[Disclaimer](index=1&type=section&id=Disclaimer) Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited are not responsible for the accuracy or completeness of this announcement - Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited disclaim responsibility for the accuracy or completeness of this announcement [1](index=1&type=chunk) [Financial Highlights](index=1&type=section&id=Financial%20Highlights) The company reported significant revenue and profit growth for the six months ended June 30, 2025, with a notable increase in earnings per share Financial Highlights for the Six Months Ended June 30, 2025 | Indicator | June 30, 2025 (HK$ thousand) | June 30, 2024 (HK$ thousand) | Change (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Revenue | 131,400 | 84,800 | 46,600 | 54.9% | | Gross Profit | 7,900 | 5,900 | 2,000 | 34.3% | | Profit and Total Comprehensive Income | 3,700 | 1,700 | 2,000 | 121.2% | | Basic and Diluted Earnings Per Share | 0.92 HK cents | 0.42 HK cents | 0.50 HK cents | 119.0% | - Revenue significantly increased primarily due to a rise in both larger public projects (with revenue of **HK$10.0 million** or more) and smaller projects (with revenue between **HK$1.0 million** and **HK$5.0 million**) [2](index=2&type=chunk) - Gross profit margin decreased from approximately **6.9%** to approximately **6.0%**, mainly due to a slight increase in service costs from increased subcontracting costs for two major public projects completed at period-end [3](index=3&type=chunk) - The Board does not recommend an interim dividend for the six months ended June 30, 2025 [4](index=4&type=chunk) [Unaudited Condensed Consolidated Financial Statements](index=2&type=section&id=Unaudited%20Condensed%20Consolidated%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements, including the statement of profit or loss, financial position, changes in equity, and cash flows [Unaudited Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=2&type=section&id=Unaudited%20Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For the six months ended June 30, 2025, the company saw significant growth in revenue and gross profit, leading to a substantial increase in profit and total comprehensive income, with a corresponding rise in earnings per share Unaudited Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (For the six months ended June 30) | Indicator | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Revenue | 131,357 | 84,794 | | Cost of Services | (123,499) | (78,942) | | **Gross Profit** | **7,858** | **5,852** | | Other Income, Gains and Losses | 859 | 811 | | Administrative Expenses | (4,825) | (4,539) | | Finance Costs | (30) | (32) | | **Profit Before Income Tax** | **3,862** | **2,092** | | Income Tax Expense | (166) | (421) | | **Profit and Total Comprehensive Income for the Period Attributable to Owners of the Company** | **3,696** | **1,671** | | Basic and Diluted Earnings Per Share | 0.92 HK cents | 0.42 HK cents | [Unaudited Condensed Consolidated Statement of Financial Position](index=3&type=section&id=Unaudited%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, non-current assets significantly increased due to a rise in bonds receivable, while net current assets and total assets less current liabilities also grew, indicating a robust net asset position Unaudited Condensed Consolidated Statement of Financial Position (As of June 30, 2025) | Indicator | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | **Non-current Assets** | | | | Property, Plant and Equipment | 6,209 | 8,256 | | Bonds Receivable | 40,000 | – | | **Total Non-current Assets** | **46,209** | **8,256** | | **Current Assets** | | | | Trade and Other Receivables | 5,234 | 25,341 | | Contract Assets | 22,626 | 13,860 | | Current Tax Recoverable | 1,001 | 1,095 | | Cash and Bank Balances | 70,411 | 63,365 | | **Total Current Assets** | **99,272** | **103,661** | | **Current Liabilities** | | | | Trade and Other Payables | 17,071 | 24,753 | | Contract Liabilities | 1,038 | 3,136 | | Lease Liabilities | 638 | 843 | | **Total Current Liabilities** | **18,747** | **28,732** | | **Net Current Assets** | **80,525** | **74,929** | | **Total Assets Less Current Liabilities** | **126,734** | **83,185** | | **Non-current Liabilities** | | | | Lease Liabilities | 53 | 272 | | Long Service Payment Obligations | 293 | 293 | | Deferred Tax Liabilities | 867 | 795 | | Bonds | 40,000 | – | | **Total Non-current Liabilities** | **41,213** | **1,360** | | **Net Assets** | **85,521** | **81,825** | | **Equity** | | | | Share Capital | 4,000 | 4,000 | | Reserves | 81,521 | 77,825 | | **Equity Attributable to Owners of the Company** | **85,521** | **81,825** | [Unaudited Condensed Consolidated Statement of Changes in Equity](index=4&type=section&id=Unaudited%20Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) For the six months ended June 30, 2025, the company's total equity increased due to the profit and total comprehensive income for the period, while share capital remained unchanged Unaudited Condensed Consolidated Statement of Changes in Equity (For the six months ended June 30) | | Share Capital (HK$ thousand) | Share Premium (HK$ thousand) | Capital Reserve (HK$ thousand) | Retained Earnings (HK$ thousand) | Total (HK$ thousand) | | :--- | :--- | :--- | :--- | :--- | :--- | | As at January 1, 2024 (Audited) | 4,000 | 50,084 | 1 | 88,995 | 143,080 | | Dividends Paid | – | – | – | (70,000) | (70,000) | | Profit and Total Comprehensive Income for the Period | – | – | – | 1,671 | 1,671 | | **As at June 30, 2024 (Unaudited)** | **4,000** | **50,084** | **1** | **20,666** | **74,751** | | As at January 1, 2025 (Audited) | 4,000 | 50,084 | 1 | 27,740 | 81,825 | | Profit and Total Comprehensive Income for the Period | – | – | – | 3,696 | 3,696 | | **As at June 30, 2025 (Unaudited)** | **4,000** | **50,084** | **1** | **31,436** | **85,521** | [Unaudited Condensed Consolidated Statement of Cash Flows](index=5&type=section&id=Unaudited%20Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) For the six months ended June 30, 2025, net cash from operating activities decreased, cash flow from investing activities shifted from outflow to inflow, and net cash used in financing activities significantly reduced, resulting in a substantial increase in cash and cash equivalents at period-end Unaudited Condensed Consolidated Statement of Cash Flows (For the six months ended June 30) | Source of Cash Flow | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Net Cash From Operating Activities | 6,840 | 10,041 | | Net Cash From/(Used In) Investing Activities | 662 | (2,747) | | Net Cash Used In Financing Activities | (456) | (70,333) | | Net Increase/(Decrease) in Cash and Cash Equivalents | 7,046 | (63,039) | | Cash and Cash Equivalents at Beginning of Period | 63,365 | 114,555 | | Cash and Cash Equivalents at End of Period | 70,411 | 51,516 | [Notes to the Unaudited Condensed Consolidated Financial Statements](index=6&type=section&id=Notes%20to%20the%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed notes to the unaudited condensed consolidated financial statements, covering general information, basis of preparation, revenue, and other financial details [1. General Information](index=6&type=section&id=1.%20General%20Information) Fung Shing Holdings Limited, incorporated in the Cayman Islands and listed on the HKEX Main Board, primarily engages in slope works in Hong Kong, jointly controlled by Mr. Tse Shing Kee and Mr. Ho Ka Ki - The company was incorporated in the Cayman Islands on January 30, 2019, listed on GEM on December 13, 2019, and transferred to the Main Board on December 31, 2021 [10](index=10&type=chunk) - The Group primarily engages in slope works in Hong Kong [11](index=11&type=chunk) - The company's direct and ultimate holding company is Peak Investment Limited, with Mr. Tse Shing Kee and Mr. Ho Ka Ki as ultimate controlling shareholders [11](index=11&type=chunk) [2. Basis of Preparation](index=6&type=section&id=2.%20Basis%20of%20Preparation) The interim financial report is prepared in accordance with HKAS 34 and Listing Rules, using the historical cost convention, with new HKFRSs effective January 1, 2025, having no significant impact - This interim financial report is prepared in accordance with applicable disclosure provisions of the Listing Rules, including compliance with Hong Kong Accounting Standard 34 Interim Financial Reporting issued by the HKICPA [12](index=12&type=chunk) - The interim financial report is prepared based on accounting policies adopted in the Group's annual financial statements for the year ended December 31, 2024, with the adoption of new and revised HKFRSs effective January 1, 2025 [15](index=15&type=chunk) - The adoption of these new and revised HKFRSs has no significant impact on the results and financial position of the current and prior periods presented [15](index=15&type=chunk) [3. Revenue](index=8&type=section&id=3.%20Revenue) The Group's revenue primarily derives from providing slope works, with a 54.9% year-on-year increase for the six months ended June 30, 2025, mainly driven by public projects - Revenue represents income from providing slope works to external customers, recognized over time by the Group [18](index=18&type=chunk) Revenue Composition (For the six months ended June 30) | Project Type | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Public Projects | 125,428 | 79,271 | | Private Projects | 5,929 | 5,523 | | **Total** | **131,357** | **84,794** | [4. Other Income, Gains and Losses](index=8&type=section&id=4.%20Other%20Income,%20Gains%20and%20Losses) For the six months ended June 30, 2025, other income, gains, and losses slightly increased, primarily due to higher gains from the disposal of property, plant, and equipment offsetting reduced bank interest income Other Income, Gains and Losses (For the six months ended June 30) | Item | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Bank Interest Income | 665 | 814 | | Gains/(Losses) on Disposal of Property, Plant and Equipment | 192 | (3) | | Miscellaneous Income | 2 | – | | **Total** | **859** | **811** | [5. Finance Costs](index=8&type=section&id=5.%20Finance%20Costs) The Group's finance costs, primarily from lease liabilities, slightly decreased for the six months ended June 30, 2025 Finance Costs (For the six months ended June 30) | Item | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Interest on Lease Liabilities | 30 | 32 | [6. Profit Before Income Tax](index=9&type=section&id=6.%20Profit%20Before%20Income%20Tax) Profit before income tax is primarily influenced by staff costs, including directors' emoluments, salaries, wages, other benefits, and contributions to defined contribution retirement plans, as well as depreciation Staff Costs (For the six months ended June 30) | Item | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Directors' Emoluments | 2,209 | 1,765 | | Salaries, Wages and Other Benefits | 25,173 | 19,270 | | Contributions to Defined Contribution Retirement Plans | 1,060 | 810 | | **Total** | **28,442** | **21,845** | Depreciation (For the six months ended June 30) | Item | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Cost of Services - Owned Assets | 1,838 | 1,561 | | Cost of Services - Right-of-use Assets | 399 | 249 | | Administrative Expenses - Owned Assets | 7 | 10 | | Administrative Expenses - Right-of-use Assets | – | 130 | | **Total** | **2,244** | **1,950** | [7. Income Tax Expense](index=9&type=section&id=7.%20Income%20Tax%20Expense) The Group's income tax expense, mainly Hong Kong profits tax provision calculated under the two-tiered profits tax regime, decreased for the six months ended June 30, 2025, primarily due to reduced deferred tax expense Income Tax Expense (For the six months ended June 30) | Item | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Current Tax | 94 | – | | Deferred Tax | 72 | 421 | | **Total** | **166** | **421** | - Under the two-tiered profits tax regime, qualifying corporations pay tax at **8.25%** on the first **HK$2 million** of profits and **16.5%** on profits exceeding **HK$2 million** [24](index=24&type=chunk) [8. Earnings Per Share](index=10&type=section&id=8.%20Earnings%20Per%20Share) For the six months ended June 30, 2025, basic and diluted earnings per share were 0.92 HK cents, a significant increase from the prior year, with no potential dilutive ordinary shares Earnings Per Share Calculation (For the six months ended June 30) | Indicator | 2025 (Unaudited) | 2024 (Unaudited) | | :--- | :--- | :--- | | Profit for Basic Earnings Per Share (Profit for the Period) (HK$ thousand) | 3,696 | 1,671 | | Weighted Average Number of Ordinary Shares for Basic Earnings Per Share (thousand shares) | 400,000 | 400,000 | | **Basic and Diluted Earnings Per Share** | **0.92 HK cents** | **0.42 HK cents** | - There were no potential dilutive ordinary shares for the six months ended June 30, 2025 and 2024, thus diluted earnings per share equal basic earnings per share [25](index=25&type=chunk) [9. Dividends](index=10&type=section&id=9.%20Dividends) The Board does not recommend an interim dividend for the period ended June 30, 2025, but a special dividend of 17.5 HK cents per share was paid in 2024 - The Board does not recommend an interim dividend for the period ended June 30, 2025 (six months ended June 30, 2024: nil HK cents) [26](index=26&type=chunk) - On January 19, 2024, the Board recommended a special dividend of **17.5 HK cents** per ordinary share, totaling **HK$70,000,000**, which was paid on February 16, 2024 [26](index=26&type=chunk) [10. Property, Plant and Equipment](index=10&type=section&id=10.%20Property,%20Plant%20and%20Equipment) For the six months ended June 30, 2025, the Group's capital expenditure on the acquisition of property, plant, and equipment significantly decreased - For the six months ended June 30, 2025, the Group acquired items of property, plant and equipment of approximately **HK$0.2 million** (six months ended June 30, 2024: HK$3.4 million) [27](index=27&type=chunk) [11. Bonds Receivable and Bonds](index=10&type=section&id=11.%20Bonds%20Receivable%20and%20Bonds) The Group issued bonds totaling HK$40,000,000 with a one-year term and 8% coupon rate, with net proceeds intended to support strategic entry into China's industrial park management sector, leading to the establishment of a Chinese subsidiary in Ganzhou, Jiangxi - Bonds receivable refer to bonds with a principal amount of **HK$40,000,000**, a one-year term, and an **8%** coupon rate, subscribed by two independent private investors and issued by Jinling Capital Holdings Limited, a subsidiary of the Group [28](index=28&type=chunk) - The net proceeds from the bonds are intended to support the Group's strategic entry into the industrial park management sector in the People's Republic of China, initially focusing on Ganzhou, Jiangxi Province [28](index=28&type=chunk) - On June 9, 2025, the Group established a new subsidiary, Jiangxi Jinsheng Holdings Development Co., Ltd., in Ganzhou, Jiangxi Province, China, wholly owned by Hong Kong Jinling Capital [28](index=28&type=chunk) [12. Trade and Other Receivables](index=11&type=section&id=12.%20Trade%20and%20Other%20Receivables) As of June 30, 2025, total trade and other receivables significantly decreased, primarily due to a substantial decline in trade receivables, while other receivables and prepaid insurance remained relatively stable Trade and Other Receivables (As of June 30, 2025) | Item | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Trade Receivables | 315 | 19,872 | | Other Receivables | 2,334 | 2,207 | | Prepaid Insurance | 2,585 | 3,262 | | **Total** | **5,234** | **25,341** | Ageing Analysis of Trade Receivables (As of June 30, 2025) | Ageing | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | 0 to 30 days | – | 17,164 | | 31 to 90 days | – | 1,130 | | Over 90 days | 315 | 1,578 | | **Total** | **315** | **19,872** | - As of June 30, 2025, and December 31, 2024, the Group assessed the loss allowance and expected credit loss rate under HKFRS 9 as immaterial [33](index=33&type=chunk) [13. Contract Assets and Contract Liabilities](index=12&type=section&id=13.%20Contract%20Assets%20and%20Contract%20Liabilities) As of June 30, 2025, contract assets significantly increased due to growth in unbilled revenue, while contract liabilities substantially decreased Contract Assets (As of June 30, 2025) | Item | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Unbilled Revenue | 18,941 | 7,708 | | Retention Receivables | 3,685 | 6,152 | | **Total** | **22,626** | **13,860** | Contract Liabilities (As of June 30, 2025) | Item | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Contract Liabilities Arising from Payments Received in Advance of Construction Contracts | 1,038 | 3,136 | - Changes in contract assets are primarily due to variations in unbilled revenue from completed and verified contract works during the year, and changes in retention receivables due to a decrease in ongoing and completed contracts under the defect liability period [38](index=38&type=chunk) [14. Trade and Other Payables](index=13&type=section&id=14.%20Trade%20and%20Other%20Payables) As of June 30, 2025, total trade and other payables significantly decreased, primarily due to a decline in both trade payables and accrued expenses and other payables Trade and Other Payables (As of June 30, 2025) | Item | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Trade Payables | 16,228 | 23,021 | | Accrued Expenses and Other Payables | 843 | 1,732 | | **Total** | **17,071** | **24,753** | Ageing Analysis of Trade Payables (As of June 30, 2025) | Ageing | June 30, 2025 (HK$ thousand) | December 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | 0 to 30 days | 16,004 | 22,398 | | 31 to 365 days | – | 399 | | Over 365 days | 224 | 224 | | **Total** | **16,228** | **23,021** | [15. Share Capital](index=13&type=section&id=15.%20Share%20Capital) As of June 30, 2025, the company's authorized and issued and fully paid share capital remained unchanged Share Capital Information (As of June 30, 2025) | Item | Number of Shares | HK$ thousand | | :--- | :--- | :--- | | Authorized Share Capital | 1,000,000,000 | 10,000 | | Issued and Fully Paid Share Capital | 400,000,000 | 4,000 | [16. Related Party Transactions](index=14&type=section&id=16.%20Related%20Party%20Transactions) For the six months ended June 30, 2025, the remuneration of the Group's key management personnel increased Key Management Personnel Remuneration (For the six months ended June 30) | Item | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Salaries, Fees and Allowances | 3,433 | 3,132 | | Retirement Benefit Scheme Contributions | 36 | 36 | | **Total** | **3,469** | **3,168** | [17. Contingent Liabilities](index=14&type=section&id=17.%20Contingent%20Liabilities) The Group had no significant contingent liabilities as of June 30, 2025, and December 31, 2024 - The Group had no significant contingent liabilities as of June 30, 2025, and December 31, 2024 [46](index=46&type=chunk) [18. Approval of Interim Financial Statements](index=14&type=section&id=18.%20Approval%20of%20Interim%20Financial%20Statements) The interim financial report was approved and authorized for issue by the Board on August 27, 2025 - The interim financial report was approved and authorized for issue by the Board on August 27, 2025 [47](index=47&type=chunk) [Management Discussion and Analysis](index=15&type=section&id=Management%20Discussion%20and%20Analysis) This section provides a comprehensive discussion and analysis of the Group's business review, financial performance, liquidity, and other key operational aspects [Business Review and Outlook](index=15&type=section&id=Business%20Review%20and%20Outlook) As a Hong Kong slope works contractor with expertise in landslide prevention and repair, the Group secured significant contracts, but the Board remains cautious on the outlook due to global economic uncertainties, adopting a more conservative approach to new project tenders - The Group is a slope works contractor in Hong Kong, undertaking slope works generally involving landslide prevention and repair to improve or maintain the stability of slopes and/or retaining walls [48](index=48&type=chunk) - For the six months ended June 30, 2025, the Group was awarded **18 contracts** with a total contract sum of approximately **HK$830.6 million**, including **17 ongoing contracts** totaling approximately **HK$827.3 million** [49](index=49&type=chunk) - The Hong Kong government is expected to spend **HK$1.32 billion** on landslide prevention and mitigation in 2025/26, up from **HK$1.27 billion** in 2024/25 [50](index=50&type=chunk) - Given global economic uncertainties, the Board aims to focus on existing projects and adopt a more conservative approach to new project tenders until market conditions become clearer [51](index=51&type=chunk) [Review of Financial Performance](index=17&type=section&id=Review%20of%20Financial%20Performance) The Group achieved significant revenue and profit growth during the reporting period, though gross profit margin declined, reflecting business expansion and cost structure adjustments [Revenue](index=17&type=section&id=Revenue) The Group's revenue increased by 54.9% year-on-year, primarily driven by an increase in public and small-to-medium scale projects - The Group's revenue increased by approximately **HK$46.6 million** or **54.9%** from approximately **HK$84.8 million** for the six months ended June 30, 2024, to approximately **HK$131.4 million** for the six months ended June 30, 2025 [52](index=52&type=chunk) - The significant increase in revenue was primarily due to an increase in both relatively larger public projects (with revenue recognized of **HK$10.0 million** or more) and relatively smaller projects (with revenue recognized between **HK$1.0 million** and **HK$5.0 million**) for the six months ended June 30, 2025 [52](index=52&type=chunk) Number of Projects with Revenue Recognized | Revenue Scale | 2025 | 2024 | | :--- | :--- | :--- | | HK$10.0 million or above | 5 | 4 | | HK$5.0 million to below HK$10.0 million | 1 | 3 | | HK$1.0 million to below HK$5.0 million | 7 | 4 | | Below HK$1.0 million | 4 | 7 | | **Total** | **17** | **18** | [Cost of Services](index=17&type=section&id=Cost%20of%20Services) Service costs increased by 56.4% to approximately HK$123.5 million, commensurate with the rise in revenue - Cost of services increased by approximately **HK$44.6 million** or **56.4%** from approximately **HK$78.9 million** for the six months ended June 30, 2024, to approximately **HK$123.5 million** for the six months ended June 30, 2025 [55](index=55&type=chunk) - The increase in related cost of services was primarily due to the aforementioned increase in the Group's revenue [55](index=55&type=chunk) [Gross Profit and Gross Profit Margin](index=18&type=section&id=Gross%20Profit%20and%20Gross%20Profit%20Margin) Gross profit grew by 34.3% to HK$7.9 million, but gross profit margin decreased from 6.9% to 6.0%, mainly because the growth in service costs outpaced revenue growth, particularly due to increased subcontracting costs from completing major public projects - Gross profit increased by approximately **HK$2.0 million** or **34.3%** from approximately **HK$5.9 million** for the six months ended June 30, 2024, to approximately **HK$7.9 million** for the six months ended June 30, 2025 [56](index=56&type=chunk) - Gross profit margin decreased from approximately **6.9%** for the six months ended June 30, 2024, to approximately **6.0%** for the six months ended June 30, 2025 [56](index=56&type=chunk) - The decrease in gross profit margin was mainly due to a disproportionate increase in our cost of services compared to the increase in revenue, resulting from increased subcontracting costs incurred for the completion of two major public projects at the end of the period [56](index=56&type=chunk) [Other Income, Gains and Losses](index=18&type=section&id=Other%20Income,%20Gains%20and%20Losses) Other income, gains, and losses slightly increased, primarily due to higher gains from the disposal of property, plant, and equipment offsetting reduced bank interest income - Other income, gains and losses increased by approximately **HK$48,000** from approximately **HK$811,000** for the six months ended June 30, 2024, to approximately **HK$859,000** for the six months ended June 30, 2025 [57](index=57&type=chunk) - This increase was mainly due to an increase in gains from disposal of property, plant and equipment of approximately **HK$195,000**, offset by a decrease in bank interest income of approximately **HK$149,000** [57](index=57&type=chunk) [Administrative Expenses](index=18&type=section&id=Administrative%20Expenses) Administrative expenses increased by 6.3% to HK$4.8 million due to higher staff costs - Administrative expenses increased by approximately **HK$0.3 million** or **6.3%** from approximately **HK$4.5 million** for the six months ended June 30, 2024, to approximately **HK$4.8 million** for the six months ended June 30, 2025 [58](index=58&type=chunk) - The increase in administrative expenses was due to higher staff costs [58](index=58&type=chunk) [Finance Costs](index=18&type=section&id=Finance%20Costs) Finance costs slightly decreased, primarily due to the settlement of lease liabilities - The Group's finance costs were approximately **HK$30,000** and **HK$32,000** for the six months ended June 30, 2025 and 2024, respectively, arising from lease liabilities [59](index=59&type=chunk) - The decrease in finance costs was due to the settlement of lease liabilities from prior years [59](index=59&type=chunk) [Income Tax Expense](index=18&type=section&id=Income%20Tax%20Expense) Income tax expense decreased by approximately HK$0.3 million to HK$0.2 million, driven by a reduction in deferred tax expense - Income tax expense decreased by approximately **HK$0.3 million** from approximately **HK$0.4 million** for the six months ended June 30, 2024, to approximately **HK$0.2 million** for the six months ended June 30, 2025 [60](index=60&type=chunk) - This decrease resulted from a reduction in deferred tax expense [60](index=60&type=chunk) [Profit and Total Comprehensive Income for the Period](index=19&type=section&id=Profit%20and%20Total%20Comprehensive%20Income%20for%20the%20Period) Profit and total comprehensive income for the period significantly increased by 121.2% to HK$3.7 million, primarily attributable to the rise in revenue and gross profit - Profit and total comprehensive income increased by approximately **HK$2.0 million** or **121.2%** from approximately **HK$1.7 million** for the six months ended June 30, 2024, to approximately **HK$3.7 million** for the six months ended June 30, 2025 [61](index=61&type=chunk) - This increase was mainly attributable to the increase in revenue and gross profit for the six months ended June 30, 2025 [61](index=61&type=chunk) [Liquidity, Financial Resources and Capital Structure](index=19&type=section&id=Liquidity,%20Financial%20Resources%20and%20Capital%20Structure) The Group's net current assets and cash and bank balances both increased, leading to a significant improvement in the current ratio, but the gearing ratio substantially rose due to bond issuance - As of June 30, 2025, the Group recorded net current assets of approximately **HK$80.5 million** (December 31, 2024: approximately HK$74.9 million) [62](index=62&type=chunk) - As of June 30, 2025, the Group's cash and bank balances were approximately **HK$70.4 million** (December 31, 2024: approximately HK$63.4 million) [62](index=62&type=chunk) - As of June 30, 2025, the current ratio was approximately **5.3 times** (December 31, 2024: approximately 3.6 times) [63](index=63&type=chunk) - As of June 30, 2025, the gearing ratio was approximately **47.6%** (December 31, 2024: approximately 1.4%), primarily due to the bond issuance on June 25, 2025 [64](index=64&type=chunk) [Treasury Policy](index=20&type=section&id=Treasury%20Policy) The Group adopts a prudent financial management approach for its treasury policy, maintaining a robust liquidity position and mitigating credit risk through continuous customer credit assessments - The Group has adopted a prudent financial management approach for its treasury policy, thus maintaining a robust liquidity position for the six months ended June 30, 2025 [66](index=66&type=chunk) - The Group is committed to reducing credit risk through continuous credit and financial assessments of its customers [66](index=66&type=chunk) [Capital Expenditure](index=20&type=section&id=Capital%20Expenditure) For the six months ended June 30, 2025, the Group's capital expenditure on property, plant, and equipment was HK$0.2 million, primarily funded by internal resources - For the six months ended June 30, 2025, the Group invested approximately **HK$0.2 million** in the acquisition of property, plant and equipment [67](index=67&type=chunk) - Capital expenditure was primarily funded by internal resources [67](index=67&type=chunk) [Foreign Exchange Risk](index=20&type=section&id=Foreign%20Exchange%20Risk) The Group primarily operates in Hong Kong and faced no foreign exchange risk for the six months ended June 30, 2025, thus no foreign exchange hedging was undertaken - The Group primarily operates in Hong Kong and did not face any foreign exchange risk for the six months ended June 30, 2025 [68](index=68&type=chunk) - The Directors consider the Group's foreign exchange risk to be insignificant, and no foreign exchange hedging was undertaken for the six months ended June 30, 2025 [68](index=68&type=chunk) [Contingent Liabilities](index=20&type=section&id=Contingent%20Liabilities) The Group had no contingent liabilities as of June 30, 2025, and December 31, 2024 - The Group had no contingent liabilities as of June 30, 2025, and December 31, 2024 [69](index=69&type=chunk) [Pledge of Assets](index=20&type=section&id=Pledge%20of%20Assets) The Group had no assets pledged as of June 30, 2025, and December 31, 2024 - The Group had no assets pledged as of June 30, 2025, and December 31, 2024 [70](index=70&type=chunk) [Material Investments, Material Acquisitions or Disposals](index=20&type=section&id=Material%20Investments,%20Material%20Acquisitions%20or%20Disposals) For the six months ended June 30, 2025, the Group held no material investments, material acquisitions, or