[Interim Results Announcement](index=1&type=section&id=Interim%20Results%20Announcement) The interim results announcement provides a comprehensive overview of the group's financial performance, operational segments, and corporate governance for the six months ended June 30, 2025 [Condensed Consolidated Financial Statements](index=1&type=section&id=Condensed%20Consolidated%20Financial%20Statements) This section presents the group's financial position and performance for the period, highlighting a significant reduction in loss due to the absence of goodwill impairment and fair value gains on financial assets [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=1&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) The statement details the group's revenue, gross profit, and net loss, showing a substantial reduction in loss for the period | Indicator | June 30, 2025 (HKD thousands) | June 30, 2024 (HKD thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 107,702 | 108,156 | -0.4% | | Gross Profit | 59,601 | 57,940 | +2.9% | | Operating Loss | (3,548) | (82,862) | -95.7% | | Loss Before Tax | (41,187) | (126,898) | -67.6% | | Loss for the Period | (45,366) | (127,983) | -64.6% | | Basic Loss Per Share (HK cents) | (12.28) | (34.63) | -64.6% | - Loss for the period significantly decreased by **64.6%**, primarily due to the absence of goodwill impairment loss (HKD 45,591 thousand) recognized in the prior period and a shift from loss to gain in fair value changes of financial assets at fair value through profit or loss[3](index=3&type=chunk)[4](index=4&type=chunk)[57](index=57&type=chunk) [Condensed Consolidated Statement of Financial Position](index=4&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) This statement outlines the group's assets, liabilities, and equity, indicating a slight decrease in equity and an improvement in net current liabilities | Indicator | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Total Assets | 2,601,962 | 2,599,323 | +0.1% | | Total Equity | 1,027,472 | 1,052,646 | -2.4% | | Total Liabilities | 1,574,490 | 1,546,677 | +1.8% | | Net Current Liabilities | (549,160) | (563,632) | -2.6% | | Cash and Cash Equivalents | 41,070 | 30,322 | +35.5% | - Equity attributable to owners of the Company decreased by **2.4%**, mainly due to the loss incurred during the period, partially offset by exchange gains from the translation of overseas operations[7](index=7&type=chunk)[64](index=64&type=chunk) - Net current liabilities improved, decreasing from **HKD 563,632 thousand** as of December 31, 2024, to **HKD 549,160 thousand** as of June 30, 2025[7](index=7&type=chunk)[67](index=67&type=chunk) [Notes to the Condensed Consolidated Financial Statements](index=6&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations of the financial statements, covering accounting policies, segment performance, asset and liability specifics, and equity incentive plans [Basis of Preparation and Going Concern](index=6&type=section&id=Basis%20of%20Preparation%20and%20Going%20Concern) This section details the basis for preparing the financial statements and addresses the group's going concern status, including management's mitigating actions - The condensed consolidated financial statements are prepared in accordance with Hong Kong Accounting Standard 34 and Appendix D2 of the Listing Rules of the Stock Exchange[8](index=8&type=chunk) - As of June 30, 2025, the Group incurred a loss of **HKD 45,366 thousand** and had net current liabilities exceeding current assets by **HKD 549,160 thousand**, indicating a material uncertainty regarding going concern[9](index=9&type=chunk) - Management has implemented several measures to address going concern challenges, including actively recovering loans receivable, improving service apartment occupancy, negotiating loan renewals, realizing financial assets, and implementing cost-saving initiatives[9](index=9&type=chunk)[10](index=10&type=chunk) [Significant Accounting Policies](index=7&type=section&id=Significant%20Accounting%20Policies) This section outlines the key accounting policies applied in preparing the condensed consolidated financial statements, including measurement bases and the impact of new standards - The condensed consolidated financial statements are prepared on a historical cost basis, except for investment properties and certain financial instruments measured at fair value[11](index=11&type=chunk) - The application of amendments to Hong Kong Financial Reporting Standards (such as HKAS 21 amendments) had no significant impact on the financial position or performance for the current and prior periods[11](index=11&type=chunk)[12](index=12&type=chunk) [Operating Segments](index=8&type=section&id=Operating%20Segments) The group's performance is analyzed across five operating segments: property investment, sales of financial assets, lending, sales of jewelry products, and operation of golf club houses - The Group operates five segments: property investment, sales of financial assets, lending, sales of jewelry products, and operation of golf club houses[13](index=13&type=chunk)[14](index=14&type=chunk) Segment Revenue and Results (For the six months ended June 30, 2025) | Segment | Revenue (HKD thousands) | (Loss)/Profit (HKD thousands) | | :--- | :--- | :--- | | Property Investment | 2,815 | (46,610) | | Sales of Financial Assets | (574) | 7,214 | | Lending | 6,774 | 8,466 | | Sales of Jewellery Products | 31,255 | 408 | | Operation of Golf Club Houses | 67,432 | 28,752 | | **Consolidated** | **107,702** | **(1,770)** | Segment Assets and Liabilities (As of June 30, 2025) | Segment | Assets (HKD thousands) | Liabilities (HKD thousands) | | :--- | :--- | :--- | | Property Investment | 1,820,579 | (586,123) | | Sales of Financial Assets | 69,055 | (97,779) | | Lending | 217,155 | (10,893) | | Sales of Jewellery Products | 66,543 | (10,325) | | Operation of Golf Club Houses | 406,175 | (346,648) | | **Consolidated** | **2,579,507** | **(1,051,768)** | - The property investment segment recorded the largest loss, primarily impacted by a loss of **HKD 27,058 thousand** from fair value changes of investment properties[13](index=13&type=chunk)[19](index=19&type=chunk) - The operation of golf club houses segment contributed the highest revenue and profit, demonstrating its stable operating performance[13](index=13&type=chunk) [Geographical Information and Major Customers](index=14&type=section&id=Geographical%20Information%20and%20Major%20Customers) This section provides a geographical breakdown of the group's revenue and non-current assets, highlighting its primary operational regions and customer concentration Revenue from External Customers (For the six months ended June 30) | Region | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | Australia | 891 | 586 | | Europe | 4,069 | 3,696 | | Hong Kong | 33,455 | 36,082 | | China | 69,287 | 67,792 | | **Total** | **107,702** | **108,156** | Non-current Assets (As of reporting period end) | Region | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | | :--- | :--- | :--- | | Hong Kong | 259,988 | 283,035 | | China | 1,632,740 | 1,627,112 | | **Total** | **1,892,728** | **1,910,147** | - The Group primarily operates in Hong Kong and China, with China contributing the majority of revenue and non-current assets, and no single external customer accounted for **10%** or more of the Group's total revenue in either period[21](index=21&type=chunk)[22](index=22&type=chunk) [Revenue from Contracts with Customers](index=15&type=section&id=Revenue%20from%20Contracts%20with%20Customers) This section details the revenue generated from customer contracts, categorized by goods and services, with a focus on golf club operations and jewelry sales Revenue from Contracts with Customers Details (For the six months ended June 30) | Type of Goods and Services | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | Sales of Jewellery Products | 31,255 | 31,796 | | Operation of Golf Club Houses (Club Activities) | 35,900 | 35,012 | | Operation of Golf Club Houses (Food and Beverage) | 5,429 | 5,398 | | Operation of Golf Club Houses (Membership Fees) | 17,075 | 15,257 | | Property Investment (Property Management Income) | 662 | 729 | | **Revenue from Contracts with Customers** | **90,321** | **88,192** | - Total revenue was **HKD 107,702 thousand**, with **HKD 90,321 thousand** derived from contracts with customers, primarily contributed by the operation of golf club houses and sales of jewelry products[23](index=23&type=chunk) - The sales of financial assets business recorded a trading loss of **HKD 574 thousand**, a significant reduction from the **HKD 4,621 thousand** loss in the prior period[23](index=23&type=chunk)[24](index=24&type=chunk) [Investment and Other Income](index=16&type=section&id=Investment%20and%20Other%20Income) This section details the group's investment and other income sources, primarily driven by estimated interest income from finance leases Investment and Other Income (For the six months ended June 30) | Item | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | Dividend Income | 196 | 228 | | Estimated Interest Income from Finance Lease Receivables | 9,938 | 8,540 | | Interest Income from Bank Deposits | 107 | 105 | | Miscellaneous Income | 285 | 217 | | **Total** | **10,526** | **9,090** | - Investment and other income increased by **15.8%** year-on-year, primarily driven by higher estimated interest income from finance lease receivables[25](index=25&type=chunk) [Other Gains and Losses](index=16&type=section&id=Other%20Gains%20and%20Losses) This section outlines the group's other gains and losses, highlighting the impact of goodwill impairment and fair value changes in financial and investment properties Other Gains and Losses (For the six months ended June 30) | Item | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | Goodwill Impairment Loss | – | (45,591) | | Gains/(Losses) from Fair Value Changes of Financial Assets at FVTPL | 7,828 | (19,418) | | Loss from Fair Value Changes of Investment Properties | (27,058) | (22,444) | | Loss on Disposal of Niches | – | (146) | | Write-off of Property, Plant and Equipment | (6) | – | | **Total** | **(19,236)** | **(87,599)** | - Other gains and losses significantly improved from a loss of **HKD 87,599 thousand** in the prior period to a loss of **HKD 19,236 thousand** in the current period, mainly due to the absence of goodwill impairment loss and a shift from loss to gain in fair value changes of financial assets[26](index=26&type=chunk) - Loss from fair value changes of investment properties increased to **HKD 27,058 thousand** from a loss of **HKD 22,444 thousand** in the prior period[26](index=26&type=chunk) [Expected Credit Loss (ECL) Allowance](index=17&type=section&id=Expected%20Credit%20Loss%20(ECL)%20Allowance) This section details the expected credit loss allowance for financial assets, showing a reversal of provisions in the current period Expected Credit Loss (ECL) Allowance (For the six months ended June 30) | Item | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | ECL (Reversal)/Allowance for Loans Receivable | (1,702) | (993) | | ECL Allowance for Trade Receivables | – | 2,120 | | **Total** | **(1,702)** | **1,127** | - The current period recorded an expected credit loss allowance reversal of **HKD 1,702 thousand** for financial assets, compared to an allowance of **HKD 1,127 thousand** in the prior period, primarily due to an increased reversal of expected credit loss allowance for loans receivable[27](index=27&type=chunk) [Finance Costs](index=17&type=section&id=Finance%20Costs) This section details the group's finance costs, highlighting a decrease primarily due to reduced estimated interest on secured collateralized notes Finance Costs (For the six months ended June 30) | Item | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | Interest on Amounts Payable to an Associate | 270 | 330 | | Interest on Amounts Payable to Directors and Related Parties | 2,971 | 2,457 | | Interest on Bank Borrowings | 3,811 | 3,373 | | Interest on Lease Liabilities | 6,744 | 6,920 | | Interest on Other Borrowings | 14,915 | 10,984 | | Interest on Convertible Bonds | 396 | – | | Estimated Interest on Secured Collateralized Notes | 12,780 | 24,260 | | **Total (Net of Capitalized Interest)** | **37,639** | **44,036** | - Finance costs decreased by **15%** year-on-year, mainly due to a reduction in estimated interest on secured collateralized notes and lower amounts payable to directors and related parties[28](index=28&type=chunk)[63](index=63&type=chunk) [Income Tax Expense](index=18&type=section&id=Income%20Tax%20Expense) This section outlines the group's income tax expense, noting an increase primarily due to higher corporate income tax in China Income Tax Expense (For the six months ended June 30) | Item | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | Hong Kong Profits Tax (Current Tax) | – | – | | China Corporate Income Tax (Current Tax) | (6,159) | (3,126) | | Deferred Tax Credit | 1,980 | 2,041 | | **Total** | **(4,179)** | **(1,085)** | - Income tax expense significantly increased year-on-year, primarily due to higher current corporate income tax in China, partially offset by deferred tax credits[29](index=29&type=chunk)[63](index=63&type=chunk) - Chinese subsidiaries are subject to a tax rate of **25%**, while Hong Kong profits tax applies a two-tiered tax rate (**8.25%** and **16.5%**)[29](index=29&type=chunk) [Loss for the Period](index=19&type=section&id=Loss%20for%20the%20Period) This section details the components contributing to the loss for the period, including amortization, cost of inventories sold, depreciation, and staff costs Loss for the Period Deducted/(Included) Items (For the six months ended June 30) | Item | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | Amortization of Intangible Assets | 8,359 | 8,512 | | Cost of Inventories Sold | 25,844 | 26,313 | | Depreciation of Property, Plant and Equipment | 12,073 | 13,444 | | Depreciation of Right-of-use Assets | 3,005 | 3,041 | | Staff Costs (Including Directors' Emoluments) | 33,009 | 38,868 | - Staff costs (including directors' emoluments) decreased by **15%**, primarily due to a reduction in headcount and the implementation of cost-saving measures[30](index=30&type=chunk)[79](index=79&type=chunk) [Interim Dividend](index=19&type=section&id=Interim%20Dividend) This section states the board's decision regarding the interim dividend for the period - For the six months ended June 30, 2025, the Board did not recommend the payment of an interim dividend (2024: nil)[31](index=31&type=chunk)[55](index=55&type=chunk) [Loss Per Share](index=20&type=section&id=Loss%20Per%20Share) This section presents the basic and diluted loss per share, reflecting the overall improvement in the group's financial performance Loss Per Share (For the six months ended June 30) | Indicator | 2025 (HK cents) | 2024 (HK cents) | | :--- | :--- | :--- | | Basic Loss Per Share | (12.28) | (34.63) | | Diluted Loss Per Share | (12.28) | (34.63) | - Both basic and diluted loss per share significantly decreased, consistent with the improving trend of the loss for the period[4](index=4&type=chunk)[33](index=33&type=chunk) - No diluted earnings per share were presented for the first half of 2025 as there were no outstanding potential ordinary shares, and for the first half of 2024, share options were not assumed to be exercised as their exercise price was higher than the average market price of the shares[33](index=33&type=chunk) [Loans Receivable](index=21&type=section&id=Loans%20Receivable) This section details the group's loans receivable, including their net amount, interest rates, and collateral arrangements Loans Receivable (As of reporting period end) | Item | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | | :--- | :--- | :--- | | Loans to Customers | 929,868 | 929,868 | | Accrued Interest Receivable | 58,017 | 55,652 | | Accumulated ECL Allowance | (813,823) | (813,704) | | **Net Loans Receivable** | **174,062** | **171,816** | - Net loans receivable slightly increased, with all loans denominated in HKD and carrying effective annual interest rates ranging from **8% to 20%**[34](index=34&type=chunk) - An expected credit loss allowance reversal of **HKD 1,702 thousand** for loans receivable was recognized in the current period, an increase from **HKD 993 thousand** in the prior period[34](index=34&type=chunk) - Multiple loans receivable are secured by corporate guarantees, share charges, and pledges of niche usage rights[35](index=35&type=chunk) [Trade Receivables](index=22&type=section&id=Trade%20Receivables) This section provides an overview of the group's trade receivables, including their net amount and aging analysis, reflecting improved credit risk assessment Trade Receivables (As of reporting period end) | Item | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | | :--- | :--- | :--- | | Trade Receivables | 40,809 | 39,646 | | Accumulated ECL Allowance | (2,890) | (2,890) | | **Net Trade Receivables** | **37,919** | **36,756** | Aging Analysis of Trade Receivables (As of reporting period end) | Aging | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | | :--- | :--- | :--- | | 0 to 30 Days | 4,871 | 5,036 | | 31 to 60 Days | 3,651 | 6,795 | | 61 to 90 Days | 7,376 | 6,628 | | 91 to 120 Days | 3,758 | 4,103 | | 121 to 180 Days | 7,555 | 10,052 | | Over 180 Days | 10,708 | 4,142 | | **Total** | **37,919** | **36,756** | - No expected credit loss allowance for trade receivables was recognized in the current period, compared to **HKD 2,120 thousand** in the prior period, indicating an improvement in credit risk assessment[39](index=39&type=chunk) [Trade Payables](index=23&type=section&id=Trade%20Payables) This section details the group's trade payables, including their total amount and aging analysis, and highlights the group's financial risk management policies Trade Payables (As of reporting period end) | Item | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | | :--- | :--- | :--- | | Trade Payables | 39,368 | 43,006 | Aging Analysis of Trade Payables (As of reporting period end) | Aging | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | | :--- | :--- | :--- | | 0 to 30 Days | 1,729 | 1,555 | | 31 to 60 Days | 1,036 | 3,084 | | 61 to 90 Days | 1,236 | 726 | | 91 to 120 Days | 671 | 84 | | Over 120 Days | 34,696 | 37,557 | | **Total** | **39,368** | **43,006** | - Total trade payables decreased by **8.4%**, with an average credit period of **120 days**, and the Group implements financial risk management policies to ensure timely settlement[40](index=40&type=chunk)[41](index=41&type=chunk) [Equity-settled Share-based Payment Transactions](index=24&type=section&id=Equity-settled%20Share-based%20Payment%20Transactions) This section outlines the group's equity-settled share-based payment transactions, including the status of various share option and share award schemes - The 2011 Share Option Scheme expired on December 11, 2021, with all unexercised share options lapsing during the period[42](index=42&type=chunk)[43](index=43&type=chunk) - The 2021 Share Option Scheme was terminated on August 15, 2024, and no share options have been granted since its adoption[44](index=44&type=chunk) - The Company adopted the 2024 Share Option Scheme, but no share options have been granted since its adoption[45](index=45&type=chunk)[46](index=46&type=chunk) - The Share Award Scheme was amended on August 15, 2024, to comply with the latest requirements of Chapter 17 of the Listing Rules; as of June 30, 2025, the number of shares held for the Share Award Scheme was **12,431 thousand shares**, valued at **HKD 24,455 thousand**, with no new purchases during the period[47](index=47&type=chunk)[48](index=48&type=chunk) - For the year ended December 31, 2024, **3,800,000** share awards were granted to consultant Mr. Wong Chun Hung under the Share Award Scheme, with a purchase price of zero and a fair value of **HKD 0.65**[49](index=49&type=chunk) [Comparative Figures](index=28&type=section&id=Comparative%20Figures) This section explains the adjustments made to comparative figures due to a share consolidation event - Certain comparative figures have been adjusted for the share consolidation that became effective on June 20, 2025, assuming it was effective in prior periods[54](index=54&type=chunk) [Management Discussion and Analysis](index=29&type=section&id=Management%20Discussion%20and%20Analysis) This section provides an in-depth analysis of the group's financial performance, liquidity, capital structure, business segment results, and future outlook, highlighting strategies for navigating economic uncertainties [Financial Review](index=29&type=section&id=Financial%20Review) This section reviews the group's financial performance, including revenue, loss attributable to owners, gross profit margins, administrative expenses, and associate contributions - The Group's revenue was **HKD 107,702 thousand**, a **0.4%** decrease from the prior period, mainly due to reduced lending and property investment businesses, partially offset by a narrower loss from sales of financial assets and growth in golf club operations[56](index=56&type=chunk) - Loss attributable to owners of the Company decreased by **65%**, primarily due to the absence of goodwill impairment loss (HKD 45,591 thousand) recognized in the prior period and a shift from loss to gain in fair value changes of financial assets[57](index=57&type=chunk) Gross Profit and Gross Profit Margin by Major Business (For the six months ended June 30) | Business | 2025 Gross Profit (HKD thousands) | 2024 Gross Profit (HKD thousands) | 2025 Gross Profit Margin (%) | 2024 Gross Profit Margin (%) | | :--- | :--- | :--- | :--- | :--- | | Sales of Jewellery Products | 5,412 | 5,483 | 17% | 17% | | Property Investment | 2,815 | 5,235 | - | - | | Operation of Golf Club Houses | 45,175 | 40,710 | 67% | 63% | - Administrative expenses decreased to **HKD 54,515 thousand**, primarily due to the Group's effective cost-saving measures[61](index=61&type=chunk) - Share of results of associates turned from a loss to a profit of **HKD 713 thousand**, mainly from the profit contribution of Elite Prosperous Investment Limited[61](index=61&type=chunk) [Liquidity and Financial Resources](index=31&type=section&id=Liquidity%20and%20Financial%20Resources) This section assesses the group's liquidity and financial resources, including equity, cash, outstanding borrowings, and key liquidity ratios - Equity attributable to owners of the Company decreased by **2.4%** to **HKD 1,033,111 thousand**, primarily due to the loss for the period, partially offset by exchange gains[64](index=64&type=chunk) - Cash and cash equivalents increased by **35.5%** to **HKD 41,070 thousand**[64](index=64&type=chunk) - Total outstanding borrowings amounted to **HKD 650,207 thousand**, comprising secured notes, bank financing, finance company loans, securities margin financing, and advances from directors/related parties, with most being secured or guaranteed[64](index=64&type=chunk)[65](index=65&type=chunk)[70](index=70&type=chunk) Liquidity Indicators (As of reporting period end) | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Gearing Ratio | 63% | 60% | | Net Current Liabilities (HKD thousands) | 549,160 | 563,632 | | Current Ratio | 0.47 | 0.45 | [Capital Structure and Share Consolidation](index=33&type=section&id=Capital%20Structure%20and%20Share%20Consolidation) This section discusses the group's capital structure and the impact of the share consolidation event during the period - The Company's capital structure remained unchanged during the period[68](index=68&type=chunk) - On June 20, 2025, the Company implemented a share consolidation, where every ten ordinary shares of **HKD 0.01** par value were consolidated into one ordinary share of **HKD 0.10** par value, with the number of issued shares adjusted accordingly[69](index=69&type=chunk) [Equity Fundraising Activities](index=34&type=section&id=Equity%20Fundraising%20Activities) This section summarizes the group's equity fundraising activities over the past 12 months, including convertible bond subscriptions and their utilization Equity Fundraising Activities in the Past 12 Months | Announcement Date | Fundraising Activity | Net Proceeds | Intended Use | Actual Use | | :--- | :--- | :--- | :--- | :--- | | December 23, 2024 & January 7, 2025 | Subscription of Convertible Bonds | Approx. HKD 4 million | General working capital | Consistent with announced intended use | | April 16, 2025 & April 29, 2025 | Subscription of Convertible Bonds | Approx. HKD 9 million | (i) Up to approx. HKD 2 million for general working capital; (ii) Up to approx. HKD 7 million for debt repayment | Consistent with announced intended use | - As of the date of this announcement, all proceeds from fundraising activities have been fully utilized[71](index=71&type=chunk) [Major Acquisitions and Disposals](index=34&type=section&id=Major%20Acquisitions%20and%20Disposals) This section confirms the absence of any major acquisitions or disposals of subsidiaries, associates, and joint ventures during the period - For the six months ended June 30, 2025, the Group had no major acquisitions or disposals of subsidiaries, associates, or joint ventures[72](index=72&type=chunk)[73](index=73&type=chunk) [Pledged Assets and Major Commitments](index=35&type=section&id=Pledged%20Assets%20and%20Major%20Commitments) This section details the group's pledged assets as collateral for borrowings and outlines its significant contractual commitments - The Group has pledged Shun Tak Property, **100%** of the issued shares of Eternal Strategy Investment (China) Co., Ltd., Hong Kong-listed equity securities, bank deposits, and life insurance policies of key management personnel as collateral for borrowings[77](index=77&type=chunk) - As of June 30, 2025, total contracted but unprovided commitments for the development costs of the main land parcel amounted to **HKD 246,284 thousand**, an increase from December 31, 2024[75](index=75&type=chunk) [Exchange Rate Risk and Hedging](index=35&type=section&id=Exchange%20Rate%20Risk%20and%20Hedging) This section addresses the group's exposure to exchange rate risk, primarily in HKD and RMB, and its hedging strategy - The Group is primarily exposed to exchange rate risk denominated in HKD and RMB, but did not use financial instruments for hedging purposes during the six months ended June 30, 2025[76](index=76&type=chunk) [Legal Proceedings](index=36&type=section&id=Legal%20Proceedings) This section provides an update on significant legal proceedings involving the group, including a civil lawsuit concerning outstanding legal fees - Beihu No. 9, a wholly-owned subsidiary of the Company, is involved in a civil lawsuit concerning outstanding legal fees, with a claim amount of **RMB 31,000,000** (approximately **HKD 33,967 thousand**)[78](index=78&type=chunk) - The Group's PRC legal counsel advised that Beihu No. 9 is unlikely to be required to pay the fees, thus no provision for liability has been made[78](index=78&type=chunk) [Employees and Remuneration Policy](index=36&type=section&id=Employees%20and%20Remuneration%20Policy) This section details the group's employee numbers, staff costs, and remuneration policies, highlighting cost-saving measures Employees and Staff Costs (For the six months ended June 30) | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | Number of Employees | 346 | 357 | | Staff Costs (HKD thousands) | 33,009 | 38,868 | - The decrease in staff costs was primarily due to a reduction in headcount and the implementation of effective cost-saving measures[79](index=79&type=chunk) - Employee benefits include basic salaries, contributions to retirement benefit schemes, discretionary bonuses, medical plans, share options, and share awards[79](index=79&type=chunk) [Business Review](index=36&type=section&id=Business%20Review) This section provides a detailed review of the performance and strategic initiatives for each of the group's operating segments [Sales of Financial Assets Business](index=36&type=section&id=Sales%20of%20Financial%20Assets%20Business) This section reviews the performance of the sales of financial assets business, noting a shift from loss to profit due to fair value changes and reduced trading losses Sales of Financial Assets Business Performance (For the six months ended June 30) | Indicator | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | Segment Revenue (Pre-tax) | 7,214 | (24,109) | | Gains/(Losses) from Fair Value Changes of Financial Assets at FVTPL | 7,828 | (19,418) | | Trading Loss on Sales of Financial Assets | (574) | (4,621) | - This business segment shifted from a loss to a profit, primarily benefiting from a change from loss to gain in fair value changes of financial assets and a significant reduction in trading losses[80](index=80&type=chunk) - The sale of three Hong Kong-listed equity securities resulted in a trading loss of **HKD 574 thousand** in the current period, with the fair value of Hong Kong-listed equity securities held at period-end being **HKD 46,196 thousand**[80](index=80&type=chunk)[81](index=81&type=chunk) [Lending Business](index=38&type=section&id=Lending%20Business) This section reviews the lending business, noting a decrease in interest income and segment profit due to credit-impaired loans, alongside ongoing recovery efforts Lending Business Performance (For the six months ended June 30) | Indicator | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | Loan Interest Income | 6,774 | 11,133 | | Segment Profit (Pre-tax) | 8,466 | 9,489 | - Loan interest income decreased by **39%**, primarily because interest income is no longer recognized for nine loans classified as Stage 3 (credit-impaired), and interest for three other Stage 3 loans is calculated on their net carrying amount[83](index=83&type=chunk) - Segment profit decreased by **11%**, mainly impacted by reduced loan interest income, partially offset by lower salaries[83](index=83&type=chunk) - No new loans were granted or principal drawn by customers during the period, and at period-end, **12** outstanding loans totaling **HKD 987,885 thousand** were classified as Stage 3 (credit-impaired)[83](index=83&type=chunk) - An expected credit loss allowance reversal of **HKD 1,702 thousand** for loans receivable was recognized in the current period, an increase from **HKD 993 thousand** in the prior period[84](index=84&type=chunk) - The Group is actively pursuing recovery actions against multiple credit-impaired customers (e.g., Customers A, D, I, J, H, F, L, N, G), including extending repayment periods, legal proceedings, asset preservation, and negotiating settlement agreements[85](index=85&type=chunk)[86](index=86&type=chunk)[87](index=87&type=chunk)[88](index=88&type=chunk) [Sales of Jewellery Products Business](index=41&type=section&id=Sales%20of%20Jewellery%20Products%20Business) This section reviews the sales of jewelry products business, which turned profitable due to the absence of trade receivables provisions, and outlines strategies for market expansion and product diversification Sales of Jewellery Products Business Performance (For the six months ended June 30) | Indicator | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | Revenue | 31,255 | 31,796 | | Segment Revenue (Pre-tax) | 408 | (1,803) | - This business segment shifted from a loss to a profit, primarily because no provision for trade receivables was made in the current period, compared to a **HKD 2,120 thousand** provision in the prior period[90](index=90&type=chunk) - To address the sluggish market and soaring gold prices, the Group is developing affordable jewelry products and other gemstone jewelry, with plans to expand into Japan and other Asia-Pacific markets[91](index=91&type=chunk) - Inventories of jewelry products at period-end amounted to **HKD 26,816 thousand**, slightly lower than at the end of last year[91](index=91&type=chunk) [Property Investment Business](index=42&type=section&id=Property%20Investment%20Business) This section reviews the property investment business, noting reduced revenue due to lower occupancy but a narrower segment loss due to the absence of goodwill impairment Property Investment Business Performance (For the six months ended June 30) | Indicator | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | Revenue | 2,815 | 5,235 | | Segment Loss (Pre-tax) | (46,610) | (88,890) | - Revenue decreased by **46%**, primarily due to lower occupancy rates of residential serviced apartments[92](index=92&type=chunk) - Segment loss significantly narrowed, primarily due to the absence of goodwill impairment loss in the current period (HKD 45,591 thousand in the prior period)[92](index=92&type=chunk)[95](index=95&type=chunk) - The Group has developed seven residential serviced apartments and two office buildings on the main land parcel in Beijing, currently leased primarily under short-term agreements[93](index=93&type=chunk)[94](index=94&type=chunk) - Loss from fair value changes of investment properties amounted to **HKD 27,058 thousand**, including a loss of **HKD 6,845 thousand** from residential serviced apartments, a loss of **HKD 20,500 thousand** from the investment property portion of Shun Tak Property, and a gain of **HKD 287 thousand** from Hong Kong Po Fook Hill niches[95](index=95&type=chunk)[96](index=96&type=chunk) [Operation of Golf Club House Business](index=44&type=section&id=Operation%20of%20Golf%20Club%20House%20Business) This section reviews the operation of golf club house business, which demonstrated growth in both revenue and segment profit through self-management and diverse income streams Operation of Golf Club House Business Performance (For the six months ended June 30) | Indicator | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | Revenue | 67,432 | 64,613 | | Segment Profit (Pre-tax) | 28,752 | 24,860 | - This business achieved growth in both revenue and segment profit, demonstrating its stable income-generating capability[98](index=98&type=chunk) - Since October 2023, the Group has self-operated and managed the club house, with primary income sources from members, golf club operations, and food and beverage operations[97](index=97&type=chunk) [Associates](index=45&type=section&id=Associates) This section details the contributions from the group's associates, including profit from Elite Prosperous Investment Limited and the impact of losses from China Smart Health Holdings Limited - Elite Prosperous Investment Limited, in which the Company holds a **49%** interest, contributed a profit of **HKD 713 thousand**, primarily from gains on fair value changes of its unlisted investment holding company investments[99](index=99&type=chunk) - China Smart Health Holdings Limited, in which the Company holds a **21.94%** interest, had a zero share of loss for the period, as its losses equaled or exceeded the Group's interest in the associate[99](index=99&type=chunk)[100](index=100&type=chunk) [Future Prospects](index=45&type=section&id=Future%20Prospects) This section outlines the group's outlook and strategic priorities for the second half of 2025, addressing macroeconomic uncertainties and specific business segment plans - Directors anticipate that the global macroeconomic environment in the second half of 2025 will remain uncertain, characterized by inflationary pressures, volatile energy prices, geopolitical risks, and trade tensions[101](index=101&type=chunk) - The Group will prudently monitor the stock market, adjust its equity securities investment portfolio as needed, maintain its loan portfolio size, and closely monitor repayment statuses[101](index=101&type=chunk)[102](index=102&type=chunk) - The jewelry products business will continue to develop affordable and other gemstone products and explore new markets in Japan and Southeast Asia, with performance in the second half expected to be similar to the first half[102](index=102&type=chunk) - The property investment business will allocate more resources to marketing and leasing activities to improve occupancy rates and complete the remaining residential serviced apartments and office buildings as planned[102](index=102&type=chunk) - The golf club operation business is expected to generate stable income and achieve moderate growth, with management focusing on enhancing operational efficiency and customer experience[103](index=103&type=chunk) [Events After Reporting Period](index=46&type=section&id=Events%20After%20Reporting%20Period) This section confirms the absence of any significant events subsequent to the reporting period - The Group had no significant events after the reporting period and up to the date of approval of the condensed consolidated financial statements[104](index=104&type=chunk) [Corporate Governance and Other Information](index=47&type=section&id=Corporate%20Governance%20and%20Other%20Information) This section covers the group's corporate governance practices, including compliance with the code, standards for directors' securities transactions, and the financial information review process [Corporate Governance Code](index=47&type=section&id=Corporate%20Governance%20Code) This section details the company's adherence to the Corporate Governance Code, noting an exception regarding the combined roles of Chairman and CEO - The Company has complied with the Corporate Governance Code set out in Part 2 of Appendix C1 to the Listing Rules for the six months ended June 30, 2025, except for code provision C.2.1[105](index=105&type=chunk) - The roles of Chairman and Chief Executive Officer are combined and held by Mr. Li Hung Wai, with the Board believing this arrangement provides strong and consistent leadership and enhances the effectiveness of business strategies[105](index=105&type=chunk) [Standard Code for Securities Transactions by Directors](index=47&type=section&id=Standard%20Code%20for%20Securities%20Transactions%20by%20Directors) This section confirms that all directors have complied with the standard code for securities transactions - All Directors have confirmed their compliance with the Standard Code set out in Appendix C3 to the Listing Rules for the six months ended June 30, 2025[106](index=106&type=chunk) [Review of Financial Information](index=47&type=section&id=Review%20of%20Financial%20Information) This section confirms the review of the interim report and condensed consolidated financial statements by the audit committee - The Audit Committee of the Board has reviewed the 2025 interim report and the condensed consolidated financial statements for the six months ended June 30, 2025, and agreed with the accounting policies and practices adopted[107](index=107&type=chunk) [Publication of Interim Results Announcement and Interim Report](index=47&type=section&id=Publication%20of%20Interim%20Results%20Announcement%20and%20Interim%20Report) This section outlines the publication details for the interim results announcement and the interim report - This interim results announcement has been published on the Company's and the Stock Exchange's websites, and the interim report will be dispatched to shareholders and published at an appropriate time[108](index=108&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分內容而產生或因倚賴該等內容而引致的任何 損失承擔任何責任。 （於中華人民共和國註冊成立的股份有限公司） （股份代號：6066） 截 至 2025 年 6 月 3 0 日止六個月之中期業績公告 中 信 建 投 証 券 股 份 有 限 公 司（「 本公司 」）董 事 會（「 董事會 」）謹 此 宣 佈 本 公司及其附屬公司截至 2025 年 6 月 3 0 日止六個月之未經審核中期業績。 董事會審計委員會已審閱此中期業績。本公告列載本公司 2025 年中期 報 告 全 文 ， 並 符 合《 香 港 聯 合 交 易 所 有 限 公 司 證 券 上 市 規 則 》中 有 關 中 期業績初步公告附載的資料之要求。本公司 2025 年中期報告將適時在 香港交易及結算所有限公司披露易網站 www.hkexnews.hk 及本公司網 站 www.csc108.com 刊發。 承董事會命 中信建投証券股份有限公司 董事長 劉 成 中國北京 2025 年 8 月 2 8 日 於本 ...

