[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)

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。 Zhou Hei Ya International Holdings Company Limited 周黑鴨國際控股有限公司 （於 開 曼 群 島 註 冊 成 立 的 有 限 公 司） （股 份 代 號：1458） 下表載列於所示期間本集團自營和特許經營門店網絡的若干主要營運資料。 | | | | | | | | | | | | | | 截 至 六 月 三 十 | 日╱ | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | | | | | | | | | | | | 截至六月三十日止六個月 | | | | | | | | | | | | | | | | 二零二五年 | 二零二四年 | | 門店總數 | | ...

[Condensed Consolidated Statement of Profit or Loss](index=1&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss) This statement presents the Group's revenue, expenses, and profit for the period, highlighting a significant increase in profit before tax Condensed Consolidated Statement of Profit or Loss (For the six months ended June 30) | Metric | 2025 (in thousands of USD) | 2024 (in thousands of USD) | | :--- | :--- | :--- | | Revenue | 13,943 | 18,154 | | Other income | 9,996 | 14,433 | | Administrative expenses | (4,285) | (3,347) | | Fair value changes on financial assets and perpetual notes at FVTPL | 36,318 | 12,741 | | Profit before tax | 59,324 | 40,348 | | Profit for the period | 59,279 | 40,348 | | Profit for the period attributable to owners of the Company | 59,277 | 40,349 | | Basic and diluted earnings per share (US cents) | 13.15 | 8.95 | [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=2&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) This statement details the total comprehensive income, reflecting a decrease due to other comprehensive expenses in the current period Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (For the six months ended June 30) | Metric | 2025 (in thousands of USD) | 2024 (in thousands of USD) | | :--- | :--- | :--- | | Profit for the period | 59,279 | 40,348 | | Other comprehensive (expense)/income | (10,197) | 1,607 | | Total comprehensive income for the period | 49,082 | 41,955 | | Total comprehensive income/(expense) for the period attributable to owners of the Company | 49,080 | 41,956 | [Condensed Consolidated Statement of Financial Position](index=3&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) This statement outlines the Group's assets, liabilities, and equity, showing growth in total assets and total equity Condensed Consolidated Statement of Financial Position (As at June 30) | Metric | 2025 (in thousands of USD) | 2024 (in thousands of USD) | | :--- | :--- | :--- | | **Non-current assets** | | | | Long-term time deposits | 50,000 | 150,000 | | Investment properties | 54,078 | 57,528 | | Financial assets at FVTPL | 534,990 | 408,118 | | Investments in debt instruments at amortised cost | 99,431 | 76,142 | | Total non-current assets | 781,114 | 735,051 | | **Current assets** | | | | Cash and cash equivalents | 375,756 | 263,618 | | Time deposits with original maturity over three months | 382,204 | 488,904 | | Total current assets | 891,422 | 880,401 | | **Current liabilities** | | | | Trade and other payables | 41,631 | 33,584 | | Total current liabilities | 48,523 | 33,584 | | **Total equity** | 1,623,692 | 1,581,546 | [Condensed Consolidated Statement of Cash Flows](index=4&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) This statement shows the Group's cash flows, highlighting a significant increase in cash from investing activities and overall cash position Condensed Consolidated Statement of Cash Flows (For the six months ended June 30) | Metric | 2025 (in thousands of USD) | 2024 (in thousands of USD) | | :--- | :--- | :--- | | Net cash from operating activities | 13,649 | 9,240 | | Net cash from/(used in) investing activities | 107,139 | (61,120) | | Net increase/(decrease) in cash and cash equivalents | 120,788 | (51,880) | | Cash and cash equivalents at end of period | 375,756 | 80,321 | [Notes to the Condensed Consolidated Financial Statements](index=5&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) This section details the basis of preparation, accounting standards, and provides breakdowns of revenue, profit, assets, and liabilities by segment [1. Basis of Preparation](index=5&type=section&id=1.%20Basis%20of%20Preparation) The financial statements are prepared in accordance with HKAS 34 and HKEX listing rules and should be read with the annual statements - The condensed consolidated financial statements are prepared in accordance with Hong Kong Accounting Standard 34 and Appendix D2 of the HKEX Listing Rules[7](index=7&type=chunk) - Certain comparative figures have been re-presented without material impact on the financial position, performance, or cash flows[7](index=7&type=chunk) [2. Adoption of New and Revised Hong Kong Financial Reporting Standards](index=5&type=section&id=2.%20Adoption%20of%20New%20and%20Revised%20Hong%20Kong%20Financial%20Reporting%20Standards) The Group adopted an amendment to HKAS 21 from January 1, 2025, which did not result in any accounting policy changes - The Group adopted the amendment to HKAS 21 "Lack of Exchangeability" from January 1, 2025[8](index=8&type=chunk) - The adoption of the new standard did not lead to changes in accounting policies or retrospective adjustments[8](index=8&type=chunk) [3. Segment Information](index=7&type=section&id=3.%20Segment%20Information) The Group operates three segments, with proprietary investments contributing the highest profit and financial services holding the most assets - The Group has three operating segments: financial services, proprietary investments, and real estate[9](index=9&type=chunk) Segment Revenue and Profit (For the six months ended June 30, in thousands of USD) | Segment | 2025 Revenue | 2024 Revenue | 2025 Profit | 2024 Profit | | :--- | :--- | :--- | :--- | :--- | | Financial services business | 1,073 | 932 | 5,489 | 6,664 | | Proprietary investment business | 12,698 | 16,136 | 49,046 | 35,451 | | Real estate business | 172 | 1,086 | 446 | 554 | | Total | 13,943 | 18,154 | 54,981 | 42,669 | Segment Assets and Liabilities (As at June 30, in thousands of USD) | Segment | 2025 Assets | 2024 Assets | 2025 Liabilities | 2024 Liabilities | | :--- | :--- | :--- | :--- | :--- | | Financial services business | 340,302 | 329,485 | 41,379 | 33,485 | | Proprietary investment business | 1,130,496 | 1,191,366 | 264 | 106 | | Real estate business | 173,936 | 66,265 | 155 | 3 | | Total | 1,644,734 | 1,587,116 | 41,798 | 33,594 | [4. Revenue](index=8&type=section&id=4.%20Revenue) Total revenue decreased to $13.9 million, primarily due to lower interest income from deposits and dividend income from financial products Revenue Analysis (For the six months ended June 30, in thousands of USD) | Revenue Source | 2025 | 2024 | | :--- | :--- | :--- | | Interest income | 12,268 | 14,725 | | Dividend and distribution income | 892 | 2,115 | | Various fees and commission income | 780 | 587 | | Rental income | 3 | 727 | | **Total Revenue** | **13,943** | **18,154** | - **Total revenue decreased by $4.2 million** year-over-year, mainly due to reduced interest income from financial institution deposits and dividend income from financial products[12](index=12&type=chunk) [5. Taxation](index=8&type=section&id=5.%20Taxation) An interest withholding tax expense of $45,000 was recognized in the first half of 2025, compared to zero in the prior year period - An interest withholding tax expense of **$45,000** was recognized in H1 2025 related to a Canadian subsidiary, compared to zero in the prior year[13](index=13&type=chunk) [6. Profit for the Period](index=8&type=section&id=6.%20Profit%20for%20the%20Period) Profit for the period includes adjustments for items such as depreciation and a significant net exchange gain of $6.6 million Adjustments to Profit for the Period (For the six months ended June 30, in thousands of USD) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Depreciation of property, plant and equipment | 330 | 344 | | Net exchange (gain)/loss | (6,607) | 1,822 | | Interest income from bank deposits | (9,977) | (14,383) | [7. Dividends](index=9&type=section&id=7.%20Dividends) A final dividend of HK$0.12 per share for the year ended December 31, 2024, was declared, totaling approximately $6.9 million - A final dividend of **HK$0.12 per share** for the year ended December 31, 2024, was declared, totaling approximately **$6.9 million**[15](index=15&type=chunk) [8. Earnings Per Share](index=9&type=section&id=8.%20Earnings%20Per%20Share) Basic and diluted earnings per share increased to 13.15 US cents in the first half of 2025 from 8.95 US cents in the prior year period Earnings Per Share Calculation (For the six months ended June 30) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Profit for the period attributable to owners of the Company (in thousands of USD) | 59,277 | 40,349 | | Weighted average number of ordinary shares | 450,814,079 | 450,814,079 | | Basic and diluted earnings per share (US cents) | 13.15 | 8.95 | [9. Investments in Various Financial Assets](index=10&type=section&id=9.%20Investments%20in%20Various%20Financial%20Assets) The Group's financial asset portfolio grew, driven by an increase in unlisted investment funds, while unlisted equity investments declined Investments in Various Financial Assets (As at June 30, in thousands of USD) | Investment Type | 2025 | 2024 | | :--- | :--- | :--- | | Investments in debt instruments at amortised cost | 143,954 | 116,918 | | Investments in perpetual notes at FVTPL | – | 3,540 | | Investments in perpetual notes designated at FVTOCI | 3,059 | 3,070 | | Financial assets at FVTPL | 558,714 | 428,219 | | - Unlisted investment funds | 447,584 | 312,911 | | - Unlisted equity investments | 40,020 | 48,876 | | - Listed equity investments | 66,610 | 61,932 | - The fair value of financial assets at FVTPL **increased by $39.3 million**, primarily from unlisted investment funds[23](index=23&type=chunk) - The fair value of unlisted equity investments **decreased by $9.8 million**, mainly due to changes in unobservable inputs like the price-to-sales ratio in market-based valuations[23](index=23&type=chunk)[24](index=24&type=chunk) [10. Trade and Other Receivables and Deposits](index=13&type=section&id=10.%20Trade%20and%20Other%20Receivables%20and%20Deposits) Total receivables were $23.5 million, with most client receivables secured by securities collateral valued at $14.9 million Trade and Other Receivables and Deposits (As at June 30, in thousands of USD) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Receivables from securities trading business | 2,798 | 1,864 | | Other receivables and deposits | 20,683 | 22,178 | | Less: Impairment provision | (19) | (18) | | **Total** | **23,462** | **24,024** | - Most receivables from clients are secured by client securities with a fair value of **$14.9 million**[27](index=27&type=chunk)[28](index=28&type=chunk) - The expected credit loss provision for trade and other receivables is **$19,000**[28](index=28&type=chunk) [11. Trade and Other Payables](index=14&type=section&id=11.%20Trade%20and%20Other%20Payables) Total payables increased to $41.7 million, driven by higher amounts due to clients from the securities trading business Trade and Other Payables (As at June 30, in thousands of USD) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Payables to clients from securities trading business | 40,515 | 31,844 | | Total trade payables | 40,899 | 32,805 | | Other payables and accrued expenses | 765 | 813 | | **Total** | **41,664** | **33,618** | - Payables to clients mainly consist of cash held for clients at banks and brokers, most of which is repayable on demand[29](index=29&type=chunk) [12. Share Capital](index=15&type=section&id=12.%20Share%20Capital) The Company's share capital structure remained unchanged, with 450,814,079 ordinary shares issued and fully paid Share Capital Structure (As at June 30) | Item | Number of Shares | Value (in thousands of USD) | | :--- | :--- | :--- | | Authorised Share Capital (Ordinary shares of HK$0.01 each) | 1,000,000,000 | 1,282 | | Issued and Fully Paid Share Capital (Ordinary shares of HK$0.01 each) | 450,814,079 | 598 | [Interim Dividend](index=16&type=section&id=Interim%20Dividend) The Board of Directors does not recommend the declaration and payment of an interim dividend for the six months ended June 30, 2025 - The Board does not recommend the declaration and payment of an interim dividend for the first half of 2025[32](index=32&type=chunk) [Management Discussion and Analysis](index=16&type=section&id=Management%20Discussion%20and%20Analysis) This section reviews the Group's business performance and financial position, detailing its investment strategy and segment analysis [Business Review and Performance](index=17&type=section&id=Business%20Review%20and%20Performance) The Group's net profit grew 47% year-over-year to $59.3 million, driven by fair value gains on financial assets and exchange gains Financial Highlights (For the six months ended June 30, in thousands of USD) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Revenue | 13,943 | 18,154 | | Other income | 9,996 | 14,433 | | Administrative expenses | (4,285) | (3,347) | | Fair value changes on financial assets and perpetual notes at FVTPL | 36,318 | 12,741 | | Profit before tax | 59,324 | 40,348 | | Profit for the period | 59,279 | 40,348 | - **Net profit after tax increased to $59.3 million** (2024: $40.3 million), mainly due to a **$23.6 million increase in fair value gains** on financial assets and an **$8.4 million increase in exchange gains**[34](index=34&type=chunk) - Revenue **decreased by $4.2 million**, primarily due to lower interest income from bank deposits and dividend distributions from financial products[34](index=34&type=chunk) - Administrative expenses **increased by $1.0 million to $4.3 million**, reflecting business expansion and an enhanced incentive scheme for financial services client managers[35](index=35&type=chunk) [Summary of the Group's Investment Strategy](index=18&type=section&id=Summary%20of%20the%20Group's%20Investment%20Strategy) The Group employs a diversified multi-asset strategy focused on income generation and capital appreciation, with a prudent allocation to fixed income - The primary investment strategy is a **diversified multi-asset approach** aimed at generating income and achieving capital appreciation[36](index=36&type=chunk) - Approximately **40% of financial assets are allocated to fixed income investments**, split evenly between bonds and cash to mitigate market volatility[36](index=36&type=chunk) [Segment Analysis](index=18&type=section&id=Segment%20Analysis) The Group's segments showed varied performance, with strong profit growth in proprietary investments offsetting declines in other areas [(i) Financial Services Business](index=20&type=section&id=(i)%20Financial%20Services%20Business) The financial services business saw lower pre-tax profit but achieved growth in commission and margin financing income - The financial services business includes securities trading and brokerage, margin financing, money lending, and asset management[37](index=37&type=chunk) Financial Services Business Key Financial Data (For the six months ended June 30, in thousands of USD) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Profit before tax | 5,489 | 6,664 | | Commission and handling fees from financial services | 728 | 539 | | Interest income from margin financing | 59 | 43 | | Interest income from money lending business | 234 | 302 | - Growth in commission and handling fees was driven by **increased trading volume**, while higher margin financing interest income was due to the recovery of the Hong Kong stock market[40](index=40&type=chunk)[42](index=42&type=chunk) - The Group has **ceased providing higher-risk unsecured loans**, focusing instead on secured and mortgage lending[42](index=42&type=chunk) [(ii) Proprietary Investment Business](index=22&type=section&id=(ii)%20Proprietary%20Investment%20Business) The proprietary investment business delivered a significant profit increase, primarily driven by fair value gains on financial assets - The objective of the proprietary investment business is to identify opportunities for better risk-weighted returns and capital appreciation[46](index=46&type=chunk) Proprietary Investment Business Key Financial Data (For the six months ended June 30, in thousands of USD) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Segment profit | 49,046 | 35,451 | | Increase in fair value of financial assets and perpetual notes at FVTPL | 25,000 | N/A | Non-Cash Financial Asset Holdings (As at June 30, in thousands of USD) | Asset Type | 2025 | 2024 | | :--- | :--- | :--- | | Listed stocks | 66,610 | 61,932 | | Listed bonds | 147,413 | 123,528 | | Unlisted investment funds | 447,584 | 312,911 | | Unlisted equity investments | 40,020 | 48,876 | | Unlisted exchangeable notes | 4,500 | 4,500 | | **Total** | **706,127** | **551,747** | - The NovoAstrum investment had a fair value of **$90.7 million**, representing 5.4% of total assets, and recorded an unrealized gain of **$19.8 million** during the period[49](index=49&type=chunk) [(iii) Real Estate Business](index=23&type=section&id=(iii)%20Real%20Estate%20Business) The real estate business experienced a decline in profit due to a challenging Hong Kong commercial property market - The real estate business recorded a **pre-tax profit of $0.4 