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，並明確表示概不就因本公告全部或任何部分內容而產生或因依賴該等內容而引致的任何損失 承擔任何責任。 亞 東 Yadong Group Holdings Limited 亞 東 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：1795） 截至2025年6月30日止六個月 中期業績公告 亞東集團控股有限公司（「本公司」）董事（「董事」）會（「董事會」）欣然公佈本公司及其附屬公 司（ 統稱「本集團」）截至2025 年6月30 日止六個月的未經審核綜合中期業績，連同2024 年同 期的未經審核比較數字。 簡明綜合損益及其他全面收益表 截至2025年6月30日止六個月 | | | 截至6月30日止六個月 | | | --- | --- | --- | --- | | | | 2025年 | 2024年 | | | 附註 | 人民幣千元 | 人民幣千元 | | | | （未經審核） （ | 未經審核） | | 收益 | 4 | 489,040 | 481,054 | | 銷售成本 | ...

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，並明確表示概不就因本公告全部或任何部分內容而產生或因倚賴該等內容而引致的任何損失 承擔任何責任。 Beijing Biostar Pharmaceuticals Co., Ltd. 北 京 華 昊 中 天 生 物 醫 藥 股 份 有 限 公 司 於中華人民共和國註冊成立的股份有限公司） （股份代號：2563） 中期業績公告 截至2025年6月30日止六個月 北京華昊中天生物醫藥股份有限公司（「本公司」）董事（「董事」）會（「董事會」）欣然公佈本公 司及其附屬公司（ 統稱「本集團」）截至2025年6月30 日止六個月的未經審計綜合中期業績連 同2024年同期的比較數字。該等中期業績並未經核數師審計或審閱，惟已由本公司審計委 員會審閱。 在本公告內，「我們」及「我們的」均指本公司，如文義另有所指，則指本集團。本公告所載 若 干 金 額 及 百 分 比 數 字 已 約 整 或 已 四 捨 五 入 至 小 數 點 後 一 位 或 兩 位 數（ 如 適 用 ）。 任 何 表 格、圖表或其他地方所示總額與所列數額 ...

[Company Overview and Financial Summary](index=1&type=section&id=Company%20Overview%20and%20Financial%20Summary) [Company Information](index=5&type=section&id=1.1%20Company%20Information) Wise Ally International Holdings Limited is an investment holding company registered in the Cayman Islands, primarily engaged in electronic product manufacturing and sales, listed on the main board of the Hong Kong Stock Exchange on January 10, 2020 - The company is an investment holding company registered in the Cayman Islands, primarily engaged in electronic product manufacturing and sales[6](index=6&type=chunk) - The company's shares were listed on the main board of the Hong Kong Stock Exchange on January 10, 2020[7](index=7&type=chunk) [Financial Summary](index=1&type=section&id=1.2%20Financial%20Summary) For the six months ended June 30, 2025, revenue decreased by 16.6% to HK$469,858 thousand, gross profit decreased by 27.4% to HK$78,727 thousand, and gross margin declined by 240 bps to 16.8%, with profit attributable to equity holders decreasing by 8.7% to HK$14,338 thousand and basic and diluted earnings per share at 14.34 HK cents Key Financial Metrics (HK$ thousand) | Indicator | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change (%) | Change (bps) | | :--- | :--- | :--- | :--- | :--- | | Revenue | 469,858 | 563,536 | (16.6%) | - | | Gross Profit | 78,727 | 108,445 | (27.4%) | - | | Gross Margin | 16.8% | 19.2% | - | (240) | | Operating Profit | 18,169 | 28,406 | (36.0%) | - | | EBITDA | 36,778 | 47,262 | (22.2%) | - | | Profit Attributable to Equity Holders | 14,338 | 15,701 | (8.7%) | - | | Basic and Diluted Earnings Per Share (HK cents) | 14.34 | 15.70 | (8.7%) | - | [Condensed Consolidated Financial Statements](index=2&type=section&id=Condensed%20Consolidated%20Financial%20Statements) [Condensed Consolidated Statement of Comprehensive Income](index=2&type=section&id=2.1%20Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) For the six months ended June 30, 2025, the company reported revenue of HK$469,858 thousand and gross profit of HK$78,727 thousand, with other net income significantly increasing to HK$29,649 thousand due to fair value gains on financial assets, and net finance costs substantially decreasing to HK$2,312 thousand, resulting in a profit for the period of HK$14,338 thousand Condensed Consolidated Statement of Comprehensive Income (HK$ thousand) | Indicator | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Revenue | 469,858 | 563,536 | | Cost of Sales | (391,131) | (455,091) | | Gross Profit | 78,727 | 108,445 | | Other Net Income | 29,649 | 3,194 | | Other Income | 244 | 1,550 | | Selling and Distribution Expenses | (28,853) | (27,159) | | Administrative Expenses | (60,865) | (57,624) | | Provision for Impairment Loss on Financial Assets | (733) | – | | Operating Profit | 18,169 | 28,406 | | Net Finance Costs | (2,312) | (8,011) | | Profit Before Income Tax | 15,857 | 20,395 | | Income Tax Expense | (1,519) | (4,694) | | Profit Attributable to Equity Holders | 14,338 | 15,701 | [Condensed Consolidated Statement of Financial Position](index=3&type=section&id=2.2%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, total assets decreased to HK$806,541 thousand from HK$933,499 thousand on December 31, 2024, driven by significant reductions in trade receivables and inventories within current assets, while cash and cash equivalents increased, total liabilities decreased to HK$571,737 thousand, and total equity increased to HK$234,804 thousand Condensed Consolidated Statement of Financial Position (HK$ thousand) | Indicator | 2025 June 30 (HK$ thousand) | 2024 Dec 31 (HK$ thousand) | | :--- | :--- | :--- | | **Assets** | | | | Non-current Assets | 112,233 | 128,245 | | Current Assets | 694,308 | 805,254 | | Total Assets | 806,541 | 933,499 | | **Equity** | | | | Share Capital | 20,000 | 20,000 | | Reserves | 214,804 | 201,139 | | Total Equity | 234,804 | 221,139 | | **Liabilities** | | | | Non-current Liabilities | 38,435 | 50,997 | | Current Liabilities | 533,302 | 661,363 | | Total Liabilities | 571,737 | 712,360 | | Total Equity and Liabilities | 806,541 | 933,499 | [Notes to the Financial Statements](index=5&type=section&id=Notes%20to%20the%20Financial%20Statements) [Basis of Preparation and Accounting Policies](index=5&type=section&id=3.1%20Basis%20of%20Preparation%20and%20Accounting%20Policies) The condensed consolidated financial statements are prepared in accordance with HKAS 34 "Interim Financial Reporting" and Appendix D2 of the Listing Rules, adopting the same accounting policies as the 2024 financial statements - The financial statements are prepared in accordance with HKAS 34 and Appendix D2 of the Listing Rules[9](index=9&type=chunk) - The same accounting policies as the 2024 financial statements are adopted[9](index=9&type=chunk) [Adoption of New and Revised Standards](index=5&type=section&id=3.2%20Adoption%20of%20New%20and%20Revised%20Standards) The Group adopted HKAS 21 and HKFRS 1 (Amendments) "Lack of Exchangeability" from January 1, 2025, with no significant impact, and management anticipates no material impact from new and revised standards issued but not yet adopted, such as HKFRS 18 "Presentation and Disclosure in Financial Statements" - HKAS 21 and HKFRS 1 (Amendments) "Lack of Exchangeability" have been adopted with no significant impact[10](index=10&type=chunk) - New and revised standards issued but not yet adopted, including HKFRS 18, are not expected to have a material impact on financial position and operating results[12](index=12&type=chunk) [Revenue and Segment Information](index=6&type=section&id=3.3%20Revenue%20and%20Segment%20Information) The Group primarily engages in electronic product manufacturing and sales, with the CEO assessing operating segment performance based on revenue and gross profit, and all revenue for H1 2025 derived from contracts with customers and recognized at a point in time - The Group primarily engages in electronic product manufacturing and sales, with one reportable operating segment[13](index=13&type=chunk) - The CEO assesses operating segment performance based on revenue and gross profit[14](index=14&type=chunk) [Operating Segments](index=6&type=section&id=3.3.1%20Operating%20Segments) The CEO, as the chief operating decision maker, assesses performance and allocates resources based on internal reports, identifying only one reportable operating segment: electronic product manufacturing and sales - The CEO is the chief operating decision maker, assessing performance and allocating resources based on internal reports[13](index=13&type=chunk) - The Group has only one reportable operating segment: electronic product manufacturing and sales[13](index=13&type=chunk) [Revenue by Geographical Location of Customers](index=7&type=section&id=3.3.2%20Revenue%20by%20Geographical%20Location%20of%20Customers) For H1 2025, the Group's products were shipped to over 25 countries and regions, with the US becoming the largest market, contributing HK$174,410 thousand or 37.1% of total revenue, an increase from the prior year, while revenue from the Philippines and Mainland China decreased Revenue by Geographical Location (HK$ thousand) | Geographical Location | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | United States | 174,410 | 137,435 | | Philippines | 111,255 | 180,454 | | Mainland China | 71,068 | 111,493 | | Ireland | 33,477 | 40,826 | | Switzerland | 14,998 | 9,025 | | Malaysia | 12,449 | 18,063 | | Germany | 11,079 | 9,707 | | Hong Kong | 8,856 | 7,241 | | United Kingdom | 6,271 | 21,756 | | Belgium | 4,797 | 48 | | Singapore | 3,926 | 2,453 | | Mexico | 3,074 | 11,364 | | India | 2,916 | 4,978 | | Estonia | 2,474 | 1,847 | | Netherlands | 1,796 | 1,176 | | Norway | 1,717 | 1,189 | | Others | 5,295 | 4,481 | | **Total** | **469,858** | **563,536** | - The US became the largest market, contributing **37.1%** of total revenue, an increase from **24.4%** in the prior year[16](index=16&type=chunk)[39](index=39&type=chunk) [Revenue from Major Customers](index=7&type=section&id=3.3.3%20Revenue%20from%20Major%20Customers) For H1 2025, Customer A contributed HK$77,196 thousand and Customer D contributed HK$72,131 thousand, while Customers B and C did not meet the 10% revenue threshold, unlike H1 2024 when Customers A, B, and C were all major customers Revenue from Major Customers (HK$ thousand) | Customer | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Customer A | 77,196 | 116,537 | | Customer B | Not applicable* | 72,695 | | Customer C | Not applicable* | 64,068 | | Customer D | 72,131 | Not applicable* | - In H1 2025, Customer A and Customer D were major customers, whereas in H1 2024, Customers A, B, and C were major customers[17](index=17&type=chunk) [Contract Liabilities and Unsatisfied Performance Obligations](index=8&type=section&id=3.3.4%20Contract%20Liabilities%20and%20Unsatisfied%20Performance%20Obligations) As of June 30, 2025, contract liabilities increased to HK$17,285 thousand from HK$12,818 thousand on December 31, 2024, with all unsatisfied performance obligations arising from contracts with an original expected duration of less than one year, thus transaction prices are not disclosed Contract Liabilities (HK$ thousand) | Indicator | 2025 June 30 (HK$ thousand) | 2024 Dec 31 (HK$ thousand) | | :--- | :--- | :--- | | Contract Liabilities | 17,285 | 12,818 | - Unsatisfied performance obligations are from contracts with an expected duration of less than one year, thus transaction prices are not disclosed[19](index=19&type=chunk) [Non-current Assets by Geographical Location](index=8&type=section&id=3.3.5%20Non-current%20Assets%20by%20Geographical%20Location) As of June 30, 2025, the Group's total non-current assets (excluding financial instruments and deferred tax assets) primarily located in Mainland China (HK$91,827 thousand) and Hong Kong (HK$9,268 thousand), totaling HK$101,095 thousand, a decrease from December 31, 2024 Non-current Assets by Geographical Location (HK$ thousand) | Geographical Location | 2025 June 30 (HK$ thousand) | 2024 Dec 31 (HK$ thousand) | | :--- | :--- | :--- | | Hong Kong | 9,268 | 11,953 | | Mainland China | 91,827 | 104,955 | | **Total** | **101,095** | **116,908** | [Other Net Income and Other Income](index=8&type=section&id=3.4%20Other%20Net%20Income%20and%20Other%20Income) For H1 2025, other net income significantly increased to HK$29,649 thousand (H1 2024: HK$3,194 thousand), primarily due to a fair value gain of HK$23,228 thousand on financial assets at fair value through profit or loss, while other income decreased from HK$1,550 thousand to HK$244 thousand Other Net Income and Other Income (HK$ thousand) | Indicator | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | **Other Net Income** | | | | Loss on disposal of property, plant and equipment | (142) | (21) | | Gain on disposal of a joint venture | 730 | – | | Exchange gain | 5,833 | 3,215 | | Fair value gain on financial assets | 23,228 | – | | **Total Other Net Income** | **29,649** | **3,194** | | **Other Income** | | | | Government grants | 202 | 200 | | Others | 42 | 1,350 | | **Total Other Income** | **244** | **1,550** | - Other net income significantly increased by **HK$26.4 million**, primarily due to a one-off gain of **HK$23.2 million** from fair value changes in financial assets[21](index=21&type=chunk)[40](index=40&type=chunk) [Net Finance Costs](index=9&type=section&id=3.5%20Net%20Finance%20Costs) For H1 2025, net finance costs significantly decreased by 71.3% to HK$2,312 thousand (H1 2024: HK$8,011 thousand), mainly due to a strategic reduction in bank borrowings and increased interest income from bank deposits and convertible bonds Net Finance Costs (HK$ thousand) | Indicator | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Interest income from bank deposits and convertible bonds | (3,127) | (1,988) | | Interest expense on bank borrowings | 3,677 | 7,787 | | Interest expense on lease liabilities | 1,762 | 2,212 | | **Net Finance Costs** | **2,312** | **8,011** | - Net finance costs decreased by **71.3%** year-on-year, primarily due to reduced bank borrowings and increased interest income[23](index=23&type=chunk)[42](index=42&type=chunk) [Income Tax Expense](index=9&type=section&id=3.6%20Income%20Tax%20Expense) For H1 2025, income tax expense was HK$1,519 thousand, a significant decrease from HK$4,694 thousand in H1 2024, with Hong Kong subsidiaries subject to a two-tiered profits tax rate (8.25% and 16.5%) and PRC subsidiaries subject to a 25% corporate income tax rate Income Tax Expense (HK$ thousand) | Indicator | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Current income tax expense | 1,632 | 4,849 | | Deferred income tax credit | (113) | (155) | | **Income Tax Expense** | **1,519** | **4,694** | - Hong Kong applies a two-tiered profits tax rate (**8.25%** and **16.5%**), while China applies a **25%** corporate income tax rate[24](index=24&type=chunk) [Dividends](index=10&type=section&id=3.7%20Dividends) The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025, and 2024 - The Board does not recommend the payment of an interim dividend for H1 2025 and H1 2024[26](index=26&type=chunk)[52](index=52&type=chunk) [Earnings Per Share](index=10&type=section&id=3.8%20Earnings%20Per%20Share) For H1 2025, basic and diluted earnings per share were 14.34 HK cents, a decrease from 15.70 HK cents in H1 2024, with no difference between basic and diluted earnings due to the absence of potential dilutive ordinary shares in both periods Earnings Per Share (HK$ thousand/thousand shares/HK cents) | Indicator | 2025 (HK$ thousand/thousand shares/HK cents) | 2024 (HK$ thousand/thousand shares/HK cents) | | :--- | :--- | :--- | | Profit attributable to equity holders | 14,338 | 15,701 | | Weighted average number of ordinary shares issued | 100,000 | 100,000 | | **Basic and Diluted Earnings Per Share** | **14.34** | **15.70** | - Basic and diluted earnings per share decreased, with no difference between basic and diluted earnings due to the absence of potential dilutive ordinary shares[28](index=28&type=chunk) [Trade Receivables](index=10&type=section&id=3.9%20Trade%20Receivables) As of June 30, 2025, trade receivables (net of impairment) significantly decreased to HK$178,362 thousand from HK$270,925 thousand on December 31, 2024, with a credit period ranging from 15 to 120 days, and the highest proportion of receivables due within one month Trade Receivables (HK$ thousand) | Indicator | 2025 June 30 (HK$ thousand) | 2024 Dec 31 (HK$ thousand) | | :--- | :--- | :--- | | Trade Receivables | 186,454 | 278,284 | | Less: Impairment provision | (8,092) | (7,359) | | **Net Trade Receivables** | **178,362** | **270,925** | Aging Analysis of Trade Receivables (HK$ thousand) | Aging (by invoice date) | 2025 June 30 (HK$ thousand) | 2024 Dec 31 (HK$ thousand) | | :--- | :--- | :--- | | Within 1 month | 91,844 | 125,320 | | 1 to 2 months | 46,507 | 96,967 | | 2 to 3 months | 31,370 | 40,186 | | Over 3 months | 8,641 | 8,452 | | **Total** | **178,362** | **270,925** | - Trade receivables significantly decreased by **HK$92.5 million**, primarily due to more proactive debt collection measures[40](index=40&type=chunk) [Trade Payables](index=11&type=section&id=3.10%20Trade%20Payables) As of June 30, 2025, trade payables were HK$217,571 thousand, a decrease from HK$285,421 thousand on December 31, 2024, with the highest proportion of payables due within one month Aging Analysis of Trade Payables (HK$ thousand) | Aging (by invoice date) | 2025 June 30 (HK$ thousand) | 2024 Dec 31 (HK$ thousand) | | :--- | :--- | :--- | | Within 1 month | 101,222 | 175,149 | | 1 to 2 months | 41,646 | 36,281 | | 2 to 3 months | 36,827 | 28,639 | | Over 3 months | 37,876 | 45,352 | | **Total** | **217,571** | **285,421** | [Bank Borrowings](index=12&type=section&id=3.11%20Bank%20Borrowings) As of June 30, 2025, bank borrowings significantly decreased to HK$123,774 thousand from HK$188,279 thousand on December 31, 2024, with some borrowings and financing pledged by undertakings from controlling shareholders Mr. Chu Wai Hang and Mr. Chu Wai Cheung Bank Borrowings (HK$ thousand) | Indicator | 2025 June 30 (HK$ thousand) | 2024 Dec 31 (HK$ thousand) | | :--- | :--- | :--- | | Bank Borrowings - Repayable on demand | 123,774 | 188,279 | - Bank borrowings decreased by **HK$64.5 million**, or approximately **34.3%**, to reduce borrowing costs[33](index=33&type=chunk)[40](index=40&type=chunk) - Bank borrowings are pledged by undertakings from controlling shareholders Mr. Chu Wai Hang and Mr. Chu Wai Cheung to jointly hold at least **51%** equity[33](index=33&type=chunk) [Investment in a Joint Venture](index=12&type=section&id=3.12%20Investment%20in%20a%20Joint%20Venture) Wise Ally Holdings Limited, an indirect wholly-owned subsidiary, completed the disposal of 10% of the issued shares of Talentone Technology Limited (TTL) on February 13, 2025, for a consideration of HK$730,000, and no longer holds any equity interest in TTL thereafter - Wise Ally Holdings completed the disposal of **10%** of TTL shares on February 13, 2025, and no longer holds any equity interest[34](index=34&type=chunk) - The disposal of the joint venture generated a gain of **HK$730 thousand**[21](index=21&type=chunk)[34](index=34&type=chunk) [Financial Assets at Fair Value Through Profit or Loss](index=13&type=section&id=3.13%20Financial%20Assets%20at%20Fair%20Value%20Through%20Profit%20or%20Loss) The Group previously held two tranches of convertible bonds issued by TTL with a total principal of HK$44,000,000, which were fully recovered on February 10, 2025, including outstanding principal and interest, through an undertaking deed by Mr. Chu Wai Hang, resulting in a fair value gain of HK$23,228 thousand - The Group previously held convertible bonds issued by TTL with a total principal of **HK$44,000,000**[37](index=37&type=chunk) - The convertible bonds were fully recovered on February 10, 2025, including outstanding principal and interest, through an undertaking deed by Mr. Chu Wai Hang[38](index=38&type=chunk) - A fair value gain of **HK$23,228 thousand** was recognized from the convertible bond investment[21](index=21&type=chunk)[40](index=40&type=chunk) [Management Discussion and Analysis](index=14&type=section&id=Management%20Discussion%20and%20Analysis) [Business and Financial Review](index=14&type=section&id=4.1%20Business%20and%20Financial%20Review) H1 2025 saw a 16.6% revenue decrease and 27.4% gross profit decrease due to major customer new product development cycle transitions, reduced order volumes, product mix changes, and US tariff policy uncertainties, which the company addressed by reducing bank borrowings, actively collecting trade receivables, and prudent procurement, while other net income significantly increased due to fair value changes in financial assets - Revenue and gross profit decline primarily attributed to major customer new product development cycle transitions, reduced order volumes, product mix changes, and US tariff policy uncertainties[39](index=39&type=chunk) - Measures taken include reducing bank borrowings (down **34.3%**), actively collecting trade receivables (down **34.1%**), and prudent procurement (inventory reduction)[40](index=40&type=chunk) - Other net income increased by **HK$26.4 million**, mainly from a one-off gain of **HK$23.2 million** from fair value changes in financial assets[40](index=40&type=chunk) - Selling, distribution, and administrative expenses increased by **HK$4.9 million**, mainly due to higher sales commissions (related to increased sales to US customers) and increased employee benefit costs[41](index=41&type=chunk) - Net finance costs decreased by **71.3%**, primarily due to a strategic reduction in bank borrowings and increased interest income[42](index=42&type=chunk) - Exchange gains increased by **81.3%** to **HK$5.8 million**, mainly due to the appreciation of the US dollar[42](index=42&type=chunk) [Outlook](index=15&type=section&id=4.2%20Outlook) For H2 2025, the Group will continue to navigate global challenges by strengthening business resilience through cost management, debt reduction, and advancing its "China Plus One" manufacturing strategy, anticipating ongoing challenges from US-China tariff uncertainties, global economic volatility, and geopolitical tensions that may impact orders, profits, and supply chains, while enhanced capacity at the Batam production base positively impacts US customer business growth, aligning with the "China Plus One" strategy - The Group will strengthen business resilience through prudent cost management, effective debt reduction, and advancing its "China Plus One" manufacturing strategy[43](index=43&type=chunk) - Ongoing challenges are expected from US-China tariff uncertainties, global economic volatility, and geopolitical tensions[43](index=43&type=chunk) - Enhanced capacity at the Batam production base positively impacts US customer business growth, aligning with the "China Plus One" strategy and enhancing service capabilities amidst tariff uncertainties[44](index=44&type=chunk) - Prudent procurement and inventory management, strict control over trade receivables, and diversification of customer base and production layout will be maintained[45](index=45&type=chunk) [Liquidity and Financial Resources](index=16&type=section&id=4.3%20Liquidity%20and%20Financial%20Resources) As of June 30, 2025, the Group's bank borrowings were HK$123.8 million, with cash and cash equivalents and time deposits totaling HK$320.0 million, resulting in a net cash position of HK$196.2 million (December 31, 2024: HK$95.6 million), indicating ample liquidity Liquidity Position (HK$ thousand) | Indicator | 2025 June 30 (HK$ thousand) | 2024 Dec 31 (HK$ thousand) | | :--- | :--- | :--- | | Bank Borrowings | 123,774 | 188,279 | | Cash and Cash Equivalents | 299,792 | 235,333 | | Time Deposits with Original Maturity Over Three Months | 20,162 | 48,576 | | **Total Net Cash** | **196,180** | **95,630** | - The Group is in a net cash position with ample liquidity, thus no gearing ratio is presented[46](index=46&type=chunk)[47](index=47&type=chunk) [Capital Expenditure and Commitments](index=16&type=section&id=4.4%20Capital%20Expenditure%20and%20Commitments) For H1 2025, the Group incurred total capital expenditure of HK$4.5 million, primarily for additions to property, plant and equipment and intangible assets, and as of June 30, 2025, had contracted but unprovided capital commitments for plant and machinery of HK$2.7 million - Total capital expenditure for H1 2025 was **HK$4.5 million**, used for property, plant and equipment and intangible assets[48](index=48&type=chunk) - As of June 30, 2025, contracted but unprovided capital commitments for plant and machinery amounted to **HK$2.7 million**[48](index=48&type=chunk) [Contingent Liabilities and Pledge of Assets](index=16&type=section&id=4.5%20Contingent%20Liabilities%20and%20Pledge%20of%20Assets) As of June 30, 2025, the Group had no significant contingent liabilities or pending/threatened legal proceedings that could have a material adverse effect, and its assets were not pledged - As of June 30, 2025, the Group had no significant contingent liabilities or pending legal proceedings[49](index=49&type=chunk) - As of June 30, 2025, the Group's assets were not pledged[50](index=50&type=chunk) [Foreign Exchange and Risk Management](index=17&type=section&id=4.6%20Foreign%20Exchange%20and%20Risk%20Management) The Group faces foreign exchange risk primarily related to the US dollar and Renminbi, with most sales denominated in US dollars and some purchases and operating expenses in Renminbi, and will closely monitor and take proactive, prudent measures to mitigate these risks - The Group faces US dollar and Renminbi foreign exchange risk, with most sales denominated in US dollars and some expenses in Renminbi[51](index=51&type=chunk) - The Group will closely monitor foreign exchange risk and take proactive, prudent measures to minimize it[51](index=51&type=chunk) [Capital Structure](index=17&type=section&id=4.7%20Capital%20Structure) As of June 30, 2025, the company had 100,000,000 issued shares of HK$0.2 par value each, with the capital structure comprising bank borrowings and equity attributable to equity holders, showing no significant changes during the reporting period - As of June 30, 2025, total issued shares were **100,000,000** with a par value of **HK$0.2** per share[53](index=53&type=chunk) - The capital structure includes bank borrowings and equity attributable to equity holders, with no significant changes during the reporting period[53](index=53&type=chunk) [Significant Events After Reporting Period](index=17&type=section&id=4.8%20Significant%20Events%20After%20Reporting%20Period) Except for matters disclosed in this announcement, no significant events materially affecting the Group's business occurred after June 30, 2025 - No significant events occurred after the reporting period[54](index=54&type=chunk) [Material Investments, Acquisitions and Disposals](index=17&type=section&id=4.9%20Material%20Investments,%20Acquisitions%20and%20Disposals) Aside from the disposal of 10% of TTL's issued shares, the Group had no other material investments, acquisitions, or disposals during the reporting period, and as of June 30, 2025, held no material investments representing 5% or more of total asset value - No other material investments, acquisitions, or disposals occurred during the reporting period, except for the disposal of **10%** of TTL shares[55](index=55&type=chunk) - As of June 30, 2025, no material investments representing **5%** or more of total asset value were held[55](index=55&type=chunk) [Other Information](index=18&type=section&id=Other%20Information) [Employee Information](index=18&type=section&id=5.1%20Employee%20Information) As of June 30, 2025, the Group employed approximately 1,500 employees in Hong Kong and China, a decrease from 1,900 on December 31, 2024, with total staff costs of HK$120.4 million for H1 2025, and compensation policies based on job nature, qualifications, and experience, including year-end bonuses, insurance benefits, and discretionary bonuses - As of June 30, 2025, the number of employees was approximately **1,500**, a decrease from **1,900** on December 31, 2024[56](index=56&type=chunk) - Total staff costs for H1 2025 were **HK$120.4 million**[56](index=56&type=chunk) - Compensation policy is based on job nature, qualifications, and experience, offering year-end bonuses, insurance benefits, and discretionary bonuses[56](index=56&type=chunk) - As of June 30, 2025, no outstanding share options were granted under the share option scheme[56](index=56&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=18&type=section&id=5.2%20Purchase,%20Sale%20or%20Redemption%20of%20the%20Company's%20Listed%20Securities) 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, nor did they hold any treasury shares - During the reporting period, neither the company nor its subsidiaries purchased, sold, or redeemed any listed securities, nor held any treasury shares[57](index=57&type=chunk) [Corporate Governance](index=18&type=section&id=5.3%20Corporate%20Governance) The company complied with the Corporate Governance Code during the reporting period, except for a deviation from code provision C.2.1 regarding the separation of Chairman and Chief Executive roles, as Mr. Chu Wai Hang holds both positions, which the Board believes provides strong and consistent leadership, with three independent non-executive directors ensuring a balance of power - The company complied with the Corporate Governance Code, except for a deviation from code provision C.2.1 regarding the separation of Chairman and Chief Executive roles[58](index=58&type=chunk) - Mr. Chu Wai Hang serves as both Chairman and Chief Executive, an arrangement the Board believes provides strong and consistent leadership[58](index=58&type=chunk) - The Board includes three independent non-executive directors to ensure a balance of power[59](index=59&type=chunk) [Standard of Conduct for Securities Transactions by Directors](index=19&type=section&id=5.4%20Standard%20of%20Conduct%20for%20Securities%20Transactions%20by%20Directors) The company has adopted the Model Code set out in Appendix C3 of the Listing Rules, and all directors confirmed compliance with the code during the reporting period after inquiry - The company adopted the Model Code in Appendix C3 of the Listing Rules, and all directors confirmed compliance during the reporting period[60](index=60&type=chunk) [Audit Committee](index=19&type=section&id=5.5%20Audit%20Committee) The Audit Committee, composed of three independent non-executive directors, reviewed the Group's accounting principles, risk management, internal controls, and financial reporting matters, including the unaudited condensed consolidated financial statements and interim results for the six months ended June 30, 2025 - The Audit Committee, comprising three independent non-executive directors, reviewed the Group's accounting principles, risk management, internal controls, and interim results[61](index=61&type=chunk) [Publication of Interim Results and Interim Report](index=19&type=section&id=5.6%20Publication%20of%20Interim%20Results%20and%20Interim%20Report) This announcement has been published on the company's and the Stock Exchange's websites, and the 2025 interim report will be distributed to shareholders and published on these websites in due course - This announcement has been published on the company's website and the Stock Exchange's website[62](index=62&type=chunk) - The 2025 interim report will be distributed to shareholders and published on the websites in due course[62](index=62&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，並明確表示概不會就因本公告全部或任何部分內容而產生或 因倚賴該等內容而引致的任何損失承擔任何責任。 承董事會命 豐展控股有限公司 （於開曼群島註冊成立的有限公司） （股份代號：1826） 董事會主席兼行政總裁 截至二零二五年六月三十日止六個月之 中期業績公告 豐展控股有限公司（「本公司」）董事（「董事」）會（「董事會」）欣然公佈本公司及 其附屬公司截至二零二五年六月三十日止六個月之未經審核綜合業績。本公 告載列本公司二零二五年中期報告全文，符合香港聯合交易所有限公司證券 上市規則有關中期業績初步公告隨附資料的相關規定。 吳建韶 董事會 香港，二零二五年八月二十八日 於本公告日期，董事會包括執行董事吳建韶先生（主席兼行政總裁）；獨立非執行董事蕭偉霖 先生、伍頌慈女士及黃鎮華先生。 目錄 | 公司資料 | 2–3 | | --- | --- | | 財務摘要 | 4 | | 簡明綜合損益及其他全面收入表 | 5–6 | | 簡明綜合財務狀況表 | 7–8 | | 簡明綜合權益變動表 | 9 | | 簡明綜 ...