disposals of subsidiaries, associates, and joint ventures - For the six months ended June 30, 2025, the Group held no material investments, material acquisitions or disposals of subsidiaries, associates, and joint ventures [71](index=71&type=chunk) [Use of Proceeds from Bonds](index=21&type=section&id=Use%20of%20Proceeds%20from%20Bonds) The Group intended to use the net proceeds from the bonds to support its strategic entry into China's industrial park management sector, initially focusing on Ganzhou, Jiangxi Province, allocating funds to its Chinese subsidiary for preliminary preparations and trial operations - The net proceeds from the proposed bond issuance were intended to support the Group's strategic entry into the industrial park management sector in the People's Republic of China, initially focusing on Ganzhou, Jiangxi Province [72](index=72&type=chunk) - These funds would be allocated to a subsidiary of the Group for preliminary preparations and trial operations within its licensed business scope [72](index=72&type=chunk) [Future Plans for Material Investments or Capital Assets](index=21&type=section&id=Future%20Plans%20for%20Material%20Investments%20or%20Capital%20Assets) Apart from the use of bond proceeds, the Group has no other plans for material investments or capital assets - Save for what is disclosed in the section "Use of Proceeds from Bonds" above, the Group has no other plans for material investments or capital assets [73](index=73&type=chunk) [Environmental Policies and Performance](index=21&type=section&id=Environmental%20Policies%20and%20Performance) The Group is committed to environmental protection, implementing measures to minimize its environmental impact and ensuring compliance with all applicable Hong Kong environmental laws and regulations, with no reported violations during the period - The Group has implemented various environmental protection measures, such as reducing air pollutant emissions and noise assessments, to minimize the impact of its operations on the environment and natural resources [74](index=74&type=chunk) - As of the date of this announcement, the Group has not been subject to any prosecutions, fines, or penalties for breaching any applicable environmental laws or regulations [74](index=74&type=chunk) [Directors' and Chief Executive's Interests and Short Positions in Shares, Underlying Shares and Debentures of the Company and its Associated Corporations](index=22&type=section&id=Directors'%20and%20Chief%20Executive's%20Interests%20and%20Short%20Positions%20in%20Shares,%20Underlying%20Shares%20and%20Debentures%20of%20the%20Company%20and%20its%20Associated%20Corporations) As of June 30, 2025, Mr. Tse Shing Kee and Mr. Ho Ka Ki, as controlling shareholders, each jointly held 75% of the company's shares through Peak Investment Limited Directors' Long Positions in Shares and Underlying Shares of the Company and its Associated Corporations (As of June 30, 2025) | Director Name | Associated Company | Nature of Interest/Capacity | Number of Ordinary Shares Held | Percentage of Interest | | :--- | :--- | :--- | :--- | :--- | | Mr. Tse | The Company | Interest in controlled corporation/Jointly held interest with another person | 300,000,000 shares (L) | 75% | | Mr. Tse | Peak Investment Limited | Beneficial owner | 2 shares (L) | 50% | | Mr. Ho | The Company | Interest in controlled corporation/Jointly held interest with another person | 300,000,000 shares (L) | 75% | | Mr. Ho | Peak Investment Limited | Beneficial owner | 2 shares (L) | 50% | - These **300,000,000 shares** are held by Peak Investment Limited, which is directly held by Mr. Tse and Mr. Ho in equal shares, thus Mr. Tse and Mr. Ho are deemed to be interested in the **300,000,000 shares** jointly held through Peak Investment Limited under the SFO [79](index=79&type=chunk) [Substantial Shareholders' and Other Persons' Interests and Short Positions in Shares, Underlying Shares and Debentures of the Company and its Associated Corporations](index=23&type=section&id=Substantial%20Shareholders'%20and%20Other%20Persons'%20Interests%20and%20Short%20Positions%20in%20Shares,%20Underlying%20Shares%20and%20Debentures%20of%20the%20Company%20and%20its%20Associated%20Corporations) As of June 30, 2025, Peak Investment Limited held 75% of the company's shares, and the spouses of Mr. Tse Shing Kee and Mr. Ho Ka Ki were also deemed to hold the same proportion of shares due to spousal interests Interests of Substantial Shareholders and Other Persons in the Issued Share Capital of the Company (As of June 30, 2025) | Shareholder Name/Name | Nature of Interest/Capacity | Number of Ordinary Shares Held | Percentage of Interest | | :--- | :--- | :--- | :--- | | Peak Investment Limited | Beneficial owner | 300,000,000 shares (L) | 75% | | Ms. Cao Hongmei | Spouse's interest | 300,000,000 shares (L) | 75% | | Ms. Li Jianqin | Spouse's interest | 300,000,000 shares (L) | 75% | - Ms. Cao Hongmei is the spouse of Mr. Tse, and Ms. Li Jianqin is the spouse of Mr. Ho; under Part XV of the SFO, they are deemed to be interested in the shares of the Company held by their respective spouses [84](index=84&type=chunk) [Purchase, Sale or Redemption of Listed Securities](index=24&type=section&id=Purchase,%20Sale%20or%20Redemption%20of%20Listed%20Securities) For the six months ended June 30, 2025, neither the company nor any of its subsidiaries purchased, sold, or redeemed any shares - For the six months ended June 30, 2025, neither the Company nor any of its subsidiaries purchased, sold or redeemed any shares [83](index=83&type=chunk) [Share Option Scheme](index=25&type=section&id=Share%20Option%20Scheme) The company adopted a share option scheme as an incentive to reward eligible participants for their contributions, with limits on total shares issuable and individual allocations, and a maximum exercise period of 10 years, but no options have been granted since adoption - The Share Option Scheme is a share incentive scheme designed to enable the Company to grant options to eligible participants as a reward or return for their contributions to the Group [86](index=86&type=chunk) - The total number of shares available for issue under the Share Option Scheme shall not exceed **10%** of the shares in issue at the time of initial listing on the Stock Exchange (i.e., **40,000,000 shares**) [89](index=89&type=chunk) - The total number of issued shares that may be issued to each grantee upon exercise of options granted under the Share Option Scheme and any other share option schemes of the Group in any 12-month period shall not exceed **1%** of the Company's then issued share capital [90](index=90&type=chunk) - No options have been granted under the Share Option Scheme since its adoption, therefore, as of the date of this announcement, there are no outstanding options under the Share Option Scheme [94](index=94&type=chunk) [Directors' Securities Transactions](index=27&type=section&id=Directors'%20Securities%20Transactions) The company adopted the Model Code as its code of conduct for directors' securities transactions and confirmed that all directors and relevant employees complied with the requirements for the six months ended June 30, 2025 - The Company has adopted the Model Code as its code of conduct for directors' securities transactions [95](index=95&type=chunk) - Following specific inquiries with all Directors, all Directors confirmed that they had complied with the required standards for securities transactions set out in the Model Code for the six months ended June 30, 2025 [95](index=95&type=chunk) [Competing Business](index=27&type=section&id=Competing%20Business) The Directors confirmed that, from the listing date up to the date of this announcement, no controlling shareholder or Director and their respective close associates held any interest in any business directly or indirectly competing with the Group's business - The Directors confirmed that, from the listing date up to the date of this announcement, no controlling shareholder or Director and their respective close associates held any interest in any business (other than the Group's business) that directly or indirectly competes or may compete with the Group's business [96](index=96&type=chunk) [Employees and Remuneration Policy](index=27&type=section&id=Employees%20and%20Remuneration%20Policy) As of June 30, 2025, the Group's employee count increased to 180, with a corresponding rise in total staff costs, and its remuneration policy aligns with market practices based on individual performance and experience - As of June 30, 2025, the Group had **180 employees** (December 31, 2024: 150 employees), excluding Directors [97](index=97&type=chunk) - For the six months ended June 30, 2025, total staff costs (excluding Directors' emoluments) were approximately **HK$26.2 million** (June 30, 2024: HK$20.1 million) [99](index=99&type=chunk) - The Group's remuneration policy is consistent with prevailing market practices, and employee remuneration is determined based on individual performance and experience [99](index=99&type=chunk) [Corporate Governance Practices](index=28&type=section&id=Corporate%20Governance%20Practices) The Group is committed to achieving high standards of corporate governance, having adopted the principles and code provisions of the Corporate Governance Code in Appendix C1 of the Listing Rules, and believes it has complied with all applicable code provisions as of this announcement date - The Group has adopted the principles and code provisions of the Corporate Governance Code set out in Appendix C1 to the Listing Rules as the basis for its corporate governance practices [100](index=100&type=chunk) - The Board believes that the Group has complied with all applicable code provisions set out in the Corporate Governance Code as of the date of this announcement [100](index=100&type=chunk) [Audit Committee](index=28&type=section&id=Audit%20Committee) The company has established an Audit Committee comprising four members, with Chairman Mr. Cao Bingchang possessing over 21 years of professional accounting experience, and the committee has reviewed the interim financial statements, deeming them compliant with accounting standards and requirements - The Audit Committee comprises four members: Mr. Cao Bingchang, Ms. Zhao Shaoling, Mr. Kuang Zhicheng, and Mr. Ling Zhaozeng [101](index=101&type=chunk) - Mr. Cao Bingchang, the Chairman of the Audit Committee, is a practicing accountant with over **21 years** of professional accounting experience [101](index=101&type=chunk) - This announcement and the unaudited condensed consolidated interim financial statements have not been audited by the Company's external auditor but have been reviewed by the Company's Audit Committee, which considers them to be in compliance with applicable accounting standards and requirements and to have made appropriate disclosures [101](index=101&type=chunk) [Interim Dividend](index=28&type=section&id=Interim%20Dividend) The Board does not recommend an interim dividend for the period ended June 30, 2025, but a special dividend of 17.5 HK cents per share was paid in 2024 - The Board does not recommend an interim dividend for the period ended June 30, 2025 (six months ended June 30, 2024: nil HK cents) [102](index=102&type=chunk) - At the Board meeting held on January 19, 2024, the Board recommended a special dividend of **17.5 HK cents** per ordinary share, totaling **HK$70,000,000**, which was paid on February 16, 2024 [103](index=103&type=chunk) [Events After Reporting Period](index=29&type=section&id=Events%20After%20Reporting%20Period) After the reporting period, the Group decided not to proceed with its plan to expand into China's management services industry and fully redeemed previously issued bonds on July 25, 2025, to streamline its capital structure and retain financial flexibility - The Group has decided not to proceed with the proposed expansion into China's management services industry at this stage [105](index=105&type=chunk) - Following amicable discussions with the subscribers, the Group reached an agreement to fully redeem and settle the bonds in cash on July 25, 2025, without any accrued interest [105](index=105&type=chunk) - The Group believes that completing this transaction is an appropriate and timely step to streamline its capital structure and retain financial flexibility for future strategic developments [105](index=105&type=chunk) [By Order of the Board](index=29&type=section&id=By%20Order%20of%20the%20Board) This announcement is issued by Mr. Tse Shing Kee, Chairman of Fung Shing Holdings Limited, on behalf of the Board, listing the Board members as of the announcement date - This announcement is issued by Mr. Tse Shing Kee, Chairman of Fung Shing Holdings Limited, by order of the Board [106](index=106&type=chunk) - As of the date of this announcement, the Board comprises executive Directors Mr. Tse Shing Kee (Chairman of the Board) and Mr. Ho Ka Ki (Chief Executive Officer), and independent non-executive Directors Ms. Zhao Shaoling, Mr. Kuang Zhicheng, Mr. Ling Zhaozeng, and Mr. Cao Bingchang [107](index=107&type=chunk)

Interim Results Summary This summary outlines the key financial performance of Hong Dao Enterprise Holdings Limited for the six months ended June 30, 2025, showing significant revenue growth, reduced gross loss, but still a net loss, with no interim dividend declared - For the six months ended June 30, 2025, revenue increased by approximately **77.3%** to approximately **HKD 119.1 million** (2024: approximately HKD 67.2 million)[5](index=5&type=chunk) - Gross loss decreased by approximately **HKD 10.4 million** to approximately **HKD 3.2 million** (2024: approximately HKD 13.7 million)[5](index=5&type=chunk) - Loss attributable to owners of the Company was approximately **HKD 15.5 million** (2024: approximately HKD 19.0 million)[5](index=5&type=chunk) - Basic loss per share was approximately **1.21 HK cents** (2024: approximately 1.85 HK cents)[5](index=5&type=chunk) - The Board resolved not to recommend the declaration of an interim dividend for the six months ended June 30, 2025 (2024: nil)[5](index=5&type=chunk) Unaudited Condensed Consolidated Interim Statement of Profit or Loss and Other Comprehensive Income This statement presents the Group's unaudited consolidated profit or loss and other comprehensive income for the six months ended June 30, 2025, compared to the same period in 2024, detailing key financial data such as revenue, cost of services, gross loss, other income, administrative expenses, impairment losses, finance costs, and loss for the period Key Data from Statement of Profit or Loss for H1 2025 and 2024 (HKD in thousands) | Indicator | 2025 (Unaudited) | 2024 (Unaudited) | | :------------ | :---------------- | :---------------- | | Revenue | 119,135 | 67,200 | | Cost of services | (122,384) | (80,889) | | Gross loss | (3,249) | (13,689) | | Other income | 506 | 1 | | Administrative expenses | (3,875) | (3,182) | | Impairment losses on trade receivables and contract assets | (8,853) | (2,052) | | Finance costs | (73) | (50) | | Loss before income tax | (15,544) | (18,972) | | Income tax credit/(expense) | 8 | (62) | | Loss and total comprehensive expenses for the period | (15,536) | (19,034) | | Loss attributable to owners of the Company | (15,536) | (19,034) | | Basic and diluted loss per share (HK cents) | (1.21) | (1.85) | Unaudited Condensed Consolidated Interim Statement of Financial Position This statement presents the Group's unaudited consolidated financial position as of June 30, 2025, and December 31, 2024, detailing the composition and changes in non-current assets, current assets, current liabilities, non-current liabilities, and equity Key Data from Statement of Financial Position as of June 30, 2025, and December 31, 2024 (HKD in thousands) | Indicator | 2025 June 30 (Unaudited) | 2024 Dec 31 (Audited) | | :------------ | :----------------------- | :----------------------- | | **Assets** | | | | Property, plant and equipment | 1,024 | 462 | | Goodwill | 64,871 | 19,470 | | Total non-current assets | 65,895 | 19,932 | | Trade receivables | 80,991 | 127,278 | | Contract assets | 39,554 | 25,672 | | Cash and bank balances | 9,031 | 9,680 | | Total current assets | 159,999 | 196,877 | | **Liabilities** | | | | Trade payables | 39,485 | 69,891 | | Accrued liabilities and other payables | 31,510 | 24,229 | | Promissory notes | 32,310 | – | | Bank borrowings | 2,885 | 1,366 | | Total current liabilities | 107,270 | 95,897 | | Net current assets | 52,729 | 100,980 | | Total assets less current liabilities | 118,624 | 120,912 | | Lease liabilities (non-current) | 66 | – | | Deferred tax liabilities | 26 | 34 | | Total non-current liabilities | 92 | 34 | | **Equity** | | | | Share capital | 14,095 | 11,746 | | Reserves | 104,437 | 109,132 | | Total equity | 118,532 | 120,878 | Notes to the Interim Financial Statements This section provides detailed notes to the interim financial statements, covering the company's general information, accounting policies, segment reporting, specific components and changes in assets and liabilities, and significant acquisition activities [1. General Information](index=5&type=section&id=1.%20General%20Information) Hong Dao Enterprise Holdings Limited was incorporated in the Cayman Islands on March 13, 2019, and listed on the Main Board of the HKEX on March 31, 2021, primarily engaged in investment holding, with subsidiaries providing RMAA engineering services and distributing building materials in Hong Kong - The Company was incorporated in the Cayman Islands on March 13, 2019, and listed on the Main Board of the Stock Exchange of Hong Kong on March 31, 2021[9](index=9&type=chunk)[10](index=10&type=chunk) - Its principal business is investment holding, with subsidiaries primarily providing RMAA engineering services and distributing building materials in Hong Kong[10](index=10&type=chunk) - The Company's holding company and ultimate holding company is Richfield Enterprise Holdings Limited[10](index=10&type=chunk) [2. Basis of Preparation](index=5&type=section&id=2.%20Basis%20of%20Preparation) The unaudited condensed consolidated interim financial statements are prepared in accordance with HKAS 34 and Appendix 16 of the Listing Rules, to be read with the Group's annual financial statements for the year ended December 31, 2024, with consistent accounting policies and reviewed by the audit committee - The interim financial statements are prepared in accordance with Hong Kong Accounting Standard 34 and Appendix 16 of the Listing Rules issued by the Hong Kong Institute of Certified Public Accountants[11](index=11&type=chunk) - The accounting policies adopted are consistent with those applied in the Group's annual financial statements for the year ended December 31, 2024, except for the adoption of revised HKFRSs as disclosed in note 3[12](index=12&type=chunk) - The financial statements are presented in Hong Kong Dollars, with all values rounded to the nearest thousand, and have not been audited or reviewed by the Company's external auditor, but have been reviewed by the Company's audit committee[12](index=12&type=chunk) [3. Adoption of Hong Kong Financial Reporting Standards](index=6&type=section&id=3.%20Adoption%20of%20Hong%20Kong%20Financial%20Reporting%20Standards) The Group first applied new and revised HKFRSs, including HKAS 21 (Amendment) "Lack of Exchangeability," effective January 1, 2025, during this interim period, with no significant impact on its financial position or performance - During the current interim period, the Group has first applied the new and revised HKFRSs that are mandatorily effective for the Group's annual period beginning on January 1, 2025, for the preparation of the condensed consolidated financial statements[14](index=14&type=chunk) - The application of the new and revised HKFRSs has had no material impact on the Group's financial positions and performance for the current and prior periods and/or the disclosures set out in these condensed consolidated financial statements[14](index=14&type=chunk) [4. HKFRSs Issued But Not Yet Effective](index=6&type=section&id=4.%20HKFRSs%20Issued%20But%20Not%20Yet%20Effective) The Group has not early adopted any issued but not yet effective standards, interpretations, or amendments, and their adoption is not expected to have a significant impact on the condensed consolidated interim financial statements - The Group has not early adopted any standards, interpretations or amendments that have been issued but are not yet effective[15](index=15&type=chunk) - The Group is currently assessing the expected impact of these developments in the period of initial application, and to date, it has concluded that the adoption of these amendments is unlikely to have a significant impact on the Group's condensed consolidated interim financial statements[16](index=16&type=chunk) [5. Operating Segment Information](index=7&type=section&id=5.%20Operating%20Segment%20Information) The Group's revenue and non-current assets are solely derived from and located in Hong Kong, indicating a single geographical operating segment, with changes in revenue contributions from major customers during the reporting period - The Group's revenue is solely generated from Hong Kong, and its non-current assets are also located in Hong Kong[18](index=18&type=chunk) Major Customer Revenue Contribution (HKD in thousands) | Customer | H1 2025 | H1 2024 | | :--- | :----------- | :----------- | | Customer A | 40,024 | 29,829 | | Customer B | 29,858 | 30,561 | | Customer C | N/A* | 24,108 | | Customer D | N/A* | 17,696 | *Corresponding revenue contribution to the Group's total revenue did not exceed 10% [6. Revenue and Segment Information](index=8&type=section&id=6.%20Revenue%20and%20Segment%20Information) The Group's revenue primarily stems from RMAA engineering services and building material distribution, expanded by the acquisition of Shun Tat Construction Engineering Limited in January 2025, with revenue recognition varying by business nature - Revenue represents the fair value of amounts received and receivable from the Group's provision of RMAA works and distribution of building materials to customers[20](index=20&type=chunk) - In January 2025, the Group acquired 100% equity interest in Shun Tat Construction Engineering Limited, which is principally engaged in providing contracting services for RMAA works in Hong Kong[20](index=20&type=chunk) Revenue Breakdown (HKD in thousands) | Revenue Source | H1 2025 | H1 2024 | | :------- | :----------- | :----------- | | RMAA works | 118,251 | 65,958 | | Distribution of building materials | 884 | 1,242 | | **Total** | **119,135** | **67,200** | | **Type of contract nature** | | | | Main contractor | 48,400 | 32,248 | | Sub-contractor | 69,851 | 33,710 | | **Type of development** | | | | Residential | 77,495 | 51,221 | | Commercial and industrial | 38,539 | 11,911 | | Institutional | 2,217 | 2,826 | - Revenue from contracts with customers is generated from RMAA works provided in Hong Kong under long-term contracts and recognized over time during the reporting period, while revenue from the distribution of building materials is recognized when control of the goods is transferred[21](index=21&type=chunk)[22](index=22&type=chunk) [7. Other Income](index=9&type=section&id=7.%20Other%20Income) The Group's other income significantly increased to approximately HKD 0.5 million in H1 2025 from HKD 1,000 in the prior year, mainly due to non-operating service income from providing seepage and investigation testing services to related parties Other Income (HKD in thousands) | Income Source | H1 2025 | H1 2024 | | :------- | :----------- | :----------- | | Bank interest income | 6 | 1 | | Non-operating service income | 500 | – | | **Total** | **506** | **1** | - Non-operating service income represents income charged by the Company for providing seepage and investigation testing services to companies owned by the Company's associates[23](index=23&type=chunk) [8. Finance Costs](index=9&type=section&id=8.%20Finance%20Costs) The Group's finance costs increased from HKD 50,000 in the prior year to HKD 73,000 in H1 2025, primarily due to higher interest on bank borrowings Finance Costs (HKD in thousands) | Cost Source | H1 2025 | H1 2024 | | :------- | :----------- | :----------- | | Interest on bank borrowings | 56 | 45 | | Interest on lease liabilities | 17 | 5 | | **Total** | **73** | **50** | [9. Loss Before Income Tax](index=9&type=section&id=9.%20Loss%20Before%20Income%20Tax) This section details expenses deducted in calculating loss before income tax, including total employee benefit expenses and depreciation of property, plant, and equipment, with employee benefits forming a significant portion of service costs Loss Before Income Tax Components (HKD in thousands) | Item | H1 2025 | H1 2024 | | :--- | :----------- | :----------- | | Total employee benefit expenses | 3,637 | 3,043 | | Depreciation of property, plant and equipment | 307 | 144 | - Employee benefit expenses included in cost of services for the six months ended June 30, 2025, were approximately **HKD 2,306,000** (2024: approximately HKD 1,996,000)[25](index=25&type=chunk) [10. Income Tax Credit/(Expense)](index=10&type=section&id=10.%20Income%20Tax%20Credit%2F(Expense)) The Group is exempt from income tax in the Cayman Islands and BVI, while Hong Kong profits tax uses a two-tiered system; this period saw a shift from tax expense to credit due to deferred tax liability changes - The Group is not subject to income tax in the Cayman Islands and the British Virgin Islands[26](index=26&type=chunk) - Hong Kong profits tax is provided at a rate of **8.25%** on the first **HKD 2 million** of estimated assessable profits and **16.5%** on estimated assessable profits exceeding **HKD 2 million**[26](index=26&type=chunk) - Income tax changed from an expense of approximately **HKD 62,000** in 2024 to a credit of approximately **HKD 8,000** in 2025, due to changes in deferred tax liabilities[69](index=69&type=chunk) [11. Dividends](index=10&type=section&id=11.%20Dividends) The Board has resolved not to recommend the declaration of an interim dividend for the six months ended June 30, 2025, and 2024 - The Board has resolved not to recommend the declaration of an interim dividend for the six months ended June 30, 2025, and 2024[27](index=27&type=chunk) [12. Loss Per Share](index=10&type=section&id=12.%20Loss%20Per%20Share) Basic and diluted loss per share are calculated based on the loss attributable to owners of the Company and the weighted average number of ordinary shares Loss Per Share Calculation Data | Item | H1 2025 | H1 2024 | | :--- | :----------- | :----------- | | Loss attributable to owners of the Company (HKD in thousands) | 15,536 | 19,034 | | Weighted average number of ordinary shares | 1,285,949,000 | 1,029,180,000 | - For the six months ended June 30, 2025, basic loss per share was approximately **1.21 HK cents** (2024: approximately 1.85 HK cents)[5](index=5&type=chunk) [13. Property, Plant and Equipment](index=10&type=section&id=13.%20Property,%20Plant%20and%20Equipment) For the six months ended June 30, 2025, the Group's capital expenditure was approximately HKD 15,000, primarily for office equipment, a significant decrease from HKD 0.1 million in the prior year - For the six months ended June 30, 2025, the Group incurred capital expenditure of approximately **HKD 15,000** (2024: approximately HKD 0.1 million) for the acquisition of office equipment[30](index=30&type=chunk) [14. Goodwill](index=10&type=section&id=14.%20Goodwill) The Group's goodwill significantly increased due to the acquisition of Shun Tat (approximately HKD 45.4 million) in January 2025 and Brave Group (HKD 19.47 million) in April 2024, with no impairment loss recognized after management's recoverability assessment - In January 2025, the Group acquired 100% equity interest in Shun Tat, resulting in goodwill of approximately **HKD 45,401,000**[33](index=33&type=chunk) - On April 30, 2024, the Group acquired 100% equity interest in Brave Group, resulting in goodwill of **HKD 19,470,000**[34](index=34&type=chunk) - Management assessed the recoverable amount of the cash-generating units based on value-in-use calculations and did not recognize any impairment loss[35](index=35&type=chunk) [15. Trade Receivables](index=11&type=section&id=15.%20Trade%20Receivables) As of June 30, 2025, net trade receivables decreased to HKD 80.991 million from HKD 127.278 million on December 31, 2024, with a credit period of 30 to 45 days and a significant portion aged over one year Trade Receivables (HKD in thousands) | Item | 2025 June 30 | 2024 Dec 31 | | :--- | :----------- | :------------- | | Trade receivables, gross | 118,653 | 161,018 | | Less: Loss allowance recognized | (37,662) | (33,740) | | **Net** | **80,991** | **127,278** | - The credit period for trade receivables is **30 to 45 days** from the invoice date[36](index=36&type=chunk) Ageing Analysis of Trade Receivables (HKD in thousands) | Ageing | 2025 June 30 | 2024 Dec 31 | | :--- | :----------- | :------------- | | Within 1 month | 11,917 | 30,135 | | 1 to 3 months | 4,128 | 359 | | Over 3 months, within 1 year | 2,078 | 30,091 | | Over 1 year | 62,868 | 66,693 | [16. Contract Assets](index=12&type=section&id=16.%20Contract%20Assets) As of June 30, 2025, net contract assets increased to HKD 39.554 million from HKD 25.672 million on December 31, 2024, with approximately HKD 19.126 million expected to be recovered after one year Contract Assets (HKD in thousands) | Item | 2025 June 30 | 2024 Dec 31 | | :--- | :----------- | :------------- | | Retention receivables | 48,987 | 29,646 | | Less: Loss allowance for credit losses | (9,433) | (3,974) | | **Net** | **39,554** | **25,672** | - As of June 30, 2025, the amount of contract assets expected to be recovered after one year was approximately **HKD 19,126,000** (December 31, 2024: approximately HKD 13,404,000)[38](index=38&type=chunk) [17. Deposits, Prepayments and Other Receivables](index=12&type=section&id=17.