Financial Performance - For the six months ended June 30, 2025, the company reported revenue of RMB 948,000, a decrease of 82.7% compared to RMB 5,465,000 for the same period in 2024[6]. - The gross loss for the period was RMB 2,615,000, compared to a gross profit of RMB 1,305,000 in the previous year[6]. - The company incurred a loss attributable to owners of approximately RMB 3,186,000 for the six months ended June 30, 2025, compared to a profit of RMB 3,099,000 in 2024[6]. - Total comprehensive loss for the period amounted to RMB 4,164,000, compared to a comprehensive income of RMB 1,840,000 in the previous year[8]. - The Group recorded a loss before tax of RMB 4,207,000, compared to a profit of 1,864,000 in the prior year[32]. - Loss before tax for the Group amounted to approximately RMB 4,207,000, compared to a profit before tax of approximately RMB 1,864,000 for the same period in 2024[55]. - Loss per share for the period was approximately RMB 0.0022, a decline from earnings per share of approximately RMB 0.0021 in the corresponding period of 2024[55]. Liquidity and Financial Position - As of June 30, 2025, the company's current liabilities exceeded its current assets by approximately RMB 125,501,000[15]. - Cash and cash equivalents were reported at approximately RMB 5,278,000, indicating liquidity challenges[15]. - The Group's net current liabilities as of June 30, 2025, were approximately RMB 125,501,000, compared to RMB 121,072,000 as of December 31, 2024[84]. - The Group's current ratio decreased to 0.36 times as of June 30, 2025, from approximately 0.42 times as of December 31, 2024[85]. - The Group is actively considering realizing certain investment properties to improve liquidity[17]. - A net operating cash inflow is expected for the period ending June 30, 2026[17]. - The Group is negotiating with creditors to extend repayment periods to manage financial obligations[17]. - A shareholder has committed not to demand repayment of approximately RMB 2,448,000 due from the Group until it does not affect the ability to repay other creditors[17]. Assets and Equity - The non-current assets decreased from RMB 458,417,000 as of December 31, 2024, to RMB 451,897,000 as of June 30, 2025[10]. - The company's total equity decreased from RMB 320,137,000 at the end of 2024 to RMB 315,973,000 by June 30, 2025[12]. - As of June 30, 2025, the Group's total assets amounted to approximately RMB 523,732,000, representing a decrease of approximately 3.87% from RMB 544,799,000 as of December 31, 2024[83]. Revenue Sources - The property management business generated revenue of RMB 172,000, while the construction segment reported no revenue compared to RMB 4,710,000 in 2024[32]. - The property investment and leasing business generated rental income of approximately RMB 776,000, compared to RMB 755,000 in the same period of 2024[67]. - The Group's revenue for the period was approximately RMB 948,000, a significant decrease from RMB 5,465,000 in the same period of 2024, primarily due to a decline in infrastructure construction revenue[57]. Operational Developments - The main infrastructure project, Zhongfang Chaozhou Jing Nan Industrial Park Project, was completed in 2024, and the Group plans to explore other infrastructure projects[56]. - The Shennongjia Hotel project, a large-scale integrated tourism resort, has a total floor area exceeding 50,000 square meters and includes over 500 hotel rooms, with construction of the main and annex buildings nearly completed in 2024[59]. - The Group is negotiating with reputable hotel operators to manage the Shennongjia Hotel, with renovation works for infrastructure such as pipes and air-conditioning systems already underway[61]. - The Group aims to deliver high-quality service standards at the Shennongjia Hotel, with operations expected to commence soon[77]. - The Group will continue to explore suitable investment and construction projects through strong management connections and public/private tenders[62]. Shareholder and Governance - The Board does not recommend the payment of interim dividends for the period, consistent with the previous year[120]. - The Group has not adopted any share option scheme for its senior management or employees[97]. - The substantial shareholders include Beijing Hua Xia Ding Technology Company Limited and Huang Guang Fu, each holding 420,000,000 Domestic Shares, representing 28.58% of the total issued share capital[130]. - The company is committed to maintaining compliance with the Listing Rules and other regulatory requirements[141]. - Shareholder engagement remains a priority, with ongoing communication regarding company performance and strategy[141]. Future Outlook - The global economic recovery is slower than anticipated, prompting the Group to focus on prudent and sustainable growth while managing risks[76]. - The Group is actively exploring opportunities in the infrastructure sector, although government expenditure is expected to remain limited due to slow economic recovery[81]. - The Group's management will consider hedging significant currency risks in the future if necessary[104]. - Future earnings guidance will be provided to shareholders to outline expected performance metrics[140].

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。 （於開曼群島註冊成立之有限公司） （股份代號：01250） 截至二零二五年六月三十日止六個月 中期業績公告 摘要 1 • 本集團報告期期內溢利約人民幣392.8百萬元（截至二零二四年六月三十日止 六個月：約人民幣369.0百萬元），較去年同期增加約6.5%。 • 受惠於以低成本融資置換高成本融資工作持續進行，本集團報告期財務費用 約人民幣558.9百萬元（截至二零二四年六月三十日止六個月︰約人民幣663.8 百萬元），較去年同期下降約15.8%。 • 本集團報告期末資產負債率維持良好水平，約60.17%。同時，本集團報告期 末現金及現金等價物約人民幣4,122.9百萬元，流動比率為1.94。財務儲備足以 支持業務發展。 • 截至二零二五年六月三十日止六個月之每股基本及攤薄盈利分別為人民幣 12.77分（截至二零二四年六月三十日止六個月：人民幣12.28分）及人民幣 12.77分（截至二零二四年六月三十日 ...

[Financial Highlights](index=1&type=section&id=Financial%20Highlights) [Financial Highlights Overview](index=1&type=section&id=Financial%20Highlights%20Overview) AK Medical Holdings Limited reported unaudited interim results for the six months ended June 30, 2025, with revenue increasing by **5.6%** to **RMB 694.2 million** and profit for the period rising by **15.3%** to **RMB 160.6 million**, driven by volume-based procurement and import substitution | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 694,227 | 657,102 | 5.6% | | Gross Profit | 410,335 | 398,480 | 3.0% | | Profit for the Period | 160,611 | 139,253 | 15.3% | | Profit Attributable to Equity Holders of the Company | 160,611 | 139,253 | 15.3% | | Earnings Per Share | 2025 (RMB) | 2024 (RMB) | | :--- | :--- | :--- | | Basic | 0.14 yuan | 0.12 yuan | | Diluted | 0.14 yuan | 0.12 yuan | - Revenue growth was primarily driven by volume-based procurement policies, accelerating import substitution, and sustained growth in demand for the company's products' surgical volume[5](index=5&type=chunk) [Consolidated Financial Statements](index=2&type=section&id=Consolidated%20Financial%20Statements) [Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=2&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For the six months ended June 30, 2025, the Group reported **5.6%** revenue growth, **3.0%** gross profit growth, **9.7%** operating profit growth, and **15.3%** profit for the period, with significant increases in net other income and net finance income | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Revenue | 694,227 | 657,102 | | Cost of Sales | (283,892) | (258,622) | | Gross Profit | 410,335 | 398,480 | | Net Other Income | 18,263 | 2,904 | | Selling and Distribution Expenses | (117,297) | (113,007) | | General and Administrative Expenses | (77,386) | (72,308) | | Research and Development Expenses | (66,701) | (63,575) | | Operating Profit | 167,214 | 152,494 | | Net Finance Income | 19,457 | 10,030 | | Profit Before Tax | 186,671 | 162,524 | | Income Tax | (26,060) | (23,271) | | Profit for the Period | 160,611 | 139,253 | | Profit Attributable to Equity Holders of the Company | 160,611 | 139,253 | | Total Comprehensive Income | 163,259 | 140,513 | - Net other income significantly increased from **RMB 2,904 thousands** in 2024 to **RMB 18,263 thousands** in 2025[6](index=6&type=chunk) - Net finance income nearly doubled from **RMB 10,030 thousands** in 2024 to **RMB 19,457 thousands** in 2025[6](index=6&type=chunk) [Consolidated Statement of Financial Position](index=3&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the Group's total net assets grew to **RMB 2,731.5 million**, driven by increased net current assets from other financial assets and fixed deposits, despite a decrease in non-current fixed deposits and an increase in current bank loans and bills payable | Metric | 2025 June 30 (RMB thousands) | 2024 Dec 31 (RMB thousands) | | :--- | :--- | :--- | | **Non-current Assets** | | | | Property, Plant and Equipment | 702,746 | 683,616 | | Fixed Deposits | 10,179 | 206,301 | | Total Non-current Assets | 977,109 | 1,157,343 | | **Current Assets** | | | | Inventories | 460,051 | 488,668 | | Trade Receivables | 520,662 | 494,820 | | Other Financial Assets | 759,617 | 615,235 | | Fixed Deposits | 306,639 | 64,784 | | Cash and Cash Equivalents | 375,064 | 352,173 | | Total Current Assets | 2,582,497 | 2,178,055 | | **Current Liabilities** | | | | Trade Payables | 106,599 | 122,100 | | Bills Payable | 66,579 | 30,001 | | Bank Loans | 136,094 | 60,447 | | Total Current Liabilities | 737,041 | 596,416 | | Net Current Assets | 1,845,456 | 1,581,639 | | Net Assets | 2,731,467 | 2,638,186 | - Non-current fixed deposits significantly decreased from **RMB 206,301 thousands** as of December 31, 2024, to **RMB 10,179 thousands** as of June 30, 2025[7](index=7&type=chunk) - Other financial assets and fixed deposits within current assets significantly increased from **RMB 615,235 thousands** to **RMB 759,617 thousands** and from **RMB 64,784 thousands** to **RMB 306,639 thousands**, respectively[7](index=7&type=chunk) - Bank loans and bills payable within current liabilities increased from **RMB 60,447 thousands** to **RMB 136,094 thousands** and from **RMB 30,001 thousands** to **RMB 66,579 thousands**, respectively[7](index=7&type=chunk) [Notes to the Interim Consolidated Financial Statements](index=5&type=section&id=Notes%20to%20the%20Interim%20Consolidated%20Financial%20Statements) [Basis of Preparation and Changes in Accounting Policies](index=5&type=section&id=Basis%20of%20Preparation%20and%20Changes%20in%20Accounting%20Policies) This interim financial report, prepared under HKEX Listing Rules and IAS 34, was approved for issue on August 27, 2025, with IAS 21 amendments having no material impact - The interim financial report was prepared in accordance with the HKEX Listing Rules and International Accounting Standard 34, and approved for issue on August 27, 2025[9](index=9&type=chunk) - The revised International Accounting Standard 21 was applied during the period but had no material impact on the interim report[11](index=11&type=chunk) - This interim financial report is unaudited but has been reviewed by KPMG in accordance with Hong Kong Standard on Review Engagements 2410[10](index=10&type=chunk) [Revenue and Segment Information](index=6&type=section&id=Revenue%20and%20Segment%20Information) The Group's core business involves orthopedic implants and surgical instruments; H1 2025 saw **14.0%** hip implant revenue growth, slight knee implant decline, **26.5%** drop in spine/trauma implants, and **6.0%** growth in the dominant China market - The Group's principal activities are the manufacture and sale of orthopedic joint implants, spine implants, trauma implants, and complete sets of surgical instruments[13](index=13&type=chunk) Major Product Categories | Major Product Categories | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Hip Replacement Implants | 409,675 | 359,357 | | Knee Replacement Implants | 194,489 | 195,804 | | Spine and Trauma Implants | 50,732 | 69,056 | | Digital Orthopedic Customized Products and Services | 18,424 | 17,725 | | Others | 20,907 | 15,160 | | **Total Revenue** | **694,227** | **657,102** | Customer Geographical Location | Customer Geographical Location | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | China | 566,019 | 533,811 | | United Kingdom | 33,095 | 27,586 | | Other Countries | 95,113 | 95,705 | | **Total Revenue** | **694,227** | **657,102** | Reportable Segments | Reportable Segments | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Orthopedic Implants - China (External Customer Revenue) | 630,327 | 597,257 | | Orthopedic Implants - UK (External Customer Revenue) | 63,900 | 59,845 | | Reportable Segment Profit (China) | 182,840 | 162,186 | | Reportable Segment Profit (UK) | 3,211 | 1,160 | [Income Tax](index=8&type=section&id=Income%20Tax) For the six months ended June 30, 2025, income tax expense increased to **RMB 26.1 million**, with Chinese subsidiaries benefiting from a **15%** preferential tax rate and UK subsidiaries taxed at **19%** Tax Category | Tax Category | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Current Tax | 23,173 | 27,066 | | Deferred Tax | 2,887 | (3,795) | | **Total Income Tax** | **26,060** | **23,271** | - The Company's Chinese subsidiaries (AK Medical Beijing, Tianyan Medical, Libel) hold High-Tech Enterprise Certificates, enjoying a **15%** preferential income tax rate[20](index=20&type=chunk) - The tax for subsidiaries in England and Wales is calculated at the statutory corporate income tax rate of **19%**[20](index=20&type=chunk) [Earnings Per Share](index=8&type=section&id=Earnings%20Per%20Share) For the six months ended June 30, 2025, basic and diluted earnings per share both increased to **RMB 0.14 yuan** from **RMB 0.12 yuan** in the prior period Earnings Per Share | Earnings Per Share | 2025 (RMB) | 2024 (RMB) | | :--- | :--- | :--- | | Basic | 0.14 yuan | 0.12 yuan | | Diluted | 0.14 yuan | 0.12 yuan | - Basic earnings per share are calculated based on the profit attributable to ordinary equity holders of the Company of **RMB 160,611,000** and the weighted average number of ordinary shares outstanding of **1,116,429,570** shares[21](index=21&type=chunk) [Property, Plant and Equipment](index=9&type=section&id=Property%2C%20Plant%20and%20Equipment) For the six months ended June 30, 2025, total acquisitions of property, plant, and equipment decreased to **RMB 62.9 million**, with some assets pledged for bank loans and bills payable - The Group acquired property, plant and equipment items at a total cost of **RMB 62,864,000**, a decrease from **RMB 104,451,000** in the same period of 2024[25](index=25&type=chunk) - As of June 30, 2025, non-current bank loans of **RMB 5,692,000** and bills payable of **RMB 38,448,000** were secured by property, plant and equipment with a total carrying value of **RMB 83,930,000**[25](index=25&type=chunk) [Bills Receivable / Trade Receivables](index=9&type=section&id=Bills%20Receivable%20%2F%20Trade%20Receivables) As of June 30, 2025, net trade receivables increased to **RMB 520.7 million**, while bills receivable pledged for bills payable decreased Trade Receivables | Metric | 2025 June 30 (RMB thousands) | 2024 Dec 31 (RMB thousands) | | :--- | :--- | :--- | | Bills Receivable | 78,338 | 81,858 | | Trade Receivables | 600,212 | 561,392 | | Less: Provision for Credit Losses | (79,550) | (66,572) | | **Net Trade Receivables** | **520,662** | **494,820** | - Bills receivable of approximately **RMB 5,200,000** were pledged for bills payable, a decrease from **RMB 22,907,000** as of December 31, 2024[26](index=26&type=chunk) Aging of Trade Receivables | Aging of Trade Receivables | 2025 June 30 (RMB thousands) | 2024 Dec 31 (RMB thousands) | | :--- | :--- | :--- | | Current to Three Months | 339,875 | 315,041 | | Four to Six Months | 67,407 | 57,641 | | Seven to Twelve Months | 58,386 | 65,512 | | Over Twelve Months | 54,994 | 56,626 | | **Total** | **520,662** | **494,820** | [Trade Payables](index=10&type=section&id=Trade%20Payables) As of June 30, 2025, total trade payables decreased to **RMB 106.6 million**, with all amounts expected to be settled within one year Aging of Trade Payables | Aging of Trade Payables | 2025 June 30 (RMB thousands) | 2024 Dec 31 (RMB thousands) | | :--- | :--- | :--- | | Within Three Months | 90,884 | 70,926 | | Four to Six Months | 8,034 | 29,527 | | Seven to Twelve Months | 2,372 | 12,990 | | One to Two Years | 1,733 | 5,490 | | Over Two Years | 3,576 | 3,167 | | **Total** | **106,599** | **122,100** | - All trade payables are expected to be settled within one year[28](index=28&type=chunk) [Bank Loans](index=10&type=section&id=Bank%20Loans) As of June 30, 2025, total bank loans reached **RMB 141.8 million**, with a significant increase in current loans, some of which are secured by pledged deposits Bank Loan Category | Bank Loan Category | 2025 June 30 (RMB thousands) | 2024 Dec 31 (RMB thousands) | | :--- | :--- | :--- | | Current Secured Bank Loans | 33,201 | 30,707 | | Current Unsecured Bank Loans | 102,893 | 29,740 | | Non-current Secured Bank Loans | 5,692 | 17,667 | | **Total** | **141,786** | **78,114** | - Current unsecured bank loans significantly increased from **RMB 29,740 thousands** as of December 31, 2024, to **RMB 102,893 thousands** as of June 30, 2025[28](index=28&type=chunk) - Bank loans of **RMB 33,201,000** were secured by pledged deposits of approximately **RMB 199,921,000**[28](index=28&type=chunk) [Capital, Reserves and Dividends](index=11&type=section&id=Capital%2C%20Reserves%20and%20Dividends) As of June 30, 2025, issued and paid-up ordinary shares slightly increased, share capital remained stable, and dividends approved for equity holders rose to **RMB 73.7 million** Share Capital Movement | Share Capital Movement | 2025 June 30 (Number of Shares) | 2025 June 30 (RMB thousands) | 2024 Dec 31 (Number of Shares) | 2024 Dec 31 (RMB thousands) | | :--- | :--- | :--- | :--- | :--- | | As at January 1 | 1,122,671,437 | 9,515 | 1,121,896,437 | 9,508 | | Shares Issued Under Share Option Scheme | 24,341 | – | 400,000 | 4 | | As at June 30 | 1,122,695,778 | 9,515 | 1,122,296,437 | 9,512 | Dividends | Dividends | 2025 (RMB thousands) | 2024 (RMB thousands) | | :--- | :--- | :--- | | Interim Dividend Per Ordinary Share | 73,717 | 46,079 | [Management Discussion and Analysis](index=12&type=section&id=Management%20Discussion%20and%20Analysis) [Business Review and Outlook](index=12&type=section&id=Business%20Review%20and%20Outlook) In H1 2025, AK Medical strengthened its market position through import substitution and policy alignment, launched the K3 intelligent surgical robot, enhanced its iCOS platform, expanded internationally, and opened a new industrial park for future growth - In H1 2025, the full implementation of national volume-based procurement policies for artificial joints accelerated import substitution, creating new market and customer opportunities for the Group[32](index=32&type=chunk) - The new industrial park was completed, establishing a smart orthopedic interactive platform and experience center, enabling integrated full-process digital orthopedic solutions[32](index=32&type=chunk) - The K3 intelligent surgical robot received approval from the National Medical Products Administration, enhancing the iCOS digital orthopedic customized products and services platform, and establishing a comprehensive solution for pre-operative planning, intra-operative navigation, and post-operative monitoring[33](index=33&type=chunk) - As of June 30, 2025, the Group's sales revenue was approximately **RMB 694.2 million**, a **5.6%** year-on-year increase, and net profit was approximately **RMB 160.6 million**, a **15.3%** year-on-year increase[33](index=33&type=chunk) [Hip and Knee Joint Implant Business](index=13&type=section&id=Hip%20and%20Knee%20Joint%20Implant%20Business) In H1 2025, hip and knee implant revenue rose **8.8%** to **RMB 604.2 million**, driven by strategic collaborations and successful import substitution in economically developed regions - As of June 30, 2025, hip and knee joint products generated revenue of approximately **RMB 604.2 million**, an **8.8%** year-on-year increase[34](index=34&type=chunk) - The Group's products achieved large-scale clinical application in top-tier hospitals in economically developed regions like the Yangtze River Delta and Pearl River Delta, successfully breaking the long-standing dominance of imported brands[34](index=34&type=chunk) [Spine and Trauma Implant Business](index=13&type=section&id=Spine%20and%20Trauma%20Implant%20Business) In H1 2025, spine and trauma implant revenue decreased **26.5%** to **RMB 50.7 million** due to policy impacts, yet new product expansion saw **87%** growth in atlantoaxial lateral mass fusion implants and entry into 49 new hospitals - As of June 30, 2025, spine and trauma implant products generated revenue of approximately **RMB 50.7 million**, a **26.5%** year-on-year decrease[35](index=35&type=chunk) - The implantation growth rate for atlantoaxial lateral mass fusion products reached **87%**, expanding hospital coverage from over 20 to over 40[35](index=35&type=chunk) - The spine product line entered **49** new hospitals, including **4** T1-level and **16** T2-level hospitals[35](index=35&type=chunk) [Digital Orthopedic Customized Products and Services](index=14&type=section&id=Digital%20Orthopedic%20Customized%20Products%20and%20Services) In H1 2025, digital orthopedic customized products and services revenue grew **3.9%** to **RMB 18.4 million**, with the K3 intelligent surgical robot's approval enhancing the digital orthopedic ecosystem, promising future growth despite policy adjustments - As of June 30, 2025, digital orthopedic customized products and services generated revenue of approximately **RMB 18.4 million**, an increase of approximately **3.9%** compared to the same period in 2024[36](index=36&type=chunk) - AK Medical's fully self-developed robot system, the K3 intelligent surgical robot, received approval for market launch from the National Medical Products Administration on May 14, 2025[36](index=36&type=chunk) [Overseas Business](index=14&type=section&id=Overseas%20Business) In H1 2025, overseas product revenue increased **4.0%** to **RMB 128.2 million**, driven by expansion into 4 new countries and enhanced international influence through the Silk Road Health International Exchange Program - As of June 30, 2025, overseas products generated revenue of approximately **RMB 128.2 million**, an increase of approximately **4.0%** compared to the same period in 2024[37](index=37&type=chunk) - In H1 2025, the Group added registrations in **4** new countries, with **15** more countries undergoing registration, and added **5** new distributors[37](index=37&type=chunk) - Six series of Silk Road Health International Cooperation Alliance activities were held, covering three continents and four countries, with over **140** participants[37](index=37&type=chunk) [Research and Development](index=14&type=section&id=Research%20and%20Development) The Group continues to build an innovation-driven R&D system, with 3 new products entering the innovation approval channel (7 total), the K3 intelligent surgical robot's approval marking a new phase in digital orthopedic intelligent equipment, and breakthroughs in smart medical imaging and digital orthopedics - The National Medical Products Administration supports the development of innovative products such as medical surgical robots and metal additive manufacturing bone implants[38](index=38&type=chunk) - The "Magnetically Controlled Non-invasive Extendable Prosthesis System" successfully entered the special review procedure for innovative medical devices, filling a domestic technological gap[39](index=39&type=chunk) - As of June 30, 2025, the Group had **3** new products enter the innovation approval channel, bringing the cumulative total to **7** products in the national innovation channel[39](index=39&type=chunk) - The independently developed K3 intelligent surgical robot obtained its registration certificate from the National Medical Products Administration on May 14, 2025, featuring high degrees of freedom and sub-millimeter precision control[39](index=39&type=chunk) - Breakthroughs were achieved in intelligent medical imaging and digital orthopedics, with the independent development of a deep learning-based multi-modal image fusion algorithm and the innovative establishment of an "implant-bone interface dynamic mechanical matching" model[40](index=40&type=chunk) [Academic Promotion and Education](index=16&type=section&id=Academic%20Promotion%20and%20Education) AK Academy, a global education platform, established a 'technical training-product innovation-international exchange' academic promotion system in H1 2025, expanding from local to global, with multiple academic events driving **30%** CAGR for vertebral reconstruction products - AK Academy established a "technical training-product innovation-international exchange" three-in-one academic promotion system, achieving expansion from local deep cultivation to global outreach[41](index=41&type=chunk) - Multiple academic events were held, such as the AC ONE Hip Prosthesis Seminar, HAUK Unicondylar Multi-center Academic Conference, and Complex Hip and Knee Revision Technology Summit, filling domestic technological gaps[42](index=42&type=chunk) - The "Bone Warrior" series of academic activities was launched, with a compound annual growth rate of **30%** for vertebral reconstruction products[42](index=42&type=chunk) [Digital Orthopedics Capacity Building Project](index=17&type=section&id=Digital%20Orthopedics%20Capacity%20Building%20Project) Following its approval, one K3 intelligent surgical robot has been commercialized, successfully assisting in the world's first domestic robot-assisted knee replacement revision surgery, with smart auxiliary equipment completing over **1,700** clinical procedures by June 30, 2025 - Following its market approval, one K3 intelligent surgical robot has been commercialized[43](index=43&type=chunk) - Peking University Third Hospital successfully completed the world's first domestic robot-assisted knee replacement revision surgery with the assistance of the K3 intelligent surgical robot[43](index=43&type=chunk) - As of June 30, 2025, the Group's intelligent auxiliary equipment had cumulatively completed over **1,700** clinical surgeries[44](index=44&type=chunk) [Silk Road Health International Exchange Program](index=17&type=section&id=Silk%20Road%20Health%20International%20Exchange%20Program) As the lead for the 'Silk Road Health International Cooperation Alliance,' the Group hosted 6 events across three continents and four countries in H1 2025, promoting the international export of China's 3D printing personalized implant technology standards - In H1 2025, a total of **6** series of Silk Road Health International Cooperation Alliance activities were held, covering three continents and four countries, with over **140** participants[45](index=45&type=chunk) - A cross-continental orthopedic innovation exchange platform was successfully established, systematically exporting China's technical standards in 3D printing personalized implants[45](index=45&type=chunk) [Industrial Park Construction](index=18&type=section&id=Industrial%20Park%20Construction) AK Medical Industrial Park, officially opened on May 7, 2025, spans over **39,500 sqm**, integrates digital management, adopts green building concepts, and features three digital manufacturing systems (iCOS R&D, 3D printing, digital manufacturing) to drive full-chain digital transformation - AK Medical Industrial Park officially commenced operations on May 7, 2025, with a total construction area exceeding **39,500 square meters**, supporting future growth[46](index=46&type=chunk) - The park adopts green building concepts, including a ground-source heat pump system and a 1.5 MW rooftop photovoltaic clean energy power station, expected to reduce carbon dioxide emissions by **1,575 tons** annually[46](index=46&type=chunk) - The industrial park features three independent digital manufacturing systems: iCOS R&D and production workshop, 3D printing workshop, and digital manufacturing workshop[47](index=47&type=chunk) [Outlook](index=18&type=section&id=Outlook) The Group will actively respond to national policies, building a dual-driven development model of 'digital transformation and international market expansion,' leveraging the iCOS platform for smart interactive ecosystem development and accelerating overseas market presence through the 'AK Medical + JRI' dual-brand strategy - The Group will build a dual-driven development model of "digital transformation and international market expansion"[48](index=48&type=chunk) - Leveraging the iCOS digital orthopedic platform, the Group will advance the construction of an intelligent interactive ecosystem and explore innovative business models[48](index=48&type=chunk) - The Group will accelerate its overseas market presence through the "AK Medical + JRI" dual-brand synergistic development strategy[48](index=48&type=chunk) [Financial Review](index=20&type=section&id=Financial%20Review) This section reviews the Group's financial performance for the six months ended June 30, 2025, covering revenue, costs, expenses, liquidity, and capital structure, noting revenue growth driven by volume-based procurement, a slight decrease in gross margin, robust financial health, ample cash, and ongoing capital expenditures for future development | Metric | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 694,227 | 657,102 | 5.6% | | Gross Profit | 410,335 | 398,480 | 3.0% | | Profit for the Period | 160,611 | 139,253 | 15.3% | - Revenue growth was primarily due to the promotion of sales of hip and knee replacement implant products within the scope of national joint implant volume-based procurement policies[55](index=55&type=chunk) [Revenue Analysis](index=21&type=section&id=Revenue%20Analysis) Total Group revenue increased **5.6%** year-on-year, with hip replacement implants up **14.0%**, knee implants down **0.7%**, spine and trauma implants down **26.5%**, digital orthopedic customized products and services up **3.9%**, domestic sales up **6.0%**, and overseas sales up **4.0%** Product Categories | Product Categories | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Hip Replacement Implants | 409,675 | 359,357 | 14.0% | | Knee Replacement Implants | 194,489 | 195,804 | -0.7% | | Spine and Trauma Implants | 50,732 | 69,056 | -26.5% | | Digital Orthopedic Customized Products and Services | 18,424 | 17,725 | 3.9% | | Others | 20,907 | 15,160 | 37.9% | | **Total** | **694,227** | **657,102** | **5.6%** | - Revenue from knee replacement implants slightly decreased, mainly due to a decline in sales prices of unicondylar implant products outside the volume-based procurement scope[56](index=56&type=chunk) - Revenue from spine and trauma implants decreased by **26.5%**, primarily affected by policies, but the implantation volume of 3D printing technology products significantly increased[58](index=58&type=chunk) Sales Region | Sales Region | 2025 (RMB thousands) | 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | China | 566,019 | 533,811 | 6.0% | | Other Countries | 128,208 | 123,291 | 4.0% | | **Total** | **694,227** | **657,102** | **5.6%** | [Cost of Sales, Gross Profit and Gross Margin](index=23&type=section&id=Cost%20of%20Sales%2C%20Gross%20Profit%20and%20Gross%20Margin) Cost of sales increased **9.8%** to **RMB 283.9 million** due to higher sales volume; gross profit rose **3.0%** to **RMB 410.3 million**, but gross margin declined **1.5 percentage points** to **59.1%**, mainly due to a lower proportion of spine and trauma implant revenue - Cost of sales was approximately **RMB 283.9 million**, an increase of **9.8%** compared to the same period in 2024, mainly due to an increase in product sales volume[61](index=61&type=chunk) - Gross profit was approximately **RMB 410.3 million**, an increase of **3.0%** compared to the same period in 2024[62](index=62&type=chunk) - The gross margin was **59.1%**, a decrease of **1.5 percentage points** from **60.6%** in the same period of 2024, primarily attributed to a decrease in the revenue contribution from spine and trauma implant products[62](index=62&type=chunk) [Net Other Income](index=23&type=section&id=Net%20Other%20Income) Net other income significantly increased by **RMB 15.4 million** to **RMB 18.3 million**, primarily from government subsidies and R&D project grants - Net other income was approximately **RMB 18.3 million**, an increase of **RMB 15.4 million** compared to the same period in 2024[63](index=63&type=chunk) - This increase primarily stemmed from government subsidies and R&D project grants[63](index=63&type=chunk) [Selling and Distribution Expenses](index=23&type=section&id=Selling%20and%20Distribution%20Expenses) Selling and distribution expenses increased **3.8%** to **RMB 117.3 million**, primarily due to increased domestic and international market activities - Selling and