[Financial Highlights](index=1&type=section&id=Financial%20Highlights) The Group reported a 5.1% revenue decrease to HK$38.0 million, a significant drop in gross profit margin to 16.5%, and an expanded loss attributable to owners of HK$21.8 million for H1 2025 [Performance Overview](index=1&type=section&id=Performance%20Overview) For the six months ended June 30, 2025, the Group's revenue decreased by 5.1% to HK$38.0 million, gross profit margin significantly dropped to 16.5%, and loss attributable to owners expanded to HK$21.8 million, with basic and diluted loss per share increasing to HK$6.04 cents 2025 H1 Key Financial Data Comparison (HK$ thousand) | Indicator | 2025 H1 (HK$ thousand) | 2024 H1 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 38,006 | 40,068 | -5.1% | | Gross Profit | 6,261 | 19,446 | -67.8% | | Gross Profit Margin | 16.5% | 48.5% | -32.0pp | | Loss for the period attributable to owners of the Company | (21,750) | (5,337) | +307.5% | | Basic and Diluted Loss Per Share (HK cents) | (6.04) | (1.48) | +308.1% | - The Group's revenue decreased by **5.1%** to **HK$38.0 million**, with gross profit significantly declining by **67.8%** to **HK$6.3 million**[3](index=3&type=chunk) [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, other comprehensive income, and financial position for the reporting period [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 Group reported revenue of HK$38.0 million, with significantly increased cost of sales leading to a gross profit of HK$6.3 million, and loss before tax expanded to HK$21.8 million, compared to a HK$5.3 million loss in the prior period Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income Summary (HK$ thousand) | Indicator | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Revenue | 38,006 | 40,068 | | Cost of sales | (31,745) | (20,622) | | Gross Profit | 6,261 | 19,446 | | Other income and losses, net | 11,405 | 11,914 | | Other income | 225 | 8,127 | | Distribution expenses | (8,810) | (7,615) | | Administrative expenses | (26,320) | (33,743) | | Finance costs | (4,511) | (4,840) | | Loss before tax | (21,750) | (6,711) | | Income tax credit | – | 1,374 | | Loss for the period attributable to owners of the Company | (21,750) | (5,337) | | Exchange differences on translation of foreign operations | 13,790 | (8,103) | | Total comprehensive income for the period | (7,960) | (13,332) | | Basic and diluted loss per share (HK cents) | (6.04) | (1.48) | - The Group's **revenue decreased** from **HK$40.1 million** in 2024 to **HK$38.0 million** in 2025, while **cost of sales significantly increased** from **HK$20.6 million** to **HK$31.7 million**[4](index=4&type=chunk) [Condensed Consolidated Statement of Financial Position](index=3&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the Group's total assets less current liabilities were HK$134.3 million, a decrease from December 31, 2024, with net assets declining to HK$93.9 million due to reduced net current assets Condensed Consolidated Statement of Financial Position Summary (HK$ thousand) | Indicator | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | **Assets** | | | | Non-current assets | 90,161 | 87,399 | | Current assets | 460,576 | 465,602 | | **Liabilities** | | | | Current liabilities | 416,398 | 409,881 | | Non-current liabilities | 40,394 | 41,215 | | **Equity** | | | | Net assets | 93,945 | 101,905 | | Total equity | 93,945 | 101,905 | - **Total equity decreased** from **HK$101.9 million** as of December 31, 2024, to **HK$93.9 million** as of June 30, 2025[5](index=5&type=chunk) - **Non-current assets increased** from **HK$87.4 million** to **HK$90.2 million**, while **current assets decreased** from **HK$465.6 million** to **HK$460.6 million**[6](index=6&type=chunk) [Notes to the Condensed Consolidated Financial Statements](index=5&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed notes to the condensed consolidated financial statements, covering basis of presentation, accounting policy changes, segment information, and specific financial line items [1. Basis of Presentation](index=5&type=section&id=1.%20Basis%20of%20Presentation) The condensed consolidated financial statements are prepared in Hong Kong dollars under IAS 34 and Appendix D2 of the HKEX Listing Rules, using consistent accounting policies with the 2024 annual financial statements - The financial statements are prepared in **Hong Kong dollars** in accordance with **International Accounting Standard 34** and **Appendix D2 of the Listing Rules** of The Stock Exchange of Hong Kong Limited[7](index=7&type=chunk)[8](index=8&type=chunk) [2. Changes in Accounting Policies](index=5&type=section&id=2.%20Changes%20in%20Accounting%20Policies) Revisions to IFRS effective for the current period have no material impact on the interim financial report's performance or financial position, and no new standards were early adopted - Revisions to International Financial Reporting Standards effective for the current period have **no material impact** on the financial position and performance, and no new standards were early adopted[9](index=9&type=chunk) [3. Revenue and Segment Information](index=5&type=section&id=3.%20Revenue%20and%20Segment%20Information) The Group's revenue, primarily from watch and smartwatch accessory sales, is segmented into watch and smartwatch manufacturing businesses, with total revenue of HK$38.0 million in H1 2025, showing significant growth in smartwatch manufacturing but a decline in watch business, particularly in China - The Group's principal activities are **watch manufacturing and sales** and **smartwatch manufacturing**, with revenue recognized at a point in time[10](index=10&type=chunk) [Segment Revenue and Results](index=6&type=section&id=Segment%20Revenue%20and%20Results) In H1 2025, watch business revenue sharply declined by 46.5% to HK$12.3 million, shifting from profit to a HK$11.0 million loss, while smartwatch manufacturing revenue grew by 50.3% to HK$25.7 million but still incurred a HK$5.7 million loss, expanding the overall loss before tax to HK$21.8 million Segment Revenue and Results Comparison (HK$ thousand) | Segment | 2025 H1 Revenue | 2024 H1 Revenue | Revenue Change (%) | 2025 H1 Segment Result | 2024 H1 Segment Result | | :--- | :--- | :--- | :--- | :--- | :--- | | Watch | 12,266 | 22,965 | -46.5% | (11,038) | 5,285 | | Smartwatch Manufacturing | 25,740 | 17,103 | +50.3% | (5,743) | (3,625) | | Total | 38,006 | 40,068 | -5.1% | (16,781) | 1,660 | - The **watch business revenue decreased by 46.5%** to **HK$12.3 million**, resulting in a **loss of HK$11.0 million**, while the **smartwatch manufacturing business revenue increased by 50.3%** to **HK$25.7 million**, incurring a **loss of HK$5.7 million**[11](index=11&type=chunk) - The watch business segment primarily focuses on **manufacturing and selling watches**, whereas the smartwatch manufacturing business segment designs, develops, and manufactures stainless steel alloy watch cases and smartwatch cases on an **ODM/OEM basis**[12](index=12&type=chunk) [Geographical Information](index=7&type=section&id=Geographical%20Information) China remains the Group's largest market, though H1 2025 revenue decreased to HK$30.7 million, while Hong Kong and Macau saw slight growth, Korea's revenue became zero, and Southeast Asia experienced significant growth Revenue Analysis by Customer Location (HK$ thousand) | Region | 2025 H1 (HK$ thousand) | 2024 H1 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | China | 30,739 | 32,409 | -5.1% | | Hong Kong and Macau | 3,985 | 2,418 | +64.8% | | Korea | – | 1,998 | -100% | | Southeast Asia | 3,034 | 624 | +386.2% | | Others (mainly Europe) | 248 | 2,619 | -90.5% | | Total | 38,006 | 40,068 | -5.1% | - **China's revenue decreased by 5.1%** to **HK$30.7 million**, while **Hong Kong and Macau revenue increased by 64.8%** to **HK$4.0 million**, and **Southeast Asia revenue grew by 386.2%** to **HK$3.0 million**[14](index=14&type=chunk) [Information about Major Customers](index=7&type=section&id=Information%20about%20Major%20Customers) In H1 2025, Customer A became the Group's major customer, contributing HK$11.0 million in revenue, while Customer B, a major customer in the prior period with HK$5.9 million, made no contribution this period Major Customer Revenue (HK$ thousand) | Customer | 2025 H1 (HK$ thousand) | 2024 H1 (HK$ thousand) | | :--- | :--- | :--- | | Customer A | 11,038 | – | | Customer B | – | 5,894 | - **Customer A contributed HK$11.0 million** in revenue in H1 2025, becoming a major customer, whereas **Customer B, a major customer in H1 2024 with HK$5.9 million**, made no contribution in the current period[15](index=15&type=chunk) [4. Loss Before Tax](index=7&type=section&id=4.%20Loss%20Before%20Tax) H1 2025 loss before tax significantly expanded to HK$21.8 million from HK$6.7 million in the prior period, driven by cost of inventories recognized at HK$31.7 million, depreciation of HK$6.8 million, amortization of HK$5.1 million, and staff costs of HK$25.5 million Major Components of Loss Before Tax (HK$ thousand) | Item | 2025 H1 (HK$ thousand) | 2024 H1 (HK$ thousand) | | :--- | :--- | :--- | | Cost of inventories recognized | 31,745 | 20,622 | | Government grants | (30) | – | | Depreciation of property, plant and equipment | 6,842 | 4,510 | | Amortisation of intangible assets | 5,114 | 6,043 | | Total staff costs | 25,515 | 25,649 | - **Loss before tax expanded** to **HK$21.8 million** in H1 2025 from **HK$6.7 million** in H1 2024, primarily due to increased cost of inventories recognized and depreciation[16](index=16&type=chunk) [5. Income Tax Credit](index=8&type=section&id=5.%20Income%20Tax%20Credit) The Group had no income tax credit in H1 2025, compared to HK$1.4 million in H1 2024, with no provision for Hong Kong and China subsidiaries due to no taxable profits, while Swiss subsidiaries are taxed at 8.5% federal and 7.2% cantonal/municipal rates - **No income tax credit** was recorded in H1 2025, compared to **HK$1.4 million** in H1 2024[18](index=18&type=chunk) - Hong Kong and China subsidiaries made **no provision for profits tax** due to the absence of assessable profits, while Swiss subsidiaries are subject to direct federal tax at **8.5%** and cantonal/municipal tax at **7.2%**[19](index=19&type=chunk) [6. Dividends](index=8&type=section&id=6.%20Dividends) For the six months ended June 30, 2025, and 2024, the Company neither paid nor proposed any dividends - **No dividends were paid or proposed** during the reporting period or subsequent to the period end[20](index=20&type=chunk) [7. Loss Per Share](index=8&type=section&id=7.%20Loss%20Per%20Share) H1 2025 basic and diluted loss per share significantly increased to HK$6.04 cents from HK$1.48 cents in the prior period, primarily due to the expanded loss attributable to owners of HK$21.8 million, with the weighted average number of ordinary shares remaining unchanged Loss Per Share Comparison | Indicator | 2025 H1 | 2024 H1 | | :--- | :--- | :--- | | Loss attributable to owners of the Company (HK$ thousand) | 21,750 | 5,337 | | Weighted average number of ordinary shares in issue (thousand shares) | 360,258 | 360,258 | | Basic and diluted loss per share (HK cents) | (6.04) | (1.48) | - **Basic and diluted loss per share increased** to **HK$6.04 cents** in H1 2025 from **HK$1.48 cents** in H1 2024, driven by the expanded loss attributable to owners of **HK$21.8 million**[21](index=21&type=chunk) [8. Trade and Other Receivables](index=9&type=section&id=8.%20Trade%20and%20Other%20Receivables) As of June 30, 2025, total trade and other receivables were HK$142.5 million, a slight decrease from December 31, 2024, with non-current receivables significantly up due to property, plant, and equipment deposits, while net trade receivables declined, with the largest portion over 270 days Trade and Other Receivables Composition (HK$ thousand) | Item | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Non-current receivables | 11,871 | 991 | | Trade receivables, net | 117,111 | 134,965 | | Other receivables | 7,334 | 3,029 | | Prepayments | 4,376 | 2,473 | | Total current trade and other receivables | 130,619 | 142,533 | | Total trade and other receivables | 142,490 | 143,524 | - **Total trade and other receivables decreased** slightly to **HK$142.5 million** as of June 30, 2025, from **HK$143.5 million** as of December 31, 2024, with **non-current receivables significantly increasing** due to deposits for property, plant, and equipment[22](index=22&type=chunk) Trade Receivables Ageing Analysis (HK$ thousand) | Ageing | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | 0 to 90 days | 20,284 | 36,911 | | 91 to 180 days | 8,633 | 12,594 | | 181 to 270 days | 15,695 | 6,593 | | Over 270 days | 72,499 | 78,867 | | Total | 117,111 | 134,965 | - **Trade receivables decreased** to **HK$117.1 million** as of June 30, 2025, from **HK$135.0 million** as of December 31, 2024, with the **largest portion (HK$72.5 million) aged over 270 days**[23](index=23&type=chunk) [9. Intangible Assets](index=10&type=section&id=9.%20Intangible%20Assets) As of June 30, 2025, the carrying amount of intangible assets decreased to HK$32.7 million from December 31, 2024, primarily comprising technical know-how, customer relationships, and computer software, with declines in technical know-how and customer relationships Intangible Assets Carrying Amount Composition (HK$ thousand) | Item | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Computer software | 1,143 | 1,181 | | Technical know-how | 26,011 | 26,899 | | Customer relationships | 5,518 | 8,721 | | Total | 32,672 | 36,801 | - The **carrying amount of intangible assets decreased** to **HK$32.7 million** as of June 30, 2025, from **HK$36.8 million** as of December 31, 2024, primarily due to a decline in technical know-how and customer relationships[24](index=24&type=chunk) [10. Trade and Other Payables](index=10&type=section&id=10.%20Trade%20and%20Other%20Payables) As of June 30, 2025, total trade and other payables decreased by HK$15.9 million to HK$51.9 million from December 31, 2024, with both trade payables and accrued expenses declining Trade and Other Payables Composition (HK$ thousand) | Item | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Trade payables | 35,678 | 49,225 | | Other payables | 5,518 | 4,885 | | Accrued expenses | 10,228 | 13,146 | | Contract liabilities from sales of goods | 492 | 532 | | Total | 51,916 | 67,788 | - **Total trade and other payables decreased** by **HK$15.9 million** to **HK$51.9 million** as of June 30, 2025, from **HK$67.8 million** as of December 31, 2024, with both trade payables and accrued expenses declining[24](index=24&type=chunk) [Management Discussion and Analysis](index=11&type=section&id=Management%20Discussion%20and%20Analysis) This section provides a comprehensive review of the Group's overall performance, business segments, financial results, and operational strategies, including employee and capital commitments [Overall Performance Review](index=11&type=section&id=Overall%20Performance%20Review) In H1 2025, influenced by global economic instability and geopolitical tensions, the Group's revenue decreased by 5.1% to HK$38.0 million, gross profit margin significantly dropped to 16.5%, and loss attributable to owners expanded to HK$21.8 million, with efforts underway for H2 business expansion - Global macroeconomic instability and geopolitical tensions led to a **slower-than-expected economic recovery**, impacting the watch industry and resulting in the Group's revenue falling short of expectations[25](index=25&type=chunk) 2025 H1 Key Financial Indicators Change | Indicator | 2025 H1 | 2024 H1 | Change | | :--- | :--- | :--- | :--- | | Revenue | Approx. HK$38.0 million | Approx. HK$40.1 million | Decreased by approx. 5.1% | | Gross Profit | Approx. HK$6.3 million | Approx. HK$19.4 million | Decreased by approx. 67.8% | | Gross Profit Margin | Approx. 16.5% | Approx. 48.5% | Decreased by approx. 32.0 percentage points | | Loss attributable to equity holders | Approx. HK$21.8 million | Approx. HK$5.3 million | Loss expanded | - The Group's **revenue decreased by approximately 5.1%** to **HK$38.0 million**, and **gross profit significantly declined by approximately 67.8%** to **HK$6.3 million**, leading to an **expanded loss attributable to equity holders of approximately HK$21.8 million**[25](index=25&type=chunk) [Business Review](index=11&type=section&id=Business%20Review) The Group's traditional watch business experienced significant sales decline due to global economic weakness and insufficient recovery in the Chinese market, while smartwatch manufacturing revenue grew, prompting active responses through product R&D, design innovation, and optimized production and sales strategies - The Group demonstrates **resilience and adaptability** in the face of market challenges, committed to **diversifying products**, **improving profitability**, and **solidifying its position** in the watch industry[28](index=28&type=chunk) [Traditional Watch Business](index=11&type=section&id=Traditional%20Watch%20Business) The traditional watch business faces challenges from global economic weakness, declining Swiss watch exports, and a sluggish Chinese market, leading to conservative, value-focused consumer behavior, despite the Group's 169-year history with the "Ernest Borel" brand as a Swiss couple watch leader and 700 sales points as of June 30, 2025, with product R&D and design innovation planned - Ernest Borel, with **169 years of history**, upholds "Swiss Made" quality and is positioned as a leader in Swiss couple watches with the brand image of "Dancing Couple"[26](index=26&type=chunk) - As of June 30, 2025, the Group operates **700 sales points globally**[26](index=26&type=chunk) - Global economic weakness led to a **significant decline in Swiss watch exports**, particularly in the **Chinese and Hong Kong markets**, with consumers becoming more conservative and prioritizing value for money[26](index=26&type=chunk)[27](index=27&type=chunk) [China Market](index=12&type=section&id=China%20Market) China remains the Group's primary market, but watch business revenue decreased by 49.2% from HK$18.7 million in H1 FY2024 to HK$9.5 million in H1 FY2025, representing 77.3% of total watch business revenue, with 591 sales points as of June 30, 2025 China Market Watch Business Revenue (HK$ thousand) | Indicator | 2025 H1 (HK$ thousand) | 2024 H1 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | China market revenue | Approx. 9,500 | Approx. 18,700 | -49.2% | | Proportion of total watch business revenue | Approx. 77.3% | - | - | - As of June 30, 2025, the Group has **591 sales points in China**[29](index=29&type=chunk) - **China market watch business revenue decreased by approximately 49.2%** to **HK$9.5 million** in H1 2025, accounting for approximately **77.3%** of total watch business revenue[29](index=29&type=chunk) [Hong Kong and Macau Market](index=12&type=section&id=Hong%20Kong%20and%20Macau%20Market) Sales in Hong Kong and Macau decreased by 11.1% from HK$1.8 million in H1 FY2024 to HK$1.6 million in H1 FY2025, accounting for 12.7% of total watch business revenue, with 30 sales points as of June 30, 2025 Hong Kong and Macau Market Watch Business Revenue (HK$ thousand) | Indicator | 2025 H1 (HK$ thousand) | 2024 H1 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Hong Kong and Macau sales | Approx. 1,600 | Approx. 1,800 | -11.1% | | Proportion of total watch business revenue | Approx. 12.7% | - | - | - As of June 30, 2025, the Group has **30 sales points in Hong Kong and Macau**[30](index=30&type=chunk) - **Hong Kong and Macau sales decreased by approximately 11.1%** to **HK$1.6 million** in H1 2025, representing approximately **12.7%** of total watch business revenue[30](index=30&type=chunk) [Other Markets](index=12&type=section&id=Other%20Markets) Sales in other markets (primarily Southeast Asia and Europe) decreased by 52.0% from HK$2.5 million in H1 FY2024 to HK$1.2 million in H1 FY2025, representing 10.0% of total watch business revenue, with 79 sales points as of June 30, 2025 Other Markets Watch Business Revenue (HK$ thousand) | Indicator | 2025 H1 (HK$ thousand) | 2024 H1 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Other market sales | Approx. 1,200 | Approx. 2,500 | -52.0% | | Proportion of total watch business revenue | Approx. 10.0% | - | - | - As of June 30, 2025, the Group has **79 sales points in other markets** (primarily Southeast Asia and Europe)[31](index=31&type=chunk) - **Other market sales decreased by approximately 52.0%** to **HK$1.2 million** in H1 2025, accounting for approximately **10.0%** of total watch business revenue[31](index=31&type=chunk) [Smartwatch Manufacturing Business](index=12&type=section&id=Smartwatch%20Manufacturing%20Business) The smartwatch accessory manufacturing business experienced reduced orders, intense competition leading to extremely low gross profit, and exacerbated losses due to untimely internal human resource adjustments; however, the Group remains confident in its future, expecting it to dominate the watch industry and will continue R&D for patented structural designs - In H1, smartwatch accessory manufacturers experienced a **significant reduction in orders**, leading to **extremely low gross profit** due to intense industry competition, and exacerbated losses from untimely internal human resource adjustments[32](index=32&type=chunk) - The Group remains **confident in the prospects of the smartwatch manufacturing business**, believing smart products represent a fashion trend that will eventually dominate the watch industry, and will continue to **research and develop patented structural designs**[32](index=32&type=chunk) [Financial Review](index=13&type=section&id=Financial%20Review) In H1 2025, the Group's revenue decreased by 5.1% year-on-year, gross profit significantly dropped by 67.8%, leading to a substantial increase in loss attributable to owners; cost of sales rose due to smartwatch manufacturing growth, administrative expenses decreased, and liquidity saw increased bank balances but also higher total bank borrowings [Revenue and Segment Information (Financial Review)](index=13&type=section&id=Revenue%20and%20Segment%20Information%20%28Financial%20Review%29) The Group's total revenue decreased by 5.1% from HK$40.1 million in H1 FY2024 to HK$38.0 million in H1 FY2025, with watch business revenue declining by 46.5% and smartwatch manufacturing revenue growing by 50.3% Revenue Segment Change (HK$ thousand) | Segment | 2025 H1 (HK$ thousand) | 2024 H1 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Total Revenue | 38,006 | 40,068 | -5.1% | | Watch Business Revenue | Approx. 12,300 | Approx. 23,000 | -46.5% | | Smartwatch Manufacturing Business Revenue | Approx. 25,700 | Approx. 17,100 | +50.3% | - **Total revenue decreased by 5.1%** to **HK$38.0 million**, with **watch business revenue declining by 46.5%** to **HK$12.3 million**, while **smartwatch manufacturing business revenue increased by 50.3%** to **HK$25.7 million**[33](index=33&type=chunk)[34](index=34&type=chunk)[35](index=35&type=chunk) [Cost of Sales](index=13&type=section&id=Cost%20of%20Sales) The Group's cost of sales increased by 53.9% from HK$20.6 million in H1 FY2024 to HK$31.7 million in H1 FY2025, with watch business cost of sales rising by 91.7% and smartwatch manufacturing by 45.9% Cost of Sales Segment Change (HK$ thousand) | Segment | 2025 H1 (HK$ thousand) | 2024 H1 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Total Cost of Sales | Approx. 31,700 | Approx. 20,600 | +53.9% | | Watch Business Cost of Sales | Approx. 6,900 | Approx. 3,600 | +91.7% | | Smartwatch Manufacturing Business Cost of Sales | Approx. 24,800 | Approx. 17,000 | +45.9% | - **Total cost of sales increased by 53.9%** to **HK$31.7 million**, with **watch business cost of sales rising by 91.7%** to **HK$6.9 million**, and **smartwatch manufacturing business cost of sales increasing by 45.9%** to **HK$24.8 million**[36](index=36&type=chunk)[37](index=37&type=chunk)[38](index=38&type=chunk) [Gross Profit](index=13&type=section&id=Gross%20Profit) The Group's gross profit significantly decreased by 67.8% from HK$19.4 million in H1 FY2024 to HK$6.3 million in H1 FY2025, with gross profit margin falling from 48.5% to 16.5%, where the watch business contributed HK$5.4 million and smartwatch manufacturing HK$0.9 million Gross Profit and Gross Profit Margin Change (HK$ thousand) | Indicator | 2025 H1 | 2024 H1 | Change (%) | | :--- | :--- | :--- | :--- | | Total Gross Profit | Approx. HK$6.3 million | Approx. HK$19.4 million | -67.8% | | Gross Profit Margin | Approx. 16.5% | Approx. 48.5% | -32.0pp | | Watch Business Gross Profit Contribution | Approx. HK$5.4 million | Approx. HK$19.3 million | -72.0% | | Smartwatch Manufacturing Business Gross Profit Contribution | Approx. HK$0.9 million | Approx. HK$0.1 million | +800.0% | - **Total gross profit significantly decreased by 67.8%** to **HK$6.3 million**, and the **gross profit margin fell by 32.0 percentage points** to **16.5%**[39](index=39&type=chunk) [Net Other Income and Losses](index=13&type=section&id=Net%20Other%20Income%20and%20Losses) The Group recorded net other income of approximately HK$11.4 million in H1 2025, a slight decrease from HK$11.9 million in H1 2024 Net Other Income and Losses (HK$ thousand) | Indicator | 2025 H1 (HK$ thousand) | 2024 H1 (HK$ thousand) | | :--- | :--- | :--- | | Other income and losses, net | Approx. 11,400 | Approx. 11,900 | - **Net other income and losses decreased slightly** to **HK$11.4 million** in H1 2025 from **HK$11.9 million** in H1 2024[40](index=40&type=chunk) [Distribution Expenses](index=14&type=section&id=Distribution%20Expenses) The Group's distribution expenses increased by 15.7% from HK$7.6 million in H1 FY2024 to HK$8.8 million in H1 FY2025, with its proportion of total revenue rising from 19.0% to 23.2% Distribution Expenses Change (HK$ thousand) | Indicator | 2025 H1 (HK$ thousand) | 2024 H1 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Distribution expenses | Approx. 8,800 | Approx. 7,600 | +15.7% | | Proportion of total revenue | Approx. 23.2% | Approx. 19.0% | +4.2pp | - **Distribution expenses increased by 15.7%** to **HK$8.8 million**, and their proportion of total revenue rose by **4.2 percentage points** to **23.2%**[41](index=41&type=chunk) [Administrative Expenses](index=14&type=section&id=Administrative%20Expenses) The Group's administrative expenses decreased by 22.0% from HK$33.7 million in H1 FY2024 to HK$26.3 million in H1 FY2025 Administrative Expenses Change (HK$ thousand) | Indicator | 2025 H1 (HK$ thousand) | 2024 H1 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Administrative expenses | Approx. 26,300 | Approx. 33,700 | -22.0% | - **Administrative expenses decreased by 22.0%** to **HK$26.3 million** in H1 2025[42](index=42&type=chunk) [Finance Costs](index=14&type=section&id=Finance%20Costs) The Group's finance costs decreased by 6.8% from HK$4.8 million in H1 FY2024 to HK$4.5 million in H1 FY2025 Finance Costs Change (HK$ thousand) | Indicator | 2025 H1 (HK$ thousand) | 2024 H1 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Finance costs | Approx. 4,500 | Approx. 4,800 | -6.8% | - **Finance costs decreased by 6.8%** to **HK$4.5 million** in H1 2025[43](index=43&type=chunk) [Loss Attributable to Owners of the Company](index=14&type=section&id=Loss%20Attributable%20to%20Owners%20of%20the%20Company) Loss attributable to owners of the Company expanded to HK$21.8 million in H1 FY2025, compared to a HK$5.3 million loss in H1 FY2024 Loss Attributable to Owners of the Company (HK$ thousand) | Indicator | 2025 H1 (HK$ thousand) | 2024 H1 (HK$ thousand) | | :--- | :--- | :--- | | Loss attributable to owners of the Company | (Approx. 21,800) | (Approx. 5,300) | - **Loss attributable to owners of the Company expanded** to **HK$21.8 million** in H1 2025 from **HK$5.3 million** in H1 2024[44](index=44&type=chunk) [Inventories](index=14&type=section&id=Inventories) As of June 30, 2025, inventories increased by HK$16.3 million to HK$304.4 million, an increase from December 31, 2024 Inventories Change (HK$ thousand) | Indicator | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | Change (HK$ thousand) | | :--- | :--- | :--- | :--- | | Inventories | Approx. 304,400 | Approx. 288,100 | Approx. +16,300 | - **Inventories increased by HK$16.3 million** to **HK$304.4 million** as of June 30, 2025, from **HK$288.1 million** as of December 31, 2024[45](index=45&type=chunk) [Trade and Other Receivables and Payables](index=14&type=section&id=Trade%20and%20Other%20Receivables%20and%20Payables) As of June 30, 2025, trade and other receivables decreased by HK$11.9 million to HK$130.6 million, while trade and other payables decreased by HK$15.9 million to HK$51.9 million Trade and Other Receivables and Payables Change (HK$ thousand) | Indicator | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | Change (HK$ thousand) | | :--- | :--- | :--- | :--- | | Trade and other receivables | Approx. 130,600 | Approx. 142,500 | Approx. -11,900 | | Trade and other payables | Approx. 51,900 | Approx. 67,800 | Approx. -15,900 | - **Trade and other receivables decreased by HK$11.9 million** to **HK$130.6 million**, and **trade and other payables decreased by HK$15.9 million** to **HK$51.9 million** as of June 30, 2025[46](index=46&type=chunk) [Liquidity, Financial Resources and Capital Structure](index=14&type=section&id=Liquidity%2C%20Financial%20Resources%20and%20Capital%20Structure) As of June 30, 2025, the Group's cash and bank balances increased to HK$12.5 million, and total bank and other borrowings rose to HK$360.2 million, with most repayable within one year at interest rates ranging from 1.5% to 7% Liquidity and Borrowings (HK$ thousand) | Indicator | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Cash and bank balances | Approx. 