[Financial Summary](index=1&type=section&id=Financial%20Summary) This section provides a high-level overview of the company's key financial performance metrics for the six months ended June 30, 2025, showing significant declines in revenue and profit | Metric | For the six months ended June 30, 2025 (million RMB) | For the six months ended June 30, 2024 (million RMB) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 181.5 | 215.4 | -15.7% | | Gross Profit | 15.4 | 25.0 | -38.5% | | Profit attributable to owners of the Company | 4.9 | 12.3 | -60.0% | - The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025 (for the six months ended June 30, 2024: nil)[2](index=2&type=chunk) [Interim Condensed Consolidated Financial Statements](index=2&type=section&id=Interim%20Condensed%20Consolidated%20Financial%20Statements) This section presents the unaudited interim financial statements, including the statement of comprehensive income and statement of financial position, for the period [Interim Condensed Consolidated Statement of Comprehensive Income](index=2&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) For the six months ended June 30, 2025, the company experienced significant declines in revenue and profit, with revenue decreasing by 15.7% to RMB181.5 million and profit attributable to owners falling by 60.0% to RMB4.9 million | Metric | For the six months ended June 30, 2025 (thousand RMB) | For the six months ended June 30, 2024 (thousand RMB) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 181,510 | 215,413 | -15.7% | | Cost of sales | (166,137) | (190,427) | -12.7% | | Gross Profit | 15,373 | 24,986 | -38.5% | | Other income – net | 455 | 2,594 | -82.5% | | Selling and administrative expenses | (6,509) | (6,166) | +5.6% | | Operating profit | 9,319 | 21,414 | -56.4% | | Finance income/(costs) – net | 7 | (25) | N/A | | Profit before income tax | 9,326 | 21,389 | -56.4% | | Income tax expense | (3,146) | (5,855) | -46.3% | | Profit for the period | 6,180 | 15,534 | -60.3% | | Profit attributable to owners of the Company | 4,943 | 12,363 | -60.0% | | Basic earnings per share (RMB) | 0.008 | 0.021 | -61.9% | [Interim Condensed Consolidated Statement of Financial Position](index=3&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, total assets decreased to RMB374.3 million from RMB403.9 million at December 31, 2024, while total liabilities also decreased, maintaining a healthy financial structure with no interest-bearing borrowings | Metric | As of June 30, 2025 (thousand RMB) | As of December 31, 2024 (thousand RMB) | Change (%) | | :--- | :--- | :--- | :--- | | **Assets** | | | | | Non-current assets | 173,617 | 192,140 | -9.6% | | Current assets | 200,690 | 211,767 | -5.3% | | **Total assets** | **374,307** | **403,907** | **-7.4%** | | **Equity** | | | | | Equity attributable to owners of the Company | 294,032 | 314,518 | -6.5% | | Non-controlling interests | 54,414 | 53,177 | +2.3% | | **Total equity** | **348,446** | **367,695** | **-5.3%** | | **Liabilities** | | | | | Non-current liabilities | 391 | 2,381 | -83.6% | | Current liabilities | 25,470 | 33,831 | -24.7% | | **Total liabilities** | **25,861** | **36,212** | **-28.6%** | | **Total equity and liabilities** | **374,307** | **403,907** | **-7.4%** | [Notes](index=5&type=section&id=Notes) This section provides detailed explanations and disclosures supporting the interim condensed consolidated financial statements, covering accounting policies, segment information, and other financial details [1. General Information](index=5&type=section&id=1.%20General%20Information) Tianyuan Group Holdings Limited, incorporated in the Cayman Islands, primarily engages in bulk cargo handling, oil product supply and sales, and related port services in China, with its shares listed on the Hong Kong Stock Exchange in 2018 - The Company is incorporated in the Cayman Islands as an investment holding company, with its subsidiaries primarily engaged in bulk cargo handling services, supply and sale of oil products, and related ancillary value-added port services in China[8](index=8&type=chunk) - The Company's shares were listed on The Stock Exchange of Hong Kong Limited on June 1, 2018[9](index=9&type=chunk) [2. Basis of Preparation](index=5&type=section&id=2.%20Basis%20of%20Preparation) The interim financial information is prepared in accordance with HKAS 34 and should be read in conjunction with the annual financial statements for the year ended December 31, 2024, and remains unaudited - This interim financial information is prepared in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting" issued by the Hong Kong Institute of Certified Public Accountants[10](index=10&type=chunk) - The interim financial information was approved for issue by the Board on August 28, 2025, but has not been audited[9](index=9&type=chunk) [3. Accounting Policies](index=5&type=section&id=3.%20Accounting%20Policies) The Group's accounting policies are consistent with the prior year, with new HKAS amendments adopted having no significant impact on financial position for past, current, or future periods - Save as described below, the accounting policies adopted are consistent with those applied in the annual financial statements for the year ended December 31, 2024[11](index=11&type=chunk) - The Group has adopted the following revised standards for the first time for the annual reporting period beginning on January 1, 2025: HKAS 1 (Amendments), HKFRS 16 (Amendments), etc[12](index=12&type=chunk) - The Group has not changed its accounting policies or made retrospective adjustments as a result of adopting the above revised standards, and they are not expected to have a significant impact on the current or future periods[13](index=13&type=chunk) [4. Segment Information and Revenue](index=7&type=section&id=4.%20Segment%20Information%20and%20Revenue) The Group operates in two segments: cargo handling and ancillary services, and sale of oil products, with all revenue and operating profit derived from China, both segments experiencing revenue declines in the first half of 2025 - The chief operating decision maker identifies two reportable segments: cargo handling and ancillary services (providing loading and unloading services and related value-added port services) and sale of oil products (supplying and selling oil products)[16](index=16&type=chunk) - All of the Group's revenue and operating profit are derived from China, and all operating assets are located in China[17](index=17&type=chunk) Segment Revenue and Gross Profit (thousand RMB) | Segment | H1 2025 Revenue | H1 2024 Revenue | H1 2025 Gross Profit | H1 2024 Gross Profit | | :--- | :--- | :--- | :--- | :--- | | Cargo handling and ancillary services | 26,917 | 36,012 | 9,037 | 17,297 | | Sale of oil products | 154,593 | 179,401 | 6,336 | 7,689 | | **Total** | **181,510** | **215,413** | **15,373** | **24,986** | Revenue by Type (thousand RMB) | Revenue Type | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Revenue from sale of goods | 154,593 | 179,401 | | Revenue from provision of loading and unloading services | 26,105 | 35,200 | | Rental income | 812 | 812 | | **Total** | **181,510** | **215,413** | Revenue from Major Customers (thousand RMB) | Customer | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Customer A | – | 134,544 | | Customer B | 86,612 | 44,857 | | Customer C | 67,981 | – | [5. Other Income – Net](index=10&type=section&id=5.%20Other%20Income%20–%20Net) Other income – net significantly decreased to RMB455 thousand for the six months ended June 30, 2025, primarily due to a substantial reduction in crude oil futures contract gains, with all futures investments closed at period-end | Metric | H1 2025 (thousand RMB) | H1 2024 (thousand RMB) | | :--- | :--- | :--- | | Net foreign exchange gains/(losses) | 98 | (3) | | Gains on crude oil futures contracts | 423 | 2,727 | | Others | (66) | (130) | | **Total** | **455** | **2,594** | - As of June 30, 2025, all futures investments were closed[22](index=22&type=chunk) [6. Finance Income/(Costs) – Net](index=11&type=section&id=6.%20Finance%20Income%2F(Costs)%20–%20Net) The Group recorded net finance income of RMB7 thousand for the period, primarily from bank deposit interest, contrasting with a net finance cost in the prior year | Metric | H1 2025 (thousand RMB) | H1 2024 (thousand RMB) | | :--- | :--- | :--- | | Finance costs – interest expense on lease liabilities | (46) | (33) | | Finance income – interest income from bank deposits | 53 | 8 | | **Finance income/(costs) – net** | **7** | **(25)** | [7. Income Tax Expense](index=11&type=section&id=7.%20Income%20Tax%20Expense) The Group is exempt from income tax in the Cayman Islands and BVI, with no taxable profit in Hong Kong, while mainland China operations are taxed at 25%, resulting in a 46.3% decrease in income tax expense due to lower taxable profit - The Company and its subsidiaries in the Cayman Islands and British Virgin Islands are exempt from income tax[24](index=24&type=chunk) - Income tax provision for the Group's operations in mainland China is calculated at the applicable tax rate of 25% on estimated taxable profit[24](index=24&type=chunk) | Metric | H1 2025 (thousand RMB) | H1 2024 (thousand RMB) | | :--- | :--- | :--- | | Current income tax: Enterprise income tax | 3,146 | 5,855 | | Deferred income tax: Enterprise income tax | – | – | | **Total** | **3,146** | **5,855** | [8. Earnings Per Share](index=12&type=section&id=8.%20Earnings%20Per%20Share) For the six months ended June 30, 2025, profit attributable to owners of the Company was RMB4.943 million, resulting in basic earnings per share of RMB0.008, a significant decrease from RMB0.021 in the prior year, with diluted EPS being the same as basic EPS due to no dilutive potential ordinary shares | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Profit attributable to owners of the Company (thousand RMB) | 4,943 | 12,363 | | Weighted average number of ordinary shares in issue (thousand shares) | 600,000 | 600,000 | | **Basic earnings per share (RMB)** | **0.008** | **0.021** | - The diluted earnings per share presented are the same as the basic earnings per share because there were no potential dilutive ordinary shares in issue for the six months ended June 30, 2025, and 2024[29](index=29&type=chunk) [9. Dividends](index=12&type=section&id=9.%20Dividends) The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025, consistent with the prior year - The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025 (for the six months ended June 30, 2024: nil)[30](index=30&type=chunk) [10. Trade and Other Receivables](index=13&type=section&id=10.%20Trade%20and%20Other%20Receivables) As of June 30, 2025, total trade and other receivables decreased to RMB29.082 million from RMB36.280 million at December 31, 2024, primarily due to a reduction in trade receivables, while recoverable VAT increased | Metric | As of June 30, 2025 (thousand RMB) | As of December 31, 2024 (thousand RMB) | | :--- | :--- | :--- | | Trade receivables – net | 6,037 | 15,576 | | Recoverable VAT | 20,921 | 17,905 | | Bills receivable – third parties | 1,659 | 2,484 | | Other receivables – third parties | 465 | 315 | | **Total** | **29,082** | **36,280** | - The credit period for trade receivables is generally within 30 to 180 days[31](index=31&type=chunk) [11. Trade and Other Payables and Accrued Expenses](index=14&type=section&id=11.%20Trade%20and%20Other%20Payables%20and%20Accrued%20Expenses) As of June 30, 2025, total trade and other payables and accrued expenses decreased to RMB8.278 million from RMB9.784 million at December 31, 2024, mainly due to reductions in accrued staff costs, other payables, and accrued expenses | Metric | As of June 30, 2025 (thousand RMB) | As of December 31, 2024 (thousand RMB) | | :--- | :--- | :--- | | Trade payables | 708 | 291 | | Accrued staff costs and benefits | 3,126 | 4,198 | | Other payables and accrued expenses | 2,170 | 2,899 | | Other tax payables | 2,274 | 2,396 | | **Total** | **8,278** | **9,784** | [12. Events After the Reporting Period](index=14&type=section&id=12.%20Events%20After%20the%20Reporting%20Period) No significant events affecting the Group have occurred from June 30, 2025, up to the date of this announcement - No significant events have occurred from June 30, 2025, up to the date of this announcement that would affect the Group[34](index=34&type=chunk) [Management Discussion and Analysis](index=15&type=section&id=Management%20Discussion%20and%20Analysis) This section provides an overview of the Group's operational and financial performance, liquidity, capital structure, and future outlook for the reporting period [Business Review](index=15&type=section&id=Business%20Review) During the period, the Group's total cargo throughput decreased by 24.8% due to lower overall demand, and oil product sales revenue also declined by 13.8%, while the Group successfully hedged price fluctuations through crude oil futures trading - For the six months ended June 30, 2025, the Group achieved a total cargo throughput of approximately **1,302 thousand tonnes**, a decrease of approximately **429 thousand tonnes or 24.8%** compared to approximately 1,731 thousand tonnes in the same period last year, primarily due to a decrease in overall demand[36](index=36&type=chunk) - For the six months ended June 30, 2025, the Group recorded revenue from oil product sales of approximately **RMB154.6 million**, a decrease of approximately **13.8%** compared to approximately RMB179.4 million in the same period last year, mainly due to a decrease in demand[39](index=39&type=chunk) - The Group engaged in certain crude oil futures transactions during the reporting period and recorded a profit from them, as a tool to mitigate the impact of crude oil price fluctuations on the oil product business[39](index=39&type=chunk) [Financial Review](index=16&type=section&id=Financial%20Review) Revenue decreased by 15.7% to RMB181.5 million, driven by lower cargo handling and oil product sales, leading to a reduced gross profit margin of 8.5% and a 60.0% decline in profit attributable to owners of the Company Revenue Composition and Change (thousand RMB) | Revenue Source | H1 2025 | H1 2024 | Change (thousand RMB) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Revenue from provision of loading and unloading services | 26,105 | 35,200 | (9,095) | (25.8) | | Revenue from sale of oil products | 154,593 | 179,401 | (24,808) | (13.8) | | Rental income | 812 | 812 | – | – | | **Total** | **181,510** | **215,413** | **(33,903)** | **(15.7)** | - The Group's overall gross profit decreased from approximately **RMB25.0 million** for the six months ended June 30, 2024, to approximately **RMB15.4 million** for the six months ended June 30, 2025[45](index=45&type=chunk) - The overall gross profit margin decreased from approximately **11.6%** for the six months ended June 30, 2024, to approximately **8.5%** for the six months ended June 30, 2025[45](index=45&type=chunk) - The decrease in profit attributable to owners of the Company was mainly due to the decrease in revenue and other income – net[50](index=50&type=chunk) [Liquidity and Financial Resources](index=18&type=section&id=Liquidity%20and%20Financial%20Resources) As of June 30, 2025, the Group maintained a healthy financial position with net current assets of approximately RMB175.2 million and no interest-bearing borrowings, resulting in a low gearing ratio of 0.3% - As of June 30, 2025, the Group recorded net current assets of approximately **RMB175.2 million**, compared to net current assets of approximately RMB177.9 million as of December 31, 2024[51](index=51&type=chunk) - As of June 30, 2025, the Group had no interest-bearing borrowings (as of December 31, 2024: nil)[52](index=52&type=chunk) - As of June 30, 2025, the gearing ratio was approximately **0.3%** (as of December 31, 2024: approximately 0.4%)[52](index=52&type=chunk) [Capital Structure](index=19&type=section&id=Capital%20Structure) The Group's capital structure primarily comprises equity attributable to owners of the Company, including issued share capital, share premium, and retained earnings - The Group's capital structure comprises equity attributable to owners of the Company, which mainly includes issued share capital, share premium, and retained earnings[54](index=54&type=chunk) [Material Investments, Major Acquisitions and Disposals of Subsidiaries, Associates and Joint Ventures](index=19&type=section&id=Material%20Investments%2C%20Major%20Acquisitions%20and%20Disposals%20of%20Subsidiaries%2C%20Associates%20and%20Joint%20Ventures) During the period, the company disposed of approximately 6.37% equity interest in Fudi Tianyuan Petrochemical Co., Ltd. for HK$19 million, recognizing an unaudited net gain of approximately RMB4.6 million, with no other significant investment activities - On March 18, 2025, the Company disposed of 19,130,441 shares (representing approximately **6.37%** of the total issued shares) of Fudi Tianyuan Petrochemical Co., Ltd. for a consideration of **HK$19,000,000**[55](index=55&type=chunk) - The Group recognized an unaudited net gain of approximately **RMB4.6 million** from the disposal, which has been included in other comprehensive income for the reporting period[55](index=55&type=chunk) [Pledges of Assets and Contingent Liabilities](index=19&type=section&id=Pledges%20of%20Assets%20and%20Contingent%20Liabilities) As of June 30, 2025, the Group had no pledged assets or significant contingent liabilities - As of June 30, 2025, the Group had no pledged assets (as of December 31, 2024: nil)[57](index=57&type=chunk) [Foreign Exchange Risk](index=19&type=section&id=Foreign%20Exchange%20Risk) The Group's transactions are primarily denominated in RMB, with foreign exchange risk mainly arising from bank balances, cash and cash equivalents, and other payables denominated in USD, SGD, and HKD, and no derivative financial instruments were used for hedging during the period - The Group's transactions are primarily conducted in RMB, the functional currency of the Group, and major receivables and payables are denominated in RMB[58](index=58&type=chunk) - The Group's foreign exchange risk primarily relates to certain bank balances, cash and cash equivalents, and other payables denominated in USD, SGD, and HKD[58](index=58&type=chunk) - During the reporting period, the Group did not use derivative financial instruments to hedge against fluctuations in foreign currency transactions and other financial assets and liabilities arising in the ordinary course of business[58](index=58&type=chunk) [Human Resources and Remuneration](index=20&type=section&id=Human%20Resources%20and%20Remuneration) As of June 30, 2025, the Group employed 204 staff, a decrease from 213 in the prior year, with total staff costs decreasing to RMB10.4 million due to fewer employees and reduced bonuses, and remuneration is determined based on market terms and individual performance - As of June 30, 2025, the Group employed **204 employees** (as of June 30, 2024: 213 employees)[59](index=59&type=chunk) - Total staff costs incurred for the six months ended June 30, 2025, were approximately **RMB10.4 million** (for the six months ended June 30, 2024: approximately RMB11.0 million), with the decrease mainly due to a reduction in the number of employees and bonuses compared to the same period last year[59](index=59&type=chunk) [Update on Application for State-owned Land Use Right Certificate](index=20&type=section&id=Update%20on%20Application%20for%20State-owned%20Land%20Use%20Right%20Certificate) Maoming Tianyuan Wharf Operation Co., Ltd. is still applying for a state-owned land use right certificate for a 2,589.3 square meter plot, with the approval process extended due to insufficient records, but it currently has no impact on business operations as the land is not used for wharf business - Maoming Tianyuan Wharf Operation Co., Ltd. is still applying for a state-owned land use right certificate for a plot of land with a site area of **2,589.3 square meters**[60](index=60&type=chunk) - The relevant authorities informed Tianyuan that the application is still awaiting approval, and due to insufficient records of this land held by the authorities, the processing time will take longer and remains uncertain[60](index=60&type=chunk) - As the Company has not used it for its wharf business, there is no impact on our business operations[60](index=60&type=chunk) [Interim Dividend](index=20&type=section&id=Interim%20Dividend) The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025, consistent with the prior year - The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025 (for the six months ended June 30, 2024: nil)[61](index=61&type=chunk) [Future Plans for Material Investments or Capital Assets](index=20&type=section&id=Future%20Plans%20for%20Material%20Investments%20or%20Capital%20Assets) As of June 30, 2025, the Group had no other significant plans for material investments or capital assets beyond those disclosed in this announcement - Save for the business plans disclosed in this announcement, there were no other significant plans for material investments or capital assets as of June 30, 2025[62](index=62&type=chunk) [Capital Commitments](index=20&type=section&id=Capital%20Commitments) As of June 30, 2025, the Group's capital commitments for the construction and acquisition of property, plant, and equipment remained at approximately RMB2.0 million, consistent with December 31, 2024 - As of June 30, 2025, the Group's capital commitments for the construction and acquisition of property, plant, and equipment amounted to approximately **RMB2.0 million** (as of December 31, 2024: approximately RMB2.0 million)[63](index=63&type=chunk) [Outlook and Prospects](index=21&type=section&id=Outlook%20and%20Prospects) The Group plans to strengthen its core businesses by optimizing cargo structure, enhancing cost control, and reinforcing customer relationships, while actively exploring new market opportunities for oil product sales and seeking diversified investment ventures - The Group will continue to consolidate and integrate its core businesses, enhancing efficiency and capabilities[64](index=64&type=chunk) - For cargo handling and ancillary services, plans involve optimizing cargo structure, strengthening cost control, and consolidating customer relationships[64](index=64&type=chunk) - For oil product sales, the strategy is to focus on market development and allocate more resources to expand this business[64](index=64&type=chunk) - The Group will also continue to actively seek new business and investment opportunities to enhance diversification[65](index=65&type=chunk) [Corporate Governance and Other Information](index=21&type=section&id=Corporate%20Governance%20and%20Other%20Information) This section details the Group's adherence to corporate governance principles, including compliance with listing rules, director conduct, and the role of the audit committee [Corporate Governance](index=21&type=section&id=Corporate%20Governance) The company generally complied with the Corporate Governance Code, with exceptions for the combined roles of Chairman and CEO and the absence of an independent internal audit function, though the Board believes existing mechanisms ensure balanced power and risk control, and an external review is planned - The Board believes that the Company has complied with the applicable code provisions of the Corporate Governance Code set out in Appendix C1 to the Listing Rules of the Stock Exchange, save for the non-segregation of the roles of Chairman and Chief Executive Officer, and the absence of an independent internal audit function[66](index=66&type=chunk)[67](index=67&type=chunk) - The Board believes that Mr. Yang Jinming serving concurrently as Chairman and Chief Executive Officer is in the best interests of the Company, and the Board has a sufficiently balanced distribution of power and authority[66](index=66&type=chunk) - The Company intends to appoint an external consultant in the second half of the year to conduct an internal review on the scope determined by the Audit Committee[67](index=67&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=22&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company%27s%20Listed%20Securities) Neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities during the six months ended June 30, 2025 - 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[68](index=68&type=chunk) [Standard Code for Securities Transactions by Directors](index=22&type=section&id=Standard%20Code%20for%20Securities%20Transactions%20by%20Directors) The Company adopted the Standard Code for Securities Transactions by Directors of Listed Issuers, and all directors confirmed full compliance during the reporting period - 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 as its code of conduct for directors' securities transactions[69](index=69&type=chunk) - Following specific enquiries made to all Directors, each of them has confirmed full compliance with the Model Code for the six months ended June 30, 2025[69](index=69&type=chunk) [Significant Events After the Reporting Period](index=22&type=section&id=Significant%20Events%20After%20the%20Reporting%20Period) No significant events have occurred after June 30, 2025, up to the date of this announcement - No significant events have occurred after June 30, 2025, up to the date of this announcement[70](index=70&type=chunk) [Audit Committee and Review of Interim Results](index=22&type=section&id=Audit%20Committee%20and%20Review%20of%20Interim%20Results) The Audit Committee, comprising three independent non-executive directors, reviewed the unaudited interim results for the six months ended June 30, 2025, confirming compliance with applicable accounting standards and regulations, with no disagreements on accounting treatments - The Audit Committee, comprising three independent non-executive directors, has reviewed the Company's unaudited interim results for the six months ended June 30, 2025, and is of the opinion that the unaudited interim results have been prepared in compliance with applicable accounting standards and requirements[71](index=71&type=chunk) - The Audit Committee has no disagreement with the accounting treatments adopted by the Company[72](index=72&type=chunk) [Publication of Interim Results and Interim Report](index=23&type=section&id=Publication%20of%20Interim%20Results%20and%20Interim%20Report) This interim results announcement is published on the Company's and HKEX websites, and the 2025 interim report will be dispatched to shareholders and available online in due course - This interim results announcement will be published on the Company's website www.tianyuangroupholdings.com and the HKEX website www.hkexnews.hk[73](index=73&type=chunk) - The 2025 interim report will be dispatched to the Company's shareholders and will be available on the aforementioned websites in due course[73](index=73&type=chunk) [Acknowledgement](index=23&type=section&id=Acknowledgement) The Board expresses gratitude to the management, staff, shareholders, business partners, and other professionals for their support during the reporting period - The Board wishes to express its sincere gratitude for the efforts and dedication of the Group's management and all staff, and for the strong support from the Company's shareholders, business partners, and other professionals during the reporting period[74](index=74&type=chunk)

[2025 Interim Results Summary](index=1&type=section&id=2025%20Interim%20Results%20Summary) Hongyang Group Co., Ltd. announced its unaudited interim results for the six months ended June 30, 2025, showing the company faces severe challenges with significant declines in contracted sales and revenue, and a substantial net loss, with the board not recommending an interim dividend 2025 Interim Key Financial Data | Indicator | H1 2025 (RMB million) | H1 2024 (RMB million) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Contracted Sales | 2,870.0 | 4,812.0 | -40.4 | | Revenue | 2,712.3 | 6,006.4 | -54.8 | | Commercial and Hotel Operation Revenue | 167.0 | 283.3 | -41.1 | | Gross Loss / Gross Profit | (222.1) | 532.0 | -141.7 | | Net Loss | (2,320.6) | (1,710.3) | +35.7 | | Interim Dividend | Nil | Nil | - | [Condensed Consolidated Financial Statements](index=2&type=section&id=Condensed%20Consolidated%20Financial%20Statements) This section presents the Group's condensed consolidated financial statements, including the statement of profit or loss and other comprehensive income, and the statement of financial position, reflecting significant declines in revenue and profitability, and worsening liquidity [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=2&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For the six months ended June 30, 2025, the company's revenue significantly decreased by 54.8% to RMB 2,712.3 million, turning from a gross profit to a gross loss of RMB 222.1 million, with net loss expanding to RMB 2,320.6 million due to increased cost of sales, fair value losses on investment properties, and increased share of losses from joint ventures/associates Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (For the six months ended June 30) | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Revenue | 2,712,287 | 6,006,436 | | Cost of sales | (2,934,402) | (5,474,410) | | Gross (loss) / profit | (222,115) | 532,026 | | Other income and gains | 232,607 | 8,324 | | Selling and distribution expenses | (76,281) | (157,605) | | Administrative expenses | (61,253) | (140,810) | | Other expenses | (53,980) | (258,508) | | Net fair value loss on investment properties | (19,660) | (412,136) | | Finance costs | (540,165) | (826,715) | | Share of profits and losses of joint ventures | (624,754) | (119,925) | | Share of profits and losses of associates | (610,003) | (209,519) | | Loss before tax | (1,975,604) | (1,584,868) | | Tax | (344,977) | (125,446) | | Loss and total comprehensive loss for the period | (2,320,581) | (1,710,314) | | Loss attributable to owners of the parent | (1,883,732) | (1,784,029) | | Loss attributable to non-controlling interests | (436,849) | 73,715 | | Basic and diluted loss per share (RMB cents) | (56) | (53) | [Condensed Consolidated Statement of Financial Position](index=3&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, total assets and liabilities decreased, but net current liabilities expanded to RMB 6,771.1 million, indicating persistent liquidity pressure, with total equity significantly reduced due to the period's losses Condensed Consolidated Statement of Financial Position (As of June 30) | Indicator | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | **Non-current assets** | | | | Investment properties | 10,497,665 | 10,748,460 | | Investments in joint ventures | 1,965,649 | 2,666,125 | | Investments in associates | 5,025,990 | 5,673,189 | | Total non-current assets | 17,764,215 | 19,394,843 | | **Current assets** | | | | Properties under development | 6,387,735 | 10,244,722 | | Completed properties held for sale | 8,844,852 | 7,569,461 | | Cash and bank balances | 824,297 | 1,242,346 | | Total current assets | 36,539,876 | 40,610,531 | | **Current liabilities** | | | | Trade and bills payables | 6,845,023 | 6,952,638 | | Contract liabilities | 3,455,470 | 5,645,521 | | Interest-bearing bank and other borrowings (current) | 6,049,473 | 6,852,939 | | Senior notes (current) | 10,566,954 | 10,609,906 | | Total current liabilities | 43,310,979 | 46,866,126 | | Net current liabilities | (6,771,103) | (6,255,595) | | **Non-current liabilities** | | | | Interest-bearing bank and other borrowings (non-current) | 4,073,222 | 3,683,716 | | Total non-current liabilities | 6,199,127 | 5,965,534 | | Net assets | 4,793,985 | 7,173,714 | | Total equity | 4,793,985 | 7,173,714 | [Notes to the Condensed Consolidated Financial Information](index=5&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Information) This section provides detailed notes to the condensed consolidated financial information, covering company background, accounting policies, segment data, revenue breakdown, finance costs, taxation, dividends, loss per share, and trade receivables/payables [Company Information](index=5&type=section&id=Company%20Information) Hongyang Group Co., Ltd. was incorporated in the Cayman Islands, listed on the HKEX main board on July 12, 2018, primarily engaging in property development and management, commercial property investment and operation, and hotel operation, with Mr. Zeng Huansha as the ultimate controlling party - The company is an investment holding company, with principal activities including property development and management services, commercial property investment and operation, and hotel operation[6](index=6&type=chunk) - The ultimate controlling party is Mr. Zeng Huansha, an executive director of the company[6](index=6&type=chunk) [Basis of Preparation and Going Concern](index=5&type=section&id=Basis%20of%20Preparation%20and%20Going%20Concern) The condensed consolidated financial information is prepared in accordance with IAS 34; the company faces severe going concern uncertainties, including net loss, current liabilities exceeding current assets by approximately RMB 6.77 billion, and defaults on interest-bearing bank borrowings and senior notes, with management's liquidity improvement plans subject to significant uncertainty - The Group recorded a net loss of approximately **RMB 2.32 billion** for the period ended June 30, 2025[8](index=8&type=chunk) - As of June 30, 2025, the Group's current liabilities exceeded its current assets by approximately **RMB 6.77 billion**[8](index=8&type=chunk) - Interest-bearing bank and other borrowings of approximately **RMB 2.52 billion** and senior notes and accrued interest of approximately **RMB 13.48 billion** were in default, entitling lenders to demand immediate repayment[8](index=8&type=chunk) - The company has formulated several plans to improve liquidity, including negotiating repayment extensions with banks, seeking new loans, accelerating property sales, expediting sales proceeds collection, controlling costs, and disposing of equity interests, but the successful implementation of these plans is subject to significant uncertainty[9](index=9&type=chunk)[10](index=10&type=chunk) [Changes in Accounting Policies and Disclosures](index=7&type=section&id=Changes%20in%20Accounting%20Policies%20and%20Disclosures) Revised IFRS accounting standards, including IAS 21 amendments on lack of exchangeability, were first adopted this period; these amendments have no material impact on the condensed consolidated financial statements as the Group's transaction currencies are all exchangeable - The amendments to IAS 21, concerning the assessment of currency exchangeability and estimation of spot exchange rates, were first adopted[13](index=13&type=chunk) - These amendments have no material impact on the condensed consolidated financial statements as the Group's transaction currencies are all exchangeable[13](index=13&type=chunk) [Operating Segment Information](index=7&type=section&id=Operating%20Segment%20Information) The Group has three reportable operating segments: property development and management services, commercial property investment and operation, and hotel operation, with all revenue and major non-current assets derived from mainland China; property development and management services saw significant declines in both revenue and results, commercial property investment and operation revenue also decreased, and hotel operation generated no revenue - The Group has three reportable operating segments: property development and management services, commercial property investment and operation, and hotel operation[14](index=14&type=chunk) - All revenue from external customers and major non-current assets are derived from mainland China, with no reportable geographical segments[15](index=15&type=chunk) Segment Revenue and Results (For the six months ended June 30) | Segment | 2025 Revenue (RMB thousand) | 2024 Revenue (RMB thousand) | 2025 Results (RMB thousand) | 2024 Results (RMB thousand) | | :--- | :--- | :--- | :--- | :--- | | Property development and management services | 2,545,316 | 5,723,157 | (1,384,283) | (439,503) | | Commercial property investment and operation | 166,971 | 270,104 | (62,500) | (290,603) | | Hotel operation | – | 13,175 | (902) | 1,408 | | **Total** | **2,712,287** | **6,006,436** | **(1,447,685)** | **(728,698)** | Segment Assets and Liabilities (As of June 30) | Segment | June 30, 2025 Assets (RMB thousand) | December 31, 2024 Assets (RMB thousand) | June 30, 2025 Liabilities (RMB thousand) | December 31, 2024 Liabilities (RMB thousand) | | :--- | :--- | :--- | :--- | :--- | | Property development and management services | 45,873,971 | 46,368,219 | 47,736,659 | 51,162,038 | | Commercial property investment and operation | 8,217,834 | 13,308,555 | 1,701,293 | 1,604,175 | | Hotel operation | 95,294 | – | 5,583 | – | | **Total** | **54,304,091** | **60,005,374** | **49,510,106** | **52,831,660** | [Revenue, Other Income and Gains](index=11&type=section&id=Revenue%2C%20Other%20Income%20and%20Gains) The Group's total revenue decreased by 54.8% year-on-year to RMB 2,712.3 million, primarily due to a significant 55.5% drop in property sales revenue, while other income and gains increased substantially, mainly from net reversal of impairment losses on financial assets and gain on settlement of borrowings Revenue Analysis (For the six months ended June 30) | Revenue Source | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Revenue from contracts with customers | 2,548,408 | 5,746,877 | | Gross rental income | 163,879 | 259,559 | | **Total** | **2,712,287** | **6,006,436** | Revenue from Contracts with Customers Breakdown (H1 2025) | Type of Goods or Services | Property Development and Management Services (RMB thousand) | Commercial Property Investment and Operation (RMB thousand) | Hotel Operation (RMB thousand) | Total (RMB thousand) | | :--- | :--- | :--- | :--- | :--- | | Property sales | 2,533,070 | – | – | 2,533,070 | | Project management services | 12,246 | – | – | 12,246 | | Others | – | 3,092 | – | 3,092 | | **Total** | **2,545,316** | **3,092** | **–** | **2,548,408** | Other Income and Gains Analysis (For the six months ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Bank interest income | 994 | 4,200 | | Net reversal of impairment losses on financial assets | 143,375 | – | | Gain on settlement of borrowings | 83,435 | – | | **Total** | **232,607** | **8,324** | - Gain on settlement of borrowings of **RMB 83.4 million** was primarily due to pledged investment properties used to settle defaulted borrowings[23](index=23&type=chunk) Items Deducted From / (Credited to) Loss Before Tax (For the six months ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Cost of inventories sold | 2,521,297 | 5,043,536 | | Net impairment losses recognized on properties under development and completed properties held for sale | 354,683 | 300,339 | | Net (reversal of) / impairment losses recognized on financial assets | (143,375) | 201,597 | | Net fair value loss on investment properties | 19,660 | 412,136 | | Share of profits and losses of joint ventures | 624,754 | 119,925 | | Share of profits and losses of associates | 610,003 | 209,519 | | Employee benefit expenses | 62,928 | 87,041 | [Finance Costs](index=14&type=section&id=Finance%20Costs) For the six months ended June 30, 2025, finance costs decreased by 34.7% year-on-year to RMB 540.2 million, primarily due to reduced exchange losses on USD borrowings and a decrease in total borrowings Finance Costs Analysis (For the six months ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Interest on bank and other borrowings and senior notes | 757,291 | 923,372 | | Interest expense on contract liabilities | 20,625 | 147,946 | | Less: Net foreign exchange (gain) / loss on financing activities | (48,384) | 77,559 | | Less: Interest capitalized | (204,953) | (347,631) | | **Total** | **540,165** | **826,715** | [Taxation](index=14&type=section&id=Taxation) The Group's taxation includes corporate income tax and land appreciation tax; while income tax slightly decreased, a significant increase in land appreciation tax provision and additional expenses from prior year's insufficient land appreciation tax provision led to a substantial rise in total tax expenses - Mainland China subsidiaries are subject to corporate income tax at a rate of **25%**, and land appreciation tax is levied at progressive rates from **30% to 60%**[26](index=26&type=chunk)[27](index=27&type=chunk) Taxation Analysis (For the six months ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Current tax: Corporate income tax | 32,274 | 62,537 | | Current tax: Land appreciation tax | 68,598 | 45,956 | | Under-provision in prior years: Land appreciation tax | 201,026 | – | | Deferred tax | 43,079 | 16,953 | | **Total tax expense for the period** | **344,977** | **125,446** | [Dividends](index=15&type=section&id=Dividends) The Board has resolved not to declare any interim dividend for the six months ended June 30, 2025, consistent with the prior year - The Board does not recommend the payment of any interim dividend for the six months ended June 30, 2025[28](index=28&type=chunk) [Loss Per Share Attributable to Owners of the Parent](index=16&type=section&id=Loss%20Per%20Share%20Attributable%20to%20Owners%20of%20the%20Parent) For the six months ended June 30, 2025, basic and diluted loss per share attributable to owners of the parent expanded to RMB 56 cents, up from RMB 53 cents in the prior period, with diluted loss per share being the same as basic loss per share due to the anti-dilutive effect of share options Loss Per Share Calculation (For the six months ended June 30) | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | Loss attributable to owners of the parent (RMB thousand) | (1,883,732) | (1,784,029) | | Weighted average number of ordinary shares in issue (shares) | 3,338,898,000 | 3,338,614,000 | | Basic and diluted loss per share (RMB cents) | (56) | (53) | - The share option scheme expired and terminated in the second half of the year ended December 31, 2024, with no outstanding share options thereafter[31](index=31&type=chunk) [Trade and Bills Receivables](index=17&type=section&id=Trade%20and%20Bills%20Receivables) As of June 30, 2025, total trade and bills receivables significantly decreased to RMB 2,891 thousand from RMB 9,180 thousand on December 31, 2024, with the company's directors considering expected credit losses immaterial and no loss allowance recognized Ageing Analysis of Trade and Bills Receivables (RMB thousand) | Ageing | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Within 1 month | – | 8,885 | | 6 to 12 months | 2,891 | 220 | | **Total** | **2,891** | **9,180** | - The company applies the simplified approach to provide for expected credit losses and considers the expected credit losses on these balances to be immaterial[32](index=32&type=chunk) [Trade and Bills Payables](index=17&type=section&id=Trade%20and%20Bills%20Payables) As of June 30, 2025, total trade and bills payables slightly decreased to RMB 6,845,023 thousand from December 31, 2024, with over 80% of payables due in more than one year Ageing Analysis of Trade and Bills Payables (RMB thousand) | Ageing | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Within 1 year | 1,255,974 | 1,573,609 | | Over 1 year | 5,589,049 | 5,379,029 | | **Total** | **6,845,023** | **6,952,638** | - Trade payables are unsecured and interest-free, generally settled based on construction progress[33](index=33&type=chunk) [Management Discussion and Analysis](index=18&type=section&id=Management%20Discussion%20and%20Analysis) This section provides management's review of the Group's performance and financial position for the period, including an overview of the operating environment, business segment performance, financial results, and liquidity, along with future outlook and strategies [H1 2025 Review and Outlook](index=18&type=section&id=H1%202025%20Review%20and%20Outlook) In H1 2025, China's economy remained stable, with the real estate market moving towards stabilization under policy adjustments, yet showing divergence as first-tier cities stabilized while third- and fourth-tier cities remained weak; the company adhered to its "preserve assets, reduce debt, control risks" strategy, successfully delivering 12 batches of new homes, and anticipates continued loose real estate policies in H2, focusing on destocking, accelerating cash collection, debt resolution, and ensuring delivery - In H1 2025, China's GDP grew by **5.3%** year-on-year, and the real estate market progressed towards stabilization under policy adjustments, though market differentiation persisted, with first-tier cities showing stability while third- and fourth-tier cities had not yet bottomed out[34](index=34&type=chunk)[35](index=35&type=chunk) H1 2025 Real Estate Market Data | Indicator | H1 2025 | YoY Change (%) | | :--- | :--- | :--- | | Sales area of new commercial housing | 458.51 million sq.m. | -3.5 | | Sales area of residential housing | - | -3.7 | | Sales value of new commercial housing | RMB 4.42 trillion | -5.5 | | Sales value of residential housing | - | -5.2 | | Commercial housing for sale at end of June | 769.48 million sq.m. | Decreased by 4.79 million sq.m. from end of May | - The company adhered to its "preserve assets, reduce debt, control risks" operating strategy, focusing on dynamic project cash flow and asset management, and successfully delivered **12 batches** totaling **2,453 new homes**, covering over **380,000 sq.m.**[36](index=36&type=chunk) - Looking ahead to H2 2025, the real estate policy environment is expected to remain loose, and the company will actively respond to policies, focusing on destocking, accelerating cash collection, debt resolution, and ensuring delivery, while deepening asset optimization and debt restructuring[37](index=37&type=chunk)[38](index=38&type=chunk)[39](index=39&type=chunk) [Business Review](index=21&type=section&id=Business%20Review) The Group's real estate sales decreased by 40.4% year-on-year in the first half, with total land reserve GFA of approximately 7.475 million sq.m.; commercial operation revenue declined by 38.2%, and hotel operation generated no revenue due to business suspension [Property Sales](index=21&type=section&id=Property%20Sales) For the six months ended June 30, 2025, the Group achieved contracted sales of approximately RMB 2.87 billion, a 40.4% decrease from the prior period Contracted Sales Details (For the six months ended June 30, 2025) | Region | Total Contracted Sales GFA (sq.m.) | Contracted Sales Value (RMB thousand) | Average Contracted Sales Price (RMB/sq.m.) | | :--- | :--- | :--- | :--- | | Nanjing | 39,946 | 919,286 | 23,013 | | Xuzhou | 33,601 | 230,542 | 6,861 | | Ningbo | 16,548 | 291,603 | 17,622 | | Suzhou | 16,057 | 227,175 | 14,148 | | **Total** | **213,600** | **2,870,445** | **13,438** | [Land Reserve](index=22&type=section&id=Land%20Reserve) As of June 30, 2025, the Group's total land reserve GFA was approximately 7,475,064 sq.m., comprising 2,542,866 sq.m. of completed properties, 1,025,377 sq.m. of leasable area held for investment, and 3,906,821 sq.m. of properties under development Land Reserve Overview (As of June 30, 2025) | Category | Total GFA (sq.m.) | | :--- | :--- | | Completed properties | 2,542,866 | | Leasable area held for investment | 1,025,377 | | Properties under development | 3,906,821 | | **Total Land Reserve** | **7,475,064** | - Land reserves are distributed across multiple cities, including Nanjing, Changzhou, Chengdu, Foshan, Hefei, Nanchang, Nantong, Suzhou, Wuhan, Xuzhou, and Chongqing[43](index=43&type=chunk)[44](index=44&type=chunk)[45](index=45&type=chunk)[46](index=46&type=chunk)[47](index=47&type=chunk)[48](index=48&type=chunk)[49](index=49&type=chunk)[50](index=50&type=chunk)[51](index=51&type=chunk)[52](index=52&type=chunk)[53](index=53&type=chunk)[54](index=54&type=chunk)[55](index=55&type=chunk) [Commercial Operations](index=34&type=section&id=Commercial%20Operations) For the six months ended June 30, 2025, the Group's commercial operation revenue was approximately RMB 167.0 million, a 38.2% decrease year-on-year, primarily due to the closure of some stores - Commercial operation revenue decreased by **38.2%** year-on-year to **RMB 167.0 million**[56](index=56&type=chunk) - The decrease in revenue was primarily due to the closure of some stores[57](index=57&type=chunk) [Hotel Operations](index=35&type=section&id=Hotel%20Operations) For the six months ended June 30, 2025, the Group had no hotel operation revenue due to the suspension of hotel operations during the period - There was no hotel operation revenue during the period due to the suspension of hotel operations[58](index=58&type=chunk)[59](index=59&type=chunk) [Financial Review](index=35&type=section&id=Financial%20Review) The Group experienced a significant revenue decline, a shift from gross profit to gross loss, and an expanded net loss; while selling and administrative expenses decreased notably, share of losses from joint ventures and associates increased substantially, finance costs decreased, and tax expenses rose due to increased land appreciation tax provisions Recognized Revenue Details (For the six months ended June 30) | Revenue Source | 2025 (RMB thousand) | % of Total | 2024 (RMB thousand) | % of Total | YoY Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Property sales | 2,545,316 | 93.8 | 5,723,157 | 95.3 | -55.5 | | Commercial operations | 166,971 | 6.2 | 270,104 | 4.5 | -38.2 | | Hotel operations | – | – | 13,175 | 0.2 | -100.0 | | **Total** | **2,712,287** | **100.0** | **6,006,436** | **100.0** | **-54.8** | - Cost of sales decreased by **46.4%** year-on-year to **RMB 2,934.4 million**, primarily due to a reduction in the number of projects delivered during the period[62](index=62&type=chunk) - A gross loss of **RMB 222.1 million** was recorded, with a gross loss margin of **8.2%**, turning from a profit to a loss, mainly due to market factors leading to a decrease in selling prices[63](index=63&type=chunk)[64](index=64&type=chunk) - Fair value loss on investment properties was approximately **RMB 19.7 million**, primarily due to a decline in overall capital value[65](index=65&type=chunk) - Selling and distribution expenses decreased by **51.6%** to **RMB 76.3 million**, and administrative expenses decreased by **56.5%** to **RMB 61.3 million**, mainly due to fewer new property projects and enhanced cost control[66](index=66&type=chunk)[67](index=67&type=chunk) - Share of losses from joint ventures and associates expanded to **RMB 1,234.8 million**, primarily due to increased losses from these entities[68](index=68&type=chunk) - Finance costs decreased by **34.7%** to **RMB 540.2 million**, mainly due to reduced exchange losses on USD borrowings and a decrease in total borrowings[69](index=69&type=chunk) - Total tax expense for the period was **RMB 344.977 million**, a significant increase from **RMB 125.446 million** in the prior period, primarily due to land appreciation tax provisions and under-provision in prior years[70](index=70&type=chunk)[28](index=28&type=chunk) - The Group's loss before tax was **RMB 1,975.6 million**, an increase from **RMB 1,584.9 million** in the prior period[71](index=71&type=chunk) [Liquidity, Financial Resources and Capital](index=38&type=section&id=Liquidity%2C%20Financial%20Resources%20and%20Capital) As of June 30, 2025, the Group's cash and bank balances decreased, and total borrowings slightly declined but remained high; both net gearing ratio and debt-to-asset ratio worsened, while current ratio and cash-to-short-term debt ratio remained low, indicating significant liquidity pressure Cash Position (As of June 30) | Indicator | June 30, 2025 (RMB billion) | December 31, 2024 (RMB billion) | | :--- | :--- | :--- | | Cash and bank balances | 0.82 | 1.24 | | Restricted cash | 0.48 | 0.58 | | Pledged deposits | 0.02 | 0.02 | Total Borrowings Repayment (As of June 30) | Borrowing Type | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Interest-bearing bank and other borrowings (total) | 10,122,695 | 10,536,655 | | Senior notes (repayable on demand) | 10,566,954 | 10,609,906 | | **Total Borrowings** | **20,689,649** | **21,146,561** | - Approximately **RMB 12.06 billion** of borrowings were denominated in USD, with the remainder in RMB, and most bank and other borrowings bore interest at floating rates[75](index=75&type=chunk) - Assets of approximately **RMB 14.62 billion** were pledged to banks and other financial institutions[75](index=75&type=chunk) Debt Ratios (As of June 30) | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Net gearing ratio | 414.4% | 277.5% | | Debt-to-asset ratio | 91.2% | 88.0% | | Current ratio | 0.84 times | 0.87 times | | Cash to short-term debt ratio | 0.05 times | 0.07 times | - Capital and property development expenditure commitments amounted to approximately **RMB 2.71 billion**[77](index=77&type=chunk) [Corporate Governance and Other Information](index=40&type=section&id=Corporate%20Governance%20and%20Other%20Information) This section details the Group's corporate governance practices, including material acquisitions and disposals, employee and remuneration policies, post-reporting period events, dividend policy, securities transactions, foreign currency risk, legal matters, and audit committee review [Material Acquisitions and Disposals](index=40&type=section&id=Material%20Acquisitions%20and%20Disposals) During the reporting period, the Group undertook several material disposals, including the sale of parking space titles or usage rights to Hongyang Services Group Co., Ltd., and the disposal of equity interests in three target companies, all approved by shareholders - The company entered into a framework agreement with Hongyang Services Group Co., Ltd. for the transfer of parking space titles or usage rights, with a total consideration of approximately **RMB 230.92 million**[78](index=78&type=chunk) - Equity interests in target companies A, B, and C held by Chengdu Hongyang Jinxing, Xuzhou Hongqi, and Nanjing Hongtai Puyang were disposed of for total considerations of approximately **RMB 142.4 million**, **RMB 73.95 million**, and **RMB 41.34 million**, respectively[79](index=79&type=chunk) - These disposals were approved at an extraordinary general meeting of shareholders on May 21, 2025[80](index=80&type=chunk) [Employees and Remuneration Policy](index=41&type=section&id=Employees%20and%20Remuneration%20Policy) As of June 30, 2025, the Group had 588 employees, with 514 in property development and 74 in commercial property operations; remuneration policy is based on market levels, individual performance, and experience, offering career development, medical benefits, and specialized training Employee Distribution (As of June 30, 2025) | Business | Number of Employees | | :--- | :--- | | Property development | 514 | | Commercial property operations | 74 | | **Total** | **588** | - Remuneration is primarily determined by prevailing market salary levels, individual employee performance, and work experience, with career development opportunities, medical benefits, and specialized training programs also provided[82](index=82&type=chunk) [Events After Reporting Period](index=41&type=section&id=Events%20After%20Reporting%20Period) The Company did not undertake any significant events after June 30, 2025 - The Company did not undertake any significant events after June 30, 2025[83](index=83&type=chunk) [Interim Dividend](index=41&type=section&id=Interim%20Dividend) The Board has resolved that the Company will not declare any interim dividend for the reporting period - The Board has resolved that the Company will not declare any interim dividend for the reporting period[84](index=84&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=41&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company%27s%20Listed%20Securities) During the reporting period, the Group neither purchased, sold, nor redeemed any of the Company's listed securities, and as of the end of the reporting period, the Company held no treasury shares - During the reporting period, the Group neither purchased, sold, nor redeemed any of the Company's listed securities[85](index=85&type=chunk) - As of the end of the reporting period, the Company held no treasury shares[85](index=85&type=chunk) [Foreign Currency Risk](index=42&type=section&id=Foreign%20Currency%20Risk) The Group primarily operates in China, with the vast majority of transactions denominated and settled in RMB - The Group primarily operates in China, with the vast majority of transactions denominated and settled in RMB[86](index=86&type=chunk) [Material Legal and Litigation Matters](index=42&type=section&id=Material%20Legal%20and%20Litigation%20Matters) A winding-up petition was filed against the Company on February 14, 2024, involving financial obligations of no less than USD 228.5 million, with the hearing adjourned to September 22, 2025; the company is actively pursuing restructuring and appreciates creditor support - A winding-up petition was filed against the Company on February 14, 2024, involving financial obligations of no less than **USD 228.5 million**[87](index=87&type=chunk) - The hearing for the petition has been adjourned to September 22, 2025[87](index=87&type=chunk) - The High Court has not yet issued a winding-up order against the Company, which will continue to advance its restructuring in an orderly manner[87](index=87&type=chunk) [Corporate Governance](index=42&type=section&id=Corporate%20Governance) The Group has adopted the HKEX Corporate Governance Code and complied with all applicable code provisions during the reporting period, except for the unseparated roles of Chairman and Chief Executive Officer; the Board believes Mr. Zeng Huansha's dual role aids business planning and will be regularly reviewed - The Company has adopted the Corporate Governance Code of the HKEX[88](index=88&type=chunk) - During the reporting period, the Company complied with all applicable code provisions, except for the unseparated roles of Chairman and Chief Executive Officer[88](index=88&type=chunk)[89](index=89&type=chunk) - Mr. Zeng Huansha serves as both the Chairman of the Board and the Chief Executive Officer, an arrangement the Board believes facilitates business planning and will be regularly reviewed[89](index=89&type=chunk) [Standard Securities Dealing Code for Directors of Listed Issuers](index=43&type=section&id=Standard%20Securities%20Dealing%20Code%20for%20Directors%20of%20Listed%20Issuers) The Company has adopted the Standard Securities Dealing Code for Directors of Listed Issuers, and following inquiry, directors confirmed compliance with the code throughout the reporting period - The Company has adopted the Standard Securities Dealing Code for Directors of Listed Issuers[90](index=90&type=chunk) - Directors confirmed compliance with the required standards set out in the Standard Code throughout the reporting period[90](index=90&type=chunk) [Audit Committee Review of Interim Results](index=43&type=section&id=Audit%20Committee%20Review%20of%20Interim%20Results) The Audit Committee reviewed the Company's unaudited condensed consolidated interim results for the six months ended June 30, 2025, confirming compliance with all applicable accounting principles, standards, and requirements, and adequate disclosures - The Audit Committee has reviewed the Company's unaudited condensed consolidated interim results for the six months ended June 30, 2025[91](index=91&type=chunk) - The Audit Committee confirmed compliance with all applicable accounting principles, standards, and requirements, and that adequate disclosures have been made[91](index=91&type=chunk) [Publication of Interim Results and Interim Report](index=44&type=section&id=Publication%20of%20Interim%20Results%20and%20Interim%20Report) This announcement has been published on the HKEX and Company websites; the Company's interim report for the six months ended June 30, 2025, will be made available to shareholders and published on the aforementioned websites in due course - This announcement has been published on the HKEX website (www.hkexnews.hk) and the Company's website (www.rsunproperty.hk)[92](index=92&type=chunk) - The interim report will be made available to shareholders and published on the aforementioned websites in due course[92](index=92&type=chunk)

香港交易及結算所有限公司以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 表 明 不 會 就 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 的 任 何 損 失 承 擔 任 何 責 任。 KAISA GROUP HOLDINGS LTD. 佳兆業集團控股有限公司 * （於 開 曼 群 島 註 冊 成 立 的 有 限 公 司） （股 份 代 號：1638） 截至二零二五年六月三十日止六個月的中期業績公告 佳兆業集團控股有限公司（「本公司」）董 事（「董 事」）會（「董事會」）宣佈本公司及 其附屬公司（統 稱「本集團」）截至二零二五年六月三十日止六個月的未經審核 中 期 業 績，連 同 截 至 二 零 二 四 年 同 期 的 比 較 數 字。 財務摘要 | | | | | | | | 截至六月三十日止六個月 | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | | | | | 二零二五年 ...