distribution expenses were approximately **RMB 117.3 million**, an increase of **3.8%** compared to the same period in 2024[64](index=64&type=chunk) - The increase was mainly due to increased domestic and international market activities undertaken during the current year[64](index=64&type=chunk) [General and Administrative Expenses](index=23&type=section&id=General%20and%20Administrative%20Expenses) General and administrative expenses increased **7.1%** to **RMB 77.4 million**, mainly due to one-off relocation costs and credit loss provisions in the first half - General and administrative expenses were approximately **RMB 77.4 million**, an increase of **7.1%** compared to the same period in 2024[65](index=65&type=chunk) - The increase primarily resulted from one-off expenses incurred due to the Group's relocation in the first half of the year and credit loss provisions based on the aging and balances of trade receivables[65](index=65&type=chunk) [Research and Development Expenses](index=23&type=section&id=Research%20and%20Development%20Expenses) R&D expenses increased **4.9%** to **RMB 66.7 million**, primarily linked to the progress of the company's R&D projects, with the Group committed to continued investment - Research and development expenses were approximately **RMB 66.7 million**, an increase of **4.9%** compared to the same period in 2024[66](index=66&type=chunk) - The increase was mainly related to the progress schedule of the company's R&D projects, and the Group will continue to actively invest in R&D[66](index=66&type=chunk) [Net Finance Income](index=24&type=section&id=Net%20Finance%20Income) Net finance income significantly increased by **RMB 9.5 million** to **RMB 19.5 million**, driven by higher interest income and foreign exchange gains from currency fluctuations - Net finance income was approximately **RMB 19.5 million**, an increase of approximately **RMB 9.5 million** compared to the same period in 2024[67](index=67&type=chunk) - The increase was primarily influenced by higher interest income and foreign exchange gains resulting from currency fluctuations[67](index=67&type=chunk) [Income Tax Expense](index=24&type=section&id=Income%20Tax%20Expense) Income tax expense increased **12.0%** to **RMB 26.1 million**, primarily due to higher profits - Income tax expense was approximately **RMB 26.1 million**, an increase of **12.0%** compared to the same period in 2024[68](index=68&type=chunk) - The increase was primarily due to higher profits[68](index=68&type=chunk) [Liquidity and Financial Resources](index=24&type=section&id=Liquidity%20and%20Financial%20Resources) As of June 30, 2025, cash and cash equivalents, structured deposits, fixed deposits, and restricted deposits totaled **RMB 1,436.5 million**, an increase from December 31, 2024, with net current assets rising by **RMB 263.9 million** to **RMB 1,845.5 million** - As of June 30, 2025, cash and cash equivalents, structured deposits, fixed deposits exceeding three months, and restricted deposits totaled approximately **RMB 1,436.5 million**, an increase from **RMB 1,027.7 million** as of December 31, 2024[69](index=69&type=chunk) - Net current assets were approximately **RMB 1,845.5 million**, an increase of approximately **RMB 263.9 million** from December 31, 2024, primarily derived from operations[70](index=70&type=chunk) - The Group generated net exchange gains of approximately **RMB 5.3 million** for the six months ended June 30, 2025, compared to exchange losses of approximately **RMB 0.9 million** in the same period of 2024[71](index=71&type=chunk) [Capital Expenditure](index=25&type=section&id=Capital%20Expenditure) For the six months ended June 30, 2025, total capital expenditure was **RMB 76.6 million**, primarily for plant construction, patent acquisition, and production equipment, instrument, and software purchases - Total capital expenditure was approximately **RMB 76.6 million**, primarily used for plant construction, patent acquisition, and the purchase of equipment, instruments, and software for production[72](index=72&type=chunk) [Pledge of Assets](index=25&type=section&id=Pledge%20of%20Assets) As of June 30, 2025, certain bank loans and bills payable were secured by property, plant and equipment, bills receivable, and restricted deposits, totaling approximately **RMB 312.0 million**, an increase from December 31, 2024 - As of June 30, 2025, bank loans and bills payable were secured by property, plant and equipment of approximately **RMB 83.9 million**, bills receivable of approximately **RMB 5.2 million**, and restricted deposits of approximately **RMB 222.9 million**, totaling approximately **RMB 312.0 million**[73](index=73&type=chunk) [Borrowings and Gearing Ratio](index=25&type=section&id=Borrowings%20and%20Gearing%20Ratio) As of June 30, 2025, the Group's short-term bank loans totaled **RMB 136.1 million** and long-term borrowings **RMB 5.7 million**, with the gearing ratio increasing to **5.2%** from **3.0%** at December 31, 2024 - As of June 30, 2025, the outstanding balance of short-term bank loans was approximately **RMB 136.1 million**, and the outstanding balance of long-term borrowings was approximately **RMB 5.7 million**[74](index=74&type=chunk) - The gearing ratio was approximately **5.2%**, an increase from **3.0%** as of December 31, 2024[74](index=74&type=chunk) [Contingent Liabilities](index=25&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[75](index=75&type=chunk) [Significant Investments and Acquisitions/Disposals](index=25&type=section&id=Significant%20Investments%20and%20Acquisitions%2FDisposals) As of June 30, 2025, the Group held no significant equity investments in other companies and made no material acquisitions or disposals of subsidiaries, associates, or joint ventures - As of June 30, 2025, the Group held no significant equity investments in any other companies[76](index=76&type=chunk) - For the six months ended June 30, 2025, the Group did not undertake any significant acquisitions or disposals of subsidiaries, associates, or joint ventures[77](index=77&type=chunk) [Future Material Investments and Capital Asset Plans](index=25&type=section&id=Future%20Material%20Investments%20and%20Capital%20Asset%20Plans) As of June 30, 2025, the Group's ongoing construction project is a new plant in Changzhou Xitaihu Park, expected to be funded by internal and/or external sources, with no other material investment or capital asset plans - As of June 30, 2025, the Group had one ongoing construction project, a new plant in Changzhou Xitaihu Park[78](index=78&type=chunk) - This project is expected to be funded through internal and/or external sources[78](index=78&type=chunk) [Other Information](index=26&type=section&id=Other%20Information) [Employees and Remuneration](index=26&type=section&id=Employees%20and%20Remuneration) As of June 30, 2025, the Group had **1,003** employees, with total staff remuneration expenses of **RMB 131.8 million**, primarily due to an increase in headcount - As of June 30, 2025, the Group had **1,003** employees (December 31, 2024: **954** employees)[79](index=79&type=chunk) - Total staff remuneration expenses were approximately **RMB 131.8 million**, primarily due to an increase in the number of employees[79](index=79&type=chunk) [Events After Reporting Period](index=26&type=section&id=Events%20After%20Reporting%20Period) No significant events affecting the Group have occurred from June 30, 2025, up to the date of this announcement - No significant events affecting the Group have occurred from June 30, 2025, up to the date of this announcement[80](index=80&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=26&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company%27s%20Listed%20Securities) For the six months ended June 30, 2025, neither the Company nor its subsidiaries purchased, sold, or redeemed any of the Company's listed securities, and no treasury shares were held at period-end - 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[81](index=81&type=chunk) - As of June 30, 2025, the Company held no treasury shares[81](index=81&type=chunk) [Corporate Governance](index=26&type=section&id=Corporate%20Governance) For the six months ended June 30, 2025, the Company complied with Appendix C1 of the Listing Rules' Corporate Governance Code, except for provision C.2.1 regarding the separation of Chairman and CEO roles, both held by Mr. Li Zhijiang - For the six months ended June 30, 2025, the Company complied with the Corporate Governance Code set out in Appendix C1 of the Listing Rules, except for code provision C.2.1[82](index=82&type=chunk) - The roles of Chairman and Chief Executive Officer are both held by Mr. Li Zhijiang, and the Board believes this structure does not undermine the balance of power and authority[82](index=82&type=chunk) - The Company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix C3 of the Listing Rules and has established written guidelines for employees, with no non-compliance found during the period[83](index=83&type=chunk) [Audit Committee Review and Independent Review by Auditor](index=27&type=section&id=Audit%20Committee%20Review%20and%20Independent%20Review%20by%20Auditor) The Audit Committee reviewed the Group's interim results for the six months ended June 30, 2025, confirming compliance with applicable accounting standards; the unaudited interim financial results were independently reviewed by KPMG - The Audit Committee has reviewed the Group's interim results for the six months ended June 30, 2025, and is satisfied that they were prepared in accordance with applicable accounting standards[84](index=84&type=chunk) - The interim financial results are unaudited but have been independently reviewed by KPMG in accordance with Hong Kong Standard on Review Engagements 2410[85](index=85&type=chunk) [Interim Dividend](index=27&type=section&id=Interim%20Dividend) The Board does not recommend declaring any interim dividend for the six months ended June 30, 2025 - The Board does not recommend declaring any interim dividend for the six months ended June 30, 2025 (six months ended June 30, 2024: nil)[86](index=86&type=chunk)

[Company Overview and Financial Summary](index=1&type=section&id=公司概覽與財務摘要) [Company Basic Information](index=1&type=section&id=1.1%20公司基本信息) Xikang Cloud Hospital Holdings Inc. announced interim results for the six months ended June 30, 2025 - Company Name: **Xikang Cloud Hospital Holdings Inc.** `[2](index=2&type=chunk)` - Stock Code: **9686** `[2](index=2&type=chunk)` - Reporting Period: **Six months ended June 30, 2025** `[2](index=2&type=chunk)` [Financial Summary](index=1&type=section&id=1.2%20財務摘要) Total revenue slightly decreased by 0.3% to RMB 178.6 million, while net loss and adjusted net loss significantly improved Financial Summary for the Six Months Ended June 30, 2025 | Metric | 2025 (RMB thousand) | 2024 (RMB thousand) | Change | | :--- | :--- | :--- | :--- | | Revenue | 178,605 | 179,214 | (609) | | Gross Profit | 39,313 | 42,556 | (3,243) | | Gross Profit Margin | 22.0% | 23.7% | (1.7%) | | Loss for the Period | (49,975) | (60,484) | 10,509 | | Add: Share-based payment expenses | 11,571 | 9,182 | 2,389 | | Adjusted Net Loss for the Period | (38,404) | (51,302) | 12,898 | - The interim results were prepared in accordance with **Hong Kong Accounting Standards** and reviewed by the audit committee and independent auditor `[2](index=2&type=chunk)` [Overall Performance Overview](index=1&type=section&id=1.3%20整體業績概覽) Despite a slight revenue decrease, net loss significantly improved due to optimized resource allocation and production control - Total revenue decreased by **0.3%** year-on-year to **RMB 178.6 million** `[3](index=3&type=chunk)` - Net loss decreased by **17.4%** to **RMB 50.0 million** `[3](index=3&type=chunk)` [Business Review](index=2&type=section&id=一、業務回顧) [City Cloud Hospital Platform Business Model](index=2&type=section&id=2.1%20城市雲醫院平台商業模式) The company focuses on building a "City Cloud Hospital Platform" with government cooperation and AI technology to enhance healthcare accessibility - Committed to building a "City Cloud Hospital Platform" that uses cities as entry points and closely links regional medical and health systems `[4](index=4&type=chunk)` - The core of the business model is **government cooperation**, ensuring platform credibility `[5](index=5&type=chunk)` - Driven by **AI technology**, constructing a digital healthcare service closed-loop of "intelligent matching – precise services – continuous optimization" `[5](index=5&type=chunk)` [Platform Network Scaled Development](index=3&type=section&id=2.2%20平台網絡規模化發展) Leveraging the "Ningbo Model," the company rapidly expanded its city cloud hospital platform network, significantly increasing connected institutions and professionals - The "Ningbo Model" is highly replicable, providing a standardized implementation path for national business expansion `[6](index=6&type=chunk)` Platform Network Scale Growth (as of June 30, 2025) | Metric | June 30, 2025 | June 30, 2024 | Year-on-year Growth | | :--- | :--- | :--- | :--- | | Connected Medical Institutions | Over 36,000 | - | - | | Of which Hospitals | 3,303 | 2,654 | 24.5% | | Registered Doctors | 147,000 | 137,000 | 8.0% | | Registered Nurses (with 5+ years clinical experience) | 145,000 | 108,000 | 34.1% | [Internet+ Nursing Services](index=3&type=section&id=2.3%20互聯網%2B護理服務) As a leading "Internet+ Nursing Services" platform, the company achieved high service volume growth through a "home-based medical nursing service" strategy - Core strategic positioning as "home-based medical nursing services," continuously deepening cooperation with multiple provincial and municipal governments in China `[7](index=7&type=chunk)` - Formed a synergistic development pattern of "**provincial benchmark demonstration + municipal rapid replication**" `[7](index=7&type=chunk)` Nursing Service Volume Growth (for the six months ended June 30, 2025) | Service Type | 2025 (person-times) | 2024 (person-times) | Year-on-year Growth | | :--- | :--- | :--- | :--- | | Home Nursing Services | Over 218,000 | Over 142,000 | 53.1% | | Nursing Consultation Services | Over 166,000 | Over 147,000 | 12.9% | [Platform Ecosystem and Specialized Operations](index=3&type=section&id=2.4%20平台生態與專科化運營) The company integrates AI and big data to build a comprehensive "medical + nursing + health management" platform, offering specialized and personalized services - Deeply integrating **AI and big data technologies** to build an intelligent service platform covering "medical + nursing + health management" scenarios `[8](index=8&type=chunk)` - Optimized specialized medical and nursing solutions for home scenarios, including **obstetrics and gynecology, pediatrics, traditional Chinese medicine, rehabilitation, and neurology** `[8](index=8&type=chunk)` [Segment Business Revenue Analysis](index=4&type=section&id=2.5%20分部業務收入分析) During the reporting period, medical service revenue decreased, while nursing and health management service revenues grew, indicating ongoing business structure optimization Revenue by Business Segment (for the six months ended June 30) | Segment | 2025 Revenue (RMB thousand) | 2025 Share | 2024 Revenue (RMB thousand) | 2024 Share | | :--- | :--- | :--- | :--- | :--- | | Medical Services | 69,827 | 39.1% | 87,615 | 48.9% | | Nursing Services | 34,624 | 19.4% | 24,478 | 13.7% | | Health Management Services | 74,154 | 41.5% | 67,121 | 37.4% | | **Total** | **178,605** | **100.0%** | **179,214** | **100.0%** | [Medical Services](index=5&type=section&id=2.5.1%20醫療服務) Medical service revenue decreased by 20.3% due to structural optimization of low-profit businesses and increased market competition, despite growth in internet hospital construction - Medical service revenue decreased by **20.3%** to **RMB 69.8 million** `[11](index=11&type=chunk)[17](index=17&type=chunk)` - Proactively optimized the structure of some low-profit business units, leading to a phased decrease in business volume `[11](index=11&type=chunk)[16](index=16&type=chunk)` Internet Medical Service Volume (for the six months ended June 30, 2025) | Service Type | 2025 (person-times) | 2024 (person-times) | Year-on-year Change | | :--- | :--- | :--- | :--- | | Total Internet Medical Services | 2.06 million | 2.231 million | -7.7% | | Online Consultation Services | 942,000 | 1.033 million | -8.8% | | Electronic Prescription Services | 394,000 | 373,000 | +5.6% | | Examination and Testing Services | 288,000 | 249,000 | +15.7% | | Telemedicine Services | 436,000 | 576,000 | -24.3% | - Helped **202 hospitals** build internet hospitals through the cloud hospital platform, a **22.4%** year-on-year increase `[17](index=17&type=chunk)` [Nursing Services](index=7&type=section&id=2.5.2%20護理服務) Nursing service revenue grew by 41.4%, driven by market promotion, rapid replication of professional operations, and AI-enabled efficiency improvements - Nursing service revenue increased by **41.4%** to **RMB 34.6 million** `[11](index=11&type=chunk)[23](index=23&type=chunk)` - Home nursing service volume exceeded **218,000 person-times**, a **53.1%** year-on-year increase `[22](index=22&type=chunk)` - Launched the nursing AI intelligent agent "**Xiao Xi Assistant**" to improve service efficiency and user experience `[22](index=22&type=chunk)` - Service items increased to **over 220**, focusing on specialized nursing for the elderly, maternal and child, chronic disease, and post-operative populations `[23](index=23&type=chunk)` [Health Management Services](index=8&type=section&id=2.5.3%20健康管理服務) Health management service revenue grew by 10.5% due to increased service volume, with the company enhancing precision and intelligence through AI and "1+N" models - Health management service revenue increased by **10.5%** to **RMB 74.2 million** `[11](index=11&type=chunk)[25](index=25&type=chunk)` - Health management service volume exceeded **205,000 person-times**, a **28.1%** year-on-year increase `[25](index=25&type=chunk)` - Innovatively launched digital tools such as the "**AI Medical Assistant Xiaokang**" intelligent analysis system and "**Whole Body Health Map**" `[25](index=25&type=chunk)` [Business Outlook](index=9&type=section&id=二、業務前景) [Industry Opportunities and Challenges](index=9&type=section&id=3.1%20行業機遇與挑戰) China's healthcare industry faces demographic pressures and expanding market demand, alongside policy support and technological innovation - China's healthcare industry faces dual pressures of **aging and declining birth rates**, with continuously expanding market demand `[26](index=26&type=chunk)` - Policy dividends are accelerating, and technological innovation continues to empower industry development `[26](index=26&type=chunk)` [Strategic Direction and Core Trends](index=9&type=section&id=3.2%20戰略方向與核心趨勢) The company will focus on "AI + full-course disease management" and "universal home-based medical care" to build a national network of home-based medical nursing services - Closely focusing on the core trends of "**AI + full-course disease management**" and "**universal home-based medical care**" `[26](index=26&type=chunk)` - Accelerating the deployment and expansion of the city cloud hospital platform within the smart healthcare ecosystem to form a scaled service network `[27](index=27&type=chunk)` [AI and Big Data Technology Integration](index=10&type=section&id=3.3%20AI與大數據技術融合) The company will deeply integrate AI and big data to upgrade its home-based medical nursing service system, creating a full-course intelligent management closed-loop - Deeply integrating **AI and big data technologies** to comprehensively upgrade the "home-based medical nursing service" system `[27](index=27&type=chunk)` - Building a full-course intelligent management closed-loop spanning "**prevention – treatment – rehabilitation**" `[27](index=27&type=chunk)` [Ecosystem Building and Value Empowerment](index=10&type=section&id=3.4%20生態構建與價值賦能) The company aims to break traditional healthcare boundaries, integrate into the elder care industry, and build a "medical + payment + supply chain + data" closed-loop ecosystem - Committed to breaking the spatiotemporal boundaries of traditional medical service models and becoming an ecosystem builder in the new healthcare industry `[28](index=28&type=chunk)` - Building a closed-loop ecosystem of "**medical + payment + supply chain + data**" to better serve C-end users `[28](index=28&type=chunk)` [Financial Performance Analysis](index=11&type=section&id=財務表現分析) [Revenue Analysis](index=11&type=section&id=4.1%20收入分析) Total customer contract revenue slightly decreased by 0.3%, with medical service revenue down 20.3%, while nursing and health management services grew by 41.4% and 10.5% respectively [Customer Contract Revenue](index=11&type=section&id=4.1.1%20客戶合約收入) During the reporting period, the company's total customer contract revenue slightly decreased by 0.3% - Total customer contract revenue decreased by **0.3%** from **RMB 179.2 million** to **RMB 178.6 million** `[29](index=29&type=chunk)` [Medical Service Revenue](index=11&type=section&id=4.1.2%20醫療服務收入) Medical service revenue decreased by 20.3%, primarily due to structural optimization of low-profit businesses and increased market competition - Medical service revenue decreased by **20.3%** to **RMB 69.8 million**, mainly attributable to structural optimization of low-profit business units and market competition `[30](index=30&type=chunk)` [Nursing Service Revenue](index=11&type=section&id=4.1.3%20護理服務收入) Nursing service revenue grew by 41.4%, mainly benefiting from market promotion, rapid replication, and AI-enabled operational efficiency improvements - Nursing service revenue increased by **41.4%** to **RMB 34.6 million**, mainly attributable to market promotion, rapid replication, and AI empowerment improving operational efficiency `[31](index=31&type=chunk)` [Health Management Service Revenue](index=11&type=section&id=4.1.4%20健康管理服務收入) Health management service revenue grew by 10.5%, primarily due to an increase in service volume - Health management service revenue increased by **10.5%** to **RMB 74.2 million**, mainly attributable to an increase in health management service volume `[32](index=32&type=chunk)` [Cost and Gross Profit](index=11&type=section&id=4.2%20成本與毛利) Cost of sales and services increased by 1.9%, gross profit decreased by 7.6%, and gross profit margin fell from 23.7% to 22.0%, mainly due to the higher proportion of medical service revenue and its declining margin [Cost of Sales and Services](index=11&type=section&id=4.2.1%20銷售及服務成本) Cost of sales and services increased by 1.9% year-on-year, mainly influenced by increased revenue from nursing and health management services - Cost of sales and services increased by **1.9%** to **RMB 139.3 million**, mainly attributable to increased revenue from nursing and health management services `[33](index=33&type=chunk)` [Gross Profit and Gross Profit Margin](index=11&type=section&id=4.2.2%20毛利及毛利率) Gross profit decreased by 7.6%, and gross profit margin declined by 1.7 percentage points, primarily due to the higher proportion of medical service revenue and its reduced margin - Gross profit decreased by **7.6%** to **RMB 39.3 million** `[34](index=34&type=chunk)` - Gross profit margin decreased from **23.7%** to **22.0%**, mainly attributable to the higher proportion of medical service revenue, where the gross profit margin decreased compared to the same period last year `[34](index=34&type=chunk)` Gross Profit Margin by Segment (for the six months ended June 30) | Segment | 2025 Gross Profit Margin | 2024 Gross Profit Margin | | :--- | :--- | :--- | | Medical Services | 13.3% | 17.7% | | Nursing Services | 19.1% | 26.6% | | Health Management Services | 31.6% | 30.5% | [Expense Analysis](index=12&type=section&id=4.3%20費用分析) Selling and distribution, R&D, and administrative expenses all decreased, reflecting the company's continuous efforts in production control and organizational efficiency optimization [Selling and Distribution Expenses](index=12&type=section&id=4.3.1%20銷售及分銷開支) Selling and distribution expenses decreased by 17.0%, benefiting from strengthened production control and improved resource allocation efficiency - Selling and distribution expenses decreased by **17.0%** to **RMB 31.0 million**, mainly attributable to continuous strengthening of production control and ongoing improvement in resource allocation efficiency `[35](index=35&type=chunk)` [Research and Development Expenses](index=12&type=section&id=4.3.2%20研發開支) R&D expenses decreased by 8.0%, also benefiting from strengthened production control and improved resource allocation efficiency - Research and development expenses decreased by **8.0%** to **RMB 19.6 million**, mainly attributable to continuous strengthening of production control and ongoing improvement in resource allocation efficiency `[36](index=36&type=chunk)` [Administrative Expenses](index=12&type=section&id=4.3.3%20行政開支) Administrative expenses slightly decreased by 1.0%, primarily due to optimized organizational efficiency, leading to reduced personnel and related costs - Administrative expenses decreased by **1.0%** to **RMB 43.3 million**, mainly attributable to continuous optimization of organizational efficiency, resulting in reduced personnel and related costs `[37](index=37&type=chunk)` [Other Financial Items](index=12&type=section&id=4.4%20其他財務項目) Other income significantly decreased, net other gains substantially increased, net finance costs grew, share of loss of associates decreased, and income tax credit increased [Other Income](index=12&type=section&id=4.4.1%20其他收入) Other income significantly decreased by 74.3%, mainly due to reduced government grants and investment income from wealth management products - Other income decreased by **74.3%** to **RMB 3.3 million**, mainly attributable to reduced government grants and investment income from wealth management products `[38](index=38&type=chunk)` [Net Other Gains](index=12&type=section&id=4.4.2%20其他收益淨額) Net other gains significantly increased, primarily due to increased gains from the disposal of an associate - Net other gains increased from **RMB 0.4 million** to **RMB 4.9 million**, mainly due to increased gains from the disposal of an associate `[39](index=39&type=chunk)` [Finance Income and Costs](index=12&type=section&id=4.4.3%20融資收入及成本) Net finance costs (finance costs less finance income) increased by 12.2%, primarily due to a decrease in interest income - Net finance costs (finance costs less finance income) increased by **12.2%** to **RMB 6.2 million**, mainly attributable to a decrease in interest income `[40](index=40&type=chunk)` [Share of Loss of Associates](index=12&type=section&id=4.4.4%20聯營公司應佔虧損) Share of loss of associates decreased by 5.2%, primarily due to a reduction in the losses of associates - Share of loss of associates decreased by **5.2%** to **RMB 4.7 million**, mainly attributable to a decrease in the losses of associates `[41](index=41&type=chunk)` [Income Tax Credit](index=12&type=section&id=4.4.5%20所得稅抵免) Income tax credit increased, primarily due to an increase in deferred income tax credit - Income tax credit increased to **RMB 0.3 million**, mainly attributable to an increase in deferred income tax credit `[42](index=42&type=chunk)` [Loss for the Period and Adjusted Net Loss](index=13&type=section&id=4.5%20期內虧損與經調整淨虧損) Loss for the period decreased by 17.4% year-on-year, and adjusted net loss decreased by 25.1%, driven by nursing business scale, improved efficiency, AI empowerment, and reduced impairment losses - Loss for the period decreased by **17.4%** from **RMB 60.5 million** to **RMB 50.0 million** `[43](index=43&type=chunk)` - Adjusted net loss (a non-HKFRS measure) decreased by **25.1%** to **RMB 38.4 million** `[46](index=46&type=chunk)` - The decrease in adjusted net loss was mainly attributable to the scale effect of the nursing business, improved organizational efficiency, AI empowerment enhancing operational efficiency, and a decrease in net impairment losses on financial assets `[46](index=46&type=chunk)` [Financial Position and Liquidity](index=14&type=section&id=財務狀況與流動性) [Contingent Liabilities and Capital Expenditures](index=14&type=section&id=5.1%20或有負債與資本開支) As of the end of the reporting period, the company had no significant contingent liabilities, and capital expenditures were primarily for property, plant, and equipment - As of June 30, 2025, the Group had no significant contingent liabilities `[48](index=48&type=chunk)` - During the reporting period, capital expenditures of **RMB 4.1 million** were mainly used for the purchase of property, plant, and equipment `[49](index=49&type=chunk)` [Pledge of Assets and Future Investment Plans](index=14&type=section&id=5.2%20資產質押與未來投資計劃) The company had no pledged assets as of the reporting period, and future major investment plans are related to the use of proceeds from the global offering - As of June 30, 2025, the Group had no pledged assets `[50](index=50&type=chunk)` - Except for the use of proceeds from the global offering, as of June 30, 2025, the Group had no other plans for significant investments or capital assets `[51](index=51&type=chunk)` [Liquidity and Capital Resources](index=14&type=section&id=5.3%20流動資金及資本資源) The company primarily funds operations through bank borrowings and equity financing, with cash and cash equivalents of RMB 490.8 million, and expects to utilize global offering proceeds - As of June 30, 2025, cash and cash equivalents amounted to **RMB 490.8 million** `[52](index=52&type=chunk)` - It is expected that part of the proceeds from the global offering will be used to fund working capital requirements `[52](index=52&type=chunk)` [Cash Flow Analysis](index=15&type=section&id=5.4%20現金流量分析) During the reporting period, net decrease in cash and cash equivalents was RMB 268.3 million, with decreased net cash used in operating activities, significantly increased net cash used in investing activities, and increased net cash used in financing activities Cash Flow (for the six months ended June 30) | Metric | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Net cash used in operating activities | (49,961) | (64,306) | | Net cash used in investing activities | (147,517) | (6,519) | | Net cash used in financing activities | (70,843) | (33,783) | | Net decrease in cash and cash equivalents | (268,321) | (104,608) | | Cash and cash equivalents at end of period | 490,789 | 575,930 | [Operating Cash Flow](index=15&type=section&id=5.4.1%20經營活動現金流) Net cash used in operating activities was RMB 50.0 million, reflecting cash used in operations and other cash item changes - Net cash used in operating activities was **RMB 50.0 million** `[54](index=54&type=chunk)` [Investing Cash Flow](index=15&type=section&id=5.4.2%20投資活動現金流) Net cash used in investing activities significantly increased to RMB 147.5 million, primarily due to subscriptions for wealth management products - Net cash used in investing activities was **RMB 147.5 million**, mainly attributable to subscriptions for wealth management products of **RMB 395.0 million**, partially offset by redemptions of wealth management products of **RMB 251.4 million** `[55](index=55&type=chunk)` [Financing Cash Flow](index=15&type=section&id=5.4.3%20融資活動現金流) Net cash used in financing activities was RMB 70.8 million, primarily due to repayment of borrowings - Net cash used in financing activities was **RMB 70.8 million**, mainly attributable to repayment of borrowings of **RMB 290.8 million**, partially offset by proceeds from bank borrowings of **RMB 244.0 million** `[56](index=56&type=chunk)` [Borrowings](index=15&type=section&id=5.5%20借款情況) As of the reporting period, total principal balance of borrowings was RMB 463.1 million, with RMB 30.7 million in undrawn bank facilities, and most borrowings maturing by June 2026 - As of June 30, 2025, the total principal balance of borrowings was **RMB 463.1 million** `[57](index=57&type=chunk)` - As of June 30, 2025, bank facilities of **RMB 30.7 million** remained undrawn `[57](index=57&type=chunk)` [Significant Investments and Capital Commitments](index=16&type=section&id=重大投資與資本承擔) [Significant Investments Held](index=16&type=section&id=6.1%20持有的重大投資) The company holds significant investments in Neusoft Management Consulting (Shanghai) Co., Ltd. and wealth management products to enhance capital efficiency and generate synergies Significant Investment Details (as of June 30, 2025) | Investee Company Name | Main Business | Investment Cost (RMB thousand) | Shareholding Percentage | Carrying Amount (RMB thousand) | Percentage of Total Group Assets | Share of Loss of Associates (RMB thousand) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Neusoft Management Consulting (Shanghai) Co., Ltd. | Enterprise consulting services, including medical equipment | 96,436 | 