12,500 | Approx. 10,200 | | Total bank and other borrowings | Approx. 360,200 | Approx. 338,100 | | Of which: repayable within one year | Approx. 358,600 | - | | Of which: repayable after one year | Approx. 1,600 | - | - **Cash and bank balances increased** to **HK$12.5 million** as of June 30, 2025, from **HK$10.2 million** as of December 31, 2024[47](index=47&type=chunk) - **Total bank and other borrowings increased** to **HK$360.2 million**, with **HK$358.6 million repayable within one year**[48](index=48&type=chunk) - Bank and other borrowings bear interest at rates ranging from **1.5% to 7%** (December 31, 2024: 1.5% to 6%)[48](index=48&type=chunk) [Foreign Exchange Risk](index=15&type=section&id=Foreign%20Exchange%20Risk) The Group faces foreign exchange fluctuation risk due to foreign currency sales by some member companies and foreign-denominated trade receivables, payables, and bank balances, with management monitoring trends and considering hedging as needed - The Group is exposed to **foreign exchange fluctuation risk** due to foreign currency sales and foreign-denominated trade receivables, payables, and bank balances[49](index=49&type=chunk) - Management will **monitor foreign exchange trends** and consider **hedging** when necessary[50](index=50&type=chunk) [Pledge of Assets](index=15&type=section&id=Pledge%20of%20Assets) As of June 30, 2025, and December 31, 2024, the Group had no significant assets pledged - **No significant assets were pledged** during the reporting period[51](index=51&type=chunk) [Material Acquisitions and Disposals of Subsidiaries or Associates](index=15&type=section&id=Material%20Acquisitions%20and%20Disposals%20of%20Subsidiaries%20or%20Associates) In H1 FY2025, the Group did not undertake any investments, acquisitions, or disposals of subsidiaries, associates, or joint ventures - **No material acquisitions or disposals of subsidiaries or associates** occurred during the reporting period[52](index=52&type=chunk) [Future Plans for Material Investments and Capital Assets](index=15&type=section&id=Future%20Plans%20for%20Material%20Investments%20and%20Capital%20Assets) As of June 30, 2025, the Group had no definite future plans for material investments or acquisitions of property, plant, and equipment - As of June 30, 2025, the Group has **no definite future plans for material investments** or acquisitions of property, plant, and equipment[53](index=53&type=chunk) [Contingent Liabilities](index=15&type=section&id=Contingent%20Liabilities) During the reporting period, the Group had no significant contingent liabilities - **No significant contingent liabilities** existed during the reporting period[54](index=54&type=chunk) [Interim Dividend](index=15&type=section&id=Interim%20Dividend) The Board of Directors resolved not to declare any interim dividend for H1 FY2025 - The Board of Directors resolved **not to declare any interim dividend** for H1 FY2025[55](index=55&type=chunk) [Employees and Remuneration Policy](index=15&type=section&id=Employees%20and%20Remuneration%20Policy) As of June 30, 2025, the Group's full-time employees decreased to 457, with total staff costs maintained at approximately HK$25.5 million; the Group offers fixed salaries, allowances, sales commissions, and year-end bonuses, alongside regular training and annual performance reviews Employee Count and Costs (HK$ thousand) | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Number of full-time employees | 457 | 542 | | Total staff costs (2025 H1) | Approx. HK$25.5 million | Approx. HK$25.6 million (2024 H1) | - The number of **full-time employees decreased to 457** as of June 30, 2025, from 542 as of December 31, 2024, while **total staff costs remained at approximately HK$25.5 million** for H1 2025[56](index=56&type=chunk) - The remuneration policy includes **fixed salaries, allowances, sales commissions, and year-end bonuses**, complemented by **annual performance reviews and regular training**[57](index=57&type=chunk) [Capital Commitments](index=16&type=section&id=Capital%20Commitments) As of June 30, 2025, the Group had no significant capital commitments - **No significant capital commitments** existed at the end of the reporting period[58](index=58&type=chunk) [Events After Reporting Period](index=16&type=section&id=Events%20After%20Reporting%20Period) No significant events occurred after the reporting period - **No significant events occurred** after the reporting period[59](index=59&type=chunk) [Prospects](index=16&type=section&id=Prospects) This section outlines the Group's strategic outlook for its watch and smartwatch accessory manufacturing businesses, focusing on product innovation, market expansion, and operational efficiency to drive future growth [Watch Business (Prospects)](index=16&type=section&id=Watch%20Business%20%28Prospects%29) The Group's watch business will maintain "Swiss Made" quality, align with market trends, enhance performance and competitiveness through product design innovation, youth-oriented and international brand promotion, optimized online/offline distribution, multi-platform e-commerce, supply chain coordination, slow-moving inventory management, brand pricing, and inventory structure optimization [Product Aspects](index=16&type=section&id=Product%20Aspects) The Group will uphold "Swiss Made" quality, follow market trends, analyze consumer behavior and purchasing power, and leverage professional design capabilities to develop men's, women's, and couple watch series tailored for target customers - The Group will uphold **"Swiss Made" high quality**, closely follow market trends, and leverage professional design capabilities to develop men's, women's, and couple watch series that cater to target customers[60](index=60&type=chunk) [Brand Promotion Aspects](index=16&type=section&id=Brand%20Promotion%20Aspects) The Group will enhance "Ernest Borel" brand awareness through coordinated online and offline promotion, targeting younger and international consumers by leveraging social media (Xiaohongshu, TikTok, Instagram, Facebook), increasing influencer collaborations, restructuring online sales teams, and establishing international market teams to expand overseas - The Group will enhance brand awareness through **coordinated online and offline promotion**, utilizing social media platforms (Xiaohongshu, TikTok, Instagram, Facebook) and collaborating with influencers to attract younger and international consumers[61](index=61&type=chunk) - The Group plans to **restructure its online sales team**, establish a dedicated international market team, enhance online marketing skills for overseas markets, develop international clients, and increase participation in overseas exhibitions and proactive client visits[61](index=61&type=chunk) [Distribution Channel Aspects](index=17&type=section&id=Distribution%20Channel%20Aspects) Offline sales growth in 2025 will focus on new development of quality clients and stores, alongside performance growth in existing client stores, adhering to "stabilize scale, increase profit" principles, implementing "one policy per region/client" sales strategies, enhancing customer service, and aiming to expand sales, capture market share, boost profits, and accelerate cash flow - Offline sales performance in 2025 will be driven by the **development of new quality clients and stores**, as well as **performance growth in existing client stores**, implementing "one policy per region" and "one policy per client" sales strategies[62](index=62&type=chunk) - The objectives are to **expand sales scale, capture market share, enhance sales profit, accelerate cash flow**, and strengthen customer service awareness[62](index=62&type=chunk) [E-commerce Aspects](index=17&type=section&id=E-commerce%20Aspects) E-commerce will implement multi-platform operational management, segmenting products across Tmall, JD, Vipshop, optimizing page content, actively expanding to live-streaming platforms like Douyin and other e-commerce channels to boost brand exposure and sales efficiency, while also strengthening brand image maintenance, sales guidance, replenishment mechanisms, and customer relationship management - The Group will implement **multi-platform operational management**, segmenting products across platforms like Tmall, JD, and Vipshop, and optimizing page content to improve conversion rates[63](index=63&type=chunk)[65](index=65&type=chunk) - It will actively expand to **live-streaming platforms like Douyin** and other e-commerce channels to enhance brand exposure and sales efficiency[63](index=63&type=chunk)[65](index=65&type=chunk) - The Group will also strengthen **brand image maintenance, sales guidance, replenishment mechanisms**, and deep customer relationship management[64](index=64&type=chunk) [Supply Chain Coordination and Slow-Moving Inventory Strategy](index=18&type=section&id=Supply%20Chain%20Coordination%20and%20Slow-Moving%20Inventory%20Strategy) The Group will actively coordinate supply chain departments to ensure stable and orderly product supply, focusing on clearing low-stock, diverse slow-moving products in overseas markets, and high-volume slow-moving items in e-commerce and offline channels to effectively improve inventory turnover - The Group will strengthen supply chain communication to ensure stable product supply, focusing on clearing diverse, low-stock slow-moving products in overseas markets, and high-volume slow-moving items in e-commerce and offline channels to improve inventory turnover[66](index=66&type=chunk) [Brand Pricing System and Positioning Maintenance](index=18&type=section&id=Brand%20Pricing%20System%20and%20Positioning%20Maintenance) The Group will continue to advance its brand pricing system, solidifying Ernest Borel's high-end positioning, extending its pricing strategy in 2025 with precise planning and coordination across sales channels to ensure product value, enhance core competitiveness, categorize products into "regular pricing" and "disposal products," strictly control prices for online-offline consistency, and leverage e-commerce for overseas market price support - The Group will continue to advance its **brand pricing system**, solidifying its **high-end brand positioning**, with precise planning and coordination of pricing strategies across all sales channels to ensure product value and enhance core competitiveness[67](index=67&type=chunk) - Products will be categorized into "regular pricing" and "disposal products," with **strict price control** to achieve online-offline price consistency, and the e-commerce department will provide price support for overseas markets[67](index=67&type=chunk) [Inventory Structure Optimization and Cost Control](index=18&type=section&id=Inventory%20Structure%20Optimization%20and%20Cost%20Control) The Group will continuously optimize its overall inventory structure to reduce total stock, strictly controlling ordering cycles, rationally planning production and customs clearance processes to minimize capital tie-up and inventory backlog, and regularly analyzing slow-moving costs and raw material inventory for relevant departments - The Group will optimize its inventory structure to reduce total stock, strictly controlling ordering cycles, rationally planning production and customs clearance processes to minimize capital tie-up and inventory backlog[68](index=68&type=chunk) [Management Aspects](index=18&type=section&id=Management%20Aspects) The Group will implement a regional budget responsibility system, strengthen accounts receivable collection and customer credit risk management to ensure robust cash flow, and continuously promote internal training to enhance all employees' understanding and execution of brand positioning and market strategies - The Group will implement a **regional budget responsibility system**, strengthen **accounts receivable collection** and **customer credit risk management** to ensure robust cash flow[69](index=69&type=chunk) - It will also continuously promote **internal training** to enhance employees' understanding and execution of brand philosophy, cultural values, product advantages, and market strategies[69](index=69&type=chunk) [Smartwatch Accessory Manufacturing Business (Prospects)](index=18&type=section&id=Smartwatch%20Accessory%20Manufacturing%20Business%20%28Prospects%29) The smartwatch accessory manufacturing business aligns well with the Group's traditional watch manufacturing, providing key components and creating industrial synergy; this business is expected to gradually become a significant revenue source, driving overall business structure enhancement and revenue growth, particularly in smartwatch technology breakthroughs and market expansion - The smartwatch accessory manufacturing business is **highly compatible with the Group's traditional watch manufacturing business**, providing key components and creating industrial synergy[70](index=70&type=chunk) - This business is expected to gradually become a **significant source of revenue** for the Group, driving overall business structure enhancement and revenue growth, particularly in **technological breakthroughs and market expansion** within the smartwatch sector[71](index=71&type=chunk) [Conclusion](index=19&type=section&id=Conclusion) Facing global economic challenges and a slower-than-expected Chinese economic recovery, watch business revenue is under pressure; the Group remains confident in the smartwatch manufacturing business as a key growth driver, planning to expand overseas markets, optimize sales channels, and control operating costs to increase revenue, reduce expenses, and generate sustainable shareholder returns - Global economic challenges and shifts in customer consumption patterns, coupled with a slower-than-expected economic recovery in China, have put pressure on watch business revenue[72](index=72&type=chunk) - The Group remains **confident in the prospects of the smartwatch manufacturing business**, believing smart products represent a fashion trend that will eventually dominate the watch industry, and plans to actively research and develop patented structural designs[72](index=72&type=chunk) - The Group will strive to **expand overseas markets**, diversify revenue channels, and **control operating costs** such as administrative expenses to increase revenue, reduce expenses, and create sustainable returns for the Group[72](index=72&type=chunk) [Other Information](index=19&type=section&id=Other%20Information) This section covers corporate governance compliance, directors' securities trading, review of financial statements, and other statutory disclosures [Compliance with Corporate Governance Code](index=19&type=section&id=Compliance%20with%20Corporate%20Governance%20Code) The Board believes the Company has complied with all code provisions of the Corporate Governance Code in Appendix 14 of the Listing Rules for the six months ended June 30, 2025 - The Company has **complied with all code provisions** of the Corporate Governance Code as set out in Appendix 14 of the Listing Rules throughout the reporting period[73](index=73&type=chunk) [Code for Securities Transactions by Directors](index=19&type=section&id=Code%20for%20Securities%20Transactions%20by%20Directors) The Company adopted the Model Code for directors' securities transactions, and all directors confirmed compliance throughout the reporting period - The Company has adopted the **Model Code** as the code of conduct for directors' securities transactions, and all directors confirmed compliance during the reporting period[74](index=74&type=chunk) [Review of Condensed Consolidated Financial Statements](index=20&type=section&id=Review%20of%20Condensed%20Consolidated%20Financial%20Statements) The Audit Committee reviewed the unaudited interim results and report for the six months ended June 30, 2025, deeming them prepared according to applicable accounting standards with sufficient disclosure, and recommended adoption by the Board; the committee comprises three independent non-executive directors, with Mr. Yu Chi Kit as chairman - The Audit Committee has **reviewed the unaudited interim results and interim report**, deeming them prepared in accordance with applicable accounting standards and regulations with sufficient disclosure, and recommended their adoption by the Board[75](index=75&type=chunk) - The Audit Committee comprises **three independent non-executive directors**, with Mr. Yu Chi Kit serving as the committee chairman[75](index=75&type=chunk) [Purchase, Sale or Redemption of Listed Securities](index=20&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20Listed%20Securities) Neither the Company nor its subsidiaries purchased, sold, or redeemed any of the Company's listed securities during the six months ended June 30, 2025 - Neither the Company nor its subsidiaries **purchased, sold, or redeemed any of the Company's listed securities** during the reporting period[76](index=76&type=chunk) [Publication of Interim Results Announcement and Interim Report](index=20&type=section&id=Publication%20of%20Interim%20Results%20Announcement%20and%20Interim%20Report) This announcement has been published on the HKEX and the Company's website, and the interim report for the six months ended June 30, 2025, will be published on the same websites and dispatched to shareholders in due course - This announcement has been **published on the HKEX website and the Company's website**[77](index=77&type=chunk) - The interim report for the six months ended June 30, 2025, will be **published on the aforementioned websites and dispatched to shareholders** in due course[77](index=77&type=chunk)

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不 負 責，對 其 準 確 性 或 完 整 性 亦 不 發 表 任 何 聲 明，並 明 確 表 示，概 不 對 因 本 公 告 全部或任何部份內容而產生或因倚賴該等內容而引致的任何損失承擔任何責 任。 WEIHAI BANK CO., LTD.* 威海銀行股份有限公司* （於 中 華 人 民 共 和 國 註 冊 成 立 的 股 份 有 限 公 司） （股 份 代 號：09677） 截 至2025年6月30日止六個月的中期業績公告 威海銀行股份有限公司*（「本 行」）董事會（「董事會」）謹此公佈本行及其附屬公司 截 至2025年6月30日止六個月的未經審計中期業績。本公告（其載有本行2025年 中 期 報 告 的 全 文）乃遵照香港聯合交易所有限公司證券上市規則有關中期業績所 隨 附 初 步 公 告 的 資 料 的 相 關 規 定。董 事 會 及 其 下 轄 的 審 計 委 員 會 已 審 閱 並 確 認 此 中 期 業 績。本 業 績 公 告 將 於 香 港 聯 合 交 易 所 有 限 公 司 網 站(www.hkexnews.hk) 及本行網站 ...

[Interim Results Announcement Summary](index=1&type=section&id=%E4%B8%AD%E6%9C%9F%E6%A5%AD%E7%B8%BE%E5%85%AC%E5%91%8A%E6%91%98%E8%A6%81) Zhaoke Ophthalmology reported expanded interim losses for the six months ended June 30, 2025, primarily due to the absence of one-time licensing income and increased R&D, while advancing drug approvals and global market presence Key Financial Data for H1 2025 (RMB thousands) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Revenue | 15,803 | 49,769 | | Gross Profit | 8,467 | 42,840 | | Other Income | 26,268 | 44,514 | | Net Other Gains/(Losses) | 20,012 | (8,843) | | R&D Expenses | (113,050) | (89,797) | | General and Administrative Expenses | (30,559) | (31,303) | | Selling and Distribution Expenses | (23,421) | (28,399) | | Finance Costs | (4,340) | (4,814) | | Loss for the Period | (116,623) | (75,802) | | Total Comprehensive Income for the Period | (195,373) | (15,351) | | Non-HKFRS Adjusted Loss for the Period | (115,274) | (75,689) | - The company received NMPA acceptance for new drug applications for **0.01% and 0.02% atropine sulfate ophthalmic solutions** in January and July 2025, respectively, becoming the **only company in China** with two atropine ophthalmic solution specifications under regulatory review[11](index=11&type=chunk)[18](index=18&type=chunk) - The self-developed **cyclosporine ophthalmic gel** new drug application was accepted by the NMPA and received **FDA approval for Phase III trials in the US**, demonstrating its international potential[12](index=12&type=chunk)[22](index=22&type=chunk) - The biologics license application for **bevacizumab intravitreal injection (TAB014)** was accepted by the NMPA, making it the **first wAMD bevacizumab antibody** to submit such an application in China[12](index=12&type=chunk)[24](index=24&type=chunk) - The company's cash and cash equivalents (together with time deposits with original maturity over three months) totaled approximately **RMB 1.0542 billion**, providing a solid financial foundation for R&D and commercialization activities[12](index=12&type=chunk) [Management Discussion and Analysis](index=3&type=section&id=%E7%AE%A1%E7%90%86%E5%B1%A4%E8%A8%8E%E8%AB%96%E5%8F%8A%E5%88%86%E6%9E%90) This section details Zhaoke Ophthalmology's strategic overview, key operational and financial highlights, R&D pipeline, commercialization efforts, global partnerships, manufacturing capabilities, and future outlook [Overview](index=3&type=section&id=%E6%A6%82%E8%A6%BD) Zhaoke Ophthalmology is a leading ophthalmic pharmaceutical company focused on developing and commercializing therapies for unmet medical needs, with a robust pipeline and expanding global presence - Zhaoke Ophthalmology is dedicated to the research, development, manufacturing, and commercialization of therapies to address unmet ophthalmic medical needs[9](index=9&type=chunk) - The company possesses three flagship drugs nearing market approval: **atropine sulfate ophthalmic solution (NVK002)**, **cyclosporine ophthalmic gel**, and **bevacizumab intravitreal injection (TAB014)**[9](index=9&type=chunk) - The company is developing two promising drug candidates: **BRIMOCHOL™ PF** (presbyopia) and **ZKY001** (corneal epithelial defect)[9](index=9&type=chunk) - The company has strategically expanded its business footprint to markets including the US, Australia, New Zealand, the Middle East, South Korea, Malaysia, Thailand, and Indonesia[10](index=10&type=chunk) [Highlights](index=3&type=section&id=%E6%91%98%E8%A6%81) This section highlights Zhaoke Ophthalmology's key advancements, including regulatory milestones for innovative drugs, strategic global expansion, US market achievements, international manufacturing recognition, and a solid financial foundation - New drug applications for **0.01% and 0.02% atropine sulfate ophthalmic solution (NVK002)** were accepted by the NMPA, enhancing the company's competitiveness as the second market entrant[11](index=11&type=chunk) - The self-developed **cyclosporine ophthalmic gel** new drug application was accepted by the NMPA and received **FDA approval for Phase III trials in the US**[12](index=12&type=chunk) - The biologics license application for **bevacizumab intravitreal injection (TAB014)** was accepted by the NMPA, making it the **first wAMD bevacizumab antibody** to submit such an application in China[12](index=12&type=chunk) - The company has expanded its global business footprint to new markets including Australia, New Zealand, Thailand, the Middle East, and Indonesia, partnering with leading local pharmaceutical companies for product commercialization[12](index=12&type=chunk) - The company established a strategic partnership with US-based Somerset Therapeutics LLC and obtained **Orphan Drug Designation (ODD)** for its patented melphalan formulation for treating pediatric retinoblastoma[12](index=12&type=chunk) - The company's advanced pharmaceutical facility in Nansha, Guangzhou, has been recognized by US-based Somerset Therapeutics LLC and France's FAREVA Group as a manufacturing base for their ophthalmic drugs[12](index=12&type=chunk) - As of the end of June 2025, the company's cash and cash equivalents (together with time deposits with original maturity over three months) totaled approximately **RMB 1.0542 billion**, sufficient to support R&D and commercialization activities for several years[12](index=12&type=chunk) [Business Review](index=5&type=section&id=%E6%A5%AD%E5%8B%99%E5%9B%9E%E9%A1%A7) This section reviews Zhaoke Ophthalmology's comprehensive pipeline strategy, R&D progress, commercialization achievements, global partnerships, manufacturing capabilities, and ESG initiatives [Pipeline Strategy](index=5&type=section&id=%E7%AE%A1%E7%B7%9A%E7%AD%96%E7%95%A5) Zhaoke Ophthalmology has a comprehensive innovative and generic drug pipeline targeting six major ophthalmic diseases with a multi-target therapeutic strategy - The company has established a comprehensive portfolio of innovative and generic drugs targeting **six major ophthalmic diseases**: dry eye, myopia, presbyopia, wAMD/DME, glaucoma, and CED[13](index=13&type=chunk) - The company believes that addressing the numerous complex causes of diseases with targeted treatments is the optimal approach, thus selecting multiple drug candidates for these conditions[13](index=13&type=chunk) [Research and Development (R&D)](index=5&type=section&id=%E7%A0%94%E7%A9%B6%E5%8F%8A%E9%96%8B%E7%99%BC%EF%BC%88%E7%A0%94%E7%99%BC%EF%BC%89) R&D is Zhaoke Ophthalmology's cornerstone, with the company transforming into an R&D and commercialization entity, advancing late-stage assets, and increasing R&D expenses due to new clinical trials [Innovative Drugs](index=5&type=section&id=%E5%89%B5%E6%96%B0%E8%97%A5) Zhaoke Ophthalmology's innovative drug pipeline includes strategically important drugs for myopia, dry eye, wAMD, presbyopia, CED, and pediatric retinoblastoma, showing significant clinical and regulatory progress [Atropine Sulfate Ophthalmic Solution (NVK002) for Myopia Treatment](index=5&type=section&id=%E7%94%A8%E6%96%BC%E6%B2%BB%E7%99%82%E8%BF%91%E8%A6%96%E7%9A%84%E7%A1%AB%E9%85%B8%E9%98%BF%E6%89%98%E5%93%81%E6%BB%B4%E7%9C%BC%E6%B6%B2(NVK002)) NVK002, a patented, preservative-free atropine sulfate ophthalmic solution for myopia progression, completed two China Phase III trials, with 0.01% and 0.02% dosages now accepted for NMPA review - **NVK002** is a cutting-edge drug for controlling myopia progression in children and adolescents, featuring a patented, preservative-free formulation with an expected shelf life of over **24 months**[16](index=16&type=chunk) - The company has successfully completed **two Phase III clinical trials** for atropine sulfate ophthalmic solution in China (mini-CHAMP and China CHAMP)[16](index=16&type=chunk) - In January 2025, the NMPA officially accepted the simplified new drug application for **0.01% atropine sulfate ophthalmic solution**; in July 2025, the new drug application for the **0.02% dosage** was also accepted[18](index=18&type=chunk) - Zhaoke is currently the **only company in China** with two specifications of atropine sulfate ophthalmic solution under regulatory review[18](index=18&type=chunk) [Cyclosporine Ophthalmic Gel for Dry Eye Treatment](index=6&type=section&id=%E7%94%A8%E6%96%BC%E6%B2%BB%E7%99%82%E4%B9%BE%E7%9C%BC%E7%97%87%E7%9A%84%E7%92%B0%E5%A4%B1%E7%B4%A0%E7%9C%BC%E7%94%A8%E5%87%9D%E8%86%A0) Cyclosporine ophthalmic gel, a self-developed, once-daily hydrogel for moderate to severe dry eye, shows improved compliance and faster onset, with NMPA acceptance and FDA approval for US Phase III trials - **Cyclosporine ophthalmic gel**, self-developed by Zhaoke Ophthalmology, is administered **once daily**, aiming to significantly improve patient compliance and quality of life[19](index=19&type=chunk) - The patented hydrogel formulation has received patent protection in China and internationally, enhancing the pharmacokinetic efficacy of cyclosporine A on the ocular surface[19](index=19&type=chunk) - In the Phase III clinical trial (COSMO), the treatment demonstrated a **faster onset of action**, showing significant efficacy in approximately **two weeks**[19](index=19&type=chunk) - In May 2025, the new drug application for **cyclosporine ophthalmic gel** was accepted by the NMPA; in June 2025, the **FDA approved the initiation of Phase III clinical trials in the US**[22](index=22&type=chunk) [Bevacizumab Intravitreal Injection (TAB014) for wAMD Treatment](index=7&type=section&id=%E7%94%A8%E6%96%BC%E6%B2%BB%E7%99%82wAMD%E7%9A%84%E8%B2%9D%E4%BC%90%E5%96%AE%E6%8A%97%E7%8E%BB%E7%92%83%E9%AB%94%E8%85%94%E5%85%A7%E6%B3%A8%E5%B0%84%E6%B6%B2(TAB014)) TAB014, a bevacizumab intravitreal injection for wAMD, is China's first clinical-stage bevacizumab antibody, successfully completed Phase III trials, and its biologics license application is accepted by the NMPA - **TAB014** is China's **first clinical-stage bevacizumab-based antibody** for treating wAMD[20](index=20&type=chunk) - In January 2025, the company announced positive top-line results from this clinical trial, successfully meeting **all primary and key secondary endpoints**[21](index=21&type=chunk) - The Phase III clinical trial was a randomized, double-blind, non-inferiority study involving **488 patients** across approximately **60 centers**[23](index=23&type=chunk) - In June 2025, the NMPA accepted the biologics license application for **bevacizumab intravitreal injection**[24](index=24&type=chunk) [BRIMOCHOL™ PF and CARBACHOL™ PF for Presbyopia Treatment](index=8&type=section&id=%E7%94%A8%E6%96%BC%E6%B2%BB%E7%99%82%E8%80%81%E8%8A%B1%E7%9C%BC%E7%9A%84BRIMOCHOL%E2%84%A2%20PF%E5%8F%8ACARBACHOL%E2%84%A2%20PF) BRIMOCHOL™ PF and CARBACHOL™ PF are preservative-free, once-daily pupil-modulating drops for presbyopia, with BRIMOCHOL™ PF showing positive Phase III results and FDA acceptance, while China initiates Phase I/II trials - **BRIMOCHOL™ PF and CARBACHOL™ PF** are preservative-free, **once-daily pupil-modulating ophthalmic solutions** for correcting near vision loss due to presbyopia[24](index=24&type=chunk) - This