[Announcement Overview](index=1&type=section&id=Announcement%20Overview) This section provides an overview of the clarification announcement issued by HENGXIN TECHNOLOGY LTD. regarding its interim results [Purpose and Background of Announcement](index=1&type=section&id=Purpose%20and%20Background%20of%20Announcement) This announcement is a clarification issued by HENGXIN TECHNOLOGY LTD. (HK Stock Code: 1085) to correct unintentional clerical errors in its interim results announcement for the six months ended June 30, 2025, published on August 26, 2025 - Company Name: HENGXIN TECHNOLOGY LTD., HK Stock Code: **1085**[2](index=2&type=chunk) - Announcement Type: Clarification announcement, addressing the interim results announcement for the six months ended June 30, 2025, published on August 26, 2025[2](index=2&type=chunk) - Reason for Clarification: Unintentional clerical errors in the interim results announcement[2](index=2&type=chunk) [Details of Clarification](index=1&type=section&id=Details%20of%20Clarification) This clarification primarily addresses depreciation and amortization expenses in the 'Other Significant Items' section on page 13 of the interim results announcement, confirming that other financial information remains unaffected - Clarification Content: Correction to the section titled 'Other Significant Items' on page 13 of the interim results announcement[2](index=2&type=chunk) - Scope of Impact: This clarification does not affect other financial information contained in the interim results announcement, serving only as a supplement[3](index=3&type=chunk) [Correction to Depreciation and Amortization Expenses](index=1&type=section&id=Correction%20to%20Depreciation%20and%20Amortization%20Expenses) The corrected depreciation and amortization expenses show a consolidated total of RMB (32,491) thousand for the six months ended June 30, 2025, compared to RMB (34,589) thousand for the same period in 2024 Corrected Depreciation and Amortization Expenses (RMB '000, Unaudited) | Item | Total for Reportable and All Other Segments (RMB '000) | Unallocated Amount (RMB '000) | Consolidated Total (RMB '000) | | :--- | :--- | :--- | :--- | | Six Months Ended June 30, 2025 | (32,320) | (171) | (32,491) | | Six Months Ended June 30, 2024 | (34,421) | (168) | (34,589) | [Board of Directors Information](index=2&type=section&id=Board%20of%20Directors%20Information) The announcement provides the updated list of HENGXIN TECHNOLOGY LTD.'s Board of Directors, including executive, non-executive, and independent non-executive directors - Board Chairman: **Cui Wei**[4](index=4&type=chunk) - Executive Directors: **Mr. Peng Yinan**, **Mr. Liu Fei**[4](index=4&type=chunk) - Non-executive Directors: **Mr. Cui Wei**, **Mr. Tao Shunxiao**, **Mr. Zeng Guowei**[4](index=4&type=chunk) - Independent Non-executive Directors: **Mr. Qian Ziyan**, **Ms. Lin Ting**, **Mr. Chen Hancong**[4](index=4&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。 JiaChen Holding Group Limited 佳辰控股集團有限公司 （股份代號：1937） （於開曼群島註冊成立之有限公司） 截 至2025年6月30日止六個月的 中期業績公告 業 績 佳 辰 控 股 集 團 有 限 公 司（「本公司」）董 事（「董 事」）會（「董事會」）呈 列 本 公 司 及 其 附 屬 公 司（統 稱「本集團」）截 至2025年6月30日 止 六 個 月（「本期間」）的 未 經 審 核 簡 明 綜 合 中 期 業 績，連 同2024年 同 期 的 比 較 數 字 如 下： – 1 – 簡明綜合損益及其他全面收益表 | | | 截 | 至6月30日止六個月 | | | | --- | --- | --- | --- | --- | --- | | | | 2025年 | | 2024年 | | | | 附 註 | ...

Summary [2025 First Half Performance Overview](index=1&type=section&id=2025%E5%B9%B4%E4%B8%8A%E5%8D%8A%E5%B9%B4%E4%B8%9A%E7%BB%A9%E6%A6%82%E8%A7%88) Fortior Technology's H1 2025 revenue and gross profit increased, but profit decreased due to share-based payments; no interim dividend Performance Highlights | Indicator | H1 2025 (RMB million) | H1 2024 (RMB million) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 375.0 | 282.3 | 32.8% | | Gross Profit | 194.6 | 148.4 | 31.1% | | Profit | 116.5 | 122.0 | -4.5% | - The decrease in profit was primarily due to the restricted share incentive plan implemented in November 2024, with share-based payments increasing by approximately **RMB 32.0 million** year-on-year during the reporting period; excluding this impact, profit would have increased by **18.7%** year-on-year[2](index=2&type=chunk) - The Board recommended no interim dividend for the six months ended June 30, 2025[2](index=2&type=chunk) Financial Performance [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) H1 2025 revenue and gross profit grew, but profit for the period decreased due to higher income tax, with basic EPS at **RMB 1.26** Condensed Consolidated Statement of Profit or Loss | Indicator (RMB thousand) | H1 2025 | H1 2024 | YoY Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 375,040 | 282,324 | 32.8% | | Cost of sales | (180,448) | (133,931) | 34.7% | | Gross Profit | 194,592 | 148,393 | 31.1% | | Other income and gains | 39,183 | 38,737 | 1.2% | | Selling and distribution expenses | (17,012) | (8,316) | 104.6% | | Administrative expenses | (21,890) | (13,158) | 66.4% | | Research and development costs | (70,710) | (40,194) | 75.9% | | Profit Before Tax | 121,801 | 124,101 | -1.85% | | Income tax expense | (5,290) | (2,080) | 154.3% | | Profit for the Period | 116,511 | 122,021 | -4.5% | Earnings Per Share | Indicator | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Basic Earnings Per Share | RMB 1.26 | RMB 1.32 | | Diluted Earnings Per Share | RMB 1.25 | RMB 1.32 | [Condensed Consolidated Statement of Financial Position](index=5&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) Total assets increased to **RMB 2,742.1 million** as of June 30, 2025, driven by current assets; net assets and total equity also grew Condensed Consolidated Statement of Financial Position Highlights | Indicator (RMB thousand) | June 30, 2025 | December 31, 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Total non-current assets | 804,927 | 1,013,070 | -20.55% | | Total current assets | 1,937,173 | 1,636,181 | 18.40% | | Total current liabilities | 88,305 | 78,954 | 11.84% | | Total non-current liabilities | 15,309 | 17,362 | -11.83% | | Net Assets | 2,638,486 | 2,552,935 | 3.35% | | Total Equity | 2,638,486 | 2,552,935 | 3.35% | - The decrease in total non-current assets was primarily due to debt investments at fair value (negotiable certificates of deposit) decreasing from **RMB 794,344 thousand** to **RMB 546,727 thousand**[6](index=6&type=chunk)[33](index=33&type=chunk) - The increase in total current assets was mainly driven by financial assets at fair value increasing from **RMB 824,396 thousand** to **RMB 914,434 thousand**, and debt investments at fair value increasing from **RMB 181,818 thousand** to **RMB 513,861 thousand**[6](index=6&type=chunk)[33](index=33&type=chunk)[38](index=38&type=chunk) Notes to the Financial Statements [Company Information and Accounting Policies](index=8&type=section&id=1.%20Company%20Information) Fortior Technology, listed on STAR Market in 2022, commenced H-share listing on HKEX on July 9, 2025, focusing on BLDC motor drive control; financials under IAS 34 - The Company's H shares have been listed on the Main Board of the Stock Exchange of Hong Kong (stock code: 01304) since July 9, 2025[9](index=9&type=chunk) - The Group is principally engaged in the development and commercialization of BLDC (Brushless Direct Current) motor drive control and drive products and solutions[9](index=9&type=chunk) - The condensed consolidated interim financial information has been prepared in accordance with International Accounting Standard 34 'Interim Financial Reporting' and on a historical cost basis, with certain financial assets measured at fair value[10](index=10&type=chunk) [Operating Segment Information](index=9&type=section&id=3.%20Operating%20Segment%20Information) The company operates as a single business unit focused on BLDC motor drive control and solutions, with **92.18%** of H1 2025 revenue from mainland China, and major customers A and B contributing a significant portion of total revenue - The Group operates as a single business unit based on its products, primarily engaged in the development and commercialization of BLDC motor drive control and drive products and solutions[13](index=13&type=chunk) Revenue by Geographical Region | Region | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | 2025 Share (%) | | :--- | :--- | :--- | :--- | | Mainland China | 345,722 | 262,818 | 92.18% | | Other Countries/Regions | 29,318 | 19,506 | 7.82% | | **Total Revenue** | **375,040** | **282,324** | **100%** | Revenue from Major Customers | Major Customer | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Customer A | 52,210 | 39,661 | | Customer B | 38,889 | 28,618 | [Revenue Breakdown](index=11&type=section&id=4.%20Revenue) In H1 2025, total revenue reached **RMB 375.0 million**, with MCU products being the largest contributor, and ASIC and IPM products showing significant growth of **56.4%** and **64.7%** respectively, all recognized at the point of goods transfer Revenue by Product Type | Product Type | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | YoY Change (%) | | :--- | :--- | :--- | :--- | | MCU | 228,095 | 174,338 | 30.8% | | ASIC | 66,878 | 42,749 | 56.4% | | HVIC | 43,210 | 42,279 | 2.2% | | MOSFET | 1,202 | 1,005 | 19.6% | | IPM | 35,282 | 21,427 | 64.7% | | Others | 373 | 526 | -29.1% | | **Total Revenue** | **375,040** | **282,324** | **32.8%** | - All revenue is recognized at a point in time when goods are transferred[21](index=21&type=chunk) [Other Income and Gains](index=12&type=section&id=5.%20Other%20Income%20and%20Gains) In H1 2025, total other income and gains remained stable at **RMB 39.18 million**, with a significant increase in other interest income from debt investments at fair value offsetting declines in investment income from financial assets and bank interest income Other Income and Gains Breakdown | Item (RMB thousand) | H1 2025 | H1 2024 | YoY Change (%) | | :--- | :--- | :--- | :--- | | Bank interest income | 3,356 | 5,903 | -43.2% | | Other interest income from debt investments | 13

[Executive Summary](index=1&type=section&id=Executive%20Summary) [2025 Interim Performance Review](index=1&type=section&id=2025%20Interim%20Performance%20Review) The Group's H1 2025 performance saw digital sports entertainment revenue decline due to market challenges, offset by strategic AI and overseas expansion, with total users growing to 114 million and net loss decreasing to HKD 12.1 million due to fair value gains on financial assets - The Group's digital sports entertainment revenue declined, primarily due to the non-major sports event year cycle, evolving competitive landscape, and business model adjustments[5](index=5&type=chunk)[10](index=10&type=chunk) - Strategic adjustments focused on AI technology R&D, overseas expansion of sports and casual games, and building a new sports industry ecosystem[5](index=5&type=chunk) Key Financial and Operational Data for H1 2025 | Metric | 2025 H1 | | :--- | :--- | | Total Platform Users | 114.0 million | | Total Revenue | HKD 152.5 million | | Loss for the Period | HKD 12.1 million | | Reason for Loss Reduction | Increased fair value gains on financial assets | [Business Review and Development](index=2&type=section&id=Business%20Review%20and%20Development) [Business Model and Strategic Direction](index=2&type=section&id=Business%20Model%20and%20Strategic%20Direction) The Group aims to build a digital sports entertainment ecosystem for enthusiasts, leveraging big data and AI to empower traditional sports, with "Crazy Red Ticket + Sports Lottery New Retail" as its core strategy, complemented by event, betting, IP, and gaming enhancements - The Group's business model is digital sports entertainment, aiming to build a multi-dimensional, real-time interactive sports entertainment community[11](index=11&type=chunk) - The core strategy is to empower the traditional sports industry with big data and AI technology, focusing on **"Crazy Red Ticket + Sports Lottery New Retail"** as the main business, supplemented by **"Events + Betting, IP + Games"** enhancement businesses[12](index=12&type=chunk) [Core Business Review and Development](index=3&type=section&id=Core%20Business%20Review%20and%20Development) In H1 2025, core businesses faced challenges, with sports knowledge platforms seeing revenue decline but strategically investing in AI "Foretell" and global partnerships, while sports and casual games achieved overseas breakthroughs, lottery retail optimized channels, and sports event operations successfully hosted the WBC Boxing Championship, boosting brand influence Core Business Revenue Overview | Business Segment | H1 2025 Revenue (HKD million) | H1 2024 Revenue (HKD million) | YoY Change | | :--- | :--- | :--- | :--- | | Sports Knowledge Payment Platform | 97.9 | 125.0 | -21.7% | | Sports and Casual Games | 46.6 | 76.7 | -39.3% | | Sports Event Operation | 3.7 | 0.0 | New | - Overseas revenue from sports and casual games accounted for **9.1%**, with core product **"Football Master"** having over **100,000 average daily active players** in the Vietnamese market[8](index=8&type=chunk)[20](index=20&type=chunk)[21](index=21&type=chunk) - The sports event operation business successfully hosted the WBC Boxing Championship, achieving over **600 million online views** and generating **HKD 3.7 million** in revenue[9](index=9&type=chunk)[28](index=28&type=chunk)[34](index=34&type=chunk) [Sports Knowledge Payment Platform – Technology Foundation and Ecosystem Expansion, Preparing for Major Sports Event Years](index=3&type=section&id=Sports%20Knowledge%20Payment%20Platform%20%E2%80%93%20Technology%20Foundation%20and%20Ecosystem%20Expansion,%20Preparing%20for%20Major%20Sports%20Event%20Years) Sports Knowledge Payment Platform Revenue | Metric | H1 2025 | H1 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | HKD 97.9 million | HKD 125.0 million | -21.7% | - Successfully launched the self-developed **"Foretell"** sports prediction large model beta, aiming for higher prediction accuracy and commercialization breakthroughs by the **2026 World Cup**[13](index=13&type=chunk)[14](index=14&type=chunk)[15](index=15&type=chunk) - The platform expanded diversified traffic entry points through partnerships with leading platforms like 360 Search and Baidu Mobile, and upgraded data sources and animated live broadcast services, covering over **3,000 sports events globally**[16](index=16&type=chunk)[17](index=17&type=chunk) [Focus on AI Technology R&D, Accelerating Commercialization](index=3&type=section&id=Focus%20on%20AI%20Technology%20R%26D,%20Accelerating%20Commercialization) - The **"Foretell"** large model beta was launched, with core advantages including a **70 billion parameter-level large language model**, a dynamic sports knowledge base integrating **25 years of China Sports Lottery data**, and a multi-agent system[14](index=14&type=chunk) - The model has been validated through events like the Club World Cup, with optimization planned for H2 2025, aiming for breakthroughs in both prediction accuracy and commercial application by the **2026 World Cup**[15](index=15&type=chunk) [Enhancing Platform Content Quality, Enriching Product Cooperation Ecosystem](index=4&type=section&id=Enhancing%20Platform%20Content%20Quality,%20Enriching%20Product%20Cooperation%20Ecosystem) - Launched products like **"Plan Ticket"** and **"Divine Ticket"** to meet diverse user needs; upgraded data sources and animated live broadcast services, improving response speed by **30%** and covering over **3,000 sports events globally**[16](index=16&type=chunk) - Achieved deep cooperation with 360 Search and Baidu Mobile, precisely capturing sports lottery users through special event displays and mini-program formats, driving new growth points[17](index=17&type=chunk) [Continuous Product Matrix Upgrades, Enhancing Competitive Advantage](index=4&type=section&id=Continuous%20Product%20Matrix%20Upgrades,%20Enhancing%20Competitive%20Advantage) - The **"China Sports Lottery Mobile App"** completed seven major core data model iterations, fully supporting mainstream football and basketball gameplay[18](index=18&type=chunk) - The **"Ball Game APP"** was upgraded for the Club World Cup, enhancing live interaction, professional commentary teams, real-time data analysis, lineup prediction, and odds interpretation[18](index=18&type=chunk) - The **"Wow Match Model"** launched **"Wow Match Basketball"** and **"Poisson Distribution"** prediction models, integrating discrete probability theory with AI to significantly improve score and goal count prediction accuracy[18](index=18&type=chunk)[19](index=19&type=chunk) [Sports and Casual Game Business](index=5&type=section&id=Sports%20and%20Casual%20Game%20Business) Sports and Casual Game Revenue | Metric | H1 2025 | H1 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | HKD 46.6 million | HKD 76.7 million | -39.3% | | Overseas Revenue Share | 9.1% | - | - | - Core product **"Football Master"** achieved over **100,000 average daily active players** in the Vietnamese market, successfully validating its overseas revenue generation capability and product vitality[8](index=8&type=chunk)[21](index=21&type=chunk) - Deepened cooperation with strategic partners like Transsion Zhochen and Yunchang Games to expand into multiple new overseas markets including Hong Kong, Macau, Taiwan, Indonesia, Japan, Korea, South America, and Africa[8](index=8&type=chunk)[20](index=20&type=chunk)[22](index=22&type=chunk) [Global Breakthrough and Expansion, Core Products Validated by Market](index=5&type=section&id=Global%20Breakthrough%20and%20Expansion,%20Core%20Products%20Validated%20by%20Market) - **"Football Master"** performed strongly in the Vietnamese market, with over **100,000 average daily active players**, successfully validating its overseas revenue generation capability[21](index=21&type=chunk) - Partnered with Transsion Zhochen for planned releases in South America, Africa, Indonesia, Malaysia, and other regions, aiming to create a "national-level" football mobile game for Africa leveraging the Africa Cup of Nations[22](index=22&type=chunk) - Collaborated with Yunchang Games for the distribution of **"Football Master"** in high-potential markets such as Japan, Korea, Hong Kong, Macau, and Taiwan[22](index=22&type=chunk) [Focus on Core Football IP Games](index=6&type=section&id=Focus%20on%20Core%20Football%20IP%20Games) - Flagship title **"Football Master"** achieved world-leading standards, featuring advanced individual and collective player AI technology, and obtained official FIFPro authorization, including IP information for over **60,000 professional players**[23](index=23&type=chunk) - **"Dream Football World"** significantly improved user retention through AI optimization and enhanced animation effects, with a second-generation title planned before the **2026 World Cup**[24](index=24&type=chunk) - Launched **"Dream Football"**, the first mobile game developed with AI technology, deeply integrating AI into player images, certain gameplay mechanics, and code[25](index=25&type=chunk) [Continuously Optimizing Co-publishing Business, Actively Adapting to Publishing Market Changes](index=7&type=section&id=Continuously%20Optimizing%20Co-publishing%20Business,%20Actively%20Adapting%20to%20Publishing%20Market%20Changes) - Shrank the co-publishing product line to focus on high-margin niche categories and reduce the release of low-return games, leading to a short-term revenue decline[26](index=26&type=chunk) - Future strategy adheres to a profit-oriented approach, selecting long-lifecycle, healthy monetization products, and enhancing economic efficiency through refined operations and cost control[26](index=26&type=chunk) [Sports Lottery Retail Services](index=7&type=section&id=Sports%20Lottery%20Retail%20Services) - Instant sports lottery performed strongly, with national operational efficiency steadily improving[27](index=27&type=chunk) - Opened **13 new supermarket stores**, innovatively adopting a **"joint operation" profit-sharing model** to effectively reduce costs and enhance efficiency[27](index=27&type=chunk) - Commercial complex business significantly improved overall store revenue by optimizing rent, personnel costs, and sales incentives[27](index=27&type=chunk) [Sports Event Operation Business](index=7&type=section&id=Sports%20Event%20Operation%20Business) - Successfully hosted the WBC Boxing Championship, achieving over **600 million online views** and setting a new traffic record for professional boxing events in China[9](index=9&type=chunk)[28](index=28&type=chunk) - The event featured **"three China firsts"**, including the world's first public human-machine boxing match, integrating culture, technology, and competition[28](index=28&type=chunk) - The event boosted Foshan's cultural tourism consumption, enhanced the Group's brand influence, and validated the feasibility of the **"Digital + Sports + Entertainment" model**[9](index=9&type=chunk)[29](index=29&type=chunk) [Business Outlook](index=8&type=section&id=Business%20Outlook) [Business Outlook](index=8&type=section&id=Business%20Outlook) For H2 2025, the Group plans to deepen AI technology application, optimize the "Foretell" model, accelerate global expansion for games and knowledge platforms, and strategically leverage the 2026 World Cup to drive growth and launch global football esports - H2 will deepen AI technology application and upgrades, optimize the **"Foretell"** large model, and explore AI-driven game innovation[30](index=30&type=chunk) - Accelerate global expansion, with the game business intensively releasing **"Football Master"** and the sports knowledge payment business advancing its globalization strategy[30](index=30&type=chunk) - Seize the **2026 World Cup** opportunity, plan all business segments to drive user and revenue growth, and launch a global football esports event strategy[30](index=30&type=chunk) [Financial Performance Analysis](index=9&type=section&id=Financial%20Performance%20Analysis) [Comparison of Six Months Ended June 30, 2025 with the Same Period in 2024](index=9&type=section&id=Comparison%20of%20Six%20Months%20Ended%20June%2030,%202025%20with%20the%20Same%20Period%20in%202024) For H1 2025, total revenue declined 26.8% to HKD 152.5 million due to market factors, gross profit fell 52.9% to HKD 37.9 million with gross margin at 24.8% due to increased intangible asset amortization, while net loss decreased 26.9% to HKD 12.1 million, driven by fair value gains on financial assets and reduced operating expenses Summary of Condensed Consolidated Statement of Profit or Loss for H1 2025 | Metric | H1 2025 (HKD '000) | H1 2024 (HKD '000) | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | 152,547 | 208,311 | -26.8% | | Gross Profit | 37,899 | 80,550 | -52.9% | | Gross Margin | 24.8% | 38.7% | -13.9pp | | Loss for the Period | (12,131) | (16,604) | -26.9% | - The decline in gross margin was primarily due to an **80.5% increase in amortization of intangible assets** to **HKD 23.1 million**, reflecting investments in overseas expansion and AI technology R&D[37](index=37&type=chunk) - The reduction in loss for the period was mainly attributable to an increase in fair value gains on financial assets at fair value through profit or loss to **HKD 7.8 million**, compared to a loss of **HKD 10.9 million** in the prior period[38](index=38&type=chunk)[43](index=43&type=chunk) [Revenue](index=10&type=section&id=Revenue) Revenue Breakdown (HKD million) | Business Segment | 2025 | Share (%) | 2024 | Share (%) | YoY Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Sports Knowledge Payment Platform | 97.9 | 64.2 | 125.0 | 60.0 | -21.7 | | Sports and Casual Games | 46.5 | 30.5 | 76.7 | 36.8 | -39.3 | | Lottery-related Commission Income | 4.3 | 2.8 | 6.2 | 3.0 | -30.6 | | Sports Event Operation | 3.7 | 2.4 | 0.0 | 0.0 | New | | Digital Collectibles Platform | 0.1 | 0.1 | 0.4 | 0.2 | -75.0 | | **Total Revenue** | **152.5** | **100.0** | **208.3** | **100.0** | **-26.8** | - The decline in sports knowledge payment platform revenue was primarily affected by the non-major sports event year cycle and the phased challenges of AI technology changes[34](index=34&type=chunk) - The decrease in sports and casual game revenue was mainly due to optimizing the business model and reducing the number of low-return games, but overseas revenue already accounted for **9.1%** of game performance[34](index=34&type=chunk) [Cost of Revenue and Gross Profit](index=11&type=section&id=Cost%20of%20Revenue%20and%20Gross%20Profit) Cost of Revenue and Gross Profit (HKD million) | Metric | H1 2025 | H1 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Cost of Revenue | 114.6 | 127.8 | -10.3% | | Gross Profit | 37.9 | 80.6 | -52.9% | | Gross Margin | 24.8% | 38.7% | -13.9pp | - Amortization of intangible assets increased by **HKD 10.3 million (+80.5%)** to **HKD 23.1 million**, which was the primary reason for the decline in gross margin, reflecting investments in overseas expansion games and AI technology R&D[37](index=37&type=chunk) [Other Income and Losses, Net](index=11&type=section&id=Other%20Income%20and%20Losses,%2C%20Net) Other Income and Losses, Net Breakdown (HKD million) | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Net Exchange (Loss) / Gain | (3.2) | 2.9 | | Fair Value Gains / (Losses) on Financial Assets | 7.8 | (10.9) | | **Total** | **4.6** | **(7.9)** | - Fair value gains on financial assets turned from a loss in the prior period to a gain, which was the main reason for the turnaround in other income and losses, net, for the current period[38](index=38&type=chunk) [Selling and Marketing Expenses](index=11&type=section&id=Selling%20and%20Marketing%20Expenses) Selling and Marketing Expenses (HKD million) | Metric | H1 2025 | H1 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Selling and Marketing Expenses | 34.7 | 61.5 | -43.5% | - The decrease in expenses was mainly due to lower advertising efficiency in a non-major sports event year and reduced promotion of low-return games[39](index=39&type=chunk) [Administrative Expenses](index=12&type=section&id=Administrative%20Expenses) Administrative Expenses (HKD million) | Metric | H1 2025 | H1 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Administrative Expenses | 19.3 | 21.5 | -10.4% | - The reduction in administrative expenses reflects the Group's efforts to improve cost-effectiveness of corporate expenditures[40](index=40&type=chunk) [Share of Results of an Associate](index=12&type=section&id=Share%20of%20Results%20of%20an%20Associate) - The Group ceased to recognize its share of losses from an associate (Asia Bank) as the losses exceeded its interest and there were no further obligations[41](index=41&type=chunk) Share of Results of an Associate (HKD million) | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Share of Results of an Associate | 0.0 | (3.1) | [Income Tax Expense](index=12&type=section&id=Income%20Tax%20Expense) - Income tax expense increased compared to the prior period[42](index=42&type=chunk) [Loss for the Period](index=12&type=section&id=Loss%20for%20the%20Period) Loss for the Period (HKD million) | Metric | H1 2025 | H1 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Loss for the Period | (12.1) | (16.6) | -26.9% | - The reduction in loss was primarily due to increased fair value gains on financial assets[43](index=43&type=chunk) [Strategic Investments](index=12&type=section&id=Strategic%20Investments) [Strategic Investments](index=12&type=section&id=Strategic%20Investments) As of June 30, 2025, the Group's investment portfolio grew to HKD 245.1 million, with strategic investments, acquisitions, and alliances aimed at complementing existing businesses, fostering innovation, and achieving synergy with emerging sectors like AI, blockchain, media, sports, and entertainment Total Investment Portfolio (HKD million) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Investment Portfolio | 245.1 | 234.3 | - Strategic investments aim to complement existing businesses, drive innovation, and establish connections with emerging industries such as AI, blockchain, media, sports, and entertainment[44](index=44&type=chunk) [Investments in Private Equity Funds](index=13&type=section&id=Investments%20in%20Private%20Equity%20Funds) Private Equity Fund Investments (HKD million) | Fund Name | Fair Value as of June 30, 2025 | Fair Value as of December 31, 2024 | Fair Value Gain (Current Period) | | :--- | :--- | :--- | :--- | | CPC Fund | 167.2 | 159.2 | 8.0 | | New Rock Capital Fund | 75.8 | 72.8 | 2.9 | | **Total** | **243.0** | **232.0** | **10.9** | - CPC Fund primarily invests in the Greater China mobile internet and technology sectors, especially cultural entertainment, aiming for long-term capital appreciation and business synergy[45](index=45&type=chunk) - New Rock Capital Fund continues to invest in AI, internet, media, and technology businesses, aiming for long-term capital appreciation[46](index=46&type=chunk) [China Prosperity Capital Mobile Internet Fund, L.P. (CPC Fund)](index=13&type=section&id=China%20Prosperity%20Capital%20Mobile%20Internet%20Fund,%20L.P.