49.00% | 85,330 | 7.68% | (1,190) | - As of June 30, 2025, the Group held wealth management products amounting to **USD 20.1 million**, with a fair value of **USD 20.2 million**, representing **13.0%** of the Group's total assets `[59](index=59&type=chunk)` [Capital Commitments](index=16&type=section&id=6.2%20資本承擔) As of the end of the reporting period, the company had no significant capital commitments - As of June 30, 2025, the Group had no significant capital commitments `[60](index=60&type=chunk)` [Significant Acquisitions and Disposals of Subsidiaries, Associates, and Joint Ventures](index=17&type=section&id=6.3%20附屬公司、聯營公司及合資企業的重大收購及出售) The company completed a partial equity transfer and capital increase in Dalian Yunshe, reducing its shareholding and reclassifying it as an equity investment at fair value through other comprehensive income - Xikang Health Technology, a wholly-owned subsidiary of the Company, sold **RMB 32,757,364** of Dalian Yunshe's registered capital, representing approximately **4.23%** of Dalian Yunshe's total share capital, for a consideration of **RMB 30 million** `[61](index=61&type=chunk)` - Following the equity transfer and capital increase arrangements, the Company holds **RMB 58,982,636** of Dalian Yunshe's registered capital, representing approximately **7.15%** of Dalian Yunshe's total share capital `[61](index=61&type=chunk)` - The Group's equity interest in Dalian Yunshe has been reclassified as an equity investment designated at fair value through other comprehensive income `[104](index=104&type=chunk)` [Risk Management](index=17&type=section&id=風險管理) [Foreign Exchange Risk](index=17&type=section&id=7.1%20外匯風險) The company primarily operates in China with most transactions settled in RMB, and management believes there are no significant foreign exchange risks - The functional currencies of the Company and its subsidiaries operating in China are USD and RMB, respectively, with most transactions settled in RMB `[63](index=63&type=chunk)` - Management believes that the Company's business does not face any significant foreign exchange risk `[63](index=63&type=chunk)` [Gearing Ratio](index=17&type=section&id=7.2%20資本負債比率) As of June 30, 2025, the Group's gearing ratio was 9.3% - As of June 30, 2025, the Group's gearing ratio was **9.3%** `[64](index=64&type=chunk)` [Cash Flow and Fair Value Interest Rate Risk](index=17&type=section&id=7.3%20現金流量及公允價值利率風險) The company's revenue and operating cash flows are largely unaffected by market interest rate changes - Revenue and operating cash flows are largely unaffected by market interest rate changes, and there are no significant interest-bearing assets other than investments in wealth management products `[65](index=65&type=chunk)` [Corporate Governance and Other Information](index=18&type=section&id=公司治理與其他信息) [Purchase, Sale or Redemption of the Company's Listed Securities](index=18&type=section&id=8.1%20購買、出售或贖回本公司上市證券) During the reporting period, neither the company nor its subsidiaries purchased, sold, or redeemed any of its listed securities on the Stock Exchange - During the reporting period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's securities listed on The Stock Exchange of Hong Kong Limited `[66](index=66&type=chunk)` [Employees and Remuneration Policy](index=18&type=section&id=8.2%20僱員及薪酬政策) As of June 30, 2025, the company had 834 full-time employees, with staff costs of RMB 74.9 million, and is committed to a competitive and fair remuneration system with comprehensive benefits and training - As of June 30, 2025, the Company had **834** full-time employees `[67](index=67&type=chunk)` Employee Functional Distribution (as of June 30, 2025) | Function | Number of Employees | Percentage of Total | | :--- | :--- | :--- | | Management and Administration | 138 | 16.5% | | Sales, Marketing, and Operations Support | 204 | 24.5% | | Research and Development | 151 | 18.1% | | Health Management | 341 | 40.9% | | **Total** | **834** | **100.0%** | - Staff costs paid to employees amounted to **RMB 74.9 million** (for the six months ended June 30, 2024: RMB 86.6 million) `[67](index=67&type=chunk)` [Events After Reporting Period](index=19&type=section&id=8.3%20報告期後事項) After the reporting period, the company granted 28,990,000 share options to 236 eligible participants on July 21, 2025 - Pursuant to the Post-IPO Share Option Scheme, the Company granted a total of **28,990,000 share options** to **236 eligible participants** on July 21, 2025 `[69](index=69&type=chunk)` [Compliance with Corporate Governance Code](index=19&type=section&id=8.4%20遵守《企業管治守則》) The company has complied with the code provisions of the Corporate Governance Code throughout the reporting period and up to the date of this announcement - The Company has complied with the code provisions of the Corporate Governance Code throughout the reporting period and up to the date of this results announcement `[72](index=72&type=chunk)` [Use of Proceeds from Global Offering](index=19&type=section&id=8.5%20全球發售所得款項用途) Net proceeds from the global offering were approximately HKD 554.5 million, primarily for expanding the cloud hospital platform, enriching products, R&D, potential M&A, and working capital, with some idle funds used for wealth management products - The net proceeds from the global offering were approximately **HKD 554.5 million** (assuming the over-allotment option was not exercised) `[73](index=73&type=chunk)` Use of Proceeds from Global Offering (as of June 30, 2025) | Use of Proceeds | Percentage of Proceeds | Net Proceeds (HKD million) | Unused Amount as of Jan 1, 2025 (HKD million) | Amount Used for the Six Months Ended June 30, 2025 (HKD million) | Unused Amount as of June 30, 2025 (HKD million) | Expected Timeline | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Expand city-entry cloud hospital platform to enlarge medical network and user base | 30% | 166.3 | 150.1 | 13.9 | 136.2 | By December 31, 2028 | | Enrich products across the industry value chain to provide more professional and diverse healthcare services | 25% | 138.6 | 128.5 | 6.4 | 122.1 | By December 31, 2028 | | R&D of technology infrastructure and data processing capabilities | 25% | 138.6 | 117.7 | 19.7 | 98.0 | By December 31, 2028 | | Potential M&A opportunities | 10% | 55.5 | 55.5 | 0.0 | 55.5 | By December 31, 2028 | | Working capital and other general corporate purposes | 10% | 55.5 | 44.7 | 7.7 | 37.0 | By December 31, 2028 | - Intends to use idle proceeds of no more than **USD 40 million** to purchase highly secure, liquid, and redeemable wealth management products for cash management `[74](index=74&type=chunk)` [Interim Dividend](index=21&type=section&id=8.6%20中期股息) The Board of Directors resolved not to declare an interim dividend for the six months ended June 30, 2025 - The Board of Directors has resolved not to declare an interim dividend for the six months ended June 30, 2025 `[76](index=76&type=chunk)` [Compliance with Model Code](index=21&type=section&id=8.7%20遵守《標準守則》) All Directors confirmed full compliance with the Model Code for Securities Transactions by Directors of Listed Issuers during the reporting period and up to the date of the results announcement - Following specific enquiries made to all Directors, all Directors confirmed that they had fully complied with all relevant requirements set out in the Model Code throughout the reporting period and up to the date of this results announcement `[77](index=77&type=chunk)` [Auditor's Scope of Work and Audit Committee](index=21&type=section&id=8.8%20核數師的工作範圍與審計委員會) The Group's interim condensed consolidated financial statements have been agreed by Ernst & Young to match the unaudited interim financial statements and reviewed by the Audit Committee - The figures in the Group's interim condensed consolidated statement of financial position, interim condensed consolidated statement of profit or loss and other comprehensive income, and related notes for the six months ended June 30, 2025, as set out in this results announcement, have been agreed by Ernst & Young, the Group's auditor, to be consistent with the amounts set out in the Group's unaudited interim financial statements `[78](index=78&type=chunk)` - The Company's Audit Committee has reviewed the Company's interim results for the six months ended June 30, 2025 `[79](index=79&type=chunk)` [Notes to the Interim Condensed Consolidated Financial Statements](index=26&type=section&id=中期簡明綜合財務報表附註) [General Information](index=26&type=section&id=9.1%20一般資料) Xikang Cloud Hospital Holdings Inc., incorporated in the Cayman Islands on May 12, 2011, primarily provides medical, nursing, and health management services in China - Xikang Cloud Hospital Holdings Inc. was incorporated as an exempted company in the Cayman Islands on May 12, 2011, under the Companies Act of the Cayman Islands `[84](index=84&type=chunk)` - The Group is principally engaged in providing medical services, nursing services, and health management services in the People's Republic of China `[84](index=84&type=chunk)` [Basis of Preparation and Significant Accounting Policies](index=26&type=section&id=9.2%20擬備基準與重要會計政策) The interim condensed consolidated financial information is prepared under HKAS 34, with newly adopted HKFRS amendments having no significant impact on financial information - The interim condensed consolidated financial information for the six months ended June 30, 2025, has been prepared in accordance with **Hong Kong Accounting Standard 34 "Interim Financial Reporting"** `[85](index=85&type=chunk)` - The revised Hong Kong Financial Reporting Standards accounting standards were adopted for the first time in this period's financial information, but these amendments had no impact on the interim condensed consolidated financial information `[86](index=86&type=chunk)[87](index=87&type=chunk)` [Operating Segment Information](index=27&type=section&id=9.3%20經營分部資料) This section provides detailed revenue, cost of sales, and gross profit data for the three operating segments: medical, nursing, and health management services, reflecting their profitability Operating Segment Gross Profit (for the six months ended June 30) | Segment | 2025 Gross Profit (RMB thousand) | 2024 Gross Profit (RMB thousand) | | :--- | :--- | :--- | | Medical Services | 9,306 | 15,536 | | Nursing Services | 6,601 | 6,523 | | Health Management Services | 23,406 | 20,497 | | **Total** | **39,313** | **42,556** | [Revenue and Other Income](index=28&type=section&id=9.4%20收入及其他收入) This section details the classification of customer contract revenue (by geographical market and timing of recognition) and the composition of other income, including government grants and wealth management investment returns Disaggregated Revenue from Contracts with Customers (for the six months ended June 30, 2025) | Segment | Mainland China (RMB thousand) | Recognized at a point in time (RMB thousand) | Recognized over time (RMB thousand) | Total (RMB thousand) | | :--- | :--- | :--- | :--- | :--- | | Medical Services | 69,827 | 67,210 | 2,617 | 69,827 | | Nursing Services | 34,624 | 34,500 | 124 | 34,624 | | Health Management Services | 74,154 | 74,009 | 145 | 74,154 | | **Total** | **178,605** | **175,719** | **2,886** | **178,605** | Other Income Components (for the six months ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Government grants | 1,620 | 7,732 | | Investment return from wealth management products | 1,568 | 4,872 | | VAT refunds and VAT reductions | – | 127 | | Service fee refunds for withheld individual income tax | 105 | 91 | | Other items | – | 9 | | **Total** | **3,293** | **12,831** | [Loss Before Tax](index=29&type=section&id=9.5%20稅前虧損) This section lists the main expenses and gains contributing to the loss before tax, including cost of sales, depreciation, amortization, employee benefit expenses, and net impairment of financial and contract assets Key Components of Loss Before Tax (for the six months ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Cost of sales of hardware, software, raw materials, etc. | 108,619 | 110,765 | | Depreciation of property, plant and equipment | 4,222 | 4,046 | | Depreciation of right-of-use assets | 10,442 | 10,824 | | Amortization of intangible assets | 313 | 344 | | Total employee benefit expenses | 86,439 | 95,763 | | Net impairment (reversal) / impairment of financial and contract assets | (7,781) | 3,619 | [Finance Income and Costs](index=30&type=section&id=9.6%20融資收入及成本) This section analyzes the company's finance income and costs, primarily comprising interest income, interest on bank borrowings, and interest on lease liabilities Finance Income and Costs Analysis (for the six months ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Finance income: Interest income | 5,715 | 8,498 | | Finance costs: Interest on bank borrowings | (10,506) | (11,945) | | Finance costs: Interest on lease liabilities | (1,427) | (2,080) | | Finance costs: Interest on long-term payables | – | (16) | | **Total Finance Costs** | **(11,933)** | **(14,041)** | [Income Tax](index=30&type=section&id=9.7%20所得稅) This section explains the company's income tax rates in Mainland China (including preferential rates for high-tech enterprises) and the specific components of income tax credit - In Mainland China, the Company is subject to a **25%** PRC enterprise income tax rate, but one Chinese subsidiary enjoys a **15%** preferential tax rate as a recognized high-tech enterprise `[95](index=95&type=chunk)` Income Tax Credit Analysis (for the six months ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Current - PRC expense for the period | 1,028 | 306 | | Underprovision in prior periods | 261 | 16 | | Deferred | (1,606) | (465) | | **Total Income Tax Credit** | **(317)** | **(143)** | [Loss Per Share Attributable to Ordinary Equity Holders of the Parent Company](index=31&type=section&id=9.8%20母公司普通股權益持有人應佔每股虧損) This section provides details on the calculation of basic and diluted loss per share attributable to ordinary equity holders of the parent company - Basic and diluted loss per share was **RMB (0.06)** (2024: RMB (0.07)) `[81](index=81&type=chunk)[99](index=99&type=chunk)` - The weighted average number of ordinary shares outstanding during the period was **841,876,805** shares `[99](index=99&type=chunk)` [Property, Plant and Equipment](index=31&type=section&id=9.9%20物業、廠房及設備) This section discloses the acquisitions and disposals of property, plant, and equipment during the reporting period - For the six months ended June 30, 2025, the Group acquired assets with a total cost of **RMB 1,201,000** and disposed of assets with a total carrying amount of **RMB 593,000** `[101](index=101&type=chunk)` [Right-of-Use Assets](index=31&type=section&id=9.10%20使用權資產) This section discloses the acquisitions and partial or full terminations of right-of-use assets during the reporting period - For the six months ended June 30, 2025, the Group acquired assets with a total cost of **RMB 5,426,000** and partially or fully terminated assets with a total carrying amount of **RMB 2,243,000**, resulting in a net gain of **RMB 103,000** `[102](index=102&type=chunk)` [Investments in Associates](index=31&type=section&id=9.11%20投資聯營公司) This section details the opening and closing balances and changes in investments in associates, including the disposal of a partial equity interest in Dalian Yunshe and its accounting treatment change Changes in Investments in Associates (RMB thousand) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Opening balance | 169,559 | 186,993 | | Share of loss of associates | (4,670) | (17,434) | | Disposal of partial equity interest in an associate | (79,559) | – | | **Closing balance** | **85,330** | **169,559** | - The Group's shareholding in Dalian Yunshe decreased from approximately **11.83%** to **7.15%** and has been reclassified as an equity investment designated at fair value through other comprehensive income `[104](index=104&type=chunk)` [Long-term Trade Receivables](index=32&type=section&id=9.12%20長期貿易應收款項) This section provides the net carrying amount and aging analysis of long-term trade receivables, primarily related to smart healthcare product sales contracts - The net carrying amount of long-term trade receivables was **RMB 3,314 thousand** `[105](index=105&type=chunk)[106](index=106&type=chunk)` - The total consideration for long-term trade receivables will be collected within **13 months to 10 years** `[105](index=105&type=chunk)` [Trade Receivables](index=33&type=section&id=9.13%20貿易應收款項) This section details the net carrying amount, impairment reversal, aging distribution, and amounts due from related parties for trade receivables - The net carrying amount of trade receivables was **RMB 87,799 thousand**, with an impairment reversal of **RMB 11,144 thousand** `[107](index=107&type=chunk)[110](index=110&type=chunk)` - Trade receivables include amounts due from related parties of the Group totaling **RMB 5,429 thousand** `[108](index=108&type=chunk)` [Trade Payables](index=34&type=section&id=9.14%20貿易應付款項) This section provides the total amount and aging analysis of trade payables - Total trade payables amounted to **RMB 162,721 thousand** `[111](index=111&type=chunk)` [Dividends](index=34&type=section&id=9.15%20股息) The Board of Directors resolved not to declare an interim dividend for the six months ended June 30, 2025 - The Board of Directors of the Company resolved not to declare an interim dividend for the six months ended June 30, 2025 `[112](index=112&type=chunk)`

Summary Trigiant Group Limited's H1 2025 interim results show 6.6% revenue growth, a 1.0 percentage point gross margin decline to 11.3%, a 38.9% profit decrease, and no interim dividend H1 2025 vs. H1 2024 Performance Comparison | Metric | H1 2025 (RMB) | H1 2024 (RMB) | Change (RMB) | Change Rate | | :--- | :--- | :--- | :--- | :--- | | Revenue | 1,235.6 million | 1,159.0 million | Increase 76.6 million | 6.6% | | Gross Margin | 11.3% | 12.3% | Decrease 1.0 percentage point | - | | Profit for the Period | 25.0 million | 40.9 million | Decrease 15.9 million | -38.9% | | Net Profit Margin | 2.0% | 3.5% | Decrease 1.5 percentage points | - | | EPS | 1.40 fen | 2.28 fen | Decrease 0.88 fen | - | | Interim Dividend | Not Recommended | N/A | - | - | [Condensed Consolidated Financial Statements](index=2&type=section&id=Condensed%20Consolidated%20Financial%20Statements) This section provides the condensed consolidated financial statements, detailing the company's financial performance and position for the reporting period [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 grew, but gross profit declined, and profit for the period significantly decreased to RMB 24,955 thousand, impacted by lower other income and increased credit losses Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (Thousand RMB) | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Revenue | 1,235,594 | 1,159,039 | | Cost of Sales | (1,095,888) | (1,016,820) | | Gross Profit | 139,706 | 142,219 | | Other Income | 4,281 | 16,482 | | Impairment Losses under ECL Model | (17,822) | (7,493) | | Profit Before Tax | 30,775 | 50,738 | | Income Tax Expense | (5,820) | (9,862) | | Profit for the Period | 24,955 | 40,876 | | Basic EPS | RMB 1.40 fen | RMB 2.28 fen | [Condensed Consolidated Statement of Financial Position](index=3&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, non-current assets slightly decreased, current assets increased, current borrowings rose, non-current borrowings significantly decreased, and both net assets and total equity grew Condensed Consolidated Statement of Financial Position (Thousand RMB) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Non-current Assets** | | | | Property, Plant and Equipment | 135,271 | 140,915 | | Deferred Tax Assets | 160,939 | 158,233 | | **Current Assets** | | | | Trade and Other Receivables | 4,091,350 | 4,111,480 | | Bank Balances and Cash | 554,701 | 464,418 | | **Current Liabilities** | | | | Trade and Other Payables | 158,041 | 146,669 | | Borrowings | 1,491,018 | 1,418,327 | | **Non-current Liabilities** | | | | Borrowings | – | 61,000 | | **Net Assets** | 3,533,584 | 3,512,902 | | **Total Equity** | 3,533,584 | 3,512,902 | [Notes](index=4&type=section&id=Notes) This section provides detailed notes to the condensed consolidated financial statements, covering accounting policies, segment information, income, expenses, and financial position items [Basis of Preparation](index=4&type=section&id=Basis%20of%20Preparation) The condensed consolidated financial statements are prepared in accordance with HKAS 34 'Interim Financial Reporting' and applicable Listing Rules disclosure requirements - Financial statements are prepared in accordance with HKAS 34 and the Listing Rules[6](index=6&type=chunk) [Principal Accounting Policies](index=4&type=section&id=Principal%20Accounting%20Policies) The condensed consolidated financial statements are prepared on a historical cost basis, with accounting policies consistent with the 2024 annual financial statements, and HKFRS amendments had no significant impact - Accounting policies are consistent with the 2024 annual financial statements, prepared principally on a historical cost basis[7](index=7&type=chunk) - The application of amendments to HKFRS accounting standards (HKAS 21 (Amendment) Lack of Exchangeability) had no significant impact on the financial position and performance for the current and prior periods[8](index=8&type=chunk) [Revenue and Segment Information](index=5&type=section&id=Revenue%20and%20Segment%20Information) The Group manufactures and sells mobile communication and telecommunication transmission products, recognizing revenue upon transfer of control, with reportable segments categorized by product type - The principal business involves the manufacture and sale of mobile communication and telecommunication transmission products, with revenue recognized when control of goods is transferred[9](index=9&type=chunk) - The chief operating decision maker identifies reportable segments by product, including feeder cable series, flame retardant soft cable series, optical cable series and related products, new electronic components, and others[10](index=10&type=chunk)[12](index=12&type=chunk) [Segment Revenue and Results Analysis](index=6&type=section&id=Segment%20Revenue%20and%20Results%20Analysis) H1 2025 saw increased external sales for flame retardant soft cables and optical cables, offset by declines in feeder cables and new electronic components, leading to a slight overall segment result decrease H1 2025 Revenue and Results by Reportable Segment (Thousand RMB) | Segment | External Sales | Segment Results | | :--- | :--- | :--- | | Feeder Cable Series | 511,628 | 60,343 | | Flame Retardant Soft Cable Series | 570,640 | 56,672 | | Optical Cable Series and Related Products | 98,764 | 13,290 | | New Electronic Components | 52,761 | 9,068 | | Others | 1,801 | 333 | | **Total** | **1,235,594** | **139,706** | H1 2024 Revenue and Results by Reportable Segment (Thousand RMB) | Segment | External Sales | Segment Results | | :--- | :--- | :--- | | Feeder Cable Series | 542,802 | 67,763 | | Flame Retardant Soft Cable Series | 462,293 | 45,861 | | Optical Cable Series and Related Products | 84,713 | 12,422 | | New Electronic Components | 55,312 | 9,810 | | Others | 13,919 | 6,363 | | **Total** | **1,159,039** | **142,219** | [Geographical Information](index=7&type=section&id=Geographical%20Information) The Group's predominant revenue and non-current assets are derived from and located within the People's Republic of China - The vast majority of revenue and non-current assets are derived from China[16](index=16&type=chunk) [Other Income](index=8&type=section&id=Other%20Income) Other income for H1 2025 significantly decreased by 74.0% to RMB 4,281 thousand, primarily due to the cessation of VAT credit benefits and reduced interest income Other Income (Thousand RMB) | Item | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Government Subsidies | 1,322 | 1,639 | | Interest Income | 2,445 | 4,972 | | VAT Credit Benefits | – | 9,356 | | Others | 514 | 515 | | **Total** | **4,281** | **16,482** | - Other income decreased by **74.0%** year-on-year, mainly due to the cessation of VAT credit benefits and a decline in interest income[17](index=17&type=chunk) [Impairment Losses under Expected Credit Loss Model](index=8&type=section&id=Impairment%20Losses%20under%20Expected%20Credit%20Loss%20Model) Impairment losses on trade receivables for H1 2025 increased by 137.8% to RMB 17,822 thousand, reflecting higher credit risk Impairment Losses on Trade Receivables (Thousand RMB) | Item | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Impairment Losses on Trade Receivables | (17,822) | (7,493) | - Impairment losses on trade receivables increased by **137.8%** year-on-year to **RMB 17,822 thousand**[18](index=18&type=chunk) [Profit Before Tax](index=9&type=section&id=Profit%20Before%20Tax) Profit before tax for H1 2025 was RMB 30,775 thousand, a decrease from RMB 50,738 thousand in the prior year, influenced by inventory costs, depreciation, exchange losses, and impairment losses Components of Profit Before Tax (Thousand RMB) | Item | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Cost of Inventories Recognized as an Expense | 1,094,758 | 1,013,872 | | Depreciation of Property, Plant and Equipment (Net) | 2,433 | 3,462 | | Exchange (Losses) Gains | (406) | 496 | | Profit Before Tax | 30,775 | 50,738 | [Income Tax Expense](index=9&type=section&id=Income%20Tax%20Expense) Income tax expense for H1 2025 decreased by 41.0% to RMB 5,820 thousand, mainly due to increased deferred tax credits related to impairment losses on trade receivables, with some PRC subsidiaries enjoying a 15% preferential income tax rate as high-tech enterprises Income Tax Expense (Thousand RMB) | Item | H1 2025 | H1 2024 | | :--- | :--- | :--- | | PRC Enterprise Income Tax | 7,977 | 9,487 | | Deferred Tax (Credit) / Expense | (2,157) | 375 | | **Income Tax Expense for the Period** | **5,820** | **9,862** | - Trigiant Technology, Trigiant Optic-electronic, and Trigiant Sensor are recognized as high-tech enterprises, enjoying a **15%** preferential PRC income tax rate[21](index=21&type=chunk) - Deferred tax liabilities for undistributed earnings of PRC subsidiaries are accrued at a **10%** withholding tax rate[22](index=22&type=chunk) [Dividends](index=10&type=section&id=Dividends) The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025, consistent with the prior corresponding period - The Board does not recommend the payment of an interim dividend for H1 2025[23](index=23&type=chunk) [Earnings Per Share](index=10&type=section&id=Earnings%20Per%20Share) Basic earnings per share for H1 2025 was RMB 1.40 fen, a decrease from RMB 2.28 fen in the prior year, primarily due to reduced profit for the period Earnings Per Share Calculation (Thousand RMB) | Item | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Profit for the Period Attributable to Owners of the Company for Basic EPS | 24,955 | 40,876 | | Number of Shares (Thousands) | 1,782,000 | 1,793,000 | | Basic EPS | RMB 1.40 fen | RMB 2.28 fen | - Diluted earnings per share is not presented as there were no issued potential ordinary shares for both periods[24](index=24&type=chunk) [Trade and Other Receivables](index=11&type=section&id=Trade%20and%20Other%20Receivables) As of June 30, 2025, total trade and other receivables were RMB 4,091,350 thousand, slightly lower than year-end 2024, with increased credit loss provisions for trade receivables and a high proportion of balances over 365 days, indicating long-term receivable risk Trade and Other Receivables Analysis (Thousand RMB) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Trade Receivables from Customer Contracts | 5,175,671 | 5,177,196 | | Less: Provision for Credit Losses | (1,091,820) | (1,073,998) | | **Net Trade Receivables** | **4,083,851** | **4,103,198** | | Ageing of Trade Receivables (Over 365 Days) | 2,147,110 | 2,225,292 | | Total Trade and Other Receivables | 4,091,350 | 4,111,480 | - The Group generally grants credit terms of **180 to 360 days** to its customers[25](index=25&type=chunk) [Trade and Other Payables](index=12&type=section&id=Trade%20and%20Other%20Payables) As of June 30, 2025, total trade and other payables were RMB 158,041 thousand, an increase from year-end 2024, with trade payables primarily concentrated in the 0 to 90-day ageing bracket, indicating shorter supplier credit terms Trade and Other Payables Analysis (Thousand RMB) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Trade Payables (0 to 90 Days) | 85,994 | 77,602 | | Total Trade Payables | 101,278 | 91,446 | | Accrued Expenses | 13,468 | 12,260 | | Deposits from Suppliers | 14,234 | 13,159 | | Other Payables | 10,075 | 9,909 | | Other Tax Payables | 6,890 | 3,044 | | Salaries and Welfare Payables | 11,871 | 16,753 | | **Total** | **158,041** | **146,669** | - The Group typically obtains credit terms of **30 to 90 days** from its suppliers[27](index=27&type=chunk) [Management Discussion and Analysis](index=13&type=section&id=Management%20Discussion%20and%20Analysis) This section provides an overview of the Group's market performance, operational results, strategic initiatives, and financial position for the reporting period [Market Review](index=13&type=section&id=Market%20Review) In H1 2025, despite global economic challenges, China's economy showed resilience with 5.3% GDP growth, driving demand for communication equipment through accelerated 5G and AI investments, with the Group actively deploying 5G small cell transmission solutions and securing multiple centralized procurement projects - In H1 2025, China's GDP grew by **5.3%**, exceeding the annual target of **5%**, with deepening digital economy development[28](index=28&type=chunk)[29](index=29&type=chunk) - As of end-June 2025, China's total **5G base stations reached 4.55 million**, with **5G mobile phone users at 1.118 billion**, and a penetration rate exceeding **79%**[30](index=30&type=chunk) - **5G-Advanced (5G-A)** entered large-scale deployment, with over **300 cities** covered by 5G-A networks and over **10 million users**[29](index=29&type=chunk) - The Group launched several millimeter-wave new products, including **37–42 GHz phase shifters** and **40–50 GHz quadruplers**, solidifying its technological leadership[32](index=32&type=chunk) - The low-altitude logistics market is projected to reach **RMB 120 billion to RMB 150 billion** by 2025, and the Group will continue to monitor and explore business opportunities[33](index=33&type=chunk) - The Group secured multiple centralized procurement projects, including China Unicom optical cables, China Mobile optical splitters, feeder connectors and bundled jumpers, feeder products, and China Tower power cables (copper cables)[34](index=34&type=chunk)[35](index=35&type=chunk) [Performance Analysis](index=15&type=section&id=Performance%20Analysis) In H1 2025, the Group's revenue increased by 6.6% year-on-year to RMB 1,235.6 million, driven by growth in flame retardant soft cable and optical cable series, however, profit for the period decreased by 38.9% to RMB 25.0 million, and EPS fell to RMB 1.40 fen - In H1 2025, revenue increased by **6.6%** to **RMB 1,235.6 million**[36](index=36&type=chunk) - Profit for the period decreased by **38.9%** to **RMB 25.0 million**, and EPS fell to **RMB 1.40 fen**[36](index=36&type=chunk) [Revenue by Product Type](index=15&type=section&id=Revenue%20by%20Product%20Type) Revenue from flame retardant soft cable series and optical cable series and related products grew by 23.4% and 16.6% respectively, offsetting declines in feeder cable series, new electronic components, and other accessories Revenue by Product Type (Thousand RMB) | Product Series | H1 2025 | H1 2024 | Year-on-Year Change (Thousand RMB) | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | :--- | | Feeder Cable Series | 511,628 | 542,802 | (31,174) | –5.7% | | Flame Retardant Soft Cable Series | 570,640 | 462,293 | 108,347 | 23.4% | | Optical Cable Series and Related Products | 98,764 | 84,713 | 14,051 | 16.6% | | New Electronic Components | 52,761 | 55,312 | (2,551) | –4.6% | | Other Accessories | 1,801 | 13,919 | (12,118) | –87.1% | | **Total** | **1,235,594** | **1,159,039** | **76,555** | **6.6%** | [Feeder Cable Series](index=15&type=section&id=Feeder%20Cable%20Series) Revenue from feeder cable series decreased by 5.7% year-on-year to RMB 511.6 million, accounting for approximately 41.4% of total revenue, with sales volume declining and gross margin falling by 0.7 percentage points to 11.8% due to telecom operators' capital expenditure controls - Revenue from feeder cable series decreased by **5.7%** year-on-year to **RMB 511.6 million**, accounting for approximately **41.4%** of total revenue[38](index=38&type=chunk) - Sales volume decreased by approximately **2,300 kilometers** to approximately **42,600 kilometers**[38](index=38&type=chunk) - Gross margin decreased by approximately **0.7 percentage points** to approximately **11.8%**, affected by global telecom operators' capital expenditure controls[38](index=38&type=chunk) [Flame Retardant Soft Cable Series](index=16&type=section&id=Flame%20Retardant%20Soft%20Cable%20Series) Revenue from flame retardant soft cable series increased by 23.4% year-on-year to RMB 570.6 million, representing approximately 46.2% of total revenue, with gross margin maintained at approximately 9.9% - Revenue from flame retardant soft cable series increased by **23.4%** year-on-year to **RMB 570.6 million**, accounting for approximately **46.2%** of total revenue[39](index=39&type=chunk) - Gross margin remained at approximately **9.9%**[39](index=39&type=chunk) [Optical Cable Series and Related Products](index=16&type=section&id=Optical%20Cable%20Series%20and%20Related%20Products) Revenue from optical cable series and related products increased by 16.6% year-on-year to RMB 98.8 million, accounting for approximately 8.0% of total revenue, with sales volume increasing but gross margin declining by 1.2 percentage points to 13.5% due to product mix changes - Revenue from optical cable series and related products increased by **16.6%** year-on-year to **RMB 98.8 million**, accounting for approximately **8.0%** of total revenue[40](index=40&type=chunk) - Optical cable sales volume increased by approximately **922,000 core kilometers** to approximately **2,496,000 core kilometers**[40](index=40&type=chunk) - Gross margin decreased by approximately **1.2 percentage points** to approximately **13.5%**, primarily due to changes in product mix[40](index=40&type=chunk) [Major Customers and Sales Network](index=16&type=section&id=Major%20Customers%20and%20Sales%20Network) The Group is a major supplier to China's three largest telecom operators (China Mobile, China Unicom, China Telecom) and telecom equipment manufacturers, with H1 2025 revenue from China Mobile, China Unicom, and China Telecom accounting for 47.5%, 22.8%, and 18.5% of total revenue, respectively - Major customers include China's three largest telecom operators (China Mobile, China Unicom, China Telecom) and telecom equipment manufacturers such as ZTE and Huawei[41](index=41&type=chunk) Major Customers Revenue Contribution (H1 2025) | Customer | Revenue Contribution | | :--- | :--- | | China Mobile | Approx. 