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)

[Financial Summary](index=1&type=section&id=%E8%B2%A1%E5%8B%99%E6%91%98%E8%A6%81) [Key Financial Indicators](index=1&type=section&id=%E4%B8%BB%E8%A6%81%E8%B2%A1%E5%8B%99%E6%8C%87%E6%A8%99) For the six months ended June 30, 2025, turnover decreased by 12.0% to RMB 9.591 billion, while operating profit surged by 466.6% to RMB 81 million, and profit attributable to shareholders turned profitable at RMB 42 million Key Financial Indicators | Indicator | 2025 (RMB) | Year-over-Year Change | | :--- | :--- | :--- | | Turnover | RMB 9.591 billion | -12.0% | | Gross Profit | RMB 1.140 billion | -8.9% | | Gross Profit Margin | 11.89% | +0.40 percentage points | | Operating Profit | RMB 81 million | +466.6% | | Operating Profit Margin | 0.84% | +0.71 percentage points | | Profit Attributable to Equity Holders of the Company | RMB 42 million | Turned profitable (increased by RMB 97 million) | | Basic Earnings Per Share | RMB 0.03 | Turned profitable | - Same-store sales decreased by approximately **8.20%** year-over-year, with large hypermarket format decreasing by approximately **9.85%**, supermarket format by approximately **6.16%**, and convenience store format by approximately **11.67%**[2](index=2&type=chunk) [Store Network Overview](index=1&type=section&id=%E9%96%80%E5%BA%97%E7%B6%B2%E7%B5%A1%E6%A6%82%E6%B3%81) As of the end of the reporting period, the Group operated 3,091 stores, with 95 new stores opened during the period, including 83 supermarkets and 12 convenience stores Store Network Overview | Indicator | Number of Stores | | :--- | :--- | | Total Stores Operated | 3,091 | | New Stores Opened This Period | 95 | | - Supermarket Format | 83 | | - Convenience Store Format | 12 | [Condensed Consolidated Financial Statements](index=2&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8) [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=2&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E6%90%8D%E7%9B%8A%E5%8F%8A%E5%85%B6%E4%BB%96%E7%B6%9C%E5%90%88%E6%94%B6%E7%9B%8A%E8%A1%A8) For the six months ended June 30, 2025, the company's turnover was RMB 9,591,172 thousand, a decrease from the prior year, with total profit for the period of RMB 59,707 thousand, turning profitable from a loss of RMB 27,850 thousand in the prior year, and profit attributable to equity holders of the Company of RMB 42,246 thousand Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income | Indicator | 2025 (RMB '000) | 2024 (RMB '000) | | :--- | :--- | :--- | | Turnover | 9,591,172 | 10,896,547 | | Gross Profit | 1,140,095 | 1,251,896 | | Other Income | 639,751 | 902,425 | | Other Income and Other Gains and Losses | 410,898 | 282,829 | | Distribution and Selling Costs | (1,696,579) | (1,973,101) | | Administrative Expenses | (311,328) | (324,077) | | Profit Before Tax | 84,066 | 17,522 | | Income Tax Expense | (24,359) | (45,372) | | Total Profit (Loss) for the Period | 59,707 | (27,850) | | Profit (Loss) Attributable to Equity Holders of the Company | 42,246 | (54,809) | | Basic Earnings (Loss) Per Share | 3.1 fen | (4.9) fen | [Condensed Consolidated Statement of Financial Position](index=3&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81%E8%A1%A8) As of June 30, 2025, total assets were RMB 17,580,927 thousand, a decrease from December 31, 2024; equity attributable to equity holders of the Company turned positive to RMB 112,332 thousand, with total equity amounting to RMB 478,149 thousand Condensed Consolidated Statement of Financial Position | Indicator | June 30, 2025 (RMB '000) | December 31, 2024 (RMB '000) | | :--- | :--- | :--- | | Total Assets | 17,580,927 | 19,662,370 | | Non-current Assets | 10,270,051 | 11,382,383 | | Current Assets | 7,310,876 | 7,923,415 | | Equity Attributable to Equity Holders of the Company | 112,332 | (286,639) | | Total Equity | 478,149 | 67,931 | | Total Liabilities | 17,102,778 | 19,594,439 | [Notes to the Condensed Consolidated Financial Statements](index=5&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8%E9%99%84%E8%A8%BB) [Principal Activities and Liquidity](index=5&type=section&id=%E4%B8%BB%E7%87%9F%E6%A5%AD%E5%8B%99%E8%88%87%E6%B5%81%E5%8B%95%E6%80%A7) Lianhua Supermarket Holdings Co., Ltd. primarily operates chain supermarkets, hypermarkets, and convenience stores in East China; despite net current liabilities, directors believe liquidity risk is effectively managed through non-current unrestricted time deposits and bill settlement, ensuring the Group's going concern - Principal business activities include operating chain supermarkets, hypermarkets, and convenience stores, primarily located in East China[6](index=6&type=chunk) Net Current Liabilities and Unrestricted Time Deposits | Indicator | June 30, 2025 (RMB '000) | December 31, 2024 (RMB '000) | | :--- | :--- | :--- | | Net Current Liabilities | 6,406,252 | 7,454,930 | | Non-current Unrestricted Time Deposits | 2,520,100 | 1,690,000 | - The company's directors believe the Group's liquidity risk is effectively monitored, enabling it to continue as a going concern[7](index=7&type=chunk) [Significant Accounting Policies](index=6&type=section&id=%E9%87%8D%E5%A4%A7%E6%9C%83%E8%A8%88%E6%94%BF%E7%AD%96) The condensed consolidated financial statements are prepared under the historical cost convention, with certain financial instruments measured at fair value; revisions to HKFRSs issued by HKICPA were first applied this period but had no significant impact on financial position or performance - The condensed consolidated financial statements are prepared on the historical cost basis, except for certain financial instruments measured at fair value as appropriate[9](index=9&type=chunk) - Revisions to Hong Kong Financial Reporting Standards issued by the HKICPA, effective for the Group's annual period beginning January 1, 2025, were first applied in this interim period[10](index=10&type=chunk) - The application of these revisions had no significant impact on the Group's financial position, performance, and/or disclosures in these condensed consolidated financial statements for the current and prior periods[11](index=11&type=chunk) [Revenue and Other Income](index=7&type=section&id=%E7%87%9F%E6%A5%AD%E9%A1%8D%E5%8F%8A%E5%85%B6%E4%BB%96%E6%94%B6%E7%9B%8A) The Group primarily operates chain hypermarkets, supermarkets, and convenience stores; turnover mainly derives from goods sales, while service income and rental income from leased properties constitute other income, with both goods sales, service, and rental income decreasing year-over-year Revenue and Other Income by Type | Revenue Type | 2025 (RMB '000) | 2024 (RMB '000) | | :--- | :--- | :--- | | Turnover - Sales of Goods | 9,591,172 | 10,896,547 | | Turnover - Service Income (from suppliers) | 440,798 | 657,273 | | Turnover - Franchise Fee Income | 17,761 | 18,829 | | Turnover - Commission Income | 4,644 | 659 | | Other Income - Rental Income from Leased Properties | 176,548 | 225,664 | | Total Turnover and Other Income | 10,230,923 | 11,798,972 | [Segment Information](index=9&type=section&id=%E5%88%86%E9%83%A8%E8%B3%87%E6%96%99) Group segment revenue primarily derived from hypermarkets, supermarkets, and convenience stores; all segments' revenue decreased, but convenience store losses narrowed, with all revenue derived from customers in China Segment Revenue and Results | Segment | 2025 Revenue (RMB '000) | 2024 Revenue (RMB '000) | 2025 Results (RMB '000) | 2024 Results (RMB '000) | | :--- | :--- | :--- | :--- | :--- | | Hypermarket | 4,116,687 | 5,220,509 | 1,830 | 94,228 | | Supermarket | 5,363,098 | 5,756,369 | 9,979 | 29,776 | | Convenience Store | 704,771 | 785,340 | (9,585) | (18,432) | | Other Businesses | 46,367 | 36,754 | 8,251 | 1,277 | | Total | 10,230,923 | 11,798,972 | 10,475 | 106,849 | - All of the Group's revenue and segment results are attributable to customers in China[18](index=18&type=chunk) [Other Income and Expenses](index=10&type=section&id=%E5%85%B6%E4%BB%96%E6%94%B6%E5%85%A5%E5%8F%8A%E9%96%8B%E6%94%AF) Total other income and gains increased significantly by 45.3% year-over-year, primarily due to gains from the disposal of equity in certain subsidiaries, while interest income and liquidated damages decreased, and government subsidies and fair value gains on financial assets increased, with other operating expenses decreasing year-over-year Other Income and Other Gains and Losses | Indicator | 2025 (RMB '000) | 2024 (RMB '000) | | :--- | :--- | :--- | | Total Other Income and Other Gains and Losses | 410,898 | 282,829 | | - Interest Income from Bank Deposits and Time Deposits | 84,730 | 122,218 | | - Government Subsidies | 21,905 | 14,618 | | - Gain on Disposal of 3 Target Companies | 187,126 | – | | - Fair Value Gains on Financial Assets | 34,631 | 14,783 | | - Liquidated Damages Income | 5,879 | 48,841 | | Total Other Operating Expenses | 13,242 | 15,999 | | Total Finance Costs | 88,948 | 106,655 | - Government subsidies of **RMB 21,905,000** (2024: RMB 14,618,000) were received to encourage business development for certain subsidiaries in specific regions of China[22](index=22&type=chunk) [Profit Before Tax and Income Tax](index=12&type=section&id=%E7%A8%85%E5%89%8D%E7%9B%88%E5%88%A9%E8%88%87%E6%89%80%E5%BE%97%E7%A8%85) Group profit before tax significantly increased to RMB 84,066 thousand, primarily driven by gains from subsidiary disposals, while income tax expense decreased by 46.3% year-over-year, mainly due to deferred tax credits Profit Before Tax and Income Tax | Indicator | 2025 (RMB '000) | 2024 (RMB '000) | | :--- | :--- | :--- | | Profit Before Tax | 84,066 | 17,522 | | Income Tax Expense | 24,359 | 45,372 | | Total Amortization and Depreciation | 562,607 | 631,039 | | Staff Costs | 867,039 | 974,992 | - Domestic subsidiaries in China are subject to a **25%** corporate income tax rate, while certain subsidiaries in specific western provinces enjoy a preferential rate of **15%**, and small low-profit enterprises benefit from preferential rates ranging from **5% to 10%**[24](index=24&type=chunk) [Dividends and Earnings Per Share](index=13&type=section&id=%E8%82%A1%E6%81%AF%E8%88%87%E6%AF%8F%E8%82%A1%E6%94%B6%E7%9B%8A) The Board of Directors recommended no interim dividend, and basic earnings per share turned profitable at RMB 0.03 from a loss in the prior year - The Board of Directors recommended no interim dividend payment[25](index=25&type=chunk) Earnings Per Share | Indicator | 2025 (RMB '000) | 2024 (RMB '000) | | :--- | :--- | :--- | | Profit (Loss) Attributable to Equity Holders of the Company for the Period | 42,246 | (54,809) | | Basic Earnings (Loss) Per Share | 3.1 fen | (4.9) fen | | Weighted Average Number of Ordinary Shares | 1,370,208,000 | 1,119,600,000 | [Trade and Bills Receivables](index=14&type=section&id=%E6%87%89%E6%94%B6%E8%B3%A6%E6%AC%BE%E5%8F%8A%E6%87%89%E6%94%B6%E7%A5%A8%E6%93%9A) As of June 30, 2025, net trade and bills receivables were RMB 260,864 thousand, slightly lower than December 31, 2024, with a decrease in credit loss allowance and a significant reduction in total overdue trade receivables Trade and Bills Receivables | Indicator | June 30, 2025 (RMB '000) | December 31, 2024 (RMB '000) | | :--- | :--- | :--- | | Trade Receivables - from customer contracts | 268,833 | 270,006 | | Bills Receivables | – | 1,900 | | Less: Allowance for Credit Losses | (7,969) | (9,013) | | Net Trade and Bills Receivables | 260,864 | 262,893 | - Trade receivables primarily arise from sales to wholesalers, with credit terms ranging from **30 to 60 days**[32](index=32&type=chunk) Aging Analysis of Overdue Trade Receivables | Aging of Overdue Trade Receivables | June 30, 2025 (RMB '000) | December 31, 2024 (RMB '000) | | :--- | :--- | :--- | | 1–30 days overdue | 23 | 1,189 | | Over 30 days overdue | 1,731 | 9,094 | | Total | 1,754 | 10,283 | [Trade and Bills Payables](index=16&type=section&id=%E6%87%89%E4%BB%98%E8%B3%A6%E6%AC%BE%E5%8F%8A%E6%87%89%E4%BB%98%E7%A5%A8%E6%93%9A) As of June 30, 2025, total trade and bills payables were RMB 3,275,941 thousand, a decrease from December 31, 2024, primarily stemming from goods purchases with credit terms of 30 to 60 days Trade and Bills Payables | Indicator | June 30, 2025 (RMB '000) | December 31, 2024 (RMB '000) | | :--- | :--- | :--- | | Trade Payables | 2,200,063 | 2,765,969 | | Bills Payables | 1,075,878 | 1,104,924 | | Total | 3,275,941 | 3,870,893 | - Trade payables primarily arise from purchases of goods with credit terms ranging from **30 to 60 days**[42](index=42&type=chunk) [Management Discussion and Analysis](index=18&type=section&id=%E7%AE%A1%E7%90%86%E5%B1%A4%E8%A8%8E%E8%AB%96%E8%88%87%E5%88%86%E6%9E%90) [Operating Environment](index=18&type=section&id=%E7%B6%93%E7%87%9F%E7%92%B0%E5%A2%83) In H1 2025, global economic uncertainty intensified, but China's economy remained stable with moderate consumption recovery; the Group actively responded by focusing on fresh produce operations, transformation, commodity management, marketing innovation, cost control, digitalization, organizational optimization, and safety - In H1 2025, global economic uncertainty intensified, but China's economy demonstrated strong resilience and sustainability in its growth, maintaining stable national economic operations[46](index=46&type=chunk) Key Economic Indicators (H1 2025) | Indicator | H1 2025 | | :--- | :--- | | National Consumer Price Index (CPI) | Decreased slightly by 0.1% year-over-year | | Total Retail Sales of Consumer Goods | RMB 24.5 trillion, increased by 5.0% year-over-year | | Retail Sales of Essential Goods (e.g., grain, oil, food) | Increased by 9.1% year-over-year | - The consumption structure is undergoing profound changes, characterized by a balance of rationality and experience, with consumers increasingly focusing on the actual value and utility of goods, making "quality-price ratio" a core consideration[47](index=47&type=chunk) - Short video platforms like Douyin and Video Accounts have become crucial channels for product promotion, increasingly shaping and influencing consumer preferences[47](index=47&type=chunk) - The Group focused on key areas including fresh produce operations, transformation and empowerment, commodity management, marketing innovation, cost control, digital development, organizational optimization, and safety and quality[48](index=48&type=chunk) [Financial Review](index=19&type=section&id=%E8%B2%A1%E5%8B%99%E5%9B%9E%E9%A1%A7) Group turnover decreased by 12.0% year-over-year due to evolving consumer demand, intensified competition, and strategic adjustments; gross profit margin improved, but other income declined; significant growth in other income and gains resulted from subsidiary disposals, while distribution and selling costs, administrative expenses, and income tax expenses decreased, leading to a turnaround to profit attributable to shareholders - Turnover decreased by approximately **RMB 1.305 billion**, a **12.0%** year-over-year decline, primarily due to evolving consumer demand and intensified industry competition, alongside the Group's strategic adjustments including the disposal of equity in certain subsidiaries and reduction of unprofitable sales scale[49](index=49&type=chunk) - Gross profit margin was approximately **11.89%**, an increase of approximately **0.40 percentage points** year-over-year, mainly due to the Group's optimized commodity management, promotion of standardized fresh produce, reduction of losses, and enhancement of fresh produce gross profit, as well as developing distinctive products, focusing on key categories, and increasing the proportion of private label products to improve commodity profitability[50](index=50&type=chunk) - Other income and other gains amounted to approximately **RMB 411 million**, an increase of approximately **RMB 128 million** year-over-year, representing a **45.3%** growth, primarily due to the Group's overall strategic adjustments and gains from the disposal of equity in certain subsidiaries[52](index=52&type=chunk) - Distribution and selling costs were approximately **RMB 1.697 billion**, a decrease of approximately **RMB 277 million** year-over-year, representing a **14.0%** reduction, mainly due to the Group's adjustment of unprofitable store network scale, continued strengthening of operating expense control, and optimization of resource allocation[53](index=53&type=chunk) - Profit attributable to equity holders of the Company was **RMB 42 million**, an increase of approximately **RMB 97 million** year-over-year; net profit margin was approximately **0.44%**, an increase of **0.94 percentage points** year-over-year[59](index=59&type=chunk) [Turnover](index=19&type=section&id=%E7%87%9F%E6%A5%AD%E9%A1%8D) Turnover decreased by 12.0% year-over-year to RMB 9.591 billion, primarily due to evolving consumer demand, intensified industry competition, and strategic adjustments including subsidiary disposals and reduction of unprofitable sales scale - During the reporting period, the Group's turnover was approximately **RMB 9.591 billion**, a year-over-year decrease of approximately **RMB 1.305 billion**, or **12.0%**[49](index=49&type=chunk) - This was primarily due to the continuous impact of evolving consumer demand and intensified industry competition, alongside the Group's overall strategic adjustments, including the disposal of equity in certain subsidiaries and reduction of unprofitable sales scale, leading to a decrease in overall sales volume[49](index=49&type=chunk) [Gross Profit](index=20&type=section&id=%E6%AF%9B%E5%88%A9%E9%A1%8D) Gross profit decreased by 8.9% year-over-year to RMB 1.140 billion, but gross profit margin increased by 0.40 percentage points to 11.89%, driven by optimized commodity management, standardized fresh produce, and increased private label product proportion - During the reporting period, the Group's gross profit was approximately **RMB 1.140 billion**, a year-over-year decrease of approximately **RMB 112 million**, or **8.9%**[50](index=50&type=chunk) - The Group's overall gross profit margin was approximately **11.89%**, an increase of approximately **0.40 percentage points** from **11.49%** in the prior year[50](index=50&type=chunk) - This was primarily due to the Group's optimized commodity management, promoting standardized fresh produce to reduce losses and enhance fresh produce gross profit, and developing distinctive products, focusing on key categories, and increasing the proportion of private label products to improve commodity profitability[50](index=50&type=chunk) [Other Income](index=20&type=section&id=%E5%85%B6%E4%BB%96%E6%94%B6%E7%9B%8A) Other income decreased by 29.1% year-over-year to RMB 640 million, mainly due to reduced supplier-related income from smaller sales scale and lower rental income from leased properties due to hypermarket strategic adjustments - During the reporting period, the Group's other income was approximately **RMB 640 million**, a year-over-year decrease of approximately **RMB 263 million**, or **29.1%**[51](index=51&type=chunk) - Due to the reduction in sales scale, income from suppliers decreased by approximately **RMB 216 million** year-over-year[51](index=51&type=chunk) - The hypermarket format implemented a "smaller, community-focused" strategic adjustment, leading to a year-over-year decrease of approximately **RMB 49 million** in the Group's rental income from leased properties[51](index=51&type=chunk) [Other Income and Other Gains and Losses](index=20&type=section&id=%E5%85%B6%E4%BB%96%E6%94%B6%E5%85%A5%E5%8F%8A%E5%85%B6%E4%BB%96%E5%88%A9%E5%BE%97%E5%8F%8A%E6%90%8D%E5%A4%B1) Other income and other gains increased significantly by 45.3% year-over-year to RMB 411 million, primarily due to gains from the disposal of equity in certain subsidiaries as part of the Group's overall strategic adjustments - During the reporting period, the Group's other income and other gains amounted to approximately **RMB 411 million**, a year-over-year increase of approximately **RMB 128 million**, representing a **45.3%** growth[52](index=52&type=chunk) - This was primarily due to the Group's overall strategic adjustments and gains from the disposal of equity in certain subsidiaries[52](index=52&type=chunk) [Distribution and Selling Costs](index=21&type=section&id=%E5%88%86%E9%8A%B7%E5%8F%8A%E9%8A%B7%E5%94%AE%E6%88%90%E6%9C%AC) Distribution and selling costs decreased by 14.0% year-over-year to RMB 1.697 billion, mainly due to the Group's adjustment of unprofitable store network scale and strengthened control over operating expenses - During the reporting period, the Group's distribution and selling costs were approximately **RMB 1.697 billion**, a year-over-year decrease of approximately **RMB 277 million**, or **14.0%**[53](index=53&type=chunk) - This was primarily due to the Group's adjustment of unprofitable store network scale, continued strengthening of operating expense control, and optimization of resource allocation[53](index=53&type=chunk) [Administrative Expenses](index=21&type=section&id=%E8%A1%8C%E6%94%BF%E9%96%8B%E6%94%AF) Administrative expenses decreased by 3.9% year-over-year to RMB 311 million - During the reporting period, the Group's administrative expenses were approximately **RMB 311 million**, a year-over-year decrease of approximately **RMB 13 million**, or **3.9%**[54](index=54&type=chunk) [Other Operating Expenses](index=21&type=section&id=%E5%85%B6%E4%BB%96%E7%B6%93%E7%87%9F%E9%96%8B%E6%94%AF) Other operating expenses decreased by approximately RMB 3 million year-over-year to RMB 13 million - During the reporting period, the Group's other operating expenses were approximately **RMB 13 million**, a year-over-year decrease of approximately **RMB 3 million**[55](index=55&type=chunk) [Share of Results of Associates](index=21&type=section&id=%E6%87%89%E4%BD%94%E8%81%AF%E7%87%9F%E5%85%AC%E5%8F%B8%E6%A5%AD%E7%B8%BE) The Group's share of results of associates was approximately RMB 3 million, remaining largely stable year-over-year - During the reporting period, the Group's share of results of associates was approximately **RMB 3 million**, remaining largely stable year-over-year[56](index=56&type=chunk) [Profit Before Tax](index=21&type=section&id=%E7%A8%85%E5%89%8D%E7%9B%88%E5%88%A9) Group profit before tax significantly increased to RMB 84 million, representing a year-over-year increase in profit of approximately RMB 67 million - During the reporting period, the Group's profit before tax was approximately **RMB 84 million**, representing a year-over-year increase in profit of approximately **RMB 67 million**[57](index=57&type=chunk) [Income Tax Expense](index=21&type=section&id=%E6%89%80%E5%BE%97%E7%A8%85%E8%B2%BB%E7%94%A8) Income tax expense decreased by approximately RMB 21 million year-over-year to RMB 24 million - During the reporting period, the Group's income tax expense was approximately **RMB 24 million**, a year-over-year decrease of approximately **RMB 21 million**[58](index=58&type=chunk) [Profit Attributable to Equity Holders of the Company](index=22&type=section&id=%E6%AD%B8%E5%B1%AC%E6%96%BC%E6%9C%AC%E5%85%AC%E5%8F%B8%E8%82%A1%E6%9D%B1%E7%9A%84%E7%9B%88%E5%88%A9) Profit attributable to equity holders of the Company was RMB 42 million, representing a year-over-year increase in profit of approximately RMB 97 million, with net profit margin rising by 0.94 percentage points to 0.44% - During the reporting period, profit attributable to equity holders of the Company was **RMB 42 million**, representing a year-over-year increase in profit of approximately **RMB 97 million**[59](index=59&type=chunk) - During the reporting period, the net profit margin was approximately **0.44%**, an increase of **0.94 percentage points** year-over-year[59](index=59&type=chunk) - Basic earnings per share were approximately **RMB 0.03**[59](index=59&type=chunk) [Liquidity and Financial Resources](index=22&type=section&id=%E6%B5%81%E5%8B%95%E6%80%A7%E5%8F%8A%E8%B2%A1%E5%8B%99%E8%B3%87%E6%BA%90) As of June 30, 2025, the Group held approximately RMB 6.148 billion in cash and bank balances with no bank borrowings; trade payables turnover was about 57 days, inventory turnover about 40 days, and the capital gearing ratio was 0.0% - As of June 30, 2025, the Group's cash and bank balances amounted to approximately **RMB 6.148 billion**[60](index=60&type=chunk) - For the six months ended June 30, 2025, the Group's trade payables turnover period was approximately **57 days**, and inventory turnover period was approximately **40 days**[60](index=60&type=chunk) - The Group did not use any financial instruments for hedging risks and had no outstanding hedging financial instruments as of June 30, 2025[60](index=60&type=chunk) - As of June 30, 2025, the Group's capital gearing ratio was **0.0%** (December 31, 2024: 0.0%)[61](index=61&type=chunk) [Retail Business Growth](index=22&type=section&id=%E9%9B%B6%E5%94%AE%E6%A5%AD%E5%8B%99%E5%A2%9E%E9%95%B7%E6%83%85%E6%B3%81) All three retail formats (hypermarkets, supermarkets, convenience stores) experienced turnover declines due to strategic adjustments and market competition; hypermarket and supermarket operating profits decreased, while convenience store losses narrowed, with all formats undergoing transformation to adapt to market changes - Hypermarket format turnover decreased by approximately **18.6%** year-over-year, supermarket format turnover decreased by approximately **6.6%** year-over-year, and convenience store format turnover decreased by approximately **9.9%** year-over-year[62](index=62&type=chunk)[65](index=65&type=chunk)[67](index=67&type=chunk) - The decline in turnover was primarily due to the Group's overall strategic adjustments, including the disposal of equity in certain subsidiaries and reduction of unprofitable sales scale, leading to a year-over-year decrease in turnover[63](index=63&type=chunk) - Hypermarket format gross profit margin increased by approximately **1.32 percentage points** year-over-year to approximately **13.98%**, convenience store format gross profit margin increased by approximately **0.34 percentage points** to approximately **11.00%**, while supermarket format gross profit margin decreased by approximately **0.11 percentage points** year-over-year to approximately **10.31%**[63](index=63&type=chunk)[65](index=65&type=chunk)[67](index=67&type=chunk) [Hypermarket](index=22&type=section&id=%E5%A4%A7%E5%9E%8B%E7%B6%9C%E5%90%88%E8%B6%85%E5%B8%82) Hypermarket turnover decreased by 18.6% to RMB 3.844 billion, accounting for 40.1% of