Announcement Information and Declarations [Disclaimer](index=1&type=section&id=Disclaimer) HKEX disclaims responsibility for this announcement's content, accuracy, or completeness, and any resulting losses - Hong Kong Exchanges takes no responsibility for the content of this announcement, nor does it guarantee its accuracy or completeness[1](index=1&type=chunk) [Company Information and GEM Characteristics](index=1&type=section&id=Company%20Information%20and%20GEM%20Characteristics) This interim results announcement is for Modern Living Investments Holdings Limited (08426), incorporated in Cayman Islands, noting GEM's high investment risks - The company is Modern Living Investments Holdings Limited, incorporated in the Cayman Islands, with stock code **08426**[2](index=2&type=chunk)[3](index=3&type=chunk) - The GEM market is positioned for small and medium-sized companies, with higher investment risks, greater market volatility, and no guarantee of liquidity[2](index=2&type=chunk) - The company's directors assume full responsibility for the accuracy, completeness, and non-misleading nature of the announcement information[3](index=3&type=chunk) Performance Highlights For the six months ended June 30, 2025, revenue grew **4.61%** to **HK$196.34 million**, but profit declined **4.77%** to **HK$8.71 million**, with lower EPS and interim dividends Key Financial Data Summary for H1 2025 | Metric | 2025 H1 (HK$ Thousand) | 2024 H1 (HK$ Thousand) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Unaudited Revenue | 196,340 | 187,680 | +4.61% | | Unaudited Profit | 8,710 | 9,150 | -4.77% | | Basic Earnings Per Share (HK Cents) | 1.09 | 1.14 | -4.39% | | Interim Dividend (HK Cents Per Share) | 0.56 | 1.40 | -60.00% | Condensed Consolidated Financial Statements [Condensed Consolidated Statement of Profit or Loss](index=3&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss) Revenue grew to **HK$196.34 million**, but profit slightly decreased to **HK$8.71 million** due to higher employee benefit expenses Condensed Consolidated Statement of Profit or Loss (For the six months ended June 30) | Metric | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Revenue | 196,338 | 187,681 | | Other income | 51 | 123 | | Other gains/(losses) – net | 573 | (133) | | Employee benefit expenses | (179,224) | (167,145) | | Cleaning material costs | (1,465) | (1,383) | | Utilities expenses | (374) | (456) | | Depreciation | (678) | (745) | | Other operating expenses | (7,175) | (9,422) | | Operating profit | 8,046 | 8,520 | | Net finance income | 1,982 | 1,812 | | Profit before income tax | 10,028 | 10,332 | | Income tax expense | (1,318) | (1,186) | | Profit for the period | 8,710 | 9,146 | | Basic and diluted earnings per share (HK cents) | 1.09 | 1.14 | [Condensed Consolidated Statement of Comprehensive Income](index=4&type=section&id=Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) Profit for the period was **HK$8.71 million**, with no other comprehensive income from remeasurement of employee benefit obligations in 2025 Condensed Consolidated Statement of Comprehensive Income (For the six months ended June 30) | Metric | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Profit for the period | 8,710 | 9,146 | | Other comprehensive income: | | | | Items that will not be reclassified to profit or loss | | | | Remeasurement of employee benefit obligations | – | 526 | | Other comprehensive income for the period, net of tax | 8,710 | 526 | | Total comprehensive income for the period | 8,710 | 9,672 | [Condensed Consolidated Statement of Financial Position](index=5&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) Total assets decreased to **HK$201.63 million**, with reductions in current assets, total liabilities, and total equity Condensed Consolidated Statement of Financial Position (As of June 30, 2025) | Metric | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | | :--- | :--- | :--- | | **ASSETS** | | | | Non-current assets | 7,124 | 7,953 | | Current assets | 194,504 | 212,156 | | **TOTAL ASSETS** | **201,628** | **220,109** | | **EQUITY** | | | | Total equity | 151,509 | 153,999 | | **LIABILITIES** | | | | Non-current liabilities | 161 | 1,332 | | Current liabilities | 49,958 | 64,778 | | **TOTAL LIABILITIES** | **50,119** | **66,110** | | **TOTAL EQUITY AND LIABILITIES** | **201,628** | **220,109** | [Condensed Consolidated Statement of Changes in Equity](index=7&type=section&id=Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) Total equity decreased from **HK$153.999 million** to **HK$151.509 million**, mainly due to the **HK$11.2 million** final dividend payment Condensed Consolidated Statement of Changes in Equity (For the six months ended June 30) | Metric | Share Capital (HK$ Thousand) | Share Premium (HK$ Thousand) | Contribution Reserve (HK$ Thousand) | Retained Earnings (HK$ Thousand) | Total Equity (HK$ Thousand) | | :--- | :--- | :--- | :--- | :--- | :--- | | Balance at January 1, 2025 (audited) | 8,000 | 42,776 | 22,270 | 80,953 | 153,999 | | Profit for the period | – | – | – | 8,710 | 8,710 | | Total comprehensive income for the period | – | – | – | 8,710 | 8,710 | | Final dividend paid for 2024 | – | – | – | (11,200) | (11,200) | | Balance at June 30, 2025 (unaudited) | 8,000 | 42,776 | 22,270 | 78,463 | 151,509 | [Condensed Consolidated Statement of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) Net cash outflow from operations was **HK$23.72 million**, offset by **HK$28.32 million** from investing, leading to a **HK$7.08 million** net cash decrease Condensed Consolidated Statement of Cash Flows (For the six months ended June 30) | Metric | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Net cash flow from operating activities | (23,722) | 24,197 | | Net cash flow from investing activities | 28,315 | (19,602) | | Net cash flow from financing activities | (11,668) | (5,501) | | Net decrease in cash and cash equivalents | (7,075) | (906) | | Cash and cash equivalents at beginning of period | 23,840 | 11,556 | | Cash and cash equivalents at end of period | 16,765 | 10,650 | Notes to the Condensed Consolidated Financial Information [General Information](index=9&type=section&id=General%20Information) Modern Living Investments Holdings Limited, incorporated in Cayman Islands, provides property management in Hong Kong, with GT Winners Limited as ultimate holding company - The company was incorporated in the Cayman Islands on **June 26, 2017**, and listed on GEM on **November 10, 2017**[14](index=14&type=chunk)[16](index=16&type=chunk) - The Group primarily provides property management services in Hong Kong, focusing on public housing and R&D[15](index=15&type=chunk) - The company's ultimate holding company is **GT Winners Limited**[15](index=15&type=chunk) [Basis of Preparation](index=9&type=section&id=Basis%20of%20Preparation) Unaudited financial information adheres to HKFRSs, Companies Ordinance, and GEM Listing Rules, with no significant impact from new standards - The financial information is prepared in accordance with Hong Kong Financial Reporting Standards, the Hong Kong Companies Ordinance, and the GEM Listing Rules[17](index=17&type=chunk) - Key accounting policies are consistent with the 2024 annual financial statements, and newly adopted revised standards have no significant impact[18](index=18&type=chunk) [Segment Information](index=10&type=section&id=Segment%20Information) The Group operates a single segment of property management services in Hong Kong, hence no segment analysis is presented - The Group operates solely in the Hong Kong property management services segment, with no business segment analysis presented[19](index=19&type=chunk) [Estimates](index=10&type=section&id=Estimates) Management's significant judgments, estimates, and assumptions for interim financial information are consistent with the prior year - Management's judgments and estimates in preparing the financial information are consistent with the prior year[20](index=20&type=chunk) [Financial Risk Management](index=10&type=section&id=Financial%20Risk%20Management) The Group faces credit, interest rate, foreign currency, and liquidity risks without hedging, with stable financial liability cash flows and fair values - The Group is exposed to credit, interest rate, foreign exchange, and liquidity risks, but does not hedge these exposures[21](index=21&type=chunk) [Financial Risk Factors](index=10&type=section&id=Financial%20Risk%20Factors) The Group's business is exposed to credit, interest rate, foreign exchange, and liquidity risks, without using financial derivatives for hedging - The Group's risk management program aims to minimize the adverse effects of financial market unpredictability on financial performance[21](index=21&type=chunk) [Liquidity Risk](index=10&type=section&id=Liquidity%20Risk) Contractual undiscounted cash outflows for financial liabilities show no significant change compared to year-end - Contractual undiscounted cash outflows for financial liabilities show no significant change compared to year-end[22](index=22&type=chunk) [Fair Value of Financial Assets and Liabilities](index=11&type=section&id=Fair%20Value%20of%20Financial%20Assets%20and%20Liabilities) Fair values of most financial assets and liabilities, including cash, deposits, and receivables/payables, approximate their carrying amounts - The fair values of various financial assets and liabilities, including cash, deposits, receivables, and payables, approximate their carrying amounts[23](index=23&type=chunk)[27](index=27&type=chunk) [Revenue (Notes)](index=11&type=section&id=Revenue%20(Notes)) All Group revenue for the period originated from property management services in Hong Kong, with no segment or geographical analysis presented - All of the Group's revenue is derived from property management services in Hong Kong[25](index=25&type=chunk) [Other Income](index=11&type=section&id=Other%20Income) Other income decreased to **HK$51 thousand**, mainly due to reduced Job Creation Scheme subsidies Other Income (For the six months ended June 30) | Item | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Job Creation Scheme subsidy | – | 114 | | Development Bureau subsidy | 19 | – | | Miscellaneous income | 32 | 9 | | **Total** | **51** | **123** | [Other Gains/(Losses) – Net](index=12&type=section&id=Other%20Gains%2F%28Losses%29%20%E2%80%93%20Net) Net other gains were **HK$573 thousand**, a significant improvement from a **HK$133 thousand** loss, driven by foreign exchange gains Other Gains/(Losses) – Net (For the six months ended June 30) | Item | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Investment gain on insurance contract | 32 | 47 | | Net foreign exchange gains/(losses) | 541 | (180) | | **Total** | **573** | **(133)** | [Employee Benefit Expenses (Notes)](index=12&type=section&id=Employee%20Benefit%20Expenses%20(Notes)) Total employee benefit expenses increased to **HK$179.22 million**, primarily due to growth in wages, salaries, and other allowances Employee Benefit Expenses (For the six months ended June 30) | Item | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Wages, salaries and other allowances | 169,460 | 158,304 | | Pension costs – defined contribution plans | 5,658 | 6,273 | | Accrued unused annual leave | 448 | 291 | | Long service payments and gratuities | 2,735 | 3,200 | | **Total** | **179,224** | **167,145** | [Net Finance Income](index=12&type=section&id=Net%20Finance%20Income) Net finance income increased to **HK$1.98 million**, mainly driven by higher bank interest income Net Finance Income (For the six months ended June 30) | Item | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Bank interest income | 2,014 | 1,868 | | Interest on lease payments | (32) | (56) | | **Total** | **1,982** | **1,812** | [Expenses by Nature](index=13&type=section&id=Expenses%20by%20Nature) Total expenses rose to **HK$188.92 million**, with employee benefits as the largest component, while other operating expenses decreased Expenses by Nature (For the six months ended June 30) | Item | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Cleaning material costs | 1,465 | 1,383 | | Utilities expenses | 374 | 456 | | Depreciation | 678 | 745 | | Employee benefit expenses | 179,224 | 167,145 | | Other operating expenses | 7,175 | 9,422 | | **Total** | **188,916** | **179,151** | - The decrease in other operating expenses was primarily due to lower professional fees and estate maintenance expenses[31](index=31&type=chunk) [Income Tax Expense](index=14&type=section&id=Income%20Tax%20Expense) Income tax expense increased to **HK$1.32 million**, primarily due to higher Hong Kong Profits Tax Income Tax Expense (For the six months ended June 30) | Item | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Current income tax: Hong Kong Profits Tax | 1,318 | 1,222 | | Deferred income tax | – | (36) | | **Total** | **1,318** | **1,186** | - Hong Kong Profits Tax is provided at a rate of **16.5%**, in line with the new two-tiered Profits Tax regime[32](index=32&type=chunk) [Dividends](index=14&type=section&id=Dividends) The Board declared an interim dividend of **HK$0.56 cents** per share, a significant decrease from **HK$1.40 cents** in 2024 - A final dividend of **HK$11.2 million** (HK$1.40 cents per share) for 2024 has been paid[33](index=33&type=chunk) - An interim dividend of **HK$0.56 cents** per share for H1 2025 was declared, representing a **60%** year-on-year decrease[33](index=33&type=chunk) [Earnings Per Share](index=14&type=section&id=Earnings%20Per%20Share) Basic earnings per share decreased to **HK$1.09 cents**, with no diluted EPS presented due to absence of dilutive shares Earnings Per Share Calculation (For the six months ended June 30) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Profit attributable to owners of the Company (HK$ Thousand) | 8,710 | 9,146 | | Number of ordinary shares for basic earnings per share (Thousand shares) | 800,000 | 800,000 | | Basic earnings per share (HK cents) | 1.09 | 1.14 | - Diluted earnings per share are not presented as there are no potential dilutive ordinary shares[34](index=34&type=chunk) [Property, Plant and Equipment](index=14&type=section&id=Property%2C%20Plant%20and%20Equipment) Acquisitions of property, plant and equipment increased to **HK$230 thousand** for the period - Acquisitions of property, plant and equipment amounted to **HK$230 thousand** for the period, compared to **HK$190 thousand** in the prior year period[35](index=35&type=chunk) [Leases](index=15&type=section&id=Leases) Right-of-use assets and lease liabilities both decreased as of June 30, 2025 Lease Assets and Liabilities (As of June 30, 2025) | Metric | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Right-of-use assets | 866 | 1,296 | | Lease liabilities (current) | 893 | 889 | | Lease liabilities (non-current) | 26 | 498 | | **Total lease liabilities** | **919** | **1,387** | [Investment in an Insurance Contract](index=15&type=section&id=Investment%20in%20an%20Insurance%20Contract) Investment in a management life insurance policy, with the Group as beneficiary, has value changes recognized in 'Other gains/(losses) – net' - Investment in a management life insurance policy, with the Group as the beneficiary[37](index=37&type=chunk) - Changes in investment value are recognized in 'Other gains/(losses) – net'[37](index=37&type=chunk) [Trade Receivables and Contract Assets](index=15&type=section&id=Trade%20Receivables%20and%20Contract%20Assets) Total trade receivables increased to **HK$79.00 million**, mainly from 31-90 day aged receivables, with a 30-60 day credit period - The credit period for trade receivables generally ranges from **30 to 60 days**[38](index=38&type=chunk) Ageing Analysis of Trade Receivables and Contract Assets (As of June 30, 2025) | Item | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Contract assets | 8,898 | 8,898 | | Trade receivables: | | | | 0-30 days | 32,398 | 33,364 | | 31-60 days | 30,483 | 19,165 | | 61-90 days | 16,120 | 10,270 | | **Total trade receivables** | **79,001** | **62,799** | | **Total** | **87,899** | **71,697** | [Pledged Bank Deposits](index=16&type=section&id=Pledged%20Bank%20Deposits) Pledged bank deposits serve as collateral for performance bonds and bank facilities granted to the Group - Pledged bank deposits are used to secure performance bonds and bank facilities[40](index=40&type=chunk) [Bank Facilities](index=16&type=section&id=Bank%20Facilities) Bank facilities are secured by pledged bank deposits and corporate guarantees from the Company - Bank facilities are secured by pledged bank deposits and corporate guarantees[41](index=41&type=chunk) [Share Capital](index=16&type=section&id=Share%20Capital) Issued and fully paid share capital totals **HK$8,000 thousand**, comprising **800,000 thousand** shares at **HK$0.01** par value each Share Capital Composition | Item | Thousand Shares | HK$ Thousand | | :--- | :--- | :--- | | Ordinary shares of HK$0.01 each | | | | Issued and fully paid | 800,000 | 8,000 | [Capital Commitments (Notes)](index=16&type=section&id=Capital%20Commitments%20(Notes)) The Group had no significant capital commitments as of June 30, 2025, and December 31, 2024 - The Group has no significant capital commitments[43](index=43&type=chunk) [Comparative Figures](index=16&type=section&id=Comparative%20Figures) Certain comparative figures were reclassified to align with the current year's presentation and disclosure - Some comparative figures have been reclassified to align with the current year's presentation[44](index=44&type=chunk) [Events After the Reporting Period](index=16&type=section&id=Events%20After%20the%20Reporting%20Period) No significant events occurred or affected the Group after June 30, 2025, up to the announcement date - No significant events occurred after the reporting period[45](index=45&type=chunk) Management Discussion and Analysis [Business Review](index=17&type=section&id=Business%20Review) Revenue grew **4.61%** with **10 new contracts** and **29 existing estates**, while receiving awards and collaborating on smart construction for service enhancement - The Group's revenue increased by **4.61%**, but profit slightly decreased, mainly due to upfront payments for initial management of newly signed contracts[46](index=46&type=chunk) - The existing property management portfolio includes **14 public housing estates** and **15 Home Ownership Scheme estates**, with contracts typically lasting **2 to 5 years**[46](index=46&type=chunk) - **10 new contracts** were signed during the review period, some already commenced, with the remainder to start service in H2 2025[46](index=46&type=chunk) - Awarded the Hong Kong Housing Authority's 'Estate Management Services Contractor Award' and 'Inclusive and Diverse Enterprise Award', and collaborated with HKUST on smart construction research to enhance service efficiency and resident experience[47](index=47&type=chunk)[48](index=48&type=chunk) [Financial Review](index=18&type=section&id=Financial%20Review) Revenue grew from new contracts, but profit declined due to increased employee benefit and cleaning costs, despite lower other operating expenses [Revenue (Financial Review)](index=18&type=section&id=Revenue%20(Financial%20Review)) Revenue from property management services increased **4.61%** to **HK$196.34 million**, driven by new contracts - Revenue increased by **4.61%** year-on-year, primarily driven by securing new property management service contracts[49](index=49&type=chunk) [Employee Benefit Expenses (Financial Review)](index=18&type=section&id=Employee%20Benefit%20Expenses%20(Financial%20Review)) Employee benefit expenses increased to **HK$179.22 million**, primarily due to a higher number of managed contracts - Employee benefit expenses increased, primarily due to a rise in the number of managed contracts[50](index=50&type=chunk) [Cleaning Material Costs](index=18&type=section&id=Cleaning%20Material%20Costs) Cleaning material costs rose to **HK$1.47 million**, mainly due to an increase in managed contracts - Cleaning material costs slightly increased, mainly due to a rise in the number of managed contracts[51](index=51&type=chunk) [Other Operating Expenses](index=18&type=section&id=Other%20Operating%20Expenses) Other operating expenses decreased to **HK$7.18 million**, mainly from lower professional fees and estate maintenance expenses - Other operating expenses decreased, mainly due to lower professional fees and estate maintenance expenses[52](index=52&type=chunk) [Profit for the Period](index=19&type=section&id=Profit%20for%20the%20Period) Profit for the period declined **4.77%** to **HK$8.71 million**, impacted by lower other income and higher employee benefit expenses - Profit for the period decreased by **4.77%**, impacted primarily by reduced other income and increased employee benefit expenses[53](index=53&type=chunk) [Liquidity and Financial Resources](index=19&type=section&id=Liquidity%20and%20Financial%20Resources) The Group funds operations via income and financing, with gearing improving to **0.61%** despite decreased current assets and cash - The Group primarily funds its operations through operating income and financing activities[54](index=54&type=chunk) Liquidity and Financial Resources Overview | Metric | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Gearing ratio | 0.61% | 0.90% | | Current assets | 194,500 | 212,160 | | Cash and cash equivalents | 16,770 | 23,840 | [Capital Structure](index=19&type=section&id=Capital%20Structure) The Group's capital comprises solely ordinary shares, with no changes in capital structure during the period - The Group's capital is composed solely of ordinary shares, with no changes in capital structure during the reporting period[56](index=56&type=chunk) [Significant Acquisitions or Disposals](index=19&type=section&id=Significant%20Acquisitions%20or%20Disposals) No significant acquisitions or disposals of subsidiaries and associated companies occurred during the period - No significant acquisition or disposal activities occurred during the reporting period[57](index=57&type=chunk) [Future Material Investments and Capital Asset Plans](index=20&type=section&id=Future%20Material%20Investments%20and%20Capital%20Asset%20Plans) The Group had no material investment and capital asset plans as of June 30, 2025 - The Group had no material investment and capital asset plans at the end of the reporting period[58](index=58&type=chunk) [Exchange Rate Fluctuation Risk](index=20&type=section&id=Exchange%20Rate%20Fluctuation%20Risk) The Group's HKD-denominated business faces minimal exchange rate risk, with no hedging instruments used - The Group's business is primarily transacted in Hong Kong Dollars, with minimal impact from exchange rate risk[59](index=59&type=chunk) - No hedging instruments or contracts were entered into during the reporting period[59](index=59&type=chunk) [Material Investments](index=20&type=section&id=Material%20Investments) The Group's only material investment is an insurance contract valued at approximately **HK$2.7 million** Material Investments (Investment in an Insurance Contract) | Date | Amount (HK$ Thousand) | | :--- | :--- | | June 30, 2025 | 2,700 | | December 31, 2024 | 2,660 | [Capital Commitments (MDA)](index=20&type=section&id=Capital%20Commitments%20(MDA)) The Group had no material unprovided capital commitments as of June 30, 2025 - The Group has no material unprovided capital commitments[61](index=61&type=chunk) [Contingent Liabilities](index=20&type=section&id=Contingent%20Liabilities) The Group has **51 performance bonds** totaling **HK$137.12 million**, with low likelihood of being called, and no material legal claim impact - The Group has **51 performance bonds** totaling approximately **HK$137.12 million**[62](index=62&type=chunk) - The Directors believe the likelihood of performance bonds being called upon is low, and existing legal claims have no material financial impact on the company[62](index=62&type=chunk) [Interim Dividend](index=21&type=section&id=Interim%20Dividend) The Board declared an interim dividend of **HK$0.56 cents** per ordinary share for the six months ended June 30, 2025 - The Board declared an interim dividend of **HK$0.56 cents** per ordinary share[63](index=63&type=chunk) [Employees and Remuneration Policy](index=21&type=section&id=Employees%20and%20Remuneration%20Policy) The Group had **1,304 employees** with **HK$179.22 million** in benefit expenses, using performance-based bonuses to attract and retain talent - As of June 30, 2025, the Group had **1,304 employees**[64](index=64&type=chunk) Employee Benefit Expenses | Period | Amount (HK$ Thousand) | | :--- | :--- | | H1 2025 | 179,220 | | H1 2024 | 167,150 | - The company regularly reviews remuneration packages and grants discretionary bonuses based on performance and individual contributions[64](index=64&type=chunk) [Prospects and Outlook](index=21&type=section&id=Prospects%20and%20Outlook) The Group aims to consolidate market leadership in Hong Kong's public housing sector by optimizing services, controlling costs, and adopting smart management for long-term value - The Group will actively seize opportunities in Hong Kong's expanding public housing market, building competitiveness through quality services, optimized operations, and cost control[65](index=65&type=chunk) - Future plans include consolidating market leadership, deepening cooperation with government and industry, integrating into smart city development, and applying smart estate management concepts[65](index=65&type=chunk) - The goal is to continuously enhance service efficiency and quality, creating long-term value and sustainable growth prospects for investors and the community[65](index=65&type=chunk) Other Information [Disclosure of Interests](index=22&type=section&id=Disclosure%20of%20Interests) This section details Directors', chief executives', and substantial shareholders' interests and short positions in company shares as of June 30, 2025 [Directors' and Chief Executive's Interests and Short Positions in Shares, Underlying Shares and Debentures of the Company and its Associated Corporations](index=22&type=section&id=Directors%27%20and%20Chief%20Executive%27s%20Interests%20and%20Short%20Positions%20in%20Shares%2C%20Underlying%20Shares%20and%20Debentures%20of%20the%20Company%20and%20its%20Associated%20Corporations) As of June 30, 2025, Mr. Pang Yat Ting held **64.95%** via controlled corporations, and Mr. Ng Fuk Wah held **10.00%** via spouse's interests Directors' Long Positions in Shares (As of June 30, 2025) | Name of Director | Capacity | Nature of Interest | Number of Shares (L) | Approximate % of the Company | | :--- | :--- | :--- | :--- | :--- | | Mr. Pang Yat Ting | Interest in controlled corporation | Corporate interest | 519,649,500 | 64.95% | | Mr. Ng Fuk Wah | Interest of spouse | Corporate interest | 80,000,000 | 10.00% | - Mr. Pang Yat Ting indirectly holds shares through Chun Wo Overseas and Asia Allied Infrastructure, and Ms. Li Wai Han is also deemed to have relevant interests[66](index=66&type=chunk)[71](index=71&type=chunk) - Mr. Ng Fuk Wah is deemed to have interests in relevant shares due to his spouse, Ms. Tam Mo Kit, holding interests in R5A Group Limited[67](index=67&type=chunk) [Substantial Shareholders' Interests and Short Positions in Shares, Underlying Shares and Debentures of the Company and its Associated Corporations](index=23&type=section&id=Substantial%20Shareholders%27%20Interests%20and%20Short%20Positions%20in%20Shares%2C%20Underlying%20Shares%20and%20Debentures%20of%20the%20Company%20and%20its%20Associated%20Corporations) Chun Wo Overseas, Asia Allied Infrastructure, and Ms. Li Wai Han each held **64.95%**, while R5A Group Limited held **10.00%** of shares Substantial Shareholders' Long Positions in Ordinary Shares of the Company (As of June 30, 2025) | Name of Shareholder | Capacity/Nature of Interest | Number of Shares (L) | Approximate % of the Company | | :--- | :--- | :--- | :--- | | Chun Wo Overseas | Beneficial owner | 519,649,500 | 64.95% | | Asia Allied Infrastructure | Interest in controlled corporation | 519,649,500 | 64.95% | | Ms. Li Wai Han | Interest in controlled corporation | 519,649,500 | 64.95% | | R5A Group Limited | Beneficial owner | 80,000,000 | 10.00% | - Chun Wo Overseas is a wholly-owned subsidiary of Asia Allied Infrastructure, which is **53.01%** owned by GT Winners[71](index=71&type=chunk) - Mr. Pang Yat Ting and Ms. Li Wai Han each own **45%** of GT Winners, and are thus deemed to have relevant interests[71](index=71&type=chunk) [Share Option Scheme](index=24&type=section&id=Share%20Option%20Scheme) A share option scheme adopted on **October 24, 2017**, incentivizes participants with specific exercise prices, vesting periods, and a ten-year validity, with no activity this period - The share option scheme was adopted on **October 24, 2017**, aiming to incentivize eligible participants who contribute to the Group's business[70](index=70&type=chunk) - The exercise price of share options shall not be less than the highest of the closing price on the grant date, the average closing price for the preceding five business days, and the nominal value of the shares[72](index=72&type=chunk) - The vesting period for share options shall not be less than **12 months**, with a validity period of **ten years**. No share options were granted, exercised, lapsed, or cancelled during the reporting period[73](index=73&type=chunk) - The total number of shares that may be issued under the share option scheme shall not exceed **10%** of the issued shares (**80,000,000 shares**)[73](index=73&type=chunk) [Competing Interests](index=25&type=section&id=Competing%20Interests) No competing business or interests from Directors, controlling shareholders, or their associates were identified during the period - The Directors found no interests competing with the Group's business[75](index=75&type=chunk) - The controlling shareholders entered into a non-competition deed on **October 24, 2017**[75](index=75&type=chunk) [Corporate Governance Code](index=26&type=section&id=Corporate%20Governance%20Code) The company fully complied with all code provisions of the GEM Listing Rules' Corporate Governance Code during the period, with no deviations - The company has consistently complied with all code provisions of the Corporate Governance Code under Appendix C1 of the GEM Listing Rules, with no deviations[76](index=76&type=chunk) [Directors' Securities Transactions](index=26&type=section&id=Directors%27%20Securities%20Transactions) The company adopted a code of conduct for Directors' securities transactions, with all Directors confirming compliance and no breaches identified - The company has adopted a code of conduct for Directors' securities transactions, and all Directors confirm compliance[77](index=77&type=chunk) - The company requires employees or directors/employees of subsidiaries who may possess inside information to adhere to the same trading restrictions[77](index=77&type=chunk) [Interim Dividend and Closure of Register of Members](index=26&type=section&id=Interim%20Dividend%20and%20Closure%20of%20Register%20of%20Members) An interim dividend of **HK$0.56 cents** per share is payable by **September 29, 2025**, with the register of members closed from **September 11-15** for eligibility - An interim dividend of **HK$0.56 cents** per ordinary share was declared, payable on or before **September 29, 2025**[78](index=78&type=chunk) - To qualify for the interim dividend, the register of members will be closed from **September 11 to September 15, 2025**[79](index=79&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=27&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company%27s%20Listed%20Securities) Neither the company nor its subsidiaries purchased, sold, or redeemed any listed securities during the period - Neither the company nor its subsidiaries engaged in the purchase, sale, or redemption of listed securities during the reporting period[80](index=80&type=chunk) [Review by Audit Committee](index=27&type=section&id=Review%20by%20Audit%20Committee) The Audit Committee reviewed the unaudited financial information, confirming compliance with accounting standards and GEM Listing Rules, without auditor review - The financial information in this announcement has not been audited or reviewed by the auditor[81](index=81&type=chunk) - The Audit Committee has reviewed the financial information and considers it to comply with applicable accounting standards and the GEM Listing Rules[81](index=81&type=chunk) [Board of Directors](index=27&type=section&id=Board%20of%20Directors) The Board comprises five executive and four independent non-executive directors, chaired by Dr. Engineer Pang Yat Ting, JP - The Board of Directors consists of **five executive directors** and **four independent non-executive directors**, chaired by Dr. Engineer Pang Yat Ting, JP[82](index=82&type=chunk) [Publication of Announcement](index=27&type=section&id=Publication%20of%20Announcement) This announcement will be published on the HKEX and company websites for at least seven days - This announcement will be published on the HKEX and company websites for at least **seven days**[83](index=83&type=chunk)

