[Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=1&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) The Group recorded an expanded net loss in the first half of 2025, primarily due to decreased revenue and a significant increase in income tax expense, which offset the growth in gross profit | Metric | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 511,461 | 577,898 | -11.5% | | Cost of Sales | (479,335) | (552,811) | -13.3% | | Gross Profit | 32,126 | 25,087 | +28.1% | | Other Income | 11,621 | 12,896 | -9.9% | | Other Losses | (759) | (1,321) | -42.5% | | Distribution and Selling Expenses | (10,139) | (9,411) | +7.7% | | Administrative Expenses | (21,820) | (21,059) | +3.6% | | Finance Costs | (8,643) | (10,236) | -15.6% | | Profit/(Loss) Before Tax | 2,386 | (4,044) | N/A (Turned from loss to profit) | | Income Tax (Expense)/Credit | (12,482) | 996 | N/A (Turned to expense) | | Loss and Total Comprehensive Expense for the Period | (10,096) | (3,048) | +231.2% | | Basic Loss Per Share (RMB cents) | (0.81) | (0.24) | +237.5% | [Condensed Consolidated Statement of Financial Position](index=2&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the Group's current liabilities still exceeded current assets, but net current liabilities decreased, with total assets and net assets slightly declining while capital structure remained stable | Metric | As of June 30, 2025 (RMB thousands) | As of Dec 31, 2024 (RMB thousands) | Change (RMB thousands) | | :--- | :--- | :--- | :--- | | Non-current Assets | 872,244 | 909,274 | (37,030) | | Current Assets | 507,483 | 488,696 | 18,787 | | Current Liabilities | 621,031 | 684,620 | (63,589) | | Net Current Liabilities | (113,548) | (195,924) | 82,376 | | Non-current Liabilities | 92,000 | 36,558 | 55,442 | | Net Assets | 666,696 | 676,792 | (10,096) | | Total Equity | 666,696 | 676,792 | (10,096) | | Cash and Bank Balances | 195,142 | 209,091 | (13,949) | | Bank and Other Borrowings (Current) | 317,561 | 402,732 | (85,171) | | Bank and Other Borrowings (Non-current) | 55,000 | 10,000 | 45,000 | - As of June 30, 2025, the Group's current liabilities exceeded its current assets by approximately **RMB 113,548,000**, and it recorded a net loss of approximately **RMB 10,096,000** for the period, indicating significant uncertainty regarding its ability to continue as a going concern[5](index=5&type=chunk) - The Board, based on the successful renewal and acquisition of new bank credit facilities (approximately **RMB 40,000,000** and **RMB 18,000,000**), and the ability to secure further financing, believes the Group has sufficient financial resources to meet its working capital needs and financial obligations for the next 12 months, thus preparing financial information on a going concern basis[5](index=5&type=chunk)[6](index=6&type=chunk) [Notes to the Condensed Consolidated Financial Information](index=4&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Information) This section details the basis of preparation, accounting policies, segment information, and the composition and changes of various income and expenses, along with an analysis of receivables and payables [Basis of Preparation](index=4&type=section&id=Basis%20of%20Preparation) These unaudited condensed consolidated financial statements are prepared in accordance with IAS 34 and the HKEX Listing Rules, adopting consistent accounting policies with the prior year's audited consolidated financial statements, despite current liabilities exceeding current assets and a net loss - The Group's current liabilities exceeded current assets by approximately **RMB 113,548,000**, and it recorded a net loss of approximately **RMB 10,096,000** for the period, constituting a material uncertainty regarding its ability to continue as a going concern[5](index=5&type=chunk) - The Board has secured the renewal of short-term bank borrowings of approximately **RMB 40,000,000** and obtained new bank credit facilities of approximately **RMB 18,000,000** to support its going concern[5](index=5&type=chunk) [Adoption of New and Revised IFRSs](index=5&type=section&id=Adoption%20of%20New%20and%20Revised%20IFRSs) The Group has adopted all new and revised IFRSs effective January 1, 2025, with no significant impact on the current period's financial information - The Group has adopted all new and revised IFRSs effective January 1, 2025, which had no impact on the unaudited condensed consolidated financial information[7](index=7&type=chunk) [Segment Information](index=6&type=section&id=Segment%20Information) The Group operates in a single segment, manufacturing and selling yarn, with over 99% of non-current assets and revenue derived from China, and no single customer accounting for more than 10% of total revenue - The Group's operating business is attributed to a single operating segment, focusing on the production and sale of yarn[8](index=8&type=chunk) - Over **99%** of the Group's non-current assets and revenue are derived from China[9](index=9&type=chunk) - During both periods, no single customer accounted for more than **10%** of the Group's total revenue[10](index=10&type=chunk) [Revenue](index=6&type=section&id=Revenue) The Group's primary business is the production and trading of yarn, with revenue recognized at the point of goods delivery - The Group's main business is the production and trading of yarn, with revenue recognized at the point of goods delivery[10](index=10&type=chunk) [Other Income](index=7&type=section&id=Other%20Income) The Group's other income, primarily comprising interest income, government grants, scrap sales, and rental income, decreased in the current period | Item | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | Change (RMB thousands) | | :--- | :--- | :--- | :--- | | Interest Income | 1,308 | 1,642 | (334) | | Government Grants | 187 | 1,063 | (876) | | Scrap Sales Revenue | 9,388 | 9,271 | 117 | | Rental Income | 700 | 588 | 112 | | Others | 38 | 332 | (294) | | **Total** | **11,621** | **12,896** | **(1,275)** | [Other Losses](index=7&type=section&id=Other%20Losses) The Group's other losses, mainly from net foreign exchange losses and losses on disposal of property, plant, and equipment, decreased in the current period | Item | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | Change (RMB thousands) | | :--- | :--- | :--- | :--- | | Net Foreign Exchange Loss | (370) | (681) | 311 | | Loss on Disposal of Property, Plant and Equipment | (480) | (633) | 153 | | Reversal of Impairment Loss on Trade Receivables | 27 | – | 27 | | Realized Gain on Settlement of Derivative Financial Instruments | 64 | – | 64 | | Others | – | (7) | 7 | | **Total** | **(759)** | **(1,321)** | **562** | [Finance Costs](index=7&type=section&id=Finance%20Costs) The Group's finance costs, primarily interest on bank and other borrowings, decreased in the current period | Item | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | Change (RMB thousands) | | :--- | :--- | :--- | :--- | | Interest on Bank and Other Borrowings | 8,643 | 10,236 | (1,593) | [Income Tax (Expense)/Credit](index=8&type=section&id=Income%20Tax%20(Expense)%2FCredit) The Group's income tax shifted from a credit in the prior period to an expense in the current period, mainly due to an increase in deferred tax liabilities from a change in the applicable tax rate for a Chinese subsidiary | Item | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | Change (RMB thousands) | | :--- | :--- | :--- | :--- | | Current Tax: PRC Enterprise Income Tax - Provision for the Period | (1,500) | (500) | (1,000) | | Current Tax: PRC Enterprise Income Tax - Underprovision in Prior Years | (408) | – | (408) | | Deferred Tax | (10,574) | 1,496 | (12,070) | | **Total** | **(12,482)** | **996** | **(13,478)** | - The enterprise income tax rate for subsidiary Jiangxi Huachun Color Spinning Technology Development Co., Ltd. is expected to change from a **15%** preferential tax rate in H1 2024 to a **25%** normal tax rate in H1 2025, leading to an increase in income tax expense[17](index=17&type=chunk) [Loss for the Period](index=8&type=section&id=Loss%20for%20the%20Period) The Group's loss for the period is calculated after deducting key items such as depreciation and cost of inventories sold | Item | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | Change (RMB thousands) | | :--- | :--- | :--- | :--- | | Depreciation - Owned Property, Plant and Equipment | 37,814 | 38,114 | (300) | | Depreciation - Right-of-use Assets | 801 | 815 | (14) | | Cost of Inventories Sold | 479,335 | 552,811 | (73,476) | [Dividends](index=9&type=section&id=Dividends) The Board declared an interim dividend of 1.5 HK cents per ordinary share, to be paid on or around October 15, 2025 - The Board declared an interim dividend of **1.5 HK cents** per ordinary share, which has not been recognized as a payable dividend in the current financial information[19](index=19&type=chunk) [Loss Per Share](index=9&type=section&id=Loss%20Per%20Share) The company's basic loss per share significantly increased due to an expanded net loss, with no potential dilutive shares | Metric | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | Change (RMB thousands) | | :--- | :--- | :--- | :--- | | Loss | (10,096) | (3,048) | (7,048) | | Number of Shares (thousands) | 1,246,700 | 1,246,700 | 0 | | Basic Loss Per Share (RMB cents) | (0.81) | (0.24) | (0.57) | - No diluted loss per share is presented for the six months ended June 30, 2025 and 2024, as there were no potential dilutive shares[22](index=22&type=chunk) [Trade and Other Receivables](index=9&type=section&id=Trade%20and%20Other%20Receivables) The Group's total trade and other receivables decreased, with a slight increase in trade receivables offset by reductions in prepayments to suppliers and other prepayments and receivables | Item | As of June 30, 2025 (RMB thousands) | As of Dec 31, 2024 (RMB thousands) | Change (RMB thousands) | | :--- | :--- | :--- | :--- | | Trade Receivables (net of allowance for doubtful debts) | 10,877 | 9,588 | 1,289 | | Prepayments to Suppliers | 7,463 | 9,690 | (2,227) | | Prepayments and Other Receivables | 821 | 1,619 | (798) | | **Total** | **19,161** | **20,897** | **(1,736)** | Ageing Analysis of Trade Receivables (net of impairment allowance): | Ageing | As of June 30, 2025 (RMB thousands) | As of Dec 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | 0 to 30 days | 9,625 | 8,996 | | 31 to 90 days | 1,252 | 592 | | **Total** | **10,877** | **9,588** | [Trade and Other Payables](index=10&type=section&id=Trade%20and%20Other%20Payables) The Group's total trade and other payables increased, primarily due to higher trade payables and other accrued expenses | Item | As of June 30, 2025 (RMB thousands) | As of Dec 31, 2024 (RMB thousands) | Change (RMB thousands) | | :--- | :--- | :--- | :--- | | Trade Payables | 24,641 | 13,733 | 10,908 | | Other Payables | 8,761 | 9,185 | (424) | | Other Taxes Payable | 14,223 | 20,126 | (5,903) | | Accrued Salaries and Wages | 12,483 | 17,488 | (5,005) | | Other Accrued Expenses | 155,637 | 144,306 | 11,331 | | Payables for Acquisition of Property, Plant and Equipment | 206 | 686 | (480) | | **Total** | **215,951** | **205,524** | **10,427** | Ageing Analysis of Trade Payables: | Ageing | As of June 30, 2025 (RMB thousands) | As of Dec 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | 0 to 30 days | 17,895 | 9,174 | | 31 to 90 days | 3,147 | – | | 91 to 180 days | 2,542 | 3,290 | | 181 to 365 days | – | 212 | | Over 365 days | 1,057 | 1,057 | | **Total** | **24,641** | **13,733** | [Operating Review and Outlook](index=11&type=section&id=Operating%20Review%20and%20Outlook) This section reviews the global and Chinese textile market environment, analyzes the Group's business performance and financial position, and outlines future market challenges and the company's strategies [Market Overview](index=11&type=section&id=Market%20Overview) In H1 2025, the global economy faced multiple challenges including geopolitical conflicts, high inflation and interest rates, and trade frictions, leading to volatile oil prices, weak cotton prices, and downward revisions in global GDP growth forecasts, keeping the textile industry under pressure - The global economy continues to face geopolitical risks such as the Russia-Ukraine conflict, Gaza conflict, and Israel-Iran conflict, alongside the dampening effects of high inflation and interest rates[25](index=25&type=chunk) - The 'reciprocal tariffs' policy implemented by the US Trump administration disrupted global trade order, exacerbating uncertainty[25](index=25&type=chunk) - International crude oil prices fluctuated sharply, falling from approximately **USD 80** per barrel to below **USD 60**, then rebounding to over **USD 75** due to geopolitical conflicts, with the downward trend in oil prices being unfavorable for the polyester yarn market[26](index=26&type=chunk) - International and Chinese domestic cotton prices remained generally stable but weak, primarily due to sluggish market demand[27](index=27&type=chunk) - The Chinese textile industry faces multiple challenges including a complex international trade environment, global supply chain adjustments, and high domestic production costs, resulting in continued weakness in both domestic and export markets[27](index=27&type=chunk) [Business Review](index=12&type=section&id=Business%20Review) The Group experienced a decrease in yarn product sales volume and revenue, but achieved gross profit growth through capacity replacement and product structure adjustment, actively responding to market competition, adjusting pricing strategies, and strengthening marketing efforts | Metric | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | | Yarn Product Sales Volume | approx. **45,254 tonnes** | approx. **49,113 tonnes** | -7.9% | | Yarn Product Production | approx. **51,113 tonnes** | approx. **50,000 tonnes** | +2.2% | | Yarn Product Revenue | **RMB 511.5 million** | **RMB 577.9 million** | -11.5% | | Gross Profit | approx. **RMB 32.1 million** | approx. **RMB 25.1 million** | +28.1% | | Loss Attributable to Owners of the Company | approx. **RMB 10.1 million** | approx. **RMB 3.0 million** | +236.7% | - Subsidiary Jiangxi Jinyuan Textile Co., Ltd. temporarily suspended production in Workshop No. 1 for renovation assessment, with its capacity transferred to the newly built Workshop No. 9, enhancing production efficiency while maintaining stable overall capacity[29](index=29&type=chunk) - The Group adjusted its product structure, shifting products from Jinyuan Workshop No. 5 from polyester yarn to melange polyester colored yarn, which has higher technical barriers and better profit margins[29](index=29&type=chunk) - To counter market competition and uncertainties from the US 'reciprocal tariffs' policy, the Group implemented an aggressive pricing strategy to ensure sales volume and maintain economies of scale[30](index=30&type=chunk) [Financial Review](index=14&type=section&id=Financial%20Review) This section provides an in-depth analysis of the Group's financial performance, including changes in revenue, gross profit, expenses, tax, loss, liquidity, capital structure, and foreign exchange risk [Revenue](index=14&type=section&id=Revenue_FinancialReview) The Group's operating revenue decreased by 11.5% year-on-year, primarily due to reduced yarn product sales volume and lower average selling prices | Product Type | H1 2025 (RMB thousands) | Percentage (%) | H1 2024 (RMB thousands) | Percentage (%) | | :--- | :--- | :--- | :--- | :--- | | Polyester Yarn | 180,520 | 35.3% | 220,653 | 38.2% | | Polyester-Cotton Blended Yarn | 177,723 | 34.7% | 197,098 | 34.1% | | Melange Polyester Colored Yarn | 153,218 | 30.0% | 135,816 | 23.5% | | Others | – | – | 24,331 | 4.2% | | **Total** | **511,461** | **100.0%** | **577,898** | **100.0%** | - The decrease in operating revenue primarily resulted from a reduction in yarn product sales volume from approximately **49,113 tonnes** to approximately **45,253 tonnes**, and a decrease in average selling price from approximately **RMB 11,767** per tonne to approximately **RMB 11,302** per tonne[31](index=31&type=chunk) [Gross Profit and Gross Margin](index=14&type=section&id=Gross%20Profit%20and%20Gross%20Margin_FinancialReview) The Group's gross profit and gross margin both increased, primarily benefiting from lower raw material costs and product portfolio adjustments, despite a decrease in sales volume | Metric | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | | Gross Profit | approx. **RMB 32.1 million** | approx. **RMB 25.1 million** | +28.1% | | Gross Margin | approx. **6.3%** | approx. **4.3%** | +**2.0 percentage points** | - The increase in gross margin primarily stemmed from reduced cost of sales due to lower raw material costs and product portfolio adjustments, focusing more on high-margin melange polyester colored yarn products[32](index=32&type=chunk) [Other Income](index=15&type=section&id=Other%20Income_FinancialReview) The Group's other income decreased by 9.9%, mainly due to reduced government grants and interest income | Metric | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Other Income | 11,600 | 12,900 | -9.9% | | Primary Reason | Decrease in government grants and interest income | | | [Other Losses](index=15&type=section&id=Other%20Losses_FinancialReview) The Group's other losses decreased by 42.5%, primarily due to a reduction in net foreign exchange losses and losses on disposal of property, plant, and equipment | Metric | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Other Losses | 800 | 1,300 | -42.5% | | Primary Reason | Decrease in net foreign exchange losses and losses on disposal of property, plant and equipment | | | [Distribution and Selling Expenses](index=15&type=section&id=Distribution%20and%20Selling%20Expenses_FinancialReview) The Group's distribution and selling expenses increased by 7.7%, mainly influenced by changes in customer structure and destination mix, with its proportion to total revenue also rising | Metric | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Distribution and Selling Expenses | 10,100 | 9,400 | +7.7% | | Percentage of Total Revenue | 2.0% | 1.6% | +0.4 percentage points | [Administrative Expenses](index=15&type=section&id=Administrative%20Expenses_FinancialReview) The Group's administrative expenses slightly increased by 3.6%, primarily due to higher staff costs, with its proportion to total revenue also rising | Metric | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Administrative Expenses | 21,800 | 21,100 | +3.6% | | Percentage of Total Revenue | 4.3% | 3.6% | +0.7 percentage points | [Finance Costs](index=15&type=section&id=Finance%20Costs_FinancialReview) The Group's finance costs decreased by 15.6%, mainly due to reduced bank borrowings, a decrease in the Loan Prime Rate (LPR), and more favorable refinancing terms | Metric | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Finance Costs | 8,600 | 10,200 | -15.6% | | Primary Reason | Reduced bank borrowings, lower LPR, optimized refinancing terms | | | [Income Tax (Expense)/Credit](index=16&type=section&id=Income%20Tax%20(Expense)%2FCredit_FinancialReview) The Group's income tax shifted from a credit in the prior period to an expense in the current period, mainly due to an increase in deferred tax liabilities from a change in the applicable tax rate for a Chinese subsidiary | Metric | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | Change (RMB thousands) | | :--- | :--- | :--- | :--- | | Income Tax Expense/Credit | (12,500) | 1,000 | (13,500) | | Primary Reason | Change in applicable tax rate for a Chinese subsidiary leading to increased deferred tax liabilities | | | [Loss Attributable to Owners of the Company and Net Loss Margin](index=16&type=section&id=Loss%20Attributable%20to%20Owners%20of%20the%20Company%20and%20Net%20Loss%20Margin_FinancialReview) Loss attributable to owners of the company significantly increased by 2.3 times, with the net loss margin rising from 0.5% to 2.0%, primarily due to an expanded net loss driven by higher income tax expense | Metric | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Loss Attributable to Owners | 10,100 | 3,000 | +236.7% | | Net Loss Margin | 2.0% | 0.5% | +1.5 percentage points | | Primary Reason | Increased income tax expense | | | [Loss Per Share](index=16&type=section&id=Loss%20Per%20Share_FinancialReview) The company's basic loss per share increased by 2.3 times, primarily due to the expanded net loss in the first half of the year | Metric | H1 2025 (RMB cents) | H1 2024 (RMB cents) | Change (%) | | :--- | :--- | :--- | :--- | | Basic Loss Per Share | 0.81 | 0.24 | +237.5% | | Primary Reason | Expanded net loss | | | [Liquidity and Financial Resources](index=16&type=section&id=Liquidity%20and%20Financial%20Resources_FinancialReview) The Group primarily met its funding needs through internal operating cash flow and bank credit facilities, generating net cash inflow from operating activities during the period, while cash and bank balances slightly decreased | Metric | As of June 30, 2025 (RMB thousands) | As of Dec 31, 2024 (RMB thousands) | Change (RMB thousands) | | :--- | :--- | :--- | :--- | | Cash and Bank Balances | 195,100 | 209,100 | (14,000) | | Short-term Time Deposits | – | 4,600 | (4,600) | | Pledged Bank Deposits | 52,200 | 57,200 | (5,000) | | Net Cash Inflow from Operating Activities | (Specific amount not disclosed, but "generated net cash inflow" mentioned) | | | [Capital Structure and Pledged Assets](index=16&type=section&id=Capital%20Structure%20and%20Pledged%20Assets_FinancialReview) The Group's total interest-bearing borrowings decreased, with most maturing within one year, and bank credit facilities are secured by right-of-use assets, property, plant, equipment, and pledged bank deposits | Metric | As of June 30, 2025 (RMB thousands) | As of Dec 31, 2024 (RMB thousands) | Change (RMB thousands) | | :--- | :--- | :--- | :--- | | Total Interest-bearing Borrowings | 372,600 | 412,700 | (40,100) | | Borrowings Due Within One Year or On Demand | 317,600 (85.2%) | 402,700 (97.6%) | (85,100) | | Total Carrying Value of Pledged Assets | 418,700 | 433,100 | (14,400) | [Gearing Ratio](index=17&type=section&id=Gearing%20Ratio_FinancialReview) The Group's gearing ratio decreased, with a reduction in net current liabilities and a slight decline in net assets | Metric | As of June 30, 2025 | As of Dec 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Gearing Ratio | 31.7% | 34.6% | -2.9 percentage points | | Net Current Liabilities | approx. **RMB 113.5 million** | approx. **RMB 195.9 million** | decreased by approx. **RMB 82.4 million** | | Net Assets | approx. **RMB 666.7 million** | approx. **RMB 676.8 million** | decreased by approx. **RMB 10.1 million** | [Foreign Exchange Risk](index=17&type=section&id=Foreign%20Exchange%20Risk_FinancialReview) The Group primarily faces foreign exchange risk from HKD and USD, but did not use any financial instruments for hedging during the period - The Group primarily faces foreign exchange risk from HKD and USD, with the carrying values of foreign currency denominated monetary assets and liabilities being approximately **RMB 1.7 million** and **RMB 5.1 million** respectively as of June 30, 2025[44](index=44&type=chunk) - The Group did not use any financial instruments for hedging during the six months ended June 30, 2025[44](index=44&type=chunk) [Contingent Liabilities](index=17&type=section&id=Contingent%20Liabilities_FinancialReview) As of June 30, 2025, the Group had no contingent liabilities - As of June 30, 2025, the Group had no contingent liabilities[45](index=45&type=chunk) [Outlook](index=18&type=section&id=Outlook) The Group anticipates a challenging textile market ahead, continuously monitoring market conditions, adjusting inventory, capacity, product mix, and pricing strategies, and enhancing production efficiency through increased automation to navigate market changes and seize opportunities for industry improvement - The textile industry faces challenges from the Russia-Ukraine conflict, Israel-Palestine conflict, sluggish growth in developed economies, and US 'reciprocal tariffs', leading to continued suppression of global demand and consumption[48](index=48&type=chunk) - China's textile product export market remains weak, with no clear signs of recovery in the domestic sales market[48](index=48&type=chunk) - The Group will continue to closely monitor market conditions, adjust inventory levels and production capacity, and improve its product portfolio and pricing strategies[49](index=49&type=chunk) - The Group will continue to prioritize industrial production safety and enhance production efficiency through increased automation to consolidate its advantageous position[49](index=49&type=chunk) [Other Information](index=17&type=section&id=Other%20Information) This section covers other important information regarding the company's employees, remuneration, dividend distribution, securities transactions, corporate governance, audit committee functions, and interim report publication [Employees, Remuneration and Share Option Scheme](index=17&type=section&id=Employees%2C%20Remuneration%20and%20Share%20Option%20Scheme) As of June 30, 2025, the Group had 2,436 employees, with remuneration determined based on performance, experience, and market practice; the company has a share option scheme but no options have been granted since its adoption | Metric | As of June 30, 2025 | As of Dec 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Total Number of Employees | **2,436** employees | **2,410** employees | +**26** employees | - The company adopted a share option scheme on June 25, 2021, but no share options have been granted under the scheme since its adoption[46](index=46&type=chunk) [Significant Investments and Acquisitions and Disposals of Subsidiaries](index=18&type=section&id=Significant%20Investments%20and%20Acquisitions%20and%20Disposals%20of%20Subsidiaries) For the six months ended June 30, 2025, the Group had no significant investments or acquisitions or disposals of subsidiaries - For the six months ended June 30, 2025, the Group had no significant investments or acquisitions or disposals of subsidiaries[47](index=47&type=chunk) [Dividends and Closure of Register of Members](index=18&type=section&id=Dividends%20and%20Closure%20of%20Register%20of%20Members) The Board declared an interim dividend of HK 1.5 cents per share, with the share transfer registration suspended from September 16 to 17, 2025, and payment expected on or around October 15, 2025 - The Board declared an interim dividend of **HK 1.5 cents** per share for the six months ended June 30, 2025[50](index=50&type=chunk) - The company's register of members will be closed from September 16, 2025, to September 17, 2025, during which no share transfers will be registered[50](index=50&type=chunk) - The 2025 interim dividend is expected to be paid on or around October 15, 2025, to shareholders registered as of September 17, 2025[50](index=50&type=chunk) [Purchase, Sale or Redemption of the Company's Securities](index=19&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company%27s%20Securities) During the six months ended June 30, 2025, neither the company nor its subsidiaries purchased, sold, or redeemed any of the company's listed securities - During the six months ended June 30, 2025, neither the company nor its subsidiaries purchased, sold, or redeemed any of the company's listed shares[51](index=51&type=chunk) [Corporate Governance Practices](index=19&type=section&id=Corporate%20Governance%20Practices) The company has complied with the Corporate Governance Code in Appendix C1 of the Listing Rules, except for not establishing an internal audit function, considering its operational scale, complexity, and cost, believing existing management's close monitoring provides effective internal control - The company has complied with the current Corporate Governance Code set out in Appendix C1 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited, except for not establishing an internal audit function[52](index=52&type=chunk) - The company believes its existing organizational structure and close monitoring by the management team provide effective internal control and risk management functions, and will review annually whether an internal audit function is necessary[52](index=52&type=chunk) [Model Code for Securities Transactions by Directors](index=19&type=section&id=Model%20Code%20for%20Securities%20Transactions%20by%20Directors) The company has adopted the Model Code set out in Appendix C3 of the Listing Rules and confirmed that all directors complied with it during the period - The company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers set out in Appendix C3 of the Listing Rules, and confirmed that all directors complied with the code during the period[53](index=53&type=chunk) [Audit Committee](index=19&type=section&id=Audit%20Committee) The company's Audit Committee has reviewed the accounting principles and policies adopted by the Group, as well as the unaudited condensed consolidated financial information for the current period, with management - The company's Audit Committee, together with management, has reviewed the accounting principles and policies adopted by the Group, and the unaudited condensed consolidated financial information for the six months ended June 30, 2025[54](index=54&type=chunk) [Publication of Interim Results Announcement and Interim Report](index=19&type=section&id=Publication%20of%20Interim%20Results%20Announcement%20and%20Interim%20Report) This interim results announcement has been published on the HKEX website and the company's website, and the interim report will be dispatched to shareholders and published on the websites in due course - This interim results announcement will be published on the HKEX website www.hkexnews.hk and the company's website www.chinaweavingmaterials.com[55](index=55&type=chunk) - The company's interim report for the six months ended June 30, 2025, will be dispatched to the company's shareholders and published on the aforementioned websites in due course[55](index=55&type=chunk) [Acknowledgement](index=20&type=section&id=Acknowledgement) The Board extends its sincere gratitude to the Group's management and employees, customers, suppliers, shareholders, and various government departments - The Board, on behalf of the company, extends its sincere gratitude to the management, employees, customers, suppliers, shareholders, and various government departments[56](index=56&type=chunk)