%20(CPC%20Fund)) - The Group holds a **27.17% limited partnership interest** in CPC Fund, with an investment fair value of **HKD 167.2 million**, recognizing a fair value gain of **HKD 8.0 million** in the current period[45](index=45&type=chunk) - CPC Fund primarily invests in the Greater China mobile internet and technology sectors, especially cultural entertainment, aiming for long-term capital appreciation[45](index=45&type=chunk) [New Rock Capital Fund LP (New Rock Capital Fund)](index=13&type=section&id=New%20Rock%20Capital%20Fund%20LP%20(New%20Rock%20Capital%20Fund)) - The Group holds a **91.05% limited partnership interest** in New Rock Capital Fund, with an investment fair value of **HKD 75.8 million**, recognizing a fair value gain of **HKD 2.9 million** in the current period[46](index=46&type=chunk) - New Rock Capital Fund continues to invest in AI, internet, media, and technology businesses, aiming for long-term capital appreciation[46](index=46&type=chunk) [Liquidity and Financial Resources](index=14&type=section&id=Liquidity%20and%20Financial%20Resources) [Liquidity and Financial Resources](index=14&type=section&id=Liquidity%20and%20Financial%20Resources) As of June 30, 2025, cash and equivalents were HKD 23.9 million, with net cash generated from operations at HKD 23.4 million, net cash used in investing at HKD 21.8 million (mainly for intangible assets), and net cash used in financing at HKD 1.6 million, while total assets reached HKD 1,018.1 million, primarily funded by HKD 702.7 million in shareholders' equity Cash Flow Summary (HKD '000) | Cash Flow Type | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Net Cash Generated From / (Used In) Operating Activities | 23,361 | (14,921) | | Net Cash Used In Investing Activities | (21,817) | (482) | | Net Cash Used In Financing Activities | (1,621) | (10,511) | | Cash and Cash Equivalents at End of Period | 23,882 | 35,864 | - Operating cash flow turned from negative to positive, indicating improved operational efficiency[49](index=49&type=chunk) - Cash outflow from investing activities significantly increased, primarily due to the acquisition of intangible assets totaling **HKD 21.7 million**[50](index=50&type=chunk) [Working Capital](index=14&type=section&id=Working%20Capital) Cash and Cash Equivalents (HKD million) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and Cash Equivalents | 23.9 | 24.4 | [Net Cash Generated From / (Used In) Operating Activities](index=14&type=section&id=Net%20Cash%20Generated%20From%20/%20(Used%20In)%20Operating%20Activities) Net Cash From Operating Activities (HKD million) | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Net Cash From Operating Activities | 23.4 | (14.9) | - Operating cash flow turned from negative to positive, primarily benefiting from digital sports entertainment revenue[49](index=49&type=chunk) [Net Cash Used In Investing Activities](index=15&type=section&id=Net%20Cash%20Used%20In%20Investing%20Activities) Net Cash Used In Investing Activities (HKD million) | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Net Cash Used In Investing Activities | (21.8) | (0.5) | - Cash outflow from investing activities significantly increased, primarily for the acquisition of intangible assets[50](index=50&type=chunk) [Net Cash Used In Financing Activities](index=15&type=section&id=Net%20Cash%20Used%20In%20Financing%20Activities) Net Cash Used In Financing Activities (HKD million) | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Net Cash Used In Financing Activities | (1.6) | 10.5 | - Financing activities shifted from net cash inflow to net outflow, mainly due to repayment of lease liabilities[51](index=51&type=chunk) [Capital Structure](index=15&type=section&id=Capital%20Structure) Capital Structure (HKD million) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Assets | 1,018.1 | 967.7 | | Shareholders' Equity | 702.7 | 690.1 | - The Group's capital structure is primarily composed of ordinary shares[52](index=52&type=chunk) [Other Financial Information](index=15&type=section&id=Other%20Financial%20Information) [Other Financial Information](index=15&type=section&id=Other%20Financial%20Information) The Group maintains treasury policies to manage risks and ensure funding, with a 2.3% capital gearing ratio as of June 30, 2025, reporting no significant acquisitions, foreign exchange risks, asset pledges, or contingent liabilities, and no interim dividend declared - The Group has established treasury policies to monitor risks and ensure sufficient funding[53](index=53&type=chunk) Capital Gearing Ratio | Metric | June 30, 2025 | | :--- | :--- | | Capital Gearing Ratio | 2.3% | - No significant acquisitions, foreign exchange risks, asset pledges, or contingent liabilities occurred during the period. The Board resolved not to declare an interim dividend[55](index=55&type=chunk)[56](index=56&type=chunk)[57](index=57&type=chunk)[58](index=58&type=chunk)[59](index=59&type=chunk) [Treasury Policy](index=15&type=section&id=Treasury%20Policy) - The Group has established policies to monitor risks related to business operations and treasury activities, ensuring timely fulfillment of financial obligations and sufficient funding sources[53](index=53&type=chunk) [Capital Gearing Ratio](index=15&type=section&id=Capital%20Gearing%20Ratio) Capital Gearing Ratio | Metric | June 30, 2025 | | :--- | :--- | | Capital Gearing Ratio | 2.3% | [Significant Acquisitions and Disposals](index=15&type=section&id=Significant%20Acquisitions%20and%20Disposals) - The Group had no significant acquisitions or disposals of subsidiaries, associates, and joint ventures during the period[55](index=55&type=chunk) [Foreign Exchange Risk](index=16&type=section&id=Foreign%20Exchange%20Risk) - As most of the Group's revenue and costs are denominated in RMB, there is no significant foreign exchange risk[56](index=56&type=chunk) [Pledge of Assets](index=16&type=section&id=Pledge%20of%20Assets) - The Group did not pledge any assets as of June 30, 2025, and December 31, 2024[57](index=57&type=chunk) [Contingent Liabilities](index=16&type=section&id=Contingent%20Liabilities) - As of June 30, 2025, the Group had no material contingent liabilities[58](index=58&type=chunk) [Interim Dividend](index=16&type=section&id=Interim%20Dividend) - The Board resolved not to declare any interim dividend for the period[59](index=59&type=chunk) [Financial Statements](index=17&type=section&id=Financial%20Statements) [Financial Information](index=17&type=section&id=Financial%20Information) This section presents the Group's unaudited condensed consolidated financial statements for the six months ended June 30, 2025, including the statement of profit or loss and other comprehensive income, statement of financial position, and statement of changes in equity, detailing financial performance, asset-liability status, and equity changes - Provided the Group's unaudited condensed consolidated statement of profit or loss and other comprehensive income, statement of financial position, and statement of changes in equity for the six months ended June 30, 2025[60](index=60&type=chunk)[62](index=62&type=chunk)[64](index=64&type=chunk) [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=17&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) Key Data from Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (HKD '000) | Metric | H1 2025 | H1 2024 (Restated) | | :--- | :--- | :--- | | Revenue | 152,547 | 208,311 | | Gross Profit | 37,899 | 80,550 | | Loss for the Period | (12,131) | (16,604) | | Other Comprehensive Income for the Period | 24,051 | (34,096) | | Total Comprehensive Income for the Period | 11,920 | (50,700) | | Basic and Diluted Loss Per Share (HK cents) | (0.27) | (0.37) | - Total comprehensive income for the period turned from negative in the prior period to positive, mainly influenced by exchange differences and fair value changes of financial assets within other comprehensive income[60](index=60&type=chunk) [Condensed Consolidated Statement of Financial Position](index=19&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) Key Data from Condensed Consolidated Statement of Financial Position (HKD '000) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Assets | 1,018,056 | 967,745 | | Non-current Assets | 793,733 | 770,054 | | Current Assets | 224,323 | 197,691 | | Current Liabilities | 307,468 | 273,208 | | Non-current Liabilities | 6,275 | 2,144 | | Net Assets | 704,313 | 692,393 | - Both total assets and net assets increased, reflecting an improvement in the Group's financial position[62](index=62&type=chunk)[63](index=63&type=chunk) - Net current liabilities were negative, indicating that current assets were insufficient to cover current liabilities, putting pressure on working capital[63](index=63&type=chunk) [Condensed Consolidated Statement of Changes in Equity](index=21&type=section&id=Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) Summary of Changes in Equity (HKD '000) | Metric | June 30, 2025 | January 1, 2025 | | :--- | :--- | :--- | | Equity Attributable to Owners of the Company | 702,654 | 690,778 | | Total Comprehensive Income for the Period | 11,920 | - | - The increase in total equity was primarily due to the contribution from other comprehensive income, offsetting the loss for the period[64](index=64&type=chunk) [Notes to the Financial Statements](index=22&type=section&id=Notes%20to%20the%20Financial%20Statements) [Notes](index=22&type=section&id=Notes) This section provides detailed notes to the condensed consolidated interim financial statements, covering general information, basis of preparation (including restatement), accounting policies, judgments, estimates, segment reporting, revenue, other income/losses, finance costs, loss before tax, income tax, EPS, PPE, associate interests, receivables, payables, bank borrowings, and commitments - Detailed the basis of preparation for the financial statements, including preparation in accordance with HKAS 34, and disclosed the restatement of 2024 comparative figures due to reclassification of financial assets[66](index=66&type=chunk)[69](index=69&type=chunk) - The Group has only one reportable operating segment, digital sports entertainment, with Chinese customers contributing over **95% of revenue**[75](index=75&type=chunk)[76](index=76&type=chunk) - Disclosed details of various expenses, including staff costs, depreciation, amortization of intangible assets, as well as income tax calculation and applicable preferential tax rates[80](index=80&type=chunk)[81](index=81&type=chunk) [1. General Information](index=22&type=section&id=1.%20General%20Information) - The Company is listed on the Main Board of the Hong Kong Stock Exchange, with its principal business in digital sports entertainment, covering sports knowledge payment, betting, event operation, digital collectibles, game publishing, and lottery sales[65](index=65&type=chunk) [2. Basis of Preparation](index=22&type=section&id=2.%20Basis%20of%20Preparation) - The financial statements were prepared in accordance with HKAS 34 and the Listing Rules, and authorized for issue on **August 27, 2025**[66](index=66&type=chunk) - 2024 comparative figures were restated due to reclassification of investment funds, with no impact on operating, investing, and financing cash flows[69](index=69&type=chunk)[70](index=70&type=chunk) [(a) Basis of Preparation](index=22&type=section&id=(a)%20Basis%20of%20Preparation) - The condensed consolidated interim financial statements were prepared in accordance with HKAS 34 and the disclosure requirements of the Listing Rules, and authorized for issue on **August 27, 2025**[66](index=66&type=chunk) [(b) Restatement](index=23&type=section&id=(b)%20Restatement) - Certain accounts as of January 1, 2024, and June 30, 2024, were restated due to reclassification of investment funds, but this had no impact on operating, investing, and financing cash flows[69](index=69&type=chunk)[70](index=70&type=chunk) [3. Accounting Policies](index=24&type=section&id=3.%20Accounting%20Policies) - The accounting policies applied are consistent with those adopted in the Group's consolidated financial statements for the year ended December 31, 2024[71](index=71&type=chunk) - New or amended Hong Kong Financial Reporting Standards effective from **January 1, 2025**, had no significant impact on the Group's condensed consolidated interim financial statements[73](index=73&type=chunk) [4. Use of Judgments and Estimates](index=24&type=section&id=4.%20Use%20of%20Judgments%20and%20Estimates) - The preparation of financial statements involves management's judgments, estimates, and assumptions, and actual results may differ[74](index=74&type=chunk) [5. Segment Reporting](index=24&type=section&id=5.%20Segment%20Reporting) - The Group has only one reportable operating segment: digital sports entertainment business[75](index=75&type=chunk) - Chinese customers contributed over **95% of the Group's revenue**, and over **90% of non-current assets** are located in China[76](index=76&type=chunk) [(a) Reportable Segments](index=24&type=section&id=(a)%20Reportable%20Segments) - The Group has only one reportable operating segment, digital sports entertainment business, covering sports knowledge payment, betting, event operation, digital collectibles, game publishing, and lottery sales[75](index=75&type=chunk) [(b) Geographical Information](index=24&type=section&id=(b)%20Geographical%20Information) - For the six months ended June 30, 2025, Chinese customers accounted for over **95% of the Group's revenue**, and over **90% of non-current assets** are located in China[76](index=76&type=chunk) [6. Revenue](index=25&type=section&id=6.%20Revenue) Revenue Breakdown (HKD '000) | Business Segment | 2025 | 2024 | | :--- | :--- | :--- | | Sports Knowledge Payment Platform | 97,908 | 124,985 | | Sports and Casual Games | 46,592 | 76,707 | | Lottery-related Commission Income | 4,347 | 6,210 | | Sports Event Operation | 3,661 | – | | Digital Collectibles Platform | 39 | 409 | | **Total Revenue** | **152,547** | **208,311** | - The majority of revenue (**HKD 148.8 million**) is recognized over time, reflecting subscription or continuous service models[77](index=77&type=chunk) [7. Other Income and Losses, Net](index=25&type=section&id=7.%20Other%20Income%20and%20Losses,%20Net) Other Income and Losses, Net Breakdown (HKD '000) | Metric | 2025 | 2024 (Restated) | | :--- | :--- | :--- | | Net Exchange (Loss) / Gain | (3,156) | 2,907 | | Fair Value Gains / (Losses) on Financial Assets | 7,771 | (10,885) | | **Total** | **4,593** | **(7,861)** | [8. Finance Costs](index=26&type=section&id=8.%20Finance%20Costs) Finance Costs Breakdown (HKD '000) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Interest on Lease Liabilities | 117 | 113 | | Interest on Bank Borrowings | 168 | 185 | | **Total** | **285** | **298** | [9. Loss Before Income Tax](index=26&type=section&id=9.%20Loss%20Before%20Income%20Tax) Components of Loss Before Income Tax (HKD '000) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Staff Costs | 8,735 | 10,810 | | Depreciation of Property, Plant and Equipment | 122 | 324 | | Depreciation of Right-of-Use Assets | 1,220 | 1,440 | | Amortization of Intangible Assets Included in Cost of Revenue | 23,070 | 12,784 | | Expected Credit Losses | – | 3,330 | | Auditors' Remuneration | 150 | 150 | - Amortization of intangible assets significantly increased by **80.5%** year-on-year, representing a key factor in the composition of loss for the period[80](index=80&type=chunk) [10. Income Tax Expense / (Credit)](index=27&type=section&id=10.%20Income%20Tax%20Expense%20/%20(Credit)) Income Tax Expense / (Credit) (HKD '000) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Current Tax - PRC Enterprise Income Tax | 331 | 2 | | Deferred Tax | – | (499) | | **Income Tax Expense / (Credit)** | **331** | **(497)** | - PRC subsidiaries enjoy preferential tax rates for high-tech enterprises or economic special zones, such as **Beijing Crazy Sports at 15%**, **Horgos Crazy at 12.5%**, and **Horgos Kairuisi exemption**[81](index=81&type=chunk) [11. Loss Per Share Attributable to Owners of the Company](index=28&type=section&id=11.%20Loss%20Per%20Share%20Attributable%20to%20Owners%20of%20the%20Company) Loss Per Share (HK cents) | Metric | 2025 | 2024 (Restated) | | :--- | :--- | :--- | | Basic Loss Per Share | (0.27) | (0.37) | | Diluted Loss Per Share | (0.27) | (0.37) | - Loss per share narrowed, and unexercised share options had no dilutive effect as their exercise price was higher than the market price[82](index=82&type=chunk) [12. Changes in Property, Plant and Equipment](index=28&type=section&id=12.%20Changes%20in%20Property,%20Plant%20and%20Equipment) Acquisition of Property, Plant and Equipment (HKD '000) | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Acquisition Amount | 78 | 30 | [13. Interests in an Associate](index=29&type=section&id=13.%20Interests%20in%20an%20Associate) - The Group ceased to recognize its share of losses from an associate (Asia Bank) as the losses exceeded its interest, with accumulated unrecognized losses of **HKD 9,959,000**[84](index=84&type=chunk) - The associate, Asia Bank, was ordered into provisional liquidation on **May 28, 2025**[85](index=85&type=chunk) [14. Trade and Other Receivables](index=30&type=section&id=14.%20Trade%20and%20Other%20Receivables) Trade and Other Receivables, Net (HKD '000) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Trade and Other Receivables, Net | 87,896 | 82,815 | Ageing Analysis of Trade and Other Receivables (HKD '000) | Ageing | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Within 6 months | 69,226 | 72,414 | | Over 6 months but within 1 year | 18,670 | 10,401 | [15. Trade and Other Payables](index=30&type=section&id=15.%20Trade%20and%20Other%20Payables) Trade and Other Payables (HKD '000) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Trade Payables | 37,475 | 13,359 | | Accruals and Other Payables | 89,900 | 80,455 | | **Total** | **127,375** | **93,814** | - Total trade payables significantly increased, with trade payables within six months rising from **HKD 3.1 million** to **HKD 26.2 million**[87](index=87&type=chunk) [16. Bank Borrowings](index=31&type=section&id=16.%20Bank%20Borrowings) Bank Borrowings (HKD '000) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Repayable within one year | 10,945 | 15,960 | | Repayable after one year | 5,472 | – | | **Total** | **16,417** | **15,960** | - Secured bank borrowings are personally guaranteed, while unsecured borrowings bear interest at an annual rate of **0.65%**[90](index=90&type=chunk) - The Group had no unutilized bank facilities and did not breach any loan covenants[90](index=90&type=chunk) [17. Commitments](index=32&type=section&id=17.%20Commitments) Contracted but Not Provided For Commitments (HKD '000) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Intangible Assets | 3,283 | 3,192 | [18. Related Party Transactions](index=32&type=section&id=18.%20Related%20Party%20Transactions) Remuneration of Directors and Other Key Management Personnel (HKD '000) | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Short-term Benefits | 7,832 | 8,890 | - Amounts due to related companies are interest-free, unsecured, and repayable on demand[93](index=93&type=chunk) - Some of the Group's bank borrowings are personally guaranteed by a director (Mr. Peng Xitao) or a subsidiary director (Mr. Wei Guilei) or by corporate guarantees[95](index=95&type=chunk) [Other Information](index=33&type=section&id=Other%20Information) [Other Information](index=33&type=section&id=Other%20Information) In H1 2025, the Group maintained compliance with corporate governance codes, employed 107 staff, and used share option schemes for incentives, with directors confirming adherence to securities transaction standards; no listed securities were bought, redeemed, or sold, and interim results were reviewed by the Audit Committee, with no significant post-reporting events - The Group consistently complied with the Corporate Governance Code, and directors confirmed adherence to the Model Code for Securities Transactions[96](index=96&type=chunk)[100](index=100&type=chunk) - As of **June 30, 2025**, the Group employed **107 staff** and incentivized employees through a share option scheme[98](index=98&type=chunk) - No listed securities were purchased, redeemed, or sold during the period, and the interim results were reviewed by the Audit Committee[101](index=101&type=chunk)[102](index=102&type=chunk) [Compliance with Corporate Governance Practices](index=33&type=section&id=Compliance%20with%20Corporate%20Governance%20Practices) - The Company has consistently applied and complied with all applicable code provisions of the Corporate Governance Code set out in Appendix C1 of the Listing Rules for the six months ended June 30, 2025[96](index=96&type=chunk) [Employee Remuneration and Benefits](index=33&type=section&id=Employee%20Remuneration%20and%20Benefits) - As of **June 30, 2025**, the Group employed a total of **107 staff**[98](index=98&type=chunk) - The Group incentivizes directors, senior management, and other employees through a share option scheme and provides regular training to enhance skills and knowledge[98](index=98&type=chunk)[99](index=99&type=chunk) [Compliance with the Model Code for Securities Transactions by Directors](index=33&type=section&id=Compliance%20with%20the%20Model%20Code%20for%20Securities%20Transactions%20by%20Directors) - Following specific inquiries to all directors, each director confirmed compliance with the required standards set out in the Model Code during the period[100](index=100&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=34&type=section&id=Purchase,%20Sale%20or%20Redemption%20of%20the%20Company's%20Listed%20Securities) - During the period, neither the Company nor any of its subsidiaries purchased, redeemed, or sold any of the Company's listed securities on the Stock Exchange[101](index=101&type=chunk) [Review by Audit Committee](index=34&type=section&id=Review%20by%20Audit%20Committee) - The Group's unaudited interim financial results for the period have been reviewed by the Audit Committee, which comprises four independent non-executive directors[102](index=102&type=chunk) [Publication of Interim Results Announcement and Interim Report](index=34&type=section&id=Publication%20of%20Interim%20Results%20Announcement%20and%20Interim%20Report) - This interim results announcement is published on the Company's website and the website of Hong Kong Exchanges and Clearing Limited, and the interim report will be dispatched to shareholders and published on the website[103](index=103&type=chunk) [Events After Reporting Period](index=34&type=section&id=Events%20After%20Reporting%20Period) - Save as disclosed in this announcement, no other significant events affecting the Group occurred after June 30, 2025, and up to the date of this announcement[104](index=104&type=chunk) [Acknowledgement](index=34&type=section&id=Acknowledgement) - The Board sincerely thanks customers, merchants, and partners for their trust, all employees and management for their outstanding contributions, and shareholders for their continued support[105](index=105&type=chunk) [Definitions and Glossary](index=35&type=section&id=Definitions%20and%20Glossary) [Definitions and Technical Glossary](index=35&type=section&id=Definitions%20and%20Technical%20Glossary) This section defines key terms and technical vocabulary used throughout the report, ensuring consistent understanding of concepts such as "Audit Committee," "the Group," "Listing Rules," "AI," "HKD," "IP," and other financial and operational terminology - Provided definitions for key terms and technical vocabulary used in the report, ensuring consistent understanding of the report's content[106](index=106&type=chunk)[107](index=107&type=chunk)[108](index=108&type=chunk)

香 港 交 易 及 結 算 所 有 限 公 司 及 香 港 聯 合 交 易 所 有 限 公 司 對 本 公 告 的 內 容 概 不 負 責 ， 對 其 準 確 性 或 完 整 性 亦 不 發 表 任 何 聲 明 ， 並 明 確 表 示 ， 概 不 對 因 本 公 告 全 部 或 任 何部分內容而產生或因倚賴該等內容而引致的任何損失承擔任何責任。 ( 於香港註冊成立的有限公司 (股份代號: 01203) 截至2025年6月30日止六個月 之中期業績公告 粵 海 廣 南 （ 集 團 ） 有 限 公 司 （「本公司」）之董事 （「董事」）會 （「董事會」） 欣 然 提 呈 本 公 司 及 其 附 屬 公 司 （ 統 稱 「 本 集 團 」 ） 截 至 2025年 6月 30日止六 個 月 之 中 期 業 績 。 | 截 至 6 30 | 月 | 日 止 六 個 月 未 經 審 核 之 財 務 摘 要 | | | | | --- | --- | --- | --- | --- | --- | | | | | 2025 年 | 2024 年 | | | | | | 千港元 | 千港元 | 變動 | | 收入 | | | ...

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告之內容概不負責， 對 其 準 確 性 或 完 整 性 亦 不 發 表 任 何 聲 明，並 明 確 表 示，概 不 就 因 本 公 告 全 部 或 任 何部分內容而產生或因倚賴該等內容而引致之任何損失承擔任何責任。 Chengdu Expressway Co., Ltd. 成都高速公路股份有限公司 （於中華人民共和國註冊成立的股份有限公司） （股份代號：01785） 2025年中期業績公告 成 都 高 速 公 路 股 份 有 限 公 司（「本公司」）董 事 會（「董事會」）謹 此 宣 佈 本 公 司 及 附 屬 公 司（「本集團」）截 至2025年6月30日 止 六 個 月 期 間 未 經 審 計 業 績 公 告。本 公 告 刊 載 本公司2025年 中 期 報 告 全 文，符 合 香 港 聯 合 交 易 所 有 限 公 司（「聯交所」）證 券 上 市 規 則 中 有 關 中 期 業 績 初 步 公 告 附 載 的 資 料 要 求，並 經 本 公 司 董 事 會 審 計 與 風 險 管 理 委 員 會 審 閱。本 公 司2025年中期報告將於2025年9月 ...

