787,484.40 | Contract Assets by Impairment Provision Method (RMB yuan) | Category | Book Balance as of Jun 30, 2025 | Impairment Provision as of Jun 30, 2025 | Provision Ratio (%) as of Jun 30, 2025 | | :--- | :--- | :--- | :--- | | Provision for bad debts on a portfolio basis | 181,143,508.64 | 10,075,959.03 | 5.56 | | Of which: E-government portfolio | 175,405,946.31 | 9,129,003.11 | 5.20 | | E-commerce portfolio | 5,737,562.33 | 946,955.92 | 16.50 | [9. Accounts Payable](index=14&type=section&id=9.%20%E6%87%89%E4%BB%98%E8%B3%87%E6%AC%BE) As of June 30, 2025, total accounts payable decreased to RMB 528.68 million compared to the end of 2024 Accounts Payable by Aging (RMB yuan) | Item | Jun 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Within 1 year | 233,162,869.70 | 380,514,634.20 | | 1 to 2 years | 195,202,806.94 | 73,266,159.82 | | 2 to 3 years | 25,954,290.17 | 30,646,273.86 | | Over 3 years | 74,356,615.74 | 91,292,881.52 | | Total | 528,676,582.55 | 575,719,949.40 | [10. Contract Liabilities](index=14&type=section&id=10.%20%E5%90%88%E5%90%8C%E8%B2%A0%E5%82%B5) As of June 30, 2025, contract liabilities slightly decreased to RMB 275.15 million compared to the end of 2024 Contract Liabilities (RMB yuan) | Item | Jun 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Project receipts | 275,153,986.87 | 287,842,203.33 | [11. Retained Earnings](index=14&type=section&id=11.%20%E6%9C%AA%E5%88%86%E9%85%8D%E5%88%A9%E6%BD%A4) As of June 30, 2025, retained earnings increased to RMB 424.83 million, primarily due to the net profit attributable to owners of the parent company for the current period Changes in Retained Earnings (RMB yuan) | Item | Amount | | :--- | :--- | | Retained earnings at end of prior period before adjustment | 415,287,475.76 | | Retained earnings at beginning of period after adjustment | 415,287,475.76 | | Add: Net profit attributable to owners of the parent company for the current period | 9,541,514.61 | | Balance at end of current period | 424,828,990.37 | [12. Operating Revenue and Cost of Sales](index=14&type=section&id=12.%20%E7%87%9F%E6%A5%AD%E6%94%B6%E5%85%A5%E3%80%81%E7%87%9F%E6%A5%AD%E6%88%90%E6%9C%AC) In H1 2025, both operating revenue and cost of sales significantly increased, with main business revenue being the largest component and a substantial increase in revenue transferred at a point in time Operating Revenue and Cost of Sales (RMB yuan) | Item | Jan-Jun 2025 Revenue | Jan-Jun 2025 Cost | Jan-Jun 2024 Revenue | Jan-Jun 2024 Cost | | :--- | :--- | :--- | :--- | :--- | | Main Business | 677,521,408.17 | 523,385,775.29 | 533,545,107.99 | 378,379,903.98 | | Other Business | 3,232,536.77 | 1,810,287.36 | 4,584,810.35 | 2,074,024.12 | | Total | 680,753,944.94 | 525,196,062.65 | 538,129,918.34 | 380,453,928.10 | Operating Revenue by Contract (RMB yuan) | Contract Classification | Jan-Jun 2025 | Jan-Jun 2024 | | :--- | :--- | :--- | | By timing of goods transfer | 680,753,944.94 | 538,129,918.34 | | Main Business: | 677,521,408.17 | 533,545,107.99 | | Of which: Transferred at a point in time | 256,186,468.02 | 86,458,207.74 | | Transferred over a period of time | 421,334,940.15 | 447,086,900.25 | [13. Income Tax Expense](index=15&type=section&id=13.%20%E6%89%80%E5%BE%97%E7%A8%85%E8%B2%BB%E7%94%A8) In H1 2025, income tax expense was RMB -0.35 million, representing an increase compared to the same period last year Income Tax Expense (RMB yuan) | Item | Jan-Jun 2025 | Jan-Jun 2024 | | :--- | :--- | :--- | | Current income tax expense | 5,422,541.00 | 6,411,830.09 | | Deferred income tax expense | -5,771,505.75 | -8,693,548.96 | | Total | -348,964.75 | -2,281,718.87 | [14. Earnings Per Share](index=15&type=section&id=14.%20%E6%AF%8F%E8%82%A1%E6%94%B6%E7%9B%8A) In H1 2025, basic earnings per share were RMB 0.0329, successfully turning losses into profits Earnings Per Share (RMB/share) | Item | Jan-Jun 2025 | Jan-Jun 2024 | | :--- | :--- | :--- | | Consolidated net profit attributable to ordinary equity holders of the Company | 9,541,514.61 | -23,920,445.62 | | Weighted average number of ordinary shares outstanding of the Company | 289,808,609.00 | 289,808,609.00 | | Basic earnings per share | 0.0329 | -0.0825 | | Diluted earnings per share | 0.0329 | -0.0825 | [15. Dividends](index=15&type=section&id=15.%20%E8%82%A1%E6%81%AF) The Board did not recommend an interim dividend for H1 2025, but approved a final dividend of RMB 20.29 million for FY2024 - The Board did not recommend the payment of an interim dividend for the six months ended June 30, 2025 (H1 2024: nil)[36](index=36&type=chunk) - At the Annual General Meeting held on June 20, 2025, the Company approved a final dividend of **RMB 0.07 per share** (pre-tax) for the year ended December 31, 2024, totaling **RMB 20.29 million**[36](index=36&type=chunk) [Rongtong Information Equity Transfer Litigation and Bankruptcy Liquidation](index=16&type=section&id=%E8%9E%8D%E9%80%9A%E4%BF%A1%E6%81%AF%E8%82%A1%E6%AC%8A%E8%BD%89%E8%AE%93%E8%A8%B4%E8%A8%9F%E5%8F%8A%E7%A0%B4%E7%94%A2%E6%B8%85%E7%AE%97) The Company initiated litigation against Rongtong Information's former shareholders for inflated performance, seeking to revoke the equity transfer agreement and recover consideration, while Rongtong Information entered bankruptcy liquidation - On April 3, 2023, the Company refiled a lawsuit with the Beijing No. 1 Intermediate People's Court, seeking to hold Rongtong Information's former shareholders legally responsible for inflating performance during the assessment period, demanding the revocation of the equity transfer agreement and the return of the paid equity transfer consideration[37](index=37&type=chunk) - The Company applied for asset preservation, with a limit of **RMB 335,995,436.60**. The former shareholders counter-sued and applied for asset preservation, resulting in the freezing of the Company's bank deposit of **RMB 21,428,269.54**, which was automatically unfrozen on January 4, 2025[37](index=37&type=chunk) - Rongtong Information has entered bankruptcy liquidation proceedings and is no longer included in the Company's consolidated scope as of April 1, 2025. On June 3, 2025, the Xiamen Intermediate People's Court ruled to declare Rongtong Information bankrupt[38](index=38&type=chunk) [Operating Review and Outlook](index=17&type=section&id=%E7%B6%93%E7%87%9F%E5%9B%9E%E9%A1%A7%E8%88%87%E5%B1%95%E6%9C%9B) This section reviews the group's operational performance in H1 2025, highlighting business development, human resources, and future strategic outlook [H1 2025 Operating Overview](index=17&type=section&id=2025%E5%B9%B4%E4%B8%8A%E5%8D%8A%E5%B9%B4%E7%B6%93%E7%87%9F%E6%A6%82%E6%B3%81) In H1 2025, the Group enhanced system operation, deepened its 'one core, two platforms, four domains' business structure, and advanced its 'industry-focused, product-oriented, regionalized' strategy, achieving a 26.50% increase in operating revenue and turning losses into profits - The Group continuously enhanced its system operation and assurance capabilities, deepened its 'one core, two platforms, four domains' business structure, and steadfastly advanced its 'industry-focused, product-oriented, regionalized' transformation strategy[39](index=39&type=chunk) H1 2025 Operating Performance | Metric | Amount (RMB million) | YoY Growth | | :--- | :--- | :--- | | Operating Revenue | 680.75 | 26.50% | | Total Profit | 19.82 | Turned loss into profit | | Profit attributable to owners of the company | 9.54 | Turned loss into profit | [Key Business Developments](index=17&type=section&id=%E6%A5%AD%E5%8B%99%E7%99%BC%E5%B1%95%E9%87%8D%E9%BB%9E) The Group made significant progress in cloud-network-digital intelligence, system assurance, and core product commercialization, including government cloud upgrades, large model applications, expanded medical insurance mobile payments, and the promotion of 'CAPs' product system and core products like 'Hongteng,' 'Hongshun,' and 'Zhenanfu' - Increased efforts in cloud-network-digital intelligence business development, completing the Beijing municipal government cloud Xinchuang upgrade and IPv6 transformation, building government-specific large models and supporting computing environments, and achieving the application of the **'Hongdi' large model** in **11 scenarios**[40](index=40&type=chunk) - Strengthened system assurance and delivery, ensuring the safe and stable operation of business systems such as the Beijing Medical Security Information Platform and the 'Jiesu Jiban' (Respond to Every Complaint) system, with medical insurance mobile payments cumulatively covering **over 210 designated medical institutions** and online pharmacy services covering approximately **500 designated retail pharmacies**[41](index=41&type=chunk) - Accelerated the commercialization of core products, building the **'CAPs' product system**, promoting the cloud-native architecture development platform CCAF, enhancing the 'Hongdi' large model, developing the 'Hongpan' data platform, and successfully promoting the **'Hongteng' office product** (signed with **102 clients**, sales of approximately **RMB 40 million**), the **'Hongshun' housing provident fund system**, and the **'Zhenanfu' product**[42](index=42&type=chunk) [Human Resources](index=18&type=section&id=%E4%BA%BA%E5%8A%9B%E8%B3%87%E6%BA%90) As of June 30, 2025, the Group had 1,873 employees, with employee expenses of approximately RMB 251.67 million, and continued to attract high-level talent and deepen compensation reforms Human Resources Overview | Metric | Data | | :--- | :--- | | Total Employees (as of Jun 30, 2025) | 1,873 | | Employee Expenses for the Period | Approximately RMB 251.67 million | - During the reporting period, the Group continued to attract high-level technical and management talent, further deepening compensation and performance appraisal reforms to enhance employee efficiency and internal management[43](index=43&type=chunk) [Future Outlook](index=18&type=section&id=%E6%9C%AA%E4%BE%86%E5%B1%95%E6%9C%9B) In the second half of the year, the Group will continue to deepen reforms, ensure stable system operations, accelerate its 'industry-focused, product-oriented, regionalized' strategic transformation, enhance brand value, and lay the foundation for the '15th Five-Year Plan' development - In the second half of the year, the Group will uphold its corporate culture of 'political integrity, courage, and trustworthiness,' deepen reforms with a craftsman's spirit, and serve clients with its original mission[44](index=44&type=chunk) - Continuously ensure the stable operation of critical systems, accelerate the 'industry-focused, product-oriented, regionalized' strategic transformation, continuously enhance brand value, ensure the successful conclusion of the '14th Five-Year Plan,' and lay the foundation for high-quality development during the '15th Five-Year Plan'[44](index=44&type=chunk) [Financial Review and Other Information](index=19&type=section&id=%E8%B2%A1%E5%8B%99%E5%9B%9E%E9%A1%A7%E5%8F%8A%E5%85%B6%E4%BB%96%E4%BF%A1%E6%81%AF) This section provides a financial review, details on capital expenditure, liquidity, equity investments, taxation, compliance, corporate governance, and post-reporting period events [Financial Review](index=19&type=section&id=%E8%B2%A1%E5%8B%99%E5%9B%9E%E9%A1%A7) In H1 2025, operating revenue increased by 26.50%, gross profit decreased by 1.34%, and net profit attributable to owners of the parent company turned profitable, with industry solutions revenue significantly growing and government clients dominating revenue concentrated in Beijing H1 2025 Financial Performance | Metric | Amount (RMB million) | YoY Change | | :--- | :--- | :--- | | Operating Revenue | 680.75 | +26.50% | | Gross Profit | 155.56 | -1.34% | | Profit attributable to owners of the company | 9.54 | Turned loss into profit | | Other Income | 3.23 | -29.49% | Main Business Revenue Composition | Business Model | Revenue (RMB million) | YoY Change | % of Total Revenue | | :--- | :--- | :--- | :--- | | Products, Software Development and Services | 141.82 | -16.59% | 20.83% | | Industry Solutions | 183.55 | +268.08% | 26.96% | | Operations and Maintenance Services | 352.16 | +12.27% | 51.73% | - **79.34%** of the Group's projects are from government clients, and operating revenue remains concentrated in the Beijing area, accounting for **96.07%** of total operating revenue[45](index=45&type=chunk) [Capital Expenditure, Liquidity and Financial Resources](index=19&type=section&id=%E8%B3%87%E6%9C%AC%E9%96%8B%E6%94%AF%E3%80%81%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) As of June 30, 2025, the Group's total assets and equity attributable to owners of the company remained stable, with a current ratio of 1.43, a gearing ratio of 7.78%, and total bank deposits, balances, and cash of RMB 695.40 million Capital Structure and Liquidity | Metric | Jun 30, 2025 (RMB million) | Change from prior year-end | | :--- | :--- | :--- | | Total Assets | 2,272.44 | -3.80% | | Equity attributable to owners of the company | 1,137.59 | +0.86% | | Current Ratio | 1.43 | No significant change | | Gearing Ratio | 7.78% | - | | Bank deposits, balances and cash | 695.40 | - | - As of the end of the current period, the Group had no pledged assets and had not purchased bank structured deposits[46](index=46&type=chunk) [Equity Investments](index=20&type=section&id=%E8%82%A1%E6%AC%8A%E6%8A%95%E8%B3%87) In H1 2025, the Group's share of results of associates was RMB -23.71 million Equity Investment Income | Item | H1 2025 (RMB million) | | :--- | :--- | | Share of results of associates | -23.71 | [Income Tax](index=20&type=section&id=%E6%89%80%E5%BE%97%E7%A8%85) In H1 2025, income tax expense was RMB -0.35 million, an increase of RMB 1.93 million year-on-year Income Tax Expense | Item | H1 2025 (RMB million) | YoY Increase (RMB million) | | :--- | :--- | :--- | | Income Tax Expense | -0.35 | 1.93 | [Compliance with Standard Code](index=20&type=section&id=%E9%81%B5%E5%AE%88%E6%A8%99%E6%BA%96%E5%AE%88%E5%89%87) All Directors and Supervisors confirmed compliance with the Company's Securities Dealing Code and the HKEX Standard Code during the reporting period - Following specific inquiries made by the Company to its Directors and Supervisors, all Directors and Supervisors confirmed their compliance with the standards set out in the Company's Securities Dealing Code and the HKEX Standard Code for the six months ended June 30, 2025[49](index=49&type=chunk) [Audit Committee](index=20&type=section&id=%E5%AF%A9%E8%A8%88%E5%A7%94%E5%93%A1%E6%9C%83) The Audit Committee reviewed the Group's unaudited condensed consolidated financial statements, confirming their compliance with applicable accounting standards and regulations - The Audit Committee discussed matters related to audit, internal control, risk management, and financial reporting with the Company's senior management, including reviewing the Group's unaudited condensed consolidated financial statements for the six months ended June 30, 2025[50](index=50&type=chunk) - The Audit Committee believes that the financial statements were prepared in accordance with applicable accounting standards, the Listing Rules, and other relevant legal requirements[50](index=50&type=chunk) [Events After Reporting Period](index=20&type=section&id=%E5%A0%B1%E5%91%8A%E6%9C%9F%E5%BE%8C%E4%BA%8B%E9%A0%85) As of the announcement date, there were no significant events after the reporting period that materially affected the Group's operations and financial performance - Subsequent to June 30, 2025, there have been no significant events that materially affected the Group's operations and financial performance as of the date of this announcement[51](index=51&type=chunk) [Corporate Governance](index=20&type=section&id=%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB) During the reporting period, the Company consistently complied with the applicable code provisions set out in Appendix C1 of the Listing Rules - For the six months ended June 30, 2025, the Company consistently complied with the applicable code provisions set out in Appendix C1 of the Listing Rules[52](index=52&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=21&type=section&id=%E8%B3%BC%E8%B2%B7%E3%80%81%E5%87%BA%E5%94%AE%E6%88%96%E8%B4%96%E5%9B%9E%E6%9C%AC%E5%85%AC%E5%8F%B8%E4%B9%8B%E4%B8%8A%E5%B8%82%E8%AD%89%E5%88%B8) During the reporting period, neither the Company nor 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[53](index=53&type=chunk) [By Order of the Board](index=21&type=section&id=%E6%89%BF%E8%91%A3%E4%BA%8B%E6%9C%83%E5%91%BD) This announcement was issued by the Board on August 28, 2025, listing the Company's Executive, Non-executive, and Independent Non-executive Directors - This announcement was issued by the Board on August 28, 2025, with Mr. Yu Donghui as the Chairman[54](index=54&type=chunk) - The Company's Board of Directors includes Executive Directors Mr. Yu Donghui and Mr. Zhang Yiqian; Non-executive Directors Ms. Yan Yi, Mr. Xin Shuangbai, Ms. Zhao Shujie, Mr. Jiang Wei, and Mr. Wang Yuzheng; and Independent Non-executive Directors Mr. Gong Zhiqiang, Mr. Zhang Weixiong, Mr. Dong Jin, Mr. Li Jianqiang, and Mr. Zhou Jinglin[54](index=54&type=chunk)

[Company Information and Report Overview](index=1&type=section&id=1.%20Company%20Information%20and%20Report%20Overview) This section provides basic information about China Aoyuan Group Limited and the scope of its unaudited interim results announcement for the six months ended June 30, 2025 [Basic Report Information](index=1&type=section&id=1.1%20Basic%20Report%20Information) This announcement presents the unaudited interim results of China Aoyuan Group Limited (Stock Code: 3883) for the six months ended June 30, 2025, including changes in the nomination committee composition - This announcement presents the unaudited interim results of China Aoyuan Group Limited (Stock Code: 3883) for the six months ended June 30, 2025[2](index=2&type=chunk) - During the reporting period, the company's board of directors presented the unaudited interim results of the Company and its subsidiaries (collectively, the "Group") for comparison with the same period last year[3](index=3&type=chunk) [Condensed Consolidated Financial Statements](index=1&type=section&id=2.%20Condensed%20Consolidated%20Financial%20Statements) This section presents the condensed consolidated financial statements, including the statement of profit or loss and other comprehensive income, and the statement of financial position, highlighting key financial performance and position metrics [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=1&type=section&id=2.1%20Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For the six months ended June 30, 2025, the company's total turnover was **RMB 4.466 billion**, a 5.7% year-on-year decrease, resulting in a net loss of **RMB 9.480 billion** compared to a net profit of **RMB 22.100 billion** in the prior year, primarily due to significantly increased cost of sales and a shift from net other income to net loss, with basic loss per share at **RMB 217 cents** Key Data from Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (For the six months ended June 30) | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | Year-on-year Change (%) | | :--- | :--- | :--- | :--- | | Total Turnover | 4,465,737 | 4,734,241 | -5.7% | | Cost of Sales | (7,306,587) | (4,937,632) | 47.9% | | Gross Loss | (2,840,850) | (203,391) | 1299.5% | | Net Other Income, Gains and Losses | (1,587,716) | 26,333,764 | -106.0% | | Loss / (Profit) Before Tax | (9,227,372) | 22,632,462 | -140.8% | | Loss / (Profit) for the Period | (9,479,840) | 22,100,490 | -142.9% | | Loss / (Profit) for the Period Attributable to Owners of the Company | (8,814,418) | 22,311,990 | -139.5% | | Basic Loss / (Earnings) Per Share (RMB cents) | (217) | 660 | -132.9% | [Condensed Consolidated Statement of Financial Position](index=3&type=section&id=2.2%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, total assets were **RMB 145.004 billion**, total liabilities **RMB 180.177 billion**, resulting in a negative total equity of **RMB 35.173 billion**, worsening from **RMB 25.868 billion** at year-end 2024, with net current liabilities significantly increasing to **RMB 31.821 billion**, indicating persistent liquidity pressure Key Data from Condensed Consolidated Statement of Financial Position (As of June 30) | Indicator | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Total Non-current Assets | 15,406,535 | 17,043,986 | -9.6% | | Total Current Assets | 129,596,993 | 142,461,130 | -9.0% | | **Total Assets** | **145,003,528** | **159,505,116** | **-9.1%** | | Total Current Liabilities | 161,418,333 | 162,462,776 | -0.6% | | Total Non-current Liabilities | 18,758,382 | 22,909,977 | -18.1% | | **Total Liabilities** | **180,176,715** | **185,372,753** | **-2.8%** | | Net Current Liabilities | (31,821,340) | (20,001,646) | 59.1% | | Total Equity | (35,173,187) | (25,867,637) | 36.0% | [Notes to the Condensed Consolidated Financial Statements](index=5&type=section&id=3.