[Corporate Information](index=3&type=section&id=Corporate%20Information) [Key Personnel and Committees](index=3&type=section&id=Key%20Personnel%20and%20Committees) This section details the company's key personnel, including executive and independent non-executive directors, and outlines the composition and chairpersons of its main committees - Executive Directors include Mr. Li Chenghua (Co-Chairman and CEO), Mr. Wei Dongjin (Co-Chairman), and Mr. Chen Liming[4](index=4&type=chunk)[5](index=5&type=chunk) - Independent Non-Executive Directors are Ms. Zhang Baowen, Ms. Qiu Yanhong, and Dr. Wang Hui[4](index=4&type=chunk)[5](index=5&type=chunk) - Key committee chairpersons are: Audit Committee (**Dr. Wang Hui**), Remuneration Committee (**Ms. Zhang Baowen**), Nomination Committee (**Ms. Qiu Yanhong**), and Investment Committee (**Dr. Wang Hui**)[4](index=4&type=chunk)[5](index=5&type=chunk)[6](index=6&type=chunk)[7](index=7&type=chunk) [Company Details and Contact Information](index=4&type=section&id=Company%20Details%20and%20Contact%20Information) This section provides essential company details, including registered office, principal business locations, share registrar, key bankers, website, and stock code - The company's registered office is in the Cayman Islands, with its headquarters and principal place of business in China located in Panyu District, Guangzhou[6](index=6&type=chunk)[7](index=7&type=chunk) - The principal place of business in Hong Kong is located at MassMutual Tower, Gloucester Road, Wan Chai[7](index=7&type=chunk) - The company's stock code is **2521**, and its website is **www.gzshqj.com**[9](index=9&type=chunk) [Management Discussion and Analysis](index=6&type=section&id=Management%20Discussion%20and%20Analysis) [Business Review](index=6&type=section&id=Business%20Review) The Group, a cleaning and maintenance service provider in Guangdong, reported **RMB 358.8 million** in revenue and **RMB 7.9 million** in profit for H1 2025, with gross profit margin improving from **9.8% to 16.8%** due to increased revenue - The Group is a cleaning and maintenance service provider in Guangdong Province, China[10](index=10&type=chunk)[13](index=13&type=chunk) Key Financial Data Comparison for H1 2025 (RMB million) | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Total Revenue | 358.8 | N/A | | Profit for the Period | 7.9 | N/A | | Gross Profit | 60.2 | 32.0 | | Gross Profit Margin | 16.8% | 9.8% | - The increase in gross profit margin was primarily due to increased revenue[11](index=11&type=chunk)[13](index=13&type=chunk) [Outlook](index=6&type=section&id=Outlook) Leveraging China's economic and urbanization growth, the Group plans to expand its cleaning and maintenance services into new high-demand regions, particularly the Greater Bay Area, through organic growth and strategic acquisitions to secure large infrastructure projects - The Group plans to replicate its business model in other regions of China with high demand for property cleaning services[12](index=12&type=chunk)[14](index=14&type=chunk) - Expansion will occur through organic growth and potential acquisitions/investments in cleaning and maintenance service providers within the Greater Bay Area to broaden customer base and geographical coverage[12](index=12&type=chunk)[14](index=14&type=chunk) - The goal is to provide cleaning services for future large-scale infrastructure projects[12](index=12&type=chunk)[14](index=14&type=chunk) [Financial Review](index=7&type=section&id=Financial%20Review) The Group saw revenue growth and improved gross profit margins in H1 2025, driven by more property cleaning projects, but net profit and margin declined due to fair value losses on financial assets [Revenue](index=7&type=section&id=Revenue) For H1 2025, the Group's revenue grew by **10.1%** to **RMB 358.8 million**, with property cleaning services contributing **95.8%** of the total, driven by an increase in project numbers Revenue Composition for H1 2025 | Service Type | Percentage | | :--- | :--- | | Property Cleaning Services | 95.8% | | Public Space Cleaning Services | 4.2% | Revenue Year-on-Year Growth (RMB million) | Metric | H1 2025 | H1 2024 | Year-on-Year Growth | | :--- | :--- | :--- | :--- | | Revenue | 358.8 | 325.8 | 10.1% | - The increase in revenue was primarily due to an increase in the number of property cleaning service projects[16](index=16&type=chunk)[19](index=19&type=chunk) [Cost of services](index=7&type=section&id=Cost%20of%20services) Cost of services rose by **1.7%** to **RMB 298.6 million**, mainly due to higher employee benefits and subcontracting labor costs to support increased project volume Cost of Services Year-on-Year Growth (RMB million) | Metric | H1 2025 | H1 2024 | Year-on-Year Growth | | :--- | :--- | :--- | :--- | | Cost of Services | 298.6 | 293.7 | 1.7% | - The increase in cost of services was primarily due to higher employee benefit expenses and subcontracting labor costs, consistent with the increased manpower required for a greater number of projects[17](index=17&type=chunk)[20](index=20&type=chunk) [Gross profit and gross profit margin](index=7&type=section&id=Gross%20profit%20and%20gross%20profit%20margin) Gross profit surged by **88.1%** to **RMB 60.2 million**, and gross profit margin improved from **9.8% to 16.78%**, primarily driven by increased revenue Gross Profit and Gross Profit Margin Year-on-Year Change | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Gross Profit | 60.2 | 32.0 | +88.1% | | Gross Profit Margin | 16.78% | 9.8% | +6.98 pp | - The increase in gross profit and gross profit margin was primarily due to increased revenue[18](index=18&type=chunk)[21](index=21&type=chunk) [Other income, net](index=8&type=section&id=Other%20income%2C%20net) Other income, net, increased by **116.7%** to **RMB 2.6 million**, primarily driven by higher rental income Other Income, Net Year-on-Year Growth (RMB million) | Metric | H1 2025 | H1 2024 | Year-on-Year Growth | | :--- | :--- | :--- | :--- | | Other Income, Net | 2.6 | 1.2 | 116.7% | - The increase in other income was primarily due to increased rental income[22](index=22&type=chunk)[27](index=27&type=chunk) [Selling and marketing expenses](index=8&type=section&id=Selling%20and%20marketing%20expenses) Selling and marketing expenses rose by **22.9%** to **RMB 4.3 million**, reflecting increased marketing and bidding costs aligned with the Group's business expansion Selling and Marketing Expenses Year-on-Year Growth (RMB million) | Metric | H1 2025 | H1 2024 | Year-on-Year Growth | | :--- | :--- | :--- | :--- | | Selling and Marketing Expenses | 4.3 | 3.5 | 22.9% | - The increase was due to higher marketing and entertainment expenses, as well as bidding expenses, consistent with the Group's business expansion[23](index=23&type=chunk)[28](index=28&type=chunk) [General and administrative expenses](index=8&type=section&id=General%20and%20administrative%20expenses) General and administrative expenses increased by **18.0%** to **RMB 21.6 million**, mainly due to higher staff and office costs General and Administrative Expenses Year-on-Year Growth (RMB million) | Metric | H1 2025 | H1 2024 | Year-on-Year Growth | | :--- | :--- | :--- | :--- | | General and Administrative Expenses | 21.6 | 18.3 | 18.0% | - The increase was primarily due to higher staff costs and office expenses[24](index=24&type=chunk)[29](index=29&type=chunk) [Finance expenses, net](index=8&type=section&id=Finance%20expenses%2C%20net) Net finance expenses improved from an **RMB 183 thousand** expense in H1 2024 to an **RMB 10 thousand** income in H1 2025, driven by increased interest income Net Finance Expenses Year-on-Year Change (RMB thousand) | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Net Finance Expenses | 10 (Income) | (183) (Expense) | - The change was due to increased interest income[25](index=25&type=chunk)[30](index=30&type=chunk) [Income tax expenses](index=8&type=section&id=Income%20tax%20expenses) Income tax expenses significantly increased to **RMB 4.0 million**, primarily due to higher taxable profit Income Tax Expenses Year-on-Year Growth (RMB million) | Metric | H1 2025 | H1 2024 | Year-on-Year Growth | | :--- | :--- | :--- | :--- | | Income Tax Expenses | 4.0 | 1.1 | +263.6% | - The increase in income tax expenses was due to higher taxable profit[26](index=26&type=chunk)[31](index=31&type=chunk) [Net profit and net profit margin](index=9&type=section&id=Net%20profit%20and%20net%20profit%20margin) Net profit decreased by **22.5%** to **RMB 7.9 million**, with net profit margin falling from **3.1% to 2.2%**, mainly due to fair value losses on financial assets, partially offset by revenue growth Net Profit and Net Profit Margin Year-on-Year Change | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Net Profit | 7.9 | 10.2 | -22.5% | | Net Profit Margin | 2.2% | 3.1% | -0.9 pp | - The decrease was due to fair value losses recognized on financial assets at fair value through profit or loss, partially offset by increased revenue[32](index=32&type=chunk)[34](index=34&type=chunk) [Capital structure](index=9&type=section&id=Capital%20structure) The Group successfully placed **193,755,000** new shares on June 16, 2025, raising **HK$ 47.60 million** net, allocated for waste recycling, acquisitions, and general working capital - On June 16, 2025, **193,755,000** new shares were successfully placed at **HK$0.250** per share[33](index=33&type=chunk)[35](index=35&type=chunk) - The net proceeds from the placement amounted to approximately **HK$47.60 million**[33](index=33&type=chunk)[35](index=35&type=chunk) - The proceeds are intended for: (1) **50%** capital injection into Tianyou Shenghui for waste recycling business development; (2) **10%** for investment or acquisition of potential cleaning and maintenance service providers in China and Hong Kong; and (3) **40%** for general working capital[33](index=33&type=chunk)[35](index=35&type=chunk) - The proceeds are expected to be fully utilized by or before May 19, 2027[33](index=33&type=chunk)[35](index=35&type=chunk) [Liquidity and financial resources](index=10&type=section&id=Liquidity%20and%20financial%20resources) As of June 30, 2025, the Group reported **RMB 436.6 million** in net assets, **RMB 106.4 million** in cash and equivalents, and **RMB 50.0 million** in total borrowings, indicating a sound liquidity position Liquidity and Financial Resources Comparison (RMB million) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Net Assets | 436.6 | 384.9 | | Cash, Bank Balances, and Restricted Bank Deposits | 106.4 | 92.5 | | Total Borrowings (including lease liabilities and bank borrowings) | 50.0 | 52.0 | Key Financial Ratios Comparison | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Current Ratio (times) | 2.6 | 2.3 | | Debt-to-Asset Ratio (%) | 11.5 | 15.5 | | Net Debt-to-Equity Ratio (%) | Net Cash | Net Cash | [Capital expenditure and commitments](index=11&type=section&id=Capital%20expenditure%20and%20commitments) Capital expenditure for H1 2025 was approximately **RMB 1.0 million**, mainly for property, plant, and equipment, a significant decrease year-on-year, with no capital commitments at period-end Capital Expenditure Comparison (RMB million) | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Capital Expenditure | 1.0 | 4.6 | - Capital expenditure primarily included expenses for the purchase of property, plant, and equipment[40](index=40&type=chunk)[44](index=44&type=chunk) - As of June 30, 2025, no capital commitments were incurred[40](index=40&type=chunk)[44](index=44&type=chunk) [Pledge of assets](index=11&type=section&id=Pledge%20of%20assets) As of June 30, 2025, the Group had not pledged any assets as collateral for any financing - As of June 30, 2025, the Group had not pledged any assets as collateral for any financing granted to the Group[41](index=41&type=chunk)[45](index=45&type=chunk) [Contingent liabilities](index=11&type=section&id=Contingent%20liabilities) As of June 30, 2025, and December 31, 2024, the Group had no significant contingent liabilities - The Group had no significant contingent liabilities as of June 30, 2025, and December 31, 2024[42](index=42&type=chunk)[46](index=46&type=chunk) [Treasury policies](index=11&type=section&id=Treasury%20policies) The Group maintains a prudent treasury policy, with management actively monitoring liquidity to ensure its financial structure meets funding requirements - The Group adopts a prudent treasury policy[43](index=43&type=chunk)[47](index=47&type=chunk) - Management closely monitors liquidity to ensure the liquidity structure can meet funding requirements[43](index=43&type=chunk)[47](index=47&type=chunk) [Foreign exchange exposure](index=12&type=section&id=Foreign%20exchange%20exposure) With most financial assets and liabilities denominated in RMB, the Group's foreign exchange risk is negligible, though management monitors and may consider hedging if risks become significant, subject to Chinese government regulations - The vast majority of the Group's financial assets and liabilities are primarily denominated in RMB[48](index=48&type=chunk)[52](index=52&type=chunk) - Foreign exchange risk is negligible for the Group, and no foreign currency hedging is currently undertaken[48](index=48&type=chunk)[52](index=52&type=chunk) - Management will closely monitor foreign exchange exposure and consider hedging if it becomes significant[48](index=48&type=chunk)[52](index=52&type=chunk) - RMB conversion to foreign currencies is subject to government-enforced foreign exchange control regulations and rules[49](index=49&type=chunk)[53](index=53&type=chunk) [Interest rate exposure](index=12&type=section&id=Interest%20rate%20exposure) The Group's interest rate risk stems from floating-rate bank deposits and fixed-rate bank borrowings, with management monitoring and considering hedging significant exposures as needed - Interest rate risk primarily arises from cash flow interest rate risk associated with floating-rate restricted bank deposits and bank balances, as well as fixed-rate bank borrowings[50](index=50&type=chunk)[54](index=54&type=chunk) - Management monitors interest rate risk and will consider hedging significant exposures when necessary[50](index=50&type=chunk)[54](index=54&type=chunk) [Use of proceeds from the global offering](index=12&type=section&id=Use%20of%20proceeds%20from%20the%20global%20offering) The company's November 2023 global offering yielded **HK$ 73.5 million** net proceeds; as of June 30, 2025, **HK$ 23.7 million** was utilized, with **HK$ 49.8 million** remaining for new offices and service enhancements, expected to be fully used by December 2026 - The net proceeds from the global offering amounted to approximately **HK$73.5 million**[51](index=51&type=chunk)[55](index=55&type=chunk) Planned Use and Utilization of Global Offering Proceeds (As of June 30, 2025) | Intended Use | Planned Allocation (HK$ million) | Amount Utilized (HK$ million) | Amount Unutilized (HK$ million) | Expected Full Utilization Timeline | | :--- | :--- | :--- | :--- | :--- | | New Branch Offices | 36.0 | – | 36.0 | December 2026 | | Acquisition or Investment in Environmental Cleaning and Maintenance Service Providers | 15.7 | 15.7 | – | December 2026 | | Strengthening Service Capabilities in the Public Space Cleaning Sector | 14.3 | 5.8 | 8.5 | December 2026 | | Adopting Technological Reforms and Upgrading IT Systems | 5.6 | 1.3 | 4.3 | December 2026 | | Expanding Marketing Department | 1.8 | 0.8 | 1.0 | December 2026 | | General Working Capital | 0.1 | 0.1 | – | | | **Total** | **73.5** | **23.7** | **49.8** | | [Significant investments held and material acquisitions and disposals](index=14&type=section&id=Significant%20investments%20held%20and%20material%20acquisitions%20and%20disposals) In H1 2025, the Group made two significant investments: acquiring two Hong Kong property management companies for **HK$ 15 million** and increasing its stake in BTI to **25%** for **RMB 15.752 million**, entering waste recycling and environmental materials [Acquisition of Target Companies](index=14&type=section&id=Acquisition%20of%20Target%20Companies) On April 28, 2025, the Company agreed to acquire 100% of Fuyu and Fuhui Property Management for **HK$ 15 million** (approx. **RMB 13.7 million**), completing the acquisition on June 30, 2025, to expand Hong Kong property management services - On April 28, 2025, the acquisition of **100%** of the issued share capital of Fuyu Property Management Co., Ltd. and Fuhui Property Management Co., Ltd. ("Target Companies") was agreed upon[58](index=58&type=chunk)[62](index=62&type=chunk) - The acquisition consideration was **HK$15 million** (equivalent to approximately **RMB13.7 million**)[58](index=58&type=chunk)[62](index=62&type=chunk) - The acquisition was completed on June 30, 2025, with the Target Companies primarily engaged in providing property management services in Hong Kong[58](index=58&type=chunk)[62](index=62&type=chunk) [Acquisition of BTI](index=14&type=section&id=Acquisition%20of%20BTI) In H1 2025, the Group acquired an additional **4,375,425** shares in BTI for approximately **RMB 15.752 million**, increasing its stake to **25%** and classifying it as an interest in an associate, focusing on waste recycling and biodegradable materials - During H1 2025, the Group further acquired **4,375,425** shares of Shenzhen Bestar Excellent Technology Co., Ltd. ("Bestar") for approximately **RMB15,752,000**[60](index=60&type=chunk)[64](index=64&type=chunk) - As of June 30, 2025, the Group held a **25%** stake in Bestar's total issued shares, with this investment classified as an interest in an associate[61](index=61&type=chunk)[64](index=64&type=chunk) - Bestar primarily engages in recycling waste materials for packaging production, and the design, manufacture, and sale of biodegradable environmental materials[60](index=60&type=chunk)[64](index=64&type=chunk) [Future plans for material investments or capital assets](index=15&type=section&id=Future%20plans%20for%20material%20investments%20or%20capital%20assets) As of June 30, 2025, the Group had no specific future plans for material investments or capital assets beyond those already disclosed - As of June 30, 2025, there were no specific plans for material investments or capital assets, other than those disclosed in the prospectus and this report[65](index=65&type=chunk)[68](index=68&type=chunk) [Human resources](index=15&type=section&id=Human%20resources) For H1 2025, total employee benefit expenses were **RMB 186.1 million**, with staff increasing to **8,068**; remuneration is performance-based, supported by social insurance, training, and a share option scheme Employee Benefit Expenses and Headcount Comparison | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Total Employee Benefit Expenses (RMB million) | 186.1 | 178.0 | | Employee Headcount (as of June 30) | 8,068 | 7,169 | - Remuneration for each employee is determined based on individual responsibilities, capabilities and skills, experience and performance, and market compensation levels[66](index=66&type=chunk)[69](index=69&type=chunk) - All Group employees participate in China's employee social insurance scheme, are provided with or arranged for regular training programs, and a share option scheme has been adopted to provide incentives and rewards to employees[66](index=66&type=chunk)[69](index=69&type=chunk) [Events after reporting period](index=15&type=section&id=Events%20after%20reporting%20period) No other significant events that could affect the Group have occurred since the end of the six months ended June 30, 2025 - Other than those disclosed in this report, no other significant events that could affect the Group have occurred since the end of the six months ended June 30, 2025[67](index=67&type=chunk)[70](index=70&type=chunk) [Unaudited Condensed Consolidated Statement of Comprehensive Income](index=16&type=section&id=Unaudited%20Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) This statement presents the Group's H1 2025 unaudited financial performance, showing **RMB 358.8 million** revenue, **RMB 60.2 million** gross profit, and **RMB 7.9 million** profit for the period, with basic and diluted EPS of **RMB 0.45 cents**, impacted by fair value losses on financial assets Unaudited Condensed Consolidated Statement of Comprehensive Income (For the six months ended June 30, 2025) | Metric | 2025 (RMB'000) | 2024 (RMB'000) | | :--- | :--- | :--- | | Revenue | 358,829 | 325,779 | | Cost of Services | (298,629) | (293,741) | | Gross Profit | 60,200 | 32,038 | | Selling and Marketing Expenses | (4,319) | (3,537) | | General and Administrative Expenses | (21,589) | (18,257) | | Fair value loss on financial assets at fair value through profit or loss | (25,394) | – | | Share of results of an associate | 443 | – | | Other income, net | 2,560 | 1,207 | | Finance expenses, net | 10 | (183) | | Profit before income tax | 11,911 | 11,268 | | Income tax expenses | (3,968) | (1,113) | | **Profit and total comprehensive income for the period** | **7,943** | **10,155** | | Basic and diluted earnings per share (RMB cents) | 0.45 | 0.62 | [Unaudited Condensed Consolidated Statement of Financial Position](index=17&type=section&id=Unaudited%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) This statement outlines the Group's unaudited financial position as of June 30, 2025, with total assets of **RMB 635.9 million**, total equity of **RMB 436.4 million**, and total liabilities of **RMB 199.6 million**, noting the addition of interests in associates and the reclassification of financial assets Unaudited Condensed Consolidated Statement of Financial Position (As of June 30, 2025) | Metric | June 30, 2025 (RMB'000) | December 31, 2024 (RMB'000) | | :--- | :--- | :--- | | **Assets** | | | | Non-current assets | 180,197 | 189,822 | | Property, plant and equipment | 34,661 | 36,200 | | Investment properties | 854 | 905 | | Interest in an associate | 91,961 | – | | Right-of-use assets | 17,756 | 17,908 | | Financial assets at fair value through profit or loss | – | 101,160 | | Deferred income tax assets | 7,442 | 6,653 | | Deposits and prepayments (non-current) | 27,523 | 26,996 | | Current assets | 455,771 | 380,501 | | Trade and other receivables and prepayments | 349,399 | 287,969 | | Restricted bank deposits | 1,423 | 1,423 | | Cash and cash equivalents | 104,949 | 91,109 | | **Total assets** | **635,968** | **570,323** | | **Equity** | | | | Equity attributable to owners of the Company | 436,386 | 384,902 | | Share capital | 17,721 | 15,953 | | Reserves | 418,665 | 368,949 | | **Total equity** | **436,386** | **384,902** | | **Liabilities** | | | | Non-current liabilities | 23,410 | 20,818 | | Deferred tax liabilities | 9,018 | 6,538 | | Lease liabilities (non-current) | 14,392 | 14,280 | | Current liabilities | 176,172 | 164,603 | | Trade and other payables | 122,549 | 102,869 | | Current income tax payable | 18,014 | 16,265 | | Bank borrowings | 30,120 | 39,174 | | Lease liabilities (current) | 5,489 | 5,755 | | **Total liabilities** | **199,582** | **185,421** | | **Total equity and liabilities** | **635,968** | **570,323** | - Non-current assets saw the addition of **RMB91,961 thousand** in interest in an associate, while financial assets at fair value through profit or loss decreased from **RMB101,160 thousand** to zero[76](index=76&type=chunk) [Unaudited Condensed Consolidated Statements of Changes in Equity](index=19&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Equity) This statement summarizes the Group's equity changes for H1 2025, with total equity increasing from **RMB 384.9 million** to **RMB 436.4 million**, primarily driven by profit for the period and proceeds from new share placements Unaudited Condensed Consolidated Statements of Changes in Equity (For the six months ended June 30, 2025) | Metric | Share Capital (RMB'000) | Reserves (RMB'000) | Total (RMB'000) | | :--- | :--- | :--- | :--- | | Balance at January 1, 2025 | 15,953 | 368,949 | 384,902 | | Profit for the period | – | 7,943 | 7,943 | | Placement of new shares | 1,768 | 41,773 | 43,541 | | **Balance at June 30, 2025** | **17,721** | **418,665** | **436,386** | - The increase in total equity was primarily driven by profit for the period (**RMB7,943 thousand**) and proceeds from the placement of new shares (**RMB43,541 thousand**)[81](index=81&type=chunk) [Unaudited Condensed Consolidated Statements of Cash Flows](index=20&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This statement shows the Group's H1 2025 unaudited cash flows, with net cash outflows from operating and investing activities offset by significant net cash inflows from financing, primarily share issuance, resulting in a **RMB 13.8 million** net increase in cash and cash equivalents Unaudited Condensed Consolidated Statements of Cash Flows (For the six months ended June 30, 2025) | Metric | 2025 (RMB'000) | 2024 (RMB'000) | | :--- | :--- | :--- | | Net cash used in operating activities | (2,569) | (55,722) | | Net cash used in investing activities | (15,919) | (4,553) | | Net cash generated from financing activities | 32,328 | 10,938 | | **Net increase/(decrease) in cash and cash equivalents** | **13,840** | **(49,337)** | | Cash and cash equivalents at end of period | 104,949 | 99,236 | - Net cash generated from financing activities significantly increased, primarily due to proceeds from the issuance of shares[83](index=83&type=chunk) [Notes to the Condensed Consolidated Interim Financial Statements](index=21&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Interim%20Financial%20Statements) [1 Corporate Information](index=21&type=section&id=1%20Corporate%20Information) Shenghui Cleaning Group Holdings Limited, incorporated in the Cayman Islands in 2021 and listed on the HKEX in December 2023, is an investment holding company primarily providing cleaning and maintenance services in China, jointly controlled by Mr. Li Chenghua and Mr. Chen Liming, with financial statements presented in RMB - The Company was incorporated in the Cayman Islands on January 4, 2021, and listed on the Main Board of The Stock Exchange of Hong Kong Limited on December 5, 2023[85](index=85&type=chunk)[87](index=87&type=chunk) - The Group is principally engaged in providing cleaning and maintenance services in China[86](index=86&type=chunk)[87](index=87&type=chunk) - The controlling shareholders of the Company are Mr. Li Chenghua and Mr. Chen Liming[86](index=86&type=chunk)[87](index=87&type=chunk) [2 Principal Accounting Policies](index=22&type=section&id=2%20Principal%20Accounting%20Policies) The Group's unaudited condensed consolidated financial statements adhere to HKAS 34 and Listing Rules, with accounting policies consistent with 2024, incorporating new HFRS effective January 1, 2025, which are not expected to materially impact the statements - The unaudited condensed consolidated financial statements are prepared in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting" issued by the Hong Kong Institute of Certified Public Accountants and the applicable disclosure requirements under the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited[88](index=88&type=chunk)[91](index=91&type=chunk) - The accounting policies and methods of computation used are consistent with those followed in the preparation of the Group's annual financial statements for the year ended December 31, 2024, except for the adoption of new and revised Hong Kong Financial Reporting Standards issued by the HKICPA that are mandatorily effective for annual periods beginning on or after January 1, 2025[89](index=89&type=chunk)[91](index=91&type=chunk) - All new and revised Hong Kong Financial Reporting Standards are not expected to have a significant impact on the Group's condensed consolidated interim financial statements[93](index=93&type=chunk)[95](index=95&type=chunk) [3 Revenue and Segment Information](index=24&type=section&id=3%20Revenue%20and%20Segment%20Information) The Group operates as a single segment, providing cleaning and maintenance services entirely within China, with revenue recognized over time based on service progress, and no significant contract assets or liabilities recognized as of June 30, 2025 - The Group is principally engaged in providing cleaning and maintenance services in China, and the chief operating decision maker reviews the operating results of the business as a single operating segment[97](index=97&type=chunk)[98](index=98&type=chunk) - For the period ended June 30, 2025, all of the Group's revenue was derived from China[102](index=102&type=chunk)[108](index=108&type=chunk) - Revenue is recognized at the amount of consideration the Group expects to be entitled to, and when control of services is transferred over time, revenue is recognized over the contract period with reference to the progress towards complete satisfaction of the performance obligation[112](index=112&type=chunk)[113](index=113&type=chunk)[114](index=114&type=chunk) - No significant contract assets or liabilities were recognized at the end of each reporting period ended June 30, 2025[104](index=104&type=chunk)[105](index=105&type=chunk)[109](index=109&type=chunk)[110](index=110&type=chunk) [4 Expenses by Nature](index=28&type=section&id=4%20Expenses%20by%20Nature) This section details the Group's expenses for H1 2025, including employee benefits, subcontracting labor, cleaning materials, depreciation, and short-term lease expenses Expenses by Nature (For the six months ended June 30, 2025) | Metric | 2025 (RMB'000) | 2024 (RMB'000) | | :--- | :--- | :--- | | Employee benefit expenses (including directors' emoluments) | | | | – Salaries, wages and bonuses | 178,281 | 169,899 | | – Social insurance and housing provident fund contributions | 7,264 | 7,559 | | – Other employee benefits | 551 | 499 | | Subcontracting labor costs | 97,265 | 99,733 | | Cost of cleaning materials consumed | 7,893 | 8,137 | | Depreciation | 1,906 | 1,757 | | Short-term lease expenses | 2,827 | 1,234 | [5 Other Income, Net](index=29&type=section&id=5%20Other%20Income%2C%20Net) For H1 2025, the Group's other income, net, was **RMB 2.560 million**, mainly from rental income recognized on a straight-line basis over the lease term Composition of Other Income, Net (For the six months ended June 30, 2025) | Metric | 2025 (RMB'000) | 2024 (RMB'000) | | :--- | :--- | :--- | | Rental income | 2,532 | 1,324 | | VAT refunds | – | 751 | | Donations | – | (900) | | Others | 28 | 32 | | **Total** | **2,560** | **1,207** | - Rental income from investment properties and leased shops is recognized on a straight-line basis over the term of the lease agreements; rental income from leased car parks is recognized over the lease period[127](index=127&type=chunk) [6 Finance Income/(Expenses), Net](index=29&type=section&id=6%20Finance%20Income%2F%28Expenses%29%2C%20Net) For H1 2025, the Group reported net finance income of **RMB 10 thousand**, an improvement from a **RMB 183 thousand** net expense in H1 2024, primarily due to increased interest income Finance Income/(Expenses), Net (For the six months ended June 30, 2025) | Metric | 2025 (RMB'000) | 2024 (RMB'000) | | :--- | :--- | :--- | | Finance income - Interest income | 876 | 80 | | Finance expenses - Interest expense on bank borrowings | (607) | (59) | | Finance expenses - Interest expense on lease liabilities | (259) | (204) | | **Finance income/(expenses), net** | **10** | **(183)** | - The improvement in net finance income was primarily due to increased interest income[126](index=126&type=chunk) [7 Income Tax Expenses](index=30&type=section&id=7%20Income%20Tax%20Expenses) Income tax expenses rose to **RMB 3.968 million**, including current and deferred tax, with China operations subject to a 25% rate, though Guangzhou Shenghui benefits from a **15%** preferential rate and **100%** R&D super deduction Composition of Income Tax Expenses (For the six months ended June 30, 2025) | Metric | 2025 (RMB'000) | 2024 (RMB'000) | | :--- | :--- | :--- | | Current income tax | 2,278 | 1,083 | | Deferred income tax | 1,690 | 30 | | **Total** | **3,968** | **1,113** | - Income tax provision for the Group's China operations is calculated at the applicable tax rate of **25%**, but Guangzhou Shenghui, as a high-tech enterprise, enjoys a preferential income tax rate of **15%**, valid until December 28, 2026[130](index=130&type=chunk)[131](index=131&type=chunk)[132](index=132&type=chunk) - Guangzhou Shenghui has been eligible for a **100%** "super deduction" for research and development expenses since the 2023 financial year[136](index=136&type=chunk)[139](index=139&type=chunk) - The Group has not recognized deferred income tax assets for tax losses carried forward, as they can be carried forward for a maximum of five years[137](index=137&type=chunk)[139](index=139&type=chunk) [8 Dividend](index=31&type=section&id=8%20Dividend) For the periods ended June 30, 2025, and 2024, the Company neither paid nor declared any dividends - For the periods ended June 30, 2025, and 2024, the Company did not pay or declare any dividends[138](index=138&type=chunk)[140](index=140&type=chunk) [9 Earnings Per Share](index=32&type=section&id=9%20Earnings%20Per%20Share) For H1 2025, basic earnings per share attributable to owners was **RMB 0.45 cents**, down from **RMB 0.62 cents** in H1 2024, with diluted EPS being identical due to no potential dilutive ordinary shares Basic Earnings Per Share (For the six months ended June 30, 2025) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Profit attributable to owners of the Company (RMB'000) | 7,943 | 10,155 | | Weighted average number of ordinary shares in issue (thousand shares) | 1,772,037 | 1,625,000 | | **Basic earnings per share (RMB cents)** | **0.45** | **0.62** | - The weighted average number of ordinary shares in issue for H1 2025 has accounted for the placement of **193,755,000** shares completed on June 16, 2025[143](index=143&type=chunk) - As there were no potential dilutive ordinary shares outstanding for the periods ended June 30, 2025, and 2024, diluted earnings per share was the same as basic earnings per share[144](index=144&type=chunk)[145](index=145&type=chunk) [10 Property, Plant and Equipment](index=33&type=section&id=10%20Property%2C%20Plant%20and%20Equipment) For H1 2025, capital expenditure for property, plant, and equipment was approximately **RMB 1.043 million**, mainly for plant and machinery, a significant decrease from **RMB 4.633 million** in H1 2024 Purchase of Property, Plant and Equipment (For the six months ended June 30, 2025) | Metric | 2025 (RMB'000) | 2024 (RMB'000) | | :--- | :--- | :--- | | Purchase of property, plant and equipment | 1,043 | 4,633 | - Primarily expenses for plant and machinery[147](index=147&type=chunk)[149](index=149&type=chunk) [11 Trade and Other Receivables and Prepayments](index=33&type=section&id=11%20Trade%20and%20Other%20Receivables%20and%20Prepayments) As of June 30, 2025, net trade and other receivables and prepayments totaled **RMB 376.746 million**, with total trade receivables at **RMB 345.251 million**, of which **RMB 198.670 million** were aged within 60 days Trade and Other Receivables and Prepayments, Net (As of June 30, 2025) | Metric | June 30, 2025 (RMB'000) | December 31, 2024 (RMB'000) | | :--- | :--- | :--- | | Trade receivables (net) | 321,662 | 268,074 | | Deposits (current portion) | 5,100 | 3,648 | | Other receivables | 14,086 | 8,791 | | Prepayments | 8,375 | 7,456 | | **Trade and other receivables and prepayments, net** | **376,746** | **314,965** | Trade Receivables Aging Analysis by Invoice Date (As of June 30, 2025) | Aging | Amount (RMB'000) | | :--- | :--- | | 0 – 60 days | 198,670 | | 61 – 180 days | 53,772 | | 181 – 365 days | 42,988 | | Over 1 year | 49,821 | | **Total** | **345,251** | - The carrying amounts of trade and other receivables are all denominated in RMB and approximate their fair values[157](index=157&type=chunk)[158](index=158&type=chunk) [12 Bank Borrowing](index=34&type=section&id=12%20Bank%20Borrowing) As of June 30, 2025, bank borrowings decreased to **RMB 30.120 million** from **RMB 39.714 million** at December 31, 2024 Bank Borrowings (As of June 30, 2025) | Metric | June 30, 2025 (RMB'000) | December 31, 2024 (RMB'000) | | :--- | :--- | :--- | | Bank loans | 30,120 | 39,714 | [13 Share Capital](index=35&type=section&id=13%20Share%20Capital) The Company's issued and paid-up share capital increased due to the June 16, 2025, placement of **193,755,000** new shares, raising net proceeds of approximately **RMB 43.541 million** (approx. **HK$ 47.600 million**) Share Capital Movement (As of June 30, 2025) | Metric | Number of ordinary shares | Equivalent par value of shares (RMB) | | :--- | :--- | :--- | | January 1, 2025 | 1,755,980,000 | 15,952,605 | | Placement of new shares | 193,755,000 | 1,768,154 | | **June 30, 2025** | **1,949,735,000** | **17,720,759** | - On June 16, 2025, a total of **193,755,000** shares were placed at a placing price of **HK$0.250** per share, with net proceeds of approximately **RMB43,541,000** (equivalent to approximately **HK$47,600,000**)[162](index=162&type=chunk) [14 Trade and Other Payables](index=36&type=section&id=14%20Trade%20and%20Other%20Payables) As of June 30, 2025, total trade and other payables decreased to **RMB 88.457 million** from **RMB 107.030 million** at December 31, 2024, with most trade payables (**RMB 25.201 million**) aged within 60 days Trade and Other Payables (As of June 30, 2025) | Metric | June 30, 2025 (RMB'000) | December 31, 2024 (RMB'000) | | :--- | :--- | :--- | | Trade payables | 33,793 | 28,810 | | Other payables | 54,664 | 78,220 | | **Total trade and other payables** | **88,457** | **107,030** | Trade Payables Aging Analysis by Invoice Date (As of June 30, 2025) | Aging | Amount (RMB'000) | | :--- | :--- | | 0 – 60 days | 25,201 | | 61 – 180 days | 4,926 | | 181 – 365 days | 1,539 | | Over 1 year | 2,127 | | **Total** | **33,793** | - The carrying amounts of trade and other payables are denominated in RMB and approximate their fair values[166](index=166&type=chunk) [15 Interest in Associate](index=37&type=section&id=15%20Interest%20in%20Associate) As of June 30, 2025, the Group's **25%** interest in associate BTI was **RMB 91.961 million**, with BTI focusing on waste recycling and biodegradable materials, and the Company's Co-Chairman also serving as a BTI director and major shareholder Interest in an Associate (As of June 30, 2025) | Metric | June 30, 2025 (RMB'000) | December 31, 2024 (RMB'000) | | :--- | :--- | :--- | | Investment cost in an associate | 91,518 | – | | Share of post-acquisition results | 443 | – | | **Total** | **91,961** | **–** | - Bestar primarily engages in the business of recycling waste materials for packaging material production, and the design, manufacture, and sale of biodegradable environmental materials[171](index=171&type=chunk) - As of June 30, 2025, the Group held a **25%** beneficial interest in Bestar (December 31, 2024: **19.51%**)[172](index=172&type=chunk) - Mr. Wei Dongjin, the Company's Co-Chairman and Executive Director, is also a director and major shareholder of Bestar[173](index=173&type=chunk) [16 Commitments](index=37&type=section&id=16%20Commitments) As of June 30, 2025, the Group had no capital commitments - As of June 30, 2025, no capital commitments were incurred (December 31, 2024: nil)[172](index=172&type=chunk) [17 Related Party Transactions](index=38&type=section&id=17%20Related%20Party%20Transactions) This section discloses the Group's related party transactions and balances, including advances from controlling shareholders and key management remuneration Transactions with Controlling Shareholders (For the six months ended June 30, 2025) | Metric | 2025 (RMB'000) | 2024 (RMB'000) | | :--- | :--- | :--- | | Advances from controlling shareholders during the year | – | 4,614 | Balances Due to Controlling Shareholders (As of June 30, 2025) | Metric | June 30, 2025 (RMB'000) | December 31, 2024 (RMB'000) | | :--- | :--- | :--- | | Amounts due to Mr. Li | 21,025 | 21,025 | | Amounts due to Mr. Chen | 1,125 | 1,125 | Key Management Remuneration (For the six months ended June 30, 2025) | Metric | 2025 (RMB'000) | 2024 (RMB'000) | | :--- | :--- | :--- | | Salaries and wages | 1,247 | 1,103 | | Social insurance and housing provident fund contributions | 102 | 226 | | **Total** | **1,349** | **1,329** | [18 Financial Risk Management](index=40&type=section&id=18%20Financial%20Risk%20Management) Some of the Group's financial assets and liabilities are measured at fair value; as of June 30, 2025, listed equity shares classified as financial assets at fair value through profit or loss were zero, down from **RMB 101.160 million** at December 31, 2024 - Some of the Group's financial assets and liabilities are measured at fair value at the end of each reporting period[183](index=183&type=chunk)[184](index=184&type=chunk) Listed Equity Shares Classified as Financial Assets at Fair Value Through Profit or Loss (RMB'000) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Listed equity shares classified as financial assets at fair value through profit or loss | – | 101,160 | - The fair value of shares is estimated based on quoted prices available in active markets (Level 1)[185](index=185&type=chunk) [19 Subsequent Events](index=40&type=section&id=19%20Subsequent%20Events) No significant events requiring adjustments or additional disclosures in these consolidated financial statements have occurred after June 30, 2025 - No significant events have occurred after the period ended June 30, 2025, that would require adjustments to or additional disclosures in these consolidated financial statements[186](index=186&type=chunk)[187](index=187&type=chunk) [Other Information](index=41&type=section&id=Other%20Information) [Directors' and Chief Executives' Interests and Short Positions](index=41&type=section&id=Directors'%20and%20Chief%20Executives'%20Interests%20and%20Short%20Positions) As of June 30, 2025, Executive Directors Mr. Li Chenghua and Mr. Chen Liming each held a **30.08%** long position in the Company's shares through controlled corporations and a **100%** beneficial interest in their wholly-owned associated corporations, with no other significant interests or short positions disclosed [Long positions in the shares of the Company](index=41&type=section&id=Long%20positions%20in%20the%20shares%20of%20the%20Company) As of June 30, 2025, Mr. Li Chenghua and Mr. Chen Liming each held **586,543,750** shares, representing **30.08%** of the issued share capital, through their wholly-owned entities, and are considered a group of controlling shareholders Directors' Long Positions in the Shares of the Company (As of June 30, 2025) | Name of Director | Nature of Interest | Number of Shares Held | Percentage of Issued Share Capital | | :--- | :--- | :--- | :--- | | Mr. Li Chenghua | Interest in controlled corporation | 586,543,750 | 30.08% | | Mr. Chen Liming | Interest in controlled corporation | 586,543,750 | 30.08% | - Mr. Li and Mr. Chen are deemed to be interested in **1,173,087,500** shares, of which **586,543,750** shares are held by Fengsheng Cleaning and **586,543,750** shares are held by Sunrise Cleaning[192](index=192&type=chunk) [Long positions in the shares of associated corporations](index=43&type=section&id=Long%20positions%20in%20the%20shares%20of%20associated%20corporations) Mr. Li Chenghua wholly owns Fengsheng Cleaning, and Mr. Chen Liming wholly owns Sunrise Cleaning, both associated corporations of the Company, each holding **1** share, representing **100%** interest Directors' Long Positions in the Shares of Associated Corporations (As of June 30, 2025) | Name of Director | Name of Associated Corporation | Nature of Interest | Number of Shares Held | Percentage of Interest in Associated Corporation | | :--- | :--- | :--- | :--- | :--- | | Mr. Li | Fengsheng Cleaning | Beneficial owner | 1 | 100% | | Mr. Chen | Sunrise Cleaning | Beneficial owner | 1 | 100% | [Substantial Shareholders' Interests and Short Positions](index=44&type=section&id=Substantial%20Shareholders'%20Interests%20and%20Short%20Positions) As of June 30, 2025, Fengsheng Cleaning and Sunrise Cleaning each held a **30.08%** long position in the Company's shares; Mr. Li Chenghua, Mr. Chen Liming, and Mr. Li's spouse, Ms. Tang Yongzhen, are deemed to have interests, with no short positions disclosed Substantial Shareholders' Long Positions in the Shares of the Company (As of June 30, 2025) | Name of Shareholder/Entity | Nature of Interest | Number of Shares Held | Percentage of Issued Share Capital | | :--- | :--- | :--- | :--- | | Fengsheng Cleaning | Beneficial owner / Other (Controlling shareholder interest) | 586,543,750 | 30.08% | | Mr. Li | Interest in controlled corporation / Interest in controlled corporation | 586,543,750 | 30.08% | | Ms. Tang Yongzhen | Spouse's interest | 586,543,750 | 30.08% | | Sunrise Cleaning | Beneficial owner / Other (Controlling shareholder interest) | 586,543,750 | 30.08% | | Mr. Chen | Interest in controlled corporation / Interest in controlled corporation | 586,543,750 | 30.08% | - Mr. Li and Mr. Chen are deemed to be interested through their wholly-owned Fengsheng Cleaning and Sunrise Cleaning. Ms. Tang Yongzhen (Mr. Li's spouse) is deemed to be interested in the shares in which Mr. Li is interested under the Securities and Futures Ordinance[204](index=204&type=chunk) [Disclosure of Information on Directors](index=46&type=section&id=Disclosure%20of%20Information%20on%20Directors) This section updates the biographical details of the Company's executive and independent non-executive directors, highlighting their industry experience, academic backgrounds, and leadership roles [Executive Director](index=46&type=section&id=Executive%20Director) This section provides detailed biographies of Mr. Li Chenghua (Co-Chairman and CEO), Mr. Wei Dongjin (Co-Chairman), and Mr. Chen Liming (Executive Director), emphasizing their extensive industry experience, academic backgrounds, and key leadership roles - **Mr. Li Chenghua** (52 years old): Co-Chairman and Chief Executive Officer, one of the Group's founders, with over **26 years** of experience in cleaning service industry management and operations, formerly President of Guangzhou Panyu District Environmental Sanitation Industry Association, currently President of Guangzhou Environmental Sanitation Industry Association[205](index=205&type=chunk)[206](index=206&type=chunk)[207](index=207&type=chunk)[208](index=208&type=chunk)[209](index=209&type=chunk) - **Mr. Wei Dongjin** (47 years old): Co-Chairman, holds an Executive Master of Business Administration degree from City University of Hong Kong, with over **20 years** of experience in oil transportation, bio-based agriculture, and agricultural and forestry waste recycling related industries, currently founder, chairman, general manager, and legal representative of Shenzhen Bestar Excellent Technology Co., Ltd. (BTI)[210](index=210&type=chunk)[211](index=211&type=chunk) - **Mr. Chen Liming** (55 years old): Executive Director, one of the Group's founders, with over **24 years** of experience in cleaning service industry management and operations, responsible for the Group's strategic management and business strategy formulation, having completed several in-service courses at Sun Yat-sen University[212](index=212&type=chunk)[213](index=213&type=chunk)[215](index=215&type=chunk)[216](index=216&type=chunk)[217](index=217&type=chunk)[218](index=218&type=chunk) [Independent non-executive Director](index=50&type=section&id=Independent%20non-executive%20Director) This section details the biographies of Dr. Wang Hui, Ms. Zhang Baowen, and Ms. Qiu Yanhong, highlighting their professional backgrounds in corporate finance, law, and banking, academic qualifications, and committee roles - **Dr. Wang Hui** (46 years old): Independent Non-Executive Director, with over **25 years** of experience in corporate finance and accounting, project investment and decision-making, and risk management and control, currently Chairman of the Audit Committee and Investment Committee[219](index=219&type=chunk)[220](index=220&type=chunk)[222](index=222&type=chunk) - **Ms. Zhang Baowen** (37 years old): Independent Non-Executive Director, a practicing solicitor in Hong Kong, with over **12 years** of experience in the legal industry, currently Chairman of the Remuneration Committee[221](index=221&type=chunk)[223](index=223&type=chunk)[222](index=222&type=chunk) - **Ms. Qiu Yanhong** (38 years old): Independent Non-Executive Director, with approximately **13 years** of banking experience, specializing in securities and asset management services, currently Chairman of the Nomination Committee[224](index=224&type=chunk)[225](index=225&type=chunk)[226](index=226&type=chunk)[227](index=227&type=chunk)[228](index=228&type=chunk)[229](index=229&type=chunk) [Securities Transactions by Directors](index=52&type=section&id=Securities%20Transactions%20by%20Directors) All directors confirmed full compliance with the Model Code for Securities Transactions by Directors of Listed Issuers during the six months ended June 30, 2025 - All directors confirmed full compliance with the Standard Code and its code of conduct regarding directors' securities transactions for the six months ended June 30, 2025[232](index=232&type=chunk) [Corporate Governance](index=53&type=section&id=Corporate%20Governance) For H1 2025, the Company complied with the Corporate Governance Code, except for Mr. Li Chenghua's dual role as Co-Chairman and CEO, which the Board believes provides strong, consistent leadership in the Group's best interest - The Company complied with the Corporate Governance Code for the six months ended June 30, 2025, with the following exception[233](index=233&type=chunk)[234](index=234&type=chunk) - Deviation: Mr. Li Chenghua concurrently serves as Co-Chairman of the Board and Chief Executive Officer (Code Provision C.2.1)[233](index=233&type=chunk)[234](index=234&type=chunk) - The Directors (including the independent non-executive Directors) believe that Mr. Li is the most suitable person to hold both positions, and the current structure facilitates strong and consistent leadership, aligning with the best overall interests of the Group and the Company's shareholders[233](index=233&type=chunk)[234](index=234&type=chunk) [Share Option Scheme](index=54&type=section&id=Share%20Option%20Scheme) The Company adopted a share option scheme on November 14, 2023, to attract and incentivize talent, with exercise prices determined by the Board and limits on total shares and individual participation; as of June 30, 2025, no options were outstanding or active - The Company adopted a share option scheme on November 14, 2023[235](index=235&type=chunk)[236](index=236&type=chunk) - The scheme aims to attract and retain the most competent personnel and provide additional incentives to the Group's employees, directors, consultants, advisors, distributors, contractors, suppliers, agents, and service providers[235](index=235&type=chunk)[236](index=236&type=chunk) - The exercise price is determined by the Board at its sole discretion and shall not be less than the higher of the closing price of the shares as stated in the daily quotation sheet of the Stock Exchange on the offer date, the average closing price as stated in the daily quotation sheet of the Stock Exchange for the five business days immediately preceding the offer date, and the nominal value of the shares on the offer date[238](index=238&type=chunk)[241](index=241&type=chunk) - The total number of shares that may be issued upon exercise of all options granted under the Share Option Scheme and any other share option schemes and share award schemes of the Company shall not exceed **10%** of the total number of shares in issue on the Listing Date (i.e., a maximum of **162,500,000** shares as of December 31, 2023)[239](index=239&type=chunk)[241](index=241&type=chunk) - The Share Option Scheme will remain valid for **10 years** from November 14, 2023[243](index=243&type=chunk)[247](index=247&type=chunk) - As of June 30, 2025, no share options were outstanding, granted, cancelled, exercised, or lapsed[243](index=243&type=chunk)[248](index=248&type=chunk) [Management Contracts](index=56&type=section&id=Management%20Contracts) During the reporting period, the Company had no management or administration contracts for its business, in whole or in any substantial part - During the reporting period, the Company had not entered into or had any contracts concerning the management and administration of the whole or any substantial part of its business[244](index=244&type=chunk)[249](index=249&type=chunk) [Purchase, Sale or Redemption of the Listed Securities of the Company](index=56&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Listed%20Securities%20of%20the%20Company) For the six months ended June 30, 2025, neither the Company nor its subsidiaries purchased, sold, or redeemed any of the Company's listed securities - For the six months ended June 30, 2025, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[245](index=245&type=chunk)[250](index=250&type=chunk) [Audit Committee](index=57&type=section&id=Audit%20Committee) The Audit Committee reviewed the Group's unaudited condensed financial results for H1 2025, discussed accounting principles with management, and raised no objections to the financial statements or interim report - The Audit Committee has reviewed the Group's unaudited condensed financial results for the six months ended June 30, 2025, and discussed the accounting principles and practices adopted by the Group with the Company's management[251](index=251&type=chunk)[252](index=252&type=chunk) - The Audit Committee had no objections[251](index=251&type=chunk)[252](index=252&type=chunk)

Company Announcements and Financial Summary This section details recent corporate announcements and provides a financial overview, highlighting increased losses and a significant rise in cash and cash equivalents [Announcement Information](index=1&type=section&id=1.1%20%E5%85%AC%E5%91%8A%E4%BF%A1%E6%81%AF) Visen Pharmaceuticals released its unaudited condensed consolidated interim results for the six months ended June 30, 2025, and announced directorate and audit committee changes - The company released its unaudited condensed consolidated interim results announcement for the six months ended June 30, 2025[2](index=2&type=chunk) - The announcement also included the resignation of a non-executive director, appointment of an independent non-executive director, and changes to the audit committee composition[2](index=2&type=chunk) [Financial Summary](index=1&type=section&id=1.2%20%E8%B4%A2%E5%8A%A1%E6%A6%82%E8%A6%81) For the six months ended June 30, 2025, the company's R&D costs and administrative expenses increased, leading to an expanded loss of **RMB 118 million**, while cash and cash equivalents significantly grew to **RMB 806 million** due to global offering proceeds Financial Summary for the Six Months Ended June 30 | Metric | 2025 (RMB '000) | 2024 (RMB '000) | | :--- | :--- | :--- | | Research and development costs | (46,621) | (38,917) | | Administrative expenses | (60,045) | (43,643) | | Loss for the period | (118,020) | (83,471) | **Cash and Cash Equivalents at Period End:** | Metric | June 30, 2025 (RMB '000) | December 31, 2024 (RMB '000) | | :--- | :--- | :--- | | Cash and cash equivalents | 805,909 | 203,587 | - Loss for the period increased by **41.4%** year-on-year to **RMB 118 million**[4](index=4&type=chunk) - Cash and cash equivalents significantly increased from **RMB 204 million** at the end of 2024 to **RMB 806 million** as of June 30, 2025, primarily due to net proceeds from the global offering[4](index=4&type=chunk)[33](index=33&type=chunk) Business Overview and Product Pipeline This section outlines the company's profile, strategic focus, and detailed progress of its core and key product pipeline candidates [Company Profile and Strategy](index=4&type=section&id=2.1%20%E5%85%AC%E5%8F%B8%E7%AE%80%E4%BB%8B%E4%B8%8E%E6%88%98%E7%95%A5) Established in November 2018, Visen Pharmaceuticals is a late-stage biopharmaceutical company focused on endocrine disease treatments in China, with one core and two key products under exclusive license - Established in November 2018, the company is a late-stage biopharmaceutical company with products nearing commercialization, focused on providing specific endocrine disease treatments in China (including Hong Kong, Macau, and Taiwan)[9](index=9&type=chunk) - The company possesses one core product, **lonapegsomatropin**, and two key products, **palopegteriparatide** and **navepegritide**[9](index=9&type=chunk) - The company has secured exclusive licenses to develop, manufacture, and commercialize all candidate drugs in China (including Hong Kong, Macau, and Taiwan)[12](index=12&type=chunk) [Core Product: Lonapegsomatropin](index=2&type=section&id=2.2%20%E6%A0%B8%E5%BF%83%E4%BA%A7%E5%93%81%EF%BC%9A%E9%9A%86%E5%9F%B9%E7%94%9F%E9%95%B7%E6%BF%80%E7%B4%A0(lonapegsomatropin)) Lonapegsomatropin, the company's core product for pediatric growth hormone deficiency, has completed China Phase 3 trials, submitted BLA, and is advancing towards commercialization, local production, and market access - **Lonapegsomatropin** is the only long-acting growth hormone to demonstrate superiority and comparable safety in a positive drug-controlled, parallel-group trial against daily human growth hormone for pediatric growth hormone deficiency[5](index=5&type=chunk)[15](index=15&type=chunk) - The BLA was accepted by the NMPA on March 7, 2024, and entered its second technical review on May 21, 2025, with approval anticipated in **Q4 2025**[10](index=10&type=chunk)[17](index=17&type=chunk) [Product Overview and Clinical Progress](index=2&type=section&id=2.2.1%20%E4%BA%A7%E5%93%81%E6%A6%82%E8%A7%88%E4%B8%8E%E4%B8%B4%E5%BA%8A%E8%BF%9B%E5%B1%95) Lonapegsomatropin is a once-weekly long-acting growth hormone replacement therapy, demonstrating superior annualized height velocity (AHV) and comparable safety to daily injections in China Phase 3 trials - **Lonapegsomatropin** has completed a Phase 3 pivotal trial in China for children aged 3 to 17 with growth hormone deficiency, demonstrating statistically significant superior 52-week AHV compared to short-acting (daily injection) human growth hormone[15](index=15&type=chunk) - This product is the only long-acting growth hormone that continuously releases unmodified human growth hormone in vivo between weekly doses, with a molecular composition identical to endogenous growth hormone[15](index=15&type=chunk) [Registration and Commercialization Progress](index=6&type=section&id=2.2.2%20%E6%B3%A8%E5%86%8C%E4%B8%8E%E5%95%86%E4%B8%9A%E5%8C%96%E8%BF%9B%E5%B1%95) Lonapegsomatropin's BLA is in its second technical review, with expected approval in Q4 2025, supported by approved auto-injector devices and a commercial supply agreement with Ascendis Pharma - **Lonapegsomatropin's** BLA application was accepted by the NMPA on March 7, 2024, and initiated its second technical review on May 21, 2025, with approval expected in **Q4 2025**[17](index=17&type=chunk) - Import medical device registration applications for the auto-injector and needles were approved in **April 2024** and **April 2025**, respectively[5](index=5&type=chunk)[17](index=17&type=chunk) - On June 12, 2025, the company entered into a commercial supply framework agreement with Ascendis Pharma to ensure the supply of its core product post-launch[5](index=5&type=chunk)[18](index=18&type=chunk) [Local Production and Global Development](index=6&type=section&id=2.2.3%20%E6%9C%AC%E5%9C%B0%E7%94%9F%E4%BA%A7%E4%B8%8E%E5%85%A8%E7%90%83%E5%BC%80%E5%8F%91) The company is collaborating with Wuxi Biologics for local production of lonapegsomatropin, developing Dual Chamber Device (DCD) technology, and noting global trial results and US FDA approval for adult GHD - The company is collaborating with Wuxi Biologics for the commercial production of **lonapegsomatropin**, having completed technology transfer for key reagents and intermediates, aiming to complete drug substance technology transfer by **end of 2025** and full technology transfer and localization by **2027**[19](index=19&type=chunk) - The company successfully developed Dual Chamber Device (DCD) technology as a drug delivery platform for its self-developed formulations and has obtained multiple patents[5](index=5&type=chunk)[20](index=20&type=chunk) - Results from the enliGHten trial, published in *Hormone Research in Paediatrics*, showed **lonapegsomatropin** treatment for pediatric growth hormone deficiency patients resulted in sustained height improvement for up to **6 years**[22](index=22&type=chunk) - Ascendis Pharma announced that the US FDA approved SKYTROFA® (**lonapegsomatropin-tcgd**) for replacement of endogenous growth hormone in adult growth hormone deficiency[22](index=22&type=chunk) [Commercialization Plan and Market Access](index=7&type=section&id=2.2.4%20%E5%95%86%E4%B8%9A%E5%8C%96%E8%AE%A1%E5%88%92%E4%B8%8E%E5%B8%82%E5%9C%BA%E5%87%86%E5%85%A5) To prepare for lonapegsomatropin's anticipated Q4 2025 approval, the company is expanding its commercial team and forming strategic partnerships to broaden market coverage and accelerate product adoption - The company is expanding its field medical representatives, medical training, channel management, medical affairs, and customer service personnel to strengthen its commercial team in anticipation of the core product's expected approval in **Q4 2025**[23](index=23&type=chunk) - Strategic cooperation agreements have been signed with Shanghai Pharmaceuticals Holding Co., Ltd. and United Family Healthcare to jointly develop diagnostic and service capabilities for pediatric growth and development medical needs[23](index=23&type=chunk) - A strategic cooperation framework agreement was signed with Anke Bio to jointly promote **lonapegsomatropin** in certain geographical regions in China to expand commercial coverage and accelerate product adoption[5](index=5&type=chunk)[23](

[I. Executive Summary](index=1&type=section&id=I.%20Executive%20Summary) [1.1 Financial Highlights](index=1&type=section&id=1.1%20Financial%20Highlights) The Group achieved revenue growth and stable gross profit in the first half of 2025, turning operating business from loss to profit, significantly narrowing loss attributable to shareholders, and reducing basic loss per share, though net asset value per share decreased Key Financial Data for H1 2025 (Consolidated Statement) | Indicator | For the six months ended June 30, 2025 (HKD million) | For the six months ended June 30, 2024 (HKD million) | % Change | | :--- | :--- | :--- | :--- | | Revenue | 905.6 | 863.4 | +4.9% | | Gross Profit | 311.9 | 311.0 | +0.3% | | Operating Profit/(Loss) before Depreciation, Finance Costs and Tax | 85.4 | (734.8) | N/A | | Loss Attributable to Owners of the Parent | (677.6) | (1,599.2) | -57.6% | | Basic Loss Per Ordinary Share Attributable to Owners of the Parent | HKD (0.82) | HKD (1.84) | -55.4% | | Book Value of Net Asset Value Per Ordinary Share Attributable to Owners of the Parent (at period end) | HKD 6.46 | HKD 7.16 | -9.8% | | Adjusted Net Asset Value Per Ordinary Share Attributable to Owners of the Parent (at period end) | HKD 17.20 | HKD 18.07 | -4.8% | [1.2 Business Highlights](index=2&type=section&id=1.2%20Business%20Highlights) The Group's significant loss reduction is primarily due to a fair value turnaround in financial assets and decreased finance costs, with stable hotel performance, improved occupancy and RevPAR for Regala Skycity Hotel, strong property sales, especially for The Upper Queen, and active non-core asset divestment to reduce debt - The Group's loss reduction is primarily due to a fair value turnaround in financial assets from a loss of **HKD 932.6 million** to a gain of **HKD 6.6 million**, coupled with lower finance costs resulting from a decrease in HIBOR[3](index=3&type=chunk) - Operating profit before interest, tax, depreciation, and amortization (EBITDA) turned profitable at **HKD 85.4 million**, compared to a loss of **HKD 734.8 million** in the same period last year[3](index=3&type=chunk) - Regala Skycity Hotel's business remains stable, with improved occupancy and average revenue per available room (RevPAR), anticipating further enhancement with the commissioning of Terminal 2[3](index=3&type=chunk) - The Upper Queen project on Queen's Road West relaunched **123 residential units**, with **120 units** sold or under agreement to sell to date, generating significant sales proceeds[4](index=4&type=chunk) - The Group has entered into agreements to dispose of non-core properties in Lisbon and London to reduce debt levels and strengthen overall financial position[4](index=4&type=chunk) [II. Financial Performance](index=4&type=section&id=II.%20Financial%20Performance) [2.1 Consolidated Income Statement](index=4&type=section&id=2.1%20Consolidated%20Income%20Statement) The Group significantly narrowed its consolidated loss attributable to shareholders in the first half of 2025, primarily due to a fair value turnaround in financial assets and reduced finance costs - For the six months ended June 30, 2025, the Group recorded a consolidated loss attributable to shareholders of **HKD 677.6 million**, a significant reduction from **HKD 1,599.2 million** in the same period of 2024[5](index=5&type=chunk) - The loss reduction is mainly attributed to a fair value gain of **HKD 6.6 million** on financial assets at fair value through profit or loss during the review period, compared to a fair value loss of **HKD 932.6 million** in the corresponding period of 2024[5](index=5&type=chunk) - Lower finance costs in the first six months of 2025, driven by a decrease in HIBOR, also contributed to the reduced loss[5](index=5&type=chunk) - Operating profit before interest, tax, depreciation, and amortization (EBITDA) turned profitable at **HKD 85.4 million**, compared to a loss of **HKD 734.8 million** in the same period of 2024[5](index=5&type=chunk) [2.2 Analysis of Key Financial Metrics](index=4&type=section&id=2.2%20Analysis%20of%20Key%20Financial%20Metrics) The Group's hotel property depreciation negatively impacted financial performance but had no immediate cash flow effect, with an adjusted net asset value per share provided for a more accurate asset valuation reference - Total depreciation expenses for the Hong Kong hotel portfolio amounted to **HKD 290.2 million** in H1 2025 (2024: **HKD 291.3 million**), negatively impacting financial performance but with no immediate cash flow effect[6](index=6&type=chunk) - As of June 30, 2025, the adjusted net asset value per ordinary share was **HKD 17.20**, based on a market revaluation of the Hong Kong hotel property portfolio[6](index=6&type=chunk) [III. Business Review](index=5&type=section&id=III.