[Announcement Information](index=1&type=section&id=Announcement%20Information) [Announcement Statement and Company Overview](index=1&type=section&id=Announcement%20Statement%20and%20Company%20Overview) This announcement presents the unaudited consolidated interim results of Huitongda Network Co., Ltd. for the six months ended June 30, 2025, prepared in accordance with Listing Rules and IAS 34, and reviewed by the Audit Committee - Huitongda Network Co., Ltd. (Stock Code: 9878) released its interim results announcement for the six months ended June 30, 2025[2](index=2&type=chunk) - These unaudited consolidated interim results are prepared in accordance with applicable Listing Rules and IAS 34, and have been reviewed by the Audit Committee[3](index=3&type=chunk) [Business Review](index=2&type=section&id=Business%20Review) [Overall Operating Performance and Strategic Transformation](index=2&type=section&id=Overall%20Operating%20Performance%20and%20Strategic%20Transformation) Facing a complex and severe external environment, the Group steadfastly advanced its "Quality and Efficiency Improvement, Innovative Development" strategy, successfully transitioning from pursuing scale expansion to focusing on enhancing development quality and profitability, achieving record highs in multiple core financial indicators, and generating AI-related revenue from scratch - The Group steadfastly advanced its "Quality and Efficiency Improvement, Innovative Development" strategy, successfully transitioning from pursuing scale expansion to focusing on enhancing development quality and profitability[5](index=5&type=chunk) - Gross profit margin, net profit margin, and net profit margin attributable to owners of the parent company all reached the Group's historical best levels[5](index=5&type=chunk) - AI-related revenue achieved significant results from scratch[5](index=5&type=chunk) Key Financial Indicators for the Six Months Ended June 30, 2025 | Indicator | 2025 (RMB Thousand) | 2024 (RMB Thousand) | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | 24,341,934 | 32,855,766 | (25.9%) | | Gross Profit | 1,129,873 | 1,142,231 | (1.1%) | | Gross Profit Margin | 4.6% | 3.5% | +31.4% | | Operating Profit | 356,122 | 307,310 | +15.9% | | Profit for the Period | 238,600 | 229,269 | +4.1% | | Profit Attributable to Equity Holders of the Company | 138,606 | 125,087 | +10.8% | | Net Cash from Operating Activities | 412,551 | 248,976 | +65.7% | [Self-Operated Trading Business and Smart Supply Chain Upgrade](index=3&type=section&id=Self-Operated%20Trading%20Business%20and%20Smart%20Supply%20Chain%20Upgrade) Self-operated trading business revenue decreased by 26.0% year-on-year, primarily due to strategic optimization of inefficient businesses, but revenue structure continued to improve with an increased proportion of member retail store revenue. The Group launched three major smart supply chain initiatives, deepened cooperation with leading brands, and achieved a significant 203.3% growth in consumer electronics O2O business - Revenue from the self-operated trading business segment was **RMB 23.96 billion**, a year-on-year decrease of **26.0%**, mainly due to strategic upgrades focusing on quality and efficiency improvement, and proactive optimization of some inefficient businesses[8](index=8&type=chunk) - The proportion of revenue from member retail stores further increased to **47.4%**, reflecting enhanced "short-chain" capabilities[8](index=8&type=chunk) - On February 28, 2025, three major smart supply chain initiatives were upgraded and launched: "Brand Direct Express Project," "Private Brand Ecosystem Project," and "Open Smart Supply Chain Project"[8](index=8&type=chunk) - In the consumer electronics industry, a cumulative total of **1,804 Apple O2O stores** were expanded, with O2O business scale growing by **203.3%** year-on-year[8](index=8&type=chunk) [AI+SaaS Product Implementation and Customer Operation Effectiveness](index=4&type=section&id=AI%2BSaaS%20Product%20Implementation%20and%20Customer%20Operation%20Effectiveness) The Group focused on the "AI+SaaS" core track, launching the "Qiancheng AI Super Store Manager" APP, integrating AI Agent functions, achieving an average improvement of over 30% in store operating efficiency. AI-related revenue accounted for approximately 20% of total service revenue, and private brand sales grew by 490.7% year-on-year, while continuously expanding new categories and channels - The "Qiancheng AI Super Store Manager" APP was officially launched in April 2025, fully integrating AI Agent function modules, capable of automatically completing **60% of daily store management tasks**[9](index=9&type=chunk) - AI+SaaS products entered the commercialization stage in May 2025, with member retail stores adopting AI tools achieving an average operating efficiency improvement of over **30%** and inventory turnover shortened by **15% to 20%**[9](index=9&type=chunk) - During the reporting period, AI-related revenue accounted for approximately **20% of total service revenue**[9](index=9&type=chunk) - In the first half of 2025, private brand sales exceeded **RMB 80 million**, a year-on-year increase of **490.7%**[10](index=10&type=chunk) - Service business segment revenue was **RMB 312 million**, with over **251,000 registered member retail stores** and over **35,000 paying SaaS+ users**[11](index=11&type=chunk) [AI Technology Strengthening and Ecosystem Cooperation](index=5&type=section&id=AI%20Technology%20Strengthening%20and%20Ecosystem%20Cooperation) The Group launched its "AI+ Strategy" ("One Cloud + Three Projects"), including the "Qiancheng Cloud AI" industry large model, AI+ Industry Platform Project, AI+ SaaS Service Project, and AI+ Smart Terminal Project. In August 2025, it achieved comprehensive full-stack AI cooperation with Alibaba Cloud to jointly build an AI+ industry new ecosystem in the sinking market - In the first half of 2025, the Group launched its AI+ Strategy, summarized as "One Cloud + Three Projects"[12](index=12&type=chunk) - The "Qiancheng Cloud AI" industry large model passed the national cyberspace administration's filing in May 2025, becoming one of the few vertical large models in China capable of adapting to rural commercial scenarios[12](index=12&type=chunk) - In August 2025, a comprehensive full-stack AI cooperation was established with Alibaba Cloud to jointly explore innovation and application prospects for artificial intelligence and digitalization solutions[13](index=13&type=chunk) - The two parties will jointly build a matrix of "Small Store Large Model Intelligent Agent," "AI Sales Intelligent Agent," "Sales Prediction Intelligent Agent," and "AI Customer Service Robot" to enhance the intelligent service capabilities of the S2b2c supply chain[13](index=13&type=chunk) [Corporate Influence and Organizational Capability Building](index=6&type=section&id=Corporate%20Influence%20and%20Organizational%20Capability%20Building) The Group actively practiced the rural revitalization strategy, fulfilled social responsibilities, gained recognition from government and society, and was honored as a "National Key Software Enterprise." Concurrently, it continuously optimized its organizational structure and talent mechanisms, providing a solid guarantee for long-term strategic goals - The Group actively practiced the rural revitalization strategy, fulfilled social responsibilities, and received full attention and recognition from governments at all levels and various sectors of society[14](index=14&type=chunk) - In the first half of 2025, the Company was honored as a "National Key Software Enterprise," "High-tech Enterprise," and was again listed on the "Fortune China 500" list[14](index=14&type=chunk) - Continuously optimized organizational structure, front-to-back office personnel ratio, improved organizational and talent mechanisms, strengthened cadre echelon building, one-position rotation, cadre rejuvenation, and key talent reserves[15](index=15&type=chunk) [Future Outlook and Strategic Focus](index=7&type=section&id=Future%20Outlook%20and%20Strategic%20Focus) The Group will continue to implement the "Quality and Efficiency Improvement, New Growth" policy, focusing on smart supply chain capability building, expanding new categories and channels, and deepening AI empowerment for member retail stores. Concurrently, it will adhere to the "Industrial Development + Capital Operation" dual-driven strategy, enhancing competitiveness through M&A, and is confident in achieving steady improvements in gross profit margin and net profit margin - In the second half of 2025, the Group will continue to implement the basic policy of "Quality and Efficiency Improvement, New Growth"[16](index=16&type=chunk) - Focus on smart supply chain capability building, expanding new categories (such as smart small home appliances, AI consumer electronics, robots, and elderly care health) and new channels (online, cross-border export, government, and enterprise procurement)[16](index=16&type=chunk) - Deepen comprehensive full-stack AI cooperation with Alibaba Cloud, accelerate AI Agent research and development and commercialization, and drive service revenue growth powered by AI+SaaS[17](index=17&type=chunk) - Adhere to the "Industrial Development + Capital Operation" dual-driven strategy, focusing on high-value "supply chain-type, channel network-type, AI-type" quality enterprise acquisitions[18](index=18&type=chunk) - The Group is confident in achieving steady improvements in gross profit margin and net profit margin in 2025, and plans to complete the capital reserve to cover losses, creating conditions for shareholder dividends[18](index=18&type=chunk) [Financial Performance Analysis](index=9&type=section&id=Financial%20Performance%20Analysis) [Revenue Analysis](index=9&type=section&id=Revenue%20Analysis) The Group's total revenue decreased by 25.9% year-on-year to RMB 24.34 billion, primarily due to strategic adjustments in the second half of 2024, optimization of inefficient businesses, and a high base in the first half of 2024. Self-operated trading business revenue decreased by 26.0%, and service business revenue decreased by 18.4%, but SaaS+ subscription revenue grew by 22.7% quarter-on-quarter - The Group's revenue decreased by **25.9%** year-on-year to **RMB 24,341.9 million**, mainly due to strategic adjustments, optimization of inefficient businesses, and a high base in the first half of 2024[19](index=19&type=chunk) Revenue from Self-Operated Trading Business Segment (For the Six Months Ended June 30) | Product Category | 2025 (RMB Thousand) | 2024 (RMB Thousand) | | :--- | :--- | :--- | | Consumer Electronics Products | 14,625,746 | 19,527,699 | | Home Appliances | 4,322,649 | 4,314,442 | | Agricultural Production Materials | 2,883,407 | 4,139,979 | | Transportation | 1,087,988 | 2,885,142 | | Home Furnishing and Building Materials | 764,842 | 992,089 | | Alcoholic Beverages | 147,665 | 390,431 | | Others | 122,927 | 135,233 | | **Total Self-Operated Trading Business Segment** | **23,955,224** | **32,385,015** | - Self-operated trading business revenue decreased by **26.0%**, mainly due to strategic upgrades, price declines in the consumer electronics industry, downturn in agricultural production materials market, fierce competition in new energy vehicles, and real estate cycle impacts[22](index=22&type=chunk) Revenue from Service Business Segment (For the Six Months Ended June 30) | Service Category | 2025 (RMB Thousand) | 2024 (RMB Thousand) | | :--- | :--- | :--- | | Store SaaS+ Subscriptions | 250,332 | 306,849 | | Merchant Solutions | 61,223 | 77,650 | | **Total Service Business Segment** | **311,555** | **384,499** | - Store SaaS+ subscription revenue decreased by **18.4%** year-on-year, but increased by **22.7%** quarter-on-quarter compared to the second half of 2024, mainly due to AI system upgrade concessions[23](index=23&type=chunk) [Cost of Revenue, Gross Profit, and Gross Profit Margin Analysis](index=11&type=section&id=Cost%20of%20Revenue%2C%20Gross%20Profit%2C%20and%20Gross%20Profit%20Margin%20Analysis) Cost of revenue decreased by 26.8% in line with revenue, gross profit remained largely flat, while gross profit margin significantly increased by 1.1 percentage points to 4.6%, a 31.4% year-on-year growth, primarily due to strategic upgrades, optimization of industry structure, and deepened brand cooperation - Cost of revenue decreased by **26.8%** to **RMB 23,212.1 million**, mainly due to the decrease in revenue[24](index=24&type=chunk) - Gross profit remained largely flat, decreasing by **1.1%** from **RMB 1,142.2 million** to **RMB 1,129.9 million**[24](index=24&type=chunk) - Gross profit margin increased by **1.1 percentage points** from **3.5% to 4.6%**, a year-on-year growth of **31.4%**, mainly due to strategic upgrades, abandonment of inefficient businesses, and optimization of industry structure[24](index=24&type=chunk) [Expense Analysis](index=11&type=section&id=Expense%20Analysis) Selling and marketing expenses decreased by 19.2%, and administrative and other operating expenses decreased by 8.7%, both benefiting from cost reduction and efficiency improvement measures. However, impairment losses on trade and other receivables increased by 48.3%, mainly due to increased provision for expected credit losses on older receivables. R&D costs decreased by 23.4% due to the adoption of AI to accelerate R&D efficiency and slowing down the upgrade pace of some mature product lines - Selling and marketing expenses decreased by **19.2%** to **RMB 462.4 million**, mainly due to a decrease in promotional service fees[26](index=26&type=chunk) - Administrative and other operating expenses decreased by **8.7%** to **RMB 146.2 million**, mainly due to effective implementation of cost reduction and efficiency improvement measures[28](index=28&type=chunk) - Impairment losses on trade and other receivables increased by **48.3%** to **RMB 199.5 million**, mainly due to increased provision for expected credit losses on some older receivables[29](index=29&type=chunk) - Research and development costs decreased by **23.4%** to **RMB 29.6 million**, mainly due to attempts to use AI to accelerate R&D efficiency and slowing down the upgrade pace of some mature product lines[30](index=30&type=chunk) [Other Income and Gains](index=12&type=section&id=Other%20Income%20and%20Gains) Other income decreased by 27.9%, primarily due to reduced government subsidies. Net other gains remained largely flat - Other income decreased by **27.9%** to **RMB 17.5 million**, mainly due to a decrease in government subsidies[31](index=31&type=chunk) - Net other gains remained largely flat at **RMB 46.5 million**[32](index=32&type=chunk) [Net Finance Costs](index=12&type=section&id=Net%20Finance%20Costs) Net finance costs increased from a net expense of RMB 34.7 million to a net expense of RMB 65.5 million, primarily due to a decrease in bank deposit interest rates - Net finance costs increased from a net expense of **RMB 34.7 million** to a net expense of **RMB 65.5 million**[33](index=33&type=chunk) - Primarily due to a decrease in bank deposit interest rates[33](index=33&type=chunk) [Income Tax and Profit](index=12&type=section&id=Income%20Tax%20and%20Profit) Income tax increased by 4.4% to RMB 46.7 million, with an effective tax rate of 16.4%. Profit attributable to equity holders of the Company increased by 10.8% to RMB 138.6 million, and profit for the period increased by 4.1% to RMB 238.6 million, primarily benefiting from improved gross profit margin and reduced expenses - Income tax increased by **4.4%** to **RMB 46.7 million**, mainly due to an increase in profit before tax year-on-year[34](index=34&type=chunk) - The effective tax rate calculated on profit before tax for the six months ended June 30, 2025, was **16.4%**[35](index=35&type=chunk) - Profit attributable to equity holders of the Company increased by **10.8%** to **RMB 138.6 million**[36](index=36&type=chunk) - Profit for the period increased by **4.1%** to **RMB 238.6 million**, mainly due to improved gross profit margin and significant reduction in expenses[37](index=37&type=chunk) [Balance Sheet and Cash Flow Key Items](index=13&type=section&id=Balance%20Sheet%20and%20Cash%20Flow%20Key%20Items) Cash and cash equivalents significantly increased to RMB 3.96 billion, indicating ample working capital. Inventory remained largely flat with a turnover period of 16 days. Trade payables and bills payable increased by 14.3%, mainly due to enhanced supply chain capabilities and seasonal procurement. Prepayments, deposits, and other receivables increased by 9.1%, primarily affected by seasonal stocking. Capital expenditures increased due to property decoration and equipment purchases - Cash and cash equivalents increased to **RMB 3,961.4 million**, indicating the Group has ample working capital[38](index=38&type=chunk) - Inventory remained largely flat at **RMB 2,051.2 million**, with an inventory turnover period of **16 days**[39](index=39&type=chunk)[40](index=40&type=chunk) - Trade payables and bills payable increased by **14.3%** to **RMB 16,732.3 million**, mainly due to enhanced supply chain capabilities and seasonal procurement impacts[41](index=41&type=chunk) - Prepayments, deposits, and other receivables increased by **9.1%** to **RMB 9,883.3 million**, mainly due to seasonal stocking in some industries[42](index=42&type=chunk) - Capital expenditures increased to **RMB 18.4 million**, mainly due to increased property decoration and equipment purchases[43](index=43&type=chunk) [Employees and Material Investments](index=14&type=section&id=Employees%20and%20Material%20Investments) As of June 30, 2025, the Group employed 3,633 staff, with remuneration based on employee performance and market levels. There were no material investments, acquisitions, or disposals of subsidiaries, associates, and joint ventures during the reporting period - As of June 30, 2025, the Group employed **3,633 staff**, with remuneration determined by employee performance and market salary levels[44](index=44&type=chunk) - For the six months ended June 30, 2025, the Group had no material investments, material acquisitions, or disposals of subsidiaries, associates, and joint ventures[45](index=45&type=chunk) [Financial Statements](index=15&type=section&id=Financial%20Statements) [Consolidated Statement of Profit or Loss (Unaudited)](index=15&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss%20(Unaudited)) This consolidated statement of profit or loss presents the Group's unaudited financial performance for the six months ended June 30, 2025, including key indicators such as revenue, gross profit, operating profit, and profit attributable to equity holders of the Company Consolidated Statement of Profit or Loss (Unaudited) for the Six Months Ended June 30, 2025 | Indicator | 2025 (RMB Thousand) | 2024 (RMB Thousand) | | :--- | :--- | :--- | | Revenue | 24,341,934 | 32,855,766 | | Cost of Revenue | (23,212,061) | (31,713,535) | | Gross Profit | 1,129,873 | 1,142,231 | | Operating Profit | 356,122 | 307,310 | | Profit for the Period | 238,600 | 229,269 | | Profit Attributable to Equity Holders of the Company | 138,606 | 125,087 | | Basic Earnings Per Share (RMB) | 0.24 | 0.23 | | Diluted Earnings Per Share (RMB) | 0.24 | 0.23 | [Consolidated Statement of Profit or Loss and Other Comprehensive Income (Unaudited)](index=16&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income%20(Unaudited)) This consolidated statement of profit or loss and other comprehensive income shows the Group's profit for the period and other comprehensive income for the six months ended June 30, 2025, primarily including exchange differences on translating financial statements of subsidiaries with functional currencies other than RMB Consolidated Statement of Profit or Loss and Other Comprehensive Income (Unaudited) for the Six Months Ended June 30, 2025 | Indicator | 2025 (RMB Thousand) | 2024 (RMB Thousand) | | :--- | :--- | :--- | | Profit for the Period | 238,600 | 229,269 | | Other Comprehensive Income for the Period (Net of Tax) | (19) | 29 | | Total Comprehensive Income for the Period | 238,581 | 229,298 | | Total Comprehensive Income Attributable to Equity Holders of the Company | 138,587 | 125,116 | [Consolidated Statement of Financial Position (Unaudited)](index=17&type=section&id=Consolidated%20Statement%20of%20Financial%20Position%20(Unaudited)) This consolidated statement of financial position presents the Group's assets, liabilities, and equity as of June 30, 2025, reflecting major components such as non-current assets, current assets, current liabilities, and net assets Consolidated Statement of Financial Position (Unaudited) as of June 30, 2025 | Indicator | June 30, 2025 (RMB Thousand) | December 31, 2024 (RMB Thousand) | | :--- | :--- | :--- | | Non-current Assets | 2,403,968 | 2,698,152 | | Current Assets | 28,646,390 | 25,792,988 | | Current Liabilities | 21,003,937 | 18,631,008 | | Net Current Assets | 7,642,453 | 7,161,980 | | Total Assets Less Current Liabilities | 10,046,421 | 9,860,132 | | Non-current Liabilities | 210,863 | 249,632 | | Net Assets | 9,835,558 | 9,610,500 | | Total Equity Attributable to Equity Holders of the Company | 7,935,686 | 7,787,230 | | Total Equity | 9,835,558 | 9,610,500 | [Condensed Consolidated Statement of Cash Flows (Unaudited)](index=19&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows%20(Unaudited)) This condensed consolidated statement of cash flows outlines the Group's cash flow situation for the six months ended June 30, 2025, including net cash from operating, investing, and financing activities, as well as cash and cash equivalents at the end of the period Condensed Consolidated Statement of Cash Flows (Unaudited) for the Six Months Ended June 30, 2025 | Indicator | 2025 (RMB Thousand) | 2024 (RMB Thousand) | | :--- | :--- | :--- | | Net Cash from Operating Activities | 412,551 | 248,976 | | Net Cash from / (Used in) Investing Activities | 731,789 | (1,006,909) | | Net Cash from Financing Activities | 35,874 | 482,645 | | Net Increase / (Decrease) in Cash and Cash Equivalents | 1,180,214 | (275,288) | | Cash and Cash Equivalents at End of Period | 3,961,416 | 3,473,509 | [Notes to the Financial Statements](index=20&type=section&id=Notes%20to%20the%20Financial%20Statements) [General Information and Basis of Preparation](index=20&type=section&id=General%20Information%20and%20Basis%20of%20Preparation) The Company was established in China in 2010 and listed on the HKEX in 2022, primarily engaged in commodity sales and smart commercial services. The interim financial information is unaudited, prepared in accordance with HKEX Listing Rules and IAS 34, and approved for issue on August 28, 2025 - Huitongda Network Co., Ltd. was established in China on December 6, 2010, and its H shares were listed on the Main Board of the Hong Kong Stock Exchange on February 18, 2022[51](index=51&type=chunk) - The Group is primarily engaged in the sale of a full range of commodities and provides smart commercial and marketing subscription services, merchant solutions, and other related services in China[51](index=51&type=chunk) - This unaudited interim financial information is extracted from the Group's interim financial report for the six months ended June 30, 2025, prepared in accordance with the HKEX Listing Rules and International Accounting Standard 34[52](index=52&type=chunk) [Changes in Accounting Policies](index=21&type=section&id=Changes%20in%20Accounting%20Policies) The Group has applied the amendments to IAS 21 "The Effects of Changes in Foreign Exchange Rates – Lack of Exchangeability," but it has no material impact on this interim report as no transactions in non-exchangeable foreign currencies were conducted. No other new standards or interpretations not yet effective were applied in this period - The Group has applied the amendments to International Accounting Standard 21 "The Effects of Changes in Foreign Exchange Rates – Lack of Exchangeability" to the interim financial report for the current accounting period[54](index=54&type=chunk) - As the Group did not conduct any foreign currency transactions that are not exchangeable into other currencies, these amendments have no material impact on this interim report[54](index=54&type=chunk) [Revenue and Segment Reporting](index=21&type=section&id=Revenue%20and%20Segment%20Reporting) The Group's revenue primarily derives from commodity sales, store SaaS+ subscriptions, merchant solutions, and other services, managed across three reportable segments: trading business, service business, and others, with gross profit as the basis for segment performance evaluation Disaggregation of Revenue from Contracts with Customers by Major Business Line (For the Six Months Ended June 30) | Business Line | 2025 (RMB Thousand) | 2024 (RMB Thousand) | | :--- | :--- | :--- | | Revenue from Sales of Goods | 23,955,224 | 32,385,015 | | Revenue from Store SaaS+ Subscriptions | 250,332 | 306,849 | | Revenue from Merchant Solutions | 61,223 | 77,650 | | Revenue from Other Services | 75,155 | 86,252 | | **Total** | **24,341,934** | **32,855,766** | - The Group manages its businesses across three reportable segments: trading business, service business, and others[58](index=58&type=chunk)[59](index=59&type=chunk)[60](index=60&type=chunk)[61](index=61&type=chunk) - The measure for reportable segment profit is gross profit[62](index=62&type=chunk) Reportable Segment Revenue and Profit (For the Six Months Ended June 30) | Segment | 2025 Revenue (RMB Thousand) | 2025 Profit (RMB Thousand) | 2024 Revenue (RMB Thousand) | 2024 Profit (RMB Thousand) | | :--- | :--- | :--- | :--- | :--- | | Trading Business | 23,955,224 | 809,938 | 32,385,207 | 757,003 | | Service Business | 311,555 | 258,770 | 384,499 | 318,828 | | Others | 75,155 | 61,165 | 86,060 | 66,400 | | **Total** | **24,341,934** | **1,129,873** | **32,855,766** | **1,142,231** | [Other Income and Net Other Gains (Notes)](index=23&type=section&id=Other%20Income%20and%20Net%20Other%20Gains%20(Notes)) This note details the composition of other income, primarily government grants, and net other gains, including realized and unrealized net gains on financial assets measured at fair value through profit or loss, and net loss/gain on disposal of interests in subsidiaries Other Income (For the Six Months Ended June 30) | Item | 2025 (RMB Thousand) | 2024 (RMB Thousand) | | :--- | :--- | :--- | | Government Grants | 16,970 | 23,564 | | Others | 489 | 653 | | **Total** | **17,459** | **24,217** | Net Other Gains (For the Six Months Ended June 30) | Item | 2025 (RMB Thousand) | 2024 (RMB Thousand) | | :--- | :--- | :--- | | Realized and Unrealized Net Gains on Financial Assets Measured at Fair Value Through Profit or Loss | 46,251 | 39,429 | | Net (Loss) / Gain on Disposal of Interests in Subsidiaries | (547) | 2,477 | | Impairment Loss on Investment Properties | (2,000) | (3,414) | | Others | 3,006 | 8,684 | | **Total** | **46,475** | **46,522** | [Profit Before Tax (Notes)](index=24&type=section&id=Profit%20Before%20Tax%20(Notes)) This note details the composition of profit before tax, including net finance costs, cost of inventories recognized as an expense, depreciation expense, research and development costs, credit loss provision for trade and other receivables, and provision for inventory write-downs Net Finance Costs (For the Six Months Ended June 30) | Item | 2025 (RMB Thousand) | 2024 (RMB Thousand) | | :--- | :--- | :--- | | Interest Income from Bank Deposits | (55,077) | (99,051) | | Interest Expense on Discounted Bills and Bank Loans | 118,697 | 131,707 | | Net Finance Costs | 65,474 | 34,714 | Other Items Deducted / (Credited) from Profit Before Tax (For the Six Months Ended June 30) | Item | 2025 (RMB Thousand) | 2024 (RMB Thousand) | | :--- | :--- | :--- | | Cost of Inventories Recognized as an Expense | 23,108,531 | 31,589,704 | | Depreciation Expense (Total) | 28,998 | 33,003 | | Research and Development Costs | 29,573 | 38,586 | | Credit Loss Provision for Trade and Other Receivables | 199,542 | 134,468 | | Provision for Inventory Write-downs | 14,956 | 14,383 | [Income Tax (Notes)](index=25&type=section&id=Income%20Tax%20(Notes)) This note provides the detailed composition of income tax, including current tax and deferred tax, and explains the basis for calculating China income tax and Hong Kong profits tax Income Tax (For the Six Months Ended June 30) | Item | 2025 (RMB Thousand) | 2024 (RMB Thousand) | | :--- | :--- | :--- | | Current Tax (Provision for the Period) | 80,412 | 86,799 | | Deferred Tax (Origination and Reversal of Temporary Differences) | (33,685) | (42,046) | | **Total** | **46,727** | **44,753** | - China income tax provision is determined according to relevant China income tax rules and regulations, and Hong Kong profits tax provision is calculated at an estimated annual effective tax rate of **16.5%**[69](index=69&type=chunk) [Earnings Per Share (Notes)](index=25&type=section&id=Earnings%20Per%20Share%20(Notes)) This note calculates the Company's basic and diluted earnings per share for the six months ended June 30, 2025, and lists the weighted average number of ordinary shares used in the calculation, including the impact of treasury shares and restricted share unit schemes - Basic earnings per share was **RMB 0.24** (2024: **RMB 0.23**), and diluted earnings per share was **RMB 0.24** (2024: **RMB 0.23**)[70](index=70&type=chunk)[71](index=71&type=chunk) Weighted Average Number of Ordinary Shares at Period End for Basic Earnings Per Share (For the Six Months Ended June 30) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Ordinary Shares Issued at Beginning of Period | 562,569,837 | 562,569,837 | | Treasury Shares at Beginning of Period | (8,322,910) | (3,450,400) | | Effect of Repurchase of Own Shares | (29,825) | (4,504,354) | | **Weighted Average Number** | **554,217,102** | **554,615,083** | Weighted Average Number of Ordinary Shares at Period End for Diluted Earnings Per Share (For the Six Months Ended June 30) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Weighted Average Number of Ordinary Shares at Period End for Basic Earnings Per Share | 554,217,102 | 554,615,083 | | Effect of Outstanding Shares under Restricted Share Unit Scheme | – | 261,330 | | **Diluted Earnings Weighted Average Number** | **554,217,102** | **554,876,413** | [Financial Assets Measured at Fair Value Through Profit or Loss](index=26&type=section&id=Financial%20Assets%20Measured%20at%20Fair%20Value%20Through%20Profit%20or%20Loss) This note details the Group's financial assets measured at fair value through profit or loss, including unlisted investments (primarily equity in technology and new energy industry companies) and structured deposits and wealth management products issued by various Chinese financial institutions Financial Assets Measured at Fair Value Through Profit or Loss (As of June 30, 2025, and December 31, 2024) | Item | June 30, 2025 (RMB Thousand) | December 31, 2024 (RMB Thousand) | | :--- | :--- | :--- | | Unlisted Investments (Non-current Portion) | 386,648 | 386,308 | | Structured Deposits and Wealth Management Products (Non-current Portion) | 350,870 | 573,047 | | Structured Deposits and Wealth Management Products (Current Portion) | 3,882,366 | 3,516,166 | | **Total** | **4,619,884** | **4,475,521** | - Unlisted investments represent the Group's equity interests in companies primarily engaged in the technology and new energy industries[73](index=73&type=chunk) [Inventories (Notes)](index=26&type=section&id=Inventories%20(Notes)) This note provides the detailed composition of inventories, including goods and goods in transit, and provision for inventory write-downs. As of June 30, 2025, some inventories were pledged as collateral for bills payable and bank loans Inventories (As of June 30, 2025, and December 31, 2024) | Item | June 30, 2025 (RMB Thousand) | December 31, 2024 (RMB Thousand) | | :--- | :--- | :--- | | Goods | 2,049,373 | 2,000,080 | | Goods in Transit | 104,488 | 126,446 | | Inventory Write-downs | (102,663) | (93,801) | | **Total** | **2,051,198** | **2,032,725** | - During the six months ended June 30, 2025, the Group recognized write-downs of **RMB 14,956,000** for inventories where net realizable value was lower than carrying amount[75](index=75&type=chunk) - As of June 30, 2025, inventories of **RMB 39,044,000** were pledged as collateral for bills payable, bank loans, and other borrowings[75](index=75&type=chunk) [Trade and Bills Receivables](index=27&type=section&id=Trade%20and%20Bills%20Receivables) This note provides the detailed composition of trade and bills receivables and their aging analysis, showing that most receivables are expected to be recovered within one year Trade and Bills Receivables (As of June 30, 2025, and December 31, 2024) | Item | June 30, 2025 (RMB Thousand) | December 31, 2024 (RMB Thousand) | | :--- | :--- | :--- | | Trade Receivables | 1,961,112 | 1,875,132 | | Bills Receivable | 1,065,874 | 1,192,392 | | Less: Loss Provision | (114,677) | (68,310) | | **Total** | **2,912,309** | **2,999,214** | Aging Analysis of Trade and Bills Receivables (As of June 30, 2025, and December 31, 2024) | Aging | June 30, 2025 (RMB Thousand) | December 31, 2024 (RMB Thousand) | | :--- | :--- | :--- | | Within 3 Months | 2,421,601 | 2,536,298 | | Over 3 Months but Within 12 Months | 370,499 | 191,498 | | Over 12 Months | 120,209 | 271,418 | | **Total** | **2,912,309** | **2,999,214** | [Prepayments, Deposits, and Other Receivables](index=27&type=section&id=Prepayments%2C%20Deposits%2C%20and%20Other%20Receivables) This note lists the detailed composition of prepayments, recoverable VAT, refunds due from suppliers, and other receivables, net of loss provisions Prepayments, Deposits, and Other Receivables (As of June 30, 2025, and December 31, 2024) | Item | June 30, 2025 (RMB Thousand) | December 31, 2024 (RMB Thousand) | | :--- | :--- | :--- | | Prepayments | 8,805,464 | 8,146,179 | | Recoverable VAT | 179,811 | 147,077 | | Refunds Due from Suppliers | 750,606 | 586,345 | | Amounts Due from Former Subsidiaries | 451,288 | 442,848 | | Interest Receivable | 59,306 | 63,482 | | Other Deposits and Receivables | 422,691 | 309,511 | | Less: Loss Provision | (785,880) | (639,104) | | **Total** | **9,883,286** | **9,056,338** | [Cash and Cash Equivalents, Restricted Deposits, Pledged Deposits, and Time Deposits](index=28&type=section&id=Cash%20and%20Cash%20Equivalents%2C%20Restricted%20Deposits%2C%20Pledged%20Deposits%2C%20and%20Time%20Deposits) This note details the Group's bank cash, restricted deposits related to litigation, pledged deposits as collateral for bills payable and bank loans, and current and non-current time deposits Cash and Cash Equivalents (As of June 30, 2025, and December 31, 2024) | Item | June 30, 2025 (RMB Thousand) | December 31, 2024 (RMB Thousand) | | :--- | :--- | :--- | | Bank Cash | 3,961,416 | 2,781,257 | Restricted Deposits (As of June 30, 2025, and December 31, 2024) | Item | June 30, 2025 (RMB Thousand) | December 31, 2024 (RMB Thousand) | | :--- | :--- | :--- | | Restricted Deposits Related to Litigation | 160,979 | 173,523 | | Other Restricted Deposits | 2,523 | 2,587 | | **Total** | **163,502** | **176,110** | Pledged Deposits (As of June 30, 2025, and December 31, 2024) | Item | June 30, 2025 (RMB Thousand) | December 31, 2024 (RMB Thousand) | | :--- | :--- | :--- | | Current Portion | 5,690,022 | 4,454,957 | | Non-current Portion | 1,050,000 | 780,000 | | **Total** | **6,740,022** | **5,234,957** | Time Deposits (As of June 30, 2025, and December 31, 2024) | Item | June 30, 2025 (RMB Thousand) | December 31, 2024 (RMB Thousand) | | :--- | :--- | :--- | | Current Portion | 100,000 | 770,000 | | Non-current Portion | 100,000 | 470,000 | | **Total** | **200,000** | **1,240,000** | [Trade and Bills Payables and Contract Liabilities](index=29&type=section&id=Trade%20and%20Bills%20Payables%20and%20Contract%20Liabilities) This note details the composition and aging analysis of trade and bills payables, as well as the opening balance, decrease due to revenue recognition, and increase due to advance payments received for contract liabilities Trade and Bills Payables (As of June 30, 2025, and December 31, 2024) | Item | June 30, 2025 (RMB Thousand) | December 31, 2024 (RMB Thousand) | | :--- | :--- | :--- | | Trade Payables | 1,060,405 | 1,070,684 | | Bills Payable | 15,671,915 | 13,566,101 | | **Total** | **16,732,320** | **14,636,785** | Aging Analysis of Trade and Bills Payables (As of June 30, 2025, and December 31, 2024) | Aging | June 30, 2025 (RMB Thousand) | December 31, 2024 (RMB Thousand) | | :--- | :--- | :--- | | Within 3 Months | 8,065,723 | 7,628,373 | | 3 to 12 Months | 8,494,880 | 6,889,883 | | Over 12 Months | 171,717 | 118,529 | | **Total** | **16,732,320** | **14,636,785** | Contract Liabilities (As of June 30, 2025, and December 31, 2024) | Item | June 30, 2025 (RMB Thousand) | December 31, 2024 (RMB Thousand) | | :--- | :--- | :--- | | Balance at Beginning of Year / Period | 2,256,326 | 2,426,677 | | Decrease in Contract Liabilities Due to Revenue Recognized from Opening Balance During Year / Period | (1,816,311) | (2,149,522) | | Increase in Contract Liabilities Due to Advance Payments Received During Year / Period | 1,899,826 | 2,091,724 | | Decrease in Contract Liabilities Due to Disposal of Interests in Subsidiaries | (2,491) | (112,553) | | **Balance at End of Year / Period** | **2,337,350** | **2,256,326** | [Capital, Reserves, and Dividends](index=30&type=section&id=Capital%2C%20Reserves%2C%20and%20Dividends) This note states that the Board did not recommend an interim dividend. It details the grant, vesting conditions, and related expenses of the Restricted Share Unit Scheme, Employee Share Purchase Plan, and 2024 H Share Option Scheme, and reports on treasury shares repurchased during the period - The Company's directors did not recommend the payment of any dividends during the period[83](index=83&type=chunk) - The Restricted Share Unit Scheme was approved by shareholders on November 28, 2022, granting shares to directors, supervisors, and employees[84](index=84&type=chunk) - For the six months ended June 30, 2025, the total expense recognized in the consolidated statement of profit or loss for the Restricted Share Unit Scheme was **RMB 5.672 million**[86](index=86&type=chunk) - The 2024 H Share Option Scheme was approved by shareholders on November 12, 2024, and **18,000,000 share options** were granted on May 21, 2025, with an exercise price of **HKD 19.30**[89](index=89&type=chunk) - For the six months ended June 30, 2025, the total expense recognized in the consolidated statement of profit or loss for the Share Option Scheme was **RMB 3.895 million**[90](index=90&type=chunk) - In January 2025, the Company repurchased **32,400 of its own shares** for a total price of **HKD 480,915** (approximately **RMB 454,000**), recognized as treasury shares[91](index=91&type=chunk) [Other Information](index=33&type=section&id=Other%20Information) [Securities Transactions and Dividend Policy](index=33&type=section&id=Securities%20Transactions%20and%20Dividend%20Policy) During the reporting period, neither the Company nor its subsidiaries purchased, sold, or redeemed any listed securities, and no treasury shares were held at period-end. The Board did not recommend an interim dividend for the six months ended June 30, 2025 - During the reporting period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[92](index=92&type=chunk) - As of the end of the reporting period, the Company did not hold any treasury shares[93](index=93&type=chunk) - The Board did not recommend the payment of an interim dividend for the six months ended June 30, 2025[94](index=94&type=chunk) [Corporate Governance and Audit](index=33&type=section&id=Corporate%20Governance%20and%20Audit) The Company is committed to maintaining good corporate governance, complying with the Corporate Governance Code and the Model Code for Securities Transactions. The Audit Committee has reviewed the interim results and accounting principles, and the interim financial report has been reviewed by KPMG - The Company is committed to maintaining good corporate governance and has consistently complied with the code provisions of the Corporate Governance Code[95](index=95&type=chunk)[96](index=96&type=chunk) - All directors and supervisors confirmed their compliance with the Model Code for Securities Transactions during the reporting period[97](index=97&type=chunk) - The Audit Committee has reviewed the Company's unaudited interim results for the six months ended June 30, 2025, and the accounting principles and practices adopted by the Group[98](index=98&type=chunk) - The interim financial report for the six months ended June 30, 2025, has been reviewed by KPMG[99](index=99&type=chunk) [Post-Reporting Period Events and Report Publication](index=34&type=section&id=Post-Reporting%20Period%20Events%20and%20Report%20Publication) As of the date of this announcement, no significant post-reporting period events affecting the Group have occurred. The interim results announcement and interim report will be published on the HKEX website and the Company's website in due course - No significant post-reporting period events affecting the Group occurred after June 30, 2025, and up to the date of this announcement[100](index=100&type=chunk) - This interim results announcement and the interim report containing all information required by the Listing Rules will be published on the HKEX website and the Company's website in due course[101](index=101&type=chunk) [Definitions](index=35&type=section&id=Definitions) [Terminology Definitions](index=35&type=section&id=Terminology%20Definitions) This section provides definitions for key terms used in this announcement to ensure readers have a clear understanding of the report's content - In this announcement, unless the context otherwise requires, definitions are provided for terms such as Audit Committee, Board, Corporate Governance Code, China, Company, Directors, Group, H Shares, HKD, Hong Kong, HKEX, Listing Rules, Model Code, Reporting Period, RMB, SaaS, Store SaaS+, Shareholders, Subsidiaries, Supervisors, and Percentage[102](index=102&type=chunk)[104](index=104&type=chunk)