Group turnover; gross profit margin increased to 13.98%, but operating profit significantly decreased to RMB 2 million, with operating profit margin falling to 0.05%, mainly due to strategic adjustments and subsidiary disposals - During the reporting period, hypermarket format turnover was approximately **RMB 3.844 billion**, a year-over-year decrease of approximately **RMB 881 million**, or **18.6%**, accounting for approximately **40.1%** of the Group's turnover[62](index=62&type=chunk) Hypermarket Performance Metrics | As of June 30 | 2025 | 2024 | | :--- | :--- | :--- | | Gross Profit Margin (%) | 13.98 | 12.66 | | Comprehensive Income Margin (%) | 24.52 | 27.03 | | Operating Profit Margin (%) | 0.05 | 1.99 | - The hypermarket format recorded an operating profit of approximately **RMB 2 million**, a year-over-year decrease in profit of approximately **RMB 92 million**[63](index=63&type=chunk) - The hypermarket format implemented a "smaller, community-focused" strategic adjustment, optimizing product structure, reducing operating area, and scientifically planning functional zones[63](index=63&type=chunk) [Supermarket](index=24&type=section&id=%E8%B6%85%E7%B4%9A%E5%B8%82%E5%A0%B4) Supermarket turnover decreased by 6.6% to RMB 5.017 billion, accounting for 52.3% of Group turnover; gross profit margin slightly decreased to 10.31%, operating profit fell to RMB 10 million, with operating profit margin declining to 0.20%, as the format focuses on community needs to become a "community living service center" - During the reporting period, supermarket format turnover was approximately **RMB 5.017 billion**, a year-over-year decrease of approximately **RMB 355 million**, or **6.6%**, accounting for approximately **52.3%** of the Group's turnover[65](index=65&type=chunk) Supermarket Performance Metrics | As of June 30 | 2025 | 2024 | | :--- | :--- | :--- | | Gross Profit Margin (%) | 10.31 | 10.42 | | Comprehensive Income Margin (%) | 18.57 | 19.11 | | Operating Profit Margin (%) | 0.20 | 0.55 | - The supermarket format recorded an operating profit of approximately **RMB 10 million**, a year-over-year decrease of approximately **RMB 20 million**[65](index=65&type=chunk) - The supermarket format focuses on precisely targeting community needs, upgrading stores into "community living service centers"[65](index=65&type=chunk) [Convenience Store](index=25&type=section&id=%E4%BE%BF%E5%88%A9%E5%BA%97) Convenience store turnover decreased by 9.9% to RMB 689 million, accounting for 7.2% of Group turnover; gross profit margin increased to 11.00%, and operating loss narrowed to RMB 10 million, with operating profit margin rising to -1.39%, mainly due to the proactive closure of long-term unprofitable stores - During the reporting period, convenience store format turnover was approximately **RMB 689 million**, a year-over-year decrease of approximately **RMB 76 million**, or **9.9%**, accounting for approximately **7.2%** of the Group's turnover[67](index=67&type=chunk) Convenience Store Performance Metrics | As of June 30 | 2025 | 2024 | | :--- | :--- | :--- | | Gross Profit Margin (%) | 11.00 | 10.66 | | Comprehensive Income Margin (%) | 13.60 | 13.71 | | Operating Profit Margin (%) | -1.39 | -2.41 | - The convenience store format recorded an operating loss of approximately **RMB 10 million**, a year-over-year reduction in loss of approximately **RMB 8 million**[67](index=67&type=chunk) - Based on its overall strategic planning, the Group proactively closed some long-term unprofitable stores, leading to a year-over-year decrease in turnover[67](index=67&type=chunk) [Capital Structure and Risks](index=26&type=section&id=%E8%B3%87%E6%9C%AC%E6%9E%B6%E6%A7%8B%E8%88%87%E9%A2%A8%E9%9A%AA) As of June 30, 2025, the Group held cash and cash equivalents primarily in RMB with no bank borrowings; equity attributable to equity holders turned positive due to capital increase and profit; the Group had no pledged assets or significant contingent liabilities and did not hedge foreign exchange risk, but directors believe it can meet foreign exchange needs - As of June 30, 2025, the Group's cash and cash equivalents were primarily held in RMB, with no other bank borrowings[71](index=71&type=chunk) - The Company's equity attributable to equity holders increased from approximately **RMB -287 million** to approximately **RMB 112 million**, primarily due to a capital increase of **RMB 360 million** and profit attributable to equity holders of approximately **RMB 42 million** during the period[71](index=71&type=chunk) - As of June 30, 2025, the Group had no pledged assets[72](index=72&type=chunk) - Most of the Group's income and expenditure items are denominated in RMB; during the reporting period, the Group did not encounter any significant difficulties due to exchange rate fluctuations, nor were its operations or liquidity affected, and the Group did not enter into any agreements or purchase financial instruments to hedge its exchange rate risk[73](index=73&type=chunk) - As of June 30, 2025, the Group had no significant contingent liabilities[76](index=76&type=chunk) [Capital Structure](index=26&type=section&id=%E8%B3%87%E6%9C%AC%E6%9E%B6%E6%A7%8B) As of June 30, 2025, the Group's cash and cash equivalents were primarily held in RMB with no bank borrowings; equity attributable to equity holders turned positive, mainly due to a capital increase of RMB 360 million and profit attributable to equity holders of RMB 42 million during the period - As of June 30, 2025, the Group's cash and cash equivalents were primarily held in RMB, with no other bank borrowings[71](index=71&type=chunk) - The Company's equity attributable to equity holders increased from approximately **RMB -287 million** to approximately **RMB 112 million**, primarily due to a capital increase of **RMB 360 million** and profit attributable to equity holders of approximately **RMB 42 million** during the period[71](index=71&type=chunk) [Pledged Assets](index=26&type=section&id=%E5%B7%B2%E8%B3%AA%E6%8A%BC%E8%B3%87%E7%94%A2) As of June 30, 2025, the Group had no pledged assets - As of June 30, 2025, the Group had no pledged assets[72](index=72&type=chunk) [Foreign Exchange Risk](index=27&type=section&id=%E5%A4%96%E5%8C%AF%E9%A2%A8%E9%9A%AA) Most of the Group's income and expenditure items are denominated in RMB; during the reporting period, the Group did not encounter any significant difficulties due to exchange rate fluctuations, nor were its operations or liquidity affected, and the Group did not enter into any agreements or purchase financial instruments to hedge its exchange rate risk, but directors believe it can meet foreign exchange needs - Most of the Group's income and expenditure items are denominated in RMB[73](index=73&type=chunk) - During the reporting period, the Group did not encounter any significant difficulties due to exchange rate fluctuations, nor were its operations or liquidity affected[73](index=73&type=chunk) - The Group did not enter into any agreements or purchase financial instruments to hedge its exchange rate risk, and the Company's directors believe the Group can meet its foreign exchange needs[73](index=73&type=chunk) [Share Capital](index=27&type=section&id=%E8%82%A1%E6%9C%AC) As of June 30, 2025, the company had 1,479,600,000 issued shares, with domestic shares accounting for 72.68%, and capital increased during the period through the allotment and issuance of 360,000,000 domestic shares to Bailian Group via a subscription Issued Share Capital by Type | Class of Issued Shares | Number of Shares | Percentage (%) | | :--- | :--- | :--- | | Domestic Shares | 1,075,397,400 | 72.68 | | Unlisted Foreign Shares | 31,602,600 | 2.14 | | H Shares | 372,600,000 | 25.18 | | Total | 1,479,600,000 | 100.00 | - The Company duly allotted and issued **360,000,000** domestic shares ("Subscription Shares") to Bailian Group at a subscription price of **RMB 1.00** per share[74](index=74&type=chunk) [Contingent Liabilities](index=28&type=section&id=%E6%88%96%E6%9C%89%E8%B2%A0%E5%82%B5) As of June 30, 2025, the Group had no significant contingent liabilities - As of June 30, 2025, the Group had no significant contingent liabilities[76](index=76&type=chunk) [Operating Strategies and Implementation](index=28&type=section&id=%E7%B6%93%E7%87%9F%E7%AD%96%E7%95%A5%E8%88%87%E5%AF%A6%E6%96%BD) The Group focused on the Yangtze River Delta region, driving transformation and empowerment across key formats through multi-dimensional adjustments, steadily expanding its network with 95 new stores (66 in the Yangtze River Delta) while closing 121 stores to enhance network quality, and implementing comprehensive measures including commodity and supply chain management, marketing innovation, digitalization, organizational optimization, talent development, and cost control to boost core competitiveness - The Group focused on the core Yangtze River Delta region, driving transformation and empowerment of its main business formats through multi-dimensional adjustments to achieve business optimization and upgrading[77](index=77&type=chunk) - During the reporting period, the Group steadily advanced its network expansion, opening a total of **95** new stores, including **26** directly operated stores and **69** franchised stores, with **66** new stores in the Yangtze River Delta region, accounting for **69.5%**[77](index=77&type=chunk) - On the other hand, to adapt to market changes and enhance overall network quality, the Group systematically reviewed its stores, closing a total of **121** stores, including **21** directly operated stores and **100** franchised stores[77](index=77&type=chunk) - The Group focused on acquiring fresh produce customers, implementing multi-dimensional precise strategies, continuously strengthening direct sourcing at the origin in supply chain management, and establishing multi-origin backup mechanisms[81](index=81&type=chunk) - The Group comprehensively advanced its store digitalization transformation, significantly improving store operational efficiency, reducing costs, and enhancing human efficiency by achieving precise task assignment, standardized operations, mobile functionality, and visible tracking[84](index=84&type=chunk) [Driving Transformation and Empowerment](index=28&type=section&id=%E6%8E%A8%E5%8B%95%E8%BD%89%E5%9E%8B%E5%A2%9E%E8%83%BD) The Group drove transformation and empowerment across key formats through multi-dimensional adjustments, with hypermarkets shifting to "smaller, community-focused" models, supermarkets adopting refined operations, and convenience stores maintaining stable growth; 95 new stores were opened and 121 were closed to optimize network quality - The hypermarket format continued its transformation towards a "smaller, community-focused" direction, the supermarket format adopted a more refined operating model, the convenience store format maintained stable scale development, and franchise business moved towards a centralized direction[77](index=77&type=chunk) - The Group steadily advanced its network expansion, opening a total of **95** new stores, including **26** directly operated stores and **69** franchised stores, with **66** new stores in the Yangtze River Delta region, accounting for **69.5%**[77](index=77&type=chunk) - The Group systematically reviewed its stores, closing a total of **121** stores, including **21** directly operated stores and **100** franchised stores[77](index=77&type=chunk) - The hypermarket format underwent systematic innovation around store development and transformation strategies, accelerating the upgrade of traditional hypermarkets into "quality living hubs"[78](index=78&type=chunk) - The supermarket format focuses on precisely targeting community needs, upgrading stores into "community living service centers" to meet residents' "one-stop" daily needs[79](index=79&type=chunk) - In the Zhejiang region, the Group actively incubated discount formats and expanded into new business segments, currently operating **13** outlets[79](index=79&type=chunk) Store Network by Format and Operation Type | Format | Directly Operated | Franchised | Total | | :--- | :--- | :--- | :--- | | Hypermarket | 98 | – | 98 | | Supermarket | 840 | 1,425 | 2,265 | | Convenience Store | 288 | 440 | 728 | | Total | 1,226 | 1,865 | 3,091 | [Commodity and Supply Chain Management](index=30&type=section&id=%E5%95%86%E5%93%81%E8%88%87%E4%BE%9B%E6%87%89%E9%8F%88%E7%AE%A1%E7%90%86) The Group focused on fresh produce customer acquisition, strengthening direct sourcing and regional resource integration, promoting standardized fresh produce, developing distinctive products, and increasing private label proportion; it also enhanced fresh produce quality and supply stability by integrating procurement and processing centers and building a fresh produce distribution system, while deepening JBP cooperation with suppliers - The Group focused on acquiring fresh produce customers, implementing multi-dimensional precise strategies, continuously strengthening direct sourcing at the origin in supply chain management, and establishing multi-origin backup mechanisms to mitigate supply risks and ensure stable supply of fresh produce[81](index=81&type=chunk) - In commodity management, the Group focused on optimizing strategies, on one hand promoting a standardized fresh produce model, and on the other hand focusing on key categories to develop distinctive products and increase the proportion of private label products[81](index=81&type=chunk)[82](index=82&type=chunk) - The Group deepened its Joint Business Planning (JBP) cooperation model, expanding the scale and level of collaboration with suppliers, and strengthening strategic partnerships with leading brand suppliers[82](index=82&type=chunk) - In the supply chain, the Group continuously increased the proportion of direct sourcing and direct supply, advanced the standardization of commodities, and ensured product quality and supply stability[82](index=82&type=chunk) [Marketing Innovation](index=32&type=section&id=%E7%87%9F%E9%8A%B7%E5%89%B5%E6%96%B0) The Group enhanced brand visibility and engaged consumers through popular themed marketing campaigns like "CNY," "Spring Outing Season," "34th Anniversary," and "National Brands V. Trend," leveraging new media such as Video Account IPs to foster fan economy potential - The supermarket format meticulously planned marketing activities around popular themes, focusing on three S-tier seasonal campaigns: "CNY," "Spring Outing Season," and "34th Anniversary"[83](index=83&type=chunk) - The hypermarket format successfully ignited consumer enthusiasm for national brands with the "National Brands V. Trend" campaign as a key initiative[83](index=83&type=chunk) - The Group fully leveraged new media to enhance brand visibility, creating unique Video Account IPs by utilizing the locational advantages of popular stores, effectively unleashing the immense potential of the fan economy[83](index=83&type=chunk) [Digital Transformation](index=33&type=section&id=%E6%95%B8%E5%AD%97%E5%8C%96%E8%BD%89%E5%9E%8B) The Group comprehensively advanced store digitalization, significantly improving operational efficiency, reducing costs, and enhancing human efficiency by achieving precise task assignment, standardized operations, mobile functionality, and visible tracking, with a focus on four key digital initiatives: refined management, integrated business and finance, precise marketing, and data-driven operations - The Group comprehensively advanced its store digitalization transformation, significantly improving store operational efficiency, reducing costs, and enhancing human efficiency by achieving precise task assignment, standardized operations, mobile functionality, and visible tracking[84](index=84&type=chunk) - Key efforts focused on the coordinated implementation of four major digital initiatives: enhancing refined store management, upgrading the EAM system to achieve integrated business and finance, leveraging AI technology and digital hardware for precise marketing, and reconstructing data billboards for data-driven operations[84](index=84&type=chunk) [Organizational Optimization and Talent Development](index=34&type=section&id=%E7%B5%84%E7%B9%94%E5%84%AA%E5%8C%96%E8%88%87%E4%BA%BA%E6%89%8D%E7%99%BC%E5%B1%95) The Group accelerated organizational reform, establishing Shanghai City Center and Supermarket Operations Center for hypermarket format, deepening headquarters' organizational reform, optimizing management efficiency, strengthening staffing management, advancing assessment system optimization, and piloting integrated operations and procurement performance, while increasing investment in talent acquisition and development - The establishment of the Shanghai City Center and Supermarket Operations Center for the hypermarket format was completed, clarifying functional settings, organizational structure, and staffing and personnel allocation[85](index=85&type=chunk) - The Group deepened headquarters' organizational reform by systematically reviewing functions and clearly defining the positioning of the headquarters and its member enterprises in terms of organizational structure, departmental setup, and core functional distribution[85](index=85&type=chunk) - At the company headquarters level, efforts focused on improving management efficiency ratios; at the frontline store level, staffing management was strengthened, personnel optimization paths were refined step-by-step, and key positions were filled[86](index=86&type=chunk) - The Group advanced the optimization of its assessment system, re-evaluating business team assessment methods and improving the operations and procurement indicator system; a pilot program for integrated operations and procurement performance was implemented in the Shanghai region for the supermarket format[86](index=86&type=chunk) - The Group increased investment in talent acquisition and development, strengthening the foundation of talent pipeline construction and focusing on the selection and cultivation of reserve talent[87](index=87&type=chunk) [Strengthening Management and Cost Reduction](index=35&type=section&id=%E5%BC%B7%E5%8C%96%E7%AE%A1%E7%90%86%E9%99%8D%E6%9C%AC) The Group achieved cost reduction and efficiency improvement through various measures, including rent reduction, operating expense control, and labor cost optimization, by refining rent calculation models, implementing multi-position integration and smart scheduling, establishing daily store loss monitoring, optimizing energy consumption, and managing marketing resource allocation based on ROI - Regarding rent reduction, the Group improved its rent calculation model, formulated a red-line store rent renegotiation list, and promoted rent renegotiations for high-cost stores[88](index=88&type=chunk) - In operating cost reduction and energy consumption control, the Group optimized personnel allocation, implemented multi-position integration and smart scheduling to enhance human efficiency; it also established a daily store loss monitoring mechanism and implemented refined loss control for high-loss categories[88](index=88&type=chunk) - In marketing and promotion resource allocation management, all marketing and promotion activities and member engagements were clearly aimed at "increasing customer traffic and repurchase rates," with ROI as the assessment benchmark[88](index=88&type=chunk) [Strategies and Plans](index=36&type=section&id=%E7%AD%96%E7%95%A5%E8%88%87%E8%A8%88%E5%8A%83) For H2 2025, China's economy is expected to remain resilient with further consumption potential; the Group will focus on reform and transformation, enhancing core capabilities, deepening restructuring, and embracing agile development, while optimizing supermarket and hypermarket formats, accelerating innovative commodity and supply chain systems, and systematically deploying eight core tasks to achieve high-quality brand development - In H2 2025, China's economy is expected to maintain overall development resilience, relying on a stable development foundation and a continuously expanding domestic demand market[89](index=89&type=chunk) - The Group will closely adhere to the core requirements of its reform and transformation strategy, focusing on enhancing core capabilities and further deepening reform and restructuring; it will uphold a self-driven and agile development philosophy, fully unleashing employees' creativity and potential[89](index=89&type=chunk) - The Group will continue to deeply cultivate the optimization and upgrading of its supermarket and hypermarket formats, accelerate the construction of innovative commodity and supply chain systems, and precisely capture consumption trends[89](index=89&type=chunk) - The Group will continue to focus on the core objective of stable growth, systematically deploying eight core tasks: "supermarket development and refined operations, hypermarket transformation and upgrading, commodity and supply chain development, Quick-Mart expansion and innovative franchise business, cross-sector collaboration and efficiency enhancement, digital development and empowerment, special cost-saving initiatives, and organizational efficiency improvement and personnel optimization"[90](index=90&type=chunk) - The Group will focus on supply chain upgrading, operational efficiency improvement, marketing empowerment and innovation, and integrated online-offline development, converging multi-dimensional efforts to drive sales growth[92](index=92&type=chunk) [Other Information](index=37&type=section&id=%E5%85%B6%E4%BB%96%E4%BF%A1%E6%81%AF) [Events After the Reporting Period](index=37&type=section&id=%E6%9C%9F%E5%BE%8C%E4%BA%8B%E9%A0%85) From July 1, 2025, to the date of this interim results announcement, there were no significant events after the reporting period that materially affected the Company's results - From July 1, 2025, to the date of this interim results announcement, there were no significant events after the reporting period that materially affected the Company's results[93](index=93&type=chunk) [Interim Dividend](index=37&type=section&id=%E4%B8%AD%E6%9C%9F%E8%82%A1%E6%81%AF) The Board of Directors recommended no interim dividend payment for the six months ended June 30, 2025 - The Board of Directors recommended no interim dividend payment for the six months ended June 30, 2025[94](index=94&type=chunk) [Purchase, Sale or Redemption of Shares](index=37&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20Shares) For the six months ended June 30, 2025, neither the Company nor its subsidiaries purchased, sold, or redeemed any of the Company's listed securities, nor did the Company hold any treasury shares - For the six months ended June 30, 2025, neither the Company nor its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[95](index=95&type=chunk) - As of June 30, 2025, the Company held no treasury shares[95](index=95&type=chunk) [Audit Committee](index=37&type=section&id=%E5%AF%A9%E6%A0%B8%E5%A7%94%E5%93%A1%E6%9C%83) The Audit Committee reviewed the Group's unaudited condensed interim financial statements for the six months ended June 30, 2025, discussed accounting principles, internal controls, and financial reporting with management, and had no disagreements on the adopted accounting principles and methods - The Company's Audit Committee considered and reviewed the accounting principles and methods adopted by the Group with management, discussed matters related to internal controls and financial reporting, and reviewed the Group's unaudited condensed interim financial statements for the six months ended June 30, 2025[96](index=96&type=chunk) - The Audit Committee had no disagreements on the accounting principles and methods adopted by the Group[96](index=96&type=chunk) [Compliance with Listing Rules](index=38&type=section&id=%E9%81%B5%E5%AE%88%E4%B8%8A%E5%B8%82%E8%A6%8F%E5%89%87) All directors, supervisors, and relevant employees fully complied with the Model Code for Securities Transactions by Directors of Listed Issuers, but there were deviations from the Corporate Governance Code regarding the absence of a clear rotation mechanism for directors and non-attendance of some non-executive and independent non-executive directors at board and AGM meetings - All directors, supervisors, and relevant employees fully complied with the provisions of the Model Code for Securities Transactions by Directors of Listed Issuers during the reporting period[97](index=97&type=chunk) - Deviation from Corporate Governance Code provision B.2.2: The Articles of Association currently do not explicitly stipulate a mechanism for directors' rotation by retirement[98](index=98&type=chunk) - Deviation from Corporate Governance Code provision C.1.6: Some non-executive directors and independent non-executive directors did not attend Board meetings and the Annual General Meeting due to other work commitments, but all appointed other directors to attend and exercise voting rights on their behalf[99](index=99&type=chunk) [Board of Directors](index=40&type=section&id=%E8%91%A3%E4%BA%8B%E6%9C%83%E6%88%90%E5%93%A1) This announcement lists the members of the Company's Board of Directors as of the announcement date, including executive directors, non-executive directors, and independent non-executive directors - Executive Directors: Wang Xiaoyan, Zhang Huiqin, and Zhu Dingping[103](index=103&type=chunk) - Non-executive Directors: Pu Shaohua, Shen Chen, Cao Hailun, and Yang Qin[103](index=103&type=chunk) - Independent Non-executive Directors: Xia Dawei, Li Guoming, Chen Wei, and Zhao Xinsheng[103](index=103&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 所 產 生 或 因 依 賴 該 等 內 容 而 引 致 的 任 何 損 失 承 擔 任 何 責 任。 本 公 司 董 事 會（「董 事 會」）欣 然 呈 報 本 公 司 及 其 附 屬 公 司（統 稱「本 集 團」）截 至 二 零 二 五 年 六 月 三 十 日 止 六 個 月 的 未 經 審 核 簡 明 綜 合 業 績，連 同 二 零 二 四 年 同 期 的 未 經 審 核 比 較 數 字 如 下： MILLENNIUM PACIFIC GROUP HOLDINGS LIMITED 未 經 審 核 簡 明 綜 合 損 益 及 其 他 全 面 收 益 表 匯思太平洋集團控股有限公司 （於開曼群島註冊成立之有限公司） （股份代號：8147） 截 至 二 零 二 五 年 六 月 三 十 日 止 六 個 月 之 中 期 業 績 ...

2025年度中期業績公告 摘 要 – 1 – 香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不負 責，對其準確性或完整性亦不發表任何聲明，並明確表示，概不對因本公告全部 或任何部份內容而產生或因倚賴該等內容而引致的任何損失承擔任何責任。 SOHO CHINA LIMITED SOHO中國有限公司 （於開曼群島註冊成立的有限公司） （股份代號：410） | | | | | | | | | 未經審計 | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | 截 | | | | | | 至6月30日 止6個 | 月 | | | | | | | | | | 2025年 | 2024年 | | | | 附 註 | | 人民幣千元 | | | | 人民幣千元 | | | 營業收入 | | 2 | | | | | | 689,825 | 799,362 | | 營業成本 | | | | | | | | (141,069) | (150,944) | | 毛 利 | | | | | | | | 548,756 | 648, ...