47.5% | | China Unicom | Approx. 22.8% | | China Telecom | Approx. 18.5% | - Supplied to **31 provincial subsidiaries** of China Tower[41](index=41&type=chunk) [Market Strategy](index=17&type=section&id=Market%20Strategy) The Group's market strategy involves leveraging financing cost advantages, actively supporting China's telecom industry development, focusing on R&D in telecom business, and building customer trust through quality, while prudently managing overseas receivables and planning to expand sales channels in the 5G era - Market strategy includes leveraging financing cost advantages, supporting China's telecom industry development, focusing on R&D in telecom business, and winning customer trust through quality[42](index=42&type=chunk) - Approximately **90%** of annual sales come from China's three major telecom operators and China Tower[42](index=42&type=chunk) - Generally grants credit terms of **180 to 360 days** to customers, leading to longer accounts receivable turnover days[42](index=42&type=chunk) - Handles overseas sales receivables very prudently and plans to expand sales channels in the 5G era[42](index=42&type=chunk) [Patents, Awards and Recognition](index=18&type=section&id=Patents,%20Awards%20and%20Recognition) As of June 30, 2025, the Group had obtained 287 patents in China, including 123 invention patents and 164 utility model patents, with the company and its subsidiaries receiving numerous industry awards and recognitions, such as ranking first in feeder cable sales and being designated as a National Enterprise Technology Center - As of June 30, 2025, the Group had obtained **287 China patents** (**123 invention patents**, **164 utility model patents**)[43](index=43&type=chunk) - Trigiant Technology has ranked first among Chinese feeder cable manufacturers for many consecutive years[44](index=44&type=chunk) - Trigiant Technology was recognized as a National Enterprise Technology Center and received the Jiangsu Manufacturing Outstanding Contribution Award, while Trigiant Optic-electronic was recognized as a Jiangsu Provincial Enterprise Technology Center[44](index=44&type=chunk) - Trigiant Technology and Trigiant Optic-electronic were rated **AAA (Comprehensive Credit)** credit rating[44](index=44&type=chunk) [Outlook and Future Plans](index=18&type=section&id=Outlook%20and%20Future%20Plans) Looking ahead to H2 2025, while the global economy faces uncertainties, China's economy is expected to maintain steady growth, with accelerated deployment of 10-gigabit optical networks and 5G-A, prompting the Group to increase R&D in 5G and 6G, strategically position in millimeter-wave, and deepen overseas market presence to capitalize on industry upgrades and global 5G deployment opportunities - The World Bank forecasts global GDP growth to be revised down to **2.3%** in 2025, with China's growth forecast maintained at **4.5%**[43](index=43&type=chunk) - The Chinese government will increase support for the real economy, expand infrastructure investment, boost domestic demand, and support digital economy transformation[43](index=43&type=chunk) - China officially launched pilot deployments of 10-gigabit optical networks, with the Chinese cable industry market size expected to exceed **RMB 1.6 trillion** by 2027[45](index=45&type=chunk) [Accelerated 5G-A Deployment, 6G Driving Next Round of Industrial Upgrades](index=19&type=section&id=Accelerated%205G-A%20Deployment,%206G%20Driving%20Next%20Round%20of%20Industrial%20Upgrades) The global communication industry is in a critical transition from 5G to 6G, with 5G-A technology offering comprehensive upgrades in capacity, speed, and latency, expected to support trillion-level IoT applications, and the Group is continuously increasing R&D investment in 5G and 6G related fields to prepare for future technological iterations - The global communication equipment market size is projected to exceed **USD 680 billion** by 2030, with the Asia-Pacific region accounting for over **45%**, and China contributing over **50%** of global production capacity[46](index=46&type=chunk) - **5G-A** offers comprehensive upgrades in capacity, speed, latency, reliability, and positioning accuracy compared to 5G, expected to support trillion-level IoT applications[46](index=46&type=chunk) - China's **5G penetration rate is expected to reach 88% by 2030**, with the scope of 5G-A network pilot cities gradually expanding, projected to cover over **300 cities nationwide by 2025**[47](index=47&type=chunk) - The Group continues to increase R&D investment in 5G and 6G related fields, including composite insulated corrugated outer conductor super flexible RF coaxial cables for 5G communication and ultra-low latency optical cables for intelligent computing center cluster networks[48](index=48&type=chunk) [Strategic Layout in Millimeter Wave, Creating New Growth Curve](index=20&type=section&id=Strategic%20Layout%20in%20Millimeter%20Wave,%20Creating%20New%20Growth%20Curve) Millimeter wave, as a crucial frequency band for 5G-A and future 6G, is becoming a focal point for technological competition and industrial investment, with China having approved the first batch of 5G millimeter wave industry standards, and the Group proactively deploying related technologies and innovating products, expecting millimeter wave business to be a core driver for revenue structure upgrades - Millimeter wave, as a crucial frequency band for **5G-A** and future **6G**, has seen China approve the first batch of **5G millimeter wave industry standards**[49](index=49&type=chunk) - The Group has proactively deployed **5G millimeter wave related technologies** and is developing products such as improved **50GHz band passive double-balanced mixers** for 5G millimeter wave applications[49](index=49&type=chunk)[50](index=50&type=chunk) - Millimeter wave business is expected to become a core driver for the Group's revenue structure upgrade, characterized by high technical barriers and network utilization efficiency[50](index=50&type=chunk) [Deepening Overseas Market Presence, Expanding Global Growth Momentum](index=21&type=section&id=Deepening%20Overseas%20Market%20Presence,%20Expanding%20Global%20Growth%20Momentum) The Group is actively expanding its overseas markets, focusing on customers with bulk demand and promoting customized product solutions, enhancing brand influence through international exhibitions, and prioritizing the maintenance and expansion of "Belt and Road" country clients, with self-developed ultra-high temperature flame retardant special RF coaxial cables for the Korean market expected to be a significant growth source - Actively expanding overseas markets, focusing on customers with bulk demand, and promoting customized product solutions[51](index=51&type=chunk) - Participated in international exhibitions such as Singapore Asia Tech x Singapore, US IMS Microwave Technology Show, and Indonesia Jakarta Communication Exhibition, enhancing international brand recognition[51](index=51&type=chunk) - Prioritizes maintaining and expanding clients in "Belt and Road" countries, such as Thailand and South Korea[51](index=51&type=chunk) - Self-developed ultra-high temperature flame retardant special RF coaxial cables for the Korean market are expected to gradually replace existing aluminum cable products in the local market, becoming a significant source of growth[51](index=51&type=chunk) [Flexible Capital Strategy, Enhancing Shareholder Value](index=22&type=section&id=Flexible%20Capital%20Strategy,%20Enhancing%20Shareholder%20Value) In H1 2025, the Group conducted 15 share repurchases, totaling 15,570,000 shares for HKD 4,616,730, demonstrating management's confidence in the company's long-term value and effectively increasing net asset value per share, with the Board authorized for future share issuance or repurchase to maximize shareholder interests - In H1 2025, **15 repurchases** were conducted, totaling **15,570,000 shares** for a total consideration of **HKD 4,616,730**[52](index=52&type=chunk) - Repurchase actions effectively boosted market sentiment, increased stock trading activity, and enhanced net asset value per share[52](index=52&type=chunk) - The Board has been granted a general mandate by shareholders for share issuance or repurchase[52](index=52&type=chunk) [Financial Review](index=22&type=section&id=Financial%20Review) This section provides a detailed review of the changes in various financial indicators for H1 2025, where revenue growth was driven by flame retardant soft cable and optical cable series, but gross profit and gross margin declined due to telecom operators' capital expenditure controls, other income significantly decreased due to the cessation of VAT credit benefits, and impairment losses increased, while R&D and finance costs decreased, ultimately leading to a 38.9% reduction in profit for the period [Revenue](index=22&type=section&id=Revenue) In H1 2025, revenue increased by 6.6% to RMB 1,235.6 million, primarily driven by growth in flame retardant soft cable series and optical cable series and related products, partially offset by declines in feeder cable series, other accessories, and new electronic components - Revenue increased by approximately **RMB 76.6 million** or **6.6%** to approximately **RMB 1,235.6 million**[53](index=53&type=chunk) - Primarily due to increased revenue from flame retardant soft cable series and optical cable series and related products, partially offset by decreased revenue from feeder cable series, other accessories, and new electronic components[53](index=53&type=chunk) [Cost of Sales](index=22&type=section&id=Cost%20of%20Sales) Cost of sales increased by 7.8% year-on-year to RMB 1,095.9 million, mainly influenced by a 4.2% rise in metal raw material prices such as copper, with the Group's feeder cable products priced on a cost-plus basis to manage raw material price risk - Cost of sales increased by approximately **RMB 79.1 million** or **7.8%** to approximately **RMB 1,095.9 million**[54](index=54&type=chunk) - Prices of metal raw materials such as copper increased by **4.2%** compared to H1 2024[54](index=54&type=chunk) - Feeder cable series products are priced on a cost-plus basis to control raw material price risk[54](index=54&type=chunk) [Gross Profit and Gross Margin](index=23&type=section&id=Gross%20Profit%20and%20Gross%20Margin) Gross profit decreased by 1.8% year-on-year to RMB 139.7 million, with the overall gross margin declining from 12.3% to 11.3%, primarily due to global telecom operators' capital expenditure controls - Gross profit decreased by approximately **RMB 2.5 million** or **1.8%** to approximately **RMB 139.7 million**[55](index=55&type=chunk) - Overall gross margin decreased from approximately **12.3%** to approximately **11.3%**[55](index=55&type=chunk) - The decline in gross margin was primarily due to global telecom operators' capital expenditure controls[55](index=55&type=chunk) [Other Income](index=23&type=section&id=Other%20Income) Other income significantly decreased by 74.0% year-on-year to RMB 4.3 million, mainly due to the cessation of VAT credit benefits and reduced interest income - Other income decreased by approximately **RMB 12.2 million** or **74.0%** to approximately **RMB 4.3 million**[56](index=56&type=chunk) - The decrease was primarily due to the cessation of VAT credit benefits and a reduction in interest income during the period[56](index=56&type=chunk) [Impairment Losses](index=23&type=section&id=Impairment%20Losses) Impairment losses on trade receivables (net of reversal) increased by 137.8% year-on-year to RMB 17.8 million, primarily due to a slight increase in the ageing of trade receivables - Impairment losses on trade receivables increased by approximately **RMB 10.3 million** or approximately **137.8%** to approximately **RMB 17.8 million**[57](index=57&type=chunk) - Primarily due to a slight increase in the ageing of trade receivables in H1 2025[57](index=57&type=chunk) [Other Gains and Losses](index=23&type=section&id=Other%20Gains%20and%20Losses) H1 2025 recorded other losses of approximately RMB 400 thousand, compared to gains of approximately RMB 500 thousand in the prior year, mainly due to a shift from exchange gains to exchange losses - H1 2025 recorded other losses of approximately **RMB 400 thousand**, while H1 2024 recorded other gains of approximately **RMB 500 thousand**[58](index=58&type=chunk) - Primarily due to a shift from exchange gains to exchange losses[58](index=58&type=chunk) [Selling and Distribution Costs](index=23&type=section&id=Selling%20and%20Distribution%20Costs) Selling and distribution costs slightly increased by 0.9% year-on-year to RMB 26.0 million - Selling and distribution costs slightly increased by approximately **RMB 200 thousand** or **0.9%** to approximately **RMB 26.0 million**[59](index=59&type=chunk) [Administrative Expenses](index=24&type=section&id=Administrative%20Expenses) Administrative expenses decreased by 0.4% year-on-year to RMB 21.0 million, primarily due to reduced office expenses - Administrative expenses decreased by approximately **RMB 100 thousand** or **0.4%** to approximately **RMB 21.0 million**[60](index=60&type=chunk) - Primarily due to a decrease in office expenses[60](index=60&type=chunk) [Research and Development Costs](index=24&type=section&id=Research%20and%20Development%20Costs) Research and development costs decreased by 8.9% year-on-year to RMB 26.4 million, primarily influenced by the progress of research projects - Research and development costs decreased by approximately **RMB 2.6 million** or **8.9%** to approximately **RMB 26.4 million**[61](index=61&type=chunk) - Primarily influenced by the progress of research projects[61](index=61&type=chunk) [Finance Costs](index=24&type=section&id=Finance%20Costs) Finance costs decreased by 14.1% year-on-year to RMB 21.5 million, primarily due to a decrease in the average interest rate of borrowings - Finance costs decreased by approximately **RMB 3.5 million** or **14.1%** to approximately **RMB 21.5 million**[62](index=62&type=chunk) - Primarily due to a decrease in the average interest rate of borrowings[62](index=62&type=chunk) [Taxation](index=24&type=section&id=Taxation) Income tax expense decreased by 41.0% year-on-year to RMB 5.8 million, primarily due to increased deferred tax credits related to impairment losses on trade receivables - Income tax expense decreased by approximately **RMB 4.0 million** or **41.0%** to approximately **RMB 5.8 million**[63](index=63&type=chunk) - The decrease was primarily due to an increase in deferred tax credits related to impairment losses on trade receivables[63](index=63&type=chunk) [Profit for the Period](index=24&type=section&id=Profit%20for%20the%20Period) Profit for the period decreased by 38.9% year-on-year to RMB 25.0 million, with the net profit margin declining from 3.5% to 2.0%, reflecting the combined impact of multiple unfavorable factors - Profit for the period decreased by approximately **RMB 15.9 million** or approximately **38.9%** to approximately **RMB 25.0 million**[64](index=64&type=chunk) - Net profit margin decreased from approximately **3.5%** to approximately **2.0%**[64](index=64&type=chunk) [Liquidity, Financial Resources and Capital Structure](index=24&type=section&id=Liquidity,%20Financial%20Resources%20and%20Capital%20Structure) The Group's working capital primarily originates from shareholders' equity, internally generated cash flow, and borrowings, with H1 2025 net cash generated from operating activities at RMB 316.5 million and an increase in bank balances and cash, while net borrowings stood at RMB 1,491.0 million, mainly denominated in RMB, with no foreign currency hedging policy - Working capital primarily originates from shareholders' equity, internally generated cash flow, and borrowings[65](index=65&type=chunk) Cash Flow Summary (Thousand RMB) | Item | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Net Cash Generated from Operating Activities | 316,548 | 409,350 | | Net Cash Generated from Investing Activities | 20,711 | 35,342 | | Net Cash Used in Financing Activities | (246,976) | (404,732) | - As of June 30, 2025, bank balances and cash, and pledged bank deposits amounted to approximately **RMB 625.1 million**[67](index=67&type=chunk) - Net borrowings amounted to approximately **RMB 1,491.0 million**, of which approximately **RMB 1,103.0 million** were bank borrowings and approximately **RMB 391.2 million** were bill financing arrangements[67](index=67&type=chunk) - The Group has no foreign currency hedging policy[68](index=68&type=chunk) [Gearing Ratio](index=25&type=section&id=Gearing%20Ratio) As of June 30, 2025, the gearing ratio slightly decreased to 24.5%, primarily influenced by an increase in bank balances and cash - The gearing ratio slightly decreased from approximately **26.3%** as of December 31, 2024, to approximately **24.5%** as of June 30, 2025[69](index=69&type=chunk) - The decrease was primarily influenced by an increase in bank balances and cash in H1 2025[69](index=69&type=chunk) [Pledged Assets](index=25&type=section&id=Pledged%20Assets) As of June 30, 2025, the Group had pledged bank deposits of approximately RMB 70.4 million as collateral for credit facilities and performance guarantees - As of June 30, 2025, pledged bank deposits amounted to approximately **RMB 70.4 million**[70](index=70&type=chunk) [Contingent Liabilities](index=26&type=section&id=Contingent%20Liabilities) As of June 30, 2025, the Group had no significant contingent liabilities - As of June 30, 2025, the Group had no significant contingent liabilities[71](index=71&type=chunk) [Employee Information](index=26&type=section&id=Employee%20Information) As of June 30, 2025, the Group employed approximately 800 employees, an increase from 684 at year-end 2024, with remuneration based on performance, experience, and industry practice, and investment in continuous education and training programs - As of June 30, 2025, the Group employed approximately **800 employees** (December 31, 2024: 684 employees)[72](index=72&type=chunk) - Remuneration policy is based on employee performance, experience and industry practice, and is reviewed annually[72](index=72&type=chunk) - Investment in continuous education and training programs for management and other employees[72](index=72&type=chunk) [Interim Dividend](index=26&type=section&id=Interim%20Dividend) The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025 - The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025[73](index=73&type=chunk) [Corporate Governance and Other Information](index=26&type=section&id=Corporate%20Governance%20and%20Other%20Information) This section outlines the Group's corporate governance practices, securities transactions by directors, audit committee review, and publication details [Corporate Governance](index=26&type=section&id=Corporate%20Governance) The Company has adopted the Corporate Governance Code set out in Appendix C1 Part 2 of the Listing Rules, and has complied with its provisions where applicable, except for the roles of Chairman and Chief Executive Officer being held by the same individual - The Company has adopted the Corporate Governance Code set out in Appendix C1 Part 2 of the Listing Rules[74](index=74&type=chunk) - The roles of Chairman and Chief Executive Officer are performed by Mr. Qian Lirong, deviating from the requirement of Code Provision C.2.1[74](index=74&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=27&type=section&id=Purchase,%20Sale%20or%20Redemption%20of%20the%20Company's%20Listed%20Securities) For the six months ended June 30, 2025, the Company further repurchased a total of 15,570,000 ordinary shares on the Stock Exchange for a total consideration of HKD 4,616,730, aiming to boost market confidence, increase net asset value per share, and create shareholder value, with the repurchased shares not yet cancelled as of the announcement date - For the six months ended June 30, 2025, the Company repurchased a total of **15,570,000 ordinary shares** for a total consideration of **HKD 4,616,730**[75](index=75&type=chunk) H1 2025 Share Repurchase Details | Month | Number of Shares Repurchased | Highest Price Paid (HKD) | Lowest Price Paid (HKD) | | :--- | :--- | :--- | :--- | | January 2025 | 4,280,000 | 0.31 | 0.3 | | March 2025 | 1,882,000 | 0.305 | 0.305 | | April 2025 | 7,386,000 | 0.305 | 0.275 | | May 2025 | 118,000 | 0.305 | 0.3 | | June 2025 | 1,904,000 | 0.325 | 0.305 | - As of the announcement date, the total of **19,000,000 repurchased shares** have not yet been cancelled[75](index=75&type=chunk) [Model Code for Securities Transactions by Directors](index=27&type=section&id=Model%20Code%20for%20Securities%20Transactions%20by%20Directors) The Company has adopted the Model Code set out in Appendix C3 of the Listing Rules as the code of conduct for directors' dealings in the Company's securities, and all directors have confirmed compliance with the Model Code for the six months ended June 30, 2025 - The Company has adopted the Model Code set out in Appendix C3 of the Listing Rules[77](index=77&type=chunk) - All directors have confirmed compliance with the Model Code for the six months ended June 30, 2025[77](index=77&type=chunk) [Audit Committee](index=28&type=section&id=Audit%20Committee) The Company has established an Audit Committee responsible for reviewing and monitoring the Group's financial reporting process, internal control, and risk management systems, with its H1 2025 interim results reviewed by the Committee and independent auditor Deloitte Touche Tohmatsu - The Audit Committee is responsible for reviewing and monitoring the Group's financial reporting process, internal control, and risk management systems[78](index=78&type=chunk) - The Audit Committee members include Ms. Qiu Hui (Chairperson), Professor Jin Xiaofeng, and Mr. Zhao Huanqi[78](index=78&type=chunk) - The Group's H1 2025 interim results have been reviewed by the Audit Committee and by independent auditor Deloitte Touche Tohmatsu[78](index=78&type=chunk) [Publication of Interim Results and Interim Report](index=28&type=section&id=Publication%20of%20Interim%20Results%20and%20Interim%20Report) This interim results announcement has been published on the Stock Exchange website and the Company's website, and the interim report for the six months ended June 30, 2025, will be dispatched to shareholders and published on both websites in due course - This interim results announcement has been published on the Stock Exchange website (www.hkexnews.hk) and the Company's website (www.trigiant.com.hk)[79](index=79&type=chunk) - The interim report will be dispatched to shareholders and published on the Stock Exchange and the Company's website in due course[79](index=79&type=chunk) [Board of Directors](index=29&type=section&id=Board%20of%20Directors) As of the announcement date, the Board of Directors comprises Mr. Qian Lirong (Chairman and Group CEO) and Mr. Qian Chenhui as Executive Directors, Mr. Zhang Dongjie as Non-executive Director, and Ms. Qiu Hui, Professor Jin Xiaofeng, and Mr. Zhao Huanqi as Independent Non-executive Directors - Executive Directors: Mr. Qian Lirong (Chairman and Group CEO), Mr. Qian Chenhui[82](index=82&type=chunk) - Non-executive Director: Mr. Zhang Dongjie[82](index=82&type=chunk) - Independent Non-executive Directors: Ms. Qiu Hui, Professor Jin Xiaofeng, Mr. Zhao Huanqi[82](index=82&type=chunk)

[Interim Condensed Consolidated Statement of Comprehensive Income](index=2&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) [Consolidated Statement of Comprehensive Income Summary](index=2&type=section&id=Consolidated%20Statement%20of%20Comprehensive%20Income%20Summary) Profit for the period significantly decreased by 84.9% to RMB 17,715 thousand due to reduced gross profit and increased expenses Key Financial Performance for the Six Months Ended June 30, 2025 | Metric | 2025 (RMB thousand) | 2024 (RMB thousand) | Year-on-year change (%) | | :--- | :--- | :--- | :--- | | Revenue | 1,357,566 | 1,359,778 | -0.2% | | Cost of sales | (1,304,505) | (1,229,559) | +6.1% | | Gross profit | 53,061 | 130,219 | -59.3% | | Operating profit | 25,286 | 141,130 | -82.1% | | Profit for the period | 17,715 | 116,983 | -84.9% | | Profit for the period attributable to owners of the Company | 17,715 | 117,032 | -84.9% | | Basic and diluted earnings per share (RMB cents) | 0.84 | 6.08 | -86.2% | - Total comprehensive income for the period significantly decreased from **RMB 117,141 thousand** in 2024 to **RMB 17,381 thousand** in 2025, a reduction of **85.2%**[4](index=4&type=chunk) [Interim Condensed Consolidated Statement of Financial Position](index=4&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) [Consolidated Statement of Financial Position Summary](index=4&type=section&id=Consolidated%20Statement%20of%20Financial%20Position%20Summary) Total assets decreased due to lower current assets, while net current assets slightly increased and total equity grew stably Key Asset and Liability Data as at June 30, 2025 | Metric | As at June 30, 2025 (RMB thousand) | As at December 31, 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Total assets | 2,357,291 | 2,673,717 | -11.8% | | Total non-current assets | 385,334 | 400,199 | -3.8% | | Total current assets | 1,971,957 | 2,273,518 | -13.2% | | Inventories | 569,057 | 793,403 | -28.3% | | Trade and bills receivables | 355,984 | 659,808 | -46.1% | | Cash and cash equivalents | 896,941 | 655,837 | +36.8% | | Total current liabilities | 1,119,258 | 1,448,620 | -22.7% | | Trade payables | 990,680 | 1,252,414 | -20.9% | | Net current assets | 852,699 | 824,898 | +3.4% | | Total liabilities | 1,275,847 | 1,609,654 | -20.7% | | Total equity | 1,081,444 | 1,064,063 | +1.6% | [Notes to the Interim Condensed Consolidated Financial Information](index=6&type=section&id=Notes%20to%20the%20Interim%20Condensed%20Consolidated%20Financial%20Information) [1 General Information](index=6&type=section&id=1%20General%20Information) The Group, incorporated in the Cayman Islands and listed in Hong Kong, primarily conducts unaudited coal-related businesses in China - The Company was incorporated in the Cayman Islands on February 19, 2010, and listed on the Main Board of the Hong Kong Stock Exchange on January 12, 2012[7](index=7&type=chunk) - The Group's principal activities are coal trading, coal processing services, and supply chain services in China[8](index=8&type=chunk) [2 Basis of Preparation](index=6&type=section&id=2%20Basis%20of%20Preparation) Interim financial statements are prepared under HKAS 34 and Listing Rules, using historical cost basis, with consistent accounting policies - The interim condensed consolidated financial statements are prepared in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting" issued by the HKICPA and the Listing Rules of the Stock Exchange[9](index=9&type=chunk) - The statements are prepared on a historical cost basis, except for financial assets at fair value through other comprehensive income and derivative financial assets measured at fair value[10](index=10&type=chunk) [3 Changes in Accounting Policies](index=7&type=section&id=3%20Changes%20in%20Accounting%20Policies) The Group adopted new HKFRS standards, including HKAS 21 (Revised), with no significant impact on current or future financial statements - The Group has adopted HKAS 21 (Revised) "Lack of Exchangeability", which specifies how an entity assesses whether a currency is exchangeable and determines the spot exchange rate[12](index=12&type=chunk) - Management believes the adoption of new and revised standards has no significant impact on the amounts reported and disclosures in these interim condensed consolidated financial statements[12](index=12&type=chunk) - Several new and revised standards effective for accounting periods beginning in 2026 or 2027 are not expected to have a significant impact on the Group's financial performance and position based on preliminary assessment[13](index=13&type=chunk) [4 Estimates](index=8&type=section&id=4%20Estimates) Management's judgments and estimates for financial statements are consistent with 2024, but actual results may vary - The significant judgments made by management and key sources of estimation uncertainty in preparing the financial statements are the same as those applied in the 2024 annual financial statements[14](index=14&type=chunk) [5 Financial Risk Management](index=8&type=section&id=5%20Financial%20Risk%20Management) The Group faces market, credit, liquidity, and concentration risks, with no significant policy changes, and fair values are estimated across three levels - The Group's operations are exposed to market risks (including foreign exchange risk and interest rate risk), credit risk, liquidity risk, and concentration risk[15](index=15&type=chunk) - There have been no significant changes in risk management policies since December 31, 2024[16](index=16&type=chunk) Fair Value Hierarchy of Financial Instruments | Fair Value Measurement Level | As at June 30, 2025 (RMB thousand) | As at December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Derivative financial assets (Level 2) | – | 1,504 | | Financial assets at fair value through other comprehensive income (Level 2) | – | 541 | [6 Segment Information](index=9&type=section&id=6%20Segment%20Information) The Group operates a single coal business segment, with revenue from China covering trading, processing, and supply chain services, and non-current assets primarily in China - The Group's chief operating decision-maker considers the coal business as a single operating segment, thus no separate segment analysis is presented in the interim condensed consolidated financial report[20](index=20&type=chunk) Revenue from Customer Contracts by Category (For the six months ended June 30) | Category | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | **Major geographical markets** | | | | - China | 1,357,566 | 1,359,778 | | **Major products and services** | | | | - Trading of coal and provision of coal processing services | 1,294,494 | 1,329,032 | | - Coal supply chain management services | 63,072 | 30,746 | | **Timing of revenue recognition** | | | | - At a point in time | 1,357,566 | 1,359,778 | Geographical Information (For the six months ended June 30) | Region | 2025 Revenue (RMB thousand) | 2024 Revenue (RMB thousand) | 2025 Non-current assets (RMB thousand) | 