[Interim Results Announcement](index=1&type=section&id=Interim%20Results%20Announcement) [Announcement Details](index=1&type=section&id=Announcement%20Details) The Board of Directors of Radiance Holdings (Group) Company Limited is pleased to announce the unaudited interim condensed consolidated results for the six months ended June 30, 2025, which have been reviewed by the audit committee - Radiance Holdings (Group) Company Limited announced its unaudited interim condensed consolidated 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[3](index=3&type=chunk) [Interim Condensed Consolidated Financial Statements](index=2&type=section&id=Interim%20Condensed%20Consolidated%20Financial%20Statements) [Interim Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=2&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For the six months ended June 30, 2025, the company's revenue significantly decreased by 60.9% to RMB 6,410.4 million, while gross profit remarkably increased by 991.7% to RMB 850.1 million, net loss narrowed by 85.3% year-on-year to RMB 283.6 million, and basic loss per share was RMB 0.06 Summary of Interim Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income | Metric | Six Months Ended June 30, 2025 (RMB thousands) | Six Months Ended June 30, 2024 (RMB thousands) | Change | | :--- | :--- | :--- | :--- | | Revenue | 6,410,438 | 16,382,985 | -60.9% | | Cost of sales | (5,560,380) | (16,305,117) | -65.9% | | Gross profit | 850,058 | 77,868 | +991.7% | | (Loss)/Profit before tax | (152,245) | (1,366,639) | +88.9% (loss narrowed) | | Income tax expense | (131,386) | (560,400) | -76.6% | | (Loss)/Profit for the period | (283,631) | (1,927,039) | +85.3% (loss narrowed) | | (Loss)/Profit attributable to owners of the parent | (233,096) | (2,026,425) | +88.5% (loss narrowed) | | Basic and diluted (loss)/earnings per share | RMB (0.06) | RMB (0.50) | +88.0% (loss narrowed) | [Interim Condensed Consolidated Statement of Financial Position](index=4&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the company's total assets were RMB 91,831.7 million, a 5.0% decrease from the end of 2024. Net current assets remained stable at approximately RMB 13,375.7 million. Total debt slightly decreased by 3.5% to RMB 23,741.3 million, with a net gearing ratio of 93.0% Summary of Interim Condensed Consolidated Statement of Financial Position | Metric | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | Change | | :--- | :--- | :--- | :--- | | Total non-current assets | 29,643,936 | 30,042,100 | -1.3% | | Total current assets | 62,187,812 | 66,615,246 | -6.6% | | Total current liabilities | 48,812,115 | 53,219,773 | -8.3% | | Net current assets | 13,375,697 | 13,395,473 | -0.1% | | Total assets less current liabilities | 43,019,633 | 43,437,573 | -1.0% | | Total non-current liabilities | 19,190,740 | 19,310,059 | -0.6% | | Net assets | 23,828,893 | 24,127,514 | -1.2% | | Total equity | 23,828,893 | 24,127,514 | -1.2% | [Notes to the Interim Condensed Consolidated Financial Information](index=7&type=section&id=Notes%20to%20the%20Interim%20Condensed%20Consolidated%20Financial%20Information) [Basis of Preparation and Going Concern](index=7&type=section&id=Basis%20of%20Preparation%20and%20Going%20Concern) The interim financial information is prepared in accordance with IAS 34 and should be read in conjunction with the annual consolidated financial statements. Despite a net loss and short-term borrowings exceeding cash, the Board believes the Group has sufficient working capital to continue as a going concern after implementing measures like accelerating pre-sales, monitoring construction, seeking refinancing, and controlling capital expenditure, though real estate market volatility presents uncertainties - The interim condensed consolidated financial information is prepared in accordance with International Accounting Standard 34 and should be read in conjunction with the annual consolidated financial statements for the year ended December 31, 2024[9](index=9&type=chunk) - The Group recorded a **net loss of RMB 283,631,000** for the six months ended June 30, 2025, with short-term borrowings of **RMB 6,739,901,000** and cash and cash equivalents of **RMB 1,151,180,000**, indicating significant going concern uncertainties[10](index=10&type=chunk) - The Board has implemented several measures to ensure sufficient working capital, including accelerating pre-sales and collections, monitoring construction progress, seeking refinancing for borrowings, and controlling significant capital expenditures, deeming the preparation of financial information on a going concern basis appropriate[11](index=11&type=chunk)[12](index=12&type=chunk) [Changes in Accounting Policies and Disclosures](index=8&type=section&id=Changes%20in%20Accounting%20Policies%20and%20Disclosures) This period's financial information first adopted the revised IFRS, where IAS 21 (amended) regarding lack of exchangeability had no impact on the Group's interim condensed consolidated financial information, as all Group transaction currencies are exchangeable - The accounting policies adopted in preparing the interim condensed consolidated financial information are consistent with those of the annual consolidated financial statements, except for the first-time adoption of revised International Financial Reporting Standards[13](index=13&type=chunk) - IAS 21 (amended) regarding lack of exchangeability has no impact on the interim condensed consolidated financial information, as all the Group's transaction currencies are exchangeable[14](index=14&type=chunk) [Operating Segment and Geographical Information](index=9&type=section&id=Operating%20Segment%20and%20Geographical%20Information) The Group primarily operates in property development and sales, which is its sole reportable operating segment. No geographical information is presented as all revenue and significant non-current assets are from mainland China. No single customer contributed over 10% of revenue during the period - Property development and sales is the Group's sole reportable operating segment, with property leasing and hotel service management consulting services contributing insignificantly[15](index=15&type=chunk) - All of the Group's revenue and significant non-current assets are derived from mainland China, thus no geographical information is presented[16](index=16&type=chunk) - During the period, sales to any single customer or group of customers under common control did not account for 10% or more of the Group's revenue[17](index=17&type=chunk) [Revenue, Other Income and Gains Analysis](index=10&type=section&id=Revenue%2C%20Other%20Income%20and%20Gains%20Analysis) Total revenue for the period was RMB 6,410.4 million, a 60.9% year-on-year decrease, primarily due to a significant decline in property sales revenue. Property leasing revenue slightly increased by 3.8%, hotel services contributed RMB 46.5 million for the first time, and other income and gains slightly rose to RMB 14.6 million Revenue Analysis | Revenue Source | Six Months Ended June 30, 2025 (RMB thousands) | Six Months Ended June 30, 2024 (RMB thousands) | Change | | :--- | :--- | :--- | :--- | | Total revenue from contracts with customers | 6,208,352 | 16,188,320 | -61.6% | | - Property sales | 6,160,779 | 16,186,142 | -61.9% | | - Hotel services | 46,536 | – | N/A | | - Management consulting services | 1,037 | 2,178 | -52.4% | | Property leasing income | 202,086 | 194,665 | +3.8% | | **Total Revenue** | **6,410,438** | **16,382,985** | **-60.9%** | Other Income and Gains Analysis | Item | Six Months Ended June 30, 2025 (RMB thousands) | Six Months Ended June 30, 2024 (RMB thousands) | Change | | :--- | :--- | :--- | :--- | | Forfeiture of deposits | 3,499 | 9,535 | -63.3% | | Subsidy income | 2,226 | 1,502 | +48.2% | | Exchange gains | 8,639 | – | N/A | | **Total** | **14,604** | **12,162** | **+20.1%** | [Finance Costs](index=11&type=section&id=Finance%20Costs) Finance costs for the period increased by 21.9% to RMB 143.5 million, primarily due to increased interest expenses from contract revenue, despite a decrease in interest on loans and borrowings Finance Costs Analysis | Item | Six Months Ended June 30, 2025 (RMB thousands) | Six Months Ended June 30, 2024 (RMB thousands) | Change | | :--- | :--- | :--- | :--- | | Interest on loans and borrowings | 596,621 | 753,994 | -20.9% | | Interest expense arising from contract revenue | 243,631 | 146,290 | +66.5% | | Less: Interest capitalized | (696,930) | (782,741) | -11.0% | | **Total Finance Costs** | **143,490** | **117,723** | **+21.9%** | [Loss Before Tax and Income Tax Expense](index=12&type=section&id=Profit%2F%28Loss%29%20Before%20Tax%20and%20Income%20Tax%20Expense) Loss before tax for the period significantly narrowed by 88.9% to RMB 152.2 million, mainly due to a substantial reduction in property impairment losses. Income tax expense also decreased by 76.6% to RMB 131.4 million due to a lower scale of recognized revenue Composition of (Loss)/Profit Before Tax | Item | Six Months Ended June 30, 2025 (RMB thousands) | Six Months Ended June 30, 2024 (RMB thousands) | Change | | :--- | :--- | :--- | :--- | | Cost of inventories sold | 5,378,550 | 14,238,037 | -62.2% | | Impairment loss recognized on properties held for sale | 41,306 | 642,080 | -93.6% | | Impairment loss recognized on properties under development | 171,928 | 1,423,561 | -87.9% | | Impairment loss on financial assets | 2,711 | 46,937 | -94.2% | | Employee benefit expense | 65,152 | 119,302 | -45.4% | | **(Loss)/Profit before tax** | **(152,245)** | **(1,366,639)** | **+88.9% (loss narrowed)** | - The Group is subject to income tax for China corporate income tax and land appreciation tax, with land appreciation tax levied at progressive rates from 30% to 60%[22](index=22&type=chunk) Income Tax Expense Analysis | Item | Six Months Ended June 30, 2025 (RMB thousands) | Six Months Ended June 30, 2024 (RMB thousands) | Change | | :--- | :--- | :--- | :--- | | Corporate income tax | 114,234 | 312,869 | -63.5% | | Land appreciation tax | 65,579 | 228,701 | -71.3% | | Deferred tax | (48,427) | 18,830 | N/A (turned to gain) | | **Total tax expense for the period** | **131,386** | **560,400** | **-76.6%** | [Dividends and Earnings/(Loss) Per Share](index=14&type=section&id=Dividends%20and%20Earnings%2F%28Loss%29%20Per%20Share) The Board resolved not to declare an interim dividend for the six months ended June 30, 2025. Basic loss per share for the period significantly narrowed to RMB 0.06 from RMB 0.50 in the prior year, with no potential dilutive ordinary shares - The Board has resolved not to declare any interim dividend for the six months ended June 30, 2025[24](index=24&type=chunk) Basic (Loss)/Earnings Per Share | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | (Loss)/Profit attributable to ordinary equity holders of the parent (RMB thousands) | (233,096) | (2,026,425) | | Weighted average number of ordinary shares in issue | 4,045,227,000 | 4,045,227,000 | | Basic (loss)/earnings per share | RMB (0.06) | RMB (0.50) | - No adjustments were made for dilution to the reported basic (loss)/earnings per share for the six months ended June 30, 2025 and 2024, as the Group had no potentially dilutive ordinary shares in issue during the reporting periods[25](index=25&type=chunk) [Trade Receivables and Payables](index=15&type=section&id=Trade%20Receivables%20and%20Payables) As of June 30, 2025, trade receivables slightly increased to RMB 38.0 million, with the majority due within one year. Trade payables slightly decreased to RMB 10,211.3 million, primarily due within one year, and their fair value approximated their carrying amount Ageing Analysis of Trade Receivables | Ageing | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Within one year | 33,560 | 36,629 | | One to three years | 4,448 | 862 | | **Total** | **38,008** | **37,491** | Ageing Analysis of Trade Payables | Ageing | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Within one year | 9,598,583 | 9,621,850 | | Over one year | 612,675 | 614,161 | | **Total** | **10,211,258** | **10,236,011** | - Trade payables are unsecured, typically settled according to construction progress, and their fair value approximates their carrying amount[29](index=29&type=chunk)[30](index=30&type=chunk) [Chairman's Report](index=16&type=section&id=Chairman%27s%20Report) [Interim Performance Overview](index=16&type=section&id=Interim%20Performance%20Overview) As of June 30, 2025, the Group's operating revenue was approximately RMB 6,410.4 million, a 60.9% year-on-year decrease. Gross profit was approximately RMB 850.1 million, with a gross profit margin of about 13.3%. Net loss was approximately RMB 283.6 million, and loss attributable to owners of the parent was approximately RMB 233.1 million Interim Performance Overview | Metric | Six Months Ended June 30, 2025 (RMB millions) | Six Months Ended June 30, 2024 (RMB millions) | Change | | :--- | :--- | :--- | :--- | | Operating Revenue | 6,410.4 | 16,383.0 | -60.9% | | Gross Profit | 850.1 | 77.9 | +991.3% | | Gross Profit Margin | 13.3% | 0.5% | +12.8 percentage points | | Net Loss | (283.6) | (1,927.0) | +85.3% (loss narrowed) | | Loss attributable to owners of the Company | (233.1) | (2,026.4) | +88.5% (loss narrowed) | [Strategic Focus and Debt Management](index=16&type=section&id=Strategic%20Focus%20and%20Debt%20Management) The Group adheres to a steady progress strategy, actively responds to policy changes, and maintains financial safety. As of June 30, 2025, total debt was approximately RMB 23,741.3 million, a 3.5% decrease from the end of 2024. The weighted average debt cost decreased by 0.33 percentage points to 4.93% - The Group adheres to a long-term strategy of steady progress, actively responds to policy changes, and maintains its financial safety bottom line[33](index=33&type=chunk) Debt Management Metrics | Metric | June 30, 2025 (RMB millions) | December 31, 2024 (RMB millions) | Change | | :--- | :--- | :--- | :--- | | Debt Balance | 23,741.3 | 24,602.2 | -3.5% | | Weighted Average Debt Cost | 4.93% | 5.26% | -0.33 percentage points | [Quality Delivery and Brand Strength](index=17&type=section&id=Quality%20Delivery%20and%20Brand%20Strength) As of June 30, 2025, the Group completed delivery of over 5,066 new homes across 12 cities nationwide, upholding high-quality early delivery and improving efficiency, demonstrating its robust brand strength in the industry - As of June 30, 2025, the Group completed delivery of **over 5,066 new homes** across 12 cities nationwide[34](index=34&type=chunk) - The Group upholds high-quality early delivery, continuously improving delivery efficiency, which confirms its robust brand strength in the industry[34](index=34&type=chunk) [Outlook for H2 2025](index=17&type=section&id=Outlook%20for%20H2%202025) Looking ahead to H2 2025, macroeconomic policies will continue to strongly promote the stabilization of the real estate market, which is generally bottoming out, though a full recovery will take time. The Group will actively adapt to market changes, focusing on customer satisfaction to provide high-quality, safe, comfortable, green, and smart "good homes" - In H2 2025, macroeconomic policies will continue to strongly promote the stabilization of the real estate market, which has generally shown signs of bottoming out and stabilizing[35](index=35&type=chunk) - The Group will actively adapt to market changes and customer needs, focusing on customer satisfaction to build safe, comfortable, green, and smart "good homes"[35](index=35&type=chunk) [Appreciation and Future Vision](index=17&type=section&id=Appreciation%20and%20Future%20Vision) The Chairman extends gratitude to shareholders, investors, partners, customers, and all employees. In the future, the Group will continue to maintain steady, balanced, and high-quality corporate development, adhering to the philosophy of "building good homes with heart for a better life," creating value for urban development, people's well-being, and shareholders - The Chairman, on behalf of the Board, thanks all shareholders, investors, partners, customers, and employees for their support and dedication[36](index=36&type=chunk) - The Group will continue to maintain steady, balanced, and high-quality corporate development, adhering to the philosophy of "building good homes with heart for a better life," to deliver better products and services to the industry and users, and create greater value for shareholders and investors[36](index=36&type=chunk) [Management Discussion and Analysis](index=18&type=section&id=Management%20Discussion%20and%20Analysis) [Performance Summary](index=18&type=section&id=Performance%20Summary) As of June 30, 2025, the Group's revenue decreased by 60.9% year-on-year, but gross profit significantly increased by 991.7%, and net loss narrowed by 85.28%. Gross profit margin improved to 13.3%. Total assets decreased by 5.0%, total debt decreased by 3.5%, and the net gearing ratio was 93.0% Summary of Financial Information | Metric | Six Months Ended June 30, 2025 (RMB thousands) | Six Months Ended June 30, 2024 (RMB thousands) | Percentage Change | | :--- | :--- | :--- | :--- | | Recognized Revenue | 6,410,438 | 16,382,985 | -60.9% | | Gross Profit | 850,058 | 77,868 | 991.7% | | Net (Loss)/Profit | (283,631) | (1,927,040) | 85.28% | | Core Net (Loss)/Profit | (137,044) | (1,834,852) | 92.53% | | Gross Profit Margin | 13.3% | 0.5% | N/A | | Net Profit Margin | -4.4% | -11.8% | N/A | | Core Net Profit Margin | -2.1% | -11.2% | N/A | | (Loss)/Earnings Per Share (RMB cents) | (6) | (50) | N/A | | | | | | | Metric | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | Percentage Change | | :--- | :--- | :--- | :--- | | Total Assets | 91,831,748 | 96,657,346 | -5.0% | | Total Debt | 23,741,289 | 24,602,216 | -3.5% | | Net Debt | 22,160,399 | 22,211,823 | -0.2% | | Equity attributable to owners of the parent | 14,600,326 | 14,833,422 | -1.6% | | Current Ratio | 1.3 | 1.3 | 0% | | Weighted Average Debt Cost | 4.93% | 5.26% | N/A | | Net Gearing Ratio | 93.0% | 92.1% | N/A | | Asset-Liability Ratio excluding advances from customers | 68.3% | 68.4% | N/A | - Core net (loss)/profit excludes fair value changes of investment properties and financial assets at fair value through profit or loss, and gains from disposal of subsidiaries, from profit for the period (after deducting related deferred tax)[40](index=40&type=chunk) [Business Operations Overview](index=20&type=section&id=Business%20Operations%20Overview) The Group focuses on property development and sales across eight regions in China. During the period, both total GFA delivered and average selling price decreased. Total GFA of investment properties was approximately 1,348,098 sqm. Planned total GFA of projects under construction decreased by 21.0%. Total land reserve GFA was approximately 18,280,329 sqm [Property Development and Sales](index=20&type=section&id=Property%20Development%20and%20Sales) The Group focuses on property development and sales in eight regions: Yangtze River Delta, Bohai Rim, East China, Central China, Southwest, Northwest, Southeast, and Shenzhen-Huizhou. As of June 30, 2025, total GFA delivered was 636,677 sqm, with an average selling price of RMB 9,676/sqm, and revenue of RMB 6,160,779 thousand, a significant decrease from the prior year Property Development and Sales Data by Region | Region | 2025 Revenue (RMB thousands) | 2025 GFA Delivered (sqm) | 2025 Average Selling Price (RMB/sqm) | 2024 Revenue (RMB thousands) | 2024 GFA Delivered (sqm) | 2024 Average Selling Price (RMB/sqm) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Southeast | 1,562,497 | 194,644 | 8,028 | 2,156,895 | 219,704 | 9,817 | | East China | 1,298,294 | 156,744 | 8,283 | 4,258,857 | 369,815 | 11,516 | | Central China | 165,645 | 28,193 | 5,875 | 3,001,540 | 267,026 | 11,241 | | Bohai Rim | 1,688,014 | 159,553 | 10,580 | 139,605 | 10,869 | 12,845 | | Northwest | 9,945 | 537 | 18,513 | 2,515,864 | 142,642 | 17,638 | | Southwest | 694,994 | 45,458 | 15,289 | 1,093,925 | 76,902 | 14,225 | | Yangtze River Delta | 741,390 | 51,548 | 14,383 | 1,586,791 | 68,872 | 23,040 | | Shenzhen-Huizhou | – | – | – | 1,428,665 | 96,170 | 14,856 | | **Total** | **6,160,779** | **636,677** | **9,676** | **16,186,142** | **1,252,000** | **12,925** | [Investment Properties](index=20&type=section&id=Investment%20Properties) As of June 30, 2025, the Group held 27 investment properties with a total GFA of approximately 1,348,098 sqm, including one investment property held for future development with an estimated total GFA of approximately 69,530 sqm - As of June 30, 2025, the Group held **27 investment properties** with a total GFA of approximately **1,348,098 sqm**[42](index=42&type=chunk) - One of these is an investment property held for future development, with an estimated total GFA of approximately **69,530 sqm**[42](index=42&type=chunk) [Projects Under Construction](index=20&type=section&id=Projects%20Under%20Construction) As of June 30, 2025, the Group's projects under construction had a planned total GFA of approximately 8,349,359 sqm, a decrease of approximately 21.0% from December 31, 2024 - As of June 30, 2025, the Group's projects under construction had a planned total GFA of approximately **8,349,359 sqm**[43](index=43&type=chunk) - This represents a decrease of approximately **21.0%** from the planned total GFA of approximately 10,566,823 sqm as of December 31, 2024[43](index=43&type=chunk) [Land Reserve](index=21&type=section&id=Land%20Reserve) As of June 30, 2025, the Group's total land reserve GFA was approximately 18,280,329 sqm, with an attributable total GFA of approximately 14,845,295 sqm, primarily located in Chongqing, Wuhan, Beijing, Shanghai, Xi'an, and Fujian Land Reserve Details (June 30, 2025) | Region | Land Reserve Area (sqm) | Attributable Land Reserve Area (sqm) | | :--- | :--- | :--- | | Subtotal of land reserve of the Group and its subsidiaries | 14,956,084 | 13,340,007 | | Subtotal of land reserve of the Group's joint ventures and associates | 3,324,245 | 1,505,289 | | **Total** | **18,280,329** | **14,845,295** | [Financial Review](index=22&type=section&id=Financial%20Review) Revenue for the period significantly decreased by 60.9% to RMB 6,410.4 million, primarily due to reduced property development and sales revenue. Gross profit remarkably increased by 991.7% to RMB 850.1 million, with the gross profit margin rising to 13.3%. Both loss before tax and loss for the period significantly narrowed, mainly benefiting from reduced impairment provisions and joint ventures turning profitable [Revenue Analysis](index=22&type=section&id=Revenue%20Analysis) Total revenue for the period was approximately RMB 6,410.4 million, a 60.9% year-on-year decrease, mainly due to a 61.9% reduction in property development and sales revenue to RMB 6,160.78 million. Property leasing revenue increased by 3.8% to RMB 202.1 million, hotel services contributed RMB 46.5 million for the first time, and management consulting services revenue decreased by 52.9% - For the current period, the Group's revenue was approximately **RMB 6,410.4 million**, a decrease of approximately **60.9%** compared to the same period in 2024[45](index=45&type=chunk) Revenue Source Composition | Revenue Source | 2025 (RMB thousands) | 2025 (%) | 2024 (RMB thousands) | 2024 (%) | | :--- | :--- | :--- | :--- | :--- | | Property development and sales | 6,160,779 | 96.1 | 16,186,142 | 98.8 | | - Residential | 6,060,550 | 94.5 | 15,755,758 | 96.2 | | - Commercial | 100,229 | 1.6 | 430,384 | 2.6 | | Property leasing | 202,086 | 3.2 | 194,665 | 1.2 | | Management consulting services | 1,037 | 0.0 | 2,178 | 0.0 | | Hotel services | 46,536 | 0.7 | – | – | | **Total** | **6,410,438** | **100.0** | **16,382,985** | **100.0** | - The decrease in property development and sales revenue was primarily attributable to a reduction in the number of completed and delivered property projects during the period, leading to a decrease in total GFA delivered[47](index=47&type=chunk) [Cost of Sales](index=23&type=section&id=Cost%20of%20Sales) Cost of sales for the period was approximately RMB 5,560.4 million, a decrease of approximately 65.9% from the prior year, mainly due to a reduction in the Group's recognized revenue scale during the period - For the current period, the Group's cost of sales was approximately **RMB 5,560.4 million**, a decrease of approximately **65.9%** compared to the same period in 2024[51](index=51&type=chunk) - The decrease in cost of sales was primarily due to a reduction in the Group's recognized revenue scale during the period[51](index=51&type=chunk) [Gross Profit and Margin](index=23&type=section&id=Gross%20Profit%20and%20Margin) The Group's gross profit significantly increased from RMB 77.9 million in the prior year to RMB 850.1 million in the current period, with the gross profit margin notably improving from 0.5% to 13.3% - The Group's gross profit increased from approximately **RMB 77.9 million** for the six months ended June 30, 2024, to approximately **RMB 850.1 million** for the current period[52](index=52&type=chunk) - The Group's gross profit margin increased from approximately **0.5%** for the six months ended June 30, 2024, to approximately **13.3%** for the current period[52](index=52&type=chunk) [Financial Income and Other Income/Gains](index=24&type=section&id=Financial%20Income%20and%20Other%20Income%2FGains) Financial income for the period decreased by 70.7% to RMB 3.2 million, mainly due to reduced bank balances and lower deposit interest rates. Other income and gains slightly increased to RMB 14.6 million - The Group's financial income decreased by approximately **70.7%** from approximately **RMB 11.0 million** for the six months ended June 30, 2024, to approximately **RMB 3.2 million** for the current period[53](index=53&type=chunk) - The decrease in financial income was primarily due to a reduction in the Group's bank balances and lower interest income from deposits during the current period[53](index=53&type=chunk) - The Group's other income and gains slightly increased from approximately **RMB 12.2 million** for the six months ended June 30, 2024, to approximately **RMB 14.6 million** for the current period[54](index=54&type=chunk) [Selling and Distribution Expenses](index=24&type=section&id=Selling%20and%20Distribution%20Expenses) Selling and distribution expenses for the period decreased by 35.9% to RMB 265.5 million, primarily due to the Group's reduced revenue - The Group's selling and distribution expenses decreased by approximately **35.9%** from approximately **RMB 414.2 million** for the six months ended June 30, 2024, to approximately **RMB 265.5 million** for the current period[55](index=55&type=chunk) - The decrease in selling and distribution expenses was due to the Group's reduced revenue during the current period[55](index=55&type=chunk) [Administrative Expenses](index=25&type=section&id=Administrative%20Expenses) Administrative expenses for the period decreased by 23.4% to RMB 193.2 million, mainly due to reduced revenue, employee salaries, and office expenses - The Group's administrative expenses decreased by approximately **23.4%** from approximately **RMB 252.4 million** for the six months ended June 30, 2024, to approximately **RMB 193.2 million** for the current period[56](index=56&type=chunk) - The decrease in administrative expenses was due to the Group's reduced revenue, as well as lower employee salaries and office expenses during the current period[56](index=56&type=chunk) [Finance Costs](index=25&type=section&id=Finance%20Costs) The Group's finance costs increased by 21.9% to RMB 143.5 million. As of June 30, 2025, the weighted average debt cost was 4.93%, a decrease from 5.26% at the end of 2024 - The Group's finance costs increased by approximately **21.9%** from approximately **RMB 117.7 million** for the six months ended June 30, 2024, to approximately **RMB 143.5 million** for the current period[57](index=57&type=chunk) - The Group's weighted average debt cost as of June 30, 2025, was approximately **4.93%** (December 31, 2024: 5.26%)[57](index=57&type=chunk) [Other Expenses](index=26&type=section&id=Other%20Expenses) Other expenses for the period significantly decreased by 95.8% to RMB 4.7 million, primarily due to no significant impairment losses on financial assets and investments being recognized during the period - The Group's other expenses decreased by approximately **95.8%** from approximately **RMB 110.5 million** for the six months ended June 30, 2024, to approximately **RMB 4.7 million** for the current period[58](index=58&type=chunk) - The decrease in other expenses was primarily due to the Group not recognizing significant impairment losses on financial assets and investments during the current period[58](index=58&type=chunk) [Fair Value (Loss)/Gain on Investment Properties](index=26&type=section&id=Fair%20Value%20Loss%20on%20Investment%20Properties) Fair value loss on investment properties increased by 59.0% to RMB 195.5 million for the period, mainly due to decreased occupancy rates and rental levels for some investment properties - For the current period, the Group recorded a fair value loss on investment properties of approximately **RMB 195.5 million**, an increase of approximately **59.0%** compared to the fair value loss of approximately RMB 122.9 million for the six months ended June 30, 2024[59](index=59&type=chunk) - The increase in loss was primarily due to decreased occupancy rates and rental levels for some investment properties[59](index=59&type=chunk) [Share of Joint Ventures and Associates Results](index=26&type=section&id=Share%20of%20Joint%20Ventures%20and%20Associates%20Results) Share of joint ventures turned from a loss to a gain of RMB 13.7 million for the period, mainly due to profitable property project recognition by joint ventures. Share of associates' loss increased to RMB 231.4 million, primarily affected by the real estate market sentiment and lower-than-expected selling prices, leading to impairment provisions for some property projects - The Group recorded a share of joint ventures' gain of approximately **RMB 13.7 million** for the current period, compared to a share of joint ventures' loss of approximately RMB 327.5 million for the six months ended June 30, 2024[60](index=60&type=chunk) - The shift from a share of joint ventures' loss to a gain was primarily due to the profitable recognition of property projects held by the Group's joint ventures during the current period[60](index=60&type=chunk) - The Group's share of associates' loss increased from approximately **RMB 122.3 million** for the six months ended June 30, 2024, to a loss of **RMB 231.4 million** for the current period, mainly due to impairment provisions for some property projects affected by real estate market sentiment and lower-than-expected selling prices[61](index=61&type=chunk) [Loss Before Tax and Income Tax Expense](index=27&type=section&id=Loss%20Before%20Tax%20and%20Income%20Tax%20Expense) Loss before tax for the period significantly narrowed by 88.9% to RMB 152.2 million, primarily due to reduced impairment provisions. Income tax expense decreased by 76.6% to RMB 131.4 million, mainly due to a lower scale of recognized revenue - The Group recorded a loss before tax of approximately **RMB 152.2 million** for the current period, a decrease of **88.9%** compared to the loss before tax of approximately RMB 1,366.6 million for the six months ended June 30, 2024[62](index=62&type=chunk) - The significant reduction in loss before tax was primarily due to a decrease in the Group's impairment provisions during the current period[62](index=62&type=chunk) - The Group's income tax expense decreased by approximately **76.6%** from RMB 560.4 million for the six months ended June 30, 2024, to **RMB 131.4 million** for the current period, mainly due to a corresponding decrease in income tax expense from the Group's reduced recognized revenue scale during the period[63](index=63&type=chunk) [Loss for the Period](index=27&type=section&id=Loss%20for%20the%20Period) Considering the aforementioned financial data changes, the Group's loss for the period was approximately RMB 283.6 million, a significant decrease of 85.3% from RMB 1,927 million in the prior year - The Group recorded a loss of approximately **RMB 283.6 million**, a significant decrease of **85.3%** compared to the loss of approximately RMB 1,927 million for the six months ended June 30, 2024[64](index=64&type=chunk) [Liquidity and Financial Resources](index=28&type=section&id=Liquidity%20and%20Financial%20Resources) As of June 30, 2025, the Group's net current assets remained stable, while cash and bank balances decreased to RMB 1,580.9 million. Total outstanding borrowings decreased by 3.5% to RMB 23,741.3 million, with a weighted average debt cost of 4.93% [Net Current Assets](index=28&type=section&id=Net%20Current%20Assets) As of June 30, 2025, the Group's net current assets were approximately RMB 13,375.7 million, largely unchanged from the end of 2024. Total current assets decreased by 6.6%, and total current liabilities decreased by 8.3%, mainly due to reductions in properties under development, cash and bank balances, contract liabilities, and other payables - As of June 30, 2025, the Group's net current assets were approximately **RMB 13,375.7 million** (December 31, 2024: approximately RMB 13,395.5 million)[65](index=65&type=chunk) - The decrease in total current assets was primarily due to a reduction in properties under development resulting from the Group's completion and delivery, and a decrease in cash and bank balances[65](index=65&type=chunk) - The decrease in total current liabilities was primarily due to a reduction in contract liabilities resulting from the Group's completion and delivery, and a decrease in other payables[65](index=65&type=chunk) [Cash Position](index=28&type=section&id=Cash%20Position) As of June 30, 2025, the Group's cash and bank balances were approximately RMB 1,580.9 million, a decrease from RMB 2,390.4 million at the end of 2024. The majority of cash is denominated in RMB, HKD, and USD - As of June 30, 2025, the Group's cash and bank balances were approximately **RMB 1,580.9 million** (December 31, 2024: approximately RMB 2,390.4 million)[66](index=66&type=chunk) - The majority of the Group's cash and bank balances are denominated in RMB, HKD, and USD[66](index=66&type=chunk) [Debt Structure and Maturity](index=28&type=section&id=Debt%20Structure%20and%20Maturity) As of June 30, 2025, the Group's total outstanding borrowings were approximately RMB 23,741.3 million, a 3.5% decrease from the end of 2024. RMB-denominated borrowings constituted the largest portion, with a weighted average debt cost of 4.93%. The debt structure includes current and non-current bank loans, other loans, corporate bonds, and asset-backed securities, with detailed maturity and fixed/floating rate breakdowns - As of June 30, 2025, the Group's total outstanding borrowings were approximately **RMB 23,741.3 million** (December 31, 2024: approximately RMB 24,602.2 million), a decrease of **3.5%**[67](index=67&type=chunk) - Of this, RMB-denominated borrowings were approximately **RMB 22,781 million**, and USD-denominated borrowings were approximately **RMB 960.3 million**[67](index=67&type=chunk) Components of Borrowings (June 30, 2025) | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Total current | 6,739,901 | 7,532,895 | | Total non-current | 17,001,388 | 17,069,321 | | **Total Borrowings** | **23,741,289** | **24,602,216** | | Secured | 22,682,032 | 23,575,871 | | Unsecured | 1,059,257 | 1,026,345 | Borrowing Maturity and Interest Rate Classification (June 30, 2025) | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Bank loans repayable (within one year) | 5,031,862 | 5,638,676 | | Other borrowings repayable (within one year) | 379,581 | 654,114 | | Corporate bonds and asset-backed securities proceeds repayable (within one year) | 1,328,458 | 1,240,105 | | **Total** | **23,741,289** | **24,602,216** | | Fixed rate | 14,281,971 | 14,196,117 | | Floating rate | 9,459,318 | 10,406,099 | [Financial Risk Management and Liabilities](index=31&type=section&id=Financial%20Risk%20Management%20and%20Liabilities) The Group faces interest rate, foreign currency, credit, and liquidity risks but does not use derivatives for hedging. As of June 30, 2025, approximately RMB 40,240.5 million of assets were pledged. Contingent liabilities include guarantees of approximately RMB 14,502.7 million for property buyers and RMB 1,260.2 million for associated companies. Capital commitments were approximately RMB 12,594.0 million [Assets Pledged](index=31&type=section&id=Assets%20Pledged) As of June 30, 2025, approximately RMB 40,240.5 million of the Group's assets were pledged, including property, plant and equipment, land use rights, investment properties, properties under development, and right-of-use assets - As of June 30, 2025, the Group's borrowings were secured by assets of approximately **RMB 40,240.5 million** (December 31, 2024: approximately RMB 41,233.3 million)[70](index=70&type=chunk) - These assets include property, plant and equipment; land use rights; investment properties; properties under development; and right-of-use assets[70](index=70&type=chunk) [Financial Risks (Interest Rate, Foreign Currency, Credit, Liquidity)](index=31&type=section&id=Financial%20Risks%20%28Interest%20Rate%2C%20Foreign%20Currency%2C%20Credit%2C%20Liquidity%29) The Group faces interest rate, foreign currency, credit, and liquidity risks but does not use derivatives for hedging. Interest rate risk is primarily associated with floating-rate borrowings. Foreign currency risk mainly arises from HKD and USD-denominated cash balances. Credit risk is managed through credit assessment and monitoring procedures. Liquidity risk is managed by maintaining a balance between financing continuity and flexibility - The Group faces interest rate risk, foreign currency risk, credit risk, and liquidity risk, but does not use any derivative or other instruments for hedging purposes[71](index=71&type=chunk) - Interest rate risk is primarily related to floating-rate bank and other borrowings, with the Group using floating-rate borrowings to manage interest costs[72](index=72&type=chunk) - Foreign currency risk primarily arises from HKD and USD-denominated cash and bank balances; the Group has no foreign currency hedging policy but closely monitors exchange rate risk[73](index=73&type=chunk) - Credit risk is managed through counterparty credit assessment, monitoring procedures, and regular review of the recoverability of receivables, with no highly concentrated credit risk[74](index=74&type=chunk) - Liquidity risk is managed by maintaining a balance between financing continuity and flexibility using interest-bearing bank and other borrowings, with continuous close monitoring of liquidity conditions[75](index=75&type=chunk) [Contingent Liabilities](index=32&type=section&id=Contingent%20Liabilities) As of June 30, 2025, the Group provided mortgage loan guarantees of approximately RMB 14,502.7 million for property buyers and guarantees of approximately RMB 1,260.2 million for associated companies. The Directors believe the likelihood of buyers defaulting on payment obligations is remote, thus no significant provision has been made - The Group has arranged for mortgage financing with several banks and provided guarantees to customers as collateral for mortgage loans[76](index=76&type=chunk) - As of June 30, 2025, the total guarantees provided by the Group to banks for financing granted to the Group's property buyers amounted to approximately **RMB 14,502.7 million** (December 31, 2024: approximately RMB 15,729.9 million)[78](index=78&type=chunk) - As of June 30, 2025, the total guarantees provided by the Group to banks and other institutions for financing granted to the Group's associated companies amounted to approximately **RMB 1,260.2 million** (December 31, 2024: approximately RMB 1,242.1 million)[78](index=78&type=chunk) [Contingent Legal Matters](index=33&type=section&id=Contingent%20Legal%20Matters) The Group is involved in legal proceedings from time to time but believes that liabilities arising from such proceedings will not have a material adverse effect on its business, financial condition, or operating results - The Group may be involved in legal and other proceedings from time to time in the ordinary course of business[79](index=79&type=chunk) - The Group believes that liabilities arising from such proceedings will not have a material adverse effect on its business, financial condition, or operating results[79](index=79&type=chunk) [Commitments and Off-balance Sheet Arrangements](index=33&type=section&id=Commitments%20and%20Off-balance%20Sheet%20Arrangements) As of June 30, 2025, the Group's capital commitments related to property development activities, land acquisitions, and contributions to joint ventures and associates were approximately RMB 12,594.0 million. Except for the disclosed contingent liabilities, the Group had no other significant off-balance sheet commitments or arrangements - As of June 30, 2025, the Group's capital commitments related to property development activities, acquisition of land use rights, contributions to joint ventures and associates, and acquisition of equity interests were approximately **RMB 12,594.0 million** (December 31, 2024: approximately RMB 13,157.8 million)[80](index=80&type=chunk) - Except for the disclosed contingent liabilities, as of June 30, 2025, the Group had no outstanding or agreed-to-be-issued loan capital, bank overdrafts, loans, debt securities, borrowings or other similar indebtedness, acceptance credits, debentures, mortgages, charges, finance lease or hire purchase commitments, guarantees, or other significant contingent liabilities[81](index=81&type=chunk) [Other Disclosures](index=34&type=section&id=Other%20Disclosures) During the period, there were no significant investments, acquisitions, or disposals of subsidiaries, associates, or joint ventures, nor any future plans for major investments or capital assets. As of June 30, 2025, the Group had 636 employees, with staff costs of approximately RMB 65.2 million. No other significant events occurred after the reporting period [Significant Investments, Acquisitions and Disposals of Subsidiaries, Associates and Joint Ventures](index=34&type=section&id=Significant%20Investments%2C%20Acquisitions%20and%20Disposals) For the six months ended June 30, 2025, the Group had no significant investments or significant acquisitions or disposals of subsidiaries, associates, or joint ventures - For the six months ended June 30, 2025, the Group had no significant investments or significant acquisitions or disposals of subsidiaries, associates, or joint ventures[83](index=83&type=chunk) [Future Plans for Major Investments or Capital Assets](index=34&type=section&id=Future%20Plans%20for%20Major%20Investments%20or%20Capital%20Assets) As of June 30, 2025, the Group had no future plans for any major investments or capital assets - As of June 30, 2025, the Group had no future plans for any major investments or capital assets[84](index=84&type=chunk) [Employees](index=34&type=section&id=Employees) As of June 30, 2025, the Group had a total of 636 employees, with the vast majority located in China. Staff costs for the period were approximately RMB 65.2 million, a decrease from RMB 119.3 million in the prior year. Salaries are determined based on qualifications, position, and seniority, with a regular review system - As of June 30, 2025, the Group had a total of **636 employees**, with the vast majority located in China[85](index=85&type=chunk) - For the current period, staff costs (including Directors' emoluments) were approximately **RMB 65.2 million** (six months ended June 30, 2024: approximately RMB 119.3 million)[85](index=85&type=chunk) - The Group determines salaries based on each employee's qualifications, position, and seniority, and has a regular review system in place[85](index=85&type=chunk) [Subsequent Events](index=34&type=section&id=Subsequent%20Events) No other significant events occurred for the Group after June 30, 2025, up to the date of this announcement - No other significant events occurred for the Group after June 30, 2025, up to the date of this announcement[86](index=86&type=chunk) [Corporate Governance and Other Information](index=34&type=section&id=Corporate%20Governance%20and%20Other%20Information) [Corporate Governance Statement](index=34&type=section&id=Corporate%20Governance%20Statement) The Group is committed to achieving high standards of corporate governance and has fully complied with the Corporate Governance Code set out in Appendix C1 of the Listing Rules, except for the provision where the roles of Chairman and Chief Executive Officer are held by the same person - The Group is committed to achieving high standards of corporate governance to protect shareholders' interests and enhance corporate value and accountability[87](index=87&type=chunk) - The Company has fully complied with the Corporate Governance Code set out in Appendix C1 of the Listing Rules, except for the provision where the roles of Chairman and Chief Executive Officer are held by the same person[87](index=87&type=chunk) [Chairman and Chief Executive Officer Roles](index=35&type=section&id=Chairman%20and%20Chief%20Executive%20Officer%20Roles) Mr. Lin Dingqiang serves as both the Chairman and Chief Executive Officer, deviating from Code Provision C.2.1 of the Corporate Governance Code. The Board believes this arrangement is in the Group's best interest, as Mr. Lin has been responsible for daily operations and management since its inception, and sufficient checks and balances are in place - Mr. Lin Dingqiang serves as both the Chairman and Chief Executive Officer of the Company, which deviates from Code Provision C.2.1 of the Corporate Governance Code[88](index=88&type=chunk) - The Board believes that Mr. Lin Dingqiang holding both positions allows for effective management and business development, is in the Group's best interest, and sufficient checks and balances have been implemented[88](index=88&type=chunk) [Standard Code for Securities Transactions by Directors](index=35&type=section&id=Standard%20Code%20for%20Securities%20Transactions%20by%20Directors) The Company has adopted the Standard Code for Securities Transactions by Directors of Listed Issuers, as set out in Appendix C3 of the Listing Rules, as a guide for Directors' securities transactions. All Directors have confirmed compliance with all applicable code provisions during the period - The Company has adopted the Standard Code for Securities Transactions by Directors of Listed Issuers, as set out in Appendix C3 of the Listing Rules, as a guide for Directors' transactions in the Company's securities[89](index=89&type=chunk) - Following specific inquiries to all Directors, each has confirmed compliance with all applicable code provisions under the Standard Code during the current period[89](index=89&type=chunk) [Purchase, Sale or Redemption of Listed Securities](index=35&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20Listed%20Securities) During the period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Group's listed securities. As of June 30, 2025, the Company held no treasury shares - During the current period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Group's listed securities[90](index=90&type=chunk) - As of June 30, 2025, the Company held no treasury shares[90](index=90&type=chunk) [Audit Committee Review](index=35&type=section&id=Audit%20Committee%20Review) The Board has established an Audit Committee, comprising three independent non-executive Directors, with Mr. Zhong Chuangxin as Chairman. The Audit Committee has reviewed the Group's unaudited interim results for the six months ended June 30, 2025 - The Audit Committee comprises three members: Mr. Zhong Chuangxin, Mr. Zhang Huaqiao, and Mr. Xie Rikang, all of whom are independent non-executive Directors[91](index=91&type=chunk) - The Chairman of the Audit Committee is Mr. Zhong Chuangxin, who possesses appropriate professional qualifications[91](index=91&type=chunk) - As of the date of this announcement, the Audit Committee has reviewed the Group's unaudited interim results for the six months ended June 30, 2025[91](index=91&type=chunk) [Interim Dividend Declaration](index=36&type=section&id=Interim%20Dividend%20Declaration) The Board has resolved not to declare any interim dividend for the six months ended June 30, 2025 - The Board has resolved not to declare any interim dividend for the six months ended June 30, 2025[92](index=92&type=chunk) [Publication of Interim Results and Report](index=36&type=section&id=Publication%20of%20Interim%20Results%20and%20Report) This announcement has been published on the websites of The Stock Exchange of Hong Kong Limited and the Company. The Company's interim report for the six months ended June 30, 2025, will be dispatched to shareholders and published on the aforementioned websites in due course - This announcement is published on the website of The Stock Exchange of Hong Kong Limited at www.hkexnews.hk and the Company's website at www.radiance.com.cn[93](index=93&type=chunk) - The Company's interim report for the six months ended June 30, 2025, will be dispatched to the Company's shareholders (upon request) and published on the aforementioned websites in due course[93](index=93&type=chunk)