million** (2024: $0.6 million)[51](index=51&type=chunk) Hong Kong Commercial Office Rental Income and Operating Profit (For the six months ended June 30, in thousands of USD) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Rental income | 3 | 700 | | Operating (loss)/profit | (3) | 700 | - The Group invests in high-quality Canadian commercial properties and senior housing through unlisted investment funds, generating **$0.2 million in distribution income**[52](index=52&type=chunk) - The Group is actively seeking acquisition opportunities in high-quality commercial properties in Hong Kong, the Greater Bay Area, North America, and Europe to achieve geographical diversification[53](index=53&type=chunk) [Review of the Group's Financial Position](index=24&type=section&id=Review%20of%20the%20Group's%20Financial%20Position) The Group's total assets and net assets both increased, driven by growth in financial asset investments and period profits Summary of the Group's Financial Position (As at June 30, in thousands of USD) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Total assets | 1,672,536 | 1,615,452 | | Other liabilities | (48,844) | (33,906) | | Net assets | 1,623,692 | 1,581,546 | - **Non-current assets increased by $46.0 million** to $781.1 million, mainly due to a net increase of $126.9 million in investments in financial assets at FVTPL[55](index=55&type=chunk) - **Current assets increased by $11.0 million** to $891.4 million, primarily due to a net increase of $112.1 million in cash and cash equivalents, offset by a net decrease of $106.7 million in time deposits[55](index=55&type=chunk) - **Net assets increased by $42.2 million** to $1,623.7 million, mainly due to the profit of $59.3 million for the period[56](index=56&type=chunk) [Cash Flows, Liquidity and Financial Resources](index=25&type=section&id=Cash%20Flows,%20Liquidity%20and%20Financial%20Resources) The Group's cash position strengthened significantly, with positive cash flows from both operating and investing activities and zero gearing Cash Flow Summary (For the six months ended June 30, in thousands of USD) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Net cash from operating activities | 13,649 | 9,240 | | Net cash from/(used in) investing activities | 107,139 | (61,120) | | Net increase/(decrease) in cash and cash equivalents | 120,788 | (51,880) | | Cash and cash equivalents at end of period | 375,756 | 80,321 | - Net cash from investing activities was **$107.1 million**, primarily from **$17.8 million in interest received** from bank deposits and **$206.7 million from the withdrawal of time deposits**[58](index=58&type=chunk) - The Group's **gearing ratio was zero**, and it had no outstanding bank borrowings[58](index=58&type=chunk) [Capital Structure of the Group](index=25&type=section&id=Capital%20Structure%20of%20the%20Group) The Group's capital structure remained stable, with equity attributable to owners standing at $1,623.5 million - Equity attributable to the owners of the Company was **$1,623.5 million**, with no significant changes in the capital structure[59](index=59&type=chunk) [Contingent Liabilities](index=25&type=section&id=Contingent%20Liabilities) The Group had no contingent liabilities as of June 30, 2025 - The Group had **no contingent liabilities** at the end of the period[60](index=60&type=chunk) [Material Acquisitions and Disposals](index=27&type=section&id=Material%20Acquisitions%20and%20Disposals) The Group made two significant investments totaling $50.0 million in multi-strategy investment funds during the first half of 2025 - On March 28, 2025, the Group subscribed for Class L-C-1 shares of Atlas Enhanced Fund, Ltd. for **$30.0 million**[61](index=61&type=chunk) - The Atlas fund employs various investment strategies, including equity long/short, fixed income, and macro strategies[62](index=62&type=chunk) - On April 23, 2025, the Group subscribed for Class A USD shares of Capula Multi Strategy Fund Limited for **$20.0 million**[63](index=63&type=chunk) - The Capula fund is a multi-strategy fund focused on developing innovative investment strategies with low correlation to traditional markets[63](index=63&type=chunk) [Exchange Rate Fluctuation Risk and Hedging Policy](index=27&type=section&id=Exchange%20Rate%20Fluctuation%20Risk%20and%20Hedging%20Policy) The Group's exposure to foreign exchange risk is minimal due to its primary transaction currencies being the pegged USD and HKD - The Group's business is primarily conducted in USD and HKD, and with the HKD pegged to the USD, **foreign exchange risk is minimal**[65](index=65&type=chunk) - Management will continuously monitor foreign exchange risk and consider hedging policies[66](index=66&type=chunk) [Pledge of Assets](index=27&type=section&id=Pledge%20of%20Assets) The Group had no pledged assets as of June 30, 2025 - The Group had **no assets pledged** at the end of the period[67](index=67&type=chunk) [Business Outlook](index=27&type=section&id=Business%20Outlook) The Group is optimistic for the second half of 2025, focusing on strategic growth in margin financing, property acquisitions, and lending [Financial Services Business Outlook](index=28&type=section&id=Financial%20Services%20Business%20Outlook) The Group will strengthen its core financial services by capitalizing on the recovering IPO market and expanding its client base - Global economic growth and accommodative monetary policies are expected to benefit the Hong Kong financial market, with a rising Hang Seng Index and a strong recovery in the IPO market[69](index=69&type=chunk)[70](index=70&type=chunk) - The Group will strategically and proactively expand its **IPO margin financing business** and establish partnerships with small and medium-sized brokerage firms[70](index=70&type=chunk) - The Group will strengthen its margin financing business, expand its securities trading and brokerage client base, and leverage its industry network to drive growth in share placement activities[71](index=71&type=chunk) - The Group will deepen relationships with institutional clients through tailored financial solutions and enhance discretionary investment services for high-net-worth clients[71](index=71&type=chunk) - The money lending business anticipates an increase in transactions and loan applications, while maintaining a rigorous credit risk management approach[72](index=72&type=chunk) [Proprietary Investment Business Outlook](index=29&type=section&id=Proprietary%20Investment%20Business%20Outlook) The Group will maintain a diversified investment portfolio, continuously reviewing it to identify attractive opportunities and optimize returns - The Group will maintain a **diversified investment portfolio**, including funds, fixed-income instruments, and listed/unlisted equities, and will regularly review it to identify attractive investment opportunities[73](index=73&type=chunk) [Real Estate Business Outlook](index=29&type=section&id=Real%20Estate%20Business%20Outlook) The Group will actively seek to acquire high-quality commercial properties in local and international markets to enhance returns - The Group will actively seek opportunities to acquire high-quality commercial properties and other real estate assets, focusing on opportunities with attractive yields and capital appreciation potential in both local and international markets[73](index=73&type=chunk) - The Group will continue to promote geographical diversification of its assets, comprehensively evaluate new business opportunities, and enhance returns on existing properties through active post-investment management[73](index=73&type=chunk) [Overall Outlook](index=29&type=section&id=Overall%20Outlook) The Group will focus on four strategic priorities to capitalize on market momentum and achieve sustainable, superior returns - The Group will capitalize on market upside through four strategic priorities: **expanding margin financing, promoting share placements, acquiring high-quality commercial real estate, and prudently growing the loan portfolio**[74](index=74&type=chunk) - The Group remains focused on delivering sustainable, superior returns through decisive execution and flexible capital allocation[74](index=74&type=chunk) [Corporate Governance and Other Information](index=29&type=section&id=Corporate%20Governance%20and%20Other%20Information) This section covers human resources, corporate governance compliance, and details regarding the Board of Directors and audit committee review [Human Resources](index=29&type=section&id=Human%20Resources) As of June 30, 2025, the Group employed 43 staff in Hong Kong, offering competitive, performance-based remuneration packages - As of June 30, 2025, the Group employed **43 employees** in Hong Kong[75](index=75&type=chunk) - Employee remuneration is competitive and performance-based, with benefits including salary, medical plans, group insurance, MPF, and performance bonuses[75](index=75&type=chunk) [Events After the Reporting Period](index=29&type=section&id=Events%20After%20the%20Reporting%20Period) No significant events requiring disclosure have occurred since the end of the reporting period - As of the date of this announcement, there were **no significant subsequent events** that require disclosure[76](index=76&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=29&type=section&id=Purchase,%20Sale%20or%20Redemption%20of%20the%20Company's%20Listed%20Securities) The Company did not engage in any purchase, sale, or redemption of its own listed securities during the period - Neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities during the period[77](index=77&type=chunk) [Compliance with the Corporate Governance Code](index=30&type=section&id=Compliance%20with%20the%20Corporate%20Governance%20Code) The Company has adopted and complied with all applicable code provisions of the Corporate Governance Code - The Company has adopted and complied with all applicable code provisions of the **Corporate Governance Code**[78](index=78&type=chunk) [Model Code for Securities Transactions by Directors](index=30&type=section&id=Model%20Code%20for%20Securities%20Transactions%20by%20Directors) The Company has adopted the Model Code for securities transactions, and all directors have confirmed their compliance - The Company has adopted the **Model Code for Securities Transactions by Directors**, and all directors have confirmed their compliance with it[79](index=79&type=chunk) [Audit Committee](index=30&type=section&id=Audit%20Committee) The Audit Committee, composed of three independent non-executive directors, has reviewed the 2025 interim report - The Audit Committee, comprising three independent non-executive directors, has reviewed the Group's accounting principles, auditing, internal controls, and financial reporting matters[80](index=80&type=chunk) - The **2025 interim report has been reviewed** by the Audit Committee[80](index=80&type=chunk) [Interim Report](index=30&type=section&id=Interim%20Report) The 2025 interim report will be sent to shareholders and published on the HKEX and company websites by September 30, 2025 - The 2025 interim report will be dispatched to shareholders and published on the HKEX and company websites on or before September 30, 2025[81](index=81&type=chunk) [Board of Directors](index=30&type=section&id=Board%20of%20Directors) The Board of Directors consists of one non-executive director, two executive directors, and three independent non-executive directors - The Board of Directors comprises **1 non-executive director, 2 executive directors, and 3 independent non-executive directors**[83](index=83&type=chunk)

Financial Statements [Unaudited Interim Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=2&type=section&id=%E6%9C%AA%E7%B6%93%E5%AF%A9%E6%A0%B8%E4%B8%AD%E6%9C%9F%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E6%90%8D%E7%9B%8A%E8%A1%A8%E5%8F%8A%E5%85%B6%E4%BB%96%E7%B6%9C%E5%90%88%E6%94%B6%E7%9B%8A%E8%A1%A8) Revenue decreased by **23.30%** to **4.08 billion yuan**, but profit attributable to owners increased by **20.09%** to **838 million yuan**, with basic earnings per share rising to **RMB 0.260** Key Financial Performance for H1 2025 (Thousand Yuan (RMB)) | Indicator | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Revenue | 4,079,978 | 5,319,241 | | Operating Profit | 1,330,153 | 1,324,953 | | Profit Before Tax | 1,070,209 | 902,973 | | Interim Profit | 882,575 | 732,672 | | Profit Attributable to Owners of the Company | 838,351 | 698,095 | | Basic and Diluted Earnings Per Share | RMB 0.260 | RMB 0.228 | - Revenue decreased by **23.30%** year-on-year, while profit attributable to owners of the company increased by **20.09%**[5](index=5&type=chunk)[7](index=7&type=chunk) [Unaudited Interim Condensed Consolidated Statement of Financial Position](index=4&type=section&id=%E6%9C%AA%E7%B6%93%E5%AF%A9%E6%A0%B8%E4%B8%AD%E6%9C%9F%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81%E8%A1%A8) As of June 30, 2025, total assets reached **61.32 billion yuan**, a slight increase from year-end 2024, while total liabilities decreased to **40.65 billion yuan**, optimizing the debt-to-capital ratio, and total owners' equity rose to **20.67 billion yuan** H1 2025 Financial Position Summary (Thousand Yuan (RMB)) | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Assets | 61,322,641 | 61,032,031 | | Total Liabilities | 40,649,820 | 41,536,405 | | Total Equity | 20,672,821 | 19,495,626 | - As of June 30, 2025, the Group's current liabilities exceeded current assets by approximately **293 million yuan**, but the Board considers the preparation of financial information on a going concern basis to be appropriate[14](index=14&type=chunk)[15](index=15&type=chunk) Notes to Financial Statements [General Information of the Company](index=6&type=section&id=1.%20%E5%85%AC%E5%8F%B8%E5%9F%BA%E6%9C%AC%E6%83%85%E5%86%B5) Sichuan Expressway Company Limited is a joint stock company registered in China, primarily engaged in investment holding, construction, management, and operation of expressways and toll bridges, gas station operations, and electric vehicle charging services, with Shu Dao Investment Group as the controlling shareholder - The company's principal businesses include investment holding, construction, management, and operation of expressways and toll bridges, operation of gas stations along expressways, and electric vehicle charging services[10](index=10&type=chunk)[13](index=13&type=chunk) - Shu Dao Investment Group Co., Ltd. is the controlling shareholder of the company[10](index=10&type=chunk) [Basis of Preparation and Updates to Accounting Policies](index=6&type=section&id=2.%20%E7%B7%A8%E8%A3%BD%E5%9F%BA%E7%A4%8E%E5%92%8C%E6%9C%83%E8%A8%88%E6%94%BF%E7%AD%96%E6%9B%B4%E6%96%B0) This interim condensed consolidated financial information is prepared in accordance with HKAS 34, consistent with prior year accounting policies, with the first-time adoption of new and revised HKAS, such as amendments to HKAS 21, expected to have no material impact, and disclosure of unadopted new standards - This interim condensed consolidated financial information is prepared in accordance with Hong Kong Accounting Standard 34 'Interim Financial Reporting'[12](index=12&type=chunk) - The Group has first adopted amendments to HKAS 21 'Lack of Exchangeability', which are not expected to have a material impact on prior, current, or future periods[16](index=16&type=chunk) New and Revised Standards Not Yet Adopted | Standard, Amendment or Interpretation Issue | Effective Date | | :--- | :--- | | Amendments to HKFRS 9 and HKFRS 7: Classification and Measurement of Financial Instruments | January 1, 2026 | | HKFRS 18: Presentation and Disclosure in Financial Statements | January 1, 2027 | [Basis of Preparation](index=6&type=section&id=2.1%20%E7%B7%A8%E8%A3%BD%E5%9F%BA%E7%A4%8E) - The interim condensed consolidated financial information for this period is prepared in accordance with Hong Kong Accounting Standard 34 'Interim Financial Reporting'[12](index=12&type=chunk) - As of June 30, 2025, the Group's current liabilities exceeded current assets by approximately **293 million yuan**, but the Board considers the preparation of financial information on a going concern basis to be appropriate[14](index=14&type=chunk)[15](index=15&type=chunk) [Changes in Accounting Policies](index=7&type=section&id=2.2%20%E6%9C%83%E8%A8%88%E6%94%BF%E7%AD%96%E8%AE%8A%E6%9B%B4) - The Group has first adopted amendments to HKAS 21 'Lack of Exchangeability' for the reporting period beginning January 1, 2025, with no material impact expected[16](index=16&type=chunk) New and Revised Standards Not Yet Adopted | Standard, Amendment or Interpretation Issue | Effective Date | | :--- | :--- | | Amendments to HKFRS 9 and HKFRS 7: Classification and Measurement of Financial Instruments | January 1, 2026 | | HKFRS 18: Presentation and Disclosure in Financial Statements | January 1, 2027 | [Segment Information](index=9&type=section&id=3.