2024 Non-current assets (RMB thousand) | | :--- | :--- | :--- | :--- | :--- | | China | 1,357,566 | 1,359,778 | 369,859 | 377,738 | | Hong Kong | – | – | 4,555 | 5,515 | | Singapore | – | – | 1,109 | 1,797 | | **Total** | **1,357,566** | **1,359,778** | **375,523** | **385,050** | [7 Other (Losses)/Gains – Net](index=11&type=section&id=7%20Other%20(Losses)%2FGains%20%E2%80%93%20Net) Net other losses of RMB 8.6 million were primarily driven by RMB 10.1 million in exchange losses due to USD and HKD depreciation Other (Losses)/Gains – Net (For the six months ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Net exchange (losses)/gains | (10,088) | 4,138 | | Government grants | 502 | 4,737 | | Other (losses)/gains – net | (8,649) | 9,479 | - The exchange losses for the period primarily arose from financial assets denominated in USD and HKD, due to the depreciation of USD and HKD against RMB[23](index=23&type=chunk) [8 Finance Income/(Costs) – Net](index=12&type=section&id=8%20Finance%20Income%2F(Costs)%20%E2%80%93%20Net) Net finance income improved to RMB 1.008 million, driven by higher interest income and lower interest expenses Finance Income/(Costs) – Net (For the six months ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Finance income (interest income) | 5,029 | 1,141 | | Finance costs | (4,021) | (3,081) | | Finance income/(costs) – net | 1,008 | (1,940) | [9 Profit Before Income Tax](index=13&type=section&id=9%20Profit%20Before%20Income%20Tax) Profit before tax is calculated after deducting increased inventory costs, depreciation, and employee costs Profit Before Income Tax Deductions (For the six months ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Cost of inventories | 1,206,708 | 1,157,369 | | Depreciation of right-of-use assets | 2,771 | 2,496 | | Depreciation of property, plant and equipment | 15,172 | 4,761 | | Employee costs | 56,521 | 41,787 | [10 Income Tax Expense](index=13&type=section&id=10%20Income%20Tax%20Expense) Income tax expense significantly decreased to RMB 8.6 million due to lower PRC enterprise income tax and various preferential tax policies Income Tax Expense (For the six months ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Current tax – PRC enterprise income tax | 4,601 | 18,844 | | Deferred tax | 3,978 | 2,386 | | Income tax expense | 8,579 | 21,230 | - Hong Kong subsidiaries are subject to Hong Kong profits tax at a rate of **16.5%**, with eligible entities benefiting from a two-tiered profits tax rate (first HKD 2 million at **8.25%**)[27](index=27&type=chunk)[28](index=28&type=chunk) - PRC subsidiaries are subject to enterprise income tax at a rate of **25%**, with certain small low-profit enterprises, Hainan Runce, and Shenzhen Runce enjoying preferential tax rates (e.g., **15%**)[28](index=28&type=chunk)[29](index=29&type=chunk)[30](index=30&type=chunk)[31](index=31&type=chunk) [11 Earnings/(Loss) Per Share](index=15&type=section&id=11%20Earnings%2F(Loss)%20Per%20Share) Basic and diluted earnings per share significantly decreased to RMB 0.84 cents, driven by lower profit attributable to owners Earnings/(Loss) Per Share (For the six months ended June 30) | Item | 2025 (RMB thousand/cents) | 2024 (RMB thousand/cents) | | :--- | :--- | :--- | | Profit attributable to owners of the Company (RMB thousand) | 17,715 | 117,032 | | Weighted average number of shares in issue (thousand shares) | 2,103,141 | 1,924,198 | | Basic and diluted earnings per share (RMB cents) | 0.84 | 6.08 | - There were no potential ordinary shares with dilutive effect for the six months ended June 30, 2025 and 2024, thus diluted earnings per share equal basic earnings per share[33](index=33&type=chunk) [12 Dividends](index=15&type=section&id=12%20Dividends) Directors do not recommend an interim dividend for the period, consistent with the prior year - The directors do not recommend the payment of an interim dividend for the current period (2024: nil)[34](index=34&type=chunk) [13 Property, Plant and Equipment](index=15&type=section&id=13%20Property%2C%20Plant%20and%20Equipment) Capital expenditure for property, plant and equipment significantly decreased to RMB 8.4 million, with no disposals Capital Expenditure for Property, Plant and Equipment (For the six months ended June 30) | Item | 2025 (RMB million) | 2024 (RMB million) | | :--- | :--- | :--- | | Capital expenditure | 8.4 | 23.2 | [14 Trade and Bills Receivables](index=16&type=section&id=14%20Trade%20and%20Bills%20Receivables) Net trade and bills receivables significantly decreased to RMB 356 million, with improved collection reflected in reduced credit loss allowance Net Trade and Bills Receivables | Item | As at June 30, 2025 (RMB thousand) | As at December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Net trade receivables | 297,422 | 523,073 | | Net bills receivables | 58,562 | 136,735 | | **Total net trade and bills receivables** | **355,984** | **659,808** | Ageing Analysis of Trade and Bills Receivables | Ageing | As at June 30, 2025 (RMB thousand) | As at December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Up to 3 months | 198,992 | 513,981 | | 3 to 6 months | 150,645 | 142,805 | | 6 to 12 months | 6,347 | 3,022 | | **Total** | **355,984** | **659,808** | Movement in Loss Allowance for Trade and Bills Receivables | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Balance at January 1 | 18,848 | 5,603 | | (Reversal of) / Expected credit loss recognised during the period | (10,955) | 603 | | Balance at June 30 | 7,893 | 6,206 | [15 Other Receivables and Prepayments](index=17&type=section&id=15%20Other%20Receivables%20and%20Prepayments) Net other receivables and prepayments slightly decreased to RMB 150 million, with a RMB 4.9 million reversal of credit loss allowance Net Other Receivables and Prepayments | Item | As at June 30, 2025 (RMB thousand) | As at December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Consideration receivable from disposal of a subsidiary | 94,000 | 94,000 | | Net other receivables | 100,345 | 101,617 | | Deposits paid to suppliers – third parties | 10,293 | 13,567 | | Prepayments to suppliers – third parties | 20,483 | 29,731 | | Other recoverable taxes | 18,854 | 17,510 | | **Total net other receivables and prepayments** | **149,975** | **162,425** | Movement in Loss Allowance for Other Receivables | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Balance at January 1 | 63,310 | 63,501 | | Reversal of expected credit loss recognised during the period | (4,919) | (495) | | Exchange differences | (1,816) | 2,358 | | Balance at June 30 | 56,575 | 65,364 | [16 Trade Payables](index=18&type=section&id=16%20Trade%20Payables) Trade payables decreased to RMB 990.7 million, with most balances aged within three months Ageing Analysis of Trade Payables | Ageing | As at June 30, 2025 (RMB thousand) | As at December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Up to 3 months | 747,204 | 1,067,251 | | 3 to 6 months | 242,790 | 4,785 | | 6 to 12 months | 196 | 179,990 | | Over 12 months | 490 | 388 | | **Total** | **990,680** | **1,252,414** | [17 Other Payables and Accrued Charges](index=18&type=section&id=17%20Other%20Payables%20and%20Accrued%20Charges) Other payables and accrued charges slightly decreased to RMB 81.4 million, including customer deposits and salaries Other Payables and Accrued Charges | Item | As at June 30, 2025 (RMB thousand) | As at December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Other payables | 46,731 | 41,564 | | Salaries and welfare payable | 25,778 | 25,204 | | Accrued taxes (excluding income tax) | 6,424 | 19,983 | | Interest payable on loan from a shareholder of the Company | 2,510 | 1,308 | | **Total** | **81,443** | **88,059** | [18 Share Capital and Share Premium](index=19&type=section&id=18%20Share%20Capital%20and%20Share%20Premium) Issued shares, share capital, and share premium remained consistent with January 1, 2025, totaling RMB 971,672 thousand in equity Movement in Share Capital and Share Premium | Item | Number of shares (thousand shares) | Share capital (RMB thousand) | Share premium (RMB thousand) | Total (RMB thousand) | | :--- | :--- | :--- | :--- | :--- | | As at January 1, 2024 | 1,787,388 | 152,933 | 703,804 | 856,737 | | Shares issued upon acquisition of a subsidiary | 156,600 | 14,303 | 28,606 | 42,909 | | As at June 30, 2024 | 1,943,988 | 167,236 | 732,410 | 899,646 | | As at January 1, 2025 and June 30, 2025 | 2,103,141 | 181,896 | 789,776 | 971,672 | [19 Acquisition of CCB LOGISTICS LIMITED](index=19&type=section&id=19%20Acquisition%20of%20CCB%20LOGISTICS%20LIMITED) The Group acquired CCB Logistics for RMB 77,558 thousand, strengthening coal operations and generating a RMB 20,071 thousand bargain purchase gain - The Group entered into an agreement on December 29, 2023, to acquire **100%** equity interest in CCB Logistics for **RMB 77,558 thousand**, with the acquisition completed on January 24, 2024[45](index=45&type=chunk) - CCB Logistics and its subsidiaries engage in coal supply chain management services, and this acquisition enhances the Group's existing coal trading business and supply chain management capabilities[45](index=45&type=chunk) Fair Value of Identifiable Assets and Liabilities Acquired in CCB Logistics Acquisition | Item | RMB thousand | | :--- | :--- | | Net identifiable assets acquired | 97,629 | | Consideration | (77,558) | | **Bargain purchase gain on acquisition of a subsidiary** | **20,071** | [20 Discontinued Operations](index=21&type=section&id=20%20Discontinued%20Operations) The Group ceased mining operations in 2024, resulting in no revenue or losses from discontinued operations this period - The Group disposed of its entire equity interest in Hami Jinhua Mineral Resources Development Co., Ltd. in July 2024, completing the sale on September 29, 2024, and ceasing its mining operations[49](index=49&type=chunk) Loss Analysis of Discontinued Operations (For the six months ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Revenue | – | – | | Cost of sales | – | (590) | | Gross loss | – | (590) | | Administrative expenses | – | (387) | | Operating loss | – | (977) | | Loss for the period | – | (985) | [21 Related Party Transactions](index=22&type=section&id=21%20Related%20Party%20Transactions) Related party transactions include compensation for key management personnel, which decreased to RMB 2.785 million - Tianyuan International Limited is a shareholder of the Company, holding a **24.8%** equity interest in the Company[53](index=53&type=chunk) Key Management Personnel Compensation (For the six months ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Basic salaries, allowances and other benefits | 2,683 | 3,387 | | Contributions to retirement benefit schemes | 102 | 89 | | **Total** | **2,785** | **3,476** | [22 Capital Commitments](index=22&type=section&id=22%20Capital%20Commitments) Contracted capital commitments for property and equipment significantly decreased to RMB 1.457 million Capital Commitments | Item | As at June 30, 2025 (RMB thousand) | As at December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Acquisition of property and equipment | 1,457 | 10,255 | [23 Contingent Liabilities](index=22&type=section&id=23%20Contingent%20Liabilities) The Group reported no significant contingent liabilities as at June 30, 2025 - The Group had no significant contingent liabilities as at June 30, 2025[56](index=56&type=chunk) [Management Discussion and Analysis](index=23&type=section&id=Management%20Discussion%20and%20Analysis) [Business Review](index=23&type=section&id=Business%20Review) The Group's coal business faces declining prices due to high supply and inventory, while it expands into photovoltaic projects for green transition - The Group primarily engages in coal business, including coal processing, supply chain services, and trading[57](index=57&type=chunk) - China's coal consumption accounts for **53.2%** of national energy consumption, significantly higher than the global average[58](index=58&type=chunk) - In the first half of 2025, raw coal production by industrial enterprises above designated size was **2.40 billion tonnes**, a **5.4%** year-on-year increase; coal and lignite imports reached **222 million tonnes**, a **11.1%** year-on-year decrease[59](index=59&type=chunk)[60](index=60&type=chunk) - Total coal inventory at major Bohai Rim ports was **27.56 million tonnes**, an increase of **7.9%** from the beginning of the year, indicating relatively slow consumption of imported coal[61](index=61&type=chunk) - The China Coal Index 5500K continuously declined in the period, from **RMB 770/tonne** to **RMB 620/tonne**, reflecting an expansion in production and a downward trend in prices[64](index=64&type=chunk) - The Group has initiated photovoltaic projects to promote decarbonization, integrate coal-based energy with diversified green energy, and expand channels for green transformation of its coal business[70](index=70&type=chunk) [Results Review](index=26&type=section&id=Results%20Review) Revenue remained stable, but gross profit significantly declined due to increased cost of sales and administrative expenses, while net finance income improved - The Group's revenue decreased by approximately **0.2%** from approximately **RMB 1,360 million** in the prior period to approximately **RMB 1,358 million** in the current period, with stable sales revenue indicating a significant increase in coal transaction volume[72](index=72&type=chunk) - Cost of sales increased by approximately **6.1%** year-on-year to **RMB 1,305 million**, primarily attributable to increased transaction volume[72](index=72&type=chunk) - Gross profit decreased by approximately **59.3%** from approximately **RMB 130.2 million** in the prior period to approximately **RMB 53.1 million** in the current period, as continuous coal price declines severely compressed gross margins in the coal trading business[73](index=73&type=chunk) - Administrative expenses increased to **RMB 33.6 million** (prior period: **RMB 18.9 million**), mainly due to increased depreciation expenses from the operational use of Changzhi Desheng Coal Shed and higher employee costs[75](index=75&type=chunk) - Other net losses were approximately **RMB 8.6 million** (prior period: net gains of approximately **RMB 9.5 million**), primarily due to net exchange losses of approximately **RMB 10.1 million**[76](index=76&type=chunk) - Net finance income was approximately **RMB 1.0 million** (prior period: net finance costs of approximately **RMB 1.9 million**), mainly from bank interest income[78](index=78&type=chunk) - Income tax expense was approximately **RMB 8.6 million** (prior period: **RMB 21.3 million**), primarily due to reduced current enterprise income tax expenses from PRC operations[79](index=79&type=chunk) [Significant Investments Held](index=28&type=section&id=Significant%20Investments%20Held) The Group held no significant debt securities investments as at June 30, 2025 - As at June 30, 2025, the Group held no significant investments in debt securities (December 31, 2024: **RMB 0.5 million**)[80](index=80&type=chunk) [Capital Expenditure](index=28&type=section&id=Capital%20Expenditure) Capital expenditure decreased to RMB 8.4 million, mainly for property, plant and equipment and right-of-use assets Capital Expenditure (For the six months ended June 30) | Item | 2025 (RMB million) | 2024 (RMB million) | | :--- | :--- | :--- | | Capital expenditure for property, plant and equipment and right-of-use assets | 8.4 | 23.2 | [Liquidity and Financial Resources](index=28&type=section&id=Liquidity%20and%20Financial%20Resources) Equity attributable to owners increased, total assets decreased, while strong liquidity is maintained with increased cash balances and a net cash position - Equity attributable to owners of the Company increased by **1.6%** to approximately **RMB 1,081.4 million**[82](index=82&type=chunk) - The Group's total assets decreased to approximately **RMB 2.36 billion** (December 31, 2024: approximately **RMB 2.67 billion**)[82](index=82&type=chunk) - The Group's bank and cash balances increased by **36.8%** to approximately **RMB 896.9 million** (December 31, 2024: **RMB 655.8 million**)[85](index=85&type=chunk) - The Company's net cash position was **RMB 768.5 million** (December 31, 2024: **RMB 526.5 million**)[87](index=87&type=chunk) [Treasury Policy](index=29&type=section&id=Treasury%20Policy) The Group maintains a conservative treasury policy, primarily transacting in RMB, USD, and HKD, with surplus cash in USD fixed deposits - The Group continues to adopt a conservative treasury policy for liquidity and financial management[86](index=86&type=chunk) - The Group primarily conducts its continuing operations in RMB, USD, and HKD, with surplus cash mostly invested in USD-denominated fixed deposits[86](index=86&type=chunk) [Gearing Ratio](index=29&type=section&id=Gearing%20Ratio) The Group's gearing ratio is based on net debt to total capital, with a net cash position of RMB 768.5 million - The Group's gearing ratio is calculated as net debt divided by total capital[87](index=87&type=chunk) - As at June 30, 2025, the Company was in a net cash position of **RMB 768.5 million** (December 31, 2024: **RMB 526.5 million**)[87](index=87&type=chunk) [Key Risks](index=30&type=section&id=Key%20Risks) The Group manages foreign exchange risk with hedging strategies and credit risk from receivables through strict controls and loss provisions - The Group's business is primarily conducted in RMB, but international coal supply chain trade involves USD transactions, exposing it to potential foreign currency risk between USD and RMB[89](index=89&type=chunk) - To manage foreign exchange risk, the Company has established a dedicated team to monitor exchange rate fluctuations, assess risks, and formulate hedging strategies, utilizing foreign currency forward contracts[89](index=89&type=chunk) - The Group faces credit risk in its coal business, primarily from trade and bills receivables, which is managed through strict control of outstanding receivables and regular review of overdue balances[90](index=90&type=chunk) - As at June 30, 2025, a loss allowance of approximately **RMB 7.9 million** was provided for the total trade and bills receivables (December 31, 2024: **RMB 18.8 million**)[90](index=90&type=chunk) [Pledge of the Company’s Assets, Commitments and Contingent Liabilities](index=31&type=section&id=Pledge%20of%20the%20Company%E2%80%99s%20Assets%2C%20Commitments%20and%20Contingent%20Liabilities) The Group had no other significant capital commitments, asset pledges, or contingent liabilities beyond disclosed notes - Except as disclosed in Note 22 (Capital Commitments) and Note 23 (Contingent Liabilities), the Group had no other contracted capital expenditure, commitments, pledge of the Company's assets, or significant contingent liabilities[93](index=93&type=chunk) [Dividends](index=31&type=section&id=Dividends) Directors do not recommend an interim dividend for the current period, consistent with the prior year - The directors do not recommend the payment of any interim dividend for the current period (prior period: nil)[94](index=94&type=chunk) [Human Resources and Share Option Scheme](index=31&type=section&id=Human%20Resources%20and%20Share%20Option%20Scheme) The Group employed 839 staff with RMB 56.5 million in employee costs, and no share options were granted or outstanding - As at June 30, 2025, the Group employed **839** staff (December 31, 2024: **999** staff)[95](index=95&type=chunk) - Total employee costs (including directors' emoluments) expensed for the period were approximately **RMB 56.5 million** (prior period: **RMB 41.8 million**)[95](index=95&type=chunk) - The share option scheme aims to incentivize and reward eligible participants, and to recruit and retain high-caliber personnel, but no share options were granted, exercised, lapsed, or outstanding during the period or as at June 30, 2025[95](index=95&type=chunk) [Future Outlook and Prospects](index=31&type=section&id=Future%20Outlook%20and%20Prospects) Coal prices declined in H1 due to market factors, but H2 outlook suggests potential price recovery with slower supply growth and increased electricity demand, while the Group pursues green transformation - In the first half, the coal market experienced price declines and significant margin contraction due to low heating demand, slower growth in manufacturing electricity consumption, and coal miners' strategy of prioritizing volume over price, causing prices to revert to pre-2021 surge levels[96](index=96&type=chunk)[97](index=97&type=chunk) - The National Energy Administration will investigate coal mines for overproduction, which is expected to slow domestic coal supply growth and further reduce coal imports[98](index=98&type=chunk) - National electricity consumption is projected to grow by approximately **6–8%** in the second half of 2025 compared to the same period in 2024, with thermal coal power expected to maintain high consumption levels[98](index=98&type=chunk) - The Group actively expanded revenue sources by maintaining long-term cooperative relationships with major coal trading customers, leading to significant growth in coal trading volume; coal supply chain management service revenue and gross profit significantly increased, effectively offsetting the decline in gross margin from coal trading business[99](index=99&type=chunk) - The Group has initiated the development and construction of photovoltaic projects to promote carbon reduction and facilitate the integrated development of coal-based energy and green energy[101](index=101&type=chunk) [Corporate Governance and Other Information](index=33&type=section&id=Corporate%20Governance%20and%20Other%20Information) [Directors’ and Chief Executive’s Interests in Shares, Underlying Shares and Debentures](index=33&type=section&id=Directors%E2%80%99%20and%20Chief%20Executive%E2%80%99s%20Interests%20in%20Shares%2C%20Underlying%20Shares%20and%20Debentures) Directors Mr. Cui Yazhou and Mr. Ye Xin held significant equity interests through controlled corporations Directors’ and Chief Executive’s Interests in Shares | Name/Designation | Nature of interest | Total interest in shares (shares) | Approximate percentage of issued share capital (%) | | :--- | :--- | :--- | :--- | | Tianyuan International Limited | Beneficial owner | 521,000,000 (L) | 24.77 | | Mr. Cui Yazhou | Interest in controlled corporation | 521,000,000 (L) | 24.77 | | Fulian Holdings Limited | Beneficial owner | 137,792,017 (L) | 6.55 | | Mr. Ye Xin | Interest in controlled corporation | 137,792,017 (L) | 6.55 | [Substantial Shareholders’ and Other Persons’ Interests in Shares and Underlying Shares](index=35&type=section&id=Substantial%20Shareholders%E2%80%99%20and%20Other%20Persons%E2%80%99%20Interests%20in%20Shares%20and%20Underlying%20Shares) Several individuals and entities, including Mr. Feng Yuantao and China Clean Energy Technology, are substantial shareholders with significant equity interests Substantial Shareholders’ and Other Persons’ Interests in Shares | Name/Designation | Nature of interest | Total interest in shares (shares) | Approximate percentage of issued share capital (%) | | :--- | :--- | :--- | :--- | | Mr. Feng Yuantao | Beneficial owner | 306,522,040 (L) | 14.57 | | Mr. Bong Chin Chung | Beneficial owner | 242,419,957 (L) | 11.53 | | China Clean Energy Technology Co., Ltd. | Beneficial owner | 170,000,000 (L) | 8.08 | | Mr. Li Langwei | Interest in controlled corporation | 170,000,000 (L) | 8.08 | | Baicheng International Group Co., Ltd. | Beneficial owner | 147,000,000 (L) | 6.99 | | Ms. Gao Miaomiao | Interest in controlled corporation | 147,000,000 (L) | 6.99 | | Mr. Cao Jianwei | Interest in controlled corporation | 147,000,000 (L) | 6.99 | [Major Contracts](index=36&type=section&id=Major%20Contracts) No directors or their associates held material interests in significant transactions or contracts related to the Group's business - During or at the end of the period, no director or their associates had a direct or indirect material interest in any significant transaction, arrangement, or contract entered into by the Company or its subsidiaries, fellow subsidiaries, and parent company concerning the Group's business[111](index=111&type=chunk) [Management Contracts](index=36&type=section&id=Management%20Contracts) The Company had no management or administration contracts for its business during the period - The Company had no contracts concerning the management and administration of the whole or any substantial part of its business during the period[112](index=112&type=chunk) [Directors’ Interests in Competing Business](index=36&type=section&id=Directors%E2%80%99%20Interests%20in%20Competing%20Business) No directors or their associates engaged in any business competing with the Group's operations - No director or their associates engaged in any business that competes or is likely to compete, directly or indirectly, with the Group's business[113](index=113&type=chunk) [Share Option Scheme](index=36&type=section&id=Share%20Option%20Scheme) A new share option scheme was adopted in 2021, but no options were granted, exercised, or outstanding during the period - The Company adopted a new share option scheme on May 28, 2021, to incentivize and reward eligible participants[114](index=114&type=chunk)[115](index=115&type=chunk) - The total number of shares available for issue under the share option scheme is **162,000,000 shares**, representing **7.7%** of the issued shares as at January 1, 2025, June 30, 2025, and the date of this announcement[120](index=120&type=chunk) - As at January 1, 2025, and June 30, 2025, no share options were outstanding, and no share options were granted, exercised, cancelled, or lapsed during the period[121](index=121&type=chunk) [Events After the Reporting Period](index=38&type=section&id=Events%20After%20the%20Reporting%20Period) No significant events occurred after the reporting period, except as otherwise disclosed - Save as disclosed elsewhere in this announcement, there were no significant events after the reporting period[122](index=122&type=chunk) [Sufficiency of Public Float](index=38&type=section&id=Sufficiency%20of%20Public%20Float) The Company maintained the required public float throughout the period - As at the date of this announcement, the Company maintained the public float required by the Listing Rules throughout the period[123](index=123&type=chunk) [Purchase, Redemption or Sale of Securities](index=38&type=section&id=Purchase%2C%20Redemption%20or%20Sale%20of%20Securities) Neither the Company nor its subsidiaries purchased, redeemed, or sold any listed securities, and no treasury shares were held - Neither the Company nor any of its subsidiaries purchased, redeemed, or sold any of the Company's listed securities during the period[124](index=124&type=chunk) [Issue of Equity Securities](index=38&type=section&id=Issue%20of%20Equity%20Securities) The Company did not issue equity securities or sell treasury shares for cash during the period - The Company did not issue any equity securities or sell treasury shares for cash during the period[125](index=125&type=chunk) [Corporate Governance Compliance](index=39&type=section&id=Corporate%20Governance%20Compliance) [Compliance with Corporate Governance Code](index=39&type=section&id=Compliance%20with%20Corporate%20Governance%20Code) The Company complies with the Corporate Governance Code, with plans to appoint a new CEO to segregate roles - The Company has taken appropriate steps to adopt and comply with the Corporate Governance Code during the period[126](index=126&type=chunk) - The roles of Chairman and Chief Executive Officer are not segregated, with the CEO's duties performed by other executive directors and senior management; the Board believes sufficient measures are in place to ensure corporate governance practices are comparable to the Code[126](index=126&type=chunk) - The Company will issue a separate announcement regarding the appointment of a new Chief Executive Officer in due course[127](index=127&type=chunk) [Directors’ Securities Transactions](index=39&type=section&id=Directors%E2%80%99%20Securities%20Transactions) All directors confirmed compliance with the Model Code for securities transactions throughout the period - The Company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix C3 of the Listing Rules[128](index=128&type=chunk) - Following specific enquiries to all directors, all directors confirmed compliance with the required standards set out in the Model Code throughout the period[128](index=128&type=chunk) [Changes in Directors’ Information](index=39&type=section&id=Changes%20in%20Directors%E2%80%99%20Information) Independent non-executive director Mr. Ruan Guantong was appointed to another company, with no other disclosed director information changes - Mr. Ruan Guantong, an independent non-executive director of the Company, was appointed as an independent non-executive director of Zhudi Holdings Group Limited on June 18, 2025[129](index=129&type=chunk) [Review by Audit Committee](index=39&type=section&id=Review%20by%20Audit%20Committee) The Audit Committee, composed of independent non-executive directors, reviewed the unaudited interim results and monitors financial reporting and controls - The Audit Committee, comprising three independent non-executive directors, is responsible for reviewing and monitoring the Group's financial reporting process, internal controls, and risk management systems[130](index=130&type=chunk)[131](index=131&type=chunk) - The interim results for the period, though unaudited, have been reviewed by the Audit Committee[131](index=131&type=chunk) [Past Performance and Forward-Looking Statements](index=40&type=section&id=Past%20Performance%20and%20Forward-Looking%20Statements) Group performance is historical, not indicative of future results, and forward-looking statements involve risks with no obligation for updates - The Group's performance and operating results contained in this report are historical, and past performance is not a guarantee of the Group's future results[132](index=132&type=chunk) - This announcement contains certain forward-looking statements regarding the Group's financial condition, operating results, and business, which involve known and unknown risks and uncertainties, and actual results may differ materially[132](index=132&type=chunk) - Neither the Group, its directors, employees, nor agents assume any obligation to correct or update the forward-looking statements or opinions contained in this report[133](index=133&type=chunk) [Publication of Interim Results and Interim Report](index=40&type=section&id=Publication%20of%20Interim%20Results%20and%20Interim%20Report) The interim results announcement is published online, and the interim report will be dispatched to shareholders and available on the same websites - This interim results announcement has been published on the Stock Exchange website (http://www.hkex.com.hk) and the Company's website (http://www.huili.hk)[134](index=134&type=chunk) - The Company's interim report for the six months ended June 30, 2025, will be dispatched to the Company's shareholders and available on the same websites in due course[134](index=134&type=chunk)

