[Company Information and Financial Summary](index=1&type=section&id=I.%20%E5%85%AC%E5%8F%B8%E4%BF%A1%E6%81%AF%E4%B8%8E%E8%B4%A2%E5%8A%A1%E6%91%98%E8%A6%81) This section presents the company's profile, reporting basis, and key financial statements, including comprehensive income and financial position [Company Profile and Basis of Preparation](index=1&type=section&id=1.1%20%E5%85%AC%E5%8F%B8%E6%A6%82%E5%86%B5%E4%B8%8E%E6%8A%A5%E5%91%8A%E7%BC%96%E5%88%B6%E5%9F%BA%E7%A1%80) JiaHau Holdings (00602) reported H1 2025 unaudited interim results, focusing on investment holding, China retail, and financial services - JiaHau Holdings Limited (Stock Code: 00602) announced its unaudited condensed consolidated interim results for the six months ended June 30, 2025[2](index=2&type=chunk) - The Group's principal activities include investment holding, operating and managing retail stores and related businesses in China, and providing financial services[6](index=6&type=chunk) [Condensed Consolidated Statement of Comprehensive Income](index=2&type=section&id=1.2%20%E7%AE%80%E6%98%8E%E7%BB%BC%E5%90%88%E5%85%A8%E9%9D%A2%E6%94%B6%E7%9B%8A%E8%A1%A8) H1 2025 revenue fell 14.5% to RMB 177,580 thousand, with loss and comprehensive income significantly narrowing to RMB 3,581 thousand Key Data from Condensed Consolidated Statement of Comprehensive Income | Metric | June 30, 2025 (RMB thousands) | June 30, 2024 (RMB thousands) | | :--- | :--- | :--- | | Revenue | 177,580 | 207,763 | | Cost of inventories sold | (56,555) | (83,256) | | Other operating income | 36,780 | 23,193 | | Distribution costs | (124,254) | (130,973) | | Administrative expenses | (17,356) | (15,613) | | Finance costs | (18,697) | (25,004) | | Loss before income tax | (3,528) | (24,969) | | Income tax expense | (53) | (498) | | Loss and total comprehensive income for the period attributable to owners of the Company | (3,581) | (25,467) | | Loss per share (RMB cents) | (0.35) | (2.45) | - Revenue decreased by **14.5%** year-on-year, from RMB 207,763 thousand to **RMB 177,580 thousand**[3](index=3&type=chunk) - Loss for the period significantly narrowed from RMB 25,467 thousand to **RMB 3,581 thousand**, with loss per share decreasing from **2.45 cents to 0.35 cents**[3](index=3&type=chunk) [Condensed Consolidated Statement of Financial Position](index=3&type=section&id=1.3%20%E7%AE%80%E6%98%8E%E7%BB%BC%E5%90%88%E8%B4%A2%E5%8A%A1%E7%8A%B6%E5%86%B5%E8%A1%A8) As of June 30, 2025, total assets decreased to RMB 779,600 thousand, with net liabilities increasing to RMB 72,476 thousand, reflecting financial challenges Key Data from Condensed Consolidated Statement of Financial Position | Metric | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | **Non-current assets** | | | | Property, plant and equipment | 78,049 | 99,926 | | Investment properties | 226,500 | 226,500 | | Right-of-use assets | 275,912 | 300,251 | | Intangible assets | 4,432 | 4,047 | | Deferred tax assets | 76,954 | 76,954 | | **Current assets** | | | | Inventories and consumables | 2,363 | 4,525 | | Trade and loan receivables | 36,514 | 35,808 | | Cash and cash equivalents | 40,828 | 25,087 | | **Current liabilities** | | | | Trade payables | 38,682 | 48,283 | | Lease liabilities | 65,204 | 39,761 | | Borrowings | 8,532 | 7,827 | | **Non-current liabilities** | | | | Lease liabilities | 354,911 | 401,429 | | Borrowings | 133,659 | 137,925 | | Deferred tax liabilities | 80,499 | 80,499 | | **Total assets** | 779,600 | 809,748 | | **Total liabilities** | 852,076 | 878,643 | | **Net liabilities** | (72,476) | (68,895) | - Total assets decreased from RMB 809,748 thousand as of December 31, 2024, to **RMB 779,600 thousand** as of June 30, 2025[4](index=4&type=chunk)[5](index=5&type=chunk) - Cash and cash equivalents increased from RMB 25,087 thousand to **RMB 40,828 thousand**[4](index=4&type=chunk) - Net liabilities increased from **RMB (68,895) thousand** as of December 31, 2024, to **RMB (72,476) thousand** as of June 30, 2025[5](index=5&type=chunk) [Notes to the Financial Statements](index=5&type=section&id=II.%20%E8%B4%A2%E5%8A%A1%E6%8A%A5%E8%A1%A8%E9%99%84%E6%B3%A8) This section details the Group's financial reporting standards, segment information, revenue, costs, and other financial notes [Group Information and Basis of Preparation](index=5&type=section&id=2.1%20%E9%9B%86%E5%9B%A2%E4%BF%A1%E6%81%AF%E5%8F%8A%E7%BC%96%E5%88%B6%E5%9F%BA%E7%A1%80) The Group's condensed interim financial statements are prepared in accordance with HKAS 34 and Appendix D2 of the Listing Rules, using consistent accounting policies with the 2024 annual financial statements - The condensed interim financial statements are prepared in accordance with Hong Kong Accounting Standard 34 and the applicable disclosure requirements of Appendix D2 to the Listing Rules[6](index=6&type=chunk) - The current period's statements adopt the same accounting policies as the 2024 annual financial statements, except for expected changes to be reflected in the 2025 annual financial statements[7](index=7&type=chunk) [Adoption of Hong Kong Financial Reporting Standards](index=5&type=section&id=2.2%20%E9%87%87%E7%BA%B3%E9%A6%99%E6%B8%AF%E8%B4%A2%E5%8A%A1%E6%8A%A5%E5%91%8A%E5%87%86%E5%88%99) The Group adopted all new and revised HKFRSs effective for the accounting year beginning January 1, 2025, with no significant impact on the condensed consolidated interim financial statements - The Group has adopted all new and revised Hong Kong Financial Reporting Standards effective for the accounting year beginning January 1, 2025[9](index=9&type=chunk) - The adoption of new and revised HKFRSs had no significant impact on the Group's condensed consolidated interim financial statements[9](index=9&type=chunk) [Segment Information](index=6&type=section&id=2.3%20%E5%88%86%E9%83%A8%E8%B5%84%E6%96%99) The Group operates two segments: retail store operations and financial services, with retail being the primary revenue source and China as the main geographical origin - The Group has two operating segments: operating and managing retail stores and other related businesses, and providing financial services[10](index=10&type=chunk) Reportable Segment Revenue (For the six months ended June 30, 2025) | Segment | Revenue (RMB thousands) | | :--- | :--- | | Operating and managing retail stores and other related businesses | 177,580 | | Providing financial services | – | | **Consolidated** | **177,580** | - The Group's revenue and non-current assets primarily originate from China, thus no separate geographical segment analysis is presented[16](index=16&type=chunk) [Revenue and Other Operating Income](index=8&type=section&id=2.4%20%E6%94%B6%E5%85%A5%E5%8F%8A%E5%85%B6%E4%BB%96%E7%BB%8F%E8%90%A5%E6%94%B6%E5%85%A5) Total revenue decreased by 14.5% to RMB 177,580 thousand due to reduced sales and sub-leased property rental income, while other operating income surged 58.2% to RMB 36,780 thousand from early lease termination gains Revenue Components (For the six months ended June 30) | Revenue Source | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Sales of goods | 67,443 | 89,621 | | Commission income from concessionaire sales | 4,853 | 5,455 | | Rental income from sub-leased shop properties | 21,151 | 23,531 | | Rental income from investment properties | 4,664 | 4,737 | | Rental income from sub-leased shopping mall properties | 79,469 | 84,419 | | **Total Revenue** | **177,580** | **207,763** | Other Operating Income Components (For the six months ended June 30) | Other Income Source | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Interest income | 18 | 230 | | Government grants | 38 | 44 | | Administrative and management fee income | 13,015 | 14,855 | | Exchange gain | – | 210 | | Gain on early termination of leases | 13,906 | – | | Others | 9,803 | 7,854 | | **Total Other Operating Income** | **36,780** | **23,193** | - Other operating income increased by **58.2%** year-on-year, primarily due to a **RMB 13,906 thousand** gain on early termination of leases[18](index=18&type=chunk)[20](index=20&type=chunk) [Finance Costs](index=8&type=section&id=2.5%20%E8%9E%8D%E8%B5%84%E6%88%90%E6%9C%AC) Finance costs decreased by 25.2% year-on-year to RMB 18,697 thousand, mainly driven by lower interest on lease liabilities and bank borrowings Finance Costs Components (For the six months ended June 30) | Finance Cost Source | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Interest on lease liabilities | 15,799 | 21,674 | | Interest on bank borrowings | 2,898 | 3,330 | | **Total Finance Costs** | **18,697** | **25,004** | - Finance costs decreased by **25.2%** year-on-year, from RMB 25,004 thousand to **RMB 18,697 thousand**[19](index=19&type=chunk) [Loss Before Income Tax](index=9&type=section&id=2.6%20%E9%99%A4%E6%89%80%E5%BE%97%E7%A8%8E%E5%89%8D%E4%BA%8F%E6%8D%9F) Loss before income tax significantly narrowed to RMB 3,528 thousand from RMB 24,969 thousand in the prior period, primarily due to reduced depreciation, amortization, interest expenses, and increased other operating income Items Deducted/Credited in Loss Before Income Tax (For the six months ended June 30) | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Depreciation of property, plant and equipment | 23,580 | 27,042 | | Depreciation of right-of-use assets | 24,339 | 26,733 | | Interest on lease liabilities | 15,799 | 21,674 | | Amortisation of intangible assets | 729 | 616 | | Loss on disposal of property, plant and equipment | 735 | 161 | | Operating lease rentals for land and buildings | 3,929 | 6,063 | | Staff costs (salaries and other benefits) | 27,913 | 29,967 | | Staff costs (contributions to retirement benefit schemes) | 5,640 | 5,226 | | Rental income from investment properties | 4,664 | 4,737 | | Sub-leased properties (basic rentals) | 93,095 | 105,015 | | Sub-leased properties (contingent rentals) | 7,525 | 2,935 | - Loss before income tax significantly narrowed from RMB 24,969 thousand to **RMB 3,528 thousand**[21](index=21&type=chunk) [Income Tax Expense](index=9&type=section&id=2.7%20%E6%89%80%E5%BE%97%E7%A8%8E%E5%BC%80%E6%94%AF) Income tax expense significantly decreased to RMB 53 thousand, mainly due to reduced assessable profits of subsidiaries, with varying corporate income tax rates applied in China Income Tax Expense (For the six months ended June 30) | Tax Type | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | PRC Enterprise Income Tax | 53 | 498 | - Income tax expense decreased from RMB 498 thousand to **RMB 53 thousand**, primarily due to reduced assessable profits of subsidiaries[23](index=23&type=chunk)[65](index=65&type=chunk) - The Group's subsidiaries in Guangxi and Shenzhen Baijiahua Network Technology Co., Ltd. (a high-tech enterprise) enjoy a **15%** preferential corporate income tax rate, while other PRC subsidiaries are subject to a **25%** rate[23](index=23&type=chunk)[24](index=24&type=chunk) [Dividends](index=10&type=section&id=2.8%20%E8%82%A1%E6%81%AF) The Board does not recommend the payment of an interim dividend for the period, consistent with zero final dividends in prior years - The Board does not recommend the payment of an interim dividend for the period[29](index=29&type=chunk) - The final dividend for the prior year was zero[26](index=26&type=chunk) [Loss Per Share](index=10&type=section&id=2.9%20%E6%AF%8F%E8%82%A1%E4%BA%8F%E6%8D%9F) Basic loss per share significantly narrowed to RMB 0.35 cents from 2.45 cents, reflecting a substantial reduction in loss, with diluted loss per share being identical due to no dilutive potential ordinary shares Loss Per Share (For the six months ended June 30) | Metric | 2025 (RMB cents) | 2024 (RMB cents) | | :--- | :--- | :--- | | Basic loss per share | (0.35) | (2.45) | - Basic loss per share is calculated based on the loss attributable to owners of the Company of approximately **RMB 3,581,000** and the weighted average of approximately **1,037,500,002** ordinary shares in issue during the period[26](index=26&type=chunk) - Diluted earnings per share are the same as basic earnings per share as there were no other dilutive potential ordinary shares during the period[27](index=27&type=chunk) [Trade and Loan Receivables](index=10&type=section&id=2.10%20%E5%BA%94%E6%94%B6%E8%B4%B8%E6%98%93%E8%B4%A6%E6%AC%BE%E5%8F%8A%E8%B4%B7%E6%AC%BE) The Group's total trade and loan receivables slightly increased to RMB 36,514 thousand, with most receivables due within 30 days and credit terms typically ranging from one to three months Ageing Analysis of Trade and Loan Receivables | Ageing | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Within 30 days | 31,076 | 34,635 | | 31 to 60 days | 1,033 | 140 | | 61 to 180 days | 1,924 | 490 | | 181 to 365 days | 2,153 | 537 | | Over 365 days | 328 | 6 | | **Total** | **36,514** | **35,808** | - All of the Group's sales are conducted on a cash basis, except for certain bulk commodity sales to corporate customers, rental income from tenants, and loan receivables from financial services[28](index=28&type=chunk) - Credit terms for retail store customers generally range from one to three months, while for financial services customers, repayment is typically on demand[28](index=28&type=chunk) [Trade Payables](index=11&type=section&id=2.11%20%E5%BA%94%E4%BB%98%E8%B4%B8%E6%98%93%E8%B4%A6%E6%AC%BE) The Group's total trade payables decreased to RMB 38,682 thousand from RMB 48,283 thousand, with supplier credit terms generally ranging from 30 to 60 days Ageing Analysis of Trade Payables | Ageing | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Within 30 days | 6,108 | 21,790 | | 31 to 60 days | 5,733 | 9,245 | | 61 to 180 days | 15,054 | 9,957 | | 181 to 365 days | 8,102 | 1,166 | | Over 365 days | 3,685 | 6,125 | | **Total** | **38,682** | **48,283** | - Credit terms granted by suppliers generally range from **30 to 60 days**[31](index=31&type=chunk) - Total trade payables decreased from RMB 48,283 thousand to **RMB 38,682 thousand**[32](index=32&type=chunk) [Management Discussion and Analysis](index=12&type=section&id=III.%20%E7%AE%A1%E7%90%86%E5%B1%82%E8%AE%A8%E8%AE%BA%E5%8F%8A%E5%88%86%E6%9E%90) This section provides an overview of the industry, the Group's operational highlights, and future outlook and strategies [Industry Overview](index=12&type=section&id=3.1%20%E8%A1%8C%E4%B8%9A%E6%A6%82%E8%A7%88) In H1 2025, China's economy showed resilience with domestic demand recovery, driving a 5.0% increase in retail sales, while shopping centers transform towards experiential, digital, community-focused, and green models [China's Economy and Retail Market Overview](index=12&type=section&id=3.1.1%20%E4%B8%AD%E5%9B%BD%E7%BB%8F%E6%B5%8E%E4%B8%8E%E9%9B%B6%E5%94%AE%E5%B8%82%E5%9C%BA%E6%A6%82%E5%86%B5) China's economy maintained resilience in H1, with domestic demand recovering and retail sales growing 5.0%, driven by policies, e-commerce promotions, and cultural tourism integration - In the first half of the year, China's economy demonstrated strong resilience and recovery momentum, with domestic demand becoming a crucial pillar[33](index=33&type=chunk)[34](index=34&type=chunk) - Total retail sales of consumer goods reached **RMB 4,228.7 billion** in H1 2025, a year-on-year increase of **4.8%**[36](index=36&type=chunk) - The "trade-in" policy significantly boosted retail growth, while e-commerce platforms drove online sales through a combination of "national subsidies + coupons"[37](index=37&type=chunk) - The catering industry experienced a strong recovery driven by holiday spending, with cultural tourism integration emerging as a new growth point and inbound tourism policies showing significant benefits[37](index=37&type=chunk) [Shopping Mall Industry Trends](index=13&type=section&id=3.1.2%20%E8%B4%AD%E7%89%A9%E4%B8%AD%E5%BF%83%E8%A1%8C%E4%B8%9A%E8%B6%8B%E5%8A%BF) The shopping center industry is evolving towards experiential and immersive models, with over 6,000 centers nationwide and a market size of RMB 450 billion, driven by four core trends: experiential, digital, community-focused, and green - Shopping centers are evolving towards a greater focus on scenario-based and immersive experiences, with some department stores transitioning into shopping centers[38](index=38&type=chunk) - In 2025, the number of shopping centers nationwide exceeded **6,000**, with a total gross floor area of over **500 million square meters** and an industry market size of **RMB 450 billion**[39](index=39&type=chunk) - Shopping centers exhibit four core trends: experiential, digital, community-focused, and green, with experiential formats accounting for over **40%**[39](index=39&type=chunk) - The Chinese retail industry faces challenges such as operating pressure on traditional enterprises, slowing growth in some formats, and regional imbalances, but technological advancements and changing consumer behavior are reshaping the sector[42](index=42&type=chunk) [Group Operational Review and Highlights](index=16&type=section&id=3.2%20%E9%9B%86%E5%9B%A2%E8%BF%90%E8%90%A5%E5%9B%9E%E9%A1%B5%E4%B8%8E%E4%BA%AE%E7%82%B9) The Group's H1 revenue decreased by 14.5%, but sales gross profit and operating loss significantly improved, as it actively responded to market challenges through celebrations, store renovations, new store preparations, and cost-saving measures [Overall Financial Performance](index=16&type=section&id=3.2.1%20%E6%95%B4%E4%BD%93%E8%B4%A2%E5%8A%A1%E8%A1%A8%E7%8E%B0) For the six months ended June 30, 2025, total revenue was RMB 177.6 million (down 14.5%), sales gross profit was RMB 10.9 million (up 71.0%), operating loss was RMB 3.5 million (down 85.9%), and loss attributable to owners was RMB 3.6 million (down 85.9%) Group H1 Financial Performance | Metric | H1 2025 (RMB millions) | Year-on-Year Change | | :--- | :--- | :--- | | Total Revenue | 177.6 | -14.5% | | Sales Gross Profit | 10.9 | +71.0% | | Operating Loss | 3.5 | -85.9% | | Loss Attributable to Owners of the Company | 3.6 | -85.9% | - The decrease in revenue was primarily due to a weaker general economic environment, reduced consumer spending, intensified market competition, and a decrease in resident population due to foreign capital withdrawal[43](index=43&type=chunk) - At the end of the period, the Group operated **9 retail stores** and **three shopping centers**[43](index=43&type=chunk) [Shajing Shopping Center Second Anniversary Celebration](index=16&type=section&id=3.2.2%20%E6%B2%99%E4%BA%95%E8%B4%AD%E7%89%A9%E4%B8%AD%E5%BF%83%E4%B8%A4%E5%91%A8%E5%B9%B4%E5%BA%86%E5%85%B8) Shajing Jiayanghui Shopping Center celebrated its second anniversary by collaborating with the government to issue RMB 30 million in consumption vouchers, integrating "online vouchers + offline experiences" and "commercial + cultural tourism + technology + finance" models, featuring "Nailong" cartoon character-themed activities - Shajing Jiayanghui Shopping Center held its second-anniversary celebration, collaborating with the Bao'an District Commerce Bureau to launch **RMB 30 million** in Xinqiao Street exclusive circulating consumption vouchers[45](index=45&type=chunk) - The event adopted an "online voucher issuance + offline experience" and "brand linkage + traffic sharing" model, integrating "commercial + cultural tourism + technology + finance" to comprehensively cover consumer demand[45](index=45&type=chunk)[46](index=46&type=chunk) - The celebration featured the cartoon character "Nailong" and included stage plays, parades, performances, random dances, shadow puppetry, and a grand lucky draw[46](index=46&type=chunk) [Guangming Branch Renovation and Upgrade](index=17&type=section&id=3.2.3%20%E5%85%AC%E6%98%8E%E5%88%86%E5%BA%97%E6%94%B9%E9%80%A0%E5%8D%87%E7%BA%A7) The renovated Shenzhen Guangming store, rebranded as "Jiayanglin" with "Jiayangcang" for its supermarket, offers upgraded products, expanded categories, new fresh food/bakery/hot deli options, a food street, and convenience services to enhance customer experience - The Shenzhen Guangming store underwent a major renovation, rebranded as "Jiayanglin," with the supermarket section named "Jiayangcang"[47](index=47&type=chunk) - It expanded into new formats such as cooked food, bakery, and freshly stir-fried fast food, aiming to create an affordable, high-quality supermarket, and established a food street[47](index=47&type=chunk) - New resting and dining areas and convenience service zones were added, offering free services like tea, washing equipment, microwaves, blood pressure measurement, vision tests, and height/weight checks[47](index=47&type=chunk) [Preparation for Shenzhen Pingshan New Store](index=17&type=section&id=3.2.4%20%E7%AD%B9%E5%A4%87%E6%B7%B1%E5%9C%B3%E5%9D%AA%E5%B1%B1%E6%96%B0%E5%BA%97) The Group is preparing its first "Jiayangli" store in Pingshan Central District, Shenzhen's youngest administrative area, which boasts innovation advantages and industrial foundations, with its population expected to double and the 40,000 sqm shopping center slated to open by late 2025 - The Group is preparing its first "Jiayangli" store in Pingshan Central District, an area known as the "City of the Future" with rich innovation advantages and a high-quality industrial foundation[48](index=48&type=chunk) - Pingshan District's GDP reached approximately **RMB 140 billion** in 2024, with industrial output above designated size exceeding **RMB 600 billion**, and a resident population of about **620,000**, projected to reach **1.1 million** in the future[48](index=48&type=chunk) - The new "Jiayangli" shopping center, with approximately **40,000 square meters** of commercial area, has entered the detailed public area renovation and brand recruitment phase, expected to open by the end of 2025[49](index=49&type=chunk) [Cost-Saving and Revenue-Generating Initiatives](index=18&type=section&id=3.2.5%20%E5%BC%80%E6%BA%90%E8%8A%82%E6%B5%81%E6%96%B9%E6%A1%88) The Group implemented cost-saving and revenue-generating measures, including expanding income channels (e.g., pop-up stores, toy rentals, joint supermarket vouchers), enhancing member loyalty, utilizing idle spaces for events, and reducing operating costs through smart management and strict control of non-essential expenses, while also terminating some underperforming retail store leases - The Group enhances cash flow through business synergy and value-added services, strengthening the "supermarket driving shopping center" revenue effect, and introducing high-frequency consumption formats like pop-up stores and children's toy rentals[50](index=50&type=chunk) - Member loyalty is enhanced by launching "shopping center + supermarket" co-branded membership cards and utilizing idle spaces for corporate marketing, community markets, and other activities[50](index=50&type=chunk) - Operating costs are reduced through intelligent management, such as using AI systems for smart control of mall equipment, streamlining marketing material costs, and strictly controlling non-essential expenses[50](index=50&type=chunk) - Due to poor performance, the Group terminated the lease for its retail store at Jiangnan Times Square, Bantian, Longgang District, Shenzhen, in February 2025[50](index=50&type=chunk) [Outlook and Strategy](index=19&type=section&id=3.3%20%E5%B1%95%E6%9C%9B%E4%B8%8E%E6%88%98%E7%95%A5) Facing both opportunities and challenges in 2025, the Group is prepared to leverage its industry strengths, embrace retail transformation, improve operations, expand revenue through innovation, mergers, and acquisitions, and develop new business opportunities to enhance company value - The Group's team is fully prepared to face all difficulties, leveraging its industry strengths to stand out[51](index=51&type=chunk) - The Group will actively follow the current retail industry's transformation trends, innovate, and continue to improve operational performance and expand revenue through mergers and acquisitions[51](index=51&type=chunk) - The Group will also continue to develop new business opportunities to expand assets and enhance company value[51](index=51&type=chunk) [Financial Review](index=19&type=section&id=IV.%20%E8%B4%A2%E5%8A%A1%E5%9B%9E%E9%A1%B5) This section analyzes the Group's revenue, other operating income, costs, expenses, operating loss, and loss attributable to shareholders [Revenue Analysis](index=19&type=section&id=4.1%20%E6%94%B6%E5%85%A5%E5%88%86%E6%9E%90) Total revenue decreased by 14.5% to RMB 177.6 million, primarily due to a general decline in sales of goods, concessionaire commissions, and rental income from sub-leased properties, reflecting a weak economic environment and reduced consumer spending - Total revenue was approximately **RMB 177.6 million**, a **14.5%** decrease compared to the same period in 2024[52](index=52&type=chunk) - Sales of goods decreased by approximately **RMB 22.2 million** (a **24.8%** decline), mainly due to the generally poor economic conditions and weak local community consumption sentiment[52](index=52&type=chunk) - Commission income from concessionaire sales decreased by **10.9%**, primarily due to some concessionaires shifting to direct sales and an increase in Guangdong's unemployment rate[53](index=53&type=chunk) - Rental income from sub-leased shop properties decreased by **9.8%**, mainly because some tenants' rental collection methods changed from basic rent to contingent rent, coupled with unsatisfactory performance[54](index=54&type=chunk) - Rental income from sub-leased shopping mall properties decreased by **5.9%**, primarily due to poor economic conditions, weak consumer sentiment, rental concessions, and vacant properties[55](index=55&type=chunk) [Other Operating Income Analysis](index=20&type=section&id=4.2%20%E5%85%B6%E4%BB%96%E7%BB%8F%E8%90%A5%E6%94%B6%E5%85%A5%E5%88%86%E6%9E%90) Other operating income significantly increased by 58.2% to RMB 36.7 million, primarily driven by a RMB 13.9 million gain from early lease termination - Other operating income increased by approximately **58.2%** from approximately RMB 23.2 million in the same period of 2024 to approximately **RMB 36.7 million** for the six months ended June 30, 2025[56](index=56&type=chunk) - This increase was primarily due to a gain on early termination of leases of approximately **RMB 13.9 million**[56](index=56&type=chunk) [Cost and Expense Analysis](index=20&type=section&id=4.3%20%E6%88%90%E6%9C%AC%E4%B8%8E%E5%BC%80%E6%94%AF%E5%88%86%E6%9E%90) Inventory purchases and changes, staff costs, right-of-use asset depreciation, fixed asset depreciation, operating lease expenses, and finance costs all decreased, reflecting the Group's cost control efforts driven by reduced sales, headcount streamlining, scale reduction, and lower interest rates - Inventory purchases and changes decreased by **32.0%** to **RMB 56.6 million**, primarily due to reduced sales of goods[57](index=57&type=chunk) - Staff costs decreased by **4.5%** to **RMB 33.6 million**, mainly due to headcount streamlining[58](index=58&type=chunk) - Depreciation of right-of-use assets decreased by **9.0%** to **RMB 24.3 million**, primarily due to the scaling down of the procurement center and increased lease terms for older leases last year[59](index=59&type=chunk) - Depreciation of fixed assets decreased by **12.6%** to **RMB 23.6 million**, mainly due to fewer new fixed asset additions[60](index=60&type=chunk) - Operating lease rental expenses decreased to **RMB 3.9 million**, primarily due to rental reductions from landlords[61](index=61&type=chunk) - Interest on lease liabilities and bank borrowings within finance costs decreased by approximately **RMB 5.9 million** and **RMB 0.4 million**, respectively, mainly due to the reduced scale of the distribution center, increased lease terms for older leases, and lower bank loan interest rates and outstanding loan principal[63](index=63&type=chunk) [Operating Loss and Loss Attributable to Shareholders](index=21&type=section&id=4.4%20%E7%BB%8F%E8%90%A5%E4%BA%8F%E6%8D%9F%E4%B8%8E%E8%82%A1%E4%B8%9C%E5%BA%94%E5%8D%A0%E4%BA%8F%E6%8D%9F) Operating loss significantly narrowed to RMB 3.5 million from RMB 24.9 million in the prior period, with income tax expense decreasing to RMB 53 thousand, resulting in a substantial reduction in loss attributable to shareholders to RMB 3.6 million from RMB 25.4 million - Operating loss significantly narrowed to approximately **RMB 3.5 million** from RMB 24.9 million in the prior period[64](index=64&type=chunk) - Income tax expense decreased to **RMB 53 thousand**, primarily due to reduced assessable profits of subsidiaries during the period[65](index=65&type=chunk) - Loss attributable to shareholders decreased to approximately **RMB 3.6 million**, compared to a loss of approximately RMB 25.4 million in the same period of 2024[66](index=66&type=chunk) [Risk Management](index=22&type=section&id=V.%20%E9%A3%8E%E9%99%A9%E7%AE%A1%E7%90%86) This section outlines the Group's exposure to and management of foreign exchange, credit, interest rate, and liquidity risks [Foreign Exchange Risk](index=22&type=section&id=5.1%20%E5%A4%96%E6%B1%87%E9%A3%8E%E9%99%A9) The Group's revenue, expenses, and cash flows are primarily denominated in RMB, while most assets and liabilities are in RMB and HKD, making it susceptible to significant fluctuations in foreign currency exchange rates against RMB - Most of the Group's income, expenses, and cash flows are denominated in RMB, while most assets and liabilities are denominated in RMB and HKD[69](index=69&type=chunk) - Any significant fluctuation in foreign currency exchange rates against RMB could have a financial impact on the Group[69](index=69&type=chunk) [Credit Risk](index=22&type=section&id=5.2%20%E4%BF%A1%E8%B4%B7%E9%A3%8E%E9%99%A9) The Group's primary credit risk stems from cash and bank deposits, trade and loan receivables, and other receivables, managed through strict credit assessment, rental deposits, and continuous monitoring, with no significant credit concentration - The Group's maximum credit risk exposure is from the carrying amounts of cash and bank deposits, trade and loan receivables, and deposits paid and other receivables[70](index=70&type=chunk) - The Group has no significant concentration of credit risk, as most sales transactions are settled by cash, credit card, or online payment platforms[70](index=70&type=chunk)[71](index=71&type=chunk) - The Group maintains clear credit policies, including strict credit assessments and collecting rental deposits from tenants, and regularly reviews and closely monitors receivables[71](index=71&type=chunk) [Interest Rate Risk](index=23&type=section&id=5.3%20%E5%88%A9%E7%8E%87%E9%A3%8E%E9%99%A9) The Group's interest rate risk primarily arises from cash and bank balances, with no derivative instruments or specific policies currently in place to hedge or manage this risk - The Group's interest rate risk primarily arises from cash and bank balances[72](index=72&type=chunk) - The Group does not use any derivative contracts to hedge its interest rate risk and has not formulated a policy to manage interest rate risk[72](index=72&type=chunk) [Liquidity Risk](index=23&type=section&id=5.4%20%E6%B5%81%E5%8A%A8%E6%80%A7%E9%A3%8E%E9%99%A9) The Group's policy is to maintain sufficient cash and bank balances and secure funding for working capital needs, with the Board confident in its ability to meet financial obligations and ensure continuous operation for shareholder returns - The Group's policy is to maintain sufficient cash and bank balances and obtain funding to meet its working capital requirements[73](index=73&type=chunk) - The Company's directors are satisfied that the Group will be able to fully meet its financial obligations as they fall due in the foreseeable future[73](index=73&type=chunk) - The Group's capital management policy is to safeguard its ability to continue as a going concern, to provide returns for shareholders, and to balance the interests of other stakeholders[73](index=73&type=chunk) [Other Information](index=23&type=section&id=VI.%20%E5%85%B6%E4%BB%96%E4%BF%A1%E6%81%AF) This section covers employee information, use of listing proceeds, contingent liabilities, securities trading, corporate governance, and board details [Employee Information and Remuneration Policy](index=23&type=section&id=6.1%20%E9%9B%87%E5%91%98%E8%B5%84%E6%96%99%E5%8F%8A%E8%96%AA%E9%85%AC%E6%94%BF%E7%AD%96) As of June 30, 2025, the Group had 609 full-time employees, a decrease from the prior year, with remuneration determined and regularly reviewed based on individual performance, qualifications, industry experience, and market trends - As of June 30, 2025, the Group had **609** full-time employees (June 30, 2024: 623 employees)[74](index=74&type=chunk) - Employee remuneration is determined based on individual performance, professional qualifications, industry experience, and relevant market trends[74](index=74&type=chunk) - Remuneration includes salaries, allowances, year-end bonuses, social insurance, or mandatory provident funds[74](index=74&type=chunk) [Use of Listing Proceeds](index=23&type=section&id=6.2%20%E4%B8%8A%E5%B8%82%E6%89%80%E5%BE%97%E6%AC%BE%E9%A1%B9%E7%94%A8%E9%80%94) The Company raised approximately HKD 265 million net from its May 8, 2007 listing; as of June 30, 2025, HKD 240.082 million was utilized for retail acquisitions, new store openings, shopping centers, distribution centers, equipment, IT system improvements, and renovations, with HKD 24.918 million remaining in bank deposits - The Company raised net proceeds of approximately **HKD 265 million** from its listing on May 8, 2007[75](index=75&type=chunk) - As of June 30, 2025, approximately **HKD 240.082 million** of the proceeds had been utilized, with approximately **HKD 24.918 million** of unutilized funds held in bank deposits[75](index=75&type=chunk) - Utilized proceeds were primarily for acquiring retail chain businesses in Shenzhen, China, opening new stores, shopping centers, themed restaurants, distribution centers, purchasing transportation vehicles and office equipment, improving management information systems, and renovating existing retail stores[76](index=76&type=chunk)[83](index=83&type=chunk) [Contingent Liabilities](index=25&type=section&id=6.3%20%E6%88%96%E7%84%B6%E8%B4%9F%E5%80%BA) As of June 30, 2025, the Group had no significant contingent liabilities - As of June 30, 2025, the Group had no significant contingent liabilities[78](index=78&type=chunk) [Securities Transactions and Corporate Governance](index=25&type=section&id=6.4%20%E8%AF%81%E5%88%B8%E4%BA%A4%E6%98%93%E4%B8%8E%E4%BC%81%E4%B8%9A%E7%AE%A1%E6%B2%BB) The Group did not trade or redeem any listed securities during the period, and the company complies with the HKEX Corporate Governance Code (except for the Chairman's absence from the AGM) and the Model Code for Securities Transactions, with established Remuneration, Nomination, and Audit Committees ensuring good governance [Purchase, Sale or Redemption of Listed Securities](index=25&type=section&id=6.4.1%20%E8%B4%AD%E4%B9%B0%E3%80%81%E5%87%BA%E5%94%AE%E6%88%96%E8%B5%8E%E5%9B%9E%E4%B8%8A%E5%B8%82%E8%AF%81%E5%88%B8) Neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities during the period - Neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities during the period[79](index=79&type=chunk) [Corporate Governance Code](index=25&type=section&id=6.4.2%20%E4%BC%81%E4%B8%9A%E7%AE%A1%E6%B2%BB%E5%AE%88%E5%88%99) The Company has adopted and complied with the Corporate Governance Code, except for the Chairman's absence from the AGM on June 11, 2025, due to other commitments - The Company has adopted and complied with the Corporate Governance Code set out in Appendix C1 to the Listing Rules of the Stock Exchange[80](index=80&type=chunk) - Mr. Zhuang Lukun, the Chairman of the Board, was unable to attend the Company's Annual General Meeting held on June 11, 2025, due to other business commitments[80](index=80&type=chunk) [Model Code for Securities Transactions](index=25&type=section&id=6.4.3%20%E8%AF%81%E5%88%B8%E4%BA%A4%E6%98%93%E6%A0%87%E5%87%86%E5%AE%88%E5%88%99) The Board adopted and confirmed full compliance with the Model Code for Securities Transactions by Directors of Listed Issuers during the period - The Board has adopted the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix C3 to the Listing Rules[81](index=81&type=chunk) - Following specific and detailed enquiries with all Directors, the Company confirmed that all Directors fully complied with the required standards set out in the Model Code during the six months ended June 30, 2025[81](index=81&type=chunk) [Remuneration Committee](index=25&type=section&id=6.4.4%20%E8%96%AA%E9%85%AC%E5%A7%94%E5%91%98%E4%BC%9A) Established on April 30, 2007, the Remuneration Committee, comprising four independent non-executive directors and one executive director, is responsible for reviewing and determining remuneration policies for directors and senior management - The Company established a Remuneration Committee on April 30, 2007[82](index=82&type=chunk) - The Remuneration Committee comprises four independent non-executive directors and one executive director, responsible for reviewing and determining appropriate remuneration policies for directors and senior management[82](index=82&type=chunk) [Nomination Committee](index=26&type=section&id=6.4.5%20%E6%8F%90%E5%90%8D%E5%A7%94%E5%91%98%E4%BC%9A) Established on April 30, 2007, the Nomination Committee, consisting of four independent non-executive directors, is responsible for setting selection criteria, reviewing board nominations, and making recommendations - The Company established a Nomination Committee on April 30, 2007[84](index=84&type=chunk) - The Nomination Committee comprises four independent non-executive directors, responsible for determining criteria for selecting qualified candidates, reviewing nominations for appointment to the Board, and making recommendations on any proposed changes[84](index=84&type=chunk) [Audit Committee](index=26&type=section&id=6.4.6%20%E5%AE%A1%E6%A0%B8%E5%A7%94%E5%91%98%E4%BC%9A) The Audit Committee, composed of four independent non-executive directors with Mr. Qian Jinxiang as Chairman, independently reviews financial position, monitors financial reporting, risk management, and internal control systems, and reviewed the unaudited interim results - The Audit Committee comprises four independent non-executive directors, with Mr. Qian Jinxiang serving as Chairman[85](index=85&type=chunk) - Its primary responsibilities include independently reviewing the Company's financial position, monitoring financial reporting systems, risk management, and internal control systems[85](index=85&type=chunk) - The Audit Committee reviewed the unaudited interim results for the six months ended June 30, 2025[85](index=85&type=chunk) [Interim Report and Board Information](index=26&type=section&id=6.5%20%E4%B8%AD%E6%9C%9F%E6%8A%A5%E5%91%8A%E4%B8%8E%E8%91%A3%E4%BA%8B%E4%BC%9A%E4%BF%A1%E6%81%AF) The 2025 interim report will be dispatched to shareholders and published on the HKEX and company websites in due course; external auditors did not review or audit the interim results, and the Board comprises executive, non-executive, and independent non-executive directors - The 2025 interim report will be dispatched to shareholders and published on the HKEX website and the Company's website in due course[86](index=86&type=chunk) - The external auditors did not review or audit the interim results and interim report[87](index=87&type=chunk) - The Board members include Executive Directors Zhuang Lukun, Zhuang Peizhong, Zhuang Xiaoxiong; Non-executive Director Yan Xiaomin; and Independent Non-executive Directors Qian Jinxiang, Sun Juyi, Ai Ji, and Xing Zijun[88](index=88&type=chunk)