%20%E5%88%86%E9%83%A8%E4%BF%A1%E6%81%AF) The Group is divided into six reportable operating segments: expressways, construction services, transportation services, transportation logistics, new energy technology, and other segments, with performance assessed based on adjusted profit before tax, excluding centrally managed assets and liabilities - The Group has six reportable operating segments: expressways, construction services, transportation services, transportation logistics, new energy technology, and other segments (primarily financial investments)[18](index=18&type=chunk)[19](index=19&type=chunk) - Segment performance is assessed based on adjusted profit before tax, excluding bank deposit interest income, dividend income, other unallocated income and gains, and unallocated expenses from headquarters and the company[18](index=18&type=chunk) - All of the Group's external revenue and non-current assets are located in mainland China, thus no geographical segment information is presented[25](index=25&type=chunk) - During the reporting period, no single customer accounted for **10%** or more of the Group's total revenue[26](index=26&type=chunk) [Segment Introduction](index=9&type=section&id=3.%20(i)%20%E5%88%86%E9%83%A8%E4%BB%8B%E7%B4%B9) - The expressway segment comprises the operation of expressways and a high-grade toll bridge in mainland China[19](index=19&type=chunk) - The construction services segment consists of construction and upgrade services under service concession arrangements and construction contracts[19](index=19&type=chunk) - The new energy technology segment comprises electric vehicle charging services and the sale of charging modules[19](index=19&type=chunk) [Details of Segment Information](index=10&type=section&id=3.%20(ii)%20%E5%88%86%E9%83%A8%E4%BF%A1%E6%81%AF) Segment Revenue and Profit for the Six Months Ended June 30, 2025 (Thousand Yuan (RMB)) | Segment | Revenue | Profit | | :--- | :--- | :--- | | Expressways | 2,273,610 | 1,069,331 | | Construction Services | 693,687 | 35,261 | | Transportation Services | 1,036,753 | 93,061 | | Transportation Logistics | 27,300 | 2,155 | | New Energy Technology | 48,628 | 21,007 | | Others | – | 32,415 | | **Total** | **4,079,978** | **1,253,230** | Segment Revenue and Profit for the Six Months Ended June 30, 2024 (Thousand Yuan (RMB)) | Segment | Revenue | Profit | | :--- | :--- | :--- | | Expressways | 2,325,982 | 955,192 | | Construction Services | 1,783,253 | 38,021 | | Transportation Services | 1,041,825 | 118,885 | | Transportation Logistics | 107,614 | 346 | | New Energy Technology | 60,567 | 15,289 | | Others | – | 20,242 | | **Total** | **5,319,241** | **1,147,975** | - As of June 30, 2025, the expressway segment's total assets amounted to **54.965 billion yuan**, accounting for **94.2%** of total segment assets[23](index=23&type=chunk) [Geographical Information](index=14&type=section&id=3.%20(iii)%20%E5%9C%B0%E5%9F%9F%E4%BF%A1%E6%81%AF) - All of the Group's external revenue and non-current assets are derived from and located in mainland China, thus no geographical segment information is presented[25](index=25&type=chunk) [Major Customer Information](index=14&type=section&id=3.%20(iv)%20%E4%B8%BB%E8%A6%81%E5%AE%A2%E6%88%B7%E4%BF%A1%E6%81%AF) - During the reporting period, no single customer accounted for **10%** or more of the Group's total revenue[26](index=26&type=chunk) [Revenue](index=14&type=section&id=4.%20%E6%94%B6%E5%85%A5) The Group's total revenue for H1 2025 was **4.08 billion yuan**, a **23.30%** year-on-year decrease, with customer contract revenue of **4.053 billion yuan** primarily from tolls, construction services, and product sales, recognized at a point in time or over time Revenue Analysis (Thousand Yuan (RMB)) | Revenue Source | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Revenue from contracts with customers | 4,052,542 | 5,302,153 | | Gross rental income from operating leases | 27,436 | 17,088 | | **Total Revenue** | **4,079,978** | **5,319,241** | Customer Contract Revenue by Type of Goods and Services for the Six Months Ended June 30, 2025 (Thousand Yuan (RMB)) | Type of Goods and Services | Amount | | :--- | :--- | | Toll fees | 2,273,610 | | Construction services | 693,687 | | Product sales | 1,006,007 | | Electric vehicle charging services | 32,413 | | Others | 46,825 | | **Total** | **4,052,542** | - In H1 2025, revenue recognized at a point in time amounted to **3.315 billion yuan**, and revenue recognized over time amounted to **738 million yuan**[28](index=28&type=chunk) [Other Income and Gains](index=17&type=section&id=5.%20%E5%85%B6%E4%BB%96%E6%94%B6%E5%85%A5%E5%92%8C%E6%94%B6%E7%9B%8A) Total other income and gains for H1 2025 were **89.121 million yuan**, a **13.30%** year-on-year decrease, mainly due to lower bank deposit interest income and reduced fair value gains on financial assets measured at fair value through profit or loss Other Income and Gains (Thousand Yuan (RMB)) | Item | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Total Other Income | 86,652 | 97,128 | | Total Other Gains | 2,469 | 5,660 | | **Total** | **89,121** | **102,788** | - Interest income from construction contracts was **36.728 million yuan**, government grants were **15.877 million yuan**, and bank deposit interest income was **11.215 million yuan**[30](index=30&type=chunk) [Finance Costs](index=18&type=section&id=6.%20%E8%B2%A1%E5%8B%99%E6%88%90%E6%9C%AC) Total finance costs for H1 2025 were **299 million yuan**, a significant **31.90%** year-on-year decrease, primarily due to reduced interest on bank and other borrowings, lower medium-term note interest, and increased capitalized interest Finance Costs Analysis (Thousand Yuan (RMB)) | Item | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Interest on bank and other borrowings | 522,484 | 673,578 | | Interest on corporate bonds | 19,030 | 4,663 | | Interest on medium-term notes | 4,307 | 28,752 | | Interest on lease liabilities | 2,474 | 2,593 | | **Total Interest Expense** | **548,295** | **709,586** | | Less: Capitalized interest | (249,136) | (270,385) | | **Finance Costs** | **299,159** | **439,201** | - The capitalization rate for finance costs ranged from **2.87%** to **3.05%** (compared to **3.47%** to **3.65%** in the same period of 2024)[31](index=31&type=chunk) [Profit Before Tax](index=19&type=section&id=7.%20%E9%99%A4%E7%A8%85%E5%89%8D%E6%BA%A2%E5%88%A9) Profit before tax for H1 2025 was **1.07 billion yuan**, an **18.52%** year-on-year increase, influenced by staff costs, depreciation and amortization, construction costs, and product sales costs, alongside a **22.378 million yuan** reversal of impairment losses on trade and other receivables Key Components of Profit Before Tax (Thousand Yuan (RMB)) | Item | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Staff costs | 475,371 | 514,406 | | Depreciation and amortization expenses | 641,072 | 641,127 | | Construction costs | 686,797 | 1,781,147 | | Cost of product sales | 878,477 | 987,483 | | Reversal of impairment losses on trade and other receivables | (22,378) | – | [Income Tax Expense](index=20&type=section&id=8.%20%E6%89%80%E5%BE%97%E7%A8%85%E8%B2%BB%E7%94%A8) Income tax expense for H1 2025 was **188 million yuan**, a **10.18%** year-on-year increase, primarily due to profit changes, with some subsidiaries benefiting from a **15%** preferential tax rate under the Western Development Strategy Income Tax Expense (Thousand Yuan (RMB)) | Item | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Current income tax | 177,139 | 166,855 | | Deferred income tax | 10,495 | 3,446 | | **Total** | **187,634** | **170,301** | - The company and certain subsidiaries and associates (e.g., Chengdu Airport Expressway) are entitled to a **15%** preferential corporate income tax rate, valid until **2030**[37](index=37&type=chunk)[38](index=38&type=chunk) [Earnings Per Share Attributable to Ordinary Equity Holders of the Company](index=21&type=section&id=9.%20%E6%9C%AC%E5%85%AC%E5%8F%B8%E6%99%AE%E9%80%9A%E8%82%A1%E8%82%A1%E6%AC%8A%E6%8C%81%E6%9C%89%E8%80%85%E6%87%89%E4%BD%B5%E6%AF%8F%E8%82%A1%E7%9B%88%E5%88%A9) Basic earnings per share attributable to ordinary equity holders for H1 2025 was **RMB 0.260**, higher than **RMB 0.228** in H1 2024, with no dilutive earnings per share items Earnings Per Share (RMB) | Indicator | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Basic Earnings Per Share | 0.260 | 0.228 | - As of June 30, 2025, the number of ordinary shares issued by the company was **3,058,060,000**, consistent with the same period in 2024[39](index=39&type=chunk) [Property, Plant and Equipment, Right-of-Use Assets and Service Concession Arrangements](index=21&type=section&id=10.%20%E7%89%A9%E6%A5%AD%E3%80%81%E5%BB%A0%E6%88%BF%E5%8F%8A%E8%A8%AD%E5%82%99%EF%BC%8C%E4%BD%BF%E7%94%A8%E6%AC%8A%E8%B3%87%E7%94%A2%E4%BB%A5%E5%8F%8A%E6%9C%8D%E5%8B%99%E7%89%B9%E8%A8%B1%E7%B6%93%E7%87%9F%E5%AE%89%E6%8E%92) As of June 30, 2025, service concession arrangements increased to **52.177 billion yuan**, property, plant and equipment slightly decreased to **1.096 billion yuan**, and right-of-use assets decreased to **210 million yuan**, with multiple expressway tolling rights pledged for bank loans Carrying Value of Assets (Thousand Yuan (RMB)) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Property, Plant and Equipment | 1,095,740 | 1,119,891 | | Right-of-Use Assets | 210,392 | 237,876 | | Service Concession Arrangements | 52,176,942 | 51,821,189 | - As of June 30, 2025, the tolling rights for Chengle Expressway, Chengren Expressway, Tianqiong Expressway, Suiguang Expressway, Suixi Expressway, and Second Ring West Expressway were pledged for bank loans, with a total net carrying value of **50.927 billion yuan**[41](index=41&type=chunk) [Investments in Joint Ventures](index=22&type=section&id=11.%20%E6%96%BC%E5%90%88%E7%87%9F%E4%BC%81%E6%A5%AD%E4%B9%8B%E6%8A%95%E8%B3%87) As of June 30, 2025, the Group's investments in joint ventures decreased slightly to **27.598 million yuan** from year-end 2024, primarily due to a current period loss of **213 thousand yuan**, including Sichuan Chengyu Development Equity Investment Fund Center and Sichuan Zhongjiao Xintong Network Technology Co., Ltd Investments in Joint Ventures (Thousand Yuan (RMB)) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Share of Net Assets | 27,598 | 27,811 | - A current period loss of **213 thousand yuan** led to a decrease in the carrying value of investments in joint ventures[44](index=44&type=chunk) - Key joint ventures include Sichuan Chengyu Development Equity Investment Fund Center (holding **49.84%**) and Sichuan Zhongjiao Xintong Network Technology Co., Ltd. (holding **49%**)[43](index=43&type=chunk) [Investments in Associates](index=23&type=section&id=12.%20%E6%96%BC%E8%81%AF%E7%87%9F%E4%BC%81%E6%A5%AD%E4%B9%8B%E6%8A%95%E8%B3%87) As of June 30, 2025, the Group's investments in associates increased by **5.69%** to **512 million yuan** from year-end 2024, driven by current period earnings of **39.428 million yuan**, partially offset by declared dividends of **11.839 million yuan**, including Chengdu Airport Expressway and Sichuan Renshou Rural Commercial Bank Investments in Associates (Thousand Yuan (RMB)) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Carrying Value | 512,156 | 484,567 | - Current period earnings were **39.428 million yuan**, and declared dividends were **11.839 million yuan**[46](index=46&type=chunk) - Key associates include Chengdu Airport Expressway (holding **25%**), Sichuan Renshou Rural Commercial Bank Co., Ltd. (holding **7.474%**), and Chengdu Jiaotou International Supply Chain Management Co., Ltd. (holding **29%**)[45](index=45&type=chunk) [Financial Assets Designated at Fair Value Through Other Comprehensive Income](index=24&type=section&id=13.%20%E6%8C%87%E5%AE%9A%E7%82%BA%E4%BB%A5%E5%85%AC%E5%85%81%E5%83%B9%E5%80%BC%E8%A8%88%E9%87%8F%E4%B8%94%E5%85%B6%E8%AE%8A%E5%8B%95%E8%A8%88%E5%85%A5%E5%85%B6%E4%BB%96%E7%B6%9C%E5%90%88%E6%94%B6%E7%9B%8A%E7%9A%84%E9%87%91%E8%9E%8D%E8%B3%87%E7%94%A2) As of June 30, 2025, total financial assets designated at fair value through other comprehensive income were **362 million yuan**, a **22.26%** increase from year-end 2024, primarily comprising listed equity investments (China Everbright Bank and China Merchants Fund REITs) and unlisted equity investments Financial Assets Designated at Fair Value Through Other Comprehensive Income (Thousand Yuan (RMB)) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Listed Equity Investments | 351,155 | 284,937 | | Unlisted Equity Investments | 10,880 | 11,168 | | **Total** | **362,035** | **296,105** | - Listed equity investments primarily include China Everbright Bank and China Merchants Fund REITs[46](index=46&type=chunk) [Trade and Other Receivables](index=25&type=section&id=14.%20%E6%87%89%E6%94%B6%E8%B2%BF%E6%98%93%E6%AC%BE%E9%A0%85%E5%8F%8A%E5%85%B6%E4%BB%96%E6%87%89%E6%94%B6%E6%AC%BE) As of June 30, 2025, total trade and other receivables were **2.513 billion yuan**, a **4.50%** increase from year-end 2024, with net trade receivables of **1.527 billion yuan** and net other receivables and prepayments of **985 million yuan**, and trade receivables generally have credit terms of **20 days to 6 months** Trade and Other Receivables (Thousand Yuan (RMB)) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Net Trade Receivables | 1,527,496 | 1,557,853 | | Net Other Receivables and Prepayments | 985,289 | 846,810 | | **Total** | **2,512,785** | **2,404,663** | Aging Analysis of Trade Receivables (Net of Loss Allowance, Thousand Yuan (RMB)) | Aging | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Within 3 months | 105,855 | 316,967 | | Over 1 year | 1,199,889 | 1,200,460 | - As of June 30, 2025, **1.08 billion yuan** of trade receivables are recoverable in installments over **2 to 13 years**, bearing annual interest from **4.75%** to **8.5%**[48](index=48&type=chunk) - Among other receivables and prepayments, toll receivables amounted to **145 million yuan**, and deductible input VAT was **488 million yuan**[50](index=50&type=chunk) - The opening balance of impairment loss allowance for other receivables and prepayments was **110 million yuan**, with a reversal of **21.795 million yuan** in the current period, resulting in a closing balance of **88.652 million yuan**[51](index=51&type=chunk) [Trade and Other Payables](index=28&type=section&id=15.%20%E6%87%89%E4%BB%98%E8%B2%BF%E6%98%93%E6%AC%BE%E9%A0%85%E5%8F%8A%E5%85%B6%E4%BB%96%E6%87%89%E4%BB%98%E6%AC%BE) As of June 30, 2025, total trade and other payables were **2.171 billion yuan**, a **19.85%** decrease from year-end 2024, with trade payables of **35.761 million yuan** and other payables of **2.136 billion yuan**, primarily comprising construction payables, staff salaries, and benefits Trade and Other Payables (Thousand Yuan (RMB)) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Trade Payables | 35,761 | 202,673 | | Other Payables | 2,135,681 | 2,506,527 | | **Total** | **2,171,442** | **2,709,200** | - Trade payables are typically settled within **1 to 12 months** and are non-interest bearing[53](index=53&type=chunk) - Among other payables, construction payables amounted to **1.212 billion yuan**, primarily related to the Chengle Expressway and Tianqiong Expressway construction projects[54](index=54&type=chunk) [Bank and Other Interest-Bearing Borrowings](index=30&type=section&id=16.%20%E9%8A%80%E8%A1%8C%E5%8F%8A%E5%85%B6%E4%BB%96%E8%A8%88%E6%81%AF%E5%80%9F%E6%AC%BE) As of June 30, 2025, total bank and other interest-bearing borrowings were **37.763 billion yuan**, a slight decrease from year-end 2024, with non-current portion at **36.328 billion yuan** and current portion at **1.435 billion yuan**, weighted average annual interest rate decreased to **2.79%**, and multiple bank loans are secured by service concession arrangements, with some guaranteed by controlling shareholder Shu Dao Investment Bank and Other Interest-Bearing Borrowings (Thousand Yuan (RMB)) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Current Portion | 1,434,602 | 2,590,518 | | Non-Current Portion | 36,328,249 | 35,835,207 | | **Total** | **37,762,851** | **38,425,725** | - As of June 30, 2025, the weighted average annual interest rate for bank and other borrowings was **2.79%** (compared to **3.55%** as of December 31, 2024)[58](index=58&type=chunk) - Approximately **28.74 billion yuan** of bank loans are secured by service concession arrangements (e.g., tolling rights for Chengle Expressway, Tianqiong Expressway)[60](index=60&type=chunk) - Approximately **9.064 billion yuan** of bank loans and **102 million yuan** of other borrowings are guaranteed by Shu Dao Investment[61](index=61&type=chunk) [Dividends](index=33&type=section&id=17.