%20Deposits,%20Prepayments%20and%20Other%20Receivables) As of June 30, 2025, total deposits, prepayments, and other receivables decreased to HKD 28.864 million from HKD 33.138 million on December 31, 2024, with all amounts neither overdue nor impaired Deposits, Prepayments and Other Receivables (HKD in thousands) | Item | 2025 June 30 | 2024 Dec 31 | | :--- | :----------- | :------------- | | Rental, utilities and sundry deposits | 2,931 | 2,597 | | Prepaid construction costs | 23,131 | 27,782 | | Other prepayments | 259 | 192 | | Other receivables | 2,543 | 2,567 | | **Total** | **28,864** | **33,138** | - None of the above deposits and other receivables were overdue or impaired[39](index=39&type=chunk) [18. Trade Payables](index=13&type=section&id=18.%20Trade%20Payables) As of June 30, 2025, trade payables decreased to HKD 39.485 million from HKD 69.891 million on December 31, 2024, with a credit period of 30 days and a higher proportion of amounts aged over three months Trade Payables (HKD in thousands) | Item | 2025 June 30 | 2024 Dec 31 | | :--- | :----------- | :------------- | | Trade payables | 39,485 | 69,891 | - The credit period for trade payables is **30 days** from the invoice date[40](index=40&type=chunk) Ageing Analysis of Trade Payables (HKD in thousands) | Ageing | 2025 June 30 | 2024 Dec 31 | | :--- | :----------- | :------------- | | Within 1 month | 9,202 | 19,859 | | 1 to 3 months | 62 | 9,100 | | Over 3 months | 30,221 | 40,932 | | **Total** | **39,485** | **69,891** | [19. Accrued Liabilities and Other Payables](index=13&type=section&id=19.%20Accrued%20Liabilities%20and%20Other%20Payables) As of June 30, 2025, total accrued liabilities and other payables increased to HKD 31.512 million from HKD 24.229 million on December 31, 2024, with a portion of retention payables expected to be settled after one year Accrued Liabilities and Other Payables (HKD in thousands) | Item | 2025 June 30 | 2024 Dec 31 | | :--- | :----------- | :------------- | | Retention payables | 11,451 | 8,823 | | Other payables and accrued charges | 5,394 | 3,121 | | Accrued contract costs | 14,667 | 12,285 | | **Total** | **31,512** | **24,229** | - As of June 30, 2025, retention payables expected to be settled after one year amounted to approximately **HKD 6,362,000** (December 31, 2024: approximately HKD 5,738,000)[41](index=41&type=chunk) [20. Promissory Notes](index=13&type=section&id=20.%20Promissory%20Notes) The Group issued approximately HKD 32.3 million in promissory notes in January 2025 as partial consideration for the acquisition of Shun Tat's equity, which are transferable, interest-free, and due two years after issuance, with no principal repaid as of June 30, 2025 - In January 2025, the Group issued promissory notes with a fair value of approximately **HKD 32.3 million** in Hong Kong as partial consideration for the acquisition of Shun Tat's equity[42](index=42&type=chunk) - The promissory notes are transferable, mature two years after issuance, and bear no interest[42](index=42&type=chunk) - For the six months ended June 30, 2025, the Group did not repay any principal[42](index=42&type=chunk) [21. Share Capital](index=14&type=section&id=21.%20Share%20Capital) The company's issued share capital increased due to acquisition activities, with a total of 1,409,523,810 ordinary shares issued and total shareholders' funds of approximately HKD 14.095 million as of June 30, 2025 - In January 2025, the Company issued **234,920,635** ordinary shares as partial consideration for the acquisition of Shun Tat[43](index=43&type=chunk) - As of June 30, 2025, the Company had **1,409,523,810** ordinary shares in issue, and the Group's total shareholders' funds amounted to approximately **HKD 14,095,000**[43](index=43&type=chunk) - On April 30, 2024, the Company issued **174,603,175** new ordinary shares as consideration for the acquisition of the entire equity interest in Brave Group[43](index=43&type=chunk) [22. Acquisition of Subsidiaries](index=14&type=section&id=22.%20Acquisition%20of%20Subsidiaries) This section details two significant subsidiary acquisitions: Shun Tat in January 2025 and Brave Group in April 2024, including consideration, acquired assets and liabilities, goodwill generated, and their impact on the Group's performance [For the Six Months Ended June 30, 2025](index=14&type=section&id=For%20the%20Six%20Months%20Ended%20June%2030,%202025) The Group acquired 100% equity of Shun Tat in January 2025 for HKD 45.7 million, paid via shares and promissory notes, generating HKD 45.401 million in goodwill, contributing approximately HKD 21.7 million in revenue but incurring a loss of HKD 1.8 million - In January 2025, the Group acquired **100%** equity interest in Shun Tat, which is principally engaged in construction business in Hong Kong[44](index=44&type=chunk) - The consideration transferred was **HKD 45,700,000**, settled by the issue of **234,920,635** ordinary shares and promissory notes of approximately **HKD 32.3 million**[45](index=45&type=chunk) - The acquisition resulted in goodwill of approximately **HKD 45,401,000**, primarily due to the assembled workforce and certain potential customer contracts[47](index=47&type=chunk) - Acquisition-related costs of approximately **HKD 0.8 million** were excluded from the consideration transferred and recognized as an expense in administrative expenses[45](index=45&type=chunk) - Loss for the period included approximately **HKD 1.8 million** from Shun Tat's additional business, and revenue for the period included approximately **HKD 21.7 million** from Shun Tat[50](index=50&type=chunk) [For the Six Months Ended June 30, 2024](index=16&type=section&id=For%20the%20Six%20Months%20Ended%20June%2030,%202024) The Group acquired 100% equity of Brave Group on April 30, 2024, for HKD 22 million, paid via shares, generating HKD 19.47 million in goodwill, contributing approximately HKD 1.2 million in revenue but incurring a loss of HKD 0.1 million - On April 30, 2024, the Group acquired **100%** equity interest in Brave Group, which is principally engaged in providing contracting services for RMAA works and distributing building materials in Hong Kong[51](index=51&type=chunk) - The consideration transferred was **HKD 22,000,000**, settled by the issue of **174,603,175** ordinary shares[52](index=52&type=chunk)[55](index=55&type=chunk) - The acquisition resulted in goodwill of **HKD 19,470,000**, primarily due to the assembled workforce and certain potential customer contracts[56](index=56&type=chunk) - Acquisition-related costs of approximately **HKD 0.3 million** were excluded from the consideration transferred and recognized as an expense in administrative expenses during the period[52](index=52&type=chunk) - Loss for the period included approximately **HKD 0.1 million** from Brave Group's additional business, and revenue for the period included approximately **HKD 1.2 million** from Brave Group[58](index=58&type=chunk) Management Discussion and Analysis This section provides a comprehensive review and analysis by management of the Group's business operations, future strategies, detailed financial performance, liquidity, capital structure, and other relevant company information [Business Review](index=18&type=section&id=Business%20Review) As an RMAA engineering contractor in Hong Kong, the Group's revenue grew significantly by 77.3% to HKD 119.1 million for the six months ended June 30, 2025, primarily due to two construction company acquisitions, with improved gross loss margin and a diversified project portfolio - The Group is a contractor specializing in repair, maintenance, alteration, and addition (RMAA) works in Hong Kong[59](index=59&type=chunk) - Revenue increased by approximately **HKD 51.9 million** or **77.3%** to approximately **HKD 119.1 million**, mainly achieved through the acquisition of two construction companies[60](index=60&type=chunk) - The gross loss margin improved due to prudent pricing, reduced risk of cost overruns, stricter project supervision, and more stringent quality control[61](index=61&type=chunk) - As of June 30, 2025, the Group had **19 projects** on hand (December 31, 2024: 9 projects)[62](index=62&type=chunk) [Outlook](index=19&type=section&id=Outlook) The Group plans to expand its business by exploring potential M&A opportunities to integrate resources, expertise, and project portfolios, thereby enhancing operational efficiency, market coverage, and technical capabilities, creating greater value for customers, and achieving sustainable growth - The Group's strategy is to explore potential opportunities for mergers and acquisitions of other construction companies to expand its business[63](index=63&type=chunk) - Through this expansion strategy, the Group can integrate resources, expertise, and project portfolios, thereby providing more efficient and comprehensive services[63](index=63&type=chunk) - These integrations also expand the Group's market coverage and technical capabilities, enabling it to undertake larger and more complex projects[63](index=63&type=chunk) [Financial Review](index=19&type=section&id=Financial%20Review) This section provides a detailed review of the Group's financial performance, including changes in revenue, gross loss and gross loss margin, other income, administrative expenses, finance costs, income tax, and total loss and comprehensive expenses, along with their main drivers [Revenue](index=19&type=section&id=Revenue) For the six months ended June 30, 2025, the Group's unaudited consolidated revenue was approximately HKD 119.1 million, a 77.3% increase from the prior year, mainly due to contract contributions from acquired Brave Group and Shun Tat - For the six months ended June 30, 2025, the Group's unaudited consolidated revenue was approximately **HKD 119.1 million** (2024: approximately HKD 67.2 million), an increase of approximately **77.3%**[64](index=64&type=chunk) - The increase in revenue was mainly due to revenue contributions from existing contracts of the acquired Brave Group and Shun Tat[64](index=64&type=chunk) [Gross Loss and Gross Loss Margin](index=19&type=section&id=Gross%20Loss%20and%20Gross%20Loss%20Margin) For the six months ended June 30, 2025, gross loss decreased to approximately HKD 3.2 million (2024: HKD 13.7 million), with the gross loss margin improving to approximately 2.7% (2024: 20.4%), reflecting prudent pricing despite project delays and cost overruns - Gross loss was approximately **HKD 3.2 million** (2024: approximately HKD 13.7 million), and the gross loss margin was approximately **2.7%** (2024: approximately 20.4%)[65](index=65&type=chunk) - The gross loss was due to delays and cost overruns in existing construction projects, but the gross loss margin improved[65](index=65&type=chunk) [Other Income](index=19&type=section&id=Other%20Income) For the six months ended June 30, 2025, other income significantly increased to approximately HKD 0.5 million (2024: HKD 1,000), primarily comprising bank interest income and non-operating service income from related parties - Other income was approximately **HKD 0.5 million** (2024: approximately HKD 1,000)[66](index=66&type=chunk) - It mainly included bank interest income of approximately **HKD 6,000** and non-operating service income of approximately **HKD 0.5 million** from providing seepage and investigation testing services[66](index=66&type=chunk) [Administrative Expenses](index=20&type=section&id=Administrative%20Expenses) Administrative expenses increased by 21.8% to approximately HKD 3.9 million in H1 2025 from HKD 3.2 million in the prior year, mainly due to increased overheads from the Group's expansion through acquisitions - Administrative expenses increased from approximately **HKD 3.2 million** to approximately **HKD 3.9 million**, an increase of approximately **HKD 0.7 million** or **21.8%**[67](index=67&type=chunk) - The increase was mainly due to the expansion of the Group's scale through acquisitions, leading to increased overheads[67](index=67&type=chunk) [Finance Costs](index=20&type=section&id=Finance%20Costs) For the six months ended June 30, 2025, the Group's finance costs increased to approximately HKD 73,000 from HKD 50,000 in the prior year, primarily due to higher interest on bank borrowings - The Group's finance costs were approximately **HKD 73,000** (2024: approximately HKD 50,000)[68](index=68&type=chunk) - The increase in finance costs was due to higher interest on bank borrowings[68](index=68&type=chunk) [Income Tax Credit/(Expense)](index=20&type=section&id=Income%20Tax%20Credit%2F(Expense)) Income tax shifted from an expense of approximately HKD 62,000 in the prior year to a credit of approximately HKD 8,000 in the current period, primarily due to changes in deferred tax liabilities - Income tax changed from an expense of approximately **HKD 62,000** in the prior period of 2024 to a credit of approximately **HKD 8,000** in the current period of 2025[69](index=69&type=chunk) - The change was due to changes in deferred tax liabilities[69](index=69&type=chunk) [Loss and Total Comprehensive Expenses for the Period](index=20&type=section&id=Loss%20and%20Total%20Comprehensive%20Expenses%20for%20the%20Period) Loss and total comprehensive expenses for the period decreased by 18.4% to approximately HKD 15.5 million (2024: HKD 19.0 million), mainly due to improved gross loss margin, partially offset by increased impairment losses on trade receivables and contract assets, with net loss margin improving from 28.3% to 13.0% - Loss and total comprehensive expenses for the period decreased from approximately **HKD 19.0 million** to approximately **HKD 15.5 million**, a decrease of approximately **HKD 3.5 million** or **18.4%**[70](index=70&type=chunk) - The decrease was mainly due to an improved gross loss margin, partially offset by increased impairment losses on trade receivables and contract assets[70](index=70&type=chunk) - The net loss margin for the six months ended June 30, 2025, and 2024 was approximately **13.0%** and approximately **28.3%**, respectively[70](index=70&type=chunk) [Liquidity, Financial Resources and Capital Structure](index=21&type=section&id=Liquidity,%20Financial%20Resources%20and%20Capital%20Structure) The Group maintains a sound liquidity position, with primary funding sources including cash from operations, IPO proceeds, bank borrowings, and promissory notes, and a capital structure mainly comprising issued share capital and reserves, supplemented by borrowings - Liquidity needs primarily arise from working capital for business operations, with major sources being cash generated from operations, IPO proceeds, bank borrowings, and promissory notes[71](index=71&type=chunk) - As of June 30, 2025, the Group maintained a sound liquidity position, with a net current asset balance of approximately **HKD 52.7 million** (December 31, 2024: approximately HKD 101.0 million)[71](index=71&type=chunk) - Cash and bank balances were approximately **HKD 9.0 million** (December 31, 2024: approximately HKD 9.7 million)[71](index=71&type=chunk) [Bank Borrowings and Promissory Notes](index=21&type=section&id=Bank%20Borrowings%20and%20Promissory%20Notes) As of June 30, 2025, bank borrowings increased to approximately HKD 2.9 million, bearing floating interest rates, and the Group issued approximately HKD 32.3 million in unsecured, interest-free promissory notes in January 2025 for the acquisition of Shun Tat's equity - As of June 30, 2025, bank borrowings were approximately **HKD 2.9 million** (December 31, 2024: approximately HKD 1.4 million)[72](index=72&type=chunk) - In January 2025, the Group issued unsecured, interest-free promissory notes of approximately **HKD 32.3 million** for the acquisition of Shun Tat's equity[72](index=72&type=chunk) [Gearing Ratio](index=21&type=section&id=Gearing%20Ratio) As of June 30, 2025, the Group's gearing ratio significantly increased to 29.7% (December 31, 2024: 1.1%), primarily due to the issuance of promissory notes during the period - As of June 30, 2025, and December 31, 2024, the Group's gearing ratio was **29.7%** and **1.1%**, respectively[73](index=73&type=chunk) - The increase was due to the issuance of promissory notes during the six months ended June 30, 2025[73](index=73&type=chunk) [Net Debt to Equity Ratio](index=21&type=section&id=Net%20Debt%20to%20Equity%20Ratio) As of June 30, 2025, the net debt to equity ratio was approximately 22.1%, mainly due to the issuance of promissory notes during the period, compared to a net cash position recorded on December 31, 2024 - As of June 30, 2025, the net debt to equity ratio was approximately **22.1%**, due to the Group's issuance of promissory notes during the six months ended June 30, 2025[74](index=74&type=chunk) - As of December 31, 2024, a net cash position was recorded for the net debt to equity ratio[75](index=75&type=chunk) [Treasury Policy](index=22&type=section&id=Treasury%20Policy) The Group adopts a prudent financial management approach to its treasury policy, with the Board closely monitoring liquidity to ensure the capital structure of assets, liabilities, and other commitments can meet funding needs - The Group has adopted a prudent financial management approach to its treasury policy[76](index=76&type=chunk) - The Board closely monitors the Group's liquidity position to ensure that the liquidity structure of the Group's assets, liabilities, and other commitments can meet its funding needs at all times[76](index=76&type=chunk) [Capital Expenditure](index=22&type=section&id=Capital%20Expenditure) For the six months ended June 30, 2025, the Group's capital expenditure was approximately HKD 15,000, primarily for office equipment, a decrease from HKD 0.1 million in the prior year - For the six months ended June 30, 2025, the Group incurred capital expenditure of approximately **HKD 15,000** (2024: approximately HKD 0.1 million) for the acquisition of office equipment[77](index=77&type=chunk) [Contingent Liabilities](index=22&type=section&id=Contingent%20Liabilities) The Group faces multiple claims for personal injuries due to employee or subcontractor accidents in its ordinary course of business, but directors believe these are largely covered by insurance and will not materially adversely affect the Group's financial position or operations - The Group faces multiple claims for personal injuries suffered by employees or employees of the Group's subcontractors during the course of their employment[78](index=78&type=chunk) - The Directors believe that these claims are substantially covered by insurance and will not have a material adverse effect on the Group's financial position or results of operations[78](index=78&type=chunk) Performance Guarantees (HKD in thousands) | Item | 2025 June 30 | 2024 Dec 31 | | :--- | :----------- | :------------- | | Performance guarantees issued by insurance companies to guarantee completion of works | 6,613 | 6,613 | [Foreign Exchange Risk](index=22&type=section&id=Foreign%20Exchange%20Risk) The Group faces minimal foreign exchange risk as most business transactions, assets, and liabilities are denominated in Hong Kong Dollars, and no foreign exchange hedging was undertaken for the six months ended June 30, 2025 - As most of the Group's business transactions and assets and liabilities are denominated in Hong Kong Dollars, the Group faces minimal foreign exchange risk[80](index=80&type=chunk) - For the six months ended June 30, 2025, the Group did not undertake any foreign exchange hedging[80](index=80&type=chunk) [Subsequent Events](index=23&type=section&id=Subsequent%20Events) On August 6, 2025, the Company's wholly-owned subsidiary, Silver Peak Global Limited, conditionally agreed to acquire 100% equity of New Noble Construction Engineering Limited for HKD 35 million, to be settled by issuing shares and promissory notes - On August 6, 2025, Silver Peak Global Limited, a wholly-owned subsidiary of the Company, entered into a sale and purchase agreement with an independent third party to conditionally agree to acquire **100%** equity interest in New Noble Construction Engineering Limited[81](index=81&type=chunk) - The consideration is **HKD 35,000,000**, to be settled by the Company allotting and issuing **281,904,762** shares at an issue price of **HKD 0.0385** per share to the vendor and by the Company and the purchaser issuing promissory notes with a principal amount of **HKD 24,146,666.66**[81](index=81&type=chunk) [Material Investments, Acquisitions and Disposals](index=23&type=section&id=Material%20Investments,%20Acquisitions%20and%20Disposals) The Group completed the acquisition of Shun Tat in January 2025 for HKD 45.7 million, paid via shares and promissory notes, with no other material acquisitions or disposals of subsidiaries, associates, or joint ventures during the six months ended June 30, 2025 - In January 2025, the Company completed the acquisition of Shun Tat by issuing **234,920,635** consideration shares and promissory notes to the vendor[84](index=84&type=chunk) - The acquisition consideration was **HKD 45,700,000**, and Shun Tat is principally engaged in construction business[84](index=84&type=chunk) - There were no other material acquisitions or disposals of subsidiaries, associates, and joint ventures during the six months ended June 30, 2025[85](index=85&type=chunk) [Employees and Remuneration Policy](index=24&type=section&id=Employees%20and%20Remuneration%20Policy) As of June 30, 2025, the Group had 18 employees in Hong Kong, with remuneration packages including salaries and bonuses determined by qualifications, position, rank, and annual performance, while directors' remuneration is set by the Board based on committee recommendations and market data - As of June 30, 2025, the Group had **18** employees directly employed by the Group and located in Hong Kong[86](index=86&type=chunk) - The remuneration package offered by the Group to its employees includes salaries and bonuses, with employee remuneration considered based on their respective qualifications, positions, and ranks[86](index=86&type=chunk) - Directors' remuneration is determined by the Board based on the recommendations of the Company's Remuneration Committee, taking into account the Group's operating results, individual performance, and comparable market statistics[86](index=86&type=chunk) [Dividends](index=24&type=section&id=Dividends) The Board has resolved not to recommend the declaration of an interim dividend for the six months ended June 30, 2025, and 2024 - The Board has resolved not to recommend the declaration of an interim dividend for the six months ended June 30, 2025, and 2024[87](index=87&type=chunk) [Future Plans for Material Investments and Capital Assets](index=24&type=section&id=Future%20Plans%20for%20Material%20Investments%20and%20Capital%20Assets) As of June 30, 2025, the Group had no other future plans for material investments and capital assets - As of June 30, 2025, the Group had no other plans for material investments and capital assets[88](index=88&type=chunk) [Use of Proceeds](index=24&type=section&id=Use%20of%20Proceeds) The net proceeds from the IPO, approximately HKD 90.7 million, have been fully utilized as per the prospectus and subsequent announcements, primarily for upgrading construction equipment, meeting working capital needs, and strengthening manpower - The total amount of proceeds from the listing was **HKD 140 million**, and the net proceeds from the listing were approximately **HKD 90.7 million**[89](index=89&type=chunk) Use of Net Proceeds (HKD in ten thousands) | Purpose | Amount Utilized as of 2025 June 30 | Unutilized Net Proceeds | | :--- | :----------------------- | :----------------- | | Upgrading construction equipment and enhancing safety measures by providing metal scaffolding systems | – | – | | Meeting working capital needs and settling certain upfront costs and expenses | 83.2 | – | | Further strengthening our workforce | 7.5 | – | | **Total** | **90.7** | **–** | - The net proceeds have been used in a manner consistent with that stated in the prospectus and subsequent announcements[90](index=90&type=chunk) Corporate Governance and Other Information This section outlines the Group's corporate governance practices, including compliance with the Corporate Governance Code, the Model Code for Securities Transactions by Directors, and review of competitive interests, along with the audit committee's review of interim financial results and publication of the interim report [Corporate Governance](index=26&type=section&id=Corporate%20Governance) The Company has adopted the Corporate Governance Code, and despite Mr. Chan Leung holding both Chairman and CEO roles, the Board believes this structure, with high director independence and Mr. Chan's experience, enhances business strategy execution and operational efficiency without compromising power balance - The Company has adopted the Corporate Governance Code as set out in Appendix C1 to the Listing Rules[91](index=91&type=chunk) - Mr. Chan Leung holds both the positions of Chairman and Chief Executive Officer of the Company, which deviates from code provision C.2.1 of the Corporate Governance Code[91](index=91&type=chunk) - The Board believes that this structure will not impair the balance of power and authority between the Board and the Company's management, and is conducive to promoting the execution of the Group's business strategies and enhancing operational efficiency[91](index=91&type=chunk) [Standard Code for Securities Transactions](index=26&type=section&id=Standard%20Code%20for%20Securities%20Transactions) The Company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers, and all directors confirmed compliance for the six months ended June 30, 2025, after specific inquiries - The Company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix C3 to the Listing Rules[92](index=92&type=chunk) - All Directors have confirmed, following specific enquiry, that they have complied with the required standards set out in the Model Code for the six months ended June 30, 2025[92](index=92&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=26&type=section&id=Purchase,%20Sale%20or%20Redemption%20of%20the%20Company's%20Listed%20Securities) For the six months ended June 30, 2025, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities - 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[93](index=93&type=chunk) [Competing Interests](index=27&type=section&id=Competing%20Interests) The controlling shareholders have confirmed compliance with the non-competition undertaking, and independent non-executive directors have reviewed and confirmed no breach of the undertaking as of June 30, 2025, and up to the announcement date - The controlling shareholders entered into a non-competition undertaking with the Company as beneficiary on March 18, 2021[94](index=94&type=chunk) - Each of the controlling shareholders has confirmed that, for the six months ended June 30, 2025, and up to the date of this announcement, they have complied with the non-competition undertaking[94](index=94&type=chunk) - The independent non-executive Directors have reviewed the compliance of each controlling shareholder with the non-competition undertaking, and as far as the independent non-executive Directors have ascertained, the controlling shareholders have not breached the undertakings made in the non-competition undertaking[94](index=94&type=chunk) [Review of Interim Financial Results by Audit Committee](index=27&type=section&id=Review%20of%20Interim%20Financial%20Results%20by%20Audit%20Committee) The unaudited interim consolidated financial information and accounting information for the six months ended June 30, 2025, were reviewed by the Audit Committee, which deemed them compliant with applicable accounting standards, Listing Rules, and adequately disclosed - The unaudited interim consolidated financial information of the Group for the six months ended June 30, 2025, and the accounting information contained in this interim results announcement have been reviewed by the Company's Audit Committee[95](index=95&type=chunk) - The Audit Committee is of the opinion that the preparation of the accounting information complies with applicable accounting standards and requirements, as well as the Listing Rules, and has been adequately disclosed[95](index=95&type=chunk) [Publication of Interim Results and Interim Report](index=27&type=section&id=Publication%20of%20Interim%20Results%20and%20Interim%20Report) This interim results announcement has been published on the Company's and HKEX websites, and the interim report for the six months ended June 30, 2025, will be published in due course as required by the Listing Rules - This interim results announcement is published on the Company's website www.hongdau.com.hk and the Stock Exchange's website www.hkexnews.hk[96](index=96&type=chunk) - The Company's interim report for the six months ended June 30, 2025, will be published on the Stock Exchange's website and the Company's website in due course as required by the Listing Rules[96](index=96&type=chunk) [Acknowledgements](index=27&type=section&id=Acknowledgements) The Board extends its sincere gratitude to the Group's management and all staff for their tireless efforts and dedication, and to shareholders, business partners, and other professionals for their support during the period - The Board would like to express its sincere gratitude to the Group's management and all staff for their tireless efforts and dedicated contributions, as well as to shareholders, business partners, and other professionals for their support during the period[97](index=97&type=chunk)

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不負責，對其準確性或完整性亦不發表任 何聲明，並明確表示，概不對因本公告全部或任何部份內容而產生或因倚賴該等內容而引致的任何損失承擔任何責 任。 董事長致辭 尊敬的各位股東： 二零二五年上半年，面對嚴峻複雜的外部形勢和國際油價震蕩下行壓力，我們立足油氣主業根 基，以增儲上產築牢發展底氣，以科技創新激活增長動能，以綠色轉型拓寬發展空間，以提質 增效淬煉經營韌性，有效應對市場波動，為全年目標實現奠定堅實基礎。 我們持續推進增儲上產，油氣勘探成果豐碩。在中國海域獲得錦州27-6等5個油氣新發現，成功 評價秦皇島29-6等大中型含油氣構造，陸上非常規天然氣儲量穩步增長。圭亞那深水立體勘探 持續增儲，首次簽署哈薩克斯坦勘探新區塊石油合同，進一步拓展了海外勘探潛力。 CNOOC Limited （中國海洋石油有限公司） （根據公司條例在香港註冊成立的有限責任公司） （股票代號：00883（港幣櫃台）及80883（人民幣櫃台）） 二零二五年中期業績公告（未經審計） | 財務及業務摘要 | | | | --- | --- | --- | | | | 與二零二四年 ...

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文件的內容概不負責，對其準 確性或完整性亦不發表任何聲明，並明確表示，概不對因本文件全部或任何部分內容而產 生或因倚賴該等內容而引致的任何損失承擔任何責任。 (股份代號：247) 主席報告 本人謹向股東提交二零二四╱二零二五年度之年報。 業績 截至二零二五年六月三十日止之年度（「本財政年度」），在撇除投資物業公平值變動的影響 後，集團股東應佔基礎溢利為二十九億六千萬港元（二零二三╱二零二四：二十九億四千 三百萬港元）。每股基礎盈利為一點三八港元（二零二三╱二零二四：一點四一港元）。 計及為非現金項目的投資物業重估虧損（扣減遞延稅項）六億二千一百萬港元（（二零二三 ╱二零二四（：重估虧損三億二千七百萬港元），本財政年度集團股東應佔淨溢利二十三億三 千一百萬港元（二零二三╱二零二四（：二十五億零八百萬港元）（。本財政年度每股盈利為一 點零八港元（二零二三╱二零二四：一點二港元）。 末期股息 董事會建議派發本財政年度之末期股息每股四十三港仙。 末期股息將給予在二零二五年十月三十日名列於本公司股東名冊之股東。連同已於二零二 五年四月二十三日派發之中期息每股十五港仙， ...

