香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不負責，對其 準確性或完整性亦不發表任何聲明，並明確表示，概不對因本公告全部或任何部份內容 而產生或因倚賴該等內容而引致的任何損失承擔任何責任。 中期業績 敏實集團有限公司（「本公司」）董事（「董事」）會（「董事會」）欣然宣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（「回顧期間」）未經審核綜合財務業績連 同截至二零二四年六月三十日止六個月（「二零二四年同期」）的比較數字之詳情如下： – 1 – MINTH GROUP LIMITED • 營業額增長約10.8%，達到約人民幣12,287百萬元（二零二四年同期：約人民幣 11,090百萬元）。 • 毛利率約28.3%（二零二四年同期：約28.5%）。 • 本公司擁有人應佔溢利增長約19.5%，為約人民幣1,277百萬元（二零二四年同期： 約人民幣1,068百萬元）。 • 每股基本盈利約人民幣1.120元（二零二四年同期：約人民幣0.928元）。 簡明綜合損益及其他全面收益表 敏實集團有限公司 （於開曼群島註冊成立的有限公司） （股份代號：425） 截至二零二五年六月三十日止 ...

[Company Information and Report Overview](index=1&type=section&id=I.%20Company%20Information%20and%20Report%20Overview) This section provides the Hong Kong Stock Exchange disclaimer, the company's name and stock code, and basic information regarding the interim results announcement [Report Declaration and Company Profile](index=1&type=section&id=1.1%20Report%20Declaration%20and%20Company%20Profile) This section includes the Hong Kong Stock Exchange disclaimer, the company name "TECHNOVATOR INTERNATIONAL LIMITED" and its stock code, and basic information about the interim results announcement - The Hong Kong Stock Exchange assumes no responsibility for the content of this announcement, makes no representation, and accepts no liability for any loss[1](index=1&type=chunk) - The company name is TECHNOVATOR INTERNATIONAL LIMITED (同方泰德國際科技有限公司), with stock code: **1206**[2](index=2&type=chunk)[3](index=3&type=chunk) [Interim Results Announcement](index=1&type=section&id=1.2%20Interim%20Results%20Announcement) The Board is pleased to announce the unaudited consolidated interim financial results of the Company and its subsidiaries for the six months ended June 30, 2025, with comparative figures for the corresponding period in 2024, reviewed by the audit committee and external auditor - The announcement covers the unaudited consolidated interim financial results of the Company and its subsidiaries for the six months ended June 30, 2025[4](index=4&type=chunk) - The results have been reviewed by the audit committee, comprising solely independent non-executive directors, and by the Company's external auditor[4](index=4&type=chunk) [Financial Statements](index=2&type=section&id=II.%20Financial%20Statements) This section presents the company's consolidated financial statements, including the statement of profit or loss, comprehensive income, and financial position, reflecting significant improvements in profitability and a stable financial structure [Consolidated Statement of Profit or Loss](index=2&type=section&id=2.1%20Consolidated%20Statement%20of%20Profit%20or%20Loss) For the six months ended June 30, 2025, the company reported significant revenue growth and a substantial increase in gross profit, leading to a considerable reduction in loss for the period despite increased operating expenses Consolidated Statement of Profit or Loss Key Financial Data (RMB thousands) | Indicator | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | | Revenue | 665,473 | 512,572 | 29.8% Increase | | Cost of sales | (544,393) | (456,487) | 19.3% Increase | | Gross profit | 121,080 | 56,085 | 115.9% Increase | | Other income | 10,879 | 13,234 | 17.8% Decrease | | Operating loss | (5,725) | (75,247) | 92.4% Decrease | | Finance costs | (5,029) | (4,042) | 24.4% Increase | | Loss before tax | (10,754) | (79,289) | 86.4% Decrease | | Income tax | 3,091 | 7,380 | 58.1% Decrease | | Loss for the period | (7,663) | (71,909) | 89.3% Decrease | | Basic loss per share (RMB) | (0.0083) | (0.0889) | 90.7% Decrease | | Diluted loss per share (RMB) | (0.0083) | (0.0889) | 90.7% Decrease | [Consolidated Statement of Comprehensive Income](index=3&type=section&id=2.2%20Consolidated%20Statement%20of%20Comprehensive%20Income) For the six months ended June 30, 2025, the company's loss for the period was RMB7,663 thousand, resulting in a total comprehensive loss of RMB(7,753) thousand, a significant reduction from the prior year Consolidated Statement of Comprehensive Income Key Data (RMB thousands) | Indicator | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Loss for the period | (7,663) | (71,909) | | Exchange differences on translation of financial statements of overseas subsidiaries | (90) | 82 | | Total comprehensive income for the period | (7,753) | (71,827) | | Total comprehensive income attributable to equity holders of the Company | (6,582) | (69,475) | | Total comprehensive income attributable to non-controlling interests | (1,171) | (2,352) | [Consolidated Statement of Financial Position](index=4&type=section&id=2.3%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the company's total assets and liabilities both decreased, while net assets remained stable, indicating a robust overall financial structure despite a slight decline in net current assets Consolidated Statement of Financial Position Key Data (RMB thousands) | Indicator | June 30, 2025 | December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | **Non-current assets** | | | | | Property, plant and equipment | 56,732 | 60,709 | (6.5%) | | Intangible assets | 538,377 | 576,200 | (6.6%) | | Financial assets measured at amortized cost | 376,039 | 500,329 | (24.8%) | | Deferred tax assets | 61,189 | 58,496 | 4.6% | | **Current assets** | | | | | Inventories | 1,365,083 | 1,363,757 | 0.1% | | Contract assets | 937,683 | 987,448 | (5.1%) | | Trade and other receivables | 1,595,172 | 1,687,280 | (5.5%) | | Prepayments | 141,047 | 114,307 | 23.4% | | Bank balances and cash | 101,761 | 344,686 | (70.5%) | | **Current liabilities** | | | | | Trade and other payables | 2,144,299 | 2,400,263 | (10.7%) | | Contract liabilities | 126,999 | 148,360 | (14.4%) | | Loans and borrowings | 269,438 | 308,982 | (12.8%) | | Lease liabilities | 927 | 921 | 0.7% | | Current tax payable | 26,063 | 28,869 | (9.7%) | | **Non-current liabilities** | | | | | Deferred tax liabilities | 3,820 | 3,383 | 13.0% | | Deferred income | 6,406 | 6,580 | (2.7%) | | Loans and borrowings | 36,980 | 38,598 | (4.2%) | | Lease liabilities | 57,228 | – | N/A | | **Equity** | | | | | Net assets | 2,625,213 | 2,632,966 | (0.3%) | | Total equity attributable to equity holders of the Company | 2,607,178 | 2,613,760 | (0.2%) | | Non-controlling interests | 18,035 | 19,206 | (6.1%) | [Notes to the Financial Statements](index=6&type=section&id=III.%20Notes%20to%20the%20Financial%20Statements) This section details the basis of preparation, accounting policies, and specific analyses of revenue, segments, loss before tax, income tax, loss per share, receivables, payables, share capital, and subsequent events [Basis of Preparation and Accounting Policies](index=6&type=section&id=3.1%20Basis%20of%20Preparation%20and%20Accounting%20Policies) The interim financial report is prepared in accordance with the HKEX Listing Rules and HKAS 34, authorized for issue on August 27, 2025, using consistent accounting policies with the 2024 annual financial statements, without early adoption of new standards - The interim financial report is prepared in accordance with the HKEX Listing Rules and HKAS 34, authorized for issue on **August 27, 2025**[12](index=12&type=chunk) - The report adopts the same accounting policies as the 2024 annual financial statements, without applying any new standards or interpretations not yet effective for the current accounting period[12](index=12&type=chunk)[16](index=16&type=chunk) - KPMG has reviewed the interim financial report in accordance with Hong Kong Standard on Review Engagements 2410[14](index=14&type=chunk) [Revenue Analysis](index=7&type=section&id=3.2%20Revenue%20Analysis) The Group primarily provides integrated smart energy-saving services for cities, encompassing smart transportation, smart building and park, and smart energy segments, with total customer contract revenue reaching **RMB665,473 thousand** in H1 2025, a significant increase from the prior year - The Group primarily engages in integrated smart energy-saving services for cities, covering smart transportation, smart building and park, and smart energy segments[17](index=17&type=chunk) Customer Contract Revenue by Service Type (RMB thousands) | Service Type | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Smart Transportation Business Revenue | 93,397 | 93,261 | | Smart

Financial Performance - Revenue for the six months ended June 30, 2025, was RMB 404,850,000, a decrease of 23.0% compared to RMB 526,088,000 for the same period in 2024[3] - Gross profit for the same period was RMB 102,043,000, down 25.7% from RMB 137,260,000, resulting in a gross margin of 25.2%, a decline of 0.9 percentage points[4] - Net profit for the period was RMB 11,436,000, a significant decrease of 74.9% from RMB 45,620,000 in the previous year[5] - The company reported a loss attributable to owners of the company of RMB 5,412,000, compared to a profit of RMB 30,716,000 in the prior period[4] - Basic and diluted earnings per share were RMB (0.94), compared to RMB 5.20 for the same period last year[4] - Total comprehensive income for the period was RMB 11,766,000, down from RMB 57,343,000 in the previous year[5] - The pre-tax profit for the six months ended June 30, 2025, was RMB (5,412,000), compared to RMB 30,716,000 for the same period in 2024[22] - Operating profit for the six months ended June 30, 2025, was approximately RMB 15,958,000, a decrease of about RMB 41,971,000 or 72.5% from RMB 57,929,000 for the same period in 2024[80] - The pre-tax profit was approximately RMB 13,874,000, a decrease of about RMB 41,592,000 or 75.0% compared to RMB 55,466,000 for the same period in 2024[82] - The net profit for the six months ended June 30, 2025, was approximately RMB 11,436,000, a decrease of about RMB 34,184,000 or 74.9% from RMB 45,620,000 for the same period in 2024[84] Revenue Breakdown - Sales of pharmaceuticals amounted to RMB 266,154,000, down 25.3% from RMB 356,306,000 in the previous year[13] - Medical equipment sales increased to RMB 118,398,000, up 3.4% from RMB 113,906,000 in the prior year[13] - The pharmaceutical distribution segment recorded sales of RMB 266.2 million, representing a year-on-year decrease of 25.3% due to a 15% decline in the Chinese urban OTC market[30] - The sales of the flagship product, Laba Brand Zhenglu Pills, increased significantly by 443.2% during the reporting period, indicating strong market potential despite supply chain challenges[31] - The sales of Jinhua Yima Da Zhenhonghua Oil reached RMB 21.5 million, showing a slight decline of 10.6% year-on-year due to overall industry pressures[32] - The newly launched Foci Jinhua Angong Niuhuang Pills achieved sales of RMB 1.5 million, with a remarkable year-on-year growth of 315.4%[34] Assets and Liabilities - Non-current assets as of June 30, 2025, totaled RMB 816,911,000, an increase from RMB 807,800,000 at the end of December 2024[6] - Current liabilities amounted to RMB 510,138,000, slightly decreased from RMB 514,868,000 at the end of December 2024[7] - The company's total equity was RMB 699,010,000, a slight decrease from RMB 705,532,000 at the end of December 2024[7] - Trade receivables and notes receivable, net of credit loss provisions, amounted to RMB 160,072,000 as of June 30, 2025, compared to RMB 157,724,000 at the end of 2024[27] - As of June 30, 2025, total accounts payable amounted to RMB 156.34 million, a decrease from RMB 214.06 million as of December 31, 2024[28] Research and Development - The company incurred research and development costs of RMB 8,492,000, an increase from RMB 6,742,000 in the previous year[16] - The company is set to launch a new probiotic product developed in collaboration with Hong Kong University of Science and Technology, aimed at addressing gut health issues among young professionals and the elderly[50] - A collaboration with a senior professor team from a university is planned to develop health products based on traditional Chinese medicine, focusing on key technologies such as active ingredient extraction and quality standards[54] Marketing and Brand Strategy - The company launched a nationwide marketing campaign during key festivals, including a large-screen advertisement during the Spring Festival, to deepen emotional connections with consumers[39] - The company set up "Gaokao Guardian Stations" during the national college entrance examination, effectively increasing brand exposure and public recognition[40] - A total of 22 promotional events were organized for Mother's Day, and 8 events were held during the "Learn from Lei Feng" month, integrating brand care into consumers' daily lives[41] - The company established 400 flagship stores for "Jin Huo Pai Yi Ma Da Zheng Hong Hua You," significantly enhancing brand visibility and high-end image[38] - The company has enhanced its brand exposure by sponsoring professional sports events, significantly increasing brand recall among target consumers[48] Social Responsibility - The company donated nearly RMB 3 million worth of Jinfuke Capsules to various charitable organizations, enhancing brand recognition and social impact[35] - The group contributed over RMB 680,000 in cash and medical supplies to support earthquake relief efforts in Shigatse, Tibet[71] - The group continues to promote social responsibility initiatives, including educational support and health-related donations, to enhance community well-being[72] Strategic Initiatives - The company plans to deepen upstream cooperation and explore new product forms and specifications to drive future growth[29] - The company aims to leverage its terminal network advantages to accelerate the introduction of new products and enhance performance growth[29] - The company is expanding its market share through collaborations, such as the partnership with Qihuang Pharmaceutical for the exclusive marketing of a proprietary product targeting elderly consumers[44] - The company is in strategic discussions with a leading European herbal therapy manufacturer to develop products focused on joint health, sleep improvement, and immune enhancement, aiming to capture growth opportunities in the health market[53] Compliance and Governance - The company has adopted the standard code of conduct for securities trading as per the listing rules, confirming compliance by all directors during the reporting period[115] - The Nomination Committee was established on November 5, 2010, with four members, and the terms of reference were revised on June 30, 2025[116] - The Audit Committee, also established on November 5, 2010, is responsible for overseeing financial reporting and internal controls, with four members during the reporting period[117] - The company’s financial statements for the six months ending June 30, 2025, were reviewed by the Audit Committee, confirming adherence to current accounting standards[118] Employee Development - The group has implemented a comprehensive talent development system, with nearly 1,000 training sessions conducted to enhance professional skills and management capabilities[68] - The group actively recruited professional talent, including management accounting positions, to enable more precise analysis of operational costs and optimize resource allocation[69] - The company emphasizes a "people-oriented" management philosophy, actively building platforms for employee development and performance evaluation[108]

[Company Information and Performance Summary](index=1&type=section&id=%E5%85%AC%E5%8F%B8%E4%BF%A1%E6%81%AF%E4%B8%8E%E4%B8%9A%E7%BB%A9%E6%91%98%E8%A6%81) This section provides an overview of the company, its interim performance highlights, and dividend policy [Company Profile](index=1&type=section&id=%E5%85%AC%E5%8F%B8%E7%AE%80%E4%BB%8B) China Shengmu Organic Milk Limited (Stock Code: 1432) announced its interim results for the six months ended June 30, 2025, with all amounts presented in RMB thousands - Company Name: **China Shengmu Organic Milk Limited** (CHINA SHENGMU ORGANIC MILK LIMITED)[2](index=2&type=chunk) - Stock Code: **1432**[2](index=2&type=chunk) - Reporting Period: Six months ended **June 30, 2025**[2](index=2&type=chunk) [Interim Performance Highlights](index=1&type=section&id=%E4%B8%AD%E6%9C%9F%E4%B8%9A%E7%BB%A9%E4%BA%AE%E7%82%B9) During the reporting period, the company's operating revenue increased by 5.3%, cash EBITDA grew by 19.7%, loss attributable to owners of the parent significantly narrowed by 66.4%, annual milk yield per mature cow improved by 1.7%, and cost of sales per kg of milk decreased by 7.4% Key Operating Status for the Six Months Ended June 30, 2025 | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | Change | | :--- | :--- | :--- | :--- | | Operating Revenue | 1,650,912 | 1,567,692 | +5.3% | | Sales Revenue | 1,444,274 | 1,490,702 | -3.1% | | Gross Profit | 364,866 | 394,509 | -7.5% | | Loss Attributable to Owners of the Parent | (48,322) | (143,681) | -66.4% | | Cash EBITDA | 484,420 | 404,740 | +19.7% | | Annual Milk Yield per Mature Cow (tonnes/year/head) | 12.27 | 12.07 | +1.7% | | Administrative Expense Ratio | 3.9% | 4.2% | -0.3% | | Cost of Sales per kg of Milk (RMB/kg) | 2.89 | 3.12 | -7.4% | [Interim Dividend](index=1&type=section&id=%E4%B8%AD%E6%9C%9F%E8%82%A1%E6%81%AF) The Board does not recommend an interim dividend for the six months ended June 30, 2025, consistent with the prior year - The Board does not recommend an interim dividend for the six months ended June 30, 2025 (2024: nil)[4](index=4&type=chunk) [Financial Statements](index=3&type=section&id=%E8%B4%A2%E5%8A%A1%E6%8A%A5%E8%A1%A8) This section presents the company's interim condensed consolidated income statement, comprehensive income statement, and statement of financial position [Interim Condensed Consolidated Statement of Profit or Loss](index=3&type=section&id=%E4%B8%AD%E6%9C%9F%E7%AE%80%E6%98%8E%E7%BB%BC%E5%90%88%E6%8D%9F%E7%9B%8A%E8%A1%A8) During the reporting period, the company's sales revenue decreased by 3.1% and gross profit by 7.5%, but due to a significant increase in other income and gains and effective control over various expenses, both loss before tax and loss for the period narrowed significantly Key Data from Interim Condensed Consolidated Statement of Profit or Loss | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | Change | | :--- | :--- | :--- | :--- | | Sales Revenue | 1,444,274 | 1,490,702 | -3.1% | | Cost of Sales | (1,079,408) | (1,096,193) | -1.5% | | Gross Profit | 364,866 | 394,509 | -7.5% | | Loss from Changes in Fair Value of Biological Assets Less Costs to Sell | (471,255) | (451,023) | +4.5% | | Other Income and Gains | 166,525 | 49,900 | +233.7% | | Selling and Distribution Expenses | (26,062) | (27,883) | -6.5% | | Administrative Expenses | (55,768) | (62,678) | -11.0% | | Finance Costs | (19,366) | (23,464) | -17.5% | | Loss Before Tax | (45,386) | (145,506) | -68.8% | | Loss for the Period | (45,601) | (145,510) | -68.7% | | Loss Attributable to Owners of the Parent | (48,322) | (143,681) | -66.4% | | Profit / (Loss) Attributable to Non-controlling Interests | 2,721 | (1,829) | Turnaround to profit | - Basic and diluted loss per share attributable to ordinary equity holders of the parent was **RMB 0.006**, a significant reduction from **RMB 0.018** in the prior period[9](index=9&type=chunk) [Interim Condensed Consolidated Statement of Comprehensive Income](index=5&type=section&id=%E4%B8%AD%E6%9C%9F%E7%AE%80%E6%98%8E%E7%BB%BC%E5%90%88%E5%85%A8%E9%9D%A2%E6%94%B6%E7%9B%8A%E8%A1%A8) During the reporting period, the company's total comprehensive loss for the period significantly narrowed to RMB 48.6 million from RMB 149.5 million in the prior period, primarily due to the reduction in loss for the period Key Data from Interim Condensed Consolidated Statement of Comprehensive Income | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Loss for the Period | (45,601) | (145,510) | | Other Comprehensive Loss, Net of Tax | (3,000) | (4,000) | | Total Comprehensive Loss for the Period | (48,601) | (149,510) | | Attributable to Owners of the Parent | (51,322) | (147,681) | | Attributable to Non-controlling Interests | 2,721 | (1,829) | [Interim Condensed Consolidated Statement of Financial Position](index=6&type=section&id=%E4%B8%AD%E6%9C%9F%E7%AE%80%E6%98%8E%E7%BB%BC%E5%90%88%E8%B4%A2%E5%8A%A1%E7%8A%B6%E5%86%B5%E8%A1%A8) As of June 30, 2025, the company's total non-current assets decreased, total current liabilities increased, leading to an expansion of net current liabilities; total equity slightly decreased, but the capital structure remained stable Key Data from Interim Condensed Consolidated Statement of Financial Position | Indicator | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Total Non-current Assets | 5,812,094 | 6,342,946 | | Total Current Assets | 2,215,300 | 2,121,306 | | Total Current Liabilities | 3,055,573 | 2,639,153 | | Net Current Liabilities | (840,273) | (517,847) | | Net Assets | 4,131,729 | 4,175,792 | | Total Equity | 4,131,729 | 4,175,792 | - Biological assets (non-current portion) decreased from **RMB 3,380,138 thousands** at the end of 2024 to **RMB 3,245,672 thousands** as of June 30, 2025[12](index=12&type=chunk) - Interest-bearing bank borrowings (current portion) significantly increased from **RMB 666,565 thousands** at the end of 2024 to **RMB 1,451,128 thousands** as of June 30, 2025[12](index=12&type=chunk) [Notes to the Financial Statements](index=8&type=section&id=%E8%B4%A2%E5%8A%A1%E6%8A%A5%E8%A1%A8%E9%99%84%E6%B3%A8) This section provides detailed notes on the preparation basis, accounting policy changes, operating segment information, revenue analysis, and other financial statement components [Basis of Preparation and Going Concern](index=8&type=section&id=%E7%BC%96%E5%88%B6%E5%9F%BA%E7%A1%80%E4%B8%8E%E6%8C%81%E7%BB%AD%E7%BB%8F%E8%90%A5) The interim financial information is prepared in accordance with IAS 34 and on a going concern basis, as the Board believes the company has sufficient financial resources to meet its obligations as they fall due - The interim condensed consolidated financial information is prepared in accordance with **IAS 34 "Interim Financial Reporting"**[14](index=14&type=chunk) - As of June 30, 2025, the Group's net current liabilities were **RMB 840,273 thousands**, an increase from **RMB 517,847 thousands** at the end of 2024[15](index=15&type=chunk) - The Board is confident that the Group has the ability to fully meet its financial obligations as they fall due in the foreseeable future, thus preparing the financial information on a **going concern basis**[15](index=15&type=chunk) [Changes in Accounting Policies](index=8&type=section&id=%E4%BC%9A%E8%AE%A1%E6%94%BF%E7%AD%96%E5%8F%98%E5%8A%A8) During the reporting period, the company first adopted the revised IFRS, but these revisions had no significant impact on the interim condensed consolidated financial information as the Group's transaction and functional currencies are convertible to the presentation currency - Adopted amendments to **IAS 21** regarding lack of exchangeability[16](index=16&type=chunk)[17](index=17&type=chunk) - These amendments had no impact on the interim condensed consolidated financial information as the currencies used for the Group's transactions and the functional currencies of its entities are convertible to the Group's presentation currency[17](index=17&type=chunk) [Operating Segment Information](index=9&type=section&id=%E7%BB%8F%E8%90%A5%E5%88%86%E9%83%A8%E8%B5%84%E6%96%99) The Group has only one reportable operating segment, with all revenue and non-current assets derived from mainland China - The Group has **only one reportable operating segment**[18](index=18&type=chunk) - All of the Group's revenue is derived from customers located in **mainland China**, and all non-current assets are located in **mainland China**[19](index=19&type=chunk) [Sales Revenue Analysis](index=9&type=section&id=%E9%94%80%E5%94%AE%E6%94%B6%E5%85%A5%E5%88%86%E6%9E%90) Sales revenue primarily derived from raw milk sales, totaling RMB 1,444,274 thousands during the reporting period, a slight decrease year-on-year Sales Revenue Details | Category | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Sales of Raw Milk | 1,444,274 | 1,490,702 | | Geographical Market | Mainland China | Mainland China | | Timing of Revenue Recognition | At a point in time | At a point in time | [Components of Loss Before Tax](index=10&type=section&id=%E9%99%A4%E7%A8%8E%E5%89%8D%E4%BA%8F%E6%8D%9F%E6%9E%84%E6%88%90) Loss before tax was primarily affected by losses from changes in fair value of biological assets less costs to sell, cost of inventories sold, and depreciation and amortization, but the amount of write-down of inventories to net realizable value significantly decreased Main Components of Loss Before Tax | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Cost of Inventories Sold | 1,079,408 | 1,096,193 | | Write-down of Inventories to Net Realizable Value | 900 | 20,557 | | Loss from Changes in Fair Value of Biological Assets Less Costs to Sell | 471,255 | 451,023 | | Depreciation of Property, Plant and Equipment | 63,550 | 62,831 | | Depreciation of Right-of-Use Assets | 8,990 | 9,050 | | Amortization of Other Intangible Assets | 1,293 | 718 | [Income Tax Expense](index=10&type=section&id=%E6%89%80%E5%BE%97%E7%A8%8E%E5%BC%80%E6%94%AF) Income tax expense for the reporting period was RMB 215 thousands, primarily due to supplementary tax payments for prior years' income tax reconciliation, a significant increase from the prior period Income Tax Expense | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Current - China Expense for the Period | — | 4 | | Supplementary Tax Payment for Prior Years' Income Tax Reconciliation | 215 | — | | Total | 215 | 4 | [Loss Per Share](index=11&type=section&id=%E6%AF%8F%E8%82%A1%E4%BA%8F%E6%8D%9F) Both basic and diluted loss per share significantly narrowed, reflecting an improvement in the company's loss situation, with no dilutive effect from potential ordinary shares Loss Per Share Calculation Data | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Loss Attributable to Ordinary Equity Holders of the Parent | (48,322) | (143,681) | | Weighted Average Number of Shares for Basic Loss Per Share | 8,268,292,000 | 8,169,239,000 | | Weighted Average Number of Shares for Diluted Loss Per Share | 8,268,292,000 | 8,169,239,000 | | Basic Loss Per Share | (RMB 0.006) | (RMB 0.018) | | Diluted Loss Per Share | (RMB 0.006) | (RMB 0.018) | [Trade Receivables](index=12&type=section&id=%E8%B4%B8%E6%98%93%E5%BA%94%E6%94%B6%E6%AC%BE%E9%A1%B9) As of the end of the reporting period, trade receivables were primarily within 3 months, with the total amount slightly decreasing Aging Analysis of Trade Receivables | Aging | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Within 3 months | 271,796 | 287,701 | [Trade Payables and Bills Payable](index=12&type=section&id=%E8%B4%B8%E6%98%93%E5%BA%94%E4%BB%98%E6%AC%BE%E9%A1%B9%E5%8F%8A%E5%BA%94%E4%BB%98%E7%A5%A8%E6%8D%AE) As of the end of the reporting period, total trade payables and bills payable decreased, but amounts aged 4 to 6 months increased Aging Analysis of Trade Payables and Bills Payable | Aging | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Within 3 months | 757,748 | 1,036,986 | | 4 to 6 months | 614,299 | 596,909 | | 7 to 12 months | 6,525 | 3,689 | | 1 to 2 years | 1,629 | 5,898 | | 2 to 3 years | 2,476 | 2,283 | | Over 3 years | 4,786 | 3,995 | | Total | 1,387,463 | 1,649,760 | [Biological Assets](index=13&type=section&id=%E7%94%9F%E7%89%A9%E8%B5%84%E4%BA%A7) As of the end of the reporting period, total biological assets decreased, with reductions in both mature cows and heifers, calves, and beef cattle Biological Assets Value | Category | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Mature Cows | 1,861,264 | 1,942,658 | | Heifers, Calves and Beef Cattle | 1,401,887 | 1,523,863 | | Total | 3,263,151 | 3,466,521 | - The Group has engaged **JLL Corporate Appraisal and Advisory Limited**, an independent professional valuation firm, to assist in assessing the fair value of biological assets[27](index=27&type=chunk) [Share Award Scheme](index=13&type=section&id=%E8%82%A1%E4%BB%BD%E5%A5%96%E5%8A%B1%E8%AE%A1%E5%88%92) The company adopted a ten-year share award scheme in 2022, and during the reporting period, the second and third tranches of share awards were vested - The company adopted a **ten-year long-term share award scheme** on April 19, 2022[28](index=28&type=chunk) - For the six months ended June 30, 2025, the **second tranche of 49,220,000 shares** and the **third tranche of 27,577,000 shares** were vested[28](index=28&type=chunk) [Events After Reporting Period](index=13&type=section&id=%E6%8A%A5%E5%91%8A%E6%9C%9F%E5%90%8E%E4%BA%8B%E4%BB%B6_%E9%99%84%E6%B3%A8) Subsequent to the reporting period, the company received a final judgment from the Inner Mongolia Autonomous Region Higher People's Court, significantly reducing the plaintiff's awarded compensation, and the company has adjusted its provision for litigation and claims accordingly - On July 28, 2025, the company received a copy of the final judgment from the Inner Mongolia Autonomous Region Higher People's Court regarding the investment agreement litigation[29](index=29&type=chunk) - The appellate court significantly reduced the plaintiff's awarded compensation and dismissed other claims[29](index=29&type=chunk) - The Group has adjusted its provision for litigation and claims to **RMB 39,436 thousands**, with this adjustment made as of June 30, 2025[29](index=29&type=chunk) [Industry Overview and Business Review](index=14&type=section&id=%E8%B4%A2%E5%8A%A1%E6%8A%A5%E8%A1%A8%E9%99%84%E6%B3%A8) This section provides an overview of the industry landscape, including macroeconomic conditions and challenges in the dairy sector, along with a review of the company's operational performance and ESG practices [Industry Overview](index=14&type=section&id=%E8%A1%8C%E4%B8%9A%E6%A6%82%E8%A7%88) In the first half of 2025, China's economy grew steadily, but the dairy industry faced severe challenges with slow consumption recovery, continuous decline in raw milk prices, and widespread losses among