[Financial Highlights](index=1&type=section&id=I.%20%E8%B2%A1%E5%8B%99%E6%91%98%E8%A6%81) [Key Financial Data](index=1&type=section&id=1.1%20%E9%97%9C%E9%8D%B5%E8%B2%A1%E5%8B%99%E6%95%B8%E6%93%9A) During the reporting period, Meihao Medical Group's revenue increased by 28.9% to RMB 43.6 million, while loss for the period narrowed to RMB 9.9 million compared to the same period last year Key Financial Data Summary | Indicator | For the six months ended June 30, 2025 (RMB '000) | For the six months ended June 30, 2024 (RMB '000) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 43,568 | 33,797 | +28.9% | | Cost of sales | (27,550) | (21,449) | +28.4% | | Gross profit | 16,018 | 12,348 | +29.7% | | Loss before tax | (8,719) | (14,432) | -39.5% | | Loss for the period | (9,935) | (15,136) | -34.3% | [Interim Condensed Consolidated Financial Statements](index=2&type=section&id=II.%20%E4%B8%AD%E6%9C%9F%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8) [Statement of Profit or Loss](index=2&type=section&id=2.1%20%E6%90%8D%E7%9B%8A%E8%A1%A8) For the six months ended June 30, 2025, the company's revenue increased to RMB 43.6 million, gross profit rose to RMB 16.0 million, and loss for the period narrowed to RMB 9.9 million Interim Condensed Consolidated Statement of Profit or Loss | Indicator | For the six months ended June 30, 2025 (RMB '000) | For the six months ended June 30, 2024 (RMB '000) | | :--- | :--- | :--- | | Revenue | 43,568 | 33,797 | | Cost of sales | (27,550) | (21,449) | | Gross profit | 16,018 | 12,348 | | Other income and gains | 1,639 | 2,878 | | Selling expenses | (13,641) | (11,217) | | Administrative expenses | (11,587) | (17,454) | | Loss before tax | (8,719) | (14,432) | | Income tax expense | (1,216) | (704) | | Loss for the period | (9,935) | (15,136) | | Loss attributable to owners of the parent | (10,007) | (15,074) | | Basic and diluted loss per share | RMB (1.79) cents | RMB (2.51) cents | [Statement of Comprehensive Income](index=3&type=section&id=2.2%20%E5%85%A8%E9%9D%A2%E6%94%B6%E7%9B%8A%E8%A1%A8) For the six months ended June 30, 2025, the company's total comprehensive loss for the period was RMB 9.941 million, a decrease from the prior year, primarily due to narrowed loss for the period and exchange differences Interim Condensed Consolidated Statement of Comprehensive Income | Indicator | For the six months ended June 30, 2025 (RMB '000) | For the six months ended June 30, 2024 (RMB '000) | | :--- | :--- | :--- | | Loss for the period | (9,935) | (15,136) | | Other comprehensive (loss)/income: | | | | Exchange differences on translation of foreign operations | (1,095) | (5) | | Exchange differences on translation of the company's financial statements to presentation currency | 1,089 | 675 | | Other comprehensive (loss)/income for the period, net of tax | (6) | 670 | | Total comprehensive loss for the period | (9,941) | (14,466) | | Total comprehensive loss attributable to owners of the parent | (10,013) | (14,404) | [Statement of Financial Position](index=4&type=section&id=2.3%20%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81%E8%A1%A8) As of June 30, 2025, the company's total assets less current liabilities were RMB 138.7 million, and net assets were RMB 110.5 million, a decrease from the end of 2024, mainly due to a reduction in net current assets Interim Condensed Consolidated Statement of Financial Position | Indicator | As of June 30, 2025 (RMB '000) | As of December 31, 2024 (RMB '000) | | :--- | :--- | :--- | | **Non-current assets** | | | | Property, plant and equipment | 24,240 | 26,119 | | Right-of-use assets | 30,047 | 32,378 | | Goodwill | 11,486 | 11,486 | | Intangible assets | 396 | 494 | | Deferred tax assets | 234 | 234 | | Prepayments, other receivables and other assets | 11,035 | 11,178 | | Financial assets at fair value through profit or loss | 10,000 | 10,000 | | **Total non-current assets** | **87,438** | **91,889** | | **Current assets** | | | | Inventories | 2,724 | 2,395 | | Trade receivables | 1,029 | 693 | | Prepayments, other receivables and other assets | 20,381 | 16,683 | | Cash and cash equivalents | 73,026 | 78,494 | | **Total current assets** | **97,160** | **98,265** | | **Current liabilities** | | | | Trade payables | 9,208 | 6,557 | | Other payables and accrued expenses | 23,341 | 19,768 | | Contract liabilities | 3,601 | 3,976 | | Lease liabilities | 7,992 | 8,251 | | Tax payable | 1,763 | 1,557 | | **Total current liabilities** | **45,905** | **40,109** | | **Net current assets** | **51,255** | **58,156** | | **Total assets less current liabilities** | **138,693** | **150,045** | | **Non-current liabilities** | | | | Lease liabilities | 23,113 | 25,180 | | Contract liabilities | 4,503 | 4,459 | | Deferred tax liabilities | 620 | 8 | | **Total non-current liabilities** | **28,236** | **29,647** | | **Net assets** | **110,457** | **120,398** | | **Total equity** | **110,457** | **120,398** | [Notes to the Financial Statements](index=6&type=section&id=III.%20%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8%E9%99%84%E8%A8%BB) [Basis of Preparation and Accounting Policies](index=6&type=section&id=3.1%20%E7%B7%A8%E8%A3%BD%E5%9F%BA%E6%BA%96%E8%88%87%E6%9C%83%E8%A8%88%E6%94%BF%E7%AD%96) The interim financial information is prepared in accordance with HKAS 34 and consistent with the accounting policies of the 2024 annual consolidated financial statements, with no material impact from newly adopted HKFRS amendments - Interim condensed consolidated financial information is prepared in accordance with HKAS 34 and consistent with 2024 annual financial statements accounting policies[10](index=10&type=chunk)[11](index=11&type=chunk) - Amendments to HKAS 21 regarding lack of exchangeability have no impact on the Group's interim condensed consolidated financial information, as the Group's transaction and functional currencies are convertible[12](index=12&type=chunk) [Operating Segment Information](index=6&type=section&id=3.2%20%E7%B6%93%E7%87%9F%E5%88%86%E9%83%A8%E8%B3%87%E6%96%99) Group management monitors all operating activities as a whole, resulting in only one reportable operating segment - The Group has only one reportable operating segment, with management monitoring overall operating results for decision-making[13](index=13&type=chunk) [Revenue Analysis](index=6&type=section&id=3.3%20%E6%94%B6%E7%9B%8A%E5%88%86%E6%9E%90) For the six months ended June 30, 2025, the Group's revenue from contracts with customers was RMB 43.568 million, entirely from dental services in Mainland China, recognized over time Revenue Analysis | Revenue Source | For the six months ended June 30, 2025 (RMB '000) | For the six months ended June 30, 2024 (RMB '000) | | :--- | :--- | :--- | | Revenue from contracts with customers | 43,568 | 33,797 | | Service category: Dental services | 43,568 | 33,797 | | Geographical market: Mainland China | 43,568 | 33,797 | | Timing of revenue recognition: Services transferred over time | 43,568 | 33,797 | [Loss Before Tax Analysis](index=7&type=section&id=3.4%20%E9%99%A4%E7%A8%85%E5%89%8D%E虧%E6%90%8D%E5%88%86%E6%9E%90) For the six months ended June 30, 2025, the Group's loss before tax was RMB 8.719 million, primarily influenced by inventory costs, exchange differences, and share-based payment expenses in the prior period Components of Loss Before Tax | Item | For the six months ended June 30, 2025 (RMB '000) | For the six months ended June 30, 2024 (RMB '000) | | :--- | :--- | :--- | | Cost of inventories, consumables and customized products | 5,354 | 5,410 | | Net reversal of impairment loss on financial assets | – | (4) | | Share-based payment expenses | – | 6,216 | | Net exchange differences | (707) | (46) | [Income Tax](index=7&type=section&id=3.5%20%E6%89%80%E5%BE%97%E7%A8%85) The Group's income tax expense primarily arises from Mainland China subsidiaries, calculated at a 25% statutory rate, with some small-profit enterprises enjoying a 20% preferential rate; Cayman Islands and BVI registered companies are exempt from income tax - The Company and its subsidiaries registered in the Cayman Islands and British Virgin Islands are exempt from income tax[17](index=17&type=chunk) - Income tax for Mainland China subsidiaries is calculated at a **25% statutory rate**, with some small-profit enterprises enjoying a **20% preferential rate** (75% tax reduction for annual taxable income up to RMB 3.0 million)[18](index=18&type=chunk) Income Tax Expense Details | Income Tax Item | For the six months ended June 30, 2025 (RMB '000) | For the six months ended June 30, 2024 (RMB '000) | | :--- | :--- | :--- | | Current - Mainland China expense for the period | 604 | 1,141 | | Deferred tax | 612 | (437) | | Total tax expense for the period | 1,216 | 704 | [Dividends](index=8&type=section&id=3.6%20%E8%82%A1%E6%81%AF) The Board resolved not to recommend an interim dividend for the six months ended June 30, 2025, consistent with the prior period - The Board resolved not to declare an interim dividend for the six months ended June 30, 2025 (2024 corresponding period: nil)[20](index=20&type=chunk) [Loss Per Share](index=8&type=section&id=3.7%20%E6%AF%8F%E8%82%A1%E虧%E6%90%8D) For the six months ended June 30, 2025, basic loss per share attributable to ordinary equity holders of the parent company narrowed to RMB (1.79) cents from RMB (2.51) cents in the prior period Basic Loss Per Share Calculation | Indicator | For the six months ended June 30, 2025 | For the six months ended June 30, 2024 | | :--- | :--- | :--- | | Loss attributable to ordinary equity holders of the parent (RMB '000) | (10,007) | (15,074) | | Weighted average number of ordinary shares outstanding (shares) | 558,769,350 | 599,799,204 | | Basic loss per share | RMB (1.79) cents | RMB (2.51) cents | - Due to the Group incurring a loss, equity-settled share awards and share option arrangements had an anti-dilutive effect on basic loss per share and were not adjusted for dilution[23](index=23&type=chunk) [Trade Receivables](index=9&type=section&id=3.8%20%E8%B2%A3%E6%98%93%E6%87%89%E6%94%B6%E6%AC%BE%E9%A0%85) As of June 30, 2025, total trade receivables amounted to RMB 1.029 million, all within 3 months aging, an increase from RMB 0.693 million at the end of 2024, with a more concentrated short-term aging structure Aging Analysis of Trade Receivables | Aging | As of June 30, 2025 (RMB '000) | As of December 31, 2024 (RMB '000) | | :--- | :--- | :--- | | Within 3 months | 1,029 | 662 | | 3 to 6 months | – | 9 | | 6 to 12 months | – | 2 | | 1 to 2 years | – | 9 | | Over 2 years | – | 11 | | **Total** | **1,029** | **693** | [Trade Payables](index=9&type=section&id=3.9%20%E8%B2%A3%E6%98%93%E6%87%89%E4%BB%98%E6%AC%BE%E9%A0%85) As of June 30, 2025, total trade payables amounted to RMB 9.208 million, an increase from RMB 6.557 million at the end of 2024, with a significant rise in payables aged within 3 months Aging Analysis of Trade Payables | Aging | As of June 30, 2025 (RMB '000) | As of December 31, 2024 (RMB '000) | | :--- | :--- | :--- | | Within 3 months | 4,218 | 1,422 | | 3 to 6 months | 1,547 | 779 | | 6 to 12 months | 249 | 852 | | Over 1 year | 3,194 | 3,504 | | **Total** | **9,208** | **6,557** | [Events After the Reporting Period](index=9&type=section&id=3.10%20%E5%A0%B1%E5%91%8A%E6%9C%9F%E5%BE%8C%E4%BA%8B%E9%A0%85) Subsequent to the reporting period, on July 18, 2025, the company entered into a subscription agreement with Deepcare Medical Holdings Limited to subscribe for 2,863,492 Class B ordinary shares for US$2.0 million, resulting in approximately 2% ownership of Deepcare Medical upon completion, which remains outstanding as of the announcement date - On July 18, 2025, the company entered into a subscription agreement with Deepcare Medical to subscribe for **2,863,492 Class B ordinary shares for US$2.0 million**, which will result in approximately **2% ownership** of Deepcare Medical upon completion[26](index=26&type=chunk) - As of the announcement date, the subscription for Deepcare Medical remains outstanding[26](index=26&type=chunk) [Management Discussion and Analysis](index=10&type=section&id=IV.%20%E7%AE%A1%E7%90%86%E5%B1%A4%E8%A8%8E%E8%AB%96%E8%88%87%E5%88%86%E6%9E%90) [Business Review](index=10&type=section&id=4.1%20%E6%A5%AD%E5%8B%99%E5%9B%9E%E9%A1%A7) Meihao Medical Group, a leading private dental service provider in Wenzhou, reported a 28.9% revenue increase to RMB 43.6 million, driven by advertising and the addition of Leqing Hospital, with active patient numbers rising by 38.3%; the Group offers general dentistry, orthodontics, prosthodontics, and implant dentistry [Overview](index=10&type=section&id=4.1.1%20%E6%A6%82%E8%A6%BD) The Group is a renowned private dental service provider in Wenzhou, owning and operating six private dental hospitals and one clinic; during the period, despite the 'centralized procurement policy for dental implants' and market competition, the Group increased revenue from RMB 33.8 million to RMB 43.6 million by enhancing advertising and marketing strategies - The Group is a renowned private dental service provider in Wenzhou, Zhejiang Province, primarily offering general dentistry, prosthodontics, implant dentistry, and orthodontics[27](index=27&type=chunk) - As of June 30, 2025, the Group owns and operates **six private dental hospitals** and **one clinic** located in Wenzhou[27](index=27&type=chunk) - During the reporting period, despite the "centralized procurement policy for dental implants" and local market competition, the Group increased revenue from **RMB 33.8 million to RMB 43.6 million** by enhancing advertising and marketing strategies[28](index=28&type=chunk) [Business Categories](index=10&type=section&id=4.1.2%20%E6%A5%AD%E5%8B%99%E9%A1%9E%E5%88%A5) The Group offers four core dental services: general dentistry (fillings, root canals), orthodontics (various braces), prosthodontics (crowns, removable dentures), and implant dentistry (dental implants) - General dentistry primarily provides fillings and root canal treatment services[29](index=29&type=chunk) - Orthodontics offers teeth straightening using standard metal braces, clear aligners, ceramic braces, and smart material clear aligners[30](index=30&type=chunk) - Prosthodontics mainly provides dental crown and removable denture services[31](index=31&type=chunk) - Implant dentistry focuses on surgically placing dental implants into patients' jawbones to replace damaged or missing teeth with prostheses[32](index=32&type=chunk) [Active Patient Numbers](index=11&type=section&id=4.1.3%20%E6%B4%BB%E8%BA%8D%E6%82%A3%E8%80%85%E4%BA%BA%E6%95%B8) For the six months ended June 30, 2025, the Group's total active patient count increased to 40,456, a 38.3% year-on-year growth, with significant increases at Longgang Hospital, Lucheng Hospital, and Jielaiya Clinic - The Group's total active patient count increased from **29,259 to 40,456**, representing a **38.3% increase**[33](index=33&type=chunk) Active Patient Numbers Details | Hospital | For the six months ended June 30, 2025 (Active Patients) | For the six months ended June 30, 2024 (Active Patients) | | :--- | :--- | :--- | | Wenzhou Hospital | 14,168 | 14,545 | | Ruian Branch | 1,707 | 1,460 | | Longgang Hospital | 3,347 | 1,669 | | Lucheng Hospital | 7,165 | 5,318 | | Wenzhou Stomatology | 5,207 | 4,238 | | Jielaiya | 5,141 | 2,029 | | Leqing Hospital | 3,721 | – | | **Total** | **40,456** | **29,259** | [Revenue by Hospital](index=12&type=section&id=4.1.4%20%E6%8C%89%E9%86%AB%E9%99%A2%E5%8A%83%E5%88%86%E7%9A%84%E6%94%B6%E7%9B%8A) For the six months ended June 30, 2025, Wenzhou Hospital remained the largest revenue contributor at 35.8% of total revenue, but Lucheng Hospital, Wenzhou Stomatology, and Jielaiya significantly increased their revenue share, with Leqing Hospital contributing 5.6% Revenue Contribution by Hospital | Hospital | For the six months ended June 30, 2025 (RMB '000) | For the six months ended June 30, 2025 (%) | For the six months ended June 30, 2024 (RMB '000) | For the six months ended June 30, 2024 (%) | | :--- | :--- | :--- | :--- | :--- | | Wenzhou Hospital | 15,599 | 35.8 | 18,285 | 54.1 | | Ruian Branch | 1,982 | 4.5 | 1,474 | 4.4 | | Longgang Hospital | 2,120 | 4.9 | 1,836 | 5.4 | | Lucheng Hospital | 9,734 | 22.3 | 4,925 | 14.6 | | Wenzhou Stomatology | 8,916 | 20.5 | 6,369 | 18.8 | | Jielaiya | 2,791 | 6.4 | 908 | 2.7 | | Leqing Hospital | 2,426 | 5.6 | – | – | | **Total** | **43,568** | **100.0** | **33,797** | **100.0** | - Wenzhou Dental Hospital remains the largest revenue contributor, but its proportion of total revenue decreased from **54.1% to 35.8%**[35](index=35&type=chunk) - The addition of Leqing Hospital contributed **5.6% of revenue**[35](index=35&type=chunk) [Outlook and Strategies](index=12&type=section&id=4.2%20%E5%B1%95%E6%9C%9B%E8%88%87%E7%AD%96%E7%95%A5) The Group actively responds to national dental centralized procurement policies and market competition by optimizing services, enhancing cost-effectiveness, expanding new businesses, and strengthening sustainability, aiming for 'cost reduction and efficiency improvement' and diversified development, transforming challenges into opportunities [Responding to Policies and Market Competition](index=12&type=section&id=4.2.1%20%E6%87%89%E5%B0%8D%E6%94%BF%E7%AD%96%E8%88%87%E5%B8%82%E5%A0%B4%E7%AB%B6%E7%88%AD) The Group actively addresses challenges from national dental centralized procurement policies by launching personalized packages, enhancing service portfolios, maintaining service quality, and establishing strategic partnerships with suppliers to reduce raw material costs - The Group addresses national dental centralized procurement policies by launching more attractive personalized packages, enhancing service portfolios, maintaining service quality, and achieving cost-effectiveness[36](index=36&type=chunk) - The Group establishes long-term strategic partnerships with suppliers to reduce raw material costs through centralized procurement and large-scale production[36](index=36&type=chunk) [Optimizing Services and Environment](index=13&type=section&id=4.2.2%20%E5%84%AA%E5%8C%96%E6%9C%8D%E5%8B%99%E8%88%87%E7%92%B0%E5%A2%83) The Group enhances customer appeal and social influence through continuous staff training, introducing diverse medical technologies (e.g., Cuban doctors), upgrading hospital environments (adding entertainment and children's interactive areas), and organizing public welfare activities like 'Little Dentist' - The Group continuously improves staff training to enhance communication and treatment efficiency of consultants and medical personnel[37](index=37&type=chunk) - The Group collaborates with Wenzhou Science and Technology Bureau and Cuban Medical Bureau to introduce Cuban doctors, integrating diverse domestic and international medical technologies to gain customer trust[37](index=37&type=chunk) - Branch hospitals upgrade their environments by adding entertainment facilities and children's interactive areas, and continue to organize public welfare activities like "Little Dentist" to enhance the customer visit experience[38](index=38&type=chunk) [Business Diversification and Innovation](index=13&type=section&id=4.2.3%20%E6%A5%AD%E5%8B%99%E5%A4%9A%E5%85%83%E5%8C%96%E8%88%87%E5%89%B5%E6%96%B0) Beyond consolidating dental operations, the Group actively explores other industries and medical businesses, establishes partnerships with medical equipment companies to control the supply chain, plans to expand into corporate venture capital, and engage in other upstream and downstream healthcare sectors, seeking international cooperation - The Group establishes partnerships with medical equipment companies to control sources of raw materials, equipment, and technology, and invests in innovative technologies and R&D[39](index=39&type=chunk) - The Group is exploring business expansion into corporate venture capital and other upstream and downstream healthcare sectors, with plans for international cooperation[39](index=39&type=chunk) [Strengthening Sustainable Development](index=14&type=section&id=4.2.4%20%E5%8A%A0%E5%BC%B7%E5%8F%AF%E6%8C%81%E7%BA%8C%E7%99%BC%E5%B1%95) The Group deeply integrates sustainable development into its operations by monitoring consumables, energy consumption, and waste generation, optimizing procurement and treatment processes, building low-carbon workspaces, and cultivating versatile talents to achieve 'cost reduction and efficiency improvement' and align hospital development with social responsibility - The Group optimizes procurement, diagnosis, and cleaning processes by monitoring consumables usage, energy consumption, and waste generation, aiming for "cost reduction and efficiency improvement"[40](index=40&type=chunk) - The Group builds low-carbon workspaces, implements energy-saving equipment upgrades and paperless offices, and establishes a sustainable talent pool to cultivate versatile professionals[40](index=40&type=chunk) [Financial Review](index=14&type=section&id=4.3%20%E8%B2%A1%E5%8B%99%E5%9B%9E%E9%A1%A7) During the reporting period, the Group's revenue increased by 28.9% year-on-year, primarily due to advertising and the addition of a new hospital; all dental service categories saw revenue growth, with implant dentistry showing the largest increase; cost of sales rose with revenue, but gross margin slightly improved; administrative expenses significantly decreased, and loss for the period narrowed substantially [Revenue](index=14&type=section&id=4.3.1%20%E6%94%B6%E7%9B%8A) During the reporting period, the Group's revenue was approximately RMB 43.6 million, an increase of approximately 28.9% year-on-year, primarily due to effective advertising attracting more customers and the inclusion of Leqing Hospital's financial data - During the reporting period, the Group's revenue was approximately **RMB 43.6 million**, an increase of approximately **28.9%** year-on-year[41](index=41&type=chunk) - The increase in revenue is primarily attributed to effective advertising attracting more customers and the inclusion of Leqing Hospital's financial data[41](index=41&type=chunk) [Revenue by Dental Service Category](index=14&type=section&id=4.3.2%20%E6%8C%89%E7%89%99%E7%A7%91%E6%9C%8D%E5%8B%99%E9%A1%9E%E5%88%A5%E5%8A%83%E5%88%86%E7%9A%84%E6%94%B6%E7%9B%8A) All dental service categories achieved revenue growth, with implant dentistry showing the largest increase at 75.6%, primarily due to advertising; orthodontics revenue grew by 42.5%, while general dentistry and prosthodontics increased by 14.4% and 28.5% respectively Revenue by Dental Service Category | Service Category | For the six months ended June 30, 2025 (RMB million) | For the six months ended June 30, 2024 (RMB million) | Year-on-year growth (%) | % of Total Revenue (2025) | % of Total Revenue (2024) | | :--- | :--- | :--- | :--- | :--- | :--- | | General Dentistry | 16.3 | 14.3 | +14.4% | 37.5% | 42.2% | | Orthodontics | 8.2 | 5.7 | +42.5% | 18.8% | 17.0% | | Prosthodontics | 9.1 | 7.1 | +28.5% | 20.9% | 21.0% | | Implant Dentistry | 7.6 | 4.3 | +75.6% | - | - | - Implant dentistry revenue increased by **75.6%**, primarily due to increased advertising efforts for the implant department across the Group's hospitals, attracting more new customers[45](index=45&type=chunk) - Orthodontics revenue increased by **42.5%**, mainly due to auditors adjusting the required treatment period for orthodontics and re-recognizing revenue[43](index=43&type=chunk) [Cost of Sales, Gross Profit and Gross Margin](index=15&type=section&id=4.3.3%20%E9%8A%B7%E5%94%AE%E6%88%90%E6%9C%AC%E3%80%81%E6%AF%9B%E5%88%A9%E5%8F%8A%E6%AF%9B%E5%88%A9%E7%8E%87) Cost of sales increased by 28.4% to RMB 27.6 million, mainly due to higher inventory costs and depreciation expenses; gross profit increased by 29.7% year-on-year to RMB 16.0 million, with gross margin slightly rising to 36.8% - Cost of sales increased by **28.4% to RMB 27.6 million**, primarily due to higher inventory costs and depreciation expenses for property, plant and equipment, and right-of-use assets[46](index=46&type=chunk) - Gross profit increased by **29.7% to RMB 16.0 million** year-on-year, with gross margin slightly rising to **36.8%** (2024: 36.5%), mainly due to increased revenue and some fixed cost components in cost of sales[47](index=47&type=chunk) [Other Income and Expenses](index=16&type=section&id=4.3.4%20%E5%85%B6%E4%BB%96%E6%94%B6%E5%85%A5%E5%8F%8A%E9%96%8B%E6%94%AF) Other income and gains decreased by 43.1% to RMB 1.6 million, primarily due to lower bank interest income; selling expenses increased by 21.6% to RMB 13.6 million, mainly due to higher marketing and promotion expenses; administrative expenses decreased by 33.6% to RMB 11.6 million, benefiting from senior management reassignments and effective human resource management - Other income and gains decreased by **43.1% to RMB 1.6 million**, primarily due to lower bank interest income[48](index=48&type=chunk) - Selling expenses increased by **21.6% to RMB 13.6 million**, mainly due to higher marketing and promotion expenses[49](index=49&type=chunk) - Administrative expenses decreased by **33.6% to RMB 11.6 million**, primarily due to reduced staff costs from senior management reassignments and strict implementation of effective human resource management[50](index=50&type=chunk) [Income Tax and Loss for the Period](index=16&type=section&id=4.3.5%20%E6%89%80%E5%BE%97%E7%A8%85%E8%88%87%E6%9C%9F%E5%85%A7%E虧%E6%90%8D) Income tax expense increased to RMB 1.2 million, primarily due to higher revenue during the reporting period; loss attributable to owners of the company narrowed to RMB 10.0 million, a significant improvement from RMB 15.1 million in the prior period - Income tax expense increased to **RMB 1.2 million** (2024: RMB 0.7 million), primarily due to higher revenue during the reporting period[51](index=51&type=chunk) - Loss attributable to owners of the company narrowed to **RMB 10.0 million** (2024: RMB 15.1 million)[52](index=52&type=chunk) [Liquidity, Financial Resources and Capital Structure](index=17&type=section&id=4.3.6%20%E6%B5%81%E5%8B%95%E6%80%A7%E3%80%81%E8%B2%A1%E5%8B%99%E8%B3%87%E6%BA%90%E5%8F%8A%E8%B3%87%E6%9C%AC%E7%B5%90%E6%A7%8B) As of June 30, 2025, the Group's net current assets were RMB 51.3 million, current ratio was 2.0 times, and cash and cash equivalents were RMB 73.0 million; the Group had no bank loans, making the gearing ratio not applicable Liquidity and Financial Resources Overview | Indicator | As of June 30, 2025 (RMB million) | As of December 31, 2024 (RMB million) | | :--- | :--- | :--- | | Net current assets | 51.3 | 58.2 | | Current ratio | 2.0 times | 2.4 times | | Cash and cash equivalents | 73.0 | 78.5 | | Bank loans | Nil | Nil | - The Group primarily funds its operations through cash generated from operations and net proceeds from the global offering[54](index=54&type=chunk) [Other Financial Disclosures](index=17&type=section&id=4.3.7%20%E5%85%B6%E4%BB%96%E8%B2%A1%E5%8B%99%E6%8A%AB%E9%9C%B2) The Group has no pledged assets, significant contingent liabilities, or guarantees; capital commitments primarily for leasehold improvements and medical equipment acquisition amount to approximately RMB 2.5 million; the Group remains vigilant to RMB and HKD exchange rate fluctuations and plans to use net proceeds from global offering for business expansion and working capital - As of June 30, 2025, the Group has no pledged assets, significant contingent liabilities, or guarantees[55](index=55&type=chunk)[58](index=58&type=chunk) - Capital commitments amount to approximately **RMB 2.5 million**, primarily for leasehold improvements and acquisition of medical equipment[57](index=57&type=chunk) - The Group remains vigilant to exchange rate fluctuations between RMB and HKD and will consider hedging measures if necessary[56](index=56&type=chunk) - The Group plans to use net proceeds from the global offering for business expansion and working capital, with no other significant future plans for investments or capital assets currently[61](index=61&type=chunk) [Other Information](index=19&type=section&id=V.%20%E5%85%B6%E4%BB%96%E4%BF%A1%E6%81%AF) [Securities Transactions and Dividends](index=19&type=section&id=5.1%20%E8%AD%89%E5%88%B8%E4%BA%A4%E6%98%93%E8%88%87%E8%82%A1%E6%81%AF) During the reporting period, neither the company nor its subsidiaries purchased, sold, or redeemed any listed securities; the Board resolved not to declare an interim dividend - For the six months ended June 30, 2025, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[63](index=63&type=chunk) - The Board resolved not to recommend an interim dividend for the six months ended June 30, 2025[65](index=65&type=chunk) [Corporate Governance](index=19&type=section&id=5.2%20%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB) The Group is committed to maintaining high standards of corporate governance and business ethics, complying with all code provisions of the Corporate Governance Code in Appendix C1 Part 2 of the Listing Rules, except for the non-segregation of Chairman and Chief Executive roles (Code Provision C.2.1), which the Board believes ensures consistent internal leadership and decision-making efficiency - The Group is committed to maintaining high standards of corporate governance and business ethics to optimize its long-term interests and those of its shareholders[66](index=66&type=chunk) - The Group complies with all code provisions of the Corporate Governance Code, except for a deviation from Code Provision C.2.1 (non-segregation of Chairman and Chief Executive roles)[68](index=68&type=chunk) - The Board believes that combining the roles of Chairman and Chief Executive in the same person ensures consistent internal leadership, leading to more effective and efficient overall strategic planning[69](index=69&type=chunk) - The Board has received written confirmation from all Directors confirming their strict compliance with the Model Code for Securities Transactions by Directors of Listed Issuers during the reporting period[71](index=71&type=chunk) [Audit Committee](index=20&type=section&id=5.3%20%E5%AF%A9%E6%A0%B8%E5%A7%94%E5%93%A1%E6%9C%83) The Audit Committee, comprising three independent non-executive directors, is responsible for reviewing and overseeing the company's financial reporting process, risk management, and internal control systems; the Committee has reviewed this interim results announcement and believes appropriate accounting policies were adopted and Listing Rules complied with during preparation - The Audit Committee, composed of three independent non-executive directors, is responsible for reviewing and overseeing the company's financial reporting process, risk management, and internal control systems[72](index=72&type=chunk) - The Audit Committee has reviewed this interim results announcement and believes that appropriate accounting policies were adopted and applicable Listing Rules complied with during its preparation[72](index=72&type=chunk) [Publication of Report and Acknowledgements](index=21&type=section&id=5.4%20%E5%A0%B1%E5%91%8A%E5%88%8A%E8%BC%89%E8%88%87%E8%87%B4%E8%AC%9D) This interim results announcement has been published on the HKEX website and the company's website; the interim report will be dispatched to shareholders and posted on the website by September 30, 2025; the Board extends its sincere gratitude to all supporters - This interim results announcement has been published on the HKEX website (www.hkexnews.hk) and the Company's website (www.meihaomedical.com)[73](index=73&type=chunk) - The Board extends its sincere gratitude to shareholders, management team, employees, and business partners[74](index=74&type=chunk)