%20Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) This section details the basis of preparation, significant accounting policies, and provides a breakdown of turnover, segment information, other income/losses, income tax, loss/profit composition, dividends, EPS, and receivables/payables [Basis of Preparation of Financial Statements and Going Concern](index=5&type=section&id=3.1%20Basis%20of%20Preparation%20of%20Financial%20Statements%20and%20Going%20Concern) The financial statements are prepared under IAS 34; the company faces severe going concern challenges due to significant losses, operating cash outflows, substantial short-term debt of **RMB 56.768 billion**, and limited cash reserves of **RMB 2.298 billion**, with management implementing measures like debt extensions, asset sales, and cost controls to improve liquidity and ensure continued operations - The Group recorded a net loss of approximately **RMB 9.480 billion** and net operating cash outflows for the six months ended June 30, 2025[8](index=8&type=chunk) - As of June 30, 2025, the Group's total bank and other borrowings, preference shares, and bonds amounted to **RMB 72.810 billion**, of which **RMB 56.768 billion** is due within the next twelve months[8](index=8&type=chunk) - Management has implemented or is implementing various measures, including actively negotiating with domestic lenders for renewal and extension of borrowings (approximately **RMB 1.014 billion** extended), exploring potential asset sales, accelerating project pre-sales and sales, ensuring project delivery, stringent cost control, obtaining support from contractors and suppliers, and resolving litigations to improve liquidity[9](index=9&type=chunk)[10](index=10&type=chunk)[13](index=13&type=chunk) [Significant Accounting Policies](index=6&type=section&id=3.2%20Significant%20Accounting%20Policies) The condensed consolidated financial statements are prepared on a historical cost basis, except for investment properties and certain financial instruments measured at fair value, with the first-time application of IFRS amendments in this period having no significant impact on financial performance or position - The condensed consolidated financial statements are prepared on a historical cost basis, except for investment properties and certain financial instruments which are measured at fair value[11](index=11&type=chunk) - The application of amendments to International Financial Reporting Standards during this interim period had no significant impact on the Group's financial performance and position for the current and prior periods and/or on the disclosures in these condensed consolidated financial statements[12](index=12&type=chunk) [Turnover Analysis](index=7&type=section&id=3.3%20Turnover%20Analysis) Total turnover for the first half of 2025 was **RMB 4.466 billion**, primarily from property development (**RMB 3.829 billion**), with residential apartment sales being the largest component, and property investment income (rental income) at **RMB 61.48 million** Turnover Composition (For the six months ended June 30) | Revenue Type | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Sales of Properties (Customer contracts) | 3,829,498 | 3,994,187 | | Others (Customer contracts) | 574,760 | 649,108 | | Leasing (Investment properties) | 61,479 | 90,946 | | **Total Turnover** | **4,465,737** | **4,734,241** | - In the first half of 2025, sales of residential apartments amounted to **RMB 3.317 billion**, representing the main component of property development revenue[14](index=14&type=chunk) [Segment Information](index=9&type=section&id=3.4%20Segment%20Information) In the first half of 2025, the property development segment generated **RMB 3.829 billion** in turnover but incurred a substantial segment loss of **RMB 4.471 billion**, significantly exceeding the prior year's loss, with property investment and other segments also reporting losses, leading to a total pre-tax loss of **RMB 9.227 billion** Segment Turnover and Results (For the six months ended June 30) | Segment | 2025 Turnover (RMB thousands) | 2025 Segment Results (RMB thousands) | 2024 Turnover (RMB thousands) | 2024 Segment Results (RMB thousands) | | :--- | :--- | :--- | :--- | :--- | | Property Development | 3,829,498 | (4,471,167) | 3,994,187 | (932,826) | | Property Investment | 61,479 | (575,626) | 90,946 | 33,461 | | Others | 574,760 | (219,698) | 649,108 | (104,756) | | **Total** | **4,465,737** | **(5,266,491)** | **4,734,241** | **(1,004,121)** | - In the first half of 2025, the property development segment's loss expanded from **RMB 933 million** in the prior year to **RMB 4.471 billion**, being the primary driver of the Group's overall loss[16](index=16&type=chunk) [Net Other Income, Gains and Losses](index=10&type=section&id=3.5%20Net%20Other%20Income,%20Gains%20and%20Losses) In the first half of 2025, net other income, gains, and losses amounted to a loss of **RMB 1.588 billion**, compared to a gain of **RMB 26.334 billion** in the prior year, with major losses including impairment losses on trade and other receivables (**RMB 949 million**), impairment losses on amounts due from joint ventures (**RMB 347 million**), and loss on debt settlement by physical assets (**RMB 240 million**), while the prior year's significant gain was primarily from offshore debt restructuring Major Components of Net Other Income, Gains and Losses (For the six months ended June 30) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Impairment loss on trade and other receivables | 948,833 | 71,735 | | Impairment loss on amounts due from joint ventures | 347,296 | – | | Loss on debt settlement by physical assets | 239,915 | 138,509 | | Gain on restructuring of offshore debts | – | (26,638,316) | | **Total** | **1,587,716** | **(26,333,764)** | - In the first half of 2025, impairment loss on trade and other receivables significantly increased from **RMB 71.735 million** in the first half of 2024 to **RMB 949 million** in the first half of 2025[18](index=18&type=chunk) [Income Tax Expense](index=11&type=section&id=3.6%20Income%20Tax%20Expense) Income tax expense for the first half of 2025 was **RMB 252 million**, a decrease from **RMB 532 million** in the prior year, primarily comprising PRC corporate income tax and land appreciation tax, with PRC subsidiaries subject to a 25% corporate income tax rate and a progressive land appreciation tax rate ranging from 30% to 60% Composition of Income Tax Expense (For the six months ended June 30) | Tax Type | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Corporate income tax (PRC) | 165,389 | 114,426 | | Land appreciation tax (PRC) | 135,995 | 139,724 | | Deferred tax (PRC) | (48,916) | 277,700 | | **Total Income Tax Expense** | **252,468** | **531,972** | - PRC subsidiaries are subject to a corporate income tax rate of **25%**, and land appreciation tax is levied at progressive rates ranging from **30% to 60%**[19](index=19&type=chunk)[20](index=20&type=chunk) [Composition of Loss / (Profit) for the Period](index=12&type=section&id=3.7%20Composition%20of%20Loss%20/%20(Profit)%20for%20the%20Period) In the first half of 2025, the loss for the period was primarily impacted by interest expenses (**RMB 2.851 billion** after capitalization), impairment of properties for sale (**RMB 3.133 billion**), and staff costs (**RMB 98.91 million**) Major Deductions / Additions to Loss / (Profit) for the Period (For the six months ended June 30) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Finance costs (after capitalization) | 2,850,996 | 2,630,397 | | Impairment of properties for sale (included in cost of sales) | 3,133,184 | 844,865 | | Staff costs | 98,910 | 199,610 | | Depreciation of property, plant and equipment | 139,154 | 164,447 | | Depreciation of right-of-use assets | 41,971 | 32,914 | - Impairment loss on properties for sale significantly increased from **RMB 845 million** in the first half of 2024 to **RMB 3.133 billion** in the first half of 2025, being one of the primary reasons for the expanded gross loss[23](index=23&type=chunk) [Dividends](index=12&type=section&id=3.8%20Dividends) The Board does not recommend or declare any dividends for the six months ended June 30, 2025, consistent with the prior year - The directors of the Company do not recommend or declare the payment of any dividend for the six months ended June 30, 2025 (six months ended June 30, 2024: nil)[24](index=24&type=chunk) [Loss / (Earnings) Per Share](index=13&type=section&id=3.9%20Loss%20/%20(Earnings)%20Per%20Share) As of June 30, 2025, basic loss per share was **RMB 217 cents**, compared to basic earnings per share of **RMB 660 cents** in the prior year, with diluted loss per share being the same as basic loss per share due to the anti-dilutive effect of the conversion of mandatory convertible bonds Loss / (Earnings) Per Share (For the six months ended June 30) | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Loss / (Profit) for the period attributable to owners of the Company | (8,814,418) | 22,311,990 | | Basic loss / (earnings) per share (RMB cents) | (217) | 660 | | Diluted loss / (earnings) per share (RMB cents) | (217) | 516 | - For the six months ended June 30, 2025, the amount of basic loss per share of the Company was not adjusted as the conversion of mandatory convertible bonds had an anti-dilutive effect on the amount of loss per share[26](index=26&type=chunk) [Trade and Other Receivables](index=14&type=section&id=3.10%20Trade%20and%20Other%20Receivables) As of June 30, 2025, total trade and other receivables amounted to **RMB 23.817 billion**, a decrease from **RMB 25.745 billion** at year-end 2024, with other receivables (net of impairment) at **RMB 15.981 billion**, and trade receivables aging analysis showing the highest proportion for over 3 years Composition of Trade and Other Receivables (As of June 30) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Trade receivables (net of allowance) | 459,790 | 457,486 | | Other receivables (net of allowance) | 15,980,609 | 17,934,055 | | Advances to contractors and suppliers | 1,575,667 | 1,341,002 | | Deposits paid for potential acquisition of land use rights and property projects (net of impairment) | 3,245,764 | 3,246,814 | | **Total** | **23,816,762** | **25,745,348** | Aging Analysis of Trade Receivables (As of June 30) | Aging | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | 0 to 60 days | 3,131 | 64,136 | | 61 to 180 days | 21,191 | 7,479 | | 181 to 365 days | 67,191 | 35,866 | | 1 to 2 years | 192,585 | 316,365 | | 2 to 3 years | 197,894 | 91,159 | | Over 3 years | 571,818 | 551,923 | | **Total** | **1,053,810** | **1,066,928** | [Trade and Other Payables](index=15&type=section&id=3.11%20Trade%20and%20Other%20Payables) As of June 30, 2025, total trade and other payables amounted to **RMB 59.619 billion**, a slight increase from **RMB 58.660 billion** at year-end 2024, with other payables at **RMB 35.842 billion** and trade payables and bills payable at **RMB 17.871 billion**, and the aging analysis of trade payables showing a higher proportion for 1 to 3 years Composition of Trade and Other Payables (As of June 30) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Trade payables and bills payable | 17,870,662 | 18,803,519 | | Other payables | 35,842,294 | 33,839,716 | | Consideration payable for acquisition of subsidiaries | 1,420,493 | 1,420,493 | | Other taxes payable | 4,485,443 | 4,596,095 | | **Total** | **59,618,892** | **58,659,823** | Aging Analysis of Trade Payables and Bills Payable (As of June 30) | Aging | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | 0 to 60 days | 184,549 | 450,108 | | 61 to 180 days | 327,332 | 579,925 | | 181 to 365 days | 747,501 | 301,798 | | 1 to 2 years | 7,598,303 | 7,765,204 | | 2 to 3 years | 8,159,079 | 8,810,898 | | Over 3 years | 853,898 | 895,586 | | **Total** | **17,870,662** | **18,803,519** | [Management Discussion and Analysis](index=16&type=section&id=4.%20Management%20Discussion%20and%20Analysis) This section offers a comprehensive review of the Group's business, future outlook, operating performance, and financial position, addressing key challenges and strategic initiatives [Business Review](index=16&type=section&id=4.1%20Business%20Review) During the reporting period, the Group focused on "ensuring delivery" as a core task, accelerating the resolution of domestic debt risks, and driving the restoration of its operational fundamentals by strengthening cost control and enhancing sales capabilities, achieving property contracted sales of **RMB 4.02 billion** and contracted sales GFA of **436 thousand square meters**, with the Greater Bay Area remaining a key focus region with a total land reserve GFA of approximately **5.39 million square meters** - The Group consistently prioritizes "ensuring delivery" as its core task for operational recovery, simultaneously accelerating the resolution of domestic debt risks, and driving the restoration of its operational fundamentals by strengthening cost control and enhancing sales generation capabilities[29](index=29&type=chunk) Property Contracted Sales Details (For the six months ended June 30) | Region | Sales Amount (RMB billions) | Contracted Sales Area (thousand square meters) | | :--- | :--- | :--- | | South China | 2.14 | 188 | | Central and Western Core Region | 1.07 | 158 | | East China | 0.12 | 25 | | Bohai Rim | 0.69 | 65 | | **Total** | **4.02** | **436** | - As of June 30, 2025, the total GFA of land reserves in the Greater Bay Area was approximately **5.39 million square meters**, with attributable GFA of approximately **4.06 million square meters**[29](index=29&type=chunk) [Future Outlook](index=16&type=section&id=4.2%20Future%20Outlook) Facing industry recovery, the Group will focus on three core strategies: deepening sales destocking and accelerating resource integration; tackling debt restructuring and optimizing capital structure; and solidifying the operational foundation while exploring new asset-light business models like代建 (agency construction) to build sustainable operational capabilities and restore market confidence - The Group will seize the industry recovery window by focusing on three core strategies: deepening sales destocking and accelerating resource integration; tackling debt restructuring and optimizing capital structure; and solidifying the operational foundation while exploring new asset-light business models like agency construction[30](index=30&type=chunk) [Operating Performance Analysis](index=17&type=section&id=4.3%20Operating%20Performance%20Analysis) During the reporting period, the Group's operating performance faced challenges, with decreased total turnover and a significant increase in gross loss, though sales and administrative expenses were controlled; the company ultimately recorded a loss attributable to shareholders, primarily due to the base effect of offshore debt restructuring gains in the prior year [Turnover](index=17&type=section&id=4.3.1%20Turnover) Total turnover for the reporting period was **RMB 4.466 billion**, a 5.7% year-on-year decrease, with property development revenue accounting for **85.8%** and declining by **4.1%**, while the total GFA of properties delivered increased by **24.4%** to **510 thousand square meters** - During the reporting period, the Group's total turnover was approximately **RMB 4.466 billion**, a decrease of approximately **RMB 268 million** or **5.7%** compared to approximately **RMB 4.734 billion** in the same period of 2024[31](index=31&type=chunk) - Property development revenue, other income from hotel operations, and property investment income accounted for **85.8%**, **12.8%**, and **1.4%** respectively[31](index=31&type=chunk) - Revenue from sales of properties was approximately **RMB 3.829 billion**, a decrease of approximately **RMB 165 million** or **4.1%** compared to approximately **RMB 3.994 billion** in the same period of 2024; the total GFA of properties delivered increased by **24.4%** from **410 thousand square meters** in the same period of 2024 to **510 thousand square meters**[31](index=31&type=chunk) [Gross Profit and Gross Profit Margin](index=17&type=section&id=4.3.2%20Gross%20Profit%20and%20Gross%20Profit%20Margin) Gross loss for the reporting period was **RMB 2.841 billion**, a **1,299.5%** year-on-year increase, with a gross loss margin of **63.6%**; excluding impairment losses on properties for sale, adjusted gross profit was **RMB 292 million**, a **54.5%** year-on-year decrease - During the reporting period, the Group's gross loss was approximately **RMB 2.841 billion**, an increase of **1,299.5%** compared to a gross loss of approximately **RMB 203 million** in the same period of 2024; the Group's gross loss margin was **63.6%**[32](index=32&type=chunk) - Excluding impairment losses on properties for sale included in cost of sales, the Group's gross profit for the first six months of 2025 was approximately **RMB 292 million**, a **54.5%** decrease compared to the gross profit of **RMB 642 million** on a comparable basis in the same period of 2024[32](index=32&type=chunk) [Other Income, Gains and Losses](index=17&type=section&id=4.3.3%20Other%20Income,%20Gains%20and%20Losses) Other income, gains, and losses during the reporting period primarily included expected credit losses of approximately **RMB 1.324 billion** and losses on debt settlement by physical assets of approximately **RMB 240 million** - During the reporting period, other income, gains and losses primarily included expected credit losses of approximately **RMB 1.324 billion**, losses on debt settlement by physical assets of approximately **RMB 240 million**, and other losses of approximately **RMB 24 million**[33](index=33&type=chunk) [Selling and Administrative Expenses](index=17&type=section&id=4.3.4%20Selling%20and%20Administrative%20Expenses) Total selling and distribution expenses decreased by **36.0%** year-on-year to **RMB 160 million**, and total administrative expenses decreased by **31.6%** year-on-year to **RMB 349 million**, primarily due to organizational streamlining and effective cost control - Total selling and distribution expenses were approximately **RMB 160 million**, a **36.0%** decrease compared to approximately **RMB 250 million** in the same period of 2024[34](index=34&type=chunk) - Total administrative expenses were approximately **RMB 349 million**, a **31.6%** decrease compared to approximately **RMB 510 million** in the same period of 2024, primarily attributable to the Group's continuous organizational streamlining and effective control over costs and expenses[34](index=34&type=chunk) [Loss Attributable to Owners of the Company](index=17&type=section&id=4.3.5%20Loss%20Attributable%20to%20Owners%20of%20the%20Company) During the reporting period, loss attributable to owners of the Company was approximately **RMB 8.814 billion**, compared to a profit of **RMB 22.312 billion** in the prior year, primarily due to the inclusion of approximately **RMB 26.638 billion** in offshore debt restructuring gains in the prior year - During the reporting period, loss attributable to owners of the Company was approximately **RMB 8.814 billion**, compared to a profit of approximately **RMB 22.312 billion** in the same period of 2024, which included a gain on offshore debt restructuring of approximately **RMB 26.638 billion**[35](index=35&type=chunk) [Financial Position Analysis](index=18&type=section&id=4.4%20Financial%20Position%20Analysis) As of June 30, 2025, the Group's total assets and liabilities both decreased, but the current ratio deteriorated, cash and bank balances significantly reduced, and short-term debt pressure is immense, indicating significant liquidity risks and repayment challenges [Total Assets, Total Liabilities, and Current Ratio](index=18&type=section&id=4.4.1%20Total%20Assets,%20Total%20Liabilities,%20and%20Current%20Ratio) As of June 30, 2025, total assets were approximately **RMB 145.004 billion**, and total liabilities approximately **RMB 180.177 billion**; the current ratio decreased from **0.9** at year-end 2024 to **0.8**, indicating further tightening liquidity - As of June 30, 2025, the Group's total assets were approximately **RMB 145.004 billion** (December 31, 2024: approximately **RMB 159.505 billion**), and total liabilities were approximately **RMB 180.177 billion** (December 31, 2024: approximately **RMB 185.373 billion**)[36](index=36&type=chunk) - As of June 30, 2025, the current ratio (calculated as total current assets divided by total current liabilities) was **0.8** (December 31, 2024: **0.9**)[36](index=36&type=chunk) [Cash Position](index=18&type=section&id=4.4.2%20Cash%20Position) As of June 30, 2025, cash and bank balances were approximately **RMB 328 million**, restricted bank deposits approximately **RMB 1.970 billion**, totaling approximately **RMB 2.298 billion**, with **93.6%** denominated in RMB, representing a significant decrease in cash reserves from year-end 2024 - As of June 30, 2025, the Group's cash and bank balances were approximately **RMB 328 million** (December 31, 2024: approximately **RMB 886 million**)[37](index=37&type=chunk) - As of June 30, 2025, the Group's restricted bank deposits were approximately **RMB 1.970 billion** (December 31, 2024: approximately **RMB 2.254 billion**)[37](index=37&type=chunk) - Total cash, bank balances, and restricted bank deposits amounted to approximately **RMB 2.298 billion**, of which **93.6%** were denominated in RMB[37](index=37&type=chunk) [Borrowings, Preference Shares, and Corporate Bonds](index=18&type=section&id=4.4.3%20Borrowings,%20Preference%20Shares,%20and%20Corporate%20Bonds) As of June 30, 2025, bank and other borrowings were approximately **RMB 49.451 billion**, and preference shares and corporate bonds approximately **RMB 23.359 billion**, totaling **RMB 72.810 billion**; of this, **RMB 56.768 billion** is due within one year, posing significant short-term repayment pressure - As of June 30, 2025, the Group's bank and other borrowings were approximately **RMB 49.451 billion** (December 31, 2024: approximately **RMB 51.180 billion**), and preference shares and corporate bonds were approximately **RMB 23.359 billion** (December 31, 2024: approximately **RMB 22.625 billion**)[38](index=38&type=chunk) Repayment Period of Borrowings, Preference Shares, and Corporate Bonds (As of June 30) | Repayment Period | June 30, 2025 (RMB millions) | December 31, 2024 (RMB millions) | | :--- | :--- | :--- | | Repayable on demand and within 1 year | 56,768 | 53,662 | | Over 1 year but not exceeding 2 years | 1,722 | 4,626 | | Over 2 years but not exceeding 5 years | 4,012 | 5,272 | | Over 5 years | 10,308 | 10,245 | | **Total** | **72,810** | **73,805** | [Contingent Liabilities (Guarantees)](index=19&type=section&id=4.4.4%20Contingent%20Liabilities%20(Guarantees)) As of June 30, 2025, the Group had contingent liabilities of approximately **RMB 63.741 billion**, primarily from guarantees for bank mortgage loans of purchasers, and bank borrowings of certain third parties, joint ventures, and associates - As of June 30, 2025, the Group had contingent liabilities of approximately **RMB 63.741 billion** (December 31, 2024: approximately **RMB 66.445 billion**) arising from guarantees provided for bank mortgage loans of purchasers, and bank borrowings of certain third parties, joint ventures, and associates[40](index=40&type=chunk) [Commitments](index=19&type=section&id=4.4.5%20Commitments) As of June 30, 2025, the Group had contracted but unprovided construction costs of **RMB 11.751 billion**, and its share of contracted but unprovided construction cost commitments for joint ventures was **RMB 3.346 billion**, expected to be funded by property sales and bank borrowings - As of June 30, 2025, the Group had contracted but unprovided construction costs of **RMB 11.751 billion** (December 31, 2024: approximately **RMB 12.944 billion**)[41](index=41&type=chunk) - The Group's share of commitments arising from contracted but unprovided construction costs relating to its joint ventures was approximately **RMB 3.346 billion** (December 31, 2024: **RMB 3.833 billion**)[41](index=41&type=chunk) [Foreign Currency Risk](index=19&type=section&id=4.4.6%20Foreign%20Currency%20Risk) The Group's majority of revenue and operating costs are denominated in RMB, with primary foreign currency risks stemming from USD-denominated preference shares and convertible bonds, and HKD-denominated bank loans; management closely monitors and considers hedging - The majority of the Group's revenue and operating costs are denominated in RMB, and other than foreign currency denominated bank deposits, USD-denominated preference shares and convertible bonds, and HKD-denominated bank loans, the Group's operating cash flows or liquidity are not significantly affected by any other direct exchange rate fluctuations[42](index=42&type=chunk) [Pledge of Assets](index=19&type=section&id=4.4.7%20Pledge%20of%20Assets) As of June 30, 2025, the Group pledged assets totaling approximately **RMB 60.168 billion**, including properties held for sale, property, plant and equipment, investment properties, right-of-use assets, and restricted bank deposits, to banks to secure financing - As of June 30, 2025, the Group pledged properties held for sale, property, plant and equipment, investment properties, right-of-use assets, and restricted bank deposits totaling approximately **RMB 60.168 billion** (December 31, 2024: approximately **RMB 65.370 billion**) to various banks to secure project loans and general banking facilities granted to the Group[43](index=43&type=chunk) [Other Information](index=19&type=section&id=5.