[Company Information and Financial Highlights](index=1&type=section&id=Company%20Information%20and%20Financial%20Highlights) This section provides an overview of the company's key financial performance and position for the interim period [Company Information and Financial Highlights](index=1&type=section&id=1.1%20Company%20Information%20and%20Financial%20Highlights) Henan Jinma Energy Company Limited announced its unaudited interim results for the six months ended June 30, 2025, reporting revenue of **RMB 3,829.2 million**, a loss attributable to owners of **RMB 125.9 million**, and basic loss per share of **RMB 0.24** Financial Summary for the Six Months Ended June 30, 2025 | Indicator | Six Months Ended June 30, 2025 (RMB million) | | :--- | :--- | | Revenue | 3,829.2 | | Loss attributable to owners of the Company | (125.9) | | Basic loss per share | (0.24) | [Condensed Consolidated Financial Statements](index=2&type=section&id=Condensed%20Consolidated%20Financial%20Statements) This section presents the condensed consolidated statements of profit or loss, financial position, changes in equity, and cash flows [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=2&type=section&id=2.1%20Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For the six months ended June 30, 2025, group revenue significantly decreased by **39.2%** to **RMB 3,829.2 million**, while gross profit substantially increased by **170.1%** to **RMB 189.2 million**, with loss for the period narrowing by **15.7%** to **RMB 176.5 million** and basic loss per share decreasing to **RMB 0.24** Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (H1 2025 vs H1 2024) | Indicator | Six Months Ended June 30, 2025 (RMB thousand) | Six Months Ended June 30, 2024 (RMB thousand) | Change (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Revenue | 3,829,243 | 6,299,480 | (2,470,237) | -39.2% | | Cost of sales | (3,639,994) | (6,229,414) | 2,589,420 | -41.6% | | Gross profit | 189,249 | 70,066 | 119,183 | 170.1% | | Other income | 19,746 | 38,199 | (18,453) | -48.3% | | Other gains and losses | (6,469) | (15,075) | 8,606 | -57.1% | | Selling and distribution expenses | (165,388) | (197,617) | 32,229 | -16.3% | | Administrative expenses | (87,823) | (89,974) | 2,151 | -2.4% | | Finance costs | (77,569) | (68,809) | (8,760) | 12.7% | | Loss before tax | (127,492) | (260,680) | 133,188 | -51.1% | | Income tax (expense) credit | (48,991) | 51,360 | (100,351) | -195.4% | | Loss for the period | (176,483) | (209,320) | 32,837 | -15.7% | | Loss attributable to owners of the Company | (125,878) | (156,978) | 31,100 | -19.8% | | Basic loss per share (RMB) | (0.24) | (0.29) | 0.05 | -17.2% | [Condensed Consolidated Statement of Financial Position](index=3&type=section&id=2.2%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the Group's total assets were **RMB 10,530.3 million**, a **6.1% decrease** from December 31, 2024, with net current liabilities expanding to **RMB 3,243.7 million** and total equity declining by **4.6%** to **RMB 4,138.1 million** Condensed Consolidated Statement of Financial Position (June 30, 2025 vs December 31, 2024) | Indicator | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | Change (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | **Assets** | | | | | | Non-current assets | 8,385,277 | 8,581,014 | (195,737) | -2.3% | | Current assets | 2,145,055 | 2,634,730 | (489,675) | -18.6% | | **Total assets** | **10,530,332** | **11,215,744** | **(685,412)** | **-6.1%** | | **Liabilities** | | | | | | Current liabilities | 5,388,721 | 5,650,210 | (261,489) | -4.6% | | Non-current liabilities | 1,003,483 | 1,228,271 | (224,788) | -18.3% | | **Total liabilities** | **6,392,204** | **6,878,481** | **(486,277)** | **-7.1%** | | **Equity** | | | | | | Equity attributable to owners of the Company | 2,992,598 | 3,118,302 | (125,704) | -4.0% | | Non-controlling interests | 1,145,530 | 1,218,961 | (73,431) | -6.0% | | **Total equity** | **4,138,128** | **4,337,263** | **(199,135)** | **-4.6%** | | Net current liabilities | (3,243,666) | (3,015,480) | (228,186) | 7.6% | [Condensed Consolidated Statement of Changes in Equity](index=5&type=section&id=2.3%20Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) For the six months ended June 30, 2025, equity attributable to owners of the Company decreased from **RMB 3,118.3 million** to **RMB 2,992.6 million**, primarily due to a loss for the period of **RMB 125.9 million**, with total equity decreasing from **RMB 4,337.3 million** to **RMB 4,138.1 million** Condensed Consolidated Statement of Changes in Equity (H1 2025) | Indicator | January 1, 2025 (RMB thousand) | Loss for the period (RMB thousand) | Other comprehensive income for the period (RMB thousand) | Dividends declared (RMB thousand) | June 30, 2025 (RMB thousand) | | :--- | :--- | :--- | :--- | :--- | :--- | | Equity attributable to owners of the Company | 3,118,302 | (125,878) | 174 | – | 2,992,598 | | Non-controlling interests | 1,218,961 | (50,605) | 24 | (22,850) | 1,145,530 | | **Total equity** | **4,337,263** | **(176,483)** | **198** | **(22,850)** | **4,138,128** | [Condensed Consolidated Statement of Cash Flows](index=6&type=section&id=2.4%20Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) For the six months ended June 30, 2025, net cash from operating activities significantly decreased by **82.2%** to **RMB 94.3 million**, while investing activities shifted from net outflow to a net inflow of **RMB 39.0 million**, and net cash used in financing activities decreased by **30.8%** to **RMB 212.0 million**, with cash and cash equivalents at period-end totaling **RMB 430.7 million**, a **58.6% decrease** year-on-year Condensed Consolidated Statement of Cash Flows (H1 2025 vs H1 2024) | Indicator | Six Months Ended June 30, 2025 (RMB thousand) | Six Months Ended June 30, 2024 (RMB thousand) | Change (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Net cash from operating activities | 94,296 | 530,423 | (436,127) | -82.2% | | Net cash from (used in) investing activities | 39,020 | (106,770) | 145,790 | -136.5% | | Net cash used in financing activities | (211,993) | (306,365) | 94,372 | -30.8% | | Net (decrease) increase in cash and cash equivalents | (78,677) | 117,288 | (195,965) | -167.1% | | Cash and cash equivalents at end of period | 430,737 | 1,039,886 | (609,149) | -58.6% | [Notes to the Financial Statements](index=8&type=section&id=Notes%20to%20the%20Financial%20Statements) This section provides detailed notes on the basis of preparation, accounting policies, and specific financial statement items [Basis of Preparation and Accounting Policies](index=8&type=section&id=3.1%20Basis%20of%20Preparation%20and%20Accounting%20Policies) The condensed consolidated financial statements are prepared in accordance with IAS 34 'Interim Financial Reporting' and the HKEX Listing Rules, using a historical cost basis, with no significant impact from new IFRS amendments, and management anticipates sufficient working capital to continue as a going concern despite net current liabilities - As of June 30, 2025, the Group had **net current liabilities of approximately RMB 3,243,666,000**, but the Board believes that with unutilized bank facilities, refinancing plans, and expected operating cash flows, the Group has sufficient working capital to meet its financial obligations for the next 12 months, making the preparation of financial statements on a going concern basis appropriate[14](index=14&type=chunk)[17](index=17&type=chunk) - The Group first applied the amendments to IFRS 21 'Lack of Exchangeability' in the current period, which had **no significant impact** on the Group's financial position, performance, and/or disclosures in these condensed consolidated financial statements for the current and prior periods[16](index=16&type=chunk) [Revenue and Segment Information](index=9&type=section&id=3.2%20Revenue%20and%20Segment%20Information) The Group's revenue primarily derives from coke, coking by-products, derivative chemicals, energy products, trading, and other services, with total revenue from customer contracts for the six months ended June 30, 2025, amounting to **RMB 3,829.2 million**, of which coke contributed the largest share at **RMB 1,880.9 million** - The Group is primarily engaged in the production and sale of coke, coking by-products, derivative chemicals, coal gas, liquefied natural gas (LNG), and hydrogen, as well as the trading of coke, coal, refined oil, and hydrogen, and provides entrusted manufacturing and other services[23](index=23&type=chunk)[25](index=25&type=chunk) Revenue from Contracts with Customers (H1 2025 vs H1 2024) | Segment | Six Months Ended June 30, 2025 (RMB thousand) | Six Months Ended June 30, 2024 (RMB thousand) | | :--- | :--- | :--- | | Coke | 1,880,927 | 3,916,167 | | Coking by-products | 29,898 | 25,225 | | Derivative chemicals | 1,473,852 | 1,586,863 | | Energy products | 315,762 | 432,309 | | Trading | 57,262 | 316,129 | | Other services | 71,542 | 22,787 | | **Total revenue from contracts with customers** | **3,829,243** | **6,299,480** | [Other Income and Gains/Losses](index=14&type=section&id=3.3%20Other%20Income%20and%20Gains%2FLosses) For the six months ended June 30, 2025, other income decreased by **48.3%** year-on-year to **RMB 19.7 million**, mainly due to reduced interest income and government grants, while other gains and losses narrowed from a loss of **RMB 15.1 million** to **RMB 6.5 million**, primarily due to a decrease in fair value losses on bills receivable at fair value through other comprehensive income Other Income and Gains/Losses (H1 2025 vs H1 2024) | Indicator | Six Months Ended June 30, 2025 (RMB thousand) | Six Months Ended June 30, 2024 (RMB thousand) | Change (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | **Other income** | | | | | | Total interest income | 12,041 | 25,934 | (13,893) | -53.6% | | Government grants related to assets | 1,920 | 1,118 | 802 | 71.7% | | Government grants | 3,810 | 10,211 | (6,401) | -62.7% | | **Total other income** | **19,746** | **38,199** | **(18,453)** | **-48.3%** | | **Other gains and losses** | | | | | | Fair value loss on bills receivable at fair value through other comprehensive income | (6,554) | (20,686) | 14,132 | -68.3% | | Loss on disposal/write-off of property, plant and equipment | (318) | (1,268) | 950 | -74.9% | | Net foreign exchange (loss) gain | (146) | 4,845 | (4,991) | -103.0% | | **Total other gains and losses** | **(6,469)** | **(15,075)** | **8,606** | **-57.1%** | [Finance Costs](index=15&type=section&id=3.4%20Finance%20Costs) For the six months ended June 30, 2025, total finance costs increased by **12.7%** year-on-year to **RMB 77.6 million**, driven by a significant reduction in amounts capitalized to property, plant, and equipment, despite a slight decrease in total interest expenses, resulting in higher finance costs recognized in profit or loss Finance Costs (H1 2025 vs H1 2024) | Indicator | Six Months Ended June 30, 2025 (RMB thousand) | Six Months Ended June 30, 2024 (RMB thousand) | Change (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Total interest expense | 92,543 | 94,950 | (2,407) | -2.5% | | Less: Amount capitalized to property, plant and equipment | (14,974) | (26,141) | 11,167 | -42.7% | | **Finance costs** | **77,569** | **68,809** | **8,760** | **12.7%** | | Annual capitalization rate | 4.43% | 5.66% | -1.23% | -21.7% | [Loss Before Tax and Income Tax](index=16&type=section&id=3.5%20Loss%20Before%20Tax%20and%20Income%20Tax) For the six months ended June 30, 2025, loss before tax narrowed by **51.1%** year-on-year to **RMB 127.5 million**, while income tax shifted from a credit to an expense of **RMB 49.0 million**, primarily due to an increase in deferred tax expense Loss Before Tax and Income Tax (H1 2025 vs H1 2024) | Indicator | Six Months Ended June 30, 2025 (RMB thousand) | Six Months Ended June 30, 2024 (RMB thousand) | Change (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Loss before tax | (127,492) | (260,680) | 133,188 | -51.1% | | Income tax (expense) credit | (48,991) | 51,360 | (100,351) | -195.4% | | **Loss for the period** | **(176,483)** | **(209,320)** | **32,837** | **-15.7%** | - Total staff costs amounted to **RMB 127,557,000**, a **13.1% decrease** year-on-year, while total depreciation and amortization amounted to **RMB 237,611,000**, a **6.1% increase** year-on-year[33](index=33&type=chunk) [Dividends and Loss Per Share](index=17&type=section&id=3.6%20Dividends%20and%20Loss%20Per%20Share) For the six months ended June 30, 2025, the Company did not declare any dividends to its owners, while certain subsidiaries declared and paid dividends of **RMB 22.9 million** to non-controlling shareholders, a **28.6% decrease** year-on-year, and basic loss per share improved to **RMB 0.24** from **RMB 0.29** in the prior year - The Company did not declare any dividends to its owners for the year ended December 31, 2024, and the Board did not recommend the payment of an interim dividend[35](index=35&type=chunk)[36](index=36&type=chunk) Dividends and Loss Per Share (H1 2025 vs H1 2024) | Indicator | Six Months Ended June 30, 2025 (RMB thousand) | Six Months Ended June 30, 2024 (RMB thousand) | Change (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Dividends declared and paid by subsidiaries to non-controlling shareholders | 22,850 | 31,978 | (9,128) | -28.6% | | Loss attributable to owners of the Company | (125,878) | (156,978) | 31,100 | -19.8% | | Basic loss per share (RMB) | (0.24) | (0.29) | 0.05 | -17.2% | [Asset-Related Information](index=19&type=section&id=3.7%20Asset-Related%20Information) This section discloses changes in the Group's property, plant and equipment, right-of-use assets, and deferred tax assets/liabilities, including capital expenditures, disposals, and deferred tax balance analysis [Property, Plant and Equipment and Right-of-Use Assets](index=19&type=section&id=3.7.1%20Property%2C%20Plant%20and%20Equipment%20and%20Right-of-Use%20Assets) For the six months ended June 30, 2025, the Group incurred construction costs of **RMB 25.4 million**, primarily for coke equipment upgrade projects, purchased other property, plant and equipment for **RMB 27.4 million**, recognized a loss of **RMB 0.3 million** from the disposal of auxiliary equipment, and recognized right-of-use assets and lease liabilities of **RMB 0.8 million** from new lease agreements - Construction costs amounted to **RMB 25,387,000**, primarily including **RMB 12,433,000** for coke equipment upgrade projects to comply with recent environmental regulations[38](index=38&type=chunk) - Purchases of other property, plant and equipment amounted to **RMB 27,439,000**[38](index=38&type=chunk) - The write-off or disposal of certain auxiliary equipment resulted in a loss on write-off or disposal of **RMB 318,000**[38](index=38&type=chunk) - New lease agreements for buildings and offices resulted in the recognition of right-of-use assets and lease liabilities of **RMB 757,000** respectively[39](index=39&type=chunk) [Deferred Tax Assets/Liabilities](index=20&type=section&id=3.7.2%20Deferred%20Tax%20Assets%2FLiabilities) As of June 30, 2025, net deferred tax assets decreased to **RMB 103.7 million** from **RMB 146.0 million** as of December 31, 2024, with the Group holding **RMB 1,206.0 million** in unutilized tax losses, of which deferred tax assets of **RMB 139.9 million** were recognized for **RMB 559.6 million** Deferred Tax Assets/Liabilities (June 30, 2025 vs December 31, 2024) | Indicator | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | Change (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Deferred tax assets | 167,421 | 173,994 | (6,573) | -3.8% | | Deferred tax liabilities | (63,690) | (27,969) | (35,721) | 127.7% | | **Net deferred tax assets** | **103,731** | **146,025** | **(42,294)** | **-29.0%** | - The Group has unutilized tax losses of **RMB 1,206,038,000**, of which deferred tax assets of **RMB 139,902,000** have been recognized for **RMB 559,608,000**[41](index=41&type=chunk) [Receivables/Payables](index=21&type=section&id=3.8%20Receivables%2FLiabilities) This section details the composition and changes in the Group's trade and other receivables, amounts due from related parties, borrowings, trade and other payables, amounts due to related parties, and amounts due to shareholders, reflecting the Group's working capital management and debt structure [Trade and Other Receivables](index=21&type=section&id=3.8.1%20Trade%20and%20Other%20Receivables) As of June 30, 2025, total trade and other receivables slightly increased to **RMB 367.1 million** from December 31, 2024, with trade receivables from customer contracts at **RMB 179.9 million** and prepayments to suppliers at **RMB 121.4 million** Trade and Other Receivables (June 30, 2025 vs December 31, 2024) | Indicator | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | Change (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Trade receivables from contracts with customers | 179,948 | 173,543 | 6,405 | 3.7% | | Loan receivables | 11,600 | 10,000 | 1,600 | 16.0% | | Prepayments to suppliers | 121,375 | 97,558 | 23,817 | 24.4% | | Prepayments for other taxes and expenses | 49,132 | 78,477 | (29,345) | -37.4% | | **Total trade and other receivables** | **367,139** | **362,920** | **4,219** | **1.2%** | - The general credit period granted to customers ranges from **30 to 60 days**[45](index=45&type=chunk) - As of June 30, 2025, the balance of trade receivables included a gross carrying amount of **RMB 482,000** that was overdue for **90 days or more** but not considered to be in default[45](index=45&type=chunk) [Amounts Due From Related Parties](index=22&type=section&id=3.8.2%20Amounts%20Due%20From%20Related%20Parties) As of June 30, 2025, total amounts due from related parties significantly increased to **RMB 75.0 million** from December 31, 2024, primarily driven by increases from Maanshan Iron & Steel and its subsidiaries (**RMB 60.2 million**) and Jiangxi Pinggang's subsidiaries (**RMB 14.8 million**) Amounts Due From Related Parties (June 30, 2025 vs December 31, 2024) | Related Party | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | Change (RMB thousand) | | :--- | :--- | :--- | :--- | | Maanshan Iron & Steel and its subsidiaries | 60,207 | – | 60,207 | | Subsidiaries of Jiangxi Pinggang | 14,798 | 40 | 14,758 | | Jiyuan Fang Sheng Chemical Co., Ltd. | – | 90 | (90) | | Yugang (Jiyuan) Coking Group Co., Ltd. | 12 | Not applicable | 12 | | **Total** | **75,017** | **130** | **74,887** | - Yugang Coking became a related party of the Group on **June 16, 2025**[49](index=49&type=chunk) - The aging of amounts due from related parties (excluding prepayments for purchases of goods) is within **90 days**, with no overdue balances[47](index=47&type=chunk) [Borrowings](index=23&type=section&id=3.8.3%20Borrowings) As of June 30, 2025, total borrowings amounted to **RMB 3,231.5 million**, a **3.5% decrease** from December 31, 2024, with secured borrowings decreasing by **RMB 393.3 million** and unsecured borrowings increasing by **RMB 276.0 million**, and borrowings due within one year totaling **RMB 2,754.3 million** Borrowings (June 30, 2025 vs December 31, 2024) | Indicator | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | Change (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Bank borrowings | 3,181,501 | 3,258,740 | (77,239) | -2.4% | | Other borrowings | 50,000 | 90,000 | (40,000) | -44.4% | | **Total borrowings** | **3,231,501** | **3,348,740** | **(117,239)** | **-3.5%** | | Secured borrowings | 980,795 | 1,374,077 | (393,282) | -28.6% | | Unsecured borrowings | 2,250,706 | 1,974,663 | 276,043 | 14.0% | | Fixed-rate borrowings | 1,635,942 | 1,604,137 | 31,805 | 2.0% | | Floating-rate borrowings | 1,595,559 | 1,744,603 | (149,044) | -8.5% | | Due within one year | (2,754,274) | (2,668,118) | (86,156) | 3.2% | | Due after one year | 477,227 | 680,622 | (203,395) | -29.9% | - As of June 30, 2025, the Group had unutilized bank facilities of approximately **RMB 934,545,000**[52](index=52&type=chunk) - Borrowings from Yugang Coking became related party borrowings on **June 16, 2025**, and are presented under amounts due to related parties[51](index=51&type=chunk) [Trade and Other Payables](index=24&type=section&id=3.8.4%20Trade%20and%20Other%20Payables) As of June 30, 2025, total trade and other payables amounted to **RMB 2,200.1 million**, a **17.7% decrease** from December 31, 2024, with trade payables and bills payable totaling **RMB 867.5 million**, and consideration payable for property, plant and equipment at **RMB 1,215.1 million** Trade and Other Payables (June 30, 2025 vs December 31, 2024) | Indicator | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | Change (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Trade payables | 426,853 | 386,195 | 40,658 | 10.5% | | Bills payable | 440,620 | 718,222 | (277,602) | -38.6% | | Consideration payable for property, plant and equipment | 1,215,051 | 1,423,391 | (208,340) | -14.6% | | **Total trade and other payables** | **2,200,098** | **2,674,306** | **(474,208)** | **-17.7%** | - As of June 30, 2025, trade payables/bills payable included **RMB 334,770,000** due within **90 days** and **RMB 76,077,000** due in **over 1 year**[54](index=54&type=chunk) [Amounts Due To Related Parties](index=25&type=section&id=3.8.5%20Amounts%20Due%20To%20Related%20Parties) As of June 30, 2025, total amounts due to related parties significantly increased by **80.7%** to **RMB 157.4 million** from December 31, 2024, with a notable increase in non-trade nature amounts, primarily including borrowings from Shandong Weijiao of **RMB 45.0 million** and Yugang Coking of **RMB 40.0 million** Amounts Due To Related Parties (June 30, 2025 vs December 31, 2024) | Related Party | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | Change (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Total trade nature | 71,399 | 84,160 | (12,761) | -15.2% | | Total non-trade nature | 86,040 | 2,970 | 83,070 | 2797.0% | | **Total** | **157,439** | **87,130** | **70,309** | **80.7%** | - Borrowings from Shandong Weijiao amounted to **RMB 45,000,000** at an annual interest rate of **5%** with a **1-month term**, overdue within **30 days** as of the reporting period end, and borrowings from Yugang Coking amounted to **RMB 40,000,000**[55](index=55&type=chunk) [Amounts Due To Shareholders](index=26&type=section&id=3.8.6%20Amounts%20Due%20To%20Shareholders) As of June 30, 2025, amounts due to shareholders totaled **RMB 53.0 million**, with no such item as of December 31, 2024; this amount represents consideration payable by Jinma Xingye for the Group's purchase of property and equipment from a construction company, bearing **5% annual interest** and overdue for **over 60 days** Amounts Due To Shareholders (June 30, 2025 vs December 31, 2024) | Indicator | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | Change (RMB thousand) | | :--- | :--- | :--- | :--- | | Amounts due to shareholders | 53,000 | – | 53,000 | - This amount bears interest at an annual rate of **5%** and was due for repayment on **April 30, 2025**, being overdue for **over 60 days** as of June 30, 2025[58](index=58&type=chunk) [Capital Commitments](index=26&type=section&id=3.9%20Capital%20Commitments) As of June 30, 2025, the Group's contracted but unprovided capital expenditure for the acquisition of property, plant and equipment amounted to **RMB 15.2 million**, a decrease from **RMB 18.2 million** as of December 31, 2024 Capital Commitments (June 30, 2025 vs December 31, 2024) | Indicator | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | Change (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Contracted but unprovided capital expenditure for the acquisition of property, plant and equipment | 15,167 | 18,215 | (3,048) | -16.7% | [Transfer of Financial Assets](index=27&type=section&id=3.10%20Transfer%20of%20Financial%20Assets) As of June 30, 2025, the maximum exposure to risk from endorsed and discounted bills receivable with recourse not yet derecognized by the Group was **RMB 2,101.6 million**, a **23.8% decrease** from December 31, 2024; these bills were used to settle payables or raise cash, and due to guarantees by reputable banks, the risk of default is low Outstanding Endorsed and Discounted Bills Receivable with Recourse (June 30, 2025 vs December 31, 2024) | Indicator | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | Change (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Endorsed bills for settling payables | 1,243,757 | 1,667,344 | (423,587) | -25.4% | | Discounted bills for raising cash | 857,826 | 1,087,806 | (229,980) | -21.1% | | **Outstanding endorsed and discounted bills receivable with recourse** | **2,101,583** | **2,755,150** | **(653,567)** | **-23.7%** | - The Group has transferred the significant risks and rewards of bills receivable, with its obligations to the respective counterparties discharged, and due to being issued and guaranteed by reputable banks in China, the risk of payment default is low[60](index=60&type=chunk) [Fair Value Measurement of Financial Instruments](index=28&type=section&id=3.11%20Fair%20Value%20Measurement%20of%20Financial%20Instruments) As of June 30, 2025, the fair value of bills receivable at fair value through other comprehensive income was **RMB 284.5 million**, valued using discounted cash flow techniques and classified as Level 2 fair value measurement, and management believes the carrying amounts of financial assets and liabilities measured at amortized cost approximate their fair values Bills Receivable at Fair Value Through Other Comprehensive Income (June 30, 2025 vs December 31, 2024) | Financial Asset | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | Fair Value Level | Valuation Technique | | :--- | :--- | :--- | :--- | :--- | | Bills receivable at fair value through other comprehensive income | 284,483 | 316,852 | Level 2 | Discounted cash flow | - Management believes that the carrying amounts of financial assets and financial liabilities recognized in the condensed consolidated financial statements at amortized cost approximate their fair values[63](index=63&type=chunk) [Related Party Transactions](index=29&type=section&id=3.12%20Related%20Party%20Transactions) For the six months ended June 30, 2025, the Group engaged in various related party transactions, with total sales of products and services to related parties amounting to **RMB 978.4 million**, including **RMB 788.5 million** to Maanshan Iron & Steel and its subsidiaries, total purchases of raw materials and services amounting to **RMB 42.4 million**, and key management personnel compensation totaling **RMB 3.7 million** Related Party Transactions (H1 2025 vs H1 2024) | Transaction Type | Six Months Ended June 30, 2025 (RMB thousand) | Six Months Ended June 30, 2024 (RMB thousand) | Change (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Sales of products and provision of services to related parties | 978,380 | 1,043,128 | (64,748) | -6.2% | | Purchases of raw materials and receipt of services | 42,453 | 42,393 | 60 | 0.1% | | Key management personnel compensation | 3,696 | 2,922 | 774 | 26.5% | [Management Discussion and Analysis](index=30&type=section&id=Management%20Discussion%20and%20Analysis) This section provides management's perspective on the Group's operational performance, financial position, and future outlook [Overview](index=30&type=section&id=4.1%20Overview) Henan Jinma Energy Company Limited is a leading coke producer and coking by-product processor in Henan Province, China, operating a vertically integrated business model that processes coking by-products into derivative chemicals and energy products, actively expanding its LNG and hydrogen businesses, and committed to enhancing competitiveness through industrial extension and technological R&D amidst carbon peak and neutrality goals - The Group is a leading coke producer and coking by-product processor in Henan Province, China, operating a vertically integrated business model along the coal chemical coking industry chain, from coke production to processing coking by-products into derivative chemicals and energy products[68](index=68&type=chunk) - In recent years, the Group has actively expanded its LNG and hydrogen production and sales businesses, extending its industrial chain to higher-end new energy products[68](index=68&type=chunk) - The Board believes that China's carbon peak and carbon neutrality goals present new opportunities for the coke industry, and the Group will continue to seize market opportunities, investing in production and environmental protection to maintain sustained profitable growth[69](index=69&type=chunk) [Financial Summary](index=31&type=section&id=4.2%20Financial%20Summary) For the six months ended June 30, 2025, Group revenue decreased by **39.2%** year-on-year to **RMB 3,829.2 million**, while gross profit significantly increased by **170.1%** to **RMB 189.3 million**, with gross margin improving by **3.8 percentage points** to **4.9%**, and loss for the period narrowing by **15.7%** to **RMB 176.5 million**, with both total assets and total equity declining Financial Summary (H1 2025 vs H1 2024) | Indicator | Six Months Ended June 30, 2025 (RMB million) | Six Months Ended June 30, 2024 (RMB million) | Change (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Revenue | 3,829.2 | 6,299.5 | (2,470.3) | -39.2% | | Gross profit | 189.3 | 70.1 | 119.2 | 170.1% | | (Loss) profit for the period | (176.5) | (209.3) | 32.8 | -15.7% | | Basic (loss) per share (RMB) | (0.24) | (0.29) | 0.05 | -17.2% | | Gross profit margin | 4.9% | 1.1% | 3.8 percentage points | 345.5% | | Net (loss) profit margin | (4.6%) | (3.3%) | (1.3 percentage points) | 39.4% | | **Balance Sheet (Period-end)** | | | | | | Total assets | 10,530.3 | 11,215.7 (Dec 31, 2024) | (685.4) | -6.1% | | Total equity | 4,138.1 | 4,337.3 (Dec 31, 2024) | (199.2) | -4.6% | [Factors Affecting Operating Results and Financial Position](index=32&type=section&id=4.3%20Factors%20Affecting%20Operating%20Results%20and%20Financial%20Position) The Group's operating results and financial position are influenced by China's overall economic conditions, downstream industry demand, and fluctuations in raw material and product prices; economic downturns may lead to lower product prices and reduced trading, while economic recovery could bring increased demand and higher prices [Overall Economic Conditions and Downstream Industry Demand](index=32&type=section&id=4.3.1%20Overall%20Economic%20Conditions%20and%20Downstream%20Industry%20Demand) China's overall economic conditions directly impact the market prices and demand for the Group's products, as well as the price of its main raw material, coal; sales of coke, LNG, and derivative chemicals primarily depend on domestic steel and chemical industry demand, with derivative chemical demand and prices also affected by oil price fluctuations - China's overall economic conditions affect the Group's product market prices, demand, and coal prices, with an economic downturn potentially leading to lower product selling prices and reduced trading activities[73](index=73&type=chunk) - Sales of coke, LNG, and derivative chemicals primarily depend on the demand from the domestic steel and chemical industries[74](index=74&type=chunk) - Coking derivative chemicals, as cost-competitive substitutes for petroleum derivative chemicals, have their demand and prices influenced by oil prices and the development of the petroleum industry[74](index=74&type=chunk) [Raw Material and Product Prices](index=32&type=section&id=4.3.2%20Raw%20Material%20and%20Product%20Prices) The Group faces market price fluctuation risks for its products and coal; prices for products like coke and derivative chemicals are influenced by Chinese laws and regulations, steel and chemical industry demand, economic cycles, coal supply and demand, product characteristics and quality, international chemical prices, and transportation costs, with coking coal price fluctuations linked to product price changes but differing in speed and magnitude - The Group faces market price fluctuation risks for its products and coal, with selling prices typically based on prevailing market prices and relevant factors[75](index=75&type=chunk) - Product prices are influenced by various factors, including Chinese laws, regulations and policies, demand from the steel and chemical industries, economic cycles, coal supply and demand, product characteristics and quality, international chemical prices, and transportation costs[75](index=75&type=chunk)[76](index=76&type=chunk) - An increase or decrease in coking coal prices may not immediately lead to a change in the Group's product prices, and vice versa[79](index=79&type=chunk) Average Selling Prices of Major Products (First Six Months of 2025 vs 2024) | Product | Average Selling Price H1 2025 (RMB/tonne) | Average Selling Price 2024 (RMB/tonne) | Change (RMB/tonne) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Coke | 1,518.27 | 2,012.50 | (494.23) | -24.6% | | Benzene-based chemicals | 5,695.69 | 6,791.54 | (1,095.85) | -16.1% | | Coal tar-based chemicals | 4,091.60 | 4,086.59 | 5.01 | 0.1% | | Coal gas (RMB/cubic meter) | 0.84 | 0.83 | 0.01 | 1.2% | | LNG | 3,993.29 | 4,197.43 | (204.14) | -4.9% | [Production and Sales Volume](index=35&type=section&id=4.4%20Production%20and%20Sales%20Volume) In the first half of 2025, the Group's operations remained stable, with major product capacity utilization largely maintained and sales generally reaching full capacity; coke production was approximately **1.58 million tonnes**, crude benzene and coal tar processing volumes were approximately **206,201 tonnes** and **102,127 tonnes** respectively, and LNG production was approximately **33,932 tonnes** - In the first half of 2025, the Group's coke production was approximately **1.58 million tonnes**, crude benzene processing volume was approximately **206,201 tonnes**, coal tar processing volume was approximately **102,127 tonnes**, and LNG production was approximately **33,932 tonnes**[84](index=84&type=chunk) - The Group's sales generally achieved its consistent full sales capacity[84](index=84&type=chunk) [Major Developments](index=35&type=section&id=4.5%20Major%20Developments) The Group continues to expand its coking, derivative chemicals, coal gas, and LNG businesses, investing in environmental facilities, and in 2025, will further deepen its coking value chain investments, including the hydrogen energy industrial chain, with key projects including the 5.5-meter coke oven renovation, coal tar processing capacity expansion, and new hydrogen refueling stations - The Group continues to expand its coking, derivative chemicals, coal gas, and LNG businesses, and consistently invests in environmental facilities[85](index=85&type=chunk) - In 2025, the Group will further expand and deepen its investments in the coking value chain, including the hydrogen energy industrial chain[85](index=85&type=chunk) [5.5-meter Coke Oven Renovation Project](index=36&type=section&id=4.5.1%205.5-meter%20Coke%20Oven%20Renovation%20Project) The 5.5-meter coke oven renovation to a 7.0-meter coke oven project was completed and put into operation in April 2024, with an investment of approximately **RMB 500 million** and a capacity of approximately **650,000 tonnes**, producing **418,000 tonnes** of coke in the first half of 2025 - The 5.5-meter coke oven renovation to a 7.0-meter coke oven project commenced construction in October 2022, with an investment of approximately **RMB 500 million** and a capacity of approximately **650,000 tonnes**, completed in April 2024, and operating normally[86](index=86&type=chunk) - Coke production in the first half of 2025 was **418,000 tonnes**[86](index=86&type=chunk) [Coal Tar Processing Capacity Expansion and Technical Upgrade Project](index=36&type=section&id=4.5.2%20Coal%20Tar%20Processing%20Capacity%20Expansion%20and%20Technical%20Upgrade%20Project) The coal tar processing capacity expansion and technical upgrade project, with an investment of approximately **RMB 80.0 million**, expanded the original 180,000-tonne coal tar processing unit to an annual capacity of **360,000 tonnes**; the project commenced in October 2023, was ready for production by the end of December 2024, increasing capacity by **180,000 tonnes** - The coal tar processing capacity expansion and technical upgrade project involved an investment of approximately **RMB 80.0 million**, upgrading the original 180,000-tonne coal tar processing unit to achieve an annual processing capacity of **360,000 tonnes**[87](index=87&type=chunk) - The project commenced construction in October 2023, underwent individual and linked trial runs by the end of December 2024, is now ready for production, and has increased capacity by **180,000 tonnes**[87](index=87&type=chunk) [Hydrogen Energy Industrial Chain](index=36&type=section&id=4.5.3%20Hydrogen%20Energy%20Industrial%20Chain) In the first half of 2025, the Group added two new hydrogen refueling stations in Jiyuan Huling and Dengfeng Guojiawa, bringing the total operational stations to **5**, and sold a total of **810 tonnes** of hydrogen during the period, a significant **224% increase** year-on-year - During the first half of 2025, new hydrogen refueling stations were added in Jiyuan Huling and Dengfeng Guojiawa[88](index=88&type=chunk) - The