%20Business%20Review) [3.1 Hotel Operations](index=5&type=section&id=3.1%20Hotel%20Operations) Hong Kong's tourism steadily recovered with increased visitor arrivals, yet average room rates and RevPAR declined; the Group's Regala Skycity Hotel performed stably and completed refinancing, while Regal REIT's loss widened due to investment property fair value losses, though core operating profit turned positive, and the Group's hotel operating and management businesses continued to contribute revenue [3.1.1 Market Overview](index=5&type=section&id=3.1.1%20Market%20Overview) Global economic growth slowed, China's GDP grew steadily, and Hong Kong's economy expanded with export and local demand support; Hong Kong visitor arrivals significantly increased year-on-year, but average hotel room rates and RevPAR declined - Global economic growth slowed in H1 2025, projected to decrease to **2.3%**, the slowest pace since 2008[7](index=7&type=chunk) - China's GDP increased by **5.3%** year-on-year in H1 2025[7](index=7&type=chunk) - Hong Kong welcomed approximately **23.6 million** visitors in H1 2025, an **11.7%** year-on-year increase, with **17.8 million** from mainland China[7](index=7&type=chunk) - Hong Kong's average hotel occupancy rate rose from **83.0%** in 2024 to **85.0%** in H1 2025, but the actual average room rate fell by **10.8%**, leading to an **8.6%** year-on-year decrease in RevPAR[8](index=8&type=chunk) [3.1.2 Hotel Ownership Business](index=5&type=section&id=3.1.2%20Hotel%20Ownership%20Business) The Group's Regala Skycity Hotel maintained stable operations with improved occupancy and RevPAR, completing **HKD 2.95 billion** in refinancing, while its Barcelona hotel in Spain continued to generate satisfactory rental income - Regala Skycity Hotel's business remains stable, with further improvements in occupancy and RevPAR compared to the same period last year, expected to significantly enhance performance in the coming years[9](index=9&type=chunk) - Regala Skycity Hotel has completed a three-year refinancing of **HKD 2,950 million**[9](index=9&type=chunk) - The Group owns a **186-room** hotel in Barcelona, Spain, leased to a third-party operator, which continues to generate satisfactory rental income[10](index=10&type=chunk) - Regala Skycity Hotel officially opened in April 2023, featuring **1,208 rooms and suites**, and has achieved BEAM Plus Gold and EarthCheck Design Gold certifications[24](index=24&type=chunk) [3.1.3 Regal REIT](index=6&type=section&id=3.1.3%20Regal%20REIT) The Group holds approximately **74.9%** of Regal REIT's fund units; the trust's consolidated loss increased due to fair value losses on investment properties, but core operating profit turned positive excluding fair value changes, primarily benefiting from reduced finance costs due to lower HIBOR - As of June 30, 2025, the Group held approximately **74.9%** of the total issued fund units of Regal REIT[11](index=11&type=chunk) - Regal REIT recorded a consolidated loss before distribution to unitholders of **HKD 508.1 million** (H1 2024: loss of **HKD 19.8 million**), primarily due to a fair value loss of **HKD 517.1 million** on its investment property portfolio[11](index=11&type=chunk) - Excluding fair value changes, Regal REIT recorded a core operating profit before distribution to unitholders of **HKD 9.0 million** during the interim period (H1 2024: loss of **HKD 36.3 million**), mainly attributable to reduced finance costs due to lower HIBOR[11](index=11&type=chunk) - All nine of the Group's other hotels, except Regala Skycity Hotel, are owned through Regal REIT[12](index=12&type=chunk) [3.1.4 Hotel Operating Business](index=6&type=section&id=3.1.4%20Hotel%20Operating%20Business) Favour Link International Limited, a wholly-owned subsidiary of the Group, operates eight Regal REIT hotels as a lessee, maintaining stable operations in a competitive tourism market, with increased total net property income still below the total basic rent paid to the trust - Favour Link International Limited, a wholly-owned subsidiary of the Group, leases and operates eight hotels from Regal REIT[13](index=13&type=chunk) - Despite challenging operating conditions in Hong Kong's tourism sector, the total net property income from leased hotels increased compared to 2024, but remained below the total basic rent paid[13](index=13&type=chunk) [3.1.5 Hotel Management Business](index=7&type=section&id=3.1.5%20Hotel%20Management%20Business) Regal Hotels International Limited, a wholly-owned subsidiary, manages Regala Skycity Hotel and Regal REIT's hotels, provides management services for iclub Mong Kok Hotel and iclub AMTD Sheung Wan Hotel under the P&R joint venture, and offers hotel management services in Shanghai and Dezhou, China - Regal Hotels International Limited manages Regala Skycity Hotel and nine hotels under Regal REIT[14](index=14&type=chunk) - Regal Hotels International also manages iclub Mong Kok Hotel and iclub AMTD Sheung Wan Hotel, owned by the P&R joint venture[14](index=14&type=chunk) - The Group provides management services for hotels operating under the Regal brand in Shanghai and Dezhou, China[15](index=15&type=chunk) [3.2 Property Development and Investment](index=7&type=section&id=3.2%20Property%20Development%20and%20Investment) Hong Kong's residential property market demand remains relatively stable with rising transaction volumes, yet property prices face pressure; the Group actively advances multiple residential and commercial projects through wholly-owned properties and joint ventures P&R and Cosmopolitan International Holdings Limited, while continuing non-core asset divestment to optimize its financial structure [3.2.1 Hong Kong Property Market Overview](index=7&type=section&id=3.2.1%20Hong%20Kong%20Property%20Market%20Overview) Hong Kong property developers adopted aggressive pricing strategies, but residential property demand remained relatively stable, influenced by mainland buyers, talent schemes, lower HIBOR, and capital market wealth effects; total transaction volume rose, price declines narrowed, and the market may be entering an upward cycle - Hong Kong's residential property market saw aggressive pricing strategies from developers due to tight liquidity and substantial inventory[16](index=16&type=chunk) - Overall demand for Hong Kong residential properties remained relatively stable, influenced by mainland buyers, talent schemes, lower HIBOR, and a buoyant capital market[16](index=16&type=chunk) - Total transaction volume for Hong Kong residential properties continued to rise in the first six months of 2025, with a narrowing downward trend in property prices, suggesting the market may be entering an upward cycle[16](index=16&type=chunk) [3.2.2 Wholly-owned Properties](index=7&type=section&id=3.2.2%20Wholly-owned%20Properties) The Group's wholly-owned properties include The Upper Queen on Queen's Road West, the Hai Tan Street redevelopment project in Sham Shui Po, and luxury houses at Regalia Bay in Stanley; The Upper Queen project achieved strong sales, with **120 residential units** sold or under agreement, and the Group is actively divesting non-core overseas properties in London and Lisbon - The Upper Queen project on Queen's Road West was completed by the end of 2022, comprising **130 residential units**[18](index=18&type=chunk)[25](index=25&type=chunk) - The remaining **123 residential units** at The Upper Queen were relaunched in June this year, with **120 units** sold or under agreement to sell to date, generating total sales of **HKD 898.7 million**[18](index=18&type=chunk)[25](index=25&type=chunk) - The Group still retains **8 garden houses** at Regalia Bay in Stanley and will continue to dispose of some of them[18](index=18&type=chunk)[27](index=27&type=chunk) - The Group has entered into an agreement to sell a property in London, UK, for a purchase price of **GBP 19.5 million** (approximately **HKD 204.1 million**), with the transaction pending approval from the shareholders of the ultimate listed parent company[18](index=18&type=chunk)[29](index=29&type=chunk) - The Group has entered into an agreement to sell a renovation project in Lisbon, Portugal, for a cash consideration of **EUR 9.3 million** (approximately **HKD 83.9 million**), expected to be completed by May 2026[18](index=18&type=chunk)[30](index=30&type=chunk) - The land acquisition for the project at 227-227C Hai Tan Street, Sham Shui Po, Kowloon, intended for commercial/residential development, has been completed, with demolition of existing structures and site works finished[26](index=26&type=chunk) [3.2.3 Joint Venture - P&R Holdings Limited](index=7&type=section&id=3.2.3%20Joint%20Venture%20-%20P%26R%20Holdings%20Limited) P&R Joint Venture (50% owned by the Group and Paliburg each) holds a diversified property portfolio in Hong Kong, including the sold-out The Reach, Regalia Villa with **7 retained houses**, We Go MALL for rental income, remaining shops and parking spaces at The Amour, and the luxury residential project Mount Regalia; Mount Regalia has sold or agreed to sell **21 houses** and **77 apartment units**, with profits recognized in this period's results. P&R also owns and operates iclub Mong Kok Hotel and iclub AMTD Sheung Wan Hotel, and is advancing projects at Kam Wa Street, Shau Kei Wan, and Castle Peak Road, Cheung Sha Wan - P&R Joint Venture (50% owned by the Group and Paliburg each) encompasses real estate development, investment, and financing activities[31](index=31&type=chunk) - The Mount Regalia project in Kau To, Sha Tin, has sold or agreed to sell **21 garden houses** and **77 apartment units**, totaling **HKD 5,218.5 million** in sales; in 2025, **18 apartment units** and **1 house** were agreed to be sold, totaling **HKD 735.4 million** in sales[16](index=16&type=chunk)[35](index=35&type=chunk) - Sales transactions completed for the Mount Regalia project during this period included **1 house** and **4 apartment units**, totaling **HKD 200.7 million** in sales, with related profits recognized in the review period's results[35](index=35&type=chunk) - P&R currently retains **3 houses** and **59 apartment units** at Mount Regalia, which will continue to be offered for sale (excluding **1 retained house**)[35](index=35&type=chunk) - The Reach apartment building in Yuen Long is sold out, while Regalia Villa still retains **7 houses** for sale[31](index=31&type=chunk) - We Go MALL shopping mall in Ma On Shan maintains stable occupancy and is held for rental income[32](index=32&type=chunk) - The Amour project in Sham Shui Po has sold all residential units and some shops and parking spaces, with the remaining **2 shops** and **5 parking spaces** continuing to be offered for sale[33](index=33&type=chunk) - P&R self-operates and the Group manages iclub Mong Kok Hotel (**288 rooms**) and iclub AMTD Sheung Wan Hotel (**98 rooms**)[36](index=36&type=chunk)[37](index=37&type=chunk) - The Castle Peak Road project in Cheung Sha Wan has successfully consolidated **100%** ownership and is in discussions with the government regarding a development and conservation proposal, including preserving the historic arcade portion[39](index=39&type=chunk) [3.2.4 Cosmopolitan International Holdings Limited](index=14&type=section&id=3.2.4%20Cosmopolitan%20International%20Holdings%20Limited) Cosmopolitan International Holdings Limited (a listed subsidiary held by Paliburg through P&R) owns multiple property projects in China; residential units at Regal International City Chengdu are sold out, with ongoing sales of shops and parking spaces, hotel interior construction completed and certified, and active re-planning for the sale of remaining commercial and office components. All residential units at Regal New Kai Men Tianjin are sold, with ongoing shop sales, but the office market is weak; the Xinjiang project, involving afforestation for land development rights, maintains valid legal interests - Cosmopolitan International Holdings Limited is a listed subsidiary held by Paliburg through P&R[40](index=40&type=chunk) - Phase 3 residential units at Regal International City Chengdu are sold out, with ongoing sales of shops and parking spaces[41](index=41&type=chunk) - Interior construction for the **325-room** hotel at the Chengdu project has been completed, obtaining the completion certificate in January 2024 and the property ownership certificate in January 2025[41](index=41&type=chunk) - Sales progress for the remaining commercial complex and office building at the Chengdu project has been relatively slow, with active re-planning of the sales strategy underway[42](index=42&type=chunk)[43](index=43&type=chunk) - All residential units at Regal New Kai Men Tianjin are sold, with ongoing shop sales, but the overall real estate market in Tianjin, particularly for commercial properties, remains weak[45](index=45&type=chunk) - The Xinjiang project involves afforestation on approximately **4,300 mu** of land to obtain real estate development rights for about **1,843 mu**, with Cosmopolitan Group entitled to participate in bidding and receive compensation for afforestation costs, maintaining valid legal interests[46](index=46&type=chunk) [3.3 Aircraft Ownership and Leasing](index=8&type=section&id=3.3%20Aircraft%20Ownership%20and%20Leasing) The Group divested all remaining investment interests in this business segment in 2024 and may consider reinvesting under suitable circumstances in the future - The Group further divested all its remaining investment interests in the aircraft ownership and leasing business segment in 2024[20](index=20&type=chunk) - The Group may consider reinvesting in this business segment when deemed appropriate[20](index=20&type=chunk) [3.4 Financial Assets and Other Investments](index=16&type=section&id=3.4%20Financial%20Assets%20and%20Other%20Investments) The Group holds a substantial investment portfolio including listed securities, investment funds, private equity, bonds, and treasury products, recording a net gain during the review period - The Group holds a substantial investment portfolio, including listed securities, investment funds, private equity, bonds, and treasury products[47](index=47&type=chunk) - During the review period, the Group recorded a net gain from its financial asset investment business[47](index=47&type=chunk) [IV. Outlook](index=9&type=section&id=IV.%20Outlook) Hong Kong's business outlook remains challenging amidst macroeconomic uncertainties and geopolitical tensions; tourism is recovering, but mainland visitor spending patterns are shifting, prompting the Hong Kong government to actively promote tourism development. Lower HIBOR and potential Fed rate cuts will positively impact Hong Kong's interest rate environment, and the Group will continue its asset divestment plan to reduce debt and strengthen financial resilience - Hong Kong's overall business outlook remains challenging amidst complex macroeconomic conditions and geopolitical tensions[21](index=21&type=chunk) - Total visitor arrivals in Hong Kong's tourism sector are steadily rising, but mainland visitors' spending habits are shifting towards cultural and in-depth experiences, leading to a decrease in per capita expenditure[21](index=21&type=chunk) - The Hong Kong Tourism Board is actively promoting the 'Hong Kong Everywhere' concept and implementing the 'Hong Kong Tourism Development Blueprint 2.0,' with the government also launching nine new tourist attractions[21](index=21&type=chunk) - HIBOR remains at a lower level, and the general expectation of potential Fed rate cuts in the second half of this year could positively impact Hong Kong's interest rate environment[22](index=22&type=chunk) - The Group will continue its asset divestment plan to reduce debt levels and strengthen overall financial resilience[22](index=22&type=chunk) [V. Financial Review](index=17&type=section&id=V.%20Financial%20Review) [5.1 Asset Valuation](index=17&type=section&id=5.1%20Asset%20Valuation) The Group's Hong Kong hotel properties are accounted for at historical cost plus capital appreciation less depreciation in financial statements, not fully reflecting significant market valuation appreciation; for reference, the company provides an adjusted net asset value per share based on market revaluation - The Group's Hong Kong hotel properties are not fully reflected at their significantly appreciated market valuation in the financial statements[48](index=48&type=chunk) Unaudited Adjusted Net Asset Value Attributable to Owners of the Parent (As of June 30, 2025) | Indicator | HKD million | Per Ordinary Share HKD | | :--- | :--- | :--- | | Book Net Asset Value Attributable to Owners of the Parent | 5,807.7 | 6.46 | | Adjustment for Revaluation of the Group's Hong Kong Hotel Property Portfolio to Market Value and Reversal of Related Deferred Tax Liabilities | 9,648.7 | 10.74 | | Unaudited Adjusted Net Asset Value Attributable to Owners of the Parent | 15,456.4 | 17.20 | [5.2 Capital Resources and Funding](index=17&type=section&id=5.2%20Capital%20Resources%20and%20Funding) The Group adopts prudent funding and financial policies, primarily financing Hong Kong and overseas projects through internal funds and bank loans; bank financing is predominantly in HKD, with interest rates determined by HIBOR, and the Group considers using interest rate and exchange rate hedging instruments - The Group adopts prudent funding and financial policies, with cash balances primarily held as bank deposits and invested in treasury and yield-enhancing products[49](index=49&type=chunk) - Hong Kong and overseas projects are partly funded by internal resources, with the remainder provided by bank loans, and repayment periods are determined by projected project completion dates or sales forecasts[50](index=50&type=chunk) - The vast majority of bank financing loans are denominated in HKD, with interest rates primarily determined by HIBOR, and the Group considers using interest rate and exchange rate hedging instruments[50](index=50&type=chunk) [5.3 Cash Flow](index=18&type=section&id=5.3%20Cash%20Flow) Net cash flow from operating activities increased in H1 2025, while net interest expenses decreased Net Cash Flow (For the six months ended June 30, 2025) | Indicator | 2025 (HKD million) | 2024 (HKD million) | | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | 181.6 | 124.3 | | Net Interest Expenses | (373.3) | (449.9) | [5.4 Debt and Gearing Ratio](index=18&type=section&id=5.4%20Debt%20and%20Gearing%20Ratio) As of June 30, 2025, the Group's cash and bank balances decreased, and net debt after deducting cash increased, leading to a higher gearing ratio; the adjusted gearing ratio also slightly increased when hotel properties were revalued at market prices Debt and Gearing Ratio (As of June 30, 2025) | Indicator | June 30, 2025 (HKD million) | December 31, 2024 (HKD million) | | :--- | :--- | :--- | | Cash and Bank Balances with Time Deposits | 788.3 | 1,093.8 | | Debt after Deducting Cash and Bank Balances with Time Deposits | 14,701.1 | 14,500.6 | | Gearing Ratio (Based on Book Total Assets) | 60.5% | 58.1% | | Gearing Ratio (Based on Adjusted Total Assets) | 40.1% | 38.6% | [5.5 Lease Liabilities](index=19&type=section&id=5.5%20Lease%20Liabilities) As of June 30, 2025, the Group's lease liabilities amounted to **HKD 9.0 million**, a decrease from the end of 2024 Lease Liabilities (As of June 30, 2025) | Indicator | June 30, 2025 (HKD million) | December 31, 2024 (HKD million) | | :--- | :--- | :--- | | Lease Liabilities | 9.0 | 10.6 | [5.6 Pledge of Assets](index=19&type=section&id=5.6%20Pledge%20of%20Assets) As of June 30, 2025, the Group's assets totaling **HKD 19,484.3 million** were pledged to secure bank loans and lease guarantees - As of June 30, 2025, the Group's assets totaling **HKD 19,484.3 million** (including properties under development, property, plant and equipment, investment properties, right-of-use assets, properties held for sale, time deposits, and bank balances) were pledged to secure bank loans and lease guarantees[55](index=55&type=chunk) - A pledged equity interest in a property development project holding company as of December 31, 2024, was released during the period[55](index=55&type=chunk) [5.7 Capital Commitments](index=19&type=section&id=5.7%20Capital%20Commitments) Details of the Group's capital commitments as of June 30, 2025, will be presented in the interim financial statements - Details of the Group's capital commitments as of June 30, 2025, will be presented in the interim financial statements[56](index=56&type=chunk) [5.8 Contingent Liabilities](index=19&type=section&id=5.8%20Contingent%20Liabilities) Details of the Group's contingent liabilities as of June 30, 2025, will be presented in the interim financial statements - Details of the Group's contingent liabilities as of June 30, 2025, will be presented in the interim financial statements[57](index=57&type=chunk) [5.9 Dividends](index=19&type=section&id=5.9%20Dividends) The Board resolved not to declare an interim dividend for the financial year ending December 31, 2025 - The Board resolved not to declare an interim dividend for the financial year ending December 31, 2025 (2024: nil)[58](index=58&type=chunk) [VI. Interim Financial Statements](index=20&type=section&id=VI.%20Interim%20Financial%20Statements) [6.1 Condensed Consolidated Income Statement](index=20&type=section&id=6.1%20Condensed%20Consolidated%20Income%20Statement) The Group achieved revenue growth and stable gross profit in H1 2025, turning operating business from loss to profit, but still recorded a loss, albeit significantly narrowed compared to the same period last year Condensed Consolidated Income Statement (For the six months ended June 30, 2025) | Indicator | 2025 (HKD million) | 2024 (HKD million) | | :--- | :--- | :--- | | Revenue | 905.6 | 863.4 | | Gross Profit | 311.9 | 311.0 | | Fair Value Gains/(Losses) on Financial Assets at Fair Value Through Profit or Loss (Net) | 6.6 | (932.6) | | Operating Profit/(Loss) before Depreciation | 85.4 | (734.8) | | Operating Loss | (212.0) | (1,037.0) | | Finance Costs | (410.5) | (511.8) | | Loss Before Tax | (716.5) | (1,666.8) | | Loss Attributable to Owners of the Parent | (677.6) | (1,599.2) | [6.2 Condensed Consolidated Statement of Comprehensive Income](index=22&type=section&id=6.2%20Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) The Group's total comprehensive loss significantly narrowed in H1 2025, primarily due to a reduction in loss for the period, despite fluctuations in other comprehensive income/loss items Condensed Consolidated Statement of Comprehensive Income (For the six months ended June 30, 2025) | Indicator | 2025 (HKD million) | 2024 (HKD million) | | :--- | :--- | :--- | | Loss for the Period | (732.1) | (1,665.0) | | Fair Value Changes on Cash Flow Hedges | (50.1) | 10.5 | | Exchange Differences on Translation of Foreign Operations | 53.2 | (19.8) | | Total Comprehensive Loss for the Period | (708.9) | (1,695.9) | | Attributable to Owners of the Parent | (642.5) | (1,631.7) | [6.3 Condensed Consolidated Statement of Financial Position](index=23&type=section&id=6.3%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the Group's total non-current and current assets both decreased, and net current liabilities increased, resulting in a reduction in net assets Condensed Consolidated Statement of Financial Position (As of June 30, 2025) | Indicator | June 30, 2025 (HKD million) | December 31, 2024 (HKD million) | | :--- | :--- | :--- | | Total Non-Current Assets | 21,861.9 | 22,507.6 | | Total Current Assets | 2,419.4 | 2,466.1 | | Total Current Liabilities | (5,545.1) | (5,468.7) | | Net Current Liabilities | (3,125.7) | (3,002.6) | | Net Assets | 7,523.4 | 8,214.9 | | Equity Attributable to Owners of the Parent | 5,807.7 | 6,432.8 | [VII. Notes to Condensed Consolidated Financial Statements](index=25&type=section&id=VII.%20Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) [7.1 Accounting Policies and Basis of Preparation](index=25&type=section&id=7.1%20Accounting%20Policies%20and%20Basis%20of%20Preparation) The condensed consolidated financial statements are prepared in accordance with HKAS 34 and incorporate newly adopted revised HKFRSs, with amendments to HKAS 21 having no impact on the Group; the Group prepares financial statements on a going concern basis, believing it has sufficient working capital for the next 12 months - The condensed consolidated financial statements are prepared in accordance with Hong Kong Accounting Standard 34 issued by the Hong Kong Institute of Certified Public Accountants[66](index=66&type=chunk) - The initial adoption of the revised Hong Kong Accounting Standard 21 'Lack of Exchangeability' had no impact on the condensed consolidated financial statements[67](index=67&type=chunk) - The Group prepares its financial statements on a going concern basis, believing it has sufficient working capital to support its operations for the next 12 months, considering factors such as cash flows, contracted property sales, non-core asset disposal plans, and bank loan refinancing[69](index=69&type=chunk)[71](index=71&type=chunk) [7.2 Segment Information](index=26&type=section&id=7.2%20Segment%20Information) The Group's business is divided into six segments: hotel operation and management and hotel ownership, asset management, property development and investment, financial asset investment, aircraft ownership and leasing, and others; management independently monitors each segment's performance, with inter-segment sales conducted at market prices - The Group's business is divided into six segments: hotel operation and management and hotel ownership, asset management, property development and investment, financial asset investment, aircraft ownership and leasing, and others[71](index=71&type=chunk) - Management independently monitors the performance of each business segment to make decisions on resource allocation and performance assessment[69](index=69&type=chunk) Segment Revenue and Results (For the six months ended June 30, 2025) | Segment | 2025 Revenue (HKD million) | 2024 Revenue (HKD million) | 2025 Segment Operating Results (HKD million) | 2024 Segment Operating Results (HKD million) | | :--- | :--- | :--- | :--- | :--- | | Hotel Operation and Management and Hotel Ownership | 850.0 | 814.8 | (59.1) | (60.4) | | Asset Management | 46.3 | 46.7 | (6.6) | (6.5) | | Property Development and Investment | 12.7 | 10.2 | (124.4) | (85.4) | | Financial Asset Investment | (0.5) | 1.3 | 4.7 | (928.8) | | Aircraft Ownership and Leasing | – | 11.8 | – | 76.0 | | Others | 134.9 | 113.7 | 0.1 | 0.7 | | Elimination | (137.8) | (135.1) | – | – | | **Total** | **905.6** | **863.4** | **(185.3)** | **(1,004.4)** | [7.3 Analysis of Revenue, Other Income and Gains (Net)](index=28&type=section&id=7.3%20Analysis%20of%20Revenue%2C%20Other%20Income%20and%20Gains%20%28Net%29) The Group's revenue primarily stems from hotel operation and management services, with a significant increase in construction and related business revenue; net other income and gains mainly comprise bank and other interest income, and unlisted investment dividend income, but recorded a loss from the disposal of unlisted investments Revenue Sources (For the six months ended June 30, 2025) | Revenue Source | 2025 (HKD million) | 2024 (HKD million) | | :--- | :--- | :--- | | Hotel Operation and Management Services | 819.8 | 782.3 | | Construction and Construction-Related Business Revenue | 11.0 | – | | Other Businesses | 36.0 | 28.9 | | Hotel Property Rental Income | 20.5 | 21.1 | | Investment Property Rental Income | 17.4 | 16.6 | | Aircraft Rental Income | – | 11.8 | | **Total Revenue** | **905.6** | **863.4** | Other Income and Gains (Net) (For the six months ended June 30, 2025) | Source | 2025 (HKD million) | 2024 (HKD million) | | :--- | :--- | :--- | | Bank Interest Income | 5.2 | 9.6 | | Other Interest Income | 28.9 | 69.3 | | Dividend Income from Unlisted Investments | 4.7 | 8.5 | | Loss on Disposal of Unlisted Investments | (5.5) | – | | Gain on Disposal of Property, Plant and Equipment | – | 69.2 | | **Total** | **33.8** | **157.6** | [7.4 Analysis of Depreciation](index=29&type=section&id=7.4%20Analysis%20of%20Depreciation) The Group's total depreciation for H1 2025 amounted to **HKD 297.4 million**, primarily from property, plant and equipment, and right-of-use assets Depreciation Analysis (For the six months ended June 30, 2025) | Category | 2025 (HKD million) | 2024 (HKD million) | | :--- | :--- | :--- | | Depreciation of Property, Plant and Equipment | 158.2 | 161.6 | | Depreciation of Right-of-Use Assets | 139.2 | 140.6 | | **Total Depreciation** | **297.4** | **302.2** | [7.5 Finance Costs](index=30&type=section&id=7.5%20Finance%20Costs) The Group's total finance costs for H1 2025 amounted to **HKD 410.5 million**, a decrease from the same period last year, primarily due to reduced interest on bank loans Finance Costs (For the six months ended June 30, 2025) | Category | 2025 (HKD million) | 2024 (HKD million) | | :--- | :--- | :--- | | Interest on Bank Loans | 386.2 | 493.2 | | Amortization of Debt Establishment Costs | 20.1 | 20.7 | | Fair Value Changes on Derivative Financial Instruments | 2.9 | (3.9) | | **Total Finance Costs** | **410.5** | **511.8** | [7.6 Income Tax Expense/(Credit)](index=30&type=section&id=7.6%20Income%20Tax%20Expense%2F%28Credit%29) The Group's income tax expense for H1 2025 was **HKD 15.6 million**, compared to a credit in the same period last year; Hong Kong profits tax is calculated at **16.5%**, and overseas subsidiaries are taxed at local rates Income Tax Expense/(Credit) (For the six months ended June 30, 2025) | Category | 2025 (HKD million) | 2024 (HKD million) | | :--- | :--- | :--- | | Current - Hong Kong | 12.5 | 8.5 | | Current - Overseas | – | 1.2 | | Deferred Tax | 3.1 | (11.5) | | **Total Tax Expense/(Credit)** | **15.6** | **(1.8)** | - Hong Kong profits tax is calculated at the applicable rate of **16.5%**[76](index=76&type=chunk) - Tax credit from a joint venture was **HKD 1.9 million** (2024: tax expense of **HKD 46.8 million**)[76](index=76&type=chunk) [7.7 Dividends](index=31&type=section&id=7.7%20Dividends) No dividends were paid or declared by the Group for the six months ended June 30, 2025 - No dividends were paid or declared by the Group for the six months ended June 30, 2025 (2024: nil)[77](index=77&type=chunk) [7.8 Basic Loss Per Share](index=31&type=section&id=7.8%20Basic%20Loss%20Per%20Share) The Group's basic loss per ordinary share for H1 2025 was **HKD (0.82)**, a significant reduction from the same period last year, with no dilution adjustment made due to the absence of potentially dilutive ordinary shares Basic Loss Per Ordinary Share (For the six months ended June 30, 2025) | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | Loss for the Period Attributable to Owners of the Parent (HKD million) | (677.6) | (1,599.2) | | Accrued Distribution on Perpetual Securities (HKD million) | 56.9 | 57.2 | | Weighted Average Number of Ordinary Shares in Issue (Shares) | 898,800,000 | 898,800,000 | | **Basic Loss Per Ordinary Share** | **HKD (0.82)** | **HKD (1.84)** | - No diluted adjustment was made to the basic loss per ordinary share due to the absence of issued ordinary shares that could potentially have a dilutive effect[77](index=77&type=chunk) [7.9 Trade and Other Receivables, Deposits and Prepayments](index=32&type=section&id=7.9%20Trade%20and%20Other%20Receivables%2C%20Deposits%20and%20Prepayments) As of June 30, 2025, the Group's net trade and other receivables from customers amounted to **HKD 109.9 million**, with most balances within three months; the Group maintains strict control over outstanding amounts, with no excessive concentration of credit risk Ageing Analysis of Trade and Other Receivables from Customers (As of June 30, 2025) | Ageing | 2025 (HKD million) | 2024 (HKD million) | | :--- | :--- | :--- | | Within 3 months | 92.7 | 88.3 | | 4 to 6 months | 7.1 | 6.5 | | 7 to 12 months | 7.0 | 7.6 | | Over 1 year | 12.0 | 15.5 | | **Total** | **118.8** | **117.9** | | Impairment | (8.9) | (12.0) | | **Net** | **109.9** | **105.9** | - Credit terms for trade and other receivables from customers are generally **30 to 90 days**[78](index=78&type=chunk) - The Group maintains strict control over outstanding amounts, with no excessive concentration of credit risk[79](index=79&type=chunk) [7.10 Trade and Other Payables, Deposits Received and Accruals](index=33&type=section&id=7.10%20Trade%20and%20Other%20Payables%2C%20Deposits%20Received%20and%20Accruals) As of June 30, 2025, the Group's trade and other payables to debtors amounted to **HKD 38.7 million**, a significant decrease from the end of 2024, primarily concentrated within three months Ageing Analysis of Trade and Other Payables to Debtors (As of June 30, 2025) | Ageing | 2025 (HKD million) | 2024 (HKD million) | | :--- | :--- | :--- | | Within 3 months | 35.4 | 68.6 | | 4 to 6 months | 1.2 | 3.2 | | 7 to 12 months | 1.9 | – | | Over 1 year | 0.2 | 0.4 | | **Total** | **38.7** | **72.2** | - Trade and other payables to debtors are non-interest bearing, with repayment terms generally within **90 days**[80](index=80&type=chunk) [7.11 Events After Reporting Period](index=33&type=section&id=7.11%20Events%20After%20Reporting%20Period) Subsequent to the reporting period, on July 29, 2025, the Group entered into an agreement to dispose of its entire equity interest in Waterman House Investments Limited, involving a property in London, for a purchase price of **GBP 19.5 million** - On July 29, 2025, the Group entered into an agreement to dispose of its entire equity interest in Waterman House Investments Limited, involving a property at 41 Kingsway, London, for a purchase price of **GBP 19.5 million** (approximately **HKD 204.1 million**)[81](index=81&type=chunk) - This transaction is subject to the passing of relevant resolutions by shareholders of the ultimate listed parent company, Century City International Holdings Limited[81](index=81&type=chunk) [VIII. Other Information](index=33&type=section&id=VIII.%20Other%20Information) [8.1 Repurchase, Sale or Redemption of Listed Securities](index=33&type=section&id=8.1%20Repurchase%2C%20Sale%20or%20Redemption%20of%20Listed%20Securities) Neither the Company nor any of its subsidiaries repurchased, sold, or redeemed any of the Company's listed securities during 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 during the six months ended June 30, 2025[82](index=82&type=chunk) [8.2 Review of Interim Results](index=33&type=section&id=8.2%20Review%20of%20Interim%20Results) The Group's condensed consolidated financial statements for the six months ended June 30, 2025, are unaudited but have been reviewed by external auditor Ernst & Young; the Audit Committee has reviewed the financial statements with the auditor - The Group's condensed consolidated financial statements are unaudited but have been reviewed by external auditor Ernst & Young[83](index=83&type=chunk) - The Audit Committee has reviewed the financial statements with the external auditor, including the accounting principles and practices adopted[84](index=84&type=chunk) [8.3 Corporate Governance](index=34&type=section&id=8.3%20Corporate%20Governance) The Group complied with the Corporate Governance Code in Appendix C1 of the Listing Rules of The Stock Exchange of Hong Kong Limited during the review period, except for the non-segregation of roles between Chairman and Chief Executive Officer, held by one individual - The Group complied with the Corporate Governance Code set out in Appendix C1 of the Listing Rules of The Stock Exchange of Hong Kong Limited[85](index=85&type=chunk) - The roles of Chairman and Chief Executive Officer are not segregated, with Mr. Lo Yuk Sui holding both positions[85](index=85&type=chunk)[86](index=86&type=chunk) [8.4 Board of Directors](index=34&type=section&id=8.4%20Board%20of%20Directors) The Board of Directors comprises executive, non-executive, and independent non-executive directors, with Mr. Lo Yuk Sui serving as Chairman and Chief Executive Officer - The Board of Directors includes executive directors such as Mr. Lo Yuk Sui (Chairman and Chief Executive Officer) and Ms. Lo Po Man (Vice Chairman and Managing Director), non-executive directors such as Dr. Choi Chee Ming (Vice Chairman), and independent non-executive directors such as Ms. Ng Wing Mui[86](index=86&type=chunk)[87](index=87&type=chunk)