farms, partially alleviated by falling feed costs [Macroeconomic and Consumer Market](index=14&type=section&id=%E5%AE%8F%E8%A7%82%E7%BB%8F%E6%B5%8E%E4%B8%8E%E6%B6%88%E8%B4%B9%E5%B8%82%E5%9C%BA) In the first half of 2025, GDP grew by 5.3%, total retail sales of consumer goods increased by 5.0%, and CPI decreased by 0.1%, indicating consumption structure upgrades but insufficient consumer capacity and willingness - Half-year domestic production value was **RMB 66.0536 trillion**, a year-on-year increase of **5.3%**[30](index=30&type=chunk) - Half-year total retail sales of consumer goods were **RMB 24.5458 trillion**, a year-on-year increase of **5.0%**[30](index=30&type=chunk) - Half-year national consumer price index (CPI) decreased by **0.1%** year-on-year[30](index=30&type=chunk) [Challenges Faced by China's Dairy Industry](index=15&type=section&id=%E4%B8%AD%E5%9B%BD%E5%A5%B6%E4%B8%9A%E9%9D%A2%E4%B8%B4%E7%9A%84%E6%8C%91%E6%88%98) Dairy product consumption recovery was slow, raw milk prices declined for three consecutive years, and total imported dairy products increased, with international prices of whole milk powder consistently higher than domestic raw milk purchase prices, intensifying domestic market substitution pressure - Dairy product consumption recovery was slow, and raw milk prices declined for **three consecutive years**, remaining at historically low levels[31](index=31&type=chunk) - In the first half of 2025, national large-scale dairy product manufacturing enterprises produced **14.33 million tonnes**, a year-on-year decrease of **0.3%**[31](index=31&type=chunk) - In the first half, imports of various dairy products totaled **1.3825 million tonnes**, a year-on-year increase of **5.7%**; of which dry dairy products increased by **8.7%**, and liquid milk decreased by **2.6%**[31](index=31&type=chunk) [Dairy Farming Industry Status](index=16&type=section&id=%E5%A5%B6%E7%89%9B%E5%85%BB%E6%AE%96%E8%A1%8C%E4%B8%9A%E7%8A%B6%E5%86%B5) In the first half, China's total raw milk production slightly increased by 0.5%, but fresh milk prices continued to fall to historical lows; feed costs decreased, yet farm economic efficiency remained low, with widespread losses leading to accelerated culling of low-yield dairy cows - In the first half of 2025, China's total raw milk production was **18.64 million tonnes**, a year-on-year increase of **0.5%**[32](index=32&type=chunk) - The average price of fresh milk was **RMB 3.04/kg**, a year-on-year decrease of **7.0%**[32](index=32&type=chunk) - Average corn price decreased by **3.9%** year-on-year, and average soybean meal price decreased by **9.1%** year-on-year, easing feed cost pressure[32](index=32&type=chunk) [Business Overview](index=16&type=section&id=%E4%B8%9A%E5%8A%A1%E6%A6%82%E8%BF%B0) The Group's core business is dairy farming, focusing on producing and selling high-end desert organic raw milk, organic A2 raw milk, and DHA raw milk, forming a differentiated competitive advantage through a "high-end + diversified" product strategy - Core business: **Dairy farming**, producing and selling **high-end desert organic raw milk, organic A2 raw milk, and DHA raw milk**[33](index=33&type=chunk) - Strategy: Deepen the main business of desert organic milk production and sales, while developing various functional raw milk products to enrich the product matrix and enhance profitability[33](index=33&type=chunk) [Operating Review](index=17&type=section&id=%E7%BB%8F%E8%90%A5%E5%9B%9E%E9%A1%B5) The company achieved steady growth in raw milk sales and a decrease in cost of sales per kg of milk through optimizing herd structure, improving yield, and lean operations, while the beef cattle business benefited from rising beef prices [Herd Size and Structure Optimization](index=17&type=section&id=%E7%95%9C%E7%BE%A4%E8%A6%8F%E6%A8%A1%E8%88%87%E7%B5%90%E6%A7%8B%E5%84%AA%E5%8C%96) As of June 30, 2025, the Group operated 34 farms with a total herd size of 146,516 head, including 143,553 dairy cows, with mature cows accounting for 44.9%; beef cattle inventory decreased but focused on high-end breeds Herd Size | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Number of Farms | 34 | 34 | | Dairy Cow Inventory (head) | 143,553 | 144,448 | | Of which: Mature Cows (head) | 64,477 | 62,842 | | Calves and Heifers (head) | 79,076 | 81,606 | | Proportion of Mature Cows in Dairy Cow Inventory | 44.9% | 43.5% | | Beef Cattle (head) | 2,963 | 12,033 | - Beef cattle inventory decreased by **9,070 head** from the end of last year, with breeding focused on high-end core cattle such as Wagyu and Angus[34](index=34&type=chunk) [Production Efficiency and Cost Management](index=18&type=section&id=%E7%94%9F%E7%94%A2%E6%95%88%E7%8E%87%E8%88%87%E6%88%90%E6%9C%AC%E7%AE%A1%E7%90%86) In the first half, annual milk yield per mature cow reached a record high of 12.27 tonnes, and raw milk sales volume increased by 6.3%; despite an 8.9% decrease in average raw milk selling price, cost of sales per kg of milk decreased by 7.4%, and total three expenses decreased by 11.3% - In the first half of 2025, annual milk yield per mature cow reached **12.27 tonnes**, an increase of **1.7%** from mid-2024, setting a new historical high[36](index=36&type=chunk) - Raw milk sales volume in the first half was **372,973 tonnes**, a year-on-year increase of **6.3%**, with high-end raw milk sales accounting for **80%**[36](index=36&type=chunk) - Average raw milk selling price decreased to **RMB 3.87/kg**, a year-on-year decrease of **8.9%**[37](index=37&type=chunk) - Cost of sales per kg of milk was **RMB 2.89/kg**, a year-on-year decrease of **7.4%**, primarily due to lower feed costs[37](index=37&type=chunk) - Total three expenses (administrative, selling, finance) in the first half were **RMB 101.2 million**, a year-on-year decrease of **11.3%**[37](index=37&type=chunk) [Beef Cattle Business](index=20&type=section&id=%E8%82%B2%E8%82%A5%E7%89%9B%E4%B8%9A%E5%8A%A1) The company moderately reduced dairy cow inventory based on market demand, optimizing herd structure, with inefficient and aged cows being the primary culling targets; the beef cattle business benefited from rising beef prices, with sales revenue significantly increasing year-on-year - Dairy cow inventory was **143,553 head**, a decrease of **895 head** from the end of last year, with mature cows accounting for **44.9%**[38](index=38&type=chunk) - In the first half, inefficient and aged cows were the primary culling targets, and revenue from culled cows increased year-on-year[38](index=38&type=chunk) - Beef cattle inventory decreased to **2,963 head**, and beef cattle sales revenue significantly increased year-on-year[38](index=38&type=chunk) [ESG Practices and Human Resources](index=21&type=section&id=%EESG%E5%AE%9E%E8%B7%B5%E4%B8%8E%E4%BA%BA%E5%8A%9B%E8%B5%84%E6%BA%90) The company continues to implement ESG principles, achieving an overall "B" rating in CDP and winning multiple ESG awards; simultaneously, digital investments improved per capita efficiency, leading to a decrease in total employee costs [ESG Practices](index=21&type=section&id=%EESG%E5%AE%9E%E8%B7%B5) The Group achieved an overall "B" rating in climate change, water security, and forest risk in the 2024 CDP assessment, received the "Outstanding ESG Disclosure Contribution Excellence Award" and "2024 China Enterprise ESG Practice Demonstration Unit" title, and was the first to implement ISSB's IFRS S2 climate-related disclosure standards, continuously improving animal welfare - Achieved an overall **"B" rating** in climate change, water security, and forest risk in the 2024 CDP assessment[39](index=39&type=chunk) - Awarded the **"Outstanding ESG Disclosure Contribution Excellence Award"** by the Hong Kong Quality Assurance Agency[39](index=39&type=chunk) - First to fully implement the International Sustainability Standards Board (ISSB)'s latest **IFRS S2 Climate-related Disclosures**[39](index=39&type=chunk) - Awarded the **"Farm Animal Welfare Product Certification"**, becoming the first domestic farming enterprise to receive **"Three-Star Certification"**[40](index=40&type=chunk) [Human Resources and Employee Remuneration](index=22&type=section&id=%E4%BA%BA%E5%8A%9B%E8%B5%84%E6%BA%90%E5%8F%8A%E5%83%B1%E5%93%A1%E8%96%AA%E9%85%AC) The company improved per capita efficiency through digital and intelligent investments, resulting in a slight reduction in employee numbers and a year-on-year decrease in total employee costs - As of June 30, 2025, the Group had **2,193 employees** (December 31, 2024: 2,217 employees)[41](index=41&type=chunk) - Total employee costs for the first half of 2025 were **RMB 149.2 million** (first half of 2024: RMB 169.6 million), a year-on-year decrease of **12.0%**[41](index=41&type=chunk) [Financial Review](index=22&type=section&id=%E8%B4%A2%E5%8A%A1%E5%9B%9E%E9%A1%B5) This section provides a detailed financial review, analyzing sales revenue, cost of sales, gross profit, fair value changes of biological assets, other income, and various expenses, concluding with the loss attributable to owners of the parent and cash EBITDA [Sales Revenue Analysis](index=22&type=section&id=%E9%94%80%E5%94%AE%E6%94%B6%E5%85%A5%E5%88%86%E6%9E%90) During the reporting period, sales revenue decreased year-on-year, primarily due to the continuous decline in average raw milk selling prices, but increased sales volume through improved yield contributed to the company's cash flow Sales Revenue Data | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | Sales Volume (tonnes) | 372,973 | 350,848 | | Average Selling Price (RMB/tonne) | 3,872 | 4,249 | | Sales Revenue (RMB thousands) | 1,444,274 | 1,490,702 | - Average raw milk selling price decreased by **8.9%** year-on-year[42](index=42&type=chunk) - Annual milk yield per mature cow increased to **12.27 tonnes**, a year-on-year increase of **1.7%**, achieving growth in both raw milk production and sales volume[42](index=42&type=chunk) [Cost of Sales and Gross Profit](index=24&type=section&id=%E9%94%80%E5%94%AE%E6%88%90%E6%9C%AC%E4%B8%8E%E6%AF%9B%E5%88%A9) Benefiting from declining feed and forage prices and lean operations, cost of sales per kg of milk decreased by 7.4% year-on-year, but gross profit margin decreased by 1.2 percentage points as the decline in milk prices outpaced the cost reduction - Feed cost per kg of milk decreased by **RMB 0.18/kg** year-on-year[43](index=43&type=chunk) - Cost of sales per kg of milk decreased to **RMB 2.89/kg** (first half of 2024: RMB 3.12/kg), a year-on-year decrease of **7.4%**[43](index=43&type=chunk) - Raw milk gross profit margin recorded **25.3%** (first half of 2024: 26.5%), a year-on-year decrease of **1.2 percentage points**[43](index=43&type=chunk)[45](index=45&type=chunk) [Loss from Changes in Fair Value of Biological Assets Less Costs to Sell](index=24&type=section&id=%E7%94%9F%E7%89%A9%E8%B5%84%E4%BA%A7%E5%85%AC%E5%B9%B3%E5%80%BC%E5%8F%98%E5%8A%A8%E5%87%8F%E9%94%80%E5%94%AE%E8%B4%B9%E7%94%A8%E4%BA%A7%E7%94%9F%E4%BA%A7%E7%9A%84%E4%BA%8F%E6%8D%9F) During the reporting period, loss from changes in fair value of biological assets less costs to sell was RMB 471.3 million, largely consistent with the prior period, primarily influenced by the actual characteristics and market prices of dairy cows and their culling for sale - Loss from changes in fair value of biological assets less costs to sell was **RMB 471.3 million** (first half of 2024: RMB 451.0 million), largely consistent with the prior period[46](index=46&type=chunk) - The loss primarily refers to changes in the fair value of dairy cows due to their actual characteristics, market prices, and changes in discounted future cash flows from these cows[44](index=44&type=chunk) [Other Income and Gains](index=25&type=section&id=%E5%85%B6%E4%BB%96%E6%94%B6%E5%85%A5%E5%8F%8A%E6%94%B6%E7%9B%8A) Other income and gains significantly increased by 233.7% during the reporting period, primarily due to the receipt of government subsidies and the reversal of prior year litigation provisions - Other income and gains recorded **RMB 166.5 million** (first half of 2024: RMB 49.9 million), a year-on-year increase of **233.7%**[47](index=47&type=chunk) - Primarily due to the full receipt of government subsidies for projects such as **dairy cow breeding and smart farm construction** in the first half[47](index=47&type=chunk) - Reversal of prior year litigation provisions of **RMB 45.6 million**[47](index=47&type=chunk) [Beef Cattle Farming Business](index=25&type=section&id=%E8%82%B2%E8%82%A5%E7%89%9B%E5%85%BB%E6%AE%96%E4%B8%9A%E5%8A%A1) Beef cattle farming business revenue significantly increased by 617.0% year-on-year, achieving net profit, primarily due to focusing on the high-end beef market segment and upgrading the herd structure Beef Cattle Farming Business Performance | Indicator | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Sales Volume (head) | 15,010 | 2,492 | | Beef Cattle Farming Business Revenue | 145,461 | 20,288 | | Beef Cattle Farming Business Costs | (142,518) | (35,770) | | Gross Profit | 2,943 | (15,482) | - Beef cattle farming business revenue increased by **617.0%** year-on-year, with a net profit of **RMB 2.9 million** (first half of 2024: loss of RMB 15.5 million)[49](index=49&type=chunk) - The company focused on the **high-end beef market segment**, comprehensively upgrading its beef cattle herd structure by introducing high-end core breeds such as **Wagyu and Angus**[49](index=49&type=chunk) [Selling and Distribution Expenses](index=26&type=section&id=%E9%94%80%E5%94%AE%E5%8F%8A%E5%88%86%E9%94%80%E5%BC%80%E6%94%AF) Selling and distribution expenses decreased by 6.5% year-on-year during the reporting period, reflecting the company's improved operational efficiency and effective cost control - Total selling and distribution expenses decreased from **RMB 27.9 million** in the prior period to **RMB 26.1 million** in the reporting period, a decrease of **6.5%**[50](index=50&type=chunk) [Administrative Expenses](index=26&type=section&id=%E8%A1%8C%E6%94%BF%E5%BC%80%E6%94%AF) Administrative expenses decreased by 11.0% year-on-year, and their proportion to sales revenue decreased by 0.3 percentage points, reflecting the company's effective reduction of administrative costs through streamlining organizational structure and strict budget control - Administrative expenses were **RMB 55.8 million** (first half of 2024: RMB 62.7 million), a year-on-year decrease of **11.0%**[51](index=51&type=chunk) - The ratio of administrative expenses to sales revenue decreased from **4.2%** in the prior period to **3.9%** in the current period, a decrease of **0.3 percentage points**[51](index=51&type=chunk) [Other Expenses](index=27&type=section&id=%E5%85%B6%E4%BB%96%E5%BC%80%E6%94%AF) Other expenses significantly decreased by 92.0% year-on-year, primarily due to reduced spray-dried milk volume and a decrease in impairment provision for milk powder inventory - Other expenses were **RMB 2.1 million** (first half of 2024: RMB 26.0 million), a year-on-year decrease of **92.0%**[52](index=52&type=chunk) - Impairment provision for milk powder inventory decreased by **RMB 19.7 million** compared to the prior period[52](index=52&type=chunk) [Finance Costs](index=27&type=section&id=%E8%9E%8D%E8%B5%84%E6%88%90%E6%9C%AC) Finance costs decreased by 17.5% year-on-year, mainly due to increased financial support from the state for the dairy product industry chain, leading to higher recognized interest subsidies - Finance costs were **RMB 19.4 million** (first half of 2024: RMB 23.5 million), a year-on-year decrease of **17.5%**[53](index=53&type=chunk) - Recognized interest subsidies increased year-on-year, benefiting from **national financial support for the dairy product industry chain**[53](index=53&type=chunk) [Share of (Loss) / Profit of Associates](index=27&type=section&id=%E5%88%86%E4%BD%94%E8%81%AF%E7%87%9F%E5%85%AC%E5%8F%B8%EF%BC%88%E8%99%A7%E6%90%8D%EF%BC%89%E2%88%95%E6%BA%A2%E5%88%A9) During the reporting period, the company's share of loss from associates was RMB 1.9 million, compared to a profit of RMB 1.3 million in the prior period, turning from profit to loss - Share of loss from associates was **RMB 1.9 million** (first half of 2024: profit of RMB 1.3 million)[55](index=55&type=chunk) - Associates include Mengniu Shengmu Gaoke Dairy Products, Fuyou United Shengmu Dairy Products, Inner Mongolia Shengmu Low-Temperature Dairy Products, Inner Mongolia Yiyingmei Dairy Industry, Mudanjiang Liangyuan Technology Co., Ltd., and Bayannur Muyiyuan Biotechnology Co., Ltd[54](index=54&type=chunk) [Income Tax Expense](index=28&type=section&id=%E6%89%80%E5%BE%97%E7%A8%8E%E9%96%8B%E6%94%AF_%E8%B4%A2%E5%8A%A1%E5%9B%9E%E9%A1%B5) The Group's income tax expense was RMB 214.9 thousands, primarily from domestic operations in China, with agricultural activities enjoying corporate income tax exemption - During the reporting period, the Group's income tax expense was **RMB 214.9 thousands** (first half of 2024: RMB 4.0 thousands)[56](index=56&type=chunk) - The Group's income from **dairy farming and primary agricultural product processing** and other agricultural activities is exempt from corporate income tax[56](index=56&type=chunk) [Loss Attributable to Owners of the Parent and Profit / (Loss) Attributable to Non-controlling Interests](index=28&type=section&id=%E6%AF%8D%E5%85%AC%E5%8F%B8%E6%93%81%E6%9C%89%E4%BA%BA%E6%87%89%E4%BD%94%E8%99%A7%E6%90%8D%E5%8F%8A%E9%9D%9E%E6%8E%A7%E8%82%A1%E6%AC%8A%E7%9B%8A%E6%87%89%E4%BD%94%E6%BA%A2%E5%88%A9%E2%88%95%EF%BC%88%E8%99%A7%E6%90%8D%EF%BC%89) Loss attributable to owners of the parent significantly narrowed by 66.4% year-on-year, cash EBITDA grew substantially by 19.7%, and non-controlling interests turned from loss to profit - Loss attributable to owners of the parent was **RMB 48.3 million** (first half of 2024: RMB 143.7 million), a year-on-year reduction in loss of **RMB 95.4 million**[57](index=57&type=chunk) - Cash EBITDA was **RMB 484.4 million** (first half of 2024: RMB 404.7 million), a year-on-year increase of **19.7%**[57](index=57&type=chunk) - Profit attributable to non-controlling interests was **RMB 2.7 million** (first half of 2024: loss of RMB 1.8 million)[57](index=57&type=chunk) [Liquidity, Financial Resources and Capital Structure](index=28&type=section&id=%E6%B5%81%E5%8A%A8%E6%80%A7%E3%80%81%E8%B4%A2%E5%8A%A1%E8%B5%84%E6%BA%90%E5%8F%8A%E8%B5%84%E6%9C%AC%E7%BB%93%E6%9E%84) This section details the Group's liquidity, financial resources, and capital structure, including bank borrowings, equity, asset pledges, capital commitments, and risk exposures [Liquidity and Financial Resources](index=28&type=section&id=%E6%B5%81%E5%8A%A8%E6%80%A7%E5%8F%8A%E8%B4%A2%E5%8A%A1%E8%B5%84%E6%BA%90) The Group's working capital primarily comes from internal cash flows and bank credit lines, maintaining a credit scale of tens of billions with a utilization rate below 30%, and the Board believes the company has sufficient financial assets to settle debts - The Group's credit scale consistently maintains a **ten-billion RMB quota**, with a utilization rate stable at **below 30%**[58](index=58&type=chunk) - The Board believes that the Group has **sufficient financial assets** to settle its debts and fund its daily operations and contracted capital expenditures[58](index=58&type=chunk) [Interest-Bearing Bank Borrowings](index=29&type=section&id=%E8%AE%A1%E6%81%AF%E9%93%B6%E8%A1%8C%E5%80%9F%E6%AC%BE) As of the end of the reporting period, total interest-bearing bank borrowings were largely consistent with the end of the prior year, but borrowings repayable within one year significantly increased, while net borrowings remained stable Interest-Bearing Bank Borrowings | Indicator | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Total Interest-Bearing Bank Borrowings | 2,257.0 | 2,274.3 | | Interest-Bearing Bank Borrowings Repayable Within One Year | 1,451.1 | 666.6 | | Net Borrowings | 1,206.9 | 1,209.0 | - The annual interest rate for interest-bearing liabilities ranged from **0.90% to 3.20%** (December 31, 2024: 0.82% to 3.20%)[59](index=59&type=chunk) [Capital Structure](index=30&type=section&id=%E8%B5%84%E6%9C%AC%E7%BB%93%E6%9E%84) As of the end of the reporting period, the Group's total equity slightly decreased, and the financial leverage ratio was largely consistent with the end of the prior year, indicating a stable capital structure Key Capital Structure Data | Indicator | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Total Equity | 4,131.7 | 4,175.8 | | Current Assets | 2,215.3 | 2,121.3 | | Non-current Assets | 5,812.1 | 6,342.9 | | Current Liabilities | 3,055.6 | 2,639.1 | | Non-current Liabilities | 840.1 | 1,649.3 | | Financial Leverage Ratio | 55.7% | 55.9% | [Pledge of Assets](index=30&type=section&id=%E8%B5%84%E4%BA%A7%E6%8A%B5%E6%8A%BC) As of the end of the reporting period, restricted bank deposits totaled RMB 105.0 million, with a portion frozen due to litigation - Restricted bank deposits totaled **RMB 105.0 million** (December 31, 2024: RMB 129.0 million)[61](index=61&type=chunk) - Of this, **RMB 85.7 million** was frozen due to litigation[61](index=61&type=chunk) [Capital Commitments](index=30&type=section&id=%E8%B5%84%E6%9C%AC%E6%89%BF%E6%8B%85) As of the end of the reporting period, the Group's capital commitments for renovation and upgrading of property, plant, and equipment amounted to RMB 8.3 million, an increase from the end of the prior year - Capital commitments for renovation and upgrading of property, plant, and equipment amounted to **RMB 8.3 million** (December 31, 2024: RMB 5.2 million)[62](index=62&type=chunk) [Contingent Liabilities](index=30&type=section&id=%E6%88%96%E6%9C%89%E8%B4%9F%E5%80%BA) As of the end of the reporting period, the Group provided guarantees for bank borrowings of Bayannur Shengmu Gaoke Ecological Grass Industry Co., Ltd., with the guaranteed amount increasing - The Group provided guarantees for bank borrowings of **RMB 150.0 million** (December 31, 2024: RMB 70.0 million) for Bayannur Shengmu Gaoke Ecological Grass Industry Co., Ltd[63](index=63&type=chunk) [Foreign Exchange Risk](index=31&type=section&id=%E5%A4%96%E6%B1%87%E9%A3%8E%E9%99%A9) The Group's operations are primarily located in mainland China, with most transactions conducted in RMB, thus posing no significant foreign exchange risk in its operations - The Group's operations are primarily located in **mainland China**, with most transactions conducted in **RMB**[64](index=64&type=chunk) - Apart from a small amount of Hong Kong Dollar and US Dollar cash, the Group has **no significant foreign exchange risk** in its operations[64](index=64&type=chunk) [Credit Risk](index=31&type=section&id=%E4%BF%A1%E8%B4%B7%E9%A3%8E%E9%99%A9) The Group only transacts with reputable third parties and conducts credit reviews, so credit risk primarily arises from counterparty default, but collateral is generally not required - The Group only transacts with **recognized and reputable third parties** and conducts credit reviews[65](index=65&type=chunk) - The maximum risk faced is equal to the **carrying amount of the financial instruments**, and generally **no collateral** is required from third parties[65](index=65&type=chunk) [Other Information](index=31&type=section&id=%E5%85%B6%E4%BB%96%E4%BF%A1%E6%81%AF) This section covers the company's environmental policies, significant acquisitions and disposals, and future major investment plans [Environmental Policies and Performance](index=31&type=section&id=%E7%8E%AF%E5%A2%83%E6%94%BF%E7%AD%96%E5%8F%8A%E8%A1%A8%E7%8E%B0) During the reporting period, the Group's operations complied in all material respects with currently applicable national and local environmental protection laws and regulations in China - The Group's operations complied in all material respects with **currently applicable national and local government environmental protection laws and regulations in China**[66](index=66&type=chunk) [Significant Acquisitions and Disposals](index=31&type=section&id=%E9%87%8D%E5%A4%A7%E6%94%B6%E8%B4%AD%E5%8F%8A%E5%87%BA%E5%94%AE%E4%BA%8B%E9%A1%B9) Except as disclosed in this announcement, the Group did not undertake any significant acquisitions or disposals during the reporting period - Except as disclosed in this announcement, neither the Company nor any of its subsidiaries undertook any **significant acquisitions or disposals** during the reporting period[67](index=67&type=chunk) [Future Major Investment Plans](index=31&type=section&id=%E6%9C%AA%E6%9D%A5%E9%87%8D%E5%A4%A7%E6%8A%95%E8%B5%84%E8%AE%A1%E5%88%92) As of the date of this announcement, the Group has no plans for any major investments or acquisitions of capital assets, other than the capital commitments disclosed and future plans in the prospectus - As of the date of this announcement, the Group has **no plans for any major investments or acquisitions of capital assets**, other than those disclosed under "Capital Commitments" above and in the "Future Plans and Use of Proceeds" section of the prospectus[68](index=68&type=chunk) [Events After Reporting Period](index=32&type=section&id=%E6%8A%A5%E5%91%8A%E6%9C%9F%E5%90%8E%E4%BA%8B%E4%BB%B6) Subsequent to the reporting period, the company received a final judgment from the Inner Mongolia Autonomous Region Higher People's Court, significantly reducing the plaintiff's awarded compensation, and the company has adjusted its provision for litigation and claims accordingly - On July 28, 2025, the Board received the final judgment from the appellate court, which **significantly reduced the plaintiff's awarded compensation**[69](index=69&type=chunk) - The Group adjusted its provision for litigation and claims from **RMB 85.0 million** in prior years to **RMB 39.4 million**, with this adjustment made as of June 30, 2025[69](index=69&type=chunk) [Future Outlook](index=32&type=section&id=%E6%9C%AA%E6%9D%A5%E5%B1%95%E6%9C%9B) Supported by national policies, the dairy farming industry is expected to overcome difficulties; the Group will steadfastly implement its "quality improvement, cost control, stable supply chain, and market expansion" strategy, ensure high-end raw milk supply, develop integrated dairy-beef operations, and accelerate breeding, environmental protection, and smart farm construction for sustainable growth - National "No. 1 Document" and Ministry of Agriculture and Rural Affairs policies clearly support the stable development of the livestock industry and promote relief for the dairy and beef cattle industries[70](index=70&type=chunk) - The Group will implement the **"quality improvement, cost control, stable supply chain, and market expansion"** operating strategy, focusing on ensuring raw milk quality, enhancing cost efficiency, and upgrading green production[72](index=72&type=chunk) - As the largest organic raw milk supplier to Mengniu Group, the primary task will be to ensure high-quality supply for the growth of **Mengniu Telunsu Desert Organic business**[72](index=72&type=chunk) - Actively promote integrated dairy-beef operations, establishing a dynamic operating mechanism of **"stabilizing production with dairy, increasing efficiency with beef,"** and strengthening vertical synergy and brand premium capabilities across the industry chain[72](index=72&type=chunk) - Accelerate the construction of national core breeding farms, water resource assurance, environmental facility upgrades, and smart farm management systems[72](index=72&type=chunk) [Corporate Governance](index=33&type=section&id=%E4%BC%81%E4%B8%9A%E7%AE%A1%E6%B2%BB) This section outlines the company's commitment to high-level corporate governance, adherence to the Listing Rules' Corporate Governance Code, standards for directors' securities transactions, and the role of the Audit Committee [Corporate Governance Practices](index=33&type=section&id=%E4%BC%81%E4%B8%9A%E7%AE%A1%E6%B2%BB%E5%B8%B8%E8%A7%84) The company is committed to achieving and maintaining a high level of corporate governance, having adopted, applied, and complied with the provisions of the Corporate Governance Code set out in Appendix C1 of the HKEX Listing Rules during the reporting period - The company ensures that it and its subsidiaries achieve and maintain a **high level of corporate governance**[73](index=73&type=chunk) - During the reporting period, the company adopted, applied, and complied with the code provisions set out in the **Corporate Governance Code** in Appendix C1 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited[73](index=73&type=chunk) [Standard Code for Securities Transactions by Directors](index=34&type=section&id=%E8%91%A3%E4%BA%8B%E8%BF%9B%E8%A1%8C%E8%AF%81%E5%88%B8%E4%BA%A4%E6%98%93%E4%B9%8B%E6%A0%87%E5%87%86%E5%AE%88%E5%88%99) The company has adopted a code of conduct for securities transactions no less stringent than the Model Code in Appendix C3 of the Listing Rules, and all directors confirmed compliance with this code during the reporting period - The company has adopted a code of conduct for securities transactions that is **no less stringent than the Model Code** set out in Appendix C3 of the Listing Rules[74](index=74&type=chunk) - All directors confirmed their compliance with the required standards set out in the Model Code throughout the period[74](index=74&type=chunk) [Purchase, Redemption or Sale of the Company's Listed Securities](index=34&type=section&id=%E8%B4%AD%E4%B9%B0%E3%80%81%E8%B5%8E%E5%9B%9E%E6%88%96%E5%87%BA%E5%94%AE%E6%9C%AC%E5%85%AC%E5%8F%B8%E7%9A%84%E4%B8%8A%E5%B8%82%E8%AF%81%E5%88%B8) Except as disclosed in this announcement, neither the company nor any of its subsidiaries purchased, redeemed, or sold any of the company's listed securities during the reporting period - Except as disclosed in this announcement, neither the Company nor any of its subsidiaries purchased, redeemed, or sold any of the Company's **listed securities** during the reporting period[75](index=75&type=chunk) [Audit Committee](index=35&type=section&id=%E5%AE%A1%E6%A0%B8%E5%A7%94%E5%91%98%E4%BC%9A) The Audit Committee, comprising two independent non-executive directors and one non-executive director, chaired by Mr. Wang Liyan, is responsible for reviewing accounting principles, risk management, internal controls, and financial reporting matters - The Audit Committee comprises **Mr. Wang Liyan (Chairman)**, **Mr. Wu Liang (Independent Non-executive Director)**, and **Mr. Zhang Ping (Non-executive Director)**[76](index=76&type=chunk) - The Audit Committee reviews the **accounting principles and practices** adopted by the company and discusses **audit, risk management, internal controls and systems, and financial reporting matters**[76](index=76&type=chunk) [Scope of Work of Ernst & Young](index=35&type=section&id=%E5%AE%89%E6%B0%B8%E4%BC%9A%E8%AE%A1%E5%B8%88%E4%BA%8B%E5%8A%A1%E6%89%80%E7%9A%84%E5%B7%A5%E4%BD%9C%E8%8C%83%E5%9B%B4) The financial information in the Group's interim results announcement has been agreed upon by its auditor, Ernst & Young, but their work does not constitute an assurance service, thus no assurance is expressed on the results announcement - The financial information for the Group's results announcement for the six months ended June 30, 2025, has been **agreed upon by the Group's auditor, Ernst & Young**[77](index=77&type=chunk) - The work performed by Ernst & Young in this regard does not constitute an assurance service, and therefore **no assurance is expressed on the results announcement**[77](index=77&type=chunk) [Appendix](index=36&type=section&id=%E9%99%84%E5%BD%95) This section includes information on interim dividends, publication of interim results and report, acknowledgements, and the composition of the Board of Directors [Interim Dividend](index=36&type=section&id=%E4%B8%AD%E6%9C%9F%E8%82%A1%E6%81%AF_%E9%99%84%E5%BD%95) The Board does not recommend an interim dividend for the six months ended June 30, 2025, consistent with the prior period - The Board of Directors does not recommend an interim dividend for the six months ended June 30, 2025 (six months ended June 30, 2024: nil)[78](index=78&type=chunk) [Publication of Interim Results Announcement and Interim Report](index=36&type=section&id=%E5%88%8A%E5%8F%91%E4%B8%AD%E6%9C%9F%E4%B8%9A%E7%BB%A9%E5%85%AC%E5%91%8A%E5%8F%8A%E4%B8%AD%E6%9C%9F%E6%8A%A5%E5%91%8A) This interim results announcement will be published on the HKEX and company websites, and the interim report, containing all information required by the Listing Rules, will be dispatched to shareholders and published later - This interim results announcement will be published on the **HKEX website (www.hkexnews.hk)** and the **Company's website (www.shengmuorganicmilk.com)**[79](index=79&type=chunk) - The Company's interim report for the six months ended June 30, 2025, containing all information required by the Listing Rules, will be **dispatched to shareholders and published on the aforementioned websites at a later date**[79](index=79&type=chunk) [Acknowledgements](index=36&type=section&id=%E8%87%B4%E8%B0%A2) The Board extends its sincere gratitude to all shareholders for their continuous support and expresses heartfelt appreciation to all employees for their diligent efforts and loyal dedication - The Board sincerely thanks all shareholders for their **continuous support** and expresses heartfelt appreciation to all employees for their **diligent efforts and loyal dedication**[80](index=80&type=chunk) [Board of Directors](index=36&type=section&id=%E8%91%A3%E4%BA%8B%E4%BC%9A%E6%88%90%E5%91%98) As of the date of this announcement, the Board comprises executive, non-executive, and independent non-executive directors, with Mr. Chen Yiyi serving as the Chairman of the Board - Executive Director: **Mr. Zhang Jiawang**[82](index=82&type=chunk) - Non-executive Directors: **Mr. Chen Yiyi (Chairman)**, **Mr. Zhang Ping**, **Mr. Zhao Jiejun**, **Mr. Sun Qian**, and **Ms. Shao Lijun**[82](index=82&type=chunk) - Independent Non-executive Directors: **Mr. Wang Liyan**, **Mr. Wu Liang**, and **Mr. Sun Yansheng**[82](index=82&type=chunk)