[Financial Highlights](index=1&type=section&id=Financial%20Highlights) During the reporting period, the company's revenue decreased by 7.0% year-on-year, but gross profit increased by 7.6%, and total comprehensive income for the period significantly grew by 141.6%. Both stainless steel and carbon steel sales volumes achieved slight growth, while stainless steel processing volume slightly decreased, and carbon steel processing volume significantly increased Key Financial Data for H1 2025 | Metric | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | Change | | :--- | :--- | :--- | :--- | | Revenue | 21,198,384 | 22,800,874 | -7.0% | | Gross Profit | 553,697 | 514,473 | +7.6% | | Total Comprehensive Income for the Period | 22,767 | 9,424 | +141.6% | Operational Summary for H1 2025 | Business | Metric | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | :--- | | Stainless Steel | Sales Volume (tons) | 995,500 | 965,145 | +3.1% | | | Processing Volume (tons) | 1,521,769 | 1,524,910 | -0.2% | | Carbon Steel | Sales Volume (tons) | 2,390,742 | 2,382,729 | +0.4% | | | Processing Volume (tons) | 2,444,372 | 2,292,416 | +6.6% | [Unaudited Condensed Consolidated Financial Statements](index=2&type=section&id=Interim%20Results) This section presents the unaudited condensed consolidated financial statements for the six months ended June 30, 2025, including the consolidated statement of comprehensive income, statement of financial position, statement of changes in equity, and statement of cash flows, providing investors with an overview of the Group's financial performance and position [Unaudited Condensed Consolidated Statement of Comprehensive Income](index=2&type=section&id=Unaudited%20Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) For the six months ended June 30, 2025, the Group's revenue decreased by 7.0% year-on-year, while gross profit increased by 7.6%. Both operating profit and profit before income tax achieved significant growth, with profit and total comprehensive income for the period surging by 141.6%, and basic earnings per share increasing to 0.59 cents Condensed Consolidated Statement of Comprehensive Income (H1 2025 vs H1 2024) | Metric | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | | :--- | :--- | :--- | | Revenue | 21,198,384 | 22,800,874 | | Cost of Sales | (20,644,687) | (22,286,401) | | Gross Profit | 553,697 | 514,473 | | Operating Profit | 144,022 | 136,390 | | Profit Before Income Tax | 33,567 | 14,091 | | Profit and Total Comprehensive Income for the Period | 22,767 | 9,424 | | Profit Attributable to Equity Holders of the Company | 7,579 | 4,436 | | Profit Attributable to Non-controlling Interests | 15,188 | 4,988 | | Basic Earnings Per Share (RMB) | 0.59 cents | 0.35 cents | [Unaudited Condensed Consolidated Statement of Financial Position](index=3&type=section&id=Unaudited%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the Group's total assets increased to **RMB 17.116 billion**, a growth of approximately 31.9% from the end of 2024. Current assets significantly increased, primarily driven by the growth in restricted bank deposits and cash and cash equivalents. Total liabilities also substantially rose, leading to a slight increase in total equity Condensed Consolidated Statement of Financial Position (June 30, 2025 vs December 31, 2024) | Metric | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Total Assets | 17,115,589 | 12,970,475 | | Non-current Assets | 5,864,371 | 5,963,359 | | Current Assets | 11,251,218 | 7,007,116 | | Inventories | 3,683,877 | 3,821,706 | | Restricted Bank Deposits | 5,612,723 | 1,491,549 | | Cash and Cash Equivalents | 387,359 | 153,891 | | Total Equity | 2,887,565 | 2,864,798 | | Total Liabilities | 14,228,024 | 10,105,677 | | Current Liabilities | 12,531,345 | 8,277,711 | | Borrowings (Current) | 10,124,662 | 5,652,858 | [Unaudited Condensed Consolidated Statement of Changes in Equity](index=5&type=section&id=Unaudited%20Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) For the six months ended June 30, 2025, profit attributable to equity holders of the Company was **RMB 7,579 thousand**, and profit attributable to non-controlling interests was **RMB 15,188 thousand**, resulting in total equity increasing from **RMB 2,864,798 thousand** at the beginning of the period to **RMB 2,887,565 thousand** at the end of the period Condensed Consolidated Statement of Changes in Equity (H1 2025) | Metric | Balance at January 1, 2025 (RMB thousands) | Profit for the Period (RMB thousands) | Balance at June 30, 2025 (RMB thousands) | | :--- | :--- | :--- | :--- | | Share Capital Attributable to Equity Holders of the Company | 109,041 | – | 109,041 | | Reserves Attributable to Equity Holders of the Company | 2,418,872 | 7,579 | 2,426,451 | | Non-controlling Interests | 336,885 | 15,188 | 352,073 | | **Total Equity** | **2,864,798** | **22,767** | **2,887,565** | [Unaudited Condensed Consolidated Statement of Cash Flows](index=6&type=section&id=Unaudited%20Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) For the six months ended June 30, 2025, net cash from operating activities turned positive, net cash used in investing activities decreased, and net cash generated from financing activities significantly declined, yet cash and cash equivalents at the end of the period substantially increased Condensed Consolidated Statement of Cash Flows (H1 2025 vs H1 2024) | Metric | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | | :--- | :--- | :--- | | Net Cash Generated From / (Used In) Operating Activities | 135,197 | (179,584) | | Net Cash Used In Investing Activities | (121,308) | (283,747) | | Net Cash Generated From Financing Activities | 219,579 | 514,536 | | Net Change in Cash and Cash Equivalents | 233,468 | 51,205 | | Cash and Cash Equivalents at End of Period | 387,359 | 316,516 | [Notes to the Unaudited Condensed Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20the%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) This section elaborates on the basis of preparation, significant accounting policies, critical estimates, financial risk management, and the specific composition and changes of various financial statement items, providing supplementary information for understanding the Group's financial position and operating performance [General Information](index=7&type=section&id=General%20Information) Daming International Holdings Limited was incorporated in the Cayman Islands on February 14, 2007, and listed on the Main Board of the Hong Kong Stock Exchange on December 1, 2010 - Company incorporated in Cayman Islands on February 14, 2007, under the Companies Law, Cap. 22 (Law 3 of 1961, as consolidated and revised) of the Cayman Islands as an exempted company with limited liability[8](index=8&type=chunk) - Company shares listed on the Main Board of The Stock Exchange of Hong Kong Limited since December 1, 2010[9](index=9&type=chunk) [Basis of Preparation](index=7&type=section&id=Basis%20of%20Preparation) The unaudited condensed consolidated financial statements are prepared in accordance with Hong Kong Accounting Standard 34 issued by the Hong Kong Institute of Certified Public Accountants and Appendix 16 of the Hong Kong Stock Exchange Listing Rules, and have been reviewed by the Company's audit committee - The financial statements are prepared in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting" issued by the Hong Kong Institute of Certified Public Accountants and Appendix 16 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited[10](index=10&type=chunk) - The unaudited condensed consolidated financial statements have not been reviewed by external auditors but have been reviewed by the Company's audit committee[10](index=10&type=chunk) [Going Concern](index=7&type=section&id=Going%20Concern) As of June 30, 2025, the Group's **current liabilities exceeded its current assets by approximately RMB 1.28 billion**, raising significant doubt about its ability to continue as a going concern. Management has formulated various measures, including improving operating performance, strengthening cash management, maintaining bank credit relationships, and controlling capital expenditures, to ensure the Group's continued operation in the foreseeable future - As of June 30, 2025, the Group's **current liabilities exceeded its current assets by approximately RMB 1,280,127,000**, which may cast significant doubt on the Group's ability to continue as a going concern[11](index=11&type=chunk) - Management plans to mitigate liquidity pressure and improve financial position through measures such as increasing sales volume, improving working capital turnover, controlling operating expenses, maintaining bank credit facilities, and managing capital expenditures[11](index=11&type=chunk)[12](index=12&type=chunk) [Significant Accounting Policies](index=8&type=section&id=Significant%20Accounting%20Policies) The accounting policies adopted by the Group are consistent with those used in the annual financial statements for the year ended December 31, 2024, with the first-time application of HKAS 21 (Amendment) "Lack of Exchangeability" - Except as described below, the accounting policies adopted are consistent with those applied in the annual financial statements for the year ended December 31, 2024[13](index=13&type=chunk) [New and Amended Standards Adopted by the Group](index=8&type=section&id=New%20and%20Amended%20Standards%20Adopted%20by%20the%20Group) The Group has first applied HKAS 21 (Amendment) "Lack of Exchangeability" in its annual financial period commencing on January 1, 2025 - The Group has first applied HKAS 21 (Amendment) "Lack of Exchangeability" in its annual financial period commencing on January 1, 2025[15](index=15&type=chunk)[16](index=16&type=chunk) [New and Amended Standards Not Yet Effective for the Current Reporting Period](index=8&type=section&id=New%20and%20Amended%20Standards%20Not%20Yet%20Effective%20for%20the%20Current%20Reporting%20Period) The report lists several HKFRSs and amendments issued but not yet mandatorily applied, including those on financial instrument classification and measurement, annual improvements, and financial statement presentation and disclosure, with the Group currently assessing their full impact - HKFRS 9 and HKFRS 7 (Amendments) "Classification and Measurement of Financial Instruments" will be effective from January 1, 2026[17](index=17&type=chunk) - HKFRS 18 "Presentation and Disclosure in Financial Statements" will be effective from January 1, 2027[17](index=17&type=chunk) [Estimates](index=9&type=section&id=Estimates) The preparation of interim financial statements involves management making judgments, estimates, and assumptions, which are the same as the key sources of estimation uncertainty applied in the 2024 annual financial statements - The preparation of the unaudited condensed consolidated interim financial statements requires management to make judgments, estimates, and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income, and expenses. Actual results may differ from these estimates[18](index=18&type=chunk) - In preparing the unaudited condensed consolidated interim financial statements, the significant judgments made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those applied to the consolidated financial statements for the year ended December 31, 2024[18](index=18&type=chunk) [Financial Risk Management](index=9&type=section&id=Financial%20Risk%20Management) The Group's operations are exposed to various financial risks: market risk (including currency risk and fair value interest rate risk), credit risk, and liquidity risk. There have been no changes in the risk management department or any risk management policies since the year-end date [Financial Risk Factors](index=9&type=section&id=Financial%20Risk%20Factors) The Group's operations expose it to various financial risks: market risk (including currency risk and fair value interest rate risk), credit risk, and liquidity risk. There have been no changes in the risk management department or any risk management policies since the year-end date - The Group's operations expose it to various financial risks: market risk (including currency risk and fair value interest rate risk), credit risk, and liquidity risk[19](index=19&type=chunk) - There have been no changes in the risk management department or any risk management policies since the year-end date[20](index=20&type=chunk) [Fair Value Estimation](index=9&type=section&id=Fair%20Value%20Estimation) No financial assets/liabilities measured at fair value are determined by valuation techniques. The carrying amounts of cash and cash equivalents, restricted bank deposits, trade and other receivables, and financial liabilities are assumed to approximate their fair values - No financial assets/liabilities measured at fair value are determined by valuation techniques[21](index=21&type=chunk) - The carrying amounts of cash and cash equivalents, restricted bank deposits, trade and other receivables, and financial liabilities (including trade and other payables and borrowings) are assumed to approximate their fair values[21](index=21&type=chunk) [Revenue and Segment Information](index=9&type=section&id=Revenue%20and%20Segment%20Information) For the six months ended June 30, 2025, the Group's total revenue was **RMB 21.198 billion**, with mainland China contributing the vast majority of revenue (**RMB 20.631 billion**), and processing business being the primary source of income Sales Performance to External Customers by Country and Region | Region | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | | :--- | :--- | :--- | | Mainland China | 20,630,565 | 22,229,800 | | Hong Kong and Other Overseas Countries and Regions | 567,819 | 571,074 | | **Total Sales** | **21,198,384** | **22,800,874** | Revenue and Results by Business Segment | Business Segment | Sales to External Customers (RMB thousands) | Inter-segment Sales (RMB thousands) | Segment Revenue (RMB thousands) | | :--- | :--- | :--- | :--- | | Processing (2025) | 20,473,474 | 372,119 | 20,845,593 | | Manufacturing (2025) | 724,910 | 82,477 | 807,387 | | Processing (2024) | 22,092,241 | 357,210 | 22,449,451 | | Manufacturing (2024) | 708,633 | 56,232 | 764,865 | [Expenses by Nature](index=11&type=section&id=Expenses%20by%20Nature) For the six months ended June 30, 2025, the Group's total expenses amounted to **RMB 21.063 billion**, with raw materials consumed accounting for the largest portion, and employee benefit expenses, depreciation, and amortization being key components Analysis of Expenses by Nature | Expense Item | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | | :--- | :--- | :--- | | Raw Materials Consumed | 19,902,014 | 21,515,055 | | Employee Benefit Expenses, including Directors' Remuneration | 510,027 | 512,020 | | Depreciation and Amortization | 233,213 | 223,093 | | Transportation Costs | 125,237 | 121,920 | | Stamp Duty, Property Tax and Other Surcharges | 49,773 | 43,915 | | **Total** | **21,062,718** | **22,691,071** | [Net Finance Costs](index=11&type=section&id=Net%20Finance%20Costs) For the six months ended June 30, 2025, the Group's net finance costs were **RMB 110 million**, a decrease from **RMB 122 million** in the prior period, primarily due to reduced interest expense on bank borrowings and increased interest income Net Finance Costs (H1 2025 vs H1 2024) | Item | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | | :--- | :--- | :--- | | Interest Expense on Bank Borrowings | 90,568 | 98,061 | | Interest Expense on Bank / Commercial Acceptance Bills and Letters of Credit | 47,952 | 53,725 | | Exchange Gain, Net | (1,369) | (7,952) | | Interest Income | (26,696) | (21,535) | | **Total Finance Costs** | **137,151** | **143,834** | | **Net Finance Costs** | **110,455** | **122,299** | [Income Tax Expense](index=12&type=section&id=Income%20Tax%20Expense) For the six months ended June 30, 2025, income tax expense increased to **RMB 10.8 million**, primarily due to increased profit. Entities registered in the Cayman Islands and British Virgin Islands are tax-exempt, Hong Kong subsidiaries have no assessable profits, and PRC subsidiaries are subject to a 25% corporate income tax rate, with some enjoying preferential rates of 15%-20% Income Tax Expense (H1 2025 vs H1 2024) | Item | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | | :--- | :--- | :--- | | Current Income Tax Expense - PRC Enterprise Income Tax | 17,612 | 20,798 | | Deferred Income Tax Expense | (6,812) | (16,131) | | **Total Income Tax Expense** | **10,800** | **4,667** | - The Company is incorporated in the Cayman Islands as an exempted company with limited liability and is therefore exempt from Cayman Islands income tax[25](index=25&type=chunk) - All PRC subsidiaries are subject to a corporate income tax rate of **25%**, except for certain subsidiaries which enjoy preferential income tax rates of **15% to 20%**[26](index=26&type=chunk) [Earnings Per Share](index=12&type=section&id=Earnings%20Per%20Share) For the six months ended June 30, 2025, basic earnings per share increased to **RMB 0.59 cents**, up from **RMB 0.35 cents** in the prior period. As the Company has no potential dilutive ordinary shares, diluted earnings per share are the same as basic earnings per share [Basic](index=12&type=section&id=Basic) Basic earnings per share are calculated by dividing the profit attributable to equity holders of the Company by the weighted average number of ordinary shares in issue during the period, which is **RMB 0.59 cents** for the current period Basic Earnings Per Share (H1 2025 vs H1 2024) | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Profit Attributable to Equity Holders of the Company (RMB thousands) | 7,579 | 4,436 | | Weighted Average Number of Ordinary Shares in Issue (thousands of shares) | 1,274,528 | 1,274,528 | | **Basic Earnings Per Share (RMB)** | **0.59 cents** | **0.35 cents** | [Diluted](index=13&type=section&id=Diluted) As of June 30, 2025, the Company had no potential dilutive ordinary shares, thus diluted earnings per share are the same as basic earnings per share - As of June 30, 2025, the Company had no potential dilutive ordinary shares[30](index=30&type=chunk) - Diluted earnings per share for the six months ended June 30, 2025 and 2024 were the same as basic earnings per share for those periods[30](index=30&type=chunk) [Interim Dividend](index=13&type=section&id=Interim%20Dividend) The Board does not recommend the payment of any interim dividend for the six months ended June 30, 2025 - The Board does not recommend the payment of any interim dividend for the six months ended June 30, 2025 (2024: nil)[31](index=31&type=chunk) [Trade Receivables and Contract Assets](index=13&type=section&id=Trade%20Receivables%20and%20Contract%20Assets) As of June 30, 2025, total trade receivables and contract assets increased to **RMB 538 million**, with receivables within 30 days accounting for the largest portion. Most sales are conducted on a cash-on-delivery basis or via bank/commercial acceptance bills, while some reputable customers are granted credit terms of up to 180 days Trade Receivables and Contract Assets (June 30, 2025 vs December 31, 2024) | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Contract Assets (Gross) | 39,391 | 11,987 | | Trade Receivables (Gross) | 538,827 | 448,919 | | Less: Impairment Allowance | (40,696) | (40,717) | | **Total** | **537,522** | **420,189** | Aging Analysis of Trade Receivables | Aging of Trade Receivables | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Within 30 days | 344,470 | 243,995 | | 30 days to 3 months | 84,358 | 119,878 | | 3 months to 6 months | 52,191 | 22,595 | [Trade Payables](index=14&type=section&id=Trade%20Payables) As of June 30, 2025, total trade payables amounted to **RMB 977 million**, a decrease from the end of 2024, with the majority (**RMB 955,837 thousand**) aged within 6 months Trade Payables (June 30, 2025 vs December 31, 2024) | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Accounts Payable | 636,993 | 707,299 | | Bills Payable | 340,000 | 374,758 | | **Total** | **976,993** | **1,082,057** | Aging Analysis of Trade Payables | Aging of Trade Payables | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Within 6 months | 955,837 | 972,012 | | 6 months to 1 year | 11,724 | 106,862 | | 1 year to 2 years | 7,130 | 2,883 | [Business Review](index=15&type=section&id=Business%20Review) This section reviews the Group's various business achievements during the reporting period, covering areas such as shipbuilding, mining equipment, logistics transshipment, petrochemical projects, storage tank exports, and enhanced terminal lifting capabilities, demonstrating the Group's strength in high-end manufacturing and one-stop services [Breakthroughs in Shipbuilding](index=15&type=section&id=Breakthroughs%20in%20Shipbuilding) The 135-meter high-end stainless steel chemical tanker project for the Netherlands, jointly undertaken by Daming Hubei Processing Center and a Jiangxi shipyard, officially commenced, marking a significant breakthrough for the Group in international high-tech, high-value-added special vessel processing and strengthening the international competitiveness of "Made in China" - The 135-meter high-end stainless steel chemical tanker project for the Netherlands, jointly undertaken by Daming Hubei Processing Center and a Jiangxi shipyard, officially commenced in Hubei, classified by the international authoritative classification society Lloyd's Register (LR)[34](index=34&type=chunk) - This project utilizes high-performance duplex steel materials, achieving international first-tier technical standards through precision welding and surface treatment processes, successfully entering the European high-end shipbuilding market[35](index=35&type=chunk)[36](index=36&type=chunk) - This cooperation will promote the upgrade of Daming Hubei in the shipbuilding supporting industry processing field and accumulate qualifications for undertaking more high-end international orders such as LNG powered vessels and liquid hydrogen transport vessels[37](index=37&type=chunk)[40](index=40&type=chunk) [Ultra-large Tonnage Mining Truck Bodies Shipped from Daming Yangtze River Terminal to Southern Hemisphere Mines](index=16&type=section&id=Ultra-large%20Tonnage%20Mining%20Truck%20Bodies%20Shipped%20from%20Daming%20Yangtze%20River%20Terminal%20to%20Southern%20Hemisphere%20Mines) Daming Heavy Industry Construction Machinery Company shipped a batch of ultra-large tonnage mining truck bodies, produced for a globally renowned mining equipment service provider, from Daming Yangtze River Terminal, with 15 units expected to be delivered in 2025 - A batch of ultra-large tonnage mining truck bodies, produced by Daming Heavy Industry Construction Machinery Company for a globally renowned mining equipment service provider, set sail from Daming Yangtze River Terminal, with **15 units** expected to be delivered in 2025[38](index=38&type=chunk) [Daming Yangtze River Terminal Efficiently Transships Ultra-large Imported Equipment](index=16&type=section&id=Daming%20Yangtze%20River%20Terminal%20Efficiently%20Transships%20Ultra-large%20Imported%20Equipment) Daming Yangtze River Terminal successfully and efficiently transshipped ultra-large imported precision equipment weighing over a thousand tons in total, utilizing terminal transshipment warehousing and the Yangtze River's golden waterway for onward transportation - Daming Yangtze River Terminal welcomed another landmark logistics operation – two **500-ton** class pieces of equipment (over **12 meters** long, over **5 meters** wide and high) will be efficiently transported out via terminal transshipment warehousing and the Yangtze River's golden waterway[39](index=39&type=chunk) [Daming Supports Successful Commissioning of Hubei 600,000-ton Acetic Acid Project](index=17&type=section&id=Daming%20Supports%20Successful%20Commissioning%20of%20Hubei%20600%2C000-ton%20Acetic%20Acid%20Project) Daming Group's Major Engineering Project Department, in conjunction with Daming Hubei, supplied over **1,600 tons** of stainless steel products for Hubei Qianxin (Jingmen) New Material Co., Ltd.'s 600,000-ton annual acetic acid project, contributing to its successful commissioning - As a key material and processing service provider for Hubei Qianxin (Jingmen) New Material Co., Ltd.'s 600,000-ton annual acetic acid project, Daming Group's Major Engineering Project Department, in conjunction with Daming Hubei, supplied over **1,600 tons** of stainless steel products for the critical equipment of this major project[41](index=41&type=chunk) [Shandong Daming's Batch of Atmospheric Storage Tank Products Exported as Scheduled](index=17&type=section&id=Shandong%20Daming%27s%20Batch%20of%20Atmospheric%20Storage%20Tank%20Products%20Exported%20as%20Scheduled) Shandong Daming, in collaboration with Daming International Import and Export Company, successfully customized and exported two batches of atmospheric storage tanks for a client, once again demonstrating the advantages of the Group's five differentiated strategies: "deep processing, specialty steel, strategic customers, engineering projects, and product and service exports" - Shandong Daming, in conjunction with Daming International Import and Export Company, successfully completed the shipment and smooth loading of two batches of customized atmospheric storage tanks for a client in Tai'an, Shandong[42](index=42&type=chunk) - The successful completion of this project once again demonstrated the advantages of Daming Group's five differentiated strategies: "deep processing, specialty steel, strategic customers, engineering projects, and product and service exports"[42](index=42&type=chunk) [Tianjin Daming's High-end Oil Tank Pre-fabrication Project Progressing Rapidly](index=17&type=section&id=Tianjin%20Daming%27s%20High-end%20Oil%20Tank%20Pre-fabrication%20Project%20Progressing%20Rapidly) Tianjin Daming is rapidly advancing a high-end oil tank pre-fabrication project for the overseas market, successfully securing orders for critical storage and transportation facility pre-fabricated components with extremely stringent requirements for plate material quality and processing accuracy, leveraging its extensive experience in metal material processing and exports - Tianjin Daming is rapidly progressing a high-end oil tank pre-fabrication project for the overseas market, with the pre-fabricated oil tank components being critical parts for a large storage and transportation facility in a certain country[43](index=43&type=chunk) - The project has extremely strict requirements for plate material quality, processing accuracy, bevel standards, rolling and forming, and transportation protection. Tianjin Daming successfully secured this order by leveraging its extensive experience in metal material processing and exports[43](index=43&type=chunk) [Zhejiang Daming Supports Ningxing Shipbuilding in Constructing Xingtong Wanbang's 13,000 DWT Duplex Stainless Steel Chemical Tanker](index=17&type=section&id=Zhejiang%20Daming%20Supports%20Ningxing%20Shipbuilding%20in%20Constructing%20Xingtong%20Wanbang%27s%2013%2C000DWT%20Duplex%20Stainless%20Steel%20Chemical%20Tanker) Zhejiang Daming provided professional solutions for the ship plate project of the 13,000 DWT duplex stainless steel chemical tanker built by Zhoushan Ningxing Shipbuilding for Xingtong Wanbang - Zhejiang Daming provided professional solutions for the ship plate project of the **13,000 DWT** stainless steel chemical tanker built by Zhoushan Ningxing Shipbuilding for Xingtong Wanbang[44](index=44&type=chunk) [Daming Yangtze River Terminal Sets New Lifting Record](index=17&type=section&id=Daming%20Yangtze%20River%20Terminal%20Sets%20New%20Lifting%20Record) Daming Yangtze River Terminal successfully completed the lifting of a precision vessel, 38 meters long and weighing over **800 tons**, setting a new lifting record and demonstrating its capability for handling ultra-large equipment - Two **1,200-ton** class lifting devices at Daming Yangtze River Terminal worked in perfect coordination to steadily place a precision vessel manufactured by Zhenhai Petrochemical, **38 meters** long, **6 meters** in diameter, and weighing over **800 tons**, onto the deck of the "Yuan Shun Hai 2" vessel, marking a new lifting record for Daming Yangtze River Terminal[45](index=45&type=chunk) [Strategic Cooperation](index=18&type=section&id=Strategic%20Cooperation) This section introduces the strategic agreements signed by the Group with key partners during the reporting period, as well as green and low-carbon innovation achievements in base construction, reflecting the Group's efforts in intelligent manufacturing and sustainable development [Daming Holds Multiple Project Signing Ceremonies with Dongfang Turbine and Dongfang Digital](index=18&type=section&id=Daming%20Holds%20Multiple%20Project%20Signing%20Ceremonies%20with%20Dongfang%20Turbine%20and%20Dongfang%20Digital) Daming Heavy Industry signed multiple project cooperation agreements with Dongfang Turbine and Dongfang Digital, including a procurement framework cooperation agreement for intelligent manufacturing projects and a low-pressure module final assembly contract - Daming Heavy Industry held multiple project signing ceremonies with Dongfang Turbine and Dongfang Digital, including a procurement framework cooperation agreement for Dongfang Digital's intelligent manufacturing project and a low-pressure module final assembly contract[46](index=46&type=chunk) [Green, Low-Carbon, and Efficient Operation: Daming Jingjiang Base Activates Multi-storey Car Park](index=18&type=section&id=Green%2C%20Low-Carbon%2C%20and%20Efficient%20Operation%3A%20Daming%20Jingjiang%20Base%20Activates%20Multi-storey%20Car%20Park) Daming Jingjiang Base activated the largest vertical circulation mechanical car park in China, a multi-storey car park covering **2,000 square meters** with a capacity for **980 vehicles**, achieving over **3 times** the land utilization efficiency of traditional car parks, and offering advantages such as rapid vehicle retrieval within **90 seconds**, low fault rates, and reduced maintenance costs, embodying green, low-carbon, and efficient operation principles - The largest vertical circulation mechanical car park in China was activated at Daming Jingjiang Base, featuring a compact design covering **2,000 square meters** with **50** efficient parking units, capable of accommodating **980 vehicles**, achieving over **3 times** the land utilization efficiency of traditional car parks[47](index=47&type=chunk) - In terms of operational efficiency, it allows for rapid vehicle retrieval within **90 seconds**, completely solving peak-hour queuing problems. The equipment adopts a revolutionary bidirectional rotation mode, reducing the fault rate to **1/5** of the industry average and maintenance costs by **60%**[47](index=47&type=chunk) [Operating Performance](index=19&type=section&id=Operating%20Performance) For the six months ended June 30, 2025, the Group's net profit significantly increased by **141.6%**. Both stainless steel and carbon steel sales volumes grew, with stainless steel sales up **3.1%** and carbon steel sales up **0.4%**. Stainless steel processing volume slightly decreased, while carbon steel processing volume significantly increased by **6.6%** - For the six months ended June 30, 2025, the Group recorded a net profit of approximately **RMB 22.8 million**, an increase of approximately **141.6%** compared to the net profit of approximately **RMB 9.4 million** for the six months ended June 30, 2024[48](index=48&type=chunk) [Stainless Steel Business](index=19&type=section&id=Stainless%20Steel%20Business) For the six months ended June 30, 2025, stainless steel sales volume increased by **3.1%** year-on-year to **995,500 tons**, with significant growth in Wuxi, Wuhan, and Shandong regions. Processing volume slightly decreased by **0.2%** year-on-year to **1,521,769 tons**, with processing volume increasing in Taiyuan, Wuhan, and Shandong regions Stainless Steel Sales Volume (by Processing Center) | Region | H1 2025 (tons) | H1 2024 (tons) | Change | | :--- | :--- | :--- | :--- | | Wuxi | 416,567 | 399,492 | +4.3% | | Wuhan | 58,664 | 49,871 | +17.6% | | Shandong | 92,297 | 79,767 | +15.7% | | Jiaxing | 34,502 | 46,231 | -25.4% | | **Total** | **995,500** | **965,145** | **+3.1%** | Stainless Steel Processing Volume (by Processing Center) | Region | H1 2025 (tons) | H1 2024 (tons) | Change | | :--- | :--- | :--- | :--- | | Taiyuan | 269,082 | 239,900 | +12.2% | | Wuhan | 66,497 | 62,051 | +7.2% | | Shandong | 80,914 | 76,200 | +6.2% | | Wuxi | 637,475 | 682,331 | -6.6% | | **Total** | **1,521,769** | **1,524,910** | **-0.2%** | [Carbon Steel Business](index=19&type=section&id=Carbon%20Steel%20Business) For the six months ended June 30, 2025, carbon steel sales volume increased by **0.4%** year-on-year to **2,390,742 tons**, with sales growth in Wuxi, Tianjin, Wuhan, and Shandong regions. Processing volume increased by **6.6%** year-on-year to **2,444,372 tons**, with significant processing volume growth in Taiyuan, Wuhan, and Jingjiang regions Carbon Steel Sales Volume (by Processing Center) | Region | H1 2025 (tons) | H1 2024 (tons) | Change | | :--- | :--- | :--- | :--- | | Wuxi | 436,481 | 415,351 | +5.1% | | Wuhan | 324,875 | 303,809 | +6.9% | | Shandong | 329,887 | 308,304 | +7.0% | | Hangzhou | 25,705 | 38,614 | -33.4% | | **Total** | **2,390,742** | **2,382,279** | **+0.4%** | Carbon Steel Processing Volume (by Processing Center) | Region | H1 2025 (tons) | H1 2024 (tons) | Change | | :--- | :--- | :--- | :--- | | Taiyuan | 224,173 | 185,448 | +20.9% | | Wuhan | 389,393 | 296,638 | +31.3% | | Jingjiang | 571,029 | 523,334 | +9.1% | | Hangzhou | 26,709 | 37,251 | -28.3% | | **Total** | **2,444,372** | **2,292,416** | **+6.6%** | [Financial Review and Analysis](index=22&type=section&id=Financial%20Review%20and%20Analysis) This section provides a detailed review and analysis of the Group's financial performance for the six months ended June 30, 2025, covering revenue, gross profit, various expenses, profit for the period, foreign exchange risk management, and liquidity, explaining the reasons for changes in various financial indicators [Overall Financial Summary](index=22&type=section&id=Overall%20Financial%20Summary) For the six months ended June 30, 2025, the Group recorded revenue of approximately **RMB 21.198 billion**, gross profit of approximately **RMB 554 million**, and profit attributable to equity holders of the Company of approximately **RMB 8 million**. As of June 30, 2025, the Group's total assets amounted to approximately **RMB 17.116 billion**, and equity attributable to equity holders of the Company was approximately **RMB 2.535 billion** - For the six months ended June 30, 2025, the Group recorded revenue of approximately **RMB 21.198 billion**, gross profit of approximately **RMB 554 million**, and profit attributable to equity holders of the Company of approximately **RMB 8 million**[51](index=51&type=chunk) - As of June 30, 2025, the Group's total assets amounted to approximately **RMB 17.116 billion**, and equity attributable to equity holders of the Company was approximately **RMB 2.535 billion**[51](index=51&type=chunk) [Revenue](index=22&type=section&id=Revenue) For the six months ended June 30, 2025, the Group's revenue was approximately **RMB 21.198 billion**, a slight decrease of **7.0%** year-on-year, with processing business contributing approximately **RMB 20.473 billion** and manufacturing business contributing approximately **RMB 725 million**. Both stainless steel and carbon steel sales volumes saw slight increases, while carbon steel processing volume grew significantly - For the six months ended June 30, 2025, the Group's revenue was approximately **RMB 21.198 billion**, of which approximately **RMB 20.473 billion** was from processing business and approximately **RMB 725 million** was from manufacturing business[52](index=52&type=chunk) - Compared to revenue of approximately **RMB 22.801 billion** for the six months ended June 30, 2024, there was a slight decrease of approximately **7.0%**[52](index=52&type=chunk) Changes in Stainless Steel and Carbon Steel Sales and Processing Volumes | Business | Metric | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | :--- | | Stainless Steel Processing | Sales Volume (tons) | 995,500 | 965,145 | +3.1% | | Carbon Steel Processing | Sales Volume (tons) | 2,390,742 | 2,382,729 | +0.4% | | Stainless Steel Processing | Processing Volume (tons) | 1,521,769 | 1,524,910 | -0.2% | | Carbon Steel Processing | Processing Volume (tons) | 2,444,372 | 2,292,416 | +6.6% | [Revenue Analysis by Major Industry Segment](index=23&type=section&id=Revenue%20Analysis%20by%20Major%20Industry%20Segment) For the six months ended June 30, 2025, trade, hardware decoration, special machinery, and petrochemical equipment were the Group's primary revenue sources, with the revenue share of trade and hardware decoration slightly decreasing, while general machinery and environmental energy saw an increase Revenue by Major Industry Segment | Industry | H1 2025 (RMB thousands) | Percentage (%) | H1 2024 (RMB thousands) | Percentage (%) | | :--- | :--- | :--- | :--- | :--- | | Trade | 5,882,381 | 27.8 | 6,809,308 | 29.9 | | Hardware Decoration | 3,406,288 | 16.1 | 3,660,978 | 16.1 | | Special Machinery | 3,147,526 | 14.8 | 3,346,596 | 14.7 | | Petrochemical Equipment | 3,041,948 | 14.3 | 3,267,319 | 14.3 | | General Machinery | 2,363,545 | 11.1 | 2,250,532 | 9.9 | | Environmental Energy | 1,005,227 | 4.8 | 998,967 | 4.4 | | Steel Mill | 55,365 | 0.3 | – | – | [Revenue Analysis by Region](index=24&type=section&id=Revenue%20Analysis%20by%20Region) For the six months ended June 30, 2025, East China remained the Group's largest revenue source, accounting for **68.4%**. Revenue share from Southwest China increased, while that from North China, Northeast China, and Northwest China decreased Revenue by Region | Region | H1 2025 (RMB thousands) | Percentage (%) | H1 2024 (RMB thousands) | Percentage (%) | | :--- | :--- | :--- | :--- | :--- | | East China | 14,503,641 | 68.4 | 15,665,444 | 68.7 | | North China | 2,947,685 | 13.9 | 3,322,735 | 14.6 | | Central China | 1,999,275 | 9.4 | 1,998,874 | 8.8 | | Southwest China | 361,079 | 1.7 | 239,617 | 1.1 | | Overseas | 567,819 | 2.7 | 571,074 | 2.5 | [Gross Profit](index=25&type=section&id=Gross%20Profit) Gross profit increased from approximately **RMB 514.5 million** in H1 2024 to approximately **RMB 553.7 million** in H1 2025, primarily due to improved operational efficiency - Gross profit increased from approximately **RMB 514.5 million** for the six months ended June 30, 2024, to approximately **RMB 553.7 million** for the six months ended June 30, 2025, primarily due to improved operational efficiency[57](index=57&type=chunk) [Other Income](index=25&type=section&id=Other%20Income) Other income decreased from approximately **RMB 27.9 million** in H1 2024 to approximately **RMB 9.9 million** in H1 2025, primarily due to a reduction in government grants received during the period - Other income decreased from approximately **RMB 27.9 million** for the six months ended June 30, 2024, to approximately **RMB 9.9 million** for the six months ended June 30, 2025, primarily due to a reduction in government grants received during the period[58](index=58&type=chunk) [Distribution Costs](index=25&type=section&id=Distribution%20Costs) Distribution costs slightly increased from approximately **RMB 228.3 million** in H1 2024 to approximately **RMB 233.4 million** in H1 2025, primarily due to increased transportation costs - Distribution costs slightly increased from approximately **RMB 228.3 million** for the six months ended June 30, 2024, to approximately **RMB 233.4 million** for the six months ended June 30, 2025. The increase in distribution costs was primarily due to increased transportation costs[59](index=59&type=chunk) [Administrative Expenses](index=25&type=section&id=Administrative%20Expenses) Administrative expenses increased from approximately **RMB 176.4 million** in H1 2024 to approximately **RMB 184.6 million** in H1 2025, primarily due to increased stamp duty, property tax, and other surcharges - Administrative expenses increased from approximately **RMB 176.4 million** for the six months ended June 30, 2024, to approximately **RMB 184.6 million** for the six months ended June 30, 2025. The increase in administrative expenses was primarily due to increased stamp duty, property tax, and other surcharges[60](index=60&type=chunk) [Finance Costs](index=25&type=section&id=Finance%20Costs) Finance costs decreased from approximately **RMB 122.3 million** in H1 2024 to approximately **RMB 110.5 million** in H1 2025, primarily due to reduced interest expense on bank borrowings and increased interest income - Finance costs decreased from approximately **RMB 122.3 million** for the six months ended June 30, 2024, to approximately **RMB 110.5 million** for the six months ended June 30, 2025. The decrease in finance costs was primarily due to reduced interest expense on bank borrowings and increased interest income[61](index=61&type=chunk) [Income Tax Expense](index=25&type=section&id=Income%20Tax%20Expense) Income tax expense increased from approximately **RMB 4.7 million** in H1 2024 to approximately **RMB 10.8 million** in H1 2025, which was due to increased profit - Income tax expense increased from approximately **RMB 4.7 million** for the six months ended June 30, 2024, to approximately **RMB 10.8 million** for the six months ended June 30, 2025, which was due to increased profit[62](index=62&type=chunk) [Profit for the Period](index=25&type=section&id=Profit%20for%20the%20Period) The Group recorded a net profit of approximately **RMB 22.8 million** in H1 2025, a significant increase compared to approximately **RMB 9.4 million** in H1 2024 - The Group recorded a net profit of approximately **RMB 22.8 million** for the six months ended June 30, 2025, compared to a net profit of approximately **RMB 9.4 million** for the six months ended June 30, 2024[63](index=63&type=chunk) [Foreign Exchange Risk Management](index=26&type=section&id=Foreign%20Exchange%20Risk%20Management) The Group primarily operates in China, with most transactions denominated and settled in RMB, but some trade receivables, bank balances, payables, and borrowings are denominated in foreign currencies, exposing it to foreign currency exchange risk. Management closely monitors foreign exchange fluctuations to take precautionary measures - The Group primarily operates in China, with most transactions denominated and settled in RMB[64](index=64&type=chunk) - The Group has certain trade receivables, restricted bank balances, cash and cash equivalents, trade payables, other payables, and borrowings denominated in foreign currencies (mainly USD, EUR, HKD, and JPY), which expose it to foreign currency exchange risk[64](index=64&type=chunk) - Management closely monitors foreign exchange fluctuations to ensure adequate precautionary measures are taken against any adverse effects[65](index=65&type=chunk) [Liquidity, Capital Structure and Financial Resources](index=26&type=section&id=Liquidity%2C%20Capital%20Structure%20and%20Financial%20Resources) As of June 30, 2025, the Group's total borrowings were approximately **RMB 11.653 billion**, bills payable approximately **RMB 340 million**, and bank balances approximately **RMB 6 billion** (of which **RMB 5.613 billion** were restricted bank deposits). The Group recorded **net current liabilities of approximately RMB 1.28 billion**, and the gearing ratio increased from **71.42%** at the end of 2024 to **79.58%** - As of June 30, 2025, the Group's total borrowings were approximately **RMB 11.653 billion**. Bills payable were approximately **RMB 340 million**[66](index=66&type=chunk) - Bank balances were approximately **RMB 6 billion**, of which approximately **RMB 5.613 billion** were restricted bank deposits used for opening letters of credit and bills payable bank financing facilities[66](index=66&type=chunk) - As of June 30, 2025, the Group recorded **net current liabilities of approximately RMB 1.28 billion**[67](index=67&type=chunk) - The gearing ratio was **79.58%** and **71.42%** as of June 30, 2025, and December 31, 2024, respectively[67](index=67&type=chunk) [Events After Reporting Period](index=26&type=section&id=Events%20After%20Reporting%20Period) No significant events after the reporting period have occurred from June 30, 2025, up to the date of this announcement that would materially affect the Group - No significant events after the reporting period have occurred from June 30, 2025, up to the date of this announcement that would materially affect the Group[68](index=68&type=chunk) [Contingent Liabilities](index=26&type=section&id=Contingent%20Liabilities) As of June 30, 2025, the Group had no significant contingent liabilities - As of June 30, 2025, the Group had no significant contingent liabilities[69](index=69&type=chunk) [Corporate Governance and Other Information](index=26&type=section&id=Corporate%20Governance) This section outlines the Group's commitment to corporate governance and provides information regarding interim dividend policy, dealings in listed securities, and the review and publication of interim results [Corporate Governance](index=26&type=section&id=Corporate%20Governance) The Company is committed to maintaining high standards of corporate governance and complies with the Corporate Governance Code set out in Appendix C1 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited - The Company is committed to maintaining high standards of corporate governance, striving to enhance shareholder value and protect the interests of shareholders and other stakeholders[70](index=70&type=chunk) - For the six months ended June 30, 2025, the Company has complied with the Corporate Governance Code set out in Appendix C1 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited[70](index=70&type=chunk) [Interim Dividend](index=27&type=section&id=Interim%20Dividend) The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025 - The Board does not recommend the payment of any interim dividend for the six months ended June 30, 2025 (2024: nil)[71](index=71&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=27&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company%27s%20Listed%20Securities) During the six months ended June 30, 2025, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed shares - During the six months ended June 30, 2025, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed shares[72](index=72&type=chunk) [Review of Interim Results](index=27&type=section&id=Review%20of%20Interim%20Results) The Company's audit committee has reviewed the Group's unaudited interim results for the six months ended June 30, 2025, and believes the Company has complied with all applicable accounting standards and requirements - The Company's audit committee has reviewed the Group's unaudited interim results (including the unaudited condensed consolidated financial statements) for the six months ended June 30, 2025, and discussed them with management[73](index=73&type=chunk) - The committee believes that the Company has complied with all applicable accounting standards and requirements[73](index=73&type=chunk) [Interim Report](index=27&type=section&id=Interim%20Report) The 2025 interim report will be dispatched to shareholders later and will be available on the websites of The Stock Exchange of Hong Kong Limited and the Company - The 2025 interim report will be dispatched to the Company's shareholders later and will be available on the website of The Stock Exchange of Hong Kong Limited (www.hkexnews.hk) and the Company's website (www.dmssc.net)[74](index=74&type=chunk)

[Unaudited Interim Results Announcement](index=1&type=section&id=Unaudited%20Interim%20Results%20Announcement) This report presents the unaudited interim results, financial performance, and operational review for the six months ended June 30, 2025 [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, Alltronics Holdings Limited reported revenue of **HKD 613,594 thousand**, a **16.3% increase** year-on-year, with profit for the period at **HKD 44,527 thousand**, profit attributable to owners at **HKD 40,982 thousand**, and basic and diluted earnings per share at **HKD 8.7 cents** | Indicator | Six Months Ended June 30, 2025 (thousand HKD) | Six Months Ended June 30, 2024 (thousand HKD) | | :--- | :--- | :--- | | Revenue | 613,594 | 527,492 | | Cost of sales | (491,729) | (428,406) | | Gross profit | 121,865 | 99,086 | | Operating profit | 72,331 | 53,570 | | Profit before tax | 57,073 | 49,566 | | Profit for the period | 44,527 | 40,502 | | Profit attributable to owners of the Company | 40,982 | 36,131 | | Basic and diluted earnings per share (HK cents) | 8.7 | 7.6 | [Condensed Consolidated Statement of Comprehensive Income](index=3&type=section&id=Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) For the six months ended June 30, 2025, the Group's total comprehensive income was **HKD 52,974 thousand**, a **19.3% increase** from **HKD 44,394 thousand** in the prior period, primarily driven by exchange differences on translating foreign operations | Indicator | Six Months Ended June 30, 2025 (thousand HKD) | Six Months Ended June 30, 2024 (thousand HKD) | | :--- | :--- | :--- | | Profit for the period | 44,527 | 40,502 | | Exchange differences on translating foreign operations | 8,447 | 3,892 | | Total comprehensive income for the period | 52,974 | 44,394 | | Total comprehensive income attributable to owners of the Company | 49,519 | 39,784 | [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 increased to **HKD 1,212,615 thousand** from December 31, 2024, with net current assets rising to **HKD 521,284 thousand** and total equity to **HKD 768,719 thousand** | Indicator | June 30, 2025 (thousand HKD) | December 31, 2024 (thousand HKD) | | :--- | :--- | :--- | | Total non-current assets | 266,692 | 250,734 | | Total current assets | 945,923 | 928,843 | | Total current liabilities | 424,639 | 437,198 | | Net current assets | 521,284 | 491,645 | | Net assets | 768,719 | 729,937 | | Equity attributable to owners of the Company | 709,853 | 674,526 | | Total equity | 768,719 | 729,937 | [Notes to the Condensed Consolidated Interim Financial Statements](index=6&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Interim%20Financial%20Statements) This section details the Group's background, financial statement preparation basis, accounting policy changes, operating segment information, financing costs, taxation, earnings per share, dividends, trade receivables and payables, contingent liabilities, and significant post-reporting period events [1 Company and Group Information](index=6&type=section&id=1%20Company%20and%20Group%20Information) Provides essential details about the company's incorporation, listing, primary business activities, and ultimate controlling party - The company was incorporated in the Cayman Islands on July 24, 2003, and listed on the Main Board of the Hong Kong Stock Exchange since July 15, 2005[8](index=8&type=chunk) - Primary business involves manufacturing and trading electronic products, plastic molds for electronic products, plastics, and other components[8](index=8&type=chunk) - The ultimate holding company is Profit International Holdings Limited, with Mr. Lam Yin Kee as the ultimate controlling party, owning **46.48%** of the company's issued shares as of June 30, 2025[8](index=8&type=chunk) [2 Basis of Preparation](index=6&type=section&id=2%20Basis%20of%20Preparation) Outlines the accounting standards and regulatory guidelines used for preparing the interim financial information - Financial information is prepared in accordance with Hong Kong Accounting Standard 34 'Interim Financial Reporting' issued by the HKICPA and the Listing Rules of the Stock Exchange[10](index=10&type=chunk) - Should be read in conjunction with the annual consolidated financial statements for the year ended December 31, 2024[10](index=10&type=chunk) [3 Changes in Accounting Policies and Disclosures](index=7&type=section&id=3%20Changes%20in%20Accounting%20Policies%20and%20Disclosures) Details the adoption of new and revised Hong Kong Financial Reporting Standards and their impact on the interim financial statements - Adopted the revised HKAS 21 'Lack of Exchangeability' effective January 1, 2025, which had **no significant impact** on the results and financial position for the current and prior periods[11](index=11&type=chunk)[12](index=12&type=chunk) - New and revised HKFRSs (including HKFRS 18, HKFRS 19, etc.) issued but not yet effective are **not expected to have a significant impact** on the condensed consolidated interim financial statements[13](index=13&type=chunk)[14](index=14&type=chunk) [4 Operating Segment Information](index=8&type=section&id=4%20Operating%20Segment%20Information) Presents financial data segmented by business operations and geographical regions, highlighting key customer contributions - The Group has only one reportable segment, the electronic products segment; the biodiesel products segment and energy-saving business segment are combined and disclosed under the 'All Other Segments' category[16](index=16&type=chunk) Segment Revenue and Operating Profit | Indicator | Electronic Products (thousand HKD) | All Other (thousand HKD) | Total (thousand HKD) | | :--- | :--- | :--- | :--- | | Six Months Ended June 30, 2025 Segment Revenue (External Customer Sales) (thousand HKD) | 613,594 | – | 613,594 | | Six Months Ended June 30, 2025 Operating Profit/(Loss) Before Interest and Tax (thousand HKD) | 62,766 | (107) | 62,659 | | Six Months Ended June 30, 2024 Segment Revenue (External Customer Sales) (thousand HKD) | 527,492 | – | 527,492 | | Six Months Ended June 30, 2024 Operating Profit/(Loss) Before Interest and Tax (thousand HKD) | 57,628 | (139) | 57,489 | Geographical Revenue Breakdown | Region | Six Months Ended June 30, 2025 (thousand HKD) | Six Months Ended June 30, 2024 (thousand HKD) | | :--- | :--- | :--- | | United States | 426,104 | 322,730 | | Hong Kong | 36,731 | 48,611 | | Europe | 68,997 | 86,075 | | China | 63,504 | 55,424 | | Other Overseas Countries | 18,258 | 14,652 | | **Total** | **613,594** | **527,492** | - For the six months ended June 30, 2025, revenue from Customer A was **HKD 320,753 thousand**, while revenue from Customer B accounted for **less than 10%** of the Group's revenue (HKD 57,090 thousand in the corresponding period of 2024)[22](index=22&type=chunk)[23](index=23&type=chunk) - Revenue primarily derives from the sale of industrial products and is recognized at a point in time when goods are transferred[24](index=24&type=chunk) [5 Finance Costs](index=12&type=section&id=5%20Finance%20Costs) Summarizes the interest expenses incurred from bank borrowings, overdrafts, and lease liabilities for the reporting periods Finance Costs Breakdown | Finance Cost Type | Six Months Ended June 30, 2025 (thousand HKD) | Six Months Ended June 30, 2024 (thousand HKD) | | :--- | :--- | :--- | | Interest on bank loans and overdrafts | 5,620 | 6,936 | | Interest on lease liabilities | 632 | 763 | | **Total Finance Costs** | **6,252** | **7,699** | [6 Profit Before Tax](index=12&type=section&id=6%20Profit%20Before%20Tax

[Company Information and Performance Summary](index=1&type=section&id=Company%20Information%20and%20Performance%20Summary) [Company Overview](index=1&type=section&id=Company%20Overview) Incorporated in the Cayman Islands, the company's shares have been suspended from HKEX trading since February 14, 2013, focusing on high-strength polyester fiber composites and PVC/non-PVC building materials - The company was incorporated in the Cayman Islands on October 7, 2009, with shares suspended from trading on the Main Board of The Stock Exchange of Hong Kong Limited since **February 14, 2013**[2](index=2&type=chunk)[11](index=11&type=chunk) - The Group primarily engages in the design, development, production, and sale of high-strength polyester fiber polymer composites and other reinforced composite materials (material products), as well as PVC and non-PVC composite flooring and wall panels (building material products)[11](index=11&type=chunk) [Interim Performance Highlights](index=1&type=section&id=Interim%20Performance%20Highlights) For the six months ended June 30, 2025, the Group's revenue increased by 11.2% to approximately RMB 591.6 million, but profit attributable to owners decreased by 14.6% to RMB 17.2 million, with a slight decline in gross profit margin and no interim dividend declared Summary of Key Financial Data for H1 2025 | Metric | June 30, 2025 (RMB million) | June 30, 2024 (RMB million) | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | 591.6 | 532.2 | +11.2% | | Gross Profit Margin | 17.0% | 17.4% | -0.4 percentage points | | Profit Attributable to Owners of the Company | 17.2 | 20.2 | -14.6% | | Basic Earnings Per Share | 2.02 cents | 2.36 cents | -14.4% | | Interim Dividend | Nil | Nil | - | [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, the Group's revenue increased, but profit for the period and profit attributable to owners decreased year-on-year due to higher cost of sales, finance costs, and income tax expense, coupled with lower other income and gains Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (Summary) | Metric | June 30, 2025 (RMB thousand) | June 30, 2024 (RMB thousand) | | :--- | :--- | :--- | | Revenue | 591,574 | 532,153 | | Cost of sales | (490,721) | (439,418) | | Gross profit | 100,853 | 92,735 | | Other income and gains | 11,128 | 17,649 | | Selling and distribution costs | (23,437) | (23,160) | | Administrative expenses | (59,810) | (58,300) | | Profit from operations | 29,115 | 27,217 | | Finance costs | (9,228) | (4,367) | | Profit before tax | 19,415 | 22,850 | | Income tax expense | (5,264) | (5,059) | | Profit for the period | 14,151 | 17,791 | | Profit attributable to owners of the Company | 17,211 | 20,153 | | Basic earnings per share (RMB cents) | 2.02 | 2.36 | [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 non-current assets slightly increased, total current assets slightly decreased, but total current liabilities significantly declined, leading to an improved net current assets and an increase in total equity Condensed Consolidated Statement of Financial Position (Summary) | Metric | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Total non-current assets | 1,178,335 | 1,159,555 | | Total current assets | 767,253 | 780,919 | | Total current liabilities | 500,260 | 559,016 | | Net current assets | 266,993 | 221,903 | | Total non-current liabilities | 601,190 | 554,025 | | Total equity | 844,138 | 827,433 | [Notes to the Condensed Consolidated Financial Statements](index=6&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) [General Information](index=6&type=section&id=General%20Information) The company is registered in the Cayman Islands, primarily engaged in the design, development, production, and sale of material and building material products, with Mr. Lin Shengxiong as the ultimate controlling party - The Company is an investment holding company, primarily engaged in the design, development, production, and sale of material products and building material products through its subsidiaries[11](index=11&type=chunk) - Mr. Lin Shengxiong is the ultimate controlling party of the Company[11](index=11&type=chunk) [Basis of Preparation](index=6&type=section&id=Basis%20of%20Preparation) The interim financial statements are prepared in accordance with Hong Kong Financial Reporting Standards, Hong Kong Generally Accepted Accounting Principles, and the Hong Kong Companies Ordinance, and should be read in conjunction with the 2024 annual report - The interim financial statements have been prepared in accordance with Hong Kong Financial Reporting Standards issued by the HKICPA, Hong Kong Generally Accepted Accounting Principles, disclosure requirements of the Hong Kong Companies Ordinance, and applicable disclosure provisions of the Listing Rules of The Stock Exchange of Hong Kong Limited[12](index=12&type=chunk) - The interim financial statements should be read in conjunction with the Group's 2024 annual consolidated financial statements for the year ended December 31, 2024[12](index=12&type=chunk) [Adoption of New and Revised Hong Kong Financial Reporting Standards](index=7&type=section&id=Adoption%20of%20New%20and%20Revised%20Hong%20Kong%20Financial%20Reporting%20Standards) The Group has adopted all new and revised Hong Kong Financial Reporting Standards effective January 1, 2025, with no significant changes to its accounting policies, financial statement presentation, or reported amounts - The adoption of new and revised Hong Kong Financial Reporting Standards has not resulted in significant changes to the Group's accounting policies, financial statement presentation, or reported amounts[13](index=13&type=chunk) [Revenue](index=7&type=section&id=Revenue) The Group's revenue primarily derives from material products, accounting for 93.3% of total revenue, with domestic sales remaining the main source, recognized upon transfer of product control, typically with credit terms of 30 to 90 days Revenue by Geographical Region and Product Type | Category | June 30, 2025 (RMB thousand) | June 30, 2024 (RMB thousand) | | :--- | :--- | :--- | | **Geographical Market** | | | | China | 387,135 | 357,906 | | Others | 204,439 | 174,247 | | **Major Products** | | | | Material products | 552,199 | 482,025 | | Building material products | 39,375 | 50,128 | | **Total** | 591,574 | 532,153 | - The Group had only one operating segment during the year, primarily engaged in the design, development, production, and sale of material products and building material products[14](index=14&type=chunk) - Sales are recognized when control of the products is transferred, with credit terms to customers typically ranging from **30 to 90 days**[14](index=14&type=chunk) [Other Income and Gains](index=9&type=section&id=Other%20Income%20and%20Gains) For the six months ended June 30, 2025, total other income and gains decreased to RMB 11,128 thousand from RMB 17,649 thousand in the prior period, primarily due to lower government grant income Details of Other Income and Gains | Item | June 30, 2025 (RMB thousand) | June 30, 2024 (RMB thousand) | | :--- | :--- | :--- | | Interest income | 379 | 384 | | Government grants | 2,419 | 9,962 | | Gross rental income | 2,150 | 2,173 | | Exchange gains, net | 897 | 2,317 | | Miscellaneous income | 5,267 | 2,758 | | **Total** | 11,128 | 17,649 | - The decrease in other income and gains was primarily due to a reduction in government grant income[16](index=16&type=chunk) [Finance Costs](index=9&type=section&id=Finance%20Costs) For the six months ended June 30, 2025, finance costs increased to RMB 9,228 thousand, mainly because no interest expenses were capitalized during the period Details of Finance Costs | Item | June 30, 2025 (RMB thousand) | June 30, 2024 (RMB thousand) | | :--- | :--- | :--- | | Interest on lease liabilities | 62 | 95 | | Interest on bank borrowings | 9,157 | 10,131 | | Interest on other borrowings | 9 | 429 | | Total borrowing costs | 9,228 | 10,655 | | Less: Interest capitalized | – | (6,288) | | **Total** | 9,228 | 4,367 | - The increase in finance costs was primarily due to no interest expenses being capitalized during the period[17](index=17&type=chunk) [Profit Before Tax](index=10&type=section&id=Profit%20Before%20Tax) The Group's profit before tax is influenced by various expenses, including directors' emoluments, depreciation of property, plant and equipment, depreciation of right-of-use assets, and amortization of intangible assets Items Deducted From/Credited to Profit Before Tax | Item | June 30, 2025 (RMB thousand) | June 30, 2024 (RMB thousand) | | :--- | :--- | :--- | | Directors' emoluments | 839 | 928 | | Depreciation of property, plant and equipment | 35,266 | 25,231 | | Depreciation of right-of-use assets | 3,579 | 1,804 | | Amortization of intangible assets | 2,193 | 64 | [Income Tax Expense](index=10&type=section&id=Income%20Tax%20Expense) The Group's income tax expense slightly increased, mainly due to higher deferred tax deducted from profit or loss during the period, with PRC subsidiaries enjoying a 15% preferential tax rate as high-tech enterprises, while others pay 25% Details of Income Tax Expense | Item | June 30, 2025 (RMB thousand) | June 30, 2024 (RMB thousand) | | :--- | :--- | :--- | | Current tax – PRC | | | | Provision for the year | 4,136 | 2,265 | | Underprovision in prior years | 952 | 2,715 | | Deferred tax | 176 | 79 | | **Total** | 5,264 | 5,059 | - Fujian Sijia, Shanghai Sijia, and Fujian Sijia New Material, as high-tech enterprises, are subject to a **15%** tax rate, while other subsidiaries are subject to a **25%** corporate income tax rate[20](index=20&type=chunk) [Dividends](index=11&type=section&id=Dividends) The Board does not recommend the payment of any interim dividend for the six months ended June 30, 2025 - The Directors do not recommend the payment of any interim dividend for the six months ended