[2025 Interim Results Highlights](index=1&type=section&id=2025%20Interim%20Results%20Highlights) The company reported a significant decrease in contracted sales and total revenue for the first half of 2025, while narrowing its loss attributable to owners and reducing total interest-bearing debt 2025 First Half Key Financial Metrics | Metric | 2025 First Half (RMB) | Year-on-year change | | :--- | :--- | :--- | | Contracted Sales Amount | 6.38 billion | Decreased by approximately 33.9% | | Total Revenue | 5.1 billion | Decreased by approximately 77.4% | | Loss attributable to owners | 0.78 billion | Loss narrowed (RMB 1.71 billion in prior period) | | Total interest-bearing debt (As of June 30) | 18.4 billion | Decreased | [Interim Condensed Consolidated Financial Statements](index=2&type=section&id=Interim%20Condensed%20Consolidated%20Financial%20Statements) This section presents the company's interim condensed consolidated financial statements, including the statement of profit or loss, comprehensive income, and financial position [Interim Condensed Consolidated Statement of Profit or Loss](index=2&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss) For the six months ended June 30, 2025, revenue significantly decreased by 77.4% to RMB 5.13 billion, resulting in a gross loss, though the loss attributable to owners narrowed to RMB 781 million due to increased other income and gains Statement of Profit or Loss Key Data (For the six months ended June 30) | Metric | 2025 (RMB thousand) | 2024 (RMB thousand) | Change Rate | | :--- | :--- | :--- | :--- | | Revenue | 5,129,799 | 22,701,159 | -77.4% | | Cost of sales | (6,180,062) | (22,495,932) | -72.5% | | Gross (loss)/profit | (1,050,263) | 205,227 | Shifted from profit to loss | | Other income and gains | 1,925,330 | 527,442 | +265.0% | | Selling and distribution expenses | (189,171) | (245,661) | -23.0% | | Administrative expenses | (297,604) | (300,396) | -0.9% | | Finance costs | (396,504) | (139,913) | +183.4% | | Share of loss of associates | (159,751) | 19,126 | Shifted from profit to loss | | Loss before tax | (1,186,796) | (882,919) | Loss widened | | Income tax expense | (193,746) | (1,074,475) | -82.0% | | Loss for the period | (1,380,542) | (1,957,394) | Loss narrowed | | Loss attributable to owners of the parent | (781,257) | (1,708,904) | Loss narrowed | - Basic and diluted loss per share attributable to ordinary equity holders of the parent was **RMB (0.18)**, a narrowing from **RMB (0.47)** in the prior period[6](index=6&type=chunk) [Interim Condensed Consolidated Statement of Comprehensive Income](index=4&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) For the six months ended June 30, 2025, the company reported a total comprehensive loss of RMB 1.374 billion, a reduction from the prior year, primarily driven by a narrowed loss for the period Statement of Comprehensive Income Key Data (For the six months ended June 30) | Metric | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Loss for the period | (1,380,542) | (1,957,394) | | Exchange differences on translation of overseas operations | 6,242 | (4,736) | | Total comprehensive loss for the period | (1,374,300) | (1,962,130) | | Total comprehensive loss attributable to owners of the parent | (775,015) | (1,713,640) | [Interim Condensed Consolidated Statement of Financial Position](index=5&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, total assets and liabilities decreased, leading to a reduction in net current assets and net assets, with controlled interest-bearing debt but reduced cash and bank balances Statement of Financial Position Key Data (As of June 30) | Metric | 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | Change Rate | | :--- | :--- | :--- | :--- | | Total non-current assets | 15,677,230 | 16,235,233 | -3.4% | | Total current assets | 107,387,426 | 116,941,226 | -8.2% | | Properties under development | 35,668,797 | 41,854,872 | -14.7% | | Completed properties held for sale | 17,174,782 | 17,049,885 | +0.7% | | Cash and bank balances | 4,294,993 | 5,740,489 | -25.2% | | Total current liabilities | 94,270,848 | 102,022,807 | -7.6% | | Net current assets | 13,116,578 | 14,918,419 | -12.0% | | Net assets | 17,674,539 | 19,381,003 | -8.8% | | Total equity | 17,674,539 | 19,381,003 | -8.8% | [Notes to the Interim Condensed Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20the%20Interim%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed notes to the interim financial statements, covering accounting policies, revenue breakdown, finance costs, tax, and other financial disclosures [1. Basis of Preparation](index=7&type=section&id=1.%20Basis%20of%20Preparation) The interim financial statements are prepared under IAS 34, based on a going concern assumption, despite liquidity challenges, as management has initiated multiple measures to improve financial stability - As of June 30, 2025, the Group's total interest-bearing debt was **RMB 18.38 billion**, of which **RMB 7.418 billion** is due within the next 12 months, while cash and cash equivalents amounted to **RMB 2.908 billion**, indicating temporary liquidity challenges[12](index=12&type=chunk) - The company has implemented various measures to manage liquidity, including actively negotiating extensions or deferrals with existing debt holders, securing project development loans, seeking alternative financing, accelerating property sales, recovering sales proceeds, controlling costs, negotiating payment arrangements with contractors, and disposing of equity in project companies[13](index=13&type=chunk)[14](index=14&type=chunk) - Despite these measures, significant uncertainties remain regarding management's ability to achieve these plans, and the going concern assumption may require adjustment[15](index=15&type=chunk) [2. Changes in Accounting Policies and Disclosures](index=8&type=section&id=2.%20Changes%20in%20Accounting%20Policies%20and%20Disclosures) The company adopted new and revised IFRS effective January 1, 2025, with no significant impact on accounting policies or reported amounts for the period - The Group has adopted all new and revised International Financial Reporting Standards effective January 1, 2025, with no material impact on accounting policies or financial statement presentation for the current and prior periods[16](index=16&type=chunk) [3. Revenue, Other Income and Gains](index=8&type=section&id=3.%20Revenue%2C%20Other%20Income%20and%20Gains) Total revenue for the period sharply declined by 77.4% to RMB 5.13 billion due to reduced property sales, while other income and gains significantly increased by 265.0% to RMB 1.925 billion from revised priority notes and convertible bonds Revenue Source Analysis (For the six months ended June 30) | Revenue Source | 2025 (RMB thousand) | 2024 (RMB thousand) | Change Rate | | :--- | :--- | :--- | :--- | | Revenue from contracts with customers | 5,124,011 | 22,696,632 | -77.4% | | Property rental income | 5,788 | 4,527 | +27.9% | | **Total** | **5,129,799** | **22,701,159** | **-77.4%** | Revenue from Contracts with Customers Breakdown (For the six months ended June 30) | Type of Goods or Services | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Property sales | 5,081,571 | 22,547,839 | | Other services | 42,440 | 148,793 | Other Income and Gains (For the six months ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Gain on offshore debt restructuring | — | 429,948 | | Gain arising from revision of priority notes and convertible bonds | 1,754,136 | — | | Change in provision for financial guarantee contracts | 158,597 | 16,580 | | **Total** | **1,925,330** | **527,442** | [4. Finance Costs](index=10&type=section&id=4.%20Finance%20Costs) For the six months ended June 30, 2025, finance costs surged by 183.4% to RMB 397 million, primarily due to a reduction in capitalized interest, leading to more interest expenses recognized in profit or loss Finance Costs Analysis (For the six months ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Interest on bank and other borrowings, priority notes and convertible bonds | 567,809 | 573,706 | | Interest expense arising from revenue contracts | 115,002 | 51,395 | | Total interest expense on financial liabilities not at fair value through profit or loss | 682,851 | 625,314 | | Less: Interest capitalized | (286,347) | (485,401) | | **Total** | **396,504** | **139,913** | [5. Loss Before Tax](index=10&type=section&id=5.%20Loss%20Before%20Tax) For the six months ended June 30, 2025, loss before tax expanded to RMB 1.187 billion, driven by increased cost of properties sold, impairment losses on properties under development, net loss on disposal of subsidiaries, and financial asset impairment losses Major Components of Loss Before Tax (For the six months ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Cost of properties sold | 5,143,180 | 22,211,770 | | Impairment loss recognized on properties under development | 758,045 | 745,568 | | Impairment loss recognized on completed properties held for sale | 396,320 | 137,277 | | Net loss on disposal of subsidiaries | 605,436 | 491,946 | | Net impairment loss on financial assets | 43,270 | 12,823 | | Employee benefit expenses | 236,293 | 276,249 | [6. Income Tax](index=11&type=section&id=6.%20Income%20Tax) For the six months ended June 30, 2025, income tax expense significantly decreased by 82.0% to RMB 194 million, mainly due to reduced corporate income tax, land appreciation tax, and deferred tax changes - PRC subsidiaries are subject to Corporate Income Tax at a rate of **25%**, and Land Appreciation Tax is levied at progressive rates from **30% to 60%**[23](index=23&type=chunk) Income Tax Expense Analysis (For the six months ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Corporate income tax | 97,488 | 247,297 | | Land appreciation tax | 46,883 | 169,788 | | Deferred tax | 49,375 | 657,390 | | **Total tax expense for the period** | **193,746** | **1,074,475** | [7. Dividends](index=11&type=section&id=7.%20Dividends) The Board of Directors does not recommend the payment of an interim dividend for the six months ended June 30, 2025 - The company will not distribute an interim dividend for the first half of 2025, consistent with the prior period in 2024[25](index=25&type=chunk) [8. Loss Per Share Attributable to Ordinary Equity Holders of the Parent](index=11&type=section&id=8.%20Loss%20Per%20Share%20Attributable%20to%20Ordinary%20Equity%20Holders%20of%20the%20Parent) For the six months ended June 30, 2025, basic and diluted loss per share attributable to ordinary equity holders of the parent narrowed to RMB (0.18), from RMB (0.47) in the prior year, due to a reduced loss attributable to owners Loss Per Share Calculation Basis (For the six months ended June 30) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Loss attributable to ordinary equity holders of the parent (RMB thousand) | (781,257) | (1,708,904) | | Weighted average number of ordinary shares in issue during the period | 4,242,226,263 | 3,605,726,697 | | Basic and diluted loss per share (RMB) | (0.18) | (0.47) | - The basic loss per share amount was not adjusted for dilutive effects as the exercise of convertible bonds would result in a decrease in loss per share, and the exercise price of share options was higher than the average market price of shares[27](index=27&type=chunk) [9. Trade Receivables](index=12&type=section&id=9.%20Trade%20Receivables) As of June 30, 2025, trade receivables (net of loss allowance) primarily consisted of amounts due within one year, showing a slight increase Trade Receivables Ageing Analysis (As of June 30) | Ageing | 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Less than one year | 12,876 | 11,893 | [10. Trade Payables and Bills Payable](index=13&type=section&id=10.%20Trade%20Payables%20and%20Bills%20Payable) As of June 30, 2025, total trade payables and bills payable decreased to RMB 19.086 billion from year-end 2024, with a significant portion still due in over one year Trade Payables and Bills Payable Ageing Analysis (As of June 30) | Ageing | 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Less than one year | 2,114,126 | 5,791,773 | | Over one year | 16,972,134 | 17,294,168 | | **Total** | **19,086,260** | **23,085,941** | [Chairman's Report](index=14&type=section&id=Chairman%27s%20Report) The Chairman's Report provides an overview of the company's interim performance, market review, operational highlights, and strategic outlook for the second half of 2025 [Interim Dividend](index=14&type=section&id=Interim%20Dividend) The Board of Directors has resolved not to declare an interim dividend for the six months ended June 30, 2025 - The company will not declare an interim dividend for the first half of 2025[31](index=31&type=chunk) [Interim Results](index=14&type=section&id=Interim%20Results) For the six months ended June 30, 2025, revenue significantly decreased by 77.4% to RMB 5.13 billion, but the loss attributable to owners narrowed to RMB 780 million, an improvement from the prior year Interim Results Overview (For the six months ended June 30) | Metric | 2025 (RMB) | 2024 (RMB) | | :--- | :--- | :--- | | Revenue | 5.13 billion | 22.70 billion | | Loss attributable to owners of the Company | 0.78 billion | 1.71 billion | [Review of the First Half of 2025](index=14&type=section&id=Review%20of%20the%20First%20Half%20of%202025) The first half of 2025 saw a complex global economic environment and a resilient Chinese economy with supportive real estate policies, yet market confidence remained weak, leading to a 34% decrease in contracted sales for the company - The global political and economic environment is complex, with high US interest rates increasing recession risks and geopolitical conflicts exacerbating uncertainties[33](index=33&type=chunk) - China's economy grew by **5.3%** in the first half, with the government continuously introducing pro-growth and real estate support policies, including elevating the real estate policy tone to "continuously consolidate stability" and implementing interest rate and reserve requirement ratio cuts, though market confidence remains insufficient[33](index=33&type=chunk) 2025 First Half Contracted Sales | Metric | Amount (RMB) | Year-on-year change | | :--- | :--- | :--- | | Contracted Sales Amount | 6.38 billion | Decreased by approximately 34% | [Property Delivery](index=15&type=section&id=Property%20Delivery) In the first half of 2025, the company delivered approximately 15,000 property units, ranking among China's top 10 developers, ensuring smooth and stable delivery through enhanced management - In the first half of 2025, the company completed the delivery of approximately **15,000 property units**, ranking among the top 10 real estate developers in China[35](index=35&type=chunk) [Land Bank](index=15&type=section&id=Land%20Bank) Given market uncertainties, the company acquired no new land in the first half of 2025, maintaining a total land bank of approximately 20.1 million square meters across five major economic regions as of June 30 - In the first half of 2025, the company did not acquire any new land[36](index=36&type=chunk) - As of June 30, 2025, the total land bank had a gross floor area of approximately **20.1 million square meters**, covering five major economic regions nationwide[36](index=36&type=chunk) [Debt Management](index=15&type=section&id=Debt%20Management) The company reduced total interest-bearing debt to RMB 18.38 billion by managing cash flow, accelerating sales, and pausing land acquisitions, while actively negotiating debt extensions and completing offshore debt consent solicitations to alleviate pressure Total Interest-Bearing Debt (As of June 30) | Metric | Amount (RMB) | | :--- | :--- | | Total interest-bearing debt | 18.38 billion | | Onshore interest-bearing debt | 10.10 billion | | Offshore interest-bearing debt | 8.28 billion | - As of June 30, 2025, cash and bank balances totaled approximately **RMB 4.29 billion**, with most cash subject to pre-sale cash supervision[37](index=37&type=chunk) - The company actively negotiated loan extensions with onshore banks and completed a Hong Kong scheme of arrangement in March 2024 to effectively extend offshore debt maturities, further completing offshore debt consent solicitations in June 2025 to improve its financial position[38](index=38&type=chunk) [Outlook for the Second Half of 2025](index=16&type=section&id=Outlook%20for%20the%20Second%20Half%20of%202025) For the second half of 2025, the company anticipates a slow and long recovery for the real estate sector despite supportive government policies, focusing on financial safety, operational liquidity, debt stability, risk control, smooth delivery, cost savings, and organizational efficiency - Proactive central government policies are expected to boost market confidence, but the real estate sector's recovery will be slow and prolonged, with effective market demand needing improvement[39](index=39&type=chunk) - The company will continue to focus on **financial safety**, **operational liquidity**, **debt stability**, **risk control**, **smooth delivery**, **cost savings**, and **management efficiency enhancement**[39](index=39&type=chunk) [Management Discussion and Analysis](index=17&type=section&id=Management%20Discussion%20and%20Analysis) This section provides a detailed analysis of the company's operational and financial performance, including property development, revenue, costs, and liquidity for the interim period [Property Development](index=17&type=section&id=Property%20Development) In the first half of 2025, contracted sales and area decreased by approximately 34-35%, with an average selling price of RMB 10,700 per square meter, while completed properties held for sale slightly increased and no new land was acquired [Contracted Sales](index=17&type=section&id=Contracted%20Sales) Contracted Sales Data (For the six months ended June 30) | Metric | 2025 | 2024 | Year-on-year change | | :--- | :--- | :--- | :--- | | Contracted Sales Amount | Approximately RMB 6.38 billion | - | Decreased by approximately 33.9% | | Contracted Sales Area | Approximately 596,000 square meters | - | Decreased by approximately 35.0% | | Average Selling Price | Approximately RMB 10,700/square meter | - | - | [Completed Properties Held for Sale](index=17&type=section&id=Completed%20Properties%20Held%20for%20Sale) Completed Properties Held for Sale (As of June 30) | Metric | 2025 (RMB million) | December 31, 2024 (RMB million) | | :--- | :--- | :--- | | Completed properties | 17,174.8 | 17,049.9 | [Properties Under Development](index=17&type=section&id=Properties%20Under%20Development) Properties Under Development (As of June 30) | Metric | 2025 (RMB million) | December 31, 2024 (RMB million) | | :--- | :--- | :--- | | Properties under development | 35,668.8 | 41,854.9 | [Land Bank](index=17&type=section&id=Land%20Bank) - The company did not acquire any new land plots during the six months ended June 30, 2025[45](index=45&type=chunk) - As of June 30, 2025, the total land bank was approximately **20.1 million square meters**, of which completed properties available for sale/lease accounted for approximately **6.0 million square meters**, and properties under development and for further development accounted for approximately **14.1 million square meters**[45](index=45&type=chunk) [Revenue](index=18&type=section&id=Revenue) For the six months ended June 30, 2025, total revenue significantly decreased by 77.4% to RMB 5.13 billion, primarily due to a 77.5% reduction in property sales revenue, alongside declines in recognized GFA and average selling price Revenue Details (For the six months ended June 30) | Revenue Source | 2025 (RMB thousand) | 2024 (RMB thousand) | Change | | :--- | :--- | :--- | :--- | | Property sales | 5,081,571 | 22,547,839 | -77.5% | | Other services | 42,440 | 148,793 | -71.5% | | Rental income | 5,788 | 4,527 | +27.9% | | **Total** | **5,129,799** | **22,701,159** | **-77.4%** | Recognized Property Sales Data (For the six months ended June 30) | Metric | 2025 | 2024 | Change | | :--- | :--- | :--- | :--- | | Recognized Gross Floor Area | 542,566 square meters | 1,738,391 square meters | -68.8% | | Recognized Average Selling Price | RMB 9,366/square meter | RMB 12,971/square meter | -27.8% | [Cost of Sales](index=18&type=section&id=Cost%20of%20Sales) For the six months ended June 30, 2025, cost of sales decreased by 72.5% to RMB 6.18 billion, but impairment losses on properties under development and completed properties held for sale included therein increased, reflecting challenging market conditions Cost of Sales and Impairment Losses (For the six months ended June 30) | Metric | 2025 (RMB million) | 2024 (RMB million) | Change Rate | | :--- | :--- | :--- | :--- | | Cost of sales | 6,180.1 | 22,495.9 | -72.5% | | Property impairment losses included in cost of sales | 1,154.4 | 882.8 | +30.8% | [Gross (Loss)/Profit](index=19&type=section&id=Gross%20%28Loss%29%2FProfit) For the six months ended June 30, 2025, the company shifted from a gross profit to a gross loss of RMB 1.05 billion, with the gross margin plummeting from 0.9% to -20.5%, mainly due to lower sales, reduced margins, and increased property impairment provisions Gross Profit and Gross Margin (For the six months ended June 30) | Metric | 2025 (RMB million) | 2024 (RMB million) | | :--- | :--- | :--- | | Gross (loss)/profit | (1,050.3) | 205.2 | | Gross margin | -20.5% | 0.9% | [Other Income and Gains](index=19&type=section&id=Other%20Income%20and%20Gains) For the six months ended June 30, 2025, other income and gains surged by 265.0% to RMB 1.925 billion, primarily driven by gains from the revision of priority notes and convertible bonds - Other income and gains primarily include gains arising from the revision of priority notes and convertible bonds, net gains from fair value changes of derivative financial instruments, and changes in provisions for financial guarantee contracts[50](index=50&type=chunk) Other Income and Gains (For the six months ended June 30) | Metric | 2025 (RMB million) | 2024 (RMB million) | Change Rate | | :--- | :--- | :--- | :--- | | Total other income and gains | 1,925.3 | 527.4 | +265.0% | [Selling and Distribution Expenses](index=19&type=section&id=Selling%20and%20Distribution%20Expenses) For the six months ended June 30, 2025, selling and distribution expenses decreased by 23.0% to RMB 189 million, mainly due to reduced marketing activities and promotional budgets amid a weak real estate market Selling and Distribution Expenses (For the six months ended June 30) | Metric | 2025 (RMB million) | 2024 (RMB million) | Change Rate | | :--- | :--- | :--- | :--- | | Selling and distribution expenses | 189.2 | 245.7 | -23.0% | [Administrative Expenses](index=19&type=section&id=Administrative%20Expenses) For the six months ended June 30, 2025, administrative expenses slightly decreased by 0.9% to RMB 298 million, reflecting the company's ongoing cost control efforts, particularly in staff costs and consulting fees Administrative Expenses (For the six months ended June 30) | Metric | 2025 (RMB million) | 2024 (RMB million) | Change Rate | | :--- | :--- | :--- | :--- | | Administrative expenses | 297.6 | 300.4 | -0.9% | [Other Expenses and Other Net Losses](index=19&type=section&id=Other%20Expenses%20and%20Other%20Net%20Losses) For the six months ended June 30, 2025, other expenses increased to RMB 971 million due to losses from disposal of subsidiaries, joint ventures, and associates, as well as exchange losses, while total other net losses expanded due to increased financial asset impairment losses Other Expenses and Net Losses (For the six months ended June 30) | Metric | 2025 (RMB million) | 2024 (RMB million) | | :--- | :--- | :--- | | Other expenses | 970.7 | 930.1 | | Total other net losses | 118.8 | 85.7 | - The increase in other expenses was primarily due to losses from the disposal of subsidiaries, joint ventures, and associates, and the recognition of exchange losses[53](index=53&type=chunk) - The expansion of total other net losses was mainly due to increased impairment losses on financial assets at fair value through profit or loss[54](index=54&type=chunk) [Finance Income](index=20&type=section&id=Finance%20Income) For the six months ended June 30, 2025, company finance income decreased by 50.4% to RMB 8.4 million, primarily due to lower bank interest income Finance Income (For the six months ended June 30) | Metric | 2025 (RMB million) | 2024 (RMB million) | Change Rate | | :--- | :--- | :--- | :--- | | Finance income | 8.4 | 16.9 | -50.4% | [Finance Costs](index=20&type=section&id=Finance%20Costs) For the six months ended June 30, 2025, company finance costs significantly increased by 183.4% to RMB 397 million, with total expensed and capitalized finance costs also increasing by 9.2% to RMB 683 million Finance Costs (For the six months ended June 30) | Metric | 2025 (RMB million) | 2024 (RMB million) | Change Rate | | :--- | :--- | :--- | :--- | | Finance costs | 396.5 | 139.9 | +183.4% | | Total expensed and capitalized finance costs | 682.9 | 625.3 | +9.2% | [Share of Profits of Joint Ventures and Associates](index=20&type=section&id=Share%20of%20Profits%20of%20Joint%20Ventures%20and%20Associates) For the six months ended June 30, 2025, the company's share of joint ventures and associates shifted from a profit to a loss of RMB 97.5 million, mainly due to reduced sales and operating profits, and increased impairment provisions for investments Share of Profits/Losses of Joint Ventures and Associates (For the six months ended June 30) | Item | 2025 (RMB million) | 2024 (RMB million) | | :--- | :--- | :--- | | Share of profits of joint ventures | 62.3 | 50.1 | | Share of losses of associates | (159.8) | 19.1 (Profit) | | **Consolidated share of losses of joint ventures and associates** | **(97.5)** | **69.2 (Profit)** | [Loss Before Tax](index=20&type=section&id=Loss%20Before%20Tax) For the six months ended June 30, 2025, company loss before tax widened to RMB 1.187 billion, an increase from RMB 883 million in the prior year Loss Before Tax (For the six months ended June 30) | Metric | 2025 (RMB million) | 2024 (RMB million) | | :--- | :--- | :--- | | Loss before tax | (1,186.8) | (882.9) | [Loss for the Period and Loss Attributable to Owners of the Company](index=21&type=section&id=Loss%20for%20the%20Period%20and%20Loss%20Attributable%20to%20Owners%20of%20the%20Company) For the six months ended June 30, 2025, loss for the period decreased by 29.5% to RMB 1.381 billion, and loss attributable to owners of the company narrowed by 54.3% to RMB 781 million Loss for the Period and Loss Attributable to Owners (For the six months ended June 30) | Metric | 2025 (RMB million) | 2024 (RMB million) | Change Rate | | :--- | :--- | :--- | :--- | | Loss for the period | (1,380.5) | (1,957.4) | -29.5% | | Loss attributable to owners of the Company for the period | (781.3) | (1,708.9) | -54.3% | [Liquidity, Financial and Capital Resources](index=21&type=section&id=Liquidity%2C%20Financial%20and%20Capital%20Resources) The company experienced a decline in net current assets and cash balances, indicating liquidity challenges, while total interest-bearing debt decreased to RMB 18.38 billion, with ongoing efforts to manage financial risks and improve liquidity [Net Current Assets](index=21&type=section&id=Net%20Current%20Assets) Net Current Assets (As of June 30) | Metric | 2025 (RMB million) | December 31, 2024 (RMB million) | Change Rate | | :--- | :--- | :--- | :--- | | Total current assets | 107,387.4 | 116,941.2 | -8.2% | | Total current liabilities | 94,270.8 | 102,022.8 | -7.6% | | Net current assets | 13,116.6 | 14,918.4 | -12.0% | [Cash Position](index=21&type=section&id=Cash%20Position) Cash and Bank Balances (As of June 30) | Metric | 2025 (RMB million) | December 31, 2024 (RMB million) | Change Rate | | :--- | :--- | :--- | :--- | | Cash and bank balances | 4,295.0 | 5,740.5 | -25.2% | - Most cash is subject to local government pre-sale cash supervision to ensure the completion of properties under development[63](index=63&type=chunk) [Financial Ratios](index=22&type=section&id=Financial%20Ratios) Financial Ratios (As of June 30) | Metric | 2025 | | :--- | :--- | | Gearing ratio excluding contract liabilities | Approximately 81.5% | | Net debt to equity ratio | Approximately 79.7% | | Unrestricted cash to short-term borrowings ratio | Approximately 0.39 | [Debt](index=22&type=section&id=Debt) Total Outstanding Debt (As of June 30) | Debt Type | 2025 (RMB million) | December 31, 2024 (RMB million) | Change Rate | | :--- | :--- | :--- | :--- | | Bank and other borrowings | 10,392.5 | 11,162.2 | -6.9% | | Priority notes | 7,641.8 | 8,659.4 | -11.7% | | Convertible bonds | 346.5 | 429.1 | -19.3% | | **Total Debt** | **18,380.8** | **20,250.7** | **-9.2%** | Total Debt Details (As of June 30) | Category | 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Total current debt | 7,417,945 | 8,609,387 | | Total non-current debt | 10,962,898 | 11,641,355 | | Secured debt | 16,863,481 | 18,766,762 | | Unsecured debt | 1,517,362 | 1,483,980 | | Fixed-rate debt | 15,875,639 | 17,518,190 | | Floating-rate debt | 2,505,204 | 2,732,552 | | RMB-denominated debt | 10,101,338 | 10,869,837 | | USD-denominated debt | 8,279,505 | 9,380,905 | - As of June 30, 2025, the company's borrowings were secured by assets totaling approximately **RMB 20.142 billion**, primarily properties under development[70](index=70&type=chunk) [Financial Risks](index=25&type=section&id=Financial%20Risks) - The company faces transaction currency risk (no foreign exchange hedging) and market interest rate fluctuation risk (no interest rate hedging)[71](index=71&type=chunk) - The company will continue to explore various ways to generate cash flow, including securing project development loans, seeking alternative financing, accelerating property sales, recovering sales proceeds, controlling costs, and disposing of equity in project companies, to improve liquidity[72](index=72&type=chunk) [Contingent Liabilities](index=26&type=section&id=Contingent%20Liabilities) As of June 30, 2025, the company provided mortgage guarantees of approximately RMB 13.104 billion for property buyers and financial guarantees of up to RMB 4.23 billion for joint ventures and associates, with directors believing these will not result in significant losses or adverse legal impacts [Mortgage Guarantees](index=26&type=section&id=Mortgage%20Guarantees) Total Mortgage Guarantees (As of June 30) | Metric | 2025 (RMB million) | December 31, 2024 (RMB million) | | :--- | :--- | :--- | | Total outstanding guarantees | 13,104.2 | 17,516.6 | - The guarantee period extends from the date of mortgage loan issuance until buyers receive their property ownership certificates and complete registration, and the company believes the net realizable value of the related properties is sufficient to cover outstanding mortgage loans[73](index=73&type=chunk) [Financial Guarantees](index=26&type=section&id=Financial%20Guarantees) Total Financial Guarantees (As of June 30) | Metric | 2025 (RMB million) | December 31, 2024 (RMB million) | | :--- | :--- | :--- | | Guarantees provided for joint ventures and associates | 4,229.5 | 4,644.9 | [Legal Contingencies](index=26&type=section&id=Legal%20Contingencies) - The company believes that legal proceedings in its ordinary course of business will not have a material adverse effect on its business, financial condition, or operating results[75](index=75&type=chunk) [Commitments](index=27&type=section&id=Commitments) As of June 30, 2025, the company's total contracted but unprovided property development expenditures, land use rights acquisitions, and capital contributions to joint ventures and associates amounted to RMB 12.77 billion, a decrease from year-end 2024 Total Commitments (As of June 30) | Metric | 2025 (RMB million) | December 31, 2024 (RMB million) | | :--- | :--- | :--- | | Property development expenditures, land use rights acquisitions, and capital contributions to joint ventures and associates | 12,770.1 | 13,840.2 | [Off-Balance Sheet Commitments and Arrangements](index=27&type=section&id=Off-Balance%20Sheet%20Commitments%20and%20Arrangements) As of June 30, 2025, the company had no significant off-balance sheet commitments or arrangements beyond the disclosed contingent liabilities - As of June 30, 2025, the company had no significant off-balance sheet commitments or arrangements[77](index=77&type=chunk) [Material Investments Held, Material Acquisitions and Disposals of Subsidiaries, Associates and Joint Ventures, and Future Plans for Material Investments or Capital Assets](index=27&type=section&id=Material%20Investments%20Held%2C%20Material%20Acquisitions%20and%20Disposals%20of%20Subsidiaries%2C%20Associates%20and%20Joint%20Ventures%2C%20and%20Future%20Plans%20for%20Material%20Investments%20or%20Capital%20Assets) For the six months ended June 30, 2025, the company had no material investments, acquisitions, or disposals of subsidiaries, associates, or joint ventures outside its ordinary course of business, nor any authorized plans for future material investments or capital asset additions - During this period, the company had no material investments, acquisitions, or disposals, nor any future plans for material investments or capital asset additions[78](index=78&type=chunk) [Employees and Remuneration Policies](index=27&type=section&id=Employees%20and%20Remuneration%20Policies) As of June 30, 2025, the company employed 1,873 full-time staff, with employee costs decreasing to RMB 236 million, offering competitive remuneration packages including basic salary, bonuses, performance pay, share options, and share awards Employees and Remuneration Costs (For the six months ended June 30) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Number of full-time employees | 1,873 | - | | Employee costs (RMB million) | 236.3 | 276.2 | [Other Information](index=27&type=section&id=Other%20Information) This section covers corporate governance, compliance, interim dividend policy, securities transactions, audit committee review, post-reporting period events, and board composition [Corporate Governance Practices](index=27&type=section&id=Corporate%20Governance%20Practices) The company is committed to high standards of corporate governance, having adopted and complied with all applicable code provisions of the Corporate Governance Code for the six months ended June 30, 2025 - The company has adopted the Corporate Governance Code and complied with all applicable code provisions during this period[80](index=80&type=chunk) [Compliance with the Model Code for Securities Transactions by Directors](index=28&type=section&id=Compliance%20with%20the%20Model%20Code%20for%20Securities%20Transactions%20by%20Directors) The company has adopted the Model Code for Securities Transactions by Directors, and all directors confirmed compliance for the six months ended June 30, 2025 - All directors confirmed compliance with the Model Code for Securities Transactions by Directors as set out in Appendix C3 of the Listing Rules[81](index=81&type=chunk) [Interim Dividend](index=28&type=section&id=Interim%20Dividend) The Board of Directors has resolved not to 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 first half of 2025[82](index=82&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=28&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company%27s%20Listed%20Securities) For the six months ended June 30, 2025, neither the company nor its subsidiaries purchased, sold, or redeemed any listed securities, and the company held no treasury shares - During this period, neither the company nor its subsidiaries purchased, sold, or redeemed any listed securities, and there were no treasury shares[83](index=83&type=chunk) [Audit Committee](index=28&type=section&id=Audit%20Committee) The Audit Committee, comprising three independent non-executive directors and chaired by Mr. Ouyang Baofeng, has reviewed the Group's interim results for the six months ended June 30, 2025 - The Audit Committee comprises three independent non-executive directors: Mr. Ouyang Baofeng (Chairman), Mr. Wang Kaiguo, and Mr. Wu Xiaobo[84](index=84&type=chunk) - The Audit Committee has reviewed the Group's interim results for the six months ended June 30, 2025[84](index=84&type=chunk) [Events After the Reporting Period](index=28&type=section&id=Events%20After%20the%20Reporting%20Period) As of the announcement date, no significant events have occurred after the reporting period that would materially impact the company's performance - No significant events have occurred after the reporting period up to the date of this announcement that would materially impact the company's performance[85](index=85&type=chunk) [Board of Directors](index=29&type=section&id=Board%20of%20Directors) As of the announcement date, the Board of Directors comprises five executive directors and three independent non-executive directors - The Board of Directors comprises five executive directors (Yang Jian, Chen Hongliang, He Jian, Yang Deye, Hu Hui) and three independent non-executive directors (Wang Kaiguo, Wu Xiaobo, Ouyang Baofeng)[86](index=86&type=chunk) [Publication of Interim Results and Interim Report on HKEX and the Company's Website](index=29&type=section&id=Publication%20of%20Interim%20Results%20and%20Interim%20Report%20on%20HKEX%20and%20the%20Company%27s%20Website) This announcement has been published on the HKEX and company websites, with the interim report to be dispatched to shareholders and posted on these websites in due course - This announcement has been published on the HKEX website (www.hkexnews.hk) and the company's website (www.zldcgroup.com)[87](index=87&type=chunk) [Glossary and Definitions](index=30&type=section&id=Glossary%20and%20Definitions) This section provides definitions for key terms and abbreviations used throughout the report, ensuring clarity and consistent understanding of financial and operational terminology - This section provides definitions for key terms and abbreviations used in the report, including Average Selling Price, Board, China, Contracted Sales, Corporate Governance Code, Directors, Gross Floor Area, Gross Margin, Group, Hong Kong, Listing Rules, Listing, Model Code, Net Gearing Ratio, Shares, Shareholders, Stock Exchange, Total Debt, and Zhongliang/the Company[88](index=88&type=chunk)[89](index=89&type=chunk)[90](index=90&type=chunk)