General Information [General Information](index=2&type=section&id=1.1%20General%20Information) Shandong International Trust Co., Ltd. (Shandong Trust) is a company registered in the PRC, listed on HKEX with stock code 1697, and its legal representative is Yue Zengguang - The company's official Chinese name is Shandong International Trust Co., Ltd., abbreviated as Shandong Trust[4](index=4&type=chunk) - H shares are listed on The Stock Exchange of Hong Kong Limited, stock code 1697[4](index=4&type=chunk) - The legal representative is Yue Zengguang[4](index=4&type=chunk) [Contact Person and Information](index=2&type=section&id=1.2%20Contact%20Person%20and%20Information) The company's Board Secretary and Company Secretary is He Chuangye, with its registered office in Jinan, Shandong Province, and a principal place of business in Hong Kong - The Board Secretary and Company Secretary is He Chuangye[4](index=4&type=chunk) - The registered office is located at Tower A, No. 2788 Aoti West Road, Lixia District, Jinan, Shandong Province, China[4](index=4&type=chunk) - Email is ir1697@luxin.cn, and the international internet address is http://www.sitic.com.cn[4](index=4&type=chunk) Summary of Unaudited Interim Condensed Consolidated Financial Statements [Summary of Unaudited Interim Condensed Consolidated Income Statement](index=3&type=section&id=2.1%20Summary%20of%20Unaudited%20Interim%20Condensed%20Consolidated%20Income%20Statement) For the six months ended June 30, 2025, the company's total operating income was RMB 633,861 thousand, net profit was RMB 167,419 thousand, and total comprehensive income was RMB 110,717 thousand Interim Condensed Consolidated Income Statement Summary (RMB thousand yuan) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Total Operating Income | 633,861 | 587,752 | | Total Operating Costs | 358,508 | 295,780 | | Operating Profit | 275,353 | 291,972 | | Total Profit | 230,402 | 253,327 | | Income Tax Expense | 62,983 | 82,819 | | Net Profit | 167,419 | 170,508 | | Total Comprehensive Income | 110,717 | 167,769 | [Summary of Unaudited Interim Condensed Consolidated Balance Sheet](index=4&type=section&id=2.2%20Summary%20of%20Unaudited%20Interim%20Condensed%20Consolidated%20Balance%20Sheet) As of June 30, 2025, the company's total assets were RMB 14,084,394 thousand, total liabilities were RMB 2,736,951 thousand, and total shareholders' equity was RMB 11,347,443 thousand Interim Condensed Consolidated Balance Sheet Summary (RMB thousand yuan) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Assets | 14,084,394 | 14,279,338 | | Total Liabilities | 2,736,951 | 3,042,612 | | Total Shareholders' Equity | 11,347,443 | 11,236,726 | | Total Liabilities and Shareholders' Equity | 14,084,394 | 14,279,338 | [Summary of Unaudited Interim Condensed Consolidated Cash Flow Statement](index=4&type=section&id=2.3%20Summary%20of%20Unaudited%20Interim%20Condensed%20Consolidated%20Cash%20Flow%20Statement) For the six months ended June 30, 2025, net cash flow from operating activities was RMB 34,134 thousand, from investing activities was RMB 28,151 thousand, and from financing activities was RMB -194,613 thousand Interim Condensed Consolidated Cash Flow Statement Summary (RMB thousand yuan) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | 34,134 | 576,953 | | Net Cash Flow from Investing Activities | 28,151 | 189,906 | | Net Cash Flow from Financing Activities | -194,613 | -469,526 | | Net Increase in Cash and Cash Equivalents | -132,328 | 297,333 | | Cash and Cash Equivalents at End of Period | 344,340 | 466,230 | Management Discussion and Analysis [Environmental Review](index=5&type=section&id=3.1%20Environmental%20Review) In H1 2025, global economic growth slowed due to regional conflicts and trade protectionism, while China's economy maintained stable growth with optimized structure and resilience, with GDP growing 5.3% and domestic demand contributing 68.8% - In H1 2025, the global economic recovery process was significantly slowed by uncertainties such as regional conflicts and trade protectionism[7](index=7&type=chunk) - China's economy grew by **5.3% year-on-year** in H1, with domestic demand contributing **68.8%** to GDP growth, becoming the main driver of economic growth[7](index=7&type=chunk) - Under the guidance of new regulatory frameworks, China's trust industry accelerated its transformation, with trust asset scale continuously growing, approaching **RMB 30 trillion** by the end of 2024, and asset service trusts rapidly increasing their proportion[9](index=9&type=chunk) [Business Review](index=6&type=section&id=3.2%20Business%20Review) In H1 2025, Shandong Trust focused on its core business, with family trust AUM reaching RMB 61.927 billion, a 19.3% year-on-year increase, actively expanding capital market business and supporting technology and green industries - In H1 2025, Shandong Trust focused on its core business, with family trust AUM reaching **RMB 61.927 billion**, a **19.3% increase** from the beginning of the year[10](index=10&type=chunk) - The company was approved to open CFETS interbank deposit business and successfully launched its first transaction, enriching its business product lines[11](index=11&type=chunk) - As of the end of June 2025, the company's green trust AUM was **RMB 4.229 billion**, a **22.4% year-on-year increase**[12](index=12&type=chunk) Segment Revenue Contribution (RMB thousand yuan) | Business Type | 2025 Amount | 2025 Share | 2024 Amount | 2024 Share | | :--- | :--- | :--- | :--- | :--- | | Trust Business Operating Income | 227,821 | 35.9% | 270,866 | 46.0% | | Proprietary Business Operating Income | 406,040 | 64.1% | 316,886 | 53.9% | | Total | 633,911 | 100.0% | 588,214 | 100.0% | [Trust Classification](index=10&type=section&id=Trust%20Classification) The company classifies trusts into administrative trusts and active management trusts based on roles and responsibilities, with active management trusts further divided into financing and investment trusts; total AUM was RMB 207,822 million as of June 30, 2025 - The company classifies trusts into administrative trusts and active management trusts, with active management trusts further subdivided into financing trusts and investment trusts[18](index=18&type=chunk) Asset Under Management by Trust Type (RMB million yuan) | Trust Type | Number as of June 30, 2025 | AUM as of June 30, 2025 | Number as of December 31, 2024 | AUM as of December 31, 2024 | | :--- | :--- | :--- | :--- | :--- | | Financing Trusts | 214 | 35,562 | 227 | 39,276 | | Investment Trusts | 1,881 | 94,906 | 1,838 | 126,961 | | Administrative Trusts | 1,088 | 44,201 | 847 | 47,586 | | Total | 3,183 | 174,669 | 2,912 | 213,823 | - As of June 30, 2025, the company's AUM (including insurance trust AUM) was **RMB 207,822 million**, a decrease from **RMB 240,173 million** as of December 31, 2024[19](index=19&type=chunk) Revenue Contribution by Trust Type (RMB million yuan) | Trust Type | 2025 Revenue | 2025 Share (%) | 2024 Revenue | 2024 Share (%) | | :--- | :--- | :--- | :--- | :--- | | Financing Trusts | 118 | 51.8 | 151 | 55.3 | | Investment Trusts | 65 | 28.5 | 77 | 28.2 | | Administrative Trusts | 45 | 19.7 | 45 | 16.5 | | Total | 228 | 100.0 | 273 | 100.0 | [Trust Business Segmentation](index=12&type=section&id=Trust%20Business%20Segmentation) The company's trust business is segmented into asset service trusts, asset management trusts, and charitable trusts, with asset service trusts having an AUM of approximately RMB 62 billion and asset management trusts focusing on capital markets and real estate - The company's trust business can be further divided into asset service trusts, asset management trusts, and charitable trusts[22](index=22&type=chunk) [Asset Service Trusts](index=12&type=section&id=Asset%20Service%20Trusts) Asset service trusts provide wealth planning, inheritance, custody, and risk isolation services, with family trusts and similar businesses accumulating approximately 5,800 cases and an AUM of RMB 62 billion as of June 30, 2025 - Asset service trusts aim to provide professional trust services such as wealth planning, intergenerational inheritance, custody, bankruptcy isolation, and risk disposal for settlors[22](index=22&type=chunk) - As of June 30, 2025, the company had cumulatively established approximately **5,800 family trusts, household service trusts, insurance trusts, and other businesses**, with an AUM of approximately **RMB 62 billion**[25](index=25&type=chunk) - The company managed **130 corporate and non-corporate wealth management trusts**, with trust assets totaling approximately **RMB 24.393 billion**[26](index=26&type=chunk) - As of June 30, 2025, the company had **four asset-backed securities projects** with an outstanding scale of **RMB 1.844 billion**[28](index=28&type=chunk) [Asset Management Trusts](index=16&type=section&id=Asset%20Management%20Trusts) Asset management trusts are private asset management businesses primarily investing in capital markets, real estate, industrial and commercial enterprises, and infrastructure, with securities investment trust AUM reaching RMB 72.81 billion - Asset management trusts are private asset management businesses, primarily investing in capital markets, real estate, industrial and commercial enterprises, and infrastructure[31](index=31&type=chunk) - As of June 30, 2025, the company's outstanding securities investment trust business AUM was **RMB 72.81 billion**, and the total capital market trust business AUM was **RMB 78.434 billion**[34](index=34&type=chunk) - Real estate trust business AUM decreased due to the real estate market conditions, with future support for long-term rental housing and affordable housing construction[35](index=35&type=chunk) - Industrial and commercial enterprise trusts and infrastructure trusts actively responded to national calls, increasing support for the real economy, technological innovation, and green development[37](index=37&type=chunk)[38](index=38&type=chunk) [Charitable Trusts](index=19&type=section&id=Charitable%20Trusts) Charitable trusts aim to conduct poverty alleviation, disaster relief, and education support activities for public benefit, with 69 trusts established and a cumulative delivery scale of approximately RMB 190 million as of June 30, 2025 - Charitable trusts aim to conduct poverty alleviation, disaster relief, education support, and natural disaster relief activities for public benefit[39](index=39&type=chunk)[40](index=40&type=chunk) - As of June 30, 2025, the company had cumulatively established **69 charitable trusts**, with a cumulative delivery scale of approximately **RMB 190 million**, cumulative trust funds utilized of approximately **RMB 38 million**, and direct beneficiaries totaling nearly **14,000 people**[40](index=40&type=chunk) - The company continuously innovated in the charitable trust sector, launching the first dual-trustee model charitable trust in Shandong Province, the first charitable trust with a foreign settlor in the trust industry, and a listed company DAF model charitable trust[41](index=41&type=chunk) [Proprietary Business Review](index=21&type=section&id=Proprietary%20Business%20Review) In H1 2025, the company's proprietary business segment revenue increased by 28.0% to RMB 406.1 million, driven by higher fair value changes and investment income, with asset allocation focusing on safety, liquidity, and diversification - In H1 2025, the company's proprietary business segment revenue was **RMB 406.1 million**, a **28.0% year-on-year increase**[43](index=43&type=chunk) - The increase in proprietary business revenue was mainly due to the increase in fair value change gains from **RMB 241.8 million** in H1 2024 to **RMB 319.3 million** in H1 2025, and investment income from **RMB 42.1 million** to **RMB 84.0 million**[43](index=43&type=chunk) - The company's proprietary asset allocation strategy adheres to a combination of long, medium, and short-term approaches, prudently utilizing its own funds for investment, optimizing asset structure, and actively disposing of inefficient assets[43](index=43&type=chunk) [Proprietary Asset Allocation](index=21&type=section&id=Proprietary%20Asset%20Allocation) Proprietary asset allocation includes monetary asset investments, securities investments, long-term equity investments, proprietary fund loans, and the trust industry guarantee fund, with monetary asset investment balances increasing and certain securities investment balances shifting Proprietary Asset Allocation (RMB thousand yuan) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Monetary Asset Investments | 1,458,822 | 921,998 | | Securities Investments | 9,475,332 | 9,737,676 | | Long-term Equity Investments | 849,259 | 1,259,477 | | Proprietary Fund Loans | 77,331 | 70,188 | | Trust Industry Guarantee Fund | 115,498 | 113,962 | | Total | 11,976,242 | 12,103,301 | Monetary Asset Investments and Interest Income (RMB thousand yuan) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Monetary Asset Investments | 1,458,822 | 921,998 | | Total Interest Income (H1) | 4,776 | 2,779 | | Average Investment Return (Annualized) | 0.8% | 0.8% | - In H1 2025, the average investment balance of equity products increased by **2.1%** to **RMB 2,271.5 million**, and the average investment balance of trust plans increased by **8.2%** to **RMB 4,051.5 million**[50](index=50&type=chunk) - The average investment balance of debt investments decreased by **17.3%** to **RMB 2,470.4 million**, and the average investment balance of asset management products decreased by **12.0%** to **RMB 794.5 million**[50](index=50&type=chunk) - As of June 30, 2025, the outstanding balance of proprietary fund loans was **RMB 77.3 million**, an **8.7% increase** from the beginning of the year[54](index=54&type=chunk) - The company's equity in the trust industry guarantee fund increased by **1.3%** to **RMB 115.5 million**[55](index=55&type=chunk) [Financial Review](index=28&type=section&id=3.3%20Financial%20Review) In H1 2025, net profit decreased by 1.8% to RMB 167.4 million, mainly due to reduced net fee and commission income and increased credit impairment losses, partially offset by higher fair value changes and investment income - In H1 2025, the company achieved a net profit of **RMB 167.4 million**, a **1.8% year-on-year decrease**[56](index=56&type=chunk) - The decrease in net profit was mainly due to a year-on-year decrease in net fee and commission income and a year-on-year increase in credit impairment losses, partially offset by a year-on-year increase in fair value change gains and investment income[15](index=15&type=chunk) Operating Performance Summary (RMB thousand yuan) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Total Operating Income | 633,861 | 587,752 | | Total Operating Costs | 358,508 | 295,780 | | Operating Profit | 275,353 | 291,972 | | Total Profit | 230,402 | 253,327 | | Net Profit | 167,419 | 170,508 | [Analysis of Unaudited Interim Condensed Consolidated Income Statement](index=28&type=section&id=3.3.1%20Analysis%20of%20Unaudited%20Interim%20Condensed%20Consolidated%20Income%20Statement) In H1 2025, total operating income grew 7.8%, but net profit declined 1.8%, with negative net interest income, a 16.7% drop in net fee and commission income, and significant increases in investment and fair value change gains [Total Operating Income](index=30&type=section&id=Total%20Operating%20Income) In H1 2025, total operating income increased by 7.8%, with negative net interest income, a 16.7% decrease in net fee and commission income, a 99.3% increase in investment income, and a 32.0% increase in fair value change gains Net Interest Income Details (RMB thousand yuan) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Interest Income | 17,843 | 24,969 | | Interest Expense | 25,678 | 29,519 | | Net Interest Income | -7,835 | -4,550 | - Net fee and commission income decreased by **16.7%** to **RMB 225.6 million**, mainly due to reduced fee and commission income from trust business transformation[61](index=61&type=chunk) - Investment income increased by **99.3%** to **RMB 84.0 million**, mainly due to a year-on-year increase of **RMB 47.4 million** in investment income from financial assets held during the period[63](index=63&type=chunk) - Fair value change gains increased by **32.0%** to **RMB 319.3 million**, mainly due to increased fair value change gains from trading financial assets such as equity investments[65](index=65&type=chunk) [Total Operating Costs](index=33&type=section&id=Total%20Operating%20Costs) In H1 2025, total operating costs increased, with business and management expenses decreasing by 12.2% due to reduced employee compensation, while credit impairment losses significantly rose by 50.8% - Business and management expenses decreased by **12.2%** to **RMB 116.6 million**, mainly due to reduced employee compensation[66](index=66&type=chunk) - Credit impairment losses increased by **50.8%** to **RMB 233.7 million**, mainly due to increased provisions based on actual credit risk and prior provisions[67](index=67&type=chunk) - Non-operating expenses increased to **RMB 45.0 million**, mainly due to increased provisions for compensation, including **RMB 45.0 million** for litigation-related compensation[69](index=69&type=chunk) [Total Profit and Operating Profit Margin](index=35&type=section&id=Total%20Profit%20and%20Operating%20Profit%20Margin) In H1 2025, total profit decreased to RMB 230.4 million, and the operating profit margin declined from 43.1% to 36.3% Total Profit and Operating Profit Margin (RMB thousand yuan) | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | Total Profit | 230,402 | 253,327 | | Operating Profit Margin | 36.3% | 43.1% | [Income Tax Expense](index=35&type=section&id=Income%20Tax%20Expense) In H1 2025, income tax expense was RMB 63.0 million, a decrease from RMB 82.8 million in the prior year, primarily due to lower total profit Income Tax Expense (RMB thousand yuan) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Current Income Tax Expense | 28,957 | 67,234 | | Deferred Income Tax Expense | 34,026 | 15,585 | | Total | 62,983 | 82,819 | - The decrease in income tax expense was mainly due to a year-on-year decrease in the Group's total profit in H1 2025[73](index=73&type=chunk) [Net Profit and Net Profit Margin](index=36&type=section&id=Net%20Profit%20and%20Net%20Profit%20Margin) In H1 2025, net profit decreased to RMB 167.4 million, and the net profit margin declined from 29.0% to 26.4% Net Profit and Net Profit Margin (RMB thousand yuan) | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | Net Profit | 167,419 | 170,508 | | Net Profit Margin | 26.4% | 29.0% | [Segment Operating Results](index=37&type=section&id=Segment%20Operating%20Results) Trust business total profit decreased by 36.8% due to reduced segment revenue, while proprietary business total profit increased by 9.7% due to higher segment revenue, partially offset by increased operating expenses Segment Revenue (RMB thousand yuan) | Business Type | 2025 | 2024 | | :--- | :--- | :--- | | Trust Business Segment Revenue | 227,821 | 270,866 | | Proprietary Business Segment Revenue | 406,090 | 317,348 | Segment Total Profit (RMB thousand yuan) | Business Type | 2025 | 2024 | | :--- | :--- | :--- | | Trust Business | 64,505 | 102,100 | | Proprietary Business | 165,897 | 151,227 | | Total | 230,402 | 253,327 | Segment Profit Margin | Business Type | 2025 | 2024 | | :--- | :--- | :--- | | Trust Business | 28.3% | 37.7% | | Proprietary Business | 40.9% | 47.7% | - Trust business total profit decreased by **36.8%** to **RMB 64.5 million**, mainly due to a **15.9% decrease** in segment revenue[84](index=84&type=chunk) - Proprietary business total profit increased by **9.7%** to **RMB 165.9 million**, mainly due to a **28.0% increase** in segment revenue, partially offset by a **44.6% increase** in operating expenses[87](index=87&type=chunk) [Selected Interim Condensed Consolidated Financial Position](index=41&type=section&id=3.3.2%20Selected%20Interim%20Condensed%20Consolidated%20Financial%20Position) As of June 30, 2025, the Group's total assets were RMB 14,084.4 million, with loans and advances, debt investments, and trading financial assets being significant components; total liabilities were RMB 2,737.0 million, primarily third-party trust beneficiaries' net assets and other liabilities - As of June 30, 2025, the Group's total assets were **RMB 14,084.4 million**, with loans and advances accounting for **14.5%**, debt investments for **31.2%**, and trading financial assets for **26.0%**[91](index=91&type=chunk) - As of June 30, 2025, the Group's total liabilities were **RMB 2,737.0 million**, with other liabilities accounting for **85.3%**[110](index=110&type=chunk) - As of June 30, 2025, the Group had no off-balance sheet guarantees or foreign currency forward contracts[116](index=116&type=chunk) [Loans and Advances](index=42&type=section&id=Loans%20and%20Advances) As of June 30, 2025, net loans and advances were RMB 2,038,788 thousand, primarily from consolidated trust plans, with impaired loans increasing by 12.0% to RMB 2,151.9 million, representing 90.6% of total loans and advances Net Loans and Advances (RMB thousand yuan) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Principal of Loans and Advances | 2,373,854 | 2,420,407 | | Less: Provision for Expected Credit Losses | 423,912 | 399,143 | | Net Loans and Advances | 2,038,788 | 2,159,052 | - Total impaired loans increased by **12.0%** from **RMB 1,922.0 million** as of December 31, 2024, to **RMB 2,151.9 million** as of June 30, 2025[95](index=95&type=chunk) - As of June 30, 2025, total impaired loans accounted for **90.6%** of the Group's total loans and advances[95](index=95&type=chunk) [Investments in Other Equity Instruments](index=45&type=section&id=Investments%20in%20Other%20Equity%20Instruments) The company strategically holds A shares of Guolian Minsheng Securities, designated as financial assets at fair value through other comprehensive income since January 2025, with a balance of RMB 302.9 million - The company holds **31,039,606 A shares of Guolian Minsheng Securities**, designated as financial assets at fair value through other comprehensive income since January 2025[101](index=101&type=chunk) - As of June 30, 2025, the balance of this investment was **RMB 302.9 million**[101](index=101&type=chunk) [Long-term Equity Investments](index=46&type=section&id=Long-term%20Equity%20Investments) As of June 30, 2025, the company's total long-term equity investments were RMB 723,809 thousand, primarily comprising investments in associates accounted for using the equity method and enterprises invested by consolidated structured entities Long-term Equity Investments (RMB thousand yuan) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Associates accounted for using equity method | 407,021 | 403,743 | | Enterprises invested by consolidated structured entities | 316,788 | 319,639 | | Total | 723,809 | 723,382 | [Trading Financial Assets](index=47&type=section&id=Trading%20Financial%20Assets) As of June 30, 2025, trading financial assets decreased by 16.1% to RMB 3,668.2 million, mainly due to reduced investments in public funds, unlisted equity, and asset management plans; the company holds Zhejiang Merchants Bank A shares with a fair value of RMB 1.942 billion Composition of Trading Financial Assets (RMB thousand yuan) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Equity Investments | 1,942,510 | 1,723,067 | | Public Fund Investments | 170,051 | 515,420 | | Asset Management Plan Investments | 770,043 | 917,316 | | Unlisted Equity Investments | 498,694 | 910,100 | | Total | 3,668,185 | 4,372,519 | - Trading financial assets decreased by **16.1%** to **RMB 3,668.2 million**, mainly due to reduced investments in public funds, unlisted equity investments, and asset management plans[106](index=106&type=chunk) - The company holds **572,992,903 A shares of Zhejiang Merchants Bank**, with a fair value of **RMB 1.942 billion** as of June 30, 2025[105](index=105&type=chunk) [Cash and Bank Balances](index=48&type=section&id=Cash%20and%20Bank%20Balances) As of June 30, 2025, the Group's cash and bank balances were RMB 344.3 million, a decrease from RMB 591.7 million as of December 31, 2024 - As of June 30, 2025, the Group's cash and bank balances were **RMB 344.3 million**, a decrease from **RMB 591.7 million** as of December 31, 2024[107](index=107&type=chunk) [Accounts Receivable](index=48&type=section&id=Accounts%20Receivable) As of June 30, 2025, accounts receivable increased by 1.9% to RMB 100.5 million, primarily for accrued trust remuneration; 43.0% of receivable trust remuneration was recovered by July 31, 2025 - Accounts receivable increased by **1.9%** from **RMB 98.7 million** as of December 31, 2024, to **RMB 100.5 million** as of June 30, 2025[108](index=108&type=chunk) - As of July 31, 2025, **43.0%** of the receivable trust remuneration had been recovered[108](index=108&type=chunk) [Financial Assets Held Under Resale Agreements](index=49&type=section&id=Financial%20Assets%20Held%20Under%20Resale%20Agreements) Financial assets held under resale agreements, mainly reverse repurchase agreements on government bonds, increased from RMB 390.0 million to RMB 1,171.7 million, reflecting flexible adjustments based on market conditions and interest rates - Reverse repurchase agreements on government bonds increased from **RMB 390.0 million** as of December 31, 2024, to **RMB 1,171.7 million** as of June 30, 2025[109](index=109&type=chunk) - The change was mainly due to the company's flexible adjustments to the scale of reverse repurchase agreement business based on overall market conditions and interest rates[109](index=109&type=chunk) [Liabilities](index=49&type=section&id=Liabilities) As of June 30, 2025, the Group's total liabilities were RMB 2,737.0 million, a decrease from RMB 3,042.6 million as of December 31, 2024, primarily comprising short-term borrowings, employee benefits payable, provisions, and other liabilities - As of June 30, 2025, the Group's total liabilities were **RMB 2,737.0 million**, a decrease from **RMB 3,042.6 million** as of December 31, 2024[110](index=110&type=chunk) - Major liabilities include