Financial Performance - Revenue decreased by 9% to approximately HKD 122.8 million compared to HKD 135.3 million in the same period last year[4] - Profit attributable to owners decreased by 56% to approximately HKD 8.2 million, down from HKD 18.5 million in the previous year[4] - Basic earnings per share were approximately HKD 0.58, compared to HKD 1.31 in the same period last year[4] - Gross profit margin decreased, with gross profit at HKD 47.3 million compared to HKD 48.8 million last year[6] - Operating profit fell to HKD 7.5 million from HKD 17.0 million in the previous year[6] - Total comprehensive income for the period was HKD 13.4 million, down from HKD 15.4 million last year[8] - Revenue from customer contracts for the six months ended June 30, 2025, was HKD 122,775,000, a decrease of 9.3% compared to HKD 135,347,000 for the same period in 2024[23] - Gross profit for the six months ended June 30, 2025, was HKD 47,277,000, slightly down from HKD 48,767,000 in 2024, reflecting a gross margin of approximately 38.5%[24] - The company reported a net profit before tax of HKD 7,734,000 for the six months ended June 30, 2025, a significant decrease of 57.0% from HKD 17,978,000 in the same period of 2024[24] - The total number of wine bottles sold decreased to approximately 4.8 million for the period, down from 5.2 million in 2024[39] - The cost of goods sold decreased by 13% to HKD 75,500,000 for the six months ended June 30, 2025, compared to HKD 86,600,000 in 2024[40] Assets and Liabilities - Cash and bank balances decreased to HKD 86.2 million from HKD 122.6 million at the end of the previous year[9] - Total assets decreased to HKD 523.8 million from HKD 580.5 million at the end of the previous year[10] - Total liabilities decreased to HKD 177.5 million from HKD 256.2 million at the end of the previous year[10] - Equity attributable to owners increased to HKD 318.5 million from HKD 310.0 million at the end of the previous year[10] - The provision for expected credit losses on accounts receivable was HKD 13,148,000 as of June 30, 2025, compared to HKD 12,458,000 as of December 31, 2024[33] - The company's debt-to-asset ratio as of June 30, 2025, was approximately 34%, a decrease from 44% as of December 31, 2024, indicating improved financial health[77] Expenses and Costs - Employee costs, including salaries and benefits, increased to HKD 20,983,000 for the six months ended June 30, 2025, compared to HKD 20,552,000 in 2024[6] - The total employee compensation and related costs for the six months ended June 30, 2025, amounted to approximately HKD 23,900,000, an increase from HKD 23,300,000 in 2024, primarily due to an increase in headcount and temporary labor costs[74] - The company's financial income decreased to approximately HKD 300,000 from HKD 900,000 in the previous year, primarily due to lower interest income[48] - The company experienced increased promotional and advertising expenses during the review period, impacting operating profit[37] - Distribution costs rose to 23% of total revenue from 16% in the previous year, driven by increased marketing resources, particularly in e-commerce and promotions in Shanghai and Tianjin[46] - Management expenses accounted for 15% of total revenue, up from 11% in the previous year, due to increased employee and related costs amid declining revenue[47] Marketing and Product Development - The company continued to implement marketing reforms and product strategies, including nationwide tasting events and promotional activities for its latest product lineup[51] - The company focused on a "5+4+N product strategy," launching new products to meet diverse consumer needs in China[52] - The group launched over 100 types of grape wine products under the "Dynasty" brand, catering to various consumer preferences in the Chinese grape wine market[53] - New high-end products were introduced, including the "Dynasty Year of the Snake" commemorative red wine, which integrates Chinese zodiac culture to attract younger consumers[53] - The group continues to enhance its product offerings, launching new products such as the "Tianyang Tea Wine Series" and "Dynasty Baifeng VSOP Brandy" at the 112th National Sugar and Wine Products Trade Fair[54] - The group is focused on improving online sales channels and optimizing the online store interface to adapt to changing consumer behaviors in China[59] - The group is actively cultivating e-commerce live-streaming talent to further expand sales channels and establish new customer bases[58] Corporate Governance and Compliance - The company has adopted the standards for securities trading as per the listing rules and confirmed compliance until June 30, 2025[83] - The company is committed to enhancing shareholder value through robust corporate governance practices[84] - The company has adhered to the corporate governance code as per the listing rules until June 30, 2025, with regular reviews planned[85] - The interim results will be published on the company's website and the stock exchange website, ensuring transparency and compliance with listing regulations[86] Future Plans and Strategic Initiatives - The group plans to increase direct procurement of quality grapes from Ningxia and Xinjiang, ensuring the quality and freshness of grape juice meet the group's standards[63] - A joint venture was established in Jiangsu and Guizhou to produce and sell yellow wine and sauce-flavored liquor, aiming to enhance the group's industry layout and create new growth opportunities[65] - The group aims to enhance brand vitality through innovative marketing strategies and expand market share for its products, positioning itself as a representative of domestic wine in China[69] - The company plans to build a 3,000-ton yellow wine and special yellow wine production facility in Jiangsu by the second half of 2025, aiming to expand its product range and capitalize on the growth opportunities in the Chinese yellow wine industry[72] - The group continues to explore new market opportunities through its newly established joint ventures in the liquor beverage sector[70] - The group continues to import high-quality wines from French wineries to meet the market demand for premium foreign wines[56]

[Company Information and Financial Summary](index=1&type=section&id=I.%20Company%20Information%20and%20Financial%20Summary) This section provides an overview of the company's profile, including its registration, business, and ultimate controlling shareholders, along with a summary of its financial performance for the period [Company Overview](index=1&type=section&id=1%2E1%20Company%20Overview) Xuan Wu Cloud Technology Holdings Limited, registered in the Cayman Islands, provides smart CRM services in China, with its unaudited interim financials approved on August 28, 2025 - Company Name: **Xuan Wu Cloud Technology Holdings Limited**[2](index=2&type=chunk) - Registered in the **Cayman Islands**[2](index=2&type=chunk)[8](index=8&type=chunk) - Primary business: Providing **smart Customer Relationship Management (CRM) services** in China[8](index=8&type=chunk) - Ultimate controlling shareholders: Mr. Chen Yonghui, Mr. Huang Fangjie, and Mr. Li Hairong[8](index=8&type=chunk) - Financial information is presented in **RMB thousands** and rounded to the nearest thousand[9](index=9&type=chunk) - The condensed consolidated interim financial information is **unaudited** and was approved for publication by the Board on **August 28, 2025**[9](index=9&type=chunk)[10](index=10&type=chunk) [Financial Performance Summary](index=1&type=section&id=1%2E2%20Financial%20Performance%20Summary) For the six months ended June 30, 2025, revenue decreased by **36.5%** to **RMB 410,907 thousands**, gross profit declined, and the company incurred an operating loss Financial Performance Summary for the Six Months Ended June 30, 2025 | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 410,907 | 647,469 | (36.5) | | Gross Profit | 74,950 | 101,249 | (26.0) | | Operating Loss | (26,968) | (4,106) | N/A | | Loss Before Tax | (29,084) | (5,912) | N/A | | Loss Attributable to Owners of the Company | (25,874) | (6,444) | N/A | | Loss Per Share (RMB) | (0.048) | (0.012) | N/A | [Condensed Consolidated Financial Statements](index=2&type=section&id=II.%20Condensed%20Consolidated%20Financial%20Statements) This section presents the company's condensed consolidated statement of comprehensive income and financial position for the reporting period, detailing revenue, expenses, assets, and liabilities [Condensed Consolidated Statement of Comprehensive Income](index=2&type=section&id=2%2E1%20Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) For the six months ended June 30, 2025, revenue was **RMB 410,907 thousands**, cost of sales **RMB 335,957 thousands**, resulting in a gross profit of **RMB 74,950 thousands**, with an operating loss of **RMB 26,968 thousands** and a loss attributable to owners of the company of **RMB 25,874 thousands** Condensed Consolidated Statement of Comprehensive Income for the Six Months Ended June 30, 2025 | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Revenue | 410,907 | 647,469 | | Cost of Sales | (335,957) | (546,220) | | Gross Profit | 74,950 | 101,249 | | Selling and Distribution Expenses | (48,789) | (49,854) | | Administrative Expenses | (22,853) | (23,353) | | Research and Development Expenses | (28,598) | (32,790) | | Operating Loss | (26,968) | (4,106) | | Loss Before Income Tax | (29,084) | (5,912) | | Loss and Total Comprehensive Loss for the Period | (29,238) | (6,140) | | Loss Attributable to Owners of the Company | (25,874) | (6,444) | | Basic and Diluted Loss Per Share (RMB) | (0.048) | (0.012) | [Condensed Consolidated Statement of Financial Position](index=3&type=section&id=2%2E2%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, total assets were **RMB 624,742 thousands**, total equity **RMB 299,469 thousands**, and total liabilities **RMB 325,273 thousands**, showing slight asset decrease and adjusted equity/liability structure compared to year-end 2024 Condensed Consolidated Statement of Financial Position as of June 30, 2025 | Metric | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | **Assets** | | | | Non-current Assets | 32,569 | 39,765 | | Current Assets | 592,173 | 594,043 | | **Total Assets** | **624,742** | **633,808** | | **Equity** | | | | Equity Attributable to Owners of the Company | 306,665 | 331,621 | | Non-controlling Interests | (7,196) | (3,552) | | **Total Equity** | **299,469** | **328,069** | | **Liabilities** | | | | Non-current Liabilities | 2,137 | 8,026 | | Current Liabilities | 323,136 | 297,713 | | **Total Liabilities** | **325,273** | **305,739** | | **Total Equity and Liabilities** | **624,742** | **633,808** | [Notes to the Financial Information](index=5&type=section&id=III.%20Notes%20to%20the%20Financial%20Information) This section provides detailed notes on the financial information, covering general data, accounting policies, segment performance, revenue, expenses, financing, taxation, and balance sheet items [General Information and Basis of Preparation](index=5&type=section&id=3%2E1%20General%20Information%20and%20Basis%20of%20Preparation) This section outlines the company's registration, primary business, controlling shareholders, and the presentation currency and approval date of its unaudited interim financial information, prepared under HKAS 34 - Financial information is presented in **RMB thousands** and rounded to the nearest thousand[9](index=9&type=chunk) - The condensed consolidated interim financial information is **unaudited** and was approved for publication by the Board on **August 28, 2025**[9](index=9&type=chunk)[10](index=10&type=chunk) - Prepared in accordance with **Hong Kong Accounting Standard 34 "Interim Financial Reporting"**[11](index=11&type=chunk) [Accounting Policies](index=6&type=section&id=3%2E2%20Accounting%20Policies) The Group's accounting policies are consistent with its 2024 annual financial statements, with new and revised standards adopted having no material impact on the interim financial information, and no significant future impact expected - Adoption of new and revised standards (e.g., HKAS 21 and HKFRS 1 amendments) had **no material impact**[12](index=12&type=chunk)[13](index=13&type=chunk) - New standards effective in the future (e.g., HKFRS 9, 7, 18, 19, 10 and HKAS 28 amendments) are **not expected to have a material impact** on the condensed consolidated interim financial information[14](index=14&type=chunk)[15](index=15&type=chunk) [Segment Information](index=7&type=section&id=3%2E3%20Segment%20Information) The company's chief operating decision-maker assesses performance based on gross profit from CRM PaaS and SaaS services, with PaaS revenue at **RMB 165,951 thousands** and SaaS revenue at **RMB 244,956 thousands** for the six months ended June 30, 2025, with SaaS contributing higher gross profit [Overview of Segments and Principal Activities](index=7&type=section&id=3%2E3%2E1%20Overview%20of%20Segments%20and%20Principal%20Activities) The company's chief operating decision-maker categorizes business into CRM PaaS and CRM SaaS services, with PaaS offering telecom network communication capabilities and SaaS providing one-stop smart CRM solutions like marketing, sales, and customer service clouds - Operating segments: **CRM PaaS services (cPaaS)** and **CRM SaaS services** (Marketing Cloud, Sales Cloud, Customer Service Cloud)[17](index=17&type=chunk)[18](index=18&type=chunk) - The chief operating decision-maker assesses performance based on **gross profit** for each segment, without using separate segment asset and liability information[18](index=18&type=chunk) - Most assets are located in **China**[19](index=19&type=chunk) [Segment Performance](index=8&type=section&id=3%2E3%2E2%20Segment%20Performance) For the six months ended June 30, 2025, PaaS revenue was **RMB 165,951 thousands** and SaaS revenue was **RMB 244,956 thousands**, totaling **RMB 410,907 thousands**, with the SaaS segment contributing higher gross profit Segment Performance for the Six Months Ended June 30, 2025 | Metric | PaaS (RMB thousands) | SaaS (RMB thousands) | Total (RMB thousands) | | :--- | :--- | :--- | :--- | | Revenue | 165,951 | 244,956 | 410,907 | | Cost of Sales | (156,000) | (179,957) | (335,957) | | Gross Profit | 9,951 | 64,999 | 74,950 | Segment Performance for the Six Months Ended June 30, 2024 | Metric | PaaS (RMB thousands) | SaaS (RMB thousands) | Total (RMB thousands) | | :--- | :--- | :--- | :--- | | Revenue | 282,411 | 365,058 | 647,469 | | Cost of Sales | (265,456) | (280,764) | (546,220) | | Gross Profit | 16,955 | 84,294 | 101,249 | [Revenue Analysis](index=10&type=section&id=3%2E4%20Revenue%20Analysis) For the six months ended June 30, 2025, PaaS revenue was **RMB 165,951 thousands** and SaaS revenue was **RMB 244,956 thousands**, with most revenue recognized at a point in time and an increase in contract liabilities Revenue Analysis by Category for the Six Months Ended June 30 | Category | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | PaaS | 165,951 | 282,411 | | SaaS | 244,956 | 365,058 | | **Total** | **410,907** | **647,469** | Revenue Analysis by Timing of Revenue Recognition from Customer Contracts for the Six Months Ended June 30 | Timing of Recognition | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | At a point in time | 390,237 | 629,875 | | Over a period of time | 20,670 | 17,594 | | **Total** | **410,907** | **647,469** | - Contract liabilities increased from **RMB 37,535 thousands** as of December 31, 2024, to **RMB 62,158 thousands** as of June 30, 2025[23](index=23&type=chunk) [Expense Analysis](index=11&type=section&id=3%2E5%20Expense%20Analysis) For the six months ended June 30, 2025, total expenses were **RMB 436,197 thousands**, primarily comprising telecom resource costs and employee benefit expenses, both of which decreased year-on-year, while other income fell **42.9%** due to reduced government grants and VAT refunds Expense Analysis for the Six Months Ended June 30 | Expense Category | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Telecom resource costs | 321,281 | 516,683 | | Employee benefit expenses | 86,137 | 98,332 | | Travel and entertainment expenses | 6,536 | 8,284 | | Outsourced customer service expenses | 5,746 | 5,590 | | Depreciation and amortization expenses | 4,724 | 4,984 | | Infrastructure and equipment expenses | 3,916 | 3,542 | | Professional service fees | 3,294 | 2,711 | | Marketing and promotion expenses | 929 | 1,383 | | Taxes and other levies | 837 | 1,219 | | Conference and office expenses | 653 | 914 | | Outsourced implementation costs | 330 | 5,751 | | Lease payments for short-term leases | 240 | 246 | | Auditor's remuneration | 75 | 9 | | Others | 1,499 | 2,569 | | **Total** | **436,197** | **652,217** | - Other income decreased by **42.9%** to **RMB 1,636 thousands**, primarily due to reduced government grants and VAT refunds[24](index=24&type=chunk)[26](index=26&type=chunk)[71](index=71&type=chunk) [Net Finance Costs](index=12&type=section&id=3%2E6%20Net%20Finance%20Costs) For the six months ended June 30, 2025, the company recorded net finance costs of **RMB 2,116 thousands**, an increase from **RMB 1,806 thousands** in the prior period, primarily driven by interest expense on borrowings Net Finance Costs for the Six Months Ended June 30 | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Finance income (interest on bank deposits) | 101 | 578 | | Finance costs (interest on lease liabilities) | (91) | (250) | | Finance costs (interest on borrowings) | (2,126) | (2,134) | | **Net Finance Costs** | **(2,116)** | **(1,806)** | [Income Tax Expense](index=12&type=section&id=3%2E7%20Income%20Tax%20Expense) The company is tax-exempt in the Cayman Islands and BVI, with no assessable profits in Hong Kong; mainland China operations typically face a 25% corporate income tax, but high-tech enterprises like Xuan Wu enjoy a 15% preferential rate, and small low-profit enterprises a 20% rate, with income tax expense for the six months ended June 30, 2025, being **RMB 154 thousands** - Tax-exempt in the **Cayman Islands** and **British Virgin Islands**, with no assessable profits in Hong Kong[28](index=28&type=chunk)[29](index=29&type=chunk) - China's corporate income tax rate is typically **25%**, but high-tech enterprises (Xuan Wu) enjoy a **15% preferential rate** until December 2027[30](index=30&type=chunk)[31](index=31&type=chunk) - Small low-profit enterprises enjoy a **20% preferential tax rate**, with taxable income below **RMB 3.0 million** taxed at 25%[32](index=32&type=chunk) Income Tax Expense for the Six Months Ended June 30 | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Current income tax | – | (13) | | Deferred income tax | (154) | (215) | | **Income Tax Expense** | **(154)** | **(228)** | [Loss Per Share](index=13&type=section&id=3%2E8%20Loss%20Per%20Share) For the six months ended June 30, 2025, basic loss per share expanded to **RMB 0.048**, from **RMB 0.012** in the prior period, with diluted loss per share equaling basic loss per share due to the company's loss Loss Per Share for the Six Months Ended June 30 | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Loss Attributable to Owners of the Company (RMB thousands) | (25,874) | (6,444) | | Weighted average number of ordinary shares deemed to be issued (thousands) | 536,268 | 547,162 | | **Basic Loss Per Share Attributable to Owners of the Company for the Period (RMB)** | **(0.048)** | **(0.012)** | - Diluted loss per share is equal to basic loss per share, as potential ordinary shares have an anti-dilutive effect[36](index=36&type=chunk) [Trade and Other Receivables and Prepayments](index=14&type=section&id=3%2E9%20Trade%20and%20Other%20Receivables%20and%20Prepayments) As of June 30, 2025, trade receivables, bills receivable, other receivables, and prepayments totaled **RMB 485,907 thousands**, a decrease from **RMB 513,107 thousands** at year-end 2024, with an increase in impairment provision for trade receivables Trade Receivables, Bills Receivable, Other Receivables and Prepayments as of June 30, 2025 | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Trade receivables (net) | 262,479 | 286,396 | | Impairment provision for trade receivables | (35,684) | (32,937) | | Bills receivable | – | 1,514 | | Other receivables (net) | 13,712 | 15,887 | | Prepayments to suppliers | 208,679 | 207,966 | | Prepaid taxes | 1,037 | 1,344 | | **Total** | **485,907** | **513,107** | - Trade receivables aging analysis shows the highest proportion for balances not exceeding three months, but balances over two years have increased[38](index=38&type=chunk) [Borrowings](index=15&type=section&id=3%2E10%20Borrowings) As of June 30, 2025, current bank borrowings were **RMB 143,619 thousands**, largely consistent with year-end 2024, with some borrowings secured by company patents and others by company guarantees Borrowings as of June 30, 2025 | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Current bank borrowings | 143,619 | 144,040 | - Some bank borrowings are secured by certain patents of the Group, while others are guaranteed by the Company[40](index=40&type=chunk) [Trade and Other Payables](index=16&type=section&id=3%2E11%20Trade%20and%20Other%20Payables) As of June 30, 2025, trade payables, bills payable, and other payables totaled **RMB 112,023 thousands**, a slight increase from **RMB 108,764 thousands** at year-end 2024, primarily comprising telecom expenses and server rental fees Trade and Other Payables as of June 30, 2025 | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Trade payables (third parties) | 89,635 | 85,772 | | Other payables (third parties) | 6,193 | 5,697 | | Accrued salaries | 9,887 | 10,582 | | Other taxes payable | 6,308 | 6,713 | | **Total** | **112,023** | **108,764** | - Trade payables primarily refer to **telecom expenses payable** and **server rental fees payable**[42](index=42&type=chunk) - Trade payables aging analysis shows an increase in balances over six months old[42](index=42&type=chunk) [Dividends](index=16&type=section&id=3%2E12%20Dividends) The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025, consistent with the prior period - The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025[43](index=43&type=chunk) [Business Review](index=17&type=section&id=IV.%20Business%20Review) This section reviews the company's overall business performance, including revenue trends, SaaS segment details, and ecosystem development initiatives during the reporting period [Overall Business Performance](index=17&type=section&id=4%2E1%20Overall%20Business%20Performance) In the first half, the company strengthened its AI capabilities, but domestic revenue from PaaS and some SaaS declined **36.5%** to **RMB 410.9 million** due to telecom regulatory adjustments, while overseas cloud communication business grew rapidly, and overall gross margin improved with positive operating cash flow - Driven by global digital economy and AI innovation, the company, as a smart CRM service provider, continues to **strengthen its AI capabilities**[44](index=44&type=chunk) - Total revenue decreased by **36.5%** year-on-year to **RMB 410.9 million**, primarily due to domestic telecom industry regulatory adjustments impacting PaaS and some SaaS revenue[45](index=45&type=chunk) - Overseas cloud communication business achieved rapid customer and revenue growth, covering Southeast Asia, Latin America, East Asia, and the Middle East[45](index=45&type=chunk) - Focusing on AI+SaaS business, **gross margin steadily improved**, and **operating cash flow turned positive**[46](index=46&type=chunk) - Obtained a total of **410 authorized patents and computer software copyrights**, with **11 new additions** during the reporting period[46](index=46&type=chunk) - Provided digital transformation and upgrade services to **2,351 customers** across four major industries: finance, fast-moving consumer goods, government and enterprises, and TMT[46](index=46&type=chunk) [SaaS Business Segmentation](index=17&type=section&id=4%2E2%20SaaS%20Business%20Segmentation) SaaS business, comprising Marketing Cloud, Sales Cloud, and Customer Service Cloud, generated **RMB 245.0 million** in revenue, a **32.9%** year-on-year decrease due to policy impacts and active reduction of loss-making projects, but SaaS gross margin improved to **26.5%**, with core customers contributing **RMB 1.3 million** per capita - SaaS business revenue was **RMB 245.0 million**, a **32.9%** year-on-year decrease, with gross margin improving to **26.5%**[47](index=47&type=chunk) - Core customer revenue accounted for **95.0%** of total customer revenue, with an average contribution of **RMB 1.3 million** per core customer[47](index=47&type=chunk) - SaaS core customer count was **1,558**, with an average contribution of **RMB 1.1 million** per person[47](index=47&type=chunk) [Marketing Cloud](index=18&type=section&id=4%2E2%2E1%20Marketing%20Cloud) Marketing Cloud served financial and government clients, generating **RMB 189.7 million** in revenue, a **38.1%** year-on-year decrease due to telecom regulatory policies, while ICC completed 5G message capability upgrades, increased trusted computing adaptations to 14, and adapted to HarmonyOS, maintaining over **90%** project win rate - Marketing Cloud revenue was **RMB 189.7 million**, a **38.1%** year-on-year decrease[48](index=48&type=chunk) - ICC (Integrated Communication Center) completed adaptation to the latest direct connection protocols of mainstream domestic telecom operators, fully upgrading its **5G message delivery capabilities**[48](index=48&type=chunk) - ICC's trusted computing adaptations increased to **14**, completing HarmonyOS adaptation for components like "Jiyan" and "iPush", maintaining an over **90% project win rate**[48](index=48&type=chunk) - DMP Smart Marketing Cloud platform deeply serves government, enterprise, and e-commerce sectors, assisting enterprises in building digital marketing and operation systems[48](index=48&type=chunk) [Sales Cloud](index=19&type=section&id=4%2E2%2E2%20Sales%20Cloud) Sales Cloud, focusing on AI+CRM for consumer goods, generated **RMB 28.6 million** in revenue, a **33.6%** year-on-year decrease due to active reduction of loss-making projects, but with improved gross margin; core product [Smart 100] enhanced features, Smart U-Customer upgraded with Huawei Ascend AI and Deep Seek large models for "second-level response," and AI product offerings expanded to 12 standard products including SKU Super Model and "AI Photo Detective" - Sales Cloud revenue was **RMB 28.6 million**, a **33.6%** year-on-year decrease, but with **improved gross margin**[52](index=52&type=chunk) - Annual Recurring Revenue (ARR) accounted for **62.9%** of Sales Cloud revenue, a **12.4 percentage point** increase year-on-year[53](index=53&type=chunk) - Core product [Smart 100] enhanced features, adding configuration components like "Super Form" and "Survey Questionnaire"[50](index=50&type=chunk) - Smart U-Customer fully upgraded based on Huawei Ascend AI ecosystem and Deep Seek large models, achieving "second-level response" for customer profile analysis and business opportunity prediction, and releasing multi-language versions[50](index=50&type=chunk) - Launched AI products based on self-developed Xuan Tao large model and open-source large models like Deep Seek, including **SKU Super Model** and "**AI Photo Detective**"[51](index=51&type=chunk) - The number of AI standard products increased to **12**, adding functions such as terminal display empty space detection and layered detection[51](index=51&type=chunk) - Developed multiple AI intelligent agents based on the aPaaS platform, such as "Development Assistant," "Market Survey Assistant," "Voice Operation Assistant," and "Smart Xuan" for Smart U-Customer[51](index=51&type=chunk) - AIoT Smart Refrigerator continued to expand offline terminal store coverage and iterated on dynamic sales application scenarios[52](index=52&type=chunk) [Customer Service Cloud](index=20&type=section&id=4%2E2%2E3%20Customer%20Service%20Cloud) Customer Service Cloud further increased its market share in post-loan management SaaS, with seat scale growing **19.9%** year-on-year, expanding product capabilities from outbound calls to all touchpoints, integrating Deep Seek and other open-source large models to develop a script voice configuration robot that reduces workload by **90%**, and achieving **RMB 26.6 million** in revenue, a **71.7%** year-on-year increase - Market share in post-loan management SaaS business increased, with seat scale growing by **19.9%** year-on-year[53](index=53&type=chunk) - Contact touchpoints expanded from outbound calls to all touchpoints, achieving breakthroughs in new post-loan management touchpoints such as SMS and flash messages[53](index=53&type=chunk) - Integrated Deep Seek and other open-source large models, developing a script voice configuration robot that can **reduce workload by 90%**[53](index=53&type=chunk) - Customer Service Cloud revenue was **RMB 26.6 million**, a significant **71.7%** year-on-year increase[53](index=53&type=chunk) [Ecosystem Development](index=20&type=section&id=4%2E3%20Ecosystem%20Development) The company actively builds its domestic resource and channel ecosystem, forming a strategic partnership with Tencent Cloud, collaborating with Huawei Ascend to upgrade product versions, and listing data products on Guangzhou and Shenzhen data exchanges to expand sales channels - Established a **strategic partnership with Tencent Cloud** to collaborate on AI products and services, cloud communication, and smart retail[54](index=54&type=chunk) - Collaborated with **Huawei Ascend** to jointly upgrade and iterate product versions[54](index=54&type=chunk) - Data products have been listed on the **Guangzhou and Shenzhen Data Exchanges** to expand sales channels[54](index=54&type=chunk) [Business Outlook](index=21&type=section&id=V.%20Business%20Outlook) This section outlines the company's future strategies, focusing on core product standardization, AI product development, and expanding its domestic and international ecosystem [Core Product Standardization and Profit Enhancement](index=21&type=section&id=5%2E1%20Core%20Product%20Standardization%20and%20Profit%20Enhancement) The company will focus on enhancing the standardization of core products across business lines, developing more standardized product components based on common requirements, and implementing standardized delivery processes to optimize delivery cycles, reduce project costs, and improve profit margins, while also enriching its AI standard product matrix for rapid scaling - Focus on enhancing **core product standardization**, developing more standardized product components, optimizing delivery cycles, reducing project costs, and improving profit margins[55](index=55&type=chunk) - Continue to enrich the **AI standard product matrix** based on customer business scenario demands to achieve rapid product scaling[55](index=55&type=chunk) [Key AI Product Operations and Financial Applications](index=21&type=section&id=5%2E2%20Key%20AI%20Product%20Operations%20and%20Financial%20Applications) The company will strengthen market expansion and operations for key AI products like SKU Super Model and "AI Photo Detective" to establish them as flagship AI products, while leveraging its financial industry client resources to develop AI applications for the financial sector, including intelligent agent development, smart customer service optimization, and digital humans, to deepen cooperation - Strengthen market expansion and operations for key AI products such as **SKU Super Model** and "**AI Photo Detective**" to build them into flagship AI products[56](index=56&type=chunk) - Leverage financial industry client resources to develop AI product applications for the financial sector, including intelligent agent development, smart customer service optimization, and digital humans[56](index=56&type=chunk) [Domestic and International Ecosystem Development and Market Responsiveness](index=21&type=section&id=5%2E3%20Domestic%20and%20International%20Ecosystem%20Development%20and%20Market%20Responsiveness) The company will continue to build its ecosystem, maintaining close ties with upstream and downstream partners, strengthening interactions and cooperation with telecom operators, cloud vendors, and industry peers, and plans to localize operations in some overseas regions, deepen cooperation with resource providers, and further expand its customer base to enhance market responsiveness - Continue to build the ecosystem, strengthening interactions and cooperation with **telecom operators, cloud vendors, and industry peers**[57](index=57&type=chunk) - Plan to achieve **localized operations in some overseas regions**, deepen cooperation with resource providers, and expand customer sources[57](index=57&type=chunk) [Management Discussion and Analysis](index=22&type=section&id=VI.