Company Information [Board of Directors and Committees](index=3&type=section&id=%E8%91%A3%E4%BA%8B%E6%9C%83%E8%88%87%E5%A7%94%E5%93%A1%E6%9C%83) The company's Board of Directors comprises executive and independent non-executive directors, supported by audit, remuneration, nomination, sustainability, and executive committees to ensure robust corporate governance - Executive Directors include Mr. Li Shufu (Chairman), Mr. Li Donghui (Vice Chairman), Mr. Gui Sheng Yue (CEO), Mr. Gan Jiayue, and Mr. Mao Jianming[3](index=3&type=chunk) - Independent Non-Executive Directors include Ms. Gao Jie, Ms. Yu Liping, Mr. Zhu Hansong, and Ms. Zeng Jingyi[3](index=3&type=chunk) - The company has established Audit, Remuneration, Nomination, Sustainability, and Executive Committees, each with clearly defined membership and chairpersons[3](index=3&type=chunk) [Principal Banks and Offices](index=3&type=section&id=%E4%B8%BB%E8%A6%81%E5%BE%80%E4%BE%86%E9%8A%80%E8%A1%8C%E8%88%87%E8%BE%A6%E4%BA%8B%E8%99%95) The company maintains principal banking relationships in Hong Kong and mainland China, with its head office in Wan Chai, Hong Kong, a registered office in the Cayman Islands, and is listed on the Hong Kong Stock Exchange - Principal banks in Hong Kong include Australia and New Zealand Banking Group, Bank of America, Bank of China (Hong Kong), among others[3](index=3&type=chunk) - Principal banks in China include Bank of China, BNP Paribas (China), CITIC Bank, among others[4](index=4&type=chunk) - The company's stock codes are **175** (HKD counter) and **80175** (RMB counter), with its website at http://www.geelyauto.com.hk[4](index=4&type=chunk) Independent Review Report [Scope of Review and Conclusion](index=4&type=section&id=%E5%AF%A9%E9%96%B1%E7%AF%84%E5%9C%8D%E8%88%87%E7%B5%90%E8%AB%96) The auditor reviewed the interim financial report in accordance with Hong Kong Standard on Review Engagements 2410, finding no material matters and concluding it complies in all material respects with Hong Kong Accounting Standard 34 - The auditor has reviewed the interim financial report of Geely Automobile Holdings Limited and its subsidiaries for the six months ended June 30, 2025[6](index=6&type=chunk) - The scope of review is substantially less than an audit, thus no audit opinion is expressed[7](index=7&type=chunk) - The conclusion is that nothing has come to the auditor's attention that causes them to believe the interim financial report is not prepared, in all material respects, in accordance with Hong Kong Accounting Standard 34[8](index=8&type=chunk) Condensed Consolidated Financial Statements [Condensed Consolidated Statement of Profit or Loss](index=5&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E6%94%B6%E7%9B%8A%E8%A1%A8) For H1 2025, revenue grew 26.5% to RMB 150.3 billion, but profit for the period decreased 9.8% to RMB 9.45 billion, primarily due to increased taxation and non-controlling interests Key Data from Condensed Consolidated Statement of Profit or Loss | Metric | Six Months Ended June 30, 2025 (RMB thousands) | Six Months Ended June 30, 2024 (RMB thousands) | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 150,284,734 | 118,792,689 | 26.5 | | Cost of sales | (125,565,995) | (98,924,341) | 26.9 | | Gross profit | 24,718,739 | 19,868,348 | 24.4 | | Other income / (losses) – net | 4,761,654 | 870,986 | 446.7 | | Profit before tax | 11,286,164 | 10,972,450 | 2.9 | | Taxation | (1,834,796) | (496,188) | 269.8 | | Profit for the period | 9,451,368 | 10,476,262 | (9.8) | | Profit attributable to owners of the parent | 9,289,807 | 10,789,540 | (13.8) | | Basic earnings per share | RMB 92.18 cents | RMB 106.50 cents | (13.4) | - Other income / (losses) – net significantly increased by **446.7%**, primarily driven by net foreign exchange gains[10](index=10&type=chunk) - Taxation expenses significantly increased by **269.8%** year-on-year, contributing to the decrease in profit for the period[10](index=10&type=chunk) [Condensed Consolidated Statement of Comprehensive Income](index=6&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E5%85%A8%E9%9D%A2%E6%94%B6%E5%85%A5%E8%A1%A8) For the six months ended June 30, 2025, total comprehensive income slightly increased by 0.2% to RMB 10.58 billion, mainly due to a substantial increase in other comprehensive income, net of tax Key Data from Condensed Consolidated Statement of Comprehensive Income | Metric | Six Months Ended June 30, 2025 (RMB thousands) | Six Months Ended June 30, 2024 (RMB thousands) | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Profit for the period | 9,451,368 | 10,476,262 | (9.8) | | Other comprehensive income for the period, net of tax | 1,126,571 | 82,283 | 1269.2 | | Total comprehensive income for the period | 10,577,939 | 10,558,545 | 0.2 | | Total comprehensive income attributable to owners of the parent | 10,428,688 | 10,806,355 | (3.5) | | Total comprehensive income attributable to non-controlling interests | 149,251 | (247,810) | Not applicable | - Other comprehensive income for the period, net of tax, significantly increased by **1269.2%** from **RMB 82,283 thousand** in 2024 to **RMB 1,126,571 thousand** in 2025[11](index=11&type=chunk) - Total comprehensive income attributable to non-controlling interests shifted from a loss to a profit, indicating improved financial performance of non-controlling interests[11](index=11&type=chunk) [Condensed Consolidated Statement of Financial Position](index=7&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81%E8%A1%A8) As of June 30, 2025, total assets and equity increased, but net current liabilities expanded, indicating increased short-term liquidity pressure due to higher bank borrowings and bills payable Key Data from Condensed Consolidated Statement of Financial Position | Metric | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Non-current assets | 120,272,565 | 118,946,233 | 1.1 | | Current assets | 153,831,697 | 152,127,675 | 1.1 | | Current liabilities | (162,204,145) | (162,918,752) | (0.4) | | Net current (liabilities) / assets | (8,372,448) | (10,791,077) | (22.4) | | Total equity | 92,098,272 | 93,991,252 | (2.0) | | Non-current liabilities | (19,801,845) | (14,163,904) | 39.8 | | Bank borrowings (current) | 9,129,273 | 1,358,276 | 572.1 | | Bank borrowings (non-current) | 7,278,450 | 2,736,593 | 165.2 | | Bills payable | 27,988,002 | 26,912,330 | 4.0 | - Net current liabilities narrowed by **22.4%** from **RMB (10,791,077) thousand** as of December 31, 2024, to **RMB (8,372,448) thousand** as of June 30, 2025[12](index=12&type=chunk) - Current bank borrowings significantly increased by **572.1%**, and non-current bank borrowings grew by **165.2%**, indicating increased financing activities by the company[12](index=12&type=chunk)[13](index=13&type=chunk) [Condensed Consolidated Statement of Changes in Equity](index=9&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E6%AC%8A%E7%9B%8A%E8%AE%8A%E5%8B%95%E8%A1%A8) For the six months ended June 30, 2025, total equity attributable to owners of the parent slightly increased, but non-controlling interests significantly decreased due to the acquisition of jointly controlled entities and additional Zeekr interests Key Data from Condensed Consolidated Statement of Changes in Equity | Metric | Six Months Ended June 30, 2025 (RMB thousands) | Six Months Ended June 30, 2024 (RMB thousands) | | :--- | :--- | :--- | | Total equity attributable to owners of the parent (end of period) | 89,619,548 | 91,819,603 | | Non-controlling interests (end of period) | 2,478,724 | 8,847,635 | | Profit for the period (attributable to owners of the parent) | 9,289,807 | 10,789,540 | | Total comprehensive income for the period (attributable to owners of the parent) | 10,428,688 | 10,806,355 | | Acquisition of subsidiaries under common control | (4,991,623) | (232,994) | | Acquisition of additional interests in Zeekr from non-controlling interests | (7,665) | – | - Non-controlling interests significantly decreased from **RMB 8,847,635 thousand** as of June 30, 2024, to **RMB 2,478,724 thousand** as of June 30, 2025, primarily due to the acquisition of subsidiaries under common control and additional interests in Zeekr from non-controlling interests[14](index=14&type=chunk)[15](index=15&type=chunk) - Profit for the period attributable to owners of the parent decreased by **13.8%** year-on-year, while total comprehensive income attributable to owners of the parent only decreased by **3.5%**, indicating a positive contribution from other comprehensive income to equity[14](index=14&type=chunk)[15](index=15&type=chunk) [Condensed Consolidated Statement of Cash Flows](index=11&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E7%8F%BE%E9%87%91%E6%B5%81%E9%87%8F%E8%A1%A8) For the six months ended June 30, 2025, net cash from operating activities decreased, but net cash from financing activities significantly turned positive, leading to a substantial increase in net cash and cash equivalents Key Data from Condensed Consolidated Statement of Cash Flows | Metric | Six Months Ended June 30, 2025 (RMB thousands) | Six Months Ended June 30, 2024 (RMB thousands) | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Net cash from operating activities | 15,034,476 | 18,955,422 | (20.7) | | Net cash used in investing activities | (15,194,366) | (13,359,215) | 13.7 | | Net cash from / (used in) financing activities | 10,254,249 | (1,214,693) | Not applicable | | Net increase in cash and cash equivalents | 10,094,359 | 4,381,514 | 130.4 | | Cash and cash equivalents at end of period | 53,192,123 | 46,921,827 | 13.4 | - Net cash from financing activities shifted from a net outflow of **RMB 1,214,693 thousand** in the same period of 2024 to a net inflow of **RMB 10,254,249 thousand** in the same period of 2025, primarily due to a significant increase in proceeds from bank borrowings[16](index=16&type=chunk) - Cash and cash equivalents at the end of the period increased by **13.4%** to **RMB 53,192,123 thousand**, indicating ample cash reserves for the company[16](index=16&type=chunk) Notes to the Unaudited Interim Financial Report [Basis of Preparation and Changes in Accounting Policies (Note 1)](index=12&type=section&id=%E7%B7%A8%E8%A3%BD%E5%9F%BA%E6%BA%96%E5%8F%8A%E6%9C%83%E8%A8%88%E6%94%BF%E7%AD%96%E8%AE%8A%E6%9B%B4) Effective January 1, 2025, the company changed its accounting policy for business combinations under common control to merger accounting (pooling of interests method), replacing the acquisition method, with retrospective restatement of comparative figures to enhance financial reporting transparency and reflect the substance of internal reorganizations - Effective January 1, 2025, the company adopted merger accounting (pooling of interests method) for business combinations under common control, replacing the previous acquisition method[20](index=20&type=chunk) - This change aims to enhance financial reporting transparency, avoid artificial gains or goodwill, present more accurate operating performance, and align with international practices (e.g., Zeekr's adoption of US GAAP)[22](index=22&type=chunk)[24](index=24&type=chunk) - The change has been applied retrospectively to all business combinations under common control, with comparative figures for January 1, 2024, December 31, 2024, and the six months ended June 30, 2024, restated[23](index=23&type=chunk)[29](index=29&type=chunk) Impact of Accounting Policy Change on Statement of Profit or Loss for the Six Months Ended June 30, 2024 | Metric | Original Amount (RMB thousands) | Merger Adjustment (RMB thousands) | Restated Amount (RMB thousands) | | :--- | :--- | :--- | :--- | | Revenue | 107,305,450 | 11,487,239 | 118,792,689 | | Profit before tax | 10,939,917 | 32,533 | 10,972,450 | | Profit for the period | 10,383,610 | 92,652 | 10,476,262 | | Profit attributable to owners of the parent | 10,597,868 | 191,672 | 10,789,540 | | Basic earnings per share | RMB 104.59 cents | Increased by RMB 1.91 cents | RMB 106.50 cents | [Adoption of New and Revised HKFRSs (Note 2)](index=22&type=section&id=%E6%8E%A1%E7%B4%8D%E6%96%B0%E8%A8%82%E5%8F%8A%E7%B6%93%E4%BF%AE%E8%A8%82%E9%A6%99%E6%B8%AF%E8%B2%A1%E5%8B%99%E5%A0%B1%E5%91%8A%E6%BA%96%E5%89%87%E6%9C%83%E8%A8%88%E6%BA%96%E5%89%87) The company adopted HKAS 21 (Amendment) 'Lack of Exchangeability' effective January 1, 2025, with no significant impact anticipated on the condensed consolidated financial statements, and is evaluating other new and revised standards issued but not yet effective - HKAS 21 (Amendment) 'Lack of Exchangeability', effective January 1, 2025, has been adopted and is not expected to have a significant impact on the condensed consolidated financial statements[37](index=37&type=chunk)[38](index=38&type=chunk) - Several new and revised HKFRSs have been issued but are not yet effective, covering areas such as financial instrument classification and measurement, and financial statement presentation and disclosure[39](index=39&type=chunk)[40](index=40&type=chunk) - The directors anticipate that all issued standards will be incorporated into accounting policies in the first reporting period commencing on or after their effective dates, with preliminary assessment indicating no significant impact on the condensed consolidated financial statements[40](index=40&type=chunk) [Revenue and Segment Information (Note 3)](index=23&type=section&id=%E6%94%B6%E7%9B%8A%E5%8F%8A%E5%88%86%E9%A1%9E%E8%B3%87%E6%96%99) For the six months ended June 30, 2025, the company's total revenue reached RMB 150.3 billion, a 26.5% year-on-year increase, primarily from vehicle sales and related services, with performance reviewed on a single business segment basis and no single customer contributing over 10% of revenue - Revenue primarily refers to sales of automobiles, auto parts, battery packs and related components, provision of contract manufacturing services, research and development and related technical support services, and licensing of intellectual property, net of value-added tax or related sales taxes and discounts[41](index=41&type=chunk) Revenue by Major Products/Services | Major Products/Services | Six Months Ended June 30, 2025 (RMB thousands) | Six Months Ended June 30, 2024 (RMB thousands) | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Sales of automobiles and related services | 134,598,803 | 104,799,710 | 28.4 | | Sales of auto parts | 5,625,903 | 4,856,112 | 15.8 | | Sales of battery packs and related components | 3,581,710 | 4,345,662 | (17.6) | | Contract manufacturing income | 3,392,063 | 1,745,644 | 94.3 | | R&D and related technical support services | 2,420,750 | 2,951,236 | (18.0) | | Licensing of intellectual property | 665,505 | 94,325 | 605.5 | | **Total Revenue** | **150,284,734** | **118,792,689** | **26.5** | - The company reviews the Group's performance on a single business segment basis, with all business operations related to automobiles and related services, sharing similar economic characteristics[43](index=43&type=chunk)[44](index=44&type=chunk) - For the six months ended June 30, 2025, and 2024, no individual customer contributed more than **10%** of the Group's revenue[45](index=45&type=chunk) [Other Income / (Losses) – Net (Note 4)](index=25&type=section&id=%E5%85%B6%E4%BB%96%E6%94%B6%E7%9B%8A%E2%88%95%EF%BC%88%E虧%E6%90%8D%EF%BC%89%E6%B7%A8%E9%A1%8D) For the six months ended June 30, 2025, the company's other income – net significantly increased by 446.7% to RMB 4.76 billion, primarily driven by substantial net foreign exchange gains Details of Other Income / (Losses) – Net | Item | Six Months Ended June 30, 2025 (RMB thousands) | Six Months Ended June 30, 2024 (RMB thousands) | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Net foreign exchange gains / (losses) | 3,633,837 | (54,700) | Not applicable | | Net realised and unrealised losses on derivative financial instruments | (188,745) | (426,035) | (55.7) | | Government grants and subsidies | 693,289 | 545,680 | 27.0 | | Gain on deemed disposal / disposal of investments accounted for using the equity method | 2,130 | 172,086 | (98.8) | | **Total** | **4,761,654** | **870,986** | **446.7** | - Net foreign exchange gains shifted from a loss of **RMB 54,700 thousand** in the same period of 2024 to a gain of **RMB 3,633,837 thousand** in the same period of 2025, being the primary driver for the significant increase in other income – net[46](index=46&type=chunk) - Government grants and subsidies increased by **27.0%** year-on-year, mainly related to cash subsidies received from the government for operating activities[46](index=46&type=chunk) [Profit Before Tax (Note 5)](index=26&type=section&id=%E7%A8%85%E5%89%8D%E6%BA%A2%E5%88%A9) For the six months ended June 30, 2025, the company's profit before tax was impacted by changes in finance costs, staff costs, and R&D expenses, with net finance income turning into an expense, a slight increase in total staff costs, and a significant rise in total R&D costs Key Deductions / (Additions) to Profit Before Tax | Item | Six Months Ended June 30, 2025 (RMB thousands) | Six Months Ended June 30, 2024 (RMB thousands) | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Finance costs | 383,446 | 556,472 | (31.0) | | Finance income | (418,151) | (773,997) | (46.0) | | Net finance income | (34,705) | (217,525) | (84.0) | | Total staff costs | 10,824,523 | 10,740,683 | 0.8 | | Total R&D costs | 7,327,668 | 6,040,319 | 21.3 | | Total depreciation | 2,735,343 | 2,831,407 | (3.4) | | Total impairment losses on non-financial assets | 4,736 | 253,569 | (98.1) | - Net finance income significantly decreased by **84.0%** from a gain of **RMB 217,525 thousand** in the same period of 2024 to a gain of **RMB 34,705 thousand** in the same period of 2025[47](index=47&type=chunk) - Total R&D costs increased by **21.3%** year-on-year to **RMB 7,327,668 thousand**, indicating continuous increase in the company's R&D investments[48](index=48&type=chunk) - Total impairment losses on non-financial assets significantly decreased by **98.1%** from **RMB 253,569 thousand** in the same period of 2024 to **RMB 4,736 thousand**[48](index=48&type=chunk) [Taxation (Note 6)](index=28&type=section&id=%E7%A8%85%E9%A0%85) For the six months ended June 30, 2025, the company's taxation expenses significantly increased by 269.8% to RMB 1.83 billion, primarily due to higher China corporate income tax and changes in deferred tax Taxation Details | Item | Six Months Ended June 30, 2025 (RMB thousands) | Six Months Ended June 30, 2024 (RMB thousands) | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Current tax: China corporate income tax | 2,061,466 | 1,478,187 | 39.5 | | Current tax: Under-provision in prior years | 396,935 | 228,529 | 73.7 | | Deferred tax | (623,605) | (1,210,528) | (48.5) | | **Total Taxation** | **1,834,796** | **496,188** | **269.8** | - China corporate income tax increased by **39.5%** year-on-year, and under-provision in prior years grew by **73.7%**, leading to a significant increase in total current tax[50](index=50&type=chunk) - Deferred tax decreased by **48.5%** from **RMB (1,210,528) thousand** in the same period of 2024 to **RMB (623,605) thousand** in the same period of 2025[50](index=50&type=chunk) - Certain PRC subsidiaries enjoy a preferential income tax rate of **15%** due to their high-tech enterprise status or engagement in encouraged industries[51](index=51&type=chunk) [Dividends (Note 7)](index=29&type=section&id=%E8%82%A1%E6%81%AF) The company declared and approved a 2024 final dividend of RMB 3.119 billion in the first half of 2025, and a dividend of RMB 1.051 billion to non-controlling interests, while distributions on perpetual capital securities ceased and special dividends were completed - A 2024 final dividend of **HKD 0.33** per ordinary share, totaling approximately **RMB 3,119,413,000**, was approved by shareholders and paid in July 2025[54](index=54&type=chunk) - For the six months ended June 30, 2025, a subsidiary declared dividends of approximately **RMB 1,050,924,000** to non-controlling interests[55](index=55&type=chunk) - No distributions on perpetual capital securities were made for the six months ended June 30, 2025, as all issued perpetual capital securities were early redeemed in December 2024[56](index=56&type=chunk) - In May 2024, the company declared a special dividend of approximately **HKD 75,208,000** (approximately **RMB 69,853,000**) in connection with the Zeekr offering, which was approved by shareholders in June 2024[57](index=57&type=chunk) [Earnings Per Share (Note 8)](index=30&type=section&id=%E6%AF%8F%E8%82%A1%E7%9B%88%E5%88%A9) For the six months ended June 30, 2025, basic earnings per share were RMB 92.18 cents and diluted earnings per share were RMB 90.31 cents, both lower than the prior year period Earnings Per Share Data | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 (Restated) | | :--- | :--- | :--- | | Profit attributable to ordinary equity holders of the Company (RMB thousands) | 9,289,807 | 10,717,138 | | Weighted average number of ordinary shares (basic) | 10,078,016,592 | 10,063,382,383 | | Basic earnings per share | RMB 92.18 cents | RMB 106.50 cents | | Weighted average number of ordinary shares (diluted) | 10,286,554,066 | 10,132,799,383 | | Diluted earnings per share | RMB 90.31 cents | RMB 105.77 cents | - Basic earnings per share decreased by **13.4%** year-on-year, and diluted earnings per share decreased by **14.6%** year-on-year[58](index=58&type=chunk)[59](index=59&type=chunk) - The dilutive effect primarily stems from the company's share option scheme and share award scheme[60](index=60&type=chunk) [Property, Plant and Equipment (Note 9)](index=31&type=section&id=%E7%89%A9%E6%A5%AD%E3%80%81%E5%BB%A0%E6%88%BF%E5%8F%8A%E8%A8%AD%E5%82%99) As of June 30, 2025, the net book value of property, plant and equipment slightly decreased to RMB 34.61 billion, with additions of RMB 2.58 billion during the period, offset by depreciation and disposals/write-offs Changes in Property, Plant and Equipment | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Net book value at beginning of period / year | 34,851,282 | 41,150,682 | | Additions | 2,579,745 | 5,076,540 | | Disposals / write-offs | (201,115) | (2,801,752) | | Depreciation | (2,682,215) | (5,931,201) | | Impairment losses | (3,479) | (785,915) | | Exchange adjustments | 439,311 | (221,936) | | Net book value at end of period / year | 34,614,510 | 34,851,282 | - Additions to property, plant and equipment during the period amounted to **RMB 2,579,745 thousand**, primarily for expanding the new energy product matrix and continuously advancing R&D in new energy and intelligent technologies[61](index=61&type=chunk)[176](index=176&type=chunk) - Total additions to right-of-use assets amounted to **RMB 1,306,280,000**, primarily related to leasehold rights for offices, factory properties, retail and service centers, vessels, and automobiles[62](index=62&type=chunk) [Intangible Assets (Note 10)](index=32&type=section&id=%E7%84%A1%E5%BD%A2%E8%B3%87%E7%94%A2) As of June 30, 2025, the net book value of intangible assets increased to RMB 35.82 billion, with additions of RMB 5.43 billion during the period, primarily related to the development of new energy intelligent vehicle models Changes in Intangible Assets | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Net book value at beginning of period / year | 35,625,297 | 30,836,311 | | Additions | 5,432,216 | 13,817,161 | | Amortisation | (4,567,846) | (7,714,560) | | Reclassified as assets held for sale | (665,951) | (273,950) | | Net book value at end of period / year | 35,821,927 | 35,625,297 | - Additions to intangible assets during the period amounted to **RMB 5,432,216 thousand**, primarily related to the development of new energy intelligent vehicle models[63](index=63&type=chunk)[200](index=200&type=chunk) - Amortisation of intangible assets amounted to **RMB 4,567,846 thousand**, reflecting the amortisation of capitalised product R&D costs[63](index=63&type=chunk) [Interests in Associates (Note 11)](index=32&type=section&id=%E6%96%BC%E8%81%AF%E7%87%9F%E5%85%AC%E5%8F%B8%E7%9A%84%E6%AC%8A%E7%9B%8A) As of June 30, 2025, the company's interests in associates increased to RMB 7.056 billion, mainly due to its share of post-acquisition results and other comprehensive income, with an increased stake in Xingqu Technology during the period Changes in Interests in Associates | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Cost of unlisted investments | 4,000,772 | 3,580,772 | | Share of post-acquisition results and other comprehensive income | 1,309,223 | 524,419 | | Bargain purchase gain on subscription of an associate | 1,749,734 | 1,749,734 | | **Total** | **7,056,380** | **5,851,576** | - The company increased its equity interest in Xingqu Technology by **17.5%** for a cash consideration of **RMB 420,000,000**, raising its stake to **41.65%**, with Xingqu Technology remaining an associate[66](index=66&type=chunk) - Proton Group achieved revenue of **RMB 7.989 billion** and profit for the period of **RMB 307 million** in the first half of 2025, with the company's share of its profit being **RMB 128 million**[67](index=67&type=chunk)[219](index=219&type=chunk) - Renault Korea achieved revenue of **RMB 9.577 billion** in the first half of 2025, but incurred a loss for the period of **RMB 19.04 million**, with the company's share of its loss being **RMB 6 million**[67](index=67&type=chunk)[219](index=219&type=chunk) [Interests in Joint Ventures (Note 12)](index=37&type=section&id=%E6%96%BC%E5%90%88%E7%87%9F%E5%85%AC%E5%8F%B8%E7%9A%84%E6%AC%8A%E7%9B%8A) As of June 30, 2025, the company's interests in joint ventures increased to RMB 24.42 billion, with the company selling a 41.5% stake in Geely Xindawang during the period and jointly holding Hao Si Power with Renault and Aramco Asia Singapore Changes in Interests in Joint Ventures | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Cost of unlisted investments | 19,688,967 | 19,730,467 | | Share of post-acquisition results and other comprehensive income | 4,730,768 | 3,214,305 | | **Total** | **24,419,735** | **22,944,772** | - The company disposed of a **41.5%** equity interest in Geely Xindawang for a cash consideration of **RMB 49,800,000**, recognizing a gain of **RMB 2,130,000**[73](index=73&type=chunk) - Hao Si Power Group achieved revenue of **RMB 47.113 billion** and net profit of **RMB 966 million** in the first half of 2025, with the company holding a **29.7%** equity interest[76](index=76&type=chunk)[77](index=77&type=chunk)[215](index=215&type=chunk) - Geely Auto Finance achieved net profit of **RMB 417 million** in the first half of 2025, a **38%** year-on-year decrease, with the company holding a **75%** equity interest[77](index=77&type=chunk)[214](index=214&type=chunk) [Inventories (Note 13)](index=42&type=section&id=%E5%AD%98%E8%B2%A8) As of June 30, 2025, the company's total inventories amounted to RMB 26.90 billion, a 8.4% decrease from year-end 2024, primarily due to reductions in finished goods and raw materials Inventories Details | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Raw materials | 2,955,000 | 3,210,736 | (8.0) | | Work in progress | 306,599 | 474,267 | (35.4) | | Finished goods | 23,965,674 | 26,118,626 | (8.3) | | Provision for inventories | (330,429) | (444,509) | (25.7) | | **Total** | **26,896,844** | **29,359,120** | **(8.4)** | - Finished goods inventories decreased by **8.3%**, and raw materials inventories decreased by **8.0%**, reflecting changes in inventory management or sales performance[79](index=79&type=chunk) - Provision for inventories decreased by **25.7%**, indicating a reduction in inventory impairment risk[79](index=79&type=chunk) [Trade Receivables (Note 14)](index=43&type=section&id=%E8%B2%BF%E6%98%93%E6%87%89%E6%94%B6%E6%AC%BE%E9%A0%85) As of June 30, 2025, the company's total trade receivables were RMB 18.75 billion, a slight decrease from year-end 2024, with improved aging structure for Chinese customers and increased receivables from overseas customers Trade Receivables Details | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Third parties | 6,464,430 | 4,726,468 | 36.8 | | Joint ventures | 68,373 | 66,288 | 3.2 | | Associates | 1,639,464 | 1,452,905 | 12.8 | | Related companies controlled by the Company's major shareholder | 10,574,461 | 12,938,089 | (18.2) | | **Total** | **18,746,728** | **19,183,750** | **(2.3)** | - For trade receivables from PRC customers, the proportion of 0 to 60 days aging increased from **68.5%** at December 31, 2024, to **86.2%** at June 30, 2025, indicating faster collection speed[81](index=81&type=chunk) - Trade receivables from overseas customers increased by **29.9%** from **RMB 4,832,816 thousand** at December 31, 2024, to **RMB 6,283,411 thousand** at June 30, 2025[82](index=82&type=chunk) - The average expected loss rate for trade receivables ranged from **0.5% to 2.6%**, lower than **0.8% to 2.8%** at December 31, 2024[82](index=82&type=chunk) [Bills Receivable (Note 15)](index=44&type=section&id=%E6%87%89%E6%94%B6%E7%A5%A8%E6%93%9A) As of June 30, 2025, the company's total bills receivable amounted to RMB 32.07 billion, a 22.4% decrease from year-end 2024, with all bills denominated in RMB and guaranteed by banks Bills Receivable Data | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Bills receivable | 32,066,348 | 41,344,803 | (22.4) | - All bills receivable are denominated in RMB, guaranteed by reputable banks in the PRC, and mature within one year from the end of the reporting period[84](index=84&type=chunk) - The company endorsed certain bank-accepted bills receivable to suppliers to settle trade payables, with **RMB 1,682,259 thousand** in endorsed bills and **RMB 82,621,908 thousand** in derecognized bills[85](index=85&type=chunk)[86](index=86&type=chunk) [Deposits, Prepayments and Other Receivables (Note 16)](index=46&type=section&id=%E6%8C%89%E9%87%91%E3%80%81%E9%A0%90%E4%BB%98%E6%AC%BE%E9%A0%85%E5%8F%8A%E5%85%B6%E4%BB%96%E6%87%89%E6%94%B6%E6%AC%BE%E9%A0%85) As of June 30, 2025, the company's total deposits, prepayments, and other receivables amounted to RMB 19.13 billion, a slight decrease from year-end 2024, with reductions in prepayments to suppliers and receivables from related companies Details of Deposits, Prepayments and Other Receivables | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Prepayments to suppliers | 4,301,404 | 4,343,893 | (1.0) | | Loans to joint ventures | 3,808,818 | 3,632,019 | 4.9 | | VAT and other tax receivables | 6,454,045 | 7,056,957 | (8.6) | | Amounts due from related companies controlled by the Company's major shareholder | 25,293 | 821,975 | (96.9) | | **Total** | **19,130,834** | **20,206,818** | **(5.4)** | - Amounts due from related companies controlled by the Company's major shareholder significantly decreased by **96.9%** from **RMB 821,975 thousand** to **RMB 25,293 thousand**[87](index=87&type=chunk) - Total advances to a joint venture (Hao Si Power) amounted to **RMB 2,000,000,000**, of which **RMB 1,500,000,000** are entrusted loans bearing interest at annual rates ranging from **3.6% to 4.65%**, expected to be settled within one year[89](index=89&type=chunk) [Trade Payables (Note 17)](index=47&type=section&id=%E8%B2%BF%E6%98%93%E6%87%89%E4%BB%98%E6%AC%BE%E9%A0%85) As of June 30, 2025, the company's total trade payables amounted to RMB 77.07 billion, a 10.7% decrease from year-end 2024, with an improved aging structure and a higher proportion of 0-60 day payables Trade Payables Details | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Third parties | 53,984,348 | 59,951,895 | (10.0) | | Joint ventures | 3,998,866 | 1,340,236 | 198.4 | | Associates | 1,071,825 | 2,915,882 | (63.2) | | Related companies controlled by the Company's major shareholder | 18,017,691 | 22,065,101 | (18.4) | | **Total** | **77,072,730** | **86,273,114** | **(10.7)** | - For trade payables, the proportion of 0 to 60 days aging decreased