short-term borrowings, employee benefits payable, provisions, and other liabilities, with other liabilities accounting for **85.3%** of total liabilities[110](index=110&type=chunk) [Short-term Borrowings](index=49&type=section&id=Short-term%20Borrowings) As of June 30, 2025, short-term borrowings were interest-bearing loans from China Trust Protection Fund Co., Ltd., amounting to RMB 100.1 million, which were repaid in July 2025 - As of June 30, 2025, short-term borrowings were interest-bearing loans from China Trust Protection Fund Co., Ltd., amounting to **RMB 100.1 million**[111](index=111&type=chunk) - This borrowing was repaid in July 2025[111](index=111&type=chunk) [Provisions](index=49&type=section&id=Provisions) As of June 30, 2025, provisions amounted to RMB 96.5 million, primarily for estimated litigation compensation - As of June 30, 2025, provisions amounted to **RMB 96.5 million**, for estimated litigation compensation[112](index=112&type=chunk) [Other Liabilities](index=50&type=section&id=Other%20Liabilities) Other liabilities primarily consist of net assets attributable to third-party trust beneficiaries of consolidated structured entities, amounts payable to the National Council for Social Security Fund, and trust industry guarantee funds collected on behalf of financing parties - Other liabilities primarily consist of net assets attributable to third-party trust beneficiaries of consolidated structured entities, amounts payable to the National Council for Social Security Fund, and trust industry guarantee funds collected on behalf of financing parties of financing trust plans[113](index=113&type=chunk) - Net assets attributable to third-party trust beneficiaries of consolidated structured entities decreased by **10.3%** to **RMB 780.5 million**[114](index=114&type=chunk) - As of June 30, 2025, the company had an outstanding balance of **RMB 700.0 million** in non-current fund borrowings from the Trust Protection Fund Company[115](index=115&type=chunk) [Off-Balance Sheet Arrangements](index=51&type=section&id=Off-Balance%20Sheet%20Arrangements) As of June 30, 2025, the Group had no off-balance sheet guarantees or foreign currency forward contracts - As of June 30, 2025, the Group had no off-balance sheet guarantees or foreign currency forward contracts[116](index=116&type=chunk) [Asset Scale, Asset Quality, and Financial Performance of Consolidated Trust Plans](index=51&type=section&id=3.4%20Asset%20Scale,%20Asset%20Quality,%20and%20Financial%20Performance%20of%20Consolidated%20Trust%20Plans) As of June 30, 2025, the company consolidated 29 trust plans with total trust assets of RMB 4,692.9 million, which increased total assets and liabilities but had a reduced impact on net profit - As of June 30, 2025, the company consolidated **29 trust plans** it managed, with total trust assets of these consolidated trust plans amounting to **RMB 4,692.9 million**[117](index=117&type=chunk) Number of Consolidated Trust Plans | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Beginning of Period | 30 | 22 | | Newly Consolidated Trust Plans | – | 11 | | Terminated Consolidated Trust Plans | 1 | 3 | | End of Period | 29 | 30 | - The impact of trust plan consolidation on the Group's net profit was **RMB 13 million** in H1 2025, compared to **RMB 7 million** in H1 2024[123](index=123&type=chunk) - The company assesses whether a trust plan is consolidated based on its exposure to variable returns from its involvement with the trust, or its rights to variable returns, and its ability to use its power over the trust's activities to affect the amount of those returns[123](index=123&type=chunk) [Risk Management](index=56&type=section&id=3.5%20Risk%20Management) The company is committed to establishing a sound risk management and internal control system covering credit, market, liquidity, compliance, operational, reputational, policy/legal/ethical risks, and anti-money laundering management - The company is committed to establishing a sound risk management and internal control system, covering all aspects of business operations[126](index=126&type=chunk) [Risk Management Organizational Structure](index=56&type=section&id=3.5.1%20Risk%20Management%20Organizational%20Structure) The company's comprehensive risk management organizational structure is integrated into all levels of corporate governance, including the shareholders' meeting, board of directors and its committees, supervisory board, general manager's office, and various functional departments - The comprehensive risk management organizational structure is integrated into all levels of corporate governance, including the shareholders' meeting, the Board of Directors and its Strategy and Risk Management Committee and Audit Committee, the Supervisory Board, and the General Manager's Office[127](index=127&type=chunk) [Factors Affecting Our Operations](index=57&type=section&id=3.5.2%20Factors%20Affecting%20Our%20Operations) Key factors affecting the company's operations include China's overall economic and financial market conditions, the regulatory environment, business lines and product mix, competition, and the interest rate environment - China's overall economic and financial market conditions have a significant impact on the company's business, financial position, operating results, and prospects, with economic slowdown and structural adjustments posing challenges[130](index=130&type=chunk) - The regulatory environment of China's trust industry is continuously changing, requiring the company to adjust its trust business structure and operating model, which may have positive or negative impacts[132](index=132&type=chunk) - The company faces fierce competition from other trust companies, commercial banks, securities companies, and other financial institutions[136](index=136&type=chunk)[137](index=137&type=chunk) - Interest rate changes affect the financing willingness of counterparty clients, the investment returns of entrusted clients, the amount of interest income, and the value of financial assets[139](index=139&type=chunk) [Credit Risk Management](index=62&type=section&id=3.5.3%20Credit%20Risk%20Management) Credit risk refers to the risk of clients and counterparties failing to fulfill contractual obligations; the company manages this through improved systems, enhanced risk control in key areas, and separate credit risk management for trust and proprietary businesses - Credit risk refers to the risk that the company's clients and counterparties fail to fulfill contractual obligations, arising from both trust business and proprietary business[138](index=138&type=chunk) - Credit risk management for trust business is conducted through comprehensive due diligence, strict internal approval, post-event monitoring, and obtaining third-party guarantees and collateral[141](index=141&type=chunk) - Proprietary business's credit risk management is conducted through formulating annual asset allocation plans, maintaining a diversified investment portfolio, and establishing detailed internal risk management policies and procedures[142](index=142&type=chunk) [Market Risk Management](index=64&type=section&id=3.5.4%20Market%20Risk%20Management) Market risk primarily refers to the risk of fluctuations in the fair value or future cash flows of financial instruments due to changes in market prices, managed through diversified and carefully selected investment portfolios and strict investment decision-making mechanisms - Market risk primarily refers to the risk that the fair value or future cash flows of financial instruments will fluctuate due to changes in market prices, mainly caused by price risk, interest rate risk, and exchange rate risk[143](index=143&type=chunk) - The company primarily manages such risks through diversified and carefully selected investment portfolios and strict investment decision-making mechanisms[143](index=143&type=chunk) [Liquidity Risk Management](index=64&type=section&id=3.5.5%20Liquidity%20Risk%20Management) Liquidity risk refers to the risk of the company being unable to obtain sufficient cash to settle its debts; the company regularly forecasts cash flows, monitors capital needs, and holds sufficient liquid assets - Liquidity risk refers to the risk that the company may not be able to obtain sufficient cash to fully settle its debts when they fall due[144](index=144&type=chunk) - The company regularly forecasts cash flows and monitors short-term and long-term capital needs to ensure sufficient cash reserves and financial assets that can be easily converted into cash[144](index=144&type=chunk) [Compliance Risk Management](index=64&type=section&id=3.5.6%20Compliance%20Risk%20Management) Compliance risk refers to the risk of sanctions or losses due to business or employee activities violating laws and regulations; the company has established compliance systems and policies, monitored by the Compliance and Legal Department - Compliance risk refers to the risk of legal sanctions, regulatory measures, disciplinary actions, property losses, or reputational damage due to the company's business activities or employee activities violating relevant laws, regulations, or rules[145](index=145&type=chunk) - The company has formulated several compliance systems and policies, with the Compliance and Legal Department specifically monitoring the overall compliance status of various aspects of daily operations[145](index=145&type=chunk) [Operational Risk Management](index=65&type=section&id=3.5.7%20Operational%20Risk%20Management) Operational risk refers to the risk of financial losses due to improper operations in transaction processes or management systems; the company has established a three-line defense system to mitigate technical violations or human errors - Operational risk refers to the risk of financial losses caused by improper operations in transaction processes or management systems[146](index=146&type=chunk) - The company has formulated the "Operational Risk Management Measures (Trial)", establishing a three-line defense for operational risk management to reduce the risk of technical violations or human errors[146](index=146&type=chunk) [Reputational Risk Management](index=65&type=section&id=3.5.8%20Reputational%20Risk%20Management) The company actively takes measures to avoid and prevent reputational risks, formulating "Reputational Risk Management Measures" and enhancing corporate core values through wealth management, external promotion, and social responsibility - The company has formulated the "Reputational Risk Management Measures", enhancing customer loyalty through excellent wealth management capabilities, strengthening external promotion, and actively fulfilling social responsibilities[147](index=147&type=chunk) [Policy, Legal, and Ethical Risk Management](index=66&type=section&id=3.5.9%20Policy,%20Legal,%20and%20Ethical%20Risk%20Management) The company controls policy risk by analyzing macroeconomic and industry policies, and manages legal and ethical risks through sound corporate governance, internal controls, employee education, and dedicated legal positions - The company controls policy risk by analyzing and researching national macroeconomic policies and industry policies, enhancing foresight and adaptability[148](index=148&type=chunk) - By establishing and improving corporate governance structure, internal control systems, and business operating procedures, the completeness and scientific nature of work processes are ensured[148](index=148&type=chunk) - Strengthening employee ideological and legal awareness education, and setting up dedicated legal positions, effectively controls legal and ethical risks[148](index=148&type=chunk) [Anti-Money Laundering Management](index=66&type=section&id=3.5.10%20Anti-Money%20Laundering%20Management) The company complies with Chinese anti-money laundering laws and regulations, implementing "Anti-Money Laundering Management Measures," establishing a leadership group and suspicious transaction reporting system, and continuously updating customer identity information - The company complies with applicable Chinese anti-money laundering laws and regulations, fulfilling its anti-money laundering obligations, and has implemented the "Anti-Money Laundering Management Measures"[149](index=149&type=chunk) - An anti-money laundering working group and anti-money laundering office have been established to be responsible for anti-money laundering management[149](index=149&type=chunk) - A customer identification system has been established, requiring employees to effectively verify and continuously update customer identity information, identify suspicious transactions, and report them to the China Anti-Money Laundering Monitoring and Analysis Center led by the People's Bank of China[150](index=150&type=chunk)[151](index=151&type=chunk) [Capital Management](index=68&type=section&id=3.6%20Capital%20Management) The company's capital management focuses on net capital and risk capital, aiming to meet regulatory requirements, balance risk and return, and maintain liquidity; all capital management indicators met regulatory requirements as of June 30, 2025 - The company's capital management is centered on net capital and risk capital, aiming to meet external regulatory requirements, balance risk and return, and maintain appropriate liquidity levels[152](index=152&type=chunk) Capital Management Indicators (As of June 30, 2025) | Indicator | Amount/Ratio | | :--- | :--- | | Net Capital | Approximately RMB 9.401 billion | | Total Risk Capital | Approximately RMB 2.889 billion | | Net Capital to Total Risk Capital Ratio | 325.48% | | Net Capital to Net Assets Ratio | 82.72% | - All capital management indicators comply with regulatory requirements (net capital not less than **RMB 200 million**, net capital to total risk capital ratio not less than **100%**, and net capital to net assets ratio not less than **40%**)[152](index=152&type=chunk)[153](index=153&type=chunk) [Outlook](index=69&type=section&id=3.7%20Outlook) Despite global economic uncertainties, China's economy is expected to remain stable and grow steadily, with the trust industry accelerating its transformation and expanding service scenarios in areas like pension and inclusive finance - In the coming period, the world economy will remain shrouded in uncertainty, but China's economy will continue to operate stably and improve in the long term, still achieving steady growth[155](index=155&type=chunk) - Under the guidance of the Central Financial Work Conference spirit and a series of policy documents, the trust industry is accelerating its return to its origins and deepening reforms, with broader service scenarios in areas such as pension finance and inclusive finance[155](index=155&type=chunk) - Shandong Trust will continue to focus on risk resolution and business transformation as its overall goals, scientifically plan its "15th Five-Year Plan" development, and continuously deepen high-quality development and high-level security[156](index=156&type=chunk) Profit and Dividends [Profit and Dividends](index=70&type=section&id=4.%20Profit%20and%20Dividends) The company will not declare an interim dividend for 2025 - The company will not declare an interim dividend for 2025[158](index=158&type=chunk) Directors, Supervisors, and Senior Management of the Company [Directors, Supervisors, and Senior Management of the Company](index=70&type=section&id=5.%20Directors,%20Supervisors,%20and%20Senior%20Management%20of%20the%20Company) As of the date of this interim results announcement, the Board of Directors includes Executive Director Yue Zengguang, Non-executive Directors Chen Liuyi, Duan Xiaoxu, Chen Xuebin, and Independent Non-executive Directors Zheng Wei, Zhang Haiyan, Liu Wanwen - The Board of Directors includes Mr. Yue Zengguang (Chairman, Executive Director); Mr. Chen Liuyi (Vice Chairman, Non-executive Director), Ms. Duan Xiaoxu, and Mr. Chen Xuebin (Non-executive Directors); Mr. Zheng Wei, Ms. Zhang Haiyan, and Ms. Liu Wanwen (Independent Non-executive Directors)[159](index=159&type=chunk) - The Supervisory Board members include Mr. Guo Xiangzhong (Chairman of the Supervisory Board, Shareholder Representative Supervisor), Ms. Wang Qian (External Supervisor), and Ms. Li Yan (Employee Representative Supervisor)[159](index=159&type=chunk) - Senior management includes Mr. Tian Zhiguo (Chief Risk Officer, acting as General Manager) and Ms. Zhou Jianqu (Deputy General Manager)[159](index=159&type=chunk) [Changes in Directors](index=71&type=section&id=Changes%20in%20Directors) The appointments of Mr. Chen Liuyi and Mr. Chen Xuebin as non-executive directors were approved by the Shandong Financial Regulatory Bureau in July 2025, and Mr. Wang Zengye no longer serves as non-executive director and vice chairman - The appointment of Mr. Chen Liuyi as a non-executive director and vice chairman was approved by the Shandong Financial Regulatory Bureau on July 10, 2025, and Mr. Wang Zengye no longer serves as a non-executive director and vice chairman[161](index=161&type=chunk) - The appointment of Mr. Chen Xuebin as a non-executive director was approved by the Shandong Financial Regulatory Bureau on July 30, 2025[161](index=161&type=chunk) [Changes in Supervisors](index=71&type=section&id=Changes%20in%20Supervisors) There were no changes in supervisors during the reporting period; the company plans to abolish the Supervisory Board and supervisors, with the Audit Committee exercising the functions of the Supervisory Board - There were no changes in the company's supervisors during the reporting period[162](index=162&type=chunk) - The company plans to no longer establish a Supervisory Board and supervisors, with the Audit Committee exercising the functions of the Supervisory Board as stipulated by laws and regulations[162](index=162&type=chunk) [Changes in Senior Management](index=71&type=section&id=Changes%20in%20Senior%20Management) There were no changes in the company's senior management during the reporting period - There were no changes in the company's senior management during the reporting period[163](index=163&type=chunk) Corporate Governance Code [Corporate Governance Code](index=71&type=section&id=6.%20Corporate%20Governance%20Code) The company is committed to maintaining high standards of corporate governance, has adopted the Corporate Governance Code set out in Appendix C1 of the Listing Rules, and has complied with all code provisions during the reporting period - The company has adopted the Corporate Governance Code set out in Appendix C1 of the Listing Rules and has complied with all code provisions during the reporting period[164](index=164&type=chunk) Standard Code for Securities Transactions [Standard Code for Securities Transactions](index=72&type=section&id=7.%20Standard%20Code%20for%20Securities%20Transactions) The company has adopted a code for securities transactions by directors, supervisors, and employees no less stringent than the standard set out in Appendix C3 of the Listing Rules, and all directors and supervisors confirmed compliance during the reporting period - The company has adopted a code for securities transactions by directors, supervisors, and employees no less stringent than the standard set out in Appendix C3 of the Listing Rules, "Model Code for Securities Transactions by Directors of Listed Issuers"[165](index=165&type=chunk) - During the reporting period, all directors and supervisors confirmed their compliance with the standard requirements set out in the code[165](index=165&type=chunk) Purchase, Sale or Redemption of Listed Securities [Purchase, Sale or Redemption of Listed Securities](index=72&type=section&id=8.%20Purchase,%20Sale%20or%20Redemption%20of%20Listed%20Securities) During the reporting period, the company did not purchase, sell, or redeem any listed securities - During the reporting period, the company did not purchase, sell, or redeem any listed securities[166](index=166&type=chunk) Significant Matters [Changes in Registered Capital, Capital Structure, and Shareholding](index=72&type=section&id=9.1%20Changes%20in%20Registered%20Capital,%20Capital%20Structure,%20and%20Shareholding) During the reporting period, there were no changes in the company's registered capital, capital structure, or shareholder shareholding - During the reporting period, there were no changes in the company's registered capital, capital structure, or shareholder shareholding[167](index=167&type=chunk) [Proposed Amendments to Articles of Association, Rules of Procedure for Board Meetings, Supervisory Board Meetings, and Shareholders' Meetings](index=72&type=section&id=9.2%20Proposed%20Amendments%20to%20Articles%20of%20Association,%20Rules%20of%20Procedure%20for%20Board%20Meetings,%20Supervisory%20Board%20Meetings,%20and%20Shareholders'%20Meetings) The company has proposed and approved amendments to its Articles of Association, Rules of Procedure for Shareholders' Meetings, Board Meetings, and Supervisory Board Meetings in accordance with the newly revised Company Law and regulations from the Financial Regulatory Administration - The company has proposed and approved amendments to its Articles of Association, Rules of Procedure for Shareholders' Meetings, Board Meetings, and Supervisory Board Meetings in accordance with the newly revised "Company Law" and relevant regulations from the Financial Regulatory Administration regarding the abolition of the Supervisory Board[168](index=168&type=chunk)[169](index=169&type=chunk)[170](index=170&type=chunk) - The company plans to no longer establish a Supervisory Board and supervisors, with the Audit Committee exercising the functions of the Supervisory Board as stipulated by laws and regulations[170](index=170&type=chunk) [Major Litigation and Arbitration Matters](index=75&type=section&id=9.3%20Major%20Litigation%20and%20Arbitration%20Matters) As of June 30, 2025, the company was involved in nine litigation or arbitration cases as plaintiff, totaling approximately RMB 5,430.70 million, and four litigation cases as defendant, totaling approximately RMB 766.60 million - As of June 30, 2025, the company was involved in **nine litigation or arbitration cases** as plaintiff and applicant, with a total amount involved of approximately **RMB 5,430.70 million**[172](index=172&type=chunk) - As of June 30, 2025, the company was involved in **four litigation cases** as defendant, with a total amount involved of approximately **RMB 766.60 million**[172](index=172&type=chunk) - In one of these cases, the company only bears administrative responsibility as per contractual agreement, involving a litigation amount of approximately **RMB 700 million**[172](index=172&type=chunk) [Major Asset Acquisitions, Disposals, and Mergers](index=75&type=section&id=9.4%20Major%20Asset%20Acquisitions,%20Disposals,%20and%20Mergers) The company entered into an agreement with Guolian Minsheng in August 2024 for Guolian Minsheng to acquire the company's shares in Minsheng Securities by issuing A shares, with the company receiving 31,039,606 newly issued A shares of Guolian Minsheng - The company and Guolian Minsheng entered into an agreement on August 8, 2024, for the acquisition of assets by issuing shares, where Guolian Minsheng acquired the company's shares in Minsheng Securities Co., Ltd. by issuing A shares[173](index=173&type=chunk) - The number of newly issued A shares of Guolian Minsheng obtained by the company under this transaction was **31,039,606 shares**[173](index=173&type=chunk) - The registration of the company's subscription for Guolian Minsheng shares was completed in January 2025[173](index=173&type=chunk) [Penalties Imposed on the Company, Directors, Supervisors, and Senior Management](index=76&type=section&id=9.5%20Penalties%20Imposed%20on%20the%20Company,%20Directors,%20Supervisors,%20and%20Senior%20Management) During the reporting period, the company, its directors, supervisors, and senior management were not subject to any penalties - During the reporting period, the company, its directors, supervisors, and senior management were not subject to any penalties[175](index=175&type=chunk) [Interim Reports on Significant Matters](index=76&type=section&id=9.6%20Interim%20Reports%20on%20Significant%20Matters) During the reporting period, the company did not issue any interim reports on significant matters - During the reporting period, the company did not issue any interim reports on significant matters[176](index=176&type=chunk) Events After the Reporting Period [Events After the Reporting Period](index=76&type=section&id=10.%20Events%20After%20the%20Reporting%20Period) Except for the disclosed matters, no significant events occurred after the reporting period - Except for the disclosed matters, no significant events occurred after the reporting period[177](index=177&type=chunk) Summary of Interim Financial Statements [Interim Condensed Consolidated Income Statement](index=77&type=section&id=11.1%20Interim%20Condensed%20Consolidated%20Income%20Statement) For the six months ended June 30, 2025, the company's total operating income was RMB 633,861,335.90, net profit was RMB 167,419,220.66, and basic earnings per share was RMB 0.04/share Interim Condensed Consolidated Income Statement (RMB yuan) | Item | January-June 2025 | January-June 2024 | | :--- | :--- | :--- | | Total Operating Income | 633,861,335.90 | 587,751,833.39 | | Total Operating Costs | 358,508,294.23 | 295,780,081.56 | | Operating Profit | 275,353,041.67 | 291,971,751.83 | | Total Profit | 230,401,944.42 | 253,326,796.91 | | Income Tax Expense | 62,982,723.76 | 82,818,684.51 | | Net Profit | 167,419,220.66 | 170,508,112.40 | | Total Comprehensive Income | 110,717,444.32 | 167,768,867.43 | | Basic Earnings Per Share (yuan/share) | 0.04 | 0.04 | [Interim Condensed Consolidated Balance Sheet](index=80&type=section&id=11.2%20Interim%20Condensed%20Consolidated%20Balance%20Sheet) As of June 30, 2025, the company's total assets were RMB 14,084,394,078.31, total liabilities were RMB 2,736,950,698.21, and total shareholders' equity was RMB 11,347,443,380.10 Interim Condensed Consolidated Balance Sheet (RMB yuan) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Assets | 14,084,394,078.31 | 14,279,337,691.82 | | Total Liabilities | 2,736,950,698.21 | 3,042,611,756.04 | | Total Shareholders' Equity | 11,347,443,380.10 | 11,236,725,935.78 | | Total Liabilities and Shareholders' Equity | 14,084,394,078.31 | 14,279,337,691.82 | [Notes to Interim Condensed Consolidated Financial Information](index=82&type=section&id=11.3%20Notes%20to%20Interim%20Condensed%20Consolidated%20Financial%20Information) The notes detail the company's basic information, basis of financial statement preparation, and specific financial data for cash, loans, trading financial assets, debt investments, and various income and expense items - The notes provide detailed information on the company's basic situation, including its establishment date, listing information, principal business, and parent company information[187](index=187&type=chunk)[188](index=188&type=chunk) - The financial statements are prepared in accordance with "Enterprise Accounting Standards" and the Hong Kong "Companies Ordinance" and "Listing Rules", and are presented on a going concern basis[190](index=190&type=chunk) - The notes provide details of various financial data, such as cash and bank balances, loans and advances, trading financial assets, debt investments, and provisions, and explain the changes between period-end and beginning-of-period balances[191](index=191&type=chunk)[193](index=193&type=chunk)[194](index=194&type=chunk)[195](index=195&type=chunk)[197](index=197&type=chunk)[198](index=198&type=chunk)[200](index=200&type=chunk)[201](index=201&type=chunk) - The notes also provide details of various income and cost items in the income statement, such as net interest income, net fee and commission income, investment income, fair value change gains, business and management expenses, credit impairment losses, etc.[202](index=202&type=chunk)[203](index=203&type=chunk)[204](index=204&type=chunk)[206](index=206&type=chunk) Audit Committee [Audit Committee](index=93&type=section&id=12.%20Audit%20Committee) The Audit Committee has reviewed the accounting principles and practices adopted by the company with management and external auditors, and reviewed the interim results for the six months ended June 30, 2025 - The Audit Committee has reviewed the accounting principles and practices adopted by the company with management and external auditors, and reviewed the interim results for the six months ended June 30, 2025[211](index=211&type=chunk) Publication of Interim Results Announcement for the Six Months Ended June 30, 2025, on HKEX and Company Website [Publication of Interim Results Announcement for the Six Months Ended June 30, 2025, on HKEX and Company Website](index=94&type=section&id=13.%20Publication%20of%20Interim%20Results%20Announcement%20for%20the%20Six%20Months%20Ended%20June%2030,%202025,%20on%20HKEX%20and%20Company%20Website) The interim results announcement for the six months ended June 30, 2025, has been published on the HKEX and company websites, and the interim report containing all information required by the Listing Rules will be published in due course - The interim results announcement for the six months ended June 30, 2025, has been published on the HKEX website (www.hkexnews.hk) and the company website (www.sitic.com.cn)[212](index=212&type=chunk) - The interim report containing all information required by the Listing Rules will be published on the respective websites of the HKEX and the company in due course[212](index=212&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份內容而產生或 因倚賴該等內容而引致的任何損失承擔任何責任。 MicroPort NeuroScientic Corporation 微創腦科學有限公司 （ 於 開 曼 群 島 註 冊 成 立 的 有 限 公 司 ） （股份代號：2172） 截至2025年6月30日止六個月之 未經審核中期業績公告 本公司董事會欣然公佈本集團截至2025年6月30日止六個月（「報告期內」）的未 經審核綜合業績，連同截至2024年6月30日止六個月（「上年同期」）未經審核的 比較數字，其已由審核委員會審閱。 於截至2025年6月30日止六個月，本集團的收入主要來自出血性腦卒中產品、 腦動脈粥樣硬化狹窄產品以及急性缺血性腦卒中產品。 報告期內，本集團錄得收入約人民幣382.9百萬元，其中： 報告期內，本集團錄得淨溢利約人民幣92.7百萬元。董事會決議建議派發截至 2025年6月30日止六個月之中期股息每股普通股0.05港元。 – 1 – (1) 本集團海外業務延續強勁增長態勢，報告期內 ...