therapy creates a pinhole effect through pupil constriction, sharpening intermediate and near vision[25](index=25&type=chunk) - In January 2025, licensing partner Tenpoint announced positive top-line results from BRIO-II (Phase III pivotal trial), showing **BRIMOCHOL™ PF** achieved statistically significant improvement in near vision for **over 8 hours**[25](index=25&type=chunk) - In June 2025, Tenpoint announced that the **US FDA accepted the new drug application for BRIMOCHOL™ PF** for presbyopia treatment[25](index=25&type=chunk) - The company has commenced patient enrollment for **Phase I and II clinical trials in China**, with Phase II completion expected by or before the **end of 2025**[25](index=25&type=chunk) [ZKY001 for Corneal Epithelial Defect Treatment](index=9&type=section&id=%E7%94%A8%E6%96%BC%E6%B2%BB%E7%99%82%E8%A7%92%E8%86%9C%E4%B8%8A%E7%9A%AE%E7%BC%BA%E6%90%8D%E7%9A%84ZKY001) ZKY001, a seven-amino acid peptide for corneal repair, completed multiple Phase II trials, now focusing on post-ophthalmic surgery corneal epithelial defects (TPRK) as its primary indication, with Phase III discussions ongoing with CDE - **ZKY001** is a **seven-amino acid peptide** derived from a functional fragment of thymosin beta 4, which binds to actin and promotes corneal wound healing[26](index=26&type=chunk)[28](index=28&type=chunk) - The company has conducted **Phase II clinical trials** and an investigator-initiated trial for ZKY001 across multiple potential indications, including CED, TPRK, pterygium, and NK[28](index=28&type=chunk) - The company has chosen to focus on **TPRK**, specifically treating corneal epithelial defects after ophthalmic surgery as ZKY001's first indication, and is discussing **Phase III clinical trial procedures** with the CDE[28](index=28&type=chunk) [Melphalan for Pediatric Retinoblastoma Treatment](index=9&type=section&id=%E7%94%A8%E6%96%BC%E6%B2%BB%E7%99%82%E5%85%92%E7%AB%A5%E8%A6%96%E7%B6%B2%E8%86%9C%E6%AF%8D%E7%B4%B0%E8%83%9E%E7%98%A4%E7%9A%84%E7%BE%8E%E6%B3%95%E4%BB%91) Melphalan, a patented alkylating antineoplastic drug for pediatric retinoblastoma (RB), received US FDA Orphan Drug Designation (ODD) in July 2025, establishing a clear IND pathway and potential for seven years of market exclusivity - **Melphalan** is an **alkylating antineoplastic drug** that exerts its anticancer effect by chemically modifying DNA strands within tumors, offering potential advantages for local administration in pediatric retinoblastoma (RB)[27](index=27&type=chunk) - In July 2025, the **US FDA granted Orphan Drug Designation (ODD)** to Zhaoke's patented melphalan formulation for treating pediatric RB[29](index=29&type=chunk) - Obtaining ODD establishes a clear regulatory pathway for submitting an Investigational New Drug (IND) application in the US, potentially granting the company **seven years of US market exclusivity** upon approval[29](index=29&type=chunk) - The company is preparing for pre-IND discussions with the FDA to maintain potential first-mover advantage[29](index=29&type=chunk) [PAN-90806 for wAMD and DME Treatment](index=10&type=section&id=%E7%94%A8%E6%96%BC%E6%B2%BB%E7%99%82wAMD%E5%8F%8ADME%E7%9A%84PAN-90806) PAN-90806, an innovative eye drop for wAMD and DME, aims to reduce injections, offering a less invasive option; the company has optimized its formulation and is preparing to submit an IND application to the NMPA - **PAN-90806** is an innovative drug for treating wAMD and DME, a novel eye drop formulation designed to **reduce the number of required injections**[30](index=30&type=chunk) - If approved as a maintenance therapy, this drug will offer patients significant convenience and a less invasive treatment option, reducing the frequency of intravitreal injections[30](index=30&type=chunk) - The company has optimized the formulation of **PAN-90806** and developed a comprehensive clinical study plan based on completed pharmaceutical and non-clinical studies[31](index=31&type=chunk) - Following successful pre-IND communication with the NMPA in June 2025, the company is now preparing to submit its **Investigational New Drug (IND) application**[31](index=31&type=chunk) [Generic Drugs](index=10&type=section&id=%E4%BB%BF%E8%A3%BD%E8%97%A5) Zhaoke Ophthalmology has a balanced generic drug pipeline, including six approved glaucoma generics and the TONO-i medical device, with epinastine ophthalmic solution for allergic conjunctivitis expected to receive approval soon - The company has **six market-approved generic glaucoma drugs**, forming a complete glaucoma product portfolio for effective intraocular pressure control[31](index=31&type=chunk)[32](index=32&type=chunk)[36](index=36&type=chunk) Approved Generic Glaucoma Drugs | Drug Name | Indication | Approval Date | | :--- | :--- | :--- | | Bimatoprost Timolol Ophthalmic Solution (Jingbeiying®) | Glaucoma/Ocular Hypertension | February 2023 | | Bimatoprost Ophthalmic Solution (Jingbeiqing®) | Open-angle glaucoma and ocular hypertension | September 2024 | | Latanoprost Ophthalmic Solution | Open-angle glaucoma and ocular hypertension | December 2024 | | Latanoprost Timolol Ophthalmic Solution | Refractory open-angle glaucoma | March 2025 | | Travoprost Ophthalmic Solution | Open-angle glaucoma and ocular hypertension | December 2024 | | Travoprost Timolol Ophthalmic Solution | Open-angle glaucoma or ocular hypertension | December 2024 | - In August 2025, the company obtained the NMPA medical device registration certificate for **TONO-i** (portable, non-contact tonometer), aiming to improve glaucoma diagnosis and treatment rates in China[33](index=33&type=chunk) - The company expects to obtain regulatory approval for **epinastine ophthalmic solution** for allergic conjunctivitis in the coming months[33](index=33&type=chunk) [R&D Warning](index=11&type=section&id=%E7%A0%94%E7%99%BC%E8%AD%A6%E5%91%8A) The company issued a warning under Listing Rule 18A.08(3) that it may not ultimately succeed in developing and commercializing its drug candidates - The company warns that it may not ultimately succeed in developing and commercializing its drug candidates[34](index=34&type=chunk) [R&D Team](index=11&type=section&id=%E7%A0%94%E7%99%BC%E5%9C%98%E9%9A%8A) Zhaoke Ophthalmology's R&D strength is driven by a team of approximately 70 experienced international ophthalmic experts with extensive global pharmaceutical and biotechnology expertise - As of the end of the reporting period, Zhaoke's R&D team comprised approximately **70 experienced international ophthalmic experts**[35](index=35&type=chunk) [R&D Expenses](index=12&type=section&id=%E7%A0%94%E7%99%BC%E9%96%8B%E6%94%AF) For H1 2025, R&D expenses increased by approximately RMB 23.3 million to RMB 113.1 million, primarily due to new clinical trials for BRIMOCHOL™ PF, CARBACHOL™ PF, and cyclosporine ophthalmic gel R&D Expenses Comparison | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | R&D Expenses | 113,050 | 89,797 | - R&D expenses increased by approximately **RMB 23.3 million**, primarily due to the initiation of Phase I and II clinical trials for **BRIMOCHOL™ PF and CARBACHOL™ PF**, and a new round of Phase III clinical trials for **cyclosporine ophthalmic gel**[37](index=37&type=chunk) [Commercialization](index=12&type=section&id=%E5%95%86%E6%A5%AD%E5%8C%96) Since 2024, Zhaoke Ophthalmology transformed into an R&D and commercial enterprise with eight approved ophthalmic drugs, expanding its omnichannel distribution network to over 1,200 public hospitals and digital platforms, preparing for future core product launches - Since **2024**, Zhaoke has transformed into an **R&D and commercial enterprise**[38](index=38&type=chunk) - Currently, **eight ophthalmic drugs** are approved for commercialization, including six glaucoma drugs, the corneal ulcer therapy Rebot, and China's first preservative-free azelastine ophthalmic solution (Shunmin®)[38](index=38&type=chunk) - Through an omnichannel sales and marketing strategy, the company's distribution network covers **over 1,200 public hospitals** across **30 provinces in China**, strengthening collaborations with private hospitals and optometry centers[39](index=39&type=chunk) - The company expanded its digital footprint by opening flagship stores on JD Health and Tmall, and operates the WeChat platform 'Zhaoke Boshu', with **15,600 followers**[40](index=40&type=chunk) - The company is undertaking commercialization preparations for the launch of key products next year, including **atropine sulfate ophthalmic solution, cyclosporine ophthalmic gel, and bevacizumab intravitreal injection**[41](index=41&type=chunk) [Partnerships and Globalization Efforts](index=13&type=section&id=%E5%A4%A5%E4%BC%B4%E9%97%9C%E4%BF%82%E5%8F%8A%E5%85%A8%E7%90%83%E5%8C%96%E5%B7%A5%E4%BD%9C) Zhaoke Ophthalmology actively expands its global footprint through strategic partnerships, commercializing products in Australia, New Zealand, Thailand, the Middle East, and Indonesia, while achieving US market milestones and strengthening China operations - The company partnered with AFT Pharmaceuticals Limited to commercialize **BRIMOCHOL™ PF** in Australia and New Zealand (January 2025)[42](index=42&type=chunk) - The company collaborated with Interpharma Public Company Limited to sell **atropine sulfate ophthalmic solution, BRIMOCHOL™ PF, and six glaucoma drugs** in Thailand (April 2025)[42](index=42&type=chunk) - The company partnered with Lunatus Marketing & Consulting FZCO to commercialize **BRIMOCHOL™ PF** in GCC member states (late April 2025)[42](index=42&type=chunk) - The company established a partnership with Jamjoom Pharmaceuticals Factory Company to sell **cyclosporine ophthalmic gel** in the Middle East and Africa (June 2025)[42](index=42&type=chunk) - The company partnered with France's FAREVA Group, with Zhaoke designated as a reliable partner for manufacturing their drugs in China (July 2025)[42](index=42&type=chunk) - The company collaborated with PT Ferron Par Pharmaceuticals to handle the commercialization of **atropine sulfate ophthalmic solution** in Indonesia (August 2025)[43](index=43&type=chunk) - In June 2025, the IND application for **cyclosporine ophthalmic gel** received **FDA approval**, permitting the initiation of Phase III trials in the US[43](index=43&type=chunk) - In July 2025, **melphalan** for pediatric RB treatment received **ODD**, with potential for **seven years of US market exclusivity**[44](index=44&type=chunk) - In February 2025, Zhaoke and Visionary Pharma jointly launched China's **first preservative-free, single-dose azelastine hydrochloride ophthalmic solution (Shunmin®)**[44](index=44&type=chunk) [Manufacturing](index=14&type=section&id=%E8%A3%BD%E9%80%A0) Zhaoke Ophthalmology's state-of-the-art Nansha facility, compliant with NMPA, FDA, and EMA, validates its global manufacturing capabilities through partnerships, operating four production lines for approved products and preparing for atropine sulfate ophthalmic solution commercial manufacturing - Zhaoke Ophthalmology operates a state-of-the-art, self-owned manufacturing facility in Guangdong Province, China, with full in-house capabilities compliant with stringent regulations from major global regulatory bodies, including the **NMPA, FDA, and EMA**[46](index=46&type=chunk) - Partnerships with US-based **Somerset Therapeutics LLC** and France's **FAREVA Group** demonstrate the company's ophthalmic drug manufacturing capabilities are recognized by major global manufacturers[46](index=46&type=chunk) - The company currently operates **four production lines** for efficient large-scale manufacturing, having produced multiple approved products, including **six glaucoma ophthalmic solutions**[47](index=47&type=chunk) - The company has successfully transferred the production of **atropine sulfate ophthalmic solution** to its Nansha, Guangzhou facility and is fully preparing for commercial manufacturing[47](index=47&type=chunk) [Environmental, Social and Governance (ESG) Updates](index=15&type=section&id=%E7%92%B0%E5%A2%83%E3%80%81%E7%A4%BE%E6%9C%83%E5%8F%8A%E7%AE%A1%E6%B2%BB(ESG)%E6%9C%80%E6%96%B0%E6%B6%88%E6%81%AF) Zhaoke Ophthalmology promotes sustainable healthcare by assessing impacts, implementing sustainable strategies, fulfilling social responsibilities through health seminars, fostering employee development, and annually publishing ESG reports, with its fifth report released in April 2025 - Zhaoke Ophthalmology is committed to promoting sustainable healthcare industry development and continuously assessing its operational impact on the environment and society[48](index=48&type=chunk) - The company organized multiple in-person and online health seminars covering topics such as glaucoma and corneal diseases to raise public awareness and encourage early intervention[48](index=48&type=chunk) - The company is dedicated to creating an environment where employees can thrive, implementing tiered mentorship and job rotation programs[49](index=49&type=chunk) - Adhering to the highest standards of transparency and compliance, the company released its **fifth ESG report** in **April 2025**[49](index=49&type=chunk) [Future and Outlook](index=15&type=section&id=%E6%9C%AA%E4%BE%86%E5%8F%8A%E5%89%8D%E6%99%AF) Zhaoke Ophthalmology achieved significant H1 2025 R&D and market expansion milestones, with three core assets in NDA phase; H2 focus is on market approvals and pipeline advancement, with optimism for 2026, targeting 12 commercialized drugs to strengthen revenue and global brand - In H1 2025, **three core assets** (**0.01% and 0.02% atropine sulfate ophthalmic solution, cyclosporine ophthalmic gel, and bevacizumab intravitreal injection**) all entered the new drug application phase[50](index=50&type=chunk) - The company has expanded into several new markets, including Australia, New Zealand, the Middle East, and Indonesia, while deepening its presence in existing markets like Thailand[51](index=51&type=chunk) - The primary R&D focus for H2 2025 is maintaining effective communication with regulatory bodies, aiming for prompt market approval of **atropine sulfate ophthalmic solution, cyclosporine ophthalmic gel, and bevacizumab intravitreal injection**[51](index=51&type=chunk) - The company will focus on completing **BRIMOCHOL™ PF Phase I and II clinical trials** and continue advancing the development of **ZKY001**[51](index=51&type=chunk) - Regulatory approval is expected for **epinastine hydrochloride ophthalmic solution** (a generic drug for allergic conjunctivitis), which is in the final stages of simplified new drug application review[52](index=52&type=chunk) - Several assets in the early-stage innovative pipeline are expected to progress, including submitting an **IND application for PAN90806 to the NMPA** and conducting **IND discussions for melphalan with the US FDA**[52](index=52&type=chunk) - Looking ahead to **2026**, the company expects **three core drugs** to receive market approval and aims to have **12 commercialized drugs** by year-end, significantly strengthening its revenue base and enhancing its global brand image[53](index=53&type=chunk) [Financial Performance Analysis](index=17&type=section&id=%E8%B2%A1%E5%8B%99%E8%A1%A8%E7%8F%BE%E5%88%86%E6%9E%90) This section analyzes Zhaoke Ophthalmology's financial performance, covering consolidated income statement, liquidity, key financial ratios, employee and remuneration details, and foreign currency risk management [Consolidated Income Statement Analysis](index=17&type=section&id=%E7%B6%9C%E5%90%88%E6%90%8D%E7%9B%8A%E8%A1%A8%E5%88%86%E6%9E%90) For H1 2025, Zhaoke Ophthalmology's loss expanded to RMB 116.6 million, primarily due to the absence of one-time licensing income and increased R&D expenses, despite reduced administrative costs Consolidated Income Statement Key Data Comparison (RMB thousands) | Metric | 2025 | 2024 | Change | | :--- | :--- | :--- | :--- | | Revenue | 15,803 | 49,769 | (33,966) | | Other Income | 26,268 | 44,514 | (18,246) | | Net Other Gains/(Losses) | 20,012 | (8,843) | +28,855 | | R&D Expenses | (113,050) | (89,797) | (23,253) | | General and Administrative Expenses | (30,559) | (31,303) | +744 | | Selling and Distribution Expenses | (23,421) | (28,399) | +4,978 | | Finance Costs | (4,340) | (4,814) | +474 | | Loss for the Period | (116,623) | (75,802) | (40,821) | | Non-HKFRS Adjusted Loss for the Period | (115,274) | (75,689) | (39,585) | - The decrease in revenue was primarily due to the company's change in sales strategy, focusing more on expanding its distribution network and reorganizing its sales team, leading to a short-term and phased decline in overall sales[57](index=57&type=chunk) - The decrease in other income was mainly due to the absence of a one-time government subsidy of **RMB 5.1 million** received in the prior period, and reduced bank interest income due to lower global bank interest rates in 2025[61](index=61&type=chunk) - Net other gains primarily include net exchange gains arising from the translation of assets and liabilities denominated in Euro, US Dollar, or Hong Kong Dollar[62](index=62&type=chunk) - The increase in R&D expenses was primarily due to the initiation of Phase I and II clinical trials for **BRIMOCHOL™ PF and CARBACHOL™ PF**, and a new round of Phase III clinical trials for **cyclosporine ophthalmic gel**[63](index=63&type=chunk) - Non-HKFRS adjusted loss for the period is defined as the loss for the period adjusted by adding back equity-settled share-based payment expenses[70](index=70&type=chunk)[71](index=71&type=chunk) [Liquidity and Sources of Funding](index=23&type=section&id=%E6%B5%81%E5%8B%95%E8%B3%87%E9%87%91%E5%8F%8A%E8%B3%87%E9%87%91%E4%BE%86%E6%BA%90) Zhaoke Ophthalmology's cash funds R&D and operations, with RMB 1.475 billion in current assets as of June 30, 2025, including RMB 1.0513 billion in cash and equivalents, managed under a prudent fiscal policy - The company's cash is primarily used for clinical trials, production, equipment and raw material procurement, and other expenses, with working capital needs mainly met by net proceeds from the global offering[75](index=75&type=chunk) - As of June 30, 2025, the Group's current assets were approximately **RMB 1.475 billion**, including cash and cash equivalents of approximately **RMB 1.0513 billion**, time deposits with original maturity over three months of approximately **RMB 3 million**, and pledged bank deposits of approximately **RMB 343.9 million**[76](index=76&type=chunk) - As of June 30, 2025, the Group's current liabilities were approximately **RMB 335.1 million**[76](index=76&type=chunk) - The company adopts a prudent fiscal policy for cash and financial management, with most cash denominated in US Dollar, Hong Kong Dollar, and Renminbi[77](index=77&type=chunk) - As of June 30, 2025, pledged bank balances were approximately **RMB 343.9 million**, used for bank financing facilities[78](index=78&type=chunk) [Key Financial Ratios and Commitments](index=24&type=section&id=%E4%B8%BB%E8%A6%81%E8%B2%A1%E5%8B%99%E6%AF%94%E7%8E%87%E5%8F%8A%E6%89%BF%E6%93%94) As of June 30, 2025, Zhaoke Ophthalmology's current ratio was 4.4 (down from 5.2), remaining in a net cash position with no significant contingent liabilities, and capital commitments decreased to RMB 89.4 million Key Financial Ratios | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Current Ratio | 4.4 | 5.2 | | Debt-to-Equity Ratio | Not applicable | Not applicable | - As of June 30, 2025, the company had **no significant contingent liabilities**[79](index=79&type=chunk) - As of June 30, 2025, the company's capital commitments were approximately **RMB 89.4 million**, a decrease of approximately **RMB 6 million** from December 31, 2024, primarily due to progress in production facility engineering and R&D activities[80](index=80&type=chunk) - The company is in a **net cash position**, thus the debt-to-equity ratio is not applicable[81](index=81&type=chunk) [Employees and Remuneration](index=25&type=section&id=%E5%83%B1%E5%93%A1%E5%8F%8A%E8%96%AA%E9%85%AC) As of June 30, 2025, Zhaoke Ophthalmology had 270 employees, with R&D, production, and sales & marketing as major functions; total staff costs decreased to RMB 56.1 million due to reduced headcount, partially offset by increased share-based payment expenses - As of June 30, 2025, the Group had a total of **270 employees**[82](index=82&type=chunk) Employee Functional Distribution (June 30, 2025) | Function | Number of Employees | Percentage of Total (%) | | :--- | :--- | :--- | | Management | 5 | 1.9 | | R&D | 72 | 26.6 | | Production | 59 | 21.9 | | Quality Control | 37 | 13.7 | | Sales & Marketing | 57 | 21.1 | | Environment, Health & Safety | 1 | 0.4 | | Administration | 39 | 14.4 | | **Total** | **270** | **100.0** | - For the six months ended June 30, 2025, the Group's total staff costs were approximately **RMB 56.1 million**, a decrease from **RMB 62.6 million** in the same period of 2024[83](index=83&type=chunk) - The decrease in total staff costs primarily resulted from a reduction in employee headcount, leading to a decrease of approximately **RMB 7.8 million** in employee salaries and benefits, partially offset by an increase of approximately **RMB 1.3 million** in equity-settled share-based payment expenses[83](index=83&type=chunk) [Foreign Currency Risk](index=26&type=section&id=%E5%A4%96%E5%B9%A3%E9%A2%A8%E9%9A%AA) Zhaoke Ophthalmology primarily operates in mainland China with RMB-settled transactions, but most cash is USD-denominated; foreign exchange risk is managed by regularly reviewing net exposure without long-term hedging contracts - The Group primarily operates in mainland China, with most of its transactions settled in **RMB**, which is the functional currency of the company's principal subsidiaries[84](index=84&type=chunk) - As of June 30, 2025, the majority of the Group's cash and cash equivalents were denominated in **US Dollar**[84](index=84&type=chunk) - The Group manages foreign exchange risk by regularly reviewing its net foreign exchange exposure and currently does not use any long-term contracts, currency borrowings, or other means to hedge foreign currency risk[84](index=84&type=chunk) [Consolidated Financial Statements](index=27&type=section&id=%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8) This section presents Zhaoke Ophthalmology's unaudited consolidated financial statements, including the income statement, statement of comprehensive income, and statement of financial position [Consolidated Income Statement](index=27&type=section&id=%E7%B6%9C%E5%90%88%E6%90%8D%E7%9B%8A%E8%A1%A8) This section presents Zhaoke Ophthalmology's unaudited consolidated income statement for the six months ended June 30, 2025, detailing revenue, cost of sales, gross profit, expenses, and loss for the period - Detailed unaudited consolidated income statement data for the six months ended June 30, 2025[85](index=85&type=chunk) [Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=28&type=section&id=%E7%B6%9C%E5%90%88%E6%90%8D%E7%9B%8A%E5%8F%8A%E5%85%B6%E4%BB%96%E5%85%A8%E9%9D%A2%E6%94%B6%E7%9B%8A%E8%A1%A8) This section presents Zhaoke Ophthalmology's unaudited consolidated statement of profit or loss and other comprehensive income for the six months ended June 30, 2025, including loss for the period and exchange differences for non-RMB functional currency entities - Detailed unaudited consolidated statement of profit or loss and other comprehensive income data for the six months ended June 30, 2025, including loss for the period and exchange differences[87](index=87&type=chunk) [Consolidated Statement of Financial Position](index=29&type=section&id=%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81%E8%A1%A8) This section presents Zhaoke Ophthalmology's unaudited consolidated statement of financial position as of June 30, 2025, detailing non-current assets, current assets, current liabilities, non-current liabilities, and total equity - Detailed unaudited consolidated statement of financial position data as of June 30, 2025, including assets, liabilities, and equity[89](index=89&type=chunk)[90](index=90&type=chunk) [Notes to the Interim Results Announcement](index=31&type=section&id=%E4%B8%AD%E6%9C%9F%E6%A5%AD%E7%B8%BE%E5%85%AC%E5%91%8A%E9%99%84%E8%A8%BB) This section provides detailed notes to the interim financial statements, covering the basis of preparation, revenue and segment reporting, loss before tax, earnings per share, and analyses of trade and other receivables and payables [Basis of Preparation and Changes in Accounting Policies](index=31&type=section&id=%E7%B7%A8%E8%A3%BD%E5%9F%BA%E6%BA%96%E5%8F%8A%E6%9C%83%E8%A8%88%E6%94%BF%E7%AD%96%E8%AE%8A%E5%8B%95) This section details the interim financial report's preparation basis, adhering to HKEX Listing Rules and HKAS 34, reviewed by KPMG and the audit committee, with no significant impact from new accounting standards - The interim financial report has been prepared in accordance with the applicable disclosure provisions of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited and **Hong Kong Accounting Standard 34 'Interim Financial Reporting'** issued by the Hong Kong Institute of Certified Public Accountants[91](index=91&type=chunk) - The interim financial report is unaudited but has been **reviewed by KPMG** and the company's **audit committee**[92](index=92&type=chunk) - The Group has applied **HKAS 21 (Revised) 'The Effects of Changes in Foreign Exchange Rates – Lack of Exchangeability'** issued by the HKICPA to the interim financial report for this accounting period, with no significant impact[93](index=93&type=chunk) [Revenue and Segment Reporting](index=31&type=section&id=%E6%94%B6%E7%9B%8A%E5%8F%8A%E5%88%86%E9%83%A8%E5%A0%B1%E5%91%8A) This section details Zhaoke Ophthalmology's revenue breakdown by product and service, highlights its diversified customer base and single operating segment, and provides geographical revenue and non-current asset information - The Group's principal activities are the development, manufacturing, and marketing of ophthalmic drugs and products[96](index=96&type=chunk) Revenue Disaggregation by Customer Contracts (RMB thousands) | Revenue Type | 2025 | 2024 | | :--- | :--- | :--- | | Sales of ophthalmic drugs | 11,725 | 13,572 | | Sales of other drugs | 2,622 | – | | Sales of ophthalmic products | 757 | 2,076 | | Licensing income | – | 33,523 | | Exclusive distribution rights income | 676 | 598 | | CMO service income | 23 | – | | **Total** | **15,803** | **49,769** | - As of June 30, 2025, the total transaction price allocated to the Group's remaining performance obligations under existing contracts was **RMB 15.107 million**, representing revenue expected to be recognized in the future from distribution and supply contracts with customers[99](index=99&type=chunk) - The Group has **only one operating segment**, and therefore no segment information is presented[100](index=100&type=chunk) Geographical Revenue and Specific Non-Current Assets (RMB thousands) | Region | 2025 Revenue | 2024 Revenue | June 30, 2025 Specific Non-Current Assets | December 31, 2024 Specific Non-Current Assets | | :--- | :--- | :--- | :--- | :--- | | Hong Kong | 350 | 457 | 296,964 | 313,363 | | Mainland China | 14,708 | 48,714 | 273,819 | 292,327 | | South Korea | 601 | 598 | – | – | | Others | 144 | – | – | – | | **Total** | **15,803** | **49,769** | **570,783** | **605,690** | [Loss Before Tax and Income Tax](index=33&type=section&id=%E9%99%A4%E7%A8%85%E5%89%8D%E8%99%A7%E6%90%8D%E5%8F%8A%E6%89%80%E5%BE%97%E7%A8%85) This section details the composition of loss before tax, including finance costs, amortization, depreciation, and investment fair value changes, and clarifies income tax policies, noting no provision was made due to entities incurring losses Finance Costs (RMB thousands) | Type of Finance Costs | 2025 | 2024 | | :--- | :--- | :--- | | Interest on bank loans | 3,752 | 4,061 | | Interest on lease liabilities | 588 | 753 | | **Total** | **4,340** | **4,814** | Components of Loss Before Tax (RMB thousands) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Amortization of intangible assets | 7,063 | 6,411 | | Depreciation expenses – owned property, plant and equipment | 16,286 | 16,025 | | Depreciation expenses – right-of-use assets | 4,088 | 4,056 | | Gain on disposal of property, plant and equipment | – | (559) | | Fair value changes of investments recognized in profit or loss – realized | (2,352) | – | | Fair value changes of investments recognized in profit or loss – unrealized | – | (159) | - There is **no income tax in the Cayman Islands**. Hong Kong and mainland China entities incurred tax losses, thus no provision for Hong Kong profits tax and mainland China enterprise income tax was made[106](index=106&type=chunk)[107](index=107&type=chunk) [Loss Per Share and Dividends](index=34&type=section&id=%E6%AF%8F%E8%82%A1%E8%99%A7%E6%90%8D%E5%8F%8A%E8%82%A1%E6%81%AF) This section calculates Zhaoke Ophthalmology's basic and diluted loss per share for H1 2025, both at RMB (0.21), with no dividends paid or declared during the period Loss Per Share (RMB) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Basic loss per share | (0.21) | (0.14) | | Diluted loss per share | (0.21) | (0.14) | - For the six months ended June 30, 2025 and 2024, the company **neither paid nor declared any dividends**[110](index=110&type=chunk) [Trade and Other Receivables](index=35&type=section&id=%E8%B2%BF%E6%98%93%E5%8F%8A%E5%85%B6%E4%BB%96%E6%87%89%E6%94%B6%E6%AC%BE%E9%A0%85) This section provides an aging analysis of trade and other receivables as of June 