%20Other%20Information) This section covers post-reporting period events, interim dividend policy, securities transactions, corporate governance compliance, employee and remuneration policies, audit committee review, and publication details [Events After Reporting Period](index=19&type=section&id=5.1%20Events%20After%20Reporting%20Period) No significant events with material impact on the Group occurred after the reporting period - No significant events with material impact on the Group occurred after the reporting period[44](index=44&type=chunk) [Interim Dividend](index=19&type=section&id=5.2%20Interim%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 the six months ended June 30, 2025 (six months ended June 30, 2024: nil)[45](index=45&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=20&type=section&id=5.3%20Purchase,%20Sale%20or%20Redemption%20of%20the%20Company's%20Listed%20Securities) 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 for the six months ended June 30, 2025[46](index=46&type=chunk) [Corporate Governance](index=20&type=section&id=5.4%20Corporate%20Governance) The Company has complied with the Corporate Governance Code, with deviations noted for an independent non-executive director and the Board Chairman's absence from the AGM; Ms. Shi Lili was appointed as a member of the Nomination Committee, effective August 28, 2025, in response to revised code requirements [Compliance with Corporate Governance Code](index=20&type=section&id=5.4.1%20Compliance%20with%20Corporate%20Governance%20Code) The Company has complied with the code provisions of the Corporate Governance Code, with exceptions for one non-executive director and the Board Chairman who were unable to attend the 2025 Annual General Meeting due to other important commitments - For the six months ended June 30, 2025, the Company has complied with the code provisions of the Corporate Governance Code, with the following deviation: one non-executive director was unable to attend the Company's Annual General Meeting held on June 26, 2025[47](index=47&type=chunk) - Mr. Mohamed Obaid Ghulam Badakkan Alobeidli, the Chairman of the Board of the Company, was unable to attend the 2025 Annual General Meeting due to an unavoidable scheduling conflict arising from other urgent business commitments[47](index=47&type=chunk) [Changes in Nomination Committee Composition](index=20&type=section&id=5.4.2%20Changes%20in%20Nomination%20Committee%20Composition) Non-executive Director Ms. Shi Lili was appointed as a member of the Nomination Committee, effective August 28, 2025, in response to the revised Corporate Governance Code set out in Appendix C1 of the Listing Rules - Ms. Shi Lili, a non-executive Director, was appointed as a member of the Nomination Committee of the Company with effect from August 28, 2025[48](index=48&type=chunk) - Ms. Shi's appointment was implemented in response to the revised Corporate Governance Code set out in Appendix C1 to the Listing Rules[48](index=48&type=chunk) [Standard Code for Securities Transactions by Directors](index=20&type=section&id=5.4.3%20Standard%20Code%20for%20Securities%20Transactions%20by%20Directors) Following specific inquiries, all Directors confirmed compliance with the Standard Code for Securities Transactions by Directors as set out in Appendix C3 of the Listing Rules throughout the reporting period - Following specific inquiries made to all Directors of the Company, all Directors confirmed that they had complied with the required standards of dealings as set out in the Standard Code throughout the six months ended June 30, 2025[49](index=49&type=chunk) [Employees and Remuneration Policy](index=21&type=section&id=5.5%20Employees%20and%20Remuneration%20Policy) As of June 30, 2025, the Group employed approximately **2,868** staff, a decrease from **3,123** at year-end 2024; the company regularly reviews remuneration and benefits, providing PRC social insurance, HK MPF, and other insurance for eligible employees - As of June 30, 2025, the Group employed approximately **2,868** staff (December 31, 2024: **3,123** staff)[50](index=50&type=chunk) - The Group regularly reviews its employees' remuneration and benefits based on relevant market practices and individual performance[50](index=50&type=chunk) [Audit Committee](index=21&type=section&id=5.6%20Audit%20Committee) The Audit Committee, comprising Mr. Zhang Guoqiang (Chairman), Mr. Li Jingbo, and Mr. Wong Wai Keung, has reviewed the Group's accounting principles and practices and the interim financial statements - The Audit Committee of the Company comprises Mr. Zhang Guoqiang (Chairman), Mr. Li Jingbo, and Mr. Wong Wai Keung[51](index=51&type=chunk) - The Audit Committee, together with management, has reviewed the accounting principles and practices adopted by the Group and discussed accounting and financial reporting matters, including the review of the Group's unaudited condensed interim financial statements for the six months ended June 30, 2025[51](index=51&type=chunk) [Publication of Interim Results and Interim Report](index=21&type=section&id=5.7%20Publication%20of%20Interim%20Results%20and%20Interim%20Report) This interim results announcement has been published on the HKEX and the Company's website, and the interim report will be dispatched to shareholders and published on the website - This interim results announcement is published on the website of the Stock Exchange (http://www.hkexnews.hk) and the Company's website (http://www.aoyuan.com.cn)[52](index=52&type=chunk) - The Company will dispatch to its shareholders the interim report for the six months ended June 30, 2025, containing all information required by the Listing Rules, and will publish such information on the aforementioned websites in due course[52](index=52&type=chunk)

[Announcement Overview](index=1&type=section&id=%E5%85%AC%E5%91%8A%E6%A6%82%E8%A7%88) This section provides an overview of the interim results announcement, including key financial highlights and the Board's dividend declaration [Interim Results Announcement](index=1&type=section&id=%E4%B8%AD%E6%9C%9F%E6%A5%AD%E7%B8%BE%E5%85%AC%E5%91%8A) This announcement presents the unaudited condensed consolidated interim results of Trio Industrial Electronics Group Limited for the six months ended June 30, 2025 - Company name: Trio Industrial Electronics Group Limited (Stock Code: 1710)[2](index=2&type=chunk) - Reporting period: Six months ended June 30, 2025[2](index=2&type=chunk) [Financial Summary](index=1&type=section&id=%E8%B2%A1%E5%8B%99%E6%91%98%E8%A6%81) The Board resolved to declare an interim dividend, with revenue growing by 4.0%, gross profit by 12.5%, gross margin increasing by 1.4 percentage points, and both loss before income tax and loss attributable to owners of the Company significantly reduced - The Board has resolved to declare an interim dividend of **HK0.6 cents** per ordinary share for the six months ended June 30, 2025 (2024: nil)[4](index=4&type=chunk) Financial Summary for the six months ended June 30, 2025 | Metric | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 404,700 | 389,200 | +4.0% | | Gross Profit | 76,100 | 67,600 | +12.5% | | Gross Margin | 18.8% | 17.4% | +1.4 percentage points | | Loss Before Income Tax | (16,900) | (28,300) | -40.4% | | Loss Attributable to Owners of the Company | (14,800) | (25,900) | -42.9% | [Condensed Consolidated Financial Statements](index=2&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8) This section presents the Group's interim condensed consolidated statement of comprehensive income and statement of financial position, detailing financial performance and position [Interim Condensed Consolidated Statement of Comprehensive Income](index=2&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) For the six months ended June 30, 2025, the company's revenue increased to HK$404,711 thousand, gross profit rose to HK$76,064 thousand, operating loss significantly narrowed, and loss attributable to owners of the Company decreased to HK$14,757 thousand Interim Condensed Consolidated Statement of Comprehensive Income (For the six months ended June 30) | Metric | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Revenue | 404,711 | 389,249 | | Cost of Sales | (328,647) | (321,629) | | Gross Profit | 76,064 | 67,620 | | Other Income | 2,098 | 1,272 | | Selling and Distribution Expenses | (9,716) | (8,320) | | Administrative Expenses | (80,712) | (89,657) | | Other Operating (Expenses)/Income, Net | (281) | 4,880 | | Operating Loss | (12,547) | (24,205) | | Finance Income | 1,251 | 1,127 | | Finance Expenses | (5,614) | (5,295) | | Loss Before Income Tax | (16,910) | (28,373) | | Income Tax Credit | 2,153 | 2,521 | | Loss for the Period Attributable to Owners of the Company | (14,757) | (25,852) | | Basic and Diluted Loss Per Share (HK Cents) | (1.48) | (2.59) | [Interim Condensed Consolidated Statement of Financial Position](index=3&type=section&id=%E4%B8%AD%E6%9C%9F%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81%E8%A1%A8) As of June 30, 2025, the company's total non-current assets were HK$207,027 thousand, net current assets were HK$302,782 thousand, and net assets were HK$395,522 thousand, showing a decrease from December 31, 2024 Interim Condensed Consolidated Statement of Financial Position (As at June 30, 2025) | Metric | 2025年6月30日 (HK$ Thousand) | 2024年12月31日 (HK$ Thousand) | | :--- | :--- | :--- | | **Assets** | | | | Non-current Assets | 207,027 | 243,609 | | Current Assets | 558,406 | 574,081 | | **Current Liabilities** | | | | Current Liabilities | 255,624 | 256,867 | | Net Current Assets | 302,782 | 317,214 | | Total Assets Less Current Liabilities | 509,809 | 560,823 | | **Non-current Liabilities** | | | | Non-current Liabilities | 114,287 | 143,286 | | **Equity** | | | | Net Assets | 395,522 | 417,537 | | Total Equity | 395,522 | 417,537 | [Notes to the Condensed Consolidated Interim Financial Information](index=4&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E4%B8%AD%E6%9C%9F%E8%B2%A1%E5%8B%99%E8%B3%87%E6%96%99%E9%99%84%E8%A8%BB) This section provides detailed notes to the interim financial information, covering accounting policies, segment data, and specific financial line items [General Information](index=4&type=section&id=%E4%B8%80%E8%88%AC%E8%B3%87%E6%96%99) The company is an investment holding company incorporated and listed in Hong Kong, primarily engaged in the manufacturing and sale of electronic products, with Trio Industrial Electronics Holdings Limited as its direct holding company - Company nature: A limited company incorporated in Hong Kong, listed on the Main Board of the Stock Exchange, acting as an investment holding company[8](index=8&type=chunk) - Principal business: Manufacturing and sale of electronic products[8](index=8&type=chunk) - Reporting currency: Interim financial information is presented in HK$ thousand[8](index=8&type=chunk) [Basis of Preparation](index=4&type=section&id=%E7%B7%A8%E8%A3%BD%E5%9F%BA%E6%BA%96) The interim financial information is prepared in accordance with the Listing Rules of the Stock Exchange and HKAS 34, consistent with the accounting policies in the prior year's annual report, except for adopted revised standards - Basis of preparation: Listing Rules of the Stock Exchange and HKAS 34 "Interim Financial Reporting"[9](index=9&type=chunk) - Accounting policies: Consistent with those in the annual report for the year ended December 31, 2024[9](index=9&type=chunk) [Changes in Accounting Standards](index=4&type=section&id=%E6%9C%83%E8%A8%88%E6%BA%96%E5%89%87%E8%AE%8A%E5%8B%95) The Group has adopted revised standards on lack of exchangeability, with no significant impact expected; HKFRS 18, effective January 1, 2027, which is expected to have extensive presentation and disclosure impacts, has not yet been adopted [Adopted Revised Standards](index=4&type=section&id=%E6%96%BC%E4%BA%8C%E9%9B%B6%E4%BA%8C%E4%BA%94%E5%B9%B4%E7%94%9F%E6%95%88%E4%B8%A6%E8%88%87%E6%9C%AC%E9%9B%86%E5%9C%98%E7%87%9F%E9%81%8B%E6%9C%89%E9%97%9C%E7%9A%84%E7%B6%93%E4%BF%AE%E8%A8%82%E6%BA%96%E5%89%87) The Group has adopted HKAS 21 and HKFRS 1 (Amendments) regarding lack of exchangeability, effective for financial periods beginning on or after January 1, 2025, with no significant impact expected - Adopted standards: HKAS 21 and HKFRS 1 (Amendments) concerning lack of exchangeability[10](index=10&type=chunk) - Impact assessment: No impact on amounts recognized in prior periods, and no significant impact expected on current or future periods[10](index=10&type=chunk) [New and Revised Standards Not Yet Adopted](index=5&type=section&id=%E6%9C%AA%E6%8E%A1%E7%B4%8D%E7%9A%84%E6%96%B0%E8%A8%82%E5%8F%8A%E7%B6%93%E4%BF%AE%E8%A8%82%E6%BA%96%E5%88%87%E5%8F%8A%E8%A8%AD%E9%87%8B) The Group has not yet adopted HKFRS 18 "Presentation and Disclosure in Financial Statements," effective January 1, 2027, which is expected to have extensive presentation and disclosure impacts, with management currently assessing its detailed effects - Unadopted standard: HKFRS 18 – Presentation and Disclosure in Financial Statements[11](index=11&type=chunk) - Effective date: Annual periods beginning on or after January 1, 2027[11](index=11&type=chunk) - Expected impact: Will have extensive impacts on presentation and disclosure, but will not affect the recognition or measurement of items in the financial statements[11](index=11&type=chunk) [Segment Information](index=5&type=section&id=%E5%88%86%E9%83%A8%E8%B3%87%E6%96%99) The Group is considered a single operating segment, primarily engaged in manufacturing and selling electronic products across China, Thailand, Ireland, and the UK; Europe remains the largest revenue source, but China's revenue growth is significant, and customer A's revenue contribution has substantially increased [Operating Segments](index=5&type=section&id=%E7%B6%93%E7%87%9F%E5%88%86%E9%83%A8) The Board considers the Group as a single operating segment, primarily engaged in the manufacturing and sale of electronic products, with operations across China, Thailand, Ireland, and the United Kingdom - Operating segment: The Group is considered a single operating segment[12](index=12&type=chunk) - Business locations: China, Thailand, Ireland, and the United Kingdom[12](index=12&type=chunk) [Information About Major Customers](index=5&type=section&id=%E4%B8%BB%E8%A6%81%E5%AE%A2%E6%88%B6%E7%9A%84%E8%B3%87%E6%96%99) For the six months ended June 30, 2025, Customer A's contribution to total revenue significantly increased, becoming the Group's largest customer, while contributions from Customers B and C decreased Revenue Contribution from Major Customers (For the six months ended June 30) | Customer | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Customer A | 150,644 | 50,120 | | Customer B | 53,272 | 96,393 | | Customer C | 50,205 | 60,447 | | Customer D | Not Applicable | 60,294 | [Geographical Revenue Segments](index=6&type=section&id=%E5%9C%B0%E7%90%86%E6%94%B6%E7%9B%8A%E5%88%86%E9%83%A8) Europe remains the Group's largest revenue source, but revenue from the China region has grown significantly, while revenue from North America, Southeast Asia, and other regions has decreased Geographical Revenue Segments (For the six months ended June 30) | Region | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Europe | 342,433 | 335,560 | | North America | 30,354 | 30,434 | | China | 20,686 | 10,640 | | Southeast Asia | 3,673 | 3,912 | | Hong Kong | 2,527 | 2,166 | | Others | 5,038 | 6,537 | | Total | 404,711 | 389,249 | - Major markets: European customers contribute most of the revenue, followed by the US, China, Southeast Asia, and Hong Kong[14](index=14&type=chunk) [Geographical Distribution of Non-current Assets](index=6&type=section&id=%E9%9D%9E%E6%B5%81%E5%8B%95%E8%B3%87%E7%94%A2%E5%9C%B0%E7%90%86%E5%88%86%E4%BD%88) The Group's non-current assets, primarily property, plant and equipment and right-of-use assets, are mainly located in Hong Kong, China, and Thailand - Hong Kong non-current assets: Carrying amount of land and buildings was **HK$18,803 thousand** (December 31, 2024: HK$19,340 thousand)[15](index=15&type=chunk) - Other major distributions: China and Thailand[15](index=15&type=chunk) [Revenue and Other Income](index=6&type=section&id=%E6%94%B6%E7%9B%8A%E5%8F%8A%E5%85%B6%E4%BB%96%E6%94%B6%E5%85%A5) The Group's revenue primarily derives from goods sales, with other income including government grants and handling fee income, resulting in an overall increase in other income Revenue and Other Income (For the six months ended June 30) | Item | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Revenue (Sales of goods) | 404,711 | 389,249 | | Total other income | 2,098 | 1,272 | | Of which government grants | 365 | 6 | | Of which handling fee income | 567 | 15 | - Revenue recognition: Revenue from sales of goods is recognized at a point in time[16](index=16&type=chunk) [Expenses by Nature](index=7&type=section&id=%E6%8C%89%E6%80%A7%E8%B3%AA%E5%8A%83%E5%88%86%E9%96%8B%E6%94%AF) The Group's expenses primarily include cost of inventories, employee benefit expenses, depreciation, freight, and utility expenses, with employee benefit expenses significantly decreasing Expenses by Nature (For the six months ended June 30) | Item | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Cost of inventories | 279,622 | 266,751 | | Employee benefit expenses | 80,857 | 98,965 | | Depreciation of property, plant and equipment | 8,298 | 8,561 | | Depreciation of right-of-use assets | 7,563 | 7,055 | | Freight and transport expenses | 6,032 | 5,304 | [Other Operating (Expenses)/Income, Net](index=7&type=section&id=%E5%85%B6%E4%BB%96%E7%B6%93%E7%87%9F%EF%BC%88%E9%96%8B%E6%94%AF%EF%BC%89%E2%88%95%E6%94%B6%E5%85%A5%E6%B7%A8%E9%A1%8D) This period recorded net other operating expenses, primarily due to increased impairment loss provision for trade receivables, impairment loss on intangible assets, and decreased net foreign exchange gains, contrasting with net operating income in the prior year Other Operating (Expenses)/Income, Net (For the six months ended June 30) | Item | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Net foreign exchange gains | 2,906 | 3,676 | | Impairment loss (provision)/reversal for trade receivables | (1,366) | 1,146 | | Impairment loss on intangible assets | (1,791) | – | | Total | (281) | 4,880 | [Finance Income and Expenses](index=7&type=section&id=%E8%B2%A1%E5%8B%99%E6%94%B6%E5%85%A5%E5%8F%8A%E9%96%8B%E6%94%AF) Finance income, primarily from bank interest, increased; finance expenses rose due to higher interest on lease liabilities, partially offset by reduced bank charges and interest on bank borrowings Finance Income and Expenses (For the six months ended June 30) | Item | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Finance income (Bank interest income) | 1,251 | 1,127 | | Total finance expenses | (5,614) | (5,295) | | Of which interest on lease liabilities | (3,296) | (2,374) | | Net finance expenses | (4,363) | (4,168) | [Income Tax Credit](index=8&type=section&id=%E6%89%80%E5%BE%97%E7%A8%85%E6%8A%B5%E5%85%8D) The Group recorded an income tax credit of HK$2,153 thousand for the six months ended June 30, 2025, primarily from deferred tax credits, with Hong Kong profits tax applying a two-tiered tax rate Income Tax Credit (For the six months ended June 30) | Item | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Over-provision in prior years | 238 | – | | Deferred tax credit | 1,915 | 2,521 | | Total income tax credit | 2,153 | 2,521 | - Hong Kong profits tax: A two-tiered tax rate applies, with **8.25%** on the first **HK$2,000,000** of assessable profits and **16.5%** on the remaining profits[19](index=19&type=chunk) [Loss Per Share](index=8&type=section&id=%E6%AF%8F%E8%82%A1%E8%99%A7%E6%90%8D) For the six months ended June 30, 2025, loss attributable to owners of the Company was HK$14,757 thousand, with basic loss per share of HK1.48 cents, an improvement from the prior year; diluted loss per share is the same as basic loss per share due to no potential dilutive ordinary shares [Basic Loss Per Share](index=8&type=section&id=%E6%AF%8F%E8%82%A1%E5%9F%BA%E6%9C%AC%E8%99%A7%E6%90%8D) For the six months ended June 30, 2025, loss attributable to owners of the Company was HK$14,757 thousand, with basic loss per share of HK1.48 cents, showing an improvement from the prior year Basic Loss Per Share (For the six months ended June 30) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Loss attributable to owners of the Company (HK$ Thousand) | (14,757) | (25,852) | | Weighted average number of ordinary shares in issue (Thousand shares) | 1,000,000 | 1,000,000 | | Basic loss per share (HK Cents) | (1.48) | (2.59) | [Diluted Loss Per Share](index=8&type=section&id=%E6%AF%8F%E8%82%A1%E6%94%A4%E8%96%84%E8%99%A7%E6%90%8D) As there were no potential dilutive ordinary shares during the reporting period, diluted loss per share is the same as basic loss per share - No potential dilutive ordinary shares, diluted loss per share is the same as basic loss per share[22](index=22&type=chunk) [Dividends](index=9&type=section&id=%E6%9C%9F%E5%85%A7%E7%A2%BA%E8%AA%8D%E7%82%BA%E5%88%86%E6%B4%BE%E7%9A%84%E8%82%A1%E6%81%AF) The company declared and recognized a final dividend of HK1.2 cents per share for 2024, and subsequently declared an interim dividend of HK0.6 cents per share for 2025 after the reporting period Dividend Distribution (For the six months ended June 30) | Item | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | | :--- | :--- | :--- | | 2024 final dividend (HK1.2 cents per share) | 12,000 | – | | 2025 interim dividend (HK0.6 cents per share) | 6,000 | – | - Interim dividend: **HK0.6 cents** per ordinary share, declared after the reporting period and not recognized as a liability[24](index=24&type=chunk) [Trade and Other Receivables](index=9&type=section&id=%E8%B2%A3%E6%98%93%E5%8F%8A%E5%85%B6%E4%BB%96%E6%87%89%E6%94%B6%E6%AC%BE%E9%A0%85) As of June 30, 2025, net trade and other receivables totaled HK$250,643 thousand, with an increased impairment loss provision for trade receivables; trade receivables under 30 days increased, while those between 31-60 