Group now operates a total of **5 refueling stations**, selling **810 tonnes** of hydrogen during the period (compared to 250 tonnes in the same period last year), representing a **224% increase** year-on-year[89](index=89&type=chunk) [Operating Performance Analysis](index=37&type=section&id=4.6%20Operating%20Performance%20Analysis) This section provides a detailed analysis of the Group's consolidated statement of profit or loss for the six months ended June 30, 2025, and an in-depth interpretation of revenue and performance across business segments, revealing the primary reasons for decreased revenue but improved gross profit [Consolidated Statement of Profit or Loss Analysis](index=37&type=section&id=4.6.1%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20Analysis) Group revenue decreased by **39.2%** year-on-year, primarily due to a decline in average product selling prices; gross profit significantly increased by **170.1%**, with gross margin improving by **3.8 percentage points**, mainly benefiting from a larger drop in the average purchase price of coking coal; loss for the period narrowed by **15.7%** year-on-year, while income tax expense substantially increased, primarily due to deferred tax asset adjustments - Revenue decreased by approximately **RMB 2,470.2 million** or **39.2%** year-on-year, primarily due to a decline in the average selling prices of major products[94](index=94&type=chunk) - Gross profit and gross profit margin improved by approximately **RMB 119.2 million** and **3.8 percentage points** respectively, mainly because the average purchase price of coking coal, its main raw material, recorded a larger decrease[94](index=94&type=chunk) - Loss for the period decreased by approximately **RMB 32.8 million** year-on-year to a loss of approximately **RMB 176.5 million**[95](index=95&type=chunk) - Income tax expense increased by approximately **RMB 100.4 million** year-on-year, primarily due to conservative adjustments made to deferred tax assets due to the unpredictable business operating outlook[95](index=95&type=chunk) [Business Segment Performance](index=41&type=section&id=4.6.2%20Business%20Segment%20Performance) Coke segment revenue decreased by **52%** year-on-year, but gross margin rebounded to **5.9%** due to a larger drop in coking coal purchase prices; trading segment revenue decreased by **81.9%** year-on-year, with a decline in gross margin; derivative chemicals segment revenue decreased by **7.1%** year-on-year, with a slight improvement in gross margin; energy products segment revenue decreased by **27.0%** year-on-year, but gross margin significantly increased to **35.5%**, primarily due to a change in business model Business Segment Revenue and Gross Margin (H1 2025 vs H1 2024) | Segment | 2025 Revenue (RMB thousand) | 2024 Revenue (RMB thousand) | Revenue Change (%) | 2025 Gross Margin (%) | 2024 Gross Margin (%) | Gross Margin Change (percentage points) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Coke | 1,880,927 | 3,916,167 | -52.0% | 5.9 | 1.7 | 4.2 | | Trading | 57,262 | 316,129 | -81.9% | 1.8 | 3.3 | -1.5 | | Derivative chemicals | 1,473,852 | 1,586,863 | -7.1% | (2.1) | (2.2) | 0.1 | | Energy products | 315,762 | 432,309 | -27.0% | 35.5 | 4.4 | 31.1 | - The gross margin of the coke segment rebounded from **1.7% to 5.9%**, primarily because the Group's average selling price for coke decreased by approximately **28.3%**, while the average purchase price for coking coal decreased by approximately **33.7%**[96](index=96&type=chunk) - The gross margin of the energy products segment increased from **4.4% to 35.5%**, mainly because Xinyang Jingang's electricity sales, due to a change in its business model during the period, were reclassified from the energy segment to other segments[96](index=96&type=chunk) [Financial Position Analysis](index=42&type=section&id=4.7%20Financial%20Position%20Analysis) This section analyzes the Group's financial resources, cash flows, debt structure, asset pledges, and various financial ratios, revealing the Group's capital management, debt repayment, and overall financial health during the reporting period [Financial Resources and Cash Flows](index=42&type=section&id=4.7.1%20Financial%20Resources%20and%20Cash%20Flows) In the first half of 2025, the Group's funds primarily originated from product sales, shareholders' equity, and bank borrowings, encountering no liquidity issues; net cash from operating activities significantly decreased by **82.2%** year-on-year to **RMB 94.3 million**, while net cash from investing activities shifted from an outflow to an inflow of **RMB 39.0 million**, and net cash used in financing activities decreased by **30.8%** to **RMB 212.0 million** - In the first half of 2025, the Group's funds primarily originated from proceeds from product sales, shareholders' equity, and bank borrowings, and it did not encounter any liquidity issues[97](index=97&type=chunk) - Net cash from operating activities was approximately **RMB 94.3 million**, primarily attributable to net cash flow from operations before working capital changes, a decrease in inventories, a decrease in bills receivable, a decrease in amounts due from shareholders, and an increase in contract liabilities[100](index=100&type=chunk) - Net cash from investing activities was approximately **RMB 39.0 million**, mainly due to a net recovery of approximately **RMB 499.8 million** from restricted bank balances[101](index=101&type=chunk) - Net cash used in financing activities was approximately **RMB 212.0 million**, primarily due to repayment of borrowings, interest paid, repayment of lease liabilities from sale and leaseback arrangements, and dividends paid to non-controlling interests of subsidiaries, partially offset by new related party borrowings and newly raised borrowings[102](index=102&type=chunk) [Liabilities and Asset Pledges](index=44&type=section&id=4.7.2%20Liabilities%20and%20Asset%20Pledges) As of June 30, 2025, the Group's total borrowings amounted to **RMB 3,231.5 million**, a **3.5% decrease** year-on-year, with secured borrowings decreasing and unsecured borrowings increasing; the Group had total bank facilities of approximately **RMB 13,820.2 million**, of which **RMB 934.5 million** remained available, and had pledged assets with a total carrying amount of approximately **RMB 2,693.8 million** as collateral for bank facilities Borrowing Structure (June 30, 2025 vs December 31, 2024) | Indicator | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | Change (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Total borrowings | 3,231,501 | 3,348,740 | (117,239) | -3.5% | | Secured borrowings | 980,795 | 1,374,077 | (393,282) | -28.6% | | Unsecured borrowings | 2,250,706 | 1,974,663 | 276,043 | 14.0% | - As of June 30, 2025, the Group had obtained total bank facilities of approximately **RMB 13,820.19 million**, of which approximately **RMB 934.55 million** remained available[107](index=107&type=chunk) - As of June 30, 2025, the Group had pledged certain assets with a total carrying amount of approximately **RMB 2,693.82 million** as collateral for general bank facilities[111](index=111&type=chunk) [Financial Ratios](index=46&type=section&id=4.7.3%20Financial%20Ratios) For the six months ended June 30, 2025, the debt-to-asset ratio increased to **0.77 times**, return on equity improved from **negative 10.5% to negative 8.2%**, and return on assets improved from **negative 4.0% to negative 3.2%**, primarily benefiting from a reduction in losses Financial Ratios (Six Months Ended June 30, 2025 vs Year Ended December 31, 2024) | Financial Ratio | Six Months Ended June 30, 2025 | Year Ended December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Debt-to-asset ratio | 0.77 times | 0.75 times | 0.02 times | | Return on equity (annualized) | -8.2% | -10.5% | 2.3% | | Return on assets (annualized) | -3.2% | -4.0% | 0.8% | - The debt-to-asset ratio increased primarily because the decrease in the Group's total interest-bearing borrowings was less than the decrease in total equity[114](index=114&type=chunk) - Return on equity improved from **negative 10.5% to negative 8.2%**, mainly due to a reduction in losses, and return on assets improved from **negative 4.0% to negative 3.2%**, primarily due to the Group's improved loss position[116](index=116&type=chunk)[118](index=118&type=chunk) [Contractual Obligations and Off-Balance Sheet Arrangements](index=47&type=section&id=4.8%20Contractual%20Obligations%20and%20Off-Balance%20Sheet%20Arrangements) As of June 30, 2025, the Group had contracted but unprovided capital expenditure of **RMB 15.2 million** for the acquisition of property, plant and equipment; the Group has no significant off-balance sheet arrangements, material contingent liabilities, or guarantees, but Xinyang Jingang faces litigation disputes of approximately **RMB 174.5 million** Capital Commitments (June 30, 2025 vs December 31, 2024) | Indicator | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | Change (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Contracted but unprovided capital expenditure for the acquisition of property, plant and equipment | 15,167 | 18,215 | (3,048) | -16.7% | - The Group has **no significant off-balance sheet arrangements**[121](index=121&type=chunk) - The Group has **no significant contingent liabilities or guarantees**, and lawsuits against Group companies primarily involve Xinyang Jingang (a 70% owned subsidiary) with certain raw material suppliers and coke oven construction and facility suppliers, with litigation amounts totaling approximately **RMB 174.5 million**, though no material contingent liabilities are expected[108](index=108&type=chunk) [Market Risks](index=48&type=section&id=4.9%20Market%20Risks) The Group faces commodity price risk (fluctuations in raw material coal and product market prices), interest rate risk (fixed and floating-rate borrowings), and credit risk (concentration in trade receivables and related party balances); the Group aims to mitigate risks through regular operational and financial activities and currently has no foreign exchange or interest rate hedging contracts - The Group faces commodity price risk from fluctuations in raw material prices (especially coal) and the prevailing market prices of its products[126](index=126&type=chunk) - The Group is exposed to fair value interest rate risk related to interest-bearing bank loans, bank borrowings, and other fixed-rate borrowings, as well as cash flow interest rate risk related to floating-rate borrowings; the Group currently has no interest rate hedging policy[127](index=127&type=chunk)[129](index=129&type=chunk) - The Group has a significant concentration of credit risk in trade receivables and trade-related amounts due from shareholders and related parties, with over **70.36%** of the risk concentrated in the five largest outstanding balances for the six months ended June 30, 2025[130](index=130&type=chunk) - All of the Group's operations are conducted within mainland China, and it has no foreign currency transactions, assets, or liabilities, thus facing no significant foreign exchange risk, except for certain Hong Kong dollar amounts yet to be remitted back to China[125](index=125&type=chunk) [Dividend Policy and Retirement Benefit Schemes](index=50&type=section&id=4.10%20Dividend%20Policy%20and%20Retirement%20Benefit%20Schemes) The Group's dividend policy stipulates an annual dividend payout of no less than **25%** of the profit and total comprehensive income attributable to shareholders for the year; based on the interim results, the Board resolved not to declare an interim dividend, and the Group participates in defined contribution retirement benefit schemes for its Chinese employees and the Mandatory Provident Fund Scheme for its Hong Kong employees - The Group has formulated a dividend policy stating that, in compliance with relevant laws and regulations in China and Hong Kong, the Company's annual dividend payout will be **no less than 25%** of the profit and total comprehensive income attributable to the Company's shareholders for the year[133](index=133&type=chunk) - Based on the interim results and financial position for the six months ended June 30, 2025, the Board resolved **not to declare an interim dividend**[134](index=134&type=chunk) - The Group's Chinese employees participate in various defined contribution retirement benefit schemes organized by relevant provincial and municipal governments in China, while Hong Kong employees participate in the Mandatory Provident Fund Scheme under the Mandatory Provident Fund Schemes Ordinance[135](index=135&type=chunk) [Corporate Governance and Other Information](index=51&type=section&id=Corporate%20Governance%20and%20Other%20Information) This section covers the company's corporate governance framework, board and supervisory committee composition, shareholder information, and employee policies [Corporate Governance Framework](index=51&type=section&id=5.1%20Corporate%20Governance%20Framework) The Company adheres to a sound and efficient corporate governance philosophy, establishing its Articles of Association and adopting Appendix C1 of the Listing Rules 'Corporate Governance Code', striving for high-level corporate governance through its internal control system and committee terms of reference, and has complied with all code provisions of the Corporate Governance Code for the six months ended June 30, 2025 - The Company adheres to a sound and efficient corporate governance philosophy, while also prioritizing shareholder interests, determined to achieve a high level of corporate governance[136](index=136&type=chunk) - For the six months ended June 30, 2025, the Company has complied with **all code provisions** under the Corporate Governance Code[137](index=137&type=chunk) [Board of Directors and Supervisory Committee](index=52&type=section&id=5.2%20Board%20of%20Directors%20and%20Supervisory%20Committee) The Fourth Session of the Board of Directors was appointed on June 16, 2025, comprising **nine directors** (three executive, three non-executive, three independent non-executive) for a three-year term, with Mr. Liu Liangyu resigning as Chairman on July 25, 2025; the Fourth Session of the Supervisory Committee was appointed on the same day, comprising **six supervisors** (two shareholder representatives, two employee representatives, two independent) - The directors of the Fourth Session of the Board of Directors were appointed at the Annual General Meeting held on **June 16, 2025**, comprising **nine directors**, including three executive directors, three non-executive directors, and three independent non-executive directors[139](index=139&type=chunk) - Mr. Liu Liangyu (Chairman of the Board) resigned on **July 25, 2025**[139](index=139&type=chunk) - The supervisors of the Fourth Session of the Supervisory Committee were appointed at the Annual General Meeting held on **June 16, 2025**, comprising **six supervisors**, including two shareholder representative supervisors, two employee representative supervisors, and two independent supervisors[139](index=139&type=chunk) [Securities Interests of Directors, Supervisors, and Senior Management](index=53&type=section&id=5.3%20Securities%20Interests%20of%20Directors%2C%20Supervisors%2C%20and%20Senior%20Management) As of June 30, 2025, Mr. Liu Liangyu and Mr. Xu Huaping indirectly held **29.26%** of the Company's H shares through controlled corporations, Mr. Wang Lijie indirectly held **8.01%** of H shares through a controlled corporation, and Supervisor Mr. Zhou Tao beneficially owned **0.001%** of H shares; during the reporting period, all directors and supervisors complied with the standard code for securities transactions Interests of Directors, Supervisors, and Chief Executive in the Company's Securities (June 30, 2025) | Name | Nature of Interest | Class of Shares | Number of Shares Held (thousand shares) | Approximate Percentage (%) | | :--- | :--- | :--- | :--- | :--- | | Liu Liangyu | Interest in controlled corporation | H shares | 156,665 (L) | 29.26% | | Xu Huaping | Interest in controlled corporation | H shares | 156,665 (L) | 29.26% | | Wang Lijie | Interest in controlled corporation | H shares | 42,900 (L) | 8.01% | | Zhou Tao | Beneficial owner | H shares | 8 (L) | 0.001% | - Following specific inquiries with the directors and supervisors, the Company confirmed that all directors and supervisors complied with the standard for securities transactions by directors as set out in the Standard Code for the six months ended June 30, 2025[138](index=138&type=chunk) - On **August 5, 2025**, Jinma Coking issued a termination notice to Beijing Weigang, and Mr. Liu Liangyu and Mr. Xu Huaping are **no longer deemed to hold any share interests** in the Company[146](index=146&type=chunk) [Interests of Substantial Shareholders in Securities](index=55&type=section&id=5.4%20Interests%20of%20Substantial%20Shareholders%20in%20Securities) As of June 30, 2025, Jinma Hong Kong beneficially owned **30.26%** of H shares, with Jinma Coking, Jin Xing, Mr. Rao Zhaohui, and others indirectly holding the same proportion through controlled corporations; Maanshan Iron & Steel beneficially owned **26.89%**, and Jiangxi Pinggang Industrial Co., Ltd. beneficially owned **9.89%** Interests of Substantial Shareholders in the Company's Securities (June 30, 2025) | Name/Entity | Nature of Interest | Class of Shares | Number of Shares Held (thousand shares) | Approximate Percentage (%) | | :--- | :--- | :--- | :--- | :--- | | Jinma Hong Kong | Beneficial owner | H shares | 162,000 (L) | 30.26% | | Jinma Coking | Interest in controlled corporation | H shares | 162,000 (L) | 30.26% | | Jin Xing | Interest in controlled corporation | H shares | 162,000 (L) | 30.26% | | Mr. Rao Zhaohui | Interest in controlled corporation | H shares | 162,000 (L) | 30.26% | | Maanshan Iron & Steel | Beneficial owner | H shares | 144,000 (L) | 26.89% | | Jiangxi Pinggang Industrial Co., Ltd. | Beneficial owner | H shares | 52,945 (L) | 9.89% | | Jiyuan Jinma Xingye Investment Co., Ltd. | Beneficial owner | H shares | 42,900 (L) | 8.01% | - On **August 5, 2025**, Jinma Coking delivered a termination notice to Beijing Weigang, and Beijing Weigang, Shandong Weijiao, Shandong Hengkun, Weifang Zhenxing, Hainan Hengkun, and Mr. Li Zhengchao are **no longer deemed to hold any share interests** in the Company[154](index=154&type=chunk) [Employees and Remuneration Policy](index=58&type=section&id=5.5%20Employees%20and%20Remuneration%20Policy) As of June 30, 2025, the Group had a total of **2,638 employees**, with staff costs of approximately **RMB 127.6 million**, a **13.1% decrease** year-on-year; the Remuneration Committee is responsible for formulating and reviewing remuneration policies for directors and senior management based on performance and market practices, and the Group provides social insurance and housing provident funds for all employees, along with annual training programs - As of June 30, 2025, the Group had a total of **2,638 employees**, with staff costs of approximately **RMB 127.6 million**, compared to approximately **RMB 146.8 million** recorded in the same period last year, representing a **13.1% decrease** year-on-year[155](index=155&type=chunk) - The Remuneration Committee is responsible for recommending to the Board the Company's policies and structure for directors' remuneration, the remuneration packages for individual executive directors and senior management, and reviewing the remuneration policies for all directors and management of the Group based on the Group's overall operating performance, individual performance, and comparative market practices[155](index=155&type=chunk) - The Group has made full contributions to social insurance and housing provident funds for all employees in accordance with relevant Chinese labor laws and regulations, and has formulated annual training programs[155](index=155&type=chunk)[156](index=156&type=chunk) [Audit Committee and Interim Results Review](index=58&type=section&id=5.6%20Audit%20Committee%20and%20Interim%20Results%20Review) The Audit Committee, comprising three independent non-executive directors, is responsible for reviewing financial information, monitoring the financial reporting system, risk management, and internal control systems; the Audit Committee has reviewed this interim results announcement and the unaudited condensed consolidated interim financial statements, which have been reviewed by the external auditor, Deloitte Touche Tohmatsu, in accordance with International Standard on Review Engagements - The Audit Committee comprises three independent non-executive directors, namely Mr. Su Jian Gang, Mr. Zhang Xi Cheng, and Mr. Wen Guo Liang, with Mr. Wen Guo Liang serving as Chairman, responsible for reviewing the Company's financial information and monitoring its financial reporting system, risk management, and internal control systems[157](index=157&type=chunk) - The Audit Committee has reviewed this interim results announcement; the Company's unaudited condensed consolidated interim results for the reporting period have been reviewed by the Company's external auditor, Deloitte Touche Tohmatsu, in accordance with International Standard on Review Engagements 2410 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' issued by the International Auditing and Assurance Standards Board[157](index=157&type=chunk) [Report Publication and Acknowledgements](index=59&type=section&id=5.7%20Report%20Publication%20and%20Acknowledgements) The Company's interim report for the six months ended June 30, 2025, will be published on the HKEX website and the Company's website; the Board of Directors extends its sincere gratitude to all employees, shareholders, and business partners - The Company's interim report for the six months ended June 30, 2025, will be published on the Hong Kong Stock Exchange website (www.hkexnews.hk) and the Company's website (www.hnjmny.com)[158](index=158&type=chunk) - The Board of Directors extends its sincere gratitude to all employees, shareholders, and business partners for their continuous support to the Group[160](index=160&type=chunk)

[Announcement Information](index=1&type=section&id=Announcement%20Information) [Disclaimer](index=1&type=section&id=Disclaimer) HKEX and HKSE disclaim responsibility for this announcement's content, accuracy, completeness, and any related losses - Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited are not responsible for the content of this announcement, make no statement as to its accuracy or completeness, and expressly disclaim any liability for any loss arising from or in reliance upon the whole or any part of the contents of this announcement[1](index=1&type=chunk) [Company Information and Reporting Period](index=1&type=section&id=Company%20Information%20and%20Reporting%20Period) FUTURE WORLD HOLDINGS LIMITED reports unaudited condensed consolidated interim results for the six months ended 30 June 2025 - Company Name: FUTURE WORLD HOLDINGS LIMITED, Stock Code: **572**[2](index=2&type=chunk) - Reporting Period: Unaudited condensed consolidated interim results for the six months ended **30 June 2025**[2](index=2&type=chunk)[3](index=3&type=chunk) [Condensed Consolidated Financial Statements](index=2&type=section&id=Condensed%20Consolidated%20Financial%20Statements) [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=2&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) Revenue, net profit, and comprehensive income rose significantly, primarily from financial asset fair value gains and reduced credit loss provisions, despite increased investment property fair value losses Key Financial Performance Indicators | Indicator | Six Months Ended 30 June 2025 (HK$ Thousand) | Six Months Ended 30 June 2024 (HK$ Thousand) | Change | | :--- | :--- | :--- | :--- | | Revenue | 58,254 | 23,598 | **Increased 146.9%** | | Gross Profit | 25,557 | 14,729 | **Increased 73.5%** | | Operating Profit | 36,368 | 26,529 | **Increased 37.1%** | | Profit Before Income Tax | 16,550 | 17,325 | **Decreased 4.5%** | | Profit for the Period | 17,703 | 12,276 | **Increased 44.2%** | | Total Comprehensive Income for the Period | 22,537 | 7,081 | **Increased 218.3%** | | Profit for the Period Attributable to Owners of the Company | 17,703 | 13,089 | **Increased 35.2%** | | Basic Earnings Per Share Attributable to Owners of the Company | **HK$0.06** | **HK$0.06** | **Unchanged** | [Condensed Consolidated Statement of Financial Position](index=4&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of 30 June 2025, the company's total assets and net assets grew, non-current investment properties increased, current loans decreased, and current trade/other payables rose significantly Key Financial Position Indicators | Indicator | 30 June 2025 (HK$ Thousand) | 31 December 2024 (HK$ Thousand) | Change | | :--- | :--- | :--- | :--- | | **Non-current Assets** | | | | | Investment Properties | 1,091,585 | 971,414 | **Increased 12.4%** | | **Current Assets** | | | | | Loans and Interest Receivables | 130,034 | 163,831 | **Decreased 20.7%** | | Financial Assets at Fair Value Through Profit or Loss | 144,462 | 115,321 | **Increased 25.3%** | | Cash and Bank Balances | 57,144 | 99,275 | **Decreased 42.5%** | | **Current Liabilities** | | | | | Trade Payables, Accruals and Other Payables | 86,097 | 38,453 | **Increased 123.9%** | | Bank Borrowings | 182,304 | 217,368 | **Decreased 16.1%** | | **Net Assets** | 892,635 | 848,030 | **Increased 5.3%** | | **Total Equity** | 892,635 | 848,030 | **Increased 5.3%** | [Notes to the Condensed Consolidated Interim Financial Statements](index=6&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Interim%20Financial%20Statements) [1. General Information](index=6&type=section&id=1.%20General%20Information) The company, incorporated in the Cayman Islands and listed on the Main Board of HKEX, primarily engages in hotel operations, property investment and management, financing services, securities trading and investment, securities brokerage, and asset management services - The company is incorporated in the Cayman Islands, with its shares listed on the Main Board of The Stock Exchange of Hong Kong Limited[8](index=8&type=chunk) - The Group's principal activities include hotel operations, property investment management and agency, provision of financing services, securities trading and investment, securities brokerage business, and asset management services[8](index=8&type=chunk) [2. Basis of Preparation](index=6&type=section&id=2.%20Basis%20of%20Preparation) The interim financial statements are prepared in accordance with HKAS 34 and Appendix D2 of the Listing Rules, primarily on a historical cost basis, with investment properties and financial assets at fair value through profit or loss/other comprehensive income measured at fair value, and are unaudited - The interim financial statements are prepared in accordance with Hong Kong Accounting Standard 34 and Appendix D2 of the Listing Rules[11](index=11&type=chunk) - The statements are prepared primarily on a historical cost basis, except for investment properties, financial assets at fair value through profit or loss, and financial assets at fair value through other comprehensive income, which are measured at fair value[12](index=12&type=chunk) - The interim financial statements are unaudited[13](index=13&type=chunk) [3. Adoption of New and Revised Hong Kong Financial Reporting Standards](index=7&type=section&id=3.%20Adoption%20of%20New%20and%20Revised%20Hong%20Kong%20Financial%20Reporting%20Standards) During the period, the Group first applied amendments to HKFRSs issued by the HKICPA, which had no material impact on financial position or performance, while the Board assessed new standards issued but not yet effective, expecting some, like HKFRS 18, to affect future financial statement presentation [(a) Amendments to Hong Kong Financial Reporting Standards – Effective 1 January 2025](index=7&type=section&id=(a)%20Amendments%20to%20Hong%20Kong%20Financial%20Reporting%20Standards%20%E2%80%93%20Effective%201%20January%202025) - The Group first applied HKAS 21 (Amendments) "Lack of Exchangeability" during the period, which had no material impact on its financial position and performance[14](index=14&type=chunk) [(b) New and Revised Hong Kong Financial Reporting Standards Issued But Not Yet Effective](index=7&type=section&id=(b)%20New%20and%20Revised%20Hong%20Kong%20Financial%20Reporting%20Standards%20Issued%20But%20Not%20Yet%20Effective) - HKFRS 18 "Presentation and Disclosure in Financial Statements" will be effective for annual periods beginning on or after 1 January 2027, and is expected to impact the presentation of the condensed consolidated statement of profit or loss and other comprehensive income and future financial statement disclosures, with the Group currently assessing its impact[20](index=20&type=chunk)[21](index=21&type=chunk) - HKFRS 9 and HKFRS 7 (Amendments) "Classification and Measurement of Financial Instruments" will be effective for annual periods beginning on or after 1 January 2026, and are not expected to have a significant impact on the Group's financial position and performance[16](index=16&type=chunk)[19](index=19&type=chunk) [4. Revenue](index=9&type=section&id=4.%20Revenue) During the period, the Group's revenue significantly increased by **146.9%** to **HK$58,254 thousand**, primarily driven by substantial increases in income from hotel operations and related businesses, property agency services, and property management services Revenue by Source | Revenue Source | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Food and Beverage and Other Services Income from Hotel Operations and Related Businesses | 21,209 | 10,203 | **Increased 107.9%** | | Commission Income from Property Agency Services | 9,788 | 4,066 | **Increased 140.7%** | | Hotel Room Rental and Hostel Cleaning Services Income from Hotel Operations and Related Businesses | 14,679 | – | **New** | | Income from Property Management Services | 3,962 | 1,284 | **Increased 208.6%** | | Management Fee Income from Asset Management Services | 1,626 | – | **New** | | Rental Income from Property Investment | 3,199 | 3,615 | **Decreased 11.5%** | | Interest Income from Provision of Financing Services | 3,791 | 4,430 | **Decreased 14.4%** | | **Total Revenue** | **58,254** | **23,598** | **Increased 146.9%** | [5. Segment Information](index=10&type=section&id=5.%20Segment%20Information) The Group's operating segments include hotel operations and related businesses, property investment management and agency services, provision of financing services, securities trading and investment, securities brokerage business, asset management services, and trading business and related services; asset management services were added this period, while high-tech business is no longer a separately reportable segment Segment Revenue and Financial Performance | Segment | 2025 Revenue (HK$ Thousand) | 2024 Revenue (HK$ Thousand) | 2025 Segment Financial Performance (HK$ Thousand) | 2024 Segment Financial Performance (HK$ Thousand) | | :--- | :--- | :--- | :--- | | Hotel Operations and Related Businesses | 35,888 | 10,203 | (7,348) | (1,318) | | Property Investment, Management and Agency Services | 16,949 | 8,965 | (42,295) | (18,251) | | Provision of Financing Services | 3,791 | 4,430 | 3,582 | 28,413 | | Securities Trading and Investment | – | – | 73,601 | (161) | | Securities Brokerage Business | – | – | (597) | (608) | | Asset Management Services | 1,626 | – | (147) | – | | Trading Business and Related Services | – | – | (28) | (57) | | High-tech Business | – | – | – | – | | **Total** | **58,254** | **23,598** | **26,796** | **7,990** | - Asset management services commenced during the period following the acquisition of a subsidiary and are considered a new operating and reportable segment[27](index=27&type=chunk) - High-tech business is no longer a separate operating and reportable segment after the disposal of a subsidiary[27](index=27&type=chunk) Segment Assets and Liabilities | Segment | 2025 Assets (HK$ Thousand) | 2024 Assets (HK$ Thousand) | 2025 Liabilities (HK$ Thousand) | 2024 Liabilities (HK$ Thousand) | | :--- | :--- | :--- | :--- | | Hotel Operations and Related Businesses | 198,001 | 197,529 | 138,391 | 133,864 | | Property Investment, Management and Agency Services | 1,138,922 | 1,011,795 | 496,109 | 458,112 | | Provision of Financing Services | 135,802 | 203,710 | – | – | | Securities Trading and Investment | 160,385 | 88,077 | 83,934 | 116,029 | | Securities Brokerage Business | 4,750 | 4,348 | 85 | – | | Asset Management Services | 2,895 | – | 724 | – | | Trading Business and Related Services | 1,085 | 1,063 | 334 | 1,828 | | High-tech Business | – | 436 | – | 2,236 | | **Total Segment Assets** | **1,641,840** | **1,506,958** | **719,577** | **712,069** | | Unallocated Corporate Assets/Liabilities | 81,544 | 160,575 | 111,172 | 107,434 | | **Consolidated Assets/Liabilities** | **1,723,384** | **1,667,533** | **830,749** | **819,503** | [6. Finance Costs](index=11&type=section&id=6.%20Finance%20Costs) Finance costs for the period significantly increased to **HK$19,818 thousand**, primarily due to substantial growth in interest expenses on other borrowings, lease liabilities, and a loan from a director Finance Costs Breakdown | Finance Cost Item | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Interest Expense on Bank Borrowings | 3,521 | 6,457 | **Decreased 45.4%** | | Interest Expense on Other Borrowings | 11,717 | 841 | **Increased 1293.2%** | | Interest Expense on Lease Liabilities | 1,005 | 46 | **Increased 2084.8%** | | Interest Expense on Promissory Notes | 223 | – | **New** | | Interest Expense on Loan from a Director | 2,013 | – | **New** | | **Total Finance Costs** | **19,818** | **9,204** | **Increased 115.3%** | [7. Profit Before Income Tax](index=12&type=section&id=7.%20Profit%20Before%20Income%20Tax) Profit before income tax is arrived at after deducting various expenses such as staff costs, depreciation, cost of inventories, and operating expenses for investment properties, with total staff costs significantly increasing during the period Selected Expenses | Item | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Total Staff Costs | 20,130 | 4,051 | **Increased 396.9%** | | Cost of Inventories Recognized as Expense | 19,830 | 8,869 | **Increased 123.6%** | | Depreciation of Property, Plant and Equipment | 5,902 | 1,200 | **Increased 391.8%** | | Depreciation of Right-of-Use Assets | 1,599 | 1,378 | **Increased 16.0%** | [8. Income Tax (Credit) / Expense](index=12&type=section&id=8.%20Income%20Tax%20(Credit)%20%2F%20Expense) Income tax for the period shifted from an expense to a credit, primarily due to a deferred tax credit, with the Group's Chinese subsidiaries accruing enterprise income tax at a 25% rate, while no Hong Kong profits tax was provided due to the absence of assessable profits Income Tax (Credit) / Expense Breakdown | Item | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | China Enterprise Income Tax | 1,736 | 1,019 | **Increased 70.4%** | | Deferred Tax | (2,889) | 4,030 | **Shifted from expense to credit** | | **Income Tax (Credit) / Expense** | **(1,153)** | **5,049** | **Shifted from expense to credit** | - No provision for Hong Kong profits tax was made as no assessable profits arose in Hong Kong[32](index=32&type=chunk) - Provision for enterprise income tax for Chinese subsidiaries is calculated at a rate of **25%**[32](index=32&type=chunk) [9. Dividends](index=13&type=section&id=9.%20Dividends) The Board of Directors does not recommend the payment of any dividend for the current period - The Board of Directors does not recommend the payment of any dividend for the six months ended 30 June 2025[33](index=33&type=chunk) [10. Earnings Per Share](index=13&type=section&id=10.%20Earnings%20Per%20Share) Basic earnings per share attributable to owners of the company remained at **HK$0.06** for the period, consistent with the prior year, as the increase in profit was offset by a corresponding increase in the weighted average number of ordinary shares, and diluted earnings per share were the same as basic earnings per share due to the absence of dilutive potential ordinary shares Earnings Per Share Calculation | Indicator | 2025 (HK$ Thousand / Thousand Shares) | 2024 (HK$ Thousand / Thousand Shares) | | :--- | :--- | :--- | | Profit for the Period Attributable to Owners of the Company | 17,703 | 13,089 | | Weighted Average Number of Ordinary Shares | 283,325 | 232,191 | | **Basic Earnings Per Share** | **HK$0.06** | **HK$0.06** | - Diluted earnings per share are the same as basic earnings per share because there were no dilutive potential ordinary shares outstanding or to be issued for the six months ended 30 June 2025 and 30 June 2024[35](index=35&type=chunk) [11. Movements in Property, Plant and Equipment, Right-of-Use Assets and Investment Properties](index=13&type=section&id=11.%20Movements%20in%20Property,%20Plant%20and%20Equipment,%20Right-of-Use%20Assets%20and%20Investment%20Properties) During the period, the Group made additions to property, plant and equipment, right-of-use assets, and investment properties, with a significant increase in investment property additions primarily through subsidiary acquisitions and property transfers from a director; fair value losses on investment properties expanded, and some investment properties are pledged Additions to Assets | Asset Type | 2025 Additions (HK$ Thousand) | 2024 Additions (HK$ Thousand) | | :--- | :--- | :--- | | Property, Plant and Equipment | 849 | 2,691 | | Right-of-Use Assets | 292 | 327 | | Investment Properties | 146,851 | 103,033 | - Investment property additions include approximately **HK$54,769 thousand** from the acquisition of a subsidiary and approximately **HK$88,000 thousand** from the transfer of property from a director[37](index=37&type=chunk) - Fair value losses on investment properties expanded to **HK$38,572 thousand** (2024: HK$17,106 thousand)[38](index=38&type=chunk) - As of 30 June 2025, investment properties with a carrying amount of approximately **HK$549,000 thousand** were pledged as collateral for bank borrowings and other borrowings[39](index=39&type=chunk)[54](index=54&type=chunk) [12. Financial Assets at Fair Value Through Other Comprehensive Income](index=14&type=section&id=12.%20Financial%20Assets%20at%20Fair%20Value%20Through%20Other%20Comprehensive%20Income) As of 30 June 2025, financial assets at fair value through other comprehensive income primarily consisted of Hong Kong listed equity securities, showing a slight increase in market value, with some assets pledged Financial Assets at Fair Value Through Other Comprehensive Income | Item | 30 June 2025 (HK$ Thousand) | 31 December 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Hong Kong Listed Equity Securities | 10,406 | 9,909 | - As of 30 June 2025, financial assets at fair value through other comprehensive income with a carrying amount of approximately **HK$3,590 thousand** were pledged as collateral for other borrowings granted to the Group[42](index=42&type=chunk) [13. Financial Assets at Fair Value Through Profit or Loss](index=15&type=section&id=13.%20Financial%20Assets%20at%20Fair%20Value%20Through%20Profit%20or%20Loss) As of 30 June 2025, financial assets at fair value through profit or loss, primarily Hong Kong listed equity securities, increased to a total of **HK$144,462 thousand**, generating a fair value gain of **HK$58,639 thousand** for the period, following the redemption of an unlisted Cayman Islands investment fund Financial Assets at Fair Value Through Profit or Loss | Item | 30 June 2025 (HK$ Thousand) | 31 December 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Hong Kong Listed Equity Securities | 144,032 | 76,233 | | Cayman Islands Unlisted Investment Fund | – | 38,720 | | China Financial Products | 430 | 368 | | **Total** | **144,462** | **115,321** | - Fair value changes resulted in a gain of **HK$58,639 thousand** for the period[43](index=43&type=chunk) - The Cayman Fund was redeemed for a consideration of approximately **HK$22,892 thousand** during the period[45](index=45&type=chunk) [14. Loans and Interest Receivables](index=16&type=section&id=14.%20Loans%20and%20Interest%20Receivables) As of 30 June 2025, total loans and interest receivables decreased to **HK$130,034 thousand**, primarily from the money lending business, with the loan to "Xiaoyu" remaining the largest portion, secured by shares of a Hong Kong listed company, and some receivables transferred to a director Loans and Interest Receivables | Item | 30 June 2025 (HK$ Thousand) | 31 December 2024 (HK$ Thousand) | | :--- | :--- | :--- | | From Money Lending Business (net of provision) | 130,034 | 154,011 | | Bills Receivable (net of provision) | – | 9,820 | | **Total** | **130,034** | **163,831** | - Loans receivable from "Xiaoyu" (net of provision) amounted to approximately **HK$94,277 thousand**, secured by shares of a Hong Kong listed company with a fair value of approximately **HK$1,035,239 thousand**[46](index=46&type=chunk) - Certain loans and interest receivables totaling approximately **HK$13,571 thousand** were transferred to one of the Company's directors[46](index=46&type=chunk) - As of 30 June 2025, the credit loss provision for loans and interest receivables was approximately **HK$17,050 thousand**, with an additional provision of **HK$198 thousand** recognized during the period[103](index=103&type=chunk)[106](index=106&type=chunk) [15. Trade and Other Receivables](index=17&type=section&id=15.%20Trade%20and%20Other%20Receivables) As of 30 June 2025, net trade receivables decreased, while net other receivables significantly increased, primarily due to growth in deposits and prepayments, and a reversal of credit loss provision for trade receivables was recognized during the period Trade and Other Receivables | Item | 30 June 2025 (HK$ Thousand) | 31 December 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Net Trade Receivables | 8,763 | 11,864 | | Other Receivables | 30,377 | 8,793 | | Deposits and Prepayments | 21,912 | 2,237 | | Other Recoverable Taxes | 12,276 | 12,351 | | **Total** | **73,328** | **35,245** | - A reversal of credit loss provision for trade receivables of **HK$1,469 thousand** was recognized in the consolidated statement of profit or loss during the period[50](index=50&type=chunk) - The balance of other receivables primarily includes approximately **HK$3,281 thousand** in gross rental income receivable related to investment properties in China[50](index=50&type=chunk) [16. Trade Payables, Accruals and Other Payables](index=19&type=section&id=16.