30, 2025, with trade receivables (net of loss allowance) at RMB 4.288 million and recoverable VAT at RMB 8.544 million, with most expected to be recovered within one year Aging Analysis of Trade and Other Receivables (RMB thousands) | Aging | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Within 1 month | 3,751 | 857 | | 1 to 2 months | 100 | – | | 2 to 3 months | – | 78 | | Over 3 months but within 6 months | 220 | 67 | | Over 6 months | 217 | 377 | | **Trade receivables (net of loss allowance)** | **4,288** | **1,379** | | Recoverable VAT | 8,544 | 7,345 | | Prepayments to suppliers | 53,299 | 52,770 | | Other receivables | 18,648 | 12,887 | | **Total** | **84,779** | **74,381** | - Trade receivables are due within **30 to 90 days** from the invoice date[111](index=111&type=chunk) - Except for the disclosed non-current portion, all other trade and other receivables are expected to be recovered or recognized as expenses within **one year**[112](index=112&type=chunk) [Trade and Other Payables](index=36&type=section&id=%E8%B2%BF%E6%98%93%E5%8F%8A%E5%85%B6%E4%BB%96%E6%87%89%E4%BB%98%E6%AC%BE%E9%A0%85) This section presents an aging analysis of trade and other payables as of June 30, 2025, with trade payables at RMB 0.83 million and accrued R&D expenses at RMB 43.321 million, all expected to be settled within one year Aging Analysis of Trade and Other Payables (RMB thousands) | Aging | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Within 1 month | 120 | 720 | | 1 to 3 months | – | 15 | | Over 3 months but within 6 months | 710 | 138 | | Over 6 months | – | 296 | | **Trade payables** | **830** | **1,169** | | Payables for purchase of property, plant and equipment | 2,728 | 4,634 | | Accrued salaries | 10,952 | 18,250 | | Accrued R&D expenses | 43,321 | 49,485 | | Payables for purchase of materials | 816 | 1,612 | | Accrued office expenses and others | 7,163 | 8,480 | | Other tax payables | 965 | 1,058 | | **Total trade and other payables** | **66,775** | **84,688** | - All trade and other payables are expected to be settled within **one year** or repaid on demand[113](index=113&type=chunk) [Other Information](index=37&type=section&id=%E5%85%B6%E4%BB%96%E8%B3%87%E6%96%99) This section covers post-reporting events, corporate governance, use of global offering proceeds, securities transactions, litigation, and the audit committee's review of the interim report [Events After Reporting Period and Interim Dividends](index=37&type=section&id=%E5%A0%B1%E5%91%8A%E6%9C%9F%E5%BE%8C%E4%BA%8B%E9%A0%85%E5%8F%8A%E4%B8%AD%E6%9C%9F%E8%82%A1%E6%81%AF) No other significant events affecting the Group occurred after the reporting period, and the Board does not recommend an interim dividend for the six months ended June 30, 2025 - No other significant events affecting the Group occurred after the end of the reporting period and up to the date of this announcement[114](index=114&type=chunk) - The Board does not recommend the payment of an **interim dividend** for the six months ended June 30, 2025[115](index=115&type=chunk) [Corporate Governance](index=37&type=section&id=%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB) Zhaoke Ophthalmology maintains high corporate governance standards, with Dr. Li Xiaoyi serving as Chairman and CEO for leadership consistency, and confirmed compliance with Listing Rule Appendix C1's Corporate Governance Code - The roles of Chairman and Chief Executive Officer are concurrently held by **Dr. Li Xiaoyi**, an arrangement the Board believes ensures consistent leadership and effective executive functions for the Group[116](index=116&type=chunk) - The Board has approved amendments to the terms of reference for the Nomination Committee and appointed Mr. Wong Hin Wing, Professor Lo Yuk Lam, and Ms. Li Yenie as members[117](index=117&type=chunk) - The company has complied with all applicable code provisions of the **Corporate Governance Code** set out in **Appendix C1 of the Listing Rules** during the reporting period and up to the date of this announcement[118](index=118&type=chunk) [Use of Proceeds from Global Offering](index=39&type=section&id=%E5%85%A8%E7%90%83%E7%99%BC%E5%94%AE%E6%89%80%E5%BE%97%E6%AC%BE%E9%A0%85%E7%94%A8%E9%80%94) Zhaoke Ophthalmology's global offering yielded HKD 1.9323 billion net proceeds; HKD 1.4952 billion utilized by June 30, 2025, with HKD 437.12 million unutilized and held as short-term deposits, and core product development utilization expected to be slightly delayed - The net proceeds from the global offering were approximately **HKD 1.9323 billion**[120](index=120&type=chunk) Use of Proceeds from Global Offering (HKD millions) | Use of Listing Proceeds | Planned Use | Percentage of Total Net Proceeds (%) | Utilized as of December 31, 2024 | Utilized during the reporting period | Unutilized as of June 30, 2025 | | :--- | :--- | :--- | :--- | :--- | :--- | | Clinical development and commercialization of two core products | 618.34 | 32.00 | 300.94 | 32.11 | 285.29 | | Ongoing R&D activities and commercialization of other pipeline drug candidates | 888.86 | 46.00 | 681.01 | 56.02 | 151.83 | | Expansion of Nansha advanced manufacturing facility production lines | 135.27 | 7.00 | 135.27 | – | – | | Business development activities and expansion of drug pipeline | 96.62 | 5.00 | 96.62 | – | – | | Working capital and other general corporate purposes | 193.23 | 10.00 | 193.23 | – | – | | **Total** | **1,932.32** | **100.00** | **1,407.07** | **88.13** | **437.12** | - As of June 30, 2025, all unutilized net proceeds were placed by the company as **short-term deposits** with licensed banks or authorized financial institutions in Hong Kong and China[121](index=121&type=chunk) - The company anticipates that the utilization of net proceeds allocated for the clinical development and commercialization of **two core products** will be slightly later than originally expected[121](index=121&type=chunk) [Securities Transactions and Litigation](index=40&type=section&id=%E8%AD%89%E5%88%B8%E4%BA%A4%E6%98%93%E5%8F%8A%E8%A8%B4%E8%A8%9F) All Zhaoke Ophthalmology directors confirmed compliance with Listing Rule Appendix C3's Model Code for Securities Transactions; no listed securities were purchased, sold, or redeemed, and no significant litigation or arbitration occurred during the reporting period - Following specific inquiries by the company to all directors, they have all confirmed compliance with the **Model Code** during the reporting period and up to the date of this announcement[119](index=119&type=chunk) - During the reporting period and up to the date of this announcement, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities[122](index=122&type=chunk) - The company was not involved in any **significant litigation or arbitration** for the six months ended June 30, 2025[123](index=123&type=chunk) [Audit Committee Review and Report Publication](index=40&type=section&id=%E5%AF%A9%E6%A0%B8%E5%A7%94%E5%93%A1%E6%9C%83%E5%AF%A9%E9%96%B1%E5%8F%8A%E5%A0%B1%E5%91%8A%E5%88%8A%E8%BC%89) Zhaoke Ophthalmology's Audit Committee reviewed accounting principles, audit, internal control, and financial reporting, including the unaudited interim financial report for H1 2025, with the announcement and report published on HKEX and company websites - The Audit Committee reviewed the Group's adopted accounting principles and practices, and discussed audit, internal control, and financial reporting matters, including the review of the Group's **unaudited interim financial report** for the six months ended June 30, 2025[124](index=124&type=chunk) - This announcement is published on the **HKEX website (www.hkexnews.hk)** and the **company's website (zkoph.com)**[125](index=125&type=chunk) [Definitions](index=41&type=section&id=%E9%87%8B%E7%BE%A9) This section provides definitions for key terms and abbreviations used in this interim results announcement to ensure accurate understanding of the report content - This section contains detailed definitions of key terms and abbreviations used in this announcement, such as 'Simplified New Drug Application', 'Biologics License Application', 'CED', 'ODD', etc[127](index=127&type=chunk)[128](index=128&type=chunk)[129](index=129&type=chunk)[130](index=130&type=chunk)[131](index=131&type=chunk)[132](index=132&type=chunk)[133](index=133&type=chunk)

[Company Information](index=1&type=section&id=Company%20Information) This section provides general information about the company and its reporting period [Company Overview](index=1&type=section&id=Company%20Overview) This announcement details Powerwin Tech Group Limited's unaudited interim results for H1 2025 - Company Name: Powerwin Tech Group Limited (Stock Code: 2405)[2](index=2&type=chunk) - Reporting Period: Unaudited consolidated interim results for the six months ended June 30, 2025[3](index=3&type=chunk) [Financial Statements](index=2&type=section&id=Financial%20Statements) This section presents the company's consolidated financial statements, including profit or loss and financial position [Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=2&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For H1 2025, the company experienced a significant revenue decline, leading to a substantial deterioration in gross profit and operating results, turning a profit into a loss Key Financial Data (Income Statement) | Metric | For the six months ended June 30, 2025 (US$ thousand) | For the six months ended June 30, 2024 (US$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 3,250 | 7,368 | -55.9% | | Cost of Sales | (992) | (1,139) | -12.9% | | Gross Profit | 2,258 | 6,229 | -63.8% | | Selling and Marketing Expenses | (231) | (296) | -22.0% | | Administrative Expenses | (2,193) | (1,763) | +24.4% | | Expected Credit Losses on Trade Receivables | (2,409) | (1,576) | +52.9% | | Other Income | 193 | 328 | -41.1% | | Operating (Loss)/Profit | (2,382) | 2,922 | 由盈转亏 | | Finance Costs | (1,871) | (2,680) | -30.2% | | Fair Value Changes of Financial Assets | 104 | 55 | +89.1% | | (Loss)/Profit Before Tax | (4,149) | 297 | 由盈转亏 | | Income Tax | 391 | 41 | +853.7% | | (Loss)/Profit for the Period | (3,758) | 338 | 由盈转亏 | | Basic (Loss)/Earnings Per Share (US cents) | (0.47) | 0.04 | 由盈转亏 | [Consolidated Statement of Financial Position](index=3&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, total assets and liabilities decreased, primarily due to reductions in receivables and bank borrowings, impacting net current assets and net assets Key Financial Data (Balance Sheet) | Metric | June 30, 2025 (US$ thousand) | December 31, 2024 (US$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | **Non-current Assets** | | | | | Property, Plant and Equipment | 59 | 67 | -11.9% | | Right-of-Use Assets | 798 | 360 | +121.7% | | Intangible Assets | 1,827 | 2,036 | -10.3% | | Financial Assets at Fair Value Through Profit or Loss | 4,689 | 4,627 | +1.3% | | Deferred Tax Assets | 1,497 | 1,087 | +37.7% | | **Total Non-current Assets** | **8,870** | **8,177** | **+8.5%** | | **Current Assets** | | | | | Trade and Other Receivables | 183,407 | 222,373 | -17.5% | | Cash and Cash Equivalents | 16,276 | 34,393 | -52.7% | | Prepaid Income Tax | 1,221 | 1,221 | 0.0% | | **Total Current Assets** | **200,904** | **257,987** | **-22.2%** | | **Current Liabilities** | | | | | Trade and Other Payables | 164,252 | 129,032 | +27.3% | | Contract Liabilities | 3,411 | 4,071 | -16.2% | | Bank Borrowings | 13,126 | 100,638 | -86.9% | | Lease Liabilities | 478 | 326 | +46.6% | | Current Tax | 14 | 13 | +7.7% | | **Total Current Liabilities** | **181,281** | **234,080** | **-22.6%** | | **Net Current Assets** | **19,623** | **23,907** | **-17.9%** | | **Total Assets Less Current Liabilities** | **28,493** | **32,084** | **-11.3%** | | **Non-current Liabilities** | | | | | Bank Borrowings | 1,808 | 1,920 | -5.8% | | Lease Liabilities | 349 | 69 | +405.8% | | **Total Non-current Liabilities** | **2,157** | **1,989** | **+8.4%** | | **Net Assets** | **26,336** | **30,095** | **-12.5%** | | **Total Equity** | **26,336** | **30,095** | **-12.5%** | [Notes to the Financial Statements](index=5&type=section&id=Notes%20to%20the%20Financial%20Statements) This section provides detailed notes and explanations for the figures presented in the consolidated financial statements [1 Basis of Preparation](index=5&type=section&id=1%20Basis%20of%20Preparation) The condensed interim consolidated financial statements are prepared in accordance with HKAS 34 and the Listing Rules, authorized for issue on August 28, 2025 - Basis of Preparation: HKEX Listing Rules and Hong Kong Accounting Standard 34 'Interim Financial Reporting'[7](index=7&type=chunk) - Authorization Date: August 28, 2025[7](index=7&type=chunk) - Accounting Policies: Same as those adopted in the 2024 annual financial statements, except for changes expected to be reflected in the 2025 annual financial statements[7](index=7&type=chunk) [2 Changes in Accounting Policies](index=5&type=section&id=2%20Changes%20in%20Accounting%20Policies) The Group applied HKAS 21 (Amendment) 'The Effects of Changes in Foreign Exchange Rates – Lack of Exchangeability' with no material impact due to the absence of relevant foreign currency transactions - New Standard Applied: Hong Kong Accounting Standard 21 (Amendment) 'The Effects of Changes in Foreign Exchange Rates – Lack of Exchangeability'[8](index=8&type=chunk) - Impact: No material impact on these interim financial statements, as the Group had no foreign currency non-exchangeable transactions[8](index=8&type=chunk) - Standards Not Applied: No new standards or interpretations effective for the current accounting period have been applied[9](index=9&type=chunk) [3 Revenue and Segment Information](index=6&type=section&id=3%20Revenue%20and%20Segment%20Information) The Group's core businesses are cross-border digital marketing and e-commerce SaaS solutions, with total revenue significantly decreasing by 55.9% year-on-year for H1 2025 - Principal Business: Provision of cross-border digital marketing services and cross-border e-commerce SaaS solutions[10](index=10&type=chunk) Customer Contract Revenue by Major Service | Service Type | For the six months ended June 30, 2025 (US$ thousand) | For the six months ended June 30, 2024 (US$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Cross-border Digital Marketing Services | 2,951 | 5,995 | -50.8% | | - Standardized Digital Marketing | 1,491 | 3,221 | -53.7% | | - Customized Digital Marketing | 549 | 1,549 | -64.6% | | - SaaS-based Digital Marketing | 911 | 1,225 | -25.6% | | Cross-border E-commerce SaaS Solutions | 299 | 1,373 | -78.2% | | **Total Revenue** | **3,250** | **7,368** | **-55.9%** | Major Customer Revenue Concentration | Client | For the six months ended June 30, 2025 (US$ thousand) | For the six months ended June 30, 2024 (US$ thousand) | | :--- | :--- | :--- | | Client 1 | 1,234 | 2,935 | | Client 2 | 680 | 2,363 | | Client 3 | Not applicable* | 1,024 | *This indicates revenue from this client accounted for less than 10% of the Group's revenue during the period Geographical Revenue Distribution | Region | For the six months ended June 30, 2025 (US$ thousand) | For the six months ended June 30, 2024 (US$ thousand) | | :--- | :--- | :--- | | Hong Kong | 3,248 | 7,367 | | Mainland China | 2 | 1 | | **Total** | **3,250** | **7,368** | Geographical Location of Specific Non-current Assets | Region | June 30, 2025 (US$ thousand) | December 31, 2024 (US$ thousand) | | :--- | :--- | :--- | | Hong Kong | 2,531 | 2,194 | | Mainland China | 153 | 269 | | **Total** | **2,684** | **2,463** | [4 (Loss)/Profit Before Tax](index=8&type=section&id=4%20(Loss)%2FProfit%20Before%20Tax) For H1 2025, the company reported a pre-tax loss of US$4,149 thousand, a significant shift from the prior year's profit, influenced by finance costs, staff costs, and R&D expenses Finance Costs | Item | For the six months ended June 30, 2025 (US$ thousand) | For the six months ended June 30, 2024 (US$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Interest on Bank Borrowings | 1,863 | 2,664 | -30.1% | | Interest on Lease Liabilities | 8 | 16 | -50.0% | | **Total** | **1,871** | **2,680** | **-30.2%** | Staff Costs | Item | For the six months ended June 30, 2025 (US$ thousand) | For the six months ended June 30, 2024 (US$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Salaries, Wages and Other Benefits | 1,759 | 1,803 | -2.4% | | Retirement Scheme Contributions | 123 | 111 | +10.8% | | **Total** | **1,882** | **1,914** | **-1.7%** | Other Items | Item | For the six months ended June 30, 2025 (US$ thousand) | For the six months ended June 30, 2024 (US$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Gain on Fair Value Changes of Financial Assets | (104) | (55) | +89.1% | | Research and Development Costs | 524 | 614 | -14.6% | | Amortization of Intangible Assets | 209 | 3 | +6866.7% | | Depreciation - Property, Plant and Equipment | 13 | 15 | -13.3% | | Depreciation - Right-of-Use Assets | 303 | 302 | +0.3% | - R&D costs include staff costs for R&D department employees, amounting to **US$524 thousand** in H1 2025 (H1 2024: **US$614 thousand**)[18](index=18&type=chunk) [5 Income Tax in Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=9&type=section&id=5%20Income%20Tax%20in%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For H1 2025, the company recorded an income tax credit of US$391 thousand, primarily due to an increase in deferred tax assets, contrasting with an expense in the prior year Income Tax Components | Item | For the six months ended June 30, 2025 (US$ thousand) | For the six months ended June 30, 2024 (US$ thousand) | | :--- | :--- | :--- | | Current Tax - Provision for the Period | 19 | 220 | | Deferred Tax - Origination and Reversal of Temporary Differences | (410) | (261) | | **Total** | **(391)** | **(41)** | - Tax Rates: No income tax in Cayman Islands and BVI. Hong Kong profits tax rate is **16.5%**, with **8.25%** for the first **HK$2 million** for eligible subsidiaries. PRC subsidiaries' statutory income tax rate is **25%**[19](index=19&type=chunk)[20](index=20&type=chunk) - Effective Income Tax Rate: **9.4%** in H1 2025, compared to **-13.8%** in H1 2024[52](index=52&type=chunk) [6 (Loss)/Earnings Per Share](index=9&type=section&id=6%20(Loss)%2FEarnings%20Per%20Share) For H1 2025, the company reported a basic loss per share of 0.47 US cents, a reversal from the prior year's profit per share, driven by the period's net loss - Basic (Loss)/Earnings Per Share: **Loss of 0.47 US cents** per share in H1 2025, compared to **profit of 0.04 US cents** per share in H1 2024[21](index=21&type=chunk) - Weighted Average Number of Ordinary Shares: **800,000,000** shares for both periods[21](index=21&type=chunk) - Dilutive Effect: No potential dilutive ordinary shares for both periods, thus diluted (loss)/earnings per share equals basic (loss)/earnings per share[21](index=21&type=chunk) [7 Right-of-Use Assets](index=10&type=section&id=7%20Right-of-Use%20Assets) As of June 30, 2025, the net book value of right-of-use assets increased to US$798 thousand, primarily due to new additions despite depreciation expenses Right-of-Use Asset Movements | Item | 2025 (US$ thousand) | 2024 (US$ thousand) | | :--- | :--- | :--- | | Net Book Value, as at January 1 | 360 | 838 | | Additions | 740 | 48 | | Lease Modifications | – | (31) | | Depreciation Expense for the Period | (303) | (302) | | Exchange Adjustments | 1 | (1) | | **Net Book Value, as at June 30** | **798** | **552** | [8 Trade and Other Receivables](index=10&type=section&id=8%20Trade%20and%20Other%20Receivables) As of June 30, 2025, total trade and other receivables decreased by 17.5% to US$183,407 thousand from year-end 2024, mainly due to reduced gross billings, though loss allowance increased Trade and Other Receivables Components | Item | June 30, 2025 (US$ thousand) | December 31, 2024 (US$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Trade Receivables - Third Parties | 192,376 | 228,934 | -16.0% | | Less: Loss Allowance for Trade Receivables | (9,786) | (7,378) | +32.6% | | **Net Trade Receivables** | **182,590** | **221,556** | **-17.6%** | | Amounts Due from Related Parties | 8 | 13 | -38.5% | | Amounts Due from Third Parties | 809 | 804 | +0.6% | | **Total** | **183,407** | **222,373** | **-17.5%** | - All receivables are expected to be recovered within one year[23](index=23&type=chunk) - Factoring Arrangements: As of June 30, 2025, trade receivables under factoring arrangements amounted to **US$14,295 thousand**, a significant decrease from **US$126,112 thousand** at year-end 2024[23](index=23&type=chunk) Trade Receivables Aging Analysis | Aging | June 30, 2025 (US$ thousand) | December 31, 2024 (US$ thousand) | | :--- | :--- | :--- | | Within 1 month | 39,057 | 62,614 | | After 1 month but within 2 months | 27,831 | 64,694 | | After 2 months but within 3 months | 17,747 | 13,698 | | After 3 months but within 6 months | 14,294 | 17,404 | | After 6 months but within 12 months | 47,723 | 52,487 | | Over 12 months | 45,724 | 18,037 | | **Total** | **192,376** | **228,934** | - Trade Receivables Due Date: Within 30 to 300 days from invoice date[24](index=24&type=chunk) [9 Trade and Other Payables](index=11&type=section&id=9%20Trade%20and%20Other%20Payables) As of June 30, 2025, total trade and other payables increased by 27.3% to US$164,252 thousand from year-end 2024, primarily due to reduced payments to suppliers Trade and Other Payables Components | Item | June 30, 2025 (US$ thousand) | December 31, 2024 (US$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Trade Payables - Third Parties | 163,649 | 128,459 | +27.4% | | VAT and Other Taxes Payable | 95 | 21 | +352.4% | | Salaries Payable | 280 | 265 | +5.7% | | Other Payables and Accruals | 228 | 287 | -20.5% | | **Total** | **164,252** | **129,032** | **+27.3%** | - All payables are expected to be settled within one year or on demand[25](index=25&type=chunk) Trade Payables Aging Analysis | Aging | June 30, 2025 (US$ thousand) | December 31, 2024 (US$ thousand) | | :--- | :--- | :--- | | Within 1 month | 41,985 | 62,236 | | After 1 month but within 3 months | 67,885 | 66,223 | | After 3 months but within 6 months | 53,779 | – | | **Total** | **163,649** | **128,459** | [10 Bank Borrowings](index=12&type=section&id=10%20Bank%20Borrowings) As of June 30, 2025, total bank borrowings significantly decreased by 85.4% to US$14,934 thousand from year-end 2024, mainly due to reduced funding needs from lower gross billings Bank Borrowings Repayment Schedule | Term | June 30, 2025 (US$ thousand) | December 31, 2024 (US$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Within 1 year or on demand | 13,126 | 100,638 | -86.9% | | After 1 year but within 2 years | 189 | 221 | -14.5% | | After 2 years but within 5 years | 180 | 260 | -30.8% | | After 5 years | 1,439 | 1,439 | 0.0% | | **Total** | **14,934** | **102,558** | **-85.4%** | - Total secured bank borrowings amounted to **US$14,934 thousand** (December 31, 2024: **US$102,558 thousand**)[29](index=29&type=chunk) - Bank borrowings of **US$2,069 thousand** are guaranteed by the Group and secured by financial assets at fair value through profit or loss[29](index=29&type=chunk) - Bank borrowings of **US$12,865 thousand** are guaranteed by the Group and secured by trade receivables under factoring arrangements[29](index=29&type=chunk) - As of June 30, 2025, no bank borrowings were solely secured by trade receivables under factoring arrangements (December 31, 2024: **US$42,474 thousand**)[29](index=29&type=chunk)[62](index=62&type=chunk) [11 Capital, Reserves and Dividends](index=13&type=section&id=11%20Capital%2C%20Reserves%20and%20Dividends) For H1 2025, the company neither declared nor paid any interim dividends, with its authorized and issued share capital remaining unchanged - Dividends: No dividends were declared or paid for the six months ended June 30, 2025 and 2024[30](index=30&type=chunk)[31](index=31&type=chunk) - Share Capital: Authorized share capital of **2,000,000,000** ordinary shares of **US$0.01** each, with **800,000,000** ordinary shares issued, consistent with year-end 2024[32](index=32&type=chunk) - Share Premium: Under Cayman Islands Companies Act, share premium account may be used for distributions or dividends to shareholders, provided the company is able to pay its debts as they fall due in the ordinary course of business[33](index=33&type=chunk) - Exchange Reserve: Includes all foreign exchange differences arising from the translation of financial information of entities not using US dollars as their functional currency[34](index=34&type=chunk) [12 Unadjusted Events After the Reporting Period](index=14&type=section&id=12%20Unadjusted%20Events%20After%20the%20Reporting%20Period) Subsequent to the reporting period, the company disposed of its entire equity interest in Powerwin Media Group Limited, generating an estimated gain of approximately US$0.45 million, with the transaction completed - Disposal: The company's direct wholly-owned subsidiary, Jiacheng Investment Group Limited, disposed of **1,000,000** shares of Powerwin Media Group Limited[35](index=35&type=chunk) - Counterparty: Chinalink International Development Limited, an independent third party[35](index=35&type=chunk) - Consideration: **US$1.95 million**[35](index=35&type=chunk) - Estimated Gain: Approximately **US$0.45 million**[35](index=35&type=chunk) - Completion Date: Completed as of the date of this announcement[36](index=36&type=chunk) [Business Overview and Review](index=15&type=section&id=Business%20Overview%20and%20Review) This section provides an overview of the company's business, its operational performance during the period, and future strategic outlook [Overview](index=15&type=section&id=Overview) Powerwin Tech Group Limited is a Chinese cross-border digital marketing service provider, assisting marketers in global expansion and collaborating with major media publishers - Core Business: China cross-border digital marketing service provider[37](index=37&type=chunk) - Service Offerings: Standardized, customized, and SaaS-based cross-border digital marketing solutions, and cross-border e-commerce SaaS solutions[37](index=37&type=chunk) - Objective: Empower Chinese marketers to acquire users, promote products, and assist media publishers in monetization[37](index=37&type=chunk) [Business Review](index=15&type=section&id=Business%20Review) As of June 30, 2025, the company served over 3,000 marketers and partnered with 20 major global media publishers, offering various digital marketing and e-commerce SaaS solutions - Clients Served: As of June 30, 2025, over **3,000** marketers served, spanning e-commerce, online gaming, and applications[38](index=38&type=chunk) - Media Partnerships: Collaborations with **20** major global media publishers including Meta, Google, X, TikTok, and over **50** vertical media publishers[38](index=38&type=chunk) - Cross-border Digital Marketing Service Types: Standardized digital marketing services, customized digital marketing services, SaaS-based digital marketing services[38](index=38&type=chunk)[41](index=41&type=chunk) - Cross-border E-commerce SaaS Solutions: Provided via the Powershopy platform, charging fixed monthly fees and/or commissions[39](index=39&type=chunk) - Staffing: As of June 30, 2025, **60** full-time employees (2024: **76**), with total staff costs of **US$1.9 million**[40](index=40&type=chunk) [Outlook](index=17&type=section&id=Outlook) Facing geopolitical uncertainties and global economic volatility, the company plans to enhance client and media partnerships, leverage AI for marketing optimization, and explore strategic opportunities to sustain growth - Challenges: Geopolitical uncertainties and global economic volatility leading to challenges and profit decline in the digital marketing industry[42](index=42&type=chunk) - Strategies: Close collaboration with clients for customized services; precise audience targeting with media partners; maintaining growth in cross-border digital marketing; leveraging AI and hyper-personalization to optimize Adorado SaaS and Powershopy platforms; continuous evaluation of strategic cooperation and investment opportunities[42](index=42&type=chunk) [Financial Review](index=17&type=section&id=Financial%20Review) This section provides a detailed analysis of the company's financial performance and key financial metrics for the reporting period [Revenue](index=17&type=section&id=Revenue) For H1 2025, total revenue significantly decreased by 55.9% to US$3.3 million, primarily due to substantial cuts in client digital advertising budgets amid global economic volatility - Total Revenue: Decreased by **55.9%** from **US$7.4 million** in H1 2024 to **US$3.3 million** in H1 2025[43](index=43&type=chunk) - Primary Reason: Significant reduction in client digital advertising budgets due to global economic volatility and geopolitical uncertainties[43](index=43&type=chunk) Cross-border Digital Marketing Revenue Breakdown | Service Type | For the six months ended June 30, 2025 (US$ million) | For the six months ended June 30, 2024 (US$ million) | Change (%) | | :--- | :--- | :--- | :--- | | Standardized Digital Marketing | 1.5 | 3.2 | -53.7% | | Customized Digital Marketing | 0.5 | 1.5 | -64.6% | | SaaS-based Digital Marketing | 0.9 | 1.2 | -25.6% | - Cross-border E-commerce SaaS Solutions Revenue: Decreased by **78.2%** from **US$1.4 million** in H1 2024 to **US$0.3 million** in H1 2025, primarily due to reduced commission income[45](index=45&type=chunk) [Cost of