%20%E8%82%A1%E6%81%AF) The Board resolved not to declare an interim dividend for H1 2025, while the 2024 final dividend of **RMB 0.29** per share was fully paid on July 4, 2025 - The Board resolved not to declare an interim dividend for H1 2025[62](index=62&type=chunk) - The 2024 final dividend of **RMB 0.29** per share was fully paid on July 4, 2025[62](index=62&type=chunk) Management Discussion and Analysis [Performance Overview](index=34&type=section&id=%E6%A5%AD%E7%B8%BE%E6%A6%82%E8%A7%88) In H1 2025, amidst a stable macroeconomic environment and external uncertainties, the Group achieved growth in several economic indicators through project advancement, improved management, and cost reduction, despite a **23.30%** year-on-year decrease in total revenue to **4.08 billion yuan**, with profit attributable to owners increasing by **20.09%** to **838 million yuan** - In H1 2025, macroeconomic policies showed effectiveness, and economic operations continued a stable and positive trend, but external instability and uncertainties were numerous, leading to insufficient effective demand[63](index=63&type=chunk) Key Performance Indicators for H1 2025 (Thousand Yuan (RMB)) | Indicator | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Revenue | 4,079,978 | 5,319,241 | | Profit Attributable to Owners of the Company | 838,351 | 698,095 | | Basic Earnings Per Share | RMB 0.260 | RMB 0.228 | | Total Assets | 61,322,641 | 61,032,031 (Year-end 2024) | | Net Assets | 20,672,821 | 19,495,626 (Year-end 2024) | [Business Review and Analysis](index=35&type=section&id=%E6%A5%AD%E5%8B%99%E5%9B%9E%E9%A1%A7%E8%88%87%E5%88%86%E6%9E%90) This section reviews the Group's toll road and bridge operations, analyzing the impact of economic environment, policy changes, and road network construction on toll revenue, and details the progress of major investment and financing projects such as the Chengle Expressway expansion and Tianqiong Expressway BOT project - In H1 2025, the Group's road toll revenue was **2.274 billion yuan**, a **2.25%** year-on-year decrease, accounting for **55.73%** of operating revenue, an increase of **12 percentage points** year-on-year[66](index=66&type=chunk) - Regarding the economic environment, China's GDP grew by **5.3%** year-on-year in H1, and Sichuan Province's GDP grew by **5.6%**, providing a stable foundation for the Group's operations[66](index=66&type=chunk) - Policy factors include strict implementation of the 'Green Channel' policy for fresh agricultural products, the Five-Year Action Plan for a Strong Transportation Nation, the continuation of Sichuan Province's expressway toll preferential policies, and the toll exemption policy for hydrogen-powered vehicles[68](index=68&type=chunk)[69](index=69&type=chunk)[70](index=70&type=chunk)[71](index=71&type=chunk) - Road network changes and construction impacted traffic diversion on some expressways, such as Chengren Expressway affected by the opening of Tianfu Airport Expressway branch and Tianfu Avenue Renshou section, and Second Ring West Expressway by surrounding capacity contraction and high-speed rail diversion, while Suiguang-Suixi Expressway saw increased toll revenue due to traffic flow transfer from surrounding road upgrades[72](index=72&type=chunk)[73](index=73&type=chunk)[74](index=74&type=chunk) [Operating Performance of Toll Road and Bridge Business](index=35&type=section&id=1.%20%E6%9C%AC%E9%9B%86%E5%9C%98%E6%94%B6%E8%B2%BB%E8%B7%AF%E6%A9%8B%E6%A5%AD%E5%8B%99%E7%B6%93%E7%87%9F%E6%83%85%E6%B3%81) H1 2025 Expressway Toll Revenue (Thousand Yuan (RMB)) | Item | H1 2025 | H1 2024 | Increase/Decrease (%) | | :--- | :--- | :--- | :--- | | Chengyu Expressway | 422,012 | 419,848 | 0.52 | | Chengya Expressway | 492,375 | 504,116 | (2.33) | | Chengren Expressway | 402,305 | 433,559 | (7.21) | | Chengle Expressway | 295,986 | 293,275 | 0.92 | | Chengbei Exit Expressway | 52,787 | 50,306 | 4.93 | | Suiguang Expressway | 136,081 | 131,484 | 3.50 | | Suixi Expressway | 89,250 | 85,734 | 4.10 | | Second Ring West Expressway | 382,814 | 407,660 | (6.09) | - In H1 2025, the Group's road toll revenue was approximately **2.274 billion yuan**, a **2.25%** decrease compared to the same period last year[66](index=66&type=chunk) [Major Investment and Financing Projects and Significant Acquisitions, Disposals](index=39&type=section&id=2.%20%E6%9C%AC%E9%9B%86%E5%9C%98%E9%87%8D%E5%A4%A7%E6%8A%95%E8%9E%8D%E8%B3%87%E9%A0%85%E7%9B%AE%E5%8F%8A%E9%87%8D%E5%A4%A7%E6%94%B6%E8%B3%BC%E3%80%81%E5%87%BA%E5%94%AE%E4%BA%8B%E9%A0%85%E6%83%85%E6%B3%81) - The Chengle Expressway expansion project has an estimated total investment of **25.15 billion yuan**, with cumulative investment of approximately **14.377 billion yuan** as of June 30, 2025[75](index=75&type=chunk) - The Tianqiong Expressway BOT project has an estimated total investment of approximately **8.685 billion yuan**, was fully opened to traffic on September 13, 2024, and had cumulative investment of approximately **7.002 billion yuan** as of June 30, 2025[76](index=76&type=chunk) [Analysis of Operating Results and Financial Position](index=41&type=section&id=%E7%B6%93%E7%87%9F%E6%88%90%E6%9E%9C%E5%8F%8A%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81%E5%88%86%E6%9E%90) This section analyzes the Group's H1 2025 operating results and financial position, showing increased profit attributable to owners despite lower total revenue, driven by cost control and efficiency, maintaining a stable asset and liability structure, shifting from net cash outflow to inflow, and demonstrating strong borrowing capacity - The Group's operating results show decreased revenue but increased profit attributable to the parent company, while the financial position summary indicates growth in assets and equity, and a decrease in liabilities[78](index=78&type=chunk)[79](index=79&type=chunk) - Finance costs decreased by **22.73%**, primarily due to lower loan interest rates[84](index=84&type=chunk) - Operating activities generated a net cash inflow of **230 million yuan**, a significant improvement from the net outflow in the prior period[96](index=96&type=chunk) - The debt-to-capital ratio improved to **66.29%** (from **68.06%** at year-end 2024)[94](index=94&type=chunk) [Summary of Operating Results](index=41&type=section&id=%E6%9C%AC%E9%9B%86%E5%9C%98%E7%B6%93%E7%87%9F%E6%88%90%E6%9E%9C%E6%91%98%E8%A6%81) H1 2025 Summary of Operating Results (Thousand Yuan (RMB)) | Indicator | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Revenue | 4,079,978 | 5,319,241 | | Profit Before Tax | 1,070,209 | 902,973 | | Profit Attributable to Owners of the Company | 838,351 | 698,095 | | Earnings Per Share Attributable to Owners of the Company (RMB) | 0.260 | 0.228 | [Summary of Financial Position](index=41&type=section&id=%E6%9C%AC%E9%9B%86%E5%9C%98%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81%E6%91%98%E8%A6%81) H1 2025 Summary of Financial Position (Thousand Yuan (RMB)) | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Assets | 61,322,641 | 61,032,031 | | Total Liabilities | 40,649,820 | 41,536,405 | | Equity Attributable to Owners of the Company | 19,578,018 | 18,404,170 | | Equity Attributable to Owners of the Company Per Share (RMB) | 6.402 | 6.018 | [Revenue Analysis](index=42&type=section&id=%E6%94%B6%E5%85%A5) Year-on-Year Change in Segment Revenue (Thousand Yuan (RMB)) | Segment | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Expressways | 2,273,610 | 2,325,982 | | Construction Services | 693,687 | 1,783,253 | | Transportation Logistics | 27,300 | 107,614 | | New Energy Technology | 48,628 | 60,567 | - The decrease in construction services revenue was primarily due to reduced construction contract revenue from the Chengle Expressway expansion project and the Tianqiong Expressway BOT project[81](index=81&type=chunk) - The decrease in transportation logistics revenue was mainly due to the company suspending the North-to-South Grain Transportation project[81](index=81&type=chunk) [Analysis of Other Income and Gains](index=44&type=section&id=%E5%85%B6%E4%BB%96%E6%94%B6%E5%85%A5%E5%92%8C%E6%94%B6%E7%9B%8A) - Total other income and gains decreased by **13.30%** year-on-year, primarily affected by reduced deposit interest income and changes in the fair value of financial assets[82](index=82&type=chunk) [Operating Expenses Analysis](index=44&type=section&id=%E7%B6%93%E7%87%9F%E8%B2%BB%E7%94%A8) Year-on-Year Change in Operating Expenses (Thousand Yuan (RMB)) | Item | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Construction Contract Costs | 650,437 | 1,760,325 | | Depreciation and Amortization Expenses | 641,072 | 641,127 | | Cost of Sales for Oil Products and Other Businesses | 878,477 | 987,483 | | Charging Service Costs | 12,881 | 24,653 | - Depreciation and amortization expenses remained largely stable, primarily due to the full amortization of the Chengbei Exit Expressway concession right on June 30, 2024, resulting in a year-on-year decrease in amortization expense[83](index=83&type=chunk) [Finance Costs Analysis](index=45&type=section&id=%E8%9E%8D%E8%B3%87%E6%88%90%E6%9C%AC) - Total finance costs decreased by **22.73%** year-on-year, primarily due to lower loan interest rates in the current period[84](index=84&type=chunk) [Income Tax Analysis](index=45&type=section&id=%E6%89%80%E5%BE%97%E7%A8%85%E9%A0%85) - Income tax expense increased by **10.18%** year-on-year to **188 million yuan**, primarily due to increased profit in the current period[85](index=85&type=chunk) [Profit Analysis](index=45&type=section&id=%E6%BA%A2%E5%88%A9) Year-on-Year Change in Segment Profit (Thousand Yuan (RMB)) | Segment | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Expressways | 1,069,331 | 955,192 | | Construction Services | 35,261 | 38,021 | | Transportation Logistics | 2,155 | 346 | | New Energy Technology | 21,007 | 15,289 | | Others | 32,415 | 20,242 | - Expressway segment profit increased by **11.95%**, primarily due to reduced finance costs and lower amortization of the Chengbei Exit Expressway concession right[86](index=86&type=chunk) - Transportation logistics segment profit significantly increased by **522.83%**, mainly due to increased investment income from associate Chengdu Jiaotou International Supply Chain Management Co., Ltd[87](index=87&type=chunk) [Financial Position Analysis (Assets and Liabilities)](index=46&type=section&id=%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81%E5%88%86%E6%9E%90) - Non-current assets increased by **1.23%** from year-end 2024, primarily due to an **899 million yuan** increase in the carrying value of service concession arrangements and a **27.376 million yuan** increase in investments in associates and joint ventures[88](index=88&type=chunk)[89](index=89&type=chunk) - Current assets decreased by **9.88%** from year-end 2024, mainly due to a **467 million yuan** decrease in cash and cash equivalents, as loan repayments exceeded new borrowings[90](index=90&type=chunk) - Financial assets designated at fair value through other comprehensive income increased by **65.93 million yuan**, primarily due to fair value changes in China Everbright Bank equity investments and China Merchants Fund REITs[89](index=89&type=chunk) [Capital Structure](index=48&type=section&id=%E8%B3%87%E6%9C%AC%E7%B5%90%E6%A7%8B) Capital Structure (Thousand Yuan (RMB)) | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Assets | 61,322,641 | 61,032,031 | | Total Liabilities | 40,649,820 | 41,536,405 | | Debt-to-Capital Ratio | 66.29% | 68.06% | [Cash Flow Analysis](index=48&type=section&id=%E7%8F%BE%E9%87%91%E6%B5%81%E9%87%8F) Cash Flow (Thousand Yuan (RMB)) | Activity Type | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Net Cash Inflow/(Outflow) from Operating Activities | 230,170 | (63,962) | | Net Cash Outflow from Investing Activities | (8,228) | (111,637) | | Net Cash Outflow/(Inflow) from Financing Activities | (688,689) | 991,721 | | Cash and Cash Equivalents at End of Period | 2,490,509 | 2,957,256 (Year-end 2024) | - The increase in net cash inflow from operating activities was primarily due to higher profit before tax and reduced cash outflow from new service concession arrangements[96](index=96&type=chunk) - The increase in net cash outflow from financing activities was mainly due to a significant increase in cash outflows for repayment of bank loans, other loans, medium-term notes, and lease principal payments[98](index=98&type=chunk) [Foreign Exchange Fluctuation Risk](index=50&type=section&id=%E5%A4%96%E5%8C%AF%E6%B3%A2%E5%8B%95%E9%A2%A8%E9%9A%AA) - Except for purchasing HKD to distribute dividends to H-shareholders, the Group's operating income and expenses and capital expenditures are primarily settled in RMB, thus foreign exchange fluctuations have no material impact on the Group's performance[99](index=99&type=chunk) [Borrowing and Repayment Capacity](index=50&type=section&id=%E5%80%9F%E8%B2%B8%E5%8F%8A%E5%84%AA%E5%82%B5%E8%83%BD%E5%8A%9B) Borrowing Composition and Repayment Terms (Thousand Yuan (RMB)) | Item | Total | Within 1 Year | 1 to 5 Years | Over 5 Years | | :--- | :--- | :--- | :--- | :--- | | Bank Loans | 35,414,948 | 1,209,940 | 9,911,139 | 24,293,869 | | Medium-Term Notes and Corporate Bonds | 2,100,000 | 100,000 | 2,000,000 | – | | Other Borrowings and Lease Liabilities | 214,401 | 91,160 | 117,306 | 5,935 | | Accrued Interest | 33,502 | 33,502 | – | – | | **Total** | **37,762,851** | **1,434,602** | **12,028,445** | **24,299,804** | - The Group has obtained and is applying for conditional loan credit lines from financial institutions totaling **32.26 billion yuan** for the next one to two years[101](index=101&type=chunk) - The Group has formed syndicates with several banks to provide medium- and long-term borrowings for the Chengren Expressway, Suiguang Expressway, Suixi Expressway, Chengle Expressway expansion, and Tianqiong Expressway BOT projects[101](index=101&type=chunk)[102](index=102&type=chunk)[103](index=103&type=chunk)[104](index=104&type=chunk) [Pledge of Assets](index=52&type=section&id=%E8%B3%87%E7%94%A2%E6%8A%B5%E6%8A%BC) Asset Pledge Status (Thousand Yuan (RMB)) | Expressway | Net Carrying Value of Tolling Rights | Amount of Pledged Loans | | :--- | :--- | :--- | | Chengle Expressway | 14,712,498 | 7,489,870 | | Chengren Expressway | 5,590,107 | 734,958 | | Suiguang-Suixi Expressway | 10,781,813 | 5,707,000 | | Tianqiong Expressway | 7,002,338 | 5,743,740 | | Second Ring West Expressway | 12,839,915 | 9,064,000 | | **Total** | **50,926,671** | **28,739,568** | [Business Development Plan](index=53&type=section&id=%E6%A5%AD%E5%8B%99%E7%99%BC%E5%B1%95%E8%A8%88%E5%8A%83) The company's H2 2025 work plan includes focusing on core businesses (accelerating Chengle expansion, expanding road asset scale), seizing policy opportunities for diversified development (capital operations, service area operations, hydrogen and new energy businesses), establishing market-oriented operating concepts, building a refined cost control system, and strengthening safety and risk prevention - Focus on core businesses, accelerate the Chengle Expressway expansion project, and expand road asset scale through strategies such as original road upgrade and expansion, asset integration, and acquisition of quality road assets[107](index=107&type=chunk) - Seize policy opportunities, leverage the investment platform for diversified industrial layout to deepen capital operations, explore market-oriented paths for hydrogen energy applications, and expand innovative new energy business models such as energy storage and power sales[108](index=108&type=chunk) - Establish market-oriented operating concepts, with value creation as the core, build a refined resource allocation system, and cultivate proactive market expansion capabilities[109](index=109&type=chunk) - Continuously deepen the 'cost reduction and efficiency improvement' strategy, promote the implementation of a standardized cost control system, and strengthen the awareness of 'business-finance integration'[110](index=110&type=chunk) - Strengthen the bottom line of safety and risk prevention, enhance hazard investigation and emergency response, optimize strategic positioning, and build a risk resistance system supported by core businesses[111](index=111&type=chunk) [Purchase, Redemption or Sale of Listed Securities of the Company and its Subsidiaries](index=55&type=section&id=%E8%B3%BC%E8%B2%B7%E3%80%81%E8%B6%91%E5%9B%9E%E6%88%96%E5%87%BA%E5%94%AE%E6%9C%AC%E5%85%AC%E5%8F%B8%E5%8F%8A%E9%99%84%E5%B1%AC%E5%85%AC%E5%8F%B8%E7%9A%84%E4%B8%8A%E5%B8%82%E8%AD%89%E5%88%B8) During the reporting period, neither the company nor its subsidiaries purchased, redeemed, or sold any of the company's listed securities, and as of the end of the reporting period, the company held no treasury shares - During the reporting period, neither the company nor its subsidiaries purchased, redeemed, or sold any listed securities[112](index=112&type=chunk) - As of the end of the reporting period, the company held no treasury shares[113](index=113&type=chunk) Corporate Governance and Other Information [Employees, Remuneration and Training](index=55&type=section&id=%E5%93%A1%E5%B7%A5%E3%80%81%E8%96%AA%E9%85%AC%E5%8F%8A%E5%9F%B9%E8%A8%93) As of June 30, 2025, the Group had **4,478** employees, with production staff being the largest group, remuneration linked to operating performance, strict adherence to labor protection policies, and emphasis on multi-level training to enhance overall employee quality Group Employee Composition (As of June 30, 2025) | Category | Number of Employees | | :--- | :--- | | Total Employees | 4,478 | | Production Personnel | 2,849 | | Technical Personnel | 1,082 | | Financial Personnel | 106 | | Administrative Personnel | 441 | - Employee remuneration is linked to the company's operating performance, comprising basic salary and performance-based pay, adhering to the policy of 'salary based on position, adjusted with position changes, and rewarded by performance'[116](index=116&type=chunk) - The company fully contributes to employees' pension, medical, unemployment, work injury, maternity insurance, critical illness mutual aid supplementary insurance, and