%20Trade%20Payables,%20Accruals%20and%20Other%20Payables) As of 30 June 2025, total trade payables, accruals, and other payables significantly increased to **HK$86,097 thousand**, primarily driven by substantial growth in other payables and rental income received in advance Trade Payables, Accruals and Other Payables | Item | 30 June 2025 (HK$ Thousand) | 31 December 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Trade Payables | 5,073 | 4,651 | | Other Payables | 67,856 | 19,798 | | Accruals | 3,549 | 8,993 | | Rental Income Received in Advance | 3,744 | 933 | | **Total** | **86,097** | **38,453** | - Approximately **HK$2,857 thousand** of other payables represent borrowings from independent third parties, bearing interest at an annual rate of **3%**[52](index=52&type=chunk) [17. Bank Borrowings](index=20&type=section&id=17.%20Bank%20Borrowings) As of 30 June 2025, total bank borrowings decreased to **HK$182,304 thousand**, with the majority being long-term, secured by investment properties and bearing floating interest rates Bank Borrowings by Repayment Term | Repayment Term | 30 June 2025 (HK$ Thousand) | 31 December 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Within One Year | 10,088 | 40,089 | | Over One Year, But Less Than Two Years | 10,382 | 10,406 | | Over Two Years, But Less Than Five Years | 33,116 | 33,243 | | Over Five Years | 128,718 | 133,630 | | **Total** | **182,304** | **217,368** | - Bank borrowings are secured by investment properties with a carrying amount of approximately **HK$549,000 thousand**[54](index=54&type=chunk) [18. Other Borrowings](index=21&type=section&id=18.%20Other%20Borrowings) As of 30 June 2025, total other borrowings increased to **HK$399,661 thousand**, with most classified as non-current liabilities, and these borrowings are secured by investment properties and financial assets at fair value through other comprehensive income Other Borrowings | Item | 30 June 2025 (HK$ Thousand) | 31 December 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Current Liabilities | 92,931 | 87,653 | | Non-current Liabilities | 306,730 | 293,784 | | **Total** | **399,661** | **381,437** | - Other borrowings are secured by investment properties with a carrying amount of approximately **HK$246,000 thousand** and equity investments at fair value through other comprehensive income of approximately **HK$3,590 thousand**[55](index=55&type=chunk) [19. Promissory Notes](index=21&type=section&id=19.%20Promissory%20Notes) During the period, the Group issued new promissory notes to settle part of the consideration for asset acquisitions and repaid some existing promissory notes by issuing shares, resulting in a gain on early redemption - The Group issued promissory notes with a principal amount of **HK$15,778 thousand** to settle part of the consideration for the acquisition of assets as described in note 23(b), maturing on 31 March 2028 and bearing interest at an annual rate of **5%**[56](index=56&type=chunk) - Promissory notes with a principal amount of **HK$13,600 thousand** were settled by issuing **23,188,310 shares** of the Company with a fair value of approximately **HK$11,594 thousand**, resulting in a gain on early redemption of approximately **HK$2,319 thousand**[56](index=56&type=chunk) [20. Bonds Payable](index=22&type=section&id=20.%20Bonds%20Payable) During the period, the Group partially repaid bonds payable and extended their maturity date to 4 July 2025; after the reporting period, the remaining bonds payable were fully repaid - The Group partially repaid bonds payable amounting to approximately **HK$22,890 thousand** during the period[58](index=58&type=chunk) - After the reporting period, the remaining outstanding bonds payable of approximately **HK$23,363 thousand** were repaid on 16 July 2025[58](index=58&type=chunk) [21. Amount Due from a Director and Loan from a Director](index=22&type=section&id=21.%20Amount%20Due%20from%20a%20Director%20and%20Loan%20from%20a%20Director) As of 30 June 2025, the net amount due from a director (Mr. Lai Long Wai) was **HK$1,137 thousand**, primarily offset by property acquisition and receivable transfers, while the Group also obtained loans from Mr. Lai, mostly interest-free long-term loans Amounts Due from/to a Director | Item | 30 June 2025 (HK$ Thousand) | 31 December 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Amount Due from Mr. Lai Long Wai | 1,137 | 65,746 | | Loan from Mr. Lai (Total) | 74,669 | 70,608 | | - Non-current Liabilities | 52,779 | 49,324 | | - Current Liabilities | 21,890 | 21,284 | - The amount due from Mr. Lai was a net of **HK$1,137 thousand** after offsetting property acquisition (**HK$88,000 thousand**) and transfer of receivables (**HK$23,391 thousand**)[59](index=59&type=chunk) - Mr. Lai provided interest-free loans totaling approximately **HK$73,430 thousand** to the Group, maturing on 31 December 2029[60](index=60&type=chunk) [22. Share Capital](index=23&type=section&id=22.%20Share%20Capital) As of 30 June 2025, the company's issued ordinary shares increased to **301,507,892 shares**, primarily due to the allotment and issuance of new shares to settle promissory notes and acquire subsidiaries Share Capital Movements | Date | Number of Ordinary Shares (Thousand Shares) | Amount (HK$ Thousand) | | :--- | :--- | :--- | | 1 January 2024 | 232,190,982 | 92,876 | | Shares Issued (2024) | 21,700,000 | 8,680 | | 31 December 2024 and 1 January 2025 | 253,890,982 | 101,556 | | Shares Issued (H1 2025) | 47,616,910 | 19,047 | | **30 June 2025** | **301,507,892** | **120,603** | - In the first half of 2025, **47,616,910 ordinary shares** were issued to settle promissory notes and acquire subsidiaries[61](index=61&type=chunk) [23. Acquisition of Subsidiaries](index=24&type=section&id=23.%20Acquisition%20of%20Subsidiaries) During the period, the Group completed the acquisitions of Top Smart Fund Management Limited and Aspire Holding Limited, with Top Smart aiming to expand asset management services and Aspire Holding to extend property management services and diversify the property investment portfolio [(a) Acquisition of Assets Through Acquisition of a Subsidiary – Top Smart Fund Management Limited ("Top Smart")](index=24&type=section&id=(a)%20Acquisition%20of%20Assets%20Through%20Acquisition%20of%20a%20Subsidiary%20%E2%80%93%20Top%20Smart%20Fund%20Management%20Limited%20(%22Top%20Smart%22)) - The acquisition of the entire equity interest in Top Smart was completed on 28 January 2025 for a consideration of **HK$2,000 thousand** (**HK$1,000 thousand** in cash and **HK$1,000 thousand** by issuing shares)[62](index=62&type=chunk)[63](index=63&type=chunk) - Top Smart and its subsidiaries engage in Type 9 (asset management) regulated activities, and this acquisition provides a platform for the Group to expand its asset management services in Hong Kong[63](index=63&type=chunk) Fair Value of Identifiable Net Assets Acquired (Top Smart) | Item | Fair Value (HK$ Thousand) | | :--- | :--- | | Total Identifiable Net Assets | 972 | | Goodwill | 842 | | **Total Consideration to be Settled** | **1,814** | [(b) Acquisition of Assets Through Acquisition of a Subsidiary – Aspire Holding Limited ("Aspire Holding")](index=25&type=section&id=(b)%20Acquisition%20of%20Assets%20Through%20Acquisition%20of%20a%20Subsidiary%20%E2%80%93%20Aspire%20Holding%20Limited%20(%22Aspire%20Holding%22)) - The acquisition of the entire equity interest and shareholder loans in Aspire Holding was completed on 1 April 2025 for a total consideration of **HK$27,738 thousand**, paid by issuing shares and promissory notes[66](index=66&type=chunk)[67](index=67&type=chunk) - Aspire Holding holds two properties in Shenzhen, China, and this acquisition is considered an asset acquisition aimed at expanding property management services and diversifying the China property investment portfolio[67](index=67&type=chunk) Fair Value of Identifiable Net Assets Acquired (Aspire Holding) | Item | Fair Value (HK$ Thousand) | | :--- | :--- | | Investment Properties | 54,769 | | Net Liabilities Acquired by the Group | (1,333) | | Add: Transferred Shareholder Loans | 26,771 | | **Total Consideration to be Settled** | **25,438** | [24. Disposal of a Subsidiary](index=26&type=section&id=24.%20Disposal%20of%20a%20Subsidiary) During the period, the Group disposed of its entire equity interest in Jiangsu Weilai Dongnan Technology Co., Ltd., a wholly-owned subsidiary, for a cash consideration of **HK$1**, recognizing a gain on disposal of **HK$1,970 thousand** - The disposal of the entire equity interest in Jiangsu Weilai Dongnan Technology Co., Ltd., a wholly-owned subsidiary, was completed on 13 June 2025 for a cash consideration of **HK$1**[69](index=69&type=chunk) - A gain on disposal of a subsidiary of **HK$1,970 thousand** and a release of exchange reserve of **HK$568 thousand** were recognized[69](index=69&type=chunk) [25. Events After the Reporting Period](index=26&type=section&id=25.%20Events%20After%20the%20Reporting%20Period) After the reporting period, the Group redeemed all its corporate bond investments - On 11 July 2025, the Group redeemed all its corporate bond investments, totaling approximately **HK$23,713 thousand**, including a principal amount of **HK$20,000 thousand** and accrued interest of approximately **HK$3,713 thousand**[70](index=70&type=chunk) [Management Discussion and Analysis](index=27&type=section&id=Management%20Discussion%20and%20Analysis) [Financial Performance](index=27&type=section&id=Financial%20Performance) During the period, the Group's revenue significantly increased by **146.9%** to **HK$58,254 thousand**, and net profit attributable to owners of the company rose to **HK$17,703 thousand**, primarily driven by increased revenue, reversal of credit loss provision for corporate bonds, and fair value gains on financial assets, partially offset by expanded fair value losses on investment properties - Revenue for the period was **HK$58,254 thousand**, representing a **146.9% increase** from **HK$23,598 thousand** in the prior period[71](index=71&type=chunk) - Net profit attributable to owners of the company was approximately **HK$17,703 thousand** (prior period: HK$13,089 thousand)[72](index=72&type=chunk) - The increase in net profit was primarily attributable to increased revenue, a reversal of credit loss provision for corporate bond investments of **HK$8,000 thousand**, and an increase in fair value of financial assets at fair value through profit or loss of approximately **HK$58,600 thousand**[72](index=72&type=chunk) - Fair value losses on investment properties amounted to approximately **HK$38,600 thousand** (prior period: approximately HK$17,100 thousand)[72](index=72&type=chunk) [Business Review](index=27&type=section&id=Business%20Review) The Group's businesses encompass property investment, hotel operations, securities trading and investment, financing services, securities brokerage, and asset management, having expanded its presence in the hotel and property sectors through acquisitions and launched its asset management business during the period [Property Investment, Management and Agency](index=28&type=section&id=Property%20Investment,%20Management%20and%20Agency) - As of 30 June 2025, the Group's investment property portfolio had a market value of approximately **HK$1,091,585 thousand**, covering residential and commercial properties in various cities in Hong Kong and China[74](index=74&type=chunk)[75](index=75&type=chunk) - The acquisition of Aspire Holding Limited, which owns and manages two properties in Shenzhen, China, was completed during the period[76](index=76&type=chunk) - Rental income of approximately **HK$3,199 thousand** (prior period: HK$3,615 thousand) and fair value losses on investment properties of approximately **HK$38,572 thousand** were recorded during the period[77](index=77&type=chunk) - Property agency services commission income was **HK$9,788 thousand** (2024: HK$4,066 thousand) and property management services income was **HK$3,962 thousand** (2024: HK$1,284 thousand)[77](index=77&type=chunk) [Hotel Operations and Related Businesses](index=30&type=section&id=Hotel%20Operations%20and%20Related%20Businesses) - The Group operates and manages Hampton by Hilton Changzhi Luzhou and Junting Hotel Ronghuitong, and provides food and beverage and cleaning services[78](index=78&type=chunk) - The segment recorded revenue of approximately **HK$35,888 thousand** (prior period: HK$10,203 thousand) and a segment loss of approximately **HK$7,348 thousand** (prior period: HK$1,318 thousand) during the period[78](index=78&type=chunk) [Securities Trading and Investment Business](index=30&type=section&id=Securities%20Trading%20and%20Investment%20Business) - The Group's securities trading portfolio includes equity securities of seven companies listed on the Stock Exchange of Hong Kong, primarily classified as financial assets at fair value through other comprehensive income or at fair value through profit or loss[79](index=79&type=chunk)[80](index=80&type=chunk) Securities Trading and Investment Portfolio | Classification | 2025 Market Value (HK$ Thousand) | 31 December 2024 Market Value (HK$ Thousand) | Fair Value Gain/(Loss) for the Period (HK$ Thousand) | | :--- | :--- | :--- | :--- | | At Fair Value Through Other Comprehensive Income | 10,406 | 9,909 | 497 | | At Fair Value Through Profit or Loss | 144,462 | 115,321 | 58,639 | | **Total** | **154,868** | **125,230** | **59,136** | [Performance and Prospects of Major Investee Companies](index=31&type=section&id=Performance%20and%20Prospects%20of%20Major%20Investee%20Companies) [Shankao Holdings Group](index=31&type=section&id=Shankao%20Holdings%20Group) - Shankao Holdings Group's revenue increased by **11.7%** to **HK$5,580.9 million** in FY2024, with profit after tax increasing by **39.9%** to **HK$692.8 million**[83](index=83&type=chunk) - As of 30 June 2025, the closing price was **HK$15.84** (31 December 2024: HK$6.49)[83](index=83&type=chunk) [Shanghai Optics](index=32&type=section&id=Shanghai%20Optics) - Shanghai Optics Group's revenue increased by **11.1%** to **RMB1,084.2 million** in the first half of 2025, with profit after tax increasing by **30.7%** to **RMB272.9 million**[84](index=84&type=chunk) - As of 30 June 2025, the closing price was **HK$37.4** (31 December 2024: HK$24.90)[85](index=85&type=chunk) [Provision of Financing Services](index=32&type=section&id=Provision%20of%20Financing%20Services) - The Group provides secured and unsecured loan financing services through its wholly-owned subsidiary, World Finance, primarily to Hong Kong listed companies and merchants engaged in property investment[86](index=86&type=chunk)[87](index=87&type=chunk) - Interest income from the money lending business for the period was approximately **HK$3,791 thousand**, a **14.4% decrease** from the prior period[88](index=88&type=chunk) - As of 30 June 2025, total loans and interest receivables amounted to **HK$147,084 thousand**, with loans granted to five borrowers at annual interest rates ranging from **5.0% to 7.7%**[89](index=89&type=chunk) Top 5 Borrowers by Loans and Interest Receivables | Rank | Borrower | Carrying Amount of Loans and Interest Receivables (HK$ Million) | Percentage of Total (%) | | :--- | :--- | :--- | :--- | | 1. | Corporate Borrower A | 94.3 | 72.5 | | 2. | Individual Borrower A | 17.1 | 13.1 | | 3. | Individual Borrower C | 10.1 | 7.8 | | 4. | Individual Borrower B | 8.5 | 6.6 | | 5. | Corporate Borrower B | – | – | - The Group has adopted a credit policy and procedures manual providing clear guidelines for credit assessment and loan granting, and regularly assesses borrowers' repayment ability and default risk[97](index=97&type=chunk)[102](index=102&type=chunk) - As of 30 June 2025, the credit loss provision for loans and interest receivables was approximately **HK$17,050 thousand**, with an additional provision of **HK$198 thousand** recognized during the period[103](index=103&type=chunk)[106](index=106&type=chunk) [Securities Brokerage Business](index=39&type=section&id=Securities%20Brokerage%20Business) - The Group conducts securities brokerage business through Future World Securities, engaging in Type 1 (dealing in securities) and Type 4 (advising on securities) regulated activities[107](index=107&type=chunk) - No revenue was generated from securities brokerage business during the period, and a loss of approximately **HK$597 thousand** (prior period: HK$608 thousand) was recorded[107](index=107&type=chunk) [Asset Management](index=39&type=section&id=Asset%20Management) - The Group completed the acquisition of Top Smart Investment Holdings on 28 January 2025, holding the entire equity interest in Top Smart Fund Management, which engages in Type 9 (asset management) regulated activities[108](index=108&type=chunk) - As of 30 June 2025, Top Smart Fund Management had approximately **HK$208,900 thousand** in assets under management[108](index=108&type=chunk) - The asset management segment generated revenue of approximately **HK$1,626 thousand** and recorded a segment loss of approximately **HK$147 thousand** during the period[108](index=108&type=chunk) [Liquidity, Financial Resources and Capital](index=40&type=section&id=Liquidity,%20Financial%20Resources%20and%20Capital) As of 30 June 2025, the Group's cash and bank balances decreased, total borrowings slightly declined, and the gearing ratio improved, while the current ratio slightly decreased Liquidity and Financial Ratios | Indicator | 30 June 2025 (HK$ Thousand) | 31 December 2024 (HK$ Thousand) | Change | | :--- | :--- | :--- | :--- | | Cash and Bank Balances | 57,144 | 99,275 | **Decreased 42.5%** | | Total Borrowings | 695,904 | 728,157 | **Decreased 4.4%** | | Gearing Ratio | **77.96%** | **85.86%** | **Improved** | | Net Assets | 892,635 | 848,030 | **Increased 5.3%** | | Total Current Assets | 430,801 | 495,388 | **Decreased 13.0%** | | Total Current Liabilities | 417,408 | 436,277 | **Decreased 4.3%** | | Current Ratio | **1.03** | **1.14** | **Decreased** | | Finance Costs | 19,818 | 9,204 | **Increased 115.3%** | [Pledge of Assets](index=41&type=section&id=Pledge%20of%20Assets) As of 30 June 2025, the Group had pledged investment properties and certain financial assets as collateral for bank borrowings and other borrowings - Investment properties with a carrying amount of **HK$549,000 thousand** were pledged as collateral for bank borrowings[113](index=113&type=chunk) - Investment properties with a carrying amount of **HK$246,000 thousand** and equity investments at fair value through other comprehensive income of approximately **HK$3,590 thousand** were pledged as collateral for other borrowings[113](index=113&type=chunk) [Treasury Policy](index=41&type=section&id=Treasury%20Policy) The Group adopts a prudent treasury policy, with the Board closely managing risks and ensuring sufficient financial resources to support business activities - The Group adopts a prudent treasury policy, with the Board closely managing business-related risks and ensuring sufficient financial resources[114](index=114&type=chunk) [Capital Structure](index=41&type=section&id=Capital%20Structure) As of 30 June 2025, the company's issued ordinary shares increased to **301,507,892 shares**, primarily used to settle promissory notes and acquire subsidiaries - As of 30 June 2025, the company had **301,507,892 issued ordinary shares** (31 December 2024: 253,890,982 shares)[115](index=115&type=chunk) - A total of **47,616,910 ordinary shares** were allotted during the period to settle promissory notes and acquire Aspire Holding and Top Smart Investment Holdings Limited[115](index=115&type=chunk) [Foreign Exchange Management](index=41&type=section&id=Foreign%20Exchange%20Management) The Group's foreign currency risk is minimal as most business transactions, assets, and liabilities are denominated in Hong Kong dollars; currently, no foreign currency hedging policy is in place, but it will be closely monitored, and hedging considered if necessary - The Group's foreign currency risk is minimal, as most business transactions, assets, and liabilities are denominated in Hong Kong dollars[116](index=116&type=chunk) - No foreign currency hedging policy is currently in place, but it will be closely monitored, and hedging considered if necessary[116](index=116&type=chunk) [Significant Acquisitions and Disposals](index=42&type=section&id=Significant%20Acquisitions%20and%20Disposals) During the period, the Group completed a property acquisition and receivable transfer, as well as the acquisition of Aspire Holding [Acquisition of Property and Transfer of Receivables](index=42&type=section&id=Acquisition%20of%20Property%20and%20Transfer%20of%20Receivables) - The acquisition of the property at Flat B, 28th Floor, Scenic Garden, 20 Lyttelton Road, Hong Kong, for a consideration of **HK$88,000 thousand**, and the transfer of certain receivables of **HK$23,391 thousand**, were completed on 30 June 2025[117](index=117&type=chunk)[118](index=118&type=chunk) [Acquisition of Aspire Holding](index=42&type=section&id=Acquisition%20of%20Aspire%20Holding) - An agreement was entered into on 27 February 2025 to acquire the entire equity interest and shareholder loans in Aspire Holding for considerations of **HK$1,142 thousand** and **HK$26,596 thousand**, respectively[119](index=119&type=chunk) [Future Plans for Material Investments and Capital Assets](index=42&type=section&id=Future%20Plans%20for%20Material%20Investments%20and%20Capital%20Assets) Other than what is disclosed in this announcement, the Group had no future plans for material investments and capital assets as of 30 June 2025 - Other than what is disclosed in this announcement, the Group had no future plans for material investments and capital assets as of 30 June 2025[120](index=120&type=chunk) [Material Investments Held](index=42&type=section&id=Material%20Investments%20Held) Other than what is disclosed in this announcement, the Group had no other material investments requiring disclosure during the period - Other than what is disclosed in this announcement, the Group had no other material investments requiring disclosure during the period[121](index=121&type=chunk) [Litigation and Contingent Liabilities](index=42&type=section&id=Litigation%20and%20Contingent%20Liabilities) As of 30 June 2025, the Group had no material litigation or contingent liabilities - As of 30 June 2025, the Group had no material litigation or contingent liabilities[122](index=122&type=chunk) [Events After Reporting Period](index=43&type=section&id=Events%20After%20Reporting%20Period) Other than what is disclosed in Note 25 to the Condensed Consolidated Interim Financial Statements, there were no other significant events after the period - Other than what is disclosed in Note 25 to the Condensed Consolidated Interim Financial Statements, there were no other significant events after the period[123](index=123&type=chunk) [Employees and Remuneration Policy](index=43&type=section&id=Employees%20and%20Remuneration%20Policy) As of 30 June 2025, the Group had **594 employees**, with total staff costs significantly increasing, and remuneration policy based on industry practice and individual performance - As of 30 June 2025, the Group had **594 employees** in Hong Kong and China (31 December 2024: 597 employees)[124](index=124&type=chunk) - Total staff costs (including directors' and chief executive's emoluments) for the period were approximately **HK$10,183 thousand** (2024: HK$4,051 thousand)[124](index=124&type=chunk) [Interim Dividends](index=43&type=section&id=Interim%20Dividends) The Board of Directors has resolved not to declare any interim dividend for the current period - The Board of Directors has resolved not to declare any interim dividend for the current period[125](index=125&type=chunk) [Prospects](index=43&type=section&id=Prospects) The Group maintains cautious optimism regarding the hotel and property market prospects, anticipating recovery in domestic tourism and first- and second-tier city real estate markets, with asset management business synergies accelerating its transformation into a comprehensive financial services provider, committed to diversifying revenue streams for sustainable growth - The Group has significantly expanded its hotel presence in Shanxi through the operation of two hotels, expecting increased occupancy rates in second-tier city hotels[126](index=126&type=chunk) - Through subsidiary acquisitions, the property investment portfolio has expanded to key regions in China, and the Group will continue to explore opportunities for stable rental income and capital appreciation[127](index=127&type=chunk) - Government stimulus measures and accommodative monetary policies are expected to support China's real estate sector, while Hong Kong's luxury residential prices are stabilizing, and the leasing market remains competitive[127](index=127&type=chunk)[128](index=128&type=chunk) - The acquisition of Top Smart Investment Holdings is expected to generate synergies with existing securities and financial services businesses, accelerating the Group's transformation into a comprehensive financial services provider in Hong Kong[129](index=129&type=chunk) [Standard Code for Securities Transactions by Directors](index=44&type=section&id=Standard%20Code%20for%20Securities%20Transactions%20by%20Directors) The company has adopted the Standard Code for Securities Transactions by Directors as set out in Appendix C3 of the Listing Rules, and directors have confirmed compliance throughout the period - The company has adopted the Standard Code for Securities Transactions by Directors as set out in Appendix C3 of the Listing Rules, and directors have confirmed compliance throughout the period[130](index=130&type=chunk) [Corporate Governance](index=44&type=section&id=Corporate%20Governance) The Board is committed to maintaining high standards of corporate governance practices and confirms compliance with the code provisions of the Corporate Governance Code throughout the period - The Board is committed to maintaining high standards of corporate governance practices and confirms compliance with the code provisions of the Corporate Governance Code throughout the period[131](index=131&type=chunk) [Purchase, Sale or Redemption of Listed Securities](index=44&type=section&id=Purchase,%20Sale%20or%20Redemption%20of%20Listed%20Securities) Neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities during the period - Neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities during the period[132](index=132&type=chunk) [Audit Committee](index=45&type=section&id=Audit%20Committee) The Audit Committee has reviewed the unaudited interim results for the period - The Audit Committee has reviewed the unaudited interim results for the period in accordance with the relevant code provisions of the Listing Rules[133](index=133&type=chunk) [By Order of the Board](index=45&type=section&id=By%20Order%20of%20the%20Board) The Board of Directors comprises five executive directors and three independent non-executive directors - The Board of Directors comprises five executive directors (Ms. Wang Qian, Mr. Liang Jian, Mr. Yu Qingrui, Mr. Su Wei and Mr. Lai Long Wai) and three independent non-executive directors (Mr. He Yi, Mr. Guo Yaoli and Mr. Huang Zhengzhong)[134](index=134&type=chunk)

Part I [Company Information and Declarations](index=1&type=section&id=I.%20Company%20Information%20and%20Declarations) This section provides disclaimers and an overview of Beijing Health (Holdings) Limited, including its registration and the review of its unaudited interim financial information [Disclaimer](index=1&type=section&id=1.1%20Disclaimer) The Hong Kong Stock Exchange and the Stock Exchange disclaim responsibility for the announcement's content, make no representation as to its accuracy or completeness, and accept no liability for any loss arising from reliance on its contents - The Hong Kong Stock Exchange and the Stock Exchange take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness, and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement[1](index=1&type=chunk) [Company Overview](index=1&type=section&id=1.2%20Company%20Overview) Beijing Health (Holdings) Limited, incorporated in the Cayman Islands, released its unaudited condensed consolidated interim financial information for the six months ended June 30, 2025, reviewed by the company's audit committee - The company name is Beijing Health (Holdings) Limited, incorporated in the Cayman Islands, stock code 2389[2](index=2&type=chunk) - This release presents the unaudited condensed consolidated interim financial information for the six months ended June 30, 2025, which has been reviewed by the company's audit committee[3](index=3&type=chunk) Part II [Condensed Consolidated Financial Statements](index=1&type=section&id=II.%20Condensed%20Consolidated%20Financial%20Statements) This section presents the company's condensed consolidated statement of profit or loss and other comprehensive income, and the condensed consolidated statement of financial position for the period [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 revenue increased to HK$76,587 thousand, and gross profit rose to HK$20,395 thousand, while loss for the period significantly narrowed to HK$29,312 thousand due to a substantial increase in net other income and gains (primarily from exchange gains) and higher other expenses | Indicator | H1 2025 (HK$ thousand) | H1 2024 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 76,587 | 73,307 | +4.5% | | Cost of sales | (56,192) | (56,925) | -1.3% | | Gross profit | 20,395 | 16,382 | +24.5% | | Net other income and gains | 26,133 | (10,922) | N/A (from loss to gain) | | Selling and distribution expenses | (8,450) | (7,226) | +16.9% | | Administrative expenses | (40,745) | (40,709) | +0.1% | | Net impairment loss on financial assets | (1,250) | (2,801) | -55.4% | | Other expenses and losses | (18,265) | (4,737) | +285.6% | | Finance costs | (139) | (96) | +44.8% | | Share of loss of joint ventures | (4,055) | (5,187) | -21.8% | | Share of loss of associates | (3,936) | (5,046) | -22.0% | | Loss before tax | (30,312) | (60,342) | -49.8% | | Income tax credit | 1,000 | 2,763 | -63.8% | | Loss for the period | (29,312) | (57,579) | -49.1% | | Total comprehensive loss for the period | (23,016) | (69,439) | -66.8% | | Loss attributable to owners of the parent | (29,236) | (56,411) | -48.2% | | Loss attributable to non-controlling interests | (76) | (1,168) | -93.5% | | Total comprehensive loss attributable to owners of the parent | (23,740) | (68,085) | -65.1% | | Total comprehensive loss attributable to non-controlling interests | 724 | (1,354) | N/A (from loss to gain) | [Condensed Consolidated Statement of Financial Position](index=4&type=section&id=2.2%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the company's total assets slightly decreased, with total non-current assets falling from HK$1,398,050 thousand to HK$1,342,849 thousand, while total current assets increased from HK$552,116 thousand to HK$576,273 thousand; net assets decreased from HK$1,740,426 thousand to HK$1,719,688 thousand, primarily due to the loss for the period | Indicator | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | **Non-current assets** | | | | | Property, plant and equipment | 62,548 | 58,759 | +6.4% | | Investment properties | 117,155 | 120,397 | -2.6% | | Right-of-use assets | 368,650 | 369,834 | -0.3% | | Properties under development | 418,915 | 412,578 | +1.5% | | Goodwill | 79,979 | 79,979 | 0.0% | | Investments in joint ventures | 50,186 | 51,666 | -2.9% | | Investments in associates | 65,927 | 105,944 | -37.8% | | Equity investments (FVOCI) | 165,886 | 171,013 | -3.0% | | Debt investments (FVOCI) | – | 14,199 | -100.0% | | Prepayments and other receivables | 11,479 | 11,900 | -3.6% | | Deferred tax assets | 2,124 | 1,781 | +19.3% | | **Total non-current assets** | **1,342,849** | **1,398,050** | **-3.9%** | | **Current assets** | | | | | Inventories | 22,604 | 40,053 | -43.6% | | Trade and bills receivables | 36,403 | 23,398 | +55.6% | | Prepayments, other receivables and other assets | 258,457 | 277,581 | -6.9% | | Financial assets (FVTPL) | 141,641 | 133,219 | +6.3% | | Cash and cash equivalents | 117,168 | 77,865 | +50.5% | | **Total current assets** | **576,273** | **552,116** | **+4.4%** | | **Current liabilities** | | | | | Trade payables | 30,194 | 32,152 | -6.1% | | Other payables and accrued expenses | 93,971 | 102,742 | -8.5% | | Lease liabilities | 2,916 | 2,278 | +28.0% | | Tax payable | 546 | 839 | -34.9% | | **Total current liabilities** | **127,627** | **138,011** | **-7.5%** | | **Net current assets** | **448,646** | **414,105** | **+8.3%** | | **Total assets less current liabilities** | **1,791,495** | **1,812,155** | **-1.1%** | | **Non-current liabilities** | | | | | Other payables | 10,478 | 10,320 | +1.5% | | Lease liabilities | 3,318 | 3,375 | -1.7% | | Deferred tax liabilities | 58,011 | 58,034 | 0.0% | | **Total non-current liabilities** | **71,807** | **71,729** | **+0.1%** | | **Net assets** | **1,719,688** | **1,740,426** | **-1.2%** | | **Total equity** | **1,719,688** | **1,740,426** | **-1.2%** | Part III [Notes to the Condensed Consolidated Financial Statements](index=6&type=section&id=III.%20Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) This section details the basis of preparation, accounting policies, operating segments, revenue analysis, and specific notes for profit or loss and balance sheet items, along with other disclosures [Basis of Preparation and Accounting Policies](index=6&type=section&id=3.1%20Basis%20of%20Preparation%20and%20Accounting%20Policies) The condensed consolidated interim financial information is prepared in accordance with HKAS 34 'Interim Financial Reporting' and Appendix D2 of the Listing Rules, to be read in conjunction with the annual consolidated financial statements; accounting policies are consistent with the prior year, with the initial adoption of amended HKAS 21 'Lack of Exchangeability' having no significant impact on performance or financial position [Basis of Preparation](index=6&type=section&id=3.1.1%20Basis%20of%20Preparation) The condensed consolidated interim financial information is prepared in accordance with HKAS 34 and Appendix D2 of the Listing Rules, not containing all information required for annual financial statements, and should be read in conjunction with the annual statements - The condensed consolidated interim financial information is prepared in accordance with Hong Kong Accounting Standard 34 'Interim Financial Reporting' and the disclosure requirements of Appendix D2 to the Listing Rules, does not include all the information and disclosures required in the annual financial statements, and should be read in conjunction with the Group’s annual consolidated financial statements for the year ended December 31, 2024[9](index=9&type=chunk) [Changes in Accounting Policies and Disclosures](index=6&type=section&id=3.1.2%20Changes%20in%20Accounting%20Policies%20and%20Disclosures) The accounting policies adopted for the preparation of the condensed consolidated interim financial information are consistent with those used in the prior year, with the initial adoption of amended HKAS 21 'Lack of Exchangeability' having no significant impact on performance or financial position - The accounting policies adopted in the preparation of the condensed consolidated interim financial information are consistent with those applied in the preparation of the Group’s annual consolidated financial statements for the year ended December 31, 2024, except for the initial adoption of the revised Hong Kong Financial Reporting Standards accounting standards during the current period[10](index=10&type=chunk) - The adoption of the above revised Hong Kong Financial Reporting Standards accounting standards has no significant impact on the results and financial position prepared and presented for the current or prior accounting periods[11](index=11&type=chunk) - The Group has not early adopted any standards or amendments that have been issued but are not yet effective[12](index=12&type=chunk) [Operating Segments and Revenue Analysis](index=6&type=section&id=3.2%20Operating%20Segments%20and%20Revenue%20Analysis) The Group focuses on providing medical, health, and elderly care related services and products, with all operating results derived from this single segment; for the six months ended June 30, 2025, revenue from customer contracts was HK$76,587 thousand, a 4.5% increase year-on-year, with all revenue originating from mainland China [Operating Segment Information](index=6&type=section&id=3.2.1%20Operating%20Segment%20Information) The Group operates a single operating and reportable segment, providing medical, health, and elderly care related services and products; for the six months ended June 30, 2025, 100% of the Group's revenue was from customers in mainland China, and over 92% of non-current assets are located in mainland China - The Group has a single operating and reportable segment, which is the provision of medical, health, and elderly care related services and products[13](index=13&type=chunk) - During the period, **100% of the Group's revenue** was derived from customers in mainland China, and **over 92% of the Group's non-current assets** are located in mainland China[13](index=13&type=chunk) - Revenue of approximately **HK$19,606,000** (six months ended June 30, 2024: HK$10,629,000) was generated from sales of goods to a single customer[13](index=13&type=chunk) [Revenue](index=7&type=section&id=3.2.2%20Revenue) For the six months ended June 30, 2025, the Group's revenue from contracts with customers was HK$76,587 thousand, a 4.5% increase from HK$73,307 thousand in the prior period, with sales of goods at HK$69,608 thousand and services rendered at HK$6,979 thousand, all from mainland China | Revenue Source | H1 2025 (HK$ thousand) | H1 2024 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Sales of goods | 69,608 | 68,078 | +2.2% | | Services rendered | 6,979 | 5,229 | +33.5% | | **Total Revenue** | **76,587** | **73,307** | **+4.5%** | - All of the Group's revenue is derived from the mainland China market[16](index=16&type=chunk) [Notes to Statement of Profit or Loss Items](index=8&type=section&id=3.3%20Notes%20to%20Statement%20of%20Profit%20or%20Loss%20Items) This section details key financial data impacting the statement of profit or loss, including net other income and gains, finance costs, components of loss before tax, income tax credit, dividend policy, and earnings per share calculation [Net Other Income and Gains](index=8&type=section&id=3.3.1%20Net%20Other%20Income%20and%20Gains) For the six months ended June 30, 2025, net other income and gains turned from a loss of HK$10,922 thousand in the prior period to a gain of HK$26,133 thousand, primarily due to a shift from net exchange loss to gain and significant growth in investment income | Item | H1 2025 (HK$ thousand) | H1 2024 (HK$ thousand) | Change | | :--- | :--- | :--- | :--- | | Bank interest income | 720 | 396 | +81.8% | | Other interest income | 2,863 | 346 | +727.5% | | Investment income from debt investments (FVOCI) | 104 | 248 | -58.1% | | Investment income from equity investments (FVOCI) | 1,475 | 1,561 | -5.5% | | Investment income from financial assets (FVTPL) | 5,102 | 2,207 | +131.2% | | Rental income from investment properties | 4,912 | 5,081 | -3.3% | | Dividend income | 2,573 | 11 | +23290.9% | | Miscellaneous income | 724 | 2,752 | -73.7% | | **Subtotal other income** | **18,473** | **12,602** | **+46.6%** | | Net loss on disposal of property, plant and equipment | (4) | (4) | 0.0% | | Net fair value loss on investment properties | (4,863) | (7,128) | -31.7% | | Net fair value loss on financial assets at fair value through profit or loss | (6,613) | (3,794) | +74.3% | | Net exchange differences | 19,140 | (12,598) | N/A (from loss to gain) | | **Subtotal net gains/(losses)** | **7,660** | **(23,524)** | N/A (from loss to gain) | | **Total net other income and gains** | **26,133** | **(10,922)** | N/A (from loss to gain) | [Finance Costs](index=8&type=section&id=3.3.2%20Finance%20Costs) For the six months ended June 30, 2025, finance costs, primarily interest on lease liabilities, increased from HK$96 thousand to HK$139 thousand, a 44.8% year-on-year increase | Item | H1 2025 (HK$ thousand) | H1 2024 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Interest on lease liabilities | 139 | 96 | +44.8% | [Components of Loss Before Tax](index=9&type=section&id=3.3.3%20Components%20of%20Loss%20Before%20Tax) Loss before tax includes cost of inventories sold, cost of services, depreciation, net exchange differences, impairment of financial assets, and loss on disposal of subsidiaries; this period saw a loss of HK$21,369 thousand from disposal of subsidiaries and a reversal of impairment of HK$3,104 thousand on investments in associates | Item | H1 2025 (HK$ thousand) | H1 2024 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Cost of inventories sold | 52,455 | 52,313 | +0.3% | | Cost of services rendered | 3,737 | 4,612 | -19.0% | | Depreciation of property, plant and equipment | 1,872 | 1,982 | -5.6% | | Depreciation of right-of-use assets | 8,682 | 8,989 | -3.4% | | Net exchange differences | (19,140) | 12,598 | N/A (from loss to gain) | | Impairment of financial assets: net impairment of trade receivables | 1,250 | 2,801 | -55.4% | | (Reversal of impairment)/impairment of an investment in an associate | (3,104) | 4,660 | N/A (from impairment to reversal) | | Loss on disposal of a subsidiary | 21,369 | – | N/A | [Income Tax Credit](index=9&type=section&id=3.3.4%20Income%20Tax%20Credit) For the six months ended June 30, 2025, the Group received an income tax credit of HK$1,000 thousand, a decrease from HK$2,763 thousand in the prior period, primarily due to reduced deferred tax credit; no Hong Kong profits tax was provided, and China corporate income tax was calculated based on estimated taxable profits | Item | H1 2025 (HK$ thousand) | H1 2024 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Current - China corporate income tax (expense) | 218 | 426 | -48.8% | | Deferred tax (credit) | (1,218) | (3,189) | -61.8% | | **Total tax credit for the period** | **(1,000)** | **(2,763)** | **-63.8%** | - No provision for Hong Kong profits tax has been made as the Group had no assessable profits generated in Hong Kong during the period[20](index=20&type=chunk) - Provision for China corporate income tax for the operations in mainland China is calculated at the applicable tax rate on the estimated assessable profits for the period based on the relevant existing legislation, interpretations, and practices[21](index=21&type=chunk) [Dividends](index=10&type=section&id=3.3.5%20Dividends) The Board of Directors does not recommend the payment of an interim dividend for the six months ended June 30, 2025 - The directors of the Company do not recommend the payment of an interim dividend to shareholders for the six months ended June 30, 2025[22](index=22&type=chunk) [Loss Per Share](index=10&type=section&id=3.3.6%20Loss%20Per%20Share) For the six months ended June 30, 2025, basic loss per share attributable to ordinary equity holders of the parent company was HK$29,236 thousand, a significant narrowing from HK$56,411 thousand in the prior period, with a weighted average of 6,058,772,027 ordinary shares outstanding and no dilutive