%20Management%20Discussion%20and%20Analysis) This section provides management's detailed discussion and analysis of the company's financial performance, including revenue, expenses, profitability, liquidity, and financial resources [Financial Overview](index=22&type=section&id=6%2E1%20Financial%20Overview) This section analyzes the financial performance for the reporting period, detailing changes in revenue, cost of sales, gross profit, various expenses, and the ultimate loss, primarily attributing the decline in revenue and gross profit to domestic telecom regulatory adjustments, while SaaS gross margin improved, and the loss attributable to owners of the company expanded to **RMB 25.9 million** due to reduced PaaS and some SaaS sales - Total revenue decreased by **36.5%** to **RMB 410.9 million**, primarily due to domestic telecom industry regulatory adjustments[58](index=58&type=chunk) - The SaaS segment's proportion of total revenue increased to **59.6%** (2024: 56.4%), with PaaS accounting for **40.4%**[58](index=58&type=chunk) [Revenue Analysis](index=22&type=section&id=6%2E1%2E1%20Revenue%20Analysis) For the six months ended June 30, 2025, PaaS revenue decreased by **41.2%** to **RMB 166.0 million**, and SaaS revenue decreased by **32.9%** to **RMB 245.0 million**, primarily due to domestic telecom regulatory policy adjustments and the company's active reduction of loss-making projects Segment Revenue for the Six Months Ended June 30 | Segment | 2025 (RMB thousands) | Proportion (%) | 2024 (RMB thousands) | Proportion (%) | | :--- | :--- | :--- | :--- | :--- | | PaaS | 165,951 | 40.4 | 282,411 | 43.6 | | SaaS | 244,956 | 59.6 | 365,058 | 56.4 | | **Total** | **410,907** | **100.0** | **647,469** | **100.0** | - PaaS revenue decreased by **41.2%** to **RMB 166.0 million**, primarily due to domestic telecom industry regulatory policy adjustments[61](index=61&type=chunk) - SaaS revenue decreased by **32.9%** to **RMB 245.0 million**, primarily due to the company's active reduction of loss-making projects[63](index=63&type=chunk) SaaS Revenue Details for the Six Months Ended June 30 | Solution | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Marketing Cloud | 189,743 | 306,495 | | Sales Cloud | 28,590 | 43,061 | | Customer Service Cloud | 26,623 | 15,502 | | **Total** | **244,956** | **365,058** | [Cost of Sales](index=23&type=section&id=6%2E1%2E2%20Cost%20of%20Sales) For the six months ended June 30, 2025, cost of sales decreased by **38.5%** to **RMB 336.0 million**, consistent with the reduction in PaaS and SaaS business, with PaaS cost of sales decreasing by **41.2%** and SaaS cost of sales by **35.9%**, mainly due to lower telecom resource costs, labor costs, and outsourced implementation costs - Cost of sales decreased by **38.5%** to **RMB 336.0 million**, consistent with the reduction in PaaS and SaaS business[64](index=64&type=chunk) - PaaS cost of sales decreased by **41.2%** to **RMB 156.0 million**, primarily due to lower telecom resource costs[64](index=64&type=chunk) - SaaS cost of sales decreased by **35.9%** to **RMB 180.0 million**, primarily due to reduced telecom resource costs, labor costs, and outsourced implementation costs[64](index=64&type=chunk) [Gross Profit and Gross Margin](index=23&type=section&id=6%2E1%2E3%20Gross%20Profit%20and%20Gross%20Margin) Overall gross profit decreased by **26.0%** to **RMB 75.0 million**, but the overall gross margin increased from **15.6%** to **18.2%**, with PaaS gross margin remaining at **6.0%** and SaaS gross margin increasing to **26.5%** due to improved profitability of the core SaaS business - Overall gross profit decreased by **26.0%** to **RMB 75.0 million**[65](index=65&type=chunk) - Overall gross margin increased from **15.6%** to **18.2%**[65](index=65&type=chunk) - PaaS gross margin remained at **6.0%**[66](index=66&type=chunk) - SaaS gross margin increased to **26.5%** (2024: 23.1%), primarily due to improved profitability of the core SaaS business[66](index=66&type=chunk) [Selling and Distribution Expenses](index=24&type=section&id=6%2E1%2E4%20Selling%20and%20Distribution%20Expenses) Selling and distribution expenses decreased by **2.1%** to **RMB 48.8 million**, mainly due to reduced entertainment and travel expenses for sales and marketing personnel - Selling and distribution expenses decreased by **2.1%** to **RMB 48.8 million**[67](index=67&type=chunk) - Primarily due to reduced entertainment and travel expenses for sales and marketing personnel[67](index=67&type=chunk) [Administrative Expenses](index=24&type=section&id=6%2E1%2E5%20Administrative%20Expenses) Administrative expenses decreased by **2.1%** to **RMB 22.9 million**, primarily due to reduced employee benefit expenses - Administrative expenses decreased by **2.1%** to **RMB 22.9 million**[68](index=68&type=chunk) - Primarily due to reduced employee benefit expenses[68](index=68&type=chunk) [Research and Development Expenses](index=24&type=section&id=6%2E1%2E6%20Research%20and%20Development%20Expenses) Research and development expenses decreased by **12.8%** to **RMB 28.6 million**, primarily due to effective optimization of R&D processes and organization - Research and development expenses decreased by **12.8%** to **RMB 28.6 million**[69](index=69&type=chunk) - Primarily due to effective optimization of R&D processes and organization[69](index=69&type=chunk) [Net Impairment Loss on Financial Assets](index=24&type=section&id=6%2E1%2E7%20Net%20Impairment%20Loss%20on%20Financial%20Assets) Net impairment loss on financial assets slightly increased by **0.7%** to **RMB 2.7 million** - Net impairment loss on financial assets increased by **0.7%** to **RMB 2.7 million**[70](index=70&type=chunk) [Other Income](index=24&type=section&id=6%2E1%2E8%20Other%20Income) Other income decreased by **42.9%** to **RMB 1.6 million**, primarily due to reduced government grants and VAT refunds - Other income decreased by **42.9%** to **RMB 1.6 million**[71](index=71&type=chunk) - Primarily due to reduced government grants and VAT refunds[71](index=71&type=chunk) [Net Finance Costs](index=24&type=section&id=6%2E1%2E9%20Net%20Finance%20Costs) Net finance costs were **RMB 2.1 million**, an increase from **RMB 1.8 million** in the prior period - Net finance costs were **RMB 2.1 million** (2024: RMB 1.8 million)[72](index=72&type=chunk) [Income Tax Expense](index=25&type=section&id=6%2E1%2E10%20Income%20Tax%20Expense) Income tax expense remained at **RMB 0.2 million**, consistent with the prior period - Income tax expense was **RMB 0.2 million** (2024: RMB 0.2 million)[73](index=73&type=chunk) [Loss Attributable to Owners of the Company](index=25&type=section&id=6%2E1%2E11%20Loss%20Attributable%20to%20Owners%20of%20the%20Company) Loss attributable to owners of the company expanded to **RMB 25.9 million**, primarily due to increased telecom industry regulation in the first half of 2025, leading to reduced PaaS and some SaaS sales - Loss attributable to owners of the company was **RMB 25.9 million** (2024: RMB 6.4 million)[74](index=74&type=chunk) - The expanded loss was primarily due to increased telecom industry regulation in the first half of 2025, leading to reduced PaaS and some SaaS sales[74](index=74&type=chunk) [Liquidity and Financial Resources](index=25&type=section&id=6%2E2%20Liquidity%20and%20Financial%20Resources) The company maintains prudent financial management, actively monitoring liquidity, with cash and cash equivalents at **RMB 94.6 million** as of June 30, 2025, a **32.4%** increase from year-end 2024, and total debt of **RMB 150,939 thousands**, slightly down from year-end 2024, with no significant contingent liabilities or capital commitments - Adopts prudent financial management policies, actively monitoring liquidity, and maintaining sufficient financial resources[75](index=75&type=chunk) [Financial Policy](index=25&type=section&id=6%2E2%2E1%20Financial%20Policy) The company adopts prudent financial management policies, actively monitoring its liquidity position, and regularly reviewing and adjusting its financial structure to ensure optimal allocation of financial resources - Adopts prudent financial management policies, actively monitoring liquidity position[75](index=75&type=chunk) - Regularly reviews and adjusts financial structure to respond to changing economic conditions and ensure optimal allocation of financial resources[75](index=75&type=chunk) [Cash and Cash Equivalents](index=25&type=section&id=6%2E2%2E2%20Cash%20and%20Cash%20Equivalents) As of June 30, 2025, cash and cash equivalents amounted to **RMB 94.6 million**, representing a **32.4%** increase from December 31, 2024 - Cash and cash equivalents were **RMB 94.6 million**, an increase of **32.4%** from December 31, 2024[76](index=76&type=chunk) [Debt](index=25&type=section&id=6%2E2%2E3%20Debt) As of June 30, 2025, total debt was **RMB 150,939 thousands**, primarily comprising bank borrowings and lease liabilities, a slight decrease from year-end 2024 Debt as of June 30, 2025 | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Borrowings | 143,619 | 144,040 | | Lease liabilities | 7,320 | 15,224 | | **Total** | **150,939** | **159,264** | [Contingent Liabilities and Capital Commitments](index=26&type=section&id=6%2E2%2E4%20Contingent%20Liabilities%20and%20Capital%20Commitments) As of June 30, 2025, the Group had no significant contingent liabilities or capital commitments - No significant contingent liabilities[78](index=78&type=chunk) - No capital commitments[79](index=79&type=chunk) [Other Information](index=26&type=section&id=VII.%20Other%20Information) This section covers additional information including employee remuneration, corporate governance, share repurchases, interim dividends, audit committee review, and post-balance sheet events [Employee Remuneration and Employment Relationship](index=26&type=section&id=7%2E1%20Employee%20Remuneration%20and%20Employment%20Relationship) As of June 30, 2025, the Group had **609 employees**, with total employee costs of **RMB 86.1 million**, and the company has comprehensive training programs to ensure up-to-date employee skills - As of June 30, 2025, there were **609 employees**[80](index=80&type=chunk) - Total employee costs were **RMB 86.1 million** (2024: RMB 98.3 million)[80](index=80&type=chunk) - Comprehensive training programs cover corporate culture, rights and responsibilities, team building, professional conduct, and work performance[80](index=80&type=chunk) [Corporate Governance and Standard Code for Securities Transactions](index=26&type=section&id=7%2E2%20Corporate%20Governance%20and%20Standard%20Code%20for%20Securities%20Transactions) The company has adopted a standard code for directors' securities transactions, which all directors confirm compliance with; regarding corporate governance, the company deviates from the code requiring separation of Chairman and CEO roles, with Mr. Chen holding both, an arrangement the Board believes benefits the business and has sufficient safeguards - All directors confirmed compliance with the **Standard Code for Securities Transactions by Directors**[81](index=81&type=chunk) - The company deviates from Corporate Governance Code Provision C.2.1, with Mr. Chen serving as both Chairman and Chief Executive Officer[82](index=82&type=chunk) - The Board believes this dual role arrangement benefits business prospects and operational efficiency, with sufficient safeguards to ensure a balance of power on the Board[82](index=82&type=chunk)[83](index=83&type=chunk) [Share Repurchases](index=27&type=section&id=7%2E3%20Share%20Repurchases) During the reporting period, the company repurchased **376,000 shares** for a total consideration of **HKD 357,013.14** under its repurchase mandate, holding them as treasury shares - Under the repurchase mandate, the company is authorized to repurchase up to **10%** of its issued share capital[84](index=84&type=chunk) - During the reporting period, the company repurchased **376,000 shares** for a total consideration of **HKD 357,013.14**, holding them as treasury shares[85](index=85&type=chunk) Details of Share Repurchases During the Reporting Period | Month of Repurchase | Number of Shares Repurchased | Highest Price Paid Per Share (HKD) | Lowest Price Paid Per Share (HKD) | Total Consideration Paid (HKD) | | :--- | :--- | :--- | :--- | :--- | | January 2025 | 99,000 | 0.88 | 0.82 | 86,072.23 | | February 2025 | 30,500 | 1.16 | 0.86 | 32,042.69 | | March 2025 | – | – | – | – | | April 2025 | 87,000 | 1.01 | 0.85 | 81,907.86 | | May 2025 | 69,500 | 0.97 | 0.90 | 65,438.47 | | June 2025 | 90,000 | 1.14 | 0.90 | 91,551.89 | | July 2025 | 46,500 | 1.15 | 1.05 | 51,020.39 | | August 2025 (up to the latest practicable date) | – | – | – | – | | **Total** | **422,500** | | | **408,033.53** | [Interim Dividends](index=28&type=section&id=7%2E4%20Interim%20Dividends) The Board does not recommend the payment of an interim dividend for the reporting period, consistent with the prior period - The Board does not recommend the payment of an interim dividend for the reporting period[87](index=87&type=chunk) [Audit Committee Review](index=28&type=section&id=7%2E5%20Audit%20Committee%20Review) The Audit Committee has reviewed the Group's unaudited condensed consolidated interim results, deeming them prepared in accordance with applicable accounting standards and listing rules, with sufficient disclosure and no objections to the accounting treatment - The Audit Committee has reviewed the interim results, finding them prepared in accordance with applicable accounting standards and listing rules, with sufficient disclosure and no objections to the accounting treatment[88](index=88&type=chunk) [Material Post-Balance Sheet Events](index=28&type=section&id=7%2E6%20Material%20Post-Balance%20Sheet%20Events) No material post-balance sheet events have occurred from the end of the reporting period up to the date of this announcement - No material post-balance sheet events have occurred from the end of the reporting period up to the date of this announcement[89](index=89&type=chunk) [Publication of Announcement](index=28&type=section&id=7%2E7%20Publication%20of%20Announcement) This announcement has been published on the HKEX website and the company's website, and the interim report will be dispatched in due course to shareholders who have elected to receive printed corporate communications - This announcement has been published on the **HKEX website** and the **company's website**[90](index=90&type=chunk) - The interim report will be dispatched in due course to shareholders who have elected to receive printed corporate communications[90](index=90&type=chunk)

Financial Performance - For the six months ended June 30, 2025, the total revenue was RMB 56,172,427 thousand, a decrease of 2.0% compared to RMB 57,312,056 thousand in the same period of 2024[3] - The net profit for the six months ended June 30, 2025, was RMB 1,743,581 thousand, reflecting a 3.0% increase from RMB 1,692,066 thousand in the same period of 2024[3] - Total revenue decreased by 2.0% from RMB 57.31 billion for the six months ended June 30, 2024, to RMB 56.17 billion for the six months ended June 30, 2025[20] - Vehicle sales revenue decreased by 1.8% from RMB 54.66 billion to RMB 53.56 billion, primarily due to changes in product mix and increased sales incentives[21] - Other sales and service revenue decreased by 4.8% from RMB 2.74 billion to RMB 2.61 billion, remaining relatively stable[22] - Gross profit decreased by 0.7% from RMB 11.46 billion to RMB 11.39 billion, while gross margin increased from 20.0% to 20.3%[24] - Operating profit for the six months ended June 30, 2025, was RMB 1.1 billion, compared to an operating loss of RMB 1.169 billion for the six months ended June 30, 2024[28] - The company's net profit for the six months ended June 30, 2025, was RMB 1.7 billion, remaining relatively stable compared to the previous period[31] - Basic earnings per share for the six months ended June 30, 2025, was RMB 0.87, up from RMB 0.85 for the same period in 2024[56] - Net interest income and investment income decreased by 29.6% from RMB 1.4 billion for the six months ended June 30, 2024, to RMB 1.0 billion for the six months ended June 30, 2025, mainly due to changes in the fair value of equity investments[29] Vehicle Sales and Market Position - The cumulative delivery volume reached 203,938 vehicles in the first half of 2025, representing a year-on-year growth of 7.9%[6] - The market share in the RMB 200,000 and above new energy vehicle segment was 13.6% in the first half of 2025, maintaining the leading position among Chinese automotive brands[6] - The Li MEGA Home special edition was priced at RMB 559,800 and became the best-selling MPV in the RMB 500,000 and above segment since May 2025[8] - The company launched the Li Auto i8, a six-seat pure electric SUV, priced at RMB 339,800, featuring a range of 720 km and a fast-charging capability[18] - The company plans to launch the Li Auto i6, a five-seat pure electric SUV, in September 2025, and aims to expand its charging network to 4,000 stations by the end of the year[19] Research and Development - The company established its first overseas R&D center in Munich, Germany, focusing on next-generation technology research in four key areas[11] - The new generation of driver assistance technology, VLA driver model, integrates spatial, language, and behavioral intelligence, significantly enhancing user experience[10] - The company has initiated an open-source strategy for its self-developed smart car operating system, aiming to foster ecosystem innovation through global collaboration[10] - R&D expenses decreased by 12.4% from RMB 6.1 billion for the six months ended June 30, 2024, to RMB 5.3 billion for the six months ended June 30, 2025, mainly due to reduced employee compensation[26] Cost and Expenses - Total sales cost decreased by 2.3% from RMB 45.85 billion to RMB 44.79 billion, attributed to cost reductions and changes in product mix[23] - Vehicle gross margin increased from 19.0% for the six months ended June 30, 2024, to 19.6% for the six months ended June 30, 2025, primarily due to a reduction in average sales costs[25] - Selling, general and administrative expenses decreased by 9.4% from RMB 5.8 billion for the six months ended June 30, 2024, to RMB 5.2 billion for the six months ended June 30, 2025, primarily due to reduced employee compensation and improved operational efficiency[27] Cash Flow and Financial Position - As of June 30, 2025, the company's cash position was RMB 106.9 billion, down from RMB 112.8 billion as of December 31, 2024[32] - The net cash used in operating activities for the six months ended June 30, 2025, was RMB (4,737,187), compared to RMB (3,771,783) for the same period in 2024, indicating a worsening cash flow situation[59] - The total current liabilities increased from RMB 69,215,896 as of December 31, 2024, to RMB 71,212,256 as of June 30, 2025, representing an increase of approximately 2.9%[58] - The total equity increased from RMB 71,320,382 as of December 31, 2024, to RMB 73,628,493 as of June 30, 2025, reflecting a growth of approximately 3.2%[58] - Cash and cash equivalents decreased from RMB 65,901,123 as of December 31, 2024, to RMB 49,790,369 as of June 30, 2025, reflecting a decline of approximately 24.5%[57] Debt and Liabilities - The company's debt-to-asset ratio as of June 30, 2025, was 54.3%, compared to 56.1% as of December 31, 2024[37] - Long-term borrowings significantly decreased from RMB 8,151,598 as of December 31, 2024, to RMB 1,834,260 as of June 30, 2025, indicating a reduction of approximately 77.5%[58] - Short-term borrowings increased significantly from RMB 281,102 thousand on December 31, 2024, to RMB 6,391,223 thousand by June 30, 2025[70] - The total borrowings of the company were RMB 8,432,700 thousand as of December 31, 2024, and RMB 8,225,483 thousand as of June 30, 2025[70] Taxation and Compliance - Income tax expense increased by 97.9% from RMB 1.616 billion for the six months ended June 30, 2024, to RMB 3.198 billion for the six months ended June 30, 2025, due to a higher effective tax rate and increased pre-tax profit[30] - The company is entitled to a VAT refund for amounts exceeding a 3% tax burden on sales of self-developed software products since April 2021[79] - The company plans to reinvest all undistributed profits from its subsidiaries in China indefinitely, with no plans to distribute dividends outside of China, thus expecting no withholding tax in the foreseeable future[87] - The corporate income tax rate in Hong Kong for the company's subsidiaries is 16.5%, with no withholding tax on dividends paid to the parent company[88] - The corporate income tax rate in Singapore is 17%, with no withholding tax on dividends paid to the parent company[89] Corporate Governance and Other Information - The company did not declare an interim dividend for the six months ended June 30, 2025[54] - There were no significant legal proceedings that could adversely affect the company's financial condition as of June 30, 2025[50] - The company has not engaged in any buybacks or sales of its listed securities during the reporting period[49] - The mid-term performance announcement will be published on the Hong Kong Stock Exchange and the company's website[95]

[Company Overview and Financial Summary](index=1&type=section&id=Company%20Overview%20and%20Financial%20Summary) [Interim Results Announcement](index=1&type=section&id=Interim%20Results%20Announcement) Minerva Group Holding Limited released its unaudited interim results announcement for the six months ended June 30, 2025, disclosing its financial performance - This announcement by **Minerva Group Holding Limited** pertains to the unaudited condensed consolidated interim financial information for the six months ended **June 30, 2025**[2](index=2&type=chunk)[4](index=4&type=chunk) [Financial Highlights](index=1&type=section&id=Financial%20Highlights) For the six months ended June 30, 2025, group revenue decreased by **13.1%** to **HK$31.7 million**, while loss attributable to owners significantly expanded to **HK$36.9 million**, with no interim dividend recommended Key Financial Data for the Six Months Ended June 30, 2025 | Metric | June 30, 2025 (HK$ Thousand) | June 30, 2024 (HK$ Thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 31,668 | 36,451 | -13.1% | | Loss Attributable to Owners | (36,858) | (14,040) | 162.5% | | Financial Assets at Fair Value Through Profit or Loss | 389,176 | 411,000 (Dec 31, 2024) | -5.3% | | Bank Balances and Cash | 145,052 | 143,348 (Dec 31, 2024) | 1.2% | | Loans and Interest Receivables | 386,822 | 406,307 (Dec 31, 2024) | -4.8% | | Net Current Assets | 942,266 | 966,247 (Dec 31, 2024) | -2.48% | | Current Ratio | 27.30 times | 24.78 times (Dec 31, 2024) | 10.17% | | Net Assets | 1,083,854 | 1,130,877 (Dec 31, 2024) | -4.16% | - The Board does not recommend the payment of an **interim dividend**[3](index=3&type=chunk) [Condensed Consolidated Financial Statements](index=2&type=section&id=Condensed%20Consolidated%20Financial%20Statements) [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=2&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For the six months ended June 30, 2025, group revenue was **HK$31.7 million** with a gross profit of **HK$28.6 million**, while the loss for the period expanded to **HK$36.9 million**, primarily due to negative impacts from other income, gains, and losses, resulting in a basic and diluted loss per share of **1.50 HK Cents** Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (For the Six Months Ended June 30) | Metric | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Revenue | 31,668 | 36,451 | | Direct Operating Costs | (3,086) | (2,528) | | Gross Profit | 28,582 | 33,923 | | Other Income, Gains and Losses | (41,674) | (29,140) | | Administrative Expenses | (23,353) | (18,296) | | Finance Costs | (413) | (529) | | Loss Before Tax | (36,858) | (14,042) | | Loss for the Period | (36,858) | (14,042) | | Loss Attributable to Owners of the Company | (36,858) | (14,040) | | Basic and Diluted Loss Per Share (HK Cents) | (1.50) | (0.56) | [Condensed Consolidated Statement of Financial Position](index=4&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the group's total assets less current liabilities were **HK$1,083.9 million**, with net assets also at **HK$1,083.9 million**, a decrease from December 31, 2024, while net current assets stood at **HK$942.3 million** and the current ratio was **27.30 times** Condensed Consolidated Statement of Financial Position (As of June 30, 2025) | Metric | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | | :--- | :--- | :--- | | **Non-Current Assets** | | | | Property, Plant and Equipment | 21,498 | 23,754 | | Investment Properties | 27,200 | 30,000 | | Financial Assets at Fair Value Through Profit or Loss | 86,049 | 97,848 | | Total Non-Current Assets | 141,588 | 164,963 | | **Current Assets** | | | | Loans and Interest Receivables | 386,822 | 399,787 | | Trade and Other Receivables, Deposits and Prepayments | 132,747 | 142,570 | | Financial Assets at Fair Value Through Profit or Loss | 303,127 | 313,152 | | Bank Balances and Cash | 145,052 | 143,348 | | Total Current Assets | 978,099 | 1,006,865 | | **Current Liabilities** | | | | Trade and Other Payables | 12,527 | 16,356 | | Bank Borrowings | 21,997 | 22,343 | | Total Current Liabilities | 35,833 | 40,618 | | Net Current Assets | 942,266 | 966,247 | | Net Assets | 1,083,854 | 1,130,877 | | Equity Attributable to Owners of the Company | 1,083,854 | 1,130,877 | [Notes to the Condensed Consolidated Interim Financial Information](index=6&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Interim%20Financial%20Information) [Basis of Preparation and Principal Accounting Policies](index=6&type=section&id=Basis%20of%20Preparation%20and%20Principal%20Accounting%20Policies) The condensed consolidated interim financial information is prepared in accordance with HKAS 34 and the Listing Rules, adopting the same accounting policies as the 2024 annual financial statements, with no significant impact from new standards or interpretations in the current period - The condensed consolidated interim financial information is prepared in accordance with Hong Kong Accounting Standard 34 and the applicable disclosure requirements of the Listing Rules on the Main Board of the Stock Exchange[9](index=9&type=chunk) - These financial statements are presented in **Hong Kong Dollars** and should be read in conjunction with the 2024 annual financial statements[9](index=9&type=chunk) - The adoption of new standards or interpretations effective from **January 1, 2025**, had no significant impact on the condensed consolidated interim financial information[10](index=10&type=chunk)[11](index=11&type=chunk) [Revenue Analysis](index=7&type=section&id=Revenue%20Analysis) The group's total revenue for the six months ended June 30, 2025, was **HK$31.7 million**, primarily derived from interest income from lending and financial services income, with lending interest income being the largest contributor but showing a year-on-year decrease Revenue Analysis (For the Six Months Ended June 30) | Revenue Source | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Interest Income from Lending | 24,606 | 26,955 | | Income from Financial Services | | | | - Commission Income from Securities Brokerage | 411 | 487 | | - Commission Income from Placement | 619 | 884 | | - Corporate Finance Advisory Services | 70 | 645 | | - Interest Income from Customers | 5,497 | 6,970 | | Rental Income | 465 | 510 | | **Total Revenue** | **31,668** | **36,451** | Revenue Analysis by Timing of Recognition (For the Six Months Ended June 30) | Timing of Recognition | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Revenue Recognized at a Point in Time | 1,030 | 1,371 | | Revenue Recognized Over Time | 70 | 645 | | **Total** | **1,100** | **2,016** | [Segment Information](index=8&type=section&id=Segment%20Information) The group's operations are categorized into financial services, lending, and asset investment, with the lending segment contributing the largest revenue for the six months ended June 30, 2025, though the asset investment segment recorded a significant loss, all primarily operating in Hong Kong with no single customer contributing over **10%** of total revenue - The Group's reportable segments include **financial services** (securities brokerage, placement, corporate finance advisory), **lending** (loan financing), and **asset investment** (debt securities, investment properties, equity securities, and investment funds)[15](index=15&type=chunk) [Revenue and Segment Results Analysis](index=9&type=section&id=Revenue%20and%20Segment%20Results%20Analysis) For the six months ended June 30, 2025, the lending segment generated **HK$24.6 million** in revenue, financial services **HK$6.6 million**, and asset investment **HK$0.5 million**, with the asset investment segment recording a **HK$31.6 million** loss, contributing to the group's expanded loss before tax of **HK$36.9 million** Revenue and Segment Results Analysis by Reportable and Operating Segments (For the Six Months Ended June 30, 2025) | Segment | Revenue (HK$ Thousand) | Other Income, Gains and Losses (HK$ Thousand) | Segment Results (HK$ Thousand) | | :--- | :--- | :--- | :--- | | Financial Services Segment | 6,597 | 9 | 263 | | Lending Segment | 24,606 | (19,914) | 3,147 | | Asset Investment Segment | 465 | (29,612) | (31,559) | | **Total** | **31,668** | **(49,517)** | **(28,149)** | | Unallocated Corporate Income | | | 1,321 | | Unallocated Corporate Expenses | | | (9,617) | | Finance Costs | | | (413) | | **Loss Before Tax** | | | **(36,858)** | Revenue and Segment Results Analysis by Reportable and Operating Segments (For the Six Months Ended June 30, 2024) | Segment | Revenue (HK$ Thousand) | Other Income, Gains and Losses (HK$ Thousand) | Segment Results (HK$ Thousand) | | :--- | :--- | :--- | :--- | | Financial Services Segment | 8,986 | 9 | 4,261 | | Lending Segment | 26,955 | 1,807 | 21,364 | | Asset Investment Segment | 510 | (31,420) | (36,943) | | **Total** | **36,451** | **(29,604)** | **(11,318)** | | Unallocated Corporate Income | | | 959 | | Unallocated Corporate Expenses | | | (3,154) | | Finance Costs | | | (529) | | **Loss Before Tax** | | | **(14,042)** | [Segment Assets and Liabilities](index=11&type=section&id=Segment%20Assets%20and%20Liabilities) As of June 30, 2025, the group's total consolidated assets were **HK$1,119.7 million**, with the asset investment segment holding the largest proportion, and total consolidated liabilities amounted to **HK$35.8 million** Segment Assets and Liabilities Analysis by Reportable and Operating Segments (As of June 30, 2025) | Segment | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | | :--- | :--- | :--- | | **Segment Assets** | | | | Financial Services Segment | 93,893 | 101,776 | | Lending Segment | 411,030 | 419,436 | | Asset Investment Segment | 457,099 | 491,045 | | **Total Segment Assets** | **962,022** | **1,012,257** | | Unallocated Assets | 157,665 | 159,571 | | **Total Consolidated Assets** | **1,119,687** | **1,171,828** | | **Segment Liabilities** | | | | Financial Services Segment | 11,426 | 11,424 | | Lending Segment | 941 | 1,162 | | Asset Investment Segment | 22,589 | 24,959 | | **Total Segment Liabilities** | **34,956** | **37,545** | | Unallocated Liabilities | 877 | 3,406 | | **Total Consolidated Liabilities** | **35,833** | **40,951** | [Geographical Information and Major Customers](index=12&type=section&id=Geographical%20Information%20and%20Major%20Customers) The group's non-current assets are primarily located in Hong Kong, excluding freehold land in Japan, with all revenue generated from operations within Hong Kong, and no single customer contributed over **10%** of total revenue for the six months ended June 30, 2025 and 2024 - The Group's non-current assets are primarily located in **Hong Kong**, with the exception of freehold land in Japan[20](index=20&type=chunk) - The Group operates in **Hong Kong**, and its revenue is derived from operations within Hong Kong[20](index=20&type=chunk) - For the six months ended **June 30, 2025 and 2024**, no single customer contributed more than **10%** of the Group's total revenue[21](index=21&type=chunk) [Other Income, Gains and Losses](index=12&type=section&id=Other%20Income%2C%20Gains%20and%20Losses) For the six months ended June 30, 2025, other income, gains, and losses recorded a **HK$41.7 million** loss, primarily due to fair value changes in financial assets at fair value through profit or loss and impairment losses on loans and interest receivables Other Income, Gains and Losses (For the Six Months Ended June 30) | Item | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Interest Income | 1,321 | 886 | | Miscellaneous Income | 6,997 | 15 | | Fair Value Change Loss on Investment Properties | (2,800) | (6,800) | | Fair Value Change Loss on Financial Assets at Fair Value Through Profit or Loss | (27,277) | (25,130) | | Impairment Loss on Loans and Interest Receivables / Reversal of Impairment Loss | (19,914) | 1,807 | | Reversal of Impairment Loss on Trade Receivables | 9 | 9 | | (Loss) / Gain on Deregistration of Subsidiaries | (10) | 73 | | **Total** | **(41,674)** | **(29,140)** | [Finance Costs](index=12&type=section&id=Finance%20Costs) For the six months ended June 30, 2025, finance costs amounted to **HK$413 thousand**, primarily comprising interest on bank borrowings and lease liabilities, representing a decrease from the prior period Finance Costs (For the Six Months Ended June 30) | Item | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Interest on Bank Borrowings | 348 | 444 | | Interest on Lease Liabilities | 65 | 85 | | **Total** | **413** | **529** | [Loss