[Financial Highlights](index=1&type=section&id=Financial%20Highlights) The Group's financial performance for the six months ended June 30, 2025, shows increased revenue but expanded losses and a decline in equity per share | Metric | 2025 (HK$ million) | 2024 (HK$ million) | | :--- | :--- | :--- | | Revenue | 7,085.8 | 4,517.7 | | Adjusted EBITDA | (29.6) | (71.3) | | Loss before tax | (64.6) | (19.3) | | Loss for the period | (61.1) | (24.9) | | Loss per share – basic and diluted (HK$) | (0.0070) | (0.0028) | | Total equity per share (HK$) | 0.1165 | 0.1215 | - The Board does not recommend the payment of any interim dividend for the six months ended June 30, 2025[2](index=2&type=chunk) [Condensed Consolidated Financial Statements](index=2&type=section&id=Condensed%20Consolidated%20Financial%20Statements) This section presents the Group's condensed consolidated financial statements, including the statement of profit or loss, comprehensive income, and financial position [Condensed Consolidated Statement of Profit or Loss](index=2&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss) The Group recorded revenue of HK$7,085.8 million in H1 2025, a 56.8% increase, but gross profit turned into a gross loss, and loss for the period expanded to HK$61.1 million Summary of Condensed Consolidated Statement of Profit or Loss (HK$ million) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Revenue | 7,085.8 | 4,517.7 | | Gross (loss)/profit | (38.9) | 33.0 | | Other income and net gains and losses | 20.5 | 33.8 | | Net investment gains/(losses) | 9.3 | (4.3) | | General and administrative expenses | (46.9) | (62.2) | | Finance costs | (8.6) | (19.6) | | Loss before tax | (64.6) | (19.3) | | Income tax credit/(expense) | 3.5 | (5.6) | | Loss for the period | (61.1) | (24.9) | | Loss per share attributable to owners of the Company – basic and diluted (HK$) | (0.0070) | (0.0028) | [Condensed Consolidated Statement of Comprehensive Income](index=3&type=section&id=Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) In H1 2025, the Group's total comprehensive loss expanded to HK$41.5 million, primarily due to increased loss for the period, partially offset by positive foreign exchange differences Summary of Condensed Consolidated Statement of Comprehensive Income (HK$ million) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Loss for the period | (61.1) | (24.9) | | Exchange differences on translation of overseas operations | 19.6 | (7.5) | | Other comprehensive income/(loss) for the period, net of tax | 19.6 | (7.5) | | Total comprehensive loss for the period | (41.5) | (32.4) | [Condensed Consolidated Statement of Financial Position](index=4&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, total assets slightly increased, but a significant rise in current liabilities led to a decrease in net current assets and total equity Summary of Condensed Consolidated Statement of Financial Position (HK$ million) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total non-current assets | 692.1 | 666.3 | | Total current assets | 807.3 | 760.8 | | Total current liabilities | 302.7 | 206.1 | | Net current assets | 504.6 | 554.7 | | Total assets less current liabilities | 1,196.7 | 1,221.0 | | Total non-current liabilities | 178.1 | 158.6 | | Net assets | 1,018.6 | 1,062.4 | | Total equity | 1,018.6 | 1,062.4 | [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 notes to the condensed consolidated interim financial information, covering general information, accounting policies, and specific financial line items [1 General Information](index=6&type=section&id=1%20General%20Information) New Era Group Holdings Limited, listed on HKEX, primarily engages in oil and gas exploration and sales in Canada and Argentina, and precious metals trading in Hong Kong - Company's principal activities include oil and gas product exploration, extraction, and sales in Canada and Argentina, and precious metals trading and refining in Hong Kong[11](index=11&type=chunk)[13](index=13&type=chunk) - This interim financial information is unaudited but has been reviewed by the Company's audit committee and approved for publication by the Board[11](index=11&type=chunk) [2 Basis of Preparation](index=6&type=section&id=2%20Basis%20of%20Preparation) The condensed consolidated interim financial information is prepared in accordance with HKAS 34 and should be read in conjunction with the annual financial statements - Financial information is prepared in accordance with HKAS 34 "Interim Financial Reporting" and complies with Listing Rules disclosure requirements[12](index=12&type=chunk) - Financial information is presented in HK$, with all values rounded to the nearest million and one decimal place[12](index=12&type=chunk) [3 Accounting Policies](index=6&type=section&id=3%20Accounting%20Policies) The accounting policies adopted are consistent with the 2024 annual financial statements, with no material impact from the new HKAS 21 amendment on lack of exchangeability - The first-time adoption of HKAS 21 amendment "Lack of Exchangeability" has no material impact on the Group's condensed consolidated interim financial information[13](index=13&type=chunk)[14](index=14&type=chunk) [4 Revenue and Segment Reporting](index=7&type=section&id=4%20Revenue%20and%20Segment%20Reporting) The Group identifies two reportable segments: upstream energy and industrial park development, and precious metals refining and trading, with the latter contributing the majority of revenue - The Group has two reportable segments: upstream energy and industrial park development, and precious metals refining and trading[17](index=17&type=chunk) Reportable Segment Revenue (HK$ million) | Segment | H1 2025 | H1 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Upstream energy and industrial park development | 118.1 | 163.7 | -27.9% | | Precious metals refining and trading | 6,967.7 | 4,354.0 | +60.0% | | **Total** | **7,085.8** | **4,517.7** | **+56.8%** | Reportable Segment Results (HK$ million) | Segment | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Upstream energy and industrial park development | (72.1) | 1.8 | | Precious metals refining and trading | (8.6) | (13.6) | | **Total** | **(80.7)** | **(11.8)** | - Revenue from the precious metals refining and trading segment significantly increased by **60% to HK$6,967.7 million**, while upstream energy segment revenue decreased by **27.9% to HK$118.1 million**[18](index=18&type=chunk) - The Group's total revenue by geographical location primarily originates from Hong Kong (precious metals) and Canada (energy), with a smaller contribution from Argentina[21](index=21&type=chunk) [5 Other Income and Net Gains and Losses](index=11&type=section&id=5%20Other%20Income%20and%20Net%20Gains%20and%20Losses) Other income and net gains and losses decreased to HK$20.5 million in H1 2025, mainly due to lower bank interest income and hyperinflation monetary adjustments Other Income and Net Gains/Losses (HK$ million) | Item | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Bank interest income | 5.6 | 12.2 | | Net gains/(losses) on derivative financial instruments | 0.4 | (5.0) | | Hyperinflation monetary adjustment | 3.2 | 10.5 | | Rental income | 6.6 | 8.5 | | **Total** | **20.5** | **33.8** | - Due to hyperinflation accounting for Argentina operations, hyperinflation monetary adjustment gains in H1 2025 were **HK$3.2 million**, a significant decrease from **HK$10.5 million** in H1 2024[23](index=23&type=chunk)[24](index=24&type=chunk) [6 Net Investment Gains/(Losses)](index=12&type=section&id=6%20Net%20Investment%20Gains%2F%28Losses%29) Net investment gains of HK$9.3 million were recorded in H1 2025, reversing the prior year's loss, primarily driven by fair value gains on listed equity securities Net Investment Gains/(Losses) (HK$ million) | Item | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Net gains/(losses) on fair value of listed equity securities | 8.5 | (5.5) | | Dividend income from listed equity securities | 0.3 | 1.1 | | **Total** | **9.3** | **(4.3)** | [7 Loss Before Tax](index=13&type=section&id=7%20Loss%20Before%20Tax) Loss before tax expanded to HK$64.6 million in H1 2025, with significant costs including cost of inventories sold, depreciation, and employee benefit expenses Major Cost Components (HK$ million) | Item | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Cost of inventories sold | 7,026.9 | 4,473.4 | | Depreciation of property, plant and equipment | 32.0 | 52.4 | | Employee benefit expenses | 46.6 | 51.7 | - In H1 2024, an asset impairment reversal of **HK$111.8 million** was recognized due to impairment assessment of Canadian Montney oil and gas assets as a single cash-generating unit[26](index=26&type=chunk) [8 Finance Costs](index=14&type=section&id=8%20Finance%20Costs) Finance costs significantly decreased to HK$8.6 million in H1 2025, primarily due to reduced interest accretion on asset retirement obligations Finance Costs (HK$ million) | Item | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Interest accretion on asset retirement obligations | 8.2 | 16.0 | | Carbon tax deferred payment (interest reversal)/interest | (0.3) | 3.0 | | **Total** | **8.6** | **19.6** | [9 Income Tax Credit/(Expense)](index=14&type=section&id=9%20Income%20Tax%20Credit%2F%28Expense%29) An income tax credit of HK$3.5 million was recorded in H1 2025, reflecting changes in current and deferred tax for upstream operations, with varying tax rates across jurisdictions Income Tax (HK$ million) | Item | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Current tax (credit)/provision | (2.3) | 5.1 | | Deferred tax (credited)/charged to profit or loss | (1.2) | 0.5 | | **Total** | **(3.5)** | **5.6** | - Hong Kong profits tax rate is **16.5%**, Canadian corporate income tax rates range from **23% to 27%**, and Argentina's corporate income tax rate is **35%**[28](index=28&type=chunk)[29](index=29&type=chunk) [10 Dividends](index=15&type=section&id=10%20Dividends) The Board does not recommend the payment of any interim dividend for the six months ended June 30, 2025, consistent with the prior year - The Board does not recommend the payment of an interim dividend for H1 2025[30](index=30&type=chunk) [11 Loss Per Share Attributable to Owners of the Company](index=15&type=section&id=11%20Loss%20Per%20Share%20Attributable%20to%20Owners%20of%20the%20Company) Basic and diluted loss per share expanded to HK$0.0070 in H1 2025, primarily due to the increased loss for the period Loss Per Share | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Loss for the period (HK$ million) | 61.1 | 24.9 | | Weighted average number of ordinary shares outstanding (shares) | 8,741,776,988 | 8,741,776,988 | | Basic and diluted loss per share (HK$) | (0.0070) | (0.0028) | [12 Exploration and Evaluation Assets, Property, Plant and Equipment and Investment Properties](index=15&type=section&id=12%20Exploration%20and%20Evaluation%20Assets%2C%20Property%2C%20Plant%20and%20Equipment%20and%20Investment%20Properties) In H1 2025, additions to property, plant and equipment amounted to HK$23.4 million, with no additions to exploration and evaluation assets Asset Additions (HK$ million) | Asset Type | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Property, plant and equipment | 23.4 | 29.8 | | Exploration and evaluation assets | 0 | 33.9 | [13 Inventories](index=15&type=section&id=13%20Inventories) Total inventories decreased to HK$147.0 million as of June 30, 2025, mainly due to a reduction in precious metals held for refining and trading Inventory Composition (HK$ million) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Precious metals held for refining and trading | 143.2 | 167.6 | | Consumables | 3.5 | 5.6 | | Petroleum products | 0.3 | 0.2 | | **Total** | **147.0** | **173.4** | [14 Trade and Other Receivables](index=16&type=section&id=14%20Trade%20and%20Other%20Receivables) Total trade and other receivables increased to HK$170.0 million as of June 30, 2025, driven by a rise in trade receivables Trade and Other Receivables (HK$ million) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Trade receivables | 96.0 | 40.2 | | Other receivables | 33.1 | 16.4 | | **Total** | **170.0** | **93.8** | - The aging of trade receivables is primarily concentrated within 0 to 30 days, but receivables over 90 days have also increased[34](index=34&type=chunk) [15 Other Financial Assets at Fair Value Through Profit or Loss](index=17&type=section&id=15%20Other%20Financial%20Assets%20at%20Fair%20Value%20Through%20Profit%20or%20Loss) Other financial assets at fair value through profit or loss totaled HK$29.1 million as of June 30, 2025, primarily comprising listed equity securities Other Financial Assets at Fair Value Through Profit or Loss (HK$ million) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Listed equity securities | 28.9 | 30.7 | | Listed debt securities | 0.2 | 0.3 | | **Total** | **29.1** | **31.0** | - In H1 2025, listed equity securities contributed **HK$8.8 million** in net investment gains, reversing the loss recorded in H1 2024[35](index=35&type=chunk) [16 Trade and Other Payables](index=17&type=section&id=16%20Trade%20and%20Other%20Payables) Total trade and other payables significantly increased to HK$236.6 million as of June 30, 2025, primarily due to higher trade payables and contract liabilities Trade and Other Payables (HK$ million) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Trade payables | 36.9 | 11.6 | | Other payables and accrued expenses | 142.5 | 127.7 | | Contract liabilities | 53.5 | 1.2 | | **Total** | **236.6** | **144.0** | - Contract liabilities significantly increased from **HK$1.2 million to HK$53.5 million**[36](index=36&type=chunk) - Other payables include **HK$45.0 million** in deposits from two independent third parties for a cancelled potential acquisition, which are expected to be refunded[37](index=37&type=chunk) [17 Provision for Asset Retirement Obligations and Other Provisions](index=18&type=section&id=17%20Provision%20for%20Asset%20Retirement%20Obligations%20and%20Other%20Provisions) Total provisions for asset retirement obligations and other provisions increased to HK$183.6 million, influenced by interest accretion and exchange adjustments Provision Movements (HK$ million) | Item | Provision for Asset Retirement Obligations | Other Provisions | Total | | :--- | :--- | :--- | :--- | | As at January 1, 2025 | 145.0 | 21.5 | 166.5 | | Interest accretion | 8.2 | – | 8.2 | | Exchange adjustments | 5.9 | 0.6 | 6.5 | | **As at June 30, 2025** | **161.5** | **22.1** | **183.6** | - Asset retirement obligations primarily relate to estimated decommissioning costs for upstream operations in Argentina and Canada[38](index=38&type=chunk) - Other provisions include arbitration claims from an Argentinian business partner and accrued legal fees[40](index=40&type=chunk) [18 Share Capital](index=19&type=section&id=18%20Share%20Capital) As of June 30, 2025, issued and fully paid share capital remained unchanged at HK$87.4 million, with 8,741,776,988 shares outstanding Share Capital Information | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Issued and fully paid share capital (HK$ million) | 87.4 | 87.4 | | Number of shares | 8,741,776,988 | 8,741,776,988 | [19 Capital Commitments](index=19&type=section&id=19%20Capital%20Commitments) As of June 30, 2025, the Group had no contracted but unprovided capital commitments, a decrease from HK$0.4 million at the end of 2024 Capital Commitments (HK$ million) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Contracted but unprovided | – | 0.4 | [20 Contingent Liabilities](index=19&type=section&id=20%20Contingent%20Liabilities) The Group faces contingent liabilities including an arbitration award for the Los Blancos concession and a legal claim from Beijing Gas Blue Sky Holdings Limited - An arbitration award for the Los Blancos concession in Argentina ruled that High Luck violated operator obligations, requiring payment of Pampa's legal fees of **US$0.6 million (approximately HK$4.4 million)** and transfer of operating rights[44](index=44&type=chunk)[45](index=45&type=chunk) - Beijing Gas Blue Sky Holdings Limited filed a lawsuit against the Company in mainland China, claiming a total of **HK$45.9 million and RMB64.4 million**, which the Company believes lacks legal basis and is defending against[45](index=45&type=chunk) [21 Events After the Reporting Period](index=20&type=section&id=21%20Events%20After%20the%20Reporting%20Period) Subsequent to the reporting period, the company agreed to sell a 49% stake in Macro Gold Precious Metals Refining Limited for approximately HK$13.3 million - On July 24, 2025, the Company agreed to sell a **49% stake** in Macro Gold Precious Metals Refining Limited and shareholder loans for a total consideration of approximately **HK$13.3 million**[46](index=46&type=chunk) - Upon completion of the transaction, Macro Gold will become an indirect non-wholly owned subsidiary of the Company[46](index=46&type=chunk) [Management Discussion and Analysis](index=21&type=section&id=Management%20Discussion%20and%20Analysis) This section provides an overview of the Group's interim financial results, business operations update, and outlook for the remainder of 2025 and beyond [Introduction](index=21&type=section&id=Introduction) New Era Group Holdings Limited operates in oil and gas, new energy industrial parks, and precious metals, with a commitment to ESG and sustainable clean energy investments - The Group's core businesses include oil and gas exploration and development, new energy industrial parks in Canada and Argentina, and precious metals refining and trading in Hong Kong[47](index=47&type=chunk) - The Group is committed to global sustainable clean energy investments and net-zero emission targets under its ESG mandate[47](index=47&type=chunk) [Interim Financial Results for 2025](index=21&type=section&id=Interim%20Financial%20Results%20for%202025) In H1 2025, the Group reported a post-tax loss of HK$61.1 million and an adjusted EBITDA loss of HK$29.6 million, influenced by weak gas prices and precious metals losses H1 2025 Key Financial Performance (HK$ million) | Metric | Amount | | :--- | :--- | | Post-tax loss | 61.1 | | Adjusted EBITDA | (29.6) | - The loss is primarily attributed to weak natural gas prices, decreased production in Canadian energy operations, and ongoing losses in the precious metals refining and trading business, partially offset by **HK$9.3 million** in net investment gains[50](index=50&type=chunk) - The Group maintains a robust financial position with no external borrowings and holds **HK$502.8 million** in highly liquid current assets[49](index=49&type=chunk) [Business Operations Update](index=22&type=section&id=Business%20Operations%20Update) The Group provides updates on its Canada Energy, Discovery Park, Argentina Energy, and Precious Metals Refining and Trading segments, highlighting challenges and strategic shifts [Canada Energy](index=22&type=section&id=Canada%20Energy) Canada Energy's daily production decreased by 17% in H1 2025 due to facility closures and pipeline constraints, but the Group is pursuing hedging and alternative sales channels - Canada Energy's average daily production was **6,600 barrels of oil equivalent (boe)**, a **17% year-on-year decrease**, with **94%** being natural gas[52](index=52&type=chunk) - Production decline was mainly due to the closure of the third-party Fort Nelson Gas Plant, NGTL pipeline transportation restrictions, and proactive production curtailment in response to weak natural gas prices[52](index=52&type=chunk) - The AECO spot average price was **C$1.93 per cubic meter**, while the Group achieved an average price of **C$17.20 per boe**, remaining largely stable[54](index=54&type=chunk) - The Group has initiated hedging programs to mitigate commodity price volatility risks and is evaluating alternative sales channels, such as long-term gas supply for containerized data centers[58](index=58&type=chunk) - Montney assets have estimated reserves of **7.6 million boe (2P proved plus probable reserves)**, with a pre-tax net present value of **HK$432.4 million**[59](index=59&type=chunk) - The Horn River Basin holds significant contingent resources, with estimated natural gas volumes of **3.08 trillion cubic feet (tcf)**, but commercial production faces challenges from low gas prices and lack of transportation access[61](index=61&type=chunk) - The Group is advancing energy audits, feasibility studies for facility upgrades, and evaluating carbon offset projects to achieve net-zero emission targets[62](index=62&type=chunk) - The Group entered into an MOU with a data center operator consortium to explore opportunities for developing a **10.5 MW natural gas-powered data center pilot**[63](index=63&type=chunk) [Discovery Park](index=25&type=section&id=Discovery%20Park) Discovery Park is transitioning to a 'Green Energy' hub, leveraging renewable hydropower to attract data center and aquaculture investments, with environmental remediation progressing - Discovery Park has put on hold circular economy hub plans, such as green hydrogen, to focus on large-scale data centers, land-based aquaculture, and emerging offshore aquaculture concepts[65](index=65&type=chunk) - The park is being repositioned as a "Green Energy" hub, relying entirely on renewable hydropower, aligning with ESG objectives[66](index=66&type=chunk) - In July 2025, the project received in-principle approval for its remediation plan from the BC Ministry of Environment and Climate Change Strategy[67](index=67&type=chunk) - Phase 1 demolition is complete, and Phase 2 demolition will commence within the next 12 months, targeting power energization of the park by Q4 2026[69](index=69&type=chunk) - An assessment at the end of 2024 confirmed a post-tax fair value gain of **HK$96.4 million** for the property, reflecting its prime location and development potential[70](index=70&type=chunk) - The Group is collaborating with BC Hydro to advance additional power capacity to support the energy demands of AI-driven data center clusters[71](index=71&type=chunk) - Project risks, including execution and market uncertainties, are being mitigated through phased development, deferral of hydrogen projects, seeking alternative power solutions, and collaboration with Indigenous Nations[73](index=73&type=chunk)[74](index=74&type=chunk) [Argentina Energy](index=28&type=section&id=Argentina%20Energy) Argentina Energy faces arbitration and macroeconomic challenges, with Los Blancos production significantly declining, and the Group is gradually divesting from the region - High Luck was ruled by the arbitration tribunal to have violated operator obligations for refusing to drill additional development wells, requiring payment of Pampa's legal fees of **US$0.6 million** and transfer of Los Blancos operating rights[79](index=79&type=chunk)[80](index=80&type=chunk) - Los Blancos oil production has declined by over **90%** from a peak of **1,400 barrels per day to approximately 120 barrels per day**, validating NSAI's estimated **1.5 million barrels** of recoverable reserves for High Luck[78](index=78&type=chunk)[80](index=80&type=chunk) - The Tartagal Oriental & Morillo exploration license was not renewed, and High Luck has filed an appeal, currently awaiting judicial decision[81](index=81&type=chunk)[82](index=82&type=chunk) - The Argentinian Peso depreciated by **15%** against the US dollar, with an inflation rate of **15.1%**, and the Group is evaluating High Luck's options and continuing its divestment from Argentina[83](index=83&type=chunk)[84](index=84&type=chunk) [Precious Metals Refining and Trading](index=30&type=section&id=Precious%20Metals%20Refining%20and%20Trading) Precious metals refining and trading segment loss narrowed by 37% in H1 2025, with revenue growing 60%, and the Group is pursuing international expansion and has agreed to sell a stake - Macro Gold's segment loss for H1 2025 was **HK$8.6 million**, a **37% reduction** from the prior year[86](index=86&type=chunk) - Overall trading volume increased by approximately **18%**, with total revenue growing by **60% to HK$6,967.7 million**, primarily driven by rising gold prices[86](index=86&type=chunk) - Macro Gold managed gold price volatility through active hedging strategies, which limited its ability to profit from recent gold price increases[86](index=86&type=chunk) - The Group is actively pursuing international expansion for its precious metals trading and refining business to enhance long-term competitiveness and reduce reliance on a single market[87](index=87&type=chunk) - Subsequent to the reporting period, the Company agreed to sell a **49% stake** in Macro Gold and shareholder loans for a total consideration of approximately **HK$13.3 million**[88](index=88&type=chunk) [Outlook for the Remainder of 2025 and Beyond](index=32&type=section&id=Outlook%20for%20the%20Remainder%20of%202025%20and%20Beyond) The Group plans to diversify and expand internationally, focusing on Discovery Park's data center projects, leveraging Canada's Montney assets, and growing its precious metals business - The Group will actively pursue business diversification and expand its international footprint to address geopolitical uncertainties and the low-carbon transition trend[90](index=90&type=chunk) - Discovery Park will prioritize the development of AI-driven data center and aquaculture projects, and finalize power supply arrangements with BC Hydro[91](index=91&type=chunk) - Canada's Montney assets are expected to benefit from natural gas price recovery driven by the commissioning of LNG Canada, and the Group will explore stable sales channels such as converting natural gas for data center applications[92](index=92&type=chunk) - The precious metals refining and trading business will actively pursue international expansion to broaden its customer base, diversify supply sources, and reduce geographical concentration risk[93](index=93&type=chunk) [Financial Review](index=33&type=section&id=Financial%20Review) This section provides a detailed financial review, including an overview of performance, capital structure, liquidity, and financial resources [Overview of Financial Performance](index=33&type=section&id=Overview%20of%20Financial%20Performance) In H1 2025, revenue increased by 56.8% to HK$7,085.8 million, driven by precious metals sales, but gross profit turned to a loss, and the loss attributable to owners expanded H1 2025 Financial Performance Summary (HK$ million) | Metric | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | | Revenue | 7,085.8 | 4,517.7 | +56.8% | | Gross (loss)/profit | (38.9) | 33.0 | From profit to loss | | Other income, gains and losses, net | 20.5 | 33.8 | -39% | | General and administrative expenses | 46.9 | 62.2 | -25% | | Finance costs | 8.6 | 19.6 | -56% | | Income tax (credit)/expense | (3.5) | 5.6 | From expense to credit | | Loss attributable to owners of the Company | 61.1 | 24.9 | Loss expanded | - Growth in precious metals sales was the primary driver of increased revenue, while weak Canadian natural gas prices led to a gross loss[94](index=94&type=chunk) - Net working capital was **HK$206.1 million**, and cash and bank balances totaled **HK$473.7 million**[96](index=96&type=chunk) [Capital Structure, Liquidity and Financial Resources](index=34&type=section&id=Capital%20Structure%2C%20Liquidity%20and%20Financial%20Resources) This section details the Group's capital structure, liquidity, and financial resources, including the use of IPO proceeds and its debt-free status [Use of Proceeds and Liquidity](index=34&type=section&id=Use%20of%20Proceeds%20and%20Liquidity) As of June 30, 2025, HK$161.7 million of IPO proceeds remain unutilized for energy investments, with the Group maintaining a strong financial position with no external borrowings Unutilized Net Proceeds from Public Offering (HK$ million) | Item | December 31, 2024 | June 30, 2025 | | :--- | :--- | :--- | | Investment in oil and gas, power generation and renewable energy | 161.7 | 161.7 | | **Total** | **161.7** | **161.7** | - The Group has no external borrowings, resulting in a **0% debt-to-asset ratio**[102](index=102&type=chunk) - As of June 30, 2025, net current assets were **HK$504.6 million**, cash and bank balances were **HK$473.7 million**, and total highly liquid assets amounted to **HK$502.8 million**[100](index=100&type=chunk) - The Group's total equity was **HK$1,018.6 million**, with a net asset value per share of **HK$0.12**[100](index=100&type=chunk) [Principal Risks and Uncertainties](index=35&type=section&id=Principal%20Risks%20and%20Uncertainties) This section outlines the principal risks and uncertainties facing the Group, encompassing business, operational, and financial risks [Business and Financial Risks](index=35&type=section&id=Business%20and%20Financial%20Risks) The Group faces development and supply chain risks in precious metals, geological and operational risks in oil and gas, wildfire risks in Canada, and various financial market risks - Precious metals refining and trading business faces development and supply chain risks, mitigated by expanding customer and supplier bases[106](index=106&type=chunk) - Oil and gas operations face geological, exploration, and development risks, managed through planning analysis by technical and operational teams and expert support[107](index=107&type=chunk) - Canadian operations face wildfire risks, which are mitigated by purchasing insurance, real-time weather monitoring, and rapid response plans[107](index=107&type=chunk) - The Group faces financial risks from credit, liquidity, interest rate, currency, and commodity price fluctuations, currently without a foreign currency hedging policy but continuously monitored[107](index=107&type=chunk)[108](index=108&type=chunk) [Other Information](index=36&type=section&id=Other%20Information) This section covers additional information regarding the Group's employees, stakeholder relationships, significant transactions, corporate governance, and publication details [Employees](index=36&type=section&id=Employees) As of June 30, 2025, the Group employed 122 permanent staff, with total employee remuneration of HK$46.6 million, offering competitive compensation and training Employee Information | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total permanent employees | 122 | 134 | | Total employee remuneration (HK$ million) | 46.6 | 51.7 | [Relationship with Suppliers, Customers and Other Stakeholders](index=37&type=section&id=Relationship%20with%20Suppliers%2C%20Customers%20and%20Other%20Stakeholders) The Group maintains good relationships with its suppliers, customers, social groups, and government, with no other material disputes reported during the period, except for contingent liabilities - The Group maintains good relationships with its suppliers, customers, and other stakeholders, with no material disputes during the reporting period (excluding contingent liabilities)[110](index=110&type=chunk) [Material Acquisitions and Disposals](index=37&type=section&id=Material%20Acquisitions%20and%20Disposals) There were no material acquisitions or disposals of subsidiaries, associates, or joint ventures during the six months ended June 30, 2025 - No material acquisitions or disposals occurred during the reporting period[111](index=111&type=chunk) [Material Investments](index=37&type=section&id=Material%20Investments) As of June 30, 2025, the Group held HK$29.1 million in financial assets at fair value through profit or loss, but no single investment constituted more than 5% of total assets - The Group holds **HK$29.1 million** in financial assets at fair value through profit or loss, but no single investment is considered material[112](index=112&type=chunk) [Corporate Governance and Other Information](index=37&type=section&id=Corporate%20Governance%20and%20Other%20Information) The Group adheres to high corporate governance standards, complying with HKEX Listing Rules, with interim results reviewed by the audit committee and directors confirming compliance with trading standards - The Group complies with the Corporate Governance Code in Appendix C1 of the Listing Rules and regularly reviews its practices[113](index=113&type=chunk) - Directors confirm compliance with the Model Code for Securities Transactions by Directors of Listed Issuers in Appendix C3 of the Listing Rules during the reporting period[115](index=115&type=chunk) - The Audit Committee has reviewed the interim results and deemed them to comply with applicable accounting standards and the Listing Rules[116](index=116&type=chunk) - During the reporting period, neither the Company nor its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[117](index=117&type=chunk) - The Company complies with the **25% public float requirement** of the Listing Rules[118](index=118&type=chunk) - The Group has complied with relevant laws and regulations in all material respects, with no serious breaches during the reporting period[119](index=119&type=chunk) - The Board does not recommend the payment of an interim dividend[120](index=120&type=chunk) [Publication of Interim Results and Interim Report on HKEX and Company Website](index=39&type=section&id=Publication%20of%20Interim%20Results%20and%20Interim%20Report%20on%20HKEX%20and%20Company%20Website) The interim results announcement has been published on the HKEX website and the company's website, with the interim report to be dispatched to shareholders in due course - The interim results announcement has been published on the HKEX website and the Company's website[122](index=122&type=chunk) [Acknowledgement](index=39&type=section&id=Acknowledgement) The Board of Directors, led by Chairman Mr. Zheng Jinchao, extends gratitude to all directors, management, staff, shareholders, investors, partners, banks, clients, and suppliers for their support - Mr. Zheng Jinchao, Chairman of the Board, thanks all Board members, management, staff, shareholders, investors, business partners, banks, clients, and suppliers for their support[123](index=123&type=chunk) [Board of Directors](index=39&type=section&id=Board%20of%20Directors) The Board of Directors comprises executive directors Mr. Zheng Jinchao (Chairman) and Mr. Tang Wing Yan (CEO), non-executive director Mr. Li Chi Hin, and four independent non-executive directors - The Board of Directors includes executive directors Mr. Zheng Jinchao (Chairman) and Mr. Tang Wing Yan (CEO), non-executive director Mr. Li Chi Hin, and four independent non-executive directors[124](index=124&type=chunk)