from **90.7%** at December 31, 2024, to **87.5%** at June 30, 2025, while the proportion of 61-90 days aging increased[92](index=92&type=chunk) - Trade payables to joint ventures significantly increased by **198.4%**, while payables to associates and related companies decreased[91](index=91&type=chunk) [Bills Payable (Note 18)](index=48&type=section&id=%E6%87%89%E4%BB%98%E7%A5%A8%E6%93%9A) As of June 30, 2025, the company's total bills payable amounted to RMB 27.99 billion, a 4.0% increase from year-end 2024, with all bills denominated in RMB and maturing within six months Bills Payable Data | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Bills payable | 27,988,002 | 26,912,330 | 4.0 | - All bills payable are denominated in RMB and represent amounts paid and/or payable to third parties for the settlement of trade payables[93](index=93&type=chunk) - As of June 30, 2025, letters of credit were issued by banks and bore interest for the Group, thus the balance was classified as bank borrowings[93](index=93&type=chunk) [Other Payables and Accruals (Note 19)](index=49&type=section&id=%E5%85%B6%E4%BB%96%E6%87%89%E4%BB%98%E6%AC%BE%E9%A0%85%E5%8F%8A%E6%87%89%E8%A8%88%E8%B2%BB%E7%94%A8) As of June 30, 2025, the company's total other payables and accruals amounted to RMB 51.00 billion, a slight decrease from year-end 2024, with reductions in customer prepayments and related company payables, but a significant increase in dividends payable Details of Other Payables and Accruals | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Customer prepayments | 23,528,221 | 26,490,726 | (11.2) | | Payables for capitalised product R&D costs | 1,947,615 | 2,610,793 | (25.4) | | Dividends payable | 3,038,832 | – | Not applicable | | Dividends payable to non-controlling interests | 1,050,924 | – | Not applicable | | Amounts due to related companies controlled by the Company's major shareholder | 38,817 | 401,733 | (90.3) | | **Total** | **50,995,124** | **51,189,881** | **(0.4)** | - Customer prepayments decreased by **11.2%**, mainly due to reduced prepayments for sales of automobiles, auto parts, and battery packs and related components[97](index=97&type=chunk) - Dividends payable and dividends payable to non-controlling interests significantly increased, reflecting dividend declarations during the period[95](index=95&type=chunk) - Amounts due to related companies controlled by the Company's major shareholder significantly decreased by **90.3%**[95](index=95&type=chunk) [Lease Liabilities (Note 20)](index=51&type=section&id=%E7%A7%9F%E8%B3%83%E8%B2%A0%E5%82%B5) As of June 30, 2025, the company's total lease liabilities amounted to RMB 4.20 billion, a 21.0% increase from year-end 2024, with new leases of RMB 1.31 billion during the period, partially offset by payments Changes in Lease Liabilities | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Beginning of period / year | 3,469,955 | 3,129,156 | | Additions to leases | 1,306,280 | 1,295,467 | | Payments | (720,286) | (1,121,210) | | **End of period / year** | **4,199,235** | **3,469,955** | - Additions to lease liabilities amounted to **RMB 1,306,280 thousand**, reflecting increased leasing activities by the company[103](index=103&type=chunk) - Current lease liabilities were **RMB 1,043,975 thousand**, and non-current lease liabilities were **RMB 3,155,260 thousand**[103](index=103&type=chunk) [Bank Borrowings (Note 21)](index=52&type=section&id=%E9%8A%80%E8%A1%8C%E5%80%9F%E6%AC%BE) As of June 30, 2025, the company's total bank borrowings amounted to RMB 16.41 billion, a substantial 300.7% increase from year-end 2024, including new unsecured borrowings of RMB 9.44 billion, factoring loans, payables financing arrangements, and letters of credit Bank Borrowings Details | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Bank loans | 12,847,723 | 4,094,869 | 213.7 | | Other bank borrowings | 3,560,000 | – | Not applicable | | **Total** | **16,407,723** | **4,094,869** | **300.7** | | Current | 9,129,273 | 1,358,276 | 572.1 | | Non-current | 7,278,450 | 2,736,593 | 165.2 | - The company obtained new unsecured borrowings totaling **RMB 9,442,704,000**, with annual interest rates ranging from **2.2% to 5.61%**[106](index=106&type=chunk) - New factoring loans of **RMB 560,000 thousand** were obtained, secured by trade receivables[107](index=107&type=chunk)[109](index=109&type=chunk) - New payables financing arrangements of **RMB 700,000 thousand** were entered into, with interest rates ranging from **1.58% to 2.08%**[109](index=109&type=chunk) - New letters of credit totaling **RMB 1,300,000 thousand** were issued, with interest rates ranging from **1.32% to 2%**[112](index=112&type=chunk) [Bonds Payable (Note 22)](index=54&type=section&id=%E6%87%89%E4%BB%98%E5%82%B5%E5%88%B8) As of June 30, 2025, the company's total bonds payable amounted to RMB 3.5 billion, consistent with year-end 2024, with RMB 2 billion in medium-term notes issued during the period to supplement the working capital of Geely Auto Changes in Bonds Payable | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Book value at beginning of period / year | 3,500,000 | 1,500,000 | | Issuance | – | 2,000,000 | | **Book value at end of period / year** | **3,500,000** | **3,500,000** | - The company issued **RMB 1.5 billion** and **RMB 2 billion** medium-term notes on August 17, 2023, and August 1, 2024, respectively, with annual interest rates of **3.25%** and **2.18%**[113](index=113&type=chunk) - Proceeds from the issuance of medium-term notes will be used to supplement the working capital of Geely Auto, an indirect non-wholly owned subsidiary of the company[113](index=113&type=chunk) [Share Capital (Note 23)](index=55&type=section&id=%E8%82%A1%E6%9C%AC) As of June 30, 2025, the company's issued and fully paid share capital increased to RMB 18.42 billion, primarily due to the issuance of shares under the share option scheme Changes in Share Capital | Item | Number of Shares | Par Value (RMB thousands) | | :--- | :--- | :--- | | Issued and fully paid share capital at December 31, 2024, and January 1, 2025 | 10,075,001,783 | 184,020 | | Shares issued under share option scheme | 9,120,750 | 172 | | **Issued and fully paid share capital at June 30, 2025** | **10,084,122,533** | **184,192** | - The authorized share capital consists of **18,000,000,000** shares with a par value of **RMB 357,864 thousand**[116](index=116&type=chunk) - During the period, **9,120,750** ordinary shares were issued under the share option scheme, resulting in an increase in share capital of **RMB 172 thousand**[116](index=116&type=chunk) [Commitments (Note 24)](index=56&type=section&id=%E6%89%BF%E6%93%94) As of June 30, 2025, the company's total capital commitments amounted to RMB 7.12 billion, a significant increase from year-end 2024, primarily for the purchase of property, plant and equipment and investments in joint ventures Capital Commitments Details | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Purchase of property, plant and equipment | 774,656 | 1,299,207 | (40.4) | | Investment in an associate | 244,510 | 244,510 | 0.0 | | Investment in joint ventures | 6,103,566 | 686,125 | 790.9 | | **Total** | **7,122,732** | **2,229,842** | **219.4** | - Commitments for investments in joint ventures significantly increased by **790.9%**, primarily including a committed capital contribution of **RMB 1.5 billion** for the establishment of the joint venture Chongqing Qianli Zhijia Technology Co., Ltd.[117](index=117&type=chunk)[118](index=118&type=chunk)[160](index=160&type=chunk) - Total lease commitments for short-term leases amounted to **RMB 195,443 thousand**, primarily for plant and machinery leases[119](index=119&type=chunk) - As a lessor, total future minimum lease receivables amounted to **RMB 141,417 thousand**, primarily from plant and machinery[120](index=120&type=chunk) [Retirement Benefit Schemes (Note 25)](index=58&type=section&id=%E9%80%80%E4%BC%91%E7%A6%8F%E5%88%A9%E8%A8%88%E5%8A%83) The company participates in Hong Kong's MPF scheme and China's government-managed retirement benefit schemes, and provides defined contribution retirement funds for overseas subsidiaries, with total employer contributions of RMB 1.18 billion for the six months ended June 30, 2025, a 21.1% year-on-year increase - The company participates in Hong Kong's Mandatory Provident Fund Scheme, where employers are required to contribute **5%** of employees' relevant income, capped at **HKD 30,000** per month[121](index=121&type=chunk) - Employees of PRC subsidiaries participate in state-managed retirement benefit schemes, with the company contributing a fixed percentage of employees' basic salaries[121](index=121&type=chunk) - For the six months ended June 30, 2025, total employer contributions amounted to **RMB 1,180,063,000**, an increase of **21.1%** from **RMB 974,262,000** in the same period of 2024[122](index=122&type=chunk) [Equity-Settled Share-Based Payment Transactions (Note 26)](index=58&type=section&id=%E4%BB%A5%E6%AC%8A%E7%9B%8A%E7%B5%90%E7%AE%97%E8%82%A1%E4%BB%BD%E7%82%BA%E5%9F%BA%E7%A4%8E%E4%B9%8B%E4%BB%98%E6%AC%BE%E4%BA%A4%E6%98%93) The company operates share option and share award schemes, and Zeekr also has a share award scheme; as of June 30, 2025, 1.05 billion share options and 32.91 million award shares remain unexercised/unvested under the company's schemes, and 33.73 million award shares remain unvested under Zeekr's scheme - Under the company's share option scheme, as of June 30, 2025, a total of **1,049,813,250** share options granted to directors and employees remained unexercised[124](index=124&type=chunk) - Under the company's share award scheme, as of June 30, 2025, **32,910,000** award shares remained unvested[128](index=128&type=chunk) - Under the Zeekr share award scheme, as of June 30, 2025, **33,733,269** award shares remained unvested, with the vesting date revised to May 25[129](index=129&type=chunk)[133](index=133&type=chunk)[249](index=249&type=chunk)[251](index=251&type=chunk) Equity-Settled Share-Based Payments Recognized in Condensed Consolidated Financial Statements | Item | Six Months Ended June 30, 2025 (RMB thousands) | Six Months Ended June 30, 2024 (RMB thousands) | | :--- | :--- | :--- | | Company's share option scheme | 119,475 | 567,619 | | Company's share award scheme | 523,287 | (142,400) | | Zeekr share award scheme | 40,737 | 930,704 | | **Total** | **683,499** | **1,355,923** | [Significant Related Party Transactions (Note 27)](index=63&type=section&id=%E9%87%8D%E5%A4%A7%E9%97%9C%E8%81%AF%E6%96%B9%E4%BA%A4%E6%98%93) The company engages in extensive transactions with numerous related parties, including sales of vehicle kits, purchases of vehicles, and R&D and technical licensing services, with the largest transaction volume with Zhejiang Geely Automobile Co., Ltd. and a significant increase in powertrain product purchases from Hao Si Power Group in the first half of 2025 - Sales of complete vehicle kits to Zhejiang Geely Automobile Co., Ltd. amounted to **RMB 35,612,536 thousand**, and purchases of complete vehicles amounted to **RMB 36,317,547 thousand**[134](index=134&type=chunk) - Purchases of powertrain products from Hao Si Power Group amounted to **RMB 11,529,629 thousand**, a significant increase from **RMB 1,625,410 thousand** in the same period last year[142](index=142&type=chunk) - Acquisition of property, plant and equipment from Geely Holding amounted to **RMB 21,572 thousand**, and acquisition of a subsidiary amounted to **RMB 3,600,000 thousand**[143](index=143&type=chunk) - Acquisition of a subsidiary from Volvo Investment amounted to **RMB 5,400,000 thousand**[141](index=141&type=chunk) [Fair Value Measurement of Financial Instruments (Note 28)](index=73&type=section&id=%E9%87%91%E8%9E%8D%E5%B7%A5%E5%85%B7%E5%85%AC%E5%85%81%E5%80%BC%E8%A8%88%E9%87%8F) The company's financial assets and liabilities are measured at fair value across three levels; as of June 30, 2025, bills receivable at fair value through other comprehensive income are Level 2, listed equity investments are Level 1, and forward foreign exchange contracts are Level 2 - Fair value measurement of financial instruments is categorized into Level 1 (quoted prices in active markets), Level 2 (observable input data), and Level 3 (unobservable input data)[144](index=144&type=chunk)[149](index=149&type=chunk) Financial Assets and Liabilities Measured at Fair Value | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | Fair Value Level | | :--- | :--- | :--- | :--- | | Bills receivable at fair value through other comprehensive income (recyclable) | 32,066,348 | 41,344,803 | Level 2 | | Listed equity investments at fair value through other comprehensive income (non-recyclable) | 72,025 | 78,797 | Level 1 | | Forward foreign exchange contracts at fair value through profit or loss not designated as hedging instruments | 53,652 | 27,918 | Level 2 | - The carrying amounts of financial assets and liabilities accounted for at amortized cost approximate their fair values[151](index=151&type=chunk) [Transactions with Non-Controlling Interests (Note 29)](index=74&type=section&id=%E8%88%87%E9%9D%9E%E6%8E%A7%E8%82%A1%E8%82%A1%E6%9D%B1%E6%AC%8A%E7%9B%8A%E4%B9%8B%E4%BA%A4%E6%98%93) In the first half of 2025, the company completed the acquisition of Lynk & Co Automobile Technology Co., Ltd., resulting in a RMB 4.142 billion reduction in non-controlling interests, while Zeekr repurchased some award shares to fulfill withholding tax obligations - The company, through Zeekr, acquired **20%** and **30%** equity interests in Lynk & Co for a total consideration of **RMB 9,104,721,000**, resulting in a reduction of non-controlling interests by **RMB 4,142,337,000**[152](index=152&type=chunk)[153](index=153&type=chunk) - Zeekr repurchased **3,054,930** Zeekr award shares to fulfill statutory withholding tax obligations[154](index=154&type=chunk) - In the first half of 2024, Zeekr completed its initial public offering, issuing **210 million** Zeekr shares, which increased non-controlling interests by **RMB 1,586,203,000**[155](index=155&type=chunk)[156](index=156&type=chunk) [Financial Information of Zeekr and its Subsidiaries (Note 30)](index=75&type=section&id=%E6%A5%B5%E6%B0%AA%E5%8F%8A%E5%85%B6%E9%99%84%E5%B1%AC%E5%85%AC%E5%8F%B8%E4%B9%8B%E8%B2%A1%E5%8B%99%E8%B3%87%E6%96%99) As of June 30, 2025, Zeekr Technology Group's non-controlling interest percentage was 34.85%, with revenue of RMB 49.45 billion for the period, but a loss of RMB 64.95 million was recorded Summary of Financial Information of Zeekr and its Subsidiaries | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Non-controlling interests percentage | 34.85% | 34.34% | | Non-current assets | 47,560,378 | 46,712,204 | | Current assets | 45,228,060 | 52,366,951 | | Current liabilities | (75,120,229) | (75,715,327) | | Net assets | 5,989,971 | 16,189,972 | | Carrying amount of non-controlling interests | 1,872,464 | 6,932,478 | | Revenue (six months ended June 30) | 49,454,398 | 48,251,976 | | Loss for the period (six months ended June 30) | (64,952) | (1,313,001) | | Profit / (loss) attributable to non-controlling interests (six months ended June 30) | 73,005 | (259,952) | - Zeekr's loss for the period significantly narrowed from **RMB 1,313,001 thousand** in the same period of 2024 to **RMB 64,952 thousand**, indicating improved operating performance[158](index=158&type=chunk) - Profit / (loss) attributable to non-controlling interests shifted from a loss to a profit, indicating improved financial performance of non-controlling interests[158](index=158&type=chunk) [Events After the Reporting Period (Note 31)](index=76&type=section&id=%E5%A0%B1%E5%91%8A%E6%9C%9F%E5%BE%8C%E4%BA%8B%E9%A0%85) Subsequent to the reporting period, the company established the joint venture Chongqing Qianli Zhijia Technology Co., Ltd. and injected capital into Renault Brazil; most significantly, the company proposed the privatization of Zeekr to integrate resources, enhance competitiveness, and simplify the equity structure - In July 2025, the company established the joint venture Chongqing Qianli Zhijia Technology Co., Ltd., with the company contributing **RMB 1.5 billion** for a **30%** equity stake, primarily engaged in advanced driver-assistance system development[159](index=159&type=chunk)[160](index=160&type=chunk) - On June 20, 2025, the company announced a capital injection into Renault Brazil, exchanging the entire issued share capital of its wholly-owned subsidiary and cash for a **21.29%** equity stake in Renault Brazil[161](index=161&type=chunk) - On July 15, 2025, the company proposed the privatization of Zeekr, intending to acquire all issued and outstanding Zeekr shares and American Depositary Shares for cash or consideration shares[163](index=163&type=chunk) - The Zeekr privatization aims to establish a unified listing platform, simplify operating structure, strengthen strategic control, enhance synergies, and improve overall competitiveness[197](index=197&type=chunk) Management Discussion and Analysis [Overall Performance](index=78&type=section&id=%E6%95%B4%E9%AB%94%E8%A1%A8%E7%8F%BE) In the first half of 2025, the company achieved record-high total and new energy vehicle sales, with new energy vehicle penetration exceeding market average; despite intense competition, gross margin remained stable, but profit attributable to owners of the parent decreased by 14% year-on-year, though it increased by 102% after adjusting for special items - In the first half of 2025, China's total passenger vehicle wholesale volume increased by **13%** year-on-year, domestic sales of new energy passenger vehicles grew by **34.3%** year-on-year, and market penetration rose to **50.4%**[169](index=169&type=chunk) H1 2025 Sales Performance | Metric | Sales (units) | Y-o-Y Growth (%) | Share of Total Sales (%) | | :--- | :--- | :--- | :--- | | Total Sales | 1,409,180 | 47 | 100 | | New Energy Vehicle Sales | 725,151 | 126 | 51.5 | | Internal Combustion Engine Vehicle Sales | 684,029 | 8 | 48.5 | | Plug-in Hybrid Electric Vehicle Sales | 214,348 | 61 | 15.2 | | Battery Electric Vehicle Sales | 510,803 | 173 | 36.2 | | China Market Sales | 1,225,066 | 62 | 87.0 | | China Market New Energy Vehicle Sales | 684,693 | Not applicable | 55.9 | | Export Sales | 184,114 | (8) | 13.0 | | New Energy Vehicle Export Sales | 40,458 | 146 | 22.0 | - Total revenue for the first half of 2025 increased by **27%** year-on-year to **RMB 150.3 billion**, while average selling price per vehicle decreased by **RMB 14 thousand** year-on-year to **RMB 96 thousand**[172](index=172&type=chunk) - Gross margin remained stable, slightly decreasing by **0.3 percentage points** year-on-year to **16.4%**, primarily benefiting from economies of scale, cost control, and improved profitability of GEA architecture products[172](index=172&type=chunk) - Profit attributable to equity holders of the company was **RMB 9.290 billion**, a **14%** year-on-year decrease; excluding net foreign exchange gains after tax, impairment losses on non-financial assets, and gains from disposal of subsidiaries in H1 2024, adjusted profit was **RMB 6.657 billion**, a **102%** year-on-year increase[175](index=175&type=chunk) [Financial Resources](index=80&type=section&id=%E8%B2%A1%E5%8B%99%E8%B3%87%E6%BA%90) As of June 30, 2025, the company maintained a robust financial position with ample cash reserves, totaling RMB 58.8 billion, net cash from operating activities of RMB 15 billion, and total capital expenditure of RMB 8 billion, while total borrowings increased, net cash remained stable - Total cash level at period-end (including bank balances and cash, and restricted bank deposits) was **RMB 58.8 billion**, showing stable growth from **RMB 46.6 billion** at December 31, 2024[176](index=176&type=chunk) - Net cash from operating activities was **RMB 15 billion**, and total capital expenditure reached **RMB 8 billion**, primarily for new energy product matrix expansion and intelligent technology R&D[176](index=176&type=chunk) - Total borrowings (including all forms of loans) increased by **162%** from December 31, 2024, to **RMB 19.9 billion**[179](index=179&type=chunk) - Net cash (i.e., total cash level less total borrowings) was **RMB 38.9 billion**, a **0.3%** decrease from **RMB 39.0 billion** at December 31, 2024[179](index=179&type=chunk) [Strategic Business Development and Integration](index=80&type=section&id=%E6%88%B0%E7%95%A5%E6%80%A7%E6%A5%AD%E5%8B%99%E7%99%BC%E5%B1%95%E8%88%87%E6%95%B4%E5%90%88) In the first half of 2025, the company implemented several strategic initiatives, including Zeekr's acquisition of Lynk & Co to optimize equity structure and enhance synergies, the establishment of Qianli Zhijia joint venture to strengthen ADAS R&D, the acquisition of related auto dealerships to expand direct sales channels, the disposal of Geely Xindawang to divest non-core businesses, and capital injection into Renault Brazil to accelerate international expansion, most notably proposing Zeekr's privatization to establish a unified listing platform, fully integrate resources, and enhance overall group competitiveness - Zeekr acquired **20%** and **30%** equity interests in Lynk & Co for a total consideration of **RMB 9.105 billion**, and subscribed for new capital of **RMB 367 million**, making Lynk & Co a non-wholly owned subsidiary of Zeekr, aiming to drive strategic integration, eliminate horizontal competition, enhance resource utilization efficiency, and achieve synergies[178](index=178&type=chunk)[180](index=180&type=chunk)[184](index=184&type=chunk) - The joint venture Chongqing Qianli Zhijia Technology Co., Ltd. was established, with the company contributing **RMB 1.5 billion** for a **30%** equity stake, aiming to integrate strengths, enhance ADAS R&D capabilities, and accelerate technological development[181](index=181&type=chunk)[182](index=182&type=chunk)[183](index=183&type=chunk) - Acquired **70%** equity interests in six related auto dealerships for a cash consideration of approximately **RMB 29.239 million**, aiming to establish Geely brand direct sales channels, enhance market responsiveness, and strengthen customer relationships[188](index=188&type=chunk)[189](index=189&type=chunk) - Disposed of a **41.5%** equity interest in Geely Xindawang for a cash consideration of **RMB 49.8 million**, aiming to divest non-core business investments and optimize cash flow[190](index=190&type=chunk) - Injected capital into Renault Brazil, acquiring a **21.29%** equity interest, aiming to enter the Latin American market and accelerate international expansion by leveraging Renault's local production system and distribution network[192](index=192&type=chunk)[193](index=193&type=chunk) - Proposed the privatization of Zeekr, aiming to establish a unified listing platform, simplify operating structure, strengthen strategic control, comprehensively integrate technology, products, supply chain, marketing, services, and international market expansion, thereby enhancing the Group's overall competitiveness[194](index=194&type=chunk)[195](index=195&type=chunk)[197](index=197&type=chunk) [R&D Investment and New Products](index=85&type=section&id=%E7%A0%94%E7%99%BC%E6%8A%95%E5%85%A5%E5%8F%8A%E6%96%B0%E7%94%A2%E5%93%81) In the first half of 2025, the company's total R&D investment reached RMB 7.33 billion, a 21% year-on-year increase, with most expenses capitalized for new energy intelligent vehicle development, and new models like Geely Galaxy Starburst 8, Zeekr 007 GT, and Lynk & Co 900 launched, with more new energy products planned for the second half R&D Expense Details | Item | Six Months Ended June 30, 2025 (RMB thousands) | Six Months Ended June 30, 2024 (RMB thousands) | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Amortisation of intangible assets (capitalised product R&D costs) | 4,412,050 | 3,139,974 | 41 | | R&D costs (not eligible for capitalisation) | 2,915,618 | 2,900,345 | 1 | | **Total R&D expenses deducted from profit or loss** | **7,327,668** | **6,040,319** | **21** | - Capitalised product R&D costs increased by **RMB 5.43 billion**, primarily related to the development of new energy intelligent vehicle models[200](index=200&type=chunk) - New products launched in the first half include Geely Galaxy Starburst 8 (based on GEA Evo architecture), Zeekr 007 GT (based on SEA architecture), and Lynk & Co 900 (based on SPA Evo architecture)[201](index=201&type=chunk)[202](index=202&type=chunk)[203](index=203&type=chunk) - New products planned for the second half include Geely Galaxy A7, Geely Galaxy M9, Geely Galaxy Starburst 6, Zeekr 9X, and Lynk & Co 10 EM-P[204](index=204&type=chunk)[205](index=205&type=chunk)[207](index=207&type=chunk) [Brand Performance](index=86&type=section&id=%E5%93%81%E7%89%8C%E8%A1%A8%E7%8F%BE) In the first half of the year, Geely brand's total sales reached 1.1643 million units, a 57% year-on-year increase, with Geely Galaxy brand sales surging by 232%; Zeekr Technology Group's total revenue was RMB 49.5 billion, up 2.5%, with improved gross margins for vehicle sales, while Geely Auto Finance's net profit declined, and Hao Si Power achieved RMB 47.113 billion in revenue and RMB 966 million in net profit - Geely brand's total sales reached **1,164,303 units** in the first half, a **57%** year-on-year increase; Geely China Star ranked first in sales among Chinese independent brand ICE passenger vehicles for the ninth consecutive year, and Xingyue L was the best-selling ICE SUV in the Chinese passenger vehicle market[206](index=206&type=chunk) - Geely Galaxy brand's sales reached **548,408 units** in the first half, a significant **232%** year-on-year increase, with the pure electric model Geely Xingyuan becoming the top-selling model in the Chinese passenger vehicle market[208](index=208&type=chunk) - Zeekr Technology Group's total revenue reached **RMB 49.5 billion**, a **2.5%** year-on-year increase; gross margin for vehicle sales business was **16.9%**, up **4.1 percentage points** year-on-year, and overall gross margin reached **19.7%**, up **1.3 percentage points** year-on-year[211](index=211&type=chunk) - Geely Auto Finance's net profit for the first half was **RMB 417 million**, a **38%** year-on-year decrease, while new contract volume for new energy vehicle business reached **160 thousand** units, a **128%** year-on-year increase[214](index=214&type=chunk) - Hao Si Power achieved revenue of **RMB 47.113 billion** and net profit of **RMB 966 million** in the first half, with engine and transmission sales reaching **2.23 million units** and **1.89 million units**, respectively[215](index=215&type=chunk) [Exports](index=88&type=section&id=%E5%87%BA%E5%8F%A3) In the first half of 2025, the company's export sales decreased by 8% to 184.11 thousand units; Geely brand actively expanded new energy vehicle overseas sales, with Geely International EX5 entering 25 countries, and the company accelerated global market expansion and localized production through collaborations with Renault Brazil, Proton, and Renault Korea - In the first half of 2025, the company's export sales reached **184,114 units**, a **8%** year-on-year decrease, accounting for **13%** of total sales[216](index=216&type=chunk) - Geely brand's new energy vehicle export sales reached **40,458 units**, a **146%** year-on-year increase, accounting for **22%** of export sales[174](index=174&type=chunk) - Geely brand's pure electric SUV, Geely International EX5, has successfully entered **25** overseas countries and ranked first in sales among all brands in the pure electric compact SUV segment in Costa Rica[216](index=216&type=chunk) - By injecting capital into Renault Brazil and acquiring a **21.29%** equity interest, the company aims to leverage Renault's local production footprint and extensive dealer network in Brazil to accelerate market expansion[217](index=217&type=chunk) - In collaboration with Proton, the first pure electric vehicle, e.MAS 7, was launched, becoming the top-selling pure electric model in Malaysia with sales exceeding **4,000 units** in the first half[219](index=219&type=chunk) [Outlook](index=89&type=section&id=%E5%B1%95%E6%9C%9B) The company will maintain financial prudence, advance its new energy and intelligent strategy, achieve cost control and profitability through scale, accelerate mainstream new energy vehicle exports in the second half, and raise its full-year sales target to 3 million units, while fully pursuing Zeekr's privatization to implement the 'One Geely' strategic integration, covering various power forms, and enhancing overall competitiveness and enterprise value - The company will continue to adhere to a financially prudent operating policy, address challenges in the industry's high-quality development, and firmly advance its new energy and intelligent strategy[220](index=220&type=chunk) - More new energy vehicle models will be launched in various international markets in the second half, with a commitment to building a comprehensive global supply chain system and localized production capacity layout[221](index=221&type=chunk) - The company has raised its full-year sales target from **2.71 million units** to **3 million units**, demonstrating management's confidence in future development[221](index=221&type=chunk) - The company will fully advance the privatization of Zeekr, implement the 'One Geely' strategic integration, and strengthen the Group's synergies and competitiveness in the smart electric vehicle sector[221](index=221&type=chunk) [Capital Structure and Financial Policies](index=90&type=section&id=%E8%B3%87%E6%9C%AC%E6%9E%B6%E6%A7%8B%E5%8F%8A%E8%B2%A1%E5%8B%99%E6%94%BF%E7%AD%96) The company primarily meets short-term working capital needs through operating cash flow, bank loans, and supplier credit, and funds long-term capital expenditures through operating cash flow, bank borrowings, and capital market fundraising; as of June 30, 2025, equity attributable to owners of the parent was approximately RMB 89.6 billion - The company primarily meets its short-term working capital requirements through its own operating cash flows, short-term bank loans from commercial banks in the PRC and Hong Kong, and supplier credit[222](index=222&type=chunk) - Long-term capital expenditures (including product and technology development costs and investments in the construction, expansion, and upgrade of production facilities) are funded by a combination of operating cash flows, bank borrowings, and fundraising activities in the capital markets[222](index=222&type=chunk) - As of June 30, 2025, equity attributable to equity holders of the company was approximately **RMB 89.6 billion**, an increase from **RMB 86.5 billion** at December 31, 2024[222](index=222&type=chunk) [Foreign Currency Exchange Risk](index=90&type=section&id=%E5%A4%96%E5%B9%A3%E5%85%8C%E6%8F%9B%E4%B9%8B%E9%A2%A8%E9%9A%AA) The company's primary business is RMB-denominated, but export operations are USD-denominated and exposed to emerging market currency fluctuations; the company hedges some risks with forward foreign exchange contracts and increases local currency cost ratios in overseas production to enhance natural hedging, with management closely monitoring market conditions and evaluating hedging strategy effectiveness - The company's principal business is denominated in RMB, but most export business is denominated in USD, with exposure to multiple emerging markets[223](index=223

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不負責，對其準確性 或完整性亦不發表任何聲明，並明確表示，概不對因本公告全部或任何部分內容而產生或因倚 賴該等內容而引致的任何損失承擔任何責任。 Yonghe Medical Group Co., Ltd. 雍禾醫療集團有限公司 （於開曼群島註冊成立的有限公司） （股份代號：2279） 截至2025年6月30日止六個月中期業績公告 財務摘要 本集團的收入從截至2024年6月30日止六個月的人民幣900.2百萬元減少4.3% 至截至2025年6月30日止六個月的人民幣861.6百萬元。 本集團的毛利從截至2024年6月30日止六個月的人民幣529.4百萬元增加3.9% 至截至2025年6月30日止六個月的人民幣550.3百萬元。 本集團的毛利率從截至2024年6月30日止六個月的58.8%上升到截至2025年6月 30日止六個月的63.9%。 截至2024年6月30日止六個月本集團的淨虧損為人民幣138.6百萬元，而截至 2025年6月30日止六個月本集團的淨利潤為人民幣27.9百萬元。 本集團的除利息、稅項、折舊及攤銷前溢利從截至2024年6月3 ...