Before Tax and Income Tax Expense](index=13&type=section&id=Loss%20Before%20Tax%20and%20Income%20Tax%20Expense) For the six months ended June 30, 2025, the loss before tax was **HK$36.9 million**, mainly impacted by staff costs, depreciation, exchange losses, and impairment losses on loans receivable, with no income tax expense recognized in either the current or prior period due to the absence of taxable profits Loss Before Tax Items Deducted / (Credited) (For the Six Months Ended June 30) | Item | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Staff Costs | 7,377 | 9,868 | | Depreciation of Property, Plant and Equipment | 2,265 | 1,465 | | Net Exchange (Loss) / Gain | 39 | (1) | | Impairment Loss on Loans and Interest Receivables / (Reversal of Impairment Loss) | 19,914 | (1,807) | | Reversal of Impairment Loss on Trade Receivables | (9) | (9) | - No provision for Hong Kong Profits Tax has been made as the Group had no taxable profits for the six months ended **June 30, 2025 and 2024**[27](index=27&type=chunk) [Dividends and Loss Per Share](index=14&type=section&id=Dividends%20and%20Loss%20Per%20Share) The Board does not recommend an interim dividend for the six months ended June 30, 2025, and the basic loss per share attributable to owners of the company significantly expanded to **1.50 HK Cents** from **0.56 HK Cents** in the prior period, with no diluted loss per share presented due to the absence of potential ordinary shares - The Board does not recommend the payment of an **interim dividend** for the six months ended **June 30, 2025**[29](index=29&type=chunk) Basic Loss Per Share (For the Six Months Ended June 30) | Metric | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Loss for the Period Attributable to Owners of the Company | (36,858) | (14,040) | | Number of Shares for Basic Loss Per Share Calculation (Thousand Shares) | 2,457,692 | 2,505,283 | | Basic Loss Per Share (HK Cents) | (1.50) | (0.56) | - Diluted loss per share for the period is not presented as there were no potential ordinary shares outstanding for the six months ended **June 30, 2025**[33](index=33&type=chunk) [Property, Plant and Equipment](index=15&type=section&id=Property%2C%20Plant%20and%20Equipment) For the six months ended June 30, 2025, the group neither acquired nor disposed of any property, plant, and equipment - No acquisitions of property, plant and equipment occurred for the six months ended **June 30, 2025**[34](index=34&type=chunk) - No disposals of property, plant and equipment occurred for the six months ended **June 30, 2025**[35](index=35&type=chunk) [Loans and Interest Receivables](index=15&type=section&id=Loans%20and%20Interest%20Receivables) As of June 30, 2025, total loans and interest receivables amounted to **HK$528.8 million**, with an impairment provision of **HK$141.9 million**, resulting in a net amount of **HK$386.8 million**, and a net impairment loss of **HK$19.9 million** primarily reflecting increased uncertainty in the recoverability of overdue loans Loans and Interest Receivables (As of June 30, 2025) | Item | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Related Loans and Interest Receivables | 528,751 | 562,298 | | Less: Impairment Provision | (141,929) | (155,991) | | **Net Amount** | **386,822** | **406,307** | | Non-Current Assets | – | 6,520 | | Current Assets | 386,822 | 399,787 | Details of Loan Principal (As of June 30, 2025) | Loan Principal (HK$ Thousand) | Annual Interest Rate | Maturity Date | Pledged Collateral | | :--- | :--- | :--- | :--- | | 219,755 | 9%–12.5% | 1 to 2 years | Hong Kong properties, listed and unlisted shares, and vessels | | 145,299 | 10%–24% | 1 to 2 years | Guarantees provided by certain independent third parties | | 126,501 | 10%–20% | Within 1 year | None | | **Total** | **491,555** | | | Movement in Impairment Provision for Loans and Interest Receivables (For the Six Months Ended June 30, 2025) | Stage | As of January 1, 2025 (HK$ Thousand) | Net Impairment Loss Recognized During the Period (HK$ Thousand) | Less: Disposal of Loans and Interest Receivables (HK$ Thousand) | As of June 30, 2025 (HK$ Thousand) | | :--- | :--- | :--- | :--- | :--- | | 12-Month Expected Credit Loss (Stage 1) | 516 | 189 | – | 705 | | Lifetime Expected Credit Loss (Stage 2) | 29,871 | 18,512 | (10,483) | 37,900 | | Lifetime Expected Credit Loss (Stage 3) | 125,604 | 1,213 | (23,493) | 103,324 | | **Total** | **155,991** | **19,914** | **(33,976)** | **141,929** | [Trade and Other Receivables, Deposits and Prepayments](index=18&type=section&id=Trade%20and%20Other%20Receivables%2C%20Deposits%20and%20Prepayments) As of June 30, 2025, total trade and other receivables amounted to **HK$132.7 million**, primarily comprising margin client receivables from financial services business, with a gross book value of **HK$92.9 million** and approximately **HK$740.3 million** in pledged securities as collateral Trade and Other Receivables, Deposits and Prepayments (As of June 30, 2025) | Item | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Trade Receivables from Financial Services Business | | | | - Cash Clients and Clearing Houses | 537 | 189 | | - Margin Clients | 92,924 | 104,939 | | Other Receivables, Deposits and Prepayments | 39,286 | 37,442 | | **Total** | **132,747** | **142,570** | - As of **June 30, 2025**, the market value of securities pledged by margin clients to the Group as collateral for margin client receivables was approximately **HK$740,325,000** (December 31, 2024: HK$767,746,000)[41](index=41&type=chunk) [Trade and Other Payables](index=20&type=section&id=Trade%20and%20Other%20Payables) As of June 30, 2025, total trade and other payables amounted to **HK$12.5 million**, mainly from cash clients and clearing houses, and margin clients in the financial services business Trade and Other Payables (As of June 30, 2025) | Item | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Trade Payables from Financial Services Business | | | | - Cash Clients and Clearing Houses | 3,618 | 4,904 | | - Margin Clients | 6,675 | 6,203 | | Other Payables and Accruals | 2,234 | 5,249 | | **Total** | **12,527** | **16,356** | [Share Capital](index=21&type=section&id=Share%20Capital) As of June 30, 2025, the company's issued and fully paid share capital was **HK$23.7 million**, comprising **2,371,692,734 shares**, with **133,590,000 shares** repurchased and cancelled during the period for a total cash consideration of approximately **HK$9.1 million** Share Capital Movement (As of June 30, 2025) | Item | Number of Shares (Thousand Shares) | HK$ Thousand | | :--- | :--- | :--- | | As of January 1, 2025 | 2,505,282,734 | 25,053 | | Shares Cancelled | (133,590,000) | (1,336) | | As of June 30, 2025 | 2,371,692,734 | 23,717 | - For the six months ended **June 30, 2025**, the Company repurchased a total of **133,590,000 shares** at prices ranging from **HK$0.062** to **HK$0.073** per share, for a total cash consideration of approximately **HK$9,128,000**, all of which have been cancelled[46](index=46&type=chunk) [Operating Lease Arrangements](index=21&type=section&id=Operating%20Lease%20Arrangements) The group, as a lessor, leases certain office properties in Hong Kong, typically for a two-year term, with total minimum future rental income receivables amounting to **HK$780 thousand** as of June 30, 2025 Total Minimum Future Rental Income Receivables (As of June 30, 2025) | Term | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Within One Year | 780 | 960 | | More Than One Year But Less Than Five Years | – | 480 | | **Total** | **780** | **1,440** | [Capital Commitments](index=22&type=section&id=Capital%20Commitments) As of June 30, 2025, the group's significant capital commitments contracted but not yet provided for amounted to **HK$1,591 thousand**, primarily related to investments in investment funds Capital Commitments (As of June 30, 2025) | Item | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Commitments Contracted But Not Provided For in Relation to the Group's Current Investments in Investment Funds | 1,591 | 1,535 | [Fair Value Measurement of Financial Instruments](index=22&type=section&id=Fair%20Value%20Measurement%20of%20Financial%20Instruments) The group's financial assets are measured at fair value, primarily including listed equity securities, unlisted investment funds, and unlisted equity investments, with fair value measurements employing Level 1, Level 2, and Level 3 valuation techniques, where unlisted equity investments utilize market and discounted cash flow approaches Fair Value Measurement of Financial Assets (As of June 30, 2025) | Financial Asset | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | Fair Value Hierarchy Level | Valuation Technique | | :--- | :--- | :--- | :--- | :--- | | Listed Equity Securities in Hong Kong | 301,627 | 305,815 | Level 1 | Quoted Bid Price | | Listed Equity Securities in NASDAQ | 1,500 | 7,337 | Level 1 | Quoted Bid Price | | Unlisted Investment Funds | 67,128 | 77,825 | Level 2 | NAV provided by fund manager and quotes from third parties | | Unlisted Equity Investments (Market Approach) | 1,825 | 3,000 | Level 3 | Market Approach | | Unlisted Equity Investments (Discounted Cash Flow and Scenario Approach) | 17,096 | 17,023 | Level 3 | Discounted Cash Flow and Scenario Approach | Reconciliation of Level 3 Fair Value Measurements (For the Six Months Ended June 30) | Item | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | | :--- | :--- | :--- | | As of January 1 | 20,023 | 34,669 | | Net Change in Fair Value | (1,102) | 14,051 | | As of June 30 | 18,921 | 48,720 | [Fair Value Measurement of Investment Properties](index=23&type=section&id=Fair%20Value%20Measurement%20of%20Investment%20Properties) As of June 30, 2025, the group's investment properties had a fair value of **HK$27.2 million**, valued using the direct comparison approach, categorized as Level 3 fair value measurement Fair Value Measurement of Investment Properties (As of June 30, 2025) | Investment Property | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | Fair Value Hierarchy Level | Valuation Technique | | :--- | :--- | :--- | :--- | :--- | | Commercial (Hong Kong) | 27,200 | 30,000 | Level 3 | Direct Comparison Approach | [Contingent Liabilities](index=24&type=section&id=Contingent%20Liabilities) The group faces two main contingent liabilities: a court summons from Convoy Global Holdings Limited and the Chu Hiu Yin petition, both in preliminary stages, making it premature to determine outcomes or quantify financial impact, thus requiring no provision - The Company's wholly-owned subsidiary, **Classictime Investments Limited**, is the **24th defendant** in the Convoy High Court Action, where the plaintiff seeks to cancel shares allotted to Classictime and claim damages[54](index=54&type=chunk) - Classictime is also one of the **thirty-three respondents** in the Chu Hiu Yin Petition, where the petitioner claims losses due to mismanagement of Convoy's business[56](index=56&type=chunk) - The Directors believe that, given the preliminary stage of the cases, it is premature to determine the outcome or quantify the financial impact, and no provision is required for the claims in these legal proceedings[57](index=57&type=chunk) [Subsequent Events](index=25&type=section&id=Subsequent%20Events) In July 2025, the company repurchased a total of **74,100,000 shares** for approximately **HK$4.4 million** in cash, which were subsequently cancelled in August 2025 - In **July 2025**, the Company repurchased a total of **74,100,000 shares** at prices ranging from **HK$0.053** to **HK$0.068** per share, for a total cash consideration of approximately **HK$4,429,000**[58](index=58&type=chunk) - These repurchased shares were fully cancelled and destroyed by the Company's share registrar, **Tricor Investor Services Limited**, in Hong Kong in **August 2025**[58](index=58&type=chunk) [Management Discussion and Analysis](index=25&type=section&id=Management%20Discussion%20and%20Analysis) [Financial Review and Economic Outlook](index=25&type=section&id=Financial%20Review%20and%20Economic%20Outlook) During the period, group revenue decreased to **HK$31.7 million** and net loss expanded to **HK$36.9 million**, primarily due to fair value changes in financial assets, while Hong Kong's economy faces multiple challenges including tariff wars, weak real estate, and geopolitical tensions, yet the group remains committed to financial prudence and sustainable profitability - During the period, group revenue was approximately **HK$31.7 million** (2024: HK$36.5 million), with the overall decrease primarily due to a slight reduction of approximately **HK$2.1 million** in interest income from the lending business and approximately **HK$2.4 million** from the financial services business[59](index=59&type=chunk) - The net loss attributable to owners of the Company was approximately **HK$36.9 million** (2024: HK$14.0 million), mainly due to a fair value change loss of approximately **HK$27.3 million** on financial assets at fair value through profit or loss[60](index=60&type=chunk) - The Hong Kong economy faces multiple challenges including escalating tariff wars, weak real estate, geopolitical tensions, increased trade protectionism, and high interest rates, with a projected growth of **2.5% to 3%** in 2025[61](index=61&type=chunk) [Financial Services Business](index=26&type=section&id=Financial%20Services%20Business) The group's financial services business encompasses margin financing, securities brokerage, institutional financing advisory, and securities capital market services, generating approximately **HK$6.6 million** in revenue for the period, a **26.7%** year-on-year decrease, with plans to restructure its securities capital market business and expand into corporate finance, asset investment, and management advisory services - The financial services business is primarily operated by **Minerva Financial Securities Limited** and **Minerva Global Finance Advisory Limited**, covering margin financing, securities brokerage services, institutional financing advisory services, securities capital market services, and advice on securities[63](index=63&type=chunk) - During the period, the financial services segment generated revenue of approximately **HK$6.6 million** (2024: HK$9.0 million), representing a decrease of approximately **26.7%**[63](index=63&type=chunk) - The Group plans to restructure its securities capital market business and emphasize a broader focus on corporate finance, asset investment and management, and various advisory services to expand its business scope[64](index=64&type=chunk) [Lending Business](index=27&type=section&id=Lending%20Business) The group's lending business, managed through Easy Finance and Easy Financial Technology, offers property mortgages, other secured, guaranteed, and unsecured loans, generating **HK$24.6 million** in revenue for the period, but operating profit significantly decreased by **85.4%** to **HK$3.1 million**, primarily due to an increase of **HK$19.9 million** in impairment losses on loans and interest receivables - The lending business is managed through **Easy Finance Limited** and **Easy Financial Technology Limited**, holding a money lender's license and providing property mortgage loans, other secured loans, guaranteed loans, and unsecured loans[65](index=65&type=chunk) - During the period, the lending segment generated revenue of approximately **HK$24.6 million** (2024: HK$27.0 million), accounting for approximately **77.6%** of total revenue[73](index=73&type=chunk) - The operating profit for this business segment during the period was approximately **HK$3.1 million** (2024: HK$21.3 million), representing a decrease of approximately **85.4%** compared to the previous period[73](index=73&type=chunk) - An impairment loss of approximately **HK$19.9 million** on loans and interest receivables was recognized during the period (2024: reversal of approximately HK$1.8 million), mainly due to increased uncertainty in the recoverability of certain overdue loans[74](index=74&type=chunk) [Internal Control and Loan Approval](index=27&type=section&id=Internal%20Control%20and%20Loan%20Approval) The group is committed to prudently managing lending business risks through comprehensive credit policies and stringent internal controls, with loan approval processes including identity verification, repayment ability assessment, collateral valuation, and anti-money laundering due diligence, while loan renewals involve evaluating past repayment records and market changes - The Group is committed to safeguarding the quality of its loan portfolio through a comprehensive credit policy and maintaining stringent loan approval, credit monitoring, debt collection efforts, and compliance procedures amidst economic uncertainties[66](index=66&type=chunk) - The loan approval process includes verification and background checks, proof of income or assets for borrowers and guarantors, assessment of collateral value, verification of information authenticity, and public inquiries for anti-money laundering and counter-terrorist financing[68](index=68&type=chunk) - Similar updated assessments are conducted upon loan renewal, evaluating the borrower's past repayment record and changes in market conditions[69](index=69&type=chunk) [Debt Collection and Compliance Matters](index=29&type=section&id=Debt%20Collection%20and%20Compliance%20Matters) The group weekly reviews repayment records and its loan portfolio, especially overdue loan accounts, taking legal action to recover loans, and as a licensed money lender, ensures compliance with applicable laws, regulations, and regulatory codes, continuously monitoring loan transactions - The Group reviews repayment records and its loan portfolio weekly, taking actions such as legal demand letters and legal proceedings to recover loans when necessary[70](index=70&type=chunk) - As a licensed money lender in Hong Kong, the Group ensures compliance with the Money Lenders Ordinance and relevant anti-money laundering and counter-terrorist financing regulations[70](index=70&type=chunk) - Management regularly reviews the internal control system and establishes and revises policies as appropriate to ensure compliance[70](index=70&type=chunk) [Loan Portfolio and Financial Information](index=29&type=section&id=Loan%20Portfolio%20and%20Financial%20Information) As of June 30, 2025, the group's total loan portfolio principal was **HK$491.6 million**, with **80%** either overdue but not yet settled or not yet due but with overdue interest, and individual secured loans and corporate unsecured loans constituting a significant portion, while the largest and top five customers' loans and interest receivables balances accounted for **6.9%** and **26.3%** of the total, respectively Loan Portfolio by Category (As of June 30, 2025) | Loan Category | Number of Loans | Loan Principal (HK$ Thousand) | Annual Interest Rate | Percentage of Total Principal | Loans Overdue But Not Yet Settled (HK$ Thousand) | Percentage of Overdue Loans | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Individual Secured Loans | 14 | 165,755 | 9% to 12.5% | 34% | 123,655 | 25% | | Individual Unsecured Loans | 17 | 127,421 | 10% to 20% | 26% | 126,921 | 26% | | Corporate Secured Loans | 4 | 54,000 | 9% to 12% | 11% | 54,000 | 11% | | Corporate Unsecured Loans | 13 | 144,379 | 10% to 24% | 29% | 90,929 | 18% | | **Total** | **48** | **491,555** | | **100%** | **395,505** | **80%** | Details of Loans and Interest Receivables and Expected Credit Loss Provision (As of June 30, 2025) | Loan Category | Loan Principal (HK$ Thousand) | Gross Loans and Interest Receivables (HK$ Thousand) | Expected Credit Loss Provision (HK$ Thousand) | Net Loans and Interest Receivables (HK$ Thousand) | | :--- | :--- | :--- | :--- | :--- | | Individual Secured Loans | 165,755 | 177,391 | (55,847) | 121,544 | | Individual Unsecured Loans | 127,421 | 137,379 | (39,951) | 97,428 | | Corporate Secured Loans | 54,000 | 61,846 | – | 61,846 | | Corporate Unsecured Loans | 144,379 | 152,135 | (46,131) | 106,004 | | **Total** | **491,555** | **528,751** | **(141,929)** | **386,822** | - As of **June 30, 2025**, the Group had **48 active accounts**, comprising **31 individual loans** and **17 corporate loans**[78](index=78&type=chunk) - During the period, interest income generated from the **top five customers** accounted for approximately **18.6%** (2024: 17.3%) of the Group's total revenue, while the single largest customer accounted for approximately **4.2%** (2024: 3.6%) of the Group's total revenue[79](index=79&type=chunk) Ageing Analysis of Net Loans and Interest Receivables (As of Reporting Date) | Ageing | HK$ Thousand | | :--- | :--- | | Not Overdue | 97,475 | | Overdue: | | | - 1 to 30 Days | 4,974 | | - 31 to 60 Days | – | | - 61 to 90 Days | – | | - Over 90 Days | 284,373 | | **Total** | **386,822** | [Asset Investment Business](index=34&type=section&id=Asset%20Investment%20Business) The group's asset investment business aims to diversify investments across bonds, funds, equity investments, and investment properties, recording a **HK$31.6 million** loss for the period, primarily driven by fair value changes in financial assets at fair value through profit or loss, particularly underperforming listed equity securities in the healthcare sector - During the period, the asset investment segment generated a loss of approximately **HK$31.6 million** (2024: HK$36.9 million), primarily driven by fair value changes in financial assets at fair value through profit or loss, especially investments in listed equity securities in the healthcare industry[83](index=83&type=chunk) - The Group has withdrawn from bond investments and holds **five unlisted closed-end funds**, whose performance is regularly monitored[84](index=84&type=chunk) - As of **June 30, 2025**, the Group's financial assets at fair value through profit or loss amounted to approximately **HK$389.2 million**, including equity securities, unlisted investment funds, and unlisted equity investments[85](index=85&type=chunk) - As of **June 30, 2025**, the Group held investment properties of approximately **HK$27.2 million**, which are leased out to generate rental income[86](index=86&type=chunk) [Significant Investments](index=35&type=section&id=Significant%20Investments) The group's investment in Convoy Global Holdings Limited is significant, with a fair value of approximately **HK$207.9 million** as of June 30, 2025, representing about **18.6%** of the group's total consolidated assets and recording a fair value loss of approximately **HK$6.1 million**, while the Board maintains a cautious outlook on Convoy's future prospects Significant Investments in Financial Assets at Fair Value Through Profit or Loss (As of June 30, 2025) | Investment Description | Business Overview | Investment Fair Value as of June 30, 2025 (HK$ Thousand) | Approximate Percentage of Shareholding in Investee Company as of June 30, 2025 | Approximate Percentage of Consolidated Net Assets as of June 30, 2025 | Unrealized (Loss) / Gain During the Period (HK$ Thousand) | | :--- | :--- | :--- | :--- | :--- | :--- | | Convoy Global Holdings Limited (3886) | Provides medical and dental services, manages medical networks in Hong Kong and China, etc | 207,941 | 12.89% | 19.2% | (6,144) | | Other Listed Securities Investments | | 95,186 | | | (10,496) | | Unlisted Investment Funds | | 67,128 | | | (10,791) | | Unlisted Equity Investments | | 18,921 | | | (1,102) | | **Total** | | **389,176** | | | **(28,533)** | - The Group holds **873,700,000 Convoy shares**, with an investment cost of approximately **HK$922.1 million**, representing approximately **12.90%** of Convoy's issued shares[88](index=88&type=chunk) - The Directors maintain a cautious and prudent attitude towards the future prospects of Convoy's principal businesses and are aware of the challenges associated with significant investments[89](index=89&type=chunk) [Business Outlook](index=37&type=section&id=Business%20Outlook) Despite the resilience of Hong Kong's capital market, uncertainties in US trade and monetary policies continue to affect global financial conditions, prompting the group to strengthen risk management, prudently monitor loan repayment performance, actively seek to transfer non-performing loans, and expand its business scope, particularly in the healthcare industry, to maximize shareholder value - The Hong Kong capital market showed resilience in the first half of 2025, but uncertainties in US trade policy and the unpredictability of its monetary policy may affect global financial conditions and investment sentiment[92](index=92&type=chunk) - The Group is strengthening its risk management framework, prudently balancing risks and returns to ensure long-term stability, and enhancing credit assessment and approval procedures[92](index=92&type=chunk) - The Group will actively seek potential investors to transfer non-performing loans to recover principal and is committed to enhancing shareholder value, emphasizing flexible funding solutions and optimizing financial strategies[92](index=92&type=chunk)[93](index=93&type=chunk) - The Group will vigilantly monitor the business environment and market conditions, seeking opportunities to develop diversified business segments, particularly targeting investment projects in the thriving healthcare industry[93](index=93&type=chunk) [Liquidity and Financial Resources and Share Capital Structure](index=38&type=section&id=Liquidity%20and%20Financial%20Resources%20and%20Share%20Capital%20Structure) As of June 30, 2025, the group's bank balances and cash were approximately **HK$145.1 million**, net current assets approximately **HK$942.3 million**, and current ratio approximately **27.3 times**, with a gearing ratio of **3.2%** indicating a sound financial position, bank borrowings of approximately **HK$22.0 million** secured by investment properties, and no significant foreign exchange fluctuation risk Liquidity and Financial Resources (As of June 30, 2025) | Metric | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Bank Balances and Cash | 145,100 | 143,300 | | Net Current Assets | 942,300 | 966,200 | | Current Ratio | 27.3 times | 24.8 times | | Gearing Ratio | 3.2% | 3.5% | | Bank Borrowings | 22,000 | 22,300 | - As of **June 30, 2025**, investment properties of approximately **HK$27.2 million** were pledged as collateral for mortgage loans[96](index=96&type=chunk) - As the Group's bank balances, cash, and borrowings are primarily denominated in **Hong Kong Dollars**, there is no significant foreign exchange fluctuation risk and no related hedging[95](index=95&type=chunk) [Significant Acquisitions and Disposals](index=38&type=section&id=Significant%20Acquisitions%20and%20Disposals) During the period, the group did not undertake any significant acquisitions or disposals of subsidiaries, associates, or joint ventures - During the period, the Group did not undertake any significant acquisitions or disposals of subsidiaries, associates, or joint ventures[99](index=99&type=chunk) [Employees and Remuneration Policy](index=39&type=section&id=Employees%20and%20Remuneration%20Policy) As of June 30, 2025, the group employed **27 staff**, with remuneration policies determined by industry practice, individual performance, capabilities, qualifications, position, seniority, and experience, offering discretionary bonuses and share options, while directors' remuneration is recommended and determined by the Remuneration Committee and the Board - As of **June 30, 2025**, the Group employed **27 staff**[100](index=100&type=chunk) - The Group provides appropriate and regular training to its employees and determines remuneration policies based on industry practice and individual employee performance, capabilities, qualifications, position, seniority, and experience[100](index=100&type=chunk) - In addition to regular remuneration, eligible employees are granted discretionary bonuses and share options based on the Group's performance and individual employee performance[100](index=100&type=chunk) [Other Information](index=39&type=section&id=Other%20Information) [Purchase, Sale or Redemption of the Company's Listed Securities](index=39&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company%27s%20Listed%20Securities) During the period, the company repurchased a total of **149,290,000 shares** on the Stock Exchange for approximately **HK$10.2 million**, with **133,590,000 shares** cancelled in June and the remaining **15,700,000 shares** cancelled in August, which the Board believes reflects confidence in the company's prospects and enhances earnings per share and net asset value - During the period, the Company repurchased a total of **149,290,000 ordinary shares** of **HK$0.01** par value each in its share capital on the Stock Exchange, for a total consideration (before expenses) of approximately **HK$10,165,000**[101](index=101&type=chunk) - The first batch of **133,590,000 repurchased shares** was cancelled in **June 2025**, and the remaining **15,700,000 shares** were cancelled in **August 2025**[101](index=101&type=chunk) Details of Share Repurchases (For the Six Months Ended June 30, 2025) | Month of Repurchase | Number of Shares Repurchased | Highest Price Paid Per Share (HK$) | Lowest Price Paid Per Share (HK$) | Total Approximate Consideration (Before Expenses) (HK$) | | :--- | :--- | :--- | :--- | :--- | | April 2025 | 52,300,000 | 0.073 | 0.067 | 3,665,000 | | May 2025 | 81,290,000 | 0.072 | 0.062 | 5,463,000 | | June 2025 | 15,700,000 | 0.067 | 0.064 | 1,037,000 | | **Total** | **149,290,000** | | | **10,165,000** | - The Directors believe that these repurchases reflect the Company's confidence in its long-term business prospects and will ultimately benefit the Company and create value for shareholders by enhancing earnings per share and increasing net asset value per share attributable to shareholders[102](index=102&type=chunk) [Corporate Governance and Directors' Securities Transactions](index=40&type=section&id=Corporate%20Governance%20and%20Directors%27%20Securities%20Transactions) The company fully complied with all code provisions of the Corporate Governance Code set out in Appendix C1 of the Listing Rules throughout the period, and all directors confirmed compliance with the required standards of the Model Code for Securities Transactions by Directors of Listed Issuers in Appendix C3 - The Company has fully complied with all code provisions of the Corporate Governance Code set out in **Appendix C1** of the Listing Rules throughout the period[104](index=104&type=chunk) - Following specific inquiries with all Directors, they have confirmed that they have complied with the required standards set out in the Model Code for Securities Transactions by Directors of Listed Issuers in **Appendix C3** of the Listing Rules throughout the period[105](index=105&type=chunk) [Audit Committee](index=41&type=section&id=Audit%20Committee) The company has established an Audit Committee, comprising three independent non-executive directors, which has reviewed the group's adopted accounting principles and practices, and discussed internal controls and financial reporting matters, including the unaudited condensed consolidated interim financial information for the period - The Company has established an Audit Committee of the Board in accordance with **Rules 3.21 and 3.22** of the Listing Rules, comprising three independent non-executive Directors[106](index=106&type=chunk) - The Audit Committee has reviewed the accounting principles and practices adopted by the Group with management and discussed internal controls and financial reporting matters, including the unaudited condensed consolidated interim financial information for the period[106](index=106&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。 MAOYE INTERNATIONAL HOLDINGS LIMITED 茂業國際控股有限公 司 （於開曼群島註冊成立的有限公司） （股份代號：848） 截至2025年6月30日止六個月之中期業績 摘要 1 • 門店零售總額（含租賃商戶）達人民幣3,404.5百萬元 • 銷售所得款項及租賃收入總額為人民幣2,980.4百萬元 • 經營收入總額為人民幣2,040.7百萬元 • 本期錄得除稅前利潤為人民幤52.4百萬元，淨利潤為人民幣11.9百萬元 • 期內每股基本盈利為人民幣0.50分，董事會不建議就截至2025年6月30日止六 個月派發中期股息 中期業績 茂業國際控股有限公司（「本公司」）董事（「董事」）會（「董事會」）宣佈本公司及其附屬 公司（「本集團」）截至2025年6月30日止六個月之未經審核綜合中期業績。 中期簡明綜合損益表 | | | 截至6月30日止六個月 | | | --- | --- | ...