Performance Summary [Financial and Business Highlights](index=1&type=section&id=Financial%20and%20Business%20Highlights) H1 2025 saw a sharp revenue decline, but gross profit improved, and operating and attributable losses significantly narrowed Financial Summary for the Six Months Ended June 30, 2025 | Indicator | As of June 30, 2025 (HKD million) | As of June 30, 2024 (HKD million) | % Change | | :--- | :--- | :--- | :--- | | Revenue | 16.0 | 314.3 | -94.9% | | Gross profit | 2.3 | 1.4 | +64.3% | | Operating loss before depreciation, finance costs and tax | (20.9) | (35.4) | -41.0% | | Loss attributable to owners of the parent | (56.5) | (169.0) | -66.6% | | Basic loss per share attributable to owners of the parent | HKD (3.84) cents | HKD (11.50) cents | -66.6% | | Net asset value per share attributable to owners of the parent (Basic) | HKD 0.50 | HKD 0.46 | +8.7% | | Net asset value per share attributable to owners of the parent (Fully diluted) | HKD 0.27 | HKD 0.25 | +8.0% | [Consolidated Results Overview](index=2&type=section&id=Consolidated%20Results%20Overview) H1 2025 loss significantly narrowed due to reduced tax expenses, despite slow property sales in a weak Chinese market - The Group's loss attributable to shareholders decreased from **HKD 169.0 million** in the same period of 2024 to **HKD 56.5 million** in 2025, primarily due to reduced tax expenses[5](index=5&type=chunk)[6](index=6&type=chunk) - The overall property market in China remained weak, resulting in slow property sales for the Group's two integrated development projects in Chengdu and Tianjin, primarily comprising commercial and retail components[5](index=5&type=chunk)[7](index=7&type=chunk) - All development works for the Chengdu Regal International New City project are substantially complete, with completion certificates issued for the last four office towers and the shopping mall, and the Group is actively planning to sell the remaining units[5](index=5&type=chunk)[7](index=7&type=chunk) Management Discussion and Analysis [Business Review](index=4&type=section&id=Business%20Review) The Group primarily engages in property development and investment in China, with projects nearing completion and active efforts to sell remaining units, alongside other strategic investments - The Group's principal activities are property development and investment (mainly in China), and other investments such as financial assets[10](index=10&type=chunk) - The persistent weakness in China's property market has impacted the sales progress of properties in Chengdu and Tianjin[7](index=7&type=chunk)[13](index=13&type=chunk)[14](index=14&type=chunk) - The Group exercised its redemption right in September 2024 and received approximately **HKD 132.2 million** in redemption proceeds for Interra Acquisition Corporation Class A shares in October 2024[16](index=16&type=chunk) [Property Development](index=4&type=section&id=Property%20Development) The Group's China property projects, including Chengdu, Tianjin, and Xinjiang, are largely complete, with ongoing sales efforts for remaining units despite a weak market - All development works for the Chengdu Regal International New City project are substantially complete, including the hotel, commercial complex, and office towers, with active plans to sell remaining units[12](index=12&type=chunk) - Sales progress for Chengdu project office and retail units is slow, with approximately **15,017 square meters** of office units and **274 square meters** of retail units sold, generating total sales proceeds of **RMB 128.9 million** and **RMB 8.1 million** respectively[12](index=12&type=chunk)[13](index=13&type=chunk) - All residential units in the Tianjin Regal New Gate project have been sold, while sales of the remaining commercial complex and office towers are affected by a weak market, with a total area of **16,050 square meters** of retail units sold, generating total sales proceeds of approximately **RMB 374.1 million**[14](index=14&type=chunk) - The Xinjiang afforestation project has completed afforestation on approximately **4,300 mu** of land, and its legal rights remain valid, with future prospects for obtaining real estate development rights or monetary compensation for approximately **1,843 mu** of land[15](index=15&type=chunk)[45](index=45&type=chunk) [Chengdu Project—Regal International New City](index=4&type=section&id=Chengdu%20Project%E2%80%94Regal%20International%20New%20City) Chengdu project residential units are sold, with retail and parking sales ongoing; commercial and office unit sales are slow, leading to revised sales plans - Phase 3 residential units of the Chengdu project were sold in previous years, generating total sales revenue of approximately **RMB 2,048.3 million**[11](index=11&type=chunk) - Retail unit sales amounted to **4,002 square meters**, with total sales proceeds of approximately **RMB 93.2 million**; **548 parking spaces** have been sold or contracted for sale, generating total sales revenue of approximately **RMB 56.3 million**[11](index=11&type=chunk) - The hotel property obtained its completion certificate in January 2024 and its property ownership certificate in January 2025[12](index=12&type=chunk) - The remaining commercial components (including the commercial complex and five office towers) are substantially complete, but sales of office and retail units are slow, and the Group is actively revising its sales plan[12](index=12&type=chunk)[13](index=13&type=chunk) [Tianjin Project—Regal New Gate](index=5&type=section&id=Tianjin%20Project%E2%80%94Regal%20New%20Gate) All residential units in the Tianjin project are sold, with ongoing retail sales, but remaining office towers face a weak market, requiring continued monitoring for timely sales - All residential units in the Tianjin project have been sold, and retail unit sales within the commercial complex totaled **16,050 square meters**, with total sales proceeds of approximately **RMB 374.1 million**[14](index=14&type=chunk) - The remaining components primarily include two office towers, and the overall market conditions for the Tianjin real estate industry remain weak, particularly for commercial properties[14](index=14&type=chunk) [Xinjiang Project](index=6&type=section&id=Xinjiang%20Project) The Xinjiang project involves afforestation on 7,600 mu, with 4,300 mu completed and 1,843 mu for development, where the Group's legal rights for compensation remain valid - The Xinjiang project has completed afforestation on approximately **4,300 mu** of land, with an estimated **1,843 mu** available for real estate development, and the Group is entitled to participate in bidding and receive compensation for afforestation costs[15](index=15&type=chunk) - Based on legal opinions obtained, the Group's legitimate rights and interests under the relevant afforestation contracts remain legally valid and effective[15](index=15&type=chunk) [Other Investments](index=6&type=section&id=Other%20Investments) The Group invested in Interra Acquisition Corporation's Class A shares, which were redeemed in September 2024, yielding HKD 132.2 million in October - The Group previously subscribed for **12,210,000 Class A shares** of Interra Acquisition Corporation at a subscription price of approximately **HKD 122.1 million**[16](index=16&type=chunk) - The redemption right was exercised in September 2024, and approximately **HKD 132.2 million** in redemption proceeds was received in October 2024[16](index=16&type=chunk) [Outlook](index=4&type=section&id=Outlook) The Board expects continued government support for China's property sector, anticipating substantial revenue from remaining Chengdu and Tianjin properties upon market recovery - The central government is expected to continue introducing supportive fiscal policies and administrative measures to stabilize China's property sector and reverse the downward trend[9](index=9&type=chunk) - The Board is optimistic that the remaining properties in the Chengdu and Tianjin development projects will generate substantial revenue upon the recovery of China's commercial property market[9](index=9&type=chunk) [Financial Review](index=6&type=section&id=Financial%20Review) Net assets increased, but cash decreased, with higher total debt and gearing; operating cash flow improved, finance costs were stable, and no dividends were declared [Asset Value](index=6&type=section&id=Asset%20Value) As of June 30, 2025, net assets attributable to owners were HKD 730.0 million, or HKD 0.50 per share, with fully diluted net assets at HKD 0.27 per share Overview of Net Assets | Indicator | As of June 30, 2025 (HKD million) | | :--- | :--- | | Net assets attributable to owners of the parent | 730.0 | | Net asset value per share (Basic) | HKD 0.50 | | Net asset value per share (Fully diluted) | HKD 0.27 | [Capital Resources and Funding](index=7&type=section&id=Capital%20Resources%20and%20Funding) The Group maintains prudent financial policies, extending HKD 857.0 million loan facilities to 2027 to align with project sales, funding development costs internally and through pre-sales - The Group adopts prudent funding and financial policies, with cash balances primarily held in banks[18](index=18&type=chunk) - A supplemental agreement was entered into with Regal Group to extend the repayment date for loan facilities totaling **HKD 857.0 million** from October 12, 2024, to October 12, 2027, to align with the sales progress of development projects[19](index=19&type=chunk) - Construction and related costs for property development projects are primarily funded by internal resources, proceeds from pre-sale units, and loan facilities granted by Regal Group[19](index=19&type=chunk) [Cash Flow](index=7&type=section&id=Cash%20Flow) Net cash used in operating activities for H1 2025 improved to HKD 73.3 million, with net interest expenses remaining stable Cash Flow Overview | Indicator | As of June 30, 2025 (HKD million) | As of June 30, 2024 (HKD million) | | :--- | :--- | :--- | | Net cash flow used in operating activities | 73.3 | 157.7 | | Net interest expenses | 12.4 | 12.8 | [Debt and Gearing Ratio](index=7&type=section&id=Debt%20and%20Gearing%20Ratio) As of June 30, 2025, cash decreased, total debt net of cash rose to HKD 1,403.7 million, and the gearing ratio increased to 42.2% Debt and Gearing Ratio Overview | Indicator | As of June 30, 2025 (HKD million) | As of December 31, 2024 (HKD million) | | :--- | :--- | :--- | | Cash and bank balances together with time deposits | 35.0 | 52.5 | | Total debt net of cash | 1,403.7 | 1,324.0 | | Gearing ratio | 42.2% | 40.1% | | Total assets | 3,326.9 | 3,303.5 | [Lease Liabilities](index=8&type=section&id=Lease%20Liabilities) As of June 30, 2025, the Group had no lease liabilities, consistent with the prior year-end position - As of June 30, 2025, the Group had no lease liabilities[23](index=23&type=chunk) [Pledge of Assets](index=8&type=section&id=Pledge%20of%20Assets) The Group pledged equity interests in property project companies to secure debts, with certain bank deposits and financial assets also pledged for banking facilities - The Group has pledged equity interests in companies holding interests in certain property projects to secure its other debts[24](index=24&type=chunk) - As of December 31, 2024, bank deposits of **HKD 27.2 million** and financial assets at fair value through profit or loss were pledged to secure general banking facilities[24](index=24&type=chunk) [Capital Commitments](index=8&type=section&id=Capital%20Commitments) Details of the Group's capital commitments as of June 30, 2025, are presented in the interim financial statements - Details of the Group's capital commitments as of June 30, 2025, are set out in the interim financial statements[25](index=25&type=chunk) [Contingent Liabilities](index=8&type=section&id=Contingent%20Liabilities) Details of the Group's contingent liabilities as of June 30, 2025, are presented in the interim financial statements - Details of the Group's contingent liabilities as of June 30, 2025, are set out in the interim financial statements[26](index=26&type=chunk) [Dividends](index=8&type=section&id=Dividends) The Board resolved not to declare an interim dividend for the financial year ending December 31, 2025, consistent with 2024 - The Board resolved not to declare an interim dividend for the financial year ending December 31, 2025[27](index=27&type=chunk) Financial Statements [Condensed Consolidated Statement of Profit or Loss](index=9&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss) H1 2025 revenue decreased, gross profit grew, operating and pre-tax losses narrowed, and a tax credit led to a reduced loss for the period Summary of Condensed Consolidated Statement of Profit or Loss | Indicator | As of June 30, 2025 (HKD million) | As of June 30, 2024 (HKD million) | | :--- | :--- | :--- | | Revenue | 16.0 | 314.3 | | Cost of sales | (13.7) | (312.9) | | Gross profit | 2.3 | 1.4 | | Other income and gains | 1.7 | 5.9 | | Operating loss | (21.2) | (36.0) | | Finance costs | (39.0) | (39.3) | | Loss before tax | (60.2) | (75.3) | | Income tax | 3.7 | (93.7) | | Loss for the period | (56.5) | (169.0) | | Basic and diluted loss per share attributable to owners of the parent | HKD (3.84) cents | HKD (11.50) cents | [Condensed Consolidated Statement of Comprehensive Income](index=11&type=section&id=Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) H1 2025 loss was HKD 56.5 million, with foreign exchange gains offsetting equity investment losses, leading to a significantly narrowed total comprehensive loss Summary of Condensed Consolidated Statement of Comprehensive Income | Indicator | As of June 30, 2025 (HKD million) | As of June 30, 2024 (HKD million) | | :--- | :--- | :--- | | Loss for the period | (56.5) | (169.0) | | Exchange differences on translating foreign operations | 51.5 | (40.9) | | Fair value change of equity investments designated at fair value through other comprehensive income | (0.8) | 3.6 | | Total comprehensive loss for the period | (5.8) | (206.3) | [Condensed Consolidated Statement of Financial Position](index=12&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, non-current assets were HKD 203.4 million, current assets increased significantly, and net assets grew to HKD 734.1 million Summary of Condensed Consolidated Statement of Financial Position | Indicator | As of June 30, 2025 (HKD million) | As of December 31, 2024 (HKD million) | | :--- | :--- | :--- | | Total non-current assets | 203.4 | 196.0 | | Total current assets | 3,123.5 | 3,107.5 | | Properties under development | – | 1,207.6 | | Properties held for sale | 2,917.5 | 1,660.2 | | Total current liabilities | (1,186.4) | (925.6) | | Total non-current liabilities | (1,406.4) | (1,696.8) | | Net assets | 734.1 | 681.1 | | Equity attributable to owners of the parent | 730.0 | 681.1 | Notes to the Financial Statements [Basis of Preparation and Accounting Policies](index=14&type=section&id=Basis%20of%20Preparation%20and%20Accounting%20Policies) The condensed consolidated financial statements adhere to HKAS 34, with consistent accounting policies, and the going concern assumption is based on future cash flows and post-reporting events - The condensed consolidated financial statements are prepared in accordance with Hong Kong Accounting Standard 34 issued by the Hong Kong Institute of Certified Public Accountants[33](index=33&type=chunk) - The amendments to HKAS 21 were initially adopted, but as the Group's transaction currency and functional currency are convertible, these amendments had no impact on the condensed consolidated financial statements[34](index=34&type=chunk) - The going concern assumption is based on estimated cash flows for the next 12 months, property promotion plans, and a share placement completed after the reporting period[34](index=34&type=chunk) [Segment Information](index=15&type=section&id=Segment%20Information) The Group's property development segment saw revenue decline but loss narrow, while financial assets turned profitable, leading to reduced overall operating and pre-tax losses - The Group's business is divided into property development and investment (including property development and sales, and property leasing) and financial asset investment (trading financial assets at fair value through profit or loss and other financial asset investments)[35](index=35&type=chunk)[36](index=36&type=chunk) Revenue and Profit/(Loss) by Segment | Segment | As of June 30, 2025 (HKD million) | As of June 30, 2024 (HKD million) | | :--- | :--- | :--- | | **Property Development and Investment** | | | | Sales to external customers | 15.0 | 313.5 | | Segment results | (12.2) | (12.7) | | **Financial Asset Investment** | | | | Sales to external customers | 1.0 | 0.8 | | Segment results | 1.3 | (10.9) | | **Consolidated** | | | | Sales to external customers | 16.0 | 314.3 | | Operating loss | (21.2) | (36.0) | | Loss before tax | (60.2) | (75.3) | | Loss for the period | (56.5) | (169.0) | [Analysis of Revenue, Other Income and Gains](index=17&type=section&id=Analysis%20of%20Revenue%2C%20Other%20Income%20and%20Gains) Revenue primarily stemmed from property sales, rental income, and net financial asset gains, with other income mainly comprising interest income Analysis of Revenue, Other Income and Gains | Item | As of June 30, 2025 (HKD million) | As of June 30, 2024 (HKD million) | | :--- | :--- | :--- | | **Revenue** | | | | Proceeds from property sales | 13.9 | 312.8 | | Rental income | 1.1 | 0.7 | | Net gain on disposal of financial assets at fair value through profit or loss | 0.4 | – | | Dividend income from listed investments | 0.6 | 0.8 | | **Other income and gains** | | | | Bank interest income | – | 0.1 | | Other interest income | 1.6 | – | | Gain on disposal of items of property, plant and equipment | 0.1 | – | | Others | – | 5.8 | [Analysis of Profit from Property Sales and Depreciation](index=18&type=section&id=Analysis%20of%20Profit%20from%20Property%20Sales%20and%20Depreciation) Net profit from property sales increased to HKD 0.4 million, with property, plant, and equipment depreciation at HKD 0.3 million Analysis of Profit from Property Sales and Depreciation | Item | As of June 30, 2025 (HKD million) | As of June 30, 2024 (HKD million) | | :--- | :--- | :--- | | Net profit on disposal of properties | 0.4 | 0.1 | | Depreciation of property, plant and equipment | 0.3 | 0.4 | | Depreciation of right-of-use assets | – | 0.2 | [Analysis of Finance Costs](index=18&type=section&id=Analysis%20of%20Finance%20Costs) Total finance costs for the period were HKD 39.0 million, comparable to the prior year, mainly comprising interest on other debts and convertible notes Analysis of Finance Costs | Item | As of June 30, 2025 (HKD million) | As of June 30, 2024 (HKD million) | | :--- | :--- | :--- | | Interest on a bank loan | 0.2 | 0.4 | | Interest on convertible notes | 1.7 | 1.7 | | Interest on other debts | 37.1 | 37.2 | | **Total** | **39.0** | **39.3** | [Analysis of Income Tax Expense/(Credit)](index=19&type=section&id=Analysis%20of%20Income%20Tax%20Expense%2F%28Credit%29) The period recorded an income tax credit of HKD 3.7 million, mainly from land appreciation and deferred tax credits, a shift from the prior year's tax expense Analysis of Income Tax Expense/(Credit) | Item | As of June 30, 2025 (HKD million) | As of June 30, 2024 (HKD million) | | :--- | :--- | :--- | | Current － PRC tax expense for the period | – | 6.4 | | Underprovision in prior years | 0.3 | – | | Land Appreciation Tax | (3.0) | 78.6 | | Deferred tax | (1.0) | 8.7 | | **Total tax expense/(credit) for the period** | **(3.7)** | **93.7** | - No provision for Hong Kong profits tax was made for the current period, and profits tax for PRC subsidiaries is calculated at applicable tax rates[42](index=42&type=chunk)[43](index=43&type=chunk) - PRC Land Appreciation Tax is levied at progressive rates from **30% to 60%** on the appreciation value derived from the sale or transfer of state-owned land use rights, buildings, and their ancillary facilities[43](index=43&type=chunk) [Dividends](index=20&type=section&id=Dividends) No dividends were paid or declared during the six months ended June 30, 2025, nor after the reporting period - No dividends were paid or declared during the six months ended June 30, 2025[44](index=44&type=chunk) [Loss Per Share](index=20&type=section&id=Loss%20Per%20Share) Basic loss per share for H1 2025 significantly reduced to HKD (3.84) cents, with no dilution adjustment due to anti-dilutive convertible notes Loss Per Share | Indicator | As of June 30, 2025 | As of June 30, 2024 | | :--- | :--- | :--- | | Loss for the period attributable to owners of the parent | HKD 56,500,000 | HKD 169,000,000 | | Weighted average number of ordinary shares in issue | 1,469,200,000 shares | 1,469,200,000 shares | | Basic loss per share | HKD (3.84) cents | HKD (11.50) cents | - No adjustment was made for the dilutive effect on the loss per share presented for these periods, as the outstanding convertible notes had an anti-dilutive impact on the loss per share[44](index=44&type=chunk) [Deposits, Prepayments and Other Assets](index=21&type=section&id=Deposits%2C%20Prepayments%20and%20Other%20Assets) As of June 30, 2025, non-current prepayments for the Xinjiang project are fully recoverable, and current assets include HKD 132.2 million from financial asset redemption Analysis of Deposits, Prepayments and Other Assets | Item | As of June 30, 2025 (HKD million) | As of December 31, 2024 (HKD million) | | :--- | :--- | :--- | | Non-current prepayments | 152.5 | 144.3 | | Current trade receivables | 0.9 | 0.5 | | Current prepayments | 26.1 | 19.6 | | Other receivables | 138.0 | 135.8 | | **Total** | **165.1** | **156.0** | - Non-current prepayments primarily relate to Xinjiang afforestation project costs, which the directors believe are fully recoverable in the future[45](index=45&type=chunk) - Other receivables include **HKD 132.2 million** due from a brokerage firm, representing proceeds from the redemption of certain financial assets[47](index=47&type=chunk) Aging Analysis of Trade Receivables | Aging | As of June 30, 2025 (HKD million) | As of December 31, 2024 (HKD million) | | :--- | :--- | :--- | | Within 3 months | 0.4 | – | | Over 1 year | 1.0 | 1.0 | | Total (before impairment) | 1.4 | 1.0 | | Impairment | (0.5) | (0.5) | | **Total (after impairment)** | **0.9** | **0.5** | [Other Debts](index=23&type=section&id=Other%20Debts) As of June 30, 2025, total other debts were HKD 1,398.0 million, including secured notes and other loans, with varying repayment terms and some secured by property project equity Analysis of Other Debts | Item | As of June 30, 2025 (HKD million) | As of December 31, 2024 (HKD million) | | :--- | :--- | :--- | | Secured notes | 468.0 | 468.0 | | Other loans | 930.0 | 857.0 | | **Total** | **1,398.0** | **1,325.0** | | **Repayment terms** | | | | Within one year | 541.0 | 156.0 | | In the second year | – | 312.0 | | In the third to fifth year | 857.0 | 857.0 | - The Group issued three-year unsecured Note A (US$20,000,000) and three-year secured Note B (US$40,000,000); after the issuance of Note B, the Group pledged equity interests in the holding company of the Chengdu property development project to the holders of Notes A and B[48](index=48&type=chunk)[49](index=49&type=chunk) - Other loans include a term loan of **HKD 357.0 million** and a revolving loan of **HKD 500.0 million** from fellow subsidiaries, both secured by equity interests in holding companies related to property development projects and maturing on October 12, 2027[49](index=49&type=chunk) Other Information [Events After Reporting Period](index=24&type=section&id=Events%20After%20Reporting%20Period) On July 31, 2025, the Company agreed to place up to 100,000,000 new ordinary shares at HKD 0.108 each, completing the placing on August 15, 2025 - On July 31, 2025, the Company entered into a placing agreement with a placing agent to place up to **100,000,000 new ordinary shares** at a placing price of **HKD 0.108** per share[50](index=50&type=chunk) - The placing was formally completed on August 15, 2025[50](index=50&type=chunk) [Repurchase, Sale or Redemption of the Company's Listed Securities](index=24&type=section&id=Repurchase%2C%20Sale%20or%20Redemption%20of%20the%20Company%27s%20Listed%20Securities) During H1 2025, neither the Company nor its subsidiaries repurchased, sold, or redeemed any of the Company's listed securities - During 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[51](index=51&type=chunk) [Review of Results](index=24&type=section&id=Review%20of%20Results) The Group's H1 2025 condensed consolidated financial statements are unaudited but reviewed by Ernst & Young and the Audit Committee - The Group's condensed consolidated financial statements for the six months ended June 30, 2025, are unaudited but have been reviewed by external auditor Ernst & Young[52](index=52&type=chunk) - The Audit Committee has reviewed the condensed consolidated financial statements, including the accounting principles and practices adopted, with the external auditor[52](index=52&type=chunk) [Corporate Governance](index=24&type=section&id=Corporate%20Governance) The Company complied with the Corporate Governance Code for H1 2025, except for the non-segregation of Chairman and CEO roles - The Company has complied with the code provisions of the Corporate Governance Code set out in Appendix C1 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited for the six months ended June 30, 2025[53](index=53&type=chunk) - The roles of Chairman and Chief Executive Officer are not segregated and held by two separate individuals, which is an exception to the Corporate Governance Code[53](index=53&type=chunk) [Board of Directors](index=25&type=section&id=Board%20of%20Directors) The Board comprises executive directors, including the Chairman and CEO, Vice Chairmen, COO, and CFO, alongside independent non-executive directors - The Board of Directors includes Executive Directors Mr. Lo Yuk Sui (Chairman and Chief Executive Officer), Mr. Lo Chun To (Vice Chairman and Managing Director), Ms. Lo Po Man (Vice Chairman), Mr. Wong Po Man (Chief Operating Officer), and Mr. Leung So Po (Chief Financial Officer)[54](index=54&type=chunk) - Independent Non-executive Directors include Mr. Poon Sul Ying, Ms. Kan Lai Kuen, Mr. Lee Ka Fai, Mr. Shih Lai Him, and Mr. Ng Kai Kai[54](index=54&type=chunk)

[Financial Highlights](index=1&type=section&id=Financial%20Highlights) This section provides a high-level overview of the company's financial performance, highlighting key metrics and their year-on-year changes [Key Financial Data](index=1&type=section&id=Key%20Financial%20Data) For the six months ended June 30, 2025, the company's revenue significantly decreased by 57.2% to RMB 23,940 thousand, gross profit decreased by 61.8% to RMB 2,404 thousand, and gross margin fell from 11.3% to 10.0%, while net loss for the period narrowed by 50.2% to RMB (11,513) thousand, with basic and diluted loss per share of RMB (0.08) | Metric | 2025 (thousand RMB) | 2024 (thousand RMB) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 23,940 | 55,949 | -57.2% | | Gross Profit | 2,404 | 6,298 | -61.8% | | Gross Margin | 10.0% | 11.3% | -1.3 pp | | Net Loss for the Period | (11,513) | (23,149) | -50.2% | | Loss Per Share (Basic and Diluted) | (0.08) RMB | (0.31) RMB | -74.2% | [Condensed Consolidated Interim Statement of Comprehensive Income](index=2&type=section&id=Condensed%20Consolidated%20Interim%20Statement%20of%20Comprehensive%20Income) This section presents the company's financial performance over the interim period, detailing revenue, expenses, and comprehensive income [Statement of Profit or Loss](index=2&type=section&id=Statement%20of%20Profit%20or%20Loss) For the six months ended June 30, 2025, the company's revenue significantly declined, but net loss for the period narrowed considerably due to cost control and reversal of impairment losses on financial assets, with various expenses showing decreases | Metric | 2025 (thousand RMB) | 2024 (thousand RMB) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 23,940 | 55,949 | -57.2% | | Cost of Sales | (21,536) | (49,651) | -56.6% | | Gross Profit | 2,404 | 6,298 | -61.8% | | Other Income | 744 | 1,445 | -48.5% | | Net Other Losses | (1) | (2,965) | -99.9% | | Selling and Distribution Expenses | (6,579) | (10,429) | -36.9% | | Administrative Expenses | (5,440) | (9,518) | -42.8% | | Research and Development Expenses | (2,265) | (2,798) | -19.0% | | Impairment Loss on Investments | (658) | – | N/A | | Reversal of Impairment Loss on Financial Assets / (Impairment Loss) | 1,825 | (1,817) | N/A | | Operating Loss | (9,970) | (19,784) | -49.6% | | Net Finance Costs | (1,337) | (3,125) | -57.2% | | Loss Before Income Tax | (11,496) | (23,122) | -50.3% | | Loss for the Period | (11,513) | (23,149) | -50.2% | [Other Comprehensive Income](index=3&type=section&id=Other%20Comprehensive%20Income) For the six months ended June 30, 2025, the company recorded a foreign currency translation difference loss of RMB 245 thousand, resulting in a total comprehensive loss of RMB (10,472) thousand for the period, a narrowing from RMB (23,394) thousand in the prior period | Metric | 2025 (thousand RMB) | 2024 (thousand RMB) | | :--- | :--- | :--- | | Exchange differences on translation of foreign operations | (245) | 1,041 | | Other comprehensive income / (loss) for the period, net of tax | (245) | 1,041 | | Total comprehensive loss for the period | (10,472) | (23,394) | [Condensed Consolidated Interim Statement of Financial Position](index=4&type=section&id=Condensed%20Consolidated%20Interim%20Statement%20of%20Financial%20Position) This section outlines the company's financial position, detailing its assets, equity, and liabilities at the end of the interim period [Assets](index=4&type=section&id=Assets) As of June 30, 2025, total assets increased to RMB 173,836 thousand, primarily driven by significant increases in cash and cash equivalents and prepayments, despite a substantial decrease in trade receivables | Metric | June 30, 2025 (thousand RMB) | December 31, 2024 (thousand RMB) | Change (%) | | :--- | :--- | :--- | :--- | | Total Non-current Assets | 17,278 | 19,659 | -12.2% | | Inventories | 28,337 | 30,713 | -7.8% | | Net Trade Receivables | 2,861 | 24,645 | -88.4% | | Other Receivables, Deposits and Prepayments | 78,083 | 59,796 | +30.6% | | Cash and Cash Equivalents | 45,939 | 2,299 | +1900.4% | | Total Current Assets | 156,558 | 117,811 | +32.9% | | Total Assets | 173,836 | 137,470 | +26.5% | [Equity and Liabilities](index=4&type=section&id=Equity%20and%20Liabilities) As of June 30, 2025, total equity significantly increased to RMB 87,923 thousand, primarily due to an increase in share capital, while total liabilities decreased, with reductions in both current and non-current liabilities | Metric | June 30, 2025 (thousand RMB) | December 31, 2024 (thousand RMB) | Change (%) | | :--- | :--- | :--- | :--- | | Share Capital | 81,256 | 25,758 | +215.5% | | Share Premium | 106,317 | 106,793 | -0.4% | | Reserves | (100,952) | (90,493) | +11.6% | | Equity Attributable to Owners of the Company | 86,621 | 42,058 | +106.0% | | Non-controlling Interests | 1,302 | 335 | +288.7% | | Total Equity | 87,923 | 42,393 | +107.4% | | Total Non-current Liabilities | 4,443 | 6,591 | -32.6% | | Total Current Liabilities | 81,470 | 88,486 | -7.9% | | Total Liabilities | 85,913 | 95,077 | -9.6% | | Total Equity and Liabilities | 173,836 | 137,470 | +26.5% | [Notes to the Condensed Consolidated Interim Financial Information](index=6&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Interim%20Financial%20Information) This section provides detailed explanations and disclosures regarding the condensed consolidated interim financial information [General Information and Basis of Preparation](index=6&type=section&id=General%20Information%20and%20Basis%20of%20Preparation) The company is incorporated in the Cayman Islands, primarily engaged in the development, manufacturing, and sale of kitchenware and health-related products in China, with its shares listed on the Main Board of the Hong Kong Stock Exchange on July 16, 2018, and interim financial information prepared in accordance with HKAS 34 and presented in RMB - The Company was incorporated on May 16, 2017, under the Companies Law of the Cayman Islands, primarily engaged in the development, manufacturing, and sale of kitchenware and health-related products in China[10](index=10&type=chunk) - The Company's shares were listed on the Main Board of The Stock Exchange of Hong Kong Limited on July 16, 2018[11](index=11&type=chunk) - The condensed consolidated interim financial information is prepared in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting" issued by the Hong Kong Institute of Certified Public Accountants and presented in RMB[12](index=12&type=chunk)[13](index=13&type=chunk) [Accounting Policies](index=6&type=section&id=Accounting%20Policies) The condensed consolidated financial statements are prepared on a historical cost basis, with accounting policies and methods consistent with the 2024 annual financial statements, and amendments to HKFRSs having no significant impact on the current period's financial position and performance - The condensed consolidated financial statements are prepared on a historical cost basis[14](index=14&type=chunk) - Amendments to HKFRSs were first applied in the current interim period, but they had no significant impact on the Group's financial position and performance[15](index=15&type=chunk) [Segment Information](index=7&type=section&id=Segment%20Information) The company operates in two segments: kitchenware development, manufacturing, and sales, and health-related product sales, with both segments recording losses for the six months ended June 30, 2025, and primary business activities concentrated in China - The Group's operating segments include the development, manufacturing, and sale of kitchenware, and the sale of health-related products[16](index=16&type=chunk) Revenue by Product Category | Product Category | 2025 (thousand RMB) | 2024 (thousand RMB) | | :--- | :--- | :--- | | Kitchenware | 15,794 | 22,555 | | Health-related Products | 8,146 | 33,394 | | **Total Revenue** | **23,940** | **55,949** | Segment Revenue and Loss | Segment | 2025 Segment Revenue (thousand RMB) | 2025 Segment Loss (thousand RMB) | | :--- | :--- | :--- | | Kitchenware Development, Manufacturing and Sales | 15,794 | (7,784) | | Health-related Product Sales | 8,146 | (20) | | **Total** | **23,940** | **(7,804)** | - The Group's business is primarily conducted in China, with most assets and liabilities located in China[19](index=19&type=chunk) [Expenses by Nature](index=8&type=section&id=Expenses%20by%20Nature) For the six months ended June 30, 2025, cost of materials used, employee benefit expenses, and consignment fees all significantly decreased, reflecting the company's efforts in cost control | Expense Category | 2025 (thousand RMB) | 2024 (thousand RMB) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Cost of materials used | 21,536 | 49,651 | -56.6% | | Employee benefit expenses | 4,303 | 8,466 | -49.2% | | Consignment fees | 546 | 1,742 | -68.6% | | Depreciation of property, plant and equipment | 1,051 | 752 | +39.8% | [Income Tax Expense](index=9&type=section&id=Income%20Tax%20Expense) For the six months ended June 30, 2025, income tax expense decreased from RMB 27 thousand in the prior period to RMB 17 thousand, primarily due to a reduction in taxable profit | Metric | 2025 (thousand RMB) | 2024 (thousand RMB) | | :--- | :--- | :--- | | Current income tax | – | 