Announcement Overview [Company Information](index=1&type=section&id=%E5%85%AC%E5%8F%B8%E4%BF%A1%E6%81%AF) This announcement presents the interim results for the six months ended June 30, 2025, for Guanze Medical Information Industry (Holding) Co., Ltd. (Stock Code: 2427), including changes in the use of net proceeds from the global offering - Company Name: Guanze Medical Information Industry (Holding) Co., Ltd. - Stock Code: **2427**[2](index=2&type=chunk) - Registered Place: A limited liability company incorporated in the Cayman Islands[2](index=2&type=chunk) [Reporting Period](index=1&type=section&id=%E6%8A%A5%E5%91%8A%E6%9C%9F%E9%97%B4) This report covers the Group's unaudited condensed consolidated interim results for the six months ended June 30, 2025 - Reporting Period: Six months ended June 30, 2025[2](index=2&type=chunk)[3](index=3&type=chunk) - Report Nature: Unaudited condensed consolidated interim results announcement[3](index=3&type=chunk) Condensed Consolidated Interim Financial Statements [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=1&type=section&id=%E4%B8%AD%E6%9C%9F%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E6%90%8D%E7%9B%8A%E5%8F%8A%E5%85%B6%E4%BB%96%E5%85%A8%E9%9D%A2%E6%94%B6%E7%9B%8A%E8%A1%A8) For the six months ended June 30, 2025, the Group achieved a profit of RMB 3,438 thousands, reversing the loss from the same period last year, with total revenue decreasing by 20.3% to RMB 31,855 thousands, but profit before tax and earnings per share significantly improved Profit or Loss and Other Comprehensive Income Key Data | Indicator | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | | :--- | :--- | :--- | | Revenue | 31,855 | 40,030 | | Cost of Sales | (18,472) | (18,150) | | Gross Profit | 13,383 | 21,880 | | Other Income and Other Gains and Losses | 6,140 | 1,319 | | Selling and Distribution Expenses | (5,727) | (8,451) | | Administrative Expenses | (6,773) | (6,858) | | Research and Development Expenses | (2,265) | (1,508) | | Reversal of/(Provision for) Impairment Losses on Trade and Other Receivables | 1,088 | (1,643) | | Finance Costs | (298) | (264) | | Other Expenses | (985) | (1,674) | | Profit Before Tax | 4,563 | 2,801 | | Income Tax Expense | (1,125) | (2,938) | | **Profit/(Loss) and Total Comprehensive Income/(Expense) for the Period** | **3,438** | **(137)** | Profit Attributable to Owners of the Company and Earnings Per Share | Indicator | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Profit/(Loss) Attributable to Owners of the Company (RMB thousands) | 3,368 | (160) | | Non-controlling Interests (RMB thousands) | 70 | 23 | | **Basic and Diluted Earnings/(Loss) Per Share** | **RMB 0.003 yuan** | **RMB (0.0002) yuan** | [Condensed Consolidated Statement of Financial Position](index=3&type=section&id=%E4%B8%AD%E6%9C%9F%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81%E8%A1%A8) As of June 30, 2025, the Group's total non-current assets increased, total current assets slightly decreased, but total current liabilities reduced, maintaining a robust net current asset position, with both net assets and total equity growing Financial Position Key Data | Indicator | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | **Non-current Assets** | | | | Property, Plant and Equipment | 58,555 | 48,624 | | Total Non-current Assets | 69,640 | 58,686 | | **Current Assets** | | | | Inventories | 23,768 | 14,371 | | Trade and Bills Receivables | 137,320 | 174,190 | | Cash and Cash Equivalents | 33,975 | 28,226 | | Total Current Assets | 235,427 | 245,482 | | **Current Liabilities** | | | | Trade Payables | 3,527 | 560 | | Bank Borrowings | 15,045 | 17,712 | | Total Current Liabilities | 40,505 | 43,507 | | **Net Current Assets** | **194,922** | **201,975** | | **Net Assets** | **264,562** | **260,506** | | **Total Equity** | **264,562** | **260,506** | Notes to the Condensed Consolidated Interim Financial Statements [1. General Information](index=5&type=section&id=1.%20%E4%B8%80%E8%88%AC%E8%B3%87%E6%96%99) The Group was incorporated in the Cayman Islands as an investment holding company on December 11, 2020, and listed on the Main Board of the Hong Kong Stock Exchange on December 29, 2022, primarily engaged in selling medical imaging film products, providing medical imaging cloud services, and selling software in China - The Company was incorporated as a limited liability company in the Cayman Islands on December 11, 2020, as an investment holding company[7](index=7&type=chunk) - The Company's shares were listed on the Main Board of The Stock Exchange of Hong Kong Limited on December 29, 2022[7](index=7&type=chunk) - The Group's principal businesses include sales of medical imaging film products, provision of medical imaging cloud services, and sales of software[7](index=7&type=chunk)[10](index=10&type=chunk) [2. Basis of Preparation](index=5&type=section&id=2.%20%E7%B7%A8%E8%A3%BD%E5%9F%BA%E6%BA%96) The condensed consolidated financial statements are prepared in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting" issued by the Hong Kong Institute of Certified Public Accountants and the applicable disclosure requirements of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited - Financial statements are prepared in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting" and applicable disclosure requirements of the Listing Rules of the Stock Exchange[8](index=8&type=chunk) [3. Accounting Policies](index=5&type=section&id=3.%20%E6%9C%83%E8%A8%88%E6%94%BF%E7%AD%96) The condensed consolidated financial statements are prepared on a historical cost basis, consistent with the accounting policies and methods of computation used in the annual consolidated financial statements for the year ended December 31, 2024, with no significant impact from the first-time application of revised Hong Kong Financial Reporting Standards during this interim period - Basis of preparation: Historical cost basis, except for certain financial instruments measured at fair value (where applicable)[9](index=9&type=chunk) - Consistency of accounting policies: Consistent with those presented in the annual consolidated financial statements for the year ended December 31, 2024[9](index=9&type=chunk) - Application of revised Hong Kong Financial Reporting Standards: First applied during this interim period, but with no significant impact on the Group's financial position and performance[11](index=11&type=chunk) [4. Operating Segment Information](index=6&type=section&id=4.%20%E7%B6%93%E7%87%9F%E5%88%86%E9%83%A8%E8%B3%87%E6%96%99) The Group has only one reportable operating segment, with all revenue and non-current assets generated and held in China, thus no geographical segments are presented; this period saw a decrease in the proportion of medical imaging film product sales revenue and a significant increase in software sales revenue - Reportable operating segment: The Group has only one reportable operating segment, measured based on profit before tax[12](index=12&type=chunk) - Geographical segments: Not presented, as all revenue is generated in China and non-current assets are located in China[12](index=12&type=chunk) Operating Revenue Composition | Revenue Source | H1 2025 Share | H1 2024 Share | | :--- | :--- | :--- | | Sales of Medical Imaging Film Products | 60% | 68% | | Provision of Medical Imaging Cloud Services | 6% | 16% | | Sales of Software | 34% | 16% | Major Customer Revenue | Customer | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | | :--- | :--- | :--- | | Customer A | 10,726 | N/A (below 10%) | | Customer B | N/A (below 10%) | 5,822 | [5. Revenue, Other Income and Other Gains and Losses](index=7&type=section&id=5.%20%E6%94%B6%E5%85%A5%E3%80%81%E5%85%B6%E4%BB%96%E6%94%B6%E5%85%A5%E5%92%8C%E5%85%B6%E4%BB%96%E6%94%B6%E7%9B%8A%E5%8F%8A%E8%99%A7%E6%90%8D) Total revenue for the period decreased by 20.3%, primarily due to reduced income from medical imaging film products and medical imaging cloud services, though software sales revenue grew significantly, while other income and gains and losses substantially increased, mainly driven by government grants [Revenue Analysis](index=7&type=section&id=%E6%94%B6%E5%85%A5%E5%88%86%E6%9E%90) Revenue from Contracts with Customers by Type of Goods or Services | Revenue Type | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | | :--- | :--- | :--- | | Sales of Medical Imaging Film Products | 19,169 | 27,346 | | Provision of Medical Imaging Cloud Services | 1,960 | 6,419 | | Sales of Software | 10,726 | 6,265 | | **Total** | **31,855** | **40,030** | Timing of Revenue Recognition | Recognition Method | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | | :--- | :--- | :--- | | Goods transferred at a point in time | 29,895 | 33,611 | | Services transferred over time | 1,960 | 6,419 | | **Total** | **31,855** | **40,030** | [Contract Liabilities](index=8&type=section&id=%E5%90%88%E7%B4%84%E8%B2%A0%E5%82%B5) - Contract liabilities refer to the Group's obligation to provide services to customers for which consideration has been received[18](index=18&type=chunk) Revenue Recognized from Contract Liabilities | Indicator | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | | :--- | :--- | :--- | | Revenue recognized, included in beginning balance of contract liabilities | 536 | 384 | [Performance Obligations](index=8&type=section&id=%E5%B1%A5%E7%B4%84%E7%BE%A9%E5%8B%99) - Sales of medical imaging film products: Performance obligations are satisfied upon acceptance of consumables, with payment generally due within 90 to 365 days after customer acceptance[22](index=22&type=chunk) - Provision of medical imaging cloud services: Performance obligations are satisfied progressively as services are provided, with payment made in advance along with medical imaging film products[23](index=23&type=chunk) - Sales of software: Performance obligations are recognized when software is delivered and the customer has the ability to use and benefit from the software, with payment generally due within 365 days after customer acceptance[24](index=24&type=chunk) Transaction Price Allocated to Remaining Performance Obligations | Term | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Within one year | 3,512 | 5,691 | | Over one year | 2,516 | 5,964 | | **Total** | **6,028** | **11,655** | [Other Income and Other Gains and Losses Analysis](index=9&type=section&id=%E5%85%B6%E4%BB%96%E6%94%B6%E5%85%A5%E5%92%8C%E6%94%B6%E7%9B%8A%E5%8F%8A%E8%99%A7%E6%90%8D%E5%88%86%E6%9E%90) Other Income and Other Gains and Losses | Item | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | | :--- | :--- | :--- | | Interest on bank deposits | 52 | 599 | | Government grants | 6,097 | 507 | | Gain on early termination of lease contracts | 4 | — | | Net exchange (loss)/gain | (70) | 212 | | Others | 57 | 1 | | **Total** | **6,140** | **1,319** | - Government grants primarily refer to subsidies received from local governments for rewarding the Group's financial contributions and VAT subsidies, with no unfulfilled conditions attached[26](index=26&type=chunk) [6. Profit Before Tax](index=10&type=section&id=6.%20%E9%99%A4%E7%A8%85%E5%89%8D%E6%BA%A2%E5%88%A9) The Group's profit before tax for the six months ended June 30, 2025, was RMB 4,563 thousands, an increase from the same period last year, with major deductions including cost of inventories sold, employee benefit expenses, research and development costs, depreciation, and amortisation Major Deductions from Profit Before Tax | Item | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | | :--- | :--- | :--- | | Cost of inventories sold | 16,988 | 16,317 | | Cost of services provided | 855 | 1,833 | | Employee benefit expenses | 6,446 | 7,112 | | Research and development costs (excluding employee benefit expenses) | 520 | 29 | | Depreciation of property, plant and equipment | 3,144 | 3,005 | | Depreciation of right-of-use assets | 186 | 281 | | Amortisation of intangible assets | 644 | 14 | | Loss on disposal of property, plant and equipment | 985 | 1,567 | [7. Income Tax Expense](index=10&type=section&id=7.%20%E6%89%80%E5%BE%97%E7%A8%85%E9%96%8B%E6%94%AF) Income tax expense for the period was RMB 1,125 thousands, a significant year-on-year decrease of 62.1%, mainly due to over-provision of tax in the period and deferred tax income generated, with Jinan Guanze, a Group subsidiary, enjoying a 15% preferential corporate income tax rate as a high-tech enterprise Income Tax Expense Analysis | Item | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | | :--- | :--- | :--- | | PRC enterprise income tax (current year) | 1,121 | 3,349 | | Over-provision in prior years | (857) | — | | Deferred tax | 861 | (411) | | **Income tax expense for the period** | **1,125** | **2,938** | - Jinan Guanze (a subsidiary of the Group) is recognised as a high-tech enterprise, enjoying a **15% preferential corporate income tax rate**, and was renewed in 2024[30](index=30&type=chunk) [8. Dividends](index=11&type=section&id=8.%20%E8%82%A1%E6%81%AF) The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025, following the final dividend of HKD 2.1 cents per ordinary share declared on March 28, 2024, for the year ended December 31, 2023 - H1 2025: No interim dividend is recommended[32](index=32&type=chunk) - March 28, 2024: A final dividend of **HKD 2.1 cents per ordinary share** for the year ended December 31, 2023, totaling approximately **RMB 18,194 thousands**, was declared[32](index=32&type=chunk) [9. Earnings/(Loss) Per Share](index=11&type=section&id=9.%20%E6%AF%8F%E8%82%A1%E7%9B%88%E5%88%A9%E2%95%9F%EF%BC%88%E8%99%A7%E6%90%8D%EF%BC%89) Basic and diluted earnings per share attributable to owners of the Company for the period was RMB 0.003 yuan, a significant improvement from the loss per share of RMB (0.0002) yuan in the prior year, primarily due to the period's profit turnaround, with no diluted adjustment made as there were no outstanding potential dilutive ordinary shares Earnings/(Loss) Per Share Calculation Data | Indicator | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | | :--- | :--- | :--- | | Profit/(Loss) for the period attributable to owners of the Company for basic and diluted earnings/(loss) per share calculation | 3,368 | (160) | | Weighted average number of ordinary shares for basic and diluted earnings/(loss) per share calculation | 936,082,000 | 943,020,500 | | **Basic and Diluted Earnings/(Loss) Per Share** | **RMB 0.003 yuan** | **RMB (0.0002) yuan** | - No adjustment was made to basic earnings/(loss) per share for dilution as there were no outstanding potential dilutive ordinary shares during the period[36](index=36&type=chunk) [10. Trade and Bills Receivables](index=12&type=section&id=10.%20%E8%B2%BF%E6%98%93%E6%87%89%E6%94%B6%E6%AC%BE%E9%A0%85%E5%8F%8A%E6%87%89%E6%94%B6%E7%A5%A8%E6%93%9A) As of June 30, 2025, the Group's net trade and bills receivables amounted to RMB 137,320 thousands, a decrease from the end of 2024, with reduced provision for credit losses and the Group using an expected credit loss model for impairment analysis Net Trade and Bills Receivables | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Trade receivables | 138,343 | 178,519 | | Bills receivables | 5,425 | 3,624 | | Less: provision for credit losses | (6,448) | (7,953) | | **Net amount** | **137,320** | **174,190** | Aging Analysis of Trade Receivables | Aging | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Within 1 year | 129,927 | 163,215 | | 1 to 2 years | 1,968 | 7,351 | | **Total** | **131,895** | **170,566** | Movement in Provision for Credit Losses | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Beginning balance | 7,953 | 4,754 | | Reversal of/(provision for) impairment losses on trade receivables | (1,505) | 3,199 | | **Ending balance** | **6,448** | **7,953** | - Impairment analysis uses an expected credit loss model, with expected credit loss rates based on days past due for customer groups with similar loss patterns[38](index=38&type=chunk) [11. Trade Payables](index=14&type=section&id=11.%20%E8%B2%BF%E6%98%93%E6%87%89%E4%BB%98%E6%AC%BE%E9%A0%85) As of June 30, 2025, the Group's total trade payables amounted to RMB 3,527 thousands, a significant increase from the end of 2024, all due within one year and non-interest bearing Aging Analysis of Trade Payables | Aging | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Within 1 year | 3,527 | 560 | | **Total** | **3,527** | **560** | - Trade payables are non-interest bearing[40](index=40&type=chunk) [12. Bank Borrowings](index=14&type=section&id=12.%20%E9%8A%80%E8%A1%8C%E5%80%9F%E6%AC%BE) As of June 30, 2025, the Group's total bank borrowings were RMB 15,045 thousands, a decrease from the end of 2024, with RMB 7,500 thousands secured and the remainder unsecured, bearing effective interest rates ranging from 3.10% to 3.90% per annum, all denominated in functional currency Bank Borrowings Composition | Type | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Secured | 7,500 | 7,500 | | Unsecured | 7,545 | 10,212 | | **Total** | **15,045** | **17,712** | - Secured bank borrowings are collateralized by the Group's buildings with a net book value of approximately **RMB 8,051 thousands**[41](index=41&type=chunk) Bank Borrowings Effective Interest Rate | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Effective interest rate on fixed-rate bank borrowings | 3.10% to 3.90% per annum | 3.10% to 3.90% per annum | - All of the Group's bank borrowings are denominated in the same currency as the functional currency of the relevant Group entities[45](index=45&type=chunk) Undrawn Bank Borrowing Facilities | Type | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Fixed-rate — Expiring after one year | 3,200 | — | Business and Financial Review [Business Review](index=16&type=section&id=%E6%A5%AD%E5%8B%99%E5%9B%9E%E9%A1%A7) The Group, as a comprehensive medical imaging solution provider in Shandong Province, primarily offers medical imaging film products and medical imaging cloud services, with software sales revenue significantly increasing this period, while both medical imaging film product and medical imaging cloud service revenues declined - The Company is a comprehensive medical imaging solution provider based in Shandong Province, primarily engaged in providing medical imaging film products and medical imaging cloud services[48](index=48&type=chunk) - The Group has been distributing international medical imaging film products since 2016, offering self-owned brand products since 2018, and entered the medical imaging cloud services market in 2017[49](index=49&type=chunk) [1. Sales of Medical Imaging Film Products and Software](index=16&type=section&id=1.%20%E9%8A%B7%E5%94%AE%E9%86%AB%E7%94%A8%E5%BD%B1%E5%83%8F%E8%86%A0%E7%89%87%E7%94%A2%E5%93%81%E5%8F%8A%E8%BB%9F%E4%BB%B6) - Products sold include medical imaging film products purchased from international brands and self-owned "Guanze Huiyi" brand medical imaging film products and software[50](index=50&type=chunk) - Software sales revenue for H1 2025 was approximately **RMB 10.7 million** (H1 2024: RMB 6.3 million), primarily due to increased digitalization in hospitals[50](index=50&type=chunk) - Sales revenue from medical imaging film products for H1 2025 was approximately **RMB 19.2 million** (H1 2024: RMB 27.3 million), a year-on-year decrease of **29.7%**, mainly due to lower prices for medical imaging film products for some customers[50](index=50&type=chunk) [2. Provision of Medical Imaging Cloud Services](index=17&type=section&id=2.%20%E6%8F%90%E4%BE%9B%E9%86%AB%E5%AD%B8%E5%BD%B1%E5%83%8F%E9%9B%B2%E6%9C%8D%E5%8B%99) - Four types of medical imaging cloud services are provided: digital medical imaging cloud storage platform, digital medical imaging platform, regional imaging diagnosis platform, and PACS system[51](index=51&type=chunk) - Revenue from medical imaging cloud services for H1 2025 was approximately **RMB 2.0 million** (H1 2024: approximately RMB 6.4 million), a year-on-year decrease of **68.8%**[51](index=51&type=chunk) [Our Strategies](index=17&type=section&id=%E6%88%91%E5%80%91%E7%9A%84%E7%AD%96%E7%95%A5) The Group plans to further develop its business through geographical expansion, strengthening medical imaging cloud service offerings (including strategic acquisitions and software/hardware upgrades), expanding its product portfolio, brand promotion, and building its own cloud film servers - Expand into eastern Shandong Province to broaden the customer base and further consolidate market position in Shandong Province[52](index=52&type=chunk) - Enhance medical imaging cloud service offerings through strategic acquisitions, obtaining medical device registration certificates, and upgrading software and hardware[52](index=52&type=chunk) - Expand product portfolio to horizontally extend the value chain[52](index=52&type=chunk) - Participate in trade exhibitions to continuously promote the brand and increase market awareness[52](index=52&type=chunk) - Build self-owned cloud film servers[52](index=52&type=chunk) [Future Outlook](index=18&type=section&id=%E6%9C%AA%E4%BE%86%E5%B1%95%E6%9C%9B) Facing the widespread application of large language models and generative AI, the healthcare sector is moving towards digital intelligence, with Chinese policies supporting AI medical applications, increasing AI tool penetration in top-tier hospitals, and AI-assisted diagnosis in grassroots hospitals addressing resource shortages; the company plans to leverage startup technology to develop AI-assisted diagnostic software and build a smart healthcare AI system using existing cloud platform data to improve medical service quality and efficiency - 2024 marks the first year of widespread commercial application of large language models and generative AI, with the healthcare sector gradually moving towards digital intelligence development[54](index=54&type=chunk) - Chinese policies (such as the "New Generation Artificial Intelligence Development Plan") explicitly support AI medical applications, making smart healthcare a new direction for national future healthcare industry development policies[54](index=54&type=chunk)[55](index=55&type=chunk) - The Group plans to leverage the technological knowledge and professional experience of startup companies to develop AI-assisted diagnostic software, supporting medical personnel through medical image detection, confirmation, and diagnostic recommendations[55](index=55&type=chunk) - Utilize raw data such as digital medical images and diagnostic reports to establish a smart healthcare AI system, automating medical data processing, reducing the workload of doctors and nurses, and improving medical service quality and efficiency[56](index=56&type=chunk) [The Group's Business Development Strategies](index=19&type=section&id=%E6%9C%AC%E9%9B%86%E5%9C%98%E7%9A%84%E6%A5%AD%E5%8B%99%E7%99%BC%E5%B1%95%E7%AD%96%E7%95%A5) The Group is committed to strengthening operational risk management, building a strong brand strategy, and enhancing financial risk control to address market challenges and seize transformation opportunities, focusing on developing medical imaging cloud services in response to the global trend of medical imaging film digitalization and supportive Chinese government policies, with strong R&D capabilities as the cornerstone of long-term competitiveness - Strengthen operational risk management: Enhance business training, supervise all processes such as storage, sales, and installation of medical devices, and establish a recall system[57](index=57&type=chunk) - Build a strong brand strategy: Enhance the value of the brand as an intangible asset[58](index=58&type=chunk) - Strengthen financial risk control: Focus on capital operation risk control, including inventory management, preventing capital recovery risks, and strengthening working capital risk management[59](index=59&type=chunk) - Market opportunities: Global medical imaging film is transitioning from traditional to digital, and Chinese government policies (such as "Opinions of the General Office of the State Council on Promoting the Development of 'Internet + Healthcare'") support the construction of national and regional health platforms to promote data sharing, bringing huge market opportunities for medical imaging cloud services[60](index=60&type=chunk)[61](index=61&type=chunk) - R&D capabilities: The Group possesses strong R&D capabilities, which are the cornerstone of long-term competitiveness and a driving force for future growth[61](index=61&type=chunk) [Financial Review](index=21&type=section&id=%E8%B2%A1%E5%8B%99%E5%9B%9E%E9%A1%A7) The company achieved a profit of RMB 3.4 million for the period, with a net profit margin of 10.7%, reversing the loss from the prior year; total revenue decreased by 20.3%, mainly due to reduced income from medical imaging film products and medical imaging cloud services, though software sales revenue grew significantly; gross profit margin declined, but increased government grants and reduced selling and distribution expenses positively impacted profitability [Revenue](index=21&type=section&id=%E6%94%B6%E5%85%A5) - Total revenue for the period decreased by **20.3%** to approximately **RMB 31.9 million** (H1 2024: RMB 40.0 million)[63](index=63&type=chunk) - Sales revenue from medical imaging film products decreased by **29.7%** to approximately **RMB 19.2 million**, mainly due to lower product prices for some customers[63](index=63&type=chunk) - Sales revenue from software increased by **69.8%** to approximately **RMB 10.7 million**, mainly due to increased digitalization in hospitals[64](index=64&type=chunk) - Revenue from medical imaging cloud services decreased by **68.8%** to approximately **RMB 2.0 million**[65](index=65&type=chunk) [Cost of Sales](index=21&type=section&id=%E9%8A%B7%E5%94%AE%E6%88%90%E6%9C%AC) - Cost of sales for the period increased by **1.6%** to approximately **RMB 18.5 million** (H1 2024: RMB 18.2 million), primarily due to a significant decrease in unit cost of imaging film products and a **12% increase in sales volume**[66](index=66&type=chunk) [Gross Profit](index=22&type=section&id=%E6%AF%9B%E5%88%A9) - Gross profit for the period decreased by **RMB 8.5 million** to approximately **RMB 13.4 million** (H1 2024: RMB 21.9 million), mainly due to a significant decrease in revenue[67](index=67&type=chunk) - Gross profit margin for the period decreased by approximately **12.7 percentage points** to approximately **42.0%** (H1 2024: 54.7%), mainly due to a decrease in the average selling price of medical imaging film products[67](index=67&type=chunk) [Other Income and Other Gains and Losses](index=22&type=section&id=%E5%85%B6%E4%BB%96%E6%94%B6%E5%85%A5%E5%92%8C%E5%85%B6%E4%BB%96%E6%94%B6%E7%9B%8A%E5%8F%8A%E8%99%A7%E6%90%8D) - Other income and other gains and losses for the period increased by approximately **RMB 4.8 million** to approximately **RMB 6.1 million** (H1 2024: RMB 1.3 million), primarily attributable to an increase in government grant income of approximately **RMB 5.6 million**[68](index=68&type=chunk) [Selling and Distribution Expenses](index=22&type=section&id=%E9%8A%B7%E5%94%AE%E5%8F%8A%E5%88%86%E9%8A%B7%E9%96%8B%E6%94%AF) - Selling and distribution expenses for the period decreased by approximately **RMB 2.7 million** to approximately **RMB 5.7 million** (H1 2024: RMB 8.5 million), mainly due to reduced sales of medical imaging film products through distributors, leading to lower channel fees[69](index=69&type=chunk) [Administrative Expenses](index=22&type=section&id=%E8%A1%8C%E6%94%BF%E9%96%8B%E6%94%AF) - Administrative expenses for the period decreased by approximately **RMB 0.1 million** to approximately **RMB 6.8 million** (H1 2024: RMB 6.9 million), remaining stable[70](index=70&type=chunk) [Finance Costs](index=22&type=section&id=%E8%B2%A1%E5%8B%99%E6%88%90%E6%9C%AC) - Finance costs for the period were approximately **RMB 0.3 million** (H1 2024: RMB 0.3 million), remaining stable[71](index=71&type=chunk) [Income Tax Expense](index=23&type=section&id=%E6%89%80%E5%BE%97%E7%A8%85%E9%96%8B%E6%94%AF) - Income tax expense for the period decreased by approximately **RMB 1.8 million** or **62.1%** to approximately **RMB 1.1 million** (H1 2024: RMB 2.9 million), due to over-provision of tax in the period and deferred tax income generated[72](index=72&type=chunk) [Profit/(Loss) for the Period and Net Profit Margin](index=23&type=section&id=%E6%9C%9F%E5%85%A7%E6%BA%A2%E5%88%A9%E2%95%9F%E8%99%A7%E6%90%8D%E5%8F%8A%E6%B7%A8%E5%88%A9%E7%8E%87) - The Group's profit for the period was approximately **RMB 3.4 million** (H1 2024 loss: RMB 0.1 million)[73](index=73&type=chunk) - Net profit margin for the period was approximately **10.7%** (H1 2024: net loss margin 0.3%)[73](index=73&type=chunk) [Liquidity and Financial Resources](index=23&type=section&id=%E6%B5%81%E5%8B%95%E8%B3%87%E9%87%91%E5%8F%8A%E8%B2%A1%E5%8B%99%E8%B3%87%E6%BA%90) As of June 30, 2025, the Group maintained a robust liquidity position with net current assets of RMB 194.9 million and increased cash and cash equivalents; net cash from operating activities was RMB 15.6 million, and the gearing ratio decreased due to reduced bank borrowings - As of June 30, 2025, the Group recorded net current assets of approximately **RMB 194.9 million** (December 31, 2024: RMB 202.0 million)[74](index=74&type=chunk) - Cash and cash equivalents balance increased by approximately **RMB 5.8 million** to approximately **RMB 34.0 million** (December 31, 2024: RMB 28.2 million)[74](index=74&type=chunk) - Net cash generated from operating activities for the period was approximately **RMB 15.6 million** (H1 2024: RMB 9.7 million)[74](index=74&type=chunk) - Net cash used in investing activities for the period was approximately **RMB 7.0 million** (H1 2024: RMB 13.7 million), primarily for the acquisition and prepayment of property, plant and equipment[74](index=74&type=chunk) - Net cash used in financing activities for the period was approximately **RMB 2.9 million** (H1 2024: net inflow of RMB 31.5 million), mainly due to repayment of bank loans[74](index=74&type=chunk) [Prepayments, Other Receivables and Other Assets](index=24&type=section&id=%E9%A0%90%E4%BB%98%E6%AC%BE%E9%A0%85%E3%80%81%E5%85%B6%E4%BB%96%E6%87%89%E6%94%B6%E6%AC%BE%E9%A0%85%E5%8F%8A%E5%85%B6%E4%BB%96%E8%B3%87%E7%94%A2) - Prepayments, other receivables and other assets increased by approximately **RMB 14.4 million** to approximately **RMB 43.1 million** (December 31, 2024: RMB 28.7 million), mainly due to prepayments to suppliers during the period[75](index=75&type=chunk) [Bank Borrowings](index=24&type=section&id=%E9%8A%80%E8%A1%8C%E5%80%9F%E6%AC%BE) - As of June 30, 2025, the Group had outstanding interest-bearing bank loans of **RMB 15.0 million** (December 31, 2024: RMB 17.7 million)[76](index=76&type=chunk) - Bank loans bear interest at an annual rate ranging from **3.1% to 3.9%**[76](index=76&type=chunk) [Contingent Liabilities](index=24&type=section&id=%E6%88%96%E7%84%B6%E8%B2%A0%E5%82%B5) - As of June 30, 2025, the Group had no significant contingent liabilities[77](index=77&type=chunk) [Capital Commitments](index=24&type=section&id=%E8%B3%87%E6%9C%AC%E6%89%BF%E6%93%94) - As of June 30, 2025, the Group had no significant capital commitments[78](index=78&type=chunk) [Foreign Exchange Risk](index=24&type=section&id=%E5%A4%96%E5%BD%99%E9%A2%A8%E9%9A%AA) - The Group's transactions are denominated in RMB, cash and cash equivalents are primarily denominated in RMB and HKD, and borrowings are denominated in RMB[79](index=79&type=chunk) - As the Group's exposure to exchange rate fluctuations is minimal, no foreign currency hedging policy is currently implemented[79](index=79&type=chunk) [Pledge of Assets](index=24&type=section&id=%E8%B3%87%E7%94%A2%E6%8A%B5%E6%8A%BC) - As of June 30, 2025, the Group pledged certain buildings with a net book value of approximately **RMB 8.1 million** as collateral for a portion of its interest-bearing bank borrowings[80](index=80&type=chunk) [Gearing Ratio](index=25&type=section&id=%E8%B3%87%E7%94%A2%E8%B2%A0%E5%82%B5%E6%AF%94%E7%8E%87) - As of June 30, 2025, the Group's gearing ratio decreased by **1.1%** to **5.7%** (December 31, 2024: 6.8%), mainly due to the reduction in interest-bearing bank borrowings[81](index=81&type=chunk) [Significant Investments](index=25&type=section&id=%E9%87%8D%E5%A4%A7%E6%8A%95%E8%B3%87) The Group made no significant investments during the period or had any future plans for significant investments as of the date of this announcement - The Group made no significant investments during the period, nor did it have any future plans for significant investments or capital assets as of the date of this announcement[82](index=82&type=chunk) [Significant Acquisitions and Disposals](index=25&type=section&id=%E9%87%8D%E5%A4%A7%E6%94%B6%E8%B3%BC%E5%8F%8A%E5%87%BA%E5%94%AE) The