[Financial Highlights](index=1&type=section&id=%E8%B4%A2%E5%8A%A1%E6%91%98%E8%A6%81) Zhongcheng Energy Holdings Limited reported a 20% year-on-year revenue decrease and a loss attributable to equity holders of RMB 7.3 million for H1 2025 Key Financial Data Comparison for H1 2025 | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 3,082.0 | 3,839.4 | -20% | | Loss/Profit Attributable to Equity Holders | (7.3) | 27.0 | From profit to loss | | Basic Loss/Earnings Per Share (RMB) | (0.02) | 0.07 | From profit to loss | [Financial Statements](index=2&type=section&id=%E8%B4%A2%E5%8A%A1%E6%8A%A5%E8%A1%A8) This section presents the unaudited condensed consolidated interim financial statements for H1 2025, including income, comprehensive income, and financial position statements [Consolidated Income Statement](index=2&type=section&id=%E7%BB%BC%E5%90%88%E6%8D%9F%E7%9B%8A%E8%A1%A8) Revenue declined 20% to RMB 3,082.0 million, resulting in reduced gross profit and a loss of RMB 7.3 million attributable to equity holders Key Data from Consolidated Income Statement | Metric | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Revenue | 3,082,015 | 3,839,411 | | Cost of sales | (2,930,716) | (3,627,383) | | Gross profit | 151,299 | 212,028 | | Operating profit | 6,990 | 55,242 | | Loss/Profit before tax | (5,321) | 42,070 | | Loss/Profit for the period | (5,832) | 27,940 | | Loss/Profit attributable to equity holders of the Company | (7,278) | 26,970 | | Basic Loss/Earnings Per Share (RMB) | (0.02) | 0.07 | [Consolidated Statement of Comprehensive Income](index=3&type=section&id=%E7%BB%BC%E5%90%88%E6%8D%9F%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) Total comprehensive income shifted from a RMB 28.8 million profit to a RMB 6.4 million loss, driven by period loss and foreign exchange differences Key Data from Consolidated Statement of Comprehensive Income | Metric | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Loss/Profit for the period | (5,832) | 27,940 | | Exchange differences on translation of financial statements denominated in foreign currencies | (531) | 893 | | Total comprehensive income for the period | (6,363) | 28,833 | | Total comprehensive income attributable to equity holders of the Company | (7,859) | 27,886 | [Consolidated Statement of Financial Position](index=4&type=section&id=%E7%BB%BC%E5%90%88%E8%B4%A2%E5%8A%A1%E7%8A%B6%E5%86%B5%E8%A1%A8) Total assets increased, but net assets slightly decreased, and current liabilities significantly rose, leading to a higher debt ratio as of June 30, 2025 Key Data from Consolidated Statement of Financial Position | Metric | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Non-current assets | 534,833 | 543,559 | | Current assets | 1,899,729 | 1,333,724 | | Current liabilities | 1,725,551 | 1,101,023 | | Non-current liabilities | 181,649 | 228,305 | | Net assets | 527,362 | 547,955 | | Total equity | 527,362 | 547,955 | [Notes to the Financial Statements](index=6&type=section&id=%E8%B4%A2%E5%8A%A1%E6%8A%A5%E8%A1%A8%E9%99%84%E6%B3%A8) This section details the basis of preparation, accounting policy changes, revenue, segment reporting, income, tax, EPS, receivables, prepayments, and dividends [Basis of Preparation and Changes in Accounting Policies](index=6&type=section&id=%E7%BC%96%E8%A3%BD%E5%9F%BA%E5%87%86%E5%8F%8A%E4%BC%9A%E8%AE%A1%E6%94%BF%E7%AD%96%E5%8F%98%E5%8A%A8) Interim financial report prepared under Listing Rules and IAS 34, with HKAS 21 amendments applied but no significant impact due to no foreign currency transactions - The interim financial report is prepared under Listing Rules and IAS 34, and reviewed by KPMG[9](index=9&type=chunk)[10](index=10&type=chunk) - The Group applied amendments to HKAS 21, with no significant impact due to the absence of foreign currency transactions[13](index=13&type=chunk) Number of Gas and Petrol Stations and Oil Storage Facilities | Type | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Gas and petrol stations owned by the Group | 38 | 38 | | Oil storage facilities owned by the Group | 2 | 2 | | Gas and petrol stations operated under management agreements | 39 | 39 | | Oil storage facilities operated under management agreements | 1 | 1 | [Revenue and Segment Reporting](index=7&type=section&id=%E6%94%B6%E7%9B%8A%E5%8F%8A%E5%88%86%E9%83%A8%E6%8A%A5%E5%91%8A) Total revenue decreased 20% year-on-year, primarily due to reduced refined oil and natural gas sales, with all business segments experiencing declines [Revenue Breakdown](index=7&type=section&id=%E6%94%B6%E7%9B%8A%E6%98%8E%E7%BB%86) Sales of refined oil and natural gas generated RMB 3,050.3 million, a 19.5% year-on-year decrease, driving the overall revenue decline Revenue Breakdown from Customer Contracts by Major Product or Service Line | Product/Service | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Sales of refined oil and natural gas | 3,050,307 | 3,790,626 | | Transportation service revenue | 31,699 | 37,807 | | Franchise service revenue | – | 9,411 | | Revenue from trading of compressed natural gas and liquefied petroleum gas | 9 | 1,567 | | **Total Revenue** | **3,082,015** | **3,839,411** | [Segment Results](index=7&type=section&id=%E5%88%86%E9%83%A8%E4%B8%9A%E7%BB%A9) All three reportable segments—refined oil, natural gas, and transportation services—saw declines in revenue and gross profit, with natural gas sales decreasing most - The Group is managed by business lines, divided into three reportable segments: sales of refined oil, sales of natural gas, and provision of transportation services[19](index=19&type=chunk) Revenue and Gross Profit by Reportable Segment | Segment | H1 2025 Revenue (RMB thousand) | H1 2024 Revenue (RMB thousand) | H1 2025 Gross Profit (RMB thousand) | H1 2024 Gross Profit (RMB thousand) | | :--- | :--- | :--- | :--- | :--- | | Sales of refined oil | 2,975,427 | 3,660,728 | 100,752 | 138,908 | | Sales of natural gas | 74,889 | 140,876 | 19,272 | 30,951 | | Provision of transportation services | 31,699 | 37,807 | 31,275 | 42,169 | | **Total** | **3,082,015** | **3,839,411** | **151,299** | **212,028** | [Geographical Information](index=9&type=section&id=%E5%9C%B0%E7%90%86%E8%B5%84%E6%96%99) All of the Group's customers, non-current assets, and associates are exclusively located in China - All of the Group's customers, non-current assets (including property, plant and equipment and investment properties), and associates are located in China[24](index=24&type=chunk) [Other Income](index=9&type=section&id=%E5%85%B6%E4%BB%96%E6%94%B6%E5%85%A5) Other income, primarily rental income from operating leases, totaled RMB 3.4 million, a slight decrease from the prior period Other Income Breakdown | Item | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Rental income from operating leases | 1,387 | 2,063 | | Net gain/(loss) on disposal of property, plant and equipment | 309 | (245) | | Interest income | 301 | 700 | | Others | 1,442 | 1,067 | | **Total** | **3,439** | **3,585** | [Details of Loss/Profit Before Tax](index=10&type=section&id=%E9%99%A4%E7%A8%8E%E5%89%8D%EF%BC%88%E4%B8%8B%E8%B7%8C%EF%BC%89%EF%BC%8F%E6%BA%A2%E5%88%A9%E6%98%8E%E7%BB%86) This section details key cost items impacting loss/profit before tax, including finance, staff, depreciation, lease, and inventory costs Breakdown of Costs Related to Loss/Profit Before Tax | Item | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Finance costs | 13,066 | 13,696 | | Staff costs | 78,646 | 83,108 | | Depreciation expense | 30,372 | 32,652 | | Operating lease expenses for short-term leases and leases of low-value assets | 2,440 | 2,192 | | Cost of inventories | 2,925,154 | 3,620,297 | [Income Tax](index=10&type=section&id=%E6%89%80%E5%BE%97%E7%A8%8E) Income tax decreased 96% to RMB 0.5 million due to a pre-tax loss, with varying corporate tax rates and preferential rates applied Income Tax Breakdown | Item | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Current tax - Provision for the period | 12,319 | 21,705 | | Deferred tax - Origination and reversal of temporary differences | (11,808) | (7,575) | | **Total Income Tax** | **511** | **14,130** | - Chinese subsidiaries (excluding Hong Kong) are subject to a **25% corporate income tax rate**, with preferential rates of **5% for small-scale operations** and **15% for high-tech enterprises**[30](index=30&type=chunk) [Loss/Earnings Per Share](index=11&type=section&id=%E6%AF%8F%E8%82%A1%EF%BC%88%E4%B8%8B%E8%B7%8C%EF%BC%89%EF%BC%8F%E7%9B%88%E5%88%A9) Basic loss per share was RMB 0.02 for H1 2025, compared to RMB 0.07 earnings per share last year, with no potential dilutive ordinary shares Loss/Earnings Per Share | Metric | H1 2025 (RMB) | H1 2024 (RMB) | | :--- | :--- | :--- | | Basic Loss/Earnings Per Share | (0.02) | 0.07 | | Number of ordinary shares in issue | 374,502,000 | 374,502,000 | - There were no potential dilutive ordinary shares for the six months ended June 30, 2025 and 2024[28](index=28&type=chunk) [Trade and Bills Receivables](index=11&type=section&id=%E8%B4%B8%E6%98%93%E5%BA%94%E6%94%B6%E6%AC%BE%E9%A1%B9%E5%8F%8A%E5%BA%94%E6%94%B6%E7%A5%A8%E6%8D%AE) Total trade and bills receivables significantly increased to RMB 173.1 million as of June 30, 2025, primarily due to higher bills receivables Trade and Bills Receivables | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Trade receivables (net of loss allowance) | 32,966 | 29,630 | | Bills receivables | 140,093 | 66,000 | | **Total** | **173,059** | **95,630** | Ageing Analysis of Trade Receivables | Ageing | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Within 1 month | 25,858 | 25,115 | | 1 to 3 months | 6,490 | 3,006 | | 3 to 6 months | 618 | 1,509 | | **Total** | **32,966** | **29,630** | [Prepayments, Deposits and Other Receivables](index=12&type=section&id=%E9%A2%84%E4%BB%98%E6%AC%BE%E9%A1%B9%E3%80%81%E6%8C%89%E9%87%91%E5%8F%8A%E5%85%B6%E4%BB%96%E5%BA%94%E6%94%B6%E6%AC%BE%E9%A1%B9) Prepayments, deposits, and other receivables increased to RMB 1,121.0 million, mainly due to higher prepayments to related parties for inventory and services Breakdown of Prepayments, Deposits and Other Receivables | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Prepayments for purchase of inventories and services - related parties | 874,159 | 630,468 | | Prepayments for purchase of inventories and services - third parties | 222,279 | 255,985 | | Deposits made to suppliers | 3,985 | 3,817 | | Advances to employees | 729 | 717 | | Recoverable VAT | 9,817 | 8,730 | | Amounts due from non-controlling interests of subsidiaries | – | 24,054 | | Others | 10,016 | 9,453 | | Financial assets measured at amortised cost | 24,547 | 46,771 | | **Total** | **1,120,985** | **933,224** | - All prepayments, deposits, and other receivables are expected to be recovered or recognized as expenses within one year[32](index=32&type=chunk) [Trade and Bills Payables](index=13&type=section&id=%E8%B4%B8%E6%98%93%E5%BA%94%E4%BB%98%E6%AC%BE%E9%A1%B9%E5%8F%8A%E5%BA%94%E4%BB%98%E7%A5%A8%E6%8D%AE) Total trade and bills payables significantly increased to RMB 286.8 million as of June 30, 2025, primarily due to higher bills payables Trade and Bills Payables | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Trade payables to third parties | 1,822 | 2,748 | | Bills payables | 285,000 | – | | **Total** | **286,822** | **2,748** | Ageing Analysis of Trade Payables | Ageing | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Within 1 month | 1,812 | 2,738 | | Over 3 months | 10 | 10 | | **Total** | **1,822** | **2,748** | [Dividends](index=13&type=section&id=%E8%82%A1%E6%81%AF) The Board does not recommend an interim dividend for H1 2025, and no past financial year dividends were approved, unlike the prior period - The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025 (2024: RMB nil)[35](index=35&type=chunk) Approval Status of Past Financial Year and Special Dividends | Dividend Type | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Final dividend for past financial year (HKD 0.04 per share) | – | 13,872 | | Special dividend approved during the period (HKD 0.08 per share) | – | 27,345 | [Management Discussion and Analysis](index=14&type=section&id=%E7%AE%A1%E7%90%86%E5%B1%82%E8%AE%A8%E8%AE%BA%E5%8F%8A%E5%88%86%E6%9E%90) This section reviews H1 2025 industry, business, and financial performance, outlining future directions amid challenges from oil price volatility and EV penetration [Business and Financial Review](index=14&type=section&id=%E4%B8%9A%E5%8A%A1%E5%8F%8A%E8%B4%A2%E5%8A%A1%E5%9B%9E%E9%A1%B5) H1 2025 saw fluctuating oil prices, China's oil demand transformation, and natural gas market shifts, impacting sales and transport revenue, resulting in a loss despite stable finances [Industry Overview](index=14&type=section&id=%E8%A1%8C%E4%B8%9A%E6%A6%82%E8%A7%88) H1 2025 saw volatile oil prices, China's shifting oil demand, and global natural gas price declines, though China's natural gas consumption, especially for heavy trucks, is set for growth - International crude oil prices fluctuated in H1 2025, influenced by geopolitical risks and supply-demand dynamics[40](index=40&type=chunk) - China's crude oil demand structure is undergoing a historic shift: **declining fuel consumption** and **rising chemical consumption**[42](index=42&type=chunk) - Global natural gas supply increased, leading to lower prices due to weak demand, but China's market shows 'slight overall growth, structural transformation'[43](index=43&type=chunk)[44](index=44&type=chunk) - China's natural gas heavy truck production and sales grew strongly, with policy subsidies and oil-gas price differentials expected to stimulate market growth[46](index=46&type=chunk)[47](index=47&type=chunk) [Refined Oil Sales Business](index=16&type=section&id=%E6%88%90%E5%93%81%E6%B2%B9%E9%94%80%E5%94%AE%E4%B8%9A%E5%8A%A1) Refined oil sales revenue decreased by 19% to RMB 2,975.4 million, with a 12% volume drop, primarily due to declining market demand from EV adoption Refined Oil Sales Business Data | Metric | H1 2025 | H1 2024 | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Sales Revenue (RMB million) | 2,975.4 | 3,675.855 (Segment Revenue) | -19% | | Sales Volume (tonnes) | 433,000 | 493,000 | -12% | - Sales volume decreased primarily due to more automotive customers switching to new energy vehicles, leading to reduced market demand[48](index=48&type=chunk) [Natural Gas Sales Business](index=16&type=section&id=%E5%A4%A9%E7%84%B6%E6%B0%94%E9%94%80%E5%94%AE%E4%B8%9A%E5%8A%A1) Natural gas sales revenue decreased by 47% to RMB 74.9 million, with compressed natural gas volume down 49%, due to customers switching to EVs Natural Gas Sales Business Data | Metric | H1 2025 | H1 2024 | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Sales Revenue (RMB million) | 74.9 | 140.876 (Segment Revenue) | -47% | | Compressed Natural Gas Sales Volume (million cubic meters) | 13.4 | 26.2 | -49% | - Natural gas sales decreased primarily due to more natural gas vehicle customers switching to new energy vehicles, leading to reduced market demand[49](index=49&type=chunk) Gas and Petrol Station Locations and Products | Province/City | Gas Stations | Petrol Stations | Hybrid Stations | Total | | :--- | :--- | :--- | :--- | :--- | | Jilin Province | 13 | 35 | 9 | 57 | | Liaoning Province | – | 19 | 1 | 20 | | **Total** | **13** | **54** | **10** | **77** | [Provision of Transportation Services](index=18&type=section&id=%E6%8F%90%E4%BE%9B%E8%BF%90%E8%BE%93%E6%9C%8D%E5%8A%A1) Transportation service revenue decreased by 16% to RMB 31.7 million in H1 2025, with the company operating over 100 dangerous goods vehicles Transportation Services Business Data | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Transportation Revenue | 31.7 | 37.8 | -16% | - The company owns and manages a fleet of **over 100 dangerous goods transportation vehicles**, including 48 tractors, 45 trailers, and 30 integrated tractor-trailers for oil, and 23 tractors, 22 trailers, and 1 integrated tractor-trailer for natural gas[51](index=51&type=chunk) [Operating Results](index=18&type=section&id=%E7%BB%8F%E8%90%A5%E4%B8%9A%E7%BB%A9) Revenue decreased 20%, cost of sales fell 19%, gross margin dropped to 5%, resulting in a pre-tax loss and a net loss of RMB 5.8 million Key Operating Results Data | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 3,082.0 | 3,839.4 | -20% | | Cost of sales | 2,930.7 | 3,627.4 | -19% | | Gross profit | 151.3 | 212.0 | -28.6% | | Gross profit margin | 5% | 6% | -1% | | Impairment reversal/(loss) on trade receivables | 0.9 (reversal) | (1.0) (loss) | From loss to reversal | | Other income | 3.4 | 3.6 | -5.6% | | Staff costs | 78.6 | 83.1 | -5.4% | | Other operating expenses | 39.6 | 43.6 | -9.2% | | Finance costs | 13.1 | 13.7 | -4.4% | | Share of profit of an associate | 0.8 | 0.5 | +60% | | Loss/Profit before tax | (5.3) | 42.1 | From profit to loss | | Income tax | 0.5 | 14.1 | -96.5% | | Loss/Profit for the period | (5.8) | 27.9 | From profit to loss | [Financial Resources and Liquidity](index=20&type=section&id=%E8%B4%A2%E5%8A%A1%E8%B5%84%E6%BA%90%E5%8F%8A%E6%B5%81%E5%8B%95%E8%B3%87%E9%87%91) The Group's financial position remained stable as of June 30, 2025, with total assets increasing 30% to RMB 2,434.6 million and total equity stable at RMB 527.4 million Financial Resources Overview | Metric | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Total assets | 2,434.6 | 1,877.3 | +30% | | Total equity | 527.4 | 548.0 | -3.8% | [Capital Expenditure](index=20&type=section&id=%E8%B5%84%E6%9C%AC%E5%BC%80%E6%94%AF) Capital expenditure for H1 2025 was RMB 12.1 million, mainly for property, plant, and equipment, with period-end capital commitments of RMB 15.4 million Capital Expenditure and Commitments | Metric | June 30, 2025 (RMB million) | | :--- | :--- | | Capital expenditure | 12.1 | | Capital commitments | 15.4 | - Capital expenditure and commitments are primarily for property, plant, and equipment, expected to be funded by future operating income, bank borrowings, and other financing[63](index=63&type=chunk) [Borrowings](index=21&type=section&id=%E5%80%9F%E6%AC%BE) Total borrowings reached RMB 652.6 million as of June 30, 2025, with 98% short-term, and the debt ratio increased to 78% Borrowings Overview | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Short-term borrowings | 640,100 | 445,175 | | Long-term borrowings | 12,500 | 47,840 | | **Total Borrowings** | **652,600** | **493,015** | | Debt ratio | 78% | 71% | - Borrowings are primarily RMB-denominated, with **99% secured** and **100% fixed-rate**, ranging from **2.7% to 7.2%**[64](index=64&type=chunk) [Use of Proceeds](index=21&type=section&id=%E6%89%80%E5%BE%97%E6%AC%BE%E9%A1%B9%E7%94%A8%E9%80%94) IPO net proceeds of HKD 115.6 million were fully utilized for network expansion, marketing, working capital, acquisitions, and logistics fleet expansion Use of Proceeds from Initial Public Offering | Purpose | Revised Allocation (HKD thousand) | Utilized as of June 30, 2025 (HKD thousand) | | :--- | :--- | :--- | | Expansion of compressed natural gas station network | 19,500 | 19,500 | | Strengthening marketing and promotion strategies | 5,800 | 5,800 | | General working capital | 5,800 | 5,800 | | Acquisition of Yinquan and transfer of shareholder loans | 34,500 | 34,500 | | Expansion of oil and gas station network | 40,000 | 40,000 | | Expansion of logistics fleet | 10,000 | 10,000 | | **Total** | **115,600** | **115,600** | [Pledge of Assets](index=22&type=section&id=%E8%B5%84%E4%BA%A7%E6%8A%B5%E6%8A%BC) Bank loans and credits are pledged against RMB 65.6 million in property, plant, and equipment, with some personally guaranteed by the controlling shareholder - The Group's bank and other loans and bank acceptance bill credits are pledged against property, plant and equipment and investment properties with a total carrying value of **RMB 65.6 million**[67](index=67&type=chunk) - Some bank loans and acceptance bill credits are personally guaranteed by the ultimate controlling shareholder, Mr. Zhao Jinmin, and his spouse[67](index=67&type=chunk) [Contingent Liabilities](index=23&type=section&id=%E6%88%96%E7%84%B6%E8%B4%9F%E5%80%BA) The Board is not aware of any significant contingent liabilities as of the announcement date and June 30, 2025 - The Board is not aware of any significant contingent liabilities[68](index=68&type=chunk) [Human Resources](index=23&type=section&id=%E4%BA%BA%E5%8A%9B%E8%B5%84%E6%BA%90) As of June 30, 2025, the Group had 1,344 employees, providing benefits and performance-based remuneration, with no share options granted Human Resources Overview | Metric | June 30, 2025 | | :--- | :--- | | Total number of employees | 1,344 | - The Group participates in retirement, medical, unemployment insurance, and housing provident fund schemes for Chinese employees, and contributes to the MPF for Hong Kong employees[69](index=69&type=chunk) - No share options were granted or agreed to be granted under the share option scheme as of June 30, 2025[69](index=69&type=chunk) [Significant Acquisitions and Disposals of Subsidiaries and Associates](index=23&type=section&id=%E9%99%84%E5%B1%AC%E5%85%AC%E5%8F%B8%E5%8F%8A%E8%81%AF%E5%B1%AC%E5%85%AC%E5%8F%B8%E7%9A%84%E9%87%8D%E5%A4%A7%E6%94%B6%E8%B4%AD%E5%8F%8A%E5%87%BA%E5%94%AE%E4%BA%8B%E9%A1%B9) The Group had no significant investments, acquisitions, or disposals for the six months ended June 30, 2025 - The Group had no significant investments, acquisitions, or disposals for the six months ended June 30, 2025[70](index=70&type=chunk) [Foreign Exchange Risk Management](index=23&type=section&id=%E5%A4%96%E6%B1%87%E9%A3%8E%E9%99%A9%E7%AE%A1%E7%90%86) Sales and purchases are primarily RMB-denominated, subject to government control; no current hedging policy, but management monitors and considers hedging significant FX risks - The Group's sales and purchases are mostly denominated in RMB, which is not a freely convertible currency[71](index=71&type=chunk) - The Group currently has no foreign currency hedging policy, but management will monitor foreign exchange risks and consider hedging when necessary[71](index=71&type=chunk) [Business Outlook](index=24&type=section&id=%E4%B8%9A%E5%8A%A1%E5%B1%95%E6%9C%9B) H2 outlook anticipates moderate global growth, policy-supported Chinese economy, and declining oil/gas prices; the Group will focus on station operations, optimize distribution, and explore new energy opportunities [Future Outlook](index=24&type=section&id=%E6%9C%AA%E6%9D%A5%E5%B1%95%E6%9C%9B) Global economy to grow 2.8%, China's GDP targets 5% with policy support; oil prices face downward pressure, natural gas prices may decline, while the Group focuses on station operations and EV charging infrastructure - IMF and World Bank forecast **2.8% global economic growth** in 2025, with China's GDP targeting around **5%**, supported by ongoing policies[72](index=72&type=chunk) - IEA expects **20% global oil demand increase** in 2025, but significant supply growth will lead to overcapacity and downward pressure on oil prices[73](index=73&type=chunk) - Natural gas, a bridge in energy transition, expects **1.5% global demand growth**, but weak developed economy demand suggests further price decline[74](index=74&type=chunk) - The Group will deepen gas and petrol station operations, optimize distribution and transportation, seek transformation, explore oil and gas value chain opportunities, diversify revenue, and seize EV charging infrastructure growth[75](index=75&type=chunk) [Other Information](index=25&type=section&id=%E5%85%B6%E4%BB%96%E8%B5%84%E6%96%99) This section covers corporate governance, including code compliance, audit committee duties, directors' securities trading, public float, pre-emptive rights, and interim results publication [Corporate Governance](index=25&type=section&id=%E4%BC%81%E4%B8%9A%E7%AE%A1%E6%B2%BB) The company complied with the Corporate Governance Code, with exceptions for independent non-executive director attendance and combined Chairman/CEO roles - Certain independent non-executive directors were unable to attend the AGM due to overseas commitments, violating Corporate Governance Code Provision C.1.6[76](index=76&type=chunk) - Mr. Zhao Jinmin holds both Chairman and CEO roles, violating Corporate Governance Code Provision C.2.1, but the Board believes this provides strong, consistent leadership and effective strategy implementation[76](index=76&type=chunk)[77](index=77&type=chunk) [Audit Committee](index=26&type=section&id=%E5%AF%A9%E6%A0%B8%E5%A7%94%E5%91%98%E6%9C%83) The Audit Committee, established in 2017, reviews financial reporting, risk management, and internal controls, and has approved the H1 2025 unaudited interim financial statements - The Audit Committee's primary responsibilities include reviewing the Group's financial reporting, risk management, and internal control systems[78](index=78&type=chunk) - The Audit Committee has reviewed the unaudited condensed consolidated interim financial statements for H1 2025 and found them compliant with applicable accounting standards and requirements[79](index=79&type=chunk) [Review of Interim Financial Information](index=26&type=section&id=%E5%AF%A9%E9%96%B1%E4%B8%AD%E6%9C%9F%E8%B2%A1%E5%8B%99%E8%B3%87%E6%96%99) The H1 2025 interim financial report is unaudited but has been reviewed by KPMG in accordance with HK Standard on Review Engagements 2410 - The interim financial report is unaudited but has been reviewed by KPMG in accordance with Hong Kong Standard on Review Engagements 2410[79](index=79&type=chunk) [Standard Code for Directors' Securities Transactions](index=26&type=section&id=%E8%91%A3%E4%BA%8B%E9%80%B2%E8%A1%8C%E8%AD%89%E5%88%B8%E4%BA%A4%E6%98%93%E7%9A%84%E6%A8%99%E6%BA%96%E5%AE%88%E5%89%87) The company adopted and confirmed compliance with the Listing Rules' Standard Code for directors' securities transactions during the reporting period - The company adopted the Standard Code in Listing Rules Appendix C3 and confirms directors' compliance during the reporting period[80](index=80&type=chunk) [Purchase, Sale or Redemption of Listed Securities](index=26&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%E4%B8%8A%E5%B8%82%E8%AD%89%E5%88%B8) Neither the company nor its subsidiaries purchased, sold, or redeemed any of the company's listed securities for H1 2025 - Neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities[81](index=81&type=chunk) [Sufficiency of Public Float](index=26&type=section&id=%E5%85%AC%E7%9C%BE%E6%8C%81%E8%82%A1%E9%87%8F%E7%9A%84%E5%85%85%E8%B6%B3%E6%80%A7) The company has consistently maintained a sufficient public float since its initial public offering date up to this announcement - The company has maintained a sufficient public float since its initial public offering date up to this announcement[82](index=82&type=chunk) [Pre-emptive Rights](index=26&type=section&id=%E5%84%AA%E5%85%88%E8%B3%BC%E8%B2%B7%E6%AC%8A) Neither the company's articles nor Cayman Islands law contain pre-emptive rights provisions for proportional new share offerings - Neither the company's memorandum and articles of association nor Cayman Islands law contain pre-emptive rights provisions[83](index=83&type=chunk) [Publication of Interim Results Announcement and Interim Report](index=27&type=section&id=%E5%88%8A%E7%99%BB%E4%B8%AD%E6%9C%9F%E6%A5%AD%E7%B8%BE%E5%85%AC%E5%91%8A%E5%8F%8A%E4%B8%AD%E5%A0%B1) This interim results announcement is published on HKEX and company websites; the interim report will follow for shareholders - This interim results announcement has been published on the websites of Hong Kong Exchanges and Clearing Limited and the company[84](index=84&type=chunk) [Acknowledgement](index=27&type=section&id=%E9%B8%A3%E8%B0%A2) The Board extends gratitude to management, employees, shareholders, business partners, and banks for their support - The Board expresses gratitude to management, all employees, shareholders, business partners, and banks for their support[85](index=85&type=chunk) [Board Composition](index=27&type=section&id=%E8%91%A3%E4%BA%8B%E6%9C%83%E7%B5%84%E6%88%90) As of this announcement date, the Board comprises five executive directors and three independent non-executive directors - The Board comprises five executive directors (Mr. Zhao Jinmin, Mr. Liu Yingwu, Ms. Bian Xiaodan, Mr. Ma Haidong, and Mr. Wang Zhiwei) and three independent non-executive directors (Ms. Su Dan, Mr. Liu Yingjie, and Mr. Zhang Zhifeng)[87](index=87&type=chunk)

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不負責，對其準確性或完 整性亦不發表任何聲明，並明確表示，概不就因本公告全部或任何部分內容所產生或因依賴該等內 容而引致的任何損失承擔任何責任。 CHINA EAST EDUCATION HOLDINGS LIMITED 中國東方教育控股有限公司 （於開曼群島註冊成立的有限公司） （股份代號：667） 截至2025年6月30日止六個月之中期業績公告 | 摘要 | | | | | --- | --- | --- | --- | | | | 截至6月30日止六個月 | 變動 | | | 2025年 | 2024年 | 增加╱（減少） | | 新培訓人次及新客戶註冊人數 | 83,521 | 78,009 | 7.1% | | 平均培訓人次及平均客戶註冊人數 | 152,817 | 144,793 | 5.5% | | 收入（人民幣百萬元） | 2,186 | 1,983 | 10.2% | | 毛利（人民幣百萬元） | 1,253 | 1,051 | 19.2% | | 純利（人民幣百萬元） | 403 | 272 | 48.4% | | （1） 經 ...