effect from unexercised share options | Indicator | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Loss attributable to owners of the parent (HK$ thousand) | 29,236 | 56,411 | | Weighted average number of ordinary shares outstanding (shares) | 6,058,772,027 | 6,058,772,027 | - No adjustment has been made to the basic loss per share amounts presented for the six months ended June 30, 2025 and 2024, as the unexercised share options had no dilutive effect on the basic loss per share amounts presented[23](index=23&type=chunk) [Notes to Statement of Financial Position Items](index=10&type=section&id=3.4%20Notes%20to%20Statement%20of%20Financial%20Position%20Items) This section details key items in the statement of financial position, including trade and bills receivables, trade payables, and the composition and changes in share capital [Trade and Bills Receivables](index=10&type=section&id=3.4.1%20Trade%20and%20Bills%20Receivables) As of June 30, 2025, total trade and bills receivables increased significantly by 55.6% to HK$36,403 thousand from HK$23,398 thousand on December 31, 2024, primarily driven by growth in trade and bills receivables within one year | Ageing | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | **Trade receivables:** | | | | | Within 3 months | 15,126 | 14,497 | +4.3% | | 4 to 6 months | 5,473 | 3,684 | +48.6% | | 7 to 12 months | 8,280 | 2,452 | +237.7% | | Over 1 year | 1,863 | 2,225 | -16.3% | | **Subtotal trade receivables** | **30,742** | **22,858** | **+34.5%** | | Bills receivables | 5,661 | 540 | +948.3% | | **Total** | **36,403** | **23,398** | **+55.6%** | [Trade Payables](index=11&type=section&id=3.4.2%20Trade%20Payables) As of June 30, 2025, total trade payables decreased by 6.1% to HK$30,194 thousand from HK$32,152 thousand on December 31, 2024; trade payables are non-interest bearing and typically settled within three to six months | Ageing | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Within 3 months | 16,470 | 16,803 | -2.0% | | Over 3 months | 13,724 | 15,349 | -10.6% | | **Total** | **30,194** | **32,152** | **-6.1%** | - Trade payables are non-interest bearing and are normally settled on terms of three to six months[25](index=25&type=chunk) [Share Capital](index=11&type=section&id=3.4.3%20Share%20Capital) As of June 30, 2025, the company's authorized share capital was HK$2,000,000 thousand and issued and fully paid share capital was HK$1,211,754 thousand, both consistent with December 31, 2024, with a par value of HK$0.2 per share | Item | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Authorized share capital (10,000,000,000 shares of HK$0.2 each) | 2,000,000 | 2,000,000 | | Issued and fully paid share capital (6,058,772,027 shares of HK$0.2 each) | 1,211,754 | 1,211,754 | [Other Notes](index=12&type=section&id=3.5%20Other%20Notes) This section covers important additional information including share-based compensation plans, capital commitments, related party transactions, disposal of subsidiaries, contingent liabilities, and post-reporting period events [Share-based Compensation Plans](index=12&type=section&id=3.5.1%20Share-based%20Compensation%20Plans) The company's 2013 share option scheme expired in May 2023, with 146,500,000 share options lapsed during the period and HK$51,934,000 transferred from the share option reserve to accumulated losses; as of June 30, 2025, 89,500,000 share options remain unexercised - The 2013 scheme expired in May 2023, and no new share option scheme has been adopted; during the period, **146,500,000 share options** under the 2013 scheme lapsed, and **HK$51,934,000** was transferred from the share option reserve to accumulated losses[27](index=27&type=chunk) - As at the end of the reporting period, the Company had **89,500,000 unexercised share options**, representing approximately **1.5%** of the Company's issued shares on that date[28](index=28&type=chunk) - The exercise price of the unexercised share options is **HK$0.53 per share**, and they are exercisable until January 27, 2026[27](index=27&type=chunk)[29](index=29&type=chunk) [Commitments](index=13&type=section&id=3.5.2%20Commitments) As of June 30, 2025, the Group's total capital commitments were HK$15,156 thousand, primarily for land and buildings and properties under development, a significant decrease from HK$75,822 thousand on December 31, 2024 | Item | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Land and buildings | 5,865 | 53,175 | -89.0% | | Properties under development | 9,291 | 22,647 | -59.0% | | **Total** | **15,156** | **75,822** | **-80.0%** | [Related Party Disclosures](index=13&type=section&id=3.5.3%20Related%20Party%20Disclosures) For the six months ended June 30, 2025, total remuneration for the Group's key management personnel was HK$4,513 thousand, a 99.1% increase from HK$2,267 thousand in the prior period, mainly due to increased performance-related bonuses | Item | H1 2025 (HK$ thousand) | H1 2024 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Salaries, allowances and benefits in kind | 2,330 | 2,183 | +6.7% | | Performance-related bonuses | 2,100 | – | N/A | | Contributions to retirement benefit schemes | 83 | 84 | -1.2% | | **Total** | **4,513** | **2,267** | **+99.1%** | [Disposal of Subsidiaries](index=14&type=section&id=3.5.4%20Disposal%20of%20Subsidiaries) For the six months ended June 30, 2025, the Group received net proceeds of HK$40,032 thousand from the disposal of an investment in an associate, but incurred a loss of HK$21,369 thousand from the disposal of a subsidiary, resulting in a net cash inflow of HK$16,924 thousand | Item | H1 2025 (HK$ thousand) | | :--- | :--- | | Disposal of an investment in an associate | 40,032 | | Cash and cash equivalents | 12 | | Exchange fluctuation reserve | (1,751) | | Loss on disposal of a subsidiary | (21,369) | | **Net cash inflow** | **16,924** | [Contingent Liabilities](index=14&type=section&id=3.5.5%20Contingent%20Liabilities) As of June 30, 2025, the Group had no significant contingent liabilities; as of December 31, 2024, the Group provided a bank financing guarantee for an associate, with a maximum contingent liability of RMB28,000,000 (approximately HK$30,238,000), of which approximately RMB24,235,000 (approximately HK$26,172,000) had been utilized - As of June 30, 2025, the Group had no significant contingent liabilities[33](index=33&type=chunk) - As of December 31, 2024, the Group had a contingent liability as guarantor for bank financing granted to an associate of the Company, with a maximum of **RMB28,000,000** (equivalent to approximately **HK$30,238,000**); the associate had utilized approximately **RMB24,235,000** (equivalent to approximately **HK$26,172,000**) of the bank loan guaranteed by the Group[33](index=33&type=chunk) [Events After Reporting Period](index=14&type=section&id=3.5.6%20Events%20After%20Reporting%20Period) No significant events occurred after the reporting period - No significant events occurred after the reporting period[34](index=34&type=chunk) Part IV [Management Discussion and Analysis](index=15&type=section&id=IV.%20Management%20Discussion%20and%20Analysis) This section provides a comprehensive review of the Group's business operations, future strategies, and financial performance, including detailed analysis of revenue, expenses, and financial position [Business Review](index=15&type=section&id=4.1%20Business%20Review) The Group actively responds to national silver economy policies, deepens its presence in the Yangtze River Delta region, expands elderly care apartment businesses through a 'chain operation, medical-elderly integration' model, and continues to develop health industrial parks and medical-elderly product sales, with elderly care apartment revenue growing by 22% year-on-year [Elderly Care Apartment Business](index=15&type=section&id=4.1.1%20Elderly%20Care%20Apartment%20Business) China's aging population continues to grow, with strong government support for the silver economy; the Group actively expands inclusive institutional elderly care apartments using a 'chain operation, medical-elderly integration' model in the Yangtze River Delta, operating and managing six apartments with 1,243 beds and an average occupancy rate over 70%, achieving a 22% year-on-year revenue increase - China's aging population growth continues to accelerate, projected to exceed **300 million by 2025** and reach **420 million by 2035**; in 2024, the State Council General Office issued the 'Opinions on Developing the Silver Economy to Enhance the Well-being of the Elderly', the first national document supporting the silver economy[35](index=35&type=chunk) - The Group actively expands inclusive institutional elderly care apartments, investing in and operating nursing homes through a **'chain operation, medical-elderly integration' model**, deeply deploying in the economically strong and high-demand Yangtze River Delta region, gradually radiating across China, and establishing the highly competitive **'Beijing Health'** elderly care service brand domestically[36](index=36&type=chunk) - As of June 30, 2025, the Group operates and manages **six elderly care apartments** providing a total of **1,243 beds** (primarily in the Yangtze River Delta region), including **four medical institutions** offering **955 medical beds** (106 new beds in H1); the average occupancy rate exceeds **70%**, with stable operating cash flow, and elderly care apartment bed revenue reached **RMB26.42 million** (H1 2024: RMB21.64 million), a **22% year-on-year increase**[37](index=37&type=chunk) [Overview of Elderly Care Apartment Projects](index=16&type=section&id=4.1.2%20Overview%20of%20Elderly%20Care%20Apartment%20Projects) All six of the Group's elderly care apartment projects achieved revenue and occupancy rate growth in H1 2025, with Changzhou Luoxi District Nursing Home and Care Hospital (newly opened) seeing a 638% revenue increase and 54% occupancy, as projects continuously enhance operational efficiency and market competitiveness through medical-elderly integration, renovations, internal modifications, and value-added services | Project Name | Number of beds | H1 2025 Revenue (RMB thousand) | H1 2024 Revenue (RMB thousand) | Revenue Change (%) | H1 2025 Occupancy Rate (%) | H1 2024 Occupancy Rate (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Wuxi Liangxi District Guangyi Elderly Care Center and Nursing Home | 288 | 11,430 | 10,240 | 12% | 93% | 87% | | Wuxi Liangxi District Wuhe Elderly Care Center and Nursing Home | 160 | 3,470 | 2,730 | 27% | 65% | 48% | | Changzhou Xinbei District Xuejia Aixin Elderly Care Center and Nursing Home | 415 | 6,640 | 5,710 | 16% | 67% | 43% | | Wuxi Liangxi District Huifeng Elderly Care Center | 100 | 1,010 | 660 | 53% | 60% | 40% | | Wuhu Jinghu District Jintaiyang Elderly Care Center | 120 | 2,910 | 2,170 | 34% | 93% | 91% | | Changzhou Luoxi District Nursing Home and Care Hospital (Newly Opened) | 160 | 960 | 130 | 638% | 54% | 27% | | **Total** | **1,243** | **26,420** | **21,640** | **22%** | **73%** | **56%** | - Guangyi Elderly Care Center and Nursing Home achieved operating revenue of **RMB11.43 million** in H1, a **12% year-on-year increase**, with an occupancy rate of **93%**; value-added services such as medical-elderly integration drove operating performance growth[39](index=39&type=chunk) - Wuhe Elderly Care Center and Nursing Home achieved operating revenue of **RMB3.47 million** in H1, a **27% year-on-year increase**, with an occupancy rate of **65%**; renovation projects initiated last year have been completed, and the occupancy rate continues to recover[40](index=40&type=chunk) - Xuejia Aixin Elderly Care Center and Nursing Home achieved operating revenue of **RMB6.64 million** in H1, a **16% year-on-year increase**, with an occupancy rate of **67%**; **106 new medical beds** were approved in H1, bringing the total medical beds to **205**[41](index=41&type=chunk) - Huifeng Elderly Care Center achieved operating revenue of **RMB1.01 million** in H1, a **53% year-on-year increase**, with an occupancy rate of **60%**; improvements in medical-elderly integration at Huifeng Elderly Care Center have been completed, leading to significant growth in both occupancy and revenue[42](index=42&type=chunk) - Wuhu Jintaiyang Elderly Care Center achieved operating revenue of **RMB2.91 million** in H1, a **34% year-on-year increase**, with an occupancy rate of **93%**; Wuhu Jintaiyang Elderly Care Center undertook internal renovations based on market demand and opened an external meal assistance center, increasing value-added service revenue[43](index=43&type=chunk) - Changzhou Luoxi District Nursing Home and Care Hospital officially commenced operations in May 2024, achieving operating revenue of **RMB0.96 million** in H1 and an occupancy rate of **54%**; it has maintained rapid growth in both occupancy and revenue since opening[44](index=44&type=chunk) [Newly Signed Elderly Care Apartment Projects](index=19&type=section&id=4.1.3%20Newly%20Signed%20Elderly%20Care%20Apartment%20Projects) The Group has signed new elderly care projects, including the Wuxi Grand Canal Cultural Creative Building Health and Wellness Project (expected to open in H2 2025, adding 450 beds), Rizhao City Health and Wellness Project (expected to open in Q3 this year, adding 155 beds), and Anhui Guangde City Elderly Care Service Center Project (total construction time approximately 16 months, adding 290 beds), continuously expanding its elderly care service footprint - The Group signed a cooperation agreement with Jiangsu Grand Canal Hotel Management Co., Ltd., successfully acquiring the operating rights for the Grand Canal Cultural Creative Building Health and Wellness Project; the project plans to offer approximately **450 medical-elderly integrated beds** and is expected to open in **H2 2025**[45](index=45&type=chunk) - The Group signed a health and wellness project cooperation agreement with Rizhao City Urban Construction Investment Group Co., Ltd., planning to establish approximately **155 beds** and actively build a functionally complete, service-excellent, and well-managed medical-elderly integrated elderly care service institution[46](index=46&type=chunk) - Wuxi Beikang Hongtai Elderly Care Service Co., Ltd., a subsidiary of the Group, successfully won the bid for the Anhui Guangde City Elderly Care Service Center Project through public tender; the project is designed for approximately **290 beds**, with an estimated total construction period of about **16 months**, and will cater to the elderly health and wellness needs from surrounding major cities like Shanghai and Nanjing in the future[47](index=47&type=chunk) [Health Industrial Park Business](index=19&type=section&id=4.1.4%20Health%20Industrial%20Park%20Business) The Group is involved in five health industrial park projects across Beijing, Shanghai, Dali, and Canada, totaling over 400,000 square meters; projects vary from upgrading and increasing revenue (Beijing Chaoyang Logistics) to being sold (Shanghai Sanlu Road), leased (Shanghai Hongmei Road), paused (Dali Haidong New District), or in planning/repayment phases (Canada Ovation and Royal Tower) - As of June 30, 2025, the Group is involved in **five projects** across Beijing, Shanghai, Dali, and Canada, with a total area exceeding **400,000 square meters**[49](index=49&type=chunk) - The Beijing Chaoyang Logistics project has completed its extension application as a key project with the Chaoyang District Development and Reform Commission, and is steadily increasing revenue through a new operational management system and the introduction of quality partners[50](index=50&type=chunk) - The Shanghai Sanlu Road project was **sold in March 2025**[50](index=50&type=chunk) - Due to the sluggish domestic real estate market, the original plan for a commercial and office complex for the Shanghai Hongmei Road project has been temporarily shelved; the project is currently leased out, with an annual rental yield of approximately **4%**[51](index=51&type=chunk) - The Dali Haidong New District sub-project is temporarily on hold due to the Yunnan Provincial Government's suspension of development and construction approvals for the Haidong New District; the Group is discussing subsequent arrangements with the local government[52](index=52&type=chunk) - The Canada Ovation project began pre-sales in April 2019 and delivered units to buyers in early 2024; it is expected that the project company will continue to make repayment arrangements to the Group as remaining units are further sold[52](index=52&type=chunk) - The Canada Royal Tower project is preparing for the re-zoning of its land development nature and seeking suitable partners[52](index=52&type=chunk) [Medical and Elderly Care Product Sales](index=21&type=section&id=4.1.5%20Medical%20and%20Elderly%20Care%20Product%20Sales) The Group's Weisen Shengye company specializes in professional furniture for education, elderly care, and medical sectors, with H1 market expansion focused on education, securing several key projects; facing competitive pressure, the company enhances brand competitiveness through exhibitions, online promotion, and product certifications, earning multiple industry accolades - Beijing Weisen Shengye Furniture Company, the Group's medical and elderly care product subsidiary, focused its H1 market expansion primarily on the education sector, successfully signing key projects such as the **'China University of Petroleum (Huadong) Guzhenkou Campus Teaching Building Project'**[53](index=53&type=chunk) - As government investment in education infrastructure increases, market competition intensifies, with regional suppliers and international brands vying for market share through cost-effectiveness and smart classroom solutions[54](index=54&type=chunk) - In H1, Weisen Shengye participated in **5 exhibitions**, hosted approximately **500 clients**, secured **63 potential projects**, and signed **1 project**; concurrently, it promoted its brand through online exhibitions and social media, publishing a total of **148 pieces of content** with an exposure rate of **1.5 million**[54](index=54&type=chunk) - Weisen Shengye completed certifications such as China Environmental Labeling Product Certification and Human Ergonomics Product Certification, and was awarded significant industry honors including **'2025 Top Ten Leading Brands in School Furniture'**, **'2025 Top Ten Brands in Office Furniture'**, **'2025 Top Ten Brands in Age-Friendly Furniture'**, and **'2025 Top Ten Brands in Hospital Furniture'**[55](index=55&type=chunk) [Future Outlook](index=22&type=section&id=4.2%20Future%20Outlook) The Group will continue to increase investment in the elderly care industry, add new beds, build the 'Beijing Health' brand, consolidate its core competitiveness in 'chain operation, standardization, specialization' and 'medical-elderly integration,' and expand into age-friendly products and digital home-based elderly care services, aiming for 5,000 beds in the short term, over 10,000 in the medium term, and 100,000 in the long term, while prudently managing costs, optimizing financial health, and exploring investment opportunities in the sports industry - In the elderly care industry, the Group will continue to increase investment and expansion, constantly adding new beds; the newly signed Wuxi Grand Canal Nursing Home project is expected to operate in **H2 2025**, adding approximately **450 operational beds**, and Rizhao Beikang Yiyue Health Industry Development Co., Ltd.'s renovation is nearing completion, expected to officially open in **Q3 this year**, adding **155 operational beds**[56](index=56&type=chunk) - The Group has launched an online value-added service platform, building comprehensive online value-added services such as elderly nutritious meals, care products, home-visit services, and escort care, achieving an integrated online-offline industry chain and continuously increasing service revenue[56](index=56&type=chunk) - In the future, the Group will focus on building the **'Beijing Health' brand**, continue to leverage the advantages of the **'chain operation, medical-elderly integration'** operating model, continuously consolidate and strengthen its core competitiveness in **'chain operation, standardization, specialization'** and **'medical-elderly integration'**, continue to deeply cultivate the economically strong and high-demand Yangtze River Delta region, and accelerate the expansion of elderly care beds; concurrently, it will extend into age-friendly products and digital home-based elderly care service business areas, forming a **'point-and-surface'** urban comprehensive elderly care service business layout with elderly care beds as the core and business backbone, radiating to product and family ends[57](index=57&type=chunk)[58](index=58&type=chunk) - The Group's short-term goal is to reach **5,000 total elderly care beds**, exceeding **10,000 in the medium term**, and achieving a long-term target of **100,000 beds**, while also making significant breakthroughs in age-friendly products and digital home-based elderly care services, becoming a leading group in the domestic comprehensive elderly care service industry[58](index=58&type=chunk) - Regarding health industrial parks, facing an uncertain macroeconomic environment, the Group will temporarily not increase investment in health industrial parks in China; instead, it will actively seek suitable partners to dispose of some projects when appropriate; for the Group's investment projects in Canada, it will accelerate government approval procedures for the Royal Tower project and prepare for pre-sales, while actively exploring other development opportunities in Canada[59](index=59&type=chunk) - In the medical and elderly care product business, Weisen Shengye will continue to invest in product R&D, policy response, and market segmentation to seize market opportunities, maintain a proactive stance, and leverage the support of Beijing Health Group and the market advantages of its agency brand (KI furniture) to actively cultivate niche segments and penetrate regional markets, achieving breakthroughs in brand value and market share[60](index=60&type=chunk) - In terms of overall Group strategy, we will rigorously control costs, ensure resources are effectively utilized, and optimize cost-effectiveness; we will prudently manage our own funds, enhance free cash income through appropriate bank wealth management, stock, and bond investments, and strengthen the Group's financial position; concurrently, we will periodically seek investment opportunities in the sports industry to add new growth drivers to our **'Great Health Industry'** investment objectives[60](index=60&type=chunk) [Financial Review](index=24&type=section&id=4.3%20Financial%20Review) The Group's operating revenue increased by 4.5% in H1 2025, with gross profit margin rising to 26.6%; loss for the period significantly narrowed due to exchange gains and reduced impairment losses on financial assets, despite a one-time loss from disposal of a subsidiary; the Group maintains ample liquidity, a robust capital structure, and continues to optimize cost management and seek investment opportunities [Operating Revenue](index=24&type=section&id=4.3.1%20Operating%20Revenue) Operating revenue for H1 2025 was HK$76,587 thousand, a 4.5% year-on-year increase, primarily driven by moderate growth in medical and elderly care product sales and elderly care apartment business revenue, with the education furniture product line's effectiveness offsetting declines in hospital and elderly care furniture sales | Indicator | H1 2025 (HK$ thousand) | H1 2024 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Operating revenue | 76,587 | 73,307 | +4.5% | - The increase in operating revenue was primarily due to the moderate growth in both medical and elderly care product sales revenue and elderly care apartment business revenue[61](index=61&type=chunk) - The increase in revenue from the medical and elderly care product segment was mainly due to the effectiveness of the new education furniture product line developed by the Group in earlier years, with related sales increasing annually and sufficiently offsetting the decline in hospital and elderly care furniture sales; customers for education furniture are major domestic colleges and universities, characterized by strong cash flow and low bad debt risk[61](index=61&type=chunk) - The increase in elderly care apartment business revenue was primarily due to an increase in occupancy rates[61](index=61&type=chunk) [Cost of Sales](index=24&type=section&id=4.3.2%20Cost%20of%20Sales) Cost of sales slightly decreased by 1.3% to HK$56,192 thousand, primarily comprising procurement costs, freight, installation fees, and labor expenses | Indicator | H1 2025 (HK$ thousand) | H1 2024 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Cost of sales | 56,192 | 56,925 | -1.3% | - Cost of sales primarily includes procurement costs, freight, installation fees, and labor expenses[62](index=62&type=chunk) [Gross Profit Margin](index=24&type=section&id=4.3.3%20Gross%20Profit%20Margin) The gross profit margin for the period was 26.6%, an increase of 4.3 percentage points from 22.3% in the prior period, mainly due to a higher revenue contribution from the asset-light elderly care apartment business | Indicator | H1 2025 | H1 2024 | Change (percentage points) | | :--- | :--- | :--- | :--- | | Gross profit margin | 26.6% | 22.3% | +4.3 | - The increase in gross profit margin was mainly due to a higher revenue contribution from the asset-light elderly care apartment business[63](index=63&type=chunk) [Net Other Income and Gains](index=24&type=section&id=4.3.4%20Net%20Other%20Income%20and%20Gains) Net other income and gains for H1 2025 turned from a loss of HK$10,922 thousand in the prior period to a gain of HK$26,133 thousand, primarily influenced by a HK$19,140 thousand exchange gain resulting from the appreciation of the Canadian dollar against the Hong Kong dollar | Indicator | H1 2025 (HK$ thousand) | H1 2024 (HK$ thousand) | Change | | :--- | :--- | :--- | :--- | | Net other income and gains | 26,133 | (10,922) | N/A (from loss to gain) | - The increase in net other income and gains was primarily due to the appreciation of the Canadian dollar against the Hong Kong dollar by approximately **5.3%** in H1 2025, resulting in an exchange gain of **HK$19,140,000** in H1 2025, compared to an exchange loss of HK$12,598,000 in H1 2024[64](index=64&type=chunk) - Excluding exchange gains, net other income and gains primarily comprised a fair value loss on investment properties of **HK$4,863,000** (H1 2024: HK$7,128,000), rental income of **HK$4,912,000** (H1 2024: HK$5,081,000), and investment income of **HK$2,641,000** (H1 2024: HK$233,000)[64](index=64&type=chunk) [Selling and Distribution Expenses](index=25&type=section&id=4.3.5%20Selling%20and%20Distribution%20Expenses) Selling and distribution expenses increased to HK$8,450 thousand in H1 2025, a 16.9% year-on-year increase, representing 11.0% of total sales, primarily due to increased patent fees for selling 'KI' brand education furniture products | Indicator | H1 2025 (HK$ thousand) | H1 2024 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Selling and distribution expenses | 8,450 | 7,226 | +16.9% | | Percentage of total sales | 11.0% | 9.9% | +1.1 percentage points | - The increase in selling and distribution expenses during the period was primarily due to increased patent fees incurred by the Group in H1 2025 for selling **'KI' brand education furniture products**[65](index=65&type=chunk) [Administrative Expenses](index=25&type=section&id=4.3.6%20Administrative%20Expenses) Administrative expenses for H1 2025 were HK$40,745 thousand, largely consistent with HK$40,709 thousand in the prior period, with an increase in staff costs (including directors' remuneration) offset by a decrease in office expenses | Item | H1 2025 (HK$ thousand) | H1 2024 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Administrative expenses | 40,745 | 40,709 | +0.1% | | Staff costs (including directors' remuneration) | 18,357 | 15,839 | +15.9% | | Office expenses | 2,157 | 5,243 | -58.9% | [Impairment Loss on Financial Assets](index=25&type=section&id=4.3.7%20Impairment%20Loss%20on%20Financial%20Assets) Impairment loss on financial assets primarily relates to impairment provisions for the Group's receivables, made due to certain trade receivables not being repaid on schedule, considering the debtors' repayment capabilities - Impairment loss on financial assets primarily represents impairment provisions made for the Group's receivables; during the period, due to certain trade receivables not being repaid on schedule, the Group made impairment provisions for the affected balances after considering the debtors' repayment capabilities[67](index=67&type=chunk) [Other Expenses and Losses](index=25&type=section&id=4.3.8%20Other%20Expenses%20and%20Losses) For the six months ended June 30, 2025, other expenses and losses significantly increased to HK$18,265 thousand (H1 2024: HK$4,737 thousand), primarily due to a one-time loss of HK$21,369 thousand from the disposal of a subsidiary, partially offset by a HK$3,104 thousand reversal of impairment on an investment in an associate | Indicator | H1 2025 (HK$ thousand) | H1 2024 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Other expenses and losses | 18,265 | 4,737 | +285.6% | - During the period, other expenses and losses primarily comprised a loss on disposal of a subsidiary of approximately **HK$21,369,000** (H1 2024: nil) and a reversal of impairment of an investment in an associate of approximately **HK$3,104,000** (H1 2024: impairment of approximately HK$4,660,000)[68](index=68&type=chunk) [Finance Costs](index=26&type=section&id=4.3.9%20Finance%20Costs) Total finance costs for H1 2025 were HK$139 thousand, a 44.8% year-on-year increase, primarily due to an increase in the Group's weighted average lease liabilities during the period | Indicator | H1 2025 (HK$ thousand) | H1 2024 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Total finance costs | 139 | 96 | +44.8% | - The increase in finance costs was primarily due to an increase in the Group's weighted average lease liabilities during the period[69](index=69&type=chunk) [Share of Profits and Losses of Joint Ventures](index=26&type=section&id=4.3.10%20Share%20of%20Profits%20and%20Losses%20of%20Joint%20Ventures) Share of loss of joint ventures was HK$4,055 thousand, a 21.8% decrease from HK$5,187 thousand in the prior period, primarily representing the share of loss from 1121695 B.C. Ltd | Indicator | H1 2025 (HK$ thousand) | H1 2024 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Share of loss of joint ventures | 4,055 | 5,187 | -21.8% | - Share of profits and losses of joint ventures primarily represented **47.47%** of the loss attributable to shareholders of **1121695 B.C. Ltd.**, amounting to approximately **HK$4,055,000**[70](index=70&type=chunk) [Share of Profits and Losses of Associates](index=26&type=section&id=4.3.11%20Share%20of%20Profits%20and%20Losses%20of%20Associates) Share of loss of associates was HK$3,936 thousand, a 22.0% decrease from HK$5,046 thousand in the prior period, including an increased share of loss from Beijing Sports Culture Industry Group Co., Ltd. and a reduced share of loss from Shanghai Junbo Textile Co., Ltd. (which was disposed of in March 2025) | Indicator | H1 2025 (HK$ thousand) | H1 2024 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Share of loss of associates | 3,936 | 5,046 | -22.0% | - Share of profits and losses of associates primarily included **25.07%** of the loss attributable to shareholders of **Beijing Sports Culture Industry Group Co., Ltd.**, amounting to approximately **HK$3,297,000**, and **20%** of the loss attributable to shareholders of **Shanghai Junbo Textile Co., Ltd.**, amounting to approximately **HK$174,000**[71](index=71&type=chunk) - Shanghai Junbo Textile Co., Ltd. was **disposed of in March 2025**[71](index=71&type=chunk) [Net Assets](index=26&type=section&id=4.3.12%20Net%20Assets) As of June 30, 2025, the Group's net assets were approximately HK$1,719,688 thousand, a decrease of approximately HK$20,738 thousand from December 31, 2024, primarily due to a loss of approximately HK$29,312 thousand incurred during the period | Indicator | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Net assets | 1,719,688 | 1,740,426 | -1.2% | - The decrease in net assets was primarily due to a loss of approximately **HK$29,312,000** incurred during the period[72](index=72&type=chunk) [Liquidity and Financial Resources](index=26&type=section&id=4.3.13%20Liquidity%20and%20Financial%20Resources) As of June 30, 2025, the Group's cash and cash equivalents increased to HK$117,168 thousand, and bank wealth management product balances rose to HK$128,988 thousand; net current assets reached HK$448,646 thousand, with a current ratio of 4.5 times, indicating ample liquidity | Indicator | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Cash and cash equivalents | 117,168 | 77,865 | +50.5% | | Bank wealth management product balances | 128,988 | 118,441 | +8.9% | | Net current assets | 448,646 | 414,105 | +8.3% | | Current ratio | 4.5 times | N/A | N/A | - The Group maintains sufficient bank credit facilities to meet working capital needs and holds ample cash resources to fund capital expenditures in the foreseeable future[73](index=73&type=chunk) - The Group believes that prudent cash flow management is key to success; to ensure sufficient funds for the Group's rapid growth, the Group maintains good business relationships with various banks to facilitate future loan applications[73](index=73&type=chunk) [Capital Structure](index=27&type=section&id=4.3.14%20Capital%20Structure) As of June 30, 2025, the company had 6,058,772,027 shares issued, with equity attributable to shareholders of approximately HK$1,692,371 thousand and total equity of approximately HK$1,719,688 thousand; the Group primarily funds its operations through internal resources and strives to optimize its capital and financing structure | Indicator | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Number of shares issued (shares) | 6,058,772,027 | 6,058,772,027 | 0.0% | | Equity attributable to shareholders | 1,692,371 | 1,716,111 | -1.4% | | Total equity | 1,719,688 | 1,740,426 | -1.2% | - The Group's business operations are primarily funded through internal resources; leveraging its advantages as a listed company's financing platform, the Group strives to continuously optimize its capital and financing structure to secure sufficient funds for future health and elderly care industry projects[74](index=74&type=chunk) [Capital Expenditure](index=27&type=section&id=4.3.15%20Capital%20Expenditure) For the six months ended June 30, 2025, the Group's capital expenditure was approximately HK$4,736 thousand, an 83.7% increase from HK$2,578 thousand in the prior period, primarily for the acquisition of property, plant, and equipment | Indicator | H1 2025 (HK$ thousand) | H1 2024 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Capital expenditure | 4,736 | 2,578 | +83.7% | - Capital expenditure primarily relates to the acquisition of property, plant, and equipment[75](index=75&type=chunk) [Pledge of Assets](index=27&type=section&id=4.3.16%20Pledge%20of%20Assets) As of June 30, 2025, and December 31, 2024, the Group had no pledged assets - As of June 30, 2025, and December 31, 2024, the Group had no pledged assets[76](index=76&type=chunk) [Material Investments](index=27&type=section&id=4.3.17%20Material%20Investments) For the period ended June 30, 2025, the Group made no new material investments; while actively seeking potential synergistic investments, no agreements for material investments have been entered into as of the announcement date - For the period ended June 30, 2025, the Group made no new material investments[77](index=77&type=chunk) - The Group is actively seeking and exploring potential and synergistic suitable investments to integrate into its existing businesses; as of the date of this announcement, no agreements for material investments have been entered into[77](index=77&type=chunk) [Contingent Liabilities](index=27&type=section&id=4.3.18%20Contingent%20Liabilities) As of June 30, 2025, the Group had no significant contingent liabilities; as of December 31, 2024, the Group provided a bank financing guarantee for an associate, with a maximum contingent liability of RMB28,000,000 (approximately HK$30,238,000), of which approximately RMB24,235,000 (approximately HK$26,172,000) had been utilized - As of June 30, 2025, the Group had no significant contingent liabilities[78](index=78&type=chunk) - As of December 31, 2024, the Group had a contingent liability as guarantor for bank financing granted to an associate of the Company, with a maximum of **RMB28,000,000** (equivalent to approximately **HK$30,238,000**); the associate had utilized approximately **RMB24,235,000** (equivalent to approximately **HK$26,172,000**) of the bank loan guaranteed by the Group[78](index=78&type=chunk) [Foreign Exchange Risk](index=28&type=section&id=4.3.19%20Foreign%20Exchange%20Risk) The Group faces exchange rate fluctuation risks for RMB and CAD against HKD, but took no hedging measures for the six months ended June 30, 2025; management will continue to monitor foreign exchange risk and implement hedging measures when necessary - Most of the Group's subsidiaries operate in China, with most transactions denominated and settled in RMB; fluctuations in the RMB exchange rate affect the Group's net assets when preparing its consolidated accounts[79](index=79&type=chunk) - The Group is also exposed to foreign exchange risk from other receivables and an investment in a joint venture denominated in Canadian dollars[79](index=79&type=chunk) - For the six months ended June 30, 2025, the Group faced potential foreign exchange risk arising from currency exchange rate fluctuations but did not make any arrangements or use any financial instruments to hedge this risk; however, management will continue to monitor foreign exchange risk and implement hedging measures when necessary[79](index=79&type=chunk) [Employees and Remuneration Policy](index=28&type=section&id=4.3.20%20Employees%20and%20Remuneration%20Policy) As of June 30, 2025, the Group's total workforce increased to approximately 180 employees, with total staff costs (including directors' remuneration) of approximately HK$22,427 thousand, a 13.9% year-on-year increase; remuneration policy is market-based, offering benefits, discretionary performance bonuses, and share option schemes to incentivize employees | Indicator | June 30, 2025 | H1 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Total number of employees | 180 employees | 164 employees | +9.8% | | Male employees | 77 employees | 71 employees | +8.5% | | Female employees | 103 employees | 93 employees | +10.8% | | Total staff costs (including directors' remuneration) (HK$ thousand) | 22,427 | 19,692 | +13.9% | - The Group's remuneration policy is to determine all employee compensation at market levels; in addition to salaries, the Group also provides employee benefits, including medical insurance, mandatory provident fund contributions, and China social insurance[80](index=80&type=chunk) - To encourage and reward employees, the Group has established discretionary performance bonus schemes and year-end bonus schemes to drive employee performance and growth; the Company also has a share option scheme and employee option scheme to recognize employee performance[80](index=80&type=chunk) Part V [Corporate Governance and Other Information](index=28&type=section&id=V.%20Corporate%20Governance%20and%20Other%20Information) This section outlines the company's adherence to corporate governance codes, policies on securities transactions, and details regarding the audit committee and publication of financial reports [Corporate Governance Code](index=28&type=section&id=5.1%20Corporate%20Governance%20Code) The company has complied with the Corporate Governance Code provisions set out in Appendix C1 of the Listing Rules for the six months ended June 30, 2025 - The Company has complied with the code provisions of the Corporate Governance Code set out in Appendix C1 to the Listing Rules for the six months ended June 30, 2025[81](index=81&type=chunk) [Compliance with the Model Code for Securities Transactions](index=28&type=section&id=5.2%20Compliance%20with%20the%20Model%20Code%20for%20Securities%20Transactions) 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 and confirms full compliance by all directors during the reporting period - 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 as its code of conduct for directors' securities transactions[82](index=82&type=chunk) - Following specific enquiries, the Company confirms that all directors have fully complied with the Model Code for the six months ended June 30, 2025[82](index=82&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=29&type=section&id=5.3%20Purchase,%20Sale%20or%20Redemption%20of%20the%20Company's%20Listed%20Securities) For the six months ended June 30, 2025, neither the company nor its subsidiaries purchased, sold, or redeemed any of the company's listed securities, and the company held no treasury shares - 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; as of June 30, 2025, the Company held no treasury shares[83](index=83&type=chunk) [Audit Committee](index=29&type=section&id=5.4%20Audit%20Committee) The Audit Committee, established on April 11, 2002, comprises four independent non-executive directors, including one with professional qualifications, and has reviewed the company's interim results for the six months ended June 30, 2025 - The Audit Committee was established on April 11, 2002, with written terms of reference; it comprises four members: Mr. Xie Wenjie (Chairman), Mr. Zhang Yunzhou, Mr. Wu Yongxin, and Ms. Yang Xiaoyan, all independent non-executive directors (including one with appropriate professional qualifications or expertise in accounting or relevant financial management)[84](index=84&type=chunk) - The Company's Audit Committee has reviewed the Company's interim results for the six months ended June 30, 2025[84](index=84&type=chunk) [Publication of Interim Results and Interim Report](index=29&type=section&id=5.5%20Publication%20of%20Interim%20Results%20and%20Interim%20Report) The electronic version of this interim results announcement is published on the company's and the Stock Exchange's websites, and the interim report will be dispatched to shareholders and published on these websites in due course - The electronic version of this interim results announcement is published on the Company's website (http://www.bjhl.com.hk) and the Stock Exchange's website (www.hkexnews.hk)[85](index=85&type=chunk) - The Company's interim report for the six months ended June 30, 2025, will also be dispatched to the Company's shareholders and published on the aforementioned websites in due course[85](index=85&type=chunk)