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文件的內容概不負責，對其準 確性或完整性亦不發表任何聲明，並明確表示，概不對因本文件全部或任何部分內容而產 生或因倚賴該等內容而引致的任何損失承擔任何責任。 (股份代號：83) 載有關於以股代息計劃詳情之通函及選擇以股代息之表格，將約於二零二五年十一月六 日寄予各股東。預計末期股息單及股票將約於二零二五年十二月二日發送給股東。 主席報告 本人謹向股東提交二零二四╱二零二五年度之年報。 業績 截至二零二五年六月三十日止之年度（「本財政年度」），在撇除投資物業公平值變動的 影響後，集團股東應佔基礎溢利為五十一億一千八百萬港元（二零二三╱二零二四：五十 一億七千一百萬港元）。每股基礎盈利為零點五八港元（二零二三╱二零二四：零點六一 港元）。 計及為非現金項目的投資物業重估虧損（扣減遞延稅項）十億八千四百萬港元（二零二三 ╱二零二四：重估虧損五億八千萬港元），本財政年度集團股東應佔淨溢利為四十億一千 九百萬港元（二零二三╱二零二四：四十四億零二百萬港元）。本財政年度每股盈利為零 點四五港元（二零二三╱二零二四：零點五二港元）。 末期股息 董事會建議派發本財政年度之末 ...

[Company Information](index=3&type=section&id=Company%20Information) This section provides essential company details, including board composition, key committees, registration information, and primary business activities [Board of Directors and Committees](index=3&type=section&id=Board%20of%20Directors%20and%20Committees) This section lists the composition of the company's Board of Directors, including executive and independent non-executive directors, and the members and chairpersons of the Audit, Remuneration, and Nomination Committees - The Board of Directors comprises **4 executive directors** (including Chairman and CEO Mr. He Xingfu) and **3 independent non-executive directors**[5](index=5&type=chunk) - The company has an Audit Committee (chaired by Mr. Leung Chiu Kwan), a Remuneration Committee (chaired by Mr. Lau Siu Hang), and a Nomination Committee (chaired by Mr. He Xingfu)[5](index=5&type=chunk) [Company General Information](index=3&type=section&id=Company%20General%20Information) This section provides the company's registered office, Hong Kong headquarters, share registrar, auditor, principal bankers, stock code, and website, noting its main business is manufacturing and selling optical fiber and cables in Hong Kong and Thailand - The company's stock code is **9963**, and its website is www.transtechoptel.com[7](index=7&type=chunk) - The Group's principal business involves manufacturing and selling optical fiber and optical cables in **Hong Kong and Thailand** respectively[19](index=19&type=chunk) [Financial Highlights](index=5&type=section&id=Financial%20Highlights) This section presents a concise overview of the group's interim financial performance, including revenue, loss, and dividend recommendations [Interim Results Overview](index=5&type=section&id=Interim%20Results%20Overview) For the six months ended June 30, 2025, the Group's revenue significantly decreased, gross loss margin substantially increased, and while loss attributable to owners narrowed slightly, the net loss margin expanded, with no interim dividend recommended | Metric | H1 2025 (HK$ million) | H1 2024 (HK$ million) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 38.7 | 72.9 | -46.9% | | Gross Loss Margin | 14.8% | 3.8% | +11.0% (increase) | | Loss Attributable to Owners of the Company | 12.6 | 13.7 | -8.0% (narrowed) | | Net Loss Margin | 32.6% | 18.8% | +13.8% (increase) | | Basic Loss Per Share (HK cents) | 4.9 | 5.3 | -7.5% (narrowed) | | Interim Dividend | Nil | Nil | - | [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=6&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) This section details the group's revenue, costs, and overall profit or loss, highlighting the impact of foreign exchange gains on comprehensive income [Key Profit or Loss Statement Data](index=6&type=section&id=Key%20Profit%20or%20Loss%20Statement%20Data) The Group experienced a significant revenue decline and expanded gross loss in H1 2025, but net loss narrowed due to positive foreign exchange gains, leading to a shift from total comprehensive expense to income | Metric | H1 2025 (HK$ thousand) | H1 2024 (HK$ thousand) | | :--- | :--- | :--- | | Revenue | 38,746 | 72,852 | | Cost of Sales | (44,476) | (75,610) | | Gross Loss | (5,730) | (2,758) | | Other Income and Losses | 1,999 | (1,862) | | Loss Before Tax | (13,070) | (14,168) | | Loss for the Period | (12,644) | (13,680) | | Total Comprehensive Income/(Expense) for the Period | 640 | (31,208) | | Basic Loss Per Share (HK cents) | (4.9) | (5.3) | - Total comprehensive income for the period shifted from an expense of **HK$31,208 thousand** in H1 2024 to an income of **HK$640 thousand** in H1 2025, primarily due to exchange differences on translation of foreign operations[11](index=11&type=chunk) [Condensed Consolidated Statement of Financial Position](index=7&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) This section presents the group's assets, liabilities, and equity at the reporting date, showing changes in non-current assets, current assets, and cash balances [Key Balance Sheet Data](index=7&type=section&id=Key%20Balance%20Sheet%20Data) As of June 30, 2025, the Group's non-current assets increased, current assets and liabilities changed, resulting in a decrease in net current assets, but total assets less current liabilities and total equity remained relatively stable | Metric | June 30, 2025 (HK$ thousand) | Dec 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Non-current Assets | 259,155 | 244,671 | | Current Assets | 142,494 | 150,360 | | Current Liabilities | 45,744 | 39,439 | | Net Current Assets | 96,750 | 110,921 | | Total Assets Less Current Liabilities | 355,905 | 355,592 | | Net Assets | 355,399 | 354,759 | | Total Equity | 355,399 | 354,759 | - Property, plant and equipment increased from **HK$225,965 thousand** as of December 31, 2024, to **HK$239,387 thousand** as of June 30, 2025[13](index=13&type=chunk) - Bank balances and cash decreased from **HK$17,763 thousand** as of December 31, 2024, to **HK$11,565 thousand** as of June 30, 2025[13](index=13&type=chunk) [Condensed Consolidated Statement of Changes in Equity](index=8&type=section&id=Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) This section outlines the changes in the group's total equity, primarily driven by the period's loss and foreign exchange differences from overseas operations [Analysis of Changes in Equity](index=8&type=section&id=Analysis%20of%20Changes%20in%20Equity) The Group's total equity slightly increased in H1 2025, primarily due to other comprehensive income from exchange differences on translation of foreign operations, offsetting the loss for the period | Metric | June 30, 2025 (HK$ thousand) | Jan 1, 2025 (HK$ thousand) | | :--- | :--- | :--- | | Total Equity | 355,399 | 354,759 | | Loss for the Period | (12,644) | (11,400) (beginning of accumulated profits) | | Other Comprehensive Income (Exchange Differences) | 13,284 | - | | Total Comprehensive Income/(Expense) for the Period | 640 | - | - Exchange reserve improved from **(HK$21,006 thousand)** as of January 1, 2025, to **(HK$7,722 thousand)** as of June 30, 2025, reflecting a positive impact from exchange rate movements[15](index=15&type=chunk) [Condensed Consolidated Statement of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) This section details the group's cash flows from operating, investing, and financing activities, indicating a net decrease in cash and cash equivalents [Key Cash Flow Data](index=9&type=section&id=Key%20Cash%20Flow%20Data) In H1 2025, the Group's net cash used in operating activities significantly increased, and despite net cash inflow from financing activities, cash and cash equivalents experienced a net decrease overall | Metric | H1 2025 (HK$ thousand) | H1 2024 (HK$ thousand) | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | (11,064) | (1,973) | | Net Cash Used in Investing Activities | (274) | (122) | | Net Cash From/(Used in) Financing Activities | 3,510 | (5,733) | | Net Decrease in Cash and Cash Equivalents | (7,828) | (7,828) | | Cash and Cash Equivalents at End of Period | 11,565 | 7,593 | - Net cash used in operating activities increased from **HK$1,973 thousand** in H1 2024 to **HK$11,064 thousand** in H1 2025[17](index=17&type=chunk) - Financing activities shifted from a net cash outflow of **HK$5,733 thousand** in H1 2024 to a net cash inflow of **HK$3,510 thousand** in H1 2025, primarily due to new bank borrowings exceeding repayments[17](index=17&type=chunk) [Notes to the Unaudited Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20the%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and breakdowns for various line items in the financial statements, covering accounting policies, revenue, expenses, and balance sheet components [1. General Information and Basis of Preparation](index=9&type=section&id=1.%20General%20Information%20and%20Basis%20of%20Preparation) This section outlines the company's registration, listing history, ultimate holding company, and principal business, stating that the interim financial statements are prepared in Hong Kong Dollars under HKFRS - The Company was incorporated in the Cayman Islands on **September 6, 2016**, and successfully transferred its listing from GEM to the Main Board on **November 5, 2020**[19](index=19&type=chunk) - The ultimate holding company is Hangzhou Futong Investment Co., Ltd., and the Group's principal business is manufacturing and selling optical fiber and optical cables in **Hong Kong and Thailand**[19](index=19&type=chunk) - The consolidated financial results are prepared in accordance with **Hong Kong Financial Reporting Standards (HKFRS)** issued by the Hong Kong Institute of Certified Public Accountants[19](index=19&type=chunk) [2. Significant Accounting Policies](index=10&type=section&id=2.%20Significant%20Accounting%20Policies) The condensed consolidated financial statements adopt the same accounting policies as the previous year's financial statements, and the adoption of new and revised HKFRS has not led to significant changes in accounting policies or reported amounts - The condensed consolidated financial statements have been prepared on a historical cost basis and follow the same accounting policies applied in the preparation of the Group's financial statements for the year ended **December 31, 2024**[20](index=20&type=chunk) - The adoption of new and revised HKFRS has not resulted in significant changes to the Group's accounting policies or the amounts reported for the current and prior periods[20](index=20&type=chunk) [3. Revenue and Segment Information](index=11&type=section&id=3.%20Revenue%20and%20Segment%20Information) This section details revenue by type of goods and operating segment, showing a significant decline in both optical cable and optical fiber sales, with the Group's operating segments including optical cables in Thailand and optical fiber in Hong Kong | Type of Goods | H1 2025 (HK$ thousand) | H1 2024 (HK$ thousand) | | :--- | :--- | :--- | | Sales of Optical Cables | 37,441 | 69,562 | | Sales of Optical Fibers | 1,305 | 3,290 | | Total | 38,746 | 72,852 | - The Group's operating and reportable segments are (i) optical cables, optical cable cores, and other related products located in **Thailand**; and (ii) optical fibers located in **Hong Kong**[29](index=29&type=chunk) | Segment | H1 2025 Segment Loss (HK$ thousand) | H1 2024 Segment Profit/(Loss) (HK$ thousand) | | :--- | :--- | :--- | | Optical Cables, Optical Cable Cores and Other Related Products | (3,887) | 2,036 | | Optical Fibers | (6,204) | (14,345) | [4. Other Income, Gains and Losses](index=16&type=section&id=4.%20Other%20Income%2C%20Gains%20and%20Losses) This section lists income from scrap sales, bank interest, and other sources, highlighting a net foreign exchange gain in H1 2025, contrasting with a net foreign exchange loss in the prior year | Metric | H1 2025 (HK$ thousand) | H1 2024 (HK$ thousand) | | :--- | :--- | :--- | | Other Income | 232 | 216 | | Net Foreign Exchange Gain/(Loss) | 1,897 | (1,862) | | Gain on Disposal of Property, Plant and Equipment | 102 | – | - A net foreign exchange gain of **HK$1,897 thousand** was recorded in H1 2025, compared to a net foreign exchange loss of **HK$1,862 thousand** in H1 2024[33](index=33&type=chunk) [5. Finance Costs](index=16&type=section&id=5.%20Finance%20Costs) This section discloses the Group's finance costs, primarily bank borrowing interest, showing a decrease compared to the prior year | Metric | H1 2025 (HK$ thousand) | H1 2024 (HK$ thousand) | | :--- | :--- | :--- | | Interest on Bank Borrowings | 445 | 810 | [6. Loss Before Tax](index=17&type=section&id=6.%20Loss%20Before%20Tax) This section itemizes expenses deducted in calculating loss before tax, including auditor's remuneration, depreciation, directors' emoluments, staff costs, and inventory costs and provisions | Metric | H1 2025 (HK$ thousand) | H1 2024 (HK$ thousand) | | :--- | :--- | :--- | | Auditor's Remuneration | 596 | 615 | | Depreciation of Property, Plant and Equipment (net) | 474 | 428 | | Total Staff Costs (net) | 6,204 | 6,256 | | Cost of Inventories Recognized as Expense | 33,937 | 75,610 | | Provision for Inventories | 3,010 | 1,917 | | Reversal of Impairment Loss on Trade Receivables | (2,448) | (2,233) | - Cost of inventories recognized as an expense significantly decreased from **HK$75,610 thousand** in H1 2024 to **HK$33,937 thousand** in H1 2025[35](index=35&type=chunk) [7. Income Tax Credit](index=18&type=section&id=7.%20Income%20Tax%20Credit) This section explains the composition of income tax credit, including Hong Kong profits tax and Thai corporate income tax, noting that Futong Thailand enjoys tax incentives, leading to an overall decrease in income tax credit | Metric | H1 2025 (HK$ thousand) | H1 2024 (HK$ thousand) | | :--- | :--- | :--- | | Thai Corporate Income Tax (Current Tax) | 441 | (935) | | Deferred Tax | (921) | 392 | | Total Income Tax Credit | (426) | (488) | - Futong Thailand enjoys tax incentives under the Investment Promotion Act of Thailand, including a **50% reduction** in corporate income tax payable from March 26, 2021, to March 25, 2026[37](index=37&type=chunk) [8. Dividends](index=19&type=section&id=8.%20Dividends) The Board of Directors decided not to recommend an interim dividend for the six months ended June 30, 2025, consistent with the prior year - The Company neither paid, declared, nor proposed any dividends during the interim period (six months ended June 30, 2024: nil)[38](index=38&type=chunk) [9. Loss Per Share](index=19&type=section&id=9.%20Loss%20Per%20Share) This section calculates basic loss per share and notes that diluted loss per share is not presented due to the absence of potential ordinary shares | Metric | H1 2025 (HK cents) | H1 2024 (HK cents) | | :--- | :--- | :--- | | Basic Loss Per Share | (4.9) | (5.3) | - Basic loss per share is calculated based on the loss for the period attributable to owners of the Company and the weighted average of **260,000,000 issued ordinary shares**[39](index=39&type=chunk) - Diluted loss per share is not presented as no potential ordinary shares were issued during both periods[40](index=40&type=chunk) [10. Changes in Property, Plant and Equipment](index=19&type=section&id=10.%20Changes%20in%20Property%2C%20Plant%20and%20Equipment) The Group made purchases of property, plant and equipment in H1 2025, primarily investing in machinery, motor vehicles, and construction in progress | Item | H1 2025 Purchases (HK$ thousand) | H1 2024 Purchases (HK$ thousand) | | :--- | :--- | :--- | | Machinery | 229 | 0 | | Motor Vehicles | 155 | 0 | | Construction in Progress | 2,193 | 1,201 | [11. Deposits, Prepayments and Other Receivables](index=20&type=section&id=11.%20Deposits%2C%20Prepayments%20and%20Other%20Receivables) This section provides a detailed breakdown of non-current and current deposits, prepayments, and other receivables, disclosing significant advances to a supplier for raw material purchases and related loss provisions | Metric | June 30, 2025 (HK$ thousand) | Dec 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Non-current Portion (less loss allowance) | 4,027 | 3,911 | | Current Portion (less loss allowance) | 62,358 | 62,480 | | Deposits for Raw Material Purchases (current) | 172,743 | 143,333 | | Loss Allowance (current) | (129,676) | (94,635) | - As of June 30, 2025, approximately **HK$48,507 thousand** in prepayments (net of impairment loss of HK$124,236 thousand) included advances made to a supplier for raw material purchases[42](index=42&type=chunk) [12. Inventories](index=21&type=section&id=12.%20Inventories) This section lists the components of inventories, including raw materials and consumables, work in progress, finished goods, and goods in transit, along with inventory provisions | Item | June 30, 2025 (HK$ thousand) | Dec 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Raw Materials and Consumables | 21,491 | 23,741 | | Work in Progress | 6,408 | 7,564 | | Finished Goods | 9,997 | 10,262 | | Total Inventories (before provision) | 38,705 | 43,241 | | Provision for Inventories | (3,980) | (8,172) | | Net Inventories | 34,725 | 35,069 | [13. Trade Receivables](index=21&type=section&id=13.%20Trade%20Receivables) This section provides the total amount of trade receivables, loss allowance, aging analysis, and denominated currencies, demonstrating the Group's strict control over credit risk | Metric | June 30, 2025 (HK$ thousand) | Dec 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Total Trade Receivables | 172,742 | 171,857 | | Loss Allowance | (138,896) | (136,809) | | Net Trade Receivables | 33,846 | 35,048 | | Aging | June 30, 2025 (HK$ thousand) | Dec 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | 0 to 180 days | 27,106 | 34,607 | | 181 to 270 days | 1,952 | – | | 271 to 365 days | 4,788 | – | | Over 365 days | – | 441 | - Trade receivables are primarily denominated in **Thai Baht (HK$21,338 thousand)** and **US Dollars (HK$12,314 thousand)**[46](index=46&type=chunk) [14. Trade Payables](index=22&type=section&id=14.%20Trade%20Payables) This section provides the total amount of trade payables, aging analysis, and denominated currencies, illustrating the Group's supplier credit terms and the currency composition of its payables | Metric | June 30, 2025 (HK$ thousand) | Dec 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Trade Payables | 10,474 | 10,253 | | Aging | June 30, 2025 (HK$ thousand) | Dec 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | 0 to 30 days | 7,882 | 4,942 | | 31 to 60 days | 777 | 2,049 | | 61 to 90 days | 23 | 1,853 | | 91 to 180 days | 1,345 | 1,243 | | Over 180 days | 447 | 166 | - Trade payables are primarily denominated in **Renminbi (HK$5,290 thousand)** and **Thai Baht (HK$2,554 thousand)**[49](index=49&type=chunk) [15. Other Payables and Accrued Charges](index=24&type=section&id=15.%20Other%20Payables%20and%20Accrued%20Charges) This section lists the Group's other payables and accrued charges, showing a slight increase in their total amount | Metric | June 30, 2025 (HK$ thousand) | Dec 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Accrued Charges | 2,920 | 3,187 | | Other Payables | 918 | 238 | | Total | 3,838 | 3,425 | [16. Contract Liabilities](index=24&type=section&id=16.%20Contract%20Liabilities) This section explains the source of contract liabilities (primarily customer advances) and their changes, indicating a significant increase in contract liabilities | Metric | June 30, 2025 (HK$ thousand) | Dec 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Contract Liabilities | 486 | 14 | - Contract liabilities primarily arise from short-term customer advances for optical cable sales, increasing from **HK$14 thousand** as of December 31, 2024, to **HK$486 thousand** as of June 30, 2025[51](index=51&type=chunk) - The increase in contract liabilities is mainly due to **HK$461 thousand** in advances received from customers[52](index=52&type=chunk) [17. Bank and Other Borrowings](index=25&type=section&id=17.%20Bank%20and%20Other%20Borrowings) This section provides detailed information on bank borrowings, including effective interest rates, amounts, and maturity dates, showing an increase in total borrowings, all denominated in Thai Baht | Metric | June 30, 2025 (HK$ thousand) | Dec 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Bank Borrowings – Unsecured | 30,875 | 25,300 | | Effective Interest Rate | 4% | 5% | - All bank borrowings are floating-rate and repayable within **one year or on demand**[53](index=53&type=chunk) - The carrying amount of bank borrowings is entirely denominated in **Thai Baht**[53](index=53&type=chunk) [18. Deferred Tax](index=26&type=section&id=18.%20Deferred%20Tax) This section analyzes deferred tax assets and their changes, primarily related to tax losses, provisions for expected credit losses, and accelerated tax depreciation | Metric | June 30, 2025 (HK$ thousand) | Dec 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Deferred Tax Assets | 15,741 | 14,795 | - Deferred tax assets primarily consist of provisions for expected credit losses (**HK$14,615 thousand**) and tax losses (**HK$2,030 thousand**)[54](index=54&type=chunk) [19. Provisions](index=27&type=section&id=19.%20Provisions) This section discloses changes in the long service payment provision, which is made for employees in accordance with Thai employment regulations | Metric | June 30, 2025 (HK$ thousand) | Dec 31, 2024 (HK$ thousand) | | :--- | :--- | :--- | | Long Service Payment Provision | 506 | 833 | - The long service payment provision was reversed by **HK$364 thousand** during the period, leading to a decrease in the period-end balance[55](index=55&type=chunk) [20. Share Capital](index=27&type=section&id=20.%20Share%20Capital) This section describes the company's authorized and issued share capital, both of which remained unchanged during the reporting period | Metric | Number of Shares | HK$ thousand | | :--- | :--- | :--- | | Authorized Share Capital (par value HK$0.01 per share) | 1,000,000,000 | 10,000 | | Issued and Fully Paid Share Capital (par value HK$0.01 per share) | 260,000,000 | 2,600 | [21. Related Party Transactions](index=28&type=section&id=21.%20Related%20Party%20Transactions) This section discloses transactions between the Group and related parties, including rental expenses paid to Futong Group International Limited and key management personnel remuneration | Transaction Type | H1 2025 (HK$ thousand) | H1 2024 (HK$ thousand) | | :--- | :--- | :--- | | Rental Expenses to Related Company | 3,900 | 4,500 | | Other Payables to Related Company (period-end) | 650 | – | | Key Management Personnel Remuneration | 1,844 | 1,786 | - Short-term lease rental expenses for plant and office premises paid to Futong Group International Limited decreased[58](index=58&type=chunk) [22. Contingent Liabilities](index=29&type=section&id=22.%20Contingent%20Liabilities) The Group had no significant contingent liabilities at the end of the reporting period - As of June 30, 2025, and December 31, 2024, the Group had **no significant contingent liabilities**[63](index=63&type=chunk) [23. Approval of Financial Statements](index=29&type=section&id=23.%20Approval%20of%20Financial%20Statements) The interim financial statements were approved and authorized for issue by the Company's Board of Directors on August 27, 2025 - The interim financial statements were approved and authorized for issue by the Company's Board of Directors on **August 27, 2025**[64](index=64&type=chunk) [Management Discussion and Analysis](index=29&type=section&id=Management%20Discussion%20and%20Analysis) This section provides an in-depth review of the group's operational and financial performance, market outlook, and risk management strategies [Business Review](index=30&type=section&id=Business%20Review) The Group's financial performance in H1 2025 was unsatisfactory, with a significant revenue decrease and increased gross loss, primarily due to reduced optical cable and optical fiber sales | Metric | H1 2025 (HK$ million) | H1 2024 (HK$ million) | Change (%) | | :--- | :--- | :--- | :--- | | Total Revenue | 38.7 | 72.9 | -46.9% | | Gross Loss | 5.7 | 2.8 | +103.6% | | Loss Attributable to Owners of the Company | 12.6 | 13.7 | -8.0% | | Optical Cable Sales | 37.4 | 69.2 | -46.0% | | Optical Fiber Sales | 1.3 | 3.6 | -63.9% | [Review](index=30&type=section&id=Review) The Chinese telecommunications industry faces severe challenges from demand contraction and intensified competition amid global geopolitical volatility and domestic economic slowdown, leading to uncertainties for optical fiber and cable companies - The Chinese telecommunications industry faces dual pressures of **demand contraction and intensified competition**, with challenges and uncertainties persisting for optical fiber and cable companies[67](index=67&type=chunk) [Futong Thailand](index=30&type=section&id=Futong%20Thailand) Futong Thailand's performance was generally poor due to a weak Thai and ASEAN market, with optical cable sales revenue significantly decreasing due to lower sales volume and prices, leading to a reduced gross profit margin | Metric | H1 2025 (HK$ million) | H1 2024 (HK$ million) | | :--- | :--- | :--- | | Thai Optical Cable Sales Revenue | 37.4 | 69.2 | | Sales to Other Countries | 6.8 | 29.3 | | Sales to Germany | 5.6 | 23.1 | | Gross Profit Margin | 3.0% | 9.2% | - The decrease in gross profit margin was mainly due to lower optical cable sales volume and prices in the Thai local market, reduced demand for optical cables and fibers, and the net effect of increased optical cable sales volume but decreased unit prices in ASEAN countries[70](index=70&type=chunk) [High-Tech Bridge](index=31&type=section&id=High-Tech%20Bridge) High-Tech Bridge was severely impacted by low optical fiber prices and oversupply, leading to frequent production line shutdowns and significant decreases in both revenue and net loss | Metric | H1 2025 (HK$ million) | H1 2024 (HK$ million) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 2.3 | 9.9 | -76.8% | | Net Loss | 6.5 | 14.2 | -54.2% | - Oversupply and weak demand for optical fiber led to **frequent production line shutdowns**, with all products sold internally to Futong Thailand[71](index=71&type=chunk) [Prospects](index=31&type=section&id=Prospects) Looking ahead to H2 2025, the Chinese telecommunications industry is expected to benefit from 5G network popularization and digital economy development, with global optical cable demand also projected to grow; however, High-Tech Bridge anticipates continued optical fiber price declines and plans to suspend optical fiber drawing production to focus on new products like butterfly optical cables - Multiple factors, including the rapid popularization of **5G networks**, broadband network coverage, and increased demand from the power industry, are expected to bring significant growth opportunities for the Chinese telecommunications industry[72](index=72&type=chunk) - Global demand for optical fiber and cables is expected to **increase significantly**, creating numerous export opportunities for domestic optical cable manufacturers[74](index=74&type=chunk) - High-Tech Bridge estimates that optical fiber prices will continue to decline due to industry overcapacity