[Financial Performance](index=1&type=section&id=財務業績) This section provides an overview of the company's financial results, including income, balance sheet, equity, and cash flow statements, highlighting key changes and performance indicators [Unaudited Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=1&type=section&id=未經審核簡明綜合損益及其他全面收益表) During the reporting period, the company experienced a decrease in both turnover and gross profit, leading to a shift from profit to loss, an expanded loss for the period, and a significant increase in basic and diluted loss per share Key Data from Profit or Loss and Other Comprehensive Income | Metric | 2025 H1 (HK$ thousand) | 2024 H1 (HK$ thousand) | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Turnover | 52,173 | 83,084 | -37.2% | | Cost of sales | (43,080) | (72,146) | -40.3% | | Gross profit | 9,093 | 10,938 | -16.9% | | Other income | 7,620 | 2,787 | +173.4% | | Other gains / (losses) | 1,158 | 20,505 | -94.4% | | Selling and distribution costs | (2,277) | (3,771) | -39.6% | | Administrative expenses | (26,652) | (24,602) | +8.3% | | Impairment loss on trade receivables and contract assets | (1,802) | – | N/A | | Finance costs | (3,291) | (4,755) | -30.8% | | Profit / (Loss) before tax | (16,151) | 1,102 | Shift from profit to loss | | Income tax expense | (1,093) | (450) | +142.9% | | Profit / (Loss) for the period | (17,244) | 652 | Shift from profit to loss | | Total comprehensive expense for the period attributable to owners of the Company | (15,174) | 270 | Shift from profit to loss | | Earnings / (Loss) per share – basic and diluted (HK cents) | (2.16) | 0.08 | Shift from profit to loss | [Unaudited Condensed Consolidated Statement of Financial Position](index=3&type=section&id=未經審核簡明綜合財務狀況表) As of June 30, 2025, the company's net current assets, total assets less current liabilities, and net assets all shifted from negative to positive, primarily due to the issuance of perpetual bonds, significantly improving the capital structure Key Financial Position Data | Metric | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | Change | | :--- | :--- | :--- | :--- | | Non-current assets | 27,372 | 31,462 | -13.0% | | Current assets | 107,896 | 121,278 | -11.0% | | Current liabilities | 107,063 | 211,128 | -49.3% | | Net current assets / (liabilities) | 833 | (89,850) | Shift from negative to positive | | Total assets less current liabilities / (net current liabilities) | 28,205 | (58,388) | Shift from negative to positive | | Non-current liabilities | 287 | 681 | -57.8% | | Net assets / (net liabilities) | 27,918 | (59,069) | Shift from negative to positive | | Share capital | 8,000 | 8,000 | 0% | | Reserves | (80,082) | (67,069) | -19.4% | | Deficiency in shareholders' equity | (72,082) | (59,069) | -22.0% | | Perpetual bonds | 100,000 | – | New addition | | Total equity / (deficiency) | 27,918 | (59,069) | Shift from negative to positive | - The company significantly improved its capital structure by issuing **HK$100,000 thousand** in perpetual bonds, shifting total equity from a deficiency to a positive value[7](index=7&type=chunk) [Unaudited Condensed Consolidated Statement of Changes in Equity](index=5&type=section&id=未經審核簡明綜合權益變動表) During the reporting period, the company significantly increased total equity by issuing **HK$100,000 thousand** in perpetual bonds, resulting in a substantial improvement in overall equity despite recording a loss for the period Key Data on Changes in Equity | Metric | 2025 H1 (HK$ thousand) | 2024 H1 (HK$ thousand) | | :--- | :--- | :--- | | Profit / (Loss) for the period | (17,241) | 652 | | Exchange differences arising from translation of overseas operations | 4,228 | (382) | | Total comprehensive expense for the period | (13,013) | 270 | | Issuance of perpetual bonds | 100,000 | – | | Total at end of period | 27,918 | 71,228 | - The issuance of **HK$100,000 thousand** in perpetual bonds was a key factor in the period's equity changes, significantly improving the company's total equity position[8](index=8&type=chunk) [Unaudited Condensed Consolidated Statement of Cash Flows](index=6&type=section&id=未經審核簡明綜合現金流量表) During the reporting period, cash outflow from operating activities decreased, and cash inflow from investing activities significantly increased, but financing activities shifted from net inflow to net outflow, resulting in a net decrease in cash and cash equivalents Key Cash Flow Data | Metric | 2025 H1 (HK$ thousand) | 2024 H1 (HK$ thousand) | Change | | :--- | :--- | :--- | :--- | | Net cash used in operating activities | (11,443) | (24,642) | Outflow decreased | | Net cash generated from investing activities | 9,077 | 844 | Significantly increased | | Net cash (used in) / generated from financing activities | (2,964) | 26,583 | Shifted from inflow to outflow | | Net (decrease) / increase in cash and cash equivalents | (5,330) | 2,785 | Shifted from increase to decrease | | Cash and cash equivalents at end of period | 25,054 | 45,838 | -45.3% | - Net cash inflow from investing activities significantly increased, primarily due to proceeds from the disposal of property, plant and equipment and non-current assets classified as held for sale[10](index=10&type=chunk) - Financing activities shifted from net inflow to net outflow, mainly due to repayment of loans from the ultimate controlling party and principal portions of lease liabilities[10](index=10&type=chunk) [Notes to the Unaudited Condensed Consolidated Financial Results](index=8&type=section&id=未經審核簡明綜合財務業績附註) This section provides detailed explanatory notes to the unaudited condensed consolidated financial statements, covering general information, accounting policies, segment information, and specific financial items [1. General Information](index=8&type=section&id=1.%20一般資料) The company is incorporated in the Cayman Islands, primarily engaged in investment holding, with subsidiaries involved in semiconductor production and trading, broadband infrastructure construction, and smart field solutions, and Mr Zhang Liang is the ultimate controlling party - The company was incorporated in the Cayman Islands and has been listed on the Stock Exchange since 2017[11](index=11&type=chunk) - Its principal business is investment holding, with subsidiaries engaged in semiconductor production and trading, broadband infrastructure construction, and integrated solutions for smart field applications[11](index=11&type=chunk) - The ultimate controlling party is Mr Zhang Liang[11](index=11&type=chunk) [2. Basis of Preparation and Accounting Policies](index=8&type=section&id=2.%20編製基準及會計政策) The interim financial statements are prepared in accordance with HKAS 34 and HKEX Listing Rules, with accounting policies consistent with the 2024 annual financial statements, and new amendments are assessed to have no significant impact - The interim financial statements have been prepared in accordance with Hong Kong Accounting Standard 34 Interim Financial Reporting issued by the HKICPA and the applicable disclosure requirements of the Listing Rules[12](index=12&type=chunk) - The accounting policies are consistent with those adopted in the 2024 annual financial statements, and the impact of HKAS 21 (Revised) The Effects of Changes in Foreign Exchange Rates has been assessed as having no significant effect on performance and financial position[12](index=12&type=chunk)[14](index=14&type=chunk) [3. Turnover and Segment Information](index=9&type=section&id=3.%20營業額及分部資料) The company's business is divided into four reportable segments: production, trading, broadband infrastructure and smart fields, and strategic investments, with significant growth in broadband infrastructure and smart fields, and a substantial decline in production and trading revenue this period - The Group's reportable and operating segments include: production, trading, broadband infrastructure and smart fields, and strategic investments[17](index=17&type=chunk)[18](index=18&type=chunk) Segment Revenue Analysis (HK$ thousand) | Segment | 2025 H1 | 2024 H1 | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Production | – | 34,559 | -100% | | Trading | 713 | 22,859 | -96.9% | | Broadband Infrastructure and Smart Fields | 51,929 | 25,666 | +102.3% | | Strategic Investments | – | – | N/A | | Total | 52,642 | 83,084 | -36.6% | [Segment Revenue and Results](index=11&type=section&id=分部收入及業績) In 2025 H1, production and trading segment revenue significantly decreased, broadband infrastructure and smart fields revenue doubled, but strategic investment segment profit substantially declined, leading to an overall loss before tax Segment Revenue and Results (HK$ thousand) | Segment | 2025 H1 Revenue | 2024 H1 Revenue | 2025 H1 (Loss) Profit | 2024 H1 (Loss) Profit | | :--- | :--- | :--- | :--- | :--- | | Production | – | 34,559 | – | (1,956) | | Trading | 713 | 22,859 | 58 | 721 | | Broadband Infrastructure and Smart Fields | 51,929 | 25,666 | (266) | 3,605 | | Strategic Investments | – | – | 529 | 21,197 | | Total | 52,642 | 83,084 | 321 | 23,567 | | Profit / (Loss) before tax | | | (16,151) | 1,102 | - Strategic investment segment profit significantly decreased from **HK$21,197 thousand** in 2024 H1 to **HK$529 thousand** in 2025 H1, a **97.5% decrease**[20](index=20&type=chunk) [Segment Assets and Liabilities](index=11&type=section&id=分部資產及負債) As of June 30, 2025, production and trading segment assets were zeroed out, broadband infrastructure and smart fields assets increased, strategic investment assets slightly grew, and unallocated liabilities significantly decreased Segment Assets and Liabilities (HK$ thousand) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Segment Assets** | | | | Production | – | 18,267 | | Trading | – | 2,482 | | Broadband Infrastructure and Smart Fields | 60,331 | 56,424 | | Strategic Investments | 51,539 | 48,228 | | Unallocated | 23,398 | 27,339 | | **Total Assets** | **135,268** | **152,740** | | **Segment Liabilities** | | | | Production | – | 3,286 | | Trading | – | 822 | | Broadband Infrastructure and Smart Fields | 40,723 | 39,899 | | Unallocated | 66,627 | 167,802 | | **Total Liabilities** | **107,350** | **212,434** | - Production and trading segment assets both decreased to zero as of June 30, 2025, reflecting business adjustments[21](index=21&type=chunk) - Unallocated liabilities significantly decreased from **HK$167,802 thousand** as of December 31, 2024, to **HK$66,627 thousand** as of June 30, 2025[21](index=21&type=chunk) [4. Other Gains / (Losses)](index=12&type=section&id=4.%20其他收益╱（虧損）) During the reporting period, gains from fair value changes of financial assets at fair value through profit or loss significantly decreased, leading to a substantial decline in total other gains Other Gains / (Losses) (HK$ thousand) | Metric | 2025 H1 | 2024 H1 | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Fair value changes of financial assets at fair value through profit or loss | 1,158 | 20,505 | -94.4% | | Total | 1,158 | 20,505 | -94.4% | [5. Finance Costs](index=12&type=section&id=5.%20融資成本) During the reporting period, finance costs primarily stemmed from interest on loans from the ultimate controlling party, with total finance costs decreasing year-on-year Finance Costs (HK$ thousand) | Metric | 2025 H1 | 2024 H1 | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Interest on lease liabilities | 99 | 136 | -27.3% | | Interest on loans from ultimate controlling party | 3,192 | 4,424 | -27.8% | | Loss on early repayment of loans | – | 195 | -100% | | Total | 3,291 | 4,755 | -30.8% | [6. Income Tax Expense](index=13&type=section&id=6.%20所得稅開支) Income tax expense for the reporting period was primarily driven by PRC enterprise income tax and under-provision in prior years, leading to an increase in total tax expense year-on-year Income Tax Expense (HK$ thousand) | Metric | 2025 H1 | 2024 H1 | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Current tax: PRC | 7 | – | N/A | | Under-provision in prior years: PRC | 1,086 | – | N/A | | Deferred tax | – | 450 | -100% | | Total | 1,093 | 450 | +142.9% | - Guangzhou Zhiwang is recognized as a 'High and New Technology Enterprise' by the PRC government, enjoying a preferential tax rate of **15%**[26](index=26&type=chunk) - Hong Kong profits tax is calculated under a two-tiered system, with the first **HK$2,000,000** of assessable profits taxed at **8.25%** and the remainder at **16.5%**[27](index=27&type=chunk) [7. Profit / (Loss) for the Period](index=14&type=section&id=7.%20期內溢利╱（虧損）) During the reporting period, the company shifted from profit to loss, primarily influenced by factors such as inventory amounts, depreciation, R&D costs, staff costs, and gains from disposal of property, plant and equipment Factors Affecting Profit / (Loss) for the Period (HK$ thousand) | Metric | 2025 H1 | 2024 H1 | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Amount of inventories recognized as expense | 711 | 57,419 | -98.8% | | Amortization of intangible assets | 93 | 89 | +4.5% | | Depreciation of property, plant and equipment | 1,825 | 2,430 | -24.9% | | Depreciation of right-of-use assets | 1,246 | 1,109 | +12.4% | | Research and development costs | 2,212 | 2,232 | -0.9% | | Write-off of property, plant and equipment | 174 | 3 | +5700% | | Government grants | (36) | (22) | +63.6% | | Gain on disposal of property, plant and equipment | (4,648) | (885) | +425.2% | | Total staff costs | 15,077 | 22,305 | -32.4% | - Total staff costs significantly decreased, mainly due to reduced salaries and allowances and a shift from contributions to refunds in retirement benefit schemes[28](index=28&type=chunk) [8. Earnings / (Loss) Per Share](index=14&type=section&id=8.%20每股溢利╱（虧損）) During the reporting period, the company's basic and diluted earnings per share shifted from positive to negative, reflecting an overall deterioration in performance Earnings / (Loss) Per Share | Metric | 2025 H1 | 2024 H1 | | :--- | :--- | :--- | | (Loss) / Profit for the purpose of calculating basic and diluted (loss) / earnings per share | (17,244,000) HK$ | 652,000 HK$ | | Weighted average number of ordinary shares | 800,000,000 | 800,000,000 | | Basic and diluted (loss) / earnings per share (HK cents) | (2.16) | 0.08 | - As there were no potential dilutive ordinary shares during the period, diluted earnings / (loss) per share was the same as basic earnings / (loss) per share[31](index=31&type=chunk) [9. Dividends](index=15&type=section&id=9.%20股息) During the reporting period, the company neither declared nor proposed any interim dividends - No interim dividends were declared or proposed for the period[32](index=32&type=chunk) [10. Property, Plant and Equipment](index=15&type=section&id=10.%20廠房及設備) During the reporting period, acquisitions of property, plant and equipment significantly decreased, while proceeds and gains from disposals substantially increased, alongside an increase in write-offs Changes in Property, Plant and Equipment (HK$ thousand) | Metric | 2025 H1 | 2024 H1 | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Acquisition of property, plant and equipment | 3 | 273 | -98.9% | | Proceeds from disposal of property, plant and equipment | 1,776.2 | 885 | +100.7% | | Net gain on disposal | 1,057.8 | 885 | +19.5% | | Write-off of property, plant and equipment | 174 | 3 | +5700% | [11. Trade and Other Receivables](index=15&type=section&id=11.%20貿易及其他應收款項) As of June 30, 2025, total trade and other receivables significantly decreased, primarily due to a substantial decline in trade receivables, with an increased proportion of trade receivables over 365 days Trade and Other Receivables (HK$ thousand) | Metric | June 30, 2025 | December 31, 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Trade receivables (net of impairment allowance) | 11,227 | 32,782 | -65.8% | | Deposits and other receivables | 2,803 | 1,561 | +79.6% | | Recoverable VAT | – | 872 | -100% | | Prepayments | 2,282 | 2,900 | -21.4% | | Total trade and other receivables | 16,312 | 38,115 | -57.2% | Ageing Analysis of Trade Receivables (HK$ thousand) | Ageing | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | 0 to 30 days | – | 10,166 | | 31 to 90 days | – | 8,666 | | 91 to 365 days | 6,350 | 9,461 | | Over 365 days | 4,877 | 4,489 | | Total | 11,227 | 32,782 | - The Group grants credit terms of up to **90 days** to customers in the production and trading segments, while credit terms for broadband infrastructure and smart fields customers are mutually agreed upon[36](index=36&type=chunk) [12. Trade and Other Payables](index=16&type=section&id=12.%20貿易及其他應付款項) As of June 30, 2025, total trade and other payables slightly decreased, with trade payables remaining stable, but accrued staff costs significantly declined, and the proportion of trade payables aged seven to twelve months increased Trade and Other Payables (HK$ thousand) | Metric | June 30, 2025 | December 31, 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Trade payables | 32,886 | 32,908 | -0.1% | | Accrued staff costs | 1,269 | 3,964 | -68.0% | | Accrued expenses and other payables | 8,321 | 7,024 | +18.5% | | Total trade and other payables | 42,476 | 43,896 | -3.2% | Ageing Analysis of Trade Payables (HK$ thousand) | Ageing | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Within 3 months | 7,500 | 7,820 | | 4 to 6 months | 4,592 | 5,815 | | 7 to 12 months | 14,875 | 10,531 | | Over 1 year | 6,119 | 8,742 | | Total | 32,886 | 32,908 | - Credit terms for purchases range from **30 to 180 days**, and the Group has established financial risk management policies to ensure all payables are settled within the credit period[39](index=39&type=chunk) [13. Capital Commitments](index=17&type=section&id=13.%20資本承擔) As of June 30, 2025, the Group's contracted but unprovided capital commitments were approximately **HK$ zero**, consistent with December 31, 2024 Capital Commitments (HK$ thousand) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Capital commitments | – | – | [14. Approval of Unaudited Condensed Consolidated Financial Results](index=17&type=section&id=14.%20批准未經審核簡明綜合財務業績) The unaudited condensed consolidated financial results were approved and authorized for issue by the Board on August 27, 2025 - The unaudited condensed consolidated financial results were approved and authorized for issue by the Board on August 27, 2025[41](index=41&type=chunk) [15. Events After the Reporting Period](index=17&type=section&id=15.%20報告期後事項) As of the date of this announcement, no significant events have occurred after the reporting period - No significant events occurred after June 30, 2025, subsequent to the period and up to the date of this announcement[42](index=42&type=chunk) [Business Review](index=18&type=section&id=業務回顧) This section provides an overview of the company's operational performance across its key business segments, including broadband infrastructure, smart fields, semiconductors, and strategic investments [Broadband Infrastructure and Smart Fields Business](index=18&type=section&id=(i)%20寬帶基礎設施及智能場域業務) Affected by China's real estate market controls and 'speed-up and fee-reduction' policies, this business faces challenges but achieved new growth by optimizing product portfolios, managing costs, and expanding overseas smart product sales - Primarily engaged in broadband infrastructure construction and providing integrated solutions for smart field applications, including smart homes, smart parks, and smart communities[43](index=43&type=chunk) - Challenges faced include: liquidity contraction in China's real estate sector, extended project completion cycles, and 'speed-up and fee-reduction' policies exerting downward pressure on broadband infrastructure profitability[43](index=43&type=chunk) - Response strategies include: implementing more prudent and conservative cost management and new project investment strategies, focusing resources on projects with stronger profitability and more stable cash flow[43](index=43&type=chunk) - New growth drivers include: integrating internal resources to develop smart product sales and successfully entering overseas markets[43](index=43&type=chunk) [Semiconductor Business](index=19&type=section&id=(ii)%20半導體業務) Affected by global inflation, monetary tightening policies, and geopolitical risks, weak demand in the consumer electronics market led to a **99.0% plunge** in semiconductor business revenue, prompting management to shut down relevant production lines to curb losses - Core business primarily involves packaging and testing of discrete devices and manufacturing of proprietary products, supplemented by third-party semiconductor product trading[44](index=44&type=chunk) - Market environment: global inflation and monetary tightening policies severely suppressed demand in the consumer electronics market, leading to a downturn in traditional products like smartphones and personal computers[44](index=44&type=chunk) - Performance impact: revenue from semiconductor manufacturing and trading plummeted by **99.0%** year-on-year[44](index=44&type=chunk) - Countermeasures: management decided to shut down relevant production lines to curb further losses[44](index=44&type=chunk) - Future outlook: the Board will continue to review this business line to ensure the Group's overall financial stability[45](index=45&type=chunk) [Strategic Investment Business](index=19&type=section&id=(iii)%20戰略投資業務) The company is optimistic about technological innovation and Web3.0, aiming to diversify its investment portfolio, and has invested in listed equity securities, but held no cryptocurrencies during the period, with future consideration for increased cryptocurrency investments - The Group believes technological innovation is a key engine for future economic development, aiming to seize investment opportunities and actively diversify its investment portfolio in innovative technology sectors[46](index=46&type=chunk) - Consistent with the Hong Kong government's views on regional virtual asset development, the company explores new prospects offered by blockchain and Web3.0, and will strive to strengthen and diversify its investment portfolio, considering increased cryptocurrency investments when appropriate[48](index=48&type=chunk)[49](index=49&type=chunk) - During the period, investments in listed equity securities had a total acquisition cost of approximately **HK$106.9 million**, a total book value of disposals of approximately **HK$91.1 million**, net realized gains of approximately **HK$9.5 million**, and unrealized losses of approximately **HK$9.0 million**[50](index=50&type=chunk) [Listed Equity Securities](index=20&type=section&id=上市股本證券) The company primarily invests in equity securities and options of leading technology companies and high-quality large enterprise groups listed in the US, China, and Hong Kong, realizing gains but also incurring unrealized losses during the period - Investment targets primarily include leading technology companies and high-quality large enterprise groups listed in the US, mainland China, and Hong Kong[50](index=50&type=chunk) Listed Equity Securities Investment Status (HK$ thousand) | Metric | Amount | | :--- | :--- | | Total acquisition cost | 106,900 | | Total book value of disposals | 91,100 | | Net proceeds from disposals | 100,600 | | Net realized gains | 9,500 | | Unrealized losses | 9,000 | - The Group will closely monitor and evaluate the performance of these investments and make timely and appropriate adjustments to the investment portfolio[50](index=50&type=chunk) [Financial Review](index=21&type=section&id=財務回顧) This section provides a detailed analysis of the company's financial performance, including turnover, gross profit, financial asset fair value changes, operating expenses, and liquidity [Turnover](index=21&type=section&id=營業額) Turnover decreased by **36.6%** year-on-year during the reporting period, primarily due to a **98.8% substantial reduction** in semiconductor business turnover, while broadband infrastructure and smart fields segment turnover increased by **102.3%** year-on-year Turnover Comparison (HK$ million) | Segment | 2025 H1 | 2024 H1 | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Total Turnover | 52.6 | 83.1 | -36.6% | | Semiconductor Business | 0.7 | 57.4 | -98.8% | | Broadband Infrastructure and Smart Fields | 51.9 | 25.7 | +102.3% | - The decrease in semiconductor business turnover was mainly due to concerns over high inflation and interest rate hikes, and the Board's decision to temporarily suspend certain related production lines to curb losses[51](index=51&type=chunk) - The increase in broadband infrastructure and smart fields segment turnover was primarily due to an increase in smart field solution projects[52](index=52&type=chunk) [Gross Profit and Gross Profit Margin](index=21&type=section&id=毛利及毛利率) Gross profit decreased by **13.8%** year-on-year during the reporting period, mainly impacted by declining semiconductor business turnover and gross profit margin; overall gross profit margin increased by **4.7 percentage points** to **17.9%**, but the broadband infrastructure and smart fields segment's gross profit margin decreased due to increased smart field solution services Gross Profit and Gross Profit Margin Comparison (HK$ million) | Metric | 2025 H1 | 2024 H1 | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Total Gross Profit | 9.4 | 10.9 | -13.8% | | Overall Gross Profit Margin | 17.9% | 13.2% | +4.7 percentage points | | Semiconductor Business Gross Profit | 0.1 | 0.8 | -87.5% | | Semiconductor Business Gross Profit Margin | 9.3% | 1.4% | +7.9 percentage points | | Broadband Infrastructure and Smart Fields Gross Profit | 9.4 | 10.1 | -6.9% | | Broadband Infrastructure and Smart Fields Gross Profit Margin | 18.0% | 41.0% | -23.0 percentage points | - The decrease in semiconductor business gross profit and increase in gross profit margin were mainly due to changes in product types and quantities sold, as well as management's implementation of operational suspension[54](index=54&type=chunk) - The decrease in broadband infrastructure and smart fields gross profit margin was primarily due to an increase in smart field solution services, which have relatively lower gross profit margins[54](index=54&type=chunk) [Fair Value Changes of Financial Assets at Fair Value Through Profit or Loss](index=22&type=section&id=按公平值計入損益的金融資產的公平值變動) During the reporting period, the company realized gains from the disposal of listed equity securities, but incurred unrealized losses on held securities and options, resulting in total other gains of **HK$0.5 million** Fair Value Changes of Financial Assets (HK$ million) | Metric | Amount | | :--- | :--- | | Net realized gains | 9.5 | | Unrealized losses | (9.0) | | Total other gains | 0.5 | [Selling and Distribution Costs](index=22&type=section&id=銷售及分銷成本) Selling and distribution costs decreased by **39.5%** year-on-year during the reporting period, primarily due to reduced commission expenses paid to third-party agents as a result of declining semiconductor business sales Selling and Distribution Costs Comparison (HK$ million) | Metric | 2025 H1 | 2024 H1 | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Selling and distribution costs | 2.3 | 3.8 | -39.5% | - The decrease was mainly due to reduced commission expenses paid to third-party agents, consistent with the decline in semiconductor customer sales[56](index=56&type=chunk) [Administrative Expenses](index=22&type=section&id=行政開支) Administrative expenses increased by **8.5%** year-on-year during the reporting period, primarily due to increased employee severance costs Administrative Expenses Comparison (HK$ million) | Metric | 2025 H1 | 2024 H1 | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Administrative expenses | 26.7 | 24.6 | +8.5% | - The increase was mainly due to higher employee severance costs incurred by the Group during the period[58](index=58&type=chunk) [Income Tax Expense](index=23&type=section&id=所得稅開支) Income tax expense increased year-on-year during the reporting period, primarily due to deferred tax implications arising from the disposal of property, plant and equipment Income Tax Expense Comparison (HK$ million) | Metric | 2025 H1 | 2024 H1 | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Income tax expense | 1.1 | 0.5 | +120% | - The increase in income tax expense was mainly due to deferred tax implications arising from the disposal of property, plant and equipment[59](index=59&type=chunk) [Profit / (Loss) for the Period](index=23&type=section&id=期間溢利╱（虧損）) During the reporting period, the company shifted from profit to a net loss of **HK$17.2 million**, a **HK$17.9 million decrease** compared to the same period last year, primarily influenced by the combined financial factors mentioned above Profit / (Loss) for the Period Comparison (HK$ million) | Metric | 2025 H1 | 2024 H1 | Change | | :--- | :--- | :--- | :--- | | Net Loss | (17.2) | 0.7 (Net Profit) | Decrease of HK$17.9 million | [Liquidity, Financial Resources and Capital Structure](index=23&type=section&id=流動資金及財務資源及資本架構) The company's operations are primarily funded by internal cash flow, with reduced capital commitments, no outstanding bank borrowings, a zero gearing ratio, and maintained prudent cash and financial management policies - The Group's operations are primarily funded by internally generated cash flows[61](index=61&type=chunk) Capital Commitments Comparison (HK$ million) | Metric | June 30, 2025 | December 31, 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Outstanding capital commitments | 3.0 | 3.9 | -23.1% | - The Group has no outstanding bank borrowings, and its gearing ratio is zero[62](index=62&type=chunk) - The Group adopts prudent cash and financial management policies, with financial activities primarily conducted through bank deposits denominated in HKD, USD, or RMB[62](index=62&type=chunk) [Material Investments / Material Acquisitions and Disposals](index=24&type=section&id=重大投資╱重大收購及出售) Aside from investments in listed equity securities disclosed in the strategic investment business, there were no other material investments, acquisitions, or disposals of subsidiaries during the reporting period - Except as disclosed in the strategic investment business, the Group made no other material investments or material acquisitions and disposals of subsidiaries during the period[64](index=64&type=chunk) [Contingent Liabilities](index=24&type=section&id=或然負債) As of June 30, 2025, the company had no material contingent liabilities - As of June 30, 2025, the Group had no material contingent liabilities[65](index=65&type=chunk) [Foreign Exchange Fluctuation Risk](index=24&type=section&id=匯率波動風險) The company faces foreign currency risk, primarily involving USD and RMB, but currently has no foreign currency hedging policy; the Board will continue to monitor and consider hedging when necessary - The Group is exposed to foreign currency risk, with approximately **23.5%** of sales and **2.1%** of purchases denominated in currencies other than the functional currency of the relevant Group entities[66](index=66&type=chunk) Foreign Currency Denominated Monetary Assets and Liabilities (HK$ thousand) | Currency | June 30, 2025 Assets | December 31, 2024 Assets | June 30, 2025 Liabilities | December 31, 2024 Liabilities | | :--- | :--- | :--- | :--- | :--- | | USD | 52,029 | 83,289 | 710 | 610 | | RMB | 613 | 24 | 0 | 7 | | Total | 52,642 | 83,313 | 710 | 617 | - The Group currently has no foreign currency hedging policy, but the Directors will continue to monitor foreign exchange risk and consider hedging when necessary[66](index=66&type=chunk) [Other Information](index=25&type=section&id=其他信息) This section covers additional important details including human resources, reserves, dividends, business outlook, corporate governance, and securities trading policies [Staff and Remuneration](index=25&type=section&id=員工及薪酬) As of June 30, 2025, the company employed **67 full-time staff**, with a year-on-year decrease in staff costs, and actively recruits, develops, and retains talent through training, performance-linked remuneration, and clear career paths - As of June 30, 2025, the Group employed **67 full-time staff**, with approximately **96.7%** employed in China and **3.3%** in Hong Kong[67](index=67&type=chunk) Staff Costs Comparison (HK$ million) | Metric | 2025 H1 | 2024 H1 | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Staff costs (including Directors' emoluments) | 15.1 | 22.3 | -32.7% | - The Group actively implements strategies for recruiting, developing, and retaining talent through regular training, performance-linked remuneration and rewards, and establishing clear career paths[67](index=67&type=chunk) [Reserves](index=25&type=section&id=儲備) Changes in the company's reserves during the reporting period are presented in the unaudited condensed consolidated statement of changes in equity - Changes in the Group's reserves during the period are set out in the unaudited condensed consolidated statement of changes in equity above[68](index=68&type=chunk) [Dividends](index=25&type=section&id=股息) The Board does not recommend the payment of any interim dividend for the period - The Board does not recommend the payment of any interim dividend for the period[69](index=69&type=chunk) [Business Outlook](index=25&type=section&id=業務前景) Looking ahead, the semiconductor business will continue to face challenges, prompting the company to adopt a cautious stance and seek technological innovation opportunities; the broadband infrastructure and smart fields business, supported by Chinese policies, will expand into overseas markets and pursue acquisition targets in smart living, AI, and IoT, while diversifying Web3.0 investments - Semiconductor business: the unpredictable global economic environment, US-China trade tensions, and geopolitical conflicts impact supply chains, with uncertain growth momentum in the consumer market; the Group will adopt a cautious stance, potentially suspending business operations and reallocating resources to smart product trading[70](index=70&type=chunk) - Broadband infrastructure and smart fields business: benefiting from China's '14th Five-Year Plan' support for innovation and technological development, aiming to become a smart field solution integrator and successfully expanding its smart product business into overseas markets[71](index=71&type=chunk) - Strategic investments: will continue to explore other acquisition targets, primarily focusing on smart living-related technologies, AI, and IoT sectors, and considering diversification into innovative technology and Web3.0 investments[71](index=71&type=chunk) [Code of Conduct Regarding Securities Transactions by Directors](index=26&type=section&id=有關董事進行證券交易之行為守則) The company has adopted a standard code for directors' securities transactions no less exacting than Appendix C3 of the Listing Rules, with no instances of non-compliance identified during the reporting period - The company has adopted a standard code for directors' securities transactions, with terms no less exacting than the required standards set out in Appendix C3 of the Listing Rules[72](index=72&type=chunk) - Following enquiry, the company is not aware of any non-compliance with the standard code for directors' securities transactions during the period[72](index=72&type=chunk) [Competing Interests](index=26&type=section&id=競爭權益) During the reporting period, none of the company's directors or controlling shareholders and their close associates held any interests competing with the Group's business or had any other conflicts of interest - During the period, none of the company's Directors or controlling shareholders and their respective close associates had any interests in businesses competing or likely to compete with the Group's business, or any other conflicts of interest with the Group[73](index=73&type=chunk) [Corporate Governance Practices](index=26&type=section&id=企業管治常規) The company is committed to high standards of corporate governance, with a separation of Chairman and Chief Executive roles; however, the Chief Executive position remains vacant, and the Board considers the current arrangements appropriate and will continue to review them - The company is committed to achieving high standards of corporate governance, believing that sound and reasonable corporate governance practices are crucial for the Group's sustained growth and safeguarding shareholders' interests[74](index=74&type=chunk) - The roles of Chairman and Chief Executive should be separate and not held by the same individual; Mr Zhang Liang serves as the Chairman of the Board, while the Chief Executive position has been vacant since February 1, 2021[75](index=75&type=chunk) - The Board believes the current arrangements are appropriate and in the best interests of the company, and will continue to review the effectiveness of the company's structure[75](index=75&type=chunk) [Audit Committee](index=27&type=section&id=審核委員會) The Audit Committee comprises three independent non-executive Directors, with Mr Xu Liang as Chairman possessing appropriate professional accounting qualifications, and has reviewed and approved the financial results for the period - The company's Audit Committee consists of three independent non-executive Directors, with Mr Xu Liang as Chairman, possessing appropriate professional accounting qualifications and experience[76](index=76&type=chunk) - Key responsibilities include providing recommendations on the appointment of external auditors, monitoring the integrity of financial statements, and overseeing financial reporting, risk management, and internal control systems[76](index=76&type=chunk) - The Audit Committee has reviewed this announcement and the Group's unaudited condensed consolidated financial results for the period, deeming them compliant with applicable accounting standards and adequately disclosed[76](index=76&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=27&type=section&id=購買、出售或贖回本公司之上市證券) During the reporting period, 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 during the period[77](index=77&type=chunk) [Definitions](index=28&type=section&id=釋義) This section provides definitions for key terms used throughout the report to ensure consistent understanding of the content [Definitions](index=28&type=section&id=释义) This chapter provides definitions for key terms used in the report to ensure consistent understanding of the content - This chapter defines key terms used in the report, such as 'Board', 'Corporate Governance Code', 'Company', 'Group', 'Guangzhou Zhiwang', 'HKFRSs', 'Listing Rules', 'Period', 'PRC', 'RMB', 'USD', and others[78](index=78&type=chunk)[81](index=81&type=chunk) [Board of Directors](index=29&type=section&id=董事會) This section lists the members of the Board of Directors as of the announcement date, including executive and independent non-executive directors [Board Members](index=29&type=section&id=董事会成员) This chapter lists the Board members as of the announcement date, including Executive Director Mr Zhang Liang and Independent Non-executive Directors Mr Xu Liang, Mr Chan Sit, and Ms Zhang Yibo - As of the announcement date, the Board includes Executive Director Mr Zhang Liang (Chairman and Executive Director)[79](index=79&type=chunk)[80](index=80&type=chunk) - Independent Non-executive Directors include Mr Xu Liang, Mr Chan Sit, and Ms Zhang Yibo[80](index=80&type=chunk)