Sales](index=18&type=section&id=Cost%20of%20Sales) For H1 2025, cost of sales decreased by 12.9% to US$1.0 million, mainly attributed to optimized staff structure leading to reduced revenue and staff costs - Cost of Sales: Decreased from **US$1.1 million** in H1 2024 to **US$1.0 million** in H1 2025[46](index=46&type=chunk) - Primary Reason: Optimized staff structure leading to reduced revenue and staff costs[46](index=46&type=chunk) [Gross Profit and Gross Margin](index=18&type=section&id=Gross%20Profit%20and%20Gross%20Margin) For H1 2025, gross profit significantly decreased by 63.8% to US$2.3 million, with gross margin falling to 69.5%, primarily due to intensified competition and promotional activities in digital marketing services - Gross Profit: Decreased by **63.8%** from **US$6.2 million** in H1 2024 to **US$2.3 million** in H1 2025[47](index=47&type=chunk) - Gross Margin: Decreased from **84.5%** in H1 2024 to **69.5%** in H1 2025[47](index=47&type=chunk) - Primary Reason: Reduced revenue due to intensified competition in digital marketing services and promotional measures to counter competition[47](index=47&type=chunk) - Cost optimization could not fully offset the impact of revenue decline on gross margin[47](index=47&type=chunk) [Selling and Marketing Expenses](index=19&type=section&id=Selling%20and%20Marketing%20Expenses) For H1 2025, selling and marketing expenses slightly decreased to US$0.2 million - Selling and Marketing Expenses: Slightly decreased from **US$0.3 million** in H1 2024 to **US$0.2 million** in H1 2025[48](index=48&type=chunk) [Administrative Expenses](index=19&type=section&id=Administrative%20Expenses) For H1 2025, administrative expenses increased by 24.4% to US$2.2 million, primarily due to additional costs incurred from staff optimization initiatives - Administrative Expenses: Increased from **US$1.8 million** in H1 2024 to **US$2.2 million** in H1 2025[49](index=49&type=chunk) - Primary Reason: Additional costs incurred from staff optimization initiatives[49](index=49&type=chunk) [Expected Credit Losses on Trade Receivables](index=19&type=section&id=Expected%20Credit%20Losses%20on%20Trade%20Receivables) For H1 2025, expected credit losses on trade receivables increased by 52.9% to US$2.4 million, mainly due to higher bad debt provisions as some clients extended payment periods due to operational adjustments - Expected Credit Losses: Increased from **US$1.6 million** in H1 2024 to **US$2.4 million** in H1 2025[50](index=50&type=chunk) - Primary Reason: Increased bad debt provisions due to extended collection periods from certain clients' operational adjustments[50](index=50&type=chunk) - The company actively communicates with clients to follow up on collections[50](index=50&type=chunk) [Finance Costs](index=19&type=section&id=Finance%20Costs) For H1 2025, finance costs decreased by 30.2% to US$1.9 million, primarily due to reduced funding requirements for bank borrowings resulting from lower gross billings - Finance Costs: Decreased from **US$2.7 million** in H1 2024 to **US$1.9 million** in H1 2025[51](index=51&type=chunk) - Primary Reason: Reduced gross billings, leading to decreased funding requirements for bank borrowings[51](index=51&type=chunk) [Income Tax Credit](index=19&type=section&id=Income%20Tax%20Credit) For H1 2025, the company recorded an income tax credit of US$0.4 million, primarily due to an increase in deferred tax assets arising from temporary deductible differences related to trade receivables credit loss provisions - Income Tax Credit: **US$0.4 million** in H1 2025, compared to **US$0.04 million** in H1 2024[52](index=52&type=chunk) - Primary Reason: Increase in deferred tax assets arising from temporary deductible differences related to trade receivables credit loss provisions[52](index=52&type=chunk) - Effective Income Tax Rate: **9.4%** in H1 2025, compared to **-13.8%** in H1 2024[52](index=52&type=chunk) [(Loss)/Profit for the Period](index=19&type=section&id=(Loss)%2FProfit%20for%20the%20Period) For H1 2025, the company reported a loss of US$3.8 million, a reversal from the prior year's profit, influenced by decreased revenue, increased administrative expenses, and higher expected credit losses - (Loss)/Profit for the Period: A **US$3.8 million** loss recorded in H1 2025, compared to a **US$0.3 million** profit in H1 2024[53](index=53&type=chunk) [Trade Receivables](index=20&type=section&id=Trade%20Receivables) As of June 30, 2025, trade receivables decreased to US$192.4 million from US$228.9 million at year-end 2024, primarily due to reduced gross billings - Trade Receivables: Decreased from **US$228.9 million** as of December 31, 2024, to **US$192.4 million** as of June 30, 2025[54](index=54&type=chunk) - Primary Reason: Reduced gross billings[54](index=54&type=chunk) [Trade and Other Payables](index=20&type=section&id=Trade%20and%20Other%20Payables) As of June 30, 2025, trade and other payables increased to US$164.3 million from US$129.0 million at year-end 2024, primarily due to reduced payments to suppliers - Trade and Other Payables: Increased from **US$129.0 million** as of December 31, 2024, to **US$164.3 million** as of June 30, 2025[55](index=55&type=chunk) - Primary Reason: Reduced payments to the Group's suppliers[55](index=55&type=chunk) [Bank Borrowings](index=20&type=section&id=Bank%20Borrowings) As of June 30, 2025, bank borrowings significantly decreased to US$14.9 million from US$102.6 million at year-end 2024, primarily due to reduced funding needs from lower gross billings - Bank Borrowings: Decreased from **US$102.6 million** as of December 31, 2024, to **US$14.9 million** as of June 30, 2025[56](index=56&type=chunk) - Primary Reason: Reduced gross billings, leading to decreased funding required by the Group through bank borrowings[56](index=56&type=chunk) [Liquidity and Financial Resources](index=20&type=section&id=Liquidity%20and%20Financial%20Resources) This section details the company's cash position, liquidity management, debt levels, and financial policies [Liquidity and Financial Resources](index=20&type=section&id=Liquidity%20and%20Financial%20Resources) As of June 30, 2025, cash and cash equivalents decreased to US$16.3 million, and net current assets fell to US$19.6 million, mainly due to bank loan repayments and reduced trade receivables - Cash and Cash Equivalents: Decreased from **US$34.4 million** as of December 31, 2024, to **US$16.3 million** as of June 30, 2025[57](index=57&type=chunk) - Reason for Decrease: Primarily due to the Group's repayment of bank borrowings[57](index=57&type=chunk) - Net Current Assets: Decreased from **US$23.9 million** as of December 31, 2024, to **US$19.6 million** as of June 30, 2025[57](index=57&type=chunk) - Reason for Decrease: Reduced trade receivables and cash and cash equivalents[57](index=57&type=chunk) - Primary Financing Source: Bank borrowings, amounting to **US$14.9 million** as of June 30, 2025 (December 31, 2024: **US$102.6 million**)[57](index=57&type=chunk) [Interim Dividend](index=21&type=section&id=Interim%20Dividend) The Board of Directors does not recommend the payment of any interim dividend for the six months ended June 30, 2025 - No Interim Dividend: The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025[58](index=58&type=chunk) [Gearing Ratio](index=21&type=section&id=Gearing%20Ratio) As of June 30, 2025, the gearing ratio significantly improved to 56.7% from 340.8% at year-end 2024, primarily due to a substantial reduction in total borrowings - Gearing Ratio: Decreased from **340.8%** as of December 31, 2024, to **56.7%** as of June 30, 2025[59](index=59&type=chunk) - Primary Reason: Reduction in the Group's borrowings[59](index=59&type=chunk) [Debt-to-Equity Ratio](index=21&type=section&id=Debt-to-Equity%20Ratio) As of June 30, 2025, the Group was in a net cash position, a significant improvement from a debt-to-equity ratio of 226.5% at year-end 2024, primarily due to reduced total borrowings - Debt-to-Equity Ratio: As of June 30, 2025, the Group was in a **net cash position** (December 31, 2024: **226.5%**)[60](index=60&type=chunk) - Primary Reason: Reduction in the Group's borrowings[60](index=60&type=chunk) [Contingent Liabilities](index=21&type=section&id=Contingent%20Liabilities) As of June 30, 2025, and December 31, 2024, the Group had no material contingent liabilities - No Material Contingent Liabilities: None as of June 30, 2025, and December 31, 2024[61](index=61&type=chunk) [Pledge of Assets](index=21&type=section&id=Pledge%20of%20Assets) As of June 30, 2025, certain bank borrowings are secured by financial assets at fair value and trade receivables, with the total pledged amount decreasing from year-end 2024 - Bank borrowings of **US$2,069 thousand** are secured by financial assets at fair value through profit or loss[62](index=62&type=chunk) - Bank borrowings of **US$12,865 thousand** are secured by trade receivables (under factoring arrangements)[62](index=62&type=chunk) - As of June 30, 2025, no bank borrowings were solely secured by trade receivables under factoring arrangements (December 31, 2024: **US$42,474 thousand**)[29](index=29&type=chunk)[62](index=62&type=chunk) [Treasury Policy](index=21&type=section&id=Treasury%20Policy) The company adopts a prudent financial management approach, ensuring liquidity for operations and capital expenditures, closely monitoring its liquidity position, and appropriately investing surplus cash - Treasury Policy: Prudent, ensuring liquidity requirements[63](index=63&type=chunk) - Board Responsibilities: Closely monitor liquidity, consider credit, liquidity, and market risks of financial instruments, and appropriately invest surplus cash[63](index=63&type=chunk) [Interest Rate Risk](index=22&type=section&id=Interest%20Rate%20Risk) The company's interest rate risk primarily stems from fixed and variable rate bank borrowings and lease liabilities; interest expenses on bank borrowings decreased, and the company regularly monitors exposure to mitigate this risk - Risk Sources: Fixed and variable rate bank borrowings, and lease liabilities[64](index=64&type=chunk) - Bank Borrowing Interest: Decreased from **US$2.7 million** in H1 2024 to **US$1.9 million** in H1 2025[64](index=64&type=chunk) - Management Strategy: Regularly monitor risk exposure to mitigate interest rate risk[64](index=64&type=chunk) [Foreign Exchange Risk](index=22&type=section&id=Foreign%20Exchange%20Risk) Operating in Hong Kong with most monetary assets, liabilities, and transactions denominated in US dollars, the company does not face significant foreign exchange risk - Operating Location: Hong Kong[65](index=65&type=chunk) - Primary Denomination Currency: US dollars[65](index=65&type=chunk) - Foreign Exchange Risk: No significant foreign exchange risk[65](index=65&type=chunk) [Material Investments, Acquisitions and Disposals](index=22&type=section&id=Material%20Investments%2C%20Acquisitions%20and%20Disposals) For H1 2025, the company made no material investments, acquisitions, or disposals, and currently has no significant investment or capital asset plans - During the Reporting Period: No material investments, acquisitions, or disposals[66](index=66&type=chunk) - Future Plans: As of June 30, 2025, no material investment or capital asset plans[66](index=66&type=chunk) [Use of Proceeds from Initial Public Offering](index=22&type=section&id=Use%20of%20Proceeds%20from%20Initial%20Public%20Offering) The company listed on March 31, 2023, with net proceeds of approximately HK$96.8 million; as of June 30, 2025, HK$3.5 million was used for R&D, with the remainder planned for use by year-end 2025 as per prospectus - Listing Date: March 31, 2023[67](index=67&type=chunk) - Net Proceeds: Approximately **HK$96.8 million**[67](index=67&type=chunk) Use of Net Proceeds Details (As of June 30, 2025) | Purpose | Allocation Percentage | Allocated Amount (HK$ million) | Unutilized as of Dec 31, 2024 (HK$ million) | Utilized in H1 2025 (HK$ million) | Unutilized as of Jun 30, 2025 (HK$ million) | Expected Timeline of Use | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Strengthening R&D Capabilities | 41.7% | 40.3 | 11.2 | 3.5 | 7.7 | 2025 year-end | | Promoting Cross-border E-commerce SaaS Business | 13.3% | 12.9 | 12.9 | – | 12.9 | 2025 year-end | | Upgrading Business and Internal Management Systems | 10.0% | 9.7 | 9.7 | – | 9.7 | 2025 year-end | | Enhancing Overseas Localization Service Capabilities | 15.0% | 14.5 | 14.5 | – | 14.5 | 2025 year-end | | Seeking Strategic Cooperation or Investment Opportunities | 10.0% | 9.7 | 9.7 | – | 9.7 | 2025 year-end | | Working Capital and General Corporate Purposes | 10.0% | 9.7 | – | – | – | N/A | | **Total** | | **96.8** | **58.0** | **3.5** | **54.5** | | - No material changes or delays in the use of net proceeds, which will continue to be utilized as revised in the prospectus and annual results announcement[68](index=68&type=chunk)[69](index=69&type=chunk) [Other Information](index=24&type=section&id=Other%20Information) This section covers additional disclosures, including post-reporting period events and securities transactions [Events After the Reporting Period](index=24&type=section&id=Events%20After%20the%20Reporting%20Period) Subsequent to the reporting period, the company completed the disposal of its indirect wholly-owned subsidiary, Powerwin Media Group Limited, on July 31, 2025, ceasing to be a subsidiary - Disposal: The company's direct wholly-owned subsidiary, Jiacheng Investment Group Limited, disposed of the entire issued share capital of Powerwin Media Group Limited[70](index=70&type=chunk) - Completion Date: July 31, 2025[70](index=70&type=chunk) - Impact: Powerwin Media Group Limited ceased to be a subsidiary of the company[70](index=70&type=chunk) - No other material events after the reporting period[70](index=70&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=24&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company's%20Listed%20Securities) For H1 2025, neither the company nor its subsidiaries purchased, sold, or redeemed any listed securities, and the company held no treasury shares - No purchase, sale, or redemption of listed securities[71](index=71&type=chunk) - No treasury shares held[71](index=71&type=chunk) [Corporate Governance](index=24&type=section&id=Corporate%20Governance) This section outlines the company's adherence to corporate governance principles and relevant regulatory codes [Compliance with Corporate Governance Code Provisions in Appendix C1 Part 2 of the Listing Rules](index=24&type=section&id=Compliance%20with%20Corporate%20Governance%20Code%20Provisions%20in%20Appendix%20C1%20Part%202%20of%20the%20Listing%20Rules) The company complies with the Corporate Governance Code in Appendix C1 Part 2 of the Listing Rules, with the exception of the Chairman and CEO roles being combined, an arrangement the Board believes benefits management and will be reviewed periodically - Compliance: Adopted and complied with the Corporate Governance Code, except for the combined roles of Chairman and Chief Executive Officer[72](index=72&type=chunk) - Chairman and CEO: Mr. Li Xiang holds both roles of Chairman of the Board and Chief Executive Officer[73](index=73&type=chunk) - Board's View: Believes this arrangement benefits Group management and will be reviewed periodically[73](index=73&type=chunk) - Board Composition: Acknowledges the importance of a balanced composition of executive and independent non-executive directors to ensure independent judgment[73](index=73&type=chunk) [Compliance with the Model Code for Securities Transactions by Directors](index=25&type=section&id=Compliance%20with%20the%20Model%20Code%20for%20Securities%20Transactions%20by%20Directors) The company has adopted and its directors confirmed compliance with the Model Code for Securities Transactions by Directors of Listed Issuers during the reporting period - Code Adoption: Adopted the Model Code for Securities Transactions by Directors of Listed Issuers[74](index=74&type=chunk) - Compliance: Directors confirmed compliance with the Code during the reporting period[74](index=74&type=chunk) [Review of Unaudited Interim Results](index=25&type=section&id=Review%20of%20Unaudited%20Interim%20Results) These interim results are a summary of the condensed interim consolidated financial statements, reviewed by KPMG in accordance with HKSRE 2410 and by the Board's Audit Committee - Nature: Summary of condensed interim consolidated financial statements, unaudited[75](index=75&type=chunk) - Reviewing Body: KPMG reviewed in accordance with Hong Kong Standard on Review Engagements 2410[75](index=75&type=chunk) - Internal Review: Reviewed by the Board's Audit Committee[75](index=75&type=chunk) [Publication of Interim Results Announcement and Interim Report](index=26&type=section&id=Publication%20of%20Interim%20Results%20Announcement%20and%20Interim%20Report) This interim results announcement is published on the HKEX and company websites, where the full interim report containing all required information will also be available - Publication Platforms: HKEX website (www.hkexnews.hk) and company website (www.empowerwin.com)[76](index=76&type=chunk) - Interim Report: The interim report containing all information required by the Listing Rules will be available[76](index=76&type=chunk) [Management Information](index=26&type=section&id=Management%20Information) This section provides details about the composition of the company's Board of Directors [Board of Directors](index=26&type=section&id=Board%20of%20Directors) As of the announcement date, the Board comprises Mr. Li Xiang as Chairman and CEO, Ms. Yu Lu as Executive Director, and three Independent Non-executive Directors: Ms. Zhao Yan, Mr. Gong Peiyue, and Mr. Li Guotai - Chairman, CEO, and Executive Director: Mr. Li Xiang[77](index=77&type=chunk)[78](index=78&type=chunk) - Executive Director: Ms. Yu Lu[78](index=78&type=chunk) - Independent Non-executive Directors: Ms. Zhao Yan, Mr. Gong Peiyue, Mr. Li Guotai[78](index=78&type=chunk)

[Interim Results Announcement](index=1&type=section&id=Interim%20Results%20Announcement) [Financial Highlights](index=1&type=section&id=Financial%20Highlights) The Group's unaudited interim condensed consolidated financial results for the six months ended June 30, 2025, show a decrease in revenue, gross profit, profit before tax, and profit for the period, with profit before tax declining by **12.1%** | For the six months ended June 30 | 2025 (RMB thousand) | 2024 (RMB thousand) | Percentage Change | | :------------------------------- | :------------------ | :------------------ | :---------------- | | Revenue | 534,054 | 535,434 | -0.3% | | Gross Profit | 317,204 | 330,833 | -4.1% | | Profit Before Tax | 212,334 | 241,690 | -12.1% | | Profit for the Period | 162,061 | 179,857 | -9.9% | [Interim Condensed Consolidated Financial Statements](index=2&type=section&id=Interim%20Condensed%20Consolidated%20Financial%20Statements) [Interim Condensed Consolidated Statement of Profit or Loss](index=2&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss) For the six months ended June 30, 2025, the Group's revenue slightly decreased by **0.3%** to **RMB 534,054 thousand**, with cost of sales increasing by **6.0%**, leading to a **4.1%** decline in gross profit | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | | :------------------------------- | :------------------ | :------------------ | | Revenue | 534,054 | 535,434 | | Cost of Sales | (216,850) | (204,601) | | Gross Profit | 317,204 | 330,833 | | Profit Before Tax | 212,334 | 241,690 | | Profit for the Period | 162,061 | 179,857 | | Basic and Diluted Earnings Per Share | 0.41 | 0.45 | [Interim Condensed Consolidated Statement of Comprehensive Income](index=3&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) For the six months ended June 30, 2025, the Group's profit for the period was **RMB 162,061 thousand**, with net other comprehensive income of **RMB 230 thousand**, resulting in total comprehensive income of **RMB 162,291 thousand**, a decrease from **RMB 178,511 thousand** in the prior year | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | | :------------------------------- | :------------------ | :------------------ | | Profit for the Period | 162,061 | 179,857 | | Net Other Comprehensive Income | 230 | (1,346) | | Total Comprehensive Income for the Period | 162,291 | 178,511 | [Interim Condensed Consolidated Statement of Financial Position](index=4&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, total non-current assets increased to **RMB 3,190,508 thousand**, while current assets significantly decreased to **RMB 443,265 thousand**, primarily due to reduced financial assets and cash balances, with net assets increasing to **RMB 2,442,808 thousand** | Indicator | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :----------------------------------- | :--------------------------- | :------------------------------- | | Total Non-current Assets | 3,190,508 | 3,144,694 | | Total Current Assets | 443,265 | 830,568 | | Total Current Liabilities | 513,792 | 978,993 | | Net Current Liabilities | (70,527) | (148,425) | | Total Assets Less Current Liabilities | 3,119,981 | 2,996,269 | | Total Non-current Liabilities | 677,173 | 679,139 | | Net Assets | 2,442,808 | 2,317,130 | | Total Equity | 2,442,808 | 2,317,130 | [Notes to the Interim Condensed Consolidated Financial Information](index=6&type=section&id=Notes%20to%20the%20Interim%20Condensed%20Consolidated%20Financial%20Information) [1. Company Information](index=6&type=section&id=1.%20Company%20Information) The Company, incorporated in the Cayman Islands on May 8, 2018, operates as an investment holding company primarily providing undergraduate and vocational education services in China - The company is an investment holding company, primarily providing undergraduate and vocational education services in China[10](index=10&type=chunk) [2. Basis of Preparation and Changes in Accounting Policies and Disclosures](index=6&type=section&id=2.%20Basis%20of%20Preparation%20and%20Changes%20in%20Accounting%20Policies%20and%20Disclosures) The interim condensed consolidated financial information is prepared under IAS 34, with consistent accounting policies from 2024, and the initial adoption of revised IFRS had no material impact on the Group's financial information - Interim financial information is prepared in accordance with IAS 34, with accounting policies consistent with the prior year, and the newly adopted IAS 21 amendments have no impact on financial information[11](index=11&type=chunk)[12](index=12&type=chunk)[13](index=13&type=chunk) [3. Operating Segment Information](index=7&type=section&id=3.%20Operating%20Segment%20Information) The Group operates solely in China, providing higher education services, and therefore presents no separate operating segment or geographical information as all revenue and long-term assets originate from China - The Group operates solely in China, providing higher education services, with no separate operating segment or geographical information presented[14](index=14&type=chunk)[15](index=15&type=chunk) - No single customer's revenue accounted for **10% or more of total revenue** during the period[16](index=16&type=chunk) [4. Revenue](index=7&type=section&id=4.%20Revenue) The Group's revenue, primarily from tuition and accommodation fees, totaled **RMB 534,054 thousand** for the six months ended June 30, 2025, remaining largely stable compared to the prior year, with performance obligations generally satisfied over time and paid in advance | Revenue Source | 2025 (RMB thousand) | 2024 (RMB thousand) | | :----------------------- | :------------------ | :------------------ | | Tuition Fees | 451,863 | 454,760 | | Accommodation Fees | 72,202 | 70,636 | | Education-related Services | 8,473 | 8,409 | | Other Services | 1,516 | 1,629 | | **Total** | **534,054** | **535,434** | - Performance obligations for tuition and accommodation fees are satisfied over time and generally paid in advance before the start of the academic year[19](index=19&type=chunk) [5. Profit Before Tax](index=9&type=section&id=5.%20Profit%20Before%20Tax) The Group's profit before tax is reported after deducting various expenses, including increased employee benefit expenses and depreciation/amortization, reflecting operational costs for the period | Expense Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :----------------------------------------- | :------------------ | :------------------ | | Cost of Services Provided | 216,850 | 204,601 | | Total Employee Benefit Expenses | 191,843 | 177,175 | | Depreciation of Property, Plant and Equipment | 57,882 | 50,932 | | Depreciation of Right-of-Use Assets | 7,990 | 7,952 | | Amortization of Other Intangible Assets | 1,135 | 495 | | Net Impairment Loss on Trade Receivables | 2,653 | 2,176 | | Net Impairment Loss on Other Receivables | 98 | 26 | [6. Income Tax Expense](index=9&type=section&id=6.%20Income%20Tax%20Expense) The Company is exempt from income tax in the Cayman Islands, while its mainland China subsidiaries are subject to either a **15%** or **25%** corporate income tax rate, resulting in a period income tax expense of approximately **RMB 50.3 million** due to reduced profit before tax - Gench WFOE benefits from a **15% corporate income tax rate** due to its "High-tech Enterprise" qualification, while other mainland China subsidiaries are subject to **25%**[21](index=21&type=chunk)[22](index=22&type=chunk) | Income Tax Components | 2025 (RMB thousand) | 2024 (RMB thousand) | | :-------------------- | :------------------ | :------------------ | | Current | 48,879 | 56,246 | | Deferred | 1,394 | 5,587 | | **Total Tax for the Period** | **50,273** | **61,833** | [7. Dividends](index=10&type=section&id=7.%20Dividends) The Board of Directors has resolved to declare an interim dividend of **HKD 0.10 per ordinary share** for the six months ended June 30, 2025, maintaining consistency with the prior year - The Board of Directors resolved to pay an interim dividend of **HKD 0.10 per ordinary share** for the six months ended June 30, 2025, which is the same as the prior year[24](index=24&type=chunk) [8. Earnings Per Share Attributable to Owners of the Parent](index=11&type=section&id=8.%20Earnings%20Per%20Share%20Attributable%20to%20Owners%20of%20the%20Parent) For the six months ended June 30, 2025, basic and diluted earnings per share decreased to **RMB 0.41** from **RMB 0.45** in the prior year, primarily reflecting a reduction in profit for the period | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | | :------------------------------------------------ | :------------------ | :------------------ | | Profit for the purpose of calculating basic and diluted earnings per share | 162,061 | 179,857 | | Weighted Average Number of Ordinary Shares (shares) | 394,500,000 | 395,401,500 | - For the six months ended June 30, 2025 and 2024, the Group had no outstanding potential dilutive ordinary shares[26](index=26&type=chunk) [9. Property, Plant and Equipment](index=12&type=section&id=9.%20Property%2C%20Plant%20and%20Equipment) As of June 30, 2025, the Group's net property, plant and equipment was **RMB 2,388,330 thousand**, a slight decrease from the beginning of the year, primarily due to depreciation expenses exceeding new additions | Item | June 30, 2025 (RMB thousand) | | :--------------------------------- | :--------------------------- | | As at January 1, 2025 | 2,407,320 | | Additions | 38,929 | | Disposals | (37) | | Depreciation for the Period | (57,882) | | As at June 30, 2025 | 2,388,330 | [10. Trade Receivables](index=12&type=section&id=10.%20Trade%20Receivables) As of June 30, 2025, total trade receivables significantly decreased to **RMB 5,359 thousand** from **RMB 11,748 thousand** as of December 31, 2024, with the majority concentrated within 1 year | Aging | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--------- | :--------------------------- | :------------------------------- | | Within 1 year | 4,288 | 9,517 | | 1 to 2 years | 885 | 1,684 | | 2 to 3 years | 186 | 481 | | Over 3 years | – | 66 | | **Total** | **5,359** | **11,748** | [11. Share Capital](index=13&type=section&id=11.%20Share%20Capital) As of June 30, 2025, the Company's authorized share capital was **500,000,000 ordinary shares** of **HKD 0.01** each, with **415,000,000 issued and fully paid shares**, amounting to **RMB 3,677 thousand**, consistent with December 31, 2024 | Share Capital Type | June 30, 2025 (Number of Shares) | December 31, 2024 (Number of Shares) | | :-------------------------------------- | :------------------------------- | :----------------------------------- | | Number of Authorized Ordinary Shares | 500,000,000 | 500,000,000 | | Number of Issued and Fully Paid Ordinary Shares | 415,000,000 | 415,000,000 | | Share Capital Amount | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :-------------------------------------- | :--------------------------- | :------------------------------- | | Authorized Ordinary Shares | 4,462 | 4,462 | | Issued and Fully Paid Ordinary Shares | 3,677 | 3,677 | [12. Share Award Scheme](index=13&type=section&id=12.