days and over 60 days decreased Trade and Other Receivables (As at June 30, 2025) | Item | 2025年6月30日 (HK$ Thousand) | 2024年12月31日 (HK$ Thousand) | | :--- | :--- | :--- | | Trade receivables | 248,682 | 251,380 | | Less: Impairment loss provision | (3,680) | (2,290) | | Trade receivables – net | 245,002 | 249,090 | | Other receivables | 5,641 | 6,720 | | Total | 250,643 | 255,810 | - Factoring arrangements: Some trade receivables are subject to factoring arrangements, but the Group has not transferred substantially all risks and rewards, thus continuing to recognize them[23](index=23&type=chunk) [Ageing Analysis of Trade Receivables](index=10&type=section&id=%E8%B2%A3%E6%98%93%E6%87%89%E6%94%B6%E6%AC%BE%E9%A0%85) As of June 30, 2025, trade receivables under 30 days increased as a proportion, while those between 31-60 days and over 60 days decreased Ageing Analysis of Trade Receivables (As at June 30, 2025) | Ageing | 2025年6月30日 (HK$ Thousand) | 2024年12月31日 (HK$ Thousand) | | :--- | :--- | :--- | | 0-30 days | 106,898 | 81,833 | | 31-60 days | 47,947 | 99,327 | | Over 60 days | 93,837 | 70,220 | | Total | 248,682 | 251,380 | [Trade and Other Payables](index=10&type=section&id=%E8%B2%A3%E6%98%93%E5%8F%8A%E5%85%B6%E4%BB%96%E6%87%89%E4%BB%98%E6%AC%BE%E9%A0%85) As of June 30, 2025, total trade and other payables were HK$176,188 thousand, a decrease from December 31, 2024, primarily due to reduced trade payables; trade payables under 30 days increased, while those between 31-60 days and over 60 days decreased Trade and Other Payables (As at June 30, 2025) | Item | 2025年6月30日 (HK$ Thousand) | 2024年12月31日 (HK$ Thousand) | | :--- | :--- | :--- | | Trade payables | 138,883 | 174,487 | | Accruals | 20,844 | 18,044 | | Other payables and provisions | 16,461 | 1,903 | | Total | 176,188 | 194,434 | [Ageing Analysis of Trade Payables](index=10&type=section&id=%E8%B2%A3%E6%98%93%E6%87%89%E4%BB%98%E6%AC%BE%E9%A0%85) As of June 30, 2025, trade payables under 30 days increased as a proportion, while those between 31-60 days and over 60 days decreased Ageing Analysis of Trade Payables (As at June 30, 2025) | Ageing | 2025年6月30日 (HK$ Thousand) | 2024年12月31日 (HK$ Thousand) | | :--- | :--- | :--- | | 0-30 days | 51,762 | 36,686 | | 31-60 days | 43,377 | 80,452 | | Over 60 days | 43,744 | 57,349 | | Total | 138,883 | 174,487 | [Borrowings](index=11&type=section&id=%E5%80%9F%E6%AC%BE) As of June 30, 2025, the Group's secured bank borrowings increased to HK$44,360 thousand, all classified as current liabilities due to repayment on demand clauses; most borrowings are due within one year, secured by property, plant and equipment, restricted bank deposits, and trade receivables, with an effective annual interest rate of 4.55% Secured Bank Borrowings (As at June 30, 2025) | Item | 2025年6月30日 (HK$ Thousand) | 2024年12月31日 (HK$ Thousand) | | :--- | :--- | :--- | | Secured bank borrowings | 44,360 | 21,250 | - Current liabilities classification: All borrowings are classified as current liabilities due to repayment on demand clauses[29](index=29&type=chunk) [Borrowing Repayment Schedule](index=11&type=section&id=%E6%9C%AC%E9%9B%86%E5%9C%98%E7%9A%84%E5%80%9F%E6%AC%BE%E5%84%9F%E9%82%84%E6%83%85%E6%B3%81%E5%A6%82%E4%B8%8B%EF%BC%88%E6%9C%AA%E8%A8%88%E5%8F%8A%E4%B8%8B%E6%96%87%E9%99%84%E8%A8%BB(a)%E6%89%80%E8%A9%B3%E8%BF%B0%E6%8C%89%E8%A6%81%E6%B1%82%E5%84%9F%E9%82%84%E6%A2%9D%E6%AC%BE%EF%BC%89) As of June 30, 2025, most borrowings are due within one year, with a reduced proportion of long-term borrowings Borrowing Repayment Schedule (As at June 30, 2025) | Repayment Period | 2025年6月30日 (HK$ Thousand) | 2024年12月31日 (HK$ Thousand) | | :--- | :--- | :--- | | Within 1 year | 38,610 | 10,333 | | 1 to 2 years | 5,750 | 8,250 | | 2 to 5 years | – | 2,667 | | Total | 44,360 | 21,250 | [Assets Pledged](index=11&type=section&id=%E8%B3%87%E7%94%A2%E6%8A%B5%E6%8A%BC) As of June 30, 2025, the Group's bank borrowings are secured by property, plant and equipment, restricted bank deposits, and trade receivables, with a significant increase in total pledged assets Carrying Amount of Pledged Assets (As at June 30, 2025) | Pledged Assets | 2025年6月30日 (HK$ Thousand) | 2024年12月31日 (HK$ Thousand) | | :--- | :--- | :--- | | Property, plant and equipment | 18,803 | 19,340 | | Restricted bank deposits | 15,463 | 15,392 | | Trade receivables | 28,277 | – | | Total | 62,543 | 34,732 | - Additional security: Unlimited indemnity given by the Company[30](index=30&type=chunk) [Interest Rates](index=12&type=section&id=%E5%88%A9%E7%8E%87) The Group's bank borrowings bear interest at floating rates, with an effective annual interest rate of 4.55% for the period ended June 30, 2025, a decrease from December 31, 2024 - Interest rate type: All bank borrowings bear variable interest rates[31](index=31&type=chunk) - Effective annual interest rate: **4.55%** as at June 30, 2025 (December 31, 2024: 6.23%)[31](index=31&type=chunk) [Share Capital](index=12&type=section&id=%E8%82%A1%E6%9C%AC) As of June 30, 2025, the company's issued and fully paid share capital comprised 1,000,000,000 ordinary shares, amounting to HK$281,507 thousand, consistent with the prior year-end Issued and Fully Paid Share Capital (As at June 30, 2025) | Item | 2025年6月30日 (Number of shares) | 2025年6月30日 (Amount HK$ Thousand) | 2024年12月31日 (Number of shares) | 2024年12月31日 (Amount HK$ Thousand) | | :--- | :--- | :--- | :--- | :--- | | Issued and fully paid ordinary shares | 1,000,000,000 | 281,507 | 1,000,000,000 | 281,507 | [Commitments](index=12&type=section&id=%E6%89%BF%E6%93%94) At the end of the reporting period, the Group's contracted but not yet incurred capital expenditures primarily related to property, plant and equipment, while total future minimum lease payments for unrecognized lease liabilities decreased - Commitment details: Detailed in Note 15 to the condensed consolidated interim financial information[63](index=63&type=chunk) [Capital Commitments](index=12&type=section&id=%E8%B3%87%E6%9C%AC%E6%89%BF%E6%93%94) As of June 30, 2025, contracted but not yet incurred capital expenditures primarily for property, plant and equipment amounted to HK$886 thousand, an increase from the prior year-end Capital Commitments (As at June 30, 2025) | Item | 2025年6月30日 (HK$ Thousand) | 2024年12月31日 (HK$ Thousand) | | :--- | :--- | :--- | | Property, plant and equipment | 886 | 139 | [Lease Commitments](index=13&type=section&id=%E7%A7%9F%E8%B3%83%E6%89%BF%E6%93%94%EF%BC%8D%E4%BD%9C%E7%82%BA%E6%89%BF%E7%A7%9F%E4%BA%BA) The Group has recognized right-of-use assets and lease liabilities, but total future minimum lease payments under irrevocable leases for unrecognized lease liabilities within one year amounted to HK$197 thousand - Total future minimum lease payments for unrecognized lease liabilities: **HK$197 thousand** within one year (December 31, 2024: HK$362 thousand)[34](index=34&type=chunk) [Comparative Figures](index=13&type=section&id=%E6%AF%94%E8%BC%83%E6%95%B8%E5%AD%97) Comparative figures in the condensed consolidated statement of comprehensive income have been reclassified to conform with the current period's presentation, but the Board believes there is no material impact on the prior period's financial statements - Reclassified items: Reversal of impairment loss on inventories and write-down of obsolete inventories have been reclassified from "Other operating (expenses)/income, net" to "Cost of sales"[36](index=36&type=chunk) - Impact assessment: The Board believes the reclassification has no material impact on the condensed consolidated statement of comprehensive income for the corresponding period in 2024[35](index=35&type=chunk) [Business Review](index=14&type=section&id=%E6%A5%AD%E5%8B%99%E5%9B%9E%E9%A1%A7) This section reviews the Group's business operations, market environment, strategic initiatives, and overall operating performance during the period [Business Overview](index=14&type=section&id=%E6%A5%AD%E5%8B%99%E6%A6%82%E8%A7%88) The Group is a leading electronic manufacturing services provider specializing in custom industrial electronic components and products, serving a diverse customer base with global production facilities - Core business: Electronic Manufacturing Services (EMS), manufacturing and selling customized industrial electronic components and products[37](index=37&type=chunk) - Product range: Electromechanical assemblies, switching power supplies, smart chargers, and smart vending systems[37](index=37&type=chunk) - Industries served: Gaming and entertainment, healthcare, telecommunications, commercial freight, security control, and new energy[37](index=37&type=chunk) - Global footprint: Headquartered in Hong Kong, with production facilities in China, Thailand, the UK, and Ireland[37](index=37&type=chunk) [Market Environment and Operating Performance](index=14&type=section&id=%E5%B8%82%E5%A0%B4%E7%92%B0%E5%A2%83%E8%88%87%E7%B6%93%E7%87%9F%E8%A1%A8%E7%8F%BE) European and North American markets faced volatile customer demand due to high interest rates, geopolitical tensions, and US tariff policy revisions; despite this, the Group's revenue grew by 4.0%, driven by increased smart vending system shipments and optimized manufacturing networks for supply chain resilience - Market challenges: European and North American markets affected by high interest rates, geopolitical tensions, and revisions to US tariff policies[38](index=38&type=chunk) - Revenue growth: Revenue increased by **4.0%** to approximately **HK$404,700 thousand** for the six months ended June 30, 2025[38](index=38&type=chunk) - Growth driver: Primarily driven by increased shipments of smart vending systems[38](index=38&type=chunk) - Manufacturing network optimization: New factory in the UK commenced operations, enhancing European production capacity and diversifying production risks[38](index=38&type=chunk) [Strategic Diversification and Cost Control](index=14&type=section&id=%E6%88%B0%E7%95%A5%E5%A4%9A%E5%85%83%E5%8C%96%E8%88%87%E6%88%90%E6%9C%AC%E6%8E%A7%E5%88%B6) The Group strategically entered the new energy sector with the "Deltrix" brand, expanding its product portfolio to smart energy storage and smart digital kiosks, advanced Central Asian platform development in Kazakhstan, and significantly reduced losses through stringent cost control - New energy strategy: Entered the new energy sector with the "Deltrix" brand, expanding products to smart energy storage and smart digital kiosks[39](index=39&type=chunk) - Central Asia platform development: Advancing the Central Asia platform in Kazakhstan, establishing a model electric vehicle charging ecosystem[39](index=39&type=chunk) - Loss reduction: Loss attributable to owners of the Company decreased by **42.9%** to approximately **HK$14,800 thousand**, benefiting from cost control and operational efficiency[39](index=39&type=chunk) [Financial Review](index=15&type=section&id=%E8%B2%A1%E5%8B%99%E5%9B%9E%E9%A1%A7) This section provides a detailed analysis of the Group's financial performance, including revenue, costs, profits, and liquidity, for the reporting period [Revenue](index=15&type=section&id=%E6%94%B6%E7%9B%8A) For the six months ended June 30, 2025, the Group's total revenue grew by 4.0%, primarily driven by a significant increase in smart vending system sales, partially offset by decreased sales of smart chargers, switching power supplies, and electromechanical products; Europe and North America remain key markets, but sales to customers in China (including Hong Kong) surged by 81.3%, contributing significantly to overall revenue growth - Total revenue growth: For the six months ended June 30, 2025, revenue increased by approximately **HK$15,500 thousand**, a **4.0%** growth, compared to the prior year[42](index=42&type=chunk) - Primary growth driver: Significant increase in sales of smart vending systems[42](index=42&type=chunk) - Offsetting factors: Decreased sales of smart chargers, switching power supplies, and electromechanical products[42](index=42&type=chunk) [Revenue by Product Category](index=15&type=section&id=%E6%94%B6%E7%9B%8A) Smart vending system revenue increased by **201.4%** year-on-year, becoming the largest revenue source, while revenue from smart chargers and switching power supplies significantly decreased Revenue by Product Category (For the six months ended June 30) | Product Category | 2025 (HK$ Thousand) | Share (%) | 2024 (HK$ Thousand) | Share (%) | Change (HK$ Thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Smart Vending Systems | 151,082 | 37.3 | 50,133 | 12.9 | 100,949 | +201.4 | | Electromechanical Products | 140,136 | 34.6 | 147,332 | 37.8 | (7,196) | -4.9 | | Switching Power Supplies | 56,422 | 13.9 | 90,644 | 23.3 | (34,222) | -37.8 | | Smart Chargers | 54,024 | 13.4 | 98,031 | 25.2 | (44,007) | -44.9 | | Others | 3,047 | 0.8 | 3,109 | 0.8 | (62) | -2.0 | | Total | 404,711 | 100.0 | 389,249 | 100.0 | 15,462 | +4.0 | [Geographical Revenue Segments by Customer Location](index=16&type=section&id=%E5%9C%B0%E7%90%86%E6%94%B6%E7%9B%8A%E5%88%86%E9%83%A8) Europe and North America remain the primary markets, but sales to customers in China (including Hong Kong) surged by **81.3%**, contributing significantly to total revenue growth Geographical Revenue Segments by Customer Location (For the six months ended June 30) | Region | 2025 (HK$ Thousand) | Share (%) | 2024 (HK$ Thousand) | Share (%) | Change (HK$ Thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Europe | 342,433 | 84.6 | 335,560 | 86.2 | 6,873 | +2.0 | | North America | 30,354 | 7.5 | 30,434 | 7.8 | (80) | -0.3 | | China (including Hong Kong) | 23,213 | 5.7 | 12,806 | 3.3 | 10,407 | +81.3 | | Southeast Asia | 3,673 | 0.9 | 3,912 | 1.0 | (239) | -6.1 | | Others | 5,038 | 1.3 | 6,537 | 1.7 | (1,499) | -22.9 | | Total | 404,711 | 100.0 | 389,249 | 100.0 | 15,462 | +4.0 | - Major market share: Europe and North America collectively accounted for approximately **92.1%** of total revenue (2024: 94.0%)[44](index=44&type=chunk) [Cost of Sales](index=16&type=section&id=%E9%8A%B7%E5%94%AE%E6%88%90%E6%9C%AC) Cost of sales increased by **2.2%**, primarily due to higher material costs, partially offset by decreased direct labor costs resulting from a reduction in headcount - Cost of sales increase: Approximately **2.2%**, mainly impacted by increased material costs[45](index=45&type=chunk) - Offsetting factor: Reduced direct labor costs due to a decrease in headcount[45](index=45&type=chunk) [Gross Profit and Gross Margin](index=16&type=section&id=%E6%AF%9B%E5%88%A9%E5%8F%8A%E6%AF%9B%E5%88%A9%E7%8E%87) The Group's gross profit increased by **12.5%** to **HK$76,100 thousand**, and gross margin improved by **1.4** percentage points to **18.8%**, reflecting cost control and efficiency enhancements - Gross profit growth: Approximately **12.5%** to **HK$76,100 thousand**[46](index=46&type=chunk) - Gross margin improvement: Increased by **1.4** percentage points from **17.4%** to **18.8%**[46](index=46&type=chunk) [Other Income](index=17&type=section&id=%E5%85%B6%E4%BB%96%E6%94%B6%E5%85%A5) Other income increased by approximately **HK$800 thousand** to **HK$2,100 thousand**, primarily benefiting from higher handling fee income and government grants - Other income increase: Approximately **HK$800 thousand** to **HK$2,100 thousand**[48](index=48&type=chunk) - Primary sources of increase: Handling fee income and government grants[48](index=48&type=chunk) [Selling and Distribution Expenses](index=17&type=section&id=%E9%8A%B7%E5%94%AE%E5%8F%8A%E5%88%86%E9%8A%B7%E8%B2%BB%E7%94%A8) Selling and distribution expenses increased to **HK$9,700 thousand**, primarily due to higher freight and transport costs and increased sales commissions driven by sales growth - Selling and distribution expenses increase: From **HK$8,300 thousand** to **HK$9,700 thousand**[49](index=49&type=chunk) - Main reasons: Higher freight and transport costs, and increased sales commissions[49](index=49&type=chunk) [Administrative Expenses](index=17&type=section&id=%E8%A1%8C%E6%94%BF%E9%96%8B%E6%94%AF) Administrative expenses decreased to **HK$80,700 thousand**, primarily due to reduced employee benefit expenses - Administrative expenses decrease: From **HK$89,700 thousand** to **HK$80,700 thousand**[50](index=50&type=chunk) - Main reason: Reduced employee benefit expenses[50](index=50&type=chunk) [Other Operating (Expenses)/Income, Net](index=17&type=section&id=%E5%85%B6%E4%BB%96%E7%B6%93%E7%87%9F%EF%BC%88%E9%96%8B%E6%94%AF%EF%BC%89%E2%88%95%E6%94%B6%E5%85%A5%E6%B7%A8%E9%A1%8D) This period recorded net other operating expenses of **HK$300 thousand**, contrasting with net income in the prior year, primarily due to increased impairment loss provision for trade receivables, impairment loss on intangible assets, and decreased net foreign exchange gains - Shift from income to expense: From net income of **HK$4,900 thousand** in the corresponding period of 2024 to net expense of **HK$300 thousand** in the corresponding period of 2025[51](index=51&type=chunk) - Main reasons: Increased impairment loss provision for trade receivables, impairment loss on intangible assets, and decreased net foreign exchange gains[51](index=51&type=chunk) [Finance Income](index=17&type=section&id=%E8%B2%A1%E5%8B%99%E6%94%B6%E5%85%A5) Finance income grew by **11.0%** to **HK$1,300 thousand**, primarily from increased interest earned on bank time deposits - Finance income growth: Approximately **11.0%** to **HK$1,300 thousand**[52](index=52&type=chunk) - Main reason: Increased bank time deposits[52](index=52&type=chunk) [Finance Expenses](index=17&type=section&id=%E8%B2%A1%E5%8B%99%E9%96%8B%E6%94%AF) Finance expenses increased by **6.0%** to **HK$5,600 thousand**, primarily due to higher interest on lease liabilities from new and renewed factory leases, partially offset by reduced bank charges and interest on bank borrowings - Finance expenses increase: Approximately **6.0%** to **HK$5,600 thousand**[53](index=53&type=chunk) - Main reason: Increased interest on lease liabilities[53](index=53&type=chunk) - Offsetting factors: Reduced bank charges and interest on bank borrowings[53](index=53&type=chunk) [Liquidity and Capital Resources](index=18&type=section&id=%E6%B5%81%E5%8B%95%E8%B3%87%E9%87%91%E5%8F%8A%E8%B3%87%E6%9C%AC%E8%B3%87%E6%BA%90) The Group primarily funds operations through cash flows from operating activities and bank borrowings, which significantly increased, yet maintains a positive net cash position with a current ratio of approximately **2.2** times - Funding sources: Cash flows from operating activities and bank borrowings[54](index=54&type=chunk) - Bank borrowings: Approximately **HK$44,400 thousand** (December 31, 2024: approximately HK$21,300 thousand)[54](index=54&type=chunk) - Undrawn borrowing facilities: Approximately **HK$139,000 thousand** (December 31, 2024: approximately HK$161,500 thousand)[54](index=54&type=chunk) - Cash and cash equivalents: Approximately **HK$103,600 thousand** (December 31, 2024: approximately HK$156,500 thousand)[54](index=54&type=chunk) - Net current assets: Approximately **HK$302,800 thousand** (December 31, 2024: approximately HK$317,200 thousand)[55](index=55&type=chunk) - Current ratio: Approximately **2.2** times[55](index=55&type=chunk) - Gearing ratio: Not applicable, as a positive net cash position is maintained[55](index=55&type=chunk) [Financial Risk Management](index=18&type=section&id=%E8%B2%A1%E5%8B%99%E9%A2%A8%E9%9A%AA%E7%AE%A1%E7%90%86) This section outlines the Group's approach to managing financial risks, including market, credit, and liquidity risks, and the strategies employed to mitigate them [Risk Management Overview](index=18&type=section&id=%E8%B2%A1%E5%8B%99%E9%A2%A8%E9%9A%AA%E7%AE%A1%E7%90%86) The Group faces market risks (foreign exchange, price, interest rate), credit risk, and liquidity risk, with risk management plans in place to mitigate potential adverse impacts - Major risk types: Market risk (foreign exchange, price, cash flow interest rate), credit risk, liquidity risk[56](index=56&type=chunk) - Management objective: To address financial market unpredictability and minimize adverse impacts[56](index=56&type=chunk) [Market Risk](index=19&type=section&id=%E5%B8%82%E5%A0%B4%E9%A2%A8%E9%9A%AA) The Group faces foreign exchange risk from multiple currency fluctuations, primarily involving USD, RMB, THB, GBP, and EUR, managed by closely monitoring exchange rate movements without forward foreign exchange contracts; price risk from equity instrument investments is managed through a diversified portfolio; interest rate risk primarily stems from floating-rate borrowings, with no interest hedging strategies adopted [Foreign Exchange Risk](index=19&type=section&id=%E5%A4%96%E5%8C%AF%E9%A2%A8%E9%9A%AA) The Group faces foreign exchange risk from multiple currency fluctuations, primarily involving USD, RMB, THB, GBP, and EUR, managed by closely monitoring exchange rate movements without forward foreign exchange contracts - Major currencies: USD, RMB, THB, GBP, and EUR[57](index=57&type=chunk) - Management strategy: Closely monitors foreign currency exchange rate movements, does not use forward foreign exchange contracts for hedging[57](index=57&type=chunk) [Price Risk](index=19&type=section&id=%E5%83%B9%E6%A0%BC%E9%A2%A8%E9%9A%AA) The Group is exposed to equity securities price risk from investments in equity instruments, mitigated by maintaining a diversified investment portfolio and regular review and monitoring - Risk source: Investments in equity instruments measured at fair value through profit or loss[58](index=58&type=chunk) - Management strategy: Maintains a diversified investment portfolio and regularly reviews and monitors it[58](index=58&type=chunk) [Cash Flow Interest Rate Risk](index=19&type=section&id=%E7%8F%BE%E9%87%91%E6%B5%81%E9%87%8F%E5%88%A9%E7%8E%87%E9%A2%A8%E9%9A%AA) The Group's interest rate risk primarily arises from floating-rate borrowings, partially offset by bank cash held at floating rates, with no interest hedging strategies adopted - Risk source: Floating-rate borrowings[59](index=59&type=chunk) - Offsetting factor: Bank cash held at floating rates[59](index=59&type=chunk) - Hedging strategy: No interest hedging strategies adopted[59](index=59&type=chunk) - Bank borrowing interest rate: As at June 30, 2025, the effective annual interest rate was **4.55%**[31](index=31&type=chunk)[59](index=59&type=chunk) [Credit Risk](index=19&type=section&id=%E4%BF%A1%E8%B2%B8%E9%A2%A8%E9%9A%AA) The Group's credit risk primarily stems from trade and other receivables, deposits, time deposits, and bank cash, with high credit risk concentration on its largest and top five customers, managed through regular assessment and credit limit management - Risk sources: Trade and other receivables, deposits, time deposits, and bank cash[60](index=60&type=chunk) - Bank credit risk: Very low credit risk due to counterparties being banks with high credit ratings[60](index=60&type=chunk) - Credit concentration: The largest customer