Financial Performance - For the six months ended June 30, 2025, investment management (IM) service revenue totaled approximately HKD 11,642,000, an increase of 3.6% from HKD 11,242,000 for the same period in 2024[2] - The net profit attributable to the company's owners for the six months ended June 30, 2025, was approximately HKD 29,341,000, representing a decrease of 38.5% from HKD 47,695,000 in the same period of 2024[3] - Adjusted profit before tax (excluding one-off loan interest income) for the six months ended June 30, 2025, was approximately HKD 35,710,000, an increase of 10.7% from HKD 32,261,000 in the prior period[3] - The total operating expenses for the six months ended June 30, 2025, increased by 9.1% to HKD 18,083,000 from HKD 16,571,000 in the same period of 2024[3] - The basic earnings per share for the six months ended June 30, 2025, were HKD 0.1143, down from HKD 0.2007 in the same period of 2024[2] - The operating profit for the six months ended June 30, 2025, was HKD 29,785,000, down from HKD 48,016,000 in the previous year, representing a decline of 38.0%[34] - Profit before tax decreased by approximately 28.1% to about HKD 35,710,000, compared to HKD 49,667,000 in the same period last year[15] - The company reported a significant increase in employee benefits expenses, totaling HKD 10,642,000 for the six months ended June 30, 2025, compared to HKD 7,959,000 in the same period of 2024[73] Investment Performance - The fair value gains from direct investments under the SDI segment amounted to approximately HKD 23,538,000, a significant increase of 2,470.4% compared to a fair value loss of HKD 993,000 in the prior period[3] - The net fair value gains from strategic investments decreased by 82.1% to HKD 5,902,000 from HKD 32,924,000 in the prior period[3] - Direct investment gains rose from a loss of approximately HKD 993,000 in the previous year to gains of approximately HKD 23,538,000, while strategic investment gains decreased by 82.1% to approximately HKD 5,902,000[12] - The company’s direct investment dividend income for the six months ended June 30, 2025, was HKD 986,000, compared to HKD 811,000 for the same period in 2024, showing an increase of approximately 21.6%[94] Assets and Liabilities - The company's assets under management (AUM) increased by 3.3% to USD 470 million as of June 30, 2025, compared to USD 455 million as of December 31, 2024[3] - As of June 30, 2025, the company's total equity was approximately HKD 999,632,000, with a total issued share count of 256,635,944 shares[32] - The company’s total liabilities decreased to HKD 47,111,000 as of June 30, 2025, from HKD 73,743,000 as of December 31, 2024[36] - The total carrying value of investments in associates increased to HKD 307,047,000 as of June 30, 2025, from HKD 263,991,000 as of December 31, 2024, reflecting a growth of approximately 16.3%[97] Revenue Sources - Consulting fee revenue for the six months ended June 30, 2025, was approximately HKD 2,964,000, with no revenue reported in the prior period[3] - Revenue from two major customers accounted for over 10% of total revenue, with Customer One contributing HKD 6,481,000 and Customer Two contributing HKD 2,594,000 for the six months ended June 30, 2025[71] - The IM business generated revenue of HKD 11,642,000, while the SDI business contributed HKD 33,636,000 for the six months ended June 30, 2025[64] Future Outlook - The company anticipates continued business expansion and value creation for investors in the future[5] - The company expects to expand its customer base and revenue sources through the development of new products tailored to global investor needs[28] - The company aims to enhance operational efficiency and market image through strategic partnerships and has made cornerstone investments in promising companies like Lens Technology[27] Shareholder Actions - The company completed a share repurchase of 149,000 ordinary shares for approximately HKD 1,513,000 post-reporting period[30] - The company did not declare an interim dividend for the six months ended June 30, 2025, consistent with the previous year[78] - The board does not recommend any interim dividend for the six months ended June 30, 2025, consistent with the previous year[130] Financial Management - The company has implemented strict cost control measures and revised long-term business development strategies, showing initial positive results[20] - The company’s cash flow management policy includes regular monitoring of cash flow needs to ensure sufficient cash reserves[48] - The company recorded a net fair value gain of HKD 29,440,000 from financial assets and liabilities for the SDI business for the six months ended June 30, 2025[64] Compliance and Governance - The audit committee has reviewed the group's unaudited consolidated interim financial information for the six months ended June 30, 2025, and found no objections to the accounting policies adopted[136] - The company has not adopted any new standards that would have a significant impact on its financial statements as of January 1, 2025[42]

[Financial Highlights](index=1&type=section&id=Financial%20Highlights) This section provides a concise overview of the company's key financial performance indicators for the period | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 514,657 | 537,178 | -4.2 | | Gross Profit | 341,236 | 388,290 | -12.1 | | Loss Attributable to Owners of the Parent | (131,116) | (139,254) | -5.8 | [Interim Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=2&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) This statement presents the company's financial performance, including revenue, expenses, and net loss, for the interim period | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Revenue | 514,657 | 537,178 | | Cost of Sales | (173,421) | (148,888) | | Gross Profit | 341,236 | 388,290 | | Other Income and Gains | 10,553 | 13,424 | | Selling and Distribution Expenses | (232,057) | (232,240) | | Administrative Expenses | (126,246) | (124,163) | | Research and Development Expenses | (106,962) | (170,110) | | Net Impairment Losses on Financial Assets | (7,644) | (3,857) | | Other Expenses | (2,072) | (656) | | Finance Costs | (28,465) | (29,998) | | Loss Before Tax | (151,657) | (159,310) | | Income Tax Credit | 15,663 | 14,046 | | Loss for the Period | (135,994) | (145,264) | | Loss Attributable to Owners of the Parent | (131,116) | (139,254) | | Loss Attributable to Non-controlling Interests | (6,010) | (4,878) | - Loss for the period narrowed by **6.4%** year-on-year to **RMB 135,994 thousands**[6](index=6&type=chunk)[7](index=7&type=chunk) - Research and development expenses significantly decreased by **37.1%** to **RMB 106,962 thousands**[6](index=6&type=chunk) [Interim Condensed Consolidated Statement of Financial Position](index=4&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) This statement outlines the company's assets, liabilities, and equity at a specific point in time, reflecting its financial health | Metric | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Total Non-current Assets | 4,973,797 | 4,926,924 | | Total Current Assets | 2,213,931 | 2,387,397 | | Total Current Liabilities | 3,026,219 | 3,090,268 | | Net Current Liabilities | (812,288) | (702,871) | | Total Non-current Liabilities | 617,264 | 612,945 | | Total Equity | 3,544,245 | 3,611,108 | - Net current liabilities expanded to **RMB 812,288 thousands**, an increase of **RMB 109,417 thousands** from the end of 2024[9](index=9&type=chunk) - Total non-current assets slightly increased, while total current assets decreased[8](index=8&type=chunk) [Interim Condensed Consolidated Statement of Changes in Equity](index=6&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) This statement details the changes in the company's equity components over the interim period, including profit/loss and share issuance | Metric | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Equity Attributable to Owners of the Parent | 3,303,535 | 3,365,520 | | Non-controlling Interests | 240,710 | 245,588 | | Total Equity | 3,544,245 | 3,611,108 | - Total equity decreased from **RMB 3,611,108 thousands** at the end of 2024 to **RMB 3,544,245 thousands**[10](index=10&type=chunk) - Loss for the period of **RMB 135,994 thousands** was partially offset by proceeds from share issuance of **RMB 70,062 thousands**[10](index=10&type=chunk) [Interim Condensed Consolidated Statement of Cash Flows](index=7&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) This statement summarizes the cash inflows and outflows from operating, investing, and financing activities during the interim period | Cash Flow Type | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Net Cash Flows Used in Operating Activities | (96,839) | (97,158) | | Net Cash Flows Used in Investing Activities | (110,808) | (91,532) | | Net Cash Flows From Financing Activities | 2,668 | 130,445 | | Net Decrease in Cash and Cash Equivalents | (204,979) | (58,245) | | Cash and Cash Equivalents at End of Period | 289,507 | 525,343 | - Net cash flows used in operating activities amounted to an outflow of **RMB 96,839 thousands**, largely consistent with the prior year period[13](index=13&type=chunk) - Net cash flows used in investing activities increased to an outflow of **RMB 110,808 thousands**[14](index=14&type=chunk) - Net cash flows from financing activities shifted from an inflow of **RMB 130,445 thousands** in the prior year period to an inflow of **RMB 2,668 thousands**[14](index=14&type=chunk) [Notes to the Interim Condensed Consolidated Financial Information](index=9&type=section&id=Notes%20to%20the%20Interim%20Condensed%20Consolidated%20Financial%20Information) This section provides detailed explanations and additional information supporting the interim condensed consolidated financial statements [1. Company and Group Information](index=9&type=section&id=1.%20Company%20and%20Group%20Information) Aimei Vaccine Co., Ltd. was incorporated in China in 2011, listed on the HKEX in 2022, focusing on human vaccine R&D, production, and commercialization - The company was incorporated in China on November 9, 2011, and listed on the Main Board of the HKEX on October 6, 2022[15](index=15&type=chunk)[16](index=16&type=chunk) - The Group's principal business involves the research, development, production, and commercialization of human vaccine products in China[17](index=17&type=chunk) [2.1 Basis of Preparation](index=9&type=section&id=2.1%20Basis%20of%20Preparation) Interim financial information is prepared under IAS 34, should be read with 2024 annual statements, and despite net current liabilities, management deems the going concern assumption appropriate - The financial information is prepared in accordance with IAS 34 and should be read in conjunction with the annual financial statements[18](index=18&type=chunk) - As of June 30, 2025, the Group's net current liabilities amounted to **RMB 812,288 thousands**[19](index=19&type=chunk) - Management has renewed bank borrowings of **RMB 128,000 thousands** and has unutilized bank facilities of **RMB 566,000 thousands**, considering the going concern assumption appropriate[19](index=19&type=chunk) [2.2 Changes in Accounting Policies and Disclosures](index=9&type=section&id=2.2%20Changes%20in%20Accounting%20Policies%20and%20Disclosures) Accounting policies align with 2024 annual statements, with only new IFRS amendments adopted, specifically IAS 21 (lack of exchangeability) having no impact - Accounting policies are consistent with the 2024 annual financial statements, with only the initial adoption of amended IFRS accounting standards[20](index=20&type=chunk) - The amendments to IAS 21 regarding 'Lack of Exchangeability' had no impact on the Group's interim condensed consolidated financial information[22](index=22&type=chunk) [3. Operating Segment Information](index=10&type=section&id=3.%20Operating%20Segment%20Information) The Group's vaccine sales and R&D services are considered a single reportable segment, thus no segment analysis is presented - The Group's business (vaccine sales and R&D services) is considered a single reportable segment[23](index=23&type=chunk) [4. Revenue, Other Income and Gains](index=10&type=section&id=4.%20Revenue%2C%20Other%20Income%20and%20Gains) For the six months ended June 30, 2025, revenue from customer contracts was RMB 514,657 thousands, all from vaccine sales, down 4.2% year-on-year; other income and gains totaled RMB 10,553 thousands, down 21.4%, mainly due to reduced deposit interest income | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Revenue from Contracts with Customers (Vaccine Sales) | 514,657 | 537,178 | | Total Other Income and Gains | 10,553 | 13,424 | - Vaccine sales revenue decreased by **4.2%** year-on-year[24](index=24&type=chunk)[25](index=25&type=chunk) - Other income and gains decreased by **21.4%**, primarily due to reduced deposit interest income[26](index=26&type=chunk)[99](index=99&type=chunk) [5. Finance Costs](index=11&type=section&id=5.%20Finance%20Costs) For the six months ended June 30, 2025, total finance costs were RMB 28,465 thousands, down 5.1% year-on-year, mainly due to reduced bank loan interest expenses | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Interest on Bank Loans | 37,874 | 40,700 | | Interest on Lease Liabilities | 399 | 988 | | Less: Interest Capitalized | (9,808) | (11,690) | | Total Finance Costs | 28,465 | 29,998 | - Finance costs decreased by **5.1%** year-on-year, primarily due to reduced interest expenses on bank loans[27](index=27&type=chunk)[105](index=105&type=chunk) [6. Loss Before Tax](index=12&type=section&id=6.%20Loss%20Before%20Tax) For the six months ended June 30, 2025, loss before tax narrowed to RMB 151,657 thousands from RMB 159,310 thousands, influenced by increased inventory write-downs and reduced interest income | Impact Factor | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Cost of Inventories Sold | 173,421 | 148,888 | | Net Exchange Differences | (625) | 154 | | Impairment Provision for Trade and Bills Receivables | 7,644 | 3,857 | | Write-down of Inventories to Net Realizable Value | 40,433 | 3,063 | | Loss on Disposal of Property, Plant and Equipment | 160 | 47 | | Interest Income | (2,314) | (4,356) | - Write-down of inventories to net realizable value significantly increased to **RMB 40,433 thousands** (2024: **RMB 3,063 thousands**)[28](index=28&type=chunk) [7. Income Tax Credit](index=12&type=section&id=7.%20Income%20Tax%20Credit) For the six months ended June 30, 2025, the company received an income tax credit of RMB 15,663 thousands, up 11.4% year-on-year, mainly due to certain subsidiaries enjoying a 15% high-tech enterprise preferential tax rate | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Current Income Tax | 4,719 | 6,586 | | Deferred | (20,382) | (20,632) | | Tax Credit for the Period | (15,663) | (14,046) | - Several subsidiaries, including Aimei Action, Aimei Chengxin, Aimei Rongyu, Aimei Jianchi, Aimei Tanxuezhe, and Zhuhai Lifanda, enjoy a **15%** preferential corporate income tax rate[29](index=29&type=chunk)[30](index=30&type=chunk)[31](index=31&type=chunk) - Income tax credit increased by **11.4%**, primarily due to an increase in loss before tax for a subsidiary[106](index=106&type=chunk) [8. Dividends](index=13&type=section&id=8.%20Dividends) The Board did not recommend payment of any dividends for the six months ended June 30, 2025, consistent with the prior year period - For the six months ended June 30, 2025, the Board did not recommend the payment of any dividends (2024: nil)[33](index=33&type=chunk) [9. Loss Per Share Attributable to Owners of the Parent](index=13&type=section&id=9.%20Loss%20Per%20Share%20Attributable%20to%20Owners%20of%20the%20Parent) For the six months ended June 30, 2025, both basic and diluted loss per share attributable to owners of the parent were RMB 0.11, consistent with the prior year period | Metric | 2025 (RMB) | 2024 (RMB) | | :--- | :--- | :--- | | Basic Loss Per Share | (0.11) | (0.11) | | Diluted Loss Per Share | (0.11) | (0.11) | - The weighted average number of ordinary shares outstanding used to calculate basic and diluted loss per share increased from **1,211,062,599** in 2024 to **1,221,081,936** in 2025[34](index=34&type=chunk)[36](index=36&type=chunk) - Diluted loss per share is equal to basic loss per share as there were no potential ordinary shares outstanding during the period[36](index=36&type=chunk) [10. Property, Plant and Equipment](index=14&type=section&id=10.%20Property%2C%20Plant%20and%20Equipment) As of June 30, 2025, the Group's property, plant, and equipment had a net book value of approximately RMB 3,276,507 thousands, with some buildings mortgaged for bank loans and others lacking ownership certificates; asset acquisition costs for the period were RMB 55,276 thousands - As of June 30, 2025, buildings with a net book value of approximately **RMB 240,724 thousands** were pledged as collateral for bank borrowings[37](index=37&type=chunk) - As of June 30, 2025, buildings with a total net book value of approximately **RMB 283,288 thousands** had not yet obtained property ownership certificates[37](index=37&type=chunk) - The cost of assets acquired during the period was **RMB 55,276 thousands**, a year-on-year decrease of **16.5%**[37](index=37&type=chunk) [11. Trade and Bills Receivables](index=15&type=section&id=11.%20Trade%20and%20Bills%20Receivables) As of June 30, 2025, total trade and bills receivables were RMB 1,164,972 thousands, up 3.7% from year-end 2024, mainly due to lower collections in H1; trade receivables have a credit period of two to six months, with strict control over overdue balances | Metric | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Trade Receivables | 1,223,370 | 1,173,906 | | Bills Receivables | 399 | 1,000 | | Impairment | (58,797) | (51,153) | | Total | 1,164,972 | 1,123,753 | - Trade and bills receivables increased by **3.7%**, primarily due to lower collections in the first half compared to the second half[38](index=38&type=chunk)[111](index=111&type=chunk) - Trade receivables typically have a credit period of two to six months, and the Group maintains strict control over credit risk[38](index=38&type=chunk) [12. Trade and Bills Payables](index=16&type=section&id=12.%20Trade%20and%20Bills%20Payables) As of June 30, 2025, total trade and bills payables were RMB 94,264 thousands, a significant 85.2% increase from year-end 2024, driven by trade payables and new bills payables; trade payables are typically settled within 30 to 90 days | Metric | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Trade Payables | 64,264 | 50,894 | | Bills Payables | 30,000 | – | | Total | 94,264 | 50,894 | - Trade and bills payables significantly increased by **85.2%**, including new bills payables of **RMB 30,000 thousands**[41](index=41&type=chunk) - Trade payables are non-interest-bearing and typically settled within **30 to 90 days**[41](index=41&type=chunk) [Management Discussion and Analysis](index=17&type=section&id=Management%20Discussion%20and%20Analysis) This section provides management's perspective on the company's financial performance, operational results, and future outlook [Business Overview and Outlook](index=17&type=section&id=Business%20Overview%20and%20Outlook) Aimei Vaccine is a leading Chinese vaccine company with a full R&D to commercialization value chain, five technology platforms, and four licensed manufacturers, commercializing 8 vaccines, developing 20, and expanding globally - The company possesses five human vaccine technology platforms: bacterial, viral, genetic engineering, combination vaccines, and mRNA[42](index=42&type=chunk) - It owns four licensed vaccine manufacturing enterprises (Aimei Rongyu, Aimei Jianchi, Aimei Action, Aimei Chengxin) and three vaccine research institutes[42](index=42&type=chunk) - Eight vaccine products targeting six diseases have been commercialized, with sales covering **31** provinces, municipalities, and autonomous regions in China, reaching over **2,000** county-level CDCs[42](index=42&type=chunk)[45](index=45&type=chunk) - The company has **20** vaccine products in development, covering **12** disease areas, with the **13-valent pneumococcal conjugate vaccine** and **serum-free rabies vaccine** having applied for marketing authorization[43](index=43&type=chunk)[44](index=44&type=chunk) - In the first half of 2025, the **quadrivalent meningococcal polysaccharide vaccine** entered the African market, and the **rabies vaccine** debuted in the Central American market[45](index=45&type=chunk) [Our Products and R&D Pipeline](index=19&type=section&id=Our%20Products%20and%20R%26D%20Pipeline) Aimei Vaccine is a key player in China's vaccine industry, with 8 commercialized and 20 pipeline vaccines across 12 disease areas, rapidly advancing core products to market registration or late-stage clinical trials, and actively developing innovative platforms like mRNA [Our Vaccine Products](index=20&type=section&id=Our%20Vaccine%20Products) This section highlights the company's commercialized vaccine portfolio, detailing key features and market positioning of each product - Recombinant Hepatitis B Vaccine (Hansenula polymorpha): The first and only domestic producer using Hansenula polymorpha for stable batch release, featuring patented technology; the **10μg** dose is the market's only yeast-derived HBV vaccine for all ages, and the **20μg** dose is the only **0.5ml** small-volume product in China[51](index=51&type=chunk)[52](index=52&type=chunk)[54](index=54&type=chunk) - Freeze-dried Human Rabies Vaccine (Vero cell): The second-largest market supplier, maintaining a **100%** batch release pass rate for **18 years**, with future plans for serum-free, high-titer human diploid, and mRNA rabies vaccine iterations[55](index=55&type=chunk)[56](index=56&type=chunk) - Inactivated Hepatitis A Vaccine (Human Diploid Cell): Two specifications developed, with pre-filled syringe production resumed in **2022** and GMP compliance inspection passed[57](index=57&type=chunk) - Meningococcal Polysaccharide Vaccine (Groups A, C, Y, and W135) (MPSV4): Launched in **2020**, exceeding national standards on key quality indicators, free of antibiotics or preservatives, with a **three-year** shelf life, and a quadrivalent conjugate meningococcal vaccine (MCV4) under development[58](index=58&type=chunk) [Our Pipeline Vaccines](index=22&type=section&id=Our%20Pipeline%20Vaccines) This section details the company's extensive R&D pipeline, showcasing various vaccine candidates across different technology platforms and clinical stages | Technology Platform | Indication | Pipeline Vaccine | Self-developed/Co-developed | Pre-clinical | CTA | Phase I | Phase II | Phase III | Drug Registration Certificate Application & Approval | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Bacterial Vaccines | Pneumococcal Disease | 13-valent Pneumococcal Conjugate Vaccine (PCV13) | Self-developed | | | | | | Marketing Authorization Application Submitted | | | | 20-valent Pneumococcal Conjugate Vaccine (PCV20) | Self-developed | | | | | | Clinical Trial Application Submitted | | | | 24-valent Pneumococcal Conjugate Vaccine (PCV24) | Self-developed | CTA Submission Planned for 2026 | | | | | | | | | 23-valent Pneumococcal Polysaccharide Vaccine (PPSV23) | Self-developed | Pre-application for Marketing Authorization Planned for 2025 | | | | | | | | Meningococcal Disease | Quadrivalent Conjugate Meningococcal Vaccine (MCV4) | Self-developed | | | | Phase II Clinical Trial Ongoing | | | | | | Hexavalent Meningococcal Vaccine | Self-developed | Pre-clinical Research | | | | | | | | Group B Streptococcus Disease | Hexavalent Group B Streptococcus Polysaccharide Conjugate Vaccine | Self-developed | CTA Submission Planned for 2026 | | | | | | | | Tetanus | Adsorbed Tetanus Vaccine | Self-developed | | Clinical Approval Obtained | | | | | | | Hib Infection | Haemophilus influenzae type b (Hib) Conjugate Vaccine | Self-developed | | Clinical Approval Obtained | | | | | | | Hand-Foot-and-Mouth Disease | EV71-CA16 Bivalent Hand-Foot-and-Mouth Disease Vaccine (Human Diploid Cell) | Self-developed | | | Phase I Planned for 2025 | | | | | Viral Vaccines | Influenza | Quadrivalent MDCK Cell Influenza Virus Vaccine | Self-developed | | Clinical Approval Obtained | | | | | | | Rabies | Serum-free Iterative Rabies Vaccine | Self-developed | | | | | | Marketing Authorization Application Submitted | | | | Novel High-titer Human Diploid Rabies Vaccine | Self-developed | | | | | Phase III Clinical Trial Ongoing | | | | Rabies | mRNA Iterative Rabies Vaccine | Self-developed | Clinical Trial Application Under Review | | | | | | | | Shingles | mRNA Shingles Vaccine | Self-developed | | Clinical Approval Obtained (China & US) | | | | | | mRNA Vaccines | Respiratory Syncytial Virus Infection | mRNA Respiratory Syncytial Virus RSV Vaccine | Self-developed | | Clinical Approval Obtained (China & US) | | | | | | | Influenza | mRNA Influenza Vaccine | Self-developed | Pre-clinical Research | | | | | | | Combination Vaccines | DTP | Acellular Diphtheria, Tetanus, Pertussis, Haemophilus influenzae type b, Quadrivalent Meningococcal Conjugate (DTcP-Hib-Mcv4) Combination Vaccine | Self-developed | Pre-clinical Research | | | | | | | | | Adsorbed Acellular Diphtheria, Tetanus, Pertussis (Component) Combination Vaccine (DTcP) | Self-developed | CTA Submission Planned for 2026 | | | | | | | Genetic Engineering Vaccines | Meningococcal Disease | Recombinant Meningococcal Group B Vaccine | Self-developed | Pre-clinical Research | | | | | | - Iterative upgrade of pneumococcal vaccine products: **13-valent pneumococcal conjugate vaccine (PCV13)** has submitted a marketing authorization application and completed on-site verification; **23-valent pneumococcal polysaccharide vaccine** has completed Phase III clinical serological testing; **20-valent pneumococcal