June 30, 2025[21](index=21&type=chunk) [Earnings Per Share Attributable to Owners of the Company](index=11&type=section&id=Earnings%20Per%20Share%20Attributable%20to%20Owners%20of%20the%20Company) For the six months ended June 30, 2025, basic earnings per share attributable to owners of the Company was RMB 2.02 cents, consistent with diluted earnings per share due to the absence of potential dilutive ordinary shares Earnings Per Share | Metric | June 30, 2025 (RMB cents) | June 30, 2024 (RMB cents) | | :--- | :--- | :--- | | Basic | 2.02 | 2.36 | | Diluted | 2.02 | 2.36 | - Basic earnings per share is calculated based on profit attributable to owners of the Company of approximately **RMB 17,211,000** and the weighted average number of ordinary shares in issue of approximately **852,612,470** shares[22](index=22&type=chunk) - Diluted earnings per share is consistent with basic earnings per share as there were no potential dilutive ordinary shares during these periods[23](index=23&type=chunk) [Property, Plant and Equipment](index=11&type=section&id=Property%2C%20Plant%20and%20Equipment) For the six months ended June 30, 2025, the Group acquired property, plant and equipment at a cost of RMB 19,983,000 and disposed of/derecognized assets with a carrying amount of RMB 15,000, resulting in a loss of RMB 3,000 - The Group acquired property, plant and equipment at a cost of **RMB 19,983,000** (2024 corresponding period: RMB 87,416,000)[24](index=24&type=chunk) - Disposal/derecognition of property, plant and equipment with a carrying amount of **RMB 15,000** resulted in a loss on disposal/derecognition of **RMB 3,000**[24](index=24&type=chunk) [Trade and Bills Receivables](index=12&type=section&id=Trade%20and%20Bills%20Receivables) The Group's total trade and bills receivables amounted to RMB 359,973 thousand, with credit terms generally ranging from 30 to 90 days, and management regularly reviews overdue balances Aging Analysis of Trade and Bills Receivables | Aging | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Within 3 months | 214,668 | 270,797 | | Over 3 months but within 6 months | 76,944 | 54,281 | | Over 6 months but within 1 year | 65,504 | 27,179 | | Over 1 year | 2,857 | 2,344 | | **Total** | 359,973 | 354,601 | - The Group's credit terms for transactions with customers generally range from **30 to 90 days**, and management regularly reviews overdue balances[25](index=25&type=chunk) [Trade and Bills Payables](index=13&type=section&id=Trade%20and%20Bills%20Payables) As of June 30, 2025, the Group's total trade and bills payables amounted to RMB 280,166 thousand, a decrease from December 31, 2024 Aging Analysis of Trade and Bills Payables | Aging | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Within 3 months | 181,142 | 211,095 | | Over 3 months but within 6 months | 85,979 | 81,308 | | Over 6 months but within 1 year | 10,460 | 6,271 | | Over 1 year | 2,585 | 4,939 | | **Total** | 280,166 | 303,613 | [Interest-Bearing Borrowings](index=13&type=section&id=Interest-Bearing%20Borrowings) For the period ended June 30, 2025, the Group obtained new interest-bearing borrowings of RMB 111,500,000 and repaid RMB 83,925,000 - The Group obtained new interest-bearing borrowings of **RMB 111,500,000** for additional working capital[28](index=28&type=chunk) - The Group repaid interest-bearing borrowings of **RMB 83,925,000**[28](index=28&type=chunk) [Management Discussion and Analysis](index=14&type=section&id=Management%20Discussion%20and%20Analysis) [Business Review](index=14&type=section&id=Business%20Review) As a leader in the environmental special functional new materials industry, the Group's revenue grew by 11.2% during the review period, driven by increased demand for material products despite a decline in building material sales, with continuous R&D investment and numerous patents - The Group is one of the world-renowned leaders in the production of environmentally friendly special functional new materials, with operations in over **100** countries and regions worldwide[29](index=29&type=chunk) - Revenue during the review period was approximately **RMB 591.6 million**, an increase of **11.2%** compared to the same period last year, primarily due to the surging popularity of material products[29](index=29&type=chunk) - As of June 30, 2025, the Group held a total of **150** patents for material products, of which **67** were invention patents[32](index=32&type=chunk) [Overall Business Overview](index=14&type=section&id=Overall%20Business%20Overview) The Group focuses on low-carbon, emission reduction, and technological innovation, providing functional new material products for modern transportation, medical, and construction sectors, with domestic sales remaining the primary revenue source, accounting for approximately 65.4% of total revenue - The Group is committed to leading the development of the industry's environmental protection industrial chain, providing technical consulting and services, and offering Sijia New Materials and Supercore building material products for modern transportation, medical, construction, outdoor leisure, and sports sectors[29](index=29&type=chunk) Revenue by Product and Geographical Region (Business Review) | Category | June 30, 2025 (RMB million) | % of Total Revenue | June 30, 2024 (RMB million) | % of Total Revenue | | :--- | :--- | :--- | :--- | :--- | | **Products** | | | | | | Material products | 552.20 | 93.34 | 482.02 | 90.58 | | Building material products | 39.37 | 6.66 | 50.13 | 9.42 | | **Regions** | | | | | | China | 387.13 | 65.4% | 357.90 | 67.3% | | Others | 204.44 | 34.6% | 174.25 | 32.7% | - Despite severe challenges such as economic downturns in European and American countries and international geopolitical instability, the Group achieved improved sales by developing new products and providing high-quality products[31](index=31&type=chunk) [Material Products](index=14&type=section&id=Material%20Products) Material products business is the Group's primary revenue source, with revenue reaching RMB 552.2 million during the review period, a 14.6% year-on-year increase, accounting for 93.3% of total revenue, mainly driven by demand growth - The Group's main revenue is derived from material products, accounting for approximately **93.3%** of total revenue (June 30, 2024: 90.6%)[30](index=30&type=chunk) - Revenue from material products reached approximately **RMB 552.2 million**, with sales increasing by approximately **14.6%**, primarily due to increased demand for material products[33](index=33&type=chunk) [Building Material Products](index=14&type=section&id=Building%20Material%20Products) Building material products business generated approximately RMB 39.4 million in revenue during the review period, a 21.5% year-on-year decrease, accounting for 6.7% of total revenue - Revenue from building material products was approximately **RMB 39.4 million** (June 30, 2024: RMB 50.1 million), accounting for approximately **6.7%** of total revenue (June 30, 2024: 9.4%), representing a sales decrease of approximately **21.5%**[34](index=34&type=chunk) [Financial Review](index=16&type=section&id=Financial%20Review) The Group's revenue grew by 11.2% during the review period, but gross profit margin slightly declined; increased administrative and finance costs, coupled with reduced other income and gains, led to a 14.6% decrease in profit attributable to owners, with continued R&D investment to maintain competitiveness - The Group's revenue for the six months ended June 30, 2025, was approximately **RMB 591.6 million**, representing a year-on-year increase of **11.2%**[35](index=35&type=chunk) - The decrease in profit for the period was partly due to increased finance costs, resulting in profit attributable to owners of the Company of approximately **RMB 17.2 million**, a year-on-year decrease of **14.6%**[44](index=44&type=chunk) - The Group continues to invest in research and development, believing it is crucial for maintaining long-term competitiveness, retaining existing customers, and enhancing its ability to attract new customers and open new markets[40](index=40&type=chunk) [Revenue (Financial Review)](index=16&type=section&id=Revenue%20(Financial%20Review)) The Group's revenue increased by 11.2% year-on-year to RMB 591.6 million, with material products revenue at RMB 552.2 million and building material products revenue at RMB 39.4 million - The Group's revenue for the six months ended June 30, 2025, was approximately **RMB 591.6 million**, an increase of approximately **RMB 59.4 million**, or **11.2%**, compared to the same period last year[35](index=35&type=chunk) - Revenue from material products was approximately **RMB 552.2 million**, and revenue from building material products was approximately **RMB 39.4 million**[35](index=35&type=chunk) [Gross Profit and Gross Profit Margin](index=16&type=section&id=Gross%20Profit%20and%20Gross%20Profit%20Margin) Gross profit for the review period was approximately RMB 100.9 million, with gross profit margin decreasing from 17.4% in the prior period to 17.0%; material products saw a slight increase in gross margin, while building material products experienced a significant decline Gross Profit and Gross Profit Margin | Metric | June 30, 2025 (RMB million) | June 30, 2024 (RMB million) | | :--- | :--- | :--- | | Gross profit | 100.9 | 92.7 | | Gross profit margin | 17.0% | 17.4% | Gross Profit Margin by Product Type | Product | June 30, 2025 (%) | June 30, 2024 (%) | | :--- | :--- | :--- | | Material products | 17.6 | 17.4 | | Building material products | 9.8 | 17.8 | | **Total** | 17.0 | 17.4 | [Selling and Distribution Costs](index=17&type=section&id=Selling%20and%20Distribution%20Costs) Selling and distribution costs increased by approximately RMB 0.3 million to RMB 23.4 million from RMB 23.2 million in the prior period, while their proportion of revenue decreased from 4.4% to 4.0% - Selling and distribution costs increased by approximately **RMB 0.3 million** to approximately **RMB 23.4 million** from approximately RMB 23.2 million in the prior period[38](index=38&type=chunk) - The proportion of selling and distribution costs to revenue decreased from **4.4%** to **4.0%**[38](index=38&type=chunk) [Administrative Expenses](index=17&type=section&id=Administrative%20Expenses) Administrative expenses increased by approximately RMB 1.5 million or 2.6% to approximately RMB 59.8 million, primarily due to higher staff costs - Administrative expenses increased by approximately **RMB 1.5 million** or **2.6%** to approximately **RMB 59.8 million** from approximately RMB 58.3 million[39](index=39&type=chunk) - The increase in administrative expenses was mainly attributable to higher staff costs[39](index=39&type=chunk) [Research and Development](index=17&type=section&id=Research%20and%20Development) R&D costs were approximately RMB 26.5 million, representing 4.5% of revenue, and the Group will continue to invest in R&D to reduce raw material costs, optimize production processes, increase capacity, and develop high-value-added new materials - Research and development costs were approximately **RMB 26.5 million**, or **4.5%** of revenue (2024 corresponding period: RMB 24.9 million or 4.7% of revenue)[40](index=40&type=chunk) - The Group will continue to allocate resources for R&D activities at its Fuzhou, Shanghai, and Fuqing plants, aiming to reduce raw material costs, optimize production processes, increase capacity, and develop high-value-added new materials[40](index=40&type=chunk) [Finance Costs (Financial Review)](index=18&type=section&id=Finance%20Costs%20(Financial%20Review)) Finance costs increased to approximately RMB 9.2 million, primarily due to no interest expenses being capitalized during the period - Finance costs were approximately **RMB 9.2 million** (2024 corresponding period: RMB 4.4 million)[41](index=41&type=chunk) - The increase in finance costs was primarily due to no interest expenses being capitalized during the period[41](index=41&type=chunk) [Other Income and Gains (Financial Review)](index=18&type=section&id=Other%20Income%20and%20Gains%20(Financial%20Review)) Other income and gains were approximately RMB 11.1 million, a decrease from the prior period, mainly due to reduced government grant income - Other income and gains were approximately **RMB 11.1 million** (2024 corresponding period: approximately RMB 17.6 million)[42](index=42&type=chunk) - The decrease during the period was primarily due to reduced government grant income[42](index=42&type=chunk) [Income Tax](index=18&type=section&id=Income%20Tax) Total income tax expense was approximately RMB 5.3 million, a slight increase mainly due to higher deferred tax deducted from profit or loss during the period - The Group incurred total income tax expense of approximately **RMB 5.3 million** (2024 corresponding period: RMB 5.1 million)[43](index=43&type=chunk) - The slight increase was primarily due to higher deferred tax deducted from profit or loss during the period[43](index=43&type=chunk) [Profit for the Period](index=18&type=section&id=Profit%20for%20the%20Period) Profit attributable to owners of the Company was approximately RMB 17.2 million, with basic earnings per share of RMB 2.02 cents, a decrease from the prior period, partly due to increased finance costs - The Group recorded profit attributable to owners of the Company of approximately **RMB 17.2 million**, or basic earnings per share of **RMB 2.02 cents**[44](index=44&type=chunk) - The decrease in profit for the period was partly due to increased finance costs[44](index=44&type=chunk) [Dividends (Financial Review)](index=18&type=section&id=Dividends%20(Financial%20Review)) The Board has resolved not to declare any interim dividend for the six months ended June 30, 2025 - The Board has resolved not to declare any interim dividend for the six months ended June 30, 2025[45](index=45&type=chunk) [Liquidity and Financial Resources](index=19&type=section&id=Liquidity%20and%20Financial%20Resources) The Group's total equity and cash and cash equivalents increased, net current assets improved, but the net gearing ratio slightly rose; the company has certain capital commitments and some assets are pledged - As of June 30, 2025, total equity was approximately **RMB 844.1 million**, an increase of **2.0%** compared to approximately RMB 827.4 million as of December 31, 2024[46](index=46&type=chunk) - As of June 30, 2025, the Group had cash and cash equivalents of approximately **RMB 110.7 million**, an increase from RMB 83.4 million as of December 31, 2024[48](index=48&type=chunk) - As of June 30, 2025, the Group's net gearing ratio (calculated as total interest-bearing liabilities as a percentage of total assets) was **36.4%**, compared to 35.1% as of December 31, 2024[47](index=47&type=chunk) [Total Equity](index=19&type=section&id=Total%20Equity) As of June 30, 2025, the Group's total equity was approximately RMB 844.1 million, representing a 2.0% increase from December 31, 2024 - As of June 30, 2025, total equity was approximately **RMB 844.1 million**, an increase of **2.0%** compared to approximately RMB 827.4 million as of December 31, 2024[46](index=46&type=chunk) [Financial Position](index=19&type=section&id=Financial%20Position) The Group's net current assets increased from RMB 222.0 million as of December 31, 2024, to RMB 267.0 million as of June 30, 2025, with the net gearing ratio slightly rising to 36.4% Current Assets and Liabilities | Metric | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | | :--- | :--- | :--- | | Total current assets | 767.3 | 780.9 | | Total current liabilities | 500.3 | 559.0 | | Net current assets | 267.0 | 222.0 | - As of June 30, 2025, the Group's net gearing ratio (calculated as total interest-bearing liabilities as a percentage of total assets) was **36.4%**, compared to 35.1% as of December 31, 2024[47](index=47&type=chunk) [Cash and Cash Equivalents](index=19&type=section&id=Cash%20and%20Cash%20Equivalents) As of June 30, 2025, the Group's cash and cash equivalents were approximately RMB 110.7 million, primarily denominated in RMB - As of June 30, 2025, the Group had cash and cash equivalents of approximately **RMB 110.7 million** (December 31, 2024: RMB 83.4 million), with the majority denominated in RMB[48](index=48&type=chunk) [Bank Borrowings](index=19&type=section&id=Bank%20Borrowings) As of June 30, 2025, the Group's interest-bearing bank borrowings were approximately RMB 704.8 million, with new bank loans of approximately RMB 111.5 million obtained during the year - As of June 30, 2025, the Group's interest-bearing bank borrowings were approximately **RMB 704.8 million** (December 31, 2024: RMB 677.3 million)[49](index=49&type=chunk) - New bank loans of approximately **RMB 111.5 million** were obtained during the year[49](index=49&type=chunk) [Contingent Liabilities](index=19&type=section&id=Contingent%20Liabilities) As of June 30, 2025, the Group had no significant contingent liabilities - As of June 30, 2025, the Group had no significant contingent liabilities[50](index=50&type=chunk) [Capital Commitments](index=19&type=section&id=Capital%20Commitments) As of June 30, 2025, the Group's capital commitments were approximately RMB 121.7 million, partly funded by internal resources and partly by bank borrowings - As of June 30, 2025, the Group's capital commitments were approximately **RMB 121.7 million** (December 31, 2024: RMB 111.2 million)[51](index=51&type=chunk) - Capital commitments are partly funded by internal resources and partly by bank borrowings[51](index=51&type=chunk) [Pledge of Assets](index=20&type=section&id=Pledge%20of%20Assets) Portions of the Group's buildings, plant and machinery, construction in progress, leasehold land, investment properties, and bank deposits are pledged to banks as collateral for bank loans and general banking facilities - The Group's buildings, plant and machinery, and construction in progress of approximately **RMB 516.8 million**, leasehold land of approximately **RMB 77.1 million**, investment properties of approximately **RMB 20.3 million**, and bank deposits of approximately **RMB 44.3 million** have been pledged to banks[52](index=52&type=chunk) [Events After Reporting Period](index=20&type=section&id=Events%20After%20Reporting%20Period) No significant events occurred after the reporting period - There were no significant events after the reporting period[53](index=53&type=chunk) [Human Resources](index=20&type=section&id=Human%20Resources) As of June 30, 2025, the Group employed a total of 730 staff and is committed to enhancing employee quality and capabilities through training and competitive remuneration packages - As of June 30, 2025, the Group employed a total of **730** staff (December 31, 2024: 718 staff)[54](index=54&type=chunk) - The Group is committed to improving the quality, capabilities, and skills of all employees, providing job-related training and competitive remuneration packages[54](index=54&type=chunk) [Exchange Rate Fluctuation Risk and Related Hedging](index=20&type=section&id=Exchange%20Rate%20Fluctuation%20Risk%20and%20Related%20Hedging) Some of the Group's high-end products are sold in the European market, facing exchange loss risks from RMB to USD exchange rate fluctuations, but as most business is settled in RMB, no hedging agreements have been entered into - Some of the Group's high-end products are sold in the European market, and are affected by RMB to USD exchange rate fluctuations, leading to certain exchange losses on some foreign trade orders[55](index=55&type=chunk) - As the Group primarily operates in mainland China and most business transactions are settled in RMB, the Group has not entered into any agreements to hedge against foreign exchange risks[55](index=55&type=chunk) [Significant Changes](index=21&type=section&id=Significant%20Changes) Except as disclosed in the report, there have been no significant changes in the Group's business and financial condition - Save as disclosed above, there have been no significant changes in the development or future development of the Group's business and financial condition[56](index=56&type=chunk) [Major Acquisitions or Disposals](index=21&type=section&id=Major%20Acquisitions%20or%20Disposals) For the six months ended June 30, 2025, the Group had no major acquisitions or disposals of subsidiaries, associates, or joint ventures - There were no major acquisitions or disposals of subsidiaries, associates, or joint ventures for the six months ended June 30, 2025[57](index=57&type=chunk) [Future Prospects](index=21&type=section&id=Future%20Prospects) [Outlook](index=21&type=section&id=Outlook) Facing global challenges, the Group will adhere to its development strategy of 'stable operation, green development, continuous innovation, and pursuit of excellence,' benefiting from new development opportunities brought by national policies - The Group actively responds to national policies, establishing and adhering to the development strategy of 'stable operation, green development, continuous innovation, and pursuit of excellence'[58](index=58&type=chunk) - The National Development and Reform Commission has outlined key tasks for the 2025 national economic and social development plan, and the Group's product development is closely related to national economic development, bringing new opportunities for the industry[58](index=58&type=chunk) [Strategic Initiatives](index=21&type=section&id=Strategic%20Initiatives) The Group will continuously upgrade its business and operating models through strategic initiatives focusing on eco-building materials development, new material R&D, business digitalization, comprehensive deployment of seven major development strategies, industrial park construction, safety management, talent cultivation, internal control, intelligent manufacturing, IP protection, corporate culture, and social responsibility - Vigorously develop eco-building material products, further expand overseas markets, and accelerate the layout of the Chinese building materials market to promote the 'Sijia Supercore' brand[58](index=58&type=chunk) - Strengthen the development of new material businesses while actively researching new products, exploring new application areas, and new markets[58](index=58&type=chunk) - Achieve phased goals of business operation digitalization, efficient horizontal/vertical business synergy, integrated business-finance, and 'refined, profitable, standardized' management[59](index=59&type=chunk) - Comprehensively implement seven major development strategies: talent strategy, safety strategy, green strategy, R&D strategy, digitalization strategy, supply chain management strategy, and cultural strategy[59](index=59&type=chunk) - Establish an Intelligent Manufacturing Technology Research Institute to promote the intelligent and automated transformation of production equipment across the Group's subsidiaries[59](index=59&type=chunk) - Actively fulfill corporate responsibility by participating in rural revitalization initiatives and giving back to local communities[59](index=59&type=chunk) [Other Information](index=23&type=section&id=Other%20Information) [Compliance with Laws and Regulations](index=23&type=section&id=Compliance%20with%20Laws%20and%20Regulations) The Group is committed to complying with relevant laws and regulations, allocating financial and human resources to ensure continuous adherence to applicable rules; during the review period, the Group complied with Listing Rules, SFO, and other relevant laws - The Group is committed to complying with relevant laws and regulations, and has allocated financial and human resources to ensure continuous adherence to applicable rules and regulations[60](index=60&type=chunk) - During the review period, the Group complied with the Listing Rules, Securities and Futures Ordinance, Companies Ordinance, Patent Law of the People's Republic of China, Contract Law of the People's Republic of China, Labor Law, and other relevant laws and regulations[60](index=60&type=chunk) [Standard Code for Securities Transactions by Directors](index=23&type=section&id=Standard%20Code%20for%20Securities%20Transactions%20by%20Directors) The Company's directors have confirmed compliance with the Standard Code for Securities Transactions by Directors as set out in Appendix C3 of the Listing Rules for the six months ended June 30, 2025 - Following specific enquiries made to all Directors, all Directors confirmed that they have complied with the required standards set out in the Standard Code for the six months ended June 30, 2025[61](index=61&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Shares](index=23&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company%27s%20Listed%20Shares) Neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed shares during the six months ended June 30, 2025 - Neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed shares during the six months ended June 30, 2025[62](index=62&type=chunk) [Audit Committee](index=23&type=section&id=Audit%20Committee) The Audit Committee has reviewed the Group's unaudited condensed consolidated financial statements for the six months ended June 30, 2025, deeming them compliant with applicable accounting standards, Listing Rules, and all legal requirements - The Audit Committee has reviewed the accounting principles and practices adopted by the Group with management and discussed matters relating to audit, internal control, and financial reporting[63](index=63&type=chunk) - The Audit Committee has reviewed the Group's unaudited condensed consolidated financial statements for the six months ended June 30, 2025, and is of the opinion that the accounts comply with applicable accounting standards, the Listing Rules, and all legal requirements, and that adequate disclosures have been made[63](index=63&type=chunk) [Suspension of Trading in Shares](index=24&type=section&id=Suspension%20of%20Trading%20in%20Shares) The Company's shares have been suspended from trading on the Stock Exchange since February 14, 2013, and will remain suspended until further notice - The Company's shares have been suspended from trading on the Stock Exchange since **February 14, 2013**, and will continue to be suspended until further notice[64](index=64&type=chunk) [Publication of Interim Results Announcement and Interim Report](index=24&type=section&id=Publication%20of%20Interim%20Results%20Announcement%20and%20Interim%20Report) This interim results announcement has been published on the HKEX and Company websites, and the interim report will be dispatched to shareholders and available on the aforementioned websites in due course - This interim results announcement has been published on the HKEX website (http://www.hkexnews.hk) and the Company's website (http://www.chinalongevity.hk)[65](index=65&type=chunk) - The Company's 2025 interim report will be dispatched to the Company's shareholders and available on the aforementioned websites in due course[65](index=65&type=chunk) [Board of Directors](index=24&type=section&id=Board%20of%20Directors) As of the date of this announcement, the Company's Board of Directors comprises three executive directors (Mr. Liu Jun, Mr. Jiang Shisheng, and Mr. Gao Juwen) and three independent non-executive directors (Mr. Liu Zhenbang, Mr. Lu Jiayu, and Ms. Jiang Ping) - As of the date of this announcement, the Company's Board of Directors comprises three executive directors, namely Mr. Liu Jun, Mr. Jiang Shisheng, and Mr. Gao Juwen; and three independent non-executive directors, namely Mr. Liu Zhenbang, Mr. Lu Jiayu, and Ms. Jiang Ping[67](index=67&type=chunk)

[Interim Results Announcement](index=1&type=section&id=Interim%20Results%20Announcement) [Condensed Consolidated Financial Statements](index=2&type=section&id=Condensed%20Consolidated%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements for the six months ended June 30, 2025, reflecting the company's financial performance and position [Condensed Consolidated Statement of Profit or Loss](index=2&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss) For the six months ended June 30, 2025, the company achieved a profit of HKD 650 million, a significant turnaround from a loss of HKD 1.243 billion in the prior period | Metric | H1 2025 (HKD in thousands) | H1 2024 (HKD in thousands) | YoY Change (HKD in thousands) | | :--- | :--- | :--- | :--- | | Turnover | 2,800,794 | 3,028,249 | (227,455) | | Net Investment Income/(Loss) | 1,694,254 | (389,551) | 2,083,805 | | Profit/(Loss) from Operations | 1,260,921 | (907,719) | 2,168,640 | | Profit/(Loss) Before Tax | 955,743 | (1,520,061) | 2,475,804 | | Profit/(Loss) for the Period | 650,000 | (1,242,981) | 1,892,981 | | Attributable to Company's Shareholders | 399,304 | (1,282,100) | 1,681,404 | | Basic and Diluted Earnings/(Loss) Per Share | HKD 0.237 | HKD (0.761) | HKD 1.00 | [Condensed Consolidated Statement of Comprehensive Income](index=3&type=section&id=Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) Total comprehensive income for the six months ended June 30, 2025, was HKD 1.246 billion, a significant improvement from a loss of HKD 971 million in the prior period | Metric | H1 2025 (HKD in thousands) | H1 2024 (HKD in thousands) | YoY Change (HKD in thousands) | | :--- | :--- | :--- | :--- | | Profit/(Loss) for the Period | 650,000 | (1,242,981) | 1,892,981 | | Net Change in Revaluation Reserve of Equity Investments Designated at FVOCI | 584,406 | 429,644 | 154,762 | | Total Comprehensive Income for the Period | 1,246,204 | (970,930) | 2,217,134 | | Attributable to Company's Shareholders | 949,148 | (996,747) | 1,945,895 | [Condensed Consolidated Statement of Financial Position](index=4&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, total assets and net assets increased to HKD 76.885 billion and HKD 33.743 billion respectively, driven by growth in financial assets at fair value | Metric | June 30, 2025 (HKD in thousands) | Dec 31, 2024 (HKD in thousands) | Change (HKD in thousands) | | :--- | :--- | :--- | :--- | | Non-current Assets | 52,261,344 | 52,137,635 | 123,709 | | Current Assets | 24,623,201 | 22,548,370 | 2,074,831 | | Current Liabilities | (12,754,591) | (16,623,000) | 3,868,409 | | Net Current Assets | 11,868,610 | 5,925,370 | 5,943,240 | | Net Assets | 33,743,344 | 32,650,071 | 1,093,273 | | Attributable to Company's Shareholders | 30,580,993 | 29,726,664 | 854,329 | [Condensed Consolidated Statement of Changes in Equity](index=6&type=section&id=Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) Total equity attributable to shareholders increased to HKD 30.581 billion for the six months ended June 30, 2025, driven by profit for the period and investment revaluation gains | Metric | June 30, 2025 (HKD in thousands) | Jan 1, 2024 (HKD in thousands) | Change (HKD in thousands) | | :--- | :--- | :--- | :--- | | Total Attributable to Company's Shareholders | 30,580,993 | 29,726,664 | 854,329 | | Profit for the Period | 399,304 | (1,282,100) | 1,681,404 | | Net Change in Investment Revaluation Reserve | 584,406 | 429,644 | 154,762 | | Dividends Paid | (84,263) | (168,525) | 84,262 | [Condensed Consolidated Statement of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) For the six months ended June 30, 2025, a net cash decrease of HKD 299.76 million was recorded, resulting from financing outflows offsetting operating and investing inflows | Metric | H1 2025 (HKD in thousands) | H1 2024 (HKD in thousands) | YoY Change (HKD in thousands) | | :--- | :--- | :--- | :--- | | Net Cash Inflow from Operating Activities | 170,740 | 606,472 | (435,732) | | Net Cash Inflow from Investing Activities | 211,001 | 55,538 | 155,463 | | Net Cash Outflow from Financing Activities | (681,504) | (367,275) | (314,229) | | Net (Decrease)/Increase in Cash & Cash Equivalents | (299,763) | 294,735 | (594,498) | | Closing Balance of Cash & Cash Equivalents | 8,057,766 | 9,671,204 | (1,613,438) | [Notes to the Unaudited Interim Financial Statements](index=8&type=section&id=Notes%20to%20the%20Unaudited%20Interim%20Financial%20Statements) This section details the basis of preparation, accounting policy changes, revenue composition, operating profit, tax, dividends, EPS, and various financial asset and liability details [Basis of Preparation and Accounting Policies](index=8&type=section&id=Basis%20of%20Preparation%20and%20Accounting%20Policies) The interim financial report is prepared in accordance with HKAS 34 and the Listing Rules of the Hong Kong Stock Exchange, with no material impact from newly adopted HKFRS amendments - The interim financial report complies with the Hong Kong Listing Rules and HKAS 34 