accounted for **59.7%** of total trade receivables, and the top five customers accounted for **87.9%**[61](index=61&type=chunk) - Management strategy: Regularly assesses the recoverability of receivables and assigns a team to determine and approve credit limits[61](index=61&type=chunk) [Liquidity Risk](index=20&type=section&id=%E6%B5%81%E5%8B%95%E8%B3%87%E9%87%91%E9%A2%A8%E9%9A%AA) The Group manages liquidity risk through cash flow forecasting, orderly realization of short-term financial assets and receivables, and securing long-term financing, ensuring sufficient bank balances and credit facilities - Management measures: Cash flow forecasting, realization of short-term financial assets and receivables, and securing long-term financing[62](index=62&type=chunk) - Objective: To maintain financial flexibility and ensure business continuity[62](index=62&type=chunk) [Other Information](index=20&type=section&id=%E5%85%B6%E4%BB%96%E8%B3%87%E6%96%99) This section covers additional corporate information, including commitments, capital structure, future plans, corporate governance, and outlook [Commitments](index=20&type=section&id=%E6%89%BF%E6%93%94) Details of the Group's commitments as of June 30, 2025, are disclosed in Note 15 to the condensed consolidated interim financial information - Commitment details: Contained in Note 15 to the condensed consolidated interim financial information[63](index=63&type=chunk) [Capital Structure](index=20&type=section&id=%E8%B3%87%E6%9C%AC%E6%9E%B6%E6%A7%8B) The Group's capital structure comprises bank borrowings and equity attributable to owners of the Company, with the number of issued shares remaining unchanged as of June 30, 2025 - Capital composition: Bank borrowings and equity attributable to owners of the Company[64](index=64&type=chunk) - Issued shares: **1,000,000,000** shares[64](index=64&type=chunk) [Significant Investments](index=20&type=section&id=%E9%87%8D%E5%A4%A7%E6%8A%95%E8%B3%87) As of June 30, 2025, the Group held no significant investments - No significant investments[65](index=65&type=chunk) [Significant Acquisitions or Disposals](index=20&type=section&id=%E9%87%8D%E5%A4%A7%E6%94%B6%E8%B3%BC%E6%88%96%E5%87%BA%E5%94%AE%E9%99%84%E5%B1%AC%E5%85%AC%E5%8F%B8%E3%80%81%E8%81%AF%E7%87%9F%E5%85%AC%E5%8F%B8%E5%8F%8A%E5%90%88%E7%87%9F%E5%85%AC%E5%8F%B8) For the six months ended June 30, 2025, the Group made no significant acquisitions or disposals of any subsidiaries, associates, or joint ventures - No significant acquisitions or disposals of subsidiaries, associates, or joint ventures[66](index=66&type=chunk) [Future Plans](index=21&type=section&id=%E6%9C%89%E9%97%9C%E9%87%8D%E5%A4%A7%E6%8A%95%E8%B3%87%E5%8F%8A%E8%B3%87%E6%9C%AC%E8%B3%87%E7%94%A2%E7%9A%84%E6%9C%AA%E4%BE%86%E8%A8%88%E5%8A%83) Apart from what has been disclosed in this announcement, the Group currently has no other specific plans for significant investments and capital assets - No other specific plans for significant investments and capital assets[67](index=67&type=chunk) [Contingent Liabilities](index=21&type=section&id=%E6%88%96%E7%84%B6%E8%B2%A0%E5%82%B5) A Chinese subsidiary of the Group has a labor dispute with estimated potential undiscounted payments of approximately HK$7,200 thousand, but legal opinion suggests a favorable outcome for the Group, thus no provision has been recognized - Labor dispute: A Chinese subsidiary has a labor dispute with former employees[68](index=68&type=chunk) - Potential payment: Approximately **HK$7,200 thousand** (December 31, 2024: approximately HK$6,000 thousand)[68](index=68&type=chunk) - Provision status: No provision recognized, as legal opinion anticipates a favorable outcome for the Group[68](index=68&type=chunk) [Treasury Management](index=21&type=section&id=%E5%BA%AB%E5%8B%99%E7%AE%A1%E7%90%86) The Group's financing and treasury policies remain unchanged, aiming to ensure business continuity and maximize shareholder returns by optimizing the debt-to-equity balance, while prudently monitoring liquidity - Policy stability: No significant changes in financing and treasury policies[69](index=69&type=chunk) - Management objectives: To ensure business continuity and maximize shareholder returns by optimizing the balance between debt and equity[69](index=69&type=chunk) - Liquidity monitoring: Prudently monitors liquidity to ensure financing needs are met[69](index=69&type=chunk) [Pledged Assets](index=21&type=section&id=%E8%B3%87%E7%94%A2%E6%8A%B5%E6%8A%BC) As of June 30, 2025, the Group's bank borrowings are secured by property, plant and equipment, restricted bank deposits, trade receivables, and an unlimited indemnity given by the Company Pledged Assets (As at June 30, 2025) | Pledged Assets | 2025年6月30日 (HK$ Thousand) | 2024年12月31日 (HK$ Thousand) | | :--- | :--- | :--- | | Property, plant and equipment | 18,800 | 19,300 | | Restricted bank deposits | 15,500 | 15,400 | | Trade receivables | 28,300 | 0 | - Additional security: Unlimited indemnity given by the Company[70](index=70&type=chunk) [Employees and Remuneration Policy](index=21&type=section&id=%E5%83%B1%E5%93%A1%E5%8F%8A%E8%96%AA%E9%85%AC%E6%94%BF%E7%AD%96) As of June 30, 2025, the Group had **1,260** employees, with total employee benefit expenses of **HK$80,900 thousand**, and its remuneration policy is based on qualifications, experience, performance, and market conditions - Number of employees: **1,260** (December 31, 2024: 1,310)[71](index=71&type=chunk) - Employee benefit expenses: Approximately **HK$80,900 thousand** (2024: approximately HK$99,000 thousand)[72](index=72&type=chunk) - Remuneration determination: Based on employee qualifications, experience, job performance, and market conditions[72](index=72&type=chunk) [Outlook](index=22&type=section&id=%E5%B1%95%E6%9C%9B) The Group remains cautiously optimistic about the global economy, planning to strengthen sales promotion, business development, and technology investment to seize new energy industry opportunities, expand new energy business in Central Asia and Southeast Asia, and build a "Greater Asia New Energy Business Circle" - Market outlook: Electronic manufacturing services business has a good order backlog, supported by health awareness, digital transformation, and new energy transition[73](index=73&type=chunk) - Strategic focus: Strengthening sales promotion, pursuing business development, and investing in advanced technology to enhance efficiency and service quality[73](index=73&type=chunk) - New energy expansion: Deploying EV charging and digital advertising facilities in Kazakhstan with Sinooil, and planning expansion into Uzbekistan and Southeast Asia[73](index=73&type=chunk)[74](index=74&type=chunk) - Long-term vision: Promoting the development of a "Greater Asia New Energy Business Circle," integrating EV charging, energy storage, digital advertising, and smart service solutions[74](index=74&type=chunk) [Dividend Policy](index=23&type=section&id=%E8%82%A1%E6%81%AF%E6%94%BF%E7%AD%96) The Board resolved to declare an interim dividend of HK0.6 cents per ordinary share for the six months ended June 30, 2025, expected to be paid on October 23, 2025; to determine eligibility for the interim dividend, the company will suspend share transfer registration from September 29 to October 2, 2025 [Interim Dividend](index=23&type=section&id=%E8%91%A3%E4%BA%8B%E6%9C%83%E5%B7%B2%E6%B1%BA%E8%AD%B0%E5%AE%A3%E6%B4%BE%E6%88%AA%E8%87%B3%E4%BA%8C%E9%9B%B6%E4%BA%8C%E4%BA%94%E5%B9%B4%E5%85%AD%E6%9C%88%E4%B8%89%E5%8D%81%E6%97%A5%E6%AD%A2%E5%85%AD%E5%80%8B%E6%9C%88%E7%9A%84%E4%B8%AD%E6%9C%9F%E8%82%A1%E6%81%AF%E6%AF%8F%E8%82%A1%E6%99%AE%E9%80%9A%E8%82%A10.6%E6%B8%AF%E4%BB%99%EF%BC%88%E6%88%AA%E8%87%B3%E4%BA%8C%E9%9B%B6%E4%BA%8C%E5%9B%9B%E5%B9%B4%E5%85%AD%E6%9C%88%E4%B8%89%E5%8D%81%E6%97%A5%E6%AD%A2%E5%85%AD%E5%80%8B%E6%9C%88%EF%BC%9A%E7%84%A1%EF%BC%89) The Board resolved to declare an interim dividend of HK0.6 cents per ordinary share for the six months ended June 30, 2025, expected to be paid on October 23, 2025 - Interim dividend: **HK0.6 cents** per ordinary share (2024: nil)[75](index=75&type=chunk) - Payment date: Expected October 23, 2025[75](index=75&type=chunk) - Record date: October 2, 2025[75](index=75&type=chunk) [Suspension of Share Register](index=23&type=section&id=%E6%9A%AB%E5%81%9C%E8%BE%A6%E7%90%86%E8%82%A1%E6%9D%B1%E7%99%BB%E8%A8%98) To determine eligibility for the interim dividend, the company will suspend share transfer registration from September 29 to October 2, 2025 - Suspension period: September 29 to October 2, 2025[76](index=76&type=chunk) - Deadline: Transfer documents must be submitted by 4:30 p.m. on September 26, 2025[76](index=76&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=23&type=section&id=%E8%B3%BC%E8%B2%B7%E3%80%81%E5%87%BA%E5%94%AE%E6%88%96%E8%B4%96%E5%9B%9E%E6%9C%AC%E5%85%AC%E5%8F%B8%E4%B8%8A%E5%B8%82%E8%AD%89%E5%88%B8) 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 - No purchase, sale, or redemption of the Company's listed securities[77](index=77&type=chunk) [Events After the Reporting Period](index=23&type=section&id=%E6%88%AA%E8%87%B3%E4%BA%8C%E9%9B%B6%E4%BA%8C%E4%BA%94%E5%B9%B4%E5%85%AD%E6%9C%88%E4%B8%89%E5%8D%81%E6%97%A5%E6%AD%A2%E5%85%AD%E5%80%8B%E6%9C%88%E6%9C%AB%E5%BE%8C%E4%BA%8B%E9%A0%85) As of the date of this announcement, there are no significant events after the reporting period affecting the Group, other than those already disclosed - No significant events after the reporting period[78](index=78&type=chunk) [Corporate Governance](index=23&type=section&id=%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB) The Company has complied with all code provisions of the Corporate Governance Code set out in Appendix C1 of the Listing Rules, committed to a high-quality board and transparency - Compliance status: All code provisions of Part 2 of the Corporate Governance Code have been complied with[79](index=79&type=chunk) [Standard Code for Securities Transactions by Directors](index=23&type=section&id=%E8%91%A3%E4%BA%8B%E9%80%B2%E8%A1%8C%E8%AD%89%E5%88%B8%E4%BA%A4%E6%98%93%E7%9A%84%E6%A8%99%E6%BA%96%E5%AE%88%E5%89%87) The Company has adopted the Standard Code set out in Appendix C3 of the Listing Rules, with all Directors confirming compliance and no non-compliance incidents during the reporting period - Code adopted: Standard Code set out in Appendix C3 of the Listing Rules[80](index=80&type=chunk) - Compliance status: All Directors confirmed compliance, with no non-compliance incidents[80](index=80&type=chunk) [Audit Committee](index=24&type=section&id=%E5%AF%A9%E6%A0%B8%E5%A7%94%E5%93%A1%E6%9C%83) The Audit Committee has reviewed this preliminary interim results announcement and the unaudited interim financial information; the committee comprises three members, with Mr. Wong Kwok Kuen as Chairman - Establishment date: October 27, 2017[81](index=81&type=chunk) - Members: Mr. Wong Kwok Kuen (Chairman), Mr. Kan Pak Cheong, and Mr. Pao King Tao[81](index=81&type=chunk) - Responsibilities: Reviewed this preliminary interim results announcement and the unaudited interim financial information[82](index=82&type=chunk) [Review of Unaudited Condensed Consolidated Interim Financial Information](index=24&type=section&id=%E5%AF%A9%E9%96%B1%E6%9C%AA%E7%B6%93%E5%AF%A9%E6%A0%B8%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E4%B8%AD%E6%9C%9F%E8%B2%A1%E5%8B%99%E8%B3%87%E6%96%99) The unaudited interim financial information has been reviewed by the independent auditor, PricewaterhouseCoopers, in accordance with Hong Kong Standard on Review Engagements 2410 - Reviewing body: PricewaterhouseCoopers[83](index=83&type=chunk) - Review standard: Hong Kong Standard on Review Engagements 2410[83](index=83&type=chunk) [Board of Directors](index=24&type=section&id=%E4%BB%A3%E8%A1%A8%E8%91%A3%E4%BA%8B%E6%9C%83) The Board of Directors comprises executive directors, non-executive directors, and independent non-executive directors, with Mr. Wong Sze Chai as Chairman - Chairman and Executive Director: Mr. Wong Sze Chai[84](index=84&type=chunk)[85](index=85&type=chunk) - Board composition: Executive Directors, Non-executive Directors, Independent Non-executive Directors[85](index=85&type=chunk)

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告之內容概不負責，對其準確性 或完整性亦不發表任何聲明，並明確表示概不就因本公告全部或任何部分內容而產生或因依賴 該等內容而引致之任何損失承擔任何責任。 E-House (China) Enterprise Holdings Limited 易居（中國）企業控股有限公司 （於開曼群島註冊成立的有限公司） （股份代號：2048） 截至2025年6月30日止六個月的 中期業績公告 易居（中國）企業控股有限公司（「本公司」）董事（「董事」）會（「董事會」）欣然宣佈 本公司、其附屬公司及併表聯屬實體（統稱「本集團」）於截至2025年6月30日止六 個月（「報告期間」）的未經審計綜合業績。本中期業績乃根據《國際會計準則》第 34號「中期財務報告」而編製。 本公告中，「我們」及「我們的」指本公司及在文義另有所指時指本集團。 中期業績摘要 1 • 於報告期間，總收入為人民幣1,261.4百萬元。 • 於報告期間，房地產代理服務交易總額（「GTV」）為人民幣172億元。 • 期內虧損為人民幣304.8百萬元，而報告期間內的期內全面開支總額為人民幣 305.4百萬元。 業務 ...

[Financial Summary](index=1&type=section&id=Financial%20Summary) The financial summary presents key performance indicators and financial position for the six months ended June 30, 2025, highlighting significant declines in revenue and profit Financial Summary for the Six Months Ended June 30 (HKD Million): | Indicator | 2025 | 2024 | Percentage Change | | :--- | :--- | :--- | :--- | | Revenue | 2,101 | 2,532 | -17% | | Gross Profit | 642 | 1,433 | -55% | | Gross Margin | 31% | 57% | | | Adjusted Gross Margin1 | 40% | 57% | | | Profit for the Period | 481 | 983 | -51% | | Profit Attributable to Owners | 404 | 837 | -52% | | EBITDA2 | 934 | 1,666 | -44% | | Basic Earnings Per Share (HK Cents) | 7.94 | 16.955 | -53% | Financial Summary at Period End (HKD Million): | Indicator | June 30, 2025 | December 31, 2024 | Percentage Change | | :--- | :--- | :--- | :--- | | Net Assets | 18,357 | 18,901 | -3% | | Equity Attributable to Owners Per Share (HKD) | 3.12 | 3.24 | -4% | | Current Ratio3 (times) | 3.57 | 4.25 | -16% | The Board declared an interim dividend of **6 HK cents per ordinary share** for the six months ended June 30, 2025 [Interim Results Announcement](index=2&type=section&id=Interim%20Results%20Announcement) The Board of Shougang Fushan Resources Group Limited announces the unaudited consolidated interim results for the six months ended June 30, 2025, which have been reviewed by the Audit Committee and auditors - The Board announced the unaudited consolidated interim results for the six months ended June 30, 2025[3](index=3&type=chunk) - These interim results have been reviewed by the Company's Audit Committee and auditors[3](index=3&type=chunk) [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=2&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) This statement details the company's financial performance, including revenue, profit, and other comprehensive income for the reporting period Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (HKD Thousand): | Item | 2025 | 2024 | | :--- | :--- | :--- | | Revenue from Contracts with Customers | 2,101,368 | 2,531,571 | | Cost of Sales | (1,459,744) | (1,098,751) | | **Gross Profit** | **641,624** | **1,432,820** | | Interest Income | 87,421 | 94,589 | | Other Income and Gains, Net | 54,384 | 26,855 | | Selling and Distribution Expenses | (24,050) | (57,685) | | General and Administrative Expenses | (100,203) | (96,309) | | Other Operating Expenses | (7,421) | (5,301) | | Finance Costs | (934) | (862) | | Share of Loss of an Associate | – | (235) | | **Profit Before Income Tax** | **650,821** | **1,393,872** | | Income Tax Expense | (169,927) | (411,330) | | **Profit for the Period** | **480,894** | **982,542** | Other Comprehensive Income/(Expense) for the Period (HKD Thousand): | Item | 2025 | 2024 | | :--- | :--- | :--- | | Items that may be reclassified subsequently to profit or loss: | | | | Exchange differences on translation of overseas operations | (5,780) | (9,450) | | Items that will not be reclassified to profit or loss: | | | | Fair value gains/(losses) on financial assets at fair value through other comprehensive income | 51,522 | (113,374) | | Exchange differences on translation of overseas operations | (1,279) | (1,787) | | **Total Comprehensive Income for the Period** | **525,357** | **857,931** | Profit for the Period Attributable to (HKD Thousand): | Item | 2025 | 2024 | | :--- | :--- | :--- | | Owners of the Company | 404,135 | 837,351 | | Non-controlling interests | 76,759 | 145,191 | | **Profit for the Period** | **480,894** | **982,542** | Total Comprehensive Income for the Period Attributable to (HKD Thousand): | Item | 2025 | 2024 | | :--- | :--- | :--- | | Owners of the Company | 449,877 | 714,527 | | Non-controlling interests | 75,480 | 143,404 | | **Total Comprehensive Income for the Period** | **525,357** | **857,931** | Earnings Per Share (HK Cents): | Item | 2025 | 2024 | | :--- | :--- | :--- | | Basic and Diluted | 7.94 | 16.95 | [Condensed Consolidated Statement of Financial Position](index=4&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) This statement provides a snapshot of the company's assets, liabilities, and equity at the end of the reporting period Condensed Consolidated Statement of Financial Position (HKD Thousand): | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Assets** | | | | **Non-current Assets** | | | | Property, Plant and Equipment | 3,811,332 | 3,715,248 | | Land Use Rights | 72,203 | 73,168 | | Right-of-use Assets | 34,451 | 31,796 | | Mining Rights | 5,852,769 | 5,970,133 | | Goodwill | 1,179,551 | 1,179,551 | | Financial Assets at Fair Value Through Other Comprehensive Income | 490,709 | 439,187 | | Deposits, Prepayments and Other Receivables | 390,150 | 453,310 | | Deferred Income Tax Assets | 89,205 | 84,764 | | **Total Non-current Assets** | **11,920,370** | **11,947,157** | | **Current Assets** | | | | Inventories | 122,069 | 137,638 | | Trade Receivables | 462,924 | 519,815 | | Bills Receivable | 66,537 | 18,089 | | Deposits, Prepayments and Other Receivables | 217,740 | 207,695 | | Pledged and Restricted Bank Deposits | 656,798 | 937,107 | | Time Deposits with Original Maturity Over Three Months | 2,566,133 | 1,505,443 | | Cash and Cash Equivalents | 6,879,567 | 7,675,879 | | **Total Current Assets** | **10,971,768** | **11,001,666** | | **Total Assets** | **22,892,138** | **22,948,823** | Liabilities and Equity (HKD Thousand): | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Liabilities** | | | | **Current Liabilities** | | | | Trade and Bills Payables | 501,053 | 757,521 | | Lease Liabilities | 15,444 | 12,125 | | Other Payables and Accruals | 1,356,979 | 1,536,254 | | Dividends Payable | 1,069,124 | – | | Amounts Due to Non-controlling Interests of a Subsidiary | – | 60,466 | | Tax Payable | 133,600 | 224,669 | | **Total Current Liabilities** | **3,076,200** | **2,591,035** | | **Net Current Assets** | **7,895,568** | **8,410,631** | | **Total Assets Less Total Current Liabilities** | **19,815,938** | **20,357,788** | | **Non-current Liabilities** | | | | Deferred Income Tax Liabilities | 1,425,514 | 1,424,979 | | Lease Liabilities | 32,934 | 31,552 | | **Total Non-current Liabilities** | **1,458,448** | **1,456,531** | | **Net Assets** | **18,357,490** | **18,901,257** | | **Equity** | | | | **Equity Attributable to Owners of the Company** | | | | Share Capital | 15,582,467 | 15,582,467 | | Reserves | 278,360 | 897,607 | | **Total Equity Attributable to Owners of the Company** | **15,860,827** | **16,480,074** | | Non-controlling Interests | 2,496,663 | 2,421,183 | | **Total Equity** | **18,357,490** | **18,901,257** | [Notes to the Condensed Consolidated Financial Statements](index=6&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) These notes provide detailed explanations and disclosures supporting the condensed consolidated financial statements [General Information](index=6&type=section&id=1.%20General%20Information) The company's primary business is investment holding, with subsidiaries engaged in coking coal mining, production, and trading, with no significant operational changes except for new trading activities - The Company's principal business is investment holding, with its subsidiaries primarily engaged in coking coal mining, production and sales of coking coal products, and trading of coal products[9](index=9&type=chunk) - For the six months ended June 30, 2025, there were no significant changes in the Group's operations, except for the commencement of trading business during the period[9](index=9&type=chunk) [Basis of Preparation](index=6&type=section&id=2.%20Basis%20of%20Preparation) Interim financial information is prepared under HKAS 34 and Listing Rules, requiring management judgments and estimates, and should be read with annual financial statements - The interim financial information has been prepared in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting" issued by the Hong Kong Institute of Certified Public Accountants and the applicable disclosure requirements of Appendix D2 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited[10](index=10&type=chunk) - This information does not include all the notes of the type normally included in annual financial statements and should be read in conjunction with the annual financial statements for the year ended December 31, 2024, which have been prepared in accordance with Hong Kong Financial Reporting Standards[10](index=10&type=chunk) [Significant Accounting Policies](index=7&type=section&id=3.%20Significant%20Accounting%20Policies) Interim financial information adopts prior year's accounting policies, incorporating only HKFRS amendments effective January 1, 2025, with HKAS 21 amendments having no significant impact - The interim financial information has been prepared in accordance with the accounting policies adopted in the last financial statements for the year ended December 31, 2024, except for the adoption of the following amendments to Hong Kong Financial Reporting Standards that are applicable to the Group's financial year beginning on January 1, 2025[12](index=12&type=chunk) - The amendments to HKAS 21 "Lack of Exchangeability" have no impact on the Group's accounting policies and are not expected to have a significant impact on the current or future periods[12](index=12&type=chunk) [Impact of Standards and Interpretations Issued But Not Yet Adopted by the Group](index=7&type=section&id=Impact%20of%20Standards%20and%20Interpretations%20Issued%20But%20Not%20Yet%20Adopted%20by%20the%20Group) Several new standards and amendments have been issued but are not yet effective, with the Group currently assessing their potential impact on financial performance and position - A number of new standards and amendments to standards have been issued but are not yet effective for the financial year beginning on January 1, 2025, including classification and measurement of financial instruments, presentation of financial statements, and disclosures[13](index=13&type=chunk) - The Group has commenced but not yet completed its assessment of the impact of the new standards and amendments to standards on its operating results and financial position, and is not yet able to state whether they will have a significant impact[13](index=13&type=chunk) [Revenue from Contracts with Customers and Segment Information](index=8&type=section&id=4.