[Report Summary](index=1&type=section&id=I.%20Report%20Summary) This section summarizes the Group's interim financial performance, highlighting increased losses and the board's decision regarding dividends [2025 Interim Performance Overview](index=1&type=section&id=1.1%202025%20Interim%20Performance%20Overview) The Group's loss for the 2025 interim period significantly widened, with loss attributable to owners of the Company increasing to approximately RMB 11.9 million and basic loss per share rising accordingly - Loss attributable to owners of the Company: approximately **RMB 11.9 million** in 2025 interim, a significant increase from approximately **RMB 4.1 million** in 2024 interim[3](index=3&type=chunk)[6](index=6&type=chunk) - Basic loss per share: **RMB 0.0052** in 2025 interim, an increase from **RMB 0.0018** in 2024 interim[3](index=3&type=chunk)[6](index=6&type=chunk) [Interim Dividend](index=1&type=section&id=1.2%20Interim%20Dividend) The Board resolved not to declare an interim dividend for 2025 - The Board resolved not to declare any interim dividend for the 2025 interim period[4](index=4&type=chunk)[7](index=7&type=chunk) [Management Discussion and Analysis](index=2&type=section&id=MANAGEMENT%20DISCUSSION%20AND%20ANALYSIS) This section provides an in-depth analysis of the Group's operational performance, strategic direction, and industry landscape [Industry Overview and Company Strategy](index=2&type=section&id=OVERVIEW) In H1 2025, the live e-commerce industry shifted from traffic to capability competition, with the healthy food segment showing strong resilience; the Group focuses on supply chain and private label incubation to address consumer stratification and high costs - The live e-commerce industry is accelerating its shift from traffic competition to capability competition, with platform algorithms continuously favoring vertical content[9](index=9&type=chunk)[12](index=12&type=chunk) - The healthy food segment demonstrates strong resilience, with increasing consumer demand for product innovation and scenario-specific adaptation[9](index=9&type=chunk)[12](index=12&type=chunk) - The Group focuses on deepening supply chain capabilities and incubating a private label ecosystem to address the dual challenges of stratified consumer demand and high supply chain costs[9](index=9&type=chunk)[12](index=12&type=chunk) [Business Review](index=2&type=section&id=BUSINESS%20REVIEW) The Group established a flexible and collaborative industrial network in the supply chain, focusing on food and beverage categories, laying a foundation for product innovation and quality control, with private labels forming an initial product matrix for convenient nutrition - At the supply chain level, the Group has established flexible supply capabilities that quickly respond to market demand by systematically integrating high-quality factory resources and focusing on food and beverage categories[10](index=10&type=chunk)[13](index=13&type=chunk) - In the private label sector, the Group has formed a preliminary product matrix covering fragmented dining scenarios, optimizing product experience through multiple rounds of user testing, focusing on convenient nutrition needs in fast-paced lifestyles[11](index=11&type=chunk)[13](index=13&type=chunk) - Although this strategic layout has not yet entered a full revenue conversion period, it has laid a solid foundation for continuous innovation and quality control of future product matrices[10](index=10&type=chunk)[13](index=13&type=chunk) [Strategic Outlook](index=3&type=section&id=STRATEGIC%20OUTLOOK) The Group will deepen its "user+data+innovation+supply+sharing" five-dimensional strategic framework, leveraging dual engines and three fundamental certainties to achieve value transformation and long-term competitive advantages - The Group will deepen its "user+data+innovation+supply+sharing" five-dimensional strategic framework to shift capabilities towards value conversion[15](index=15&type=chunk) - Implementation focuses on dual engines: 1. Building a dynamic demand perception system to penetrate from transaction touchpoints to lifestyle scenarios; 2. Accelerating the marketization of reserve products, leveraging supermarkets and convenience stores for "instantly available" light health consumption; 3. Exploring open collaboration of production capacity, channels, and data resources to reduce marginal costs of industrial innovation[16](index=16&type=chunk)[17](index=17&type=chunk) - Cultivating three fundamental certainties: 1. Supply chain resilience to overcome the dichotomy of cost and quality; 2. User-oriented innovation to let consumer demand define product evolution; 3. Technological penetration efficiency to reshape the matching efficiency of people, goods, and venues[18](index=18&type=chunk)[22](index=22&type=chunk) [Financial Review](index=4&type=section&id=FINANCIAL%20REVIEW) This section provides a detailed analysis of the Group's financial performance, including revenue, costs, expenses, and financial position [Revenue](index=4&type=section&id=REVENUE) Total revenue for the 2025 interim period decreased by 8.2% year-on-year to RMB 18.6 million, primarily due to the Group's strategic shift from brand agency operations to upstream supply chain extension and private label development, which has not yet fully converted into revenue 2025 Interim Revenue Details | Metric | 2025 (RMB '000) | 2025 (% of total revenue) | 2024 (RMB '000) | 2024 (% of total revenue) | | :--- | :--- | :--- | :--- | :--- | | Marketing Services | 15,514 | 83.5% | 19,484 | 96.3% | | Of which: Online Marketing | 12,028 | 64.7% | 19,484 | 96.3% | | Offline Marketing | 3,486 | 18.8% | — | 0% | | Private Label | 2,999 | 16.1% | — | 0% | | Others | 71 | 0.4% | 757 | 3.7% | | **Total** | **18,584** | **100.0%** | **20,241** | **100.0%** | - Total revenue decreased by approximately **8.2%** year-on-year, from **RMB 20.2 million** in 2024 interim to **RMB 18.6 million** in 2025 interim[14](index=14&type=chunk)[23](index=23&type=chunk)[26](index=26&type=chunk) - The decrease in revenue is primarily due to the Group's strategic shift from brand agency operations to upstream industrial chain extension, strengthening supply chain autonomy and private label product matrix development to enhance long-term competitiveness, which has not yet entered a full revenue conversion period[23](index=23&type=chunk)[26](index=26&type=chunk) [Cost of Sales, Gross Profit and Gross Profit Margin](index=5&type=section&id=COST%20OF%20SALES%2C%20GROSS%20PROFIT%20AND%20GROSS%20PROFIT%20MARGIN) Cost of sales for the 2025 interim period increased by 8.4% year-on-year, leading to a 33.5% decrease in gross profit to RMB 5.3 million and a 10.9 percentage point contraction in gross profit margin to 28.7%, mainly due to increased investment in private label business and offline marketing costs Changes in Cost of Sales, Gross Profit and Gross Profit Margin | Metric | 2025 (RMB '000) | 2024 (RMB '000) | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Cost of sales | 13,258 | 12,233 | Increase of 8.4% | | Gross profit | 5,326 | 8,008 | Decrease of 33.5% | | Gross profit margin | 28.7% | 39.6% | Decrease of 10.9 percentage points | - The increase in cost of sales was primarily due to increased investment during the incubation period of the private label business and higher offline marketing costs[24](index=24&type=chunk)[27](index=27&type=chunk) [Expenses](index=6&type=section&id=EXPENSES) Group selling and distribution expenses slightly increased, administrative expenses rose due to higher rent and renovation costs, and there were no income tax expenses due to losses incurred [Selling and Distribution Expenses](index=6&type=section&id=Selling%20and%20Distribution%20Expenses) Selling and distribution expenses for the 2025 interim period were approximately RMB 5.0 million, a slight year-on-year increase of 2.3%, primarily comprising staff salaries and benefits, with overall minimal change - Selling and distribution expenses: approximately **RMB 5.0 million** in 2025 interim, an increase of approximately **2.3%** year-on-year (2024 interim: approximately **RMB 4.9 million**)[29](index=29&type=chunk)[32](index=32&type=chunk) - Primary components: staff salaries and benefits[29](index=29&type=chunk)[32](index=32&type=chunk) [Administrative Expenses](index=6&type=section&id=Administrative%20Expenses) Administrative expenses for the 2025 interim period were approximately RMB 7.6 million, a 6.3% year-on-year increase, mainly due to higher rent and renovation costs - Administrative expenses: approximately **RMB 7.6 million** in 2025 interim, an increase of approximately **6.3%** year-on-year (2024 interim: approximately **RMB 7.2 million**)[30](index=30&type=chunk)[33](index=33&type=chunk) - Reason for increase: primarily due to higher rent and renovation expenses[30](index=30&type=chunk)[33](index=33&type=chunk) [Income Tax Expenses](index=6&type=section&id=Income%20Tax%20Expenses) There were no income tax expenses in the 2025 interim period due to corporate losses; two of the Group's Chinese subsidiaries, as high-tech enterprises, enjoy a preferential income tax rate of 15% - Income tax expenses: No income tax expenses in 2025 interim, primarily due to corporate losses[31](index=31&type=chunk)[34](index=34&type=chunk) - Preferential tax rate: Two of the Group's Chinese subsidiaries are approved as high-tech enterprises, eligible for a preferential income tax rate of **15%**[31](index=31&type=chunk)[34](index=34&type=chunk) [Financial Position and Liquidity](index=7&type=section&id=FINANCIAL%20POSITIONS) As of June 30, 2025, the Group's total equity and net current assets both decreased, primarily due to losses from operating activities and a reduction in cash and cash equivalents Key Financial Position Indicators | Metric | June 30, 2025 (RMB '000) | December 31, 2024 (RMB '000) | Change | | :--- | :--- | :--- | :--- | | Total equity | 38,700 | 50,500 | Decrease of approx. 23.4% | | Net current assets | 34,100 | 45,700 | Decrease of approx. 25.4% | | Cash and cash equivalents | 25,100 | 35,800 | Decrease of approx. 29.9% | - The decrease in total equity was primarily due to losses generated from operating activities[35](index=35&type=chunk)[38](index=38&type=chunk) - The decrease in cash and cash equivalents was primarily due to payments for operating activities[36](index=36&type=chunk)[39](index=39&type=chunk) [Capital Structure and Investments](index=8&type=section&id=CAPITAL%20STRUCTURE%20AND%20INVESTMENTS) The Group's gearing ratio significantly decreased, with no material capital expenditures, investments, or asset pledges, and no significant contingent liabilities or guarantees during the period [Gearing Ratio](index=8&type=section&id=GEARING%20RATIO) As of June 30, 2025, the Group's gearing ratio decreased to 7.9% from 13.2% on December 31, 2024, primarily due to a reduction in contract liabilities and other payables - Gearing ratio: **7.9%** as of June 30, 2025, a decrease from **13.2%** as of December 31, 2024[41](index=41&type=chunk)[47](index=47&type=chunk) - Reason for decrease: primarily due to a reduction in contract liabilities and other payables[41](index=41&type=chunk)[47](index=47&type=chunk) [Capital Expenditure](index=8&type=section&id=CAPITAL%20EXPENDITURE) The Group incurred no material capital expenditures in both the 2025 and 2024 interim periods - The Group had no material capital expenditure in both the 2025 and 2024 interim periods[42](index=42&type=chunk)[48](index=48&type=chunk) [Significant Investments Held/Future Plans for Material Investments or Capital Assets, and Material Acquisitions and Disposals of Subsidiaries, Associates and Joint Ventures](index=8&type=section&id=SIGNIFICANT%20INVESTMENTS%20HELD%2FFUTURE%20PLANS%20FOR%20MATERIAL%20INVESTMENTS%20OR%20CAPITAL%20ASSETS%2C%20AND%20MATERIAL%20ACQUISITIONS%20AND%20DISPOSALS%20OF%20SUBSIDIARIES%2C%20ASSOCIATES%20AND%20JOINT%20VENTURES) As of June 30, 2025, the Group had no significant investments, material acquisitions or disposals of subsidiaries, associates, and joint ventures, nor any pledged property, plant, and equipment - For the six months ended June 30, 2025, the Group had no significant investments or material acquisitions and disposals of subsidiaries, associates, and joint ventures[43](index=43&type=chunk)[49](index=49&type=chunk) - As of the date of this interim results announcement, the Group had no future plans for material investments or capital assets[44](index=44&type=chunk)[49](index=49&type=chunk) - As of June 30, 2025, no property, plant, and equipment were pledged[45](index=45&type=chunk)[50](index=50&type=chunk) [Contingent Liabilities and Guarantees](index=8&type=section&id=CONTINGENT%20LIABILITIES%20AND%20GUARANTEES) As of June 30, 2025, the Group had no significant contingent liabilities, guarantees, or any material claims or litigations - As of June 30, 2025, the Group had no significant contingent liabilities, guarantees, or any material claims or litigations recorded against it[46](index=46&type=chunk)[51](index=51&type=chunk) [Employees and Remuneration Policies](index=9&type=section&id=EMPLOYEES%20AND%20REMUNERATION%20POLICIES) The Group's total employee remuneration for the 2025 interim period was approximately RMB 7.5 million, a year-on-year decrease of 7.4%; remuneration is determined by performance, experience, and market conditions, with training and share award schemes to incentivize and retain talent - Total employee remuneration: approximately **RMB 7.5 million** in 2025 interim (2024 interim: approximately **RMB 8.1 million**), a year-on-year decrease of approximately **7.4%**[52](index=52&type=chunk)[55](index=55&type=chunk) - Remuneration policy: Determined based on employee performance, experience, and capabilities, with reference to comparable market cases, including salaries, bonuses, allowances, and state-managed retirement benefit schemes[53](index=53&type=chunk)[55](index=55&type=chunk) - Incentive plans: Restricted share unit schemes and restricted share award schemes are adopted to recognize and encourage employee contributions, retain talent, and attract suitable personnel[54](index=54&type=chunk)[55](index=55&type=chunk) [Financial Information](index=10&type=section&id=FINANCIAL%20INFORMATION) This section presents the Group's unaudited condensed consolidated statement of profit or loss and other comprehensive income, statement of financial position, and notes for the six months ended June 30, 2025, detailing financial results, asset-liability status, and accounting policies [Interim Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=10&type=section&id=INTERIM%20CONDENSED%20CONSOLIDATED%20STATEMENT%20OF%20PROFIT%20OR%20LOSS%20AND%20OTHER%20COMPREHENSIVE%20INCOME) The Group recorded a loss of RMB 11.853 million in the 2025 interim period, a significant increase from the RMB 4.122 million loss in 2024 interim, primarily due to decreased revenue, increased cost of sales, and expected credit losses on financial assets Summary of Interim Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income | Metric | 2025 (RMB '000) | 2024 (RMB '000) | | :--- | :--- | :--- | | Revenue | 18,584 | 20,241 | | Cost of sales | (13,258) | (12,233) | | Gross profit | 5,326 | 8,008 | | Other income and other net gains | (262) | 922 | | Selling and distribution expenses | (5,023) | (4,908) | | Administrative expenses | (7,624) | (7,170) | | Expected credit losses on financial assets | (4,270) | — | | Loss before income tax | (11,853) | (4,122) | | Loss for the period | (11,853) | (4,122) | [Interim Condensed Consolidated Statement of Financial Position](index=11&type=section&id=INTERIM%20CONDENSED%20CONSOLIDATED%20STATEMENT%20OF%20FINANCIAL%20POSITION) As of June 30, 2025, the Group's total assets and total equity both decreased, non-current assets slightly reduced, current assets significantly declined due to decreased cash and receivables, and current liabilities also substantially decreased Summary of Interim Condensed Consolidated Statement of Financial Position | Metric | June 30, 2025 (RMB '000) | December 31, 2024 (RMB '000) | | :--- | :--- | :--- | | Non-current assets | 4,614 | 4,817 | | Current assets | 37,407 | 53,355 | | Current liabilities | 3,300 | 7,650 | | Net current assets | 34,107 | 45,705 | | Net assets (Total equity) | 38,721 | 50,522 | [Notes to the Condensed Consolidated Interim Financial Statements](index=12&type=section&id=NOTES%20TO%20THE%20CONDENSED%20CONSOLIDATED%20INTERIM%20FINANCIAL%20STATEMENTS) This section details the Group's overview, basis of financial statement preparation, accounting policy changes, revenue and segment information, other income, loss before income tax, earnings per share calculation, dividend policy, aging analysis of trade receivables and payables, and capital structure [1. General Information](index=12&type=section&id=1.%20GENERAL%20INFORMATION) Doumeng Technology Co., Ltd. was incorporated in the Cayman Islands, listed on the Hong Kong Stock Exchange in 2019, with primary business in investment holding and its Chinese subsidiaries providing marketing services and other sales - The Company was incorporated in the Cayman Islands on **March 26, 2018**, and listed on The Stock Exchange of Hong Kong Limited on **March 14, 2019**[60](index=60&type=chunk)[64](index=64&type=chunk) - The Company's principal business is investment holding, while its subsidiaries' principal businesses are providing marketing services and other sales in China[61](index=61&type=chunk)[64](index=64&type=chunk) [2. Basis of Preparation and Changes in Accounting Policies](index=12&type=section&id=2.%20BASIS%20OF%20PREPARATION) Financial statements are prepared in accordance with HKAS 34, using the same accounting policies as the 2024 annual report, with no material impact from new HKFRS amendments - The condensed consolidated interim financial statements have been prepared in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting" and the applicable disclosure provisions of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited[62](index=62&type=chunk)[65](index=65&type=chunk) - These financial statements have been prepared in accordance with the same accounting policies adopted in the 2024 annual financial statements, and the newly issued and revised HKFRS have no material impact on these financial statements[63](index=63&type=chunk)[65](index=65&type=chunk)[66](index=66&type=chunk)[69](index=69&type=chunk) [4. Revenue and Segment Information](index=13&type=section&id=4.%20REVENUE%20AND%20SEGMENT%20INFORMATION) The Group's revenue is entirely from China, primarily comprising marketing services and other sales, with detailed breakdowns by category and changes in contract liabilities disclosed - For the six months ended June 30, 2025 and 2024, all of the Group's revenue was derived from China[71](index=71&type=chunk)[73](index=73&type=chunk) - The Group has a diversified customer base, with two customers whose transaction amounts exceeded **10%** of the Group's revenue for the six months ended June 30, 2025[71](index=71&type=chunk)[74](index=74&type=chunk) Revenue Categories and Recognition Timing | Revenue Category | 2025 (RMB '000) | 2024 (RMB '000) | | :--- | :--- | :--- | | Marketing Services | 15,514 | 19,484 | | Other Sales | 3,070 | 757 | | **Total** | **18,584** | **20,241** | | Revenue recognized at a point in time | 18,584 | 20,241 | Changes in Contract Liabilities | Metric | June 30, 2025 (RMB '000) | December 31, 2024 (RMB '000) | | :--- | :--- | :--- | | Balance at January 1 | 1,033 | 2,591 | | Decrease due to revenue recognized during the period | (1,033) | (2,591) | | Increase due to advance billing | 163 | 1,033 | | Balance at June 30/December 31 | 163 | 1,033 | [5. Other Income and Other Net Gains](index=15&type=section&id=5.%20OTHER%20INCOME%20AND%20OTHER%20NET%20GAINS) Other income and other net gains for the 2025 interim period resulted in a loss of RMB 262 thousand, compared to a gain of RMB 922 thousand in 2024 interim, primarily due to changes in net exchange gains Details of Other Income and Other Net Gains | Metric | 2025 (RMB '000) | 2024 (RMB '000) | | :--- | :--- | :--- | | Net exchange gain/(loss) | (609) | 651 | | Interest income | 170 | 317 | | Others | 177 | (46) | | **Total** | **(262)** | **922** | [6. Loss Before Income Tax](index=16&type=section&id=6.%20LOSS%20BEFORE%20INCOME%20TAX) Loss before income tax is primarily composed of amortization of intangible assets, depreciation of property, plant and equipment, impairment provision for trade and other receivables, short-term lease expenses, and staff costs Components of Loss Before Income Tax | Metric | 2025 (RMB '000) | 2024 (RMB '000) | | :--- | :--- | :--- | | Amortisation of intangible assets | 159 | 654 | | Depreciation of property, plant and equipment | 38 | 41 | | Impairment (reversal)/loss on trade receivables | (142) | — | | Impairment provision for other receivables | 4,412 | — | | Short-term lease expenses | 551 | 216 | | Total staff costs | 7,508 | 8,129 | [8. Loss Per Share](index=17&type=section&id=8.%20LOSS%20PER%20SHARE) Basic loss per share for the 2025 interim period was RMB 0.0052, an increase from RMB 0.0018 in 2024 interim, with diluted loss per share being consistent with basic loss per share Loss Per Share Details | Metric | 2025 (RMB '000) | 2024 (RMB '000) | | :--- | :--- | :--- | | Loss attributable to owners of the Company | 11,853 | 4,122 | | Weighted average number of ordinary shares in issue ('000) | 2,299,745 | 2,299,745 | | Loss per share (RMB) | 0.0052 | 0.0018 | - Diluted loss per share was consistent with basic loss per share, as there were no potentially dilutive ordinary shares for the six months ended June 30, 2025 and 2024[94](index=94&type=chunk)[95](index=95&type=chunk) [9. Dividends](index=19&type=section&id=9.%20DIVIDENDS) The Board resolved not to recommend or declare an interim dividend for the six months ended June 30, 2025 - The Board resolved not to recommend or declare an interim dividend for the six months ended June 30, 2025 (for the six months ended June 30, 2024: nil)[96](index=96&type=chunk)[98](index=98&type=chunk) [10. Trade Receivables](index=19&type=section&id=10.%20TRADE%20RECEIVABLES) As of June 30, 2025, net trade receivables were RMB 2.383 million, a decrease from RMB 3.345 million on December 31, 2024; the Group provides credit terms of 1 to 30 days and uses a simplified approach for expected credit loss provisions Net Trade Receivables and Aging Analysis | Metric | June 30, 2025 (RMB '000) | December 31, 2024 (RMB '000) | | :--- | :--- | :--- | | Trade receivables | 2,521 | 3,625 | | Less: Loss allowance | (138) | (280) | | **Net amount** | **2,383** | **3,345** | | **Aging analysis (by invoice date):** | | | | 0 – 30 days | 1,832 | 3,345 | | 31 – 60 days | 18 | — | | 181 – 365 days | 533 | — | - The Group grants credit terms ranging from **1 to 30 days** to its customers[102](index=102&type=chunk)[104](index=104&type=chunk) - The Group applies the simplified approach to provide for expected credit losses as required by HKFRS 9[103](index=103&type=chunk)[104](index=104&type=chunk) [11. Trade Payables](index=21&type=section&id=11.%20Trade%20Payables) As of June 30, 2025, trade payables were RMB 170 thousand, a significant decrease from RMB 585 thousand on December 31, 2024; credit terms typically range from 1 to 60 days Trade Payables and Aging Analysis | Metric | June 30, 2025 (RMB '000) | December 31, 2024 (RMB '000) | | :--- | :--- | :--- | | Trade payables | 170 | 585 | | **Aging analysis (by date of receipt of services and goods):** | | | | 0 – 30 days | 40 | 430 | | Over 365 days | 130 | 155 | - Credit terms for trade payables vary depending on agreements with different suppliers, generally ranging from **1 to 60 days**[108](index=108&type=chunk) [12. Capital](index=22&type=section&id=12.%20Capital) As of June 30, 2025, the issued and fully paid share capital was 2,300,000,000 shares, with a par value of RMB 1,967 thousand, consistent with December 31, 2024 - As of June 30, 2025, issued and fully paid shares: **2,300,000,000** shares, with a par value of **RMB 1,967 thousand**, consistent with December 31, 2024[112](index=112&type=chunk) [13. Events After The End Of The Reporting Period](index=22&type=section&id=13.%20EVENTS%20AFTER%20THE%20END%20OF%20THE%20REPORTING%20PERIOD) As of the financial statements approval date, the Group had no material disclosable events after the reporting period - As of the approval date of these financial statements, the Group had no material disclosable events after the reporting period[112](index=112&type=chunk)[113](index=113&type=chunk) [Other Information](index=23&type=section&id=OTHER%20INFORMATION) This section covers additional information regarding the Group's listed securities, corporate governance, directors' securities transactions, and the review and publication of interim financial information [Purchase, Sale or Redemption of Listed Securities](index=23&type=section&id=PURCHASE%2C%20SALE%20OR%20REDEMPTION%20OF%20LISTED%20SECURITIES) During the 2025 interim period, neither the Company nor its subsidiaries repurchased, sold, or redeemed any listed securities, and as of June 30, 2025, the Company held no treasury shares - Neither the Company nor its subsidiaries repurchased, sold, or redeemed any of the Company's listed securities during the 2025 interim period[114](index=114&type=chunk)[116](index=116&type=chunk) - As of June 30, 2025, the Company held no treasury shares[114](index=114&type=chunk)[116](index=116&type=chunk) [Compliance with CG Code](index=23&type=section&id=COMPLIANCE%20WITH%20CG%20CODE) The Company complied with all applicable CG Code provisions, except for Mr. Yang Bin holding both Chairman and Co-Chief Executive Officer roles, a deviation from C.2.1; the Board believes this arrangement benefits Group management, with senior management and the Board providing independent checks and balances - The Company has complied with all applicable code provisions set out in Part 2 of the Corporate Governance Code, except for a deviation from code provision C.2.1[115](index=115&type=chunk)[117](index=117&type=chunk) - The deviation is due to Mr. Yang Bin serving concurrently as both Chairman and Co-Chief Executive Officer[115](index=115&type=chunk)[117](index=117&type=chunk) - The Board believes that Mr. Yang's dual role as Chairman and Co-Chief Executive Officer does not pose any potential detriment to the Group's interests; instead, it benefits the Group's management, and the operations of senior management and the Board effectively check and balance his power[118](index=118&type=chunk)[121](index=121&type=chunk) [Model Code for Securities Transactions by Directors](index=24&type=section&id=MODEL%20CODE%20FOR%20SECURITIES%20TRANSACTIONS%20BY%20DIRECTORS) The Company has adopted the Model Code set out in Appendix C3 of the Listing Rules, and all Directors confirmed compliance with the code during the 2025 interim period - The Company has adopted the Model Code set out in Appendix C3 of the Listing Rules as its own code of conduct for Directors' securities transactions[120](index=120&type=chunk)[123](index=123&type=chunk) - Following specific inquiries to all Directors, they confirmed compliance with the Model Code and the Company's own code of conduct for Directors' securities transactions during the 2025 interim period[120](index=120&type=chunk)[123](index=123&type=chunk) [Review of the Interim Financial Information](index=25&type=section&id=REVIEW%20OF%20THE%20INTERIM%20FINANCIAL%20INFORMATION) The unaudited condensed consolidated interim financial information for 2025 interim has been reviewed by the Audit Committee and confirmed to comply with applicable accounting standards; the interim results announcement is published on the Company's and HKEX websites, with the interim report to be dispatched to shareholders and uploaded by end of September 2025 - The unaudited condensed consolidated interim financial information for the 2025 interim period has been reviewed by the Audit Committee but not audited by the Company's external auditor[124](index=124&type=chunk)[126](index=126&type=chunk) - The Audit Committee is satisfied that the Company's unaudited financial information has been prepared in accordance with applicable accounting standards[124](index=124&type=chunk)[126](index=126&type=chunk) - This interim results announcement has been published on the Company's website and the HKEX website, and the interim report will be dispatched to shareholders and published on the aforementioned websites by the end of September 2025[125](index=125&type=chunk)[127](index=127&type=chunk) [Definitions](index=26&type=section&id=DEFINITIONS) This section provides definitions for key terms and expressions used in this interim results announcement - This section provides definitions for key terms and expressions used in this interim results announcement[128](index=128&type=chunk)[129](index=129&type=chunk)[130](index=130&type=chunk)[131](index=131&type=chunk)

[Interim Results Announcement](index=2&type=section&id=Interim%20Results%20Announcement) This report details the Group's unaudited interim results for H1 2025, covering financial performance, business operations, and strategic outlook [Interim Condensed Consolidated Financial Statements](index=2&type=section&id=Interim%20Condensed%20Consolidated%20Financial%20Statements) The Group's H1 2025 unaudited interim financial statements show significant profit growth and stable assets, despite a net cash outflow from operations [Interim Condensed Consolidated Statement of Profit or Loss](index=2&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss) This statement details the Group's revenue, gross profit, and net profit for the period, highlighting significant profit growth | Indicator | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Revenue | 17,453 | 30,033 | | Gross Profit | 14,161 | 15,393 | | Profit Before Tax | 15,907 | 8,025 | | Profit for the Period | 15,144 | 8,230 | | Profit Attributable to Owners of the Company | 15,157 | 8,465 | | Basic and Diluted Earnings Per Share | 0.37 HK cents | 0.21 HK cents | - Profit for the period increased by **84.01%** year-on-year, from **HK$8,230 thousand** to **HK$15,144 thousand**, primarily due to a significant increase in profit before tax[4](index=4&type=chunk) [Interim Condensed Consolidated Statement of Comprehensive Income](index=3&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) This statement presents the Group's total comprehensive income, reflecting profit for the period and other comprehensive income items | Indicator | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Profit for the Period | 15,144 | 8,230 | | Other Comprehensive Income/(Loss) | 27,351 | (27,349) | | Total Comprehensive Income/(Loss) for the Period | 42,495 | (19,119) | | Total Comprehensive Income/(Loss) Attributable to Owners of the Company | 42,534 | (18,905) | - Total comprehensive income for the period turned from a **loss of HK$19,119 thousand** in the same period of 2024 to a **profit of HK$42,495 thousand** in 2025, mainly due to the positive impact of exchange differences on translation of overseas operations[5](index=5&type=chunk) [Interim Condensed Consolidated Statement of Financial Position](index=4&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) This statement provides a snapshot of the Group's assets, liabilities, and equity, indicating a continuously improving financial position | Indicator | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Non-current Assets | 999,045 | 980,356 | | Current Assets | 750,044 | 688,295 | | Current Liabilities | 183,750 | 158,342 | | Net Current Assets | 566,294 | 529,953 | | Total Assets Less Current Liabilities | 1,565,339 | 1,510,309 | | Non-current Liabilities | 346,403 | 308,945 | | Net Assets | 1,218,936 | 1,201,364 | | Total Equity | 1,218,936 | 1,201,364 | - As of June 30, 2025, total assets increased to **HK$1,749,089 thousand** and net assets increased to **HK$1,218,936 thousand**, demonstrating a continuous improvement in financial position[6](index=6&type=chunk)[7](index=7&type=chunk) [Interim Condensed Consolidated Statement of Cash Flows](index=6&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) This statement outlines the Group's cash movements from operating, investing, and financing activities, showing a shift to net cash outflow from operations | Indicator | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Net Cash (Used in)/Generated from Operating Activities | (13,361) | 109,286 | | Net Cash Used in Investing Activities | (22,067) | (201,295) | | Net Cash Generated from/(Used in) Financing Activities | 15,092 | (6,368) | | Net Decrease in Cash and Cash Equivalents | (20,336) | (98,377) | | Cash and Cash Equivalents at End of Period | 9,947 | 6,643 | - Net cash flow from operating activities turned from a **net inflow of HK$109,286 thousand** in the same period of 2024 to a **net outflow of HK$13,361 thousand** in 2025[8](index=8&type=chunk) - Net cash flow from financing activities turned from a **net outflow of HK$6,368 thousand** in the same period of 2024 to a **net inflow of HK$15,092 thousand**, primarily from new bank loans[8](index=8&type=chunk) [Notes to Interim Condensed Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20Interim%20Condensed%20Consolidated%20Financial%20Statements) This section provides supplementary information on the preparation basis, accounting policies, segment information, asset and liability composition, and earnings per share calculation [General Information](index=7&type=section&id=General%20Information) This section provides fundamental information about the company's registration, listing, and primary business activities - The company is incorporated in Bermuda, and its shares are listed on the Main Board of the Stock Exchange[9](index=9&type=chunk) - The Group's principal businesses include health and medical, trading of building materials and new energy products, property sales agency, property investment and leasing, residential property development, and new energy product procurement services[9](index=9&type=chunk) [Basis of Preparation](index=7&type=section&id=Basis%20of%20Preparation) This section details the accounting standards and methods used in preparing the interim condensed consolidated financial statements - The interim condensed consolidated financial statements are prepared in accordance with Hong Kong Accounting Standard 34 and the Listing Rules issued by the Hong Kong Institute of Certified Public Accountants[10](index=10&type=chunk) - The accounting policies and methods of computation adopted are consistent with those used in the annual consolidated financial statements for the year ended December 31, 2024[10](index=10&type=chunk) [Adoption of New and Revised HKFRSs](index=7&type=section&id=Adoption%20of%20New%20and%20Revised%20HKFRSs) This section addresses the impact of new and revised Hong Kong Financial Reporting Standards on the Group's financial reporting - The adoption of new and revised HKFRSs has not caused any significant changes to the Group's accounting policies, financial statement presentation, or reported amounts[11](index=11&type=chunk) [Revenue and Segment Information](index=7&type=section&id=Revenue%20and%20Segment%20Information) This