%20Share%20Award%20Scheme) The Share Award Scheme, approved on December 11, 2020, aims to recognize and retain talent, with the trustee holding **20,500,000 shares** totaling **RMB 84,504 thousand** as of June 30, 2025, and no awards granted, lapsed, or cancelled during the period - The Share Award Scheme aims to recognize contributions, retain talent, and attract suitable personnel, valid from December 11, 2020, until terminated by the Board or no awards are granted after its 10th anniversary[31](index=31&type=chunk) - China Merchants Wing Lung Trust Company Limited, as trustee, manages the trust fund, including awarded shares and related income[32](index=32&type=chunk)[33](index=33&type=chunk) | Item | Number of Shares | Total (RMB thousand) | | :------------------------ | :----------------- | :------------------- | | As at January 1, 2025 | 20,500,000 | 84,504 | | Purchases and Withholdings | – | – | | As at June 30, 2025 | 20,500,000 | 84,504 | [13. Commitments](index=14&type=section&id=13.%20Commitments) As of the reporting period end, the Group's contractual commitments primarily related to the acquisition of property, plant and equipment, amounting to **RMB 6,293 thousand**, an increase from December 31, 2024 | Commitment Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--------------------------- | :--------------------------- | :------------------------------- | | Property, Plant and Equipment | 6,293 | 4,388 | [Business Overview](index=15&type=section&id=Business%20Overview) [Introduction to the Group](index=15&type=section&id=Introduction%20to%20the%20Group) The Group operates Shanghai Jian Qiao University, Shanghai's largest private university by full-time student enrollment in 2024/25, consistently ranking third among Type I private universities in China - Shanghai Jian Qiao University, operated by the Group, is Shanghai's largest private university and has consistently ranked **third among Type I private universities in China** for four consecutive years[37](index=37&type=chunk) [Student Enrollment](index=15&type=section&id=Student%20Enrollment) In the 2024/25 academic year, total full-time student enrollment was **23,928**, a decrease of **1,085** from the prior year, mainly due to graduates from the "Junior College to Undergraduate" program, while planned undergraduate enrollment for 2025/26 increased - Total full-time student enrollment for the 2024/25 academic year was **23,928**, a decrease of **1,085** from the 2023/24 academic year, mainly due to graduates from the "Junior College to Undergraduate" program[38](index=38&type=chunk) | Academic Year | Undergraduate Programs | Vocational Programs | Junior College to Undergraduate Programs | Total | | :------------ | :--------------------- | :------------------ | :--------------------------------------- | :------ | | 2020/21 | 17,274 | 2,548 | 1,516 | 21,338 | | 2021/22 | 17,643 | 2,427 | 2,384 | 22,454 | | 2022/23 | 17,945 | 4,195 | 2,327 | 24,467 | | 2023/24 | 17,937 | 4,750 | 2,326 | 25,013 | | 2024/25 | 17,802 | 3,826 | 2,300 | 23,928 | - Planned undergraduate enrollment for the 2025/26 academic year is **5,486** (2024/25 academic year: 4,886), vocational enrollment is **850**, and "Junior College to Undergraduate" enrollment is **1,902**[38](index=38&type=chunk) [Tuition Fee Data](index=16&type=section&id=Tuition%20Fee%20Data) For the 2025/26 academic year, new undergraduate tuition fees will increase to **RMB 42,000-48,000**, new vocational fees to **RMB 23,000**, while "Junior College to Undergraduate" program fees remain unchanged | Program | 2023/24 Academic Year (RMB) | 2024/25 Academic Year (RMB) | 2025/26 Academic Year (RMB) | | :------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Undergraduate Programs | 32,000-39,800 | 32,000-39,800 | 42,000-48,000 | | Vocational Programs | 20,000 | 20,000 | 23,000 | | Junior College to Undergraduate Programs | 30,000-39,800 | 32,000-39,800 | 32,000-39,800 | [Business Review and Operational Updates](index=16&type=section&id=Business%20Review%20and%20Operational%20Updates) [University Profile and Honors](index=16&type=section&id=University%20Profile%20and%20Honors) Shanghai Jian Qiao University offers **40 undergraduate** and **10 vocational programs** across 7 disciplines, consistently ranking third among Type I private universities in China for four years, and has repeatedly received "National Civilized Unit" honors - The University offers **40 undergraduate programs** and **10 vocational programs**, covering 7 disciplinary categories including economics, management, literature, engineering, arts, science, and education[40](index=40&type=chunk) - The University has consistently ranked **third among Type I private universities in China** for four consecutive years and has retained the "National Civilized Unit" honor title after three re-evaluations[42](index=42&type=chunk) - The University successfully passed the Ministry of Education's undergraduate teaching work audit evaluation twice, in November 2019 and April 2025[42](index=42&type=chunk) [Dual Support from Lingang Special Area Policies and Vocational Education Policies](index=17&type=section&id=Dual%20Support%20from%20Lingang%20Special%20Area%20Policies%20and%20Vocational%20Education%20Policies) Lingang New Area policies and national plans, including the "Outline of the Plan for Building a Strong Education Nation," provide strong support for industry-education integration and high-quality vocational education development, benefiting the Group's strategic initiatives - The "Implementation Plan for Comprehensive Reform Pilot in Pudong New Area (2023-2027)" grants greater autonomy to Pudong New Area, supporting high-level reform and opening up[43](index=43&type=chunk) - The Lingang New Area Administration Committee issued "Several Policy Opinions on Supporting Industry-Education Integration Development" and "Action Plan for High-Quality Development of Industry-Education Integration (2025-2027)," explicitly supporting the University's construction as an industry-education integrated university[44](index=44&type=chunk) - Both the "Outline of the Plan for Building a Strong Education Nation (2024-2035)" and the "2025 Government Work Report" emphasize promoting high-quality development of modern vocational education and industry-education integration[46](index=46&type=chunk) [Curriculum and Faculty Development](index=20&type=section&id=Curriculum%20and%20Faculty%20Development) The University optimizes its curriculum to meet market demands, with **29 programs ranking in the top 10 nationwide** and **13 ranked first**, while faculty development shows **85.8%** holding master's degrees or above and **28.7%** holding doctoral degrees, alongside the development of **70 "AI+Curriculum" courses** - The University has **29 programs ranked among the top 10 nationwide**, with **13 programs ranked first nationwide**[48](index=48&type=chunk) - The University introduced a new Business English undergraduate program, aiming to cultivate applied business English composite talents[48](index=48&type=chunk) - As of September 30, 2024, **85.8% of full-time teachers hold master's degrees or above**, and **28.7% hold doctoral degrees**[49](index=49&type=chunk) - The University has explored the development of **70 "AI+Curriculum" courses** and successfully approved **9 Shanghai key "AI+Curriculum" courses**[49](index=49&type=chunk) [Upgrade of Teaching Facilities and Smart Campus Construction](index=21&type=section&id=Upgrade%20of%20Teaching%20Facilities%20and%20Smart%20Campus%20Construction) The Group is upgrading teaching facilities and laboratories to create a modern, intelligent teaching environment, establishing a student-centric smart teaching platform, and integrating AI, 5G, and VR technologies to enhance campus management - The Group is committed to creating a modern and intelligent teaching environment, upgrading teaching and research instruments and laboratories[50](index=50&type=chunk) - The "Cloud Jian Qiao" smart teaching platform has been established, building a teaching process support system "student-centric and learning-focused"[50](index=50&type=chunk) - Actively developing the DeepSeek Jian Qiao Education Application Large Model to create intelligent service, management, and teaching entities, achieving intelligent campus management[50](index=50&type=chunk) [Student Cultivation and Employment](index=22&type=section&id=Student%20Cultivation%20and%20Employment) The University prioritizes high-quality student employment, with a **99.1% employment rate for 2024 graduates**, a **5.7% further study rate**, and **58.8% remaining employed in Shanghai**, consistently achieving over **95% employer satisfaction** - The University's graduate employment rate has consistently remained at **98% or above**, with the 2024 graduate employment rate reaching **99.1%**[51](index=51&type=chunk) - For 2024 graduates, the further study rate reached **5.7%**, overseas study rate **4.6%**, and **58.8% remained employed in the Shanghai area**[51](index=51&type=chunk) - Overall employer satisfaction with the University's graduates consistently exceeds **95%**[51](index=51&type=chunk) [School-Enterprise Cooperation and Industry-Education Integration](index=22&type=section&id=School-Enterprise%20Cooperation%20and%20Industry-Education%20Integration) As a Shanghai High-Skilled Talent Training Base and Lingang New Area's first industry-education integration base, the University is strategically transforming into an industry-education integrated university by **2035**, implementing pilot projects and operating industry colleges through a "secondary college + industry college + entity company" model - The University is a Shanghai High-Skilled Talent Training Base and Lingang New Area's first industry-education integration base[52](index=52&type=chunk) - The University has established a strategy to transform into an industry-education integrated university, aiming for full transformation by **2035**[53](index=53&type=chunk) - Eight pilot projects have been selected, introducing real production and service projects, and operating industry colleges through a "secondary college + industry college + entity company" model[53](index=53&type=chunk) [Phase IV Campus Facilities Put into Use](index=23&type=section&id=Phase%20IV%20Campus%20Facilities%20Put%20into%20Use) The Group's Phase IV campus facilities, totaling approximately **86,400 square meters**, were fully put into use in **March 2025**, including a teaching and training building, talent apartment, and R&D center, to deepen industry-education integration and attract talent - The Group's Phase IV campus facilities were fully put into use in **March 2025**, with a total construction area of approximately **86,400 square meters**[54](index=54&type=chunk) - The new campus facilities include a teaching and training building, talent apartment building, and multi-functional R&D center, facilitating deeper industry-education integration, talent attraction, and R&D support[54](index=54&type=chunk) [Outlook](index=24&type=section&id=Outlook) [Leveraging Existing Strengths, Adhering to High-Quality Development](index=24&type=section&id=Leveraging%20Existing%20Strengths%2C%20Adhering%20to%20High-Quality%20Development) The Group will maintain its high-quality education philosophy, optimizing tuition fees for 2025/26 to **RMB 42,000/year** for undergraduate and **RMB 23,000/year** for vocational students, while advancing talent cultivation, curriculum, and faculty development with AI integration - For the 2025/26 academic year, the minimum tuition fee for new undergraduate students will be optimized from **RMB 32,000/year to RMB 42,000/year**, and for new vocational students from **RMB 20,000/year to RMB 23,000/year**[55](index=55&type=chunk) - Future plans include deepening talent cultivation model reforms, optimizing professional and disciplinary structures, advancing digital and intelligent curriculum reforms, and exploring AI-empowered education and teaching, such as DeepSeek[55](index=55&type=chunk) [Promoting Business Diversification, Expanding New Growth Areas](index=24&type=section&id=Promoting%20Business%20Diversification%2C%20Expanding%20New%20Growth%20Areas) The Group plans to diversify by developing international, adult continuing, and non-degree vocational education, capitalizing on Lingang's talent demand, with adult continuing education having **4,065 enrolled students** and offering over **400 types of vocational qualification training** as of June 30, 2025 - The Group will vigorously develop international education, adult continuing education, and non-degree vocational education to meet Lingang's demand for international and highly skilled talent[56](index=56&type=chunk) - As of June 30, 2025, adult continuing education had **4,065 enrolled students**, and over **400 types of vocational qualification certificate training** have been cumulatively provided[57](index=57&type=chunk) [Seizing Policy Dividends of Lingang New Area, Achieving Industry-Education-City Integration](index=25&type=section&id=Seizing%20Policy%20Dividends%20of%20Lingang%20New%20Area%2C%20Achieving%20Industry-Education-City%20Integration) The Group will leverage Lingang New Area's policy opportunities to advance integrated, internationalized, and digitalized strategies, accelerating its transformation into an industry-education integrated university and aiming to become a first-class private university in China with international influence - The Group will fully leverage the policy opportunities of the Lingang New Area, serving the national strategy for high-quality vocational education development and Lingang's regional development strategy to build a "global power city"[58](index=58&type=chunk) - It will deeply advance integrated, internationalized, and digitalized strategies, accelerating its transformation into an industry-education integrated university, aiming to build a first-class private university in China[58](index=58&type=chunk) [Financial Review](index=26&type=section&id=Financial%20Review) [Revenue](index=26&type=section&id=Revenue) For the six months ended June 30, 2025, the Group's revenue was approximately **RMB 534.1 million**, remaining stable year-on-year - For the six months ended June 30, 2025, revenue was approximately **RMB 534.1 million**, remaining stable year-on-year[59](index=59&type=chunk) [Cost of Sales](index=26&type=section&id=Cost%20of%20Sales) For the six months ended June 30, 2025, cost of sales increased by **6.0%** to **RMB 216,850 thousand**, primarily due to a **7.3%** increase in teacher salary costs and a **12.6%** increase in depreciation and amortization expenses from new campus facilities - Cost of sales increased by **6.0% to RMB 216,850 thousand**, primarily impacted by a **7.3% increase in teacher salary costs** and a **12.6% increase in depreciation and amortization expenses**[60](index=60&type=chunk) [Gross Profit and Gross Profit Margin](index=26&type=section&id=Gross%20Profit%20and%20Gross%20Profit%20Margin) Gross profit decreased by **4.1%** to **RMB 317.2 million**, with the gross profit margin at **59.4%**, a year-on-year decrease of **2.4 percentage points**, mainly due to increased salary and depreciation expenses - Gross profit decreased by **4.1% to RMB 317.2 million**, with a gross profit margin of **59.4%**, a year-on-year decrease of **2.4 percentage points**[61](index=61&type=chunk) [Other Income and Gains](index=26&type=section&id=Other%20Income%20and%20Gains) For the six months ended June 30, 2025, other income and gains amounted to **RMB 17.0 million**, remaining stable year-on-year, primarily from government grants, bank interest, and operating lease income - Other income and gains amounted to **RMB 17.0 million**, remaining stable year-on-year[62](index=62&type=chunk) [Selling and Distribution Expenses](index=27&type=section&id=Selling%20and%20Distribution%20Expenses) Selling and distribution expenses decreased by **56.2%** to approximately **RMB 1.2 million**, primarily due to effective labor cost control leading to reduced staff remuneration - Selling and distribution expenses decreased by **56.2% to RMB 1.2 million**, primarily due to labor cost control[63](index=63&type=chunk) [Administrative Expenses](index=27&type=section&id=Administrative%20Expenses) For the six months ended June 30, 2025, administrative expenses increased by **20.4%** to **RMB 104.5 million**, mainly driven by an approximate **RMB 8.1 million** increase in administrative staff salaries and an approximate **RMB 8.7 million** increase in logistics expenses - Administrative expenses increased by **20.4% to RMB 104.5 million**, primarily impacted by increased administrative salaries and logistics expenses[64](index=64&type=chunk) [Finance Costs](index=27&type=section&id=Finance%20Costs) Finance costs decreased by **5.3%** to **RMB 13.0 million**, primarily due to a reduction in interest-bearing borrowings and a decrease in the average annual effective interest rate from **3.79% to 3.07%** - Finance costs decreased by **5.3% to RMB 13.0 million**, primarily due to a reduction in borrowing scale and a decrease in the average effective interest rate[65](index=65&type=chunk) [Profit Before Tax](index=27&type=section&id=Profit%20Before%20Tax) For the six months ended June 30, 2025, profit before tax was approximately **RMB 212.3 million**, representing a year-on-year decrease of approximately **RMB 29.4 million** - Profit before tax was approximately **RMB 212.3 million**, a year-on-year decrease of **RMB 29.4 million**[66](index=66&type=chunk) [Income Tax Expense](index=28&type=section&id=Income%20Tax%20Expense) For the six months ended June 30, 2025, income tax expense was approximately **RMB 50.3 million**, primarily attributable to the decrease in profit before tax during the reporting period - Income tax expense was approximately **RMB 50.3 million**, primarily due to a decrease in profit before tax[67](index=67&type=chunk) [Liquidity and Capital Resources](index=28&type=section&id=Liquidity%20and%20Capital%20Resources) The Group primarily funds its operations through cash generated from operations and bank borrowings, with future liquidity needs to be met by a combination of operating cash flow, bank borrowings, and capital market fundraising - Operations are primarily funded by cash generated from operations and bank borrowings[68](index=68&type=chunk) [Treasury Policy](index=28&type=section&id=Treasury%20Policy) The Group maintains a prudent financial management approach, with the Board actively monitoring liquidity to ensure all funding requirements are adequately met - The Group adopts a prudent financial management approach, with the Board closely monitoring liquidity status[69](index=69&type=chunk) [Property, Plant and Equipment](index=28&type=section&id=Property%2C%20Plant%20and%20Equipment) As of June 30, 2025, property, plant and equipment amounted to approximately **RMB 2,388.3 million**, a **0.8%** decrease from December 31, 2024, mainly due to new additions being less than depreciation expenses - Property, plant and equipment amounted to approximately **RMB 2,388.3 million**, a year-on-year decrease of **0.8%**, primarily because new additions were less than depreciation expenses[70](index=70&type=chunk) [Cash and Cash Equivalents and Time Deposits](index=28&type=section&id=Cash%20and%20Cash%20Equivalents%20and%20Time%20Deposits) As of June 30, 2025, cash and cash equivalents and time deposits totaled approximately **RMB 277.0 million**, a **16.2%** decrease from December 31, 2024, primarily influenced by seasonal factors with lower first-half tuition income and higher expenses - Cash and cash equivalents and time deposits amounted to approximately **RMB 277.0 million**, a year-on-year decrease of **16.2%**, primarily due to seasonal factors[71](index=71&type=chunk) [Bank Borrowings](index=28&type=section&id=Bank%20Borrowings) As of June 30, 2025, total bank borrowings were approximately **RMB 827.3 million**, a slight decrease from December 31, 2024, with an effective annual interest rate of **3.07%**, primarily used for campus construction and working capital - Total bank borrowings amounted to approximately **RMB 827.3 million**, with an effective annual interest rate of **3.07%**[73](index=73&type=chunk) | Maturity Status | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :----------------------------------- | :--------------------------- | :------------------------------- | | Repayable within one year | 164,000 | 163,000 | | Repayable in the second year | 178,000 | 172,000 | | Repayable in the third to fifth year (inclusive) | 465,903 | 437,653 | | Repayable after five years | 19,372 | 57,273 | | **Total** | **827,275** | **829,926** | [Capital Expenditures](index=29&type=section&id=Capital%20Expenditures) During the reporting period, capital expenditures amounted to **RMB 58.5 million**, primarily allocated to the University's Phase IV campus construction plan and the maintenance and upgrade of existing school premises - Capital expenditures amounted to **RMB 58.5 million**, primarily for Phase IV campus construction and maintenance/upgrade of existing facilities[74](index=74&type=chunk) [Contractual Commitments](index=29&type=section&id=Contractual%20Commitments) As of June 30, 2025, the Group's capital commitments primarily related to the acquisition of property, plant and equipment, totaling **RMB 6,293 thousand** | Commitment Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--------------------------- | :--------------------------- | :------------------------------- | | Property, Plant and Equipment | 6,293 | 4,388 | [Contingent Liabilities](index=30&type=section&id=Contingent%20Liabilities) As of June 30, 2025, the Group had no significant outstanding or threatened contingent liabilities or material guarantees that would impact its financial position - As of June 30, 2025, the Group had no significant contingent liabilities or guarantees[77](index=77&type=chunk) [Financial Leverage Ratio](index=30&type=section&id=Financial%20Leverage%20Ratio) For the six months ended June 30, 2025, the financial leverage ratio decreased from **0.4** as of December 31, 2024, to **0.3**, primarily due to the repayment of some bank borrowings and an increase in equity - The financial leverage ratio decreased from **0.4 to 0.3**, primarily due to repayment of bank borrowings and increased equity[78](index=78&type=chunk) [Foreign Exchange Risk Management](index=30&type=section&id=Foreign%20Exchange%20Risk%20Management) The Company's functional currency is RMB, with most income and expenses denominated in RMB, and no significant impact from currency exchange rate fluctuations was observed during the period, nor were any financial instruments entered into for hedging purposes - The Company's functional currency is RMB, with no significant impact from exchange rate fluctuations during the period, and no hedging activities undertaken[79](index=79&type=chunk) [Material Investments, Acquisitions and Disposals, Future Plans for Material Investments and Capital Assets](index=30&type=section&id=Material%20Investments%2C%20Acquisitions%20and%20Disposals%2C%20Future%20Plans%20for%20Material%20Investments%20and%20Capital%20Assets) As of June 30, 2025, the Group had no other material investments, acquisitions, or disposals of subsidiaries and associates, nor any immediate plans for material investments and capital asset acquisitions - As of June 30, 2025, the Group had no material investments, acquisitions, disposals, or future plans for capital asset acquisitions[80](index=80&type=chunk) [Pledge of Assets](index=30&type=section&id=Pledge%20of%20Assets) As of June 30, 2025, secured bank borrowings totaled **RMB 827.3 million**, with **RMB 642.4 million** secured by tuition and accommodation fee rights, and the remainder by the charging rights of the Phase IV Talent Center - Secured bank borrowings totaled **RMB 827.3 million**, with part secured by tuition and accommodation fee rights and part by charging rights of the Phase IV Talent Center[81](index=81&type=chunk) [Other Information](index=31&type=section&id=Other%20Information) [Employees and Remuneration Policy](index=31&type=section&id=Employees%20and%20Remuneration%20Policy) As of June 30, 2025, the Group had **1,896 full-time employees**, with a total remuneration cost of **RMB 191.8 million** for the period, and provides training and social security schemes - As of June 30, 2025, the Group had **1,896 full-time employees**, with a total remuneration cost of **RMB 191.8 million**[82](index=82&type=chunk) - The Group provides external and internal training programs and participates in various employee social security schemes[82](index=82&type=chunk) [Events After Reporting Period](index=31&type=section&id=Events%20After%20Reporting%20Period) In early August 2025, Jian Qiao University was ordered to pay approximately **RMB 8.3 million** in construction fees and interest due to a contract dispute, which it has appealed, with no material impact on financial position or daily operations to date - Jian Qiao University was ordered to pay approximately **RMB 8.3 million** in construction fees and interest due to a construction contract dispute, and has filed an appeal[83](index=83&type=chunk) - As of the announcement date, the Group's financial position and daily operations have not been materially affected[83](index=83&type=chunk) [Interim Dividend](index=31&type=section&id=Interim%20Dividend) The Board resolved to pay an interim dividend of **HKD 0.10 per ordinary share** for the six months ended June 30, 2025, from the share premium account, expected on or about **October 24, 2025** - The Board of Directors resolved to pay an interim dividend of **HKD 0.10 per ordinary share**, to be paid from the share premium account[84](index=84&type=chunk) - The 2025 interim dividend is expected to be paid on or about **October 24, 2025**, to shareholders registered on **October 10, 2025**[84](index=84&type=chunk) [Closure of Register of Members](index=31&type=section&id=Closure%20of%20Register%20of%20Members) To determine the entitlement to the 2025 interim dividend, the Company will suspend the registration of share transfers on **Friday, October 10, 2025**, which will also serve as the record date - To determine interim dividend entitlement, share transfer registration will be suspended on **October 10, 2025**, which is also the record date[85](index=85&type=chunk)[86](index=86&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=32&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company%27s%20Listed%20Securities) For the six months ended June 30, 2025, neither the Company nor its subsidiaries purchased, sold, or redeemed any listed securities, nor did they hold any treasury shares, and the Share Award Scheme trustee also made no purchases - Neither the Company nor its subsidiaries purchased, sold, or redeemed any listed securities during the period, nor did they hold treasury shares[87](index=87&type=chunk) - The trustee of the Share Award Scheme also did not purchase any shares during the period[87](index=87&type=chunk) [Compliance with Corporate Governance Code](index=32&type=section&id=Compliance%20with%20Corporate%20Governance%20Code) The Group is committed to high corporate governance standards, having adopted and complied with all applicable provisions of the Corporate Governance Code for the six months ended June 30, 2025 - The Group has adopted the Corporate Governance Code and complied with all applicable code provisions during the reporting period[88](index=88&type=chunk) [Compliance with Model Code](index=32&type=section&id=Compliance%20with%20Model%20Code) The Company has adopted the Model Code for directors' securities transactions and confirmed their compliance, also implementing a similar code for employees with inside information - The Company has adopted the Model Code as the code of conduct for directors' securities transactions and confirmed all directors' compliance[89](index=89&type=chunk) - A code of conduct no less exacting than the Model Code has been adopted for employees who may possess inside information[89](index=89&type=chunk) [Audit Committee and Review of Interim Results](index=32&type=section&id=Audit%20Committee%20and%20Review%20of%20Interim%20Results) The Audit Committee has reviewed the Group's accounting principles and the unaudited interim condensed consolidated financial statements for the six months ended June 30, 2025, confirming compliance with applicable standards and legal requirements - The Audit Committee has reviewed and deemed the interim condensed consolidated financial statements compliant with applicable accounting standards, Listing Rules, and legal requirements[90](index=90&type=chunk) [Publication of Interim Results and Interim Report](index=33&type=section&id=Publication%20of%20Interim%20Results%20and%20Interim%20Report) This announcement and the interim report have been published on the HKEX website and the Company's website, with the report to be dispatched to shareholders requiring a printed copy - This announcement and the interim report have been published on the HKEX website and the Company's website[91](index=91&type=chunk) [Definitions](index=33&type=section&id=Definitions)