Group had no significant acquisitions or disposals of subsidiaries, consolidated entities, or associates during the period - The Group had no significant acquisitions or disposals of subsidiaries, consolidated entities, or associates during the period[83](index=83&type=chunk) [Dividends](index=25&type=section&id=%E8%82%A1%E6%81%AF) The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025 - The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025[84](index=84&type=chunk) [Employees and Remuneration Policy](index=25&type=section&id=%E5%93%A1%E5%B7%A5%E5%8F%8A%E8%96%AA%E9%85%AC%E6%94%BF%E7%AD%96) As of June 30, 2025, the Group had 58 employees; its remuneration policy complies with relevant laws, market conditions, and employee performance, and is regularly reviewed; the Group provides training programs and participates in central retirement schemes - As of June 30, 2025, the Group had a total of **58 employees** (December 31, 2024: 57 employees)[85](index=85&type=chunk) - Remuneration policy complies with relevant laws, market conditions, and employee performance, and is regularly reviewed[85](index=85&type=chunk) - The Group provides training programs on topics such as industry trends, technology, management, and professional skills[85](index=85&type=chunk) - The Group participates in central retirement schemes as defined by the laws of the countries in which it operates[86](index=86&type=chunk) [Recent Developments and Post-Reporting Period Events](index=26&type=section&id=%E8%BF%91%E6%9C%9F%E7%99%BC%E5%B1%95%E5%8F%8A%E5%A0%B1%E5%91%8A%E6%9C%9F%E5%BE%8C%E4%BA%8B%E4%BB%B6) Except as disclosed in this announcement, no significant events have occurred since the end of the period and up to the date of this announcement; there have been no material changes in the Group's business model, revenue structure, or cost structure, and the Board confirms no material adverse changes in market conditions, industry environment, or the Group's operations, financial position, or prospects - Except as disclosed in this announcement, no significant events have occurred since the end of the period and up to the date of this announcement[87](index=87&type=chunk) - No material changes in business model, revenue structure, or cost structure, continuing to focus on medical imaging film products and software business[87](index=87&type=chunk) - The Directors confirm: no material adverse impact on market conditions or the industry and environment in which the Group operates; no material adverse changes in the Group's operations, financial position, or prospects; no events have occurred that would have a material adverse impact on the information presented in the condensed consolidated interim financial statements[89](index=89&type=chunk) Changes in Use of Net Proceeds from Global Offering [Use of Net Proceeds from Global Offering](index=26&type=section&id=%E5%85%A8%E7%90%83%E7%99%BC%E5%94%AE%E6%89%80%E5%BE%97%E6%AC%BE%E9%A0%8D%E6%B7%A8%E9%A1%8D%E7%94%A8%E9%80%94) The Company's net proceeds from the global offering, approximately HKD 76.8 million (approximately RMB 68.6 million), were originally planned for full utilization by December 2025; as of June 30, 2025, RMB 45.5 million has been utilized, with RMB 23.1 million unutilized, primarily held as interest-bearing deposits - Net proceeds from the global offering were approximately **HKD 76.8 million** (equivalent to approximately **RMB 68.6 million**)[88](index=88&type=chunk)[92](index=92&type=chunk) - The originally intended uses were expected to be fully utilized by December 2025[92](index=92&type=chunk) Planned Use and Utilisation of Net Proceeds | Purpose | Approximate percentage of net proceeds | Net proceeds (RMB millions) | Amount utilised as at June 30, 2025 (RMB millions) | Unutilised amount as at June 30, 2025 (RMB millions) | | :--- | :--- | :--- | :--- | :--- | | Expanding customer base and consolidating market position | 46.4% | 31.8 | 31.8 | — | | Enhancing medical imaging cloud services | 37.3% | 25.6 | 5.2 | 20.4 | | Expanding product portfolio | 2.7% | 1.9 | 0.6 | 1.3 | | Promoting brand and increasing market awareness | 2.5% | 1.7 | 1.7 | — | | Upgrading information technology systems | 2.5% | 1.7 | 0.3 | 1.4 | | Working capital and other general corporate purposes | 8.6% | 5.9 | 5.9 | — | | **Total** | **100.0%** | **68.6** | **45.5** | **23.1** | - Unutilised net proceeds of approximately **RMB 23.1 million** are held as interest-bearing deposits with recognised financial institutions or licensed banks in Hong Kong and China[91](index=91&type=chunk) [Changes in Use of Net Proceeds from Global Offering](index=27&type=section&id=%E5%85%A8%E7%90%83%E7%99%BC%E5%94%AE%E6%89%80%E5%BE%97%E6%AC%BE%E9%A0%8D%E6%B7%A8%E9%A1%8D%E7%94%A8%E9%80%94%E8%AE%8A%E5%8B%95) The Board resolved to change the use of unutilised net proceeds; funds originally allocated for acquiring companies to enhance medical imaging cloud services and expanding the product portfolio (high-pressure injector project) were partially reallocated to working capital and other general corporate purposes due to the inability to find suitable companies and the unsuitability of the project, and the expected utilisation timeline for some acquisition projects was extended to December 2027 - Reasons for change: Inability to find suitable companies for acquisition to develop PACS systems and AI healthcare industry startups; high-pressure injector project deemed unsuitable for the Group; no urgent need to upgrade information technology systems[93](index=93&type=chunk) Revised Allocation of Unutilised Net Proceeds | Original Purpose | Unutilised amount as at June 30, 2025 (RMB millions) | Revised Allocation (RMB millions) | Expected Timeline for Full Utilisation | | :--- | :--- | :--- | :--- | | Enhancing medical imaging cloud services – acquisition of companies | 20.4 | 20.4 | December 2027 | | Expanding product portfolio – registration of self-owned brand high-pressure injectors | 1.3 | — | N/A | | Upgrading information technology systems | 1.4 | — | N/A | | Working capital and other general corporate purposes | — | 2.7 | December 2026 | | **Total** | **23.1** | **23.1** | | Other Company Information [Purchase, Sale or Redemption of the Company's Listed Securities](index=29&type=section&id=%E8%B3%BC%E8%B2%B7%E3%80%81%E5%87%BA%E5%94%AE%E6%88%96%E8%B4%96%E5%9B%9E%E6%9C%AC%E5%85%AC%E5%8F%B8%E4%B9%8B%E4%B8%8A%E5%B8%82%E8%AD%89%E5%88%B8) During the period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities - During the period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[94](index=94&type=chunk) [Changes in Composition of Nomination Committee Members](index=29&type=section&id=%E6%8F%90%E5%90%8D%E5%A7%94%E5%93%A1%E6%9C%83%E6%88%90%E5%93%A1%E7%B5%84%E6%88%90%E8%AE%8A%E5%8B%95) Effective June 30, 2025, the composition of the Nomination Committee changed: Mr. Meng Xianzheng ceased to be Chairman, Ms. Meng Cathy was appointed as a member, and Dr. Zhao Bin was appointed as Chairman; the committee now comprises one non-executive director and two independent non-executive directors - Mr. Meng Xianzheng ceased to be the Chairman of the Nomination Committee[95](index=95&type=chunk) - Non-executive Director Ms. Meng Cathy was appointed as a member of the Nomination Committee[95](index=95&type=chunk) - Independent Non-executive Director Dr. Zhao Bin was appointed as the Chairman of the Nomination Committee[95](index=95&type=chunk) - The Nomination Committee now comprises one non-executive director and two independent non-executive directors[95](index=95&type=chunk) [Corporate Governance Practices](index=29&type=section&id=%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB%E5%B8%B8%E8%A6%8F) The Company is committed to maintaining high standards of corporate governance, fully complying with the Corporate Governance Code, except for the Chairman also serving as Chief Executive Officer; the Board believes this arrangement benefits business development, and the diverse Board composition ensures a balance of power, with all Directors confirming compliance with the Model Code during the period - The Company fully complies with the Corporate Governance Code, except for code provision C.2.1 (roles of Chairman and Chief Executive should be separate)[96](index=96&type=chunk) - The Board believes that Mr. Meng Xianzheng serving concurrently as Chairman and Chief Executive Officer benefits the Group's business development, providing strong and consistent leadership[96](index=96&type=chunk) - The Board comprises two executive directors, one non-executive director, and three independent non-executive directors, demonstrating strong independence[96](index=96&type=chunk)[105](index=105&type=chunk) - All Directors have confirmed compliance with the Model Code throughout the period[97](index=97&type=chunk) [Change of Auditor](index=30&type=section&id=%E6%9B%B4%E6%8F%9B%E6%A0%B8%E6%95%B8%E5%B8%AB) Ernst & Young resigned as the Company's auditor, effective June 30, 2025, and the Board has appointed Mazars CPA Limited as the Company's new auditor - Ernst & Young agreed to resign as the Company's auditor, effective June 30, 2025[98](index=98&type=chunk) - The Board appointed Mazars CPA Limited as the Company's new auditor, effective June 30, 2025[98](index=98&type=chunk) [Review of Interim Results](index=30&type=section&id=%E5%AF%A9%E9%96%B1%E4%B8%AD%E6%9C%9F%E6%A5%AD%E7%B8%BE) The Company's Audit Committee has reviewed the Group's results for the six months ended June 30, 2025, and the auditor, Mazars CPA Limited, has reviewed the condensed consolidated interim financial statements in accordance with Hong Kong Standard on Review Engagements 2400 (Revised) - The Company's Audit Committee (comprising three independent non-executive directors) has reviewed the Group's results for the six months ended June 30, 2025[99](index=99&type=chunk) - The auditor, Mazars CPA Limited, has reviewed the condensed consolidated interim financial statements in accordance with Hong Kong Standard on Review Engagements 2400 (Revised)[99](index=99&type=chunk) [Publication of Interim Results Announcement and Interim Report](index=30&type=section&id=%E5%88%8A%E7%99%BC%E4%B8%AD%E6%9C%9F%E6%A5%AD%E7%B8%BE%E5%85%AC%E5%91%8A%E5%8F%8A%E4%B8%AD%E6%9C%9F%E5%A0%B1%E5%91%8A) This interim results announcement has been published on the Stock Exchange website and the Company's website; the interim report for the six months ended June 30, 2025, will be dispatched to shareholders and posted on the same websites in due course - This interim results announcement is published on the Stock Exchange website (http://www.hkex.com.hk) and the Company's website (http://www.guanzegroup.com)[100](index=100&type=chunk) - The interim report for the six months ended June 30, 2025, will be dispatched to shareholders and posted on the same websites in due course[100](index=100&type=chunk) Definitions [Definitions](index=31&type=section&id=%E5%AE%9A%E7%BE%A9) This chapter provides key terms and their definitions used in the report to ensure consistent understanding of the report content by readers - This chapter includes definitions for terms such as "Board", "Corporate Governance Code", "Company", "Group", "HKD", "Hong Kong", "Listing", "Listing Rules", "PRC", "Model Code", "Net Proceeds", "Nomination Committee", "Period", "Prospectus", "RMB", "Shares", "Shareholders", and "Stock Exchange"[101](index=101&type=chunk)[102](index=102&type=chunk)[106](index=106&type=chunk) Chairman of the Board [Chairman of the Board](index=32&type=section&id=%E8%91%A3%E4%BA%8B%E6%9C%83%E4%B8%BB%E5%B8%AD) This chapter presents the announcement signed by Mr. Meng Xianzheng, Chairman of the Board, on August 27, 2025, and lists the composition of the Board members as of the announcement date - The announcement is signed by Mr. Meng Xianzheng, Chairman of the Board[104](index=104&type=chunk) - The signing date is August 27, 2025[105](index=105&type=chunk) - As of the announcement date, the Board members include Executive Directors Mr. Meng Xianzheng and Mr. Guo Zhenyu, Non-executive Director Ms. Meng Cathy, and Independent Non-executive Directors Dr. Zhao Bin, Dr. Chang Shiwang, and Dr. Huang Wenxian[105](index=105&type=chunk)

[Company Information and Announcement Statement](index=1&type=section&id=I.%20Company%20Information%20and%20Announcement%20Statement) This section provides essential company details and official announcements regarding the interim results [Announcement Statement](index=1&type=section&id=Announcement%20Statement) The Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited disclaim responsibility for the content of this announcement and any losses arising from reliance on it - The Hong Kong Stock Exchange is not responsible for the content of this announcement, does not guarantee its accuracy or completeness, and assumes no liability for any losses incurred[1](index=1&type=chunk) [Company Basic Information](index=1&type=section&id=Company%20Basic%20Information) Maike Tube Industry Holdings Limited (Stock Code: 1553) announces its unaudited interim results for the six months ended June 30, 2025 - Company Name: **MAIKE TUBE INDUSTRY HOLDINGS LIMITED**[2](index=2&type=chunk) - Stock Code: **1553**[2](index=2&type=chunk) - Announcement Period: Interim results for the **six months ended June 30, 2025**[2](index=2&type=chunk)[3](index=3&type=chunk) [Condensed Consolidated Financial Statements](index=2&type=section&id=II.%20Condensed%20Consolidated%20Financial%20Statements) This section presents the condensed consolidated financial statements, including income, financial position, equity changes, and cash flows [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, revenue increased by 10.2% to RMB 1,280,978 thousand, profit for the period grew by 6.2% to RMB 86,497 thousand, and basic earnings per share were RMB 0.199 Key Data from Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income | Indicator | For the six months ended June 30, 2025 (RMB '000) | For the six months ended June 30, 2024 (RMB '000) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 1,280,978 | 1,162,024 | 10.2% | | Cost of sales | (1,061,335) | (995,186) | 6.6% | | Gross profit | 219,643 | 166,838 | 31.7% | | Other income | 7,930 | 10,583 | -25.1% | | Other gains and losses | 11,135 | 11,366 | -2.0% | | Distribution and selling expenses | (59,122) | (35,015) | 68.8% | | Administrative expenses | (32,058) | (28,313) | 13.2% | | Research and development costs | (39,338) | (28,894) | 36.1% | | Profit before tax | 104,915 | 94,586 | 10.9% | | Income tax expense | (18,418) | (13,134) | 40.2% | | Profit for the period | 86,497 | 81,452 | 6.2% | | Basic earnings per share (RMB) | 0.199 | 0.188 | 5.9% | [Condensed Consolidated Statement of Financial Position](index=3&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, total assets slightly increased, net current assets grew significantly, and net assets reached RMB 1,179,620 thousand, a 3.35% increase from the end of 2024 Key Data from Condensed Consolidated Statement of Financial Position | Indicator | As of June 30, 2025 (RMB '000) | As of December 31, 2024 (RMB '000) | Change (%) | | :--- | :--- | :--- | :--- | | Non-current assets | 468,383 | 471,721 | -0.7% | | Current assets | 1,685,231 | 1,662,442 | 1.4% | | Current liabilities | 950,411 | 964,851 | -1.5% | | Net current assets | 734,820 | 697,591 | 5.3% | | Total assets less current liabilities | 1,203,203 | 1,169,312 | 2.9% | | Non-current liabilities | 23,583 | 27,969 | -15.6% | | Net assets | 1,179,620 | 1,141,343 | 3.4% | | Share capital | 304 | 304 | 0.0% | | Reserves | 1,175,033 | 1,137,118 | 3.3% | | Total equity | 1,179,620 | 1,141,343 | 3.4% | [Condensed Consolidated Statement of Changes in Equity](index=5&type=section&id=Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) For the six months ended June 30, 2025, equity attributable to owners increased from RMB 1,137,422 thousand at the beginning of the period to RMB 1,175,337 thousand, primarily due to profit for the period of RMB 86,431 thousand, despite dividends distributed of RMB 47,694 thousand Key Data from Condensed Consolidated Statement of Changes in Equity | Indicator | As of June 30, 2025 (RMB '000) | As of January 1, 2024 (RMB '000) | | :--- | :--- | :--- | | Equity attributable to owners at beginning of period | 1,137,422 | 1,046,530 | | Profit for the period | 86,431 | 81,547 | | Other comprehensive (expense) income for the period | (822) | (6,846) | | Dividends distributed | (47,694) | (47,314) | | Equity attributable to owners at end of period | 1,175,337 | 1,073,917 | [Condensed Consolidated Statement of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) For the six months ended June 30, 2025, net cash used in operating activities increased to RMB 101,259 thousand, net cash used in investing activities significantly decreased to RMB 5,402 thousand, net cash generated from financing activities increased to RMB 132,992 thousand, and cash and cash equivalents at period-end were RMB 104,068 thousand Key Data from Condensed Consolidated Statement of Cash Flows | Indicator | For the six months ended June 30, 2025 (RMB '000) | For the six months ended June 30, 2024 (RMB '000) | Change (RMB '000) | | :--- | :--- | :--- | :--- | | Net cash used in operating activities | (101,259) | (70,098) | (31,161) | | Net cash used in investing activities | (5,402) | (48,135) | 42,733 | | Net cash generated from financing activities | 132,992 | 115,468 | 17,524 | | Net increase (decrease) in cash and cash equivalents | 26,331 | (2,765) | 29,096 | | Cash and cash equivalents at end of period | 104,068 | 69,522 | 34,546 | [Notes to the Condensed Consolidated Financial Statements](index=8&type=section&id=III.%20Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed notes explaining the accounting policies, revenue breakdown, and specific financial statement items [General Information and Basis of Preparation](index=8&type=section&id=General%20Information%20and%20Basis%20of%20Preparation) Maike Tube Industry Holdings Limited is an investment holding company registered in the Cayman Islands, with subsidiaries primarily engaged in manufacturing and selling steel pipe products and pre-fabricated pipe fittings, with financial statements presented in RMB and prepared in accordance with HKAS 34 - The Company is an investment holding company, with subsidiaries primarily engaged in the manufacturing and sale of **steel pipe products and pre-fabricated pipe fittings products**[10](index=10&type=chunk) - The financial statements are presented in **RMB** and prepared in accordance with **HKAS 34** and Appendix 16 of the Listing Rules[11](index=11&type=chunk) [Accounting Policies](index=8&type=section&id=Accounting%20Policies) The condensed consolidated financial statements are prepared on a historical cost basis, with accounting policies consistent with the prior year, except for certain financial instruments measured at fair value, and new HKFRS amendments had no significant impact - The financial statements are prepared on a **historical cost basis**, with the exception of certain financial instruments[12](index=12&type=chunk) - Amendments to HKFRS accounting standards were first applied this period, but had **no significant impact** on financial position or performance[13](index=13&type=chunk) [Revenue and Segment Information](index=9&type=section&id=Revenue%20and%20Segment%20Information) The Group's total revenue for the six months ended June 30, 2025, was RMB 1,280,978 thousand, primarily from pipe product sales and steel coil trading, with operations in China, Vietnam, and Thailand, and China being the largest market contributor [Revenue](index=9&type=section&id=Revenue) For the six months ended June 30, 2025, the Group's revenue was RMB 1,280,978 thousand, mainly from sales of pipe products (customized steel pipes, standard pre-fabricated pipe fittings, spiral submerged arc welded steel pipes, electric resistance welded steel pipes, assembled piping system design and supply) and steel coil trading Revenue Analysis (RMB '000) | Product Category | For the six months ended June 30, 2025 | For the six months ended June 30, 2024 | | :--- | :--- | :--- | | Customized steel pipes | 206,671 | 218,058 | | Standard pre-fabricated pipe fittings | 204,331 | 184,517 | | Spiral submerged arc welded steel pipes | 317,296 | 177,646 | | Electric resistance welded steel pipes | 240,456 | 101,863 | | Assembled piping system design and supply | 32,016 | 18,738 | | Steel coil trading | 280,208 | 461,202 | | **Total Revenue** | **1,280,978** | **1,162,024** | [Segment Information](index=9&type=section&id=Segment%20Information) The Group's business originates from the production and sale of pipe products in China, Vietnam, and Thailand, and as the chief operating decision maker reviews overall group performance, no operating segments are presented - The Group's business primarily involves the production and sale of **pipe products in China, Vietnam, and Thailand**[15](index=15&type=chunk) - The chief operating decision maker reviews the Group's performance as a whole, thus **no operating segments are presented**[15](index=15&type=chunk) [Geographical Information](index=10&type=section&id=Geographical%20Information) For the six months ended June 30, 2025, the Chinese market contributed RMB 779,437 thousand in revenue, accounting for 60.8%, while other Asian countries saw significant revenue growth to RMB 204,613 thousand Revenue by Geographical Region (RMB '000) | Region | For the six months ended June 30, 2025 | For the six months ended June 30, 2024 | | :--- | :--- | :--- | | China | 779,437 | 764,850 | | United States | 154,304 | 149,898 | | Other Asian countries (excluding China) | 204,613 | 130,467 | | Other American countries (excluding United States) | 100,688 | 95,827 | | Europe | 10,894 | 11,154 | | Others | 31,042 | 9,828 | | **Total Revenue** | **1,280,978** | **1,162,024** | [Other Income / Other Gains and Losses](index=10&type=section&id=Other%20Income%20%2F%20Other%20Gains%20and%20Losses) For the six months ended June 30, 2025, other income decreased by 25.1% YoY to RMB 7,930 thousand, mainly due to reduced government grants; other gains and losses slightly decreased by 2% YoY to RMB 11,135 thousand, primarily affected by lower scrap sales and net exchange gains, but offset by a RMB 3,405 thousand gain from subsidiary disposal Other Income (RMB '000) | Indicator | For the six months ended June 30, 2025 | For the six months ended June 30, 2024 | | :--- | :--- | :--- | | Government grants | 5,047 | 8,394 | | Bank interest income | 2,883 | 2,189 | | **Total** | **7,930** | **10,583** | Other Gains and Losses (RMB '000) | Indicator | For the six months ended June 30, 2025 | For the six months ended June 30, 2024 | | :--- | :--- | :--- | | Gain from sales of scrap materials | 4,379 | 4,876 | | Fair value gain on structured bank deposits | 307 | 45 | | Fair value gain (loss) on foreign exchange forward contracts | (186) | 1,049 | | Fair value gain (loss) on derivative financial instruments | 155 | (24) | | Loss on disposal of property, plant and equipment | (1,480) | (278) | | Gain on disposal of a subsidiary | 3,405 | – | | Net exchange gain | 3,239 | 5,118 | | Others | 1,316 | 580 | | **Total** | **11,135** | **11,366** | - A gain of **RMB 3,405 thousand** was recognized from the disposal of 100% equity interest in Shandong Maike Intelligent Technology Co., Ltd. and Yongqing County Keqi Trading Co., Ltd.[18](index=18&type=chunk) [Impairment Losses under Expected Credit Loss Model (Net of Reversal)](index=12&type=section&id=Impairment%20Losses%20under%20Expected%20Credit%20Loss%20Model%20(Net%20of%20Reversal)) For the six months ended June 30, 2025, impairment losses under the expected credit loss model (net of reversal) were RMB 2,129 thousand, a slight decrease from RMB 2,208 thousand in the prior year Impairment Losses (RMB '000) | Indicator | For the six months ended June 30, 2025 | For the six months ended June 30, 2024 | | :--- | :--- | :--- | | Trade receivables | (3,681) | (2,377) | | Contract assets | 1,552 | 169 | | **Total** | **(2,129)** | **(2,208)** | [Finance Costs](index=12&type=section&id=Finance%20Costs) For the six months ended June 30, 2025, finance costs increased by 29.1% YoY to RMB 5,404 thousand, primarily due to higher interest on discounted bills Finance Costs (RMB '000) | Indicator | For the six months ended June 30, 2025 | For the six months ended June 30, 2024 | | :--- | :--- | :--- | | Interest on bank borrowings | 740 | 1,235 | | Interest on lease liabilities | 62 | 90 | | Interest on discounted bills | 4,602 | 2,862 | | **Total** | **5,404** | **4,187** | [Profit Before Tax](index=12&type=section&id=Profit%20Before%20Tax) For the six months ended June 30, 2025, profit before tax was RMB 104,915 thousand, primarily after deducting depreciation of property, plant and equipment of RMB 2,988 thousand and reversal of inventories of RMB 272 thousand Components of Profit Before Tax (RMB '000) | Indicator | For the six months ended June 30, 2025 | For the six months ended June 30, 2024 | | :--- | :--- | :--- | | Total depreciation of property, plant and equipment | 2,988 | 4,458 | | Reversal of inventories | (272) | (2,107) | [Income Tax Expense](index=13&type=section&id=Income%20Tax%20Expense) For the six months ended June 30, 2025, income tax expense increased by 40.2% YoY to RMB 18,418 thousand, mainly due to higher PRC corporate income tax and increased deferred tax expense for the period Income Tax Expense (RMB '000) | Indicator | For the six months ended June 30, 2025 | For the six months ended June 30, 2024 | | :--- | :--- | :--- | | PRC corporate income tax (current period) | 19,019 | 11,659 | | Under-provision in prior periods (over-provision) | (1,459) | 1,258 | | Deferred tax expense | 858 | 217 | | **Total** | **18,418** | **13,134** | [Dividends](index=13&type=section&id=Dividends) The Board decided not to declare any dividends for the six months ended June 30, 2025, but a final dividend of HK 12 cents per share, totaling approximately RMB 47,694 thousand, was declared for the year ended December 31, 2024 - The Board does not recommend the payment of any dividend for the **six months ended June 30, 2025**[22](index=22&type=chunk) - A final dividend of **HK 12 cents per share**, totaling **RMB 47,694 thousand**, was declared for the year ended December 31, 2024[22](index=22&type=chunk) [Earnings Per Share](index=13&type=section&id=Earnings%20Per%20Share) For the six months ended June 30, 2025, basic earnings per share increased to RMB 0.199 from RMB 0.188 in the prior year, with the weighted average number of ordinary shares remaining unchanged Earnings Per Share Data | Indicator | For the six months ended June 30, 2025 | For the six months ended June 30, 2024 | | :--- | :--- | :--- | | Profit for the period attributable to owners of the Company (RMB '000) | 86,431 | 81,547 | | Weighted average number of ordinary shares ('000 shares) | 433,800 | 433,800 | | **Basic earnings per share (RMB)** | **0.199** | **0.188** | [Property, Plant and Equipment](index=14&type=section&id=Property%2C%20Plant%20and%20Equipment) For the six months ended June 30, 2025, the Group disposed of property, plant and equipment totaling RMB 1,529 thousand and acquired new property, plant and equipment totaling RMB 21,880 thousand - Disposal of property, plant and equipment totaled **RMB 1,529 thousand** (2024: RMB 3,402 thousand)[27](index=27&type=chunk) - Acquisition of property, plant and equipment totaled **RMB 21,880 thousand** (2024: RMB 40,520 thousand)[27](index=27&type=chunk) [Trade Receivables](index=14&type=section&id=Trade%20Receivables) As of June 30, 2025, total trade receivables were RMB 608,808 thousand, a 16.7% decrease from the end of 2024, primarily due to collection efforts and subsidiary disposals Aging Analysis of Trade Receivables (RMB '000) | Aging | As of June 30, 2025 | As of December 31, 2024 | | :--- | :--- | :--- | | 0 to 60 days | 204,657 | 338,922 | | 61 to 180 days | 167,077 | 167,848 | | 181 days to 1 year | 69,574 | 58,403 | | Over 1 year | 167,500 | 166,027 | | **Total** | **608,808** | **731,200** | [Pledged Trade Receivables](index=15&type=section&id=Pledged%20Trade%20Receivables) As of June 30, 2025, pledged trade receivables were RMB 51,252 thousand, a 32.1% decrease from the end of 2024, mainly due to early discounting of bank bills received Aging Analysis of Pledged Trade Receivables (RMB '000) | Aging | As of June 30, 2025 | As of December 31, 2024 | | :--- | :--- | :--- | | 0 to 180 days | 50,852 | 69,431 | | 181 days to 1 year | 400 | 6,019 | | **Total** | **51,252** | **75,450** | [Contract Assets](index=15&type=section&id=Contract%20Assets) As of June 30, 2025, contract assets decreased to RMB 26,893 thousand, primarily due to a reduction in retention receivables from pipe product sales Contract Assets (RMB '000) | Indicator | As of June 30, 2025 | As of December 31, 2024 | | :--- | :--- | :--- | | Retention receivables from sales of pipe products | 28,939 | 32,552 | | Less: Provision for impairment losses | (2,046) | (2,445) | | **Total** | **26,893** | **30,107** | [Amounts Due From/To Related Parties](index=16&type=section&id=Amounts%20Due%20From%2FTo%20Related%20Parties) As of June 30, 2025, amounts due from related parties increased to RMB 17,563 thousand, and amounts due to related parties increased to RMB 13,938 thousand, both primarily due to increased unsettled trade balances at period-end [Amounts Due From Related Parties](index=16&type=section&id=Amounts%20Due%20From%20Related%20Parties) As of June 30, 2025, amounts due from related parties increased to RMB 17,563 thousand, mainly due to increased unsettled trade balances at period-end, with Maide being the largest receivable party Amounts Due From Related Parties (RMB '000) | Related Party | As of June 30, 2025 | As of December 31, 2024 | | :--- | :--- | :--- | | Maide | 6,729 | 4,752 | | Shandong Maike Intelligent Technology Co., Ltd. | 2,518 | – | | Jinan Kede Intelligent Technology Co., Ltd. | 2,478 | 1,164 | | Maide Group Linyi Co., Ltd. | 2,148 | 4,193 | | **Total** | **17,563** | **15,383** | - Of the balances due from related parties, **RMB 4,638 thousand** was overdue and unsecured[34](index=34&type=chunk) [Amounts Due To Related Parties](index=18&type=section&id=Amounts%20Due%20To%20Related%20Parties) As of June 30, 2025, amounts due to related parties increased to RMB 13,938 thousand, mainly due to increased unsettled payables at period-end, with Taigang Pipe Fittings being the largest payable party Amounts Due To Related Parties (RMB '000) | Related Party | As of June 30, 2025 | As of December 31, 2024 | | :--- | :--- | :--- | | Taigang Pipe Fittings | 9,141 | 1,087 | | Maide New Energy | 2,723 | 981 | | Kede Intelligent | 609 | 856 | | Maide | 535 | 2,697 | | **Total** | **13,938** | **6,075** | [Trade Payables and Bills Payable](index=19&type=section&id=Trade%20Payables%20and%20Bills%20Payable) As of June 30, 2025, total trade payables and bills payable increased to RMB 683,124 thousand, primarily due to an increase in bills payable Trade Payables and Bills Payable (RMB '000) | Indicator | As of June 30, 2025 | As of December 31, 2024 | | :--- | :--- | :--- | | Trade payables | 100,265 | 156,343 | | Bills payable | 582,859 | 469,367 | | **Total** | **683,124** | **625,710** | [Contract Liabilities](index=34&type=section&id=Contract%20Liabilities) As of June 30, 2025, contract liabilities decreased to RMB 67,218 thousand, related to the timing of product delivery to customers Contract Liabilities (RMB '000) | Indicator | As of June 30, 2025 | As of December 31, 2024 | | :--- | :--- | :--- | | Contract liabilities | 67,218 | 157,031 | [Refund Liabilities](index=34&type=section&id=Refund%20Liabilities) As of June 30, 2025, refund liabilities decreased to RMB 4,528 thousand Refund Liabilities (RMB '000) | Indicator | As of June 30, 2025 | As of December 31, 2024 | | :--- | :--- | :--- | | Refund liabilities | 4,528 | 5,562 | [Other Payables and Accrued Expenses](index=20&type=section&id=Other%20Payables%20and%20Accrued%20Expenses) As of June 30, 2025, other payables and accrued expenses decreased to RMB 64,520 thousand, primarily due to a reduction in accrued expenses Other Payables and Accrued Expenses (RMB '000) | Indicator | As of June 30, 2025 | As of December 31, 2024 | | :--- | :--- | :--- | | Accrued expenses | 15,954 | 31,716 | | Staff costs payable | 14,589 | 17,696 | | Guarantees received from employees for trade receivables | 6,983 | 4,584 | | Other taxes payable | 9,365 | 12,659 | | Agent fees payable | 11,448 | 14,128 | | Transportation costs payable | 5,319 | 4,856 | | Deposits received from suppliers | 862 | 4,491 | | **Total** | **64,520** | **90,130** | [Provisions](index=34&type=section&id=Provisions) As