[Financial Highlights](index=1&type=section&id=%E8%B2%A1%E5%8B%99%E6%91%98%E8%A6%81) The Group achieved significant performance growth in the first half of 2025, with profit attributable to shareholders increasing by 94.9% year-on-year, alongside robust growth in total assets and total equity attributable to shareholders | Indicator | H1 2025 (HKD) | H1 2024 (HKD) | YoY Change | | :--- | :--- | :--- | :--- | | Profit attributable to shareholders | HKD 64.87 million | HKD 33.29 million | +94.9% | | Basic earnings per share | 10.86 HK cents | 5.57 HK cents | +94.9% | | Total assets | HKD 9.34 billion | HKD 8.92 billion (End of 2024) | +4.7% | | Total equity attributable to shareholders | HKD 8.22 billion | HKD 7.82 billion (End of 2024) | +5.1% | [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) This section presents the Group's unaudited condensed consolidated statement of profit or loss, statement of comprehensive income, and statement of financial position for the six months ended June 30, 2025, comprehensively illustrating the Group's financial performance and position during the period [Condensed Consolidated Statement of Profit or Loss](index=2&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E6%90%8D%E7%9B%8A%E8%A1%A8) The Group's total revenue increased to HKD 109,988 thousand in H1 2025, with operating profit turning from a loss to a profit of HKD 23,776 thousand, and profit for the period significantly growing by 94.9% to HKD 64,868 thousand | Indicator | H1 2025 (HKD thousands) | H1 2024 (HKD thousands) | | :--- | :--- | :--- | | Total revenue | 109,988 | 103,301 | | Operating income | 124,357 | 121,948 | | Operating profit/(loss) | 23,776 | (13,851) | | Profit before tax | 69,140 | 36,629 | | Profit for the period | 64,868 | 33,292 | | Basic and diluted earnings per share | 10.86 HK cents | 5.57 HK cents | [Condensed Consolidated Statement of Comprehensive Income](index=3&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E5%85%A8%E9%9D%A2%E6%94%B6%E7%9B%8A%E8%A1%A8) The Group's total comprehensive income significantly increased to HKD 399,226 thousand in H1 2025, primarily due to a substantial positive change in foreign currency translation reserve, reversing the negative value from the prior period | Indicator | H1 2025 (HKD thousands) | H1 2024 (HKD thousands) | | :--- | :--- | :--- | | Profit for the period | 64,868 | 33,292 | | Fair value reserve changes, net of tax | 51,382 | 127,490 | | Foreign currency translation reserve changes | 213,484 | (150,686) | | Other comprehensive income for the period, net of tax | 334,358 | (16,373) | | Total comprehensive income for the period | 399,226 | 16,919 | [Condensed Consolidated Statement of Financial Position](index=4&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, the Group's total assets increased by 4.7% to HKD 9,344,397 thousand compared to the end of 2024, with total equity attributable to shareholders rising by 5.1% to HKD 8,217,373 thousand, and total liabilities also slightly increasing | Indicator | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | | :--- | :--- | :--- | | Total assets | 9,344,397 | 8,915,071 | | Investments in associates | 6,679,582 | 6,360,035 | | Total equity attributable to shareholders | 8,217,373 | 7,818,147 | | Total liabilities | 1,127,024 | 1,096,924 | [Notes](index=6&type=section&id=%E8%A8%BB%E9%87%8B) This section elaborates on the basis of preparation, accounting policies, segment information, and specific components and changes of various financial items in the Group's interim financial statements, providing necessary supplementary information for understanding the financial statements [Basis of Preparation of the Condensed Consolidated Financial Statements and Significant Accounting Policies Information](index=6&type=section&id=1%20%E7%B7%A8%E8%A3%BD%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8%E5%9F%BA%E6%BA%96%E5%8F%8A%E9%87%8D%E5%A4%A7%E6%9C%83%E8%A8%88%E6%94%BF%E7%AD%96%E8%B3%87%E6%96%99) The Group's interim financial statements are prepared in accordance with HKAS 34 and consistent with the accounting policies in the 2024 annual report, with only the adoption of HKAS 21 amendments on lack of exchangeability, which had no significant impact - Financial statements are prepared in accordance with the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited and Hong Kong Accounting Standard 34 "Interim Financial Reporting" issued by the Hong Kong Institute of Certified Public Accountants[11](index=11&type=chunk) - The adoption of amendments to HKAS 21 "Lack of Exchangeability" had no significant impact on the results and financial position for the current or prior periods[13](index=13&type=chunk) [Segment Information](index=7&type=section&id=2%20%E5%88%86%E9%83%A8%E8%B3%87%E6%96%99) The Group's business is segmented into financial services, insurance, property investment, and strategic investments based on internal reporting to the chief operating decision maker, with detailed disclosures on each segment's performance, assets, liabilities, and geographical distribution [Segment Results, Assets and Liabilities](index=8&type=section&id=2%20(a)%20%E5%88%86%E9%83%A8%E6%A5%AD%E7%B8%BE%E3%80%81%E8%B3%87%E7%94%A2%E5%8F%8A%E8%B2%A0%E5%82%B5) The financial services segment's operating profit significantly increased to HKD 7,839 thousand (H1 2024: loss of HKD 21,412 thousand), and the insurance segment's operating profit rose to HKD 10,309 thousand, with changes in total assets and liabilities across all segments | Segment | H1 2025 Operating Profit/(Loss) (HKD thousands) | H1 2024 Operating Profit/(Loss) (HKD thousands) | June 30, 2025 Total Assets (HKD thousands) | December 31, 2024 Total Assets (HKD thousands) | | :--- | :--- | :--- | :--- | :--- | | Financial Services | 7,839 | (21,412) | 6,702,131 | 6,376,712 | | Insurance | 10,309 | 5,578 | 618,575 | 534,400 | | Property Investment | 548 | (1,440) | 40,624 | 41,047 | | Strategic Investments | 4,901 | 4,879 | 711,970 | 664,880 | | Corporate Activities | 224 | (1,406) | 1,273,934 | 1,301,749 | | Consolidated | 23,776 | (13,851) | 9,344,397 | 8,915,071 | [Geographical Information](index=10&type=section&id=2%20(b)%20%E5%9C%B0%E5%8D%80%E8%B3%87%E6%96%99) In H1 2025, the Group's external customer revenue primarily originated from Hong Kong (HKD 47,615 thousand) and Macau (HKD 55,138 thousand), with Mainland China contributing HKD 7,235 thousand, and designated non-current assets mainly concentrated in Mainland China, totaling HKD 6,735,256 thousand | Region | H1 2025 External Customer Revenue (HKD thousands) | H1 2024 External Customer Revenue (HKD thousands) | June 30, 2025 Designated Non-current Assets (HKD thousands) | December 31, 2024 Designated Non-current Assets (HKD thousands) | | :--- | :--- | :--- | :--- | :--- | | Hong Kong | 47,615 | 43,456 | 132,220 | 134,816 | | Mainland China | 7,235 | 2,326 | 6,735,256 | 6,416,312 | | Macau | 55,138 | 57,519 | 434 | 876 | | Consolidated | 109,988 | 103,301 | 6,867,910 | 6,552,004 | - The Group's principal reportable segments include financial services (banking, micro-credit), insurance, property investment, and strategic investments[16](index=16&type=chunk) - Inter-segment transactions are priced at market terms, with revenues and expenses eliminated in the consolidated accounts[17](index=17&type=chunk) [Other Income](index=11&type=section&id=3%20%E5%85%B6%E4%BB%96%E6%94%B6%E5%85%A5) The Group's total other income for H1 2025 was HKD 14,369 thousand, a decrease from HKD 18,647 thousand in the prior period, mainly due to lower interest income from bank deposits | Income Source | H1 2025 (HKD thousands) | H1 2024 (HKD thousands) | | :--- | :--- | :--- | | Interest income from bank deposits | 14,079 | 18,509 | | Dividend income from financial assets at fair value through profit or loss | 114 | 18 | | Total other income | 14,369 | 18,647 | [Other Gains/(Losses) – Net](index=11&type=section&id=4%20%E5%85%B6%E4%BB%96%E6%94%B6%E7%9B%8A%E2%88%95%EF%BC%88%E虧%E6%90%8D%EF%BC%89%EF%BC%8D%20%E6%B7%A8%E9%A1%8D) The Group's net other gains for H1 2025 amounted to HKD 9,430 thousand, a significant improvement from a loss of HKD 24,264 thousand in the prior period, primarily driven by a substantial contribution from net exchange gains | Item | H1 2025 (HKD thousands) | H1 2024 (HKD thousands) | | :--- | :--- | :--- | | Realised and unrealised net gains from financial assets at fair value through profit or loss | 2,113 | 5,880 | | Fair value loss on investment properties | (2,368) | (2,297) | | Net exchange gains/(losses) | 9,653 | (28,072) | | Other gains/(losses) – Net | 9,430 | (24,264) | [Operating Profit/(Loss)](index=12&type=section&id=5%20%E7%87%9F%E6%A5%AD%E6%BA%A2%E5%88%A9%E2%88%95%EF%BC%88%E虧%E6%90%8D%EF%BC%89) The Group's operating profit for H1 2025 was HKD 23,776 thousand, primarily contributed by net exchange gains of HKD 9,653 thousand, while staff costs (including directors' emoluments) increased to HKD 26,322 thousand | Item | H1 2025 (HKD thousands) | H1 2024 (HKD thousands) | | :--- | :--- | :--- | | Net exchange gains | 9,653 | – | | Rental income from investment properties | 4,310 | 3,476 | | Staff costs (including directors' emoluments) | 26,322 | 17,362 | | Depreciation and amortisation | 1,424 | 1,356 | [Finance Costs](index=12&type=section&id=6%20%E8%9E%8D%E8%B3%87%E6%88%90%E6%9C%AC) The Group's total finance costs for H1 2025 amounted to HKD 20,137 thousand, a decrease from HKD 22,561 thousand in the prior period, mainly due to reduced interest expense on bank borrowings | Item | H1 2025 (HKD thousands) | H1 2024 (HKD thousands) | | :--- | :--- | :--- | | Interest expense on bank borrowings | 17,971 | 22,520 | | Interest expense on loans from controlling shareholder | 2,115 | – | | Total finance costs | 20,137 | 22,561 | [Income Tax Expense](index=13&type=section&id=7%20%E6%89%80%E5%BE%97%E7%A8%85%E6%94%AF%E5%87%BA) The Group's income tax expense for H1 2025 was HKD 4,272 thousand, an increase from HKD 3,337 thousand in the prior period, primarily comprising Mainland China corporate income tax and Macau taxes | Tax Type | H1 2025 (HKD thousands) | H1 2024 (HKD thousands) | | :--- | :--- | :--- | | Hong Kong profits tax | 115 | 142 | | Mainland China corporate income tax | 2,053 | 2,639 | | Mainland China withholding income tax | 747 | – | | Macau taxes | 1,414 | 1,609 | | Total income tax expense | 4,272 | 3,337 | [Earnings Per Share](index=14&type=section&id=8%20%E6%AF%8F%E8%82%A1%E7%9B%88%E5%88%A9) The Group's basic earnings per share for H1 2025 was 10.86 HK cents, a significant increase from 5.57 HK cents in the prior period, primarily based on profit attributable to shareholders of HKD 64.868 million | Indicator | H1 2025 | H1 2024 | | :--- | :--- | | Basic earnings per share | 10.86 HK cents | 5.57 HK cents | | Profit attributable to shareholders | HKD 64.868 million | HKD 33.292 million | | Weighted average number of ordinary shares in issue | 597,257,252 shares | 597,257,252 shares | [Dividends](index=14&type=section&id=9%20%E8%82%A1%E6%81%AF) The Board of Directors resolved not to declare an interim dividend for the six months ended June 30, 2025, consistent with the prior period - The Board of Directors resolved not to declare an interim dividend for H1 2025[31](index=31&type=chunk) [Credit-Impaired Customer Loans and Interest Receivables](index=14&type=section&id=10%20%E5%B7%B2%E4%BF%A1%E8%B2%B8%E6%B8%9B%E5%80%BC%E7%9A%84%E5%AE%A2%E6%88%B6%E8%B2%B8%E6%AC%BE%E5%8F%8A%E6%87%89%E6%94%B6%E5%88%A9%E6%81%AF) As of June 30, 2025, net credit-impaired customer loans and interest receivables amounted to HKD 9,042 thousand, a decrease from HKD 11,257 thousand at the end of 2024, with the Group having initiated legal proceedings and obtained effective legal documents for all impaired loan items | Item | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | | :--- | :--- | :--- | | Credit-impaired customer loans | 151,378 | 152,285 | | Credit-impaired interest receivables | 6,934 | 6,986 | | Impairment allowance | (149,270) | (148,014) | | Net amount | 9,042 | 11,257 | - The Group has initiated legal proceedings against borrowers for all credit-impaired loan items and obtained effective legal documents[32](index=32&type=chunk) [Chairman's Statement](index=15&type=section&id=%E4%B8%BB%E5%B8%AD%E5%A0%B1%E5%91%8A%E6%9B%B8) The Chairman's Statement highlights the Group's significant performance growth in a challenging macroeconomic environment through prudent operations and diversified income strategies, summarizes the performance of key business segments (financial services and insurance), and expresses optimism for future growth prospects [Macroeconomic Environment and Group Strategy](index=15&type=section&id=%E5%AE%8F%E8%A7%80%E7%B6%93%E6%BF%9F%E7%92%B0%E5%A2%83%E8%88%87%E9%9B%86%E5%9C%98%E7%AD%96%E7%95%A5) Facing global economic volatility and geopolitical tensions, the Group adheres to prudent business development and diversified income sources to enhance core competitiveness and navigate uncertainties - Global economy remains volatile, with geopolitical tensions and complex trade environments impacting global markets[33](index=33&type=chunk) - The Group focuses on key strategic actions, prudently developing businesses and diversifying income sources to pursue performance growth[33](index=33&type=chunk) [Overall Performance](index=15&type=section&id=%E6%95%B4%E9%AB%94%E6%A5%AD%E7%B8%BE%E8%A1%A8%E7%8F%BE) The Group's profit attributable to shareholders for H1 2025 significantly increased by 94.9% year-on-year to HKD 64.87 million, primarily due to exchange gains from RMB appreciation against HKD and the elimination of a one-off exchange loss in the prior period, with total assets growing by 4.7% to HKD 9.34 billion | Indicator | H1 2025 (HKD) | H1 2024 (HKD) | YoY Change | | :--- | :--- | :--- | :--- | | Profit attributable to shareholders | HKD 64.87 million | HKD 33.29 million | +94.9% | | Basic earnings per share | 10.86 HK cents | 5.57 HK cents | +94.9% | | Total assets (Period-end) | HKD 9.34 billion | HKD 8.92 billion (End of 2024) | +4.7% | - Profit growth was mainly due to exchange gains from the appreciation of RMB against HKD, and the non-recurrence of a one-off exchange loss of approximately HKD 21.93 million in H1 2024 due to the reduction of paid-up capital by Sanyuan Micro-Credit[34](index=34&type=chunk) [Business Review](index=15&type=section&id=%E4%B8%BB%E8%A6%81%E6%A5%AD%E5%8B%99%E5%9B%9E%E9%A1%A7) Xiamen International Bank Group contributed 97% of the Group's performance, despite a 13.4% year-on-year decrease in its profit after tax, while Minxin Insurance's insurance service results significantly grew by 157.8% and received additional capital injection to support long-term development [Financial Services](index=15&type=section&id=%E9%87%91%E8%9E%8D%E6%9C%8D%E5%8B%99) Xiamen International Bank Group, the Group's most significant financial investment, contributed approximately 97% of the Group's performance, though its share of profit after tax decreased by 13.4% year-on-year, while Xiamen Bank Group's total assets grew steadily by 1% and continued to advance its overseas Chinese financial strategy, ranking among the top 200 global banks - Xiamen International Bank Group contributed approximately **97%** of the Group's performance[35](index=35&type=chunk) | Indicator | H1 2025 | H1 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Share of Xiamen Bank Group's profit after tax | HKD 62.92 million | HKD 72.66 million | -13.4% | - Xiamen Bank Group's total assets increased by **1%** to RMB 1,152.53 billion as of June 30, 2025[35](index=35&type=chunk) - Xiamen Bank Group ranked 160th (by total assets) and 181st (by Tier 1 capital) in the "2025 Top 1000 World Banks" ranking, continuously strengthening its overseas Chinese financial strategy[36](index=36&type=chunk) [Insurance Business](index=16&type=section&id=%E4%BF%9D%E9%9A%AA%E6%A5%AD%E5%8B%99) Minxin Insurance Company Limited maintained a B++ (Good) financial strength rating, with its insurance service results significantly increasing by 157.8% year-on-year to HKD 13.43 million, primarily due to reduced claims costs, and the Group has injected HKD 60 million in additional capital, with plans for another HKD 60 million in 2026 to support business development - Minxin Insurance maintained a B++ (Good) financial strength rating and bbb+ (Good) long-term issuer credit rating from A.M. Best, with a stable outlook[37](index=37&type=chunk) | Indicator | H1 2025 (HKD) | H1 2024 (HKD) | YoY Change | | :--- | :--- | :--- | :--- | | Insurance service results | HKD 13.43 million | HKD 5.21 million | +157.8% | | Insurance finance expenses | HKD 3.67 million | HKD 0.59 million | +522% | - An additional capital injection of **HKD 60 million** has been made, with another **HKD 60 million** expected in 2026 to support the long-term development of the insurance business[37](index=37&type=chunk) [Outlook](index=17&type=section&id=%E5%B1%95%E6%9C%9B) The Group is optimistic about long-term growth prospects, committed to prudent risk management, strengthening core competitiveness, integrating resources, leveraging growth opportunities in Greater China, and enhancing profitability and shareholder value - The Group is optimistic about long-term growth prospects and will continue to strengthen core competitiveness and enhance risk management[39](index=39&type=chunk) - The Group will integrate resources, fully leverage continuous growth opportunities in Greater China, enhance profitability, and create maximum shareholder value[39](index=39&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%E5%8F%8A%E5%88%86%E6%9E%90) This section provides a detailed analysis of the Group's operating results for H1 2025 and an in-depth discussion of the performance of key business segments, including financial services (banking and micro-credit), insurance, strategic investments (Huaneng A shares), and property investment, explaining the key drivers and financial changes for each business [Business Review](index=18&type=section&id=%E6%A5%AD%E5%8B%99%E5%9B%9E%E9%A1%A7) The Group's performance benefited from the appreciation of RMB against HKD and the elimination of a one-off exchange loss in the prior period, while the overall economic outlook remains uncertain - The Group's performance benefited from the appreciation of RMB against HKD and the reduction of a one-off exchange loss recognized in the prior period[40](index=40&type=chunk) [Operating Results](index=18&type=section&id=%E7%B6%93%E7%87%9F%E6%A5%AD%E7%B8%BE) The Group's profit attributable to shareholders for H1 2025 significantly increased by 94.9% year-on-year to HKD 64.87 million, with basic earnings per share rising to 10.86 HK cents, primarily attributed to exchange gains and the elimination of a one-off loss in the prior period | Indicator | H1 2025 (HKD) | H1 2024 (HKD) | YoY Change | | :--- | :--- | :--- | :--- | | Profit attributable to shareholders | HKD 64.87 million | HKD 33.29 million | +94.9% | | Basic earnings per share | 10.86 HK cents | 5.57 HK cents | +5.29 HK cents | - Profit growth was mainly due to exchange gains from the appreciation of RMB against HKD, and the non-recurrence of a one-off exchange loss of approximately HKD 21.93 million in H1 2024 due to the reduction of paid-up capital by Sanyuan Micro-Credit[41](index=41&type=chunk) [Segment Business Analysis](index=18&type=section&id=%E5%88%86%E9%83%A8%E6%A5%AD%E5%8B%99%E5%88%86%E6%9E%90) This section provides a detailed analysis of the Group's key business segments, including financial services (banking and micro-credit), insurance, strategic investments (Huaneng A shares), and property investment, revealing changes in revenue, profit, assets, liabilities, and key operating indicators for each business [Financial Services](index=18&type=section&id=%E9%87%91%E8%9E%8D%E6%9C%8D%E5%8B%99) Financial services business profit after tax increased by 38.1% to HKD 70.75 million in H1 2025, primarily due to the reduction of a one-off exchange loss in the prior period | Indicator | H1 2025 (HKD) | H1 2024 (HKD) | YoY Change | | :--- | :--- | :--- | :--- | | Profit after tax | HKD 70.75 million | HKD 51.24 million | +38.1% | - Profit increase was mainly due to the reduction of a one-off exchange loss recognized in the prior period[42](index=42&type=chunk) [Banking Business](index=18&type=section&id=%E9%8A%80%E8%A1%8C%E6%A5%AD%E5%8B%99) Xiamen International Bank Group's profit after tax decreased by 12.8% year-on-year to RMB 671.32 million in H1 2025, but net interest income slightly increased by 0.4%, and non-interest income significantly rose by 67.2%, with total assets growing steadily by 1%, customer loans slightly decreasing by 0.7%, and the ratio of total impaired loans to total customer loans decreasing by 0.05 percentage points to 2.31% | Indicator | H1 2025 (RMB) | H1 2024 (RMB) | YoY Change | | :--- | :--- | :--- | :--- | | Profit after tax | RMB 671.32 million | RMB 769.59 million | -12.8% | | Net interest income | Increased by 0.4% | | | | Non-interest income | Increased by 67.2% | | | - Xiamen Bank Group's total assets increased by **1%** to RMB 1,152.53 billion; customer loans decreased by **0.7%** to RMB 590.47 billion[44](index=44&type=chunk) - The ratio of total impaired loans to total customer loans decreased by **0.05 percentage points** to **2.31%**[44](index=44&type=chunk) [Micro-Credit Business](index=19&type=section&id=%E5%B0%8F%E9%A1%8D%E8%B2%B8%E6%AC%BE%E6%A5%AD%E5%8B%99) Sanyuan Micro-Credit's profit after tax significantly increased to RMB 7.28 million in H1 2025, with the balance of impaired loans decreasing by 3.4% to RMB 138.37 million, and the company actively recovering impaired loans, having also applied for a further reduction in paid-up capital | Indicator | H1 2025 (RMB) | H1 2024 (RMB) | | :--- | :--- | | Profit after tax | RMB 7.28 million | RMB 0.48 million | | Balance of impaired loans (Period-end) | RMB 138.37 million | RMB 143.24 million (End of 2024) | - Sanyuan Micro-Credit recovered **RMB 4.87 million** in principal and **RMB 5.10 million** in interest income from impaired loans[45](index=45&type=chunk) - An application has been submitted for a further reduction in paid-up capital of **RMB 40 million**[45](index=45&type=chunk) [Insurance Business](index=20&type=section&id=%E4%BF%9D%E9%9A%AA%E6%A5%AD%E5%8B%99) Minxin Insurance's insurance service results significantly grew by 157.8% to HKD 13.43 million in H1 2025, with profit after tax increasing by 120.1% to HKD 8.76 million, primarily due to reduced claims costs, and the company has received an additional capital injection of HKD 60 million | Indicator | H1 2025 (HKD) | H1 2024 (HKD) | YoY Change | | :--- | :--- | :--- | :--- | | Insurance revenue | HKD 90.46 million | HKD 91.91 million | -1.6% | | Insurance service results | HKD 13.43 million | HKD 5.21 million | +157.8% | | Profit after tax | HKD 8.76 million | HKD 3.98 million | +120.1% | - Profit growth was mainly due to reduced claims costs[46](index=46&type=chunk) - An additional capital injection of **HKD 60 million** has been made to support business development[46](index=46&type=chunk) [Strategic Investments](index=20&type=section&id=%E7%AD%96%E7%95%A5%E6%8A%95%E8%B3%87) The fair value of the Group's Huaneng A shares increased, with a net fair value change gain of HKD 41.70 million recognized in other comprehensive income in H1 2025, and Huaneng International Power Co., Ltd. itself achieved a 24.3% growth in profit attributable to shareholders - The closing bid price of Huaneng A shares increased, with fair value reaching **HKD 530.78 million**[48](index=48&type=chunk) | Indicator | H1 2025 (HKD) | H1 2024 (HKD) | | :--- | :--- | | Net fair value change gain on Huaneng A shares | HKD 41.70 million | HKD 127.82 million | - Huaneng International Power Co., Ltd.'s profit attributable to shareholders increased by **24.3%** to RMB 9.26 billion in H1 2025[49](index=49&type=chunk) [Huaneng A Shares](index=20&type=section&id=%E8%8F%AF%E8%83%BDA%E8%82%A1) The fair value of Huaneng A shares increased, with the Group recognizing a net fair value change gain of HKD 41.70 million in other comprehensive income, and Huaneng's own performance was strong, with profit attributable to shareholders growing by 24.3% year-on-year, primarily due to reduced fuel costs and growth in new energy business - The closing bid price of Huaneng A shares increased from RMB 6.77 per share at the end of 2024 to **RMB 7.14 per share** as of June 30, 2025[48](index=48&type=chunk) - Huaneng International Power Co., Ltd.'s profit attributable to shareholders was **RMB 9.26 billion** in H1 2025, a year-on-year increase of **24.3%**[49](index=49&type=chunk) - Huaneng's performance growth was mainly due to reduced fuel costs and orderly expansion of new energy scale[49](index=49&type=chunk) [Property Investment](index=21&type=section&id=%E7%89%A9%E6%A5%AD%E6%8A%95%E8%B3%87) Property investment business achieved a profit after tax of HKD 0.70 million in H1 2025, reversing the loss from the prior period, with Fuzhou property's occupancy rate significantly improving and rental income growing by 26.4%, though fair value slightly decreased | Indicator | H1 2025 (HKD) | H1 2024 (HKD) | | :--- | :--- | | Profit after tax | HKD 0.70 million | (HKD 0.34 million) | - Fuzhou property office occupancy rate increased to **86.4%** (End of 2024: 79.2%), and parking space occupancy rate increased to **91.8%** (End of 2024: 50.4%)[50](index=50&type=chunk) - Rental income increased by **26.4%** to RMB 1.15 million[50](index=50&type=chunk) - Fuzhou property fair value decreased by **1%** to **HKD 40.61 million**[50](index=50&type=chunk) [Financial Review](index=22&type=section&id=%E8%B2%A1%E5%8B%99%E5%9B%9E%E9%A1%A7) This section outlines the Group's financial management strategies, detailing net asset value per share, borrowings, gearing ratios, cash position, exchange rate risk management, capital commitments, and contingent liabilities, along with employee and remuneration policies [Net Asset Value Per Share](index=22&type=section&id=%E6%AF%8F%E8%82%A1%E8%B3%87%E7%94%A2%E6%B7%A8%E5%80%BC) As of June 30, 2025, the Group's net asset value per share was HKD 13.76, an increase from HKD 13.09 as of December 31, 2024 | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Net asset value per share | HKD 13.76 | HKD 13.09 | | Ordinary shares in issue | 597,257,252 shares | 597,257,252 shares | [Borrowings and Pledged Assets](index=22&type=section&id=%E5%80%9F%E6%AC%BE%E5%8F%8A%E8%B3%87%E7%94%A2%E6%8A%B5%E6%8A%BC) The Group's total borrowings increased to HKD 847.63 million, with effective annual interest rates ranging from 1.8% to 4.6%, and certain revolving bank borrowings are secured by the Group's self-occupied office property in Hong Kong, with an additional HKD 15 million in bank deposits pledged as collateral for standby letters of credit | Indicator | June 30, 2025 (HKD) | December 31, 2024 (HKD) | | :--- | :--- | :--- | | Total borrowings | HKD 847.63 million | HKD 836.50 million | | Effective annual interest rate range | 1.8% to 4.6% | 2.7% to 6.3% | | Available revolving bank borrowing facilities | Approx. HKD 192.37 million | | | Available controlling shareholder loan facilities | Approx. HKD 140 million | | - Certain revolving bank borrowings (HKD 229.63 million) are secured by the Group's self-occupied office property in Hong Kong, with a fair value of **HKD 180 million**[54](index=54&type=chunk) - **HKD 15 million** in bank deposits are pledged as collateral for standby letters of credit[55](index=55&type=chunk) [Total Liabilities to Equity Ratio and Gearing Ratio](index=23&type=section&id=%E7%B8%BD%E8%B2%A0%E5%82%B5%E4%BD%B5%E6%AC%8A%E7%9B%8A%E6%AF%94%E7%8E%87%E5%8F%8A%E8%B2%A0%E5%82%B5%E6%AF%94%E7%8E%87) As of June 30, 2025, the Group's total liabilities were HKD 1,127.02 million, with a total liabilities to total equity attributable to shareholders ratio of 13.7% and a gearing ratio of 10.3%, both decreasing from the end of 2024, indicating a healthy financial leverage level | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total liabilities | HKD 1,127.02 million | HKD 1,096.92 million | | Total liabilities to total equity attributable to shareholders ratio | 13.7% | 14% | | Gearing ratio | 10.3% | 10.7% | [Cash Position](index=23&type=section&id=%E7%8F%BE%E9%87%91%E7%8B%80%E6%B3%81) As of June 30, 2025, the Group's total bank balances amounted to HKD 1,150.26 million, with RMB deposits accounting for 70.9% and HKD deposits for 20.1%, and Minxin Insurance maintained MOP 18.41 million and HKD 69.45 million in bank deposits to comply with regulatory requirements | Indicator | June 30, 2025 (HKD) | December 31, 2024 (HKD) | | :--- | :--- | :--- | | Total bank balances | HKD 1,150.26 million | HKD 1,337.36 million | | HKD deposits percentage | 20.1% | 14.6% | | RMB deposits percentage | 70.9% | 79.3% | - Minxin Insurance maintained **MOP 18.41 million** and **HKD 69.45 million** in bank deposits to comply with the Macau Legal Framework for Insurance Business[57](index=57&type=chunk) [Exchange Rate Fluctuation Risk](index=23&type=section&id=%E5%8C%AF%E7%8E%87%E6%B3%A2%E5%8B%95%E9%A2%A8%E9%9A%AA) The Group faces exchange rate fluctuation risks between HKD and RMB, which are managed through regular review and monitoring, but no derivative contracts aimed at mitigating foreign exchange risks were entered into during the review period - The Group faces exchange rate fluctuation risks between HKD and RMB, which are regularly reviewed and monitored[58](index=58&type=chunk) - No derivative contracts aimed at mitigating foreign exchange risks were entered into during the review period[58](index=58&type=chunk) [Capital Commitments](index=24&type=section&id=%E8%B3%87%E6%9C%AC%E6%89%BF%E6%93%94) As of June 30, 2025, the Group's total capital commitments amounted to HKD 0.18 million (for property, plant and equipment and investment properties), and it has committed to subscribe for capital in two limited partnerships totaling RMB 97.99 million | Item | June 30, 2025 (HKD) | December 31, 2024 (HKD) | | :--- | :--- | :--- | | Capital commitments for property, plant and equipment and investment properties | HKD 0.18 million | HKD 0.18 million | - Committed to subscribe for capital in two limited partnerships totaling **RMB 97.99 million** (approximately HKD 107.20 million)[59](index=59&type=chunk) [Contingent Liabilities](index=24&type=section&id=%E6%88%96%E7%84%B6%E8%B2%A0%E5%82%B5) As of June 30, 2025, and December 31, 2024, the Group had no significant contingent liabilities - The Group had no significant contingent liabilities[60](index=60&type=chunk) [Employees and Remuneration Policy](index=24&type=section&id=%E5%83%B1%E5%93%A1%E5%8F%8A%E8%96%AA%E9%85%AC%E6%94%BF%E7%AD%96) As of June 30, 2025, the Group had 68 employees, with remuneration determined based on performance and qualifications, offering retirement and medical benefits, and on-the-job training, recognizing human resources as valuable assets | Indicator | June 30, 2025 | | :--- | :--- | | Total number of employees | 68 | - Remuneration is determined based on individual performance and qualifications, with retirement, medical benefits, and on-the-job training provided[61](index=61&type=chunk) [Other Information](index=24&type=section&id=%E5%85%B6%E4%BB%96%E8%B3%87%E6%96%99) This section covers information on the Group's corporate governance, directors' securities transactions, share movements, public float compliance, and audit committee review, as well as arrangements for the publication of interim results announcement and report [Compliance with the Corporate Governance Code](index=24&type=section&id=%E9%81%B5%E5%AE%88%E3%80%8A%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB%E5%AE%88%E5%89%87%E3%80%8B) The Board believes that the Group has complied with all applicable code provisions of the Corporate Governance Code set out in Appendix C1 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited for the six months ended June 30, 2025 - The Group has complied with all applicable code provisions of the Corporate Governance Code set out in Appendix C1 of the Listing Rules[62](index=62&type=chunk) [Compliance with the Model Code for Securities Transactions by Directors of Listed Issuers](index=25&type=section&id=%E9%81%B5%E5%AE%88%E3%80%8A%E4%B8%8A%E5%B8%82%E7%99%BC%E8%A1%8C%E4%BA%BA%E8%91%A3%E4%BA%8B%E9%80%B2%E8%A1%8C%E8%AD%89%E5%8B%99%E7%9A%84%E6%A8%99%E6%BA%96%E5%AE%88%E5%89%87%E3%80%8B) The Company has adopted a Code of Conduct no less exacting than the Model Code in Appendix C3 of the Listing Rules, and all Directors confirmed compliance with the relevant provisions for H1 2025 - The Company has adopted its own Code of Conduct for directors' securities transactions, and all directors confirmed compliance[63](index=63&type=chunk) [Purchase, Sale or Redemption of Shares](index=25&type=section&id=%E8%B3%BC%E5%85%A5%E3%80%81%E5%87%BA%E5%94%AE%E6%88%96%E8%B3%96%E5%9B%9E%E8%82%A1%E4%BB%BD) Neither the Group nor its subsidiaries purchased, sold, or redeemed any of the Company's issued shares during the review period - Neither the Group nor its subsidiaries purchased, sold, or redeemed any of the Company's issued shares during the review period[64](index=64&type=chunk) [Public Float](index=25&type=section&id=%E5%85%AC%E7%9C%BE%E6%8C%81%E8%82%A1%E9%87%8F) The Group's public float had fallen below the minimum 25% required by the Listing Rules but was restored to approximately 25.03% on July 16, 2025, through the sale of shares by Citychamp Watch & Jewellery Group Limited, thus complying with Listing Rules requirements - As of June 30, 2025, the public float was approximately **24.40%**, below the minimum 25% required by Rule 8.08(1)(a) of the Listing Rules[65](index=65&type=chunk) - On July 16, 2025, through the sale of **3,800,000 shares**, the public float was restored to approximately **25.03%**, complying with Listing Rules requirements[66](index=66&type=chunk) [Review by the Audit Committee](index=26&type=section&id=%E5%AF%A9%E6%A0%B8%E5%A7%94%E5%93%A1%E6%9C%83%E7%9A%84%E5%AF%A9%E9%96%B1) The Audit Committee has reviewed the accounting principles and methods adopted by the Group and discussed matters related to risk management, internal control, and financial reporting, including the financial statements contained in this interim results announcement - The Audit Committee has reviewed the Group's accounting principles, risk management, internal control, and financial reporting matters, including this interim results announcement[67](index=67&type=chunk) [Publication of Interim Results Announcement and 2025 Interim Report](index=26&type=section&id=%E5%88%8A%E7%99%BC%E4%B8%AD%E6%9C%9F%E6%A5%AD%E7%B8%BE%E5%85%AC%E5%91%8A%E5%8F%8A%E3%80%8A2025%E5%B9%B4%E4%B8%AD%E6%9C%9F%E5%A0%B1%E5%91%8A%E3%80%8B) The interim results announcement for the six months ended June 30, 2025, has been published on the HKEX and the Company's website, and printed copies of the 2025 Interim Report will be dispatched to shareholders in due course - The interim results announcement has been published on the HKEX website (www.hkexnews.hk) and the Company's website (www.minxin.com.hk)[68](index=68&type=chunk) - Printed copies of the 2025 Interim Report will be dispatched to shareholders in due course[68](index=68&type=chunk)