accidental injury insurance, as well as housing provident fund and enterprise annuity[117](index=117&type=chunk) - During the reporting period, the Group organized **6,674** training sessions to enhance employees' overall quality and professional skills[118](index=118&type=chunk) [Corporate Governance](index=57&type=section&id=%E5%85%AC%E5%8F%B8%E7%AE%A1%E6%B2%BB) The company has established a governance structure comprising the general meeting of shareholders, the Board of Directors, and management, with specialized committees such as the Audit Committee and Strategy and Sustainable Development Committee, complying with the HKEX Corporate Governance Code and CSRC Guidelines on Corporate Governance of Listed Companies, and adopting a code of conduct for directors' and supervisors' securities transactions no less exacting than the Model Code - The company has established a comprehensive corporate governance structure, including the general meeting of shareholders, the Board of Directors, management, and specialized committees under the Board (Audit, Strategy and Sustainable Development, Nomination, Remuneration and Appraisal Committees)[119](index=119&type=chunk) - The company complies with the requirements of the HKEX Corporate Governance Code and the CSRC Guidelines on Corporate Governance of Listed Companies, and has adopted a code of conduct for directors' and supervisors' securities transactions no less exacting than the Model Code[120](index=120&type=chunk)[122](index=122&type=chunk) - The Audit Committee, composed of three independent non-executive directors, has reviewed and confirmed the Group's unaudited interim condensed financial information and interim results report for the six months ended June 30, 2025[121](index=121&type=chunk) [Events After Reporting Period](index=58&type=section&id=%E5%A0%B1%E5%91%8A%E6%9C%9F%E5%BE%8C%E4%BA%8B%E9%A0%85) In accordance with the new Company Law and CSRC regulations, the company proposed to abolish the Supervisory Committee and transfer its functions to the Board's Audit Committee, which was approved at the EGM on August 13, 2025, with four supervisors ceasing their duties on the same day - In accordance with the new Company Law and CSRC regulations, the company proposed to abolish the Supervisory Committee and transfer its functions to the Board's Audit Committee[123](index=123&type=chunk) - The proposal was approved at the EGM on August 13, 2025, and Wang Yao, Gao Ying, Li Tao, and Lu Xiaoyan ceased to be supervisors on the same day[124](index=124&type=chunk) [Major Transactions and Connected Transactions](index=59&type=section&id=%E4%B8%BB%E8%A6%81%E4%BA%A4%E6%98%93%E5%8F%8A%E9%97%9C%E8%81%AF%E4%BA%A4%E6%98%93) The Board resolved to bid for the Chengya Expressway expansion project and entered into cooperation agreements with China Huaxi, Jiaojian Group, Luqiao Group, and Gaolu Information to establish a project company, with an estimated total investment of approximately **28.548 billion yuan**, and the project company was established on August 13, 2025, constituting a major and connected transaction approved by independent shareholders - The Board resolved to bid for the Chengya Expressway expansion project and has become the first-ranked successful bidder[125](index=125&type=chunk)[126](index=126&type=chunk) - To develop the Chengya Expressway expansion project, the company entered into cooperation agreements with China Huaxi, Jiaojian Group, Luqiao Group, and Gaolu Information to establish a project company[126](index=126&type=chunk) - The Chengya Expressway expansion project has a total length of **159.115 kilometers** and an estimated total investment of approximately **28.548 billion yuan**, with the project company established on August 13, 2025[127](index=127&type=chunk) [Publication of Interim Report](index=59&type=section&id=%E5%88%8A%E7%99%BC%E4%B8%AD%E6%9C%9F%E5%A0%B1%E5%91%8A) The company's interim report for the six months ended June 30, 2025, will be published on the HKEX and the company's website in due course in accordance with the Listing Rules and Articles of Association, with printed copies dispatched to shareholders as required - The interim report will be published on the HKEX and the company's website in due course in accordance with the Listing Rules and Articles of Association[128](index=128&type=chunk) Definitions [Definitions](index=60&type=section&id=%E9%87%8B%E7%BE%A9) This section provides definitions for key terms, road project names, company and subsidiary names, and other related concepts used in the report to ensure clear understanding of the content - This section provides definitions for key terms, road project names, company and subsidiary names, and other related concepts used in the report[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)[134](index=134&type=chunk)[135](index=135&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 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。 Wei Yuan Holdings Limited 偉源控股有限公司 （於開曼群島註冊成立的有限公司） （股份代號：1343） 截 至 二 零 二 五 年 六 月 三 十 日 止 六 個 月 之 中 期 業 績 公 告 偉 源 控 股 有 限 公 司（「本 公 司」）董 事（「董 事」）會（「董 事 會」）呈 列 本 公 司 及 其 附 屬 公 司（統 稱「本 集 團」）截 至 二 零 二 五 年 六 月 三 十 日 止 六 個 月 之 未 經 審 計 中 期 業 績 連 同 二 零 二 四 年 同 期 之 比 較 數 字 如 下： 中 期 簡 明 綜 合 全 面 收 益 表 截 至 六 月 三 十 日 止 六 個 月 二 ...

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。 華電國際電力股份有限公司 Huadian Power International Corporation Limited* （在中華人民共和國（「中國」）註冊成立之中外合資股份有限公司） （股份代碼：1071） 二零二五年中期業績公告 財務及業務摘要 華電國際電力股份有限公司（「本公司」）董事會（「董事會」）謹此公佈本公司及其 附屬公司（「本集團」）按《企業會計準則》編製的截至二零二五年六月三十日止六個 月期間（「本期間」）未經審計的中期合併財務業績摘要。 1 • 完成發電量約為120.62百萬兆瓦時； • 完成上網電量約為113.29百萬兆瓦時； • 實現營業收入約為人民幣599.53億元； • 實現歸屬於本公司股東的淨利潤約為人民幣39.04億元； • 基本每股收益約為人民幣0.33元。 本公司第十屆董事會第二十五次會議建議二零二五年中期派發股息每股人民幣 0.09元（含稅），以總股本11,611, ...

[Company Information](index=3&type=section&id=Company%20Information) This section details the composition of the company's board of directors, supervisory board, and various committees, including executive, non-executive, independent non-executive directors, and supervisors, along with their terms and positions [Board of Directors and Committees](index=3&type=section&id=Board%20of%20Directors%20and%20Committees) This section lists the members of the company's Board of Directors, Supervisory Board, and various committees, including executive, non-executive, independent non-executive directors, and supervisors, noting their terms and roles - Board members include Executive Directors Mr. Xiao Guowei (Chairman and Chief Strategy Officer) and Mr. Hou Yu (President), as well as several Non-executive Directors and Independent Non-executive Directors[5](index=5&type=chunk) - The lists of members for the Strategy Committee, Audit Committee, Remuneration and Appraisal Committee, and Nomination Committee are also provided, with Ms. Zhang He serving as the Chair of the Audit Committee[5](index=5&type=chunk) [Professional Advisors and Contact Information](index=3&type=section&id=Professional%20Advisors%20and%20Contact%20Information) This section provides detailed contact and basic information for the company, including joint company secretaries, authorized representatives, auditors, compliance advisors, legal advisors (Hong Kong and China), registered office, principal place of business in Hong Kong, H share registrar, company website, stock code, listing date, and principal bankers - The company's auditor is Ernst & Young, and the compliance advisor is Max Times Capital Limited[5](index=5&type=chunk) - The company was listed on the Hong Kong Stock Exchange on November 8, 2024, with stock code 2551[7](index=7&type=chunk) - The registered office, headquarters, and principal place of business in China are located at No. 33 Huanshi Avenue South, Nansha District, Guangzhou, Guangdong Province, China[7](index=7&type=chunk) [Management Discussion and Analysis](index=5&type=section&id=Management%20Discussion%20and%20Analysis) This section provides an overview of the Group's business performance, industry conditions, and future development strategies for the first half of 2025 [Business Review](index=5&type=section&id=Business%20Review) This section outlines the Group's business performance, industry conditions, and future development strategies for the first half of 2025, focusing on smart visual products and system solutions with "LED+" technology - The company is a provider of smart visual products and system solutions, with "LED+" as its core technology, covering automotive smart vision, high-end lighting, and new display businesses[9](index=9&type=chunk) - In the first half of 2025, the Chinese automotive industry faced a period of deep adjustment, with price wars extending to the supply chain, putting pressure on component manufacturers like automotive lighting suppliers[10](index=10&type=chunk) - The new display market is driven by innovative technologies such as Mini LED and local dimming, with Mini LED TV sales penetration increasing from 16% in the same period last year to over **40%** during the "618" sales event[12](index=12&type=chunk) 2025 First Half Key Financial Performance | Metric | 2025 H1 (RMB thousand) | 2024 H1 (RMB thousand) | Year-on-year Change | | :--- | :--- | :--- | :--- | | Operating Revenue | 1,113,000 | 1,071,000 | +3.9% | | Net Profit | 11,232 | 49,779 | -77.4% | - Net profit decreased primarily due to reduced profits in the smart automotive lighting business segment (driven by intensified competition in the automotive industry leading to lower average selling prices) and increased strategic investments in the construction of Guangzhou Lingwei Vision Greater Bay Area headquarters and R&D base[14](index=14&type=chunk) [The Company's Industry](index=5&type=section&id=The%20Company%27s%20Industry) This section outlines the company's industry of smart visual products and system solutions, highlighting its "LED+" core technology, and analyzing the current status and development opportunities in automotive smart vision, high-end lighting, and new display markets - The company has successfully transformed from a traditional LED manufacturer into a provider of smart visual products and systems, leveraging "LED+" technology to penetrate high-value and high-growth markets[9](index=9&type=chunk) - LED smart headlights, with their energy efficiency, long lifespan, and safety features like ADB, have seen rapid annual penetration growth and are evolving from single lighting components into core carriers for sensing, decision-making, and interaction[10](index=10&type=chunk) - The high-end lighting and new display markets benefit from advancements in LED chip technology, environmental policies, and increasing consumer demand for high-contrast, high-resolution display products[11](index=11&type=chunk)[12](index=12&type=chunk) [Business Review and Outlook](index=6&type=section&id=Business%20Review%20and%20Outlook) During the reporting period, the Group's operating revenue increased by 3.9% year-on-year to RMB 1.113 billion, but net profit decreased by 77.4% year-on-year to RMB 11.232 million, mainly due to reduced profits in the automotive smart vision lighting business and increased strategic investments 2025 First Half Business Segment Revenue and Year-on-year Change | Business Segment | 2025 H1 Revenue (RMB 100 million) | Year-on-year Change | | :--- | :--- | :--- | | Automotive Smart Vision | 4.19 | -9.3% | | New Display | 3.54 | +30.3% | | High-end Lighting | 3.40 | +0.6% | - The decline in automotive smart vision business revenue was primarily due to intensified competition in the automotive industry leading to lower average selling prices for complete lighting units, but sales of automotive-grade devices and modules significantly increased and are expected to enter a rapid growth phase[17](index=17&type=chunk) - New display business revenue grew significantly by **30.3%**, mainly driven by large-size TV backlight modules and Mini LED display technology applications, as well as national home appliance subsidy policies[18](index=18&type=chunk) - The Group has completed its full industry chain patent strategic layout, having obtained **446** authorized patents as of the end of the reporting period, including **125** invention patents[19](index=19&type=chunk) [Future Key R&D Directions](index=8&type=section&id=Future%20Key%20R%26D%20Directions) The company's future R&D will focus on smart visual products and systems, including automotive smart visual products, high-end lighting products, and new display products - Key R&D areas for automotive smart visual products include ten-thousand-pixel high-definition (HD) smart projection headlight systems, platform-based headlight ADB lens modules, and AR-HUD systems with large-screen TFTs featuring Local Dimming[22](index=22&type=chunk) - New display product R&D will focus on Mini LED new display backlight products and application solutions for large-size display panels, MicroLED technology for artificial intelligence (AI) display applications, and AR+AI glasses display modules[22](index=22&type=chunk) [Operations Management](index=8&type=section&id=Operations%20Management) The Group will comprehensively promote the application of Artificial Intelligence (AI) in product technology R&D, manufacturing, and operations management to strengthen intelligent manufacturing capabilities, optimize production processes, improve product yield, and build an intelligent cluster platform in the automotive smart vision field - Comprehensively promote the application of AI in R&D, production, and operations management to strengthen intelligent manufacturing capabilities, optimize production processes, and improve product yield[21](index=21&type=chunk) - Utilize AI technology to build an intelligent cluster platform in the automotive smart vision field, covering the entire product lifecycle from R&D to production and quality inspection by integrating multiple business-specific intelligent agents[21](index=21&type=chunk) [Financial Review](index=9&type=section&id=Financial%20Review) This section provides a detailed analysis of the Group's financial performance for the first half of 2025, including revenue structure, balance sheet, liquidity, capital structure, contingent liabilities, foreign exchange risk, capital expenditures, and significant investments 2025 First Half Total Revenue and Year-on-year Change | Metric | 2025 H1 (RMB million) | 2024 H1 (RMB million) | Year-on-year Change | | :--- | :--- | :--- | :--- | | Total Revenue | 1,112.6 | 1,070.9 | +3.9% | - Revenue growth primarily driven by increased revenue from the new display segment[24](index=24&type=chunk) [Revenue Structure](index=9&type=section&id=Revenue%20Structure) During the reporting period, the Group's total revenue was RMB 1,112.6 million, a 3.9% year-on-year increase, with significant growth in new display products and a decline in automotive smart vision products 2025 First Half Revenue by Product | Item | 2025 Revenue (RMB thousand) | Revenue Share (%) | 2024 Revenue (RMB thousand) | Revenue Share (%) | Year-on-year Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Automotive Smart Vision | 418,533 | 37.6% | 461,265 | 43.1% | (9.3)% | | New Display | 354,444 | 31.9% | 272,003 | 25.4% | 30.3% | | High-end Lighting | 339,643 | 30.5% | 337,628 | 31.5% | 0.6% | | Total | 1,112,620 | 100.0% | 1,070,896 | 100.0% | 3.9% | 2025 First Half Revenue by Place of Product Delivery | Item | 2025 Revenue (RMB thousand) | Revenue Share (%) | 2024 Revenue (RMB thousand) | Revenue Share (%) | Year-on-year Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Mainland China | 893,694 | 80.3% | 882,574 | 82.4% | 1.3% | | Overseas | 218,926 | 19.7% | 188,322 | 17.6% | 16.3% | | Total | 1,112,620 | 100.0% | 1,070,896 | 100.0% | 3.9% | [Financial Position](index=10&type=section&id=Financial%20Position) As of June 30, 2025, the Group's total assets were RMB 2,940.4 million, a 5.2% decrease from the end of 2024, with non-current liabilities significantly increasing due to deferred government grants 2025 June 30 Financial Position Overview | Metric | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Total Assets | 2,940.4 | 3,101.5 | -5.2% | | Non-current Assets | 1,074.7 | 1,060.0 | +1.4% | | Current Assets | 1,865.7 | 2,041.5 | -8.6% | | Total Liabilities | 1,667.7 | 1,806.7 | -7.7% | | Non-current Liabilities | 246.1 | 38.3 | +542.6% | | Current Liabilities | 1,421.6 | 1,768.4 | -19.6% | - Non-current liabilities significantly increased by **542.6%**, primarily due to the recognition of a **RMB 200 million** government grant as deferred income by subsidiary Lingwei Vision[29](index=29&type=chunk) [Liquidity and Financial Resources](index=11&type=section&id=Liquidity%20and%20Financial%20Resources) During the reporting period, the Group's net cash inflow from operating activities was RMB 4.0 million, a significant 94.2% year-on-year decrease, primarily due to payments for prior period procurement and increased R&D investment 2025 First Half Cash Flow from Operating Activities | Metric | 2025 H1 (RMB million) | 2024 H1 (RMB million) | Year-on-year Change | | :--- | :--- | :--- | :--- | | Net Cash Inflow from Operations | 4.0 | 69.2 | -94.2% | - The significant decrease in net cash inflow from operations was mainly due to payments for accounts payable related to a surge in orders in the second half of 2024, and increased R&D investment to