section provides a breakdown of the Group's revenue and financial performance across its various reportable business segments [Reportable Segments](index=7&type=section&id=Reportable%20Segments) This section identifies the distinct business segments through which the Group operates and reports its financial results - The Group has four reportable segments: health and medical related business, trading business, property related business, and equity investment business[12](index=12&type=chunk) [Segment Revenue and Results](index=8&type=section&id=Segment%20Revenue%20and%20Results) This section presents the revenue and profit or loss generated by each of the Group's reportable business segments Segment Revenue and Results (HK$ thousand) | Segment | 2025 Revenue | 2025 Segment Profit/(Loss) | 2024 Revenue | 2024 Segment Profit/(Loss) | | :--- | :--- | :--- | :--- | :--- | | Health and Medical Related Business | 6,601 | 65 | 11,480 | 1,100 | | Trading Business | 810 | (1,016) | 10,327 | 6,594 | | Property Related Business | 10,042 | 6,056 | 8,226 | (16,022) | | Equity Investment Business | – | (841) | – | 16,634 | | **Total** | **17,453** | **4,264** | **30,033** | **8,306** | - Property related business turned from a **loss** in the same period of 2024 to a **profit** in 2025, while trading business and equity investment business turned from **profit to loss**[13](index=13&type=chunk) [Segment Assets and Liabilities](index=9&type=section&id=Segment%20Assets%20and%20Liabilities) This section details the assets and liabilities allocated to each of the Group's reportable business segments Segment Assets (HK$ thousand) | Segment | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Health and Medical Related Business | 16,108 | 13,134 | | Trading Business | 51,610 | 90,501 | | Property Related Business | 1,013,748 | 929,544 | | Equity Investment Business | 117,604 | 116,418 | | **Total Reportable Segment Assets** | **1,199,070** | **1,149,597** | Segment Liabilities (HK$ thousand) | Segment | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Health and Medical Related Business | 46,366 | 41,337 | | Trading Business | 113,301 | 107,532 | | Property Related Business | 248,572 | 217,585 | | Equity Investment Business | 847 | 122 | | **Total Reportable Segment Liabilities** | **409,086** | **366,576** | - Both assets and liabilities of the property related business showed **significant growth**, reflecting the expansion of this segment[14](index=14&type=chunk) [Revenue Breakdown](index=10&type=section&id=Revenue%20Breakdown) This section provides a detailed analysis of the Group's total revenue by source, highlighting key changes and trends Total Revenue (HK$ thousand) | Revenue Source | 2025 | 2024 | | :--- | :--- | :--- | | Sales of health and medical related products | 2,121 | 5,668 | | Health and medical management service income | 1,985 | 1,933 | | Medical aesthetic service income | 2,317 | 3,273 | | Sales of building materials | – | 8,718 | | Sales of new energy products | 589 | 222 | | Sales agency service income for health and medical related products | 221 | 1,387 | | Sales of CBD downstream products | 178 | 606 | | Revenue from contracts with customers | 7,411 | 21,807 | | Rental income | 10,042 | 8,226 | | **Total Revenue** | **17,453** | **30,033** | - Total revenue decreased by **41.7%** year-on-year, primarily due to a decrease of approximately **HK$8.7 million** in building materials sales and approximately **HK$3.5 million** in health and medical related product sales[15](index=15&type=chunk)[39](index=39&type=chunk) - Rental income grew against the trend, increasing from **HK$8,226 thousand** to **HK$10,042 thousand**[15](index=15&type=chunk) [Finance Costs](index=11&type=section&id=Finance%20Costs) This section details the Group's borrowing costs incurred during the period, primarily from bank loans and lease liabilities | Item | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Interest on bank loans | 4,769 | 6,141 | | Interest on lease liabilities | 35 | 10 | | **Total** | **4,804** | **6,151** | - Finance costs decreased by **22.6%** year-on-year, mainly due to a decrease in the average interest rate of bank loans[19](index=19&type=chunk)[45](index=45&type=chunk) [Income Tax Expense/(Credit)](index=12&type=section&id=Income%20Tax%20Expense%2F%28Credit%29) This section presents the Group's income tax expenses or credits for the period, including current and deferred tax components | Item | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Current income tax expense | 554 | 3,750 | | Deferred income tax expense/(credit) | 209 | (3,955) | | **Total** | **763** | **(205)** | - Income tax turned from a **credit of HK$205 thousand** in the same period of 2024 to an **expense of HK$763 thousand** in 2025[20](index=20&type=chunk) - China's corporate income tax rate is **25%**, with **5%** for small low-profit enterprises and **15%** for high-tech enterprises; Australia's corporate income tax rate is **30%**; Hong Kong's profits tax rate is **16.5%**, with **8.25%** for the first HK$2 million[20](index=20&type=chunk)[21](index=21&type=chunk) [Profit for the Period](index=13&type=section&id=Profit%20for%20the%20Period) This section outlines the various non-recurring and fair value adjustments that influenced the Group's net profit for the period | Item | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Impairment loss on receivables, net/(reversal of impairment loss) | 1,166 | (4,222) | | Impairment loss on investment in an associate | 461 | – | | Loss on partial disposal of investment in a joint venture | 127 | – | | Fair value (gain) on investments at fair value through profit or loss | (868) | (17,835) | | Net exchange (gain) | (5,794) | (4,366) | | Provision for equity-settled share option expense | 62 | 109 | - Profit for the period was affected by several non-recurring items, including impairment loss on receivables, impairment loss on investments, fair value gains, and exchange gains[22](index=22&type=chunk) [Dividends](index=13&type=section&id=Dividends) This section reports the interim dividend declared by the Board and the final dividend paid for the previous financial year - The Board has declared an interim dividend of **0.15 HK cents per share** for the six months ended June 30, 2025 (2024: nil)[23](index=23&type=chunk) - The 2024 final dividend of **0.4 HK cents per share** was paid on August 20, 2025, totaling approximately **HK$16,375,000**[23](index=23&type=chunk) [Earnings Per Share](index=13&type=section&id=Earnings%20Per%20Share) This section details the calculation of basic and diluted earnings per share, reflecting the profit attributable to ordinary shareholders | Indicator | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Profit attributable to owners of the Company for basic and diluted earnings per share | 15,157 | 8,465 | | Weighted average number of ordinary shares | 4,064,710,835 | 4,092,562,636 | - Basic and diluted earnings per share were **0.37 HK cents**, an increase from **0.21 HK cents** in the same period of 2024[4](index=4&type=chunk) - Share options had no dilutive effect as the average market price of the company's shares was below the assumed exercise price[27](index=27&type=chunk) [Investment Properties](index=14&type=section&id=Investment%20Properties) This section provides a reconciliation of the carrying amount of the Group's investment properties, including additions and fair value adjustments | Item | June 30, 2025 (HK$ thousand) | January 1, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Carrying amount at beginning of period | 610,292 | 598,509 | | Additions | 7,024 | 8,131 | | Fair value gain | – | 23,813 | | Exchange differences | 18,330 | (20,161) | | **Carrying amount at end of period** | **635,646** | **610,292** | - The carrying amount of investment properties increased to **HK$635,646 thousand**, mainly due to additions and positive exchange differences[29](index=29&type=chunk) [Trade Receivables](index=14&type=section&id=Trade%20Receivables) This section presents an aging analysis of the Group's trade receivables, indicating their collectability and potential credit risk | Aging | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | 0 to 30 days | 3,042 | 4,480 | | 31 to 90 days | 46 | 14,886 | | Over 90 days | 16,193 | 7,875 | | **Total** | **19,281** | **27,241** | - Total trade receivables decreased to **HK$19,281 thousand**, with the proportion of those over ninety days increasing[31](index=31&type=chunk) [Prepayments, Deposits and Other Receivables](index=15&type=section&id=Prepayments%2C%20Deposits%20and%20Other%20Receivables) This section details the composition of the Group's prepayments, deposits, and other receivables, including loans and advances | Item | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Loans and interest receivable, net | 523,360 | 467,126 | | Prepayments to suppliers | 39,431 | 32,412 | | Deposits for pre-sale properties under development | 23,736 | 15,982 | | Performance bonds receivable | 27,395 | 58,531 | | **Total** | **628,560** | **594,183** | - Loans and interest receivable, net, increased to **HK$523,360 thousand**, including approximately **HK$219,160 thousand** lent to Guangyu Zhaoneng, with the remainder to third parties[32](index=32&type=chunk)[33](index=33&type=chunk) [Restricted Bank Deposits](index=16&type=section&id=Restricted%20Bank%20Deposits) This section describes the nature and amount of bank deposits that are restricted from immediate use, typically as collateral - Restricted bank deposits amounted to **HK$7,035 thousand**, denominated in AUD, serving as collateral for bank loans[34](index=34&type=chunk) [Trade Payables](index=16&type=section&id=Trade%20Payables) This section provides an aging analysis of the Group's trade payables, reflecting its short-term obligations to suppliers | Aging | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | 0 to 90 days | 31 | – | | Over 90 days | 10 | 10 | | **Total** | **41** | **10** | - Total trade payables increased to **HK$41 thousand**, primarily from amounts due within zero to ninety days[35](index=35&type=chunk) [Share Capital](index=16&type=section&id=Share%20Capital) This section outlines the Group's authorized and issued share capital, detailing the number of shares and their par value | Item | Number of Shares | Amount (HK$ thousand) | | :--- | :--- | :--- | | Authorized share capital (par value HK$0.01 per share) | 10,000,000,000 | 100,000 | | Issued and fully paid share capital (par value HK$0.01 per share) | 4,093,756,636 | 40,938 | - Issued and fully paid share capital remained unchanged at **4,093,756,636 shares**, amounting to **HK$40,938 thousand**[35](index=35&type=chunk) [Capital Commitments](index=16&type=section&id=Capital%20Commitments) This section reports the Group's contractual obligations for future capital expenditures, primarily related to investments and property development | Item | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Capital injection into an associate | 10,465 | 10,163 | | Construction cost commitments for properties under development for sale | 63,210 | 86,030 | | **Total** | **73,675** | **96,193** | - Total capital commitments decreased to **HK$73,675 thousand**, mainly due to a reduction in construction cost commitments for properties under development for sale[36](index=36&type=chunk) [Management Discussion and Analysis](index=17&type=section&id=Management%20Discussion%20and%20Analysis) Management reviews the Group's financial performance and business operations for the six months ended June 30, 2025, noting improved profitability despite revenue decline [Financial Review](index=17&type=section&id=Financial%20Review) This section provides a detailed analysis of the Group's key financial performance indicators, including revenue, profit, and expenses [Revenue](index=17&type=section&id=Revenue_FinancialReview) This section analyzes the Group's total revenue for the period, highlighting the primary drivers of changes | Indicator | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Revenue | 17,453 | 30,033 | - Revenue decreased by **41.7%** year-on-year to approximately **HK$17.5 million**, primarily due to a decrease of approximately **HK$8.7 million** in building materials sales and approximately **HK$3.5 million** in health and medical related product sales[39](index=39&type=chunk) [Gross Profit and Gross Margin](index=17&type=section&id=Gross%20Profit%20and%20Gross%20Margin) This section examines the Group's gross profit and gross margin, explaining the factors contributing to their changes | Indicator | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Gross Profit | 14,161 | 15,393 | | Gross Margin (%) | 81.1 | 51.3 | - Gross profit decreased by approximately **7.8%** to **HK$14.2 million**, mainly due to a **HK$3.2 million** decrease in gross profit from health and medical related business, partially offset by a **HK$1.8 million** increase in gross profit from property related business[40](index=40&type=chunk)[42](index=42&type=chunk) - Gross margin significantly increased to **81.1%**, primarily due to a decrease in the proportion of trading business (with lower gross margin) to total revenue[40](index=40&type=chunk)[42](index=42&type=chunk) [Other Income and Gains, Net](index=18&type=section&id=Other%20Income%20and%20Gains%2C%20Net) This section details the various components of the Group's other income and gains, net, and their impact on overall profitability | Indicator | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Other Income and Gains, Net | 22,647 | 32,599 | - Other income and gains, net, decreased by approximately **30.7%** to **HK$22.6 million**, mainly due to a significant decrease in fair value gains on investments at fair value through profit or loss (from **HK$17.8 million** to **HK$0.9 million**)[43](index=43&type=chunk) - The decrease was partially offset by an increase in exchange gains (from **HK$4.4 million** to **HK$5.8 million**) and interest income (from **HK$8.9 million** to **HK$14.8 million**)[43](index=43&type=chunk) [Total Operating Expenses](index=18&type=section&id=Total%20Operating%20Expenses) This section reviews the Group's total operating expenses, identifying the main categories and reasons for their fluctuations | Indicator | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Total Operating Expenses | 13,254 | 15,889 | - Total operating expenses decreased by approximately **16.4%** to **HK$13.3 million**, mainly due to a decrease of approximately **HK$0.8 million** in pre-sale commissions and rental expenses for Australian residential property development projects, and a decrease of approximately **HK$0.9 million** in marketing and promotion expenses[44](index=44&type=chunk) [Finance Costs](index=18&type=section&id=Finance%20Costs_FinancialReview) This section analyzes the Group's finance costs, primarily focusing on interest expenses from bank loans | Indicator | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Finance Costs | 4,804 | 6,151 | - Finance costs decreased by approximately **22.6%** to **HK$4.8 million**, mainly due to a decrease of approximately **HK$1.4 million** in interest expenses resulting from lower average interest rates on bank loans[45](index=45&type=chunk) [Profit After Tax](index=19&type=section&id=Profit%20After%20Tax) This section discusses the Group's profit after tax, highlighting the key factors that contributed to its significant increase | Indicator | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Profit After Tax | 15,144 | 8,230 | - Profit after tax increased by approximately **84.1%** year-on-year to **HK$15.1 million**, primarily benefiting from increased property related business income and profit, higher interest income, and positive exchange gains[46](index=46&type=chunk)[48](index=48&type=chunk) - The increase was partially offset by a decrease in fair value gains on investments at fair value through profit or loss (from **HK$17.8 million** to **HK$0.9 million**) and an impairment loss on receivables (from a **reversal of HK$4.5 million** to a **loss of HK$1.3 million**)[46](index=46&type=chunk) [Business Review](index=19&type=section&id=Business%20Review) This section provides an overview of the performance of each of the Group's core business segments during the period [Health and Medical Related Business](index=19&type=section&id=Health%20and%20Medical%20Related%20Business) This section reviews the performance of the Group's health and medical related business, noting a decline in revenue and profit | Indicator | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Revenue | 6,601 | 11,500 | | Segment Profit | 100 | 1,100 | - Health and medical related business revenue decreased by approximately **42.6%** to **HK$6.6 million**, and segment profit decreased by approximately **90.9%** to **HK$0.1 million**[47](index=47&type=chunk) - The decrease in revenue and profit was mainly due to a **HK$3.2 million** decline in gross profit from reduced sales orders for health and medical related products, partially offset by effective control of operating expenses (a **HK$1.8 million** reduction)[47](index=47&type=chunk) [Trading Business](index=20&type=section&id=Trading%20Business) This section analyzes the performance of the Group's trading business, which experienced a significant decline in revenue and shifted to a loss | Indicator | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Revenue | 800 | 10,300 | | Segment Profit/(Loss) | (1,000) | 6,600 | - Trading business revenue decreased by approximately **92.2%** to **HK$0.8 million**, and turned from a **profit of approximately HK$6.6 million** in the same period of 2024 to a **loss of approximately HK$1.0 million**[49](index=49&type=chunk) - This was primarily attributable to reduced international trade sales and a change in impairment provision for trade and other receivables (from a **reversal of impairment loss of approximately HK$4.5 million** to an **impairment loss of approximately HK$1.3 million**)[49](index=49&type=chunk) [Property Related Business](index=20&type=section&id=Property%20Related%20Business) This section reviews the performance of the Group's property related business, which saw revenue growth and a turnaround to profit | Indicator | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Revenue | 10,000 | 8,200 | | Segment Profit/(Loss) | 6,100 | (16,000) | - Property related business revenue increased by approximately **22.0%** to **HK$10.0 million**, and turned from a **loss of approximately HK$16.0 million** in the same period of 2024 to a **profit of approximately HK$6.1 million**[50](index=50&type=chunk) - The improved performance was mainly due to no significant change in the fair value of investment properties (compared to a significant decrease in the same period of 2024) and an increase in rental income of approximately **HK$1.8 million**[50](index=50&type=chunk) - Civil works for the Australian residential property development project (Yarrabend, Melbourne) have been completed, with pre-sales commencing in November 2022[50](index=50&type=chunk) [Equity Investment Business](index=20&type=section&id=Equity%20Investment%20Business) This section discusses the performance of the Group's equity investment business, which shifted from a profit to a loss | Indicator | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Segment Profit/(Loss) | (800) | 16,600 | - Equity investment business turned from a **profit of approximately HK$16.6 million** in the same period of 2024 to a **loss of approximately HK$0.8 million**[51](index=51&type=chunk) - This was primarily due to a decrease in revenue and profit from equity investment entities, leading to a decline in fair value gains on investments at fair value through profit or loss (from **HK$17.8 million** to **HK$0.9 million**), and a loss of approximately **HK$0.1 million** from the partial disposal of an investment in a joint venture[51](index=51&type=chunk) [Financial Position Review](index=21&type=section&id=Financial%20Position%20Review) This section provides an analysis of the Group's balance sheet, detailing changes in non-current assets, current assets, liabilities, and net assets [Non-current Assets](index=22&type=section&id=Non-current%20Assets) This section reviews the changes in the Group's non-current assets, identifying the main drivers of their increase | Indicator | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Total Non-current Assets | 999,045 | 980,356 | - Non-current assets increased by approximately **HK$18.6 million** to **HK$999.0 million**, mainly due to an increase of approximately **HK$25.3 million** in investment properties and approximately **HK$2.3 million** in investments at fair value through profit or loss[53](index=53&type=chunk) - The increase was partially offset by a decrease of approximately **HK$3.6 million** in investments in joint ventures and approximately **HK$3.6 million** in deferred tax assets[53](index=53&type=chunk) [Current Assets](index=22&type=section&id=Current%20Assets) This section analyzes the changes in the Group's current assets, highlighting increases in properties under development and receivables | Indicator | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Total Current Assets | 750,044 | 688,295 | - Current assets increased by approximately **HK$61.8 million** to **HK$750.1 million**, mainly due to an increase of approximately **HK$54.3 million** in properties under development for sale and approximately **HK$35.4 million** in prepayments, deposits, and other receivables[53](index=53&type=chunk) - The increase was partially offset by a decrease of approximately **HK$20.0 million** in bank and cash balances and approximately **HK$8.0 million** in trade receivables[53](index=53&type=chunk) [Liabilities](index=22&type=section&id=Liabilities) This section details the changes in the Group's total liabilities, primarily driven by increases in bank borrowings and dividends payable | Indicator | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Total Liabilities | 530,153 | 467,287 | - Total liabilities increased by approximately **HK$62.8 million** to **HK$530.1 million**, mainly due to an increase of approximately **HK$43.1 million** in bank borrowings, approximately **HK$16.4 million** in dividends payable, and approximately **HK$6.1 million** in contract liabilities[54](index=54&type=chunk) - The increase was partially offset by a decrease of approximately **HK$3.7 million** in amounts due to related parties and approximately **HK$4.8 million** in accrued expenses and other payables[54](index=54&type=chunk) [Net Assets](index=22&type=section&id=Net%20Assets) This section reviews the changes in the Group's total net assets, influenced by foreign exchange gains and profit for the period | Indicator | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Total Net Assets | 1,219,000 | 1,201,400 | - Total net assets increased by approximately **HK$17.6 million** to **HK$1,219.0 million**, mainly due to exchange gains of approximately **HK$35.2 million** from the translation of overseas operations and profit for the period of approximately **HK$15.2 million**[55](index=55&type=chunk) - The increase was partially offset by dividends declared of approximately **HK$16.4 million**, fair value loss on equity investments at fair value through other comprehensive income of approximately **HK$7.8 million**, and share repurchases of approximately **HK$8.9 million**[55](index=55&type=chunk) [Liquidity and Financial Resources](index=22&type=section&id=Liquidity%20and%20Financial%20Resources) This section assesses the Group's liquidity position and financial resources, including cash flows, bank loans, and capital structure [Cash Flow](index=22&type=section&id=Cash%20Flow) This section provides an overview of the Group's cash flows from operating, investing, and financing activities | Indicator | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Net Cash (Used in)/Generated from Operating Activities | (13,361) | 109,286 | | Net Cash Used in Investing Activities | (22,067) | (201,295) | | Net Cash Generated from/(Used in) Financing Activities | 15,092 | (6,368) | | Net Decrease in Cash and Cash Equivalents | (20,336) | (98,377) | | Cash and Cash Equivalents at End of Period | 9,947 | 6,643 | - Net cash outflow from operating activities was **HK$13.4 million**, net cash outflow from investing activities was **HK$22.0 million**, and net cash inflow from financing activities was **HK$15.1 million**[58](index=58&type=chunk)[59](index=59&type=chunk) - Cash and cash equivalents at the end of the period amounted to **HK$9.9 million**, primarily denominated in HKD (**52.8%**) and RMB (**39.2%**)[58](index=58&type=chunk) [Bank Loans](index=23&type=section&id=Bank%20Loans) This section details the composition and maturity profile of the Group's bank loans, which are primarily used for working capital Bank Loan Composition (HK$ thousand) | Type | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Floating-rate RMB bank loans | 68,444 | 74,834 | | Floating-rate AUD bank loans | 131,937 | 90,123 | | Fixed-rate RMB bank loans | 144,542 | 136,864 | | **Total** | **344,923** | **301,821** | Bank Loan Maturity Profile (HK$ thousand) | Maturity | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Within one year | 93,949 | 83,176 | | One to two years | 164,095 | 120,969 | | Two to five years | 59,537 | 66,983 | | Over five years | 27,342 | 30,693 | | **Total** | **344,923** | **301,821** | - Total bank loans increased to **HK$344.9 million**, primarily used for working capital, with no unutilized bank facilities[59](index=59&type=chunk) - The Board believes the Group has **sufficient liquidity and financial resources** to meet future needs[61](index=61&type=chunk) [Capital Structure](index=24&type=section&id=Capital%20Structure) This section describes the Group's capital structure, comprising equity attributable to owners of the company - The Group's capital structure comprises equity attributable to owners of the company (i.e., issued share capital and reserves)[62](index=62&type=chunk) [Financial Policy](index=24&type=section&id=Financial%20Policy) This section outlines the Group's prudent financial management approach, focusing on liquidity and credit risk assessment - The Group adopts a prudent financial management approach, maintaining a **sound liquidity position** and continuously assessing customer credit to mitigate credit risk[63](index=63&type=chunk) [Gearing Ratio](index=24&type=section&id=Gearing%20Ratio) This section presents the Group's gearing ratio, indicating its leverage and financial risk profile | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Gearing Ratio | 24.3% | 21.6% | - The gearing ratio increased from **21.6%** as of December 31, 2024, to **24.3%** as of June 30, 2025[64](index=64&type=chunk) - Net debt was approximately **HK$391.4 million**, and equity attributable to owners of the company was approximately **HK$1,219.2 million**[64](index=64&type=chunk) [Capital Expenditure](index=25&type=section&id=Capital%20Expenditure) This section reports the Group's capital expenditures, primarily for the acquisition of property, plant, and equipment | Item | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Acquisition of property, plant and equipment | 580 | 44 | - Capital expenditure for the acquisition of property, plant, and equipment significantly increased to approximately **HK$0.58 million**[66](index=66&type=chunk) [Capital Commitments](index=25&type=section&id=Capital%20Commitments_Liquidity) This section details the Group's outstanding capital commitments, mainly for investments in associates and property development | Item | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Contracted but not provided for | 73,675 | 96,193 | - Total capital commitments amounted to approximately **HK$73.7 million**, primarily comprising capital injection into an associate and construction cost commitments for properties under development for sale[67](index=67&type=chunk) [Pledged Assets of the Group](index=25&type=section&id=Pledged%20Assets%20of%20the%20Group) This section lists the Group's assets that have been pledged as collateral for borrowings | Item | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Investment properties | 474,654 | 452,969 | | Properties under development for sale | 195,324 | 181,850 | | Restricted bank deposits | 7,035 | 6,550 | | **Total** | **677,013** | **641,369** | - The total net book value of pledged assets increased to **HK$677.0 million**, mainly comprising investment properties and properties under development for sale[68](index=68&type=chunk) [Contingent Liabilities](index=25&type=section&id=Contingent%20Liabilities) This section confirms the absence of any significant contingent liabilities for the Group as of the reporting date - As of June 30, 2025, the Group had no significant contingent liabilities[69](index=69&type=chunk) [Overview of the Group's Investment Strategy](index=25&type=section&id=Overview%20of%20the%20Group%27s%20Investment%20Strategy) This section outlines the Group's strategic focus on the health and wellness industry and its diversified investment approach - The Group firmly believes in the immense potential of the big health industry, with a corporate vision of "using technology and professional services to enhance the health and beauty of more people"[70](index=70&type=chunk) - The primary investment objective is to seize market opportunities in the big health industry and allocate funds for diversified investments to maximize returns[70](index=70&type=chunk)[71](index=71&type=chunk) [Significant Acquisitions and Disposals](index=26&type=section&id=Significant%20Acquisitions%20and%20Disposals) This section confirms that there were no significant acquisitions or disposals of subsidiaries, associates, or joint ventures during the period - For the six months ended June 30, 2025, there were no significant acquisitions or disposals of subsidiaries, associates, or joint ventures[72](index=72&type=chunk) [Significant Lending Transactions](index=26&type=section&id=Significant%20Lending%20Transactions) This section details the Group's lending activities, including its business model, credit risk assessment policies, and key terms of loans receivable [Business Model and Credit Risk Assessment Policy](index=26&type=section&id=Business%20Model%20and%20Credit%20Risk%20Assessment%20Policy) This section describes the Group's approach to providing loans and its robust framework for managing associated credit risks - The Group provides short-term interest-bearing loans and long-term interest-bearing revolving financing to customers and related parties to enhance cash returns and investment income[73](index=73&type=chunk) - Strict credit risk management and internal control procedures have been established, including due diligence, customer credit risk assessment, evaluation and approval processes, post-loan monitoring, and loan recovery[73](index=73&type=chunk)[76](index=76&type=chunk) - For significant loans or those involving related parties, reporting, announcement, and shareholder approval requirements under Chapters 14 and 14A of the Listing Rules will be fulfilled[74](index=74&type=chunk)[75](index=75&type=chunk) [Key Terms of Loans Receivable](index=28&type=section&id=Key%20Terms%20of%20Loans%20Receivable) This section provides a summary of the principal terms and outstanding balances of the Group's loans receivable Outstanding Loans Receivable Details (June 30, 2025) | Customer | Maturity Date | Annual Interest Rate | Carrying Amount (HK$ thousand) | Percentage of Total Loans Receivable | | :--- | :--- | :--- | :--- | :--- | | Guangyu Zhaoneng | On or before December 31, 2026 | One-year Loan Prime Rate plus 3.05% | 219,160 | 43.3% | | Other Borrowers (11 parties) | July 2025 to March 2026 | 3% to 8% | 286,223 | 56.7% | | **Total** | | | **505,383** | **100%** | - The loan receivable from Guangyu Zhaoneng is personally guaranteed by Mr. Zhou Xuzhou[77](index=77&type=chunk) [Impairment and Write-off of Loans Receivable](index=29&type=section&id=Impairment%20and%20Write-off%20of%20Loans%20Receivable) This section reports on the impairment provisions and write-offs made for the Group's loans receivable during the period - For the six months ended June 30, 2025, a loss allowance of approximately **HK$1,104,000** was recognized (2024: nil)[78](index=78&type=chunk) - No write-offs were made for loans receivable during the period[78](index=78&type=chunk) [Material Investments Held](index=29&type=section&id=Material%20Investments%20Held) This section provides an overview of the Group's investment portfolio, confirming no single investment exceeds 5% of total assets | Indicator | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Total Investment Portfolio | 105,900 | 108,100 | - The Group's investment portfolio is approximately **HK$105.9 million**, with no single investment's carrying amount exceeding **5%** of the Group's total assets[79](index=79&type=chunk) [Future Plans for Material Investments or Capital Assets](index=29&type=section&id=Future%20Plans%20for%20Material%20Investments%20or%20Capital%20Assets) This section outlines the Group's future plans for significant investments and capital asset acquisitions, beyond existing commitments - Apart from the disclosed capital commitments, the Board has not approved any other plans for material investments or additions to capital assets[80](index=80&type=chunk) - Future acquisitions will be funded through internal resources and other financing activities, including bank borrowings[80](index=80&type=chunk) [Exchange Rate Fluctuations and Related Hedging Risks](index=29&type=section&id=Exchange%20Rate%20Fluctuations%20and%20Related%20Hedging%20Risks) This section discusses the Group's exposure to foreign exchange rate fluctuations and its approach to hedging such risks - The Group's revenue, expenses, and monetary assets and liabilities are primarily denominated in RMB, HKD, EUR, CHF, and AUD[81](index=81&type=chunk) - No foreign exchange forward contracts were entered into during the period, and there were no unrealized gains or losses[81](index=81&type=chunk) [Employees and Remuneration Policy](index=29&type=section&id=Employees%20and%20Remuneration%20Policy) This section provides information on the Group's workforce size and its compensation and benefits policies | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Number of Employees | 49 | 46 | - The Group's total number of employees increased to **49**[82](index=82&type=chunk) - Remuneration policy is consistent with market practices, determined by performance and experience, offering pension and medical plans, and includes a 2019 share option scheme[84](index=84&type=chunk) - The Group values recruiting and retaining experienced talent, providing training, and striving to create a harmonious working environment[84](index=84&type=chunk) [Recent Developments](index=30&type=section&id=Recent%20Developments) The Group's recent developments focus on strategic expansion in the health and wellness industry, supported by favorable government policies and market growth [Macroeconomic and Industry Overview](index=30&type=section&id=Macroeconomic%20and%20Industry%20Overview) This section