[Report Overview](index=1&type=section&id=I.%20Report%20Overview) This section provides an overview of the company's interim consolidated results, including company information, reporting period, and currency unit [Company Information and Report Statement](index=1&type=section&id=1.1%20Company%20Information%20and%20Report%20Statement) Hebei Yichen Industrial Group Corporation Limited (Stock Code: 1596) announced its unaudited condensed consolidated interim results for the six months ended June 30, 2025, with amounts stated in RMB thousand - The company name is Hebei Yichen Industrial Group Corporation Limited, with stock code **1596**[2](index=2&type=chunk) - This announcement presents the unaudited condensed consolidated interim results for the six months ended **June 30, 2025**[2](index=2&type=chunk) - All monetary amounts are expressed in **RMB thousand**[2](index=2&type=chunk) [Consolidated Financial Statements](index=2&type=section&id=II.%20Consolidated%20Financial%20Statements) This section presents the company's consolidated income statement and balance sheet, highlighting key financial performance and position metrics [Consolidated Income Statement](index=2&type=section&id=2.1%20Consolidated%20Income%20Statement) For the six months ended June 30, 2025, total operating revenue was RMB477,143 thousand, a 4.3% year-on-year decrease, with operating profit turning to RMB53,612 thousand from a loss, net profit at RMB48,671 thousand, and basic earnings per share at RMB0.05, significantly improving from a loss in the prior period Key Consolidated Income Statement Data (For the six months ended June 30) | Indicator | 2025 (RMB'000) | 2024 (RMB'000) | YoY Change | | :--- | :--- | :--- | :--- | | Total Operating Revenue | 477,143 | 498,707 | -4.3% | | Total Operating Costs | 434,715 | 478,062 | -9.07% | | Operating Profit/(Loss) | 53,612 | (51,618) | Significant improvement | | Total Profit/(Loss) | 48,671 | (42,171) | Significant improvement | | Net Profit/(Net Loss) | 48,671 | (42,171) | Significant improvement | | Net Profit/(Net Loss) Attributable to Owners of the Parent | 48,617 | (42,177) | Significant improvement | | Basic Earnings/(Loss) Per Share (RMB) | 0.05 | (0.05) | Significant improvement | [Consolidated Balance Sheet](index=4&type=section&id=2.2%20Consolidated%20Balance%20Sheet) As of June 30, 2025, the company's total assets were RMB3,593,149 thousand, a 2.6% increase from the end of 2024, with total current assets at RMB2,004,360 thousand and total non-current assets at RMB1,588,789 thousand, while total liabilities increased by 5.5% to RMB1,167,767 thousand Key Consolidated Balance Sheet Data (As of June 30) | Indicator | June 30, 2025 (RMB'000) | December 31, 2024 (RMB'000) | Change | | :--- | :--- | :--- | :--- | | **Assets** | | | | | Total Current Assets | 2,004,360 | 1,930,330 | +3.83% | | Total Non-current Assets | 1,588,789 | 1,571,167 | +1.12% | | **Total Assets** | **3,593,149** | **3,501,497** | **+2.62%** | | **Liabilities** | | | | | Total Current Liabilities | 648,182 | 717,680 | -9.68% | | Total Non-current Liabilities | 519,585 | 389,444 | +33.42% | | **Total Liabilities** | **1,167,767** | **1,107,124** | **+5.48%** | | **Equity** | | | | | Total Equity Attributable to Owners of the Parent | 2,412,403 | 2,381,448 | +1.30% | | Non-controlling Interests | 12,979 | 12,925 | +0.42% | | **Total Equity** | **2,425,382** | **2,394,373** | **+1.30%** | [Notes to Financial Statements](index=6&type=section&id=III.%20Notes%20to%20Financial%20Statements) This section provides detailed explanations of the company's general information, accounting policies, segment performance, and key financial account movements [General Information](index=6&type=section&id=3.1%20General%20Information) Hebei Yichen Industrial Group Corporation Limited, incorporated in China in 2001, primarily engages in the R&D, production, and sale of railway fastening system products, welding wire products, and railway sleeper products. Its H-shares were listed on the HKEX in 2016, and these interim results are unaudited but reviewed by the Audit Committee - The company's principal activities include the R&D, production, and sale of **railway fastening system products, welding wire products, and railway sleeper products**[8](index=8&type=chunk) - The consolidated results for the six months ended June 30, 2025, are **unaudited** by the company's auditor but have been **reviewed by the Audit Committee**[8](index=8&type=chunk) [Basis of Preparation and Accounting Policies](index=6&type=section&id=3.2%20Basis%20of%20Preparation%20and%20Accounting%20Policies) The financial statements are prepared on a going concern basis, in accordance with the Accounting Standards for Business Enterprises issued by the Ministry of Finance of China and relevant provisions of the HKEX Listing Rules - The financial statements are prepared on a **going concern basis** and comply with **Chinese Accounting Standards** and the disclosure requirements of the **HKEX Listing Rules**[9](index=9&type=chunk) [Segment Information](index=6&type=section&id=3.3%20Segment%20Information) The Group segments its business into railway fastening system products, welding wire products, and railway sleeper products, assessing segment performance based on gross profit. In H1 2025, railway fastening system products saw significant gross profit growth, while welding wire and railway sleeper products experienced minor changes - The Group's business segments are categorized by product type: **railway fastening system products, welding wire products, and railway sleeper products**[11](index=11&type=chunk) - Management determines segment performance based on **gross profit**[12](index=12&type=chunk) Segment Gross Profit (For the six months ended June 30) | Business Segment | Jan-Jun 2025 Gross Profit (RMB'000) | Jan-Jun 2024 Gross Profit (RMB'000) | YoY Change | | :--- | :--- | :--- | :--- | | Railway Fastening System | 119,799 | 94,524 | +26.74% | | Welding Wire | (370) | (862) | +57.08% | | Railway Sleeper | 6,261 | 6,657 | -5.95% | | Others | 1,095 | 1,269 | -13.71% | | **Total** | **126,785** | **101,588** | **+24.80%** | [Railway Fastening System Products](index=7&type=section&id=3.3.1%20Railway%20Fastening%20System%20Products) Railway fastening system products generated total revenue of RMB303,537 thousand and gross profit of RMB119,799 thousand in H1 2025, with a gross profit margin of 39.5%, a significant increase from the prior period, driven by higher revenue, optimized customer structure, and lower raw material prices Key Data for Railway Fastening System Products (For the six months ended June 30) | Indicator | Jan-Jun 2025 (RMB'000) | Jan-Jun 2024 (RMB'000) | YoY Change | | :--- | :--- | :--- | :--- | | Total Revenue | 303,537 | 300,433 | +1.03% | | Total Operating Costs | (183,738) | (205,909) | -10.86% | | Segment Gross Profit | 119,799 | 94,524 | +26.74% | - The gross profit margin for railway fastening system products increased from **31.5%** in H1 2024 to **39.5%** in H1 2025, an increase of **8.0 percentage points**[12](index=12&type=chunk) [Welding Wire Products](index=7&type=section&id=3.3.2%20Welding%20Wire%20Products) Welding wire products generated total revenue of RMB141,841 thousand in H1 2025, with a negative gross profit of RMB370 thousand and a gross profit margin of -0.3%, showing minor change compared to the prior period Key Data for Welding Wire Products (For the six months ended June 30) | Indicator | Jan-Jun 2025 (RMB'000) | Jan-Jun 2024 (RMB'000) | YoY Change | | :--- | :--- | :--- | :--- | | Total Revenue | 141,841 | 154,013 | -7.90% | | Total Operating Costs | (142,211) | (154,875) | -8.20% | | Segment Gross Profit | (370) | (862) | +57.08% | - The gross profit margin for welding wire products increased from **-0.6%** in H1 2024 to **-0.3%** in H1 2025, a minor change[12](index=12&type=chunk) [Railway Sleeper Products](index=7&type=section&id=3.3.3%20Railway%20Sleeper%20Products) Railway sleeper products generated total revenue of RMB28,761 thousand and gross profit of RMB6,261 thousand in H1 2025, with a gross profit margin of 21.9%, an increase from the prior period, mainly due to optimized internal management and cost reduction efforts Key Data for Railway Sleeper Products (For the six months ended June 30) | Indicator | Jan-Jun 2025 (RMB'000) | Jan-Jun 2024 (RMB'000) | YoY Change | | :--- | :--- | :--- | :--- | | Total Revenue | 28,761 | 40,556 | -29.10% | | Total Operating Costs | (22,500) | (33,899) | -33.62% | | Segment Gross Profit | 6,261 | 6,657 | -5.95% | - The gross profit margin for railway sleeper products increased from **16.5%** in H1 2024 to **21.9%** in H1 2025, an increase of **5.4 percentage points**[12](index=12&type=chunk) [Notes on Key Financial Items](index=8&type=section&id=3.4%20Key%20Financial%20Items) This section details the movements and analyses of significant financial accounts, including receivables, payables, revenue, costs, and profit components [Bills Receivable](index=8&type=section&id=3.4.1%20Bills%20Receivable) As of June 30, 2025, the carrying value of bills receivable was RMB31,449 thousand, a **42.5% decrease** from RMB54,689 thousand at the end of 2024 Carrying Value of Bills Receivable | Indicator | June 30, 2025 (RMB'000) | December 31, 2024 (RMB'000) | Change | | :--- | :--- | :--- | :--- | | Carrying Value of Bills Receivable | 31,449 | 54,689 | -42.5% | [Accounts Receivable](index=8&type=section&id=3.4.2%20Accounts%20Receivable) As of June 30, 2025, the carrying value of accounts receivable was RMB1,150,169 thousand, a **3.6% decrease** from RMB1,193,124 thousand at the end of 2024, with the highest proportion being current within one year Carrying Value and Aging Analysis of Accounts Receivable | Indicator | June 30, 2025 (RMB'000) | December 31, 2024 (RMB'000) | Change | | :--- | :--- | :--- | :--- | | Carrying Value of Accounts Receivable | 1,150,169 | 1,193,124 | -3.6% | | Within 1 year | 691,591 | 721,712 | -4.17% | | 1 to 2 years | 303,987 | 313,721 | -3.09% | | 2 to 3 years | 192,613 | 213,020 | -9.58% | | Over 3 years | 257,646 | 242,396 | +6.37% | [Bills Payable](index=8&type=section&id=3.4.3%20Bills%20Payable) As of June 30, 2025, bills payable amounted to RMB37,474 thousand, a **29.3% decrease** from RMB53,000 thousand at the end of 2024 Bills Payable | Indicator | June 30, 2025 (RMB'000) | December 31, 2024 (RMB'000) | Change | | :--- | :--- | :--- | :--- | | Bills Payable | 37,474 | 53,000 | -29.3% | [Accounts Payable](index=9&type=section&id=3.4.4%20Accounts%20Payable) As of June 30, 2025, accounts payable amounted to RMB371,016 thousand, a **5.4% decrease** from RMB391,730 thousand at the end of 2024, with **84.5%** of accounts payable due within one year Accounts Payable and Aging Analysis | Indicator | June 30, 2025 (RMB'000) | December 31, 2024 (RMB'000) | Change | | :--- | :--- | :--- | :--- | | Accounts Payable | 371,016 | 391,730 | -5.39% | | Within 1 year | 313,416 | 328,095 | -4.47% | | Over 1 year | 57,600 | 63,635 | -9.49% | [Operating Revenue and Costs](index=9&type=section&id=3.4.5%20Operating%20Revenue%20and%20Costs) In H1 2025, principal business revenue was RMB474,139 thousand, principal business costs were RMB348,449 thousand, and other business revenue was RMB3,004 thousand, with both total revenue and total costs decreasing year-on-year Operating Revenue and Costs (For the six months ended June 30) | Indicator | Jan-Jun 2025 Revenue (RMB'000) | Jan-Jun 2025 Costs (RMB'000) | Jan-Jun 2024 Revenue (RMB'000) | Jan-Jun 2024 Costs (RMB'000) | | :--- | :--- | :--- | :--- | :--- | | Principal Business | 474,139 | 348,449 | 495,002 | 394,683 | | Other Businesses | 3,004 | 1,909 | 3,705 | 2,436 | | **Total** | **477,143** | **350,358** | **498,707** | **397,119** | [Investment Income/(Loss)](index=9&type=section&id=3.4.6%20Investment%20Income%2F%28Loss%29) Investment income in H1 2025 was RMB16,041 thousand, a significant increase from RMB8,273 thousand in H1 2024, primarily due to increased income from long-term equity investments accounted for using the equity method Investment Income/(Loss) (For the six months ended June 30) | Indicator | June 30, 2025 (RMB'000) | June 30, 2024 (RMB'000) | Change | | :--- | :--- | :--- | :--- | | Income from Long-term Equity Investments Accounted for Using Equity Method | 16,041 | 7,600 | +111.07% | | **Total Investment Income** | **16,041** | **8,273** | **+93.90%** | [Fair Value Change Gains/(Losses)](index=10&type=section&id=3.4.7%20Fair%20Value%20Change%20Gains%2F%28Losses%29) Fair value change gains were **RMB0** in H1 2025, a significant improvement from a loss of RMB58,506 thousand in H1 2024, primarily because the company sold all its Hong Kong listed securities in 2024 Fair Value Change Gains/(Losses) (For the six months ended June 30) | Indicator | June 30, 2025 (RMB'000) | June 30, 2024 (RMB'000) | Change | | :--- | :--- | :--- | :--- | | Financial Assets Held for Trading | – | (58,506) | Significant improvement | | **Total** | **–** | **(58,506)** | **Significant improvement** | [Income Tax Expense](index=10&type=section&id=3.4.8%20Income%20Tax%20Expense) Income tax expense in H1 2025 was RMB4,934 thousand, a significant improvement from a loss of RMB9,422 thousand in H1 2024, primarily due to changes in deferred income tax expense Income Tax Expense (For the six months ended June 30) | Indicator | June 30, 2025 (RMB'000) | June 30, 2024 (RMB'000) | Change | | :--- | :--- | :--- | :--- | | Current Income Tax Expense | 5,880 | 3,607 | +63.01% | | Deferred Income Tax Expense | (946) | (13,029) | Significant improvement | | **Total** | **4,934** | **(9,422)** | **Significant improvement** | [Earnings/(Loss) Per Share](index=10&type=section&id=3.4.9%20Earnings%2F%28Loss%29%20Per%20Share) Basic earnings per share in H1 2025 was **RMB0.05**, turning a loss into profit from basic loss per share of RMB0.05 in H1 2024 Earnings/(Loss) Per Share (For the six months ended June 30) | Indicator | June 30, 2025 (RMB) | June 30, 2024 (RMB) | Change | | :--- | :--- | :--- | :--- | | Basic Earnings/(Loss) Per Share | 0.05 | (0.05) | Turned loss into profit | | Diluted Earnings/(Loss) Per Share | 0.05 | (0.05) | Turned loss into profit | - For the six months ended June 30, 2025, and 2024, there were **no potential dilutive ordinary shares**, thus diluted earnings per share equal basic earnings per share[21](index=21&type=chunk) [Dividends](index=10&type=section&id=3.4.10%20Dividends) The Board does not recommend an interim dividend for the six months ended June 30, 2025, while the 2024 final dividend was paid in July 2025 - The Board does **not recommend** the payment of an interim dividend for the six months ended June 30, 2025[22](index=22&type=chunk) - The final dividend for the year ended December 31, 2024 (approximately **RMB0.0168 per share**) was paid in **July 2025**[22](index=22&type=chunk) [Management Discussion and Analysis](index=11&type=section&id=IV.%20Management%20Discussion%20and%20Analysis) This section provides an overview of the industry, business performance, future outlook, detailed financial performance analysis, and financial position [Industry Review](index=11&type=section&id=4.1%20Industry%20Review) In H1 2025, the national economy maintained a stable and improving trend, with GDP growing by **5.3%** year-on-year, and national railway fixed asset investment reaching **RMB355.9 billion**, a **5.5%** increase, accelerating railway infrastructure construction - In H1 2025, China's GDP grew by **5.3%** year-on-year[23](index=23&type=chunk) - National railway fixed asset investment in H1 2025 amounted to **RMB355.9 billion**, a year-on-year increase of **5.5%**[23](index=23&type=chunk) - A total of **301 kilometers of new railway lines** were put into operation, and **220.70 kilometers of new urban rail transit lines** were added in H1 2025[23](index=23&type=chunk) [Business Review](index=11&type=section&id=4.2%20Business%20Review) In H1 2025, the Group's total revenue decreased by **4.3%** year-on-year to **RMB477.1 million**, primarily due to reduced revenue from welding wire and railway sleeper products, though external impacts were effectively managed through proactive operational adjustments - In H1 2025, the Group's total revenue was approximately **RMB477.1 million**, a year-on-year decrease of approximately **4.3%**[24](index=24&type=chunk) - The company actively communicated with customers and suppliers, adjusting production and operation plans based on demand and market changes to address external uncertainties[24](index=24&type=chunk) [Railway Fastening System Products](index=11&type=section&id=4.2.1%20Railway%20Fastening%20System%20Products) Railway fastening system products revenue increased by **1.0%** to **RMB303.5 million**, accounting for **63.6%** of total revenue, with gross profit margin rising **8.0 percentage points** to **39.5%**, and outstanding contract value of approximately **RMB2,132.1 million** - Revenue from railway fastening system products was approximately **RMB303.5 million**, a year-on-year increase of approximately **1.0%**, accounting for approximately **63.6%** of total revenue[25](index=25&type=chunk) - Operating costs decreased by approximately **RMB22.2 million**, mainly due to optimized customer structure and lower raw material prices[25](index=25&type=chunk) - Gross profit margin increased by **8.0 percentage points** to **39.5%**, with gross profit increasing by **26.8%** to **RMB119.8 million**[26](index=26&type=chunk) - As of June 30, 2025, the outstanding contract value was approximately **RMB2,132.1 million**[27](index=27&type=chunk) [Welding Wire Products](index=12&type=section&id=4.2.2%20Welding%20Wire%20Products) Welding wire products revenue decreased by **7.9%** year-on-year to **RMB141.8 million**, accounting for **29.7%** of total revenue, primarily due to intense market competition and declining selling prices, with plans to expand the customer base - Revenue from welding wire products was approximately **RMB141.8 million**, a year-on-year decrease of approximately **7.9%**, accounting for approximately **29.7%** of total revenue[28](index=28&type=chunk) - The decrease in revenue was mainly due to **intense market competition** and a **decline in the selling price** of welding wire products[28](index=28&type=chunk) - The company plans to further **expand its customer base** while continuing to cooperate with existing major customers[28](index=28&type=chunk) [Railway Sleeper Products](index=12&type=section&id=4.2.3%20Railway%20Sleeper%20Products) Railway sleeper products revenue decreased by **29.1%** year-on-year to **RMB28.8 million**, accounting for **6.0%** of total revenue, primarily due to delays in supply as per customer requirements - Revenue from railway sleeper products was approximately **RMB28.8 million**, a year-on-year decrease of approximately **29.1%**, accounting for approximately **6.0%** of total revenue[29](index=29&type=chunk) - The decrease in revenue was mainly due to **delays in supplying railway sleeper products** to customers as per their requirements[29](index=29&type=chunk) [Future Outlook](index=13&type=section&id=4.3%20Future%20Outlook) China's railway construction investment is expected to remain high, with new-generation smart high-speed rail anticipated by 2027, and the Group will seize opportunities to enhance product quality and service, while exploring vertical industry extension to build diverse product lines - In H1 2025, the national economy showed stable and improving trends, with **railway construction investment remaining high**[30](index=30&type=chunk) - Multiple new lines and stations commenced operation, ongoing construction projects progressed smoothly, and preliminary project work was carried out in an orderly manner[31](index=31&type=chunk)[32](index=32&type=chunk) - China State Railway Group Co., Ltd. will accelerate railway planning and construction, with the **new generation of smart high-speed rail expected to be implemented by 2027**[33](index=33&type=chunk) - The Group will seize opportunities from the 'Transportation Powerhouse' initiative, focusing on high-quality railway fastening system products and railway sleeper products, enhancing product quality and service levels, and exploring **vertical industry extension to build diverse product lines**[33](index=33&type=chunk) [Performance Analysis](index=14&type=section&id=4.4%20Performance%20Analysis) This section provides a detailed breakdown and analysis of the Group's revenue, costs, gross profit, operating expenses, and net profit for the reporting period [Revenue](index=14&type=section&id=4.4.1%20Revenue) The Group's total revenue decreased by **4.3%** from RMB498.7 million in H1 2024 to **RMB477.1 million** in H1 2025, primarily due to reduced revenue from welding wire and railway sleeper products, while railway fastening system products revenue slightly increased by **1.0%** Revenue Composition and Changes (For the six months ended June 30) | Product Type | H1 2025 Revenue (RMB million) | H1 2024 Revenue (RMB million) | YoY Change | | :--- | :--- | :--- | :--- | | Railway Fastening System Products | 303.5 | 300.4 | +1.0% | | Welding Wire Products | 141.8 | 154.0 | -7.9% | | Railway Sleeper Products | 28.8 | 40.6 | -29.1% | | **Total Revenue** | **477.1** | **498.7** | **-4.3%** | - Other business income is derived from the **sale of raw materials, provision of product processing services, and electricity sales**[36](index=36&type=chunk) [Operating Costs](index=15&type=section&id=4.4.2%20Operating%20Costs) The Group's operating costs decreased by **11.8%** to **RMB350.4 million** in H1 2025, primarily due to optimized customer structure and lower raw material prices, with all product lines experiencing varying degrees of cost reduction Operating Costs Changes (For the six months ended June 30) | Product Type | H1 2025 Costs (RMB million) | H1 2024 Costs (RMB million) | YoY Change | | :--- | :--- | :--- | :--- | | Railway Fastening System Products | 183.7 | 205.9 | -10.8% | | Welding Wire Products | 142.2 | 154.9 | -8.2% | | Railway Sleeper Products | 22.5 | 33.9 | -33.6% | | **Total Operating Costs** | **350.4** | **397.1** | **-11.8%** | [Gross Profit](index=15&type=section&id=4.4.3%20Gross%20Profit) In H1 2025, the Group's gross profit increased by **24.7%** to **RMB126.7 million**, driven by increased revenue from railway fastening system products, optimized customer structure, and lower raw material prices, with significant gross profit margin improvements for railway fastening system and railway sleeper products Gross Profit and Gross Profit Margin Changes (For the six months ended June 30) | Product Type | H1 2025 Gross Profit (RMB million) | H1 2024 Gross Profit (RMB million) | YoY Change | H1 2025 Gross Profit Margin | H1 2024 Gross Profit Margin | GPM Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Railway Fastening System Products | 119.8 | 94.5 | +26.8% | 39.5% | 31.5% | +8.0% | | Welding Wire Products | -0.4 | -0.9 | +55.6% | -0.3% | -0.6% | +0.3% | | Railway Sleeper Products | 6.3 | 6.7 | -6.0% | 21.9% | 16.5% | +5.4% | | **Total Gross Profit** | **126.7** | **101.6** | **+24.7%** | | | | [Selling Expenses](index=16&type=section&id=4.4.4%20Selling%20Expenses) Selling expenses in H1 2025 were **RMB10.2 million**, a minor change from RMB10.3 million in H1 2024, with both periods representing **2.1%** of total revenue Selling Expenses (For the six months ended June 30) | Indicator | H1 2025 (RMB million) | H1 2024 (RMB million) | YoY Change | % of Total Revenue (2025) | % of Total Revenue (2024) | | :--- | :--- | :--- | :--- | :--- | :--- | | Selling Expenses | 10.2 | 10.3 | -1.0% | 2.1% | 2.1% | [Administrative Expenses](index=16&type=section&id=4.4.5%20Administrative%20Expenses) Administrative expenses in H1 2025 were **RMB44.0 million**, an increase from RMB42.2 million in H1 2024, primarily due to higher depreciation and amortization, with its percentage of total revenue rising from **8.5%** to **9.2%** Administrative Expenses (For the six months ended June 30) | Indicator | H1 2025 (RMB million) | H1 2024 (RMB million) | YoY Change | % of Total Revenue (2025) | % of Total Revenue (2024) | | :--- | :--- | :--- | :--- | :--- | :--- | | Administrative Expenses | 44.0 | 42.2 | +4.3% | 9.2% | 8.5% | - The increase in administrative expenses was mainly due to **higher depreciation and amortization**[42](index=42&type=chunk) [Research and Development Expenses](index=16&type=section&id=4.4.6%20Research%20and%20Development%20Expenses) R&D expenses in H1 2025 were **RMB14.6 million**, an increase from RMB13.0 million in H1 2024, primarily due to the Group's active efforts to enhance its technological capabilities and increased R&D investment, with its percentage of total revenue rising from **2.6%** to **3.1%** Research and Development Expenses (For the six months ended June 30) | Indicator | H1 2025 (RMB million) | H1 2024 (RMB million) | YoY Change | % of Total Revenue (2025) | % of Total Revenue (2024) | | :--- | :--- | :--- | :--- | :--- | :--- | | R&D Expenses | 14.6 | 13.0 | +12.3% | 3.1% | 2.6% | - The increase in R&D expenses was mainly due to the Group's active efforts to **enhance its technological capabilities** and **increased R&D investment**[43](index=43&type=chunk) [Investment Income](index=16&type=section&id=4.4.7%20Investment%20Income) Investment income in H1 2025 was **RMB16.0 million**, a significant increase from RMB8.3 million in H1 2024, primarily due to increased adjusted profits from associates Investment Income (For the six months ended June 30) | Indicator | H1 2025 (RMB million) | H1 2024 (RMB million) | YoY Change | | :--- | :--- | :--- | :--- | | Investment Income | 16.0 | 8.3 | +92.8% | - The increase in investment income was mainly due to **increased adjusted profits from associates**[44](index=44&type=chunk) [Fair Value Change Gains/(Losses)](index=16&type=section&id=4.4.8%20Fair%20Value%20Change%20Gains%2F%28Losses%29) Fair value change gains were **RMB0** in H1 2025, a significant improvement from a loss of RMB58.5 million in H1 2024, as the company sold all its Hong Kong listed securities in 2024 Fair Value Change Gains/(Losses) (For the six months ended June 30) | Indicator | H1 2025 (RMB million) | H1 2024 (RMB million) | YoY Change | | :--- | :--- | :--- | :--- | | Fair Value Change Gains/(Losses) | 0 | (58.5) | Significant improvement | - There were **no fair value change losses** in H1 2025, as the company had sold all its Hong Kong listed securities in 2024[45](index=45&type=chunk) [Finance Costs – Net](index=17&type=section&id=4.4.9%20Finance%20Costs%20%E2%80%93%20Net) Finance costs – net in H1 2025 were **RMB8.6 million**, a decrease from RMB9.1 million in H1 2024, primarily due to increased interest income Finance Costs – Net (For the six months ended June 30) | Indicator | H1 2025 (RMB million) | H1 2024 (RMB million) | YoY Change | | :--- | :--- | :--- | :--- | | Finance Costs – Net | 8.6 | 9.1 | -5.5% | - The decrease in net finance costs was mainly due to **increased interest income**[46](index=46&type=chunk) [Operating Profit/(Loss)](index=17&type=section&id=4.4.10%20Operating%20Profit%2F%28Loss%29) In H1 2025, the Group recorded an operating profit of **RMB53.6 million**, a significant improvement of approximately **RMB105.2 million** from an operating loss of RMB51.6 million in H1 2024 Operating Profit/(Loss) (For the six months ended June 30) | Indicator | H1 2025 (RMB million) | H1 2024 (RMB million) | YoY Change | | :--- | :--- | :--- | :--- | | Operating Profit/(Loss) | 53.6 | (51.6) | Significant improvement (+RMB105.2 million) | [Net Profit/(Loss)](index=17&type=section&id=4.4.11%20Net%20Profit%2F%28Loss%29) In H1 2025, the Group's net profit was **RMB48.6 million**, a significant improvement of approximately **RMB90.8 million** from a net loss of RMB42.2 million in H1 2024, turning a loss into profit with basic earnings per share of **RMB0.05** Net Profit/(Loss) (For the six months ended June 30) | Indicator | H1 2025 (RMB million) | H1 2024 (RMB million) | YoY Change | | :--- | :--- | :--- | :--- | | Net Profit/(Loss) | 48.6 | (42.2) | Significant improvement (+RMB90.8 million) | | Net Profit/(Loss) Attributable to Owners of the Parent | 48.6 | (42.2) | Significant improvement (+RMB90.8 million) | | Basic Earnings/(Loss) Per Share (RMB) | 0.05 | (0.05) | Turned loss into profit (+RMB0.1) | - The increase in net profit was mainly due to the Group's active efforts in **optimizing customer structure** and **lower raw material prices**, resulting in overall good operating performance[48](index=48&type=chunk) [Financial Position Analysis](index=17&type=section&id=4.5%20Financial%20Position%20Analysis) This section analyzes the Group's total assets, liabilities, equity, and gearing ratio, highlighting key changes and their drivers [Total Assets](index=17&type=section&id=4.5.1%20Total%20Assets) As of June 30, 2025, the Group's total assets were **RMB3,593.1 million**, a **2.6% increase** from the end of 2024, primarily due to increased inventory for railway fastening systems Total Assets (As of June 30) | Indicator | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | Change | | :--- | :--- | :--- | :--- | | Total Assets | 3,593.1 | 3,501.5 | +2.6% | - The increase in total assets was mainly due to **increased inventory for railway fastening systems**[49](index=49&type=chunk) [Total Liabilities](index=17&type=section&id=4.5.2%20Total%20Liabilities) As of June 30, 2025, the Group's total liabilities were **RMB1,167.8 million**, a **5.5% increase** from the end of 2024, primarily due to increased bank borrowings Total Liabilities (As of June 30) | Indicator | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | Change | | :--- | :--- | :--- | :--- | | Total Liabilities | 1,167.8 | 1,107.1 | +5.5% | - The increase in total liabilities was mainly due to **increased bank borrowings**[50](index=50&type=chunk) [Total Equity](index=17&type=section&id=4.5.3%20Total%20Equity) As of June 30, 2025, the Group's total equity was **RMB2,425.4 million**, a **1.3% increase** from the end of 2024, primarily due to the net profit generated in H1 2025 Total Equity (As of June 30) | Indicator | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | Change | | :--- | :--- | :--- | :--- | | Total Equity | 2,425.4 | 2,394.4 | +1.3% | - The increase in total equity was mainly due to the **net profit generated in H1 2025**[51](index=51&type=chunk) [Gearing Ratio](index=18&type=section&id=4.5.4%20Gearing%20Ratio) As of June 30, 2025, the Group's gearing ratio was **16.8%**, a **0.5 percentage point decrease** from **17.3%** at the end of 2024, primarily due to an increase in cash and cash equivalents Gearing Ratio (As of June 30) | Indicator | June 30, 2025 | December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Gearing Ratio | 16.8% | 17.3% | -0.5 percentage points | - The decrease in the gearing ratio was mainly due to an **increase in the Group's cash and cash equivalents**[52](index=52&type=chunk) [Employees and Remuneration Policy](index=18&type=section&id=4.6%20Employees%20and%20Remuneration%20Policy) As of June 30, 2025, the Group had **1,274 employees**, with staff costs of approximately **RMB50.5 million**, a minor change from the prior period, and remuneration standards are based on employee qualifications, job responsibilities, and industry averages Employees and Staff Costs (For the six months ended June 30) | Indicator | June 30, 2025 | June 30, 2024 | Change | | :--- | :--- | :--- | :--- | | Number of Employees | 1,274 | 1,277 | -3 | | Staff Costs (RMB million) | 50.5 | 51.0 | -1.0% | - Remuneration standards are determined based on **employee qualifications, job responsibilities, and industry average levels**, with bonuses awarded based on operating performance and individual work performance[53](index=53&type=chunk) [Events After Reporting Period](index=18&type=section&id=4.7%20Events%20After%20Reporting%20Period) No events have occurred after the balance sheet date and up to the date of this announcement that would have a material impact on the Group - No events have occurred after the balance sheet date and up to the date of this announcement that would have a **material impact on the Group**[54](index=54&type=chunk) [Interim Dividends](index=18&type=section&id=4.8%20Interim%20Dividends) The Board does not recommend an interim dividend for the six months ended June 30, 2025, to meet daily operational liquidity needs and support the smooth implementation of long-term development strategies - The Board does **not recommend** the payment of an interim dividend for the six months ended June 30, 2025[55](index=55&type=chunk) - The decision not to distribute dividends aims to meet the company's **daily operational liquidity needs** and support the **smooth implementation of its medium-to-long-term development strategies**[55](index=55&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=18&type=section&id=4.9%20Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company%27s%20Listed%20Securities) As of June 30, 2025, the trustee of the company's H-share award scheme cumulatively purchased **10,597,000 H-shares** for employee incentive plans at an average price of approximately **RMB2.61 per share**, with no other listed securities purchased, sold, or redeemed by the company or its subsidiaries during the period - As of June 30, 2025, the trustee of the company's H-share award scheme cumulatively purchased **10,597,000 H-shares** at an average price of approximately **RMB2.61 per share**[56](index=56&type=chunk) - The H-shares were purchased for the **employee incentive plan**[56](index=56&type=chunk) - During the period, neither the company nor its subsidiaries purchased, sold, or redeemed any **other listed securities**[56](index=56&type=chunk) [Other Information](index=19&type=section&id=V.%20Other%20Information) This section covers the company's compliance with securities dealing and corporate governance codes, audit committee review, and publication details of the results and report [Compliance with Securities Dealing Code](index=19&type=section&id=5.1%20Compliance%20with%20Securities%20Dealing%20Code) The company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix C3 of the Listing Rules, and all directors and supervisors confirmed full compliance during the period - The company has adopted the **Model Code for Securities Transactions by Directors of Listed Issuers**, and directors and supervisors confirmed **full compliance**[57](index=57&type=chunk) [Compliance with Corporate Governance Code](index=19&type=section&id=5.2%20Compliance%20with%20Corporate%20Governance%20Code) The company is committed to maintaining high standards of corporate governance and complied with all code provisions of the Corporate Governance Code as set out in Appendix C1 of the Listing Rules for the six months ended June 30, 2025 - The company complied with **all code provisions of the Corporate Governance Code** as set out in Appendix C1 of the Listing Rules during the period[58](index=58&type=chunk) [Audit Committee](index=19&type=section&id=5.3%20Audit%20Committee) The condensed consolidated interim financial information was unaudited by the company's auditor but reviewed by the Audit Committee, which concurred with the accounting principles, treatments, and practices adopted - The condensed consolidated interim financial information was **unaudited by the company's auditor**[59](index=59&type=chunk) - The company's Audit Committee has **reviewed and concurred** with the accounting principles, accounting treatments, and practices adopted by the company[59](index=59&type=chunk) [Publication of Results and Report](index=19&type=section&id=5.4%20Publication%20of%20Results%20and%20Report) This results announcement has been published on the HKEX 'Disclosure of Interests' website and the company's website, with the 2025 interim report containing all required information to be published on both websites, and Board members as of the announcement date are listed - This results announcement has been published on the **HKEX 'Disclosure of Interests' website** (http://www.hkexnews.hk) and the **company's website** (http://www.hbyc.com.cn)[60](index=60&type=chunk) - The 2025 interim report, containing all information required by the Listing Rules, will be published on the **company's website and the HKEX website**[60](index=60&type=chunk) - As of the announcement date, the Board members include Executive Directors Zhang Haijun, Wu Jinyu, Zhang Lihuan, Zhang Chao, and Ma Xuehui; Non-executive Director Zheng Zhixing; and Independent Non-executive Directors Ye Qizhi, Wang Fuji, and Zhang Liguo[61](index=61&type=chunk)