conjugate vaccine** has submitted a clinical trial application; and **24-valent pneumococcal conjugate vaccine** has completed pre-clinical research[60](index=60&type=chunk)[61](index=61&type=chunk)[62](index=62&type=chunk)[63](index=63&type=chunk)[64](index=64&type=chunk) - Iterative upgrade of rabies vaccine products: **Serum-free iterative rabies vaccine** has submitted a marketing authorization application; **novel high-titer human diploid rabies vaccine** is undergoing Phase III clinical trials; and **mRNA iterative rabies vaccine** is under development[65](index=65&type=chunk)[66](index=66&type=chunk)[67](index=67&type=chunk)[68](index=68&type=chunk)[69](index=69&type=chunk) - Iterative upgrade of mRNA vaccine technology platform and products: **mRNA iterative rabies vaccine**, **mRNA RSV vaccine**, and **mRNA shingles vaccine** have all made significant progress, with **mRNA RSV** and **shingles vaccines** having obtained clinical trial approvals in both China and the US[70](index=70&type=chunk)[71](index=71&type=chunk)[72](index=72&type=chunk) - Progress on other pipeline vaccine products: **Quadrivalent conjugate meningococcal vaccine (MCV4)** has completed full vaccination for all subjects in Phase II clinical trials, and the **EV71-CA16 bivalent hand-foot-and-mouth disease vaccine** has been approved for Phase I clinical trials[73](index=73&type=chunk)[74](index=74&type=chunk) - Vaccine development platform technologies and in-house R&D team: Possesses five validated human vaccine platform technologies, including innovative technologies like **mRNA** and **genetic engineering**, and is exploring **AI-assisted vaccine R&D**[75](index=75&type=chunk)[76](index=76&type=chunk) [Production](index=28&type=section&id=Production) All Aimei Vaccine products are self-produced by its four licensed factories, all GMP-certified by the NMPA, equipped with advanced machinery to ensure stable, high-quality vaccine supply - All vaccine products are self-produced by the company's four licensed factories and have passed NMPA's GMP inspections[77](index=77&type=chunk) Production Facilities | Name | Location | Building Area (sqm) | Production Capacity (million doses) | Responsible Products | Production Lines | | :--- | :--- | :--- | :--- | :--- | :--- | | Aimei Rongyu Licensed Factory | Ningbo, Zhejiang Province | 25,318 | 25.0 | Freeze-dried Human Rabies Vaccine (Vero cell) | Two | | Aimei Chengxin Licensed Factory | Dalian, Liaoning Province | 11,877 | 45.0 | Recombinant Hepatitis B Vaccine (Hansenula polymorpha) | One | | Aimei Action Licensed Factory | Taizhou, Jiangsu Province | 18,711 | 5.3 | Inactivated Hepatitis A Vaccine | One | | Aimei Jianchi Licensed Factory | Ningbo, Zhejiang Province | 72,313 | 16.0 | Inactivated Hemorrhagic Fever with Renal Syndrome Vaccine, Mumps Vaccine, and MPSV4 | Three | [Industry Overview](index=29&type=section&id=Industry%20Overview) China's vaccine market entered a new phase post-Vaccine Administration Law, reaching over RMB 101.77 billion (excluding COVID-19 vaccines) in 2024 with a 9.8% CAGR, facing economic downturns, anti-corruption, and declining birth rates, yet innovative vaccines offer significant advantages and pricing gaps with Western markets present strategic upgrade opportunities - China's vaccine market size (excluding COVID-19 vaccines) exceeded **RMB 101.77 billion** in 2024, with a compound annual growth rate of **9.8%**[78](index=78&type=chunk) - The market faces multiple challenges, including macroeconomic downturns, anti-corruption in healthcare, and declining birth rates[78](index=78&type=chunk) - Innovative vaccine products hold significant advantages, and the pricing gap between China and Europe/US for innovative products presents strategic opportunities for product iteration and upgrades[79](index=79&type=chunk) - Hepatitis B vaccine immunization will shift towards the entire population, with the adult hepatitis B market expected to become a new growth opportunity[81](index=81&type=chunk) - mRNA technology, due to its rapid R&D, high efficacy, and safety advantages, has become a key focus for global vaccine manufacturers, with broad market prospects[82](index=82&type=chunk) - China's pneumococcal vaccine market is projected to reach **RMB 24 billion** by 2025, with high-valent PCV vaccines being the future development trend[83](index=83&type=chunk) - China's rabies vaccine market is expected to grow to **RMB 22 billion** by 2030, with serum-free and mRNA rabies vaccines driving market growth[84](index=84&type=chunk) - China's RSV vaccine market is projected to exceed **RMB 15.4 billion** by 2030, and the shingles vaccine market is expected to reach nearly **RMB 20 billion** by 2030[85](index=85&type=chunk)[86](index=86&type=chunk) [Prospects and Outlook](index=33&type=section&id=Prospects%20and%20Outlook) Aimei Vaccine's R&D pipeline aligns with national policies, with five validated technology platforms and rapid product advancement; the company has established an international business unit, expanding into African and Central American markets with MPSV4 and rabies vaccines, securing exclusive agency agreements, and plans to accelerate commercialization of key products, deepen Belt and Road cooperation, and leverage mRNA technology to overcome international vaccine R&D barriers - The R&D pipeline aligns with national policies, with five validated technology platforms and rapid advancement of related vaccine products[88](index=88&type=chunk) - An international business department has been established to accelerate global expansion, with vaccine products now entering the global market[89](index=89&type=chunk) - In the first half of 2025, the **quadrivalent meningococcal polysaccharide vaccine** entered the African market, and the **rabies vaccine** debuted in the Central American market[89](index=89&type=chunk) - International commercialization is being prepared for the upcoming **13-valent pneumococcal conjugate vaccine** and **serum-free iterative rabies vaccine**, with exclusive agency agreements reached with several countries in West Asia and Southeast Asia[90](index=90&type=chunk) - Pipeline products including the **13-valent pneumococcal conjugate vaccine**, **quadrivalent conjugate meningococcal vaccine**, **RSV vaccine**, and **shingles vaccine** are all high-priority WHO-certified or internationally scarce varieties[91](index=91&type=chunk) - GMP workshops for iterative pneumococcal and rabies vaccine series have been built and meet international standards, preparing for post-launch global market entry[93](index=93&type=chunk) - In the second half, the company will accelerate the commercialization of the **13-valent pneumococcal conjugate vaccine**, **serum-free iterative rabies vaccine**, and **23-valent pneumococcal polysaccharide vaccine**, deepen 'Belt and Road' cooperation, and leverage its proprietary **mRNA technology platform** to break through R&D barriers for internationally scarce vaccines[94](index=94&type=chunk) [Financial Review](index=35&type=section&id=Financial%20Review) This section provides a detailed analysis of the company's financial performance, including revenue, costs, and key financial ratios [Overview](index=35&type=section&id=Overview) This overview states that the financial review is based on the financial information and notes contained in this announcement and should be read in conjunction - The financial review is based on the financial information and its notes presented in other sections of this announcement[95](index=95&type=chunk) [Revenue](index=35&type=section&id=Revenue) For H1 2025, the company's main business revenue was RMB 514.7 million, down 4.2% year-on-year, primarily due to decreased rabies vaccine revenue, with Class II vaccine sales declining and Class I sales slightly increasing | Vaccine Product Sales Revenue | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Class I Vaccine Sales Revenue | 55,876 | 54,100 | | Class II Vaccine Sales Revenue | 458,781 | 483,078 | | Total | 514,657 | 537,178 | - Main business revenue decreased by **4.2%** year-on-year to **RMB 514.7 million**, primarily due to a decline in rabies vaccine revenue[96](index=96&type=chunk) [Cost of Sales](index=35&type=section&id=Cost%20of%20Sales) For H1 2025, cost of sales was RMB 173.4 million, up 16.5% year-on-year, mainly due to inventory impairment losses - Cost of sales increased by **16.5%** year-on-year to **RMB 173.4 million**[97](index=97&type=chunk) - The primary reason was the provision for inventory impairment losses in the first half of 2025[97](index=97&type=chunk) [Gross Profit and Gross Margin](index=36&type=section&id=Gross%20Profit%20and%20Gross%20Margin) For H1 2025, gross profit was RMB 341.2 million, down 12.1% year-on-year; gross margin was 66.3%, a 6.0 percentage point decrease, mainly due to inventory impairment losses - Gross profit decreased by **12.1%** year-on-year to **RMB 341.2 million**[98](index=98&type=chunk) - Gross margin decreased by **6.0** percentage points year-on-year to **66.3%**[98](index=98&type=chunk) - The main reason for the decline in gross margin was the provision for inventory impairment losses; excluding this factor, gross margin slightly increased[98](index=98&type=chunk) [Other Income and Gains](index=36&type=section&id=Other%20Income%20and%20Gains) For H1 2025, other income and gains were RMB 10.5 million, down 21.4% year-on-year, primarily due to reduced deposit interest income - Other income and gains decreased by **21.4%** year-on-year to **RMB 10.5 million**[99](index=99&type=chunk) - The primary reason was a decrease in deposit interest income in the first half of 2025[99](index=99&type=chunk) [Research and Development Expenses](index=36&type=section&id=Research%20and%20Development%20Expenses) For H1 2025, R&D expenses were RMB 107.0 million, a significant 37.1% year-on-year decrease, mainly due to the absence of overseas clinical trial expenses present in H1 2024 | Nature | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Staff Costs | 36,966 | 46,198 | | Research Material Costs | 28,994 | 20,886 | | Professional Service Fees | 9,972 | 64,131 | | Depreciation and Amortization | 16,531 | 18,145 | | Utilities Costs | 9,793 | 13,866 | | Others | 4,706 | 6,884 | | Total | 106,962 | 170,110 | - Research and development expenses significantly decreased by **37.1%** year-on-year to **RMB 107.0 million**[101](index=101&type=chunk) - The primary reason was the absence of overseas clinical trial-related expenses in the first half of 2025, which were present in the first half of 2024[101](index=101&type=chunk) [Selling and Distribution Expenses](index=37&type=section&id=Selling%20and%20Distribution%20Expenses) For H1 2025, selling and distribution expenses were RMB 232.1 million, largely flat year-on-year, with a slight decrease of 0.1% - Selling and distribution expenses decreased by **0.1%** year-on-year to **RMB 232.1 million**, largely consistent with the prior year period[102](index=102&type=chunk) [Administrative Expenses](index=38&type=section&id=Administrative%20Expenses) For H1 2025, administrative expenses were RMB 126.2 million, up 1.6% year-on-year, primarily due to a slight increase in depreciation and amortization expenses - Administrative expenses increased by **1.6%** year-on-year to **RMB 126.2 million**[103](index=103&type=chunk) - The primary reason was a slight increase in depreciation and amortization expenses in the first half of 2025[103](index=103&type=chunk) [Impairment Losses on Financial Assets](index=38&type=section&id=Impairment%20Losses%20on%20Financial%20Assets) For H1 2025, impairment losses on financial assets were RMB 7.6 million, an increase of RMB 3.7 million year-on-year, mainly due to increased bad debt provisions for accounts receivable - Impairment losses on financial assets increased by **RMB 3.7 million** year-on-year to **RMB 7.6 million**[104](index=104&type=chunk) - The primary reason was an increase in the provision for doubtful debts on accounts receivable[104](index=104&type=chunk) [Finance Costs](index=38&type=section&id=Finance%20Costs) For H1 2025, finance costs were RMB 28.5 million, down 5.1% year-on-year, primarily due to reduced bank loan interest expenses - Finance costs decreased by **5.1%** year-on-year to **RMB 28.5 million**[105](index=105&type=chunk) - The primary reason was a decrease in bank loan interest expenses in the first half of 2025[105](index=105&type=chunk) [Income Tax Expense](index=38&type=section&id=Income%20Tax%20Expense) For H1 2025, the company received an income tax credit of RMB 15.6 million, up 11.4% year-on-year, primarily due to an increased loss before tax for a subsidiary - Income tax credit increased by **11.4%** year-on-year to **RMB 15.6 million**[106](index=106&type=chunk) - The primary reason was an increase in loss before tax for a subsidiary[106](index=106&type=chunk) [Loss for the Period](index=38&type=section&id=Loss%20for%20the%20Period) For H1 2025, the company's loss was RMB 136.0 million, a 6.4% year-on-year reduction, primarily due to decreased R&D expenses - Loss for the period decreased by **6.4%** year-on-year to **RMB 136.0 million**[107](index=107&type=chunk) - The decrease in loss was primarily due to a year-on-year reduction in research and development expenses in the first half of 2025[107](index=107&type=chunk) [Cash and Cash Equivalents and Time Deposits](index=39&type=section&id=Cash%20and%20Cash%20Equivalents%20and%20Time%20Deposits) As of June 30, 2025, cash and cash equivalents plus time deposits totaled RMB 401.9 million, down 32.4% from year-end 2024, mainly due to lower H1 collections and funds used for R&D and industrialization project final payments - Total cash and cash equivalents and time deposits decreased by **32.4%** year-on-year to **RMB 401.9 million**[108](index=108&type=chunk) - Reasons for the decrease include lower collections in the first half compared to the second half, and funds being used for ongoing R&D investments and final payments for industrialization projects[108](index=108&type=chunk) [Net Current Liabilities](index=39&type=section&id=Net%20Current%20Liabilities) As of June 30, 2025, the company's net current liabilities were RMB 812.3 million, an increase of RMB 109.4 million from year-end 2024, mainly due to ongoing development expenditures and deferred development costs for multiple pipeline products; the company has secured sufficient working capital through renewed bank borrowings and unutilized bank facilities - Net current liabilities increased by **RMB 109.4 million** to **RMB 812.3 million**[109](index=109&type=chunk) - The primary reasons are ongoing development expenditures for multiple pipeline products, as well as continuous investment in deferred development costs for the **serum-free iterative rabies vaccine**, **13-valent pneumococcal conjugate vaccine**, and **23-valent pneumococcal polysaccharide vaccine**[109](index=109&type=chunk) - The company has renewed bank borrowings of **RMB 128,000 thousands** and has unutilized bank facilities of **RMB 566,000 thousands**, ensuring sufficient working capital[109](index=109&type=chunk) [Inventories](index=39&type=section&id=Inventories) As of June 30, 2025, inventory balance was RMB 433.9 million, down 6.2% from year-end 2024, primarily due to the company's inventory management efforts - Inventory balance decreased by **6.2%** year-on-year to **RMB 433.9 million**[110](index=110&type=chunk) - The primary reason was the company's inventory management, leading to a decrease in stock[110](index=110&type=chunk) [Trade Receivables](index=39&type=section&id=Trade%20Receivables) As of June 30, 2025, the book value of trade receivables was RMB 1,165.0 million, up 3.7% from year-end 2024, primarily due to lower collections in the first half compared to the second half - The book value of trade receivables increased by **3.7%** year-on-year to **RMB 1,165.0 million**[111](index=111&type=chunk) - The primary reason was lower collections in the first half compared to the second half, leading to an increase in accounts receivable mid-year[111](index=111&type=chunk) [Capital Expenditures](index=40&type=section&id=Capital%20Expenditures) For H1 2025, capital expenditures were RMB 102.5 million, down 14.2% year-on-year, primarily for upgrading production, R&D, and quality equipment, payments for vaccine industrialization projects, and deferred development costs for pipeline vaccines; the decrease is mainly due to the 13-valent pneumococcal conjugate vaccine and serum-free iterative rabies vaccine entering the marketing review stage, reducing related investments - Capital expenditures decreased by **14.2%** year-on-year to **RMB 102.5 million**[112](index=112&type=chunk) - Primarily used for upgrading production, R&D, and quality equipment, vaccine industrialization projects, and deferred development costs for pipeline vaccines[112](index=112&type=chunk) - The decrease is mainly due to the **13-valent pneumococcal conjugate vaccine** and **serum-free iterative rabies vaccine** having entered the marketing review stage, leading to reduced related investments[112](index=112&type=chunk) [Borrowings and Gearing Ratio](index=40&type=section&id=Borrowings%20and%20Gearing%20Ratio) As of June 30, 2025, total financial liabilities were RMB 1,778.5 million, down 3.4% year-on-year, mainly due to reduced bank loan balances; the gearing ratio was 50.2%, a 0.8 percentage point decrease - Total financial liabilities decreased by **3.4%** year-on-year to **RMB 1,778.5 million**[113](index=113&type=chunk) - The gearing ratio decreased by **0.8** percentage points year-on-year to **50.2%**[113](index=113&type=chunk) - The primary reason was a decrease in bank loan balances in the first half of 2025[113](index=113&type=chunk) [Pledged Assets](index=40&type=section&id=Pledged%20Assets) As of June 30, 2025, some of the Group's bank loans are secured by pledges of buildings (net book value approximately RMB 240.7 million), leased land (net book value approximately RMB 69.9 million), and guarantees provided by the company and its subsidiaries - Some bank loans are secured by pledges of buildings (net book value approximately **RMB 240.7 million**) and leased land (net book value approximately **RMB 69.9 million**)抵押担保[114](index=114&type=chunk) - The company and its subsidiaries also provide guarantees[114](index=114&type=chunk) [Foreign Exchange Risk](index=40&type=section&id=Foreign%20Exchange%20Risk) The Group's vast majority of business and all bank loans are transacted in RMB, thus posing no significant foreign exchange fluctuation risk, and currently, there is no hedging policy - The Group's vast majority of business and all bank loans are transacted in RMB, posing no significant foreign exchange fluctuation risk[115](index=115&type=chunk) - Currently, there is no hedging policy, and no hedging transactions have been undertaken[115](index=115&type=chunk) [Contingent Liabilities](index=41&type=section&id=Contingent%20Liabilities) As of June 30, 2025, the Group had no contingent liabilities with a material impact on its financial position or operating results - As of June 30, 2025, the Group had no material contingent liabilities[116](index=116&type=chunk) [Corporate Governance and Other Information](index=41&type=section&id=Corporate%20Governance%20and%20Other%20Information) This section covers the company's governance practices, compliance with codes, and other relevant corporate disclosures [Dissolution of Supervisory Committee and Retirement of Supervisors](index=41&type=section&id=Dissolution%20of%20Supervisory%20Committee%20and%20Retirement%20of%20Supervisors) The Supervisory Committee was dissolved on May 20, 2025, with all supervisors retiring from that date - The Supervisory Committee was dissolved, and all supervisors retired on May 20, 2025[117](index=117&type=chunk) [Standard Code for Securities Transactions by Directors](index=41&type=section&id=Standard%20Code%20for%20Securities%20Transactions%20by%20Directors) The company has established a code of conduct for directors' securities dealings, and all directors confirmed compliance during the reporting period - The company has adopted a code of conduct for directors' securities transactions, and all directors confirmed compliance[118](index=118&type=chunk) [Corporate Governance Code](index=41&type=section&id=Corporate%20Governance%20Code) The company complied with the Corporate Governance Code during the period, but the Chairman and CEO roles are combined, an arrangement the Board believes aids strategy execution and information flow, subject to timely review - The company complied with the Corporate Governance Code, but the roles of Chairman and Chief Executive Officer are held by Mr. Zhou Yan, which does not comply with code provision C.2.1[119](index=119&type=chunk)[120](index=120&type=chunk) - The Board believes this arrangement facilitates strategic execution and information flow between management and the Board, and will review it at an appropriate time[120](index=120&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=42&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company%27s%20Listed%20Securities) For the six months ended June 30, 2025, neither the company nor its subsidiaries purchased, sold, or redeemed any listed securities, and the company held no treasury shares - For the six months ended June 30, 2025, neither the company nor its subsidiaries purchased, sold, or redeemed any listed securities[121](index=121&type=chunk) - As of June 30, 2025, the company held no treasury shares[121](index=121&type=chunk) [Employees and Remuneration Policy](index=42&type=section&id=Employees%20and%20Remuneration%20Policy) As of June 30, 2025, the company had approximately 1,493 employees, with total employee benefit expenses of RMB 166.9 million; remuneration policy is based on performance, skills, qualifications, experience, and industry practice, including an employee share incentive scheme - As of June 30, 2025, the company had approximately **1,493** employees (2024: **1,557** employees)[122](index=122&type=chunk) - Total employee benefit expenses for the first half of 2025 were **RMB 166.9 million** (2024: **RMB 180.4 million**)[122](index=122&type=chunk) - The remuneration policy is based on employee performance, skills, qualifications, experience, and industry practice, and includes an employee share incentive scheme[122](index=122&type=chunk)[123](index=123&type=chunk) [Material Investments, Acquisitions and Disposals](index=42&type=section&id=Material%20Investments%2C%20Acquisitions%20and%20Disposals) For the six months ended June 30, 2025, the company had no material investments, significant acquisitions, or disposals of subsidiaries, associates, or joint ventures - For the six months ended June 30, 2025, the company had no material investments, significant acquisitions, or disposals[124](index=124&type=chunk) [Future Plans for Material Investments and Capital Assets](index=42&type=section&id=Future%20Plans%20for%20Material%20Investments%20and%20Capital%20Assets) As of the date of this announcement, the Group has no future plans involving material investments or capital assets - As of the date of this announcement, the Group has no future plans for material investments or capital assets[125](index=125&type=chunk) [Placement of New H Shares Under General Mandate and Use of Net Proceeds from Placement](index=43&type=section&id=Placement%20of%20New%20H%20Shares%20Under%20General%20Mandate%20and%20Use%20of%20Net%20Proceeds%20from%20Placement) The company completed an H-share placement in February 2025, issuing 15,500,000 shares with net proceeds of approximately HKD 75.0 million, primarily allocated to R&D (60%), new product marketing (20%), and working capital (20%), with all remaining funds expected to be utilized by June 30, 2026 - On February 28, 2025, the company entered into an agreement with placing agents to place **15,500,000 H shares**, with the placement completed on March 6, 2025[126](index=126&type=chunk) - The net proceeds from the placement were approximately **HKD 75.0 million** (approximately **RMB 71,638 thousands**)[127](index=127&type=chunk) Use of Net Proceeds from Placement | Intended Use | Approximate Percentage of Total Net Proceeds | Net Proceeds (HKD millions) | Amount Utilized as of June 30, 2025 (HKD millions) | Amount Unutilized as of June 30, 2025 (HKD millions) | | :--- | :--- | :--- | :--- | :--- | | Accelerate R&D of Product Pipeline | 60.0% | 45.0 | 26.0 | 19.0 | | Marketing and Commercialization of New Products | 20.0% | 15.0 | 6.7 | 8.3 | | Working Capital and Other Corporate Purposes | 20.0% | 15.0 | 14.6 | 0.4 | | **Total** | **100%** | **75.0** | **47.3** | **27.7** | - All remaining unutilized net proceeds are expected to be fully utilized by June 30, 2026[128](index=128&type=chunk) [Interim Dividend](index=44&type=section&id=Interim%20Dividend) The Board did not declare any interim dividend for the six months ended June 30, 2025 - The Board did not declare any interim dividend for the six months ended June 30, 2025[129](index=129&type=chunk) [Audit Committee](index=44&type=section&id=Audit%20Committee) The Audit Committee comprises three independent non-executive directors, with Professor Ker Wei PEI as Chairman, and has reviewed the Group's unaudited interim condensed consolidated financial information for the six months ended June 30, 2025 - The Audit Committee consists of three independent non-executive directors, with Professor Ker Wei PEI serving as Chairman[130](index=130&type=chunk) - The Committee has reviewed the Group's unaudited interim condensed consolidated financial information for the six months ended June 30, 2025[130](index=130&type=chunk) [Material Events After Reporting Period](index=44&type=section&id=Material%20Events%20After%20Reporting%20Period) As of the date of this announcement, no material events have occurred after the reporting period - As of the date of this announcement, no material events have occurred after the reporting period[131](index=131&type=chunk) [Publication of Interim Results Announcement and Interim Report](index=44&type=section&id=Publication%20of%20Interim%20Results%20Announcement%20and%20Interim%20Report) This results announcement has been published on the HKEX and company websites, and the interim report will be published and dispatched to shareholders in due course - The results announcement has been published on the HKEX website and the company's website[132](index=132&type=chunk) - The interim report will be published and dispatched to shareholders in due course[132](index=132&type=chunk) [Definitions](index=45&type=section&id=Definitions) This section provides definitions for key terms and abbreviations used throughout the report to ensure accurate understanding - This section provides definitions for key terms and abbreviations used throughout the report to ensure accurate understanding of its content[133](index=133&type=chunk)[134](index=134&type=chunk)[135](index=135&type=chunk)[136](index=136&type=chunk)[137](index=137&type=chunk)[140](index=140&type=chunk)