provides an overview of the macroeconomic environment and the health industry trends influencing the Group's operations - The Chinese government highly values the development of the health industry, launching the "Healthy China 2030" strategy, with the market size expected to exceed **RMB16 trillion** by 2030[85](index=85&type=chunk) - China has entered a moderately aging society, with a population of **310 million** aged 60 and above, giving rise to a "silver economy" market exceeding **RMB9 trillion**; demand for preventive medicine among younger groups is surging[86](index=86&type=chunk) - Despite sluggish global economic growth, the Chinese government's macroeconomic regulation and consumption stimulus policies inject vitality into economic development, benefiting the health and medical industry[87](index=87&type=chunk) [Health and Medical Related Business Segment - Cell Therapy and Health Management Business](index=32&type=section&id=Health%20and%20Medical%20Related%20Business%20Segment%20-%20Cell%20Therapy%20and%20Health%20Management%20Business) This section details the Group's progress and strategic initiatives in the cell therapy and health management sectors, including R&D and clinical trials - The Chinese government continues to issue policies supporting cell therapy development, listing cell culture and cell therapy drugs in the encouraged industry catalog, and accelerating the industrialization of cutting-edge technologies[88](index=88&type=chunk) - The global stem cell market size is projected to grow from **US$15 billion** in 2023 to **US$48.83 billion** by 2034; the Chinese market is expected to grow from **RMB141.8 billion** in 2024 to **RMB203.5 billion** by 2028[89](index=89&type=chunk) - The Group strategically invested in Yinguan Bio and established Meiaikang, continuously expanding its presence in the cell therapy field[90](index=90&type=chunk) - Yinguan Bio has made progress in IND applications for stem cell new drugs, with **4 cell drug clinical trial applications accepted**, of which **2 received implied approval**, and obtained multiple patent authorizations[91](index=91&type=chunk)[93](index=93&type=chunk) - Meiaikang completed **132 clinical trials**, showing significant efficacy, and is applying for related patent clusters[95](index=95&type=chunk) - The Group's Shenzhen and Nanjing clinics provide high-end health management services, operating steadily[95](index=95&type=chunk) [Health and Medical Related Business Segment - Skin Health Management Business](index=35&type=section&id=Health%20and%20Medical%20Related%20Business%20Segment%20-%20Skin%20Health%20Management%20Business) This section highlights the Group's initiatives in the skin health management business, including new brand launches and strategic collaborations - The light medical aesthetics market is rapidly penetrating, and the Group launched the "Jixiaojian" brand, integrating medical aesthetics and efficacy skincare, offering a "**60% light medical aesthetics + 40% minimalist efficient skincare**" combination[97](index=97&type=chunk)[98](index=98&type=chunk) - "Jixiaojian" collaborates with internationally renowned raw material companies like DSM and Ashland, launching multiple product lines simultaneously across online and offline channels[98](index=98&type=chunk) - Strategic cooperation has been established with medical aesthetic equipment leaders such as Lumenis and Peninsula, and R&D collaborations with Shenzhen Xuanjia and Juyuan Bio for supramolecular technology and recombinant collagen skincare products[99](index=99&type=chunk) [Internationalization Strategy](index=37&type=section&id=Internationalization%20Strategy) This section outlines the Group's efforts to expand its business globally, with a focus on European and Australian markets - For European operations, a subsidiary was established in Switzerland, launching the CBD high-end health consumer brand AlpReleaf, which has obtained EU and UK certifications, with sales covering **22 European countries**[100](index=100&type=chunk) - For Australian operations, the wholly-owned Yarrabend boutique townhouse project is steadily progressing in sales and construction[100](index=100&type=chunk) - The Group will continue to strengthen its international strategic layout, accelerate international business expansion, enhance brand depth, and boost channel development[101](index=101&type=chunk) [Outlook](index=37&type=section&id=Outlook) The Group is optimistic about China's economic recovery and its robust financial position, focusing on health and wellness, market expansion, and shareholder returns - China's economy is expected to continue its upward trend, providing a favorable environment for the Group's development[102](index=102&type=chunk) - The Group possesses **net current assets of approximately HK$566.3 million**, indicating a solid financial foundation[102](index=102&type=chunk) - The Group will continue to focus on the health and medical sector, optimize its skin health management business, expand sales channels, and explore opportunities for stable cash flow or high growth[102](index=102&type=chunk) - Overseas business scale is steadily expanding, distribution channels are widening, and brand building is improving[102](index=102&type=chunk) - The Board has declared an interim dividend of **0.15 HK cents per share**, and will continue to provide capital returns to shareholders through dividends and share repurchases[102](index=102&type=chunk) [Dividends](index=38&type=section&id=Dividends_Corporate) The Board has declared an interim dividend of 0.15 HK cents per share for the six months ended June 30, 2025, payable on October 31, 2025 - An interim dividend of **0.15 HK cents per share**, totaling approximately **HK$6,141,000**, will be paid on October 31, 2025[103](index=103&type=chunk) - The interim dividend is not recognized as a dividend payable for the six months ended June 30, 2025, but will be recognized as an appropriation for the year ending December 31, 2025[103](index=103&type=chunk) [Closure of Register of Members](index=38&type=section&id=Closure%20of%20Register%20of%20Members) The company will temporarily suspend share transfer registration from September 26 to October 2, 2025, to determine eligibility for the interim dividend - The register of members will be closed from **Friday, September 26, 2025, to Thursday, October 2, 2025**[104](index=104&type=chunk) - To qualify for the interim dividend, all duly completed transfer forms, together with the relevant share certificates, must be lodged with Tricor Investor Services Limited by **4:30 p.m. on Thursday, September 25, 2025**[104](index=104&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities or Sale of Treasury Shares](index=38&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company%27s%20Listed%20Securities%20or%20Sale%20of%20Treasury%20Shares) The company repurchased 29,706,000 shares for approximately HK$8,847,264 during the period, holding them as treasury shares with no immediate plans for use or sale - For the six months ended June 30, 2025, the company repurchased **29,706,000 shares** for a total consideration of approximately **HK$8,847,264**[105](index=105&type=chunk) - The repurchased shares have not yet been cancelled and are held by the company as treasury shares, with no current intention to use or sell them[105](index=105&type=chunk) - The Directors believe that the share repurchases will lead to an increase in net asset value per share and/or earnings per share[105](index=105&type=chunk) [Corporate Governance](index=38&type=section&id=Corporate%20Governance) The company has adopted and complied with all applicable code provisions of the Corporate Governance Code as set out in Appendix C1 of the Listing Rules - The company has adopted and complied with the principles and all applicable code provisions of the Corporate Governance Code as set out in Appendix C1 of the Listing Rules[106](index=106&type=chunk) [Standard of Securities Transactions by Directors](index=38&type=section&id=Standard%20of%20Securities%20Transactions%20by%20Directors) The company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers, and all directors confirmed compliance during the period - The company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers as its code of conduct for directors' securities transactions[107](index=107&type=chunk) - All Directors confirmed compliance with the standards set out in the Model Code for the six months ended June 30, 2025[107](index=107&type=chunk) [Events After Reporting Period](index=39&type=section&id=Events%20After%20Reporting%20Period) No significant events affecting the Group occurred after the reporting period and up to the date of this announcement - No significant events affecting the Group occurred after the reporting period and up to the date of this announcement[108](index=108&type=chunk) [Review of Unaudited Interim Financial Information](index=39&type=section&id=Review%20of%20Unaudited%20Interim%20Financial%20Information) The Audit Committee reviewed the unaudited interim financial information for the six months ended June 30, 2025, discussing accounting principles and internal controls - The Audit Committee has reviewed the unaudited interim financial information for the six months ended June 30, 2025, and discussed accounting principles, internal controls, and financial reporting matters[109](index=109&type=chunk) [Publication of Interim Results Announcement and Interim Report](index=39&type=section&id=Publication%20of%20Interim%20Results%20Announcement%20and%20Interim%20Report) The interim results announcement has been published on the HKEX and company websites, with the interim report to follow for shareholders - The interim results announcement has been published on the HKEX website (www.hkexnews.hk) and the company's website (www.meilleure.com.cn)[110](index=110&type=chunk) - The interim report will be dispatched to the company's shareholders and published on the aforementioned websites in due course[110](index=110&type=chunk) [Definitions](index=39&type=section&id=Definitions) This section provides definitions for key terms used throughout the announcement, including company names, business segments, and regulatory bodies - Provides definitions for key terms such as "14th Five-Year Plan", "AlpReleaf", "Jixiaojian", "Guangyu Zhaoneng", and "Yinguan Bio"[111](index=111&type=chunk)[113](index=113&type=chunk)[114](index=114&type=chunk) [Acknowledgements](index=42&type=section&id=Acknowledgements) The Board of Directors expresses its sincere gratitude to all employees, shareholders, and business partners for their contributions - The Board of Directors extends its sincere gratitude to all employees, shareholders, and business partners of the Group[115](index=115&type=chunk)

Condensed Consolidated Financial Statements [Condensed Consolidated Statement of Profit or Loss](index=1&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss) For the six months ended June 30, 2025, the company achieved significant growth in revenue and gross profit, turning a prior-period loss into a profit for the period, with a substantial increase in basic and diluted earnings per share Condensed Consolidated Statement of Profit or Loss (HKD thousands) | Metric | 2025 | 2024 | Year-on-year Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 1,005,250 | 781,805 | 28.58% | | Cost of sales | (747,743) | (580,954) | 28.71% | | Gross profit | 257,507 | 200,851 | 28.21% | | Profit before tax | 75,015 | 8,567 | 775.64% | | Profit for the period attributable to owners of the Company | 64,293 | 7,053 | 811.57% | | Basic and diluted earnings per share | 0.69 HK cents | 0.08 HK cents | 762.50% | [Condensed Consolidated Statement of Comprehensive Income](index=2&type=section&id=Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) Profit for the period significantly increased, while exchange differences from translating foreign operations shifted from a loss to a gain, driving a substantial positive growth in total comprehensive income attributable to owners of the Company Condensed Consolidated Statement of Comprehensive Income (HKD thousands) | Metric | 2025 | 2024 | Year-on-year Change (HKD thousands) | | :--- | :--- | :--- | :--- | | Profit for the period | 64,293 | 7,053 | 57,240 | | Exchange differences arising from translation of foreign operations | 68,674 | (14,422) | 83,096 | | Total comprehensive income/(loss) for the period attributable to owners of the Company | 132,967 | (7,369) | 140,336 | [Condensed Consolidated Statement of Financial Position](index=3&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the Group's total assets and shareholders' equity both increased, with net current assets remaining robust, indicating continuous improvement in financial position Condensed Consolidated Statement of Financial Position (HKD thousands) | Metric | June 30, 2025 | December 31, 2024 | Change (HKD thousands) | | :--- | :--- | :--- | :--- | | Total non-current assets | 2,198,413 | 2,168,485 | 29,928 | | Total current assets | 1,907,629 | 1,785,810 | 121,819 | | Total current liabilities | 507,492 | 478,660 | 28,832 | | Net current assets | 1,400,137 | 1,307,150 | 92,987 | | Total assets less current liabilities | 3,598,550 | 3,475,635 | 122,915 | | Total non-current liabilities | 532,963 | 496,498 | 36,465 | | Net assets (Total equity) | 3,065,587 | 2,979,137 | 86,450 | Notes to the Condensed Consolidated Financial Statements [1. Basis of Preparation](index=5&type=section&id=1.%20Basis%20of%20Preparation) The unaudited condensed consolidated interim financial information is prepared in accordance with HKAS 34 and the Listing Rules, using the historical cost convention, and should be read in conjunction with the annual financial statements - The interim financial information is unaudited, prepared in accordance with HKAS 34 and the Listing Rules, using the historical cost convention, and should be read in conjunction with the annual financial statements[7](index=7&type=chunk) [2. Changes in Accounting Policies and Disclosures](index=5&type=section&id=2.%20Changes%20in%20Accounting%20Policies%20and%20Disclosures) The adoption of the revised HKFRS accounting standard (Amendments to HKAS 21: Lack of Exchangeability) during the period had no significant financial impact on the Group's condensed consolidated interim financial information - The adoption of the revised HKFRS 21 'Lack of Exchangeability' had no significant impact on the interim financial information[8](index=8&type=chunk) [3. Operating Segments](index=5&type=section&id=3.%20Operating%20Segments) The Group has only one reportable operating segment, which is the design, development, production, and after-sales service of general aviation aircraft piston engines and spare parts, thus no segment information is presented - The Group has only one operating segment: general aviation aircraft piston engines and spare parts business, including design, development, production, and after-sales service[9](index=9&type=chunk) [4. Revenue](index=6&type=section&id=4.%20Revenue) The Group's revenue primarily derives from aircraft engine and spare parts sales, dominated by the US market, with total revenue increasing by **28.58%** year-on-year during the period Revenue Analysis (HKD thousands) | Revenue Source | 2025 | 2024 | Year-on-year Change (%) | | :--- | :--- | :--- | :--- | | Sales of aircraft engines and spare parts | 961,645 | 729,799 | 31.77% | | Provision of services | 43,605 | 52,006 | -16.15% | | **Total Revenue** | **1,005,250** | **781,805** | **28.58%** | Revenue by Geographical Market (HKD thousands) | Region | 2025 | 2024 | Year-on-year Change (%) | | :--- | :--- | :--- | :--- | | United States | 781,295 | 621,202 | 25.77% | | Europe | 133,591 | 112,032 | 19.24% | | Others | 90,364 | 48,571 | 86.05% | | **Total Revenue** | **1,005,250** | **781,805** | **28.58%** | [5. Profit Before Tax](index=6&type=section&id=5.%20Profit%20Before%20Tax) Profit before tax significantly increased, primarily influenced by higher cost of inventories sold, reversal of inventory write-downs, and impairment loss on investments in associates Key Deductions/(Additions) to Profit Before Tax (HKD thousands) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Cost of inventories sold | 726,907 | 549,392 | | Cost of services provided | 20,836 | 31,562 | | Inventories (reversal of write-down)/write-down | (11,537) | 5,230 | | Depreciation of property, plant and equipment | 23,254 | 20,580 | | Depreciation of right-of-use assets | 7,269 | 7,109 | | Amortisation of other intangible assets | 42,814 | 42,838 | | Impairment loss on investments in associates | 13,805 | – | - The period recorded a **reversal of inventory write-down of HKD11,537 thousand**, compared to a write-down of HKD5,230 thousand in the prior period, positively impacting gross profit[11](index=11&type=chunk) - An **impairment loss of HKD13,805 thousand** on investments in associates was recognised this period, with no such loss in the prior period[11](index=11&type=chunk) [6. Income Tax](index=7&type=section&id=6.%20Income%20Tax) Group income tax expense primarily arises from taxable profits in other regions, with deferred tax shifting from a prior-year gain to an expense, leading to a significant increase in total income tax expense Income Tax Expense (HKD thousands) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Current – Other regions: Expense for the period | 5,813 | 5,296 | | Deferred tax | 4,909 | (3,782) | | **Total income tax expense** | **10,722** | **1,514** | - No Hong Kong profits tax provision was made this period, with income tax primarily calculated based on the tax rates of the countries/jurisdictions where the Group operates[12](index=12&type=chunk) [7. Earnings Per Share Attributable to Owners of the Company](index=7&type=section&id=7.%20Earnings%20Per%20Share%20Attributable%20to%20Owners%20of%20the%20Company) Profit attributable to owners of the Company significantly increased, while the weighted average number of ordinary shares outstanding remained unchanged, leading to a substantial rise in basic and diluted earnings per share Basis for Earnings Per Share Calculation (HKD thousands) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Profit attributable to owners of the Company | 64,293 | 7,053 | | Weighted average number of ordinary shares in issue during the period | 9,303,374,783 | 9,303,374,783 | | Basic and diluted earnings per share | 0.69 HK cents | 0.08 HK cents | - No potential dilutive ordinary shares were issued in the current or prior period[15](index=15&type=chunk) [8. Dividends](index=7&type=section&id=8.%20Dividends) The Company did not pay, declare, or propose any dividends for the period ended June 30, 2025, but the 2024 final dividend was approved by shareholders - The Company did not pay any dividends for the period ended June 30, 2025[16](index=16&type=chunk) - The 2024 final dividend of **HKD46,517,000** was approved by shareholders[16](index=16&type=chunk) [9. Property, Plant and Equipment](index=8&type=section&id=9.%20Property%2C%20Plant%20and%20Equipment) Additions to property, plant and equipment remained largely consistent with the prior period, indicating sustained capital investment Additions to Property, Plant and Equipment (HKD thousands) | Period | Additions | | :--- | :--- | | First half of 2025 | 21,118 | | First half of 2024 | 20,894 | [10. Goodwill](index=8&type=section&id=10.%20Goodwill) All Group goodwill relates to the German cash-generating unit, with US cash-generating unit goodwill fully impaired in prior years, and no impairment loss recognised this period - All goodwill relates to the German cash-generating unit, with goodwill for the US cash-generating unit fully impaired in prior years[18](index=18&type=chunk)[21](index=21&type=chunk) - No impairment loss on goodwill was recognised for the six months ended June 30, 2025 and 2024[35](index=35&type=chunk) [11. Trade Receivables](index=8&type=section&id=11.%20Trade%20Receivables) Net trade receivables significantly increased, and credit concentration risk with a single major customer rose, while impairment losses decreased Trade Receivables (HKD thousands) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Trade receivables | 185,555 | 130,540 | | Impairment loss | (6,005) | (6,764) | | **Net carrying amount** | **179,550** | **123,776** | - The Group's trade receivables include **41%** (December 31, 2024: 26%) due from a major customer, indicating increased credit concentration risk[19](index=19&type=chunk) Ageing Analysis of Trade Receivables (HKD thousands) | Ageing | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Within 1 month | 135,054 | 89,398 | | 1 to 2 months | 38,435 | 20,916 | | 2 to 3 months | 592 | 8,993 | | Over 3 months | 5,469 | 4,469 | | **Total** | **179,550** | **123,776** | [12. Amounts Due from Fellow Subsidiaries](index=9&type=section&id=12.%20Amounts%20Due%20from%20Fellow%20Subsidiaries) Amounts due from fellow subsidiaries primarily consist of trade receivables within one month, with the period-end balance increasing Ageing Analysis of Amounts Due from Fellow Subsidiaries (HKD thousands) | Ageing | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Within 1 month | 21,477 | 15,830 | [13. Trade Payables](index=9&type=section&id=13.%20Trade%20Payables) Total trade payables slightly increased, primarily concentrated in amounts due within one month, with a typical credit period of 45 days Ageing Analysis of Trade Payables (HKD thousands) | Ageing | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Within 1 month | 86,716 | 79,362 | | 1 to 2 months | 50,847 | 47,442 | | 2 to 3 months | 460 | 4,434 | | Over 3 months | 716 | 630 | | **Total** | **138,739** | **131,868** | - Trade payables are non-interest bearing and generally settled on 45-day terms[23](index=23&type=chunk) Chairman's Report and Management Discussion and Analysis [Overall Review](index=10&type=section&id=Overall%20Review) The Group achieved significant revenue and gross profit growth in the first half of 2025, turning a substantial profit for the period, driven by strong performance in general aviation aircraft piston engine business and a significant increase in return on equity Key Financial Indicators for First Half of 2025 (HKD thousands) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Revenue | 1,005,250 | 781,805 | | Gross profit | 257,507 | 200,851 | | Profit for the period | 64,293 | 7,053 | | Profit/(Loss) from general aviation aircraft piston engine business | 70,925 | (3,277) | | Basic and diluted earnings per share | 0.69 HK cents | 0.08 HK cents | | Return on equity | 2.1% | 0.2% | - Profit for the period was primarily contributed by the general aviation aircraft piston engine business, which achieved a turnaround from loss to profit[25](index=25&type=chunk) [Business Review](index=10&type=section&id=Business%20Review) The Group's general aviation aircraft piston engine business achieved double-digit growth in revenue and gross profit in the first half of 2025, turning profitable due to significant capacity enhancement, increased order delivery, and continuous advancement of the WCM production management system Performance of General Aviation Aircraft Piston Engine Business (HKD thousands) | Metric | First half of 2025 | First half of 2024 | | :--- | :--- | :--- | | Revenue | 1,005,250 | 781,805 | | Gross profit | 257,507 | 200,851 | | Profit/(Loss) for the period | 70,925 | (3,277) | - Revenue and gross profit growth are primarily attributed to the completion of new facilities, investment in new production equipment, stable operation of the new ERP system, and the advancement of the World Class Manufacturing (WCM) production management system, significantly enhancing production capacity and order delivery volume[26](index=26&type=chunk) [Enhanced Production Efficiency](index=11&type=section&id=Enhanced%20Production%20Efficiency) - Under the WCM production management system, US production lines achieved efficient operations and significantly reduced delivery times through the 'Bluefin' project and the new crankcase machining center[27](index=27&type=chunk) - German operations continuously improved delivery volume and product quality, enhancing customer experience through increased automation, digital tools, and production process optimization[27](index=27&type=chunk) [Product Expansion](index=11&type=section&id=Product%20Expansion) - The Jet-A engine series has accumulated over **12 million flight hours**, demonstrating exceptional performance, reliability, and customer satisfaction[28](index=28&type=chunk) [Service Enhancement](index=11&type=section&id=Service%20Enhancement) - Launched a new mobile-responsive website, enhancing features like Avgas and Jet-A engine management simulators and Titan experimental engine configurators, to improve customer satisfaction[33](index=33&type=chunk) - Phased implementation of a 24/7 global after-sales service support model aims to provide comprehensive service by year-end, enhancing user experience[33](index=33&type=chunk) - New service centers were established in Europe and Asia, expanding global service capabilities and adding advanced diagnostics and remote fleet monitoring services[33](index=33&type=chunk) [Enhanced Supply Chain Resilience](index=11&type=section&id=Enhanced%20Supply%20Chain%20Resilience) - Diversified sourcing and supplier partnerships help mitigate tariff risks, stabilize inventory, and enable efficient working capital management[30](index=30&type=chunk) [Growth in OEM Business Order Demand](index=11&type=section&id=Growth%20in%20OEM%20Business%20Order%20Demand) - Robust and growing order demand from customers such as Cirrus Aircraft, Tecnam Aircraft, and Piper Aircraft continues to drive market share expansion[31](index=31&type=chunk) [Continental Aerospace Technologies Academy's Global Expansion Strengthened](index=11&type=section&id=Continental%20Aerospace%20Technologies%20Academy%27s%20Global%20Expansion%20Strengthened) - The Group's training academy further strengthened its global presence, offering both in-person and remote maintenance training[32](index=32&type=chunk) [Successful 120th Anniversary Celebration of US Subsidiary](index=12&type=section&id=Successful%20120th%20Anniversary%20Celebration%20of%20US%20Subsidiary) - The Group's US subsidiary successfully celebrated its 120th anniversary, reaffirming its commitment to 'Continuing the Legacy, Forging the Future'[34](index=34&type=chunk) [Financial Review](index=12&type=section&id=Financial%20Review) The Group maintains a robust financial position with no goodwill impairment, continuous growth in intangible assets, ample liquidity, and a healthy gearing ratio - The Group consistently maintains sufficient working capital, with total current assets reaching **HKD1,907,629 thousand**[39](index=39&type=chunk) - Cash and cash equivalents combined with time deposits totaled **HKD807,822 thousand**, indicating strong liquidity[39](index=39&type=chunk) - The gearing ratio was **8.6%** (December 31, 2024: 8.8%), maintaining a healthy level[40](index=40&type=chunk) [Goodwill](index=12&type=section&id=Goodwill) Goodwill Value (HKD thousands) | Date | Goodwill | | :--- | :--- | | June 30, 2025 | 14,828 | | December 31, 2024 | 13,080 | - All goodwill relates to the German cash-generating unit, with no impairment loss recognised this period[35](index=35&type=chunk) [Other Intangible Assets](index=12&type=section&id=Other%20Intangible%20Assets) Other Intangible Assets Value (HKD thousands) | Date | Value | | :--- | :--- | | June 30, 2025 | 1,303,720 | | December 31, 2024 | 1,270,538 | - Other intangible assets include development in progress, trademarks, product technology, licenses, completed projects, and customer relationships[36](index=36&type=chunk) [Investments in Associates](index=12&type=section&id=Investments%20in%20Associates) Profit and Loss Related to Associates (HKD thousands) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Share of loss of associates | 2,008 | 2,201 | | Profit on deemed disposal of associates | 94 | 10,011 | - As of June 30, 2025, the Group's investments in associates were fully impaired[37](index=37&type=chunk) [Administrative Expenses](index=12&type=section&id=Administrative%20Expenses) Administrative Expenses (HKD thousands) | Period | Amount | | :--- | :--- | | First half of 2025 | 162,792 | | First half of 2024 | 154,023 | - Administrative expenses include salaries and wages, product liability expenses, legal and professional fees, among others[38](index=38&type=chunk) [Liquidity, Capital Structure and Financial Resources](index=12&type=section&id=Liquidity%2C%20Capital%20Structure%20and%20Financial%20Resources) Liquidity and Capital Structure Indicators (HKD thousands) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Current assets | 1,907,629 | 1,785,810 | | Cash and cash equivalents and time deposits | 807,822 | 799,458 | | Current liabilities | 507,492 | 478,660 | | Total equity | 3,065,587 | 2,979,137 | | Interest-bearing debts (Lease liabilities) | 289,590 | 288,591 | | Gearing ratio | 8.6% | 8.8% | [Pledge of the Group's Assets](index=13&type=section&id=Pledge%20of%20the%20Group%27s%20Assets) As of June 30, 2025, and December 31, 2024, the Group had no assets pledged to secure bank borrowings - The Group had no assets pledged to obtain bank financing[41](index=41&type=chunk) [Foreign Exchange Risk](index=13&type=section&id=Foreign%20Exchange%20Risk) The Group's exposure to foreign exchange risk is minimal, as most business transactions, assets, and liabilities are denominated in the functional currencies of the operating units - The Group's exposure to foreign exchange risk is minimal, as most business transactions are denominated in the functional currencies of the operating units[42](index=42&type=chunk) [Material Acquisitions and Disposals](index=13&type=section&id=Material%20Acquisitions%20and%20Disposals) The Group had no material acquisitions or disposals during the period - The Group had no material acquisitions or disposals during the period[43](index=43&type=chunk) [Events After the Reporting Period](index=13&type=section&id=Events%20After%20the%20Reporting%20Period) As of the date of this announcement, no significant events occurred after the reporting period - As of the date of this announcement, no significant events occurred after the reporting period[44](index=44&type=chunk) [Contingent Liabilities](index=13&type=section&id=Contingent%20Liabilities) As of June 30, 2025, the Group had no material contingent liabilities - The Group had no material contingent liabilities[45](index=45&type=chunk) [Employees and Remuneration Policy](index=13&type=section&id=Employees%20and%20Remuneration%20Policy) Both the Group's employee headcount and total salaries increased, with remuneration policies based on performance and market conditions, offering various benefits to maintain good employee relations Employee Headcount and Salaries (HKD thousands) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Employee headcount | 614 | 604 | | Employee wages and salaries (for the period) | 181,408 | 157,226 | - Remuneration policies are formulated based on employee performance and market conditions, offering benefits such as medical, life insurance, and discretionary bonus schemes[46](index=46&type=chunk) [Outlook](index=14&type=section&id=Outlook) The Group will continue to advance its WCM strategy, focus on new piston engine R&D, and adhere to long-term strategies of product innovation, customer centricity, and lean manufacturing to address market challenges - The Group will continue to advance its WCM production management system strategy, focusing on the research and development and modification of new piston engines[47](index=47&type=chunk) - The new Jet-A piston engine CD-170R received the Editor's Choice Award from Flight Magazine and is awaiting approval from the European Union Aviation Safety Agency (EASA)[47](index=47&type=chunk) - Facing tariff fluctuations, labor shortages, and global political and economic instability, the Group will adhere to long-term strategies such as product design innovation, customer centricity, and lean manufacturing capabilities[47](index=47&type=chunk) [Corporate Governance](index=14&type=section&id=Corporate%20Governance) The Company is committed to maintaining good corporate governance practices, has complied with all provisions of the Corporate Governance Code in Appendix C1 of the Listing Rules, and will regularly review and improve them - The Company has implemented and complied with all code provisions of the Corporate Governance Code in Part 2 of Appendix C1 of the Listing Rules[48](index=48&type=chunk) - The Company will regularly review and improve its corporate governance practices, referencing the latest developments in corporate governance[48](index=48&type=chunk) [Purchase, Redemption or Sale of the Company's Listed Securities](index=14&type=section&id=Purchase%2C%20Redemption%20or%20Sale%20of%20the%20Company%27s%20Listed%20Securities) Neither the Company nor its subsidiaries purchased, sold, or redeemed any of the Company's listed securities during the reporting period, and there were no treasury shares - Neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities during the reporting period[49](index=49&type=chunk) - As of June 30, 2025, the Company held no treasury shares[50](index=50&type=chunk) [Standard Code for Securities Transactions](index=14&type=section&id=Standard%20Code%20for%20Securities%20Transactions) The Company has adopted the Standard Code in Appendix C3 of the Listing Rules as the code of conduct for directors' securities transactions, with all directors confirming compliance - The Company has adopted the Standard Code in Appendix C3 of the Listing Rules as the code of conduct for directors' securities transactions[51](index=51&type=chunk) - All directors confirmed compliance with the requirements set out in the Standard Code for the six months ended June 30, 2025[51](index=51&type=chunk) [Audit Committee](index=15&type=section&id=Audit%20Committee) The Audit Committee, comprising three independent non-executive directors, is responsible for reviewing and overseeing financial statements, risk management, and internal control systems - The Audit Committee, composed of three independent non-executive directors, is responsible for reviewing and overseeing the Group's financial reporting process, risk management, and internal control systems[52](index=52&type=chunk) [Review of Interim Results](index=15&type=section&id=Review%20of%20Interim%20Results) The unaudited condensed consolidated interim financial information for the six months ended June 30, 2025, has been reviewed by the Audit Committee and Ernst & Young - The unaudited condensed consolidated interim financial information has been reviewed by the Audit Committee and Ernst & Young[53](index=53&type=chunk) [Publication of Interim Report](index=15&type=section&id=Publication%20of%20Interim%20Report) The 2025 Interim Report will be published on the Company's and HKEX websites in due course and dispatched to shareholders - The 2025 Interim Report will be published on the Company's website (www.cath.com.hk) and the HKEX website (www.hkexnews.hk), and dispatched to shareholders[54](index=54&type=chunk)