Company Information The company's governance structure includes a Board of Directors and various committees, with key operational details and listing information provided [Board of Directors](index=5&type=section&id=Board%20of%20Directors) The company's Board of Directors comprises executive, non-executive, and independent non-executive directors, with Mr. Li Dou serving as Chairman and Executive Director - Mr. Li Dou serves as the Chairman and Executive Director of the Board[6](index=6&type=chunk) - Ms. Zang Luoqi has been appointed as an Executive Director[6](index=6&type=chunk) [Committee Composition](index=5&type=section&id=Committee%20Composition) The company has an Audit and Risk Management Committee, a Nomination and Remuneration Committee, and a Sustainability Committee, each chaired by a designated director - The Audit and Risk Management Committee is chaired by Mr. Tang Yunwei[6](index=6&type=chunk) - The Nomination and Remuneration Committee is chaired by Mr. Guo Tianyong[6](index=6&type=chunk) - The Sustainability Committee is chaired by Dr. Zhou Yongjian[6](index=6&type=chunk) [Key Company Information](index=5&type=section&id=Key%20Company%20Information) The company is registered in the Cayman Islands, with its China headquarters in Shanghai and its principal place of business in Hong Kong located in Causeway Bay; its stock code is 1833, listed on May 4, 2018 - The company's stock code is **1833**, listed on **May 4, 2018**[8](index=8&type=chunk) - The auditor is Ernst & Young[6](index=6&type=chunk) - The China headquarters and principal place of business are located at 298 Guoxia Road, Yangpu District, Shanghai[7](index=7&type=chunk) Chairman's Statement The company maintained stable operations in the first half of 2025, achieving strong core business development and significant profitability improvement [Overall Business Performance](index=7&type=section&id=Overall%20Business%20Performance) The company maintained stable operations in the first half of 2025, with strong core business development and significant profitability improvement, driven by deepening medical-insurance synergy, strengthening competitive advantages, and achieving healthy growth - The company maintained **stable overall operations**, with **strong core business development** and **significant profitability improvement**[12](index=12&type=chunk) - Achievements for the period are summarized by three keywords: "deepening synergy, strengthening advantages, and healthy growth"[12](index=12&type=chunk) - Business structure was optimized, gross profit margin increased year-on-year/quarter-on-quarter, and cash flow remained positive[12](index=12&type=chunk) [Deepening Medical-Insurance Synergy, Dual Growth in Core Businesses](index=8&type=section&id=Deepening%20Medical-Insurance%20Synergy%2C%20Dual%20Growth%20in%20Core%20Businesses) The company deepened its medical-insurance synergy model with Ping An Group, facilitating customer acquisition, retention, and value enhancement for F-end (integrated financial payers), while expanding enterprise health management services for B-end (corporate payers), achieving dual growth - The F-end deepened the "medical-insurance synergy" model, assisting insurance companies in customer acquisition, retention, and value enhancement[13](index=13&type=chunk) - The B-end expanded into the enterprise health management sector, building a product system of "commercial insurance + health protection entrustment + medical health services"[13](index=13&type=chunk) B-end Business Growth Data | Metric | Data | YoY Growth | | :--- | :--- | :--- | | B-end paying enterprise clients | Over 3,500 companies | 37.2% | | B-end paying users | Over 3.6 million people | 39.2% | [AI Technology Breakthroughs, Significant Strengthening of Capability Barriers](index=9&type=section&id=AI%20Technology%20Breakthroughs%2C%20Significant%20Strengthening%20of%20Capability%20Barriers) The company continuously invested in AI technology, launching a "7+N+1" medical AI product system and a complex disease MDT consultation assistance platform, enabling AI empowerment across the entire medical process and strengthening core competitive barriers - Launched the "7+N+1" medical AI product system and innovatively introduced a complex disease MDT consultation assistance platform[14](index=14&type=chunk) - AI has empowered full medical business scenarios, helping family doctors and elderly care managers deliver greater value[14](index=14&type=chunk) - Ping An Group's "953" technology system fully supports the company in solidifying its differentiated competitive barriers[14](index=14&type=chunk) [Building Bridges Between Doctors and Patients, Dedicated to Health Protection](index=9&type=section&id=Building%20Bridges%20Between%20Doctors%20and%20Patients%2C%20Dedicated%20to%20Health%20Protection) The company integrated ESG sustainable development concepts into its business, launched the CARE sustainable development strategy, and provided inclusive medical services to enterprises and employees through initiatives like "Yi Lu Jian Xing" to improve health levels - First launched the CARE sustainable development strategy, practicing the philosophy of "technology for good, medical care with warmth"[15](index=15&type=chunk) - The "Yi Lu Jian Xing" initiative reached over **300 enterprises**, covering over **65,000 people**, improving employee health levels[15](index=15&type=chunk) [Future Outlook](index=10&type=section&id=Future%20Outlook) The company will continue to deepen synergy with Ping An Group, aiming to become "China's No. 1 Entry Point for Medical and Health Services" by enhancing F-end and B-end customer service penetration, optimizing its service network, and accelerating AI large model applications to achieve universal health and well-being - Committed to becoming "China's No. 1 Entry Point for Medical and Health Services"[16](index=16&type=chunk) - Continuously deepening medical-insurance synergy, enhancing F-end full-scenario service capabilities, and strengthening customer tiered operations[16](index=16&type=chunk) - Accelerating the application of AI large models in various scenarios, such as complex disease MDT, covering approximately **245 million** individual financial customers of Ping An Group[16](index=16&type=chunk) Management Discussion and Analysis This section provides an in-depth analysis of the company's financial performance, operational highlights, and strategic initiatives for the reporting period [Key Financial Data](index=11&type=section&id=Key%20Financial%20Data) In the first half of 2025, the company's total revenue increased by **19.5%** year-on-year to **RMB 2.502 billion**, net profit attributable to owners increased by **136.8%** to **RMB 134 million**, and adjusted net profit grew by **83.6%**; gross profit margin rose to **33.6%**, and total expenses as a percentage of revenue decreased Key Financial Data for H1 2025 | Metric | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | 2,502,193 | 2,093,449 | +19.5% | | Cost of revenue | (1,662,484) | (1,419,651) | +17.1% | | Gross profit | 839,709 | 673,798 | +24.6% | | Selling and marketing expenses | (381,020) | (366,722) | +3.9% | | Administrative expenses | (371,947) | (394,613) | -5.7% | | Net profit for the period | 134,908 | 60,629 | +122.5% | | Net profit attributable to owners of the Company | 134,164 | 56,648 | +136.8% | | Adjusted net profit | 164,749 | 89,739 | +83.6% | - F-end and B-end enterprise health business revenue increased by **30.2%** year-on-year, with F-end revenue at **RMB 1.4325 billion** (up **28.5%**) and B-end enterprise health revenue at **RMB 526.8 million** (up **35.2%**)[25](index=25&type=chunk) - Gross profit margin increased to **33.6%** (H1 2024: **32.2%**), and total expenses as a percentage of revenue decreased by **6.3 percentage points** to **30.1%**[25](index=25&type=chunk) [Key Operating Data](index=12&type=section&id=Key%20Operating%20Data) In the first half of 2025, the company's paying user base reached **24 million**, a year-on-year increase of **35.1%**; F-end paying users grew by **34.6%**, B-end paying users by **39.2%**, and B-end paying enterprise clients by **37.2%** Key Operating Data for H1 2025 | Metric | H1 2025 (million people/companies) | H1 2024 (million people/companies) | Change | | :--- | :--- | :--- | :--- | | Paying users | 24.0 | 17.7 | 35.1% | | F-end paying users | 20.0 | 14.8 | 34.6% | | B-end paying users | 3.6 | 2.6 | 39.2% | | B-end paying enterprise clients | Over 3,500 companies | Over 2,500 companies | 37.2% | - F-end paying user growth was primarily driven by deepening medical-insurance synergy and expanding service scenarios[26](index=26&type=chunk) - B-end paying user and enterprise client numbers grew rapidly, mainly due to accelerated development of enterprise health business[26](index=26&type=chunk) [Analysis of Key Business Operations](index=13&type=section&id=Analysis%20of%20Key%20Business%20Operations) As the flagship of Ping An Group's medical and elderly care ecosystem, the company continuously strengthened synergy with the Group, deepened F-end medical-insurance collaboration and B-end enterprise health management, upgraded family doctor and elderly care manager service hubs, and empowered the entire business process with AI technology - Strengthened synergy with Ping An Group, deepening the F-end medical-insurance collaboration model to assist insurance companies in customer acquisition, retention, and value enhancement[27](index=27&type=chunk) - Accelerated expansion of B-end enterprise clients, building a product system of "commercial insurance + health protection entrustment + medical health services"[27](index=27&type=chunk) - Continuously upgraded the two major service hubs of family doctors and elderly care managers, and launched the "7+N+1" medical AI product system[27](index=27&type=chunk) [Payers](index=13&type=section&id=Payers) The company deepened medical-insurance synergy for integrated financial customers (F-end), offering differentiated medical and elderly care services; provided one-stop health management solutions for enterprise customers (B-end) while accelerating customer expansion; and strengthened individual user (C-end) operations, exploring F2C/B2C growth - F-end business revenue was **RMB 1.4325 billion**, a year-on-year increase of **28.5%**; F-end paying users were approximately **20 million**, a year-on-year increase of **34.6%**[31](index=31&type=chunk) - B-end enterprise health business revenue was **RMB 526.8 million**, a year-on-year increase of **35.2%**; B-end paying users exceeded **3.6 million**, a year-on-year increase of **39.2%**[35](index=35&type=chunk) - B-end paying enterprise clients exceeded **3,500**, a year-on-year increase of **37.2%**, with an enterprise renewal rate of approximately **80%**[32](index=32&type=chunk)[35](index=35&type=chunk) [Member Management](index=15&type=section&id=Member%20Management) The company continuously upgraded its family doctor service system, providing differentiated health management solutions, and optimized its elderly care manager service capabilities, covering 85 cities nationwide and leading industry standardization - Family doctor entitlement users exceeded **35 million**, with an average annual usage frequency of **5 times** per person and **100%** proactive service coverage[37](index=37&type=chunk) - Elderly care manager services have covered **85 cities** nationwide, adding **10 new cities** since the end of last year[39](index=39&type=chunk) - Accumulated **5 group standards** in the home-based elderly care sector, leading the healthy and standardized development of the industry[39](index=39&type=chunk) [O2O Medical, Health, and Elderly Care Service Network](index=16&type=section&id=O2O%20Medical%2C%20Health%2C%20and%20Elderly%20Care%20Service%20Network) The company continued to build a broadly covered, high-quality, and cost-effective "four-reach" service network, including upgrading the academician-led online expert team, expanding in-store cooperative hospitals and health service providers, and enriching home and enterprise services - Online services: Upgraded the academician-led expert team, enabling direct audio/video connection with renowned doctors within **3 hours**, and integrated online drug purchase medical insurance payment functions[40](index=40&type=chunk) - In-store services: Partnered with over **4,000 hospitals**, signed over **3,200 expert doctors**, and collaborated with nearly **106,000 health service providers**[40](index=40&type=chunk) - Home services: Partnered with **240,000 pharmacies**, providing home-based elderly care and self-testing services[41](index=41&type=chunk) [Technology Empowerment](index=17&type=section&id=Technology%20Empowerment) The company deepened its AI capabilities, launching the "7+N+1" medical AI product system based on a medical-insurance data closed-loop and the multi-modal technology platform "Ping An Yi Bo Tong® Medical Large Model," significantly enhancing service quality and operational efficiency - Launched the "7+N+1" medical AI product system, including digital avatars of renowned doctors and AI family doctors, covering **8 major specialties**[43](index=43&type=chunk) - AI-assisted consultation accuracy is approximately **98%**, and complex disease MDT treatment plan accuracy is nearly **80%**[44](index=44&type=chunk) - AI helped reduce the average service cost per family doctor customer by approximately **52%** year-on-year, and improved middle-office operational efficiency by approximately **50%** year-on-year[44](index=44&type=chunk) [Long-Term Strategy and Management Outlook](index=18&type=section&id=Long-Term%20Strategy%20and%20Management%20Outlook) The company will continue to deepen synergy with Ping An Group, aiming to become "China's No. 1 Entry Point for Medical and Health Services" by enhancing F-end and B-end customer service capabilities, integrating the "four-reach" service network, and deepening AI technology applications to create long-term value for users, shareholders, and society - Committed to becoming "China's No. 1 Entry Point for Medical and Health Services"[45](index=45&type=chunk) - Continuously deepening medical-insurance synergy, enhancing F-end full-scenario service capabilities, and strengthening customer tiered operations[47](index=47&type=chunk) - Collaborating with Ping An Group to rapidly expand B-end customers, grow the enterprise health business scale, and strengthen online-offline operational conversion[47](index=47&type=chunk) [Segment Revenue and Gross Profit Performance](index=19&type=section&id=Segment%20Revenue%20and%20Gross%20Profit%20Performance) In the first half of 2025, the company's total revenue increased by **19.5%** year-on-year, and total gross profit increased by **24.6%**; elderly care services revenue grew the fastest, up **263.9%** year-on-year, with gross profit margin significantly increasing by **20.7 percentage points** to **37.6%**; medical services revenue grew by **20.2%**, and health services revenue by **7.0%** H1 2025 Segment Revenue and Gross Profit Performance | Segment | 2025 Revenue (RMB thousands) | 2024 Revenue (RMB thousands) | Revenue YoY Change | 2025 Gross Profit (RMB thousands) | 2024 Gross Profit (RMB thousands) | Gross Profit YoY Change | 2025 Gross Margin | 2024 Gross Margin | Gross Margin Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Medical Services | 1,277,895 | 1,062,743 | +20.2% | 465,938 | 422,236 | +10.4% | 36.5% | 39.7% | -3.2 percentage points | | Health Services | 1,052,123 | 983,392 | +7.0% | 308,953 | 243,573 | +26.8% | 29.4% | 24.8% | +4.6 percentage points | | Elderly Care Services | 172,175 | 47,314 | +263.9% | 64,818 | 7,989 | +711.3% | 37.6% | 16.9% | +20.7 percentage points | | **Total** | **2,502,193** | **2,093,449** | **+19.5%** | **839,709** | **673,798** | **+24.6%** | **33.6%** | **32.2%** | **+1.4 percentage points** | - Elderly care services revenue significantly increased by **263.9%**, primarily due to deepening synergy with Ping An Group's integrated financial business and expansion of home-based elderly care services[54](index=54&type=chunk) - Health services gross profit margin increased by **4.6 percentage points**, mainly due to a year-on-year decrease in the revenue structure of low-profit physical goods businesses[52](index=52&type=chunk) [Selling and Marketing Expenses](index=21&type=section&id=Selling%20and%20Marketing%20Expenses) In the first half of 2025, selling and marketing expenses were **RMB 381 million**, an increase of **3.9%** year-on-year, primarily due to increased sales volume Selling and Marketing Expenses | Metric | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | YoY Change | | :--- | :--- | :--- | :--- | | Selling and marketing expenses | 381,020 | 366,722 | +3.9% | - The increase in expenses was primarily attributable to the expansion of sales volume[57](index=57&type=chunk) [Administrative Expenses](index=21&type=section&id=Administrative%20Expenses) In the first half of 2025, administrative expenses were **RMB 371.9 million**, a decrease of **5.7%** year-on-year, primarily due to optimized organizational efficiency Administrative Expenses | Metric | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | YoY Change | | :--- | :--- | :--- | :--- | | Administrative expenses | 371,947 | 394,613 | -5.7% | - The decrease in expenses was primarily attributable to the continuous optimization of organizational efficiency[58](index=58&type=chunk) [Other Income](index=21&type=section&id=Other%20Income) In the first half of 2025, other income was **RMB 16.5 million**, a decrease of **9.9%** year-on-year, mainly affected by fluctuations in short-term bank investment income Other Income | Metric | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | YoY Change | | :--- | :--- | :--- | :--- | | Other income | 16,468 | 18,284 | -9.9% | - The decrease was primarily attributable to fluctuations in short-term bank investment income[59](index=59&type=chunk) [Other (Losses)/Gains – Net](index=21&type=section&id=Other%20%28Losses%29%2FGains%20%E2%80%93%20Net) In the first half of 2025, other gains net turned from a profit in the prior period to a loss of **RMB 28.3 million**, with the main change being impairment provisions for investments in associates Other (Losses)/Gains – Net | Metric | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | YoY Change | | :--- | :--- | :--- | :--- | | Other (losses)/gains – net | (28,342) | 27,737 | Not applicable | - The main change was the change in impairment provisions for investments in associates[60](index=60&type=chunk) [Finance Income – Net](index=21&type=section&id=Finance%20Income%20%E2%80%93%20Net) In the first half of 2025, net finance income was **RMB 60 million**, a decrease of **41.4%** year-on-year, primarily due to a reduction in interest income Finance Income – Net | Metric | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | YoY Change | | :--- | :--- | :--- | :--- | | Finance income – net | 60,033 | 102,436 | -41.4% | - The decrease was primarily attributable to a reduction in the company's interest income[61](index=61&type=chunk) [Net Profit for the Period and Non-IFRS Measure: Adjusted Net Profit](index=22&type=section&id=Net%20Profit%20for%20the%20Period%20and%20Non-IFRS%20Measure%3A%20Adjusted%20Net%20Profit) In the first half of 2025, net profit for the period was **RMB 134.9 million**, and adjusted net profit was **RMB 164.7 million**, representing an **83.6%** year-on-year increase, indicating further improvement in profitability Net Profit and Adjusted Net Profit | Metric | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | | :--- | :--- | :--- | | Net profit for the period | 134,908 | 60,629 | | Excluding share-based payments | 5,325 | 29,833 | | Excluding net foreign exchange losses/(gains) | 24,516 | (723) | | Adjusted net profit | 164,749 | 89,739 | - Adjusted net profit increased by **83.6%** year-on-year, reflecting a further improvement in the company's profitability[62](index=62&type=chunk) [Liquidity and Financial Resources](index=23&type=section&id=Liquidity%20and%20Financial%20Resources) As of June 30, 2025, the company's total cash and other liquid financial resources amounted to **RMB 2.853 billion**, with total available funds of **RMB 9.2476 billion**, primarily comprising cash, restricted funds, time deposits, and wealth management financial assets Cash and Other Liquid Financial Resources | Currency | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | RMB | 2,359,906 | 1,954,331 | | USD | 470,611 | 60,889 | | HKD | 22,495 | 29,433 | | **Total** | **2,853,012** | **2,044,653** | - Total available funds amounted to **RMB 9.2476 billion**, including cash and cash equivalents, restricted funds, time deposits, and wealth management financial assets[64](index=64&type=chunk) Cash Flow Overview | Metric | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | | :--- | :--- | :--- | | Net cash from/(used in) operating activities | 63,557 | (135,007) | | Net cash from investing activities | 4,671,325 | 1,295,072 | | Net cash used in financing activities | (3,924,273) | (18,740) | | Net increase in cash and cash equivalents | 810,609 | 1,141,325 | [Funding Policy](index=24&type=section&id=Funding%20Policy) The company's funds primarily originate from equity, invested in highly liquid, low-risk instruments to generate returns above demand deposit rates while maintaining liquidity - Cash is almost entirely derived from equity funds[66](index=66&type=chunk) - The investment objective is to generate financial returns at a yield higher than demand deposit bank rates and maintain liquidity[66](index=66&type=chunk) [Capital Expenditure](index=24&type=section&id=Capital%20Expenditure) In the first half of 2025, capital expenditure amounted to **RMB 3.582 million**, primarily for the purchase of property, plant and equipment (office and communication equipment) and intangible assets (software) Capital Expenditure | Metric | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | | :--- | :--- | :--- | | Purchase of property, plant and equipment, intangible assets and other assets | 3,582 | 10,536 | - Capital expenditure primarily included the purchase of office and communication equipment and software[67](index=67&type=chunk) [Foreign Exchange Risk](index=24&type=section&id=Foreign%20Exchange%20Risk) The company primarily operates in China, with most transactions settled in RMB; foreign exchange risk mainly arises from USD/RMB exchange rate fluctuations, and the company will use financial instruments to manage these fluctuations - Primarily conducts business operations in China, with most transactions settled in RMB[68](index=68&type=chunk) - Foreign exchange risk primarily arises from fluctuations in the USD/RMB exchange rate[68](index=68&type=chunk) - The company will use financial instruments to manage the impact of exchange rate fluctuations[68](index=68&type=chunk) [Pledge of Assets](index=24&type=section&id=Pledge%20of%20Assets) As of June 30, 2025, the company had no assets pledged - As of June 30, 2025, the company had no assets pledged[69](index=69&type=chunk) [Provisions](index=24&type=section&id=Provisions) Details regarding provisions can be found in Note 14 to the interim condensed consolidated financial information - For details on provisions, please refer to Note 14 to the interim condensed consolidated financial information[70](index=70&type=chunk) [Dividends](index=24&type=section&id=Dividends) The company proposed a special dividend of **HKD 9.7** per share on November 14, 2024, with an option to receive it in cash or new shares; for the six months ended June 30, 2025, no other dividends were paid or declared apart from this special dividend - A special dividend of **HKD 9.7** per share was proposed on November 14, 2024, with an option to receive it in cash or new shares[71](index=71&type=chunk) - For the six months ended June 30, 2025, no dividends were paid or declared by the company other than the aforementioned special dividend[71](index=71&type=chunk) [Bank Loans and Other Borrowings](index=25&type=section&id=Bank%20Loans%20and%20Other%20Borrowings) As of June 30, 2025, the company had no outstanding borrowings other than a **RMB 10.5 million** fixed-rate loan obtained by its subsidiary Ping An Yingjian from a shareholder; the asset-liability ratio was **25.15%** - The company had no other outstanding borrowings apart from a **RMB 10.5 million** fixed-rate loan obtained by Ping An Yingjian from a shareholder[72](index=72&type=chunk) - As of June 30, 2025, the Group's asset-liability ratio was **25.15%**[72](index=72&type=chunk) [Material Investments Held](index=25&type=section&id=Material%20Investments%20Held) As of June 30, 2025, the company did not hold any material investments representing **5%** or more of the Group's total assets - As of June 30, 2025, the company did not hold any material investments representing **5%** or more of the Group's total assets[73](index=73&type=chunk) [Future Plans for Material Investments and Capital Assets](index=25&type=section&id=Future%20Plans%20for%20Material%20Investments%20and%20Capital%20Assets) As of June 30, 2025, the company had no future plans for material investments or acquisitions of capital assets - As of June 30, 2025, the company had no future plans for material investments or acquisitions of capital assets[74](index=74&type=chunk) [Material Acquisitions and Disposals of Subsidiaries, Associates, and Joint Ventures](index=25&type=section&id=Material%20Acquisitions%20and%20Disposals%20of%20Subsidiaries%2C%20Associates%2C%20and%20Joint%20Ventures) For the six months ended June 30, 2025, the company did not undertake any material acquisitions or disposals of subsidiaries, associates, or joint ventures - For the six months ended June 30, 2025, the company did not undertake any material acquisitions or disposals of subsidiaries, associates, or joint ventures[75](index=75&type=chunk) [Employees and Remuneration Policy](index=25&type=section&id=Employees%20and%20Remuneration%20Policy) As of June 30, 2025, the Group had **1,545 employees**, primarily located in China; the company established a "cash remuneration + benefits + long-term incentives" compensation system and provided various training programs, maintaining stable employee relations - As of June 30, 2025, the Group had a total of **1,545 employees**[76](index=76&type=chunk) - A "cash remuneration + benefits + long-term incentives" compensation system was established, with remuneration determined by market conditions, individual performance, qualifications, and experience[76](index=76&type=chunk) - Various internal and external training programs are provided, employee relations are stable, and there have been no significant strikes or other labor disputes[76](index=76&type=chunk) Other Information This section provides details on directors' and major shareholders' interests, employee incentive schemes, and corporate governance matters [Directors' and Chief Executive's Interests and Short Positions in Shares, Underlying Shares, and Debentures](index=26&type=section&id=Directors%27%20and%20Chief%20Executive%27s%20Interests%20and%20Short%20Positions%20in%20Shares%2C%20Underlying%20Shares%2C%20and%20Debentures) As of June 30, 2025, Mr. Li Dou, Mr. Wu Jun, and Ms. Zang Luoqi held long positions in the company's shares, primarily from employee incentive schemes; some non-executive directors also held interests in Ping An Group shares Directors' Long Positions in the Company's Shares | Director Name | Nature of Interest | Number of Shares | Long/Short Position | Approximate Percentage | | :--- | :--- | :--- | :--- | :--- | | Mr. Li Dou | Beneficial owner | 300,000 | Long position | 0.01% | | Mr. Wu Jun | Beneficial owner | 226,520 | Long position | 0.01% | | Ms. Zang Luoqi | Beneficial owner | 188,450 | Long position | 0.00% | - The share interests of Mr. Li Dou, Mr. Wu Jun, and Ms. Zang Luoqi primarily originated from employee incentive schemes[77](index=77&type=chunk) - Non-executive directors such as Mr. Guo Xiaotao, Ms. Cai Fangfang, and Ms. Fu Xin held beneficial owner and long-term service plan related interests in Ping An Group shares[78](index=78&type=chunk)[82](index=82&type=chunk) [Substantial Shareholders' Interests and Short Positions in Shares and Underlying Shares](index=28&type=section&id=Substantial%20Shareholders%27%20Interests%20and%20Short%20Positions%20in%20Shares%20and%20Underlying%20Shares) As of June 30, 2025, An Xin Co., Ltd. was the company's controlling shareholder, holding **53.71%** of the shares, with its ultimate parent company being Ping An Insurance (Group) Company of China, Ltd Substantial Shareholders' Long Positions in the Company's Shares | Shareholder Name | Nature of Interest | Number of Shares | Long/Short Position | Approximate Percentage | | :--- | :--- | :--- | :--- | :--- | | An Ke Technology Company Limited | Interest in controlled corporation | 1,160,994,737 | Long position | 53.71% | | Shenzhen Ping An Financial Technology Consulting Co., Ltd. | Interest in controlled corporation | 1,160,994,737 | Long position | 53.71% | | Ping An | Beneficial owner | 1,160,994,737 | Long position | 53.71% | | An Xin | Interest in controlled corporation | 1,160,994,737 | Long position | 53.71% | - An Xin Co., Ltd. directly held **53.71%** of the company's shares and was indirectly wholly owned by Ping An Group[83](index=83&type=chunk)[85](index=85&type=chunk) [Employee Incentive Scheme](index=29&type=section&id=Employee%20Incentive%20Scheme) The company has an employee incentive scheme designed to attract and retain talent and promote long-term development; as of June 30, 2025, the total number of unexercised share options was **6,505,478**, representing **0.30%** of the issued share capital - The employee incentive scheme aims to attract and retain talent, promoting the company's long-term sustainable development[86](index=86&type=chunk) - As of June 30, 2025, the total number of unexercised share options was **6,505,478**, representing **0.30%** of the issued share capital[86](index=86&type=chunk)[89](index=89&type=chunk) - The exercise price for EIS share options was **HKD 7.38** per share (weighted average closing price)[91](index=91&type=chunk) [Purchase, Sale, or Redemption of the Company's Listed Securities](index=31&type=section&id=Purchase%2C%20Sale%2C%20or%20Redemption%20of%20the%20Company%27s%20Listed%20Securities) For the six months ended June 30, 2025, neither the company nor its subsidiaries repurchased, sold, or redeemed any listed securities, and no treasury shares were held - For the six months ended June 30, 2025, neither the company nor any of its subsidiaries repurchased, sold, or redeemed any of the company's listed securities[90](index=90&type=chunk) - As of June 30, 2025, the company did not hold any treasury shares[90](index=90&type=chunk) [Changes in Information of Directors and Chief Executive](index=32&type=section&id=Changes%20in%20Information%20of%20Directors%20and%20Chief%20Executive) During the reporting period, Ms. Fu Xin was appointed as Ping An's Chief Financial Officer from March 2025, Mr. Wu Jun resigned as Executive Director and President on July 10, 2025, and Ms. Zang Luoqi was appointed as Executive Director on the same day - Ms. Fu Xin was appointed as Ping An's Chief Financial Officer from March 2025[95](index=95&type=chunk) - Mr. Wu Jun resigned as the company's Executive Director and President on July 10, 2025[95](index=95&type=chunk) - Ms. Zang Luoqi was appointed as an Executive Director of the company on July 10, 2025[95](index=95&type=chunk) [Audit and Risk Management Committee](index=32&type=section&id=Audit%20and%20Risk%20Management%20Committee) The Audit and Risk Management Committee reviewed the company's unaudited interim financial statements for the six months ended June 30, 2025, and confirmed their compliance with applicable accounting standards - The Audit and Risk Management Committee comprises Mr. Tang Yunwei (Chairman), Mr. Guo Tianyong, and Ms. Cai Fangfang[94](index=94&type=chunk) - The Committee reviewed the interim financial statements and was satisfied that they were prepared in accordance with applicable accounting standards[94](index=94&type=chunk) [Compliance with the Model Code for Securities Transactions by Directors](index=33&type=section&id=Compliance%20with%20the%20Model%20Code%20for%20Securities%20Transactions%20by%20Directors) The company adopted the Model Code, and all directors confirmed compliance during the reporting period; the company also established written guidelines regulating insider trading - The company adopted the Model Code as the code of conduct for directors' dealings in the company's securities[96](index=96&type=chunk) - All directors confirmed compliance with the Model Code during the reporting period[96](index=96&type=chunk) - Written guidelines were established to regulate dealings by persons who may possess inside information[96](index=96&type=chunk) [Compliance with the Corporate Governance Code](index=33&type=section&id=Compliance%20with%20the%20Corporate%20Governance%20Code) The company confirmed compliance with all applicable provisions of the Corporate Governance Code during the reporting period, except for the combined roles of Chairman and Chief Executive held by Mr. Li Dou; the Board believes this arrangement benefits the company's strategic implementation and execution, effectively safeguarding shareholders' interests - The company complied with all applicable provisions of the Corporate Governance Code, except for the combined roles of Chairman and Chief Executive held by one individual[97](index=97&type=chunk) - The Board believes that Mr. Li Dou's dual role as Chairman and Chief Executive is beneficial for the implementation and execution of the company's strategy and business[97](index=97&type=chunk) - The company established a standardized and stringent Board operation system and rules of procedure to ensure the Chief Executive's proper and effective performance of duties[97](index=97&type=chunk) [Use of Proceeds](index=34&type=section&id=Use%20of%20Proceeds) The net proceeds from the company's listing and placing were used in accordance with previously disclosed plans; on November 14, 2024, the Board resolved to change the planned use of unutilized net proceeds, allocating more funds to working capital and general corporate purposes (including dividend distribution) - Net proceeds from listing were approximately **HKD 8.564 billion**, and net proceeds from placing were approximately **HKD 7.828 billion**[99](index=99&type=chunk)[100](index=100&type=chunk) Revised Planned Use of Net Proceeds | Planned Use of Net Proceeds | Revised Allocation of Net Proceeds (HKD millions) | Amount Used as of