and plans to **suspend its optical fiber drawing production** in H2 2025[74](index=74&type=chunk) - All six of High-Tech Bridge's butterfly optical cable production facilities have been installed and are expected to commence production in the **last quarter of 2025**, with active pursuit of OEM collaborations[74](index=74&type=chunk) [Financial Review](index=33&type=section&id=Financial%20Review) This section provides a detailed review of the Group's financial performance, including revenue, cost of sales, gross profit, other income, selling and distribution expenses, administrative expenses, finance costs, taxation, and loss for the period, explaining the reasons for each change - Total revenue decreased by **46.9% to HK$38.7 million** compared to the prior year, primarily due to decreased market demand for optical cables and optical fibers[76](index=76&type=chunk)[77](index=77&type=chunk) - Cost of sales decreased by **41.1% to HK$44.5 million**, but gross loss increased from **HK$2.8 million to HK$5.7 million**, with the gross loss margin rising from **3.8% to 14.8%**, mainly due to a **10.5% decrease in optical fiber gross margin** and a **5.6% decrease in optical cable gross margin**[78](index=78&type=chunk) - A foreign exchange gain of approximately **HK$1.9 million** was recognized, compared to a loss of approximately HK$1.9 million in the prior year, mainly due to exchange rate fluctuations among Renminbi, Hong Kong Dollar, Thai Baht, and US Dollar[81](index=81&type=chunk) - Finance costs decreased to **HK$0.4 million**, primarily due to a reduction in bank borrowings[84](index=84&type=chunk) - Loss attributable to owners of the Company decreased to **HK$12.6 million**, mainly due to the net effect of increased foreign exchange gains, reduced finance costs, and increased reversal of impairment provision for trade receivables, partially offset by increased gross loss and inventory provisions[86](index=86&type=chunk) [Liquidity, Financial Resources and Capital Structure](index=36&type=section&id=Liquidity%2C%20Financial%20Resources%20and%20Capital%20Structure) The Group's primary funding sources are operating cash and bank borrowings; as of June 30, 2025, cash and cash equivalents decreased, bank borrowings increased, leading to a higher gearing ratio, while the capital structure remained unchanged since listing | Metric | June 30, 2025 (HK$ million) | Dec 31, 2024 (HK$ million) | | :--- | :--- | :--- | | Cash and Cash Equivalents | 11.6 | 17.8 | | Total Bank and Other Borrowings | 30.9 | 25.3 | | Gearing Ratio | 8.7% | 7.1% | - The increase in gearing ratio is mainly due to the net effect of repayment of bank borrowings and an increase in total equity primarily from the loss for the period[88](index=88&type=chunk) - The Company's capital structure has remained unchanged since its listing date to the date of this report, comprising only **ordinary shares**[90](index=90&type=chunk) [Treasury Policy](index=36&type=section&id=Treasury%20Policy) The Group adopts a prudent financial management approach, controlling liquidity risk by closely monitoring its liquidity position and maintaining sufficient cash and credit facilities - The Group has adopted a **prudent financial management approach** for its treasury policy and maintains a sound liquidity position[91](index=91&type=chunk) - Management closely monitors the Group's liquidity position and maintains sufficient cash and committed credit facilities to manage liquidity risk[91](index=91&type=chunk) [Contingent Liabilities and Litigation](index=36&type=section&id=Contingent%20Liabilities%20and%20Litigation) As of the end of the reporting period, the Group had no significant contingent liabilities or litigation - As of June 30, 2025, the Group had **no significant contingent liabilities or litigation**[92](index=92&type=chunk) [Environmental Policies and Performance](index=37&type=section&id=Environmental%20Policies%20and%20Performance) The Group is committed to reducing its environmental impact through pollution reduction and efficient resource utilization, striving to comply with relevant environmental laws and regulations - The Group is committed to reducing the environmental impact of its factories and offices through **pollution reduction and efficient resource utilization**[93](index=93&type=chunk) - The Group strives to comply with relevant environmental laws and regulations and continuously improves its performance[93](index=93&type=chunk) [Key Relationships with Employees, Customers and Suppliers](index=37&type=section&id=Key%20Relationships%20with%20Employees%2C%20Customers%20and%20Suppliers) The Group endeavors to maintain good relationships with employees, customers, and suppliers to foster a positive workplace, meet customer requirements, and build long-term supplier relationships - The Group strives to maintain **good relationships with its employees, customers, and suppliers**[94](index=94&type=chunk) [Pledge of Assets](index=37&type=section&id=Pledge%20of%20Assets) Futong Thailand has pledged land and buildings in Rayong, Thailand, as collateral for a credit facility of THB 300 million (approximately HK$68,190,000) - Futong Thailand has pledged a piece of land measuring **58,149 square meters** and buildings thereon located in Rayong, Thailand, as collateral for a credit facility of **THB 300 million (approximately HK$68,190,000)**[95](index=95&type=chunk) [Foreign Exchange Risk](index=37&type=section&id=Foreign%20Exchange%20Risk) The Group faces foreign exchange risk from fluctuations in USD and RMB against THB, and RMB against HKD, and has established a foreign exchange risk management policy - The Group's foreign exchange risk primarily arises from fluctuations in the exchange rates of **US Dollar and Renminbi against Thai Baht**, and **Renminbi against Hong Kong Dollar**[96](index=96&type=chunk) - The Group has established a foreign exchange risk management policy to manage foreign exchange risk[96](index=96&type=chunk) [Interest Rate Risk](index=38&type=section&id=Interest%20Rate%20Risk) The Group faces fair value interest rate risk and cash flow interest rate risk but currently does not use derivatives for hedging, with management maintaining a balanced portfolio of fixed and floating-rate borrowings - The Group's fair value interest rate risk primarily relates to its **fixed-rate bank deposits, lease liabilities, and bank borrowings**[98](index=98&type=chunk) - The Group currently does not use any derivative contracts to hedge its interest rate risk, and management maintains a **balanced portfolio of fixed-rate and floating-rate borrowings**[98](index=98&type=chunk) [Credit Risk](index=38&type=section&id=Credit%20Risk) The Group's credit risk primarily stems from trade and other receivables, which is mitigated through credit limits, monitoring procedures and impairment assessments - The Group's credit risk primarily arises from **trade receivables and other receivables** from customer contracts[99](index=99&type=chunk) - Senior management is responsible for setting credit limits and monitoring procedures, and conducting impairment assessments to estimate expected credit loss amounts[99](index=99&type=chunk) [Liquidity Risk](index=38&type=section&id=Liquidity%20Risk) The Group's management regularly monitors cash flow to maintain funding flexibility by ensuring committed credit facilities are available - The Group's management regularly monitors the Group's cash flow position to ensure **strict control over its cash flows**[100](index=100&type=chunk) - The Group aims to maintain funding flexibility by keeping **committed credit facilities available**[100](index=100&type=chunk) [Capital Commitments](index=38&type=section&id=Capital%20Commitments) As of the end of the reporting period, the Group had no capital commitments - As of June 30, 2025, and December 31, 2024, the Group had **no capital commitments**[101](index=101&type=chunk) [Material Investments Held](index=39&type=section&id=Material%20Investments%20Held) The Group held no material equity investments in any other companies during the reporting period - During the reporting period, the Group held **no material equity investments** in any other companies[102](index=102&type=chunk) [Employees and Remuneration Policy](index=39&type=section&id=Employees%20and%20Remuneration%20Policy) The Group's employee count decreased, and total staff costs slightly declined; the company offers competitive remuneration and internal training, with director and senior management remuneration reviewed by the Board | Metric | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Number of Employees (including directors) | 157 employees | 173 employees | | Metric | H1 2025 (HK$ million) | H1 2024 (HK$ million) | | :--- | :--- | :--- | | Total Staff Costs (including directors' emoluments) | 11.1 | 11.7 | - The Group offers **competitive remuneration packages** and various internal training courses, with directors' and senior management's remuneration reviewed and approved by the Board[103](index=103&type=chunk) [Other Information](index=39&type=section&id=Other%20Information) This section covers additional disclosures including future plans, significant transactions, director and shareholder interests, and corporate governance practices [Future Plans for Material Investments and Capital Assets](index=40&type=section&id=Future%20Plans%20for%20Material%20Investments%20and%20Capital%20Assets) The Group currently has no future plans for material investments and capital assets - The Group has **no plans for any material investments and capital assets**[105](index=105&type=chunk) [Material Acquisitions and Disposals of Subsidiaries or Affiliated Companies](index=40&type=section&id=Material%20Acquisitions%20and%20Disposals%20of%20Subsidiaries%20or%20Affiliated%20Companies) For the six months ended June 30, 2025, the Group had no material acquisitions or disposals of subsidiaries or affiliated companies, nor did it hold any material investments - For the six months ended June 30, 2025, the Group had **no material acquisitions or disposals of subsidiaries or affiliated companies**[106](index=106&type=chunk) - For the six months ended June 30, 2025, the Group held **no material investments**[106](index=106&type=chunk) [Disclosure of Interests of Directors and Major Shareholders](index=40&type=section&id=Disclosure%20of%20Interests%20of%20Directors%20and%20Major%20Shareholders) This section discloses the interests of directors and major shareholders in the Company's shares, confirming no disclosable interests for directors and chief executives, listing major shareholders and their shareholding percentages, and confirming no pledged shares by major shareholders - During the six months ended June 30, 2025, and up to the date of this report, none of the Company's directors or chief executives had any interests or short positions required to be disclosed under the **Securities and Futures Ordinance**[107](index=107&type=chunk) | Shareholder Name | Nature of Interest | Number of Shares Held | Approximate Percentage of Shareholding | | :--- | :--- | :--- | :--- | | Mr. Wang Jianyi | Interest in controlled corporation | 195,000,000 (L) | 75% | | Futong Investment | Interest in controlled corporation | 195,000,000 (L) | 75% | | Futong China | Interest in controlled corporation | 195,000,000 (L) | 75% | | Hangzhou Futong Optical Communication Investment Co., Ltd. | Interest in controlled corporation | 195,000,000 (L) | 75% | | Futong Hong Kong | Beneficial interest | 195,000,000 (L) | 75% | - For the six months ended June 30, 2025, **no major shareholders pledged all or part of their interests** in the Company's shares[113](index=113&type=chunk) [Dividends](index=42&type=section&id=Dividends) The Board of Directors does not recommend the payment of an interim dividend for the six months ended June 30, 2025 - The Board of Directors does not recommend the payment of an interim dividend for the six months ended **June 30, 2025**[114](index=114&type=chunk) [Share Option Scheme](index=42&type=section&id=Share%20Option%20Scheme) The Company does not have a share option scheme - The Company has **no share option scheme**[115](index=115&type=chunk) [Directors' Rights to Acquire Shares](index=42&type=section&id=Directors'%20Rights%20to%20Acquire%20Shares) During the reporting period, no rights to acquire shares or debentures of the Company were granted to or exercised by any director or their respective spouses or children under 18 - During the reporting period, **no rights to acquire benefits by way of shares or debentures** of the Company were granted to or exercised by any director or their respective spouses or children under the age of eighteen[116](index=116&type=chunk) [Public Float](index=43&type=section&id=Public%20Float) The Company has maintained the minimum public float as stipulated by the Listing Rules - The Company has maintained the minimum **25% public float** of its issued shares as stipulated by the Listing Rules[118](index=118&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=43&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company's%20Listed%20Securities) For the six months ended June 30, 2025, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's securities - For the six months ended June 30, 2025, neither the Company nor any of its subsidiaries **purchased, sold, or redeemed any of the Company's securities**[119](index=119&type=chunk) [Compliance with Model Code for Securities Transactions by Directors](index=43&type=section&id=Compliance%20with%20Model%20Code%20for%20Securities%20Transactions%20by%20Directors) The Company has adopted a model code for securities transactions by directors, and all directors have confirmed compliance during the reporting period - The Group has adopted a model code for securities transactions by directors, and all directors have confirmed compliance with the model code during the reporting period[120](index=120&type=chunk) [Competing Interests](index=43&type=section&id=Competing%20Interests) As of June 30, 2025, no directors, controlling shareholders, or their close associates had any interests in businesses that compete or conflict with the Group's business - As of June 30, 2025, no directors, controlling shareholders of the Company, or their respective close associates had any interests in businesses that directly or indirectly compete or may compete with, or have any other conflict of interest with, the Group's business[121](index=121&type=chunk) [Audit Committee](index=43&type=section&id=Audit%20Committee) The Audit Committee, composed of three independent non-executive directors, has reviewed the Group's interim results and confirmed their compliance with applicable accounting standards and proper disclosure - The Audit Committee is composed of **three independent non-executive directors**, with Mr. Leung Chiu Kwan serving as Chairman[122](index=122&type=chunk) - The Audit Committee has reviewed the Group's unaudited condensed consolidated interim results for the six months ended June 30, 2025, and believes that the statements were prepared in compliance with applicable accounting standards and that appropriate disclosures have been made[124](index=124&type=chunk) [Corporate Governance Practices and Other Information](index=44&type=section&id=Corporate%20Governance%20Practices%20and%20Other%20Information) The Company has adopted and complied with the Corporate Governance Code, committed to maintaining high standards of corporate governance to enhance management effectiveness, transparency, risk management, and protect shareholder interests - The Company has adopted the Corporate Governance Code as its own code of corporate governance practices and has complied with it throughout the reporting period[125](index=125&type=chunk) - The Company is committed to maintaining a high level of corporate governance, believing that good corporate governance enhances management effectiveness and efficiency, increases transparency, improves risk management and internal controls, and protects the interests of shareholders and the Company as a whole[125](index=125&type=chunk) [Events After Reporting Period](index=44&type=section&id=Events%20After%20Reporting%20Period) After the reporting period, High-Tech Bridge renewed its property lease agreement with Futong Group International Limited, which constitutes a continuing connected transaction for the Group - High-Tech Bridge renewed its property lease agreement with Futong Group International Limited for a period of **one year starting from July 1, 2025**, which constitutes a continuing connected transaction for the Group[126](index=126&type=chunk) [Compliance with Laws and Regulations](index=45&type=section&id=Compliance%20with%20Laws%20and%20Regulations) For the six months ended June 30, 2025, the Group was not aware of any non-compliance with relevant laws and regulations that would have a material impact on it - For the six months ended June 30, 2025, the Group was **not aware of any non-compliance with relevant laws and regulations** that would have a material impact on it[127](index=127&type=chunk) [Publication of Interim Report](index=45&type=section&id=Publication%20of%20Interim%20Report) This interim report has been published on the websites of Hong Kong Exchanges and Clearing Limited and the Company - This interim report is published on the websites of **Hong Kong Exchanges and Clearing Limited (www.hkexnews.com.hk)** and the **Company (www.transtechoptel.com)**[128](index=128&type=chunk)

Condensed Consolidated Financial Statements [Condensed Consolidated Statement of Profit or Loss](index=1&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E6%90%8D%E7%9B%8A%E8%A1%A8) The Group's revenue rose 13.4% to HK$208,208 thousand, swinging to a profit of HK$5,709 thousand for the period, with HK$8,807 thousand attributable to owners Key Data from Condensed Consolidated Statement of Profit or Loss (For the six months ended June 30) | Indicator | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | Year-on-year Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 208,208 | 183,678 | 13.4% | | Cost of sales and services | (162,925) | (145,398) | 12.0% | | Gross Profit | 45,283 | 38,280 | 18.3% | | Profit (Loss) before tax | 3,776 | (90,808) | Swung to profit | | Profit (Loss) for the period | 5,709 | (90,038) | Swung to profit | | Profit (Loss) for the period attributable to owners of the Company | 8,807 | (82,257) | Swung to profit | | Basic earnings (loss) per share (HK cents) | 0.4 | (3.8) | Swung to profit | [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=3&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E6%90%8D%E7%9B%8A%E5%8F%8A%E5%85%B6%E4%BB%96%E5%85%A8%E9%9D%A2%E6%94%B6%E7%9B%8A%E8%A1%A8) Total comprehensive income reached HK$34,891 thousand, a significant improvement from the prior period's expense, driven by investment property transfer surplus and positive exchange differences Key Data from Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (For the six months ended June 30) | Indicator | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Profit (Loss) for the period | 5,709 | (90,038) | | Surplus on transfer of right-of-use assets and property, plant and equipment to investment properties measured at fair value | 20,206 | 476 | | Exchange differences arising on translation to presentation currency | 15,802 | (4,561) | | Other comprehensive income for the period | 29,182 | 20,781 | | Total comprehensive income (expense) for the period | 34,891 | (69,257) | | Total comprehensive income (expense) for the period attributable to owners of the Company | 37,989 | (61,476) | [Condensed Consolidated Statement of Financial Position](index=4&type=section&id=%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B3%87%E7%94%A2%E8%B2%A0%E5%82%B5%E8%A1%A8) Total assets slightly decreased to HK$1,883,762 thousand, with increased investment properties in non-current assets, while current assets saw a significant decrease in bank balances and cash, offset by a substantial rise in short-term bank deposits Key Data from Condensed Consolidated Statement of Financial Position (As of June 30) | Indicator | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | Change (%) | | :--- | :--- | :--- | :--- | | **Non-current assets** | | | | | Investment properties | 591,019 | 574,540 | 2.9% | | Interests in associates | 75,832 | 49,798 | 52.3% | | Total non-current assets | 780,733 | 743,444 | 5.0% | | **Current assets** | | | | | Inventories | 31,105 | 52,720 | -41.0% | | Trade and bills receivables | 89,314 | 110,823 | -19.5% | | Short-term bank deposits | 744,033 | 580,821 | 28.1% | | Bank balances and cash | 152,879 | 360,313 | -57.5% | | Total current assets | 1,103,029 | 1,177,736 | -6.4% | | **Current liabilities** | | | | | Trade payables | 58,477 | 86,792 | -32.6% | | Bank borrowings | 7,674 | 29,162 | -73.7% | | Total current liabilities | 307,512 | 382,234 | -19.6% | | Total equity | 1,464,807 | 1,429,916 | 2.4% | | Total assets | 1,883,762 | 1,921,180 | -1.9% | | Total liabilities | 418,955 | 491,264 | -14.7% | Notes to the Condensed Consolidated Financial Statements [General Information and Basis of Preparation](index=6&type=section&id=%E4%B8%80%E8%88%AC%E8%B3%87%E6%96%99%E5%8F%8A%E7%B7%A8%E8%A3%BD%E5%9F%BA%E6%BA%96) The Company, a Bermuda-incorporated investment holding entity, operates in mobile and IoT terminals, in-vehicle intelligent products, and China property leasing, with financial statements presented in HKD under IAS 34 and HKEX Listing Rules - The Company is an investment holding company, with principal businesses covering mobile and IoT terminals, in-vehicle intelligent products, and property leasing management in China[9](index=9&type=chunk) - Financial statements are presented in HKD, with RMB as the functional currency, prepared in accordance with IAS 34 and the HKEX Listing Rules[9](index=9&type=chunk) [Principal Accounting Policies](index=6&type=section&id=%E4%B8%BB%E8%A6%81%E6%9C%83%E8%A8%88%E6%94%BF%E7%AD%96) The condensed consolidated financial statements are prepared on a historical cost basis, with exceptions for fair value measurement of investment properties and certain financial instruments, and IFRS revisions had no material impact - Financial statements are primarily prepared on a historical cost basis, with certain assets measured at fair value[10](index=10&type=chunk) - Revisions to IFRS (e.g., amendments to IAS 21) applied during the period had no significant impact on financial position or performance[11](index=11&type=chunk)[12](index=12&type=chunk) [Revenue](index=7&type=section&id=%E6%94%B6%E5%85%A5) Total revenue for H1 2025 was HK$208,208 thousand, primarily from mobile and IoT terminals and property leasing, with in-vehicle intelligent products also contributing, and the majority of revenue originating from the China market Disaggregation of Revenue from Contracts with Customers (For the six months ended June 30) | Type of Goods or Services | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | Year-on-year Change (%) | | :--- | :--- | :--- | :--- | | Sales of mobile and IoT terminals | 174,308 | 156,346 | 11.5% | | Sales of in-vehicle intelligent products | 12,907 | 5,103 | 152.9% | | Property leasing | 20,993 | 22,229 | -5.6% | | **Total** | **208,208** | **183,678** | **13.4%** | - The Group's revenue primarily originates from the China market[15](index=15&type=chunk) [Segment Information](index=8&type=section&id=%E5%88%86%E9%A1%9E%E8%B3%87%E6%96%99) The Group reports revenue, profit (loss), assets, and liabilities across three segments, with mobile and IoT terminals achieving a slight profit in H1 2025, while in-vehicle intelligent products and property leasing management recorded losses Segment Revenue and Profit (Loss) (For the six months ended June 30) | Segment | 2025 Revenue (HK$ Thousand) | 2025 Segment Profit (Loss) (HK$ Thousand) | 2024 Revenue (HK$ Thousand) | 2024 Segment Loss (HK$ Thousand) | | :--- | :--- | :--- | :--- | :--- | | Mobile and IoT terminal business | 174,308 | 583 | 156,346 | (37,436) | | In-vehicle intelligent product business | 12,907 | (14,821) | 5,103 | (25,254) | | Property leasing management | 20,993 | (2,031) | 22,229 | (6,824) | | **Consolidated Profit (Loss) before tax** | **208,208** | **3,776** | **183,678** | **(90,808)** | Segment Assets and Liabilities (As of June 30) | Segment | 2025 Segment Assets (HK$ Thousand) | 2025 Segment Liabilities (HK$ Thousand) | 2024 Segment Assets (HK$ Thousand) | 2024 Segment Liabilities (HK$ Thousand) | | :--- | :--- | :--- | :--- | :--- | | Mobile and IoT terminal business | 212,158 | 180,614 | 219,210 | 201,686 | | In-vehicle intelligent product business | 2,832 | 4,765 | 33,878 | 30,274 | | Property leasing management | 591,019 | 9,685 | 574,540 | 10,133 | | **Total assets** | **1,883,762** | **418,955** | **1,921,180** | **491,264** | [Other Income / Other Gains and Losses](index=10&type=section&id=%E5%85%B6%E4%BB%96%E6%94%B6%E5%85%A5%E2%88%95%E5%85%B6%E4%BB%96%E6%94%B6%E7%9B%8A%E5%8F%8A%E虧%E6%90%8D) Other income for H1 2025 totaled HK$17,663 thousand, mainly from bank interest, while other gains and losses resulted in a HK$9,469 thousand loss, primarily due to investment property fair value changes, partially offset by net exchange gains Other Income / Other Gains and Losses (For the six months ended June 30) | Item | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | | :--- | :--- | :--- | | **Other income** | | | | VAT refunds | 54 | 1,010 | | Government project income | 1,755 | 9,806 | | Bank interest income | 15,080 | 15,389 | | **Other gains and losses** | | | | Fair value changes of investment properties | (14,739) | (21,120) | | Net exchange gains | 3,270 | 4,367 | | Loss on deregistration of subsidiaries | – | (30,764) | | **Total** | **(9,469)** | **(53,670)** | - Government project income primarily consists of unconditional grants to encourage R&D activities[23](index=23&type=chunk) - A one-off exchange loss of **HK$30,764 thousand** was incurred in H1 2024 due to the deregistration of a PRC subsidiary[24](index=24&type=chunk) [Taxation](index=11&type=section&id=%E7%A8%85%E9%A0%85) Taxation for the period was HK$1,933 thousand, mainly from PRC corporate income tax and deferred tax credit, with no Hong Kong profits tax provision due to the absence of taxable profits Components of Taxation (For the six months ended June 30) | Item | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | | :--- | :--- | :--- | | PRC corporate income tax | (4,782) | 3,154 | | Over-provision (under-provision) in prior years | 3,030 | (7,545) | | Deferred tax credit | 3,685 | 5,161 | | **Taxation for the period** | **1,933** | **770** | - No Hong Kong profits tax provision was made, and PRC corporate income tax is calculated based on local tax rates and preferential tax treatments[24](index=24&type=chunk)[25](index=25&type=chunk) [Profit (Loss) for the Period Has Been Arrived at After Charging (Crediting) the Following](index=12&type=section&id=%E6%9C%AC%E6%9C%9F%E7%9A%84%E6%BA%A2%E5%88%A9%EF%BC%88%E虧%E6%90%8D%EF%BC%89%E5%B7%B2%E6%89%A3%E9%99%A4%EF%BC%88%E8%A8%88%E5%85%A5%EF%BC%89%E4%BB%A5%E4%B8%8B%E9%A0%85%E7%9B%AE) Profit for the period reflects charges including depreciation of property, plant and equipment (HK$264 thousand), right-of-use assets (HK$755 thousand), and staff costs (HK$42,070 thousand), all showing a decrease from the prior period Items Charged (Credited) (For the six months ended June 30) | Item | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Amortisation of intangible assets | – | – | | Depreciation of property, plant and equipment | 264 | 5,252 | | Depreciation of right-of-use assets | 755 | 1,208 | | Staff costs | 42,070 | 51,435 | | Cost of inventories recognised as an expense | 162,925 | 145,398 | [Dividends](index=12&type=section&id=%E8%82%A1%E6%81%AF) The Board does not recommend an interim dividend payment for the first half of 2025 - The Board does not recommend the payment of an interim dividend for the first half of 2025[28](index=28&type=chunk) [Earnings (Loss) Per Share](index=13&type=section&id=%E6%AF%8F%E8%82%A1%E7%9B%88%E5%88%A9%EF%BC%88%E虧%E6%90%8D%EF%BC%89) Basic earnings per share for H1 2025 improved significantly to **0.4 HK cents**, compared to a basic loss per share of **3.8 HK cents** in the prior period Calculation of Earnings (Loss) Per Share (For the six months ended June 30) | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | Profit (Loss) for the purpose of calculating basic earnings (loss) per share (HK$ Thousand) | 8,807 | (82,257) | | Weighted average number of ordinary shares for the purpose of calculating basic earnings (loss) per share (Thousand shares) | 2,143,351 | 2,142,207 | | **Basic earnings (loss) per share (HK cents)** | **0.4** | **(3.8)** | [Trade and Bills Receivables](index=14&type=section&id=%E6%87%89%E6%94%B6%E8%B2%BF%E6%98%93%E8%B3%AC%E6%AC%BE%E5%8F%8A%E7%A5%A8%E6%93%9A) Total trade and bills receivables decreased to HK$89,314 thousand as of June 30, 2025, with credit terms typically 0-90 days, though a significant portion remains outstanding for over 180 days Ageing Analysis of Trade and Bills Receivables (As of June 30) | Ageing | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | | :--- | :--- | :--- | | **Trade receivables** | | | | 0 to 30 days | 44,853 | 49,038 | | 31 to 60 days | 15,610 | 11,262 | | 61 to 90 days | 2,492 | 12,632 | | 91 to 180 days | – | 11,807 | | Over 180 days | 26,114 | 27,028 | | Less: Provision for credit losses | (27,290) | (28,429) | | **Total trade and bills receivables** | **89,314** | **110,823** | - The general credit period for sales of products and services ranges from 0 to 90 days[30](index=30&type=chunk) [Trade Payables](index=15&type=section&id=%E6%87%89%E4%BB%98%E8%B2%BF%E6%98%93%E8%B3%AC%E6%AC%BE) Total trade payables significantly decreased to HK$58,477 thousand as of June 30, 2025, with the majority concentrated in the 0-30 day ageing category Ageing Analysis of Trade Payables (As of June 30) | Ageing | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | | :--- | :--- | :--- | | 0 to 30 days | 43,139 | 53,712 | | 31 to 60 days | 1,868 | 7,093 | | 61 to 90 days | – | 15,198 | | Over 90 days | 13,470 | 10,789 | | **Total trade payables** | **58,477** | **86,792** | Management Discussion and Analysis [Business Review](index=16&type=section&id=%E6%A5%AD%E5%8B%99%E5%9B%9E%E9%A1%A7) The Group swung to profit in H1 2025, driven by improved internal management and cost control, with total turnover growing 13.4% to HK$208.2 million, though in-vehicle intelligent products and property leasing management recorded losses - The Group's operating performance for H1 2025 largely swung to profit, primarily due to significant improvements in internal management, cost control, and a substantial reduction in negative impacts from legacy issues[33](index=33&type=chunk) Key Data from H1 2025 Business Review | Indicator | Amount (HK$ Million) | Year-on-year Change (%) | | :--- | :--- | :--- | | Turnover | 208.2 | 13.4% | | Gross Profit | 45.3 | 18.3% | | Profit attributable to owners of the Company | 8.8 | Swung to profit | [Mobile and IoT Terminal Business](index=16&type=section&id=%E6%89%8B%E6%A9%9F%E5%8F%8A%E7%89%A9%E8%81%AF%E7%B6%B2%E7%B5%82%E7%AB%AF%E6%A5%AD%E5%8B%99) This business saw H1 2025 turnover of HK$174.3 million, up 11.5%, achieving a slight profit despite challenges like sluggish sales and overseas market expansion, leading the Group to invest in new AI-driven product segments Performance of Mobile and IoT Terminal Business (H1 2025) | Indicator | Amount (HK$ Million) | Year-on-year Change (%) | | :--- | :--- | :--- | | Turnover | 174.3 | 11.5% | | Gross Profit | 24.7 | Growth | | Segment Profit | 0.6 | Swung to profit | - The business faces challenges including sluggish sales, insufficient quality clients and projects, and difficulties in expanding into overseas markets[34](index=34&type=chunk) - The Group has invested resources in new businesses such as AI glasses, companion intelligent robots, and high-computing power control modules for humanoid robots, building technological expertise to capture market share[35](index=35&type=chunk) [In-vehicle Intelligent Product Business](index=17&type=section&id=%E8%BB%8A%E8%BC%89%E6%99%BA%E8%83%BD%E7%94%A2%E5%93%81%E6%A5%AD%E5%8B%99) This business recorded H1 2025 turnover of HK$12.9 million and a HK$14.8 million loss, mainly due to cancelled orders from a Japanese joint venture client; management has implemented an emergency cost control plan, anticipating manageable losses in H2 Performance of In-vehicle Intelligent Product Business (H1 2025) | Indicator | Amount (HK$ Million) | | :--- | :--- | | Turnover | 12.9 | | Gross Profit | 2.1 | | Segment Loss | 14.8 | - The loss was primarily due to the cancellation of anticipated smart cockpit orders from a Japanese joint venture client, which zeroed out the full-year demand for 2025[36](index=36&type=chunk) - Management has initiated an emergency cost control plan, expecting losses to be within a controllable range in the second half of the year[36](index=36&type=chunk) [Property Leasing Management](index=17&type=section&id=%E7%89%A9%E6%A5%AD%E7%A7%9F%E8%B3%83%E7%AE%A1%E7%90%86) H1 2025 property leasing management revenue decreased 5.6% to HK$21.0 million, with an 88.1% gross margin; despite stable rental income, a HK$14.7 million impairment by the appraiser resulted in a HK$2.0 million loss Performance of Property Leasing Management Business (H1 2025) | Indicator | 2025 (HK$ Million) | 2024 (HK$ Million) | Year-on-year Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 21.0 | 22.2 | -5.6% | | Gross Profit Margin | 88.1% | 90.3% | -2.2 percentage points | | Segment Loss | 2.0 | 6.8 | Improved | | Investment Property Impairment | 14.7 | - | New | - Revenue primarily derived from Shanghai Sim Technology Building and Shenyang factory/commercial properties, with a total leasable area of approximately **78,000 square meters**[37](index=37&type=chunk) [Outlook](index=18&type=section&id=%E5%B1%95%E6%9C%9B) The Group will cautiously navigate complex global trade and fierce competition, focusing on optimizing structure, strengthening marketing, and enhancing R&D efficiency, while strategically investing in 'Terminal + AI' products and key component supply chain platforms to drive new growth - The Group will optimize its structure, establish a product technology sales team to strengthen marketing, and adjust its R&D center to enhance efficiency and reduce costs[38](index=38&type=chunk) - Successfully entered the fields of AI glasses and companion intelligent robots, expected to contribute revenue starting in the second half of the year[38](index=38&type=chunk) - Prototype of high-computing power control module for humanoid robots has been delivered and jointly debugged, demonstrating marketization capability, and the Group will build a key component supply chain platform[38](index=38&type=chunk) [Financial Review](index=18&type=section&id=%E8%B2%A1%E5%8B%99%E5%9B%9E%E9%A1%A7) H1 2025 revenue grew 13.4% to HK$208.2 million, with principal business revenue up 16.0% and overall gross margin at 21.8%; profit attributable to owners of HK$8.8 million marked a turnaround, driven by cost control, reduced legacy issues, and the absence of prior year's one-off exchange loss H1 2025 Financial Review Overview | Indicator | H1 2025 (HK$ Million) | H1 2024 (HK$ Million) | Year-on-year Change (%) | | :--- | :--- | :--- | :--- | | Total Revenue | 208.2 | 183.7 | 13.4% | | Principal Business Revenue | 187.2 | 161.4 | 16.0% | | Non-principal Business Revenue | 21.0 | 22.2 | -5.6% | | Principal Business Gross Profit | 26.8 | 18.2 | 47.3% | | Principal Business Gross Profit Margin | 14.3% | 11.3% | +3.0 percentage points | | Non-principal Business Gross Profit Margin | 88.1% | 90.3% | -2.2 percentage points | | Overall Gross Profit Margin | 21.8% | 20.8% | +1.0 percentage points | | Profit (Loss) attributable to owners of the Company | 8.8 | (82.3) | Swung to profit | - The significant reduction in loss was primarily attributable to team structure optimization, strict cost control, reduced negative impact from legacy issues, and the elimination of a one-off exchange loss (approximately **HK$30.8 million**) in H1 2024[40](index=40&type=chunk) [Segment Results of Core Businesses](index=19&type=section&id=%E6%A0%B8%E5%BF%83%E6%A5%AD%E5%8B%99%E7%9A%84%E5%88%86%E9%A1%9E%E6%A5%AD%E7%B8%BE) H1 2025 saw mobile and IoT terminal revenue grow 11.5% with a 14.2% gross margin, while in-vehicle intelligent product revenue surged 152.9%, though its gross margin declined to 16.6% due to revenue structure changes Segment Results of Core Businesses (For the six months ended June 30) | Segment | 2025 Revenue (HK$ Million) | 2025 Gross Profit (HK$ Million) | 2025 Gross Profit Margin (%) | 2024 Revenue (HK$ Million) | 2024 Gross Profit (HK$ Million) | 2024 Gross Profit Margin (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Mobile and IoT terminal business | 174.3 | 24.7 | 14.2 | 156.3 | 16.8 | 10.8 | | In-vehicle intelligent product business | 12.9 | 2.1 | 16.6 | 5.1 | 1.4 | 26.9 | | **Total** | **187.2** | **26.8** | **14.3** | **161.4** | **18.2** | **11.3** | [Mobile and IoT Terminal Business](index=19&type=section&id=%E6%89%8B%E6%A9%9F%E5%8F%8A%E7%89%A9%E8%81%AF%E7%B6%B2%E7%B5%82%E7%AB%AF%E6%A5%AD%E5%8B%99) H1 2025 revenue grew 11.5% to HK$174.3 million, with gross margin rising to 14.2%, driven by effective 'expenditure based on revenue' strategy, and ODM business comprising approximately 93% of segment revenue - The 'expenditure based on revenue, control expenses' strategy continued to yield results, with operating costs controlled and segment gross profit increasing through optimized team structure, strict expense control, and effective utilization of external resources[42](index=42&type=chunk) - ODM business revenue accounted for approximately **93%** of this segment's revenue (H1 2024: 91%)[42](index=42&type=chunk) [In-vehicle Intelligent Product Business](index=20&type=section&id=%E8%BB%8A%E8%BC%89%E6%99%BA%E8%83%BD%E7%94%A2%E5%93%81%E6%A5%AD%E5%8B%99) H1 2025 revenue surged 152.9% to HK$12.9 million, but gross margin declined from 26.9% to 16.6%, primarily because prior year's revenue included one-off design fees, while current year's revenue was solely from hardware sales - The higher gross profit margin in H1 2024 was due to revenue including one-off entrusted design fees and related R&D expenses not being capitalized[43](index=43&type=chunk) - H1 2025 revenue only comprised hardware sales, with the gross profit margin returning to normal levels for hardware revenue[43](index=43&type=chunk) [Liquidity, Financial Resources and Capital Structure](index=20&type=section&id=%E6%B5%81%E5%8B%95%E8%B3%87%E9%87%91%E3%80%81%E8%B2%A1%E5%8B%99%E8%B3%87%E6%BA%90%E5%8F%8A%E8%B3%87%E6%9C%AC%E7%B5%90%E6%A7%8B) As of June 30, 2025, the Group maintained a sound financial position with a 3.6x current ratio, reduced bank borrowings, and a 0.4% gearing ratio, while adopting a prudent treasury policy and considering hedging USD currency risk - The current ratio was **3.6 times** (December 31, 2024: 3.1 times), indicating good short-term solvency[47](index=47&type=chunk) - The gearing ratio (total bank borrowings divided by total assets) decreased significantly from **1.5%** as of December 31, 2024, to **0.4%**, indicating a substantial reduction in financial leverage[51](index=51&type=chunk) - The Group adopts a prudent treasury policy, depositing surplus funds primarily in banks to earn interest, and considers using financial instruments to hedge USD currency risk[48](index=48&type=chunk) [Liquidity](index=20&type=section&id=%E6%B5%81%E5%8B%95%E8%B3%87%E9%87%91) As of June 30, 2025, the Group held HK$152.9 million in bank balances and cash, HK$744.0 million in short-term bank deposits, and HK$7.7 million in floating-rate bank borrowings repayable within one year Liquidity Position (As of June 30) | Item | 2025 (HK$ Million) | 2024 (HK$ Million) | | :--- | :--- | :--- | | Bank balances and cash | 152.9 | 360.3 | | Short-term bank deposits | 744.0 | 580.8 | | Total bank borrowings | 7.7 | 29.2 | - Bank balances and cash are primarily held in RMB (**70.2%**), JPY (**15.4%**), and USD (**13.3%**)[44](index=44&type=chunk) [Operating Efficiency](index=20&type=section&id=%E7%87%9F%E9%81%8B%E6%95%88%E7%8E%87) H1 2025 saw inventory turnover days significantly decrease to 47, reflecting improved supply and sales management, while trade and bills receivables turnover days slightly increased to 88 due to relaxed credit policies, and trade payables remained stable Operating Efficiency Indicators (As of June 30) | Indicator | 2025 (Days) | 2024 (Days) | | :--- | :--- | :--- | | Inventory turnover days | 47 | 75 | | Trade and bills receivables turnover days | 88 | 82 | | Trade and bills payables turnover days | 109 | 105 | - The reduction in inventory turnover days is attributed to the adoption of an 'on-demand' supply model and more accurate customer demand forecasting[45](index=45&type=chunk) - The increase in trade and bills receivables turnover days is due to a moderate relaxation of credit policies to maintain market share[46](index=46&type=chunk) [Treasury Policy](index=21&type=section&id=%E5%BA%AB%E5%8B%99%E6%94%BF%E7%AD%96) The Group maintains a prudent treasury policy, depositing surplus funds in reputable banks, and considers using non-deliverable forward foreign exchange contracts to hedge its exposure to USD currency risk - The Group's surplus funds are primarily deposited in reputable banks as time and demand deposits[48](index=48&type=chunk) - The Group is exposed to USD currency risk and considers entering into non-deliverable forward foreign exchange contracts for hedging[48](index=48&type=chunk) [Capital Structure](index=21&type=section&id=%E8%B3%87%E6%9C%AC%E7%B5%90%E6%A7%8B) As of June 30, 2025, the Company had 2,143,351,300 ordinary shares of HK$0.10 par value in issue, with no new shares issued during the period - As of June 30, 2025, **2,143,351,300** ordinary shares of **HK$0.10** par value each were in issue[49](index=49&type=chunk) - No shares of the Company were issued during the first half of 2025[50](index=50&type=chunk) [Gearing Ratio](index=21&type=section&id=%E8%B2%A0%E5%82%B5%E6%AF%94%E7%8E%87) As of June 30, 2025, the Group's gearing ratio significantly decreased to **0.4%** from **1.5%** (December 31, 2024), indicating reduced financial leverage Gearing Ratio (As of June 30) | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | Total bank borrowings (HK$ Million) | 7.7 | 29.2 | | Total assets (HK$ Million) | 1,883.8 | 1,921.2 | | **Gearing Ratio** | **0.4%** | **1.5%** | - The Group regularly reviews its capital-to-debt ratio to balance shareholder returns with capital security and adjusts its capital structure accordingly[51](index=51&type=chunk) [Significant Acquisitions and Disposals of Subsidiaries and Associates](index=22&type=section&id=%E9%87%8D%E5%A4%A7%E6%94%B6%E8%B3%BC%E5%8F%8A%E5%87%BA%E5%94%AE%E9%99%84%E5%B1%AC%E5%85%AC%E5%8F%B8%E5%8F%8A%E8%81%AF%E7%87%9F%E5%85%AC%E5%8F%B8) The Group had no significant acquisitions or disposals of subsidiaries and associates in H1 2025 - No significant acquisitions or disposals of subsidiaries and associates occurred in H1 2025[52](index=52&type=chunk) [Future Plans for Material Investments](index=22&type=section&id=%E6%9C%AA%E4%BE%86%E9%87%8D%E5%A4%A7%E6%8A%95%E8%B3%87%E8%A8%88%E5%8A%83) The Group had no future plans for material investments or capital assets in H1 2025 - No future plans for material investments or capital assets were in place during H1 2025[53](index=53&type=chunk) [Material Investments](index=22&type=section&id=%E9%87%8D%E5%A4%A7%E6%8A%95%E8%B3%87) As of June 30, 2025, the Group had no material investments - As of June 30, 2025, the Group had no material investments[54](index=54&type=chunk) [Contingent Liabilities](index=22&type=section&id=%E6%88%96%E7%84%B6%E8%B2%A0%E5%82%B5) As of June 30, 2025, the Group had no material contingent liabilities - As of June 30, 2025, the Group had no material contingent liabilities[55](index=55&type=chunk) [Employees](index=22&type=section&id=%E5%83%B1%E5%93%A1) As of June 30, 2025, the Group had approximately **510 employees**, a decrease from 573, offering MPF, PRC benefits, training, and performance-based bonuses and equity awards Number of Employees | Date | Number of Employees | | :--- | :--- | | June 30, 2025 | 510 | | December 31, 2024 | 573 | - The Group provides employees with Mandatory Provident Fund, PRC-applicable benefits, a comprehensive training system, and performance-based discretionary bonuses and equity awards[56](index=56&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=22&type=section&id=%E8%B3%BC%E8%B2%B7%E3%80%81%E5%87%BA%E5%94%AE%E6%88%96%E8%B4%96%E5%9B%9E%E6%9C%AC%E5%85%AC%E5%8F%B8%E4%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 in H1 2025 - No purchase, sale, or redemption of the Company's listed securities occurred in H1 2025[57](index=57&type=chunk) [Events After the Reporting Period](index=22&type=section&id=%E6%96%BC%E5%A0%B1%E5%91%8A%E5%85%B6%E5%BE%8C%E4%BA%8B%E9%A0%85) No significant events have occurred since the end of H1 2025 - No significant events have occurred since the end of H1 2025[58](index=58&type=chunk) Other Information [Corporate Governance Code](index=23&type=section&id=%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB%E5%AE%88%E5%88%99) The Company deviates from the Corporate Governance Code by having a vacant CEO position since September 2022, but a five-member management team collectively performs CEO duties, an arrangement the Board considers appropriate - The Chief Executive Officer position has been vacant since Mr. Gao Jun's resignation on September 30, 2022, deviating from Corporate Governance Code provision C.2.1[59](index=59&type=chunk) - A five-member management team has been formed to collectively perform the roles and responsibilities of the Chief Executive Officer, an arrangement the Board considers appropriate[59](index=59&type=chunk) [Compliance with the Model Code](index=23&type=section&id=%E9%81%B5%E5%AE%88%E6%A8%99%E6%BA%96%E5%AE%88%E5%88%99) The Company has adopted the Model Code in Appendix C3 of the Listing Rules, with all Directors confirming compliance with its standards throughout the year - The Company has adopted the Model Code set out in Appendix C3 of the Listing Rules, and all Directors confirm compliance with its provisions[60](index=60&type=chunk) [Audit Committee](index=23&type=section&id=%E5%AF%A9%E6%A0%B8%E5%A7%94%E5%93%A1%E6%9C%83) The Audit Committee, comprising all three independent non-executive Directors, has reviewed the Group's accounting principles and interim financial information with management, which was also reviewed by Deloitte Touche Tohmatsu - The Audit Committee has reviewed the Group's accounting principles and interim financial information, which was also reviewed by the auditor, Deloitte Touche Tohmatsu[61](index=61&type=chunk) - The Audit Committee comprises all three independent non-executive Directors[61](index=61&type=chunk) [Publication of Results Announcement and Annual Report](index=24&type=section&id=%E5%88%8A%E7%99%BC%E6%A5%AD%E7%B8%BE%E5%85%AC%E4%BD%88%E5%8F%8A%E5%B9%B4%E5%A0%B1) This results announcement is available on the Company's and HKEX websites, with the interim report to be uploaded to these sites in due course - The results announcement has been published on the Company's website (www.sim.com) and the HKEX website (www.hkexnews.hk)[62](index=62&type=chunk) [Acknowledgement](index=24&type=section&id=%E8%87%B4%E8%AC%9D) The Board expresses gratitude to shareholders, customers, suppliers, bankers, professional advisors, and all staff for their support and contributions - The Board expresses its gratitude to all stakeholders and employees for their support and contributions[63](index=63&type=chunk) [Directors](index=24&type=section&id=%E8%91%A3%E4%BA%8B) As of this announcement date, the Board includes four executive, one non-executive, and three independent non-executive Directors - The Board comprises four executive Directors, one non-executive Director, and three independent non-executive Directors[64](index=64&type=chunk) [Forward-Looking Statements](index=24&type=section&id=%E5%89%8D%E7%9E%BB%E6%80%A7%E9%99%B3%E8%BF%B0) This announcement contains forward-looking statements that are not guarantees of future performance, as actual results may differ materially from expectations due to various risks and uncertainties - Forward-looking statements are not historical facts or guarantees of future performance, and actual results may differ materially from expectations due to risks, uncertainties, and other factors[66](index=66&type=chunk)

Financial Performance - Revenue for the six months ended June 30, 2025, was RMB 3,619.8 million, a decrease of 10.2% compared to RMB 4,031.8 million for the same period in 2024[3]. - Gross profit decreased by 12.6% to RMB 709.0 million from RMB 811.5 million in the same period of 2024[3]. - Operating profit fell by 84.0% to RMB 40.2 million compared to RMB 252.0 million in 2024[4]. - Profit for the period was RMB 22.3 million, down 89.4% from RMB 210.8 million in the same period of 2024[4]. - The gross margin was 19.6%, a decrease of 0.5 percentage points from 20.1% in 2024[71]. - The net profit attributable to the company’s equity holders for the six months ended June 30, 2025, was RMB 8.52 million, a decline from RMB 183.97 million for the same period in 2024[94]. - Basic earnings per share for the period was RMB 0.003, down from RMB 0.075 in the previous year, reflecting a decline in profitability[96]. Revenue Breakdown - Property management services revenue was approximately RMB 2,812.3 million, accounting for 77.7% of total revenue, with a year-on-year increase of 1.9%[3]. - Community value-added services revenue was RMB 538.9 million, representing 14.9% of total revenue, down 8.1% from RMB 586.7 million in 2024[69]. - The gross profit from property management services was RMB 562.7 million, up 1.7% from RMB 553.1 million in 2024, maintaining a gross margin of 20.0%[33]. - Community asset management services generated revenue of RMB 123.4 million, an increase of 8.5% from RMB 113.7 million in 2024[47]. - Smart scene solutions revenue fell to RMB 4.0 million, a decline of 91.5% from RMB 47.3 million in 2024[48]. - Urban services revenue was RMB 207.4 million, a significant decline of 65.6% from RMB 603.2 million in 2024[54]. Operational Metrics - The company achieved a new annualized contract value of RMB 958.4 million, up 54.6% year-on-year, and added a new contracted construction area of 40.1 million square meters, an increase of 126.6% year-on-year[14]. - The management expense ratio was effectively reduced to 9.4% through comprehensive management efficiency enhancement initiatives[18]. - The number of managed projects decreased by 1.7% to 1,466 from 1,491 in the previous year[30]. - The managed building area decreased by 10.0% to 222.3 million square meters from 246.9 million square meters in 2024[30]. - The contracted building area increased by 3.2% to 343.4 million square meters from 332.6 million square meters in 2024[30]. Cash Flow and Assets - Cash and cash equivalents, including time deposits with maturities over three months, increased by 27.7% to RMB 4,807.4 million from RMB 3,764.2 million as of December 31, 2024[4]. - As of June 30, 2025, accounts receivable amounted to RMB 3,635.3 million, an increase of 7.6% from RMB 3,378.3 million as of December 31, 2024[87]. - As of June 30, 2025, accounts payable reached RMB 1,996.7 million, reflecting a significant increase of 41.4% from RMB 1,412.3 million as of December 31, 2024[89]. - Current assets totaled RMB 9,819.1 million as of June 30, 2025, up 1.8% from RMB 9,648.9 million as of December 31, 2024[90]. - Total assets as of June 30, 2025, were RMB 13,357,655 thousand, a slight increase from RMB 12,987,478 thousand as of December 31, 2024, representing a growth of about 2.8%[111]. Strategic Initiatives - The company aims to enhance customer satisfaction by establishing a quantitative indicator system to drive continuous upgrades in service processes and quality control[20]. - The company plans to deepen its focus on non-residential, residential, and urban services, continuously improving project service capabilities to increase customer satisfaction and loyalty[21]. - The company aims to enhance elderly care services by improving hardware facilities and providing personalized software services[22]. - The company is committed to social responsibility and sustainable development, aiming for recognition as a leading low-carbon operation enterprise by 2025[26]. - The company plans to enhance its technological capabilities through new product development and strategic partnerships in the upcoming fiscal year[99]. Employee Metrics - As of June 30, 2025, the group had 34,592 employees, a decrease of 21.4% compared to 44,011 employees in the same period of 2024[56]. - Total employee costs amounted to RMB 1,517.7 million, down 16.4% from RMB 1,815.3 million in the same period of 2024[56]. Market Conditions - The Chinese real estate industry continues to adjust, with a notable decline in new residential sales area and sales amount, although the decline has narrowed compared to the previous year[6]. - The shift in urban development focus from "building new cities" to "upgrading old cities" presents significant opportunities for property management services[7]. - The demand for community value-added services is expected to grow, driven by improvements in living environments and residents' evolving needs[10].