of June 30, 2025, provisions decreased to RMB 1,286 thousand, primarily representing warranties provided for products sold Provisions (RMB '000) | Indicator | As of June 30, 2025 | As of December 31, 2024 | | :--- | :--- | :--- | | Provisions | 1,286 | 2,541 | [Borrowings](index=20&type=section&id=Borrowings) As of June 30, 2025, borrowings decreased to RMB 56,440 thousand, mainly due to a reduction in bank loans, with RMB 46,900 thousand repayable within one year Borrowings (RMB '000) | Indicator | As of June 30, 2025 | As of December 31, 2024 | | :--- | :--- | :--- | | Borrowings | 56,440 | 69,127 | - New bank loans of **RMB 46,900 thousand** were obtained during the period, with interest rates ranging from **2.50% to 3.45%**, used for purchasing raw materials[40](index=40&type=chunk) [Lease Liabilities](index=34&type=section&id=Lease%20Liabilities) As of June 30, 2025, the Group's lease liabilities were approximately RMB 2,024 thousand, primarily arising from property leases for factories in Vietnam and Thailand Lease Liabilities (RMB '000) | Indicator | As of June 30, 2025 | As of December 31, 2024 | | :--- | :--- | :--- | | Current lease liabilities | 2,024 | 1,143 | | Non-current lease liabilities | 610 | 2,023 | [Share Capital](index=20&type=section&id=Share%20Capital) As of June 30, 2025, the company's authorized share capital was 500,000,000 shares, with 433,800,000 issued and fully paid shares at a par value of USD 0.0001, equivalent to RMB 304 thousand, remaining unchanged from the prior year-end Share Capital Information | Indicator | Number of Shares | Amount (USD '000) | Equivalent Amount (RMB '000) | | :--- | :--- | :--- | :--- | | Authorized share capital | 500,000,000 | 50 | 335 | | Issued and fully paid share capital | 433,800,000 | 43 | 304 | [Non-controlling Interests](index=21&type=section&id=Non-controlling%20Interests) As of June 30, 2025, non-controlling interests increased to RMB 4,283 thousand, primarily due to their share of profit and other comprehensive income for the period Non-controlling Interests (RMB '000) | Indicator | As of June 30, 2025 | As of January 1, 2025 | | :--- | :--- | :--- | | Non-controlling interests | 4,283 | 3,921 | | Share of profit for the period | 66 | – | | Share of other comprehensive income for the period | 296 | – | - The Group, JJ Fitting, and Essence Electrical respectively hold **85%, 10%, and 5% equity interests** in Thailand Delta Power, with registered capital fully paid[42](index=42&type=chunk) [Capital Commitments](index=21&type=section&id=Capital%20Commitments) As of June 30, 2025, contracted but unprovided capital expenditure for the acquisition of property, plant and equipment was RMB 11,474 thousand, an increase from the end of 2024 Capital Commitments (RMB '000) | Indicator | As of June 30, 2025 | As of December 31, 2024 | | :--- | :--- | :--- | | Acquisition of property, plant and equipment | 11,474 | 7,445 | [Pledge of Assets](index=21&type=section&id=Pledge%20of%20Assets) As of June 30, 2025, the Group had pledged assets with a net book value of approximately RMB 405,745 thousand as collateral for bank financing, an increase from the end of 2024 Pledge of Assets (RMB '000) | Pledged Asset Category | As of June 30, 2025 | As of December 31, 2024 | | :--- | :--- | :--- | | Property, plant and equipment | 44,949 | 46,482 | | Pledged bank deposits | 278,891 | 246,867 | | Right-of-use assets | 81,905 | 38,857 | | **Total** | **405,745** | **332,206** | [Related Party Transactions](index=22&type=section&id=Related%20Party%20Transactions) For the six months ended June 30, 2025, the Group engaged in various related party transactions, including sales of steel pipe products, sales of scrap materials, purchases of inventories, and purchases of fixed assets, with disclosure of key management personnel compensation [Transactions](index=22&type=section&id=Transactions) For the six months ended June 30, 2025, the Group conducted various related party transactions, including sales of steel pipe products to Maide for RMB 14,235 thousand and purchases of inventories from Taigang Pipe Fittings for RMB 1,102 thousand Major Related Party Transactions (RMB '000) | Related Company Name | Nature of Transaction | For the six months ended June 30, 2025 | For the six months ended June 30, 2024 | | :--- | :--- | :--- | :--- | | Maide | Sales of steel pipe products | 14,235 | 12,493 | | | Sales of scrap materials | 4,418 | 6,051 | | | Purchases of inventories | 97 | 1,391 | | Taigang Pipe Fittings | Purchases of inventories | 1,102 | 249 | | | Sales of scrap materials | 1,041 | 495 | | Shandong Maike Intelligent Technology Co., Ltd. | Sales of steel pipe products | 3,149 | – | | | Purchases of inventories | 942 | – | [Key Management Personnel Compensation](index=23&type=section&id=Key%20Management%20Personnel%20Compensation) For the six months ended June 30, 2025, total compensation for directors and other key management personnel was RMB 1,270 thousand, a decrease from RMB 2,375 thousand in the prior year Key Management Personnel Compensation (RMB '000) | Indicator | For the six months ended June 30, 2025 | For the six months ended June 30, 2024 | | :--- | :--- | :--- | | Salaries and other benefits | 1,182 | 1,565 | | Discretionary bonuses | – | 650 | | Contributions to retirement benefit schemes | 88 | 160 | | **Total** | **1,270** | **2,375** | [Disposal of a Subsidiary/Business](index=24&type=section&id=Disposal%20of%20a%20Subsidiary%2FBusiness) On March 28, 2025, the Group completed the disposal of 100% equity interest in Shandong Maike Intelligent Technology Co., Ltd. and Yongqing County Keqi Trading Co., Ltd., receiving cash consideration of RMB 45,000 thousand and generating a disposal gain of RMB 3,405 thousand Details of Subsidiary Disposal (RMB '000) | Indicator | As of March 28, 2025 | | :--- | :--- | | Net assets disposed of | 41,595 | | Cash consideration received | 45,000 | | Gain on disposal | 3,405 | | Net cash inflow from disposal | 42,227 | [Management Discussion and Analysis](index=25&type=section&id=IV.%20Management%20Discussion%20and%20Analysis) This section provides an overview of the Group's business performance, financial results, capital structure, and future outlook [Business Review](index=25&type=section&id=Business%20Review) The Group primarily manufactures and sells standard pre-fabricated pipe fittings and steel pipe products, designs and supplies assembled piping systems, and trades steel coils. Despite market challenges, revenue increased by 10.2% and net profit by 6.2% for the period - The Group's main businesses include the manufacturing and sale of **standard pre-fabricated pipe fittings products, steel pipe products**, and the design and supply of **assembled piping systems**, as well as **steel coil sales**[48](index=48&type=chunk) - For the six months ended June 30, 2025, the Group's revenue was approximately **RMB 1,281.0 million**, a **10.2% year-on-year increase**; net profit was approximately **RMB 86.5 million**, a **6.2% year-on-year increase**[49](index=49&type=chunk) [Standard Pre-fabricated Pipe Fittings Products](index=26&type=section&id=Standard%20Pre-fabricated%20Pipe%20Fittings%20Products) Revenue from standard pre-fabricated pipe fittings products increased by 10.7% YoY to RMB 204.3 million, accounting for 16.0% of total revenue, driven by higher sales volume and new orders, with 98.6% from overseas customers Standard Pre-fabricated Pipe Fittings Products Revenue (RMB million) | Indicator | For the six months ended June 30, 2025 | For the six months ended June 30, 2024 | YoY Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 204.3 | 184.5 | 10.7% | | Share of total revenue | 16.0% | 15.9% | - | - New orders amounted to approximately **12,500 tons**, with approximately **98.6% from overseas customers**[50](index=50&type=chunk) [Steel Pipe Products](index=26&type=section&id=Steel%20Pipe%20Products) Steel pipe products accounted for approximately 59.7% of total revenue, with electric resistance welded steel pipe and spiral submerged arc welded steel pipe revenue increasing by 136.1% and 78.6% YoY respectively due to higher sales volume, while customized steel pipe revenue decreased by 5.2% YoY due to lower selling prices, and new orders totaled approximately 185,000 tons, with 67.6% from domestic customers Steel Pipe Products Revenue (RMB million) | Product Category | For the six months ended June 30, 2025 | For the six months ended June 30, 2024 | YoY Change (%) | | :--- | :--- | :--- | :--- | | Electric resistance welded steel pipes | 240.5 | 101.9 | 136.1% | | Spiral submerged arc welded steel pipes | 317.3 | 177.6 | 78.6% | | Customized steel pipes | 206.7 | 218.1 | -5.2% | - New orders for steel pipe products amounted to approximately **185,000 tons**, with approximately **67.6% from domestic customers**[50](index=50&type=chunk) [Assembled Piping System Design and Supply](index=27&type=section&id=Assembled%20Piping%20System%20Design%20and%20Supply) Revenue from assembled piping system design and supply increased by 70.9% YoY to RMB 32.0 million, accounting for approximately 2.5% of total revenue, primarily due to an increase in delivered orders Assembled Piping System Design and Supply Revenue (RMB million) | Indicator | For the six months ended June 30, 2025 | For the six months ended June 30, 2024 | YoY Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 32.0 | 18.7 | 70.9% | | Share of total revenue | 2.5% | 1.6% | - | [Steel Coil Trading](index=27&type=section&id=Steel%20Coil%20Trading) Revenue from steel coil trading decreased by 39.2% YoY to RMB 280.2 million, primarily because more purchased steel coils were used for production rather than sales due to increased steel pipe product orders Steel Coil Trading Revenue (RMB million) | Indicator | For the six months ended June 30, 2025 | For the six months ended June 30, 2024 | YoY Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 280.2 | 461.2 | -39.2% | [Financial Review](index=27&type=section&id=Financial%20Review) The Group's total revenue for the first half of 2025 increased by 10.2% YoY, with improved gross profit and gross profit margin, but other income and gains slightly decreased. Distribution and selling expenses, administrative expenses, and R&D costs all increased, with profit for the period driven by gross profit growth - The Group's total revenue was approximately **RMB 1,281.0 million**, a **10.2% increase** from the prior year, primarily due to increased sales volume of steel pipe products[55](index=55&type=chunk) [Revenue, Sales Volume, and Average Selling Price by Product Category](index=28&type=section&id=Revenue%2C%20Sales%20Volume%2C%20and%20Average%20Selling%20Price%20by%20Product%20Category) In the first half of 2025, revenue and sales volume for standard pre-fabricated pipe fittings, electric resistance welded steel pipes, spiral submerged arc welded steel pipes, and assembled piping system design and supply all increased, while customized steel pipe revenue decreased due to lower selling prices, and steel coil trading revenue declined due to increased internal production demand Revenue, Sales Volume, and Average Selling Price by Product Category for H1 2025 | Product Category | Revenue (RMB '000) | Share (%) | Sales Volume ('000 tons) | Average Selling Price (RMB/ton) | | :--- | :--- | :--- | :--- | :--- | | Standard pre-fabricated pipe fittings | 204,331 | 16.0% | 11.6 | 17,615 | | Electric resistance welded steel pipes | 240,456 | 18.8% | 50.8 | 4,733 | | Spiral submerged arc welded steel pipes | 317,296 | 24.8% | 72.6 | 4,370 | | Customized steel pipes | 206,671 | 16.1% | 43.0 | 4,806 | | Assembled piping system design and supply | 32,016 | 2.5% | Not applicable | Not applicable | | Steel coil trading | 280,208 | 21.8% | 84.0 | 3,336 | | **Total** | **1,280,978** | **100.0%** | **262.0** | | Revenue, Sales Volume, and Average Selling Price by Product Category for H1 2024 | Product Category | Revenue (RMB '000) | Share (%) | Sales Volume ('000 tons) | Average Selling Price (RMB/ton) | | :--- | :--- | :--- | :--- | :--- | | Standard pre-fabricated pipe fittings | 184,517 | 15.9% | 10.4 | 17,742 | | Electric resistance welded steel pipes | 101,863 | 8.8% | 22.3 | 4,568 | | Spiral submerged arc welded steel pipes | 177,646 | 15.3% | 36.7 | 4,840 | | Customized steel pipes | 218,058 | 18.8% | 39.7 | 5,493 | | Assembled piping system design and supply | 18,738 | 1.6% | Not applicable | Not applicable | | Steel coil trading | 461,202 | 39.6% | 136.8 | 3,371 | | **Total** | **1,162,024** | **100.0%** | **245.9** | | [Sales by Geographical Location](index=29&type=section&id=Sales%20by%20Geographical%20Location) In the first half of 2025, domestic market sales share decreased from 65.8% to 60.8%, while overseas market sales share, particularly in other Asian countries, significantly increased, reflecting successful overseas market expansion Sales by Geographical Location (RMB '000) | Region | Revenue for the six months ended June 30, 2025 | Share of Revenue (%) | Revenue for the six months ended June 30, 2024 | Share of Revenue (%) | | :--- | :--- | :--- | :--- | :--- | | China | 779,437 | 60.8% | 764,850 | 65.8% | | United States | 154,304 | 12.0% | 149,898 | 12.9% | | Other American countries | 100,688 | 7.9% | 95,827 | 8.3% | | Other Asian countries | 204,613 | 16.0% | 130,467 | 11.2% | | Europe | 10,894 | 0.9% | 11,154 | 1.0% | | Others | 31,042 | 2.4% | 9,828 | 0.8% | | **Total** | **1,280,978** | **100.0%** | **1,162,024** | **100.0%** | [Gross Profit and Gross Profit Margin](index=30&type=section&id=Gross%20Profit%20and%20Gross%20Profit%20Margin) For the six months ended June 30, 2025, gross profit increased by 31.7% YoY to RMB 219.6 million, and gross profit margin increased by 2.8% from the prior year, primarily due to increased sales volume of standard pre-fabricated pipes, electric resistance welded steel pipes, and spiral submerged arc welded steel pipes - Gross profit increased by **31.7% to RMB 219.6 million**[61](index=61&type=chunk) - Gross profit margin increased by **2.8%** compared to the prior year[61](index=61&type=chunk) - The increase was primarily due to higher sales volume of **standard pre-fabricated pipes, electric resistance welded steel pipes, and spiral submerged arc welded steel pipes**[61](index=61&type=chunk) [Other Income](index=30&type=section&id=Other%20Income) For the six months ended June 30, 2025, other income decreased by 25.1% YoY to RMB 7.9 million, mainly due to a RMB 3.3 million reduction in government grants - Other income decreased by **25.1% to RMB 7.9 million**[62](index=62&type=chunk) - The main reason was a **RMB 3.3 million reduction in government grants**[62](index=62&type=chunk) [Other Gains and Losses](index=30&type=section&id=Other%20Gains%20and%20Losses) For the six months ended June 30, 2025, other gains and losses slightly decreased by 2% YoY to RMB 11.1 million, primarily affected by lower scrap sales and net exchange gains - Other gains and losses were approximately **RMB 11.1 million**, a decrease of approximately **2%** from the prior year[63](index=63&type=chunk) - Gain from sales of scrap materials was approximately **RMB 4.4 million** (prior year: RMB 4.9 million)[63](index=63&type=chunk) - Net exchange gain was approximately **RMB 3.2 million** (prior year: RMB 5.1 million)[63](index=63&type=chunk) [Distribution and Selling Expenses](index=30&type=section&id=Distribution%20and%20Selling%20Expenses) For the six months ended June 30, 2025, distribution and selling expenses increased by 68.8% YoY to RMB 59.1 million, primarily due to higher sea freight and business expenses - Distribution and selling expenses increased by **68.8% to RMB 59.1 million**[64](index=64&type=chunk) - Primarily due to increased **sea freight expenses and business expenses**[64](index=64&type=chunk) [Administrative Expenses](index=30&type=section&id=Administrative%20Expenses) For the six months ended June 30, 2025, administrative expenses increased by 13.2% YoY to RMB 32.0 million, primarily due to higher consulting fees - Administrative expenses increased by **13.2% to RMB 32.0 million**[65](index=65&type=chunk) - Primarily due to increased **consulting fees**[65](index=65&type=chunk) [Research and Development Costs](index=31&type=section&id=Research%20and%20Development%20Costs) For the six months ended June 30, 2025, research and development costs increased by 36.1% YoY to RMB 39.3 million, representing approximately 3.1% of total revenue - Research and development costs increased by **36.1% to RMB 39.3 million**[66](index=66&type=chunk) - R&D costs accounted for approximately **3.1% of total revenue** (prior year: approximately 2.5%)[66](index=66&type=chunk) [Impairment Losses under Expected Credit Loss Model (Net of Reversal)](index=31&type=section&id=Impairment%20Losses%20under%20Expected%20Credit%20Loss%20Model%20(Net%20of%20Reversal)) For the six months ended June 30, 2025, impairment losses under the expected credit loss model (net of reversal) were approximately RMB 2.1 million, largely consistent with the prior year - Impairment losses under the expected credit loss model (net of reversal) were approximately **RMB 2.1 million** (prior year: approximately RMB 2.2 million)[67](index=67&type=chunk) [Finance Costs](index=31&type=section&id=Finance%20Costs) For the six months ended June 30, 2025, finance costs increased by 29.1% YoY to RMB 5.4 million, primarily due to an increase in discounted bills - Finance costs increased by **29.1% to RMB 5.4 million**[68](index=68&type=chunk) - The increase was primarily due to an increase in **discounted bills**[68](index=68&type=chunk) [Income Tax Expense](index=31&type=section&id=Income%20Tax%20Expense) For the six months ended June 30, 2025, income tax expense increased to RMB 18.4 million - Income tax expense increased to **RMB 18.4 million** (prior year: RMB 13.1 million)[69](index=69&type=chunk) [Profit for the Period](index=31&type=section&id=Profit%20for%20the%20Period) For the six months ended June 30, 2025, profit for the period increased by 2.2% YoY to RMB 83.2 million, primarily due to higher gross profit - Profit for the period increased by **2.2% to RMB 83.2 million**[70](index=70&type=chunk) - Primarily due to an increase in **gross profit**[70](index=70&type=chunk) [Capital Structure, Liquidity, and Financial Resources](index=31&type=section&id=Capital%20Structure%2C%20Liquidity%2C%20and%20Financial%20Resources) For the six months ended June 30, 2025, net cash used in operating activities increased, net cash used in investing activities significantly decreased, net cash generated from financing activities increased, cash and cash equivalents at period-end were RMB 104,068 thousand, and the gearing ratio significantly decreased Cash Flow Overview (RMB '000) | Indicator | For the six months ended June 30, 2025 | For the six months ended June 30, 2024 | | :--- | :--- | :--- | | Net cash (used in) / generated from operating activities | (101,259) | (70,098) | | Net cash (used in) / generated from investing activities | (5,402) | (48,135) | | Net cash generated from / (used in) financing activities | 132,992 | 115,468 | | Net increase / (decrease) in cash and cash equivalents | 26,331 | (2,765) | | Cash and cash equivalents at end of period | 104,068 | 69,522 | [Gearing Ratio](index=32&type=section&id=Gearing%20Ratio) As of June 30, 2025, the gearing ratio decreased to approximately 4.8% from 9.9% at the end of 2024, primarily due to a reduction in bank loans - Gearing ratio decreased to approximately **4.8%** (December 31, 2024: approximately 9.9%)[72](index=72&type=chunk) - The decrease was primarily due to a **reduction in bank loans**[72](index=72&type=chunk) - Total interest-bearing debt was **RMB 56.4 million**[72](index=72&type=chunk) [Net Cash Used in Operating Activities](index=32&type=section&id=Net%20Cash%20Used%20in%20Operating%20Activities) For the six months ended June 30, 2025, net cash used in operating activities increased to RMB 101.3 million, primarily due to increased inventories and decreased payables - Net cash used in operating activities increased to **RMB 101.3 million** (prior year: RMB 70.1 million)[73](index=73&type=chunk) - The change was primarily due to an **increase in inventories and a decrease in payables**[73](index=73&type=chunk) [Net Cash Used in Investing Activities](index=32&type=section&id=Net%20Cash%20Used%20in%20Investing%20Activities) For the six months ended June 30, 2025, net cash used in investing activities significantly decreased to RMB 5.4 million, primarily due to increased proceeds from subsidiary disposal - Net cash used in investing activities decreased to **RMB 5.4 million** (prior year: RMB 48.1 million)[74](index=74&type=chunk) - The change in net cash was primarily due to **increased proceeds from the disposal of a subsidiary**[74](index=74&type=chunk) [Net Cash Generated from Financing Activities](index=32&type=section&id=Net%20Cash%20Generated%20from%20Financing%20Activities) For the six months ended June 30, 2025, net cash generated from financing activities increased to RMB 133.0 million, primarily due to an increase in bills payable - Net cash generated from financing activities increased to **RMB 133.0 million** (prior year: RMB 115.5 million)[75](index=75&type=chunk) - The change was primarily due to an **increase in bills payable**[75](index=75&type=chunk) [Net Current Assets and Liabilities](index=32&type=section&id=Net%20Current%20Assets%20and%20Liabilities) As of June 30, 2025, net current assets were RMB 734,820 thousand, a 5.3% increase from the end of 2024, with inventories, deposits, and amounts due from related parties increasing, while trade receivables, pledged trade receivables, contract assets, contract liabilities, refund liabilities, other payables, and provisions all decreased, and borrowings and lease liabilities also changed Net Current Assets (RMB '000) | Indicator | As of June 30, 2025 | As of December 31, 2024 | | :--- | :--- | :--- | | Net current assets | 734,820 | 697,591 | [Inventories](index=32&type=section&id=Inventories) As of June 30, 2025, inventory balance increased by 30.3% to RMB 358.0 million, primarily due to increased product orders and delayed shipments after production - Inventory balance increased by **30.3% to RMB 358.0 million**[76](index=76&type=chunk) - Primarily due to increased product orders and products not yet shipped after production[76](index=76&type=chunk) [Trade Receivables and Pledged Trade Receivables](index=33&type=section&id=Trade%20Receivables%20and%20Pledged%20Trade%20Receivables) As of June 30, 2025, trade receivables decreased by 16.7% to RMB 608.8 million, and pledged trade receivables decreased by 32.1% to RMB 51.3 million, primarily due to collection efforts, subsidiary disposals, and early discounting of bills - Trade receivables decreased by **16.7% to RMB 608.8 million**[77](index=77&type=chunk) - Pledged trade receivables decreased by **32.1% to RMB 51.3 million**[77](index=77&type=chunk) - The decrease was primarily due to **collection efforts, subsidiary disposals, and early discounting of bank bills**[77](index=77&type=chunk) [Contract Assets](index=33&type=section&id=Contract%20Assets) As of June 30, 2025, contract assets decreased to RMB 26.9 million, primarily due to a reduction in retention receivables from pipe product sales - Contract assets decreased to **RMB 26.9 million**[78](index=78&type=chunk) - Primarily due to a **reduction in retention receivables from pipe product sales**[78](index=78&type=chunk) [Deposits, Prepayments and Other Receivables](index=33&type=section&id=Deposits%2C%20Prepayments%20and%20Other%20Receivables) As of June 30, 2025, deposits, prepayments, and other receivables increased to RMB 224.4 million, primarily due to higher prepayments for raw materials - Deposits, prepayments, and other receivables increased to **RMB 224.4 million**[79](index=79&type=chunk) - Primarily due to an **increase in prepayments for raw materials**[79](index=79&type=chunk) [Amounts Due From/To Related Parties](index=33&type=section&id=Amounts%20Due%20From%2FTo%20Related%20Parties) As of June 30, 2025, amounts due from related parties increased to RMB 17.6 million, and amounts due to related parties increased to RMB 13.9 million, both primarily due to increased unsettled trade balances at period-end - Amounts due from related parties increased to **RMB 17.6 million**[80](index=80&type=chunk) - Amounts due to related parties increased to **RMB 13.9 million**[80](index=80&type=chunk) - Both increases were primarily due to **higher unsettled trade balances at the end of the interim period**[80](index=80&type=chunk) [Trade Payables and Bills Payable](index=33&type=section&id=Trade%20Payables%20and%20Bills%20Payable) As of June 30, 2025, trade payables and bills payable increased to RMB 683.1 million, primarily due to an increase in bills payable - Trade payables and bills payable increased to **RMB 683.1 million**[81](index=81&type=chunk) - Primarily due to an **increase in bills payable**[81](index=81&type=chunk) [Contract Liabilities](index=34&type=section&id=Contract%20Liabilities) As of June 30, 2025, contract liabilities decreased to RMB 67.2 million, related to the timing of product delivery to customers - Contract liabilities decreased to **RMB 67.2 million**[82](index=82&type=chunk) - Related to the **timing of product delivery to customers**[82](index=82&type=chunk) [Refund Liabilities](index=34&type=section&id=Refund%20Liabilities) As of June 30, 2025, refund liabilities decreased to RMB 4.5 million - Refund liabilities decreased to **RMB 4.5 million**[83](index=83&type=chunk) [Other Payables and Accrued Expenses](index=34&type=section&id=Other%20Payables%20and%20Accrued%20Expenses) As of June 30, 2025, other payables and accrued expenses decreased to RMB 64.5 million, primarily due to a reduction in accrued expenses - Other payables and accrued expenses decreased to **RMB 64.5 million**[84](index=84&type=chunk) - Primarily due to a **reduction in accrued expenses**[84](index=84&type=chunk) [Provisions](index=34&type=section&id=Provisions) As of June 30, 2025, provisions decreased to RMB 1.3 million, primarily representing warranties provided for products sold - Provisions decreased to **RMB 1.3 million**[85](index=85&type=chunk) - Provisions refer to **warranties provided for products sold**[85](index=85&type=chunk) [Borrowings](index=34&type=section&id=Borrowings) As of June 30, 2025, borrowings decreased to RMB 56.4 million, mainly due to a reduction in bank loans, with RMB 46.9 million repayable within one year - Borrowings decreased to **RMB 56.4 million**[86](index=86&type=chunk) - Primarily due to a **reduction in bank loans**[86](index=86&type=chunk) - **RMB 46.9 million** is repayable within one year[86](index=86&type=chunk) [Lease Liabilities](index=34&type=section&id=Lease%20Liabilities) As of June 30, 2025, the Group's lease liabilities were approximately RMB 2.0 million, primarily arising from property leases for factories in Vietnam and Thailand - Lease liabilities were approximately **RMB 2.0 million**[87](index=87&type=chunk) - Primarily from **two leased properties in Vietnam and Thailand** used for factory operations[87](index=87&type=chunk) [Foreign Exchange Risk](index=34&type=section&id=Foreign%20Exchange%20Risk) While most of the Group's assets and liabilities are RMB-denominated, some bank balances and overseas sales receivables are denominated in USD, HKD, VND, and THB, exposing the Group to foreign exchange fluctuations, which are primarily managed through foreign currency forward contracts - Most assets and liabilities are **RMB-denominated**[88](index=88&type=chunk) - Some bank balances and overseas sales receivables are denominated in **USD, HKD, VND, and THB**[88](index=88&type=chunk) - Potential foreign exchange fluctuations are managed through **foreign currency forward contracts**, though no hedging transactions were entered into[89](index=89&type=chunk) [Dividends](index=35&type=section&id=Dividends) The Board does not recommend the payment of any dividend for the six months ended June 30, 2025 - The Board does not recommend the payment of any dividend for the **six months ended June 30, 2025**[90](index=90&type=chunk) [Pledge of Assets](index=35&type=section&id=Pledge%20of%20Assets) As of June 30, 2025, the Group had pledged property, plant, equipment, right-of-use assets, pledged trade receivables, and pledged bank deposits with a net book value of approximately RMB 405.7 million as collateral for bank financing - Assets with a net book value of approximately **RMB 405.7 million** were pledged as collateral for bank financing[91](index=91&type=chunk) - Pledged assets include **property, plant, equipment, right-of-use assets, pledged trade receivables, and pledged bank deposits**[91](index=91&type=chunk) [Contingent Liabilities](index=35&type=section&id=Contingent%20Liabilities) As of June 30, 2025, the Group had no significant contingent liabilities - As of June 30, 2025, the Group had **no significant contingent liabilities**[92](index=92&type=chunk) [Material Investments Held, Major Acquisitions and Disposals of Subsidiaries, Associates and Joint Ventures by the Group](index=35&type=section&id=Material%20Investments%20Held%2C%20Major%20Acquisitions%20and%20Disposals%20of%20Subsidiaries%2C%20Associates%20and%20Joint%20Ventures%20by%20the%20Group) On March 28, 2025, the Group completed the disposal of 100% equity interest in Shandong Maike Intelligent Technology Co., Ltd. and Yongqing County Keqi Trading Co., Ltd., receiving cash consideration of RMB 45,000 thousand; other than this, there were no other material investments or acquisitions/disposals during the period - Completed the disposal of 100% equity interest in Shandong Maike Intelligent Technology Co., Ltd. and Yongqing County Keqi Trading Co., Ltd. on **March 28, 2025**, receiving cash consideration of **RMB 45,000 thousand**[93](index=93&type=chunk) - Other than the above, there were **no other material investments or acquisitions/disposals** during the period[93](index=93&type=chunk) [Future Plans for Material Investments or Capital Assets](index=35&type=section&id=Future%20Plans%20for%20Material%20Investments%20or%20Capital%20Assets) As of the date of this announcement, the Group has no other future plans regarding material investments or capital assets - As of the date of this announcement, the Group has **no other future plans** regarding material investments or capital assets[94](index=94&type=chunk) [Other Information](index=36&type=section&id=V.