June 30, 2025 (HKD millions) | Remaining Net Proceeds as of June 30, 2025 (HKD millions) | Estimated Time of Use for Remaining Net Proceeds | | :--- | :--- | :--- | :--- | :--- | | Business expansion | 120.8 | 120.8 | – | – | | Funding for potential investments, acquisitions, and overseas expansion | 544.9 | – | 544.9 | Before December 31, 2025 | | Further development of the Group's core businesses | 544.9 | 331.4 | 213.5 | Before December 31, 2030 | | Working capital and general corporate purposes (including dividend distribution) | 8,276.1 | 5,168.7 | 3,107.4 | Before December 31, 2025 | - Following the change, more funds (**HKD 8.2761 billion**) were allocated to working capital and general corporate purposes[101](index=101&type=chunk) Interim Financial Information Review Report This section presents the independent review report on the company's interim financial information for the six months ended June 30, 2025 [Introduction](index=35&type=section&id=Introduction) Ernst & Young reviewed the company's interim financial information for the six months ended June 30, 2025, which was prepared in accordance with the Hong Kong Stock Exchange Listing Rules and International Accounting Standard 34 - Ernst & Young reviewed the company's interim financial information for the six months ended June 30, 2025[103](index=103&type=chunk) - The interim financial information was prepared in accordance with the Hong Kong Stock Exchange Listing Rules and International Accounting Standard 34 "Interim Financial Reporting"[103](index=103&type=chunk) [Scope of Review](index=35&type=section&id=Scope%20of%20Review) The review was conducted in accordance with International Standard on Review Engagements 2410, with a scope smaller than an audit, thus no audit opinion is expressed, but it aims to provide reasonable assurance on the interim financial information - The review was conducted in accordance with International Standard on Review Engagements 2410[104](index=104&type=chunk) - The scope of the review is smaller than an audit, therefore no audit opinion is expressed[104](index=104&type=chunk) [Conclusion](index=35&type=section&id=Conclusion) Based on the review, nothing has come to attention that causes the belief that the Group's interim financial information is not prepared, in all material respects, in accordance with International Accounting Standard 34 - Nothing has come to attention that causes the belief that the Group's interim financial information is not prepared, in all material respects, in accordance with International Accounting Standard 34[105](index=105&type=chunk) Interim Condensed Consolidated Statement of Profit or Loss For the six months ended June 30, 2025, the company reported revenue of **RMB 2.502 billion**, net profit of **RMB 134.9 million**, net profit attributable to owners of **RMB 134.2 million**, and basic and diluted earnings per share of **RMB 0.07** Summary of Interim Condensed Consolidated Statement of Profit or Loss | Metric | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | | :--- | :--- | :--- | | Revenue | 2,502,193 | 2,093,449 | | Gross profit | 839,709 | 673,798 | | Profit before tax | 136,260 | 60,652 | | Net profit for the period | 134,908 | 60,629 | | Net profit attributable to owners of the Company | 134,164 | 56,648 | | Basic earnings per share (RMB) | 0.07 | 0.05 | | Diluted earnings per share (RMB) | 0.07 | 0.05 | Interim Condensed Consolidated Statement of Comprehensive Income For the six months ended June 30, 2025, the company's profit for the period was **RMB 134.9 million**, with other comprehensive losses of **RMB 28.764 million** arising from exchange differences on translating foreign operations, resulting in a total comprehensive income for the period of **RMB 106.1 million** Summary of Interim Condensed Consolidated Statement of Comprehensive Income | Metric | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | | :--- | :--- | :--- | | Profit for the period | 134,908 | 60,629 | | Exchange differences on translating foreign operations | (28,764) | 8,392 | | Other comprehensive (loss)/income for the period | (28,764) | 8,392 | | Total comprehensive income for the period | 106,144 | 69,021 | | Attributable to owners of the Company | 105,400 | 65,040 | | Attributable to non-controlling interests | 744 | 3,981 | Interim Condensed Consolidated Statement of Financial Position As of June 30, 2025, the company's total assets were **RMB 12.953 billion**, a decrease from **RMB 16.779 billion** at the end of 2024; total current assets were **RMB 9.911 billion**, total current liabilities were **RMB 3.145 billion**, and net current assets were **RMB 6.766 billion** Summary of Interim Condensed Consolidated Statement of Financial Position | Metric | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Total non-current assets | 3,042,254 | 3,377,280 | | Total current assets | 9,910,934 | 13,402,233 | | **Total assets** | **12,953,188** | **16,779,513** | | Total current liabilities | 3,144,956 | 13,077,014 | | Total non-current liabilities | 113,033 | 122,880 | | **Total equity** | **9,695,199** | **3,579,619** | - Net current assets significantly increased from **RMB 325 million** at the end of 2024 to **RMB 6.766 billion** as of June 30, 2025[113](index=113&type=chunk) - Dividends payable decreased from **RMB 9.891 billion** at the end of 2024 to zero, primarily due to the distribution of special dividends[113](index=113&type=chunk) Interim Condensed Consolidated Statement of Changes in Equity For the six months ended June 30, 2025, the company's total equity increased from **RMB 3.5796 billion** on January 1, 2025, to **RMB 9.6952 billion**, primarily influenced by profit for the period, scrip dividend election, and share-based payments Summary of Interim Condensed Consolidated Statement of Changes in Equity | Metric | January 1, 2025 (RMB thousands) | June 30, 2025 (RMB thousands) | | :--- | :--- | :--- | | Total attributable to owners of the Company | 3,589,369 | 9,704,205 | | Non-controlling interests | (9,750) | (9,006) | | **Total equity** | **3,579,619** | **9,695,199** | | Profit for the period (attributable to owners of the Company) | – | 134,164 | | Other comprehensive loss for the period | – | (28,764) | | Scrip dividend election | – | 6,003,741 | | Share-based payments | – | 5,325 | | Exercise of share options | – | 370 | - Total equity significantly increased, primarily due to the increase in share capital and reserves from the scrip dividend election[114](index=114&type=chunk) Interim Condensed Consolidated Statement of Cash Flows For the six months ended June 30, 2025, the company reported net cash inflow from operating activities of **RMB 63.557 million**, net cash inflow from investing activities of **RMB 4.6713 billion**, net cash outflow from financing activities of **RMB 3.9243 billion**, and cash and cash equivalents at period-end of **RMB 2.853 billion** Summary of Interim Condensed Consolidated Statement of Cash Flows | Metric | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | | :--- | :--- | :--- | | Net cash from/(used in) operating activities | 63,557 | (135,007) | | Net cash from investing activities | 4,671,325 | 1,295,072 | | Net cash used in financing activities | (3,924,273) | (18,740) | | Net increase in cash and cash equivalents | 810,609 | 1,141,325 | | Cash and cash equivalents at end of period | 2,853,012 | 3,008,655 | - Operating cash flow turned from negative to positive, indicating an improvement in operating conditions[116](index=116&type=chunk) - Net cash inflow from investing activities primarily included proceeds from the recovery of wealth management products and time deposits of **RMB 10.5139 billion**[65](index=65&type=chunk) Notes to the Interim Condensed Consolidated Financial Information This section provides detailed notes to the interim condensed consolidated financial information, covering general information, accounting policies, segment data, revenue, profit before tax, income tax, earnings per share, goodwill, property, plant and equipment, trade receivables, cash and cash equivalents, trade and other payables, provisions, dividends, share capital, related party transactions, fair value of financial instruments, and subsequent events [1 General Information](index=42&type=section&id=1%20General%20Information) Ping An Healthcare and Technology Company Limited was incorporated in the Cayman Islands on November 12, 2014, listed on the Hong Kong Stock Exchange on May 4, 2018, and primarily engages in medical and health services in China; An Xin Co., Ltd. is the controlling shareholder, and Ping An Insurance (Group) Company of China, Ltd. is the ultimate parent company - The company was incorporated in the Cayman Islands on **November 12, 2014**, and listed on the Hong Kong Stock Exchange on **May 4, 2018**[117](index=117&type=chunk)[118](index=118&type=chunk) - Primarily engages in medical and health services in China through mobile platforms[117](index=117&type=chunk) - An Xin Co., Ltd. is the controlling shareholder, and Ping An Insurance (Group) Company of China, Ltd. is the ultimate parent company[118](index=118&type=chunk) [2 Basis of Preparation](index=42&type=section&id=2%20Basis%20of%20Preparation) The interim condensed consolidated financial information is prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting" and should be read in conjunction with the financial statements for the year ended December 31, 2024 - The interim condensed consolidated financial information is prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting"[119](index=119&type=chunk) - It should be read in conjunction with the financial statements for the year ended December 31, 2024[119](index=119&type=chunk) [3 Changes in Accounting Policies and Disclosures](index=42&type=section&id=3%20Changes%20in%20Accounting%20Policies%20and%20Disclosures) This period's financial information first adopted the revised International Accounting Standard 21 "Lack of Exchangeability," but due to the convertibility of the Group's transaction currencies, this revision has no impact on the interim condensed consolidated financial information - The Group first adopted the revised International Accounting Standard 21 "Lack of Exchangeability" from January 1, 2025[121](index=121&type=chunk)[122](index=122&type=chunk) - As the currencies involved in the Group's transactions are all convertible, this revision has no impact on the interim condensed consolidated financial information[122](index=122&type=chunk) [4 Operating Segment Information](index=43&type=section&id=4%20Operating%20Segment%20Information) The Group's operating segments include medical services, health services, and elderly care services, with key operating decision-makers assessing performance based on each segment's revenue and gross profit; the vast majority of revenue is derived from external customers in China - The Group's operating segments include medical services, health services, and elderly care services[124](index=124&type=chunk) - Key operating decision-makers assess performance based on the segment revenue and gross profit of each operating segment[123](index=123&type=chunk) - The vast majority of revenue is derived from external customers in China, and most non-current assets are located in China[126](index=126&type=chunk)[127](index=127&type=chunk) [5 Revenue](index=45&type=section&id=5%20Revenue) For the six months ended June 30, 2025, the company's total revenue from customer contracts amounted to **RMB 2.502 billion**; revenue types primarily include sales of services and goods, with recognition occurring both at a point in time and over a period of time Revenue Analysis | Metric | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | | :--- | :--- | :--- | | Revenue from contracts with customers | 2,502,193 | 2,093,449 | Disaggregated Revenue Information (H1 2025) | Segment | Sales of Services and Goods (RMB thousands) | Commission Income (RMB thousands) | Total (RMB thousands) | | :--- | :--- | :--- | :--- | | Medical Services | 1,212,965 | 64,930 | 1,277,895 | | Health Services | 1,031,956 | 20,167 | 1,052,123 | | Elderly Care Services | 169,152 | 3,023 | 172,175 | | **Total** | **2,414,073** | **88,120** | **2,502,193** | - Revenue recognition primarily occurs at a point in time (**RMB 2.2785 billion**), with a portion recognized over a period of time (**RMB 223.7 million**)[130](index=130&type=chunk) [6 Profit Before Tax](index=46&type=section&id=6%20Profit%20Before%20Tax) For the six months ended June 30, 2025, the company's profit before tax was **RMB 136.3 million**; during this period, an impairment provision of **RMB 40.05 million** was recognized for investments in associates, and financial asset impairment losses amounted to **RMB 30.19 million** Components of Profit Before Tax | Item | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | | :--- | :--- | :--- | | Cost of goods | (824,034) | (708,737) | | Cost of services paid to suppliers | (714,808) | (652,444) | | Impairment provision for investments in associates | (40,050) | – | | Impairment losses on financial assets | (30,190) | (63,576) | | Fair value changes of financial assets at fair value through profit or loss | 63,643 | 80,469 | | Employee benefit expenses (including executive remuneration) | (416,572) | (343,921) | | Net foreign exchange (losses)/gains | (24,516) | 723 | - An impairment provision of **RMB 40.05 million** was recognized for investments in associates during the period, primarily due to adjustments in the financial and business outlook of the associates and changes in market conditions[132](index=132&type=chunk)[133](index=133&type=chunk) - As of June 30, 2025, the Group recognized total impairment provisions of approximately **RMB 63.715 million**[134](index=134&type=chunk) [7 Income Tax Expense](index=47&type=section&id=7%20Income%20Tax%20Expense) For the six months ended June 30, 2025, the company's income tax expense was **RMB 1.352 million**, primarily for PRC corporate income tax; the company had no income tax expense in the Cayman Islands and Hong Kong, and no plans to distribute retained earnings from its PRC subsidiaries, thus no deferred tax liabilities were recognized Income Tax Expense Analysis | Item | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | | :--- | :--- | :--- | | Current income tax – Mainland China | 1,352 | 23 | - The company had no income tax expense in the Cayman Islands and Hong Kong[136](index=136&type=chunk) - There are no plans to require PRC subsidiaries to distribute their retained earnings, thus no deferred tax liabilities related to withholding tax were recognized[137](index=137&type=chunk) [8 Earnings Per Share](index=48&type=section&id=8%20Earnings%20Per%20Share) For the six months ended June 30, 2025, the company's basic and diluted earnings per share were both **RMB 0.07**, an increase from **RMB 0.05** in the prior year Basic Earnings Per Share | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Net profit for the period attributable to owners of the Company (RMB thousands) | 134,164 | 56,648 | | Weighted average number of ordinary shares in issue (thousand shares) | 1,988,353 | 1,083,504 | | Basic earnings per share (RMB) | 0.07 | 0.05 | Diluted Earnings Per Share | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Net profit for the period attributable to owners of the Company (RMB thousands) | 134,164 | 56,648 | | Weighted average number of ordinary shares for diluted earnings per share (thousand shares) | 1,992,031 | 1,086,689 | | Diluted earnings per share (RMB) | 0.07 | 0.05 | - Stock options were included as dilutive potential ordinary shares in the calculation of diluted earnings per share[138](index=138&type=chunk) [9 Goodwill](index=49&type=section&id=9%20Goodwill) As of June 30, 2025, the company's net carrying amount of goodwill was **RMB 1.6777 billion**, primarily arising from Wanjia Medical and Smart Medical businesses; management found no indications of goodwill impairment Goodwill Components | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Wanjia Medical | 961,644 | 961,644 | | Smart Medical Business | 707,284 | 707,284 | | Jiangxi Ping An Health Pharmacy Co., Ltd. | 5,119 | 5,119 | | Ping An Yingjian | 3,166 | 3,166 | | Shanghai Mengchong Information Technology Co., Ltd. | 479 | 479 | | **Net carrying amount** | **1,677,692** | **1,677,692** | - Management reviewed cash flow forecasts based on business plans and found no indications of goodwill impairment[140](index=140&type=chunk) [10 Property, Plant and Equipment](index=49&type=section&id=10%20Property%2C%20Plant%20and%20Equipment) For the six months ended June 30, 2025, the company's cost of assets acquired was **RMB 3.211 million**, and the net carrying amount of assets disposed of was **RMB 18,000**; no impairment losses on assets were recognized during the period - The cost of assets acquired was **RMB 3.211 million** (H1 2024: **RMB 10.364 million**)[141](index=141&type=chunk) - The net carrying amount of assets disposed of was **RMB 18,000** (H1 2024: **RMB 2.318 million**)[141](index=141&type=chunk) - No impairment losses on assets were recognized by the Group during the period[142](index=142&type=chunk) [11 Trade Receivables](index=49&type=section&id=11%20Trade%20Receivables) As of June 30, 2025, the company's total trade receivables amounted to **RMB 1.3609 billion**, with impairment provisions of **RMB 250.7 million**, resulting in a net carrying amount of **RMB 1.1102 billion** Ageing Analysis of Trade Receivables | Ageing | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Within 3 months | 871,844 | 936,384 | | 3 to 6 months | 177,024 | 92,910 | | 6 months to 1 year | 94,822 | 131,863 | | 1 to 2 years | 107,859 | 46,050 | | Over 2 years | 109,349 | 116,437 | | **Total** | **1,360,898** | **1,323,644** | | Less: Impairment provision | (250,661) | (216,338) | | **Net carrying amount** | **1,110,237** | **1,107,306** | [12 Cash and Cash Equivalents, Restricted Funds, and Time Deposits](index=50&type=section&id=12%20Cash%20and%20Cash%20Equivalents%2C%20Restricted%20Funds%2C%20and%20Time%20Deposits) As of June 30, 2025, the company's cash and cash equivalents were **RMB 2.853 billion**, restricted funds were **RMB 1.0163 billion** (of which **RMB 1.011 billion** was frozen due to pending litigation), and time deposits were **RMB 1.0996 billion** Cash and Cash Equivalents | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Cash | 124 | 42 | | Bank balances | 773,821 | 891,350 | | Short-term bank deposits with original maturities within three months | 2,007,155 | 1,072,214 | | Other cash equivalents | 71,912 | 81,047 | | **Total** | **2,853,012** | **2,044,653** | - Total restricted funds amounted to **RMB 1.0163 billion**, of which **RMB 1.011 billion** was legally frozen by the court due to pending litigation[146](index=146&type=chunk) Time Deposits | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Time deposits with original maturities over three months maturing within one year | 595,598 | 887,108 | | Time deposits with original maturities over three months maturing after one year | 400,000 | 1,384,818 | | Interest receivable | 104,805 | 127,390 | | Less: Impairment provision for time deposits | (812) | (917) | | **Total** | **1,099,591** | **2,398,399** | [13 Trade and Other Payables](index=52&type=section&id=13%20Trade%20and%20Other%20Payables) As of June 30, 2025, the company's total current trade and other payables amounted to **RMB 1.9863 billion**, and non-current amounts due to related parties were **RMB 49,000**; the ageing of trade payables was primarily within 3 months Trade and Other Payables | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Trade payables | 511,187 | 776,893 | | Accrued payroll | 491,629 | 555,219 | | Accrued expenses | 463,461 | 452,946 | | Amounts due to suppliers | 201,279 | 75,884 | | Other taxes payable | 97,841 | 147,632 | | Amounts due to related parties | 74,093 | 71,539 | | Payables related to agency business | 32,672 | 11,200 | | Others | 114,174 | 112,463 | | **Total current liabilities** | **1,986,336** | **2,203,776** | | Non-current amounts due to related parties | 49 | 11,498 | - The ageing of trade payables was primarily within 3 months, amounting to **RMB 396.9 million**[150](index=150&type=chunk) [14 Provisions](index=53&type=section&id=14%20Provisions) As of June 30, 2025, the company's litigation provision was **RMB 95 million**, consistent with the end of 2024; this provision is recognized based on the probable losses from pending litigation, and the company believes it is reasonable and sufficient Provisions | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Litigation provision | 95,000 | 95,000 | - This liability is recognized based on the probable losses from pending litigation, and the company believes the provision made is reasonable and sufficient[151](index=151&type=chunk) [15 Dividends](index=53&type=section&id=15%20Dividends) The company proposed a special dividend of **HKD 9.7** per share on November 14, 2024, which was distributed on January 24, 2025; part of it was allotted to An Xin, a subsidiary of Ping An Group, in the form of new shares, increasing Ping An Group's shareholding to **52.74%** - A special dividend of **HKD 9.7** per share was proposed on November 14, 2024, and approved by shareholders on December 4, 2024[152](index=152&type=chunk) - On January 24, 2025, **698,970,587 new shares** were allotted and issued to An Xin, a subsidiary of Ping An Group, increasing Ping An Group's shareholding from **39.41%** to **52.74%**[153](index=153&type=chunk) - The total cash amount distributed for the special dividend was **HKD 4.4716 billion** (approximately **RMB 4.2259 billion**)[153](index=153&type=chunk) [16 Share Capital](index=54&type=section&id=16%20Share%20Capital) As of June 30, 2025, the company's total issued ordinary shares were **2,161,443,720** with a par value of **USD 0.000005** per share, equivalent to **RMB 72.448 million**; the increase in share capital was primarily due to the scrip dividend scheme Share Capital Movement | Item | Number of Shares | USD | RMB Equivalent (RMB) | | :--- | :--- | :--- | :--- | | Ordinary shares as at January 1, 2025 | 1,118,812,900 | 5,594 | 35,067 | | Scrip dividend scheme | 1,042,630,820 | 5,213 | 37,381 | | **Ordinary shares as at June 30, 2025** | **2,161,443,720** | **10,807** | **72,448** | - The increase in share capital was primarily due to the scrip dividend scheme, which involved the issuance of **1,042,630,820 new shares**[154](index=154&type=chunk) [17 Related Party Transactions](index=54&type=section&id=17%20Related%20Party%20Transactions) The company engaged in several significant transactions with various related parties under Ping An Group, including providing products and services, purchasing services, interest on deposits, investment income, and property lease expenses; these transactions were conducted in the normal course of business and on negotiated terms - The company engaged in significant transactions with various related parties under Ping An Group, including Ping An Life, Ping An Property & Casualty, Ping An Health Insurance, and Ping An Bank[155](index=155&type=chunk)[156](index=156&type=chunk)[157](index=157&type=chunk) Significant Related Party Transactions (H1 2025) | Transaction Type | Related Party | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | :--- | | Provision of products and services | Ping An Life | 390,753 | 213,111 | | | Ping An Property & Casualty | 146,461 | 85,422 | | Purchase of services | Ping An Health Insurance | 62,485 | 29,295 | | | Ping An Pay Technology | 42,451 | 61,895 | | Interest on deposits | Ping An Bank | 10,520 | 14,094 | | Investment income | Ping An Wealth Management | 9,144 | 11,989 | | Property lease expenses paid | Ping An Financial Center | 3,867 | – | - The pricing policy for related party transactions was determined by the relevant contracting parties through mutual negotiation[155](index=155&type=chunk) [18 Fair Value and Fair Value Hierarchy of Financial Instruments](index=60&type=section&id=18%20Fair%20Value%20and%20Fair%20Value%20Hierarchy%20of%20Financial%20Instruments) The company's financial assets primarily include financial assets measured at fair value through profit or loss; fair value measurement is categorized into three levels, and as of June 30, 2025, the company's total financial assets measured at fair value amounted to **RMB 4.2787 billion**, primarily classified as Level 2 - The company's financial assets primarily include financial assets measured at fair value through profit or loss[164](index=164&type=chunk) - Fair value measurement is categorized into Level 1 (quoted prices in active markets), Level 2 (observable inputs), and Level 3 (unobservable inputs)[167](index=167&type=chunk) Fair Value Hierarchy of Financial Assets (June 30, 2025) | Item | Level 1 (RMB thousands) | Level 2 (RMB thousands) | Level 3 (RMB thousands) | Total (RMB thousands) | | :--- | :--- | :--- | :--- | :--- | | Financial assets at fair value through profit or loss | – | 4,003,556 | 275,161 | 4,278,717 | [19 Events After the Reporting Period](index=62&type=section&id=19%20Events%20After%20the%20Reporting%20Period) There were no significant events after the reporting period from June 30, 2025, to August 19, 2025, when the Board approved the issuance of this interim condensed consolidated financial information - There were no significant events after the reporting period from June 30, 2025, to August 19, 2025[170](index=170&type=chunk) [20 Approval of Financial Information](index=62&type=section&id=20%20Approval%20of%20Financial%20Information) This interim condensed consolidated financial information was approved and authorized for issue by the company's Board of Directors on August 19, 2025 - This interim condensed consolidated financial information was approved and authorized for issue by the company's Board of Directors on August 19, 2025[171](index=171&type=chunk) Definitions This section provides definitions for key terms and terminology used in the interim report to ensure clear understanding of the report's content - Key terms defined include Audit and Risk Management Committee, Board of Directors, the Company, Connected Person, Controlling Shareholder, Corporate Governance Code, Directors, EIS Options, EIS Shares, Employee Incentive Scheme, and An Xin[172](index=172&type=chunk) - Explanations are provided for terms such as Group, Health Insurance, HKD, Hong Kong Share Registrar, Hong Kong, IFRS, Independent Third Party, Le An Xin, Life Insurance, Listing, Listing Date, Listing Rules, and Main Board[173](index=173&type=chunk)[174](index=174&type=chunk) - Definitions are given for terms including Model Code, Operating Entities, Paying Users, Ping An Group, Nomination and Remuneration Committee, O2O, Ping An, Ping An Annuity, Ping An Asset Management, Ping An Health Internet, Ping An Yingjian, Property & Casualty Insurance, SFO, Prospectus, Reporting Period, RMB, Shares, Shareholders, Stock Exchange, Subsidiaries, Substantial Shareholder, USD, and Yingjian Enterprise Management Consulting[175](index=175&type=chunk)[176](index=176&type=chunk)[177](index=177&type=chunk)

Executive Summary [Performance Overview](index=3&type=section&id=Performance%20Overview) Hysan Development's H1 2025 revenue and recurring underlying profit increased, but reported profit and basic EPS significantly declined due to fair value changes in investment properties. The company maintained its first interim dividend of 27 HK cents per share 2025 H1 Key Financial Data | Indicator | 2025 (HK$ million) | 2024 (HK$ million) | Change | | :--- | :--- | :--- | :--- | | Revenue | 1,730 | 1,693 | +2.2% | | Recurring Underlying Profit | 1,031 | 1,019 | +1.2% | | Underlying Profit | 1,031 | 1,019 | +1.2% | | Reported Profit | 75 | 427 | n/m | | Basic EPS (HK cents) | 7 | 42 | n/m | | First Interim Dividend per Share (HK cents) | 27 | 27 | ±0% | | Shareholders' Equity (as at June 30) | 65,181 | 65,993 | –1.2% | | Net Asset Value per Share (HK$) | 63.5 | 64.3 | –1.2% | [Key Business Highlights](index=3&type=section&id=Key%20Business%20Highlights) The company's retail and office businesses both saw revenue growth, driven by optimized retail portfolio, luxury brand flagships, and improved office occupancy. Lee Gardens Area pedestrian system project is progressing well, and an HK$8 billion capital recycling program has been launched - Retail business revenue increased by **2.1% year-on-year**, benefiting from an optimized retail portfolio and new generation luxury brand flagships, attracting quality tenants and driving sales growth[8](index=8&type=chunk) - Office business revenue increased by **0.8% year-on-year**, with Hong Kong office occupancy rising from **90% to 92%**, alleviating pressure from declining rental levels[8](index=8&type=chunk) - The Lee Gardens Area pedestrian system project is progressing smoothly, connecting Lee Garden Eight to Causeway Bay MTR station, creating a covered and walkable community[8](index=8&type=chunk) - An **HK$8 billion capital recycling program** will be launched over the next five years, through the disposal of certain assets in Bamboo Grove and sales of residential units in Villa Lucca and To Kwa Wan projects[8](index=8&type=chunk) [Notes on Financial Metrics](index=4&type=section&id=Notes%20on%20Financial%20Metrics) This section defines key financial metrics such as revenue, recurring underlying profit, underlying profit, reported profit, shareholders' equity, and net asset value per share, highlighting the distinction between non-HKFRS measures and reported profit - Revenue comprises gross rental income from investment property portfolios in Hong Kong and mainland China, and property management service income[9](index=9&type=chunk) - Recurring underlying profit and underlying profit are non-HKFRS measures reflecting core property investment business performance, excluding non-recurring items and unrealized fair value changes of investment properties[9](index=9&type=chunk) - Reported profit is profit attributable to owners of the company prepared in accordance with HKFRS[9](index=9&type=chunk) Chairman's Statement [Legacy of Excellence and Future Vision](index=5&type=section&id=Legacy%20of%20Excellence%20and%20Future%20Vision) Despite challenging economic conditions in Hong Kong during H1 2025, Hysan demonstrated robust business performance, emphasizing its century-long legacy as a pioneer in Hong Kong's development and its ability to innovate and adapt to societal changes, particularly the comprehensive transformation of the Lee Gardens Area - Hong Kong's economic environment was under pressure in H1 2025, with the retail and property sectors facing multiple challenges, but Hysan showed stable performance[10](index=10&type=chunk) - Hysan boasts over a century of excellence, driving development through continuous innovation and anticipating societal needs, with the Lee Gardens Area transformation as a testament to its forward-looking vision[11](index=11&type=chunk) [Transformation and Growth Strategy](index=5&type=section&id=Transformation%20and%20Growth%20Strategy) Hysan's long-term growth is based on a "Core and Pillars" strategy, where the core focuses on consolidating and expanding the Lee Gardens Area through placemaking and asset enhancement, while the pillars drive diversified growth combining asset-heavy development with asset-light investments, already contributing financially - Hysan adopts a "Core and Pillars" strategy, with the core aiming to consolidate and expand the Lee Gardens Area through placemaking and asset enhancement to meet demand[12](index=12&type=chunk) - The pillar strategy drives diversified growth, combining asset-heavy development with asset-light investments, and has begun to generate financial contributions[12](index=12&type=chunk) [Lee Gardens Area Enhancement Progress](index=5&type=section&id=Lee%20Gardens%20Area%20Enhancement%20Progress) The transformation of the Lee Gardens Area has entered a "harvesting period," with over ten newly renovated and expanded luxury brand flagships in 2024, Chanel's reopening in H1 2025, and the introduction of more lifestyle and F&B brands, solidifying its status as Hong Kong's luxury brand hub - The Lee Gardens Area transformation has entered a "harvesting period," welcoming over ten newly renovated and expanded luxury brand flagships in 2024[13](index=13&type=chunk) - In H1 2025, Chanel's new store reopened, and several refined lifestyle brands and F&B outlets were introduced, further enhancing the Lee Gardens Area's brand portfolio[13](index=13&type=chunk) [Lee Garden Eight: Sustainability and Community Connectivity](index=5&type=section&id=Lee%20Garden%20Eight%3A%20Sustainability%20and%20Community%20Connectivity) The flagship Lee Garden Eight project, expected to be completed in 2026, will expand the Lee Gardens Area's total leasable area by nearly 30%, creating a sustainable, connected, and walkable commercial and lifestyle exemplar through large green open spaces and a pedestrian system - Lee Garden Eight is expected to be completed in 2026, with a total area exceeding **1 million sq ft**, expanding the Lee Gardens Area's total leasable area by nearly **30%**[14](index=14&type=chunk) - The project integrates green indoor and outdoor spaces, featuring a **60,000 sq ft** large green open space, and will connect to Causeway Bay MTR station via a pedestrian system, creating a walkable community[15](index=15&type=chunk) [Strategic Pillars: Business and Geographical Diversification](index=6&type=section&id=Strategic%20Pillars%3A%20Business%20and%20Geographical%20Diversification) Hysan's strategic pillars drive business and geographical diversification, with Lee Garden Shanghai successfully attracting high-quality tenants, steady growth in Greater Bay Area co-working spaces, and sustained momentum from healthcare investment New Frontier Health - Lee Garden Shanghai successfully attracted high-quality tenants, strengthening its office tenant portfolio and encompassing diverse retail brands[16](index=16&type=chunk) - The joint venture with IWG continues to record steady growth in its co-working space business in the Greater Bay Area[16](index=16&type=chunk) - Healthcare investment project New Frontier Health Group maintains its growth momentum[16](index=16&type=chunk) [Retail Portfolio and Market Response](index=6&type=section&id=Retail%20Portfolio%20and%20Market%20Response) Facing challenges in Hong Kong's retail sector, Hysan has upgraded and refurbished Hysan Place, introducing new retail and F&B concepts, pop-up stores, and promotional activities to solidify its position as a local trendsetter, anticipating that the return of visitors will inject new impetus into the retail sector - Hong Kong's retail sector faces challenges from changing consumption patterns and the trend of cross-border spending, with the government introducing measures to stimulate consumption[17](index=17&type=chunk) - Hysan Place has solidified its position as a local trendsetter through upgrades, refurbishment, and the introduction of new retail and F&B concepts, pop-up stores, and promotional activities[17](index=17&type=chunk) [Office Market Competition and Advantages](index=6&type=section&id=Office%20Market%20Competition%20and%20Advantages) The Lee Gardens Area office portfolio maintained stable occupancy during the period, leveraging its prime location, convenient transportation, high-quality building specifications, and high-standard property management services. The company boasts a balanced office portfolio, combining traditional offices with flexible co-working spaces, to meet market demands - The Lee Gardens Area office portfolio maintained stable occupancy during the period, leveraging its prime location, convenient transportation, high-quality building specifications, and high-standard property management services[18](index=18&type=chunk) - The office tenant portfolio continues to expand, featuring a balanced mix of traditional offices and flexible co-working spaces to meet evolving corporate needs[19](index=19&type=chunk) [Future Outlook and Commitment](index=7&type=section&id=Future%20Outlook%20and%20Commitment) Despite market uncertainties from global economic instability, Hysan remains confident in Hong Kong's long-term position as a global financial center and Greater Bay Area hub. The company will continue to invest in the Lee Gardens Area and pursue diversified growth strategies, committed to creating sustainable long-term value, and expresses gratitude to its employees - Hysan remains confident in