requirements[11](index=11&type=chunk) - Amended HKFRS had **no material impact** on the Group's financial statements as the Group had no transactions involving currencies with a lack of exchangeability[13](index=13&type=chunk) [Revenue and Investment Income](index=9&type=section&id=Revenue%20and%20Investment%20Income) Net investment income turned positive, primarily driven by a significant improvement in unrealized investment gains | Revenue Type | H1 2025 (HKD in thousands) | H1 2024 (HKD in thousands) | YoY Change (HKD in thousands) | | :--- | :--- | :--- | :--- | | Revenue from Contracts with Customers | 181,413 | 213,127 | (31,714) | | - Management Fee Income | 52,937 | 80,523 | (27,586) | | - Rental Income from Investment Properties | 100,766 | 107,855 | (7,089) | | Net Investment Income/(Loss) | 1,694,254 | (389,551) | 2,083,805 | | - Interest Income | 235,409 | 283,073 | (47,664) | | - Dividend Income | 678,046 | 544,210 | 133,836 | | - Unrealized Investment Gains/(Losses) | 980,341 | (1,213,094) | 2,193,435 | [Operating Profit, Taxation and Dividends](index=10&type=section&id=Operating%20Profit%2C%20Taxation%20and%20Dividends) Operating profit improved significantly, while tax expenses shifted from a credit to an expense, and the Board declared an interim dividend of HKD 0.05 per share | Metric | H1 2025 (HKD in thousands) | H1 2024 (HKD in thousands) | YoY Change (HKD in thousands) | | :--- | :--- | :--- | :--- | | Depreciation and Amortization | 24,763 | 25,404 | (641) | | Staff Costs | 98,895 | 106,564 | (7,669) | | Tax Expense/(Credit) | 305,743 | (277,080) | 582,823 | | - Deferred Tax | 212,177 | (399,462) | 611,639 | | Interim Dividend (Per Share) | HKD 0.05 | HKD 0.05 | Unchanged | - Effective January 1, 2025, the Group is subject to **Pillar Two income tax** on its profits in Hong Kong and other jurisdictions[20](index=20&type=chunk) [Earnings Per Share](index=11&type=section&id=Earnings%20Per%20Share) For the six months ended June 30, 2025, basic and diluted earnings per share was HKD 0.237, a turnaround from a loss per share of HKD 0.761 in the prior period | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Basic and Diluted Earnings/(Loss) Per Share | HKD 0.237 | HKD (0.761) | | Profit/(Loss) Attributable to Company's Shareholders | HKD 399,304,000 | HKD (1,282,100,000) | | Weighted Average Number of Issued Shares | 1,685,253,712 | 1,685,253,712 | [Investment Assets](index=12&type=section&id=Investment%20Assets) The Group's investment assets include properties, associates, joint ventures, and financial assets at fair value, with no additional impairment loss recognized for Everbright Jiabao | Investment Type | June 30, 2025 (HKD in thousands) | Dec 31, 2024 (HKD in thousands) | | :--- | :--- | :--- | | Investment Properties | 5,410,511 | 5,329,287 | | Investments in Associates | 17,091,562 | 17,017,451 | | Investments in Joint Ventures | 742,854 | 729,803 | | Equity Investments Designated at FVTOCI | 7,157,022 | 6,572,616 | | Financial Assets at FVTPL (Non-current) | 21,371,008 | 22,032,489 | - The recoverable amount of Everbright Jiabao was reassessed, and **no additional or reversed impairment loss** was recognized during the period[27](index=27&type=chunk) - The Group designated its investment in China Everbright Bank as a financial asset at FVTOCI for **long-term strategic holding**[35](index=35&type=chunk) [Current Assets](index=15&type=section&id=Current%20Assets) Current assets primarily consist of financial assets at FVTPL, loans to customers, inventories, and trade receivables, with increased impairment provisions for customer loans | Current Asset Type | June 30, 2025 (HKD in thousands) | Dec 31, 2024 (HKD in thousands) | | :--- | :--- | :--- | | Financial Assets at FVTPL | 6,998,844 | 5,218,394 | | Loans to Customers (Net) | 3,019,937 | 3,059,342 | | Inventories | 1,432,930 | 1,472,807 | | Trade Receivables, Deposits, Prepayments & Others (Net) | 1,579,099 | 1,545,596 | | Trading Securities (Assets) | 3,502,012 | 2,830,106 | | Cash and Cash Equivalents | 8,090,379 | 8,422,125 | | Impairment Provision for Loans to Customers | June 30, 2025 (HKD in thousands) | Dec 31, 2024 (HKD in thousands) | | :--- | :--- | :--- | | Total Impairment Provision | 1,425,041 | 1,102,700 | | Impairment Provision for Trade Receivables | June 30, 2025 (HKD in thousands) | Dec 31, 2024 (HKD in thousands) | | :--- | :--- | :--- | | Total Impairment Provision | 738,262 | 677,724 | [Liabilities](index=19&type=section&id=Liabilities) Liabilities mainly comprise trade payables, bank loans, and bonds payable, with current bonds payable cleared and non-current borrowings increased | Liability Type | June 30, 2025 (HKD in thousands) | Dec 31, 2024 (HKD in thousands) | | :--- | :--- | :--- | | Trading Securities (Liabilities) | (507,505) | (378,368) | | Trade Payables, Deposits Received & Accruals | (2,896,602) | (2,574,238) | | Bank Loans (Current) | (8,268,806) | (9,300,158) | | Bonds Payable (Current) | – | (3,239,610) | | Other Financial Liabilities (Current) | (508,558) | (437,378) | | Bank Loans (Non-current) | (5,251,254) | (4,084,395) | | Bonds Payable (Non-current) | (16,996,525) | (13,498,375) | | Other Financial Liabilities (Non-current) | (6,524,690) | (6,441,964) | - As of June 30, 2025, investment properties of approximately **HKD 2.324 billion** were pledged for bank loans[44](index=44&type=chunk) - Financial liabilities to third-party investors arise from fund management business, for which the Group **does not guarantee principal or returns**[46](index=46&type=chunk) [Equity](index=22&type=section&id=Equity) Share capital remained unchanged, while the total amount of perpetual capital securities increased slightly due to profit attribution | Metric | June 30, 2025 (HKD in thousands) | Dec 31, 2024 (HKD in thousands) | | :--- | :--- | :--- | | Share Capital | 9,618,097 | 9,618,097 | | Perpetual Capital Securities | 2,248,321 | 2,209,630 | - The perpetual medium-term notes have **no maturity date**, with a distribution rate reset every 3 years and distributions deferrable at the company's discretion[49](index=49&type=chunk) [Financial Instrument Disclosures](index=24&type=section&id=Financial%20Instrument%20Disclosures) This section details the maturity analysis, related party transactions, risk management framework, and fair value measurement of financial instruments | Liability Type (June 30, 2025) | Within 3 Months (HKD in thousands) | 3 to 12 Months (HKD in thousands) | 1 to 5 Years (HKD in thousands) | Over 5 Years (HKD in thousands) | Total (HKD in thousands) | | :--- | :--- | :--- | :--- | :--- | :--- | | Bank Loans | (3,164,986) | (5,103,820) | (4,915,710) | (335,544) | (13,520,060) | | Bonds Payable | – | – | (16,996,525) | – | (16,996,525) | - The Group's risk management objective is to **maximize shareholder value** and reduce earnings volatility while maintaining risk at an acceptable level[61](index=61&type=chunk) - The credit risk management framework includes comprehensive policies and limits, independently managed by the **Risk Management and Legal Compliance Department**[63](index=63&type=chunk)[64](index=64&type=chunk) - Fair value is measured using a three-level hierarchy: **Level 1** (quoted prices), **Level 2** (observable inputs), and **Level 3** (significant unobservable inputs)[79](index=79&type=chunk) [Commitments and Contingencies](index=26&type=section&id=Commitments%20and%20Contingencies) The Group has capital and operating lease commitments, outstanding derivative contracts, and is involved in a legal proceeding deemed not to have a material adverse impact | Capital Commitment Type | June 30, 2025 (HKD in thousands) | Dec 31, 2024 (HKD in thousands) | | :--- | :--- | :--- | | Contracted but not provided for | 3,744,750 | 3,004,696 | | Derivative Contracts | June 30, 2025 (HKD in thousands) | Dec 31, 2024 (HKD in thousands) | | :--- | :--- | :--- | | Fair Value of Asset Derivative Contracts | 15,856 | 10,735 | | Fair Value of Liability Derivative Contracts | (35,900) | (28,147) | | Notional Amount of Asset Derivative Contracts | 343,510 | 212,793 | | Notional Amount of Liability Derivative Contracts | 2,172,322 | 1,989,702 | - The company is facing a lawsuit over an equity transfer dispute but believes the allegations are **without legal basis** and will not materially impact operations or solvency[101](index=101&type=chunk)[103](index=103&type=chunk) [Management Discussion and Analysis](index=37&type=section&id=Management%20Discussion%20and%20Analysis) This section provides an overview of the company's business, macroeconomic environment, operational highlights, financial performance, and future outlook [Business Overview](index=37&type=section&id=Business%20Overview) Everbright is a leading cross-border asset management and private equity firm in China, with private equity investment and management as its core business - Everbright is a cross-border asset management firm focusing on **private equity investment and management**[104](index=104&type=chunk) | Metric | June 30, 2025 | | :--- | :--- | | Total Assets Under Management (AUM) | Approx. HKD 119.4 billion | | Number of Funds | 72 | | Book Value of Proprietary Investment Business | Approx. HKD 34.2 billion | | Seed Capital Committed by Everbright | Approx. 28.6% (Approx. HKD 34.1 billion) | [Macroeconomic and Industry Review](index=44&type=section&id=Macroeconomic%20and%20Industry%20Review) In H1 2025, the global economy faced tariff challenges while China's economy remained stable, and the private equity industry showed signs of recovery - The World Bank lowered its 2025 global economic growth forecast to **2.3%**, the lowest non-recession rate since the 2008 financial crisis[109](index=109&type=chunk) - China's GDP grew by **5.3% year-on-year** in H1 2025, demonstrating strong resilience[109](index=109&type=chunk) - Hong Kong's Hang Seng Index rose **21%**, while A-share daily turnover increased by **55%** to RMB 1.35 trillion[111](index=111&type=chunk) - China's private equity industry saw a recovery in fundraising and investment, with capital flowing into **hard-tech sectors**[112](index=112&type=chunk) [Key Business Highlights (H1 2025)](index=46&type=section&id=Key%20Business%20Highlights%20(H1%202025)) The company achieved a strong performance recovery through synergistic fundraising, strategic focus on technology, and optimized operational management - Established two new funds with a total size of **RMB 2.5 billion**[114](index=114&type=chunk) - Achieved total exit proceeds of **HKD 2.018 billion** at the fund and proprietary levels, with an MOIC of approximately **2.78x**[115](index=115&type=chunk) - Invested approximately **HKD 264 million** at the fund level, focusing on strategic emerging industries like AI and biotech[116](index=116&type=chunk) - Issued **RMB 3 billion** in medium-term notes at a record-low interest rate of **2.09%**, reducing overall financing costs by **133 bps**[117](index=117&type=chunk) - Strengthened its ESG framework, appointed a female independent non-executive director, and maintained an **A rating from MSCI ESG**[119](index=119&type=chunk) [Financial Performance Analysis](index=50&type=section&id=Financial%20Performance%20Analysis) The company's total revenue grew substantially, achieving a turnaround to profitability driven by a shift from investment losses to gains [Revenue Analysis](index=50&type=section&id=Revenue%20Analysis) Total revenue reached HKD 2.068 billion, a significant increase driven by a turnaround in investment income from a loss of HKD 390 million to a gain of HKD 1.694 billion | Revenue Type | H1 2025 (HKD hundred million) | H1 2024 (HKD hundred million) | Change | | :--- | :--- | :--- | :--- | | Revenue from Contracts with Customers | 1.81 | 2.13 | (15%) | | Investment Income/(Loss) | 16.94 | (3.90) | N/A | | Dividend Income | 6.79 | 5.44 | 25% | | Unrealized Investment Income/(Loss) | 9.81 | (12.13) | N/A | | Total Revenue | 20.68 | (1.14) | N/A | - Unrealized investment income was **HKD 981 million**, a significant improvement of HKD 2.194 billion from the prior period's loss, due to valuation recovery[124](index=124&type=chunk) - The proprietary investment business generated revenue of **HKD 2.09 billion**, a **757% increase** from HKD 244 million in the prior year[129](index=129&type=chunk) [Profit Analysis](index=53&type=section&id=Profit%20Analysis) Net profit attributable to shareholders was HKD 399 million, marking a successful turnaround to profitability, with the proprietary investment business recording a profit of HKD 1.803 billion | Business Segment | H1 2025 (HKD hundred million) | H1 2024 (HKD hundred million) | Change | | :--- | :--- | :--- | :--- | | Loss from Fund Management Business | (4.62) | (6.39) | 28% | | Profit/(Loss) from Proprietary Investment Business | 18.03 | (0.17) | N/A | | Net Profit/(Loss) Attributable to Company's Shareholders | 3.99 | (12.82) | N/A | - Profit from financial investments turned from a loss of HKD 409 million to a **profit of HKD 1.16 billion**[130](index=130&type=chunk) [Dividends](index=54&type=section&id=Dividends) The Board declared an interim dividend of HKD 0.05 per share for 2025, consistent with the prior year, to share operating results with shareholders | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Earnings/(Loss) Per Share | HKD 0.24 | HKD (0.76) | | Interim Dividend Per Share | HKD 0.05 | HKD 0.05 | [Key Financial Ratios](index=54&type=section&id=Key%20Financial%20Ratios) As of June 2025, the interest-bearing debt ratio and gearing ratio decreased, while the current ratio improved significantly, reflecting successful deleveraging and ample liquidity | Key Financial Data | June 30, 2025 | Dec 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Interest-bearing Debt Ratio | 90% | 92% | -2 p.p. | | Net Interest-bearing Debt Ratio | 86.3% | 86.8% | -0.5 p.p. | | Gearing Ratio | 56.1% | 56.3% | -0.2 p.p. | | Current Ratio | 193.1% | 135.6% | +57.5 p.p. | - Operating costs in H1 2025 were **HKD 367 million**, a **10.3% year-on-year decrease**, reflecting effective cost control[134](index=134&type=chunk) - As of June 2025, available cash reserves stood at **HKD 1.382 billion**, maintaining sufficient liquidity[135](index=135&type=chunk) [Operating Performance Analysis](index=56&type=section&id=Operating%20Performance%20Analysis) This section analyzes the performance of the fund management and proprietary investment businesses, highlighting AUM growth, new funds, successful exits, and diversified returns [Fund Management Business](index=56&type=section&id=Fund%20Management%20Business) As of June 30, 2025, the fund management business had an AUM of approximately HKD 119.4 billion, with two new funds established and new capital raised | Metric | June 30, 2025 | | :--- | :--- | | Total Assets Under Management | Approx. HKD 119.4 billion | | Number of New Funds | 2 | | New Capital Raised | Approx. HKD 2.741 billion | | External Investor Share | 74% | | RMB Funds Share | 82% | | Number of Primary Market Funds | 43 | | Number of Secondary Market Funds & Accounts | 20 | | Number of Fund of Funds Products | 9 | - The fund management segment invested approximately **HKD 264 million** and realized cash returns of about **HKD 1.777 billion** from 46 exits[138](index=138&type=chunk) - The Everbright Convertible Bond Opportunity Fund won multiple awards, including **"Second Place in 2024 Fixed Income Convertible Bond Fund Performance"** by BarclayHedge[143](index=143&type=chunk) - The Fund of Funds team manages 9 funds with a total AUM of approximately **HKD 26.6 billion**, with 175 portfolio companies having completed IPOs[144](index=144&type=chunk)[145](index=145&type=chunk) - Everbright Jiabao, through the EBA Investments platform, manages 49 projects with an AUM of approximately **HKD 51.5 billion**[146](index=146&type=chunk) [Proprietary Investment Business](index=60&type=section&id=Proprietary%20Investment%20Business) The proprietary investment business, with a total book value of approximately HKD 34.2 billion, includes strategic investments, financial investments, and cornerstone investments | Proprietary Capital Scale | June 30, 2025 (HKD hundred million) | Dec 31, 2024 (HKD hundred million) | | :--- | :--- | :--- | | Strategic Investments | 48 | 50 | | Financial Investments | 87 | 71 | | Cornerstone Investments | 207 | 198 | | Total | 342 | 319 | - CALC maintains a fleet of **181 aircraft** leased to 41 airlines across 22 countries, showing stable core business development[150](index=150&type=chunk) - Everbright Senior Healthcare manages **29,300 beds** with an increased occupancy rate, focusing on a smart elderly care strategy[151](index=151&type=chunk) - Terminus Group continues to integrate AI technology with various industries, launching its Space Intelligence All-in-One Machine[152](index=152&type=chunk) - Cornerstone investments in Everbright Securities and Everbright Bank account for **61.4% of the Group's net assets**[154](index=154&type=chunk) - The Group's share of profit from its associate, Everbright Securities, increased by **27.2%** year-on-year to HKD 290 million[155](index=155&type=chunk) - Everbright Bank's income contribution to the Group rose by **8.0%** year-on-year to HKD 323 million[156](index=156&type=chunk) [Outlook](index=64&type=section&id=Outlook) Looking ahead, the company will seize opportunities from China's economic resilience to optimize its strategy across fundraising, investment, management, and exits - China's economy is expected to maintain its resilience in the second half of the year, with the private equity industry poised for high-quality development[157](index=157&type=chunk)[158](index=158&type=chunk) - The company will steadily launch new funds and actively participate in government-guided fund selections to raise **long-term patient capital**[159](index=159&type=chunk) - It will increase exploration of venture capital funds, focusing on early and growth-stage technology companies with **disruptive technologies**[159](index=159&type=chunk) - The company will enhance exits through diverse channels like **IPO, M&A, and S-transactions** while maintaining strategic patience[159](index=159&type=chunk) [Financial Position and Resources](index=65&type=section&id=Financial%20Position%20and%20Resources) As of June 30, 2025, the Group's total assets and net assets increased, along with equity attributable to shareholders, while maintaining sufficient cash reserves | Metric | June 30, 2025 (HKD hundred million) | Dec 31, 2024 (HKD hundred million) | | :--- | :--- | :--- | | Total Assets | 768.85 | 746.86 | | Net Assets | 337.43 | 326.50 | | Equity Attributable to Company's Shareholders | 305.81 | 297.27 | | Equity Per Share Attributable to Company's Shareholders | 18.15 | 17.64 | | Cash and Bank Balances | 80.90 | 84.22 | [Indebtedness and Asset Pledges](index=66&type=section&id=Indebtedness%20and%20Asset%20Pledges) The Group's interest-bearing debt increased slightly, with a debt structure dominated by RMB and HKD and a high proportion of fixed-rate borrowings | Debt Metric | June 30, 2025 (HKD hundred million) | Dec 31, 2024 (HKD hundred million) | | :--- | :--- | :--- | | Interest-bearing Debt | 305.17 | 301.23 | | Bank Facilities | 184.44 | 214.15 | | Unutilized Bank Facilities | 49.24 | 80.30 | | Total Outstanding Bank Loans | 135.20 | 133.85 | | Outstanding Corporate Bonds Issued | 169.97 | 167.38 | - Of the interest-bearing debt, **69% is in RMB** and 31% is in HKD; approximately **67% is fixed-rate**[163](index=163&type=chunk) - Investment properties of approximately **HKD 2.324 billion** and trading securities of **HKD 1.665 billion** were pledged as collateral[164](index=164&type=chunk) [Employees and Anshi Yida](index=67&type=section&id=Employees%20and%20Anshi%20Yida) The Group employs 242 full-time staff with a competitive remuneration system, while its Anshi Yida platform focuses on urban renewal real estate investments in key Chinese cities - As of June 30, 2025, the Group had **242 full-time employees** at its headquarters and wholly-owned subsidiaries[165](index=165&type=chunk) - Anshi Yida's key investment projects include the **Beijing Zhongguancun Project** and the **Chongqing Chaotianmen Project**[166](index=166&type=chunk) [Principal Risks and Uncertainties](index=67&type=section&id=Principal%20Risks%20and%20Uncertainties) The Group continues to implement its risk management system to effectively control credit, liquidity, interest rate, currency, and price risks - The Group's principal risks, including **credit, liquidity, interest rate, currency, and price risks**, are effectively managed[167](index=167&type=chunk) [Corporate Governance and Other Information](index=67&type=section&id=Corporate%20Governance%20and%20Other%20Information) The Board declared an interim dividend and confirmed compliance with corporate governance and securities trading codes, with the interim report reviewed by the audit committee - The Board declared an interim dividend of **HKD 0.05 per share** for the six months ended June 30, 2025[168](index=168&type=chunk) - The company has complied with all code provisions of the **Corporate Governance Code** in Appendix C1 of the HKEX Listing Rules during the reporting period[171](index=171&type=chunk) - The **Audit and Risk Management Committee** has reviewed the Group's unaudited interim financial report for the six months ended June 30, 2025[173](index=173&type=chunk)

Report Overview This section describes the GEM market's high-risk nature for small and medium-sized companies and clarifies the Exchange's non-responsibility for the report's content [GEM Characteristics and Disclaimer](index=2&type=section&id=GEM%20Characteristics%20and%20Disclaimer) This section outlines the Hong Kong Stock Exchange's GEM market as a listing platform for small and medium-sized companies, which typically carry higher investment risks and market volatility, and explicitly states that the Exchange is not responsible for the accuracy or completeness of this report's content - The GEM market is positioned as a listing platform for small and medium-sized companies, entailing **higher investment risks**[3](index=3&type=chunk) - GEM securities may be subject to **greater market volatility risks**, and high liquidity is not guaranteed[3](index=3&type=chunk) - Hong Kong Exchanges and Clearing Limited and the Stock Exchange are **not responsible** for the content of this report[3](index=3&type=chunk) Six-Month Period Summary This section provides a concise financial overview for the six months ended June 30, 2025, highlighting a significant revenue decrease, a shift from profit to loss, and no interim dividend recommendation [Financial Summary](index=3&type=section&id=Financial%20Summary) For the six months ended June 30, 2025, the Group's revenue significantly decreased by 62.8% year-on-year to HKD 45.0 million, turning a profit from the same period last year into a loss of HKD 30.0 million, with a basic loss per share of 1.21 HK cents. The Board does not recommend an interim dividend 2025 H1 Key Financial Indicators Comparison (as of June 30) | Indicator | 2025 (HKD thousands) | 2024 (HKD thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 45,000 | 120,737 | -62.8% | | Gross Profit | 16,500 | 37,700 | -56.2% | | (Loss)/Profit Attributable to Owners of the Company | (30,000) | 53,200 | Shifted from profit to loss | | Basic (Loss)/Earnings Per Share | (1.21) HK cents | 2.14 HK cents | Shifted from profit to loss | | Total Equity Attributable to Owners of the Company (Period-end) | 1,611,000 | 1,639,000 (Dec 31, 2024) | -1.7% | | Net Asset Value Per Share (Period-end) | 0.65 HKD | 0.66 HKD (Dec 31, 2024) | -1.5% | - The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025[7](index=7&type=chunk) Interim Results This section presents the condensed consolidated interim financial statements, detailing the group's financial performance, position, equity changes, and cash flows for the six months ended June 30, 2025 [Condensed Consolidated Statement of Comprehensive Income](index=4&type=section&id=Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) For the six months ended June 30, 2025, the Group's revenue significantly decreased by 62.8% year-on-year to HKD 44,974 thousand, and gross profit decreased by 56.1% to HKD 16,546 thousand. Due to a significant reduction in other income and net gains, and a fair value change in investment properties from profit to loss, the Group recorded a loss of HKD 30,070 thousand, compared to a profit of HKD 52,489 thousand in the same period last year Condensed Consolidated Statement of Comprehensive Income Key Data (for the six months ended June 30) | Indicator | 2025 (HKD thousands) | 2024 (HKD thousands) | Year-on-year Change | | :--- | :--- | :--- | :--- | | Revenue | 44,974 | 120,737 | -62.8% | | Cost of Sales | (28,428) | (83,080) | -65.8% | | Gross Profit | 16,546 | 37,657 | -56.1% | | Other Income and Net Gains | 11,680 | 76,863 | -84.8% | | Net Change in Fair Value of Investment Properties | (5,738) | 574 | Shifted from profit to loss | | Operating (Loss)/Profit | (28,285) | 53,316 | Shifted from profit to loss | | (Loss)/Profit Before Tax | (29,894) | 52,641 | Shifted from profit to loss | | (Loss)/Profit for the Period | (30,070) | 52,489 | Shifted from profit to loss | | (Loss)/Profit Attributable to Owners of the Company | (29,992) | 53,157 | Shifted from profit to loss | | Basic (Loss)/Earnings Per Share | (1.21) HK cents | 2.14 HK cents | Shifted from profit to loss | [Condensed Consolidated Statement of Financial Position](index=6&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the Group's total assets less current liabilities amounted to HKD 1,653,133 thousand, a slight decrease from December 31, 2024. Non-current assets remained stable, while a significant reduction in cryptocurrencies within current assets led to a decrease in total current assets. Net assets slightly decreased to HKD 1,607,370 thousand Condensed Consolidated Statement of Financial Position Key Data (as of June 30) | Indicator | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Non-current Assets | 519,675 | 516,739 | +0.6% | | Current Assets | 550,669 | 584,971 | -5.9% | | Assets Classified as Held for Sale | 850,200 | 850,200 | 0% | | Current Liabilities | 267,411 | 270,408 | -1.1% | | Net Current Assets | 1,133,458 | 1,164,763 | -2.7% | | Total Assets Less Current Liabilities | 1,653,133 | 1,681,502 | -1.7% | | Net Assets | 1,607,370 | 1,635,419 | -1.7% | | Equity Attributable to Owners of the Company | 1,611,041 | 1,639,012 | -1.7% | - Cryptocurrency holdings decreased by **27.3%**, from HKD 140,539 thousand as of December 31, 2024, to **HKD 102,126 thousand** as of June 30, 2025[12](index=12&type=chunk) [Condensed Consolidated Statement of Changes in Equity](index=8&type=section&id=Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) For the six months ended June 30, 2025, total equity attributable to owners of the Company decreased from HKD 1,639,012 thousand at the beginning of the period to HKD 1,611,041 thousand at the end, primarily due to a loss of HKD 29,992 thousand recorded during the period, partially offset by foreign exchange translation gains from overseas operations of HKD 2,021 thousand Statement of Changes in Equity (for the six months ended June 30) | Indicator | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | Equity Attributable to Owners of the Company at Beginning of Period | 1,639,012 | 1,705,704 | | (Loss)/Profit for the Period | (29,992) | 53,157 | | Exchange Differences on Translation of Overseas Operations | 2,021 | (1,694) | | Equity Attributable to Owners of the Company at End of Period | 1,611,041 | 1,757,167 | [Condensed Consolidated Statement of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) For the six months ended June 30, 2025, the Group's net cash from operating activities turned from a net outflow in the prior year to a net inflow of HKD 539 thousand, but net cash outflow from investing activities increased to HKD 15,202 thousand, while net cash outflow from financing activities decreased. Cash and cash equivalents at the end of the period significantly decreased to HKD 18,512 thousand Condensed Consolidated Statement of Cash Flows Key Data (for the six months ended June 30) | Indicator | 2025 (HKD thousands) | 2024 (HKD thousands) | Year-on-year Change | | :--- | :--- | :--- | :--- | | Net Cash Generated From/(Used In) Operating Activities | 539 | (22,651) | Shifted from outflow to inflow | | Net Cash Used In Investing Activities | (15,202) | (6,846) | Outflow increased by 122.1% | | Net Cash Used In Financing Activities | (1,519) | (2,012) | Outflow decreased by 24.5% | | Net Decrease in Cash and Cash Equivalents | (16,182) | (31,509) | Decrease narrowed | | Cash and Cash Equivalents at End of Period | 18,512 | 50,284 | -63.2% | - The increase in cash outflow from investing activities was primarily due to increased purchases of property, plant and equipment, investment properties, interests in an associate, and prepayments for construction works[19](index=19&type=chunk) Notes to the Unaudited Condensed Consolidated Interim Financial Statements This section provides detailed notes to the unaudited condensed consolidated interim financial statements, covering general information, basis of preparation, fair value measurements, segment information, and specific financial item breakdowns [General Information](index=11&type=section&id=General%20Information) Yuxing InfoTech Investment Holdings Limited is an exempted company incorporated in Bermuda and listed on the GEM of the Hong Kong Stock Exchange, primarily engaged in investment holding, with its subsidiaries mainly involved in information appliances, Internet Data Center (IDC), investment, and leasing businesses - The company's principal businesses include **information appliances, Internet Data Center (IDC), investment, and leasing businesses**[20](index=20&type=chunk) [Basis of Preparation](index=11&type=section&id=Basis%20of%20Preparation) These financial statements are prepared in accordance with Hong Kong Accounting Standard 34 and the GEM Listing Rules, are unaudited but have been reviewed by the Audit Committee. The basis of preparation is historical cost, except for investment properties and financial assets at fair value through profit or loss, which are measured at fair value. The adoption of new/revised Hong Kong Financial Reporting Standards and Hong Kong Accounting Standards during the period did not result in significant changes - The financial statements are prepared in accordance with **Hong Kong Accounting Standard 34** and the **GEM Listing Rules**, are unaudited but reviewed by the Audit Committee[21](index=21&type=chunk) - The basis of preparation is **historical cost**, with investment properties and FVPL financial assets measured at fair value[21](index=21&type=chunk) - The adoption of new/revised Hong Kong Financial Reporting Standards and Hong Kong Accounting Standards during the period did not result in **significant changes** to the Group's accounting policies and reported amounts[22](index=22&type=chunk)[23](index=23&type=chunk) [Fair Value Measurement](index=12&type=section&id=Fair%20Value%20Measurement) The Group's fair value measurement of financial instruments is categorized into three levels, with Level 3 (unobservable inputs) financial assets at fair value through profit or loss recording a net change loss of HKD 2,194 thousand in the first half of 2025, compared to a profit of HKD 18,606 thousand in the same period last year. Valuations are performed by independent professional valuers and reviewed by the directors - Fair value measurements are categorized into three levels, with Level 3 (unobservable inputs) financial assets valued by **independent professional valuers** and reviewed by the directors[25](index=25&type=chunk)[27](index=27&type=chunk) Changes in Level 3 Fair Value Measured Financial Assets (for the six months ended June 30) | Indicator | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | Beginning of Period | 166,932 | 121,528 | | Net Fair Value Change Recognized in Profit or Loss | (2,194) | 18,606 | | End of Period | 164,738 | 140,134 | - For the six months ended June 30, 2025 and 2024, there were **no transfers** between Level 1 and Level 2, or into or out of Level 3 fair value measurements[29](index=29&type=chunk) [Segment Information](index=15&type=section&id=Segment%20Information) The Group's businesses are divided into information appliances, IDC, investment, leasing, and other businesses. In the first half of 2025, revenue from both information appliances and IDC businesses significantly