%20Other%20Information) This section covers employee information, post-reporting period events, industry outlook, risk management, environmental protection, and corporate governance compliance [Employees and Remuneration Policy](index=36&type=section&id=Employees%20and%20Remuneration%20Policy) As of June 30, 2025, the Group had 1,207 employees with staff costs of approximately RMB 57.4 million, offering fixed salaries, commissions, performance bonuses, paid leave, and various allowances, while emphasizing employee training and development - As of June 30, 2025, the Group had **1,207 employees** (December 31, 2024: 1,229 employees)[95](index=95&type=chunk) - Staff costs were approximately **RMB 57.4 million** (prior year: RMB 57.7 million)[95](index=95&type=chunk) Employee Distribution by Function (As of June 30, 2025) | Function | China (incl. Hong Kong) | Vietnam | Thailand | | :--- | :--- | :--- | :--- | | Management, Administration, Accounting | 56 | 2 | 3 | | Production | 618 | 173 | 69 | | Quality Control | 30 | 1 | 1 | | Procurement and Inventory | 32 | 1 | 1 | | Research and Development | 113 | – | – | | Sales and Marketing | 107 | – | – | | **Total Employees** | **956** | **177** | **74** | [Events After the Reporting Period](index=36&type=section&id=Events%20After%20the%20Reporting%20Period) As of the date of this interim results announcement, there have been no significant events after June 30, 2025, that would materially affect the Group's operations and financial performance - There were **no significant events after the reporting period** that would materially affect the Group's operations and financial performance[96](index=96&type=chunk) [No Other Material Changes](index=36&type=section&id=No%20Other%20Material%20Changes) There have been no other material changes in the Group's financial position or business since the announcement of the annual results for the year ended December 31, 2024 - There have been **no other material changes** in the Group's financial position or business since the announcement of the annual results for the year ended December 31, 2024[97](index=97&type=chunk) [Industry Trends and Future Strategies](index=37&type=section&id=Industry%20Trends%20and%20Future%20Strategies) The steel pipe industry faced multiple challenges in the first half of 2025 but anticipates new opportunities in the second half, with the Group pursuing sustainable growth through marketing breakthroughs, lean production, digital empowerment, and team upgrades [Industry Trends](index=37&type=section&id=Industry%20Trends) In the first half of 2025, the steel pipe industry faced challenges including domestic overcapacity, rising environmental costs, slowing demand from real estate and infrastructure, and increasing international trade protectionism, but new demand is expected in the second half from '14th Five-Year Plan' major projects and 'Belt and Road' initiatives - The first half faced challenges such as **domestic overcapacity, rising environmental costs, and slowing demand from real estate and infrastructure**[98](index=98&type=chunk) - The international market faced challenges including **rising trade protectionism, the China-US trade war, and EU carbon tariffs**[98](index=98&type=chunk) - The second half is expected to see new demand generated by **'14th Five-Year Plan' major projects and 'Belt and Road' initiatives** in countries along the route[98](index=98&type=chunk) [Future Strategic Initiatives](index=37&type=section&id=Future%20Strategic%20Initiatives) The Group will drive sustainable growth through strategic initiatives including 'deep cultivation + expansion' in overseas markets, accelerating domestic client onboarding, lean production for quality and cost efficiency, digital empowerment for management decisions, and optimizing team structure and talent systems - Marketing Breakthroughs: Implement a **'deep cultivation + expansion' strategy** in overseas markets and accelerate client onboarding in the domestic market[99](index=99&type=chunk) - Lean Production: Enhance quality and cost efficiency through **capacity expansion, process optimization, and supply chain collaboration**[99](index=99&type=chunk) - Digital Empowerment: Integrate full-chain data, streamline operational processes, and improve **management efficiency and decision-making accuracy**[99](index=99&type=chunk) - Team Upgrades: Optimize organizational structure and talent system, strengthening **execution and innovation capabilities**[99](index=99&type=chunk) [Risk Management](index=37&type=section&id=Risk%20Management) Management formulates and implements risk management policies covering strategic, operational, financial, and legal risks, with the Board responsible for overseeing the overall risk management system and quarterly evaluating and updating policies - Management formulates and implements risk management policies to address **strategic, operational, financial, and legal risks**[100](index=100&type=chunk) - The Board is responsible for overseeing the overall risk management system, evaluating and updating policies **quarterly**[100](index=100&type=chunk) [Environmental Protection](index=38&type=section&id=Environmental%20Protection) The Group complies with environmental laws and regulations in China, Vietnam, and Thailand, optimizing pollution control systems to reduce energy consumption by 5% for dust removal facilities and enhancing environmental management through interlocking hardware and electronic transfer manifest systems during the reporting period - Complies with environmental laws and regulations in **China, Vietnam, and Thailand**[101](index=101&type=chunk) - Optimized environmental pollution control systems, achieving a **5% reduction in energy consumption** for dust removal and pollution control facilities[101](index=101&type=chunk) - Increased environmental interlocking hardware facilities and implemented an **electronic transfer manifest system** to enhance environmental management standards[101](index=101&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=38&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company's%20Listed%20Securities) For the six months ended June 30, 2025, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities - Neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the **Company's listed securities**[102](index=102&type=chunk) [Compliance with Corporate Governance Code](index=38&type=section&id=Compliance%20with%20Corporate%20Governance%20Code) The Company has fully complied with the code provisions of the Corporate Governance Code set out in Appendix C1 to the Listing Rules of the Stock Exchange - The Company has fully complied with the code provisions of the **Corporate Governance Code** set out in Appendix C1 to the Listing Rules of the Stock Exchange[103](index=103&type=chunk) [Compliance with Model Code for Securities Transactions](index=38&type=section&id=Compliance%20with%20Model%20Code%20for%20Securities%20Transactions) The Company has adopted the Model Code for Securities Transactions set out in Appendix C3 to the Listing Rules as the code of conduct for directors' securities transactions, and all directors have confirmed compliance upon inquiry - The Company has adopted the **Model Code for Securities Transactions** set out in Appendix C3 to the Listing Rules as the code of conduct for directors' securities transactions[104](index=104&type=chunk) - All directors have confirmed compliance with the Model Code, with **no instances of non-compliance** found[104](index=104&type=chunk) [Audit Committee](index=39&type=section&id=Audit%20Committee) The Audit Committee, comprising three independent non-executive directors, has reviewed the Group's unaudited condensed consolidated interim results for the six months ended June 30, 2025, and discussed and reviewed accounting principles, internal controls, and risk management systems - The Audit Committee comprises **three independent non-executive directors**[105](index=105&type=chunk) - Reviewed the Group's **unaudited condensed consolidated interim results for the six months ended June 30, 2025**[105](index=105&type=chunk) - Discussed and reviewed the adequacy and effectiveness of **accounting principles, internal control systems, risk management functions, and financial reporting systems**[105](index=105&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 and Company websites, and the interim report will be dispatched to shareholders and posted on the website in due course - The interim results announcement has been published on the **HKEX website (www.hkexnews.hk)** and the **Company's website (www.mechpipingtech.com)**[106](index=106&type=chunk) - The interim report will be **dispatched to shareholders and posted on the website in due course**[106](index=106&type=chunk)

[Chairman's Report](index=1&type=section&id=Chairman%27s%20Report) This section provides an overview of the group's financial performance, including net loss and property impairment, and outlines the interim dividend policy [Performance Overview](index=1&type=section&id=Performance%20Overview) The Group recorded a net loss attributable to owners of the parent of approximately HKD 210 million for H1 2025, a 26.5% increase, primarily due to property impairment losses of approximately HKD 99.4 million - Global economic slowdown, geopolitical tensions, and tariff disputes continue to impact Hong Kong's economic recovery[4](index=4&type=chunk) Net Loss Attributable to Owners of the Parent | Indicator | H1 2025 (HKD) | H1 2024 (HKD) | Change (%) | | :--- | :--- | :--- | :--- | | Net Loss | 210,000,000 | 166,000,000 | 26.5% (Increase) | | Property Impairment Loss | 99,400,000 | - | - | [Interim Dividend Policy](index=1&type=section&id=Interim%20Dividend%20Policy) The Board decided not to declare an interim dividend for the period to preserve cash reserves in the challenging operating environment - The Board does not recommend paying an interim dividend for H1 2025 (H1 2024: nil), aiming to preserve cash reserves for future difficulties and challenges[5](index=5&type=chunk) [Business Review](index=2&type=section&id=Business%20Review) A detailed look at the performance of the Group's diverse business segments, including property, securities, luxury automotive, collectibles, logistics, and cultural entertainment [Hong Kong Property Business](index=2&type=section&id=Hong%20Kong%20Property%20Business) The Hong Kong property market remains sluggish, with the Group's property values facing revaluation pressure due to US economic and interest rate uncertainties - Hong Kong's property market continues to be sluggish, with the Group's property values facing revaluation pressure due to US economic and interest rate uncertainties[7](index=7&type=chunk) [Securities Business](index=2&type=section&id=Securities%20Business) The company did not trade listed stocks or securities in H1 2025 to preserve cash and reduce risk, with primary income from interest on bills receivable - In H1 2025, the company did not trade listed stocks or securities to preserve cash and reduce risk[8](index=8&type=chunk) - Securities business revenue primarily derived from stable interest income on bills receivable[8](index=8&type=chunk) [Blackbird Group](index=2&type=section&id=Blackbird%20Group) Blackbird Group operates Ferrari and Maserati dealerships in Hong Kong and Macau, valuable collectibles trading, and automotive logistics, showing satisfactory development despite challenges - Blackbird Group's main businesses include Ferrari and Maserati dealerships, valuable collectibles trading and investment, and automotive logistics[9](index=9&type=chunk) - Management is satisfied with the positive momentum of Blackbird Group's multifaceted automotive business, despite a challenging operating environment[9](index=9&type=chunk) [Ferrari Business](index=2&type=section&id=Ferrari%20Business) Blackbird Concessionaires, the exclusive Ferrari importer for HK/Macau, saw increased delivery speed in H1 2025, with strong demand for new models and excellent certified pre-owned performance - Blackbird Concessionaires, as the exclusive Ferrari importer for Hong Kong and Macau, increased delivery speed in H1 2025, with full-year production expected to grow by **10%**[10](index=10&type=chunk) - Deliveries of the Ferrari Purosangue and limited-edition Daytona SP3 continue, indicating sustained demand for top-tier Ferrari products[11](index=11&type=chunk) - Personalization levels for new Ferrari orders are ahead of commercial targets, showing a slight increase of **5%** year-to-date[11](index=11&type=chunk) - The 296 Speciale, launched in April 2025, saw nearly **90%** of its 3-year lifecycle allocation for the Hong Kong market sold out before its local launch[12](index=12&type=chunk) - The official Ferrari Certified Pre-Owned program achieved strong consignment and sales results, meeting its **100%** Ferrari Certified penetration target[12](index=12&type=chunk) - Over **80%** of Ferrari Certified Pre-Owned buyers are first-time purchasers, making the program a key channel for new car promotion and sales[12](index=12&type=chunk) - The Ferrari Official Technical Service, Aftersales, and Spare Parts department in Kwai Chung implemented new strategies to recover lost vehicles and maintain growth[14](index=14&type=chunk) - Blackbird Concessionaires' business maintains good momentum for the remainder of 2025, with plans to launch two new Ferrari models[14](index=14&type=chunk) [Maserati Business](index=4&type=section&id=Maserati%20Business) Blackbird Tridente, the exclusive Maserati importer for HK/Macau, achieved stable sales driven by Grecale SUV demand, with the electric Grecale Folgore now delivering and new GranTurismo arriving - Blackbird Tridente recorded stable sales performance, primarily driven by sustained demand for the high-end SUV Grecale[15](index=15&type=chunk) - Maserati's first all-electric SUV, the Grecale Folgore, has begun deliveries, marking a significant milestone in the brand's electrification journey[15](index=15&type=chunk) - The new GranTurismo sports car is set to enter the Hong Kong and Macau markets, expected to solidify the brand's position in the luxury sports car segment[15](index=15&type=chunk) [Valuable Collectibles Trading and Investment Business](index=4&type=section&id=Valuable%20Collectibles%20Trading%20and%20Investment%20Business) The classic and investment-grade car market is affected by global weakness, but management remains cautiously optimistic for long-term growth, while the vintage watch division thrives - The classic and investment-grade car market is affected by global market weakness, but management remains cautiously optimistic about long-term development[16](index=16&type=chunk) - The vintage watch division enjoys a strong reputation for its magazine and online platform, engaging in editorial collaborations and consulting services with several important brands[17](index=17&type=chunk) [Blackbird Works Supply (Logistics Business)](index=5&type=section&id=Blackbird%20Works%20Supply%20%28Logistics%20Business%29) Blackbird Works Supply encompasses Hong Kong, cross-border, pre-delivery inspection, and call center logistics, with Hong Kong logistics as the main revenue driver and growth in cross-border and call center services - Blackbird Works Supply comprises Hong Kong logistics, cross-border logistics (Mainland China and Macau), pre-delivery inspection and roll-on/roll-off vessel handling, and call center services[18](index=18&type=chunk) - Hong Kong logistics remains the primary revenue source, with cross-border logistics services to Mainland China continuing to grow[18](index=18&type=chunk) - Call center business continues to grow as various brands cut costs and switch to its services[18](index=18&type=chunk) - Blackbird Works Supply is updating its internal systems and exploring new business models and market opportunities, with an optimistic growth outlook[18](index=18&type=chunk) [Culture and Entertainment Business](index=5&type=section&id=Culture%20and%20Entertainment%20Business) To streamline operations, the Group disposed of its interest in an associate engaged in stage audio, lighting, and engineering business in February 2025, making film business its sole activity - The Group disposed of its interest in an associate engaged in stage audio, lighting, and stage engineering business on February 28, 2025[19](index=19&type=chunk) - Following the disposal, the film business became the sole activity of the cultural and entertainment segment[19](index=19&type=chunk) [Outlook](index=6&type=section&id=Outlook) Facing global economic slowdown, geopolitical tensions, and tariff disputes, the Group anticipates a slow and uneven recovery, focusing on developing the Blackbird automotive group and prudent financial management - The global and local economic outlook faces challenges, with recovery likely to be slow and uneven[20](index=20&type=chunk) - The Group will continue to focus on building and developing the Blackbird automotive group, aiming to become one of the global leaders in the automotive industry[20](index=20&type=chunk) - The Group will implement prudent financial management and cost-saving measures, striving to turn challenges into opportunities for long-term sustainable growth and enhanced shareholder value[20](index=20&type=chunk) [Acknowledgements](index=6&type=section&id=Acknowledgements) The Board extends sincere gratitude to directors, management, employees, shareholders, investors, banks, customers, suppliers, and landlords for their unwavering commitment and support during challenging times - The Board extends its sincere gratitude to the directors, management, employees, shareholders, investors, banks, customers, suppliers, and landlords[21](index=21&type=chunk) [Financial Performance Review](index=7&type=section&id=Financial%20Performance%20Review) An overview of the Group's financial results for H1 2025, including revenue, loss, and segment-specific performance, highlighting key drivers of change [Summary of Financial Results for H1 2025](index=7&type=section&id=Summary%20of%20Financial%20Results%20for%20H1%202025) The Group's revenue decreased by 19.4% to approximately HKD 258 million in H1 2025, with loss expanding to HKD 210 million, primarily due to property impairment losses Summary of Financial Results for H1 2025 | Indicator | 2025 (HKD million) | 2024 (HKD million) | Increase/(Decrease) Percentage | | :--- | :--- | :--- | :--- | | Revenue | 258 | 320 | (19.4%) | | Finance Costs | 57 | 57 | –% | | Loss Before Tax | (210) | (165) | 27.3% | | Income Tax Expense | – | (1) | (100.0%) | | Loss for the Period | (210) | (166) | 26.5% | | Loss Attributable to Owners of the Parent | (210) | (166) | 26.5% | | Basic Loss Per Share | (HKD 0.132) | (HKD 0.104) | 26.9% | | Diluted Loss Per Share | (HKD 0.132) | (HKD 0.104) | 26.9% | | Dividend Per Share | Nil | Nil | Not Applicable | - Revenue decrease primarily due to the disposal of unprofitable multimedia business in June 2024 and continued weakness in the global valuable collectibles market[24](index=24&type=chunk) - Loss expansion mainly due to property impairment losses of approximately **HKD 99.4 million** (H1 2024: approximately HKD 43 million) recognized on assets classified as a disposal group held for sale[25](index=25&type=chunk) [Analysis by Business Segment](index=8&type=section&id=Analysis%20by%20Business%20Segment) The Group's business segments showed mixed performance, with Ferrari business revenue growing 7.4% while property, Maserati, collectibles, logistics, and cultural entertainment segments experienced declines or increased losses Revenue for the Six Months Ended June 30 (by Business Segment) | Business Segment | 2025 Amount (HKD million) | 2025 Relative Percentage | 2024 Amount (HKD million) | 2024 Relative Percentage | Increase/(Decrease) Percentage | | :--- | :--- | :--- | :--- | :--- | :--- | | Property Investment and Holding | 1 | 0.4% | 4 | 1.2% | (75.0%) | | Ferrari Business | 204 | 79.0% | 190 | 59.4% | 7.4% | | Maserati Business | 22 | 8.5% | 39 | 12.2% | (43.6%) | | Valuable Collectibles and Logistics Business | 20 | 7.8% | 57 | 17.8% | (64.9%) | | Other Businesses | 11 | 4.3% | 30 | 9.4% | (63.3%) | | **Total** | **258** | **100.0%** | **320** | **100.0%** | **(19.4%)** | Operating Profit/(Loss) for the Six Months Ended June 30 (by Business Segment) | Business Segment | 2025 (HKD million) | 2024 (HKD million) | Increase/(Decrease) Percentage | | :--- | :--- | :--- | :--- | | Property Investment and Holding | (102) | (41) | 148.8% | | Securities Business | 4 | 4 | –% | | Ferrari Business | 5 | 3 | 66.7% | | Maserati Business | (4) | (7) | (42.9%) | | Valuable Collectibles and Logistics Business | (12) | (22) | (45.5%) | | Culture and Entertainment Business | –* | –* | –% | | Other Businesses | (10) | (22) | (54.5%) | | **Total** | **(119)** | **(85)** | **40.0%** | *Operating loss less than HKD 1 million - Hong Kong property business rental income decreased by **75%** to **HKD 1 million**, with operating loss expanding to **HKD 102 million**, primarily due to property impairment losses[29](index=29&type=chunk) - Ferrari business revenue increased by **7.4%** to **HKD 204 million**, and operating profit increased by **HKD 2 million** to **HKD 5 million**, benefiting from accelerated car deliveries and stable service center performance[31](index=31&type=chunk) - Maserati business revenue decreased by **43.6%** to **HKD 22 million**, but operating loss narrowed to **HKD 4 million**[32](index=32&type=chunk) - Valuable collectibles and logistics business revenue and operating loss decreased by **64.9%** and **45.5%** respectively, mainly due to global market weakness[33](index=33&type=chunk) - Following the disposal of the stage audio, lighting, and stage engineering business, the film business became the sole activity of the cultural and entertainment segment, with no revenue and an operating loss of less than **HKD 1 million** for the period[34](index=34&type=chunk) - Other businesses saw revenue decrease by **63.3%** and operating loss narrow by **54.5%**, primarily due to the disposal of the unprofitable multimedia business in June 2024[35](index=35&type=chunk) [Analysis by Geographical Region](index=10&type=section&id=Analysis%20by%20Geographical%20Region) The majority of the Group's revenue, approximately HKD 258 million, originated from Hong Kong, Macau, and Mainland China, a 11.3% decrease from H1 2024, mainly due to the disposal of Hong Kong multimedia business Revenue for the Six Months Ended June 30 (by Geographical Region) | Region | 2025 Amount (HKD million) | 2025 Relative Percentage | 2024 Amount (HKD million) | 2024 Relative Percentage | Increase/(Decrease) Percentage | | :--- | :--- | :--- | :--- | :--- | :--- | | Hong Kong, Macau and Mainland China | 258 | 100.0% | 291 | 90.9% | (11.3%) | | Rest of the World | –* | –% | 29 | 9.1% | (100.0%) | | **Total** | **258** | **100.0%** | **320** | **100.0%** | **(19.4%)** | *Less than HKD 1 million - Revenue decrease primarily due to the disposal of the unprofitable Hong Kong multimedia business in June 2024[38](index=38&type=chunk) - Revenue from the Rest of the World, mainly from global sales of valuable collectibles, recorded no sales for the period due to market weakness[38](index=38&type=chunk) [Capital Structure and Liquidity](index=11&type=section&id=Capital%20Structure%20and%20Liquidity) An analysis of the Group's capital structure, gearing ratio, liquidity, and financial resources, including details on borrowings, capital commitments, and treasury management [Capital Structure and Gearing Ratio](index=11&type=section&id=Capital%20Structure%20and%20Gearing%20Ratio) As of June 30, 2025, shareholders' equity decreased to HKD 462 million due to the period's loss, increasing the gearing ratio to 78.2% from 70.5%, with total outstanding borrowings of HKD 1,662 million, 99.2% short-term Capital Structure | Indicator | June 30, 2025 (HKD million) | June 30, 2025 Relative Percentage | December 31, 2024 (HKD million) | December 31, 2024 Relative Percentage | | :--- | :--- | :--- | :--- | :--- | | Bank Borrowings | 1,157 | 54.4% | 1,172 | 51.5% | | Other Borrowings | 350 | 16.5% | 261 | 11.5% | | Lease Liabilities | 26 | 1.2% | 43 | 1.9% | | Convertible Bonds | 98 | 4.6% | 96 | 4.2% | | Bank Borrowings Directly Related to Assets Classified as Held for Sale | 31 | 1.5% | 33 | 1.4% | | **Total Borrowings** | **1,662** | **78.2%** | **1,605** | **70.5%** | | Shareholders' Equity Attributable to Owners of the Parent | 462 | 21.8% | 672 | 29.5% | | **Total Capital Employed** | **2,124** | **100.0%** | **2,277** | **100.0%** | - Shareholders' equity attributable to owners of the parent decreased by approximately **HKD 210 million**, primarily due to the net loss for the period[39](index=39&type=chunk) - The gearing ratio increased from **70.5%** as of December 31, 2024, to **78.2%** as of June 30, 2025, mainly due to the decrease in equity[40](index=40&type=chunk) - Total outstanding borrowings amounted to approximately **HKD 1,662 million**, of which approximately **99.2%** were short-term in nature[40](index=40&type=chunk) [Liquidity and Financial Resources](index=12&type=section&id=Liquidity%20and%20Financial%20Resources) The Group's net current liabilities increased to HKD 1,328 million, primarily due to working capital usage and property impairment, with all bank borrowings reclassified as current liabilities due to covenant non-compliance Net Current Liabilities | Indicator | June 30, 2025 (HKD million) | December 31, 2024 (HKD million) | | :--- | :--- | :--- | | Current Assets | 832 | 950 | | Current Liabilities | (2,160) | (2,100) | | **Net Current Liabilities** | **(1,328)** | **(1,150)** | - Net current liabilities increased by approximately **HKD 178 million**, primarily due to working capital usage and property impairment losses[42](index=42&type=chunk) - The Group's failure to comply with bank financial covenants (requiring shareholders' equity of not less than **HKD 100 million**) resulted in the reclassification of all bank borrowings, approximately **HKD 1,140 million**, as current liabilities[43](index=43&type=chunk) - The Board expects to rely on net cash from operating activities, additional borrowings and fundraising activities, and disposal of non-core assets to meet working capital requirements[44](index=44&type=chunk) - Subsequent to the reporting period, the Group obtained additional capital of **HKD 82 million** and **HKD 5.58 million** through property and subsidiary disposals, and streamlined business operations[45](index=45&type=chunk) [Capital Commitments](index=13&type=section&id=Capital%20Commitments) As of June 30, 2025, the Group's capital commitments were approximately HKD 3 million, a decrease from HKD 5 million at the end of 2024, planned to be funded by internal resources Capital Commitments | Indicator | June 30, 2025 (HKD million) | December 31, 2024 (HKD million) | | :--- | :--- | :--- | | Capital Commitments | 3 | 5 | - The Group intends to fund capital commitments through internal resources[46](index=46&type=chunk) [Treasury Management](index=13&type=section&id=Treasury%20Management) The Group adopts a conservative approach to cash management and risk control, centralizing treasury activities for better risk control and efficient fund management, with no significant foreign exchange risk or interest rate hedging currently - The Group adopts a conservative approach to cash management and risk control, centralizing treasury activities for better risk control and efficient fund management[47](index=47&type=chunk) - Currently, foreign exchange risk is not significant, and no financial instruments are used to hedge interest rate risk, but this will be considered if needed[47](index=47&type=chunk) [Disposal of Significant Subsidiaries and Associates](index=13&type=section&id=Disposal%20of%20Significant%20Subsidiaries%20and%20Associates) The Group entered into an agreement on December 27, 2024, to dispose of its associate in the cultural entertainment business engaged in stage audio, lighting, and engineering for HKD 8.1 million, completed on February 28, 2025 - The Group entered into an agreement on December 27, 2024, to dispose of its associate in the cultural entertainment business engaged in stage audio, lighting, and stage engineering for **HKD 8.1 million**[48](index=48&type=chunk) - Following the completion of the disposal on February 28, 2025, the Group no longer operates the stage audio, lighting, and stage engineering business[48](index=48&type=chunk) [Other Significant Matters](index=14&type=section&id=Other%20Significant%20Matters) Key information regarding the Group's assets, liabilities, human resources, share option scheme, corporate governance, and convertible bonds [Pledge of Assets](index=14&type=section&id=Pledge%20of%20Assets) As of June 30, 2025, approximately HKD 1,983 million of the Group's assets and HKD 17 million in fixed deposits were pledged as collateral for bank and other borrowings Pledged Assets | Indicator | June 30, 2025 (HKD million) | December 31, 2024 (HKD million) | | :--- | :--- | :--- | | Net Book Value of Pledged Assets | 1,983 | 2,103 | | Pledged Fixed Deposits | 17 | 20 | [Contingent Liabilities](index=14&type=section&id=Contingent%20Liabilities) A subsidiary of the Group faces a legal claim related to property sales, but the Board, based on legal advice, believes a successful defense is probable, thus no provision has been made - A subsidiary of the Group faces a legal claim related to property sales[50](index=50&type=chunk) - The Board believes a successful defense is probable and has made no provision for the claim in this legal proceeding[50](index=50&type=chunk) [Employees and Remuneration Policy](index=14&type=section&id=Employees%20and%20Remuneration%20Policy) As of June 30, 2025, the Group had 175 employees, a decrease of 12 from end-2024, with a remuneration policy based on fairness, performance, and market competitiveness, including provident funds and bonuses Number of Employees | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Employees | 175 | 187 | - The remuneration policy is based on fairness, providing incentive-driven, performance-based, and market-competitive remuneration packages[51](index=51&type=chunk) [Share Option Scheme](index=14&type=section&id=Share%20Option%20Scheme) The Company adopted a 10-year share option scheme in 2021, limiting shares issued upon exercise to 10% of issued shares and total outstanding options to 30% of issued shares, with no options granted or exercised to date - The Company adopted the 2021 Share Option Scheme on June 23, 2021, with a 10-year validity period[52](index=52&type=chunk) - Under the scheme, the total number of shares that may be issued upon exercise of options shall not exceed **10%** of the shares in issue on the date of the 2021 AGM (i.e., **87,311,145 shares**)[53](index=53&type=chunk) - The total number of shares that may be issued upon exercise of all outstanding share options shall not exceed **30%** of the total number of shares in issue from time to time[53](index=53&type=chunk) - As of June 30, 2025, and the date of this announcement, no share options have been granted, exercised, lapsed, or cancelled[54](index=54&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities or Treasury Shares](index=15&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company%27s%20Listed%20Securities%20or%20Treasury%20Shares) Neither the Company nor its subsidiaries purchased, sold, or redeemed any of the Company's listed securities or treasury shares during the six months ended June 30, 2025 - Neither the Company nor any of its subsidiaries purchased, sold, or redeemed any listed securities or treasury shares during the period[55](index=55&type=chunk) - As of June 30, 2025, the Company held no treasury shares[56](index=56&type=chunk) [Corporate Governance](index=15&type=section&id=Corporate%20Governance) The Company is committed to high corporate governance standards, ensuring shareholder and stakeholder interests, with the Board confirming compliance with the Corporate Governance Code, except for the combined Chairman and CEO roles - The Company is committed to maintaining high standards of corporate governance to safeguard the interests of shareholders and key stakeholders[57](index=57&type=chunk) - The Board believes that all applicable provisions of the Corporate Governance Code were complied with during the period, except for Code Provision C.2.1 (separation of Chairman and Chief Executive Officer roles)[58](index=58&type=chunk) - The Board believes that Mr. Mak's dual role as Chairman and Chief Executive Officer, given his extensive experience, enhances communication between the Board and management and ensures effective strategy execution[59](index=59&type=chunk) [Standard Code for Securities Transactions by Directors and Relevant Employees](index=16&type=section&id=Standard%20Code%20for%20Securities%20Transactions%20by%20Directors%20and%20Relevant%20Employees) The Company has adopted a code of conduct for securities transactions by directors and employees with inside information, which is no less exacting than the Standard Code, and all directors confirmed compliance - The Company has adopted a code of conduct whose terms are no less exacting than the required standards of the Standard Code[60](index=60&type=chunk) - All Directors have confirmed their compliance with the Standard Code throughout the period[60](index=60&type=chunk) [Convertible Bonds](index=17&type=section&id=Convertible%20Bonds) The Group holds 2025 and 2024 convertible bonds; the 2025 bonds had an initial principal of HKD 220 million, partially converted or offset by asset sales, while the 2024 bonds were partially redeemed, with the remainder extended to August 18, 2025, at 9.0% interest - The 2025 Convertible Bonds had an initial principal amount of **HKD 220 million**, maturing on December 31, 2025, with an annual interest rate of **4.5%**[61](index=61&type=chunk) - A portion of the 2025 Convertible Bonds was converted into **731,250,000 shares** on May 17, 2023[61](index=61&type=chunk) - A portion of the principal of the 2025 Convertible Bonds has been offset through the disposal of multimedia business and landscape design services subsidiaries[62](index=62&type=chunk)[63](index=63&type=chunk) Outstanding Principal of 2025 Convertible Bonds | Date | Outstanding Principal (HKD million) | | :--- | :--- | | June 30, 2025 | 93.5 | | Date of this Announcement | 87.92 | - The 2024 Convertible Bonds had an initial principal amount of **HKD 30,011,500**, with portions redeemed on February 18, 2024, and at the initial maturity date[64](index=64&type=chunk) - The maturity date for the remaining outstanding principal of **HKD 6,755,000** of the 2024 Convertible Bonds was extended to August 18, 2025, with the conversion price changed to **HKD 0.15** per share and the annual interest rate increased to **9.0%**[65](index=65&type=chunk)[66](index=66&type=chunk) [Events