[Company Information and Performance Overview](index=1&type=section&id=I.%20Company%20Information%20and%20Performance%20Overview) This section provides an overview of the company's listing, interim financial highlights, and key strategic milestones [Company Profile](index=1&type=section&id=I.A.%20Company%20Profile) Synagistics Holdings Limited, formerly HK Acquisition Corporation, listed on the HKEX Main Board on October 30, 2024, as the successor to a Cayman Islands-registered SPAC merger, primarily engaging in omnichannel product sales and digital solution services - The company successfully listed on the Hong Kong Stock Exchange Main Board on **October 30, 2024**, marking Hong Kong's first SPAC merger transaction[3](index=3&type=chunk) - The company, formerly HK Acquisition Corporation (HKAC), completed its SPAC merger transaction through a combination with Synagistics Pte. Ltd[13](index=13&type=chunk)[14](index=14&type=chunk)[15](index=15&type=chunk) - The Group primarily engages in omnichannel product sales and digital solution services[13](index=13&type=chunk) [Interim Performance Highlights](index=1&type=section&id=I.B.%20Interim%20Performance%20Highlights) During the reporting period, the Group significantly narrowed its adjusted EBITDA loss by **55.0% to SGD 2.3 million**, improving the EBITDA margin from -9.2% to -6.5%, while D2B revenue contribution rose from 22.6% to 35.1%, reflecting successful strategic transformation, despite a **36.5% decrease in total revenue to SGD 35.7 million** due to D2C business adjustments, with gross margin remaining stable at 26.3% Comparison of Key Financial Indicators for H1 2025 vs. H1 2024 | Indicator | H1 2025 (SGD thousands) | H1 2024 (SGD thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Adjusted EBITDA Loss | (2,300) | (5,200) | 55.0% (Narrowed) | | EBITDA Margin | -6.5% | -9.2% | 2.7 percentage points (Improved) | | D2B Revenue Contribution | 35.1% | 22.6% | 12.5 percentage points (Improved) | | Total Revenue | 35,700 | 56,200 | (36.5%) (Decreased) | | Gross Margin | 26.3% | 26.3% | 0.0 percentage points (Stable) | [Strategic Focus and Milestones](index=2&type=section&id=I.C.%20Strategic%20Focus%20and%20Milestones) The company achieved key strategic milestones, including launching the Geene enterprise AI platform and ShopHK cross-border e-commerce platform, establishing a digital trade corridor across China, Central Asia, and Southeast Asia, and exploring tokenization and digital asset innovation to build an AI and finance-driven digital commerce ecosystem - Launched the enterprise AI platform Geene, integrating large language models, blockchain infrastructure, and data analytics to provide secure and efficient AI solutions[5](index=5&type=chunk) - Introduced the cross-border e-commerce platform ShopHK, assisting Hong Kong SMEs and enterprises in entering the Southeast Asian e-commerce market[5](index=5&type=chunk) - Established strategic partnerships to develop an AI-driven digital trade corridor spanning China, Central Asia, and Southeast Asia, based on commercial and compliance tools[5](index=5&type=chunk) - The Digital Finance Group explores innovations such as tokenization, digital asset issuance, and programmable settlements to enhance cross-border transaction efficiency and security[5](index=5&type=chunk) [Financial Summary](index=3&type=section&id=II.%20Financial%20Summary) This section provides an overview of the company's key financial performance metrics for the reporting period, highlighting revenue, profitability, and asset changes [Key Financial Indicators](index=3&type=section&id=II.A.%20Key%20Financial%20Indicators) For the six months ended June 30, 2025, the company's revenue decreased by **36.5% to SGD 35.7 million** due to a D2B business model transition, while gross margin remained stable at 26.3%, and loss for the period expanded to **SGD 28.8 million** primarily due to share-based payment expenses, though adjusted EBITDA loss significantly narrowed to **SGD 2.3 million**, with the adjusted EBITDA margin improving to -6.5% Key Financial Indicators for H1 2025 vs. H1 2024 | Indicator | H1 2025 (SGD thousands) | H1 2024 (SGD thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 35,700 | 56,200 | (36.5%) | | Gross Margin | 26.3% | 26.3% | 0.0% | | Gross Profit | 9,400 | 14,800 | (36.5%) | | Loss for the Period | (28,800) | (6,200) | 364.5% (Expanded) | | Adjusted EBITDA Loss | (2,300) | (5,200) | 55.8% (Narrowed) | | Adjusted EBITDA Margin | -6.5% | -9.2% | 2.7 percentage points (Improved) | | Adjusted Net Assets (Period End) | 91,600 | 100,900 (Dec 31, 2024) | (9.1%) (Decrease) | - The D2B business segment's contribution to total revenue increased from **22.6% in the prior period to 35.1%**[7](index=7&type=chunk) - Loss for the period was primarily attributable to share-based payment expenses, offset by fair value gains on financial liabilities, both being non-cash in nature[7](index=7&type=chunk) [Condensed Consolidated Financial Statements](index=4&type=section&id=III.%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 [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=4&type=section&id=III.A.%20Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For the six months ended June 30, 2025, the company's revenue decreased by **36.5% to SGD 35,682 thousand** from SGD 56,201 thousand in the prior year, with gross profit at SGD 9,388 thousand and gross margin stable at 26.3%, while loss for the period significantly expanded to **SGD 28,847 thousand**, primarily due to a substantial increase in general and administrative expenses, particularly share-based payment expenses, and fair value changes in financial liabilities Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (For the six months ended June 30) | Indicator | 2025 (SGD thousands) | 2024 (SGD thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 35,682 | 56,201 | (36.5%) | | Cost of sales | (26,294) | (41,423) | (36.5%) | | Gross profit | 9,388 | 14,778 | (36.5%) | | Other income and other gains and losses | 1,251 | 1,354 | (7.5%) | | Fair value change of financial liabilities at fair value through profit or loss | 31,634 | — | N/A | | Selling and distribution expenses | (4,120) | (10,245) | (59.8%) | | General and administrative expenses | (66,868) | (11,498) | 481.6% | | Finance costs | (80) | (884) | (90.9%) | | Loss before income tax | (28,808) | (6,495) | 343.6% | | Income tax (expense) / credit | (39) | 293 | N/A | | Loss for the year | (28,847) | (6,202) | 365.1% | | Basic loss per share (Singapore cents) | (6.49) | (0.83) | 681.9% | [Condensed Consolidated Statement of Financial Position](index=6&type=section&id=III.B.%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the company's total assets less current liabilities significantly improved to **SGD 45,107 thousand** from (SGD 20,197) thousand on December 31, 2024, with net current liabilities substantially decreasing from SGD 75,912 thousand to **SGD 10,042 thousand**, and net assets turning positive to **SGD 44,717 thousand**, primarily due to a significant reduction in financial liabilities at fair value through profit or loss Condensed Consolidated Statement of Financial Position (Period End) | Indicator | June 30, 2025 (SGD thousands) | December 31, 2024 (SGD thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Non-current assets | 55,149 | 55,715 | (1.0%) | | Current assets | 56,566 | 78,446 | (27.9%) | | Current liabilities | (66,608) | (154,358) | (56.8%) | | Net current liabilities | (10,042) | (75,912) | 86.8% (Improvement) | | Net assets / (liabilities) | 44,717 | (20,652) | N/A (Turned positive from negative) | | Total equity | 44,717 | (20,652) | N/A (Turned positive from negative) | - Financial liabilities at fair value through profit or loss significantly decreased from **SGD 121,577 thousand to SGD 46,926 thousand**, which was the primary reason for the improvement in net current liabilities[11](index=11&type=chunk) [Notes to the Financial Statements](index=8&type=section&id=IV.%20Notes%20to%20the%20Financial%20Statements) This section details the company's general information, basis of preparation, revenue breakdown, income tax, dividends, earnings per share, trade and other receivables, payables, and financial liabilities at fair value through profit or loss [General Information and Basis of Preparation](index=8&type=section&id=IV.A.%20General%20Information%20and%20Basis%20of%20Preparation) Synagistics Holdings Limited, formerly HK Acquisition Corporation, a Cayman Islands-registered company, listed on October 30, 2024, via a SPAC merger, with these interim condensed consolidated financial statements prepared under IAS 34, treating the target company as the accounting acquirer at historical book values and HKAC's assets and liabilities at fair value, and despite net current liabilities, the directors confirm the appropriateness of preparing the financial statements on a going concern basis - The company, formerly HK Acquisition Corporation (HKAC), completed its SPAC merger transaction on **October 30, 2024**, with Synagistics Pte. Ltd. deemed the accounting acquirer[13](index=13&type=chunk)[14](index=14&type=chunk)[15](index=15&type=chunk) - The financial statements are 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[15](index=15&type=chunk) - As of June 30, 2025, the Group had net current liabilities of **SGD 10,042 thousand**, but the directors are satisfied that the Group is able to meet its financial obligations as they fall due, thus preparing the statements on a going concern basis[17](index=17&type=chunk) [Revenue](index=10&type=section&id=IV.B.%20Revenue) Total revenue for the period was **SGD 35,682 thousand**, a **36.5% decrease** from the prior year, with D2C revenue significantly down **46.7% to SGD 23,160 thousand**, while D2B revenue remained stable at SGD 12,522 thousand, increasing its share of total revenue from 22.6% to 35.1%, and revenue from the Philippines market substantially declined, offset by growth in Singapore, Indonesia, and Vietnam Revenue by Type of Goods or Services (SGD thousands) | Business Model | 2025 | 2024 | Change (%) | | :--- | :--- | :--- | :--- | | D2C | 23,160 | 43,473 | (46.7%) | | D2B | 12,522 | 12,728 | (1.6%) | | **Total** | **35,682** | **56,201** | **(36.5%)** | Revenue by Geographical Market (SGD thousands) | Region | 2025 | 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Singapore | 12,516 | 6,896 | 81.5% | | Philippines | 3,207 | 35,122 | (90.9%) | | Indonesia | 5,179 | 4,420 | 17.2% | | Vietnam | 10,751 | 6,003 | 79.1% | | Malaysia | 2,134 | 2,076 | 2.8% | | Hong Kong | 487 | 437 | 11.4% | | Others | 1,408 | 1,247 | 12.9% | | **Total** | **35,682** | **56,201** | **(36.5%)** | [Income Tax Expense/(Credit)](index=11&type=section&id=IV.C.%20Income%20Tax%20Expense%2F%28Credit%29) Income tax expense for the period was **SGD 39 thousand**, compared to a credit of SGD 293 thousand in the prior year, primarily because deferred tax liabilities recognized last year, related to intangible assets from customer relationships, were fully amortized by December 31, 2024, resulting in no related credit for the current period Income Tax Expense/(Credit) (SGD thousands) | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | Current tax: Corporate income tax | 39 | 50 | | Deferred tax | — | (343) | | **Total** | **39** | **(293)** | - Last year's income tax credit primarily stemmed from deferred tax liabilities arising from intangible assets in customer relationships, which were fully amortized by **December 31, 2024**[49](index=49&type=chunk) [Dividends](index=11&type=section&id=IV.D.%20Dividends) For the six months ended June 30, 2025, the Group neither paid nor proposed any dividends - The company neither paid nor proposed any dividends during or at the end of the reporting period[20](index=20&type=chunk) [Loss Per Share](index=11&type=section&id=IV.E.%20Loss%20Per%20Share) For the six months ended June 30, 2025, basic loss per share significantly expanded to **6.49 Singapore cents** from 0.83 Singapore cents in the prior year, and diluted loss per share is not applicable as the assumed exercise of share options, earn-out shares, or conversion of financial liabilities would result in a reduction of loss per share Loss Per Share (Singapore cents) | Indicator | 2025 | 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Loss for the period attributable to owners of the company (SGD thousands) | (28,847) | (6,202) | 365.1% | | Number of ordinary and preference shares (thousands) | 444,604 | 746,792 | (40.4%) | | Basic loss per share (Singapore cents) | (6.49) | (0.83) | 681.9% | | Diluted loss per share | Not applicable | Not applicable | N/A | - Diluted loss per share is not applicable as the assumed exercise or conversion would result in a reduction of loss per share[22](index=22&type=chunk) [Trade and Other Receivables](index=12&type=section&id=IV.F.%20Trade%20and%20Other%20Receivables) As of June 30, 2025, total trade and other receivables amounted to **SGD 25,878 thousand**, a **10.6% decrease** from SGD 28,961 thousand on December 31, 2024, with trade receivables (net of credit loss allowance) at **SGD 16,111 thousand**, primarily due to improved collection timeliness Trade and Other Receivables (SGD thousands) | Indicator | June 30, 2025 | December 31, 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Trade receivables (net of allowance) | 16,111 | 18,905 | (14.8%) | | Other tax receivables | 2,729 | 2,611 | 4.5% | | Deposits | 319 | 406 | (21.4%) | | Other receivables | 101 | 231 | (56.3%) | | Prepayments | 6,618 | 6,808 | (2.8%) | | **Total** | **25,878** | **28,961** | **(10.6%)** | - The decrease in trade receivables was primarily due to more timely collections from brand partners, reflecting efforts in working capital optimization[51](index=51&type=chunk) [Trade and Other Payables](index=13&type=section&id=IV.G.%20Trade%20and%20Other%20Payables) As of June 30, 2025, total trade and other payables significantly decreased by **31.8% to SGD 18,821 thousand** from SGD 27,588 thousand on December 31, 2024, primarily due to the settlement of trade and other payable balances during the reporting period Trade and Other Payables (SGD thousands) | Indicator | June 30, 2025 | December 31, 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Trade payables | 7,349 | 15,458 | (52.5%) | | Other payables | 3,012 | 3,449 | (12.7%) | | Accrued expenses | 5,882 | 5,679 | 3.6% | | Other tax payables | 2,146 | 2,695 | (20.4%) | | Contract liabilities | 432 | 307 | 40.7% | | **Total** | **18,821** | **27,588** | **(31.8%)** | - The decrease in trade and other payables was primarily due to the settlement of related balances during the reporting period[52](index=52&type=chunk) [Financial Liabilities at Fair Value Through Profit or Loss](index=14&type=section&id=IV.H.%20Financial%20Liabilities%20at%20Fair%20Value%20Through%20Profit%20or%20Loss) As of June 30, 2025, total financial liabilities at fair value through profit or loss significantly decreased by **61.4% to SGD 46,926 thousand** from SGD 121,577 thousand on December 31, 2024, primarily due to fair value changes (a gain of SGD 31,634 thousand) and the exercise of founder earn-out rights and public warrants Changes in Financial Liabilities at Fair Value Through Profit or Loss (SGD thousands) | Indicator | June 30, 2025 | December 31, 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Public warrant liabilities | 398 | 714 | (44.3%) | | Founder warrant liabilities | 46,528 | 73,332 | (36.6%) | | Founder earn-out right liabilities | — | 47,531 | (100.0%) | | **Total** | **46,926** | **121,577** | **(61.4%)** | - During the reporting period, the founder irrevocably elected to fully exercise the founder earn-out rights on a cashless basis, subscribing for **10,005,000 founder earn-out shares**[29](index=29&type=chunk) - Public warrants are exercisable from 30 days after the SPAC merger completion until the day before the fifth anniversary[27](index=27&type=chunk) - Founder warrants are exercisable within 12 months after the SPAC merger completion, with a contractual term until **October 30, 2029**[28](index=28&type=chunk) [Management Discussion and Analysis](index=16&type=section&id=V.%20Management%20Discussion%20and%20Analysis) This section provides a comprehensive review of the Group's business operations, financial performance, liquidity, non-IFRS measures, and future outlook [Business Review](index=16&type=section&id=V.A.%20Business%20Review) The Group operates as a data-driven digital solutions platform in Southeast Asia, offering D2B and D2C business models, having launched the Geene AI platform and ShopHK cross-border e-commerce platform, and established strategic partnerships with Byteplus and Jiangsu Suhao Cloud Business to expand AI capabilities and digital trade corridors, with operations spanning six major Southeast Asian economies and strategic expansion into Greater China and Spain - The Group is a data-driven digital solutions platform in Southeast Asia, offering D2B (direct-to-brand) and D2C (direct-to-consumer) business models[30](index=30&type=chunk) - Launched the enterprise AI platform Geene, integrating large language models, blockchain infrastructure, and data analytics to provide secure and scalable AI solutions[31](index=31&type=chunk)[32](index=32&type=chunk) - Launched the cross-border e-commerce platform ShopHK, assisting Hong Kong SMEs and enterprises in entering the Southeast Asian e-commerce market[31](index=31&type=chunk)[34](index=34&type=chunk) - Established a strategic partnership with Byteplus to enhance the Geene AI platform's capabilities and drive enterprise AI transformation in the Asia-Pacific region[33](index=33&type=chunk) - Formed a strategic partnership with Jiangsu Suhao Cloud Business Co., Ltd. to develop an integrated digital trade corridor connecting China, Central Asia, and Southeast Asia[35](index=35&type=chunk) - Business operations cover Singapore, Malaysia, the Philippines, Vietnam, Thailand, and Indonesia, with expansion into Greater China and Spain[31](index=31&type=chunk) [Financial Review](index=18&type=section&id=V.B.%20Financial%20Review) During the reporting period, total company revenue decreased by **36.5% to SGD 35.7 million**, primarily due to a strategic reduction in lower-margin D2C business, with D2B revenue contribution increasing to 35.1%, while gross profit and gross margin remained stable, though D2C gross margin narrowed, and loss for the period expanded to **SGD 28.8 million**, mainly impacted by share-based payment expenses and fair value changes in financial liabilities, with selling and distribution expenses significantly decreasing and general and administrative expenses substantially increasing, and both trade and other receivables and payables decreasing, reflecting improved working capital management - The decrease in revenue was primarily due to the strategic reduction of lower-margin D2C business, accelerating the transition to a higher-margin D2B business model[37](index=37&type=chunk) - Selling and distribution expenses significantly decreased by **59.8% to SGD 4.1 million**, primarily benefiting from the focus on the D2B business model and asset-light operating model[46](index=46&type=chunk) - General and administrative expenses substantially increased by **481.6% to SGD 66.9 million**, mainly due to a **SGD 54.9 million increase** in share-based payment expenses[47](index=47&type=chunk) - Finance costs significantly decreased by **90.9% to SGD 0.1 million**, primarily due to the repayment of bank and other borrowings[48](index=48&type=chunk) - Loss for the period expanded to **SGD 28.8 million**, with a net loss margin of **80.8%**[50](index=50&type=chunk) - Trade and other receivables decreased by **10.6%**, primarily due to improved collection timeliness[51](index=51&type=chunk) - Trade and other payables decreased by **31.8%**, primarily due to the settlement of related balances[52](index=52&type=chunk) [Liquidity and Capital Resources](index=23&type=section&id=V.C.%20Liquidity%20and%20Capital%20Resources) The Group primarily funds its operations through cash generated from operations, borrowings, SPAC merger proceeds, and equity/debt financing, with net current liabilities significantly reduced to **SGD 10.0 million** and a net cash position of **SGD 27.6 million** as of June 30, 2025, and capital expenditures mainly focused on the ongoing development of the Geene AI and Synagie platforms, while the company has no pledged assets or significant contingent liabilities, and foreign exchange risk has decreased due to the repayment of convertible loan notes - Net current liabilities significantly decreased from **SGD 75.9 million** as of December 31, 2024, to **SGD 10.0 million** as of June 30, 2025[53](index=53&type=chunk) - The reduction in net current liabilities was primarily due to the exercise of founder and public warrant liabilities totaling **SGD 35.6 million**, and a non-cash fair value gain on financial liability instruments of **SGD 31.6 million**[53](index=53&type=chunk) - As of June 30, 2025, cash and cash equivalents amounted to **SGD 28.2 million**, with a net cash position of **SGD 27.6 million**[54](index=54&type=chunk)[53](index=53&type=chunk) - Capital expenditure was **SGD 1.1 million**, primarily for the ongoing development of the Geene AI platform and Synagie platform[55](index=55&type=chunk) - The Group has no pledged assets or significant contingent liabilities[56](index=56&type=chunk)[58](index=58&type=chunk) - Foreign exchange risk decreased due to the full repayment of convertible loan notes in **2024**[57](index=57&type=chunk) [Non-IFRS Measures](index=24&type=section&id=V.D.%20Non-IFRS%20Measures) To supplement IFRS, the Group uses non-IFRS measures such as adjusted EBITDA and adjusted net assets, where adjusted EBITDA better reflects core operating profitability by adding back non-cash or one-off items like depreciation, amortization, income tax, finance costs, share-based payment expenses, fair value gains on convertible loan notes, warrants, and earn-out right liabilities, and one-off SPAC merger professional fees, while adjusted net assets add back financial liabilities at fair value through profit or loss to provide more meaningful total asset value information - Adjusted EBITDA loss narrowed from **SGD 5.2 million in H1 2024 to SGD 2.3 million in H1 2025**, with the adjusted EBITDA margin improving from **-9.2% to -6.5%**[61](index=61&type=chunk) Reconciliation of Loss for the Period to Adjusted EBITDA (SGD thousands) | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | Loss for the period | (28,847) | (6,202) | | Add: Depreciation and amortization expenses | 1,054 | 2,135 | | Add: Income tax expense / (credit) | 39 | (293) | | Add: Net finance costs | (358) | 875 | | **EBITDA** | **(28,112)** | **(3,485)** | | Add: Share-based payment expenses | 54,878 | — | | Add: Fair value gain on convertible loan notes | — | (1,667) | | Add: Fair value gain on founder earn-out right liabilities | (8,973) | — | | Add: Fair value gain on founder warrant liabilities | (22,444) | — | | Add: Fair value gain on public warrant liabilities | (217) | — | | Add: One-off SPAC merger professional fees and expenses | 2,549 | — | | **Adjusted EBITDA** | **(2,319)** | **(5,152)** | | **Adjusted EBITDA Margin** | **(6.5%)** | **(9.2%)** | Reconciliation of Net Assets / (Liabilities) to Adjusted Net Assets (SGD thousands) | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Net assets / (liabilities) | 44,717 | (20,652) | | Add: Financial liabilities at fair value through profit or loss | 46,926 | 121,577 | | **Adjusted Net Assets** | **91,643** | **100,925** | - Non-IFRS measures aim to exclude non-cash or one-off items to better reflect the core operating profitability of the business[62](index=62&type=chunk)[66](index=66&type=chunk) [Prospects and Outlook](index=27&type=section&id=V.E.%20Prospects%20and%20Outlook) The Group is committed to strengthening its digital commerce ecosystem through technological innovation and strategic partnerships, expanding Geene AI platform applications, and establishing Synagistics Digital Finance Group to focus on multi-currency, stablecoin, and real-world asset tokenization, while actively seeking strategic M&A and investment opportunities in digital solutions, supply chain providers, and technology/media sectors to expand market presence and create long-term value - Will continue to strengthen its digital commerce ecosystem through technology-driven innovation and strategic partnerships[67](index=67&type=chunk) - The Geene AI platform will continue to expand its applications across various use cases, from customer engagement to operational automation[67](index=67&type=chunk) - Established Synagistics Digital Finance Group, focusing on the development of multi-currency, interoperable stablecoins, and real-world asset tokenization to support programmable settlements, real-time payments, and enhanced liquidity in Asia[67](index=67&type=chunk) - Will actively seek strategic mergers and acquisitions, and investments in digital solutions and platforms, supply chain providers, and technology or media companies[67](index=67&type=chunk) [Other Information](index=27&type=section&id=VI.%20Other%20Information) This section covers the company's future plans for investments and capital assets, significant M&A activities, employee and remuneration policies, dividend policy, corporate governance, securities trading standards, audit committee review, and report publication details [Future Plans for Material Investments and Capital Assets](index=27&type=section&id=VI.A.%20Future%20Plans%20for%20Material%20Investments%20and%20Capital%20Assets) As of the end of the reporting period and the announcement date, the company has no other future plans for material investments and capital assets, apart from those disclosed in the SPAC merger circular and recent placing and subscription matters - Except for plans disclosed in the SPAC merger circular and recent placing and subscription matters, the company has no other future plans for material investments and capital assets[68](index=68&type=chunk) [Material Investments and Acquisitions](index=28&type=section&id=VI.B.%20Material%20Investments%20and%20Acquisitions) The company is discussing a potential acquisition of a Chinese SaaS company, though no definitive agreement has been reached, and the Group will actively seek M&A, joint ventures, strategic investments, and alliance opportunities in AI, big data, and technology sectors to enhance its D2B business solution capabilities - The company is discussing a potential acquisition of a Chinese SaaS company, but no definitive agreement has been entered into yet[69](index=69&type=chunk) - Will actively seek M&A, joint ventures, strategic investments, and alliance opportunities in the artificial intelligence, big data, and technology industries to enhance D2B business solution capabilities[69](index=69&type=chunk) [Employees and Remuneration Policy](index=28&type=section&id=VI.C.%20Employees%20and%20Remuneration%20Policy) As of June 30, 2025, the Group had **316 employees** with a total remuneration cost of **SGD 61.4 million**, offering competitive compensation and comprehensive training programs to attract, motivate, and retain talent Employee and Remuneration Information | Indicator | June 30, 2025 | | :--- | :--- | | Total number of employees | 316 employees | | Total remuneration cost (SGD thousands) | 61,400 | - The company provides comprehensive training programs, including onboarding and professional development, to enhance employee capabilities and foster innovation[70](index=70&type=chunk) [Dividend Policy](index=29&type=section&id=VI.D.%20Dividend%20Policy) The Board does not recommend the payment of any interim dividend for the reporting period - The Board does not recommend the payment of any interim dividend for the reporting period[72](index=72&type=chunk) [Corporate Governance](index=29&type=section&id=VI.E.%20Corporate%20Governance) The company has adopted and complied with all applicable code provisions of the Corporate Governance Code set out in Appendix C1 to the HKEX Listing Rules - The company has adopted and complied with all applicable code provisions of the Corporate Governance Code set out in Appendix C1 to the HKEX Listing Rules[72](index=72&type=chunk) [Standard Code for Securities Transactions](index=29&type=section&id=VI.F.%20Standard%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 to the Listing Rules, and all directors confirmed compliance during the reporting period - All directors confirmed compliance with the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix C3 to the Listing Rules during the reporting period[73](index=73&type=chunk) [Dealings in Listed Securities](index=30&type=section&id=VI.G.%20Dealings%20in%20Listed%20Securities) Neither the company nor its subsidiaries purchased, sold, or redeemed any of the company's listed securities during the reporting period, and no treasury shares were held as of June 30, 2025 - During the reporting period, neither the company nor its subsidiaries purchased, sold, or redeemed any of the company's listed securities[74](index=74&type=chunk) - As of **June 30, 2025**, the company did not hold any treasury shares[74](index=74&type=chunk) [Audit Committee](index=30&type=section&id=VI.H.%20Audit%20Committee) The Audit Committee has reviewed the Group's unaudited interim condensed consolidated financial information for the six months ended June 30, 2025, and discussed accounting principles, internal controls, and financial reporting matters with management - The Audit Committee has reviewed the Group's unaudited interim condensed consolidated financial information and discussed accounting principles, internal controls, and financial reporting matters[75](index=75&type=chunk) [Publication of Report](index=30&type=section&id=VI.I.%20Publication%20of%20Report) This announcement has been published on the company's website and the Stock Exchange website, with the interim report to be dispatched in due course - This announcement has been published on the company's website (https://synagistics.com/) and the Stock Exchange website (www.hkexnews.hk)[76](index=76&type=chunk)