[Company Information and Announcement Statement](index=1&type=section&id=Company%20Information%20and%20Announcement%20Statement) This section provides an overview of the company's interim results announcement, including its name, stock code, and review status [Company Overview](index=1&type=section&id=Company%20Overview) Guangdong-Hong Kong Greater Bay Area Holdings Limited (Stock Code: 1396) announced its unaudited condensed consolidated interim results for the six months ended June 30, 2025, which were reviewed by the Board Audit Committee and external auditor - Company Name: GUANGDONG – HONG KONG GREATER BAY AREA HOLDINGS LIMITED (粵港灣控股有限公司)[3](index=3&type=chunk) - Stock Code: **1396**[3](index=3&type=chunk) - Announcement Type: Interim Results Announcement for the six months ended June 30, 2025[3](index=3&type=chunk) - Review Status: The unaudited condensed consolidated interim results were reviewed by the Board Audit Committee and external auditor[4](index=4&type=chunk) [Financial Statements](index=2&type=section&id=Financial%20Statements) This section presents the Group's condensed consolidated financial statements, highlighting significant changes in profit/loss, financial position, and key financial metrics [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=2&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For the six months ended June 30, 2025, the Group achieved a profit of **RMB 951,678 thousand** for the period, a significant turnaround from a loss of **RMB 1,027,825 thousand** in the prior year, with basic earnings per share of **RMB 119.0 cents** compared to a loss of **RMB 218.6 cents** previously Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (For the six months ended June 30) | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Revenue | 228,252 | 861,703 | | Cost of sales | (499,082) | (1,225,972) | | Negative gross profit | (270,830) | (364,269) | | Other net income | 1,412,451 | 1,759 | | Selling and distribution costs | (3,311) | (38,484) | | Administrative expenses | (34,891) | (44,465) | | Impairment losses on financial assets measured at amortized cost | (16,447) | (477,461) | | Fair value loss on investment properties | (19,100) | (41,785) | | Profit/(Loss) before tax | 1,044,870 | (1,027,236) | | Income tax expense | (93,192) | (589) | | Profit/(Loss) for the period | 951,678 | (1,027,825) | | Profit/(Loss) attributable to owners of the Company | 968,509 | (1,028,298) | | Profit/(Loss) attributable to non-controlling interests | (16,831) | 473 | | Basic and diluted earnings/(loss) per share (RMB cents) | 119.0 | (218.6) | - Total comprehensive income for the period was **RMB 930,136 thousand**, compared to a loss of **RMB 1,038,892 thousand** in the prior period, primarily due to exchange differences[6](index=6&type=chunk) [Condensed Consolidated Statement of Financial Position](index=4&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the Group's total assets less current liabilities decreased to **RMB 3,252,492 thousand** from **RMB 4,854,693 thousand** at December 31, 2024, while net assets significantly increased to **RMB 3,054,883 thousand**, primarily due to a substantial growth in reserves reflecting the positive impact of debt restructuring Condensed Consolidated Statement of Financial Position (As of June 30) | Indicator | 2025/06/30 (RMB thousand) | 2024/12/31 (RMB thousand) | | :--- | :--- | :--- | | **Non-current assets** | | | | Property, plant and equipment | 2,395 | 2,267 | | Investment properties | 944,700 | 1,307,232 | | Intangible assets | 2,127 | 6,506 | | Deferred tax assets | 161,507 | 315,375 | | Total non-current assets | 1,110,729 | 1,636,082 | | **Current assets** | | | | Inventories and other contract costs | 3,540,115 | 8,146,891 | | Trade and other receivables | 689,127 | 2,028,481 | | Cash and cash equivalents | 54,924 | 13,057 | | Total current assets | 4,748,967 | 11,021,786 | | **Current liabilities** | | | | Trade and other payables | 1,000,078 | 2,928,501 | | Contract liabilities | 927,029 | 3,042,758 | | Bank loans and other borrowings | 158,423 | 890,076 | | Senior notes | 113,113 | 113,584 | | Total current liabilities | 2,607,204 | 7,803,175 | | **Non-current liabilities** | | | | Bank loans and other borrowings | 153,230 | 1,470,508 | | Senior notes | – | 3,253,866 | | Total non-current liabilities | 197,609 | 4,754,486 | | **Equity** | | | | Net assets | 3,054,883 | 100,207 | | Total equity attributable to owners of the Company | 3,054,883 | 389,126 | | Non-controlling interests | – | (288,919) | | Total equity | 3,054,883 | 100,207 | - Net current assets decreased from **RMB 3,218,611 thousand** as of December 31, 2024, to **RMB 2,141,763 thousand** as of June 30, 2025[8](index=8&type=chunk) [Notes to the Financial Statements](index=6&type=section&id=Notes%20to%20the%20Financial%20Statements) This section provides detailed notes to the financial statements, covering company information, accounting policies, revenue breakdown, tax details, and specific financial instrument disclosures [Company Information and Basis of Preparation](index=6&type=section&id=Company%20Information%20and%20Basis%20of%20Preparation) This section outlines the company's basic information, the basis for financial statement preparation, and details the material uncertainties related to going concern, along with management's strategies to address them, including debt restructuring, shareholder support, and asset disposal plans - The Company was listed on the Main Board of the Hong Kong Stock Exchange on October 31, 2013, formerly known as E-House (China) Holdings Limited, and renamed Guangdong-Hong Kong Greater Bay Area Holdings Limited on July 14, 2020[9](index=9&type=chunk) - The financial statements are prepared in accordance with the Listing Rules of the Hong Kong Stock Exchange and International Accounting Standard 34, and were authorized for issue on August 27, 2025[10](index=10&type=chunk) - Material uncertainty related to going concern: As of June 30, 2025, current bank loans and other borrowings amounted to **RMB 158,423 thousand**, October 2023 Senior Notes were **RMB 113,113 thousand**, while cash and cash equivalents were only **RMB 54,924 thousand**[12](index=12&type=chunk) - Failure to repay principal and interest on certain October 2023 Senior Notes (approximately **USD 15,801,000** and **USD 6,565,000**) may lead to an event of default[12](index=12&type=chunk) - Management's countermeasures include: successfully completing the consent solicitation for the 2029 Senior Notes, waiving interest and issuing mandatory convertible bonds for redemption, significantly writing off debt, and optimizing the asset and liability structure[13](index=13&type=chunk)[14](index=14&type=chunk) - Management's countermeasures include: maintaining good relationships with banks to extend and renew loans, obtaining continuous financial support from controlling shareholders, accelerating sales of completed properties held for sale, and considering pledging properties held for sale and investment properties to obtain new financing[14](index=14&type=chunk)[16](index=16&type=chunk) [Application of Amendments to International Financial Reporting Standards](index=9&type=section&id=Application%20of%20Amendments%20to%20International%20Financial%20Reporting%20Standards) The Group first applied amendments to International Financial Reporting Standards issued by the IASB, but these amendments had no significant impact on the results and financial position for the current or prior periods - First application of amendments to International Accounting Standard 21: Lack of Exchangeability[17](index=17&type=chunk) - The new amendments had no significant impact on the preparation and presentation of these interim financial statements[17](index=17&type=chunk) [Revenue and Segment Reporting](index=9&type=section&id=Revenue%20and%20Segment%20Reporting) The Group's principal business involves the development, sale, and operation of residential properties in mainland China, with total revenue for the six months ended June 30, 2025, significantly decreasing by **73.5%** to **RMB 228,252 thousand**, primarily due to reduced property sales revenue - Principal business: Development, sale, and operation of residential properties in mainland China[18](index=18&type=chunk) - Revenue sources: Property sales revenue, property management services income, and rental income[19](index=19&type=chunk) Revenue by Major Product or Service Type (For the six months ended June 30) | Revenue Type | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Property sales | 225,185 | 845,819 | | Property management services | 1,304 | 3,509 | | Rental income | 1,763 | 12,375 | | **Total revenue** | **228,252** | **861,703** | [Components of Profit/Loss Before Tax](index=10&type=section&id=Components%20of%20Profit%2FLoss%20Before%20Tax) This section details the financial income, finance costs, depreciation, amortization, and impairment losses affecting profit/loss before tax, notably a significant year-on-year decrease in finance costs and an increase in provision for impairment of inventories Financial Income and Finance Costs (For the six months ended June 30) | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Bank interest income | (48) | (3,728) | | Interest on bank loans and other borrowings | 15,192 | 73,539 | | Interest on senior notes | 7,854 | 32,744 | | Total finance costs | 23,050 | 65,985 | | Interest expenses capitalized into properties under development | (7,854) | (65,106) | | Net exchange loss | 6,070 | 24,624 | - Bank borrowing costs were capitalized at a weighted average annual interest rate of approximately **5.45%** (2024: approximately **5.95%**)[21](index=21&type=chunk) Depreciation, Amortization, and Impairment Losses (For the six months ended June 30) | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Total depreciation and amortization | 4,068 | 2,671 | | Impairment losses on trade and other receivables | 16,447 | 477,461 | | Cost of inventories sold (property costs) | 190,308 | 1,018,139 | | Provision for impairment of inventories | 308,757 | 205,472 | | Total cost of inventories sold | 499,065 | 1,224,455 | [Income Tax](index=11&type=section&id=Income%20Tax) The Group's income tax expense for the first half of 2025 was **RMB 93,192 thousand**, primarily comprising China Land Appreciation Tax and changes in deferred tax, with China corporate income tax at **25%** and Land Appreciation Tax at a progressive rate of **30% to 60%** Income Tax in the Condensed Consolidated Statement of Profit or Loss (For the six months ended June 30) | Tax Type | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | China corporate income tax | 1,430 | 330 | | China Land Appreciation Tax | 10,613 | 87,127 | | Deferred tax (temporary differences) | 81,149 | (86,868) | | **Total income tax expense** | **93,192** | **589** | - Chinese subsidiaries are subject to corporate income tax at a statutory rate of **25%** on their assessable profits[24](index=24&type=chunk) - China Land Appreciation Tax is levied at progressive rates from **30% to 60%** on the appreciation of land value, with some subsidiaries assessed at **6% to 8%** of revenue[25](index=25&type=chunk) - The Group is not subject to income tax in the Cayman Islands and no provision for profits tax is required in Hong Kong[27](index=27&type=chunk) [Earnings/Loss Per Share](index=12&type=section&id=Earnings%2FLoss%20Per%20Share) For the six months ended June 30, 2025, profit attributable to owners of the Company was **RMB 968,509 thousand**, with basic earnings per share of **RMB 119.0 cents**, a significant improvement from a loss of **RMB 218.6 cents** per share in the prior period, and diluted earnings per share were the same due to the anti-dilutive effect of share options Earnings/Loss Per Share (For the six months ended June 30) | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Profit/(Loss) attributable to owners of the Company | 968,509 | (1,028,298) | | Weighted average number of ordinary shares (thousand shares) | 814,104 | 470,360 | | Basic earnings/(loss) per share (RMB cents) | 119.0 | (218.6) | - Diluted earnings/(loss) per share were the same as basic earnings/(loss) per share due to the anti-dilutive effect of share options[26](index=26&type=chunk) [Trade and Other Receivables/Payables](index=13&type=section&id=Trade%20and%20Other%20Receivables%2FPayables) As of June 30, 2025, the Group's total trade and other receivables significantly decreased to **RMB 689,127 thousand** from **RMB 2,028,481 thousand** at December 31, 2024, and total trade and other payables also decreased from **RMB 2,928,501 thousand** to **RMB 1,000,078 thousand**, reflecting improved working capital management Trade and Other Receivables (As of June 30) | Indicator | 2025/06/30 (RMB thousand) | 2024/12/31 (RMB thousand) | | :--- | :--- | :--- | | Trade receivables and bills receivable net of loss allowance | 72,001 | 64,227 | | Other receivables net of loss allowance | 165,607 | 495,154 | | Prepayments for sales-related taxes and other taxes | 37,062 | 157,036 | | Deposits and prepayments | 414,457 | 1,312,064 | | **Total** | **689,127** | **2,028,481** | Trade and Other Payables (As of June 30) | Indicator | 2025/06/30 (RMB thousand) | 2024/12/31 (RMB thousand) | | :--- | :--- | :--- | | Trade payables and bills payable | 565,854 | 1,538,102 | | Other payables and accrued expenses | 217,274 | 1,076,488 | | Deposits | 90,306 | 189,950 | | Advances received | 64,405 | 69,329 | | Interest payable on senior notes | 62,239 | 54,632 | | **Total** | **1,000,078** | **2,928,501** | [Senior Notes](index=14&type=section&id=Senior%20Notes) The Group successfully redeemed new notes with a principal amount of **USD 439.1 million** by issuing mandatory convertible bonds and waived unpaid interest, significantly optimizing its debt structure, though some October 2023 Senior Notes remain unpaid due to uncontactable holders, posing a default risk Senior Notes (As of June 30) | Type | 2025/06/30 (RMB thousand) | 2024/12/31 (RMB thousand) | | :--- | :--- | :--- | | Current: USD 15.8 million Senior Notes due 2023 | 113,113 | 113,584 | | Non-current: USD 439.1 million New Notes due 2029 | – | 3,253,866 | | **Total** | **113,113** | **3,367,450** | - The Company completed an exchange offer in April 2023, issuing new notes with a principal amount of **USD 413,578,609**, an annual interest rate of **7.0%**, and maturing on April 28, 2026[29](index=29&type=chunk) - As of June 30, 2025, approximately **USD 15,801,000** of the October 2023 Senior Notes' principal and interest remained unpaid due to uncontactable holders, potentially leading to a default[29](index=29&type=chunk) - In October 2023, the Company initiated a consent solicitation for the new notes, adjusting the outstanding principal to **USD 439,097,982**, reducing the annual interest rate to **4.5%**, and extending the maturity date to April 28, 2029[29](index=29&type=chunk) - From September 11, 2024, to April 25, 2025, the Company planned to redeem the new notes by issuing mandatory convertible bonds and waiving unpaid interest; on June 10, 2025, mandatory convertible bonds with a principal amount of approximately **USD 265,251,764** were issued, and the new notes were fully redeemed[30](index=30&type=chunk) [Extracts from Independent Auditor's Review Report](index=16&type=section&id=Extracts%20from%20Independent%20Auditor's%20Review%20Report) This section presents the independent auditor's review findings, confirming compliance with accounting standards while highlighting material uncertainties related to the Group's going concern [Conclusion](index=16&type=section&id=Conclusion) Based on the review, the independent auditor found no matters indicating that the interim condensed consolidated financial statements were not prepared, in all material respects, in accordance with International Accounting Standard 34 - The auditor found no matters indicating that the interim condensed consolidated financial statements were not prepared, in all material respects, in accordance with International Accounting Standard 34[31](index=31&type=chunk) [Material Uncertainty Related to Going Concern](index=16&type=section&id=Material%20Uncertainty%20Related%20to%20Going%20Concern) The auditor highlighted material uncertainties regarding the Group's ability to continue as a going concern, stemming from insufficient liquidity, potential default risk due to unpaid senior notes, and challenging real estate market conditions with limited financing, despite management's efforts to improve liquidity - Insufficient liquidity: Current portion of bank loans and other borrowings amounted to **RMB 158,423 thousand**, October 2023 Senior Notes were **RMB 113,113 thousand**, while cash and cash equivalents were only **RMB 54,924 thousand**[32](index=32&type=chunk) - Default risk: Principal and interest on certain October 2023 Senior Notes remained unpaid, which may lead to an event of default and immediate repayment demands[32](index=32&type=chunk) - Market environment challenges: Unfavorable real estate market conditions and limited capital market financing sources may result in longer-than-expected time to realize cash and obtain external financing[32](index=32&type=chunk) - Management has taken various measures to improve liquidity and financial position, but material uncertainties still exist[32](index=32&type=chunk) [Management Discussion and Analysis](index=17&type=section&id=Management%20Discussion%20and%20Analysis) This section offers management's perspective on the Group's performance, market environment, financial results, liquidity, and future strategic initiatives [Overall Performance and Future Outlook](index=17&type=section&id=Overall%20Performance%20and%20Future%20Outlook) In the first half of 2025, China's real estate market showed weak growth despite policy support, prompting the Group to actively respond by significantly optimizing its asset and liability structure through debt restructuring, improving cash flow, and planning to focus on asset optimization, enhancing operational capabilities, revitalizing existing assets, and introducing new quality productive forces businesses to drive business diversification - Market environment: China's real estate market showed some recovery in the first half of 2025 with policy support, but subsequent growth was weak[33](index=33&type=chunk) - Countermeasures: Increase sales and cash collection, promote asset sales, strictly control expenses, and proactively manage debt[33](index=33&type=chunk) - Debt restructuring: Successfully redeemed approximately **USD 439.1 million** of USD senior notes for interest-free mandatory convertible bonds with a principal of **USD 265.3 million**, significantly optimizing the asset and liability structure[34](index=34&type=chunk)[35](index=35&type=chunk) - Future outlook: Guided by a "long-term going concern" strategy, focusing on "ensuring completion, ensuring delivery, improving efficiency, and stable operations," the Group aims to optimize assets, enhance operational capabilities, revitalize existing assets, introduce new quality productive forces businesses, strengthen technology empowerment, and promote business diversification[36](index=36&type=chunk) [Financial Performance Analysis](index=18&type=section&id=Financial%20Performance%20Analysis) The Group's total revenue for the first half of 2025 significantly decreased year-on-year, primarily due to property delivery progress; despite improved cost of sales and negative gross profit, provision for impairment of inventories increased due to unfavorable real estate market conditions, while other income grew substantially from debt restructuring, and selling, administrative expenses, impairment losses, and finance costs all significantly decreased Key Financial Performance (For the six months ended June 30) | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | Year-on-year change | | :--- | :--- | :--- | :--- | | Total revenue | 228,300 | 861,700 | -73.5% | | Total cost of sales | 499,100 | 1,226,000 | -59.3% | | Negative gross profit | 270,800 | 364,300 | -25.7% | | Selling and administrative expenses | 38,200 | 82,900 | -53.9% | | Impairment losses | 16,400 | 477,500 | -96.6% | | Fair value loss on investment properties | 19,100 | 41,800 | -54.3% | | Finance costs | 23,100 | 66,000 | -65.0% | - Other income primarily arose from debt restructuring income generated by the redemption of senior notes with mandatory convertible bonds completed on June 10, 2025[39](index=39&type=chunk) - Cost of sales included a provision for impairment of inventories of approximately **RMB 308.8 million**, reflecting a decrease in average selling prices of properties due to the downturn in the real estate market[38](index=38&type=chunk) - Income tax expense was mainly due to Land Appreciation Tax arising from property sales and the reversal of deferred income tax assets[44](index=44&type=chunk) [Liquidity and Financial Resources](index=19&type=section&id=Liquidity%20and%20Financial%20Resources) The Group's funding sources primarily include cash flow from operating activities, bank loans, and advances from controlling shareholders; as of June 30, 2025, cash balances decreased, but total borrowings significantly reduced, and the gearing ratio substantially improved, with the Company continuing to strengthen cash flow management, control costs, and seek external collaborations to support business development - Sources of funding: Cash flow from operating activities, bank loans and other borrowings, and advances from controlling shareholders[45](index=45&type=chunk) - Cash balance (including pledged and restricted funds) decreased from approximately **RMB 206.6 million** as of December 31, 2024, to approximately **RMB 127.1 million** as of June 30, 2025[46](index=46&type=chunk) Borrowings (As of June 30) | Borrowing Type | 2025/06/30 (RMB thousand) | 2024/12/31 (RMB thousand) | | :--- | :--- | :--- | | Bank loans and other borrowings | 311,700 | 2,360,600 | | Senior notes | 113,100 | 3,367,500 | | **Total borrowings** | **424,766** | **5,728,034** | - Contingent liabilities: Guarantees for mortgage financing provided by domestic banks to customers amounted to approximately **RMB 628.2 million** (December 31, 2024: approximately **RMB 1,896.4 million**)[48](index=48&type=chunk) - Capital commitments: Contracted but not provided for in the financial statements for construction and development contracts amounted to **RMB 519,676 thousand** (December 31, 2024: **RMB 1,638,191 thousand**)[49](index=49&type=chunk) Key Financial Ratios (As of June 30) | Ratio | 2025/06/30 | 2024/12/31 | | :--- | :--- | :--- | | Current ratio | 1.82 | 1.41 | | Gearing ratio | 7.2% | 45.3% | - Foreign exchange risk: Business is primarily conducted in RMB, with no significant foreign exchange fluctuation risk, except for certain overseas bank deposits, interests in joint ventures, senior notes, and other borrowings denominated in foreign currencies[52](index=52&type=chunk) [Significant Acquisitions and Disposals](index=22&type=section&id=Significant%20Acquisitions%20and%20Disposals) During the period, the Group completed two significant disposals: the entire equity interest in Zhuoying Limited for **HKD 130 million** and the entire equity interest in Faith Channel Limited for **HKD 50 million**, with no other major acquisitions or disposals - On January 28, 2025, the entire equity interest in Zhuoying Limited was disposed of to an independent third party for a total consideration of **HKD 130 million**[53](index=53&type=chunk) - On April 25, 2025, the entire equity interest in Faith Channel Limited was disposed of to an independent third party for a total consideration of **HKD 50 million**[53](index=53&type=chunk) [Employees and Remuneration Policy](index=22&type=section&id=Employees%20and%20Remuneration%20Policy) The Group has established a comprehensive remuneration system covering basic salary, performance-based pay, short-term incentives, and medium-to-long-term incentives, along with a share option scheme to reward contributors; as of June 30, 2025, the Group's employee count decreased to **132** from **194** at December 31, 2024 - Remuneration system: Established a full value chain, diversified incentive mechanism, including basic salary, performance-based pay, short-term incentives, and medium-to-long-term incentives[54](index=54&type=chunk) - Share Option Scheme: Aims to provide incentives to eligible participants who contribute to the successful operation of the Group[54](index=54&type=chunk) - Employee count: **132** as of June 30, 2025 (December 31, 2024: **194**)[54](index=54&type=chunk) [Events After Reporting Period](index=22&type=section&id=Events%20After%20Reporting%20Period) Subsequent to the reporting period, on July 14, 2025, the Company entered into an agreement to acquire the entire issued share capital of a target company for **HKD 976,500,000**, payable through the allotment and issue of consideration shares, which constitutes a major transaction and may lead to a new controlling group, triggering a mandatory general offer obligation requiring a whitewash waiver - On July 14, 2025, the Company entered into an agreement to acquire the entire issued share capital of a target company for **HKD 976,500,000**[55](index=55&type=chunk) - The acquisition consideration will be satisfied by the allotment and issue of consideration shares at an issue price of **HKD 3.15** per share[55](index=55&type=chunk) - This acquisition constitutes a major transaction under Chapter 14 of the Listing Rules and may result in a new controlling group (China Guangdong-Hong Kong Greater Bay Area Holdings and the vendor collectively holding **64.47%** of voting rights), requiring a whitewash waiver to avoid a mandatory general offer[55](index=55&type=chunk)[56](index=56&type=chunk) [Corporate Governance and Other Information](index=23&type=section&id=Corporate%20Governance%20and%20Other%20Information) This section details the Company's corporate governance practices, directors' securities transactions, share capital, share option scheme, and other relevant corporate information [Corporate Governance](index=23&type=section&id=Corporate%20Governance) The Company is committed to the highest standards of corporate governance, with the Board fully responsible for corporate governance and confirming compliance with all code provisions of the Corporate Governance Code as set out in Appendix C1 to the Listing Rules during the period - The Company is committed to the highest standards of corporate governance, with the Board fully responsible for corporate governance[58](index=58&type=chunk) - All code provisions of the Corporate Governance Code as set out in Appendix C1 to the Listing Rules were complied with during the period[58](index=58&type=chunk) [Directors' Securities Transactions](index=23&type=section&id=Directors'%20Securities%20Transactions) The Company has adopted the Model Code as set out in Appendix C3 to the Listing Rules as the code of conduct for directors' securities transactions, and all directors have confirmed compliance with this code during the period - The Company has adopted the Model Code as set out in Appendix C3 to the Listing Rules as the code of conduct for directors' securities transactions[59](index=59&type=chunk) - All directors have confirmed compliance with the standards set out in the Model Code during the period[59](index=59&type=chunk) [Repurchase, Sale or Redemption of Listed Securities](index=24&type=section&id=Repurchase%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 period - Neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities during the period[60](index=60&type=chunk) [Senior Notes Restructuring Plan](index=24&type=section&id=Senior%20Notes%20Restructuring%20Plan) The Company successfully completed its senior notes restructuring, redeeming senior notes with a principal amount of **USD 439,097,982** by issuing mandatory convertible bonds and waiving unpaid interest, with **98.33%** of holders' consent, and the redemption and issuance were completed on June 10, 2025 - The Company sought consent from holders for the waiver of unpaid interest on senior notes and the issuance of mandatory convertible bonds to redeem the senior notes[61](index=61&type=chunk) - Consent was obtained from holders representing **98.33%** of the total outstanding principal amount of the senior notes[62](index=62&type=chunk) - The redemption of senior notes and the issuance of mandatory convertible bonds with a principal amount of approximately **USD 265,251,764** were completed on June 10, 2025[62](index=62&type=chunk) - Assuming full conversion of the convertible bonds at a conversion price of **HKD 5.50** per share, a maximum of **376,175,227** convertible bond conversion shares will be issued, representing approximately **46.21%** of the total issued share capital as of April 25, 2025[63](index=63&type=chunk) [Share Capital](index=25&type=section&id=Share%20Capital) As of June 30, 2025, the Company's total issued share capital was **HKD 81,410,310.00**, comprising **814,103,100** shares with a par value of **HKD 0.10** each, all fully paid and ranking pari passu - As of June 30, 2025, the total issued share capital was **HKD 81,410,310.00**[64](index=64&type=chunk) - Comprising **814,103,100** shares with a par value of **HKD 0.10** each[64](index=64&type=chunk) [Share Option Scheme](index=25&type=section&id=Share%20Option%20Scheme) The Company approved and adopted a share option scheme on May 30, 2019, to reward employees and directors contributing to the Group through the grant of share options; as of June 30, 2025, the total number of outstanding share options under the scheme was **1,282,500**, representing approximately **0.16%** of the issued shares - The Share Option Scheme was approved and adopted on May 30, 2019, aiming to encourage and reward employees and directors of member companies who contribute to the Group[65](index=65&type=chunk) - The Share Option Scheme remains valid for **ten years** from May 30, 2019[65](index=65&type=chunk) - As of June 30, 2025, the total number of outstanding share options under the Share Option Scheme was **1,282,500**, representing approximately **0.16%** of the Company's issued shares[67](index=67&type=chunk) - Mr. He Fei's **1,282,500** share options lapsed after July 1, 2025[67](index=67&type=chunk) [Interim Dividend](index=26&type=section&id=Interim%20Dividend) The Board resolved not to declare an interim dividend for the current period (first half of 2024: nil) - The Board resolved not to declare an interim dividend for the current period[70](index=70&type=chunk) [Directors' Information Disclosure](index=27&type=section&id=Directors'%20Information%20Disclosure) No changes in directors' information requiring disclosure under Rule 13.51B of the Listing Rules have occurred since the disclosure in the annual report for the financial year ended December 31, 2024 - No changes in directors' information requiring disclosure under Rule 13.51B of the Listing Rules have occurred since the disclosure in the annual report for the financial year ended December 31, 2024[71](index=71&type=chunk) [Committee Reports](index=27&type=section&id=Committee%20Reports) The Company has established an Audit Committee, Remuneration Committee, and Nomination Committee, all constituted and operating in accordance with the Listing Rules and Corporate Governance Code, with their terms of reference revised to comply with the latest requirements and composed of independent non-executive and executive directors - Audit Committee: Composed of **three independent non-executive directors**, responsible for reviewing financial information, overseeing financial reporting processes, risk management, and internal control systems[72](index=72&type=chunk)[73](index=73&type=chunk) - Remuneration Committee: Composed of Mr. Guan Huanfei (Independent Non-executive Director and Chairman), Mr. Han Qinchun (Independent Non-executive Director), and Ms. Wei Haiyan (Executive Director), responsible for formulating, reviewing, and recommending remuneration policies and structures for directors and senior management[74](index=74&type=chunk)[75](index=75&type=chunk) - Nomination Committee: Composed of Mr. Chen Yangsheng (Independent Non-executive Director and Chairman), Mr. Han Qinchun (Independent Non-executive Director), and Ms. Wei Haiyan (Executive Director), responsible for reviewing the Board's structure, size, and composition, and making recommendations on the appointment, re-election, and succession planning of directors[76](index=76&type=chunk)[77](index=77&type=chunk) [Publication of Interim Results Announcement and Interim Report](index=29&type=section&id=Publication%20of%20Interim%20Results%20Announcement%20and%20Interim%20Report) This interim results announcement has been published on the HKEX website and the Company's website, and the interim report will also be posted on these websites and distributed to shareholders requesting printed copies in due course - This interim results announcement is published on the HKEX website www.hkexnews.hk and the Company's website www.youngogroup.com[78](index=78&type=chunk) - The Company's interim report for the six months ended June 30, 2025, will also be posted on the aforementioned websites and distributed to shareholders who request printed copies in due course[78](index=78&type=chunk)