After Reporting Period](index=19&type=section&id=Events%20After%20Reporting%20Period) Subsequent to the reporting period, the Group disposed of a property for HKD 82 million on August 25, 2025, and a group of subsidiaries engaged in landscape design, retail, and F&B for HKD 5.58 million on July 30, 2025 - On August 25, 2025, the Company disposed of House No. 7, Rosecliff, 20 Tai Tam Road, Hong Kong, for **HKD 82 million**[109](index=109&type=chunk) - On July 30, 2025, the Company disposed of a group of subsidiaries engaged in landscape design services, floral and plant retail, and catering business for **HKD 5.58 million**[109](index=109&type=chunk) [Review and Publication of Interim Results](index=19&type=section&id=Review%20and%20Publication%20of%20Interim%20Results) The Company's Audit Committee reviewed the unaudited condensed consolidated interim results, which have been published on the company and HKEX websites, with the interim report to be dispatched to shareholders - The Company's Audit Committee has reviewed the Group's unaudited condensed consolidated interim results for the period[68](index=68&type=chunk) - The interim results announcement has been published on the Company's website and the HKEX website[69](index=69&type=chunk) - The 2025 Interim Report will be dispatched to shareholders in due course and published on the Company's and HKEX websites[69](index=69&type=chunk) [Board Composition](index=19&type=section&id=Board%20Composition) As of the announcement date, the Board comprises two executive directors (Mr. Mak Siu Tong and Ms. Cheng Yuk Ching) and three independent non-executive directors (Mr. Chan Lik, Mr. Chau Siu Yue, and Mr. Lau Ho Kit) - The Board comprises two executive directors (Mr. Mak Siu Tong and Ms. Cheng Yuk Ching) and three independent non-executive directors (Mr. Chan Lik, Mr. Chau Siu Yue, and Mr. Lau Ho Kit)[70](index=70&type=chunk) [Financial Statements](index=20&type=section&id=Financial%20Statements) Presents the Group's condensed consolidated financial statements, including the statement of profit or loss, comprehensive income, and financial position, for the reporting period [Condensed Consolidated Statement of Profit or Loss](index=20&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss) For the six months ended June 30, 2025, the Group reported revenue of HKD 258 million, gross profit of HKD 53 million, a loss for the period of HKD 210 million, and basic and diluted loss per share of HKD 0.132 Condensed Consolidated Statement of Profit or Loss Summary | Indicator | 2025 (HKD million) | 2024 (HKD million) | | :--- | :--- | :--- | | Revenue | 258 | 320 | | Cost of Sales | (205) | (247) | | Gross Profit | 53 | 73 | | Other Income and Gains | 10 | 9 | | Selling and Distribution Expenses | (9) | (14) | | Administrative Expenses | (108) | (133) | | Other Expenses and Losses | (99) | (45) | | Finance Costs | (57) | (57) | | Share of Profits of Associates | – | 2 | | Loss Before Tax | (210) | (165) | | Income Tax Expense | – | (1) | | Loss for the Period | (210) | (166) | | Loss Attributable to Owners of the Parent | (210) | (166) | | Basic Loss Per Share | (HKD 0.132) | (HKD 0.104) | | Diluted Loss Per Share | (HKD 0.132) | (HKD 0.104) | [Condensed Consolidated Statement of Comprehensive Income](index=21&type=section&id=Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) For the six months ended June 30, 2025, the Group recorded a loss for the period of HKD 210 million, with zero other comprehensive income, resulting in a total comprehensive loss of HKD 210 million for the period Condensed Consolidated Statement of Comprehensive Income Summary | Indicator | 2025 (HKD million) | 2024 (HKD million) | | :--- | :--- | :--- | | Loss for the Period | (210) | (166) | | Other Comprehensive Income (that may be reclassified to profit or loss in subsequent periods) | – | –* | | Other Comprehensive Income (that will not be reclassified to profit or loss in subsequent periods) | – | 325 | | Other Comprehensive Income for the Period | – | 325 | | Total Comprehensive (Loss)/Income for the Period | (210) | 159 | | Total Comprehensive (Loss)/Income Attributable to Owners of the Parent | (210) | 159 | *Less than HKD 1 million [Condensed Consolidated Statement of Financial Position](index=22&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the Group's total assets were HKD 2,635 million, total liabilities HKD 2,173 million, and total shareholders' equity HKD 462 million, with net current liabilities of HKD 1,328 million Condensed Consolidated Statement of Financial Position Summary | Indicator | June 30, 2025 (HKD million) | December 31, 2024 (HKD million) | | :--- | :--- | :--- | | **Assets** | | | | Total Non-Current Assets | 1,803 | 1,836 | | Total Current Assets | 832 | 950 | | **Total Assets** | **2,635** | **2,786** | | **Equity and Liabilities** | | | | Total Shareholders' Equity | 462 | 672 | | Total Non-Current Liabilities | 13 | 14 | | Total Current Liabilities | 2,160 | 2,100 | | **Total Liabilities** | **2,173** | **2,114** | | **Total Equity and Liabilities** | **2,635** | **2,786** | | Net Current Liabilities | (1,328) | (1,150) | | Total Assets Less Current Liabilities | 475 | 686 | [Notes to the Condensed Consolidated Financial Information](index=24&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Information) Detailed explanations and disclosures supporting the condensed consolidated financial statements, covering basis of presentation, accounting policies, revenue, segment information, and other financial items [1. Basis of Presentation](index=24&type=section&id=1.%20Basis%20of%20Presentation) The Group recorded a net loss of HKD 210 million and net current liabilities of HKD 1,328 million as of June 30, 2025, facing significant going concern uncertainties, with the Board implementing plans to ensure sufficient working capital - As of June 30, 2025, the Group recorded a net loss of approximately **HKD 210 million** and net current liabilities of approximately **HKD 1,328 million**[75](index=75&type=chunk) - The Group failed to comply with bank financial covenants, resulting in the reclassification of all bank borrowings, approximately **HKD 1,140 million**, as current liabilities[77](index=77&type=chunk) - The Board has formulated various plans and measures, including active discussions for asset disposals, renewal and extension of borrowings, potential capital transactions, driving sales and collection of receivables, controlling administrative costs, and managing capital expenditures[76](index=76&type=chunk) - The Group's ability to continue as a going concern depends on the successful and timely disposal of assets, renewal of bank facilities, completion of capital transactions, and effective implementation of plans to improve operating cash flows[78](index=78&type=chunk) [2. Basis of Preparation](index=26&type=section&id=2.%20Basis%20of%20Preparation) The unaudited interim condensed consolidated financial information is prepared in accordance with Appendix D2 of the Listing Rules and HKAS 34, and should be read in conjunction with the 2024 audited annual consolidated financial statements - The unaudited interim condensed consolidated financial information is prepared in accordance with Appendix D2 of the Listing Rules and Hong Kong Accounting Standard 34 issued by the HKICPA[81](index=81&type=chunk) - It should be read in conjunction with the Group's audited annual consolidated financial statements for the year ended December 31, 2024[81](index=81&type=chunk) [3. Principal Accounting Policies](index=26&type=section&id=3.%20Principal%20Accounting%20Policies) The accounting policies used in preparing these financial statements are consistent with the 2024 annual consolidated financial statements, except for new HKFRS amendments which had no significant impact - The accounting policies adopted in preparing these financial statements are consistent with those applied in the 2024 annual consolidated financial statements[82](index=82&type=chunk) - HKAS 21 (Amendment) "Lack of Exchangeability" had no impact on the unaudited interim condensed consolidated financial information[83](index=83&type=chunk) [4. Revenue](index=26&type=section&id=4.%20Revenue) The Group's total revenue for H1 2025 was HKD 258 million, primarily from Ferrari business (HKD 204 million), with revenue recognition occurring at a point in time for goods or over time for services Revenue Analysis | Revenue Source | 2025 (HKD million) | 2024 (HKD million) | | :--- | :--- | :--- | | Ferrari Business | 204 | 190 | | Maserati Business | 22 | 39 | | Valuable Collectibles and Logistics Business | 20 | 57 | | Other Businesses | 11 | 30 | | Rental Income from Investment Properties | 1 | 4 | | **Total Revenue** | **258** | **320** | Disaggregation of Revenue from Contracts with Customers (by Timing of Revenue Recognition) | Timing of Revenue Recognition | Goods Transferred at a Point in Time (HKD million) | Services Transferred Over Time (HKD million) | Total (HKD million) | | :--- | :--- | :--- | :--- | | **H1 2025** | | | | | Ferrari Business | 163 | 41 | 204 | | Maserati Business | 12 | 10 | 22 | | Valuable Collectibles and Logistics Business | – | 20 | 20 | | Other Businesses | 11 | – | 11 | | **Total** | **186** | **71** | **257** | | **H1 2024** | | | | | Ferrari Business | 148 | 42 | 190 | | Maserati Business | 28 | 11 | 39 | | Valuable Collectibles and Logistics Business | 29 | 28 | 57 | | Other Businesses | 9 | 21 | 30 | | **Total** | **214** | **102** | **316** | - Performance obligations for sales of Ferrari and Maserati cars are satisfied upon delivery, with customers generally required to make advance payments[86](index=86&type=chunk)[87](index=87&type=chunk) - Performance obligations for providing automotive logistics and after-sales services are satisfied as services are rendered, with payments generally due within **30 to 90 days** after service completion[89](index=89&type=chunk) [5. Operating Segment Information](index=29&type=section&id=5.%20Operating%20Segment%20Information) The Group is segmented into seven operating divisions: Hong Kong Property, Securities, Ferrari, Maserati, Valuable Collectibles & Logistics, Culture & Entertainment, and Other Businesses, with Ferrari being the main revenue source - The Group is divided into seven operating segments: Hong Kong Property Investment and Holding, Securities Business, Ferrari Business, Maserati Business, Valuable Collectibles and Logistics Business, Culture and Entertainment Business, and Other Businesses[93](index=93&type=chunk) H1 2025 Operating Segment Revenue and Operating (Loss)/Profit | Segment | External Customer Sales (HKD million) | Other Income (HKD million) | Operating (Loss)/Profit (HKD million) | | :--- | :--- | :--- | :--- | | Property Investment and Holding | 1 | – | (102) | | Securities Business | – | 4 | 4 | | Ferrari Business | 204 | 5 | 5 | | Maserati Business | 22 | 1 | (4) | | Valuable Collectibles and Logistics Business | 20 | – | (12) | | Culture and Entertainment Business | – | – | –* | | Other Businesses | 11 | – | (10) | | **Total** | **258** | **10** | **(119)** | *Operating loss less than HKD 1 million Segment Assets and Liabilities as of June 30, 2025 | Segment | Segment Assets (HKD million) | Segment Liabilities (HKD million) | | :--- | :--- | :--- | | Property Investment and Holding | 911 | 855 | | Securities Business | 152 | 85 | | Ferrari Business | 297 | 421 | | Maserati Business | 29 | 44 | | Valuable Collectibles and Logistics Business | 272 | 61 | | Culture and Entertainment Business | 84 | 1 | | Other Businesses | 179 | 82 | | **Total** | **1,924** | **1,549** | Non-Current Assets (by Location of Assets) | Region | June 30, 2025 (HKD million) | December 31, 2024 (HKD million) | | :--- | :--- | :--- | | Hong Kong, Macau and Mainland China | 1,747 | 1,780 | | Rest of the World | 55 | 55 | | **Total** | **1,802** | **1,835** | - For the six months ended June 30, 2025, no single customer's sales revenue accounted for **10%** or more of the Group's total revenue[98](index=98&type=chunk) [6. Loss Before Tax](index=33&type=section&id=6.%20Loss%20Before%20Tax) The Group's loss before tax is presented after deducting various costs, including those related to Ferrari, Maserati, automotive services, other businesses, and depreciation and amortization expenses Items Deducted from Loss Before Tax | Item | 2025 (HKD million) | 2024 (HKD million) | | :--- | :--- | :--- | | Cost of Valuable Collectibles Sold | – | 29 | | Ferrari Business Costs | 171 | 158 | | Maserati Business Costs | 18 | 32 | | Cost of Automotive Services Provided | 13 | 17 | | Other Business Costs | 3 | 11 | | Depreciation and Amortization | 44 | 53 | [7. Income Tax Expense](index=33&type=section&id=7.%20Income%20Tax%20Expense) For H1 2025, the Group made no provision for Hong Kong profits tax or overseas taxation due to the absence of assessable profits, unlike H1 2024 which had a provision at 16.5% - In H1 2025, the Group made no provision for Hong Kong profits tax and overseas taxation due to the absence of assessable profits[101](index=101&type=chunk) - In H1 2024, Hong Kong profits tax was provided at a rate of **16.5%** on estimated assessable profits[101](index=101&type=chunk) [8. Dividends](index=33&type=section&id=8.%20Dividends) The Board declared no interim dividend for the six months ended June 30, 2025 (H1 2024: nil) - The Board declared no interim dividend for the six months ended June 30, 2025[102](index=102&type=chunk) [9. Loss Per Share Attributable to Owners of the Parent](index=34&type=section&id=9.%20Loss%20Per%20Share%20Attributable%20to%20Owners%20of%20the%20Parent) Basic and diluted loss per share for the six months ended June 30, 2025, was HKD 0.132, with convertible bonds not considered for diluted loss per share due to their anti-dilutive effect Calculation of Basic and Diluted Loss Per Share | Indicator | 2025 (HKD million) | 2024 (HKD million) | | :--- | :--- | :--- | | Loss Attributable to Owners of the Parent (for basic loss per share) | (210) | (166) | | Interest on Convertible Bonds | 5 | 6 | | Loss Attributable to Owners of the Parent Before Interest on Convertible Bonds | (205) | (160) | | | **Number of Shares** | **Number of Shares** | | | **June 30, 2025** | **June 30, 2024** | | Weighted Average Number of Ordinary Shares in Issue During the Period (for basic loss per share) | 1,599,675,452 | 1,604,361,452 | | Dilutive Effect – Weighted Average Number of Ordinary Shares from Convertible Bonds | 629,408,333 | 757,471,474 | | Weighted Average Number of Ordinary Shares (for diluted loss per share) | 2,229,083,785 | 2,361,832,926 | - For the six months ended June 30, 2025, convertible bonds had an anti-dilutive effect on basic loss per share and were therefore not considered in the calculation of diluted loss per share[103](index=103&type=chunk) [10. Property, Plant and Equipment](index=34&type=section&id=10.%20Property%2C%20Plant%20and%20Equipment) For the six months ended June 30, 2025, the Group added approximately HKD 12 million in property, plant, and equipment, including HKD 4 million in right-of-use assets Additions to Property, Plant and Equipment | Item | H1 2025 (HKD million) | H1 2024 (HKD million) | | :--- | :--- | :--- | | Additions to Property, Plant and Equipment | 12 | 12 | | Of which: Right-of-Use Assets | 4 | 11 | [11. Trade Receivables](index=35&type=section&id=11.%20Trade%20Receivables) As of June 30, 2025, the Group's total trade receivables were HKD 31 million, with 77% due within 180 days, and most businesses having a typical credit period of one month Ageing Analysis of Trade Receivables | Ageing | June 30, 2025 Balance (HKD million) | June 30, 2025 Percentage | December 31, 2024 Balance (HKD million) | December 31, 2024 Percentage | | :--- | :--- | :--- | :--- | :--- | | Within 180 days | 24 | 77% | 23 | 85% | | 181 to 365 days | 4 | 13% | 1 | 4% | | 1 to 2 years | 2 | 7% | 1 | 4% | | Over 2 years | 1 | 3% | 2 | 7% | | **Total** | **31** | **100%** | **27** | **100%** | - The credit period for most of the Group's businesses is typically one month[105](index=105&type=chunk) [12. Financial Assets at Fair Value Through Profit or Loss](index=35&type=section&id=12.%20Financial%20Assets%20at%20Fair%20Value%20Through%20Profit%20or%20Loss) As of June 30, 2025, and December 31, 2024, the Group's financial assets at fair value through profit or loss remained at HKD 5 million Financial Assets at Fair Value Through Profit or Loss | Indicator | June 30, 2025 (HKD million) | December 31, 2024 (HKD million) | | :--- | :--- | :--- | | Financial Assets | 5 | 5 | [13. Trade Payables](index=35&type=section&id=13.%20Trade%20Payables) As of June 30, 2025, the Group's total trade payables were HKD 24 million, with 83% overdue by more than 90 days; trade payables are interest-free, unsecured, and generally settled within 60 days Ageing Analysis of Trade Payables | Ageing | June 30, 2025 Balance (HKD million) | June 30, 2025 Percentage | December 31, 2024 Balance (HKD million) | December 31, 2024 Percentage | | :--- | :--- | :--- | :--- | :--- | | Current to 30 days | 3 | 13% | 16 | 38% | | 31 to 60 days | 1 | 4% | –* | –* | | 61 to 90 days | – | – | –* | –* | | Over 90 days | 20 | 83% | 26 | 62% | | **Total** | **24** | **100%** | **42** | **100%** | *Less than HKD 1 million - Trade payables are interest-free, unsecured, and generally settled within a **60-day** period[107](index=107&type=chunk) [14. Comparative Amounts](index=35&type=section&id=14.%20Comparative%20Amounts) Certain comparative amounts have been reclassified to conform with the current period's presentation - Certain comparative amounts have been reclassified to conform with the current period's presentation[108](index=108&type=chunk) [15. Events After Reporting Period](index=36&type=section&id=15.%20Events%20After%20Reporting%20Period) Subsequent to the reporting period, the Group disposed of a property for HKD 82 million on August 25, 2025, and a group of subsidiaries engaged in landscape design, retail, and F&B for HKD 5.58 million on July 30, 2025 - On August 25, 2025, the Company disposed of House No. 7, Rosecliff, 20 Tai Tam Road, Hong Kong, for **HKD 82 million**[109](index=109&type=chunk) - On July 30, 2025, the Company disposed of a group of subsidiaries engaged in landscape design services, floral and plant retail, and catering business for **HKD 5.58 million**[109](index=109&type=chunk) [Glossary of Terms](index=37&type=section&id=Glossary%20of%20Terms) This section provides definitions for specialized terms used throughout the report, including company, business, financial, and geographical terms, to ensure clear understanding

[Interim Results Announcement Summary](index=1&type=section&id=Interim%20Results%20Announcement%20Summary) Digital China Holdings announced unaudited interim results for the six months ended June 30, 2025, with total revenue increasing by 12.13% to RMB 7.865 billion, and profit attributable to equity holders of the parent company significantly growing by 40.70% to RMB 15.21 million; big data products and solutions revenue maintained an 18% share | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | Year-on-year Change | | :--- | :--- | :--- | :--- | | Revenue | 7,865,449 | 7,014,343 | 12.13% | | Of which: Big Data Products & Solutions Revenue | 1,430,144 | 1,277,132 | 11.98% | | Big Data Products & Solutions Segment Revenue Share | 18% | 18% | - | | Profit Attributable to Equity Holders of the Parent Company | 15,207 | 10,808 | 40.70% | [Condensed Consolidated Statement of Profit or Loss](index=2&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss) For the six months ended June 30, 2025, the company's revenue increased by 12.13%, but sales and service costs rose concurrently, leading to an 8.05% gross profit growth; despite a decrease in other income and gains, profit attributable to equity holders of the parent company achieved a significant 40.70% increase, mainly due to narrowing losses | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | Year-on-year Change | | :--- | :--- | :--- | :--- | | Revenue | 7,865,449 | 7,014,343 | 12.13% | | Cost of Sales and Services | (6,832,909) | (6,056,885) | 12.81% | | Gross Profit | 1,032,540 | 957,458 | 8.05% | | Other Income and Gains | 63,780 | 70,545 | -9.59% | | Loss Before Tax | (85,540) | (60,735) | 40.84% (Loss widened) | | Loss for the Period | (68,496) | (49,340) | 38.84% (Loss widened) | | Profit Attributable to Equity Holders of the Parent Company | 15,207 | 10,808 | 40.70% | | Basic Earnings Per Share (RMB yuan) | 0.0103 | 0.0073 | 41.10% | [Condensed Consolidated Statement of Comprehensive Income](index=3&type=section&id=Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) For the six months ended June 30, 2025, the company's loss for the period widened, but exchange differences on translation of financial statements of overseas operations turned from loss to gain, resulting in other comprehensive income for the period turning from loss to gain, and ultimately narrowing the total comprehensive loss by 18.83% | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | Year-on-year Change | | :--- | :--- | :--- | :--- | | Loss for the Period | (68,496) | (49,340) | 38.84% (Loss widened) | | Exchange Differences on Translation of Financial Statements of Overseas Operations | 18,302 | (10,144) | Turned from loss to profit | | Other Comprehensive Income (Loss) for the Period, Net of Tax | 18,682 | (12,028) | Turned from loss to profit | | Total Comprehensive Loss for the Period | (49,814) | (61,368) | -18.83% (Loss narrowed) | | Attributable to Equity Holders of the Parent Company | 27,409 | (3,181) | Turned from loss to profit | [Condensed Consolidated Statement of Financial Position](index=4&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the company's total assets slightly increased, non-current assets remained stable, and current assets saw significant increases in inventories and contract assets; interest-bearing bank and other loans within current liabilities grew substantially, leading to a decrease in net current assets and total assets less current liabilities, with a slight reduction in net assets and equity attributable to equity holders of the parent company | Metric | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | Change | | :--- | :--- | :--- | :--- | | Non-current Assets | 8,310,837 | 8,257,237 | 0.65% | | Current Assets | 14,862,495 | 14,050,061 | 5.79% | | Inventories | 2,784,228 | 1,117,841 | 149.08% | | Contract Assets | 4,449,529 | 3,811,240 | 16.75% | | Cash and Cash Equivalents | 1,960,403 | 3,142,841 | -37.59% | | Current Liabilities | 11,808,888 | 9,872,017 | 19.62% | | Interest-bearing Bank and Other Loans (Current) | 3,507,152 | 1,980,515 | 77.09% | | Net Current Assets | 3,053,607 | 4,178,044 | -26.91% | | Net Assets | 9,366,293 | 9,507,454 | -1.48% | | Equity Attributable to Equity Holders of the Parent Company | 5,766,865 | 5,831,431 | -1.11% | [Notes](index=6&type=section&id=Notes) The notes section elaborates on the basis of presentation, accounting policies, segment information, revenue composition, components of loss before tax, income tax credit, dividend policy, earnings per share calculation, aging analysis of trade and bills receivables and payables, nature of other financial liabilities, and share capital information, providing deeper context for understanding the financial data [Note 1 Basis of Presentation](index=6&type=section&id=Note%201%20Basis%20of%20Presentation) The condensed consolidated financial statements are prepared on a historical cost basis, consistently applying the same basis of presentation, accounting policies, and calculation methods as in the annual financial statements for the year ended December 31, 2024; amendments to Hong Kong Financial Reporting Standards have no material impact on the financial position for the current period - Financial statements are prepared on a historical cost basis, following the same accounting policies and calculation methods as the 2024 annual financial statements[8](index=8&type=chunk) - Amendments to Hong Kong Financial Reporting Standards (e.g., HKAS 21 amendments) have no material impact on the Group's financial position or performance for the current and prior periods[9](index=9&type=chunk) [Note 2 Segment Information](index=7&type=section&id=Note%202%20Segment%20Information) The company operates three business segments: Big Data Products and Solutions, Software and Operations Services, and Xinchuang and Traditional Services; all segments achieved double-digit revenue growth, with Software and Operations Services showing the fastest gross profit growth, and Xinchuang and Traditional Services having the largest revenue share - The Group operates three business segments: Big Data Products and Solutions, Software and Operations Services, and Xinchuang and Traditional Services[13](index=13&type=chunk) | Segment Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | Year-on-year Change | | :--- | :--- | :--- | :--- | | **Big Data Products & Solutions** | | | | | External Revenue | 1,430,144 | 1,277,132 | 11.98% | | Segment Gross Profit | 319,055 | 315,241 | 1.21% | | Segment Results | (52,017) | (43,008) | 20.95% (Loss widened) | | **Software & Operations Services** | | | | | External Revenue | 2,448,322 | 2,159,513 | 13.37% | | Segment Gross Profit | 311,884 | 263,273 | 18.46% | | Segment Results | 105,379 | 81,384 | 29.49% | | **Xinchuang & Traditional Services** | | | | | External Revenue | 3,986,983 | 3,577,698 | 11.44% | | Segment Gross Profit | 401,601 | 378,944 | 5.98% | | Segment Results | 55,816 | 101,875 | -45.11% | | **Total** | | | | | External Revenue | 7,865,449 | 7,014,343 | 12.13% | | Segment Gross Profit | 1,032,540 | 957,458 | 8.05% | | Loss Before Tax | (85,540) | (60,735) | 40.84% (Loss widened) | [Note 3 Revenue, Other Income and Gains](index=9&type=section&id=Note%203%20Revenue%2C%20Other%20Income%20and%20Gains) Total revenue increased by 12.13% year-on-year, primarily driven by strong growth in e-commerce supply chain and software development and technical services businesses; total other income and gains decreased by 9.59% year-on-year, mainly due to reduced net exchange gains and fluctuations in fair value gains on investment properties | Revenue Source | 2025 (RMB thousands) | 2024 (RMB thousands) | Year-on-year Change | | :--- | :--- | :--- | :--- | | Software Product Sales Business | 7,434 | 34,973 | -78.74% | | Software Development & Technical Services Business | 2,914,169 | 2,614,386 | 11.47% | | Supply Chain Operations Business | 950,340 | 1,036,415 | -8.31% | | System Integration Business | 1,541,447 | 1,546,291 | -0.31% | | E-commerce Supply Chain Business | 2,093,480 | 1,546,481 | 35.37% | | Others | 215,922 | 89,470 | 141.34% | | Total Contract Revenue from Customers | 7,722,792 | 6,868,016 | 12.44% | | Rental Income from Investment Properties under Operating Leases | 137,950 | 140,780 | -2.01% | | Financial Services Business | 4,707 | 5,547 | -15.15% | | Total Revenue | 7,865,449 | 7,014,343 | 12.13% | | Other Income and Gains | 2025 (RMB thousands) | 2024 (RMB thousands) | Year-on-year Change | | :--- | :--- | :--- | :--- | | Government Grants | 38,503 | 38,022 | 1.27% | | Bank Deposit Interest | 8,520 | 8,580 | -0.70% | | Wealth Management Product Income | 7,280 | 4,001 | 81.95% | | Fair Value Gains on Investment Properties | 4,280 | - | N/A | | Net Exchange Gains | - | 8,624 | -100% | | Total Other Income and Gains | 63,780 | 70,545 | -9.59% | [Note 4 Loss Before Tax](index=11&type=section&id=Note%204%20Loss%20Before%20Tax) For the six months ended June 30, 2025, the company's loss before tax widened by 40.84% to RMB 85.54 million, primarily due to increased share of losses from associates and joint ventures, higher cost of inventories sold, increased impairment provisions for trade receivables and contract assets, and net exchange losses | Item | 2025 (RMB thousands) | 2024 (RMB thousands) | Year-on-year Change | | :--- | :--- | :--- | :--- | | Share of Losses of Associates and Joint Ventures | 24,867 | 17,095 | 45.47% | | Cost of Inventories Sold | 3,549,665 | 2,930,134 | 21.14% | | Research and Development Costs | 258,242 | 282,488 | -8.58% | | Amortization of Other Intangible Assets | 46,490 | 37,232 | 24.87% | | Impairment of Trade and Bills Receivables, Other Receivables and Contract Assets | 141,847 | 116,478 | 21.78% | | Net Exchange Losses | 19,129 | - | N/A | [Note 5 Income Tax Credit](index=12&type=section&id=Note%205%20Income%20Tax%20Credit) For the six months ended June 30, 2025, the company obtained an income tax credit of RMB 17.044 million, an increase from the same period last year, primarily from deferred tax credits | Tax Source | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | PRC Enterprise Income Tax | 8,293 | 8,746 | | PRC Land Appreciation Tax | - | 1,026 | | Hong Kong Profits Tax | - | 1,160 | | Deferred Tax | (21,301) | (26,363) | | Total Tax Credit for the Period | (17,044) | (11,395) | - PRC operating subsidiaries are generally subject to a 25% enterprise income tax, with some enjoying tax incentives[23](index=23&type=chunk) - Hong Kong profits tax adopts a two-tiered tax rate system, with eligible enterprises taxed at 8.25% on the first HKD 2 million of profits and 16.5% on the remainder[23](index=23&type=chunk) [Note 6 Dividends](index=12&type=section&id=Note%206%20Dividends) The company distributed a final dividend of 6.0 HK cents per ordinary share for the year ended December 31, 2024, totaling approximately RMB 91.59 million, on July 16, 2025; the Board resolved not to declare an interim dividend for the six months ended June 30, 2025, compared to 1.0 HK cent per share declared in the prior period - A final dividend of **6.0 HK cents per ordinary share** for 2024, totaling approximately **RMB 91.59 million**, was distributed on July 16, 2025[22](index=22&type=chunk) - The Board resolved not to declare an interim dividend for the six months ended June 30, 2025 (compared to 1.0 HK cent per share in the same period of 2024)[22](index=22&type=chunk)[33](index=33&type=chunk) [Note 7 Earnings Per Share](index=13&type=section&id=Note%207%20Earnings%20Per%20Share) For the six months ended June 30, 2025, profit attributable to equity holders of the parent company was RMB 15.207 million, with basic earnings per share of RMB 0.0103 and diluted earnings per share of RMB 0.0102, both showing an increase compared to the same period last year | Metric | 2025 (RMB thousands/share) | 2024 (RMB thousands/share) | | :--- | :--- | :--- | | Profit Attributable to Equity Holders of the Parent Company for Basic EPS Calculation | 15,207 | 10,808 | | Basic Earnings Per Share (RMB yuan) | 0.0103 | 0.0073 | | Diluted Earnings Per Share (RMB yuan) | 0.0102 | 0.0073 | | Weighted Average Number of Ordinary Shares for Basic EPS Calculation | 1,479,115,772 | 1,476,503,004 | | Weighted Average Number of Ordinary Shares for Diluted EPS Calculation | 1,486,105,156 | 1,485,014,272 | [Note 8 Trade and Bills Receivables](index=14&type=section&id=Note%208%20Trade%20and%20Bills%20Receivables) As of June 30, 2025, total trade and bills receivables amounted to RMB 3.277 billion, a slight decrease from December 31, 2024; receivables within 30 days significantly decreased, while those aged 91-360 days and over 360 days increased, indicating a deteriorating aging structure of receivables | Aging | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | Change | | :--- | :--- | :--- | :--- | | Total | 3,276,545 | 3,391,269 | -3.38% | | Within 30 days | 1,187,888 | 1,904,388 | -37.63% | | 31 to 60 days | 209,950 | 185,442 | 13.22% | | 61 to 90 days | 108,916 | 112,764 | -3.39% | | 91 to 180 days | 423,426 | 186,561 | 126.96% | | 181 to 360 days | 751,580 | 267,875 | 180.50% | | Over 360 days | 594,785 | 734,239 | -18.99% | - Credit period generally ranges from **15 to 720 days**, with the company implementing strict monitoring of outstanding receivables to mitigate credit risk[26](index=26&type=chunk) [Note 9 Trade and Bills Payables](index=15&type=section&id=Note%209%20Trade%20and%20Bills%20Payables) As of June 30, 2025, total trade and bills payables amounted to RMB 3.959 billion, a 6.98% decrease from December 31, 2024; payables within 30 days significantly decreased, while those over 90 days increased | Aging | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | Change | | :--- | :--- | :--- | :--- | | Total | 3,959,235 | 4,251,022 | -6.86% | | Within 30 days | 875,907 | 1,698,294 | -48.42% | | 31 to 60 days | 413,146 | 256,520 | 61.06% | | 61 to 90 days | 97,260 | 207,013 | -52.92% | | Over 90 days | 2,572,922 | 2,089,195 | 23.15% | - The average credit period for goods purchased is **30 to 180 days**, and the company has established financial risk management policies to ensure all payables are settled within credit terms[29](index=29&type=chunk) [Note 10 Other Financial Liabilities](index=15&type=section&id=Note%2010%20Other%20Financial%20Liabilities) As of June 30, 2025, the company classified financial liabilities related to a put option for non-controlling interests in Shenqi Digital as current liabilities, amounting to RMB 891 million, as they are due within twelve months after the reporting period; this put option grants investors the right to require the Group to repurchase their equity interest in Shenqi Digital upon specific trigger events - The company's indirect wholly-owned subsidiary, Digital China Software Co., Ltd., has granted a put option to investors involving capital contributions for non-controlling interests in Shenqi Digital Co., Ltd[30](index=30&type=chunk) - This financial liability was classified as a current liability as of June 30, 2025, amounting to **RMB 891 million**, as it is due within twelve months after the reporting period[31](index=31&type=chunk)[6](index=6&type=chunk) [Note 11 Share Capital](index=16&type=section&id=Note%2011%20Share%20Capital) As of June 30, 2025, the company had 1,673,607,386 issued and fully paid ordinary shares with a par value of 0.1 HKD per share, totaling RMB 163,826 thousands in share capital, consistent with December 31, 2024 | Metric | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Issued and Fully Paid Ordinary Shares (shares) | 1,673,607,386 | 1,673,607,386 | | Par Value Per Share | 0.1 HKD | 0.1 HKD | | Share Capital | 163,826 | 163,826 | [I. Strategic Upgrading: "Data x AI" Drives Performance Growth](index=17&type=section&id=I.