decreased, leading to the IDC segment turning from profit to loss, and the leasing business also recording a loss. Other income and net gains from investment business also significantly decreased. Geographically, revenue from Australia, the US, and China markets all saw substantial declines - The Group's reportable segments include **information appliances, IDC, investment, leasing, and other businesses**[37](index=37&type=chunk) Segment Revenue and Results Comparison (for the six months ended June 30) | Segment | 2025 Revenue (HKD thousands) | 2024 Revenue (HKD thousands) | Revenue Change (%) | 2025 Results (HKD thousands) | 2024 Results (HKD thousands) | Results Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Information Appliances | 31,860 | 93,337 | -65.9% | 4,133 | 5,083 | -18.7% | | IDC | 13,114 | 27,400 | -52.1% | (250) | 13,280 | Shifted from profit to loss | | Investment | – | – | N/A | 3,009 | 57,595 | -94.8% | | Leasing | – | – | N/A | (1,870) | 6,152 | Shifted from profit to loss | | Other Businesses | – | – | N/A | (12,308) | (6,820) | Loss widened | | **Total Revenue** | **44,974** | **120,737** | **-62.8%** | **(7,286)** | **75,290** | Shifted from profit to loss | Revenue by Geographical Region Comparison (for the six months ended June 30) | Region | 2025 (HKD thousands) | 2024 (HKD thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Australia | 19,643 | 63,338 | -69.1% | | United States | 3,314 | 17,400 | -81.0% | | China | 7,940 | 19,557 | -59.4% | | Hong Kong | 10,534 | 13,652 | -22.8% | | Other Overseas Markets | 3,543 | 6,790 | -47.9% | | **Total** | **44,974** | **120,737** | **-62.8%** | [Revenue, Other Income and Net Gains](index=20&type=section&id=Revenue%2C%20Other%20Income%20and%20Net%20Gains) The Group's total revenue decreased by 62.8% year-on-year, primarily due to reduced sales of information appliance goods and IDC property and facility rental income. Other income and net gains also significantly decreased by 84.8%, mainly impacted by reduced gains from the disposal of cryptocurrencies Revenue Composition Comparison (for the six months ended June 30) | Revenue Source | 2025 (HKD thousands) | 2024 (HKD thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Sales of Information Appliance Goods | 26,539 | 87,211 | -69.6% | | Information Appliance Support Service Income | 5,321 | 6,126 | -13.2% | | IDC Property and Facility Rental Income | 13,114 | 27,400 | -52.1% | | **Total Revenue** | **44,974** | **120,737** | **-62.8%** | Other Income and Net Gains Composition Comparison (for the six months ended June 30) | Other Income and Net Gains Source | 2025 (HKD thousands) | 2024 (HKD thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Rental Income from Investment Properties | 6,508 | 8,431 | -22.8% | | Interest Income from Bank Deposits | 86 | 380 | -77.4% | | Interest Income from Loans Receivable | 305 | 1,097 | -72.2% | | Net Foreign Exchange Gains | 498 | 58 | +758.6% | | Net Fair Value Gains on FVPL Financial Assets | 1,177 | 11,574 | -89.8% | | Gains on Disposal of Cryptocurrencies | 2,253 | 53,855 | -95.8% | | **Total Other Income and Net Gains** | **11,680** | **76,863** | **-84.8%** | [Finance Costs](index=21&type=section&id=Finance%20Costs) For the six months ended June 30, 2025, the Group's finance costs decreased by 40.4% year-on-year to HKD 171 thousand, primarily due to reduced borrowing costs for bank and other loans Finance Costs Comparison (for the six months ended June 30) | Finance Cost Source | 2025 (HKD thousands) | 2024 (HKD thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Borrowing Costs for Bank and Other Loans | 13 | 213 | -93.9% | | Amortization of Interest Expense on Lease Liabilities | 158 | 75 | +110.7% | | **Total Finance Costs** | **171** | **288** | **-40.6%** | [(Loss)/Profit Before Tax](index=21&type=section&id=%28Loss%29%2FProfit%20Before%20Tax) For the six months ended June 30, 2025, the Group recorded a loss before tax of HKD 29,894 thousand, primarily impacted by a significant reduction in depreciation of property, plant and equipment, with no depreciation from cryptocurrency mining machines during the period (Loss)/Profit Before Tax Calculation Items (for the six months ended June 30) | Item | 2025 (HKD thousands) | 2024 (HKD thousands) | Change | | :--- | :--- | :--- | :--- | | Net Reversal of Inventory Write-downs | (116) | (388) | Decrease | | Depreciation of Right-of-Use Assets | 3,070 | 3,142 | Decrease | | Depreciation of Property, Plant and Equipment | 6,032 | 23,075 | Significant decrease | | – Allocated to Cryptocurrency Costs | – | (10,402) | No longer incurred | - Depreciation of property, plant and equipment significantly decreased, mainly because cryptocurrency mining machines were **fully impaired in 2024**, and no depreciation was incurred during the period[51](index=51&type=chunk)[110](index=110&type=chunk) [Income Tax Expense](index=22&type=section&id=Income%20Tax%20Expense) For the six months ended June 30, 2025, the Group's income tax expense was HKD 176 thousand, primarily for China corporate income tax. No taxable profits were generated by Hong Kong, US, and German operations, thus no related tax provisions were made. Certain Chinese subsidiaries enjoy preferential tax rates for small low-profit enterprises Income Tax Expense Comparison (for the six months ended June 30) | Tax Source | 2025 (HKD thousands) | 2024 (HKD thousands) | Change (%) | | :--- | :--- | :--- | :--- | | China Corporate Income Tax | 176 | 152 | +15.8% | - Hong Kong, US, and German operations had **no taxable profits**, thus no related tax provisions were made[52](index=52&type=chunk)[53](index=53&type=chunk) - Certain Chinese subsidiaries are designated as "small low-profit enterprises" and enjoy a **preferential corporate income tax rate of 5%**[52](index=52&type=chunk) [Dividends](index=23&type=section&id=Dividends) The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025 - The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025[55](index=55&type=chunk) [(Loss)/Earnings Per Share](index=23&type=section&id=%28Loss%29%2FEarnings%20Per%20Share) For the six months ended June 30, 2025, the Group's basic and diluted loss per share were both 1.21 HK cents, compared to earnings per share of 2.14 HK cents in the same period last year, primarily due to the loss attributable to owners of the Company. There were no potential dilutive ordinary shares during the period (Loss)/Earnings Per Share Comparison (for the six months ended June 30) | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | (Loss)/Profit Attributable to Owners of the Company (HKD thousands) | (29,992) | 53,157 | | Weighted Average Number of Ordinary Shares in Issue (thousand shares) | 2,487,705 | 2,487,705 | | Basic (Loss)/Earnings Per Share | (1.21) HK cents | 2.14 HK cents | | Diluted (Loss)/Earnings Per Share | (1.21) HK cents | 2.14 HK cents | - As there were no potential dilutive ordinary shares during the period, the diluted (loss)/earnings per share is **consistent with the basic (loss)/earnings per share**[57](index=57&type=chunk) [Investment Properties](index=24&type=section&id=Investment%20Properties) As of June 30, 2025, the carrying amount of the Group's investment properties decreased to HKD 129,375 thousand, primarily due to a net fair value change loss of HKD 5,738 thousand recognized during the period, partially offset by an increase in exchange adjustments Investment Properties Movement (as of June 30) | Indicator | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | | :--- | :--- | :--- | | Beginning of Period | 133,132 | 131,870 | | Net Fair Value Change | (5,738) | 2,850 | | Exchange Adjustments | 1,981 | (2,861) | | End of Period | 129,375 | 133,132 | [Trade and Other Receivables and Prepayments for Construction Works](index=24&type=section&id=Trade%20and%20Other%20Receivables%20and%20Prepayments%20for%20Construction%20Works) As of June 30, 2025, total trade and other receivables and prepayments for construction works increased to HKD 408,182 thousand. Trade receivables with an aging over 90 days accounted for the highest proportion, and prepayments included deposits for cryptocurrency mining machine purchases, some of which have been terminated and are awaiting refund, while others have extended delivery dates Trade and Other Receivables and Prepayments for Construction Works Composition (as of June 30) | Item | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Trade Receivables (net of loss allowance) | 43,992 | 40,972 | +7.4% | | Earnest Money Paid for Intangible Assets | 62,500 | 61,555 | +1.5% | | Other Receivables (net of loss allowance) | 21,405 | 10,171 | +110.4% | | Prepayments and Deposits (net of loss allowance) | 263,693 | 266,708 | -1.1% | | Prepayments for Construction Works | 16,335 | 12,626 | +29.4% | | **Total** | **408,182** | **392,289** | **+4.0%** | Trade Receivables Aging Analysis (as of June 30) | Aging | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | | :--- | :--- | :--- | | 0–30 days | 10,482 | 5,019 | | 31–60 days | 3,293 | 5,166 | | 61–90 days | 2,181 | 4,179 | | Over 90 days | 28,036 | 26,608 | - A portion of the transaction deposits for cryptocurrency mining machine purchases has been terminated, with **RMB 49,977,000 (approximately HKD 54,799,000) to be refunded by December 31, 2025**; the delivery of mining machines for the remaining prepayment of RMB 140,105,000 (approximately HKD 153,624,000) has been **extended to December 2025**[61](index=61&type=chunk) [Financial Assets at Fair Value Through Profit or Loss](index=26&type=section&id=Financial%20Assets%20at%20Fair%20Value%20Through%20Profit%20or%20Loss) As of June 30, 2025, the Group's total financial assets at fair value through profit or loss increased to HKD 223,453 thousand, primarily comprising unlisted equity securities. New additions during the period included money market funds and private equity funds FVPL Financial Assets Composition (as of June 30) | Item | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Equity Securities Listed in Hong Kong | 26,752 | 25,716 | +4.0% | | Equity Securities Listed Outside Hong Kong | 493 | 418 | +17.9% | | Money Market Funds | 4,134 | – | New addition | | Private Equity Funds | 1,849 | – | New addition | | Unlisted Equity Securities | 190,225 | 190,454 | -0.1% | | **Total** | **223,453** | **216,588** | **+3.2%** | - Unlisted equity securities include investments in companies incorporated in the Cayman Islands and Hong Kong, as well as securities traded on the **US over-the-counter market**[64](index=64&type=chunk) [Investment Portfolio](index=28&type=section&id=Investment%20Portfolio) The Group's top ten investment portfolio primarily includes listed and unlisted equity securities, as well as money market funds and private equity funds. As of June 30, 2025, the total investment portfolio accounted for 99% of the Group's total investments, with several investments recording unrealized losses or reduced net gains during the period. Money market funds aim to achieve absolute returns exceeding their benchmarks while ensuring capital security Top Ten Investment Portfolio Overview (as of June 30, 2025) | Name of Investee Company | Fair Value (HKD thousands) | Cumulative Unrealized Holding Gains/(Losses) from Acquisition Date to June 30, 2025 (HKD thousands) | Net Gains/(Losses) for the Six Months Ended June 30, 2025 (HKD thousands) | | :--- | :--- | :--- | :--- | | China Hengtian Lixin International Co., Ltd. | 353 | (2,276) | 12 | | Honbridge Holdings Limited | 25,496 | (32,899) | 865 | | Alibaba Group Holding Limited (American Depositary Shares) | 824 | 111 | 75 | | Lufax Holding Ltd (American Depositary Shares) | 493 | (8,934) | 206 | | Industrial and Commercial Bank of China Limited Money Market Fund | 4,134 | – | – | | GoldenFuture Capital Investment Ltd. Private Equity Fund | 1,849 | 289 | 289 | | APAL Holdings Limited (Unlisted) | 75,717 | (2,283) | (2,194) | | Didi Global Inc. (Unlisted) | 25,487 | 12,758 | 1,965 | | HK Zxoud Limited (Unlisted) | 2,394 | (9,406) | – | | Profound View Group (Unlisted) | 86,627 | 20,627 | – | - The investment portfolio accounts for **99% of the Group's total investments**, with the remainder comprising multiple investments each representing less than 1% of total assets[69](index=69&type=chunk)[75](index=75&type=chunk) - The money market fund managed by Industrial and Commercial Bank of China Limited aims to achieve **absolute returns exceeding its benchmark** while ensuring capital security, with a daily annualized return rate of **1.25% to 1.50%**[77](index=77&type=chunk) [Cryptocurrencies](index=33&type=section&id=Cryptocurrencies) As of June 30, 2025, the Group's total cryptocurrency holdings amounted to HKD 102,126 thousand, a 27.3% decrease from December 31, 2024, primarily due to reduced Bitcoin and Ethereum holdings, while Tether USD holdings significantly increased. No write-downs or reversals of write-downs for cryptocurrencies were recognized during the period Cryptocurrency Holdings Comparison (as of June 30) | Cryptocurrency Type | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Bitcoin | 40,548 | 105,092 | -61.4% | | Ethereum | 16,676 | 35,359 | -52.8% | | Tether USD | 44,894 | 80 | +56017.5% | | USD Coin | 8 | 8 | 0% | | **Total** | **102,126** | **140,539** | **-27.3%** | - Cryptocurrencies are stated at the **lower of cost and net realizable value**, with no write-downs or reversals of write-downs recognized during the period[80](index=80&type=chunk) [Loans Receivable](index=33&type=section&id=Loans%20Receivable) As of June 30, 2025, the Group's total loans receivable amounted to HKD 29,179 thousand, with several loans overdue and borrowers failing to repay interest or principal, leading to significant loss allowances. Repayment dates for some loans have been extended Loans Receivable Total and Loss Allowance (as of June 30) | Indicator | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | | :--- | :--- | :--- | | Loans to Third Parties | 248,076 | 247,978 | | Less: Loss Allowance | (218,897) | (218,897) | | **Net Loans Receivable** | **29,179** | **29,081** | - Multiple loans are **overdue**, with borrowers failing to repay interest or principal, and the Group has issued demand letters to borrowers and guarantors and is in negotiations[82](index=82&type=chunk)[83](index=83&type=chunk)[84](index=84&type=chunk)[85](index=85&type=chunk)[86](index=86&type=chunk)[87](index=87&type=chunk)[88](index=88&type=chunk) - One loan of **HKD 14,000,000** has been partially repaid, with the remaining balance's repayment date extended to October 2025[87](index=87&type=chunk) [Assets Classified as Held for Sale](index=37&type=section&id=Assets%20Classified%20as%20Held%20for%20Sale) The Group's IDC land and property in San Jose, USA, are classified as assets held for sale, valued at HKD 850,200 thousand. The contingency date for the disposal has been extended to September 2, 2025, and is expected to be completed within 2025 - The IDC land and property in San Jose, USA, are classified as **assets held for sale**, valued at **HKD 850,200 thousand**[89](index=89&type=chunk)[90](index=90&type=chunk) - The contingency date for the disposal of the US IDC has been **extended to September 2, 2025**, and is expected to be completed within 2025[90](index=90&type=chunk) [Trade and Other Payables](index=38&type=section&id=Trade%20and%20Other%20Payables) As of June 30, 2025, the Group's total trade and other payables amounted to HKD 262,008 thousand, a slight decrease from December 31, 2024. This primarily includes outstanding payables for computing power and performance deposits for cryptocurrency mining machine purchases Trade and Other Payables Composition (as of June 30) | Item | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Trade Payables | 9,328 | 10,338 | -9.7% | | Contract Liabilities | 7,181 | 5,426 | +32.3% | | Other Payables | 229,955 | 220,982 | +4.1% | | Accrued Expenses | 15,544 | 28,418 | -45.3% | | **Total** | **262,008** | **265,164** | **-1.2%** | - Other payables include **outstanding payables for computing power of HKD 79,748 thousand** and **performance deposits for cryptocurrency mining machine purchases of HKD 120,614 thousand**[92](index=92&type=chunk) [Bank and Other Borrowings](index=39&type=section&id=Bank%20and%20Other%20Borrowings) As of June 30, 2025, the Group's total bank and other borrowings amounted to HKD 2,916 thousand, a slight decrease from December 31, 2024. Bank loans bear interest at variable annual rates ranging from 2.90% to 3.03% and are secured by the Group's assets Bank and Other Borrowings Composition (as of June 30) | Item | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | | :--- | :--- | :--- | | Bank Term Loans Subject to Immediate Repayment on Demand Clause | 916 | 952 | | Other Borrowings | 2,000 | 2,000 | | **Total** | **2,916** | **2,952** | - Bank loans bear interest at **variable annual rates from 2.90% to 3.03%** and are secured by the Group's assets[93](index=93&type=chunk) [Share Capital](index=39&type=section&id=Share%20Capital) As of June 30, 2025, the Group's authorized share capital and issued and fully paid share capital both remained unchanged at HKD 200,000 thousand and HKD 62,193 thousand, respectively, with 2,487,705 thousand ordinary shares Share Capital Composition (as of June 30) | Item | June 30, 2025 (thousand shares/HKD thousands) | December 31, 2024 (thousand shares/HKD thousands) | | :--- | :--- | :--- | | Authorized Share Capital (Number of Ordinary Shares) | 8,000,000 | 8,000,000 | | Authorized Share Capital (Amount) | 200,000 | 200,000 | | Issued and Fully Paid Share Capital (Number of Ordinary Shares) | 2,487,705 | 2,487,705 | | Issued and Fully Paid Share Capital (Amount) | 62,193 | 62,193 | [Pledged Assets](index=40&type=section&id=Pledged%20Assets) As of June 30, 2025, the Group pledged right-of-use assets of HKD 54,393 thousand and bank deposits of HKD 200 thousand to secure loan financing Pledged Assets (as of June 30) | Pledged Asset | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | | :--- | :--- | :--- | | Right-of-Use Assets | 54,393 | 55,895 | | Bank Deposits | 200 | 200 | [Changes in Interests in Subsidiaries Without Loss of Control](index=40&type=section&id=Changes%20in%20Interests%20in%20Subsidiaries%20Without%20Loss%20of%20Control) On June 5, 2024, the Group acquired the remaining 40% equity interest in Crown Technology (Hong Kong) Limited, an indirect non-wholly owned subsidiary, for a consideration of HKD 4,000, increasing its shareholding from 60% to 100%, resulting in a decrease in non-controlling interests of HKD 4,000 for the six months ended June 30, 2024 - On June 5, 2024, the Group acquired the remaining **40% equity interest in Crown Technology (Hong Kong) Limited**, increasing its shareholding to 100%, which resulted in a **decrease in non-controlling interests of HKD 4,000**[96](index=96&type=chunk) [Approval of Unaudited Condensed Consolidated Interim Financial Statements](index=40&type=section&id=Approval%20of%20Unaudited%20Condensed%20Consolidated%20Interim%20Financial%20Statements) The Board of Directors approved the unaudited condensed consolidated interim financial statements on August 18, 2025 - The Board of Directors approved the unaudited condensed consolidated interim financial statements on **August 18, 2025**[97](index=97&type=chunk) Management Discussion and Analysis This section provides a comprehensive review of the group's business operations, financial performance, liquidity, and key risks, along with discussions on human resources and compliance [Business Review and Outlook](index=41&type=section&id=Business%20Review%20and%20Outlook) The Group's principal businesses include information appliances, IDC, investment, and leasing. Information appliance business revenue significantly declined due to intense competition and reduced orders. IDC business revenue decreased due to deferred US IDC leases and challenges from anti-China sentiment in the US market. Both fair value gains from investment business and gains from digital asset disposals significantly decreased. The leasing business was affected by a sluggish industrial market, resulting in reduced rental income and fair value losses, leading to a segment loss - The Group is primarily engaged in **information appliances, Internet Data Center (IDC), investment, and leasing businesses**[98](index=98&type=chunk) - Information appliance business revenue **decreased significantly by 65.9% to HKD 31.9 million**, with segment profit decreasing by 18.7%[99](index=99&type=chunk) - IDC business revenue **decreased by 52.1% to HKD 13.1 million**, with the segment shifting from profit to a loss of HKD 0.3 million, facing challenges from **anti-China sentiment in the US market and power supply issues**[100](index=100&type=chunk)[102](index=102&type=chunk) - Investment business net fair value gains **decreased from HKD 11.6 million to HKD 1.1 million**, and gains from digital asset disposals **decreased from HKD 53.9 million to HKD 2.3 million**[103](index=103&type=chunk) - Leasing business rental income **decreased by 22.8% to HKD 6.5 million**, and investment property fair value shifted from profit to a loss of HKD 5.7 million, resulting in a **segment loss of HKD 1.9 million**[104](index=104&type=chunk) [Financial Review](index=43&type=section&id=Financial%20Review) The Group's revenue and gross profit significantly declined due to competition in the information appliance market and reduced IDC rental income. Other income and net gains significantly decreased due to reduced gains from cryptocurrency disposals. Investment property fair value shifted from profit to loss, mainly impacted by the sluggish China real estate market. Distribution and selling expenses, general and administrative expenses, other operating expenses, and finance costs all decreased, but ultimately led to the Group shifting from profit to loss Financial Review Key Indicators Comparison (for the six months ended June 30) | Indicator | 2025 (HKD thousands) | 2024 (HKD thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 45,000 | 120,700 | -62.8% | | Gross Profit | 16,500 | 37,700 | -56.1% | | Other Income and Net Gains | 11,700 | 76,900 | -84.8% | | Net Change in Fair Value of Investment Properties | (5,700) | 600 | Shifted from profit to loss | | Distribution and Selling Expenses | 1,000 | 2,900 | -65.5% | | General and Administrative Expenses | 48,800 | 50,800 | -3.9% | | Other Operating Expenses | 1,100 | 8,100 | -86.4% | | Finance Costs | 200 | 300 | -33.3% | | Loss Attributable to Owners of the Company | (30,000) | 53,200 (Profit) | Shifted from profit to loss | - Other operating expenses significantly decreased by **86.9%**, primarily because cryptocurrency mining machines were **fully impaired in 2024**, and no depreciation was incurred during the period[110](index=110&type=chunk) [Liquidity and Financial Resources](index=45&type=section&id=Liquidity%20and%20Financial%20Resources) As of June 30, 2025, the Group's net current assets were HKD 1,133.5 million, with a current ratio of 5.2 times and a gearing ratio of 19.5%. The Group adopts a prudent approach to cash management, maintains low debt leverage, and possesses sufficient liquidity and financial resources to meet its working capital needs for the next 12 months Liquidity and Financial Resources Key Indicators (as of June 30) | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Net Current Assets | HKD 1,133.5 million | N/A | | Cash and Bank Balances | HKD 18.3 million | HKD 34.8 million | | Current Ratio | 5.2 times | 5.3 times | | Gearing Ratio | 19.5% | 19.4% | - The Group adopts a **prudent approach to cash management**, maintains **low debt leverage**, and possesses **sufficient liquidity and financial resources** to meet future operating needs[115](index=115&type=chunk) [Capital Commitments](index=45&type=section&id=Capital%20Commitments) As of June 30, 2025, the Group had no other capital commitments - As of June 30, 2025, the Group had **no other capital commitments**[116](index=116&type=chunk) [Contingent Liabilities](index=45&type=section&id=Contingent%20Liabilities) As of June 30, 2025, the Group had no contingent liabilities - As of June 30, 2025, the Group had **no contingent liabilities**[117](index=117&type=chunk) [Pledge of Group Assets](index=45&type=section&id=Pledge%20of%20Group%20Assets) Details of the pledge of Group assets are set out in Note 21 to the unaudited condensed consolidated interim financial statements in this report - Details of the pledge of Group assets are set out in **Note 21 to the financial statements**[118](index=118&type=chunk) [Capital Structure](index=45&type=section&id=Capital%20Structure) As of June 30, 2025, the Group's share capital was HKD 62.2 million, consisting of 2,487,704,800 shares, remaining unchanged from December 31, 2024 Capital Structure (as of June 30) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Share Capital | HKD 62.2 million | HKD 62.2 million | | Total Number of Issued Shares | 2,487,704,800 shares | 2,487,704,800 shares | [Material Investments / Material Acquisitions and Disposals](index=46&type=section&id=Material%20Investments%20%2F%20Material%20Acquisitions%20and%20Disposals) During the period, the Group engaged in the purchase and sale of cryptocurrencies, including converting Bitcoin to Tether USD and selling a portion of USDT, as well as selling Ethereum and partially converting it to USDT. Other than these, the Group had no other material investments, acquisitions, or disposals - The Group engaged in **Bitcoin, Tether USD, and Ethereum purchase and sale transactions** during the period[120](index=120&type=chunk) - Other than cryptocurrency transactions, the Group had **no other material investments, acquisitions, or disposals** of subsidiaries, associates, and joint ventures during the period[120](index=120&type=chunk) [Future Plans for Material Investments and Capital Assets](index=46&type=section&id=Future%20Plans%20for%20Material%20Investments%20and%20Capital%20Assets) As of June 30, 2025, the Group had no other plans for material investments or capital assets - As of June 30, 2025, the Group had **no other plans for material investments or capital assets**[121](index=121&type=chunk) [Treasury Policy](index=46&type=section&id=Treasury%20Policy) The Group adopts a robust treasury policy to minimize credit risk through continuous credit assessment and closely monitors its liquidity position to ensure it can meet funding requirements - The Group adopts a **robust treasury policy**, minimizing credit risk through continuous credit assessment[122](index=122&type=chunk) - The Board closely monitors the Group's liquidity position to ensure it can **meet funding requirements**[122](index=122&type=chunk) [Credit Policy](index=47&type=section&id=Credit%20Policy) The Group has adopted a credit policy for the daily management and monitoring of the recoverability of loans, trade receivables, and contract assets, including credit risk assessment, collateral evaluation, and loan collection. During the period, two loans were overdue, and the Group is negotiating repayment with the borrowers - The Group's credit policy includes **credit risk assessment, collateral/security evaluation, and loan collection/recovery**[126](index=126&type=chunk) - During the period, **two loans were overdue**, and the Group has issued overdue payment notices and is negotiating repayment or settlement with the borrowers and guarantors[124](index=124&type=chunk) [Principal Risks and Uncertainties](index=48&type=section&id=Principal%20Risks%20and%20Uncertainties) The Group faces several principal risks, including revenue volatility due to tight microchip supply in the information appliance business, increased competition from rapid product innovation, adverse impacts on the set-top box market from streaming media services and smart home integration, challenges to business development from protectionism and changing regulatory environments, impacts on investment returns from global political, social, legal, tax, and regulatory changes, and digital asset value fluctuations and regulatory challenges - The information appliance business faces **tight microchip supply**, leading to revenue volatility and increased competition[128](index=128&type=chunk) - Streaming media services and smart home integration may have a **significant adverse impact on the set-top box market**[128](index=128&type=chunk) - **Protectionism, unilateralism, and increasingly stringent regulatory environments** may pose risks and challenges to business development and revenue[128](index=128&type=chunk) - Global investments may be affected by **local, national, or international political, social, legal, tax, regulatory, and environmental changes**[128](index=128&type=chunk) - Digital asset values may be affected by **market price fluctuations, impairment, cyberattacks, human error, or computer failures**, and face regulatory challenges or restrictions[128](index=128&type=chunk) [Human Resources and Employee Relations](index=49&type=section&id=Human%20Resources%20and%20Employee%20Relations) As of June 30, 2025, the Group had over 70 full-time employees, with employee costs amounting to HKD 16.2 million. The Group's remuneration and benefits are aligned with market rates and linked to employee performance, while also providing medical and insurance plans Human Resources Overview (as of June 30) | Indicator | 2025 | 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Number of Full-time Employees | Over 70 | Over 100 | Decrease | | Employee Costs (HKD thousands) | 16,200 | 20,500 | -21.0% | - The Group's remuneration and benefits are **aligned with market compensation**, employee performance is directly linked to compensation, and **medical and insurance plans** are provided[129](index=129&type=chunk) [Environmental Policies and Performance](index=49&type=section&id=Environmental%20Policies%20and%20Performance) The Group is committed to building an environmentally friendly enterprise, considering environmental protection in its daily operations, and encouraging employees to recycle resources and conserve energy to minimize adverse environmental impacts - The Group is committed to building an environmentally friendly enterprise, consistently considering **environmental protection matters** in its daily operations[130](index=130&type=chunk) - The Group encourages employees to **recycle office resources and other materials** and to **conserve energy**, striving to minimize adverse environmental impacts[130](index=130&type=chunk) [Compliance with Laws and Regulations](index=49&type=section&id=Compliance%20with%20Laws%20and%20Regulations) The Group's operations are primarily conducted in China, Hong Kong, and the United States, and during the period, it complied with all applicable laws and regulations in all material aspects, and will continue to update and adhere to relevant requirements - The Group's operations are primarily conducted in **China, Hong Kong, and the United States**, and during the period, it complied with all applicable laws and regulations in all material aspects[131](index=131&type=chunk) - The Group will continue to stay updated and comply with the requirements of relevant laws and regulations in China, Hong Kong, and the United States to **ensure its compliance**[131](index=131&type=chunk) [Reserves](index=49&type=section&id=Reserves) Changes in the Group's reserves during the period are set out in the unaudited condensed consolidated statement of changes in equity within these financial statements - Changes in the Group's reserves during the period are set out in the **unaudited condensed consolidated statement of changes in equity**[132](index=132&type=chunk) [Dividends](index=49&type=section&id=Dividends) The Board does not recommend the payment of an interim dividend for the period - The Board does not recommend the payment of an interim dividend for the period[133](index=133&type=chunk) [Share Option Scheme](index=50&type=section&id=Share%20Option%20Scheme) The Company's share option scheme expired during the period. No share options were granted or exercised during the period, and there were no outstanding share options as of June 30, 2025 - The Company's share option scheme **expired during the period**[134](index=134&type=chunk) - No share options were granted or exercised during the period, and as of June 30, 2025, there were **no outstanding share options**[136](index=136&type=chunk) [Directors' and Chief Executive's Interests and Short Positions in Shares, Underlying Shares and Debentures](index=51&type=section&id=Directors%27%20and%20Chief%20Executive%27s%20Interests%20and%20Short%20Positions%20in%20Shares%2C%20Underlying%20Shares%20and%20Debentures) As of June 30, 2025, several directors held long positions in the Company's shares, with Mr. Cong Yu holding a 29.80% interest through a controlled corporation. No directors or chief executives held share options during the period Directors' Long Positions in the Company's Shares (as of June 30, 2025) | Director Name | Type of Interest | Number of Ordinary Shares | Nature | Approximate Percentage of Total Issued Share Capital | | :--- | :--- | :--- | :--- | :--- | | Mr. Li Qiang | Personal | 4,604,000 | Beneficial owner | 0.19% | | Mr. Cong Yu | Personal | 741,379,800 | Interest in a controlled corporation | 29.80% | | Mr. Shi Guangrong | Personal | 22,660,000 | Beneficial owner | 0.91% | | Mr. Zhu Jiang | Personal | 7,926,756 | Beneficial owner | 0.32% | | Ms. Shen Yan | Personal | 324,000 | Beneficial owner | 0.01% | - As of June 30, 2025, **no directors or chief executives of the Company held any share options**[139](index=139&type=chunk) [Substantial Shareholders' Interests and Short Positions in Shares and Underlying Shares](index=52&type=section&id=Substantial%20Shareholders%27%20Interests%20and%20Short%20Positions%20in%20Shares%20and%20Underlying%20Shares) As of June 30, 2025, Unicorn Resources Inc. and its associated parties (including Mr. Cong Yu and Mr. Zhu Weisha) held 29.80% of the Company's shares. Honbridge Holdings Limited and its associated parties (including Mr. Li Shufu) held 14.14% of the shares Substantial Shareholders' Long Positions in the Company's Shares and Underlying Shares (as of June 30, 2025) | Shareholder Name | Type of Interest | Number of Ordinary Shares | Nature | Approximate Percentage of Total Issued Share Capital | | :--- | :--- | :--- | :--- | :--- | | Unicorn Resources Inc. | Corporate | 741,379,800 | Beneficial owner | 29.80% | | Cong Yu Company Limited | Corporate | 741,379,800 | Interest in a controlled corporation | 29.80% | | Mr. Cong Yu | Personal | 741,379,800 | Interest in a controlled corporation | 29.80% | | Mr. Zhu Weisha | Personal | 741,379,800 | Interest in a controlled corporation | 29.80% | | Mr. Zhu Weisha | Personal | 19,000,000 | Beneficial owner | 0.76% | | Honbridge Holdings Limited | Corporate | 351,867,200 | Beneficial owner | 14.14% | | Honbridge Capital Limited | Corporate | 351,867,200 | Interest in a controlled corporation | 14.14% | | Geely Group Limited | Corporate | 351,867,200 | Interest in a controlled corporation | 14.14% | | Mr. Li Shufu | Personal | 351,867,200 | Interest in a controlled corporation | 14.14% | - Mr. Cong Yu indirectly holds the interest in **741,379,800 shares** held by Unicorn Resources Inc. through his 100% ownership of Cong Yu Company Limited[145](index=145&type=chunk) - Mr. Zhu Weisha holds a **45% interest in Unicorn Resources Inc.