Hong Kong's long-term position as a major global financial center and a hub in the Greater Bay Area[20](index=20&type=chunk) - The company will continue to invest in the Lee Gardens Area and pursue diversified growth strategies to seize emerging opportunities, committed to creating sustainable long-term value[20](index=20&type=chunk) Management Discussion and Analysis [Results Review](index=8&type=section&id=Results%20Review) In H1 2025, Hysan's revenue and recurring underlying profit grew by 2.2% and 1.2% respectively, primarily driven by robust performance across core business segments, including resilient Hong Kong retail, optimized asset portfolio, improved sales, higher office occupancy, and increased occupancy in Lee Garden Shanghai and Bamboo Grove. The company maintained its first interim dividend of 27 HK cents per share 2025 H1 Performance Overview | Indicator | 2025 (HK$ million) | 2024 (HK$ million) | Change | | :--- | :--- | :--- | :--- | | Revenue | 1,730 | 1,693 | +2.2% | | – Retail | 862 | 844 | +2.1% | | – Office | 750 | 744 | +0.8% | | – Residential | 118 | 105 | +12.4% | | Recurring Underlying Profit | 1,031 | 1,019 | +1.2% | | Underlying Profit | 1,031 | 1,019 | +1.2% | - Revenue and recurring underlying profit growth were mainly driven by robust performance across core business segments, including resilient Hong Kong retail, optimized asset portfolio, and improved sales[23](index=23&type=chunk) - Office occupancy increased from **90% to 92%**, helping to mitigate the impact of rental adjustments; expansion of Lee Garden Shanghai and improved occupancy at Bamboo Grove also contributed[23](index=23&type=chunk) - The company announced a first interim dividend of **27 HK cents per share** for the current year, consistent with last year[24](index=24&type=chunk) Reconciliation of Reported Profit to Underlying Profit | Indicator | 2025 (HK$ million) | 2024 (HK$ million) | | :--- | :--- | :--- | | Reported Profit | 75 | 427 | | Fair Value Changes of Properties | 673 | 209 | | Investment Properties | 964 | 197 | | Less: Impact of Other Non-controlling Interests | (291) | 4 | | Share of Associates (after tax) | – | 8 | | Impairment Loss on Joint Ventures | 30 | 170 | | Other Gains and Losses | (1) | (1) | | Profit Attributable to Holders of Perpetual Capital Securities | 254 | 214 | | Recurring Underlying Profit / Underlying Profit | 1,031 | 1,019 | [Business Review](index=9&type=section&id=Business%20Review) This section details Hysan's performance across its three main business segments: retail, office, and residential. Retail business revenue grew by 2.1%, with Hong Kong retail occupancy rising to 94% and mainland China retail occupancy significantly increasing to 64%. Office business revenue grew by 0.8%, with Hong Kong office occupancy stable at 92% and mainland China office occupancy rising to 68%. Residential business revenue grew by 12.4%, benefiting from the recovery in the high-end residential market [Retail Business](index=9&type=section&id=Retail%20Business) The Group's retail business revenue increased by 2.1% to HK$862 million. Hong Kong retail revenue rose by 0.8%, with occupancy increasing to 94% and renewal rental levels maintaining an upward trend. Mainland China retail occupancy significantly improved to 64%, with Lee Garden Shanghai's market regaining vitality. The company enhanced footfall and sales through innovative marketing campaigns and customer relationship management Retail Business Revenue | HK$ million | 2025 | 2024 | Change | | :--- | :--- | :--- | :--- | | Retail | 862 | 844 | +2.1% | | – Hong Kong | 851 | 844 | +0.8% | | – Mainland China | 11 | – | n/m | - Hong Kong retail occupancy was **94%** as at June 30, 2025 (December 31, 2024: 92%), with renewal, rent review, and new letting rental levels maintaining a significant upward trend[27](index=27&type=chunk) - Mainland China retail portfolio occupancy significantly increased to **64%** (December 31, 2024: 41%), with the Lee Garden Shanghai market regaining vitality[29](index=29&type=chunk) - The company stimulated mall footfall and sales through innovative marketing campaigns such as Chinese New Year street markets, pop-up events with international celebrities, food promotions, and beauty festivals[30](index=30&type=chunk) - Continuous optimization of customer relationship management programs enhanced personalized experiences for premium customers, driving up average spending and Club Avenue member participation rates[31](index=31&type=chunk) [Office Business](index=11&type=section&id=Office%20Business) The Group's office business revenue increased by 0.8% to HK$750 million. Hong Kong business revenue slightly decreased by 2.4%, but occupancy remained stable at 92%, with pre-leasing promotional activities ongoing. Mainland China business revenue significantly increased, with occupancy rising to 68%, actively attracting new tenants Office Business Revenue | HK$ million | 2025 | 2024 | Change | | :--- | :--- | :--- | :--- | | Office | 750 | 744 | +0.8% | | – Hong Kong | 703 | 720 | –2.4% | | – Mainland China | 47 | 24 | n/m | - The Hong Kong office market remains challenging, but the Lee Gardens Area office portfolio maintained stable occupancy at **92%** (December 31, 2024: 90%)[33](index=33&type=chunk) - Mainland China office business revenue increased to **HK$47 million** (2024: HK$24 million), with occupancy rising to **68%** (December 31, 2024: 66%)[34](index=34&type=chunk) - Banking, finance, and wealth management sectors remain the largest tenant category, occupying **21.3%** of the tenant portfolio's leasable area[33](index=33&type=chunk) [Residential Business](index=11&type=section&id=Residential%20Business) Hong Kong's high-end residential leasing market steadily recovered in H1 2025, benefiting from the influx of expatriate professionals and talent admission schemes. Hysan's residential leasing business revenue increased by 12.4% to HK$118 million, with average rental levels rising, though occupancy slightly decreased to 70% - Hong Kong's high-end residential leasing market steadily recovered in H1 2025, benefiting from the influx of expatriate professionals and talent admission schemes[35](index=35&type=chunk) - Residential leasing business revenue increased by **12.4% to HK$118 million** (2024: HK$105 million)[35](index=35&type=chunk) - Occupancy was **70%** (December 31, 2024: 73%), with average rental levels for renewals, rent reviews, and new leases trending upwards[35](index=35&type=chunk) [Core Business and Strategic Pillar Expansion](index=12&type=section&id=Core%20Business%20and%20Strategic%20Pillar%20Expansion) Hysan is actively expanding its core business and strategic pillars, including the Lee Garden Eight commercial property development, Villa Lucca and To Kwa Wan residential projects, investment in Grand Gateway Shanghai, Greater Bay Area co-working joint venture, and healthcare investment in New Frontier Health. Concurrently, the company launched an HK$8 billion capital recycling program to optimize its capital structure and re-deploy capital [Lee Garden Eight Commercial Property Development](index=12&type=section&id=Lee%20Garden%20Eight%20Commercial%20Property%20Development) Construction of the superstructure for the Lee Garden Eight project is progressing smoothly, with completion expected in 2026, which will solidify the Lee Gardens Area's position as a unique hotspot in Hong Kong. The project has received multiple design and sustainability awards, affirming Hysan's vision to create an urban oasis and vibrant community - Lee Garden Eight is a joint venture between Hysan and Chinachem Group, with satisfactory progress on the superstructure construction, expected to be completed in **2026**[37](index=37&type=chunk) - The project has received multiple accolades, including "Best Mixed-use Development (Hong Kong)" and "Best Sustainable Commercial Development (Hong Kong)"[37](index=37&type=chunk) [Residential Development: Villa Lucca and To Kwa Wan Projects](index=12&type=section&id=Residential%20Development%3A%20Villa%20Lucca%20and%20To%20Kwa%20Wan%20Projects) The Villa Lucca high-end residential project has signed contracts for 140 units, benefiting from relaxed mortgage lending and falling interest rates, with 25 units sold and leased during the period. Superstructure construction for the To Kwa Wan residential project is in full swing, with concrete works for the retail portion expected to be completed in Q3 2025, and the overall project expected to obtain occupation permit in Q2 2027 - The Villa Lucca high-end residential project has signed contracts for **140 units**, with **25 units** sold and leased during the period[39](index=39&type=chunk) - Superstructure construction for the To Kwa Wan residential project is in full swing, with concrete works for the retail portion expected to be completed in **Q3 2025**, and the overall project expected to obtain occupation permit in **Q2 2027**[39](index=39&type=chunk) [Shanghai Investment Property: Grand Gateway](index=13&type=section&id=Shanghai%20Investment%20Property%3A%20Grand%20Gateway) Hysan's 26% interest in Grand Gateway Shanghai demonstrated resilient performance during the period, with this investment disclosed as "Investments in associates" in the condensed consolidated statement of financial position - Hysan's **26% interest** in Grand Gateway Shanghai demonstrated resilient performance during the period[41](index=41&type=chunk) [Greater Bay Area Co-working Joint Venture](index=13&type=section&id=Greater%20Bay%20Area%20Co-working%20Joint%20Venture) Hysan's joint venture with IWG in the Greater Bay Area recorded strong and stable occupancy and business performance in its co-working spaces, signing five new locations during the period and currently operating 40 centers, with an optimistic outlook for the future - The joint venture with IWG recorded strong and stable occupancy and business performance in its co-working space business in the Greater Bay Area[42](index=42&type=chunk) - The joint venture signed **five new locations** in H1 2025, currently operating **40 centers** in the Greater Bay Area[42](index=42&type=chunk) [Healthcare: New Frontier Health](index=13&type=section&id=Healthcare%3A%20New%20Frontier%20Health) Through its minority equity investment in New Frontier Health Group, Hysan is involved in mainland China's fast-growing healthcare sector. New Frontier Health Group maintains stable business growth, operating 33 hospitals, opening a new hospital in Ningbo, and acquiring Hong Kong Oncology Medical Group to provide integrated treatment solutions - New Frontier Health Group maintains stable business growth, operating **33 hospitals**, and opening a new hospital in Ningbo[44](index=44&type=chunk) - Through its minority equity investment, Hysan is involved in mainland China's fast-growing healthcare sector[44](index=44&type=chunk) [Capital Recycling Program](index=13&type=section&id=Capital%20Recycling%20Program) The company has launched a five-year, HK$8 billion capital recycling program, strategically disposing of non-core assets (such as Bamboo Grove residential buildings and VILLA LUCCA, To Kwa Wan residential project units) to enhance capital efficiency, optimize capital structure, unlock asset value, and re-deploy capital into strategic focus areas - The company has launched a **five-year, HK$8 billion capital recycling program** through strategic disposal of non-core assets[46](index=46&type=chunk) - The program aims to optimize the Group's capital structure through deleveraging, unlock value from mature residential assets, and re-deploy capital into the company's strategic focus areas[46](index=46&type=chunk) [Financial Review](index=14&type=section&id=Financial%20Review) This section reviews Hysan's operating expenses, finance costs, revaluation of investment properties, investments in associates and joint ventures, other investments, bank balances, and capital expenditure. Operating expenses as a percentage of revenue slightly increased, and finance costs rose due to increased borrowings. Fair value losses on investment properties primarily reflect increased office market risks. Capital expenditure was mainly for the Caroline Hill Road project and Lee Gardens Area enhancement works [Operating Expenses](index=14&type=section&id=Operating%20Expenses) The Group's operating expenses increased by 5.7% to HK$447 million, with the ratio to revenue slightly increasing to 25.8% (2024: 25.0%), mainly comprising property expenses and administrative expenses Operating Expenses Overview | HK$ million | 2025 | 2024 | Change | | :--- | :--- | :--- | :--- | | Operating Expenses | 447 | 423 | +5.7% | | – Hong Kong | 418 | 400 | +4.5% | | – Mainland China | 29 | 23 | n/m | - The ratio of operating expenses to revenue slightly increased to **25.8%** compared to the same period last year (2024: 25.0%)[47](index=47&type=chunk) [Finance Costs](index=14&type=section&id=Finance%20Costs) Finance costs increased to HK$289 million (H1 2024: HK$213 million), primarily due to increased borrowings during the period. The effective interest rate for the period was 3.8%, down from 4.4% in the same period of 2024 - Finance costs increased to **HK$289 million**, primarily due to increased borrowings during the period[49](index=49&type=chunk) - The effective interest rate for the period was **3.8%**, compared to **4.4%** in the same period of 2024[49](index=49&type=chunk) [Revaluation of Investment Properties](index=14&type=section&id=Revaluation%20of%20Investment%20Properties) The Group's investment property portfolio valuation slightly increased by 0.4% to HK$96,893 million. Excluding capital expenditure, the fair value loss on investment properties was HK$964 million (2024: HK$197 million), primarily reflecting increased office business market risks amidst global economic uncertainties - Investment property portfolio valuation increased by **0.4% to HK$96,893 million**[50](index=50&type=chunk) - The fair value loss on investment properties was **HK$964 million**, primarily reflecting increased office business market risks[50](index=50&type=chunk) [Investments in Associates and Joint Ventures](index=14&type=section&id=Investments%20in%20Associates%20and%20Joint%20Ventures) The Group's share of results from associates (primarily Grand Gateway Shanghai) was HK$115 million. The share of losses from joint ventures was HK$7 million (2024: HK$197 million), mainly reflecting an impairment loss on properties held for sale under development in the Villa Lucca project - The Group's share of results from associates was **HK$115 million** (2024: HK$117 million)[51](index=51&type=chunk) - The Group's share of losses from joint ventures was **HK$7 million** (2024: HK$197 million), mainly reflecting an impairment loss on properties held for sale under development in the Villa Lucca project[51](index=51&type=chunk) [Other Investments](index=15&type=section&id=Other%20Investments) The Group expands its geographical and business scope through strategic minority equity investments, with the investment in New Frontier Health Group providing strategic opportunities in mainland China's fast-growing healthcare sector. As at June 30, 2025, total other financial investments amounted to HK$1,582 million - Total other financial investments amounted to **HK$1,582 million** (December 31, 2024: HK$1,657 million)[52](index=52&type=chunk) - The investment in New Frontier Health Group provides the Group with strategic investment opportunities in mainland China's fast-growing healthcare sector[52](index=52&type=chunk) [Bank Balances](index=15&type=section&id=Bank%20Balances) The Group places surplus funds in fixed deposits with banks of excellent credit ratings and invests in investment-grade debt securities. Interest income decreased to HK$92 million, primarily due to reduced bank deposits - Interest income decreased to **HK$92 million** (2024: HK$95 million), primarily due to reduced bank deposits[54](index=54&type=chunk) [Capital Expenditure](index=15&type=section&id=Capital%20Expenditure) Total cash outflow for capital expenditure increased to HK$1,069 million during the period (2024: HK$645 million), mainly for construction works at the Caroline Hill Road project and enhancement works in the Lee Gardens Area, aimed at enhancing the asset value of the investment property portfolio - Total cash outflow for capital expenditure increased to **HK$1,069 million** during the period (2024: HK$645 million)[55](index=55&type=chunk) - Capital expenditure mainly stemmed from construction works at the Caroline Hill Road project and enhancement works in the Lee Gardens Area[55](index=55&type=chunk) [Treasury Policy](index=16&type=section&id=Treasury%20Policy) Hysan's treasury policy aims to ensure robust liquidity, strong financial health, and an appropriate capital structure through diversified funding sources, suitable repayment period allocation, low borrowing spreads, and appropriate hedging and foreign exchange management strategies. Total debt increased during the period, gearing ratio slightly rose, and net interest cover decreased, but the company maintained its investment-grade credit ratings [Capital Structure Management](index=16&type=section&id=Capital%20Structure%20Management) The Group is committed to diversifying funding sources, maintaining an appropriate allocation of repayment profiles and overall fund utilization, keeping borrowing spreads low, and adopting suitable hedging and foreign exchange management strategies to ensure robust liquidity, strong financial health, and an appropriate capital structure - The Group is committed to diversifying funding sources and maintaining an appropriate allocation of repayment profiles and overall fund utilization[56](index=56&type=chunk) - Committed to maintaining low borrowing spreads in line with market conditions, and adopting appropriate hedging and foreign exchange management strategies[56](index=56&type=chunk) [Sources of Funding](index=16&type=section&id=Sources%20of%20Funding) As at June 30, 2025, the Group's total debt increased to HK$28,796 million, primarily due to capital expenditure for strategic projects. Bank loans accounted for approximately 50% of total debt, with the remaining 50% from capital market issuances - As at June 30, 2025, the Group's total debt increased to **HK$28,796 million** (December 31, 2024: HK$26,717 million), primarily due to capital expenditure for strategic projects[57](index=57&type=chunk) - Bank loans accounted for approximately **50%** of the Group's total debt, with the remaining **50%** raised from capital markets[57](index=57&type=chunk) Debt Funding Sources (as at June 30, 2025) | | Callable (HK$ million) | Drawn (HK$ million) | Available (HK$ million) | | :--- | :--- | :--- | :--- | | Secured Bank Loans | 12,951 | 9,929 | 3,022 | | Unsecured Bank Loans | 4,400 | 4,200 | 200 | | Committed Revolving Facilities | 8,700 | – | 8,700 | | Capital Market Debt | 14,516 | 14,516 | – | | Total Committed Facilities | 40,567 | 28,645 | 11,922 | | Uncommitted Revolving Facilities | 2,699 | 151 | 2,548 | | Total Debt Funding Sources | 43,266 | 28,796 | 14,470 | [Repayment Profile](index=17&type=section&id=Repayment%20Profile) The Group maintains a well-structured debt repayment profile over the next 10 years, aligned with the nature of its assets and operations. As at June 30, 2025, the average repayment period for the debt portfolio was 3.2 years, a slight decrease from 3.4 years as at December 31, 2024 - The average repayment period for the debt portfolio was **3.2 years** (December 31, 2024: 3.4 years)[60](index=60&type=chunk) Debt Repayment Profile (HK$ million) | Year | Unsecured Bank Loans | Fixed Rate Notes | Secured Bank Loans | | :--- | :--- | :--- | :--- | | 2025 | 750 | 2,166 | 151 | | 2026 | 500 | 3,700 | 400 | | 2027 | 1,688 | – | – | | 2028 | 3,790 | – | – | | 2029 | 4,672 | – | – | | 2030 | 5,957 | – | – | | 2031 | 3,972 | – | – | | 2032 | 100 | – | – | | 2033 | 400 | – | – | | 2034 | 550 | – | – | | 2035 | 750 | – | – | [Gearing Ratio and Net Interest Cover](index=17&type=section&id=Gearing%20Ratio%20and%20Net%20Interest%20Cover) The Group's gearing ratio, calculated as net debt to equity, was 32.9% at the end of H1 2025 (December 31, 2024: 31.4%), and the net interest cover was 7.5 times (2024: 10.8 times) - The gearing ratio was **32.9%** at the end of H1 2025 (December 31, 2024: 31.4%)[62](index=62&type=chunk) - The net interest cover for H1 2025 was **7.5 times** (2024: 10.8 times)[62](index=62&type=chunk) [Credit Ratings](index=18&type=section&id=Credit%20Ratings) The Group is committed to maintaining investment-grade credit ratings. As at June 30, 2025, Moody's and Fitch assigned credit ratings of Baa2 and BBB respectively to the Group - As at June 30, 2025, Moody's and Fitch assigned credit ratings of **Baa2 and BBB** respectively to the Group[64](index=64&type=chunk) [Liquidity Management](index=18&type=section&id=Liquidity%20Management) As at June 30, 2025, the Group held total cash and bank balances of approximately HK$3,348 million and invested HK$584 million in investment-grade debt securities, with available committed credit facilities for use if needed - As at June 30, 2025, the Group held total cash and bank balances of approximately **HK$3,348 million** (December 31, 2024: HK$2,211 million)[65](index=65&type=chunk) - Invested **HK$584 million** (December 31, 2024: HK$896 million) in investment-grade debt securities[65](index=65&type=chunk) [Interest Rate Management](index=18&type=section&id=Interest%20Rate%20Management) The Group closely monitors interest rate risk and adopts appropriate hedging strategies. As at June 30, 2025, the fixed-rate debt ratio (after interest rate swaps) was 56%, and the effective interest rate decreased from 4.3% at year-end to 3.8% at H1 2025, mainly due to a decrease in HIBOR - The fixed-rate debt ratio (after interest rate swaps) was **56%** (December 31, 2024: 61%)[67](index=67&type=chunk) - The effective interest rate slightly decreased from **4.3%** at year-end to **3.8%** at H1 2025, mainly due to a decrease in HIBOR[67](index=67&type=chunk) [Foreign Exchange Management](index=18&type=section&id=Foreign%20Exchange%20Management) The Group minimizes currency risk by not speculating in foreign currencies for asset and liability management, monitoring and managing foreign currency risks such as USD and RMB, and implementing systematic measures to reduce risk when necessary. Most guaranteed perpetual capital securities have been converted to HKD via cross-currency swaps to mitigate exchange rate volatility - The Group minimizes currency risk and does not manage assets and liabilities through speculative foreign currency trading[68](index=68&type=chunk) - Most guaranteed perpetual capital securities have been converted to HKD through cross-currency swap derivatives to reduce exchange rate volatility uncertainty[68](index=68&type=chunk) [Capital Management](index=18&type=section&id=Capital%20Management) During H1 2025, the Group issued US$750 million in subordinated guaranteed perpetual capital securities to refinance perpetual capital securities redeemable in 2025. Concurrently, it repurchased HK$5,363 million principal amount of subordinated guaranteed perpetual capital securities for a cash consideration of HK$5,365 million - The Group issued **US$750 million** in subordinated guaranteed perpetual capital securities to refinance perpetual capital securities redeemable in 2025[69](index=69&type=chunk) - Repurchased **HK$5,363 million** principal amount of subordinated guaranteed perpetual capital securities for a cash consideration of **HK$5,365 million** (2024: HK$777 million)[69](index=69&type=chunk) Review Report on Condensed Consolidated Financial Statements Deloitte Touche Tohmatsu has reviewed Hysan Development Company Limited's condensed consolidated financial statements for the six months ended June 30, 2025, in accordance with Hong Kong Standard on Review Engagements 2410. The review concluded that nothing has come to their attention that causes them to believe the condensed consolidated financial statements are not prepared, in all material respects, in accordance with HKAS 34 - Deloitte Touche Tohmatsu has reviewed the condensed consolidated financial statements in accordance with Hong Kong Standard on Review Engagements 2410[70](index=70&type=chunk)[71](index=71&type=chunk) - The review concluded that nothing has come to their attention that causes them to believe the condensed consolidated financial statements are not prepared, in all material respects, in accordance with HKAS 34[72](index=72&type=chunk) Condensed Consolidated Statement of Profit or Loss For the six months ended June 30, 2025, Hysan Development's revenue was HK$1,730 million, and profit for the period was HK$97 million, a significant decrease from HK$717 million in the prior year, primarily due to a HK$964 million fair value loss on investment properties. Basic earnings per share was 7 HK cents Condensed Consolidated Statement of Profit or Loss (for the six months ended June 30) | Indicator | 2025 (HK$ million) | 2024 (HK$ million) | | :--- | :--- | :--- | | Revenue | 1,730 | 1,693 | | Gross Profit | 1,426 | 1,407 | | Investment Income | 113 | 94 | | Administrative Expenses | (143) | (137) | | Finance Costs | (289) | (213) | | Fair Value Changes of Investment Properties | (964) | (197) | | Share of Results of Associates | 115 | 117 | | Share of Results of Joint Ventures | (7) | (197) | | Profit Before Tax | 252 | 875 | | Taxation | (155) | (158) | | Profit for the Period | 97 | 717 | | Profit Attributable to Owners of the Company | 75 | 427 | | Basic Earnings Per Share (HK cents) | 7 | 42 | - Profit for the period significantly decreased to **HK$97 million**, primarily due to a **HK$964 million fair value loss** on investment properties[74](index=74&type=chunk) Condensed Consolidated Statement of Comprehensive Income For the six months ended June 30, 2025, Hysan Development's profit for the period was HK$97 million. Net other comprehensive expenses were HK$53 million, resulting in a total comprehensive income for the period of HK$44 million, a significant decrease from HK$668 million in the prior year. Key factors included fair value changes on equity investments recognized in other comprehensive income and net adjustments to hedging reserves Condensed Consolidated Statement of Comprehensive Income (for the six months ended June 30) | Indicator | 2025 (HK$ million) | 2024 (HK$ million) | | :--- | :--- | :--- | | Profit for the Period | 97 | 717 | | Revaluation Loss on Owner-occupied Properties, after tax | – | (12) | | Fair Value Changes on Equity Investments Recognized in Other Comprehensive Income | (80) | 69 | | Exchange Differences on Subsidiaries | 116 | (91) | | Net Adjustments to Hedging Reserves | (175) | 24 | | Exchange Reserve of Associates | 86 | (39) | | Other Comprehensive Expenses for the Period, after tax | (53) | (49) | | Total Comprehensive Income for the Period | 44 | 668 | | Total Comprehensive Income Attributable to Owners of the Company | 22 | 378 | - Total comprehensive income for the period significantly decreased to **HK$44 million**, primarily impacted by a **HK$80 million fair value loss** on equity investments recognized in other comprehensive income and a **HK$175 million net adjustment loss** to hedging reserves[76](index=76&type=chunk) Condensed Consolidated Statement of Financial Position As at June 30, 2025, Hysan Development's total assets less current liabilities were HK$112,305 million, and total equity was HK$76,816 million. Investment properties remained the largest asset class at HK$96,893 million. Net current assets (liabilities) turned positive to HK$764 million from negative HK$1,955 million at year-end 2024, mainly due to reduced borrowings and increased cash and cash equivalents Condensed Consolidated Statement of Financial Position (as at June 30, 2025) | Indicator | 2025 (HK$ million) | 2024 (HK$ million) | | :--- | :--- | :--- | | **Non-current Assets** | | | | Investment Properties | 96,893 | 96,547 | | Investments in Associates | 5,548 | 5,347 | | Investments in Joint Ventures | 352 | 342 | | Other Financial Investments | 1,582 | 1,657 | | **Current Assets** | | | | Fixed Deposits | 901 | 647 | | Cash and Cash Equivalents | 2,447 | 1,564 | | **Current Liabilities** | | | | Borrowings | 1,444 | 2,872 | | **Non-current Liabilities** | | | | Borrowings | 27,197 | 23,642 | | Perpetual Capital Securities | 9,918 | 9,437 | | **Total Equity** | 76,816 | 77,429 | | Equity Attributable to Owners of the Company | 65,181 | 65,993 | - Net current assets (liabilities) turned from **(HK$1,955 million)** as at December 31, 2024, to **HK$764 million** as at June 30, 2025, indicating improved liquidity[77](index=77&type=chunk) - Total assets less current liabilities increased to **HK$112,305 million** from HK$109,227 million as at December 31, 2024[77](index=77&type=chunk) Condensed Consolidated Statement of Changes in Equity For the six months ended June 30, 2025, Hysan Development's total equity decreased from HK$77,429 million at the beginning of the year to HK$76,816 million. Equity attributable to owners of the company decreased from HK$65,993 million to HK$65,181 million, primarily affected by reduced profit for the period, net loss on hedging instruments, dividend payments, and repurchase of perpetual capital securities, despite the issuance of new perpetual capital securities Condensed Consolidated Statement of Changes in Equity (for the six months ended June 30) | Indicator | As at Jan 1, 2025 (HK$ million) | Profit for the Period (HK$ million) | Other Comprehensive Income/Expenses (HK$ million) | Dividends Paid (HK$ million) | Changes in Perpetual Capital Securities (HK$ million) | As at June 30, 2025 (HK$ million) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Equity Attributable to Owners of the Company | 65,993 | 75 | 22 | (832) | (2) | 65,181 | | Perpetual Capital Securities | 9,437 | 254 | – | (210) | 437 | 9,918 | | Other Non-controlling Interests | 1,999 | (232) | (232) | (50) | – | 1,717 | | **Total Equity** | **77,429** | **97** | **44** | **(1,092)** | **435** | **76,816** | - Equity attributable to owners of the company decreased by **HK$812 million**, mainly due to reduced profit for the period, net loss on hedging instruments, and dividend payments[79](index=79&type=chunk)[82](index=82&type=chunk) - Issued **HK$5,800 million** in perpetual capital securities while repurchasing **HK$5,365 million**, resulting in a net increase of **HK$435 million**[79](index=79&type=chunk)[82](index=82&type=chunk) Condensed Consolidated Statement of Cash Flows For the six months ended June 30, 2025, Hysan Development's net cash inflow from operating activities was HK$1,142 million. Net cash outflow from investing activities was HK$1,095 million, primarily for payments for investment properties and an increase in fixed deposits. Net cash inflow from financing activities was HK$835 million, mainly from new bank loans and issuance of perpetual capital securities, offsetting loan repayments and repurchase of perpetual capital securities. Net increase in cash and cash equivalents for the period was HK$882 million Condensed Consolidated Statement of Cash Flows (for the six months ended June 30) | Indicator | 2025 (HK$ million) | 2024 (HK$ million) | | :--- | :--- | :--- | | Net Cash Inflow from Operating Activities | 1,142 | 1,070 | | Net Cash Outflow from Investing Activities | (1,095) | (848) | | Net Cash Inflow (Outflow) from Financing Activities | 835 | (1,100) | | Net Increase (Decrease) in Cash and Cash Equivalents | 882 | (878) | | Cash and Cash Equivalents at January 1 | 1,564 | 2,583 | | Cash and Cash Equivalents at June 30 | 2,447 | 1,706 | - Net cash inflow from operating activities was **HK$1,142 million**, an increase from the prior period[83](index=83&type=chunk) - Net cash outflow from investing activities increased to **HK$1,095 million**, primarily for payments for investment properties (**HK$1,069 million**) and an increase in fixed deposits (**HK$2,263 million**)[83](index=83&type=chunk) - Financing activities shifted from a net outflow in the prior period to a net inflow of **HK$835 million**, mainly from new bank loans (**HK$5,641 million**) and issuance of perpetual capital securities (**HK$5,800 million**)[83](index=83&type=chunk) Notes to the Condensed Consolidated Financial Statements [1. Basis of Preparation](index=27&type=section&id=1.%20Basis%20of%20Preparation) The condensed consolidated financial statements for the six months ended June 30, 2025, are prepared in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting" issued by the HKICPA and the disclosure requirements of the Listing Rules. Comparative information is extracted from the statutory consolidated financial statements for the year ended December 31, 2024 - The condensed consolidated financial statements are prepared in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting" and the Listing Rules[84](index=84&type=chunk) - Comparative financial information for the year ended December 31, 2024, is extracted from the statutory consolidated financial statements for that year[84](index=84&type=chunk) [2. Principal Accounting Policies](index=27&type=section&id=2.%20Principal%20Accounting%20Policies) These unaudited condensed consolidated financial statements are prepared primarily on a historical cost basis, except for certain properties and financial instruments measured at revalued amounts or fair value. The accounting policies and methods of computation adopted are consistent with those used in the preparation of the consolidated financial statements for the year ended December 31, 2024, and the application of HKFRS amendments had no significant impact on the results and financial position for the current period - These condensed consolidated financial statements are prepared on a historical cost basis, except for certain properties and financial instruments measured at revalued amounts or fair value[85](index=85&type=chunk) - The accounting policies and methods of computation adopted are consistent with those used in the preparation of the consolidated financial statements for the year ended December 31, 2024[85](index=85&type=chunk) - The application of HKFRS amendments had no significant impact on the Group's results and financial position for the current and/or prior accounting periods, nor on the disclosures in the condensed consolidated financial statements[86](index=86&type=chunk) [3. Revenue](index=28&type=section&id=3.%20Revenue) Revenue primarily comprises gross rental income from the Group's investment properties in Hong Kong and mainland China, and management fees from property management services. Income from property management services is recognized over time based on the completion of performance obligations - Revenue refers to gross rental income from investment properties and management fees from property management services during the period[88](index=88&type=chunk) - The Group's principal businesses are property investment, management, and development, with revenue and results primarily derived from investment properties in Hong Kong and mainland China[89](index=89&type=chunk) [4. Segment Information](index=28&type=section&id=4.