1 | | Deferred income tax | 17 | 26 | | **Income Tax Expense** | **17** | **27** | - The decrease in income tax expense was primarily due to a reduction in taxable profit[22](index=22&type=chunk) [Loss Per Share](index=9&type=section&id=Loss%20Per%20Share) For the six months ended June 30, 2025, basic and diluted loss per share was RMB (0.08), a significant narrowing from RMB (0.31) in the prior period, primarily due to reduced loss for the period and an increase in the weighted average number of ordinary shares outstanding from the rights issue | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Loss attributable to owners of the Company (thousand RMB) | (11,500) | (23,149) | | Weighted average number of ordinary shares in issue | 141,119,472 | 75,612,000 | | Basic loss per share (RMB) | (0.08) | (0.31) | - The calculation of basic and diluted loss per share has been adjusted to reflect the effects of the 2025 rights issue and the 2024 share consolidation[23](index=23&type=chunk) - As there were no potential dilutive ordinary shares during the period, diluted loss per share was the same as basic loss per share[24](index=24&type=chunk) [Trade Receivables](index=9&type=section&id=Trade%20Receivables) As of June 30, 2025, net trade receivables significantly decreased by 88.4% to RMB 2,861 thousand, primarily due to reduced sales revenue during the interim period, with a typical credit period of 60 to 180 days Trade Receivables Breakdown | Metric | June 30, 2025 (thousand RMB) | December 31, 2024 (thousand RMB) | | :--- | :--- | :--- | | Trade receivables | 14,969 | 38,578 | | Less: Loss allowance | (12,108) | (13,933) | | **Net Trade Receivables** | **2,861** | **24,645** | - Net trade receivables decreased by **88.4%**, primarily due to reduced sales revenue during the interim period[25](index=25&type=chunk)[64](index=64&type=chunk) - The credit period for trade receivables typically ranges from **60 to 180 days**[27](index=27&type=chunk)[64](index=64&type=chunk) Trade Receivables Aging | Aging | June 30, 2025 (thousand RMB) | December 31, 2024 (thousand RMB) | | :--- | :--- | :--- | | 1 to 30 days | 1,985 | 15,425 | | 31 to 60 days | 169 | 907 | | 61 to 90 days | 367 | 9,810 | | Over 90 days | 12,448 | 12,436 | [Trade Payables](index=10&type=section&id=Trade%20Payables) As of June 30, 2025, total trade payables increased to RMB 14,912 thousand, up from RMB 12,710 thousand as of December 31, 2024 | Aging | June 30, 2025 (thousand RMB) | December 31, 2024 (thousand RMB) | | :--- | :--- | :--- | | 1 to 30 days | 7,238 | 5,336 | | 31 to 60 days | – | 1,527 | | 61 to 90 days | 610 | 319 | | Over 90 days | 7,064 | 5,528 | | **Total** | **14,912** | **12,710** | [Dividends](index=10&type=section&id=Dividends) For the six months ended June 30, 2025 and 2024, the company did not declare any dividends - The Company did not declare any dividends for the six months ended June 30, 2025 and 2024[30](index=30&type=chunk) [Other Receivables, Deposits and Prepayments](index=17&type=section&id=Other%20Receivables,%20Deposits%20and%20Prepayments) As of June 30, 2025, total other receivables, deposits, and prepayments increased to RMB 78,083 thousand, primarily due to increased prepayments for inventory purchases from suppliers Other Receivables, Deposits and Prepayments Breakdown | Metric | June 30, 2025 (thousand RMB) | December 31, 2024 (thousand RMB) | | :--- | :--- | :--- | | Non-current deposits | – | 210 | | Prepayments | 69,665 | 48,161 | | Deposits paid to consignment stores | 1,918 | 5,525 | | Other receivables | 5,451 | 5,136 | | Recoverable VAT | 1,257 | 1,182 | | Less: Provision for expected credit losses on other receivables | (208) | (208) | | **Total** | **78,083** | **60,006** | - Prepayments increased by **44.7%** to **RMB 69.7 million**, primarily due to increased prepayments to suppliers[63](index=63&type=chunk) [Management Discussion and Analysis](index=12&type=section&id=Management%20Discussion%20and%20Analysis) This section provides an overview of the company's operations, financial performance, and future outlook, along with detailed explanations of key financial items and risk factors [Business Review and Outlook](index=12&type=section&id=Business%20Review%20and%20Outlook) The Group primarily researches, develops, produces, and sells kitchenware and health-related products in China through diversified distribution channels, facing significant revenue decline due to consumption contraction, market competition, high inflation, and interest rates, but plans to develop new products, implement strict cost control, and consider business diversification to enhance performance - The Group primarily researches, develops, produces, and trades kitchenware and health-related products in China, distributing through channels such as distributors, consignment, TV platforms, online platforms, and corporate clients[35](index=35&type=chunk) - The Chinese economy grew by **5.3%** as scheduled in the first half of 2025, but the company continued to be affected by consumption contraction, intense market competition, high inflation, and interest rates[36](index=36&type=chunk) - The company's revenue decreased by **57.2%** to **RMB 23.9 million**, gross margin fell from **11.3%** to **10.0%**, but net loss narrowed to **RMB 11.5 million**, primarily due to reduced revenue and corresponding cost expenses[36](index=36&type=chunk) - Looking ahead, the Group will continue to develop new products, implement strict cost control measures, and consider business diversification to create value[37](index=37&type=chunk) [Financial Review](index=12&type=section&id=Financial%20Review) The financial performance for the period was affected by multiple factors, with a significant decline in revenue, but net loss narrowed due to cost control and reversal of impairment losses on financial assets, with various expenses generally decreasing, reflecting the company's austerity measures in an unfavorable market environment [Revenue](index=12&type=section&id=Revenue) The Group's total revenue decreased by 57.2% year-on-year to RMB 23.9 million, primarily due to a significant decline in health-related product sales and physical store revenue, though online platform sales increased - The Group's total revenue decreased by **57.2%** from **RMB 55.9 million** for the six months ended June 30, 2024, to approximately **RMB 23.9 million**[38](index=38&type=chunk) [Revenue by Product Category](index=13&type=section&id=Revenue%20by%20Product%20Category) Health-related product sales revenue significantly decreased by 75.6% to RMB 8,146 thousand, causing its proportion of total revenue to fall from 59.7% to 34.0%, while revenue from stoves (radiation) also decreased, but its proportion of total revenue increased | Product Category | 2025 (thousand RMB) | % of Total Revenue | 2024 (thousand RMB) | % of Total Revenue | | :--- | :--- | :--- | :--- | :--- | | Stoves (radiation) | 10,151 | 42.4 | 17,066 | 30.5 | | Stoves (induction) | 684 | 2.9 | 1,193 | 2.1 | | Pots and pans | 3,427 | 14.3 | 3,123 | 5.6 | | Health-related products | 8,146 | 34.0 | 33,394 | 59.7 | | Others | 1,532 | 6.4 | 1,173 | 2.1 | | **Total** | **23,940** | **100.0** | **55,949** | **100.0** | [Revenue by Geographical Region](index=13&type=section&id=Revenue%20by%20Geographical%20Region) The vast majority of the Group's revenue is derived from the Chinese market - The vast majority of the Group's revenue is derived from China[42](index=42&type=chunk) [Revenue by Sales Channel](index=13&type=section&id=Revenue%20by%20Sales%20Channel) Revenue from physical sales locations significantly decreased by 75.1%, being the primary reason for the decline in total revenue, while online platform sales revenue, however, grew by 11.6%, reflecting changes in consumer preferences | Sales Channel | 2025 (thousand RMB) | % of Total Revenue | 2024 (thousand RMB) | % of Total Revenue | | :--- | :--- | :--- | :--- | :--- | | **Direct Sales** | **7,824** | **32.7** | **10,418** | **18.6** | | Consignment stores | 6,273 | 26.2 | 7,501 | 13.4 | | Corporate clients | 358 | 1.5 | 189 | 0.3 | | TV platforms | 1,193 | 5.0 | 2,728 | 4.9 | | **Distributors** | **16,116** | **67.3** | **45,531** | **81.4** | | Online platforms | 6,133 | 25.6 | 5,497 | 9.8 | | Physical sales locations | 9,983 | 41.7 | 40,034 | 71.6 | | **Total** | **23,940** | **100.0** | **55,949** | **100.0** | [Direct Sales](index=14&type=section&id=Direct%20Sales) Within direct sales channels, revenue from consignment stores and TV platforms decreased due to consumption downgrade and reduced product sales, but corporate client sales increased due to higher orders from property developers - Revenue from consignment stores decreased by **16.4%** to **RMB 6.3 million**, primarily due to reduced consumer spending amid a consumption downgrade trend[45](index=45&type=chunk) - Revenue from corporate client sales increased by **89.4%** to **RMB 0.4 million**, primarily due to increased sales orders from property developers in China[46](index=46&type=chunk) - Direct sales revenue from TV platforms decreased by **56.3%** to **RMB 1.2 million**, primarily due to consumption downgrade and reduced sales of kitchenware products[47](index=47&type=chunk) [Distributor Sales](index=14&type=section&id=Distributor%20Sales) In distributor sales, online platform revenue grew by 11.6%, reflecting a shift in consumer preference towards shopping on social media platforms; meanwhile, physical sales location revenue significantly decreased by 75.1%, mainly affected by consumption downgrade and reduced health-related product sales - Online platform sales revenue increased by **11.6%** to **RMB 6.1 million**, due to consumers increasingly preferring to select and purchase merchants' products on social media platforms[48](index=48&type=chunk) - Revenue from physical sales locations decreased by **75.1%** to **RMB 10.0 million**, primarily due to reduced consumer spending amid a consumption downgrade trend and decreased sales of health-related products[49](index=49&type=chunk) [Gross Profit and Gross Margin](index=14&type=section&id=Gross%20Profit%20and%20Gross%20Margin) The Group's gross margin decreased from 11.3% to 10.0%, primarily due to the reclassification of inventory impairment losses to cost of sales, partially offset by the positive impact of a significant reduction in sales of lower-margin health-related products - Gross margin decreased from **11.3%** to **10.0%**, primarily due to the reclassification of **RMB 1.1 million** in inventory impairment losses from other losses to cost of sales during the interim period[50](index=50&type=chunk) - The significant reduction in sales of lower-margin health-related products had a positive impact on gross margin, partially offsetting the aforementioned negative factors[50](index=50&type=chunk) [Other Income](index=15&type=section&id=Other%20Income) Other income decreased by 48.5% year-on-year to RMB 0.7 million, primarily due to a reduction in license income - Other income primarily includes government grants, license income, management fee income, and miscellaneous income[51](index=51&type=chunk) - Other income decreased by **48.5%** to **RMB 0.7 million**, primarily due to a reduction in license income[51](index=51&type=chunk) [Other Losses](index=15&type=section&id=Other%20Losses) Other losses of RMB 1 thousand were recorded for the current period, a significant reduction from RMB 3.0 million in the prior period, primarily attributable to the reclassification of inventory impairment losses to cost of sales - Other losses of **RMB 1 thousand** were recorded for the current period, compared to **RMB 3.0 million** in the prior period, primarily attributable to the reclassification of **RMB 1.1 million** in inventory impairment losses from other losses to cost of sales during the interim period[52](index=52&type=chunk) [Selling and Distribution Expenses](index=15&type=section&id=Selling%20and%20Distribution%20Expenses) Selling and distribution expenses decreased by 36.9% year-on-year to RMB 6.6 million, primarily due to reduced consignment fees and a lower proportion of sales through TV platforms - Selling and distribution expenses decreased by **36.9%** to **RMB 6.6 million**, primarily due to reduced consignment fees and a lower proportion of sales through TV platforms[53](index=53&type=chunk) [Administrative Expenses](index=15&type=section&id=Administrative%20Expenses) Administrative expenses decreased by 42.8% year-on-year to RMB 5.4 million, primarily attributable to reduced employee benefit expenses resulting from optimized departmental staffing - Administrative expenses decreased by **42.8%** to **RMB 5.4 million**, primarily attributable to reduced employee benefit expenses resulting from optimized departmental staffing[54](index=54&type=chunk) [Research and Development Expenses](index=15&type=section&id=Research%20and%20Development%20Expenses) Research and development expenses decreased by 19.0% year-on-year to RMB 2.3 million, primarily due to the Group's implementation of cost control measures - Research and development expenses decreased by **19.0%** to **RMB 2.3 million**, primarily due to the Group's implementation of cost control measures[55](index=55&type=chunk) [Impairment Loss on Investments](index=16&type=section&id=Impairment%20Loss%20on%20Investments) An impairment loss on investments of RMB 0.7 million was recorded for the current period, compared to zero in the prior period, attributable to the investee suspending business operations - Impairment loss on investments increased from zero to **RMB 0.7 million**, attributable to the investee suspending business operations[56](index=56&type=chunk) [Reversal of Impairment Loss on Financial Assets / (Impairment Loss)](index=16&type=section&id=Reversal%20of%20Impairment%20Loss%20on%20Financial%20Assets%20%2F%20(Impairment%20Loss)) A reversal of impairment loss on financial assets of RMB 1.8 million was recorded for the current period, compared to an impairment loss of RMB 1.8 million in the prior period, primarily due to improved collection management - A reversal of impairment loss on financial assets of **RMB 1.8 million** was recorded for the current period, compared to an impairment loss of **RMB 1.8 million** in the prior period, attributable to improved collection management and recovery of credit losses on financial assets[57](index=57&type=chunk) [Finance Income](index=16&type=section&id=Finance%20Income) Finance income primarily consists of bank interest income, which decreased from RMB 5 thousand to RMB 1 thousand in the current period - Finance income refers to bank interest income, which decreased from **RMB 5 thousand** to **RMB 1 thousand** in the current period[58](index=58&type=chunk) [Finance Costs](index=16&type=section&id=Finance%20Costs) Finance costs decreased by 57.3% year-on-year to RMB 1.3 million, primarily attributable to a lower proportion of high-interest borrowings and a reduction in outstanding loan balances - Finance costs decreased by **57.3%** to **RMB 1.3 million**, primarily attributable to a lower proportion of high-interest borrowings and a reduction in outstanding loan balances[59](index=59&type=chunk) [Income Tax Expense](index=16&type=section&id=Income%20Tax%20Expense) Income tax expense decreased from RMB 27 thousand to RMB 17 thousand, primarily due to a reduction in taxable profit - Income tax expense decreased to approximately **RMB 17 thousand**, primarily due to a reduction in taxable profit[60](index=60&type=chunk) [Net Loss](index=16&type=section&id=Net%20Loss) Net loss for the current period was RMB 11.5 million, a significant narrowing from RMB 23.1 million in the prior period, primarily benefiting from the control of various costs and expenses mentioned above - The Group recorded a net loss of **RMB 11.5 million** for the current interim period, compared to a net loss of **RMB 23.1 million** in the prior period[61](index=61&type=chunk) [Dividends](index=16&type=section&id=Dividends) The Board does not declare any dividends for the interim period - The Board does not declare any dividends for the interim period[62](index=62&type=chunk) [Other Receivables, Deposits and Prepayments](index=17&type=section&id=Other%20Receivables,%20Deposits%20and%20Prepayments) Prepayments increased by 44.7% from RMB 48.2 million as of December 31, 2024, to RMB 69.7 million as of June 30, 2025, primarily due to increased prepayments to suppliers - Prepayments increased by **44.7%** to **RMB 69.7 million**, primarily due to increased prepayments to suppliers[63](index=63&type=chunk) [Trade Receivables](index=17&type=section&id=Trade%20Receivables) Trade receivables decreased by 88.4% from RMB 24.6 million as of December 31, 2024, to RMB 2.9 million as of June 30, 2025, primarily due to reduced sales revenue during the interim period - Trade receivables decreased by **88.4%** to **RMB 2.9 million**, primarily due to reduced sales revenue during the interim period[64](index=64&type=chunk) [Capital Structure, Liquidity, Financial Resources and Gearing Ratio](index=18&type=section&id=Capital%20Structure,%20Liquidity,%20Financial%20Resources%20and%20Gearing%20Ratio) The company completed a rights issue to increase share capital, raising approximately HKD 58.9 million net proceeds for debt repayment and working capital, resulting in significantly increased net current assets, cash and cash equivalents, and improved current and gearing ratios - The company completed a rights issue, issuing **242,837,879** rights shares and raising approximately **HKD 58.9 million** in net proceeds[66](index=66&type=chunk) - As of June 30, 2025, the Company's issued share capital was **HKD 90,189,970**, divided into **360,759,879** shares with a par value of **HKD 0.25** each[66](index=66&type=chunk) Key Financial Ratios | Metric | June 30, 2025 (thousand RMB) | December 31, 2024 (thousand RMB) | | :--- | :--- | :--- | | Net current assets | 75.1 million | 29.3 million | | Cash and cash equivalents | 45.9 million | 2.3 million | | Borrowings | 50.8 million | 60.5 million | | Current ratio | 1.9 times | 1.3 times | | Gearing ratio | 0.6 | 1.4 | - The weighted average interest rate for borrowings was approximately **4.33%** per annum (December 31, 2024: 4.54%)[68](index=68&type=chunk) [Capital Commitments](index=19&type=section&id=Capital%20Commitments) As of June 30, 2025, the Group had no significant capital commitments - As of June 30, 2025, the Group had no significant capital commitments[70](index=70&type=chunk) [Contingent Liabilities](index=19&type=section&id=Contingent%20Liabilities) As of June 30, 2025, the Group had no significant contingent liabilities or guarantees - As of June 30, 2025, the Group had no significant contingent liabilities or guarantees[71](index=71&type=chunk) [Pledge of Assets](index=19&type=section&id=Pledge%20of%20Assets) As of June 30, 2025, the Group pledged land use rights and buildings with a carrying amount of approximately RMB 13.1 million as collateral for its borrowings of approximately RMB 26.1 million - As of June 30, 2025, the Group pledged land use rights and buildings with a carrying amount of approximately **RMB 13.1 million** as collateral for its borrowings of approximately **RMB 26.1 million**[72](index=72&type=chunk) [Material Acquisitions and Disposals of Assets, Subsidiaries, Associates and Joint Ventures](index=19&type=section&id=Material%20Acquisitions%20and%20Disposals%20of%20Assets,%20Subsidiaries,%20Associates%20and%20Joint%20Ventures) During the interim period, the Group did not have any material acquisitions or disposals of assets, subsidiaries, associates, or joint ventures - During the interim period, the Group did not have any material acquisitions or disposals of assets, subsidiaries, associates, or joint ventures[73](index=73&type=chunk) [Material Investments Held by the Group](index=19&type=section&id=Material%20Investments%20Held%20by%20the%20Group) During the interim period, the Group did not hold any material investments - During the interim period, the Group did not hold any material investments[74](index=74&type=chunk) [Future Plans for Material Investments and Capital Assets](index=19&type=section&id=Future%20Plans%20for%20Material%20Investments%20and%20Capital%20Assets) Other than those disclosed in this announcement, the Group currently has no other future plans for material investments or capital assets - Other than those disclosed in this announcement, the Group currently has no other future plans for material investments or capital assets during the interim period[75](index=75&type=chunk) [Foreign Exchange Risk](index=19&type=section&id=Foreign%20Exchange%20Risk) The Group's foreign exchange risk is primarily related to RMB exchange rate fluctuations, but it currently has no hedging policy; management monitors and considers hedging significant foreign currency exposures when necessary - The Group's foreign exchange risk is primarily related to RMB exchange rate fluctuations, as its assets and liabilities are denominated in currencies other than RMB[76](index=76&type=chunk) - The Group has no hedging policy, but management monitors foreign exchange risk and considers hedging significant foreign currency exposures when necessary[76](index=76&type=chunk) [Employees and Remuneration Policy](index=20&type=section&id=Employees%20and%20Remuneration%20Policy) As of June 30, 2025, the Group had 54 employees, with remuneration and benefits determined based on market rates, government policies, and individual performance - As of June 30, 2025, the Group had **54 employees** (December 31, 2024: 69 employees)[77](index=77&type=chunk) - Employee remuneration and benefits are determined based on market rates, government policies, and individual performance[77](index=77&type=chunk) [Use of Proceeds from Rights Issue](index=20&type=section&id=Use%20of%20Proceeds%20from%20Rights%20Issue) The company raised approximately HKD 58.9 million in net proceeds from the 2025 rights issue, with approximately HKD 28.9 million used for debt repayment and the remaining HKD 30 million for general working capital, including selling and distribution, administrative, and R&D expenses - Upon completion of the 2025 rights issue, the company received net proceeds of approximately **HKD 58.9 million**[78](index=78&type=chunk) - The net proceeds are intended to be used for: (i) approximately **HKD 28.9 million** for repayment of other borrowings; and (ii) the remaining approximately **HKD 30 million** for the Group's general working capital[78](index=78&type=chunk) Use of Proceeds from Rights Issue | Intended Use | Original Allocation (million HKD) | Utilized as of June 30, 2025 (million HKD) | Unutilized as of June 30, 2025 (million HKD) | Expected Timeline for Unutilized Net Proceeds | | :--- | :--- | :--- | :--- | :--- | | Repayment of the Group's other borrowings | 28.9 | 10.1 | 18.8 | On or before June 30, 2026 | | Supplementing the Group's general working capital | 30.0 | 0.9 | 29.1 | On or before December 31, 2026 | | **Total** | **58.9** | **11.0** | **47.9** | | [Other Information](index=21&type=section&id=Other%20Information) This section covers additional disclosures including directors' and substantial shareholders' interests, corporate governance, and post-reporting period events [Directors' and Chief Executive's Interests and Short Positions in Shares, Underlying Shares and Debentures of the Company or any Associated Corporation](index=21&type=section&id=Directors'%20and%20Chief%20Executive's%20Interests%20and%20Short%20Positions%20in%20Shares,%20Underlying%20Shares%20and%20Debentures%20of%20the%20Company%20or%20any%20Associated%20Corporation) As of June 30, 2025, Mr. Zhao Jie held 7.15% equity, and Mr. Wu Huizhang directly and indirectly held a total of 2.55% equity, with no other directors or chief executives holding disclosable interests or short positions Directors' Interests | Name of Director | Capacity / Nature of Interest | Number of Shares Held | Approximate % of the Company's Shareholding | | :--- | :--- | :--- | :--- | | Mr. Zhao Jie | Beneficial owner | 25,780,000 (L) | 7.15% | | Mr. Wu Huizhang | Beneficial owner and interest in controlled corporation | 9,200,000 (L) | 2.55% | - Save as disclosed above, none of the directors or chief executives of the Company and/or their respective associates had any interests or short positions in the shares, underlying shares, and debentures of the Company or any associated corporation that were required to be recorded in the register kept by the Company under Section 352 of the Securities and Futures Ordinance, or otherwise notified to the Company and the Stock Exchange under Part XV of the Securities and Futures Ordinance or the Model Code[82](index=82&type=chunk) [Arrangements for Directors to Purchase Shares or Debentures](index=22&type=section&id=Arrangements%20for%20Directors%20to%20Purchase%20Shares%20or%20Debentures) From the listing date to June 30, 2025, the company did not grant any rights to any director, their spouse, or minor children to purchase company shares or debentures, nor did it enter into any related arrangements - The Company did not grant any rights to any director, their respective spouses, or children under the age of eighteen to acquire benefits by purchasing shares or debentures of the Company from the listing date to June 30, 2025, nor did they exercise such rights[84](index=84&type=chunk) [Substantial Shareholders' and Other Persons' Interests and Short Positions in Shares and Underlying Shares of the Company](index=22&type=section&id=Substantial%20Shareholders'%20and%20Other%20Persons'%20Interests%20and%20Short%20Positions%20in%20Shares%20and%20Underlying%20Shares%20of%20the%20Company) As of June 30, 2025, Starlight Investment Fund SPC – Starlight Investment Fund SP6 was a substantial shareholder, holding 27.72% equity Substantial Shareholder Interests | Shareholder Name | Capacity / Nature of Interest | Number of Shares Held | Approximate % of the Company's Shareholding | | :--- | :--- | :--- | :--- | | Starlight Investment Fund SPC – Starlight Investment Fund SP6 | Beneficial owner | 100,000,000 (L) | 27.72% | - Save as disclosed above, the Company was not aware of any other relevant interests or short positions in the issued share capital of the Company that would be required to be disclosed to the Company under Divisions 2 and 3 of Part XV of the Securities and Futures Ordinance[86](index=86&type=chunk) [Share Option Scheme](index=22&type=section&id=Share%20Option%20Scheme) The company adopted a share option scheme on June 24, 2018, to incentivize and retain participants, and during the interim period, no share options were granted, exercised, cancelled, or lapsed, with no outstanding share options - The Company conditionally adopted a share option scheme on **June 24, 2018**, to incentivize and retain relevant participants[87](index=87&type=chunk) - During the interim period, no share options were granted, exercised, cancelled, or lapsed, and there were no outstanding share options under the share option scheme[88](index=88&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=23&type=section&id=Purchase,%20Sale%20or%20Redemption%20of%20the%20Company's%20Listed%20Securities) During the interim period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities, and as of June 30, 2025, the Company held no treasury shares - During the interim period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[89](index=89&type=chunk) - As of June 30, 2025, the Company held no treasury shares[89](index=89&type=chunk) [Directors' and Substantial Shareholders' Interests in Competing Businesses or Conflicts of Interest](index=23&type=section&id=Directors'%20and%20Substantial%20Shareholders'%20Interests%20in%20Competing%20Businesses%20or%20Conflicts%20of%20Interest) During the interim period, the directors were not aware of any directors, substantial shareholders, or their associates engaging in any business that competes or may compete with the Group's business, or having any related interests, nor were there any other conflicts of interest - During the interim period, the directors were not aware of any directors, substantial shareholders of the Company, and their respective associates engaging in any business that directly or indirectly competes or may compete with the Group's business, or having any interests therein, nor any other conflicts of interest existing or potentially existing between any such persons and the Company[90](index=90&type=chunk) [Review of Interim Results](index=23&type=section&id=Review%20of%20Interim%20Results) The Audit Committee has reviewed the unaudited condensed consolidated interim financial information and interim results for the six months ended June 30, 2025, and discussed related financial matters with the Board - The Audit Committee has reviewed the unaudited condensed consolidated interim financial information and interim results for the six months ended June 30, 2025, and discussed related financial matters with the Board[91](index=91&type=chunk) [Model Code for Securities Transactions by Directors](index=23&type=section&id=Model%20Code%20for%20Securities%20Transactions%20by%20Directors) The company has adopted the Model Code set out in Appendix C3 of the Listing Rules, and all directors confirmed their compliance with the code throughout the interim period - The Company has adopted the Model Code set out in Appendix C3 of the Listing Rules as the code of conduct for directors' securities transactions after successful listing[92](index=92&type=chunk) - Following specific inquiries, all directors confirmed their compliance with the Model Code throughout the interim period[92](index=92&type=chunk) [Corporate Governance](index=23&type=section&id=Corporate%20Governance) The company has adopted corporate governance practices compliant with the Corporate Governance Code in Appendix C1 of the Listing Rules and believes it complied with the code provisions during the interim period, except for code provision C.1.6, as an independent non-executive director was unable to attend general meetings - The Board has adopted a set of corporate governance practices that comply with the requirements of the Corporate Governance Code set out in Appendix C1 of the Listing Rules[93](index=93&type=chunk) - The Company complied with the code provisions set out in the Corporate Governance Code during the interim period, except for code provision C.1.6, as Mr. Li Wei, an independent non-executive director, was unable to attend the extraordinary general meeting and the annual general meeting[93](index=93&type=chunk)[94](index=94&type=chunk) [Events After Reporting Period](index=24&type=section&id=Events%20After%20Reporting%20Period) After the reporting period, the company proposed a capital reorganization (including capital reduction and share subdivision) and completed changes to its company name, stock short name, and company website to update its corporate image and reflect business development - On **August 4, 2025**, the Company proposed a capital reduction, reducing the par value of each issued share from **HKD 0.25** to **HKD 0.001**[95](index=95&type=chunk) - Immediately following the effective date of the capital reduction, the Company proposed a share subdivision, where each authorized but unissued share with a par value of **HKD 0.25** will be subdivided into **250** new shares with a par value of **HKD 0.001** each[95](index=95&type=chunk) - The company completed its company name change in **July 2025**, with the English name changing from "Volcano Spring International Holdings Limited" to "AI Health Technology Limited," and the Chinese name from "火山邑动国际控股有限公司" to "智慧健康科技有限公司"[96](index=96&type=chunk)[97](index=97&type=chunk) - The company's stock short name has been changed to "AI HEALTH TECH" and "智慧健康科技," and its website has been changed to "www.aihealth-technology.com," effective from **August 13, 2025**[97](index=97&type=chunk) [Disclosure of Directors' Information](index=25&type=section&id=Disclosure%20of%20Directors'%20Information) After the reporting period, there were changes in the chairman and members of the Board's Nomination Committee, with Dr. Zheng Jingwen and Mr. Wang Shifang resigning, Ms. Zhang Yuanjie appointed as a non-executive director, and other changes in director appointments to the Remuneration Committee and Nomination Committee - Mr. Zhao Jie ceased to be the chairman and a member of the Nomination Committee, Ms. Ji Canyue was appointed as a member of the Nomination Committee, and Mr. Shen Shujing was appointed as the chairman of the Nomination Committee, effective from **June 30, 2025**[99](index=99&type=chunk) - Dr. Zheng Jingwen resigned as a non-executive director, Mr. Wang Shifang resigned as an independent non-executive director and a member of several committees, and Ms. Zhang Yuanjie was appointed as a non-executive director, effective from **July 2, 2025**[99](index=99&type=chunk)[102](index=102&type=chunk) - Mr. Zhao Jie was appointed as a member of the Remuneration Committee, and Mr. Lin Dongming was appointed as a member of the Nomination Committee, effective from **July 2, 2025**[102](index=102&type=chunk) [Publication of Interim Results and Interim Report](index=26&type=section&id=Publication%20of%20Interim%20Results%20and%20Interim%20Report) This interim results announcement has been published on the Stock Exchange's website and the company's website; the interim report will be dispatched to shareholders and published on the aforementioned websites in due course - This interim results announcement has been published on the Stock Exchange's website (www.hkex.com.hk) and the Company's website (www.aihealth-technology.com)[101](index=101&type=chunk) - The Company's interim report for the six months ended June 30, 2025, will be dispatched to the Company's shareholders and published on the aforementioned websites in due course[101](index=101&type=chunk)

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不負責，對其準確性 或完整性亦不發表任何聲明，並明確表示，概不對因本公告全部或任何部分內容而產生或因倚 賴該等內容而引致的任何損失承擔任何責任。 Transcenta Holding Limited 創勝集團醫藥有限公司 （以存續方式於開曼群島註冊的有限公司） （股份代號：6628） (1) 截至2025年6月30日止六個月的中期業績公告；及 (2) 變更所得款項用途 創勝集團醫藥有限公司（「本公司」）董事（「董事」）會（「董事會」）欣然公佈本公司 及其附屬公司（統稱「本集團」）截至2025年6月30日止六個月（「報告期間」）的未經 審核綜合業績，及與2024年同期經營業績的比較。該等業績乃基於報告期間的未 經審核綜合中期財務報表，而有關報表乃根據國際財務報告準則會計準則（「國際 財務報告準則」）而編製並已由本公司審計委員會（「審計委員會」）及本公司核數師 德勤•關黃陳方會計師行審閱。 於本公告內，「我們」及「我們的」指本公司（定義見上文）及倘文義另有所指，則 指本集團（定義見上文）。本公告所載若干金額及百分比數字已經約整，或約整至 小數點後一位 ...