%20Revenue%20from%20Contracts%20with%20Customers%20and%20Segment%20Information) The Group's revenue primarily stems from coal product sales, including self-produced coking coal, by-products, and new coal trading, with no segment information presented due to a single operating segment - Revenue from contracts with customers represents the Group's turnover, which refers to the sales value of coal products sold in the ordinary course of business recognized at a point in time[14](index=14&type=chunk) Revenue from Contracts with Customers (HKD Thousand): | Item | 2025 | 2024 | | :--- | :--- | :--- | | Sales of self-produced clean coking coal | 1,579,279 | 2,497,844 | | Sales of self-produced by-products | 27,506 | 33,727 | | Trading of coal products | 494,583 | – | | **Total** | **2,101,368** | **2,531,571** | - The executive directors consider the Group's business as a single operating segment (coking coal mining and trading of coal products), and therefore no segment information is presented[14](index=14&type=chunk)[15](index=15&type=chunk) [Other Income and Gains, Net](index=9&type=section&id=5.%20Other%20Income%20and%20Gains%2C%20Net) Other income and gains, net, significantly increased by **100%** year-on-year, primarily driven by a **HKD 31 million** net foreign exchange gain Other Income and Gains, Net (HKD Thousand): | Item | 2025 | 2024 | | :--- | :--- | :--- | | Dividend income | 21,510 | 21,510 | | Net foreign exchange gains/(losses) | 31,399 | (1) | | Others | 1,475 | 5,346 | | **Total** | **54,384** | **26,855** | - Net foreign exchange gains of **HKD 31,399 thousand** from a loss in the same period last year were the main reason for the significant increase in other income and gains[16](index=16&type=chunk) [Other Operating Expenses](index=9&type=section&id=6.%20Other%20Operating%20Expenses) Other operating expenses increased by **40%** year-on-year, mainly due to an increase in the 'other' category of expenses Other Operating Expenses (HKD Thousand): | Item | 2025 | 2024 | | :--- | :--- | :--- | | Charitable donations | – | 1,106 | | Loss on disposal of property, plant and equipment | – | 1 | | Others | 7,421 | 4,194 | | **Total** | **7,421** | **5,301** | [Finance Costs](index=9&type=section&id=7.%20Finance%20Costs) Finance costs primarily consist of interest expenses on lease liabilities, remaining stable at approximately **HKD 0.9 million** for both periods Finance Costs (HKD Thousand): | Item | 2025 | 2024 | | :--- | :--- | :--- | | Interest expense on lease liabilities | 934 | 862 | [Profit Before Income Tax](index=10&type=section&id=8.%20Profit%20Before%20Income%20Tax) Profit before income tax is stated after deducting cost of inventories sold, various amortizations (land use rights, deferred expenses, mining rights), depreciation (PPE, right-of-use assets), and staff costs Profit Before Income Tax Deducted Items (HKD Thousand): | Item | 2025 | 2024 | | :--- | :--- | :--- | | Cost of inventories sold | 1,459,744 | 1,098,751 | | Amortisation: Land use rights | 1,099 | 1,051 | | Amortisation: Deferred expenses | 1,109 | 707 | | Amortisation: Mining rights | 119,390 | 103,674 | | Depreciation: Property, plant and equipment | 158,999 | 163,505 | | Depreciation: Right-of-use assets | 2,002 | 2,164 | | Staff costs (including directors' emoluments) | 355,729 | 390,945 | [Income Tax Expense](index=10&type=section&id=9.%20Income%20Tax%20Expense) Income tax expense significantly decreased year-on-year due to lower profit and reduced dividend withholding tax provisions, with China's corporate income tax rate at **25%** and a **5%** dividend withholding tax Income Tax Expense (HKD Thousand): | Item | 2025 | 2024 | | :--- | :--- | :--- | | Current tax – China income tax | 173,901 | 332,438 | | Deferred tax | (3,974) | 78,892 | | **Total** | **169,927** | **411,330** | - Income tax expense decreased due to lower profit and reduced dividend withholding tax[56](index=56&type=chunk) - The corporate income tax rate for the Group's principal operating subsidiaries established in China is **25%**, and they are subject to a **5%** withholding tax on profit distributions; no Hong Kong profits tax provision was made as there was no assessable profit in Hong Kong[19](index=19&type=chunk) [Dividends](index=11&type=section&id=10.%20Dividends) The Board declared a **6 HK cents** interim dividend per ordinary share for 2025, a decrease from **9 HK cents** in 2024, with the 2024 final dividend paid in July 2025 Interim Dividends (HKD Thousand): | Item | 2025 | 2024 | | :--- | :--- | :--- | | Interim dividend per ordinary share | 6 HK Cents | 9 HK Cents | | Total interim dividend | 305,464 | 443,415 | Dividends Approved for Prior Financial Years During the Interim Period (HKD Thousand): | Item | 2025 | 2024 | | :--- | :--- | :--- | | 2024 final dividend of 21 HK cents per ordinary share | 1,069,124 | – | | 2023 final dividend of 18 HK cents per ordinary share | – | 886,831 | - The final dividend of **HKD 1,069,124,000** for the year ended December 31, 2024, was paid on July 24, 2025[22](index=22&type=chunk) [Earnings Per Share](index=12&type=section&id=11.%20Earnings%20Per%20Share) Basic and diluted earnings per share significantly decreased to **7.94 HK cents** from **16.95 HK cents** last year, with no dilutive potential ordinary shares Earnings Per Share Calculation Data: | Item | 2025 | 2024 | | :--- | :--- | :--- | | Profit for the purpose of calculating basic and diluted earnings per share (HKD Thousand) | 404,135 | 837,351 | | Weighted average number of ordinary shares for calculating basic and diluted earnings per share (Thousand Shares) | 5,091,065 | 4,940,819 | | **Basic and Diluted Earnings Per Share (HK Cents)** | **7.94** | **16.95** | - As there were no potential dilutive ordinary shares for the periods ended June 30, 2025, and June 30, 2024, the diluted earnings per share for these periods were the same as the basic earnings per share[24](index=24&type=chunk) [Financial Assets at Fair Value Through Other Comprehensive Income](index=12&type=section&id=12.%20Financial%20Assets%20at%20Fair%20Value%20Through%20Other%20Comprehensive%20Income) Total financial assets at fair value through other comprehensive income increased to **HKD 490,709 thousand**, primarily due to increased fair value of Hong Kong-listed equity securities Financial Assets at Fair Value Through Other Comprehensive Income (HKD Thousand): | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Equity securities, at fair value – listed in Australia | 226,136 | 232,691 | | Equity securities, at fair value – listed in Hong Kong | 264,573 | 206,496 | | **Total** | **490,709** | **439,187** | - The significant increase in the fair value of Hong Kong-listed equity securities drove the rise in total financial assets[25](index=25&type=chunk) [Trade and Bills Receivables](index=13&type=section&id=13.%20Trade%20and%20Bills%20Receivables) Net trade receivables and total bills receivables slightly decreased, with trade receivables having 30-90 day credit terms and bills due within one year, all denominated in RMB Trade and Bills Receivables (HKD Thousand): | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Trade receivables | 645,784 | 702,675 | | Less: Provision for impairment losses | (182,860) | (182,860) | | Net trade receivables | 462,924 | 519,815 | | Bills receivable | 66,537 | 18,089 | | **Total** | **529,461** | **537,904** | - The credit period for trade receivables generally ranges from **30 to 90 days**, bills receivable are due within one year, and all trade and bills receivables are denominated in RMB[26](index=26&type=chunk) Ageing Analysis of Net Trade Receivables (HKD Thousand): | Ageing | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | 90 days or less | 388,945 | 246,421 | | 91 to 180 days | 73,979 | 241,417 | | 181 to 365 days | – | 31,977 | | **Total** | **462,924** | **519,815** | [Trade and Bills Payables](index=15&type=section&id=14.%20Trade%20and%20Bills%20Payables) Total trade and bills payables decreased, mainly due to a significant drop in bills payable, with credit terms ranging from 30 to 180 days and all bills due within six months Trade and Bills Payables (HKD Thousand): | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Trade payables | 305,160 | 282,263 | | Bills payable | 195,893 | 475,258 | | **Total** | **501,053** | **757,521** | - The Group is granted credit periods ranging from **30 to 180 days** by its suppliers; all trade and bills payables are denominated in RMB, and all bills payable have an ageing within six months[30](index=30&type=chunk) - As of June 30, 2025, bills payable of **HKD 168,137 thousand** were secured by pledged bank deposits, and the remaining **HKD 27,756 thousand** were secured by bills receivable[30](index=30&type=chunk) [Share Capital](index=16&type=section&id=15.%20Share%20Capital) As of June 30, 2025, issued and fully paid share capital remained at **HKD 15,582,467 thousand** with **5,091,065 thousand** shares, following a September 2024 rights issue that raised **HKD 425,508 thousand** net Share Capital (HKD Thousand): | Item | Number of Shares (Thousand Shares) | Amount (HKD Thousand) | | :--- | :--- | :--- | | As at January 1, 2024 (audited) | 4,926,837 | 15,156,959 | | Less: Shares issued under rights issue | 164,228 | 425,508 | | As at December 31, 2024 (audited) | 5,091,065 | 15,582,467 | | As at June 30, 2025 (unaudited) | 5,091,065 | 15,582,467 | - On November 13, 2024, the rights issue was completed, and **164,227,928** rights shares were issued, raising net proceeds of approximately **HKD 425,508,000**[32](index=32&type=chunk) [Capital Commitments](index=16&type=section&id=16.%20Capital%20Commitments) As of June 30, 2025, total contracted capital commitments amounted to **HKD 212,768 thousand**, primarily for property, plant, and equipment acquisition and mining project exploration and design Capital Commitments (HKD Thousand): | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Contracted for: | | | | – Acquisition of property, plant and equipment | 204,836 | 213,675 | | – Exploration and design fees for potential mining projects | 7,932 | 7,932 | | **Total** | **212,768** | **221,607** | [Statement Required by Section 436(3) of the Hong Kong Companies Ordinance (Chapter 622) Regarding Publication of Non-Statutory Accounts for the Comparative Financial Year Contained in this Interim Financial Information](index=17&type=section&id=17.%20Statement%20Required%20by%20Section%20436(3)%20of%20the%20Hong%20Kong%20Companies%20Ordinance%20(Chapter%20622)%20Regarding%20Publication%20of%20Non-Statutory%20Accounts%20for%20the%20Comparative%20Financial%20Year%20Contained%20in%20this%20Interim%20Financial%20Information) The 2024 comparative financial information in this interim report is derived from the statutory annual consolidated financial statements, filed with the Companies Registry, and received an unqualified auditor's report - The financial information for the year ended December 31, 2024, contained in this interim financial information as comparative figures, does not constitute the Company's statutory annual consolidated financial statements for that year but is extracted from those financial statements[34](index=34&type=chunk) - The Company's auditors have issued a report on those financial statements, and that auditor's report was unqualified[34](index=34&type=chunk) [Comparative Figures](index=17&type=section&id=18.%20Comparative%20Figures) Certain comparative figures have been reclassified to conform with the current period's presentation - Certain comparative figures have been reclassified to conform with the current period's presentation[35](index=35&type=chunk) [Declaration of Interim Dividend](index=18&type=section&id=Declaration%20of%20Interim%20Dividend) The Board declared an interim dividend of **6 HK cents per ordinary share** for the six months ended June 30, 2025, a decrease from the prior year, payable on November 6, 2025 - The Board declared an interim dividend of **6 HK cents per ordinary share** for the six months ended June 30, 2025 (2024 interim dividend: **9 HK cents per ordinary share**)[36](index=36&type=chunk) - The interim dividend is expected to be paid on Thursday, November 6, 2025[36](index=36&type=chunk) [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, key trends, and future outlook [Business Review](index=18&type=section&id=Business%20Review) The Group saw increased raw and clean coking coal production and sales, and initiated coal trading, but average clean coking coal selling prices sharply declined by **45%** due to market oversupply and coal quality changes Summary of Key Operating Data (for the six months ended June 30): | Item | Unit | 2025 | 2024 | Quantity/Amount Change | Percentage Change | | :--- | :--- | :--- | :--- | :--- | :--- | | **Production:** | | | | | | | Raw coking coal | Million Tonnes | 2.64 | 2.25 | +0.39 | +17% | | Clean coking coal | Million Tonnes | 1.54 | 1.29 | +0.25 | +19% | | **Sales:** | | | | | | | Clean coking coal | Million Tonnes | 1.55 | 1.34 | +0.21 | +16% | | **Average Realized Selling Price (incl. VAT):** | | | | | | | Clean coking coal | RMB per Tonne | 1,067 | 1,938 | -871 | -45% | | **Trading Volume:** | | | | | | | Coal products | Million Tonnes | 0.57 | – | +0.57 | +100% | - The resumption of normal production at Xingwu Coal Mine in mid-July 2024 led to an increase in both raw coking coal and clean coking coal production, with a corresponding increase in clean coking coal sales[39](index=39&type=chunk) - The Group commenced coal trading business, with a trading volume of approximately **0.57 million tonnes**, which helped expand the Group's revenue streams[39](index=39&type=chunk) - The coking coal market remained weak, with average market prices falling sharply by **41%** year-on-year, coupled with changes in coal quality, resulting in a **45%** year-on-year drop in the average realized selling price of clean coking coal to **RMB 1,067 per tonne**[40](index=40&type=chunk)[41](index=41&type=chunk) [Financial Review](index=20&type=section&id=Financial%20Review) The Group experienced significant declines in revenue and net profit, primarily due to falling clean coking coal prices, despite increased sales and new trading activities; reduced expenses and foreign exchange gains partially offset the profit decrease - Operating revenue was approximately **HKD 2.101 billion**, a decrease of approximately **HKD 431 million** or **17%** compared to the same period last year, mainly due to a **45%** year-on-year sharp decline in the average realized selling price of clean coking coal[42](index=42&type=chunk) - Net profit was approximately **HKD 481 million**, a significant year-on-year decrease of **51%**; profit attributable to owners was approximately **HKD 404 million**, a significant year-on-year decrease of **52%**, primarily due to a **55%** year-on-year decrease in gross profit[43](index=43&type=chunk) - The gross margin was **31%** (**40%** after excluding the impact of coal trading business), compared to **57%** in the same period last year, mainly due to a **45%** year-on-year sharp decline in the average realized selling price of clean coking coal[42](index=42&type=chunk) - Basic earnings per share were **7.94 HK cents**, compared to **16.95 HK cents** in the first half of last year[44](index=44&type=chunk) - Cost of sales was approximately **HKD 1.460 billion**, an increase of approximately **HKD 361 million** or **33%** year-on-year, mainly from the cost of the newly commenced coal trading business of approximately **HKD 493 million**; excluding this impact, cost of sales decreased by approximately **HKD 132 million** or **12%** year-on-year[45](index=45&type=chunk) Raw Coking Coal Production Cost Per Tonne (HKD/Tonne): | Item | 2025 | 2024 | Change Amount | Percentage Change | | :--- | :--- | :--- | :--- | :--- | | Raw coking coal production cost | 328 | 453 | -125 | -28% | | Less: Depreciation and amortisation | (87) | (96) | -9 | -9% | | Cash raw coking coal production cost | 241 | 357 | -116 | -32% | | Less: Uncontrollable costs | (56) | (90) | -34 | -38% | | **Total** | **185** | **267** | **-82** | **-31%** | - The raw coking coal production cost per tonne decreased by **28%** year-on-year, mainly due to increased raw coking coal production, reduced resource tax and surcharges, decreased material consumption, partially reduced labor cost efficiency, and improved cost efficiency[47](index=47&type=chunk) - Interest income was approximately **HKD 87 million**, a year-on-year decrease of approximately **HKD 8 million** or **8%**, mainly due to a decline in market deposit interest rates[50](index=50&type=chunk) - Other income and gains, net, were approximately **HKD 54 million**, a significant year-on-year increase of approximately **HKD 27 million** or **100%**, mainly due to recording net foreign exchange gains of approximately **HKD 31 million**[51](index=51&type=chunk) - Selling and distribution expenses were approximately **HKD 24 million**, a significant year-on-year decrease of approximately **HKD 34 million** or **59%**, mainly due to a decrease in the proportion of rail and sea transportation sales, coupled with effective cost control measures[52](index=52&type=chunk) - General and administrative expenses were approximately **HKD 100 million**, a slight year-on-year increase of approximately **HKD 4 million** or **4%**[53](index=53&type=chunk) - Income tax expense was approximately **HKD 170 million**, a year-on-year decrease, mainly due to lower profit and reduced dividend withholding tax[56](index=56&type=chunk) [Significant Investments and Acquisitions](index=25&type=section&id=Significant%20Investments%20and%20Acquisitions) The Group did not undertake any significant investments or acquisitions during the review period - The Group did not undertake any significant investments or acquisitions during the six months ended June 30, 2025[58](index=58&type=chunk) [Significant Disposals](index=25&type=section&id=Significant%20Disposals) The Group did not undertake any significant disposals during the review period - The Group did not undertake any significant disposals during the six months ended June 30, 2025[59](index=59&type=chunk) [Safety Production and Environmental Protection](index=25&type=section&id=Safety%20Production%20and%20Environmental%20Protection) The Group prioritizes safety and environmental protection, adhering to regulations and achieving high safety standardization ratings; despite a temporary production halt at Xingwu Coal Mine due to an accident, operations have resumed with no significant annual economic impact expected - The Group has always attached great importance to production safety and environmental protection, strictly complying with relevant environmental laws and regulations, promoting safety standard management, and strengthening environmental protection measures[60](index=60&type=chunk) - Jinjiazhuang Coal Mine and Zhaiyaodi Coal Mine obtained Level 1 safety production standardization ratings from the National Mine Safety Administration, while Xingwu Coal Mine obtained a Level 2 safety production standardization rating from the Shanxi Provincial Emergency Management Department[60](index=60&type=chunk) - An accident occurred at Xingwu Coal Mine in mid-July 2025, resulting in one fatality and a production halt for inspection, but normal production resumed in early August, and no significant economic loss is expected for the Group in 2025[62](index=62&type=chunk) [Pledge of Assets](index=26&type=section&id=Pledge%20of%20Assets) As of June 30, 2025, approximately **HKD 175 million** in bank deposits and **HKD 34 million** in bills receivable were pledged as collateral for **HKD 196 million** in bills financing - As of June 30, 2025, approximately **HKD 175 million** in bank deposits and approximately **HKD 34 million** in bills receivable were pledged as collateral for bills financing[63](index=63&type=chunk) - The bills financing utilized as of June 30, 2025, was approximately **HKD 196 million**[63](index=63&type=chunk) [Contingent Liabilities](index=26&type=section&id=Contingent%20Liabilities) As of June 30, 2025, the Group had no guarantees issued and no significant contingent liabilities - As of June 30, 2025, the Group had not issued any guarantees, and there were no significant contingent liabilities[64](index=64&type=chunk) [Gearing Ratio](index=26&type=section&id=Gearing%20Ratio) As of June 30, 2025, the Group had no borrowings, resulting in a **0%** gearing ratio - As of June 30, 2025, the Group had no borrowings, therefore the Group's gearing ratio was **0%** (December 31, 2024: **0%**)[65](index=65&type=chunk) [Exchange Rate Fluctuation Risk](index=26&type=section&id=Exchange%20Rate%20Fluctuation%20Risk) The Group primarily faces exchange rate risk from RMB and AUD denominated assets and liabilities; despite a **6.3%** AUD appreciation, the impact on financial position and performance is not significant due to the small proportion of AUD assets - As of June 30, 2025, the Group had no other significant exchange rate fluctuation risks apart from assets and liabilities denominated in RMB and AUD[66](index=66&type=chunk) - The AUD exchange rate appreciated by approximately **6.3%** compared to December 31, 2024, but the total book value of AUD-denominated assets only accounted for approximately **1%** of the Group's net assets, thus having no significant impact on the financial position and performance[66](index=66&type=chunk) [Liquidity and Financial Resources](index=27&type=section&id=Liquidity%20and%20Financial%20Resources) The Group maintains a robust financial position with a current ratio of approximately **3.57 times**; total cash and bank deposits are **HKD 10.102 billion**, with **HKD 9.475 billion** in available free funds after accounting for pledged and restricted deposits - As of June 30, 2025, the Group's current ratio was approximately **3.57 times**, and the Group continued to maintain a sound net cash balance[67](index=67&type=chunk) - The Group's total cash and bank deposits amounted to approximately **HKD 10.102 billion**, of which approximately **HKD 175 million** in bank deposits were pledged as collateral for bills financing of approximately **HKD 168 million**, and approximately **HKD 482 million** were restricted bank deposits for land reclamation and mine environmental rehabilitation funds[67](index=67&type=chunk) - Including available bills receivable of approximately **HKD 30 million**, the Group's available free funds as of June 30, 2025, amounted to approximately **HKD 9.475 billion**[67](index=67&type=chunk) [Capital Structure](index=27&type=section&id=Capital%20Structure) The Group's capital structure comprises total equity and borrowings; as of June 30, 2025, share capital was approximately **HKD 15.582 billion** with **5.091 billion** shares, unchanged during the