maintain technological advantages[31](index=31&type=chunk) - As of June 30, 2025, bank and cash balances were approximately **RMB 544.0 million**, and total interest-bearing bank borrowings were approximately **RMB 190.1 million**, indicating sufficient liquidity[32](index=32&type=chunk)[33](index=33&type=chunk) [Capital Structure](index=11&type=section&id=Capital%20Structure) As of June 30, 2025, the Group's net debt-to-equity ratio was 14.9% and its asset-liability ratio was 56.7%, maintaining financial stability 2025 June 30 Capital Structure Metrics | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Net Debt-to-Equity Ratio | 14.9% | Not applicable | | Asset-Liability Ratio | 56.7% | 58.3% | - The Group monitors its capital structure using the asset-liability ratio and maintains financial stability to support continuous healthy business development[34](index=34&type=chunk) [Contingent Liabilities](index=11&type=section&id=Contingent%20Liabilities) As of June 30, 2025, the Group had no contingent liabilities - As of June 30, 2025, the Group had no contingent liabilities[35](index=35&type=chunk) [Foreign Exchange Risk](index=11&type=section&id=Foreign%20Exchange%20Risk) The Group's operations are primarily in Mainland China, with most assets and liabilities denominated in RMB, and it currently does not have a foreign currency hedging policy - The Group's business is primarily concentrated in Mainland China, with most assets and liabilities denominated in RMB, and it does not face significant foreign exchange risk[36](index=36&type=chunk) - Currently, no foreign currency hedging policy is adopted for foreign currency transactions, assets, and liabilities, but the Group believes it has sufficient foreign currency to meet its foreign exchange needs[36](index=36&type=chunk) [Capital Expenditures](index=11&type=section&id=Capital%20Expenditures) During the reporting period, the Group's capital expenditures amounted to RMB 99.2 million, primarily for capacity expansion and equipment upgrades, funded by internal resources, bank borrowings, and operating cash inflows 2025 First Half Capital Expenditures | Metric | Amount (RMB million) | | :--- | :--- | | Capital Expenditures | 99.2 | - Capital expenditures were mainly for capacity expansion and equipment upgrades to improve efficiency[37](index=37&type=chunk) [Capital Commitments](index=12&type=section&id=Capital%20Commitments) As of June 30, 2025, total contracted but unexpended capital commitments amounted to RMB 346.7 million, primarily for the construction of Guangzhou Lingwei 2025 June 30 Capital Commitments | Item | Amount (RMB million) | | :--- | :--- | | Total contracted but unexpended capital expenditures | 346.7 | - Primarily related to the construction investment of Guangzhou Lingwei[38](index=38&type=chunk) [Pledged Assets](index=12&type=section&id=Pledged%20Assets) As of June 30, 2025, the Group had pledged assets with a total carrying value of RMB 431.8 million for bank financing, including pledged bank deposits, trade receivables and bills, property, plant and equipment, and right-of-use assets 2025 June 30 Pledged Assets | Asset Category | Amount (RMB million) | | :--- | :--- | | Pledged and restricted bank deposits | 99.4 | | Trade receivables and bills receivable | 40.7 | | Property, plant and equipment | 235.8 | | Restricted right-of-use assets | 55.9 | | **Total** | **431.8** | [Significant Investments Held](index=12&type=section&id=Significant%20Investments%20Held) As of June 30, 2025, the Group had not made or held any significant investments - As of June 30, 2025, the Group had not made or held any significant investments[40](index=40&type=chunk) [Future Plans for Material Investments and Capital Assets](index=12&type=section&id=Future%20Plans%20for%20Material%20Investments%20and%20Capital%20Assets) As of the date of this interim report, the Group has no future plans for material external investments and capital assets - As of the date of this interim report, the Group has no future plans for material external investments and capital assets[41](index=41&type=chunk) [Material Acquisitions and Disposals of Subsidiaries, Associates and Joint Ventures](index=12&type=section&id=Material%20Acquisitions%20and%20Disposals%20of%20Subsidiaries%2C%20Associates%20and%20Joint%20Ventures) During the reporting period, the Group had no material acquisitions or disposals of subsidiaries, associates, or joint ventures - During the reporting period, the Group had no material acquisitions or disposals of subsidiaries, associates, or joint ventures[42](index=42&type=chunk) [Employees and Remuneration Policy](index=12&type=section&id=Employees%20and%20Remuneration%20Policy) As of June 30, 2025, the Group had 2,345 employees, with staff costs of approximately RMB 194,264 thousand, a 15.3% year-on-year increase Employee and Remuneration Overview | Metric | June 30, 2025 | December 31, 2024 | 2025 H1 (RMB thousand) | 2024 H1 (RMB thousand) | | :--- | :--- | :--- | :--- | :--- | | Total Employees | 2,345 people | 2,459 people | Not applicable | Not applicable | | Staff Costs | Not applicable | Not applicable | 194,264 | 168,519 | - Staff costs increased by **15.3%** year-on-year, and the company provides competitive remuneration packages, including basic salaries, performance bonuses, and contributions to statutory employee benefit plans[43](index=43&type=chunk)[44](index=44&type=chunk) - The company attracts talent through campus recruitment, internal and external referrals, and headhunters, and provides internal and external training to maintain and enhance employees' knowledge and skills[43](index=43&type=chunk)[44](index=44&type=chunk) [Financial Policy](index=12&type=section&id=Financial%20Policy) The Group has adopted a prudent financial management policy to ensure proper and effective recovery and allocation of funds, maintain sufficient liquidity, and closely monitor its liquidity position - Adopt a prudent financial management policy to ensure proper recovery and allocation of funds and prevent significant cash shortages[45](index=45&type=chunk) - Maintain sufficient liquidity to cover operating cash flows and administrative expenses, with the Board closely monitoring the liquidity position[45](index=45&type=chunk) [Corporate Governance and Other Information](index=13&type=section&id=Corporate%20Governance%20and%20Other%20Information) This section covers the company's corporate governance practices, changes in directors and supervisors, compliance with securities trading standards, use of global offering proceeds, audit committee review, dividend policy, and interests of directors and major shareholders [Corporate Governance Practices](index=13&type=section&id=Corporate%20Governance%20Practices) The company is committed to maintaining high standards of corporate governance, has adopted the Corporate Governance Code, and fully complied with all applicable code provisions during the reporting period - The company has adopted the Corporate Governance Code in Appendix C1 of the Listing Rules and fully complied with all applicable code provisions during the reporting period[47](index=47&type=chunk) [Changes in Information of Directors, Chief Executives and Supervisors](index=13&type=section&id=Changes%20in%20Information%20of%20Directors%2C%20Chief%20Executives%20and%20Supervisors) At the AGM on May 29, 2025, Mr. Xiao Guowei, Mr. Hou Yu, and others were elected as executive, non-executive, and independent non-executive directors for a three-year term - Mr. Xiao Guowei, Mr. Hou Yu, and others were elected as directors of the fourth session of the Board of Directors for a three-year term, effective from May 29, 2025[49](index=49&type=chunk) - Mr. Li Wenhong and Ms. Luo Xiaoyun were elected as non-employee representative supervisors of the fourth session of the Supervisory Board, and Mr. Ou Weineng was re-elected as an employee representative supervisor, both for a three-year term[49](index=49&type=chunk) - Mr. Hou Yu was re-elected as the President of the company on May 29, 2025[49](index=49&type=chunk) [Compliance with the Model Code for Securities Transactions by Directors and Supervisors](index=13&type=section&id=Compliance%20with%20the%20Model%20Code%20for%20Securities%20Transactions%20by%20Directors%20and%20Supervisors) The company has adopted the Model Code for Securities Transactions by Directors and Supervisors, and all directors and supervisors confirmed compliance during the reporting period - The company has adopted the Model Code in Appendix C3 of the Listing Rules, and all directors and supervisors confirmed compliance during the reporting period[51](index=51&type=chunk) - The company's senior management and relevant employees are also subject to the Model Code, prohibiting securities transactions when in possession of inside information[52](index=52&type=chunk) [Use of Proceeds from Global Offering](index=14&type=section&id=Use%20of%20Proceeds%20from%20Global%20Offering) The company received net proceeds of HKD 79.04 million from the global offering on November 8, 2024, with HKD 2.94 million utilized as of the reporting period end, mainly for technology innovation and working capital Use of Net Proceeds from Global Offering (As of June 30, 2025) | Use of Proceeds | Percentage of Total Net Proceeds | Net Proceeds Allocated (HKD million) | Utilized during Reporting Period (HKD million) | Unutilized during Reporting Period (HKD million) | | :--- | :--- | :--- | :--- | :--- | | Expansion of Automotive Smart Vision Production Capacity | 70% | 55.33 | 0 | 0 | | Technology Innovation and Product Upgrades | 20% | 15.81 | 1.54 | 14.27 | | Working Capital and General Corporate Purposes | 10% | 7.90 | 1.40 | 6.50 | | **Total** | **100%** | **79.04** | **2.94** | **20.77** | - The expected timetable for utilizing the unutilized net proceeds is on or before December 31, 2025[54](index=54&type=chunk) [Audit Committee](index=15&type=section&id=Audit%20Committee) The Audit Committee, composed of three independent non-executive directors with Ms. Zhang He as Chair, reviewed and approved the interim condensed consolidated financial statements and interim report for the six months ended June 30, 2025 - The Audit Committee is composed of three independent non-executive directors, with Ms. Zhang He as Chair, and Mr. Chen Zhiguang possesses the appropriate professional qualifications as required by Rule 3.10(2) of the Listing Rules[57](index=57&type=chunk) - The Committee reviewed and agreed with management on the interim condensed consolidated financial statements and interim report, and discussed accounting principles and practices[58](index=58&type=chunk) [Dividends](index=15&type=section&id=Dividends) The Board of Directors has resolved not to recommend the payment of an interim dividend for the six months ended June 30, 2025 - The Board of Directors has resolved not to recommend the payment of an interim dividend for the six months ended June 30, 2025[59](index=59&type=chunk) [Interests and Short Positions of Directors, Supervisors and Chief Executives in Shares, Underlying Shares and Debentures of the Company or its Associated Corporations](index=16&type=section&id=Interests%20and%20Short%20Positions%20of%20Directors%2C%20Supervisors%20and%20Chief%20Executives%20in%20Shares%2C%20Underlying%20Shares%20and%20Debentures%20of%20the%20Company%20or%20its%20Associated%20Corporations) As of June 30, 2025, directors and chief executives, including Mr. Xiao, Mr. Chen, Mr. Yuan, and Mr. Hou Yu, held long positions in the company's shares or underlying shares, with Mr. Xiao, Mr. Chen, Mr. Yuan, and their concert parties collectively holding a significant proportion of domestic unlisted shares and H shares Long Positions of Directors/Chief Executives in the Company's Shares (As of June 30, 2025) | Name of Director/Chief Executive | Capacity/Nature of Interest | Class of Shares | Number of Shares(1) | Approximate Percentage of Shareholding(1) (%) | | :--- | :--- | :--- | :--- | :--- | | Mr. Xiao | Interest held jointly with other parties | Domestic unlisted shares | 171,316,739 (L) | 31.89 | | | | H shares | 63,524,835 (L) | 11.83 | | Mr. Chen | Interest held jointly with other parties | Domestic unlisted shares | 171,316,739 (L) | 31.89 | | | | H shares | 63,524,835 (L) | 11.83 | | Mr. Yuan | Interest held jointly with other parties | Domestic unlisted shares | 171,316,739 (L) | 31.89 | | | | H shares | 63,524,835 (L) | 11.83 | | Mr. Hou Yu | Spouse's interest | Domestic unlisted shares | 3,500,000 (L) | 0.65 | | | | H shares | 1,500,000 (L) | 0.28 | - Mr. Xiao, Mr. Chen, Mr. Yuan, APTESS, and Giant Power Limited are parties acting in concert regarding their equity interests in Microcrystal Advanced Optoelectronics and/or the Company, pursuant to a concert party agreement dated January 1, 2021[61](index=61&type=chunk) [Interests and Short Positions of Substantial Shareholders and Other Persons in Shares and Underlying Shares of the Company](index=17&type=section&id=Interests%20and%20Short%20Positions%20of%20Substantial%20Shareholders%20and%20Other%20Persons%20in%20Shares%20and%20Underlying%20Shares%20of%20the%20Company) As of June 30, 2025, Microcrystal Advanced Optoelectronics, Jingyu Investment, Jingshi Investment, Jingling Investment, Jingrui Investment, APTESS, Ms. Lao, Giant Power Limited, Yaoning Technology, Ningbo Chunhua Qiushi, Angbu Investment, Mr. Li Xingxing, Yuetec Investment, Yuetec Group, Yuetec Holdings, and Su Yongchun, among other substantial shareholders and other persons, held interests in the company's shares or underlying shares Interests of Substantial Shareholders and Other Persons in the Company's Shares (As of June 30, 2025) | Name of Substantial Shareholder/Person | Capacity/Nature of Interest | Class of Shares | Number of Shares(1) | Approximate Percentage of Shareholding(1) (%) | | :--- | :--- | :--- | :--- | :--- | | Microcrystal Advanced Optoelectronics | Beneficial owner | Domestic unlisted shares | 149,824,524 (L) | 27.89 | | | | H shares | 52,483,352 (L) | 9.77 | | Yaoning Technology | Beneficial owner | Domestic unlisted shares | 34,291,286 (L) | 6.38 | | | | H shares | 34,291,287 (L) | 6.38 | | Guangdong Yuetec Financial Equity Investment Co., Ltd. | Beneficial owner | Domestic unlisted shares | 23,712,360 (L) | 4.41 | - Microcrystal Advanced Optoelectronics, Jingyu Investment, Jingling Investment, Jingrui Investment, and Jingshi Investment are parties acting in concert pursuant to a concert party agreement dated December 8, 2023[65](index=65&type=chunk)[74](index=74&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=20&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company%27s%20Listed%20Securities) During the reporting period, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities, and no treasury shares were held as of June 30, 2025 - During the reporting period, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities[72](index=72&type=chunk) - As of June 30, 2025, the company did not hold any treasury shares[73](index=73&type=chunk) [Continuing Disclosure Obligations under Rules 13.20, 13.21 and 13.22 of the Listing Rules](index=21&type=section&id=Continuing%20Disclosure%20Obligations%20under%20Rules%2013.20%2C%2013.21%20and%2013.22%20of%20the%20Listing%20Rules) During the reporting period, the company had no continuing disclosure obligations under Rules 13.20, 13.21, and 13.22 of the Listing Rules - During the reporting period, the company had no continuing disclosure obligations under Rules 13.20, 13.21, and 13.22 of the Listing Rules[76](index=76&type=chunk) [Pension Scheme](index=21&type=section&id=Pension%20Scheme) Employees of the Group's subsidiaries operating in Mainland China are required to participate in a central pension scheme operated by local municipal governments, with the company contributing a certain percentage of wage costs - Employees of subsidiaries in Mainland China are required to participate in a central pension scheme operated by local municipal governments, and the company is required to contribute a certain percentage of wage costs[77](index=77&type=chunk) [Share Incentive Schemes](index=21&type=section&id=Share%20Incentive%20Schemes) The company has Share Incentive Schemes I, II, and III, where participants indirectly hold awarded shares through employee shareholding platforms, subject to regulatory lock-up requirements and prescribed lock-up periods - The company has Share Incentive Schemes I, II, and III, where participants indirectly hold interests in incentive shares through employee shareholding platforms[78](index=78&type=chunk) - Awards under the Share Incentive Schemes are subject to regulatory lock-up requirements and prescribed lock-up periods (from the grant date until two years after the listing date)[78](index=78&type=chunk) - As of June 30, 2025, all restricted share units under the Share Incentive Schemes have been granted to eligible participants[79](index=79&type=chunk) [Events After the Reporting Period and Material Changes](index=21&type=section&id=Events%20After%20the%20Reporting%20Period%20and%20Material%20Changes) The directors confirm that there have been no material adverse changes in the company's financial or trading position or prospects, nor any events with a significant impact on the information contained in this