%20Segment%20Information) The Group's operating and reportable segments include retail, office, residential, and property development. This section provides an analysis of revenue, results, and assets for each segment, showing income growth across retail, office, and residential segments, and a shift from loss to profit in the property development segment's share of joint venture results. Segment assets primarily consist of investment properties and property development-related assets [Segment Revenue and Results](index=29&type=section&id=Segment%20Revenue%20and%20Results) For the six months ended June 30, 2025, retail segment revenue was HK$862 million, office segment was HK$750 million, and residential segment was HK$118 million, all showing growth compared to the prior period. The property development segment's share of joint venture results turned from a loss of HK$30 million to a profit of HK$13 million Segment Revenue and Results (for the six months ended June 30, 2025) | Indicator | Retail (HK$ million) | Office (HK$ million) | Residential (HK$ million) | Property Development (HK$ million) | Consolidated (HK$ million) | | :--- | :--- | :--- | :--- | :--- | :--- | | Rental Income from Investment Properties | 773 | 637 | 104 | – | 1,514 | | Income from Property Management Services | 89 | 113 | 14 | – | 216 | | Segment Revenue | 862 | 750 | 118 | – | 1,730 | | Segment Gross Profit | 723 | 620 | 83 | – | 1,426 | | Share of Results of Joint Ventures | – | – | – | 13 | 13 | | Segment Profit | 723 | 620 | 83 | 13 | 1,439 | Segment Revenue and Results (for the six months ended June 30, 2024) | Indicator | Retail (HK$ million) | Office (HK$ million) | Residential (HK$ million) | Property Development (HK$ million) | Consolidated (HK$ million) | | :--- | :--- | :--- | :--- | :--- | :--- | | Rental Income from Investment Properties | 759 | 635 | 92 | – | 1,486 | | Income from Property Management Services | 85 | 109 | 13 | – | 207 | | Segment Revenue | 844 | 744 | 105 | – | 1,693 | | Segment Gross Profit | 712 | 621 | 74 | – | 1,407 | | Share of Results of Joint Ventures | – | – | – | (30) | (30) | | Segment Profit (Loss) | 712 | 621 | 74 | (30) | 1,377 | - Revenue for all segments is derived from external customers, and segment profit includes the share of results from the joint venture investing in the Tai Po residential project[94](index=94&type=chunk) [Segment Assets](index=32&type=section&id=Segment%20Assets) As at June 30, 2025, total consolidated assets were HK$115,454 million. Retail, office, and residential segment assets were HK$33,242 million, HK$33,847 million, and HK$8,665 million respectively, while property development segment assets were HK$25,661 million. Unallocated assets include investments in associates and joint ventures, other financial investments, and other assets Segment Assets (as at June 30, 2025) | Segment | 2025 (HK$ million) | | :--- | :--- | | Retail | 33,242 | | Office | 33,847 | | Residential | 8,665 | | Property Development | 25,661 | | **Total Segment Assets** | **101,415** | | Loans to Associates and Investments | 5,556 | | Investments in Joint Ventures | 350 | | Other Financial Investments | 1,582 | | Other Assets | 6,551 | | **Total Consolidated Assets** | **115,454** | Segment Assets (as at December 31, 2024) | Segment | 2024 (HK$ million) | | :--- | :--- | | Retail | 32,986 | | Office | 34,265 | | Residential | 8,667 | | Property Development | 25,006 | | **Total Segment Assets** | **100,924** | | Loans to Associates and Investments | 5,355 | | Investments in Joint Ventures | 340 | | Other Financial Investments | 1,657 | | Other Assets | 5,813 | | **Total Consolidated Assets** | **114,089** | - Retail and office segments include investment properties located in mainland China, valued at **HK$656 million** and **HK$2,742 million** respectively[99](index=99&type=chunk) [5. Finance Costs](index=34&type=section&id=5.%20Finance%20Costs) For the six months ended June 30, 2025, total finance costs were HK$289 million, an increase from HK$213 million in the prior period. Total interest expense was HK$590 million, of which HK$367 million was capitalized. Net exchange loss on borrowings was HK$127 million Details of Finance Costs (for the six months ended June 30) | Item | 2025 (HK$ million) | 2024 (HK$ million) | | :--- | :--- | :--- | | Interest on Bank Loans | 300 | 299 | | Interest on Fixed Rate Notes | 267 | 286 | | Estimated Interest on Amounts Payable to Non-controlling Interests | 23 | 23 | | **Total Interest Expense** | **590** | **608** | | Other Finance Costs | 30 | 22 | | Less: Amount Capitalized | (367) | (395) | | Net Exchange Loss (Gain) on Borrowings | 127 | (20) | | Net Income Transferred from Hedging Reserve for Financial Instruments Designated as Cash Flow Hedges | (91) | (3) | | Medium Term Note Programme Fees | – | 1 | | **Total Finance Costs** | **289** | **213** | - Interest on investment properties under development was capitalized at an average annual rate of **3.4%** (2024: 4.0%)[102](index=102&type=chunk) [6. Taxation](index=35&type=section&id=6.%20Taxation) For the six months ended June 30, 2025, total taxation for the period was HK$155 million, a slight decrease from HK$158 million in the prior period. Hong Kong profits tax was HK$127 million, and deferred tax was HK$28 million. Hong Kong profits tax is calculated at a rate of 16.5% Taxation for the Period (for the six months ended June 30) | Item | 2025 (HK$ million) | 2024 (HK$ million) | | :--- | :--- | :--- | | Hong Kong Profits Tax | 127 | 121 | | Deferred Tax | 28 | 37 | | **Total Taxation for the Period** | **155** | **158** | - Hong Kong profits tax is calculated at a rate of **16.5%** on the estimated assessable profit for the period[103](index=103&type=chunk) [7. Profit for the Period](index=35&type=section&id=7.%20Profit%20for%20the%20Period) For the six months ended June 30, 2025, profit for the period was stated after deducting depreciation of property, plant and equipment of HK$22 million and including gross rental income from investment properties of HK$1,514 million. Interest income was HK$92 million, and staff costs were HK$164 million Profit for the Period Deductions/Inclusions (for the six months ended June 30) | Item | 2025 (HK$ million) | 2024 (HK$ million) | | :--- | :--- | :--- | | Depreciation of Property, Plant and Equipment | 22 | 17 | | Gross Rental Income from Investment Properties | (1,514) | (1,486) | | Interest Income | (92) | (95) | | Staff Costs (including Directors' Emoluments) | 164 | 164 | | Taxation of Associates | 52 | 51 | [8. Earnings Per Share](index=36&type=section&id=8.%20Earnings%20Per%20Share) For the six months ended June 30, 2025, profit attributable to owners of the company was HK$75 million, resulting in both basic and diluted earnings per share of 7 HK cents, a significant decrease from 42 HK cents in the prior period. The weighted average number of ordinary shares used for calculating earnings per share was 1,027,008,223 shares Earnings Per Share Calculation (for the six months ended June 30) | Indicator | 2025 (HK$ million) | 2024 (HK$ million) | | :--- | :--- | :--- | | Profit Attributable to Owners of the Company | 75 | 427 | | Weighted Average Number of Ordinary Shares for Basic EPS | 1,027,008,223 | 1,027,008,223 | | Basic Earnings Per Share (HK cents) | 7 | 42 | | Diluted Earnings Per Share (HK cents) | 7 | 42 | - Both basic and diluted earnings per share were **7 HK cents**, a significant decrease from **42 HK cents** in the prior period[105](index=105&type=chunk)[107](index=107&type=chunk) [9. Dividends](index=37&type=section&id=9.%20Dividends) For the six months ended June 30, 2025, the second interim dividend for 2024 of 81 HK cents per share, totaling HK$832 million, was recognized. The Board declared a first interim dividend of 27 HK cents per share, totaling HK$277 million, which will be paid after the reporting period and thus not recognized as a liability Dividends Recognized (for the six months ended June 30) | Dividend Type | 2025 (HK$ million) | 2024 (HK$ million) | | :--- | :--- | :--- | | Second Interim Dividend for 2024 Paid – 81 HK cents per share | 832 | – | | Second Interim Dividend for 2023 Paid – 81 HK cents per share | – | 832 | | **Total** | **832** | **832** | - The Board declared a first interim dividend of **27 HK cents per share** (2024: 27 HK cents per share), totaling **HK$277 million**, to be paid after the reporting period[109](index=109&type=chunk) [10. Investment Properties](index=37&type=section&id=10.%20Investment%20Properties) As at June 30, 2025, the fair value of investment properties was HK$96,893 million, a slight increase from the beginning of the year. Additions during the period amounted to HK$1,217 million, but a fair value change loss of HK$964 million was recognized in the profit or loss. All investment properties were revalued by independent professional valuers at market value, using valuation methods including the income capitalization approach and residual method Fair Value Changes of Investment Properties | Item | HK$ million | | :--- | :--- | | As at January 1, 2025 | 96,547 | | Additions | 1,217 | | Transferred to Property, Plant and Equipment, net | (26) | | Fair Value Changes Recognized in Profit or Loss – Unrealized | (964) | | Exchange Differences | 119 | | As at June 30, 2025 | 96,893 | - The fair value of investment properties was revalued by independent professional valuer Knight Frank Petty Limited at open market value[111](index=111&type=chunk) - Completed investment properties in Hong Kong are valued using the income capitalization approach, while properties under development use the residual method. Investment properties in mainland China are valued using discounted cash flow analysis[113](index=113&type=chunk)[114](index=114&type=chunk) - As at June 30, 2025, the total fair value of investment properties pledged as security for the Group's borrowings was **HK$21,190 million**[113](index=113&type=chunk) [11. Trade and Other Receivables](index=39&type=section&id=11.%20Trade%20and%20Other%20Receivables) As at June 30, 2025, total trade and other receivables amounted to HK$1,699 million, a slight increase from HK$1,690 million as at December 31, 2024. Of this, prepayments for investment properties were HK$1,014 million. Trade receivables primarily consist of rent, with most being less than 30 days old based on aging analysis Trade and Other Receivables (as at June 30, 2025) | Item | 2025 (HK$ million) | 2024 (HK$ million) | | :--- | :--- | :--- | | Trade Receivables | 51 | 51 | | Interest Receivables | 43 | 43 | | Prepayments for Investment Properties | 1,014 | 943 | | Other Receivables and Prepayments | 591 | 653 | | **Total** | **1,699** | **1,690** | | Current Assets | 314 | 375 | | Non-current Assets | 1,385 | 1,315 | Aging Analysis of Trade Receivables (as at June 30, 2025) | Aging | 2025 (HK$ million) | 2024 (HK$ million) | | :--- | :--- | :--- | | Less than 30 days | 25 | 23 | | 31–90 days | 13 | 14 | | Over 90 days | 13 | 14 | | **Total** | **51** | **51** | [12. Trade and Other Payables](index=40&type=section&id=12.%20Trade%20and%20Other%20Payables) As at June 30, 2025, total trade and other payables amounted to HK$1,070 million, a decrease from HK$1,428 million as at December 31, 2024. Of this, trade payables were HK$254 million, and interest payables were HK$57 million. Most trade payables were aged less than 90 days Trade and Other Payables (as at June 30, 2025) | Item | 2025 (HK$ million) | 2024 (HK$ million) | | :--- | :--- | :--- | | Trade Payables | 254 | 534 | | Interest Payables | 57 | 146 | | Other Payables | 759 | 748 | | **Total** | **1,070** | **1,428** | - As at June 30, 2025, the carrying amount of the Group's trade payables was **HK$157 million**, all aged less than 90 days[117](index=117&type=chunk) [13. Amounts Due to Non-controlling Interests](index=40&type=section&id=13.%20Amounts%20Due%20to%20Non-controlling%20Interests) As at June 30, 2025, total amounts due to non-controlling interests were HK$6,009 million, of which HK$192 million were current liabilities and HK$5,817 million were non-current liabilities. These amounts are unsecured, interest-free, and partly used for the development of commercial land at Caroline Hill Road, Causeway Bay, Hong Kong Amounts Due to Non-controlling Interests (as at June 30, 2025) | Item | 2025 (HK$ million) | 2024 (HK$ million) | | :--- | :--- | :--- | | Current Liabilities | 192 | 189 | | Non-current Liabilities | 5,817 | 5,686 | | **Total** | **6,009** | **5,875** | - The amounts are unsecured, interest-free, with the current portion repayable on demand, and the non-current portion used for the development of commercial land at Caroline Hill Road, Causeway Bay, Hong Kong[118](index=118&type=chunk)[119](index=119&type=chunk) [14. Borrowings](index=41&type=section&id=14.%20Borrowings) As at June 30, 2025, the total carrying amount of the Group's borrowings was HK$28,641 million (current HK$1,444 million, non-current HK$27,197 million), an increase from HK$26,514 million as at December 31, 2024. Non-current borrowings primarily consist of secured bank loans and unsecured fixed-rate notes Analysis of Carrying Amount of Borrowings (as at June 30, 2025) | Borrowing Type | Current (HK$ million) | Non-current (HK$ million) | Total (HK$ million) | | :--- | :--- | :--- | :--- | | Secured Bank Loans | – | 9,899 | 9,899 | | Unsecured Bank Loans | 151 | 4,130 | 4,281 | | Unsecured Fixed Rate Notes | 1,293 | 13,168 | 14,461 | | **Total** | **1,444** | **27,197** | **28,641** | - As at June 30, 2025, total borrowings amounted to **HK$28,641 million**, an increase from **HK$26,514 million** as at December 31, 2024[59](index=59&type=chunk)[120](index=120&type=chunk) [15. Perpetual Capital Securities](index=41&type=section&id=15.%20Perpetual%20Capital%20Securities) In 2025, the Group issued US$750 million (approximately HK$5,800 million) of 7.20% subordinated guaranteed perpetual capital securities for general corporate purposes and refinancing existing debt. During the period, the company repurchased HK$5,363 million principal amount of subordinated guaranteed perpetual capital securities for a cash consideration of HK$5,365 million. These securities have no maturity date, allow for discretionary deferral of distributions, and are classified as equity in the consolidated financial statements - In 2025, the Group issued **US$750 million** (approximately **HK$5,800 million**) of **7.20%** subordinated guaranteed perpetual capital securities for general corporate purposes and refinancing existing debt[121](index=121&type=chunk) - During the period, the Group repurchased **HK$5,363 million** principal amount of subordinated guaranteed perpetual capital securities for a cash consideration of **HK$5,365 million** (2024: HK$777 million)[122](index=122&type=chunk) - Perpetual capital securities have no maturity date, allow for discretionary deferral of distributions by the issuer, and are classified as equity in the consolidated financial statements[121](index=121&type=chunk)[122](index=122&type=chunk) [16. Commitments](index=42&type=section&id=16.%20Commitments) As at June 30, 2025, the Group's capital commitments contracted but not provided for in respect of its investment properties, property, plant and equipment amounted to HK$4,357 million, an increase from HK$3,974 million as at December 31, 2024 Capital Commitments (as at June 30, 2025) | Item | 2025 (HK$ million) | 2024 (HK$ million) | | :--- | :--- | :--- | | Contracted but not provided for in respect of investment properties and property, plant and equipment | 4,357 | 3,974 | [17. Related Party Transactions and Balances](index=42&type=section&id=17.%20Related%20Party%20Transactions%20and%20Balances) The Group period with related parties, including estimated interest expense on interest-free loans from non-controlling interests, interest income from loans to joint ventures, and rental income and payables with related companies controlled by directors, non-controlling shareholders of subsidiaries, and joint ventures/associates. Total key management personnel remuneration was HK$27 million - Interest income from loans to joint ventures during the period was **HK$23 million** (2024: HK$18 million)[124](index=124&type=chunk) Transactions and Balances with Related Parties (as at June 30) | Related Party | Total Rental Income (2025, HK$ million) | Total Rental Income (2024, HK$ million) | Amounts Payable to Non-controlling Interests (June 30, 2025, HK$ million) | Amounts Payable to Non-controlling Interests (Dec 31, 2024, HK$ million) | | :--- | :--- | :--- | :--- | :--- | | Related companies controlled by directors | – | 18 | – | – | | Non-controlling shareholders of subsidiaries | 41 | 14 | 6,009 | 5,875 | | Joint ventures and associates | 47 | 37 | – | – | Key Management Personnel Remuneration (for the six months ended June 30) | Item | 2025 (HK$ million) | 2024 (HK$ million) | | :--- | :--- | :--- | | Directors' Fees, Salaries and Other Short-term Employee Benefits | 26 | 26 | | Share-based Payments | 1 | 1 | | Contributions to Retirement Benefit Schemes | – | – | | **Total** | **27** | **27** | [18. Financial Risk Management and Fair Value Measurement](index=44&type=section&id=18.%20Financial%20Risk%20Management%20and%20Fair%20Value%20Measurement) The Group's financial risk management objectives and policies are consistent with the prior year. This section detailed the fair value measurement of financial assets and liabilities, including non-recurring and recurring financial instruments measured at fair value, classified into Level 1 to Level 3. The fair value of unsecured fixed-rate notes was lower than their carrying amount. Recurring financial assets measured at fair value primarily include unlisted equity investments, while financial liabilities mainly comprise cross-currency swaps and interest rate swaps - The Group's financial risk management objectives and policies are consistent with those disclosed in the Group's consolidated financial statements for the year ended December 31, 2024[128](index=128&type=chunk) - The carrying amount of unsecured fixed-rate notes was **HK$14,461 million**, with a fair value of **HK$13,489 million**[129](index=129&type=chunk) Recurring Financial Instruments Measured at Fair Value (as at June 30, 2025) | Item | Level 1 (HK$ million) | Level 2 (HK$ million) | Level 3 (HK$ million) | Total (HK$ million) | | :--- | :--- | :--- | :--- | :--- | | **Financial Assets** | | | | | | Unlisted Club Debentures | – | 1 | – | 1 | | Fund Investments | – | – | 87 | 87 | | Unlisted Equity Investments | – | – | 1,495 | 1,495 | | Cross-currency Swaps | – | 23 | – | 23 | | **Total Financial Assets** | **–** | **24** | **1,582** | **1,606** | | **Financial Liabilities** | | | | | | Cross-currency Swaps | – | 523 | – | 523 | | Interest Rate Swaps | – | 34 | – | 34 | | **Total Financial Liabilities** | **–** | **557** | **–** | **557** | - Financial assets at fair value Level 3 primarily consist of fund investments and unlisted equity investments, valued using discounted cash flow or market approaches[139](index=139&type=chunk) Corporate Governance [Compliance with the Corporate Governance Code](index=48&type=section&id=Compliance%20with%20the%20Corporate%20Governance%20Code) Hysan Development is committed to upholding high-quality corporate governance and fully complied with the code provisions set out in Part 2 of Appendix C1 "Corporate Governance Code" of the Rules Governing the Listing of Securities on The Stock Exchange of H

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之內容概不負責，對其 準確性或完整性亦不發表任何聲明，並明確表示，概不對因本公告全部或任何部分內容 而產生或因倚賴該等內容而引致之任何損失承擔任何責任。 NEW CHINA LIFE INSURANCE COMPANY LTD. 01336 截至2025年6月30日止六個月的未經審計中期業績公告 新華人壽保險股份有限公司（「本公司」）董事會謹此宣佈本公司及附屬公司截至2025年6月 30日止6個月的未經審計業績公告。本公告刊載本公司2025年中期報告全文，並符合香 港聯合交易所有限公司（「香港聯交所」）證券上市規則中有關中期業績初步公告附載的資 料之要求。 本業績公告的中英文版本可在本公司網站(www.newchinalife.com)和香港聯交所網站 (www.hkexnews.hk)查閱。本公司2025年中期報告亦將於9月上旬刊發於上述本公司網站 及香港聯交所網站，並寄發予已表示希望收取本公司通訊之印刷版的本公司H股股東。 承董事會命 新華人壽保險股份有限公司 楊玉成 董事長 中國北京，2025年8月28日 於本公告日期，本公司董事長、執行董事為楊玉 ...

INTERIM REPORT 2025 中期報告 2025 公司資料 執行董事 鄭立育先生 （主席兼執行長） 邱輝欽先生 （戰略長） 黃國光先生 林豐杰先生 （於二零二五年五月二十八日退任） 徐容國先生 （財務總監） 王挺進先生 （於二零二五年六月十一日獲委任） 非執行董事 鄭立彥先生 獨立非執行董事 程嘉君先生 （於二零二五年五月二十八日退任） 葉偉明先生 袁志豪先生 莊淑惠博士 授權代表 鄭立育先生 徐容國先生 公司秘書 張勵研女士 審核委員會 袁志豪先生 （主席） 程嘉君先生 （於二零二五年五月二十八日退任） 葉偉明先生 莊淑惠博士 企業管治委員會 葉偉明先生 （主席） 鄭立育先生 黃國光先生 程嘉君先生 （於二零二五年五月二十八日退任） 袁志豪先生 莊淑惠博士 香港法律之法律顧問 趙不渝馬國強律師事務所 核數師 安永會計師事務所 註冊公眾利益實體核數師 薪酬委員會 袁志豪先生 （主席） 程嘉君先生 （於二零二五年五月二十八日退任） 鄭立育先生 黃國光先生 葉偉明先生 莊淑惠博士 提名委員會 鄭立育先生 （主席） 黃國光先生 程嘉君先生 （於二零二五年五月二十八日退任） 葉偉明先生 袁志豪先生 莊淑惠博 ...

[Summary](index=1&type=section&id=%E6%91%98%E8%A6%81) For the six months ended June 30, 2025, Starry Joy Health & Travel Co., Ltd. experienced year-on-year declines in revenue, gross profit, and net profit, with revenue decreasing by **12.7%** to **RMB 610.9 million**, gross margin falling by **3.7 percentage points** to **27.5%**, and core net profit decreasing by **41.2%** to **RMB 49.0 million** Key Financial Highlights | Metric | 2025 H1 (RMB million) | 2024 H1 (RMB million) | YoY Change (RMB million) | YoY Change (%) | | :--- | :--- | :--- | :--- | :--- | | Revenue | 610.9 | 700.0 | (89.1) | (12.7%) | | Gross Profit | 168.3 | 218.7 | (50.4) | (23.0%) | | Gross Margin | 27.5% | 31.2% | -3.7 percentage points | - | | Net Profit | 21.1 | 75.1 | (54.0) | (71.9%) | | Core Net Profit | 49.0 | 83.3 | (34.3) | (41.2%) | [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) This section presents the condensed consolidated statement of profit or loss and other comprehensive income for the six months ended June 30, 2025, and the condensed consolidated statement of financial position as of June 30, 2025, comparing with prior period and year-end data to reflect the company's operating results and financial health during the reporting period [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%E5%85%A8%E9%9D%A2%E6%94%B6%E7%9B%8A%E8%A1%A8) For the six months ended June 30, 2025, the company's revenue was RMB 610,880 thousand, gross profit was RMB 168,261 thousand, and profit for the period was RMB 21,083 thousand, all showing significant declines compared to the same period last year | Metric | June 30, 2025 (RMB thousand) | June 30, 2024 (RMB thousand) | | :--- | :--- | :--- | | Revenue | 610,880 | 700,045 | | Cost of Services | (442,619) | (481,332) | | Gross Profit | 168,261 | 218,713 | | Other Income, Gains and Losses | 943 | 10,121 | | Impairment Loss under Expected Credit Loss Model | (73,761) | (81,758) | | Goodwill Impairment Loss | (13,976) | – | | Administrative Expenses | (39,219) | (42,519) | | Selling and Distribution Expenses | (2,906) | (1,662) | | Finance Costs | (2,332) | (2,789) | | Profit Before Tax | 35,007 | 100,106 | | Income Tax Expense | (13,924) | (25,007) | | Profit for the Period | 21,083 | 75,099 | | Profit Attributable to Owners of the Company | 24,997 | 81,648 | | Basic and Diluted EPS (RMB cents) | 3.44 | 11.24 | [Condensed Consolidated Statement of Financial Position](index=4&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, the company's total assets were RMB 2,285,300 thousand, total liabilities were RMB 1,038,341 thousand, and net assets were RMB 1,246,996 thousand, showing a slight decrease in total assets, a reduction in total liabilities, and a slight increase in net assets compared to December 31, 2024 | Metric | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | **Non-current Assets** | | | | Property, Plant and Equipment | 60,147 | 29,275 | | Right-of-Use Assets | 8,816 | 10,771 | | Investment Properties | 51,893 | – | | Intangible Assets | 49,111 | 53,767 | | Goodwill | 87,587 | 101,563 | | Deferred Tax Assets | 61,296 | 58,115 | | **Current Assets** | | | | Trade and Other Receivables | 675,810 | 646,200 | | Bank Balances and Cash | 936,366 | 1,030,167 | | **Current Liabilities** | | | | Trade and Other Payables | 723,076 | 795,462 | | Borrowings | 62,000 | 70,000 | | **Non-current Liabilities** | | | | Deferred Tax Liabilities | 12,278 | 13,442 | | Lease Liabilities | 25,881 | 7,745 | | **Total Equity** | | | | Equity Attributable to Owners of the Company | 1,210,059 | 1,202,889 | | Non-controlling Interests | 36,937 | 41,786 | | Total Equity | 1,246,996 | 1,244,675 | [Notes to the Condensed Consolidated Financial Statements](index=6&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) This section details the basis of preparation and significant accounting policies for the condensed consolidated financial statements, classifying and analyzing key financial items such as revenue, other income, income tax expense, profit for the period, dividends, earnings per share, trade and other receivables, and trade and other payables [1. Basis of Preparation and Business Combinations](index=6&type=section&id=1.%20Basis%20of%20Preparation%20and%20Business%20Combinations) The condensed consolidated financial statements are prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting" and Appendix 16 of the Hong Kong Stock Exchange Listing Rules, and should be read in conjunction with the 2024 annual financial report - Financial statements are prepared in accordance with International Accounting Standard **34** and Appendix **16** of the Hong Kong Stock Exchange Listing Rules, and are recommended to be read in conjunction with the **2024** annual financial report[11](index=11&type=chunk) [2. Significant Accounting Policies](index=6&type=section&id=2.%20Significant%20Accounting%20Policies) The condensed consolidated financial statements are prepared on a historical cost basis, with certain financial instruments measured at fair value, and the application of new and revised IFRS accounting standards in the current period had no significant impact on financial position or performance, with no early adoption of standards not yet effective - Financial statements are prepared on a historical cost basis, with certain financial instruments measured at fair value, and the application of new accounting standards in the current period had **no significant impact** on financial position[12](index=12&type=chunk) - The company has **not early adopted** new and revised International Financial Reporting Standards that have been issued but are not yet effective[13](index=13&type=chunk) [3. Revenue](index=7&type=section&id=3.%20Revenue) For the six months ended June 30, 2025, total revenue was RMB 610,880 thousand, a decrease from RMB 700,045 thousand in the prior period, with property management services remaining the primary revenue source, though both its revenue and commercial operation services revenue declined Revenue by Category | Revenue Category | June 30, 2025 (RMB thousand) | June 30, 2024 (RMB thousand) | | :--- | :--- | :--- | | Property Management Services | 537,435 | 619,456 | | Commercial Operation Services | 65,985 | 80,589 | | Property Leasing and Related Services | 7,460 | – | | **Total** | **610,880** | **700,045** | Revenue from Customer Contracts (June 30, 2025) | Customer Type | Property Management Services (RMB thousand) | Commercial Operation Services (RMB thousand) | | :--- | :--- | :--- | | External Customers | 537,435 | 65,985 | | Group Companies of Former Major Shareholder | – | – | | Other Related Parties | – | – | | **Total** | **537,435** | **65,985** | Revenue Recognition Timing (June 30, 2025) | Recognition Method | Amount (RMB thousand) | | :--- | :--- | | Over time | 586,861 | | At a point in time | 16,559 | | **Total** | **603,420** | Segment Revenue and Results (June 30, 2025) | Segment | Revenue (RMB thousand) | Results (RMB thousand) | | :--- | :--- | :--- | | Property Management Services | 537,435 | 42,312 | | Commercial Operation Services | 65,985 | 23,251 | | Property Leasing and Related Services | 7,460 | 1,235 | | **Total** | **610,880** | **66,798** | Segment Revenue and Results (June 30, 2024) | Segment | Revenue (RMB thousand) | Results (RMB thousand) | | :--- | :--- | :--- | | Property Management Services | 619,456 | 86,773 | | Commercial Operation Services | 80,589 | 31,990 | | Property Leasing and Related Services | – | – | | **Total** | **700,045** | **118,763** | [5. Other Income, Gains and Losses](index=9&type=section&id=5.%20Other%20Income%2C%20Gains%20and%20Losses) For the six months ended June 30, 2025, net other income, gains, and losses were RMB 943 thousand, a significant decrease from RMB 10,121 thousand in the prior period, primarily due to net exchange losses and fair value changes of equity instruments at fair value through profit or loss | Item | June 30, 2025 (RMB thousand) | June 30, 2024 (RMB thousand) | | :--- | :--- | :--- | | Bank Interest Income | 7,857 | 11,668 | | Net Exchange (Losses) / Gains | (6,784) | 1,878 | | Government Grants | 4,236 | 6,593 | | Fair Value Change of Investment Properties | – | (1,920) | | Gains / (Losses) on Disposal of Property, Plant and Equipment | 96 | (1,873) | | Dividend Income from Equity Investments | – | 871 | | Fair Value Change of Equity Instruments at Fair Value Through Profit or Loss | (5,233) | (7,096) | | Others | 771 | – | | **Total** | **943** | **10,121** | [6. Income Tax Expense](index=9&type=section&id=6.%20Income%20Tax%20Expense) For the six months ended June 30, 2025, income tax expense was RMB 13,924 thousand, a decrease from RMB 25,007 thousand in the prior period, with some Chinese subsidiaries benefiting from preferential income tax policies due to their qualification as small low-profit enterprises or national high-tech enterprises | Item | June 30, 2025 (RMB thousand) | June 30, 2024 (RMB thousand) | | :--- | :--- | :--- | | Current Tax: China Corporate Income Tax | 18,269 | 30,931 | | Deferred Tax | (4,345) | (5,924) | | **Total** | **13,924** | **25,007** | - Some Chinese subsidiaries enjoy preferential income tax policies for **small low-profit enterprises**[20](index=20&type=chunk) - Aoyuan Smart Life Service (Guangzhou) Group Co., Ltd. and Leshenghuo Smart Community Service Group Co., Ltd. obtained "National High-tech Enterprise" certificates, enjoying a preferential income tax rate of **15%**[21](index=21&type=chunk) [7. Profit for the Period](index=10&type=section&id=7.%20Profit%20for%20the%20Period) Profit for the period is derived after deducting various expenses, including depreciation, amortization, and staff costs, with staff costs for the six months ended June 30, 2025, amounting to RMB 111,069 thousand, a decrease from the prior period | Item | June 30, 2025 (RMB thousand) | June 30, 2024 (RMB thousand) | | :--- | :--- | :--- | | Amortization of Deferred Contract Costs | – | 268 | | Depreciation of Property, Plant and Equipment | 4,449 | 3,804 | | Depreciation of Right-of-Use Assets | 2,099 | 1,130 | | Depreciation of Investment Properties | 6,475 | – | | Amortization of Intangible Assets | 4,656 | 4,705 | | Staff Costs | 111,069 | 116,447 | [8. Dividends](index=10&type=section&id=8.%20Dividends) The company's directors do not recommend declaring any interim dividend for the six months ended June 30, 2025, while the final dividend for 2024 was paid on June 20, 2025 - The directors do **not recommend** declaring any interim dividend for the six months ended June 30, 2025[25](index=25&type=chunk) - The final dividend of **RMB 0.0265** per ordinary share (totaling **RMB 19,246,000**) for the year ended December 31, 2024, was paid on **June 20, 2025**[25](index=25&type=chunk) [9. Earnings Per Share](index=10&type=section&id=9.%20Earnings%20Per%20Share) For the six months ended June 30, 2025, basic and diluted earnings per share were RMB 3.44 cents, a significant decrease from RMB 11.24 cents in the prior period, with the weighted average number of ordinary shares used for calculation remaining unchanged | Metric | June 30, 2025 (RMB thousand) | June 30, 2024 (RMB thousand) | | :--- | :--- | :--- | | Profit for calculating basic and diluted EPS | 24,997 | 81,648 | | Weighted average number of ordinary shares | 726,250,000 | 726,250,000 | | Basic and Diluted EPS (RMB cents) | 3.44 | 11.24 | - No exercise of share options was assumed in calculating diluted earnings per share, as the exercise price was **higher than the average market price** of the company's shares[27](index=27&type=chunk) [10. Trade and Other Receivables](index=11&type=section&id=10.%20Trade%20and%20Other%20Receivables) As of June 30, 2025, total trade and other receivables amounted to RMB 675,810 thousand, an increase of 4.6% from December 31, 2024, with the aging analysis of trade receivables showing an increase in amounts over 3 years Trade and Other Receivables Summary | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Total Trade Receivables | 510,378 | 483,350 | | Total Other Receivables | 165,432 | 162,850 | | **Total Trade and Other Receivables** | **675,810** | **646,200** | Aging Analysis of Trade Receivables (based on invoice date) | Aging | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | 0 to 60 days | 78,935 | 86,439 | | 61 to 180 days | 124,324 | 112,951 | | 181 to 365 days | 121,653 | 131,439 | | 1 to 2 years | 222,580 | 229,823 | | 2 to 3 years | 179,790 | 140,140 | | Over 3 years | 251,650 | 176,752 | | **Total** | **978,932** | **877,544** | - Property management and commercial operation services revenue are typically settled within **60 days** from the invoice date[30](index=30&type=chunk) - Credit terms for property leasing services range from **30 to 90 days**[31](index=31&type=chunk) [11. Trade and Other Payables](index=12&type=section&id=11.%20Trade%20and%20Other%20Payables) As of June 30, 2025, total trade and other payables were RMB 723,076 thousand, a decrease of 9.1% from December 31, 2024, with other amounts payable to the former major shareholder's group companies significantly reduced Trade and Other Payables Summary | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Trade Payables | 291,676 | 293,507 | | Total Other Payables | 431,400 | 501,955 | | **Total Trade and Other Payables** | **723,076** | **795,462** | Aging Analysis of Trade Payables (based on invoice date) | Aging | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | 0 to 60 days | 59,991 | 64,022 | | 61 to 180 days | 74,985 | 72,475 | | 181 to 365 days | 41,529 | 37,790 | | 1 to 2 years | 40,292 | 57,825 | | 2 to 3 years | 27,341 | 20,200 | | Over 3 years | 47,538 | 41,195 | | **Total** | **291,676** | **293,507** | - Other amounts payable to the former major shareholder's group companies decreased from **RMB 113,144 thousand** to **RMB 63,841 thousand**, primarily representing rent collected by the former major shareholder's group companies[34](index=34&type=chunk)[37](index=37&type=chunk) [Management Discussion and Analysis](index=14&type=section&id=%E7%AE%A1%E7%90%86%E5%B1%A4%E8%A8%8E%E8%AB%96%E5%8F%8A%E5%88%86%E6%9E%90) This section reviews the company's business performance in property management and commercial operations, outlines future development strategies, and provides a detailed analysis of the financial position during the reporting period, including revenue, costs, gross profit, various expenses, and changes in assets and liabilities [I. Business Review](index=14&type=section&id=I.%20Business%20Review) As a property management and commercial operation service provider, the company actively adjusted its development strategy in the first half of the year, focusing on refined operations, cost optimization, and innovative revenue channel expansion, while exploring new businesses like cultural tourism and elder care, and enhancing customer relationships and service quality - The company implemented a diversified service strategy to meet customer needs and actively adjusted its development strategy to seek **sustainable operating solutions**[41](index=41&type=chunk) - While solidifying its core property management and commercial operation businesses, the company actively expanded into new ventures such as **cultural tourism and elder care**, seizing opportunities for development potential[41](index=41&type=chunk) [Property Management](index=14&type=section&id=%E7%89%A9%E6%A5%AD%E7%AE%A1%E7%90%86) In the first half, property management focused on "efficiency improvement and value creation" through refined operations, cost control, and innovative business pilots, enhancing internal resource utilization and expanding growth boundaries, with services covering 213 properties across 22 provinces and 62 cities in China, managing approximately 33.9 million square meters - The company fully implemented the "efficiency improvement and value creation" operating strategy, enhancing operational efficiency and profitability through **optimizing business processes, structural cost reduction, and market insights**[42](index=42&type=chunk) - As of June 30, 2025, property management services covered **213 properties** across **22 provinces** and **62 cities** in China, with a managed GFA of approximately **33.9 million square meters**[43](index=43&type=chunk) - Through the application of smart technologies, such as parking lot upgrades and equipment energy-saving renovations, the company enhanced operational efficiency and service convenience, reducing public facility operating costs[50](index=50&type=chunk) [Commercial Operations](index=17&type=section&id=%E5%95%86%E6%A5%AD%E9%81%8B%E7%91%9F) As of June 30, 2025, the commercial operations service network covered 15 shopping malls and office building projects in 10 cities nationwide, managing a total GFA of approximately 549,000 square meters, with the company deepening its "delivering warm life" service philosophy, providing integrated full-lifecycle services, and enhancing project vitality and operational effectiveness through industry collaboration and business format innovation - As of June 30, 2025, the commercial operations service network covered **15 shopping malls and office building projects** in **10 cities** nationwide, with a total managed GFA of approximately **549,000 square meters**[53](index=53&type=chunk) - The company established an integrated service system covering "early-stage planning, commercial design, technical consulting, tenant attraction, opening preparation, and asset operation" to meet the full lifecycle development needs of commercial real estate[53](index=53&type=chunk) - By leveraging internal and external group resources and deepening the membership system and offline traffic, the company strengthened the synergistic effect between commercial operations and property management, enhancing customer stickiness and conversion efficiency[54](index=54&type=chunk) [II. Future Outlook](index=18&type=section&id=II.