period, and no borrowings - As of June 30, 2025, the Company's share capital was approximately **HKD 15.582 billion**, with approximately **5.091 billion** shares; there was no change in the number and amount of shares issued during the review period[68](index=68&type=chunk) - As of June 30, 2025, the Group had no borrowings[68](index=68&type=chunk) [Employees](index=27&type=section&id=Employees) As of June 30, 2025, the Group employed **4,154** staff in mainland China and Hong Kong, offering mandatory and voluntary provident fund schemes, defined contribution retirement plans, and training, with no share options granted or exercised during the period - As of June 30, 2025, the Group employed **4,154** employees in mainland China and Hong Kong[69](index=69&type=chunk) - The Group provides mandatory and voluntary provident fund schemes for its Hong Kong employees and defined contribution retirement plans managed by local governments for its mainland China employees, as well as training courses[69](index=69&type=chunk) - No share options were granted or exercised during the review period, and as of June 30, 2025, no share options were outstanding[69](index=69&type=chunk) [Change of Auditors](index=28&type=section&id=Change%20of%20Auditors) The Board resolved to appoint Shinewing (HK) CPA Limited as auditors for 2025, replacing PricewaterhouseCoopers, a resolution approved at the Annual General Meeting - On March 27, 2025, the Board resolved to propose the appointment of Shinewing (HK) CPA Limited as the Company's auditors for 2025, to replace PricewaterhouseCoopers[70](index=70&type=chunk) - This resolution was approved at the Annual General Meeting held on June 30, 2025[70](index=70&type=chunk) [Future Outlook](index=28&type=section&id=Future%20Outlook) For the second half, global economic uncertainty persists, but China's economy shows resilience with infrastructure, manufacturing, and exports supporting steel demand; coking coal market sentiment is improving with price rebounds, driven by supply constraints, boosted confidence, and strong demand, while the company focuses on safe, efficient production, intelligent upgrades, and lean management - In the first half of 2025, the global economic landscape continued to undergo profound changes, with no significant easing of geopolitical risks, but the Chinese economy maintained a "stable yet slowing" trend, with GDP growing by approximately **5.3%** year-on-year[71](index=71&type=chunk) - Downstream demand for steel continued to diverge, with infrastructure, manufacturing, and exports providing effective support for the steel industry, and the real estate market is expected to gradually improve with continuous central government support policies[72](index=72&type=chunk) - Entering the second half of 2025, coking coal market sentiment has warmed up, with futures prices rebounding since June and spot prices following suit, with the market price of major clean coking coal products increasing by over **30%** at the railcar level[74](index=74&type=chunk) - The Company will continue to implement its policy of safe and efficient production, continuously strengthen employee safety training and technical skill enhancement, promote intelligent upgrades, and reinforce lean management to achieve industrial upgrading[75](index=75&type=chunk) [Review by Audit Committee](index=30&type=section&id=Review%20by%20Audit%20Committee) The Company's Audit Committee has reviewed the unaudited interim results for the six months ended June 30, 2025, with independent auditors Shinewing also completing their review - The Company's Audit Committee has reviewed the unaudited interim results for the six months ended June 30, 2025[76](index=76&type=chunk) - The Company's independent auditors, Shinewing, have reviewed the unaudited interim financial information for the period in accordance with Hong Kong Standard on Review Engagements 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Hong Kong Institute of Certified Public Accountants[76](index=76&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=30&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company%27s%20Listed%20Securities) Neither the Company nor its subsidiaries purchased, sold, or redeemed any listed securities during the six months ended June 30, 2025 - During the six months ended June 30, 2025, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities on The Stock Exchange of Hong Kong Limited or any other securities exchange[77](index=77&type=chunk) [Compliance with Corporate Governance Code](index=30&type=section&id=Compliance%20with%20Corporate%20Governance%20Code) The Company complied with all Corporate Governance Code provisions in Appendix C1 Part 2 of the Listing Rules, except for a temporary deviation from C.2.1 regarding the separation of Chairman and CEO roles, with the Managing Director serving as acting Chairman in the Company's best interest - During the six months ended June 30, 2025, the Company complied with all code provisions of the Corporate Governance Code set out in Part 2 of Appendix C1 to the Rules Governing the Listing of Securities on the Stock Exchange, save for a temporary deviation from code provision C.2.1[78](index=78&type=chunk) - The Company has not established the position of chief executive officer, and these responsibilities are performed by the Managing Director; under a temporary arrangement, Mr. Fan Wenli, the Company's Managing Director, also serves as the acting Chairman of the Board, which the Board believes is in the best interests of the Company[78](index=78&type=chunk) [Compliance with the Model Code](index=31&type=section&id=Compliance%20with%20the%20Model%20Code) The Company adopted the Model Code in Appendix C3 of the Listing Rules for directors' securities transactions, with all directors complying during the review period - The Company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix C3 of the Listing Rules as its code of conduct for directors' securities transactions[79](index=79&type=chunk) - Following specific enquiries made to all the Company's directors, all the Company's directors have complied with the standards set out in the Model Code and the Company's code of conduct regarding directors' securities transactions during the six months ended June 30, 2025[79](index=79&type=chunk) [Publication of Results Announcement and Interim Report](index=31&type=section&id=Publication%20of%20Results%20Announcement%20and%20Interim%20Report) This announcement is published on the HKEX and company websites, with the full 2025 interim report to be dispatched to shareholders opting for printed copies and an electronic version available online - This announcement is published on the HKEX website (www.hkexnews.hk) and the Company's website (www.shougang-resources.com.hk)[80](index=80&type=chunk) - The 2025 interim report, containing all information required by the Listing Rules, will be dispatched to shareholders of the Company who have elected to receive printed copies of corporate communications at the appropriate time, and an electronic version of the interim report will also be posted on the aforementioned websites for review[80](index=80&type=chunk) [Acknowledgement](index=31&type=section&id=Acknowledgement) The Board extends sincere gratitude to customers, suppliers, and shareholders for their continuous support, and expresses deep appreciation for the management and staff's diligent efforts during the period - On behalf of the Board, I would like to express my sincere gratitude to all customers, suppliers, and shareholders for their continuous support to the Group[81](index=81&type=chunk) - I also express my deep appreciation and commendation for the tireless efforts and concerted efforts of the Group's management and staff during the period[81](index=81&type=chunk) [By Order of the Board](index=31&type=section&id=By%20Order%20of%20the%20Board) The announcement is issued by Mr. Fan Wenli, Acting Chairman and Managing Director, on behalf of the Board, with a list of Board members provided - The announcement is issued by Mr. Fan Wenli, Acting Chairman and Managing Director, on behalf of the Board of Shougang Fushan Resources Group Limited[82](index=82&type=chunk) - As of the date of this announcement, the Board comprises Mr. Fan Wenli (Acting Chairman and Managing Director), Mr. Chen Zhaoqiang (Deputy Managing Director), Mr. Wang Dongming (Deputy Managing Director), Ms. Chang Cun (Non-executive Director), Mr. Xu Qian (Non-executive Director), Mr. Shi Yubao (Independent Non-executive Director), Mr. Cai Weixian (Independent Non-executive Director), Mr. Chen Jianxiong (Independent Non-executive Director) and Mr. Li Zeping (Independent Non-executive Director)[83](index=83&type=chunk)

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不負責，對其準確性 或完整性亦不發表任何聲明，並明確表示，概不對因本公告全部或任何部份內容而產生或因倚 賴該等內容而引致的任何損失承擔任何責任。 HUA HONG SEMICONDUCTOR LIMITED 華虹半導體有限公司 （於香港註冊成立之有限公司） （股份代號：01347） 截至二零二五年六月三十日止六個月 中期業績公告 華虹半導體有限公司（「本公司」）董事會（「董事會」）謹此公佈本公司及其子公司 截至二零二五年六月三十日止六個月的未經審核綜合業績。 本公告載列本公司二零二五年中期報告全文，並符合香港聯合交易所有限公司 （「香港聯交所」）證券上市規則有關中期業績初步公告附載資料之相關規定。 本公司二零二五年中期報告的印刷版本將於適當時候寄發予本公司股東，並可於 香港聯交所網站 www.hkexnews.hk 及本公司網站 www.huahonggrace.com 進行查 閱。 承董事會命 華虹半導體有限公司 董事會主席兼執行董事 唐均君先生 中國上海，二零二五年八月二十八日 於本公告日期，本公司董事分別為： 執行董事： 唐均君 （董事會主 ...

[Summary](index=1&type=section&id=%E6%91%98%E8%A6%81) The Group's key operating results for the six months ended June 30, 2025, show a decrease in total revenue but a significant increase in profit and total comprehensive income Key Operating Results for the Six Months Ended June 30, 2025 | Indicator | Six Months Ended June 30, 2025 (RMB million) | Six Months Ended June 30, 2024 (RMB million) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Total Revenue | 185.5 | 256.8 | -27.7% | | Gross Profit | 34.3 | 34.6 | -0.8% | | Gross Margin | 18.5% | 13.5% | +5.0 percentage points | | Profit and Total Comprehensive Income | 26.1 | 5.5 | +374.5% | - The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025[3](index=3&type=chunk) [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=2&type=section&id=%E7%B0%A1%E6%98%8E%E5%90%88%E4%BD%B5%E6%90%8D%E7%9B%8A%E5%8F%8A%E5%85%B6%E4%BB%96%E7%B6%9C%E5%90%88%E6%94%B6%E7%9B%8A%E8%A1%A8) This statement presents the Group's financial performance, showing a substantial increase in profit and total comprehensive income 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 thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Revenue | 185,520 | 256,750 | | Cost of Sales | (151,207) | (222,146) | | **Gross Profit** | **34,313** | **34,604** | | Other income, gains, expenses and losses, net | 7,107 | 9,474 | | Impairment loss on trade and other receivables under expected credit loss model, net of reversal | - | 923 | | Fair value change of financial assets at fair value through profit or loss | 18,222 | - | | Selling and distribution expenses | (7,948) | (11,061) | | Administrative expenses | (15,033) | (17,457) | | Research costs | (13,678) | (13,419) | | Finance costs | (4,253) | (2,157) | | Share of profit of an associate | 5,674 | 5,180 | | Share of profit of a joint venture | 1,418 | 1,700 | | **Profit Before Income Tax** | **25,822** | **7,787** | | Income tax credit/(expense) | 314 | (2,268) | | **Profit and Total Comprehensive Income for the Period** | **26,136** | **5,519** | | Earnings Per Share | RMB 0.016 | RMB 0.003 | [Condensed Consolidated Statement of Financial Position](index=3&type=section&id=%E7%B0%A1%E6%98%8E%E5%90%88%E4%BD%B5%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81%E8%A1%A8) This statement details the Group's assets, liabilities, and equity as of June 30, 2025, reflecting changes from the end of the previous year Condensed Consolidated Statement of Financial Position as of June 30, 2025 | Indicator | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | **Non-current Assets** | | | | Property, plant and equipment | 213,766 | 208,236 | | Right-of-use assets | 45,660 | 46,134 | | Interests in an associate | 112,900 | 107,076 | | Interests in a joint venture | 51,320 | 49,902 | | Financial assets at fair value through profit or loss | 179,500 | 161,278 | | Restricted bank deposits and balances | 2,785 | 4,000 | | Bank deposits with original maturity over three months | 6,300 | 20,000 | | Deferred tax assets | 25,876 | 24,488 | | **Total Non-current Assets** | **638,107** | **621,114** | | **Current Assets** | | | | Inventories | 25,869 | 27,313 | | Trade and bills receivables | 349,487 | 436,221 | | Prepayments, deposits and other receivables | 33,244 | 43,484 | | Restricted bank deposits and balances | 78,363 | 169,631 | | Bank deposits with original maturity over three months | - | 10,500 | | Bank deposits, bank balances and cash | 271,072 | 201,084 | | **Total Current Assets** | **758,035** | **888,233** | | **Current Liabilities** | | | | Trade and bills payables | 237,049 | 278,330 | | Other payables | 23,155 | 19,644 | | Contract liabilities | 2,136 | 2,278 | | Bank borrowings | 132,000 | 201,342 | | Tax payable | 6,432 | 6,415 | | **Total Current Liabilities** | **400,772** | **508,009** | | **Net Current Assets** | **357,263** | **380,224** | | **Total Assets Less Current Liabilities** | **995,370** | **1,001,338** | | **Capital and Reserves** | | | | Share capital | 1,418 | 1,418 | | Reserves | 842,702 | 816,566 | | **Equity Attributable to Owners of the Company** | **844,120** | **817,984** | | **Non-current Liabilities** | | | | Bank borrowings | 127,000 | 159,000 | | Deferred tax liabilities | 10,534 | 10,087 | | Deferred income - government grants | 13,716 | 14,267 | | **Total Non-current Liabilities** | **151,250** | **183,354** | | **Total Equity and Liabilities** | **995,370** | **1,001,338** | [Notes to the Financial Statements](index=5&type=section&id=%E9%99%84%E8%A8%BB) These notes provide detailed explanations and disclosures supporting the condensed consolidated financial statements [1. Basis of Preparation](index=5&type=section&id=1.%20%E7%B7%A8%E8%A3%BD%E5%9F%BA%E6%BA%96) The condensed consolidated financial statements are prepared in accordance with IAS 34 and the disclosure requirements of Appendix D2 of the Listing Rules - The condensed consolidated financial statements are prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting" and the applicable disclosure requirements of Appendix D2 to the Listing Rules[8](index=8&type=chunk) [2. Significant Accounting Policies](index=5&type=section&id=2.%20%E4%B8%BB%E8%A6%81%E6%9C%83%E8%A8%88%E6%94%BF%E7%AD%96) The condensed consolidated financial statements are prepared on a historical cost basis, with certain financial instruments measured at fair value, and new IFRS standards had no material impact - The condensed consolidated financial statements are prepared on a historical cost basis, except for certain financial instruments which are measured at fair value[9](index=9&type=chunk) - The revised International Financial Reporting Standards issued by the International Accounting Standards Board, which are effective for the current interim period, have been applied for the first time but had no material impact on the Group's financial position and performance[10](index=10&type=chunk) [3. Revenue](index=5&type=section&id=3.%20%E6%94%B6%E5%85%A5) Revenue is primarily derived from the sale of optical cables, fiber optic distribution network equipment, and color-coated steel plates, recognized at a point in time - The Group's revenue represents amounts received and receivable from the sale of optical cables, fiber optic distribution network equipment, and color-coated steel plates, net of discounts, customer returns, and sales-related taxes, with revenue recognized at a point in time[11](index=11&type=chunk) - The Group primarily sells products to the four major state-owned telecommunication network operators in China and other companies, with revenue recognized when control is transferred, i.e., when goods are delivered to the customer's designated location[12](index=12&type=chunk) - The Group typically issues invoices within six months after goods delivery and grants credit terms of up to six months to major Chinese telecommunication network operators and up to one year to other customers with good repayment records[12](index=12&type=chunk) [4. Segment Information](index=6&type=section&id=4.%20%E5%88%86%E9%83%A8%E8%B3%87%E6%96%99) The Group has combined its optical cable and related equipment segment with the color-coated steel plate segment into a single reportable segment, with all non-financial non-current assets located in China - The Group has combined its optical cable and related equipment segment and the processing and sale of color-coated steel plates segment into a single reportable and operating segment to better reflect its latest business strategy[13](index=13&type=chunk) - The Group primarily operates in China, where all its non-current assets (excluding financial assets at fair value through profit or loss and deferred tax assets) are located[14](index=14&type=chunk) [5. Other Income, Gains, Expenses and Losses, Net](index=7&type=section&id=5.%20%E5%85%B6%E4%BB%96%E6%94%B6%E5%85%A5%2C%20%E6%94%B6%E7%9B%8A%2C%20%E9%96%8B%E6%94%AF%E5%8F%8A%E8%99%A7%E6%90%8D%E6%B7%A8%E9%A1%8D) Net other income, gains, expenses, and losses decreased to RMB 7.1 million for the six months ended June 30, 2025, mainly due to lower bank interest income and government grants Other Income, Gains, Expenses and Losses, Net | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Bank interest income | 1,551 | 3,557 | | Net foreign exchange (losses)/gains | (35) | 801 | | Gains from sales of electricity and other materials | 2,759 | 607 | | Government grants recognized | 2,187 | 4,714 | | (Losses)/gains on disposal of property, plant and equipment | (191) | 15 | | Others | 836 | (220) | | **Total** | **7,107** | **9,474** | [6. Finance Costs](index=7&type=section&id=6.%20%E8%9E%8D%E8%B3%87%E6%88%90%E6%9C%AC) Finance costs significantly increased to RMB 4.3 million for the six months ended June 30, 2025, primarily due to higher borrowing interest and no capitalization Finance Costs | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Interest on borrowings | 4,253 | 3,706 | | Interest on lease liabilities | - | 1 | | **Subtotal** | **4,253** | **3,707** | | Less: Amount capitalized into construction in progress | - | (1,550) | | **Finance Costs** | **4,253** | **2,157** | - For the six months ended June 30, 2025, the capitalization rate used to determine the amount of interest capitalized was approximately **1.85%**[16](index=16&type=chunk) [7. Income Tax Credit/(Expense)](index=8&type=section&id=7.%20%E6%89%80%E5%BE%97%E7%A8%85%E6%8A%B5%E5%85%8D%2F%EF%BC%88%E9%96%8B%E6%94%AF%EF%BC%89) The Group recorded an income tax credit of RMB 0.3 million for the period, a shift from an expense in the prior year, mainly due to the recognition of deferred tax assets Income Tax Credit/(Expense) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | China corporate income tax - Current tax | 627 | 1,769 | | China corporate income tax - Deferred tax | (941) | 499 | | **Income Tax (Credit)/Expense** | **(314)** | **2,268** | - The Company's subsidiaries, Southern Communication and Yingke, are recognized as "High and New Technology Enterprises" for three years starting from 2022, enjoying a reduced corporate income tax rate of **15%**[18](index=18&type=chunk) [8. Profit Before Income Tax](index=8&type=section&id=8.%20%E9%99%A4%E6%89%80%E5%BE%97%E7%A8%85%E5%89%8D%E5%88%A9%E6%BD%A4) Profit before income tax for the six months ended June 30, 2025, was RMB 25.8 million, with inventory costs of RMB 151.2 million and total staff costs of RMB 15.4 million recognized in cost of sales Items Deducted from Profit Before Income Tax | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Inventory costs recognized in cost of sales | 151,207 | 222,146 | | Depreciation of property, plant and equipment | 2,884 | 3,648 | | Less: Depreciation capitalized into inventories | (1,887) | (3,228) | | Depreciation recognized in cost of sales | 997 | 420 | | Depreciation of right-of-use assets | 474 | 604 | | Total staff costs | 15,424 | 15,611 | [9. Earnings Per Share](index=9&type=section&id=9.%20%E6%AF%8F%E8%82%A1%E7%9B%88%E5%88%A9) Basic earnings per share significantly increased to RMB 0.016 for the six months ended June 30, 2025, with no diluted earnings per share presented due to the absence of potential ordinary shares Earnings Per Share Calculation | Indicator | 2025 (RMB thousand/thousand shares) | 2024 (RMB thousand/thousand shares) | | :--- | :--- | :--- | | Profit for basic earnings per share | 26,136 | 5,519 | | Weighted average number of ordinary shares for basic earnings per share | 1,626,240 | 1,626,240 | | **Basic Earnings Per Share** | **RMB 0.016** | **RMB 0.003** | - Diluted earnings per share is not presented as there were no potential ordinary shares outstanding during either period[21](index=21&type=chunk) [10. Dividends](index=9&type=section&id=10.%20%E8%82%A1%E6%81%AF) The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025 - The Directors do not recommend the payment of an interim dividend for the six months ended June 30, 2025 (six months ended June 30, 2024: nil)[22](index=22&type=chunk) [11. Trade and Bills Receivables](index=9&type=section&id=11.%20%E8%B2%BF%E6%98%93%E6%87%89%E6%94%B6%E6%AC%BE%E9%A0%85%E5%8F%8A%E6%87%89%E6%94%B6%E7%A5%A8%E6%93%9A) Trade and bills receivables decreased to RMB 349.5 million as of June 30, 2025, with the majority of trade receivables due within six months Trade and Bills Receivables | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Trade receivables | 356,756 | 441,339 | | Less: Provision for credit losses | (9,423) | (9,423) | | Net trade receivables | 347,333 | 431,916 | | Bills receivables | 2,154 | 4,305 | | **Total Trade and Bills Receivables** | **349,487** | **436,221** | Ageing Analysis of Trade Receivables (Net of Provision for Credit Losses) | Ageing | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Less than 6 months | 313,516 | 411,022 | | Over 6 months but less than 1 year | 21,902 | 9,197 | | Over 1 year | 11,915 | 11,697 | | **Net Trade Receivables** | **347,333** | **431,916** | - The Group allows credit terms of up to six months to major Chinese telecommunication network operators and up to one year to other customers with good repayment records[25](index=25&type=chunk) [12. Restricted Bank Deposits and Balances](index=10&type=section&id=12.%20%E5%8F%97%E9%99%90%E5%88%B6%E9%8A%80%E8%A1%8C%E5%AD%98%E6%AC%BE%E5%8F%8A%E7%B5%90%E9%A4%98) The Group's restricted bank deposits and balances are pledged to banks for the issuance of bills payable - As of December 31, 2024, and June 30, 2025, the Group's restricted bank deposits and balances were pledged to banks for the issuance of bills payable[26](index=26&type=chunk) [13. Trade and Bills Payables](index=10&type=section&id=13.