interim report, from June 30, 2025, up to the date of this interim report - From June 30, 2025, up to the date of this interim report, there have been no material adverse changes in the company's financial or trading position or prospects[80](index=80&type=chunk) [Independent Review Report](index=22&type=section&id=Independent%20Review%20Report) This section presents the independent review report by Ernst & Young, confirming that nothing has come to their attention to suggest that the interim financial information is not prepared in all material respects in accordance with IAS 34 [Scope of Review and Conclusion](index=22&type=section&id=Scope%20of%20Review%20and%20Conclusion) Ernst & Young has reviewed the Group's interim financial information for the six months ended June 30, 2025, and found no matters suggesting it was not prepared in all material respects according to IAS 34 - Ernst & Young has reviewed the interim financial information, and this review was conducted in accordance with Hong Kong Standard on Review Engagements 2410 issued by the Hong Kong Institute of Certified Public Accountants[81](index=81&type=chunk)[82](index=82&type=chunk) - The review concluded that nothing has come to their attention that causes them to believe the interim financial information is not prepared, in all material respects, in accordance with International Accounting Standard 34[83](index=83&type=chunk) [Interim Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=23&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) This section presents the interim condensed consolidated statement of profit or loss and other comprehensive income, showing the Group's revenue, profit, and other comprehensive income for the six months ended June 30, 2025 [Overview of Profit or Loss and Comprehensive Income](index=23&type=section&id=Overview%20of%20Profit%20or%20Loss%20and%20Comprehensive%20Income) For the six months ended June 30, 2025, the Group achieved revenue of RMB 1,112,620 thousand, a 3.9% year-on-year increase, but profit for the period significantly decreased by 77.4% to RMB 11,232 thousand 2025 First Half Consolidated Statement of Profit or Loss Summary | Metric | 2025 (RMB thousand) | 2024 (RMB thousand) | Year-on-year Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 1,112,620 | 1,070,896 | +3.9% | | Gross Profit | 167,757 | 196,974 | -14.8% | | Profit Before Tax | 13,965 | 53,086 | -73.7% | | Profit for the Period | 11,232 | 49,779 | -77.4% | | Earnings Per Share Attributable to Owners of the Parent (RMB) | 0.02 | 0.10 | -80.0% | - Sales and distribution expenses and research and development expenses increased year-on-year, while administrative expenses decreased[86](index=86&type=chunk) - Other comprehensive loss for the period primarily arose from fair value changes of financial assets measured at fair value through other comprehensive income and exchange differences on translation of overseas operations[87](index=87&type=chunk) [Interim Condensed Consolidated Statement of Financial Position](index=25&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) This section presents the interim condensed consolidated statement of financial position, detailing the Group's assets, liabilities, and equity as of June 30, 2025 [Overview of Assets and Liabilities](index=25&type=section&id=Overview%20of%20Assets%20and%20Liabilities) As of June 30, 2025, the Group's total assets were RMB 2,940,430 thousand, a 5.2% decrease from the end of 2024, with net current assets improving to RMB 444,015 thousand 2025 June 30 Consolidated Statement of Financial Position Summary | Metric | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Total Non-current Assets | 1,074,778 | 1,059,982 | +1.4% | | Total Current Assets | 1,865,652 | 2,041,533 | -8.6% | | Total Current Liabilities | 1,421,637 | 1,768,416 | -19.6% | | Total Non-current Liabilities | 246,110 | 38,239 | +542.6% | | Net Assets | 1,272,683 | 1,294,860 | -1.7% | - Net current assets increased from RMB 273,117 thousand at December 31, 2024, to **RMB 444,015 thousand**[89](index=89&type=chunk) - The significant increase in non-current liabilities was primarily due to the recognition of deferred income[90](index=90&type=chunk) [Interim Condensed Consolidated Statement of Changes in Equity](index=27&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) This section presents the interim condensed consolidated statement of changes in equity, showing the movements in the Group's equity for the six months ended June 30, 2025 [Overview of Changes in Equity](index=27&type=section&id=Overview%20of%20Changes%20in%20Equity) For the six months ended June 30, 2025, the Group's total equity was RMB 1,272,683 thousand, a slight decrease from RMB 1,294,860 thousand at the end of 2024, with total comprehensive income for the period at RMB 11,010 thousand 2025 First Half Consolidated Statement of Changes in Equity Summary | Metric | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Total Equity | 1,272,683 | 1,294,860 | -1.7% | | Total Comprehensive Income for the Period | 11,010 | Not applicable | Not applicable | | Dividends Declared | (36,526) | Not applicable | Not applicable | - Share capital remained unchanged, reserves slightly decreased, but share-based payment reserve increased[92](index=92&type=chunk) [Interim Condensed Consolidated Statement of Cash Flows](index=29&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) This section presents the interim condensed consolidated statement of cash flows, detailing the Group's cash flows from operating, investing, and financing activities for the six months ended June 30, 2025 [Overview of Cash Flows](index=29&type=section&id=Overview%20of%20Cash%20Flows) For the six months ended June 30, 2025, net cash flow from operating activities was RMB 3,966 thousand, a significant 94.2% year-on-year decrease, with net cash used in investing activities at RMB 150,961 thousand 2025 First Half Consolidated Statement of Cash Flows Summary | Metric | 2025 H1 (RMB thousand) | 2024 H1 (RMB thousand) | Year-on-year Change (%) | | :--- | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | 3,966 | 69,194 | -94.2% | | Net Cash Flow (Used in)/from Investing Activities | (150,961) | 17,222 | Not applicable | | Net Cash Flow from Financing Activities | 91,860 | 27,111 | +238.8% | | Cash and Cash Equivalents at End of Period | 444,553 | 323,738 | +37.3% | - Operating cash flow significantly decreased primarily due to payments for prior period accounts payable and increased R&D investment[95](index=95&type=chunk) - Increased cash outflow from investing activities was mainly due to the purchase of financial assets measured at fair value through profit or loss and placement of pledged time deposits[96](index=96&type=chunk) [Notes to Interim Condensed Consolidated Financial Statements](index=31&type=section&id=Notes%20to%20Interim%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed notes to the interim condensed consolidated financial statements, covering company information, basis of preparation, accounting policy changes, operating segment information, revenue, profit before tax, income tax, dividends, earnings per share, property, plant and equipment, inventories, trade and bills receivables, trade and bills payables, other payables and accrued expenses, share capital, share-based payments, commitments, related party transactions, fair value of financial instruments, and approval of financial information [Company and Group Information](index=31&type=section&id=Company%20and%20Group%20Information) Guangdong Jingke Electronics Co., Ltd. was established in China, primarily engaged in the production and sale of LED-related products and automotive smart visual products - The company was established in the People's Republic of China, with its principal activities being the production and sale of LED-related products and automotive smart visual products[97](index=97&type=chunk)[103](index=103&type=chunk) [Basis of Preparation](index=31&type=section&id=Basis%20of%20Preparation) The interim condensed consolidated financial information is prepared in accordance with IAS 34 and should be read in conjunction with the Group's annual consolidated financial statements for the year ended December 31, 2024 - The interim condensed consolidated financial information has been prepared in accordance with International Accounting Standard 34 and should be read in conjunction with the Group's annual consolidated financial statements for the year ended December 31, 2024[97](index=97&type=chunk) - The unaudited interim condensed consolidated financial information is presented in RMB, and all values are rounded to the nearest thousand unless otherwise specified[98](index=98&type=chunk) [Changes in Accounting Policies and Disclosures](index=31&type=section&id=Changes%20in%20Accounting%20Policies%20and%20Disclosures) Except for the first-time adoption of IAS 21 (Amendment) "Lack of Exchangeability," the accounting policies used to prepare the interim condensed consolidated financial information are consistent with those of the previous year, with no significant financial impact - Except for the first-time adoption of IAS 21 (Amendment) "Lack of Exchangeability" during this period, the accounting policies used to prepare the interim condensed consolidated financial information are consistent with those applied in the preparation of the Group's annual consolidated financial statements for the year ended December 31, 2024[99](index=99&type=chunk) - The adoption of the above revised IFRS accounting standards had no significant financial impact on the interim condensed consolidated financial information[100](index=100&type=chunk) [Operating Segment Information](index=31&type=section&id=Operating%20Segment%20Information) For management purposes, the Group has only one reportable operating segment, with its principal operating entities and most revenue derived from Mainland China - For management purposes, the Group does not disaggregate business units by its services and products and has only one reportable operating segment[101](index=101&type=chunk) - The principal operating entities are all located in Mainland China, and most of the Group's revenue from external customers is generated from Mainland China[102](index=102&type=chunk) [Information about Major Customers](index=32&type=section&id=Information%20about%20Major%20Customers) In the first half of 2025, Customer I contributed RMB 307,286 thousand in revenue, and Customer II contributed RMB 176,536 thousand Revenue from Major Customers (RMB thousand) | Customer | 2025 H1 | 2024 H1 | | :--- | :--- | :--- | | Customer I | 307,286 | 416,074 | | Customer II | 176,536 | 120,531 | | Customer III | Not applicable | 119,007 | [Revenue, Other Income and Gains](index=32&type=section&id=Revenue%2C%20Other%20Income%20and%20Gains) The Group's revenue from contracts with customers for the first half of 2025 was RMB 1,112,620 thousand, with total other income and gains of RMB 17,500 thousand, primarily from interest income, government grants, and exchange differences 2025 First Half Other Income and Gains | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Interest income | 4,022 | 2,432 | | Government grants | 8,725 | 1,865 | | Exchange difference gains | 512 | 977 | | Investment income from financial assets measured at fair value through profit or loss | 1,662 | 1,652 | | **Total other income and gains** | **17,500** | **11,143** | - Government grants primarily refer to awards received from local governments to compensate for R&D contributions, local economic contributions, and purchases of property, plant, and equipment projects[108](index=108&type=chunk) - Performance obligations are satisfied upon delivery of smart visual products and systems, with payments generally due 60 to 120 days from delivery[107](index=107&type=chunk) [Profit Before Tax](index=34&type=section&id=Profit%20Before%20Tax) The Group's profit before tax from continuing operations was RMB 13,965 thousand, a significant decrease from RMB 53,086 thousand in the same period last year, with major costs including cost of inventories sold, depreciation, R&D costs, and employee benefit expenses 2025 First Half Major Deductions/Additions to Profit Before Tax | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Cost of inventories sold | 944,863 | 873,922 | | Depreciation of property, plant and equipment | 56,052 | 61,164 | | Research and development costs | 55,696 | 44,638 | | Total employee benefit expenses | 189,579 | 161,225 | - Research and development costs increased by **24.8%** year-on-year, and total employee benefit expenses increased by **17.6%** year-on-year[109](index=109&type=chunk) [Income Tax](index=35&type=section&id=Income%20Tax) The Group is subject to income tax on an entity basis, with Hong Kong subsidiaries having no taxable profits, and Mainland China subsidiaries enjoying preferential tax rates of 15% or 25% depending on their status 2025 First Half Income Tax Expense | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Current income tax | 1,950 | 3,122 | | Deferred income tax | 783 | 185 | | **Total** | **2,733** | **3,307** | - The company and certain subsidiaries enjoy a preferential tax rate of **15%** as high-tech enterprises or located in the Nansha Pilot Free Trade Zone[114](index=114&type=chunk) [Dividends](index=36&type=section&id=Dividends) For the six months ended June 30, 2025, the company declared and paid a final dividend of RMB 36,526 thousand for the previous year 2025 First Half Dividends Declared | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Final dividend declared and paid for the previous year during the subsequent year (tax inclusive) | 36,526 | — | [Earnings Per Share Attributable to Owners of the Parent](index=36&type=section&id=Earnings%20Per%20Share%20Attributable%20to%20Owners%20of%20the%20Parent) For the six months ended June 30, 2025, basic and diluted earnings per share attributable to owners of the parent were RMB 0.02, calculated based on a weighted average of 537,146,709 ordinary shares outstanding 2025 First Half Earnings Per Share Calculation | Metric | 2025 H1 | 2024 H1 | | :--- | :--- | :--- | | Profit attributable to ordinary equity holders of the Company (RMB thousand) | 11,232 | 49,779 | | Weighted average number of ordinary shares outstanding during the period (thousand shares) | 537,147 | 496,583 | | Basic and diluted earnings per share (RMB) | 0.02 | 0.10 | - No diluted adjustment was made to the basic earnings per share amount presented for the reporting period as the Group had no potentially dilutive ordinary shares outstanding during the period[117](index=117&type=chunk) [Property, Plant and Equipment](index=37&type=section&id=Property%2C%20Plant%20and%20Equipment) For the six months ended June 30, 2025, the Group acquired assets of approximately RMB 95,497 thousand, incurred depreciation of RMB 56,052 thousand, and disposed of assets with a net book value of RMB 412 thousand, resulting in a net loss on disposal of RMB 135 thousand 2025 First Half Property, Plant and Equipment Movements | Item | 2025 H1 (RMB thousand) | 2024 H1 (RMB thousand) | | :--- | :--- | :--- | | Cost of assets acquired | 95,497 | 51,311 | | Depreciation | 56,052 | 61,164 | | Net book value of assets disposed of | 412 | 497 | | Net loss on disposal | 135 | 360 | [Inventories](index=37&type=section&id=Inventories) As of June 30, 2025, the Group's total inventories amounted to RMB 249,606 thousand, a decrease from RMB 284,911 thousand at the end of 2024, primarily comprising raw materials, work-in-progress, finished goods, and contract costs Inventory Composition (RMB thousand) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Raw materials and consumables | 77,299 | 96,132 | | Work-in-progress | 29,771 | 30,789 | | Finished goods | 120,173 | 132,046 | | Contract costs | 22,363 | 25,944 | | **Total** | **249,606** | **284,911** | [Trade and Bills Receivables](index=37&type=section&id=Trade%20and%20Bills%20Receivables) As of June 30, 2025, total trade and bills receivables amounted to RMB 960,134 thousand, a decrease from the end of 2024, with credit terms typically ranging from 60 to 120 days Trade and Bills Receivables (RMB thousand) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Trade receivables | 897,236 | 941,321 | | Bills receivable | 83,063 | 172,616 | | Impairment | (20,165) | (21,446) | | **Total** | **960,134** | **1,092,491** | - The Group primarily enters into trade terms with its customers on credit, with credit periods typically ranging from **60 to 120 days**[123](index=123&type=chunk) - The Group is committed to strictly controlling its outstanding receivables and has a credit control department to minimize credit risk[123](index=123&type=chunk) [Trade and Bills Payables](index=38&type=section&id=Trade%20and%20Bills%20Payables) As of June 30, 2025, total trade and bills payables amounted to RMB 901,706 thousand, a decrease from RMB 1,178,783 thousand at the end of 2024, with trade payables to third parties being interest-free and generally settled within one to three months Trade Payables Aging Analysis (RMB thousand) | Aging | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Within 1 year | 897,797 | 1,175,611 | | 1 to 2 years | 1,996 | 2,035 | | 2 to 3 years | 