%20Strategic%20Upgrading%3A%20%22Data%20x%20AI%22%20Drives%20Performance%20Growth) Digital China Holdings deepens its 'Data x AI' strategy, centered on the 'YanCloud Infinity Platform,' providing data intelligence solutions across multiple industries to drive clients' digital transformation; during the reporting period, the company achieved growth in overall revenue, gross profit, and net profit attributable to the parent, with new contract value increasing by 98% and signed but unbilled orders growing by 27%, laying a foundation for future growth - The company continues to advance its **"Data x AI" strategic upgrading**, strengthening its data intelligence technology foundation with the "YanCloud Infinity Platform" as its core[37](index=37&type=chunk) - The company provides full-domain data intelligence solutions for industries including consumer electronics, communication services, FMCG retail, apparel, financial institutions, and chain hotels[37](index=37&type=chunk) | Metric | H1 2025 (RMB billions) | Year-on-year Growth | | :--- | :--- | :--- | | Overall Operating Revenue | 7.865 | 12% | | Gross Profit | 1.033 | 8% | | Net Profit Attributable to Parent | 0.01521 | 41% | | New Contract Value | 9.476 | 98% | | Signed but Unbilled Orders | 10.441 | 27% | - All business segments achieved double-digit revenue growth: Big Data Products and Solutions revenue grew by **12%**, Software and Operations Services revenue by **13%**, and Xinchuang and Traditional Services revenue by **11%**[38](index=38&type=chunk) [II. Technology Foundation: AI Full-Stack Drives Data Value Realization](index=18&type=section&id=II.%20Technology%20Foundation%3A%20AI%20Full-Stack%20Drives%20Data%20Value%20Realization) The company actively implements the 'general-purpose and specialized integration' development concept for AI full-stack data intelligence technology, building the 'YanCloud Infinity' industry-grade general data intelligence engine, encompassing AI Infra, AI-ready Data, and Agentic AI platform capabilities, and developing vertical intelligent applications to form a closed-loop technical capability from 'Data for AI,' 'AI for Decision,' to 'AI for Process' - The company builds the "YanCloud Infinity" industry-grade general data intelligence engine with **AI Infra, AI-ready Data, and Agentic AI** as its three core platform capabilities[41](index=41&type=chunk) - This forms a closed-loop technical capability from "Data for AI," "AI for Decision," to "AI for Process"[41](index=41&type=chunk) - During the reporting period, R&D expenses reached **RMB 305 million**, with the company leading or participating in the compilation of **187 national, industry, and group standards**, and accumulating **3,290 intellectual property rights**[43](index=43&type=chunk) [2.1 AI Infra: Infinity Intelligent Computing Platform](index=18&type=section&id=2.1%20AI%20Infra%3A%20Infinity%20Intelligent%20Computing%20Platform) The 'Infinity Intelligent Computing Platform' provides computing power scheduling and performance enhancement services through software-hardware collaboration, possessing integrated capabilities for intelligent computing center consulting, construction, scheduling, and operation and maintenance, while improving computing power supply efficiency and performance through heterogeneous computing power management and acceleration technologies - The "Infinity Intelligent Computing Platform" provides computing power scheduling and performance enhancement services, offering integrated capabilities for intelligent computing center consulting, construction, scheduling, and operation and maintenance[41](index=41&type=chunk) - It enhances computing power supply efficiency by managing and accelerating heterogeneous computing power, addressing issues of dispersed and underutilized resources[41](index=41&type=chunk) [2.2 AI-ready Data: Infinity Intelligent Data Platform](index=18&type=section&id=2.2%20AI-ready%20Data%3A%20Infinity%20Intelligent%20Data%20Platform) The 'Infinity Intelligent Data Platform' offers product tools for data access, integration, orchestration, semantic modeling, knowledge base management, and MCP services, featuring full-domain data connectivity to seamlessly integrate hundreds of multi-source heterogeneous data sources, and achieving automated and intelligent high-quality data output based on AI algorithms and LLM intelligent configuration - The "Infinity Intelligent Data Platform" provides product tools for data access, integration, orchestration, semantic modeling, knowledge base management, and MCP services[42](index=42&type=chunk) - The platform offers full-domain data connectivity, seamlessly integrating hundreds of multi-source heterogeneous data sources, and achieves automated and intelligent high-quality data output based on AI algorithms and LLM intelligent configuration[42](index=42&type=chunk) [2.3 Agentic AI: Infinity Intelligent Strategy Platform](index=18&type=section&id=2.3%20Agentic%20AI%3A%20Infinity%20Intelligent%20Strategy%20Platform) The 'Infinity Intelligent Strategy Platform' focuses on core capabilities such as Agent process orchestration, autonomous planning and reasoning, and multi-Agent inference and decision execution, offering various scheduling and planning strategies and a rich set of standardized general Agent Tools, supporting rapid construction and intelligent interaction among vertical Agents - The "Infinity Intelligent Strategy Platform" focuses on core capabilities such as Agent process orchestration, autonomous planning and reasoning, and multi-Agent inference and decision execution[42](index=42&type=chunk) - The platform features a rich set of standardized general Agent Tools, supporting rapid construction and intelligent interaction among vertical Agents[42](index=42&type=chunk) [2.4 Application Layer and R&D Investment](index=19&type=section&id=2.4%20Application%20Layer%20and%20R%26D%20Investment) Based on the 'YanCloud Infinity' general technology platform, the company self-developed the logistics vertical large model 'KingKoo-SmartChain' and the 'Xiaojin' series of Agents covering the entire 'R&D, production, supply, sales, and service' chain, empowering the construction of intelligent applications in smart supply chain scenarios, and continuously increasing R&D investment to support technology system iteration and industrial implementation - The company self-developed the logistics vertical large model "KingKoo-SmartChain" and the "Xiaojin" series of Agents covering the entire "R&D, production, supply, sales, and service" chain[43](index=43&type=chunk) - During the reporting period, R&D expenses reached **RMB 305 million**, with the company leading or participating in the compilation of **187 national, industry, and group standards**, and accumulating **3,290 intellectual property rights**[43](index=43&type=chunk) [III. Industry Deep Cultivation: AI Empowers Value Scene Efficiency Enhancement](index=19&type=section&id=III.%20Industry%20Deep%20Cultivation%3A%20AI%20Empowers%20Value%20Scene%20Efficiency%20Enhancement) The company deeply applies AI technology in core industry scenarios such as smart supply chain, FinTech, government and enterprise digitalization, and chain hotels, significantly enhancing client operational efficiency and decision-making accuracy through customized solutions and intelligent agent suites, while actively expanding into other chain business formats [3.1 Smart Supply Chain Scenarios](index=19&type=section&id=3.1%20Smart%20Supply%20Chain%20Scenarios) Smart supply chain business focuses on consumer electronics, communication services, FMCG retail, and apparel industries, deepening engagement with existing clients through the 'Baby Plan' and expanding new clients with the 'Star-Picking Plan'; it achieves intelligent control across the entire supply chain with the 'KingKoo SmartChain' logistics vertical large model and 'Xiaojin' intelligent agent suite, significantly reducing operating costs and enhancing efficiency - Smart supply chain business focuses on consumer electronics, communication services, FMCG retail, and apparel industries, launching the "Baby Plan" to deepen engagement with existing clients and the "Star-Picking Plan" to expand new clients[45](index=45&type=chunk) - Strategic cooperation agreements have been signed with **4 enterprises**, including Golden Concept, Semir Group Junyao Technology, and Zhanyan, with the number of full-value supply chain cooperation clients expected to exceed **10** within the year[45](index=45&type=chunk) - The "KingKoo SmartChain" logistics vertical large model serves as the core engine, building a smart supply chain control tower to achieve intelligent control across the entire supply chain[46](index=46&type=chunk) - During the reporting period, warehouse operating costs in supply chain scenarios decreased by over **20%** year-on-year, transportation and distribution costs decreased by approximately **8%** year-on-year, and overall warehouse efficiency improved by over **30%**[46](index=46&type=chunk) - The self-developed "Xiaojin" intelligent agent suite covers the entire "R&D, production, supply, sales, and service" business chain, with internal pilot applications showing a **90%** improvement in query efficiency, **50%** improvement in data analysis efficiency, and **50%** reduction in customer service workload[47](index=47&type=chunk) [3.2 FinTech Scenarios](index=21&type=section&id=3.2%20FinTech%20Scenarios) Consolidated subsidiary Digital China Information Service deepens 'AI + Finance' applications, upgrading financial industry vertical large models FinancialMaster and CodeMaster, and partnering with Huawei to launch an integrated 'Financial Knowledge Q&A' intelligent agent solution; AIGC scenarios have been implemented in financial industry solutions including banking core, credit, channels, data, risk, and cloud solutions - Digital China Information Service deeply cultivates "AI + Finance" applications, serving over **2,000 financial institutions** cumulatively[49](index=49&type=chunk) - It upgraded the financial knowledge Q&A intelligent agent FinancialMaster and the financial code assistant intelligent agent CodeMaster based on DeepSeek[49](index=49&type=chunk) - Partnered with Huawei to launch an integrated "Financial Knowledge Q&A" intelligent agent solution running on the Ascend AI software and hardware platform[49](index=49&type=chunk) - CodeMaster has been deployed in multiple banking core delivery projects, showing significant improvements in coding efficiency and generating code quality comparable to that of senior developers[49](index=49&type=chunk) [3.3 Government and Enterprise Digitalization Scenarios](index=21&type=section&id=3.3%20Government%20and%20Enterprise%20Digitalization%20Scenarios) Leveraging the YanCloud Infinity Platform, the company deeply cultivates scenarios such as government services, citizen services, urban smart brain, and industrial economy, launching end-to-end data intelligence solutions integrated with DeepSeek private deployment; an AI intelligent assistant was successfully deployed in a municipal government service APP, achieving over 95% accuracy in government service inquiries - Leveraging the YanCloud Infinity Platform, the company deeply cultivates government services, citizen services, urban smart brain, and industrial economy scenarios[50](index=50&type=chunk) - It launched end-to-end data intelligence solutions integrated with DeepSeek private deployment and deployed an AI intelligent assistant in a municipal government service APP[50](index=50&type=chunk) - The AI intelligent assistant achieved over **95% accuracy** in government service inquiries by learning **150,000 government policy documents** and a local knowledge base of over **4 million characters**[50](index=50&type=chunk) - The company is deeply involved in the construction of the third and fourth phases of the Golden Tax project and provides customized digital services to leading internet companies like Meituan and Alibaba, as well as central and state-owned enterprises[50](index=50&type=chunk) [3.4 Chain Hotel Scenarios and Other Chain Business Expansion](index=21&type=section&id=3.4%20Chain%20Hotel%20Scenarios%20and%20Other%20Chain%20Business%20Expansion) The company serves over 1,400 high-end chain hotels with over 2,600 technical service outlets nationwide; during the reporting period, it deepened strategic cooperation with Wanda Hotels and Cloudbreak Technology, successfully signing digital service projects for multiple high-end chain hotels, while replicating mature technical capabilities to other chain business formats such as automotive 4S dealerships and IDC scenarios - The company cumulatively serves over **1,400 high-end chain hotels** and possesses over **2,600 technical service outlets** nationwide[51](index=51&type=chunk) - It deepened strategic cooperation with Wanda Hotels and Cloudbreak Technology on data intelligence solutions for the hotel industry, successfully signing digital service projects for over **300 stores** of multiple high-end chain hotels[51](index=51&type=chunk) - The company actively promotes overseas business development in collaboration with leading manufacturers, extending successful domestic experiences to international markets[51](index=51&type=chunk) - Mature technical capabilities and service models from the chain hotel sector are being replicated and expanded to other chain business formats, such as automotive 4S dealerships and IDC scenarios[52](index=52&type=chunk) [IV. Ecosystem Aggregation: Industrial Collaboration Co-creates New Growth Drivers](index=22&type=section&id=IV.%20Ecosystem%20Aggregation%3A%20Industrial%20Collaboration%20Co-creates%20New%20Growth%20Drivers) Digital China Holdings is committed to building an open innovation ecosystem platform, deeply integrating multi-dimensional resources from government, industry, academia, research, and application, to construct an innovative ecosystem of technological synergy, scenario co-creation, and industrial linkage; by opening up its data capability base and AI toolchain, it collaborates with partners to drive AI innovation and digital intelligence upgrades, earning multiple industry recognitions - The company is committed to building an open innovation ecosystem platform, deeply integrating multi-dimensional resources from government, industry, academia, research, and application, to construct an innovative ecosystem of technological synergy, scenario co-creation, and industrial linkage[55](index=55&type=chunk) - In terms of technology ecosystem, it co-established the "YanCloud Infinity Intelligent Software Joint Laboratory" with Peking University, signed a big data product cooperation framework agreement with Tencent Cloud, and initiated the industry's first AIGC large model financial ecosystem with Huawei and Tencent Cloud[55](index=55&type=chunk) - In terms of industry ecosystem, it deepened cooperation with SF Express, Debon Express, and YTO Express to enhance smart supply chain service capabilities, and promoted innovative cooperation with national industry associations[56](index=56&type=chunk) - In terms of industrial ecosystem, it signed a strategic cooperation agreement with Beijing Jiaotong University to establish the "Data Intelligence Research Institute" and deepened cooperation with the national financial think tank "National Institution for Finance & Development"[56](index=56&type=chunk) - During the reporting period, the company received multiple industry recognitions, including Forbes China's "2025 AI Technology Enterprises TOP50" and iResearch's "China FinTech Industry Excellent Service Provider Top50"[57](index=57&type=chunk) [V. Future Outlook: Proactive Layout to Win in the New AI Era](index=23&type=section&id=V.%20Future%20Outlook%3A%20Proactive%20Layout%20to%20Win%20in%20the%20New%20AI%20Era) The company will continue to firmly execute its 'Data x AI' strategic upgrade, implementing the 'general-purpose and specialized integration' AI for Process philosophy; guided by technological innovation and customer needs, it will strengthen its AI full-stack technology engine to drive clients' 'R&D, production, supply, sales, and service' systems from digitalization to intelligent transformation, achieving symbiotic prosperity of enterprise and social value - The company will deeply grasp the strategic opportunities of the national "AI+" initiative and data element market-oriented reform, firmly executing its **"Data x AI" strategic upgrading**[58](index=58&type=chunk) - In the future, it will implement the "general-purpose and specialized integration" **AI for Process** philosophy, strengthening its AI full-stack technology engine based on the "YanCloud Infinity" technology foundation[58](index=58&type=chunk) - The goal is to drive clients' "R&D, production, supply, sales, and service" systems from digitalization to intelligent transformation, continuously injecting new impetus for digital intelligence development into the real economy[58](index=58&type=chunk) [Other Financial and Corporate Information](index=24&type=section&id=Other%20Financial%20and%20Corporate%20Information) This section covers updates on wealth management product resolution arrangements, capital expenditure, liquidity and financial resources, contingent liabilities, commitments, significant investments and acquisitions/disposals, post-reporting period events, human resources and remuneration policies, and the use of rights issue proceeds, providing comprehensive supplementary information on the company's operations and financial position [11.1 Latest Developments in Wealth Management Product Resolution Arrangements](index=24&type=section&id=11.1%20Latest%20Developments%20in%20Wealth%20Management%20Product%20Resolution%20Arrangements) As of June 30, 2025, the net book value of wealth management products was approximately RMB 686 million; the company has obtained active disposal rights for related assets and is proceeding with the disposal of real estate residential projects (RMB 84 million); market and commercial complex property assets (RMB 602 million) are being divested and injected into new company entities according to the restructuring plan, with the company expecting to gain controlling interest to facilitate disposal - As of June 30, 2025, the net book value of wealth management products was approximately **RMB 686 million**[59](index=59&type=chunk) - The company has obtained active disposal rights for the underlying assets of the wealth management products and has formulated a disposal plan[59](index=59&type=chunk) - Disposal of real estate residential projects (approximately **RMB 84 million**) is currently underway[59](index=59&type=chunk) - Market and commercial complex property assets (approximately **RMB 602 million**) are being divested and injected into new company entities according to the court-approved restructuring plan, with the company expecting to gain a controlling interest[59](index=59&type=chunk) [11.2 Capital Expenditure, Liquidity and Financial Resources](index=25&type=section&id=11.2%20Capital%20Expenditure%2C%20Liquidity%20and%20Financial%20Resources) As of June 30, 2025, the company's total assets were approximately RMB 23.173 billion, with a current ratio of 1.26 (1.42 as of December 31, 2024); capital expenditure was approximately RMB 28 million, and cash and cash equivalents were approximately RMB 1.960 billion; the total loans to equity attributable to equity holders of the parent company ratio was 0.86, an increase from 0.60 at the end of last year | Metric | June 30, 2025 (RMB billions) | December 31, 2024 (RMB billions) | Change | | :--- | :--- | :--- | :--- | | Total Assets | 23.173 | N/A | N/A | | Total Liabilities | 13.807 | N/A | N/A | | Equity Attributable to Equity Holders of the Parent Company | 5.767 | 5.831 | -1.10% | | Current Ratio | 1.26 | 1.42 | Decreased | | Capital Expenditure | 0.028 | N/A | N/A | | Cash and Cash Equivalents | 1.960 | 3.143 | -37.59% | | Total Loans to Equity Attributable to Equity Holders of the Parent Company Ratio | 0.86 | 0.60 | Increased | | Total Interest-bearing Bank and Other Loans | 4.943 | 3.483 | 41.90% | - The Group primarily meets its working capital requirements through internal resources, bank loans, and bank credit facilities[61](index=61&type=chunk) - The Group currently has no foreign exchange hedging policy, but management monitors foreign exchange risks and will consider hedging when necessary[61](index=61&type=chunk) | Interest-bearing Bank and Other Loans (June 30, 2025) | RMB thousands | | :--- | :--- | | Current Interest-bearing Bank Loans, Unsecured | 2,847,193 | | Current Interest-bearing Bank Loans, Secured | 601,509 | | Current Other Loans | 58,450 | | Non-current Interest-bearing Bank Loans, Secured | 1,436,251 | | **Total** | **4,943,403** | - Approximately **RMB 1.689 billion** in loans are secured by buildings, investment properties, and prepaid land lease payments; approximately **RMB 300 million** in loans are pledged by issued shares of Digital China Information Service[63](index=63&type=chunk)[64](index=64&type=chunk) - Total available bank credit facilities are approximately **RMB 10.030 billion**, with approximately **RMB 5.313 billion** utilized[64](index=64&type=chunk) [11.3 Contingent Liabilities](index=26&type=section&id=11.3%20Contingent%20Liabilities) Digital China Financial Services (a Group subsidiary) is involved in a patent infringement lawsuit, with plaintiff Yihua Company refiling in December 2023, claiming RMB 275.3 million; during the August 2024 trial, Yihua Company withdrew its claim for infringement damages against Digital China Financial Services, only seeking cessation of infringement liability; as of June 30, 2025, the case remains unadjudicated, and legal opinion suggests a low probability of Digital China Financial Services bearing related litigation outcomes - Digital China Financial Services is involved in a patent infringement lawsuit filed by Shenzhen Yihua Computer Co., Ltd., with the plaintiff refiling in December 2023, claiming **RMB 275.3 million**[67](index=67&type=chunk) - During the August 2024 trial, Yihua Company withdrew its claim for infringement damages against Digital China Financial Services, explicitly stating that Oki Electric Company should bear the compensation liability, and Digital China Financial Services should only bear the responsibility for ceasing infringement[68](index=68&type=chunk) - As of June 30, 2025, the case remains unadjudicated, and based on legal opinion, the probability of Digital China Financial Services bearing related litigation outcomes is low[68](index=68&type=chunk) [11.4 Commitments](index=27&type=section&id=11.4%20Commitments) As of June 30, 2025, the Group's total commitments contracted but not provided for in the financial statements amounted to approximately RMB 109.9 million, primarily including land and buildings, capital contributions to joint ventures and associates | Commitment Item | Amount (RMB thousands) | | :--- | :--- | | Land and Buildings | 37,753 | | Capital Contributions to Several Joint Ventures | 68,250 | | Capital Contributions to Several Associates | 3,510 | | Capital Contributions to Financial Assets Measured at Fair Value Through Other Comprehensive Income | 429 | | **Total** | **109,942** | [11.5 Significant Investments and Major Acquisitions or Disposals of Subsidiaries, Associates and Joint Ventures](index=27&type=section&id=11.5%20Significant%20Investments%20and%20Major%20Acquisitions%20or%20Disposals%20of%20Subsidiaries%2C%20Associates%20and%20Joint%20Ventures) For the six months ended June 30, 2025, the Group had no significant investments or major acquisitions or disposals of subsidiaries, associates, and joint ventures - During the reporting period, the Group had no significant investments or major acquisitions or disposals of subsidiaries, associates, and joint ventures[72](index=72&type=chunk) [11.6 Events After the Reporting Period](index=27&type=section&id=11.6%20Events%20After%20the%20Reporting%20Period) No significant events have occurred for the Group from the end of the reporting period up to the date of this interim report - No significant events have occurred for the Group from the end of the reporting period up to the date of this interim report[73](index=73&type=chunk) [11.7 Human Resources and Remuneration Policy](index=27&type=section&id=11.7%20Human%20Resources%20and%20Remuneration%20Policy) As of June 30, 2025, the Group's full-time employees numbered 20,254, a 16.69% year-on-year increase; employee costs were approximately RMB 2.035 billion, also up 16.69% year-on-year; the company offers equity incentive plans to attract and retain outstanding employees and is committed to providing training and development programs | Metric | June 30, 2025 | June 30, 2024 | Year-on-year Change | | :--- | :--- | :--- | :--- | | Number of Full-time Employees | 20,254 | 17,307 | 16.69% | | Employee Costs | RMB 2.035 billion | RMB 1.744 billion | 16.69% | - The company offers equity incentive plans to attract and retain outstanding and proactive employees, and is committed to providing various internal and external training and development programs[74](index=74&type=chunk) [11.8 Update on Use of Proceeds from Rights Issue](index=28&type=section&id=11.8%20Update%20on%20Use%20of%20Proceeds%20from%20Rights%20Issue) As of June 30, 2025, approximately RMB 210 million of the net proceeds from the 2017 rights issue remained unutilized; due to slow macroeconomic recovery and subdued investment sentiment, the company's management is more cautious about investment and M&A projects, expecting the unutilized proceeds will not be fully deployed by the original plan of December 31, 2025, but are now anticipated to be fully utilized by June 30, 2026 | Intended Use of Net Proceeds from Rights Issue | Net Proceeds (RMB millions) | Amount Utilized as of June 30, 2025 (RMB millions) | Amount Unutilized as of June 30, 2025 (RMB millions) | Expected to be Utilized by June 30, 2026 (RMB millions) | | :--- | :--- | :--- | :--- | :--- | | Investment in Healthcare Big Data or Other Potential Investments and Acquisitions | 664 | (454) | 210 | 210 | | Repayment of Debts and Interest Expenses | 410 | (410) | - | - | | General Working Capital Purposes | 75 | (75) | - | - | | **Total** | **1,149** | **(939)** | **210** | **210** | - As of June 30, 2025, the unutilized net proceeds from the rights issue amounted to approximately **RMB 210 million**[77](index=77&type=chunk) - Due to slow macroeconomic recovery and subdued investment sentiment, the company's management is more cautious about investment and M&A projects, expecting the unutilized net proceeds will be fully utilized by **June 30, 2026**[77](index=77&type=chunk) [Corporate Governance and Other Disclosures](index=29&type=section&id=Corporate%20Governance%20and%20Other%20Disclosures) This section discloses the company's corporate governance practices, including audit committee review, deviations from the Corporate Governance Code (e.g., Chairman also serving as CEO, exemption from director rotation, absence of written appointment letters for non-executive directors), and compliance with the Model Code, dealings in listed securities, and public float information [12.1 Review by Audit Committee](index=29&type=section&id=12.1%20Review%20by%20Audit%20Committee) The Audit Committee reviewed the Group's unaudited condensed consolidated interim results for the six months ended June 30, 2025, and discussed audit findings, accounting principles, compliance matters, internal controls, risk management, and financial reporting with senior management, raising no objections to the accounting treatments adopted - The Audit Committee, composed of three independent non-executive directors, reviewed the interim results and discussed relevant financial and governance matters[79](index=79&type=chunk) - The Audit Committee raised no objections to the accounting treatments adopted for the Group's unaudited condensed consolidated interim results for the six months ended June 30, 2025[79](index=79&type=chunk) [12.2 Corporate Governance](index=29&type=section&id=12.2%20Corporate%20Governance) During the reporting period, the company complied with the Corporate Governance Code except for the following: the Chairman also serves as CEO, which the Board believes aids strategic consistency; Mr. Guo Wei, the Chairman, is not subject to rotation; the company has not entered into written appointment letters with non-executive or independent non-executive directors, but the Board considers existing arrangements effective - During the reporting period, the company complied with the Corporate Governance Code except for the Chairman also serving as CEO, which the Board believes aids strategic consistency[80](index=80&type=chunk) - Mr. Guo Wei, the Chairman of the Board, is not subject to rotation, while other directors are subject to retirement by rotation at least once every three years[81](index=81&type=chunk) - The company has not entered into written appointment letters with non-executive or independent non-executive directors, but the Board considers existing arrangements effective and that directors responsibly fulfill their duties[82](index=82&type=chunk) [12.3 Compliance with Model Code](index=30&type=section&id=12.3%20Compliance%20with%20Model%20Code) Following specific inquiries by the company, all directors confirmed compliance with the Model Code for Securities Transactions by Directors of Listed Issuers throughout the six months ended June 30, 2025 - All directors confirmed compliance with the Model Code for Securities Transactions by Directors of Listed Issuers throughout the reporting period[83](index=83&type=chunk) [12.4 Purchase, Sale or Redemption of the Company's Listed Securities](index=30&type=section&id=12.4%20Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company%27s%20Listed%20Securities) During the six months ended June 30, 2025, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities - During the reporting period, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities[84](index=84&type=chunk) [12.5 Sufficient Public Float](index=30&type=section&id=12.5%20Sufficient%20Public%20Float) Based on publicly available information and the directors' knowledge, the company maintained a sufficient public float as required by the Listing Rules throughout the six months ended June 30, 2025 - During the reporting period, the company maintained a sufficient public float as required by the Listing Rules[85](index=85&type=chunk) [12.6 By Order of the Board](index=30&type=section&id=12.6%20By%20Order%20of%20the%20Board) This announcement was published by Mr. Guo Wei, Chairman and CEO of the Board, on August 27, 2025; the Board comprises nine directors, including executive, non-executive, and independent non-executive directors - The announcement was published by Mr. Guo Wei, Chairman and CEO of the Board, on August 27, 2025[86](index=86&type=chunk) - The Board comprises nine directors, including executive directors, non-executive directors, and independent non-executive directors[86](index=86&type=chunk)