** and beneficially owns 19,000,000 shares[145](index=145&type=chunk) - Mr. Li Shufu indirectly holds the interest in the Company's shares held by Honbridge Holdings Limited through **Geely Group Limited and Honbridge Capital Limited**[145](index=145&type=chunk) [Management Contracts](index=53&type=section&id=Management%20Contracts) During the period, the Company had no contracts concerning the management and administration of the whole or any substantial part of its business - During the period, the Company had **no contracts concerning the management and administration** of the whole or any substantial part of its business[143](index=143&type=chunk) [Competing Business Interests](index=53&type=section&id=Competing%20Business%20Interests) During the period, none of the directors or controlling shareholders or their respective close associates had any business interests that compete or may compete with the Group's business or any conflicts of interest with the Group - During the period, **none of the directors or controlling shareholders or their respective close associates had any business interests that compete or may compete** with the Group's business or any conflicts of interest with the Group[144](index=144&type=chunk) Corporate Governance This section details the company's adherence to corporate governance codes, the audit committee's role, and information regarding directors' and substantial shareholders' interests [Corporate Governance Code](index=54&type=section&id=Corporate%20Governance%20Code) The Company is committed to high standards of corporate governance and has applied and complied with the Corporate Governance Code set out in Appendix C1 to the GEM Listing Rules, except for the Board Chairman's absence from the Annual General Meeting - The Company has applied and complied with the **Corporate Governance Code** set out in Appendix C1 to the GEM Listing Rules[146](index=146&type=chunk) - The Board Chairman, Mr. Li Qiang, was unable to attend the Annual General Meeting due to business commitments, with **Mr. Chen Biao, an Executive Director, presiding**[147](index=147&type=chunk) [Audit Committee](index=54&type=section&id=Audit%20Committee) The Audit Committee comprises two independent non-executive directors, with primary responsibilities including reviewing financial information, overseeing financial reporting systems, risk management, and internal control systems. It has reviewed the unaudited condensed consolidated interim results for the period and found them to comply with applicable accounting standards and to be adequately disclosed - The Audit Committee comprises **two independent non-executive directors** and is responsible for reviewing financial information, overseeing financial reporting, and risk management, among other duties[148](index=148&type=chunk) - The Audit Committee has reviewed the unaudited condensed consolidated interim results for the period and found them to **comply with applicable accounting standards and to be adequately disclosed**[148](index=148&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=55&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company%27s%20Listed%20Securities) During the period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities - During the period, **neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities**[150](index=150&type=chunk) [Directors' Securities Transactions](index=55&type=section&id=Directors%27%20Securities%20Transactions) Following specific enquiries, all directors confirmed compliance with the required standards of dealing as set out in the GEM Listing Rules during the period - All directors confirmed compliance with the **required standards of dealing** as set out in the GEM Listing Rules during the period[151](index=151&type=chunk) [Board Information](index=55&type=section&id=Board%20Information) As of the report date, the Board of Directors comprises five executive directors (Mr. Li Qiang, Mr. Cong Yu, Mr. Shi Guangrong, Mr. Zhu Jiang, and Mr. Chen Biao) and two independent non-executive directors (Ms. Shen Yan and Ms. Fok Kei Wai) - As of the report date, the Board of Directors comprises **five executive directors and two independent non-executive directors**[151](index=151&type=chunk)

[Financial Highlights](index=1&type=section&id=Financial%20Highlights) This section presents the key financial performance indicators for the six months ended June 30, 2025 H1 2025 Financial Highlights | Metric | Amount (RMB) | | :--- | :--- | | Contracted Sales Amount | 3,743,289,000 RMB | | Revenue | 18,520,559,000 RMB | | Gross Profit Margin | 20.8% (Increased) | | Loss Attributable to Owners of the Parent | 3,479,512,000 RMB (Decreased) | [Interim Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=2&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) This statement details the company's revenue, gross profit, and net loss for the six months ended June 30, 2025 H1 2025 Consolidated Statement of Profit or Loss Key Data | Metric | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | Change Rate | | :--- | :--- | :--- | :--- | | Revenue | 18,520,559 | 24,816,532 | -25.4% | | Cost of sales | (14,670,816) | (20,356,550) | -27.9% | | Gross profit | 3,849,743 | 4,459,982 | -13.7% | | Net fair value change of investment properties | (2,280,862) | (3,088,113) | -26.1% | | Loss before tax | (3,015,052) | (2,727,689) | +10.5% | | Loss for the period | (3,938,384) | (3,424,126) | +15.0% | | Loss Attributable to Owners of the Parent | (3,479,512) | (3,682,268) | -5.5% | | Basic loss per share | (82.4) cents | (87.2) cents | -5.5% | [Interim Condensed Consolidated Statement of Financial Position](index=5&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) This statement presents the company's assets, liabilities, and equity as of June 30, 2025 H1 2025 Consolidated Statement of Financial Position Key Data | Metric | June 30, 2025 (RMB thousand) | Dec 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Total non-current assets | 35,133,971 | 37,923,422 | | Total current assets | 74,376,047 | 90,361,804 | | Total current liabilities | 91,341,085 | 104,018,008 | | Total non-current liabilities | 11,171,787 | 13,697,345 | | Net assets | 6,997,146 | 10,569,873 | | Equity attributable to owners of the parent | (1,438,053) | 1,696,028 | | Non-controlling interests | 8,435,199 | 8,873,845 | [Notes to the Interim Condensed Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20the%20Interim%20Condensed%20Consolidated%20Financial%20Statements) This section details the interim financial statements' basis, accounting policies, and key financial items [1. Basis of Preparation](index=7&type=section&id=1.%20Basis%20of%20Preparation) This section outlines the basis of preparation for the interim condensed consolidated financial statements [Going Concern Basis](index=7&type=section&id=Going%20Concern%20Basis) The group faces significant going concern uncertainties but management has a restructuring plan in place - As of June 30, 2025, the Group recorded loss attributable to owners of the parent of approximately **RMB34.80 billion**[13](index=13&type=chunk) Debt and Cash Position as of June 30, 2025 | Metric | Amount (RMB) | | :--- | :--- | | Interest-bearing bank and other borrowings, senior notes and domestic bonds | 34.57 billion | | Cash and cash equivalents | 2.50 billion | | Principal in default or cross-default | 17.45 billion | - The Group signed a restructuring support agreement with the ad hoc group of creditors, which is a significant milestone for offshore debt restructuring[14](index=14&type=chunk) - Continued operation depends on successful offshore debt restructuring, refinancing or extension of bank loans, accelerated property sales collection, and successful disposal of investment properties and non-core businesses[16](index=16&type=chunk) - The Group has **not early adopted** any new standards, interpretations, or amendments that have been issued but are not yet effective[11](index=11&type=chunk) [2. Changes in Accounting Policies and Disclosures](index=9&type=section&id=2.%20Changes%20in%20Accounting%20Policies%20and%20Disclosures) This section details changes in accounting policies and disclosures, with no significant impact on the financial statements - The application of HKAS 21 (Amendment) "Lack of Exchangeability" has **no material impact** on the Group's unaudited interim condensed consolidated financial statements[19](index=19&type=chunk) [3. Operating Segment Information](index=9&type=section&id=3.%20Operating%20Segment%20Information) The group primarily engages in property development and investment, with other segments consolidated due to size - The Group primarily engages in **property development, property investment, property management, and project management businesses**[20](index=20&type=chunk) - Property management and project management segments are consolidated with property development and investment segments as they account for **less than 10%** of the Group's consolidated revenue, loss, and assets[20](index=20&type=chunk) - The Group's revenue from external customers and the vast majority of its non-current assets are located in **Mainland China**[21](index=21&type=chunk) [4. Revenue, Other Income and Gains](index=10&type=section&id=4.%20Revenue%2C%20Other%20Income%20and%20Gains) This section details the group's total revenue and other income and gains for the period H1 2025 Revenue Composition | Revenue Source | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | Change Rate | | :--- | :--- | :--- | :--- | | Property sales | 17,482,222 | 23,925,857 | -26.9% | | Property management fees | 629,537 | 603,302 | +4.3% | | Project management income | 125,222 | 21,848 | +473.1% | | Rental income from operating leases of investment properties | 283,578 | 265,525 | +6.8% | | **Total Revenue** | **18,520,559** | **24,816,532** | **-25.4%** | H1 2025 Other Income and Gains | Other Income and Gains | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | Change Rate | | :--- | :--- | :--- | :--- | | Bank interest income | 8,101 | 18,379 | -55.9% | | Consultancy service income | 19,713 | 15,673 | +25.8% | | Income from forfeiture of deposits | 4,282 | 708 | +504.8% | | Net gain on disposal of a joint venture | 4,910 | 972 | +405.1% | | Net exchange differences | – | 127,186 | -100.0% | | Government grants | 1,052 | 9,512 | -88.9% | | **Total other income and gains** | **67,855** | **201,550** | **-66.3%** | [5. Finance Costs](index=11&type=section&id=5.%20Finance%20Costs) This section outlines the group's finance costs, primarily from borrowings, for the six months ended June 30, 2025 H1 2025 Finance Costs | Finance Costs Item | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | Change Rate | | :--- | :--- | :--- | :--- | | Interest on bank and other borrowings, senior notes and domestic bonds | 1,193,868 | 1,350,657 | -11.6% | | Interest on lease liabilities | 221 | 482 | -54.1% | | Accretion of discount on provision for major overhaul due to passage of time | 2,464 | 2,211 | +11.4% | | Total interest on financial liabilities at FVTPL | 1,196,553 | 1,353,350 | -11.6% | | Less: Interest capitalised | (350,449) | (491,966) | -28.8% | | **Total** | **846,104** | **861,384** | **-1.8%** | [6. Loss Before Tax](index=12&type=section&id=6.%20Loss%20Before%20Tax) This section details the group's loss before tax, influenced by various cost and impairment factors H1 2025 Loss Before Tax Main Components | Item | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Cost of properties sold | 14,106,825 | 19,864,405 | | Cost of services provided | 563,908 | 492,062 | | Total employee benefit expenses | 366,562 | 280,238 | | Net fair value loss on financial assets at FVTPL | 2,740 | 35,617 | | Net exchange differences | 66,834 | (127,186) | | Impairment loss on investments in joint ventures | – | 521,294 | | Impairment loss on amounts due from related parties | – | 439,842 | [7. Income Tax](index=13&type=section&id=7.%20Income%20Tax) This section details the group's income tax expense, which significantly increased due to higher gross profit margin H1 2025 Income Tax Expense | Tax Item | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | Change Rate | | :--- | :--- | :--- | :--- | | PRC corporate income tax | 607,854 | 532,338 | +14.2% | | PRC land appreciation tax | 468,409 | 279,035 | +67.9% | | Deferred tax | (152,931) | (190,268) | -19.6% | | **Total tax expense for the period** | **923,332** | **696,437** | **+32.6%** | [8. Dividends](index=13&type=section&id=8.%20Dividends) The Board of Directors resolved not to declare any interim dividend for the six months ended June 30, 2025 - The Board of Directors resolved **not to declare any interim dividend** for the six months ended June 30, 2025[29](index=29&type=chunk) [9. Loss Per Share Attributable to Ordinary Equity Holders of the Parent](index=13&type=section&id=9.%20Loss%20Per%20Share%20Attributable%20to%20Ordinary%20Equity%20Holders%20of%20the%20Parent) This section details the basic loss per share attributable to ordinary equity holders of the parent for the period Loss Per Share | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Basic and diluted loss per share | RMB(82.4) cents | RMB(87.2) cents | - The weighted average number of ordinary shares outstanding during the period was **4,222,986,126** shares[30](index=30&type=chunk) - Unexercised share options had **no dilutive effect** on the basic loss per share[30](index=30&type=chunk) [10. Trade Receivables](index=14&type=section&id=10.%20Trade%20Receivables) This section details the group's trade receivables, primarily from property sales and property management services - Trade receivables arise from **property sales, leasing of investment properties, and provision of property management services**[31](index=31&type=chunk) - Customers are diversified, with **no significant concentration of credit risk**, and **no collateral is held**[31](index=31&type=chunk) Trade Receivables Ageing Analysis | Ageing | June 30, 2025 (RMB thousand) | Dec 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Current to 90 days | 75,670 | 52,746 | | 91 to 180 days | 46,307 | 62,299 | | 181 to 365 days | 75,694 | 61,140 | | Over 365 days | 68,876 | 105,725 | | **Total** | **266,547** | **281,910** | [11. Trade Payables and Bills](index=14&type=section&id=11.%20Trade%20Payables%20and%20Bills) This section details the group's trade payables and bills, mostly short-term and unsecured Trade Payables and Bills Ageing Analysis | Ageing | June 30, 2025 (RMB thousand) | Dec 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Within 1 year | 13,552,866 | 13,487,076 | | Over 1 year | 500,520 | 506,201 | | **Total** | **14,053,386** | **13,993,277** | - Trade payables and bills are **unsecured, interest-free**, and generally settled according to **construction progress**[33](index=33&type=chunk) [Management Discussion and Analysis](index=15&type=section&id=Management%20Discussion%20and%20Analysis) This section reviews the H1 2025 market, business operations, financial performance, and future outlook [Market Review](index=15&type=section&id=Market%20Review) The H1 2025 real estate market continued its adjustment, with varied performance across city tiers - The H1 2025 real estate market **continued its adjustment**, with sales stabilizing in **first-tier and strong second-tier cities**, but **third- and fourth-tier cities faced greater pressure**[34](index=34&type=chunk) H1 2025 New Commercial Property Sales Data | Metric | Amount/Area | | :--- | :--- | | Sales Amount | approximately RMB4,424.1 billion (YoY decreased **5.5%**) | | Residential Sales Amount | YoY decreased **5.2%** | | Sales Area | approximately 459 million sq m (YoY decreased **3.5%**) | | Residential Sales Area | YoY decreased **3.7%** | [Business Review](index=15&type=section&id=Business%20Review) This section reviews the group's H1 2025 contracted sales, land bank, and investment properties [Contracted Sales](index=15&type=section&id=Contracted%20Sales) The group's H1 2025 contracted sales significantly decreased, with Hangzhou and the Yangtze River Delta performing well H1 2025 Contracted Sales Data | Metric | Amount/Area | | :--- | :--- | | Contracted Sales Amount | approximately RMB3.74 billion (YoY decreased **38.9%**) | | Contracted Sales Area | approximately 0.46 million sq m (YoY decreased **32.1%**) | | Average Property Selling Price | RMB8,120 per sq m | - The Group ranked **18th** in the "H1 2025 China Typical Property Developers Delivery Ranking", demonstrating its commitment to "**guaranteed delivery**"[36](index=36&type=chunk) - The Group has **over 80 projects** on sale, primarily concentrated in **second-tier cities** and core areas of **third- and fourth-tier cities**[37](index=37&type=chunk) H1 2025 Contracted Sales City and Regional Distribution | City/Region | Contracted Sales Amount (RMB million) | Proportion (%) | | :--- | :--- | :--- | | Hangzhou | 448 | **12.0%** | | Yangtze River Delta Economic Zone | 1,120 | **29.9%** | | Second-tier cities | 1,527 | **40.8%** | | Third- and fourth-tier cities | 1,925 | **51.4%** | [Land Bank](index=18&type=section&id=Land%20Bank) The group holds a substantial land bank across 56 cities, primarily in the Yangtze River Delta and second-tier cities - As of June 30, 2025, the Group and its joint ventures and associates held a total planned GFA of approximately **23.34 million square meters** (Group's attributable share: approximately **19.52 million square meters**) in **56 cities**[40](index=40&type=chunk) Land Bank Cost Distribution by Region and City Tier | Distribution Type | Proportion (%) | | :--- | :--- | | Yangtze River Delta Economic Zone | **38.1%** | | Bohai Rim Economic Zone | **20.8%** | | Central and Western Regions | **19.0%** | | West Coast Economic Zone of the Straits | **11.2%** | | Guangdong-Hong Kong-Macao Greater Bay Area | **10.9%** | | First-tier cities | **11.6%** | | Second-tier cities | **51.8%** | | Third- and fourth-tier cities | **36.6%** | [Investment Properties](index=18&type=section&id=Investment%20Properties) The group holds 46 investment properties across 26 cities, with 28 already operational - As of June 30, 2025, the Group and its joint ventures and associates held **46 investment properties** with a total GFA of approximately **3.6 million square meters** (attributable share: approximately **3.28 million square meters**), of which **28 have commenced operations**[41](index=41&type=chunk) - Investment properties are located in **26 cities**, covering formats such as **shopping malls, long-term rental apartments, office buildings, commercial streets, and retail shops**[41](index=41&type=chunk) [Outlook](index=18&type=section&id=Outlook) The group anticipates increased policy support for the real estate market and will focus on pricing and cost control - The central government is expected to **intensify efforts** in H2 to introduce a "policy package" for real estate, aiming to **stabilize the market and halt the decline**[42](index=42&type=chunk) - In H2, the Group will focus on "**price**" as its operational guide, intensifying **inventory reduction** through precise pricing strategies and strictly controlling **engineering costs** through refined bidding and procurement to **stabilize gross profit margin**[43](index=43&type=chunk) - The "**Two Wings**" businesses (**SCE World City shopping malls and long-term rental apartments**) will focus on **in-depth operations and proactive adjustments**, continuously optimizing business layout to **enhance corporate operating efficiency and brand value**[43](index=43&type=chunk) [Financial Review](index=19&type=section&id=Financial%20Review) This section reviews the group's H1 2025 financial performance, including revenue, gross profit, and net loss [Revenue](index=19&type=section&id=Revenue) Group revenue decreased in H1 2025, primarily due to reduced property sales income Revenue Change | Metric | H1 2025 (RMB) | H1 2024 (RMB) | Change Rate | | :--- | :--- | :--- | :--- | | Revenue | 18,520,559,000 | 24,816,532,000 | -25.4% | [Property Sales Revenue](index=19&type=section&id=Property%20Sales%20Revenue) Property sales revenue declined due to decreased delivery area and lower average selling prices Property Sales Revenue Change | Metric | H1 2025 | H1 2024 | Change Rate | | :--- | :--- | :--- | :--- | | Property Sales Revenue | 17,482,222,000 RMB | 23,925,857,000 RMB | -26.9% | | Delivery Area | 1,461,452 sq m | 1,513,368 sq m | -3.4% | | Average Selling Price | 11,962 RMB/sq m | 15,810 RMB/sq m | -24.3% | [Property Management Fees](index=20&type=section&id=Property%20Management%20Fees) Property management fees increased due to a rise in the number and area of managed properties Property Management Fees Change | Metric | H1 2025 (RMB) | H1 2024 (RMB) | Change Rate | | :--- | :--- | :--- | :--- | | Property Management Fees | 629,537,000 | 603,302,000 | +4.3% | [Rental Income](index=20&type=section&id=Rental%20Income) Rental income increased, primarily driven by new shopping malls opened in late 2024 Rental Income Change | Metric | H1 2025 (RMB) | H1 2024 (RMB) | Change Rate | | :--- | :--- | :--- | :--- | | Rental Income | 283,578,000 | 265,525,000 | +6.8% | [Gross Profit](index=20&type=section&id=Gross%20Profit) Gross profit decreased, but the gross profit margin improved due to higher-margin projects delivered Gross Profit and Gross Profit Margin Change | Metric | H1 2025 | H1 2024 | Change Rate | | :--- | :--- | :--- | :--- | | Gross Profit | 3,849,743,000 RMB | 4,459,982,000 RMB | -13.7% | | Gross Profit Margin | **20.8%** | **18.0%** | +2.8 percentage points | [Net Fair Value Change of Investment Properties](index=20&type=section&id=Net%20Fair%20Value%20Change%20of%20Investment%20Properties) Fair value loss on investment properties decreased, mainly due to impairment of certain commercial properties Fair Value Loss on Investment Properties Change | Metric | H1 2025 (RMB) | H1 2024 (RMB) | Change Rate | | :--- | :--- | :--- | :--- | | Fair Value Loss | 2,280,862,000 | 3,088,113,000 | -26.1% | [Selling and Marketing Expenses](index=20&type=section&id=Selling%20and%20Marketing%20Expenses) Selling and marketing expenses decreased due to a reduction in the number of projects on sale Selling and Marketing Expenses Change | Metric | H1 2025 (RMB) | H1 2024 (RMB) | Change Rate | | :--- | :--- | :--- | :--- | | Selling and Marketing Expenses | 353,722,000 | 395,676,000 | -10.6% | [Administrative Expenses](index=20&type=section&id=Administrative%20Expenses) Administrative expenses slightly increased in H1 2025 Administrative Expenses Change | Metric | H1 2025 (RMB) | H1 2024 (RMB) | Change Rate | | :--- | :--- | :--- | :--- | | Administrative Expenses | 629,726,000 | 627,537,000 | +0.3% | [Finance Costs](index=21&type=section&id=Finance%20Costs) Finance costs slightly decreased in H1 2025 Finance Costs Change | Metric | H1 2025 (RMB) | H1 2024 (RMB) | Change Rate | | :--- | :--- | :--- | :--- | | Finance Costs | 846,104,000 | 861,384,000 | -1.8% | [Tax Expense](index=21&type=section&id=Tax%20Expense) Tax expense significantly increased due to higher land appreciation tax and corporate income tax from improved gross margin Tax Expense Change | Metric | H1 2025 (RMB) | H1 2024 (RMB) | Change Rate | | :--- | :--- | :--- | :--- | | Tax Expense | 923,332,000 | 696,437,000 | +32.6% | [Loss Attributable to Owners of the Parent](index=21&type=section&id=Loss%20Attributable%20to%20Owners%20of%20the%20Parent) Loss attributable to owners of the parent decreased, primarily due to fewer property deliveries and fair value losses Loss Attributable to Owners of the Parent Change | Metric | H1 2025 (RMB) | H1 2024 (RMB) | Change Rate | | :--- | :--- | :--- | :--- | | Loss Attributable to Owners of the Parent | 3,479,512,000 | 3,682,268,000 | -5.5% | [Liquidity, Financial and Capital Resources](index=21&type=section&id=Liquidity%2C%20Financial%20and%20Capital%20Resources) This section details the group's cash position, borrowings, gearing ratio, and foreign exchange risk management [Cash Position](index=21&type=section&id=Cash%20Position) The group's cash and bank balances decreased, with a portion restricted for property development guarantees Cash and Bank Balances | Currency | June 30, 2025 (RMB thousand) | Dec 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | RMB | 3,411,746 | 3,975,285 | | HKD | 17,099 | 17,429 | | USD | 26,939 | 52,303 | | **Total** | **3,455,784** | **4,045,017** | Restricted Cash | Metric | June 30, 2025 (RMB) | Dec 31, 2024 (RMB) | | :--- | :--- | :--- | | Restricted Cash | 959,753,000 | 1,124,479,000 | [Borrowings](index=22&type=section&id=Borrowings) The group's total borrowings slightly decreased, with a significant portion due within one year or on demand Borrowings Repayment Schedule | Borrowing Type | June 30, 2025 (RMB thousand) | Dec 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Total Bank and Other Borrowings | 19,145,456 | 19,804,099 | | Total Senior Notes and Domestic Bonds | 15,424,747 | 15,614,467 | | **Total Borrowings** | **34,570,203** | **35,418,566** | Borrowings Denominated by Currency | Currency | Bank and Other Borrowings (RMB thousand) | Senior Notes and Domestic Bonds (RMB thousand) | | :--- | :--- | :--- | | RMB | 14,704,054 | 2,706,019 | | HKD | 1,155,842 | – | | USD | 3,285,560 | 12,718,728 | [Gearing Ratio](index=23&type=section&id=Gearing%20Ratio) The net gearing ratio significantly increased as of June 30, 2025 Net Gearing Ratio | Metric | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Net Gearing Ratio | **444.7%** | **296.8%** | [Exchange Rate Fluctuation Risk](index=23&type=section&id=Exchange%20Rate%20Fluctuation%20Risk) The group monitors exchange rate fluctuation risk, with most operations in RMB and no foreign currency hedging arrangements - The majority of the Group's revenue, operating expenses, assets, and liabilities are denominated in **RMB**[58](index=58&type=chunk) - As of June 30, 2025, the Group has **not entered into any foreign currency hedging arrangements** and will continue to **closely monitor foreign currency exchange rate fluctuation risk**[58](index=58&type=chunk) [Corporate Governance and Other Information](index=23&type=section&id=Corporate%20Governance%20and%20Other%20Information) This section outlines the company's corporate governance practices, audit committee review, and other relevant information [Corporate Governance](index=23&type=section&id=Corporate%20Governance) The company complies with corporate governance code provisions, with the Chairman and CEO roles combined for efficiency - The Company and its Board have consistently complied with the code provisions of the **Corporate Governance Code**, although the roles of Chairman and Chief Executive Officer are combined and held by **Mr. Huang Chaoyang**[59](index=59&type=chunk) - The Board believes that combining the roles of Chairman and Chief Executive Officer facilitates **efficiency and consistency in the execution of the Company's business plans and decisions**[59](index=59&type=chunk) [Audit Committee and Review of Interim Results](index=24&type=section&id=Audit%20Committee%20and%20Review%20of%20Interim%20Results) The Audit Committee, comprising independent non-executive directors, reviewed the interim financial statements and results - The Audit Committee comprises **three independent non-executive directors**, with **Mr. Ding Lianghui** as Chairman and **Mr. Dai Yiyi** and **Mr. Mao Zhenhua** as members[60](index=60&type=chunk) - The Chairman of the Audit Committee, **Mr. Ding Lianghui**, possesses **expertise in accounting and financial management**, meeting the Listing Rules requirements[60](index=60&type=chunk) - The Audit Committee has reviewed the Group's **accounting policies, interim condensed consolidated financial statements, and this interim results announcement**[60](index=60&type=chunk) [Model Code for Securities Transactions by Directors](index=24&type=section&id=Model%20Code%20for%20Securities%20Transactions%20by%20Directors) All directors confirmed strict compliance with the Model Code for Securities Transactions by Directors during the review period - The Company has adopted the **Model Code for Securities Transactions by Directors of Listed Issuers** as the standard for directors' securities transactions[61](index=61&type=chunk) - All directors confirmed strict compliance with the **Model Code** during the review period[61](index=61&type=chunk) [Purchase, Redemption or Sale of the Company's Listed Securities](index=24&type=section&id=Purchase%2C%20Redemption%20or%20Sale%20of%20the%20Company%27s%20Listed%20Securities) Neither the company nor its subsidiaries purchased, redeemed, or sold any listed securities during the six months ended June 30, 2025 - During the six months ended June 30, 2025, neither the Company nor any of its subsidiaries **purchased, redeemed, or sold any of the Company's listed securities**[62](index=62&type=chunk) [Interim Dividend](index=24&type=section&id=Interim%20Dividend) The Board of Directors resolved not to declare any interim dividend for the six months ended June 30, 2025 - The Board of Directors resolved **not to declare any interim dividend** for the six months ended June 30, 2025[63](index=63&type=chunk) [Publication of Interim Results and Interim Report](index=25&type=section&id=Publication%20of%20Interim%20Results%20and%20Interim%20Report) The interim results announcement is published on the company and HKEX websites, with the full interim report to follow - This interim results announcement has been published on the Company's website (**www.sce-re.com**) and the HKEX website (**www.hkexnews.hk**)[64](index=64&type=chunk) - All relevant information regarding the 2025 Interim Report will be published on the Company's and HKEX websites in due course[64](index=64&type=chunk)