835 | 59 | | Over 3 years | 1,078 | 1,078 | | **Total** | **901,706** | **1,178,783** | - Trade payables to third parties of the company are interest-free and generally settled within one to three months from the invoice date[125](index=125&type=chunk) [Other Payables and Accrued Expenses](index=39&type=section&id=Other%20Payables%20and%20Accrued%20Expenses) As of June 30, 2025, total other payables and accrued expenses amounted to RMB 348,242 thousand, a decrease from RMB 491,985 thousand at the end of 2024, primarily including salaries and welfare payable, other payables, dividends payable, and other taxes payable Other Payables and Accrued Expenses (RMB thousand) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Deposits received | 2,547 | 2,280 | | Salaries and welfare payable | 37,576 | 48,931 | | Other payables | 261,228 | 223,452 | | Dividends payable | 36,526 | — | | Government subsidies payable | — | 200,000 | | Other taxes payable | 10,365 | 17,322 | | **Total** | **348,242** | **491,985** | [Share Capital](index=39&type=section&id=Share%20Capital) As of June 30, 2025, the company's issued and fully paid share capital was RMB 537,147 thousand, with 537,146,709 ordinary shares of RMB 1.00 par value each, consistent with the end of 2024 Summary of Share Capital Movements | Item | Number of shares issued | Share capital (RMB thousand) | | :--- | :--- | :--- | | As at January 1, 2024 | 480,078,011 | 480,078 | | New shares issued for share incentive schemes | 18,428,698 | 18,429 | | New shares issued for initial public offering | 38,640,000 | 38,640 | | **As at December 31, 2024 and June 30, 2025** | **537,146,709** | **537,147** | [Share-based Payments](index=40&type=section&id=Share-based%20Payments) The company has Share Incentive Schemes I, II, and III, granting restricted shares to employees and directors through employee shareholding platforms, which vest upon meeting specific conditions - The company granted restricted share schemes ("Share Incentive Scheme I") to employees and directors of the Group and established new employee shareholding platforms under Share Incentive Scheme II and Share Incentive Scheme III[129](index=129&type=chunk) - Shares granted to employees under Share Incentive Scheme III shall vest in four equal tranches over a four-year period upon completion of the company's public offering, expiry of the corresponding lock-up period, and achievement of annual performance milestones[129](index=129&type=chunk) Number of Restricted Shares (thousand shares) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Restricted shares granted by the Company under the schemes | 32,534 | 32,534 | [Commitments](index=40&type=section&id=Commitments) As of June 30, 2025, the Group's capital commitments primarily related to the acquisition of property, plant and equipment and intangible assets, with total contracted but unexpended capital expenditures of RMB 346,707 thousand, mainly for the construction of Guangzhou Lingwei Capital Commitments (RMB thousand) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Construction in progress | 346,707 | 70,626 | - Capital commitments primarily relate to the acquisition of property, plant and equipment and intangible assets, mainly for the construction investment of Guangzhou Lingwei[132](index=132&type=chunk) [Related Party Transactions](index=41&type=section&id=Related%20Party%20Transactions) The Group engaged in transactions with various related parties, including Geely-affiliated entities and Epistar Corporation, with significant sales and purchases of goods and services, and outstanding trade receivables and payables balances 2025 First Half Related Party Transactions Summary (RMB thousand) | Transaction Type | 2025 H1 | 2024 H1 | | :--- | :--- | :--- | | Revenue from goods and services | 365,488 | 448,595 | | Purchase of goods and services | 64,526 | 77,686 | 2025 June 30 Outstanding Balances with Related Parties Summary (RMB thousand) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Trade and bills receivables | 201,102 | 263,558 | | Trade payables | 49,311 | 66,484 | - Sales to and purchases from related parties were conducted at published prices and terms, and credit periods granted by related parties were generally consistent with those granted to major customers[135](index=135&type=chunk)[136](index=136&type=chunk) [Names and Relationships of Related Parties](index=41&type=section&id=Names%20and%20Relationships%20of%20Related%20Parties) This section lists the names of the Group's major related parties and their relationships with the company, including shareholders holding over 5% indirect or direct equity, entities controlled by the ultimate controlling shareholder, and Geely-affiliated entities - Related parties include Epistar Corporation (shareholder holding over 5% indirect equity), Zhejiang Yaoning Technology Group Co., Ltd. (shareholder holding over 5% direct equity), and multiple Geely-affiliated entities[134](index=134&type=chunk) - Guangdong Xinyueneng Semiconductor Co., Ltd. and Guangdong Xinjuneng Semiconductor Co., Ltd. are controlled by the company's ultimate controlling party[134](index=134&type=chunk) [Remuneration of Directors, Supervisors and Chief Executives](index=44&type=section&id=Remuneration%20of%20Directors%2C%20Supervisors%20and%20Chief%20Executives) For the six months ended June 30, 2025, the total remuneration for directors, supervisors, and chief executives was RMB 4,685 thousand, including fees, salaries, allowances, performance-related bonuses, share-based payment expenses, and pension scheme contributions 2025 First Half Remuneration of Directors, Supervisors and Chief Executives (RMB thousand) | Remuneration Category | 2025 H1 | 2024 H1 | | :--- | :--- | :--- | | Fees | 355 | 354 | | Salaries, allowances and benefits in kind | 2,476 | 2,106 | | Performance-related bonuses | 411 | 213 | | Share-based payment expenses | 1,346 | 2,053 | | Pension scheme contributions | 97 | 91 | | **Total** | **4,685** | **4,817** | - Total fees for independent non-executive directors were **RMB 355 thousand**, with Ms. Zhang He, Ms. Lin Nan, and Ms. Ding Hui each receiving RMB 80 thousand, and Mr. Chen Zhiguang receiving RMB 115 thousand[142](index=142&type=chunk) - Total remuneration for Executive Directors Mr. Xiao Guowei and Mr. Hou Yu was **RMB 2,325 thousand** and **RMB 1,315 thousand**, respectively[143](index=143&type=chunk) [Other Transactions](index=48&type=section&id=Other%20Transactions) On June 25, 2025, the company subscribed for shares in Cao Cao Mobility Limited's international offering at a cost of approximately RMB 14,350 thousand, which is classified as a financial asset measured at fair value through profit or loss - The company subscribed for shares in Cao Cao Mobility Limited's international offering at a cost of approximately **RMB 14,350 thousand**[149](index=149&type=chunk) - This investment is classified as a financial asset measured at fair value through profit or loss, with a fair value of approximately **RMB 12,099 thousand** as of June 30, 2025[149](index=149&type=chunk) [Fair Value and Fair Value Hierarchy of Financial Instruments](index=49&type=section&id=Fair%20Value%20and%20Fair%20Value%20Hierarchy%20of%20Financial%20Instruments) The carrying amounts of the Group's financial instruments approximate their fair values in the short term, and management has assessed that the fair values of current instruments like cash and cash equivalents and receivables/payables are similar to their carrying amounts Carrying Amounts and Fair Values of Financial Instruments (RMB thousand) | Item | June 30, 2025 Carrying Amount | December 31, 2024 Carrying Amount | June 30, 2025 Fair Value | December 31, 2024 Fair Value | | :--- | :--- | :--- | :--- | :--- | | Financial assets measured at fair value through profit or loss | 83,343 | 42,613 | 83,343 | 42,613 | | Interest-bearing bank and other borrowings | 52,512 | 65,237 | 52,049 | 64,773 | - Management has assessed that the fair values of current instruments such as cash and cash equivalents, restricted deposits, and trade receivables approximate their carrying amounts, primarily due to their short-term maturity[150](index=150&type=chunk) [Approval of Financial Information](index=49&type=section&id=Approval%20of%20Financial%20Information) The interim condensed consolidated financial information was approved and authorized for issue by the Board of Directors on August 28, 2025 - The interim condensed consolidated financial information was approved and authorized for issue by the Board of Directors on August 28, 2025[153](index=153&type=chunk) [Definitions](index=50&type=section&id=Definitions) This section provides definitions for key terms used throughout the report, covering company entities, legal documents, committees, geographical areas, share types, listing-related terms, and major shareholders and related parties [Definitions of Key Terms](index=50&type=section&id=Definitions%20of%20Key%20Terms) This section provides definitions for key terms used in the report, including company entities, legal documents, committees, geographical areas, share types, listing-related terms, and major shareholders and related parties - Definitions are provided for company and governance-related terms such as "Microcrystal Advanced Optoelectronics," "Audit Committee," "Corporate Governance Code," "the Company," "Controlling Shareholder," "Directors," "Global Offering," "the Group," and "H Shares"[154](index=154&type=chunk)[155](index=155&type=chunk)[156](index=156&type=chunk) - Explanations are given for terms related to employee shareholding platforms and controlling shareholder group members, including "Jingling Investment," "Jingrui Investment," "Jingshi Investment," and "Jingyu Investment"[155](index=155&type=chunk) [Glossary of Technical Terms](index=54&type=section&id=Glossary%20of%20Technical%20Terms) This section explains various technical terms used in the report, covering automotive smart vision, LED technology, display technology, and related industry terms, to aid reader comprehension of specialized content [Explanation of Technical Terms](index=54&type=section&id=Explanation%20of%20Technical%20Terms) This section explains various technical terms used in the report, covering automotive smart vision, LED technology, display technology, and related industry terms, to aid reader comprehension of specialized content - Explanations are provided for automotive smart vision and LED technology-related terms such as "ADB" (Adaptive Driving Beam), "AI" (Artificial Intelligence), "COB" (Chip-on-Board), and "LED+ Technology"[161](index=161&type=chunk) - Explanations are given for new display technology-related terms such as "Local Dimming," "Mini LED," and "Micro LED"[163](index=163&type=chunk)

Financial Performance - Revenue decreased by approximately 0.4% from about HKD 117.8 million in the first half of 2024 to about HKD 117.3 million in the first half of 2025[2] - Gross profit fell by approximately 5.5% from about HKD 87.4 million in the first half of 2024 to about HKD 82.6 million in the first half of 2025, with a gross profit margin decline of 3.7 percentage points to 70.5%[2] - The group recorded a net loss of approximately HKD 7.5 million in the first half of 2025, compared to a net profit of approximately HKD 7.5 million in the first half of 2024[2] - Total revenue for the six months ended June 30, 2025, was HKD 117,292,000, slightly down from HKD 117,811,000 in the same period of 2024, representing a decrease of 0.44%[12] - Retail business revenue increased to HKD 71,484,000 in 2025 from HKD 69,035,000 in 2024, marking a growth of 3.54%[12] - The basic and diluted loss per share for the first half of 2025 was HKD 5.65, compared to earnings per share of HKD 7.48 for the first half of 2024[3] - Basic loss per share for the six months ended June 30, 2025, was HKD 0.0564, compared to a profit of HKD 0.0748 per share in 2024[23] Dividend and Shareholder Returns - The board does not recommend the payment of an interim dividend for the six months ending June 30, 2025, compared to HKD 30 million for the same period in 2024[2] - The interim dividend declared for the six months ended June 30, 2024, amounted to HKD 30,000,000[34] - The company approved and paid a final dividend of HKD 20,000,000 for the previous fiscal year during the interim period[35] Assets and Liabilities - Total assets decreased from HKD 197.5 million as of December 31, 2024, to HKD 174.7 million as of June 30, 2025[4] - Current liabilities increased slightly from HKD 37.5 million as of December 31, 2024, to HKD 37.8 million as of June 30, 2025[4] - Non-current assets decreased from HKD 44.5 million as of December 31, 2024, to HKD 34.4 million as of June 30, 2025[4] - Cash and cash equivalents decreased from HKD 119.2 million as of December 31, 2024, to HKD 89.8 million as of June 30, 2025[4] - Trade receivables, net of loss provisions, decreased to HKD 25,242,000 as of June 30, 2025, from HKD 26,293,000 as of December 31, 2024, a decline of 4%[29] - Trade payables increased to HKD 4,677,000 as of June 30, 2025, compared to HKD 3,782,000 as of December 31, 2024, an increase of 23.6%[32] - Cash and cash equivalents stood at HKD 89,755,000 as of June 30, 2025, down from HKD 119,215,000 as of December 31, 2024, representing a decrease of 24.7%[31] Operational Costs - Employee costs increased to HKD 43,506,000 in 2025 from HKD 34,787,000 in 2024, reflecting a rise of 25.00%[19] - Depreciation expenses for property, plant, and equipment amounted to HKD 10,771,000 in 2025, up from HKD 9,682,000 in 2024, an increase of 11.25%[20] - Sales and distribution costs increased by approximately HKD 17.4 million or 35.3% in the first half of 2025, primarily due to increased advertising and promotional expenses related to new products and brand development[48] - Administrative and other operating expenses rose by approximately HKD 8.1 million or 43.8% in the first half of 2025, mainly due to increased employee costs and higher depreciation from an increase in the average number of self-operated retail stores from 26 to 33[49] - Financing costs increased by approximately HKD 104,000 or 21.7% to about HKD 583,000 in the first half of 2025, attributed to higher interest expenses from lease liabilities due to an increase in the average number of self-operated retail stores[51] Inventory and Impairment - The inventory of health and beauty products increased to HKD 33,883,000 as of June 30, 2025, compared to HKD 22,992,000 as of December 31, 2024, reflecting a growth of 47.5%[28] - The company recognized an impairment loss of HKD 1,036,000 for certain underperforming retail stores in 2025, compared to no impairment loss in 2024[27] - The provision for obsolete inventory decreased to HKD 59,000 as of June 30, 2025, from HKD 126,000 as of December 31, 2024[28] Capital Expenditures and Funding - Capital expenditures in the first half of 2025 were approximately HKD 0.2 million, a significant decrease from approximately HKD 3.2 million in the first half of 2024, with future capital expenditures expected to increase as business grows[59] - The company raised approximately HKD 125,001,000 from the issuance of 33,333,600 new ordinary shares at an issue price of HKD 3.75 per share[37] - The net proceeds from the global issuance of 33,333,600 shares at HKD 3.75 per share amounted to approximately HKD 94.4 million after deducting underwriting fees and other expenses[76] - The planned use of net proceeds includes 35.7% for marketing and promotional activities to enhance brand recognition, totaling approximately HKD 33.7 million[77] - 37.8% of the proceeds, approximately HKD 35.7 million, is allocated for expanding and optimizing the sales network[77] - 12.4% of the proceeds, approximately HKD 11.7 million, is designated for talent recruitment[77] - The total amount of net proceeds utilized as of the reporting period was HKD 18.3 million, leaving HKD 76.1 million unutilized[77] Corporate Governance and Compliance - The audit committee consists of three independent non-executive directors, ensuring proper oversight of financial reporting and internal controls[80] - The interim financial report for the six months ending June 30, 2025, has been reviewed by an independent auditor in accordance with Hong Kong standards[81] - The interim results announcement and report will be published on the company's website and the Hong Kong Stock Exchange website[82] - The company has maintained sufficient public float as per listing rules during the reporting period and up to the announcement date[74] Future Outlook - The group plans to continue product innovation and development, focusing on launching the product "Herbs Tiger Milk Cough Relief" and the new brand "MedHerbs" in the second half of 2025[40] - The group operates nine proprietary brands as of June 30, 2025, including "Herbs," "ZINO," and "MedHerbs"[38] - The group confirmed the recognition of all revenue upon customer ownership and acceptance of products, adhering to HKFRS 15[12] - The group had no significant contingent liabilities as of June 30, 2025, and December 31, 2024[61] - No significant investments or plans for major acquisitions or disposals of subsidiaries, joint ventures, or associates were reported for the first half of 2025[65][66]