%20Future%20Outlook) The company will deepen its "solidifying foundation, steady and far-reaching" development approach, enhancing decision-making efficiency through flattened organizational structure and agile management processes, while adhering to a prudent financial management strategy, actively deploying in new sectors like cultural tourism and the silver economy, and driving sustainable growth through technological and model innovation - The company will deepen its "solidifying foundation, steady and far-reaching" development approach, enhancing decision-making penetration and execution responsiveness through **flattened organizational structure and agile management processes**[59](index=59&type=chunk) - Adhering to a prudent and cautious financial management strategy, the company will optimize its profit structure through **refined cost control and diversified revenue channel expansion**[60](index=60&type=chunk) - Actively deploying in promising new sectors such as **cultural tourism and the silver economy**, the company aims to solidify new drivers for overall profit growth[60](index=60&type=chunk) [Property Management](index=19&type=section&id=%E7%89%A9%E6%A5%AD%E7%AE%A1%E7%90%86) Property management will explore applying AI and big data to build a "smart property management laboratory" and an integrated smart service system, while systematically developing three core community cultural IPs: "elderly care," "growth education," and "community spirit," and promoting a "new brand, new service, new quality" plan to enhance service quality and community belonging - Actively exploring the application of cutting-edge technologies such as **artificial intelligence (AI) and big data**, the company focuses on cultivating new productive forces to drive service level enhancement and high-quality development[62](index=62&type=chunk) - Plans include advancing the construction of a "smart property management laboratory" to build an integrated smart service system, leveraging technology to deepen real-time monitoring capabilities for service quality[62](index=62&type=chunk) - Systematically developing three core community cultural intellectual properties: deepening the "elderly care IP," creating the "growth education IP," and innovating the "community spirit IP"[63](index=63&type=chunk) [Commercial Operations](index=21&type=section&id=%E5%95%86%E6%A5%AD%E9%81%8B%E7%91%9F) Commercial operations will focus on cash flow and profit targets, deepening investment in tenant attraction and value extraction, carefully selecting quality brands, and driving consumption scene upgrades with creative marketing activities, while actively exploring "commercial+" integration models, promoting multi-format collaborative innovation, revitalizing existing resources, and building a sustainable development system - Focusing on **cash flow and profit targets**, the company will deepen investment in tenant attraction and value extraction, carefully selecting quality brands to build a diversified commercial ecosystem[71](index=71&type=chunk) - Leveraging creative marketing activities, the company will drive continuous iteration and upgrade of consumption scenarios, comprehensively optimizing circulation layouts, visual ambiance, and service experiences[71](index=71&type=chunk) - Actively exploring the "commercial+" integration model, the company will promote multi-format collaborative innovation in suitable regions, leveraging complementary advantages to revitalize existing resources[71](index=71&type=chunk) [Cultural Tourism and Elder Care](index=21&type=section&id=%E6%96%87%E6%97%85%E5%BA%B7%E9%A4%8A) While strengthening core businesses, the company will strategically deploy in cultural tourism and elder care, leveraging advantageous resources and market demand, focusing on a multi-element integration path of "cultural tourism + elder care + sports," and actively integrating innovative drivers (such as low-altitude economy application scenarios) to create attractive comprehensive service destinations - While solidifying core businesses, the company will strategically deploy in **cultural tourism and elder care**, leveraging advantageous resources and market demand, focusing on a multi-element integration path of "cultural tourism + elder care + sports"[72](index=72&type=chunk) - Actively integrating innovative drivers (such as **low-altitude economy application scenarios**) and distinctive engines, the company aims to create attractive comprehensive service destinations[72](index=72&type=chunk) - Highlighting strategic opportunities from new productive forces, the company focuses on cutting-edge areas such as **smart property management, new commercial ecosystems, and elder care tourism**, accelerating its presence in emerging market segments through technological and model innovation[72](index=72&type=chunk) [III. Financial Review](index=22&type=section&id=III.%20Financial%20Review) This section provides a detailed review of the company's operating results and financial position for the six months ended June 30, 2025, with total revenue decreasing by 12.7%, gross profit by 23.0%, and net profit by 71.9%, primarily due to strategic adjustments, proactive exit from low-profit and high-risk projects, and increased resource allocation to managed projects - For the six months ended June 30, 2025, the Group's total revenue was approximately **RMB 610.9 million**, a year-on-year decrease of approximately **12.7%**[74](index=74&type=chunk) - Gross profit was approximately **RMB 168.3 million**, a year-on-year decrease of approximately **23.0%**, with a gross margin of approximately **27.5%**, a year-on-year decrease of approximately **3.7 percentage points**[86](index=86&type=chunk) - Net profit was approximately **RMB 21.1 million**, a year-on-year decrease of approximately **71.9%**[93](index=93&type=chunk) [Operating Results](index=22&type=section&id=%E7%B6%93%E7%87%9F%E6%A5%AD%E7%B8%BE) For the six months ended June 30, 2025, the company's total revenue was RMB 610.9 million, a year-on-year decrease of 12.7%, with both property management services and commercial operation services revenue declining Revenue by Service Category | Service Category | 2025 (RMB thousand) | 2025 (%) | 2024 (RMB thousand) | 2024 (%) | Increase/Decrease (RMB thousand) | Growth Rate (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Property Management Services | 537,435 | 88.0 | 619,456 | 88.5 | (82,021) | (13.2) | | Commercial Operation Services | 73,445 | 12.0 | 80,589 | 11.5 | (7,144) | (8.9) | | **Total** | **610,880** | **100.0** | **700,045** | **100.0** | **(89,165)** | **(12.7)** | [Property Management Services](index=22&type=section&id=%E7%89%A9%E6%A5%AD%E7%AE%A1%E7%90%86%E6%9C%8D%E5%8B%99) Property management services revenue decreased by 13.2% to RMB 537.4 million, primarily due to the company's strategic adjustments, proactively exiting low-profit and high-risk projects, leading to a reduction in managed area Property Management Services Revenue by Category | Service Category | 2025 (RMB thousand) | 2025 (%) | 2024 (RMB thousand) | 2024 (%) | Increase/Decrease (RMB thousand) | Growth Rate (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Basic Property Management Services | 452,128 | 84.1 | 521,118 | 84.1 | (68,990) | (13.2) | | Value-added Services to Property Owners | 2,055 | 0.4 | 2,648 | 0.4 | (593) | (22.4) | | Community Value-added Services | 83,252 | 15.5 | 95,690 | 15.5 | (12,438) | (13.0) | | **Total** | **537,435** | **100.0** | **619,456** | **100.0** | **(82,021)** | **(13.2)** | - The decrease in revenue was primarily due to the Group's strategic adjustments, proactively exiting **low-profit and high-risk projects**, leading to a reduction in managed area[76](index=76&type=chunk) Property Management Services Revenue by Geographical Location | Region | 2025 (RMB thousand) | 2025 (%) | 2024 (RMB thousand) | 2024 (%) | | :--- | :--- | :--- | :--- | :--- | | Southern China | 260,631 | 48.5 | 258,275 | 41.7 | | Southwestern China | 77,419 | 14.4 | 82,327 | 13.3 | | Eastern China | 48,971 | 9.1 | 72,508 | 11.7 | | Central and Northern China | 119,625 | 22.3 | 175,118 | 28.3 | | Northeastern China | 30,789 | 5.7 | 31,228 | 5.0 | | **Total** | **537,435** | **100.0** | **619,456** | **100.0** | [Commercial Operation Services](index=24&type=section&id=%E5%95%86%E6%A5%AD%E9%81%8B%E7%91%9F%E6%9C%8D%E5%8B%99) Commercial operation services revenue decreased by 8.9% to RMB 73.4 million, primarily due to a reduction in managed shopping mall/office building area and adjustments to service fee models, notably with property leasing and related services revenue contributing RMB 7.46 million from zero Commercial Operation Services Revenue by Category | Service Category | 2025 (RMB thousand) | 2025 (%) | 2024 (RMB thousand) | 2024 (%) | Increase/Decrease (RMB thousand) | Growth Rate (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Commercial Operation and Management Services | 65,985 | 89.8 | 80,589 | 100.0 | (14,604) | (18.1) | | Property Leasing and Related Services | 7,460 | 10.2 | – | – | 7,460 | 100.0 | | **Total** | **73,445** | **100.0** | **80,589** | **100.0** | **(7,144)** | **(8.9)** | - The decrease in revenue was mainly due to a reduction in the Group's managed shopping mall/office building area and adjustments to the service fee model for individual managed shopping malls[82](index=82&type=chunk) Commercial Operation Services Revenue by Geographical Region | Region | 2025 (RMB thousand) | 2025 (%) | 2024 (RMB thousand) | 2024 (%) | | :--- | :--- | :--- | :--- | :--- | | Southern China | 57,049 | 77.7 | 54,692 | 67.9 | | Southwestern China | 9,731 | 13.2 | 16,666 | 20.7 | | Eastern China | 4,320 | 5.9 | 6,889 | 8.5 | | Central China | 2,345 | 3.2 | 2,342 | 2.9 | | **Total** | **73,445** | **100.0** | **80,589** | **100.0** | [Cost of Services](index=25&type=section&id=%E6%9C%8D%E5%8B%99%E6%88%90%E6%9C%AC) Cost of services decreased by 8.0% year-on-year to RMB 442.6 million, primarily due to the company's strategic adjustments and proactive exit from low-profit and high-risk projects - Cost of services decreased by approximately **8.0%** to **RMB 442.6 million**, primarily due to the Group's strategic adjustments and proactive exit from low-profit and high-risk projects[85](index=85&type=chunk) [Gross Profit and Gross Margin](index=25&type=section&id=%E6%AF%9B%E5%88%A9%E5%8F%8A%E6%AF%9B%E5%88%A9%E7%8E%87) Gross profit decreased by 23.0% year-on-year to RMB 168.3 million, with gross margin falling by 3.7 percentage points to 27.5%, primarily due to strategic adjustments to exit inefficient projects and increased resource allocation to enhance owner satisfaction - Gross profit decreased by approximately **23.0%** to **RMB 168.3 million**, with gross margin decreasing by approximately **3.7 percentage points** to **27.5%**[86](index=86&type=chunk) - Property management services gross margin was **25.2%** (2024: **29.0%**), and commercial operation services gross margin was **44.7%** (2024: **48.4%**)[86](index=86&type=chunk) - The decrease in gross profit was mainly due to strategic adjustments to exit low-profit and high-risk projects, and increased resource allocation to enhance owner satisfaction[86](index=86&type=chunk) [Impairment Losses under Expected Credit Loss Model](index=25&type=section&id=%E9%A0%90%E6%9C%9F%E4%BF%A1%E7%94%A8%E6%90%8D%E5%A4%B1%E6%A8%A1%E5%9E%8B%E4%B8%8B%E7%9A%84%E6%B8%9B%E5%80%BC%E虧%E6%90%8D) Impairment losses under the expected credit loss model amounted to RMB 73.8 million, a decrease of RMB 8.0 million from the prior period - Impairment losses under the expected credit loss model amounted to approximately **RMB 73.8 million**, a decrease of approximately **RMB 8.0 million** from the prior period[87](index=87&type=chunk) [Selling and Distribution Expenses and Administrative Expenses](index=25&type=section&id=%E9%8A%B7%E5%94%AE%E5%8F%8A%E5%88%86%E9%8A%B7%E9%96%8B%E6%94%AF%E4%BB%A5%E5%8F%8A%E8%A1%8C%E6%94%BF%E9%96%8B%E6%94%AF) Total selling and distribution expenses were RMB 2.9 million, a year-on-year increase, while administrative expenses were RMB 39.2 million, a year-on-year decrease of 7.8% - Total selling and distribution expenses were approximately **RMB 2.9 million** (2024: approximately **RMB 1.7 million**)[88](index=88&type=chunk) - Administrative expenses were approximately **RMB 39.2 million**, a decrease of approximately **7.8%** from the prior period[90](index=90&type=chunk) [Other Income, Gains and Losses](index=26&type=section&id=%E5%85%B6%E4%BB%96%E6%94%B6%E5%85%A5%E3%80%81%E6%94%B6%E7%9B%8A%E5%8F%8A%E虧%E6%90%8D) Other income recorded a net income of approximately RMB 0.9 million, a decrease of RMB 9.2 million from the prior period, primarily due to a reduction in net exchange gains - Other income recorded a net income of approximately **RMB 0.9 million**, a decrease of approximately **RMB 9.2 million** from the prior period, primarily due to a reduction in net exchange gains of approximately **RMB 8.7 million**[91](index=91&type=chunk) [Income Tax](index=26&type=section&id=%E6%89%80%E5%BE%97%E7%A8%85) Income tax expense was RMB 13.9 million, a decrease of RMB 11.1 million from the prior period - Income tax expense was approximately **RMB 13.9 million**, a decrease of approximately **RMB 11.1 million** from the prior period[92](index=92&type=chunk) [Profit for the Reporting Period](index=26&type=section&id=%E5%A0%B1%E5%91%8A%E6%9C%9F%E9%96%93%E6%BA%A2%E5%88%A9) Net profit for the reporting period was RMB 21.1 million, a year-on-year decrease of 71.9%, with profit attributable to equity holders being RMB 25.0 million, a year-on-year decrease of 69.4% - Net profit for the reporting period was approximately **RMB 21.1 million**, a year-on-year decrease of approximately **71.9%**[93](index=93&type=chunk) - Profit attributable to equity holders was approximately **RMB 25.0 million**, a year-on-year decrease of approximately **69.4%**[93](index=93&type=chunk) [Financial Position](index=26&type=section&id=%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81) As of June 30, 2025, the company's financial position was sound, with total assets of RMB 2,285.3 million, total liabilities of RMB 1,038.3 million, a current ratio of 1.73, and net assets of RMB 1,247.0 million - As of June 30, 2025, total assets were approximately **RMB 2,285.3 million** (December 31, 2024: approximately **RMB 2,358.7 million**)[94](index=94&type=chunk) - Total liabilities were approximately **RMB 1,038.3 million** (December 31, 2024: approximately **RMB 1,114.1 million**)[94](index=94&type=chunk) - The current ratio was **1.73** (December 31, 2024: **1.68**), and net assets were approximately **RMB 1,247.0 million** (December 31, 2024: approximately **RMB 1,244.7 million**)[94](index=94&type=chunk) [Property, Plant and Equipment](index=26&type=section&id=%E7%89%A9%E6%A5%AD%E3%80%81%E5%BB%A0%E6%88%BF%E5%8F%8A%E8%A8%AD%E5%82%99) As of June 30, 2025, property, plant and equipment increased by approximately RMB 30.9 million, primarily due to the addition of office buildings - Property, plant and equipment increased by approximately **RMB 30.9 million**, primarily due to the addition of office buildings[95](index=95&type=chunk) [Right-of-Use Assets](index=27&type=section&id=%E4%BD%BF%E7%94%A8%E6%AC%8A%E8%B3%87%E7%94%A2) As of June 30, 2025, right-of-use assets amounted to approximately RMB 8.8 million - Right-of-use assets amounted to approximately **RMB 8.8 million**[97](index=97&type=chunk) [Investment Properties](index=27&type=section&id=%E6%8A%95%E8%B3%87%E7%89%A9%E6%A5%AD) As of June 30, 2025, the carrying amount of investment properties was approximately RMB 51.9 million, primarily comprising car parking spaces and leased shopping centers - The carrying amount of investment properties was approximately **RMB 51.9 million**, primarily comprising car parking spaces and leased shopping centers[98](index=98&type=chunk) [Intangible Assets](index=27&type=section&id=%E7%84%A1%E5%BD%A2%E8%B3%87%E7%94%A2) Intangible assets decreased to RMB 49.1 million, primarily due to a reduction in normal amortization - Intangible assets decreased to approximately **RMB 49.1 million**, primarily due to a reduction in normal amortization[99](index=99&type=chunk) [Goodwill](index=27&type=section&id=%E5%95%86%E8%AD%BD) Goodwill decreased to RMB 87.6 million, primarily due to an impairment loss of approximately RMB 14.0 million recognized for goodwill, as business expansion of some subsidiaries acquired in prior years did not meet expectations - Goodwill decreased to approximately **RMB 87.6 million**, primarily due to an impairment loss of approximately **RMB 14.0 million** recognized for goodwill, as business expansion of some subsidiaries acquired in prior years did not meet expectations[100](index=100&type=chunk) [Trade and Other Receivables](index=27&type=section&id=%E8%B2%A3%E6%98%93%E5%8F%8A%E5%85%B6%E4%BB%96%E6%87%89%E6%94%B6%E6%AC%BE%E9%A0%85) Trade and other receivables increased by approximately RMB 29.6 million or 4.6% to RMB 675.8 million - Trade and other receivables increased by approximately **RMB 29.6 million** or approximately **4.6%** to approximately **RMB 675.8 million**[101](index=101&type=chunk) [Amounts Due from Former Major Shareholder's Group Companies](index=27&type=section&id=%E6%87%89%E6%94%B6%E5%89%8D%E4%B8%BB%E8%A6%81%E8%82%A1%E6%9D%B1%E4%B9%8B%E9%9B%86%E5%9C%98%E5%85%AC%E5%8F%B8%E6%AC%BE%E9%A0%85) Amounts due from former major shareholder's group companies decreased by approximately RMB 47.4 million or 39.8% to RMB 71.8 million - Amounts due from former major shareholder's group companies decreased by approximately **RMB 47.4 million** or approximately **39.8%** to approximately **RMB 71.8 million**[102](index=102&type=chunk) [Trade and Other Payables](index=28&type=section&id=%E8%B2%A3%E6%98%93%E5%8F%8A%E5%85%B6%E4%BB%96%E6%87%89%E4%BB%98%E6%AC%BE%E9%A0%85) Trade and other payables decreased by approximately RMB 72.4 million or 9.1% to RMB 723.1 million - Trade and other payables decreased by approximately **RMB 72.4 million** or approximately **9.1%** to approximately **RMB 723.1 million**[104](index=104&type=chunk) [Borrowings](index=28&type=section&id=%E5%80%9F%E6%AC%BE) As of June 30, 2025, outstanding bank borrowings were approximately RMB 62.0 million, with no unutilized bank financing facilities for short-term funding, and borrowings bear interest at a fixed annual rate of 5.5%, partly guaranteed by certain subsidiaries and a former major shareholder's subsidiary - Outstanding bank borrowings were approximately **RMB 62.0 million**, with **no unutilized bank financing facilities** for short-term funding[105](index=105&type=chunk) - Bank borrowings bear interest at a **fixed annual rate of 5.5%**, with **RMB 60.0 million** guaranteed by certain Group subsidiaries and a former major shareholder's subsidiary, and secured by a pledge of equity in a company subsidiary[105](index=105&type=chunk) [Lease Liabilities](index=28&type=section&id=%E7%A7%9F%E8%B3%83%E8%B2%A0%E5%82%B5) As of June 30, 2025, lease liabilities due within one year were approximately RMB 15.7 million, and the balance of lease liabilities due after one year was approximately RMB 25.9 million - Lease liabilities due within one year were approximately **RMB 15.7 million** (December 31, 2024: approximately **RMB 3.9 million**)[106](index=106&type=chunk) - The balance of lease liabilities due after one year was approximately **RMB 25.9 million** (December 31, 2024: approximately **RMB 7.7 million**)[106](index=106&type=chunk) [Contingent Liabilities](index=28&type=section&id=%E6%88%96%E7%84%B6%E8%B2%A0%E5%82%B5) As of June 30, 2025, the company had no material contingent liabilities - As of June 30, 2025, the company had **no material contingent liabilities**[107](index=107&type=chunk) [Gearing Ratio](index=28&type=section&id=%E8%B3%87%E7%94%A2%E8%B2%A0%E5%82%B5%E6%AF%94%E7%8E%87) As of June 30, 2025, the gearing ratio was 0.45, a decrease from 0.47 as of December 31, 2024 - The gearing ratio was **0.45** (December 31, 2024: **0.47**)[108](index=108&type=chunk) [Foreign Exchange Risk](index=28&type=section&id=%E5%A4%96%E5%8C%AF%E9%A2%A8%E9%9A%AA) The company's functional currency is RMB, but some overseas subsidiaries use currencies other than RMB, exposing them to foreign exchange risk, and the company currently has no foreign exchange swap contracts or hedging policies - The company's functional currency is RMB, but certain overseas subsidiaries' functional currencies are other than RMB, exposing them to **foreign exchange risk**[109](index=109&type=chunk) - The company does not use any foreign exchange swap contracts to mitigate USD and HKD risks arising from bank balances, and currently has **no foreign exchange hedging policy**[109](index=109&type=chunk) [Pledge of Assets](index=28&type=section&id=%E8%B3%87%E7%94%A2%E6%8A%B5%E6%88%BC) As of June 30, 2025, the company had no assets pledged other than the equity of a subsidiary pledged to secure bank borrowings of RMB 60.0 million - As of June 30, 2025, no Group assets were pledged, except for the equity of a company subsidiary pledged to secure bank borrowings of approximately **RMB 60.0 million**[110](index=110&type=chunk) [Other Information](index=29&type=section&id=%E5%85%B6%E4%BB%96%E8%B3%87%E6%96%99) This section covers non-financial information for the reporting period, including significant acquisitions and disposals, employee and remuneration policies, treasury policy, interim dividends, dealings in listed securities, corporate governance, post-reporting period events, and the work of the audit committee [Significant Acquisitions and Disposals of Subsidiaries, Associates and Joint Ventures, Material Investments and Future Plans for Material Investments and Capital Assets](index=29&type=section&id=%E9%87%8D%E5%A4%A7%E6%94%B6%E8%B3%BC%E5%8F%8A%E5%87%BA%E5%94%AE%E9%99%84%E5%B1%AC%E5%85%AC%E5%8F%B8%E3%80%81%E8%81%AF%E7%87%9F%E5%85%AC%E5%8F%B8%E5%8F%8A%E5%90%88%E7%87%9F%E4%BC%81%E6%A5%AD%E3%80%81%E9%87%8D%E5%A4%A7%E6%8A%95%E8%B3%87%E4%BB%A5%E5%8F%8A%E9%87%8D%E5%A4%A7%E6%8A%95%E8%B3%87%E5%8F%8A%E8%B3%87%E6%9C%AC%E8%B3%87%E7%94%A2%E4%B9%8B%E6%9C%AA%E4%BE%86%E8%A8%88%E5%8A%83) For the six months ended June 30, 2025, the company had no significant acquisitions or disposals of subsidiaries, associates, or joint ventures, nor did the Board approve any material investments or plans for material investments - For the six months ended June 30, 2025, the Group had **no significant acquisitions or disposals** of subsidiaries, associates, or joint ventures[112](index=112&type=chunk) - The Board also did **not approve any material investments** or plans for material investments or increases in capital assets[112](index=112&type=chunk) [Employees and Remuneration Policy](index=29&type=section&id=%E5%83%B1%E5%93%A1%E5%8F%8A%E8%96%AA%E9%85%AC%E6%94%BF%E7%AD%96) As of June 30, 2025, the company had 1,627 employees, a decrease from the prior period, with staff costs for the first half of the year amounting to RMB 111.1 million, and the company regularly reviews remuneration and benefits based on market practice and individual performance, contributing to social insurance and housing provident funds for Chinese employees and operating a Mandatory Provident Fund scheme for Hong Kong employees - As of June 30, 2025, the Group had **1,627 employees** (June 30, 2024: **1,942 employees**)[113](index=113&type=chunk) - Staff costs for the first half of 2025 amounted to approximately **RMB 111.1 million** (first half of 2024: approximately **RMB 116.4 million**)[113](index=113&type=chunk) - The company regularly reviews employee remuneration and benefits based on market practice and individual performance, contributing to social insurance and housing provident funds for Chinese employees and operating a Mandatory Provident Fund scheme for Hong Kong employees[113](index=113&type=chunk) [Treasury Policy](index=29&type=section&id=%E5%BA%AB%E5%8B%99%E6%94%BF%E7%AD%96) The Board will continue to follow a prudent policy in managing the group's cash and cash equivalents and maintain a sound liquidity position to ensure the group is prepared to seize future growth opportunities - The directors will continue to follow a **prudent policy** in managing the Group's cash and cash equivalents and maintain a **sound liquidity position** to ensure the Group is prepared to seize future growth opportunities[114](index=114&type=chunk) [Interim Dividend](index=29&type=section&id=%E4%B8%AD%E6%9C%9F%E8%82%A1%E6%81%AF) The Board recommends not declaring any interim dividend for the six months ended June 30, 2025 - The directors recommend **not declaring any interim dividend** for the six months ended June 30, 2025[115](index=115&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=29&type=section&id=%E8%B3%BC%E8%B2%B7%E3%80%81%E5%87%BA%E5%94%AE%E6%88%96%E8%B4%96%E5%9B%9E%E6%9C%AC%E5%85%AC%E5%8F%B8%E4%B9%8B%E4%B8%8A%E5%B8%82%E8%AD%89%E5%88%B8) For the six months ended June 30, 2025, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's shares - For the six months ended June 30, 2025, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's shares[116](index=116&type=chunk) [Corporate Governance Code](index=30&type=section&id=%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB%E5%AE%88%E5%89%87) The company has complied with all code provisions of the Corporate Governance Code, except for the Chairman of the Board also serving as CEO, which deviates from Code Provision C.2.1, but the Board believes this practice facilitates business strategy execution and enhances operational efficiency, with the Board's structure ensuring a balance of power - The company has complied with all code provisions of the Corporate Governance Code, except for the Chairman of the Board also serving as CEO, which deviates from **Code Provision C.2.1**[118](index=118&type=chunk) - The Board believes that the same individual serving as both Chairman and CEO facilitates the execution of the Group's business strategies and enhances operational efficiency[118](index=118&type=chunk) [Standard Code for Securities Transactions by Directors](index=30&type=section&id=%E8%91%A3%E4%BA%8B%E9%80%B2%E8%A1%8C%E8%AD%89%E5%88%B8%E4%BA%A4%E6%98%93%E4%B9%8B%E6%A8%99%E6%BA%96%E5%AE%88%E5%89%87) The company has adopted the Standard Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix C3 of the Listing Rules as the code of conduct for directors' dealings in the company's securities, and all directors have confirmed compliance throughout the reporting period - The company has adopted the Standard Code for Securities Transactions by Directors of Listed Issuers as set out in **Appendix C3** of the Listing Rules as its code of conduct for directors' dealings in the company's securities[119](index=119&type=chunk) - All directors have confirmed their compliance with the Standard Code for the six months ended June 30, 2025[119](index=119&type=chunk) [Events After the Reporting Period](index=30&type=section&id=%E5%A0%B1%E5%91%8A%E6%9C%9F%E5%BE%8C%E4%BA%8B%E4%BB%B6) Save as disclosed in this announcement, there have been no material events from the end of the reporting period up to the date of this announcement - Save as disclosed in this announcement, there have been **no material events** from the end of the reporting period up to the date of this announcement[120](index=120&type=chunk) [Audit Committee](index=30&type=section&id=%E5%AF%A9%E6%A0%B8%E5%A7%94%E5%93%A1%E6%9C%83) The Audit Committee has reviewed the accounting principles and practices adopted by the company and discussed audit and financial reporting matters, including the review of the unaudited condensed consolidated interim financial statements for the six months ended June 30, 2025 - The Audit Committee has reviewed the accounting principles and practices adopted by the Group and discussed audit and financial reporting matters[121](index=121&type=chunk) - The Audit Committee has reviewed the Group's unaudited condensed consolidated interim financial statements for the six months ended June 30, 2025[121](index=121&type=chunk) [Publication of Interim Results and Interim Report](index=31&type=section&id=%E5%88%8A%E7%99%BC%E4%B8%AD%E6%9C%9F%E6%A5%AD%E7%B8%BE%E5%8F%8A%E4%B8%AD%E6%9C%9F%E5%A0%B1%E5%91%8A) This interim results announcement has been published on the HKEX website and the company's website, and the interim report containing all information required by the Listing Rules will be dispatched to shareholders in due course and available on the aforementioned websites - This interim results announcement is published on the HKEX website (www.hkexnews.hk) and the company's website (www.sjwt.net)[123](index=123&type=chunk) - The company's interim report for the six months ended June 30, 2025, containing all information required by the Listing Rules, will be dispatched to shareholders (upon request) and available on the aforementioned websites in due course[123](index=123&type=chunk)

Clinical Development - Sirnaomics reported a positive clinical trial outcome for its lead candidate STP705, targeting two tumor indications: squamous cell carcinoma in situ (isSCC) and basal cell carcinoma (BCC) [17]. - The company is strategically prioritizing the advancement of isSCC into pivotal Phase IIb/III trials while retaining future development pathways for all indications [17]. - STP707 is currently undergoing Phase I clinical trials in the US for treating multiple solid tumors, with completion expected by the end of 2025 [18]. - STP705 has shown positive clinical results in the isSCC trial, leading to its evaluation in the medical aesthetics field, with an ongoing Phase I study in the US demonstrating excellent safety and early efficacy signals [18]. - STP705 has shown good efficacy in Phase IIa and IIb studies for isSCC and BCC, with plans to advance to later-stage clinical development [25]. - STP122G, based on the GalAhead™ mxRNA platform, is in Phase I trials, with initial safety data supporting continued clinical progress, expected to complete by 2026 [20]. - STP707 shows good tolerance and therapeutic effects, especially in pancreatic cancer patients, with a Phase I trial involving 50 patients expected to complete by the end of 2025 [26]. - The company is advancing STP125G and STP144G into clinical development, with STP125G targeting ApoC3 for hypertriglyceridemia and cardiovascular diseases, and IND submission planned for 2025 [29]. Technology and Innovation - Sirnaomics utilizes a dual delivery system (PNP and GalAhead) to advance a diverse pipeline addressing unmet medical needs across oncology, fibrosis, aesthetic medicine, anticoagulation, and cardiovascular metabolic diseases [17]. - The GalAhead™ delivery platform is being researched for various liver cell-related diseases, utilizing mxRNA and muRNA therapies for subcutaneous administration [19]. - The PNP delivery platform is clinically validated and supports therapy development across oncology, fibrotic diseases, and medical aesthetics [31]. - The GalAhead™ platform has shown strong clinical validation, with STP122G demonstrating excellent safety in initial clinical cohorts [39]. - The company is positioned as a pioneer in the RNA interference field, focusing on dual-gene targeting projects to address significant scientific and commercial interest [20]. Financial Performance - For the six months ended June 30, 2025, the company reported a loss of $3.4 million, a significant improvement from a loss of $43.5 million for the same period in 2024, representing a reduction of approximately 92% [48]. - The group’s loss decreased from $43.5 million for the six months ended June 30, 2024, to $3.4 million for the six months ended June 30, 2025, primarily due to reduced fair value losses on financial assets and lower R&D and administrative expenses [62]. - The company reported a net loss of $3,388,000 for the six months ended June 30, 2025, compared to a net loss of $41,065,000 for the same period in 2024, indicating a significant improvement [161]. - The total comprehensive loss for the period was $3.410 million, compared to $43.887 million in the previous year [154]. - The company had no product sales revenue for the six months ended June 30, 2025 [50]. - The company recognized share-based payments totaling $1,599,000 during the reporting period [159]. Cost Management - Research and development expenses decreased by $11.3 million or 79% to $3.0 million for the six months ended June 30, 2025, attributed to a strategic focus on developing STP705 and STP122G while pausing other projects [59]. - Administrative expenses were reduced by $7.6 million or 75% to $2.6 million for the six months ended June 30, 2025, due to restructuring strategies and cost-saving measures [57]. - Employee costs totaled $2,710,000, a decrease of 68% from $8,459,000 in the prior year, with salaries and other allowances dropping from $6,402,000 to $2,248,000 [176]. Strategic Partnerships and Licensing - The company is actively engaging potential partners to accelerate innovative medical aesthetics projects based on STP705 [25]. - The company aims to leverage proprietary technology through strategic licensing to empower biopharmaceutical partners while advancing its internal pipeline [21]. - The company is actively seeking global and regional partnerships for STP705 and STP707 to enhance development capabilities and reduce risks [40]. Restructuring and Financial Strategy - A comprehensive restructuring plan has been implemented to enhance operational efficiency and extend financial runway [38]. - The company is exploring additional financing opportunities and evaluating strategic options, including selective divestiture of non-core assets [38]. - The company is actively seeking external financing through equity and debt to supplement its cash reserves [162]. - The company is exploring business development opportunities for its pipeline assets to enhance revenue generation [162]. Employee Incentives and Share Options - The group has adopted a pre-IPO equity incentive plan, restricted share unit plan, and stock option plan to incentivize eligible employees [81]. - The pre-IPO equity incentive plan aims to attract and retain outstanding talents for the group [82]. - The plan allows for the reallocation of shares if rewards expire, lapse, or are canceled, enabling those shares to be used for new rewards [90]. - The stock option plan aims to attract and retain talent, align interests with shareholders, and provide additional incentives for performance [117]. - The company granted a total of 8,904,023 share options under the share option scheme adopted on June 28, 2022 [6]. Shareholder Information - The company did not declare any interim dividend for the reporting period [149]. - The company has not purchased, sold, or redeemed any of its listed securities during the six months ending June 30, 2025 [140]. - The company plans to grant a total of 8,137,550 further share options, representing approximately 7.74% of the issued shares [9]. Legal and Compliance - The company has made no significant litigation or arbitration claims as of June 30, 2025 [143]. - The company is currently undergoing arbitration proceedings related to a claim against the investment manager, with the arbitration tribunal established on November 8, 2024 [184]. - The group has significant uncertainty regarding its ability to continue as a going concern due to the potential failure to implement restructuring plans [164].

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佈之內容概不負責，對其準確性或完整性亦不 發表任何聲明，並明確表示，概不就因本公佈全部或任何部份內容而產生或因倚賴該等內容而引致之任何損 失承擔任何責任。 （於開曼群島註冊成立之有限公司） （股份代號：419） 中期業績公佈 – 3 – 弘毅文化集團（「本公司」）董事會（「董事會」）欣然提呈本公司及其附屬公司（「本集團」）截至二零二五年六月三 十日止六個月之簡明綜合中期業績，連同二零二四年同期之比較數字。簡明綜合中期業績已經由本公司審核 委員會審閱。 簡明綜合中期收益表 截至二零二五年六月三十日止六個月 | | | 截至六月三十日止六個月 | | | --- | --- | --- | --- | | | | 二零二五年 | 二零二四年 | | | | （未經審核） | （未經審核） | | | 附註 | 千港元 | 千港元 | | 收入 | 4 | 302,381 | 489,398 | | 銷售成本 | | (222,235) | (356,200) | | 毛利 | | 80,146 | 133,198 | | 其他收入及其他收益淨額 | 4 | 1 ...