%20%E8%B2%BF%E6%98%93%E6%87%89%E4%BB%98%E6%AC%BE%E9%A0%85%E5%8F%8A%E6%87%89%E4%BB%98%E7%A5%A8%E6%93%9A) Trade and bills payables decreased to RMB 237.0 million as of June 30, 2025, with an average credit period for material purchases within four months Trade and Bills Payables | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Trade payables | 104,805 | 156,438 | | Bills payables | 132,244 | 121,892 | | **Total Trade and Bills Payables** | **237,049** | **278,330** | - The average credit period for purchases of materials is within **four months** after receipt of materials and relevant VAT invoices[27](index=27&type=chunk) Ageing Analysis of Trade Payables | Ageing | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Less than 6 months | 98,459 | 145,225 | | Over 6 months but less than 1 year | 1,069 | 3,562 | | Over 1 year | 5,277 | 7,651 | | **Total Trade Payables** | **104,805** | **156,438** | [14. Bank Borrowings](index=11&type=section&id=14.%20%E9%8A%80%E8%A1%8C%E5%80%9F%E8%B2%B8) Total interest-bearing bank borrowings decreased to approximately RMB 259.0 million as of June 30, 2025, with all borrowings bearing floating interest rates between 2.20% and 3.30% - As of June 30, 2025, the Group had interest-bearing bank borrowings of approximately **RMB 259.0 million** (December 31, 2024: approximately **RMB 360.3 million**)[29](index=29&type=chunk) - As of June 30, 2025, the Group's bank borrowings of approximately **RMB 259.0 million** bore floating interest rates ranging from **2.20% to 3.30%** per annum[29](index=29&type=chunk) - The Group encountered no difficulties in complying with covenants related to bank borrowings and had no breaches of covenants at the end of the reporting period[30](index=30&type=chunk) [15. Share Capital](index=12&type=section&id=15.%20%E8%82%A1%E6%9C%AC) As of June 30, 2025, the Company's authorized share capital was 8,000,000,000 ordinary shares of HKD 0.001 each, with 1,626,240,000 shares issued and fully paid Share Capital Composition | Item | June 30, 2025 (HKD thousand/RMB thousand) | December 31, 2024 (HKD thousand/RMB thousand) | | :--- | :--- | :--- | | Authorized share capital (8,000,000,000 ordinary shares of HKD 0.001 each) | 8,000 | 8,000 | | Issued and fully paid share capital (1,626,240,000 ordinary shares of HKD 0.001 each) | 1,626 | 1,626 | | Presented in condensed consolidated statement of financial position (RMB thousand) | 1,418 | 1,418 | [Management Discussion and Analysis](index=13&type=section&id=%E7%AE%A1%E7%90%86%E5%B1%A4%E8%A8%8E%E8%AB%96%E5%8F%8A%E5%88%86%E6%9E%90) This section provides an overview of the Group's operational and financial performance, liquidity, risk management, and future outlook [Business Review](index=13&type=section&id=%E6%A5%AD%E5%8B%99%E5%9B%9E%E9%A1%A7) The Group's total revenue decreased by 27.7% to RMB 185.5 million, but profit and total comprehensive income significantly increased to RMB 26.1 million, with basic EPS at RMB 0.016 Business Performance Overview | Indicator | Six Months Ended June 30, 2025 (RMB million) | Six Months Ended June 30, 2024 (RMB million) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Revenue | 185.5 | 256.8 | -27.7% | | Gross Profit | 34.3 | 34.6 | -0.8% | | Profit and Total Comprehensive Income | 26.1 | 5.5 | +374.5% | | Basic Earnings Per Share | RMB 0.016 | RMB 0.003 | +433.3% | [Financial Review](index=13&type=section&id=%E8%B2%A1%E5%8B%99%E5%9B%9E%E9%A1%A7) The Group experienced decreased revenue and cost of sales, improved gross margin, reduced other income, lower selling and administrative expenses, slightly increased research costs, and significantly higher finance costs, leading to a substantial increase in profit attributable to owners [Revenue](index=13&type=section&id=%E6%94%B6%E5%85%A5) Total revenue for the period decreased by approximately 27.7% to RMB 185.5 million - For the reporting period, the Group's total revenue was approximately **RMB 185.5 million**, representing a decrease of approximately **27.7%** compared to the same period last year[33](index=33&type=chunk) [Cost of Sales](index=13&type=section&id=%E9%8A%B7%E5%94%AE%E6%88%90%E6%9C%AC) Cost of sales decreased by approximately 31.9% to RMB 151.2 million for the period - For the reporting period, the cost of sales was approximately **RMB 151.2 million**, representing a decrease of approximately **31.9%** compared to the same period last year[34](index=34&type=chunk) [Gross Profit and Gross Margin](index=14&type=section&id=%E6%AF%9B%E5%88%A9%E5%8F%8A%E6%AF%9B%E5%88%A9%E7%8E%87) Gross profit decreased by 0.8% to RMB 34.3 million, while gross margin increased to 18.5% due to a lower proportion of raw material costs - For the reporting period, gross profit was approximately **RMB 34.3 million**, representing a decrease of approximately **0.8%** compared to the same period last year[35](index=35&type=chunk) - The gross margin increased from **13.5%** in the same period last year to **18.5%** in the reporting period, primarily due to a lower proportion of raw material costs[35](index=35&type=chunk) [Other Income, Gains, Expenses and Losses, Net](index=14&type=section&id=%E5%85%B6%E4%BB%96%E6%94%B6%E5%85%A5%2C%20%E6%94%B6%E7%9B%8A%2C%20%E9%96%8B%E6%94%AF%E5%8F%8A%E8%99%A7%E6%90%8D%E6%B7%A8%E9%A1%8D) Net other income decreased to RMB 7.1 million, primarily due to lower bank interest income and government grants - Net other income decreased from approximately **RMB 9.5 million** in the same period last year to approximately **RMB 7.1 million** in the reporting period, mainly due to reduced bank interest income and government grants[36](index=36&type=chunk) [Selling and Distribution Expenses](index=14&type=section&id=%E9%8A%B7%E5%94%AE%E5%8F%8A%E5%88%86%E9%8A%B7%E8%B2%BB%E7%94%A8) Selling and distribution expenses decreased by 28.1% to RMB 7.9 million, mainly due to lower freight charges - Selling and distribution expenses were approximately **RMB 7.9 million**, representing a decrease of approximately **28.1%** compared to the same period last year, primarily due to lower total freight charges[37](index=37&type=chunk) [Administrative Expenses](index=14&type=section&id=%E7%AE%A1%E7%90%86%E8%B2%BB%E7%94%A8) Administrative expenses decreased by 13.9% to RMB 15.0 million, consistent with overall operations and stricter cost control measures - Administrative expenses were approximately **RMB 15.0 million**, representing a decrease of approximately **13.9%** compared to the same period last year, consistent with overall operations and stricter control measures on business and marketing expenses[38](index=38&type=chunk) [Research Costs](index=14&type=section&id=%E7%A0%94%E7%A9%B6%E6%88%90%E6%9C%AC) Research costs slightly increased by 1.9% to RMB 13.7 million for the period - Research costs were approximately **RMB 13.7 million**, representing a slight increase of approximately **1.9%** compared to the same period last year[39](index=39&type=chunk) [Finance Costs](index=15&type=section&id=%E8%9E%8D%E8%B3%87%E6%88%90%E6%9C%AC) Finance costs increased by 97.2% to RMB 4.3 million, mainly due to higher average bank loans and full recognition of interest expenses - Finance costs were approximately **RMB 4.3 million**, representing an increase of approximately **97.2%** compared to the same period last year, primarily due to higher average bank loans and full recognition of interest expenses[40](index=40&type=chunk) [Share of Profit of an Associate](index=15&type=section&id=%E6%87%89%E4%BD%94%E4%B8%80%E5%AE%B6%E8%81%AF%E7%87%9F%E5%85%AC%E5%8F%B8%E5%88%A9%E6%BD%A4) Share of profit from an associate, primarily engaged in fiber optic manufacturing and sales, increased by 9.5% to RMB 5.7 million - Share of profit of an associate was approximately **RMB 5.7 million**, representing an increase of approximately **9.5%** compared to the same period last year, with the associate primarily engaged in optical fiber manufacturing and sales[41](index=41&type=chunk) [Share of Profit of a Joint Venture](index=15&type=section&id=%E6%87%89%E4%BD%94%E4%B8%80%E5%AE%B6%E5%90%88%E7%87%9F%E5%85%AC%E5%8F%B8%E5%88%A9%E6%BD%A4) Share of profit from a joint venture, engaged in manufacturing and selling optical fiber preforms, decreased by 16.6% to RMB 1.4 million - Share of profit of a joint venture was approximately **RMB 1.4 million**, representing a decrease of approximately **16.6%** compared to the same period last year, with the joint venture engaged in manufacturing and selling optical fiber preforms[42](index=42&type=chunk) [Income Tax Credit/Expense](index=15&type=section&id=%E6%89%80%E5%BE%97%E7%A8%85%E6%8A%B5%E5%85%8D%2F%E9%96%8B%E6%94%AF) The Group recorded an income tax credit of RMB 0.3 million, primarily from the recognition of deferred tax assets - For the reporting period, an income tax credit of approximately **RMB 0.3 million** was recorded, primarily due to the recognition of deferred tax assets[43](index=43&type=chunk) [Profit and Total Comprehensive Income Attributable to Owners of the Company](index=15&type=section&id=%E6%9C%AC%E5%85%AC%E5%8F%B8%E6%93%81%E6%9C%89%E4%BA%BA%E6%87%89%E4%BD%94%E5%88%A9%E6%BD%A4%E5%8F%8A%E7%B6%9C%E5%90%88%E6%94%B6%E7%9B%8A%E7%B8%BD%E9%A1%8D) The Group's profit and total comprehensive income significantly increased to RMB 26.1 million from RMB 5.5 million in the prior period - The Group recorded profit and total comprehensive income of approximately **RMB 26.1 million**, a significant increase compared to approximately **RMB 5.5 million** in the same period last year[44](index=44&type=chunk) [Liquidity, Financial and Capital Resources](index=16&type=section&id=%E6%B5%81%E5%8B%95%E8%B3%87%E9%87%91%2C%20%E8%B2%A1%E5%8B%99%E5%8F%8A%E8%B3%87%E6%9C%AC%E8%B3%87%E6%BA%90) The Group's operations are funded by equity, reserves, and bank borrowings, with a decrease in cash and bank deposits, lower bank borrowings, and a significantly reduced gearing ratio [Cash and Loan Position](index=16&type=section&id=%E7%8F%BE%E9%87%91%E5%8F%8A%E8%B2%B8%E6%AC%BE%E7%8B%80%E6%B3%81) Total cash and bank deposits decreased by 11.5% to RMB 358.5 million, while interest-bearing bank borrowings decreased to RMB 259.0 million, all at floating rates - As of June 30, 2025, the Group's total cash and bank deposits were approximately **RMB 358.5 million**, representing a decrease of approximately **11.5%** compared to December 31, 2024[46](index=46&type=chunk) - As of June 30, 2025, the Group had interest-bearing bank borrowings of approximately **RMB 259.0 million**, a decrease from approximately **RMB 360.3 million** as of December 31, 2024[46](index=46&type=chunk) - All bank borrowings bear floating interest rates ranging from **2.20% to 3.30%** per annum[46](index=46&type=chunk) [Pledge of the Group's Assets](index=16&type=section&id=%E6%9C%AC%E9%9B%86%E5%9C%98%E8%B3%87%E7%94%A2%E6%8A%B5%E6%8A%BC) The Group pledged approximately RMB 81.1 million in bank deposits as collateral for bills payable - As of June 30, 2025, the Group pledged bank deposits of approximately **RMB 81.1 million** as collateral for bills payable[48](index=48&type=chunk) [Gearing Ratio](index=16&type=section&id=%E8%B3%87%E7%94%A2%E8%B2%A0%E5%80%B5%E7%8E%87) The Group's gearing ratio significantly decreased to approximately 65.4% as of June 30, 2025 - As of June 30, 2025, the Group's gearing ratio was approximately **65.4%** (December 31, 2024: approximately **84.5%**)[49](index=49&type=chunk) [Risk Management](index=17&type=section&id=%E9%A2%A8%E9%9A%AA%E7%AE%A1%E7%90%86) The Group manages currency risk through monitoring, interest rate risk without derivatives, credit risk via limits and monitoring, and liquidity risk by maintaining cash flow and funding flexibility [Currency Risk](index=17&type=section&id=%E8%B2%A8%E5%B9%A3%E9%A2%A8%E9%9A%AA) The Group manages foreign currency risk by closely monitoring exchange rate movements and may use contracts for hedging - The Group manages foreign currency risk by closely monitoring movements in foreign currency exchange rates and may use contractual arrangements to hedge currency risk[50](index=50&type=chunk) [Interest Rate Risk](index=17&type=section&id=%E5%88%A9%E7%8E%87%E9%A2%A8%E9%9A%AA) The Group faces fair value and cash flow interest rate risks but currently does not use derivatives for hedging - The Group is exposed to fair value interest rate risk (fixed-rate deposits and borrowings) and cash flow interest rate risk (floating-rate financial instruments) but currently does not use derivative instruments to hedge interest rate risk[51](index=51&type=chunk) [Credit Risk](index=17&type=section&id=%E4%BF%A1%E7%94%A8%E9%A2%A8%E9%9A%AA) Credit risk primarily arises from trade and bills receivables, managed through credit limits and impairment assessments, with a concentration in major Chinese telecom operators - The Group's credit risk primarily arises from trade and bills receivables, managed through setting credit limits, monitoring procedures, and impairment assessments[52](index=52&type=chunk) - Bank deposits and balances are placed with reputable banks with high internal credit ratings, and expected credit losses are not significant[53](index=53&type=chunk) - The Group has a concentrated credit risk, with approximately **89.3%** of trade receivables due from major Chinese telecommunication network operators[54](index=54&type=chunk) [Liquidity Risk](index=18&type=section&id=%E6%B5%81%E5%8B%95%E9%A2%A8%E9%9A%AA) Liquidity risk is managed by regularly monitoring cash flow and maintaining funding flexibility through available credit lines and new share issuance - The Group's management regularly monitors cash flow positions and maintains funding flexibility by keeping available credit facilities and issuing new ordinary shares[56](index=56&type=chunk) [Capital Commitments](index=18&type=section&id=%E8%B3%87%E6%9C%AC%E6%89%BF%E6%93%94) As of June 30, 2025, the Group had capital commitments of approximately RMB 16.6 million for contracted but unprovided capital expenditures on property, plant, and equipment - As of June 30, 2025, the Group's capital commitments for contracted but unprovided capital expenditures on the acquisition of property, plant and equipment amounted to approximately **RMB 16.6 million** (December 31, 2024: approximately **RMB 20.1 million**)[57](index=57&type=chunk) [Employees and Remuneration Policy](index=18&type=section&id=%E5%83%B1%E5%93%A1%E5%8F%8A%E8%96%AA%E9%85%AC%E6%94%BF%E7%AD%96) The Group had approximately 310 employees with total staff costs of RMB 15.4 million for the period, offering competitive remuneration and participating in employee welfare schemes - As of June 30, 2025, the Group had approximately **310 employees** (same period last year: approximately **320 employees**)[58](index=58&type=chunk) - For the reporting period, the Group incurred staff costs of approximately **RMB 15.4 million** (same period last year: approximately **RMB 15.6 million**)[58](index=58&type=chunk) - The Group participates in various employee welfare schemes and adopts competitive remuneration packages for its employees, which are regularly reviewed with reference to market practices and legal requirements[58](index=58&type=chunk) [Outlook](index=18&type=section&id=%E5%B1%95%20%E6%9C%9B) Despite short-term pressure on optical cable production, the industry is showing recovery, with an optimistic outlook for the second half of 2025 driven by technological advancements and national policies, prompting the Group to deepen partnerships, expand markets, and increase R&D - In the first half of 2025, domestic optical cable production reached **125 million fiber-km**, a year-on-year decrease of approximately **2.9%**, indicating a significant narrowing of the decline and the industry entering a convergence period[59](index=59&type=chunk) - Domestic telecommunication operators are accelerating backbone network upgrades, with China Mobile, China Telecom, and China Unicom all advancing **800G** all-optical network deployment[60](index=60&type=chunk) - The outlook for the optical fiber industry in the second half of 2025 is optimistic, benefiting from the development of **5G-A networks**, **10-gigabit optical networks**, **East-to-West Data Transmission Project**, cloud computing, artificial intelligence, and national industrial policy support[61](index=61&type=chunk) - The Group will deepen cooperation with operators to solidify its core market, vigorously expand into non-operator and overseas markets, and increase investment in areas such as data centers, industrial internet, and enterprise private networks[62](index=62&type=chunk) - The Group will actively invest in R&D resources, focusing on high-speed transmission (e.g., ultra-low loss large effective area optical fiber G.654.E, new optical fibers supporting **1.6T** applications), high-density interconnection for data centers, and green and low-carbon products[62](index=62&type=chunk) [Interim Dividend](index=20&type=section&id=%E4%B8%AD%E6%9C%9F%E8%82%A1%E6%81%AF) The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025 - The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025[63](index=63&type=chunk) [Sufficiency of Public Float](index=20&type=section&id=%E5%85%85%E8%B6%B3%E7%9A%84%E5%85%AC%E7%9C%BE%E6%8C%81%E8%82%A1%E9%87%8F) The Company maintained a sufficient public float throughout the reporting period and up to the date of the announcement - The Company maintained a sufficient public float during the reporting period and up to the date of this announcement[64](index=64&type=chunk) [Corporate Governance Practices and Other Information](index=21&type=section&id=%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB%E5%B8%B8%E8%A6%8F%E5%8F%8A%E5%85%B6%E4%BB%96%E8%B3%87%E6%96%99) This section outlines the Company's adherence to corporate governance standards, including compliance with the Corporate Governance Code and the Model Code for Securities Transactions by Directors [Corporate Governance Code](index=21&type=section&id=%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB%E5%AE%88%E5%89%87) The Company adheres to the Corporate Governance Code, having restored compliance with the minimum independent non-executive director requirement after a temporary shortfall - The Company has adopted the Corporate Governance Code as set out in Appendix C1 to the Listing Rules and has complied with the applicable code provisions during the reporting period and up to the date of this announcement[65](index=65&type=chunk) - Following the passing of Mr. Hu Yongquan, the number of independent non-executive Directors fell below the minimum required under Rule 3.10(1) of the Listing Rules during the reporting period[65](index=65&type=chunk) - Upon the appointment of Ms. Ju Hefeng as an independent non-executive Director on August 1, 2025, the Company has complied with Rule 3.10(1) of the Listing Rules[66](index=66&type=chunk) [Compliance with the Model Code for Securities Transactions by Directors of Listed Issuers](index=21&type=section&id=%E9%81%B5%E5%AE%88%E4%B8%8A%E5%B8%82%E7%99%BC%E8%A1%8C%E4%BA%BA%E8%91%A3%E4%BA%8B%E9%80%B2%E8%A1%8C%E8%AD%89%E5%88%B8%E4%BA%A4%E6%98%93%E7%9A%84%E6%A8%99%E6%BA%96%E5%AE%88%E5%89%87) The Company has adopted and, with the exception of a deceased director, all directors have complied with the Model Code for Securities Transactions by Directors of Listed Issuers - The Company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix C3 to the Listing Rules[67](index=67&type=chunk) - All Directors, except for the late Mr. Hu Yongquan, have complied with the required standards of the Model Code during the reporting period and up to the date of this announcement[67](index=67&type=chunk) [Audit Committee](index=21&type=section&id=%E5%AF%A9%E8%A8%88%E5%A7%94%E5%93%A1%E6%9C%83) The Audit Committee, comprising three independent non-executive directors, has reviewed the Group's unaudited condensed consolidated financial statements for the six months ended June 30, 2025 - The Audit Committee comprises three independent non-executive Directors: Mr. Chen Jirong (Chairman), Mr. Liu Zhengqi, and Ms. Ju Hefeng[68](index=68&type=chunk) - The Audit Committee has reviewed the Group's unaudited condensed consolidated financial statements for the six months ended June 30, 2025[68](index=68&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=22&type=section&id=%E8%B3%BC%E8%B2%B7%2C%20%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) Neither the Company nor its subsidiaries purchased, sold, or redeemed any of the Company's listed securities during the reporting period or up to the announcement date - Neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities during the reporting period and up to the date of this announcement[69](index=69&type=chunk) [Material Acquisitions and Disposals of Subsidiaries and Associates](index=22&type=section&id=%E9%87%8D%E5%A4%A7%E6%94%B6%E8%B3%BC%E5%8F%8A%E5%87%BA%E5%94%AE%E9%99%84%E5%B1%AC%E5%85%AC%E5%8F%B8%E5%8F%8A%E8%81%AF%E7%87%9F%E5%85%AC%E5%8F%B8) The Group had no material acquisitions or disposals of subsidiaries and associates during the period, except for a very substantial disposal of Source Photonics Holdings (Cayman) Limited shares - The Group had no material acquisitions or disposals of its subsidiaries and associates during the reporting period, except for a very substantial disposal[70](index=70&type=chunk)[73](index=73&type=chunk) - Pacific Smart, an indirect wholly-owned subsidiary of the Company, conditionally agreed to dispose of **8,235,293 Class A preferred shares** (representing approximately **4.00%** equity interest) in Source Photonics Holdings (Cayman) Limited for a consideration of **USD 25,181,055.41** (approximately **RMB 180.8 million**)[71](index=71&type=chunk) - This disposal constitutes a very substantial disposal under the Listing Rules and is subject to approval by the Company's shareholders at an extraordinary general meeting to be held on September 15, 2025[71](index=71&type=chunk) [Events After the Reporting Period](index=22&type=section&id=%E5%A0%B1%E5%91%8A%E6%9C%9F%E5%BE%8C%E9%87%8D%E8%A6%81%E4%BA%8B%E9%A0%85) No significant events affecting the Group occurred from the end of the reporting period up to the date of the announcement - No significant events affecting the Group have occurred from the end of the reporting period up to the date of this announcement[74](index=74&type=chunk) [Publication of Interim Results and Interim Report](index=23&type=section&id=%E5%88%8A%E8%BC%89%E4%B8%AD%E6%9C%9F%E6%A5%AD%E7%B8%BE%E5%8F%8A%E4%B8%AD%E6%9C%9F%E5%A0%B1%E5%91%8A) The interim results announcement is available on the HKEX and Company websites, with the interim report to be dispatched to shareholders by September 26, 2025 - This announcement is published on the website of the Stock Exchange (www.hkexnews.hk) and the Company's website (www.jsnfgroup.com)[75](index=75&type=chunk) - The Company's interim report for the reporting period will be dispatched to the Company's shareholders on or before September 26, 2025, and will be available on the Stock Exchange's website and the Company's website[75](index=75&type=chunk)