[Corporate Information](index=4&type=section&id=Corporate%20Information) This chapter outlines the company's board composition, committee structures, and key registration details [Directors and Committees](index=4&type=section&id=Directors%20and%20Committees) This section lists the board members and key committee compositions of Shenghui Cleanness Group Holdings Limited - The company's Board of Directors consists of three executive directors (Mr Li Chenghua, Mr Wei Dongjin, Mr Chen Liming) and three independent non-executive directors (Ms Zhang Baowen, Ms Qiu Yanhong, Dr Wang Hui)[3](index=3&type=chunk)[7](index=7&type=chunk)[8](index=8&type=chunk) - The company has established an Audit Committee (chaired by Dr Wang Hui), a Remuneration Committee (chaired by Ms Zhang Baowen), a Nomination Committee (chaired by Ms Qiu Yanhong), and an Investment Committee (chaired by Dr Wang Hui) to enhance corporate governance[7](index=7&type=chunk)[8](index=8&type=chunk)[9](index=9&type=chunk) [Company Contact and Registration Details](index=5&type=section&id=Company%20Contact%20and%20Registration%20Details) This section provides the company's registered office, business locations, and other essential contact information - The company is registered in the Cayman Islands, with its headquarters and principal place of business in the PRC located in Panyu District, Guangzhou, and its principal place of business in Hong Kong located in Wan Chai[9](index=9&type=chunk)[10](index=10&type=chunk) Company Basic Information | Information Type | Details | | :--- | :--- | | Company Name | Shenghui Cleanness Group Holdings Limited | | Stock Code | 2521 | | Place of Registration | Cayman Islands | | Headquarters & Principal Place of Business in the PRC | 3/F, Office Building, 36 Xinguang Road, Xinzhen Town, Panyu District, Guangzhou | | Principal Place of Business in Hong Kong | 15/F, MassMutual Tower, 38 Gloucester Road, Wan Chai, Hong Kong | | Principal Bankers | Industrial and Commercial Bank of China Limited (Guangzhou Huanan Branch) | | Company Website | www.gzshqj.com | [Management Discussion and Analysis](index=7&type=section&id=Management%20Discussion%20and%20Analysis) This chapter details business performance, financial status, and future outlook for the six months ended June 30, 2025 [Business Review](index=7&type=section&id=Business%20Review) For the six months ended June 30, 2025, the Group's revenue grew, and gross profit margin improved significantly - The Group is principally engaged in the provision of cleaning and maintenance services in Guangdong Province, China[13](index=13&type=chunk)[16](index=16&type=chunk) Business Performance for H1 2025 | Metric | Six months ended June 30, 2025 (RMB Million) | Six months ended June 30, 2024 (RMB Million) | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Total Revenue | 358.8 | N/A | N/A | | Net Profit | 7.9 | N/A | N/A | | Gross Profit | 60.2 | 32.0 | +88.1% | | Gross Profit Margin | 16.8% | 9.8% | +7.0 p.p. | [Outlook](index=7&type=section&id=Outlook) The Group plans to expand its business in existing and new markets through organic growth and potential acquisitions - The Group plans to replicate its business model in other regions of China with high demand for property cleaning services[15](index=15&type=chunk)[17](index=17&type=chunk) - The Group will explore expanding its customer base and geographical coverage through acquisitions and/or investments in cleaning and maintenance service providers in the Greater Bay Area, and bid for large-scale infrastructure cleaning service projects[15](index=15&type=chunk)[17](index=17&type=chunk) [Financial Review](index=8&type=section&id=Financial%20Review) Revenue grew due to more projects, but net profit declined due to fair value losses on financial assets Key Financial Indicators for H1 2025 | Metric | Six months ended June 30, 2025 (RMB Million) | Six months ended June 30, 2024 (RMB Million) | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Revenue | 358.8 | 325.8 | +10.1% | | Cost of services | 298.6 | 293.7 | +1.7% | | Gross profit | 60.2 | 32.0 | +88.1% | | Gross profit margin | 16.78% | 9.8% | +6.98 p.p. | | Other income, net | 2.6 | 1.2 | +116.7% | | Selling and marketing expenses | 4.3 | 3.5 | +22.9% | | General and administrative expenses | 21.6 | 18.3 | +18.0% | | Finance expenses, net | 0.01 | (0.183) | From expense to income | | Income tax expenses | 4.0 | 1.1 | +263.6% | | Net profit | 7.9 | 10.2 | -22.6% | | Net profit margin | 2.2% | 3.1% | -0.9 p.p. | - The decrease in net profit was primarily due to the recognition of a fair value loss on financial assets at fair value through profit or loss, partially offset by an increase in revenue[35](index=35&type=chunk)[37](index=37&type=chunk) [Revenue](index=8&type=section&id=Revenue) Total revenue for the six months ended June 30, 2025, was RMB 358.8 million, a year-on-year increase of 10.1% - Revenue was primarily derived from property cleaning services (95.8%) and public space cleaning services (4.2%)[18](index=18&type=chunk)[22](index=22&type=chunk) - The **10.1% year-on-year increase in revenue** was mainly driven by an increase in the number of property cleaning service projects[19](index=19&type=chunk)[22](index=22&type=chunk) [Cost of services](index=8&type=section&id=Cost%20of%20services) Cost of services for the six months ended June 30, 2025, increased by 1.7% year-on-year to RMB 298.6 million - The cost of services increased by **1.7% year-on-year to RMB 298.6 million**[20](index=20&type=chunk)[23](index=23&type=chunk) - The increase was mainly due to higher employee benefit expenses and subcontracting labor costs to meet the manpower demand from an increased number of projects[20](index=20&type=chunk)[23](index=23&type=chunk) [Gross profit and gross profit margin](index=8&type=section&id=Gross%20profit%20and%20gross%20profit%20margin) Gross profit for the six months ended June 30, 2025, grew significantly by 88.1% to RMB 60.2 million - **Gross profit increased by 88.1%** year-on-year to RMB 60.2 million[21](index=21&type=chunk)[24](index=24&type=chunk) - **Gross profit margin improved from 9.8% to 16.78%**, primarily due to the increase in revenue[21](index=21&type=chunk)[24](index=24&type=chunk) [Other income, net](index=9&type=section&id=Other%20income%2C%20net) Net other income for the six months ended June 30, 2025, increased by 116.7% year-on-year to RMB 2.6 million - **Net other income increased by 116.7%** year-on-year to RMB 2.6 million[25](index=25&type=chunk)[30](index=30&type=chunk) - The growth was mainly driven by an increase in rental income[25](index=25&type=chunk)[30](index=30&type=chunk) [Selling and marketing expenses](index=9&type=section&id=Selling%20and%20marketing%20expenses) Selling and marketing expenses for the six months ended June 30, 2025, rose by 22.9% year-on-year to RMB 4.3 million - **Selling and marketing expenses increased by 22.9%** year-on-year to RMB 4.3 million[26](index=26&type=chunk)[31](index=31&type=chunk) - The increase was in line with higher marketing and entertainment expenses and bidding expenses related to business expansion[26](index=26&type=chunk)[31](index=31&type=chunk) [General and administrative expenses](index=9&type=section&id=General%20and%20administrative%20expenses) General and administrative expenses for the six months ended June 30, 2025, grew by 18.0% year-on-year to RMB 21.6 million - **General and administrative expenses increased by 18.0%** year-on-year to RMB 21.6 million[27](index=27&type=chunk)[32](index=32&type=chunk) - The growth was primarily due to increased staff costs and office expenses[27](index=27&type=chunk)[32](index=32&type=chunk) [Finance expenses, net](index=9&type=section&id=Finance%20expenses%2C%20net) Net finance expenses for the six months ended June 30, 2025, shifted from an expense to net income - Net finance expenses shifted from a net expense of RMB 183,000 in the prior-year period to **net income of RMB 10,000**[28](index=28&type=chunk)[33](index=33&type=chunk) - The change was mainly due to an increase in interest income[28](index=28&type=chunk)[33](index=33&type=chunk) [Income tax expenses](index=9&type=section&id=Income%20tax%20expenses) Income tax expenses for the six months ended June 30, 2025, increased by 263.6% year-on-year to RMB 4.0 million - **Income tax expenses increased by 263.6%** year-on-year to RMB 4.0 million[29](index=29&type=chunk)[34](index=34&type=chunk) - The increase was mainly due to higher assessable profits[29](index=29&type=chunk)[34](index=34&type=chunk) [Net profit and net profit margin](index=10&type=section&id=Net%20profit%20and%20net%20profit%20margin) Net profit for the six months ended June 30, 2025, decreased by 22.6% year-on-year to RMB 7.9 million - **Net profit decreased by 22.6%** year-on-year to RMB 7.9 million[35](index=35&type=chunk)[37](index=37&type=chunk) - **Net profit margin decreased from 3.1% to 2.2%**[35](index=35&type=chunk)[37](index=37&type=chunk) - The decrease in net profit was primarily due to the recognition of a fair value loss on financial assets at fair value through profit or loss, partially offset by an increase in revenue[35](index=35&type=chunk)[37](index=37&type=chunk) [Capital structure](index=10&type=section&id=Capital%20structure) The Group successfully raised approximately HKD 47.60 million in net proceeds from a placement of new shares - The Group successfully placed **193,755,000 new shares** at a price of HKD 0.250 per share on June 16, 2025[36](index=36&type=chunk)[38](index=38&type=chunk) - The **net proceeds from the placement were approximately HKD 47.60 million**[36](index=36&type=chunk)[38](index=38&type=chunk) - The proceeds are intended for developing the waste recycling business (50%), investing in or acquiring cleaning and maintenance service providers (10%), and for general working capital (40%)[36](index=36&type=chunk)[38](index=38&type=chunk) - As of the reporting date, 50% of the proceeds remained unutilized and are expected to be fully used by May 19, 2027[36](index=36&type=chunk)[38](index=38&type=chunk) [Liquidity and financial resources](index=11&type=section&id=Liquidity%20and%20financial%20resources) As of June 30, 2025, the Group maintained a healthy liquidity position with improved gearing and net debt-to-equity ratios Overview of Liquidity and Financial Resources | Metric | As of June 30, 2025 (RMB Million) | As of December 31, 2024 (RMB Million) | | :--- | :--- | :--- | | Net assets | 436.6 | 384.9 | | Cash, bank balances and restricted bank deposits | 106.4 | 92.5 | | Total borrowings (lease liabilities and bank borrowings) | 50.0 | 52.0 | | Current ratio (times) | 2.6 | 2.3 | | Gearing ratio (%) | 11.5 | 15.5 | | Net debt-to-equity ratio (%) | Net cash | Net cash | [Capital expenditure and commitments](index=12&type=section&id=Capital%20expenditure%20and%20commitments) Capital expenditure for the six months ended June 30, 2025, was approximately RMB 1.0 million - For the six months ended June 30, 2025, capital expenditure was approximately **RMB 1.0 million** (H1 2024: RMB 4.6 million), mainly for the purchase of property, plant and equipment[43](index=43&type=chunk)[47](index=47&type=chunk) - As of June 30, 2025, there were no capital commitments (December 31, 2024: Nil)[43](index=43&type=chunk)[47](index=47&type=chunk) [Pledge of assets](index=12&type=section&id=Pledge%20of%20assets) As of June 30, 2025, the Group had not pledged any assets as security for financing - As of June 30, 2025, the Group had not pledged any assets (December 31, 2024: Nil) as security for any financing granted to the Group[44](index=44&type=chunk)[48](index=48&type=chunk) [Contingent liabilities](index=12&type=section&id=Contingent%20liabilities) As of June 30, 2025, and December 31, 2024, the Group had no significant contingent liabilities - As of June 30, 2025, and December 31, 2024, the Group did not have any significant contingent liabilities[45](index=45&type=chunk)[49](index=49&type=chunk) [Treasury policies](index=12&type=section&id=Treasury%20policies) The Group adopts a prudent treasury policy to manage its liquidity and funding requirements effectively - The Group adopts a prudent treasury policy[46](index=46&type=chunk)[50](index=50&type=chunk) - Management closely monitors the liquidity position to ensure that the liquidity structure of the Group’s assets, liabilities and commitments can meet its funding requirements[46](index=46&type=chunk)[50](index=50&type=chunk) [Foreign exchange exposure](index=13&type=section&id=Foreign%20exchange%20exposure) The Group's foreign exchange risk is insignificant as most financial assets and liabilities are denominated in RMB - The vast majority of the Group's financial assets and liabilities are denominated in RMB, resulting in insignificant foreign exchange risk[51](index=51&type=chunk)[55](index=55&type=chunk) - The Group currently does not engage in any foreign currency hedging or use any financial instruments for hedging purposes, but management will monitor exposure and consider hedging if it becomes significant[51](index=51&type=chunk)[55](index=55&type=chunk) - The conversion of RMB into foreign currencies is subject to government-imposed foreign exchange control rules and regulations[52](index=52&type=chunk)[56](index=56&type=chunk) [Interest rate exposure](index=13&type=section&id=Interest%20rate%20exposure) The Group's interest rate risk arises mainly from floating-rate bank deposits and fixed-rate bank borrowings - The Group's interest rate risk primarily arises from cash flow interest rate risk related to floating-rate restricted bank deposits and bank balances, as well as fixed-rate bank borrowings[53](index=53&type=chunk)[57](index=57&type=chunk) - Management monitors interest rate risk and will consider hedging significant exposure when necessary[53](index=53&type=chunk)[57](index=57&type=chunk) [Use of proceeds from the global offering](index=13&type=section&id=Use%20of%20proceeds%20from%20the%20global%20offering) As of June 30, 2025, HKD 49.8 million of the net proceeds from the 2023 global offering remained unutilized - The net proceeds from the 2023 global offering (after deducting underwriting fees, commissions, and other listing expenses) were approximately **HKD 73.5 million**[54](index=54&type=chunk)[58](index=58&type=chunk) Use and Allocation of Proceeds from the Global Offering | Intended Use | Planned Allocation (HKD Million) | Amount Utilized as of June 30, 2025 (HKD Million) | Unutilized Amount as of June 30, 2025 (HKD Million) | Expected Full Utilization Timeline | | :--- | :--- | :--- | :--- | :--- | | Establishing new branch offices | 36.0 | – | 36.0 | December 2026 | | Acquiring or investing in cleaning and maintenance service providers | 15.7 | 15.7 | – | December 2026 | | Strengthening public space cleaning service capabilities | 14.3 | 5.8 | 8.5 | December 2026 | | Adopting technological reforms and upgrading IT systems | 5.6 | 1.3 | 4.3 | December 2026 | | Expanding the marketing department | 1.8 | 0.8 | 1.0 | December 2026 | | General working capital | 0.1 | 0.1 | – | | | **Total** | **73.5** | **23.7** | **49.8** | | [Significant investments held and material acquisitions and disposals](index=15&type=section&id=Significant%20investments%20held%20and%20material%20acquisitions%20and%20disposals) The Group completed acquisitions of two Hong Kong property management companies and increased its stake in BTI - On April 28, 2025, the company agreed to acquire 100% of the issued share capital of Fook Yu Property Management Limited and Fook Wai Property Management Limited for **HKD 15 million** (approximately RMB 13.7 million), which was completed on June 30, 2025[61](index=61&type=chunk)[65](index=65&type=chunk) - The target companies are principally engaged in providing property management services in Hong Kong[61](index=61&type=chunk)[65](index=65&type=chunk) - The Group further acquired 4,375,425 shares of Shenzhen BTI Excellence Technology Co, Ltd (BTI) for a consideration of approximately **RMB 15,752,000**[63](index=63&type=chunk)[67](index=67&type=chunk) - As of June 30, 2025, the Group held **25% of the total issued shares of BTI**, and the investment is classified as an interest in an associate[64](index=64&type=chunk)[67](index=67&type=chunk) - BTI is principally engaged in the business of recycling waste materials for packaging material production, and the design, manufacturing, and sale of environmentally friendly biodegradable materials[63](index=63&type=chunk)[67](index=67&type=chunk) [Acquisition of Target Companies](index=15&type=section&id=Acquisition%20of%20Target%20Companies) The Group acquired two Hong Kong property management service providers for HKD 15 million on June 30, 2025 - On April 28, 2025, the Company entered into a sale and purchase agreement to conditionally acquire 100% of the issued share capital of Fook Yu Property Management Limited and Fook Wai Property Management Limited (the "Target Companies") for a consideration of **HKD 15 million** (equivalent to approximately RMB 13.7 million)[61](index=61&type=chunk)[65](index=65&type=chunk) - The acquisition was completed on June 30, 2025, after which the Target Companies became indirect wholly-owned subsidiaries of the Company[61](index=61&type=chunk)[65](index=65&type=chunk) - The Target Companies are principally engaged in the provision of property management services in Hong Kong[61](index=61&type=chunk)[65](index=65&type=chunk) [Acquisition of BTI](index=15&type=section&id=Acquisition%20of%20BTI) The Group increased its shareholding in BTI to 25%, classifying it as an interest in an associate - During the six months ended June 30, 2025, the Group further acquired 4,375,425 shares of Shenzhen BTI Excellence Technology Co, Ltd ("BTI"), a company listed on the National Equities Exchange and Quotations (NEEQ), for a consideration of approximately **RMB 15,752,000**[63](index=63&type=chunk)[67](index=67&type=chunk) - BTI is principally engaged in the business of recycling waste materials for packaging material production, and the design, manufacturing, and sale of biodegradable and environmentally friendly materials[63](index=63&type=chunk)[67](index=67&type=chunk) - As of June 30, 2025, the Group held **25% of the total issued shares of BTI**, and this investment is classified as an interest in an associate[64](index=64&type=chunk)[67](index=67&type=chunk) [Future plans for material investments or capital assets](index=16&type=section&id=Future%20plans%20for%20material%20investments%20or%20capital%20assets) As of June 30, 2025, the Group had no specific plans for other material investments or capital assets - Save as disclosed in the Prospectus and this report, there were no specific plans for material investments or capital assets as of June 30, 2025[68](index=68&type=chunk)[71](index=71&type=chunk) [Human resources](index=16&type=section&id=Human%20resources) Total employee benefit expenses amounted to RMB 186.1 million for the six months ended June 30, 2025 Human Resources Overview | Metric | Six months ended June 30, 2025 (RMB Million) | Six months ended June 30, 2024 (RMB Million) | | :--- | :--- | :--- | | Total employee benefit expenses | 186.1 | 178.0 | | Total number of employees | 8,068 | 7,169 | - Remuneration for each employee is determined based on individual responsibilities, capabilities, skills, experience, performance, and market salary levels[69](index=69&type=chunk)[72](index=72&type=chunk) - All employees of the Group participate in China's employee social insurance schemes, and the Group regularly provides or arranges training programs, including environmental protection, quality, occupational safety and health, emergency and rescue, specialized cleaning skills, and management skills training[69](index=69&type=chunk)[72](index=72&type=chunk) - The Company has adopted a share option scheme to provide incentives and rewards to its employees[69](index=69&type=chunk)[72](index=72&type=chunk) [Events after reporting period](index=16&type=section&id=Events%20after%20reporting%20period) No other significant events that could affect the Group have occurred since the end of the reporting period - Save as disclosed in this report, no other significant events that could affect the Group have occurred since the end of the six months ended June 30, 2025[70](index=70&type=chunk)[73](index=73&type=chunk) [Unaudited Condensed Consolidated Statement of Comprehensive Income](index=17&type=section&id=Unaudited%20Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) This statement shows the Group's revenue growth and the impact of fair value losses on profit for the period Unaudited Condensed Consolidated Statement of Comprehensive Income (For the six months ended June 30, 2025) | Metric | Six months ended June 30, 2025 (RMB'000) | Six months ended June 30, 2024 (RMB'000) | | :--- | :--- | :--- | | Revenue | 358,829 | 325,779 | | Cost of services | (298,629) | (293,741) | | Gross profit | 60,200 | 32,038 | | Selling and marketing expenses | (4,319) | (3,537) | | General and administrative expenses | (21,589) | (18,257) | | Fair value loss on financial assets at FVTPL | (25,394) | – | | Share of results of an associate | 443 | – | | Other income, net | 2,560 | 1,207 | | Finance expenses, net | 10 | (183) | | Profit before income tax | 11,911 | 11,268 | | Income tax expenses | (3,968) | (1,113) | | Profit and total comprehensive income for the period attributable to owners of the Company | 7,943 | 10,155 | | Basic and diluted earnings per share (RMB cents) | 0.45 | 0.62 | [Unaudited Condensed Consolidated Statement of Financial Position](index=18&type=section&id=Unaudited%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) This statement shows growth in the Group's total assets and equity as of June 30, 2025 Unaudited Condensed Consolidated Statement of Financial Position (As of June 30, 2025) | Metric | As of June 30, 2025 (RMB'000) | As of December 31, 2024 (RMB'000) | | :--- | :--- | :--- | | **Assets** | | | | Non-current assets | 180,197 | 189,822 | | Property, plant and equipment | 34,661 | 36,200 | | Investment properties | 854 | 905 | | Interest in an associate | 91,961 | – | | Right-of-use assets | 17,756 | 17,908 | | Financial assets at FVTPL | – | 101,160 | | Deferred income tax assets | 7,442 | 6,653 | | Deposits and prepayments (non-current) | 27,523 | 26,996 | | Current assets | 455,771 | 380,501 | | Trade and other receivables and prepayments | 349,399 | 287,969 | | Restricted bank deposits | 1,423 | 1,423 | | Cash and cash equivalents | 104,949 | 91,109 | | **Total assets** | **635,968** | **570,323** | | **Equity** | | | | Equity attributable to owners of the Company | 436,386 | 384,902 | | Share capital | 17,721 | 15,953 | | Reserves | 418,665 | 368,949 | | **Total equity** | **436,386** | **384,902** | | **Liabilities** | | | | Non-current liabilities | 23,410 | 20,818 | | Deferred tax liabilities | 9,018 | 6,538 | | Lease liabilities (non-current) | 14,392 | 14,280 | | Current liabilities | 176,172 | 164,603 | | Trade and other payables | 122,549 | 102,869 | | Current income tax payables | 18,014 | 16,265 | | Bank borrowings | 30,120 | 39,174 | | Lease liabilities (current) | 5,489 | 5,755 | | **Total liabilities** | **199,582** | **185,421** | | **Total equity and liabilities** | **635,968** | **570,323** | [Unaudited Condensed Consolidated Statements of Changes in Equity](index=20&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Equity) This statement shows that total equity increased due to profit for the period and the placement of new shares Unaudited Condensed Consolidated Statements of Changes in Equity (For the six months ended June 30, 2025) | Metric | Share Capital (RMB'000) | Reserves (RMB'000) | Total (RMB'000) | | :--- | :--- | :--- | :--- | | At January 1, 2024 | 14,726 | 284,092 | 298,818 | | Profit for the period (2024) | – | 10,155 | 10,155 | | Balance at June 30, 2024 | 14,726 | 294,247 | 308,973 | | At January 1, 2025 | 15,953 | 368,949 | 384,902 | | Profit for the period (2025) | – | 7,943 | 7,943 | | Placement of new shares | 1,768 | 41,773 | 43,541 | | Balance at June 30, 2025 | 17,721 | 418,665 | 436,386 | [Unaudited Condensed Consolidated Statements of Cash Flows](index=21&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This statement shows a net increase in cash and cash equivalents, driven by financing activities Unaudited Condensed Consolidated Statements of Cash Flows (For the six months ended June 30, 2025) | Metric | Six months ended June 30, 2025 (RMB'000) | Six months ended June 30, 2024 (RMB'000) | | :--- | :--- | :--- | | Net cash used in operating activities | (2,569) | (55,722) | | Net cash used in investing activities | (15,919) | (4,553) | | Net cash from financing activities | 32,328 | 10,938 | | Net increase/(decrease) in cash and cash equivalents | 13,840 | (49,337) | | Cash and cash equivalents at end of period | 104,949 | 99,236 | [Notes to the Condensed Consolidated Interim Financial Statements](index=22&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Interim%20Financial%20Statements) This chapter provides detailed explanations of the company's accounting policies and key financial information [Corporate Information](index=22&type=section&id=Corporate%20Information_Note) This section reiterates the basic information of Shenghui Cleanness Group Holdings Limited - The Company was incorporated in the Cayman Islands on January 4, 2021, and was listed on the Main Board of The Stock Exchange of Hong Kong Limited on December 5, 2023[88](index=88&type=chunk)[90](index=90&type=chunk) - The Group is principally engaged in the provision of cleaning and maintenance services in the PRC[89](index=89&type=chunk)[90](index=90&type=chunk) - The controlling shareholders are Mr Li Chenghua and Mr Chen Liming[89](index=89&type=chunk)[90](index=90&type=chunk) [Principal Accounting Policies](index=23&type=section&id=Principal%20Accounting%20Policies) The financial statements are prepared in accordance with HKAS 34, with consistent accounting policies - The financial statements have been prepared in accordance with Hong Kong Accounting Standard (HKAS) 34 "Interim Financial Reporting" issued by the Hong Kong Institute of Certified Public Accountants (HKICPA)[91](index=91&type=chunk)[94](index=94&type=chunk) - The accounting policies are consistent with those used in the 2024 annual financial statements, except for the adoption of new and revised HKFRSs that are effective for the annual period beginning on January 1, 2025[92](index=92&type=chunk)[93](index=93&type=chunk)[94](index=94&type=chunk)[95](index=95&type=chunk) - The adoption of all new and revised HKFRSs is not expected to have a material impact on the Group's condensed consolidated interim financial statements[96](index=96&type=chunk)[98](index=98&type=chunk) [Revenue and Segment Information](index=25&type=section&id=Revenue%20and%20Segment%20Information) The Group operates as a single segment providing cleaning and maintenance services in China - The Group is principally engaged in providing cleaning and maintenance services in the PRC, and all revenue is derived from the PRC[100](index=100&type=chunk)[105](index=105&type=chunk)[111](index=111&type=chunk) - Management reviews the operating results of the business as one operating segment to make decisions about resource allocation[100](index=100&type=chunk)[101](index=101&type=chunk) - Revenue is recognised when control of the services is transferred to the customer, either over time or at a point in time[115](index=115&type=chunk)[116](index=116&type=chunk)[117](index=117&type=chunk) - No significant contract assets or liabilities were recognised, and there were no significant incremental costs during the period ended June 30, 2025[107](index=107&type=chunk)[108](index=108&type=chunk)[110](index=110&type=chunk)[112](index=112&type=chunk)[113](index=113&type=chunk)[114](index=114&type=chunk) [Accounting policies for revenue recognition](index=27&type=section&id=Accounting%20policies%20for%20revenue%20recognition) Revenue is recognized when control of services is transferred to the customer for the consideration expected - Revenue is recognised when control of the services is transferred to the customer for an amount that reflects the consideration to which the Group expects to be entitled[115](index=115&type=chunk)[117](index=117&type=chunk) - Control of services may be transferred over time or at a point in time, depending on whether the customer simultaneously receives and consumes all benefits, controls the asset, or if the asset has no alternative use and there is an enforceable right to payment[116](index=116&type=chunk)[117](index=117&type=chunk)[118](index=118&type=chunk) - A contract asset is the Group's right to consideration for services transferred to a customer; a contract liability arises when a customer pays consideration or the Group has an unconditional right to receive it[119](index=119&type=chunk)[120](index=120&type=chunk)[121](index=121&type=chunk)[122](index=122&type=chunk)[123](index=123&type=chunk) [Expenses by Nature](index=29&type=section&id=Expenses%20by%20Nature) This section details the breakdown of expenses by nature for the six months ended June 30, 2025 Expenses by Nature (For the six months ended June 30, 2025) | Expense Type | Six months ended June 30, 2025 (RMB'000) | Six months ended June 30, 2024 (RMB'000) | | :--- | :--- | :--- | | Employee benefit expenses (including directors' remuneration) | | | | – Salaries, wages and bonuses | 178,281 | 169,899 | | – Social insurance and housing provident fund contributions | 7,264 | 7,559 | | – Other employee benefits | 551 | 499 | | Subcontracting labour costs | 97,265 | 99,733 | | Cost of cleaning materials consumed | 7,893 | 8,137 | | Depreciation | 1,906 | 1,757 | | Short-term lease expenses | 2,827 | 1,234 | [Other Income, Net](index=30&type=section&id=Other%20Income%2C%20Net_Note) Net other income for the six months ended June 30, 2025, was RMB 2,560,000, mainly from rental income Other Income, Net (For the six months ended June 30, 2025) | Income Type | Six months ended June 30, 2025 (RMB'000) | Six months ended June 30, 2024 (RMB'000) | | :--- | :--- | :--- | | Rental income | 2,532 | 1,324 | | VAT refund | – | 751 | | Donation | – | (900) | | Others | 28 | 32 | | **Total** | **2,560** | **1,207** | - Rental income (including from investment properties and leased shops) is recognised on a straight-line basis over the term of the lease agreement[130](index=130&type=chunk) [Finance Income/(Expenses), Net](index=30&type=section&id=Finance%20Income%2F(Expenses)%2C%20Net) The Group recorded net finance income of RMB 10,000 for the six months ended June 30, 2025 Finance Income/(Expenses), Net (For the six months ended June 30, 2025) | Type | Six months ended June 30, 2025 (RMB'000) | Six months ended June 30, 2024 (RMB'000) | | :--- | :--- | :--- | | Finance income - Interest income | 876 | 80 | | Finance expenses - Interest expense on bank borrowings | (607) | (59) | | Finance expenses - Interest expense on lease liabilities | (259) | (204) | | **Finance income/(expenses), net** | **10** | **(183)** | [Income Tax Expenses](index=31&type=section&id=Income%20Tax%20Expenses) Income tax expense for the six months ended June 30, 2025, was RMB 3,968,000, a significant increase Income Tax Expenses (For the six months ended June 30, 2025) | Type | Six months ended June 30, 2025 (RMB'000) | Six months ended June 30, 2024 (RMB'000) | | :--- | :--- | :--- | | Current income tax | 2,278 | 1,083 | | Deferred income tax | 1,690 | 30 | | **Total** | **3,968** | **1,113** | - Provision for income tax on the Group's operations in China is calculated at the applicable rate of 25%, except for Guangzhou Shenghui, which qualified as a High and New Technology Enterprise since 2020 and enjoys a preferential income tax rate of 15%, valid until December 28, 2026[133](index=133&type=chunk)[134](index=134&type=chunk)[135](index=135&type=chunk) - Guangzhou Shenghui was eligible for super deduction on research and development expenses for the periods ended June 30, 2025 and 2024, with the additional tax deduction rate increased to 100% from the 2023 fiscal year[139](index=139&type=chunk)[142](index=142&type=chunk) - As of June 30, 2025, and December 31, 2024, the Group had not recognised deferred income tax assets for tax losses carried forward, as tax losses of group companies in China can only be carried forward for a maximum of five years[140](index=140&type=chunk)[142](index=142&type=chunk) [Dividend](index=32&type=section&id=Dividend) No dividend was paid or declared by the Company during the six months ended June 30, 2025, and the same period in 2024 - No dividend was paid or declared by the Company during the periods ended June 30, 2025 and 2024[141](index=141&type=chunk)[143](index=143&type=chunk) [Earnings Per Share](index=33&type=section&id=Earnings%20Per%20Share) Basic earnings per share for the six months ended June 30, 2025, was RMB 0.45 cents Earnings Per Share (For the six months ended June 30, 2025) | Metric | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :--- | :--- | :--- | | Profit attributable to owners of the Company (RMB'000) | 7,943 | 10,155 | | Weighted average number of ordinary shares in issue ('000) | 1,772,037 | 1,625,000 | | Basic earnings per share (RMB cents) | 0.45 | 0.62 | - The calculation of basic earnings per share for 2025 has taken into account the placement of 193,755,000 new shares completed on June 16, 2025[146](index=146&type=chunk)[148](index=148&type=chunk) - Diluted earnings per share is the same as basic earnings per share as there were no potential dilutive ordinary shares outstanding during the periods ended June 30, 2025 and 2024[147](index=147&type=chunk)[148](index=148&type=chunk) [Property, Plant and Equipment](index=34&type=section&id=Property%2C%20Plant%20and%20Equipment) The Group acquired approximately RMB 1,043,000 of property, plant and equipment during the period - During the six months ended June 30, 2025, the Group acquired property, plant and equipment of **RMB 1,043,000** (2024: RMB 4,633,000), mainly comprising plant and machinery[150](index=150&type=chunk)[152](index=152&type=chunk) [Trade and Other Receivables and Prepayments](index=34&type=section&id=Trade%20and%20Other%20Receivables%20and%20Prepayments) As of June 30, 2025, net trade and other receivables and prepayments amounted to RMB 376,746,000 Trade and Other Receivables and Prepayments (As of June 30, 2025) | Metric | As of June 30, 2025 (RMB'000) | As of December 31, 2024 (RMB'000) | | :--- | :--- | :--- | | Trade receivables | 345,251 | 292,599 | | Less: Provision for impairment | (23,589) | (24,525) | | **Trade receivables, net** | **321,662** | **268,074** | | Deposits (current portion) | 5,100 | 3,648 | | Other receivables | 14,086 | 8,791 | | Prepayments | 8,375 | 7,456 | | **Trade and other receivables and prepayments, net** | **376,746** | **314,965** | Ageing Analysis of Trade Receivables (by invoice date) | Ageing of Trade Receivables (by invoice date) | As of June 30, 2025 (RMB'000) | As of December 31, 2024 (RMB'000) | | :--- | :--- | :--- | | 0 – 60 days | 198,670 | 174,987 | | 61 – 180 days | 53,772 | 46,371 | | 181 – 365 days | 42,988 | 32,880 | | Over 1 year | 49,821 | 38,361 | | **Total** | **345,251** | **292,599** | - The carrying amounts of trade and other receivables are all denominated in RMB and approximate their fair values[159](index=159&type=chunk)[160](index=160&type=chunk) [Bank Borrowing](index=35&type=section&id=Bank%20Borrowing) As of June 30, 2025, total bank borrowings amounted to RMB 30,120,000 Bank Borrowing (As of June 30, 2025) | Metric | As of June 30, 2025 (RMB'000) | As of December 31, 2024 (RMB'000) | | :--- | :--- | :--- | | Bank loans | 30,120 | 39,714 | [Share Capital](index=36&type=section&id=Share%20Capital) As of June 30, 2025, the Company's issued and fully paid share capital was 1,949,735,000 shares Share Capital Movement (As of June 30, 2025) | Metric | Number of ordinary shares | Par value of shares (HK$) | Equivalent par value of shares (RMB) | | :--- | :--- | :--- | :--- | | Issued and fully paid at January 1, 2025 | 1,755,980,000 | 17,559,800 | 15,952,605 | | Placement of new shares | 193,755,000 | 1,937,550 | 1,768,154 | | Issued and fully paid at June 30, 2025 | 1,949,735,000 | 19,497,350 | 17,720,759 | - On June 16, 2025, the Company placed 193,755,000 new shares at a placing price of HKD 0.250 per share, with net proceeds of approximately **RMB 43,541,000** (approximately HKD 47,600,000)[164](index=164&type=chunk) [Trade and Other Payables](index=37&type=section&id=Trade%20and%20Other%20Payables) As of June 30, 2025, total trade and other payables amounted to RMB 88,457,000 Trade and Other Payables (As of June 30, 2025) | Metric | As of June 30, 2025 (RMB'000) | As of December 31, 2024 (RMB'000) | | :--- | :--- | :--- | | Trade payables | 33,793 | 28,810 | | Other payables | 54,664 | 78,220 | | **Total trade and other payables** | **88,457** | **107,030** | Ageing Analysis of Trade Payables (by invoice date) | Ageing of Trade Payables (by invoice date) | As of June 30, 2025 (RMB'000) | As of December 31, 2024 (RMB'000) | | :--- | :--- | :--- | | 0 – 60 days | 25,201 | 23,036 | | 61 – 180 days | 4,926 | 3,472 | | 181 – 365 days | 1,539 | 1,089 | | Over 1 year | 2,127 | 1,213 | | **Total** | **33,793** | **28,810** | - The carrying amounts of trade and other payables are denominated in RMB and approximate their fair values[168](index=168&type=chunk) [Interest in Associate](index=38&type=section&id=Interest%20in%20Associate) As of June 30, 2025, the Group's interest in an associate was RMB 91,961,000, primarily its investment in BTI Interest in Associate (As of June 30, 2025) | Metric | As of June 30, 2025 (RMB'000) | As of December 31, 2024 (RMB'000) | | :--- | :--- | :--- | | Cost of investment in an associate | 91,518 | – | | Share of post-acquisition results | 443 | – | | **Total** | **91,961** | **–** | - The Group's associate is accounted for using the equity method[173](index=173&type=chunk)[175](index=175&type=chunk) - BTI is principally engaged in the business of recycling waste materials for packaging material production, and the design, manufacturing, and sale of biodegradable and environmentally friendly materials[175](index=175&type=chunk) - As of June 30, 2025, the Group held a **25% beneficial interest in BTI** (December 31, 2024: 19.51%)[175](index=175&type=chunk) - Mr Wei Dongjin, the co-chairman and an executive Director of the Company, is also a director and a substantial shareholder of BTI[175](index=175&type=chunk) [Commitments](index=38&type=section&id=Commitments) As of June 30, 2025, the Group had no capital commitments - As of June 30, 2025, there were no capital commitments (December 31, 2024: Nil)[174](index=174&type=chunk) [Related Party Transactions](index=39&type=section&id=Related%20Party%20Transactions) This section discloses transactions with controlling shareholders, including fund advances and outstanding balances Transactions with Controlling Shareholders (For the six months ended June 30, 2025) | Transaction Type | Six months ended June 30, 2025 (RMB'000) | Six months ended June 30, 2024 (RMB'000) | | :--- | :--- | :--- | | Fund advances from controlling shareholders during the year | – | 4,614 | Balances with Controlling Shareholders (As of June 30, 2025) | Balance Type | As of June 30, 2025 (RMB'000) | As of December 31, 2024 (RMB'000) | | :--- | :--- | :--- | | Amount due to Mr Li | 21,025 | 21,025 | | Amount due to Mr Chen | 1,125 | 1,125 | - The balances with controlling shareholders are non-trade in nature, unsecured, denominated in RMB, interest-free and repayable on demand[181](index=181&type=chunk) Key Management Compensation (For the six months ended June 30, 2025) | Key Management Compensation | Six months ended June 30, 2025 (RMB'000) | Six months ended June 30, 2024 (RMB'000) | | :--- | :--- | :--- | | Salaries and wages | 1,247 | 1,103 | | Social insurance and housing provident fund contributions | 102 | 226 | | **Total** | **1,349** | **1,329** | [Financial Risk Management](index=41&type=section&id=Financial%20Risk%20Management) This section discloses fair value measurement information for the Group's financial assets and liabilities Fair Value Measurement of Financial Assets (As of June 30, 2025) | Financial Asset | As of June 30, 2025 (RMB'000) | As of December 31, 2024 (RMB'000) | Fair Value Hierarchy | Basis of Fair Value Measurement | Significant Unobservable Inputs | | :--- | :--- | :--- | :--- | :--- | :--- | | Listed shares classified as financial assets at FVTPL | – | 101,160 | Level 1 | Quoted prices available in an active market | Not applicable | [Subsequent Events](index=41&type=section&id=Subsequent%20Events) No significant events requiring adjustment or disclosure have occurred after the reporting period - The Group has had no significant events after the period ended June 30, 2025, that would require adjustment or additional disclosure in these consolidated financial statements[188](index=188&type=chunk)[189](index=189&type=chunk) [Other Information](index=42&type=section&id=Other%20Information) This chapter provides additional information on shareholdings, director details, and corporate governance practices [Directors' and Chief Executives' Interests and Short Positions in the Shares, Underlying Shares and Debentures of the Company and its Associated Corporations](index=42&type=section&id=Directors'%20and%20Chief%20Executives'%20Interests%20and%20Short%20Positions%20in%20the%20Shares%2C%20Underlying%20Shares%20and%20Debentures%20of%20the%20Company%20and%20its%20Associated%20Corporations) As of June 30, 2025, directors held long positions in the Company's shares, primarily through controlled corporations Long positions in the shares of the Company (As of June 30, 2025) | Director Name | Nature of interest | Number of shares held | Percentage of issued share capital | | :--- | :--- | :--- | :--- | | Mr Li Chenghua | Interest in a controlled corporation | 586,543,750 | 30.08% | | Mr Chen Liming | Interest in a controlled corporation | 586,543,750 | 30.08% | - Mr Li Chenghua holds his shares through Rich Cleanness Investment Holdings Limited, which is wholly-owned by him, and Mr Chen Liming holds his shares through Sunrise Cleanness Investment Holdings Limited, which is wholly-owned by him[194](index=194&type=chunk)[196](index=196&type=chunk)[199](index=199&type=chunk) - Mr Li Chenghua and Mr Chen Liming are deemed a group of controlling shareholders, and each is deemed to be interested in 1,173,087,500 shares[194](index=194&type=chunk)[196](index=196&type=chunk) [Long positions in the shares of HK$0.01 each of the Company](index=42&type=section&id=Long%20positions%20in%20the%20shares%20of%20HK$0.01%20each%20of%20the%20Company) Mr Li Chenghua and Mr Chen Liming each held a 30.08% interest in the Company's issued share capital Long positions in the shares of the Company (As of June 30, 2025) | Director Name | Nature of interest | Number of shares held | Percentage of issued share capital | | :--- | :--- | :--- | :--- | | Mr Li Chenghua | Interest in a controlled corporation | 586,543,750 | 30.08% | | Mr Chen Liming | Interest in a controlled corporation | 586,543,750 | 30.08% | - The 586,543,750 shares are held by Rich Cleanness Investment Holdings Limited, which is wholly-owned by Mr Li, who is therefore deemed to be interested in all the shares held by Rich Cleanness under the SFO[194](index=194&type=chunk) - Mr Li and Mr Chen have confirmed they are a group of controlling shareholders of the Company under the Listing Rules, and thus, Mr Li, Rich Cleanness, Mr Chen, and Sunrise Cleanness are each deemed to be interested in 1,173,087,500 shares[194](index=194&type=chunk) [Long positions in the shares of associated corporations](index=44&type=section&id=Long%20positions%20in%20the%20shares%20of%20associated%20corporations) Mr Li Chenghua and Mr Chen Liming each beneficially own 100% of their respective investment holding companies Long positions in the shares of associated corporations (As of June 30, 2025) | Director Name | Name of associated corporation | Nature of interest | Number of shares held | Percentage of interest in the associated corporation | | :--- | :--- | :--- | :--- | | Mr Li | Rich Cleanness | Beneficial owner | 1 | 100% | | Mr Chen | Sunrise Cleanness | Beneficial owner | 1 | 100% | - The Company is 30.08% owned by Rich Cleanness, which is wholly-owned by Mr Li, and 30.08% owned by Sunrise Cleanness, which is wholly-owned by Mr Chen[199](index=199&type=chunk) [Substantial Shareholders' Interests and Short Positions in the Shares and Underlying Shares of the Company](index=45&type=section&id=Substantial%20Shareholders'%20Interests%20and%20Short%20Positions%20in%20the%20Shares%20and%20Underlying%20Shares%20of%20the%20Company) As of June 30, 2025, Rich Cleanness and Sunrise Cleanness each held 30.08% of the Company's shares Long positions in the shares of the Company (As of June 30, 2025) | Shareholder Name | Nature of interest | Number of shares held | Percentage of issued share capital | | :--- | :--- | :--- | :--- | | Rich Cleanness | Beneficial owner / Other (Interest of controlling shareholder) | 586,543,750 | 30.08% | | Mr Li | Interest in a controlled corporation / Interest in a controlled corporation | 586,543,750 | 30.08% | | Ms Tang Yongzhen | Interest of spouse | 586,543,750 | 30.08% | | Sunrise Cleanness | Beneficial owner / Other (Interest of controlling shareholder) | 586,543,750 | 30.08% | | Mr Chen | Interest in a controlled corporation / Interest in a controlled corporation | 586,543,750 | 30.08% | - Rich Cleanness is wholly-owned by Mr Li, and Sunrise Cleanness is wholly-owned by Mr Chen[206](index=206&type=chunk) - Mr Li and Mr Chen have confirmed they are a group of controlling shareholders of the Company under the Listing Rules, and thus, Mr Li, Rich Cleanness, Mr Chen, and Sunrise Cleanness are each deemed to be interested in 1,173,087,500 shares[206](index=206&type=chunk) - Ms Tang Yongzhen is the spouse of Mr Li and is deemed to be interested in the shares in which Mr Li has an interest under the SFO[206](index=206&type=chunk) [Long positions in the Shares](index=45&type=section&id=Long%20positions%20in%20the%20Shares_Substantial) Rich Cleanness and Sunrise Cleanness each held 30.08% of the Company's shares as of June 30, 2025 Long positions in the shares of the Company (As of June 30, 2025) | Shareholder Name | Nature of interest | Number of shares held | Percentage of issued share capital | | :--- | :--- | :--- | :--- | | Rich Cleanness | Beneficial owner / Other (Interest of controlling shareholder) | 586,543,750 | 30.08% | | Mr Li | Interest in a controlled corporation / Interest in a controlled corporation | 586,543,750 | 30.08% | | Ms Tang Yongzhen | Interest of spouse | 586,543,750 | 30.08% | | Sunrise Cleanness | Beneficial owner / Other (Interest of controlling shareholder) | 586,543,750 | 30.08% | | Mr Chen | Interest in a controlled corporation / Interest in a controlled corporation | 586,543,750 | 30.08% | - Rich Cleanness is wholly-owned by Mr Li, and Sunrise Cleanness is wholly-owned by Mr Chen[206](index=206&type=chunk) - Mr Li and Mr Chen have confirmed they are a group of controlling shareholders of the Company under the Listing Rules, and thus, Mr Li, Rich Cleanness, Mr Chen, and Sunrise Cleanness are each deemed to be interested in 1,173,087,500 shares[206](index=206&type=chunk) - Ms Tang Yongzhen is the spouse of Mr Li and is deemed to be interested in the shares in which Mr Li has an interest under the SFO[206](index=206&type=chunk) [Disclosure of Information on Directors](index=47&type=section&id=Disclosure%20of%20Information%20on%20Directors) This section provides detailed biographical information for the company's executive and independent non-executive directors - **Mr Li Chenghua (52)**, co-chairman and chief executive officer, is responsible for the Group's overall strategic planning, management, operations, and business development, with over 26 years of experience in the cleaning service industry[207](index=207&type=chunk)[208](index=208&type=chunk)[210](index=210&type=chunk)[211](index=211&type=chunk) - **Mr Wei Dongjin (47)**, co-chairman, has over 20 years of experience in oil transportation, bio-based agriculture, and agricultural and forestry waste recycling, and is the founder, chairman, general manager, and legal representative of Shenzhen BTI Excellence Technology Co, Ltd (BTI)[212](index=212&type=chunk)[213](index=213&type=chunk) - **Mr Chen Liming (55)**, an executive director, is responsible for providing industry advice, strategic management, and formulating business strategies, with over 24 years of experience in the cleaning service industry and is one of the Group's founders[214](index=214&type=chunk)[215](index=215&type=chunk)[216](index=216&type=chunk) - **Dr Wang Hui (46)**, an independent non-executive director, has over 25 years of experience in corporate finance and accounting, project investment and decision-making, and risk management and control, and serves as the chairman of the Audit Committee and Investment Committee[221](index=221&type=chunk)[222](index=222&type=chunk)[224](index=224&type=chunk) - **Ms Zhang Baowen (37)**, an independent non-executive director, is a practicing solicitor in Hong Kong with over 12 years of experience in the legal industry and serves as the chairwoman of the Remuneration Committee[223](index=223&type=chunk)[225](index=225&type=chunk)[228](index=228&type=chunk) - **Ms Qiu Yanhong (38)**, an independent non-executive director, has approximately 13 years of experience in the banking industry, focusing on securities and asset management services, and serves as the chairwoman of the Nomination Committee[226](index=226&type=chunk)[227](index=227&type=chunk)[228](index=228&type=chunk)[229](index=229&type=chunk)[230](index=230&type=chunk)[231](index=231&type=chunk)[232](index=232&type=chunk)[233](index=233&type=chunk) [Executive Director](index=47&type=section&id=Executive%20Director) This section details the backgrounds of the three executive directors: Li Chenghua, Wei Dongjin, and Chen Liming - **Mr Li Chenghua (52)**, co-chairman and chief executive officer, is responsible for the Group's overall strategic planning, management, operations, and business development, with over 26 years of experience in the cleaning service industry[207](index=207&type=chunk)[208](index=208&type=chunk)[210](index=210&type=chunk)[211](index=211&type=chunk) - **Mr Wei Dongjin (47)** has over 20 years of experience in oil transportation, bio-based agriculture, and agricultural and forestry waste recycling, and is currently the founder, chairman, general manager, and legal representative of Shenzhen BTI Excellence Technology Co, Ltd (BTI)[212](index=212&type=chunk)[213](index=213&type=chunk) - **Mr Chen Liming (55)**, an executive director, is responsible for providing industry advice, strategic management, and formulating business strategies, with over 24 years of experience in the cleaning service industry and is one of the Group's founders[214](index=214&type=chunk)[215](index=215&type=chunk)[216](index=216&type=chunk) [Independent non-executive Director](index=51&type=section&id=Independent%20non-executive%20Director) This section introduces the backgrounds of the three independent non-executive directors: Dr Wang Hui, Ms Zhang Baowen, and Ms Qiu Yanhong - **Dr Wang Hui (46)**, appointed as an independent non-executive director on July 26, 2024, has over 25 years of experience in corporate finance and accounting, project investment and decision-making, and risk management and control, and serves as the chairman of the Audit Committee and Investment Committee[221](index=221&type=chunk)[222](index=222&type=chunk)[224](index=224&type=chunk) - **Ms Zhang Baowen (37)**, appointed as an independent non-executive director on November 14, 2023, is a practicing solicitor in Hong Kong with over 12 years of experience in the legal industry and serves as the chairwoman of the Remuneration Committee[223](index=223&type=chunk)[225](index=225&type=chunk)[228](index=228&type=chunk) - **Ms Qiu Yanhong (38)**, appointed as an independent non-executive director on November 14, 2023, has approximately 13 years of experience in the banking industry, focusing on securities and asset management services, and serves as the chairwoman of the Nomination Committee[226](index=226&type=chunk)[227](index=227&type=chunk)[228](index=228&type=chunk)[229](index=229&type=chunk)[230](index=230&type=chunk)[231](index=231&type=chunk)[232](index=232&type=chunk)[233](index=233&type=chunk) [Securities Transactions by Directors](index=53&type=section&id=Securities%20Transactions%20by%20Directors) All directors have confirmed full compliance with the Model Code for securities transactions during the period - The Company has adopted the Model Code as set out in Appendix C3 to the Listing Rules as its code of conduct for securities transactions by Directors and relevant employees of the Group[234](index=234&type=chunk) - Specific enquiry has been made to all Directors who were in office during the six months ended June 30, 2025, and all of them have confirmed that they have fully complied with the Model Code and its code of conduct for securities transactions by Directors during the period[234](index=234&type=chunk) [Corporate Governance](index=54&type=section&id=Corporate%20Governance) The Company has complied with the Corporate Governance Code, except for the combined role of Chairman and CEO - During the six months ended June 30, 2025, the Company has complied with the code provisions set out in Part 2 of the Corporate Governance Code in Appendix C1 to the Listing Rules, with the exception that the roles of chairman and chief executive officer should be separate and should not be performed by the same individual[235](index=235&type=chunk)[236](index=236&type=chunk) - The Directors (including the independent non-executive Directors) consider that Mr Li is the best candidate for both positions and that the current structure is conducive to strong and consistent leadership, enabling the Group to make and implement decisions effectively, thus being in the best overall interests of the Group and the Company's shareholders[235](index=235&type=chunk)[236](index=236&type=chunk) [Share Option Scheme](index=55&type=section&id=Share%20Option%20Scheme) The Company adopted a share option scheme on November 14, 2023, to attract and retain talent - The Company adopted a share option scheme on November 14, 2023, to attract and retain the most qualified personnel, provide additional incentives to employees, directors, consultants, advisors, distributors, contractors, suppliers, agents, and service providers of the Group, and to promote the business success of the Group[237](index=237&type=chunk)[238](index=238&type=chunk) - Participants include directors and employees of the Company or any of its subsidiaries, as well as independent contractors who provide continuous and regular services to the Group[239](index=239&type=chunk) - The exercise price is determined at the sole discretion of the Board and shall not be less than the higher of the closing price of the shares on the daily quotation sheet of the Stock Exchange on the offer date, the average closing price on the five business days immediately preceding the offer date, and the nominal value of the shares on the offer date[240](index=240&type=chunk)[243](index=243&type=chunk) - The total number of shares that may be issued under the share option scheme shall not exceed **10% of the total number of issued shares on the Listing Date** (i.e., a maximum of 162,500,000 shares as of December 31, 2023), and the total number of shares granted to service providers shall not exceed 1% of the total issued shares[241](index=241&type=chunk)[243](index=243&type=chunk) - The vesting period for the options shall be no less than 12 months from the offer date, and the scheme is valid for 10 years from November 14, 2023[244](index=244&type=chunk)[245](index=245&type=chunk)[248](index=248&type=chunk)[249](index=249&type=chunk) - As of June 30, 2025, no share options were outstanding, granted, cancelled, exercised, or lapsed[245](index=245&type=chunk)[250](index=250&type=chunk) [Management Contracts](index=57&type=section&id=Management%20Contracts) No management contracts concerning the whole or any substantial part of the business were entered into during the period - During the reporting period, the Company did not enter into or have any contracts concerning the management and administration of the whole or any substantial part of its business[246](index=246&type=chunk)[251](index=251&type=chunk) [Purchase, Sale or Redemption of the Listed Securities of the Company](index=57&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Listed%20Securities%20of%20the%20Company) Neither the Company nor its subsidiaries purchased, sold, or redeemed any of the Company's listed securities - During the six months ended June 30, 2025, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities (including the sale of the Company's treasury shares)[247](index=247&type=chunk)[252](index=252&type=chunk) [Audit Committee](index=58&type=section&id=Audit%20Committee) The Audit Committee has reviewed the unaudited condensed financial results for the six months ended June 30, 2025 - The Audit Committee has reviewed the Group's unaudited condensed financial results for the six months ended June 30, 2025[253](index=253&type=chunk)[254](index=254&type=chunk) - The Audit Committee has discussed with the Company's management the accounting principles and practices adopted by the Group (including a review of the Company's unaudited condensed consolidated financial statements and interim report for the six months ended June 30, 2025), and the Audit Committee had no objections[253](index=253&type=chunk)[254](index=254&type=chunk)

香港交易及結算所有限公司及香港聯合交易所有限公司對本公佈的內容概不負責，對其準確性 或完整性亦不發表任何聲明，並明確表示，概不對因本公佈全部或任何部分內容而產生或因依 賴該等內容而引致的任何損失承擔任何責任。 ESPRIT HOLDINGS LIMITED （於百慕達註冊成立之有限公司） 股份代號：00330 截至二零二五年六月三十日止六個月之中期業績公佈 中期業績 3 思捷環球控股有限公司（「本公司」）董事會（「董事會」）公佈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（「本期間」）之未經審核簡明綜合 中期財務資料連同經挑選的附註如下： 1 簡明綜合中期財務資料 簡明綜合損益表 | | | 未經審核 | 未經審核 | | --- | --- | --- | --- | | | | 截至 | 截至 | | | | 二零二五年 | 二零二四年 | | | | 六月三十日 | 六月三十日 | | | 附註 | 止六個月 | 止六個月 | | | | | （經重列） | | | | 千港元 | 千港元 | | 持續經營業務 | | | | | 收入 | 2 | 6,595 | 26,070 | ...

[Interim Results Announcement](index=1&type=section&id=%E4%B8%AD%E6%9C%9F%E6%A5%AD%E7%B8%BE%E5%85%AC%E5%91%8A) This section presents the interim results announcement, providing an overview of the company's performance and financial position for the period [Financial Highlights](index=1&type=section&id=%E8%B2%A1%E5%8B%99%E6%91%98%E8%A6%81) The company's H1 2025 revenue increased by 22.2% to RMB 326.8 million, gross profit surged by 152.1% to RMB 21.0 million, and gross profit margin improved by 3.3 percentage points to 6.4%, despite a 12.9% expansion in loss for the period due to increased credit impairment provisions 2025 H1 Key Financial Indicators | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | Year-on-year Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 326,775 | 267,451 | 22.2% | | Gross Profit | 20,950 | 8,312 | 152.1% | | Gross Profit Margin | 6.4% | 3.1% | +3.3 percentage points | | Loss Before Tax | 174,184 | 154,225 | 12.9% (expanded) | | Loss for the Period | 174,184 | 154,278 | 12.9% (expanded) | - The primary reason for the expanded loss for the period was an increase in credit impairment loss provisions[5](index=5&type=chunk) [Management Discussion and Analysis](index=2&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) Breton Technology achieved significant revenue growth in H1 2025, primarily driven by strong sales of electric wide-body dump trucks, while making progress in product technology, autonomous driving, and overseas market expansion, despite an increased loss due to higher credit impairment provisions [Performance Overview](index=2&type=section&id=%E6%A5%AD%E7%B8%BE%E6%A6%82%E8%A6%BD) Breton Technology, a leading provider of zero-carbon and smart mining solutions, maintained its top position in electric wide-body dump trucks and electric loaders, with H1 2025 revenue growing 22.2% driven by electric wide-body dump truck sales [About Breton](index=2&type=section&id=%E9%97%9C%E6%96%BC%E5%8D%9A%E9%9B%B7%E9%A0%93) Breton Technology is a leading provider of zero-carbon and smart mining solutions, specializing in electric construction machinery with autonomous capabilities, intelligent operations, and photovoltaic energy storage services - The company is a zero-carbon and smart mining solutions provider, offering electric construction machinery, intelligent operations, and photovoltaic energy storage services[6](index=6&type=chunk) - According to Frost & Sullivan, the company ranked first in shipments of electric wide-body dump trucks with battery capacity exceeding **650 kWh** for three consecutive years from 2022 to 2024[6](index=6&type=chunk) - The company is the first manufacturer in China to launch electric wide-body mining dump trucks equipped with autonomous operating systems and electric loaders utilizing remote operation technology[6](index=6&type=chunk) [Operating Data](index=2&type=section&id=%E7%87%9F%E9%81%8B%E8%B3%87%E6%96%99) Total revenue reached RMB 326.8 million, a 22.2% year-on-year increase, primarily driven by a 77.5% surge in electric wide-body dump truck sales, which accounted for 78.5% of total revenue, while electric loader sales decreased by 51.1% H1 2025 Revenue Composition and Year-on-year Change | Revenue Type | 2025 (RMB thousand) | 2025 (%) | 2024 (RMB thousand) | 2024 (%) | Change (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | **Product Sales:** | | | | | | | | Electric Wide-body Dump Trucks | 256,471 | 78.5 | 144,516 | 54.0 | 111,955 | 77.5 | | Electric Loaders | 53,855 | 16.5 | 110,154 | 41.2 | (56,300) | (51.1) | | Electric Tractors | 298 | 0.1 | 1,456 | 0.5 | (1,158) | (79.5) | | Spare Parts and Accessories | 9,947 | 3.0 | 5,365 | 2.0 | 4,582 | 85.4 | | Subtotal | 320,571 | 98.1 | 261,491 | 97.7 | 59,080 | 22.6 | | Services Provided | 832 | 0.3 | 2,011 | 0.8 | (1,179) | (58.6) | | Rental Income | 5,372 | 1.6 | 3,949 | 1.5 | 1,423 | 36.0 | | **Total Revenue** | **326,775** | **100.0** | **267,451** | **100.0** | **59,324** | **22.2** | [Product and Technology Development](index=3&type=section&id=%E7%94%A2%E5%93%81%E8%88%87%E6%8A%80%E8%A1%93%E9%96%8B%E7%99%BC) As a pioneer in new energy construction machinery, the company continues to invest in developing high-capacity, heavy-duty new energy and intelligent products, accelerating mass production of self-developed chassis electric wide-body dump trucks and initiating new product and technology development - The company accelerated mass production of self-developed chassis electric wide-body dump trucks, with **800V voltage platform technology** reducing product charging time by over **10%**[9](index=9&type=chunk) - Development commenced on **135/145 platform charging and swapping technology**, **135-ton 800kWh battery-swapping models**, **145-ton extended-range electric wide-body dump trucks**, **528kWh high-capacity long-range 6-ton electric loaders**, and **18-ton electric fork loaders** for marble loading and unloading scenarios[9](index=9&type=chunk) - High-capacity fast charging technology and extended-range products will enhance power battery utilization and cruising range, thereby improving vehicle operating efficiency[9](index=9&type=chunk) [Accelerated Implementation of Autonomous Driving Business](index=3&type=section&id=%E8%87%AA%E5%8B%95%E9%A7%95%E9%A7%9B%E6%A5%AD%E5%8B%99%E5%8A%A0%E9%80%9F%E8%90%BD%E5%9C%B0) Leveraging its R&D and manufacturing capabilities, the company achieved over 11% of H1 2025 revenue from autonomous driving equipment sales, surpassing the full-year 2024 level, by offering pre-installed drive-by-wire chassis autonomous solutions - The company achieved autonomous driving equipment with pre-installed drive-by-wire chassis, enabling seamless integration of control systems and autonomous driving algorithms, while also offering better cost-effectiveness[10](index=10&type=chunk) - In H1 2025, sales revenue from autonomous driving equipment accounted for over **11%** of total revenue for the period, exceeding the full-year revenue for similar businesses in 2024[10](index=10&type=chunk) - The autonomous driving business model includes selling unmanned electric equipment, providing autonomous operation technical services, and selling pre-installed drive-by-wire chassis electric equipment without perception and intelligent software, currently not adopting an asset-holding operation model[10](index=10&type=chunk) [Overseas Business Expansion](index=4&type=section&id=%E6%B5%B7%E5%A4%96%E6%A5%AD%E5%8B%99%E6%8B%93%E5%B1%95) The company's overseas strategy focuses on providing equipment and services to Chinese mining enterprises along the "Belt and Road" and offering photovoltaic energy storage solutions to power-deficient regions in Africa and Southeast Asia, thereby promoting electric construction equipment sales - Overseas business strategy includes providing equipment and services to Chinese mining enterprises along the "Belt and Road" initiative, and offering photovoltaic energy storage power generation solutions to power-deficient regions in Africa and Southeast Asia, thereby providing electric construction equipment[11](index=11&type=chunk) - In H1 2025, business expansion progressed in **4 African countries** including Zambia and **2 Southeast Asian countries** including Thailand, involving photovoltaic energy storage microgrid project construction and sales agreements for electric loaders and electric wide-body dump trucks[11](index=11&type=chunk) [Sales Strategy](index=4&type=section&id=%E9%8A%B7%E5%94%AE%E7%AD%96%E7%95%A5) The company employs a "direct sales and distribution" model, targeting large state-owned enterprises and international mining groups through direct sales, while covering regional mines and smaller clients via its distribution network, emphasizing long-term customer engagement and repeat purchases - Adopting a "direct sales and distribution" parallel model, with direct sales targeting large state-owned enterprises and international mining groups, and distribution covering regional mines and small and medium-sized customers[12](index=12&type=chunk) -